Professional Documents
Culture Documents
First of all I am thankful to Almighty Allah who gave me knowledge and power to make
me able to complete my internship successfully.
I shall also like to wish to acknowledge and show my deep gratitude to our respective
teacher, Ms. Mehnaz Khan, for her consistence, advice and support given during the
writing up of this report.
I offer my heartiest tribute and cordial gratitude to present my thanks to Mr. Shakeel
Ahmad Nadeem Operation Manger of ABL Jhang Branch and Mr. Shafqat Abbas Credit
Incharge of ABL Jhang for their kind support and cooperation in this project.
To Mr. Farooq Bosan, I owe more than what I can mention….her inspiring guidance,
remarkable suggestions, constant encouragement, keen interest, constructive criticism,
and friendly discussion enabled me to complete this report efficiently. Without her
support and proper guidance, it would be almost impossible to accomplish this task
successfully.
Table Of Contents
Page No.
Acknowledgements 1
List of Tables 3
List of Acronyms 4
Executive Summary 5
Section 1
INTRODUCTION TO ABL 7
The Mission 10
Core Values 11
Corporate Philosophy 11
Section 2
REVIEW 12
Credit Department 13
Deposit Department 27
Remittance Department 30
Section 3
ANALYSIS 46
Financial Analysis 47
SWOT Analysis 49
Strength 49
Weaknesses 49
Opportunity 49
Threat 50
Section 4
Findings 52
Recommendation 56
Reference 58
List of Tables
1. Organizational Hierarchy
4. Financial Performance
LIST OF CHARTS
1. ORGANOGRAM
List of Acronyms
EF Export Finance
LC Letter of Credit
FS Financial Statements
RF Running Finance
CF Cash Finance
CD Call Deposits
TF Term Finance
DO Delivery Order
CSA Credit Sanction Advice
DP Drawing Power
SS Specimen Signature
DD Demand Draft
TT Telegraphic Transfer
PO Pay Order
EXECUTIVE SUMMARY
The Department of Administrative Sciences was established in 1975 and offers Masters
Degree in Business and Public Administration. They are giving the best education and are
offering for specialization, financial management, marketing management and computer
application to business. An important programmed is six to eight weeks internship with
any recognized institution.
I decided to take up Askari Commercial Bank Limited for my internship because its
competing bank nowadays and gives a good training to the internees. So in order to learn
more this was my choice.
This report is about my internship that I have undergone at Askari Commercial Bank
th June 2003 to 10th August, 03. During my internship I am able
Limited Multan Branch from 26
On the very first day of my internship I reported to Human Resource Manager / Operation Manager
Shakeel Ahmad Nadeem. He gave me small introduction of the bank and introduced me to the staff of
the bank. Every internee is rotated among the bank’s departments and so was I. This rotation is done in
order to have general concept regarding bank’s functions, operations and policies. In this rotation the
stay in department is usually a week. I have learned more about the Bills and Foreign Trade department
and have given below the caption of activities I was involved in during the period of six weeks.
During my internship I found that Askari Bank is a best bank in Jhang because most of the Exports and
Imports in Jhang are done through this bank. Jhang is one of the cotton growing cities of Pakistan.
Most of the businesses in Jhang are directly or indirectly linked to cotton that is also the case with
Askari Bank’s clients. Because Jhang is a Agricultural City, and its major export is Cotton and Mango.
So its export is done on seasonal basis. In the season of cotton and Mango export Askari Commercial
Bank get its target easily but difficult for it to get its target in the off season. Same with the case of
imports, in Jhang major imports is Oil Seeds which is also done on seasonal Basis.
Low profit rates are one of the major reasons for not meeting the deposit targets. The profit rates on
Askari deposit schemes are quite low when compared with other banks especially with the National
Saving Centers. In today every customers is the rational customer he knows the value of money and
Earlier Askari Commercial were able to attract customer due to their ancillary services like ATM
Cards, Credit Cards, Online Banking etc. but now all the banks are offering these services through their
own network or through third party contracting, so our plus points are no more our advantages. So the
only thing through which ACBL can increase their deposits are profit rates, because the customers only
SECTION 1
INTRODUCTION TO ASKARI COMMERCIAL BANK
INTRODUCTION TO BANK 1:
Askari Commercial Bank Limited (ACBL) works as a Unit of Army Welfare Trust was established
for the Welfare of Army Officials. The office of Army Welfare Trust is situated at AWT Plaza,
Rawalpindi. AWT offers the “AWT Saving Scheme” to the army officials only. AWT has its units as
under:
1. Askari Associates.
2. Askari Leasing.
3. Askari General.
4. Private Business.
5. Textile Mills.
6. Cement Industry.
Incorporated in Pakistan on October 09, 1991. The bank obtained business commencement certificate
on February 26, 1992 and started operations form April 1, 1992, as public limited company, and has
since expanded into a nation-wide presence of 51 branches, supported by a network of online ATMs.
The Bank is listed on the Karachi, Lahore and Islamabad Stock Exchanges and the initial public
offering was over subscribed by 16 times. Askari Commercial Bank is scheduled Commercial Bank
and is principally engaged in the business of banking as defined in the Banking Companies Ordinance
1962.
Askari Commercial Bank limited continues to scale new heights in all areas of its operations. The
safety and security of depositor’s funds, high productivity and optimum use of technology are the
shareholders. Share price of ACBL has remained approximately 12% higher than the average share
Askari Bank is principally engaged in the business of banking as defined in the Banking Companies
Ordinance, 1962. as at December 31, 2002 the Bank had total assets of PKR 70.313 billion, with over
Askari Bank is the only bank with its operational Head Office in the twin cities of Rawalpindi-
Islamabad, which have relatively limited opportunities as compared to Karachi and Lahore. This
created its own challenges and opportunities, and forced us to evolve an outward-looking strategy in
terms of our market emphasis. As a result, we developed a geographically diversified assets base
instead of a concentration and heavy reliance on business in the major commercial centers of Karachi
and Lahore, where most other banks have their operational Head Offices.
Multan is a cotton city, so to get the export market of cotton ACBL open its branch in Multan in
December, 1994. In a short span of time this branch increase their business remarkably. In 2001 this
branch gets the trophy of highest profit for the year 2001. This branch has highest deposits and
advances as compare to other banks working in Multan. Now recently this branch gets the trophy of
highest imports for the month of July 2003 as compare to all the branches of Askari Commercial Bank
working in Pakistan.
Awards & Achievements 2
Over the years, ACBL have received several awards for the quality of our banking service to
individuals and corporate. ACBL have been declared “The Best Bank in Pakistan” by the Global
Finance magazine for the years 2001 & 2002. Also, ACBL have been given the “Best Consumer
Internet Bank” award for Pakistan by the same magazine for the year 2002. in 1994, 1996 and 1997,
ACBL received Euro money and Asia money awards. Askari has A1+ rating for short-term obligations
– the highest possible for the category, while the long-term rating stands at AA. Askari Bank won the
prestigious “Best Presented Annual Accounts” awards for 2000 and 2001 from the Institute of
Chartered Accountants of Pakistan and the Institute of Cost and Management Accountants of
Pakistan, for the services sector. For the past four years, ACBL have received prizes from the South
Asian Federation of Accountants for “The Best Presented Annual Accounts” for the financial
Over the years, Askari Bank has proved its strength as a leading banking sector entity, by achieving the
I. First Pakistani Bank to offer on-line real time banking on a countrywide basis.
The Mission 4
“To be the leading private sector bank in Pakistan with an international presence, delivering
quality service through innovative technology and effective human resource management in a
modern and progressive organizational culture of meritocracy, maintaining high ethical and
professional standards, while providing enhanced value to all our stakeholders, and contributing
to society”.
Core Values 5
The intrinsic values, which are corner stones of our corporate behavior, are:
Commitment
Integrity
Fairness
Team-work and
Service
Corporate philosophy 6
Inspiring Relationships
From knowing our customer requirements to understanding employee needs, from utilizing modern
practicing corporate ethics… We are continuously and consistently striving to address newer
Build and manage the Bank’s portfolio of business to achieve strong and
Create and leverage strategic assets and capabilities for competitive advantage.
SECTION 2
REVIEW
CREDIT DEPARTMENT
To give credit is to finance directly or indirectly the expenditure of others against future payment.
Lending or financing is one of the basic functions of banks of all categories, through which they gain
major part of their profits. A bank accepts deposits of money and repays cash to its depositors on
demand. But this is not to say that; bank gives this service for nothing. Bank borrows money at a lesser
rate of interest and lends to the borrower at higher rate of interest. And the difference between these
Credit department deals with all the activities related to giving credit to customers.
1. Proposal
2. Processing
3. Decision
4. Documentation
5. Disbursement
6. Review
PROPOSAL:
The first step in the Credit Management is receiving a credit request, which is a lending proposal for
the bank each borrower has a purpose for borrowing. Some borrow to fulfill their working capital
needs, others wants to finance any project. The customer presents his idea to the banker and wants the
information on bank’s facilities. Then after collecting information if the customer deems it beneficial
Managing a safe, healthy and profitable credit portfolio depends on the quality of judgment exercised
by the officer and the depth of their risk associated with the nature of the borrowers business. The
banker is supposed to make a judicious judgment, which should be based on a critical study of advance
proposals. It is very much necessary that the banker should have a complete confidence in the integrity
and ability of the customer to use the money to his advantage and repay it within a reasonable period.
Information must be collected and confirmed by investigation and negotiation during processing of the
proposal.
In respect of fresh (ending proposal, the CLP is the end result of a series of internal and external
investigation exercises following the identification of a potential customer, beginning with the first call
on the customer.
EVALUATION:
To assess the risk and estimate the potential of a particular business, a series of investigative exercise is
undertaken. This evaluation stage include knowing the purpose of borrowing, knowing business
prospects of a customer, visiting the business place, analysis of financial statement, visiting the
PURPOSE OF BORROWING:
The borrower must disclose factual purpose for seeking financial accommodation from bank without
8. Buildings.
country.
Different Advance Facilities are offered according purpose of borrowing. Some facilities may be used
for specific purposes because of their very nature and therefore, risk involved in extending them can be
accurately identified; for example; an LC Facility can be used only for imports and depending on the
items being imported, risk can be assessed reasonably and accurately. But other facilities however may
be used for a variety of purposes and it may not be possible to assess the risk as accurately. It is,
therefore, important that in all cases facilities is extended only after understanding precisely the use to
which they will be put, and monitoring systems devised to ensure that their use is confined to disclose
purposes only. Because without these safeguards, risk involved in extending them would not remain
Fortunes of business enterprises fluctuate with changing trends in their respective business and
industrial sectors. All businesses grow in spite of individual weaknesses and shortcomings. But during
recession in an industry some companies suffer more then other because of their particular
or distribution arrangements, sales and receivable management, sales and receivable management and
Aside from fluctuating market conditions caused by temporary imbalances in demand and supply,
which result in unusual growth or slump in sales, there is a gradual impact of the natural life cycle of
industries and their products. Product life cycles are characterized by an initial period of rapid sales
growth followed by the period of decline in growth rate signifying weakening of demand, either slowly
Thus while preparing CLP, the concerned officer must look at these trends to identity both short term
as well as long term prospects of the business of the borrower in the market place and the economy as a
whole. He must also satisfy himself about capacity of the borrower to survive these shocks as and when
FINANCIAL ANALYSIS:
The purpose of analysis of Financial Statement (FS) is to examine past and current financial data so
that a company’s performance and financial position can be evaluated and future risk and potentials can
be estimated. The analysis can yield valuable information about trends and relationship, the quality of
Financial Statements among other things include balance sheet and income statement. Balance sheet
represents assets and liabilities of the business at a given data. Besides showing the ability of the
business to service the loans on the strength of its financial structure. It also helps in evolving secured
basis for extending financial support. Apart form showing the profitability of a business, income
statements disclose how the business has been conducted and determines factors behind a rise or
Valuation of collateral securities is an area which is fraught with dangers because there can be errors of
judgment or deliberate over estimation for ulterior purposes. As far as cash and other liquid securities
are concerned, there is not difficulty in disposing them of because their merits are self-evident.
However, in respect of real estate, there are some important aspects, which need special examination.
An additional problem with collateral securities are that there is many security types whose valuation
remains subjective because of the fact that there are no verifiable market prices quoted for them.
When any asset of the customer is taken into charge with the bank, the concerned officer visits the
security and examines the suitability of the security for the facility required by the borrower. Banker
must also check whether there are any existing charges on the asset because is that case the institution
which has registered the charge first will have prior claim on the proceeds on the event of borrower’s
liquidation.
After that a surveyor examines those fixed assets and estimates their value. It should be remembered
that not every surveyor is competent to value every type of asset. So reliable experts competent to
NEGOTIATION:
While processing a loan proposal, a banker has to do a detailed negotiation with the customer, to have
first hand knowledge about certain things and then confirm them. The negotiation phase is very
important for creating a safe credit portfolio. The information collected in this phase may include the
type of advance, the mode of creating charge over securities, the source of repayment and period for
It is popularly known as overdraft. It is offered for working capital requirement of the customer. It is
created in current account adjustment from time to time finally on expiry date. This facility is normally
issued against hypothecation of immovable property. It is allowed to the borrower under a pre-
sanctioned limit. A current account is opened and the conduct of this account is kept under review for a
period of three to six months. The borrower can draw cheque on his account maximally up to the
amount of limit sanctioned to him. The amount outstanding against the borrower is mark-up will be
changed on the basis of the amount outstanding. This facility is issued on revolving basis repayment
should be completed by the maturity date. Repayment in monthly installments is not required.
It is also offered for the working capital requirement of the customer. It is the type of loan in which
client is given cash in lump sum it is offered against the pledge of moveable property or stock of
borrower. In majority of the cases this finance is allowed against pledge of stock. The amount of
finance is credited to borrowers CD account and he/she utilizes it for business purposes. Repayment is
not made by monthly installments. Adjustments are linked with delivery of goods kept under bank’s
pledge. Goods are pledge when the payment is done on delivery order of the bank. Goods released are
equivalent in value to the repayment amount and remaining goods are stills kept in pledge with bank
for further recovery. Goods are released on the Delivery Order (DO) by the bank to the Go down
Officer.
Term finance is offered to client for investment in any project or business. It is issued for fixed time
period. The amount of finance is credited to borrowers personal account by debiting the Term Finance
Account. The amount of finance is credited to borrowers personal account by debiting the Term
Finance Account. The amount of Finance is disbursed in lump sum. Partial transactions are not allowed
in the Term Finance account. The repayment of Term Finance is usually in installments and with other
documents a letter of installments is taken from the borrower at the time of disbursement. By that letter,
the borrower binds him to pay the installments at regular intervals. Monthly repayment amount is
This type of finance is offered to the importer to finance their needs for meeting the cost including
freight, insurance, and customs and excise duty payable on the imported merchandise. The lending
bank mostly pledges the imported goods. The merchandise is released for the use of the importer
(borrower) upon repayment of the bank’s finance and charges either fully or partially, on production of
These are those types of facilities in which funds are not directly involved.
LETTER OF CREDIT:
sight are held as security till their retirement. Drafts drawn under usance are for a tenure specified in
Credit line proposal must clearly state the type of letter of credit the branch is intended to issue.
LETTER OF GUARANTEE:
Guarantees issued by the bank can be classified under two broad categories.
Bank guarantees the fulfillment of a financial commitment on behalf of the customer. Under
these guarantees, the bank is called upon to pay in the event of a breach of terms on the part of
the customer.
The bank guarantees the due fulfillment of a contract or other work as specified in the
guarantee, by the customer. The amount of guarantee is usually up to the extent of the value of
the contract.
Primarily bankers rely on the character, capacity and capital of the borrower in ensuring the safety of
his funds. The viability of the project itself and its cash generating capacity ensure to a large extent the
safety of bank funds. But the banker cannot afford to take any risk and hence the reliance is placed on
the tangible assets of the borrower. In case of default by the borrower in repaying the loan the banker’s
interest if safeguarded if he possesses change or right over the tangible assets of the borrower. Loans
with such rights conferred upon the bankers are called secured advances. In secured advances, charges
are created on the tangible assets in several ways depending upon the nature of assets. Modes of
1. Lien
2. Pledge
3. Hypothecation
4. Mortgage
Lien:
Lien has been defined as the right of a person to retain the property of the borrower until a debt due
from him (borrower) is repaid. In ordinary lien, the ownership of the property under the lien remains
with the borrower, although its actual or the lien remains with the borrower, although its actual or
constructive possession is with the creditor, though the creditor does not have any right to sell it. This
is not the case with banker’s lien, as a banker’s lien is an implied pledge and the banker has the right to
sell the securities under lien after giving a reasonable notice to the borrower in case of his default.
Pledge:
The bailment of goods as security for payment of a debt or performance of a promise is called pledge.
The relationship of a customer and a banker is this case is that of a pledger (customer) and a pledgee
(banker). The ownership of the goods, pledge remains with the borrower, while the possession is with
the banker.
Bailment is the delivery of goods by one person to another for some purpose, upon a contract that they
shall, when the purpose is accomplished be returned or otherwise, disposed off according to the
Mortgage:
A mortgage is the transfer of an interest in specific immovable property for the purpose of securing the
The transferor is called a mortgagor and the transferee a mortgagee. The principal amount and the
interest of which the payment is secured are called the mortgaged amount and instrument (if any) by
The mortgage does not transfer the ownership of the property and the actual possession of the property
is also not transferred. He (mortgagor) transfers only some of his rights as an owner e.g. He now cannot
Hypothecation:
An agreement to give a charge to goods or documents of title without conferring possession is called
hypothecation. The goods are charged as security for a loan form the bank but ownership and
possession remains with the borrower. The security is granted by the borrower to the lender by a letter
of hypothecation, which contains the terms and conditions of the hypothecation agreement.
As physical possession of goods remains with the borrower, the banker seeks periodical stock reports
from the borrower confirming full description and value of the stock hypothecated. In order to prevent
a possible loss of stock by fire, theft, dacoity, and the borrower is asked to get his stock insured. The
hypothecated stock is liable to be inspected by bank’s authorized person. The creditor (Banker) has the
The banker’s most important single consideration should be on time repayment of the credit extended t
a borrower from the normal business operations of the borrower. Availability of collateral securities
although essential should never be considered for extending credit. Any proposal, about which
repayment from normal business operations of the borrower is uncertain, even though it is supported by
good securities, is unfit for consideration. Bankers obtain collateral securities from borrowers for
recovering credit if market conditions make it impossible for the borrower to repay, not as a protection
against borrower’s dishonesty. If the borrowers intentions are doubtful, better not lend at all because
It is, therefore, important that the CLP must mention the scenario for repayment and identify the
First source of the repayment is the revenue generated by the business of the borrower. For this, the
Second source of repayment is the general cash flow of the borrowers business arising out of
Third and the least derivable source of repayment is encashment of collateral securities.
Period of Financing:
The period for which the finance is issued is called the maturity period. It may be for a month two
months, 3 months, 6 months and for a maximum period of 1 year. If the facility of advance is allowed
Bank credit decision for any proposal has to be very rational one, because there are many restrictions
on monetary and credit expansion by the State Bank of Pakistan and it is no longer within the power of
banks to distribute it freely. Credit office must learn to make the best use of the bank’s available
deposits by deploying them in the most productive advances. To make a prudent decision it is required
that decision should be made only after comparing the benefits available from several competing
proposals and agree to finance the proposal which offers a risk-reward combination closest to the
standard set out in the Bank’s Credit Policy. Before recommending facilities for any customer, banker
must ask himself the question “Why should we lend to this customer in particular? Why not the next
one?”
anticipated from the borrower in relation to the funded facilities and projected earnings from facility
utilization by the borrower. In case of renewal of existing facilities the consideration is the business
received in the past and earnings and that promised by the borrower for the following year.
Besides these, there could be other supplementary considerations such as deposits of the borrower,
including title, amount, period and profit / interest rate being paid on such deposits is important in order
The entire information will help the decision maker in reaching a conclusion about the relative
importance of the customer for the bank. But for making a profitable and safe decision, the information
on which the decision is based should be gathered carefully and checked that the figures are correct.
After receiving the proposal and processing it by analyzing it’s all risk-return characteristics, the credit
officer prepares CLP. CLP is the input of the decision stage, which is used for approval of the proposal.
Once the CLP is prepared, first Branch Credit Committee approves it and then it is forwarded to Head
Office, from where the final decision is made. The Credit Officer first uses his judgment and
recommends potential proposals. Then Branch Credit Committee further screens out risky proposal. In
DOCUMENTATION:
Document shall include any matter written, expressed or described upon any substance by means of
letters, figures or marks or by more than one of those means which is intended to be used for the
Obtaining the proper documents, legally valid and enforceable, is a prerequisite for the disbursement of
an advance by bank. The type of document to be obtained mainly depends on the following aspects:
Type of Borrower.
Nature of Facility.
Kind of Security.
Mode of Charge.
Rights and liabilities of the parties involved in the credit transaction are mainly established from the
contents of the documents executed by the parties. The banks resorting to the court of law would only
be benefited if the documents are properly executed and they are valid and enforceable at law. If there
is any defect in execution of the documents, the bank may lose its claim. So, it is very essential to have
Nothing is better proof than the documents themselves for the banker in pleading for his claim.
2. The parties should sign according to their usual specimen signatures; initials of the
The executing person under his full signature if any must authenticate the cuttings.
a. Properly diaries.
b. Placed in Safe.
Credit Department. These documents carry a substantial value and create a great problem if any
dislocation occurs. Different documents are of different values. These documents are counted, stamped
and properly placed in the strong room of the branch. A separate ledger is maintained for these blank
documents for accounting purpose. After a short time period, the total value of actual documents is
Disbursement:
1. Proper documents, which are legally valid and enforceable at law, are obtained.
2. The concerned Credit Officer in the branches prepares proposal (CLP), it is also
known as Credit Sanction Advice (CSA). The purpose of making CLP is to record the
required information on it and having approval of the Branch Credit Committee and
Date of opening.
Date of maturity.
Nature of the business.
Type of facility.
Purpose of facility.
Securities.
Source of repayment.
and takes decision whether to give loan or not. This decision is taken by keeping in
5. New account with a new account number is opened. These account numbers are
6. The Drawing Power (DP) is issued to each borrower. Drawing Power depends on
7. There are two accounts maintained for each borrower, Credit Account and the
borrowers account. In the start, the credit account has a credit balance equal to the
amount of loan.
8. After all other requirements are fulfilled; the loan is actually transferred to the
borrower by debiting the credit account and crediting the customer account.
9. Now the borrower can draw the amount from his account according to his allotted
10. After a fix time period, on each installment date, borrower has to repay the
principal and mark-up. Loan repayment installments are deducted by debiting the
Account monitoring system is an evaluation technique intended to provable a basis for reviewing over
all condition of an existing borrower. It will help in identifying symptoms of possible problems in the
areas of financial or business management and indicate the need for corrective action to prevent the
account form becoming slow moving or eventually delinquent. This exercise of monitoring alerts the
amulets or account manager to the need for appropriate corrective action starting with a detailed
discussion with the borrower to understand the borrower’s point of view on the areas high lighted by
In this section, different things about the current status of the account are checked. For instance, what is
limit of the account? What drawing power was allotted to the borrower? What is the outstanding
balance? Since when the account is inactive? What is the Net Asset Value?
The borrower draws cheques of what maximum value? Is post dated cheques drawn by the borrower
Instead of giving loan to the general public Credit Department of Askari Commercial Bank performs
various activities to facilitate the general people and Armed Forces. Recently ACBL performs various
DHA (Defence Housing Authority) of Karachi has recently announced his new scheme in the name of
Creek City. This project is started in DHA Karachi Phase-VIII. In this project Four types of
205000/-, out of which Rs. 5000/- are non-refundable. 90% of the amount out of Rs 150000/- and Rs.
200000/- are finance by ACBL. This amount is repay in the period between 1 to 5 years and the
markup rate is 8.5% on the financed amount. Conditions of financing is that the person must be the the
account holder of the bank whether that person is salaried class, business class or army officer. Askari
Commercial Bank takes no security against this financing, except they accept the promissory note
Askari Bank recently started a new financing project that is Askari Bank’s Personal Finance.
According to this financing Scheme only Armed forces can avail. Following are features of this
financing scheme:
Featuring:
Minimum length of confirmed service with present employer is at least six months with a total
DEPOSITS DEPARTMENT
Deposit is the functional unit of a Commercial Bank. No bank can run its operations without deposits.
Main function of a commercial bank is to channelize saving from the savers to the ultimate users of
Demand Deposit:
These are payable on demand. They include current account, sundry deposit (e.g. margin account) and
Time Deposit:
Payable on demand with certain maturity. Attracts profit with respect to time.
TYPE OF ACCOUNTS:
Saving deposits were introduction to inculcate and encourage the of saving among people of small
means in order to achieves of Islamisation of the banking system in the country, the government
authorized the banks to accept Saving Deposit on profit and loss sharing basis. Deposits received under
this scheme are invested in non-interest bearing advances and other avenue so as to eliminate the
element of interest.
Points to Remember:
1. The PLS Saving Account may be opened in the name of an individual, or jointly in
the names of two or more persons. These accounts may also be opened by charitable
institutions or got provident fund and other funds of benevolent nature by local
bodies, autonomous corporations, companies, associations, societies and educational
institutions.
2. PLS SB Accounts can be opened with initial cash deposit of not less than Rs.10000.
Rs.500 (or as per bank policy announced from time to time) will have to be
3. Not more than one account may be opened in any one name except in cases where
such accounts are opened in the name of parent of guardian for more than one child.
4. Statement of PLS accounts are normally provided once in every six month as on
5. No service charges shall be levied on PLS saving account as per SBP prudential
regulations.
from 6th of the month till the end of the month. The profit is paid on half yearly basis
7. Zakat at the rate of 2.5% is deducted from the PLS SB account holders on the 1st
9. The rate of return on PLS account vary with minimum balance. The rate of return is
Current Account:
A current account is a running account, which is continuously in operation, by the customer on all
working days of the bank. The customer deposits without the current deposits without previous notice
to the bank.
Points to Remember:
1. Current account can be opened with an initial deposit of not less then Rs.5,000. The
4. Bank does not pay any interest on these deposits, as they can be withdrawn without
notice.
with ease.
Fixed or term deposits are the major source of funds of a commercial bank. Term deposits, as the name
implies, are deposits kept with a bank for a certain period of time. They are not payable on demand like
the current deposit. The depositor can only withdraw them after the specified period of time. The
persons or firms trust, religious bodies, which have surplus funds keep the money in fixed deposits
with bank.
Points to Remember:
1. PLS Term deposit are grouped into the following categories: 1 Month, 2 Months, 3
4. Because the deposited amount remains fixed during the period the profit is
6. The holder of Term Deposit cannot issue cheque for the withdrawal of the amount.
REMITTANCE DEPARTMENT
The need of remittance is commonly felt is commercial life particularly and in everyday life generally.
The main function of the remittance department is to transmit money from one place to another. By
providing this service to the customer, bank earns a lot of income. Also customer is able to meet its day
It is an instrument payable on demand for which value has been received, issued by the branch of the
bank drawn i.e. payable at some other place (branch) of the same bank. If two banks are involved then
the DD is sent to other bank but in other case it is handed over to the applicant.
Issuance Procedure:
The bank charges such as commission, excise duty is charged as per effective schedule of charges.
In case of cash deposit, the cashier counts the amount and signs the DD
Then the officer of remittance department signs it and operation manager counter
signs it.
Payment Procedure:
The DD credit advice is received through mail. The numbers are checked and
An entry is made on the DD payable register and the vouchers are made.
DD credit is attached with the vouchers and given for posting to the computer.
When DD is received the test numbers are checked and the payment is made.
Vouchers are given for posting and the entry that was made in the register is
It is the quickest way of transfer of funds from one place (Branch) to other place (Branch) of the same
bank. Generally, a mail transfer advice reaches the drawer branch the next day through courier
services. But sometimes, a customer demands that his funds should be transferred through the quickest
means. In such cases, transfer of funds message is passed through telephone or telegram.
This mode of transfer was used before online. Online system is very effective for this purpose now-a-
Issuance Procedure:
The Head of Remittance Department checks it; the charges such as commission,
Then a TT is made on white slip. There are 3 copies, the original one is faxed to
the Branch, one to the Head Office and one is kept for record.
When commission bill is received; it is attached to the TT office copy in the file.
Payment Procedure:
When a TT arrives, the test numbers are checked and the signatures are verified.
Pay Order:
It is an instrument issued for payment in same city. Pay order issued from on e branch can only be
payable from the same branch. It is normally referred to as banker’s cheque. It is also called confirmed
Issuance Procedure:
The standard form is given to the customer. He fills in the details and signs it.
Bank charges (or commission) as per the schedule of charges and the
A cash memo is signed, stamped and handed over to the applicant as a receipt.
Then the authorized officer signs it after checking the pay order.
The order is then handed over to the applicant after obtaining his signature on the
PO Form.
Payment Procedure:
On presentation of the pay order receipt, two authorized officers of the branch sign the receipt.
Then the amount is credited to the account of the customer or pain in cash.
Pay Slip:
It is an instrument issued by the bank for the settlement of its own payment. It is used for payment by
the bank to anyone (may be employees) in this case only one bank is involved. He is the issuer as well
as the payer.
No Excise Duty
No Commission
Issuance:
A credit voucher is sent from the account department to the remittance
department.
Pay Slip book is taken out and filled according to the credit voucher.
Payment Procedure:
Pay Slip is just like a cheque and bank is liable to pay against pay slip.
After that when the pay slip is received by the bank for payment, it is again
Procedure:
They are entered in the OBC Register and OBC numbers are given to them.
On clearing, the respective banks send back the OBCs alongwith the IBCA (Inter
The OBC numbers are checked from the OBC register, after that entries are
made.
The bills, which are received by the bank from other branches out of the city for local clearing are
Procedure:
The OBC of other branches will be the IBC of this branch. So an OBC
The cheques are entered in the IBC register. The IBC numbers are allotted to
them.
After realization, an IBCA is prepared and mailed to the branch from where the
At the end of the day, two vouchers are prepared and posted.
ON LINE TRANSACTION:
Askari Bank has provided the facility of on line transaction. In this case the accounts and their details
in the other branches of ACBL can be displayed on computer which is connected through server to the
computer at the other end. Commission is charged on providing this service this is beneficial as it takes
very little time in the transference of funds. This facility is available all the branches of Askari Bank
except Bhai Pheru Branch. Following charges are deducted in online transaction:
Table 1
Charges
Amounts
Up to - Rs. 25000/-
Rs. 50/-
Automated Teller Machine (ATM) is facility provided by the Askari Commercial Bank Limited Multan
Branch. There are certain requirements, which are to be fulfilled, buy the person before he can have
ATM card. There is a need of primary account number and then the secondary account number. The
primary account number is the regular account number as maintained with the bank of the person and
the bank on which the card is issued gives the secondary account number. Apart from this there is
Personal Identification Number (PIN) without which ATM cannot be operated. The person can change
the PIN from time to time so that there is no chance of fraud in his account. If someone gets to know
the PIN of the ATM of a certain person he can operate that easily so the PIN should not be disclosed to
anyone. In case the card of a person is damaged or the person loses his card, then charges of Rs.100/-
are taken and a new card is issued by the Head Office. In case of replacement, the charges are Rs.100/-
and in case of faulty card means when the card is inserted in machine and on the screen the caption
faulty card is written then no charges are taken by the bank for the issuance of new card. This branch
has issued almost three thousand five hundred cards. This beneficial because if a person wants to draw
CLEARING:
Meaning of clearing:
The word clearing has been derived from the word “Clear” and is defined as “a system by which banks
exchange cheques and other negotiable instruments draw on each other within a specified area and
thereby secure payment for their client through the clearing house at specified time” in an efficient
way.
Advantages of Clearing:
1. Since clearing does not involve any cash etc and all the transaction take place
2. No cash is needed as such the risks of robbery, embezzlements and pilferage are
totally eliminated.
3. As major payments are made through clearing, the banks can manage cash payment
5. Since it provides an extra service to the customers of banks without any service
charger or costs, more and more people are inclined and attracted towards banking.
Clearing House:
It is a place where representatives of all scheduled banks sit together and interchange their claims
against each other with the help of controlling staff of State Bank of Pakistan and where there is no
branch of State Bank of Pakistan the designated branch of National Bank of Pakistan acts as controlling
All the bank which are the member of clearing house maintain accounts with State Bank of Pakistan by
debit and credit to which the clearing settlements are made. If on a particular day, a bank delivers
cheques and other negotiable instruments worth more than the total amount of Cheque received by it
that banks accounts with State Bank of Pakistan will be credited with the differential amount. If on the
other hand the total amount of cheques and other negotiable instruments draw on a certain bank by
other bank is more than the total amount receivable by it from other banks, then this bank’s account
The cheque delivered to the representatives of other banks for clearing are called outward clearing,
whereas cheques received from the representatives of other banks for payment are called inward
clearing.
Procedure of Settlement:
Presume that ACBL got the cheques which are drawn on HBL, NBP and MCB for amounts Rs.
50,000/-, Rs. 15,000/- respectively, its total being amounts Rs.95,000/-, it means that this amount is to
be credited to ACBL A/C with S.B.P. on the other hand the cheques drawn on ACBL are from HBL,
NBP and MCB of Rs.15,000/-, Rs.75,000/- and Rs.30,000/- respectively, its total being Rs.1,20,000/-,
it means that this amount is to be debited from ACBL account. The difference between Rs.95,000/-
credit and debit Rs.1,20,000/- debit is Rs.25,000/- debit which means the house is against ACBL for
Rs.25,000/-.
1. ACBL has t receive Rs.50,000/- from HBL and to pay Rs.15,000/- to HBL so
2. ACBL has to receive Rs.30,000/- from NBP and to pay Rs.75,000/- to NBP so
3. ACBL has to receive from MCB Rs.15,000/- and to pay Rs.30,000/- to MCB so
GRAND TOTAL:
35000-45000-15000 = -25000
Hence ACBL A/C with State Bank of Pakistan will be debited with Rs.25,000/- and the contra will be
other banks accounts respectively. This called as “Debit and Credit Rule”.
7. If order instrument, suitably endorsed and last endorsee’s account being credited
counterfoil
10. The title of account on the paying-in-slip is that of payee or endorsee (with the
If an instrument is in order then out bank’s special crossing stamp is affixed across the face of
the instrument. Clearing stamps is affixed on the face of the instruments, paying-in-slip and
counterfoil (The stamp is affixed in such a manner that half appears on paying-in-slip and half
on counterfoil). The instrument is suitably discharged, where a bearer cheque does not
required any discharge and also an instrument in favor of a bank need not be discharged. The
instrument along with paying-in-slip is retained while the counterfoil is given to the customer
1. The particulars of the instruments and the and the pay-in-slip or credit
3. The register is balanced, the credit voucher are separated form the
register
5. The schedules are prepared in triplicate, two copies of which are attached
with the relevant instrument and the third is kept as office copy
7. The schedules and house pages are signed by the officer incharge with
branch stamp
8. The grand total of the house page is taken and agreed with that of the
9. The instruments along with duplicate and house page are sent to the Main
Office
3. The entry is made in the Inward Clearing Register (serial number, instrument
5. The instruments are scrutinized in each respect before honoring the same
FOREIGN EXCHANGE DEPARTMENT
Foreign Exchange Department works like the general bank departments with the difference that it deals
Import
Export
Foreign Remittance
IMPORT:
The international trade transaction, in which one country buys goods from other country, is called
import.
The import trade in Pakistan is governed by import and export Act of 1950. Previously, the regulating
body of imports was controller of Import and Export. But this function has been shifted to Export
Promotion Bureau.
Foreign Exchange Departments of all banks are restricted to word under the rules and regulations of
government.
The individuals and firms who desire to import goods from the foreign countries are required to obtain
import license. Import licenses are a type of artificial restraint on the import trade of a country. To
acquire import license, the importer has to submit applications to the licensing authority. The importers
can only get their merchandize cleared from the custom authorities if they have the import license duly
issued in their names. The import licenses issued by the Import Trade Controller are required to be
Contract of sale:
After getting the license, the importer then negotiates with the exporter. When they reach to an
agreement on all terms of sale, they sign a contract. Thus contract includes all information of terms and
condition of sale.
Letter of credit:
Foreign trade payment problems are mainly solved by a letter of credit. A letter of credit is issued by
the importer’s bank. If guarantees payment to the exporter up to specified amount of money provided
the terms and conditions laid down the L/C are fulfilled.
A letter of credit is a commitment on the part of buyers bank to pay or accept draft drawn upon it,
A letter of credit thus is a (I) written undertaking by an importer’s bank to exporter’s bank. (II) that it
will pay or accept draft drawn upon it up to a stated amount with a specified time. (III) the payment
will only be made to the exporter if he compliers with the terms of credit.
1. Account party: The buyer or the importer on whose account and request the letter
2. Issuing bank: The bank which issues or opens a letter of credit at the request of
3. Exporter or seller: The seller or the party in whose favor L/C is drawn is the
4. Negotiating bank: The paying bank in the exporter’s country, on which the draft is
The main steps involved in the opening of the letter of creditor as follows:
Application for letter of credit:
The importer will request his own bank or any other bank, which deals in foreign trade transactions to
issue a letter of credit in favor of the exporter. He will prepare an application on the prescribed form
available from the bank. The information, which are supplied in the application are based on the
contract of sale and include only the important feature of contract, such as value of merchandise, port
of shipment, documents to be presented, port of unloading, brief description of goods, import license
etc.
Scrutiny of application:
Before issuing a letter of credit, the bank will scrutinize whether the importer is of good financial
standing, possesses the import license issued by import control. Authorities, the amount available
covers the letter of credit applied for, market demand of goods, collateral offered to cover the credit
etc.
Cash margin:
The bank asks the importer to deposit cash or securities with the bank. The proper margin of cash or
securities to be deposited is decided by the bank depending upon the credit worthiness of the importer.
Issue of the letter of credit:
The importer bank after being fully satisfied will issue a letter of credit in favor of the exporter. The
L/C may be sent directly to the exporter or the advising bank in the exporter’s county. In such a case,
the advising bank will inform the exporter about opening a letter of credit.
Shipment of goods:
When the exporter receives L/C, he examines it to ensure that it conforms to the terms of contract of
sales. He then shifts the goods and presents all required documents along with the bill to negotiating
bank.
The negotiating bank after receiving all the documents and the bill from the exporter will scrutinize
them whether these conform with the terms of letter of credit. If the documents of title accompanying
the bill are in order, these will be sent to the importers bank for payment.
On receipt of documents and the bill, the issuing bank will examine them. If the documents on the face
appear to be in order, the payment would be released by the bank. In case any defect is found in the
documents and the draft is honored by the issuing bank the importer can claim damages on the issuing
bank. The issuing bank is only accountable for the completeness of documents, not to see whether
First the importer pays all his obligations the bank then bank releases the documents. In case of sight
draft, the importer’s bank pays the amount on the same day charging the importing customer’s account.
In case of a time draft, the importer discharges his obligations to the accepting bank on or before the
maturity date of acceptance. The accepting bank will then release all the shipping documents to the
importer.
The exporter can obtain payment from the negotiating bank by discounting the draft (L/C) immediately
Table 2
Each Sub-sequent
First Quarter or Part
Cash LC’s Quarter or Part Minimum
Thereof
thereof
0.15% Or subject to
Division
EXPORT:
The international trade transaction in which one country sells its goods to other country is called
Export.
The controlling body of export in Pakistan is Export Promotion Bureau, it gives different incentives to
the businessmen for enhancing the exports and reducing the Balance of payment deficit. It restricts the
The steps involved in import are described earlier from the importer’s point of view. The procedure of
export is same, as it can be described from exporters point of view. The activities, which are different,
described here.
Following requirements must be fulfilled before the purchase of Foreign Export Bills.
Exporter should be account holder of the bank. Bank issues the Form-E. Form-E should be filled
correctly and then bank authenticates the E-Form. Exporter goes to the custom authorities for custom
clearance. Shipping Company issues Bill of Lading or Airway Bill. Exporter should bring other
documents like certificates of Origin, commercial invoice, packing list etc. Bank scrutinizes the
documents.
After fulfilling these requirements, bank purchases the export bill and makes payment for the value of
Lodgment:
Lodgment means making the payment to exporter by bank against the purchase of bill. Bank gets the
documents from the exporter and enter it in a FBP Register in this register first of all FBP number is
given, the enter the name of exporter, importer and the name of bank which was open the LC. Two
It is the rate of export bill, payment of which is to be received within 12 days from the date of
lodgment.
2. Usance rate:
It is the rate payment of which is to be made at a future date, normally within 30, 60, 90, 120, 150, or
180 days.
Realization:
Realization means receiving the payment from the foreign bank for the export of goods. Bank gets the
This is another activities which is performed by the export department of ACBL Multan Branch. In
FBP bank paid the amount of goods export to the exporter before the maturity of bill and get some
charges. Whereas, in FDBC parties deposits the export documents to the bank for the collection of bill.
Bank performs this function for the convenience of exporter. In this function bank performs as a
intermediary party.
A depositor can open account in US Dollar, Pond, Japanese Yen and Euro with nominated branches.
For opening of account a Form is provided to the person/party, introduction of the new account holder
or by the Officer of the Bank. Procedure of opening foreign currency accounts is same as other
accounts. No Zakat is deducted on these accounts, no income tax deductions, no wealth tax deduction
will be there, these incentives reinforce and motivate the people to invest in foreign currency accounts
1. Foreign remittance:
Bank also operates in Foreign Currency accounts. In accordance with instructions of SBP, foreign
currency accounts are opened in these currencies: US Dollar, Pond, Japanese Yen, Euro. Funds are
transferred abroad by Foreign Telegraphic Transfer Swift MT-100 is used for this transfer. Askari
Commercial Bank has its agency arrangements in those countries, where its own branches are not
established. Its agency arrangements with Citi Bank, American Express, ABN Amro, Standard
Chartered Bank.
Reporting of Form-E:
Every Exporter is required to submit a declaration to custom authorities for goods exported. This
Four copies of Form-E are maintained. Form-E is reported to SBP at the end of the month, in which the
amount is realized. There is a prescribed Performa used for the reporting of Form-E. It includes the
reporting period, currency, Serial No. of Form-E, amount, Code No. of country and commodity.
Reporting of Form-M:
Every foreign bank deducts some charges form the value of goods. It is for miscellaneous purposes like
foreign bank charges or foreign agent commission. Form-M is used to declare this outflow of foreign
currency. At the end of the month of realization of the amount, Form-M is reported. It includes the list
SECTION 3
ANALYSIS
FINANCAIL ANALYSIS 9
ACBL achieve the best annual reports of services organization award in 2002. The report show that the
ACBL increase its Profitability for last five years. Following are the financial analysis obtains from the
Table 3
Rs. In Million
Income
Other Income 51 67 122 119 247
SHAREHOLDERS'
Share Capital 986 986 986 1036 1087
FUNDS
Cash, short term funds and 3504 7210 10056 13436 10020
SBP
Property, plants &
Rs in Billion
BUSINESS
Exports 20 22.8 30.6 38.8 47.3
TRANSACTED
Percentage
Return on average
equipments to average
Rupees
INFORMATION Net Assets per share 19.64 20.75 21.85 24.9 38.38
SWOT ANALYSIS
SWOT (Strength, Weaknesses, Opportunities & Threats) analysis of ACBL is described below:
Strength:
is new trend in Pakistan and ACBL has also taken apart in this trend.
One distinctive feature of the bank is that it is the only bank working for the
The productivity of the bank is very good. Bank is providing a high quality
ACBL have strength that most of the imports & exports which are done in
Weaknesses:
ACBL has lesser number of branches as compared to many other branches. Due
to this problem, army officers can not avail the benefits of their own bank.
The human resource department is not performing the function of selection and
recruitment very effectively. Selection process is not on merit due to which competent
Bank is not introducing new products and new saying schemes. Bank should
boost the product development and increase the range of facilities offered for
customers.
Bank is weak in its credit management. Bank should lend to very sound parties
Opportunities:
Stock exchange is very volatile and takes immediate effect. So, in the time of
Threats:
ACBL has many competitors, which are continuously increasing its products and
Some other banks have competent taskforce, which is also a threat for ACBL.
Pakistan India relations often create a war danger. This chance of war may cause
army officer and their families to increase the frequency of withdrawals, which would
decrease deposits.
In Multan Imports & Exports business are done on seasonal basis. Which effect the
SECTION 4
FINDINGS
Following are the problem face by the ACBL Multan Branch since last quarter.
Deposit Decreased
Advances Decreased
Import Decreased
Low profit rates are one of the major reasons for meeting the deposit targets. The profit rates on ACBL
deposit schemes are quite low when compared with other banks especially with the National Saving
Centers. In todays every customers is the rational customer he knows the value of money and wants a
Earlier ACBL was able to attract customer due to their ancillary services like ATM Cards, Credit
Cards, Online Banking etc. but now all the banks are offering these services through their own network
or through third party contracting, so ACBL plus points are no more their advantages. So the only thing
through which they can increase their deposits are their profit rates, because the customers only want
Due to the increase in foreign remittances there are ample opportunities for good deposits but a
knowledgeable customer always invest in the stock exchange that are not only growing day by day but
are also giving handsome profits in the shape of dividends and stock trading. The left behind deposit is
invested in that financial institution which provides him handsome return/profit, like national saving
schemes and investment bank. Now in the stock exchange that are not only day by day but also giving
handsome profits in the shape of either in dividend or the stock trading. APBUMA and HQ2 corps are
the main accounts that shifted to other banks due to our low profit rates. They totally withdraw
High rates on advances against lien deposits have been one of the major reasons for deposit
withdrawals. On of ACBL customers Mr. Awais account number 01165007017 deposited 50 million in
ACBL on which he was getting 3.0% profit rate (quite low as compared to other banks). Later he was
given loan against that deposit by making the account under lien at 7.5% markup, but he got a good
offer from other bank that bank not only gave him the good deposit rate of 5% but also offer him the
loan against deposit at lower rate them Askari Bank. Due to this dual advantage he shifted his deposits
to that bank and his account decrease a net withdrawal of 21 million during a period of 1st April, 2003
Table 4
0116507017 M. AWAIS 21 M
0110058739 APBUMA 17 M
Seasonal Business:
Multan is one of the cotton growing cities of Pakistan. Most of the businesses in Multan are directly or
indirectly linked to cotton that is also the case with ACBL clients. Most of ACBL clients are from
textile sector which borrow for 4 months as so, i.e October – January. During this period all ACBL
major clients that include Fazal Cloth Mills, Ahmed Fine, Hussain Mills, Fatima Enterprises etc. are
using their limits to the full as they have to buy and stock the cotton for whole year for further
processing later in the month came. So ACBL will be able to achieve the targets later in the year.
That is also the case in Oil Seeds business (other major business sector in Multan). They usually
borrow during the period of April to July and their borrowing is to full extent in the month of July.
Another reason of shortfall/low lien advances is the high rate of markup, which is charged to clients.
Due to high markup rates, many customers are running their business to other banks which are offering
Due to high markup rates, some of the parties to whom TF was given are adjusting their TF in
advances as they are able to get TF at better rates as compared to ACBL. One of the example is that of
Ahmed Fine (Pvt.) Ltd. who have adjusted their TF in advances due to high rates. Due to that ACBL
have not only lost the profit but also the other business from the client.
customer or float in the stock market then they lend them to other banks for short period of time usually
of 30 to 90 days. This is money market transaction. The rates on these money market transactions are
lowest in the market and ranges between 1.2% to 1.5%, but now the banks due to high liquidity have
started to offer the money market transaction rates (with slight increase) to their customer which are
highly liquid companies for short term period i.e. 30 to 90 days. Their payments and repayments are
done in full. Our big groups borrow from other banks at money market rates and pay to us when they
want their stock and later they pay to that bank at quite a low rate, which they would have to pay us.
Askari Bank has not started these transactions, so ACBL are loosing their customers.
2. Major withdrawal:
Table 5
Withdrawal during
2003 to 30-06-2003
FATIMA
FIM $ FCF FE-25 $7,785,820
ENTERPRISES
FATIMA
Seasonal Business:
The reason of decreasing imports is also seasonal business done in Multan. ACBL major clients doing
the import business are Oil seeds Companies. ACBL major clients are Khawaja Bashir and Sons,
Shujabad Oil etc. they mostly import the in the period between July and March. So most of import
business is done in the last 2 quarters of the year, because they need raw material between the above-
mentioned period for producing the Oil. During the month of July ACBL Multan Branch are going to
RECOMMENDATIONS:
As such there is no need of any improvement as Askari Commercial Bank is one of the leading bank of
the country and upholds it’s name but still I have a few suggestions in my mind which I think my duty
to mention. First of all, in order to make the working environment of the bank better some
recommendations are given. In any organization we have to work like a group as a whole. The attitude
of the one employee can cause tension in the whole environment so it is suggested that they should
work as a team and co-operate with each other as well as with internees for better working
environment. For this purpose they should either make a schedule for the internees or the rotation time
period be reduced in those department, which have less work for internees. Because during the
internship the internees come her to learn and know about the working of the organization. They should
try to tell as much to the internees as possible. So that they can learn how they have to work in an
organization when they get the job. Even if they get job in any other organization they know how
Askari Banks do good progress in Jhang.The important problem ACBL Jhang Branch face is the
number of employees working in the bank. The number of employees are very low due to this problem
the distribution of work is also not right. Some person has more burden of work while some have fewer
burdens. So the overall working efficiency of the bank is not good. So the ACBL Jhang Branch has
need of good, honest, skilled young employees who can increase the efficiency of the bank.