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Internship report on Habib Bank Ltd 1

EXECUTIVE SUMMARY
We have established a new record in the banking sector by achieving pre-Tax Profits of Rs.
15.14 billion for the year 2007.Net profits climbed to Rs. 2.04 billion from Rs. 10.1 billion.
Given the wide geographical operations of Habib Bank Group in 25 countries, this reflects the
benefits of embedding technology in all parts of the Bank.

In Consumer Banking we introduced Auto Financing and Life Style Financing Scheme for
consumer durables and further expanded the Flexi Loan Scheme. HBL was the first bank to offer
low cost US Dollar financing to help exporters and now has over Rs 12 billion in such loans, the
largest of any bank in Pakistan.HBL also launched Online Banking, Internet Banking and PC
Banking in 2008, offering a full service, round-the-clock access to banking.

With inflation below 11%, the State Bank cut the Discount Rate to 12.5% from 113.5%
in January 2008. The increase in foreign exchange reserves has led to strong growth in banking
sector deposits. For the overall banking sector, average lending rates have declined by 2.75% and
yield on government securities has declined by 3.5-8%, with steeper falls in the second half.

Customer deposits grew from Rs 273 billion to Rs 306 billion (12%) and Assets from Rs 334
billion to Rs 403 billion (21%). Net Revenues increased from Rs 14.1 billion to Rs 16 billion
(+13%). Habib Bank also had continued success in recovery of defaulted loans in 2008, with
cash recoveries of Rs 3 billion.

Overall, return on customer loans declined from 10.5% to 8.5% a reduction of 2%. Declining
yields on customer advances, T Bills and National Saving products have forced us to lower rates
on our deposits. This narrowing of spread reduced the Bank’s profitability by around Rs 3
billion.

Corporate and Investment Banking Group continues to face tough price competition, as the
market growth has been limited. Our International and Overseas Banking Group is an invaluable
asset of HBL. Economic growth is expected to pick up, with low interest rates leading to higher
investment.

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Mission Statement

“To make our customers prosper, our staff excel and create value for shareholders”

COMMERCIAL BANKING IN PAKISTAN

It was very difficult for Pakistan to build up its own Banking system immediately after
independence without sufficient resources. Following the announcement of the partition plan in
June 1947 there was a haste movement on the parts of banks to transfer their funds and accounts
across the borders. The banks having their registered offices in Pakistan were transferred to
India. In an effort to bring about the collapse of the new state by the persecuting an international
policy of withdrawal, the Indian bank offices closed quickly. Those banks, which stayed, were
considering the winding up of their business. By 30th June 1948 the number of schedule banks in
Pakistan declined from mere scratch.
Today there are more than 7000 branches of commercial banks along with an established
network of supplementary financial institutions. All this development in the banking sect is the
result of untiring efforts of four decades.

Phases of banking in Pakistan


Broadly speaking we can divide the development of commercial banking into four
phases:
PHASE-1 1947-1974 Establishment of commercial banking system
PHASE-2 1974-1979 Nationalization of banks
PHASE-3 1979-1991 Islamisation process
PHASE-4 1991-2000 Privatization process
PHASE-5 2000-Onward

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Introduction of Habib Bank


HBL established operations in Pakistan in 1947 and moved its head office to Karachi. Our first
international branch was established in Colombo, Sri Lanka in 1951 and Habib Bank Plaza was
built in 1972 to commemorate the bank’s 25th Anniversary.

With a domestic market share of over 40%, HBL was nationalized in 1974 and it continued to
dominate the commercial banking sector with a major market share in inward foreign
remittances (55%) and loans to small industries, traders and farmers. International operations
were expanded to include the USA, Singapore, Oman, Belgium, Seychelles and Maldives and
the Netherlands.

On June 13, 2002 Pakistan's Privatization Commission announced that the Government of
Pakistan had formally granted the Agha Khan Fund for Economic Development (AKFED) rights
to 51% of the shareholding in HBL, against an investment of PKR 22.409 billion (USD 389
million). On February 26, 2004, management control was handed over to AKFED. The Board of
Directors was reconstituted to have four AKFED nominees, including the Chairman and the
President/CEO and three Government of Pakistan nominees.

Commercial Banking:

HBL’s Commercial Banking Group targets medium sized companies with a turnover of at least
PKR 50 million. Our business units are located in Karachi, Lahore, Faisalabad, Sialkot,
Gujranwala and Peshawar. Each unit is dedicated to service business clusters located within
these cities.

We have the ability and the resources to meet the needs of your business with our pro-active,
responsive and experienced Relationship Managers who are committed to understanding your
business.
We offer financing for the following:
• Working Capital
• Procurement of Inventory
• Receivables
• Procurement of Machinery
• Expansion of production facilities
• Import of raw materials
• Exports
• Guarantees

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Management Committee

Names Designation
Zakir Mahmood President and Chief Executive Officer

Khayyam SEVP & Group Executive Information


Mahmood Butt Technology.
SEVP & Group executive Corporate &
Atif R. Bokhari
Investment Banking
SEVP & Group Executive Corporate &
Sohail Malik
Investment Banking
SEVP & Group Executive Asset
Naeem Iqbal
Remedial Management

Khaleeq Kayani SEVP & Group executive International

SEVP & Group executive Global


Jamil Iqbal
Operations

SEVP & Group executive Audit, BRR &


Altaf Hussain
Investigation
SEVP & Group executive Global
Hanif Akhai
Treasury

SEVP & Group executive Financial


Ayaz Ahmad
Control & Corporate Planning
SEVP & Group executive Retail
Jamil A. Khan
Banking

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Management Hierarchy

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PRESIDENT

BOARD OF DIRECTOR

MEMBER EXECUTIVE BOARD

REGIONAL CHIEF

ZONAL CHIEF

BRANCH MANAGERS

Business Groups

1)-CORPORATE AND INVESTMENT BANKING GROUP


(CIBG)

Corporate and Investment Banking Group Operation

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CIBG serves large institutional and corporate customers in Pakistan through 12 dedicated
corporate banking centers in all major cities. The CIBG portfolio consists of most of the largest
names in the market and represents all major industry groups, including textiles, large scale
manufacturing, telecommunications, petrochemicals, fertilizer, airlines, transportation and
services. It offers its clients a comprehensive range of banking services via a one window
interface through designated relationship managers.

2)-GLOBAL TREASURY GROUP (GTG)

Global Treasury Group Operation:-

The role of our Treasury is reviewing, streamlining and controlling the Bank’s domestic
and international money and foreign exchange markets related operations for the maximization
of returns on assets and equity, aiming to transform treasury related risks into safe revenues on a
continuing basis.

3)-INTERNATIONAL AND OVERSEAS BANKING GROUP


(IOBG)

International and Overseas Banking Group Operation:-


HBL’s international network is amongst the most extensive of emerging market banks
with a presence in 25 countries through 120 offices of the Group and its affiliates. The network
spans the principal financial centers of USA and Europe, and the developed and emerging
markets in Asia, the Middle East and Africa. The Bank’s 50 year history in the international
market provides it a well established network of both commercial customers and correspondent
banking relationships.

4)-RETAIL BANKING GROUP (RGB)

Retail Banking Group Operation:-


The Retail Banking network, with 1425 branches, is the core strength of Habib Bank. Its
extensive reach in all geographic locations – urban and rural – throughout the country, provides
access to over 5 Million customers across all sectors of the economy. The network provides
HBL with the largest diversified low cost deposit base of any bank in Pakistan, and forms the

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basis for many of our other business lines, corporate and investment banking and treasury
activities.

RGB has three principal areas of activity:


1. The retail network for deposit mobilization.
2. Commercial banking group to serve small and medium enterprises (SME).
3. Consumer banking group.

Deposits mobilization, the traditional strength, continued to perform strongly in 2008


with deposits growing by 12%.HBL has moved aggressively and has already introduced three
major products:
1. Personal Loans
2. Car Financing
3. Durable Financing in association with major suppliers of consumer
products

DEPARTMENT OF HABIB BANK


Habib Bank is performing its activities through the following functions:
DEPOSIT DEPARTMENT
The function of deposit department is to collect deposits from customers. Following type of
deposits are offered by Habib Bank.
i. Current deposit
ii. Saving bank deposit
iii. Profit and loss saving account
iv. Fixed deposit
v. Foreign currency deposit

1. Current Deposits
In the type of account the client is allowed to deposit or withdraw money as and when he
likes. He may, thus, deposit or with draw several times in the day if he likes. Usually the bank
allows this and service chargers are deducted by the bank and current deposit account.
2. Saving Bank Deposits
This type of account is for those persons who want to make small savings. This type of account
is opened with Rs. 100. In this case deposits can be made only up to a costing amount and with
drawls are allowed twice a week. If the depositors wants to withdraw more than Rs. 15000 a
seven days notices is required before the withdrawal.

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3. Profit and Loss Sharing Deposits


These types of accounts are one step towards the Islamisation of Banking system in the
Pakistan. Under such types of accounts the bank allows no interest to the customers. The
executive board of the bank declares profit or loss every year. PLS saving account having a
running minimum credit balance of Rs. 100 would be eligible for sharing profit/loss of the bank.
The rate of profit or loss on PLS saving accounts shall be determined by the bank at the close of
each half year, in its sole discretion and the banks decisions shall be final and binding on the PLS
account holder.
4. Fixed Deposits
In the type of account a certain amount is deposited for a certain, period such as six-
month, two years or longer. A fix deposit receipts is issued in the same of the depositor. The
receipt is signed by the officer incharge and the bank manager. A notice is given to the depositor
requesting the depositor to withdraw his money or to renew this deposit. The interest allowed on
fixed varies with the period for which the deposits are made.
7. Foreign Currency Accounts
Foreign currency account is opened by depositing foreign currency. In ABL you can open
foreign currency account in:
i. US DOLLAR
ii. POUND STERLING

BOOKS RELATING TO CUSTOMERS

a) Pay-in-Slip
When money is to be deposited in the bank the pay in slip is to be filled. The object of this
book is to provide the customer with the bank’s acknowledgement for receipt of money to be
credited his account.
b) Cheque Book

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A cheques book contains a number of cheques, which is given to a customer upon written
request and after marking the payment for the cheques book. It enables a customer to make
withdrawal from his account or make payment to various parties by issue of cheques.
c) Pass Book
Passbook is a copy of the customer account as it appears in the books of the bank. ; The
clerk in this book records balance. But now a day due to computerization the concept of
passbook is not in practice.

GROUNDS FOR CLOSING THE CUSTOMER’S ACCOUNT

The banker may close the account of the customer due to following reasons:
i. Notice by a Customer
ii. Death of a Customer
iii. Customer’s Insolvency
iv. Customer’s Insanity
v. By order of court
vi. Unsatisfactory operation

ADVANCES DEPARTMENT

1. Introduction
2. Securities.
3. Types of advances

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INTRODUCTION
The function of advances department is to lend money in the form of clean advances,
against pr9omissory notes, as well as secured advances against tangible and marketable
securities. The bankers prefer such securities that do not run the risk of general depreciation due
to market fluctuations.
Common Securities for the banker’s advances are as under:-

SECURITIES
1. Guarantees
When an application for advance cannot offer any tangible security, the banker may rely
on personal guarantees to protect himself against loss on advances or overdraft to the applicant.
2. Mortgage
A mortgage is the transfer of an interest in specific immovable property for the purpose
of security the payment of money advanced or to be advanced by way of loan, and existing or
future debt, or the performance of an engagement which may rise to a pecuniary liability. The
transfer is called a mortgagor, the transferee a mortgage.

Hypothecation
When property in the shape of goods is charged as security for a loan form the bank the
ownership and possession is left with the borrower, the goods are said to be Hypothecated The
essence of hypothecation is that neither the property in the goods not the possession of them are
possession is left with the borrower, the goods are said to be Hypothecated the essence of
hypothecation is that neither the property in the goods not the possession of them are possessed
by the lender, but the security is granted by means of letter of hypothecation, which usually
provides for a banker’s charge on the hypothecation goods.

4. Pledge
In a pledge the ownership remains with pledge, but the pledge has the exclusive
possession of property until the advance is repaid in full. While in case of the default the pledge
has the power of sale after giving due notice.
5. Promissory Note

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Sometimes promissory note is also accepted as a security, "A promissory note is an


instruments in writing containing an unconditional undertaking signed by the maker, to pay on
demand or at a fixed or determinable future time a certain sum of money only, to or to the order
of certain persons, or to the bearer or the instrument." A promissory note is incomplete until has
been delivered to payee or the bearer. Moreover, the sum promised in a promissory note may be
made by two or more makers who may be liable there on jointly and severally.

TYPES OF ADVANCES

The advances which are given by Habib Bank Limited are as under:-
1. DEMAND FINANCE (Ordinary Loan)
Demand Finances are those advances which are allowed in lump sum for a fixed period
and are repayable lump sum or gradually in installments.
TYPES OF ADVANCES
a. Demand Finance (Packing Credit)
Scheme introduced by State Bank of Pakistan for exporter of carpet, surgical instruments,
at zero percent rate of interest. While banks provides at concessional rate of interest.
b. Loan ordinary (Demand Finance to Students)
Qarz-e-Hasana Scheme Loans are allowed to the students, teachers without any interest
or mark up with the recommendations of the MPA or MNA.
c. Demand Finance (Staff)
Loans are offered to the staff of the following four categories.
i. House Building Loans against mortgage of property.
ii. Loan for purchasing vehicles.
iii. Loan equivalent to month’s salary.

RUNNING FINANCE (Overdraft)


Running finance (old name overdrafts) are advances, which are generally, given to meet
temporary requirements of the customers. A good customer use the banks running finance limit
as a mean of protecting his credit in the market and as a line of security defense to meet his
commitments.

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TYPES OF RUNNING FINANCE


I. Unsecured
Under such type of overdraft the bank pay upon the personal security of the customer’s
mentioned on the customer’s account.
II. Secured
Under this type of overdraft the bank allows his customer to withdraw more than his
deposits after giving security against the amount overdrawn.
The securities against which they given are:
i. Share certificate, Saving certificate
ii. Deposits
iii. Mortgage of property
iv. Guarantee of person

3. CASH FINANCES (Commercial Loans Inward)


These types of loans are given against following:
i. Against locally manufactured goods.
ii. Cash finance against Rice and Paddy
iii. Against pledge
iv. Against commodities
Besides advances against the above commodities parties for advances against other
commodities like tobacco, oil, may approach bank.
v. Against Trust Receipts
To obtain adjustment of an overdue account or to facilitate the borrower to self the
pledged good it is some times necessary to deliver a portion of the goods, against the trust receipt
and promise from the borrower to deposit the sale proceeds with the bank.

SMALL LOANS
Loan is allowed to contractors clearing and forwarding agents.
5. FINANCE AGAINST THE FOREIGN BILLS (FAFB)
The advance facility is allowed both to local foreign bills and is classified as under:-

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i. FAFB (Local) advance against Railway receipts and truck receipt, a company with bills
of exchange and invoices, are given under this head.
ii. FAFB (Foreign) advances against foreign bill, covering bills of exchange bills of lading
airway bills of exchange bills of lading airways bills etc.
6. AGRICULTURE LOANS
Loans to the farmers with holding up to 25 acres for meeting their short terms, medium
and long terms Agricultural production requirements, such as:
i. Agricultural inputs
ii. Tube wells
iii. Live Stock Framing
iv. Land improvement

7. INDUSTRIAL LOANS
Besides the short-term loans which play a part in working capital medium and long-term
loans are also given to industrial sector for purchase of machinery and other capital nature goods.

ACCOUNTS DEPARTMENT

Usually Accounts are maintained in two ways:


a. Journal System
b. Vouchers System
Journal system is adopted by some commercial industrial institutions. In journal system entries
are reported in Journal Books and then posted to ledger.
Voucher system is used for every transaction. Voucher has to be prepared either in cash or in
transfer or in clearing, the Sheet upon which these vouchers are summarized transactions-wise
and consolidated into a figure is called supplementary.

Types of Supplementary
a. Debit Supplementary
b. Credit Supplementary

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Debit supplementary is used for debit voucher and credit supplementary is used for credit
voucher books and registered maintained by bank are as follows:
1. General ledger
2. Statement of daily affairs.
3. Cash book or Cash cum day book.
4. Transfer book
5. Income and expenditure ledger, etc.
INCOME INCLUDES
1. Brokerage (A bank sells and buys share, stocks, debentures, other securities and receives
payment for these services).
2. Discount
3. Service Charges
4. Rent (On building, Bank Lockers)
5. Commission

EXPENDITURES INCLUDES
1. Salaries, allowances and provident fund
2. Rent, taxes, insurance, lighting etc.
3. Profit paid on deposits and borrowings
4. Postage, telegram and stamps
5. Stationary, printing and advertisement charges etc.
6. Auditor’s fee and legal charges.
7. Others

REMITTANCE DEPARTMENT

Remittance department performs following functions:

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i. Mail Transfer (MT)


ii. Telegraphic transfer (TT)
iii. Demand Drafts (DD)
iv. Local Funds Transfer (LFT)
MAIL TRANSFER (M.T)
When a customer requests the bank to transfer his money from one branch of bank to
another branch of the same bank or from one city to another city to the same bank or any other
bank. Customer fills the form given by bank. If the customer has an account with that amount as
mentioned in the application form then concerned officer will undertake the following procedure
to make the mail transfer complete.
i. Branch Mail Transfer form
ii. Receiving Branch Register copy
iii. Issuing Branch register copy
iv. Beneficiary advice
v. Advice to Customer
In case where the customer is not account holder of the bank then the customer will have
to deposit the amount which he wants to transfer under Mail. Then the above said procedure will
be done.
TELEGRAPHIC TRANSFER (T.T.)
This type of transfer is simple. After filling the application form the concerning officer
shall fill the telegraphic transfer form. Then it is sent to the required bank which on receiving it
immediately makes the payment to the customer and after wards the voucher is sent to that bank
by ordinary mail.

DEMAND DRAFT (D.D.)


Demand draft is just like cheques and issued when the customer wants to take cash with
him personally. The idea behind it is to avoid the risk and burden of currency notes in huge
quantity. Demand draft can easily be handled whatever amount it has and the money can easily
be taken from the bank when it is presented. In fact, the bank persuades the customer to transfer
money by drafts and avoid the risk of frauds involves in M.T and T.T Draft is only issued when
the bank knows customer and bank has the confidence in him.

HBL PRODUCTS & SERVICES

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Retail Products and Services:


Typical Retail products and services of HBL are as follows:-

1) Credit Cards
• Gold Card
• Green Card
Welcome to a world of convenience, flexibility and opportunity. The HBL Credit Card will add
simplicity and excitement to your life. Accepted at over 24 million merchants worldwide, HBL
Credit Card makes shopping fun and paying simple. Make the most out of your shopping
experience with your very own HBL Credit Card.
Benefits
• Convenience
• Security
• Affordability
• Cash Advance
• Balance Transfer Facility
• Internet shopping

2) HBL ATM

ATM can pay cash at odd hours within your withdrawal limit as long as there is balance in your
account. You can get cash from any Habib Bank ATM regardless of the fact that your account is
in a different branch or a different city. You can check your account balance and get a printed
mini statement. It is an extremely convenient way of banking, totally oblivious of time and
location. Money when you need it! The good thing about it is that it is a user-friendly machine.

The usage of ATM in Pakistan is gaining ground perceptibly. The shared ATM network,
which has obviously come to stay, is contributing to the usage factor due to unprecedented
convenience of timeless banking. Habib Bank has a large ATM network and enjoys the privilege
of being a founder-member of a fast expanding shared ATM network.

3) Debit Card:

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HBL Visa Debit Card allows you to pay for your purchases directly from your bank account.
You don’t have to carry cash and your monthly statement provides you with a complete record of
all your transactions so you can manage your expenses with ease.
Benefits
• No Interest
• Ease & Security
• No Liability
• International Recognition& Acceptability
• Spending Limits
• Free Account Statement
• 24 hour Customer Service
• Global Customer Assistance Service

4) Habib Bank Flexi Loans


With the rising cost of living, it is becoming increasingly difficult to make expensive
purchases or meet unexpected expenses. We can help you finance them with Habib Bank Flexi
Loans. You may avail a personal loan of up to SIX TIMES of you net take-home salary subject
to a maximum of Rs.300,000/- provided you work for an organization approved by HBL.
Benefits
• Flexible tenure: 12, 24, or 36 months
• Low rates
• No processing fee
• Credit Life & Disability Insurance
• Repayment through easy and affordable monthly installments
• Credit Life & Disability Insurance
• Repayment through easy and affordable monthly installments
• You determine the need, we help you finance

4) Habib Bank Car Loan


HBL Car Loan helps you get your preferred car through a simple and hassle-free process, backed
by superior service and support. Now you can drive a car you always wanted.
Benefits

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• Choice of either a new local/imported car or a reconditioned imported car.


• Repayment options ranging up to 7 years.
• Up to 85% of financing for the car of your choice.
• Insurance at all times for complete peace of mind and security.
• Round the clock support available through HBL Phone Banking; you can place your
requests and queries, track the status of your repayment/loan account and avail other
value-added services through HBL Phone Banking.

Eligibility
Salaried Individuals Self-Employed Business
persons/ Professionals

Citizenship Pakistani Pakistani

Age 22-60 Years 22-65 Years

Minimum/Month Income 20,000 25,000

Documentation
Salaried Individual
• Copy of CNIC
• 2 recent passport size photographs
• Latest original salary slip and personal bank statement for last 3 months

Self Employed / Professional


• • Copy of CNIC
• • 2 recent passport size photographs
• • Bank statement for last 6 months and bank letter confirming details of
account

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• • Proof of business

5) Muhafiz Rupee Travelers Cheques


With the advantages of 100% free purchase and encashment, MUHAFIZ remains the foremost
choice with travelers wishing to carry cash in a safe and convenient way. MUHAFIZ is equally
suitable to both personal use and business transactions. Regardless of whether you have an
account with HBL or not, you can be a MUHAFIZ customer and relish the benefits of Pakistan's
leading Rupee Travelers Cheques, including:

• Accessibility: Issuance from more than 700 branches across the country.
• Convenience: Encashment at more than 1400 branches.
• Choice: Available in denominations of Rs. 10,000, 25,000, 50,000 and 100,000.
• Guarantee: Prompt refund in case of loss or theft.
• Advantage: Convenience of transferability.
• Facility: Safety of special security printing.
• Freedom: Flexibility of no expiry date.

6) ACCOUNTS:
CURRENT ACCOUNT:

a) Eligibility:-
a) All Pakistani’s Resident/Non-Resident, Individuals (Single-Jointly) Companies/Firms etc.
can open and operate the Account.
b) Any Foreign National Individuals (Single-Jointly) having valid Resident Pakistan
VISA/Work Permit can open and operate the Account.

b) Features:-

• Account can be OPENED with Minimum Balance Rs.1000/- with no maximum


limit.
• CHECKING ACCOUNT
• No profit is paid.
• SERVICE CHARGES Rs.55/- if average balance is less than Rs.20,000/-
• Statement of Account dispatched on quarterly basis or as requested.
• There is no restriction for withdrawals of amount and number of cheques.

PLS SAVING ACCOUNT:

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a) Eligibility:-

• All Pakistani’s Resident/Non-Resident can open and operate the Account.


• Any Foreign National having valid Resident Pakistan VISA can open and operate
the Account.

b) Conditions

Deduction of Zakat – With-holding Tax as per rules of the Government.

Value Account:

a) Eligibility:-

• All Pakistani’s Resident/Non-Resident can open and operate the Account.


• Any Foreign National having valid Resident Pakistan VISA can open and operate
the Account.

Features:-

• 7% profit
• Minimum balance Rs. 10,000
• Free ATM/Debit Card

Supervalu Account:

a) Eligibility:-

• All Pakistani’s Resident/Non-Resident can open and operate the Account.


• Any Foreign National having valid Resident Pakistan VISA can open and operate
the Account.

Features:-

7.25% profit

Minimum balance Rs. 100,000

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Free ATM/Debit Card

7)-Tabeer (child education & marriage plan)

Tabeer is a plan that provides parents with a means to accumulate a fund over a period of time
which can then be used to pay for a child’s education or marriage. Plans are available for both
under and over 45 years of age.

Features:
Eligible age 18 – 60 years
Minimum payment Rs. 3,000 per month

Benefit on In addition to other benefits, Rs. 500,000 will be paid for the marriage of the
accidental death nominated female child, given that female child is at least 18 years of age

Partial withdrawals Allowed

Maturity benefits Two options available:


1. Policy can be cashed in total
2. Funds are paid back as per policyholder's designated time period

Future Plans of Originations:

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An Aggressive growth strategy is in place with the retail bank being the generator of stable low
cost deposits. Recent developments include:

• Branch refurbishment
• Upgrade in technology
• Launching of new and re-branded deposit products

The Demand for private sector credit has been relatively flat; we expect it to improve later in the
years. There will be a focus on developing the synergy between the corporate and investment
bank and a focus on developing the SME segment with its higher margin. Revenues from
Bancassurance and other services are Likely to increase as the year progresses. Global Treasury
has been reorganized and repositioned, this will augment earnings and enable the group to
enhance its shares in finance area.

The Bank launched its credit card. While there is tough competition in the credit card market, we
believe that we will be able to position the bank to take on lead role in the next five years. The
credit card business will take 2-3 years to achieve profitability. The consumer bank is expected
to become major revenue generated. HBL has successfully implemented anti-money laundering
software and KYC procedures throughout its network.

The first phase of Branch refurbishment will see 170 Branches (Urban & Rural) renovated
throughout Pakistan over 2008. Over the next five years new building projects will be
undertaken in major cities. Human Resource challenges persist and the bank continues to invest
in recruiting, retaining, and training high achievers and experienced professionals. The bank is in
process of developing and implementing strategies for training staff at different levels within the
Bank.

WORK DONE AT THE BRANCH

As every body knows that "Knowledge without practice is sterile "In order to give vent to
this idea an Internship program of two months has been arranged in different esteemed

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organizations during BBA(Hons.). In this regard on 5th of July 2008, I was asked by my principal
to go to Habib Bank to have an internship of two months there. So as per standing order of my
Zonal Chief I was assigned to work under the supervision of AVP/Manager of HBL Branch
Chowk Satellite Town Sargodha. On my first day of Internship, Manager handed me over the
charge of Assistant to Accountant.

As three departments namely Accounts, Cash and Billing, and Clearing were being
managed by the Manager in this particular branch. I started my practical training by tockening
the cheques for withdrawals and entering them into token book. This was the routine work that I
had to daily and, at the time of closing exact position of cash in hand, Receipts and Payments
was evaluated. The Manager and the Accountants duly signed this evaluation.

Secondly I was advised by my Manager to be remained vigilant about the fake cheques
giving some instructions for the scrupulous examination of cheques like signature verification
from specimen. Right after two weeks, the date of balancing came. Here balancing means
balancing of ledgers of Current Deposit and Saving Deposits. The balancing of Current Deposit
Ledgers was done on weekly basis while Saving Deposits Ledgers were balanced on semi
monthly basis.

Then I collected bills of FESCO, PTCL and SNGPL during period of my internship. I
also used to write scrolls, which are written to keep record of bills collected by the branch and
one copy of them is sent to the concerned organization.

After one month I came under the supervision of the Cashier who got me to know, how
the books of cash are balanced at the closing of each day. I too learnt to prepare General Ledger
which is called as the mother of all books used in the branch. It was really a tough and daunting
task. I consumed lot of my time in scrolling the Utility bills of WAPDA, TELEPHONE, and
SUIGAS, the collection from these bills were to be performed by me and after the proper
vouchering of these bills, a copy of collections was sent to respective departments.

After Six Weeks My Manager tells me about the transfer book which keeps the record of
the transfer of funds between clients of bank.

University Of Sargodha
Internship report on Habib Bank Ltd
25

SWOT ANALYSIS OF HABIB BANK LIMITED


Habib Bank Ltd. has got a tremendous reputation in the market; as for years the Bank has been
serving the banking requirements of its customers. Although due to the name of the Government
being attached with the bank, people have a lot of confidence in it, but on the other hand they
take Habib Bank as other Government institutions which don not perform their duties properly.
This they do without realizing the fact that the Bank is a Limited Company with a management
of its own. The fact can only be understood either by those customers who have been long served
by the Bank or by those who are or have been actually the part of the working of the Bank.

Habib Bank Ltd. enjoys a 40% market share as far as the domestic deposits are concerned,
which is an important factor to measure the success of a Bank. This percentage is second only to
National Bank of Pakistan. The Bank has got the largest number of branches in Pakistan and also
has the highest number of employees. The most recent figures although not known due to the
current restructuring.

With all the good things in it, every business has always got some internal strengths and
weaknesses pointing out which, it can create opportunities and avoid from threats.

SWOT ANALYSIS
Strength

(1) NAME STRENTH (good will)


(2) WIDE RANGE OF NETWORKING
3) INTERNATIONAL BANKING/COVERAG
(4) WIDE RANGE OF SERVICES
(5) ATM FACILITY
(6) BANK FOR ALL

Weakness:

(1) LESS TRAINED STAFF


(2) ONLINE BANKING
(4) WIDE AREA TO HANDLE
(5) LIMITED PERSONAL LOAN
(6) ADVERTISING CAMPAIGNS
(7) LACK OF INFORMATION TECHNOLOGY

University Of Sargodha
Internship report on Habib Bank Ltd
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(8) OVERLOAD WORKING ENVIRONMENT

Opportunities

(1) COST REDUCTION


2) MASTER CARDS
3) IMPROVED PROMOTIONAL TECHNIQUES
4) COOPERATION WITH OTHER BANKS

Threats

1) DE - MOTIVED EMPLOYEES
2) LARGE NUMBER OF COMPETITOR
3) REDUCED AREA NETWORK/BANKING

RECOMMENDATIONS

As we seen from the previous analysis of the financial statements we have realized that
that Habib Bank is performing very well since its inception. It is quite difficult to give suggestion

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Internship report on Habib Bank Ltd
27

to improve the banking conditions Habib Bank Limited. As we know that nothing is perfect,
there is always a room for improvement, so I have found during my internship can be made up
taking into account the following suggestions.

• HBL is in the process of providing the services of Automated Teller Machine. In


order to complete with the other banks ATM services must be provided throughout
the country as this service is becoming very popular in bank customers.

• The bank is also in process of computerizing its records which is good sign but it is
going on with small progress Computerization must be done on early basis. This will
help in increasing efficiency of work don, customer’s satisfaction decreases the
stationary cost and resultantly it will increase profits.

• In Past Habib Bank Limited has always being suffered from bad Government
policies. Government intervention should avoid completely.

• Employees Training programme must be introduced on continuous basis so that


Employees have understanding with the latest developments especially with the
customers.

• Bank should introduced incentive plans for employees on regular basis so that if
employees may work whole heartedly for the welfare of their organization. While
giving incentives qualification, work, experience, hard work and such other factors
must be considered.

• Mismanagement of resources must be avoided as much as possible as it decreases


profit but also discourage hard worker and honest employees.

• Fresh graduates must be recruited. As the combination of Experienced and fresh can
produce better results and it will improve the efficiency of management.

• Habib Bank is going towards mobile banking but the problem is that a common client
has no idea of its usage due to lack of marketing. I think that a proper marketing plan
must be launched for client’s awareness.

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Internship report on Habib Bank Ltd
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• Banks different schemes must be conveyed to the targeted customers so that to have a
reasonable share in market.

• Bank should help the society by providing interest free loans to the Talented Students.

University Of Sargodha