Report Askari Bank

SECTION-I
INTRODUCTION
1.1 OBJECTIVE OF THE STUDY

For getting the master degree in Commerce, each student is required to spend at
least two months as an internee in a recognized organization. The students are required to
work in their own field in which they have done their specialization.
Main purpose of this program is to make students familiar with the practical
work, as there is great difference between what they have learnt during their study and
how the job is practically done.
Another important aspect of the internship program is that internee is placed in
most of the departments of the organization through job rotation. It provides a glance of
each department, as the period is too short for learning in detail.
1.2. SCOPE OF THE STUDY
1). It is a compulsory requirement for the award of Master Degree in Commerce.
2). It will help the present and prospective students of the department in making
assignments and writing reports on the ACBL, evolution of baking,
importance of banking and different operations.
3). It can also provide help to ACBL’s management in identifying their
Strengths, Weaknesses, Opportunities and Threats.
4). It can also provide assistance to students seeking financial data for analysis.
1.3. IMPORTANCE OF STUDY
Banks play a central and very important role in the economic life of a country,
that’s why they are considered as the lifeblood of modern economy. Today no one can
deny the importance of banking in the economy. They facilitate and expedite trade and
commerce and provide a variety of services that one can’t imagine without banks.
I have chosen the Askari Commercial Bank Ltd. Peshawar Cantt. Branch for my
internship because it has all the departments a bank could have.
Besides, ACBL plays an important role in the economic development of Pakistan
that can be exhibited by its progressive performance in the present era.
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1.4. RESEARCH METHODOLOGY
The methodology that I adopted for this research project is based on both the
primary as well as secondary data. The sources of primary data were:
1. Formally arranged interview/ discussions with Management, Manager and other
Staff members.
2. Personal observations.
The sources of secondary data were;
1. Annual reports.
2. Over view of the ACBL.
3. Relevant books.
4. Internet resources.
During the research project, I observed that enough written material regarding the
Bank is not available, so I had count on my personal observation and interviews with
directors.
I spent eight weeks in the main branch and one week at each department and
collected information from discussion and interviews with directors, so most of the data
of this report is primary .I also availed assistance from few relevant books.
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SECTION-II
EVOLUTION OF BANKING
2.1. MEANING OF BANK

Some authors are of the opinions that the word ‘bank’ is derived from Italian
word “bancus” or “banque” which means a bench. Because in the old days the Jew were
used to make banking settlements by sitting on the benches & to deal the exchange of
money in the market place. When any one of them becomes insolvent this means that he
is unable to fulfill his requirements. Then his bench was destroyed by the customer &
this practice given birth to the word “BANKRUPT”.
Some other Authors are of the opinion that the word bank is derived from a
German word “back”, which means “Joint Stock Fund”. & When the major part of Italy
was occupied by the German then this word back was Italianized in to the word Bank.
However, no confident record is available to rely upon. Therefore, we are not in a
position to give any bounded meanings to bank inspire of all these we can define bank as
follow.
1. The imperial dictionary defined a bank as “An establishment for deposits & issue
of money & also for granting loans discounting bills & facilitating the transaction
from one place to another place”.
2. It is an institution, which deals with money.
3. It buys & sells the uses of money.
In other words, we can say “A bank is an institution for exchange of money,
sanctioning credit, transferring funds by domestic & foreign bills of exchange.”
We can also say that it is a pipeline through which money moves into & on of
circulation.
Shortly & conclusively we can say that the “Bank is an institution that facilitates
the matters in which the money is involved”.
2.2. ORIGIN OF BANKING
Banking in fact is primitive as human society. It was developed in various stages
by many peoples, when a man came to realize the importance of money; they need a
well-defined rules & regulation for financial matters.
Perhaps it were the baby lenions who developed banking system as early as 2000
B.C. the baby lenions were used to keep the money of the people in Temples, because of
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the prevalent respect & confidence in community, so, first of all they used their temples a
bank & this was the start of banking.
King Humrani (1686 bc.---1728) a Babylonians empire was the first man who
provides some guidelines & regulations for banking. He described financial rules &
regulations on a 8 feet tall stone, containing 150 paragraphs which deals with all aspects
of loans interest, pledge, guarantee, natural accidents & loss etc. it was the baby Lonions,
Sumerians, Hitties & Assyrians who standardized the value of goods in silver, copper,
bronze or electrum.
As regards the growth of modern commercial banking G. Crowther in his famous book
“An Outline Of Money” has traced the history of modern English commercial banking.
According to him, the present day banker has three ancestors;
1. The merchants
2. The goldsmiths &
3. The moneylenders.
1. The Merchants:
The earliest stage in the growth of banking can be traced to the working of
Merchants. These merchants were traders in commodities. They carried on the trading
activities from one place to another. It was risky for the traders to carry metallic money
with themselves for payment. The traders with high reputation begin to issue receipts
that were accepted as a title of money. These Receipts or Letter of Transfer also called
Hundi in Indo-sub continent were the first made of payment. The merchants banking
thus forms the earliest stage in the evolution of modern banking.
2. The Goldsmiths:
The second stage in the growth of banking is normally traced to the earlier
goldsmith. These goldsmiths also called SETHS in India used to receive GOLD &
SILVER for safe custody. The goldsmith began to issue receipts for the metallic money
kept with them. These receipts with the passage of time became payable to the bearer on
demand, in this way ‘goldsmiths’ note became a medium of exchange & a mean of
payment. The goldsmith thus came rightly be termed as the forerunners of modern bank
note.
3. The Moneylenders
This third stage in the development of banking arouse when the goldsmiths
became the MONEY LENDERS. By experience the goldsmiths (who were called
moneylender) came to know that they could keep a small proportion of the total deposit
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for meeting the demand of customers for cash & the rest they could easily lend, they
allowed the depositors to draw over & above the money actually standing to their credit.
In economic terminologies we can say that they allowed over draft facilities to their
depositors.
 Confusion in Dealing:
When every money lender/ goldsmiths issued receipts & most of them allowed
overdraft facilities there were then too much confusion in the banking system.
The moneylender/goldsmiths, in order to earn profit could not keep adequate
reserves permitting the demand of customers for cash. The failure on the part of
moneylender/ goldsmiths to return money caused wide spread distress among the
people.
 Creating Confidence:
In order to create confidence among the people steps were taken to regulate
banking organization. A confidence was held in Nuremberg in 1548. It was
decided that a bank should be set up by the state, which should stream line the
banking organization & technique. The first central bank was formed in Geneva
in 1578. The bank of England was established in 1694. The modern commercial
banking system actually developed in the 19th century.
First Bank of the World:
First bank of the world was established in 1157 in “VENIS” by the name of
“BANK OF VENIS”. In the beginning of 15 th century many banks were opened in
Europe e.g. in the city. of Spain at Barcelona in 1401. In the city of Italy at Geneva the
“BANK OF GENEVA” in 1407, in Holland the “BANK OF AMSTERDAM” in 1419 &
so on. Now a day in every country of the world large number of are functioning.
2.3. MODERN BANKING
Despite of its classical origin, banking in its modern form & structure started in
Britain when many of the Lombardy merchants came to England in the fourteen century
& settled in the parts of the city of London now called Lombardy Street. They were so
resourceful that even the kings have to depend on them for loans despite the fact that the
Church was firmly against usury. They dealt with not only keeping the money in safe
custody but also changed money for the travelers or merchants engaged in forcing trades.
When this business gets popularity then the king Edward 3 established the office of
Royal Exchanger for exchanging foreign money at profit. At that time provided the loan
of 130000 pounds to the King Charles 1 in 1640. But later on the king refused from the
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repayment. This shook the confidence of merchants in Royal Mints, & they handed over
from business. Now the gold smiths, who were dealing only in gold & silver up to that
time, took their business.
But unfortunately in 1672, the English Banking faced a great crisis when Charles
2 borrowed huge sums of money from the gold smiths & later on refused to pay them
back. Therefore, a number of gold smiths banker formed themselves into a corporation in
1695, known as the Bank of England. This bank advanced a loan of 1,200,000 pounds at
8% to king William 3, who in return allowed a number of privileges in the bank,
especially the right of issue Notes Payable to bearer on demand up to the amount of this
loan.
By the year 1700, the bank of England was not only issuing Notes, but also
conducting accounts for customers. Being a Joint Stock Bank by Charter, its Directors
were conducting business like that of limited companies. The Bank of England was the
only Joint Stock Company which was given the monopoly of bank notes, though the
original goldsmiths & other private bankers were operating very successfully outside
London, & were receiving valuables & money for safe keeping, & also issued notes as
evidence. In 1708, act passed the privilege to issue notes in England was withdrawn from
Joint Stock Bank & this right was given to Central Bank.
2.4. DEVELOPMENT OF MODERN BANKING
In 1854 the Joint Stock Companies Act opened an era of corporation; & the
Limited Liability Act, 1855, restricted the liability of shareholders of a Limited
Company to the amount of the successfully paid-up value of the share held by them. In
1913, clearing banks were established in England. This affects the banking system
positive. First a large number of banks were established with a wide range of branches.
Another step towards the development of banking was the function of trade, in order to
boost up the trade. They decided about the amalgamation & absorption of bank. They
suggested the before any amalgamation the permission from govt. is must.
The significant step in the development of banking was taken, when in 1946 the
Labor Govt. nationalized the Bank of England & here it got a proper position as a
Central Bank of England. The crown was the supreme authority to appoint Governor,
Deputy Governors & directors. The other shareholders of the bank were given in
exchange three-cent long term Govt. Stock, thus keeping the holders content & happy,
as they were getting the same return as before.
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2.5. GROWTH OF BANKING IN PAKISTAN
At independent, Pakistan like the industrial base had a very weak banking
system. Pakistan inherited 629 branches of scheduled banks out of total of 3146
operating in the whole India. As regards the number of head offices, which came to share
of Pakistan, these were 13 out of the total of 98 in India. The number of non-scheduled
banks branches, which were operating in the area, called Pakistan in 1947 were 487 &
head offices 157 out of the total of 2205.
Before, partition of the Subcontinent, the banking business was almost controlled
& operated by the non-Muslim staff. The rich Hindu & Sikh community gave the first
blow to the newborn state of Pakistan by transferring the deposits to the branches
situated in India. There was wholesale migration of the banking staff particularly from
the west wing of the country to India most of the scheduled & nonscheduled branches of
commercial bank were closed. The number of branches, which remained in operation in
the both wings of the country, was 213 of scheduled bank & 106 of the nonscheduled
banks.
The government of Pakistan with all sincerity gave liberal concession to the
Muslim for the safe custody of their deposits & property in Pakistan. The response was
discouraging. The non-Muslim clients & staff of the banks removed their valuables from
the safe deposit vaults & withdrew the amount & left Pakistan to paralyze it financially.
The inter dominion agreement reached between the two new independent states in 1949
for the maintenance & transfer of deposits also could not implemented.
The government of Pakistan, in order to rehabilitate & regulate the growth of
banking on strong footings established its Central Bank, called State Bank Of Pakistan
on July 1,1948. The National Bank was set up on November 21,1949 to purchase jute
from the growers in the former East Pakistan, it was to assume normal commercial
banking functions & also to act as the representative of the State Bank Of Pakistan where
it had no branches.
The State Bank took keen interest in the development of money market on sound
footings. This is the establishment from the fact that the number of the scheduled bank
increased from 2, (July 1948) to 17 by the end of June 1971. So was the increase in the
number of foreign banks from 7 in 1948 to 20 in 1971.
In 1957 govt. here established Pakistan Industrial Credit & Investment
Corporation (PICIC) for boasting the industrial sector.
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The banking facilities was more enlarged, when in 1959-60, the two more banks
were established i.e. United Bank Limited in west Pakistan & Eastern Mercantile Bank
in Eastern Pakistan.
In January 1974 all the Pakistani commercial banks were nationalized. The
weaker commercial banks were merged with stronger ones & in all five major banking
companies were formed.
1. National Bank of Pakistan.
2. Habib Bank Limited.
3. United Bank Limited.
4. Muslim Commercial Bank Limited.
5. Allied Bank of Pakistan Limited.
In short now a days Pakistan has a sound network of banking.
Total Number Total Assets Total Total Advances

(Bill. US $) Deposits (Bill. US $)
(Bill. US $)
Nationalized 6 14 12 8
Commercial Banks
Local Private Banks 40 9 7 5
Foreign Banks 32 4 3 2
Specialized Banking 6 2 0 2
Institutions
Total 84 29 22 17
2.6. BANKING SECTOR IN PAKISTAN

 Total Assets of banks: $20.7b.
 Total Profits: -$35.9m.
 Median Assets: $2.7b.
 Median Profits: $3.7m.
 ROA: -0.173%
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The following figures reflect the rapid development of banking system in
Pakistan from 1948 to 1993.
1948
Bank Deposit 880m 290,000m
Bank Credit 200m 21,000m
Offices of scheduled banks 81 7,100
Pakistan is one of the key emerging markets of south Asia with a total population
of over 140 million people. Banking play in the economic development of a country.
They are considered to be the life – blood of modern economy. Banks are the custodians
and distribution of liquid capital. Their importance has been recognized in all times
either in depression or boosting of the economy.
2.7. REGULATORY FUNCTION
The banking of Pakistan is responsible for licensing, directing, supervising,
controlling and inspecting banks, and for exercising various monetary sector in Pakistan
is highly regulated. As the Central Bank of the country, the State Bank of Pakistan
regulates the banking sector with full autonomy. In general, State Bank control policy
measures. In addition, the Securities and Exchange Commission of Pakistan also
monitors the operations of the listed banks in so far as they relate to public shareholding
matters.
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HISTORY AND GROWTH OF ACBL
3.1. INTRODUCTION & HISTORY

In early 90s, there was a growing trend among govt. circles to involve private
sector in the uplift of socio-economic condition of masses. Many ordinances were passed
to facilitate the deregulation. This policy of openness and deregulation presented bright
prospects for the private sector to grow and expand their businesses in the country. Many
national and international corporations started investing in various sectors of economy
especially in the banking sector. Banking sector holds vast promise in Pakistan and
realizing this fact Army Welfare Trust (AWT) decided to establish a commercial bank
with its branches spread nation-wide.
ACBL was incorporated in Pakistan on October 9, 1991 as a public United
Company, by Askari welfare trust (AWT), which is doing a great job for the welfare of
the Army people. The bank is listed on Karachi, Lahore and Islamabad stock exchanges.
The bank obtained its commencement certificate on February 26, 1992 and started
operations from April 1, 1992. Since its establishment it’s performing a great job. The
number of branches has increased to 61 internationally it is connected with 92 branches.
Phased upgrading of the online computer system countrywide have enabled the bank to
fertile improved its services to retail and corporate customers and enhanced the banks
risk control an assets and liability management ability. The bank is also providing ATM
and credit card facility to its customers. The bank is a schedule commercial bank and is
principally engaged in the business of banking as define in the banking companies’
ordinance 1962.
3.2. AWARDS AND ACHIEVEMENTS

Over the years Askari Commercial Bank Limited (ACBL) has been in the
banking business as one of the leading banks in Pakistan and has received several awards
for the quality of their banking services to individuals and corporate.
ACBL has been declared as “the best bank in Pakistan” by the Global Finance
magazine for the year 2001 &2002. It is also been given the “best consumer internet
bank” award for the Pakistan by the same magazine for the year 2002.
In 1994, 1996 and 1997, ACBL received “Euro money” and “Asia money”
awards. Askari Bank has A1+ rating for short-term obligations, the highest possible
category, while the long term rating stands at AA. Askari Bank won the prestigious “best
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presented annual accounts” awards for the year 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 has received prizes from the South Asian
Federation of Accountants for "The Best Presented Annual Accounts" for the
financial sector, in the SAARC region.
Over the years, Askari Bank has proved its strength as a leading banking
sector entity, by achieving the following firsts in Pakistani banking: -
 First Pakistani Bank to offer on-line real-time banking on a countrywide
basis.
 First Bank with a nation-wide ATM network.
 First Bank to offer Internet Banking services.
 First Bank to offer e-Commerce solutions.
3.3. PERFORMANCE HIGHLIGHTS OF ACBL

The performance highlights of ACBL are depicted from the date available, which
shows the progressive approach of ACBL.
Business Volumes:
2019(Rs. in '000) 2018 (Rs. in '000) 2017 (Rs. in '000)
ASSETS 70,313073 50,980,392 38,454,262
LIABILITIES 66,140,409 48,401,674 36,299,707
NET ASSETS 4,172,664 2,578,718 2,154,555
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Profitability:
2019 (Rs. In '000) 2018 (Rs. in '000) 2017 (Rs. in '000)
Net Interest Income 1,638,357 1,348,410 939,083
Fee Based Income 1,049,006 796,282 627,383
Net Profit 1,244,022 1,008,498 751,588
Taxation 557,028 458,447 436,000
Payout (Cash
217,463 207,107 147,439
Dividend)
Earnings Retained 469,531 343,444 168,174
3.4. DISTINCT FEATURES OF ACBL

One of the most important features of the bank is the sponsorship of AWT for
this bank. It is a hard fact that the business in the modern world and through ages has
been dependent on the trust of people in an organization. At the time the Askari
Commercial Bank Limited (ACBL) was being introduced into the market, there were
certain scandals eminent in the sponsorship of AWT was a big boost for this bank
because people trust armed forces based organizations. This symbol of trust can also be
observed in the motto of the bank “The Security Bank, a name to trust”. This mater of
trust has given the initial boost to this has performed exceptionally well after its
emergence.
3.4.1. Mission Statement of the ACBL:

The mission statement of ACBL reads as follows: -
“To be the Leading private sector bank in Pakistan with an international
presence, delivering quality services through innovative technology and effective
human resource management in a modern and progressive organization culture of
meritocracy, maintaining high ethical and professional standards, while providing
enhanced value to all our stake-holders.”
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3.4.2. Vision of the ACBL:
Best Bank in Pakistan Best Domestic Bank Commercial Bank of the Year
2001 1995 1994 & 1996
Global Finance Euromoney Asia money
Best Annual Report Long-term Rating AA Short-term Rating A1+
1997,1998 & 1999 PACRA PACRA
NCCA
3.4.3. Objectives of the Bank:

The concept of an organization without an objective is meaningless. The main
objective of Askari Commercial Bank Limited is to maximize profit. This profit is
transferred from army welfare trust to general head quarter from where it is distributed
among the families of martyrs in proposed ratio.
Main objectives of ACBL can be summarized as follows:

 To survive and earn profits.
 To provide quality services to customers.
 Expanding the market share and grow.
3.4.4. Core Values of ACBL:

The intrinsic core values which are corner stones of ACBL’s corporate behavior
are: -
 Commitment.
 Integrity.
 Fairness
 Teamwork.
As part of ACBL internal communications program, these core values are
inculcated in its employees through internal memos, posters and most importantly
leading by example.
3.4.5. Corporate Achievement:
ACBL states about its Corporate Achievement as,
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“Amidst tough competition, our efforts to go an extra mile in providing superior services
to our customers have been acknowledged at the national as well as international levels.
These acknowledgements serve as a great source of encouragement and appreciation at
one hand and inspire us to perform even better, on the other. The “Global Finance
Magazine” has honored us with the “The Best Bank in Pakistan” award. We won the
“Euromoney” and “Asiamoney” awards as early as 1994, 1995 and 1996. We have
Al+, the highest possible credit rating, for the short-term obligations, and our long-
term rating stands at AA. We won the prestigious "Best Presented Annual Accounts"
award from the Institute of Chartered Accountants in Pakistan, and The Institute of
Cost and Management Accountants, Pakistan, for the services sector, for 2000. We
have also received prizes during the last four years from the South Asian Federation
of Accountants (SAFA) for the "Best Presented Annual Accounts" for the financial
sector, in the SAARC region.
We were the first bank in Pakistan to offer Internet Banking services and B2B
E-Commerce solutions for merchants looking to purchase on credit. These
achievements undoubtedly are the result of our consistent hard-work and honest
efforts to be the best in whatever we do.”
3.4.6. Corporate Citizenship:
ACBL states about corporate citizenship in the following manner,
“Our role as a responsible corporate citizen is as important to us as the products and
services we offer. We have made useful contributions in the areas of sports, culture,
poverty alleviation, health & medical sciences, education and scientific research. We
are one of the co-sponsors of the 9th South Asian Federation Games, now schedule to
be held at Islamabad in the Year 2003. We have also sponsored various sports
tournaments at both amateur and professional level. Our contributions to the NGOs
dedicated to the treatment and welfare of the blind is a ray of hope in the darkness.
We have made donations to the drug-addiction control programs and our efforts to
help support Aids Awareness programs and contributions to the mental and social
welfare of women and children have won much acclaim. We participated in IUCN
Water conservation initiative and have helped in creating better understanding about
the country on the international platform by cosponsoring the first interactive
encyclopedia on Pakistan.”
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3.4.7. Corporate Philosophy:
ACBL’s corporate philosophy says,
“From knowing our customers' requirements to understanding employee needs, from
utilizing modern technology to making responsible social contributions, from
enhancing stake-holders' value to practicing corporate ethics, we are continuously
and consistently striving to address newer challenges with a single motivation - the
power to inspire and be inspired.”
3.4.8. Customer Relationships:
ACBL says about relations with its customers in the following manner,
“Knowing our customers and their needs is the key to our business success. Our products
and services are structured to touch and improve the quality of lives of all segments of
society. Service quality standards are designed and monitored to ensure a consistent and
convenient customer experience. Our client relationship managers are well equipped and
well trained to provide most efficient and personalized service to each and every
customer. Our products and services are as diverse as our market segments. We have
structured and syndicated financing arrangements, working capital finance, Balancing-
Modernization Replacement (BMR) facilities, financing of international trade, consumer
credit, small business loans, credit cards and unparalleled investment products for the
individual saver. Askari Bank is proud of the pioneering role in providing the most
modern technological services to its customer base, which today exceeds 250,000
relationships.”
3.4.9. Employee Relationship:
ACBL seeks its employee’s relationship in the following scenario,
“Our staff is our most valuable asset. The human resource philosophy at Askari Bank
focuses on multi-talent hiring, professional grooming, requisite training and
meritocracy based reward system. We lay great emphasis on the development and
nurturing of "Askari Culture", a cohesive teamwork, where each relies on the strength
of the other and together they achieve common objectives. Staff welfare has always
been a priority. New initiatives like hospitalization plan, car buy-back facility and
home loan insurance have added new dimensions to the staff-care policy and
motivated them to out-perform our competitors. Employee productivity enhancement
is organized through extensive in-house and external training programs. We continue
to offer opportunities for people to develop their knowledge, skills and personalities,
thus ensuring greater self-fulfillment and progression in the organization.”
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3.4.10 Growth:
ACBL’s growth is measured by ACBL as,
“We live in a moment of history where ever thing is changing so fast that we begin to
see the present only when it is already disappearing. Our customer needs are
changing and their expectations are growing. Technology is fast proliferating the
distribution channels and now banking services can be accessed from multiple
contact points. We believe that balanced growth is the key to survival in today's
global banking environment. From a humble beginning with just 7 branches in 1992,
today we enjoy a network of 61 outlets, spread across the country. These outlets are
supported by a network of self-service ATMs. Our total assets now exceed Rs. 50.9
billion and we have over 17 products and services to match our customers' individual
needs. Bank's equity base stands at Rs. 2.58 billion with 20 growths over the last 5
years. The human resource capital of the bank today exceeds 1,200 employees. As
part of our growth strategy we are now extending our banking services to the remote
and rural areas.”
3.4.11. Technological Innovation:
ACBL says about technological innovation as,
“Technology is rapidly changing the way we think, act and do
business. It has played a pivotal role in enhancing customer
expectations, particularly with respect to speed and quality of
service. We enjoy a strategic competitive advantage over all
domestic players by virtue of our leadership in technological innovations. We have
fully automated transaction-processing systems for back-office support. Our branch
network is connected on-line real-time and our customers have access to off-site as
well as on-site ATMs, all over Pakistan.
Our Phone Banking service and Internet Banking facility allows customers to
enjoy routine banking services from anywhere in the world, 365 days a year, 24 hours
a day. We have also pioneered e-commerce venture in Pakistan through a major retail
distributor. Our qualified and experienced technology team is now focusing on data
warehousing to enhance the Customer Relationship Management (CRM) program.”
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ORGANIZATIONAL STRUCTURE OF ACBL
The organizational structure of ACBL is like a pyramid, which works upside

down. The different zones are encouraged to set up their own targets, functions and
responsibilities. These activities become the duties of the employees. Usually a
bank’s organization hierarchy refers to various level of authority in an organization
ranging from board of directors at the top to the operating workers at the bottom.
4.1. BOARD OF DIRECTORS
Lt. Gen. Faiz Jilani (Hilal-e-Imtiaz) Chairman
Lt. Gen. (R) Masood Parwaiz Chairman Executive Committee
Mr. Kalim-ur-Rahman President & Chief Executive
Brig (R) Muhammad Shiraz Baig Director
Brig (R) lkram ul Hasan Director
Brig (R) Asmat Ullah Khan Niazi Director
Brig (R) Muhammad Safdar Ali Director
Brig (R) Shauket Mahmood Chaudhari Director
Mr. Zafar Alam Khan Sumbal Director/Secretary
Mr. Shahid Hafeez Azmi Director
Mr. Muhammad Afzal Munif Director
Mr. Tariq lqbal Khan Director (NIT Nominee)
4.2. AUDIT COMMITTEE
Mr. Muhammad Afzal Munif, FCA Chairman
Brig. ® Muhammad Shiraz Baig Member
Brig. ® Muhammad Asmat Ullah Khan Niazi Member
Mr. Zafar Alam Khan Sumbal Secretary
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Auditors:
Ford Rhodes Sidat Hyder & Co Chartered Accontants
Company Secretary:
Mr. Zafar Alam Khan Sumbal.
Legal Advisors:
Rizvi, Iso, Afridi & Angell
4.3. ORGANIZATIONAL CHART
An organizational chart is prepared to show formal organizational relationship,
which is intended to prevail.
Board of directors, comprising of 12 directors, leads ACBL. Board of directors in
a public limited company are elected by shareholders using their voting rights who are
responsible for the affairs of the company including operations, management and control
of company’s business, taking important decisions and formulating broad policies and
objectives of the company.
ORGANIZATIONAL CHART OF ACBL PESHAWAR CANTT. BRANCH
Branch Manager
Audit Department Manager Operations
Accounts Deptt. Deposits Deptt.
Credit Deptt. Computer Deptt.
Remittance Deptt. Foreign Exchange Deptt.
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An Internship Report on Askari Commercial Bank Limited
4.4. ASKARI BANK BRANCH NETWORK

Askari Commercial Bank Ltd. is very progressive bank and is engaged in variety
of businesses and thousands of customers are dealing with ACBL. In order to meet out
the increasing demands of the people, ACBL has established 61 branches across the
country along with an overseas branch in Bahrain.
ACBL Branches over the Years:
YEARS NUMBER OF BRANCHES

2009 62
2013 77
2016 85
2018 105
DEPARTMENTATION
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The Askari Commercial Bank limited Peshawar Cantt. Branch is situated in the main
commercial area of Peshawar Cantt. located on Mall Road. The premise is well-
equipped and well-furnished and designed to offer maximum facilities to the
customers under one roof. There is a specious car parking facility. The staff is
qualified, courteous and well dressed. The suitable location facilities and amiable
staff make the customer’s visit convenient and pleasant.
5.1. DEPARTMENTATION AT HEAD OFFICE OF ACBL

There are various divisions at the head office of ACBL, each division is called a
specialized unit and performs different functions as to achieve the overall goals and
objectives of the ACBL. Following are the divisions at head office of ACBL:
5.1.1. Credit Division:

The Credit Division (CRD) primarily concentrates on the evaluation and
appraisal of the credit proposals through a team of highly experienced professional
bankers at all levels. The evaluations system comprises of well-defined multi-tier credit
appraisal procedures with extensive guidelines covering the qualitative and quantitative
aspects of credit evaluation. The emphasis has always been on the diversification of the
Bank’s risk assets to avert large-scale industry and single party exposure. Most of the
advances are short-term trade related on a secure and self-liquidating basis.
5.1.2. Electronic Technology Division:

The Electronic Technology Division (ETD) has been the most visionary of all the
Bank’s operating units. It has established Askari Bank as the leading provider of
electronic services and solutions to its customers, and continues to lead in innovations
and introduction of new technology based products.
5.1.3. System and Operation Division:

The System and Operation Division (SOD) has been instrumental in the
development of procedures and manuals for various operating requirements of the Bank.
After careful mapping of existing process flows, SOD recommends Automation and re-
engineering requirements to improve transaction efficiencies. It is also responsible for
the procurement of equipment of branches, and coordinates the development of new
branch premises.
5.1.4. Asset Products Division:

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The Asset Products Division (APD) is engaged in the development and

management of retail credit schemes. The consumer market in Pakistan has not only
grown exponentially over the last decade or so, but the needs of this segment have
become extremely diverse.
5.1.5. Investments Products Division:

Responsible for developing and managing brands which serve the investment
needs of the consumer market, this unit focuses on deposit mobilization, provision of the
value added services based on the modern technology and undertaking the centralized
marketing and advertising of the bank. The unit is also actively involved in the
acquisition business and has signed up over 300 merchants nationwide which offer
shopping discounts to the bank’s privilege card members. Like Askari Bank’s value plus
is a unique deposit account.
5.1.6. International Division:

The International Division (IND) Mainly responsible for managing correspondent
banking relationships and planning overseas operations, the division plays vital role in
extending foreign trade transactions support to the branches. The bank became a member
of SWIFT in the year 2000; with network of 167 correspondents spread over 15
countries worldwide.
5.1.7. Treasury:
Responsible for managing bank’s liquidity and foregone exchange transactions,
ACBL treasury is one of the most active in the market. Through report transaction,
purchase of government paper and foreign exchange trading, the division adds
substantially to the bank’s sustained earnings. It also reports to the state bank of Pakistan
on regular basis.
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5.1.8. Corporate and Merchant Banking Division:

The Corporate and Merchant Banking Division (CBR) is engaged in the
provision of financing facilities to large corporate clients inducting multinationals.
Principal activities include syndicated loans, guarantees, and working capital finance and
underwriting and advisory services. The division has played important role in providing
development finance for the modernization and expansion of the country’s core
industries like fuel and energy, chemicals, textile and fertilizers.
5.1.9. Credit Card Division:

The Credit Card Division (CCD) manages the Askari Master Card brand and is
headquartered at Karachi. With a new fully automated transaction processing system, the
product was re-launched in 2001 and supported by an aggressive marketing campaign
the portfolio now comprises of more than 30,000 cardholders in a short span of time. The
card is accepted worldwide and at over 4000 locations in Pakistan.
5.1.10. Planning and Corporate Affairs Division:

The Planning and Corporate Affairs Division (PCD) is relatively new division set
up in September 2002. It has been established to provide strategic direction to the Bank
having a futuristic outlook. It envisages undertakings that would build towards a solid,
stable but rapid growth and would result in sustained profitability.
5.1.11. Human Resource Division:

Strategically, Perhaps the most important division at the head office is
responsible of human resource management, including recruitment staff training and
evaluation the division also handles matters relating to administration. This division
operates on a future oriented strategy focusing on employees’ personal and professional
growth.
5.1.12. Internal Audit Division:

The Audit division reports directly to the board through the executive committee.
This is also the audit committee. The audit division acts completely independent of the
management and is responsible for checking and reporting on the management’s
complacence with the board’s policies and directives as also the prudential regulations
and other directives of the SBP.
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5.1.13. Finance Division:

The Finance Division (FND) is responsible for bookkeeping and account, this
division of the head office, prepares all financial returns and the MIS through is
management reporting wing, the division is actively involved in preparing market
consolidation of bank’s budgets, its monitoring and constant review of various financial
indicators.
ORGANISM OF ACBL
5.2. DEPARTMENTS AT ACBL PESHAWAR CANTT. BRANCH

5.2.1. Accounts Department:
This department coordinates all the banking activities and keeps them in a
sequence and provides up to date data. This department is responsible for proper
accounting of assets and liabilities for the bank in addition to bookkeeping.
It also deals with the financial statements of the bank. Other functions performed
by this department are following: -
 Head office reconciliation,
 Provision of expenses such as medical, repair and maintenance, utilities etc.
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 Disbursement of staff salaries, pre audit function, budgeting, etc.

 Maintenance of SBP statutory deposit, depreciation calculation, half yearly and
yearly closing etc.
5.2.2. Computer Department:

Computers have become an important element of the modern banking system.
This department of the bank is responsible for the computerization of all the branch
operations and the maintenance of the computer system.
 Daily Transactions:
To record all the transactions in case of deposits made by the people and also to
record all the withdrawals made by the people or customers. Each transaction has to be
recorded in its appropriate head of account with the help of prescribed codes.
 Vouchers:
To record all the vouchers made by the remittance department. Remittance
department have to prepare debit and credit vouchers for about every transaction
recorded in their department. Then these vouchers are sent to computer operator to
record those in computer.
 Advices:
To record all advices received from other branches. Most of the-inter branch or
intra branch- remittances are subject to ultimate receipt of advices from the
corresponding branch to materialize the transactions. These advices also have to be
recorded in computer.
 Statements:
To close the daily record a number of statements have to be printed out.
Statements like:
 Day’s transactions (sequence)
 Overdrawn facilitated a/c statement
 Markup sheet
 Inter branch transactions
 Detail of PLS and Current a/c
 Day’s transactions (a/c wise)
 Operative, Dormant, Inoperative and Unclaimed a/c
 All ATM transactions
 Detail of JL (Journal ledger) entries (official & non customer transactions)
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 Summary of all a/c (debits, credits & balances)

 JL
 Others
 Profit due, transferred, disbursed, etc.
5.2.3. Deposit Department:
This department deals with the retail banking i.e., customers account. Accounts
are opened here and maintained by them. It is the blood of whole banking because
accounts are the key to all the banking activities. Bank reserves deposit in various shapes
and offer a wide product line of deposits for sale to customers.
Deposit department has following sections:

 Accounts Section:
In ACBL’s Accounts section, following four types of Accounts are maintained:
1. Current Accounts
2. Saving Accounts
3. ASDA
4. Value Plus
1. Current Account:
In current account, there is no restriction on the account holder for the withdrawal
of money. He can take as much money as he wants and no profit is given on this account.
The person wishing to open this account has to fill in an application form giving
full particulars such as name, address, occupation, and specimen signature & need to be
introduced by the account holder of the same branch. However manager of the bank can
introduce if he knows such person personally.
It can be further classified into the following types:
Individual Account:
Individual account is opened in the name of a single person. The person in whose
name is it opened can only operate it. The bank doesn’t pay any interest on it.
Joint Account:
Two or more persons open the joint account and the bank follows their
instructions for the conduct of the account.
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Proprietorship Account:
A proprietorship is a business unit whose ownership and management are vested
in one person. This individual assumes all risk of loss or failure of the enterprise and
receives all profits from successful operations.
Partnership:
Partnership is an avocation of two or more persons who have agreed to share the
profit of a business managed by all or by some of them on behalf of all. A deed is
prepared on the stamp form by the partners approved by Sub-Registrar and presented to
the bank. The bank follows this deed during the conduct of account. This is, when the
partnership is registered.
In case of unregistered firm, the bank takes the instruction from the party at the bank on
account opening form.
Limited Companies:
There are two types of limited companies;
a. Private Limited Company
b. Public Limited Company
a) Private Limited Company:
The shareholders of limited company are called directors. The board of directors
decides the bank in which they should open their account and the amount to be
kept in certain account. The bank requires the following documents from the
board of directors;
- The Article and Memorandum of Association
- The Certificate of Incorporation
- Resolution of Board of Directors
- List of Directors
b) Public Limited Company:
The public limited company, not only requires the above-mentioned documents,
but in addition, it also needs a certificate of commencement of business.
Power of Attorney:
Power of attorney is an instrument in writing in which one person authorizes
another to do any lawful acts on his behalf. The proprietor can give authority to any
person to handle his account in his absence. The owner of the form writes deed on the
stamped form. Oath commissioner attests it. The bank follows all the instructions given
on the stamp form.
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2. Saving Account:
Saving deposits accounts were introduced in England under the trustee saving
bank Act 1863 to receive money from depositor without any definite to trustee. This is
an account that is suitable for small depositors.
In Pakistan the saving Bank accounts are known as profit and profit and loss
sharing accounts (PLS A/C) fowling the illumination of bank. The owners of such
account are not allowed to withdraw money more than once are twice a week. In case of
with drawl of large sum, the depositor is required to give to give to prior notices a week
or two. Thus the bankers are not required is always available to bank for giving to loans
to their customers. Thus these deposits also serves as source of credit certain by the
commercial banks.
The rate or profit on this type of account varies from time to time. All the
commercial banks declare the rate of profit every year that is paid on these accounts on
the basis of their monthly credit balance. The bank will determine the proportion of
profit & its decision will be final. Profit will be determined on daily product basis while
it will be paid on monthly basis &will be paid on the minimum balance between the first
day & last day of the month. Zakat will be deducted on the exceeding amount as
exempted from the Zakat deduction. Taxes will be imposed according to the rules &
regulation. The bank has right to make investment or credit balance in any manner. It is
accepted for the period of one month or above.
The person wishing to open this account has to fill in an application form giving
full particulars such as name, address, occupation, and specimen signature & need to be
introduced by the account holder of the same branch. However manager of the bank can
introduce if he knows such person personally.
3. ASDA (Askari Special Deposit Account):
It is a special account operated by ACBL. It is just like current account i.e. it has
features of the current account e.g. Frequent Withdrawals etc. but unlike current account,
an ASDA account holder can earn profit on his investment.
4. Value Plus:
Value Plus, rupee deposit account, is like saving deposit in nature and promises
greater financial freedom and security, in an unmatched way. Investment is as little as
Rs.10,000/- in a value plus savings deposit and the account holder is entitled to earn monthly
returns, while still enjoying the flexibility of a normal checking account.
Minimum Deposit Requirements for Opening Individual Account:
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 Current Account Rs.5000

 Saving Account Rs.2500
 ASDA Rs.5000
 Value Plus Rs.2500
Fixed Deposit Account/Term Deposits:
These deposits are also called as time deposits because these deposits are based
on the fixed duration. The period for which these deposits are kept with bank are ranged
from seven days to ten years in light of the agreement between the customer and the
banker. The profit allowed on these account depend on the duration longer the duration
of the deposits the higher will be the rate of profit.
Since the fixed deposits remain with the bank for stipulated time so these can be
advanced profitably to the customer & thus fixed deposits appear to be the main source
of credit creation by the commercial bank.
The operation of fixed account is different from saving & current accounts. Every
time money is deposited with the bank an application from filled and the bank issue a
fixed deposit receipt for amount deposited along with specific period. Fixed deposit
receipt is given to the depositor and the bank retains the counterfoil of the same receipt.
Fixed term deposits may be in the joint names of two or more person. The
payment to one of that person will not discharge by the bank without the authority of
others.
OPENING AND OPERATION OF BANK ACCOUNT
As discuss earlier there is a prescribed procedure for opening different types of
account. Following steps re followed while opening a new account.
 Application from for Opening of Accounting
A person who wishes to open a bank account is required to complete this from
the personal information is to be furnished. The application signs the declaration to effect
that he has understood the rules and regulation of the bank.
 Introduction
As required by the banking law the new customer needs to be introduced by the
account holder of the same branch where the account is being opened. The manager or
any other bank officer may introduce the new customer if they know them personally.
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 Signature card
At the time of opening an account a specimen signature card containing two
signature of the customer is required which the manager of the branch attaches with
application form. During the operation of account the signature is verified when the
cheque is presented for payment.
 Cheque Book
After completing formalities for opening saving and current a cheque book is
issued to the customer for withdrawing cash from his or her account at the time of need.
The current cheque book contains minimum 25 pages or 50 pages while saving account
cheque book contains 10 pages. The bank also charges excise duty on cheque book.
Every page contains two parts. The left-hand part is called “counterfoil” and right hand
part is a cheque that is presented for receiving cash from bank. The cheque book also
contains an application form for issue of another cheque when all the pages are utilized.
 Cash Section:
Cash section is sub section of the Deposits Section where customer service
section prevails, in which the reception of collection and encashment of cheques takes
place.
This is the most important and critical department in a Bank. There are two basic
functions performed by the cash department. These are
 Receipts
 Payments
 Receipts:
An individual who has account in the Bank can deposit money in his account. For
deposit of the money the individual has to fill the deposit slip in which the account
holder writes his name, Account number, amount of the money both in figures and in
words.
After filling the deposit slip the Cash amount along with the deposit slip is
submitted with the cashier. The cashier collects the cash and counts it and after
verification the cashier stamps the deposit slip. One part of the deposit slip is given back
to the customer and the other part of the deposit slip remains with the bank for the record
purposes.
The cashier also record the deposits made by the customers in credit sheets daily.
The deposits of all customers of the bank are controlled by mean of ledger account.
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Every customer has its own ledger account and has separate ledger cards in which his /
her total record is kept.
Bill collection is also one of the main functions of bank. Cashier has to prepare a
list of bills’ serial number, a copy of which is to be sent to the corresponding
organization.
 Payments:
The Payment made by cash department follows the specified procedure.
Normally the Cash department constitutes of the token counter, and cash Counter. The
procedure of clearance of a cheque or payments is as following.
First of all the customer presents his cheque at the token counter. The person at
the token counter collects the cheque and records the cheque number, the account
number and the amount, which is to be drawn. Then the cheque is stamped at the token
counter by the person sitting at token counter on the backside of the cheque. Then a
token is given to the customer and he is asked to wait for his turn. The cheque from the
token counter is sent to the computer section for the verification whether the account
holder has such amount in his account which he is demanding or not. If the computer
section passes the cheque, the Passing officer signs the cheque and sends it to the cash
counter. Cashier then calls the token number, which is written on the cheque by the clerk
or person sitting on the token counter. The customer whose token number is called
comes to the cash counter. Cashier after collecting the token verifies the token number
and the number written on cheque and pays the amount. After making the payments the
cashier records the amount paid in debit sheets.
5.2.4. Remittance Department:
Remittance department deals with money transfer. It transfers the funds from one
bank to other bank and from one place to another place. The instruments accepted by
remittance department of bank are:
 Pay order.
 Demand draft.
 Telegraphic transfer.
 Online transfer.
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Pay Order (PO):
It is a negotiable instrument and payable on demand. It is an order from the

customer to make payment in favor of the receiver within a cantt..
Pay order is the most convenient simple and secure way of transfer of money. It
is issued by, drawn upon and payable by the same branch of the bank. It is neither
transferable nor negotiable and as such it is payable to the payee named there in. The
following are the parties to a pay order.
 Purchaser is a person, firm, company or local authority.
 Issuing/paying branch is one which issues/pays on presentation.
 Payee is a person named there in.
Demand Draft (DD):
DD is just a check and is issued when the customer wants to take the draft
personally. The idea behind it is that as the cash is not safe to be kept along and a check
in the shape of a draft is safer and one can easily get cash by presenting it in the bank, on
whose favor it has been made.
DD is also a negotiable instrument and payable on demand. It is an order by one
bank branch to the other branch in another cantt.. DD is purchased by customer and sent
to a required receiver or creditor.
Therefore, Demand Draft is another way of transfer of money from one bank to
another bank. Unlike pay order, a form is required to be filled for the issuance of the
demand draft in which necessary particulars about the beneficiary and sender are given.
The sender deposits the amount of DD plus commission and other charges on the bank
counter, from where he is given a receipt and in accordance with this receipt he is issued.
The following are the main essential of draft:

1. It is a Negotiable Instrument.
2. Filling a form and depositing the amount written on it.
3. It is a written order to its branches or to another bank to pay the stated amount on
draft.
Telegraphic Transfer (TT):
With the changing requirements of the customer, ACBL has introduced the fastest
transfer of money. The sender is required to apply through a form in which he will
give all the necessary details about the sender and beneficiary. The sender deposits
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the money to be transferred plus bank charges at the bank counter. The remittances
officials send a telegram to concerned branch with specified code words and the
receiving branch makes payment to the beneficiary. Vouchers are sent by ordinary
mail to keep the record. On TT, no excise duty is charged only commission and
telegram charges are charged.
TT is transfer of funds for outstation purposes. It is like DD but it is more quick

then DD. There are two modes of TT.
Inward TT: - When TT is from some other branch.
Outward TT: - When TT is to some other branch.
Online Transfer (OT):
It is one of the latest instruments used for the transfer of funds. Nowadays most
of the cash is remitted through on line system. In online transaction the account holder
has account in another bank. The account holder sent the amount to his account. Online
transaction is made only ACBL to ACBL or to any other branch of any bank. So they
can transfer the amount, they can cash the amount they can find the balance & receive
the statement of his account in another branch. In this type of transaction, following
items are checked to correctly record the transaction and safe amount transfer.
 Date
 Name
 Remote
 Account number
 Amount etc. etc.
5.2.5. FOREIGN EXCHANGE DEPARTMENT
In modern banking system, foreign exchange department plays very crucial and
important role from every aspect. It is parallel banking with general banking with an
additional function of import and export business controlled by State Bank of Pakistan.
Rules and regulations are framed by state Bank of Pakistan in the form of manuals.
Foreign Exchange Department of ACBL consists of following sections: -
i) Exports
ii) Imports
iii) Foreign Exchange.
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5.2.5. (a) Exports:

The Exports section of ACBL mainly deals with following nature of work: -
 Dealing in documents.
 Working as Agent for the Exporter.
 Negotiating/Collecting payments against documents of Exports.
 Sending documents to foreign banks.
 Collecting proceeds against exports.
5.2.5. (b) Remittances in Foreign Exchange:
As we know that the money of one country is not legal tender in other countries. The
monetary device, which has been evolved, for all international payments is the
foreign exchange from the exporter and others who have it for sale and sell foreign
currency to importers and others who need it in their own countries. A transfer from
a bank account in the debtor’s country to the creditor’s country affects the
international payments.
Two branches of the same bank or of different banks involve in foreign

remittance. One is called remitting branch or bank and the other is called receiving
branch or bank.
Remittances can be done in following ways;
 Telegraphic Transfer (TT)
 Mail Transfer (MT)
 Foreign Demand Draft (FDD)
Foreign Currency Accounts:
 Foreign Currency Savings Account:
ACBL’s Foreign Currency Savings Account offers you attractive returns on your
Foreign Currency investment. You can invest in any of the currency e.g. US Dollar, UK
Pound Sterling, Euro etc. Foreign currency saving account is exempted from Zakat and
withholding tax. The account can be opened with 500 US Dollars and NIC &
introduction is required of the same bank.
 Foreign Currency Current Account:
ACBL Foreign Currency Current Account offers you the convenience of
unlimited withdrawals i.e. access to your funds whenever you want without any notice.
There is no limit on the number of transactions you make in a day. You can invest in any
of the currency authorized by State Bank of Pakistan primarily in. US Dollar, UK Pound
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Sterling, Euro etc. The account can be opened with 500 US Dollars and NIC &
introduction is required of the same bank.
5.2.5. (c) Imports:
As import and export business is very risky. The importers want the surety of
goods to be delivered to his prescribed destination while exporter wants surety of the
money to be reached to his prescribed bank. So, with a view to overcome such
difficulties a system of L /C is designed and its operation is controlled under the Article
of the Uniform Customs And Practices for documentary credits as adopted by The
Council Of International Chamber Of Commerce (ICC) and is enforced with effect from
Jan 1983.
ICC has formulated following types of Terms of Payment (TOP): -
 Advance Payment (AP)
 Documents Against Payment (DP)
 Documents Against Acceptance (DA)
Different banks are involved in foreign exchange transaction of export and import
as follows: -
A) Issuing Bank:
It is that bank which opens letter of credit and sends it from where import is to be
made. Issuing bank may send L/C to one of its branches or some agents or any other
bank of the country.
B) Advising Bank:
It receives the letter of credit send by the branch of issuing bank or recognized
agent in this connection. Advising bank advises the exporter about L/C so received.
C) Negotiating Bank:
Negotiating bank is that bank which conducts negotiation from exporter’s side. It
may or may not be advising bank. The documents are negotiated as per the terms of L/C
D) Reimbursing Bank:
This is the bank, which reimburses the payment to the negotiating bank. It may
be a special bank or issuing bank.
Letter of Credit (LC):
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A letter of credit is a document issued by the importer country’s bank authorizing the
exporter country’s bank to honor the checks of the exporter to the extent of the
amount mentioned there in. In this way, a substitute bank enjoying good faith and
credit for that of an importer who is comparatively unknown protects the exporter.
The importer is also protected as the letter of credit specifies in close details all the
things an exporter must do to receive payment.
Types of Letter of Credit:

 Irrevocable Letter of Credit:
Irrevocable L/C is one which can’t be cancelled once decided by the parties and in
which the issuing bank gives a lasting undertaking to accept and in due course to pay
bills drawn up to it provided that the exporter fulfils the terms and conditions
stipulated in the letter relating to documents, insurance etc, etc.
 Revocable Letter of Credit:

This L/C can be modified or cancelled by the issuing bank at any time without
any obligation on its part. This letter is usually not acceptable to the businessmen.
 Unconfirmed Letter of Credit:
In unconfirmed L/C, the bank through which the credit is negotiated does not
give any guarantee to the exporter that the issuing bank will honor the bills drawn.
 Clean Letter of Credit:

If there are no conditions attached to the bill and the issuing bank makes payment
up to the credit limit, the letter is called “A clean letter of credit”
Opening of L/C:
This mechanism of financing trade through letters of credit is quite simple. The
importer or buyer will contact the seller in foreign country for the purchase of particular
goods.
The importer will then submit an application to his bank for the issuance of an
individual letter of credit. The bank supplies the form on which the buyer applies for a
letter of credit.
This form contains all the necessary details of course, the description of
merchandise, port of shipment, port of unloading, the document against which the bank
is to honor the draft and the total value of the goods. When the buyer bank is called upon
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to honor the draft, the bank will concern itself only with the features of the contract of
sales.
The letter of credit can be opened by mail or by cable. When the letter of credit is
opened by mail, the buyer bank sends the letter of credit and the carbon copies of the
letter to the importer. If an importer directed the bank to open letter of credit by cable,
the buyer’s bank sends a cable (Telex) to the corresponding bank in the foreign country
with request to notify the exporter of L/C and terms and conditions laid there.
Following documents must be attached with L/C:
1. Application of L/C.
2. Performa invoice of sending foreign company.
3. Membership certificate of chamber of commerce or association.
4. Insurance certificate.
5. IBC charge form.
Negotiation of L/C Documents:
Negotiation will take place in following manners:
1. The seller sends the documents evidencing the shipment to the bank where the
credit is available, accompanied by a draft drawn on the buyer, or on any other
drawer specified in the credit at sight or at a tenure as specified in the L/C.
2. After checking that the documents meet the credit requirements, the bank may
negotiate the draft. Negotiating by the issuing bank or any other bank will be with
recourse to the seller.
3. This bank then sends the documents and the drafts to the issuing bank.
Reimbursement is obtained in the per-agreement manners.
Clearance House:
A clearinghouse is an association of commercial banks, set up in a given locality
for the purpose of inter-change and settlement of credit claims. The function of
clearinghouse is performed by the central bank of a country by tradition or by law.
In Pakistan, the clearing system is operated by SBP. If the SBP has no office at a
place, the National Bank of Pakistan (NBP) as a representative of SBP acts as a clearing
agent.
The mechanism whereby checks are exchanged in bulk and the cross obligations
of the banks are off set is now explained in brief.
Check as we know, is an effective method of making payments. When checks are
drawn on one bank of drawer, the mutual obligations are settled by the internal bank
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administration and there arise no inter-bank debits from the use of check. The total
liabilities of the bank remain unchanged.
In practice, the person receiving a check is rarely a deposition of the check in the
same bank as the drawer. He deposits the check with his bank (other than that of the
drawer) for the collection of the amount. Now the bank in which the check has been
deposited, becomes a creditor of the drawer’s bank. The debtor bank will pay his amount
of the check by transferring it form cash reserves, if there are no offsetting transactions.
In the course of everyday life, there is large number of checks drawn on a bank,
deposited in other banks. The banks, on which the checks are drawn, become in-debt to
the banks in which the checks are deposited.
At the same time, the creditor banks receive large amount of checks drawn on
other banks giving claims of payment to them. It will be most uneconomical and
confusing if banks had to transfer cash for meeting each other’s liability. The easiest
safest and the most efficient way is to offset the net payment. This facility of net
interbank payments is provided by the clearinghouse.
The representatives of the local commercial banks meet at a fixed time on all the
business days of the week. The meeting is held in office of the bank, which officially
performs the duties of a clearinghouse. The representatives of the commercial banks
deliver the cheque payable at other local banks and received by them. Totals are also
made of all the checks presented by or to each bank. The difference between the total
represents the net amount payable to or by it. Banks keep two books regarding
clearinghouse.
 Inward Clearing Book:
For the purpose of recording all the checks that are received by the bank in the
first clearing uses this. Details of checks are recorded in this book.
 Outward Clearings Book:
This book uses outward clearing register for the purpose of recording all the details
of the checks that the bank has delivered to other banks in first clearing.
5.2.6. Credit Department:

The main function of the bank is advancing loan and in return charges interest.
Credit department takes care of advances. This department also issues credit card and
ATM card. Moreover, it produces the major portion of banks’ income, and as such it is
one of the major areas of professional bankers’ concerns and attention.
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In ACBL, Credit Department is responsible to deal with following cases;

1. To handle all the cases of short and long term loans.
2. To process all the cases concerned.
3. To forward the cases for approval and consideration to the higher authorities.
4. To deal with the borrower directly.
5. To implement the disbursement of the loan.
6. To give feedback to higher authorities in advance.
5.2.6. (a) Lending Principles:
The basis function of the bank is to accept deposit and lend money to the
borrowers against a spread so s to be able to give some profit to the depositors as well as
to earn profit for the bank.
While lending the money to the borrowers the bank should observe the following
lending principals:
1. Safety Principle:
It means that the money lent will come back along with interest or service
charges etc. The borrower should not invest the money borrowed in unproductive or
speculative business.
2. Liquidity Principle:
The money which has been lent to the borrower should be returned to the bank on
demand or as per repayment schedule provided by the client. The sources of repayment
should be clear and definite. The efforts should be made to encourage short-term
borrowings.
3. Purpose Principle:
The purpose of the advances should be legitimate and productive. It should be
ensured that the banks, funds are not being utilized for speculative business. The credit
restrictions by the central bank should not be violated & it should also be ensured that
there is no legal implication for the bank. It is always beneficial for the bank to finance
for short-term requirements.
4. Profitability Principle:
The end result of every business activity should be to earn some profit. Similarly
the bank must get some profit out of the activity of lending so that the depositors could
get their shares as well as the shareholders could earn something for their investments.
5. Security Principle:
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The proposal should be dealt on its merit not on security. The security should be
considered a safety for the bank only in case of unexpected emergencies. All the relevant
documents of securities must be obtained & got valuation of the property or any other
security should be assessed correctly.
6. Spreading of Risk Principle:
It is always safe for the bank to spread the risk in large number of borrowers
instead of loaning huge amount to few big shots; it is better to obtain different types of
securities instead of concentrating on one security. Likewise it is always in the large
interest of the bank to invest the funds in large number & different type of industries.
Thus the risk will be divided and the bank will not be in trouble due to unprecedented
circumstances in any business.
7. National Interest and Suitability Principle:
It is every Pakistani person and institution’s moral as well as legal obligation to
ensure that no loaning is running counter to national interest. It is also ACBL’s duty to
ensure that our lending policies are not against the social conditions or bindings.
ACBL is very optimistic in providing loan facilities for its valuable customers
and offers a broad range of attractive credit schemes against easy terms and conditions
for a variety of purposes e.g.
 Mortgage Financing
 Business Financing
 Smart Cash
 Car Financing
 Personal Finance
 Motor cycle Finance
All the above-mentioned schemes are available and occupy a prominent position
in people’s eye. Nowadays ACBL’s Motor Cycle Finance Scheme is very popular and
causing income generation for the ACBL.
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PRODUCTS OF ACBL
6.1. VALUE PLUS

Askari Bank leads the way, yet again ... with the introduction of Askari Bank's Value
Plus, rupee deposit account, which promises greater financial freedom and security, in an
unmatched way. Investment is as little as Rs.10,000/- in a value plus savings deposit and the
account holder is entitled to earn monthly returns, while still enjoying the flexibility of a
normal checking account.
Advantages:
 Partial Liquidity Offer on all Time Deposits:
Offering customers a truly exciting opportunity to make their investments break
new grounds for them. All they have to do is to invest a minimum deposit of Rs.25,
000/-, in a value plus time deposit for a choice tenure i.e. 3 months,6 months or 1 year.
The investment will be held in blocks of Rs. 25,000/each. In case a customer wish to
partially withdraw some amount from his total investment, he has the flexibility of
encasing the blocks that he wants, without touching the remaining investment. The un-
encashed blocks will continue at the same maturity and return...and yet he doesn’t lose
the share of profit on the encased blocks. Upon maturity he has the freedom of either
booking his time deposit for tenure of his choice, or let the bank roll it over automatically
for a like period.
 Monthly Return:
Value Plus, rupee deposit account provides greater financial freedom and security, in
an unmatched way to the customers of ACBL. Invest as little as Rs.10,000/- in a value plus
savings deposit and you are entitled to earn monthly returns, while still enjoying the
flexibility of a normal checking account
 24 Hours World-Wide Protection Plan:
A unique partnership between Askari Bank and New Hampshire Insurance
Company (American International Group, Pakistan) brings global accidental protection for
ACBL customers’ entire family. At home or at work, Askari Bank's Value Plus account is
there to take care of the customer round the clock ...providing insurance cover of up to 4
times* the average balance in the account. This is a choice enrolment plan with an automatic
monthly premium deduction facility at a price so low ... i.e. only Rs. 20/- per month.
 Askcard (Debit Card):
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A truly relationship card that identifies and recognizes ACBL customers’ status.
Besides serving to identify the honorable customers, this card provides with instant cash
access at more than 40 ATMs around Pakistan. The customers having ASKCARD are
authorized to visit the authorized merchants of ACBL and may get a special discount offer
on their purchases... from restaurants to boutiques, bookstores to 5-star hotels. ACBL has
really made special arrangements for its customers to get the best value for their money.
 ACBL’s Unmatched Service Quality:
At Askari Bank, the customers are not only known by name but are treated specially.
The elegantly designed product centers at bank’s selected branches offer its valuable
customers the ease and convenience of conducting their banking transactions in full
confidentiality and privacy in a first class way. The personalized and professional services of
dedicated relationship manager, committed to meeting all the financial needs will not only
help customers in their investment plans but also saving them from the hassle of waiting in
queues. Moreover, Askari Bank gives its customers the convenience of 24-hours telephone
banking service; Internet banking and On-line funds transfer facility.
6.2. ASKCARD (ASKARI BANK’S DEBIT CARD)
Askari Bank is committed to provide its customers innovative and competitive
solutions to their banking needs in a more efficient and personalized manner. Askari
Bank enjoys a strategic competitive advantage over all domestic players by virtue of its
leadership, large network and technological advancement. In line with its tradition of
innovation, Askari Bank takes pride in announcing launch of "ASKCARD"- Askari
Bank's Debit Card. ASKCARD is tailored to the customers shopping needs and is
another valuable financial solution reflecting ACBL’s commitment to build lasting
relationship with you.
ASKCARD means freedom, comfort, convenience and security, so that you can
have retail transactions with complete peace of mind. ASKCARD is new shopping
companion which enhances the quality of life by letting you do shopping, dine at
restaurants, pay your utility bills, transfer funds, withdraw and deposit cash through
ATM anywhere, anytime.
6.3. ASKSMART CASH
This personal line of credit would be set up with a specified credit limit agreed
upon by the customer and ACBL.
 You can withdraw cash from your credit line as and when you
require.
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 The markup is charged only on the utilized amount and for the number of days
the credit is used.
 The markup is lower than a credit card.
 Personal loan and balance transfer facility.
 Finance Amount: Up to Rs 1 Million revolving credit line.
6.4. ELECTRONIC BILL PAYMENT SERVICES
Electronic Bill Payment Services lets you pay your utility bills through ACBL’s
ATM network. You can forget about the inconvenience of readjusting your normal daily
routine to the traditional banking hours, or standing in long queues, since Touch n Pay
gives you the option to pay multiple telephone bills, from different accounts, in different
ways - as per your own choice and convenience.
6.5. ASKAR (CAR FINANCING)
ACBL offers a fascinating scheme for purchasing the cars
of their own choice by the people. ACBL’s ASKAR CAR
FINANCING offers the most convenient and affordable vehicle-financing scheme,
which provides ACBL’s valuable customers an opportunity to own a brand new vehicle
of their choice. ASKAR's "No eligibility" clause automatically qualifies a person to own
a latest car of his choice. With minimum down payment, lowest insurance rates and
widest range of available car makes and models, ASKAR offers the best value to the
customers.
6.6. ASKARI BANK’s MASTER CARD
Askari Commercial Bank Ltd. offers the widely
accepted Master Card to its valuable customers with No
Joining Fee and also given unmatched merits: -
 Worldwide Acceptability:
ACBL’s Master Card provides the customers with service at thousands of
locations in Pakistan and over 14 million establishments worldwide. As an added
convenience, ACBL’s Master Card holder will have the benefit of receiving his monthly
billing in Pak Rupees, regardless of the currency of purchase.
 Traveling Safety Net:
By purchasing a travel tickets on Askari MasterCard and the card holder is
automatically covered under ACBL Travel Insurance Plan (in case of personal accident
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resulting in death or permanent disablement) for upto Rs.8,000,000/- on a Gold Card and
Rs.4,000,000/- on a Silver Card.
 Low Service Charges: - Askari MasterCard provides its holder with the
facility of revolving his spending at comparatively low service charges. In addition, the
same rate also applies to cash advances obtained on Askari Master Card.
 Travel Privilege Services:
When an ACBL Master Card holder purchase his Airline Tickets for international
Travel on ASKARI Master Card he gets:
 Up to Rs. 10,000 Insurance cover for flight\ delays exceeding 6 hours.
 Up to Rs. 10,000 Insurance cover for baggage delays exceeding 6 hours.
 Up to Rs. 20,000 as baggage loss claim.
6.7. TRAVELLERS CHEQUES
Another valuable financial solution from the trusted bank (ACBL) is Travellers
Cheques, which provides the best alternate of the cash in hand. ACBL’s Travellers
Cheques are available in the denomination of Rs.10,000/-, it's light, safe and ideal for all
travel purposes. An ACBL Travellers Cheques holder is able to enjoy traveling by no
worries of cash custody and the following ease is also provided to its holder:-
 Free Issuance:
One does not have to pay any service charges for purchasing Askari Travelers
Cheques. One can buy these either against cash or debit to one’s personal account. These
Travellers Cheques can be obtained from any ACBL Branch.
 Earn 0.10% encashment Commission:
This unmatched feature of ACBL Travellers Cheques lets the Cheque holder to
experience yet another innovative customer care solution. The Travellers Cheques holder
will receive 0.10% commission whenever the Travellers Cheque is encashed after 30
days of holding.
 Added Safety & Security:
With ACBL’s state-of-.the-art in-built security features the holder of the
Traveller Cheques can be rest assured that this is the best way to make and accept
payments. High security lithography, ultra violet printing, special thread, anti-
scanner pyramid design and unique micro lines, all done and printed in UK gives its
holder the comfort of dealing in the safest substitute for cash, easily refundable in case of
loss and theft.
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6.8. PERSONAL FINANCE

One can avail unlimited opportunities through Askari Bank’s Personal Finance. With
unmatched financing features in terms of loan amount, payback period and most
affordable monthly installments, Askari Bank’s Personal Finance makes sure that
you get the most out of your loan. No matter what your need is, Askari Bank has
more ways to serve you then ever before.
Featuring:
o Loan amount from Rs.30,000 to 300,000

o Repayment period from 1 to 3 years
o Fixed monthly repayment
o Low rates that never change
o No pre-payment penalties
o Shortest processing time
o Funds may be obtained at any ACBL branch
o Unmatched service quality
When you are working towards your financial goals, how you borrow can be just
as important as how you invest. The right borrowing options can improve your savings,
your cash flow and your ability to take advantage of personal or business opportunities.
Eligibility:
ACBL’s Personal Finance can be obtained by any person who is: -
o Between 21 and 57 years of age.
o Having a verifiable minimum gross monthly income of Rs. 15,000
Salaried:
Minimum length of confirmed service with present employer is at least six
months with a total length of at least one-year service.
Self-Employed:
In business for the last one year.
6.9. ACBL MORTGAGE FINANCE
Ever since the inception of life, shelter has been rated among the primary needs
of mankind. Owning a home for oneself still remains an exclusive dream for many.
Askari Bank has made the realization of this dream to have a house of very own possible.
Whether there is a plan to build a house, tailor made to the requirements or buy a
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constructed house, Askari mortgage finance enables to pursue this goal without any
problems.
Askari mortgage finance offers the convenience of owning a house of the choice
while living in it at its rental value. Only paying the price of the property in affordable
installments for a fixed time period simply as the payment of monthly rentals is made for
the residence. The installment plan has been carefully designed to suit both the budget
and accommodation requirements.
Askari Mortgage Finance brings the house of the choice within the reach as no
other mortgage-financing plan offers such a facility, backed by the trust that is sealed
into every transaction bearing the Askari Bank mark.
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6.10. INVESTMENT CERTIFICATES

Askari Bank's Investment Certificates are being offered as a part of Retail
Banking, Investment Products Unit efforts to provide the best possible services to Askari
Bank's existing and potential customers to enjoy the reputation of being the most
convenient short-term investment and cash substitute for all types of business
transactions.
Askari Bank's Investment Certificates not only provide the added security,
investment and monthly return to the customers but also provide opportunity to the bank
to generate low-interest bearing float, innovative and competitive solutions to banking
needs.
These certificates are negotiable and can be transferred to third party. These can
be issued to individuals, who can sign in firm handwriting and cannot be issued to
minors or in joint names. Askari Bank's Investment Certificates can be issued for a
period of 3 months and profit is payable on monthly basis through pre-printed tear-off
coupons. The profit will payable on each denomination from the date of issuance
mentioned on the face of the instrument. Amount of profit will also be mentioned on
each coupon at the time of issuance, as per declared rate of profit. Deduction of
withholding tax (es) and Zakat shall be applicable as per Govt.of Pakistan rules.
Objective:
To offer customers convenience, safe investment with competitive monthly return,
which enables huge cash transfers without any pocket load.
Product Specification's:
 Brand Name Askari Bank's Investment Certificates

 Denominations Rs. 50,000/-
 Rs. 100,000/-
 Rs, 500,000/-
Eligibility Criteria:
To be issued to individuals, who arc not minors and can Sign in firm handwriting.
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Product Features:
a) Free issuance and free encashment
b) Account relationship with Askari Bank is not mandatory
c) No penalty on pre-mature encashment.
d) Negotiable and payable in Pakistan in Pak Rupees only.
e) No purchasing limit.
g) Encashable at all ACBL Branches.

h) Profit is payable on monthly basis through pre printed tear-off coupons.
Replacement/Refund In case of loss / theft or damage, there is
replacement/refund to the original purchaser only.
6.11. MOTOR CYCLE FINANCING
ACBL has announced a scheme for middle level group of community and especially
for working class community through which they can purchase the new technology
based motorcycles of their choice offered by ACBL. Main attention is focused on
easy installments. ACBL offers
two types of motorcycles under this scheme, whose terms and conditions are given as
under.
HERO RF 70CC HERO PRINCE 125 CC
Down Payment Rs. 15135 Rs. 20255
Monthly Payment Rs. 1884 Rs. 2511
Repayment Period 2 Years 2 Years
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SECTION-III
SWOT ANALYSIS OF ACBL
To know about an organizations internal and external situation, SWOT analysis is
an important tool and by such analysis an organization’s SWOT (Strengths, Weaknesses,
Opportunities & Threats can be observed. Through SWOT analysis an organization can
evaluate its self and can easily see where it stands in the market. It can easily establish its
strategies and conduct its affairs smoothly in the prevailing dynamic trends. Given below
is the SWOT analysis of ACBL.
SWOT ANALYSIS OF ACBL
7.1. STRENGTHS
1. ACBL is the premier commercial banking institution in the banking sector of the
country and having a very good operation streamline.
2. ACBL has a unique factor being backed by Army Welfare Trust (AWT).
3. Right from its operations commencement in 1992, it has been proven best bank
of the country by obtaining various national and international awards.
4. ACBL has won The Best Bank in Pakistan" by Global Finance magazine for
the years 2001 & 2002.
5. "Best Consumer Internet Bank" award for Pakistan has been achieved by
ACBL.
6. Askari Bank has an A 1 + rating for short-term obligations - the highest
possible for the category, while the long-term rating stands at AA.
7. ACBL’s share price has remained approximately 12% higher than the average
share price of quoted banks during the last four years.
8. Bank has total assets of Rs. 108 billion as on September 30, 2004.
9. 60 branches engaged in multi-dimensional activities.
10. Arrangement with large number of Correspondents banks/Exchange Companies.
11. Over 250,000 banking customers.
12. 61 branches including an overseas branch, supported by a network of online
ATMs.
13. Askari Bank won the prestigious "Best Presented Annual Accounts" awards
for 2000 and 2001 from the Institute of Chartered Accountants of Pakistan
(ICAP) and the Institute of Cost and Management Accountants of Pakistan
(ICMAP), for the services sector.
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14. Fascinating products like Debit Card, Master Card, Car & Motorcycle Financing,
and Mortgage & Business finance, Smart Cash etc.
15. It has improved its services for its domestic as well as foreign customers and is
establishing more branches to meet out community demand.
16. It has attractive and higher interest rates and prizes on various accounts and
products.
17. For the past four years, ACBL has received prizes from the South Asian
Federation of Accountants for "The Best Presented Annual Accounts" for the
financial sector, in the SAARC region.
18. ACBL offers 24 hours cash access and safe payment products for high value
transaction.
19. The support of Army Welfare Trust (AWT) with ACBL has alleviated the
financial position of the bank. It has increased the operational efficiency and has
resulted in reduced risk. The better financial position has opened the way for
access to capital markets. As the bank has expanded, the bank is now enjoying
economies of scale.
20. First Pakistani Bank to offer on-line real-time banking.
21. First Bank to offer Internet Banking services.
22. First Bank to offer e-Commerce solutions.
23. ACBL has an efficient and experienced human capital.
24. Extensive Training & Development Programs for personnel.
25. The bank has established the new BBS System, which stands for Basic
Banking System. It has made all the branches of the ACBL online, which means
that they are interconnected with each other and in full coordination. The bank
has been provided with new branded DELL computers lately. The employees on
computers do all the work. In Pakistan, where banking is still done on archaic
methods, ACBL has tried its best to introduce new technologies for the
betterment of its customer services.
7.2. WEAKNESSES
Weaknesses, like strengths are a part of almost every organization. These
weaknesses points out the potential areas of improvements and make the organizational
behavior intelligent. A cumulative effort to overcome these flaws makes success
possible.
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During the internship period the weaknesses that generally surfaced and were
visible at ACBL Peshawar Cantt. Branch are as described below in detail.
1. The outlook of an organization plays important role in portraying its image to
customers. The ACBL Peshawar Branch has a structure that is simple and not
enough eye-catching that will attract customers. The interior of the bank gives a
crowded look. The atmosphere is professional. Though it is centrally heated and
air conditioned, so as to provide customer and staff with better working condition
in every climate. There is less seating arrangements in the bank for both the
employees and the customers.
2. Internees at ACBL are not paid a stipend for their internship. They normally are
provided with support and encouragement, which has its effect on their
performance. With no stipend the motivational level of the internees is stumpy.
3. The root problem at ACBL Peshawar Branch, which is normally ignored, is that
it is understaffed. Thus several departments are over loaded with extra work. This
overburdens the employees, which leads to frustration and anger, provoking
several other problems.
4. Performance appraisal is generally considered a motivational as well as
evaluative tool. At ACBL its use is normally made in an exploiting fashion.
Evaluation is made on the basis of the achievements of market targets.
Unfortunately the market targets are always unachievable. Thus employees face
the condition of being called inefficient at times. This is an annoying factor for
some of the employees, which leads towards de motivation and anxiety.
5. Work distribution at ACBL Peshawar Cantt. Branch is unbalanced and has unfair
allocation of work. Some departments like remittance and export department used
to be under extra load of work. On the other hand lending department had
comparatively a small amount of work. Over burdening some employees creates
resentment in their hearts for their fellow employees with less work.
6. Long queues at cash counter are regular sight at ACBL Peshawar Cantt. Branch
during the first section of banking hours. It is quite a shocking view for a new
visitor who enters the bank. This represents an unsophisticated look.
7.3. OPPORTUNITIES
“Success, more than anything is all about converting into opportunity what
everybody else considers danger” Opportunities, when exploited properly reap profits
and earn success. They are almost always a matter of time. They are to be sought, picked
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and made use of, before anybody else gets up and do so. It’s just about being smart and
accurate. ACBL also have some opportunities it can utilize and obtain good market
position. Some of the opportunities ACBL can make use of which are as under: -
1. After the 9/11, Pakistan economy has got a lot of boost and there is a wide range
of business especially for Afghanistan etc. In this scenario, ACBL has a great
opportunity to discover new horizons of business in Afghan Trade.
2. ACBL can improve its image by putting up more and more ATM machines must
rely on its own powers.
3. ACBL can take part in the Islamization of banking system in Pakistan, because it
is the most preferred option these days among a large group of people.
4. ACBL also has an opportunity to expand new technological advancement like:
Tele bank and Internet banking facilities in order to serve customer more
efficiently and according to the international or modern banking techniques.
5. Growing policies of government on business and commerce sector provides
ACBL an opportunity to efficiently meet with the business people’s requirements
of instant cash and financing facilities.
6. ACBL can hire well-qualified and competent people having specialization in the
field of banking and finance so that energetic, competent and fresh blood
personnel will surely leave no stone un-turned in performing their duties.
7. ACBL can recruit female staff in those branches where there are none, so that the
female customers are more comfortable and at ease.
7.4. THREATS
Threats are the unseen, futuristic, probable events that can occur and prove
dangerous in consequences. Every organization is faced by some category of threats in
its operations and functions. Opening new outlets, altering existing policies, designing
fresh marketing strategies, bringing change in physical structure, almost every activity
that an organization do face some kind of threats, just like the benefits it seeks.
ACBL also faces some threats, which can just prove minor assumed fears; as well
as can become events with grave consequences. The prevailing condition indicates the
following as the possible threats.
1. The government must maintain the law and order situation in order to attract
foreign investor. The suicide bombings, bomb blast in many locations of the
country, attacks on churches, Mosques & Imam Bargahs etc. has created an
atmosphere of being unsafe amongst the foreigners residing in Pakistan and also
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its locals. Incidents like these enormously affect the economies of countries. If
the foreign investor won’t feel safe in Pakistan, then how come is it possible that
he will invest money here?
2. ACBL also faces competitors in the market. It has to compete with both types of
banks i.e. National as well as Foreign like Bank Al-Falah, Emirates Bank and
Faysal Bank etc. Various domestic banks like MCB, UBL, HBL and others have
also shown improvements. To survive amongst all these competitors, ACBL
needs to keep in touch with modern technology, keeping flexible and customer
oriented policies, and adopting the latest trends of banking.
3. The restriction by the SBP gets in the way if the bank decides to launch a new
product or decide something related to the interest rates.
4. The rapid growth of advanced global technologies is also a continuous threat to
the bank as Pakistan is still in its developmental stages and it cannot compete
with rest of the world.
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PROBLEMS & RECOMMENDATIONS
8.1. FINDINGS
 Askari Commercial Bank Limited is the most progressive private bank in
Pakistan with a sound financial base and a dynamic network.
 Askari Commercial Bank Limited has been at the forefront of providing its
customers with new and innovative products and financial instruments that are
safe, secure and profitable.
 ACBL is in the true sense banking by the people. Especially after the formulation
of its slogan “Askari Bank…A name to Trust” it has shown a rapid
development in its overall image.
 ACBL has not yet proven health in establishing its branches countrywide and
also is deficient in operating overseas branches more than one.
8.2. PROBLEMS
ACBL is effectively operating and carrying out all the activities normally under
specific system. The system is used in the bank from beginning and it is moderated and
modernized with the passage of time, but still I have some observations, which can add,
some input for efficiency of ACBL. There I found not any single illustrious main
problem, which should be discussed alone as we were asked to identify a main problem.
So here I will discuss some problems, which I have experienced during my internship in
ACBL.
1. ATM Network Problem:
ACBL is considered one of the banks having a network of its ATM machines to
provide 24 hours cash withdrawal service to its customers.
There are some problems with ATM network. Main reason is that ACBL does
not have all of its own ATM Machines. It has to rely on other banks’ ATM machines e.g.
ABN-AMRO Bank, Habib Bank LTD. Soneri Bank LTD. Many customers have
complaints that their requests placed on ATMs don’t carry out. It is mainly because of
pathetic PTCL lines. Distortion in lines of PTCL restricts the execution of requests
placed on ATM machines by customers. Although there is a network of dedicated lines
for ATM machines, a request may not be successfully carried out because of complicated
request processing. A successful execution of a request needs to be approved from three
places:
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i) The branch (online) with which the customer (placing the request) have the
account.
ii) Main branch of that area.
iii) The Head Office.
So connecting to all of these three places simultaneously and getting the request
approved is a complicated process. However management claims that there is nothing
wrong with processing. The only problem lies with PCL lines.
2. Over Burdened Staff:
In most of the branches of ABL managers in general and other staff in special are
overwhelmed by work. Because they have to look after not only the branch activities but
also to do marketing sort of job and carry on customer relation activities. Sometimes
managers also supposed to do the job of customer services especially in small branches
where no such department/section is placed.
8.3. RECOMMENDATIONS
1. ATM Solutions:
ACBL should improve the ATM Network to reduce the customer complaints.
ACBL should provide successful 24 hours cash withdrawals to its customer. Proper
solution must be given to the customer complaints. The location of ATM machines
should be increased to other cities. Distortion in PTCL lines should be decreased. If the
card is lost no charges will be made .The branch manager should pay proper attention on
ATM problems. Moreover, ACBL must rely on its own ACBL ATM Network and must
install more ATMs countrywide.
2. Reducing over load:
ACBL should improve its standard operating procedures and specified
frameworks to give relief to its overburdened managers and staff. In some branches the
work of manager and his sub-ordinates is over burdened as has been observed in ACBL
Peshawar Cantt. branch so the work of manager and other staff should be reduced by
providing sufficient number of staff so that every activity may perform properly and with
due care.
Moreover, Proper staff should available in any branch. New person is hired for
that purpose which is highly qualified the burden of manger should also be decreased.
ACBL should introduce efficient marketing teams and customer counters to improve the
business relations.
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8.4. GENERAL RECOMMENDATIONS

 ACBL should properly have a Research and Development department, in order to
keep or expand its market share. To compete with the national and international
financial institutions, ACBL has to spend even more time on its Research and
Development division
 ACBL should follow strict rules while recruiting new employees. The selection
should be wholly solely on merit basis, so that the best skilled and well-qualified
people are hired which will result in the banks prosperity.
 The employees should be given job security, so that they can concentrate on their
jobs without any fear of losing it.
 Special emphasis should be made for the initial training of the lower and junior
staff of the bank.
 ACBL should recognize the fact that all the branches should have the same
activities, departments, so that the bank gives an impression of a unified
integrated bank.
 A comprehensive Job Description manuscript should be published so that the
problem of poor defined job description is eliminated and new recruited
employees should understand his/her job in a better way.
 It is human nature that one goes after rewards and incentives. The performance
appraisal system of ACBL should be made better.
 ACBL should develop a mechanism for job rotation so that employees can get
experience in all the departments of the bank because at times when a particular
Operational Head is on leave, a lot of time is wasted in making temporary
adjustments for that seat.
 There should be a written Organizational Management Structure available for the
branches. This will be useful in finding the employees position and the hierarchy
of the banks management and administration.
 Keeping in mind the government’s inclination to-wards the adoption of interest
free banking in Pakistan, ACBL should start planning beforehand for
Islamization of its policies. This would enable a smooth flow of operations even
after sudden imposition of some restrictions by the government.
 Prolonged and cumbersome procedures and documentation should be avoided in
all the departments of the bank.
Page | 55
 ACBL should introduce new products from time to time to capture more and
more customers.
 The bank should observe strict disciplinary measures by introducing proper dress
code, and by observing staffs’ punctuality.
 Authority when distributed should be maintained in such a way that responsibility
is equally distributed.
 The audit should be sudden and un-announced and the auditor should check each
and every record of the department.
 While auditing advances the auditor should see that advances are sanctioned
according to SBP rules and regulations or not.
 A service desk should be maintained to provide information about various
departments’ products and services offered by bank.
REFERENCES
 ACBL Annual Report 2017

 SBP Annual Report 2019
 Banking, Currency & Finance by M. Saeed Nasir
 Introduction to Banking & Finance by M. Saeed Khan
 www.askaribank.com.pk
Page | 56

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SECTION-I

1.1 OBJECTIVE OF THE STUDY

2.1. MEANING OF BANK

Total Number Total Assets Total Total Advances

Local Private Banks 40 9 7 5

2.6. BANKING SECTOR IN PAKISTAN

3.1. INTRODUCTION & HISTORY

3.2. AWARDS AND ACHIEVEMENTS

3.3. PERFORMANCE HIGHLIGHTS OF ACBL

2019(Rs. in '000) 2018 (Rs. in '000) 2017 (Rs. in '000)

ASSETS 70,313073 50,980,392 38,454,262

LIABILITIES 66,140,409 48,401,674 36,299,707

NET ASSETS 4,172,664 2,578,718 2,154,555

2019 (Rs. In '000) 2018 (Rs. in '000) 2017 (Rs. in '000)

Net Interest Income 1,638,357 1,348,410 939,083

Fee Based Income 1,049,006 796,282 627,383

Net Profit 1,244,022 1,008,498 751,588

Taxation 557,028 458,447 436,000

Earnings Retained 469,531 343,444 168,174

3.4. DISTINCT FEATURES OF ACBL

3.4.1. Mission Statement of the ACBL:

2001 1995 1994 & 1996

Global Finance Euromoney Asia money

Best Annual Report Long-term Rating AA Short-term Rating A1+

1997,1998 & 1999 PACRA PACRA

3.4.3. Objectives of the Bank:

Main objectives of ACBL can be summarized as follows:

3.4.4. Core Values of ACBL:

The organizational structure of ACBL is like a pyramid, which works upside

Lt. Gen. Faiz Jilani (Hilal-e-Imtiaz) Chairman

Lt. Gen. (R) Masood Parwaiz Chairman Executive Committee

Mr. Kalim-ur-Rahman President & Chief Executive

Brig (R) Muhammad Shiraz Baig Director

Brig (R) lkram ul Hasan Director

Brig (R) Asmat Ullah Khan Niazi Director

Brig (R) Muhammad Safdar Ali Director

Brig (R) Shauket Mahmood Chaudhari Director

Mr. Zafar Alam Khan Sumbal Director/Secretary

Mr. Shahid Hafeez Azmi Director

Mr. Muhammad Afzal Munif Director

Mr. Tariq lqbal Khan Director (NIT Nominee)

4.2. AUDIT COMMITTEE

Mr. Muhammad Afzal Munif, FCA Chairman

Brig. ® Muhammad Shiraz Baig Member

Brig. ® Muhammad Asmat Ullah Khan Niazi Member

Mr. Zafar Alam Khan Sumbal Secretary

ORGANIZATIONAL CHART OF ACBL PESHAWAR CANTT. BRANCH

Audit Department Manager Operations

Accounts Deptt. Deposits Deptt.

Credit Deptt. Computer Deptt.

Remittance Deptt. Foreign Exchange Deptt.

4.4. ASKARI BANK BRANCH NETWORK

YEARS NUMBER OF BRANCHES

5.1. DEPARTMENTATION AT HEAD OFFICE OF ACBL

5.1.1. Credit Division:

5.1.2. Electronic Technology Division:

5.1.3. System and Operation Division:

5.1.4. Asset Products Division:

The Asset Products Division (APD) is engaged in the development and

5.1.5. Investments Products Division:

5.1.6. International Division:

5.1.8. Corporate and Merchant Banking Division:

5.1.9. Credit Card Division: