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What is Bank?

Bank: - is a financial institution which accept deposit money from the public by low interest, And give
back loan to public (People, Organization Companies,) and other by high interest rate.

What is accounting?

Accounting: is an art of recording, Classifying, sorting, analyzing, and Summarize the books of accounts
related to business transaction is called Accounting.

What is Journal?

Journal, it is a book in which we recording the daily transactions of our business in respect of buying,
selling, received and payments.

What is Ledger?

Ledger, the classified form of an account is called Ledger.

What is Trail Balance?

Trail Balance, is used to show the accuracy of our business record.

What is Balance sheet?

Balance sheet is used to show the financial position of our business it means this book shows the
liability of our business.

Financial statement is used to show the profit or loss of our business Activities.

1. AML: Anti Money Laundering

2. ML: Money Laundering
3. LCTR: Large Cash Transaction Report
4. KYC: Know Your Customer
5. ICBA: Integrated Computerized Bank Account system
6. PBNA: Pass Book Print not Available
7. STR: Suspicious Transactions Report
8. PEP: Political Expos Person
9. BLC: Black Listed Customer
10. TF: Terrorism Financing
11. FIU: Financial Intelligence Unit
12. MMC: Manager monthly Certificate
13. W.U: Western Union
14. RK: Record Keeper
15. CSR: Customer Service Representative
16. CSO: Customer Service Officer
17. BOM: Branch Operation Manager
18. DAB: Da Afghanistan Bank
19. BC: Banker Cheque
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20. TT: Telegraphic Transfer

21. ORM: Operational Risk Management
22. GBP: Grand British Pound
23. CBI: Cheque Book Issue
24. ATM: Automatic Teller Machine
25. ITA: Income Tax Authority
26. AH: Account Holder
27. IT: Information Technology
28. SWIFT: Society for World Wide Inter Bank Financial Telecommunication
29. IFT: International Funds Transfer
30. FDA: Fixed Deposits Account
31. SA: Saving Account
32. CA: Current Account
33. CEO: Chief Execute Officer
34. ACSS: Afghanistan Clearing Settlement System
35. MTCN: Money Transfer Control Number
36. BG: Bank Guarantee
37. BG: Bid guarantee
38. PG: Performance guarantee
39. APG: Advance Payment guarantee
40. CBS: Core Banking System
41. OD: Over Draft
42. IB: Internet Banking
43. LC: Letter of Credit
44. MC: Master Card
45. TIN: Tax Identification Number
46. GL: Journal Ledger
COO: Chief Operation Officer
47. ALM: Asset labiality Management
48. NPA: None performing Asset
49. CDD: Customer Due Diligence
50. MOF: Ministry Of Finance
51. WO: Work Order
52. DRS: Disaster Recovery Site
53. DV: Depreciated Value Charged to Asset
54. AC: Acquisition Cost
55. AM: Administrative Manual
56. NGO: National Government Officials,
57. BL: Banking Law
58. CFO: Chief Finance Officer
59. CCO: Chief Credit Officer.
60. RMD: Risk Management Department
61. CRO: Chief Risk Officer
62. BoS: Board of Supervisors
63. CIA: Chief Internal Auditor
64. AOF: Account Opening Form
65. CIF: Customer Information File
66. RIT: Remittances In Transit”
67. USD: United States Dollar
68. CCSP: Comp TIA Certified Security Professional
69. CISSP: Certified Information System Security Professional
70. CISA: Certified Information System Auditor
71. CEH: Certified Esthetical Hacker
72. BIS: Biometric Identification System
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IMPORTANT QUESTIONS AT EXAMANATION

What is Function of Bank?

There are four types of bank Function:

 Accept Deposit:- The most important activity of a commercial bank is to mobilize deposits from
the public People who have surplus income and savings find it convenient to deposit the amounts
with banks
 Granting Advance:-The second important function of a commercial bank is to grant loans and
advances such loans and advances are given to members of the public and to the business
community at a higher rate of interest than allowed by banks on various deposit accounts.
 Agency Functions:-Agency services are those services which are rendered by Commercial banks as
agents of their customers,
They include:

a) Collection and payment of Cheque and bills on behalf of the customers;

b) Collection of dividends, interest and rent, etc. on behalf of customers, if so instructed by them;

c) Purchase and sale of shares and securities on behalf of customers;

d) Payment of rent, interest, insurance premium, and subscriptions etc. on behalf of customers, if so instructed;

e) Acting as a trustee or executor;

f) Acting as agents or correspondents on behalf of customers for other banks and financial institutions at home
and abroad.

Utility functions:

a. General utility services are those services which are

i. Rendered by commercial banks not only to the customers but also to the
general Public these are available to the public on payment of a fee or charge.
ii. They include:
b. Issuing letters of credit and travelers’ Cheque;
c. Underwriting of shares, debentures, etc.;
d. Safe-keeping of valuables in safe deposit locker;
e. Underwriting loans floated by government and public bodies.
f. Supplying trade information and statistical data useful to customers;
g. Acting as a referee regarding the financial status of customers;
h. Undertaking foreign exchange business.

Write Cycle of Accounting: Transaction/ Journal/ Ledger/ Balance Sheet/ Trial Balance/ Income
Statement,
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What is Account? Account is a summarized record of business transaction,

What is Business? Any activity directly toward gaining profit is called business.

What is Policy? Means these HR rules of the bank as framed and recommended by the management
board and approved by the board of supervisors of the bank.

What is Probation? Mean service during probation period.

What is Qualifications? Qualifications Is the ability and work experience of a person.

Define Management: Management is the process of reaching organizational goals by working with and
through people.

Functions of Management:

 Planning
 Leading
 Staffing
 Controlling
 Organizing

Explain what Risk Management is: the process of measuring, monitoring and addressing the potential
for loss.

Explain what Operation Risk? The risk of direct and indirect loss from faulty or failed internal processes
management and system,

What is Micro Economy? Small economy carried studied the decisions made by the families, Privet
companies, and institutions.

What is Macro Economy? Macro economy carried studied the economic habits and methods and
macroeconomic fluctuation and total national income.

Definition of Cheque: Cheque is a negotiable instrument that can be issued by one person to pay money
to another person entity.

What is the process of issuing Cheque to customer? Inventory of stock/ issuance/ collection

What are Kinds of Cheque?

There are three types of Cheque:

 Open or bearer Cheque: the Cheque which is cashed by every person is called bearer Cheque.
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 Order Cheque: the Cheque on which we write the words order after the name of drawer.
 Cross Cheque: the Cheque which is cross by drawing two parallel lines on its face and it should
transfer to his/her a/c not pay cash.

What is Transaction? The act of buying and selling goods is called transaction.

What is Assets? All the resources held or owned by a business are called assets.

What are Fixed Assets? The assets are having no physically changes like building, machine etc.

What are Current Assets? The assets are on process or transaction like cash, liability, bank,

Equipment’s:-

What are Intangible Assets? The intangible assets are like services, brands, certificates etc.

What is Revenue? Claim of the owner upon the assets of a business are called revenue.

What are Expenses? Expense is the Money paid for generating revenue.

Named Types of Customer: There are three types of customer

 Residents
 Non-residents:- are Individuals who do not possess valid residence permit
 Peps :-Politically exposed persons are individuals who are or have been entrusted with famous
public functions
What is KYC (know your customer)? KYC policy ensures that businesses can affectivity identifies, verify
and monitor customers and customer related transactions.

KYC Policy: This section provides KYC guidelines to prevent the bank from being used by Criminal
elements for money laundering activities

There are five types of risks that an effective KYC policy can help to mitigate:

Definition of Customer: A person or an entity that maintains an account or has business relationship
with the Bank,
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What is (CFT) Combining Financing Terrorism? - CFT is global problem terrorism is the unlawful use or
threatened use of force violence against individual or property to intimidate or coerce government or
societies often to achieve political religious of ideological objectives.

Explain HR strategy: A coordinated set of actions integrating an organizations culture organization

people and system in order to get achieve the business goals.

What is (AML) Anti Money Laundering? Anti-money laundering is the name given to the process by
which illegally obtained funds are given the appearance of having been legitimately obtained.

Anti-Money Laundering (AML) Policy: - The Anti-Money Laundering Policy follows the standards of the
Anti-Money Laundering and Combating Terrorism Financing procedures within the Azizi Bank.

Fund Transfer:

Fund transfers to and from high-risk financial offshore centers without any clear, Business purposes,

Receipts of fund transfers in several phases and once accumulated the funds are, subsequently
transferred entirely to other account,

Receipts and transfers of funds at the same or approximately the same amount and, Conducted in a
relatively short period (pass-by),

Fund payments for export import activities without complete documents.

Fund transfers from or to other high-risk countries.

Explain Steps of AML:

AML have three steps:

Placement: At this stage, illegal funds or assets are first brought into the financial system.

Layering: To conceal the illegal origin of the placed funds and thereby make them more useful, the
funds must be moved, dispersed and disguised

Integration: Once the funds are layered and distanced from their origins, they are made available to
criminals to use and control as apparently legitimate funds

(MBFD), (NPA), (CFT), (ACSS), (RIT)?

Multi Benefit Fixed Deposit/ Non Profitable Account/ Combining Financial Terrorism/ Afghanistan
Clearing Settlement System/ Remittance In Transit.
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What is bank guarantee letter? A guarantee from lending institution ensuring that the liabilities of
debtor will be met

What is letter of credit? A letter of credit guaranteeing that a buyer’s payment to a seller will be
received on time and for the correct amount.

What is different between Bank Guarantee and Letter of Credit?

Letter of credit ensures that the transaction proceeds as planned. And bank Guarantee reduce the loss if
the transaction doesn’t goes as planned.

Difference between BC & Fund Transfer:

BC is issued for the customer need and Fund transfer is used inside branch like enter branch, branch to
branch.

Suspicious Transaction Report (STR): The word “suspicious” has the suggestion that such transaction is
surely related to a criminal act or the transaction that is unusual or improper and is not always related
to a certain criminal act.

Large Cash Transaction Report (LCTR): A transaction is considered a large Cash Transaction when it
involves any item which carries a value equivalent to or exceeding 500,000 AFN.

What is deferent between AML and terrorist? Terrorist are not in their business for money,

Terrorist: financing provides funds for terrorist activity,

AML source of fund can be legal or illegal,

Way establishing banking system?

Bank is one of the most important and trustable sector for the people in all of world and bank offer good
service for the people and keeps money of people save and sound.

What is deferent between central bank and commercial bank?

Central bank are issuing the right of money and supervising the commercial bank and establishing the
law of banking ‘policy ‘regulation-’procedure –and planning of the banking but commercial bank are
offering good service for the people and collect money from people for landing and investment so all
banking system very good service for the people of the world.....

When Aziz bank inaugurated? Aziz bank inaugurated of 2005 in Afghanistan and the chairman and all
employee of this bank are afghans and this bank has 75 branches in all around of Afghanistan and this
bank offering good service for the people due to this bank has allot of customer then another bank and
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this bank work by ICBA system and wand to try develop more and this bank collect money from people
for investment and landing.

Define the bank? Bank is financial institution which collects money form people by low rate and gives
loan to other people to high rat and keeps money of people save and sound.

Or bank is the financial institution which is dialling money,

1. Explain Money Laundering and enlist all its steeps?

Money laundering is the process whereby proceeds of crimes such as drug trafficking, kidnapping,
robbery, counterfeiting, misuse of public funds
And the like are converted into legitimate money through a series of financial transactions making it
impossible to trace back the origin of funds. Most often, such deals are the first step
In using the banking system to launder or clean up the cash obtained from trade of illegal goods
1st placement:
2nd layering:
3rd integration:
2. Write a letter to your branch customer and inform him about bank service and products?

We are pleased to inform you that our bank has started the program of loan scheme for the benefit of
their honorable customers

The condition of getting loan is very easy and simple.

Our bank also announces the program of giving gift to the customers on their deposit in the account.
We will also soon announce the program the master cards in our branch.
Hope you people appreciate these programs and get benefit of it,
Yours truly Azizi Bank
What is FD SUNDRY?
3. What is FD-parking? At time of FD account opening to customer sundry FD parking GL is use to credit
the amount of FD account temporary in sundry parking by the bank's cash section.

And when the account is opening completely by the customer service's account is credited from the FD
parking.

4. What is Cheque and explain all kinds of that clearly? Cheque is an instrument in writing containing
an unconditional order, addressed to a banker, sign by him to pay on demand a certain sum of money
only to or to the order of certain person or to bearer of instrument. Bearer Cheque, Order Cheque,
Open Cheque

5. Explain Job specification of branch manager?

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Over all supervision of entire branch banking operations and implement internal control us per laid
down policies and procedures of the bank and the law prevalent in Afghanistan.

Sourcing business for the bank and achieving month on month deposit targets etc.

Responsible for expenditure incurred within the limit of the approved budged,

6. Explain the following sequences logically? Promissory note and invoice,

Promissory note: a written promise by one party to pay another party a definite sum of money either on
demand or at a specified date.

Invoice: a commercial document that itemize a transaction between a buyer and seller.

7. What is reconciliation? Reconciliation is the key of process used to determine whether the money
leaving an account matches the amount spent. Ensuring the two values are balanced at a specified
future date.

8. Define below terminology,

General rules:

Policy:

9. Define Bank with its basic and secondary functions and enlist central bank functions?

A commercial bank is a financial institution which performs the functions of accepting deposits from the
general public and giving loans for investment with aim of earning profit.

Central bank functions:

1. Issuance of money,
2. Control of money market,
3. Controller of all private banks' money,
4. Exchange control,

10. Explain complete procedure of corporate account?

In the time of opening corporate account needs to the below documents

Original license of company

TIN Number of company

CBR certificate
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Association letter of company

President and vice president should be present

Tazira of president and vice president

Three digital photos of them

Stamp of company

TIN number of president and vice president

11. What is pre-paid expense and actual budget?

12. Zia bought a laptop which cost 37250 AFN shopkeeper gives him 16% discounts, calculate the fixed
price of?

13. What is purpose budget?

14. Being a CSO / Branch Manager how will you control the branch operations and how will you
improve yourself also show you achieve to your branch business goals?

15. Expand below abbreviation form?

NPA: Non Political Account, CFT: Combining Financing Terrorism

RIT: Remittance in Transit, LCTR: Large Cash Transaction, STR: Suspension Transaction Report

AML: Anti Money Laundering, ACSS: Afghanistan Clearance Settlement System

MBFD: Multi Benefit Fixed Deposit

16. Write M-paisa full process and explain debit and credit and rules of debit and credit?

17. Explain RIT and DAB RIT and differences between them?

When we fund transfer from branch to another branch then should debit RIT for the fund

When we transfer fund from branch to DAB then we will debit DAB RIT and after receiving fund to dab
then back to debit DAB and credit DAB RIT,

18. What is provisioning? A balance sheet item representing set aside by a company to pay for losses
that are anticipated to occur in the future,

19. What is accounting and enlist the cycle of accounting?

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20. Define asset with all kinds of that clearly?

An asset: in business terms, is something bought by a company to increase its value and income or to
help benefit the company's overall operations assets will be recorded on a company's balance sheet and
can either be tangible or intangible.

Anything valuable possessed in a firm and firm has it is right of use and sell is called asset.

Cash, furniture, equipment, inventory, notes receivable, machinery, account receivable, bank, land.

21. What is accounting and enlist the cycle of accounting?

Accounting is………….

Cycle of accounting: Journal, Ledger, Trail balance, Income statement, Balance sheet

22. Define assets with all kinds of that clearly?

Anything available possessed by a firm which have monetary value and or expected to benefit

Kinds of that: tangible and non-tangible

23. Jim has 15280 AF salaries per month with 12% tax, calculate his basic salary and the amount which
he earns per year?

100 12% 15280*100/12=

X 15280

24. What is bank account and enlist types of that?

26. Define past perfect tense and give example and enlist adverb of place?

This tense show an activity which has completed at unclear time in the past And also it show repeated
action

Example: I have written a letter to my friend,

Accounting Process of Trail Balance

BRANCH MANGER, CSO

- When any customer withdraw cash – own customer

Dr- CA/SA/FD Deposit (Customer Account)
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Cr- Cash in hand

- When any customer deposit cash - own customer
Dr- Cash in hand
Cr- CA/SA/FD Deposit (Customer Account)
- When any customers of other branch withdraw cash
Dr- BALANCE DUE TO HEAD OFFICE
Cr- cash in hand
- When any customer of other branch deposit cash
Dr-CASH IN HAND
Cr- BALANCE DUE TO HEAD OFFICE
- When we exchange and purchase USD
Dr- CASH IN HAND -USD
Cr- CROSS CURRENCY A/C -USD
Dr- CROSS CURRENCY A/C –AFN

Cr- CASH IN HAND -AFN

- When we Exchange and sell USD

Dr- CROSS CURRENCY A/C -USD
Cr-CASH IN HAND USD
Dr- CASH IN HAND AFN

Cr- CROSS CURRENCY A/C -AFN

- When we pay cash to WU Customer

Dr- WESTERN UNION IMPREST ACCOUNT
Cr- CASH IN HAND
- When we receive cash From WU customer
Dr- CASH IN HAND
Cr- WESTERN UNION OUTBOUND
- When we pay cash to M-Paisa Customer
Dr- M PAISA IMPREST ACCOUNT
Cr- CASH IN HAND
- When any staff gets advance salary
Dr- ADVANCE SALARY
Cr- CASH IN HAND OR STAFF ACCOUNT
- When we adjust rent of bank: Dr- CROSS CURRENCY A/C -USD
Cr- PREPAID EXP USD
Dr- RENT OF BANK AFN

Cr- CROSS CURRENCY A/C -AFN

- When we obtain approval to repair or to purchase asset or furniture by branches
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Dr- SUSPENSE ADVANCE OR SUSPENSE GENERAL

Cr- CASH IN HAND

After we send their bills to HO for approval, HO will send BC to us to en-cash BC or allow the
branch to debit expense account of branch
Dr- EN-CASH OF BC = BALANCE DUE TO HEAD OFFICE

Cr-SUSPENSE ADVANCE OR SUSPENSE GENERAL

If allow branches to debit expense account then:
Dr-CONCERNED EXPENSE GL OF BRANCH

Cr- SUSPENSE ADVANCE OR SUSPENSE GENERAL

- While branches liable to pay some expense to the vendors at concern months as per actual
budget but the fixed amount of expense is not clear and the payment is delayed for future.

Dr-CONCERNED EXPENSE ACCOUNT OF BRANCH

Cr-SUNDRY GENERAL
- While bank deduct SMS charges from Customer account:

Dr- CURRENT CORPORATE DEPOSIT CURRENT CORPORATE DEPOSIT (Customer A/c)

Cr-SUNDRY SMS ALERT

- When any tellers have excess fund but customer is not clear

Dr-CASH IN HAND

Cr-SUNDRY CASH EXCESS

- When any tellers have shortage of cash, after obtaining approval from Operation department

Dr-CASH SHORTAGE

Cr- CASH IN HAND

- When bank deducted tax of interest which the interest has already credit into customer A/c

Dr-INT EXP.ON SAVING DEPOSITS

Cr- SAVING GENERAL DEPOSITS (CUSTOMER A/C)

- When branches issue Cheque book to their customers

Dr-CURRENT CORPORATE DEPOSIT (CUSTOMER ACCOUNT)

Cr-CHEQUE BOOK FEE

- When bank collect charges from issuance of BCs

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Dr-CASH IN HAND

Cr-DD/BC/PO COMMISSION
- When branches transfer excess cash to HO

Dr-RIT

Cr-CASH IN HAND
- When branches request cash from HO

Dr-CASH IN HAND

Cr-BALANCE DUE TO HEAD OFFICE

- When provincial branches transfer excess cash to DAB and from DAB to HO

Dr-RIT, Cr-CASH IN HAND, WHILE BRANCH RECEIVES RECEIPT FROM DAB

Dr-BALANCE WITH DAB (CURRENT A/C)

Cr-DAB RIT
WHILE DAB TRANSFER FUND TO HO A/C WITH DAB, AFTER RECEIVEING RECEIPT
Dr-DAB RIT

Cr- BALANCE WITH DAB (CURRENT A/C)

WHILE HO RECEIVE RECEIPT FROM DAB, HO WILL ISSUE BC TO THE BRANCH AND BRANCH
ENCASH BC
Dr- BALANCE DUE TO HEAD OFFICE

Cr-DAB RIT
- When provincial branches request cash through DAB from HO, WHILE BRANCHES RECEIVE
RECEIPT FROM DAB, SO BRANCH SHOULD ISSUE BC TO HO

Dr-BALANCE WITH DAB (CURRENT A/C)

Cr- BALANCE DUE TO HEAD OFFICE

- When branches en-cash BC by cash or Transfer, Dr- BALANCE DUE TO HEAD OFFICE
Cr-CASH IN HAND OR (ACCOUNTS)
- When branch collect account closing fee from customer, Dr- CURRENT INDIVIDUAL DEPOSIT
(CUSTOMER A/C)
Cr- ACCOUNT CLOSING FEE
- When branch collect any other charges as duplicate ID card Printing or cash deposit fee or
cash withdrawal fee.

Dr- CURRENT INDIVIDUAL DEPOSIT (CUSTOMER A/C)

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Cr- OTHER FEES & COMMISSIONS

- When bank collect any other charges as MISCELLANEOUS charge (average balance charges or
some others)

Dr- CURRENT INDIVIDUAL DEPOSIT (CUSTOMER A/C)

Cr- MISC/ALL OTH.NON INT.INCOME

- When branches pay cash for all expenses of branch: Dr- EXPENSE ACCOUNT OF BRANCH
Cr-CASH IN HAND

Duties of Branch manager are below

Planning –in this stage manager should specify the organization goal to staffs

Decision making – in this stage manager should get preparation make strategy for achieving goals

Organizing – in this stage Manager should instruct all staff there their authority and responsibility for
example: Job discretion

Controlling and supervising - in this stage manager should control all staffs works and check it with
standard

conceptual and physical ability for managing and controlling of the branch, Manager should has good
communication Quality through this sending report to Ho and receiving circular form HO and informing
of all staff from changes, on quality of Manager is planning and decision making ability, flexible quality
on Manager, good behavior with staff and customer,

Suspense General: is asset and it is used for daily a transaction which is adjusted at the end of the day or it is
used for shot time transactions for example: salary >>> at first we transfer to suspense and then transferred to
accounts, Sundry general: is liability and it is used for provisioning of expense for example provisioning of
telephone charges, electricity, fuel charge and others and sundry general is used for long time in sundry
general we have four4 kind GLS 1.asset 1.liability 3.expense 4.income

Misclinouse account: is used for that expense and income which does not have GL head for example
GAZ expense, Answer No8: 5000-USD
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Accounting:
Accounting is the art of Identifying, measuring, recording, classifying, summarizing, interpreting and
communicating the financial transaction of an organization.
Financial Accounting Management Accounting
Financial accounting involves
recording of financial transaction of
an organization and summarizing
them in periodic financial statement
for external users who wish to
analyse and interpret the financial
position of the business.
Functions under Financial accounting:
* Book keeping system.
 Payable and receivable
control.
 Accruals & prepayments.
 Suspense/sundry and inter
branch.
 Bank reconciliation.
 Profit & Loss analysis and
control.
 Balance sheet analysis and
control.
 Fixed Asset control
 Income tax and withholding
tax calculation/filing/control
system. And so forth.
Finance Department Note
Cost Accounting
Management accounting involve in
Cost accounting: Is a system of
offering advice to the management, it
involve in planning, decision making, recording data and providing
and control, information about a product
produced by an organization and
It is concerned with the historical and the service it provides.
future cost of a product or service like
budget and forecast Cost accounting is concerned
with the historical cost a product
or service
Functions under Management accounting: Functions under Management accounting:
 Annual statuary report  Production Cost
 Budget and forecast
 Product profitability analysis  Non-Production Cost
report
 Cash flow report  Direct Cost Vs. Indirect
 Capital investment analysis report
 Standard cost variances analysis
report
 Government return, like Income
tax, other DAB report
And so forth.
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Financial Statement

Financial Statement

Balance Sheet

Income Statement

Owner's Equity
Statement

Accounting
Equation

Income & Expense

Cash Flow
Statement

Asset & Liability Profit

Financial Statement:

Financial Statement: is a formal record of the financial activities of a business, which maybe included
four basic statements like:
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1. Balance Sheet:
2. Income Statement,
3. Owner’s Equity Statement,
4. Cash Flow Statement,

1. Balance Sheet: Shows the financial position of the business at a point in time, by indicating the asset
it owns the liability it owes and the owners’ equity invested in the business.

A. Assets are economic resources own and control by a business.

Asset

Fixed Asset Current Asset

* Not Immediately Convertible to Cash. * immediately convertible into cash or

* Long term in Nature. within one year
* Not for Resale. * can be sold like Inventories
* can be Tangible or Intangible

Land Inventory
Building Receivable
Car Cash
Machinery

There are two types of Asset:

A1. Current assets are those assets which may be converted into cash immediately and or within one
year. (E.g. cash, Receivable, Inventories)

A2. Fixed Asset is those assets which are long term in nature, they are not immediately convertible into
cash, and they are not for resale and can be tangible or intangible. (E.g. Building Vehicles, Computer,
Furniture)

B. Liability
Liability is a debt and obligation that arises from past transaction and are required to be settled in future
date.
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There two types of liabilities

B1. Short term liabilities are those liabilities which are payable within one year or less (E.g. Salary
Payable, Tax payable, Interest payable)

B2. Long term Liability: Are those liabilities which are payable within two years or more (E.g. time
deposit from customer/banks).

Liability

Current Liability
Non-Current Liability

* Long term liabilities payable within Those liabilities which are payable

Two years or more within 12 months or less

Loan Salary Payable

short term loan

Test your understanding:

Classify the following items into Current and Non-Current asset and liability.

1. Land and building

2. Receivables
3. Cash
4. Loan Payable into two years’ time
5. Payables
6. Car
C. Capital:
Capital is the amount invested in the business by the owner.
Income Statement,

Income & Expense,

Profit,
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2. Income statement: Income statement shows the performance of the business over a period of time.
Income statement shows the performance of the business over a period of time.

A. Income: Income is increases in economic benefits during the period from inflow of asset which result
in increases in capital.

B. Expense: Expense is decreases in economic benefits during the period in the form of outflow of asset
that result in decrease in capital.

3. Owner’s Equity Statement: shows the increases and decreases of the capital over the accounting
period.

4. Cash flow Statement: shows the increases and decreases of the cash from Operating activities,
investing activities and financing activities.

The account equation:

The transactions are as follows:
Day 1 Yusuf commences business introducing $ 1,000 cash
Day 2 buys a motor car for $400 cash
Day 3 buys inventory for $200 cash.
Day 4 sells all the goods bought on day 3 for $300 cash.
Day 5 buys inventory for $400 on credit
Required: using the accounting equation, we will draw up a balance sheet at the end of each day’s
transaction.

Test your understanding 2:

Continuing from the previous transaction, prepare the balance sheet at the end of each day after
accounting for the transaction.
Day 6 sells half of the goods bought on day 5 on credit for $250
Day 7 pays $200 to his supplier.
Day 8 receives $100 from a customer.
Day 9 proprietor draws $75 in cash
Day 10 pays rent of $40 in cash.
Day 11 receives a loan of $600 repayable in two years.
Day 12 pays cash of $30 for insurance.

Once you have dealt with each of the transactions, prepare a balance sheet at the end of the day 12
and an income statement for the 12 days of trading.
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Finance Department

CFO

Deputy CFO

Finance Manager

Deputy Finance Manager

Senior Finance Senior

Finance Finance Finance
Officer & Budget Finance
Officer Officer 2 Assistant
Coordinator Officer

CFO:

 Looking after all Finance Functions including:

 Finalization of Balance sheet

 External Audit and liaison with regulatory authority

 In charge of organizing all Board meetings

 Updating all policies

Deputy CFO:

 Supporting the CFO in all his above activities

Finance Manager:

 Managing over all daily, weekly, monthly and quarterly activities in Finance, including:
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 Checking daily reports send to DAB

 Coordinating External audit/Internal audit/DAB Inspection team

 Preparing DAB monthly & quarterly report

 Preparing month end adjustment

 Depreciation

 Tax

 Overview all daily Expenses

 Providing financial Ratios

 providing double entry system

 Coordinating with all Branches & other department in solving finance related issues

Dy. Finance Manager:

 Supporting Finance Manager in all above activities

Senior Finance Officer/Budget coordinator:

 Preparing over all capital and Revenue budget for the bank

 providing monthly Comparing report of Actual and Budget expenditure for control

 providing to all branches and departments their budget with a proper instruction

 Checking and authorizing all daily vouchers

 preparing daily deposit report to DAB

 Preparing weekly m1 report to DAB

 Coordinating with Tax authority

 preparing Tax forms getting approval from tax authority

Finance Officer:

 Receiving, Checking & Posting all daily vouchers of expenditures in the ICBA

 Issuing BC to Branches & receiving the BC/in cash the BC

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 Calculation of taxes for rent, salary, contractors

 Replying all Branches telephones and solving issues arises in the branches

Finance Assistant

 Recording of all vouchers in the excel sheet before sending it to archive

 Posting of vouchers of expenditure in the ICBA

 Supporting the officer in all above activities

Chapter 2:

 Accounting Cycle,

 Transaction Occur,

 Effects Recorded in Leger account,

 Ledger accounts Balance Off,

 Trail Balance,

 Year-end adjustments made and ledger account closed off,

 Financial Statements,

The duality concept and double entry bookkeeping:

The duality concept means, each transaction that a business made, affects the financial statement in
two ways.

Example: a business buys a fixed asset, the two effects on the Financial Statement are.

 There is an increase in fixed asset,

 There is a decrease in cash,

Ledger Account: Ledger account, shows the increase and decrease (debit & credit) history of asset,
liability, expense and revenue in the business.

Each account has two sides, the debit (Dr) and Credit (Cr) side
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Debit Credit

(Dr) Name of Account (Cr)

Cash

Date Narration $ Date Narration $

Debit Credit

Increase in: Increase In:

Expense (Income statement) Liability (Balance sheet)

Asset (Balance sheet) Income (Income statement)

Drawing (Balance sheet) Capital (Balance sheet)

Summary of steps to record a transaction:

1. Identify the items that are affected.

2. Consider whether they are being increased or decreased.
3. Decide whether each account should be debited or credited.
4. Check that a debit entry and a credit entry have been made and they are both for the same
amount.

Test your understanding 1:

Recording cash transactions:

Show the following transactions in ledger accounts: (Tip: the ledger accounts you need are bank, rent,
Drawings, and Sales)

• Ferdows pays $80 for rent by Cheque.

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• Ferdows sells goods for $230 cash which he banks

• She then takes $70 out of the business for his personal living expense.

• Ferdows sells more goods for cash, receiving $3,400.

Test your understanding 2:

Rameen enters into the following transactions in his first month of trading:

• Buys goods for cash for $380

• Pays $20 in lunch expense

• Makes $1,000 in sales

• Receives a bank’s loan of $5,000

• Pays $2,600 for fixtures and fittings.

Required: what is the entry to the credit side of the cash T account?

A) $6,000

B) $6,380

C) $3,000

D) $2,620

Balancing off a statement of financial position ledger account:

Once the transaction for a period have been recorded, it will be necessary to find the balance on the
ledger account:

• Total both sides of the T account and find the larger total.

• Put the larger total in the total box on the debit and credit side.

• Insert a balancing figure to the side of the T account which does not currently add up to the
amount in the total box. Call the balancing figure ‘balance c/f’ (carried forward)

• Carry the balance down and Call it ‘balance b/f’ (brought forward).
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Test your understanding 3:

Balance off the following account:

Test your understanding 4:

Balance off the following account:

The Trial balance:

• Once all ledger account have been balance off a trial balance is prepared

• A trial balance is list of the ‘balance b/f’ on the ledger accounts according to whether they are
on the debit or credit side.
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The Trial balance:

What does the trial balance prove?

• The trial balance will balance if for every debit entry made, an equal credit entry was made.

• The purpose of a trial balance is:

• To check that for every debit entry made an equal credit entry has been made.

• As a first step in preparing the financial statement

Test your understanding 5:

Mathew set up a business and in the first nine days of trading the following transactions occurred.

1 January Mathew introduces $ 10, 000 capitals by Cheque.

2 January Mathew buys supplies worth $ 4,000 and pays by Cheque.

3 January Mathew buys a deliver van for $2, 000 and pays by Cheque.

4 January Mathew buys $ 1,000 of purchases on credit.

5 January Mathew sells goods for $ 1,500 and receives a Cheque of that amount.

6 January Mathew sells all his reaming goods for $ 5,000 on credit.

7 January Mathew pays $ 800 to his supplier by Cheque.

8 January Mathew pays rent of $200 by Cheque.

9 January Mathew draws $ 100 for living expenses from the business bank account.

Required:

a. Complete the relevant ledger accounts.

b. Extract a trial balance.
c. Prepare the income statement for the first nine days.
d. Prepare the statement of financial position as at 9 January.
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PRINCIPLE OF ACCOUNT
INTRODUCTION

Book Keeping: An art of recording the business transaction systematically in a set of book is known as
book-keeping. There are two methods of recording the transactions.

(1) Single entry book-keeping system: In single entry book-keeping system a businessmen records only
one transaction of the business.
(2) Double entry book-keeping system: In double entry book-keeping system a business man records
two transaction of the business.

Transaction: the act of buying and selling of goods are called Transaction of the business. (Transaction
means give and take)

Debtor: A person who owes money to other for example we give money to Ali Rs.100. Its mean we have
to receive from him Rs.100. So Mr. Ali is our Debtor. And for him we are the Creditor.

Creditor: The person to whom money owes.

Dr: Debit: (Receiving)

Cr: Credit: (Giving)

Account: Account is a summarized record of business transaction.

Business: Any activity directly toward gaining a livelihood is called business.

Proprietor: The owner of the business is called proprietor.

Profession: If any person earn money through education or after completing his education a person join
to any occupation is called profession for example (teaching, Engineering, Doctor, Lawyer, architecture)
etc.

Expenditure: Its mean spending of money

Capital: Any amount of cash or goods, which a person invests in his business, is called capital.

Capital Account or Drawing Account:

In Double Entry Book-keeping system the owner of the business not writes his name in the books of
account. He use two terms instead of his name.

For example:
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1. Capital Account. When he invests money in that time he uses capital account for his name.
2. Drawing Account. When he withdraws money for his personal use from the business he uses
drawing account instead of his name.

Commission: It is a kind of remuneration.

Goods: All those things which purchase for the reselling purpose are called goods.

Kinds of goods:

Purchase goods: Goods purchased are called purchases. When the goods are purchase for cash is
called cash purchases but if they are purchased for which payment will have to be made at some future
date it is called credit purchases.

Sold goods:

Sold goods are called sale, when the goods are sold for cash is called cash sale. But when they are sold
without having received payment, they are credit sales.

Returns goods to: Its mean purchase returns.

Returns goods by: Its mean Sale Returns

Trade Discount: The discount which is given at the time of purchase and sale is called trade discount.

Cash Discount: The discount which is given at the time of payment of money or receiving of money.

Accounts and their kinds.

There are two methods of accounting system. One is called British system and the second is called
American system.

According to British system there are three kinds of accounts.

1. Personal Account: All those accounts which deal with person, firms and companies are called
personal accounts, Such as basher, raja, Nasir, Arif, Humayun. Habib bank Ltd. Muslim Commercial Bank
Ltd.

2. Real Account: All those accounts which deal with things and properties are called real accounts.
Such as cash, Pen, book, machine, furniture, table, chair, car, Land, Premises, Building.

3. Nominal Account: All those accounts which records Income, Losses and expenses are called Nominal
Account. Such as salary, taxes, insurance, carriage, rent, telephone bill, electric bill etc.
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Rules of Debiting and Crediting:

There are three Golden rules for debiting and Crediting:

1. Personal Account: In case of personal accounts. Debit the account of receiver and Credit
the account of giver
2. Real Account: In case of real account. Debit all those things which come in the business.
And credit all those things which go out from the business.
3. Nominal Account: In case of nominal account. Debit all the expenses and losses and Credit
all the Income.
There are five kinds of accounts according to the American system:

1. Assets
2. Liability
3. Owner’s Equity
4. Expenses
5. Revenue
Rules of Debiting and Crediting

Assets

Increase Debit

Decrease Credit

Expenses

Increase Debit

Decrease Credit

Liability

Decrease Debit

Increase Credit

Owner’s Equity

Decrease Debit

Increase Credit

Revenue

Decrease Debit
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Increase Credit

Accounting Cycle

Transactions

Balance Sheet Journal

Profit and Loss

Ledger
Account

Trading
Trail balance
Account

Journal: The book in which all kinds of business transaction are recorded according to date wise is called
journal or day book or daily record book, or book of original entries or chronological book or assistant of
ledger or subsidiary book or helping book.

The word journal has been drive from the French word “Jour” which mean day. The transactions are
recorded daily in this book that is why we say this is journal book or daily record book.

Format of Journal:

Date Description L/F V/N DR Amount CR

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Ledger: Ledger is the second book of account. In journal all the business transactions are scattered up
and down according to the date. But when we want to make a classified record, for this purpose we
collect all similar transactions from the journal and post in to separate place. The place where we record
this transaction separately is called ledger.

Date Description J/F V/N Amount Date Description J/F V/N Amount

Trial balance: It is a statement which is prepares to find out the arithmetical error. Trail balance is a
statement which is prepares to check the correctness of journal and ledger.

Format of Trial Balance:

S.No Description R/N Debit Balance Credit

FINAL ACCOUNT: At the end of the business year all businessmen prepare few accounts which are
called final accounts. Final accounts can be prepared with the help of trail balance. Final accounts
consist of three accounts.

1. Trading account (Manufacturing account)

2. Profit and Loss account (Income Statement)
3. Balance Sheet (Financial Statement)
Trading account: This account is prepared to find out Gross profit or Gross Loss of the business. The
difference between the purchasing price of goods and the selling price of goods is called Gross Profit or
Gross Loss. If the selling price is higher than the purchasing price it is called Gross profit and if the
purchasing price is higher than the selling price it is called Gross loss. Trading account has two sides. One
is called Debit side and the other is called Credit side.
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Items on the Debit side

Opening stock,

Purchases,

Less purchase return,

Direct Expenses

Wages

Carriage inward

Octroi duty

Railway charges

Custom duty

Item on the Credit side

Sales

Less sales return

Closing stock

Trading Account

For the year ended 31 December 2017

Dr Cr

To opening stock By sales

Purchase Less sales return
Less purchase return Closing stock
Carriage
Wages
Octroi duty
Railway charges
Custom duties

Gross profit Gross loss

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Profit and loss account:

This account is prepared to find out the net profit or net loss of the business. Profit and loss account has
also two side one is called Debit side and the other is called Credit side. In this account we record all
nominal accounts. All the expenses will be recorded on the Debit side and all the income will be
recorded on the Credit side. If the income or credit side is higher than the debit side or expenses side it
is called Net profit but if the expenses side is higher than the income side it is called net loss.

Profit and loss account

For the year ended 31 December 2017

To Gross loss By Gross profit

Salary Rent receive
Rent Commission Cr
Taxes Discount receive
Interest Interest receive
Commission
Discount
Insurance
Carriage outward
Bad debts
Advertising
Traveling expenses
Trade expenses
Entertainment
Food expenses
Telephone bill
Electric bill
Sundry expenses

Net profit Net loss

Balance sheet: Balance sheet is a statement which is prepares to find out the financial position of the
business. It is also called financial statement. We can prepare balance sheet with the help of Assets and
liabilities of the business. It has two sides one is called assets and other is called liabilities.
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Assets: these are the things of value possessed by a trader such as building, land machinery, furniture.

Liabilities: They are the debts due by a business to its proprietor and others. Such as loan, bills payable,
bank overdraft, creditor, capital + net profit – drawing.

Balance Sheet

As at 31 December 2017

Cash in hand Loan

Cash at bank Bills payable
Debtor Creditor
Bill receivable Bank overdraft
Account receivable Not payable
Machinery Account payable
Furniture Capital
Tools Add net profit
Land Less drawing
Building
Motor car
Closing stock

Total Total

Banking Transactions:

Bank: is an institution which deals with money,

Bank: is an institution which collects deposit from the people at low rate of interest and gives loan to its
customers at highest rate of interest.

Kind of account opens by the customer in a bank

1. Current Account: - This account is open by the businessmen. In this account a businessman can
deposit his cash hundred times a day and can withdraw cash hundred times a day. In this account
the bank not give to its customer any kind of interest. And deduct some bank charges.
2. Saving Account: - The account is open by the low income people. In this account a person can
deposit his cash daily but cannot withdraw cash daily accept twice a week. In this account the bank
give low rate of interest.
3. Fixed Deposit Account: - The account is open by the rich people. In this account a person can
deposit his cash for a fixed period of time. Minimum duration is three month and the highest
duration is five year.
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4. Home Saving Account: - This account is for general public. In this account a person can deposit his
gold, silver, diamonds, home property documents. The bank collect come charges on monthly basis.
When a person opens current account or saving account the bank provide to his customer three books.

1. Cheque book: - With the help of this book we can withdraw our cash from the bank.
2. Pay-in-slip: - With the help of this book we can deposit our cash into the bank.
3. Pass book or Bank Statement: - With the help of this statement we can check our deposit and
withdraw record in the bank.

Parties to a Cheque:

 Drawer: The person who writes the Cheque is called drawer.

 Drawee: The person to whom the Cheque is given is called drawee.
 Payee: The person who receives cash from the bank is called payee.

Cheque: Cheque is an unconditional written order from drawer to his bank to pay some cash to my
drawee.

Kinds of Cheque:

1. Bearer Cheque: The Cheque which is cashed by every person is called bearer Cheque.
2. Order Cheque: The Cheque on which we write the word order after the name of drawee.
3. Cross Cheque: The Cheque which is cross by drawing two parallel lines on its face is called cross
Cheque.
Other kinds of Cheque

1. Postdated Cheque: - The Cheque which is presented at the counter of the bank after due date is
called postdated Cheque.
2. Antedated Cheque: - The Cheque which is presented at the counter of the bank before due date
is called antedated Cheque.
3. Stale Cheque: - The Cheque which is more than six month old is called stale Cheque.
4. Open Cheque: - Bearer Cheque and the open Cheque are the same.
5. Blank Cheque: - The Cheque which sign without date and amount.
6. Dishonor of a Cheque: - when the bank reject the Cheque is called dishonor of a Cheque.

Banking transactions:

1. When cash deposit into the bank.

Bank a/c Dr

To cash a/c Cr
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2. When cash withdraw from the bank for office use.

Cash a/c Dr

To Bank Cr

3. When cash withdraw from the bank for personal use.

Drawing a/c Dr

To Bank Cr

4. When any payment made by Cheque (for example) Paid salary by Cheque
Salary a/c Dr

To Bank Cr

5. When any charges made by the bank

Bank Charges a/c Dr

To Bank Cr

6. When a Cheque receive from a customer and not deposit in to the bank on the same day it
should be consider as cash. For example, Receive a Cheque from Rahim Rs. 100
Cash a/c Dr

To Rahim Cr

7. When a Cheque receives from a customer and deposit into the bank on the same day. For
example, Receive a Cheque from Rahim and deposit into the bank on the same day Rs. 100
Bank a/c Dr

To Rahim Cr

8. When a Cheque dishonor by the bank. For example, Rahim’s Cheque dishonor by the bank.
Rahim a/c Dr

To Bank Cr

Exercise:

Q.1. Define the following?

Book-keeping, Account, Transactions, Cash discount, Trade Discount, Capital, Drawing,

Debtors, Creditors, Business,

Q.2. Explain the kinds of Accounts?

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Q.3. Explain the rules for debit and credit with minimum two examples?

Q.4. Define Journal also prepares the format of Journal, Ledger, why we prepare Trail
Balance?

Q.5. what do you about Balance Sheet?

Q.6. what is bank?

Q.7. How many Accounts we can open in a bank?

Q.8. what is Cheque?

Q.9. Explain different kinds of Cheque?

Q.10. what is different between Cheque book and bank statement?

Q.11. What is different between fixed deposit account and saving account explain in detail?

Q.12. What do you know about Balance sheet?

Q.13. Explain the following?

Bearer check, cross check, blank check

Q.14. Fill in the blanks by the term of Debit & Credit?

1. Mr. Jamal started business with cash. Capital a/c--------- Cash a/c-----------------------
2. Purchase Building for cash. Cash a/c-----------Building a/c-----------------
3. Sold Furniture for cash. Cash a/c -------------Furniture a/c -------------------
4. Paid Rent. Cash a/c --------------Rent a/c-------------------------
5. Purchase stationery for cash. Stationery a/c-------------Cash a/c-------------

Q. 15. Record the following transaction in to Journal?

1. Naveen started business with cash $55000

2. purchase Computer for cash 3000
3. Sold Furniture for cash 1500
4. Paid Rent 450
5. Receive Salary 560
6. paid Food Expenses 400
7. purchase Stationer for cash 200
8. purchase Motor car for cash 1000
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Q.16. Record the following transaction into Journal post there from into Ledger and prepare
the Trail Balance.

1. A trader started business with cash $50000

2. Purchase office equipment for cash $1000
3. Purchase building for cash $20000
4. Purchase computer for cash $10000
5. Purchase a motor car for cash $5000
6. Paid rent of shop $500
7. Paid electric bill $400
8. Paid telephone bill $500
Q.17. Record the following transaction in to journal post there from into ledger and prepare
trail balance.

1. Mr. Salam started business with cash $60000

2. Purchase furniture for cash $2000
3. Sold good to Ali $5000
4. Return goods from Ali $1000
5. Purchase good from Nasir $4000
6. Return good to Nasir $500
7. Paid cash to Nasir 3500 and discount receive 10%
8. Receive cash from Ali 4000 and allowed him discount 10%
Q.18. Find out Gross profit or Gross loss of the business with the help of following items.

Sale 8000

Wages 200

Carriage 300

Purchase 5000

Sale returns 300

Opening stock 2000

Purchase returns 200

Closing stock 3000

Q.19. Find out Net profit or Net loss of the business with the help of following Items?

Tax 400 Telephone bill 300

Stock opening 3000 Wages 400

Discount 500 Rent 700

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Commission 600 Purchase 4000

Interest 200 Purchase returns 500

Custom duty 700 Sales 8000

Closing stock 4000 Sales returns 300

Commission receive 200

Q.20. Journalize the following transaction, post there from in to ledger and prepare trial
balance, profit and loss account and balance sheet.

1. Ali started his business with Rs.400000.

2. Purchase goods for cash Rs.4000
3. Sold goods for cash Rs.3000.
4. Purchase Furniture for cash Rs.3500.
5. Purchase goods from Nadir Rs.4000
6. Paid wages Rs.1500.
7. Sold goods to Jamal Rs.5000.
8. Paid Carriage Rs.200.
9. Return goods to Nadir Rs.200
10. Deposit cash in to Bank.Rs.4500.
11. Return goods by Jamal Rs.400.
12. Ali withdraws cash for personal use Rs.3000.
13. Purchase machinery for cash Rs.40000.
14. Purchase Building for cash Rs.60000.
15. Purchase goods from Pamir Rs.6000.
16. Sold goods to Rashid Rs.7000.
17. Paid telephone bill Rs.600
18. Paid commission Rs.450
19. Paid Sundry Trade Expanses Rs.600
20. Receive discount Rs.345.
21. Paid Rent Rs.600
22. Paid Entertainment Expenses Rs.567
23. Receive Interest Rs.786.
24. Stock at the end of the year Rs.10000.
25. Paid Rs.900 for Advertisement.
26. Purchase a motor car for cash Rs.4000
27. Paid Electric Bill Rs.678.
28. Receive cash and give a bill payable against this for Rs.6500.
29. Paid Taxes Rs.450
30. Sold goods for cash Rs.8764.
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Bank Reconciliation Statement

When we prepared three column cash book, after this we want to check the correctness of cash and
bank column. Our cash column is always correct but when we want to check the correctness of bank
column. We go to the bank and compare our cash book bank column balance with the pass book (Bank
statement) balance. Some time we find too much difference between cash book balance and pass book
balance. Therefore for removing the difference we prepare a statement which is called bank
reconciliation statement.

So it is a statement which is prepares to reconcile the balances of cash book and pass book.

There are minimum ten items which are cause of difference between our cash book balance and pass
book balance.

1. Cheque paid into bank but not collected and credited by the bank.
2. Cheque issued but not presented for payment.

These two items are called statement items.

1. Un collected Cheque
2. Un presented Cheque
3.
Other eight items are called Additional Items,

In these eight items three items are our receipts which we records on the Debit side of the cash book.
The bank record these items on the credit side of pass book. These items are as under

1. Direct payment by the customers

2. Bills Receivables
3. Interest on investment

Other five items which are our payment which we records on the payment side of the cash book but the
bank records these items on the debit side of pass book. These items are as under.

1. Bank charge
2. Bills Payables
3. Interest on overdraft
4. Cheque omitted to be paid into bank.
5. Dishonor of a Cheque
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Salary Department Note

Table of Content:
 Salary department Introduction

 Salary Account Product features & criteria

 Marketing For government entities

 Marketing For Private companies

 Salary Scheme for private sector

 Eligibility & Requirements

 SALARY TIE-UPS

 Salary account opening process

 Advantage to employees

 Branchless Banking

 Steps to Win Customer

 Important qualities to our customer

 Banking Market segmentation

Salary Dept. Introduction:

• Salary Department is one of the business driving products of Azizi Bank. It generates free float,
fee income, sustaining deposit in company accounts for the bank, besides this it’s a primary
source through which the relationship pitching with Govt. Dept., and Corporate’s is established

Salary Account Product features & Criteria:

 The Salary Account is a zero balance saving or current account for the employees of the
organization, whose salary is routed compulsorily every month through Azizi Bank

 The Interest is paid in employee’s salary saving account on the last day of the month as decided
by the bank through Interest Rate Circular revised from time to time

 Those employees who want to follow the Islamic principles and doesn’t need interest can open
the current account; where in no interest will be paid on such current accounts.
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 All the salary account holders will be provided with Free Insta ATM Card, so that they can
withdraw the cash through Azizi Bank ATMs 24x7, 365 days, without any charges presently or as
amended from time to time through schedule of charges.

 As long as the employee’s salary is routed through Azizi Bank, Salary account will continue as a
Zero balance account. If the salary is not routed through Azizi Bank for 6 months continuously,
than the said account will be treated and converted as a normal account, and the zero balance
status will stand withdrawn and the customer will have to maintain the balances as per the
prevailing schedule of charges revised from time to time.

 One of the important criteria in deciding the charges for salary processing is based on the
average balance that must be maintained in the current account of the corporate which issue
by management and salary department must monitor the average balances and charge the
customer.

Marketing For government entities:

 Govt Salary is sourced once in 2 years, through bidding process conducted Ministry of Finance.
It’s the Salary Dept., responsibility to keep a track of the bidding event and complete the bidding
process after discussing the bid rate with the Management and submit the error free bid on or
before due date and attend all the bidding meetings conducted from time to time.

Marketing for Private companies:

 In case of private companies / corporate’s / NGO’s the Marketing Department in co-ordination

with Salary Department and Branches will pitch for the salary of every organization. In order to
source such mandate Salary department can obtain the help of job websites such http://jobs.af/
http://www.acbar.org/ and they can contact the HR Head of that organization and send them
the soft copy of the offer through email id’s quoted in those job sites.

Salary Scheme for private sector:

 Azizi Bank Salary Account is a benefit-rich payroll account for Employers and Employees.

 As an organization, you can opt for our Salary Accounts to enable easy disbursements of salaries
with reduced paperwork and enjoy numerous other benefits.

 Employee Reimbursement Account can also be opened simultaneously along with the salary
account. The company can opt to disburse expenses for travel, food etc. through
reimbursement accounts.
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 Additionally, Azizi Bank offers a host of advantages for the employees like instant credit of
salaries, Brishna Bill payments, Phone Banking, Free Internet Banking and much more.

Eligibility & Requirements:

 The organization / employer needs to have a minimum of 10 employees with an average salary
per account of Afs. 5,000 per month.

 The employer need to have a current account with Azizi Bank and maintain the below required
monthly average balance in the current account and pay the charges for salary upload.

 To open this account, the employer needs to sign a simple agreement with Azizi Bank and
provide an advice (in form of a cheque/debit instruction etc.) for the total salary amount along
with the salary details of the designated employees in a soft and hard copy duly signed by the
authorized signatories and we will credit the respective employees' accounts as per your
statement of advice

Salary account opening process:

 Salary Account applicants must have introduction from the company (Stamped and Signed by
the authorized signatory). The Salary Account Applicant must also provide Photo Identity Proof
and Address proof documents as below:

 Compulsory Documents: Two latest passport size photographs along with Tazkira / Passport.

 Additional Documents: Election Card, Driving License, Telephone Bill / Mobile Bill / Electricity
Bill. Any connection to be at least 6 months old preferably in the name of the account holder /
spouse / family member.

Advantage to employees:

 Your employees automatically become Azizi Bank Salary Account holders with special benefits
and privileges and receive instant salary credit. The benefits include:

 Zero balance Salary / Current (Islamic) Account and therefore No worries of maintaining
minimum balance in the account.

 Monthly Interest paid on Savings Account Presently 4% on USD & 5% on AFS.

 You can join your spouse / family member as joint account holder and eligible for free ATM
Card.
45 | P a g e

 Free anywhere banking facility with excess to large network of over 78 branches covering 30
provinces and 19 ATMs.

 Welcome Kit containing Insta ATM Card, Cheque Book, and Internet Banking User ID &
Password.

 No annual fees on ATM Card, No limit on number of transactions.

 Higher ATM cash withdrawal limit of AFS 25,000 & USD 2,000.

 Phone Banking - Call center

Branchless e-Banking:

 “… Delivery of financial services outside conventional bank branches using information and
communications technologies and nonbank retail agents.”

What is Branchless e-Banking?

 Account Holders & Non Account Holders without visiting the branch of a Bank, can deposit or
withdraw cash, transfer funds on a real time basis by using various e-banking platforms such as :

 POS ( Point of Sale ) : Azizi Bank POS & RTC POS

 Off-site ATM - Automated Teller Machines

 Phone Banking

 Internet Banking

KYC Requirement:

 Account Holders are required to have the following documents at hand in order to register with
e-banking:

 original of tazkera along with copy

 2 digital color photos

Steps to Win Customer:

 Begin with a question:

 Who are your competitors? Take a minute to list two, three, or four companies. Then ask
yourself
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 How you know that these are your closest rivals.

 Are their products most often pitch for business alongside your products?

 Are they coming up close to your brand in search-page rank?

 Do they compete with you for resources and employees?

 Do they vie with you for the consumer’s dollar?

Important qualities to our customers:

 Accuracy, Friendliness, Time lines, Efficiency, Courtesy, Honesty

Banking Market segmentation:

 Probably the easiest approach to segmenting a market for a bank is to look at customer value
segments and the progression through the customer relationship life-cycle.

 There are five broad market segments within the banking sector (using this style of market
segmentation), most of which could be broken down into two groups, thereby representing 9
potential market segments in total as follows:

 Non-customers

1. Customers of other banks 2. Younger consumers

 Low-value customers

1. Limited income/financial needs

2. Business spread over several banks

 Medium-value customers

1. Most business with one bank

2. Business spread over several banks

 High-value customers

 Ex-customers

1. Inactive 2. Closed accounts

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Salary Process

Purpose:
To transfer total of amount/amounts from one account to one or more accounts (Salary Payment)
In order to process salary organization must have a main account by company name.

Step 1: All conditions and desires of both sides in form of AGREEMENT

Agreement should be signed by organization CEO, President or Director according to the license or
official letter from MO Economy.

But, in payroll sheet and cover letter account signatories must sign.

Step 2: Organization prepares and sends staff list through mail/official letter for opening salary
accounts containing the below details.

S.No Name of employee F/Name Tazkira/Passport No

1
2
List is submitted to the nearest branch mentioned by organization through mail while sending staff list

Step 3: Organization must send hard copy of the payroll sheet signed and stamped as well as the soft
copy through mail containing below details.
S.No Name Account No Net pay
1
2
Note: No problem of containing any other details.
But the mentioned details are necessary.

Step 4: A cover letter is printed in organization letter head as the summery of payroll with the format
given by salary department.
Note: signatory/signatories of account should sign according to their account description

Step 5: After receiving soft copy, text file is prepared from account number and net payable amount as
following.
123125456841231 237CA
123125456841231 237CA
123125456841231 237CA
123125456841231 237CA
123125456841231 237CA
000000000000000 1185DA
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Organization main account

Step 6: To process the payroll login to ICBA, Batch processing, Batch process, journal transaction
(Diskette) in 3 steps.
1- Upload Data
2- Verify Data
3- Update
After payroll processed charges must be deducted according to agreement condition.

If the payroll included any invalid account, amount will be transferred back to organization main account
with the same narration.

An official letter should be prepared containing:

1- Invalid Account
2- Valid account
3- Total amount of payroll
4- Organization main account

As salary accounts are opened as per organization instruction, in case of any problem organization has
The right to freeze the account through Email until problem is solved.

When amount is transferred to beneficiary account, only account holder has the right to withdraw the
amount.

Step 7: When the payrolls processed, on time confirmation should be sent to organization Email
address mentioned in cover letter.

Risk Management Note

What is Risk?

 Risk is a form of uncertainty about outcomes that may have a potentially adverse effect on an
individual or an entity.
 Risk is the chance of exposure to the adverse consequences of uncertain future events.
 Exposure to danger, harm or loss. All business transactions have some risk.

Where is Risk?

 Risk is omnipresent, Life is full of risk, All the banking activities are risky,

Why Risk Management?

 Nobody plans to fail; everybody plans to succeed in business, project or life.

 Difference between success & failure - Risk Management.

49 | P a g e

 Risk Management is too important to leave it to chance instead of choice.

Barings Bank (1762-1995):

 The oldest merchant bank in London,

 Nick Lesson was head of derivatives at its Singapore Office,

 The rogue trader entered into unauthorized trading of arbitrage in futures contracts,

 The trader started gambling to cover up initial losses,

 Finally ended up with a loss of $1.3 billion which was twice the capital,

 Major reason of bank’s failure was lack of effective control over the traders.

Reputational Risk:

 Strategic Risk:
 Operational Risk:
 Compliance Risk:
 Financial Risk:
Reputational Risk:

 Reputational risk is the potential that negative publicity, whether true or not, will result in loss of
customers, severing of corporate affiliations, and decrease in revenues and increase in costs.

 Reputational risk is harder to manage than other forms of risk.

Strategic Risk:

 Strategic risk relates to risk at the corporate level, and it affects the development and
implementation of an organization's strategy.

 An example is the risk resulting from an incorrect assessment of future market trends when
developing the initial strategy.

 Strategic risk includes risk relating to the long- term performance of the organization.

 This includes a range of variables such as the market, corporate governance and stakeholders.

Liquidity Risk:

 The risk that an institution’s financial condition or overall safety and soundness is adversely
affected by an inability (or perceived inability) to meet its obligations.
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Major Factors:

 constraints on the ability to convert assets into cash,

 Constraints in accessing sources of funds,

 Funding Mismatch,

WHAT IS OPERATIONAL RISK?

Operational Risk is “the risk of loss resulting from inadequate or failed internal processes, people, and
systems or from external events.”
It includes Legal Risk but excludes Strategic and Reputational Risk.

Examples of Operational Risks:

• Fake Currency

• Source of cash (AML/KYC)

• Depositing disproportionately higher amount (KYC)

• Teller pocketing the cash

• Credit to different account

• Crediting higher amount (inadvertently/deliberately)

• System not behaving properly

• Paying higher amount

• Paying in different currency (USD instead of AFN)

• Robbery

• Poor customer service

• Misbehavior with the customer

• System breakdown/connectivity issues

• Utility outages
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Types of Risks:

Most Relevant for Branch Managers:

 Liquidity Risk

 Reputational Risk

 Operational Risk

 Strategic Risk

Main Factors Generating Operational Risk:

• Internal Factors: People , Processes and Systems

• External Factors: Disruptive Events, Use of Consultants and Outsourcing of Services

MITIGATING OPERATIONAL RISK:

• Purchasing Insurance:

– Damages due to natural disaster

– Losses arising from business disruptions

– Losses due to internal reasons

• Backup Facilities

– Electrical Failure

– Telecommunication Failure

– Connectivity Failure

• Strong Internal Auditing

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HRM Department Note

(Human Resources Management)

Is the process used to Obtain, Place, Manage, and develop the employees

Essential HRM Functions & Tasks:

Classification of Essential HRM Tasks:

Functions Tasks

Recruitment & Hiring: Procedures are established for recruitment to fill vacancies, for selecting the best
qualified persons according to valid criteria, and for orienting new employees.

Wages & Benefits: Job descriptions are prepared for all positions, pay is assigned to jobs based on their
relative worth to the organization and to similar jobs in the job market, and a package of employment
benefit is made available consistent with current practice.

Employee Motivation: Motivation and support strategies are designed to encourage creative inputs and
initiatives and provide intrinsic reward for employee.

Workforce Management: Managers direct and support the work of their subordinates by varying their
styles of management consistent with the ability and motivation of each employee.
 53 | P a g e

Training & Development: Training is used to correct discrepancies in performance resulting from lack of
knowledge or skills and results are evaluated against planned performance improvements. Training is
also an important strategy for personal and professional Development.

Performance & Review: Standards are established and used to measure the performance of employees,
and results are openly discussed and used to raise mutual expectation for future performance,

Discipline & Termination: A process is established for disciplining employees and employees who fail to
perform satisfactorily and terminating them when reasonable efforts for their rehabilitation fail.

Deduction of Income Tax:

It is the responsibility of the HR Department to deduct income tax from the salary of employees in
accordance with the provisions of the Income Tax Law of the country.

1. The bank is required to withhold taxes as provided in Article 3 of the Income Tax Law from all salary
and wage payments, and pay the amount withheld to the Government account.

2. Presently as per Article 3 of the Income Tax Law, the income tax of an employee is the amount
calculated in accordance with the following schedule:

Tax Payable Income: Per Month Income Tax

From 1 Afghani Up to AFN 5000 Nil Exempted
AFN 5001 Up to AFN 12,500 2% AFN. 150
AFN 12,501 Up to AFN 100,000 10% AFN. 8,750
AFN 100,000 Above In addition to 20% AFN. 8,750 +
20%

The deduction of taxes may differ from time to time as per amendment in the (Country law)

Attendance, Punctuality and Discipline:

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It is the overall responsibility of the HR Department to maintain the attendance register on daily basis
and to implement punctuality and discipline among the staff members.

Recently the bank has purchased HRMS software which has facility of maintaining the attendance record
of each employee by scanning their

Thumb/fingers impression. The employees may be required to follow the instructions in this regard.

This system records the impression time and date, and marks present on assigned time, but other times
it marks absent. All 75 branches are linked to Head Office. Just HR Dept. can change,

Transfer, remove and edit to the device system.

Assigned time for Attendance:

Sign in (Morning) …….. To 08:15 AM

Sign Out (Evening) 04:00 ……….. PM

Caution:

 The employees who have urgent need and cannot attend to their duty, they must contact with
their line managers or other seniors regarding their problem.

 Three days late coming, count one day absent.

 The staff members mark their timings of coming and going correctly

 The staff members may come in time but they may not be on their seats/place of work and
either go out or move around.

This tendency is also required to be curbed. Initially

The staff members should be counseled and even after

Counseling if they do not desist from such habit then HR

Dept. should not hesitate to issue proper letter.

Staff Appraisals:

What is staff appraisals and why it is done?

 Staff appraisal is a process of review by staff members, organization Heads, Deputies, Managers
and other senior staff members of individual competencies, performance, and professional needs.
55 | P a g e

 It is a process in which an individual staff member and a senior collaborate in evaluating that staff
member’s work.

This means appraising all aspects of a staff member’s,

 Organization of their office

 How they manage work activities, use of time and materials

 How they behave towards clients, other staff members and the management

Reasons for Appraisals

Performance appraisal serves a number of purposes for HRM:

1. Provide input into important decisions as promotions, Transfers and Terminations.

2. Identify training and development needs. They pinpoint staff skills and competencies that are
currently inadequate but for which programs can be developed to remedy.

3. Can be used as a criterion against which selection and development programs are validated.

4. Newly hired staff who perform poorly can be identified though performance appraisal

5. The effectiveness of training and development programs can be determined by assessing how
well that staffs who have participated do not their performance appraisals.

6. Appraisal also fulfill the purpose of providing feedback to staff on how the clients and fellow
staff view their performance

7. Performance appraisals are used as the basis for reward allocations. Decisions as to, who gets
merit pay increases and other rewards are frequently determined by performance appraisals.

Discipline Procedures:

(Consequences for Poor staff behavior):

1. Verbal Warning

2. Written Warnings

3. Request for a meeting with a plenary/ disciplinary board

4. Suspension

5. Incident reports, suspension

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6. Dismissal as a last resort

Leave Procedure:

Types of Leave:

 Annual Leave:(18) Working days in entire year, 1.5 day for each month

 Marriage Leave: (30 calendar days for Female and 15 calendar days for Male), once in entire
working career

 Maternity Leave: (45 calendar days) three times in entire working career

 Haj Leave: (45 calendar days), once in entire working career

 Sick Leave: Available of proof, will be approved by management board for Max 15 calendar
days, and more will be without pay.

 Leave Without Pay: Max one month.

Resignation:

An Employee intending to resign from the Bank shall serve to the bank a notice in writing disclosing
his/her intention to resign as under:

a) 30 days’ notice in the case of Senior assistant and below

b) 90 days’ notice in the case of Officer and above (or as mentioned in the contract)

c) 15 days’ notice in the case of an employee on probation

d) However the management may reduce the notice period or waive the same on case to case
‫‪57 | P a g e‬‬

‫‪Any request for resignation may be rejected without assigning any reason. On acceptance of the‬‬
‫‪resignation, the person concerned will be informed in writing by the HR Dept. and all his/her dues‬‬
‫‪settled before the concerned employee leaves the service.‬‬

‫‪Termination:‬‬

‫‪The Bank may terminate the service of an employee at any time on any of the following conditions:‬‬

‫‪i.‬‬ ‫‪Where the services of an employee are not required in the opinion of the Chief Executive on the‬‬
‫;‪recommendation of the board of Management‬‬

‫‪ii.‬‬ ‫‪Fraud Case, or mistakes repeatedly happen, more absenteeism misbehavior and … etc.‬‬

‫‪iii.‬‬ ‫‪The employee is found medically unfit‬‬

‫‪iv.‬‬ ‫‪Redundancy‬‬

‫‪Credit department Note‬‬

‫خدمات اعتبارات و قروض عزیزی بانک‬

‫اعتبارات وقروض نقدی و غیرنقدی‪:‬‬

‫اعتبارات نقدی (قروض به تشبثات مختلف)‪:‬‬

‫اضافه برداشت یا آوردرفت‪ :‬اضافه برداشت عبارت از قرضه برای اجرای سهولت سرمایه کاری میباشد (معموالً‬
‫برای مدت ‪ 11‬ماه مدار اعتبار دارد) که به اساس آن بانک یک حد کریدت را در نظرگرفته و به مشتری مجال میدهد‬
‫تا به یک سرحد معین از بانک قرضه بگیرد‪ .‬الزم نیست تا مشتری به یکباره گی تمام مبلغ شامل کریدت را که توسط‬
‫بانک منظور شده‪ ،‬برداشت نماید‪ .‬اما‪،‬هنگامی که وی وجوه الزم داشته باشد‪ ،‬میتواند از حساب اضافه برداشت خویش‬
‫برداشت نموده و پول نقد اضافی ‪ /‬وجوه‪ /‬عواید بدست آمده از فروش وغیره را در حساب پس انداز نماید‪ .‬چنین‬
‫سهولتی صرفا ً در مقابل تضمین عمده شامل فهرست اموال ‪ /‬وجوه قابل حصول‪ ،‬تضمینات عینی و محسوس شامل‬
‫زمین‪ ،‬تعمیر‪ ،‬فابریکه‪ ،‬ماشین االت و تجهیزات‪ ،‬اثاثیه و لوازم نصب و دارایی های ثابت دیگر‪ ،‬گرانتی های جانب‬
‫چنین سهولتی با درنظرداشت صحت بودن راپورهای مالی و ارایه نمودن سوم‪ ،‬انفرادی یا گروهی‪ ،‬مجاز میباشد‪.‬‬
‫تضمین معتبر برای تشبثات اعطا ء میگردد‪.‬‬

‫قروض معیادی یا طویل مدت‪ :‬به شکل نورمال آن میتواند بخاطر بدست آوردن دارایی های ثابت اجازه داده شود‪ .‬این‬
‫قرضه برای یک مدت ثابت چه در یک قلم یا در اقساط مناسب و با درنظرداشت مدت منظور شده قرضه‪ ،‬مجاز‬
‫میباشد و مطابق تقسیم اوقات طی زمان معینی قابل پرداخت میباشد‪ .‬قرضه میعادی برای مدت ‪ 3‬سال ویا ‪ 5‬سال اعطا‬
‫میشود‪ ،‬چنین سهولتی با درنظرداشت صحت بودن راپورهای مالی‪ ،‬بزنس پالن و ارایه نمودن تضمین معتبر برای‬
‫خریدادی ماشین آالت‪ ،‬و توسعه فابریکات ارایه میگردد‬
‫‪58 | P a g e‬‬

‫قرضه ها متوسط جاری و معیادی‪:‬عزیزی بانک به منظور رشد پروسه تجارتی شما هموطنان عزیز قرضه های متوسط‬
‫را در نظر گرفته میتوا‬ ‫نید از فرصت استفاده نموده و از سهولت فوق الذکر مستفید شوید تا دوست همیشگی و با‬
‫اعتماد این بانک باشید‪ .‬رشد اقتصادی و تجارت شما افتخار ما است‪.‬‬

‫‪:‬مشخصات‬

‫الف) قرضه متوسط برای مدت ‪ 11‬ماه بوده و قابل تمدید میباشد‪.‬‬

‫ب) مبلغ قرضه از (یک صد هزار دالر امریکایی) الی (پنجصد هزار دالر امریکایی) معادل (سی ملیون افغانی)‬
‫است‪.‬‬

‫ج) نرخ تکتانه این نوع قرضه از ‪ %15‬الی ‪ %10‬در یکسال می باشد‪.‬‬

‫د) این نوع سهولت بانکی برای آنعده تجار است که مصروف داد و ستد پول‪ ،‬صادرات‪ ،‬واردات‪ ،‬پروژه ها و قرار‬
‫داد ها میباشد تادیه میگردد همچنان در این نوع سهولت تکتانه بانک تنها باالی مبلغ که مشتری از آن استفاده میکند‬
‫چارج میشود‪.‬‬

‫قرضه بسته صادراتی‪:‬‬

‫خریداری بل های خارجی ‪ /‬تخفیف – این سهولت کریدت برای خریداری و یا تخفیف بل های صادراتی که توسط‬
‫صادر کننده کشیده شده است‪ ،‬منحیث بخشی از تمویل سرمایه کاری میباشد‪ .‬این سهولت کریدتی به نام کریدت بعد از‬
‫انتقال محموله نیز یاد میشود‪.‬‬

‫اسناد مورد ضرورت برای بدست آوردن قرضه‪:‬‬

‫‪1.‬‬ ‫)‪ (Application‬درخواستی برای قرضه‬

‫(‪ )License‬جواز تمدید شده ‪2.‬‬

‫‪3.‬‬ ‫(‪ (By- Law‬اساسنامه کمپنی‬

‫‪4.‬‬ ‫)‪ (Business Plan‬پالن کاری سه ساله‬

‫‪5.‬‬ ‫)‪ (Financial Reports‬راپور های مالی‬

‫‪6.‬‬ ‫)‪ (Tax Payment documents‬اسناد پرداخت مالیه‬

‫‪7.‬‬ ‫)‪ (Custom Clearing Docs‬اسناد گمرکی‬

‫‪8.‬‬ ‫)‪ (Contracts‬قراردادهای دست داشته‬

‫)‪ (Registered Property Documents‬قباله شرعی ‪9.‬‬

‫اعتبارات غیر نقدی ( ‪( BGs & LC‬‬

‫‪59 | P a g e‬‬

‫لیتراف کریدت‪ :‬تعهدی از بانک است که به خریدار و فروشنده داده می شود‪.‬‬

‫وتعهد می شود که میزان پرداختی خریدار به فروشنده بموقع و با مبلغ صحیح به دست فروشنده خواهد رسید‪.‬هرگاه که‬
‫خریدار قادر به پرداخت مبلغ خرید نباشد‪ ،‬بانک موظف است باقیمانده یا تمام مبلغ خرید را بپردازد‪.‬اعتبارات اسنادی اغلب‬
‫در معامالت بین المللی به منظور اطمینان از دریافت مبالغ پرداختی مورد استفاده قرار می گیرد‪.‬‬

‫بدلیل ماهیت معامالت بین المللی که شامل عواملی همچون مسافت و تفاوت قوانین کشورها‪ ،‬اعتبارات اسنادی یک جنبه‬
‫بسیار مهم در تجارت بین المللی شده است‪ .‬بانک همچنین به نیابت از خریدار که نگهدارنده اعتبارات اسنادی است تا زمان‬
‫در یافت تائیدیه که کاالهای خریداری شده حمل شده اند وجه را پرداخت نخواهد کرد‪.‬‬

‫مزایای لیتراف کریدت‪:‬‬

‫اطمینان فروشنده از اینکه پس از ارایه اسناد حمل وجه اعتبار را مطابق شرایط اعتبار از بانک کارگزار یا تایید‬ ‫•‬
‫کننده دریافت میکند‬

‫امکان کنترول تاریخ حمل و تحویل نهایی کاالها‬ ‫•‬

‫تحصیل اسناد حمل مطابق با مفاد موافقت اولیه تحت شرایط قرارداد میان طرفین‬ ‫•‬

‫اطمینان از اینکه پرداخت وجه اعتبار به فروشنده فقط بعد از انتقال و فقط مالکیت کاال از وی صورت میگرد‬ ‫•‬

‫امکان کسب تسهیالت بیشتر برای فروشنده در مقابل اعتبار گشایش یافته برای تهیه کاالی سفارش شده‬ ‫•‬

‫تعهد بانک برای پرداخت بها در معامالت بجای فرد فروشنده‬ ‫•‬

‫تضمینات بانکی‪:‬‬

‫تضمین خط داوطلبی‪ :‬پیشنهاد تضمین اوراق قرضه به نمایندگی مشتریان بخاطر اشتراک در داوطلبی ها ویا مناقصه ها‬
‫برای بدست آوردن قرارداد ها‪.‬‬

‫تضمین خط اجرای کار‪ :‬گرنتی اجرای کار به نمایندگی مشتری ما بخاطر تضمین اجراآت شان مطابق مندرجات قرار داد و‬
‫انجام تعهدات دیگر شامل قرار داد که به عهده گرفته شده است‪ ،‬میباشد‪ .‬در چنین گرنتی ها‪ ،‬بخاطر انجام تعهداتی که‬
‫‪60 | P a g e‬‬

‫مشتری مطابق قرار داد به عهده گرفته ودرصورت قصور یا کوتاهی بخاطر خصوصیت زیاد تخنیکی موضوع‪ ،‬بانک‬
‫کدام مسؤولیتی را در قبال ندارد‪ .‬هدف گرنتی انجام تعهد صرفا ً تثبیت توانایی مالی مشتری درصورت قصور وکوتاهی‬
‫ازطرف مشتری بخاطر انجام تعهداتی که به عهده گرفته‪ ،‬میباشد‪ .‬از این رو‪ ،‬در صورت ناتوانی مشتری و مطلع شدن از‬
‫موضوع‪ ،‬بانک با درنظرداشت گرنتی ی که صورت گرفته‪ ،‬پرداخت مینماید‪.‬‬

‫تضمین خط پیش پرداخت‪ :‬تضمین بانکی پیش پرداخت از جانب بانک با در نظر داشت درخواست مشتری صادر گردیده‬
‫تا یک فیصدی پول قرارداد عقد شده که از جانب مشتری در خواست گردیده برای پیش برد پروژه خویش بدست اورد که‬
‫در چنین شرایط مشتری از جانب بانک تضمین گردیده تا مدار اعتبار جانب مقابل قرار گیرد‪.‬‬

‫تضمین خط پرداخت خدمات و یا محصوالت تحت کار‪ :‬این تضمین بانکی زمان از طرف بانک صادر میگردد که مشتری‬
‫از جانب مقابل کدام جنس را خرایداری مینماید و جنس خریداری شده تحت کار قرارداشته باشد‬

‫زمانیکه یک کمپنی از کمپنی دیگر یک پایه ماشین را خریداری نماید و نظر به قرارداد فی مابین کمپنی فروشنده و‬
‫خریدار نصب ماشین فروخته شده بدوش فروشنده میباشد در چنین شرایط یک فیصدی از مجموع قیمت ماشین نزد خریدار‬
‫تحت مسدودیت قراد میگیرد تا زمانیکه ماشین خریده شده نصب گردد تا باشد محتویات قرارداد عقد شده عملی شود دراین‬
‫صورت زمانیکه از جانب فروشنده بخاطر پول تحت مسدودیت در خواست صورت میگیرد در چنین حالت ضرورت برای‬
‫صادر نمودن تضمین فوق بوده و بانک در چنین عرصه تضمین بانکی برای پرداخت خدمات و یا محصوالت تحت کار‬
‫را صادر مینماید‬

‫صدور تسهیالت بانکی یا اعتبار نامه ها‪:‬‬

‫اعتبار نامه ها‪ :‬درصورت تضمین مالی‪ ،‬بانک وضعیت مالی مشتری‪ ،‬شایستگی کریدت وظرفیت مشتری را بخاطر به‬
‫عهده گرفتن خطرات مالی‪ ،‬گرنتی مینماید‪.‬‬

‫اسناد مورد ضرورت برای بدست آوردن قرضه‪:‬‬

‫‪ .1‬درخواستی )‪(Application‬‬

‫‪ .2‬جواز تمدید شده (‪)License‬‬

‫‪ .3‬اساسنامه کمپنی (‪)By- Law‬‬

‫‪ .4‬شرط نامه از طرف ذینفع (‪(Beneficiary‬‬

‫داشتن حساب بانکی با عزیزی بانک الزمی میباشد‪.‬‬ ‫‪.5‬‬

‫‪Azizi Bank Credit Facilities‬‬

‫سهولت های نقدی ‪1. Fund Base Facilities:‬‬

‫سهولت ها غیر نقدی ‪2. Non-Fund Base Facilities :‬‬

‫‪1. Fund Base Facilities:‬‬

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a. Commercial Loans: ‫تجارتی قروض‬

i. Overdraft: ‫جاری قرضه‬
ii. Term Loan ‫معیادی قرضه‬
B. Public Loan; ‫عامه قرضه‬
c. Staff Loan. ‫کارمند قرضه‬
2. Non-Fund Base Facilities
a. Bank Guaranties; ‫بانکی تضمینات‬
I. Bid Guarantee; ‫داوطلبی تضمین‬
Ii. Performance Guarantee; ‫کار اجرای تضمین‬
Iii. Advance Payment Guarantee; ‫پرداخت پیش تضمین‬
Iv. Counter Guarantee; ‫گردشی تضمین‬
b. Letter of Credit (LC); ‫کریدت لیتراف‬
c. Bill of Exchanges;
d. Housing loans.

1. Fund Base Facilities:

Fund based limits are where the borrower can actually draw down cash from the banks and can utilize them for the said
purposes, these can be for working capital needs (like buying stock etc) or for capital purposes (like buying plant and
machinery).

a. Commercial Loans

i. Overdraft:
An overdraft facility allows you to write cheques or withdraw cash from your current account up to the overdraft limit
approved. It is a short-term (usually up to 12 months) standby credit facility which is usually renewable on a yearly basis.
It is repayable on demand by the bank at any time.

Overdraft is a credit agreement made with a financial institution that permits an account holder to use or withdraw more
than they have in their account, without exceeding a specified maximum negative balance. Establishing an overdraft
facility with a bank can help an individual or small business with short term cash flow problems, although the negative
balance typically needs to be repaid within a month.

ii. Term Loan:

A term loan is a monetary loan that is repaid in regular payments over a set period of time. Term loans usually last
between one and 3 years, but may last as long as 5 years in some cases. A term loan is a loan from a bank for a specific
amount that has a specified repayment schedule and a fixed or floating interest rate.

Obtaining a long term loan provides a business with working capital that it can use to purchase
assets, inventory or equipment which can then be used to create additional income for the business.

b. Public Loan

This type of loan supports public and private sector investment projects in Azizi Bank.
A Public loan is a loan repayable on demand or within a period of up to 3 years. The loan is disbursed by way of single
debit to the account. The amount may be allowed to be repaid in lump sum or in suitable installments, as per
requirements/terms of approval.
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c. Staff loan

Staff loans are provided to Bank’s employees and therefore there is some employee benefit involved, this loan has a
specified repayment schedule and a fixed or floating interest rate.

2. Non-Fund Base Facilities:

In some cases the Companies are required to give guarantees etc. (backed by banks or financial institutions) in order to
manage business for e.g. to have credit period from suppliers, participating in auction parties, performing projects and
contracts or have an import order processed - in such cases the banks are liable to pay on behalf of the borrower in case
he/ she defaults.

a. Bank Guarantees

A bank guarantee is a promise from a bank or other lending or financial institution that if a particular borrower defaults
on a loan/Project, the bank will cover the loss. A bank guarantee enables the customer, or debtor, to acquire goods, buy
equipment, participating in auction parties, participating in bidding parties or draw down loans, and thereby expand
business activity.

i. Bid Guarantee:

A bid bond is a debt secured by a bidder for a project for e.g. construction job, logistics or similar type of bid –based
selection process for the purpose of providing a guarantee to the project owner that the bidder will take on the job if
selected. The existence of a bid bond provides the owner with assurance that the bidder has the financial means to
accept the job for the price quoted in the bid.
Bid bonds help the selection process of a job contract run smoothly. Without them project owners would have little in
the way of assurance that the bidder they select for a job would be able to properly complete the job without running
into cash flow problems along the way. By providing bid bonds for their respective bids, each bidder for the projects is
able to provide sufficient assurance to the owner that the project is within its means.

ii. Performance Guarantee:

A Performance Guarantee is issued by an Azizi Bank to a contractor to guarantee the full and due performance of the
contract according to the plans and specifications. A project requiring a payment & performance bond will usually
require a bid bond, in order to qualify to bid for the project. A payment and performance bond will then be required of
the winning bidder as a security to guarantee job completion. Should the contractor fail to construct the building
according to the specifications lay out by the contract, the client is guaranteed compensation for any monetary losses up
to the amount of the performance bond.

iii. Advance Payment Guarantee:

A written document issuing by Azizi Bank at the request of a customer to the owner of a contracted project or the buyer
of a sales deal, guaranteeing the applicant will fulfill the contractual obligations after the owner or the buyer makes
advance payment.

Advance payment guarantee is a guarantee that advance payments will be returned if the party that received such
payments does not perform its part of the contract.
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iv. Counter Guarantee:

Counter guarantee is a technical word to indicate the guarantee given by a bank to another bank issuing a guarantee. It
happens when, by law, a foreign bank even of good or best standing, is not authorized to issue guarantee in favor of
resident in a specific Country but only allowed to instruct a local bank to issue a bank guarantee on its behalf.

b. Letter of Credit (LC)

A letter of credit is a letter from Azizi bank guaranteeing that a buyer's payment to a seller will be received on time and
for the correct amount. In the event that the buyer is unable to make payment on the purchase, the bank will be required
to cover the full or remaining amount of the purchase. Due to the nature of international dealings, including factors such
as distance, differing laws in each country, and difficulty in knowing each party personally, the use of letters of credit has
become a very important aspect of international trade.
Azizi bank issues deferent types of letter of Credit with lowest commission rates.

c. Bill of Exchanges:

A written, unconditional order by one party (the drawer) to another (the drawee) to pay a certain sum, either immediately
or on a fixed date, for payment of goods and/or services received. The drawee accepts the bill by signing it, thus
converting it into a post-dated check and a binding contract.

d. Housing loans:

This type of loan is offered only by Azizi Bank to individuals who wish to purchase an apartment in any constructed
projected of M/s. Onyx Construction Company, as per agreement made by both parties (Azizi Bank and Onyx
Construction Company). The property is mortgaged to the lender as a security till the repayment of the loan. Onyx will
hold the title or deed to the property till the loan has been paid back with the interest due for it.

Internal Audit Training Note

An internal audit is the examination, monitoring and analysis of activities related to a company's
operations, including its business structure, employee behavior and information systems

DEFINITION:

Internal auditing is an activity;

• For helping organizations achieve their stated objectives.

• Using systematic methodology,

• For analyzing business processes, procedures and activities,

• With the goal of highlighting organizational problems,

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• Recommending solutions,

WHAT DOES INTERNAL AUDIT DO?

• Ensure accuracy of records.

• Evaluate internal controls.

• Coordinate their work with the external auditors.

• Analyze task performance in functional areas.

• Survey customers to determine satisfaction.

• Evaluate costs and benefits.

• Confirm internal and external compliance with laws, regulations,

Policies and procedures,

• Ensure compliance with contract terms and conditions.

• Compare records with physical assets.

• Review new system development projects.

• Evaluate computer and software application controls.

• Investigate alleged fraud situations.

WHAT DOES INTERNAL AUDIT NOT DO? To maintain complete independence, Internal Audit is not
responsible for performing or authorizing any of the day-to-day tasks which enable the bank to
operate. Nor is it directly responsible for the implementation of any new initiatives, even where
these arise as a result of audit recommendations. Internal Audit should, however, be prepared to
offer advice, cooperation and practical assistance to line management whenever possible.

WHY INTERNAL AUDIT IS PERFORMED OR IS REQUIRED?

It is necessary that the functions of all the departments of a Bank are subjected to an independent
checking. This checking is termed as “Audit function”, which goes through the degree of compliance
with the prescribed (approved) policies, applicable regulations and control measures existing in any
Institution.

– Evaluating whether policies and procedures are being followed.

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– Guiding or Advising Management and the Board on the critical issues.

– Monitoring compliance with Laws and Regulations.

– Assessing operations and making best-practice recommendations.

– Providing counsel (guidance) for improving controls, processes and procedures, performance,
and risk management.

– Suggesting ways to reduce costs and improve profits.

AUDITORS' RIGHTS AND DUTIES:

 RIGHTS OF AUDITOR

 Access to books and records of the company

 Information and explanations

 Receive notice of/attend general meetings

 Speak at general meetings

Compliance Department Training Note

Money Laundering Brief History:

The history of money laundering is, primarily that of hiding money or assets from the state either from
fear of blatant confiscation or from taxation and indeed, from a combination of both.

What is Money Laundering?

Money laundering is the process whereby criminals attempt to hide and disguise the true origin and
ownership of the proceeds of their criminal activities thereby avoiding prosecution, conviction and
confiscation of the criminal funds.

In simple words, it is a process through which DIRTY MONEY is converted to CLEAN MONEY.
Money Launderers clean the funds so that they are no longer traceable to any underlying criminal
activities. It also covers the monies which are legally obtained to fund terrorism or crimes.

Money Laundering refers to any transaction aimed at concealing and/ or changing the identity of illegally
obtained money so that it appears to have originated from legitimate sources, where in fact it has not”.
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WHERE DOES DIRTY MONEY COME FROM?

 Gambling
 Drug trafficking
 Smuggling
 Human Trade
 Bribe
 Fraud
 Tax Evasion
 Illegal Arms Sales

WHY LAUNDER MONEY?

Criminals Launder Money to:-

 Avoid prosecution

 Increase profitability

 Avoid Seizure of accumulated wealth

 Appear legitimate

 Tax evasion

 Fund terrorist

MAJOR 3 STAGES OF MONEY LAUNDERING

 PLACEMENT

 LAYERING

 INTEGRATION

PLACEMENT: Cash generated from criminal activities is converted into monetary instruments, such as
money orders or traveler’s checks or deposited into accounts at financial institutions.

LAYERING: The funds transferred or moved into other accounts or other financial institutions to further
separate the money from its criminal origin.

INTEGRATION: The funds are re-introduced into the economy and used to purchase legitimate assets
or to fund other criminal activities.
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COMBATING TERRORIST FINANCING:-

This is one of the major threats we are facing. Our services may be used for funding the terrorists.
Sometimes even money earned lawfully may be transferred to the terrorists. We have to be alert always
and report suspicious if any. It is guided by the Federal Law No. (1) of 2004 on combating Terrorism
Offenses and the principles underlined in the UN Convention for suppression of the Financing of the
Terrorism

WHY ARE WE CONCERNED IN AFGHANISTAN?

As Afghanistan is close to drug producing countries has a free trade environment has a modern banking
system & their branches in Afghanistan ,It is therefore a potentially attractive destination for dirty money,
particularly in cash, as most Western countries have tightened their anti-money laundering Controls.

FINANCIAL ACTION TASK FORCE (FATF) defines

Money Laundering as:

The process of criminal proceeds in order to disguise the illegal origin, it further states that: “When a
criminal activity generates substantial profits, the individual or group involved must find a way to
control the funds without attracting the attention of the underlying activity or the persons involved.
Criminals do this by disguising the sources, changing the form, or moving the funds to a place where
they are less likely to attract attention”

CENTRAL BANK OF THE AFG LAWS PERTANINNG TO MONEY

LAUNDERING

Defining Money Laundering, related crimes, actions and corresponding penalties imposed on the
violation of those laws. “Where a person intentionally commits or assists in commission of any of the
following acts in respect of property derived from any of the offenses, such person shall be considered a
perpetrator of the Money Laundering offence.
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FINANCIAL ACTION TASK FORCE (FATF):

 Established in 1989 in Paris by G-7 Countries

 Brought 40 Recommendations in the year 1990, criminalization of money

 laundering

 In 1996 revised its forty recommendations

 Following 9/11 FATF issued 8 Special recommendations on TF

 In June 2003, further revised its forty recommendations

 In 2004 one additional recommendation was added

(KNOW YOUR CUSTOMER’S COUNTER PARTY):

In order to prevent and detect criminal activity, we need to develop an awareness of our customer base. It
will help you to identify suspicious activity and be an effective tool in the fight against money laundering
and other criminal activities.

KYC ->A CONTINUOUS PROCESS:

We have to know our customer. NOT we “knew” our customer. Staff have major role to play in
monitoring customer transactions.

During course of relationship, we have to discover whether the transaction pattern is in conformity with
KYC details obtained, and what is known about the client?

THINGS TO HAVE IN MIND DURING:

‘KNOW YOUR CUSTOMER’ (KYC):

KYC has five stages:

Identification: What the client tells you?

Verification: is what the customer tells you are correct?

Do not hesitate to ask questions:

What is the precise purpose of the remittance, & how is it going to be used?

Is what the client is telling me consistent with this purpose, does it make sense?
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Customer acceptance: The point at which a new customer is accepted or rejected is the easiest point at
which the risk of dealing with illegal money can be avoided. By following good customer acceptance
policies, dealing with entities and individuals who might engage in illegal transactions can be avoided.

Customer identification: Establishing the identity of customers is central to the KYC policy both for the
customer acceptance or rejection decision and for the ongoing monitoring of customer accounts and
transactions. By identifying customers effectively, the business is able to deal with them in the
appropriate manner.

Customer verification: Verifying that customers are who they say they are is vital to any customer
identification procedure. Merely collecting customer information is not enough for an effective KYC
policy. Reliable and independent documentation should be used to support and confirm the identification
details a customer provides. For example, citing an original primary photographic identification document
such as a passport or

Record keeping

Under the AML/CTF Act, a reporting entity must make and retain a record of its applicable customer
identification procedures. The records must be retained for seven years after the end of the reporting
entity's relationship with the relevant customers. Within a designated business group, a reporting entity
may undertake this obligation for other members of the group.

Type of person

In general, domestic customers may be at a lower risk due to the easy availability of information to verify
their identities. Offshore customers, especially those who do not have a domestic business or residence,
may be a higher risk due to the difficulty in easily obtaining and verifying information about such
customers.

Offshore customers may also be classified in terms of their country of origin. This is because the level of
anti-money laundering regulation and enforcement varies considerably from country to country.

What risks are mitigated by KYC?

Let's take a brief look at the risks that can be mitigated by an effective KYC policy.

There are five types of risks that an effective KYC policy can help to mitigate:

 Reputational Risk
 Operational Risk
 Legal Risk
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 Financial Risk
 Concentration Risk

Reputational risk: The reputation of a business is usually at the core of its success. The ability to attract
good employees, customers, funding and business is dependent on reputation. Even if a business is
otherwise doing all the right things, if customers are permitted to undertake illegal transactions through
that business, its reputation could be irreparably damaged. A strong KYC policy helps to prevent a
business from being used as a vehicle for illegal activities.

Operational risk: This is the risk of direct or indirect loss from faulty or failed internal processes,
management and systems. In today's competitive environment, operational excellence is critical for
competitive advantage. If a KYC policy is faulty or poorly implemented, then operational resources are
wasted, there is an increased chance of being used by criminals for illegal purposes, time and money is
then spent on legal and investigative actions and the

Legal risk: If a business is used as a vehicle for illegal activity by customers, it faces the risk of fines,
penalties, injunctions and even forced discontinuance of operations.

Financial risk: If a business does not adequately identify and verify customers, it may run the risk of
unwittingly allowing a customer to pose as someone they are not. The consequences of this may be far
reaching. If a business does not know the true identity of its customers, it will also be difficult to retrieve
any money that the customer owes.

Concentration risk: This type of risk occurs on the assets side of a business if there is too much
exposure to one customer or a group of related customers. It also occurs on the liabilities side if the
business holds large concentrations of funds from one customer or group (in which case it faces liquidity
risk if these funds are suddenly withdrawn).

KYC – VALID ID ACCEPTABLE:

 Passport with valid Visa

 AFGHAN ID Card for AFG Nationals

 Labor Card for Non AFG Nationals

 Driving License (AFG)

As per Central Bank of the Afghanistan two documents are compulsory TZ or Passport.

What is “DUE DILIGENCE”?

 definition of Due Diligence is to take an initiative to further investigate and

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Evaluate a business/individual. The term due diligence describes a general duty to exercise extra care in
any transaction.

STRUCTURING: Structuring is the act of breaking up a potentially large transaction into several smaller
ones so that the record keeping or reporting requirements are not triggered,

This is against law and our policy. It is illegal for employees to assist anyone in

Structuring transactions to avoid the threshold limit, you need to be on the lookout for structuring so that
you can prevent it from occurring.

RED FLAGS: is a single factor that signals that a transaction is unusual and possibly Suspicious.

HOLDING RECORDS: As per Compliance policy Records should be kept and made available to
Central Bank examiners and for investigation for minimum of 7years. However the documents are
maintained for all total 10 years are per Central bank of Afghanistan.

That the objective for records keeping is to ensure that financial

Institutions are able to provide the basic information to reconstruct the transaction

Undertaken at the request of the relevant authorities

WHAT RECORDS TO BE KEPT? You must keep all records of all transactions, regardless whether the
ID of the customer or client needed to be verified. All copies of supporting documents should be
preserved in your records and the same should be easily retrievable such as customer Tazkiras, Trade
Licenses, Invoice details, Central Bank forms, Account Opening documents, Customer Profiles etc.

Where the account is open and operating and the investigations relating to unusual

Transactions are going on, the records must be retained until the Central Bank examiners or the
investigating authorities declare it completed and closed (Which may run over the prescribed minimum of
7 years)

WHAT IS MORE IMPORTANT?

Business or Compliance?

 All are equally important.

 All must be taken care of, always.

 We need Customers, NOT Money Launderers & Terrorist Financier.

 Maintain Excellent Customer Service while you practice Anti-Money Laundering

 Procedures.
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TOGETHER WE WILL FIGHT AGAINST MONEY LAUNDERING & FINANCING

TERRORISM

-Key Features of AML Regulation-

Key Features of AML Regulation:

 Banks to have adequate controls and procedures in place so that they know the customers with
whom they are establishing business relationships and dealings.

 Adequate due diligence on new and existing customers is a key part of these controls.

 Without adequate due diligence measures, Banks could be exposed to reputational, operational
and legal risks, which can result in significant financial cost.

Banks are required to:

i. Have customer acceptance policy that clearly identifies when customers are to be rejected.

ii. Have customer identification policy.

iii. Submit reports to the FINTRACA on large cash transactions and suspicious transactions.

iv. Retain records of transactions.

v. Have sufficiently trained staff to carry out their duties.

The Bank is required to have:

 Risk evaluation of the customer, products, services, geographic locations and delivery channels
as well as transactions.

 Identification and verification of the customer and beneficial owner including walk-in/occasional
customers, and politically exposed person(s).
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 Maintaining records and information obtained in the CDD process and information of
transactions.

 Monitoring of transactions, including monitoring to identify unusual or suspicious transactions.

 Reporting to Financial Transactions and Reports Analysis Center of Afghanistan (FINTRACA) of

threshold transactions.

 Reporting to FINTRACA of suspicious transactions.

 Ensuring that internal policies, procedures, systems and controls are subject to independent
testing and review.

 The appointment of a compliance officer at senior management level to ensure compliance with
the provisions of the Anti-Money Laundering and Proceeds of Crime Law and this Regulation.

 Ensuring high standards as set out in fit and proper requirements while recruiting employees.
This should include separate fit and proper requirements for employees in management
positions or in positions perceived to have greater exposure to money laundering or terrorist
financing.

 Establishing training programs and providing on-going trainings to all new and existing
employees, directors, board members, executive or supervisory management.

Banks shall consider the following factors when preparing their risk assessments:

 Customers (i.e. nature of their business, occupation, or anticipated transaction activity etc.);

 Origin and source of the customer’s funds;

 Products and services (i.e. the risks that arise from the products and services offered);

 Geographic location (i.e. countries or domestic geographic areas in which customers operate or
the place of origination or destination of transactions);

 Delivery channels (i.e. the risks that arise from the channels used to deliver products and
services).

 The purpose of an account or relationship: Risks associated with transactions, including the size
of deposits or transactions undertaken by a customer; the frequency of transactions or duration
of the relationship; whether the transactions is outside the scope of normal transactions
conducted by the customer or whether the transaction originated or is destine for a high risk
jurisdiction
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Bank shall carry out the following customer due diligence measures:

 Identify and verify the identity of the customer and beneficial owner using reliable, independent
source documents, data or information.

 Verify that any person acting on behalf of the customer is authorized to do so and identify and
verify the identity of that person.

 Understand and obtain information on the purpose and intended nature of the business
relationship.

 Obtain the customers’ tax identification number (TIN) and tax statements and in addition, in the
case of legal persons, audited financial statements.

 Monitor the business relationship on an ongoing basis and examine any transactions carried out
to ensure that they are consistent with their knowledge of the customer, commercial activities
and risk profile, and the source of funds.

 For legal persons, understanding and documenting the ownership and control structure of the
customer.

For legal persons, the following information should be obtained at a minimum:

 Name, legal form and proof of existence of the legal persons;

 Location of the principal place of business of the legal person;

 Resolution of the Board of Directors to open an account and identification of those individuals
who have authority to operate the account and names of relevant persons holding senior
management positions.

 Mailing and registered address of legal person;

 Nature and purpose of the business;

 The identity of the beneficial owner;

With respect to such legal entities identification should be made of each natural person that:

• Owns or controls directly or indirectly more than 10% of the legal entity;

• Is responsible for the management of the legal entity; or

• Exercises control of the legal person through other means.

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In the case of legal persons, Banks must ensure that:

• Business and company registration and licensing documents are current and remain valid
throughout the duration of the relationship.

• They obtain updated financial statements from customers.

• Taxation information (copy of tax returns and certification) is obtained and updated on an
annual basis.

• All transactions conducted by customers are accompanied by supporting documentation, such

as customs certifications confirming the value of the goods.

In respect of PEPs following additional customer due diligence measures:

• Obtain approval from senior management before establishing or continuing a business

relationship with such a person or beneficial owner;

• Take all reasonable measures to identify the source of wealth and funds of customers and
beneficial owners identified as PEPs; and

• Apply enhanced ongoing monitoring to the business relationship.

• Bank shall not maintain or open an anonymous account or an account in fictitious names.

• Banks shall not enter into or continue a correspondent or business relationship with a shell
bank.

Shell Bank is a bank that is incorporated or licensed in a country or jurisdiction in which it has no
physical presence:

• Banks must not carry out occasional transactions in excess of AFS 500,000 on behalf of
customers who refuse to identify themselves at all or refuse to disclose and document the
source of their funds.

“Occasional Transaction” means any transaction that is initiated by a customer who is not a regular
customer of the financial institution.

• Banks should renew/ update the KYC forms of any customer at least on yearly basis.

• Banks to monitor on an ongoing basis customer transactions and the relationship with the
customer which includes the scrutiny of customer transactions to ensure that they are being
conducted in line with the financial institution’s knowledge of the customer and the customer
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risk profile and the source of funds and wealth, and may include predetermined limits on the
amount and volume of transactions and type of transactions.

• Banks to monitor customers’ account activity, on a regular, reasonable schedule, to be able to

establish patterns, the deviation from which may indicate suspicious activity.

• If a Bank is unable to comply with the CDD required for a customer, including, on the basis of
materiality and risk, on existing customer relationships established prior to the enactment of
this regulation, they should terminate the customer relationship and consider filing a report
with the FINTRACA.

Where a financial institution is unable to verify the identity of the customer and beneficial owner(s), it
shall refrain from opening the account or commencing the business relationship or carrying out the
transaction. In such cases, the financial institution shall consider

For cross border wire transfers 50,000 AFS or equivalent in other currencies the Bank shall obtain:

• The full name of the originator;

• The originator account number where such an account is used to process the transaction or, in
the absence of an account, a unique transaction reference number which permits traceability of
the transaction;

• The originator’s address, or customer identification, or date and place of birth;

• The name and address of the beneficiary and the beneficiary account number or a unique
identification number where such an account or number is used to process the transaction.

In case of cross border wire transfers equal to or exceeding AFS 1,000,000 or its equivalent in other
currencies obtain necessary supporting documents.

For cross border transfers below 50,000 AFS or its equivalent in other currencies, Banks should ensure
that they are always accompanied by:

• Name of originator and

• Account number or unique transaction number.

• Banks must, as soon as possible but no later than 3 working days, after forming a suspicion that
any transaction or attempted transaction, regardless of value, involves proceeds of crime or
funds related or linked to or to be used for money laundering or terrorism financing, report to
the FINTRACA.
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• Banks shall report the particulars of transactions (deposits, withdrawals or transfers) in excess of
AFS 1,000,000 or its equivalent to other currencies to the FINTRACA no earlier than the first
business day of the month and no later than the fifth business day of a month following to the
month during which the transaction occurred.

Areas of Concern – Status:

Customers’ Screening

• AML Profiling Software has been configured and the process of UAT is already on. The Software
is capable of importing sanction lists and screens all the customers in the database. This shall
ensure that no sanctioned individual/entity can establish or continue relationship with Azizi
bank.

• Resources being used for screening are the following:

i. Safe Watch

ii. Thomson Reuters “world check”

iii. OFAC (Office of Foreign Assets Control)

iv. UNSC sanctions lists (1988/1267)

Customer identification and Verification

• A checklist containing all documental and informational requirements for opening accounts has
been revised and circulated to all branches.

• Format for the identification and monitoring of PEP’s, MSP & ME has also been revised.

• LCTR form has been revised to capture details of the third party depositor such as name, father’s
name, telephone number, DOB, passport/ Tazkira number and current address etc.

• A system for verification of the documents provided by the customers from their issuing
authorities has been put in place.

• All Business Licenses are verified with issuing authority at the time of opening new accounts as
also whenever updated business licenses are provided by the existing customers.

• In case of outward remittances all invoices, bills of lading and custom documents are verified
with the issuing authorities.
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• The business premises as also the activities are verified by the Bank’s officials at the earliest
after opening of the account for the purpose of business.

Closure of individual accounts used by MSP/ ME:

Individual accounts being used for business transactions:

• The bank shall not allow individual account to be used for business transactions.

• Revision of AOFs

• AOFs have been revised and necessary changes were brought into it. The AOFs have been
translated into local languages and put in practice.

• The Bank has set a target for ensuring re-KYC in 50% of the total accounts during 2017 which will
ensure that in existing accounts also revised AOFs shall be in place.

Operations Department Note

OPERATIONS POLICY:

Definition of Bank: “Bank” means a person or a financial institution engaging in the business of receiving money
deposits or other repayable funds from the public for the purpose of making credits or investments for his own
account. Or the “Bank” is a financial Institution accepting deposits for the purpose of lending and investment
and deposits are repayable on demand or as per terms of contract,

Customer Relationship Starts:

i. Account Opening: Saving Bank A/c, Current A/c, Time Deposit A/c.
ii. A person / organization that is enjoying funded / non funded facility such as Term Loan, Cash
credit/Overdraft, Letter of Credit & Bank Guarantee
iii. Agency Business: Brishna, M paisa, Western Union & so on.

Principles of Banking:

 Custodian of Public Funds held in Trust. Don’t miss use the powers. Knowing the mismanagement by Branch
Employee and keeping silent is also a Financial Crime.

 Staff Accountability: Staff is accountable for losses, frauds, cash shortages and in turn Management Board is
further Accountable to Depositors, Shareholders, Board of Supervisors and DAB.

 Customer is great. Serve him / her with Love, Care and Respect. My & Your Salary comes from the Trust of
Depositors.

Principle Duties of the Bank:

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i. Duty to Honour Cheque drawn by customers on their accounts. (endorsement ),

ii. Duty to maintain secrecy/confidentiality of customer’s accounts.

iii. Duty to render proper accounts for services rendered.

Duty 1: The bank shall honor the Cheque under following circumstances:

 The Cheque must be properly drawn on the branch of the bank where account is maintained, properly dated,
amount in words and figures expressed properly, signature of accountholder tallies with the specimen on
record, Cheque is not stale, not mutilated etc.

 The Cheque must be presented for payment on a working day within business hours of the bank/branch. No
Insurance is paid for customer transactions after working hours.

 Endorsements on the Cheque are regular and proper.

 There is sufficient balance in the account and the balance is properly applicable for payment of the Cheque.

 The relation between the bank and the customer has not been determined / terminated due to any of the
following reasons,

 Death of the drawer and the notice of drawer's death have been received.

 Drawer of the Cheque has become insolvent and/or was a lunatic at the time of drawing the Cheque.

The payment of the Cheque is not stopped by the drawer.

Instances where the bank shall refuse to honour the Cheque:

a. The balance in the account though sufficient to pay the Cheque, is not clear i.e. it consists of credits which are
not cleared/ realized

b. There is balance lying in another account of the customer either at the same branch or at any other branch
but balance in the account in which the Cheque is drawn is insufficient to pay the same.

c. Cheque issued is out of a Cheque book issued to some other account by some other branch.

d. There is sufficient balance in the account but a portion of it is earmarked for some specific purpose and the
remaining balance is not sufficient to pay the Cheque.

e. Refer the various reasons in Cheque Return Memo Cheque Return Memo.jpg

Cheque Book Precautions:

 While Receiving the Cheque Book from HO so immediately inventory the same in the ICBA system and record
in register.
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 While issuing the Cheque book to customer the same Cheque book should be issued and collected in ICBA
system the physical stock to be tallied with system record.

 AFN and USD Cheque books are designed in two different colors for convenient of Tellers/Head Teller for
prevention of fraud.

 Cheque Book to be issued for customer’s serial wise/ in order.

Negotiable Instrument:

 Negotiable Instrument is defined as promissory note, bill of exchange or Cheque payable to order or bearer.

 Negotiable Instrument is freely transferable by delivery if it is payable to bearer and by endorsement and
delivery if it is payable to order.

 Cheque is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on
demand.

 Holder in due course: The transferee – the person taking the instrument for value and in good faith is called
holder in due course and gets absolute title to the instrument, despite defect in the title of transferor or any
prior party. In case of forged instruments, the holder in due course do not get a good title as the instruments
itself is nullity.

 Parties to the Cheque / Instrument :

 Drawer, the person or entity who makes the Cheque

 Payee, the recipient of the money

 Drawee, the bank or other financial institution where the Cheque can be presented for payment

Negotiable Instrument – Bearer & Order Cheque:

 In the absence of words Order or Bearer, a Cheque is treated as an order Cheque.

 If a Cheque is drawn payable to A or Oder, must be paid to an only or to his order subject to endorsement.

 If a Cheque is drawn payable to A or bearer, may be paid to or the holder of the Cheque and here
endorsement is not required.

 Change of word Order to Bearer on a Cheque requires full authentication / signature of all drawer/s

 However Bearer can be changed to Order without authentication.

 Minor is incapable of entering into a valid contract. Minor can draw, endorse, deliver or negotiate instruments
so as to bind all parties, except himself / herself
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 Payee’s name blank : Pay ____________or order, the Cheque should be returned with the remarks “Payees
name required”

 Payee’s name blank: Pay ____________or bearer, the Cheque may be paid as the payee is the bearer.

 Protective Clause for the Amount in order to prevent fraud : Under USD 500/- or Not Exceeding USD 500

 Payees Discharge on the reverse of the Cheque is required to confirm receipt of cash. If the payee refuses to
sign on the back, then separate receipt must be asked from the receiver of the cash.

 Dishonor of Cheque is Civil & Criminal Liability & a suit can be filed to recover the amount.

Bank definition: bank is a financial institution which deposit from public and return true credit creation.

Management definition: the process of reaching organization goals by working with and trough people
and other organization recourses.

Responsible of Manager: combing and using organization recourses to ensure that their organization,

Function of Management: 1- planning 2- organizing 3- Leading 4- Controlling 5- Staffing

Accounting definition: is the art of recording classifying summarizing the business transaction is called
accounting,

Principle of Accounting: 1- Capital 2- Asset 3- Liability 3- Revenue / Income 4- Expense

Accounting Cycle: 1- Journal 2- ledger 3- Trail Balance 4- Adjusting Entries 5- Adjusted Trial Balance 6-
Financial Statements 7- Closing Entries.

Voucher: any written evidence in support of Business transaction.

Transaction: dealing between two or more than two person is called transaction.

Transaction has two kinds (cash Transaction and Credit Transaction)

Cash Transaction: where immediate cash collection or payments is involved,

Credit Transaction: where cash collection or payments are made at some future,

Pre-Paid Card: is an international payment card that is loaded with money by you or someone else
(reachable Card) like Master Card we can issue for a/c holder or non a/c holder.

Master Card: I an international payment card that is used just for a/c holder.

Promissory Note: is the simplest and earliest kind of credit instrument it is an unconditional written
promise by one person to another person
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Finance: the science of fund management is call finance.

Money Market: Money market is a financial market for short term Loan.

Finance Market: are markets in which funds are transferred from people who have surplus funds to
people who have a shortage of funds.

Financial Statement: the Statement which providers General purpose financial information about the
bossiness to the user.

Financial Statement has three kinds (Balance Sheet, Income statement and cash flow statement)

Balance Sheet: shows the financial position of the business on a specific date.

Income Statement: shows financial performance of organization.

Cash Flow Statement: shows inflow and out flow of cash clearing a particular time.

Service & Product of Azizi Bank: Currant / saving / FD Account in AFN-USD-GBP/Euro /ATM/
Cheque/Loans/Guarantees /Exchange of Money /

Definition of HRM: HRM is to make the best use of human resource to the greatest benefits of the
organization and individuals.

Basic Functions of HR: 1- Staffing (Getting people) 2- Training & development (Preparing them) 3-
Motivation (Stimulating them) 4- Maintenance (Keeping them)

Deprecation: gradual decrease in the value of Asset.

Micro Economics: use for small organization. Exp: Bank, NGO or etc

Macro Economics: use for all country effect. Exp: all gov of Afghanistan

Bank Guarantee Definition: a guarantee is undertaking given by a person to be answerable for the debt
default or miscarriage of another person.

Kinds of Bank Guarantee:

Bid Guarantee

Performance Guarantee

Advance Guarantee

Compliance Department Negative and Positive Action

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Definition of Below

Anti-Money Laundering:

Large Cash Transaction Report:

Suspicious Transactions Report:

Tens: a word tens is derived from Latin word (tempus) which means time is used to show the time.

Debt & Credit

Debtors (Account receivable) a person who owes money

Debt.to receive or to take something

Creditors (Account Payable) a person who pays out something

Credit .Means to give something

How can issue the master Card:

ACSS: Afghanistan Clearing Settlement System:

Daily Working of Branch Manager:

Profit & loss:

Tree Best Quality of Manager:

Litter to Customer:

Treasury:

Settlement:

Deprecation: gradual decrease in the value of asset is called

Insta Card:

Past Perfect:

Present Prefect:

Past simple

Present Simple