MADE BY: RIZWAN KHALID.
BBA -5- (B).
“ OTHER THEN WHOME THER IS NO GOD,ONE OF YOU MAY BEHAVE LIKE THE PEOPLE OF PARADISE UNTIL THERE IS BUT AN ARM’S LENGTH BETWEEN HIM AND IT,AND THAT WHICH HAS BEEN WRITTEN OVERTAKES HIM ANS SO HE BEHAVES LIKE PEOPLE OF HELL FIRE AND THUS HE ENTERS IT; AND ONE OF YOU BEHAVES LIKE THE PEOPLE OF HELL FIRE UNTIL THER IS BUT AN ARM’S LENGTH BETWEEN HIM AND IT,THAT WHICH HAS BEEN WRITTEN OVERTAKES HIM AND SO HE BEHAVES LIKE THE PEOPLE OF PARADISE AND THUS HE ENTERS IT.” (RELATED BY AL BUKHARI & MUSILM)
“Many people have contributed in the successful completion of this internship report. My great appreciation goes to the whole team of Askari commercial bank ltd (personal loan department), who provided me every kind of help in completion of my report. Let me also thank the management sciences facality of Bahria Institute of Management and Computer Sciences (BIMCS), for their guidance in every field. Last but not least I would like to thank my respected parents who provided me love, support, patience & good humor.”
TABLE OF CONTENTS
I went with the sale officer on daily sale calls. dedicated. there I was happened to meet with the people of different business areas (salaried. then it also includes the nature of business / profile ( industrial. commercial. his exiting limit and status ( fund based or non. result oriented team. Credit & Processing Department.e.EXECUTIVE SUMMARY
By the grace of almighty God. then his references (name. Verification Department & Marketing Analysis Department. I feel my self lucky to have worked with such a cooperative. Sales Department. I have successfully completed my 6 weeks internship as per requirement of BBA (hors) course. I also learned how to make a profile of a borrower & how is it added in the system which includes (name. agriculture. I was happened to work with all four departments i. I was lucky to work in a new department of Askari Commercial Bank ltd. weather the particular customer is eligible for the loan or not. I was appointed at Askari Commercial Bank Ltd. Then I also learned from the credit analyst how to make a scoring of the customer i. I also assist the sales executive in making the mail shots of the customers. address. In Sales Department I worked with the Sales Executive officer.e. i. address. fax etc).fund based). service or any other ). I was also
. both for the individuals and the customers. I was also send in the Main Branch of Askari Commercial Bank ltd. Collection Department. phone number. Personal Load Department. Retail Banking (Asset Team North). fax etc). and other important regarding the detail of payments and other documentation for further processing. phone number. (AWT Plaza) and was provided with the information about the working over there.e. They all helped me in every possible way they can. armed forces and other salaried). I also worked with the Credit Card Department for a short period of time. In the credit department I worked with the Credit Analyst mainly on computer where I learned how to make a borrower basic fact sheet (BBFC).
00045. I also worked along with him on the computer and learned how to make a reminder for the installments due. because few of my suggestion were given an excellent response and the Manager Asset North took great notice few of the concerned areas and reduced the stepping of the personal loans.
. and customer service calls. In Collection Department I worked with the verification officer. I also worked as a telemarketer in the personal loan department where I was engaged with the sale calls. And it wouldn’t be possible without the assistance of the team with whom I had spent 6 weeks. In Collection Department I was happened to work with collection officer. and saw the proceedings there. marketing. I went along with him in different areas of Rawalpindi / Islamabad for the collection purposes. I feel very proud. At the end of my internship I was given a major project / presentation on the features and mode of personal loans along with the recommendations. As the product was a new one so the presentation and the new techniques helped the product in a long way. who was basically responsible for the collection of installments due from the customers. At the end I would conclude that the internship had helped me a lot in the areas like (management. I also learned how to work in tough situations which would help me in a long way.000 each. whose responsibility was to verify the customers business / residence. business communication) and other concern areas of my study. I along with the verification officer went to different areas of Rawalpindi / Islamabad saw the procedure of verification. I was also happened to work in the credit card department for a very short period of time and saw their mode of work. finance. I also assist him in making the customer database (regarding the installments due).happened to visit the auditing department which is situated in General Head Quarters (GHQ) Rawalpindi. I also worked with the marketing analyst and learned how to verify a check list of the customer and make a MIS report (daily & monthly basis). and I fell very proud that I handover about 15 cases to the sales executive and personally brought about 7 cases of armed forces with a loan amount of 30. reminder call.
1997 (Act No. State Bank of Pakistan Act.
. The Banking Companies (Recovery of Loans. BANKING SECTOR IN PAKISTAN
State Bank of Pakistan (SBP) which is the Central Bank of the country has been entrusted with the responsibility for an ongoing effective supervision of the financial sector. The relevant provisions of law which vest powers in State Bank of Pakistan (SBP) to carry out inspection of banks are contained in the Banking Companies Ordinance.CENTRAL BACKGROUND
1. New foreign banks desirous of entering banking business in Pakistan will now be required to incorporate as domestic bank under the local laws. 1984 and Statutory Regulatory Orders (SROs) are the relevant legislations which cover the activities . Companies Ordinance. modarabas. leasing companies. 1956 and the Bank’s Nationalization Act. Equity participation of foreigners can be up to 49% in the total minimum capital of US concerning financial areas. existing foreign banks having less than 3 branches can have branches to the extent of maximum number of 3 only. 1974. non-banking financial institutions (NBFIs). However. XV of 1997). The financial sector in Pakistan comprises of commercial banks. mutual funds. Advances. Under the WTO commitments the operational status of branch network of foreign banks operating in Pakistan as on 12-12-1997 has been protected and frozen. Under the prevalent legislative structure the supervisory responsibilities in case of banks and non-banking financial institutions falls within legal ambit of State Bank of Pakistan while the rest of the financial institutions are monitored by other authorities such as Securities and Exchange Commission and Controller of Insurance. stock exchange and insurance companies. Credits & Finances) Act. 1962. Besides.
In every case in which the management of a bank is failing to discharge its responsibility in accordance with the applicable statutory criteria or banking rules & regulations or is failing to protect the interests of the depositors or for advancing loans and finance without due regard for the best interests of the bank or for reasons other than merit the State Bank is empowered to take necessary remedial steps. 2 Venture Capital Companies and 4 Discount Houses. The State Bank of Pakistan can. Prohibiting the bank from accepting deposits. During the year 1997 some major amendments were made in the banking laws which gave autonomy to the State Bank in the area of banking supervision. Give directions to the bank as it deem fit. Remove
. Under Section 40(A) of the said Ordinance it is the responsibility of State Bank to systematically monitor the performance of every banking company to ensure its compliance with the statutory criteria. 2 privatized banks. 1962 the State Bank of Pakistan is fully authorized to regulate and supervise banks and financial institutions. 16 Investment Banks. exercise the following powers vested upon it under the Banking Companies Ordinance Prohibiting the bank from giving loans. The commercial banks comprise of 4 nationalized banks. 15 private sector banks. 4 Housing Finance Companies. Cancel license of a bank.$ 11. Under the Banking Companies Ordinance. 20 foreign banks. At present there are 45 commercial banks and 36 non-banking financial institutions (NBFIs) operating in Pakistan whose activities are regulated and supervised by State Bank of Pakistan. The branches of foreign banks operating in Pakistan can also be converted into a local commercial bank by incorporating under the local laws and subject to a minimum paid up capital of Rs. interalia. 500 million provided foreign share holding is restricted to a maximum of 49%. and banking rules & regulations. advances & credits. The non-banking financial sector comprises of 10 Development Financial Institutions. subject to the principle of reciprocity.5 million. and 4 specialized banks.
Apply to Federal Government for an order of moratorium in respect of a bank and to prepare scheme of reconstruction or amalgamation. In addition to that banks are required to maintain SLR @ 15% of their Time & Demand Liabilities. 1997 banks are now required to maintain a minimum capital level of 8% of their risk weighted assets. Additionally. These regulations incorporate the spirit and essence of BIS regulations and are constantly watched for possible improvement so that their enforcement yields the best results to promote the objectives of supervision The State Bank is empowered to determine Statutory Liquidity and Cash Reserve Requirements for banks/NBFIs.chairman. they were required to
. Effective from 31st December. Additionally. the Banking Companies Ordinance has been recently amended which empowers the State Bank to prescribe capital requirements for banks. Winding up the bank through high court. director or chief executive. chief executive or other officer. chief executive or other managerial persons from the office and appoint a person as chairman. Similarly. Presently the Cash Reserve Requirement is 5% on weekly average basis subject to daily minimum of 4% of Time & Demand Liabilities. Supersede the Board of Directors. Caution or prohibit bank against entering into any particular transaction(s). The State Bank has framed Prudential Regulations for banks and Rules of Business for NBFIs that present a prudent operating framework within which banks and NBFIs are expected to conduct their business in a safe and sound manner taking into account the risks associated with their activities. Impose penalties including civil money penalties. NBFIs are required to maintain SLR of 12% and Cash Reserve of 1% of their specified liabilities. directors. Direct prosecution of directors. Require bank to make changes in management. In exercise of these powers the State Bank has laid down Minimum Capital Requirements for banks based on Basle capital structure. Appoint its officers to observe the manner in which affairs of bank/its branches/office are conducted.
The off-site analysis facilitates monitoring of each bank’s performance and its observance of
. Both these requirements have strengthened capital base of the banks. as well as condition within the banking system. to provide early identification of problems so that corrective action can be effected. The supervision of commercial banks is done by BSD-I & II divided equally between them. Off-Site Surveillance On-Site Examination
The objectives of off-site surveillance over the banking system are:to monitor the condition of individual banks. to target scarce on-site supervisory resources to areas or activities of greater risk. ii. The focus of the supervisory efforts by the State Bank of Pakistan is on the health and stability of the banking system in Pakistan. 1998. II and III (BSD-I.achieve a minimum paid-up capital level of Rs 500 million by 31st December. The supervision of NBFIs is done by the BSD-III. The methodologies adopted for supervision are as under:i. While the off-site monitoring aspect is looked after by the State Bank of Pakistan’s Banking Policy & Regulations Department the responsibility for the on-site examination of the banking system in Pakistan lies on the shoulders of the Banking Supervision Department. Off-site surveillance system revolves around receipt. and to assess the risk management of the bank and see its viability over the long run. The on-site function performed at the State Bank of Pakistan is carried out by the three departments namely Banking Supervision Department-I. review and analysis of periodic financial statements and statistical returns submitted to the State Bank. This has been designed to ensure that institutions operate in a safe and sound manner. II & III).
a risk-based approach to evaluations has been adopted by the bank in all its assessments. and other appropriate indicators of banks soundness. so that problems may be identified as soon as these emerge. The system also works as an early warning to identify those areas which reflect high probability of financial difficulties so that policies and corrective actions can be designed and implemented accordingly.supervisory requirements over time. In consonance with the responsibilities envisaged under the Core Principles recommended by the Basle Committee. are to be considered in carrying out the State Bank of Pakistan’s fundamental policy of subjecting each bank and non-bank financial institution under its supervision to a periodic on-site inspection. Periodic On-Site examinations of the financial condition of institutions falling within its jurisdictions remains the most effective supervisory tool in support of maintaining a proactive approach in discharge of the statutory responsibilities at the Banking Supervision Departments. The policy provides a framework within which supervisory ratings. While regulations have existed for some time aimed at convergence of the essential industry indicators to the globally accepted criteria. the On-Site examination capabilities at the State Bank of Pakistan have been substantially augmented to bring them at par with the expected international standards. The State Bank of Pakistan’s policy for frequency of inspection of banks and non-bank financial institutions (NBFIs) is designed to provide flexibility in scheduling inspections consistent with the need to maintain safety and soundness. surveillance and financial monitoring results. With a view to streamline the approach and the underlying procedures for effective and efficient banking supervision State Bank of Pakistan has very recently embarked upon a major overhauling of its own capabilities so as to bring them at par with international
. The process thus assists in making the most effective use of scarce onsite inspection resources.
. These Consultants have compiled extensive on-site and off-site manuals. In order to portray a legitimate and true financial condition of a bank the off-site surveillance system and the on-site inspection functions of banking supervision work extremely close together. As a result of these close coordination bank ratings reflects as accurately as possible. With the shift in supervisory focus from ‘compliance oriented’ to ‘Risk Assessment Approach’ State Bank of Pakistan has developed a uniform bank rating system in conformity with international standards/benchmarks. the true financial condition of a bank and the banking system a as whole. This entailed hiring of services of consultants of world repute (M/s. . Besides qualified and professional trained human resource have been recruited and rigorous theoretical and hands-on training has been provided to them. Arthur Andersen) under the FSID Project of the World Bank. Now each bank is appraised under the CAMELS/CAELS Rating System.practices.
Area manager (svp)
In charge recoveries
Manager asset (n) Credit in charge
Regional sales manager
Sales executive officer Sales executive officer Sales executive officer
Recovery officer Recovery officer Recovery officer
Credit processor (OG2)
Verification officer Verification officer
. through the use of advanced information technology and effective Human Resource Management in the modern and progressive organization culture of Meritocracy.MISSION STATEMENT
“To be the leading private sector bank in Pakistan with an international presence. delivering quality service to the clients. operating in niche markets. while maintaining the highest level of ethical and professional standards and providing enhanced value to all our stakeholders. with a commitment to good corporate citizenship”.
its operational network in line
. The bank has already being engaged in providing international visa MasterCard & co branches providing diners club credit card. The facility would also strengthen the banks management information system (MIS). COMMITMENT BANKING Askari commercial bank ltd maintained its commitment to provide most effective and personalized service to its customers. This will enable the client to use the cheque facility at any of the banks branches in the country. an institution will prosper if it stays ahead in technological advancements and constant systems up gradation to help improve the quality of service to its valued customers. 1. which is fully operational. was incorporated on October 09th 1991 as a public limited company and is listed on the Karachi.HISTORY & ADVANCMENTS
Askari Commercial Bank ltd. The bank obtained business commencement certificate on February 26th 1992 and started operation from April 01st 1992. Management placed strong emphasis on diverse base stable customer deposits. The management of the bank continued to lay strong emphasis on enhancing its abilities to offer premier financial products to its clients. In the ever increasing competition business environment. The bank had already installed its first ATM (automatic teller machine) in the year 1995 at Rawalpindi. which will have instant access to the financial and operational data of the country wide branch networks. it had already expended. The bank has also already entered into communication networking arrangements where by all the branches will be on live . The bank is also aware of its corporate activities.via – satellite on real time basis. Lahore & Islamabad. It recorded sound growth in its clientele located in all the major cities of Pakistan.
In the year 1997 the banks most emphasis area was foreign trade business. To remain one step forward of the compotators ACBL has launched several new
. customer service excellence. In 1996 the process of expanding ACBL network of international correspondent continued on the global basis with the aim of providing efficient foreign trade and exchange related services to the clients. Domestic and international financial institutions. Despite a really turbulent political condition in the year 1996 and under the low performance of the economy ACBL continued to scale new peaks in all areas of its operations. relationships with some 414 reputed banks were established. All these ATM’S and branches in the major urban centers are linked through stare-of-the-art satellite based communication system offering real time 24 hour service. telephone banking. prestigious national and international publications continued to the strong position of ACBL. A financial institution has to give due emphasis to its networks expansion because with the passage of time the graph of growth through existing network attains the point of saturation. taking the total number of correspondents to 159. Lahore. and optimum use of the technology are the hallmarks of ACBL corporate strength. and electronic banking etc. The bank has continued to strive hard to maintain a unique position in the market. ACBL is the only private sector bank that has been approved by the World Bank as a participating financial institution for the US $ 200 millions line credit sanctioned to the Government of Pakistan for the financial sector deepening and intermediations project. The safety and security of depositor’s funds. In 1996 with effect. high productivity. Rawalpindi and Islamabad. Electronic cash dispensing facilities are now available at major centre like Karachi. Askari Commercial Bank is one of the first local private banks to offer innovative products and services to its valued customers like 24 hours ATM’S (automated teller machines).with its corporate strategies to have its presence all major cities of the country to enable it to respond promptly and effectively to customer needs.
This communication network has enabled the bank to provide on-line real time banking facilities to its customers. In this regard the bank continued its emphasis on employing the latest technological tools to improve the operations and customer services. throughout the country. for verification purposes. BRANCH NETWORKS Askari Commercial Bank ltd had its wide network of branches in every part of the county. were explored with a view to diversity and broaden the assets base of the bank. ACBL is proud to be the first bank to have established countywide communication network based on VSSA & Radio Modems Technology. To meet the challenges of 21st century ACBL is planning particular application in the development of information technology. In the year 1999 the condition of the foreign exchange markets were remained unfavorable for the bank. 2. In 1995 there were 18 branches of ACBL . with in and outside the money and foreign exchange market. In such a situation. During the year 1996 ACBL added 5
. Investments in T-bills were gradually reduced and alternative avenues.Askari Commercial Bank ltd in very particular in opening the branches at appropriate time and in the area where the bank found the feasibility & profit. The whole credit card operations is being carried out prudently and ACBL is proud to report that it has been successful in establishing a solid foundation on which to base future growth. The on-line communication system allows the customers the facility of carrying out their normal banking transactions through the nearest convenient branch irrespective of where their account is placed. presently at 11 different cities of country which is expected to increase to the other cities as well. This on-line banking facility has been made most sophisticated due to the high speed electronic transfer of signatures.products during the year 1999 including credit card in the consumer banking segments. the bank had to react decisively to minimize the impact of these adverse market conditions on its treasury operations.
which is the highest rating given to any bank in Pakistan in this category but also able to improves its rating AA. The Peshawar road branch in Rawalpindi had already stated its operating activities (which was opened on 11th Sep 2001).The bank continued to consolidate its operation during the year 1999.
CREDIT RATINGS ACBL gained recognitions by the bank at national as well as international level.in the long term category. During the year 2000 a new branch opened in Quetta cantt.new branches and the tally reached up to 23. In short the bank is full aware of the market dynamics and is implementing the necessary changes in the strategies to maintain the growth momentum for meeting the expectations of its valued customers and stake holders. In addition. The South Asia Federation of Accountants (SAFA) gave Askari Commercial Bank ltd. In the sector of SAARC region which speaks volume about the banking professionalism. Work is underway to open further new branches. However. the new branch would also reduce the heavy load on the main AWT plaza branch. Apart from tapping new sources business and deposits. The bank has also been given Asia money (1994 & 1996) and Euro money (1995) awards as the “Commercial Bank of the Year “and “Best Domestic Bank “ respectively. thereby enabling the bank to improve further standards of services and customer satisfaction. ACBL had currently 29 branches which are widely spread over the major cities of Pakistan.
. In the year 1997 Askari Commercial Bank not only managed to maintain the short term rating of A+1 given by PACRA (Pakistan credit rating agency) . the booth I the GHQ – Rawalpindi was converted in to branch which increased the number of branches to 28. and did not went for any major expansion in the branch networks. the award of “2nd Best Reporting Company”.
Bank of Khyber. This is a medium term loan and is repayable over a period of 5 years through quarterly payments. Islamabad. NADRA.4 billion for National Database & Registration Authority (NADRA) for the creation of a national data warehouse. Other syndicate members are NBP. Kalim-ur-Rahman. Soneri Bank. ACBL & Maj. on November 0l. Pak Libya Holding Company and Employees Old Age Benefits Institution. Union Bank. The facility is parked at ACBL's Blue Area Branch. LOAN FACILITY Askari Commercial Bank Limited has arranged a syndicated loan facility of Rs. General Zahid Ihsan. This financing is reportedly the second largest syndication in the history of Pakistan and the first to be arranged and led by Askari Commercial Bank Limited. Bank Alfalah. 2000. a syndicate signing ceremony was held at the NADRA.4. attended among others by Mr.
. Chairman. Standard Chartered Bank is the co arranger. Islamabad. In this connection. President & Chief Executive.
In the year 1995 the bank enjoyed a pre-profit of Rs: 450 millions. The bank had continued to a steamy progress and had ground footed in the world of banking. The data is taken from the annual reports & from internet. Here is a view about the operational and the financial activities of the Askari Commercial Bank Ltd. with a growth of 36 % in its assets.8 billions.OPERATIONAL & FINANCIAL HIGHLIGHTS OF THE BANK (95-2000)
Askari Commercial Bank Ltd has continued in his progress of sound footing. The bank registered 40 % growth in its deposits base which increased to Rs: 9. With the well-defined and strong strategy of the bank is aimed at to maintain high level of professional standards and also to optimize the human and financial resources to respond effectively to the rapidly changing changes in the financial sector. The graphical representations of financial highlights are as under:
Funded advances of Rs: 7. During the year 1995. The banks guiding philosophy towards risk management is to make it an integral part of the banker’s decisions. The bank has made reasonable investments both in information -technology and human resource to support its risk management process. the bank made significant headway in enlarging the size of its assets base to build up its quality earnings while maintaining adequate liquidity and ensuring the quality of assets.03 billions were outstanding. and managing risk is the key to success.35 30 25 20 15 10 5 0 2000 1999 1998 1997 1996 DEPOSITS
60 50 40 30 20 10 0 2000 1999 1998 1997 1996 EXP&IMP
Risk is inherent in the financial services business. sartorial composition of which were:
40 35 30 25 20 15 10 5 0 2000 1999 1998 1997 1996 ASSETS
The bank continued to enhance its correspondent banking relationship to effectively respond to customer needs.MAN EXP SER IMP RET TRA
i. v. The bank transacted export & import business of Rs: 17.7 billions in the year. as against Rs: 11. The management lays due emphases on diversification of its assets to avert industry and group exposure. iv.9 billions during the year.
Manufacturing sector Export financing Service sector Import Retail sector Trading sector
39 % 37 % 11 % 8% 3% 2%
As a matter of policy. the focus of the assets portfolio is on short term trade related financing on a secured and self liquidity basis where by major portion of credit portfolio has a maturity pattern of less then one year. iii. Management
. posting a growth of 53 %. ii. In the year 1995 the bank has correspondent banking arrangement with115 banks of repute al over the world.
The balance sheet footing of the bank attained the level of Rs: 30.3 millions.5 millions as compared to 75. earned a pre-tax profit of Rs: 582 millions. The second right share issue holders of the bank. which will be entitled to reduce the bonus.5 millions in 1994. as compared to Rs: 67. The amount of 90.1 millions in 1994. The share holder’s equity increased from Rs: 893 millions in the year 1995 to Rs: 1581 millions in the year 1996. the bank transected exports and import business to the tune of Rs: 19. has been transferred to the saturatory reserve fund. This enhanced capital equity ratio.
20 15 10 5 0 2000 1999 1998 1997 1996
(1996) Askari commercial bank ltd.0 millions to the general reserve fund and appropriation of Rs: 74. The share holder equity increased from Rs: 720 millions to Rs: 893 millions. higher by 29 % over the last year profit of 450 millions.9 billions at the end of 1996. towards the bonus share of issue @ 10 % to its shareholders. The assets gross are 40 % over previous year of Rs: 17. Rs: 12. The performance in export sector. this shows a rise of over 77 %.Thus placing the bank in a comfortable position to expand its balance sheet.1 billions in 1996.3 billions as against last year
.believes that a strong capital based is critical to enhance its ability to execute its strategic plans. the payment date which was extended to Jan 1996.9 billions in 1995 to Rs: 14. The stimulus to the assets base was provided by customer deposits which went up by 45 % from Rs: 9.7 billions a rise of 35 % over 1995.
9 billions and secured guarantee business of more than Rs: 4. The aggressive. bank total advances at Rs: 9. At the same time. the previous strategy had to change quickly to achieve marketing for more loan business.7 billions in the year 1996 as against Rs: 2.1 billions to Rs: 13. By the end of the year the assets base of the bank expended to the level of Rs: 24 billions registering an increase of 35 % over the previous year.6 billions. total investments in government paper were reduced from 13. Theses two measures cushioned the negative impact of the drastic reduction in the treasury bill rate on the banks portfolio.8 billions in 1995. and enhance the credit exposure against the blue-chip corporate clients. As
. but prudent policy led to an increase of over 35 % in the advances portfolio.8 billions which enabled them to expand the balance sheet.) (1999) As a result of banks profitability came under tremendous pressure.4 billions to 8.0 billions.(due the liquid market and low credit demand).a. but were not enough to offset the entire impact because the lending rate for advances also came down by an average of 2 % p. (Note: 1998 The annual report was not provided due to certain reasons. during the year 1999. The bank in the year emphasized on further broadening core foreign trade business translated in to the handling of higher volume of export and import business of Rs: 26 billions registering a growth of 34 % over the previous year. The banks deposits grew by 38 % to attain the level Rs: 19. (1997) The earned the pretax profit at Rs: 755 millions recorded impressive growth rate of 30 % over 1996. The net worth of the bank in the year 1997 was further expended to Rs: 1.business of Rs: 17.8 billions registering an increase of 91 % over the last year.5 billions recorded growth of 27 % over the previous year. In 1997.2 billions at the end of year 1997. from Rs: 10. The investment portfolio of the bank soared to Rs: 11.
6 millions to Rs: 17.002 billions (24. Exports business handled during 1999 increased by 14 % over the previous year. total balance sheet footing crossed Rs: 37 billions.4 billions during the year.056 billions. the banks deposits increased from Rs: 23.836 billions (37 %).6 %) to cross the barrier of Rs: 30 billions mark. from Rs: 20 billion to Rs: 22. and a committee based sanctioning and review mechanism.0 billions.3 billions from Rs: 28. the bank had to market aggressively for additional business to increase volumes. and total assets rose to 2.5 billions registered an increase of 51 %. The expansion of the credit portfolio was done on a prudent basis. this portfolio level can be termed as satisfactory. while the imports business increased from Rs: 11.4 billion to Rs: 24. loan and advances increased by Rs: 4. In the view of the prevailing market conditions. to Rs: 17. and all necessary measures were taken to ensure the quality of the new loan booked. registering a growth of over 8 %. (2000) Despite the challenges facing by the economy the banks pre-tax and preprovision profits increased from Rs: 814 millions in 1999 to Rs: 887 millions in the year 2000. comprising of well designed credits appraised procedures. Under the circumstances. was further strengthened for the purpose of ensuring safety in the lending activities.a result the bank achieved a pre-tax profit of Rs: 712 millions as against Rs: 854 millions in the previous year. Even so. The bank posted a healthy increase by improving its market share. from Rs: 13. The evaluation system.8 billions. the bank discouraged mobilization of high cost deposits and surrendered over Rs: 2 billions of government funds because they also feel in this category. there by registering a healthy growth of 20. To off set the much reduced market spreads / margins arising from the intense competition between banks for limited good risk business available. Consequently the deposits grew by Rs: 6.838 billions.7 billions to 31.1 % over the preceding
6millions for the year 2000.5 billions during 1999 to Rs: 26. After accounting the taxes.8 billions to Rs: 30.6 billions.20 per share for the year 2000. Consequently. the portfolio before tax increased from 712.7 % from Rs: 17.7 % from Rs: 864. as a percentage of total loans and advances.year. by an effective management of and a reduction in the cost of funds.2 % from Rs: 22. so the information was not developed.7 millions in 2000. the non fund based earnings of the bank increased by 19. an increase o 11.
.6 millions. The bank tried to maximize the fee based earnings and opportunities.8 % over the preceding year (1999…. Despite provisions against non-performing advances decreased.3 millions in the year 1999 to Rs: 921.4 millions for 1999 to Rs: 751. Consequently the earning per share increased from Rs: 2. to 0.75 % for the year 2000.7 % from Rs: 538. This was achieved despite the rate volatility.> Rs: 284. in order to proactively reduce margin / spreads. under very difficult circumstances. the export business increased by 34. so the over all bank is being discussed).The bank import business grew by 49. Note: (The branch of personal loan department was officially opened on 11th Sep 2001.78 % last year. from 0.7 billions in the year 2000. to off set the impact of the reduced gross fund based earnings arising from the reduced mark up rate during the year. As a result.86 per share in 1999 to 3. The net fund based earning increased by 6.9 millions in the year 2000. Hence the bank recorded a substantial growth during the year 2000. At the same time.7 millions in 1999 to Rs: 644. the profit for the year stood at Rs: 315.4 millions).
424 2.046.980.249.026.588 436.000 147.154.667 315.800 2. HUMAN RESORCE MANGEMENT The competitive arena of banking is changing fast banks have to identify the contemporary needs of the customers in order to equip and train the staff to meet those requirements. Human resource development and training is also integrity of the
ASSETS LIABILITIES NET ASSETS 2000(Rupees in '000) 37.925 644.094.420
HUMAN RESOURCE MANAGEMENT & MARKETING HIGLIGHTS OF THE BANK
1.174 1999 (Rupees in '000) 864.355 35. The bank regards talent and professional competency as the major function for the development of banks corporate culture.845 28.000 172.335 538.446 430.590 110.421
Net Interest Income Fee Based Income Net Profit Taxation Payout (Cash Dividend) Earnings Retained 2000 (Rupees in '000) 921.439 168.555 1999 (Rupees in '000) 31.733 282.
Treasury management. the appraise is also involved in the appraisal exercise. General banking. The policies were aimed at introducing modern management concepts and achieving a high level of staff satisfaction and motivation. The training area of the bank organized and arranges the training courses in the areas of: i. Human resource development & management is put in a high priority in our bank (ACBL). The system hoped will go a long way in motivating the staff and improving their performance. v. while at the same time developing a progressive and dynamic corporate culture for (ACBL). iv. ii. Management information system.banks corporate policy. Numbers of development are also taking place in the human resource policies. iii. Management trainees and executives of the bank participated in number of trainee courses. Credit analysis. One of these policies change is the introduction of the modern performance appraisal system which replaced the previous annual confidential. and as a part of business commitment to the development of human resources. the bank has instituted its own training facility under the management of a senior banker. The executives and the officers of the bank were also nominated to programs offered other agencies with in Pakistan and abroad. vi. Foreign trade. who has a vast experience in the area of training and development. Export & imports. workshops and seminars to enrich their professional knowledge and to keep them abreast of the latest market development.The bank is armed with the talented professionals. Under the new system introduced. reporting system. In order to strengthen the operational and
The department uses the mail shots & telemarketing as a tool for marketing. The sale executives were given the responsibility to send the mail shots the target customers along with the phone calls. 2. The training and research wing has been beefed up and now is in the process of actively conducting training secessions all year round to enhance professionalism and employee development. enhance branch demand and ensure brand loyalty.technological capabilities of the employees. The telemarketer is being provided with the data base of the customers he just pick-up the names and make
. Now the banking products offered by the bank are being increasingly “branded” in order to emphasize product (brand) differentiation create brand recognition. in order to identify area which requires improvement. When the replies comes the sale executive visit the customer and record the particular information about the customer and provide him with the loan of his category. In case of the personal loan department where I done my internship there was no as such marketing department the extensive marketing plan was about to implement. In the year 2000 the bank increased its focus on providing in-house training and staffing. The increase of job rotation and job enrichment and other initiatives are underway to enhance the staff satisfactions which will no doubt translate in to better customer service. as well as product / brand image. Anonymous checks of customer service standard at brands are being done and now almost each brand has a customer service. MARKETING Executive efforts have been made to increase the press coverage and advertising to create and market the banks corporate. particularly in customer service standards and to identify the staff training needs. ACBL has also introduced inhouse training courses and seminars. Another way of marketing is through the telemarketers who gives daily calls to the customer and inform them about the salient features of the product (personal loans).
S. The target markets of the product are being divided in to: i.
. Government.daily calls.com. Now the branch is planning to spend more on marketing and they were about to launch a shop-to-shop campaign to introduce the product to the people. ii. Askaricommercialbank. MNC. Armed Forces. iv. but there is very information about the product.pk). iii. Other Salaried. The products advertisement was successfully launched at internet (www.
The pin can be changer at anytime at the request of the owner. This card is the electronic purse which provides you easy access to your cash requirements wherever and whenever you need it. Be sure to keep the black strip down and to the right follow the arrow mark. When the message displays. which is easy to use and readily available where ever you need it. The major product line of the bank can be described as under:
a. INDUSTRY & COMPETATORS ANALYSIS
1. The procedure of the borrowing from ATM‘s is as under: There is a 4 digit pin number which is confidential and should be kept secret.
Ask cash offers convenient Automated Teller Services. PRODUCT LINES Askari commercial bank has already looking forward in introducing new and more innovative products t its valued customers. The ask cash card is the key to 24 hours banking facility extended by the bank.MARKET. And also engaged in bringing significant changes in the redesigning of already available products. to make it more feasible and attractive for the customers. ASKCASH is Askari commercial banks commitment to provide convenient banking to its customers. First of all insert the ASKCASH CARD in the slot. all over the country through the ASKCASH ATM’s. enter your personal ID NO (PIN) by using the keyboard press one of the selection key from
It is engaged in providing its customer with the services over a thousand of location in Pakistan and over 14 millions of establishments’ world wide. you would get the following compensation which is as under:
. regardless of the currency of purchase. FINANCIAL INTITUTION SPECIAL DEPOSIT ACCOUNT
Askari commercial bank has not only provided the account facility to the customers.the menu of available transaction and withdraw the amount.
ASKARI BANK’S MASTER CARDS
Askari banks master card had world wide acceptability. Askari master card provides with the facility of revolving the spending at comparatively less service charges. In addition. but also it is providing a high yield chequry accounts to the financial institutions. the same ratio also applies to cash advances obtained on Askari master card. As a convenience. Whenever you purchase a ticket for your air traveling for the international flights on Askari master card. but also would reduce the risk profile. Remove the card with in 15 seconds otherwise it will be captured or retired by the machine. Through this practice the financial institutions would not only be able to meet the short term debt requirements. the customers are provided with the benefit of receiving the monthly billing in Pakistani rupee.
c. There would be no joining fee for getting the card.
Up to Rs 20.5 billions. This is a new deposit product which was offered in the year 2000 and it is going smoothly up till now.
ASKARI BANK VALUE PLUS
Askari commercial bank’s value plus deals with the innovative saving account. In case of loss/ stolen card there would be no liability against its fraudulent use and a new replacement is made with in 48 hours. It has a now a unit operating in Karachi. as at the end of 2000. MERCHANT BANKING DIVISION
Merchant banking division became independent in April 1999. which had not only come up with one the innovative product but also had reduced the monthly deposits. During the year one more success of the merchant banking division
Up to Rs 10. Askari master card has a 24 hours customer service.i.5 billons and Rs 6.
e.000/. with a portfolio of about Rs 2.000/.insurance cover for flight/ delays exceeding 6 hrs. ii. Up to Rs 10. which is also one of the hallmark of the bank in the year 2000.
d.000/.3 billions respectively.
f. to market service based customers more effectively. iii. ASKARI ADVANTAGE
Another important product in the Askari bank portfolio is Askari advantage which deals with the highest yield of one month deposits along with the roller over facility.as baggage loss claim.insurance cover for baggage delays exceeding 6 hrs. and had its approved limit and disbursement in excess of Rs 7.
It would provide a better facility to the customers of remote areas and they can have an easy access to their cash. Through the ask net facility the customer can withdraw the money from any area of the country. This reflects not only the banks commitment toward its customers but also shows the banks advancement in the field of banking. in which the branches of the bank are interlinked with one another through (net).
g. This is reportedly the second largest syndicated in the history of Pakistan and first in which the bank as an agent as well as head. ASKARI LINKS
Askari commercial bank ltd is also providing the automated telephone facility. The facility provides the necessary assistance
i. which is opened 24 hours.
h.was a syndicated loan facility of Rs 4 billions for ‘National Data Base and Registration Authority’ (NADRA) for creation of national database workhouse.
The bank is also engaged in on-line inter bank facilities. ASKARI SPECIAL DEPOSIT ACCOUNT
Askari commercial bank also provides with the special deposit account with the high yield of checking facility for the customers.
j. vi. The basic eligibility for the borrowing of loan is described as under: i. If self The borrower had to provide last 6 month bank sheet. ii.000/-.000-3000. employed for last 6 months.
. Rawalpindi & Islamabad. vii. The age of the borrower must be in between 21-57. The borrower must be having a land line office & residence.The main objective of the department is to provide loan to the low income consumers at very easy installments. The loan amount ranges from (30. This would help the customers in getting easy and round the clock access the needed information whenever they need it. v. in business for the last 1 year. The amount will be given as per grid. ix. The borrower had a verified min gross monthly income of Rs 15. residing in Karachi. The borrower must be living in the positive area. Salaried. A resident Pakistani. 000) respectively. with 3 month in current position.& guidance to the customer around the clock. iv. The borrowers’ debt burden must not exceed 35 %. iii.
ASKARI BANKS PERSONAL FINANCE
Askari commercial bank had recently opened a new branch at Peshawar road and where the personal finance department has been opened successfully . viii.
he made scoring of the consumer and then at last the file is singed by the assets manager and the senior vice president of the branch. The whole processing is described as under: First of all the sales executive visits the consumer and collect the necessary documents from him. and by the end of year was successfully launched innovative consumer banking products developments to meet individuals customer needs. It will also improve the sustainability of the banks earnings. The installment for the loan ranges from 1-3 years depends upon the grid. by increasing our focus on generating relatively low-cost deposits and new high yielding personal finance products. the file is put forward to the verification officer for business / residence verification purposes.If the borrower fits in to the criteria he would be eligible for the loan. if documents are completed. if so the further documentation would be carried out. who had a basic borrowers fact sheet with him. The collection officer is then responsible to make sure that the installments are paid in time or not. and after getting it approved from the sales processors the file is send to the credit analyst.
. Then the file is send to the main branch where the cash is collected on other day. After the verification is done the file is checked by the sales processor. (The documents for the personal loan are attached at the end). RETAIL BANKING DIVISION
During the year 200 the bank organized a retail banking division group.
k. and will add a new dimension to the banks business portfolio. This business is expected a high growth in the year 2001.
ELOCTRONIC TECNOLOGY DIVISION
The electronic division has been constantly striving to provide enhanced value added features in the existing and new products and services to the customers.000 will be financed. The registration cost. Documentation charges would be Rs 3. Insurance will made by the company which will be mandatory. 48.non-refundable process charges.
Askari leasing offer its consumers the most effective and affordable vehicle financing scheme “ASKAR” to help the buyers to buy a brand new car. All you have to do is to submit the complete application form along with the copy of NIC & a passport size photograph. Askars ‘no eligibility’ clause automatically qualifies you to own a new car of your own choice. and the disbursement would be made after the completion of all legal documentation.l.
.inclusive of Rs 1000/. All rentals would have to be paid in advance on the first day of every month.000/. CVT (CAPITAL VALE TAX). The new vehicle of any brand valued up to 100. 60 months with the findings up to 75 % of the vehicles cost. And the company reserves the right to disapprove lease request. where the first years insurance will be taken front. without assigning any reason whatsoever. and other costs will be borne by the borrower. and the financing period can be 36.
national companies. There are 45 private commercial banks. All of the above mentioned variables are under the observation of the bank. development financial institutions (DFIs) and housing finance companies. Is identifying the wants of the buyer and then make strategies accordingly. ( 40 % ) Multi. The main emphasized area of Askari commercial bank ltd. ( 30 % ) Armed forces. leasing companies. TARGET MARKET Market basically consists of the buyers & buyers differ in one or more respect. and many other cities of the country. It had branches in Lahore. ii. Rawalpindi. GROWTH RATE (entire industry) The financial structure of Pakistan can be broadly recognized in to scheduled banks and non-banking financial institutions (NBFIs) _. 15 privatized commercial banks. buyer’s attitude and buying practices. geographic locations. 9 nationalized commercial banks and 20 foreign banks. Islamabad. iii. modarbas. The commercial banks along
. 3. Salaried personals. The NBFIs are composed of investment banks. their purchasing power.2. Hyderabad. ( 30 % ) Askari commercial bank has also spread its area geographically in different areas of the country and is still carrying on the good work. mutual fund. For this purpose Askari commercial bank has divided the market in to 3 different areas: i. The market segmentation also depicts the wants of buyer. And many new projects are underway. Askari commercial bank is fully aware of its competitors and is engaged in offering the innovative and better products & services to its values customers.
The major privatization goal of the government for the financial and bank sector are mainly to develop a sound and efficient banking system with the capacity to mobilize saving effectively and allocate them to the most economically
.1 1587.8 246.8 GRAND TOTAL 1071. The processes.with all the NBFIs for modarbas and leasing companies are governed by the state bank of Pakistan (SBP).1 98.3 75.1 86.6 138.9 255. In the early 90’s the government took bold steps to reform the financial & banking sector.9 644.0 5.2 Privatized Banks 204. By the late 80’s it was apparent that policies of nationalization. for private local bank. and 20 % p.7 Institution Bank Advances 261.8 93. What was even more worrying was the state of the financial sector. through its prudential regulations. However.6 Total 839.1 Investments Total Assets 172.a.9 FOREIGN BANKS 231. which generate economic growth.9 293.6 Bank Branches 4772 2201 534 542 8049 81 8130
Source: State bank Annual Report 1998-99
The average return on ROE from 1997-98 for foreign banks was 23 % p. particularly in the context of the financial and banking sector. during 1998-99 sector of ROE reduced considerably due to a downturn in the economy. pricing and prudent lending. had failed.1 1294.8 655.a. The banking sector has been growing an average rate of 20 % per annum over the last five years and comprises of the followings:
Bank: .0 Specialized Banks 16.1 Private Sector Banks 151.2 113. were slowing down.0 77. It was decided to deregulate the financial market and to allow the new private sector entities to setup financial institutions and private domestic were set up under the initiative.(Data as of end June 1999 (in Billions of Rupees)
Bank Deposits NCBs 468.1 60. The social sector uplifts driven policies of the state controlled financial institutions were unsuitable for efficient resources allocation.2 402.3 326.3 530.
The major competitors in case of offering the personal loans are:
. Privatization is thus pursed in Pakistan as part of a coordinated strategy integrating deregulation. These measures includes strengthening the SBP. introducing new prudential regulations and information disclosure requirements. segmentation. Historically spreads have remained between 5to 8 % until 1998.productive uses. To foster competition and innovation in the banking system to reduce intermediation costs and promotes the introduction of new financial products & services. The NBFI s cater to long medium term financing requirements with the investment banks barred from short term financing activities that continue to be the domain of the commercial banks. Theses have come down to about 4 % in 1999 primarily due to the economic pressure. However. efficient players have maintained high profitability to improve the operational efficiency and overall performance of Nationalized Commercial Banks. advertising. Infect. time to launch a new product.
4. most of the nationalized commercial banks. strengthening legal and judicial processes and removing subsidies and distortions to create a more efficient market based capital pricing and allocation system there by reducing the cost of financial intermediations.
Askari commercial bank is fully aware of its competitors. The bank had to consider the areas including (product design. However the boundaries will blur a bit as the SBP has allowed commercial banks to undertake long-term financing as well. privatization and good governance under the broader umbrella of financial and banking sector reform. since nationalization have used as vehicles for targeted sect oral development aberrant with little success. target market. time for necessary changes & constant over view).
000.000 to Rs. Citibank Personal Loans presents the perfect solution. CITI BANK
Citibank Personal Loans. Lahore or Rawalpindi/Islamabad. iv.000.a. ii. iii. 24. Whether you want to go for an overdue family vacation or get the ultimate in home entertainment or simply renovate your home. 36 and 48 months financing period. x. 25. HABIB BANK
. Your age is 21 Years or above at the time of financing (25 years for self employed businessman). vi. Your age is less than 60 years at the time of loan maturity (65 years in case of self employed businessman). ix. Loan amount from Rs. 500. Processing fee is Rs. 12. xi. 2. you can use the loan for absolutely any purpose! Loan disbursal in 10 days! You have been employed or self-employed for the last one year. a simple solution for your short term financing needs. The core program of Citi bank is as under: i. No end-use defined i. 12.000. You reside in Karachi.30 %. vii. Your verifiable gross monthly income is Rs. v. Mark up rates vary from 20 % . viii.e.
through easy and affordable monthly
c.000/. Low rates. We can help you finance them with Habib Bank Flexi Loans. viii. iii. ABN AMBRO BANK
. v. it is becoming increasingly difficult to make expensive purchases or meet unexpected expenses. Flexible tenure: 12. Fill in an application form. You may avail a personal loan of up to SIX TIMES of you net take-home salary subject to a maximum of Rs. we help you finance. ii. or 36 months. vi.provided you work for an organization approved by HBL. Credit Life & Disability Insurance. x. Installments. 24. Repayment installments. Repayment through easy and affordable monthly. Submit it to the designated branch. Credit Life & Disability Insurance. iv. vii. ix.300. The features of the opportunity are as under: i. No processing fee.With the rising cost of living. You determine the need.
ABN AMRO Pakistan boasts an extremely diverse and demanding corporate and financial institution’s customer base. And as such, they have developed products and services that focus on meeting these specific needs of our customers. In essence, the bank believes that these products and services have been a direct outcome of years of interaction with and feedback from our customers in Pakistan and around the glob. The local and regional product management units meet regularly to improve upon and introduce state of the art products and services to help keep in line with the changing needs of our customers. The bank have also developed strong strategic liaisons with other external solution providers (local banks, couriers, security companies, etc.), and are able to extend our domain into areas where we feel niche suppliers provide advantages which we can extend to our corporate customers. The salient features of the banks personal loan are stated as under: i. ii. iii. iv. v. vi. A maximum of Rs: 400,000 and minimum of Rs: 50,000 can be provided. The payback period is over 1, 2, 3 & 4 years. A free current account at ABN AMBRO and access to the loan through the ATM’s and non-stop banking centre. Home finance loans are also provided. A maximum of Rs: 7,000,000 to buy a dream house with a payback of 3-15 years. A maximum of Rs: 7000,000 to build a dream house with a payback of 3-15 years.
Although Askari Commercial Bank Ltd. (personal loan department) is progressing smoothly, but there are few problem areas facing by the department, which can be solved be solved through complete coordination, dedication. The main problem areas of the department are stated as under: i. The marketing plan of the product (personal loan department) is perhaps not as
effective as it must have been. ii. iii. iv. The sale volume of the product is not picking up. The daily office work is not completed under the office hours. The employee attitude, perception & behavior towards the top management are not
healthy. v. vi. vii. effectively. viii. There are too much steps involved in getting the loan. The feed back process from the customers is lacking in the personal loan department. There is lack of coordination among the employees. The research and development department is not performing its job
opportunities of advancements. the workflow inter. involvements in community. iii. Extensive research is also important in this regard. Like in case of personal loan there should a proper coordination between the telemarketer and the sales executive for the daily sale calls. ii. client systems. 00 which the official closing time. The bank should look new systems processes.
. iv. superiority in the organization. The bank must lays a great emphases on the over all marketing strategy. There should be a proper coordination between the coworkers. The bank should use the electronic & print media as much as it can. to get a desired result in the
sales area. the over work
reflects that the particular organization is not efficient and effective. The office should be closed at 5. coworkers. who is responsible to collect the monthly installments. procedures. only then the organization could achieve its short term and long term objectives.dependencies. because it’s one source through which people would come to know about the particular product. The attitude. participation in decision making. rewards provided by the organization. the
competitors are faraway head in marketing department. and also there must coordination among the sale executive and the collection officer. v. civic and other social groups & view on taking time of the job. The department can cut cost in one area and spend this extra cost on sales. perception & behaviors not only toward the organization but also toward
the management should be productive one. The management had to look at the nature of work. the recommendations are as under: i.Following alternatives could be adopted in order come up with the problems. so that the desired
results could be achieved.
The reduction in the stepping would definitely increase the force of customers. and the copy of tax return should also be overlook.
The R & D department should perform its job effectively in order to boost up the
performance of personal loan department. There should be a decrease in the stepping. vii.vi.
. the (bank statement) point could be
reduced form 12 months to 6 months.
marketing & financial
. Then I focused on the companies operational. Then I gave the introduction of the banking sector and the organization. financial.FINAL WORDS
I started my report from the executive summary where I discussed about my position in the personal loan department.
areas. At the end I came up with few problems and their recommendations. Then I did the market.
. industry & competitors analysis.
(Www. Tariq javed guman (manager asset
. Habib Bank & ABN Ambro Bank.
The information regarding the “Growth for Entire Banking Industry” is being
collected from the privatization commotion site.
The information regarding the “Banking Supervision” is being downloaded from the
official site of state bank of Pakistan.
The information about the “Reforms of Banking Sector in Pakistan” is being
downloaded from an article by Mr.
ii. Sbp. Nadeem Malik of Islamic data communication limited.
iv. The information regarding the competitors is being collected from the respective
branches of Citi Bank. The financial information is being provided by Mr.BIBLIOGRAPHY