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Contents

‡ Know your organization

‡ Evolution of Banking

‡ Role of Central Bank

‡ Branch Hierarchy & functions of different

Departments
‡ Customer Banker Relationship
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 SBL History
 Incorporated in 1991
 Sponsors are Rupali Group
 Operations started in April 16, 1992 at Lahore
 Main Branch Karachi started operations on May
09, 1992
 No. of Branches 117 as on December 31,2008
 No. of staff 1720 as on December 31, 2008
 Credit Rating “AA” for long term, ”A1+” for short
term and “A+” for Term Finance certificates. 3
 Mission Statement
To develop Soneri Bank Limited into an
aggressive and dynamic financial
institution having the capabilities to
provide personalized service to
customers with cutting edge
technology and a wide range of
products, and during the process to
ensure maximum return on assets with
the ultimate goal of serving the
Economy and Society.
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 Guiding Principles
 Ensure that they are fully familiar with responsibilities,
procedures, rules and regulations applicable to their
respective job roles.
 Endeavour to provide courteous, efficient and quality
service to the customers of the bank.
 Ensure that time and efforts are applied in the most
judicious and productive manner.
 Seek guidance from seniors involving complex issues.
 Maintain complete secrecy of the affairs of the bank
and its customers.
 Ensures complete adherence to Bank’s standard code
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of ethics.
 SBL Financials
Rs. in Millions

2008 2007 2006 2005

Share Holder’s Equity 6,966 6,230 5,194 3,802
Deposits 61,634 60,150 53,001 47,606
Advances 47, 575 40,154 35,412 32,053
Investments 14,053 19,181 16,724 16,391
Total Assets 80,977 76,854 70,730 63,345
Foreign Trade 160,324 130,825 101,802 97,500
Pre – Tax Profit 953 1,477 1,449 1,400
No. of Accounts 296,180 279,270 291,398 263,368

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 Pakistan’s Banking History
 A considerable no. of schedule bank branches i.e.
487 were working in the areas constituting
Pakistan that reduced to 195 by 30th June 1948;
 Under an agreement Reserve Bank of India was
authorized to function as Central Bank till
September 1948;
 The standard monetary unit of Pakistan was to be
the Indian Rupee until 3oth September 1948;
 On or after April 1, 1948 the Reserve Bank of India
was to issue its notes in Pakistan inscribing
Government of Pakistan in English and Urdu; 7
 Pakistan’s Banking History

 Until the expiry date i.e. September 30th 1948

GOP was not authorized to issue any currency
note or coin;
 Every Pakistani scheduled Bank was required
to send return of Demand & Time Liabilities to
Reserve Bank of India;
 Reserve Bank of India was not put liable to pay
any income tax or super tax on its profits or
gains.
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 Pakistan’s Banking History
(contd.)
 State Bank of Pakistan was established on July
01,1948 through State Bank Of Pakistan Order 1948
 Habib Bank was established in 1941 and shifted its
Head office to Karachi in 1947
 National Bank was established in 1949
 Pakistani banking flourished in the period from 1948
to 1961
 Banks Nationalization January 01, 1974
 Islamization process started in 1981
 Denationalization process started in 1991
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 Emergence of Private Sector Banks from 1992
 STATE BANK OF PAKISTAN

 State Bank of Pakistan is the central bank of

Pakistan.
 It is an agency of the government and performs
the following functions:
 To act as Banker to the Government
 To Issue Local Currency Notes keeping in
view the FC Reserves/Gold
 To Control Money by Monetary Policy.
 To Stabilize Value of local currency.
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 STATE BANK OF PAKISTAN
(contd.)
 To provide credit to priority sectors.
 To act as lender of last resort.
 To ensure stable balance of payment
position of the country.
 Ensure full employment of resources.
 To maintain reasonable stability in the
general price level of all goods and
services.

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 STATE BANK OF PAKISTAN
(contd.)
To Regulate and Supervise the Banking
system by guidelines/Audit & Inspections.
To ensure compliance of SBP directives.
To protect and improve of flow of
payments.
To stabilize money & capital markets.
To hold/sell Government Securities.
Make advances to Fed/Provincial &
Government 12
STATE BANK OF PAKISTAN
(contd.)
To act as Banker’s Bank and maintain
close relationship with the banks.
To ensure maintenance of CRR/SLR
To give loans to banks and discount
government securities.\
To provide rediscounting facilities.
To provide facilities for clearing.

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 STATE BANK OF PAKISTAN
(contd.)
 To fix credit/margin restrictions and control it
by discount rate, OMO, Min. Requirements &
through Selective Credit Control.
 To grant permission for opening of branches.
 To remove any director or management
member as it supersedes banks’ Board of
Directors.

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 STATE BANK OF PAKISTAN
(contd.)

 To appoint administrators in case of

amalgamation and liquidation of banks.
 To act as Custodian of FE Reserves and
maintain value of Pak Rupee against foreign
currencies.
 Give licenses to Authorized Dealers.
 To collect comprehensive statistics through
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various SBP Returns.
 STATE BANK OF PAKISTAN
(contd.)
 To expedite Islamization of Banking System
in Pakistan.
 To liaison with International Financial
Institutions.
 To implement Basel Accords.
 To manage the public as well as foreign debt.

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 FINANCIAL INSTITUTIONS OPERATING IN PAKISTAN
AS ON JUNE 30, 2008

Banks Total No. of Br.

Public Sector Commercial Banks 04 1592

Specialized Banks 04 539
Local Private Banks 25 6143
Foreign Banks 06 60
Total 39 8334
Micro Finance Banks
Development Financial Institutions
Total
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18
 Banks Defined

A bank is a financial intermediary that performs

one or more of the following functions:
 Safeguards and transfers funds
 Lends or facilitates lending
 Guarantees credit worthiness
 Exchanges money
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 Who is a Banker
‘A person or company carrying on the
business of receiving money and
collecting drafts for customers subject
to the obligation of honouring cheques
drawn upon them from time to time by
the customers to the extent of the
amount available on their current
accounts.’
Dr. Herbert L. Hart
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 Banker Defined

No person or body corporate or

otherwise can be a banker who does not:
a. take deposit accounts
b. take current accounts
c. Issue and pay cheques
d. collects cheques crossed and un
crossed for his customers
Sir John Paget
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 Banker Defined

Banker means a person transacting the

business of accepting for the purpose of
lending or investment, of deposits of
money from the public, repayable on
demand or otherwise and withdrawable by
cheque, draft, or otherwise, and includes
any Post Office Saving Bank.
Negotiable Instruments Act1881
Section 3 (b)
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 Banker’s Business
 Borrowing and lending
 Discounting Bills of exchange and other Negotiable
Instruments
 Collecting Negotiable Instruments on behalf of the
customers
 Buying and selling foreign exchange
 Granting of LCs to the customers
 Receiving valuables for safe custody
 Underwriting and dealing in stocks, shares,
debentures and other securities on behalf of the
customers.
 Acting as agent to customers, undertaking and
executing trust.
 Carrying on guarantees and indemnities business
 Dealing with any property that may come to it as 23
security
 Defining Customers
 To constitute a customer, there must be
some recognizable course of habit of dealing
in the nature of regular banking business.’
Sir John Puget

 ‘A person becomes a customer of a bank

when he goes to the bank with money or
cheque and asks to have an account opened
in his name, and bank accepts the money or
cheque and is prepared to open an account
in the name of that person; after that he is
entitled to be called a customer of the bank.’24
 Rights & Duties of a Customer
RIGHTS:
 To draw cheques against his /her credit
balance.
 To receive statements of his account
 To sue the bank for the cost, loss and
damages when his cheque is wrongfully
dishonoured
 To sue when the banker has not maintained
secrecy of his account
 To claim from and receive profit / return on
his deposits as promised by the bank

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 Rights & Duties of a Customer
DUTIES:
 The customer must present the cheques for
payment and collection within business hours
 The customer should see that the cheque and
other instruments are presented within a
reasonable time from the date of their issue.
 The customer should keep his cheque book
under lock and key to safe guard its
unauthorized usage.
 The customer should be very careful while
writing down the cheques to prevent any
fraudulent activity.
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 Rights & Obligations
of a Banker
Rights
Can exercise a general lien on
balances in his account, in
conformity with requirements of
law
Right to recover interest/ charges
as per agreed terms

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 Rights & Obligations
of a Banker
 Obligation to honour the cheque
• It is the statutory obligation to honour the
cheques drawn on a bank by his customer
as long as the balance is sufficient,
provided the cheque is not stale or post
dated and there is no prohibiting order of
any court against the account of the
customer

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 Obligations of Secrecy
The relationship between banker and his customer
is obviously confidential, therefore, a banker must
maintain secrecy about the state of his customer’s
account.
The obligation of secrecy, however may not be
considered essential on the following occasions

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a. Under compulsion of Law
A banker may be asked to give an evidence in a court of
law.
A court order should be served to the banker before a
competent court. Section 165 of Pakistan Criminal
procedure Code authorises an investigating police officer
to search the records of a bank or call for any
information relating to certain officers
d. With approval of the Income Tax Commissioner
An IT Officer may inspect the books of the banker or call
for information required by him in accordance with
sec.144 of the Income Tax Ordinance, 1979
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c. Duty to Public to Disclose
During national emergencies, banker may make suitable
disclosures about the unsatisfactory and suspicious nature and
operation of a customer’s account , but the banker should make
himself very sure before venturing on such disclosures
d. In the Interest of the Bank
Sometimes bankers sue their customer to recover the amount
due in his loan or overdraft account, in such a case ,the banker
may have to disclose some aspects of the customer’s account.
It is also possible that sometimes the banker may have to
disclose the nature of account in order to defend against the
charges brought against him
e. Express or Implied Consent of Customer
A customer may give standing instructions to the banker to
supply certain information about his account for the preparation
of balance-sheet or send periodic statements of account to
some professional adviser for certain period of time. 31
 General Relationship
 Debtor – Creditor
When a customer deposits money in his account or for
opening up of savings or current account or issuance of
Time/Term Deposit the customer becomes Creditor and the
banker becomes Debtor. The customer attains the right to
withdraw it; but he has no right to enquire from the banker
about its utilization
 Creditor – Debtor
When a Banker extends finances to its customers the
relationship between them will be Creditor and Debtor i.e
Banker will be creditor and the borrower becomes the Debtor
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 Mortgagor & Mortgagee
When finance is extended to the customer against
security of immovable property, the relationship
becomes that of Mortgagor and Mortgagee.
 Hypothecator & Hypothecate
It is a charge on movable goods which remain in
custody of the customer the relationship between
the two becomes that of Hypothecator and
Hypothecate

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 Principal and Agent
b. When a banker performs Agency Service he
becomes agent of his customer. These services
include collection of cheque and other negotiable
instruments etc. and payment of premium to
insurance companies or subscription and fees to
clubs and associations on behalf of his customer
under his standing instruction
c. Buying and selling securities
d. Acting as a trustee ,attorney, executor
 Pawner/ Pawnee
When a customer pledges goods and documents with
the bank as security for an advance, he becomes the
Pawner and the banker becomes the Pawnee 34
 Liener – Lienee
Lien is a charge on paper Securities
offered by the customer. It is also known
as implied pledge. Linee can retain the
security till adjustment of the liability
• The customer becomes Lenore and
Banker becomes Lienee

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 Bailor and Bailee
Section 148 of the contract Act defines
that “ a bailment is delivery of goods by
one person to another for some purpose,
upon a contract” When the Banker
provides safe –custody facilities to his
customers for their valuables. The
relationship becomes that of Bailor and
Bailee where the customer is the Bailor,
and the Banker is the Bailee.
The present –day banker is a bailee for
reward and not gratuitous bailee, as a
very small amount is recovered from the
customer as service charges
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