Professional Documents
Culture Documents
ACKNOWLEDGEMENT
No one can say that I am perfect, everyone should admit that without the help of ALLAH and His people a man cant get anything so I bow my head before almighty Allah with gratitude. I am also very much thankful and presents salute to many individuals who have helped me in shaping this report .I am also very much thankful to lot of class fellows and contemporary colleagues. I am especially grateful to Ms. Abeerah who took the time and trouble during the last few days to speak to me about the way this text could be further improved. I am also very thankful to the staff Habib Bank Ltd. Punjab Medical College branch especially to Mr. Javed Raza (Area Manager & Branch Manager) and Mr. Shehryar Ali (Manager Credit) who provided me an opportunity to work in friendly environment. It was an honor and pleasure to work with: Mr. Javed Raza (Chief Manager HBL Punjab Medical college branch) Mr. Asif Iqbal (Asst. Manager Foreign Trade Department) Mr.Shehryar Ali (Manager Credit Department) Mr. Kashif (Head cash Department) Mr. Maqbool Ahmed Khan(Manager operations)
Job Report
2 Table of Contents Description Executive Summary Commercial Banking in Pakistan History of Banking in Pakistan About HBL Pakistan History and Background Privatization HBLs Mission, Vision and values Board of Directors Management Corporate information SWOT Analysis
Page No. 3 4 5 8 8 9 9 10 11 13 15 18 18 20 21 23 24 27 28 29 32 34 35 37 39 40 42 46 48 52 54 55 56 57
Operations of HBL & Banking departments A .Account opening department B .Cash department C .Credit department D. Bill clearing department E. Foreign exchange department Products and services of HBL Deposit accounts HBL car loan HBL credit card & Debit card HBL personal loan & Phone banking HBL Banc assurance HBL Corporate banking & Commercial banking HBL zarai banking HBL Islamic banking Learnings as an employee Financial Performance of HBL in 2008 Ratio analysis of HBL Award and Financial performance in 2008 Recommendations Discussing a credit dept. problem Glossary, Bibliography Index
Job Report
executive summary
Every student of Master in Business Administration at Government College University Faisalabad has an essential requirement to do Six to Eight weeks job in any of the well reputed organization. The purpose of this program is to acquaint the students with practical applications of theoretical concepts taught to them during conduct of their MBA program. But I got job at HBL during my M.B.A so I am submitting job report..I joined HBL on 28th day of May,2008 as officer Band-1. Report starts with the topic evolution of banking. HBL was the first commercial bank to be established in Pakistan in 1947. Over the years, HBL has grown its branch network and become the largest private sector bank with over 1,450 branches across the country and a customer base exceeding five million relationships. On December 29, 2003 Pakistan's Privatization Commission announced that the Government of Pakistan had formally granted the Aga Khan Fund for Economic Development (AKFED) rights to 51% of the shareholding in HBL, against an investment of PKR 22.409 billion (USD 389 million). This report contains information about HBLs board of directors, management, mission, vision and values. HBLs operations are discussed in light of its working department in the branches like cash, clearing, foreign exchange and accounts department and also in light of its services and products which it is offering to customers weather they are individual, business, corporate or agriculture field related customers. HBL is currently offering phone banking, internet banking and various cash management services for the facilitation of its customers. HBLs car to car loan has its own uniqueness in Pakistans banking sector. HBLs branch network is extended all over the Pakistan which has its competitive edge over all other private sector banks in Pakistan. During the time of my job in Habib Bank Punjab Medical College branch Faisalabad I got the chance to work in all the departments of HBL working there but my specialization was credit department.. Duties and learning in each department is given in this report. Talking about financial performance of the bank in 2008 all the financial indicators are showing positive results when the financial performance of the bank in 2008 is compared with financial performance of 2007. During 2008 HBL also won some awards. At the end of this report I have given my suggestion for the improvement of the bank. .
Job Report
Job Report
1) Inauguration of State Bank of Pakistan (SBP) on 1st July, 1948. 2) Setting up of National Bank of Pakistan in November, 1949 to control the 'jute' export in East Pakistan and to act as agent of SBP. 3) Larger powers were given to SBP through SBP Act (1956) for controlling purposes. 4) Banking Companies Ordinance 1962 for protection and guidance to banks. 5) Establishment of specialized banks, such as ADBP (1952); a) HBFC (Nov, 1952); b) P1CIC (Oct, 1957) c) IDBP (Aug. 1961); d) NDFC (Jan, 1973).
These were the steps, which built a strong banking sector in Pakistan. This is also obvious from the facts that by 1973 there were almost 10 foreign banks were working in Pakistan and all over deposit position was around Rs.2300 crore (23,000 million). A bird eye view of 5 top banks was as given below:
B) NATIONALIZATION PERIOD
On January 01, 1974 all Pakistani banks were nationalized through Nationalization Act 1974. Under this law all Pakistani banks became a public property. All small banks were merged in bigger banks to create 5 major Pakistani banks Pakistani banks. These banks were to control by Pakistan Banking Council. There are still controversies about this act of government as whether it contributed in success of failure of banks. However the major changes after nationalization were as follows: Working of banks was extended to under developed areas. Market expansion for credit and deposits. Decrease in service level of bank officers. Decrease in profitability as well. However the effect of expansion was enormous and it can also be depicted with the help of table 2 which shows the deposit & branch positions of different nationalized banks.
Job Report
6 7096
TOTAL
453,362
C)
In 1990 the government decided to denationalize all the nationalized institutes. Some was also suggested in banking sector. For this purpose, amendments were made to Nationalization Act 1974 and two nationalized banks were privatized. Along with this a permission to open banks in private sector was also granted. The rules regarding establishment of new banks and for incoming foreign banks were also relaxed. The- privatized banks are;
a) MCB taken up by a private group in April, 1991 b) ABL taken up by its own employees in September, 1991. c) UBL taken up by UAE party in 2002.
d) December 29, 2003 HBL was taken by AKFED After these changes a large number of private and foreign banks started their operations in Pakistan and the present status can be seen from the following figure:
Commercial
Banks
Job Report
HBL was the first commercial bank to be established in Pakistan in 1947. Over the years, HBL has grown its branch network and become the largest private sector bank with over 1,450 branches across the country and a customer base exceeding five million relationships. With a presence in 25 countries, subsidiaries in Hong Kong and the UK, affiliates in Nepal, Nigeria, Kenya and Kyrgyztan and representative offices in Iran and China, HBL is also the largest domestic multinational. The Bank is expanding its presence in principal international markets including the UK, UAE, South and Central Asia, Africa and the Far East. Key areas of operations encompass product offerings and services in Retail Banking. HBL has the largest Corporate Banking portfolio in Pakistan with an active Investment Banking arm. SME and Agriculture lending programmes and banking services are offered in urban and rural centers. In the UK and GCC, HBL focuses on trade finance and remittances for the South Asian Diaspora in addition to basic banking facilities. HBL has always been a bank and a brand for the masses, with a history that is inextricably linked with the history of Pakistan itself. As it continues to grow, both locally and abroad, it strives to embody its brand personality: honest, approachable, and inclusive. HBL is currently rated AA+ (Long term) and A1+ (Short term)*. It is the first Pakistani bank to raise Tier II Capital from external sources.
Job Report
established with a paid up capital of Rs. 2.5 million. At an early stage, the number of its branches was only 12. HBL established operations in Pakistan in 1947 and moved its head office to Karachi. Our first international branch was established in Colombo, Sri Lanka in 1951 and Habib Bank Plaza was built in 1972 to commemorate the banks 25th Anniversary. With a domestic market share of over 40%, HBL was nationalized in 1974 and it continued to dominate the commercial banking sector with a major market share in inward foreign remittances (55%) and loans to small industries, traders and farmers. International operations were expanded to include the USA, Singapore, Oman, Belgium, Seychelles and Maldives and the Netherlands.
Job Report
Mission
To make our customers prosper, our staff excel and create value for shareholders.
Values
Our values are the fundamental principles that define our culture and are brought to life in our attitude and behaviors. It is these values that make us unique and unmistakable. Our values are defined below:
Excellence
This is at the core of everything we do. The markets in which we operate are becoming increasingly competitive, giving our customers an abundance of choice. Only through being the very best in terms of the service we offer, our products and premises - can we hope to be successful and grow.
Integrity
We are the leading bank in Pakistan and our success depends upon trust. Our customers - and society in general expect us to possess and steadfastly adhere to high moral principles and professional standards.
Customer Focus
We understand fully the needs of our customers and adapt our products and services to meet these. We always strive to put the satisfaction of our customers first.
Meritocracy
We believe in giving opportunities and advantages to our employees on the basis of their ability. We believe in rewarding achievement and in providing first-class career opportunities for all.
Progressiveness
We believe in the advancement of society through the adoption of enlightened working practices, innovative new products and processes and a spirit of enterprise.
Board of Directors
Job Report
10 DESIGNATION
NAME
CHAIRMAN
R. Zakir Mahmood
Mushtaq Malik
DIRECTOR
Ahmed Jawad
DIRECTOR
Yasin Malik
DIRECTOR
Moez Jamal
DIRECTOR
MANAGEMENT
Job Report
11
Job Report
12
DESIGNATIONS
1. PresidentSenior,2. Executive Vice President,3. (SEVP)Senior
4. Vice President, 5.(SVP)Vice President,6.(VP)Assistant Vice President,7.(AVP)Officers,8.Grade1,9. Officer Grade II,10.Officer Grade III,11.Cashier,12.Clerks
Corporate Information
Head Office
HBL Plaza
I. I. Chundrigar Road Karachi-75650, Pakistan. Tel : +92 (21) 2418000 [50 lines] Fax : +92 (21) 9217511
Registered Office
4th Floor, Habib Bank Tower Jinnah Avenue
Job Report
13
Islamabad, Pakistan. Tel: +92 (51) 2872203 Fax: +92 (51) 2872205
Registrars
THK Associates (Pvt.) Ltd. Ground Floor, State Life Bldg No. 3 Dr. Ziauddin Ahmed Road Karachi, Pakistan. Tel: +92 (21) 111-000-322
Websites
Corporate website: www.hbl.com Treasury website: www.hblgtr.com.pk Ebank (internet banking): www.hblebank.com
Auditors
KPMG Taseer Hadi & Co. Chartered Accountant
Global locations
Job Report
14
Swot analysis
Strengths
Strength can be defined as an area where a company is best at doing something or a feature that puts the company at an advantage in comparison to its competitors. HBL enjoys the following strengths: HABIB BANK is a well established bank enjoying long history of over 65 years of experience and profitable operation. HBL is the largest private bank in Pakistan now and people trust is very high. It has the largest branch network among private banks of Pakistan. HBL has been very effective in controlling costs as it successfully restructured itself after its privatization. During this process more than 1,600 employees were relieved under a golden handshake scheme and 110 branches were closed. Excellent branches appearance gives an edge to HBL over other banks. HBL has the ability to bring innovative products and services like personalized
Job Report
15
service, electronic funds Transfer, sophisticated financial products such as electronic banking, auto-teller machines and evening banking. The Banks Rupee Traveler Cheques have been market leaders for the past six years. HBLs car to car financing scheme is unique in auto loan segment. Habib bank is an internationally recognized name in banking services and products. HBL has forged strategic alliances with international banks for expanding its network further, both locally and internationally.
Weaknesses
A weakness is defined as an area in an organization where the organization is not as good at doing something as its competitors or a thing which an organization lacks thus putting the organization at disadvantage in comparison to its competitors. Based on the above definition, HBL has the following weaknesses. Lack of communication between bank and customers about terms and condition of products and services. Like centralization of cheque book issuing process. Employees at branch level are not properly motivated to work by heart. They take the all routine activities as a boring job. Most of the employees lack managerial training as they are not properly educated. Due to seniority, they have moved up on the hierarchy line to Grade-I, II or III positions having hardly bachelor degrees. This type of senior staff cannot apply the modern and innovative techniques of management in decision making. Mission of HBL is not well defined. Though HBL is second largest bank in Pakistan, yet the fact remains that it is not market leader as NBP. Its total assets are always less than NBP total assets. Now as it is a privatize bank that is why GOVERNAMENT support to HBL decreased as it was in past
Opportunities
An opportunity can be defined as a change in external environment which if properly exploited with the organizational strengths will result in enhanced sales, market share, or income. Using its strengths, HBL can avail the following opportunities. Opportunities require explanation therefore I have used headings instead of arrows E-Banking Generally speaking, three factors, quickness, easiness and cheapness have become the catchwords for the competitiveness and usefulness of all the business operations. Particularly it is commonplace today to say that banking is undergoing a radical transformation. Only those banks that use their technology resources effectively have the opportunity to secure real competitive advantage in this fast-changing industry through real product or service differentiation. High mark up rates Of late markup rates have increased considerably. Present rates are 4% above KIBOR i.e. 16% appx. High markup rate has decreased the interest of people in loaning from from banks. Habib bank can increase its income by offering loan at lower interest rate than other banks.
Job Report
16
ONLINE BANKING It is doing banking transactions through our home P.C. The banks that do business through net have WebsitesSo Habib bank should focus heavily on providing online banking faculties to its customers. Currently it is doing the same. CORPORATE BANKING TERMINAL (CBT) Large corporate customers can log into the bank's database and have access to their accounts/transactions from their business houses. This facility has still not been started for customers in Pakistan. So Habib can focus on that. AUTOMATIC TELLER MACHINE (ATM) This system is known as "Any Time Money" because it allows customers who have an ATM card to withdraw money at any time from the bank without interacting with human teller.. It allows customers to transact with the bank 24 hours a day and 365 days a year. They allow the customers to transfer money to and from accounts to view account information, to receive cash. It can also be used to deposit cheques and cash into the accounts. No bank in Pakistan is offering this service currently. So an opportunity exists for Habib bank to differentiate. Rate of return The range and choice of products available & offered by the commercial banks is limited. Rates of Return / Profits on Deposits are so low and unattractive that very limited options are available to the depositors. They do not match the current rate of inflation. HBL differentiate and increase its deposit by offering attractive rate of return on deposits.
Threats
Threat can be defined as a change in external environment which if not met with proper strategies will result in loss of revenues, market share, or income. In the context of HBLs external environment, the following potential threats exist: Other private commercial bank with sound profitability is also a threat to HBL e.g. UBL, Alfalah, MCB etc The Rupee Travelers Cheque (RTC) sales volumes may be affected on account of regulatory restriction imposed by SBP on issuance of large value denominations. For the last of 2 to 3 years, Pakistan is facing economic and political instability which is a big threat. Foreign banks are flourishing in field of consumer financing. Afghan war and Iraq war has a deep effect on the economy of Pakistan, which has affected HBL. Increased regulations from State Bank of Pakistan may affect its business.
Job Report
17
Operations of HBL
1. 2. 3. 4.
Job Report
5. 6. 7.
1.
Basic function of the accounts department is to open new account and facilitate the customer for the account opening purpose. There are certain formalities which are to be observed for opening of an account with a Bank. These formalities in brief are as under: FORMAL APPLICATION: The customer is to fill "Account Opening Form. It is a formal request by a customer to the bank to allow him to have and operate the account. Documents require for opening an account: Copy of CNIC Service certificate or student card. Utility bill Provisional receipt KYC (Know Your Customer) SPECIMEN SIGNATURE: When the Banker is satisfied about the integrity of the customer, he agrees to open the account. The Banker obtains the specimen signatures of the customer on the signature book or on card. Posting the account on the system: After that officer has to post the new account on computer system for further processing. During the process customer id and account number is generated. New account remains active for one day after that it is blocked by the head office until CNIC of the customer is verified from NADRA. Cheque book issuing: After the CNIC verification account opening officer has to issue a cheque book to customer so that he can be able to make withdrawal from his account. Now a day in Habib bank cheque book issuing process is centralized that take 06 days to complete. SECRECY: The secrecy of depositors account is the. Responsibility of every official engaged in the Bank service.
Types of accounts:
Individual accounts: Individual accounts are the most common personal investment accounts. Opened by single person. JOIN ACCOUNT:
Job Report
19
A joint account occurs when two or more than two customers have one account. The parties to a joint account are considered in law as they are one person. Business accounts: Business accounts can be opened by institutions, companies, partnerships, trusts and non-profit organizations. Following documents are required. BOOKS RELATING TO CUSTOMERS: Pay-in-Slip When money is to be deposited in the bank the pay in slip is to be filled. The object of this book is to provide the customer with the banks acknowledgement for receipt of money to be credited his account. Cheque Book A chequebook contains a number of cheques, which is given to a customer upon written request and after marking the payment for the chequebook. It enables a customer to make withdrawal from his account or make payment to various parties by issue of cheques. GROUNDS FOR CLOSING THE CUSTOMERS ACCOUNT: The banker may close the account of the customer due to following reasons: i. Notice by a Customer ii. Death of a Customer iii. Customers Insanity iv. By order of court I) NOTICE BY CUSTOMER The banker closes the account of the customer on the application of the customer for closing his account.
II) DEATH OF CUSTOMER On death of his customer, the bank must stop payment on cheques drawn on him by the deceased customer because the death revokes his authority to pay such cheque. The heirs or the executors of the deceased customer are not authorized to operate on the account; it can act only in accordance with provisions mentioned in the letter of probate issued by a competent courts. III) CUSTOMERS INSANITY If the customer becomes insane or mental it terminates the bankers authority to act as his customers agent. Since the banker customer relationship comes to end, in such as situation, it is usually considered that the bankers authority to pay his customers cheques is revoked by notice of insanity. However, the bankers treat their customers as it unless a fairly inclusive evidence of the customers insanity is available to them. IV) ORDER OF COURT
Job Report
20
A court of law may serve a banker with an order in garnish proceeding in execution of a decree prohibiting him from honoring a customers cheques.
2. CASH department
ash Department is very sensitive and risky part of the bank. Very causations and competent personnel are needed for the Job. HBL has really such a diligent staff with appreciable competencies and will to do work. Main function of cash department is to deal with cash payment and cash receipts.
3. CREDIT DEPARTMENT
1. Introduction 2. Securities. 3. Types of credits INTRODUCTION The function of credit department is to lend money in the form of clean advances, against promissory notes, as well as secured advances against tangible and
Job Report
21
marketable securities. The bankers prefer such securities that do not run the risk of general depreciation due to market fluctuations. Common Securities for the bankers advances are as under:SECURITIES 1. Guarantees When an application for advance cannot offer any tangible security, the banker may rely on personal guarantees to protect himself against loss on advances or overdraft to the applicant. 2. Mortgage A mortgage is the transfer of an interest in specific immovable property for the purpose of security the payment of money advanced or to be advanced by way of loan, and existing or future debt, or the performance of an engagement which may rise to a pecuniary liability. The transfer is called a mortgagor, the transferee a mortgage. 3. Hypothecation When property in the shape of goods is charged as security for a loan form the bank the ownership and possession is left with the borrower, the goods are said to be Hypothecated The essence of hypothecation is that neither the property in the goods not the possession of them are possession is left with the borrower, the goods are said to be Hypothecated the essence of hypothecation is that neither the property in the goods not the possession of them are possessed by the lender, but the security is granted by means of letter of hypothecation, which usually provides for a bankers charge on the hypothecation goods. 4. Pledge In a pledge the ownership remains with pledge, but the pledge has the exclusive possession of property until the advance is repaid in full. While in case of the default the pledge has the power of sale after giving due notice. 5. Promissory Note Sometimes promissory note is also accepted as a security, "A promissory note is an instruments in writing containing an unconditional undertaking signed by the maker, to pay on demand or at a fixed or determinable future time a certain sum of money only, to or to the order of certain persons, or to the bearer or the instrument." A promissory note is incomplete until has been delivered to payee or the bearer. Moreover, the sum promised in a promissory note may be made by two or more makers who may be liable there on jointly and severally.
TYPES OF ADVANCES
The advances which are given by Habib Bank Limited are as under:1. DEMAND FINANCE (Ordinary Loan) Demand Finances are those advances which are allowed in lump sum for a fixed period and are repayable lump sum or gradually in installments. TYPES OF ADVANCES a. Demand Finance (Packing Credit) Scheme introduced by State Bank of Pakistan for exporter of carpet, surgical instruments, at zero percent rate of interest. While banks provides at concessional rate of interest.
Job Report
22
b. Loan ordinary (Demand Finance to Students) Qarz-e-Hasana Scheme Loans are allowed to the students, teachers without any interest or mark up with the recommendations of the MPA or MNA. c. Demand Finance (Staff) Loans are offered to the staff of the following four categories. i. House Building Loans against mortgage of property. ii. Loan for purchasing vehicles. iii. Loan equivalent to months salary. 2. RUNNING FINANCE (Overdraft) Running finance (old name overdrafts) are advances, which are generally, given to meet temporary requirements of the customers. A good customer use the banks running finance limit as a mean of protecting his credit in the market and as a line of security defense to meet his commitments. TYPES OF RUNNING FINANCE I. Unsecured Under such type of overdraft the bank pay upon the personal security of the customers mentioned on the customers account. II. Secured Under this type of overdraft the bank allows his customer to withdraw more than his deposits after giving security against the amount overdrawn. The securities against which they given are: i. Share certificate, Saving certificate ii. Deposits iii. Mortgage of property iv. Guarantee of person SMALL LOANS Loan is allowed to contractors clearing and forwarding agents. 3. FINANCE AGAINST THE FOREIGN BILLS (FAFB) The advance facility is allowed both to local foreign bills and is classified as under:i. FAFB (Local) advance against Railway receipts and truck receipt, a company with bills of exchange and invoices, are given under this head. ii. FAFB (Foreign) advances against foreign bill, covering bills of exchange bills of lading airway bills of exchange bills of lading airways bills etc. 4. AGRICULTURE LOANS Loans to the farmers with holding up to 25 acres for meeting their short terms, medium and long terms Agricultural production requirements, such as: i. Agricultural inputs ii. Tube wells
Job Report
23
iii. Live Stock Framing iv. Land improvement 5. INDUSTRIAL LOANS Besides the short-term loans which play a part in working capital medium and longterm loans are also given to industrial sector for purchase of machinery and other capital nature goods.
Job Report
24
Transfer cheques are those cheques, which are collected and paid by the same branch of bank. b. Transfer Delivery Cheques Transfer Deliver cheques are those cheques, which are collected and paid by two different branches of a bank, situated in the same city. c. Clearing Cheques Clearing cheques are those cheques in which the payee (Person who deposit cheques for collection) and the drawer of a cheque maintain the account with different banks. These clearing instruments are handed over to NIFT after posting necessary stamps and checking them for any errors. Then further process of clearing is carried on the behalf of NIFT.
5.Forex Department
International trade is growing and with the development of international trade it has become more imperative. For countries to devote more and more attention to the complicated mechanism of Foreign Exchange. It is more important in case of developing countries. It is need of time, that a country should conserve its foreign exchange resources. MEANING OF FOREIGN EXCHANGE The foreign exchange term refers to the principles that determine the rate of exchange. It covers following three senses: i. The mechanism or system by which international obligations or indebtedness are fulfilled. ii. The currency of one country is exchanged for that of another. iii. The principles on which the people of world settle their debts to one another. Letter of Credit: It is a negotiable instrument through which the bank of the exporter deals with bank of the importer through the guarantee of a bank. There are different parties involved in the L/C, e-g importer, exporter, importer bank, exporter bank, and advisory bank. LC involves banking channels in foreign trade to mitigate risk. The procedure of opening of an L/C is as follow The first thing is the Performa invoice. The Performa invoice is a document (say a clip), which is, sends by the exporter to the importer and includes the information like. Descriptions of goods, what type of goods you are needed and what are the quality, rate and originating country etc. Before to open a L/C the bank also consider that the goods which the importer is importing is allowed by govt. of Pakistan or not. Because the importer is not allowed to import that goods which are prohibited by the Govt. of Pakistan. The importer is asked to show the membership certificate of any chamber of commerce and industry affiliated with the Pakistan federation of chamber of commerce and industry. Fill the import form of the govt. of Pakistan, which is the proof of this that there is no objection on the goods, which the customer is importing.
Job Report
25
What type of goods you are needed and what are the quality, rate and originating country etc. Necessary Documents required for L/C: NTN Tax Authority registration certificate Chamber of Associations trade certificate Type of Business NIC Margin Registration No. Application for L/C On providing these documents the importer will be given the L/C form named as IB-8. Contents of IB 8 1. Request for LC 2. Rate 3. Importer and Exporters particulars 4. Amount 5. Terms 6. Partial Shipment (Allowed, not allowed) 7. Transshipment (Allowed, Not Allowed) 8. Port of Loading and destination 9. Payment Mode I. Sight On seeing the documents the importer has to pay. II. At Sight and Negotiation: It means that exporter will submit his documents with the bank and immediately asks for payment. III. Acceptance: On showing the documents to the importer, the bank asks him to accept that he will pay within 30, 60, 90, 120, 180 etc days. 10. Documents Required: Certificate of Origin. Commercial Invoice Bill of Lading / Air way bill. Charges: For L/C following charges are applicable; Commission Postage L/C Advising commission L/C amendment Commission L/C confirmation Commission L/C Negotiation Commission Payment Mode: In foreign trade payment modes are 1) Advance Payment: Importer makes payment before delivery of goods.
Job Report
26
2) Open A/C: Importer makes payment after receiving the goods. Issuing foreign exchange accounts cheques books Another function of foreign exchange department in P.M.C branch is to issue foreign exchange accounts cheques books to customers on request. This process is not yet centralized. Cheque book is issued within 15 minute of receiving request from customers after making necessary register entries and posting stamps on it.
Retail Banking
For
Individual Customers
Deposit Accounts
Job Report
27
Current Accounts
Make unlimited transactions while maintaining a low minimum balance every month. HBL is currently offering three types of accounts in current account category. Their detail and name is as under. 1. HBL BusinessValueAccount 2. Current Account 3. Basic Banking Account (BBA)
HBL BusinessValueAccount
Unique transactional account for Businessmen Up to 5.35%* profit per annum Profit calculated daily, paid every quarter Minimum balance of Rs. 20,000 HBL DebitCard and Inter Branch Transaction System (IBTS) facilities Up to 10 Bankers Cheques free (at minimum balance of Rs. 500,000) Funds transfer to any bank through HBL PhoneBanking
Current Account
Minimum balance of Rs. 5,000 Unlimited transactions Non-profit bearing HBL DebitCard and Inter Branch Transaction System (IBTS) facilities Funds transfer to any bank through HBL PhoneBanking
Savings accounts
Avail the flexibility of making transactions while earning profit on daily/monthly basis. HBL is currently offering five types of accounts in savings account category. Their detail and name is as under. 1. 2. 3. 4. 5. HBL Value Account PLS-Savings Account Remittance Munafa Plus Savings Account Daily Munafa Account Daily Progressive Account
Job Report
28
PLS-Savings Account
5.06% profit per annum* Profit paid bi-annually HBL DebitCard and Inter Branch Transaction System (IBTS) facilities Funds transfer to any bank through HBL PhoneBanking Minimum balance of Rs. 20,000 Unlimited transactions
Terms Accounts
Invest your savings in HBL term deposits for a fixed duration and earn profit while keeping your savings secure. HBL is currently offering one type of account in terms account category. Their detail and name is as under. 1. HBL Advantage Account
Job Report
29
FC-SB
Savings Account offered in 3 currencies, USD (US dollar), EUR (Euros) and GBP (UK pound) Tiered product, with rates depending on choice of currency To earn profit, minimum balance in USD, EUR and GBP is 1,000 Interest is payable on a quarterly basis
Features
Choice of used, new local/imported and reconditioned imported car. Repayment options ranging Upto 7 years. Upto 85% of financing for the car of your choice. Insurance at all times for complete peace of mind and security.
Job Report
30
Round the clock support available through HBL PhoneBanking; you can place your requests and queries, track the status of your repayment/loan account and avail other value-added services through HBL PhoneBanking.
Eligibility Criteria
How to apply
Just visit any HBL branch or Habib Bank Auto Finance Centre for details and application. Submit complete set of application without any charges to the branch or the Auto Center. Sign the necessary documents on approval of the application Payment is released within 24 hours of the submission of post-dated cheques and initial payment after approval of the request.
Documentation
Salaried Individuals Complete Application Form Salary Certificate / Most recent Salary Slip Bank Statement for past one year Two Copies of NIC Employment Certificate with date of joining Two passport size photographs Copy of the last paid utility bill (residence)
Self-Employed Business persons/Professionals Complete Application Form Two Copies of NIC Two passport size photographs Letter of proprietorship / Registered Partnership Deed Certified latest Form A and Form 29, where applicable, along with articles and Memorandum of Association Copy of last paid utility bill (residence) Bank Statement for the last 1 year
Job Report
31
matchless features and unique options at the end of the lease. Now customer can drive a new car at the end of every two years.
Features
Pay only for what you use When customer lease a car under HBL CarToCar, he only pay for that part of the cars value that he use during the lease term. The cars residual value (forecasted for the end of the specific lease term) is agreed with him at the start of the lease term. This amount is deducted from the car price thus lowering the finance amount. This finance amount is based only on a part of the cars value and not the full value of the car. Therefore, HBL CarToCar offers very low installments as compared to any conventional financing. Upgrade of lifestyle HBL gives customer the guarantee that if he wishes to return the car to HBL at the end of the lease term, he will not have to pay off the cars residual value. Instead, HBL will directly settle this outstanding liability for customer under the buy back guarantee. Hence, he can upgrade to a new car as frequently as two years without any complication and hassle. Affordability With HBL CarToCar, customer only has to pay the difference between the car price and the pre-agreed residual value to the bank. As a result, the monthly installment may even be 40% to 50% less than that of conventional financing. Flexibility HBL CarToCar offers customers several choices at the end of the lease term: Upgrade - Simply return the car to HBL and drive a new one home Walk away - Return the car to HBL and end the lease Buy - Keep the same car. Just make a one-time settlement of the cars residual value to HBL or pay the same in easy installments over a specified extended period of time Sell - Enjoy the gain from selling off the car at a higher price in the market than what you ay HBL as the residual value
Eligibility Criteria
Documentation
Salaried Individuals
Job Report
32
Complete Application Form Salary Certificate / Most recent Salary Slip Bank Statement for past one year Two Copies of NIC Employment Certificate with date of joining Two passport size photographs Copy of the last paid utility bill (residence)
Self-Employed Business persons/Professionals Complete Application Form Two Copies of NIC Two passport size photographs Letter of proprietorship / Registered Partnership Deed Certified latest Form A and Form 29, where applicable, along with articles and Memorandum of Association Copy of last paid utility bill (residence) Bank Statement for the last 1 year
Job Report
33
Benefits
Buy now, pay later Buy what customer want, when he want and pay for it later. A credit card statement will be sent to him every month with details of all his purchases. He will have 21 credit free days to make the payment from the statement date. Customer should pay at least 3 days in advance if he makes your payment by cheques to allow enough time for clearance. Pay as much as customer wants A customer can pay the entire or as little as 5% of the outstanding balance in his statement. The unpaid amount will be transferred to his next months statement along with applicable services charges. Cash advance Customer can go to any specified HBL branch and withdraw cash at the counter. He can also go to any 1Link ATM in Pakistan and more than 1,000,000 ATMs worldwide displaying the Visa/Plus logo. Withdraw cash up to the available cash advance limit on his HBL Credit Card for a charge applicable from the withdrawal date. Balance transfer facility Card holder can pay off balances he owes to other banks through his HBL Credit Card at a lower service charge. Security Card holder cannot lose cash if he doesnt carry it! In the event that his card gets stolen/lost, he should call HBL PhoneBanking to have his card blocked immediately.
Job Report
34
Features
No Interest HBL Visa Debit Card is the perfect way of paying for purchases as it gives access to the exact amount of money a customer needed, as and when he needs it. There is no interest or credit on payments because he spends from the money available in his personal HBL Account. Ease & Security HBL Visa Debit Card offers ease and convenience because card holder doesnt have to visit an ATM to withdraw cash. A single swipe automatically debits the exact purchase amount from his personal HBL account. Spending Limits The daily spending limit at shops and outlets on HBL Visa Debit Card is Rs. 25,000100,000. (These figures are subject to the balance available in account). Free Account Statement HBL cardholders receive a free monthly account statement for their Debit Card and ATM transactions to help them keep track of their spending. International Recognition & Acceptability HBL Visa Debit Card is accepted at over 20 million Visa merchants worldwide, including over 10,000 merchants in Pakistan. As an ATM card it is accepted at more than 1,000 1-Link & M-Net ATMs in Pakistan and 864,000 Visa ATMs worldwide. No matter where card holder is, with the HBL Visa Debit Card, HBL is always with him. No Liability In case of a lost or stolen card, card holders are protected against fraudulent transactions made on their card after they report the incident.
Job Report
35
Features
Flexible tenure: 12, 24, 36,48 or 60 months No processing fee Repayment through easy and affordable monthly installments from salary. Credit Life & Disability Insurance Repayment through easy and affordable monthly installments You determine the need, we help you finance Option of add up replacement for existing customer. Minimum salary Rs. 12000 No salary limit for existing customers. 23% or 21% rate for existing users instead of 25%
T-PIN Generation
Customers TPIN (Telephone Personal Identification Number) is generated the first time he calls and he can use it as your password for verification purposes, selfservice banking through IVR and additional services through HBLs PhoneBanking Officers. Customer can change his TPIN anytime he like.
Job Report
36
HBL PhoneBanking services for HBL CarToCar and Car Loan customers
HBL CarToCar and HBL CarLoan customers can enjoy the following services through HBL PhoneBanking: Balance Inquiry Last 5-10 Transactions Statement Generation (Email and Fax) Account Maintenance Assistance in case of Car Theft/Damage
Hbl bancassurance
HBL and New Jubilee Life Insurance Company Limited (NJI) introduce Amaan (Retirement Plan) and Tabeer (Child Education & Marriage). These products have been designed keeping HBLs customer base as the focus and will provide life insurance along with an investment option.
Job Report
37
Lockers
Lockers are available in many of the HBL branches in different sizes like small, medium and large; some branches also have extra large and cubical lockers. Except rural areas because of security reasons.
Charges
Size
SMALL MEDIUM LARGE
Key deposit is refundable at the time handing over the locker to bank. For the staff of HBL key deposit is not required and also the annual rent is very low for them.
Job Report
38
Services
HBL provides the following services to meet customers funding requirements: Working Capital Finance, including Overdraft, FE Loans, etc. Pre and Post Shipment Export Financing (PKR and USD based) Import Financing (PKR and USD based) LMM Funding Receivable Discounting Islamic Banking facilities Cash Management Services Trade Services including Letter of Credit, Letter of Guarantee and Standby Letter of Credit, etc.
Services
HBL offers financing for the following: Working Capital Procurement of Inventory
Job Report
39
Receivables Procurement of Machinery Expansion of production facilities Import of raw materials Exports Guarantees
Job Report
40
Products
HBL ZaraiBanking enables farmers to invest in premier quality seeds, fertilizers, pesticides, agricultural implements and non-farm setups through its various product programs.
Crop Inputs Crop specific finance for purchase of Agriculture inputs such as seed, fertilizer, pesticide and other related inputs. Farm Implements Finance available for purchase of farm implements & machinery like combined harvester, sprayers, ploughs, tube wells and other crop-related tools/implements. Tractors/Agricultural Vehicles Finance available to individual farmers, self-employed tractor operators, providing the option to select vehicles from a range of different manufacturers. Livestock Finance available for feed, medicines, raw material, raising charges and other related activities. Poultry Finance available for all poultry related activities including poultry farm construction/equipment, hatchery plant & machinery, poultry feed, poultry medicines, composite feed production, poultry processing and other related activities. Fish Farming Finance available for inland fish farms as well as deep-sea fishing. This includes procurement of boat, fish locating equipment, nets & ropes, ice maker, fish farm water solution, hatchery construction/equipment, purchase of medicines / feed and other related activities. Group Lending Joint finance facility for a group of farmers with small land holdings for working capital requirement. NOTE: These finances may be availed under Demand Finance or Running Finance categories. Demand Finance is usually available for short term financing needs while Running Finance is available on the basis of revolving limit.
Islamic banking
Islamic Banking is a growing market segment that offers attractive opportunities to potential and existing customers. At HBL, Islamic Banking offers Shariah compliant products and services to meet the short and long term requirements of business, trade and industry.
Job Report
41
Shariah Compliance
HBLs Islamic Banking products are in strict compliance with the tenets of Shariah and bear Shariah Compliance Certification from an independent Shariah Advisor. Their Shariah Advisor has in depth experience in Shariah rulings (Fatawa) and teachings at different forums with qualifications of Dars-e-Nizami, M.A and L.L.B. HBL also have a Shariah Scholar, as member of their Shariah Supervisory Committee to ensure a sound Shariah Compliance mechanism, giving prompt responses to customers needs and access to Shariah knowledge.
Branch
Address Finlay House Ground Floor I.I Chundrigar Road Karachi
Learning as an EMPLOYEE
As every body knows that "Knowledge without practice is sterile ".I JOINED HBL ON 28TH, May, 2008.During my job I got a chance to work and learn in following departments of the bank: Foreign exchange department
Job Report
42
Bills clearing department Credit department I.T department Cash department Accounts, ATM and Lockers department
Job Report
43
voucher attached to it is same or not. If no error is found then making register entries by noting down their OBC number branch code and amount of the voucher. Then: Calculating the total amount of vouchers by summing individual amounts. Calculating the total amount of cheques by summing individual amounts. Preparing an add list to be attached with clearing instruments (cheques). Writing vouchers for demand drafts. And I also came to know about the different types of stamps and their use in particular situation like DAK RECEIVED stamp and CLEARING stamp. After attaching add list, clearing instruments are handed over to NIFT for further processing. These clearing instruments are delivered to their respective banks for clearance by NIFT. I also learnt in case of Bankers Cheques how to verify signature from the book in which all the signatures of authorized persons of HBL are given with their specific code. And I also worked on OBC (Outward bank collection) forwarding schedule. I came to know the process of sending cheques or other clearing instruments for clearance to zonal branch of another region. Filling vouchers Assigning OBC numbers Making entries in OBC register
Job Report
44
time of loading again. Next my main concern was to know about all the aspects of ATM card. I came know about the types, process of issuing ATM card to customers, filling forms, how to activate ATM card, charges of issuing and using ATM card. Then I spent my time in lockers department. I took all the information about the terms and conditions of allotting and operating a locker, types of locker like small, medium and large, charges of using lockers, key deposit (refundable), filling application forms, insurance amount for specific size of locker and etc. I also came to know about the process of operating locker by the customer, how to open the locker with the help of two keys. 1 key in the hand of bank officer (anticlockwise) 2nd key in the hand of customer (clockwise) Customer is allowed to operate the locker in full privacy. Only the customer himself or other person authorized by him can operate the locker. After that bank officer has to take the signature of the customers on attendance register maintained for this purpose. Then my duty was in Accounts department. I came to know the procedure for filling the form to open an account, different types of stamps required and about signature of the staff. Documents required to be attached with the form. Copy of CNIC Utility bill Provisional receipt KYC (Know Your Customer) And how to post an account on system after filling the form. Then I came to know about Saving accounts and different types of accounts in saving category and terms and conditions of each type. 1. HBL Value Account 2. PLS-Savings Account 3. Remittance Munafa Plus Savings Account 4. Daily Munafa Account 5. Daily Progressive Account Then current accounts 6. HBL Business Value Account 7. Current Account 8. Basic Banking Account (BBA) Term accounts 9. HBL Advantage Account 10. Investment plus Deposit FC accounts 11. FC-SB Savings Account offered in 3 currencies, USD (US dollar), EUR (Euros) and GBP (UK pound) 12. HYFFD (High Yield Foreign Currency Fixed Deposit) Available in 1 month, 2 month, 3 month, 6 month and 12 Month in USD, EUR and GBP Assignments (1)During my work in accounts department Mr.Maqbool Ahmed khan (manager operation) assigned me the duty of checking the files of previously opened accounts for any type of discrepancies like utility bill or service certificate of the account holder is attached or not and checking stamps and signature of the staff etc. It was because an audit of these files in the coming month is scheduled. Almost above 50% of the application forms were having discrepancies of different types. This turns out to be very informative experience for me. Deposits are considered as lifeblood for any
Job Report
45
bank to survive. I came to know about the procedure and different types of deposits that customers can maintain in HBL, return rates that a customer can get and other terms and conditions of each type of account. As far as checking the old files are concern it seems boring but from my point of view it was very informative. The learning I got while doing this job would never be easy to get otherwise. (2) Due to my familiarity with their computer software I was given another task of updating account information on their computer system MISYS. Like account holders name, address, CNIC number etc. In case of any problem I was consulting it with Mr.Ehsan. This task gave me more chances to learn about the computer system of HBL and also I can proudly say that I have my own share of working in computerizing HBLs record.
Job Report
46
Job Report
47
Job Report
48 2008
2007
Interpretation:The past two years data shows an improvement in the return on equity which is a positive sign. The Bank should have to continue its policies. By observing the audited account I found that this improvement is due to increase in the Net profit which is good sign.
Return on Assets
Net Profit after tax X 100 Total Assets Net Profit after tax Total Assets Return on Assets
Job Report
49
Interpretation: Return on assets ratio shows an improving trend. This ratio shows that the both the Net profit and Total Assets has improved in 2008 than 2007. But net profit has increased more rapidly.
2008
2007
Interpretation:
Job Report
50
Loan to Asset Ratio is showing increasing trend in 2008. This is because advances are increasing more rapidly than assets of the bank.
2008
2007
Interpretation: Net profit Ratio is giving upward trend. This trend is observed due to increase in Net profit but on the other hand the expenses decreases which shows an efficient management.
Job Report
51 2008
2007
Loan to Deposit
Loans/Deposits*100 Advances Deposits 456,355,507 597,090,545 382,172,734 531,298,127
76.43
71.93
Interpretation: Loans to deposit ratio show an increasing trend in 2008 as compare to 2007. This trend is observed as the advances and deposits both are increasing but advances are increasing more rapidly than deposits.
Job Report
52
Achievements
HBL - 'The Best Emerging Market Bank in Pakistan'
HBL has been selected as The Best Emerging Market Bank in Pakistan by Global Finance Magazine. Global Finance magazine has named the Best Emerging Market Banks in Asia in an exclusive survey to be published in the May 2009 issue. Global Finance editors
Job Report
53
with input from industry analysts, corporate executives and banking consultants selected the best emerging market bank in the region and in 20 countries. Global Finance reports on the international finance sector, covering topics such as corporate finance, joint ventures and M&A, country profiles, capital markets, investor relations, currencies, banking, risk management, custody, direct investment, and money management. The magazine also holds several awards ceremonies throughout the year to recognize the winning financial institutions and companies.
2008 HBL - 'Most innovative Global Trade Finance' award HBL received the 'Most Innovative GTFP (Global Trade Finance Program)' award. The award was received at the International Finance Corporation Annual Trade Conference in Paris where 126 issuing and 145 confirming multinational banks that were present. Mr. Tariq Mateen - Head Financial Institutions Division, gave a presentation showcasing the success of HBL in the global trade financing business. The award was received by Mr. Mateen and Mr. Anwar Zaidi Head Operations. This recognition has raised our profile among a large forum of international banks and paved way for IFC to increase our facility from USD 75 million to USD 100 million which has helped us in creating liquidity in our international network 2008 - 'Best bank In Pakistan' Award
In October 2008, HBL received the Best Bank in Pakistan award in recognition for its continuous efforts in providing world class products and services to customers. Award was received by Mr. Sultan Ali Allana - Chairman. The ceremony in Washington was also attended by Mr. Zakir Mehmood - President & CEO, Mr. Nauman Dar - Head International Banking and Mr. Tariq Mateen - Head Financial Institutions Division.
Job Report
54
Recommendations
As we seen from the previous analysis of the financial statements I have realized that that Habib Bank is performing very well since its inception. It is quite difficult to give suggestion to improve the banking conditions Habib Bank Limited. As we know that nothing is perfect, there is always a room for improvement, so I will recommend following suggestions for HBL:
Job Report
55
1) Employees Training programmes must be introduced on continuous basis so that Employees have understanding with the latest developments especially with the customers. 2) Bank should introduced incentive plans for employees on regular basis so that if employees may work whole heartedly for the welfare of their organization. While giving incentives qualification, work, experience, hard work and such other factors must be considered. 3) Mismanagement of resources must be avoided as much as possible as it decreases profit but also discourage hard worker and honest employees. 4) Fresh graduates must be recruited. As the combination of Experienced and fresh can produce better results and it will improve the efficiency of management. 5) Habib Bank is going towards mobile banking but the problem is that a common client has no idea of its usage due to lack of marketing. I think that a proper marketing programme must be launched for clients awareness. 6) Banks different schemes must be conveyed to the targeted customers so that to have a reasonable share in market. 7) Bank should help the society by providing interest free loans to the Talented Students. 8) Online Banking should be introduced in all the branches. 9) To motivate the employees their remuneration / salaries should be made at par with top tier Banks. 10)Aggressive publicity campaign must be introduced through press and Electronic media for new products and scheme by initiating vigorous marketing policy. 11)Bank should adopt such an induction plan that when a customer opens his account with the bank he should be supplied with a booklet which enables him to know the procedure of filing the cheques, pay-in-slip etc. It will save a lot of time of the bank staff afterward during the conduct of the account of that customer. 12) The attitude of the bankers with all of their customers is not the same; they pay more attention and good service to some of the customers and neglect a major portion of them. Some of the customers approach to the bank officials and get their work done before others; it is not a good practice. All the customers should be treated equally. 13)HBL should increase its communication with customers about the terms and conditions of its different products and services.
Discussing a problem faced by the credit department & recommendations for it: Non-performing loans(NPL);
Job Report
56
These are such loans which are no more profitable for the bank or in other words those loans which fall into the categories of bad debts are called NPL. Classification of NPL: We can classify NPLs into the following categories: 1. Substandard. 2. Doubtful. 3. Loss. 1. Substandard: When markup amount remains outstanding from day 1 to 89th day the particular finance is marked substandard on the 90th day. 2. Doubtful: When the markup amount remains outstanding from 91 day to 179th day then the particular finance is marked as doubtful on the 180th day.
st
3. Loss: When the markup amount remains outstanding above the 180 day then the finance is marked as loss.
th
All the finances in which markup is stuck and fall in particular categories are called classified amounts and are treated as NPL. Remedies to avoid NPL: Banks are taking special measures to avoid NPL by applying different warning systems given by State Bank of Pakistan. SBP has introduces early warning system which is applicable for all commercial/scheduled banks. According to that system any account which will fall in any of the above classification will be regularly monitored and kept in continuous observation. More over these accounts will be in systems early warning category.
Job Report
57
Glossary
GCUF: Government college university Faisalabad D.D: Demand Draft A/C: account O.B: Other Bank O.B.C Outward Bills Collection P.L.S: Profit and Loss Account Dr: debit Cr: Credit C.A: Current Account F.L: Flexi loan L.G: Letter of Guarantee D.F: Demand Finance L.C: Letter of Credit R.F: Running Finance F.A.P.C: Finance against Packing Credit HBL Habib Bank Limited ABL Allied Bank Limited MCB Muslim Commercial Bank NBP National Bank Limited UBL United Bank Limited NIFT National Institutional Facilitation Technologies (pvt) LTD.
Bibliography
Material on these books, articles and websites has helped me a lot in preparation this report
Books
HBL Corporate Profile 2008 HBL Annual Reports 2008 and 2009 first Quarter
Websites
www.hbl.com www.habibbankltd.com www.hblasset.com www.investopedia.com/articles/07/banking.asp wiki.answers.com/Q/Evolution_of_banking
Job Report
58
Index
Annex A: JOB CERTIFICATE Annex B: INDICATIVE RATES Annex C: ACCOUNT OPENING FORM Annex D: REMITTANCES APPLICATION Annex E: DEBIT CARD APPLICATION FORM Annex F: DEPOSIT SLIP Annex G: