A DETAILED COMPANY PROFILE

The Historic Prelude

Sensationally interesting style this financial institution called United Bank Ltd
(UBL) started with, to rise up to one of the few successful bank in Pakistan. Though
faced many up swings and down swings it still maintains its prestige among banks in
Pakistan and worldwide. Here the role of few dynamic personalities and support from
Govt: including Re-Privatization of UBL cannot be over looked, which added to its
capacity, performance and growth.

The sensational start of UBL bank starts up when an innovative and highly pro-
active officer of a commercial bank gets disappointed with the top management of his
bank, quits the job finally not getting things settled as innovatively as he deemed fit for
his bank. Soon joins hands with Sehgal Group and thus gets a chance to express and
implement to prove his great innovative ideas and plans he had. This young man was Mr.
Agha Hassan Abidi and accompanied him Mr. Sheikh Nahyan to accomplish the great
financial institution United Bank Ltd.(UBL)On the 7 th of November 1959.

Soon the working of the UBL so excelled that it gained the top position in 1962
just with in three years of its accomplishment as it highly flourished during 60s and is
quite evident when we notice that UBL started off with a deposit of Rs . 70 million in
1960 which increased at an average annual rate of 47% in 1960s to reach Rs. 2,761
million. Like wise advances rose from Rs. 31 million in 1960 to Rs. 1, 668 million in
1969. The advance-deposit ratio increased from 0.47 to 0.66. Hence profit rose from Rs.
2 million to Rs. 20.3 million in 1969. But this prosperity could not last for so long and
started winding up as during the trend of nationalization in 1973-74 it also was
nationalized in 1974. During this span few other banks were also merged in to it namely;
Bank Bahawalpur, standard bank, Union Bank (not existing Union Bank), commerce
bank and Bank of Sarhad. This nationalization soon started with putting up its adverse
affects leading to a downfall there from. UBL experienced turmoil during 1974-79.
Though nationalized UBL still continued apace in growth momentum. Deposits grew at
an annual rate of 22.7 %. Pre-tax profit rose from Rs.81 million in 1975 to RS. 184
million in 1983. It was actually Tajjammul Husain the then president of UBL who
contributed major efforts to once again take UBL to 1st position during 1984-85 thus had
great silver jubilee celebrations. But this fortune was extremely temporary and fragile as
it soon ended up with the introduction of Unionization in the same era of 1984 and
onward proving to be catastrophic than nationalization.

Thus it led to the worst era in the bank history ever until 1996-97 when
constitution was amended, as 27-B led to Dis-Unionization in UBL. Thus State Bank of
Pakistan (SBP) took over UBL with a new management headed by Mr. Zubair I. Soomro
a well-known international banker from City Bank. SBP soon injected Rs.21 billion in
1998 to UBL to mitigate the bank’s capital deficiency.
 Privatization breezed up UBL on 19th of October 2002 for Rs.12.35 billion for a
bid from MR. Sheikh Nahayan Mabarak Al Nahayan accompanied him Sir Pervez OBE.
Now taking UBL through an extensive transitional phase of change to progress,
prosperity and growth.

UBL At Present
Heading towards the Glory Lost, UBL again
started with the journey to prosperity just a few years ago before its privatization in Nov
2002. Started this era of recovery right after the take over of State Bank of Pakistan SBP
in 1997-8 with a significant changes at larger scale resulting a complete overhauling in
every nip & bud of UBL; that included structural, procedural, technological, strategical,
managerial, financial and directional changes at both macro and micro levels. Thus
proving to be among the top 5 banks in Pakistan again. The top 5 factors contributing to
this productive result orientation are the split of sales and operations, introduction of Hub
system (Based on technically automated systems in spite previous administrative set up),
automation, on line banking and improved quality of corporate governance (now also
recognized and executed through prudential regulations 2003 by SBP).

With its well structured broad based customer net work UBL has a conversion of
administrative set up to a sophisticated technical automated online system of structure,
known as Hub System that includes 88 Automated online Hub branches in each region,
like the 3 Hub braches at Quetta Region (Balochistan), that connects its spoke branches
to the Head office creating the fastest convenient customer service & a base for future
sophistication in satellite communication with all its depth and breadth.

The strategies and policies UBL follows these days are totally unique and
productively innovative in nature with enormous potential to take the ship to the destiny
& bestow a visionary aim to become the world-class bank.

 In its man power manipulation plan notable policy of customer acquisition team
is significant for its strategy of segregation of staff facing customer into two
focused areas i.e. customer satisfaction & market value/ volume.
 Diversification in revenue base underlines the policy of consolidating on core
business i.e. corporate banking as competitive edge and go for diversification in
areas like consumer financing & retail banking.

 To meet the need of customer expectations UBL would function to go for cost
effective improvements and technology based convenience
 On the top of the priority list of UBL stands compliance with statutory
requirements imposed by SBP and improving customer financial position by
verifying needs of segments with focus technique.
  The focused areas of operation includes the emerging consumer banking and a
special target area in this regard is agricultural sector that includes number of
activities,
1. Like agrimal projects, which are single window operation center of
supplies by furnishing shops in major agricultural union councils to help
farmers in farm inputs, lease of sophisticated farm machinery and
advisory services to take farmers towards productivity.
2. Another area to help farmers is solve the problem of poor water treatment
/ high soil salinity in Pakistan for that UBL has joined hands with Sweet
Water International Inc to produce an equipment to solve the problem.
And produce it up till the level of export to generate foreign exchange.
3. Better storage & marketing facilities are some other support

UBL’S Structure, Management &Workforce

Anthropology of the work environment is a must to know in order to utilize
workforce. So here we start up with UBL operations.
UBL at operations
UBL’s business function has been divided into 12 Heads.
1. Commercial Banking: includes the functions of deposits, advances & Foreign
Exchange.
2. Human Resource Department: HRD refers to the human resource management
(HRM) functions of preparing employees to work effectively & efficiently in the
organization. It includes training, education and Development (TED).
3. International Operations: oversees business activities.
4. Country Operations: Domestic business activities.
5. Global Operations & utilities: Global business activities
6. Audit: Audit operations check & balance the activities.
7. SAM: The banks are in the business of risk taking and there are occasions when
economic stocks or business cycles or frequent changes in the policies of Political
Govt. do turn their assets bad and sour. To manage these infects and high degrees
of risk portfolio of Bank’s SAM s are formed, which are staffed with specialized,
experienced expertise. The UBL’s policy to transfer the accounts classified as
Doubtful or Loss as per Prudential Regulations NO.11 to SAM where on case-to-
case basis strategy is developed to manage the account. The salient features of
line of action adopted at SAM are; Recovery process, Litigation &Write offs

8. Credit Policy: Plan for a sound, effective credit risk management.

9. Country corporate Banking Group: to overlook the managerial functions of
branches of different countries.
10. Investment Banking: plan, invest, and regulate public shares.
11. Corporate Affairs/CFO: Corporate level functions are performed under this
head.
12. Global Treasury: plan, invest, and regulate the bank’s reserves.

UBL’s Network:
 UBL’s operations are divided into ten regions Karachi, Hyderabad, Lahore, Multan,
Sialkot, Peshawar, Islamabad, Azad Kashmir, Quetta and Faisalbad. A “Regional Chief
Executive” who supervises the sales functions of the region heads each region. The
Regional Chief Executive would not be involved in routine administrative activities but
would instead focus on business development in the region. Operations side is managed
by the “Regional Operations Head”. These ten Regions supervise 88 “HUBS” which
have replaced the former “Zonal Offices”, which are controlling offices, which guide and
control the stand-alone spoke branches, core banking function are carried out in Hubs.
While the spoke branches handle the day-to-day routine business.
Post Office’s Functions: which directly reports to spoke branches and their function are
to facilitate the customers through collecting the utility bills.
Operational Hub Organogram: Hub System being the strength of UBL could be
well justified as we move through the structural chart within the “Hub operational
system” Which explains wider span of control and bifurcation of sales & operations as
effective composition of centralized authority.

Regional Chief Executive

Regional Operational Head

Proposed
Head Office
Area Manager Branch
Operations
Area Operations Manager

Supv. Cash Supv. Funds Transfer Supv. Customer services Hub E- Coordinator Data Supervisor

Teller Data input

Cash withdrawal Clean collection A/c opening Technical Support/ net End of day
Cash (CHQ deposit) Telegraphic Transfer Cheque books work Distribution of Reports
Cash sorting Mail Stop payment Instalk / update Record Keeping
Clearing/TD Demand Draft Standling Unibank system Data input & checking
License Pay orders instructions Support It/ Telecom Customer voucher
A/c. to A/c. transfer Govt. Sec. Issuance TRD/NDR etc. Related areas
Checks Retorn /encashment Rec Trade Finance
Travel checks Dual control sec. document
ATM stationary Forward to TPC
Cash DD/ PO Loans (limit input)
Lockers
Hold mail
Zakat Certificate
License
Dual Custody Sec.
stationary
 Hierarchy of Operations:
Area Manager Mr. Awan
(AM)

Area Operation manager

Mr. Shahid (AOM)

Banking Manager Mr. Farooqi

(OG1)

Foreign Supervisor Supervisor Chief Voucher & Locker

Exchange Deposits Remittance Teller room incharge Mr.
Incharge Mr. Mr. Saleem Mr.. Mr. Bakir Salahudin (OG3)
Zahir Shah (OG2) Mehboob OG2 (OG3)
(OG3)

6 Assistants 4 Assistants
Clearing Teller 3 (Clerical (Clerical staff)
Mr. Tariq Teller 1 Teller 2 Mr. staff for
Miss Miss Shahid Sorting)
Naseema Farhat (OG3)
(OG3) (OG3)

General Banking
Dispatch Procedure:
1. Record in outward Mail Register with Date usually documents that send are OBC,
IBCA, IBDA, RTC, TT, and IT etc.
2. Code serial No. on Instruments
3. Send to the destination as written on the stamped envelop
4. Write serial No. on envelop as remainder
5. Record Receipt No. got from Courier Service (TCS) according to the serial No.
Given into the dispatch Register
Inward Mail Register
Whatever mail is received record it into inward mail Register.
1.Deposits:
Banking is the service industry. The lifeblood of banking is deposits without which no
bank can function and earn profits.
In order to accelerate growth & increase market share, the bank’s operations have been
organized on functional lines. Sales & marketing have been separated from operations.
The sales staff makes efforts to acquire fresh, cheap/ low cost deposits and market new
products in accordance with the policies advised by HO from time to time.
The operational staff is engaged in operational work, which includes providing prompt,
efficient & personalized service to customers so that the deposits acquired by the sales
team is retained. The branch staff works under the direction & supervision of branch
Sales Manager. He heads the branch.
He allocates & monitors Sales targets allocated to his sales force & also supervises
Operations. A Client Prospect Register is maintained in each branch. Sales visits and
results are recorded in this register against individual names. The results are recorded
daily & are also display on the white board of the branch. These figures are then
conveyed to the Area Manager of the respective Hub & are discussed / reviewed in
weekly meetings at the Hub Branch with the Area Manager. Thus a customer may be
desirous of opening an account in a branch b/c of two factors
• He may be Walk-in-customer
• He might have been persuaded by a Sales call
• The walk-in-customer is directed to supervisor / branch Operations Manager who
assists him in completion of account opening formalities. In case member of a
sales Team mobilizes fresh deposit, assistance from the Sales Staff may be
completed initial formalities of account opening.
In order to increase the volume of deposits and motivate staff members as well, incentive
awards for Sales & Operations Staff are announced (SDIA & BPIA). These facilities Pay-
for-performance culture result in achieving a customer focused organizational structure.
As soon as an account is opened, the responsibility to retain this account rests with
Operational Staff.
Functions At The Deposits Desk:
• Maintenance of Account Opened & Close Register
• Supervision regarding completion of formalities on AOF/ SSC to be sent to Hub

• Posting of Cheques & Vouchers

• Checking of Daily Activity Sheet received from Hub
• Reporting of Stop Payment Instructions, standing instructions to Hub
• Convey information regarding death/ insolvency/ insanity of the customer (if any)
to Hub All work related to cheques book issuance / delivery
• Preparation of consolidated summary of all transactions to be reported to Hub
• Provide confidential reports to other banks, Govt. Agencies & Foreign
Commercial attaches (if require)
• Maintenance & Handling of Time Deposits
• Collection of utility bills
PLS SB ACCOUNTS
• A saving bank account on profit & loss sharing basis.
• It is a checking account with no restrictions on withdrawals.
• Normally the account is opened with a minimum cash balance ofRs.2,000/-
• Profit is paid on monthly balances.
• Profit is paid at the rates declared by ALCO (Assets & Liabilities Committee)
after every six months. It is credited in the account on a six monthly basis.
• Profit is calculated on monthly product basis. The lowest credit balance between
the close of business on the 1st day and the last day of calendar month is treated as
the product of the month.
• Profit on PLS SB Account is subject to withholding Tax at the prescribed rate.
Presently it is 10% of the profit amount.
• PLS SB Account is subjected to Zakat. Zakat is deducted on the 1st of Rarnzan of
every year @2.5% on the credit balance classified, as "NISAB" Exemption may
be claimed on submission of CZ-50. Account holder may furnish this form a
month before Ramzan.
• A guardian may open on account in the name of a minor.
• Introduction of account by an active saving bank account holder/CD Account
holder of the same bank or another bank is required. Introducer should be a
valued account holder. Staff of the bank, holding power of attorney may also
introduce the account.
• The prospective customer is required to furnish a copy of NIC. It will be verified
from the original and copy retained.

RESTRICTIONS:
• Only one account shall be opened in one name.
• Over draft facility is not allowed.
• Accounts shall not be opened in the names of Local Bodies, Autonomous
Corporations, Companies and Firms.
• Introduction by a Dormant Account Holder is not accepted.

PROCEDURE FOR OPENING A SB ACCOUNT:

The following procedure is adopted:

• AOF/SSCs and relevant annexures are supplied to the prospective customer.
• The Deposits Desk in filling the forms provides assistance-.
• Customer furnishes proper introduction.
• If introducer is an account holder of the same branch his signatures are verified
from specimen signature card and status of account is also checked after
 satisfaction, signature of introducer is verified by affixing "Signature Verified"
stamp near the signature. If introducer maintains his account at other branch or
another bank, the AOF is sent to the concerned branch with a covering letter for
verification of introducer's signature. Account is opened after receipt of AOF.
• Copy of NIC is retained after verifying it from the original.
• Complete name, address/addresses and telephone Nos. is obtained from the
prospective customer on AOF.
• Specific instructions with regard to operation of account are obtained on AOF and
SSCs duly signed by the Account Holder.
• Signatures of Account Holder are obtained on the AOF & SSCs and "Signature
Admitted" stamp is affixed.

• AOF is entered in the Account Opened & Closed Register, which is maintained in
a serial order.
• Approval of Supervisor/Branch Operations Manager is obtained on AOF.
• Account number is allotted from the Account Opened Closed Register & from
check digit sheet supplied by IT Division / Hub.
• The customer is supplied with the Pay-in-Slip book and is requested to deposit
cash with the teller.
• The teller receives cash. "Received Cash" stamp is affixed on both portions
of the Pay-in-Slip. Counterfoil is returned to the customer remaining portion
is retained by the teller.
• The teller posts this in the Active ledger & the supervisor counter signs it.
• Signatures of customer are obtained on the chequebook requisition slip.
• The customer is requested to collect the chequebook after three days.
• The account opened is reported to Hub through Name & Address Pick-up and
Amendment Form (Comp. 693) with full details.
• Letters of Thanks to introducer an Account holder are sent the same day for
confirmation of particulars.
• Chequebook requisition is either sent to Hub after verification of customer's
signatures or to NIFT, as the case may be for issuance of chequebook.
• In case of NIFT, chequebook requisition is retained at branch and full particulars
are noted on card provided by NIFT.
• Chequebook is delivered to the Account Holder after 3 days.
• The AOF & SSC are sent to Hub, after completion of all formalities.
• The remaining SS Card is placed in the Card box in numerical order.

PLS-SB ACCOUT:
For each Zakat year the AGZ will announce through press and other public
information media the date of deduction and will also specify the level of balance
which will determine whether or not an account is subject to deduction of Zakat at
source. The branches will therefore, deduct Zakat on that day, from all such
accounts which carry a credit balance exceeding that amount on the morning of the
valuation date. Any account, which carries a balance less than notified balance,
will not be liable to compulsory deduction of Zakat at source.

CURRENT DEPOSIT ACCOUNTS (CD):

In case of Individual's Current Account the same formalities and procedure is adopted
except the following
INDIVIDUAL
• No restrictions on withdrawal.
• No profit is paid on this account.
• No restrictions on No. of transactions.
• The account is to be opened with a minimum amount of Rs.I0, OOO/-.
Another Operative current account holder having well average balance or any
• authorized officer of the bank can only introduce it. In case of introduction by any
SB Account holder manager's prior approval is must.
• Incidental charges are recovered @Rs.250/- per half year (Flat) on non-
remunerative CD Account i.e. where the average balance is below Rs.l0,000/-
These charges are recovered in June and December each year. These charges are
to be credited to income A/c incidental charges recovered.

JOINT ACCOUTS:
At the time of opening any joint account clear and specific instructions shall be obtained
regarding operation of the account and payment of balance to the survivors or surviving
member in the event of death of one or more joint account holders which may be in any
of the following forms:
• Any joint account holder shall operate the account singly.
• By either of survivors singly.
• By any two or more joint account holders or by any two or more survivors jointly.
• By all the account holders jointly.
• By all the survivors jointly.

These instructions, as for as possible shall be obtained in the handwriting of the account
holders under the signatures of all the joint account holders.
No overdraft shall be allowed in the joint account unless all the parties to the account
signed the request jointly and charge documents in respect thereof are also signed by all
of them.

ILLITERATE PERSON'S ACCOUNT:

-

Accounts of illiterate persons can be opened provided he is a major, the. Following

formalities are completed and precautions taken:

• Two attested photos, one to be pasted on AOF and the other on SS Card. ~
Introducer should sign in presence of Manager/Acting Manager/Officer
• Incharge.
• Following stamp should be affixed on account opening form, SS Card and on
cheque leaves.
"Thumb impression to be affixed in presence of bank officers". Obtaining thumb
impression on the AOF should authenticate these instructions.
• Only the Manager/Acting Manager should fill in the cheques for an illiterate
person.
• Left hand thumb impression is affixed in place of signature for males. In case of
female right hand thumb impression is to be affixed.
• Account of illiterate Purdah Nasheen Ladies is not to be opened. however, an
illiterate lady contract by affixing her right hand thumb impression on any
document.
• An illiterate customer must come personally to operate his account because he
must put his thumb impression on the cheque in the presence of the bank officer.
• An illiterate account holder should be advised not to issue cheques payable to
other persons either for cash payment or for collecting in clearing under no
circumstances overdrafts shall be allowed in the account of minor.

PLS UNI SAVER ACCOUNTS:

Uni Saver Accounts are opened in a similar manner as normal PLS Savings
Accounts. AOF and chequebooks are affixed with stamps titled
"Uni saver accounts".

Eligibility:

• Individuals.
 • Firms (Sole Proprietorship, Partnership)
• Companies. (Private Limited and Public Limited)
• Trust and Associations.

Minimum balance requirement Rs.100, 000/-

Withholding tax and Zakat:

Deduction wherever applicable as per Government directives.

Profit:
• Special tiered rates of profit are admissible for Uni Saver Accounts.
• Minimum monthly balance between first & last day of each month
• Will be used only for picking out the applicable tier-wise rate of profit.

ACCOUNTS OF PROPRIETORY CONCERN:

.
• Sole proprietorship is a business unit whose ownership and management
are vested in one person. This individual assumes all risk of loss of the
enterprise and receives all profits from successful operations.

• Manager of the preparatory concern should not be allowed to operate the,

account unless proprietor of the firm has signed Declaration Form II
provided on the reverse of account opening form.
• The name of the manager should be entered in the account opening form
and his specimen signature be obtained on Specimen Signature Card.

Mode of signature
Signatures of the proprietor under column "Yours faithfully" are obtained in his
personal capacity while signature on SS Card are obtained in official Capacity.

Precautions in opening of CD account:

• AOF with required documents to be obtained.

 • Account Opening Form should be complete in all respects, preferably in the
presence of a bank officer.
• Cutting overwriting should be avoided.
• Specific instructions regarding operation of account should be obtained
duly authenticated.
• Proper introduction to be obtained.
• Account should be opened with Cash.
• Letter of Thanks to Account Holder and Introducer to be sent.

 Partnership accounts, Accounts for companies also can be opened with

complete documents
 If there is not any type of transaction in the account will be considered as
 “Dormant Account”.
 CD accounts not operated for 2 years & saving account not operated for 3 years
will be classified as “Inoperative account”.
 In case of death of any account holder his/her account will be considered as
 “Deceased Account” & no Dr. transaction can be take place in that account
without permission getting by the court

ISSUANCE OF CHEQUE BOOK:

Customer submits cheque requisition slip at teller's window

Teller/supervisor:

• Receives cheque book requisition

OR
• Obtains requisition on form No. b (Dep.372) and letter of indemnity form No.
(Dep.373) in the absence of cheque book requisition slip.

• Writes date and time on the requisition slip

• Verifies signature.

• At the end of the day forwards chequebooks requisition to prepare summary of all
chequebooks requisitions received during the day and towards to Hub branch
along with other documents/vouchers.

Hub branches:
 • Prepares chequebooks and forwards to respective spoke branch on the following
working day.

• Charges are debited to customer's account

• Enters chequebooks numbers in the system.

• At the end of the day Hub Branch prints daily activity report, which shows all
chequebooks numbers, issued to different customers.

Spoke branches:

• Delivers chequebooks to customer against acknowledgement

• Spoke to ensure updating of chequebooks numbers in the blue ledger

PAYMENT OF CHEQUES AT THE TELLER'S WINDOW:

In case the cheque is presented for cash payment, it must be checked that:

• Branch name, Date, Amount in words and figure is correct.

• It has not been crossed.

• If the cheque is payable to order, the signature of the payee has been duly
Verified.

• The account number and the title oft!1e account given on the cheque is in
conformity with the account number and the title of account in the ledger.

• The number of cheque tallies with the cheque series noted in the account

• . The drawer has not stopped the payment of cheque.

Clearing:
 When the cheques are presented in the clearing it must be ensured that:

• Cheques is crossed and clearing stamp of the collecting bank is affixed

on the face of the cheque.

Cash Payment against Cheques • The clearing stamp and crossing stamp are
of the same bank.

• It bears correct date

• It has been presented through the clearinghouse, in usual clearing hours.

• If it is specially crossed to a certain bank, it has been presented through

That bank only or its agent.

• The collecting bank discharge is in order

• If there are crossings and stamps of other banks, the same have been cancelled by
those banks.

CANCELLA TION OF CHEQEUS:

• Teller must keep all the duly admitted specimen signature cards in his
• effective custody under lock and key.

• Before verifying the signature of the drawer, teller must refer to the
• specimen signature card of the account holder.

• Teller also must keep a magnifying glass for close examination of

• Cheques when necessary.
• Teller and supervisor must cancel cheques of big amount over Rs. 25, 000/-
jointly.
Cancellation is done by waving a red line across the signature of the drawer of the
cheque. The teller must sign in full in red ink near the drawer's signatures.

PROCESS FLOWCHART
 Customer

Teller
1. Customer presents the cheque for payment.
2. Obtains bearer signature on the reverse of the cheque.
3. Scrutinizes cheque for validation.
4. Verifies signature.

Supervisor
1. Checks Stop payment
2. Marks balance in the blue ledger
3. Supervises cheques over Rs.25, OOO/-

Teller:
1. Obtains bears signature again on the reverse of cheque to ascertain
that
2. The payment is being made to the person who presented the cheque
3. Receipt of payment
4. Makes payment to customer
5. Write denomination on reverse of cheque
6. Affixes paid stamp with date & sign cheque
7. Takes approval of payment of cheque for Rs. 25,000/- & above from
the supervisor before making payment
8. After balancing of cash onward all the cheque along with
supplementary sheet to Hub branch

Hub Branches

1. Posts all cheques in the system.

2.At the day end prints out daily activity report and forwards to
StopSpoke
payment
branch of
for cheque:
verification against entries in the blue ledger.

Party submits written instruction at Spoke branch:

1. Supervisor:

• Writes date and time on the Stop-payment request

• Verifies' signature
• Notes stop payment detail in the blue ledger
 • Stop-payment request is forwarded to Hub branch for necessary action along with
other cheques/voucher;/documents.

2. Hub Branches:

• Confirms from the system whether cheque is paid or outstanding, if outstanding,

the stop payment is marked in the customer's account
and stop- payment register is updated in the system.
• Acknowledgement letter is generated by the system and mailed to the
customer under copy to spoke branch.
• The stop payment instructions are filled in respective spoke branch
file in numerical order.
• The stop payment is shown in the daily activity report printed at the end of the
day.
'
• Charges are recovered from the customer.
3.Supervisor at Spoke Branch:

-Confirms stop-payments instructions are recorded in the system as per

request from the daily activity report.
2.FUNDS TRANSFER PRODUCTS (REMITTANCES)
Remittance means transfer of funds from one place to another place. The
following modes are available to a banker for transferring the money from one city to
another city.
1. Demand Draft (DD)
2. Telegraphic Transfer (TT)
3. Mail Transfer (MT)
4. 4.Rupee Traveler Cheque (RTC)
5. UniRemote (Discussed in IT Portion)
In addition to the above issuance and payment of Pay Order is also handled by the
remittances department. For transferring of money within the city. Mail transfers can
also be used.
All commercial banks provide these services to their customer and non- customer on
very nominal charges. The schedule and rates of commission / other charges are
announced on half yearly basis.

1.DEMAND DRAFT
 It is negotiable instrument issued by one branch of a bank and payable by another branch
of the same bank.

Demand Draft can be issued to customers as well as to non-customers against, cash

cheque and letter of instruction.

PROCEDURE FOR ISSUANCE OF DD:

• Purchaser is asked to fill up a DD application form. He gives following information
on DD Application forms.

1. Name of the payee

2.Place of Payment
3.Amount of Demand Draft.

• Purchaser is also supposed to write his name and address on the back of DD
application form (if he is non-account holder) or his account number.

• Commission Charges are calculated accordingly and written in the cage provided on
Demand Draft Application Form for this purpose.

• If the Demand Draft Application Form is completed in all respects, purchaser is asked
to deposit the case

• Teller receives the cash for DD (including commission, Excise Duty &
Withholding Tax) and affixes "Received Cash" stamp on DD application
foffi1. After receiving the cash, DD application foffi1 serves the purpose
of HO credit voucher. The particulars of DD are recorded in receiving
cashiers book, and voucher is given to remittance desk / Supervisor.
• DD instrument is prepared with the help of DD application form (Two
types of DD leaves are in used One is for Rs.5, 000/- and over and other
for below Rs.5,000/- particulars of DD are recorded in Demand Draft
issued register, separate folio is allotted in Demand Draft issued register
for each branch. The serial number of Demand Draft is noted on Demand
Draft application form.

• The amount of Demand Draft is protecting graphed by using prortectographing

machine.

• Demand Draft is signed by two att6mey officers, single attorney branch

• May issue Demand Draft for amount below Rs.5,000/-
• After completion all the formalities Demand Draft is handed over to the
purchaser. Acknowledgement is obtained on the back of counterfoil of
Demand Draft block and on Demand Draft application form.

• Following entry is passed.

Dr. Cash (Amount of Demand Draft + Commission + WHT)

Cr. HO Account (Name OF Drawee branch)

Cr. Income Account Commission on Inland Remittances
Cr. Sundry Deposit Account with Holding Tax // (Not applied If party
provide NTN)

• As at the close of counter hour, Demand Draft application form and

• Vouchers for all the DD's issued during the day will be sent to Hub.

• At Hub IBCA will be generated through system and mailed to Drawee

• Hub.

• IBCA ABOVE Rs.25, OOO/- will be tested / authenticated before dispatch.

Issuance of demand draft against cheque:

• Account Holder of a branch tenders a cheque along with the Demand
Draft Application Form for purchase of Demand Draft. Cheque is drawn
for the amount of Demand Draft plus commission and W .H. T etc.
• Cheque is sent to deposit Incharge for posting in the ledger. If there is no
discrepancy and funds are available in drawee's account, cheque is posted.
Posting is made in the blue ledger / system.

• After posting of cheque in the account, Demand Draft application form

cheque and voucher for commission are stamped for "Cash Transfer".
• The other procedure for issuance is like that of issuance against cash.

Issuance of demand draft: (Against letter of instruction)

• Verify signature of the party on Letter of Instruction. If sufficient balance
is available in the account, party account is debited on pal1y debit
• Voucher for the amount of Demand Draft, Commission, and With Holding Tax.
Demand Draft Application Form, party debit voucher and Credit Voucher for
commission are stamped for "Cash Transfer"

Payment of demand draft:

 • Demand Draft may be presented for payment;

• Over counter for Cash payment

• For credit of payee's account in the branch
• Through Clearing

• Following Points are checked

• Genuineness of Demand Draft must be ascertained e.g.; signature, date, DD
Number, Protectograph, amount words/figures crossing etc. every thing should be
in order.

• DD, which is presented in Clearing, must bear the stamp of collecting bank and
proper discharge stamp.

• As the spoke drawee branches have no IBCA /Information for DD, must be
extra vigilant regarding identification of payee and genuineness: Of Demand
Draft.

• Spoke drawee branch may contact the respective Hub in case of larger amount of
DD and if the particulars of DD are not satisfactory.

• If every thing is in order and DD is genuine it is paid by the spoke drawee

branch.

Following entry is passed;

Dr. Other Assets Account DD paid without Advice
Cr. Party's Account or HO Account for Clearing or Cash
Demand Draft (paid) along with all the vouchers of the day will be sent to
respective Hub.

At HUB
When IBCA is received at Hub, it is responded after scrutiny and Verification of
signatures. Particulars' of DD (e.g. DD Numbers, Date, Payee's name etc.) are posted in
DD reconciliation program

Issuance of duplicate demand draft:

The issuing branch on written request of the purchaser issues duplicate Demand Draft, if
DD is lost or misplaced by the payee or purchaser.
Following procedure is followed:
 • Purchaser's signature on the request letter is verified from DD Application Form,
or through Specimen Signature Card.
• A letter under joint signature (Attorney Officers) is mailed to drawee Spoke
branch and drawee Hub, to mark caution and confirmation regardmg
payment/non-payment of Demand Draft.
• If the reply from drawee spoke branch/Hub contained the information regarding
payment of original DD, purchaser is informed accordingly and no duplicate
Demand Draft is issued.
• If drawee spoke branch/Hub confirms that the original Demand Draft is not
paid by them and caution has been marked in DD payable register/system. The
purchaser is asked to sign the letter of indemnity (Remitt.237) on appropriate
value of adhesive stamp. Two respectable account holders witness it.
• The letter of indemnity is recorded in safe-in-safe register. It is kept in safe
custody of Manager and Remittance Incharge.

• A blank leaf of DD is taken and all the particulars identical to the original DD
(Which is reported lost) are written on the Demand Draft. A stamp with the
following narration is affixed on the face of the Demand Draft.
"Duplicate DD issued in lieu of Original DD No. Dated reported Lost"
• Duplicate DD is protectographed and signed by two attorney officers.
• Particulars of duplicate Demand Draft are recorded on DD issued register and on
DD application form. Duplicate DD is handed over to purchaser and
acknowledgement is obtained. A particular of Duplicate DD is also intimated to
Hub.
• Charges for issuance of Duplicate DP are recovered.
• A letter is send to drawee spoke branch/Hub regarding issuance of
• Duplicate DD
• Purchaser’s request is attached with indemnity.

Cancellation of demand draft:

• Purchaser's written request for cancellation of Demand Draft (refund of c

amount) along with the original Demand Draft is received at issuing Spoke
branch.
 • Signature of the purchaser is verified from Demand Draft application form /
Specimen Signature Card / Counterfoil in DD block.

• Genuineness of the Demand Draft is ascertained and it is confirmed that it was

issued from our branch.
• Before cancellation of Demand Draft it is also ensured that no duplicate draft
has been issued.

Refund of amount:
• If the purchaser is our account holder than amount of Demand Draft is credited in
his account, otherwise refund is made through Pay Order. Refund of amount by
Cash is not advisable.

• Following entry is passed:

Dr. Suspense Account DD Cancelled
Cr. Bills Payable Account Pay Order Issued
OR
Cr. Party Account
Cr. Income A/c Cancellation Charges
• The original Demand Draft is defaced by affixing "Cancelled" Stamp on the
face. The portion of signature is tom out or punched.

• The cancelled Demand Draft is stamped with the simple debit voucher and sent
to Hub.

• A letter is sent to drawee Hub with request to reverse the entry in their bills
payable account DD payable and send the IBCA.

2.How to make a (Telegraphic Transfer) T.T Message:

• T.T / M.T application form is filled by customer or by officer on behalf of the

customer in which a/c No., amount and name & a/c No. Of the receiver is written
including complete information about sender.
• Apply Test on application by the 2nd manager and manager, which is simply called
“DMA” codes
 D= Date
  M= Month
 A= Amount
 Branch codes (Key No.)
 Serial No. Code
• After coding officer will make T.T on printed T.T Message paper that includes
branch name, date, test No, Name of person who will receive this amount and his
account No. (specimen is attached in appendix)
• If receiver has not account in this bank so he will be able to get cash from counter
which will be mentioned by the officer on T.T message
• T.T messages are always sent in UBL from Hub to Hub
• Record in T.T issue Register
o From where this application is received
o In that branch’s Hub where customer wants to send it
• If more than one message is there used another printed T.T message by the officer.
(Specimen is attached in the appendix)
• Bank will charge 0.10% commission on 1 T.T message usually minimum charges
are Rs.50/ T.T Message.
• One carbon copy of T.T Message is for office folder record must be prepared
• If there is any mistake found in Decoding from received Hub, officer will again
send a “ T.T Message Revised / correct Test (Specimen is attached in appendix)
• If T.T message ahs no mistake then received branch will pay or simply “Cr” the
customer a/c.
•
Procedure for payment of TT:

• One receipt of Telegram from issuing branch. Test is agreed.

• Test agreed stamp is affixed on telegram, Manager and Remittance Incharge

signs it.

• Particulars of TT are recorded in TT Payable Register.

• Following entry is passed (message Advice & Credit)

Dr. HO Account issuing branches

Cr. Bills Payable Account TT Payable
Dr. Bills Payable Account TT Payable
Cr. Party's Account

• If the message is advice & Pay, then-TTR is issued to the payee. Number of
TTR is noted in TT payable register.

• Following entry is passed;

 Dr. HO Account Issuing Branch
Cr. Bills Payable TT Payable
• On presentation of TTR, it is paid and date paid is marked in TT Payable
register.

• Following entry is passed.

Dr. Bills Payable Account TT Payable

(TTR becomes debit voucher)
Cr. Cash or H.O. A/c for Clearing
3.Issuance of mail transfer (MT):
• Under this method, transfer of funds is advised through MT advice. It is used
for transferring the funds within the city or outside the city. In case of local
MTS (within the city) test is not applied whereas the out station MT are
always tested.

• MT advice conveys two types of message like TT, e.g. advice and payor
advice and credit.

Pay order:

• The Remittances Department on request of the customer/non customer issues

payment Order when he deposit amount in the bank.

• Since payment through a cheque is doubtful, Pay Order is generally

acceptable by the Govemment /Private; Institutions. Sometime parties also
prefer to make payment through Pay Order, as they have an
acknowledgement (proof) of payment.

• Payment of telephone bills of bank, Clearing Adjustment, disbursements of

Finance, Income Tax etc. are also made through Pay Order.

Procedure for issuance:

• Pay Order Application Form (Remitt.232) is filled up and signed by the
purchaser.

• Amount of Pay Order plus Commission, is deposited at Teller Window or

Party Account is debited by cheque or through party debit voucher (as the
case may be)
 • Pay Order instrument is prepared and signed by two authorized Officers.

• Particulars are recorded in Pay Order issued register (Remitt.225). It is

handed over to the purchaser against acknowledgement ("payees account
only" crossing stamp is affixed on the face)

• Following Entry is passed:

Dr. Cash or Party Account (Cash/Cheque)
Cr. Bills Payable Account Pay Order issued
(Pay Order issued Application Form)
Cr. PLS Income Account Commission on Inland Remittance
Cr. Sundry Deposit Account With Holding Tax.

It is called bank’s check, issued by bank for local payments fore people fore safety
purpose. Usually use for the payment with Job Application form. (Specimen is attached
in appendix

Payment of pay order:

• Pay Order is presented for payment in Clearing. In rare case it may be presented
for cash payment on counter if it was issued uncrossed (open).
• Genuineness of Pay Order is ascertained, date paid is marked in Pay Order issued
Register.

• Following entry is passé

Dr. Bills Payable Account Pay Order Issued
(Pay Order becomes debit voucher)
Cr. Cash or H.O. A/c for Settlement of Clearing

S. D. R (Security Deposit Receipt): Used in Tender Notice etc.

4.Rupee traveller cheques (Hamrah):

UBL has always been at the forefront in identifying and meeting the
financial needs of its valued customers. UBL was the pioneer in
introducing Rupee Traveller Cheques facility in Pakistan, as early as 1971.
In continuation of the same tradition, UBL in the shape of "Hamrah"
Rupee Traveller Cheques enhances this facility for the convenience of its
valued customers by offering denominations up to Rs. 10,000. UBL
"Hamrah" has been designed keeping in mind, both convenience and
 security - be it business, property, trade or personal needs. "Hamrah"
Rupee Traveller Cheques are the ideal and safest way of carrying cash
when traveling anywhere in Pakistan.

Hamrah RTC's are now accepted at more than 2000 places such as
hotels, shops, real estate agents, jewelers, car dealers, etc and of course at
all our UBL branches. UBL has a 24-Hours customer help-line, providing
its customers with round the clock
tele-verification of "HAMRAH" traveler cheques.

Salient Features

• Bank Commission Rs.5 per leave & at least Rs. 50, No Excise
Duty

• Denominations: Available in denominations of Rs. 10,000 and

Rs. 5,000

• More convenient, more secure

Higher denominations of Rs. 500,000 & Rs. 100,000 to save
customers from the inconvenience and insecurity of carrying
large sums of cash

• Easily transferable and encashable:

• Available to all

• Ease of immediate assistance in case of loss or theft

• Special facility of refund

• Valid until encashed:

Secured with specially "Coded" printing and "RAIN BOW
Effect" for added security

How to Issue R.T.C:

• Customer who wants to purchase R.T.C will fill application form

of R.T.C. this application form has 3 sheets,

A: Issuing Branch Credit Voucher

B: For R.T.C Deptt. Karachi

 C: Purchaser’s Copy
This form includes branch name, which is issuing R.T.C, amount, type of R.T.C
either A1 (Rs.10, 000) or E2 (Rs.5, 000), name of purchaser, address & Telephone
No. (Specimen is attached in appendix)
• Customer submit cash or check or authority letter on counter
• Customer will sign on R.T.C on the lower left corner & now he/she can use these
R.T.C anywhere in Pakistan

If R.T.C has lost from Customer:

• Report in written form in the nearest branch of the bank about misplacing of
R.T.C.
• In issuing branch give an application named “Claim for Refund of lost or Stolen
Traveller Cheques” with one attested ID copy, FIR copy, RTC’s purchaser’s
original copy and Indemnity form with Rs.200 stamped paper must be attached
with application.
• The officer will verify signature of purchaser
• Two witnesses whose accounts are maintained in the same branch will be signed
on the application & Indemnity form.
• All these documents will be send to R.T.C department H.O Karachi
• R.T.C, H.O Karachi will send a remainder to all braches & branches will record
R.T.C Numbers as lost in their books.
Encashment of R.T.C:

• All the requirements of R.T.C must be fulfilled & checked from

the officer before paying to the customer

a) Two times signatures of the purchaser must be same

b) Officer’s signature must be verified

• Taller after posting give cash to the customer this is simply called “On
counter R.T.C payment

• Record the entry in the R.T.C encashment Register

Transfer of R.T.C in account:

R.T.C can be simply “Cr” in the receiver’s account

• Receiver will give it to his/her own bank where account exists

• Bank will give it into clearing

 • If R.T.C is cleared UBL will give cash to the concern bank &
that bank wills “cr” it’s customer account or if R.T.C isn’t clear
then give it to the customer with reason why isn’t clear

• If there is stamped “payees a/c only” on R.T.C then cash

payment is not possible and simply “Cr” in customer’s a/c &
stamped “cash transfer”

3.Foreign Exchange
The functions perform in this departments are
• Dealing of all foreign currency
• All import export dealing
This department completely follows the “Foreign Exchange Manual” published by SBP
after every 10 years. Now-a-days all banks follow its “Eighth Edition---2002). In this
SBP makes amendments with the passage of time according to the instructions given by
“Ministry of Finance& Commerce”. All dealing of foreign currency is with the help of
“Rate Sheet” of that particular day. Accounts can be opened in the following currencies
• Dollar (at least 1000 dollars)
• Pound (at least 750pounds)
• Euro
• JPY (Japanese Yen)
If amount in the account is less than given limit bank will Dr.5 dollars per month from the
account. When customer opens the account in Foreign Currency his/her booking will be
in the “Head Office”. HO has a dealing room and International Treasury Dept. deals all
the fluctuations in the rates of the different currencies. In banks any currency can be
converted in to the Dollars b/c dollars has the value in every part of the world as compare
to other currencies.

(UBL’s Home Remittance)

Free Doorstep Remittances With-in the country or from abroad, UBL offers the
most efficient and price competitive service. With our large network of branches,
we are poised to offer you service almost at your doorstep.

UBL's new remittance service, TezRaftaar offers all overseas Pakistanis the
fastest and the most convenient delivery of their money to their beneficiaries in
Pakistan. Best of all, TezRaftaar is completely cost free and is available at all
UBL branches along the Bank's Network in the Middle East, UK and US.

Check out it's great benefits:

 • Fastest delivery to your given address in Pakistan with in 48 hrs
• Doorstep delivery by authorized courier
or credited to the recipient's account
• Free of charge transfer service
• Open to all including those who are
not UBL account holders

Complete reliability of transaction

Procedure:

• Customer will fill the application form

• Branch send instrument to HO

• Concern branch of Bank will receive TezRaftaar though

HO

• Branch will give cash payment to the concern person or

simply Cr. His/her account and send an IBDA to HO

• HO wills Dr. the parking account

The Money Gram money transfer service was started in 1988 by integrated
Payment Service a US based division of First Data Corporation (FDC), a data
processing company. At that time, American Express owned FDC.

In 1996,Money Gram Payment System Inc was floated on the New York Stock
exchange. Money Gram Payment System is based in Denver USA. There is call
center located there;
it handles transactions for all non-automated agents and answers queries from
customers on a 24-hour hotline. Money Gram has a world -wide agent base of
over 29,000 agents, which allows customers to transfer funds around the world
within minutes in over 130 countries. The Money Gram service will enable our
customers to send and receive funds in 10 minutes.

Money Gram is a 10-minute person-to-person money transfer service, which is

quick and reliable and allows customers to send money worldwide.

UBL is providing MoneyGram Service through its domestic branch network:

Key benefits:

• Reliable and Secure

• Fast and Convenient
• Value for Money
• Expanded Network

Free Message service

Import & Export:

Importer must be

• Member of CCI
• Clear in sales & income tax
• Pakistani (Nationality)

For import & export purpose must take the help of LC (letter of credit) & always
opened on the demand of buyer. Pakistani Govt. issued a list of “-ve commodities” &
these cannot be import in the country.

Letter of Credit (LC):

A letter of credit is an instrument or document issued by a bank on behalf of a customer,
authorizing a beneficiary to draw a draft or drafts or sometimes without the requirement
of a draft(s), which will be honored on presentation by the bank if drawn in accordance
with the terms & conditions specified in the letter of credit.

It is a written undertaking by a bank (issuing bank) given to the seller (beneficiary) at the
request & on the instructions of the buyer (applicant) to pay at sight or at a determinable
future date a stated sum of money against the required documents. The documents
includes commercial invoice certificate of origin, insurance policy or certificate & a
transport document relating to the mode of transport used etc.

Documentary credits are, therefore an arrangement of security for the parties involved
provided by the bank in the form of a conditional guarantee. The conditional guarantee is
related to the documents only & not to the underlying goods or services.

Types of L/C:

There are 4 types of payment tenors by which different types of letter of credit can be
differentiated from each other. The payment methods are as under;
 1. Sight Letter of Credit
2. Acceptance Letter Of Credit
3. Letter Of Credit available for Negotiation
4. Deferred Payment Letter Of Credit

1.Sight Letter Of Credit:

In case the credit calls for a sight draft on the issuing/advising/paying bank, & the seller
submit all the documents including Draft to a nominated or authorized bank i.e. a bank in
beneficiaries country complying with all the terms & conditions of the credit, he receives
payment against negotiation. Sometimes, a letter of credit available by “Payment at
Sight” is also established without the requirement of the bill of exchange.

2.Acceptance Letter Of Credit:

In case, the credit calls for a Usance draft on the issuing/advising/paying bank, & the
seller submits all the documents including Usance bill of exchange to a nominated or
another bank complying all the terms & conditions of the credit, the seller receives the
acceptance of the payment at maturity date. However, under a separate arrangement he
may get his Usance draft discounted by the bank in order to meet his cash flow
requirement. In such case he/she has to bear discount charges.

3.Letter Of Credit Available For Negotiation:

If the credit provides for negotiation to pay without resources to drawers and/or bonafide
holders in terms of credit. “Negotiation means the payment of value for draft(s) and/or
document(s) by the bank authorized to negotiate complying credit terms. Mere
examination of the documents without giving of value does not constitute negotiation”.

4. Deferred Payment Letter Of Credit:

When the beneficiary does not require finance & is prepared to provide trade credit
relatively for a longer period to the importer, a deferred payment credit is arranged. It
follows the normal form as in the case of irrevocable undertaking of deferred payment
against documents. The amount availed of is not put at the seller’s disposal immediately
upon surrender of the documents, but only after lapse of the specified period. A deferred
payment credit allows the buyer a grace period. On the other hand, the seller is assured
that a bank will make payments on due dates.

1.Establishment Of Letter Of Credit:

Procedure for Establishment Of Letter Of Credit:

The person, applying for establishment of L/C, must be registered as importer with
Export Promotion Bureau (EPB) under the Registration order, 1993 or exempted from the
provision of the said order. Before any L/C is established, the L/C opening bank verifies
the registration or other wise exemption. In addition to registration, the importer applying
for establishment of letter of credit for an amount exceeding Rs. 45,000/- during a
financial year produces a valid certificate of membership of at least one of the trade
organizations licensed & recognized by the Federal Govt. A category passbook is issued
by EPB for the registered importer specifying his category. The category passbook is
centralized with the designated bank’s branch of the city. The application of L/C can be
received at any branch of UBL. However, only a few of the branches are authorized to
establish L/C. Non-authorized (Non Exchange Dealing) branches route their parties’
applications, to an authorized branch. The authorized branch in such cases requires the
certificate from the applicant branch that the approval was obtained & required margin
was recovered & retained.

2.Application as agreement:

Credit application form is an agreement between customer and bank on the basis of
which L/C is opened. This form contains an undertaking that the importer would
purchase the import documents from bank at marked up price as well as undertakes to
retire documents within 20 days. This is a prescribed form bearing Adhesive Code Stamp
of the amount as prescribed by Provisional Govt. from time to time. It contains the
following information:

 Name and address of Importer

 Name and address of exporter
 Amount in Foreign Currency
 Terms of Credit
 Description of Goods
 Origin of Goods
 Port of Loading and Discharging
 Last dates of shipment & Negotiation
 Foreign Bank Charges
 Terms of Shipment: Part Shipment & Trans Shipment
 Insurance Cover Note/Policy No & Name of Insurance Company
 Forward Booking
 Mode of Transmission
 Import Registration No.
 Any other Terms & Conditions agreed between buyer & Seller
 Details/Documents required by Importer

Security of L/C Application:

The L/C application should be checked/scrutinized considering the following
points;

 Is the customer a client of our bank & maintains Current Account with the
branch. The address of importer is complete & confirmed
 Does signatory authorize the L/C application signed by with his stamp on
stamp paper of appropriate value.
 Has the signature on L/C application been verified by the bank officer.
 Is the L/C application completely and properly filled?
 Is the tenor of L/C clearly mentioned as at sight or Usance?
 Has an authorized person authenticated any correction e.g.
cutting/deletion/addition.
 Is it clearly mentioned to establish L/C at booked/un-booked exchange
rate with specific period
 Does the customer have a valid Import Registration Certificate (IRC).
 Is the item to be imported allowed under Import policy/ HS Code under
free list?
 Has the Performa invoice/Intent been issued by the Exporter/Indenter on
letter head duly signed and accepted by opener showing detailed
description of goods along with total value and unit price, terms of
payment attached with L/C Application.
 The name and the address of the Exporter is correct and complete as
provided in Performa invoice/indent.
 Does the insurance cover the amount of L/C plus 10% by an approved
insurance company. Within per party risk limit and acceptable risk clause
covering goods detailed in Performa invoice/ indent attached with L/C
application.
 Is the branch holding latest credit report of the beneficiary (where ever
applicable).
 Has the amount of L/C been converted into the required currency and
selling rate as per rate sheet supplied by Treasury Division has been
applied and endorsement made on the application.
 Is the L/C amount unit price and description of goods as per Performa
invoice/indent?
 Is Pakistan the country of destination of goods
 Is the country of origin as per performer invoice/indent not contrary to
exchange regulations
 Origin of goods is not of and from the country, which is prohibited by the
Govt. of Pakistan
 Is the mode of shipment clearly defined in L/C and is as per current
exchange regulations
 Is proper date of shipment and negotiation mentioned in L/C application
 Is L/C commission/margin (if any) and other charges properly calculated
and record on the back of L/C application
  Has the liability position of the customer been attached and cleared by
Manager
 Ensure that the port of shipment is not prohibited under Import policy
 Has the competence authority granted approval foe establishment of L/C

In case of any “No” in the above, the processor shall refer the application to
manager/ unit incharge of the branch and keep application pending till
clarification / completion.

3.Approval for establishment of L/C

After security of the documents, the L/C form along with attached documents is put
before the manager in case of Retail Banking group branches and corporate head in case
of Corporate and Industrial Banking Branches for approval.

4.Fixation of margin:

The competent authority fixes margin considering customer credit worthiness as well as
SBP/Head office conditions of margin requirements.

5.Credit Report Of Exporter

Before establishing L/C the branch should obtain credit report of beneficiary directly
from foreign correspondent or through Trade Information Department. President credit
report requirement of L/C is for L/Cs of Rs 500,000/- and above.

6.Forward Exchange Booking

At the specific request of Importer forward exchange is booked for specific currency,
amount and validity through the rates published by Treasury Division. 5the forward cover
is available for a maximum period of six months. The forward exchange is booked for the
currency in which the L/C is to be established.

7.Foreign Correspondent:

L/C is advised to the Exporter in the exporters country through foreign correspondent.
Selection of foreign correspondent is based on the following:

 Through our own branch operating in that country

 Through any branch of nationalized bank or
 Through foreign correspondent as the case may be

HAJFORMS:
Green Forms are meant for Regular Hajj Scheme pilgrims opting for Government
accommodation Pink Forms are meant for Regular Hajj Scheme pilgrims opting for
Private accommodation. Light Blue Forms: are meant for Open Hajj Scheme.

All the three Hajj Forms contain two page instructions in Urdu as an integral part of the
Hajj Form. All those applying for Hajj must read these instructions carefully. Applicable
costs for each of the three Schemes (Regular - Government accommodation, Regular -
Private Accommodation and Open Hajj) are given in the Hajj Application Forms.

HAJJ FEES payable at the time of submission of Hajj Application

Forms
Under Open Hajj Scheme, the intending pilgrims must arrange return air
ticket and accommodation in Saudi Arabia at their own cost

All the pilgrims will be provided Hajj passports by the Ministry of

Religious Affairs at respective Hajji Camps. No intending Hajji is required
to obtain an International Passport.

Hajj Flights
Hajj flights will be from FIVE places in Pakistan. They are
Karachi
Lahore
Islamabad
Peshawar
Quetta

Other
Each applicant is required to provide 10 photographs - colored in 4x3 cm
size. Four photos will be pasted on Hajj Application Forms while six will
be returned to the intending pilgrims duly attested, for future requirements.

Four small booklets, collectively titled Anwar-e-Haram containing

general instructions, Manasik-e-Haj, Prayers and Ziarat will be distributed
to pilgrims free of cost by the Ministry of Religious Affairs well in time

Meningitis vaccinations will be provided and inoculation certificates will

be issued to each pilgrim at their respective Hajji Camps.

IMPORTANT
Those intending Hajj is who do not possess the National Identity Card
issued by NADRA are required to obtain the same urgently. Without the
new National Identity Card from NADRA, you will NOT be allowed to
proceed for Hajj.

Those opting for Private accommodation are required to provide original

documents duly attested by Director (Hajj) Jeddah by October 30th 2003
to the Ministry of Religious Affairs, Islamabad. Failure to do so will result
in rejection of their applications. Details of the required documents are
given in the Hajj Application Forms.

Please note that the Mehram of a Lady MUST accompany her FROM
Pakistan. The lady will NOT be allowed to leave for Hajj from Pakistan
without her Mehram. The Mehram must remain with the lady ALL the
time during Hajj. The Mehram MUST also accompanies the lady BACK
to Pakistan.

PROCEDURE FOR SUBMISSION OF HAJJ APPLICATION

FORMS

1. Contact the nearest Branch of United Bank Limited

2. Collect the Hajj Application Form. It is FREE of cost

The GREEN Form is for those who wish to take GOVERNMENT

accommodation in Mecca and Medina under the REGULAR SCHEME
The PINK Form is for those who intend to take PRIVATE
accommodation in Mecca and Medina under the REGULAR SCHEME
The LIGHT BLUE Form is for those who intend to perform Hajj under
the OPEN HAJ SCHEME

3. Complete ALL relevant sections of the Form properly

4. In case you have still not obtained or received the New National
Identity Card from NADRA, you can use your existing National Identity
Card to complete the Form. Please note that you will be allowed to
proceed for Hajj ONLY if you have the NEW National Identity Card
issued by NADRA " If you do not have the new National Identity Card
issued by NADRA, please contact NADRA for issuance of the new
National Identity Card immediately.

5. Please ensure that ALL the relevant sections on PAGE 6 are properly
completed
The Medical Certificate on Page 6 MUST be signed by a Doctor who is
registered with the Pakistan Medical and Dental Council and his
registration number MUST be clearly mentioned in the proper place.

6. Submit the completed Hajj Application Form with the proper payment
to the designated Branch of United Bank Limited

UBL provides locker facilities to its valued customers at very

reasonable charges
 Locker room is very safe & sound having double grill, double lock
& strong room door, which have two keys one for manager & one
for officer.

Procedure of getting Locker:

• The customer in the bank must open any type of account

• Dealing must be through instruments e.g. check, TT, DD

etc

• Commit ion of locker can be given through check or in the

form of cash. UBL takes one-year advance & this deposit is
refundable

• Locker application form will filled by the customer or

officer on behalf of the customer. (Specimen is attached in
appendix)

• Locker No. & key No. Allot to the customer

• Entry will be recorded in the “Client locker register” & at a

time on computer system

• Customer can use locker jointly having a formality of

“either or survivor”. (Specimen is attached in appendix)

• When customer come for operating the locker sign in the

“Locker Attendance Register” with date, time & locker No.
& after verifying the signature will be allowed to open the
locker

Central branch UBL Hali Road Quetta has 510 lockers

 Type of No. Of Bank
Locker lockers annual
available charges
in branch per
locker

Small 432 Rs. 2000

Medium 36 Rs. 2500

Large 36 Rs. 3000

Extra 6 Rs. 3000

Large

Rate pf charges are fluctuating according to the conditions & bank

policies. Every locker has individual key which No. Is different from the
locker No. Locker can be opened from two keys one is with officer named
as master key & 2nd is locker’s key.

If customer loss the key of locker:

If customer loss the key of locker must inform to the locker in charge as
soon as possible & fill a form of loss of key then he/she will be able to
make a new key for the customer maintenance charges will be beard by
the customer side

(Specimen is attached in appendix)

Break of locker:

In case of break of locker officer and client must be present at that time
(Specimen is attached in appendix)

If customer wants to surrender the locker:

If customer wants to surrender the locker he will fill a form (Specimen is

attached in appendix) & at that time can take back the key deposit from
the officer (Specimen is attached in appendix)

Voucher Room:

As the name tells there all the documents of this branch plus all stuff of
spoke branches under this Hub sort. All TT massages, MT, DD, RTC,
SDR, Pay order slips, credit slips of different companies whose accounts
exists in this bank, their related vouchers give all this stuff a proper shape
of documents. The basic purpose of this recording& maintaining all the
documents hard copies for bank record. All the spoke braches report to
Hub at every day end they send all the documents hard copy to voucher
room, then work of this department starts. They sort, classified,
categorized data date wise, branch wise, instrument wise and record it.
This department maintains 1-year data in their hand then shift to godam &
after 10 years no document or instrument has legal value. They also write
letter of thanks to the customers who open their any kind of account and to
the introducer whose account is already exist in the branch.

Cash Room:

This is the most important & dangerous department of the bank b/c cash is
situated physically here. Bank can take 1.5% of cash of its deposits in its
hands. Cash room incharge is Chief Teller and responsible of all the cash
in hand even for a single penny and prize bounds of shuck period (Close
the selling of bounds for 2 months).

Cash can be in the form of

• Unsorted notes

• Reissue notes

• Solid notes

• Defected notes

Assistants of chief cashier make packets and bundles of notes under his
supervision b/c all cash must be given to SBP and they only accepts in
bundles form as

• 100 notes = 1 packet

• 1 bundle = 10 packet

• 1 series = 10,00000 bonds

In this department all the registers of receiving cashier book, paying

cashier book, daily cash in hand position, opening balance, closing
balance etc are maintained by the incharge. As this is the central branch’s
cash department so all the spoke braches send their excess cash to here &
can ask if necessary.
ICU (Internal Control Unit):

ORGANIZATIONAL CHART OF INTERNAL CONTROL UNIT ((ICU)

PRESIDENT

COUNTRY OPERATIONAL
HEAD

COUNTRY ICU HEAD

BRANCH ICU STAFF

ICU Head in the branches shall be designated by County ICU Head, who will be the
competent authority to manage overall domestic ICU affairs.

Definition:

“Internal Control Unit (ICU) is an independent appraisal function established to examine

and evaluate the adequacy and effectiveness of the business’s system of internal controls
and quality of performance in carrying out assigned responsibilities.”
Purpose:

The internal control unit has been established to create effective control environment in
the branches and Head Office (HO) to achieve error free / zero defect operations. It is
basically for performing and monitoring vital independent as well as departmental control
functions that are critical to the ongoing health of the branch.

The ICU staff is independent of the activities they review. They are independent such that
they can carry out their work freely and objectively. They are impartial and unbiased
which is essential to the proper conduct of reviews. Since the units work independently,
the Country ICU Head should directly supervise its reporting/work and under no
circumstances Branch Management should influence their day-to-day work.

Functions:

Following are key functions for the effective management of business:

• Independent verifications, proofs/balancing and reviews:

Independent verifications, proofs / balancing and reviews are conducted under
the direct responsibility of the ICU Head, who will utilize his staff members in
meeting these requirements.
• Departmental verifications, proofs / balancing and reviews:
Various review, proofs and verification functions are required to be carried out
by operating departments under the supervision of Branch Management,
however shall be monitored by ICU staff.
• Departmental control function checklists (DCFC):
The DCFCs against processing of all products are maintained by respective
departments and are duly reviewed / initialed by the direct supervisors to ensure
compliance to all related principal control points/functions. ICU is responsible
for monitoring the correct execution of these functions at departmental level.
• Corrective action monitoring:

ICU shall be responsible to ensure that the branch on the exceptions pointed out by State
Bank of Pakistan (SBP), internal and external auditors, takes corrective actions.
The basic purpose of this department is complete checking and advising to operations &
day-to-day routine work and be prepare braches to the annual & surprised internal and
external audit. ICU checks overall work plus individual check and balance of the braches
who are under this Hub. They do monthly surprise advised visit to all the braches and
also assign them rates according to the directions from the HO. Which can be Excellent,
AA, A, BA. The staff members of this department are directly reported to HO of ICU,
which is situated in Lahore. ICU is responsible to check any type of misunderstanding,
problem in the braches and also answerable to HO. ICU can send confidential reports to
HO about the performance of any employee of the bank.
ICU can check in branches
• Cash in hand position
 • One window operation
• Employees Behavior and dealing with customer & Co-workers
• No. of Dormant accounts
• No. of Deseed accounts
• Attendance of employees
• Maintenance of all Registers etc.

IT Department (Information Technology):

Data Supervisor Mr. Asif Najam Hub Mr. Ali Sikandar Regional
Mr. Sarwar (OG2) Electronic Coordinator Electronic Coordinator

Assistants (clerical Staff for

posting purpose)

UNIBANK PLUS:
UNIBANK PLUS consists of a set of programs, which are executed, in the computer to
perform various functions related with account keeping and other information processing
requirements of a bank branch. These programs are basically of tow types, i.e. online
programs (or front office programs) and offline programs (back office programs).

The online programs can be run simultaneously from any number of terminals placed in
the branch. Their main function is to accept transactions or other information being
entered and to post these on to account records. When a bank branch computerized by
using UNIBANK PLUS, all record keeping related with customer and GL accounts is
transferred on to the computer. The on-line program is a tool for keeping this information
up to date and also for making it available for display on screen when required.

The on-line banking programs are run on most of the terminals during banking business
hours. In addition to carrying out transactions posting in customer, general and subsidiary
ledger a/c, these programs also carry out many other functions, which include:

 Opening of new customer account

 Closing of customer account

 Altering the status of customer accounts

  Recording of cheque book issued or canceled

 Recording or releasing stopped check

 Blocking of amounts or releasing of amounts

 Maintenance of customer a/c static information

 Display or printing of customer/GL statements

 Group function and account linkage

The programs also allow the user to display the essential information of customer a/c
with latest balances. Similarly, a transaction display feature enables the user to look at all
or selected financial transactions entered during the day. A group display facility allows
instant display of customer accounts linked together.

SWITCHING ON:
Normally the computer operator switches on the computer. Each computer will then be
switched on with the operating system log in prompt appearing on the screen. When the
operator enters his/her operating system user name and password the sign-on screen is
displayed. The operator must sign on to get started in UNIBANK PLUS.

SIGN-ON PROCEDURE:
The sign-on procedure is mandatory every time access is required to the system for any
purpose. First the branch code must be entered. A valid branch code will be decoded and
the branch name displayed. To terminate at this stage, the [End] key must be pressed.
Next, the employee number of the user is to be entered. This is validated and decoded by
the program and if found to be valid, the name of the person is displayed. The
confidential password of the user is accepted, one character at a time but is not displayed.
The users own password is supposed to be known only to himself/herself so that access to
the system may be prevented. If an invalid password is entered, the program allows two
retries after which a long audible beep is given and the system returns to the operating
system login prompt. A valid password brings the cursor to the Department code. The
users own department code and name appears if [Enter] is pressed, else the department
code must be valid and authorized to the user. The system dates are also displayed. Now,
press [Enter] for the main menu (screen 2.1) of UNIBANK PLUS for selection of any
required function.

START-OF-DAY PROCEDURE:
The sign-on procedure is executed on one terminal at start-of-day. After the operator has
signed-on through screen 2.0 (as given above), the entry of certain dates is also required.
Enter the date to be processed against TODAY’S DATE displayed on the screen. If this
date is different from the system booting date entered when starting the computer, a
warning will be displayed. In such a situation, the computer operator should decide
whether to continue or not by responding Yes or No.
The NEXT WORKING DATE is normally one day greater than the posting date unless
there is a weekend or holiday.
The Clearing Date should be the date on which funds of outward clearing cheques would
become available. As explained in the system description Manual, clearing transactions
(or other) may be entered with a future value date in which case the amount of these
transactions will appear as Float Balance against the account until arrival of the value
date when it will be transferred to Available Balance of the account. In case, however,
clearing credit is received on the same date on which transaction are posted, the clearing
date may be given as today’s date. In the same manner Transfer Delivery Date may be
given as a future date or today’s date as required. In both these cases, whatever date is
given here will be automatically used as “value date” in clearing and transfer delivery
transactions unless overruled by the person keying in by giving a different date.
The difference in days between the posting date and the clearing/transfer delivery dates is
user-specified. Any discrepancy is highlight with a warning and the user can choose to
continue or re-enter the dates.
At this stage, any clearing/transfer delivery schedule transactions entered on the previous
working date, appear as today’s transactions and are also reflected in the account balances
as Float Amount. Fixed Deposit accounts maturing on today’s date will also be
capitalized (if required) and updated as today’s transactions.

MAIN MENU PROCESSING:

UNIBANK PLUS has a very easy-to-use pull-down menu through which all functions of
the system can be selected. To select any function, the operator simply uses the associated
function code within the main functions of Banking, Maintenance, Enquiry, Reports and
Housekeeping.
Functions displayed with the symbol “>” indicate further sub-menus.
Operators on different terminals except the Housekeeping can use each function
simultaneously which must be run in single-user mode.

SIGN OFF:
Whenever an operator or supervisor has completed his/her work or wishes to move away
from the terminal, he/she must sign off to prevent unauthorized access to the system. In
order to do so, the letter “s” for sign-off can be selected from any option of the main
menu and then the [Home] key pressed. When a person signs of, the system is not
available on that terminal until an authorized person signs on as described earlier. While
in the sign-off condition, the screen 2.0 will continue to be displayed to enable efficient
sign on by the next person.

TERMINATE:
The system can be terminated at any of the terminals if it is no longer required. This
would be necessary if the user has completed his/her work for the day. The user can
terminate by pressing the [End] key from the sign-on screen. Such termination will stop
the execution of UNIBANK PLUS at this terminal only it will continue to run at other
terminals from which it has not been terminated.
In order to access the system from the same terminal again, follow the sign-on procedure
given above.
Before initiating Housekeeping at the end of the day (to be handled by the computer
operator), financial transaction posting must be terminated from ALL the terminals.

BANKING:

FINANCIAL TRANSECTIONS:
From the main menu (screen 2.1), select banking and then financial transaction. Screen
3.1 is now displayed for further selection. The Financial Transaction posting option can
be selected after start-of-day and can be continued till Housekeeping being for the current
day. The security level of the operator must be 50 or above to access this option.
The system processes cash, clearing transfer delivery and transfer transaction in single
entry or batch mode. Batch entry transactions are only allowed for cash and transfer. Cash
trisections include all cash withdrawal and cash deposits in the branch accounts. Clearing
transactions are inward when cheques drawn on customer accounts are presented at other
banks and outward when cheques are drawn on other banks but presented at the user bank
branch. Transfer delivery transactions are similar to clearing except that they pertain to
branches of the same bank. Transfer transactions pertain to different account of the user
bank branch.
Once the selection for the mode has been made, it is possible to change the mode from
within the program instead of returning to the menu. To change, enter the required
alphabetic character and press [Enter] at the Account Number field:
“C” for CASH
“R” for CLEARING
“T” for TRANSFER DELIVERY
“X” for TRANSFER
“B” for TRANSFER BATCH
“S” for CASH BATCH
When cash, clearing and transfer delivery transactions are entered in single entry mode,
their contras are automatically generated and posted by the system in the appropriate
General Ledger account. For example all single entry cheque payments will result in the
CASH ON HAND account to be credited with an equal amount.
The transactions in batch mode must be balanced on completion of batch i.e., the credit
amount must equal the debit account. The system caters for a maximum of twelve entries
per batch. One document number is allotted to a batch and each individual entry is
identifiable with a two-digit serial number.
The transaction entry mode is selected by giving the appropriate function code in screen
3.1 or by placing the cursor on the required function and pressing the [Home] key. One
restriction, however, must be kept in mind that after selecting the mode, the program
crosschecks the entry of transaction description code with the mode selected and
conflicting entries are not allowed. For example, it would not be possible to enter a
transaction description code for clearing, if the cash mode for posting financial
transactions has been selected.
Prompts and automatic movement of the cursor control entry of transactions. The
program accepts the entry of transaction field by field. On-line validation takes place of
each field entered and at the end of all fields, the operator has to respond to the Accept,
Modify and Reject options. In case of acceptance, a document number is displayed at the
bottom of the screen.

CUSTOMER ACCOUNT:
The first three digit of the customer account number indicate the customer ledger
(account type), which links the account to a particular category e.g., saving account,
Current account etc. The serial number with in the a/c type consists of four digits b/w
0001 and 9999. The customer a/c must be present on the customer table failing, which it
is a new a/c and must be opened before the transaction can be posted. If the a/c is already
being processed in the up date mode by other terminal, an appropriate massage is
displayed and the operator can try the a/c again a little later. For Term deposit a/c the a/c
opening and maturity dates are displayed along with the available and ledger balances.
For minor, illiterate, parda nasheem, dormant, inactive and no-correspondence a/c, an
override is required for posting in a restricted a/c.

SUB-LEDGER A/C:

A sub-ledger a/c number always begin with the letter “G” so that system
can distinguish it from a customer a/c. the other six digits are always
numeric.

CUSTOMER TYPE:

The customer type determines the type of customer e.g. Individual,

Partner, Proprietor, Club, Society, Govt., etc. each record contains a two
digit code and a 25-character description.

CUSTOMER ACCOUNT MAINTAINANCE:

Customer a/c maintenance includes opening of new a/c, amendments of existing a/c, and
activities connected with financial transactions such as issuing cheque books, amending
limits, changing a/c status, etc.

ACCOUNT OPENIGN/AMENDMENT:

An account opening form is filled with all the required details of the a/c. This information
is keyed in either through this option or if the operator has a security level of 80 or more,
the financial transaction posting will allow an a/c to be added. The details, which can be
added or amended, are as follows:

 Reference a/c number.

 A/c opening date

 Maturity date

 Receipt number

 Account name

 Address

 Joint account

 Authority level

 Statement frequency

 Statement copies

 Account status

 Residency

 Customer type

 Country code

 Economic sector

 Flags

 Nationality

 N.I.C number

 Date of birth

 Passport number

 License number

 Telephone number (resident/office)

 Interest/profit

 Interest effective date

 Computation code
  Frequency code

DEPARTMENT:
The number of such records would be the same as the number of departments in a branch.
Each record contains a 2 digit Department Code and a 25-character department name.

BANK:
Each bank has an allotted code in the system. The bank code consists of two digits, and
the bank name consists of 30-character.

TRANSACTION DESCRIPTION:

Certain transaction codes are pre-determined by the System as can be seen

from the financial transaction details option 3.1.1.2. The operator can add
new records for frequently used descriptions. Each record contains a two-
digit code and a 25-character transaction description.

SUPERVISION:
UNIBANK PLUS has a real time, on-line supervision feature. Under this feature
financial transactions in customer and sub ledger a/c are to be supervised by an
authorized person before they have accepted by the system.

CHEQUE BOOK:

Cheque books can be issued or cancelled stopped for payment or stopped

cheques released through this option.

ISSUE CHEQUE BOOK:

The user can determine the number of chequebooks allowed to a customer.

A default value can be given for the ledger in the customer ledger option
of system maintenance. In case, the number of chequebooks issued
exceeds the maximum allowed, the operator has the option to delete any of
the existing chequebooks. If no chequebook is deleted before another one
is issued, the system will increment the number of chequebooks allowed
automatically.

CANCLE CHEQUEBOOK:

This option is use to cancel an entire chequebook or any range of cheques

with in the chequebook. The cheque number must exist on the customer
a/c record and should not have been used, cancelled or stopped.
Stop cheque:

To stop a cheque for payment it must not already have been presented for
payment or been stopped or cancelled. The cheque number must be with in
the range of chequebooks issued to the customer.

RELEASE CHEQUE:

To release a cheque or series of cheques, it must have been stopped for

payment previously.

REPORTS:

Select this option from the main menu for printing of required reports.

UNIREMOTE:
UNIREMOTE System is designed to perform transactions between any two
UBL Branches over WAN (Wide Area Network) with the assurance that the
information will be secured by taking security measures like VPN, encryption
etc. UniRemote is not in direct access of the customer but it is the system
between branches where they can make online transactions with each other on
behalf of UBL customer. All UBL online branches on WAN will handle the
UniRemote Operations. Customers can make transaction from any of the
selected online branch in any city.

Today we have 73 online Hubs running UniRemote all over the country. It will
be extended to the remaining Hubs and the large Spokes in the near future.
Transactions of staff members and a few internal transactions are being done to
test the robustness of the system.

This system is integrated with Unibank. Transactions / facilities presently

permitted in UniRemote are as follows:

 Cash Deposit
 Cheque Encashment
 Stop Payment
 Account Statement
 Funds Transfer (Account to account / IBCA)

II. System Architecture

UniRemote system is integrated with Unibank but its architecture is flexible

enough to function as a stand-alone system. UniRemote system architecture
comprises of three main components, which are as follows:
 UniRemote Cell / Controller: Controller of the system at HO level
 Local Branch: Any branch initiating transaction will be called Local
Branch
 Remote Branch: A branch on which the transaction is targeted is called
Remote branch. A Remote branch could be an online Branch or an
offline Spoke (only credit transactions in offline branches).

III. Reports

Following are the main reports to be generated from the UniRemote system.
1. Non UniRemote Customer list
2. Inward Transactions
3. Outward transactions
4. Inward stop payment
5. Outward stop Payment
Advances:

Introduction:
Loan making activities are the lifeblood of not only the banking industry but in many
ways for the whole economic system of the country. The decisions of a banker in landing
can make the bank or can break the bank. The decision whether or not to accede not a
customer proposal for advance is very important. If the decision is right, the bank will
prosper but if the decision is wrong than the advance will probably get stuck-up & the
bank will be faced with possible loss. However, all the decisions must be taken after
insuring that they fulfill all the legal & regulatory requirements laid down by the SBP
from time to time. The understanding & the principals applicable in extending credit are
the jugular of the bank. The lack of it, sheer ignorance or violations of the norms of
landing by a banker can neither serve the interest of the depositors nor his community.
Taking risks is our business. A bank that is running on the principal of avoiding all risk
will be stagnant institution & will not adequately serve the legitimate credit needs of the
community. On the other hand, a bank that takes the excessive risks surely runs into
difficulty.
Suggestions & Remedies:
1. Bankers can serve the economic needs of the country & community by the sound
extension of credit & can simultaneously earn adequate return to built equity &
reserve besides a good return to depositors.
2. It is imperative that a banker understands his responsibilities by a applying
thoroughly the lending principals, observing them in such a way, which should be
beneficial for the bank & the community without putting the interest of the bank
in jeopardy.
3. The principals of the sound lending practice have been enunciated through
decades. The kinds of credit are now so broad that not only one person can be
authorized. So management by consensus must be practiced.

Products:
Finance

Fund Based Non-Fund Base

 Import Letter of Credit

Category of Borrower
 Personal Loans
 Commercial & Trading Loans
 Manufacturing Loans
 Staff Financing
 Food Grains
 Construction Material
 Textile Spinning & Composite
Type of Financing
 Term Finance
(Running & Demand Finance)
 Bills Purchased
 Agricultural Finance
 Seasonal Financing
(Sight/Usance)
 Inland Letter Of Credit
 Performance guarantee
 Bid Bond
 Advance Payment Guarantee
 Payment Guarantee
 Financial Guarantee
1. Fund Base Financing:
Bank provides loans to the customers on the basis of funds. In Fund base-financing Bank
helps its customers in his/her financial requirements. Bank plays the role of financial
institution & lends money. The requirements of “Fund Base Loans” are different for
different types of loans. Different categories of borrowers & finances are as under:

 Personal Loans are such loans, which are, lend for the personal use of the
borrower.
 The purpose of Commercial & Trading loans is to provide funds to those who
need financial help in their trading or commercial line of business.
 Manufacturing loans lend to the manufacturing industrial units.
 The financing through, which only the employees of the bank can be privileged, is
categorized as staff financing.
 Financing against such customers who want financial help for the purchase of
food & grain items.
 Financing against building, architecture & construction material is called
“Construction Financing”. Usually such financing is done to the architectures,
constructors, & builders etc.
 Textile Spinning & composite financing is done to the customers who are related
to the textile industry.
Different types of finances are:
 Term Finances are of the maturity of over 12 months with a fixed repayment
schedule. Running & Demand Finance is the types of Term Finance. Running
finance is also called “ Non Interest Cash Financing (NICF)” & Demand
Financing called “Non Interest Demand Finance (NIDF)”.
Running Finance:

Running Finance or overdraft is most commonly used among all other

finances. Withdrawals on the current account are allowed in excess of the
credit balance to the tune of approved limit, which the customer has
maintained. Purpose of this finance is to meet day-to-day overhead
expenses of the business.

Account is freely operated, funds come into the account when sales are realized and
funds go out when company is in need of money.
It is normally secured against hypothecation of stocks and collaterally secured against
mortgage of property.

Demand Finance:
A fixed amount of financing accommodation is allowed to borrower for a fixed period,
repayable in periodic installments or in bullet payment. It varies from short term to long-
term period of time. Purpose to fill the short-term liquidity gap, normally against
hypothecation of stock and mortgage of property. It is also used for money market
transaction.

Agriculture Credits:

Short Term Farm Credit: Grower Finance-Seed, Fertilizer, and

Pesticides.

Short Term Non Credit: Livestock, Dairy, Poultry, Fisheries, and Forestry.
Long Term Farm Credit: Development Finance for Tractor, Tubwle, Farm Machinery
and Land improvement.

 Loans against the agricultural needs are come under the agricultural loans.
 Seasonal Financing is done for the seasonal agricultural products like rice paddy.
 Bill Purchased

2. Non- Fund Based:

Bank takes the guarantee of the customer at non-fund basis & it only stands on the
behalf of the customer for his/her financial transactions. As bank is a credible entity
on which other parties can relay, so different businesspersons use bank guarantees &
letter of credits for their import & export & other business requirements. the types of
non fund based loans are:

 Import letter of credit (as discussed in “Foreign Exchange” portion.

 Inland letter of credit facility will be allowed to the customers against inland
documentary bills. In case of dishonor of such instrument the related parties
account shall be debited & simultaneously the drawer shall immorality be
asked for arrange for sufficient funds.
 Performance Guarantee: at the request of customer the bank may issue
performance guarantee for guarantying completion of work & supplies as per
terms of contract.
 Bid Bonds: The bank may issue Bid Bonds in lieu of deposit of earnest money
against bids for tenders
 Advance payment Guarantee: Bank may guarantee the amount of advance
payment made to the customers for satisfactory performance of a contract or
other work as specified in the guarantee.
 Bank may also guarantee the amount to be paid by the customer for
satisfactory performance of a contract.
 Financial Guarantee: At the request of the customer bank also guarantees the
financial positions of that customer to ensure the credibility of the
performance of the business & reliability of the borrower.

For the present UBL is offering amongst other the following major products:

1. Policy credits
 2. Short term credit facilities
3. Term loans
4. Syndication
5. Project financing
6. Guarantees and bonds

1. Policy credits:
Policy credits are allowed in such cases where policy considerations are preferred over
normal credit standards. The President on the recommendation of Credit Committee may
permit the approval of sound credit proposals of policy credits on an exceptional basis.
All the politically sensitive credits above Rs.10.00 million as well as credits linked with
persons holding public offices shall be approved by the highest credit committee and
submitted before the Banks Board of Directors for ratification within two months.

2. Short term credit facilities:

Short-term credit facilities are used only to satisfy identified short-term needs of clients
with satisfactory tract record and are considered when normally the financing is not
liquidated within one year.
The Bank may allow the following short term credit facilities generally known as
working capital/running finance which have a tenor or validity of one year or less.

• Cash credit (CC)/non interest cash finance (NICF)

Under this type of financial accommodation the borrower is allowed withdrawal in the
current account to the extent of their limit sanctioned. The facility is generally provided
against pledge or hypothecation of goods or any other tangible security acceptable to the
Bank. The customer would be required to adjust the advance periodically or within a
specified period.

• Export finance (FAPE/LAPC):

The bank may provide facility against pre shipment exports at agreed rate of return.
• Foreign bills purchased-on account (FBP-A):
This is a post shipment finance facility. In order to avail this facility a limit is processed
at the request of the party. The bank at agreed rate of return extends this facility. This
facility is allowed against export document under collection. For these finances the Bank
should preferably hold collateral securities.
• Foreign bills purchased-against L/C (FBP):
The Bank may extend financial accommodation through negotiation/discounting at
prevailing exchange rate, of a foreign documentary bill accompanied by the relevant
documents of title to goods. For financing of export bills drawn under L/C the branch
shall ensured that:
 That document has being dawn strictly as per the terms of the L/C.
 All direct expenses that is foreign correspondent charges, claimed by the
opening Bank/reimbursing Bank, if any, shall be recoverable from the
 exporters unless it is express in the L/C that the charges are on openers
account.
 Due care and necessary precaution are exercised before
negotiating/discounting of documents, as per instruction issued by head
office from time to time.
 Reimbursement instructions in L/Cs shall be carefully studied before
negotiating/discounting of documents.
• Payment against documents-under sight L/C (PADs):
Import documents received under sight L/Cs are lodged in PAD, which is released on
payment from the party. The import documents are checked, strictly in terms of the L/C,
to insure that there is no discrepancy. In case of a discrepancy in the documents, the
negotiating bank must be immediately advised by telex/cable regarding such discrepancy
and dealt with accordingly. In case of import documents received free of discrepancies
the amount of the bill, plus charges, if any, claimed by the negotiating Bank, would be
converted into Pak rupees at the exchange rate prevailing on the date of lodgment or at
the booked rate where exchange was booked at the time of opening L/C as advised by
that Treasury Division from time to time.

• Inward foreign documentary bills for collection under Usance

(DA) L/C (IFDBCs):
Import documents received under DA LCs are lodged in IFDBC and released against:
a. Acceptance of Bill of Exchange and execution of trust receipt.
b. Pledge of imported goods.
c. In case goods are pledge with the bank, goods will be cleared through Banks
approved clearing & forwarding agent and delivery orders issued against cash
receipts.
d. Collateral security against mortgage of property, pledge of Government Bonds,
Postal Deposit Certificates, Banks own Deposit Certificate and Life Insurance
Policies duly assigned in banks favor. For relaxation in obtaining collateral
security, approval of competent authority will be required.
• Finance/loan against Trust Receipt (FTR/LTR):
The bank may at the request of the customers, at the time of opening of L/C or at a later
stage, release the import documents of related goods received under L/C or against bills
under collection both inland of foreign, to enable the party to obtain delivery of the goods
and arrange to retire the documents out of the sale proceeds of goods or from other
sources. The documents of title are delivered against the customer’s signature on the
prescribed Trust Receipt form/related security documents covering hypothecation of
goods.
• Finance/loan against imported merchandise (FIM/LIM):
Whenever necessary at party’s request the facility for financing imported goods against
import Letter of Credit established though bank made available on the basis of mark-
up/interest for a short period not exceeding ninety (90) days. The financing may be repaid
within the validity period either in part or in lump sum.
• Inland bills purchased (Documentary/Clean):
It is allowed to customers against inland documentary bills, cheques, draft etc. In case of
dishonor of any such instrument, the related party’s account shall be debited and
simultaneously the drawer shall immediately be asked to arrange for sufficient funds in
his account for adjustment.
Beside the above-mentioned products, UBL is providing various fund based/non-fund
based facilities to its clients such as overdrafts, loan against salary, LLM etc
.
3.Term loan:
Term loan extended by the bank have of maturity of over 12 moths or over 360 days with
a fixed repayment schedule. The bank may consider extension of term loans to such
transactions that fulfill the following conditions:
• It generates incremental earnings.
• Its tenor is not more than 7 years including the grace period. In case the tenor
exceeds the period of seven years specific approval of competent authority will
be required.
• It has clear purpose, strong financial, resourceful management, viable cash
flows, properly perfected tangible security etc.
Generally the term loans with Balloon Repayment and Bullet Repayment are considered
unless supported by strong business and credit ground. Term loan proposals will include:
• Project feasibility including technical, economic and financial aspects prepared by
reputed consultants.
• Financial projections, including forecasts cash flows supported by realistic
assumptions, for the period covering the tenor of the loan.
• Complete business rationales and yield analysis.
• Protective covenants, conditions and collaterals support analysis.
• Audited financial statements for minimum three years.
• Confirmation of payment of all up-front fees.

4. Syndication:
Under syndication arrangement, the bank as lead manager finalizes transactions by
obtaining from the intending borrower a mandate to raise finance or facilities. On the
basis of mandate from the borrower, other banks will be invited to participate, on agreed
terms, conditions and shared basis, in a deal negotiating with the borrower.
5.Project financing:
The bank may consider project financing to viable undertakings supported by
• Adequate financial strength
• Credit worthy sponsors
• Familiarity of sponsors with manufacturing process or product and arrangement
proposed to be made for hiring key personnel
• Previous experience of sponsors in similar industry
Following fundamental risk factors are considered for project
financing:
• Infrastructure
 • Technical & Technological
• Legal
• Economic
• Financial
6. Guarantees & Bonds: For the purpose of issuance of guarantee, the bank will
ensure that the following features are including in the text of the guarantee:
• The guarantee must be for a clear, well-defined purpose and for a specific amount
and period.
• The text of the guarantee will have a reference to the underlying contact
agreement stipulating the bid or performance bond or Advance Payment
Guarantee etc. as the rationale for issuing the guarantee.
• Payment under the guarantee will be upon beneficiary’s request or upon
presentation of an agreed document.
• The bond or guarantee shall have a specific expiry date
• The guarantee shall state the maximum amount of the bank’s commitment in clear
terms and unequivocally.
• Bonds/Guarantees must not be worded ambiguously. In the event the text of the
guarantee is unique or out of the norm for a branch or location, or unusual text is
being insisted by beneficiary, the Bank’s Legal Adviser/Legal Division will clear
the text.
• Guarantee shall not be of revolving nature or shall not contain automatic
revolving/renewal clause.

. Credit initiation:
Objective:
“To implement a solid credit initiation process whereby the inherent risks
in each credit proposal are properly analyzed and effectively controlled”.

Policy:
Recommendation for all types of credit facilities across the bank are submitted in the
form of a standardized Credit Proposal Package (CP) that is comprised of the following:
1. Credit Proposal Face including description of facilities
2. Credit Proposal Remarks
3. Credit Summary
4. Business Profile
5. Group Exposure Sheet (where applicable)
6. Stick Report
7. Financial Spreads
8. Confirmatory report
9. Documentation Check-off list
10. Visit Report (if required)
11. Latest audited annual accounts
Responsibilities:
The relationship manager is responsible for credit initiation. The preparation of CP
package involves the following broad steps:
1. Establishing/Maintaining contacts with prospects/clients.
2. Receiving credit requests from prospect/clients.
3. Collecting the required information from the applicant as well as independent
sources.
4. Analyzing financial and market position of the applicants.
5. Assessing the security/support being offered.
6. Negotiating appropriate pricing and the terms and conditions.
7. Incorporating the information in the forms.

Credit Approval:

Objective:
“To approve all credits “jointly” by the designated officers and to ensure
and achieve the best credit judgments”.

Policy:
Credit committee is consisting two CO’s (credit officers) and one CO/CRM (credit
officer/credit risk manager); all of these three members of the committee independently
examine the credit proposal and give their comments regarding the approval of the
proposal. The credit will only be approved if all of the three members approve the
proposal independently. In case of any objection by any members of the committee will
lead to non-approval of the proposal.
Responsibilities:
Each Credit Committee member independently reviews the proposal, from his own
judgment and approves the credit. Any of the Credit Committee members in case of his
disagreement or any amendment in the terms and conditions of the credit provides written
comments.

Documentation and Disbursement

Objective:
“To protect banks interest and ensure recovery of banks facilities extended to the
customers.

Policy:
When all the required documents are received the Disbursement Authorization Certificate
(DAC) is issued.

Responsibilities:
 • It is the responsibility o the relationship manager to ensure that complete and
legally enforceable documentation is obtained as per credit approval.
• All documents intended as security or support for credit facilities must be selected
and reviewed for appropriateness to the transaction, adequate coverage of the risk
involved, completeness, proper execution and registration if required.
• In the case of evidencing a lien on specific assets, it will also be the responsibility
of the Relationship manager to verify the actual existence and value of the assets
involved.
• The Legal Advisor of the bank/Legal Division shall vet the documents.

All documents received as security or support for credit facilities are lodged with the
CAD at Branch/Zone/Region, which institute the necessary custodian control/receipts.
After receiving the documents the CAD at Branch/Zone/Region issue the DAC to the
concerned branch for disbursement of the facilities. Then the approval document
mandates a specific level of authority for availments, and the CAD will ensure that the
respective operating units are advised of these special instructions.

Risk management:
Risk is curtail to bank lending and can never be eliminated completely. Banks should
therefore, attempt to reduce its quantum and probability as best as possible with
acceptable safe guards by asking appropriate securities/collaterals.

Credit Management
Credit management process in UBL is supervised by Credit Administration Department.
The functions of CAD are:

• Implementation of the credit policies

• Supporting line management in managing their business through providing
information
• Maintenance of credit files
• Safe keeping of credit documentation
• Disbursement of facilities/issuance of DAC
• Monitoring of approval levels
• Assisting in preparation of Credit Proposals
• Improving the Bank’s credit portfolio
• Ensuring higher return of finances
• Reducing risk of bad debts/stuck-up advances

Special Asset Management (SAM):

All classified 2 and worse loan accounts will be transferred to and managed by Special
Assets Management. For transferring of files and relevant records of classified accounts
to Special Asset Management Division Account Status Report will be used.

Risk assessment procedure:

The following areas of in house investigations should apply to all lending situations to
help the bank to determine whether the risk involved is with in acceptable and
management limits.
1. Assessment of the customers credentials to borrower, successfully investigate and
repay, by obtaining verification of non-defaulter status from CIB. And obtaining
reverences from existing bankers and own discrete investigations from the
borrower’s competitors, buyers, suppliers etc.
2. Verification and assessment of the end-use of borrowed funds to establish the real
nature of the borrower’s business and its legitimacy.
3. Obtaining all necessary and relevant information from the borrower to clearly
understand the flow of the borrower’s business with a view to assessing risk at its
various stages, and to determine repayment prospects and appropriate security and
collateral requirements.
4. Working out the maximum possible financial exposure/risk involved, net of the
collateral being offered. This should confirm security to the prudential regulations
of the SBP and permissible maximum borrowing entitlement of the customer.
5. Establishing the state of the health of the borrower’s business by conducting
analysis of its annual financial report for at least the last three years.
Based on findings above, the banker may establish whether the lending proposal false
with in the parameters set by the bank for undertaking a lending risk.
If the initial assessment is confirmed by finds of a visit the borrowers business premises,
and the findings are considered satisfactory by the management, then the lending
officer(s) involved shall ascertain in detail from the borrower the following aspects
relating to its business.
 Qualitative aspects:
1. Back ground information on company and owners
2. Relation ship with banks
3. Management quality and strength
 Loan Requirements And Repayment Prospects:
1. Purpose of each credit facility requested (letter of request)
2. Term/maturity of the credit facilities. (Credit approval face)
3. Source (s) of repayment and extent of their reliability (personal
guarantee/personal net worth)
4. Collateral/support offered by the borrower (call report and stock report)
5. Volume of business committed for the next 12 months (basic fact sheet)
6. Future out look and demand for the goods/services the borrower deals in.
 The depth of analysis shall largely depend on the type of the customer. Amount of
facility requested, and the nature of borrower’s business/transaction being
financed. Lending officer’s recommendation should include comments on the
following aspects to support the proposal.
1. Industry analysis and borrower’s prospects therein
2. Compliance with the relevant SBP prudential, credit and exchange control
regulations
3. Bank’s expertise/strength in the lending type involved
4. Projected earnings of the bank based on borrowers business commitments.