CHAPTER 1 – INTRODUCTION

Background
According to (The Royal Bnak of Scotland, 2008) Royal Bank of Scotland (RBS)
is one of the world's leading financial services providers and one of the oldest
banks in the United Kingdom (UK). Following the takeover of National
Westminster Bank in 2000, the Group has continued to grow its business around
the globe and, in addition to its strong UK presence, it has offices in Europe, the
United States of America and Asia. By the end of 2002, it was the second largest
bank in Europe and the fifth largest in the world by market capitalisation.
In (The Royal Bank of Scotland, 2008) RBS itself was founded in Edinburgh, by
royal charter, in 1727. It opened its first branch in Glasgow in 1783 and
developed a large network of offices throughout Scotland during the nineteenth
century. In 1874 it opened a branch office in London and from the 1920s
developed, by acquisition, a major presence in England. By 1970, following the
Royal Bank's merger with the Edinburgh-based National Commercial Bank of
Scotland, comprising the former National Bank of Scotland (established 1825)
and Commercial Bank of Scotland (established 1810), it enjoyed over forty per
cent of Scotland's banking business. Under the Williams & Glyn's Bank banner, it
also boasted a large and growing presence in England and Wales. In 1985
Williams & Glyn's merged fully with the Group's Scottish clearing bank which
thereafter traded throughout Britain as a single entity, The Royal Bank of
Scotland.
During the 1980s the Group diversified, setting up an innovative car insurance
company. During the early 1990s the Royal Bank refocused on its core business
of retail banking. In 2000 the Royal Bank acquired National Westminster Bank
which was the biggest takeover in the history of British banking. Now in 2008
RBS took over Aljameen Bank of Netherland, Amstardamsche Rotterdamsche
(ABN AMRO), which is considered the number one bank in Asia. RBS has
proved itself one of the best bank providing better facilities to the people
of Pakistan as compared to the commercial banks.

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 RBS has 75 branches in various cities of Pakistan. Few of them are in the
following cities:
• Karachi
• Lahore
• Islamabad
• Peshawar
• Quetta
• Rawalpindi
• Fasilabad
• Multan
• Sialkot
• Hyderabad
• Gujrat
• Mirpur (Azad Kashmir)
• Sargodha
• Gujranwala
• Vehari
• Jehlum
• Turbat
• Drea Ghazi Khan
• Sukkur
• Mardan
• Gujar Khan
• Kharian
• Bhalwal
• Bhawalpur

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RBS Pakistan offers products in areas like Deposits, Saving and currents
accounts, cash and cheque deposits, and loan facilities. Not only this, but it is also
offering products as: Balance Transfer Facility (BTF) which in banking
terminology is One Stop Payment Shop, 24 hour nonstop banking centre,
relationship card through which customer can access to over 1000 ATMs, life
insurance protection, E statements through which you can receive your BTF via
email, Drop box facility- the convenience of dropping of your payments at any of
the drop boxes placed outside RBS, Pakistan State Oil (PSO) and Shell.
Vision of RBS
“Contributing to profit generating by reducing the amount of time employees
spend on training activities and enabling employees to spend more time on
revenue generating activities.” (The Royal Bank of Scotland, 2008)
Mission of RBS
“To create maximum economic value for our shareholders through a constant
relationship focus on the financial services needs of our chosen clients segment
and a strict adherence to our financial target.” (The Royal Bank of Scotland,
2008)
Purpose:
Now a days the Islamic banking is playing an important role in overall banking
sector, not only local banks but foreign banks also sell many of their products on
basis of Islamic banking. The main purpose of report is to study the working of
Islamic banking in the Mortgage Department, the overall working of this
department, the kind of products being offered by this department and the future
of Islamic banking unit. As RBS is considered one of the top most banks in
providing better services to its customers so in this regard the Customer Service
Department (its structure, overall functioning and products offered) is also
discussed in detail.
Scope of work:
There are different departments in any bank. It has Human Resource Department,
Information Technology Department, Operation Department and Marketing

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Department, but the main focus of this report will be on Islamic Department of
RBS that is Mortgages and the Customer Service Department of RBS.

Methodology:
Basically for the purpose of research various sources of data collection were used.
On the very first day the manager of the bank gave orientation of the bank staff,
departments and the position of the bank in Rawalpindi region. After that interns
were sent to the Mortgage Department where manager gave the introduction of
his department. All the employees proved very helpful during the course of data
collection, they were always ready for helping the interns. During the course of
data collection the managers of the departments gave the latest information about
the various products offered by other banks as well. Bank’s brochures were very
helpful in analyzing the products of both the departments.
After the data collection all the information was analyzed very carefully. In some
of the cases the information was overlapping but in-depth analysis of data helped
in presenting the results in a sequential pattern. The analysis proved helpful in
pinpointing the strengths, weaknesses, opportunities and threats (SWOT) of RBS
and its departments. From SWOT analysis, the report moved on to the portion of
findings and recommendations which were easy to present after having interviews
with the bank’s staff.
A survey was also conducted to ask some of the questions regarding satisfaction
of the employee’s. In survey a sample of 70 employees was taken. Survey data
was collected through questionnaires. In the survey the employees tick their
desired options. The survey data was analyzed and the results of all the employees
are shown in a separate table.
Scheme:
The report is divided in to 5 chapters. Chapter 1; includes background, purpose of
study, scope, methodology and scheme of the report, Chapter 2; includes Structure
of Islamic Mortgage and the Customer Service Department, products offered and
the future of both of theses department. After that Chapter 3; gives the details of

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SWOT, PEST and Porter’s Five Forces Analysis. Chapter 4; tells my personal
experience of RBS. Finally Chapter 5; gives findings and recommendations for
the Mortgage and Customer Service Departments.

Overview of the Departments:

According to (personal communication, July 27, 2008) RBS Rawalpindi consists
of the following departments:
Administration Department:
The administration department of RBS lies in the basement. It has a main head
that looks over all the functions like cleaning, maintenance of the building,
issuance of certificates and transfer letters, keeping record of employees of all the
departments, providing printing and fax facility etc. As the bank has installed
cameras at various places so this department views all the persons going in and
out of the bank from a television set.
Islamic Mortgage Department:
This Department is basically the Islamic banking unit of RBS. This department
offers various products and services through Islamic mode of finance which
includes Musharaka based loans and housing facility. This department is expected
to expand in future and will be sub divided in to the Islamic car finance
department on basis of Mudarbah. The department has various personal banking
consultants who contact the customers by personally meeting them.
Lockers:
This is just a separate unit rather than department. It has a very important function
to perform. It provides safety to the customers’ valuables like bonds and jewelry.
Mostly three to four employees work there with proper knowledge about lockers.
The doors of the department are not free to enter but are locked by automatic and
well secured switches.
General Banking / Customer Services Department:
The ground floor consists of general banking area which has a separate floor
manager under whom various Customer service officers are working. This

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department provides a list of products like Balance Transfer Facility (BTF),
Deposit facility, Locker facility, Credit Cards, ATM facility, Treasure Plus,
Insurance benefits, Online banking and Non Stop Banking Service. The Manager
of this department takes care of dress code and language of all employees
working there.
Operations Department:
This department is divided in to two main sections one which is directly dealing
with the customers like account opening, cash transactions and cash transfer takes
place over here. The second, has no direct customer dealing like issuing of pay
order and demand drafts, telegraph transfer and daily reporting etc.
Legal Recovery:
This department has a head, team manager and various customers’ handling staff.
Basically this department recovers various loans (Auto Loan, Islamic Loans,
Credit cards) from those clients / customers who do not pay off. In the list of
customers who do not pay their money back to the bank can be of two types those
who are unwilling to pay and secondly defaulters. The department contacts these
customers through telephone and firstly inform them that their case is in recovery
so please contact bank and return the loan. Secondly if they do not turn up then
the employees themselves visit the customers.
This process consists of settlement letter, sending a waiver to the customers and
then contacting lawyers.
Royal Preferred Banking (RPB):
This department has the same structure and products as that of General banking
but the main difference is that it deals with high profile customers who have
account balance of more than 1 million. Here the upper level management meets
the customers. The RBP clients are well sophisticated businessmen with high
profits earning ability and are treated as Royal Customers. The environment of
RPB is very peaceful and has various facilities for the customers like television,
internet, magazines and newspapers.
Credit Initiation Unit (CIU):

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This is a top secretive department where entry is not so easy for every one. This
department has a boss, two supervisors and other employees. Basically it checks
and verifies all the documents of the customers who have applied for loan or
credit card whether they are common customers or Royal ones. It is being sub
divided in two portions the secure and the insecure one. In secure portion those
loans are verified against which some collateral is granted by the customer like
mortgage and auto loans. In case of non collateral loans like (credit cards and
Balance Transfer facility) the secured portion is considered. The external and
internal verification of documents is done in this department.
Fraud Risk Management:
This is the subunit of CIU which keeps check and balance on the customers that if
they are involved in any kind of fraudulent activity, fake documentation so in this
way checking the integrity of a customer. The main focus of this department is on
those clients who have requested for credit card, home or Auto loan. The case
passes through the following threes steps as: vigilance, monitoring and
investigation.

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Structure of RBS
Diagram 1
Organizational Structure of RBS

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 Consumer Branch Head
Uzair Rasool

Floor Manager
Asif Butt

Operations Manager
Bashir Ahmad

Administration
Manager
Abdul Aleem

Royal Preferred
Banking Head
Amir Jami

Mortgage Manager
Ejaz Aslam

Legal Recovery Head

Mohd. Bashir

Credit Initiation Unit

Head
Adnan Mansoor

Source: RBS (2008)

The structure of the bank is in accordance with its functions and various products
offered by it. The structure matches with the other Pakistani banks which has
Islamic units as well. But the glaring feature of the structure which makes it
different from other banks is that RBS has got a separate unit for high profile

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customers by name of Royal Preferred Banking, so this shows that it gives special
treatment to its high deposit holders.

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Chapter 2 -- DESCRIPTION
Islamic Banking in RBS
According to (personal communication, July 29, 2008) the emergence of Islamic
banking has made banking easy for customers interested in financial products and
services which are in harmony with their religious beliefs. RBS understands the
needs of their local communities, and the RBS Islamic Banking brand is able to
meet customers’ desire for Shariah Complaint Solutions.
According to a report (RBS Islamic Banking, 2008) RBS Islamic Banking unit is
a client driven institution which provides innovative solutions to cater to genuine
customer needs. Central to their customers is their commitment towards
adherence to Shariah which is evident through all their practices. RBS Islamic
Banking commits to deliver only the best service standards through its presence
across the country.

Diagram 2
Islamic Banking in RBS:

Source: RBS Islamic Banking (2008)

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Islamic Mortgage Department
Structure
Diagram 3
Islamic Mortgage Department Structure

Islamic Banking Head

Ali Asghar

District Head
Ehsan Iftikhar

National Sales
Manager Zahid

Area Sales Manager

Muhammad Ejaz

Team Manager
Azhar Mehmood

Relationship Managers
Maqsood Nawaaz
Hassan Arif

Personal Banking
Consultants
Mehmood Jasknai,
Arshid Khan

Source: RBS (2008)

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The structure of this department is according to the modern standards of Islamic
banking. It starts from the Banking Head and moves on to the Personal Banking
Consultants (PBCs) who cater the needs at the individual level. But the structure
should be made stronger by consistent coordination and harmony among various
levels of management.
Products Offered
In (personal communication, July 30, 2008) RBS has introduced the concept of
Islamic Banking in Pakistan. The main consumer product being offered by bank is
home finance. Any customer with certain conditions and criterion can enjoy the
desired home being facilitated by the bank but that property must be registered by
Capital Development Authority / Rawalpindi Development Authority.
According to (personal communication, July 30, 2008) the followings can apply
for Islamic Home Finance product which can be called the target market for home
finance:
1. Potential Salaried from Multinational Companies
2. Self employed Professionals (Teachers, Doctors, Engineers and Architects etc)
3. Branch Banking Customers (RBS customers)
4. Business Persons (Any kind of businessmen)
According to (personal communication, August 2, 2008) the range of products
offered by the department is as follows:
1. Home Buyer
This product category provides finances to the customers for buying ready made
home. If any person is interested in buying ready made home at some location
then the bank will purchase the desired house for this customer. In this case the
bank will not pay whole of the money on behalf of buyer but pays a certain
amount that is 70 % of the home value to the seller and the rest 30 % will be paid
by the buyer himself. In this way the process works by the participation of buyer
and the bank. This is called Mushraka. In future the buyer will pay the
installments over the prescribed period mentioned by the banks policy.

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2. Home Builder
This product offers the facility of buying land on which any desired customers
wants to build his / her home in future. If a person is interested in building home
on any piece of land but he does not have enough money then he can enjoy this
facility of RBS.
3. Home Renovation
RBS offers another amazing home renovation financing product in which the
customer can buy the funds for renovation of home.
4. Re-Finance
This product of RBS gives their customer the facility of switching their loan to
consolidate their debt.
According to Hassan (RBS Islamic Banking, 2008) the rental rates for their
customers as follows:
Rs 1million – 5 million Karachi Inter Bank Offer Rate (KIBOR) + 4.25 %
Rs 5 million – 10 million KIBOR + 3.75 %
Rs 10 million – 20 million KIBOR + 3.5 %
Rs Greater than 20 million KIBOR + 3.25 %
The product offered by this department is highly income generating but this
Islamic unit should focus on introduction of some more Islamic products.
Working of Mortgage Department
According to (personal communication, August 2, 2008) in Musharakah loans
RBS moves through the following procedure in which a PBC visits the customer
for solicitation. Customer signs the application then all the documents are
collected along with the cheque in favor of Bank After this PBCs submit the case
to the processor, who check the desired documents and save it in the computer
system. From there the sales processor forwards the case to the Credit Initiation
Unit (CIU) which completely verifies the documents. For income estimation
purposes CIU sends these documents to external agencies. These external
agencies after performing their tasks send back there reports to CIU which then
triggers a credit meeting. If the credit meeting succeeds, the customer is given the

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offer letter and bank buys the desired home or property on behalf of customer and
payment is made to the seller. This is how this department works by keeping in
touch with customers to sending the documents to CIU.
The working of this department is smooth but the process is highly time
consuming.

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Organizational Review of Mortgage Department:
The Islamic Mortgage Department has been reviewed according to various
aspects as:
1. Employees Review
Education
The minimum education required in the Mortgage Department is Bachelors (BA,
BSc, B.Com and BBA) and maximum Masters (MA, MSC, M.Com and MBA).
This department prefers people with good communication skills. According to the
Area Sales Manager of RBS:
“In department like mortgage we like to hire people with strong written and
verbal skills rather than high qualification. Verbal skills are used to communicate
the customer on the telephone, while written skills are required when the
customers need to know something technical so for proper guidance sales team
should be strong in both the skills” (Personal communication, August 5, 2008)
In reality the education of the staff is good but they are lacking the in-depth
knowledge of their own products. There should be training sessions for such
employees.
Experience
In Mortgage Department at least one year of experience is required from any
organization. On the average all the staff members have experience of almost
three years in this field. One of the PBCs was first working in National Bank of
Pakistan for last 2 years but now he is working with RBS. Although RBS Islamic
Mortgage Department prefers experience but in actual any one can apply here
even without having any experience, in this way they keep employees with and
without experience on the same lines.
Training
In (personal communication, August 5, 2008) with one of the employees of this
department:

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“Training is the need of every new entrant in any organization. Training enables
you doing your job perfectly. In my view on the job training is preferable than of
the job due to its cost reduction benefit.”
In Mortgage Department of RBS training is considered an important part of one’s
job. There are training sessions for individual sale members and as well as for
teams. After the new hiring the specific employee is trained for continuously three
months, in which he gets to know the basic functions and understands his duties
and responsibilities. After these training sessions the employee starts his regular
work with the existing staff members.
In Mortgage Department the training tenure varies depending upon the need of
trainee. Training sessions can be reduced if the employee is learning fast and
giving positive results. Most of the time on the job training is given to the
employees but some times the staff receives these training sessions outside from
the job site like in Marriot and Sareena (Islamabad) or some times they are sent to
Karachi.
But in actual training is not considered as important part here. The same tenure is
not given for training, as mentioned above by which employees do not get the
required knowledge.
Salary
The salary structure is very good in the Mortgage Department. The basic salary is
from Rs 16,000 to 20,000 (exclusive of all benefits) benefits are of approximately
Rs. 10,000 for the sales persons who are mostly graduates. For the upper post it
varies depending upon the experience, skills and the type of job being performed.
Not only this sales people / PBCs are also given commission which is considered
as their incentive. The commission received by these sales members is 0.8 % of
the total worth of the case, so the total salary is as:
Total salary = fixed salary amount + commission (0.8 %) + Benefits
This salary package is quite satisfactory for the sales members. According to one
of the PBCs (personal communication, August 5, 2008):

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“I am happy at RBS; it recognizes the abilities of its sales staff and gives them the
fruit of their efforts.”
Medical facility and fuel reimbursement are also considered as incentives being
provided to the employees.
In survey it is noticed that some of the employees show their dissatisfaction
regarding salary. They said that the amount of basic salary is fine but the salary
package should contain the benefit for introducing new product (a kind of
incentive) that whenever there is a successful launch of a new product the
management should award its employees.
Transfer
The transfer at RBS takes place at two levels: inter bank transfers and inter
departmental transfers. When employees are needed by some other branch of RBS
then those specific employees are transferred from one branch to the other.
Recently due to RBS take over of ABN AMRO many employees were shifted
form the Islamabad branch to the Rawalpindi branch. Inter departmental transfers
are very rare but they take place if the employee himself suggest that he / she
wants to go to some other department depending upon his / her skills.
This transfer rate should be low for this department because here employees have
developed such skills which can not be used in any other department of the bank.
2. Review of sate of communication
Meetings
The best thing about this department is that every morning the manager of the
department calls up the employees for meeting. In this meeting the manager
discusses some of the important issues regarding sales, he announces the KIBOR
rates and the floating rental rate being provided by the other banks. Not only this
most of the staff also participates in this discussion. According to (personal
communication, August 5, 2008) following are the meetings held by the Area
Sales Manager (ASM):
I. Morning hurdles
II. Deep brief

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 III. Weekly clinic
In meetings all the employees actively participate for generation of new ideas.
Here manager always prefer that employees come on time and attend these
meetings but it should be the duty on part of employees that they also take them
seriously.
With respect to communication channels, RBS is the first bank in the market
which has the system of direct lines and facility of call conferencing. All of the
computers being used by this department are very fast with facility of internet.
Telephone is also used by all sales members and they can use this facility any time
when needed.
Filing system and data uploading
The data is kept safe in computer systems. This work is done by the Sales
Processor. According to (personal communication, August 2, 2008) the Sales
Processor maintains the shadow files of the customers and work is totally on the
system in which the records of all the clients are kept.
This department keeps the documents and files of their customers manually as
well as electronically. The customers’ files are kept in an arranged order in the
cabinets.
All the data of the related customers is daily uploaded by the Sales Processor. The
data kept, is then transferred to CIU department, which verifies it according to
their rules and policies.
3. Physical facilities
The Mortgage Department is in the basement and is very spacious; almost sixty
people can easily work there. The furniture is quite comfortable. Despite its good
working conditions this department needs some improvements, the sitting
arrangement and offices must be overlooked in order to make the working
environment better. Otherwise this department has every facility; fully air
conditioned, having separate cabins for employees. The employees and interns
can order for tea or coffee any time whenever they feel for it. The ASM is very
friendly and always contribute positive towards the success of his department.

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The main reason of success of RBS is its good working environment, decent
language of the staff and the dress code of employees.
4. Organizational Climate
The overall environment of the department is very good. The male and female
staff works like a family. Female staff is welcomed because the climate is very
conducive for them. Many a times the manager of this department arranges parties
for the employees in which interns are also invited whole heartedly. The staff is
very decent and has no moral / ethical issues. The manager of the department
always keeps him busy in creating better opportunities for the employees.

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GENERAL BANKING / CUSTOMER SERVICE
DEPARTMENT
Structure
The structure of this department starts from manager. Then under manager
different Customer Service Officers (CSOs) work. These CSOs are for different
purposes for example; provision of credit cards, consumer loan and for
information / help of customers.
Diagram 4
Customer Service Department

Manager
Asif Butt

(CSO) Help Desk (CSO) Credit Card (CSO) Consumer loan

Seemab Fatima M. Owais Rana Sikandar

Source: RBS (2008)

The structure of the department is very brief. Although it is like many of the other
banks but it should have a separate complaints section where customers can
record their problems or any of their complaints regarding the bank. By this RBS
can open new doors of communication with the customers.
At RBS the General Banking (GB) is the basic banking unit which serves the
purpose of customer facilitation. According to floor manager (personal
communication, August 3, 2008):
“What ever we say represent the bank, so we only say what we can do!”

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In (personal communication, August 3, 2008) this department is working very
efficiently with providing better facilities to the customers.
The GB floor is divided in to three main sections which are as:
1. Diversion Area / Information desk: The diversion area is located right towards
the main entrance of the bank. It greets the customer and leads him / her to the
counter.
2. Transaction Area / Cashiers: It is behind the diversion area where the customers
make transactions according to their wish for example they can withdraw or
deposit cash / installments / utility bills / credit card payment bill. This area
contains the receipt and payment slips for pay order, draft and deposit.
3. Lobby / Customer Service: Lobby is the area located to the right side of the
diversion area. The floor manager desk is in the corner of the lobby area from
where he can easily view all the customers and the employees.
The lobby contains the consumer loan desk, credit card loan desk help desk.
Liability help desk is considered part of lobby.
Liability Help Desk:
The liability help desk is called the “diversion channel.” It means that it helps and
diverge the customers to their specific counters in order to fulfill their demands.
The main functions of help desk are as:
1. To help customers and connecting their calls to the Help Line (111-06-06-
06).
2. Looks after ATMs and provides help when ever needed.
3. Keeping a check on key service indicators whether the customers are
being treated properly with in the exact time
4. Recovery of envelopes and checks from drop box.
5. Maintaining the check list in order to check whether the department is
maintaining its cleanliness.
Credit Card Desk:
The main function of Credit Card Desk is to handle issues of credit cards. It also
serves the following purposes:

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 1. Handling complaints of customers regarding credit card.
2. Resolving disputes of customers.
3. Generate funds for issuance of new credit cards.
4. Remittance enhancement.
Consumer Loan Desk:
This desk handles issues regarding personal or consumer loan. The main functions
of this desk are to:
1. Give information about loan to the desired customers.
2. Check the number of installments being paid by the clients.
3. Handle complaints regarding consumer loan.
4. Issuance of new loans.
The arrangement or décor of the bank is perfect. The customers feel ease and
comfort with the physical structure of the bank.
Products and Services
According to company brochures (RBS, 2008, p. 2) the Customer Service
Department is offering the following products and services to the customers:
1. Balance Transfer Facility (BTF)
2. Deposit facility
3. Locker facility
4. Credit Cards
5. ATM facility
6. Treasure Plus
7. Insurance benefits
8. Online banking
9. Non Stop Banking Service
1. Balance Transfer Facility (BTF)
According to (BTF, 2008) RBS has introduced BTF which is often called one
Stop Payment Shop that take care of all your financial needs. BTF is most
convenient and flexible, economical and easy-to-use-to-use loan facility designed

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to suit your needs and give you the power to control the finances. It brings you the
variety of features that provide you the spending convenience you need.
In BTF there are no lines or limit of credit, generally you can get the loan between
PKR. 50,000 to PKR. 500,000. But in BTF ‘there is no matter, what your limit’,
you are charged on the amount of money you used and not on the whole amount
assigned to you.
2. Deposit Facility
According to (RBS, 2008) the followings are the main type of deposit accounts
being offered by RBS for various categories of people:
Current Account --------------------Sahulat Account
Savings Account--------------------Anchor Account
Checking Account------------------Access Account
Term Deposit Account-------------Value Term

3. Locker Facility
“If your jewelry has been given you sleepless nights, and the prize bonds tucked
in the bottom drawer make you feel tense, it is time to discover peace of mind.”
According to (Lockers, 2008) the lockers at RBS are safe, convenient and private.
As a customer, you can enjoy personalized service and operate your locker in a
friendly and pleasant environment.
4. Credit Cards
In (Credit Cards, 2008) credit card is the safest mode of using money. It is used
repeatedly to borrow money or buy products and services on credit. Credit cards
are issued by banks, savings and loans, retail stores, and other businesses.
RBS is offering three kinds of credit cards
4.1 Future Perfect Master Card
4.2 RBS Air Blue Master Card
4.3 RBS Ufone Credit Card

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5. ATM facility
According to (Javed, 2008, p. 26) through RBS ATM network you can have
access to money 24 hours a day, 7 days a week. This facility gives you the
flexibility of withdrawing money from your account any time. The RBS ATMs
are located inside the premises of the bank.
Any customer can make one to five transactions in a single day, by withdrawing
20,000 of amount in a single transaction, so the customer having the credit card
can withdraw 100,000 in a day. If some one wants more than 100,000 then he can
use his cheque book.
6. Online banking
In (RBS online banking, 2008) RBS is offering the facility of online banking to its
customers through the country wide network of branches. If the customer is
interested in sending the money in any other branch of RBS then he / she can use
this facility. Customers can use ATMs or banking counters of any branch for day
to day banking needs, irrespective of branch where they maintain their accounts.
It is fast and secure access to any of your private accounts via Internet.
7. Insurance plans of RBS:
RBS is offering various kinds of insurance plans. According to (Insurance Plan,
2008) RBS product menu spans across various lines of insurance and offers
combination of life and non-life insurance plans which are made-to- fit your
personal needs. RBS has insurance plans for young professionals, married, retired
people. This insurance plan provides cover on the following risks
I. Robbery
II. Fire
III. Natural Calamity
IV. Vandalism
V. Terrorism
VI. Applicable on each locker.
VII. Only events that take place in the locker area are covered under this
scheme.

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8. Treasure Plus:
Treasure Plus (Treasure Plus, 2008) is a kind of insured loan for children’s
education. It is very simple. You select the premium amount (in multiples of
12,000) and term of the plan. Minimum annual premium amount for customers is
Rs. 120,000 to Rs. 24 million
You have the flexibility of paying the amount on a monthly, quarterly, half yearly
or annual basis. When your child reaches the college going age, you will receive a
lump sum amount to meet his / her education needs. In addition to the above,
Treasure Plus also offers a unique School Fee Continuation Benefit. This option
would ensure continuity of your dream to give your child the best education in
case of your untimely death.
9. Non-Stop Banking (NSBC):
According to (personal communication, August 17, 2008) any one can make
payments for their credit card, order a demand draft, stop a cheque or pay
telephone, gas and mobile bills. In this way one can do almost all kind of banking
transactions over the phone.

26
Organizational review of General Banking
The following information is retrieved from an interview with the Credit Card
Help Desk officer (personal communication, August 20, 2008):
1. Employees Review
Education
The education required in Customer Service Department is minimum bachelors
(BA, BSc, B.Com and BBA) and maximum masters (MA, MSC, M.Com and
M.B.A). Here the people with good communication skills and high patience are
required because you are constantly in touch with variety of customers. The
manager of this department is M.B.A meaning that one can be transferred to the
post of manager with M.B.A degree.
Experience
In this department experience does not count so much as compared to other
departments. Any one can apply soon after completing his / here bachelors or
masters. Although experience is a plus point but not a necessity for working here.
According to the manager (personal communication, August 21, 2008):
“The new employee is always preferred depending on his / her skills of keeping
the customer happy. In this regard sometimes we make the new hiring form the
interns who are efficient enough to greet the customers well.”
In the department the most noticeable feature is that young and confident
professionals are working dedicatedly. They are always ready to help out
customers without any hesitation.
Training
Training is considered very important for learning the basic skills of banking. For
this the new entrants are trained for 15 to 30 days. For old or existing employees
off the job and on the job training sessions take place. The basic purpose is to
update the existing knowledge of employees. The employee’s response towards
these training sessions is quite positive which is checked by comparing their old

27
knowledge with the one after the training. The training cost is low and the
duration depends upon the requirement of trainee.
Salary
The salary structure here varies depending upon the post, skills and experience of
employees. The basic salary is same for all employees but the incentive differs
depending upon the kind of product employee sells to the customers like some of
the products like Treasure Plus (TP), BTF and Credit Cards. For selling such
products the employees get the commission of 0.9 % of the total worth of the sale.
Bonuses are also given to the employees. These aforementioned products can be
sold by any employee rather than sale staff without any restriction.
Transfer
Transfer rate is quite low. Sometimes employees are being transferred form the
Islamabad branch to this branch but mostly the transfers are being hampered due
to reluctance of employees. It is very much obvious that an employee working in
Karachi will never prefer to be posted to Lahore.
The inter-departmental transfer rate is high as compared to the transfer among the
bank branches. Sometimes employees are transferred from one department to the
other. Many of the employees of this department have been shifted to other
departments because here an employee is in close contact with products being
offered by the other departments, like one of the BTF department totally deals
with the BTF being provided at the Customer Service Department. In this way
employees of Customer Service Department can be transferred easily to other
branches and departments. This transfer rate is suitable for the employees.
Promotion
In general banking the inter-departmental promotion rate is quite higher rather
than the cross departmental one. The employees are being promoted depending
upon their performance and skills. The appraisal is conducted twice a year. On the
basis of performance appraisal the boss evaluates the employees. After evaluation
some of the employees are promoted to the specific posts like General Banking
Managers or Royal Preferred Banking head etc. Most of the employees show their

28
dissatisfaction regarding cross department promotions, in their view the
management should pay more attention to the rotation and cross departmental
promotions so that employees do not feel frustrated by the same type of work.
2. Communication Review
Filing system and data upload
The data keeping in this department is quite different than that of Mortgage
Department. There is no manual data which is to be kept in the registers. Every
thing is saved in the computers. This department does not keep any data with
itself so at the day end all this data is saved in hard disks and CDs for the analysis
purpose and finally it is sent to Karachi. In this way the bank keeps record of data
for their own purpose in CDs which are fully protected. The data is not accessible
to every one only authorized persons can view it.
In this department a single person is assigned for saving all the data, so the
persons at their respective desks save the transactions in their systems and then all
the staff forwards this information / data to the help desk officer who further saves
it in hard disk. In this way each person contributes in uploading new information
and keeping the database up to date.
Writing skills
The writing skills of the staff are very good. As mostly the staff has MBAs and
BBAs so they interact with each other in English. The writing skills of this
department are better than other departments because here the employee
according to his / her duties has to inform their respective customers about the
bank’s products.
The manager calls all of the employees for meeting after every two days in a
week.
3. Moral problems
The staff has no ethical moral problems because of suitable climate of the bank,
but most of the time employees are tensed regarding customers. The employees
feel problem in dispatching customer their goods which leads to mental stress and

29
employees fighting among themselves, disturbing the peaceful environment of the
bank.
4. Physical facilities
The outlook of the floor is very good. The decor of the bank is according to the
modern banking standards. The arrangement of this department is very
systematic; the information desk being located towards the main entrance,
cashiers at the back side and customer services to the right of information desk.
The customer facilities like drop box, ATMs, help line and elevators are located
inside the premises of the bank. The furniture is really comfortable, besides this
customers can read the news papers and magazines as well. The plants near every
desk and in the waiting area give a very fresh look to the bank. RBS has high
standards of cleanliness and maintenance which makes the environment very neat
and clean.

30
CHAPETR 3 -- ANALYSIS
General Environment Analysis----PEST
The analysis of RBS will take in to account the general environment analysis, the
competitors analysis by comparing the products offered by the competitive
Islamic banks and the departmental analysis.
The general environment of takes in to account the external factors like politics,
economy of country, socio-cultural factors and technology. Now we will analyze
these factors one by one and check how these affect the working of RBS:
Political
The present state of the government in Pakistan is directly affecting the policies of
banks. Although RBS tries hard to keep its business away from the politics but
sometimes it is not able to do so. RBS has no accounts of political leaders or
parties. But its Customer Service Department faces peer pressure from such
political parties.
As RBS is trapped in dual sanctions from the State Bank of Pakistan (SBP) and
from the European Union so the changing political environment is not so
conducive for the bank to operate freely. The changing policies of the
government, affects SBP which in return affects the RBS rules and policies.
The government of Pakistan is privatizing most of the banks. The number of
government owned banks are constantly declining, so these changes directly
affect RBS and other banks working in Pakistan.
Economical
The economy of any country directly influences any financial organization.
Economic indicators include Gross Domestic Product (GDP), inflation, balance of
payment, debt of the government. The following graphs are showing the
economic position of Pakistan. In view of these graphs we come to know that the
banking system is adversely affected by the economic condition of any country.

31
 Graph 1
Fiscal deficit (as % GDP)

Source: Economic Focus Pakistan (2008)

Graph 2
Public Debt

Source: Economic Focus Pakistan (2008)

32
The poor economy of Pakistan and instable government is badly affecting RBS
and its various departments; recently it has downsized many of its employees. The
economy of our country is very down, businesses are reaping low profits and
stock market is in great danger. Pakistan’s foreign debts are rising day by day so
such a situation is a big challenge for banking institution to survive. The financial
crisis in Pakistan has made the management of RBS tensed to work in such an
environment. Now a days the bank is not extending loans but recovering the
existing ones.
Social
RBS has been influenced by the socio-cultural factors. After 9-11 the Islamic
banking in the world expanded rapidly. Now every European country is keeping
its eyes on Pakistan as being the terrorist country, so people of Pakistan are
emotionally getting affected by it, as a result arising a feeling of love for their
religion by using Islamic products. The Talibanization and terrorism has given rise
to such a class in society which prefers to deal with Islamic banks or at least with
Islamic products, so in this way the wide range of Islamic products offered by
RBS make people to divert their attention towards them.
On the other hand RBS is facing another challenge from the customers as it is a
foreign bank so most of the religious people and patriots do not wish to deal with
it. They like to transact with the local / domestic banks. Pakistani people are
traditionalists who do not like the open banking environment of foreign banks.
Some of the customers do not use ATMs they still prefer cash counters, so these
kinds of socio-cultural factors affect the banking environment and its operations.
Technological
Technology has great influence on various kinds of organizations whether banks
or any kind social welfare organizations. In RBS technology has great effect on
the working environment. Basically all banks use computers no one keeps data
manually so the bank has to be constantly in touch with the modern ways of task
performance. RBS is always willing to introduce new computer systems for
keeping its staff up to date. The intranet facility is playing an important role in

33
enhancing the knowledge of staff. It is due to technology that bank staff keeps in
touch with the customers via e – mail; ATMs and online banking is possible due
to technology. In this way technology is playing its key role in and is helping
management to further improve its functions.
Conclusion:
Overall we can say that RBS is influenced by the economic position of Pakistan,
which has stopped it from extending loans to the customers. After that the policies
of RBS are also affecting its performance and free functioning. Social and
technological issues are of secondary importance but they also can not be
neglected. RBS is focusing positively regarding technological issues but it should
also keep its eye on the social cultural factors also.
Porters Five Forces Analysis
For further analysis of RBS environment, Porters Five Forces Analysis is also
applied on the bank. This analysis takes in to consideration the following factors:
Availability of Substitutes
Substitution of one product with another one increases the rivalry
within an industry. Although perfect substitute of banks are not
available in the market but people still have choices of saving or
investing their money. They can either save their money at
homes or put their money in the National Saving Centers
(Banking Intermediaries) which give protection to their assets.
Aside from saving one can invest money in stock market in form
of shares / bonds or in real estate. These kinds of substitutes
increase the rivalry in the banking sector.
Rivalry among existing firms
There is tough competition among various banks. As variety of
public and private banks are already existing in the market,
offering products on competitive prices. If we look at Islamic
Banking products then Alfalah Bank, Meezan Bank, Habib Bank

34
and many others are offering wide range of products in this
sector. The tough competition among these banks gives rise to
the challenges which the competitor banks have to face. The
competition among various banks increases the switching of the
customers form one bank’s product to the other bank.
The tables on the following pages show the total number of branches of some of
the banks working in Pakistan and the various products being offered by these
Islamic banking branches as compared to the RBS.

Table 1
Branches of competitive Banks

Islamic Banks Branches

Meezan Bank Pakistan Ltd 120

Dubai Islamic Bank 17

Emirates Global Islamic Bank 13

Bank Islami Pakistan Ltd 30

Habib Bank 1000

Muslim Commercial Bank Ltd 900

AlBaraka Bank Pakistan Ltd 30

RBS 75
Source: RBS (2008)

35
 Table 2
Products offered by Competitors

Albaraka Bank Pakistan Ltd Bank Islami Pakistan Limited

• Current, Savings & Time Deposits • Islami Current Account, Islami
Bachat Account
• Joint Pool Investment Accounts
• Islami Dollar Bachat Account,
• Import Financing
islami Amadni Certificate
• Export Financing
• Islami Mahana Munafa Account
• Working Capital Financing
• Leasing / Ijarah
• Infrastructure Financing
• Islamic Export Refinance
• Project Financing>
• Letter of Credit (Sight & Usance)
• Financing of other Business needs
• Letter of Guarantee
• Murabahah ( Sale/Purchase/Trading)
• Forward Cover
• Musharaka (Partnership)
• Bill Purchase
• Ijarah (similar to Leasing)
• Auto Ijarah
• Istasna & Salam (Sale of goods at a future
• MUSKUN Home Financing
date)

• Investment in Sukuks (Islamic Bonds)

Muslim Commercial Bank Limited Habib Bank Limited

• Current Accounts
• Al-Makhraj Saving Account
• AL Habib Saving Accounts
• Al Makhraj Term Deposit
• AL Habib Term Deposits
• AL Makhraj Car Ijarah Concept • Mudarbah finance

• Purchaisng goods on basis of Murabahah • Ijraha finance (for vehicle,

machinery and equipment)

Meezan Bank Pakistan Limited Emirates Global Islamic Bank

(EGIB)
• Buy, Build, Renovate, or Replace
• Mudaraba (Partnership) Saving

36
 • Car Ijarah
• Bachat Account
• Meezan Capital Protected Fund (MCPF)
Dubai Islamic Bank Limited
• Islamic Home Finance through Musharaka
cum Ijara model
(Home Purchase and Home Renovation)
• Purchase of undivided share of property at
other bank (Balance Transfer).
• Auto Finance through Musharaka cum
Ijara model
Account
• Mudaraba (Partnership) Term
Deposit
• Al Bait Halal house financing
• Local Purchase Murabaha
• Murabaha financing against
Imported Merchandise (FIM)
• Murabaha financing against Trust
Receipt (MTR)
• Export Murabaha (Pre-shipment)

Source: Arif (2008)

Threat of new entrants
The banking sector of any country has always chances of growth and competition
so many new banks enter and leave the market. Mostly foreign banks step in the
developing countries for expanding their branches, not only this mergers between
foreign and local banks take place at large scale but Pakistan’s present economic
condition and government instability has arose the feelings of awe and terror
among most of the foreign banks to enter in the market. In future due to
uncertainty and security problems in Pakistan investors will not be willing to
invest here. Due to overall financial problems in the whole world new banks will
not be entering in to the banking industry.
Power of buyer
Bargaining power of buyer is low where the products substitutes are not available
and customers are large in number. In case of banks there are lots of other banks
and banking intermediaries, having wide range of products, so power of buyer in
banking sector is high. The bank can not force any customer to buy the desired
product because this directly affects its reputation, but can convince its customers
by giving them special discount or rewards. If we look at RBS we will find that
the competitors are also offering products due to which customer feel in power by
saying that they can go to some other bank in case of dissatisfaction.
Bargaining power of suppliers

37
As in banking sector suppliers does not exist so there is no bargaining power of
supplier.
Conclusion
According to Porters Five Forces analysis we can say that RBS has no fear of new
entrants due to the poor economic position of Pakistan but it should keep its eyes
open regarding mergers of various banks. There are two big threats; firstly from
the buyers who can go to the other banks and secondly form the substitutes like
investment in stock market, so RBS should carefully examine its task
environment.

Organizational Performance Analysis

Strengths
1. RBS is the first multinational bank which has started the concept of Islamic
banking and so rapidly expanded its products of Islamic banking. The
launching of Islamic credit cards and auto financing on basis of Mudarabah is
expected to provide positive growth opportunities to the bank.
2. RBS formerly ABN AMRO, was at number five with respect to its assets but
now it is at number one.
3. It enjoys better position than the other banks of Pakistan because RBS
maintains big accounts of highly profiled businessmen as compared to other
banks.
4. RBS has expanded the network of its branches in a very short period of time.
It started with eight branches in major cities of Pakistan but now it has seventy
five in various cities of Pakistan.
5. One of the plus points of RBS is that it has very tight policies based on foreign
and State Bank mandate, which makes it better than Pakistani local banks.
6. RBS has one special department by name of Fraud Risk Management (FRM).
The staff of FRM verifies the customers at various stages in order to reduce
the occurrence of fraud in bank.
7. RBS provides best service to the customers by taking care of their needs.

38
8. RBS gives too much importance to its customers. On the main entrance of
bank there is special greeter desk which is responsible to properly guide the
customer. Not only this bank always keeps two to four staff members who are
ready to help the new customer any time.
9. The concept of NSBC introduced by the bank is very positive by providing 24
hours service to the customers. Also the SMS banking is better than other
banks of Pakistan.
10. All the departments of the bank follow the policy of KYC that is “Know Your
Customer.” According to this policy the bank staff knows its customers fully
from his / her business to daily activities so that they do not fall a pray to
illegal activities.
11. A very positive point of this bank is that it gives separate status to high profile
customers. For example the customers who have account worth of more than
1 million are treated specially. Bank has a separate department and dealing
section for such customers which is known as RPB and customers are called
Royal Preferred Customers. These customers have access to luxurious and
well decorated waiting areas where they can enjoy reading newspapers,
magazines, watching television and using internet.
12. On the whole employees are satisfied with the bank and its environment and
have high salary structure than the other banks.
13. RBS has a very strong management who is always ready to take strict actions
and wise decisions during the bad conditions.
Weaknesses
1. One of the weaknesses of this bank is that some of its branches have not
even started its operations like its Peshawar branch is not functioning
because of lack of employees in that area.
2. It is very much true that RBS considers it’s customer a great asset but
some times it is not able to satisfy them. The main problem is with ATMs
mostly the customers get annoyed but the bank employees do not take this
problem seriously.

39
 3. Many of the times employees on the floor who have direct dealing with
the customers feel frustrated without any break during the work schedule.
4. There is lack of proper rotation among the departments, which leads to
limited knowledge among employees.
5. Sometime the customers feel dissatisfied and complaints that bank does
not clearly mentions the terms and conditions on various products like
deduction of service charges. Mostly credit card holders come up with
such complaints.
6. Many of the banks employees are not loyal with it. They just leave the job
in search of better job opportunities to other banks.
7. Some times the customers are not informed before time about the certain
changes being going in the bank; regarding banking products or changing
the name or structure of the bank, which creates confusion in minds of the
customers.
Opportunities
1. RBS has started NSBC there is opportunity of growth in this field.
2. There are growth trends in Islamic Banking sector of Pakistan which will
further enhance the working condition of Islamic banking in near future.
3. The bank should employ the best courier companies and keep in touch
with them, for resolving the problem of dispatching customers’ goods.
4. The bank management should use the modern ways of communicating
with staff and staff in return to the customers, so that flow of information
leads to rapid and positive results.
5. As employees have the habit of working with ABN AMRO, but now with
RBS take over there are chances of further growth in productivity of
employees and improved banking environment.
Threats
1. Due to present government and the instability of the policies RBS may
face a lot of problems in future.

40
 2. The religious class emerging from the Pakistani society, which hates
working with the foreign banks and prefers local banks, can disturb the
working of the bank in future.
3. Due to depreciation of Pakistani rupee, bank may earn less profit than its
other foreign branches.
4. The employees are not loyal with the bank, when they find better
opportunities they leave their existing posts so it can create the problem of
recruiting new staff for Human Resource Department.
5. Many new and emerging banks like Barclays are offering better pay
packages to the employees which in future may increase the turnover of
employees.
Conclusion
The biggest strength of RBS is that it is the first multinational bank which has
started the concept of Islamic banking. It enjoys better position than the other
banks of Pakistan because world wide it is at number five with respect to its assets
The department of FRM is giving good results as compared to other banks of
Pakistan. The main weaknesses are that some of its branches have not even started
its operations so they should be in the working condition, lack of proper rotation
among the departments and customers dissatisfaction arising about changes going
on in bank. But the bank has opportunity of growth in Islamic Banking sector. On
the other hand the biggest threat is the instable economic position of Pakistan and
the depreciation of Pakistani rupee by which it will earn less profit than its other
foreign branches.
Departmental Performance Analysis
Mortgage Department
Strengths
1. Cooperative and dedicated staff and team work.
2. The manager of this department is well experienced and knowledgeable,
who understands the need of his department and the staff.

41
 3. Good communication skill of the staff therefore facilitating the customer
in making any decision
4. Security and safe dealing in the product. As this department deals with
property (land) which gives assurance that its price will not fall in future,
meaning there by that the product is safe and rental rate can be earned any
time.
5. There is high possibility of generating revenue than any other
departments. As personal business consultants forward cases of worth 50
or 100 million, so on the whole it has small percentage of expense as
compared to other departments of the bank.
6. High salaries as compared to other departments.
Weaknesses
1. The department is facing problem of proper accountability in Islamic
products.
2. The staff is lacking the proper knowledge about the Islamic products.
3. There is lengthy documentation which sometimes annoyed the customers.
4. Customers have to pay visits many a times just for the simple things.
5. Less number of Islamic products as compared to its competitors.
6. Need to make the working environment of department better.
Opportunities
1. Home financing schemes can be useful for the bank because property
prices are continuously rinsing. There is high possibility of future growth
in Mortgage Department.
2. In market there is little number of people who are being qualified in the
job of mortgages so there will be high demand for such qualified and
experienced professional individuals.
Threats
1. Increasing inflation, reducing the purchasing power and value of money,
so people will not feel comfortable dealing with banks for home loans.
2. Rising processing fees and KIBOR by State Bank of Pakistan.

42
 3. High mark up rates as compared to other banks.
4. The policies of RBS are very different and tough regarding Islamic
Mortgage customers which may create problems for the mortgagee. As the
bank is multinational so it has to follow a blend of foreign and local
policies which may hamper the growth of this department and reduce the
number of customers.
Conclusion
Overall the Mortgage Department has highly dedicated staff with strong team
work. The department is generating higher revenue and giving high salaries than
any other departments, as it is dealing in the safe and secure product. The
weaknesses are that this department is offering less number of Islamic products as
compared to its competitors and the lengthy documentation sometimes annoyed
the customers. On the other hand there is high possibility of future growth in
Mortgages, and the qualified Mortgage staff is highly demanded in future by the
market. But the two biggest threats for this department are that as Pakistan’s
people have low purchasing power which in future will be more affected by
inflation so in that case less people will be willing to go for home loans.
General Banking / Customer Service Department
Strengths
1. This department has young staff members who know their customers and
have more technical knowledge.
2. The decor of branch gives a new and modern look
3. Availability of required office equipment.
4. RBS has assigned separate parking for its regular customers.
5. ATMs are located inside the premises of bank, enabling the customers for
having access to the comfortable environment.
6. The help desk can easily view the customers from the desk which make
the staff aware of customers problems.
7. Customers can get the bank statements or the check books in a single day
as compared to the other banks.

43
 8. Customers do not have to wait too long or stand in long queues to wait for
their turn.
9. All the customers are greeted properly. This skill is given foremost
importance in this department, so it must be learnt by the employees and
interns.

Weaknesses
1. Front line employees are not sometimes well groomed to handle difficult
customers under stress conditions.
2. Customers are not properly informed about the upcoming changes.
3. No proper rotation and cross departmental promotions of employees
which lead to limited knowledge among staff members related to other
departments.
4. Weak delivery system and courier facilities.
5. Link down problem of ATMs.
Opportunities
1. More ATMs to attract new customers and to minimize load on cash
counters.
2. Opportunity for young and fresh blood to get employment and make its
career in the banking sector.
3. RBS formerly ABN AMRO had a good name that can be exploited for
business growth with the increased number of branches.
Threats
1. Customers have to become more educated and demanding.
2. Inflation is the biggest threat for the banks to launch new products and to
maintain service delivery system.
3. Increasing competition posed by other banks.
Conclusion
The overall strengths of RBS are the new and modern outlook of the branch,
proper greeting of the customers by the help desk, separate car parking assigned

44
to the regular customers of the bank and the ease on end of customer’s because
now there is no need for stand in long queues. The main weaknesses of this
department are the weak courier facilities and the link down problem of ATMs.
But the big opportunity for the bank is that it can easily hire young and fresh
blood who understands customers deeply than the old staff. RBS also faces some
real threats from the customer retention who can be attracted to other banks, so
ever rising competition form the banks can be the biggest threat for RBS.

45
CHAPTER 4--LEARNING AND EXPERIENCE
My personal experience at RBS:
I did my six weeks of internship at RBS, Rawalpindi. In my first week of
internship I felt a bit uncomfortable, as I was new there. I took some time in order
to adjust in the new environment.
The first thing which I noticed in all the departments of RBS is that all the
employees work very hard, so the overall lessen I learnt is that “One can not go
without hard work, especially when one joins any Multi National organization one
has to show him / her as a dedicated worker.” On my very first day I was given
the history and overview of bank and all the departments respectively. After that I
was rotated to the Islamic Mortgage Department and to General Banking.
The important event which took place during my phase of internship was that of
taking over of ABN AMRO by RBS. The bank had placed various banners and
cards to reflect that ABN AMRO would be replaced by RBS very soon. The bank
staff was very inquisitive that how the bank will look like after it’s take over by
RBS. On the day when finally the former bank has to change its name to RBS, all
the employees and interns were dressed up in navy blue. As at that time I was
working in Mortgage department so I also came up in navy blue dress, my
supervisor gave me RBS pen and a pad. There was a good change in overall
departments, I found it amazing.
Regarding working experience with RBS staff I would like to say that they are the
real people who have grip over their specific working areas. I enjoyed working
with them and they provided me every bit of information which I required during
course of my internship. In Islamic Mortgage Department I found a dedicated

46
manager who is always busy with meetings, he is real person I have found who
took tension of his work. In this department the team manager taught me how to
fill the forms and arrange the documents of the customers. I also conducted
interview with three customers by asking them specific questions. Not only this I
telephoned the regular customers for advertising the new product launched by the
Islamic Mortgage Department.
In General Banking I noticed that customers are guided properly to the counters. I
spent three weeks there and learnt about cash deposit, cash withdrawal, pay order
issuance, account opening, sign verification etc.
I also spent 3-5 days in Credit Initiation Unit where I saw that how the bank
verifies the documents of the customers and how it takes the services of external
agencies during course of verification.
One thing I noticed in the bank which makes it different than other banks of
Pakistan is its rules of conduct which include: RBS dress code, language and its
working environment. I worked there very dedicatedly with the aim that I have to
learn, I took internship not only as a degree requirement but an opportunity to
learn and stepping in to the practical life.

47
CHAPTER 5: FINDINGS AND RECOMMENDATIONS
Findings of Islamic Mortgage Department:
1. One of the major issues in Islamic Mortgage Department is the absence of
transparent and appropriate performance standards in Islamic sector. It
should be resolved quickly because these policies / standards are the basis
of Islamic banking. Once the Islamic banks are clear regarding the
accountability problem then other problems can be solved easily.
2. Another problem in Islamic banking and regarding RBS Islamic Mortgage
Department is that employees working there are lacking the proper
knowledge of Islamic terms and products. There is a long list of Islamic
products in Shariah Compliance but the employees are not clear about
some of the terms, which in turn create misconception in minds of
customers.
3. In Islamic banking sector, RBS has no innovative products to be
introduced in the long run, although the concept of Islamic banking is new
for the bank. But it is not launching any kind of unique and new products
for the customers. This innovation of product is also affecting the salary
structure of the employees of this department.
4. Another problem from the management perspective is from the customers’
side, most of the people do not trust Islamic banking products by thinking
that their money is not save, so they feel shy to invest in Islamic banking
and its products. Mostly people deal with the conventional banks more
confidently than the Islamic banks.
Findings of General Banking / Customer Service Department
1. The primary issue faced by the customers in this department is regarding
the ATMs. Customers face the problems of link down, by which they feel
disappointed. Some of the customers show their anger on staff which
directly affects the repute of the bank.
2. Sometimes customers are not properly informed about the changes, so
leaving them in state of confusion.

48
 3. Most of the times RBS new employees like young sales people are
interested in more of sales so they use convincing words during sale of
certain product by hiding the actual characteristics.
4. This department is facing the severe problem of delivering goods to the
customers via courier services. This creates tension among bank staff,
some of the employees transfer certain products on their own to the
desired customers.
Recommendations for Islamic Mortgage Department:
The following recommendations are meant to improve the working of Islamic
Mortgage Department, depending upon their time frame these are divided in to
three categories as short term, mid term and long term:
Short term
1. Give sufficient attention to international accounting standards,
(corporate) governance, transparency and accountability in
Islamic banking
This first recommendation for smooth working of this department is regarding
policy making which can be implemented from SBP, after that improving the
overall position of Islamic banking. As SBP is the main controlling authority of
all banks so it should clearly designed all the rules and policies required by the
Islamic banks. SBP should properly guide the Islamic Banking departments
regarding standards and policies. Once policies are clearly designed by SBP then
it should be properly implemented by those banks having specific Islamic
products. Although it will take time to make accountability standards for Islamic
banks but this recommendation should be implemented in short period of time as
it serves the foundation of all the other recommendations. After SBP setting up of
standards the Islamic banks or the banks having Islamic products should clearly
announce and follow these accountability standards. The manager of RBS,
Islamic Mortgage Department can play a very important role for proper
implementation of the accountability standards.

49
The following flow diagram will make it clear the implementation procedure for
the first recommendation:
Diagram 3
Implementing the standards in Islamic banks

SBP should pay Designing /

check if these revision of
standards are accountability
properly standards by
followed up by SBP for Islamic
Islamic banks banks

Standards to be
adapted by the
banks having
Islamic banking
departments /
products

Mid Term
1. Basic concepts and philosophy of Islamic banking

50
RBS, Islamic Mortgage Department should promote greater understanding of
Shariah principles, asset and liability management and features of product
structure. The staff working in Islamic Finance should exactly know the meaning
of terms like Mushrakah, Mudarabah or Ijarahah. This recommendation can be
implemented by proper training of employees of Islamic Mortgage Department.
Already this department is spending only Rs. 10,00,000 / annually on training
which is less as compared to the earnings of this department. The following
training structure should be followed by manager of the department:
For new employees 6 weeks of training sessions is required. The initial training
should consist of three weeks intensive classroom learning, covering an
introduction to Islamic banking structure and its products. Networking sessions
should be followed up during the training, supported through mentor. The boss or
colleagues can help employees in understanding of Islamic Banking
terminologies.
Another alternative is that the department can hire the consultants form the
institutions like AlHuda-Center of Islamic Business and Economics (CIBE) and
Online Islamic Certified Islamic Banker Karachi. These institutions offer the
following courses in field of Islamic banking:
1. Islamic economical and financial systems.
2. Islamic mode of financing.
3. Islamic commercial and investment banking
Online Banking courses, with 2 months duration are also the easiest way to
understand the basic concepts of Islamic banking. The employees will be attracted
towards online banking courses because the organizations providing such courses
also award the certificate of Certified Islamic Banker after completion of the
training sessions / courses. These online courses are quite cheap as compared to
the hiring of consultant.
Not only employee learning is to be enhanced but customer learning programs are
also to be given importance which raises their consciousness about the distinctive
features of Islamic banking and the range of services and products. Every thing

51
should be made cleared to customers so that at the day end they are not left in
sheer confusion.

Long term
1. Diversification and innovation of financial products
Some new and innovative products should be launched in the long run. This
recommendation will have the dual effect on 1) product line: as already
competitors have greater variety of products in the market. 2) Satisfaction of
employees who need benefit for introducing of new products. This would involve
either introducing innovative Islamic products on a stand alone basis or applying a
combination of Islamic instruments. In attempting the latter, it needs to be ensured
that vanilla Islamic products such as Murabaha, Ijara and Mudarabah etc are
implemented with their necessary preconditions, consistent with Shariah
principles. This would require greater reliance on equity based financing, given
that it is akin to participation and risk sharing consistent with infrastructure
financing requirements and Islamic principles. At the same time, RBS needs to
diversify Islamic financial structured products to support project finance like
associated real estate, shipping, trade, and aircraft financing. This idea of project
finance through Islamic mode will also help the bank increasing its share in
overall Islamic market.
For this RBS should hire new and young employees having fresh ideas with them.
The Islamic Mortgage Department should have two categories of employees for
launching innovative products; old sales people, they should work in convincing
the customers to buy the products and new sales employees like fresh graduates
should work on ideas generation by constantly coordinating with the manager of
the department. These new employees can make the environment better, it will
give rise to competition between the two categories of employees. But the

52
question is that from where to find these new employees? The Mortgage
Department can make the new hiring possible if it contacts the top management
universities and by taking away their talented students, this problem can be solved
easily. The hiring of new staff may disturb the salary structure of old employees,
so the new employees should be awarded same as old ones but instead of giving
commission (as part of total salary) they should be given incentive which will
depend upon the workability of any idea. The overall salary structure should be
as:
Old employees = Basic salary + Benefits + Commission
=16,000 to 20,000 + 10,000 approximately + 0.8 %
New employees = Basic salary + Benefits + Incentive for ideas
=16,000 + 10,000 + Incentive
In this way this department will create competition between the two categories of
employees.
Recommendations for General Banking Unit
Some of the problems in the Customer Service Department can be solved in a
very short period of time. But some problems might take longer time as compared
to the short term problems so they must be solved by proper planning. The
following recommendations can improve the condition of Customer Service
Department.
Short term:
1. Improvement of ATM’s
The first recommendation for Customer Service Department is that there is need
to improve the existing condition of ATMs because it disturbs the working
environment of the bank, when customers show their dissatisfaction regarding the
problem of link down with ATMs.
RBS should improve the situation by taking the following steps:
1.1. Increase the number of ATM machines.
1.2. Inform the customers about link down problems of ATMs, basically
most of the customers are unaware of their working so they blame the

53
 bank for keeping tardy machines. Customers should be told that link down
is not the fault of their bank and this problem also arises because of using
the credit card of other banks.
1.3. ATMs should be serviced regularly each month instead of every four
months, for keeping them in proper order.
Keeping ATMs in proper working is not the hard task for the bank because by this
the bank will earn appreciation from their regular customers and the rush of
customers can be reduced from the counters. For this the manager of the
department should employ a separate person for keeping the check on these
machines.
2. Informing the customers before time
As we have seen in the weaknesses that RBS customers are not properly informed
well before time in case of any change, so they should be kept in contact with the
bank in case of the following situations:
• Launching of new products
• Changing the name of the products
• Changes in bank rules and policies
• Shifting of departments
In this regard the information desk officer should contact the loyal customers
either through phone calls or via email. RBS should use media for marketing of
its various products so that customers get the idea in case of new product launch.
If these measures are taken then most of the customers will give respect to the
staff for keeping them updated.
3. Clear information of any product
Another thing about Customer Service Department is that it should give clear cut
information of any product to the existing or potential customers for creating the
air of trust between bank staff and the customers. Information given should not be
ambiguous. In some cases bank’s staff hides the actual information especially in

54
case of marketing of new products the sales people exaggerate the benefits of
their products, in this way hiding the reality.
The manager of this department should apply strict rules for sales / marketing
staff. Some of the measures are as:
• Salary deduction
• Commission or incentives elimination
• Firing of such sales members so that other members learn some lesson
• Promotion efficient sale personals, having wide customers range.

Mid Term:
1. Employee satisfaction via improving courier services
Most of the employees in this department are mentally upset about dispatching
customer’s goods. In this regard RBS should make contacts with the famous
courier services of Pakistan, in order to avoid the problem of dispatching goods to
the desired customers. According to (Courier Services in Pakistan, 2008) the
following list contains the names and contact numbers of Pakistan’s famous
courier services:
• ABC Logistic Group 92-21-4392407
• ACI Express Pakistan 92-21-4322489
• Asian Pacific Express 92-21-2428609
• Atlas Freight System 92-42-6673133
• Continental Courier Cargo Services 92-51-5562239

Promotion rate
In this department the rate of promotion is quite slow as compared to any other
banks department. This recommendation can be implemented in the long run as
RBS has already a lot of problems to be solved in short and medium term. The
Customer Service Department is lacking cross departmental promotions.
The survey also shows that the employees are not satisfied with rate of promotion.
They want quick promotions or at least cross departmental ones.

55
The employees should be promoted with in the department so that they work well.
Cross departmental promotion will be very helpful for employees because:
• It will enhance the knowledge of employees.
• Create the feeling of hard work
• Break the monotony and dissatisfaction among employees.
For implementation of this recommendation the dedicated employees are to be
promoted at least every six months.

56
Conclusion
RBS has a very strong position in Asia. In Pakistan it has more than seventy
branches. It is known as one of the best customer service providers with focus on
the high profile business persons.
In Islamic banking it is one of the first foreign banks to launch Islamic products. It
has a bright future ahead. The Islamic Mortgage Department is working on
launching various products, although its products range can not be compared with
the competitors but one can predict that in future a wide variety of RBS products
will be covering the market. The Customer Service Department is one of the best
departments in the whole bank, offering products in areas like Deposits, Saving
and currents accounts, cash and cheque deposits, and loan facilities. Not only this,
it is also offering products as: Balance Transfer Facility (BTF) which in banking
terminology is One Stop Payment Shop, 24 hour nonstop banking centre,
relationship card through which customer can access to over 1000 ATMs, life
insurance protection, E statements through which you can receive your BTF via
email, Drop box facility- the convenience of dropping of your payments at any of
the drop boxes placed outside RBS.
Despite its strong position RBS has some of the weak points which can be
removed easily. There are weaknesses in the bank which can be overcome by
efforts of the staff. It’s strength is that it is the number one bank in whole world
with respect to the assets and the big weakness is that it should improve its
information sharing with the customers. On the whole we can conclude that
almost all of the employees are satisfied, although some are dissatisfied whose
results are shown in the survey.
But on the whole we can not compare RBS with any other bank. One can feel the
difference while entering its premises that’s why it says, “We make it happen.”

57
 ANNEXURE 1
PERSONS INTERVIEWED
Name of Designation Name of Tel. Time Remarks
organization person number &
date
RBS Team Azhar 5795114 11:00 He gave valuable &
Manager Mehmood am, 29 useful information
July about the department.
RBS Relationship Mehmood 10:45 He was confident and
Manager Jaskani am, interested in my
1st interview
Aug
RBS Associate Seemab 5795107 12:30 She was bit hesitant
Regional Fatima pm, 7 in providing the basic
Manager Aug information. But
overall she guided me
well.

DOCUMENTS CONSULTED
Title of Organizati Name of Where Date Released
Document on Author Available
Products for RBS Owaise Arif Customer 1 January 2007
Customers as Services
compared to
competitors

The Royal Bank RBS RBS General 1 February 2007

of Scotland Banking floor
RBS Islamic RBS Hassan Malik Mortgage 12 March 2008
Banking Department
Economic RBS RBS Mortgage 10 January 2008

58
Focus-Pakistan Department

59
ANNEXURE 2
EMPLOYEES SATISFACTION SURVEY
The survey was meant to know the overall satisfaction rate of RBS employees.
The main purpose of the survey was to check whether the employees in RBS are
satisfied with the banking structure and the environment. Some very basic and
direct questions were asked in order to keenly examine the attitude of employees.

Questionnaire
Please tick the following choices. If you want to mention your name then write it
below other wise leave the blank. Do not forget to write your designation. You
can give your suggestions at the back of the questionnaire:
Name: _______________________
Designation: __________________

1. Are you satisfied with the salary structure?

Yes No

2. The working environment of the bank is

Bad Good Better

3. Are you satisfied with the rate of promotion?

Yes No

4. Do you feel any problem in dispatching goods to customers?

Yes No

60
5. Does the bank recognize the training need of employees?

Yes No

6. The work load on the employees is

More than their duty According to their duties Less than their duties

Thanks for your cooperation and coordination

61
In the survey population all the employees working in the bank for more than one
year were taken in to consideration. For survey sample 64 employees were taken.
Out of 64, 20 were fully satisfied with the bank its environment, their salary
structure etc. But the rest of them were not fully satisfied. The result of all the
employees is shown in the following table:

Issues Satisfied Dissatisfied

Issue 1 Salary structure 10 2

Issue 2 Environment of the 8 3

bank

Issue 3 Rate of promotion 4 10

Issue 4 Rate of promotion 2 8

Issue 5 Training of 4 3
employees

Issue 6 Load on employees 8 2

Total 36 28

All of the results are shown in the form of a graph on the next page.

62
 Employees Survey

16
14
12
10
Employees Number

Dissatisfied
8
Satisfied
6
4
2
0
1

Is 2

Is 3

Is 4

Is 5
6
e

e
e
ue

e
su

su

su

su

su
s
Is

Is

Issues

Analysis of Survey:
Sometimes in direct questioning employees feel shy, because their privacy can not
be kept, so data was collected through the above given questionnaire. For data
collection purpose the questionnaire was distributed between the managers of
Mortgage and Customer Service Department. The managers further distributed to
their employees. After two days I, myself collected the desired questionnaires
form the employees.
Data was analysed with the results being given below:
Views of employees:
Salary structure
1.The basic salary should be above 16000.
2.Salary structure should be improved .
3.One of the employees said that, “RBS is following the principle of paying

63
 less and taking more from employees.”
4.According to most of the satisfied employees, “Salary structure offered by
RBS is better than the other banks; here we get the true fruit of our efforts.”
Environment of the bank
1.It is not conducive for the females in Mortgage Department to work, but the
overall environment is good.
2.Some of the departments do not look like part of this bank so enough
facilities should be given so that we should confidently lead our customers to
those departments. As Islamic Banking Department has been shifted from
Islamabad to Rawalpindi so it needs continuous improvement.
Rate of promotion
1.Most of the dissatisfied employees did not give any logical reason regarding
their promotion but most of them said that it is very slow so management
should give attention to those departments where employees
2.There should be more cross departmental promotions.
3.According to one employee, “Loyalty breeds promotion, employees need to
be more loyal if they want something positive form the management.”
The bank should focus on the promotion of employees because the graph is
showing a great amount of dissatisfied employees regarding issue of promotion.
Training of employees
1.Proper training is required in mortgage Department
2.Strict action for those who do not take training seriously
Workload on employees
1.Workload in Customer Service Department is heavy and limited to few
members
2.Some employees are absent during the time of job so work load is not
equally distribution between the present and absent workers.

64
References
Arif, O. Products for Customers as compared to competitors. Rawalpindi:
Pakistan.

Ejaz, Ch. (2008, July). Royal Bank of Scotland Islamic Banking. Paper presented
at meeting of Islamic Home Finance, Islamabad.

Fiscal Deficit (as % of GDP) [image] (2008). Retrieved August 10, 2008, from
Economic-Focus----Pakistan--02-April-2008-,pdf

Javed, Faiza. (2008). ABN AMRO Bank Pakistan Limited. Quaid-i-Azam

University Islamabad.

Malik, H. (2008). RBS. Rawalpindi: Pakistan.

Malik, H. (2008). RBS Islamic Banking. Rawalpindi: Pakistan.

RBS Online Banking. (n.d.). Retrieved August 9, 2008, from

www.rbsinternational.com/personal/internet-banking/login.ashx

Public Debt [image] (2008). Retrieved August 9, 2008, from

Economic-Focus----Pakistan--02-April-2008-,pdf

Royal Bank of Scotland. (2008). Royal Bank of Scotland (Annual Report).

Rawalpindi: Ejaz Azhar.

RBS Islamic Banking [image] (2008). Retrieved August 15, 2008, from
http://www.rbs.com.pk/Pakistan/islamicbnk/

Royal Bank of Scotland. (2008). Treasure Plus [Brochure]. Rawalpindi: Asif

Butt.

Royal Bank of Scotland. (2008). Balance Transfer Facility [Brochure].

Rawalpindi: Asif Butt.

Royal Bank of Scotland. (2008). Lockers [Brochure]. Rawalpindi: Asif Butt.

Royal Bank of Scotland. (2008). Credit Cards [Brochure]. Rawalpindi: Asif

Butt.

Royal Bank of Scotland. (2008). Insurance Plan [Brochure]. Rawalpindi: Asif

Butt.

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66