1.

1 INTRODUCTION OF HBL
It is the prime Bank in country established in 1941 having a registered head office in
Karachi. It was nationalized in 1974, but recently on 26th February 2004 it has been
privatized by Government of Pakistan and is taken over by Aga Khan Fund for
Economic
Development (AKFED). They acquired 51 percent of shares of HBL.
It is one of the largest Banks of Pakistan with 1439 branches and having total assets of
Rs. 434,931,930,000.
History of HBL
The first branch of HBL started functioning on 30th August, 1941 at Muhammad Ali
Road Bombay, where Quaid-e-Azam Muhammad Ali Jinnah first of all opened his
personal account.
In 1942, on the desire of Quaid-e-Azam, Habib family migrated to Pakistan and later on
shifted the Bank's Head Office from Bombay to Karachi on 7th August, 1947 just one
week prior to independence, to play its pivotal role in the development of this newly born
country.
At the time of independence, the areas which now constitute Pakistan were producing
only agricultural products raw material for indo-Pak subcontinent. Partially no industries
were there to process the raw material, therefore the raw material was exported from
Pakistan. There were 19 non-Indian foreign Banks which were engaged in the export of
crops from Pakistan with only two Pakistani Banks i.e. HBL and the Australia Bank. The
circumstances were completely un-certain. The confidence of the people had been
shaken
by the un-friendly environment and till the time peace had not been restored, people
would naturally have been interested in other things.
1.1.2 MISSION
To be recognized as the leading financial institution of Pakistan and a dynamic
international bank in the emerging markets, providing our customers with a premium set
of innovative products and services, and granting superior value to our stakeholders –
shareholders, customers and employees.
1.1.3OBJECTIVES OF HBL
Following are some of the main objectives of HBL.
To earn profit for the Bank itself and for its shareholders.
To promote and boost up business sector inside the country.
To provide employment opportunities to people.
To help in development and industrialization of the country.
To provide loan and advances to help out in self employment schemes.
1.1.4SYMBOL OF HBL
Symbol depicts
Bismillah ============Islamic Culture and Values
Sword ============== Power
Lion================ As a symbol of strength
1.1.5CORE VALUES OF HBL
HBL is firmly grounded with a corporate philosophy that incorporates five solid values
which each individual associated with the bank abides by.
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1.1.5.1 Humility
HBL encourages a culture of mutual respect and treats both their team members and
customers with humility and care.
1.1.5.2 Integrity
For them, integrity means a synergic approach towards abiding their core values. United
with the force of shared values and integrity, they form a network of a well-integrated
team.
1.1.5.3 Meritocracy
At every level, from selection to advancement, they have designed a consistent system
of
human resource practices, based on objective criteria throughout all the layers of the
organization. HBL is therefore, able to achieve a specific level of performance at every
layer of the organization.
1.1.5.4 Teamwork
Their team strives to become a cohesive and unified force, to offer the customer, a
service beyond his expectations. This force is derived from participative and collective
endeavors, a common set of goals and a spirit to share the glory and the strength to
face
failures together.
1.1.5.5 Culture of Innovation
Their aim is to be proactively responsive to new ideas, and to respect and reward the
agents, leaders and creators of change
2.1 Departments of HBL
There are few departments on which general or day to day banking of HBL composes.
There details are as under:
Deposit department
Clearing Departments
Inland Remittance Department
Bills Departments
Advances Departments
Cash department
CD Department
Foreign Exchange Department
2.1.2PRODUCTS OFFERED BY HBL
2.1.2.1 Tele-printer service
Introduced in 1952, this system helped the Bank to improve its services.
2.1.2.2 Rupee Traveler’s Cheques
It was introduced in 1957. Here the customers are provided the facility of encashment of
their traveler’s cheques through any branch of the Bank.
2.1.2.3 Small Factory Owner Scheme
In 1959 the Bank offered loans to small scale producers under the “small factory owner
scheme” in order to boost the economy of Pakistan.
2.1.2.4 Foreign Tele printer Service
It was introduced in 1961. The idea behind this scheme was to provide quick and
prompt
Banking services to customers in foreign countries.
2.1.2.5 Gift cheques schemes
It was launched in 1962. Under this scheme, the Bank provided customers with
preprinted
cheques of various denominations which could be used to send gifts to their loved
one on various occasions.
2.1.2.6 School Banking
This scheme was introduced in 1962 to provide Banking services to children in a
number
of schools though out the country.
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2.1.2.7 “Drive in” Banking
HBL established “Drive in” branches in 1962 at various major cities of the country where
the customers could avail Banking services without getting down from their vehicles.
2.1.2.8 Mobile Banking
It was introduced in 1962. The feature of this scheme is to provide Banking services to
the customers residing in the rural areas.
2.1.2.9 Night safe scheme
In 1962 the Bank offered facility to their customers to deposit their valuables at night in
specified branches of the Bank.
2.1.2.10 Computer accounts
In 1962 the Bank introduced computer accounts through which most of the accounts in
head office were computerized
2.1.2.11 Computer Prize Bond
It was introduced in 1966. It is a scheme through which prize could be declared for prize
bond scheme.
2.1.2.12 Credit card scheme
It was introduced in 1966 through which customers could get certain sum of money from
specified branches. Many business organizations accepted payments through valid
credit
cards.
2.1.4AGENCY SERVICES TO THE CUSTOMERS
HBL also provides agency services to its customers. Some of which are as follow:
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2.1.4.1Collection of cheques
HBL pays and collects cheques on behalf of their customers, and for this it receives
commission form their account holders.
2.1.4.2 Collection of dividends
The Bank provides a very useful service by acting as an agent for its customers. It
arranges the collection of dividends on shares and securities held by its customers. The
customer is simply to inform the issuer of the securities that the interest on the
securities
is to be credited to his account in the Bank. Bank charges commission for the collection
of the dividends on behalf of account holders.
2.1.4.3 Purchase and sale of securities
HBL if authorized by the customers also makes purchase and sale of securities on the
behalf of its customers. Bank charges commission for the purchase or sale made by its
on
behalf on the customers.
2.1.4.4 Execution of standing instruction
HBL also executes the standing in case if it is ordered by the customers of the Bank to
do
so. These instructions are usually given in writing to Bank. The Bank debits and credits
the accounts of its customer for the transactions carried out by the individual or firm.
2.1.4.5 Transfer of Funds
HBL, also transfers funds of the customers from one Bank to another Bank. If the
transfer
is within one station, they don’t charge any commission and even if they charge, they
charge on reduced rates.
2.1.4.6 Acts as an agent
HBL also acts as an agent, correspondent or representative of its customers at home
and
abroad.
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2.1.4.7 General utility services
HBL also performs a number of generally utility services to its customers which are as
follows:
2.1.4.8 Foreign exchange Business
HBL transacts foreign exchange business by discounting foreign bills of exchange and
thus provides facilities for financing in foreign trade.
2.1.6ORGANIZATION STRUCTURE
A well-developed and properly coordinate structure is an important requirement for the
success of any organization. It provides the basic framework within which functions and
procedures are performed. Any organization needs a structure, which provides a
framework for successful operations. The operation of an organization involves a
number
of activities, which are related to decision making, and communication of these
decisions.
These activities must be well coordinated so that the goals of the organization are
achieved successfully.
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2.1.6.1 STRUCTURE OF HBL
At present the Bank operates through one central and 23 Regional Offices and 1439
branches, all over Pakistan. The president and Executives Committee look after the
affairs of the Bank. Each Regional Head Quarter is headed by a Chief Executive and
assisted by General Manager Operations and General Manager Support Services. The
Regional Head Quarter controls the branches in their area.
Overseas operations consist of 65 main branches, two affiliates, two representative
offices and two subsidiaries.
President, from Head Office at Karachi controls the officers of the Bank with the help of
the senior management. Functional responsibilities of the Banks are broken into seven
groups known as
1) International Operations Group
2) Corporate Banking and Treasury Investment Group
3) Retail Banking and Operation Group
4) Finance, Audit and Administration Group
5) Assets Remedial Management Group
6) Credit Policy Group
7) Corporate Bank, Financial Institutions and Project Finance Group
In addition to the overall controlling authority, president also manages the International
Operations Group individually. While the Senior Executive Vice Presidents supervise
rest of the functional groups. Each Senior Executive Vice President is individually
responsible for the group which is assigned to him.
At the level of provinces there are Regional Head Quarters headed by Regional Chief
Executives (RCE). Each RCE is assisted by GM operations and GM Support Services.
Branches are also controlled by the RCEs. Circle Offices of the past times have been
removed to reduce Managerial Layers, which were working under the control of Zonal
Offices. This happened as a result of policy of beginning new changes in the
organizational structure.
2.1.6.2 Organizational Chart of HBL
A chart defines the line of authority in an organization and its departmentation. It is a
sort
of visual presentation of the organizational structure. It specifies the duties and
responsibilities of the personnel of the organization. The Organizational chart of HBL is
given below.
2.1.6.3 Organizational Chart
Chairman
President
Board of
Directors
SEVP
International
Operations
SEVP Corporate
Banking & Treasury
SEVP Retail
Banking &
Information
Technology
SEVP Finance, Audit
& Administration
SEVP Asset Remedial
Management
SEVP Credit Policy
SEVP Corporate Banking,
financial institute & Project
Finance
2.1.7ANALYSIS OF ORGANIZATIONAL STRUCTURE
The purpose of an organizational structure is to help in creating an environment for
human performance. It is then, a management tool and not an end in its own. Although
the structure must define the task to be done, the rules so established must also be
designed in the light of abilities and motivation of the human recourse available. By
analyzing the organizational structure of HBL presence of the following elements can be
found in its structure.
2.1.7.1 Centralized Decision Making
By looking at the organizational structure of HBL would be found that the structure at
HBL is a critical one. All the decisions are made at the top management level and the
subordinates have to obey these decisions. This trend in the decision making shows a
pattern of rigidity in structure of HBL.
2.1.7.2 Downward Communication
Communication is the process by which information is exchanged and understood by
two
or more people, usually with the interest to motivate or influence the behavior of others
in
the organization. Downward communication is the message and information sent from
top management to subordinates in a downward direction. Managers can communicate
downward to the employees through speeches, massages in company publications,
information leaflets, tucked into pay envelops material on bulletin boards, policy and
procedure mandates.
The same pattern is followed at HBL. No doubt it’s a very traditional approach but it can
create problems because it ignores the receiver of the communication because the
issuer
21
of policies and procedures does not ensure communication. In reality may the
messages
communicated downward are not understood perfectly.
2.1.7.3 Chain of Command
The chain of command is an unbroken line of authority that links all persons in an
organization and shows who reports to whom. By analyzing the organizational structure
it can be found that there is a scalar principle followed with in the Bank because each
and
every person knows to whom can one report. The authority and responsibility for
different tasks and duties are different, as well as every one knows the successive
levels
of management all the way to the top.
2.1.7.4 Authority and Responsibility
The chain of command illustrates the authority structure of HBL. Authority is the formal
and legitimate right of the manger to make decisions, issues orders and allocates
resources to achieve organizational desired outcomes. By analyzing the chain of
command of HBL, one can come to the conclusion that, as there is scalar pattern
followed at the organizational setup of HBL therefore it is implied that everyone in his
position knows that what is one’s authority and what is the responsibility and the
authority it allocated.
2.1.7.5 Delegation
Delegation is the process, which managers use to transfer the authority and
responsibility
to position below in the hierarchy. Most organizations today encourage managers to
delegate authority to the lowest possible level to provide maximum flexibility to meet
customer needs and adapts to the environment. But at HBL no such system prevails the
managers try to keep as much of the authority as they can and if some authority is
delegated it is sure that it will be misused
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4.1 SWOT ANALYSIS OF HBL
HBL is considered to be a very sound bank in the financial circles. The bank where the
customers can safely keep their money as long as they want.
In SWOT analysis the best strategies accomplish in organization’s mission by:
1. Exploiting opportunities and strengths.
2. Neutralizing its threats and
3. Avoiding its weaknesses.
Following is a list of SWOT of HBL
4.1.1Strengths
A skill or capability that enables HBL to conceive and implement its strategies.
The officers of HBL are considered as one of the most able professionals in the
banking world.
I observed that HBL employees interact with their clients as if they are their
personal friends and discuss about their problems as their own.
HBL has got a reliable and easy to use internal computer system. Every
information regarding the transactions in customers’ deposits has been
computerized.
HBL maintained its data properly.
HBL has very good security system.
HBL is the larger commercial bank in Pakistan with the network of over 1439
domestic and international branches.
Being the pioneer of banking in Pakistan, HBL is the oldest and is the richest in
experience.
HBL focuses on consumer banking by lucrative schemes, products and services
suiting best to the wants and demands of the customers.

HBL has opened all its branches at commercial areas so that the customers or
clients face no problems in reaching to the bank.
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The band is always on the look to improve its services both to the domestic as
well as overseas customers.
Human resources development and introduction of new technology towards
modern banking.
24 hours cash access and safe payment products for high value transaction.
Having potential to encounter the competitive environment in the market.
Veteran and experience private management group also involved in other interests
like, textile and cement industry.
Customer enjoys the services at the residential localities.
4.1.2Weaknesses
Highest number of branches effecting the proper maintenance and difficulty in
providing same working environment at the each branch
Poorer system of recovery of the system is a threat to bankruptcy.
Lack of customer feed back.
Low job satisfaction.
Poor ATM’s Service
Inconsistency in efficiency and working atmosphere due to the largest of
branches.
Sense of insecurity in the employees serving at low profitable branches due to the
down sizing.
Females feel uneasy in an environment among the male workers.
Victim of political, legal and socio-cultural pressures
.Lack of professionalism in the branch employees mostly.
4.1.3Opportunities
Huge untapped market potential in consumer banking
In opportunity exist, in form of opening of ladies banking section within the
branch which is entirely a new idea and it will attract customer.
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Opportunity for developing value added services combined with corporate
banking relationships, cash management services to large and medium sized
corporate clients.
Growing policies of government on business and commerce sector provide HBL
opportunities to take advantages of these policies to meet efficiently with the
business people to solve their problems with the instant cash and financing
facilities.
Govt. is taking very bold steps to promote IT in Pakistan. HBL has an opportunity
to improve in technology.
Large international network which principally focuses on trade finance with
Pakistan can be utilized to tap trade activities in other markets. In addition,
services such as cross border / offshore financing for corporate customers can be
enhanced.
Customer feedback on different products and accounts has really improved the
bank performance and encourage the atmosphere for other future policies.
HBL also has an opportunity to expand its new technological advancement like;
tele banking and internet banking facilities in order to serve the customer more
efficiently, specially
E-banking facility is also a new opportunity which is a flourishing business in
foreign countries and can also be here, if HBL takes the initiatives.
Further reduction in intermediation costs possible, with improving technology.
Due to efficient and veteran management group, HBL can also improve Ill and
expand its foreign operation successfully.
Habib Bank Limited provide opportunity to utilize its skills and efficiencies in
leasing business.
4.1.4Threats
An area in the environment that increases the difficulties the organization’s
achieving high performance.
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Consolidation in the banking sector resulting in increased competition.
Shortage of trained and specialized staff at lower executive and officer levels
The threat of inconsistency and government policy regarding to business and
economics sectors, specially political and regional situation which makes the
environment uncertain.
Growing global technological advancement.
Strict regulation by government over credit facilities to the customers as Ill as to
meet the prudential.
Loss of confidence of overseas customers due to freezing of accounts.
Facing more competition by foreign banks in the market.
Foreign banks are flourishing in field of consumer financing.
Also the increasing operation of private banks.
Highly attractive and advance services by foreign banks to their customers.
5.1 CONCLUSION & RECOMMENDATIONS
5.1.1CONCLUSION
HBL is clearly the first choice of every one who believe in qualitative approach of
banking an environment of highly responsible people. Bank is enjoying a healthy
market share and taste of good status in terms of its operative features and customer
support. HBL is clearly the best bank operating in Pakistan. Personal loan is a
Sdistinguished feature of HBL experiencing a good reputation and reasonable mark
up with respect to prevailing market mark up with assurance of satisfaction and
support. HBL has more customers as compare to other banks, if they given proper
attention to every customer then in few years it will be the leading bank of the
country.
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5.1.2RECOMMENDATIONS
The management should try to decrease job insecurity among the employees.
Training program should be started for internees and newly appointed employees.
There should be transport facility for the employees.
The number of employees should be increased in order to decrease the workload.
The bank charges high service charges as compared to the other banks, so these
should be lowered down.
Surveys must be conducted regarding customer satisfaction level and all
employees of this dept. should look forward to getting feedback whenever
possible.

Adding of value added features that offer competitive advantage is also a

means of avoiding customer dissatisfaction.
Quick response to customer queries is necessary to maintain a healthy relationship
with the customer.

Proper training of customer handling should be given to employees.

Training workshops and coaching clinics should be considered as an option that
would provide adequate results.
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