PREFACE

Business environments are becoming more and more complex with the passage of time. To understand and deal with such riddle phenomena, one needs a lot of energy and knowledge. So business education has become an evolving science, which helps to solve the business problems. Academic education provides a general knowledge about business decisions and policies. This Internship -- as an integral part of MBA program, provides the opportunity of peeping into real professional life of the business people. It enables us to evaluate and understand the practical application of all the terms & techniques that we have studied during our course work. I was assigned to complete my Internship comprising practical work of 6-weeks, at Askari Commercial Bank Limited, Multan. In this Internship Report Ive tried my level best to explain each and every significant aspect of the branch comprehensively.

ACKNOWLEDGMENT
Praise to Almighty Allah, who bestowed upon me the potential and ability to accomplish the task of the work. I wish to express deep sense of gratitude to, Mr. Muhammad Rizwan, Director Placement & Internship, who provided me this opportunity to achieve the practical experience and for his valuable supervision and helpful suggestions in the completion of this report. I also wish to acknowledge Zubair Ahmad Sheikh--Branch Manager, for their cooperation and proper guidance given to me from time to time to complete this assignment.

Author

The goal of the Department of Business Administration is to develop and provide professionally trained managers by offering broad knowledge in a number of business areas and thus preparing the students for versatile and successful management careers. As a prerequisite of MBA Program, all the students are required to under go a six-week internship during the summer vacation. For this purpose the Department sends letters to highly reputable business/industrial/commercial organizations to take their approval for accommodating the students. The internship helps the students to gain some understanding of how the organizations formulate strategies to achieve their stated goals and at the same time enables the students to face challenges in their professional life by sharpening their skills of decision making, leadership, communication and team work. The organization assigned to me was the Askari Commercial Bank LTD. Firstly I got my letter issued from the Department and presented it to Mr. Zubair Sheikh, the Operations Manager at ACBL Multan. After one week they have received the acceptance letter from their Head Office.So my internship was started on 26-06-00.

Formal Definition: "Banking is an institution transacting the business of accepting for the purpose of money from public, repayable on demand or otherwise and withdrawal by cheque, draft, order and includes any post office saving bank". These are the following types of banks

Central Bank Commercial Bank Industrial Bank Exchange Bank Saving Bank Mortgage Bank

Commercial Banks: -

Commercial banks are companies that transact business of banking in Pakistan. Commercial banks have constituted the most important source of institutional credit in the economy of Pakistan.

Askari Commercial Bank Limited Multan: Askari Commercial Bank Limited Multan was inaugurated on December 28,1994. It is located on Abdali Road Opposite to PIA Office. It is a prosperous branch striding towards great achievements. At the time of its establishment the factors that were considered are as follows

Multan zone is covering a large population. Multan City is linked to many big cities. Agro based area constituting growers and granaries Army Offices & Fort Colony Educational Institution

The total strength of staff in ACBL Multan is 34. They are dedicated their work. The branch is progressing rapidly. Under the dynamic leadership of Vice President Mr.Tariq and Operation Manager. Mr. Zubir Sheikh. During the first two weeks of my internship at ACBL, I was assigned to work in Accounts Opening Department and Term Deposit/ATM Department. I learnt following things in these two departments: In the Accounts Opening Department their was Sir Rehmet who is very much cooperative. Firstly I have gone through different types of the accounts and the operations of different accounts. I have opened accounts of so many people myself. I have also gone through the requirements of different types of accounts. For Example the things that must be consider while opening the account. There are different mandates available for different accounts The whole system is computerized thats why at the end of the day they post the whole information on their computers. For closing the accounts and also for issuing the checkbooks they insert the information in their computers. I have also studied the cases in which the title account is transferred to some other people, and when it is possible to do this thing because there are some rules in

the bank. So he has also told me that when and where it is possible to fulfil the demand of the customer. I have also gone through different schemes and the profits they give on different schemes. And how they calculate their interest. They calculate it on the computers but they also keep the record manually. For the second week I have worked in the ATM/Term Deposit Department. In that department there are so many customers. Because the practice is that the people who request for opening the account they at the same time apply for ATM Card. They are having approximately 1700 customers of ATM Cards in Multan. I have also studied the report that was sent to them when the ATM operations was started in Multan in January this year. In that department the Term Deposits are also maintained. They again calculate the interest on these deposits on computer. In Remittances Department I saw the issuance of Demand Draft (DD), Telegraphic Transfer (TT), Mail Transfer and passing relevant vouchers. In addition to all these things I have also learn that how to issue the payslip and payorder. During these two weeks I have also learn how to record the entries in their registers and how to record the receipts and payments manually. In this Department almost all the work was done manually except Demand Draft, for this purpose they are having computers, in which the system was installed by their Head Office which is now-a-days being changed. And a new more fast system is going to be installed in Multan Branch. After that three days I have worked in Credit Card Department. In that Department there is only one person who is MBA from our Department.In that Department there is no work at the end of the month but he has told me about different types of the credit cards and he has also told me the process of issuing the card. I saw the process of billing in that department. After that three days I have worked in the Accounts Department. In that department I have learn that how the record is maintained in the bank. And how the operations of the whole day are checked in the Accounts Department. I have also made the voucher register for the whole month of July 2000.I have learn so many other things but they have not told me about the statements which are made in this department.

After that my last week was for Credit Department and Foreign Exchange Department. But I have learned less in this week because at the month start there is a different type of work. During my internship at ACBL, I used to send fortnightly report regularly to the Director Internship Program; in which brief description of the work that was assigned to me at the bank, had been mentioned. There is also another obligation for the students of MBA i.e. they have to write comprehensive reports about respective organizations where they did their internships and have to submit these reports to the Department. So in order to fulfil this obligation, I tried to sort out as much information about the ACBL, as possible. For this purpose I used my observation. I observed the behavior of the staff at the branch, their interactions with their customers, their attitude towards their jobs, their mutual working relationships and the style of management. Whenever I got the opportunity, I used to talk to all staff members for finding out their views about the management. As far as my internship report is concerned, I have tried to give the information according to the Departments in the bank. ORGANIZATION CHARTS Organogram Of Askeri Commercial Bank Limited Head Office,

Lahore

PRESIDENT

MANAGING DIRECTOR

F.E.D A.D A.D

(SVP) (SVP) (SVP)

. C.D
(VP)

F.E.D = Foreign Exchange Department A.D = Advances Department A.D = Accounts Department C.D = Computer Department S.V.P = Senior Vice President

V.P = Vice President

Organogram Of Askeri Commercial Bank Limited ABDALI ROAD, Multan

MANAGER

Advances Gen.Banking Cash

F. Exchange

Department Department Department Department

Cash Cash Section Section

Receipt Payment

Clearing Remittance Accounts Computer Section Section Section Section

A/C Open. Section

Account Opening Department

The banking history is replete with various instances of fraud. These frauds are largely attributable to incorrect opening of accounts. Therefore in order to prevent these frauds, the Branch Managers & other officers need to take due care and exercise required precautions at the time of opening accounts. This

aspect of banking is full of delicacies, always ranks at top priority and much of the banks operational success depends on it. At the time of opening of the accounts, bank officers should tactfully obtain as much information as possible about the integrity and character of the person, his correct name, address and occupation. This in fact is the only opportunity when they will be able to talk to the prospective customers in a friendly and frank atmosphere. This is the time when they have a slight edge over the customer when he is willing to impart as much information about his personal status and business etc. Therefore it is very much necessary that due care and proper procedure be followed up for opening different types of accounts for various types of customers. Borrowing funds from different sources has become an essential feature of today's business enterprises. But in the case of a bank borrowing funds from outside parties is all the more vital because the entire banking system is based on it. The borrowed capitals of a bank are much greater then there own capital. Banks borrowing is mostly in the form of deposits. These deposits are lent out to different parties. Such deposit creation is done through opening an account in the Bank. In ACBL Multan Mr. Rehmet Ali is operating the account-opening department along with performing some auxiliary functions of checkbook Issuing.

Types of Accounts: The Askeri Commercial Bank LTD is having accounts of the customers to be classified as follows:

Current account. Savings Account. Askari Special Deposit Account. Askari Bachat Certificate.

Current Account: -

In current account there is no interest on it. It is for only transaction purposes. They are paid on demand. When a banker accepts a demand deposit, he incurs the obligation of the paying all cheques drawn against him to the extent of the balance in the account. As there is no profit paid on this account it is also called cheqing account because cheques can be drawn on it. Current account is mostly opened for business.

Saving Account: The purpose of this account is to induce the habit of saving. The profit on PLSsaving Accounts in ACBL is paid on the basis of profit and loss sharing at the rate of 8.50% six monthly. The minimum deposit for opening the account is Rs.100/- the individuals open such accounts for saving purpose persons belonging to Armed forces also open this account.

Askari special Deposit Accountant: ASDA account is interest bearing current account. Interest is paid on it at the rate of 8.00% for Rs.50,000/- to Rs.4,999,999/-. The rate increases as the balance increases in the account. The payment of return is monthly, where as the rate of return with aspect to the amount of minimum deposit. It is also chequing account because cheques can be drawn on it. It is necessary for this account that the client must maintain a minimum balance of Rs. 0.05 Million at the end of the month. Thats why it is similar to current account. It is mostly opened by Business but individuals too open this account.

Askari Bachat Account: ABCs are long term fixed deposit for 3 and 5 years. The payment of return is on monthly basis rather than on maturity of deposits. The minimum balance requirement is Rs. 25000/- and maximum balance requirement is Rs. 1.0 Million. If ABC is for 3-years, the rate of return for 3-years is 12%; if AB C is for 5-years the rate of return is 13%. Because in such account the balance is kept for either '3' or '5' years within the bank no cheque is drawn on it. That's is why it is not a chequing account.

Account opening procedure: When a customer opens an account, he enters into a contractual relationship with the bank. As such all requisites of the contract are necessarily be fulfilled. For instance, at the time of opening the account, the intended customer must have following characteristics:
a. b. c. d.

He must be major in age. He must be of sane mind. He must not be insolvent and bankrupt. He must not be bewared under any law from entering into any contract. Therefore, while opening the accounts, the officer must see that the above qualifications of the customer are established.

GENERAL GUIDELINES FOR OFFICERS FOR OPENING THE ACCOUNTS: Here are some essential points that must not escape the attention of the officers while opening the accounts:
1. As much information as possible, must be elicited from the prospective

customer relating to his means, line and place of business. 2. Each and every column of the account opening form should be neatly and correctly filled in with necessary details. 3. Account must be properly introduced. in this concern the following precautions are to be observed:

As far as possible the person introducing the account should attend the bank personally with the perspective customer. In case the person introducing the account does not call at the bank, extreme care should be taken while verifying his signature and genuineness. The staff members generally should not introduce the account. They will introduce accounts only for those persons who are personally known to them and whose credentials are absolutely clean. Introduction from persons having doubtful dealings with the bank should be discretely declined. opening form in presence of the introducer who is then aware of the particulars furnished and can corroborate the same.

4. As far as the prospective customer should complete possible, the account

5. Specific information concerning the profession or occupation of the

prospective customer should be recorded in the account opening form. The description Private Service or Business is insufficient. 6. Signature on the account opening form as well as specimen signature card must be put by the customer in presence of the Bank Officers/Managers who will attest them preferably in presence of the introducer. 7. No chequebook should be issued to the mew account openers unless their accounts are properly introduced. 8. Account may be opened with cash or deposit of cheque. In case, when cheques form initial deposits, it is incumbent upon the Branch Managers to satisfy themselves additionally that title of the account holder is genuine for the cheque deposited. 9. Letter of thanks should be sent to the introducer the day the account opened. This precaution would accomplish the purpose of intimating the introducer that the account has been opened on strength of his introduction thereby inviting disclaimer if untrue. 10. Number of the customers National Identity Card should be correctly recorded in the account opening form and a copy of it should be kept on record. 11. No account should be opened in the name of an undercharged insolvent.

For different type of accounts the operation/procedure is also different. For Example it is different for individual account, joint account, proprietorship, partnership, limited company account and for the account of club society or association as explained below: Individual's Account: When a single man or women opens an account in his/her own name and has the right to operate it is called individual Account. Documentation Requirement: For literate person copy of National Identity Card is required as a primary requirement. For illiterate person and pardanoshin Women, along with the copy of National Identity Card requirement he or she must come in person for opening the account.

OPERATION:

The person place a "Check Mark " in the type of account and type of operation required The person fills the form and fixes his two or four signature in the signature space and get introduced his account. There is one more thing that must be filled by the person, he fills in next of Kin, where he authorized any person may be his father, mother, husband/wife or anyone else and also affix his signature to certify it. It is needed that in the absence of the person the bank can contact that person. The person put her /his signature on the signature specimen Card (SS CARD). On the back of the SS Card the name, telephone number and the address of the person is filled. The person deposits the initial amount for opening account on to the cash counter. If the person put his signature in Urdu or any language other than English, he signed a "Vernacular form " where under take that a fixed signature is original and his own signature. The next day is the opening of account.

Joint Account: When two or more persons open an account in their name, it is called joint Account. Any two persons can open joint account.

Documentation: For joint account copy of N-I-C Card of all the persons is obtained other things remaining same as in individuals account. The persons fill the form and also fill the separate portion of the form that is for the joint accounts. Signature of both the persons are obtained on the form and SS Card. And they also must specify that the account will operate singly by any person or jointly. Proprietorship Account: -

When any person who is single owner of his/her business opens an account in his firm name, this account is called proprietorship account. For this kind of account, an application for opening the account on the firm letter -pad is required alongwith the N-I-C- Card of proprietor.

Partnership Account: When any firm in which two persons are partners of each other opens the account then it is called partnership account. In this account it is specified that two or more persons act on behalf of the partnership firm or all acts on behalf of firm. In that case every partner is liable for any thing and both are having authority for drawing and enclosing the cheques.

Documentation: Following things are required for opening the partnership account,

Name, address of all partners is written on the pad Copy of N.I.C card of all partners Application to open the account on the firm letter pad. Partner ship deed in case registered partnership firm. Letter showing the Limited Authority of one or more partners to act on behalf of the firm.

Limited Company Account: While opening the account of any limited company the officer must ensure the following things:

Memorandum of Association. Articles of the Association Resolution of the Board of Director. Certificate of Incorporation. certificate of commence business

. After completing all this process, the forms are signed from manages of the branch after which the forms are stamped and the whole information is posted in their computers and the forms are posted into the files of account opening forms. The account opening form is attached in the annexture. There is one more responsibility in this department and which is issuing the checkbooks. Check books are issued only for checquing account such as current Account, saving Account and ASDA Account. They are not issued for other term deposits because of their Long term Accounts nature. When an account is opened, cheque book is usually issued the next day, however they too are issued on the same day depends on the situation for example the customer is well known to the bank and already he is having accounts in the bank etc. After that cheque books are issued whenever customers need chequebooks. Chequebook leaves varies with the nature of the account. For example 25leaves and 50 leaves Chequebook are issued for current and ASDA accounts. Where as 10 leaves and 25 leaves chequebooks are for saving accounts. There is excise duty and provincial tax carried on Chequebook leave.

TERM DEPOSITS/ATM DEPARTMENT

Accepting deposits is one of the important functions of a bank. The Deposits Department of the bank performs this function. Deposits are as crucial to a bank as soul is to the body of a person. It is the lifeline of the bank. The banks receive surplus income of the individuals, companies in the form of deposits. These deposits are useful in many ways as they provide source of earning for the bank and help in meeting the consumption and business needs of community. The surplus of money in a country is also influenced by the aggregate quantity of bank loans. All the deposits are infect liability of the bank, as the bank has to offer suitable rates of interest on these deposits to the depositors or simply have to repay them on demand. Bank performs its business with depositors funds and makes profit out of these deposited funds. In ACBL the Deposit Department and ATM Department is the same.

Term Deposits: A term deposit is a deposit that is made for a certain periods of time. At the end of the specific period, the customer is allowed to with draw the principle amount. ACBLs Term deposits are of different types one of them is "Askari" Advantage one month. The rate of return on this account is 9.75%, and the payment of return is on Roll over Basis. The term deposit accounts vary one month to 5 years. And the min. balance requirement is Rs.5000/- for all other nine accounts. And the payment of the return is given at the maturity of the deposit. The amount of profit is given to depositors in three ways:

By cash By sending a bank Draft to depositors Home address or Officers or whichever is specified as mailing Address. The amount is seriated in any one of the checking Accounts of the depositors.

ATM- Cards: -

Issuing ATM cards is also a responsibility of Term Deposit Department. ATM Cards are only issue to the people who are having their accounts in ACBL. They are having about 1700 customers in Multan. And they sent the application package to their Head Office frequently. The procedure for issuing the ATM Card is as follows:
1. The person, first open the account within the bank or he may already

2.

3.
4.

5. 6. 7.

having the account in the bank but it is compulsory to have account in the dank. Then he fills the ATM application form in which name of account holder, Fathers name account number and N.I.C Card number are mentioned. After completing this process , the application package is sent to head office ACBL head office takes a period of 3-4 weeks for preparing and processing of ATM cards, after which the cards are sent to ACBLs issuing branch. The pin codes of the ATM Cards are sent by Karachi Branch and they are sealed so that they remain confidential. ACBL takes Rs.200/- per year as charges for a card. The person can cash only Rs.10000 in 24 hours.

REMITTANCES DEPARTMENT
I have spent about two weeks in the Remittance Department. I have work their more then any other department. This department provides services to the customers of the bank. The main function of this department is transfer of funds. There are different modes of Remittances:

Demand Draft. Telegraphic transfer. Mail transfer. Pay order. Payslip. OBC. IBC.

Bank Draft/Demand Draft (DD):

A bank draft is an order instrument issued for payment of a certain sum of money to the order of a certain person and drawn on one office of the bank by another office. Actually the DD is drawn on the same bank at the different branch. If two banks are involved then the DD is send to the other bank but in the other case it is handed over to the applicant. There are three parties to the draft: Drawer: Issuing Bank Drawee: The Bank on which the draft is drawn. Payee: The named person to whom the payment is to be made.

Where request is received by a banker to issue a bank draft, it should be a written request either on the banks standard application form or on a separate paper signed by the applicant enclosed with cash or cheque covering the amount of the draft and other charges of the bank. After issuance of a bank draft, it is handed over to the applicant and its advice containing the particulars of the draft is sent to Drawee branch for their necessary information and payment of the draft on its presentation.

Demand Draft Application Form:

The ACBL has a standard application form that must be filed in by the customer for issuance of Demand Draft. The DD Application Form contains:
o o o o o o

Applicants Name Applicants Address Signature of Applicant In Favor of (Payees Name) Drawn on (Name of Drawee Branch) Amount in words and figures

The authorized officers (at least two) must sign this form.

Banks Charges:
The bank recovers different types of charges from the applicant on issuance of DD, including:
o o o o

Excise Duty Commission Tax Postage Charges

Payment of Demand Draft: Practical procedure with regard to the payment of the demand draft, in the Askeri Commercial Bank may be summarized as follows:

1. All drafts drawn on a branch should be routed through the General

2. 3.

4. 5.

Ledger Accounts Draft Payable of the Bills Payable Account. The drawee branch on receipt of the IBCA credits this account. Signature should be verified on all drafts drawn on a branch. Normally, payment of a draft should be made after receipt of a corresponding advice. In case the advice has not been received, payment should be executed through the approval of the Manager at the drawee branch who should satisfy himself with regard to the authenticity of the draft in terms of signature and otherwise. On receipt of the advice from the drawee branch, signatures should be verified and test verified if the amount of a draft exceeds Rs.25000/The draft when paid should be marked in the DD payable register.

Mail Transfer (MT) Some times a constituent of a bank wants to transfer funds from one account to another or a non-constituent wishes to remit funds in a particular account maintained at some place with a branch of the bank of when the accounts are transferred from one branch to another branch, such amounts/balances are remitted by means of mail transfer. The procedure for issuance of a mail transfer is the same as discussed for drafts except that the applicant is provided with a memorandum for money received from him for the issuance of a mail transfer on a particular branch of the bank. The payee must be an account holder (customer) of the drawee branch. So it is one of the fastest way to transfer money. Payment of MT: The procedure for payment is as follows.
1. On receipt of advice from drawer branch, the test should be verified if

amount exceeds Rs.25000. 2. The particulars of MT should duly be entered in TT/MT payable register. 3. Following vouchers should be passed after the test has been verified: Dr..Head Office Account _ Drawer Branch.

Cr..Bills Payable Account _ MT payable.

4. When the customers account is to be credited, the following entries are

passed: Dr..Bills Payable Account _ MT payable. Cr..Customers Account.

5. If the payment is to be effected in cash, the entries are:

Dr..Bills Payable Account _ MT payable. Cr..Cash. Before making the payment of MT, the drawee branch must ascertain the following:
o o o

It is drawn on the same branch. Payee has signed the revenue stamps of adequate amount. Payee is properly identified.

Telegraphic Transfer (TT)

Generally a mail transfer advice reaches the drawee branch the next day, when courier arrangements exist. However, when it is sent through post offices, it usually 2 to 3 days to reach its destination. But sometimes an individual whether customer or not, demands that his funds should be transferred from one place to the another through the quickest means. In such cases, transfer of funds message is passed on through a telegram, ordinary or express, to the drawee branch of the bank. A tested message is sent to the drawee branch followed by the confirmation copy. In this case the payment is immediately required by the payee, the testes message is given on the telephone. Besides normal charges as those recovered on issuance of demand draft, the bank charges on additional expenses. i.e. Telephone Charges of amount Rs.100 are also recovered from the customer.

Payment of T.T: A TT facilitates urgent transfer of funds either by a telegram or through telephone. A step-wise procedure relating to the payment of TT at the drawee branch is as under:
1. The drawee branch receives message either on telephone, or through

telegram. In case of a telegraphic conversation, the concerned official at drawee branch should ask for the proper identification of the official at the drawer branch. Whereas the message should be decoded in case of telegram. 2. The particular of the TT should duly be entered in the TT/MT payable register. 3. In case where the customers account is to be credited, following entries be passed:

Dr..HO Account _ Drawer Branch Cr..Bills Payable A/C _ TT Payable

Dr..Bills Payable A/C _ TT Payable Cr..Customers Account.

4. In case where the payment is effected in cash, the following vouchers should be passed: Dr..Bills Payable A/C _ TT Payable Cr..Cash
5. TT should be paid after proper identification.

Telegraphic Transfer / Mail Transfer: -

Issuance:

The request for maintenance through T.T is taken on the standard printed form.

The customer fills it & signs it. The Head & remittance department checks it, the charges such as commission, tax, and telex as per effective schedule and signs it. If he fills the tax exemption from then no tax is levied. Then a neat T.T is made on the white slip. There are 3 copies. The original faxed to the Branch, one to the Head Office and one are kept as record. The entry is made in the TT issuing register. The following vouchers are posted. Commission Charges.

Cr

Cr Fax charges. Cr W.H. Tax.

When commission bill is received, it is attached to the T.T office copy in the file.

Payments:

When a T.T arrives, the test numbers are checked and the signatures are verified. The entry is done in the T.T pay able register. The following vouchers are prepared & given for posting.

Dr Head Office. Cr T.T Pay able. Dr T.T Payable. Cr Party A. /C.

If there is no a/c then the T.T receipt needs revenue stamps and then the payment is made. The T.T receipt is strictly non-negotiable.

Payorder (PO)

A bankers payment order is an instrument drawn by a banker on himself. Implicit in a payment order is an undertaking on the part of the banker to pay a certain sum of money. On the presentation of the instrument. The payment orders are generally issued for anyone of the following practical purpose:
1. To facilitate all locally payable expenses on account of a bank for the

reason that such payments are not executed through cheques. 2. For the sake of inland and foreign remittances in cases where he beneficiaries do not maintain account with bank. 3. For all local payments under instructions of the customers for sundry club bills, rent and taxes etc. The following contains stepwise procedural prescription pertaining to the issuance and payment of payment order.

Issuance:
1. For the issuance of payorders, and application will be tendered on banks

standard form by the purchaser giving his name and address thereof. In case of request from the customer of the bank for the issuance of the Payorder, a letter in this request, will be obtained giving full particulars of the payee authorizing the bank to debit the account. 2. The cost of the Payorder alongwith an amount of Rs.5/- commission plus excise duty will be paid on the customer. 3. In case of letter of authority, the total amount i.e. Payorder amount, commission, excise duty and postage, if any, will be debited to the customers account as per bank instructions and contra credit will be passed to Bills Payable _ Payorder Account, commission, excise duty and postage account. 4. The Manager/Second Officer shall sign the application for the issuance of Payorder, as the case may be if it is to be issued on bank account.

5. The particulars of the Payorder shall be inserted on the blank Payorder

leaf either through a typing machine or shall be neatly hand written using indelible ink. The account shall also be rounded off through a protectograph machine or by hand on top of the instrument. 6. Subsequently, the particulars of each Payorder shall be recorded in Payorder issued register. 7. The Payorder shall be signed by two authorized officers of the bank simultaneously authenticating entry in Payorder issued register and after verifying the following:

Name, code & address of the issuing branch. Name of the Payee. Amount in words & figures. Date of issue.

The amount is rounded off on top of the instrument either through protectograph machine or neatly by handwriting.
8. A stamp containing the following stipulation shall be affixed on the back

of each Payorder at the time of issue: Received payment from Askari Commercial Bank as over leaf on account of _____________ Date____________
9. The Payorder, then, shall be delivered to the purchaser or to the

department concerned.

Payment:
1. The payee shall be duly identified by bank customer or by

Manager/Second Officer in case the Payorder is presented for cash payment on the counter and it will be ensured that the payment that the Payorder is properly receipted on its reverse on appropriate value or revenue stamps. 2. The Payorder will then be entered in payment orders issued register after making the date of payment against the date of issue in the contra columns under authentication. 3. The Payorder will then be passed for payment as per bank instruction.

4. The procedure as given above will be adopted in case of all payorders

received for payment, except that usual precautions shall be observed to ensure that the bank stands discharged from the payment in due course.

5. Payorder: -

Concept: It is a cheque drawn by a bank on itself. Pay order is an instrument in which the parties are involved. The purchase, the bank and the receiver. It can he purchased by any customer. It is usually made by govt. Bodies. A single bank is included in this case. Issuance:

The standard form is given to the customer; he fills in the detail and signs it. The concerned staff checks -The form. Charges as per effective schedule are applied. The cash of the pay order is received. A cost memo is signed, stamped and handed over to the applicant as a receipt. Then the pay order receipt is filled accordingly. Counter foil is also filled. An entry is made in the pay order issued register. Then the authorized office after checking the pay order signs it. The pay order is then handed over to the application after obtaining his signature on the P.O form.

A voucher is also made and posted at the computer Cr bills payable account P.O issued. Payment:

On representation of the Payorder receipt two authorized officers of the branch sign the receipt. The P.O entry is made in the P.O issued register.

Then the amount is credited to the account of the customer or paid in cash. The P.O is posted at the computer.

Dr - bills payable A/C P.O issued. PAYSLIP Payslip is an instrument that is issued by the bank for its own payments. So in this case only the bank is involved. Payslips are issued for the payment of different bills of the bank, so these bills are transferred payments. In the case of Payslip the excise duty is not deducted as it is in the case of payorder. The procedure for issuing the Payslip is as follows:

Firstly the credit voucher is sent from the accounts dept to the remittances department. The stationary for Payslips is taken out that is only for the use of the bank. Then it is entered manually in the register of Payslip. After filling the Payslip it is signed by the authorized officer. At the time of issuance the vouchers are made and the Bills payable Payslip is credited. The Payslip is then handed over to the customer. Payslip is just like a cheque and the bank is liable to pay against the Payslip. After that when the Payslip is received by the Bank it is again transferred in the register. Then the payment is made, and it is posted in their computers also. At the time of payment the bills payable Payslip is debited and the Account of the customer is credited.

OBC

Outward Bills for Collection: -

Bank received different cheques in clearing. Some of them are of the same bank but some of them are of other branches of the same bank, which are having their offices in other cities. In that case the cheques are sent to them for clearing it is called Outward Bills for Collection. The procedure for preparing and delivering the OBC is as follows:

Firstly when the bank received different cheques in the clearing than the cheques of other cities are separated. On these cheques three stamps are necessary those are, crossing, endorsement, and OBC stamp. Then they are entered in the OBC register and OBC numbers are given to them. The bank is having its own OBC schedules. These schedules are filled and the cheque is attached with these schedules and the copy is kept in record of the bank and the original is mailed to the respective branch. Two authorized officers sign the schedules. After clearance the respective branch send back the OBC along with the IBCA (Inter branch Credit Advice) The OBC no are checked for the OBC register. After that the following entry is made.

Dr Party A/C. Cr Commission Charges. Cr postage charges.

At the end of the day. The contra vouchers are.

[Cr OBC lodged] [Dr OBC collection] [Dr OBC collection]

[Cr OBC lodged.]

IBC Inward Bills for Collection: The bills are received from other banks out of city for the local clearing is called inward bill for collection. The procedure for the IBC is as follows:

The OBC of the other branches will be the IBCs of the receiving branch. So an OBC forwarding schedule is received by mail. The cheques are entered in the IBC register. The IBC numbers are allotted to them. The cheques are lodged for clearing. After realization, an IBCA is prepared and mailed to the branch from where the cheque was received. At the end of the day two contra vouchers are made and posted.

Cr Dr

IBC logged IBC collection.

Dr. Cr.

IBC Collection. IBC lodged.

ACCOUNTS DEPARTMENT The Accounts Department checks the entire working of all the departments of the bank. Salary payment is also a job of this department.

Daily Bank position Statement: The job of the Accounts Department is to check the daily banks position. What actually happens is that at the end of day all the working of the day is posted in the computers. The next day its printouts are taken and they are given to the Accounts Department. Any abnormality if occurs, is immediately dealt with. All the vouchers and instruction are checked individually against the computer printouts. After checking they are signed by Mr. Abdullah and the counter signed by Mr. Zubair Sheikh manager operations. There are different heads according to which the vouchers are attached those are as follows:

Saving Accounts FCY Head Office Current Deposits Sundry Deposits Others

After preparing the statement, the officer signs it and then the Operation Manager also sign it. Accounts department deals and checks the entire working of the Branch, all the vouchers that have been posted at the computer are scrutinized in accounts department. The End of Day i.e. computer print is also received from the computer. The next day the activity is separated some statements from the End of Day. The vouchers are sorted out head wise. The vouchers are matched with the entries in the statements.

Payment of Salaries: Payment of salaries is also a function of the accounts department. Head Office provides the salary schedules to each branch. According to the schedule the salaries are given and the salary statements are prepared.

It is a tradition of Askari Commercial Bank that the pay is dispatched on the 26th of each month all over Pakistan. The maintenance & record keeping of Allowances is done in the Accounts Department.

CREDIT CARD DEPARTMENT

What is credit card? Credit card is basically a piece of plastic, which is an alternative of cash. Now every bank is introducing their own credit cards. Credit card is best way to pay. If you have credit card than you dont need to keep cash in your pocket because it is best substitute of money. Credit card is also unsecured card. It allows purchase of goods and services. A person who has credit card can also withdraw cash on it. It offers security Vs Cash. Askeri Commercial Bank is also offering Master credit card to their customers. Askeri Bank Master card was launched in Multan in December 1997 with a strong advertising comparing on a very large scale. Master is the most widely accepted credit card worldwide. The customer need only, pay a percentage of their outstanding balance each month. It can be used in travel agencies, airlines, hotels, retail establishments, hospitals, supermarkets, service industries and other outlets. FEATURES OF ACBL MASTER CARD Important features of Askeri Bank Master Card are:

All billing of Askeri bank master card will be in Pak rupee whether customer spend in dollars or in any other currency. Askeri bank master card holder need only to pay a percentage of his outstanding balance every month. Or any part of the balance or pay in full and incur no further charges.

Askeri Bank provides personalized customer services to their master card holders. That help customers where ever and whenever he need it. By master card customer can get supplementary cards at a special price for his spouse, parents, children brothers/sisters over 18 years of age. For customers convenience, bank gives them their account statement every month. If customer card is ever lost or stolen, bank will replace it.

DIFFERENT TYPES OF CARDS AND THEIR TARGET MARKETS There are three types of cards offered by Master Cards.
o o o

Local Card/Silver Card International Card Gold Card

TARGET MARKET OF LOCAL CARD

o o o

Middle-middle and lower-middle class Usage: shopping, eating out and domestic traveling Target market: lower-middle management, small/middle businesses and housewives.

TARGET MARKET OF INTERNATIONAL CARD

o o o

Upper-middle and lower-upper class Usage: expensive restaurants and travel abroad Target market: middle and upper management

TARGET MARKET OF GOLD CARD

o o

Middle-upper and upper-upper class Target market: top executives and businessmen

SILVER CARD Important features of Silver Card are;

A Master Silver Card has a credit limit of Rs 15000 to Rs. 150,000. A person who is applying for silver card and he is on job than his minimum pay must be equal to or more than Rs.15000. If a person who is doing his own business and he is applying for silver card than his earning must be equal to or more than Rs. 25000.

GOLD CARD Important features of Gold Card are;

Gold card has a credit limit of Rs. 350,000. Minimum income to quality for a Askeri bank Gold Card is Rs.50,000

month for those people who are at job.

For those people who are doing their own business, minimum income required to quality for Gold Card is Rs. 75,00

BASIC CARD The basic card (it can be silver or gold) is given to a card member who is at least 21 years of age and fills the Askeri bank application form. Their credit account is based on their credit information. Statements are sent to them and they are responsible for all charges of the account. For Silver Card annual fee is Rs.2000 and joining fee is Rs. 500 and for Gold Card annual fee in Rs.4000 and joining fee is Rs. 1000.

ADVANCES DEPARTMENT
Lending or financing is one of the basic functions of banks of all categories, through which they maneuver major part of their profitability. So this department deals with the preparation of proposals of advances, and then submitting them to Head Office for approval and sanction of limit to the worthy Customers, according to existing policy of Head Office in respect of mode of Financing. PROPOSAL FOR ADVANCES The following important points are taken into consideration while evaluating, processing and submitting proposals for advances to Head Office: 1. Banker - Customer Relation Ship 2. Purpose of Financing 3. Mode of Financing (a) Fund Based 4.
5.

6. 7. 8.

(b) Non-Fund Based What are the conduct and behavior in connection with operation in the Account Bankers own assessment and analysis with regard to credit report of the customer as well as other Bankers report about the said customer Security offered for the applied facility Rate of Mark-Up / Interest Percentage of Margin over the value of Security / Securities

9. Period of Financing

(a) Temporary Accommodation/ Short term (b) Permanent Basis (Medium or long term) 10.Documentation and completion of formalities by the borrower. 11. Completion and submission of proposal and details of collateral securities offered by the customer. Bank - Customer Relationship The bank and customer relationship as debtor and creditor starts with, on taking deposits or lending of money; on accepting deposit from the customers Bank becomes Debtor and when bank gives finance to the customer Bank is called Creditor or lender and customer becomes Debtor. As far as lending of money by way of advance is concerned the bank looks into many aspects where the relationship has the prime importance in connection with;

Dealing Duration of Account Quantum of remunerative business Market Reputation Means Securities.

The letter 3C has been said to be a basic yard stick to know about a customer who intends to borrow money from bank. The (3Cs) concept is defined as follows from Bankers point of view:
1. Character & Commitment --- Clean & clear track record of customer. 2. Capacity --- Holding capacity 3. Capital --- Investment in trade and business injected from own

resources/ fund. The securities which bank may take to secure the money advanced or to be advanced are generally known as: (a) Prime/ Principal Security: That is the main security say as stock in trade.

b. Collateral Securities: The securities in addition to Prime/ Principal

security offered by the intending borrower.

The Purpose of Financing

The borrower must disclose factual purpose for seeking financial accommodation from bank without such, the proposal should not be given due consideration. The possible purposes may be as follows:
1. Export Financing/ Packing Credit. 2. Import Trade Financing. 3. Working Capital need for trade and industry. 4. Fixed investment for industry (Project Financing). 5. Purchase of Industrial or commercial vehicles. 6. Construction of residential, Industrial & agricultural building. 7. Finance for movement of goods/ crops with in the country. 8. Purchase of Agricultural machinery. 9. Development of Agricultural land. 10. Purchase of consumer durable items etc. 11. Bridge financing at the stage of Trial production to commercial

production. Note: Theses Purposes of Finance does not fall under the policies of the Askeri Commercial Bank Limited. MODES OF FINANCING The modes of financing applicable in ACBL may be as under; FUND- BASED (i) Running Finance Popularly known as overdraft or cash credit created in current account adjustment from time to time finally on expiry date. This facility is allowed against hypothecated goods in trade. Periodical statement of hypothecation of goods to be obtained & physical checking on fortnight or monthly basis must be exercised.

(ii) Demand Finance Also known as demand loan to be created in Bankers book but disbursement of fund is credited in the borrowers Current account/ saving account, repayment is fixed on installment basis. (iii) Cash Finance It is a sort of loan in which the client is given cash in Lump sum, and total amount is credited in borrowers current account, adjustment is linked, with the delivery of goods kept under banks pledge, generally cash finance is allowed for locally produced raw material, normally Cotton, adjustment is connected with the value of goods released for delivery. The bank charges the markup at the rate advised by the State Bank of Pakistan. (iv) Finance against Imported Merchandise It is also called commercial loan inward the facility is allowed against imported items under L/C and goods are kept in bankers custody in godown in Banks lock. The Finance is created in Banks book and fund is placed in borrowers current account It is allowed for 3-months & 6- months, clearance of goods from custom to be arranged through bankers own approved clearing agent who takes full care of bankers interest. NON- FUND BASED a) Guarantees: Tender Guarantee Performance Guarantee Mobilization Guarantee Shipping Guarantee Operation Nature of The Account The conduct and behavior of account must be looked into while processing proposal of advances and the following points are given priority for analysis and assessment of the in-tending borrowers. Credit and Debit turnover during the period under review. Average Credit Balance. Minimum Credit Balance.

Maximum Credit Balance with Nos. of days is retained. Number of instances the deposited cheques returned unpaid. Number of instances the issued cheque returned unpaid through clearing or at cash counter. Frequency of visits of the customer in the branch. Behavior of the customer during conversation with official of the branch Introducer opinion should be obtained confidentially. Independent Banks own credit report should be framed on the standardized performance signed by the branch Manager. Other bankers report if dealings have been with other bank should preferably by taken. Banks Non-Credit Report and other Banks Report A fair estimate of a customers family background and resources must be exhaustive, accurate and up to date while compiling the report and due care must be exercised by the Manager of the Branch while he intends to consider any accommodation to a customer. The assessment of the financial status of a customer and its credit worthiness must be comprehensive, informative and purposeful with latest information either based on own revilement or collected from other sources including other Bankers information to have been sought confidentially. FORMAT FOR COMPILING CREDIT REPORTS Sources consulted in market Date of compilation of report Nature of the Firm and date of establishment or date of incorporation in case of limited concerns. Investment of capital in the business or authorized and paid up capital in case of limited concerns. Name of Proprietor/Partners of Directors in case of limited concern with brief history. Nature of Business Name of allied or subsidiary concern if any give name of persons involved in the firm:__________________ Obtain copy of balance sheet or trial balance up to date mention financial year to which period it relates. Do they pay Income Tax also mention assessment year Bank Account and the experience of the bank with the borrower. Other Bankers report and opinion Market reputation:

Means Securities Personal guarantee of 3rd party or from Director of limited company in personal cash. Mortgage of property: Trust receipts Pledge of documents representing financial obligations. Pledge of document of title to goods. Rate Of Mark-Up The rate of mark up must be clear to the borrower and he must agree on that rate of mark up. There is a specified formula to calculate this mark up and they are having fully computerized system for doing it.

Period Of Finance It may be for a day, a week, a month, even for two months, 3 months, 6 month and for a maximum period of 1 Year. If the facility of advance is allowed upto 3 months then it will be considered as Temporary Accommodation and if it exceeds to, 6 months to 1 year, then it will be a Permanent Limit. Submission of Proposal of Advances Facilities whether Fund Based or Non-Fund Based While submitting the proposal, the facilities required by the customer must be incorporated explicitly on the form. It is absolute responsibility of the Managers to check that full and complete information that have been given in the form and he must keep in view the policy of the bank as advised by head office from time to time and should look into this aspect about the proposed facilities in conformity with instructions of Head office.

Foreign Exchange
Introduction to Foreign Exchange For hundred of years, it was customary for Export goods to be transported on Board Ship, belonging to large Trading Companies, overseas, it was the job of the representatives of these firms to sell the merchandise and to see the merchandise and to purchase, with the proceeds obtained, the required goods for Import. Once the ship returned home, the imported merchandise was sold directly to buyers, thus making documentary credits and Bank guarantees unnecessary with regard to securing payment. At the middle of the 19th Century, most of the Government & Government licensed trading monopolies began to disappear, and the worlds markets opened their doors to an over-widening group of businessman, manufacturers and dealers. Buyers and sellers started doing business at a distance, so to speak. However, as the conclusion of contracts, the shipment of goods and making of payments began to involve such large time and geographical differences, exporter were compelled to seek ways to secure payment from importers. In addition, the need developed to make liquid capital invested in merchandise during the often-long periods required for transport. Moreover, buyers became reluctant to purchase goods sight unseen or to pay in advance without any guarantee that the merchandise would actually be delivered. The Documentary Credit or L/C and Bank Guarantee fulfill to great extent the requirements of both buyer and seller with regard to covering the risk entailed. They ensure the seller that price agreed upon would be received upon compliance with the terms of the contracts and the buyer that payment must be made only when the goods ordered or services contracted are delivered or confirmed.

Foreign Exchange Department Foreign Exchange department works like the general banking department with the difference that it deals in foreign currency. This department deals with the following: Foreign Currency Account Foreign Remittances Foreign Bills For Collection Imports Exports Rules & Regulations According to the rules and regulations of the government every body can open the foreign currency account. And there is no restriction for opening the account in the foreign currency. 1. FOREIGN CURRENCY ACCOUNTS As earlier discussed in the general banking department of the report, the same accounts can be opened in the foreign currency department. FOREIGN REMITTANCES The same procedure is followed in this regard as discussed in the remittance department of the report. Funds can be transfered abroad by Drafts and Telegraphic Transfer. For transferring money, client has to give solid reason for sending money abroad. Every transaction of remittance must be reported to the STATE BANK OF PAKISTAN. And without the prior approval of the STATE BANK OF PAKISTAN no transaction can be made. For this purpose ACBL has contacts with foreign branches of different banks of different countries. 4. FOREIGN BILLS FOR COLLECTION When the customers deposit the cheques or drafts for collection, drawn on foreign banks, then they are sent to those respective countries. ACBL credits the customer's account with amount of the cheque or draft after the realization of these bills, and the credit advice is also sent to the customer.

Currency Rate: ACBL receives Pak Repees rate against Foreign Currency from State Bank every day. These rates are required for exchange dealing. Imports The Import Trade in Pakistan in governed by the Imports and Export (Control) Act of 1950. The Import control covers Pracitically all articles, issued under import Policy under issued by the Ministry of Commerce every year which covers the period from July to June. For imports al all the items in accordance with import Policy, the import licence or import permits were used to be issued by the Controller of Import & Export, now its function has been shifted to Export Promotion Bureau (EPB) . Presently all registered importers can approach to Bank for opening L/C without import Licence which is no longer in vogue under present Government Policy and procedure, even the requisite licence fee is realized at the time of clearance of goods while submitting bill of entry through clearing agent. Every registered importer holds category pass book. Where in items and amounts are recorded and imports are arranged through foreign exchange granted direct by the Government of Pakistan. It will be called a permit if the importer utilizes his own Foreign Exchange resources abroad. LETTER OF CREDIT (L/C)/ DOCUMENTARY CREDIT In simple terms, a letter of credit (documentary credit) is a conditional bank undertaking of payment. Expressed more fully, it is a written undertaking by a bank (issuing bank) given to the seller (beneficiary) at the request and in accordance with the instructions, of the buyer (applicant) to effect payment (that is by making a payment, or by accepting or negotiating bills of exchange) up to a stated sum of money, within a prescribed time limit and against stipulated documents. These stipulated documents are likely to include those required for commercial, official, insurance or transport purposes, such as commercial invoice, certificate of origin , insurance policy or certificate, and bill of lading or combined transport document.

A letter of credit can also be defined as under: A letter of credit is written instrument issued by a bank on account of its customer who is the buyer, authorizing the seller to draw on the buyer draft up to a specified amount, in accordance with terms and conditions stated in the credit. It is an undertaking in legal form whereby all the drafts drawn by the seller, in accordance with the terms of the credit, will be honored by the issuing bank. Documentary credits offer both parties to a transaction a degree of security combined with a possibility, or a creditworthy party of securing financial assistance more easily. Documentary Credits therefore: are an arrangement by banks for settling international commercial transactions. Provide a form of security for the parties involved. Insure payment provided that terms and conditions of the credit have been fulfilled. Mean that payment by such means is based on documents only, and not on merchandise or services involved. Important elements of a letter of Credit The important elements, usually stipulated in a Letter of Credit are briefly described hereunder:Opener The opener of a letter of credit is the importer/buyer of goods on whose behalf a letter of credit is established. Beneficiary The beneficiary of a letter of credit is the exporter/Seller in whose favor the letter of credit is being established. Opening Bank

The bank which issues a letter of credit on behalf of the Importer (Buyer) in favor of the Exporter (seller) either directly or through a Bank in the country of Exporter (Seller) with home it may have agency arrangements. Amount The maximum amount which can be drawn by the beneficiary, under a letter of credit. The amount is expressed in the currency in which settlement is desired. Documents Required Under a Letter of Credit a) Draft: In legal terms a draft is defined as under: An instrument in writing issued by the maker (drawer) instructing the second party (Drawee) mentioned therein to make payment of specified amount on demand at sight/or at any future date, to a third party (payee) or to his order. A draft under a letter of credit is issued by the beneficiary instructing the opener/opening bank to make payment. Specified therein to their banker or to their order, on demand/at sight or at a future date.

b) Commercial Invoices: The statement made by the beneficiary in the name of the opener of the letter of credit, giving full description, quantity value per unit, total cost and charges of the goods shipped. c) Bill of Lading: The ship master on behalf of shipping company issues a document evidencing the receipt of goods and an undertaking to deliver the same to a party or to his order at a certain destination. This document is called a Bill of lading d) Date of Shipment: It is the date specified in the letter of credit up to which the goods must be shipped by the beneficiary. e) Means of Shipment: This indicates how the goods are to be shipped i.e., by Land, by Sea, or by Air.

Description of Goods A brief description of the merchandise such as quantity, quality & unit price is mentioned in the letter of Credit. These details are based in the contract of sale whose reference is give in the letter of credit and as such are mentioned in L/C in a concise form. Partial Shipment/ Trans Shipment Partial shipment means that the goods may be shipped in different lot and at different times. Trans-shipment means that goods may be transferred from one carrier to another in case the first carrier is not touching directly the part of destination. Date of Negotiation/ Validity/ Expiry It is the date by which the exporter should submit the documents to the negotiating bank. The Advising Bank It is the Correspondent/ Branch of the issuing bank in beneficiarys country who advises the letter of credit to the beneficiary. It is necessary only if the issuing bank has not direct agency arrangements with the beneficiary bank. Negotiation It is the process by which negotiating bank/branch makes the payment to the beneficiary against documents. These documents must confirm in all respects to the terms and conditions of the letter of credit. Reimbursement The negotiating bank makes payment to the beneficiary and claim this amount from the opening bank either by debiting the opening banks account with them or that correspondent advised by the opening bank which is called reimbursing bank. The negotiating bank would simultaneously send the full set of negotiated documents to the opening bank and/ or to the reimbursing bank as required in the letter of credit. (These funds re subsequently claimed by the opening bank from the buyer)

Confirmation When the opening bank is not well known to the seller in the International Market, the seller may request the letter of credit may be confirmed by the advising bank or by either first class bank in country. This actually means the advising bank will add its name to the credit, thus guaranteeing that the drawings under the letter of credit will be duly honored by them. For such confirmation the confirming bank makes charges to the issuing bank who may subsequently recover this from the buyer. Shipping Mark It is the mark and number given on the packages to facilitate identification at the port of destination.

Application For Opening of Letter of Credit

A customer desires of opening a Letter of Credit shall be provided with prescribed application form. The customer who wishes to establish Letter of Credit should have a current account with the branch Besides this the customer must have the registration from EPB (Export Promotion Bureau) and membership with Chambers of Commerce & Industry. He should also present import license if required for the import of some commodity. He should also submit his category pass in the bank. The customer should preferably have a credit line for opening of letter of credit.

The most important thing is to decide margin between the bank and the customer. Normally 30% of the amount is received from the customer as margin of the L/C and other charges are to be deducted by the bank of the opening of L/C. However, an L/C can be opened on nil margin if the officer/manager considers that customer has always sufficient credit in his account to cover the amount of L/C.

The customer has sufficient funds/arrangement with the bank to cover the required margin and other bank charges. Whether the L/C application is properly stamped wherever stamp duty is levied under the law of country. No clause of the L/C violates of the local Government Regulations. The details provided in the L/C application forms are normally sufficient. In case, further details are required or any term need further clarification, the same should be obtained from the customer. The particulars of the credit are in accordance with the contract/proforma Invoice/Indent (This shall also be provide alone with L/C application form). Signature of the customer appear on both sides of L/C application form and are in accordance with the signature on our record. The name and address of the beneficiary mentioned on the L/C application should be full and complete. The exact amount is to be mentioned in the amount column against the currency for which L/C is to be established. Whether the draft is to be drawn at sight or at issuance should be clearly marked. In case of letters of credit where in the draft has been requested on D.A. basis (Documents against Acceptance Basis), it is to be ensured that such facility has been specifically allowed, as in such cases the bank shall be liable to deliver the documents against the acceptance of the draft without payment. The party will make

payment after days written in the L/C. Before issuing the L/C on D/A Basis the bank keeps some property as guarantee by the importer. The cost of goods written in L/C should not be more than the prevailing market prices. Generally the shipping documents required are listed in the L/C application, such as Draft, invoices, bill of Lading, Insurance Cover Note/Policy, Certificate of Origin and Packing list etc. In case the customer requires other documents he should mention them specifically. The date of negotiation must not be prior to the date of shipment.. In countries where imports are under imports Licenses, the shipment should be with in the period of shipment specified in the licenses. There should be reasonable period between the date of negotiation. (Generally a period of 15 days is kept for this purpose to enable exporter to prepare and negotiate the documents) opened on his behalf. .
The L/C Application should then forwarded to the Manager or any other officer authorized for this purpose for his final approval. He should examine the application form and after being satisfied with it he should approve it by putting his initials on the back of the application form, the cases beyond the discretionary powers of the Branch Manager should be referred to the Regional office. Commission and Other Charges Bank charges commission from their customers for opening Letters of Credit on his behalf. Beside the commission bank also charges customer for postage, cable and other charges incurred by him for opening of a letter of Credit.

Import documents under letter of credit On presentation of the documents by the Exporter, the Negotiating Bank negotiates i.e. pays value to the exporter immediately, at the same time claiming reimbursement on the bank designated by the Opening Bank and sending the documents to the Opening Bank. These documents are called Import Documents by Opening Bank. These documents in the bank are initially lodged, creating a short term advance called payment Against Documents Account (PAD) and the Performa account of the foreign correspondent concerned through whom reimbursement has been provided. These documents are provided to the customer either through cash or by some other manners. These documents normally include the following: Bill of Exchange (Drafts) Invoices. Bills of Lading/Consignment Note. Certificate of Origin Packing List/Weight List. Copy of the Insurance Declaration Any other document(s) specified in L/C. Exports Dispatch of goods from a country to another country by land, sea or air, by way of sale against value is termed as Export seller is called Exporter and the buyer is called Importer Letter of Credit (Exports) In banking terms when we receive a letter of Credit from a foreign correspondent for advising it to a beneficiary, it is called Export Credit. Kinds of Export Letter of Credits Usually an exporter ships goods against letter of credit received in favor to ensure that he receivees payment for the goods. Receipt & Precessing of Export L/C

The foreign Exchange Officer will receive all advices for the Export Leetters of Credit through mail. The foreign Exchange Officer will verify the signature of the authorized officers of the opening bank on the export letter of Credit. For this purpose he will refer to the authorized specimen signature book of the corresponding banks. However Foreign Correspondent bank may communicate credit through cable under their test Numbers. In such cases the Foreign Exchange Officer should refer the messages to the officers of the branch holding Test keys. These officers will verify the Test Numbers under their signatures. In case the test number does not agrees the Foreign Exchange Officer should Telex back the correspondent bank cencerned, asking for the correct test number under their signatures. Meanwhile such messages are kept pending. While examing the export credits or cable Advice, the Forign Exchange Officer will determine the following: Wheter the credit is addressed to bank or to a beneficiary. wheter the credit is to the confirmed or not, Unless specifically required by the correspondent bank, confirmation shall not be added to an Export Credit. whether the exporter has received a pre-shipment finance under this letter of credit. Confirming An Export Credit In cases the correspondent bank is not very well known, the beneficiary may rquest advising bank to add its confirmation to the credit. In such cases: It will be seeen that request for confirmation comes from the opening bank. Approval will be obtained from Regional office. Regional offices will convey its approval after satisfying itself that the credit line allowed to the correspondent bank for this purpose is not exceeeded. Confirmation clause will then be incorporated in forwarding letter addressed to the beneficiary. Commission for adding confirmation will be deducted as per schedule of Bank.

General Charges For Export Letter Of Credit Are Given As Under:

There are charges for export letter if credit which are as follows Processing Charges for export Registration: Letter of Credit Advising Amendment Negotiation of Rupees Bills under Export L/Cs. Confirmation Transfer of Export L/Cs. 3.If the document are sent to other bank for negotiation under restricted L/C.

SUGGESTIONS
It is highly necessary to promote the bank through aggressive advertising campaigns, in order to capture considerable share in the Banking sector. The bank should offer more & more new services like more new systems of online Computer Network of the branches to make the remittances function most efficient, Telephone Banking, and 24 Hrs. Banking Services etc.

The bank should provide advances on easier conditions to attract more & more customers, also sanctioning process should be made more efficient, and some authority should be given to the branch manager to sanction loans within certain limits. The authorities of bank should, take necessary actions to raise the salaries of their employees, give some bounces & other privileges to them for motivating them to increase their efficiency. Another thing is that the employee satisfaction is one of the most important things and here in Multan Branch there is no such department, which can deal with this problem. They need a marketing department in their branch particularly for the services the bank is providing here in Multan and for which the people are not having exposure.