Habib Bank Limited

Internship Report

HABIB BANK LIMITEDINTERNSHIP REPORT

Submitted to Mr. Farooq DurraniSubmitted by

Mehreen GilaniMBC-09-23

MBA

INSTITUTE OF MANAGEMENT

SCIENCES,BAHAUDDIN ZAKARIYA UNIVERSITY

MULTAN.

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ACKNOWLEDGEMENT

No one can say that I am perfect, everyone should admit that without the helpof ALLAH and His people a man can’t get anything so I bow my head before almightyAllah with gratitude. I am also very much thankful and presents salute to manyindividuals who have helped me in shaping this report .I am also very much thankfulto lot of former fellows and contemporary colleagues who took the time and troubleduring the last few days to speak to me about the way this text could be furtherimproved.I am also very thankful to the staff Habib Bank Ltd. NMC branchespecially to Mr. Hasnat A. Qazi (Branch Manager) who provided me anopportunity to work in friendly environment.It was an honor and pleasure to work with:Miss. Amna (Operation Manager HBL NMC branch)Mr. Rehan (Asst. Operations Head)Madam Naureen (Public Relation Officer)Mr. Nafees Qureshi (Manager Credit Department)Miss. Nadia (Manager Credit Department)Mr. Abrar (Manager Credit DepartmentMiss. Nadia Naureen (Head Remittance Department)Mr. Jawad Khan (ex. Employee of HBL as Trade Manager)Mr. Ashiq ( I.T expert)

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Table of Contents

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Executive SummaryReport starts with the topic evolution of banking. The word'Bank' is said to have been derived from the words Bancus or Banque or Bank. Thishistory of banking is traced to as early as 2000 B.C. Talking about commercialbanking in Pakistan It was very difficult for Pakistan to build up its own Bankingsystem immediately after independence without sufficient resources. By 30th June1948 the number of schedule banks in Pakistan declined from mere scratch. Todaythere are more than 7000 branches of commercial banks along with an establishednetwork of supplementary financial institutions. All this development in the bankingsector is the result of untiring efforts of six decades. HBL was the first commercialbank to be established in Pakistan in 1947. Over the years, HBL has grown itsbranch network and become the largest private sector bank with over 1,450branches across the country and a customer base exceeding five millionrelationships.On December 29, 2003 Pakistan's Privatization Commission announced thatthe Government of Pakistan had formally granted the Aga Khan Fund for Economic

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Development (AKFED) rights to 51% of the shareholding in HBL, against aninvestment of PKR 22.409 billion (USD 389 million). This report contains informationabout HBL’s board of directors, management, mission, vision and values. HBL’soperations are discussed in light of its working department in the branches like cash,clearing, foreign exchange and accounts department and also in light of its servicesand products which it is offering to customers’ weather they are individual, business,corporate or agriculture field related customers. HBL is currently offering phonebanking, internet banking and various cash management services for the facilitationof its customers. HBL’s car to car loan has its own uniqueness in Pakistan’s bankingsector. HBL’s branch network is extended all over the Pakistan which has itscompetitive edge over all other private sector banks in Pakistan.During the time of my internship in Habib Bank NMC branch MultanI got the chance to work in all the departments of HBL working there. Duties andlearning in each department is given in this report. Talking about financialperformance of the bank in 2010 all the financial indicators are showing positiveresults. During this year HBL also won some awards. At the endof this report I have given my suggestion for the improvement of the bank.

Evolution of BankingThe word 'Bank' is said to have been derived from the words Bancus or

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Banque or Bank. This history of banking is traced to as early as 2000 B.C. Thepriests in Greece used to keep money and valuables of the people in temples. Thesepriests thus acted as financial agents. The origin of banking is also traced to earlygoldsmiths. They used to keep strong safes for storing the money and valuables ofthe people. The persons who had surplus money found it safe and convenient ofdeposit their valuables with them. The first stage in the development of modernbanking, thus, was the accepting of deposits of cash from those persons who hadsurplus money with them.The goldsmiths used to issue receipts for the money deposited with them.These receipts began to pass from hand to hand in settlement of transactionsbecause people had confidence in the integrity and solvency of goldsmiths. When itwas found that these receipts were fully accepted in payment of debts; then thereceipts were drawn in such a way that it entitled any holder to claim the specifiedamount of money from goldsmiths. A depositor who is to make the payments maynow get the money in cash from goldsmiths or pay over the receipt to the creditor.These receipts were the earlier bank notes. The second stage in the development ofbanking thus was the issue of bank notes.The goldsmiths soon discovered that all the people who had deposited moneywith them do not come to withdraw their funds in cash. They found that only a fewpersons presented the receipts for encashment during a given period of time. Theyalso found that most of the money deposited with them was lying idle. At the sametime; they found that they were being constantly requested for loan on good security.They thought it profitable to lend at least some of the money deposited with them to

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the needy persons. This proved quite a profitable business for the_ goldsmiths. Theyinstead of charging safe keeping charges from the depositors began to give theminterest on the money deposited with them. This was the third stage in thedevelopment of banking.MaJOR EVENTS IN BANKING HISTORY

Florentine banking — The Medicis and Pittis among others.

Knights Templar - earliest Euro wide /Mideast banking 1100-1300.

Banknotes  — Introduction of paper money.

1602  - First joint-stock company, the Dutch East India Company founded.

1720  - The South Sea Bubble and John Law's Mississippi Scheme, which caused a European

financial crisis and forced many bankers out of business.

1781  - The Bank of North America was found by the Continental Congress.

1800  - Rothschild family founds Euro wide banking.

1930 -33 In the wake of the Wall Street Crash of 1929, 9,000 banks close, wiping out a third of the

money supply in the United States

1986  - The "Big Bang" (deregulation of London financial markets) served as a catalyst to reaffirm

London's position as a global centre of world banking.

2008  - Washington Mutual collapses. It was the largest bank failure in history.

TYPES OF BANKS

Central bank or State bank

Commercial banks

Exchange Banks

Industrial Banks

Agricultural Banks

Saving Banks

CENTRAL BANK OR STATE BANK:-

Every country has its central bank or state bank. Its major function is to carryout a countries

monetary policy with an aim to safeguard its Financial and economic stability It has the

monopoly of note issue. It is also the custodian of money market. State bank is the bank’s bank

and lender to the Govt.In Pakistan central bank named as State Bank of Pakistan (SEP).

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COMMERCIAL BANK:-

These are profit earning concerns. They received deposits and advanced loan to the borrowers.

They greatly help in financing for internal and external trade of the country.

EXCHANGE BANKS:-

The main function of the exchange bank is to finance the foreign trade by the purchase and sale

of foreign currencies in the form of drafts, bills of exchange, telegraphic transfers. They also

perform the function of the commercial banks, receiving deposits and advancing the loans.

INDUSTRIAL BANKS:-

Commercial banks cannot afford to block their funds in long term investments. The industrial

banks receive long term deposits and finance the industries by providing them long term credits.

In Pakistan the industrial bank named as Industrial development bank of Pakistan (I.D.B.P) was

established in 1961 for this purpose. Its ‘main purpose is to groom the Industrial sector in

Pakistan. Industrial Banks are also concerns with Chamber of Commerce. We can find out basic

information about type of industry, addresses, as well as contact Numbers of Industries from

“YELLOW PAGES”. Industrial Banks also help out the industries in Import and Export.

AGRICULTURAL BANKS

They provide short and long term loans for financing agricultural. The agriculturists need short

and long term loans for meeting their day to day and long term requirements for making

permanent improvement in loan. In Pakistan agricultural bank is named as Zrai Traqiyati Bank

Limited (Z.T.B.L) is financing to agriculture sector to improve the productivity.

SAVING BANKS:-

These are the institutions, which are sponsored by the Govt. for having the facilities to the

people and small means. These banks collect small saving of people and allow them to

withdraw in small amounts. Also another institution i.e. National savings is working in the same

capacity. For example HBL, ABL, MCB etc.

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COMMERCIAL BANKING INPAKISTAN

It was very difficult for Pakistan to build up its own Banking systemimmediately after independence without sufficient resources. Following theannouncement of the partition plan in June 1947 there was a haste movement on theparts of banks to transfer their funds and accounts across the borders. The bankshaving their registered offices in Pakistan were transferred to India. In an effort tobring about the collapse of the new state by the persecuting an international policy ofwithdrawal, the Indian bank offices closed quickly. Those banks, which stayed, wereconsidering the winding up of their business. By 30th June 1948 the number ofschedule banks in Pakistan declined from mere scratch.Today there are more than 7000 branches of commercial banks along with anestablished network of supplementary financial institutions. All this development inthe banking sector is the result of untiring efforts of four decades.

History of Banking In PakistanThe interesting point which I observed during the span of mine internship wasthe historical background of Banking & Financial sector which is the one in whichgreat improvement and growth is observed since the formation of Pakistan. Forstudying the growth of this sector we can divide it into three stages, which are asfollows:a) Pre-Nationalization Erab) Nationalization Erac) Post Nationalization Eraa) Pre Nationalization period:There were only two Muslim banks in Indo Pak before partition; they were.Habib Bank Ltd. (est. in 1941 at Bombay) & Australia Bank Ltd. (est. In 1944 atLahore). All other banks, at that time, were either owned by Hindus or Foreigners.

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At the time of partition there were 631 bank branches in area which cameunder Pakistani control. But due to blood shed and violence at large scale, mostlybranches were closed and the disparity can be assessed from the fact that on July1948 there were 195 branches with deposits of Rs.88 crore (880 million) only. Also afactor lagging in Pakistani industry was a central bank of its own, by that timeReserve Bank of India was acting as central bank for both countries and samecurrency notes were used in both territories. But Reserve Bank of India was biasedand Set down Pakistan on many occasions such as the issue of funds transfer etc.In this period drastic steps were taken in government sector for theimprovement of overall position. The private sector also responded to these changesand some very positive changes were observed. Some of the steps taken by thegovernment in this regard were as under:1) Inauguration of State Bank of Pakistan (SBP) on 1st July, 1948.2) Setting up of National Bank of Pakistan in November, 1949 to control the'jute' export in East Pakistan and to act as agent of SBP.3) Larger powers were given to SBP through SBP Act (1956) for controllingpurposes.4) Banking Companies Ordinance 1962 for protection and guidance to banks.5) Establishment of specialized banks, such as ADBP (1952);a) HBFC (Nov, 1952);b) P1CIC (Oct, 1957)c) IDBP (Aug. 1961);d) NDFC (Jan, 1973).These were the steps, which built a strong banking sector in Pakistan. This isalso obvious from the facts that by 1973 there were almost 10 foreign banks wereworking in Pakistan and all over deposit position was around Rs.2300 crore (23,000million). A bird eye view of 5 top banks was as given below:

B) NATIONALIZATION PERIOD

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On January 01, 1974 all Pakistani banks were nationalized throughNationalization Act 1974. Under this law all Pakistani banks became a publicproperty. All small banks were merged in bigger banks to create 5 major Pakistanibanks Pakistani banks. These banks were to control by Pakistan Banking Council.There are still controversies about this act of government as whether it contributed insuccess of failure of banks. However the major changes after nationalization were asInternship Report 8 Habib Bank Limited

follows: Working of banks was extended to under developed areas. Market expansion for credit and deposits. Decrease in service level of bank officers. Decrease in profitability as well.However the effect of expansion was enormous and it can also be depictedwith the help of table 2 which shows the deposit & branch positions of differentnationalized banks.

C) POST NATIONALIZATION ERAIn 1990 the government decided to denationalize all the nationalizedinstitutes. Some was also suggested in banking sector. For this purpose,amendments were made to Nationalization Act 1974 and two nationalized bankswere privatized. Along with this a permission to open banks in private sector wasalso granted. The rules regarding establishment of new banks and for incomingforeign banks were also relaxed.

PRIVATIZATIONThe- privatized banks are;a) MCB taken up by a private group in April, 1991b) ABL taken up by its own employees in September, 1991.c) UBL taken up by UAE party in 2002.d) December 29, 2003 HBL was taken by AKFEDAfter these changes a large number of private and foreign banks started theiroperations in Pakistan and the present status can be seen from the following figure:

Habib Bank Limited

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HBL was the first commercial bank to be established in Pakistan in 1947. Over theyears, HBL has grown its branch network and become the largest private sectorbank with over 1,450 branches across the country and a customer base exceedingfive million relationships. With a presence in 25 countries, subsidiaries in Hong Kongand the UK, affiliates in Nepal, Nigeria, Kenya and Kyrgyztan and representativeoffices in Iran and China, HBL is also the largest domestic multinational. The Bank isexpanding its presence in principal international markets including the UK, UAE,South and Central Asia, Africa and the Far East. Key areas of operations encompassproduct offerings and services in Retail Banking. HBL has the largest CorporateBanking portfolio in Pakistan with an active Investment Banking arm. SME andAgriculture lending programmes and banking services are offered in urban and ruralcenters. In the UK and GCC, HBL focuses on trade finance and remittances for theSouth Asian Diaspora in addition to basic banking facilities. HBL has always been abank and a brand for the masses, with a history that is inextricably linked with thehistory of Pakistan itself. As it continues to grow, both locally and abroad, it strives toembody its brand personality: honest, approachable, and inclusive. HBL is currentlyrated AA+ (Long term) and A1+ (Short term)*. It is the first Pakistani bank to raiseTier II Capital from external sources.

HISTORY AND BACKGROUNGHabib Bank Limited was established by Mr. Ismail Habib (Late) on August 25,1942 at Bombay. It was the first Muslim Bank of the sub-continent. It wasestablished with a paid up capital of Rs. 2.5 million. At an early stage, the number ofits branches was only 12.HBL established operations in Pakistan in 1947 and moved its head office to

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Karachi. Our first international branch was established in Colombo, Sri Lanka in1951 and Habib Bank Plaza was built in 1972 to commemorate the bank’s 25thAnniversary. With a domestic market share of over 40%, HBL was nationalized in1974 and it continued to dominate the commercial banking sector with a majormarket share in inward foreign remittances (55%) and loans to small industries,traders and farmers. International operations were expanded to include the USA,Singapore, Oman, Belgium, Seychelles and Maldives and the Netherlands.

Privatization of Habib bankOn December 29, 2003 Pakistan's Privatization Commission announced thatthe Government of Pakistan had formally granted the Aga Khan Fund for EconomicDevelopment (AKFED) rights to 51% of the shareholding in HBL, against aninvestment of PKR 22.409 billion (USD 389 million). On February 26, 2004,management control was handed over to AKFED. The Board of Directors wasreconstituted to have four AKFED nominees, including the Chairman and thePresident/CEO and three Government of Pakistan nominees.

HBL’s Vision,

Mission and Values

VisionEnabling people to advance with confidence and success.

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MissionTo make our Investor (s) prosper, our staff excel and to create value for our stakeholders.

ValuesOur values are the fundamental principles that define our culture and are brought tolife in our attitude and behaviors. It is these values that make us unique andunmistakable. Our values are defined below:

ExcellenceThis is at the core of everything we do. The markets in which we operate arebecoming increasingly competitive, giving our customers an abundance of choice.Only through being the very best – in terms of the service we offer, our products andpremises - can we hope to be successful and grow.

IntegrityWe are the leading bank in Pakistan and our success depends upon trust. Ourcustomers - and society in general – expect us to possess and steadfastly adhere tohigh moral principles and professional standards.

Customer FocusWe understand fully the needs of our customers and adapt our products andservices to meet these. We always strive to put the satisfaction of our customersfirst.

MeritocracyWe believe in giving opportunities and advantages to our employees on the basis oftheir ability. We believe in rewarding achievement and in providing first-class careeropportunities for all.

ProgressivenessWe believe in the advancement of society through the adoption of enlightenedworking practices, innovative new products and processes and a spirit of enterprise.

Board of Directors14

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NAME DESIGNATION

Sultan Ali Allana Ahmed Jawad Sajid Zahid Sikandar Mustafa khan

Chairmen Director Director Director

Mustafa Malik Moez Jamal R Zakir Mehmood

Director Director President & CEO

MANAGEMENTR. Zakir MahmoodPresident and CEO   

  

Salim AmlaniChief Internal Auditor   

  

Aly MustansirHead-Marketing &Brand Management  

  

Nousheen AhmedCompany Secretary & Head - Legal   

 

Sima KamilHead-Corporate &Investment Banking  

  

Faizan MithaGlobal Treasurer   

  

Abid SattarHead-Retail & ConsumerBanking  

  

Aslam GaditHead-Remedial Assets   

  

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 Dr. Razi AzmatHead-Human Resources   

  

Sohail MalikChief Risk Officer   

  

Ayaz AhmedChief Financial Officer &Chief Information Officer  

  

Mudassir H. KhanHead-Global Operations   

  

Shahid FakhruddinGeneral Manager-

International & MarketRisk Management

  

Aman Aziz SiddiquiRegional GeneralManager-Gulf  

  

Tulu IslamGM-Business ContinuityPlanning  

  

Nouman K. DarHead - International Banking   

  

Mubashar MaqboolHead-Commercial &Retail Lending  

  

Muhammad AslamHead-Islamic Banking

  

  

Mirza Saleem BaigHead-Learning &Development  

  

Abdur Rashid AwanBusiness Head-SemiUrban Areas  

  

Muhammad AliRegional ChiefRawalpindi-Islamabad& Corporate Banking Head -North 

Management HierarchyPRESIDENTBOARD OF DIRECTORMEMBER EXECUTIVE BOARDREGIONAL CHIEF

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ZONAL CHIEFBRANCH MANAGERS

DESIGNATIONSPresidentSenior Executive Vice President (SEVP)Senior Vice President (SVP)Vice President (VP)Assistant Vice President (AVP)Officers Grade 1Officer Grade IIOfficer Grade IIICashierClerksPeon

Corporate InformationHead OfficeHBL PlazaI. I. Chundrigar RoadKarachi-75650, Pakistan.Tel : +92 (21) 2418000 [50 lines]

Fax : +92 (21) 9217511

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Registered Office4th Floor, Habib Bank TowerJinnah AvenueIslamabad, Pakistan.

Tel: +92 (51) 2872203Fax: +92 (51) 2872205RegistrarsTHK Associates (Pvt.) Ltd.Ground Floor, State Life Bldg No. 3Dr. Ziauddin Ahmed RoadKarachi, Pakistan.Tel: +92 (21) 111-000-322WebsitesCorporate website:www.hbl.comTreasury website:www.hblgtr.com.pkEbank (internet banking):www.hblebank.comAuditorsKPMG Taseer Hadi & Co.Chartered Accountants

Domestic branches

Operations of HBLA. banking departments of

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habib bankVarious departments are working in all the branches of Habib bank to facilitate thecustomers. Following are the banking departments functioning in HBL NMCbranch Multan.1.Operations department

Account opening department. Cash department remmitence department Lockers department.

2.Credit department3.Trade department3.I.T department5.PRODUCTS AND SERVICES BYHBL

Accounts opening departmentBasic function of the accounts department is to open new account and facilitate thecustomer for the account opening purpose. There are certain formalities which are tobe observed for opening of an account with a Bank. These formalities in brief are asunder:NATURE OF ACCOUNTSCURRENT ACCOUNTSSAVING ACCOUNTS

Types of accounts:Individual accounts:

Individual accounts are the most common personal investment accounts. Opened bysingle person.rm Accounts

JOIN ACCOUNT:A joint account occurs when two or more than two customers have one account. Theparties to a joint account are considered in law as they are one person.Business accounts:Business accounts can be opened by institutions, companies, partnerships, trustsand non-profit organizations. they are always current accounts.Procedure

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FORMAL APPLICATION:The customer is to fill "Account Opening Form. It is a formal request by a customerto the bank to allow him to have and operate the account.Documents require for opening an INDIVIDUAL ACC account: Copy of CNIC Service certificate or student card. Utility bill Provisional receipt KYC (Know Your Customer)DOCUMENTS FOR JOINT ACCOUNT Copy of CNIC of both persons Service certificates or student cards of both applicants. Utility bill if resident of same place Provisional receipt KYC (Know Your Customer)DOCUMENTS FOR BUSINESS ACCOUNTphotocopy of CNIC/Passport of all directors/partnersletter of partnership or certified copy of partnership deedcopy of registration certificate issuede by registrar of firmstrue copy of the certificate of incorporation registrationtrue copy of the certificate of commencement of business(public ltd. Companies)true copy of memorandum and article of associationtrue copy of resolution from the board of directors regarding opening and operation of accountlist of directors with signatures dully attested by chairpersonform-29copy of NTN certificatecopy of SECP registration

SPECIMEN SIGNATURE:When the Banker is satisfied about the integrity of the customer, he agrees to openthe account. The Banker obtains the specimen signatures of the customer on thesignature book or on card.Posting the account on the system:After that officer has to post the new account on computer system for furtherprocessing. During the process customer id and account number is generated. Newaccount remains active for one day after that it is blocked by the head office untilCNIC of the customer is verified from NADRA.Cheque book issuing:

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After the CNIC verification account opening officer has to issue a cheque book tocustomer so that he can be able to make withdrawal from his account. Now a day inHabib bank cheque book issuing process is centralized that take 06 days tocomplete.SECRECY:The secrecy of depositor’s account is the responsibility of every official engaged inthe Bank service.BOOKS RELATING TO CUSTOMERS:Pay-in-Slip/deposit slipWhen money is to be deposited in the bank the pay in slip is to be filled. The objectof this book is to provide the customer with the bank’s acknowledgement for receiptof money to be credited his account.Cheque BookA chequebook contains a number of cheques, which is given to a customer uponwritten request and after marking the payment for the chequebook. It enables acustomer to make withdrawal from his account or make payment to various partiesby issue of cheques.GROUNDS FOR CLOSING THE CUSTOMER’S ACCOUNT:The banker may close the account of the customer due to following reasons:i.Notice by a Customerii.Death of a Customeriii.Customer’s Insanityiv.By order of courtI) NOTICE BY CUSTOMERThe banker closes the account of the customer on the application of the customer forclosing his account.Internship Report 28 Habib Bank Limited

II) DEATH OF CUSTOMEROn death of his customer, the bank must stop payment on cheques drawn on him bythe deceased customer because the death revokes his authority to pay such cheque.The heirs or the executors of the deceased customer are not authorized to operate

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on the account; it can act only in accordance with provisions mentioned in the letterof probate issued by a competent courts.III) CUSTOMER’S INSANITYIf the customer becomes insane or mental it terminates the banker’s authority to actas his customer’s agent. Since the banker customer relationship comes to end, insuch as situation, it is usually considered that the banker’s authority to pay hiscustomer’s cheques is revoked by notice of insanity. However, the bankers treat theircustomers as it unless a fairly inclusive evidence of the customer’s insanity isavailable to them.IV) ORDER OF COURTA court of law may serve a banker with an order in garnish proceeding in executionof a decree prohibiting him from honoring a customer’s cheques.

Cash departmentash Department is very sensitive and risky part of the bank. Verycausations and competent personnel are needed for the Job. HBL hasreally such a diligent staff with appreciable competencies and will to dowork. Main function of cash department is to deal with cash payment and cashreceipts.Cash deposit procedure:The customer fills the pay slip. The cashier receives the pay slip and cash. Hecounts the cash and makes the detail of the notes at the back of the pay slip. Thenhe compares the detail with amount written on slip and signs the pay Slip. Then hecredits the entries in the computer by serial No, account type, Account number andamount. Puts the stamp of the “cash Received” on the payment slip. The first portionis for bank record while other one is given to the customer.Cash payments procedure:When a customer comes to withdraw a certain amount from his account, he brings aCheque along with him. In this case the following steps are taken.The cashier receives the cheque and checks it whether it is post dated or predated.

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Cheque can be cashed within six months. A predated cheque cannot be cashed. Hetakes two signatures at the back of the cheque from the bearer. He gives the chequefor posting at the computer. The computer checks out whether there is balance in theaccount or not. Other instructions are also received e.g. blocked, frozen, Etc. theposting is done in the computer and the cheque is stamped posted with the serialnumber and date. He gives the cash to bearer and the respected account is debited.Balancing cash at the end and transferring excess cash:At the day end cash department is responsible for balancing the cash. Physical cashshould be balanced with the amount in the computer. Jinnah Chowk branch’s limit forcash is 40 million which it can keep within the branch over the night excess cash istransferred to NBP.

REMITTANCE DEPARTMENT:

It is the function of the bank to remit the money to any place where there is a bank. It is the

most easiest and safest way to send money to any place. Bank charges menial charges of

commission for the remittance. Habib Bank Limited NMC Branch Multan has also remittance

department. There are mostly four methods to remit the money. They are as follows:

BANKERS CHEQUE

1) Demand Draft (DD)

2) Mail Transfer (MT)

3) Telegraphic Transfer (TT)

4) Pay order (PO)

Details are as follows:

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1) Demand Draft (DD):

It is the most commonly method used for the remittance of money. Its very simple, firstly a

form is to be filled in, in which all details are specified that where and to which branch the draft

is to be sent then the money is depositor which is called draft and money can be drawn after

showing to the bank of the specified branch of the bank. Only specified person can draw the

money on that draft. Another method to secure the payment of the draft could be the crossing

of the draft, which means that it will only be deposited in the payee’s account.

To make it more secured and safe the bank has coded the amount exceeding RS. 15000. Only

the banker or the person knows the actual amount of the draft. In return bank gets a

commission which is its mode of earning.

Now with holding tax is also levied, so bank also gets 20% withholding tax.

Now if the draft is to be cancelled or duplicate of the draft is to be needed in case of

misplacement Rs.20 is to be paid.

2) Mail Transfer (MT):

The money is transferred through mail. One branch of the bank sends advice to the branch of

the same bank to credit the account of payee. In this type of transfer the payee must have the

bank account. For example, now a days PTV’s licensees are made all over the Pakistan. The

cash is deposited in the banks and after a week the bank mail transfers the amount to the PTV’s

Islamabad account. Bank also gets commission on the mail transfers, which is a mode of

earning for the bank.

3) Telegraphic Transfers (TT):

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It’s a good safe and fast method of transferring money from one place to another. The advice is

sent through the telegram and the bank to which the advice is made reconfirms that whether

the advice is made or not. After the confirmation the money is paid to the payee. Telegraphic

Transfers could be made by giving the name and the telephone number of the payee but

account number is considered good and sage. The amount exceeding RS. 15000 are coded in

order to keep security.

Bank charges commission on TT, which is a mode of earning for the bank.

4) Pay Order:

Pay Order is less expensive method of transferring money. Normally this method is used to

transfer money inside the city. If it is used city wide, it takes a long time.

The bank charges RS. 10 which is flat for the pay order and an excise duty of RS. 1 per leaf.

With holding tax of .20 % on the sum is also taken from the party.

Now if the pay order is to be cancelled or duplicate of the pay order is to be needed is case of

misplacement RS. 20 is to be paid.

Online fund transferAnother function of the cash department is of online transfer of funds.

Customer has give filled remittances form with cash or without cash (from accounttransfer) to the cashier in cash department who will then credits the beneficiaryaccount.

clearing department

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INTRODUCTIONEvery bank acts in two way i.e.i.Paying Bankii.Collecting BankHere in theory no legal obligation on a banker to collect cheques, drawn up toother banks for a customer. It is, however, an important function of crossed cheques.A large part of this work is carried out through the N.I.F.T.NIFT- National Institutional Facilitation Technologies (Pvt.) Limited:NIFT is a joint venture between a consortium of six major banks and privatesector. It is responsible for the establishment and management of automatedclearinghouse facilities in Pakistan. NIFT is proactively involved in the modernizationof payment systems in Pakistan.FUNCTION OF CLEARING DEPARTMENTThe following are the main functions of clearing department.4. To accept transfer deliveries and clearing cheques from the customer of thebranch and to arrange for their collection.5. To arrange the payment of cheque drawn on the branch and given forcollection to any other branch of Habib Bank of Pakistan or any othermembers, or sub-members of the local clearing area..6. To collect amounts of cheques drawn on members, sub-members of the localclearing house, sent for collection by those Habib Bank Limited, brancheswhich are not represented a the local clearing area.PROCEDURE OF DEPOSITING CHEQUES IN CLEARING DEPARTMENTWhenever a customer wants to deposit cheque, etc, he fills a pay in slip andhands it over the counter along with the instruments he wants to deposit with bank.As far as possible, the customer desire that on of the staff member fill in a slip forhim, he should be obliged promptly.One portion of the perforated pay in slip is handed over to the depositor andthe portion becomes the regular portion of a credit voucherTYPES OF CHEQUES COLLECTED BY CLEARING DEPARTMENTa.Transfer ChequesTransfer cheques are those cheques, which are collected and paid by thesame branch of bank.b.Transfer Delivery ChequesTransfer Deliver cheques are those cheques, which are collected and paid bytwo different branches of a bank, situated in the same city.c.Clearing Cheques

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Clearing cheques are those cheques in which the payee (Person who depositcheques for collection) and the drawer of a cheque maintain the account withdifferent banks.These clearing instruments are handed over to NIFT after posting necessarystamps and checking them for any errors. Then further process of clearing is carriedon the behalf of NIFT.

Locker sLockers are available in many of the HBL branches in different sizes like small,medium and large; some branches also have extra large and cubical lockers. Exceptrural areas because of security reasons. The procedure to get a locker is

same assets of account opening and RS. 600 are to be deposited as a

security fee, which is refundable. There are three types of lockers available

i.e. small medium, and large. The bank charges RS. 300 per annum for the

small locker, Rs.500 for the medium and R. 800 per annum for the large size

locker.

People get the lockers for the security of precious items, which includes jewellery, bonds,

documents etc. To ensure safety and security two key system is used. Firstly the locker holder

is verified and then in the presence of banker the locker is opened and then the banker gets out

of the locker room. The locker is opened with the help of the key with is in the custody of

locker.

Holder and is closed with the banker’s key. Without those two keys it could not be opened or

closed.Bills here does not mean the utility bills like electricity bills or gas bills, but in the bills

section those cheques are presented that are for the outstation or in station of any branch of

any bank.

Eligibility for using lockers

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Only the account holders can avail the facility of lockers. The annual rent will bedirectly debited from their respected accounts at the start of the year.

Annual rentRs.SMALL 2500 2750MEDIUM 3000 3850LARGE 4000 6050Key deposit is refundable at the time handing over the locker to bank. For the staff ofHBL key deposit is not required and also the annual rent is very low for them.

MODERN BANKING:

Master Card

ATM

MASTER CARD:

habib bank Is providing many latest and modern facilities to Its custonmers. Master Card is one

of them, which is given by HABIB BANK LIMITED. Master Card is having following benefits &

privileges.

HABIB BANK LIMITED master car is accepted at over 12 Million establishments worldwide.

Free air travel accident insurance is provide.

This is the card having a photograph & signature of the car holder, which gives the security

against misuse.

On this card cash withdrawals are available over 29000 outlets all over the world.

AUTO TELLER MACHINE:

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Now a days bank are going to inter in the world of computer & technology, each & every mark

which was one by the men is being one through computer.

HABIB BANK LIMITED is innovator to introduce A.T.M. facility to its customer first time in

Pakistan. A.T.M machine basically provide 24 hours cash service to its customer you just have to

enter your code & amount requirement you could get it whenever you want in throughout

24hours. A.T.M car facility can be given to all those who are the customer of the Bank but

having certain average balance.

In Habib Bank cantt. Branch A.T.M Dept. is supervised by experienced & well educated, with

reference to business, Mrs. Farhat. For getting A.T.M car simple procedure is adopted:

Filling of Application for A.T.M. Card

Attested from two bankers.

All kinds of necessary & related documents

TERMS & CONITIONS:

The card can be used to individuals on their request having current /PLS saving Accounts.

The card must be signed by the cardholder immediately upon receipt.

The card is not transferable & shall be use exclusively by the car holder name.

All possible steps shall be taken to safe guar the card

The card holder irrevocably an unconditionally authorises the bank to debt his her accounts

with the amount of withdrawals purchases effected through the use of his/her card

Making the position cash & balancing on daily bases.

Posting of vouchers an balancing in the A.T.M ledger on daily bases.

Preparation of Cash position statement on daily bases.

WITH DRAWL OF CASH:

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On daily bases Rs.2000/-

On weekly bases Rs.9000/- can be drawn.

Normally on deposit of 25000/- the limit of with drawl on deposit is Rs.3000/-per 30 days.

It is limited on the city only car of one city cannot be use in other city.

CREDIT DEPARTMENT1. Introduction2. Securities.3. Types of creditsINTRODUCTIONThe function of credit department is to lend money in the form of clean advances,against promissory notes, as well as secured advances against tangible andmarketable securities. The bankers prefer such securities that do not run the risk ofgeneral depreciation due to market fluctuations.Common Securities for the banker’s advances are as under:-SECURITIES1. GuaranteesInternship Report 30 Habib Bank Limited

When an application for advance cannot offer any tangible security, the banker mayrely on personal guarantees to protect himself against loss on advances or overdraftto the applicant.2. MortgageA mortgage is the transfer of an interest in specific immovable property for thepurpose of security the payment of money advanced or to be advanced by way ofloan, and existing or future debt, or the performance of an engagement which mayrise to a pecuniary liability. The transfer is called a mortgagor, the transferee amortgage.3. HypothecationWhen property in the shape of goods is charged as security for a loan form the bankthe ownership and possession is left with the borrower, the goods are said to be

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Hypothecated The essence of hypothecation is that neither the property in the goodsnot the possession of them are possession is left with the borrower, the goods aresaid to be Hypothecated the essence of hypothecation is that neither the property inthe goods not the possession of them are possessed by the lender, but the securityis granted by means of letter of hypothecation, which usually provides for a banker’scharge on the hypothecation goods.4. PledgeIn a pledge the ownership remains with pledge, but the pledge has the exclusivepossession of property until the advance is repaid in full. While in case of the defaultthe pledge has the power of sale after giving due notice.5. Promissory NoteSometimes promissory note is also accepted as a security, "A promissory note is aninstruments in writing containing an unconditional undertaking signed by the maker,to pay on demand or at a fixed or determinable future time a certain sum of moneyonly, to or to the order of certain persons, or to the bearer or the instrument." Apromissory note is incomplete until has been delivered to payee or the bearer.Moreover, the sum promised in a promissory note may be made by two or moremakers who may be liable there on jointly and severally.TYPES OF ADVANCESThe advances which are given by Habib Bank Limited are as under:-1. DEMAND FINANCE (Ordinary Loan)Demand Finances are those advances which are allowed in lump sum for a fixedperiod and are repayable lump sum or gradually in installments.TYPES OF ADVANCESa.Demand Finance (Packing Credit)Scheme introduced by State Bank of Pakistan for exporter of carpet, surgicalinstruments, at zero percent rate of interest. While banks provides atconcessional rate of interest.b.Loan ordinary (Demand Finance to Students)Qarz-e-Hasana Scheme Loans are allowed to the students, teachers without

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any interest or mark up with the recommendations of the MPA or MNA.c.Demand Finance (Staff)Loans are offered to the staff of the following four categories.i.House Building Loans against mortgage of property.ii.Loan for purchasing vehicles.iii.Loan equivalent to month’s salary.2. RUNNING FINANCE (Overdraft)Running finance (old name overdrafts) are advances, which are generally, given tomeet temporary requirements of the customers. A good customer use the banksrunning finance limit as a mean of protecting his credit in the market and as a line ofsecurity defense to meet his commitments.TYPES OF RUNNING FINANCEI.UnsecuredUnder such type of overdraft the bank pay upon the personal security of thecustomer’s mentioned on the customer’s account.II.SecuredUnder this type of overdraft the bank allows his customer to withdraw morethan his deposits after giving security against the amount overdrawn.The securities against which they given are:i.Share certificate, Saving certificateii.Depositsiii.Mortgage of propertyiv.Guarantee of personSMALL LOANSLoan is allowed to contractors clearing and forwarding agents.3. FINANCE AGAINST THE FOREIGN BILLS (FAFB)The advance facility is allowed both to local foreign bills and is classified asunder:-i.FAFB (Local) advance against Railway receipts and truck receipt, a companywith bills of exchange and invoices, are given under this head.ii.FAFB (Foreign) advances against foreign bill, covering bills of exchange bills oflading airway bills of exchange bills of lading airways bills etc.4. AGRICULTURE LOANSLoans to the farmers with holding up to 25 acres for meeting their short terms,medium and long terms Agricultural production requirements, such as:i.Agricultural inputsii.Tube wellsiii.Live Stock Framing

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iv.Land improvement5. INDUSTRIAL LOANSBesides the short-term loans which play a part in working capital medium and longtermloans are also given to industrial sector for purchase of machinery and othercapital nature goods.

TRADE DepartmentInternational trade is growing and with the development of international tradeit has become more imperative. For countries to devote more and more attention tothe complicated mechanism of Foreign Exchange. It is more important in case ofdeveloping countries. It is need of time, that a country should conserve its foreignexchange resources.MEANING OF FOREIGN EXCHANGEThe foreign exchange term refers to the principles that determine the rate ofexchange. It covers following three senses:i.The mechanism or system by which international obligations or indebtednessare fulfilled.ii.The currency of one country is exchanged for that of another.iii.The principles on which the people of world settle their debts to one another.Letter of Credit:It is a negotiable instrument through which the bank of the exporter deals with bankof the importer through the guarantee of a bank. There are different parties involvedin the L/C, e-g importer, exporter, importer bank, exporter bank, and advisory bank.LC involves banking channels in foreign trade to mitigate risk.The procedure of opening of an L/C is as follow The first thing is the Performa invoice. The Performa invoice is a document(say a clip), which is, sends by the exporter to the importer and includes theinformation like. Descriptions of goods, what type of goods you are neededand what are the quality, rate and originating country etc. Before to open a L/C the bank also consider that the goods which the importeris importing is allowed by govt. of Pakistan or not. Because the importer is notallowed to import that goods which are prohibited by the Govt. of Pakistan.

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The importer is asked to show the membership certificate of any chamber ofcommerce and industry affiliated with the Pakistan federation of chamber ofcommerce and industry. Fill the import form of the govt. of Pakistan, which is the proof of this that thereis no objection on the goods, which the customer is importing. What type of goods you are needed and what are the quality, rate andoriginating country etc.Necessary Documents required for L/C: NTN Tax Authority registration certificate Chamber of Association’s trade certificate Type of Business NIC Margin Registration No. Application for L/COn providing these documents the importer will be given the L/C form named asIB-8.Contents of IB 81. Request for LC2. Rate3. Importer and Exporter’s particulars4. Amount5. Terms6. Partial Shipment (Allowed, not allowed)7. Transshipment (Allowed, Not Allowed)8. Port of Loading and destination9. Payment ModeI. Sigh tOn seeing the documents the importer has to pay.II. At Sight and Negotiation:It means that exporter will submit his documents with the bank and immediately asksfor payment.III. Acceptance:On showing the documents to the importer, the bank asks him to accept that he willpay within 30, 60, 90, 120, 180 etc days.10.Documents Required: Certificate of Origin. Commercial Invoice

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Bill of Lading / Air way bill.Charges:For L/C following charges are applicable; Commission Postage L/C Advising commission L/C amendment Commission L/C confirmation Commission L/C Negotiation CommissionPayment Mode:In foreign trade payment modes are1) Advance Payment: Importer makes payment before delivery of goods.2) Open A/C: Importer makes payment after receiving the goods.Issuing foreign exchange accounts cheques booksAnother function of foreign exchange department in Jinnah Chowk branch is to issueforeign exchange accounts cheques books to customers on request. This process isnot yet centralized. Cheque book is issued within 15 minute of receiving request fromcustomers after making necessary register entries and posting stamps on it.

IT DEPARTMENTProducts and Services of Habib BankLimitedRetail BankingFor

Individual CustomersDeposit AccountsCurrent AccountsMake unlimited transactions while maintaining a low minimum balance every month.HBL is currently offering three types of accounts in current account category. Theirdetail and name is as under.1. HBL FreedomAccount

2.HBL BusinessValueAccount3. Current Account4. Basic Banking Account (BBA)

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Habib Bank Limited

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HBL FreedomAccount Use your money as you please with HBL FreedomAccount. Rest free from worries and expand your business with unmatched accessibility across Pakistan. On a monthly balance of Rs. 25,000 or more, avail a host of free servicesincluding: • Free cash withdrawal & deposit transactions through any HBL branch• Free online funds transfer transactions• Free Banker’s Cheques• Free HBL cheque deposit transactions at any HBL branch• Free cheque books• Free duplicate account statements• Free debit card issuance (for individuals and sole proprietors)• Free ATM transactions through HBL network• Free SMS alerts* on transactions above PKR 25,000/- (for individuals and

sole proprietors) upon activation via HBL Phonebanking.Note: A charge of Rs. 58 will be applicable to each debit transaction initiated by the customer during the month if balance falls below Rs. 25,000 even for a day.

 

HBL BusinessValueAccount Unique transactional account for Businessmen Up to 5.35%* profit per annum Profit calculated daily, paid every quarter Minimum balance of Rs. 20,000 HBL DebitCard and Inter Branch Transaction System (IBTS) facilities Up to 10 Bankers Cheques free (at minimum balance of Rs. 500,000) Funds transfer to any bank through HBL PhoneBankingCurrent Account Minimum balance of Rs. 5,000 Unlimited transactions Non-profit bearing HBL DebitCard and Inter Branch Transaction System (IBTS) facilities Funds transfer to any bank through HBL PhoneBankingBasic Banking Account (BBA) Can be opened with only Rs. 1,000 No minimum balance requirement Upto 2 withdrawal and 2 deposit transactions free every month Unlimited withdrawals through HBL DebitCard Non-profit bearingSavings accountsAvail the flexibility of making transactions while earning profit on daily/monthly basis.HBL is currently offering five types of accounts in savings account category. Theirdetail and name is as under.1. HBL Value Account

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Habib Bank Limited

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2. PLS-Savings Account3. Remittance Munafa Plus Savings Account4. Daily Munafa Account5. Daily Progressive AccountHBL Value Account 7.19%* profit per annum Profit calculated monthly, paid every quarter Deposit ranges from Rs. 10,000 to Rs. 1,000,000 Two withdrawals free every monthPLS-Savings Account 5.06% profit per annum* Profit paid bi-annually HBL DebitCard and Inter Branch Transaction System (IBTS) facilities Funds transfer to any bank through HBL PhoneBanking Minimum balance of Rs. 20,000 Unlimited transactionsRemittance Munafa Plus Savings Account Special account for receiving foreign remittances 5.12%* profit per annum Profit paid every month Minimum balance of Rs. 20,000Daily Munafa Account Profit calculated daily, paid every month Up to 8.84% profit per annum* HBL DebitCard and Inter Branch Transaction System (IBTS) facilities Funds transfer to any bank through HBL PhoneBanking Minimum balance of Rs. 20,000Daily Progressive Account Unique transactional account for Institutions Profit calculated daily, paid every month Up to 11.57% profit per annum* Inter Branch Transaction System (IBTS) facility Funds transfer to any bank through HBL PhoneBanking Minimum balance of Rs. 20,000Terms AccountsInvest your savings in HBL term deposits for a fixed duration and earn profit whilekeeping your savings secure. HBL is currently offering one type of account in termsaccount category. Their detail and name is as under.1. HBL Advantage AccountHBL Advantage Account Multiple options for tenure and profit payout

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Loan facility up to 90% of investment Minimum investment of Rs. 25,000 Withdrawal at end of fixed term

Term Profit per annum*1 Year 10.25%3 Year 11.00%5 Year 10.87%

10 Year 10.24%   2.Investment Plus Deposit

• Account for Institutions• Multiple options for tenure and profit payout• Profit paid at maturity• Minimum investment of Rs. 20 million**• Withdrawal at end of fixed term

Foreign Currency AccountsHBL offers Foreign Currency Accounts in multiple currencies as savings and termaccounts. Their detail is as under.FC-SB Savings Account offered in 3 currencies, USD (US dollar), EUR (Euros) andGBP (UK pound) Tiered product, with rates depending on choice of currency To earn profit, minimum balance in USD, EUR and GBP is 1,000 Interest is payable on a quarterly basisPROFIT STRATEGYHYFFD (High Yield Foreign Currency Fixed Deposit) Available in 1 month, 2 month, 3 month, 6 month and 12 Month in USD, EURand GBP Tiered product, with rates depending on choice of currency and term Profit paid on maturity only. No interim interest is payable.Tenure Profit at maturity

PERIOED MODE OF PROFIT PAYMENT RATE OF PROFIT OFFERED

3 MONTH Quarterly 7.00%

6 MONTH Six month 7.50%

ONE YEAR

Monthly

Quarterly

Six month

9.25%

9.50%

9.75%

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On maturity 10.25%

THREE YEARS

Monthly

Quarterly

Six month

On maturity

9.50

9.75

10.00

12.25

FIVE YEARS

Monthly

Quarterly

Six month

On maturity

10.25

10.50

10.75

13.50

TEN YEARS

Monthly

Quarterly

Six month

On maturity

10.75

11.00

11.25

16.50

HBL car loan

HBL Car Loan helps customers to get their preferred car through a simple andhassle-free process, backed by superior service and support. Now customer candrive a car he always wanted.Features Choice of used, new local/imported and reconditioned imported car.

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Repayment options ranging Upto 7 years. Upto 85% of financing for the car of your choice. Insurance at all times for complete peace of mind and security. Round the clock support available through HBL PhoneBanking; you can placeyour requests and queries, track the status of your repayment/loan accountand avail other value-added services through HBL PhoneBanking.Eligibility Criteria  Salaried Individuals

Self-Employed Business persons/ Professionals

Citizenship Pakistani PakistaniAge 22-60 years 22-65 yearsMinimum monthly income Rs. 20,000 Rs. 25,000

How to apply Just visit any HBL branch or Habib Bank Auto Finance Centre for details andapplication. Submit complete set of application without any charges to the branch or theAuto Center. Sign the necessary documents on approval of the application Payment is released within 24 hours of the submission of post-dated chequesand initial payment after approval of the request.DocumentationSalaried Individuals Complete Application Form Salary Certificate / Most recent Salary Slip Bank Statement for past one year Two Copies of NIC Employment Certificate with date of joining Two passport size photographs Copy of the last paid utility bill (residence)Self-Employed Business persons/Professionals Complete Application Form Two Copies of NIC Two passport size photographs Letter of proprietorship / Registered Partnership Deed Certified latest Form A and Form 29, where applicable, along with articles andMemorandum of Association Copy of last paid utility bill (residence) Bank Statement for the last 1 year

HBL car to car40

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HBL CarToCar is a revolutionary car financing offer. It makes the car of customerchoice affordable and practical with a buy back guarantee. HBL CarToCar offersmatchless features and unique options at the end of the lease. Now customer candrive a new car at the end of every two years.FeaturesPay only for what you useWhen customer lease a car under HBL CarToCar, he only pay for that part of thecar’s value that he use during the lease term. The car’s residual value (forecasted forthe end of the specific lease term) is agreed with him at the start of the lease term.This amount is deducted from the car price thus lowering the finance amount. Thisfinance amount is based only on a part of the car’s value and not the full value of thecar. Therefore, HBL CarToCar offers very low installments as compared to anyconventional financing.Upgrade of lifestyleHBL gives customer the guarantee that if he wishes to return the car to HBL at theend of the lease term, he will not have to pay off the car’s residual value. Instead,HBL will directly settle this outstanding liability for customer under the buy backInternship Report 44 Habib Bank Limited

guarantee. Hence, he can upgrade to a new car as frequently as two years withoutany complication and hassle.AffordabilityWith HBL CarToCar, customer only has to pay the difference between the car price

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and the pre-agreed residual value to the bank. As a result, the monthly installmentmay even be 40% to 50% less than that of conventional financing.FlexibilityHBL CarToCar offers customers several choices at the end of the lease term:• Upgrade - Simply return the car to HBL and drive a new one home• Walk away - Return the car to HBL and end the lease• Buy - Keep the same car. Just make a one-time settlement of the car’s residualvalue to HBL or pay the same in easy installments over a specified extended periodof time• Sell - Enjoy the gain from selling off the car at a higher price in the market thanwhat you ay HBL as the residual valueEligibility Criteria

Salaried IndividualsSelf-Employed Business persons/ Professionals

Citizenship Pakistani Pakistani

Age 22-60 years 22-65 years

Minimum monthly income Rs. 20,000 Rs. 25,000

DocumentationSalaried Individuals Complete Application Form Salary Certificate / Most recent Salary Slip Bank Statement for past one year Two Copies of NIC Employment Certificate with date of joining Two passport size photographs Copy of the last paid utility bill (residence)Self-Employed Business persons/Professionals Complete Application Form Two Copies of NIC Two passport size photographs Letter of proprietorship / Registered Partnership Deed Certified latest Form A and Form 29, where applicable, along with articles andMemorandum of Association Copy of last paid utility bill (residence) Bank Statement for the last 1 year

HBL Credit Card42

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By the help of HBL credit card customer enters into the world of convenience andflexibility. Accepted at over 29 million merchants worldwide, HBL Credit Card makesshopping fun and paying simple. So that a customer can make the most of hisshopping experience.BenefitsBuy now, pay laterBuy what customer want, when he want and pay for it later. A credit card statementwill be sent to him every month with details of all his purchases. He will have 21credit free days to make the payment from the statement date. Customer should payat least 3 days in advance if he makes your payment by cheques to allow enoughtime for clearance.Pay as much as customer wantsA customer can pay the entire or as little as 5% of the outstanding balance in hisstatement. The unpaid amount will be transferred to his next month’s statementalong with applicable services charges.Cash advanceCustomer can go to any specified HBL branch and withdraw cash at the counter. Hecan also go to any 1Link ATM in Pakistan and more than 1,000,000 ATMs worldwidedisplaying the Visa/Plus logo. Withdraw cash up to the available cash advance limiton his HBL Credit Card for a charge applicable from the withdrawal date.Balance transfer facilityCard holder can pay off balances he owes to other banks through his HBL CreditCard at a lower service charge.SecurityCard holder cannot lose cash if he doesn’t carry it! In the event that his card getsstolen/lost, he should call HBL PhoneBanking to have his card blocked immediately.MAIN CREDIT CARDS

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Gold Card   Green CardRupees Minimum gross salary requirements Rupees

50,000 Salaried individuals 15,000180,000 Self-employed business persons/professionals 25,000

 Rupees Credit limit range Rupees150,000 Minimum 20,000500,000 Maximum 149,000

Hbl debit cardHBL Visa Debit Card allows a card holder to pay for his purchases directly from hisbank account. He doesn’t have to carry cash and his monthly statement provideshim with a complete record of all his transactions so he can manage his expenseswith ease.

FeaturesNo InterestHBL Visa Debit Card is the perfect way of paying for purchases as it gives access tothe exact amount of money a customer needed, as and when he needs it. There isno interest or credit on payments because he spends from the money available in hispersonal HBL Account.Internship Report 48 Habib Bank Limited

Ease & Security

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HBL Visa Debit Card offers ease and convenience because card holder doesn’t haveto visit an ATM to withdraw cash. Paying with the HBL Debit card is safe because iteliminates the need to carry cash. A single swipe automatically debits the exactpurchase amount from his personal HBL account.Spending LimitsThe daily spending limit at shops and outlets on HBL Visa Debit Card is Rs. 100,000.(These figures are subject to the balance available in account).Free Account StatementHBL cardholders receive a free monthly account statement for their Debit Card andATM transactions to help them keep track of their spending.International Recognition & AcceptabilityHBL Visa Debit Card is accepted at over 20 million Visa merchants worldwide,including over 10,000 merchants in Pakistan. As an ATM card it is accepted at morethan 1,000 1-Link & M-Net ATMs in Pakistan and 864,000 Visa ATMs worldwide. Nomatter where card holder is, with the HBL Visa Debit Card, HBL is always with him.No LiabilityIn case of a lost or stolen card, card holders are protected against fraudulenttransactions made on their card after they report the incident.

hbl personal LoansWith the rising cost of living, it is becoming increasingly difficult to make expensivepurchases or meet unexpected expenses. HBL is helping customer finance themwith Habib Bank personal Loans (old name flexi loan). Customer may avail apersonal loan of up to SIX TIMES of his net take-home salary subject to a maximumof Rs.300,000/- provided he work for an organization approved by HBL.Features Flexible tenure: 12, 24, 36,48 or 60 months No processing fee Repayment through easy and affordable monthly installments from salary. Credit Life & Disability Insurance Repayment through easy and affordable monthly installments You determine the need, we help you finance

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Option of add up replacement for existing customer. Minimum salary Rs. 12000 No salary limit for existing customers. 23% or 21% rate for existing users instead of 25%

hbl phone banking

Now the bank is just call away. Customer can now call HBL PhoneBanking and savea trip to the branch. His query will be resolved in a single telephone call fromanywhere and at anytime.T-PIN GenerationCustomer’s TPIN (Telephone Personal Identification Number) is generated the firsttime he calls and he can use it as your password for verification purposes, selfservicebanking through IVR and additional services through HBL’s PhoneBankingOfficers. Customer can change his TPIN anytime he like.HBL PhoneBanking services for Deposit Account customersCustomers can use the Interactive Voice Response (IVR) system or talk to HBLPhoneBanking Officers to: Get his account balance Get information about the last 5-10 transactions carried out on his account Request bank statement, either through fax or email (as supplied in hissubscription form) Get details of transactions from the last 6 months on each of the accountslisted on his subscription form Change and/or modify his contact details Transfer funds between his own accounts (as listed in the subscription form)or from his account to a third party account (as listed in the Third PartyAuthorization Form) Transfer funds from his own account to an account in another bank under the1-Link network (Inter Bank Funds Transfer) Generate his own choice of ATM Pin without filling a request at your branch Inquire about HBL’s product offerings

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Lodge a complaint in case of any inconvenience Inquire about the daily accounts related profit rates and currency exchangerates Request a number of physical instruments and/or branch banking relatedservices that he might require, including: Pay Order Demand Draft Statement Balance Certificate Cheque BookHBL PhoneBanking services for HBL CarToCar and Car Loan customersHBL CarToCar and HBL CarLoan customers can enjoy the following servicesthrough HBL PhoneBanking: Balance Inquiry Last 5-10 Transactions Statement Generation (Email and Fax) Account Maintenance Assistance in case of Car Theft/Damage

BANCAssuranceHBL and New Jubilee Life Insurance Company Limited (NJLI) introduce

Amaan(Retirement Plan)

Tabeer (Child Education & Marriage). These products havebeen designed keeping HBL’s customer base as the focus and will provide lifeinsurance along with an investment option.

Amaan (Retirement plan) Amaan is a pension plan that provides an opportunity for growth through investmentin a balanced portfolio with post-retirement income benefits. The plan covers lifeinsurance and gives attractive returns on investment to its customers.

Tabeer (Child Education and marriage plan)

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Tabeer is a plan that provides parents with a means to accumulate a fund over aperiod of time which can then be used to pay for a child’s education or marriage.Plans are available for both under and over 45 years of age.

Hbl corporate bankingHBL Corporate Banking Group comprises a seasoned team of RelationshipManagers (RMs) to meet the demanding service standards of large corporations. Along history of financing and nurturing relationships in Pakistan has given HBL aunique insight, enabling it to provide timely and effective financial solutions for theircustomers to meet the growing challenges of a global economy. For a corporatecustomer, with a turnover of at least PKR 300 million, HBL has a range of solutionsInternship Report 53 Habib Bank Limited

designed to help him with his banking needs. Their RMs have the expertisecustomer need to create tailored financial solutions catering to the specificrequirements of his business. Whether establishing a new venture or expanding anexisting business, HBL’s team understands customer’s banking needs and worksclosely with him to realize his goals.ServicesHBL provides the following services to meet customers funding requirements: Working Capital Finance, including Overdraft, FE Loans, etc. Pre and Post Shipment Export Financing (PKR and USD based) Import Financing (PKR and USD based) LMM Funding Receivable Discounting Islamic Banking facilities Cash Management Services Trade Services including Letter of Credit, Letter of Guarantee and StandbyLetter of Credit, etc.HBL CORPORATE CENTERS1.Corporate Centre, Karachi 6.Export Processing Zone, Karachi2.PIA Branch, Karachi 7.Steel Mills, Karachi3.Stock Exchange, Karachi 8.Stock Exchange, Lahore4.Corporate Centre, Islamabad 9.Morga Branch, Rawalpindi5.Corporate Centre, Faisalabad 10.Corporate Centre, Multan11. Karachi Port Trust, Karachi

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HBL Commercial bankingHBL’s Commercial Banking Group targets medium sized companies with a turnoverof at least PKR 50 million. Its business units are located in Karachi, Lahore,Faisalabad, Sialkot, Gujranwala and Peshawar. Each unit is dedicated to servicebusiness clusters located within these cities. They have the ability and the resourcesto meet the needs of customer’s business with their pro-active, responsive andexperienced Relationship Managers who are committed to understanding customer’sbusiness.ServicesHBL offers financing for the following: Working Capital Procurement of Inventory Receivables Procurement of Machinery Expansion of production facilities Import of raw materials Exports GuaranteesHBL COMMERCIAL BANKING CENTERS1.Al-Noor, Karachi 9.Foreign Exchange, Karachi2.Korangi Industrial Area, Karachi 10.Napier Road, Karachi3.Saddar, Karachi 11.S.I.T.E. Karachi4.Tariq Road, Karachi 12.Panorama Centre, Lahore5.Badami Bagh, Lahore 13Peco Road, Lahore6.Kashmir Road, Sialkot 14.Paris Road, Sialkot7.Small Ind. Estate, Sialkot. 15.Circular Road, Faisalabad8.Peoples Colony, Faisalabad 16.Trust Plaza, Gujranwala17.Super Market, Peshawar

Hbl zarai banking

HBL Zarai Banking facilities are spread across the country and provide financing

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through more than 800 of their branches. HBL’s presence in all agriculture belts ofthe country ensures easy access to farmers in rural areas. HBL Zarai Bankingprovides loans to small-scale land owning farmers as well as large institutionalizedand alliance based finance, enhancing agricultural harvest and, in turn, economicoutput of the country.ProductsHBL Zarai Banking enables farmers to invest in premier quality seeds, fertilizers,pesticides, agricultural implements and non-farm setups through its various productprograms.

Crop InputsCrop specific finance for purchase of Agriculture inputs such as seed, fertilizer,pesticide and other related inputs.

Farm ImplementsFinance available for purchase of farm implements & machinery like combinedharvester, sprayers, ploughs, tube wells and other crop-related tools/implements.

Tractors/Agricultural VehiclesFinance available to individual farmers, self-employed tractor operators, providingthe option to select vehicles from a range of different manufacturers.

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LivestockFinance available for feed, medicines, raw material, raising charges and otherrelated activities.

PoultryFinance available for all poultry related activities including poultry farmconstruction/equipment, hatchery plant & machinery, poultry feed, poultry medicines,composite feed production, poultry processing and other related activities.

Fish FarmingFinance available for inland fish farms as well as deep-sea fishing. This includesprocurement of boat, fish locating equipment, nets & ropes, ice maker, fish farmwater solution, hatchery construction/equipment, purchase of medicines / feed andother related activities.

Group LendingJoint finance facility for a group of farmers with small land holdings for workingcapital requirement.NOTE: These finances may be availed under Demand Finance or Running Financecategories. Demand Finance is usually available for short term financing needs while

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Running Finance is available on the basis of revolving limit.

Islamic bankingIslamic Banking is a growing market segment that offers attractive opportunities topotential and existing customers. At HBL, Islamic Banking offers Shariah compliantproducts and services to meet the short and long term requirements of business,trade and industry.Shariah ComplianceHBL’s Islamic Banking products are in strict compliance with the tenets of Shariahand bear Shariah Compliance Certification from an independent Shariah Advisor.Their Shariah Advisor has in depth experience in Shariah rulings (Fatawa) andteachings at different forums with qualifications of Dars-e-Nizami, M.A and L.L.B.HBL also have a Shariah Scholar, as member of their Shariah SupervisoryCommittee to ensure a sound Shariah Compliance mechanism, giving promptresponses to customer’s needs and access to Shariah knowledge.Products and ServicesCorporate and Commercial customers can choose from Shariah compliant bankingsolutions to meet their business needs.Financing products

Ijarah (Leasing)Medium to long term facility for vehicles, plant and machinery leased out to the clienton rental basis.Diminishing MusharakaMedium to long term facility for vehicles, plant and machinery on joint ownershipbasis.MurabahaLocal and Import facilities for purchase of raw materials, semi finished and finishedgoods, stores or spares.Trade ServicesLetter of Credit Facility, Collection of Foreign Bills, Collection of Local Bills, Letter of

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Guarantees.Liability Products

Customers are welcome to visit their Islamic Banking branch for the followingservices: Current Account (PKR, USD, EURO, POUND STERLING) Basic Banking Account Islamic freedom account hbl Islamic PLS Account HBL Islamic Daily Progressive Account

HBL Islamic Advantage Investment Accoun

HBL Islamic FC PLS Accoun

HBL Islamic HYFID(High Yield FC Investment Deposit)

Further services are ATM/Debit Card Facility Foreign / Inland Remittances Utility Bills Collection E-banking / Internet Banking Services 24/7 Phone Banking Services Personalized customer friendly services

BranchAddressFinlay HouseGround FloorI.I Chundrigar RoadKarachiContact details:021-32429304, 32429431&32Fax021-32429307E-mailhbl.5000@hbl.com

Learning as an interneeAs every body knows that "Knowledge without practice is sterile "In order to givevent to this idea an Internship program of six to eight weeks has been arranged indifferent esteemed organizations during M.B.A. In this regard on 15th of June 2009, Iwas asked by Mr. Mirza Saeed (HR officer in HBL regional office Sahiwal) to go toHabib Bank Jinnah Chowk branch to start an internship of seven weeks there.During this period I got a chance to work and learn in following departments of thebank:

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Bills clearing department Credit department I.T department Cash department Accounts, ATM and Lockers departmentDuties and learning in bill clearing departmentThe second department in which I got a chance to work was bill clearing department.During the work in clearing department I came to know about the different functionsof clearing department and how to perform them. I came to know the process ofreceiving cheques by Dak, how to check cheques for any error like, the chequesshould be of the bank which is the clearing member of area which comes underJinnah Chowk branch for example if the cheque is of bank Al-Fallah Lahore then itshould go to zonal branch of Lahore region instead of zonal branch of Sahiwal. Thenchecking whether the amount of cheque and OBC (outward bank collections)voucher attached to it is same or not. If no error is found then making register entriesby noting down their OBC number branch code and amount of the voucher. Then: Calculating the total amount of vouchers by summing individual amounts. Calculating the total amount of cheques by summing individual amounts. Preparing an add list to be attached with clearing instruments (cheques). Writing vouchers for demand drafts.And I also came to know about the different types of stamps and their use inparticular situation like DAK RECEIVED stamp and CLEARING stamp. Afterattaching add list, clearing instruments are handed over to NIFT for furtherprocessing. These clearing instruments are delivered to their respective banks forclearance by NIFT. I also learnt in case of Banker’s Cheques how to verify signaturefrom the book in which all the signatures of authorized persons of HBL are given withtheir specific code. And I also worked on OBC (Outward bank collection) forwardingschedule. I came to know the process of sending cheques or other clearinginstruments for clearance to zonal branch of another region. Filling vouchers Assigning OBC numbers

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Making entries in OBC registerDuties and learning in credit departmentAfter bill clearing department I started my work and learning in credit department ofthe branch. Mr. Haroon Butt (Credit Manager) told me about the terms andconditions of the commercial loan, types of commercial loan like industrial loan andloan for merchants, how to make proposal for commercial loan, document requiredto make a proposal, markup of commercial loan (18.5 % annually). He also gave mechance to view some old proposals and the proposal on which he was working.Mr. Asif (assistant for Mr. Haroon butt in credit department) who is dealing consumerfinancing. He told me about different types of consumer financing. Flexi loan (personal loan) Auto finance Lifestyle loanIn Sahiwal region at this point of time from HBL only personal loan is active whileauto finance is about to start again in near future and lifestyle loan is inactive. I cameto know about the terms and conditions of personal loan. Only the governmentservant who has his salary account at least six month old in HBL can apply. Differentmarkup for different categories like 21%, 23% and 25%. 21% for existing users’ upto 3 year duration 23% for existing users for 4 or 5 years duration. 25% for new customersI also did work on documentation process for personal loan. I came to know aboutthe different types of document required to complete a case for sending it to regionalhead office for approval. Document like branch check list, application form, Copy ofCNIC of customer and two references, CNIC verification report from NADRA,customer’s account statement, finance agreement form etc.I also came to know about different types of securities which a bank demands fromcustomer while issuing loan. e.g. Guarantees, Mortgage, Hypothecation and Pledge.

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Duties and learning in Accounts, ATM and Lockers departmentThen I learned about ATM (automatic teller machine). I came to know about thefunctions and working process of ATM machine. Loading cash and balancing at thetime of loading again. Next my main concern was to know about all the aspects ofATM card. I came know about the types, process of issuing ATM card to customers,filling forms, how to activate ATM card, charges of issuing and using ATM card.Then I spent my time in lockers department. I took all the information about theterms and conditions of allotting and operating a locker, types of locker like small,medium and large, charges of using lockers, key deposit (refundable), fillingapplication forms, insurance amount for specific size of locker and etc. I also cameto know about the process of operating locker by the customer, how to open thelocker with the help of two keys. 1 key in the hand of bank officer (anticlockwise) 2nd key in the hand of customer (clockwise)Customer is allowed to operate the locker in full privacy. Only the customer himselfor other person authorized by him can operate the locker. After that bank officer hasto take the signature of the customers on attendance register maintained for thispurpose.Then my duty was in Accounts department. I came to know the procedure for fillingthe form to open an account, different types of stamps required and about signatureof the staff. Documents required to be attached with the form. Copy of CNIC Utility bill Provisional receipt KYC (Know Your Customer)And how to post an account on system after filling the form. Then I came to knowabout Saving accounts and different types of accounts in saving category and terms

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and conditions of each type.1. HBL Value Account2. PLS-Savings Account3. Remittance Munafa Plus Savings Account4. Daily Munafa Account5. Daily Progressive AccountThen current accounts6. HBL Business Value Account7. Current Account8. Basic Banking Account (BBA)Term accounts9. HBL Advantage Account10.Investment plus DepositFC accounts11. FC-SBSavings Account offered in 3 currencies, USD (US dollar), EUR (Euros) and GBP(UK pound)12.HYFFD (High Yield Foreign Currency Fixed Deposit)Available in 1 month, 2 month, 3 month, 6 month and 12 Month in USD, EUR andGBPHow this experience will impact my careerWorking for 07 weeks in HBL Jinnah Chowk branch as an intern was veryinformative experience for me. During the time I learnt many new things which aresurely going to help me in my professional career. It was a good experience for meto observe and to be the part of practical working of an organization like HBL. Duringthe internship I got a chance to understand general consumer’s behavior and hisneeds and wants related to banking services and products.

Achievements of HBL in2010AchievementsHBL receives 3 Global Finance AwardsOctober 06, 2009Istanbul: On the occasion of the World Bank Annual Meetings 2009 currently underway in Istanbul, Global Finance presented banking awards to the top global banks at a ceremony attended by senior bank officials. HBL was presented with 3 awards: Best Bank – Pakistan, Best Trade Finance Provider – Pakistan and Best Foreign Exchange Provider – Pakistan. These awards were conferred on HBL in recognition of its achievements in product delivery and service quality in the markets it serves.

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The awards were received by Mr. Sultan Ali Allana (Chairman – HBL), Mr. Nauman Dar (Head International Banking – HBL) and Mr. Tariq Mateen (Head – Financial Institutions – HBL). At this occasion Mr. Allana said, "We are extremely proud of the awards that the bank has received today. These awards recognize our superior market positioning and are a reflection of the bank's management's endeavors to achieve and excel in areas of product delivery and customer services. HBL will continue to focus on its core businesses and invest in Technology and Human Resources with the aim to further strengthen its leadership position".

Global Finance this year has identified the best banks in 123 countries as well as the best banks globally in 11 key banking categories. The criteria used for selecting this year’s winners, considered both objective and subjective factors. Objective criteria included growth in assets, profitability, geographic reach, strategic relationships, new business development and product innovation. Subjective criteria included the opinions of equity and credit-rating analysts, banking consultants and others in the industry, as well as corporate financial executives. Global Finance states that "winners are not always the biggest banks but, rather, the best banks - those with the qualities that corporations should look for when choosing a bank".

RecommendationsAs we seen from the previous analysis of the financial statements I have realizedthat that Habib Bank is performing very well since its inception. It is quite difficult togive suggestion to improve the banking conditions Habib Bank Limited. As we knowthat nothing is perfect, there is always a room for improvement, so I will recommendfollowing suggestions for HBL: Employees Training programmes must be introduced on continuousbasis so that Employees have understanding with the latestdevelopments especially with the customers.

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Bank should introduced incentive plans for employees on regular basisso that if employees may work whole heartedly for the welfare of theirorganization. While giving incentives qualification, work, experience,hard work and such other factors must be considered. Mismanagement of resources must be avoided as much as possible asit decreases profit but also discourage hard worker and honestemployees. Fresh graduates must be recruited. As the combination of Experiencedand fresh can produce better results and it will improve the efficiency ofmanagement. Habib Bank is going towards mobile banking but the problem is that acommon client has no idea of its usage due to lack of marketing. Ithink that a proper marketing programme must be launched for client’sawareness. Banks different schemes must be conveyed to the targeted customersso that to have a reasonable share in market. Bank should help the society by providing interest free loans to theTalented Students. Online Banking should be introduced in all the branches. To motivate the employees their remuneration / salaries should bemade at par with top tier Banks. Aggressive publicity campaign must be introduced through press andElectronic media for new products and scheme by initiating vigorousmarketing policy. Bank should adopt such an induction plan that when a customer openshis account with the bank he should be supplied with a booklet whichenables him to know the procedure of filing the cheques, pay-in-slipetc. It will save a lot of time of the bank staff afterward during theconduct of the account of that customer. The attitude of the bankers with all of their customers is not the same;they pay more attention and good service to some of the customersand neglect a major portion of them. Some of the customers approachto the bank officials and get their work done before others; it is not agood practice. All the customers should be treated equally. HBL should increase its communication with customers about theterms and conditions of its different products and services.

GlossaryD.D: Demand DraftA/C: accountO.B: Other BankO.B.C Outward Bills CollectionP.L.S: Profit and Loss AccountDr: debit

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Cr: CreditC.A: Current AccountF.L: Flexi loanL.G: Letter of GuaranteeD.F: Demand FinanceL.C: Letter of CreditR.F: Running FinanceF.A.P.C: Finance against Packing CreditHBL Habib Bank LimitedABL Allied Bank LimitedMCB Muslim Commercial BankNBP National Bank LimitedUBL United Bank LimitedNIFT National Institutional Facilitation Technologies(pvt) LTD.

Biblio graph yMaterial on these books, articles and websites has helped me a lot in preparationthis report

Books HBL Corporate Profile 2010 HBL Annual Reports 2008 and 2009 first QuarterHBL Job Description

Articles & Documents BANKING SECTOR REFORMS IN PAKISTAN :http://www.ishrathusain.iba.edu.pk/speaches/BANKING_SECTOR_REFORMS.pdf www.encyclopedia.com/doc/1G1-61864366.html

Websites www.hbl.com www.habibbankltd.com www.hblasset.com www.investopedia.com/articles/07/banking.asp wiki.answers.com/Q/Evolution_of_banking

IndexAnnex A:INTERNTSHIP CERTIFICATEAnnex B:INDICATIVE RATESAnnex C:ACCOUNT OPENING FORM

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Annex D:REMITTANCES APPLICATIONAnnex E:DEBIT CARD APPLICATION FORMAnnex F:DEPOSIT SLIP

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