HABIB BANK LIMITED

JAHAN KHAWAB WAHAN HBL

INTERNSHIP REPORT SUBMITTED BY

MUHAMMAD FURQAN YOUNAS M10MBA007 MBA BANKING & FINANCE HAILEY COLLEGE OF BANKING & FINANCE
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ACKNOWLEDGEMENT

No one can say that I am perfect, everyone should admit that without the help of ALLAH and His people a man cant get anything so I bow my head before almighty Allah with gratitude. I am also very much thankful and presents salute to many individuals who have helped me in shaping this report .I am also very much thankful to lot of former fellows and contemporary colleagues who took the time and trouble during the last few days to speak to me about the way this text could be further improved. I have no words to express my gratitude to my Advisor SIR.FIDA HUSSAIN BUKHARI for his intellectual guidance without which it could have been rather difficult for me to complete this report. I am also very thankful to the staff of HABIB BANK LIMITED MAIN BRANCH JALAL PUR JATTAN GUJRAT; especially to Mr.Muhammad Sufyan (manager operations) who provided me an opportunity to work in friendly environment.

Special thanks to:

Mr. Ijaz Ahmad Mir Mr.Muhammad Sufyan Mam Aamna Javed Mir Branch Manager Manager Operations Head Remittances

TABLE OF CONTENTS

Serial 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Particulars Executive summary Introduction History Brand, vision, mission &values Management Forum Organizational Chart HR policy of HBL Products for individual customers Products for business customers Sections of a Branch Work as an Intern SWOT Analysis Horizontal Analysis Ratios Analysis Conclusion & Recommendations
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Page No. 4 6 7 9 13 14 15 23 51 60 75 80 84 89 100

EXECUTIVE SUMMARY

This internship report starts from the introduction and history of Habib Bank Limited of Pakistan;how it helped the nation and country in any way.

Bank mission and vision statement shows that it focuses on overall performance of bank and quality of service and products.

The main objective of the bank is to realize the real importance of its customers and is profitoriented.

Bank is providing services to individual as well as corporate customers Main products for individual customers are:

Credit Cards Home Loan Personal Loan Deposit Accounts Banc Assurance Debit Card Phone Banking Fast Transfer

For business customers following product are available: Corporate Banking Commercial Banking
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SME Banking Global Treasury Investment Banking

Cash Management Zarai Banking Asset Management.

A bank performs basic functions that are: Accept money as deposit Investing deposits to earn profit Miscellaneous functions Each branch of the bank is divided into different sections on the basis of these basic functions. Deposit Section opens different accounts of clients and maintains record of money deposits from the customer and credited it into his account. It also maintains record of payment to the customer when he presents cheque. Remittance and Collection Section deals with customers who want to transfer or collect their money from other city. Clearance Department deals with the clearance of cheques of other banks and also the cheques can be cleared at any branch of bank.

I have also given the SWOT Analysis of HBL which shows that the bank as many Strengths and Weaknesses and also with many Opportunities there are numerous Threats as well. I have also given Horizontal as well as ratio analysis of the organization.

After this I have suggested and recommended how bank can improve its working and flourish. In the end I have given conclusion of the entire report.

INTRODUCION OF HABIB BANK LIMITED

HBL was the first commercial bank to be established in Pakistan in 1947. Over the years, HBL has grown its branch network and become the largest private sector bank with over 1,450 branches across the country and a customer base exceeding five million relationships.

With a presence in 25 countries, subsidiaries in Hong Kong and the UK, affiliates in Nepal, Nigeria, Kenya and Kyrgyzstan and rep offices in Iran and China, HBL is also the largest domestic multinational. The Bank is expanding its presence in principal international markets including the UK, UAE, South and Central Asia, Africa and the Far East.

Key areas of operations encompass product offerings and services in Retail and Consumer Banking. HBL has the largest Corporate Banking portfolio in the country with an active Investment Banking arm. SME and Agriculture lending programs and banking services are offered in urban and rural centers.

Head Office

Registered Office 4th Floor, Habib Bank Tower

HBL Plaza I. I. Chundrigar Road Karachi-75650, Pakistan.

Jinnah Avenue Islamabad, Pakistan

HISTORY OF HABIB BANK LIMITED

Mohammad Ali Jinnah, Pakistan's founding father, realized the importance of financial intermediation while he was campaigning for the creation of a separate homeland for the Muslims of India. He persuaded the Habib family to establish a commercial bank that could serve the Indian Muslim community. His initiative resulted in the creation of Habib Bank in 1941, with HO in Bombay (now Mumbai), and fixed capital of 25,000 rupees. The bank played an important role in mobilizing funds from the Muslim community to finance the All-India Muslim League's campaign for the establishment of Pakistan. Habib Bank also played an important role in channeling relief funds to Muslims hurt in the communal riots and violence that preceded the departure of the British from India.HBL established operations in Pakistan in 1947 and moved its head office to Karachi. Our first international branch was established in Colombo, Sri Lanka in 1951 and Habib Bank Plaza was built in 1972 to commemorate the banks 25th Anniversary.

With a domestic market share of over 40%, HBL was nationalized in 1974 and it continued to dominate the commercial banking sector with a major market 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 HBL
On December 29, 2003 Pakistan's Privatization Commission announced that the Government of Pakistan had formally granted the Aga Khan Fund for Economic Development (AKFED) rights to 51% of the shareholding in HBL, against an investment of PKR 22.409 billion (USD 389 million). On February 26, 2004, management control was handed over to AKFED. The Board of Directors was reconstituted to have four AKFED nominees, including the Chairman and the President/CEO and three Government of Pakistan nominees. It was HBL that introduced products such as Credit Cards, ATMs, Travelers Cheques, etc., to the Pakistani market. Today, Habib Bank is truly the bank of the people, providing its customers convenience and satisfaction all over the world. HBL plays a central role in Pakistan's financial and economic development.

BRAND, VISION, MISSION & VALUES

BRAND
Our brand identity is the outward expression of what we stand for as an organization. This is summarized in our vision, mission and is supported by our values

VISION
Enabling people to advance with confidence and success

MISSION
To make our customers prosper, our staff excel and create value for shareholders

AWARDS
2010:
'HBL wins Best Emerging Market Banks award in Pakistan for 2010'

2009:
'The Best Emerging Market Bank in Pakistan'
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HBL among Top 500 Global Financial Brands

2008:
'Best Bank In Pakistan' 'Most Innovative Global Trade Finance' 'Buzziest Brands'

VALUES OF HBL
EXCELLENCE:
This is at the core of everything they do. The markets in which HBL operates are becoming increasingly competitive, giving customers an abundance of choice. Only through being the very best - in terms of the service offer, products and premises - can HBL hope to be successful and grow.

INTEGRITY :
HBL is the leading bank in Pakistan and our success depends upon trust. Customers - and society in general - expect to possess and steadfastly adhere to high moral principles and professional standards.

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 CUSTOMER FOCUS:
We understand fully the needs of our customers and adapt our products and services to meet these. We always strive to put the satisfaction of our customers first.

MERITOCRACY:
We believe in giving opportunities and advantages to our employees on the basis of their ability. We believe in rewarding achievement and in providing first-class career opportunities for all.

PROGRESSIVENESS:
We believe in the advancement of society through the adoption of enlightened working practices, innovative new products and processes, and a spirit of enterprise.

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CHAIRMAN OF HABIB BANK LIMITED

Sultan Ali Allana is the Chairman of Habib Bank Ltd (HBL), since the bank was privatized in February 2004. Prior to taking this position, Mr. Allana was the Chief Operating Officer of NIB Bank and a Director and founder member of Global Securities Ltd. Mr. Allana has 27 years of banking experience.

Mr. Allana also serves as a Director on the board of the Aga Khan Fund for Economic Development (AKFED) and is the Head of the Financial Institutions Group that is responsible for the oversight of AKFED investments in Commercial Banks, Non-Banking Financial Institutions and Insurance companies located in Pakistan, India, Bangladesh, Central Asia and in East Africa.

PRESIDENT&C.E.O

Mr. Nauman K. Dar was appointed President and Chief Executive Officer of Habib Bank Limited on September 29, 2012. Mr. Dar joined the Bank in March 2003 as Chief Executive Officer of Habib Allied International Bank plc, UK. Prior to being appointed as President he was Head of International Banking since January 2006 and Head of Corporate and Investment Banking since December 2010.

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MANAGEMENT FORUM
Nauman K. Dar President and CEO Abid sattar Head-Global Operations & Learning and Development Jamil Iqbal Chief Compliance Officer Salim Amlani Chief Internal Auditor Aslam Gadit Head-Remedial Assets M. Salahuddin Manzoor Global Treasurer Mubashar Maqbool Head-Commercial & Retail Lending Faiq Sadiq Head-Payment Service Abdur Rashid Awan Business Head-Semi Urban Areas Aman Aziz Siddiqui RGM-Gulf (UAE, Oman, Bahrain) Muhammad Ali Chief Representative and Retail Head-North Sima Kamil Head-Retail & Consumer Banking Ayaz Ahmed Chief Financial Officer Rizwan Haider Chief Risk Officer
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Mudassir Khan Chief Information Officer Nausheen Ahmed Company Secretary & Head-Legal Aly Mustansir Head-Marketing & Brand Management Dr.Razi Azmat Head Human Resources Mirza Saleem Baig Head-Islamic Banking Tulu Islam GM-Branch & Trade Operations Shahid Fakhruddin GM-International & Market Risk mang.

ORGANIZATIONAL CHART (DESIGNATIONS)

Chairman President & CEO Member Management Committee Group Head General Manager Deputy General Manager Band II Deputy General manager Band I Senior Manager Band II Senior Manager Band I Manager Band II Manager Band I Assistant Manager Band II Assistant Manager Band I Officer Band II Officer Band I Assistant

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HUMAN RESOURCE POLICY OF HABIB BANK

ORGANIZATIONAL CULTURE
HBL fosters a work environment where employees can realize their potential whether locally or in the international arena. Thus, we enable our employees to achieve their professional goals while keeping in synch with the banks overall objectives At HBL management have created a challenging environment that encourages creativity and commitment. In their pursuit of excellence, they are focused on attracting, developing and retaining the best talent in the marketplace. Our dynamic culture offers diverse growth opportunities across Pakistan and in 25 countries around the world

REQUIREMENTS OF HBL
HBL empowers the employees to explore their highest potential, work in areas they are passionate about, build specialist knowledge, hone their expertise and more.

Entry Level Programs Employees can achieve their highest potential and build their knowledge. Experienced Professionals HBL values the skill, experience and expertise an employee bring.

HBL recruits experienced professionals in all areas of the bank and encourage the creation and pursuit of innovative ideas.HBL dynamic work environment offers diverse opportunities to stimulate ongoing employee needs and supports career enhancement opportunities.
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RECRUITMENT
HBL proud of its ability to nurture individuals and empower them to hone their talents. Organizational size gives bank the unique ability to provide fast growth and significant responsibility early on in a career with multiple avenues to reach the top. As part of HBLs human resource strategy, employer visits various universities across the country to induct & groom fresh business graduates every year. Enthusiastic and talented youth form the backbone of our banking operations and are nurtured to become future leaders at HBL. To attract the best young talent, resourcing department employs a pro-active strategy. Bank actively participate in campus seminars by giving presentations that highlight HBLs background, vision, mission, values, recruitment & selection process, future career prospects and overall business strategies. Banks hires fresh talent on a permanent basis and offers a wide range of career opportunities across all functions, including Finance, Marketing, Operations, Information Technology and Human Resources.

BENEFITS OF WORKING AT HBL

At HBL growth is not a function of time but rather of performance. As employees performance improves, the role that they play within the organization will accelerate to reflect their input.

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SELECTION PROCESS

The diagram above represents the process on which the bank bases its selection. This gives an overview to potential candidates as to the steps involved in becoming a part of the HBL team.

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PERFORMANCE MANAGEMENT
HBLs performance management and reward systems ensure that goals are met in an effective and efficient manner. HBL defines a clear path for staff to contribute to the organizations overall goals, peppered with regular reviews and feedback to help you gauge their progress.

COMPENSATION&BENEFITS
Compensation is a systematic approach to providing monetary value to employees in exchange for work performed. Compensation may achieve several purposes assisting in recruitment, job performance, and job-satisfaction.

Compensation is a tool used by management for a variety of purposes to further the existence of the company. Compensation may be adjusted according the business needs, goals, and available resources.

HBL focus is on attracting, developing and retaining the best in the business by offering market driven compensation and benefits packages. HBL compensation and benefits strategy combines the need to maintain a high performance culture along with market competitiveness. Annual benchmarking exercises are conducted to stay abreast with industry standards.

CODE OF ETHICS
It is the policy of Habib bank limited to conduct the business of the bank in full compliance with the laws, rules and regulations of the community in which it operates and to adhere to the highest
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ethical standards. To these ends employees are expected and directed to manage the business of the bank with: The highest ethical standards of integrity and candor in conformity with the code of ethics & business conduct. Due diligence and proficiency in all business activities. Compliance of all legal and regulatory requirements. A manner that no disfavor will reflect on the bank, both on and off the job

OBSERVATION OF CODE OF ETHICS:

Habib bank expects its employees to have integrity, honesty and the highest moral principles. The bank does not intend to attempt any control over the private lives of its people or to say how these lives are to be lived. The bank does not tolerate any conduct, which might be considered as detrimental to the reputation of the bank. Every employee is to abide by the rules and regulations of the bank and should strictly observe, comply with and obey all the orders.

MAINTENANCE OF OFFICE DECORUM:

All the employees are obligated to comply with the office work timings and ensure that work commitments are not disrupted.

Employees are required to maintain proper dress code (office attire) and appear well groomed & presentable all the time. Livery staff should be in their proper uniforms during office hours.

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Employees are to observe high standards of behavior/ attitude that include positive attitude/ body language, politeness & optimistic approach. Clumsy/ abnormal behavior/ short- temperament should be avoided at all times. Employees are responsible for ensuring their own work area.

CONFIDENTIALITY:
Confidential information about Habib banks business or business plans, products and services, marketing methods, technology or systems must never be disclosed to a third party except pursuant to a statute or regulations, or a valid court order. The bank owes a strict suttee of confidentiality to their customers. Employees are not to disclose to any third party particulars of the identity or financial, business or personal affairs of a customer, unless:

The customer has given prior written consent. Disclosure is compelled by a court or statutory authority of Competent jurisdiction. Disclosure is compelled by law, due to money laundering, or by Regulatory requirements. Disclosure is necessary to protect the banks interest, for example Disclosure to the police in case of suspected fraud

KEY PRINCIPLES:

The identity of a customer beginning a business relationship or conducting a single transaction should be established from official or other reliable identifying documents. The golden rule is to know your customers.
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Business units must keep record of customer identification for at least five years after the account is closed and of transactions for at least five years after their completion, or longer if the local law requires.

If business units suspect that funds stem from money laundering, they should promptly report those suspicions to the competent authorities and record the circumstances in writing.

Business units should not forewarn their customers when information relating to them is being reported to the competent authorities.

When a business unit reports its suspicions to the competent authorities, it should comply with their instructions.

All employees are responsible for safeguarding Banks and customers tangible and intangible assets including cash, securities, business plans, customer information and physical property and services.

Copying, selling, using and distributing information, software and other forms of intellectual property in violation of license agreements are prohibited. The use of email, telephone, fax and computers are primarily for business purposes.

Habib bank limited is an equal opportunity employer in hiring and promotion practices, benefits and wages. The bank will not tolerate discrimination against any person on the basis of race, religion, color, gender, age, citizenship, disability or any other basis prohibited by law in recruiting, hiring, placement, promotion, or any other condition of employment.

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While there is no prohibition against the employment of close relatives, the integrity of the personnel process must be maintained. Therefore, no one shall serve on a committee; make personal recommendations or decisions, influence any person making decisions such as appointment, retention, transfer, advancement or promotion affecting a close relative.

ACTS OF MISCONDUCT:

Theft, fraud, dishonesty with business or property of the bank or any other organization. Falsification of employment documents/ data to obtain employment. Tampering the office records. Negligence or improper conduct leading to damage of bank-owned property or damage to the reputation of the bank. Conviction of a criminal offence within or outside the office. Violation of safety or health rules. Smoking in prohibited areas. Spitting within banks premises. Unauthorized absence from duty. Illegal strike or go slow tactics.

Misuse of official stamps/ letterheads/ telephones/ computers & other items. The bank, at its sole discretion, shall determine what act or omission constitutes misconduct, breach of trust or negligence of duty.

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INDIVIDUAL CUSTOMERS

With a customer base of 5 million and a network of more than 1,450 branches in Pakistan, HBL is the largest private bank in the country. HBL network means that they are geographically closer to their customers than any other bank. This gives them the insights needed to provide a variety of products that directly reflect customer needs.

HBL caters to all market segments, offering products that are as diverse as the people they service. They remain resolute in their commitment to provide products that are competitive and services that are exemplary.

PRODUCTS OFFERED BY HBL

FOR INDIVIDUAL CUSTOMERS:

Credit Cards Home Loan Personal Loan Deposit Accounts Banc Assurance Debit Card Phone Banking Fast Transfer Mutual Funds Salary Plus
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1-CAR FINANCING
CAR LOAN
HBL Car Loan helps to get preferred car through a simple and hassle-free process, backed by superior service and support. Now customer can drive a car he always wanted.

FEATURES:
Choice of used, new local/imported and reconditioned imported car. Repayment options ranging upto 7 years Up to 85% of financing for the car of choice. Insurance at all times for complete peace of mind and security. Round the clock support available through HBL Phone Banking; customer can place requests and queries, track the status of his repayment/loan account and avail other value-added services through HBL Phone Banking.

Eligibility Criteria Salaried Individuals Self-Employed Business persons/ Professionals Citizenship Age Minimum monthly income
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Pakistani 22-60 years Rs. 20,000

Pakistani 22-70 years Rs. 25,000

2-CREDIT CARDS
FEATURES: Security:
Customers cannot lose cash if they dont carry it! In the event that their card gets stolen/ lost, they may call HBL Phone Banking to have their card blocked immediately.

Convenience:
SMS alerts Customers receive SMS alerts for all HBL Credit Card transactions. 24/7 access to HBL Phone Banking Statement by email : To receive monthly billing statement via email, enroll by calling

HBL Phone Banking:

Statement by fax Internet banking : Customers can use facility of internet banking if they have internet service with them Log on to HBL Internet Banking to make HBL Credit Card payments or to view monthly billing statements. Mobile top-ups : Customers can use HBL Credit Card to recharge prepaid mobile connection.

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Utility bill payments:

Customers Pay utility bills through any HBL ATM and charge it on HBL Credit Card.

Internet shopping :
Customers can shop from a choice of online merchants from the comfort of customers.

Banker's Cheque service :

Customers can make childs school fee, hospital bill or utility bill payments with ease. Through this service, HBL will issue a Banker's Cheque in the name of the specified institution on its customers behalf.

Insurance :
Credit Shelter: The outstanding balance on the card will be covered under the following events: Cardholder's death Permanent/temporary disability

Credit Card Shelter:

The outstanding balance on the card and amount equivalent to the credit limit will be covered under the following events: Cardholder's death Permanent disability

Triple Health Cash Plan:

Customer receives cash daily in case of hospitalization due to illness or accidents. Key features include 20% no claim bonus every year
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Insurance claims in Pakistan for hospitalization anywhere in the world Coverage for spouse and children as well as parents and siblings

INSURANCE PLANS

Daily Cash Coverage (for up to 365 days) Classic Plan Illness/bodily injury benefit Heart attack benefit Intensive Care Unit benefit 1,500 3,200 4,200 Premier Plan 2,400 4,200 6,500

TERMS & CONDITIONS OF CREDIT CARD

Gold Card Particulars Green Card Rupees Minimum gross salary requirements 50,000 180,000 Salaried individuals Self-employed business persons/professionals Rupees 150,000 500,000 Credit limit range Minimum Maximum Rupees 20,000 149,000 15,000 25,000 Rupees

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3-HOME LOAN
HBL Home Loan offers financing options to purchase a new house or renovate an existing house. For details regarding available financing options description of plan will help the customer.

DESCRIPTION OF PLAN
Outright Purchase 3 years to 20 years Rs. 300,000 Rs. 15,000,000 85% Maximum financing amount (as % of appraised value of the property) 5 years Property lease (years remaining at the time of loan maturity) Borne by the Bank Primary applicant and co-borrower Life insurance (through HBL by the insurance company on HBLs panel)
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Descriptors

Home Improvement/ Renovation

Loan tenure

3 years to 20 years

Loan amount

Rs. 300,000 - Rs. 5,000,000

70%

5 years

Property insurance

Borne by the Bank

Primary applicant and coborrower

4-PERSONAL LOANS
From quality education to a grand wedding to personal well-being, HBL Personal Loan helps customer to fulfill his financing needs. Get hard cash the easy way with HBL Personal Loan.

Features and benefits:

Processing fee on approval only Repayment tenures from 12 to 60 months Loan amount ranging from Rs. 25,000 to Rs. 2,000,000 24/7 access to HBL PhoneBanking Top-up facility available after every 12 months Free life insurance

Basic criteria and documentation:

The applicant should be 21 years or more at the time of loan application and 61 years or less at the time of loan maturity. Requisite documentation is listed below:

Verified original copy of CNIC Legal Agreement Other documents required (According to segment)

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5-BANCASSURANCE
HBL and New Jubilee Life Insurance Company Limited (NJLI) introduce Amaan (Retirement Plan ) and Tabeer (Child Education & Marriage). These products have been designed keeping HBLs customer base as the focus and will provide life insurance along with an investment option.

AMAAN
Amaan is a pension plan that provides opportunity for growth through investment in a balanced portfolio with post-retirement income benefits. The plan covers life insurance and gives attractive returns on investment to its customers.

ELIGIBILITY CRITERIA
Eligible age Minimum payment Minimum age to exercise pension option Partial withdrawls Benefit on accidental death Allowed Rs. 800,000 will be paid along with other benefits Benefit on death Rs. 200,000 will be paid along with other benefits 18 60 years Rs. 2,000 per month 55 years

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TABEER CHILD EDUCTAION & MARRIAGE PLAN

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

ELIGIBILITY CRITERIA
Eligible age Minimum payment Benefit on accidental death 18 60 years Rs. 3,000 per month In addition to other benefits, Rs. 500,000 will be paid for the marriage of the nominated female child, given that female child is at least 18 years of age Partial withdrawals Maturity benefits Allowed Two options available: 1. Policy can be cashed in total 2. Funds are paid back as per policyholder's designated time period

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6-DEBIT CARD

HBL Visa Debit Card allows customers to pay for their purchases directly from their bank account. He doesnt have to carry cash and his monthly statement provides him with a complete record of all his transactions so he can manage his expenses with ease.

FEATURES:

No Interest Ease & Security No Liability International Recognition& Acceptability Spending Limits 24 hour Customer Service

No Interest :
HBL Visa Debit Card is the perfect way of paying for the purchases as it gives access to the exact amount of money customers need, as and when they need it. There is no interest or credit on payments because they spend from the money available in their personal HBL Account.

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Ease & Security :

HBL Visa Debit Card offers ease and convenience because customers do not have to visit an ATM to withdraw cash. Paying with the HBL Debit card is safe because it eliminates the need to carry cash. A single swipe automatically debits the exact purchase amount from the personal HBL account.

International Recognition & Acceptability:

HBL Debit Card is accepted at over 50,000 merchants in Pakistan and over 30 million merchants worldwide for your daily purchase. With access to over 3,700 ATMs nationwide and 1.4 million ATMs worldwide, your HBL Debit Card helps customers do much more than just cash withdrawal, e.g. funds transfer mobile bill payment, utility bill payment and generation of mini statement.

Spending limits:
The daily spending limit at shops and outlets on HBL Visa Debit Card is Rs. 100,000. (Please note that these figures are subject to the balance available in the account).

Global customer assistance service:

When traveling overseas, HBL Visa Debit cardholders receive global assistance 24 hours a day, 7 days a week from the local Visa Global Customer Assistance Service.

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7-DEPOSIT ACCOUNTS
A deposit account is a savings account, current account, or other type of bank account, at a banking institution that allows customers money to be deposited and withdrawn by the account holder. These transactions are recorded on the bank's books, and the resulting balance is recorded as a liability for the bank and represents the amount owed by the bank to the customer. Some banks charge a fee for this service, while others may pay the customer interest on the funds deposited.

1: TERM ACCOUNTS
Customers can invest their savings in HBL term deposit accounts for a fixed duration and earn profit while keeping their saving secure. HBL Advantage Account Investment Plus Deposit

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HBL ADVANTAGE ACCOUNT

Followings are some major features of advantage account:

Multiple options for tenure and profit payout Loan facility up to 90% of investment Minimum investment of Rs. 25,000 Withdrawal at end of fixed term

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 Terms and conditions apply. These are expected rates and can change. All profits payable are subject to zakat and government levies

CURRENT ACCOUNTS HBL BUSINESS VALUE ACCOUNT

Unique transactional account for Businessmen Up to 5.35% profit per annum* Profit calculated daily, paid every quarter
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No minimum balance requirement Nominal monthly maintenance charge of Rs. 50 HBL Debit Card 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 Phone Banking.

BASIC BANKING ACCOUNT (BBA)

Can be opened with only Rs. 1,000 No minimum balance requirement Up to 2 withdrawal and 2 deposit transactions free every month Unlimited withdrawals through HBL Debit Card Non-profit bearin

*Terms and conditions apply. These are expected rates and can change. All profits payable are subject to Zakat and Government Levies

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FREEDOM ACCOUNT
Customers can use money as they please with HBL Freedom Account. Rest free from worries and expand their business with unmatched accessibility across Pakistan.

On a monthly balance of Rs. 25,000 or more, customers avail a host of free services including:

Free cash withdrawal & deposit transactions through any HBL branch Free online funds transfer transactions Free Bankers 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 Phone banking.

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SAVING ACCOUNTS
Following saving account are offered by the bank to its valued customers. HBL Value Account PLS Savings Account Remittance Munafa Plus Savings Account Daily Munafa Account Daily Progressive Account

HBL VALUE ACCOUNT

Features : 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 month Special account for receiving foreign remittances 5.12% profit per annum Profit paid every month Minimum balance of Rs. 20,000

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PLS SAVINGS ACCOUNT

It is opened on proper introduction, and submission of required documents along with an initial deposit prescribed from time to time. There is presently no upper limit of deposits and number of withdrawals that can be made by cheques and no restriction on amount that can be withdrawn from saving accounts. The proportion of profit & loss shall be determined by the bank and the banks decision should be final and binding on the depositors/accountholders.

Features:
6.09% profit per annum Profit paid bi-annually HBL Debit Card and Inter Branch Transaction System facilities Funds transfer to any bank through HBL Phone Banking No minimum balance required Unlimited transactions

REMITTANCE MUNAFA PLUS SAVINGS ACCOUNT

Special account for receiving foreign remittances 6.17% profit per annum Profit paid every month Minimum balance of Rs. 20,000

DAILY MUNAFA ACCOUNT

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Profit calculated daily, paid every month Up to 6.54% profit per annum

HBL DebitCard and Inter Branch Transaction System (IBTS) facilities Funds transfer to any bank through HBL PhoneBanking Minimum balance of Rs. 20,000

DAILY PROGRESSIVE ACCOUNT

Unique transactional account for Institutions Profit calculated daily, paid every month Up to 6.70% profit per annum* Inter Branch Transaction System (IBTS) facility Funds transfer to any bank through HBL PhoneBanking Minimum balance of Rs. 20,000

FOREIGN CURRENCY ACCOUNTS

HBL offers Foreign Currency Accounts in multiple currencies as savings and term accounts .

FC-SB

HYFFD (High Yield Foreign Currency Fixed Deposit)

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FC-SB
Savings Account offered in 3 currencies, USD (US dollar), EUR (Euros) and GBP (UK pound) Tiered product, with rates depending on choice of currency To earn profit, minimum balance should be 1000 USD, EUR or GBP Interest is payable on a quarterly basis

HYFFD (High Yield Foreign Currency Fixed Deposit)

Available in 1 month, 2 month, 3 month, 6 month and 12 Month in USD, EUR and GBP Tiered product, with rates depending on choice of currency and term Profit paid on maturity only. No interim interest is payable.

Products and Services Collections: Easy Collect

Standing Instruction via Debit Authority (SIDA) Outward Bills for Collection (OBC)

Payments
Salaries / Expenses Online Cheque Payments (Vendor Payments) Utility Bill Payments

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E -Banking/Internet Banking
Electronic MIS reporting through email Viewing of account statement through E-Banking service Dedicated Customer Support Officers for Query Handling and Reconciliation

8-HBL iD
It is not about opening a bank account, earning interest, getting a debit card, using ATMs or keeping money safe, although all of that does sound pretty cool. No - with HBL iD customers begin to do something far more important. They begin to learn how to manage customers finance ,learn how to spend and how to save, what makes their money last longer and what techniques can help their money go further so that they can finally buy that new mobile or laptop.

FEATURES OF HBL ID:

HBL iD gets customers ready for the real world. Because the real world starts now. Customers can open an account with any amount and enjoy the flexibility of no minimum balance. Stop carrying cash and start carrying an HBL Debit Card instead. This will allow the customers to make purchases anywhere that VISA is accepted. Enjoy discounts of up to 20% at select restaurants when customer pays with HBL Debit Card. Customers can withdraw cash from any HBL ATM at any time so HBL Debit Card is great for any cash emergency.

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9-HBL MONEYCLUB
Here's mission! Become an HBL MoneyClub member and learn the power of savings today. Explore www.hblmoneyclub.com and participate in this exciting mission that awaits.

Here's what customers do:

Open an account with as little as Rs. 1 Earn 6.17% profit per annum (annualised rate of expected return on minimum balance) Earn profit on savings every month

Earn bonus profit of 2.5% per annum by simply saving more, on a minimum deposit of Rs. 100 and make no withdrawals throughout the month Customer can get a free mission box and an HBL Debit Card when customer opens his account (ages 6 to 17) Apart from saving rewards child will receive a mission box, which will have a Visa Debit Card for free, a wrist wallet and a mission bag, which will accompany on customers saving missions.

Customer need to be below the age of 18 Customer need to open his account under parent or court appointed guardian Customer need to get his application signed by the parent or guardian Get an HBL Debit Card and make purchases. Call HBL Phone Banking and manage money wherever customers are. Access HBL Internet Banking to check remaining balance.

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Documentations:
Parent/Guardian Computerized National Identity Card (CNIC) Minor's B-Form/Computerized Registration Certificate. Proof of Guardian relationship with Minor through Birth Certificate, Computerized Registration Certificate or Court Order.

10-HBL FAST TRANSFER

HBL Fast Transfer lets customers receive their remittance instantly and absolutely free. HBL Pakistans largest banking network - provides unmatched convenience and a confirmation SMS to inform customers that their money is ready for collection from UAE, Bahrain and USA

HBL FastTransfer offers three modes for receiving money in Pakistan: 1. Fast Cash Receive up to PKR 500,000 for instant collection from any HBL Branch.

2. Fast Direct Credit Instantly receive money in any HBL account.

3. Fast Draft Non HBL account holders can get their account credited the same day.

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11-HBL PERSONAL LOAN

From quality education to a grand wedding to personal well-being, HBL Personal Loan helps the customers to fulfill their financing needs. Get hard cash the easy way with HBL Personal Loan.

Features and benefits : Processing fee on approval only Repayment tenures from 12 to 60 months

Loan amount ranging from Rs. 25,000 to Rs. 2,000,000 Top-up facility available after every 12 months life insurance

12-HBL SALARY PLUS

Salary Plus is a facility which provides customers with freedom to meet their immediate expenses with ease. Customers can use this facility whenever they need and pay back at their convenience. HBL Salary Plus provides customer with an overdraft facility on HBL Salary account that allows you to draw funds against assigned limit.

Features:
Markup charged on utilization only Hassle free payment Up-to 100% overdraft withdrawal via existing HBL Debit Card or cheque book and at merchant outlets Access to over 4,500 ATMs nationwide and 2.3 million ATMs worldwide via ATM
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Access to HBL Internet Banking, HBL Phone Banking and HBL Mobile Banking Annual renewal of facility subject to meeting requirements No hidden costs Processing fee charged on approval only

Eligibility:
Customers are eligible to apply for HBL Salary Plus if they have a net monthly salary of PKR 12,000 or more being transferred to their HBL account and they fall in the age bracket of 21-60 years or retirement age (whichever is lower).

Documentation Required:
Verified copy of original CNIC Either of last two months' Salary Slip (original or attested)

Letter from Employer Bank statement showing salary credits which will be generated by HBL for credit assessment purpose.

Schedule of Charges:
Processing fee of 1% of overdraft limit or PKR 2,500 whichever is higher Annual renewal fee of 1% of overdraft limit or PKR 2,500 whichever is higher

The interest rate varies according to the classification of your application, with a maximum of 36% per annum. Account maintenance and other charges as per current Schedule of Bank Charges

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ISLAMIC BANKING
Islamic Banking is a growing market segment that offers attractive opportunities to potential and existing customers. At HBL, Islamic Banking offers Shariah compliant products and services to meet the short and long term requirements of business, trade and industry.

SHARIA COMPLIANCE
HBL Islamic Banking products are in strict compliance with the tenets of Shariah and bear Shariah Compliance Certification from an independent Shariah Advisor. HBL Shariah Advisor has in depth experience in Shariah rulings (Fatawa) and teachings at different forums with qualifications of Dars-e-Nizami, M.A and L.L.B. Bank also have a Shariah Scholar, as member of our Shariah Supervisory Committee to ensure a sound Shariah Compliance mechanism, giving prompt responses to customers needs and access to Shariah knowledge.

PRODUCTS OFFERED UNDER SHARIAH COPLIANCE

Ijarah(Leasing)

Medium to long term facility for vehicles, plant and machinery leased out to the client on rental basis

Diminishing Musharaka

Medium to long term facility for vehicles, plant and machinery on joint ownership basis

Murabaha

Local and Import facilities for purchase of raw materials, semi finished and finished goods, stores or spares

Trade Services

Letter of Credit Facility, Collection of Foreign Bills, Collection of Local Bills, Letter of Guarantees
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ISLAMIC DEPOSIT ACCOUNTS 1-HBL BASIC BANKING ACCOUNT (BBA)

Open this account with only PKR 1,000 No minimum balance requirement 2 free withdrawals and 2 deposit transactions every month Non-profit bearing

2-HBL CURRENT ACCOUNT

Offers the flexibility of operating account in PKR, USD, EUR, GBP Non-profit bearing

3-HBL PLS ACCOUNT

Customer can open this account in PKR, USD, EUR, GBP Profit paid on the basis of Mudaraba on biannual basis Profit rate dependent on currency Minimum balance is dependent on currency

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4-HBL AL-SAMARAT ACCOUNT

Multiple options for profit payout and tenures on the basis of Mudaraba Minimum investment of PKR 25,000 Withdrawal at the end of the fixed term

5-HBL AL-MUKHTAR ACCOUNT

Free cash withdrawal & deposit transactions through any HBL branch Free online funds transfer

Free Banker's Cheques Free HBL cheque deposit transactions at any HBL branch Free cheque books Free duplicate account statements

Free HBL Debit Card (for individuals and sole proprietors) Free SMS alerts on transactions above PKR 25,000 (for individuals and sole proprietors)

6-HBL AL-IRTAFA ACCOUNT

Facilitates businesses and institutions of all sizes Minimum balance requirement of PKR 500,000 Multiple options for profit payout Profit payout on monthly basis
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TRADE SERVICES
Letter of Credit Facility Collection of Foreign Bills Collection of Local Bills Letter of Guarantees

VALUE ADDED SERVICES

ATM/Debit Card Facility Foreign/Inland Remittances Utility Bills Collection HBL Internet Banking HBL Phone Banking

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FOR BUSINESS CUSTOMERS

1-CORPORATE BANKING
HBL Corporate Banking Group comprises a seasoned team of Relationship Managers (RMs) to meet the demanding service standards of large corporations. A long history of financing and nurturing relationships in Pakistan has given HBL a unique insight, enabling the bank to provide timely and effective financial solutions for our customers to meet the growing challenges of a global economy.

For corporate customer, with a turnover of at least PKR 300 million, bank has a range of solutions designed to help customers with their banking needs. HBL RMs have the expertise customers need to create tailored financial solutions catering to the specific requirements of the business. Whether establishing a new venture or expanding an existing business, our team understands customers banking needs and works closely with them to realize their goals.

HBL provides the following services to meet 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
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Centers:
Corporate Center, Karachi

Export Processing Zone, Karachi PIA Branch, Karachi Karachi Port Trust, Karachi Steel Mills, Karachi Stock Exchange, Karachi

2-COMMERCIAL BANKING
HBLs Commercial Banking Group targets medium sized companies with a turnover of at least PKR 50 million. Our business units are located in Karachi, Lahore, Faisalabad, Sialkot, Gujranwala and Peshawar. Each unit is dedicated to service business clusters located within these cities. HBL have the ability and the resources to meet the needs of customers business with their proactive, responsive and experienced Relationship Managers; they are committed to understanding business.

HBL offers financing for the following: Working Capital Procurement of Inventory Receivables Procurement of Machinery Expansion of production facilities Import of raw materials

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3-SME BANKING FAIDA HAI TO BUSINESS HAI

HBL Business Faida brings the perfect package to manage the daily business requirements. By combining all the relevant features into one, Customers would be able to avail a huge variety of banking products designed just for their business.

A flexible and convenient account to manage the payments and receipts of the business Running Finance to help manage the daily cash flows Demand Finance to help expand the business, renovating business premises or buying new equipment Assure payments from the customers in Pakistan or overseas through trade finance products.

Customers can avail the following HBL Business Faida products:

HBL Freedom Account HBL Easy Loan HBL Small Business Finance HBL Trade Power Value Added Services

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4-INVESTMENT BANKING
HBL offers full-service Investment Banking capabilities to its clientele. This year alone, HBL has closed over thirty transactions with a cumulative worth of over USD 2 billion. This is a testament to the out-of-box thinking and the innovative products we bring to our customers. The Investment Banking Group functions in three specialist business areas: Project Finance, Debt Capital Markets & Syndications and Equity Capital Markets & Advisory.

PROJECT FINANCE
The bulk of HBLs project finance practice revolves around the power sector. Prior to the power policy of 2002, HBL actively pioneered Project Finance in Pakistan through the funding of a gasfired co-generation plant (94 Megawatts of power and desalination of 3 million gallons per day). Subsequent to the 2002 power policy,

HBL continues to play a fervent role in the sector and is the only Investment Bank that was Lead Advisor to all IPP transactions that achieved financial close. In the fertilizer sector, HBL financed the largest local currency financing in Pakistan, worth PKR 23 billion, as well as a green field venture in the telecom sector worth PKR 12 billions.

DEBT CAPITAL MARKET

Depending on the requirements of its customers, HBL offers a variety of products, including syndications, securitizations, privately placed and listed TFCs, term finance facilities,

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commercial papers, etc. HBL played the lead role in a number of significant debt transactions, including PKR 15.14

billion TFC issue (the largest privately placed issue in Pakistan), the first bond offering for any microfinance institution in all of Asia, credit enhancement for a rapidly growing company in the consumer durables sector and numerous tier-2 capital transactions for commercial banks.

2-EQUITY AND ADVISORY

HBL offers a breadth of equity and advisory products including innovative capital raising techniques, restructurings, public and private equity placements and mergers & acquisitions. The HBL team played a pivotal role across several sectors, including energy, agriculture, consumer products, fertilizers, etc. for raising various forms of equity and quasi-equity. Recently, HBL structured a convertible debt note with a built-in Put feature for a US-based provider of agriculture technology and dairy solutions a first of its kind transaction in Pakistan. HBL also provides valuation for a company in the food and beverages sector.

ZARAI BANKING
HBL Zarai Banking facilities are spread across the country and provide financing through more than 800 of our branches. HBLs presence in all agriculture belts of the country ensures easy access to farmers in rural areas.

HBL Zarai Banking provides loans to small-scale land owning farmers as well as large institutionalized and alliance based finance, enhancing agricultural harvest and, in turn, economic output of the country.
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PRODUCTS OF ZARAI BANKING

HBL Zarai Banking enables farmers to invest in premier quality seeds, fertilizers, pesticides, agricultural implements and non-farm setups through its various product programs.

Crop Inputs

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

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Farm Implements*

Finance available for purchase of farm implements & machinery like combined harvester, sprayers, ploughs, tube wells and other crop-related tools/implements

Tractors/Agricultural Vehicles

Finance available to individual farmers, self-employed tractor operators, providing the option to select vehicles from a range of different manufacturers

Livestock Finance available for feed, medicines, raw material, raising charges and other related activities

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Poultry

Finance available for all poultry related activities including poultry farm construction/equipment, hatchery plant & machinery, poultry feed, poultry medicines, composite feed production, poultry processing and other related activities

Fish Farming Finance available for inland fish farms as well as deep-sea fishing. This includes procurement of boat, fish locating equipment, nets & ropes, ice maker, fish farm water solution, hatchery construction/equipment, purchase of medicines / feed and other related activities

Group Lending Joint finance facility for a group of farmers with small land holdings for working capital requirement

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PHONE BANKING
Habib bank is just a phone call away. Customers can now call HBL Phone Banking and save a trip to the branch. The query will be resolved in a single telephone call from anywhere and at anytime.

Deposit Accounts HBL Car To Car HBL Car Loan Mobile phone prepaid vouchers

T-PIN Generation :
Customers TPIN (Telephone Personal Identification Number) is generated the first time they call and they can use it as their password for verification purposes, self-service banking through IVR and additional services through our Phone Banking Officers. They can change the TPIN anytime they like.

HBL Phone Banking services for Deposit Account customers

Customers can use the Interactive Voice Response (IVR) system or talk to Phone Banking Officers to

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DIFFERENT SECTIONS OF BRANCH

ACCOUNT OPENING SECTION

Requirements for Opening an Account:
A copy of ID card of both introducer and customer Original ID for verification copies of student card for students and appointment letter from the Government employees If customer use thumbs impression then must give his 3 recent photographs. Next of kin: the customer must clear that who is responsible for the account in his absence. Customer must be present at the time of opening the account.

A) How to open an account:

There is a definite official procedure which is to be observed for opening a current or saving account with a Bank. These formalities in brief are as under:

I.

Formal Application:
The customer is to fill an "Account Opening Form. It is a official request by a customer to the bank to permit him to have and manage the current or saving account.

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II.

Obtaining Introduction:
The bank previous to opening an account obtains introduction of the customer from an old customer, responsible person etc

III.

Specimen Signature:
When the Banker is contented about the truthfulness of the customer, he agrees to open the account. The Banker then obtains the specimen signatures of the customer on the signature book or on card.

IV.

Minimum Initial Deposit:

In Pakistan the current account can be opened with a minimum balance of Rs. 500/- and PLS Saving Account with a minimum of Rs 100/- These amounts are also the minimum balances to be maintained by the account holders with the bank.

V.

Operating The Account:

When an account is opened in a Bank, the Banker gives to the customer Cheque Book with a view to operate it. After the paper work the information of the customer was entered in the automated system, MYSIS, which then gives the account number for that customer. 14 digit account number is allotted to HBL ac holders. The first four digits are the branch code where ac is going to be opened. Afterwards the next eight digits are customer account serial number and last two digits indicate the type of account.

VI.

CHEQUE BOOK:

It is a printed book of blank cheques provided by the bank to its customer for drawing money from their account. Different cheque books are available for the current and PLS account.
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Issuance of cheque book:

For issuance of cheque book of a new account, the customer first fills out the requisition slip and submit it to the relevant officer, who in turn will issue chequebook to the customer within 4-5 days or a week. The officer will enter the date, account title, number of leaves, cheque number from start to end, account numer and the signature of the applicant on the chequebook issuance register. The officer, in case of photo account (either having thumb impression or shaky signs) stamp is impressed written All the cheques to be signed in the presence of the bank officer(this stamp is impressed on the cheque books of those people who have shaky signs) Right or left thumb will be affixed in the presence of bank officer (This stamp in impressed on the cheque books of those people who use thumb impressions). And in case of Minors account, every cheque has a stamp impressed written The account will be operated by minor if even minor attains the age of majority.

B) Withdrawal from an Account:

Withdrawal is done through cheques supplied by the Bank. A new cheque book is issued only on receipts of the requisition slip attached to the cheque book issued earlier and this offered along with the . Cheque book is issued on prudence of the branch manager.

C) Transfer of an Account:
Account can be transferred to any other branches of Habib Bank Ltd., free of charge. If a shareholder wants to transfer his account, he presents his pass book individually or sends it to Bank and writes a request for the transfer of an account.

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D) Closing of an Account:
An account holder ready to close his account must present his pass book in order that withdrawals and the amount of interest due on the account is entered within and final balance stuck. This balance is then paid to the depositor and his proof of payment is taken, the pass book is canceled, unused cheque forms on hand are also surrendered at the same time. E) Secrecy: The confidentiality of depositors account is the responsibility of every official engaged in the Bank service.

IMPORTANT GENERAL RULES FOR ACCOUNT OPENING

No more than one category of account may be opened in any one name and in the same branch except joint account and account in the name of minor children in the capacity of guardian. Account of illiterate person/persons with shaky signatures will opened at the discretion of bank and will be required to complete an indemnity CD-50 form and provide photograph for identification. They will have to personally visit the branch for withdrawals and will have to sign or apply thumb impression in the presence of bank officer. Accounts of blind persons will preferably be opened in joint names with another person who can read and write. The account holders have to submit indemnity form CD-50 and blind person will have to personally visit the branch with person who can read write and see. The bank on its sole discretion will close the accounts of those persons whose average balance during the half year is less than prescribed limit and those that show NIL. A distinctive number will be allotted to every account that will be quoted in all correspondents relating to account and at the time of deposits or making withdrawals.

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Account holder can only withdraw from his account by presenting cheques supplied to him by the bank.

The account holder wishing to close an account must surrender the unused cheques if any to the bank in order to withdraw remaining balance and paying service charges for account closing. The account may be transferred from one branch to another branch free of charge,without effecting the profits. All the deposits and payments are governed by and subject to the laws in effect from time to ime in Pakistan. In case records of branch are burnt or destroyed due to fire, riot, act of God etc. or any other circumstances beyond the control of the bank, the onus of proof for maintenance of account with the branch and balance must be provided by the account holder.

Any change in the address should be immediately communicated to the bank.

CLEARING DEPARTMENT
Every Bank performs the paying and receiving functions. Cheques are collected which are drawn up to Banks for customers. Similarly the cheques drawn on Banks and deposited by Banks own customers for collection within the city is known as clearing The functions of receiving and paying is mostly done through the

clearing house. A clearing house can be defined as "A place where that representatives of all Bank get together to settle the receipts and payment of cheques drawn on each other" Clearing House provides the facility which can hardly be dispensed with especially, in case of crossed cheques. There are two main types:

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1. OUTWARD CLEARING:
It includes those cheques and other instruments which are sent by the Bank to the Banks for payment on behalf of its own clients. Cheques are sent to clearinghouse thorough local main branch. A delivery message from the local main branch comes to every branch at a fixed time to pick its outward clearing or outward returns as the case maybe.

Outward Clearing At Branch:

Account number of payee/endorsee is written on the back side of the cheques. The instrument and the paying in slips are separated The instruments are sorted I Bank-wise and branch wise. Schedules are prepared. Jotting of all the schedules are taken in the clearing House statement. Amount of the cheques in written in the "Delivered" and to pay column. After balancing the outward clearing, the pay in slips are released to C.D. department. After balancing, a transfer debit voucher is prepared The instrument, schedule. etc. are delivered to the messenger from the main branch.

2. INWARD CLEARING:
The cheques drawn are called inward clearing drawn on Habib Bank through its representatives .on the Bank presented by other Banks for payment It includes those cheques and other instruments of Pakistan branches which other Banks present at the clearing house.

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Inward clearing at the drawn branch:

Numbers of instruments noted in the schedules are verified immediately on receipt. The amount's of all the instruments are jotted down and totaled. If should be equal to the amount mentioned in schedule from the local main branch. The amounts are debarred to the relevant accounts if otherwise in order. The IBCO is prepared crediting the amount of the main branch. If there is any return, that is deducted from the total and IBCO prepared for the remaining amount.

TYPES OF CHEQUES COLLECTED AT BRANCH

TRANSFER CHEQUES:
These are the cheques which are collected and paid by same branch of HBLFor example Mr. Ali is a customer of HBL of CITY branch and draws a cheque in favor of Mr. Hussain who is also the customer of the same branch.

2. TRANSFER DELIVERY CHEQUES:

The cheques which are collected and paid by two different branches of a Bank situated in the same city. For example a person draws a cheque on HBL Main Branch Gujrat in favor of another person who maintains an account with HBL Circular road branch, Gujrat.

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3. CLEARING CHEQUES:

When the payee/endorse and the drawer of cheque maintains account with different Banks, the collection Bank in any one of the following methods: It can collect cash by sending its representative with the cheques to each of the paying Banks. It is not so much appropriate The Bank maintains an account with the paying Bank. The cheques can be exchanged by representative of the various Banks who meet at a fixed time and at a fixed place. This is the most efficient method of collection and paying cheques.

FUNCTIONS OF CLEARING SECTION IN A BRANCH

To accept transfer, transfer delivery and clearing cheques from the customer of the branch and to arrange for their collection.To arrange payment of cheques drawn on the branch and gives for collection to any other branch of H.B.L. or any other member or such member of local clearing house.

PROCEDURE FOR CLEARANCE OF CHEQUE

The customers are provided with the deposit slip, whenever the customer wants to deposit any cheque, he fills in the deposit slip himself and hands it over the counter along with the instrument.

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NIFT
National Institutional Facilitations Technologies (PVT) limited was established in 1997 by the banking giants of Pakistan, i.e. HBL, NBP, ABL, MCB. NIFT has the blessing and the support of the SBP. It has offices in all the major cities of Pakistan. NIFT facilitates the clearing of cheques between institutions locally (within the city). It is also referred to as the Automated Clearing House.

NIFT collects cheques, demand drafts, Pay orders, Travelers Cheques, etc. from all the branches of different banks within city through its carriers and send them to the branches on which these are drawn for clearing. After the branches approve the instruments drawn on them, NIFT prepares a sheet for each Branch showing the number for instruments and amount in its favor and drawn on it and sends it to each branch.

REMITTANCE SECTION
An inland remittance means a transfer of money payable at a certain place within the country. Inland remittances can beclassified as under: Within locality. Out side locality.

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WITHIN LOCALITY:
When a branch situated in Gujrat is required to send drafts to any other branch situated in the same city the process is known as within locality.

OUTSIDE LOCALITY:
Outside locality is an important type of inland remittances, which means the transfer of money payable outside the city.

BANKERS CHEQUE
It makes the customer to pay childs school fee, hospital bill or utility bill payments with ease. Through
this service, bank will issue a Banker's Cheque in the name of the specified institution on customers behalf. It is a combination of pay order, demand draft and pay slip. It means that all of the three instruments properties and functions are vested in banker cheque.

ONLINE TRANSFER
Transfer of funds online from one branch of the bank to another branch of the bank locally within the country. For outside the country SWIFT arrangements are utilized by the bank.

IMPORTANT TERMS & CONDITIONS FOR REMITTANCES

The bank accepts for transmission only and at the applicants risk. In case of online transfer, the remittance is being sent by the bank at customers entire risk and cost and that the bank or its agent cannot be held liable for any mistake, omission or delay etc which may arise in the transmission due to any reason beyond the control of the bank which may cause misinterpretation of the message at destination.
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All charges/commission outside Pakistan are for beneficiarys account unless specified. It is understood that customer will provide an indemnity duly acceptable to the bank for issuance of duplicate instrument, protecting bank against liability with respect to the lost, stolen or destroyed instrument.

Payment of remittance proceeds is subject to any exchange control or other restrictions, which may be imposed by the rules and regulations of the country where encashment is to be made. All the remittances are subject to schedule of charges which may be directly debited by the bank from the account of customer/relevant account/cash payment.

ACCOUNTS SECTION
Every Business organization deals in money matters. Bank also deals in money and more over since the money belong to the depositors therefore; it is of utmost importance to keep systematic and correct record. Further-more, the Banks are commercial institutions and its main objective is to earn profit, therefore, then record of all incomes and expenditures are kept correct and systematically.

In H.B.L. the responsibility for maintaining necessary accounting data and to keep up to date records In a systematic manner has been assigned to the Accounts Department.

The Branches of Bank perform their daily routine work and deal in money that belongs to depositors. Here account department hold great importance in banking, because it keeps all the accounting records properly.

The main functions of the account section of a branch are as follows: Balancing and maintenance of books. Preparation of statement.
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During the course of daily business of the branch, a number of cheques arepresented by customer for cash payment, though transfer, delivery and clearingcheques at the counter. Also a number of new accounts are opened and cash is deposited by the customers. A number of new vouchers are passed by the branch by debiting, one account and crediting another account .

So in order to ensure that during the day all the transactions have properly been recorded and they are complete in all respects and are recorded in proper books by the branch this recording is done on daily basis and maintained by account section. Balancing the cash book means that all the transactions have properly been recorded and there is no mistake in any of these vouchers. Arrangement of voucher. Preparation of supplementary. Preparation of summary. Agreement of total of the summary, with the total of transfer book.

The following are the important statements prepared by the account section: Balance sheet on daily basis Pak account on daily basis. Provisional income and expenditure statement on monthly basis.

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CREDIT OPERATIONS

INTRODUCTION
Management of the bank has made a central hub for credit operations.credit operations at branch level are not performed now a days in habib bank.In Gujrat main branch Narowali is performing credit operations. Credit committee sits at the branch. Every branch send its requisitions to that central hub branch. The function of credit department is to lend money in the form of clean advances, against promissory notes, as well as secured advances against tangible and marketable securities. The bankers prefer such securities that do not run the risk of general depreciation due to market fluctuations. Common Securities for the bankers advances are as under:-

1. Guarantees
When an application for advance cannot offer any tangible security, the banker may rely on personal guarantees to protect himself against loss on advances or overdraft to the applicant.

2. Mortgage
A mortgage is the transfer of an interest in specific immovable property for the purpose of security the payment of money advanced or to be advanced by way of loan, and existing or future debt, or the

performance of an engagement which may rise to a pecuniary liability. The transfer is called a mortgagor, the transferee a mortgage.
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3. Hypothecation
When property in the shape of goods is charged as security for a loan form the bank the ownership and possession is left with the borrower, the goods are said to be Hypothecated The essence of hypothecation is that neither the property in the goods not the possession of them are possession is left with the borrower, the goods are said to be Hypothecated, but the security is granted by means of letter of hypothecation, which usually provides for a bankers charge on the hypothecation goods.

Pledge
An asset that is transferred to a lender for the purpose of securing debt. The lender of the debt maintains possession of the pledged asset, but does not have ownership unless default occurs.

TYPES OF ADVANCES
a. Demand Finance (Packing Credit) Scheme introduced by State Bank of Pakistan for exporter of carpet, surgical instruments, at zero percent rate of interest. While banks provides at concessional rate of interest. b. Loan ordinary (Demand Finance to Students) c. Demand Finance (Staff) Loans are offered to the staff of the following four categories. House Building Loans against mortgage of property. Loan for purchasing vehicles. Loan equivalent to months salary.

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RUNNING FINANCE (Overdraft)

Running finance (old name overdrafts) are advances, which are generally, given to meet temporary requirements of the customers. A good customer use the banks running finance limit as a mean of protecting his credit in the market and as a line of security defense to meet his commitments.

SMALL LOANS
Loan is allowed to contractors clearing and forwarding agents.

AGRICULTURE LOANS
Loans 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 inputs ii. Tube wells iii. Live Stock Framing iv. Land improvement

INDUSTRIAL LOANS
Besides the short-term loans which play a part in working capital medium and long-term loans are also given to industrial sector for purchase of machinery and other capital nature good

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AS AN INTERN

INTRODUCTION & BUSINESS OF MY BRANCH

I worked for six weeks at Habib bank main branch Jalal Pur Jattan Gujrat as an intern. It is a branch located near the main bazaar of the town. Major customers of the bank are traders, merchants, oil pump owners and power looms owners. Main business of the people of the town is power looms and wool garments manufacturing. Agriculture is the main occupation here in this city.50 percent of labour force is at UAE, Saudi Arabia, Bahrain, Canada and UK. Remittances sent by the labourers from abroad are kept into their accounts are to their beneficiaries account or paid in cash through fast cash system. Petrol Pumps and CNG stations owners are also major clients of the bank as they get credit facility from bank, ask for pay orders, demand drafts and online transfer of funds. Employees of the bank treat them very efficiently and in respectable manner as they are prime customers of the bank.Almost 8 petrol pumps are the customers of bank which deposit cash on daily basis and demand for other agency functions.Lokers facility is also available at branch. Lockers in small,medium and large size are available. 11 AM to 2 PM are the rush hours of bank during which most of the customers visit the branch. One thing I observe at bank is that customers cash their value and importance at bank. Some customers directly go into branch manager room and ask for services. Total deposits of the branch are Rs 1.40 billion.

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STRUCTURE OF MY BRANCH

Functional Designation Branch Manager Manager Operations Head Remittances Manager Teller Cash Officer Cash Officer Assistant Banc Assurance Officer

Name

Mr. Ijaz Ahmad Mir Mr. Muhammad sufyan Mam Aamna Javed Mir Mr. Maqsood Butt Mr. Gul Muqadas Butt Mr. Muhammad Sulman Mr. M.Amaan Ullah Mr. Muhammad Waqas

Manager operations is responsible and supervise the operations of the branch. After manager he has the immediate authority. Head of remittance performs the functions of remittances and clearing at my branck.Teller and cash officers see the deposits and payments and utility bills collection is done by the Assistant. Two security guards and CTC cameras are for security perpose.
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WORK EXPERIENCE
As everyone knows that "Knowledge without practice is sterile "In order to give vent to this idea an Internship program of six to eight weeks has been arranged in different esteemed organizations during our MBA program In this regard on 23 July 2012, I was asked by by HBL Regional Manager Gujrat to go to Habib Bank Main branch Jalal Pur Jattan (Gujrat) to start an internship of six weeks there. During this period, I got a chance to work and learn. I came to know about the functions and working process of ATM machine. Next my main concern was to know about all the aspects of ATM 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 my duty was in Accounts department. I came to know the procedure for filling the form to open an account, different types of stamps required and about signature of the staff. Documents required to be attached with the account opening form and pasting of farms in account opening registers. Then in cash department my major task was to take print outs of fast cash vouchers and to ask the customers sign them and then two authorized officers of the bank sign that voucher and copy of CNIC of the beneficiary is to be attached with that voucher. Customer present that voucher at cash counter and receives the cash. Cash officer will sign that voucher and verify the signatures of authorized officers of the bank. Major task I performed at bank was filling cheques deposit slips, remittances forms and account opening forms and stamping the account opening forms. On behalf of the bank I often make phone calls to customers so that they can receive their debit cards, cheque books and gift boxes of money club accounts for their children.
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ASSIGNMENTS
(1)During my work in accounts department Mr. Muhammad Sufyan(manager operation)
assigned me the duty of checking the files of previously opened accounts for any type of discrepancies like utility bill or service certificate of the account holder is attached or not and checking stamps and signature of the staff etc. It was because an audit of these files in the coming month is scheduled. Almost above 50% of the application forms were having discrepancies of different types. This turns out to be very informative experience for me. Deposits are considered as lifeblood for any bank to survive. I came to know about the procedure and different types of deposits that customers can maintain in HBL, return rates that a customer can get and other terms and conditions of each type of account. As far as checking the old files are concern it seems boring but from my point of view it was very informative. The learning I got while doing this job would never be easy to get otherwise. (2) Mr. Muhammad Sufyan (manager operations) assigned me another task. State bank of Pakistan has instructed all the banks in Pakistan to make sure availability of computerized national identity cards of all the account holders. We were given a list of accounts from which CNIC was required and preprinted letters. Our task was to take the information from accounts like Name, Address and Account type by entering the account number in the system and then printing that information on one corner of the letters. This also turns out to be a very informative experience for me.

(3)Mr. Muhammad Sufyan (manager operations) assigned me an assignment to prepare slips for
lockers on which I was supposed to write name of the locker holder, issuance date and default amount if any to pay by the customer so that he can check the outstanding rent of locker before operating it.
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HOW THIS EXPERIENCE WILL IMPACT MY CAREER

Working for six weeks at HBL Main Branch Jalal Pur Jattan branch, Gujrat as an intern was very informative experience for me. During the time I learnt many new things which are surely going to help me in my professional career. It was a good experience for me to observe and to be the part of practical working of an organization like HBL. During the internship I got a chance to understand general consumers behavior and his needs and wants related to banking services and products. So come to the point I learnt so much and enjoyed the working in HBL. I improve my communication skills while working in customer relation department. In my internship I came to how the bookish knowledge can be applied in practical field. It was chance for me to learn.

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SWOT ANALYSIS

SWOT analysis is to know about the core values, weaknesses, opportunities and threats of other companies in that sectors. After the detail study of HBL I come to know about strength, weakness, opportunities and threats of HBL which is given below.

STRENGTHS
Strength can be defined as an area where a company is best at doing something or a feature that puts the company at an advantage in comparison to its competitors. HBL enjoys the following strengths: HABIB BANK is a well-established bank enjoying long history of over 65 years of experience and profitable operation. HBL is the largest private bank in Pakistan now and people trust is very high. It has the largest branch network among private banks of Pakistan. HBL has been very effective in controlling costs as it successfully restructured itself after its privatization. During this process more than 1,600 employees were relieved under a golden handshake scheme and 110 branches were closed. Excellent branches appearance gives an edge to HBL over other banks. The branches are well furnished even in less developed areas where other banks branches give a poor view. HBL has the ability to bring innovative products and services like personalized service, electronic funds Transfer, sophisticated financial products such as electronic banking, auto-teller machines and evening banking.
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The Banks Rupee Traveler Cheques have been market leaders for the past six years. HBLs car to car financing scheme is unique in auto loan segment. HBL has forged strategic alliances with international banks for expanding its network further, both locally and internationally.

WEAKNESSES
Maximum number of branches carrying out the proper maintenance and complexity in providing identical working atmosphere at the every branch Inferior organization of revival of the system is a danger to bankruptcy. Be deficient in customer feedback. Little job contentment. Pitiable ATMs Service Irregularity in efficiency and working environment due to the largest of branches. Sense of uncertainty in the employees allocated at little money-making branches due to the downsizing. Females feel nervous in an environment in the middle of the male workers. Prey of political, legal and socio-cultural stress Short of professionalism in the branch employees frequently.

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OPPORTUNITIES
Huge available market prospective in consumer banking. An opportunity exists, in shape of opening of ladies banking segment inside the branch which is completely a new idea and it will pull customers towards bank. Chance for mounting value added services combined with corporate banking relationships, cash management services to large and medium sized corporate clients. Emergent strategy of government on business and commerce sector provide HBL opportunities to take return of these policies to meet professionally with the business people to solve their problems with the instant cash and investment facilities.

Government is taking very courageous steps to endorse Information Technology in Pakistan. HBL has an opportunity to recover its technology. Customer advice on diverse products and accounts has really improved the bank performance and encouraged the ambiance for other potential policies. Habib Bank Ltd. also has an opportunity to enlarge its new technological expansion like; telebanking and internet banking facilities in a way to serve the customer more competently. E-banking facility too is an innovative opportunity which is a prosperous business in foreign countries and can also be here, if HBL takes the step ahead. Due to well-organized and expert management group, HBL can also develop and enlarge its foreign business productively. Habib Bank Limited provides opportunity to make use of its abilities and efficiencies in leasing business.

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THREATS

Consolidation in the banking segment ensuing in increased rivalry. Scarcity of qualified and focused personnel at minor managerial and officer stage. Increasing global technological progression. Firm regulation by government over credit conveniences to the customers as poorly as to meet the prudential.

Loss of assurance of out of the country customers due to freezing of accounts. Facing more opposition by overseas banks in the marketplace. Overseas banks are flourishing in field of consumer financing.

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FINANCIAL ANALYSIS

BALANCE SHEET HORIZONTAL ANALYSIS

Particulars
Assets: Cash & balance with treasury bank balance with other banks Lending to financial institutions Investments Advances Operating fixed assets Deferred tax assets Other assets Total assets

2009
Rs.(000) 79839836

2009-10
%age 2.25

2010
Rs. (000) 81640246

2010-11
%age 26.65

2011
Rs. (000) 103399623

40366687 5352873

(7.32) 466.78

37413185 30339344

26.55 37.05

47349505 41581029

216467532 454662499 16766668 9205944 41262754 863924793

17.76 1.12 (3.67) 3.98 15.37 7.03 84

254909116 459750012 16155290 9572203 34920007 924699403

64.22 0.52 18.65 (23.98) 28.32 23.23

418604147 457367656 19167654 7275888 44808703 1139554205

Liabilities: Bills payable Borrowings Deposits & other a/c Subordinated loans Others Total liabilities Net assets Presented by: Share capital Reserves Un appropriated profit Total equity Non controlling interest Surplus on revaluation of assets Total

Rs.(000) 10041542 52542978 682750079 4212080 30008316 779554995 84369798

%age (2.65) (23.0) 9.46 1.65 (26.40) 6.27 14.08

Rs.(000) 9775093 40459860 747374799 4281835 26557045 828448623 96250771

%age 42.14 (2.43) 24.94 17.61 42.83 24.32 13.85

Rs.(000) 13894502 39473670 933631525 5036100 37931420 1029967217 109586988

9108000 27527380 38498335 75133715 1143241 8092842

10 6.64 23,29 15.58 6.07 1.27

10018800 29355555 47467704 86842059 1212656 8196056

10 9.50 20.04 15.32 1.95 0.09

11020680 32145755 56980697 100147132 1236290 8203566

84369798

14.08

96250771

13.85

109586988

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INCOME STATEMENT HORIZONTAL ANALYSIS

Particulars
Markup/interest earned Markup/interest expense Net markup income Provisions against non performing loans Reversal of provisons charge/Reversal for diminution in investment Total provisions Net interest income after provisions Non-markup income: Fee, commission Dividend income Share of profit in associates Gain on sale of securities 5316479 597018 1913115 3333000 2.19 13.26 63.0 90.49 5432706 343252 713678 316823 12.02 26.61 51.52 71.11 6085970 434604 1081358 542118 9089659 33580875 16.54 17.35 7585664 39409109 8.70 36.95 6925497 49472706 (51396) 346495 39.88 86.24 (30895) 47671 70.41 397.33 (9141) 237083

2009
76076347 33405813 42670534 8794560

2009-10
6.90 2.76 10.13 13.55

2010
81325028 34330255 46994773 7602440

2010-11
21.21 22.87 20.01 11.90

2011
98580423 42182220 56398203 6697555

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Income from dealing in foreign currencies Total non markup income Non markup expenses: Administrative expenses Other provisions/write offs Other charges Workers welfare fund Total non markup expense Profit before taxation Taxation Net profit after tax

1913115

66.71

3189333

17.93

3756094

44740487

(71.47)

12762431

15.83

14782861

22745955 210190 3540 399166 23358851 21381636 7980887 13400749

6.63 (15.24) 49480 30.69 17.22 26.46 25.37 27.11

24252960 178148 178700 521702 25131510 27040030 10005650 17034380

21.36 36.08 56.58) 27.47 19.11 26.93 19.82 31.10

29433961 242427 77588 665047 29934169 34321398 11988376 22333022

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TREND OF THE BANK

Assets of the bank shows an increasing trend from 2009 to 2011.cash and balance with treasury banks has increased 23 percent almost in 2011 as compared to 2010.lendings to financial institutions has increased to 37.05 percent. Total assets of the bank have increased 23.23 percent in 2011 as compared to 2010. Deposits have increased almost 25 percent in 2011 as compared to 2010 and show an increasing trend. Borrowings of the bank show decreasing trend. Increase in liabilities is less as compared to increase in assets and also a low pace over period of time. Markup or interest earned is increasing from 2009 to 2011 but markup expense is also increasing at the same pace.Net markup income is increasing from 2009 to 2011 and shows an increasing trend Administrative expenses of the bank show an increasing trend and also an abrupt change in 2011 due to which spread of bank shows decreasing trend as discussed in ratio analysis of the bank. Profit after tax is also increasing from 2009 to 2011.it has increased 31.1 percent in 2011 as compared to 2010,which is the highest in Banking sector of Pakistan.

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RATIO ANALYSIS

1-PROVISION TO CLASSIFIED ADVANCE

Formula:
Provisions/ Total classified advances

Year Ratio ( %age)

2009 71.50

2010 79.64

2011 81.50

Comments:
Provision to total classified advances has increased over period of time.it shows an increasing trend, which means that bank is adopting conservative approach towards classification of loans and keeping appropriate provision against the schedule of nonperforming loans. However classified advances are also increased from 2009 to 2011. It also means that rescheduling and restructuring of classified advances is not provided properly.

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2-INFECTION RATIO

Formula:
Infection ratio= Grass classified advance/Total advance*100

Year
Ratio (%age)

2009
10.91

2010
10.67

2011
11.23

Comments:
Infection ratio shows the percentage of classified advances in the schedule of total advances. Infection ratio up to 15 percent is not threatening. However, if it increases more than 15 percent it shows that loans are not performing properly. Infection ratio has slightly decreased from 2009 to 2010 but increase from 2010 to 2011. It means non performing loans are increasing.

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3-ADVANCE TO DEPOSITS RATIO

Formula:
Advances/Deposits*100

Year Ratio (%age)

2009 66.34

2010 61.52

2011 48.99

Comments:
Deposits of the bank are liability. These should be managed properly are invested in profitable sectors. If advances to deposits ratio increases it shows that more customers are obtaining loans. In the case of Habib Bank Limited percentage of advances to deposits is decreasing and there is a sudden change from 2010 to 2011. Due to poor economic conditions and energy crisis in the country, business houses are suffering with less utilization of their capacity so they are not getting long term loans.

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4-ADMINSTATIVE EXPENSES TO DEPOSITS RATIO

Formula:
Administrative expenses/Deposits*100

Year Ratio (%age)

2009 3.15

2010 3.25

2011 3.33

Comments:

Administrative expenses are borne by the bank to manage the deposits. If administrative expenses are increase, then lending rates will also increase to maintain a balance profit or markup earned. Administrative expenses up to 3 percent are reasonable and affordable. In the case of Habib Bank administrative expenses are increasing from 2009 to 2011.

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5-RETURN ON EQUITY

Formula:
ROE= Net Profit After Tax/Paid up Capital + Revenue Reserves*100

Year Ratio (%age)

2009 19.42

2010 15.26

2011 20.13

Comments:

Return on equity is decreasing from 2009 to 201o, which is due to decrease in the profit after tax of the Habib Bank, from 2010 to 2011 it is increasing which is due to increase in the net profit after tax of the bank. Increase in the return of equity builds confidence among investors. Increased return on equity shows increasing trend in 2011.so investors will come and invest in the bank.

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6-RETURN ON ASSETS

Formula:
ROA= Net profit after tax/Total assets

Year Ratio (%age)

2009 1.55

2010 1.90

2011 2.16

Comments:

Return on assets is increasing from 2009 to 2011 and in 2011 it is more than 2 times. It means that assets of the bank in are giving more return over period of time. Increase in return on assets is due to major increase in net profit after tax. Investor will observe it as a positive trend in the banks management of assets.

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7-AVERAGE RATE OF LENDING

Formula:
Markup Or Interest Earned / Lending + Investments + Advances*100

Year Ratio ( %age)

2009 11.24

2010 10.91

2011 10.74

Comments:

Average rate of lending is decreasing from 2009 to 2011 which means that bank is lending its deposits at lesser rate of interest over period of time. Poor economic conditions of the country and energy crisis effected the industrial sector due to which liquidity of banks is increased which has created a stiff competition among the banks and so in competition you know that prices fall, same is the case of bank and bank is forced to lend at lower rate to the industrial sector.

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8-AVERAGE RATE OF BORROWING

Formula:
Makup or Interest Expense / Deposits + sub. loans + Liab. Against Assets subj. to finance lease

Year Ratio ( %age)

2009 4.52

2010 4.33

2011 4.31

Comments:
Average rate of borrowing shows an increasing trend, which means that bank is paying more interest on their loans and financing obtained which is a negative factor. It may cause a decrease in earnings of the bank and also the spread of the bank is falling due to same factor.

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9-SPREAD
Formula:
Avg. Rate of Lending Avg. Rate of Borrowing Year Avg. rate of lending (%) Avg. rate of borrowing (%) Spread (%) 6.72 6.58 6.43 4.52 4.33 4.31 2009 11.24 2010 10.91 2011 10.74

Comments:
Spread of the bank shows decreasing trend due to increased borrowing rates and decreased lending rates. It needs to be improved. But profit of the bank is increasing, because agency functions earnings are increasing, but it is not the major business of a bank.

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10-CASH RESERVE RATIO Formula:

Balance with the treasury/Deposits

Year Ratio ( %age)

2009 11.69

2010 10.92

2011 11.07

Comments:
Cash reserve ratio of bank shows a decreasing trend from 2009 to 2011,but then increases from 2010 to 2011,still less than 2011. Because deposits are increasing at more pace as compared to balance with the treasury, so this ratio is a fluctuating one.

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11-STATUTORY LIQUIDITY RESERVE RATIO

Formula:
Investment in approved govt. securities/Deposits

Year Ratio ( %age)

2009 19.60

2010 21.08

2011 39.98

Comments:
Statutory liquidity reserve ratio is increasing from 2009 to 2011 because of increase in investment in approved government securities. This is a positive factor for habib bank that statutory liquidity reserves are increasing, so depositors will be more satisfied with the bank. Approved securities include treasury bills and Pakistan investment bonds.

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CONCLUSION

Habib Bank Ltd. is obviously the first and foremost selection of each and everyone who believes in qualitative approach of banking, an atmosphere of extremely accountable employees. Habib Bank is taking pleasure in a strong market share and enjoying the taste of high-quality standing in terms of its operational features and customer support. Habib Bank Ltd. is undoubtedly the unsurpassed bank operating in Pakistan. Personal loan is a distinguished feature of HBL experiencing a good reputation and reasonable mark up with respect to prevailing market mark up with assurance of satisfaction and support. HBL has additional customers as contrast to other banks, if they give appropriate concentration to every customer then in coming few years it will be the principal bank of the country. I noticed that Habib Bank Ltd. is an economically sound bank. Its proceeds are increasing gradually more years by year. Its personnel are exceptionally good and genuine with the bank. But due to the current economic crash, business of the bank has been reduced.

Habib Bank Limited views specialization and service brilliancy as the foundation of its policy. The people at Bank understand that innovation, creativity, reliability, customized services and their implementation is the important constituent for their future enlargement.HBL is aware that they have paced into 21st century and they must get together its challenge by obtaining the maximum level of technology.

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Habib bank was among the top banks of the world but in few years it has lost its position. HBL is not giving any progress due to political pressure and instability. Other factors holding back the performance of HBL are unproductive and inefficient management. Last but not the least corruption is the root cause of declining worth of HBL. Removing these factors will not only retain the worth and place of HBL but also lead it to top ten banks of the world. HBL is lacking in conflict management. There are many problems aroused regarding any issue that leads to a conflict; HBL must be having a conflict resolving system in which higher officials must be involved to have a keen and close look on the critical issues. HBL took a great step of introducing mobile banking. But a huge problem HBL is facing is the lack of knowledge of client. Client is unaware of this sort of banking. HBL can launch an organized marketing program to make its customers aware of their product. HBL has upgraded its system by installing MISYS to ensure real time banking at its about 300 local and overseas locations.

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RECOMMENDATIONS

As we seen from the previous analysis of the financial statements I have realized that that Habib Bank is performing very well since its inception. It is quite difficult to give suggestion to improve the banking conditions Habib Bank Limited. As we know that nothing is perfect, there is always a room for improvement, so I will recommend following suggestions for HBL: Employees Training programs can be introduced on continuous basis so that Employees have understanding with the latest developments especially with the customers. Bank may introduced incentive plans for employees on regular basis so that if employees may work whole heartedly for the welfare of their organization. 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 as it decreases profit but also discourage hard worker and honest employees. Fresh graduates must be recruited. As the combination of Experienced and fresh can produce better results and it will improve the efficiency of management. Habib Bank is going towards mobile banking but the problem is that a common client has no idea of its usage due to lack of marketing. I think that a proper marketing programme must be launched for clients awareness. Banks different schemes must be conveyed to the targeted customers so that to have a reasonable share in market. Bank should help the society by providing interest free loans to the Talented Students. Online Banking should be introduced in all the branches.

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To motivate the employees their remuneration / salaries should be made at par with top tier Banks.

Aggressive publicity campaign must be introduced through press and Electronic media for new products and scheme by initiating vigorous marketing policy.

Bank should adopt such an induction plan that when a customer opens his account with the bank he should be supplied with a booklet which enables him to know the procedure of filing the cheques, pay-in-slip etc. It will save a lot of time of the bank staff afterward during the conduct 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 customers and neglect a major portion of them. Some of the customers approach to the bank officials and get their work done before others; it is not a good practice. All the customers should be treated equally.

HBL should increase its communication with customers about the terms and conditions of its different products and services.

Procedure for issuance of debit is very difficult and has many problems,like sometimes phone officers treat customers improperly, having a huge network of branches does not mean to prolong debit card delivery procedure, as it took about one month to collect debit card,and then its activation is also a major problem. Bank should think about this issue.

System Link down is also a problem; it must be resolved by new technology and equipments.

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