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Fixed deposits

Fixed deposits are those which can be withdrawn only after the maturity
period. In this type of deposits the Bank allows high rates of interest
depending on the time period of deposits. The shorter the period of deposits, the
less will be the interest and vice versa.
Account Opening Department
In this department I have to learn how to open a new account of a customer. The HBL
open the different types of accounts. The opening of an account is the establishment of
banker customer relationship. Before a banker opens a new account, the banker should
determine the prospective customers integrity, respectability, occupation and the nature of
business by the introductory references given at the time of account opening. I already
explain these accounts. In order to open an account first of all the customer has to fill
a form prescribed by the bank. The person is required to bring some reference or
introduction for opening the account. Introducer may be a person who has an account
with HBL. Some important information regarding introducer e.g. the name and account
number of the introducer is written on the space provided on the specimen signature
cards. Then in order to find out whether he is a true introducer or not a letter is sent
to him thanking him for this introduction, so that anything wrong may come into notice.
There are different requirement for different types of accounts and account holders. An
important thing is that the customer should have a corporate customer. The corporate
customer limit is 40 million and this branch always deals the corporate customer.
Procedure of Account Opening

Duly filled prescribed A/C opening form.

Attested photocopy of N.I.C./Passport of Account Holder(s), Proprietor, Partners,

Directors and office Bearers as the case may be.

Certified true copy of the certificate of incorporation or registration (in case of

limited companies & registered bodies only).

Certified true copy of the certificate of commencement of business (in case of
public limited companies only).

Certified true copy of the memorandum and articles of association (in case of

limited companies).
Certified true copy of rules and regulations or By-Laws (in case of association

Certified true copy of the resolution of the Board of Directors/Managing
Committee/Governing Body regarding conduct of the account.

Procedure for Account closing

Any time the customer can close their account if he is not satisfy with the bank or may
be other reason. He can easily close their account. For closing of account the customer
meets the manager that he want to close his account .For this purpose the application is
written to the manager. The manager sing this application and this is submit to the
account opening department this department close the account of the custom.
Remittance Department
Remittance is a major function of the bank. It is the transfer of money from one place
to another place without directly involving cash. As it is the function of the Bank to the
money to any place where there is a Bank. It is the most easiest and safe way to send
money to any place. Bank charges menial amount as a commission for the remittance.
Here in the Habib Bank Limited Chubara Road Layyah Branch there is also remittance
Department. By providing this service to the customers the national bank earns a lot of
income in Exchange.
There are two types of bills remittance:

Remittance Inward


Remittance Outward

Remittance Inward

Cheques and Drafts received for payment and clearance or drawn on us from customer
of other banks on behalf of their customers is called Remittance Inward.

Remittance Outward

All instruments issued by us, which are drawn on other branch of the same bank or
instruments deposited for collection from other bank locally or out of city are called
Remittance Outward
There are mostly four methods to remit the money. They are

Demand Draft (DD)

Mail Transfer (MT)
Pay Order (PO)
Telegraphic Transfer.(TT)

Demand Draft (DD)

It is the most commonly method used for remittance of money. It is very simple, firstly
a form is to be filled in which all details are specified that where and it which branch
the draft is to be sent then the money is depositor which is called draft and money can
be drawn after showing to the bank of the specified branch of the Bank. Only specified
person can draw the money on that draft. Another method to secure the payment of the
draft could be the crossing of the draft, which means that it will only be deposited in
the payee's account. To make it more secured and safe the Bank has coded the amount
exceeding Rs. 15000. Only the banker or the person known the actual amount of the
draft in return bank gets a commission which is its mode of earning.
Following parties are involved in demand draft:

Issuing branch
Drawee branch

A demand draft may be issued against the written request of the customer before issuing
it must be seen that the demand draft is in order.
The DD application must be scrutinized by the counter clerk in respect of following

There should be branch where payment is to be made.

Full name of payer should be mentioned.
Amount in words and figures must be same
The applicant on two places should sign application.

Mail Transfer (MT)

The money is transferred through mail. One Branch of the bank sends advice to the
branch of the same bank to credit the account of payee. In this type of transfer the

payee must has the Bank account. For example, now days PTV's licenses are made all
over the Pakistan. Bank also gets commission on the mail transfers the amount to the
PTVs Islamabad account.
Pay Order (PO)
Pay order is less expensive method of transfer money. Normally this method is used to
transfer money inside the city. If it is used city wide, it takes a long time. The bank
charge Rs. 10 which is flat fee the pay order and an excise duty of Rs, 1 per leaf
withholding tax of 20% on the sum is also taken from the party. Now if the pay order
is to be cancelled or duplicate of the pay order is to be needed is case of misplacement
Rs.20 is to be paid.
Following parties are involved in pay order:

issuing branch

Telegraphic Transfer.(TT)
It is a good safe and fast method of transferring money from one place to another. The
advice is sent through the telegram and the bank to which the advice is made
reconfirms that whether the advice is made or not. After the confirmation the money is
paid to the payee. Telegraphic Transfer could be made by giving the name and the
telephone number of the payee but account number is considered good and sage. The
amount exceeding Rs.15000 is coded in order to keep security.
Following parties are involved in TT

Drawing branch
Drawee branch

Following important things should be included in TT:

Full name of the beneficiary or account number should be mentioned in the

application form.
Instruction regarding mode of payment should be obtained.
A record in the remittance outward register should be maintained.
All the remittance must be controlled through number or codes.

Advances Department
This department has been working under the supervision of knowledge experienced &
well qualified banker. Mr. Nadeem, who has been serving this bank for the last 22
years. This department has been playing one of the primary functions of the bank
because a bank is the organizations that accept deposits & give advances. Advances
department is one of the most sensitive and important departments of the bank. The
major portion of the profit is earned through this department. The job of this department
is to make proposals about the loans. The Credit Management Division of Head Office
directly controls all the advances. As we known bank is a profit seeking institution. It
attracts surplus balances from the customers at low rate of interest and makes advances
at a higher rate of interest to the individuals and business firms. Credit extensions are
the most important activity of all financial institutions, because it is the main source of
earning. However, at the same time, it is a very risky task and the risk cannot be
completely eliminated but could be minimized largely with certain techniques. Any
individual or company, who wants loan from HBL, first of all has to undergo the filling
of a prescribed form, which provides the following information to the banker.
Advances are investments of bank to earn profit. After restructuring of Habib Bank
Limited, Head office gives loan targets to each branch that must be achieved for its
survival. The manager is responsible to achieve these targets in the given period. The
amount is collected partially with an agreement containing the markup or interest rate,
which is to be paid the interest, or markup is applied on a time limit after that it can
be increased with the given conditions applied.
There are basically two types of loans.

Fund base
Non-fund base

Fund base
In fund base the cash is involved.
Non-fund base
While is non fund base cash is not involved.
These are following types of advances those are given by the BANK.

Cash Finance (CF)

Running Finance (RF)
Machinery Loan.
International Development Agency Loan(IDA)

Cash finance (CF)

Cash Finance is the biggest loan given to the businessmen, industrialists, and its limit is
in crores and bank do require security for this purpose. After the proper investigation
and documentation these finances are given and genuine property is pledged as a matter
of security.
These loans are taken for the purchase of stocks etc. The bank appoints its staff of two
or three persons at the place where that stock is lying. Bank also keeps the record of
the stock and current position too. A notice is also written at the place that the stocks
are pledged with
the bank. To get these types of loans prior permission from the zonal office of the
Habib bank is also required. The bank gets back its principal amount and also markup
for the loan
Running finance (RF)
Running Finances are also given for the purchase of stock etc. But its limit is not too
much. Normally up to RS 15, 00,000 is given as a Running Finance and no staff is
appointed. This is termed as Hypothecation, which means that party is wholly liable for
the stock and
payment of the principal amount and markup. The procedure is almost same as for the
cash finance and the loan is given to those parties which are able to prove its

genuineness and satisfies the bank. The bank also pledges the genuine security of the
party which normally more valuable than the amount of loan. To get this type of loan
prior permission of the zonal office is necessary.
Machinery loan
Certain loans are given for the purchase of machinery. These loans are called Local
Machinery Manufacturing Loan (LMM LOAN). The bank finances for the machinery,
which is manufactured in Pakistan. Like other loans after the proper verification and
proper documentation.
With the prior approval from the zonal office, these loans are given. The bank pledges
some genuine property as a security. Personal security is also required in the getting of
this loan. The loan is to repay in certain installments which includes the mark-up also.
Normally these loans are for the period of five years and first six or three months are
exempted from the installments as the ease or as the terms and conditions may be. The
rate of the interest to be paid by the party is 8% per annum.
International Development Agency Loans.
These loans are given for the purchase of foreign machinery, stocks, etc.
Though these loans are not in practice but there is a provision for this loan. The cause
of in practicing of the loan may be the unawareness of the people about the provision.
The rate of interest on these loans is 11% per annum.
These finances are provided by the World Bank.
Principles of Advances
There are five principles, which must be duly observed while advancing money to the


Other Finance system of the HBL

Demand finance

Fixed assets financing (FAF)

House Finance

Hire Purchase Financing

Marketing Department
Function of Market Department
The function of the marketing department of a HBL is to advertise about the bank and
reach more possible customer who would open accounts with the HBL. They usually
start up the campaign or a promotional scheme explaining a benefit that come along
with the process of account opening with the bank. Such a campaign usually results in
the increase in the customers base and increased the profit for the HBL.
Another important function of HBL is to use of the segmentation strategy, in it the HBL
divide the market into distinct group of buyers with different needs how might require It
is very important strategy which is applied by the operation marketing department in the
HBL, the Main focus of this selecting strategy is to spreading the market into different
groups, where the persons have comparable needs as well as wants for services and
The marketing department in HABIB BANK LIMITED is very strong. It is the main
source of gaining and maintains the customers that can give a large profit to the bank.
There are five relationship managers in Habib bank and every person is responsible for
the credit of his party. There are three market of HBL.
Money Market

T-Bill and Govt. Securities

Bonds of Provincial Govt.
Defense Saving Certificates
Mutual Funds etc.

Capital Market

Equities e.g. shares

Mutual Funds
Debt Market

Foreign Exchange Market

Spot Transactions
Outright Transactions
Swap Transactions

Customer dealing
HBL corporate center only deal with the following categories of business:

The organization that have minimum 250 million sales in a year.

The organization that have availed 80 million finance
Agri based industry.
HBL do not deal with the agriculture sector.

Clearing Department
The major function of clearing department is to receive the cheques, which are drawn on
some other banks. The customer can get the money in his account at Habib Bank
Limited through a cheque drawn on another bank. The bank accepts these cheques and
collects the amount from that bank on which cheques are drawn through the Clearing
House. Bank charges some commission for this function.
Every bank performs both as a paying as well as collecting functions on behalf of its
customer. It is however an important function of crossed cheques. A large part of this
work is carried out through the bankers clearing house. A clearing house is a place
where representatives of all the banks of a city get together and settle the receipts and
payments of cheques drawn on each other bank. As the collecting banker runs the
certain risks in receipt of their ownership, the law has provided certain protections to the
banks. The basic function of clearing dept. arises when HBL account holder deposits
cheque of another back to collect its payment on his behalf or HBL account holder

gives a cheque to any other party concerning to any other bank. Usually a cheque is
sent through clearing is credited to the depositor account day after tomorrow.
In this regard there are two types of clearings.

Inward Clearing
Outward Clearing

Inward Clearing
Inward clearing means all those cheques which are issued by account holders too their
parties and now these cheques are presented for payment (in term of amount of cheque
credit to presenter account).

Outward Clearing
Similarly when outside parties issue some cheque to our account holders, they deposit
these cheques in cheque Receipts Department. Afterward these cheques, as relating to
other banks operating in country, are sent to clearing department or further process.
Clearing dept. sends these cheques to respective banks and after realization of cheque,
funds are credited to the account of respective customer. In this regard there are two
types of clearing

Intra city clearing

Intercity clearing

Foreign Exchange Department

As the Pakistani currency accounts are opened the requirements are same for the foreign
currency accounts. All the transactions are made in the foreign currency in which the
account is opened
1. Computer Department
Through this department bank has make its way to enter in twenty-first century. This
department is playing a very important role in making the banking procedures fasters and

helping the bank for providing the new services to its customers. This division provided
the bank with online branches system to make the whole procedure fool proof.
Description of the departments I work in
Working of the Bank divided between various departments. Different departments perform
their jobs as described in the bank policies. In AKBL each branch is divided into
various departments. Head of department manage the task of all departments & of the
branch as well. The working of the Department within branch is as:
Account opening Department

Remittances department
Cash department
Clearing department
Online banking


Functions of Account Opening Department

Providing account opening form to the customers.

Guide the customers regarding form filling and check whether the customers fill it
correctly or not.

Preparing checklist,

Stamping on the form,

Maintaining account opening register,

Pasting of forms in register after release from general banking in charge,

Issuance of cheque books,

Issuance of accounts maintenance certificate,

Inquires about Customer

Have all necessary information with him regarding his generally a banker is asked by
another banker to give his opinion about his customers financial position. it is highly
beneficial for the both that the banker should customers. Now a practice that Bank
officer visit to customer and inquire about his business nature then writes a report.

Account Opening Procedure and Requirements

The main objective of knowing customer is to have an idea about the identity of
customer and to build the long term relationship. A banker must have following
information about the customer:
Customer name: Enter complete name as mentioned in original ID card /other
business documents. Nature of business /profession: also enters the customers
title/position and address of the business/employer.
Address: Enter the complete business/residential address. Within the brackets you
may also provide prominent address identification marks for ease of physically
locating the address.
Contact Numbers: Enter home, official, mobile, fax number and e-mail address.
Banker can verify the contact number by calling the customer.
Change Contact Numbers: After Opening A/C contact can be change by










secondary/ mailing address: Some customer may volunteer their parents or

siblings addressor second home address or a mailing address other than a
permanent address. Special instructions Clear-cut special instructions must be
obtained from customers.

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.
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
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.

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

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

Online Banking should be introduced in all the branches.
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

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