HBL Apa

Internship Report on Operation Management
Of
Habib Bank Limited
Allama Iqbal Open University
DEDICATION
All Our Words Dedicated with Respect
and Reverence Love and Affection to
My Parents
INTERNSHIP REPORT
Internship Report on HBL
HABIB BANK LIMITED

Specialization:
MARKETING
Submitted to:
The Chairman
Department of Business Administration
Submitted By:
Name:
Imran Haider
Roll #:
W587675
Reg. #:
Mailing Address: H # 463, St #14, Gulistan Colony, Mustafabad
Lahore.
Contact #:
Date of Submission:
DEPARTMENT OF BUSINESS ADMINISTRATION ALLAMA

IQBAL OPEN UNIVERSITY, ISLAMABAD
ACKNOWLEDGMENTS
Great is Allah and great is His mercy. Who taught by the pen, taught men what he knew not. It is
through his boundless grace and infinite mercy that we have been able to bring out this.
Special praise is for our beloved Holy Prophet (S.A.W.W) who is inspiration for all who seek
knowledge and is symbol of knowledge and complete guidance for humanity as a whole.
We do not have words to express deep gratitude and thanks to our respected teachers and
instructors who helped us and encourage us in every possible way. He was with us whenever we
needed him. No matter how many times we went to bother him with our problem, He never
seemed irritated. In return all we can do is to offer our greatest respect and honor for a great
teacher. In fact he has been a great source of inspiration for us in particular.
I am also very obliged to Mr. Tauqeer Ahmed (HBL) who provided me guidance and showed
kindness in the form of keen interest.
I am also extending our sincere appreciation to all our friends and class fellows.
Words are lacking to express obligations to our affectionate Parents their love, good wishes,
inspirations and unceasing prayers, without which the present destination would have been mere
a dream.
All our prayers and gratitudes for them, who pray for us, help us, and encourage us to achieve
our goal.
Best Regards
Ather Hussain
Executive Summary
I was given a Report on internship training program, which is compulsory for the degree
requirement of MBA program. The Internship duration must be at least 6
8 weeks. The internship is done by me in Habib Bank Ltd.. This report has been made on
Habib Bank Limited. a prominent name in Insurance sector of Pakistan. The report revolves
around the accounting and finance department of Habib Bank Limited.. As per my internship
program my report has the information related to the HBL such as the Products & Services
offered by the HBL. As per the required format of university, this report includes all those
elements in detail description about each component which is laid down in the prescribed format
for MBA (Finance) students.
This report includes the overview of business sectors of the organization, introduction to the
group, detailed information about finance department, organizational structure, finance
department structure, key duties performed analysis of financial statements, accounting &
finance system of the organization, financial reviews, recommendations and other supporting
material used in this report. I also discussed the other departments like Marketing Departments;
companys marketing strategies, SWOT analysis with respect to the competitors
By analyzing and reading this report, a reader or analyzer will come to know about the Habib
Bank Limited., its structure, working environment, duties performed during internship
program finance specialization students, get information about key financial statements a general
perception regarding insurance.
TABALE OF CONTENTS:
Sr. No
1.
Title
OBJECT OF STUDYING THE ORGANIZATION
Page
06
2.
CORPORATE VALUES
06
3.
HISTORY OF HBL
09
4.
NATURE OF THE ORGANIZATION
10
5.
ORGANIZATION STRUCTURE
11
6.
PRODUCTS & SERVICES
12
7.
STRUCTURE OF OVERALL ORGANIZATION
22
8.
REVIW OF VARIOUS DEPARTMENTS IN TERM OF

FUNCTIONS
23
9.
DEPOSIT DEPARMENT
23
10.
CLEARING DEPARMENT
30
11.
BILLS DEPARMENT
35
12.
REMITTANCE DEPARTMENT
36
13.
SOURCES OF FUNDS
37
14.
GENERATION OF FUNDS
39
15.
ALLOCATION OF FUNDS
41
16.
FUTURE PROSPECT OF THE ORGANIZATION
42
LIST OF TABLES & ILLUSTRSTIONS

Sr.
1.
2.
3.
4.
Table Name
Source of funds(Table no. 13.1)
Source of funds(Table no. 13.2)
Generations of funds(Table no. 14.1)
Generations of funds(Table no. 14.2)
Page
40
40
41
41
6
5.
6.
Allocations of funds(Table no. 15.1)

Allocations of funds(Table no. 15.2)
43
43
Objectives of studying the organization

The main objective is to study the organization to know about the OPERATION
MANAGEMENT of Habib Bank Limited. Following are the working on OPERATION
MANAGEMENT of Habib Bank Limited.
HBL Values
Excellence
Integrity
Customer focus
Meritocracy
Progressiveness
Corporate Information
Registered Office:Habib Bank Limited
Habib Bank Plaza
I.I. Chundrigar Road
Karachi 75650
Pakistan.
Head Office:Habib Bank Limited
Habib Bank Plaza
Karachi 75650
Pakistan.
Phones: 2418000
Fax: 21-2411647
Telex: 20086-20751 HBANK-PK
Auditors:
Taseer Hadi Khalid & Co.
(a member firm of KPMG International)
Sh. Sultan Trust Bldg. No. 2
Beaumont Road
Karachi 75530
Pakistan.
A.F. Ferguson & Co.
(a member firm of PriceWaterhouseCoopers)
State Life Building 1 C
Karachi
Pakistan.
Board of Directors
Zakir Mahmood
President & Chief Executive Officer
Sultan Ali
Iain Donald Chene
chairman
Director
Mr. Sajid Zahid
Director
Mustaq Malik
Director
Ahmad Jawad
Director
Management Hierarchy
President
Board of director
Member executive board
Regional chief
Zonal chief
Branch managers
History of Habib Bank

This bank was incorporated under companies act 1913 on 9th July, 1947 (just before
partition) at Calcutta. But due to changing scenario of the region, the certificate of incorporation
was issued on 17th August, 1948 with a delay of almost 1 year; the certificate was issued at
Chitagong. The first Head office of the company was established at Dacca and Mr. G.M.
Adamjee was appointed its first chairman. It was incorporated with an authorized capital of Rs.
15 million.
After some time the registered office of the company was shifted to Karachi on August
23rd, 1956 through a special resolution, now recently the Head office of HBL has been
transferred to Islamabad in July, 1999 and now Head office is termed as Principle Office.
This institute was nationalized with other on January 1st, 1974. At that time it had 506
branches and deposits amounting to Rs. 1,640 million. Although. HBL has a reputation of a
conservative bank but nationalization also left its effects on this institute as well and by end of
year 1991 in which it was privatized had deposits amounting to as high as Rs. 35,029 million.
After privatization Mr. Mian Mansha took over as Chairman, the bank revised all of its
previous policies, aiming towards higher profits as he himself is an industrialist and those
instincts are the driving force behind his zealous efforts for the financial well being of the
organization. Thus, the bank under his chairmanship has improved a lot, aiming to provide
quality services to its clients and standing up to the intense competition in the banking sector.
They now understand that cutting edge technology is vital for any modern organization. HBL
continuously designs products and services that harness the best technology for the sole benefit
of its customers. It is all concerned with changing the conservative and anti progressive slant
adopted by the previous management at HBL. In the result now HBL has 1057 domestic and 7
oversees branches in the world.
Nature of the organization
As it is an institution called bank so the purpose of banks is to provide some services
to the general public. And for this purpose different banks provide different services to the
people in different forms. The HBL Bank is a commercial bank, in modern time commercial
banks play a very important role and their functions are manifold. The main functions and
services which HBL Bank Limited provides to different peoples are as follows.
Open Different accounts for different peoples
Accepting various types of deposits
Granting loans & advances
Undertaking of agency services and also general utility functions, few of those are as
under:-
Collecting cheque and bill of exchange for the customers.
Collecting interest due, dividend, pensions and other sum due to customers.
Transfer of money from place to place.
Acting an executor, trustee or attorney for the customers. Providing safe custody
and facilities to keep jewellery, documents or securities.
Issuing of travelers cheque and letters of credit to give credit facilities to travel.
Accepting bills of exchange on behalf of customers.
Purchasing shares for the customers.
Undertaking foreign exchange business.
Furnishing trade information and tendering advice to customers.
Organization Structure
Organization Structure of HBL Management
As HBL is a banking company listed in stock exchange therefore it follows all the
legalities which are imposed by concerned statutes Mr. Muhammad Mansha is chairman & chief
executive of the company with a team of 10 directors and 1 vice chairman to help in the business
control and strategy making for the company, annex is attached at the end of the report.
Operational management of the bank is being handled by a team of 10 professionals. This
team is also headed by Mr. Muhammad Mansha. The different operational departments are
Consumer Banking & IT Division, Financial & inter branch Division, banking operation div, HR
& Legal Div, Financial Control & Audit Div, Credit management Div, Commercial Banking Div,
Corporate Banking Div, Treasury Management & FX Group and lastly Special Assets
Management (SAM) Group.
Organizational Structure of HBL
A quick view organizational structure is as following:Banking Operations
a.
Wholesale
b.
Retail
c.
Treasury and Capital Markets

Wholly Owned Subsidiaries
a.
HBL Asset Management Co.
b.
MNET Services (PVT) Ltd,
c.
HBL Trade Services Ltd, (HK)
d.
Muslim Commercial Financial Services

Associated Companies
a.
Adamjee Insurance Co.
b.
First Women Bank

Product & Services
Product Line has been categorized into three segments with different people handling each
category. These categories are:
Corporate Banking
These are branches which have an exposure of over Rs. 100 million. Usually includes
multinational & public sector companies.
Commercial Banking
The branches which has a credit exposure of less than Rs. 100 million but having a credit
portfolio of more than Rs. 20 million (excluding staff loans), Usually branches in large markets
and commercial areas come under this category.
Consumer Banking
These are the branches which have exposure up to Rs. 20 million and these include all the
branches which are neither corporate nor commercial branches.
HBL Product Mix against products
Retail Products and Services:
Typical Retail products and services of HBL are as follows:
1) HBL Credit Card
Welcome to a world of convenience, flexibility and opportunity. The HBL Credit Card
will add simplicity and excitement to your life. Accepted at over 24 million merchants
worldwide, HBL Credit Card makes shopping fun and paying simple. Make the most out of
your shopping experience with your very own HBL Credit Card.
Benefits
Convenience
Security
Affordability
Cash Advance
Balance Transfer Facility
Convenience
Instead of paying with cash, simply present your HBL Credit Card to the shopkeeper and pay
for anything you want.
Bill Payments
SMS Alerts
E-Statements
Statement by Fax
Security
Your HBL Credit Card ensures your money stays completely secure. You cannot lose
cash if you dont carry it. In the unlikely event that your card is stolen, call us at HBL Phone
Banking and your card will be blocked immediately.
Affordability
HBL Credit Card gives you the flexibility to buy what you want, when you want and pay
for it later. A credit card statement will be sent to you every month with details of all your
purchases. You will have 21 credit free days to make the payment from the statement date. Please
pay at least 3 days in advance if you make your payment by cheques to allow enough time for
clearance.
You have the freedom to pay the entire outstanding amount on your card statement or as
little as 5% of the outstanding balance in your statement. The remaining amount will be
transferred to next months statement. A nominal service charge will be applied to the unpaid
amount each month.
Just make sure all your HBL Credit Card payments are made before the due date and you
will benefit from a reduction in the rate of service charges at the end of each year.
Cash Advance
If you require cash urgently, you can go to any specified HBL branch and withdraw cash
at the counter. You can also go to any 1 Link ATM in Pakistan and more than 780,000 ATMs and
financial institutions worldwide displaying the Visa/Plus logo. You can withdraw cash up to the
available cash advance limit on your HBL Credit Card.
Balance Transfer Facility
With your HBL Credit Card Balance Transfer Facility, you have the opportunity to pay
off balances you owe to other banks through your HBL Credit Card at lower service charges.
Habib Bank MasterCard
Habib Bank MasterCard opens a world of convenience. Be it shopping or traveling or
medical expense, HBL MasterCard sets free from the hassles of carrying cash, wherever
customer are. You have the option to choose from our Domestic or International card
depending on your requirements.
Worldwide acceptability
Up to 30% of your spending limit as cash advance
Travel accident insurance coverage worth Rs. 2.5 million
Foot feature to help avoid misuse
HBL ATM
ATM can pay cash at odd hours within your withdrawal limit as long as there is balance
in your account. You can get cash from any Habib Bank ATM regardless of the fact that your
account is in a different branch or a different city. You can check your account balance and get a
10
printed mini statement. It is an extremely convenient way of banking, totally oblivious of time
and location. Money when you need it! The good thing about it is that it is a user-friendly
machine.
The usage of ATM in Pakistan is gaining ground perceptibly. The shared ATM network,
which has obviously come to stay, is contributing to the usage factor due to unprecedented
convenience of timeless banking. Habib Bank has a large ATM network and enjoys the privilege
of being a founder-member of a fast expanding shared ATM network.
Objectives of HBL value visa card
To build credibility and stronger relationship with the existing account holder by providing
convenience and value added offerings through HBL Value visa debit card.
To revenue increase revenue per customer through increased transactions at point of sale.
To strengthen spending side by migrating transactions to point of sale.
To reduce the workload on branches counters by use of ATMS and point.
It is an international product for the holders of our online branches.
It is backed by the extensive global network acceptability and power of visa international.
it is card holders direct link to cash in his personal HBL accounts through ATM/POS.
It is the card holder direct link to cash in his personal HBL account through ATM/POS.
No matter where in the world customer will be, his bank will be with him.
On payment through HBL value debit card the exact purchase amount is automatically
deducted from the linked HBL account.
Habib Bank Flexi Loans
With the rising cost of living, it is becoming increasingly difficult to make expensive
purchases or meet unexpected expenses. We can help you finance them with Habib Bank Flexi
11
Loans. You may avail a personal loan of up to SIX TIMES of you net take-home salary subject to
a maximum of Rs.300,000/- provided you work for an organization approved by HBL.
Quick processing
Minimum security
Maximum tenure
Minimum documentation
Low monthly installments
Advantages
Flexible tenure: 12, 24, or 36 months
Low rates
No processing fee
Credit Life & Disability Insurance
Repayment through easy and affordable monthly installments
Credit Life & Disability Insurance
Repayment through easy and affordable monthly installments
You determine the need, we help you finance
Documents required
Repayment schedule
Insurance enrollment cover from alico/nji for credit life insurance.
Assignment of legal heirs
Health declaration (in case of ALICO)
12
Declaration (in case of NJI)
Undertaking for non-utilization of loan for subscription in initial public offering.
Habib Bank Auto Finance

Habib Bank Auto Finance Lease offers the most flexible and convenient option to the
salaried as well as self-employed individuals to get a car of their choice. Now customers have the
flexibility of structuring their lease finance in terms of tenure, down payment and deferred
payment to suit their requirement.
INTRODUCTION
We have the geographic presence to launch asset based products.
HBL auto finance is based upon current market dynamics
Spirit behind auto finance is to capture large market share in consumer finance.
Auto finance diversify over revenues streams within RBG.
Auto finance is marketed as lease finance
It is the introduction of the concept of Islamic banking.
Features
Lease finance available for all new locally assembled cars and light transport
vehicle
Accommodating fixed lease tenures of 36, 48 and 60 months
Minimum down payment as low as 10%
Amount of leasing available up to Rs.1,500,000
13
Option of deferred payment up to 30% of the vehicle's invoice price to reduce

your monthly rental
Lowest processing charges
Best comprehensive insurance package at the most competitive rates which

includes third party liability and security against theft and terrorism, accident
cover for Rs.200,000/- any where in the world for the lessee & his/her family,
speedy process of claims and many more
No hidden cost involved
Pakistani National
Minimum 25 years and maximum 60 year of age at the maturity of the lease.
Businessmen with minimum experience of 3 years in the same business and
Eligibility
profession. For salaried individuals, a confirmed employee in any of our
Approved Organization List (AOL) with minimum 1 year of experience.
Remaining length of service should be at least equal to the lease tenure period.
Monthly rental should not exceed up to 30% of net take home income.
How to apply
Just visit any HBL branch or Habib Bank Auto Finance Centre for details and
application.
Submit complete set of application without any charges to the branch or the Auto
Center.
Sign the necessary documents on approval of the application
14
Payment is released within 24 hours of the submission of post-dated cheques and

initial payment after approval of the request.
HBL House finance
Why housing finance
Government policy to enhance housing activity.
To enhance the economic activity
Employment generation
Large target market
Low risk
Contribution to the income of RBG

Documents Required
Salaried Individual
Complete Application Form
Salary Certificate / Most recent Salary Slip
Bank Statement for past one year
Two Copies of NIC
Employment Certificate with date of joining
Two passport size photographs
Copy of the last paid utility bill (residence)
Self Employed / Professional
Complete Application Form
15
Two Copies of NIC
Two passport size photographs
Letter of proprietorship / Registered Partnership Deed
Certified latest Form A and Form 29, where applicable, along with articles and
Memorandum of Association
Copy of last paid utility bill (residence)
Bank Statement for the last 1 year
Eligibility Criteria
Pakistani National
Minimum one year with six months in current job.
Confirmed employee
Remaining length of service should be at least equal to the lease tenure period.
Age
I. Minimum 21 years
II. Maximum 60 years at maturity of loan
III. Maximum 60 years at maturity of loan for contract staff
Bank Assurance
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
16
Amaan is a pension plan that provides an 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. Plans are available for both under and over 45
years of age.
Tabeer
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.
Muhafiz Rupee Travelers Cheques
With the advantages of 100% free purchase and encashment, MUHAFIZ remains the
foremost choice with travelers wishing to carry cash in a safe and convenient way. MUHAFIZ is
equally suitable to both personal use and business transactions. Regardless of whether you have
an account with HBL or not, you can be a MUHAFIZ customer and relish the benefits of
Pakistan's leading Rupee Travelers Cheque, including:
Accessibility: Issuance from more than 700 branches across the country.
Convenience: Encashment at more than 1400 branches.
Choice: Available in denominations of Rs. 10,000, 25,000, 50,000 and 100,000.
Guarantee: Prompt refund in case of loss or theft.
Advantage: Convenience of transferability.
Facility: Safety of special security printing.
Freedom: Flexibility of no expiry date.

Structure of overall organization
17
As HBL is a banking company listed in stock exchange therefore it follows all the
legalities which are imposed by concerned statutes Mr. Muhammad Mansha is chairman & chief
executive of the company with a team of 10 directors and 1 vice chairman to help in the business
control and strategy making for the company.
Operational management of the bank is being handled by a team of 10 professionals. This
team is also headed by Mr. Muhammad Mansha. The different operational departments are
Consumer Banking & IT Division, Financial & inter branch Division, banking operation div, HR
& Legal Div, Financial Control & Audit Div, Credit management Div, Commercial Banking Div,
Corporate Banking Div, Treasury Management & FX Group and lastly Special Assets
Management (SAM) Group.
The organ gram is attached end of the report (Annex-B)
The administrational authority structure follow is as following:
President/CEO
Head Administration
Asst Manager Administration
Senior Admin officer Procurement
Admin Officer Logistics
Asst Admin Officer Stationery & Bill Process
Area Manager
Branch Manger
18
Review of Various Departments

Deposit Department
The function of deposit department is to collect deposits from customers. Following type of
deposits are offered by Habib Bank.
1) Term account
2) Current account
3) Saving account
4) Foreign currency account
1. Term Accounts
HBLs Term Accounts are offered in a variety of tenure with deposits as low as Rs.10,000.
Special Notice Time Deposit
F.I. Term Deposit Receipts
Munafa Plus Deposit (Certificates)
IPDC
Remittence Munafa Plus Deposit (Certificates)
Special Notice Time Deposit
7 days or 30 days (and over) notice
Minimum deposit of Rs. 10,000
Balances less than Rs. 1 million
Balances equal to and greater than Rs. 1 million
19
Returns range from 0.75% to 4% depending on notice period and amount
F.I. Term Deposit Receipts
3 month term deposit
Minimum balance of Rs. 10 million
Returns range from 0.75% to 2.25%
Munafa plus Deposit (Certificates)
Available in 3 month, 6 month, 1 year, 3 year, 5 year and 10 year terms
Profit disbursement (except for 3 & 6 month terms) is monthly, quarterly, biannually and on maturity
Returns range from 6.15% to 14%
IPDC
Minimum investment of Rs. 20 million except in the case of 1 month where

minimum investment is Rs. 100 million
Available in 1 month, 3 month, 6 month, 12 month and 3 year terms
Profit paid on maturity
Rates on IPD are conveyed on a daily basis by the Treasury Division
Remittence Munafa Plus Deposit (Certificates)
Available in 1 year, 3 year and 5 year certificates
Profit disbursement is monthly, quarterly, bi-annually, annually and on maturity
Returns range from 7.8% to 11%
10. Current Accounts

2.
Current Accounts
20
Our Current Accounts offer features that meet your daily banking needs. For more
information on these products,
Current Account
Basic Banking Account (BBA)
Current Account
Non-profit bearing
No transaction limits
Minimum balance of Rs. 10,000. If the average balance falls below this amount,
then service charges will be deducted
No restriction on anyone opening a Current Account (as long as regulatory

guidelines are met)
Features
A deposit payable on demand.
No Zakat deduction.
Can be opened in the name of
Individuals single or joint
Trusts
Firms
Clubs, associations
Private limited companies
Societies
Public limited companies
21
Institutions.
Basic Banking Account (BBA)
No minimum balance
No service charges
Requirements
For new customer give new Account opening form
For existing customer request convert CD/PLS account into BBA account.
The banks revised KYC form.
Copy of his CNIC.
FEATURES
Normal procedure for account
New account type (CD)
Minimum balance will be Rs.1000
No profit will be paid
No service charges
Accounts will be closed manually
BBA holders will be informed immediately
Maximum two deposits and two withdrawals transactions per month.
For each additional transaction except ATM withdrawal Rs.20 per transaction will
be recovered by the system.
TRF not allowed
22
Statements of account once in a year
The existing CD/PLS-SB Account holder can convert their account into BBA.
The existing account will be closed.
Savings Accounts
HBLs Savings Accounts cater to individual saving habits. To find the account best suited
to your needs,
PLS Savings Account
HBL Value Account
HBL Super value Account
Remittance Munafa Plus Saving Account
PLS - Special Saving Bank Deposit Scheme
PLS - Daily Munafa Plus Deposit Account
PLS Savings Account
Profit paid bi-annually
Minimum average balance of Rs. 10,000
Less than Rs. 20,000 earns 0.10% profit
Greater than Rs. 20,000 earns 1% profit
23
HBL Value Account
7% profit per annum*
Profit credited every 3 months
Deposit ranges from Rs. 10,000 to Rs. 100,000
Flexibility of withdrawals
Features
Every individual including existing customer can open
The minimum initial deposit Rs. 100,000
Maximum balance of Rs.500, 000
Profit rate 7.25% and expected annualized rate 7.40%
No profit on balance exceeding maximum limit
Quarterly credit of profit
Normal service charges if the balance falls below Rs. 10000
Maximum of two withdrawals per month.
In case of more two withdrawals the depositor will forfeit the profit for the month.
Cheque book 10 leaves will only be issued if value visa card facility is not
available
Can use the visa card at POS.
TRF not allowed
Recovery of withholding tax and Zakat as per rule.
HBL Super value Account
24
7.25% profit per annum*
Profit credited every 3 months
Deposit ranges from Rs. 100,000 to Rs. 500,000
Flexibility of withdrawals
Remittance Munafa Plus Saving Account
Remittance Based (no credit allowed except remittance)
Daily Basis Product
Tiered ]
Monthly profit
Minimum average balance of Rs. 10,000
Less than Rs. 20,000 earns 0.10% profit
Rs. 1 million and above earns 5% profit
PLS - Special Saving Bank Deposit Scheme
Daily Basis Product
Tiered
Monthly profit
Minimum balance of Rs. 20,000
Returns up to 8%
PLS - Daily Munafa Plus Deposit Account
Daily Basis Product
25
Tiered
Monthly profit
Minimum balance of Rs. 50,000
Returns up to 8%
Foreign Currency Accounts
HBL offers Foreign Currency Accounts in multiple currencies as savings and term
accounts are FC-SB and HYFFD (High Yield Foreign Currency Fixed Deposit)
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 in USD, EUR and GBP is 1,000
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.
These are indicative rates and are liable to change.
Taxes and other deductions as per applicable laws
26
Clearing Department
1
Introduction
Clearing House
Advantage of Clearing House
Function of Clearing Department
Procedure of depositing cheque
Types of cheques collected by clearing department
Scrutiny of pay in slip
Procedure after scrutinizing
Procedure of clearing at clearing house
27
Introduction
Every bank acts in two way i.e.
Paying Bank
Collecting Bank
Here in theory no legal obligation on a banker to collect cheques, drawn up to other

banks for a customer. It is, however, an important function of crossed cheques. A large part of
this work is carried out through the bankers clearing house wherever it is established.
Clearing house
A clearing house is the place where representatives, of all the banks get together for the
purpose of offsetting the inter bank indebtedness arising from the transfer of deposits by a
customer of a particular bank to another bank.
Advantage of clearing house
The advantages are manifold. It prevents the cost and waste involved in collection each
and every cheque and claim. That a banker holds against another, across the counter with all the
danger of loss in the transit incumbent upon it. Great economy is also achieved in the
employment of liquid cash by setting the difference by simpler transfer of credit from one
account to another, thereby minimizing the necessity of holding large cash balances, clearing
house works under the control of State Bank of Pakistan.
A banker has no legal obligation to collect cheques drawn upon other banks for the
customers, though modern banks have assumed this important function of their own choice.
Therefore, it is very important that since they have assumed this function, the banker should be
very careful in their performance, otherwise they will face more difficulties. So, if they provide
this facility when the cheques are crossed.
28
Function of clearing department

The following are the main functions of clearing department.
1
To accept transfer deliveries and clearing cheques from the customer of the branch and to
arrange for their collection.
To arrange the payment of cheque drawn on the branch and given for collection to any
other branch of Habib Bank of Pakistan or any other members, or sub-members of the
local clearing house.
To collect amounts of cheques drawn on members, sub-members of the local clearing

house, sent for collection by those Habib Bank Limited, branches which are not
represented a the local clearing house.
Procedure of depositing cheques in clearing department

Whenever a customer wants to deposit cheque, etc, he fills a pay in slip and hands it over
the counter along with the instruments he wants to deposit with bank. As far as possible, the
customer desire that on of the staff member fill in a slip for him, he should be obliged promptly.
The smaller portion of the perforated pay in slip is handed over to the depositor and the portion
becomes the regular portion of a credit voucher.
Types of cheques collected by clearing department
a. Transfer Cheques
Transfer cheques are those cheques, which are collected and paid by the same branch of
bank.
b. Transfer Delivery Cheques
Transfer Deliver cheques are those cheques, which are collected and paid by two different
branches of a bank, situated in the same city.
29
c. Clearing Cheques
Clearing cheques are those cheques in which the payee (Person who deposit cheques for
collection) and the drawer of a cheque maintain the account with different banks. When the
cashier receives the cheques, which are to be deposited for clearing purpose, the following points
must be verified.
1) The instruments should be neither stale nor post dated.
2) If the instruments is crossed, not negotiable, it can be for the third party (can be endorsee of
an order cheque, or a holder of bearer cheque).
3) The instrument should not bear any unauthorized alteration.
4) The amount in words and figures should be the same.
5) The instruments should be drawn on a member, or any of local branches.
6) If the cheque is crossed "Account payees" "Account payee only" or "Payees Account", it
should only be accepted for collection for the payees account.
7) The cheques or drafts should not be crossed specially to any other bank.
8) A cheque payable to one of the joint account holder should not be collected for the joint
account without the payees endorsement, or consent.
9) A cheque payable to a firm should not be accepted for credit to a partners account.
A cheque drawn by a customer in the capacity of an agent, Attorney, or Manager of his
company or firm, should not be collected for credit to his personal account.
10) Pay orders, although negotiable, should not be collected for third parties.
11) Do not collect an instrument in the accounts of an agent, or of the
servant of the payees
of endorsee of the instruments.
30
12) Mail transfer Receipts pay ships and treasury receipt should not be collected for persons
other than the payee.
13) If an account is new, or the balance or operation of the account is not satisfactory, satisfy
yourself about the titles of the customer to the instruments before the titles of the customer to
the instrument before accepting the deposit.
14) Branch agents permission should be obtained before accepting a third party cheque or draft
for credit of the account of the staff member.
15) If the payee is a government department, government official, or a trust account, the
instrument cannot be collected, but for the payees account.
16) If the payee of an instrument is Habib Bank Limited, it can be collected for credit of the
drawers account, or the amount of the instrument may be utilized as desired by the drawer in
writing.
17) Cheque payable to a trust, account should not be collected for credit to at trustee account.
18) All the endorsement should be regular, and on endorsement should be missing. After the
cashier scrutinizes the cheques he must also scrutinize the pay in slip.
Scrutiny of pay-in-slip
The following steps are involved in the scrutiny of pay in slip.
1
On both the counterfoil and the pay in slip following should be checked.
i. Date of Deposits
ii. Account number
iii. Title of the account
iv. The cheque/number and the drawer bank/name.
v. Total amount in words and figures
31
Customer should use separate pay in slip for transfer, transfer delivery, and clearing
cheques.
The amount noted should be the same as the amount of the instruments, and the amount
in words and figures should be same.
Procedures after scrutinizing

After scrutinizing the cheques and other deposit instruments and paying slip at the counter
the following procedure is under taken by cashier if he is satisfied.
1
Fixing the stamp.
Scrutiny, and receipt by the authorized officer
Returning the counter foil to the depositor.
Certificates and confirmation by the officer-in charge of the department.
Separating the cheque into transfer delivery, and clearing cheque.
Procedure of clearing at clearing house

The mechanism of setting inter bank indebtedness operates as follows. Clerks representing
various banks meet at a common place, the clearinghouse, and every day. Every clerk then
delivers to the others the cheques and the other claims which their respective banks hold against
his banks hold against his bank cheques and other documents dishonored will be returned to the
representative of the respective bank. The various amounts of receipts and deliveries are now
added up and a balance is struck there in and the final settlement is effected by the supervisor of
the clearing house by transferring balance kept and the central bank by these various clearing
bank.
Bills Department
Bills department performs the following functions.
32
a. Inward Bills for Collection (IBC)

b. Outwards Bill for Collection (OBC)
Inward bills for collection (IBC)
These are bills or cheques etc. which are collected locally. They are received from
outstation branches banks and parties.
Demand draft
If refers to the payments of money on demand of the holder of draft. Demand draft
includes DD issues and DD payable.
Outwards bill for collection (OBC)
Clean bills.
These are negotiable instruments, drawn on outstation branches, bills sent for collection
on behalf of the customers i.e. cheques, drafts or treasury bills etc.
Documentary bills.
These are bills accompanied by documents such as R.R.T.R Bills of landing etc. having
title to goods, collected by the bankers on behalf of their customers.
Pay slip.
Pay slip is an instrument in receipt, issued by the bank in the following cases:
a. On account of expenditure incurred by the bank.
b. On account of refund of a payment to a persons under certain circumstances.
Pay order.
Pay order is issued to other banks for collection of make the payment as said.
Remittance Department
33
Remittance department performs following functions:

i. Mail Transfer (MT)
ii. Telegraphic transfer (TT)
iii. Demand Drafts (DD)
Mail transfer (MT)
When a customer request the bank to transfer his money from one branch of bank to
another branch of the same bank or from one city to another city to the same bank or any other
bank. Customer fills the form given by bank. If the customer has an account with that amount as
mentioned in the application form then concerned officer will undertake the following procedure
to make the mail transfer complete.
i. Branch Mail Transfer form
ii. Receiving Branch Register copy
iii. Issuing Branch register copy
iv. Beneficiary advice
v. Advice to Customer
In case where the customer is not account holder of the bank then the customer will
have to deposit the amount which he wants to transfer under Mail. Then the above said procedure
will be done.
Telegraphic transfer (T.T.)
This type of transfer is simple. After filling the application form the concerning officer
shall fill the telegraphic transfer form. Then it is sent to the required bank which on receiving it
immediately makes the payment to the customer and after wards the voucher is sent to that bank
by ordinary mail.
34
Demand draft (D.D.)

Demand draft is just like cheques and issued when the customer wants to take cash with
him personally. The idea behind it is to avoid the risk and burden of currency notes in huge
quantity. Demand draft can easily be handled whatever amount it has and the money can easily
be taken from the bank when it is presented. In fact, the bank persuades the customer to transfer
money by drafts and avoid the risk of frauds involves in M.T and T.T Draft is only issued when
the bank knows customer and bank has the confidence in him.
Sources 0f Funds
To show the sources of funds data have been taken from the financial statements as per
desired by the university,
Table No. 13.1
Balance sheet As at Dec 31, 2008
Detail
Assets
Deferred tax assets-net
Other assets net
RS. 000
2,008
19,810,476
RS. 000
2,007
17,868,761
RS. 000
2,006
172,373
11,031,450
RS. 000
2,005
191,967
5,464,426
RS. 000
2,004
6,154,370
35
Liabilities
Borrowings
22,663,840
39,406,831
292,098,06
23,943,476
27,377,502
7,590,864
229,345,178 221,069,158
Deposits and other accounts

Sub-ordinate loan
Long term debt
330,274,155 6
479,232
43,917,090 51,129,324
257,461,838
1,597,440
1,598,080
35,114,972 35,989,102
Represented by:
Share Capital
6,282,768
6,282,768
5,463,276
4,265,327
3,371,800
55,747,952
41,390,642
23,734,296
14,890,064
Contingencies and Commitments 59,064,331
1,598,720
14,116,863
Table No. 13.2

Profit and Loss Account As at Dec 31, 2008
Detail
Mark-up / return / interest earned
2,008
2,007
2,006
2,005
2,004
RS. 000
RS. 000
RS. 000
RS. 000
RS. 000
40,043,824
31,786,595
25,778,061
17,756,232
9,083,863
Above shown tables 16.1 & 16.2 are taken from the balance sheet and also from the
profit and loss account statements to show the sources of funds as per required by the
university.
The most important sources of funds are share capital, assets and some kind of liabilities.
Share capital is growing significantly day by day as per shown in the Table no. 16.1 form
year 2004 to year 2008 it has been almost doubled which is a good sign of HBLs stability.
36
in the segment of liabilities deposits and other accounts are also seemed improved year by
year as these are called the back bone of banking industry. And other figures of also shown
comparatively year by year in the tables above given for quick analysis.
Generation of Funds
To show the generation of funds data have been taken from the financial statements as
per desired by the university,
Table No. 14.1
Balance sheet As at Dec 31, 2008
Detail
Assets
Operating fixed Assets
RS. 000
2,008
17,263,733
RS. 000
2,007
16,024,123
RS. 000
2,006
9,054,156
RS. 000
2,005
8,182,454
RS. 000
2,004
7,999,821
330,274,15
292,098,06
257,461,83
229,345,17
221,069,158
Deposits and other accounts

Liabilities against assets subject
to finance lease
Represented by:
Inappropriate Profit
9,193,332
5,130,750
5,530,973
210,662
Liabilities
165,208
37
Surplus on revaluation of assetsnet of tax
5,423,769
6,191,189
9,705,519
5,187,639
5,354,323
Table No. 14.2

Detail
RS. 000
2,008
11,560,74
RS. 000
2,007
RS. 000
2,006
RS. 000
2,005
RS. 000
2,004
Mark-up / return / interest expensed

Net mark-up / Interest income after
0
24,463,96
7,865,533
4,525,359
2,781,468
13,830,40
2,057,640
provision
20,856,011
20,069,965
6,746,533
income
Dividend Income
Income from deeling in foreign
2,866,729
617,554
2,634,610
632,300
2,311,235
811,801
2,448,950
480,344
1,992,356
378,908
currencies
Gain on sale of securities net
Unrealized loss on revaluation of
727,564
740,429
693,408
1,500,865
692,010
605,865
531,455
866,895
492,738
804,419
(103,198)
942,362
5,791,440
(13,105)
1,000,149
6,448,227
570,505
4,991,416
851
1,084,576
5,413,071
(11,440)
576,007
4,232,988
Non-mark-up / interest income

Fee, commission and brokerage
investments classified as held for

trading
other income net
Total non - mark-up / interest
38
income
profit and loss account statements to show the generation of funds as per required by the
university.
The difference between sources of funds and generation of funds can be
distinguished as that sources of funds are directly related to the funds which are outsider
funds, and generation funds are those funds which are earned by using the assets/operations
of industry.
As shown in the table 14.1 fixed assets and deposits are growing day by day, the real impact
of these accounts that bank can manage more funds or bank is able to grow more funds if
required.
39
Allocation of Funds
To show the allocation of funds data have been taken from the financial statements as per
desired by the university,
Table No. 15.1
Balance Sheet
Balance Sheet Detail
2061/62
2004/200
2062/63
2063/64
2064/65
2065/66
5
Rs. In
2005/2006
Rs. In
2006/2007
Rs. In
2007/08
Rs. In
2008/09
Rs. In
Million
Million
Million
Million
Million
Capital Structure
Authorized Capital
Issued Capital
1000
650
1000
772.2
1000
810.81
2000
1013.51
2000
1216.22
Liabilities
Issued and Paid Up Capital
Reserves & Surplus
Debentures
Borrowings
Deposits
Others
Total
643.5
898.25
360
146.05
24814.01
556.35
27,418.16
772.2
993.98
360
144.62
26490.85
698.74
29,460.39
810.81
1335.69
360
235.97
30048.42
728.26
33,519.14
1013.51
1499.48
860
83.18
31842.79
876.57
36,175.53
1216.22
1903.67
500
0
34681.35
1019.1
39,320.32
Table No. 15.2

Detail
Mark-up / return / interest expensed
RS. 000
2,008
11,560,740
RS. 000
2,007
7,865,533
RS. 000
2,006
4,525,359
RS. 000
2,005
2,781,468
RS. 000
2,004
2,057,64
40
0
Provision for dimlnution in the
value of investments net
Provision against loans and
2,683,994
105,269
121,197
(98,982)
(172,876)
advances net
Bad debts written of directly
Non-mark-up /Interest expenses
1,335,127
-
2,959,583
199
1,014,540
47,000
1,242,153
1,184
443,795
8,771
7,244,20
Administrative expenses
Other Provision / (reversal)-net
other charges
Total Non-Mark-up / interest
7,546,878
10,120
830,839
5,426,116
(3,743)
573,830
6,482,592
11,411
66,708
6,459,490
(72,740)
178,841
0
149,593
41,864
7,435,65
expenses
Extra ordinary / unusual item
8,387,837
-
5,996,203
-
6,560,711
-
6,565,591
340,598
7
513,852
1,555,76
Taxation-
7,341,257
6,442,356
5,701,443
4,611,359
Current Year
profit and loss account statements to show the allocation of funds as per required by the
university.
As for as the banking productivity is growing day by day the allocation of funds is also
increasing which is infect the hint of its stability and exposure of the industry which is being
observed from the year 2004 to year 2008 in the HBL as above statements are shown.
Future Prospects of the Organization
HBL Bank is a leading commercial bank of Pakistan. It is among the five largest
banks of Pakistan. These banks dominate the banking structure of Pakistan. In the previous
years HBL has shown a significant growth. It is a first Pakistani organization which was
listed on London stock exchange. In 2008 it received a euro money award for best bank in
41
Asia 2008. Future prospects for HBL are very bright. HBL has a shown 43% growth in FY
2007.With SBP raising the upper limit of retail exposure to PkR75mn (not be more than 2%
of gross retail portfolio of the bank) in case of consumer loans and small business loans,
HBL has increased its penetration this high margin segment.
Despite the challenges of declining demand & rising NPLs due to higher interest rate
vulnerability and late entry along with established brand equity of existing players like UBL,
Consumer financing continues to be a profitable niche for HBL. HBL is in process of
launching more innovative products which will help HBL bank in growing more. As the size
of HBL is very large and it comes under the five largest banks there are much chances of
growth for HBL due to its strong muscles because of following also
One Of The Highest Roe Among Tier 1 Banks
Highest Net Interest Margins
Lowest Average Deposit Rates
High Consumer Loan Growth
Extensive Branch Network
Short-Falls/weaknesses
When we analyze profit and lose we can easily observe that the non interest income fee
commission brokerage is on decreasing side each year there is a need to relocate this area.
Same in the P &L Major increase found in markup interest expenses it was 15.45 in
2004 and slightly recovered in 2005 but after it sharply increased till 2008.
42
Other charges shown in the Profit and Loss are increasing continuously, to smooth
the process should take measurements, issue notes them, recovery system should be
finalized in way that can be gripped for the benefit of bank.
Its EPS growth rate is decreasing over the past year comparing to other banks like
UBL.
Though its investment is increasing but 40% are confined to investment in

government securities. This reduces its returns.
HBL has threat from banks like UBL which has 67% low cost deposit base.
HBL has threat from banks like UBL which has 67% low cost deposit base
Cash and balance with treasury banks increasing but that is a need to reduce there
balance with other banks.
Contingencies and commitments is increasing each year it means company has no

sufficient funds. There is need to control the contingencies and overcome the risk
faced by the bank.
43

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Internship Report on Operation Management

Habib Bank Limited

Allama Iqbal Open University

Internship Report on HBL

HABIB BANK LIMITED

DEPARTMENT OF BUSINESS ADMINISTRATION ALLAMA

Internship Report on HBL

Internship Report on HBL

NATURE OF THE ORGANIZATION

PRODUCTS & SERVICES

STRUCTURE OF OVERALL ORGANIZATION

REVIW OF VARIOUS DEPARTMENTS IN TERM OF

FUTURE PROSPECT OF THE ORGANIZATION

LIST OF TABLES & ILLUSTRSTIONS

Internship Report on HBL

Allocations of funds(Table no. 15.1)

Objectives of studying the organization

Internship Report on HBL

Internship Report on HBL

President & Chief Executive Officer

Mr. Sajid Zahid

Internship Report on HBL

History of Habib Bank

Internship Report on HBL

Open Different accounts for different peoples

Accepting various types of deposits

Granting loans & advances

Internship Report on HBL

Collecting cheque and bill of exchange for the customers.

Transfer of money from place to place.

Accepting bills of exchange on behalf of customers.

Purchasing shares for the customers.

Undertaking foreign exchange business.

Furnishing trade information and tendering advice to customers.

Internship Report on HBL

Treasury and Capital Markets

HBL Asset Management Co.

MNET Services (PVT) Ltd,

HBL Trade Services Ltd, (HK)

Muslim Commercial Financial Services

Adamjee Insurance Co.

First Women Bank

Internship Report on HBL

Balance Transfer Facility

Internship Report on HBL

Internship Report on HBL

Up to 30% of your spending limit as cash advance

Travel accident insurance coverage worth Rs. 2.5 million

Foot feature to help avoid misuse

Internship Report on HBL

Internship Report on HBL

Low monthly installments

Flexible tenure: 12, 24, or 36 months

Credit Life & Disability Insurance

Repayment through easy and affordable monthly installments

Credit Life & Disability Insurance

Repayment through easy and affordable monthly installments

You determine the need, we help you finance

Insurance enrollment cover from alico/nji for credit life insurance.

Assignment of legal heirs

Health declaration (in case of ALICO)

Internship Report on HBL

Declaration (in case of NJI)