HBL Internship Report

HBL Internship
Report
Submitted by: Muhammad Ali Raza

Contents
History of HBL:....................................................................................................................... 7
Post Nationalization Era: ......................................................................................................... 9
Time Line and Growth of HBL: ............................................................................................ 14
Profile of HBL: ...................................................................................................................... 17
Vision: ................................................................................................................................ 17
Mission: .............................................................................................................................. 17
Objectives: ......................................................................................................................... 17
HBL Strategic Overview: ...................................................................................................... 18
HBL Values: .......................................................................................................................... 18
Strengths of HBL: ................................................................................................................. 19
Current Scenario of HBL: ..................................................................................................... 23
Credit Rating ...................................................................................................................... 23
Branch Network ................................................................................................................. 23
Islamic Banking: ................................................................................................................ 24
Management in HBL: ............................................................................................................ 26
Hierarchy Structure of HBL: ................................................................................................. 27
Board of Directors: ................................................................................................................ 28
Members in Management: ..................................................................................................... 29
Chain Of Command: ............................................................................................................. 31
Different Groups in HBL Banking: ....................................................................................... 32
Commercial Banking Group (CBG): ................................................................................. 32
Corporate & Intuitional Banking Group: ........................................................................... 34
International and Overseas Banking: ................................................................................. 34
Retail Banking Group (RBG): ........................................................................................... 37
Policy Making Styles of HBL: .............................................................................................. 40
Departments in HBL: ............................................................................................................ 43
Deposit Department: .......................................................................................................... 43
Credit Department .............................................................................................................. 47
Remittance Department ..................................................................................................... 51
Clearing Department .......................................................................................................... 54
Cash Department ................................................................................................................ 56
Foreign Exchange Department .......................................................................................... 60
Account department ........................................................................................................... 62
HBL Marketing Mix:............................................................................................................. 65
Product and Services: ......................................................................................................... 65
Deposits: ......................................................................................................................... 65
Advances: ....................................................................................................................... 70
Debit Cards: .................................................................................................................... 72
Credit Cards: ................................................................................................................... 74
Phone Banking:............................................................................................................... 77
Trade Finance: ................................................................................................................ 80
Corporate Product and Services: .................................................................................... 81
Price ................................................................................................................................... 84
International Banking: .................................................................................................... 84
Domestic Banking .......................................................................................................... 85
Consumer Financing: ...................................................................................................... 87
Place ................................................................................................................................... 89
Head Office: ................................................................................................................... 89
Promotion ........................................................................................................................... 90
Social Responsibility: ..................................................................................................... 90
Health Services: .............................................................................................................. 91
Sports Division: .............................................................................................................. 92
HBL Swot Analysis: .............................................................................................................. 94
Strengths: ........................................................................................................................... 95
Weakness: .......................................................................................................................... 96
Opportunities: .................................................................................................................... 96
Threats:............................................................................................................................... 97
Positioning: .......................................................................................................................... 103
HBL Marketing Strategies .................................................................................................. 105
Financial Analysis: .............................................................................................................. 108
Horizontal Analysis: ........................................................................................................ 114
Vertical Analysis: ............................................................................................................. 115
Ratio Analysis: .................................................................................................................... 117
Internship Activities: ........................................................................................................... 136
First Week (General Banking): ........................................................................................ 136
Second Half of First Week (Accounts Department): ....................................................... 138
Second Week (Clearing Department): ............................................................................. 143
Third and Fourth Week (Trade Department): .................................................................. 144
Fifth Week and Sixth Week (Credit Department) ........................................................... 146
Leading Problems in HBL: ................................................................................................. 153
Recommendations & Conclusion ........................................................................................ 153
HBL Introduction
Part 1: Introduction
History of HBL:
At the time of independence, the areas which now constitute Pakistan were
producing only food grains and agricultural raw material for Indo-Pakistan
subcontinent. There were practically no industries, and whatever raw material was
produced was being exported from these areas. However commercial banking
facilities were provided fairly well here there were 487 offices of scheduled bank
in the territories now constituting Pakistan.
Habib Bank is the only Pakistani Bank, which existed in the pre partition era. The
bank was established by the Muslim community in India. At that time all local
banks were owned by Hindus, so need for a bank for the Muslim community was
realized and upon the instruction of Quaid- e-Azam Muhammad Ali Jinnah , a
businessman named Ismail Habib established the bank in 1941 with a network of
three branches, established in Bombay, Calcutta and Karachi.
As a new country without resources it was very difficult for Pakistan to run its own
banking system immediately. Therefore, in accordance with the provision of
Indian Independence Act of 1947, an Expert Committee recommended that the
th
Reserve Bank of India should continue to function in Pakistan until 30
September 1948, so that the problems of time and demand liability, coinage,
currencies exchange etc. be settled between India and Pakistan.
1941 Mohammed 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, with HO in Bombay 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
Institute of Business Administration 2

establishment of Pakistan. Habib Bank also played an important role in channeling

relief funds to the people hurt in the communal riots and violence that preceded the
departure of the British from India. Habib Bank Limited established itself in
Bombay (Mumbai) in 1941.
After the announcement of Independence Plan in June 1947, the Hindus residing in
the territories now comprising Pakistan started transferring their assets to India.
Moreover, the banks including those having their registered offices in Pakistan
transferred them to India in order to bring a collapse of the new state.
After Pakistan was born in 1947, Habib Bank, at the urging of Governor-General
Jinnah, moved its headquarters to Karachi, Pakistan's first capital. After the
partition of the subcontinent when Pakistan came into existence, Habib Bank used
to perform the treasury functions of the State, till the time, the Central Bank was
instituted. The Habib family owned and managed the bank until the Pakistan
government nationalized it on 01 January 1974.
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.
On June 13, 2002 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.

The network however kept growing day after day and soon this institution became
the backbone of the country‟s economy. The contributions of the pioneers of this
bank in promoting the Banking Industry in Pakistan are innumerable. It was
through their efforts that event the people living in far-flung, remote areas of the
country became aware of banking. Even in the big cities, the network spread at an
immense rate and in a short span of almost thirty years, Habib Bank, the leader in
banking operations in Pakistan, established almost 1800 branches within Pakistan
and abroad.
Post Nationalization Era:
In 1974, as a part of national restructuring, the bank was nationalized and the top
management was taken over by officials appointed by the government from within
the bank. This policy continued till Feb 1996. During this era, the bank‟s
contribution towards social responsibility remained persistent. The network kept
growing and the social obligations remained beihg discharged up to the ethical
standards. In its endeavors Habib Bank‟s initiated a number of schemes for the
uplift of the society. The initiatives launched during this period, of significant
importance were:
 School Banking, through which school going children were educated to

build concepts of savings. 

 Opening of Schools in mosques at primary level. The number of such
schools went up to 61 with average attendance of over 68 students per
school in Punjab province. 

 Industrial Homes to upgrade the vocational skills of women in rural areas
were established. This was a part of the plan for expansion of female
education. The areas where such institutions were established included
Wazirabad, Bahawalpur, D.G Khan, Shujabad, and Shamsabad, Multan. A
committee of local notables ran these units. 

 Participation in sports by employing sportsmen from the country. Not

only did the bank provided job opportunities for players but also conducted
/sponsored a number of sports events in the country. 
Apart from this, technology advancements were also made giving new
dimension to the Banking sector in Pakistan. Habib Bank was a pioneer of
computerization in Pakistan. This was the first local bank, which started
computerized operations. Later on, other banks and organizations were also
encouraged to improve their performances by adopting the modern techniques
and switching from manual work to automation.
Certain schemes introduces by Habib Bank were lauded by the International
Banking Community and received the following international awards.
 American Gold Coin Award 1975

The Bank Marketing Association, Chicago USA gave
this award to Habib Bank for its Prize Savings Account Scheme in 1975.
The Scheme helped increase the rat of domestic savings and curbed
wasteful expenditure on the part of the savings account holders.
 Gold Mercury Award, USA 1982
This was conferred on the bank for its pioneering role
and outstanding services in banking
 Chamber of Commercial Istanbul, Gold Medal, 1984
Habib Bank was awarded a Gold Medal and Certificate
in recognition of its outstanding performance and valuable contribution
towards the economic development in Turkey.
The upward trends prevailed till late 80‟s and phenomenal growths were
witnessed in the performance of the Banking Industry. HBL‟s share was at
the top among nationalized commercial Banks. A glance at the post
nationalization developments of the NCBs up to 1989, given at the next
page would explain the position of HBL and its competitors.

Table 2.5 is indicative of the fact that HBL share in the total profit of all the banks
has always been over 50%.
Another important event in the history of the bank was merging of Standard Bank
Limited at the time of nationalization. Later in 1992, three branches of the former
BCCI in Pakistan were taken over by the Bank under the Scheme of
Amalgamation approved by the Federal Government and State Bank of Pakistan.
The Bank managed these branches from March 14 1992 to December 31 1992.
However the assets and liabilities of the former BCCI branches were transferred to
wholly owned subsidiary of the Bank “Habib Credit and Exchange Bank” which
commenced operations from November 1, 1992.
It can also be observed that although the overall positions of deposits, finances,
investments equity and profits had shown significant improvement, it is pertinent
to note that the percentage increase in profits did not commensurate with these
figures. The key factors responsible for this downward trend were:
 Overall decline in economic conditions 


 Inadequate and inequitable distribution of credit 

 Irrational investment with low returns 

 Lack of competitive spirit amongst NCBs 

 Ineffective monitoring and supervisory controls 

 Increasing percentages of unserviceable loans 

 Deteriorating services standards 
In the early 90‟s one of major objectives of the bank remained at providing job
opportunities. On the occasion of Golden Jubilee of Bank in 1991, services of
more than 5500 temporary employees who had been working on daily wages were
confirmed. The total staff strength, as a result of this policy, increased to 32,770 in
1991 as against to 27,254 in 1990. This act put the bank in further constraints as
regards the overall operation cost in concerned.

Remedial measures to redress the situation were not taken as a result of which the
condition kept on deteriorating till mid 90‟s when in 1996-1997 for the first time in
Habib Bank’s History, the management of the bank was handed over to
professional bankers hired from foreign banks.
Restructuring Results:
HBL, with its professional new management is in the process of turning around the
Bank. In a short time frame, the results indicate a strong potential for turn around
and value creation. The new management has taken the following bold steps in
restructuring the Bank and its operations;
 Successfully negotiated with SBP to inject PKR. 9.7 billion in tier 1 capital
(capital injection is reflected in the 1998 balance sheet). 

 Reduced Staff by over 25% and closed 219 branches in 1997. 

 Re-engineered the credit approval process. 

 Implemented an aggressive remedial management program. 

 Instituted international financial reporting standards. 

 Focused on rebuilding the customer franchise. 

 Closed 3 million non- remunerative accounts 

 Continues to plow bank profits into the institution to enhance capital base. 

 Developed a customer franchise by creating customer focused business
groups and launching customized products/marketing techniques. 

 Adopted international risk management methods, which require rigorous
credit administration 

 Introduced pay for performance measures and structured training programs
for all employees 

 Developed a plan to upgrade the information and communication
technology 

 Developed country specific programs to build the Bank’s international

brand equity. 

 Introduced new products like Crore Pati Deposit Scheme and Muhafiz
Traveler Cheques. 
Status and Nature of Business:
HBL is a Banking Company, which is engaged in Commercial & Retail Banking

and related services domestically and overseas. It is Pakistan‟s second largest
commercial bank, having a country wide and international branch network. HBL
has full service license covering commercial, retail banking, consumer an
investment banking activities in Pakistan and most of the other countries where it
is present.
HBL is one of the largest commercial banks of Pakistan. It accounts for a

substantial share of the total commercial banking market in Pakistan with a
network of 1705 domestic branches; 55overseas branches in 26 countries spread
over Europe, the Middle East, Far East, Asia, Africa and the United States; 3 HBL
wholly owned subsidiaries namely Habib Bank Financial Services (PVT) LTD.
Karachi, Habib Finance International LTD (Hong Kong) and Habib
Finance Australia LTD._ Sydney; 2 Joint Ventures namely Habib Nigeria Bank
Ltd. (40%) and Himaliyan Bank Ltd. (20%) and 2 representative offices in Iran
and Egypt.
HBL has developed a strong brand name during its 60 years of operation, both in
the domestic and the international market place. It now has an established
customer base of more than five million accounts in Pakistan. And the
international operations span 26 countries in four continents.
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 and loans to small industries, traders and farmers.
International operations were expanded to include the USA, Singapore, Oman,
Belgium, Seychelles and Maldives and Netherlands.
On June 13, 2002 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 shareholdings in HBL, against an
investment of PKR 22.409 billion (USD 389 million). On February 26, 2004,
management control was handed over to AKFED nominees, including the
Chairman and the President/CEO and three Government of Pakistan nominees.
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 both urban and rural centers. Using its branch network as a
key competitive advantage, its business concentration has remained consistent for
Retail, Consumer, and Corporate and SME clients.
Time Line and Growth of HBL:
1. 1941__Commenced operation with 25000 rupees in Bombay

2. 1942__deposits had reached 20 million rupees
3. 1943__Moved operations from Bombay to Karachi on the Quaid’s request.
4. 1946__First Banking training scheme started for the Muslim Youth.
5. 1947__HBL Head office transferred to Pakistan
6. 1966__Silver Jubilee of HBL
7. 1974__Bank‟s Nationalized
8. 1991__Golden Jubilee of HBL
9. 1997__HBL Reorganized
10. 2004__HBL privatized
11. 2006__Largest Private Commercial Bank in Pakistan with 1477
branches nationwide and 65 international branches.
12. 2008__Declared Best Bank.

13. 2010__ Among top 500 global Financial Brands.

14. 2012__ 'AAA' credit rating and 1500+ branches.
HBL pioneered installing the first mainframe computer in Pakistan, followed
by the first ATM, and more recently, internet banking facilities in all 1425
domestic branches.
Pioneers in Innovative Scheme:

1. 1951__Tele-printer service b/w branches
2. 1957__Rupee Travelers Cheques
3. 1959__Evening Banking Service
4. 1962__School Banking
5. 1964__Drive in Banking
6. 1966__Computer Service
7. 1966__Credit Card Scheme
8. 1968__Rural Mobile Banking
9. 1973__Foreign Currency Account
10. 1974__Prize saving Account Scheme
11. 1975__Deposit Growth certificate
12. 1988__Auto Cash Teller Machine
13. 1991__Gold Card Scheme

Part 1: Profile
HBL Profile

Part 1: Profile
Profile of HBL:
Vision:
“Enabling people to advance with confidence and success”
This is the recently launched vision of the bank. The HBL vision focuses on the
“people” living on the globe; it has power to operate in all societies internationally,
as the bank itself is an international bank. The vision has very broad scope without
any limit of boundaries; and thus a very broad target market to serve. “Advance”,
“confidence” and “success” are its other features with great power. If we enable
our customers and people in the societies to grow and succeed in the real sense,
they will be attracted to do business with the bank and we will become their first
choice. The bank does not help them in an ordinary manner rather with
“Confidence” and “Trust”. And if we could develop a relationship with them based
on trust we will have great competitive advantage. Trust has great speed and
power. It is indeed a right vision in the right time.
Mission:
“To make our customers prosper, our staff excel and create value for
shareholders”
Habib Bank‟s Mission is to be recognized as the leading financial institution of
Pakistan and a dynamic international bank in the emerging markets, providing our
customers with a premium se of innovative products and services, and granting
superior value to our stakeholders, shareholders, customers and employees.
Objectives:
1. To achieve sustained growth and profitability in all areas of business.
2. To develop a customer-service oriented culture with special emphasis on
customer care and convenience

Part 1: Profile
3. To effectively manage and mitigate all kinds of risks inherent in the

banking business.
4. To maximize use of technology to ensure cost-effective operations, efficient
MIS, enhanced delivery capability and high service standards.
5. To mange the Bank‟s portfolio of businesses to achieve strong and
sustainable shareholder returns and to continuously build shareholder value.
6. To explore new avenues for growth and profitability.
HBL Strategic Overview:
1. Managing Growth
2. Managing Risk
3. Managing Quality
4. Portfolio Management & Growth
5. Risk Optimization
6. Proactive &Customer Focused
7. Attrition Management
8. Effective Internal control
9. Cost Management
HBL Values:
HBL values are based upon the fundamental principles that define its culture and
are brought to life in its attitude and behavior. It is its values that makes us unique
and stem from five basic principles.
Excellence:
The markets in which HBL operate are becoming increasingly competitive and its
investors now have an abundance of choice. Only through being the very best – in
terms of the service it offers, its products and premises – can it hopes to be
successful and grow.

Part 1: Profile
Integrity:
HBL is an asset management company in Pakistan and its success depends upon
the performance of the Fund(s) which are under management and its investors and
society in general expect it to possess and steadfastly adhere to high moral
principles and professional standards.
Customer Focus:
HBL needs to understand fully the need of its investors and to adopt its
products and services to meet these. It must strive always to put the satisfaction
of its investors first.
Meritocracy:
HBL believes in giving opportunities and advantages to its employees on the basis
of their ability. It believes in rewarding achievement and in providing first class
career opportunities for all.
Progressiveness:
HBL believes in the advancement of society through the adoption of enlightened

working practice, innovative new products and processes and a spirit of enterprise.
Strengths of HBL:
Following are the strengths of the Habib Bank Limited

1. Good will
2. Professional Management
3. Large Network
4. Overseas network, presence across the world
5. Large customer base/ Large deposit base
6. Skilled Human Resource

Part 1: Profile
Dominant Market position:
1. HBL has the biggest advances portfolio in Pakistan, catering to all sectors
of the economy and all the market segments i.e. corporate, consumer, SME,
agriculture and retail
2. Aggressively focusing on product penetration across all segments in
particular infrastructure and project finance, consumer, agriculture and
SME.
3. HBL won Best Emerging Market Banks Award in Pakistan 2010.
4. HBL has 1500 branches.
5. HBL credit rating is "AAA".
MARKET STANDING
Key Banking Statistics

1993-1998
Table2.1 [Deposits] Rs. In Millions
1996 1997 1998 1999 2000 2001

HBL 8,211 16,423 27,958 54,966 75,011 105,243
UBL 6,392 14,305 21,075 41,503 53,937 63,517
NBP 7,071 14,209 21,384 40,611 57,462 79,823
MCB 2,505 5,417 9,887 15,705 21,590 25,325
ABL 1,460 2,665 4,365 6,875 10,058 16,637
Total 25,639 53,019 84,669 159,660 218,058 290,545

Part 1: Profile
Table2.2 [Advances]
1996 1997 1998 1999 2000 2001

HBL 5,864 10,115 16,216 31,636 48,003 41,767
UBL 4,463 8,522 13,952 24,991 35,061 37,967
NBP 5,231 8,481 11,803 18,990 31,264 40,534
MCB 2,102 3,811 6,448 10,898 13,803 15,548
ABL 1,079 1,922 3,187 5,108 5,572 8,088
Total 18,739 32,851 51,606 91,623 133,703 143,904
Table2.3 [Investments]
1996 1997 1998 1999 2000 2001

HBL 1,814 5,218 8,959 18,121 20,334 28,393
UBL 1,365 2,797 1,855 7,063 12,334 19,290
NBP 1,414 2,937 2,281 9,063 12,971 28,553
MCB 634 1,382 2,322 3,825 6,151 10,991
ABL 262 739 1,374 1,851 3,102 6,425
Total 5,489 13,073 16,791 39,923 54,892 93,652
Table2.4 [Equity]
1996 1997 1998 1999 2000 2001

HBL 250 382 576 1,898 3,155 6,121
UBL 119 184 288 961 1,691 3,061
NBP 130 222 279 954 1,530 2,987
MCB 056 071 116 462 788 1,521
ABL 019 33 054 183 212 397
Total 574 892 1,313 4,458 7,376 14,087

Part 1: Profile
Table2.5 [Profit]
1996 1997 1998 1999 2000 2001

HBL 211 318 362 750 843 956
UBL 065 125 093 184 239 260
NBP 073 118 109 183 282 346
MCB 028 033 080 130 143 249
ABL 010 021 023 027 037 053
Total 387 615 667 1,274 1,544 1,864
Table2.6 [Performance]
PERFORMANCE DURING FOUR YEARS

2002-2012

Part 1: Profile
Current Scenario of HBL:
HBL is listed on the Karachi, Lahore and Islamabad Stock Exchanges. HBL is
committed to high standards of corporate governance and comply with
requirements of the Listing Regulations and Prudential Regulations.
Risk Management Framework:
Since the issuance of guidelines on risk management and the subsequent

Intuitional Risk Assessment Framework (IRAF) questionnaire by the State Bank
of Pakistan (SBP), the Bank has adopted a holistic approach and has been engaged
in extensive and detailed evaluation and assessment of its risk management
framework in all areas of banking activity.
Statement of Internal Controls:
The management of the Bank endeavors to attain a professional and efficient

working environment within the Bank by establishing and maintaining adequate
and effective internal control system.
Credit Rating
During the year, the Pakistan Credit Rating Agency PVT Limited (PACRA) rated
HBL as AAA (Long Term) and A1+ (Short Term). HBL is the first Pakistani bank
to raise Tier II capital from external sources. “These ratings reflect sustained
ability of revenue growth from core operations while maintaining a low risk
profile and also dynamic as well as efficient fund deployment strategy.”
Branch Network
The total nation-wide branch network of HBL is now 1500 branches while 55
branches internationally in four subcontinents. This wide branch network is
competitive advantage of HBL.

Part 1: Profile
Technological Advancements:
HBL implemented a new database across all its online branches. This database
called MISYS enhanced the bank processing by providing a single data base for
processing of all domestic branches. MISYS provides centralized and improves
automated interest accruals, charges etc. also it provides automated inter-branch
settlement at day end and automated delinquency tracking & NPL maintenance.
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 and trade. HBL‟s Islamic Banking products are fully Shariah compliant
and duly certified by independent shariah Advisors.
HBL Asset Management
HBL Asset Management Limited – A wholly own subsidiary of Habib Bank Ltd –
was incorporated on 17 February, 2006 as a public limited company under the
Companies Ordinance 1984 and was licensed for investment Advisory and Asset
rd
Management Services by Securities and Exchange Commission of Pakistan on 3
April, 2006.

Part 2: Management
HBL Management

Part 2: Management
Management in HBL:
As in most organizations, the total employees of the Bank are categorized as:
 Top Management 

 Middle Management 

 Front-Line Management 

 Operatives 
Top Management at the top is responsible for making organization wide

decisions and establishing the politics and strategies that effect the entire
organization.
Middle Management is the level between the supervisory level and the top level
of the organization.
Front Line Management is the lowest level of management
Operatives describe those organizational members who work directly on a job or

a task and have no subordinates.
Key Areas of Responsibility:
The area of responsibility of all the executives in Figure 2.1 is as different from
their job description. The nature of very briefly described below

Part 2: Management
Hierarchy Structure of HBL:

The present hierarchy arrangement of the Top Management of Habib Bank
Limited is described through the following chart.
Figure 3.1
Board of Directors
President (CEO)
Group Executive
(Retail Banking Group)
Group Executive
Corporate and Intuitional Banking Group
Group Executive
Assets Remedial Management
Group Executive
International and Overseas Banking
Group Executive
Corporate Planning and Organizational Development
Group Executive
Global Operations
Group Executive
Credit Policy
Group Executive
Audit and General Administration
Divisional Head
Informational Technology
Divisional Head
Human Resources
Divisional Head
Finance
Chief Financial officer

Part 2: Management
Board of Directors:
Sultan Ali Allana Chairman
R. Zakir Mehmood President & CEO
Iain Donald Cheyne Director
Sajid Zahid Director
Mushtaq Malik Director
Ahmad Jawad Director
Yasin Malik Director

Part 2: Management
Members in Management:
Mr. R Zakir Mehmood President and CEO
Mrs. Sima Kamil Group Executive, Corporate
Banking
Mr. Ayaz Ahmed Group Executive, Chief Financial
Officer
Mr. Zafar Aziz Osmani Group Executive, HR&OD
Mr. Jamil Iqbal Group Executive, Chief
Compliance Officer
Mr. Salim Amlani Group Executive, Audit, BRR&
investigation
Mr. Tulu Islam Group Executive, IT & Systems
Mr. Kashif Shah Group Executive, investment
banking
Mrs. Nausheen Ahmad Company Secretary& Head of
Law Division
Mr. Sohail Malik Group Executive, Risk
Management
Mr, Nauman K, Dar Group Executive, International
Banking
Mr. Abid Sattar Group Executive, Retail&
Consumer Banking

Part 2: Management
Mr Mudassir H. Khan Group Executive, Global
Operations
Mr. Faizan Mitha Group Executive, Global
Treasurer
Mr. Aslam Gadit Group Executive, Asset Remedial
Mgmt
Mr. Mirza Saleem Baig Group Executive, Commercial
Banking
Mr. Jamil A. Khan Group Executive,
Administration& Services
Mr.Aly Mustansir Head of Marketing& Brand

Management

Part 2: Management
Chain Of Command:
Chairman
President
Board Of Directors
Member Executive Board
Regional Chief
Zonal Chief
Branch Manager
Operations Manager
Bank Staff

Part 2: Management
Different Groups in HBL Banking:
Commercial Banking Group (CBG):
Commercial Banking Group comprises of 6 commercial centers and 11 sub centers

being controlled by 6 regional offices located in 6 cities of Pakistan. The
functioning of this group is illustrated in figure given below:
Figure 3.2
ORGANOGRAM OF COMMERCIAL BANKING GROUP
Group Executive
Commercial Banking Group
Divisional Head Commercial Banking

Commercial Banking Division 6-Commercial & 11-Sub Cntr.
Divisional Head Divisional Head

Product Development Division ARM Division
Divisional Head Divisional Head

Credit Division Operations and support services
Divisional Head Regional chief Executives

Financial Control Division 6- regions
General Manager General Manger

Credit Operations and support
Branch Manager
1500 branches

Part 2: Management
Commercial Banking Division:
HBL Commercial Banking Group Targets medium sized companies with a

turnover of at least PKR 50 million. The Commercial Banking Businesses Units
are located in Karachi, Lahore, Faisalabad, Sialkot, Gujranwala and Peshawar.
HBL has the ability and the resources to meet the needs of the business with pro-
active, responsive and experienced Relationship Managers who are committed to
understand customer’s Business.
HBL follows Financing for the following:
 Working Capital 

 Procurement of Inventory 

 Receivables 

 Procurement of machinery 

 Expansion of production facility 

 Import of raw materials 

 Exports 

 Pre Shipment Export Finance
 Post Shipment Export Finance


 Guarantees 

 Open Ended Guarantee
 Close Ended Guarantee




Part 2: Management
Corporate & Intuitional Banking Group:
The Step includes:

 11 corporate centers 

 10 Corporate Sub-centers 
Portfolio includes handling accounts of Public Sector Corporations and

Corporate Customers with an exposure of Rs.75 million and about.
For a view of the composition of this group, refer figure 2.3
Assets Remedial Management:
Recovery of infected portion of the finances parked either at the Retail Banking
Group or the Corporate and Institutional Banking Group is the responsibility of
ARM group. For the convenience of having a proper follow up of the defaulters,
ARM has been divided into few units.
 ARM finance Information and Monitoring Divison (stationed at Head

office, Karachi ) 

 Credit Administration Division (stationed at Lahore) 

 ARM Risk Manager(stationed at Head office Karachi) 

 ARM Specialized Remedial Division( stationed at Head office Karachi) 

 ARM Centers at major cities 
International and Overseas Banking:
Habib Bank has a very large network. Besides domestic branches, it has 69
branches across the world. With the exception of South America, these branches
are located in different parts of the other 5 continents.

Part 2: Management
Figure 3.3
ORGANOGRAM OF CIBG
Group executive
Corporate and Institutional Banking Group
Director
Operations
Head Head
HR/Administration Financial Control
Head
Operations
Director
Credit Administration Department
Head
Specialized Finance Unit
Director
Credit
Director
11 Corporate Centers & 10 sub-Centers
Team Leaders Credit Administration Department

Marketing Credit Administration Department
Managers Managers
Human Resource Operations
Manager Manager
Trade Cash & Remittances
Mangers
FinCon

Part 2: Management
The other groups namely:

 Corporate Planning and Organizational Development 

 Global Operations 

 Credit Policy 

 Audit and General Administration 

 Information Technology 

 Human Resources 

 Finance 

 Financial Control 
Have a small network with limited spheres of operations.
Corporate Banking and Financial Institutional Group:
This group is responsible for serving the needs of large corporate clients
and private sector, managing correspondent banking relationships and
undertaking money market transactions.
The group is organized in three divisions:
1. Corporate and Merchant Banking Division

2. International Division
3. The Treasury Division
Corporate and Merchant Banking Division:
Principal activities include syndicated loans, guarantees and working capital

finance, underwriting and advisory services. Three units have been setup at
Karachi, Lahore, Rawalpindi and Faisalabad. For sales and operations, which are
supported by centralized marketing from the Head Office Karachi.

Part 2: Management
International Division:
Mainly responsible for managing correspondent banking relationships and

planning overseas operations, the division plays a vital role in extending foreign
trade transaction support to the branches. The bank became a member of SWIFT
and also a contributor to the equity of the Pakistan Export Finance Guarantee
Agency Ltd.
Treasury:
Treasury is responsible for managing bank‟s liquidity and foreign exchange

transaction. Through reported transactions, purchase of Government paper and
foreign exchange trading, the Division adds substantially to the Bank‟s sustained
earning.
Retail Banking Group (RBG):
Retail Banking Group comprises of a total 1500 domestic branches being

controlled by 23 regional offices located in 21 cities of Pakistan and Azad
Kashmir. The functioning of this group is illustrated in figure given below:
Retail Banking Group is responsible for serving the needs of the retail market.
Focusing on individual customers and medium size enterprises, for purpose of
product differentiation, the group is managed in three business arms i.e.
 Investment Products Units 


 Assets Product Units 

 The Credit Cards Divisions 








Part 2: Management
Operations and Credit Group:
Support function group mainly responsible for development of systems and

procedures, process re-engineering, automation and credit management. The group
is organized in three divisions‟ i.e.
1. System And Operation Division

2. Electronic Technology Division
3. The Credit Division
System and Operations Division
This group has been instrumental in development of procedures and manuals for
various operation requirements of the bank. The division is active in providing
equipment procurement support and development of new branches. The protection
of fixed assets of bank is also managed by this division, as directs function.
Electronic Technology Division:
This Division operated as the backbone for all operational functions in the bank.
Responsible primarily for the development of banking software and provision of
computer hardware to all business units, the division also engaged in the
development of technology based value added customer service products.
Credit Division:
Providing extensive support to branches for credit administration, control and

monitoring, the division has played a crucial role in helping the bank achieve a
remarkable loan Growth of 31%, with well diversified risk exposures. Most of the
loans are of short- term trade financing on a source and self-liquidating basis.

Part 2: Management
Human Resource Division:
This division is responsible for human resource management, including

recruitment staff training and evaluation. The division also handles matters relating
to administration. This division operates on future oriented strategy focusing on
employee’s personal and professional growth.
AT HBL hiring philosophy is based upon meritocracy and selecting the right
person for the right job. Habib Bank laid greater emphases on employee’s honesty
and integrity besides technical competence. Candidates are selected through well
defined and systematic selection procedure.
Finance Division:
Responsible for bookkeeping and A/Cs, this division at head office, prepare all
financial return and MIS through its management-reporting wing. The division is
actively involved in preparing market comparative analysis, consolidation of
bank’s budgets, its monitoring and constant review of various financial indicators.
Audit Division:
The audit Division reports directly to the board through the executive committee,
which is also the audit committee. The division is responsible for evaluating every
aspect of the bank’s operation with the goal of improving the effectiveness of risk
management and internal control.
The system of regional and area offices has been introduced for effective
supervision and control of branches. The scope of the system also spans the
development and management of bank’s business and activities, on a regional
basis.

Part 2: Management
Policy Making Styles of HBL:
Policy formulation process:
At Habib Bank policies are formulated at the top level. Board of Directors and
Executive committee of the bank formulate policies keeping in view the mission
and the objectives of the bank. So far the policies formulated by the top level been
very successful as indicated by the success pattern of the bank.
These policies are then implemented according to the guideline of top level of
hierarchy. Top management and middle management are given powers to carry out
the operations for the achievement of long-term objectives.
Training:
Habib Bank also gives training to officers at the Officers Training Institute. Bank
training academy is equipped with the latest audio- visual training aids, which
facilitate in the dissemination of knowledge and skills. Purpose of this training
program is to upgrade the knowledge base of the officers and to polish their
abilities as good bankers.
Promotion:
Each year, the superior officer prepares a review of each employee and then,
instead of sending it directly to the Head Office, it is first discussed with the
employee. This is done to incorporate a sense of confidence between the senior
and junior employees. It is also done to give the employee a chance to know his
weakness so that he may work hard to improve his abilities and skills the next
year. On the basis of this report, the promotions are made and bonuses are given.
Sometimes other factors are considered such as length of services, education,
training courses completed, previous work history and the like.

Part 2: Management
Motivation level:
Job design for motivation is another personnel approach that has been increasingly
emphasized in recent years. Job contents, methods and relationships are structured
not only to satisfy technological and organizational requirements but also to
accommodate human needs for meaningful and self-fulfilling work. Jobs are being
designed to fit the people who hold them in the hope that greater employee
motivation (which is essential to higher productivity) will result.
Growth opportunities:
Habib Bank provides growth opportunities to its employees and officers. The bank
has a huge number of clients of business class and allows certain relief and
incentives to its employees thus making job more efficient and effective.
Job Satisfaction:
During my internship program, I worked with different employees in different

departments. I observed their working and also their level of satisfaction regarding
their jobs and reward system.
Almost all the employees were satisfied with their jobs, as far as the quality of
work and rewards were concerned. All the employees were highly motivated and
sincere with their jobs. However, one common complaint was the quantity of
work. Much were uploaded with the huge work and even had to work till 7 or 9
pm.

Part 3: Departments
HBL Departments

Part 3: Departments
Departments in HBL:
Bank performs different functions in several departments. Departments and their

functions are given below:
 Deposit Department 

 Credit Department 

 Clearing Department 

 Cash Department 

 Bills and remittance Department 

 Foreign Exchange Department 

 Accounts department 
Deposit Department:
This is the main department of the bank, because deposits are the lifeblood of any
bank. The function of deposit department is to collect deposits or money from
depositors. A commercial bank receives money on three types of accounts mainly:
 Current Deposit Account 


 Saving Deposit Account 

 Fixed Deposit Account 
Current Deposit Account:
Current deposit account is usually for businessman, because in this type of

deposits depositor can draw and deposit money within a short period even
on daily bases. No interest is allowed on this type of deposits.

Part 3: Departments
Features of current account:
1. No interest is on this type of accounts

2. Normally this account is operated by cheques
3. Withdrawal can be made at any time during the business
hours
4. No fixed period
5. A deposit is payable on demand
6. No Zakat is deducted on this type of accounts
7. Can be opened in the name of
a. Individuals (single/joint)
b. Firms
c. Private limited companies
d. Public limited companies
e. Trusts
f. Clubs, Associations
g. Societies
h. Institutions
Saving deposit account:
Saving deposit account as its name shows is for those persons who want to
make small saving. In this type of account deposit can be made up to a
certain amount and withdrawals are allowed only twice or thrice a week not
exceeding a certain amount. This type of account is opened by small
retailers or by the salaried persons. Rate of interest depends on the bank
policy.

Part 3: Departments
Features of saving deposit account:

 PLS rates declared by bank half yearly 

 Withdrawals can be made once or twice a week 


 Low rate of interest 

 No fixed period 

 Deduction of Zakat as per rules 

 Can be opened by: 

b. Charitable institutions
c. Zakat/ Usher committee
d. Local bodies, Autonomous Corporations, Firms,
Companies, Associates, Institutions etc
Fixed deposit accounts:
In this type of account the depositors deposits a certain amount for a fixed
period of time. Fixed deposit of account is usually for 1 year, 5years, 10
years. Withdrawal of this possible only on maturity
Feature of deposit account

 Open for a fixed period of time 

 Withdrawal can only made after the expiry of fixed period 

 High rate of interest 

 Can be opened by 

b. Charitable institutions
c. Zakat/ Usher committee
d. Local bodies, Autonomous Corporations, Firms, Companies,
Associates, Institutions etc

Part 3: Departments
Bank also offers following types of deposits other than above deposits to its
customers:
 Call Deposit 

 Foreign Currency Deposit 

 Short notice term Deposit 
Call Deposits:
Call deposits are sort of deposits, which are offered to the customer against
some tangible security. These deposits are issued to contractors for
participation in the tender bid. A certain % of tender amount is fixed for
these kinds of deposit
Foreign currency deposit:
Foreign currency deposit is concerned with foreign currency deposit.
 US Dollar 

 Pound Sterling 

 Japanese Yen 

 Euro 

 Deutsche Mark etc 
Short Notice Term Deposit:
Short notice term deposit is operated on short term basis. Depositors may
withdraw the amount at any time by giving 7 days notice to the bank. This
time of deposit facilitates traders to withdraw his money with interest of
deposited period

Part 3: Departments
Credit Department
Credit Department also plays an important role in the functioning of the bank. In
this department bank lends money to its customers in the form of clean credit,
secured overdraft, against promissory notes, as well as secured credit against
tangible and marketable securities.
Establishment of bank and its subsequent growth are the result of credit and
deposit. Every credit creates a deposit and every deposit creates credit. Bank
credits however, a not only conclusive to their very existence but also impart
beneficially on the economy as a whole. The difference of interest charged and
paid by the bank is constitute major portion of bank’s income. Bank charges high
rate of interest on credit and pays a lower rate of interest on deposits.
Categories of credit:
The commercial banks lend money in any one or more of the following
ways
 Overdraft 

 Export Finance

 Demand Finance

 Cash credit 

 Credit against purchase of bills 
In this case the customer is authorized to borrow (overdue) up to an agreed

amount excess of the customer’s bank balance. The bank charges the
interest at an agreed rate on an amount actually overdrawn by the borrower.
Over Draft can be:
 Clean over draft 

 Secured over draft 

 Temporary over draft 

Part 3: Departments
Clean Overdraft: Clean overdrafts are those advances which the bank has no
security except the personal security. Tangible assets are considered secured
because we can easily sell them e.g. land, building and machinery.
Secured Overdraft: Secured overdraft is those advances which the bank has a
security other than this personal security. It can be
 Against lieu on third party account 

 Against immovable property, equitable mortgage and collateral 
Before it, secured overdrafts also granted against the postal saving certificates and
NDC hares but now it is not allowed.
Temporary overdraft:
Today TOD facility is not allowed by Habib Bank Ltd and now this
name is given to cash finance or cash credit which is mainly granted to ginning
factories and seasonal factories. Before this, TOD was allowed within
discretionary powers of the branch mangers, to first class parties, keeping in view
their credit worthiness, overall business, their past record and the average balance
maintained in their account.
Loans:
A loan is made when a bank advances a fixed sum for a definite period of time.
The amount is placed to the credit of borrower who can draw cheques against the
sum of any amount. Whether he makes use of full amount, or par amount he has to
pay interest on total amount of the Loan. Loans are further divided in to following
categories.

Part 3: Departments
Small Loans:
These loans are granted to contractors, clearing and forwarding agents. Small loans
can be clean or can be secured. All loans allowed in small loan scheme announced
by State Bank of Pakistan.
Clean Loan:
A clean loan is one, which is granted to borrowers without demanding any
security from him, except on his personal guarantee.
Secured Loans:
Secured Loans are those which are granted to customers against securities,
hypothecation, and pledge and against cash collateral basis. Here bank also
demands a security from the customers other than the personal guaranty.
Cash Credit:
Seasonal Advances are allowed generally under cash credit. These types of loans
are given against following.
 Against locally manufactured goods 


 Cash finance against rice and paddy 

 Against pledge 
Hypothecation:
In case of hypothecation the goods are in the custody of customers but their
ownership is with bank. This type of security is moved for moveable assets.
Usually this type of security is considered a weak security because under
hypothecation the possession of goods remains in hand of customer, only
ownership is transferred to bank.

Part 3: Departments
Pledge:
This terminology also used for moveable assets like raw material, finished
goods, work in process goods. In case of pledge the goods and their ownership
both are in the custody of bank. This type of security is considered to be a strong
security because here ownership and possession both are with bank.
Therefore, pledge is bailment of goods as a security for payment of debt or

performance of promise. Bailment is defined as delivery of goods from one person
to another for some purpose upon a contract that they shall be returned according
to direction of the person delivering the goods, when the purpose is accomplished.
The person who delivered the goods is called the “bailer” and the person to whom
the goods are delivered are called “bailee”.
Advance against purchase of Bill (IBP and FBP):
This is generally called as “Inland Bill Purchase” and “Foreign Bill Purchase”. The
bills are of two kinds.
 Clean bills 

 Documentary Bills 
Clean Bills:
Clean bills are defined as “negotiable instruments” drawn on out station
branches or banks sent for collection on behalf of the customer, i.e. cheques,
dividends, warrants, Treasury bill, drafts etc.
Documentary Bills:
These are bills accompanied by documents such as R.R, T.R, Bill of lading
etc. having title to goods collected by banker on behalf of customer.

Part 3: Departments
Remittance Department
The main function of this department is to transfer the money from one branch to
another branch. This department deals in the following terms.
 Demand Draft (DD) Issue 


 Demand Draft (DD) Pay 

 Pay order 

 Pay slip 

 Telegraphic Transfer (TT) 

 Mail Transfer (MT) 

 Inward bills for collection (IBC) 

 Outward bills for collection (OBC) 
Demand Draft (DD):
Demand Draft is a negotiable instrument, which is drawn by one

branch of the bank on another branch of the same bank. So when any person
wants to make payment form one city to another city then he can make
payment through demand draft. Demand draft can by issued to customers as
well as to non- customers against cash receipt, cheque and against letter of
instruction. Bank charges a commission for performing this kind of service
according to prudential regulation given by State Bank of Pakistan.
Pay Order:
Pay order is just like cash. If someone wants to make payment to

other person he can pay through pay order. The main advantage of pay
order is that it can not be dishonored by any bank. When payment is
required to make within city then take this bank service and when we want
to make payment outside the city

Part 3: Departments
then we used demand draft. In case of cheque there is possibility that it can
be dishonor by the bank but In case of pay order we have security that it can
never be dishonored.
Pay slip:
The bank uses it for the payment of its on expenses e.g. tax payment by the
bank, repair and maintenance expenses, etc. so for the payment of internal
expenses of the bank, issue a pay slip.
Telegraphic transfer (T.T):
T.T may be issued in three possible ways. The instrument is used by the
customer. The issuing branch makes the payment order. So it is a bank to
rd
bank transaction and the beneficiary (3 party) is not directly involved in it.
Two other ways of this transaction are 1. Telephonic transfer 2) Fax. It is a
code message by one bank to other bank. Each bank has its own coded
number. First they write the message in code form and after this they apply
its test number on it. The bank can issue two types of instructions for T.T
 Advice in pay 

 Advice in credit 
Advice in pay:
In this case, the third party on which the T.T is drawn, are not having its
account in this bank means they are not the account holder of this bank.
Bank informs this party to come to bank and receive their payments against
TT. Bank charges a commission for rendering this service according to
schedule of state Bank of Pakistan. Bank makes payment to party after
proper introduction by the introducer. The introducer is that person who has
its account in this bank.
47
Institute of Business Administration
Part 3: Departments
Advice in credit:
In this case, the party having its own account in the same bank in which the
TT come on their name. Here, when TT come to bank, bank simply credits
the account of its customer (party).
Mail Transfer (M.T)
Banks to bank also remittance send through mail its charges are same as to
DD plus additional 60 rupees. Mail Transfer advice is issued against cash
receipt, cheque and letter of instruction. Firstly MT. advice is prepared by
the bank and then test number is written on this M.T advice is given to
dispatch department for onward transmission.
Outward Bills for Collection (OBC):
 Clean Bills (Cheque, pay order, pay slip): These are negotiable
instrument drawn on outstanding branches of the bank, and issuing bank
sent it for collection on behalf of the customer i.e. cheques, draft,
dividends warrants, treasure bill etc. It involves two types of
Transaction, one is between branch to branch and other is between one
bank and other bank. 

 Documentary Bills: If payment is made other than cheques then this
mode is used. These are the bills accompanied by documents such as
R.R (Railway receipt), T.R (truck receipt), and bill of lending etc,
collected by the bankers on behalf of their customers. It is an agreement
between two parties. Bank plays role as an agent. Documentation must
be clearly drawn between two parties. But in 99 % cases the lean bills
are used by the banks. 

Part 3: Departments
Inward Bills for Collection (IBC)
 Clean Bills: These are negotiable instrument which is collected locally.

These bills are received from outstation branches and banks 

a. Against Cash
b. Against Cheques
 Documentary Bills: These are bills received from outstation branches,

bank or partners and collected locally. 
Clearing Department
Clearing is the process whereby bankers settle their mutual accounts for claims
arising on account of various instruments presented by one bank drawn on the
other. The customers and the bank‟s outstation branches lodge such instruments.
A mutual time and place is selected where the representatives of banks perform the
clearing function. All drawn instruments are sorted for each bank and exchanged
so that each representative collects all instruments drawn on his bank for settling
claims. Where the SBP has its offices, the clearing system is controlled and
managed by SBP. At other places, this function is performed by NBP. The state
Bank is also a member of the clearing process with all banks having their accounts
maintained with the guardian bank for clearing purposes. The representative of the
state does the accounting work.
The assembly of the representatives of the member banks is the clearing house.
Clearing house in every city has it on timing for exchange of cheques instruments
and for return of unpaid cheques. NIFT is one such clearing house.

Part 3: Departments
Categories of cheques / instruments:

In every branch a number of cheques are received from customers for
clearance and credit to their accounts.
The cheques received may belong to any of the following categories:
 Drawn on the branch itself 


 Drawn on some other branch of the bank in city 

 Drawn on some outstation branch 

 Drawn on some outstation branch of other bank 

 Drawn on some branch of other of the same town 
Cheques drawn on the branch itself are handed over to CD department.

Cheques drawn on outstation branches are handled by Bills Department.
Acceptance of Cheque:
The authorized person receiving cheques instruments makes scrutiny

of the instrument, paying in slip and the counterfoil. The following point
should be considered while scrutinizing the instrument.
Scrutiny of cheques:
 Cheque is crossed but not specially crossed to any other bank 

 Cheque is drawn on a branch of a bank functioning within the city 

 Cheque is not post dated or stale 

 Amount in words and figures is the same 

 Nothing on the cheque indicates that the depositor is not entitled to
receive amount 

Part 3: Departments
 Cheque payable to a firm should not be accepted for credit to a partner‟s

personal account. 

 Cheques marked “not transferable” should not be collected for a person
other than the payee. 

 If the cheque is drawn in favor of a Trust Account, it should not be
credited to the account of Trustee 

 All alteration / addition amendment on cheque must bear drawers full
signature. 

 Where the cheque is crossed “Payees Account only” the payee and the
depositor is the same 

 Third party cheque should not be accepted for credit in staff account
without manager‟s consent. 

 A crossed cheque in favor of joint names cannot be collected for the
credit of individual account. Whereas it may be deposited in the joint
account. If it is in favor of individual name. 

 Whether the cheque requires revenue stamp. 
Cash Department
All physical movement of cash in the bank is made through the cash department.
This department of bank is mainly responsible for the handling of cash deposits
and encashment of cheques issued by the account holders. Cash management
involves various risks and costs as well as significant amount of time and
concentration from employees. The following are the sections for the C.D
department.
 Receipts of Cash 

 Encashment of cheques 

Part 3: Departments
Receipt of cash Section:
The depositor uses deposit or pay in slip for depositing the amount.
Client fills the voucher with all requirements. He must enter correct title of
account and account number and with correct figure in words and amount.
There two parts of pay in slip

 Counter foil 

 Adjacent credit voucher 
The clients gives all the details are required regarding date, account number
and title of account, amount being deposited both in words and figures, and
the signature of the depositor. The cashier first verifies all requirements of
the pay in slip that whether these are fulfilled or not and verifies the amount
written in words and figures. After that he enters the details of the receipt in
the “inward cash register” of the computer.
 The pay in slip is stamped, cash is received, and counter foil is given
to the depositor 

 The adjacent credit voucher is used for recording and posting
purposes. 
Encashment of cheques
Cheques encashment is made in four steps
1. Receiving of cheques
2. Verification of signature
3. Computer terminal process
4. Payment of cash

Part 3: Departments
Cash Receipt Section:
In this section cash is received by the cashier in following manner
1. Process of Deposits:
2. Fill up deposit slip
3. Deposited on Receipt customer
4. Cashier counts the amount and fulfills other requirements
Receipts of cheques:
The cash is paid against the cheque of client. The following points are kept
in mind while receiving the cheque from the clients
 Cheque should be drawn on HBL 


 Cheque should not be post dated 

 Amount in words and figures are same 

 It should be a bearer cheques so the word bearer should no crossed 

 The receiver of the cash will make at least one signature on the back
side of the cheque 

 Drawer does not stop payment 
Alteration in date/figure require drawer‟s full signature for authenticity
Verification of Signature:
After receiving the check the officer verifies the signature of the account
holder with the signature on the cheque. The customer must have two
signatures on the back of the cheque. If the signatures are not the same then
it is returned back otherwise forwarded to computer terminal. The cheque is
also verified by cashier, Operation manager, and Branch manager if its
amount exceeds as

Part 3: Departments
If amount is up to Rs.50000 cheque is verified by the cashier. If amount

exceeds from 50,000 to 300,000, the cheque is verified by the operation
manager. The branch manger verifies if amount exceeds from 300,000 to
onward then the cheque
Computer terminal process:
After receiving the cheques by the cashier and after verification of

signatures, cashier also verified the customer‟s account balance either the
account has the significant balance to withdraw this particular amount. The
cashier checks the balance through the computer. He also checks whether
the stop payment instructions are received from account holder or not. After
considering these two points, cashier posts the cheque in account holder
ledger in computer and returns the cheque back to the officer.
Lockers
Habib Bank offers facility of lockers to its customers. There are three sizes of
lockers available
 Large 

 Medium 

 Small 
Size of Locker Rent of Locker (per annum) In Rupees

Large 3000
Medium 1500
Small 1000

Part 3: Departments
Foreign Exchange Department
The main function of foreign exchange department is to open the letter of credit to
facilitate import and export and also to deal with foreign currency account. Or the
services performed by bank relating to foreign business can be classified as under
 Financing the import of goods and services 


 Financing the export of goods and services 

 Miscellaneous Services 

 Financing the import (Import L/C) 

 Facility to open documentary credit 

 Collection of bills and repatriation of funds 

 Effecting remittances abroad 

 Lending money against import and merchandise 
Importance of letter of credit
The bulk of imports trade, now a day is mostly financed through letter of
credits. The method of making payment through letter of credit has greatly
facilitated commercial relation between the importer and exporter. They can
safely rely on the safety of the bank rather then on the credit standing of the
importer. The importer too will pay for the goods, only when they are
shipped and the documents are received by the buyer‟s bank.
 Financing of Export (Export L/C) 


 Advising Export Credit 

 Collection or negotiation of foreign bills 

 Receiving payment from abroad by means of remittance 

 Allowing packing credit facility to exporters 

Part 3: Departments
Letter of credit can by two types:

1. Sight L/C
2. D/A Letter of credit
Letter of credit at sight:

Sight means you see something and then you perform it. First see then
accept and then perform it. In case of sight L/C, importers sends a L/C to
that country from which he wants to export something. He can draw it on
the name of exporter when the bank of exporter country receives the letter
of credit, he first check it and then after that makes the payment to exporter.
Document against Acceptance (D/A):
In this type of letter of credit, payment will take place at some agreed
period, which varies, from 30 days to 36 days. Here the document
acceptance period called usance i.e. How long is the period here bank see
the document but not make the payment on sight.
Two types of facilities granted by the banks
1. Fund- based facility

2. Non-fund based facility
Fund based:
Fund based facility is that facility in which gives cash to
customer. In case of funded facility bank charge a mark up, Outflow
of cash by bank in case of fund-based facility.

Part 3: Departments
Non fund based:
Non fund based facility is that facility in which bank make no out of
cash, here only guarantee is provided by the bank i.e. if a party fails
to perform his obligation then bank will perform it so, letter of credit
is a non fund based facility. Commission and service charges by the
bank rendering this type of services are not fixed for all of the
parties.
Miscellaneous Services:
 Sale and purchase of foreign exchange 


 Providing credit information to foreign correspondent 


 Implementation of foreign exchange regulations 

 Advise on matter of exchange control to trade authorities 

 Issue of traveler’s cheque 

 Maintenance of non-resident accounts of foreign nationals 
Account department
Generally there are two ways to maintaining an account

1. Journal system
2. Voucher System
Journal System:
In journal system entries are journalized in the journal book and then
posted to main ledger in the computer. The word journal means daily. In
journal, transactions are recorded daily and hence it has been named so. It is
the book of original entry to record chronological and in details. It is also
known as “day book” because it contains the accounts of every day
transaction.

Part 3: Departments
Voucher System:
Any written evidence in support of a business transaction is called a

voucher. For example, when you purchase a shirt form a seller, he gives
you a cash memo. Cash memo is used as a voucher for payment. During
banking transactions voucher is used for payments. For every transaction
there has to be a voucher either in cash or in transfer, or in clearing. All
vouchers are summarized in the voucher book, so that posting in cum-cash
book is facilitated.
Following books and register are maintained in accounts department
 General ledger 

 Cash-cum day book 

 Subsidiary ledger 

 Voucher register 

 Transfer books 

 Credit deposit summary book 

 Saving deposit summary book 

 Balance books 

 Ledger book 

 Journal register 

Part 4: Marketing Mix
HBL Marketing Mix

HBL Marketing Mix:
Product and Services:
HBL provides its customers a complete range of banking products and services
including retail banking, corporate and institutional banking, trade finance,
consumer finance and credit cards. These Products and services of are developed
keeping in view the customer’s need and desires and the expectations they
attached with their financial institutions.
HBL offers following financial services and products to its customer.
 Deposits 

 Advances 

 Products 
Deposits:
One of the basic functions of commercial banking is to receive

deposits. HBL accepts deposit in both local and foreign currency.
 Currency A/C (CD) 

 PLS Saving Account 

 Terms Accounts 
Current Account:
A current account is a running and active account, which may be operated

upon any number of transactions during a working day. The banker
undertakes to repay these on demand and therefore this account is called
Demand Deposit.

HBL Current Accounts offer features that meet customer’s daily banking
needs.
 Current Account 

 Basic Banking Account (BBA) 
Current Account:
Current Account is a Non-profit bearing account and there is no transaction

limits in a day. The bank charges no transaction fee if the minimum balance
requirements is met. Minimum balance requirement is of Rs.20, 000. If the
average balance falls below this amount, then service charges will be deducted.
Also no restriction on anyone opens a Current Account (as long as regulatory
guidelines are met).
Basic Banking Account (BBA):
In basic banking account there is no minimum balance requirement as lies

with current accounts. Also there are no service charges.
Saving Accounts:
The saving account is usually opened by people so that they can meet their
future requirements and contingencies. As the objective of such accounts is
to promote the habit of thrift among people; the bank imposes certain
restrictions on withdrawal from saving accounts.
HBL‟s Saving Accounts cater to individual saving habits.
PLS_ Saving Account:

 Profit paid bi-annually 

 Minimum average balance of Rs.10,000 

 Less than Rs.20,000 earns 1%profit 

 Greater than Rs.20,000 earns 5% profit 

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 
HBL Super Value Account:
 7.25% profit per annum 


 Profit credited every 3 months 

 Deposit ranges from Rs.100,000 to Rs500,000 

 Flexibility of withdrawal 
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 .10% profit 

 Rs.1million 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 


 Tiered 

 Monthly profit 

 Minimum Balance of Rs.50, 000 

 Returns up to 8% 
Term Accounts:
HBL’s Term Accounts are offered in a variety of tenure with deposits as
low as Rs.10,000.
Special Notice Time Deposit
 7day or 30 days and over notice 


 Minimum Deposit of Rs.10,000 

 Balance less than Rs.1million 

 Balances equal to and greater than Rs.1million 

 Returns range from .75% to 4% depending on notice period
and amount 
F.1 – Term Deposit Receipts
 3 month term deposit 


 Minimum balance of Rs.10 million 

 Return range from 0.75% to 2.25% 
Munafa plus Deposit (Certificates)
 Available in 3 month, 6month,1year,3year,5 year and 10year

terms 

art 4: Marketing Mix
 Profit disbursement (except for 3&6 month terms) is monthly,

quarterly, I-annually, and on maturity 

 Return Ranges 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, 3month, 6month, 12month, and 3 year
terms 

 Profit paid on maturity 

 Rates on IPD are conveyed on a daily basis by the Treasury
Division 
Remittance Munanfa Plus Deposit (Certificates)
 Available in 1year, 3year and 5year certificates 


 Profit disbursement is monthly, quarterly, bi-annually,
annually and on maturity 

 Returns range from 7.8% to 11% 
Foreign Currency Account:

HBL offers Foreign Currency Accounts in multiple currencies as saving
and term accounts.
FC-SB
 Saving 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, 6 month and 12 month in USD,

EUR, GBP 

 Tiered product, with raters depending on choice of currency and
term 

 Profit paid on maturity only. No interim interest is payable 
Advances:
Advances are major sources of earning of income for commercial banks.

Banks attract surplus balances from the customers at low interest rates and
makes advances at higher interest rates to the individuals or business firms.
HBL offers these facilities in two forms:

 Fund Based Financing 

 Non- Fund Based Financing 
Fund Based Financing
In funded facilities the bank actually advances money against further

repayment. These facilities are known as Cash Credit.
Non Fund Based Financing
Non –funded facilities are those in which bank substitutions its own credit
for its customers. HBL is committed to offering its business customers the
widest range of options in the area of money transfer.
HBL offers to its customers are large number of non-funded facilities.
These facilities include:
 Guarantee 

 Letter of credit 

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.
Features:
 Lease finance available for all new locally assembled cars and light
transport vehicle 

 Accommodating fixed lease tenure of 36, 48 and 60 months 

 Minimum down payment as low as 10% 

 Amount of leasing available up to Rs.1,500,000 

 Option of deferred payment up to 30% of their 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/- anywhere in the world for
the lessee & his/her family, speedy process of claims and many more 

 No hidden cost involved 
Habib Bank Flexi Loans:
With the rising cost of livings, it is becoming increasingly difficult to make

expensive purchases or meet unexpected expenses. A customer may avail a
personal loan of up to six times of his net take- home salary subject to a
minimum of Rs.300,000/- provided he work for an organization approved
by HBL.

Advantages:
 Flexible tenure: 12, 24, 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 
Products:
Debit Cards:
HBL Visa Debit Card allows you to pay for your purchases directly from
your bank account. You don‟t have to carry cash and your monthly
statement provides you with a complete record of all your transactions so
you can manage your expenses with ease.
Salient Features:
The salient features of the HBL debit card are as following:
No Interest
HBL Visa Debit Card is the perfect way of paying for your purchases as it
gives you access to exact amount of money you need, as when you need it.
There is no interest or credit on payments because you spend from the
money available in your personal HBL Account.

Ease and Security:
HBL Visa Card offers ease and convenience because customer don’t have
to visit
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 your personal HBL account.
NO Liability:
In case of a lost or stolen card, you are protected against fraudulent
transactions made on your card after you report the incident. Please report
your card as lost or stolen immediately by calling our 24 hour HBL Phone
Banking service at 111-111-425 within Pakistan or the Global Customer
Assistance Service Helpline for the relevant country if you are traveling
abroad.
International Recognition & Acceptability:
Your HBL Visa Debit is accepted at over 20 million Visa merchants

worldwide, including 10,000 merchants in Pakistan. As an ATM card it is
accepted at more than 1000 1-links & M-Net ATMs in Pakistan and 864000
Visa ATMs worldwide. No matter where you are, with the HBL Visa Debit
Card, we are always with you.
Spending Limits:
The daily spending limit at shops and outlets on your HBL Visa Debit card
is Rs.50,000. On the HBL Visa Gold Card your daily spending limit is
Rs.100,000 with no restrictions on the number of transactions.(Please Note
these figures are subject to the balance available in your account).

Free Account Statement:
Our cardholders receive a free monthly account statement for their Debit
Card and ATM transactions to help them keep track of their spending.
Global Customer Assistance Service (GCAS)
When traveling overseas, HBL Visa Debit card holders receive global
assistance 24 hours a day, 7days a week form the local Visa Global
Customer Assistance Service.
Credit Cards:
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.
 Gold Card 

 Green Card 
Convenience:
Instead of paying with cash, simply present your HBL Credit Card to the
shopkeeper and pay for anything you want.

Bill payments:
We’ll pay your bills on your behalf and charge the amount to your HBL
Credit Card. You can give one-time standing instructions to pay your
monthly bills. Check the amount in your monthly card statement and make
the payment with your regular card payment.
SMS Alerts:
For all transactions, an SMS alert will be sent to you on your mobile phone
to confirm that the transaction have been conducted by you. A nominal fee
will be charged for this service.
E-Statements
You can enroll for an e-statement with a simple call. An e-statement with
details of all your transactions will be sent to your specified email address
every month. You won’t have to wait for your paper statement any more or
have to worry about storing it.
Statement by Fax:
HBL credit card also offers the facility of receiving your card statement by
fax. Just give us a call and your last card statement will be faxed to you at
the fax number specified by you.
Security:
Your HBL Credit Card ensures your money stays completely secure. You
cannot lose cash if you don’t 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 payments 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.
Cash Advance
If your 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. For cash advance, nominal
charges will be applied for the withdrawal date.
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.
Muhafiz Rupee Travelers Cheques:
With the advantages of 100% free purchase and encashment, MUHAFIZ

remains 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 Rs10,000 – 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 
Phone Banking:
You can now call Phone Banking and save a trip to the branch. Your query
will be resolved in a single telephone call from anywhere and at anytime.
Investment Banking:
HBL offers full-service Investment Banking Capabilities to its clientele.

This year alone, HBL has closed over thirty transactions with cumulative
worth of over USD 2 billion. This is a testament to the out-of-box thinking
and the innovative we bring to our customers.
Project Financing:
The bulk of HBL’s project finance practice revolvers around the power
sector. Prior to the power policy of 2002, HBL actively pioneered Project
Finance in Pakistan through the funding of a gas-fired co-generation plant
(94Megawatts 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 greed field venture in the
telecom sector with PKR 12 billion.
Debt Capital Markets & Syndications:
Depending on the requirements of its customers, HBL offers a variety of

products, including syndications, securitizations, privately placed and listed
TFCs, term financial facilities, 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 Asia, credit enhancement
for a rapidly growing company in the customer durables sector and
numerous tier-2 capital transactions for commercial banks.
Equity and Advisory:
HBL offers a breadth of equity and advisory products including innovative

capital raising techniques, restructuring, public and private equity
placements and mergers & acquisitions. The HBL team played a pivotal
role across several sectors including energy, agriculture, consumer products
fertilizer 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 kina transaction in Pakistan. HBL also provides valuation for a
company in the food and beverages sector.

art 4: Marketing Mix
Amman:
Amman 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 return on investment to
its customers
Salient Features
 Eligible age 18-60 years 


 Minimum payment Rs.2000 per month 

 Minimum age to exercise pension option 55 years 

 Benefit on accidental death RS.800,000 will be paid along with other
benefits 

 Benefit on Death Rs.200,000 will b paid along with other benefits 

 Partial withdrawals allowed. 
Maturity benefits two options available:
1. Policy can be cashed in total

2. Pension can be received for life.
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 child‟s
education or marriage. Plans are available for both under and over 45 years
of age.
Salient Features:
 Eligible age 18-60 years 

 Minimum payment Rs.3,000 per month 

 Minimum age to exercise pension option 55 years 

 Benefit on accidental death 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 allowed. 
Maturity benefits two options available:
1. Policy can be cashed in total

2. Pension can be received for life.
Trade Finance:
Trade Finance and related services are a long-standing core business

of HBL. To enable customers to capture global opportunities, HBL is
present over 26 countries, in addition to the extensive network of overseas
partners and correspondents. This global reach positions HBL to facilitate
& finance the world’s primary trade flows.
Habib Bank handles a trade flow of over $ 3 billion, which is around 18 %

of the total trade flow of Pakistan. More than 100 domestic branches in all
the major industrial, trade and commercial centers are authorized /licensed
to deal in trade finance business.
Habib Bank Limited is the first Bank in Pakistan to acquire SWIFT

connectivity and now it is available in 67 domestic and 18 overseas
branches.
Cash Management:
Cash management services cover local and cross border payments,
collections, information management, account services and liquidity
management for both corporate and intuitional customers.

Corresponding Banking:
Having worldwide relationship with around 800 correspondents including

all major international banks, HBL maintains over 100 clearing accounts in
Pakistan for foreign correspondents for all continents. Significant presence
in 26 countries through provides Correspondent Banking Services
providing full range of inland banking services to all major international &
local banks, having presence in Pakistan.
Home Remittances:
Habib Bank has centralized processing of Home Remittances at Karachi

utilizing the extensive branch network, to ensure that the beneficiary
receives payment within 24 hours. Special arrangements are in place with
the major exchange housed in the Middle East for facilitating home
remittances to Pakistan. Handled an annual volume of over $ 400 million,
which is 40% of the country’s volume.
Corporate Product and Services:
 Lease Finance 

 Loan Syndication 

 Mergers & Acquisitions 

 Debt/Equity Underwritings 

 Term Finance Certificate 

 Corporate Advisory 

 Cash Management 

 Demand Finance 

 Working Capital Finance 

 Fixed Asset Financing 

 Import Financing 


 Pre & Post shipment Export Finance 

 LMM Funding 

 Documentary letter of Credit 

 Standby Letters of Credits and Guarantee 

 Documentary Collection 
Treasury Products and Services:
FX Desk:
Habib Bank prides itself on being bank of first choice for exporters wanting
to encash their proceeds. HBL offers the best rates in the markets, and cut
down own spread in order to offer competitive rates for imports also.
The Treasury Marketing Unit is ready to quote very competitive rates for
the following products:
 Spot and Forward FX Cover for Import and Export 


 Forward Bill Discounting 

 Sale and Purchase of Government treasury Bills and Pakistan
Investment Bonds 
Dealing Strength:
Experience dealers combined with the large FX flows accumulated in 200

FX dealing branches give HBL an edge over other banks.
 The largest treasury in Pakistan in term of $/PKR volume 


 The lead Providers of foreign exchange in Pakistan 

Money Market Desk:
Backed up by one of the largest Balance Sheets in the country, our Money
Market Desk transacts almost 20% of the daily volume in the Inter-Bank
Money Market on average.
Primary Dealership:
Habib Bank limited enjoys primary dealership status with six other banks.
Only primary dealers are authorized to participate in Government papers
Auction. These papers are subsequently traded in inter-bank market and
could be sold directly to customers.
Plays a key role in market making of Pakistan Investment Bonds, T-Bills &
FIBs

Price
In the present era, every bank is trying to excel other through the provision of
cheaper, quick, innovative and productive services. HBL should keep its services
charges at the minimum level to retain and facilitate customer and to have market
penetration.
Schedule of charges effective from Jan 01 , 2013 to June 30, 2013 :
International Banking:
Table 5.1:
Letter of Credit Commission (Import)
Sr. Annual Volume 1 Quart or Each sub quart Minimum

No during a Calendar part of thereof or part of Amount per LC
Year thereof
1 Up to Rs.25 million 0.40% 0.25% Rs.1500/-per
2 Up to Rs.50 million 0.35% 0.20% Letter of Credit
3 Up to Rs.100 million 0.30% 0.20%
4 Above Rs.100 Negotiable
million
Amendments in letter of credit Rs.1000/-per transaction (Flat)
Import Collection bills Rs.1200/- per collection provided no
charges are realized From the correspondent

Table 5.2: Letter of Credit Commission (Export)
Sr. Annual Volume during 1 Quart or part of thereof

No a Calendar Year
1 Advising Rs.1500/-(Flat) plus local courier charges

Rs.50/-& inland courier charges Rs.100/-
2 Amendment Advising Rs.800/-(Flat) plus local courier charges

Rs.50/-& inland courier charges Rs.100/-
3 Negotiation of Rupee 0.25 % Minimum Rs.500/-

Bill under Export LCs
4 Confirmation Charges as approved on case to case basis by

Financial Institutions Division (FID).
5 Transfer of Export LCs Rs.1200/- (FLAT)
Domestic Banking
Table 5.3: Issuance of Banker's Cheque
Sr. No Description Charges

1 Issuance of charges for customers Through Account Rs.150/- Flat
Against cash Rs.300/-
2 Cancellation Rs.150/- (Flat) for customers.

Rs.300/- For Non Customers.
3 Issuance of Duplicate Pay Order Same as nominal charges

Table 5.4: Online Transactions Inter Branch / Cross Branch
Sr. Annual Volume during a 1 Quart or part of thereof

No Calendar Year
1 Deposits (Cash)
I. Free – within city.
II. Rs. 300 flat charges. Inter city.
(Depositor will Pay)
2 Withdrawals (cash) I. Free – within city.

(Drawers will Pay)
3 Cheque Deposits I. Free – within city.
(HBL Cheque - For credit to II. Rs. 300 flat charges. Inter city.
HBL Account.) (Beneficiary will Pay)
4 Local Funds Transfers (LFTs) I. Free – within city.
Online Funds Transfer / Cross
Branch Transfers (Batch
Branches) (Account Holder will Pay)

Consumer Financing:
Table 5.5: Auto Loan
Sr. Description Charges

No
1 Application processing fee Rs.6,000/- (This will include charges
(Inclusive of documentation related to Data Check, Verification
charges) and Stamp Duty)
Rs.3000/- (For individuals applying
again after successful maturity of one
facility or settlement after 12 months
of facility period)
2 Partial Payment 1. Partial Payment prior to delivery of
(Not Allowed for Residual vehicle, @ 10% of amount being
Value Based Auto Lease) settled.
2. Partial Payment delivery of vehicle, @
5% of amount being settled.
3 Early Settlement charges 1. Termination prior to delivery of vehicle,
@ 10% of outstanding amount at the time
of settlement.
2. Termination after delivery of vehicle, @
5% of outstanding amount at the time of
Settlement
4 Valuation Charges Rs.3500/-
5 Late Repayment Charges on Rs.600/- per late payment
overdue rental
6 Re-processing Charges Actual or Rs.35, 000/- whichever is
higher.
Note: Auto Lease charges may vary during business promotional scheme or
launching of new products.

Table 5.6: Housing Loan

1 Processing fee Rs.6000/-
2 Lawyer Fee Rs.3000/-
3 Early Termination/ Settlement 4% of principal outsourcing.
charges
4 Partial payment charges 4% of the amount adjusted or
deposited.
5 Re-processing Charges Actual
Table 5.7:
Personal Loan

1 Processing fee 1% of Loan Amount
2 Early Termination/ Settlement charges 5% of principal outsourcing.
3 Late payment Charges Rs.500/- Flat per
presentation
Note: Partial Payment not Allowed
Table 5.8:
Credit Card
1 Annual fee (Primary)-Green Card Rs.375/- Flat
2 Annual fee (Supplementary)Green Card Rs.150/- Flat

3 Card Replacement fee Rs.250/- Flat.

Place
In Marketing Mix Place is an important „P‟ for any organization. Habib bank is
performing the role of market leader in this competitive market. HBL with 1424
branches spread across the country. At present, Habib Bank Limited is the biggest
bank of Pakistan with a network in Pakistan. HBL is also providing its services to
overseas Pakistanis. HBL has its overseas branches in five continents and twenty-
six countries of the world. Domestic Branch network of the bank comprises of
branches in twenty one regions of the country.
Head Office:
Habib Bank Plaza

I.I Chundrigar Road
Karachi – 75650
Pakistan
Phones: 2418000 (50 lines)
Fax: 9217511
One of the important branches of Habib bank in Sialkot is Paris Road,

Branch. The code of this branch is 0574. It is the main branch called the
hub of branches. Hub is mainly supervisor branch of some other branches.
All the underlying branches report to hub branch. Some of the branches that
come under the supervision of Paris Road, branch are:
o Kashmir Road Branch
o 
Small Industrial Estate Branch



Promotion
Promotion plays an important role in the progress of any business. Different

companies use different tools for promotion. HBL also use different tolls for
promotion its business which are following:
 HBL provides much information on its website to facilitate its customers at

their homes, offices etc. 

 HBL uses print media as well as electronic media for its publicity 

 HBL fixes bill boards and published broachers 

 They do marketing in sport functions, events of cricket and hockey and in
other national games. 

 Functions are held in honor of their corporate clients in order to get their
feed back to increase the efficiency of the bank. 

 Attractive slogans 

 Giving best services to their customers 

 Make more accessibility of their products and services through new
technology 

 Feedback to customers. 
Social Responsibility:
The public Relation Division of HBL maintains effective rapport with the
general public by communicating the policies and schemes of the bank
through press and electronic media. Besides maintaining close relationship
with journalists and advertising agencies, the Division also receives the
visiting dignitaries and delegations from abroad.

HBL believe in serving the nation and building the country strong. HBL is
always at the forefront to support noble causes and promoter the social and
cultural activities in the country. The public Relation Division of HBL
sponsors various social, cultural and sports events to generate healthy
activities in the society. It also organizes religious programs to uphold the
religious tradition of our people. The Division represents the bank at
important forums to exchange views on national and international issues
with various organizations to boost the intellectual activities.
Sponsorship:
Following are some of the major events sponsored by the banks in

the recent past that demonstrates its commitment to the society and its
desire to remain at the forefront to push forward the national cause.
Health Services:
 Annual fund raising campaign of December 2000 of Marie Adelaide

Leprosy 

 Fund Raising Campaign of Shoukat Khanum Memorial Hospital 

 Zakat Raising Campaign for JPMC, cardiovascular, patient‟s welfare 

 Pakistan Medical Association Conference 

 Promotion of Kidney Center Karachi 
Social Events:
th
 13 International Psychiatric conference held in Karachi 

 Calligraphy of Fine Art to MR. S .L Hussain 

 Hyderabad Bankers Club 

 Promotion of culture by Art Council of Pakistan, Karachi 


 Promotion of activities at press club and press associations 

 Promotion of Ramadan Festival with Karachi Sheraton 
Information Services:
th
 100 anniversary of Quaid –e- Azam ‘s Sindh Madressa-tul- Islam 

 Promotion of Horticulture Foundation of Pakistan 

 Various seminars at professional Institutions like I.B.P,I.B.A 

 Chamber of Commerce and Industry Hyderabad 

 Promotion of Pak China relationship and tourism through Silk Route
Festival Gilgit 2000 
Sports Division:
Sports division is also providing different kinds of services for the

promotion of sports in the country. The coaches of Football and Basket Ball
are working tirelessly for improving the standard of our special children by
imparting training and coaching to them and through their efforts during the
last two special Olympics, Pakistan has been able to won 4 Gold Medals.
HBL is also extending our coaching facilities to various schools in Karachi
and Lahore in Cricket and Football.
Cricket:
HBL has a history of providing great cricketers to Pakistan Cricket. Our
cricket players have brought laurels to our bank as well as to the country.
Players like Javed Miandad, Mohsin Khan, Abdul Qadir, Salim Malik and
Ijaz Ahmad joined Habib Bank at very early stage of their career. The
exposure given by the bank helped them polish their skills to become
renowned cricketers of the world. These days players like Shahid Khan
Afridi, Younus Khan, Saleem Elahi, Danish Kaneria, Hasan Raza, Kabir
Khan and Imran Farhat are representing HBL.

Hockey:
Habib bank has produced number of Olympians and International Hockey

players like late Munawar-uz-Zaman, Hanif Khan, Waseem Feroze, Safdar
Abbas, and Iftikhar Syed who represented Pakistan in early seventy’s and
Eighty’s. Present players like Sohail Abbas, Waseem Ahmad, Kashif
Jawad, Sameer Hussain represented Pakistan in Sydeny Olympics 2000.

Part 5: Marketing Analysis
HBL Swot Analysis:

SWOT Analysis
Strengths:
 Computerization: The biggest strength of Habib Bank Limited is that they

have fully computerized banking system. Due to which they have an edge
of the competitors. The computer system not only helps them in providing
the customer better and efficient services, but also reduces the manual work
required by the staff. They provide the real time access. 

 Staff: Other strength is their staff. Their staff is fully trained. They have
their own staff training academy. Any new employee who is given job in
the bank has to first complete the training period of four months and it is
compulsory to pass it, otherwise they are not given job. During this period
they are given training on every aspect of banking. Thus making them
perfect as a banker. 

 Fast Service: Another very important thing is their fast service. Anything is
done very quickly. If you are looking for a loan they can give it you in only
4-5 days. If it has all the documents they require and is approve by the head
office. 

 Employee Policy: Habib bank is the only bank, which has its own
employee policy in the written form. Thus giving each employee a chance
to see what opportunities he has if he can work in this bank. Every rule and
regulation of the bank has been briefly described. 

 Twenty-six foreign branches: HBL has 26 branches in five continents of
world where HBL is providing its services. Global presence through
affiliations and correspondent arrangement. 

 Merger: Habib Bank merger with „Allied Bank of Pakistan‟ to create a
new bank „Habib Allied Bank‟ in order to provide more efficient services
to overseas Pakistani people. 

 Increase ATMs Range: HBL, ABN Amro, and Askari Commercial

Bank have joined their hands in order to provide largest ATM network
to their customers. 

 Future Automation plan 

 Offer Project Financing 

 Offer Working Capital Facility 

 Large Network: Largest network of 1500 domestic and 55 overseas
branches 
Weakness:
 Lack of quick decision making through giving financial powers to line

management i.e. too many administrative layers are involved in decision
making process (especially in advances) as compared to new
competitors. 

 Higher administration costs along with bad debts/ stuck up advances
portfolio. 

 Lower return on assets (ROA) in terms of international and Pakistani
financial market average 

 Dissatisfied customer ratio is 30% 

 Poor knowledge/training of staff in automation sector. 
Opportunities:
 With the coming of new government, the economic and industrial

reforms brought into the country seen promising. The people within and
outside the country are now much more interested in investment. So
now is the right time to avail this opportunity and attract those investors 

Threats:
The recent privatization of nationalized banks shows a serious threat to the existing
banks in private sector. These big banks pose threat to Habib bank in two ways:
1. They improve their working efficiency and quality of services. These banks
are offering attractive schemes and high return on the deposit schemes, but
due to their inefficient services, the customers are attracted towards private
banks like Habib bank, Askari Bank etc. So if these banks are not
privatized, no downsizing takes place and only the quality of their services
are improved, then they can be a huge success.
2. On the other hand, if they are privatized, then automatically the quality of
services will be improved and even after downsizing they will end up in a
much large network and a bigger setup. Thus the competition in private
sector will increase manifold which will severely affect the existing banks
in private sector.
Marketing Strategy:
According to the assistant vice president of Region B
“We continue to build on our track record and in our quest for
excellence we strive to meet the needs of both our customers and our
employees. At Habib Bank we aim to ensure customer satisfaction by
providing high quality banking services. This is made possible by the
professionalism of our employees all of whom are provided with the
requisite training and opportunities to enable them to realize their full
potential.”
Customers Needs, wants, and Demands
Various people have different demands. Some are the corporate customers
that need huge amount of money and some are consumers who want to have
current

account or short term loans. Habib bank limited is a large organization. It is

serving people from all walks of life. It has introduced different kinds of
schemes according to the demands of customers.
HBL Marketing Offerings:
Habib bank offers a number of services according to the different needs and
demands of several customers which consist of the following:
Finance for working capital:
1. Running finance
2. Cash finance
Trade finance facilities:
1) Export finance
2) Finance against packing credit
3) Finance against foreign bills
4) Foreign Currency Export Finance
5) Foreign Bills Purchase
Import Finance:
1) Finance against Trust Receipt

2) Finance against Imported Merchandise
3) Foreign Currency Import Finance
4) Letter of Credit
Finance for Capital Investment:
1) Demand Finance
2) Leasing

General Products:
1) Letter of Guarantee (LG)

2) Bid and performance bond
3) Mobilization Advance Guarantees
Other Products and Services:
1) Commercial Day to day banking

2) Current Accounts
3) Cash Management Services
4) Habib Bank Easy Access
5) HBL E-Banking
6) ATM
7) Flexi loans
8) Lifestyles
9) Auto finance
10) House finance
11) Habib bank i card
12) HBL rescue (balance transfer facility)
Customer Value and Satisfaction:
According to the Assistant Vice president region B Lahore
“Only three things are important to Habib Bank limited, Service Quality,
Service Quality, and the other is service quality. Habib bank focuses on
providing quality service to its customers thus providing them more value
and satisfaction.”
Overseas Pakistanis -------------An important market place.
Inward remittances from overseas Pakistanis provide an immeasurable

support to the economy. Owing to Habib bank limited’s unique

Combination of the largest domestic and international networks; HBL

processes the highest volume of overseas remittances into Pakistan. HBL
recognizes that speed and efficient processing is the requirement of
remitters and to meet these needs, HBL has put in place its FAST Transfer
service and its fully automated processing center in Karachi ensures that all
remittances are delivered within 24 hours in urban areas and 48 hours in
rural areas. In HBL‟s Retail network, it has an unmatched distribution
network, which provides HBL many opportunities for growth, and HBL
plans to use this to soon provide additional services, including wealth
management services.
Habib bank has to decide two things while designing customer-driven

marketing strategy.
1. Selecting customers to serve
 Market segmentation 

 Target marketing 



2. Choosing a value proposition
Market segmentation:
Habib bank has divided the market on the basis of benefits sought. Different
customers seek different benefits from a bank. Habib bank limited is serving its
customers with respect to their nature of demand.
Segmenting Consumer Market:

Major categories are as under

First are those household consumers that need profit on their deposited
money. Habib bank limited is offering Saving accounts for these customers.
Second are those customers that need short term loans to purchase their
needed items like car or house, Habib bank has offered Habib Bank Auto
Finance, Habib Bank Flexi Loans, House Finance for these customers. Habib
Bank Auto Finance, offers the customer, an expedient and economical way of
fulfilling his requirement of owning the car of his choice on his terms. This
lease product has been designed to provide the consumer flexibility in terms of
choice of car and tenure. Habib Bank FlexiLoans is a personal loan product,
which is available for salaried individuals for a variety of reasons. Whether it
is for a child’s education, a much needed vacation, a daughter’s wedding or
even just a shopping spree, Habib bank
FlexiLoans is a flexible financing scheme which can actually provide the
much needed cash to fulfill all such requirements.
Third segment consists of those customers that are concerned about Islamic
values and don’t like interest. Habib bank is offering Profit and Loss sharing
account for these customers.
One segment of consumers only wants to deposit their money for

convenience and safety. Habib bank Limited satisfies this segment of
consumers by offering Current accounts and lockers to fulfill customer’s daily
banking needs.
Habib bank limited also offers, Hajj/Umra Services for those customers who
want to offer these Islamic duties.
Segmenting Business Market:
Habib bank limited segments business market on the basis of benefit sought also.
Habib bank’s Corporate Banking Group targets large institutional and corporate
customers in Pakistan through 10 dedicated corporate banking centers in all major

cities. The CIBG portfolio consists of most of the largest names in the market and
represents all major industry groups.
Corporate Banking offers tailor made products / solutions as required by

corporate customers which includes:
1. Funded facilities, ranging from short to medium and long term lending.
2. Trade related financing.
3. Foreign currency financing.
4. All sorts of non-funded facilities / services which include Cash receipts /
payments, Remittances, Collections, guarantees, letter of credit etc..
5. Customized products / solutions.
Commercial Banking:
Commercial banking at Habib Bank Limited focuses on small and medium

sized businesses. This segment is the traditional stronghold of Habib bank
limited with proven expertise and market knowledge. Units dedicated to
service small and medium sized business are located at Karachi, Lahore,
Faisalabad, Gujranwalla and Sialkot. These relationship managers assist
existing and potential customers with their financial needs. Following services
are provided by Habib bank limited to the small and medium enterprises.
1. Finance for Working Capital

2. Trade Finance Facilities
3. Finance for Capital Investment
Trade Finance and related services are a long-standing core business of Habib
bank limited. Through this Habib bank targets those customers who have their
import and export business all over the country or in foreign countries. It
enables traders to capture global opportunities; Habib bank limited has presence

In 26 countries, in addition to its extensive network of overseas banking

partners and correspondents. Habib bank’s global reach positions it to
facilitate and finance the world’s major trade flows.
Segmenting international Markets:
Habib bank has 55 international branches which has enabled HBL to provide
comprehensive services that meet customer needs. Habib bank limited mainly
targets overseas Pakistanis. Although it’s a small segment but really profitable.
Targeting customers:
Habib bank limited uses differentiated marketing strategy to target several

market segments and design separated offers for each. Habib bank has
developed a stronger position with in each market segment.
Positioning:
Habib bank limited has overall positioned itself as

The Power to lead
Habib bank limited is offering greater number of services with better quality
and convenience and serving the larger number of customers than any other
bank gives it the power to lead. Habib bank limited has positioned itself
differently for every service. Like
 Value Visa Debit Card: it‟s current. It‟s currency [Depicting it as the true
medium of exchange.] 

 Retail Banking: Better Solutions for a better life. [Creating a picture in the
minds of customers that Habib bank ltd has the solutions to their financial
problems.] 

 Money transfer (for overseas Pakistanis) : Apno ki Mehnat, Apno ki

imanat [It means that the income of overseas Pakistanis is safe in Habib
bank limited and will deliver to their relatives as soon as possible.] 

 Habib bank Flexi Loans: Cash, when you need it [Depicting this service
as perfect personal financing scheme for salaried individuals.] 

 Auto Finance: Your Car your term [Bringing a great opportunity to satisfy
customers drive for a luxury car.] 
Communicating and Delivering the Chosen Positions:
Habib bank limited communicates and delivers its chosen positions through TV
commercials, magazines, trade shows, and internet. Due to these promotional
strategies, people are very well aware of the services provided by Habib bank.
New Product development
Habib bank ltd does new product (service) development not just because of
the previous services failure but also to cope up with the rapidly changing
situation of financial markets. Habib bank does this by adding more
attributes in its original services, by providing more conveniences, benefits
and interest to its customers.
Process of New Product Development:
Like other companies, the process of new product development in Habib

bank starts with the stage of idea generation. Habib bank uses internal idea
sources as well as external idea sources.
The assistant manager says:

“We believe that creativity and innovation comes from talent, knowledge
and experience and it is our endeavor to provide and maintain an
environment which not only nourishes these strengths but also provides
opportunities for the staff to have a career which has multidimensional
growth opportunities.”

Product Development Strategy:
The executives, branch managers and operatives combine their minds and
generate valuable and innovative ideas. It regularly consults its customers,
stake holders and State bank of Pakistan for its betterment. Rests of the idea
reducing stages are done by a committee specially made for this purpose.
Like other successful companies, as the ratio of its service failure is not so
high, introduces its services without proper testing.
HBL Marketing Strategies
Socially Responsible Marketing:
The Public Relation Division of HBL maintains effective rapport with the
general public by communicating the policies and schemes of the bank
through press and electronic media. Besides maintaining close relationship
with journalists & advertising agencies, the Division also receives the
visiting dignitaries and delegations from abroad.
HBL believes in serving the nation and building the country strong. They
are always at the forefront to support noble causes and promote the social &
cultural activities in the country. The Public Relation Division of HBL
sponsors various social, cultural and sports events to generate healthy
activities in the society. It also organizes religious programs to uphold the
religious tradition of our people. The Division represents the bank at
important forums to exchange views on national & international issues with
various organizations to boost the intellectual activities.

Concept used by HBL:
HBL uses the market concept. it means that they first analyze what are the
needs and requirements of the customer and then provide its services
accordingly.
Partner relationship management:
HBL do the partnership inside the company to provide best services to its
customers. But their style is little bit different. It has a committee for this
purpose. In this committee experts from all departments participate but
under the leadership of CEO who after knowing the problems try to resolve
them.
HBL has also partnership relationship outside the organization. To provide
convenience to its customer HBL is trying to partnership with visa, master
card. It has also signed a contract with ABL in order to give more
satisfaction to its consumers.
Competitors:
All the banks which are now coming are threat for HBL. Although they are
very small banks but the way they are progressing is very threat full for
HBL. These banks include Faisal bank, Muslim commercial bank, Union
bank, ABL etc
Advertisement:
HBL believes that if its services are good and no one can provide these
services like it then there is no need for advertisement. Customers will
ultimately shift to its organization. but in case all the other banks have the
same facility to provide then HBL defiantly advertise its service. Many of
the workers think that advertisement is the source through which you can
retain your position in the minds of our customers. Habib bank limited has
spent 400 million Rs on advertisement last year.

Part 6: Financial Analysis
HBL FinancialAnalysis

Financial Analysis:
Financial Summary
(2002-2012)





Financial Analysis
No company can remain in business if it cannot sustain and grow its profits and
banks are no exemption. If Habib Bank Limited wants to sustain its position as a
premier banking institution and to satisfy its customers, it itself needs to become a
profitable organization, that not only has growth in profits, increase its assets but
also provide its shareholders with the maximum return so that they are also satisfied.

Horizontal Analysis:
A percentage analysis of financial statements where all balance sheet or income

statements figures for a base year equal 100.0 % and subsequent financial statement items
are expressed as percentages of their values in the base year.
HBL’s Indexed Balance Sheet

Base Year : 2010
Indexed (%)
Assets 2010 2011 2012
Cash and balance with other banks 100.0 126.6 192.58
Investments 100.0 164.21 312.6
Advances 100.0 99.48 108.71
Operating fixed assets 100.0 118.6 146.28
Total Assets 100.0 123.2 174.14
HBL’s Indexed Income Statement

Base Year : 2010
Indexed (%)
2010 2011 2012
Net Income 100.0 123.2 128.3
Mark up Interest 100.0 120 122.9

Income
Non - Mark up Interest 100.0 115.8 125
Income
Administration 100.0 121.1 128.07
Expenses
Profit Before Tax 100.0 126.9 129
Profit After Tax 100.0 131.1 131.23

Vertical Analysis:
An analysis of percentage financial statements where all balance sheet items are divided by
total assets and all income statements items are divided by net sales or revenues.
HBL’s Common Size Balance Sheet
Common size(%)
Assets 2010 2011 2012
Cash and balance with other 8.82 9.07 9.76

banks
Investments 27.5 36.73 49.4
Advances 49.71 40.13 31.03
Operating fixed assets 1.74 1.68 1.46
Total Assets 100.0 100.0 100.0
Common size (%)
Liabilities+Equity 2010 2011 2012
Bills payable 1.05 1.21 1.17
Borrowings from financial 4.37 3.46 12.2

institutions
Deposits and other accounts 80.82 81.92 75.4
Share capital 1.08 0.96 0.75
Total Liabilities+Equity 100.0 100.0 100.0

HBL’s Common Size Income Statement

Common size (%)
2010 2011 2012
Net Income 100.0 100.0 100.0
Mark up Interest Income 90.07 87.6 86.2
Non - Mark up Interest Income 24.46 22.98 23.8
Administration Expenses 46.48 45.6 46.39

Profit Before Tax 51.8 53.35 52.11
Profit After Tax 32.65 34.7 33.3

Ratio Analysis:
Financial ratios are useful indicators of a firm’s performance and financial situation.
Financial ratios can be used to analyze trends and to compare the firm’s financials to
those of other firms. Ratio analysis is the calculation and comparison of ratios which are
derived from the information in a company’s financial statements. Financial ratios are
usually expressed as a percent or a time per period. Ratio analysis is a widely used tool of
financial analysis. It is defined as the systematic use of ratio to interpret the financial
statements so that the strength and weakness of a firm as well as its historical
performance and current financial condition can be determined. The term ratio refers to
the numerical or quantitative relationship between two variables. With the help of ratio
analysis conclusion can be drawn regarding several aspects such as financial, health,
profitability and operational efficiency of the undertaking. Ratio points out the operating
efficiency of the firm i.e. whether the management has utilized the firm’s assets correctly,
to increase the investor’s wealth. It ensures a fair return to its owners and secures
optimum utilization of firm’s assets. Ratio analysis helps in inter-firm comparison by
providing necessary data. An Inter firm comparison indicates relative position. It provides
the relevant data for the comparison of the performance of different departments. If
comparison shows a variance, the possible reasons of variations may be identified and if
results are negative, the action may be initiated immediately to bring them in line. Yet
another dimension of usefulness or ratio analysis, relevant from the view point of
management is that it throws light on the degree efficiency in the various activity ratios
measures this kind of operational efficiency.
1. Liquidity Ratios
2. Leverage Ratios
3. Activity Ratios
4. Market Ratios
5. Efficiency Ratios

Total Assets Turnover:
This ratio measures that how much turnover is generated by the total
assets of the organization. This is calculated by the given formula:
Total Assets Turnover = Annual Sales or Total Income/Average Total

Assets
Year 2012 2011
TAT
4.5% 6.2 %
TAT %
Interpretation:
This ratio should be high which is better for the business but, HBL total
assets turnover showing decreasing trend as compared to 2011 when it was
6.2 %.

Return on Investment:
This ratio is calculated by dividing Op profit by the average of operating

assets as shown by the formula:
Return on Investment = Operating Profit/Average Operating Assets
Year 2012 2011

ROI 0.324% 0.623%
ROI %
Interpretation:
The answer of this ratio should be high or should be shown a positive

increasing trend for better and favorable results. HBL's ROI is showing a
decreasing trend over the past years and now reached to 0.324 % which is
not favorable for the bank.

Return on Deposits:
This ratio measures the return on deposits by the total deposits of the
organization obtained by dividing net income after taxes to total deposits as
shown by the formula,
Return on Deposits = Net Income after Tax/Total Deposits
Year 2011 2012

ROD 2.39% 1.8%
ROD%
Interpretation:
As this ratio shows the total return which business gains from the total
deposits, so it should be high which will be better for the business but it
is showing a continuous decreasing trend from 2011 to 2012.

Fixed Assets Turnover:
This ratio measures the efficiency of using fixed assets in generating

income or sales. It is the ratio of annual sales to total fixed assets as given
by the formula,
Fixed Assets Turnover = Annual Sales or Total Income/Total

Fixed Assets
Year 2011 2012

FAT 85.32% 82.92 %
FAT %
Interpretation:
The result of this ratio should always be high for favorable business
environment because high ratio shows that business is investing more
efficiently and effectively in fixed assets for generating sales. It is showing
a negative trend as it is decreasing which is not good for the bank.

Current Ratio:
Current ratio indicates the liquidity position of the business that

whether business can fulfill its obligation or not. It is the ratio of current
assets to current liabilities as:
Current Ratio = Current Assets/ Current Liabilities
Year 2011 2012

CURRENT RATIO 3.35% 2.97%
CR %
Interpretation:
The current ratio should be in reasonable range. It should not be too high or
too low, both conditions are not favorable. In this case of HBL, it is showing
a decreasing trend which is not favorable for the business because it may
pose difficulty for the bank to fulfill its current obligations.

Dividend Payout Ratio:
This ratio tells about the relationship between earnings and dividend that
whether earnings are supporting dividend payments or not. It is calculated
by dividing dividend per share to earnings per share (EPS) as shown by the
given formula:
Dividend Payout Ratio = Dividend per share/EPS
Year 2011 2012

DPR 37.5% 40.85%
DPR %
Interpretation:
Usually higher dividend payout ratio is favorable and it is high for HBL in
2011 which is favorable. HBL is a mature bank that's why it is paying high
dividends. Its high dividend payout ratio keeps its shareholders happy.

Debt Equity Ratio:
This ratio tells about the financial leverage of the organization that what
proportion of debt and what proportion of equity is being used by the
organization for financing its available assets. It is calculated by dividing
long term debt to total capitalization as shown by the given formula:
Debt Equity Ratio = Long Term Debt/ Total Capitalization
Year 2011 2012
DER 14.03% 25.93%
Debt to Equity %
Interpretation:
A higher value of debt equity ratio is much favorable for the business as
its high value tells about the efficiency of the business to using its
available debt for financing. HBL debt equity ratio is showing an increase
in 2012 from 14.03 in 2011 to 25.93% in 2012.

Profitability Ratios:
These ratios tells about the profitability of the business and is consists of the
following ratios from which we can assess the profitability of the business.
Net Profit Margin:
This ratio is mostly used for the internal comparison. This ratio
shows the percentage of net profit after tax to the total
income/revenue. A higher profit margin ratio indicates a higher
margin safety and lower risk for the organization and vice versa.
NPM = net profit after tax / total income
Year 2011 2012

NPR 32% 30.33%
NPM %
Interpretation:
It is showing a decreasing trend which is not better for the

business. It is indicating a greater risk and low margin safety for
the business.

Operating Profit Margin:
This ratio tells us about the percentage of operating profit to total

income
Year 2011 2012
OPM 45.12% 47.33%
OPM %
Interpretation:
Its high value is favorable for the business. It is overall

showing an increasing trend as compare to previous years. It
is favorable for the business. It means HBL operations are
generating good profits.

Return on Total Assets (ROA):
This ratio tells about the percentage of net profit/earnings which

business is attaining by using its total available assets. It is calculated
by dividing net profit to total assets as shown by the given formula:
Return on Total Assets = Net Profit/Total Assets
Year 2011 2012

ROA 2.16% 1.63%
ROA %
Interpretation:
Higher ROA is favorable for the business which shows better use of
assets by the business for generating profits. HBL's ROA is showing
a decreasing trend over past years.

Return on Equity:
This ratio shows a relationship between net income after taxes and
shareholder’s equity, and measures the efficiency of the organization
of generating profits by using shareholder’s equity. It is calculated by
dividing net income after taxes to shareholder’s equity:
ROE = Net Income after Tax / Shareholder's Equity
Year 2011 2012
ROE 2.39% 1.8%
ROE %
Interpretation:
It should be high for favorable results. This ratio of Habib Bank is

showing a decreasing trend which is not a good sign.

Efficiency Ratios:
These ratios tell about the efficient use of the assets and liabilities of
the business which is calculated by the following ratios:
Investment to Total Assets Ratio (ITA):
This ratio tells about the percentage of investment to assets

calculated by dividing investment to assets as shown by the
following formula:
Investment to Total Assets Ratio = Investment/Assets
Year 2011 2012

ITA 36.7% 49%
ITA %
Interpretation:
This ratio should be in high figures for favorable results of the

business. HBL ITA is showing an increasing trend. Bank should try to
keep it high by making better policies.

Deposits to Total Liabilities:
It is calculated by dividing total deposits to total liabilities as shown

by the given formula:
Deposits to Total Liabilities = Total Deposits/Total Liabilities
Year 2011 2012

DTL 90.6% 82.2%
DTL %
Interpretation:
It is showing a decreasing trend. It means our liabilities other than

deposits are increasing. Bank is taking burden of other liabilities
more, rather than to focus on deposits only.

Capital Adequacy Ratios:
Equity to deposits ratio:
This is the ratio of total shareholder’s equity to total deposits

and is calculated by the following formula,
Equity to deposits ratio = Total Shareholder’s Equity/ Total

Deposits
Year 2011 2012

EDR 11.6% 10.8%
EDR %
Interpretation:
It is showing an average decreasing trend over the past three years

which is favorable. It means deposits are increasing and risk of
shareholders increasing.

Equity to Assets Ratio:
This is the ratio of total shareholder’s equity to total assets and is

calculated by the following formula:
Equity to Assets Ratio = Total Shareholder’s Equity/Total Assets
Year 2011 2012

ETA 9.5% 8.18%
EAR %
Interpretation:
It is showing a decreasing trend which is not favorable for the

business. It shows total assets financed by equity. Now equity
financing is decreasing by HBL. The reason may be it is easily
available with debt financing and enjoys tax benefit also due to
increased debt financing.

Regulatory Ratios:
Cash to Deposit Ratio:
This ratio tells about the percentage of cash available as compare

to the deposits. It is calculated by dividing cash on hand and with
other banks to total deposits as shown by the given formula:
Cash to Deposit Ratio = Cash on hand and with other Banks/

Total Deposits
2012 2011
CDR 18.04% 17.97%
CDR %
18.04%
17.97%
2011 2012
Interpretation:
This ratio tells us about the liquidity status of the bank. It has
slightly decreased. And to meet the current obligations for bank
can be difficult.

Advances to Deposits Ratio:
This is the ratio of advances to deposits which shows the

percentage of advances as compare to deposits and is calculated by
the given formula:
Advances to Deposits Ratio = Advances/Deposits

Year 2011 2012
ADR 48.99 41.44%
ADR %
Interpretation:
This ratio tells about the status and measure of the level for
advancing loans. It is showing downward trend which shows that
bank is not advancing loans as much as it was in previous years.
The reason may be decrease in liquidity as cash is not available
to bank. That's why there is downfall in advances of HBL to avoid
liquidity issues.

Part 7: Internship Activities
HBL Internship Activities

Internship Activities:
First of all, orientation was attended in RHQ (Regional Headquarter) Sialkot which
was given by Asif Bajwa(RGM) at July 09, 2013, and received the congratulation
letter as an Intern in HBL by him along with a copy of Terms and Conditions of
Internee. Formally, i commenced my internship in HBL Kashmir Road
(Commercial Sub Center) Sialkot as on July 10, 2013, and completed my
internship after six weeks as on August 20, 2013. On the very first day I reached to
bank on its official working time and reported to Mr. Saleem Bhatti (Operational
Manager), who introduced me with its staff and explained me about the
functioning of the branch. During six weeks of internship, I worked in different
departments of the bank for enhancing my knowledge and enriching my
management and analytical skills about banking practices.
First Week (General Banking):
I studied different concept of general banking in the first week of my training. The
operational manager of the bank explained me about different operations of
general banking and provided me a brief detail about the following:
 Cheque 

 Kinds of Cheques 

 Bank Overdraft 

 Bank endorsement 

 Special crossing/ General crossing 
Cheque:
A Cheque is an unconditional order in writing, drawn by a customer on his
bank, requesting to pay on demand a certain sum of money, to a person
named in the Cheque, or the bearer, or to the order of a state and person. So,
it is a negotiable instrument signed by drawer to pay a certain amount
drawn on a specified bank is called bank Cheque.

Here the parties that are involved

 Drawer (who have an account in the bank) 

 Drawee (bank) 

 Payee (who receive the amount) 
Different kind of Cheques:

Cheques are divided in two classes:
1. Bearer Cheques
2. Crossed Cheques
Bearer Cheques:
Bearer Cheque is one which the phrase “bearer” is written after the name of
the payee. It is payable to the bearer, holder or possessor i.e. anyone who
may present it at the bank. The bank is under no liability to ascertain that
the payment is made to the right person.
Cross Cheques:
When two parallel lines are drawn across the face of a Cheque, it is said to
be a crossed Cheque. A crossed Cheque may be general or special.
Bank Draft:
Commercial bank gives the facility of remittance or money from one place
to another. Bank draft is one of the means of the transferring money from
one place to another. It is an order drawn by bank on one of its branches
requesting the later to pay a specified sum of money to the person named in
draft. So, it is a kind of bill of exchange. The main difference between
Cheque and bank draft is that, bank draft is issued by authorized bank and
not issued by the parties while Cheque is drawn by the parties.

Bank Endorsement:
Sign on the back of any Cheque is called endorsement and then give it to
the cashier. Suppose I want to withdraw money from bank, then for this
purpose cashier asked me to sign on the back of Cheque, it is called
endorsement. Simply endorsement mean transfer the right of any instrument
o any other person.
General Crossing:
General crossing means the two parallel lines across the face of any
instrument without the name of any organization or a bank or a company.
The effect of a general crossing is that the holder cannot encash it himself at
the counter of the bank. He must deposit it to any bank which would obtain
cash for him from the drawee’s bank. In this way chances of fraud can be
minimized.
Second Half of First Week (Accounts Department):
After getting some information about general banking terminologies, I spend three
days in accounts department. Here, I learned the following areas that how many
types of accounts can be opened by a bank?
Kinds of account:
Three types of accounts are opened by the bank:
1. Current account
2. Saving account (profit and loss sharing account)
3. Fixed deposit account

Current Account:
Current Accounts can be opened for businessmen, proprietorship,

partnership, joint account holder and also for private and public limited
companies. In this type of account no interest is paid by the bank. Bank
receives service charges from their customers when ever their balance is
less than 20,000. The current account can be opened in the name of
individual / joint account holder, firm, company, trust, association of person
etc. But mainly this account is maintained by business class.
Saving Account:
As the name suggests this account is for those persons who want to make
small savings. This type of account is opened by the wage earners, small
retailers and salary earners. The rate of interest on this type of account
depends on the amount of profit earned by the bank. Here, you can open a
saving account for minors. Title of the account is on Minor’s name but it
will be operated by his guardian/parents until and unless he/she becomes
adult. This account can also be opened by joint account holder. But in case
of saving account, it is necessary that they must submit a written statement
that who will operate this account. Is it operated by with the signature of
both parties or not. Either or survivor.
Fixed Deposit Account:
In this type of account a certain amount is deposited for a fixed period such
as six months, one year or longer. The amount cannot be withdrawn till the
expiration of fixed period. A high rate of interest can be earned by the
customer on this type of account. In this department, I have opened several
current accounts and PLS accounts of different clients.

Account opening process:
Before a banker opens a new account he should ascertain whether or not the
person desirous of opening the account would a desirable customer. The banker
should determine the prospective customer’s integrity, respectability, occupation
and the nature of the business, by the introductory references and introduction
given at the time of account opening
Preliminary investigations are necessary because of the following reasons:
 Avoid fraud 

 Safeguard against unintended overdraft 

 Negligence 

 Inquiries about clients 
Specimen Signatures:
When an account is opened with a bank the customer gives the banker a
specimen of the form of signature which would appear on all his Cheques to
express his authority for the payment of Cheques drawn on his banker. This
specimen is taken generally on a card, specially designed for the purpose, and
as general rules for the customers, full name, and account number are also
entered on it.
KYC:
When to open an account, along with basic account opening form another form
is filled named KYC or know your customer form. This form gives the
necessary information about the customer. The important things in KYC form
are title of account, national identity card number, and expiry date.

of national identity card, expected deposit per month etc. Banker fills this
form in order to verify that the information provided by customer is true
Computer Entries:
Having filled the basic account opening form, KYC and specimen signature
card, information is fed in computer to generate customer account number
and to feed basic customer information in computer. Computer Entries are
done in software called MISYS. It has four following steps
1. ANC
2. OCA
3. ACC
4. CIM
ANC:
ANC is a key to enter new customer in the database. Having Written

ANC we press enter and software ask for following information
 Customer Full name (Title of account) 


 Customer short name 

 Customer’s Telephone number 

 Type of Tax (usually withholding tax that bank deducts from its
customers account) 

 Currency (account can be opened in local currency as well as in three
foreign currencies) 
Done with this, computer generates an initial customer number.

OCA:
OCA is second step in account opening procedure. IN this step we mention

customer account number (already generated by computer) and the type of
account we want to open. Account can be of several types but mostly
current and PLS accounts are opened.
CAA:
In the third step, we mention customer name, Father / Husband name,

complete address.
CIM:
In CIM, we input some basic information about the customer i.e.

customer name, marital status, gender, National identity card number,
Operational instructions (self or joint) and Next of kin. While opening an
account the name of a person is required to mention on account form to
which the bank may contact in case the person whose account is being
opened with the bank expired or not contacted. The other person then is
authorized to handle the account on behalf of the customer.
Initially while opening an account the person can’t be introducer of

him/herself. So, any account holder has to be introduced again every time
whenever he/she going to pone another account in the same bank but State
bank has changed this rule now.
No Need of next of kin name in the case of joint account

Second Week (Clearing Department):
In the second week of internship I learned about clearing. The basic function of
clearing dept. arises when an account holder deposits cheque of another bank to
collect its payment on his behalf or an account holder gives a cheque to any other
party concerning to any other bank. Clearing in HBL is done through NIFT
(National Institutional Facilitation Technologies).
Every day clearing bag is prepared by entering all the inward clearing cheque and
outward clearing cheques separately and different cover sheet of different colour is
used for each category. On cover page total cheques and total amount is written.
Usually a cheque is sent through clearing is credited to the depositor account day
after tomorrow.
Types of Clearing:
In this regard there are three types of clearings

 Inward Clearing 
 Outward Clearing

 Same Day Clearing 
Inward Clearing
Inward clearing means all those cheques which are issued by account
holders to other 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
Same Day Clearing
The cheques which are presented for the same day clearing will be settled
same day. The amount of cheque must be equal or above Rs-100,000 and
bank will charge flat commission Rs-580 on each cheque irrespective of the
amount which is above 100,000.
Third and Fourth Week (Trade Department):
In the third and fourth week of internship I worked with Mr. Muhammad Asghar
(Asst. Trade Manager) and Mr. Saleem Cheema (Trade Manager) for learning
about trade (imports and exports). The basic function of trade dept. is to facilitate
the customers while importing and exporting goods by charging the nominal
commission.
Exports:
Documents that are required for exports are given below:

o Customer Invoices
o Dublicate and Triplicate copy of E-Form
o Airway Bill
o Bill of Lading
o GD (Goods Description) Form
Receiving of the documents is given to customer by signing on the cover
letter along with the date by the assistant trade manager. Whole document is
scanned and send to CTPU (Central Trade Processing Unit). Approval is
made from Lahore CTP by Mr. Sajid Anwar. Discrepancies are
communicated through E-Mail and can be resolved easily. For any further
assistance you can call at 042-36281868.
139
After that enlargement of documents are done through FDBC software.

Afterwards scheduling is done in P.R.C register either A1(Export against
Advance Payment) or A2(Export against E-Form).When the payment is
received by the bank this will be communicated to customer by issuing
P.R.C (Proceed Realization Certificate) against exports. EDS (Export
Development Surcharge) is charged on each export on a flat rate of .025%
of FOB. EDS is prepared and submitted to SBP (State Bank of Pakistan) on
daily basis.
Export Certificate:
Export certificates are issued to the parties which demand this between
particular dates e.g. from 01-06-2012 to 31-12-2012.
Imports:
Documents that are required for imports are given below:

o Performa Invoices
o Copy of Original LC
o AT (Availment Ticket duly approved by CAD)
o Valid Insurance Cover
o IB-8 Form (Inland Imports)
o Form-I (Foriegn Imports)
Whole document is scanned and send to CTPU (Central Trade Processing

Unit) for approval. Approval is made from Lahore CTP by Mr. Jamil Sabar.
Discrepancies are communicated through E-Mail and can be resolved
easily. For any further assistance you can call at 042-36281867.
Return is submitted to SBP (State Bank of Pakistan by the end of each
month) relating to all imports and exports along with the necessary
documents.
140

Fifth Week and Sixth Week (Credit Department)
In the fifth and sixth week of my internship, I worked with Credit Manager Mr.
Yameen Mehmood along with different RM’s (Relationship Managers) Mr. Hafiz
Sultan and A. Majeed Lone (RM) who taught me everything regarding credit
issuance, preparation of credit memorandums with great care and graciousness.
Credit Issuance
Principles of lending:
Basically there are five principles which must be duly observed

while advancing to the borrowers.
They are:
 Safety 

 Liquidity 

 Dispersal 

 Security 

 Remuneration or profitability 

Safety:
The bankers funds comprise mainly of money borrowed from numerous customers
on various accounts, such as Current Account, Saving Account, call deposit
account, special notice account and term deposit account etc. Therefore the bank
has to observe the safety first. The bank must be very careful and ensure that the
depositor’s money should be advanced to safe hands where the risk of loss does
not exist or minimum.
Liquidity:
Liquidity means the possibilities of recovering the advances in emergency,

because all the money borrowed by the customer is repayable in lump sum on
demand. If the borrower asks for an advance for the purchase of fixed assets, the
bank should refuse because it shall not be possible for him to repay when the bank
wants his customer to repay the amount. Hence, the banker must adhere to the
consideration of the principle of liquidity very carefully.
Dispersal:
As a principle, the dispersal of the amount advances should be broadly based so

that a large number of borrowing customers may benefit from the bank’s fund. The
bank must ensure that his funds are not invested in only specific sector.

Security:
As a matter of professional vigilance the bank must carefully examine each

lending proposal and approve it on its own merit. However, the banker must
carefully examine some cushion also to fall back upon in case of changes in
circumstances after disbursement of funds to the borrower.
Remuneration:
The bank needs sufficient earnings to meet the following besides others:
 Return payable to the money deposited with it 


 To meet various statutory monitory requirements under the banking law 

 Salaries and fringe benefits payable to the staff member 

 Overhead expenses and depreciation and maintenance of the fixed assets of
the bank 

 An adequate sum to meet possible losses 
Lending Process:
Lending is the back bone of any bank. Without lending it can’t create profit not for
its customers and not for itself. Lending process in Habib Bank, like other bank,
includes ten steps
1. Marketing
2. Processing (proposal)
3. Sanctioning
4. Preparation of offer letter
5. Documentation
6. Clearance for CAD
7. Disbursement of loan

8. Maintenance
9. Recovery of markup
10. NPL (non performing loan)
Marketing:
The first step of the process starts with the marketing. Either the customer
himself walks in to borrow from the bank in order to meets its business and
personal requirements or the credit officers visit market to capture customer
after proper checking of business place, stock verification from at least
three parties.
Processing:
Customer is required to put an application, requesting the loan from the

bank. Along with the id card The present and future(expected) financial
statements of three years are required in order to judge the party and for
security purposes. After completion of necessary documents branch
prepares proposal and submit to competent authority CAD for approval.
Proposal generally contains all information regarding party. Such as name,
address, nature of business, CNIC, security (valuation from approved
evaluators that gives the both market value and forced sale value which is
always less than the market value), credit report from other bank (Either this
person has taken any kind of loan from other banks) and checking of stock
and report submitted by party.
Credit Analysis:
Credit analysis is conducted through credit memorandum of any party. It

usually comprises of minimum 5-10 pages. It includes different analysis of
the firm/party.
144
Preparation of Credit Memorandum:
It includes the following detail of any party:

 Company Overview
 Client Business Strategy for Coming Year
 Purpose of Getting Loan
o Transaction Rationale
o Rationale for Enhancement
o Cash Conversion Cycle
o Total Working Capital Requirement
o Existing Approval Lines
o Contribution From Own Source
 Security\Collateral
 Source of Payment
o Primary Source e.g. (Internal Cash flows)
o Secondary Source e.g. (Sale of Hypothecated Stock)
 Production Process
 Key Suppliers
 Terms of Selling
 Key Customers/Buyers and Buying Terms
 Management Assessment
 Financial Analysis
 Industry Analysis (With the Help of Chamber)
 Recommendation
Financial Spread:
A credit officer at branch level then prepares financial spread. Financial

spread is basically a format standardized by Habib Bank for all of its
customers. When customer provides his financial statements, they are then
styled according to standardized pattern. It is an excel sheet with linked
cells that just need to enter input or figures from customers financial
145
statements. It then just give a quick picture (as it has different checks in it)
that whether party is worth of advancing a loan or not.
Sanctioning By competent authority:
Credit committee at Regional Head Quarter (R.H.Q) or at Head office

Karachi sanctions the loan as per credit policy manual. The competent
authority at R.H.Q includes
R.C.E
R.G.M credit
R.A.G.M credit
After proper scrutiny of proposal documents, the sanctioning authority

sanctions loan by placing name stamp and signature. Separate serial number
is allotted to every section called sanctioning advice number e.g. 381/12.
Preparation of Offer letter:
 Fard (Register haddarah from patvari or Revenue Department) 


 Mutation 

 Approved plan 

 Evaluation 

 Permission to mortgage from LDA society 

 Noting of bank charge with excise and taxation department and
revenue department 

 Legal mortgage 

 Equitable market (Memorandum of deposit title) 

 AICS SHAJRA from patvari 

Clearance of document:
Clearance of document is being done by C.A.D (credit administration

department) at R.H.Q. After completion of all control and property
document, file is submitted to CAD for clearance. CAD minutely checks
and examines documents and then issue AT (Availment Ticket).
Disbursement of loan:
After issuance of AT from CAD the bank disburse the loan to party.
 Opening of running finance 


 Feeding of loan limit 

 Issuance of cheque book 
Recovery of Markup:
After advancing loan to the party the process of recovering the

markup from the party starts. It may be on monthly basis or on quarterly
basis. It might be on daily basis too but it all depends on the conditions
settled with the party.
NPL (Non performing loan):

In case the party defaults, the bank categorizes the loan. For first 90 days
bank classifies the loan as a “Substandard Loan”. And gives the reason to
the head quarter why it has happened. IF the party doesn’t give the markup
for 91 -180 days, bank reclassifies the loan and this time the loan is settled
under the heading of “Doubtful” loans and in case of 365 days or above
bank recognizes a loan as complete “Loss”.

Part 8: Recommendation & Conclusion
Leading Problems in HBL:
Some of the major problems that I found during my internship in overall HBL
management are:

 Huge dependency on Manual work still exists in HBL.

 There is noticeable communication gap between upper level
management and operational staff. 

 There is also over staffing in HBL (more than 13,000- employees are
working in this organization).

 Difference in approaches of experienced staff and young staff 

 Imported upper level management 

 Experienced staff is cramped mainly due to three reasons: 

o Salaries have not been revised from last 10 years 
o Promotions were given in the recent years and
o Experienced Habibians were neither satisfied by the privatization of
bank nor were they taken into confidence at that time. 
Recommendations & Conclusion

Recommendations
 Golden Handshake should be given to ineffective and inefficient

old employees.

 Repetitive involvement of CAD in every matter should be flying
down in a centralized manner.

 There should be authority in every region which ensures efficient
flow of communication and its understanding. 

 Periodically, result oriented surveys must be conducted regarding
employees and customers satisfaction.

 HBL should immediately take confident steps towards the welfare of
experienced Habibians like NBP. NBP is the best example in this
regard.



 The management should try to cutback job insecurity among the employees. 

 Training program should be introduced for internees and freshly appointed
employees. 

 HBL is charging high service charges as compared to the other banks, so
these should be lowered down. 

 BL should focus on maintaining its quality services in order to sustain
its current leading position in market.
 Manager’s Appraisal must be given to employees to improve the

satisfaction level of employees. And managers should get feedback
whenever possible from employees.

 Addition of value added features in different services that offer
competitive advantage is also a mean of avoiding customer dissatisfaction.
 Rapid incentives and promotions should be given to employees in order

to develop more interest for providing quality services to customers.


Conclusion:
HBL is considered as the First Bank working in Pakistan. No one can deny its role
in economic and industrial revival of our country. Definitely, HBL is the first
choice of everyone who believes in qualitative approach of banking an
environment of highly responsible people. Bank is enjoying a healthy market share
and taste of good status in terms of its operative features and customer support.
HBL is clearly the best bank operating in Pakistan. Corporate and commercial
functions are distinguished features of HBL experiencing a good reputation and
reasonable mark up with respect to prevailing market mark up with assurance of
satisfaction and support. I am witness of this thing HBL has more loyal customers
as compare to other banks, if more attention is given to commercial banking
customers then in few years HBL will hold more significant market share in
inward foreign remittances which is now 55%. HBL is the leading bank of our
country (in terms of branches and profits), It just need to focus on its quality and
services to hold its loyal customers for sustaining its current position.

HBL Internship Report

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HBL Internship

Submitted by: Muhammad Ali Raza

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establishment of Pakistan. Habib Bank also played an important role in channeling

On June 13, 2002 Pakistan's Privatization Commission announced that the

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Post Nationalization Era:

 School Banking, through which school going children were educated to

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 Participation in sports by employing sportsmen from the country. Not

 American Gold Coin Award 1975

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 Overall decline in economic conditions 

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 Developed country specific programs to build the Bank’s international

Status and Nature of Business:

HBL is a Banking Company, which is engaged in Commercial & Retail Banking

HBL is one of the largest commercial banks of Pakistan. It accounts for a

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On June 13, 2002 Pakistan’s Privatization Commission announced that the

Time Line and Growth of HBL:

1. 1941__Commenced operation with 25000 rupees in Bombay

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13. 2010__ Among top 500 global Financial Brands.

Pioneers in Innovative Scheme:

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3. To effectively manage and mitigate all kinds of risks inherent in the

HBL Strategic Overview:

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HBL believes in the advancement of society through the adoption of enlightened

Following are the strengths of the Habib Bank Limited

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Dominant Market position:

Key Banking Statistics

Table2.1 [Deposits] Rs. In Millions

1996 1997 1998 1999 2000 2001

Total 25,639 53,019 84,669 159,660 218,058 290,545

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1996 1997 1998 1999 2000 2001

Total 18,739 32,851 51,606 91,623 133,703 143,904

1996 1997 1998 1999 2000 2001

Total 5,489 13,073 16,791 39,923 54,892 93,652

1996 1997 1998 1999 2000 2001

Total 574 892 1,313 4,458 7,376 14,087

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1996 1997 1998 1999 2000 2001

Total 387 615 667 1,274 1,544 1,864

PERFORMANCE DURING FOUR YEARS

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Current Scenario of HBL:

Risk Management Framework:

Since the issuance of guidelines on risk management and the subsequent

Statement of Internal Controls:

The management of the Bank endeavors to attain a professional and efficient

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Islamic Banking is a growing market segment that offers attractive opportunities to

HBL Asset Management

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Top Management at the top is responsible for making organization wide