Internship Report on Habib Bank by irfanalimtm

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									             AN INTERNSHIP REPORT





               MUHAMMAD IRFAN
                 B.COM (P.U)




             The controller of examination,
             University of agriculture,

              We, the supervisory committee, certify that the contents and forms of
report submitted by MUHAMMAD IRFAN, regd. No. 2002- ag -1293,have been
found satisfactory and recommend that it be processed for the award of degree.

Supervisory committee

1.    Chairman             ………………………………………………..
                              (Mr. Hassan Rasool)

2.    Member               ………………………………………………..
                              (Mr. Shahid Tufail)

3.    Member               ………………………………………………..
                              (Mr. Faud Bashir)

 This report is required by my department. The purpose of report is to write down all the
major actives that are done by me in that particular branch during my internship training.
It Comprises of:

    Formal part
    Introduction of the organization
    The situational analysis
    Products and services
    Deposit department
    Remittance department
    Import and export department
    HRM department
    Credit and administrative department
    Work done by me
    Suggestions and recommendations

Sr. No.               Title
   1. Executive summary

   2. Contents

   3. Letter of HBL

   4. Acknowledgement

   5. Introduction

   6. Products of HBL

   7. Span of management

   8. Departmentalization

   9. Suggestions

          All praises belong to almighty Allah who the supreme authority knows
the ultimate relation underlying all sorts of phenomenon going on in this universe
& whose blessing & exaltation flourished my thought & thrived my ambitions to
have the cherished fruit of my modest efforts my humblest thanks to the Holy
Prophet Hazrat Muhammad (PBUH) who is forever a torch of guidance &
knowledge for humanity as a whole.
                                                         We deem it our utmost
pleasure to avail this opportunity to express gratitude & deep sense of obligation
to my revered teachers and bank persons for their valuable and dexterous
guidance, untiring help, compassionate attitude, kind behavior, moral support and
enlightened supervision during this whole project.
                                          Finally, I would like to extend hurtful
thanks to my adoring parents and friends for their day and night prayers sacrifices
and encouragement, moral and financial support throughout the course of our

         May all of them live long and enjoy a happy life!
                  BANKS AND SCOPE OF BANKING

       A bank is an institution for the custody, loan or exchange of money for
sanctioning credit, for transferring funds by domestic foreign bills of exchange. It is a
pipeline through which currency moves into and out of circulation.
           As it is clear from the definition of banking, the main activity or function of
banking is borrowing and lending of money with a margin of gain. However, as far as the
present day banking is concerned, there are a number of different banks, set up under
specific different objectives, performing various functions.


       HABIB BANK GROUP is a leader in Pakistan’s services industry. An
extensive network of 1425 domestic branches the largest in Pakistan and 55
international branches to meet customer needs. Perhaps the HABIB BANK
LIMITED establish in 1941 at Bombay. But its history starts in 1841 when a young
boy name Ismail Habib reach Bombay for job. After some time he got the job with a
dealer in utensils and non ferrous metals.Ismail Habib was very keen and intelligent
and became partner of his boss. Later on he was elected as a president of the
market. Many years later he expended his business. He engaged in private banking.
So’ HBL has come a long way from its modest beginnings in Bombay in 25 august,
1941 when it commenced business with a fixed capital of 25000 rupees.

       Impressed by its initial performance, Quaid-e-Azam Muhammad Ali Jinah
asked the bank to move its operation to Karachi after the creation of Pakistan, HBL
establish itself in the Quaid’s city in 1943 and became a symbol of pride and
progress for the people of Pakistan. During the early days of newly born state,
government of Pakistan faces the great problem of fund shortage. This time HBL
again help the governance of Pakistan and came to rescue to provide Pakistan with
assistance of not less than 8 crore.

       Besides this, HABIB BANK has been a pioneer in providing innovative
banking services such as first installation of mainframe computer in Pakistan
followed by ATM and more internet banking facilities in all branches. The main
strength of HBL brand is its great services to all customers especially to the
corporate customers and its prominent head office building that has dominated
Karachi’s skyline for 35 years.
                         Mission statement

     To be recognized as the le ading financial institution of Pakistan and

  a dynamic international bank in the emerging markets, providing our

 customers with a premium set of innovative products and services, and

granting superior value to our stakeholders – shareholders, customers and

                                Values at HBL

 Humility
    We encourage a culture of mutual respect and treat both our team members and
    customers with humility and care.

 Integrity
    For us, integrity means a synergic approach towards abiding our core values.
    United with the force of shared values and integrity, we form a network of a well-
    integrated team.

 Meritocracy
    At every level, from selection to advancement, we have designed a consistent
    system of human resource practices, based on objective criteria throughout all the
    layers of the organization. We are, therefore, able to achieve a specific level of
    performance at every layer of the organization.

 Team Work
    Our team strives to become a cohesive and unified force, to offer you, the
    customer, a level of service beyond your expectations. This force is derived from
    participative and collective endeavors, a common set of goals and a spirit to share
    the glory and the strength to face failures together.

 Culture of Innovation
    we aim to be proactively responsive to new ideas, and to respect and reward the
    agents, leaders and creators of change.


   o HBL Muhafiz Rupee Travellers Cheques
   o HBL Auto Finance
   o HBL Flexi Loans for salaried personnel
   o HBL LifeStyles Financing Scheme
   o HBL i-Card
   o HBL House Financing Loans
   o HBL Easy Access
   o HBL Fast Transfer
   o Haryali Agricultural Loans
   o HBL E-Bank


     o Retail Banking

The Retail Banking network, with 1425 branches, is the core strength of Habib Bank. The
network provides HBL with the largest diversified low cost deposit base of any bank in
Pakistan, and forms the basis for many of our other business lines: corporate and
investment banking and treasury activities. The network provides HBL with the largest
diversified low cost deposit base of any bank in Pakistan, and forms the basis for many of
our other business lines: corporate and investment banking and treasury activities.
     o Commercial Banking

Enterprises operating in the middle market contribute significantly to the economy of a
country. During FY-2000 HBL’s management decided to address this issue. On
November 1, 2000 Commercial Banking came into being.
               The objective of setting-up Commercial Banking was two-fold:
                    First to stop the erosion of market share in the middle market;
                    Second, to regain the lost market share

Commercial Banking is making headway with improvement not only in terms of the
business figures but also in its ambiance. Renovation of is being carried out in order to
give a professional look to all the Commercial Banking Centers.

     o Corporate Banking
The Corporate Banking Group serves large institutional customers who require
sophisticated products in an environment of intense competition. HBL Corporate &
Investment Banking Group is now recognized as a market leader and regularly arranges
and participates in most large structured finance deals.

     o International Operations
HBL has one of the most extensive international networks amongst emerging market
banks. HBL’s ability to operate successfully in diversified markets and cultures is a
function of a long history in international banking – when first international branch was
opened in 1951. The Bank’s branches in financial centers continue to provide efficient
trade settlement and reimbursement services to the entire network and business with other
                              SWOT ANALYSIS


   Goodwill & historical background
   Professional and well trained staff
   Largest customer base
   HBL is Pakistan's largest commercial bank
   HBL has a domestic network of 1,425 branches with an international network of
     48 branches in 26 countries
   20% share of HBL in financial market
   Large Balance sheet size
   Decentralized authority


   Unfavorable union activities and management conflicts
   Checking System is at intra-department level
   Weak marketing policies
   Nepotism & Favorism
   Infected portfolio still exists as bad debts
   Centralized management in particular areas


   Opportunities for growth and expansion in cash management.
   Faster market growth represents opportunity to grow and diversify
   Restoration of investor’s confidence and pick up in private sector investment
   Large deposit base and funds flow can help to avail related market opportunities

   Adverse & unstable government policies
   Political instability
   Advance technology
   Competition from other banks

         A broad view of market is important when management is interested in
introducing better services for customers. Rapid technological change, global
competition and the diversity of buyers preferences in many markets require the
constant attention of the market vouchers to identify promises business
opportunities, see the shifting requirements of the buyers, evaluate changes in
competitors positioning and guide the choice of which buyers to target and classify
them according to respective segments.
Identification of external and macro factors that influence buyers and thus change
the size and composition of market overtime involves initially building customer
profiles. These influences include:
    Political and legal environment
    Economic trends
    Socio cultural environment
    Technological factors

Banks are strongly affected by the political and legal considerations. This
environment is composed of regulatory agencies and government law that influence
and limit various organizations and individuals. Mostly these laws create new
opportunities for business.

Business legislation has following main purposes
    To protect banking companies from unfair competition.
    To protect consumers from unfair business practices adopted by banking
    To protect the interest of the society from unbridled business behavior.
    A banking market requires better consumer market in volume along with
higher borrowing power. The available borrowing power depends on:
    Consumer income
    Saving rates
    Consumption patrons
    Rates of interest
    Budget deficit
    Exchange rates
    Cost of living
    Inflation
       A society is shaped by beliefs, norms and values. People in a society
consciously and unconsciously interact with:
    Themselves
    Others
    Organization
    Society
    Nature
Following are the main factors. Which arise because of change in socio-cultural
    Consciousness about services
    Concern for environment
    Improved customer relation
       Forces of technological advancement have played the most dramatic role in
shaping the lives of people. The rate of change of technology has greatly affected the
rate of growth of economy. New technology is creating deep rooted affects which
could be observed in long run. The improvement techniques involved in on line
banking. In brief PEST analysis affects the overall banking companies and provides
us the information about the external macro condition.

                       PRESIDENT AND CEO


                           HEAD OF IT
                 HEAD OF HR HEAD OF FINANCE

                    SENIOR VICE PRESIDENTS

                        VICE PRESIDENTS


                        GRADE I OFFICERS

                       GRADE II OFFICERS

                       GRADE III OFFICERS

                        CLERICAL STAFF

                      NON-CLERICAL STAFF

                  RGM & EVP

            AVP                   F INC ON

AGM Marketing     Manager HR/Admn.         AGM Operations
     VP                Officer                       AVP

  AVP/RM’s                                 Manager Tarde

                                           Mgr.Cash & Rem

                                              IT In ch arge

                                 O / I T e as u r y- O f fi c e r
                          DEPOSIT DEPARTMENT

Bank deals in money and they are merely mobilizing funds within the economy. They
borrow from one person and lend to another, the difference between the rate of borrowing
lending forms their spread or gross profit. Therefore we can rightly state that deposits are
the blood of the bank which causes the body of an institution to get to work. These
deposits are liability of the bank so from point of view of bank we can refer to them as

                               TYPES OF ACCOUNT:

    1)         CURRENT ACCOUNT:

         In this type of accounts the client is allowed to deposit or withdraw money as and
when he likes. He may, thus, deposits or withdraws money several times in a day if he
likes. There is also no restriction of amount to be deposited or withdrawn. However, there
is requirement of minimum balance maintenance of Rs.5000/-. Usually this type of
account is opened by the businessmen. No profit is paid by the bank and no service
charges are deducted by the bank on current deposits account.

Eligibility: -

    i. All Pakistani’s Resident/Non-Resident, Individuals (Single-Jointly)
         Companies/Firms etc. can open and operate the Account but he should be a
         corporate customer.

    ii. Any Foreign National Individuals (Single-Jointly) having valid Resident Pakistan
         VISA/Work Permit can open and operate the Account
   Requirements for Opening of Account:-

    Duly filled prescribed A/C opening FORM.
    Attested photocopy of N.I.C./Passport of Account Holder(s), Proprietor, Partners,
      Directors and office Bearers as the case may be.
    Certified true copy of the certificate of incorporation or registration (in case of
      limited companies & registered bodies only).
    Certified true copy of the certificate of commencement of business (in case of
      public limited companies only).
    Certified true copy of the memorandum and articles of association (in case of
      limited companies).
    Certified true copy of rules and regulations or By-Laws (in case of association
    Certified true copy of the resolution of the Board of Directors/Managing
      Committee/Governing Body regarding conduct of the account.

    Account can be OPENED with Minimum Balance Rs.1000/- with no maximum
    Checking balance at any time during banking hours.
    No profit is paid.
    Statement of Account dispatched on request letter.
    There is no restriction for withdrawals of amount and number of cheque.
2) Profit and loss sharing savings:

       This type of account is for those persons who want to make small savings'. This
type of account is opened with a minimum deposit of Rs. 1000/- or the amount prescribed
from time to time. The profit is paid on these accounts on the minimum balance during a
month for the whole of that month. Zakat & other taxes are deducted as per rules of the
government. The requirements for this account is duly filled prescribed A/C opening
FORM, Photo Copy of National Identity Card (Resident Pakistani), two Passport size
photographs with Signatures/Thumb Impression (Resident Pakistani), Photo copy of
Passport with Page bearing Resident Visa of the Country where Pakistani Residing, two
Passport size photographs and signatures on A/C Opening Form for Non-Resident
Pakistani with Signatures/Thumb Impression etc.

    Account can be OPENED with Minimum Balance Rs.1000/- or prescribed limit
       that is announced time to time with no maximum limit.
    Profit is payable at monthly subject to adjustment on deceleration of actual profit
       rate declared every half year.
    Profit is calculated on monthly products
    Zakat will be deducted on valuation dates of account.
    Profit is Paid/Credited in Account on half yearly basis in case of six monthly PLS
       saving accounts.
    Statement of Account dispatched on half yearly basis after posting of profit.
    There is no restriction for withdrawals of amount and numbers of cheque.
   3) PLS special notice deposit:

       Special notice deposit is paid on daily product bases. Under this deposit scheme, a
deposit is received from the depositor under the condition that he will intimate the bank
before a certain period in case of withdrawals. There are two types of special notice
deposit, they are 7 days and 30 days notice deposits. The profit is paid on these deposits
but it is nearly equivalent to saving account rate that is paid on special notes.

4) PLS term deposit:

        A type of term deposit,in which a receipt is issued for varying tenors ranging of
deposit. It is in the form of receipts and profit on these receipts is paid biannually. These
receipts are encashable after expiry of the period for which they were issued. Different
profit rates are applied to different type of term deposit. It has no maximum limit but not
less than 1 month. Account opening rate is 1000 and the zakat is deducted on the rules
and regulation.


    All Pakistani’s Resident/Non-Resident individuals, Firms/Companies, Govt/Semi
       Govt. Departments can purchase the TD.
    Any Foreign National having valid Resident Pakistan VISA can purchase TD.

Requirements for Purchase of TD:-

        Duly filled prescribed FORM.
        Photo Copy of National Identity Card (Resident Pakistani).
        Two Passport size photographs with Signatures/Thumb Impression (Resident
        Photo copy of Passport with Page bearing Resident Visa of the Country where
           Pakistani Residing
        Two Passport size photographs and signatures on A/C Opening Form for Non-
           Resident Pakistani with Signatures/Thumb Impression.
        Photo Copy of Passport with Page bearing Resident Visa of Pakistan (Foreign


    TD can be purchased with minimum of Rs.1000/- with no maximum limit.
    Profit is payable at yearly rate declared every half year.
    Profit is Paid/Credited in Account on half yearly basis.
    The holder of term deposit receipt must keep the receipt under lock any loss of
       receipt must inform the bank because without it the bank will not pay the amount.

   4) PLS khas term deposit:

       Pls khas term deposits are acceptable for a period ranging from one and half year
to five years in multiple of six months. In this regard the profit is declared from time to
time but will be paid only once at the time of encashment of receipt of maturity. Zakat
will be deducted only once at the time of maturity or before maturity.

               Account opening in special cases:

Blind person account:

       A blind person can easily open an account in the bank like other persons but it is
preferred that he should open a joint account with a normal person. If he wants to open
the account individually, there should be an authorized person with him who checked the
signature and the amount filled by blind person. The banker can not fill the amount and
check the signature. The one thing that is provided extra by the blind person is two
photographs duly attested by an authorized person.
Non resident person account:
   Non resident persons are those who do not live in Pakistan permanently. According to
the tax authority the non resident persons are those who live in Pakistan:

    In case of foreigner not more than 180 days.
    In case of Pakistani not more than 90 days etc.
    In proceeding 4 years not more than 365 days.

All things will remain same, only one thing that is passport copy of the person will have
to provide to the bank. The logic behind this is that the bank insures the entry and the exit
date of the person in Pakistan. The person has to inform bank 15 days before entering in
Pakistan and the bank also send this information to State Bank of Pakistan. After getting
this information State Bank give instructions to bank about handling of not resident
person’s account.

Zakat treatment on all accounts:
       Zakat will be deducted on all accounts except the followings:
    Fiqah Gafreia account.
    Non Muslim’s account.
    Trust account.
    Government account.
    Provident fund.
    Defense account.
    Non Pakistani’s account.

 Society for worldwide inter bank financial telecommunication.[SWIFT]
 Only for banks
 Telecommunication not transition
 Head office in Belgium
 Run by different country members
 Lease lining by head office
 Start in pak 1995-96
 Awareness seminars start in 1997
 Work through coding &decoding
 Swift provide to members an id &password for connect
 Charges from customers depend on message size
 Min changes is 120
 Changes for one LC is 1400
 Code not more than three degits (ID and Passward code)
 Authentic mode, people satisfied
 Less chances of fraud
 Work as E Mail
 Version 2 relate to bank to bank information
 Version 4 relate to bank to bank Document
 Version 7 relate to bank to bank LC
 In HBL use in domestic        ---------- 70 branches
 In overseas branches          ---------- 21
 Centralized system( send message to different countries at once)


Demand draft is a written order drawn by a branch of a bank upon the branch of same or
any other bank to pay certain sum of money to or to the order of specified person. It can
be issued to the customers as well as non customer against cash cheque and letter of
instruction. Demand draft is negotiable instruments that can be negotiating at any time
before its cancellation. Its Legal provisions are same as that of cheque.

Following parties are involved in demand draft:

                Applicant

                issuing branch

                drawee branch

                Beneficiary

       A demand draft may be issued against the written request of the customer before
issuing it must be seen that the demand draft is in order.

       The DD application must be scrutinized by the counter clerk in respect of
following points.

            There should be branch where payment is to be made.

            Full name of payer should be mentioned.

            Amount in words and figures must be same
           Application should be signed by the applicant on two places.

   Telegraphic transfer means the transfer of funds from one branch to another branch of
   the same bank or upon other bank under special arrangements just like a telegram.
   Telegraphic transfer is not negotiable and the funds are not payable to bearer. Minor
   cannot avail this facility. In telegraphic transfer the bankers use secret codes. One
   code is with issuing person and the second is with an other person. When they
   combine the codes it’s become an amount that is called check. The payment is made
   after the confirmation of the check.

   Following parties are involved in TT

          Applicant

          Drawing branch

          Drawee branch

          Beneficiary

Following important things should be included in TT:

    Full name of the beneficiary or account number should be mentioned in the
       application form.

    Instruction regarding mode of payment should be obtained.

    A record in the remittance outward register should be maintained.

    All the remittance must be controlled through number or codes.


   Pay order is an instrument through which payment can be made from one bank to
    another bank. Pay order is meant for bank own payment but in practice they are also
    issued to customers.

        Following parties are involved in pay order:

             applicant

             issuing branch

             payee


Mail transfer is not negotiable and the procedure of it is same with the procedure of
DD.When a customer request the bank to transfer his money from this bank to any other
bank of the branch of same bank in the city, outside the city of outside the country the
first thing he has to do is to fill an application form. In which he states that I want to
transfer the money from this bank to that specific bank by mail. If the customer is the
account holder of this bank, the bank will debit his account and the concerned officer will
fill forms to make the mail transfer complete.
        If the customer is not the account holder of the bank, then firstly he has to deposit
the money and then rest of the procedure will be adopted to transfer his money.
                       Imports and exports department:


Introduction and registration:

   Imports and exports act 1950 have empowered the federal Govt to control the import
and export in Pakistan. Pakistan is developing country and like other developing
countries its imports exceeds than exports. To control this situation the registration of
import and export has been made obligatory under the registration order 1993. The
authority of registration has been given to export promotion bureau. No importer and
exporter who has no granted registration shall indent, import and export of any good into
or out of Pakistan. The requirements for getting registration are as under:

    Application form.
    Photo copy of I.D card.
    Copy of memorandum and article of association (in case of limited company).
    Ownership deed of office.
    Fee payment.
    Certificate of incorporation.
    Applicant should regular tax payer.

The major exports from Pakistan are surgical goods, sports goods hand noted goods,
leather goods, textile goods, etc.

Export procedure:
       All the exports work under the imports and exports act that is changed by the state
in every year.
When the importer send the L.C to bank in respect to import or when the L.C comes to
the advising bank from the issuing bank then the concerned officer allot the number to
the L.C and get registered. The concerned officer write down the name of issuing bank
and the party name in a register and intimate the party about L.C. the exporter after
receiving the L.C from bank will prepare the documents as per the L.C usually the
following documents have to be prepared by the exporter:
    Bill of lading
    Covering letter
    E- Form
    Bill of exchange
    Packing list
    Commercial invoice
    Quota documents in case of quota country
    Certificate of origin
    Special custom invoice
The export form (E-FORM):
E-FORM means “export form” which is the first and foremost requirement for the
exports from Pakistan. It is control instrument by Govt of Pakistan by which it monitors
the receipts from exports and checks the goods that are transferred without foreign
exchange. all banks which are engaged with the foreign exchange are required to print
and maintained the E form that is checked by the state bank of Pakistan. For export an e
form is issued by the bank on the request letter of a company. Two separate registers are
maintained by the bank one for his use and the other one are for the requirement of the
SBP. On issuance of E forms the banker lists it in the register and makes sign from the
exporters. Banks record the name of party, amount, the goods description, port of
destination, importer name port of loading etc.

The functional utility of E-FORM:

The export form has four copies. That is used by the exporters and banks. Without it the
exporter can not make export. These copies are used as:

    Original copy is for SBP that is checked by the higher authority.
    Duplicate copy is for the bank use that is upraised by the custom authorities.
    Triplicate for the use to report of SBP at the time of payment received.
    Quartiplacte is for the company used.

Usage of E – FORM:

       E- FORM is an important document for export. It has its own importance such as
this form is used as a checker means it monitor that what things are going abroad and in
return what things we are getting. So it creates a check and balance on the foreign
exchange. It shows the total quantity and quality of the goods that is sending to another
country. An E –Form shoe the party worth that is very helpful for the party and the bank.
Bank can create a party limit for the credit on the behalf of it and a party can arrange a
loan for its future requirements from the bank. It shows the terms of payment by the
importer and the delivery terms by the both parties that is helpful in case of any
discrepancy during the contact.

Short shipment notice:
A shipment may be cancelled by the importer or exporter due to many reasons. The
cancellation of the export letter is called short shipment notice. In this situation the
company has to inform the bank. Company has to give a written letter to the bank that he
is not making the export so please cancelled their e form. On the other hand bank at the
time of receiving the letter will stop the e form and cancelled the all documents.

Imports regulation:

       Import is being regulated by the ministry of commerce and the government of
Pakistan under the import and export act.

Categories of imports:

Imports are classified into the following categories:
    Commercial sector imports
    Industrial sector imports
    Public sector imports

   Registration of importers:

   A person who wants to approach the bank for importing goods from abroad, he
   should have to get himself registered with the export promotion bureau under
   registration of imports and exports act. He must fulfill the following conditions before
   getting himself registered:


   Documentary letter of credit:
       A documentary letter of credit is an instrument or document issued by the bank on
   the behalf of a customer, authorizing a beneficiary to draw a draft and drafts or
   sometimes the requirement of a draft which will be honored on presentation by the
   bank if drawn accordance with the te3rm and condition specified in the letter of
        It is the written undertaking by the bank (issuing bank) pay to the seller
   (beneficiary) at the request or as per the instruction given by the opener (applicant)
   pay at sight or at the future date, a stated sum of money against the required
   documents. The documents include the commercial invoice, certificate of origin,
   insurance policy or certificate and the documents of transport relating to the mode
   sending goods. L/C is therefore is an arrangement of security for the parties. The
   conditional guarantee is related to the documents only and not on the underlying
   goods or services.

                        Establishment of letter of credit:

   The person applying for the letter of credit must be registered with the EPB. The
opening bank verifies this registration or otherwise exemption. This is mentioned in the
“I” form. The importer also shows the valid certificate of an organization membership. A
category pass book is issued by the EPB for registered importer specifying his category.
This book is centralized by the centralized banks in the city. It is not necessary for the
bank to hold the original copy of the pass book of all the importers. But some times the
importer gets L.C from more than one bank so the bank have to hold the photo copy of
this pass book. The applicant can get the application from any branch of the Habib Bank
Limited. However only some branches are authorized to open L.C. That branches how
are not authorized have to contact with the authorized branches to open an L.C. The
authorized branches in such case require the certificate from the applicant branch that the
required formalities are fulfilled and the approval was obtained with required margin.

   For establishment of letter of credit, the importer requests the opening bank with the
   following documents:
1) Application and agreement form IB-8:

   Credit application form is an agreement between the bank and the customer on the
basis of which the letter of credit is opened. This form contains the undertaking that
the importer will get the documents from the bank at the mark up price. It contains
the following information:

    Name and address of importer.
    Name and address of exporter.
    Amount in foreign currency.
    Terms of credit.
    Description of goods.
    Origin of goods.
    Port of loading and discharge.
    Last date of shipment.
    Foreign bank charges.
    Terms of shipment. (Partial shipment or transshipment)
    Insurance cover note, policy no, and name of insurance company.
    Forward booking.
    Mode of transmission.
    Import registration no.
    Any other documents required.
    Detailed documents.
   2) Performa invoice/ purchase order:

       A Performa invoice is quotation of seller containing the description and the
   specification of the goods, price, and terms of the sale. Some times the exporter has
   their agent in the country. The agent must be registered from the EPB.

   3)Insurance cover note:

    All the goods imported under the documentary credit must always be insured. In
   accordance with our country import policy, insured must be issued by a Pakistani
   insurance company or the foreign company operating in Pakistan and such company
   must be approved by the bank. Insurance covered based on the following:

            It is issued in the name of issuing bank A/C importer.
            The rider should cover against war.
            The port of shipment and the port of destination.
            Amount of premium prepaid.
            Shipment period.
            The description of goods should be the same as per the form.

4) Appendix B:

       This Performa replaces the import license and is submitted along with L.C
application form duly filled in triplicate. It is conditional undertaking that the imports
goods are not banned, not smuggled. It is also an undertaking that if the bank is unable to
arrange the said currency the importer have to purchase it from other banks or from any
other place. It includes the details and description of goods, codes, class, type, source of
import, country of import, Performa invoice no etc.
5) “I” FORM:
   This form is used at the time of retirement of documents against L.C established
earlier for reporting to the transaction to SBP through the bill of entry deptt. It has four
copies that is used as follows:

        Original is for the use of SBP.
        Duplicate for the authorized dealer to be used for processing exchange
        Triplicate for the authorized dealer record.
        Quartiplacte is for the submission in SBP in the case of import where the
           documents are not retired.

   Approval for establishment of letter of credit:
       After scrutiny of the documents, IB-8 along with attached documents is put before
   the corporate head for approval. If the amount of application exceeds the power of the
   corporate head the branch concerned prepared the memorandum for the corporate
   banking head for obtaining his approval.
   In case party enjoying regular limit, the L.C is established without adopting the
   procedure mentioned above. However the amount of L.C should not exceed the
   regular limit.

                               Types of letter of credit:

   1) Revocable credit:
       The letter of credit that can be cancel with the consent of importer, without giving
   any prior information to the exporter.

   2) Irrevocable letter of credit:
   The letter of credit that can be cancelled by the mutual consent of the both parties.
Only one party can not cancel it.
    3) Irrevocable confirmed letter of credit:
        When an issuing bank authorizes and or request to an other bank to confirm his
    irrevocable credit and adds its confirmation. Such confirmation constitutes a definite
    undertaking of such bank in addition to that of the issuing bank. There are following
    other letter of credits:

        1. Revolving Credit
        2. Transferable Credit
        3. Back to Back Credit
        4. Green Clause Credit
        5. Red Clause Credit
        6. Clean Documentary Credit
        7. Transit Credit
        8. Stand by Credit
        9. Sight Credit

                               Parties to a credit:

The applicant:
        The applicant of the letter of credit is called the importer or buyer. The buyer
requests to the bank to open a documentary letter of credit in favor of the seller.

Opening bank (issuing bank or importer bank):
At the request of the importer an issuing bank issues a credit under the instructions in the
favor of the seller.

Advising bank:
        An advising bank is a bank in the seller’s country. The issuing bank forwards the
advice of the credit by mail or by any mode to the correspondent bank in the exporter
country as instructions of the opener.
Beneficiary (exporter):
       The person or body receiving the letter of credit from the importer that is opened
in favor of him.

Confirming bank:
       The bank that on the requests of the issuing bank adds confirmation to a credit. It
is definite undertaking of the confirming bank, in addition to the issuing bank.

Negotiating bank:
       It May or may not be the advising bank. An authorized bank that gives the value
to the draft for processing and payment.

Reimbursing bank:
       Reimbursing bank is the bank, which on the behalf of the opening bank, honors
the Reimbursing claim lodged by the negotiating bank.

                              Modes of payment:

   Sight letter of credit:
       The seller submit all the documents with draft in the importer country
   Complying with the all terms and conditions. The payments are made on the presence
   of the documents.

   Usance letter of credit:
       Under these circumstances it is agreed that the payment will be made after a
   specified period. So the payment is made after or on the expiry of that date.
              Risks for importer and exporter:

   Importer’s risks:

    He does not know the seller.
    He does not know that goods will be delivered in time.
    He does not know how to check the goods.

   Exporter’s risks:

    He does not know the buyer.
    He does not know the credit worthiness of the buyer.
    He does not wait for payment.
    He does not wait for exchange control.

                       Buyers and sellers obligations:

The seller’s obligations:
    Provision of goods as per contract.
    License authorization and formalities.
    Contract of carriage and insurance.
    Delivery at time.
    Transfer of risk.
    Division of cost.
    Notice to buyer.
    Proof of delivery.
    Good checking marking and packing.
    Other obligations.
Buyer’s obligations:

       Payment of price.
       License authorization and formalities.
       Contract of carriage and insurance.
       Taking Delivery at time.
       Transfer of risk.
       Division of cost.
       Notice to seller.
       Proof of delivery.
       Inspection of goods.

          Possible problems in international trade:

       Non payment.
       Delay in delivery.
       Financing, how and against what.
       Currency restrictions.
       Regulatory restrictions.
       Documentation and mode of settlement.
       ICC rules and INCO terms.


Right Now the responsibilities assigned to HR department at Corporate Center can be
categorized under three heads:
       Staff matters / Basic HR Functions
       Expenses control
       Security matters
Now I’ll discuss these one by one.


The banking council of Pakistan was responsible for the recruitment, selection and
allocation of human resources. After the dissolution of the Pakistan Banking Council, the
Banking & Financial Services Commission of Pakistan is responsible for these activities.


Staff requirements are met according to the changing needs of macro environment
scenario and particularly the arising needs of the bank itself. A need analysis is
conducted. After assessing the human resources requirements and screening of the
applications, most probably, the suspects are invited for a written test.
Short listed candidates are called for an interview for personality and social appraisal.
Interviews are a mix of direct and indirect interviewing techniques andd information
The selected candidates are sent for training of six months training from MDI’s.
The training is through the lectures regarding banking procedural guidelines and other
behavioral aspects. After the completion of training employees are allocated to different

The effective management of people in an oganization requires an understanding of
motivation, job design, reward systems, and group influence.

      Recruiting
      Retention
      Succession planning
      Risk Management
      Diversity in our workforce
      Management information
      Progressive compensation and benefits design and implementation
      Employee communications and relations
      Training needs analysis, program design and implementation
      Performance evaluation
      Work-life initiatives

The responsibility of providing administrative support for the lending activities of the
Bank, and day-to-day monitoring of credit-exposure, is vested in the Credit
Administration Department (CAD).


The main responsibilities under this department are:
    Implementation of credit facility and their maintenance according to terms of
      credit approved.
    Ensure that standard loan documentation for each credit facility is maintained and
      the correctness & completeness of such documentation and also responsible for
      custody of all credit files.
    Maintain the safe custody of all collateral as per bank’s standard operating
      procedures; undertake periodic evaluation and inspection of hypothecated/
      pledged inventories in accordance with the terms of credit.
    Ensure compliance with
          o Institutional credit policies & procedures
          o Local regulatory requirements.
    Prepare various portfolio composition reports and other documentation for
      submission to GRM’s & RM’s.

        Upon approval of credit proposal, the credit proposal and approval are handed
over to CAD. Now CAD determines the nature of documentation required and on receipt
of same ensures that all legal documents are obtained and are legally enforceable. After
all these activities it can release the facility for utilization.
                     MARKETING DEPARTMENT
The marketing department in HABIB BANK LIMITED is very strong. It is the
main source of gaining and maintains the customers that can give a large profit to
the bank. There are five relationship managers in Habib bank and every person is
responsible for the credit of his party.

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

      The organization that have minimum 250 million sales in a year.
      The organization that have availed 80 million finance
      Agri based industry.
      HBL do not deal with the agriculture sector.

       It is the responsibility of the relationship manager to provide or fulfill the
   requirement of the customer by checking his financial and position. The
   procedure of credit approval starts with the credit proposal. First of all the
   customer request to the bank for credit and on the behalf of him the RM check
   the memorandum. The
   Memorandum includes:

          The company information.
          Purpose of credit.
          Assessment of management.
          Risks.
          Financial analysis.
          Third party or other bank information.
          Conclusion and recommendations.

Then the RM sends it to the authorities who accept or reject the proposal. If they
accept the proposal they announced a credit range for the party. At the end RM
sends the proposal to CAD deptt custody and check.
Relationship manager is authorized to provide the excess facility to the customer
than the credit line. It may be up to

10 percent of excess amount


12.5 million Whichever is less?

It is not more than 15 days if the customer wants to increase this facility he has to
contact with the head office.

   1) fund based:
      It is first type of credit facility. In this facility the bank actually provides
      fund to customers.
   2) non fund base:
      Second type of credit facility that does not provides fun but only give the
      guarantee. If the customer is unable to make the payment at maturity date
      then bank will be responsible to make the payment.
                      Work done by me in HBL


       In this account department I gain the particle knowledge about opening. This
department deals with opening account and saving account for its customer and all
matters regarding there off. The customer opening account/saving accounts can be
categorized as following:
               1) individual
               2) firm
               3) company
               4) trust
               5) staff
               6) others


       In order to open an account first of all the customer has to fill a form prescribed
by the bank. The person is required to bring some reference or introduction for opening
the account. Introducer may be a person who has an account with HBL.

       Some important information regarding introducer e.g. the name and account
number of the introducer is written on the space provided on the specimen signature
cards. Then in order to find out whether he is a true introducer or not a letter is sent to
him thanking him for this introduction, so that any thing wrong may come into notice.

       There are different requirement for different types of accounts and account
holders. An important thing is that the customer should have a corporate customer. The
corporate customer limit is 40 million and this branch always deals the corporate
General rules for opening an account:

    One person can open only one account in the same branch with the same

    In the event of death of an account holder the credit balance will be transfer to the
       heirs of the diseased individual account.
    Services charges will be deducted periodically as prescribed from time to time on
       the accounts that are under the limit of specific account.
    Services charges are not applicable on that accounts that are prescribed as
    A distinctive number will be allotted to the each account.
    The bank can close those accounts that are under the minimum limit of the bank.
    Any sum to be deposited in the account should be accompanied by paying in slip
       showing the party account number and the name.
    Account holder can only withdraw the sum of money by his own account by
    Cheque should be signed by the account holder by the specimen given by the
    Post dated and defective cheque is not accepted.
    If statement of account spoiled a new will be issued on cost.
    Any change in the address should immediately communicate to the bank.
    The account holder wishing to close the account must surrender the cheque book.
    Account may be transfer from one branch to another same branch without any
       charges etc.
                           DEPOSIT DEPARTMENT
                             “Deposit are the blood of a Bank”
           I worked in this deptt for one week and learned that the acceptance of deposit is
the real source of income of a bank. Deposit Department is the backbone of commercial
Deposit is often used to describe the money which customers of all kinds leave with the
bank. Deposit account can be defined as an account, which is opened to earn interest.
The term deposit is highly misleading. It is not something deposited for safe deposit box.
Bank deposit is not like that; when one brings currency to the bank for deposit the bank
does not put the currency in the vault. It may put small fraction of the currency in the
vault as Reserve but it will lend most of deposits to someone else.
The entire banking system is based upon borrowing. Like all banks, deposit department
has acknowledged its worth as the most important. Almost all the operations generated
from the deposit department and with due course of time reflect back to the deposit
department. In order to attract funds bank has introduced various types of deposit
schemes that may suit the need and tastes of a large number of depositors.


Deposits are broadly classified into the following three categories:
    i)           Demand deposits
    ii)          Saving deposits
    iii)         Time deposits

           The procedure undertaken upon receiving deposits from the customer is as
1) Examining the deposit slip to ensure that the name and the account numbers are
   clearly indicated.
2) Counting the cash/cheque and agree the total with the amount on the deposit slip.
3) After that the pay-in-slip is validated for cash transaction/ transfer/ clearing transfer
   as appropriate before the counterfoil a handed over the customer.
4) Cheque assigned by the director, partners, employees of a company, drawn in favor of
    themselves and credited in their account in the bank are to be scrutinized

       An amount can be withdrawn by the cheque. The withdrawals can be made only
at branch where the account is maintained. All cash withdrawals will be made under
account holder’s full signature. One or two bank officers have to verify the signature.
       In current account the bank does not offer any interest. We can deposit and
withdraw any amount during the banking hours.


       The account holder requests for a new cheque book by presenting the requisition
slip along with the authority letter to the concerned officer. His signature was verified
before giving him the new cheque book. One or two bank officers have to verify the

                    REMITTANCES DEPARTMENT:

       I work in this department for one week; this department deals in transfer of money
from one place to another or country by:
       1) Demand draft
       2) Mail transfer
       3) Telegraphic transfer
In this department internees are advised to observe the working of transfer of money from
one place to another place or country by the above mode of transferring money. During
my stay in this department I observed that how demands draft be issued.
The procedure is as follows:
        First a bank receives a request from the customer to issue a bank draft. The
written request is either in a banks standard from or separate paper signed by the
applicant with cash or cheque covering the amount of the draft and other charges of the
        While issuing a bank draft it is necessary that they should be free from
alternations. All the details must be written clearly in ink. After issuing a demand draft it
is handed over to the applicant and it advice containing the particulars of the draft is sent
to drawer branch with it is necessary information and payment of the draft is made on its
presentation or according to the terms and condition of the mode of transfer.

Some suggestions are found in order to maintain
the steady growth and for the security of
environment which are as follows:-

   Customer Service Improvement.

   Environment should be improved by creating
    tangibility as service kind of businesses need
    tangible environment.

   Short Term Finances.

   Marketing tools to be used for introduction and
    advertisement of their products.

   Awareness programmes for the customers for
    enhanced features provided by the bank to the
    customers e.g. EFT, Internet Banking and PC
    Banking and also ATM Operation.

   As recently Bank is become Private they must
    take advantage of their Legend Leadership.

   There is a need of Employees Training &
 As Habib Bank is skipping to a new Automated
  System, Highly skilled work force and award
  employees are required to run that system
  whereas the present employees are not eligible
  to run the system as most of the employees of
  the bank are simply graduate or undergraduate.

 Working environment of branches is not

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