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Internship Report on American Express Bank

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					Internship Report on American Express Bank




CHAPTER NUMBER 1

INTRODUCTION OF THE REPORT:

Background of study

American Express Bank Ltd.
A partner you trust, worldwide
The topic of my study is AMERICAN EXPRESS BANK, which is a part of American Express
Company. That is a diversified worldwide travel, financial and network Services Company
founded in 1850.

It is a world leader in:

Ø Charge and credit cards
Ø Travelers’ cheques
Ø Financial planning
Ø Business services
Ø Insurance and international banking

American Express Bank was incorporated in the United States of America. In Pakistan it has
commenced its operations in 1948 and is currently being conducted in Pakistan through branches
in Karachi, Lahore and Islamabad. It is engaged in banking business permitted under the banking
companies’ ordinance, 1962.

The financial statements of American express bank are prepared in accordance with the
requirements of the state bank of Pakistan, which are specified in the companies’ ordinance;
1962.Audit is also conducting in accordance with the international standards of auditing as
applicable in Pakistan. Proper books of account have been kept by American express bank
limited, Pakistan branches as required by the companies ordinance 1984.

The balance sheet and profit and loss account together with notes thereon have been drawn up in
conformity with the companies’ ordinance 1962 and the companies’ ordinance 1984, and are in
agreement with the books of account and with further in accordance with accounting policies
consistently.

Then there are two types of users of financial statements, internal and external. Internal users are
the people who control and direct the business for the purpose of securing profits and
maintaining a sound financial condition. While external users are govt bodies and other agencies.
Zakat deductible at source under the Zakat and Ushar ordinance 1980 is deducted by the
branches and deposited in the central Zakat funds.
American express established global network services in 1997 to form strategic alliance with
banks and financial services institutions around the world to issue cards on American express’
global merchant network.

GNS has built over 70 partnership arrangements in more than 70 countries.
American Express has been a major participant in the global foreign exchange and money
markets for over 100 years.

American Express has along history of being good citizen in the communities in which it works.
It believes that a company should contribute to the large society in which it operates and should
enhance climate in which it does business.

One manifestation of the company’s concern for good citizenship is the philanthropic
contributions it makes around the world, some of which are highlighted on the pages of this
report. Healthy communities are important to the well being of society and the overall economy.
They also provide an environment that helps companies such as American Express to grow,
innovate and attract outstanding talent.

I choose American Express bank for my internship because it is a foreign bank and performs an
important role in international banking. I hope to learn more about banking sector during my
training period. And I really learned much about operations of this international bank, the
problems, which they have to face while working in Pakistan and the opportunities, they have to
grow here. The detail of working of different departments is given on next pages of this report.
PURPOSE OF STUDY

The purpose of my study is first of all to gain knowledge about banking sector. I want to know
basically that what is the difference in the operations of a foreign bank and public bank. What are
strengths and benefits available to an international bank and are the problems they have to face
while working in Pakistan. And more over I also observe their hierarchal structure and their
management polices. As during my internship I most of the time work in marketing department
of American express bank, so the purpose of my study is to observe their marketing procedures
and dealing with clients and in this regard, I note their strengths and weaknesses.

SCOPE OF WORK

The main focus of my work as I mentioned above is on marketing section of American Express
bank. Here I learn how to deal with client, how to satisfy his queries, how to convince him that
he becomes willing to establish a long lasting relationship with bank.

Moreover I also did Telebanking here; the bank gave me an assignment to convince the clients
whose balance in their accounts is less than requirement. So I made phone calls to them and
learned, how to talk with unsatisfied clients, and tried to answer their queries to satisfy them.
Then the bank gave me target of opening new accounts within a short period of time, I also
achieved my target within that time. So I also got the opportunity during my internship to apply
and improve my marketing skills.
METHODOLOGY OF RESEARCH

In order to collect data and information about operations of bank, I adopted following methods:

Ø Made interviews of related persons. Basically I gathered all the information by using this
technique. I went to each department and tried to interview the employees working over there.

Ø Through written material, I tried to get any available written material about different
departments of bank, and then I made my notes from them.

Ø Through personal observation, as my internship is basically in marketing department so I used
my personal observation and leaning abilities to improve my marketing skills, and to find what
their weaknesses, what are the opportunities which they can avail.

DIFFICULTIES FACES IN GETTING DATA

The bank that I choose is an international bank, which is engaged in much diverse type of
business around the world. Since the internship of students in all over the working organizations
is not much supported by the staff working over there, because it causes unnecessary hindrance
and disturbance in their work.

The very first and most important difficulty, which I faced, was the unavailability of any written
form of data. This bank had no formal job description, analysis support sheets or if the had any,
they were not interested in giving it to internees. The staff over there especially the one dealing
directly with clients are all the time so busy even after the lunch break (due to evening banking)
that they find hardly any time to train or guide he interns, who are inexperienced and unless they
are fully briefed they can not help the staff in their work.

I also want to do work in corporate sector of the organization, but to the reason that it is closing
down, I did not get opportunity to work over there.

But the most serious problem that I face is the” problem of rotation” as at my first day I had been
assigned to wok in marketing department without asking my area of interest and then during my
whole internship period I was forced to work over there, I requested for rotation from time to
time but no one paid attention. So I missed the opportunity to see work of all other departments.
Moreover the staff of my department did not allow me to go to other departments for briefing, so
I got information about other units with great difficulty.

CHAPTER NUMBER 2
INTRODUCTION OF AMERICAN EXPRESS

HISTORY OF AMERICAN EXPRESS COMPANY

In 1850, when American Express Company was founded, the United States was not yet 75 years
old and had a population of 23.1 million people.
American Express Company was founded on March 18, 1850 at the mansion house in Buffalo,
New York. The three men who established it were

• HENRY WELLS
• WILLIAM G.FARGO
• JOHN BUTTERFIELD

These three were not newcomers to the express business. Each was engaged in its own express
enterprise, and all three of those firms were competing for business along routes that were based
in and around the state of New York.

Establishment as Travelers Company

As the railroads grew the three men could see the opening of the frontier and the demand for
express services that westward movement was creating. They were not just at the right place at
the right time; they were shrewd businessmen who could back up their ambitions with the capital
necessary to achieve some degree of scale in the express business.

The myths and legends that grew up around that business and which have since become a part of
popular culture through movies and television were considerably more romantic than its reality.
An express man’s work was hard labor; long hours and tedious travel over what were often
rough or nonexistent roads.

In he public minds, express men were heroes of almost mythic proportions. That myth was
grounded in reality and people fueled it in two ways saw in their day-to-day interactions with
express men and through the popular media of the day.

Express men’s work was dangerous and sometimes violent. There were instances when they
were injured or killed. Some even died in sinking ships. Express men were people who had seen
and survived: “violence” and death, Indian raids, stage robberies, financial panic, buzzards in the
mountain passes, building heat and thirst on the desert, train robberies. As with the railroads, the
growth of illustrated periodicals like Gleason’s pictorial drawing-room companion, Vanity Fair
and Frank Leslie’s illustrated newspapers played a vital role in knitting together the cultures of
growing cities and rural towns. The magazines not only exposed people to news and trends so
generating a demand for consumer goods of all kinds.

In the 1850s, most travel was still done on horseback, in carriages or wagons or by train or
steamship. A transcontinental railroad system was not yet in place across the United States.
Therefore, travel by train often had to be supplemented with travel by ship, coach or horse to
reach one’s ultimate destination. Postage rates for correspondence were relatively more
expensive for the times and if you include cash or valuables in your letters, they were usually
stolen. The express company handles anything larger than letters and the railroads carried bulk
freight. There were no parcel post service in the United States at the time and it was unthinkable
that they might ever by the kind of express companies that developed later, such as Airborne
express DHL or Federal Express.
The express business transporting financial papers, small parcels and packages from one town to
another had become a well-established and profitable line of work for many people during the
1840s. Competition was more than healthy: it was cutthroat. Propelled by the growth of a vast
network of railroads that began to crisscross the United States, the country began to realize its
manifest destiny the movement of its population “from Sea to shining Sea”.

As more and more people headed across the frontier, the railroads firmly tied the Midwest
economies to the east, rather than to the south (as had been the case previously when most traffic
was shipped via the river system).

European goods were imported to New York and then shipped to west via the railroads. The
express company fought bitterly for the valuable exclusive contracts that the railroads granted to
one express company or another to use their line, as people’s relatives and friends move
westward, the traffic of goods increase as well.

In 1849 alone approximately 75,000 adventures made what one historian called” the unspeakable
hard journey from the eastern United States to California to search for gold and to create a life
for themselves and their families. America was increasingly being loose to confederation of
towns, states and regions. The vast railroad network helped bring together for the first time
economies and cultures of different parts of the country.

As an indication of the explosive growth of the railroads, 90,000 miles of railroad track had been
laid by 1850 and figure tripled by the end of the decade. The railroads were an integral part of
the fabric of the United States, serving as more than just a mean of transporting people and goods
through out the country: they were helping join together a vast and diverse land in to a unified
society.

ESTABLISHEMENT OF AMERICAN EXPRESS BANK
In 1860’s American express company made its services available to the U.S govt during the civil
war by transporting vital supplies, including presidential election ballots to army depots.

American express company’s messengers even ventured on to battlefield to deliver packages and
letters to soldiers. And to accept packages and mail for delivery to dying soldiers families. The
express companies also were called upon occasionally to perform the somber task of delivering
the bodies of soldiers to their families.

American express company started its banking operations in 1914.American express company
promised to pay endangered fierce customer loyalty, and the brand attributes of safety and
integrity had been reinforced with customers in dramatic and very personal ways.

American express enjoys a strong brand, loyal customer base and well-established operating
presence in many parts of the world. And the opportunities for developing the company’s
international payments business are immense. Business activities were intensified and expanded
across 25 key geographic markets after establishment of bank.
ESTABLISHMENT OF AMERICAN EXPRES BANK IN PAKISTAN

In Pakistan it was established in 1949, first of all in Karachi. The head office of Amex is in
Karachi at shaheen commercial complex.
In Pakistan it has three more branches now and running a successful business through these
branches in all over the country. Following are the branches of Amex.

Ø CLIFTON branch Karachi
Ø BLUE AREA branch Islamabad
Ø MALL BRANCH Lahore

I did my internship in mall branch Lahore, so my report covers all of its main departments and
their operations. As the mode of banking direction of Amex is changing all over the world, in
early times of its establishment it mainly operated only in corporate section but now chief
executive of Amex has realized the importance of consumer banking and he is trying to
introduce Amex with the new image of consumer bank instead of corporate one.

In the whole world where ever the branches of Amex corporate section are is closing down and
new products regarding promotion of consumer banking are trying to be developed. So in Lahore
branch I got the opportunity to work in the retail departments.

I spent most of the time of my internship in personal banking department and also tried to learn
about the work of other retail departments by interviewing the employees working over there or
by gathering written material about that department. The details of working of different
operations units are given on next pages of this report.

OBSERVATION OF SANCTIONS IMPLEMENTED BY UNITED STATES

Whenever a new relationship is going to be established with Amex, the employees of it must
have to observe the united state sanctions. That is to check that the new client, whether it is
commercial or individual, does not come under the restricted area. To check that he is not the
resident of restricted countries or he is not doing business, or has trade relations with these
countries. Whether bank is issuing the letter of credit or opening an account or granting loan, all
these sanctions must be observed. Otherwise violation of these sanctions can result in
imprisonment and fine.

COUNTRIES UNDER SANCTIONS

Following are the countries, which came under the sanctions.

Ø Cuba
Ø Iran
Ø Iraq
Ø Libya
Ø Myanmar (Cuba)
Ø North Korea
Ø Sudan
Ø Syria
Ø Talliban
Ø Unita
Ø Yugoslavia
SDN, SDT, SDNT, SDNTK, FTO.

AMERICAN EXPRESS BLUE BOX VALUES
During the decades since these values were introduced, the blue box values have become part of
the fabric of life in American express.

Amex teaches their employees that all their activities and decisions must be based on, and guided
by, these values.

These are as follows:

v Placing the interest of client and customers first.

v A continuous quest for quality in everything we do.

v Treating our people with respect and dignity.

v Conduct that reflects the highest standards of integrity.

v Teamwork- from the smallest unit to the enterprise as a whole.

v Being good citizens in the communities we live and work.

v A will to win.

v Personal accountability.

CLIENTS OF AMERCIAN EXPRESS BANK
The clients of AEBL can easily be separated into two main and then four sub-categories. These
categories are as follows:

1. Primary Clients
2. Secondary Clients

1. Primary Clients:
The primary clients, as the name shows, include those customers that are mainly targeted and
preferred customers for the bank. For further clarity and detail these are categorized into two
sub-categories, i.e.

(a) Financial Service Institutions
(b) Wealthy Individuals
The Financial Institutions
They are the basic and the main Amex. These are those banks or institutions that need funds and
they borrow from Amex, or saying in other words those institutions that deposit their funds with
Amex. This sort of arrangement is especially helpful when some institution does not have any
branch in some geographic area, e.g. Allied Bank has its account with Amex New York because
it does not have any branch in New York.

Wealthy Individuals
They are their second preference, as these individuals will not only bring larger amount of funds
but can also be source of public relations and contacts. For instance the owner of the packages
has account with Amex. Now not only he but all his relatives, most of packages employees and
LUMS have their account opened with Amex.

Secondary Clients
The secondary clients are further sub-divided into two main categories i.e.

1. Corporation & Government.
2. Retail Clients.
The third preference for the Amex is the large Public and Private limited companies, which are
having their main offices registered inside the land of Pakistan. These customers are big source
of funds. The fourth category, i.e. retail clients is related to those individuals, which are not
placed in wealthy individuals’ category.
CHAPTER NO.3
ORGANIZATIONAL CHARTS

Hierarchical Structure
The hierarchical structure of Amex shows that it is following a functional departmentalization
sort of structure. Functional departmentalization means a method for organizing activities into
separate units, each of which undertakes a distinctive function, e.g. marketing, operations etc.

Amex is enjoying some advantages of this system such as, communication and decision making
is easy, functional specialists are being prepared; strategic control is preserved at the top
management level. However, it does not have any escape from disadvantages such as,
coordination among departments is difficult, training opportunities for broad managers are
limited, changes are difficult and chances of interdepartmental conflicts are open.

Chain of Command.
The chart of Amex shows that chain of command, i.e. management layers, are normally six for
each department, i.e. Manager, Senior Assistant Manager, Junior Assistant Manager, Senior
Banking Assistant, Banking Assistant Supervisor. These six layers are in addition to the top
management, i.e. Branch Manager and Directors.

Pooled Interdependence
There are various departments which are independent to one another, but if any thing goes wrong
with one of the departments then it would affect whole of the organization.
Unity of Command.
It refers to the notion that no subordinate should report to more than one boss. However in Amex
unity of command is strictly followed.

Span of Control.

Span of control is Amex is quite small, as a matter of fact it is not more than three or four.
ORGANIZATION CHARTS

HIERARCHIAL SETUP AMERICAN EXPRESS BANK PAKISTAN.
OPERATIONS SECTION
ORGAIZATION CHART
LAHORE BRANCH, 2003

OPERATIONS, HIERARCHICAL SET UP
Director Operations

HEIRARCHICAL SETUP, 2003

PERSONAL MARKETING DEPARTMENT

Chapter number 4
Review of literature
VISION STATEMENT OF AMERICAN EXPRESS BANK

To the extent we act according to these values, we believe, we will provide outstanding trading
service to our clients and customers, earn a leadership position in our business and provide a
superior return to our shareholders.
MISSION STATEMENT OF AMERICAN EXPRESS BANK

Amex is a full-fledged commercial bank and provides a complete range of commercial banking
services and selected capital market services to both domestic and international clients.

The important part of AMEX’s mission is:

To provide banking services that is of high standards, comparable to the standard of banking
services that are provided in the United States. It is intend that this standard set an example to the
domestic financial market and give impetus to its further development and improvement.

And

To provide an ultra- modern, technologically advanced systems and procedures and such kind of
staff training that they commit to ensure the safety and secrecy that depositors should expect.

To this end bank ensures:
• SECURITY: through financially sound banking procedures and risk (asset and liability
management)

• LIQUIDITY: through cash availability on demand, short time investments and coverage, and
speed in processing credit transaction.

• PERSONALIZED SERVICE: through courteous well-trained employees, modern processing
and on-line communication systems.

In Pakistan Amex is the bank that is providing western level of services as determined by:

• Efficiency, speed of delivery, accuracy and pro-active communication

• Confidentiality about account information as well as business ideas, strategi4es and issues

• A complete relationship based on and fostered by mutual and long-0term cooperation and trust

• The use of an advanced information technology system, which enhances the awareness of staff,
as well as that of other banks, about the need to provide and implement modern technology at
large.
MANAGEMENT POLICIES

The intent of documenting a set of management procedures is to provide a framework from
which all Amex employees have a clear understanding of responsibilities and procedures for
management decisions, project priorities, and changes in plans and request for services.

UNDERLYING PRINCIPLE
The underlying principle of this document is an ongoing, continuous documentation whereby
topics can be added and modified as the Amex executives see fit.

BUSINESS PROCEDURES
Periodically Amex executives meet formally to discuss the previous period progress, future
activities that will be started, and to resolve any outstanding issue. In addition Amex functional
leaders will meet periodically to discuss all above mentioned issues.

QUARTELY MANAGEMENT MEETINGS FOR TAKING ANY BUSINESS DECISION

If a business decision has been referred to executives, they have 30 days from receipt of the issue
to mutually agree on a resolution. If the executives cannot come to a mutual agreement within
this timeframe, they should schedule the topic for resolution within the next quarterly
management meeting.

If a resolution is needed prior to the next meeting, a special session should be scheduled which is
to be attended by all members. In these meetings a specific format will be adhered to which
would include the way topics are to be presented with timeframes and other follow-up
guidelines.

A segment of these meetings are also devoted for resolutions of daily business topics that cannot
be mutually agreed by Amex executives. If this kind of topic is brought to this group for
resolutions, they have 60 days from the meeting to come to a resolution. If this group cannot
resolve the issue, it should be brought up to senior management for final resolutions.

SENIOR MANAGEMENT MEETINGS

Within 15 days after receipt if issue, senior management has to be agree on a set of business
procedures. There should be two additional senior managers for each party and a mutually
agreed neutral advisor.

Amex’s project office team has following key responsibilities. They can be summarized in three
categories.

• To provide project management and planning support to the development teams

• To help in categorizing and to direct the flow of project activity.

• Facilitate the preparation of the monthly communication within Amex.
TECHNOLOGY DIRECTION

The global business technology architecture is formally documented and accessible to each
member of the Amex account and appropriate Amex team members. Ultimately, we expect to
publish this from a central location using Amex worldwide web server, which will accessible by
a web browser such as Netscape.

The GBS IT architecture document is structured to establish a meaningful linkage of Amex
business strategies to technical, strategies. Each desired IT characteristic identified during the
business enterprise modeling process directly supports Amex business objectives. Each IT
characteristic will be directly supported by a set of technical strategies. The document contains a
basic framework for all architecture components, all current decisions, and placeholders for
future decisions. Documenting the rational behind the architecture that is truly valuable and
useful to Amex

FINANCIAL ADMINISTRATION

Amex financial team acts as the primary liaison on all financial issues. The primary area of
responsibility includes invoices and credits between the two organizational and support for
month end and quarter end closes.

As a great rule, all invoices and/or credits, which are outside the scope of the master agreement,
should be accompanied by a document signed by Amex executives. It is the responsibility of the
business line managers to obtain the necessary signatures and forward the documents to the
respective finance teams. All the basic financial statements such as balance sheet, profit- loss
statement and cash flow statements are basically prepared at Karachi head office.

INFRASTRUCTURE

Internal audit/ compliance
Overall, several key areas are supported by the audit and compliance team:

Ø Audit tracking/ corrective action
Ø Regulatory compliance consulting and support
Ø Import/ export compliance
Ø Business continuity
Support of the regulatory architecture for Amex is another function of the audit and compliance
team. Planning system solutions to control reporting requisites for the bank and consulting on
business solutions to remain proactive and regulatory dictates are all part of this operational
process. It provides support not only to usual and customary changes that occur annually but also
design new processes, as requested, for new regulatory changes. The audit and compliance team
provides oversight of the branch activity.

Communications:

To keep Amex management informed of the all branches accomplishments, all of the braches
prepare a monthly status of mutually agreed topics to be forwarded. Subset of these topics
includes:

Ø Project activity which includes:
• Summary effort tracking
• Strategic initiatives effort tracking
• Discretionary enhancements effort tracking
• Consulting effort tracking
• Service request tracking
• Detailed project status reporting

Ø Global audit activity
Ø Short-term contract deliverables
Ø Help desk activity
Ø Service level agreements
Ø Brach key accomplishments

TRANSFER OF MANAGEMENT

§ The transfer of management procedures must be performed each time the responsibility and
authorities of branch are taken by an incoming manager regardless whether the management
transfer is temporary or permanent: it is fully understood that the degree of detail may vary for
temporary transfer as opposed to a permanent one.

§ The local management must fully cooperate with incoming manager in providing information
on confidential matters, key personnel, business plans, special client relationships, and the
current state of operations, loans, funding sources, treasury exposures, and all other important
managerial aspects.
§ A complete transfer certificate signed by both the incoming and outgoing managers must be
done to evident the transfer.

§ Under no circumstances, except to comply with specific instructions from the appropriate
area/regional head, should an outgoing manager leave the location until both managers have
completed the transfer of management process and have signed the transfer certificate.

§ Management responsibility is not shared. It is fully transferred as of the date and time specified
in the transfer certificate.

§ Thereafter, the incoming manager becomes fully accountable for all aspects of the branch,
country, business unit or process for which he/ she has accepted responsibility.

§ Though the incoming manager id fully responsible to take actions to improve “inherited”

§ Standards or to obtain settlement of criticized assets etc.

His/ her performance should later be appraised only on developments occurring subsequent to
his transfer date.

CELEBRATION OF IMPORTANT EVENTS:

During my internship the important event of 14th august came, and thus I got the opportunity to
observe, how American Express Bank celebrates the important and national events like this. As
there is a national holiday at 14th so bank always celebrate it a day before that is on 13th of
august.

I was pleased to observe the enthusiasm of the management of American Express Bank in
celebrating this ceremony. The bank gives an official breakfast at 8’0 clock on the morning of
13th of august to all the staff of bank. The breakfast is enjoyed by the staff altogether.

Then in the evening of 13th there is again a small ceremony of cutting the cake. After the
banking hour that is five thirty all the staff of branch get together in the conference room and the
head of any department cuts the cake that has the beautiful flag of Pakistan carved on it. It is than
served to staff along with cold drinks.

On that day all the staff is being required to dress up in special way that is white shirt and green
tie are for men and white suit and green dopatta are for ladies. The clients on that day are served
with sweets and handsome tiny batches of Pakistan flag.
The sound system of branch also plays the patriotic songs from the 10th of august to 13th of
august.

.
Chapter number 5
MAJOR DEPARTMENTS OF AMEX LAHORE BRANCH

As I mentioned earlier Amex is closing down the corporate sector and coming towards the
consumer banking. So during my internship period I mainly worked in the retail departments.
Following are the major units of retail sector, which I observed during my internship.

Ø PERSONAL MARKEING
Ø CLIENT SERVICES
Ø REMITTANCES& GOVT SECURITIES
Ø EXPORT DEPARTMENT
Ø CASH DEPARTMENT

Now I describe the functions of these departments of bank. I basically worked in personal
marketing during my internship; however I tried to learn about the work of these other
departments either through interviewing the employees working over there or through taking
notes from any written material, which they provided to me on my queries.

PERSONAL MARKETING

This is the very important department of retail sector. Mainly the work of this department is to
deal with clients and satisfy their needs. This department also plays an important role in
developing new and strong relationships with clients by giving good services and respectable
treatment to them. It also facilitates clients to meet their requirements by helping them in
depositing their payments, issuing their cheque books or answering their queries regarding their
accounts.

There are two important functions of this department.
Bringing of new accounts and opening of accounts
Issuing of credit reports and forwarding them for acceptance

Types of accounts

There are two types of account:

• Current account
• Savings account

In Amex the current account has two other types:

Ø Normal account
Ø Kamiyab business account

And savings account is also of two types:
Ø Normal account (semiannually)
Ø Rupee plus account (daily)

Kamiyab business account

KAMIYAB
BUSINESS
Current account
Sure shot at success!
This is the new product of Amex; it has been launched about four to five months ago. So the
whole team of personal marketing is emphasizing on opening more and more these accounts to
achieve their given target

Services and facilities:

Following are the major services& facilities which are offered by this product in order to attract
the small-scale businessmen and thus to open as many accounts as possible

24 Hours Countrywide ATM Network:
It provides you access to 24-hour withdrawal through our countrywide network of over 100
MCB ATMs

Countrywide banking:
The account holders of it can operate their accounts from any of our branches.

Free pay order and demand draft:
On maintaining an average balance of RS. 200,000 in this account, there is free issuance of pay
order, demand draft and transfer of funds.

Banking at your doorstep
The account holders will have a option to have their pay orders and demand drafts picked&
delivered to their homes and places of business.

Evening banking
The account holders can avail evening banking facilities, Monday through Friday at any of our
branches.

Telebanking
Through our Telebanking facility the account holders will be ale to get account balance
information, including account balance statements by fax

In addition to these if you have Kamiyab business account you can get:

Ø Home/ Office delivery of airline tickets.
Ø Discount on airline tickets in case of foreign travel
Ø Facility of discounts on the worlds most widely accepted and renowned American express
traveler’s cheques.
RATES OF INTEREST ON SAVINGS ACCOUNT

NORMAL ACCOUNT RATE:
Per annum
3.00%

Term deposit rates:(per annum)

For deposit up to rupees. 10,000,000

One month deposit 1.25%
Three month deposit 1.50%
Six month deposit 1.73% (on monthly intervals)
1.73%( on quarterly intervals)
1.75%( on maturity)
Twelve month deposit 2.22%( on monthly intervals)
2.23%( on quarterly intervals)
2.24%( semiannually)
2.25%( on maturity)
RUPEE PLUS ACCOUNT RATES:

Balance between Rs 250,000 to Rs 1,999,999 1.00%
Balance between Rs 2,000,000 to Rs 9,999,999 1.25%
Balance between Rs 10,000,000 to Rs 149,999,999 1.75%
For Rs 150,000,000 and above Refer to treasury

FUNCTION NO ONE:
TO OPEN AN ACCOUNT
The duty of sales persons is to persuade more and more clients to open their accounts with
Amex. So they go in to the market to attract small businessmen towards the bank. For opening
any account an accounting opening application, two signature cards and one cheques book
request is used.

Following documents are also required for opening of any account.

FOR INDIVIDUAL ACCOUNT:

i. Original N.I.C (RM shall make a photocopy and attest it by confirming to have seen the
original)

ii. In case the N.I.C does not contain a photograph, the bank should also obtain any other
document such as driver’s license etc that contains a photograph otherwise a photograph.

iii. Employees certificate or attested copy of any such supporting document in case of a salaried
person
iv. In case client is self employed, evidence of business in shape of business card and RM’s
confirmation of having visited his place of business.

v. In case of illiterate person, a passport size photograph of the new account holder, besides
taking his/ her right and left thumb impression on the specimen signature card and all other
necessary areas of the account opening form.

vi. College/ University’s valid identity card’s copy in case of accounts of students

vii. Form w-9 to be filled out and signed in case of U.S national or U.S residents

viii. Form QA-22 to be filled out and signed in case of foreign national residing in Pakistan.

ix. Copy of passport along with page where valid visa is stamped required in case of non-
residents accounts.

x. Rupee account of non-residents to be blocked as per SBP regulations.
JOINT ACCOUNT:

The same documents are required for both persons, as mentioned in the individual account.

SOLE PROPRIETER ACCOUNT:

i. Same documents as in individual account.

ii. Stamp of the firm to be affixed alongside all signatures.

iii. A formal request from proprietor for opening of account on firm’s letterhead confirming that
he is the sole proprietor.

PARTNERSHIP:

i. Attested copy of N.I.C of all partners.

ii. Attested copy of partnership deed duly signed by all partners of the firm.

iii. Attested copy of registration certificate with registrar of firms. In case partnership is
unregistered, this fact should be clearly mentioned on the face of account opening form.

iv. Original resolutions from partners/ letter of authority regarding operating of account
commensurate with the clause regarding operation of bank accounts in the partnership deed.

v. Signature of all partners on the partnership portion of account opening form.

vi. The stamp of partnership firm to be affixed alongside signature of partners.
Club, SOCIETY, ASSOCIATION OR TRUST ACCOUNS:

i. Attested copy of N.I.C of all trustees.

ii. Attested copy of certificate of registration

iii. Certified true copy of bye laws/rules & regulations of the trust.

iv. Resolution of the governing body/ executive committee for opening of account and
appointing signatories for operation of the account.

v. Attested copy of NIC of signatories.

vi. An undertaking signed by all authorized persons on behalf of the institution mentioning that
as& when any change takes place in the persons authorized to operate upon the account, the bank
should be informed immediately.

LIMITED COMPANY ACCOUNTS:

i. Certified true copy of certificate of incorporation.

ii. Certified true copy of certificate to commence business in case of public limited company.

iii. Broad resolution clearly mentioning opening an account with us and appointing authorized
signatories with clear operating instructions.

iv. List of directors (preferably with signature of all) or signed by company secretary.

v. Attested copy of memorandum and articles of association.

vi. Certified true copy of form-29 (updated as per list of latest directors)

vii. Attested copy of NIC of all directors.

viii. Company’s seal to be affixed alongside signatures of authorized signatories on all required
places on the account opening form.

LIAISON/ REPRESENTATIVE OFFICE/ AGENTS ACCOUNT:

i. A valid power of attorney by the principal in favor of the agent/ representative, duly
consularized by Pakistan high commission in the country of the principal.

ii. Copy of passport/NIC of agent/representative duly consularized by Pakistan high commission
or the principal.
iii. Rules/regulations/ memorandum& articles of association of principals duly attested by
Pakistan high commission.

iv. Copy of certificate of incorporation of principal duly consularized by Pakistan high
commission to confirm the existence of the principal in that country.

RESPONSIBILITIES OF PERSONAL MARKETING DEPARTMENT IN ACCOUNT
OPENING PROCEDURE

• Determine that there are no restrictions (i.e. local laws, central bank guidelines etc) and
sanctions against opening an account for a specified individual and company.
• Determine what other references are required. For every account to be opened a reference of
any other account holder, or client’s previous bank’s reference letter is required.
• Obtain all required documentation as mentioned above for different categories of account and
after examining them complete the client profile.
• The profile and documentation should be signed at appropriate places to evidence a proper
review and approval by the relationship manager.
In the nutshell, we can say that following three steps must be get completed by employees of
personal marketing.
Ø Complete and approve account opening
Ø Obtain all required documents and get them approved by his/ her supervisor for all new
accounts.
Ø Ensure that client information standards are met; client profiles are thoroughly and accurately
completed and approved by RM.

PREPRATION OF KYC AND ITS IMPORTANCE

In opening any new account whether demand, savings, call, time or certificate of deposit, loan,
investment or any other relationship account, the guiding principle of Amex kyc policies must be
followed. This entails giving careful consideration to and only doing business with those clients
whose character, integrity, and business/financial reputation are in good standing.

To prepare kyc after opening of an account is very important work of employees of this
department. Kyc is abbreviation of know your client. After being open accounts of persons
whether it is individual account or joint account kyc is named as personal client profile. And an
account of a company is opened than it is commercial client profile.

As the name is mentioning kyc contains main information about client that is account title,
primary or any other residential addresses, in case of employee his designation and name of
place where he works. If client is a businessman than his name of business, his primary trade
area, his business major suppliers and customers, any subsidiaries or affiliates if it has any and
address of company or organization in which he works.

The main and important part of kyc is the estimation of account holder wealth. It has two
sections in one its total wealth is to be given and in second his per annum income is to be given.
Here it must be mentioned its estimated business investment, personal and residential property
and savings. As most of clients are not open and willing in telling their true income, so this
making of this part is based upon good judgment of employees and good dealing with client, as if
during employee and client conversation if employee succeed in building confidence if client on
him, client can than also tell him about his wealth without any hesitation.

In the last part of kyc detail of deposit at the time of opening the account is to be given that is
how much cash or how large cheques is deposited at that time. Than the anticipated activity that
is expected to be occurring on per annum basis is given which must be commensurate with per
annum income. After that signatures of RM, RM’s supervisor and of employee of client service
department who checks the documents of newly opened account.

FUNCTION NO TWO:
APPROVING CREDIT FOR CLIENTS

Second important function of this department is to prepare and forward for approval the credit
request of clients. For this purpose a credit report s made by employees of this department. This
is of four pages report in which all the terms and conditions of giving loan are mentioned. At one
page executive summary of report is given and other pages contain the information that against
what collateral the loan is granted and the time limit of loan etc.

In the credit report it is also mentioned whether this over draft facility that is credit facility is
DPRF (demand personal revolving finance) or DPF (demand personal finance). DPRF is a
running finance facility that is client can anytime deposit the borrowed amount back in to the
bank thus making the principal amount large as a result of which his markup amount which he is
to pay on availing this facility becomes smaller. Due to this reason mark up rate on this facility is
somewhat high as compare to DPF facility, because in that case client cannot pay back the
principal amount before maturity.

Types of loans
They are of two types:

v Class-one loan
v Class-two loan

In class-one loan: loan is given against those assets that are readily convertible in cash for
examples for class-one loan collateral acceptable are:

Ø SSCs
Ø DSCs
Ø Dollar banks
Ø Bank guarantees
Ø Other national savings
These are all called sovereign securities because government backs them

STEPS INVOLVED IN PROVIDING CREDIT FACILITY TO CLIENTS
I. First of all customer make a request on borrower fact sheet

II. If loan limit is les than or equal to Rs.499, 000 no CIB report is required, but if loan limit is
above this, than CIB report is necessary. As CIB maintains Information about borrowers, and
according to STATEBANK no loan should be given to a defaulter, so CIB report ensures that
borrower is not a defaulter.

III. After that credit report is prepared by the employee of personal marketing and is forwarded
to Karachi (head office) for approval.

IV. After approval, collateral is taken

V. This collateral are then sent to the bank that has issued them for the purpose of verification
and lien making, that is the issuer bank give assurance of issuance and verify that no other
activity has been done against them already by it.

VI. Then loan documentation has to be done; after all of these steps 75% of the face value of the
securities is to be granted to client

VII. At he time of advancement of loan two accounts open automatically:

v OD ACCOUNT: that is overdraft account in which limit amount of loan is present and client
uses it as he wishes.

v MARK- UP ACCOUNT: in which mark-up of facility is to be deposited, which is charged
quarterly or according to terms and conditions of credit report. Its rate is also approved in CR
report.
ATM CARD FACILITY
American Express Bank is continuously striving to develop products and services for the ease
and connivance of its clients, so it has welcomed its clients to the world of the xpress advantage.
This is a new facility that provides a lot of services for the connivance of its clients.

To begin with Amex has made available the widest network in Pakistan by joint operation with
MCB and MNET, all American Express Bank’s Xpress Advantage card holders are able to make
cash withdrawals 24 hours a day from MCB and MNET ATMs. There are almost 105 ATMs
machines available in all over Pakistan. The number of machines in each city is as following:

NAME OF CITY NUMBER OF ATMs
Karachi 45
Islamabad 10
Lahore 17
Rawalpindi 04
Multan 03
Faisalabad 03
Gujranwala 03
Hyderabad 03
Sialkot 02
Peshawar 04
Quetta 03
Sukkar 03
Rahim yar khan 03
Sargodha 02
Types of card
ATM card of Amex is of two types.
v Blue card
v Gold card

For issuance of blue card minimum balance in the account must be up to Rs. 200,000 and daily
limit of withdrawal of cash for this type of card is Rs. 10,000 and for having a gold card
minimum balance in the account is Rs. 500,000 and daily limit of withdrawal of cash is Rs.20,
000. After issuance of both types of card, I t is necessary to maintain the average minimum
balance in the account, otherwise there is deduction of Rs.50 on per transaction.
CLIENT SERVICES

Client Services is an important Department. It deals with all the matters related to clients from
opening of an account or locker till the termination of relationship.

Following are the important procedures being conducted by this department.

I. Opening of Account.
II. Issuance of Cheque book.
III. Closing of Account.
IV. General Ledger maintenance.
V. Signature verification.
VI. Issuance of loose cheque
VII. Stop payment notification
VIII. Issuance of statements of accounts

ACCOUNT OPENING PROCEDURE

Details regarding opening and closing of account are as follows.

v Client accounts are opened with Management’s authorization.
v Client accounts are established in compliance with Client Due Diligence (Know Your Client)
Policy and Procedures.
v Proper account documentation, including any documents required by local regulatory
authorities, is obtained.
v Specimen signatures are properly safeguarded.
v The requirements for account closing, including the approval process and sending of
confirmation to the client.

Documentation and Regulatory Compliance.
Following persons are responsible for ensuring that local and US regulatory, and financial
reporting requirements are strictly complied with.

v The Senior Country Executive
v Country Credit Officer.
v Head of Internal Control
v Country (Financial) Controller
v COO/Operations Head.
This should specifically include proper completion of any documentation required for
withholding or non-withholding of taxes pursuant to US Internal Revenue Services, and where
applicable, local regulatory requirements.”

ASSIGNING THE ACCOUNT NUMBER

To open an account is the responsibility of personal marketing department to check its required
documents and to give account number is responsibility of client services. Moreover this
department also issues ATM card and make a check on the activity of account.

The designated employee of client services ensures that all client profiles are properly
completed, all required client information is obtained, and all documentation is in order.

This should be completed prior to the establishment of a new relationship and should be
evidenced on the Client Profile (and/or checklist, if used locally).

He has to perform following procedures.

I. As per Client Due Diligence Policy, conduct an independent review of all applications to
confirm conformity with the KYC Policy and Procedures.

II. Independently check new client profiles, conduct periodic reviews and assessments of
randomly selected profiles to ensure the integrity of Client Due Diligence process.

III. Scan (using a high resolution PC scanner), microfilm/microfiche, or record on optical disk or
any other acceptable magnetic media, as sanctioned by local legal counsel, the account opening
from, all signature cards to create backup copies, and any other documentation, and record on a
control log.

IV. Client Services department must retain a copy of the documents in the local section of the
record maintained.

REFERING TO HEAD OFFICE
Then on receipt of scanned documents, the Client Services at Karachi.
§ Open CIF and client account(s) on receipt of properly completed and approved documentation.

§ Ensure proper completion of any documentation required for the withholding or non-
withholding of taxes relating to interest and dividends payable to the client.

CHEQUE BOOK ISSUANCE

a) FIRST CHECK BOOK

Checkbooks are not to be issued nor drawings of any kind permitted until the account opening
procedure has been completed and final approval has been obtained. Check deposits, subject to
local management’s approval’s , may be accepted to open an account, but funds may not be
disbursed until the account documentation and verifications are completed, including the final
approval, and clearance of funds.

b) REGULAR CHEQUE BOOK ISSUANCE.

When one cheque book is finished, then the customer can apply for a new cheque book. Each
cheque book contains a special Requisition Slip for the issuance of new cheque book is about to
finish, customer is required to fill in this slip and hand it over to the Designated Officer at Client
Services Department.

§ Normally it takes 2 days to prepare the cheque book from the day of receiving the Requisition.
But if, sometimes the client is himself present at the premises then the checkbook can be issued
to him at the spot.

Rupee Cheque books are available in following denominations.

• 25 leaves
• 50 leaves
• 100 leaves

CHECKPOINTS OF ISSUING CHEQUE BOOK

To ensure that Cheque books are properly issued to the clients, this department implements the
following controls.

☼ Always obtain an acknowledgement from the client when cheque book is going to be issued.

☼ Develop and implement procedures for cheque books sent by mail to ensure that
acknowledgements are sent along with the cheque books for the clients to sign and return, and
acknowledgements are actually received back from the clients.

☼ Verify signature(s) on all acknowledgements.

☼ Immediately notify exceptions to the local operations management.
CLOSING OF ACCOUNT

Following procedure is adopted to close the accounts, account can be closed on either Clients
request or by the Bank it self if it fulfills some criterion.

1. In case if client requests

The client should send a written request by mail, an authenticated method, or request closure in
person. If the request for closure is by mail, a signature verifier must check the client’s
signature(s) for authenticity. Given disposition of funds and advice where to pay (the account
can only be closed when there is a zero or a credit balance, including interest and other charges if
applicable).

2. In case if the Bank closes Account:

If any account falls in certain condition that it becomes necessary for the closure then bank it self
terminates the account.
CLOSING OF ACCOUNT PROCEDURE.

On receiving the Account closing advice, the Client Services Performs the following procedures.

1. Send a memo to Operations requesting closure of a client’s account.

2. Forward a client’s request for closure.

3. Determine closure based on inactivity of a client’s account.

4. Request release/discharge of security documents in favor of AMEX branch, if applicable.
Give a written notice of closure of the account to the client as customary in the market place or
in accordance with local law. (The Bank should have proof that the client received the written
notice e.g. tested telex answer back or return receipt).

5. Sent out a pre-closing notice to all operating areas, once a request for closure is approved. The
recipients must then sign and date the notice. This action is necessary to ensure that the account
is not closed before all transactions are completed.

6. Ascertain that any security documents in favor of the Amex branch have been released/
discharged.

7. Send confirmations of closure to the client and relevant RM, after closing the account.

8. Recall unused checkbooks from the client if the local banking law or practice requires the
AEB branch to do so. Destroy all unused checks upon receipt.

9. Remove signature cards from the active signature verification files, mark them “closed” and
file appropriately in a closed account file following the procedures.
DORMANT ACCOUNTS

Dormant accounts are susceptible to manipulation. Therefore, for safety reasons, it is necessary
to segregate such accounts under a separate control and apply special safeguards.

Circumstances for assigning an account Dormant status
An account is deemed to be dormant when any of the following circumstances apply:

1. There has been no client-originated activity in the account for the following periods.

a. Current Account – 1 year.
b. Savings Account – 3 years

2. Others as determined by local practice.

3. When more than one account is maintained by a client and client-originated activity has taken
place in any one of his/her accounts during the specified period, the inactive account(2) need not
be deemed dormant only for the reason of no activity. Similarly when a client has signed a
balance confirmation when requested by an AMEX branch is person or by mail, during the
specified period, the account need not be deemed dormant for the reason of no activity.

4. An account statement (or any other communication mailed to the same address appearing on
the statement) is returned for reasons other than incomplete/incorrect address or postal error.

This does not apply to countries where poor and inaccurate local postal system might cause
frequent transfers of client accounts to dormant status and subsequent reactivation. In such
instances, the local operations management may develop their own dormancy criteria, document
and implement local procedures and include them in the local section of this manual.

5. If the account holder (or one of the account holders in the case of a joint account) is deceased
or becomes mentally incapacitated.

6. If the balance of account becomes subject to a court order, injunction order of disposition by
an administrator or executor.

7. If, in the opinion of management, there exists a loss of client contact (other than stated above)
that warrants treatment of the account as dormant.

Detection of Dormant Accounts.

A designed senior operations employee should review, at least every six months, all current
accounts to determine whether they should be transferred to dormant status. In addition she/he
must also review accounts with nil or below minimum balance for possible account closures.

Ø Amex branches should close accounts only in conjunction with the concerned RM.

Ø Amex branches must give special attention to any transactions occurring in an account after a
long period of inactivity, the absence of which would have caused the account to be classified as
dormant.
Custodians of Dormant Accounts.

Local operations management must appoint joint dormant custodians to monitor control and
approve all transactions relating to dormant accounts. Local operations management must also
limit the following functions to joint dormant custodians only.

v Access to dormant account information, signature cards and printouts.
v Approval of all transactions posted to dormant accounts.
v Reactivation of dormant accounts.
MAINTENANCE OF GENERAL LEDGER FOR ACCOUNT OPENING AND CLOSING.

Under manual operation, each American Express Bank branch must maintain a register of
open/closed accounts to show the running total of accounts maintained by that branch. The
branch must balance this record at month-end to total the number of accounts by category, e.g.
Savings, Current etc. and immediately investigate and resolve discrepancies.

Under an automated environment, the system should allow the AMEX branch to have this
information at any time. The branch must, however, ensure that changes/deletions to the Master
file records are properly controlled and authorized by designated employees.
SIGNATURE VERIFICATION.

This is another important function that is performed by the Designated Officers at Client
Services.

Signature verification is intended to establish authenticity of a check, written instructions, loan
documents, and acceptance.

The Officers of client service initials should evidence signature verification by an employee. The
tellers’ PAID stamp on a check or saving withdrawal slip/ticket is considered as evidence of
signature verification, if the tellers perform the signature verification function.

Some Amex branches may stipulate limitations as to the amount that employees are authorized to
verify signatures. Any such authorization or limitations should be documented and a copy
thereof retained in the local section of this Manual. In those offices where the employee
verifying signatures is not required to place his/her initials, detailed procedures on the signature
verification process including how the accountability will be established for an error or failure in
individual cases, should be documented. If a signature cannot be verified or does not agree with
the specimen, such notation must be attached to the involved instrument. The instrument should
be referred to management for approval or rejection.

ISSUANCE OF LOOSE CHEQUES

Loose or bank client cheques can be issued to any client in any quantity and therefore are more
susceptible to fraud/forgeries than the regular checks. The following controls must be
implemented to minimize the risk.
Ø Only issue loose cheques to the client(s) against a written request, and for over the counter
cash withdrawals only. This does not however, apply to loose cheques issued as part of the
“starter kit”.

Ø Always verify signature(s) before issuing a loose cheque to a client.

Ø Update the loose cheques log at the time of issuing.

Ø Use separate serial numbers for the loose cheques, where possible.

Ø Designate an employee (other than the cheque custodians) to fully count and reconcile loose
cheques inventory on a monthly basis.

Ø Develop, document and implement procedures for “internal printing” of blank cheques, where
applicable, and retain a copy thereof.

STOP PAYMENTS NOTIFICATION

Client Services also perform this important function.

Amex branches must designate a senior operations employee to process all stop payment orders.

The Department generally accepts stop payment orders only if received in writing from the client
or via a tested telex or authenticated SWIFT message. If a client has telephoned, she/he must
confirm the order in writing within 14 days of the telephonic request.

Action upon Receipt for Stop Payment Orders

§ All written stop-payment orders (not received via tested telex or authenticated SWIFT
message) must be time stamped upon receipt and signature verified.

§ The designated employee must initial the stop payment request alongside the client’s signature.

§ The employee handling stop payments must check relevant client’s account to ascertain
whether or not the check has been paid. If the cheque has not been paid, an acknowledgement
should be sent to the client.

§ The acknowledgement must be sent using a standard format approved by local counsel,
incorporating a waiver clause and retention period.

§ All notifications of stop payments must be recorded in client’s account record log such as the
Client Accounting System.

§ A master file containing the original instructions must be maintained as an “open file”. Once
the cheque has been stopped, the stop payment instructions must be removed to a closed file for
the required retention period.
§ When a cheque presented for payment is the subject of a stop payment order, the cheque must
be clearly marked “Payment Stopped” and returned to the presenter(s).

Retention of Stop payment Instructions.

Dependent upon local legal restrictions, stop payment orders should remain open for 180 days
from the date the instructions were received from the client. Unless contrary to the local practice,
any cheque dated over six months should considered “stale” and when presented for payment,
must be referred to a designated management official before encashment/payment.

Multiple Stop-payment Orders.

If a client request stop payment on a large number of blank checks, it is advisable to close the
account and open another in the client’s name.
Release of Stop-payment Instructions.

An Amex branch must obtain the client’s request in writing, by a tested telex or an authenticated
SWIFT message, whenever an Amex branch is instructed to remove stop-payment instructions.

The employee processing the request must verify signature(s) on all written request, initial to
evidence signature verification, attach the removal request to the original stop payment order and
remove the original stop-payment request from the open file.
ISSUANCE OF STATEMENTS OF ACCOUNTS

In accordance with the proper handling of all the matters related to clients, issuance of Periodic
Account Statements is also an important step involved. All account statements must be
dispatched to the clients in accordance with the Product definition.

v Demand accounts – Once a month.
v Saving accounts – Once every six months.
v Time, Call and settlement accounts – Pursuant to local practice.

Based upon the clients’ needs and local practice, local operations management may develop and
document its own periodic frequencies (in excess of the standards set above) and retain a copy in
the local section of this manual. Procedure may also be developed to ensure that for every
account a statement is generated and delivered to the client.
Amex branches must balance all statements with the Client Accounting System before they are
mailed. However, if there may be any difference remains unmatched, despite every effort to
balance the accounts.

Amex branches must use a numeric tick-sheet or a similar control sheet to ensure that all account
statements are in fact generated.

Local operations management must designate a department to mail the statements and other form
of dispatch to clients. Amex branches must control the statements to be mailed up to the point
they are delivered to the appropriate postal authorities. The same applies to other types of
deliveries to the clients. The clients’ services department must retain all undelivered statements
returned for reasons other than incomplete/incorrect address or error on part of the postal
authorities. This department should only deliver such statements upon receiving written request
from the account holders or hand them over personally to the client against client’s signature.

It must refer to the local operations management any statements, which remain undelivered for
more than two months, to enable the local operations management to decide whether the relevant
accounts should be classified as dormant.

In some cases daily statements are sent to clients when ever there is any movement in the
account, the designated department should exercise control in the above stated manner, at least
once a month, after all charges or similar items are processed. For example, Nishat Textiles,
Siemens Engineering, Ammar Textile, Packages.

Error in Statements.

Statements should contain a prominent notice that all inquiries and correspondence concerning
exceptions and errors should be addressed to Client Services Department.

All inscriptions should appear on each statement to best safeguard the interests of the Bank with
regard to possible later claims from the client arising from matters revealed or suggested by the
statement. Such inscription should be to this effect.

We will understand that you find this statement of your account to be corrected unless within__
days from its date this branch receives from you notice of any exceptions thereto in writing.

(The number of days and precise wording should be decided by local law and custom and local
counsel’s opinion).

REMITTANCES&GOVERNMENT SECURITIES

Main functions of the department.

A. Outward money transfer.
B. Inward money transfer.
C. Government Securities.

A.OUTWARD MONEY TRANSFERS.

I. Pay orders
II. Demand draft in various currencies.
III. Swift and Telex transfer.
IV. Inter branch transfer.
V. Transfer funds between accounts (Book Transfer).

B.INWARD MONEY TRANSFERS.
I. Swift payment order.
II. Telex transfer
III. Outstation cheque-local
IV. Outstation cheque-Foreign
V. Book transfer (between accounts)
VI. Inter branch transfer.

C.GOVERNMENT SECURITIES

I. Issue of SSC and DSC
II. Payment of profit
III. Encashment of Certificates
IV. Reimbursement of Profit
V. Reimbursement of enchased Certificates.

OUTWARD MONEY TRANSFER

A.ISSUE OF PAYORDER AND DEMAND DRAFTS-LOCAL CURRENCY

To receive instructions from remitter (client) this could be in the following manner.

I. At pay and receive desk in the dept.
II. Through mail (Time and date stamp should be applied).

The instructions could be in the form of

I. Letter with instructions to debit account.
II. Cheque drawn on Amex.
III. On prescribed (printed) form
IV. Against deposit of cash
V. Against (suspense) by order of bank itself.

VERIFICATION OF INSTRUCTIONS.

I. Get signature verified from cash dept (Manager).

II. Check sufficient available balance in account to meet the amount of transaction, charges and
withholding tax if any.

III. Check the date of instructions, it should not be postdated.

IV. If the instructions are in shape of a cheque refer cheque control list.

V. If the instructions are against cash ensure cash has been deposited.
Ensure that 0.3% tax has been deducted/received prior to issuance of the pay order/draft
otherwise refer to client for correction of instructions, here a flow chart of issuance of pay order
and draft for local currency is given. In it in mention the whole procedure of pay order or draft
issuance.

ISSUE OF FOREIGN DRAFTS

To receive instructions from remitter (client) this could be in the following manner.

I. At pay and receive desk in the dept.
II. Through mail (Time and date stamp should be applied).

The instructions could be in form of

I. Letter with instructions to debit account.
II. Cheque drawn on AEBL.
III. On prescribed (printed)form

VERIFICATION OF INSTRUCTIONS.

I. To get the signatures verified from cash dept (Manager).
II. To check sufficient available balance in account to meet the amount of instrument.
III. To ensure additional funds are available to meet the charges.
IV. To check the date of instructions it should not be post dated.
V. If the instructions are in shape of cheque refer cheque control list.
VI. Check the status of account and obtain necessary authorization for processing of the
transaction if it falls under the status of Dormant/Block/Hold.
VII. If the instructions are completed and corrected go ahead to process the draft transaction
otherwise refer to client for the correction of instructions.
VIII. Debit client account in system.
IX. Demand draft charges will be recovered by debiting remitter account.
X. Authorized employee will review and sign the draft and after verification of the particulars of
the beneficiary and amount.
XI. Deliver the draft to client and take his signatures on the copy of the draft to record the receipt
of the instrument.
XII. File the instructions (retain photocopy of cheque) with the office copy of draft.
CHECKLIST

To issue drafts and swifts and book transfers remittance department often receives cheques as the
instructions to debit the clients account. Following points must be considered while receiving
cheques.

I. Cheques should be drawn on AEBL.
II. Cheques should be in favor of AEBL.
III. Cheque should not be post date.
IV. Cheque should not be stale (six months old).
V. Cheque should be signed by the drawer/drawers
VI. If drawer is an artificial person cheque should carry its stamp.
VII. All alteration cuttings must be authenticated.
VIII. Amount in words and figures must agree.
IX. Cheques received in mail must be bear date, time and AMEX crossing stamp.
X. Cheque should not be mutilated.
XI. Cheques received at pay and receive desk and instructions should carry instructions of the
face, overleaf or attached duly signed by the drawer.
XII. Cheque should not be restricted (Payment stopped).

GOVERNMENT SEURITIES

SPECIAL SAVING CERTIFICATES.

SSC’s are common form of saving certificates issued by Govt. of Pakistan. These are interest
bearing certificates and are available in following denominations.

v Rs.5000
v Rs.10, 000.
v Rs.50,000
v Rs.100,000
v Rs.500,000
v Rs.10,00,000

Each type of Certificates has six coupons attached to it. These Certificates are issued for 3 years
of maturity.

Profit is paid every 6 months as calculated by a fixed percentage specified by the State Bank of
Pakistan.

Every time the profit is paid, a coupon is detached from the certificate and profit amount is either
paid to the customer directly in the form of cash or credited to his account if he maintains an
account with AMEX.

These Certificates can be cancelled any time before its maturity, but not before 30 days of
issuance.

In case of premature cancellation, whole of original amount is paid back without making any
deductions and any profit accumulated is also paid along with. In case if the profit is not received
regularly when it becomes due then additional profit is paid for the days it remained invested.

LIBOR Rate (London Inter bank Borrowing Rate) is applied to calculate the profit on SSC in
case of accumulated profit payment. The rate, which was on the date when security was
purchased, is applied to calculate the amount of profit. These Securities can be reinvested with
the whole amount or with the original commission charged by the bank.

American Express Bank provides these services on behalf of State Bank of Pakistan, so it
charges a commission of 0.5% of the amount of Securities issued for providing these facilities.
DEFENSE SAVING CERTIFICATES:

Defense Saving Certificates are also one of the Govt. securities, which are dealt by the American
Express Bank.

The procedure for the issuance, profit payment, cancellation, and reinvestment of these
certificates is exactly similar to that of Special Saving Certificates. The period for which these
securities are issued is different from that of SSC’s. Defense Saving Certificates are issued for 10
years maturity. No profit is paid before this period. The lump sum rate of profit for DSC is very
high i.e. 200% of original amount.

The Defense Saving Certificates can be enchased before their maturity of 10 years.

These Certificates can not be enchased before 30 days of its issuance. Profit on such certificates
is calculated according after one year and onwards according to specified rates.

Profit is only paid when Defense Saving Certificate is enchased. No separate payment of profit is
made as it is done in the case of Special Saving Certificates.

ISSUANCE OF SSC/DSC


ENCASHMENT OF SSC

PROFIT ON COUPONS
US DOLLAR BONDS

ISSUANCE/PROFIT/ENCASHMENT

ISSUANCE

Us Dollar bonds can be issued against Froze/Fresh FCY accounts/FEBC/FCBC/DBC. US Dollar
bonds can only be issued for the face value of certificate and in the same denomination; profit of
any certificate is paid in Pak Rupees.

TYPES OF BONDS:

There are 2 types of bonds.

® REGISTER
® Bearer.

Register

Bonds are issued in the name of account holder and can be sold to other party after proper
endorsement on the bond.

Bearer

Bonds are issued without any name and can be sold to any one at any time.

MATURITY OF US DOLLAR BONDS

US Dollar bonds are issued for the maturity of

3 Years
5 years
7 years

Profit is payable after every 6 months.
INFORMATION REQUIRED FOR ISSUANCE OF SUBDB

REGISTERED BEARER
Form Authority
Date of Issue Date of Issue
Name of Stamp of bearer
Stamp of registered Stamp of bearer
Registration number
Issuing Bank’s stamp Issuing Bank’s stamp
* Lien can be marked * Lien can not be marked.

• Marking of lien in case of US Dollar Bonds held by any bank as collateral.

REPORTING TO SBP

Various reports are submitted to State Bank of Pakistan for which SBP has provided different
formats.
FORMAT NUMBER PURPOSE OF REPORT TIME OF REPORT
SUSDB-1 Daily Sale Before reporting time.
SUBSD-5, Bearer & Register Daily Sale Sent to AEB Karachi
SUBDB-18, IV & 5 SUSDB encashment
SUSDB-14 SUSDB Profit

PROFIT COUPONS

Profit is payable every 6 months till the date of maturity and on maturity bond is encashed for the
face value of bond.

Profit Coupons are issued against each piece of SUSDB. Following information is required to
pay the profit coupon.
§ Bonds number
§ Date of issue
§ Date of maturity.
§ Face value of bond.
§ Profit No. (i.e. 1st, 2nd etc
§ Name of recipient
§ Amount of profit.

RATES

Rate of return on SUSDB, LIBOR plus following SBP rates.
YEARS OF MATURITY SBP RATE SUSDB ISSUED AFTER 3 SEPT.1991
3 2% 1%
5 3% 1.5%
7 4% 2%
If SUSDB is enchased before maturity date the applicable rate of return is as follows.

§ 7 years SUSDB encashed before maturity, rate of 5 years SUSDB is applied.
§ 5 years SUSDB encashed before maturity, rate of 3 years SUSDB is applied.
§ 3 years SUSDB encashed before maturity, rate of 3 years SUSDB is applied

ENCASHMENT

SUSDB can only be enchased from the office of issue on the prevailing rate on the day before
the date of encashment.

Profit is paid after every 6 months and upon maturity face value of SUSDB is encased in US
dollars.

SUSDB are enchased on maturity and can be paid in Pak rupees or US Dollars. If payment is in,
Pak Rupees, the rate of 1 day before the encashment date is applied. No encashment certificate is
issued if SUSDB are matured and payment is made in US dollars.

PRE MATUREMENT CASHMENT

If SUSDB are enchased with in 1 year from the date of issuance, any profit claimed is recovered
and payment is made in Pak Rupees. No US Dollars can be paid.

The profit recovered has to be surrendered to SBP via Amex Karachi, who will pay to SBP
within 3 days of encashment.

Encashment certificate is also issued on pre mature encashment in favor of the bearer of the
SUSDB. Rate of encashment is the date on which transaction is made. (SBP rate of frozen
funds).
REINVESTMENT
SUSDB can be reinvested upon maturity for the same period (e.g. 3 years bond can only be
reinvested for 3 years).

“ISSUED AGAISNT RE-INVESTMENT” is to be stamped on the front of new issued bonds.
WITHHOLDING TAX ON SUSDB

With holding tax is only applicable on the following SUSDB.

ü BEARER Bonds issued on or after 16 Dec. to Resident & NON-Residents.
ü REGISTERED Bonds – Exempt.
REIMBURSEMENT

SBP reimburse funds within 72 hours from the date of submission of encashment case. All cases
are submitted in SBP Karachi.

All cases are sent to AMEX Karachi in pack mail. Insurance letter is faxed to ADAMJEE for the
insurance cover of SUSDB.

In case the SUSDB (Registered/Bearer) are lost in transit, ADAMJEE will pay to AMEX the
amount equivalent to the face value of SUSDB lost).
In case REGISTERED and/or BEARER PAID bonds are lost by the client or in mail to Karachi
following documentation is required.

• Copy of F.I.R.
• Copy of advertisement in news paper.
• Letter from the client informing the bank about the loss of SUSDB.
• Indemnity bond from the client.
• Copy of SUSDB 5 schedule (SUSDB sale reported).

All these documents are to be submitted to SBP Karachi for the claim of lost SUSDB.

PENALTY

☼ In case of delay in submitting cases of encashment more than 3 days penalty @ Paisa 6/- per
Rs.100/- per day is charged.
☼ After 6 days SBP will our account against delayed case.
☼ Irregular sale or sales not following SBP rules penalty Rs. @ 10% on the value of SUSDB
and SBP can also withdraw the permission of sale/ repayment of SUSDB from bank.
CASH DEPARTMENT

This is the most important department of a bank branch. Money is received and paid in this
department. An intervene is not allowed to work in this dept. however, by interviewing the
employees working over there and by getting some published data is got following information
about it. The main function of cash dept. is

i. Payment of cash.
ii. Deposit of cash.
iii. Income clearing.
Definition of Cheque.

v An unconditional order in writing drawn on a specified banker, signed by the drawer, requiring
the banker to pay on demand a sum certain in money to, or to the order of a specified person or
to the bearer, and which does not order any act to the done in addition to the payment of money
(law of banking by Dr hart, p.327).

Parties concerning a cheque

The normal cheque is one in which there is
1. Drawer.
2. Drawee.
3. Payee.

Drawer

Ø The maker of a cheque is called the drawer. He must be an account holder in order to make the
instrument.
Ø A valid cheque the drawer must sign it exactly in accordance with the specimen signature.

Drawee

Ø The person directed to pay is called the “Drawee”. In case of a cheque it is always a banker
with whom the drawer maintains an account so as to constitute so as to constitute him the
customer.

Payee

® Payee is the person named in the cheque to whom or to whose order the payment is to be
made. There may be more than one payee on a cheque to whom it may be paid jointly or
alternatively.

Types of Cheques

Bearer
Order
Crossed cheque

Bearer

Payable at the counter to the bearer or cash be deposited in any account.

Order
Cheque is always in the name of the individual, to whom payment is made against proper
identification (i-e id card- passport-driver’s license) if he is our account holder then verify his
signature.

Crossed cheques

a) Simple crossing
b) Payee a/c only.

Simple crossing cheque

It can deposited in the account (can be transferred to third party by proper endorsement).

Pay account only crossing.

It can only be deposited in the beneficiary’s account (can’t be transferred to third party).

AMEX branch can not make cash payments to Pvt Ltd and public Ltd companies at cash
counters as per SBP regulations.

Incoming Clearing

Amex cheques deposited in other banks presented through NIFT to the branches, they have to
check these things before payment the cheque.

® DATE (not to be stale or post dated).

® Amount in words and figures should be same.

® Presenting bank’s clearing and crossing stamps.

® Banks discharge stamps on the back of the cheque.

® Revenue stamps and payee’s endorsement (like packages and Siemens required).

® Debit the account.

® If balance is short in any account system will automatically generated the referral sheet.

CHAPTER NO.6

CORPORATE CULTURE
Being an ever-hungry organization for growth & development, American Express has developed
a special culture inside the organization. This culture not only increases the productivity of the
employees but it also makes the employees more presentable than they are before joining the
organization. This culture helps the employees to retain confidence in them and creates an
environment where anybody would be willing to work with his full devotion & sincerity. The
salient features and traits of this culture are given below.

Attendance & Punctuality
The employees are expected to be punctual & regular whether they are permanent employees or
they are on contract. They are, however, allowed to have thirty (30) holidays in one year. Apart
from these thirty holidays, they are also given a Saturday off on alternate basis, i.e. if an
employee has taken off the first Saturday of the month, then the third Saturday of the month will
be his next off day. The regular employees are then given special increments at the year-end as
compare to those who have taken some holidays.

Dress & Demeanor
Appearance seems to be the most special concern of the top management, as they have strictly
implemented that in normal working days all employees are supposed to wear necktie with
trouser & shirt in the summer and with coat in winter. The Muslim female employees are
exempted from this compulsion. As far as the behavior of the people at AMEX is concern, it can
be stated that they are highly formal, well-mannered and high context people. They give value to
each and every word of not only their customers but also their employees.

Clients’ Confidentiality
It is the responsibility of all the employees not to lose the secrets of its clients to anybody in any
case. The violation of this code of conduct may lead to a very severe action even to termination.
The reason being, the client may not only withdraw his account from the bank in that case but it
will also a big blow to its reputation and image in the market.

Integrity & Business Ethics
The employees are supposed to be sincere and ethical enough to abide by the rules and
regulations made by the top management. They are not expected to lose ethics even if the deal is
going to give a million-dollar profit to the bank.
BENEFITS GRANTED TO EMPLOYEES
The employees are well motivated due to an exceptionally well environment, benefit program
and the reputation of the organization. The employee benefit program includes the following:

Provident Fund
The provident fund is given to each and every employee at the routine retirement of that
employee according to the pension fund rules approved by the Government of USA. This
probably is the biggest advantage that no other multinational might be doing.

Overtime
The overtime allowance is given to every employee who is putting some extra effort during the
off hours. However, this does not apply on the lazy employees who could not complete their
routine work during normal office hours. The overtime allowance is paid in accordance with the
applicable US labor laws.

Cash Allowance
Salary at Amex is split to two main parts with the view to optimize the tax effectiveness. These
parts are the normal salary and the cash allowances. It is only the basic salary, which is exposed
to the direct taxes. Following are the various cash allowances.
1. House Rent Allowance

House rent allowance is the part of salary of each and every employee and is given at the rate of
45%. The house rent is, however not given to those employees who are living in bank
accommodation or in leased accommodation.

2. Transportation Allowance

The transportation allowance is given to all the confirmed staff members at the rate of 10% of
their basic salary. The employees using bank cars however, are deprived of this allowance.

3. Utility Allowance

It is also given at the rate of 10% of the basic salary and is given to all the employees no matter
what status they occupy in the bank. The confirmation of the staff is however the basic condition.

Medical Benefit:

This is something like an exceptional benefit given at the American Express Bank. It is divided
into two parts, the staff health care and the group medical insurance.

The group insurance provides the employees with the facility to use Rs. 30,000/- at most for any
sort of illness after being admitted at any hospital in Pakistan. This amount of Rs. 30,000/- is in
addition to those daily medical payments, which are paid when some employee or family
member of that employee is admitted in the hospital. These daily payments are of Rs. 800/day
for the maximum of 31 days. .

The second part of the medical benefit, i.e. staff health care, is something in addition to the
medical group insurance. The staff health care gives you the facility to draw upto Rs. 1,500/- on
presentation of bills, for each family member if he or she is ill but not admitted to the hospital.
The employee can draw up to Rs. 6,000/- for himself if he is ill on presentation of bills.
Staff Programs

In addition to the employee benefit programs and other motivation schemes, Amex provides a
package of other benefit programs with the name of “Staff Programs”. These various programs
include following facilities for the employees at the Amex.

v Loan Program for Staff

v Travel Benefits

v Staff Social Committee

v Educational Cash Award
v Long Service Award

v In-Country Relocation Policy

MOTIVATION OF EMPLOYEES

For purpose of motivating employees Amex Company has the following reward system.

REWARD SYSTEM OF COMPANY

Employees or their supervisor nominate them for getting award. Nominations are reviewed on
quarterly basis by programmer’s regional selection committees worldwide.

REGIONAL AWARDS

There are two types of Regional awards.

® Great performer
® Honorable mention.

GREAT PERFORMER AWARD

The great performers programme recognizes and rewards employees who deliver outstanding
service to external customers above and beyond their job responsibilities and who meet the
programme’s selection criteria great performer must meet four or more of selection criteria.

Winner in this category receives a congratulatory letter from selection committee and recognition
from his Manager and colleagues. In addition we receives us $ 500 with a certificate and an
engraved award.

HONOURABLE MENTION

The honorable mention category recognizes employees who provide exceptional assistance to a
customer within parameters of their job responsibilities.

He has receives a congratulatory letter and us $ 50 with a certificate.
SELECTION CRITERIA FOR BOTH AWARDS
Following is the selection criteria of committee:

® Customer need i.e. customer’s problem is such kind that it needs special service.
® Employee has job knowledge and ability of judgement.
® Did employee take ownership of problem.
® Ingenuity that is did employee demonstrate exceptional creativity or resourcefulness sacrifice.
® Quality improvement that is did employee’s performance result in setting higher standards of
customer service.
SELECTION COMMITTEES

There are five regional selection committees.

« Latin America
« Canada
« Europe
« Africa
« Japan/Asia

GRAND AWARDS
Only employees who are selected as great performance become eligible for annual grand awards.
The worldwide governing committee meets annually in December in New York City to select
grand award.

Winners receive a four day all expenses paid trip for two persons to New York City and
Company recognition. In addition he receives US # 2500 a platinum lapel pin and a certificate.

ELIGIBILITY FOR REWARDS

• All nominations must be signed by employees Manager, employees who work full time or part
time for Amex Company are eligible for award.
• Nominations must be received awards within one year of rendering service to customers.
CHAPTER NUMBER 7

ANALYSIS

During my internship in American Express Bank I analyzed the bank from organizational and
marketing point of view. I did this analysis on the basis of personal observation and judgment.
During six weeks of my internship I studied the organization in deep detail and thoroughly
examined its various departments and their operations.

Here I am giving my analysis in SWOT form. I tried to use my keen observation in order to find
the strengths, weaknesses, opportunities and threats. As it is very difficult for an internee to
discuss with the employees of any organization about its weaknesses, moreover they are also not
so much open in telling their strengths and opportunities available to them, as they are afraid of
competitors.

In SWOT analysis here, I am mentioning the strengths, weaknesses, opportunities and threats of
the department of marketing, which is my area of interest and at the same time of the whole
bank, which I could observe during my internship, especially from the management perspective.
STENGHTS.

i. As it is an international and foreign bank so it is enjoying the popularity and credibility of its
name. People especially businessmen who have their businesses expanded all over the world,
feel it trustworthy due to be a foreign and international bank.

ii. The most important facility, it is giving to its account holders, is evening banking. As all the
public sector banks have public dealing time only in the morning, the American Express bank
has the facility of depositing, withdrawing and all other banking facilities even to open an
account up to 5’o clock.

iii. One of important strengths of American Express bank is the “personalized dealing” and
“individual attention” to clients. As in local banks the attitude of employees is not so good, here I
found that each and every client even if he/ she comes without any reference, gets individual
attention.

iv. The packages of Amex, available for its clients are really attractive, some of these are

v Umrah package
v Allianz efu (insurance policy) for its account holders with attractive rates.
v Travel packages
Travel packages are for all over the world as well as with in the country, with discounted fares
and lodgings.

v. Then if you have ATM card of Amex you can get discounts at certain shopping stores and in
certain hotels. Issuance of ATM is without any cost.

vi. Free deliveries of pay orders and demand drafts at home/office, and free issuance, if the client
maintains a minimum average balance of Rs.0.200M in their accounts.

vii. Due to Telebanking, clients can know their balances and other information of their
transactions and accounts on phone.

viii. Due to online banking clients have the facility to operate their accounts from any of the
branches all over the world, where there is the branch of American Express. For example, if the
client has account in Karachi Amex, he can deposit and withdraw cash from Islamabad or Lahore
or from anywhere in the world.

ix. Another important strength of Amex is its worldwide accepted and renowned traveler’s
cheques.

x. Amex cash counter remains open during lunch hour, while other banks stop transactions
during this time. It is only Amex that gives this facility to its account holders.

xi. Unlike other private and public banks Amex has no charges of low balances in the accounts
or for the reactivation of account.

xii. Amex has very good reward and recognition system for motivating the employees.

xiii. The attitude of seniors towards their staff is respectable. If some staff gives some good
suggestion, it is well appreciated and the seniors try to act upon it.

xiv. One of the primary strength of Amex in serving clients is the global network. In all type of
banking, this approach allows them to concentrate on local business and financial institution
helping them to take advantage of their global capabilities.

xv. It is also interesting to note that Amex has brand loyal customers due to its world wide
network of diversified services. The customers are brand loyal even though charges at Amex are
higher than the other banks and despite the fact that it has very little number of products.

xvi. The major strength of Amex is their attitude towards not only their customers but equally
towards their employees, suppliers and manual staff.

WEAKNESSES.

i. The major weakness of Amex is that, it has a few branches; it is very difficult to operate the
accounts especially for those people who have their places of work or residences away from the
single branch in Lahore.

ii. One weakness of Amex is that they do not do much effort to maintain their old accounts. They
only look for new accounts to achieve their pre-set target of the month, and they do not pay
attention to the complaints of old especially relatively small account holders.

iii. As the issuance of Amex credit card facility has been assigned to Union bank, so it gives
impression that Union bank is going to take over Amex, because union bank gives add of Amex
credit card on television and media.

iv. One of the major weaknesses of Amex is its very low degree of advertisement, there is hardly
any ad of it in newspapers or at television, and even there is no single billboard of it on the
roadsides, so a layman is not much familiar about its name.

v. Moreover Amex is not providing other banking facilities, like debit cards, personal loans, or
car financing like other banks.

vi. Amex has restricted to open the accounts of government employees and politicians, so it is
missing the opportunity to increase the number of its account holders by restricting these people

vii. At consumer side Amex has not variety of products, the only new product that it is offering is
KAMIYAB BUSINESS ACCOUNT, so the customers are not so attracted toward it.

viii. This bank has not its own ATM machine due to its small number of branches, and there is
always some kind of fault in the ATM machines at MCB, where the cad holder operates his/ her
card. Many clients come to branch with their complaints regarding faulty machines.

ix. In the personal marketing department I found the problem of space, the cabins of officers
except that of manager are so small that whenever there is rush of clients, the department is
overloaded and looks like a fish market, some clients have to stand and wait for a chair/ their
turn.

x. During the rainy days the Namaz room is filled with water, and it creates difficulty for
employees as well as the entrance looks very chaotic and contaminated, as employees start to
drain out the water after rain, which does not leave good impression on clients.

xi. There is no good facility of lunch in the bank, and the lunchroom is also not so spacious, all
the employees cannot be settled at the same time.

xii. There is no separate Namaz or lunchroom for lady staff working over there.

xiii. The most important Amex weakness is its highly centralized structure. This centralization of
structure is the major hindrance in the way of rapid growth and innovation.

xiv. The tall structure of Amex makes its communication weak from top to bottom. However the
communication within each unit or branch is very brisk and effective.
OPPORTUNITIES.

i. As Amex is changing the direction of banking and moving towards the consumer side so it has
great opportunity to expand in this direction, if it introduces its new products, it will be able to
establish good name in consumer banking.

ii. If Amex tries to solve the problem of low number of branches and does some expansion in the
number of its branches it will surely be able to do good business than today.

iii. Maintenance of old accounts along with opening of new accounts can increase its number of
accounts as well as branch overall deposits.

iv. With increase in advertisement and attractive billboards, Amex has the opportunity of
escalating its business.

v. Amex has the opportunity of expansion in consumer banking; if it introduces other facilities
like car financing, debit cards and other attractive packages associated with opening of account
THREATHS.

i. The bank does seem to have a policy of advertising at a large scale, which may threaten its
future business prospects.

ii. The bank has closed its corporate sector operations and started consumer banking without
much spadework, which may lessen the business and profits of the bank.

iii. The small number of branches of the bank is again a big threat.

iv. As card cards of Amex are issued by Union bank, the people are captivating the impression
that Amex is closing down or Union bank is going to takeover it, so they do not seem inclined to
establish a relationship with Amex.
Chapter number 8

CONCLUSION AND RECOMMENDATIONS

FINDINGS

After completing six weeks of training at American Express Bank, I had a number of different
experiences, after spending six full weeks at the bank; I am able to analyze almost all major areas
of working of the bank

During this period, I found that there are many areas, which requires serious attention and
alteration in regard to overall productivity and operations of the bank on the whole.

Since today’s an age of extremely high and throat cutting competition in every field of life.
Banks especially those that are dealing in consumer banking are not out from this cutthroat
competition. All the banks are struggling to maximize their revenue generation and they
constantly try to excel in the services, which they provide to their ultimate consumers so that
they can achieve better customer loyalty and more perspective of growth.

Same is the situation in Pakistan where recently a number of foreign banks have flooded the
market and they are constantly striving to surpass the other competitors. All of them are trying to
attract the customers by offering new improved and innovated products with better interest rates
and enhanced service facilities.

In the same scenario these financial institution are very conscious about their financial position.
Because more the clients they have more they earn on the money, which is invested by clients.
So all the competition oriented activities of all the banks are focused on the same very objective
of improving the financial condition of the bank through attracting more and more clients.

But after having a detailed analysis of American Express Bank, I have noticed that the bank is
not performing well. As I mentioned in swot analysis that bank is not interested in giving any
kind of advertisement on all types of media, then how can a layman get introduction to this bank.
All its major financial indicators are showing a downward trend. Not a single requisite of finance
is improving.

Moreover the small number of branches of Amex is creating difficulties for its clients as well as
for the bank also in regard of attracting those clients that have their offices or residents far away
than branch. The small number of its product is also a hindrance in its expansion toward
consumer banking as the bank is offering no leasing policies for car, no personal finance
schemes, no debit cards even its credit cards department is allied to Union Bank. Then the ATM
cardholders of Amex are also forced to use the faulty machines of MCB, as Amex has not its
own ATM machines.

The marketing staff of Amex has no clear-cut set of marketing activities; higher staff in regard of
marketing tricks is not training them. The higher staff only gives them a pre-set target of the
month that they have to open the new accounts up to this figure, but they do
not guide them in adopting any marketing strategy, the staff only tried to achieve this target, in
this effort they either use their personal relations or insist on their relatives to open account with
them so that they can able to carry on their job.

But one good thing, which I found in marketing section, is this pay system. Amex is giving the
pay to customer sales person in this way that it becomes an incentive for them.

The pay of CSP’s consists of three portions that are:
v Fixed salary
v Bonus on number of accounts that one CSP has opened in one month
v If the large deposit account of Rs. 5MM that is opened by CSP is remained maintained up to
six month than he gets 0.5% increment.

So due to this pay system employees try to work as efficiently as possible.

The other qualities that this bank has, are its evening banking, Telebanking and on line banking.
Clients feel more convenient due to these facilities. This bank has very good recreation facilities
and friendly atmosphere for their employees. As there is a mango party in summer and
arrangements of high tea or other small function for recreation of the employees from time to
time. The bank also arranges nice farewell parties for leaving employees in these parties bank
and other departments also bestow gifts to leaving employee.

RECOMMENDATIONS

On the view of all the aspects, which I cover in this report, I have the following suggestions

Since this bank I a branch of world wide famous network of AMERICAN EXPRESS
COMPANY which is performing very well in all the related aspects in which it deals, as well as
the performance of American Express in other foreign countries is satisfactory. But Pakistan
branches of Amex is not up to that standard, so in order to save and restore the original name
associated with this organization, it is necessary to do important changes in all the departments
of bank.

These changes must involve complete turnover in all the major areas of the bank such as:
Operations
Consumer banking
The changes under taken for this purpose should be strictly based on the need of improving the
financial condition of the organization. Here I am giving my suggestions in the following points

i. Introduction of new and improved facilities for clients in the consumer banking operations can
improve the situation.

ii. Opening of more branches at convenient location can prove effective for the growth of bank
business
iii. With opening of new braches, the bank should also introduce its own ATM machines. And up
to that time, the bank should try to eradicate the complaints of clients regarding ATM machines
of MCB by taking serious notice of it and discussing this matter solemnly with the
administration of MCB.

iv. The American Express Bank should take over the issuance and marketing of its world famous
credit cards and should perform this function from its own branches. As these cards are well
known around the world so they can help bank in building more clientele through attracting more
customers.

v. There is a need of some training programs, and seminars must be conducted in order to keep
the employees more informed about the latest ways of banking.

vi. The marketing unit must have some kind of strategies and guidelines to work on, as I found
they have no concept of marketing mix or of other promotional strategies. So there is a need of
educating them in this regard.

vii. The bank must do at least some advertisement of its services through media; there is a great
need of advertising this bank. I will suggest the administration of bank to give ads of bank’s
services and products on newspapers at least once in a week, give ads on television during prime
time that is between 7’0 clock to 9’0 at least twice in a week.

viii. There must be attractive billboards of Bank at sides of main roads, so that customers get
attracted and become familiar about bank.

ix. The bank must also consider the proposal of offering the debit cards solemnly

x. There must be some personal finance schemes of bank.

xi. The bank should also take it serious to begin car-financing schemes like other foreign and
local banks in order to remain in competition.

xii. Just for gratifying and happiness of clients: things like bank diaries, ballpoints, and calendars
must be offered to clients.
LIST OF PERSONS INTERVIEWED

NAME OF ORGNIZATION DESIGNATION NAME OF PERSON NAME OF SECTION

AMERICAN EXPRESS BANK LIMIED
(LAHORE BRANCH) Relationship manager M. Osman Tassadaq Personal Marketing
Sales Consultant Samrah Shahzad Personal Marketing
Customer Sales Person Sheryar Mian Personal Marketing
Customer Sales Person Gulraz Rana Personal Marketing
Customer Sales Person Osman Saeed Personal Marketing
Manager Tahira Ali Client services
Assistant Manager Hassan Ali Client services
Assistant Manager Irfan Butt Client Services (lockers)
Senior Assistant Manager Adnan Hashmi Exports/Loans
Assistant Saeeda Exports/ Loans
Assistant Manager Kh. Amir Shabbir Cash
Manager Shamim Ahmad Remittances

Executive Summary

The Banking Companies control Act was promulgated in 1949 and this empowered State Bank
of Pakistan to control operations of banking in Pakistan. State Bank of Pakistan decided to
restrict foreign banks to major cities only where trade activities were carried out with foreign
countries the local banks were encouraged to cover branch network in the Country.

That was why, Pakistan had never been the heaven for the foreign investors especially for the
foreign financial institutions, and however an interesting-finding is the growing trend of local
and foreign investors towards financial institution development in Pakistan. The best example
would include local banks like prime, union, Alfalah, Faysal etc and foreign banks like bank of
Tokyo, ABN Amro, Citi, standard Charter etc. This change of trend is due to the change in
policy of Govt. and State Bank regarding investment mainly in the early eighties. Since then the
banking industry has been growing in Pakistan at relatively faster rate.

I also choose a foreign bank for doing internship and that is American Express Bank, which was
established in Pakistan in 1949 at Karachi. Actually this bank is a part of American Express
Company, which is a word-wide and renowned travel company. Now-a-days American Express
Bank has been conducted its operations through the branches, which are one in Lahore, one in
Islamabad and one is in Karachi. Its Head Office is also in Karachi.

I studied the bank from the marketing perspective. As I spent the six weeks of my internship in
personal marketing department. In addition to the understanding of the work of this Unit, I also
gained much knowledge about the work of other retail departments especially the departments
which I covered are clients services, remittances and Govt. securities, cash and export
department. I learned the work and procedures going on in these departments through
interviewing the staff working in these departments and by gathering any written information
which I got and taking notes of that material.

I found so many good and bad things in the culture of this bank. Their blue box values impressed
me so much, it really represent the business ethics of Amex. But this bank has restricted so many
Islamic Countries, as in Amex before establishing any relationship it is necessary to observe the
United States sanctions.

The clients of Amex are basically financial service institutions and wealthy individual, for
example most of “packages” and “lums” employees have their account opened with Amex. But
as bank is changing the direction of its operation from corporate section to consumer side, so
now in its new offering that is kamiyab Business Account there is no compulsion to open the
account with certain minimum -high balance.
The hierarchal structure of Amex shows that it is following a functional departmentalization sort
of structure. Functional Departmentalization means a method for organizing activities in to
separate units. However the basic structure of Amex can be regarded as “Tall structure”

In Amex there are two types of accounts current and savings account. The duties of personal
marketing department as its name shows is to attract and bring or in other words to persuade
more and more clients to open their accounts with Amex. Approving loan advice for clients is
also the duty of this unit. Client services department has a direct link with personal marketing
department, as to complete the documents and prepare KYC is the duty of personal marketing
and to check the documentation and give the account number is the function of client services.

Moreover all other account related functions for example to close an account, issuance of
cheques books, regular issuance of statements, stop payment notification, issuance of loose
cheques, signature verification and general ledger maintenance, all these functions are of client
service department.

Remittances and Govt. securities deals with all the inward and outward transfers of payments for
example demand drafts, pay orders, preparation and telex transfers are the duties of this
department, it also issues, encashes and pays profit on the SSC’s and DCS’s export department
prepares Letter of Credit advice and deals with all issues related to LC.

American Express Bank has very good reward system for its employees. In addition to this so
many benefits are granted by bank to motivate the employees, so that they can become efficient
workers. Some of these benefits are provident fund overtime, different types of allowances,
medical facilities, loan programme, travel benefits and many more like these.

During my internship I analyzed the strengths, weaknesses, opportunities and threats to this
bank. Its major strengths are having a global network, evening banking, Telebanking, online
banking, personalized services and loyal customers. Its basic weaknesses are small number of
branches low advertisements less number of products and centralized structure of organization.

So in the end I concluded that bank can expand much in consumer side if it succeeds in opening
new branches at suitable locations. Through properly advertising its name bank can also attract
much more clients and by offering new products and facilities like car financing personal loans,
debit cards the business of bank can be improved much. But overall environment of the bank is
quite impressive and most of the employees of bank are efficient and hard-worker.
Internal Advisor’s Internship Evaluation Form:

This is to certify that I have read this report, which is about the American Express Bank and it is
up to required standard.

Other comment:-

Signature of Examiner:

Name;
LIST OF ACRONYMNS

Amex American Express
AEBL American Express Bank Limited
CSP Customer Sales Person
CIB Credit Information Bureau
DSC Defence Savings Certificate
FTO Foreign Terrorist Organization
LIBOR London Iulli Bank Borrowing rate
N.I.C National Identity Card
RM Relationship Manager
SSC Special Savings Certificate
SBP State Bank of Pakistan
SDN Specially Designated National
SDT Specially designated Terrorist
SDNT Specially designated narcotics trafficker
USDB United State Dollar Bond

TABLE OF CONTENTS

Chapter-I
INTRODUCTION OF REPORT.
1.1. Background of study 1
1.2. Purpose of study 3
1.3. Scope of work 3
1.4. Methodology of research 3
1.5. Difficulties in getting date. 4

Chapter-2
INDRODUCTION OF AMERICAN EXPRESS
2.1 History of Amex 5
2.2. Establishment as travelers Company 5
2.3. Establishment of Bank. 7
2.4 Establishment of Bank in Pakistan. 8
2.5 Sanctions of United States 9
2.6 Amex Blue Box values 10
2.7. Clients of Amex. 11

Chapter-3
Organization Charts.
3.1 hierarchical structure 12
3.2 chain of command 12

Chapter-4
Review of literature
4.1 Vision and mission statements 16.
4.2. Management policies. 17
4.3 Infrastructure 20
4.4. Celebration of important events. 22

Chapter-5
Major Departments of Amex (Lahore) 23
5.1. Personal marketing 24
5.2. Types of account 24
5.3. Rates of interest on saving accounts. 26
5.4. Account Opening 27
5.5. Preparation of Kyc. 31
5.6. Approving credit for clients. 32
5.7. ATM card facility 34
5.8. Client services 35
5.9 Cheque book issuance 37
5.10 Closing of Account 38
5.11. Dormant Accounts 40
5.12. Maintenance of General Ledger. 42
5.13 Issuance of loose cheque. 43
5.14 Issuance of statements of accounts. 45
5.15 Remittances and Govt. Securities. 47
5.16 Issue of Drafts 48
5.17 Special Savings certificate. 51
5.18 Defence Savings certificate. 52
5.19 US dollar bonds. 56
5.20 Cash Department 61
5.21 Types of cheques. 62
5.22 Income Clearing 63

Chapter-6
CORPORATE CULTURE
6.1. Corporate Culture 64
6.2 Benefits granted to employees 65
6.3. Reward system 68

Chapter-7
Analysis
7.1. Strengths 70
7.2 Weaknesses 73
7.3. Opportunities 74
7.4 Threats 75

Chapter-8
Findings and recommendations
8.1. Findings 76
8.2 Recommendations 78

List of Tables
i. Normal account rate for deposit up to Rs.10,000,000/- 26
ii. Rupees plus account rates. 26
iii. Names of cities having ATM machines. 34
iv. Information required for issuance of SUSDB. 57
v. Reporting to SBP formats. 57
vi. Rates of return on SUSDB. 58
.

List of Charts.

i. Hierarchical setup of Amex Operation section. 13
ii. Hierarchical setup of Lahore Branch. 14
iii. Hierarchical set up personal marketing department. 15
iv. Issuance of SSC/DSC. 53
v. SSC/DSC encashment 54
vi. Encashment of SSC profit coupons 55
ACKNOWLEDGEMENT
I am very thankful to Allah almighty the most beneficent and merciful who make me able to
complete my internship and to make this report.

This report has been written as a part of my academic course which is assigned to each student
by faculty of administration sciences of Quaid-i-Azam University Islamabad. So that they can
gain practical experience by doing internship and spending their time in some organization
helped much in enhancing their practical abilities of work.

This internship and report writing is very difficult without the assistance of teachers. So I want to
thanks my teachers who make me able to do this work.

I also thankful to whole the staff of American Express Bank, who cooperates with me during my
internship there, especially Mr. Osman Tassadaq and Miss Samrah Shahzad who guided me how
to learn the work of bank and helped me to prepare this report. As they spared their personal time
in providing their personal experience and valuable information related to their field in pleasant
manner, I place on record my special gratitude to both of them.

				
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