hbl internship report

Acknowledgement

My report will remain incomplete if I do not mention the efforts of those people who

helped me in completing this work.

First of all I will thank to my father Waheed Sheikh who got me opportunity to work in

such a prestigious organization, which is well known in the country. I also tribute to my

all teachers who able me to work with experienced persons and enable me to work very

efficiently throughout the period of Internship.

The administration department of HBL helped me in preparing my internship report,

Especially Administration officer Mr. Tanveer Ahmed. The program was organized in

such a way that sufficient time was given to each department according to its

importance. I am really thankful for his co-operation during the internship.

At last, I would like to thank all those persons who helped me in completing this report.

Table of Contents

1. Executive Summary

2. History of Habib Bank a. Mission statement of Habib bank

b. Values c. Objectives d. Milestones e. Financial Highlights f. Types of branches

g. Divisions of Habib Bank h. Branch Network

3. Business Operation

a. Organizational Structure (Organizational Chart) b. SWOT Analysis c. Marketing Strategy d. Competitive Strategy e. Business process analysis

4. Learning as a Student Internee

Roll # 306-1400 B.Com Batch 142

1. Executive Summary

We are living in a time of extraordinary change. The ecological and economic

threat is looming large on the entire sphere of Pakistanis economy. Pakistani firms must

design and make better products and services and should find better ways to market

them. What was once regarded enough is no longer competitive. What were once

limitless resources are now to be used more efficiently. Today an organization is on the

leading edge, or it is on the bleeding edge.

I have learned the lessons perhaps the hardest way, that is, through my

mistakes. I have tried my best to peep into the generic as well as real cumulative

problems faced by the pioneer of banking industry in Pakistan but that degree of

objective analysis proved to be of little use since this bank is firmly entrenched in the

claws of royal bureaucracy.

Several chapters have been inducted in the report but they seem to be very

conventional in nature giving supplementary justification to the fact that HBL is the most

conventional of the conventional bank.

In order to be able to cope with the changing environment it is necessary to have

some practical experience. As the students of Commerce we have to pass through a

series of various managerial techniques. During this practical course we are provided

with an opportunity to learn that how the theoretical knowledge can be implemented in

practical grounds.

I was selected to do my internship in Habib Bank Ltd. Empress Road Branch

Lahore. I worked there for ten weeks & it gave me a greater practical knowledge about

the operations of a bank. In the following pages I have narrated my experience,

observations & all the working activities, which I observed during my ten-week

internship at Habib Bank Ltd, Empress Road Branch Lahore.


2. History of Habib Bank Ltd.

In 1949 (September) U.K. devalued its currency, India followed suit but Pakistan did not.

India said we had contravened the agreement of keeping both currencies at par. We

said we had not done that; India had done it arbitrarily without consulting us. On

October 3, 1949 the two central banks were to announce the new par value of both

currencies but India denied a day earlier. India also froze our trade - balance surplus

that is still an unsettled dispute. India also withdraws the Marwari merchants who were

employed annually for movement of jute crop by financing it. They’re being no jute

industry, prices fell sharply, foreign banks and foreign merchants stood aside and an

agrarian unrest was threatening.

Two Ordinances were, therefore, issued

1. Jute Board Establishment Ordinance &

2. HBL Ordinance dated 08.11.1949

Habib Bank Ltd. was established on November 9, 1949 under the National Bank of

Pakistan Ordinance 1949 in order to cope with the crisis conditions which were

developed after trade deadlock with India and devaluation of Indian Rupee in 1949.

Initially the Bank was established with the objective to extend credit to the agriculture

sector. The normal procedure of establishing a banking company under the Companies

Law was set aside and the Bank was established through the promulgation of an

Ordinance due to the crisis situation that had developed with regard to financing of

JUTE trade. The Bank commenced its operations from November 20, 1949 at six

important jute centers in the East Pakistan and directed its resources in financing of jute

crop. The Bank’s Karachi and Lahore offices were subsequently opened in December

1949. The nature of responsibilities of the Bank is different and unique from other

banks/financial institutions. The Bank act as the agent to the State Bank of Pakistan for

handling Provincial/Federal Government Receipts and Payments on their behalf.

Mr.Ghulam Farooq was chairman Jute Board and Mr. Mumtaz Hassan was chairman

HBL. Until June, 1950, HBL remained exclusively in jute operations, thereafter-other

commodities were also taken-up. After that Mr. Zahid Hussain, Governor SBP assumed


additional charge also as chairman HBL's Board of Directors, and Mr.M.A.Muhajir

became its first M.D.

In 1962 when Mr. Mumtaz Hassan became MD (He had already served HBL for

10 years as its Chairman of government Director), the number of branches had

increased from 6 to 239 and deposits from Rs.5 crore (50 million) to 106 crore (one

billion & 60 million), profit from 3 million (30 lac) to 21 million and the staff increased

from 380 to 7091, as compared to 1949-50. In Dec. 1966 its 600th branch was opened

raising the deposits to 2.31 billion and staff to 14, 963. Up to 1965, the shareholders

had received 225% of their original investment. Now it has more than 21549 employees’

1537 branches and Rs.208283 million deposits.

The Bank has also played an important role in financing the country’s growing

trade, which has expended through the years as diversification took place. Today the

Bank finances import/export business to the tune of Rs.62.17billion, whereas in 1960

financing under this head was only Rs.1.54billion.

The field is being de-layered to improve customer services and enable faster

decision-making. As a result of this de-layering zones have been eliminated and the

numbers of regions have been increased. Organizational hierarchy at the regional level

has been restructured and operational and business activities have been completely

separated. This separation will improve communication, decision-making and promote

teamwork.

For the third consecutive year, the Bank is recognized as the best Bank in Pakistan for

the year 2004 by the prestigious periodical. “The Banker” UK (a subsidiary of Financial

Times Group)

“We’re expanding horizons, reaching out,

Being there and bringing something for everyone.

After all, We are The Nation’s Bank”.


a. Vision

To be the pre-eminent financial institution in Pakistan and

Achieve market recognition both in the quality and delivery

Of service as well as the range of product offering.

Mission Statement

To be recognized in the market place by Institutionalizing a

Merit & performance culture, Creating a powerful &

Distinctive brand identity, Achieving top-tier financial

Performance, and Adopting & living out our core values.


http://www.nbp.com.pk/About_Us/CoreValues.htm

b. Values

HBL aim to be an organization that is founded on…

a. Growth through creation of sustainable relationships with our customers.

b. Prudence to guide our business conduct.

c. A national presence with a history of contribution to our communities.

HBL shall work to…

Meet expectations through Market-based solutions and products.

Reward entrepreneurial efforts.

Create value for all stakeholders.

HBL aim to be peopling who…

Care about relationships.

Lead through the strength of our commitment and willingness to excel.

Practice integrity, honesty and hard work. We believe that these are measures of

true success.

HBL have confidence that tomorrow we will be…

Leaders in our industry.

An organization maintaining the trust of stakeholders.

An innovative, creative and dynamic institution responding to the changing needs

of the internal and external environment

c. Objectives

Strong emphasis has been laid upon training of branch officers to better equip them for

marketing of retail banking products. Initiatives on similar lines are being launched for

the SME sector. In future HBL is going to introduce modern banking services to keep

pace with the competition and more important our customer needs. These are as

follows:

Debit cards

Internet banking

Call centers

Mobile banking


d. Milestones

“Best Emerging Market Bank from Pakistan” for the year 2005 ‘Global Finance’

USA, May 2005

HBL is one of the “Top 100 Banks of Asia” ‘Euro money’ UK, March 2005

Bank of the year 2001, 2003&2004 for Pakistan ‘The Banker’ financial times

Group UK.

Best Foreign Exchange Bank in Pakistan ‘global Finance’ USA, March 2004

Amongst Top 1000 Banks in the world and Number 1 in Pakistan ‘the Banker’

Financial Times Group UK, July 2005


e. Financial Highlights


Performance at a Glance


Future Outlook

The 2004 results depict the success of the bank’s restructuring initiatives that were

aimed at streamlining of domestic operations and empowerment of the field to facilitate

decision-making, teamwork and communication. HBL now feel better positioned to

pursue its drive for diversification of revenue base to preserve its margins and ensure

optimum returns for its stakeholders. These results have been possible due to the

commitment and dedication of its staff. HBL express its appreciation to the bank’s

valued customers and the regulators for their confidence as HBL consolidate its position

as the “Nation’s Bank”.

f. Types of Branches

There are a lot of different branches of Habib Bank Ltd. We explain them one by

one.

There are main branches in every city. In one city there is only one main branch,

it is directly under the zonal office.

Then there are commercial branches. These are the ordinary branches and are

in the commercial areas such as the Mall Road Branch.

The Industrial Branches are exclusively in industrial zones.

There are also Residential Branches. These are exclusively in residential

colonies.

Another type is the Mixed Branch such as civil secretariat branch. Every kind of

work is done.


There are also Project Branches created for specific purposes i.e. the project and

are at the site.

Another unique type is the Model Branch. No other bank in Pakistan has these.

In these branches the officers do all the work. Even the officers sit on the

counters. Model Branches are in Karachi, Lahore and Islamabad.

g. Divisions of Habib Bank

In order to perform all the functions, the Habib Bank Ltd. has made some divisions,

which perform some specific functions. Following are the divisions:

Credit division

The main function of this division is to make the credit policies, and also to do credit

ceiling, which means the maximum amount of credit that can be given to a certain client.

This division also looks for the agricultural and small loans. It also considers the cases

of right off i.e. bad debts.

Corporate credit Division

The major function of this division is to handle the big loans and industrial financing,

I.B.R.D. It also does the evaluation of credit ceiling policy devised by the credit division.

International Division

This division has to look after the administration of Habib Bank Ltd. outside

Pakistan. It takes care of all the affairs about the advances given outside, the

management of the branches of the bank outside Pakistan, the posting of employees

outside Pakistan etc.


Recovery and Litigation Division

This division comes into operation when recovery of advances given becomes

difficult or impossible. It is the job of this division to decide whether to go court against

the client or not.

Audit and Inspection Division

The major function of this division is to carry out the inspection of rules and policies.

It also inspects the books of accounts, whether they are kept rightly or not.

Administration Division

This division consists of two wings the personnel wing and establishment wing.

The personnel wing concerns with employee welfare and administration. It looks after

things like rules relating to the administration of employees, the medical bills etc. There

is also a disciplinary cell, which is for punishments if an employee does something

wrong. The establishment wing has a main function of controlling the debt stock i.e.

furniture, transport facility, stationary, sports portfolio, security arrangements, and staff

welfare.

Research Corporate Planning and Human Resource Development Division

Their main job is to do human resource management. For this purpose there are

staff colleges in Pakistan. There are four of them. They give training to employees

outside organization and also outside the country. In 1998 Habib Bank ltd. staff colleges

have trained about 7992 employees out of which 321 were executives 5553 officers and

1878 other staff. Outside Habib Bank Ltd. they trained 128 executives, 113 officers and

2 other staff. They have their own staff and also engage faculty from Punjab University

and LUMS.

Engineering and Maintenance Division

The job of this division is maintenance of buildings, construction of projects, project

designing. The head of this division is an engineer who has designation of executive

vice president.


Finance and investment division

It looks after the accounts, investment in resources and decides where to allocate

the surplus funds.

Customer Service division

The main job of this division is to manage the opening and closing of branches,

Islamic policy, then there is a complaint cell where the customer makes the complaints if

they are not treated well. This division also accepts Hajj applications. This division is

very important as it directly concern the customers who are the ones to make the

deposits, which the bank invests.

Business Promotion and Marketing Division

It concerns the marketing and selling of the policies and interest rates of National

Bank of Pakistan through advertisements on television or in the papers etc.

Law Division

This division consists of an executives committee and an evaluation committee.

Their job is documents evaluation and they give legal opinion to recovery and litigation

division also.

Computer Division

This division does data processing through computers and develops control

systems. All these divisions perform their functions through the branches and they are

located at the head office in Karachi.

Treasury Division

HBL boosts the banking sector’s largest treasury operation by virtue of being the

principal bank for handling the exchequer’s business. Facing the current competitive

interest rate environment, the bank has felt the need to enhance its asset yield through

the use of derivative products. The bank recently executed a Quanta Interest Rate


Swap aimed at providing cross currency interest rate hedge for one of its prime clients.

This is a watershed, being the first such transaction to have been successfully launched

in Pakistan and will serve as the foundation stone for the promotion of derivative

products.

Information Technology

HBL has undergone a paradigm shift by synchronizing the adoption of technology

with product development as they view it as a tool for optimizing customer satisfaction.

Round the clock payment of utility bills in important cities is now in place and branches

covering 85% of the bank’s business will be fully automated on a real time basis. While

the “One-Link” ATM switch sharing arrangement will serve to enhance the 24/7 banking

facility available to our customers, HBL is expanding its owned ATM base as well.

HBL is also inviting local and international software solution providers for the supply,

implementation and maintenance of the Core Banking Application software for its

domestic and overseas branch banking operations. In addition to the Core Banking

Application it is essential to understand the role of HBL as a major collection agent for

the Government of Pakistan with over 34 different types of receipts and disbursements

done through 1189plus branches of the bank. On an average the bank has

approximately 1.5 million transactions per day for approximately ten million customer

accounts across Pakistan. The Project includes computerization of Trade Finance,

Retail, General Ledger / Finance, Investment Banking, Corporate Banking, National

Investment Trust System, Litigation Monitoring, Credit and Risk Management System

and Card Services.

Compliance Division

HBL continually strive to adopt the best corporate governance practices to safeguard

the interests of our depositors, customers and shareholders. They have substantially

intensified the scope as well as frequency of our internal audit operation while


employees are encouraged and rewarded for compliance with the high ethical

standards that are been set.


Function of HBL as a representative of State Bank

Collection of cheques and bill of exchange for its customers.

Paying insurance premium, rent or other obligations of the customers.

Collecting interests due, dividend, pensions and other sums due to customers.

Transferring of money from place to place.

Acting executors, trustees for the customers.

Providing safe custody and jewelry, documents or securities.

Issuing of travelers cheques and letter of credit to give credit facilities for travel.

Purchasing shares for the customers.

Accepting bills of exchange on behalf of customers.

Undertaking foreign exchange business.

Furnishing trade information and tendering advice to customers.

Formulating operation policy guidelines for the banks.

Laying down performance criteria for banks and taking steps for ensuring their

observance.

Evaluating the performance of the banks in the context of operational guidelines

issued to the banks.


Determining the areas of coordination of the banks.

Formulating schemes under section of the act.

Making recommendations to the federal government for the appointment of the

president and members of the executive board.

Analyzing and appraising financial statement including balance sheets and profit

and loss accounts of banks and appointment of auditors of the bank.

Conducting such surveys, inquiries and appraisals as may be necessary for the

purpose of this act.

Exercising and performing such powers and functions of the federal government

under the act and such other functions as the federal government may assign to

it.

Establishing a research department or conduct banking research and in

particular study overseas banking operation and problems of the agricultural

financing.

Establishing a central training institution for improving bank services.

Coordinating the planning of the operations of nationalized commercial banks,

and exercising general overall checks on the cost of their operations.

Appointing lead banks and to apportion share of advance among the banks in

respect of consortium loans financed by the nationalized commercial banks only,

in accordance with resource availability of each bank.


Watching the progress of the implementation of the rulings made in State Bank Annual

Inspection Reports and the remedial and corrective measures taken by the banks with a

view of removing imbalances.

h. Branch Network

USA Wall Street New York, UN Plaza New York Washington D.C. and

Chicago.

Egypt Cairo

Bahrain Manama

Bangladesh Dhaka

U.K. London Manchester, Glasgow, Bradford, Edinburgh, Sheffield,

Birmingham & Knightsbridge (London).

France Paris

China Beijing (Rep. Office)

Uzbekistan Tashkent

Saudi Arabia Bank Al-Jazeerah Branches.

Germany Frankfurt

Hong Kong Hong Kong & Kowloon

Japan Tokyo & Osaka

Korea Seoul


Branch Network Growth of HBL

Year Total Branches

1950 17

1951 29

1952 40

1953 52

1954 65

1955 67

1956 73

1957 85

1958 105

1959 129

1960 156

1961 194

1962 239

1963 330

1964 450

1965 519

1966 618

1991 1421

1997 1468

1998 1434

1999 1434

2000 1375

2001 1245

2002 – 2006 more than 1537


3. Business Operation:

A. Organizational Structure (Organizational Chart)

The structure of HBL is shown in the organizational chart. As the chart shows the top

governing body of Habib Bank Ltd. is the board of directors. The board of directors

elects a president who then heads the executive board of directors, which comprises of

provincial chiefs and division heads etc.

Board of Directors

The board of directors is the supreme governing body of HBL. It comprises of a

government representative, Pakistan Banking Council Nominee, Nominee of corporate

sector and three directors from HBL.

Executive Board of Directors

The Executive Board of Directors comprises of the four provincial chiefs, the three

directors from Board of Directors, and the division heads. These people run the

organization. They are answerable to the president and the president is answerable to

the Board of Directors.

Structure of a Provincial Office

A provincial chief heads a provincial head office. As the organizational chart shows that

under a provincial head office there are regional offices. In Punjab there are about nine

regional offices. Under each regional office there are two or three zonal offices and

under each office there are fifteen to twenty branches.


A. Organizational Chart

PRESIDENT

SENIOR EXECUTIVE VICE PRESIDENT

GRADE 22

EXECUTIVE VICE PRESIDENT

GRADE 21

VICE PRESIDENT

GRADE 20

ASSISTANT VICE PRESIDENT

GRADE 19

GRADE I OFFICER

GRADE 18

GRADE II OFFICER

GRADE 17

GRADE III OFFICER

(GRADE 16)


Organizational Structure


Manager CreditProcessing

Manager Credit Operation

Chief Operation anager (CRA)

Chief Manager

Manager FEX* Manager JB* Manager Admin

ManagerCompliance

FEXExportImportRemittanceF/C A/C

InquiryDepositsBillsClearingUtilitiesAccountsCash/ChestGovt. Collection

ReconciliationDispatchDead StockSecurityStaff Welfare

Audit /InspectionTo sign all Br. Returns Money Laundering .etc

[Sections] [Sections] [Sections]

*FEX Foreign Exchange*JB Journal Banking

25

B. (SWOT) Analysis

Strengths

HBL one of the largest financial institutions of Pakistan with eight million of customer

base HBL holds 24.6% share of time and demand deposits in the country. Local

currency deposits comprise 67% of bank's total deposits while foreign currency

deposits account for the rest.

HBL has an extensive domestic branch network of 1400 (according to the latest

data) branches located all over Pakistan. The Bank also has a presence in 19

international locations including the USA, United Kingdom, Europe and the Far East.

HBL's total assets stood at Pak Rs.370 billion on December 2000. This included total

earning assets of about Pak Rs.268 billion with gross loan portfolio of Pak Rs.140

billion. The bank also has an investment portfolio of Pak Rs.91 billion, which

comprises treasury securities, corporate bonds, shares and other securities.

HBL cash provision as percentage of non-performing loans equal to 60% this

coverage factor for the non performing loans is the highest amongst the nationalized

commercial bank.

HBL is working as right arm government of Pakistan as it is responsible for all claims

of government for recovery as well as payment. All depositor of HBL are in relief that

their money security is guaranteed by government of Pakistan.

It acts as an agent of the Central Bank wherever the State Bank does not have its

own Branch.


Weaknesses

HBL staff especially at lower considers their work as burden. They usually waste

time in other task a part in performing their duty. Using government property for

there own need. They are reluctant to accept change brought by latest restructuring

efforts.

The general out look and interior layout of branches are not as required according to

modern banking

HBL bearing up large burden in running those branches, which are not producing

any income but keep on adding expenditure.

HBL is relying on its traditional sources of income it has not taken benefit from

innovation in banking like introducing retail banking or consumer banking and using

any type of scheme to generate more deposits and producing more advances.

HBL is far behind in offering modern banking facility like automated teller machines

then other commercial bank in Pakistan as only eighteen branches in all over

country have this facility.

HBL has only 55% on line branches. While from remaining branches data gathering

is time consuming, and not fool proof. Quantum of settlement within different

branches is pending because of this updating daily record is becoming very difficult.

Customers have to follow long lengthy procedure for opening of account as well

applying for loans which discourages most of the people to invest in HBL.

In HBL, most of the time merit not has importance in hiring of employees. Such

practices are black spot on the face of bank and resulted big losses and fraudulent

acts by HBL own employees.


Opportunities

Reorganizing efforts going on in the HBL has open many opportunities for HBL to grow.

HBL current management has boarder vision. They have taken steps to improve

customer services, streamline internal procedure and creating a delectating climate for

technology initiative.

To achieve above mention objective they have created operation group

Starting of the retail banking initial working.

Setting of target for of making at least 300 branches country wide on line.

Closing of all those branches, which are burden on HBL.

Management to offer specialized services to major corporate including advisory and

debt syndication introduces the concept of relationship manager.

Comprehensive training programs has been develop to up grade the core banking

skills of the existing staff as well as integrate high quality hiring.

To improve the motivation of staff a merit-based culture is being promoted. Through

overhauling the manpower recruitment preservation and performance appraisal

system.

These actions taken by current management provide a great opportunity for HBL for

making it future prosper and can make HBL not less than any modern commercialize

bank in Pakistan.


Threats

Following are the major threats which national bank of Pakistan is facing:

Major threats HBL facing is from its competitor especially from denationalized

commercial bank. In which MCB is on the top of the list, The Bank provides 24 hour

banking convenience with the largest ATM network in Pakistan covering 15 cities

with over 100 ATM locations.

Retail banking and consumer banking resulting in the products such as credit cards,

housing finance and automobile finance lending to small individual consumers, and

purchases of automobiles, housing, and consumer goods are generally made on a

cash basis. These are causing another threat, if not counter will result in significance

loss of customers.

Recently banks and other financial institutions have introduced innovative schemes

to attract deposits, like gift cheque scheme by MCB. These schemes offer prizes on

short and long term fixed deposits, through lucky draws.

Now banks are using technology which covers the distance no matter how far away

any one, through a satellite based, on-line real-time banking system and by offering

telephone banking, electronic funds transfer, E-Banking and other modern facilities.

C. Marketing Strategy

The marketing strategy of HBL can be foreseen by segregating it according to the 4 P’s

of marketing.

1 – Product

2 – Price

3 – Place

4 – Promotion


1 – Products and Services Provided by HBL

HBL Advance Salary

10 month salaries in advance (certain conditions apply).

Minimum documentation.

Repayable in 5 years.

No processing charges; no collaterals, no guarantees, no insurance.

Mark-up charged at 11% per annum on reducing balance method.

HBL Cash n Gold

Facility of Rs.5000 against 10 Gms of gold.

Mark-up 11% per annum.

No maximum limit of cash.

Repayable after one year.

Roll over facility.

No penalty for early repayment.

HBL Kisan Dost

Loans available for the farmers for production, development purposes, for

purchase of tractors, for installation of tubewells, for purchase of agricultural

implements, micro loans, for godown construction, for construction of fish pond,

for livestock farming, for milk processing, for cold storage, bio-gas plants etc.

Mark-up 11% per annum.

Loans available at the farmer’s doorsteps.

Agricultural experts to guide farmers.

Loans available against agricultural passbooks, gold ornaments and paper

security.


HBL Services

Demand Drafts

If you are looking for a safe, speedy and reliable way to transfer money, you can now

purchase HBL’s Demand Drafts at very reasonable rates. Any person whether an

account holder of the bank or not, can purchase a Demand Draft from a bank branch.

If you are looking for a safe, speedy and reliable way to transfer money, you can now

purchase HBL’s Demand Drafts at very reasonable rates. Any person whether an

account holder of the bank or not, can purchase a Demand Draft from a bank branch.

Letters of Credit (L.C)

HBL is committed to offering its business customers the widest range of options in the

area of money transfer. If you are a commercial enterprise then our Letter of Credit

service is just what you are looking for. With competitive rates, security, and ease of

transaction, HBL Letters of Credit are the best way to do your business transactions.

Traveler’s Cheque

Negotiability:Pak Rupees Traveler’s Cheque are a negotiable

instrument

Validity: There is no restriction on the period of validity

Availability: At 700 branches of HBL all over the country

Encashment: At all 400 branches of HBL

Limitation: No limit on purchase

Safety: HBL Traveler’s Cheque are the safest way to carry

our money


Pay Order

HBL provides another reason to transfer your money using our facilities. Our pay

orders are a secure and easy way to move your money from one place to another. And,

as usual, our charges for this service are extremely competitive.

Mail transfers

Move your money safely and quickly using HBL Mail Transfer service. And we also

offer the most competitive rates in the market.

Foreign Banking

To facilitate its customers in the area of Home Remittances, HBL has taken a number of

measures to:

Increase home remittances through the banking system

Meet the SBP directives/instructions for timely and prompt delivery of remittances

to the beneficiaries


New Features

The existing system of home remittances has been revised/significantly improved and

well-trained field functionaries are posted to provide efficient and reliable home

remittance services to nonresident Pakistanis at 15 overseas branches of the Bank

besides Pakistan International Bank (UK) Ltd., and Bank Al-Jazira, Saudi Arabia.

Zero Tariffs: HBL is providing home remittance services without any charges.

Strict monitoring of the system is done to ensure the highest possible security.

Special courier services are hired for expeditious delivery of home remittances to

the beneficiaries.

Short term Investments

HBL now offers excellent rates of profit on all its short-term investment accounts.

Whether you are looking to invest for 3 months or 1 year, HBL’s rates of profit are

extremely attractive, along with the security and service only HBL can provide


Equity Investments

HBL has accelerated its activities in the stock market to improve its economic base and

restore investor confidence. The bank is now regarded as the most active and

dominant player in the development of the stock market.

HBL is involved in the following:

Investment into the capital market

Introduction of capital market accounts (under process)

HBL’s involvement in capital markets is expected to increase its earnings, which would

result in better returns offered to account holders

Agricultural Finance

HBL provides Agricultural Finance to solidify faith, commitment and pride of farmers

who produce some of the best agricultural products in the World.

Agricultural Finance Services:

“I Feed the World” program, a new product, is introduced by HBL with the aim to help

farmers maximize the per acre production with minimum of required input. Select farms

will be made role models for other farms and farmers to follow, thus helping farmers

across Pakistan to increase production.

Agricultural Credit:

The agricultural financing strategy of HBL is aimed at three main objectives:-

Providing reliable infrastructure for agricultural customers

Help farmers utilize funds efficiently to further develop and achieve better

production


Provide farmers an integrated package of credit with supplies of essential inputs,

technical knowledge, and supervision of farming.

Agricultural Credit (Medium Term):

Production and development

Watercourse improvement

Wells

Farm power

Development loans for tea plantation

Fencing

Solar energy

Farm Credit

Production Loans

Working Capital and Short Term Loans

Medium term loans and Capital Expenditure Financing

Loan Structuring and Syndication

HBL’s leadership in loan syndicating stems from ability to forge strong relationships not

only with borrowers but also with bank investors. Because we understand our syndicate

partners’ asset criteria, we help borrowers meet substantial financing needs by enabling

them to reach the banks most interested in lending to their particular industry,

geographic location and structure through syndicated debt offerings. Our syndication

capabilities are complemented by our own capital strength and by industry teams, who

bring specialized knowledge to the structure of a transaction.


Cash Management Services

With HBL’s Cash Management Services (in process of being set up), the customer’s

sales collection will be channeled through vast network of HBL branched spread across

the country. This will enable the customer to manage their company’s total financial

position right from your desktop computer. They will also be able to take advantage of

our outstanding range of payment, ejection, liquidity and investment services. In fact,

with HBL, you’ll be provided everything, which takes to manage your cash flow more

accurately.

International banking

HBL is at the forefront of international banking in Pakistan which is proven by the fact

that HBL has its branches in all of the major financial capitals of the world. Additionally,

we have recently set up the Financial Institution Wing, which is placed under the Risk

Management Group.

The role of the Financial Institution Wing is

To effectively manage HBL’s exposure to foreign and domestic correspondence

Manage the monetary aspect of HBL’s relationship with the correspondents to

support trade, treasury and other key business areas, thereby contributing to the

bank’s profitability

Generation of incremental trade-finance business and revenues


1 Link ATM Network

HBL has joined 1 Link ATM Network, linking it to the endless ATM Banking

opportunities. “1Link is the ATM Network that works for you”. Today marks the

formation of a formidable banking technology network - 1 Link. Eleven banking powers

bring HBL to the largest nation wide ATM Network that provides reliable 24-Hours

access to cash. ATM Network supports transactions of following banks: Bank Alfalah,

Union Bank, Allied Bank Limited, Askari Bank, Habib Bank, ABN Amro, Soneri Bank,

Bank Al Habib, UBL, PICIC commercial Bank at the following places:


2 – Price

In banking sector price is meant to be the interest rate bank is charging from the

customer. The interest rates charged by HBL is the cheapest as compared to any other

bank working in Pakistan. They are using the Market Penetration Strategy in terms of

pricing.

3 - Place

It has been a known fact country wide that HBL is the Nation’s Bank. It has the most

enormous network of branches all over the country, which exceeds over 1400, and they

also give an image to the customer of delivering goods at the doorstep. In this case they

are using Market Push Strategy.

4 – Promotion

They are working right from the beginning of banking sector in Pakistan. So, they don’t

need promotion strategies like the other banks working in Pakistan but without letting

people know about your product will cease survival. So, they have been continuously

promoting the bank through mediums of electronic, print and Internet.

Moreover it’s a bank of masses where everyone can open his/her account and no credit

limit is required as they have a motto of facilitating each and everyone. This is the only

reason fro which they have opened branches in places where no other bank exists for

example a district like Pind Dadan Khan has a branch of HBL and a single branch of

any bank existing in last village of Pak-China border is of HBL.

D. Competitive strategy

Banking industry in Pakistan is progressing in leaps and bounds and with these drastic

increases in number is raising the bar of competition amongst the banking sector. Last

year the better half of the foreign direct investment was in the banking sector. To stay in

this incredible amount of pressure of competition and delivering the goods on the

deadlines to obtain customer satisfaction and loyalty is the need of the hour and HBL


has always proved itself in distant times by providing the cheapest interest rates on

loans given to the corporate world, employees of government institutions in terms of

Advance Salaries and to farmers made the bank to stand tall in the competition and

contributed a lot to the competitive strategy of the bank. They are mainly using the

Market Penetration Strategy to attract customers.

E. Business Process Analysis

The only problem bank is facing is the hierarchy at the top level as all the major

decisions regarding marketing plan, financial advices and human resource policies of

the bank are to be taken by the S.E.V.P (Senior Executive Vice President Mr. Tariq Taj)

which creates a bit of bottle neck situation in case when the S.E.V.P is not present.

However, they have appointed a lot of V.P’s (Vice President) and A.V.P’s (Assistant

Vice President) to manage daily operations. Through the following diagram that

bottleneck is shown.

Bottle neck diagram


Marketing

Finance

Human resource

All main decision are made by top management (S.E.V.P) which slows over all efficiency

39

4. Learning as an internee

I joined HBL Empress Road branch. First day I reached the bank at start of official

working time &I reported to the manager who introduced me about functioning of branch

and its staff. HBL Empress Road Branch is a commercial branch, so during ten weeks

of my internship, I worked in following departments of bank to seek maximum

knowledge about banking practice and also about management skills.

Management of Branch

Management of HBL that helped me to provide the required data, which includes:

o Mr. Tariq Sheikh

o Mr. Bilal Rafi Butt

o Mr. Tanveer Ahmed

o Mr. Salman Butt

o Mr. Sheheryar Malik

o Mr. Danish Ahmed

o Mr. Emad Shah

General banking Information

First of all, I was asked to work in different sections of general banking. The in charge of

general banking having good command on banking operation. Here I dealt with new

customers who wanted to get information about the branch and willing to deal with

branch. This is very interesting department because here I met people of different types

and deal with them accordingly.

Deposit Department

I worked in this department for 3 weeks. In this department I have two type of work.

How to cash the cheques.

How to deposit cheques/cash.


How to Cash the Cheques

I received the cheques from the customer who wants to withdraw amount and gave him

a token after writing the token number on the cheques. Before doing this following

things must be noted.

The double signature of the customer behind the cheques.

Check the date. If date on the cheques is 6 month later, then cheques can be

accepted. But a post-dated cheque cannot be accepted for payment.

Amount in figures and word. In case of overwriting, alter signature is needed.

After checking these particulars, I stamped the cheque with “pay cash, posted,

signature, verify, stamp”, And then I posted the cheque in ledger, If the cheque is of

amount more than 25000 then withholding tax will also be deducted. The tax is

Rs1/thousand on amount exceeding 25000. If the cheque is more than amount of

100,000 then 2 officers will pass this cheque.

How to Deposit the Cash

If the customers want to deposit amount in form of cash, then he is required to fill

deposit slip in which the customer account #.and amount of cash is mentioned. This slip

is given to cashier with the pre mentioned amount.

How to Deposit the Cheque

If the customer wants to deposit cheques then he is required to fill cheque deposit slip.

The Account No, name of the account holder and the cheques number will be

mentioned on it.

This slip will be attached with the cheque. If the cheque is of same branch then simple

transfer entry will be passed, but if the cheque is drawn on other banks or on other

branches of HBL then cheque will be sent for clearing. The stamp of transfer and

signature verify is stamped on it.


Clearing Department

In this department I have worked for 3 week. Here I learnt how the clearing is made. All

the clearing work is computerized. The clearing cheques and the slips are to be entered

separately in the ledgers. If more than one cheques are attached with slip then first

enter the data about first cheque, i.e. the cheque number, name of the branch of the

bank on which the cheque is drawn, and then enter the other cheque.

When the clearing has been prepared then the next step is to stamp the cheques &

slips with “Clearing Stamp” and state bank stamp. Clearing stamp is to be stamped in

front of cheque & slip while state bank stamp is to be stamped back of check and slip.

Cheques & slips are to be stamped carefully because sometimes clearing has been

returned due to the reason of not properly stamped. After this clearing is to be passed to

the in charge officer who signs on it, and clearing are handed over to the agent before 1

P.M

Reasons Returning Clearing Cheques

Cheque will be returned in the following situations

There is less balance in customer’s account

Difference in amount in words and figures,

Signatures differ

Cheque is post dated

Cheque is out of date

Payment stopped by the drawer

Methods for returning Clearing Cheques

First of all a debit voucher will be filled in which the amount of clearing

cheques will be written.

A memo will be attached to Cheque in which the reason of returning the

Cheque is mentioned. The stamp of transfer and branch is stamped on it.

The bank will keep the debit voucher while memo with the Cheque will be

returned to clearing agent.


The data is also written in a ledge in which all amount and reason of return

is written.

Account Opening Department

Procedure for Opening Account

Here I learn the procedure of opening & closing account. The both accounts (current

account & profit and loss account) have the same opening procedure. Now I briefly

explain the procedure.

First I gave the account opening form to a new customer who is willing to open

an account in this bank.

After this, I briefly explain the requirements of account opening form and told the

customer about the necessary documents to be attached with this form.

Besides these necessary attachments such as identity card photocopy,

photographs of account holder, bank also required the proper introduction of

new account holder by the existing account holder, for the purpose of eliminating

of his factitioness. The customer is required to fill the application form with the

following true information.

o His full name and address.

o Detail of account either single or joint

o NIC’s photocopy

o Introducer’s full name, address, his account number, signatures, his

NIC’s photocopy.

After this, I marked an account number in account opening register; I took the

signature of new account holder on specimen signature card and then entered

his name against the account number.


Procedure of Closing Account

The customer can also close the account. The customer is required to submit an

application for closing the account. Then the account is closed out and the account is

closed out and his balance is paid to him. Chequebook is returned back to bank and the

officer cancels the remaining cheques in the Chequebook.

Bills Collection Department

I spent 3 days of my training in bills collection department. Here I collected the utility

bills of Gas, Electricity, Water & Telephones, Government challans, and income tax

forms slip. After collecting bills Scrolls are prepared against each bill.

After this the next step is to transfer the amount of bills collected by HBL to the

government, e.g. the payment of electricity bills is transferred to WAPDA branch, the

amount of all water bills is transferred to WASA and the amount if telephone bills is

transferred to LDA branch. All the entries of Government and income tax are entered in

Government register. The time of submission of Government is 5’o clock. HBL charges

Rs 2 for the bills of electricity and Sui-gas.

Computer Department

HBL has maintained both computerized and manual work system. Debiting does

manual work, posting each and every transaction in computer does crediting the

accounts in ledgers and computerized work. During my internship I spent 3 days in this

department. This is very risky work, it requires more expertise and there is no chance of

any mistake.

In computerized work, HBL has set different numbers for different transactions, e.g. for

clearing cheques there is separate code number. Similarly for transfer and simple cash

cheques there are different codes. Each cheque is posted in computer before it goes to

the cashier for payment. When cheques or other documents are posted in to the

computer then cheque is stamped with “computer posted” stamp.

After doing all the computerized work transfer scroll is checked, if transfer scroll is

balanced, it means work done is ok, otherwise there will be mistake.


At the end of the day, both computerized and manual work balance will be checked if

the balances tally, then this balance is called the closing balance of this day, and the

opening balance of the next day. If there is any deficiency in amount then the

responsibility will fall upon bank. In case of excess balance, the excess balance will be

transferred to salary account of the bank staff.


Remittance Department

I spent more than 2 weeks in this department. It is a most important and interesting

department. Here I know how the amount is transferred and what the procedure is.

Remittance is the monitory transfer from one place to another place, from one branch to

other branch, and from one country to another country to fulfill the requirements of the

customers by the order of the customer. The following are the main functions of this

department.

1 Demand draft

2 Pay order

3 Telegraphic transfer

4 Mail transfer

Demand Draft

It is a bill made either on demand or otherwise by one bank on another in favor of third

party or by one branch of the same bank or by the head office on a branch or vice

versa.

Issuance of Demand Draft

The amount both in words and figures is written and the applicant has to sign on two

places, which are helpful in case DD is to be cancelled. The applicant then has to

deposit the cash at the counter. The officer in charge at the counter will affix the stamp

cash received at the DD issued form. After the cash has been received the DD will be

issued to him. Each DD has its own register along with name of the party in whose favor

the DD was issued.

Cancellation of Demand Draft

For cancellations customer as to give an application to the bank that the DD is no longer

required and has to sign the proper verification of the signatures will cancel the DD, and

will pass the entry by debiting to main office and crediting party account. The bank will

then issue a debit device to the main office.


Pay Order

It is a local document. It is made for inter city. The procedure of pay order is similar as

to others. The person who wants to transfer his money inter city, is required to make a

pay order. If he is the account holder of bank then he is required to make a pay order. If

he is the account holder of bank then he is required to pay Rs. 50 as the pay order

charges. If the person is not the account holder of that bank then he has to pay Rs. 100

as the charges of pay order.

Issuance of Chequebook

After opening the account bank send a letter of thanks to new account holder, at his

home address within 7 days of application form, for the confirmation of address. On the

other hand if the customer does not operate is account for a long time, then his account

will be treated as Dormant.

Procedure of Issuing Chequebook

After receiving the letter of thanks, the customer is required to fill slip with his/her

account number, chequebook leaves and the signature. The passing officer verifies the

signature of the account holder and chequebook is issued to the account holder after

keeping the record in chequebook register. This is the procedure of issuing chequebook

at first time.

The chequebook carries a requisition slip for the issuance of new chequebook. The

account holder duly signs the slip; bank verifies the signature and chequebook is issued

to the account holder. The Chequebook no is also entered in slip. The account no,

against which chequebook is issued, the chequebook number, name of the account

holder &date of issuance is also recorded in chequebook register and the signature of

account holder will be taken on it.


Issuance of Chequebook to 3rd Person

In case if account holder sends a third person to get his chequebook then the procedure

is as follows,

1 The account holder gives an authority letter to the third party.

2 The account holder verifies the signature of the 3rd person on that authority letter.

3 The bank officers get the signature of that third person to confirm whether he is

the same, that account holder has sent for the purpose of chequebook collection.

4 After verification, bank issues the new chequebook and the bank keeps authority

letter.

Charges of Chequebook

HBL charges Rs 3 per leaf of Chequebook. In case if Chequebook is lost then the new

Chequebook without requisition slip will be issued. In such case bank charges Rs. 100

in addition to Chequebook charges. There are three types of Chequebook of 25, 50 and

100 leaves with charges of 75, 150 and 300 respectively.


In the end I would just like to say that what ever time I have spent in HBL,

Empress Road Branch was the best time I had during my all jobs duration.

I exactly don’t know the reason but I think the main reason behind it is Mr.

Abdullah Masood, my Banking Operation teacher. What ever that teacher told me

and my class fellows regarding banks in class, that’s what I exactly found in HBL.

To be honest, I think this is the only subject that will be helpful to me throughout

my life because this was the total reality and is practice able.


hbl internship report

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