26118207 recommended internship report hbl

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Job Report 1 Habib Bank Limited

ACKNOWLEDGEMENT

No one can say that I am perfect, everyone should admit that without the helpof ALLAH and His people a man cant get anything so I bow my head beforealmighty Allah with gratitude. I am also very much thankful and presents salute tomany individuals who have helped me in shaping this report .I am also very muchthankful to lot of class fellows and contemporary colleagues. I am especially gratefulto Ms. Abeerah who took the time and trouble during the last few days to speak tome about the way this text could be further improved.

I am also very thankful to the staff Habib Bank Ltd. Punjab MedicalCollege branch especially to Mr. Javed Raza (Area Manager & Branch Manager)and Mr. Shehryar Ali (Manager Credit) who provided me an opportunity to workin friendly environment.

It was an honor and pleasure to work with:

Mr. Javed Raza (Chief Manager HBL Punjab Medical college branch)

Mr. Asif Iqbal (Asst. Manager Foreign Trade Department)

Mr.Shehryar Ali (Manager Credit Department)

Mr. Kashif (Head cash Department)

Mr. Maqbool Ahmed Khan(Manager operations)

Ahsen Ali,Roll no:509


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Table of Contents

Description Page No.

Executive Summary 3

Commercial Banking in Pakistan 4

History of Banking in Pakistan 5About HBL Pakistan 8

History and Background 8

Privatization 9

HBLs Mission, Vision and values 9

Board of Directors 10

Management 11

Corporate information 13

SWOT Analysis 15

Operations of HBL & Banking departments 18

A .Account opening department 18

B .Cash department 20

C .Credit department 21

D. Bill clearing department 23

E. Foreign exchange department 24

Products and services of HBL 27

Deposit accounts 28

HBL car loan 29

HBL credit card & Debit card 32

HBL personal loan & Phone banking 34

HBL Banc assurance 35

HBL Corporate banking & Commercial banking 37

HBL zarai banking 39HBL Islamic banking 40

Learnings as an employee 42

Financial Performance of HBL in 2008 46

Ratio analysis of HBL 48

Award and Financial performance in 2008 52

Recommendations 54

Discussing a credit dept. problem 55

Glossary, Bibliography 56

Index 57



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executive summaryEvery student of Master in Business Administration at Government College

University Faisalabad has an essential requirement to do Six to Eight weeks job in

any of the well reputed organization. The purpose of this program is to acquaint thestudents with practical applications of theoretical concepts taught to them duringconduct of their MBA program. But I got job at HBL during my M.B.A so I amsubmitting job report..I joined HBL on 28th day of May,2008 as officer Band-1. Reportstarts with the topic evolution of banking. HBL was the first commercial bank to beestablished in Pakistan in 1947. Over the years, HBL has grown its branch networkand become the largest private sector bank with over 1,450 branches across thecountry and a customer base exceeding five million relationships.

On December 29, 2003 Pakistan's Privatization Commission announced thatthe Government of Pakistan had formally granted the Aga Khan Fund for Economic

Development (AKFED) rights to 51% of the shareholding in HBL, against aninvestment of PKR 22.409 billion (USD 389 million). This report contains informationabout HBLs board of directors, management, mission, vision and values. HBLsoperations are discussed in light of its working department in the branches like cash,clearing, foreign exchange and accounts department and also in light of its servicesand products which it is offering to customers weather they are individual, business,corporate or agriculture field related customers. HBL is currently offering phonebanking, internet banking and various cash management services for the facilitationof its customers. HBLs car to car loan has its own uniqueness in Pakistans bankingsector. HBLs branch network is extended all over the Pakistan which has itscompetitive edge over all other private sector banks in Pakistan.

During the time of my job in Habib Bank Punjab Medical College branchFaisalabad I got the chance to work in all the departments of HBL working there butmy specialization was credit department.. Duties and learning in each department isgiven in this report. Talking about financial performance of the bank in 2008 all thefinancial indicators are showing positive results when the financial performance ofthe bank in 2008 is compared with financial performance of 2007. During 2008 HBLalso won some awards. At the end of this report I have given my suggestion for theimprovement of the bank.

.



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COMMERCIAL BANKING IN

PAKISTAN

The word 'Bank' is said to have been derived from the words Bancus orBanque or Bank. This history of banking is traced to as early as 2000 B.C. Thepriests in Greece used to keep money and valuables of the people in temples. Thesepriests thus acted as financial agents. The origin of banking is also traced to earlygoldsmiths.It was very difficult for Pakistan to build up its own Banking systemimmediately after independence without sufficient resources. Following theannouncement of the partition plan in June 1947 there was a haste movement on theparts of banks to transfer their funds and accounts across the borders. The bankshaving their registered offices in Pakistan were transferred to India. In an effort tobring about the collapse of the new state by the persecuting an international policy of

withdrawal, the Indian bank offices closed quickly. Those banks, which stayed, wereconsidering the winding up of their business. By 30th June 1948 the number ofschedule banks in Pakistan declined from mere scratch.

Today there are more than 7000 branches of commercial banks along with anestablished network of supplementary financial institutions. All this development inthe banking sector is the result of untiring efforts of four decades.

History of Banking In Pakistan

The interesting point which I observed during the span of mine job was thehistorical background of Banking & Financial sector which is the one in which greatimprovement and growth is observed since the formation of Pakistan. For studyingthe growth of this sector we can divide it into three stages, which are as follows:

a) Pre-Nationalization Era

b) Nationalization Era

c) Post Nationalization Era

Pre Nationalization period:

There were only two Muslim banks in Indo Pak before partition; they were.Habib Bank Ltd. (est. in 1941 at Bombay) & Australia Bank Ltd. (est. In 1944 atLahore). All other banks, at that time, were either owned by Hindus or Foreigners.

At the time of partition there were 631 bank branches in area which cameunder Pakistani control. But due to blood shed and violence at large scale, mostlybranches were closed and the disparity can be assessed from the fact that on July1948 there were 195 branches with deposits of Rs.88 crore (880 million) only. Also afactor lagging in Pakistani industry was a central bank of its own, by that timeReserve Bank of India was acting as central bank for both countries and samecurrency notes were used in both territories. But Reserve Bank of India was biasedand Set down Pakistan on many occasions such as the issue of funds transfer etc.

In this period drastic steps were taken in government sector for theimprovement of overall position. The private sector also responded to these changesand some very positive changes were observed. Some of the steps taken by thegovernment in this regard were as under:



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1) Inauguration of State Bank of Pakistan (SBP) on 1st July, 1948.

2) Setting up of National Bank of Pakistan in November, 1949 to control the'jute' export in East Pakistan and to act as agent of SBP.

3) Larger powers were given to SBP through SBP Act (1956) for controllingpurposes.

4) Banking Companies Ordinance 1962 for protection and guidance to banks.

5) Establishment of specialized banks, such as ADBP (1952);

a) HBFC (Nov, 1952);

b) P1CIC (Oct, 1957)

c) IDBP (Aug. 1961);

d) NDFC (Jan, 1973).

These were the steps, which built a strong banking sector in Pakistan. This is

also obvious from the facts that by 1973 there were almost 10 foreign banks wereworking in Pakistan and all over deposit position was around Rs.2300 crore (23,000million). A bird eye view of 5 top banks was as given below:

B) NATIONALIZATION PERIOD

On January 01, 1974 all Pakistani banks were nationalized throughNationalization Act 1974. Under this law all Pakistani banks became a publicproperty. All small banks were merged in bigger banks to create 5 major Pakistanibanks Pakistani banks. These banks were to control by Pakistan Banking Council.There are still controversies about this act of government as whether it contributed insuccess of failure of banks. However the major changes after nationalization were as

follows: Working of banks was extended to under developed areas.

Market expansion for credit and deposits.

Decrease in service level of bank officers.

Decrease in profitability as well.

However the effect of expansion was enormous and it can also be depictedwith the help of table 2 which shows the deposit & branch positions of differentnationalized banks.

BANK POSITION IN 1992Bank No. of Branches Deposits (Rs. In Millions)

HBL 1926 153,431

NBP 1448 128,679

UBL 1684 87,482

MCB 1288 50,013

ABL 750 33,757



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Structure of Financial Sector in Pakistan

Scheduled Banks

(47)

- Commercial banks

- Specialised banks

NBFIs

- Modarabas

- Leasing companies

- Mutual funds

- Specialised financial (DFIs)

- Investment banks

- Housing Finance Companies

Speci alised Banks Commercial Banks

Foreign Banks

(22)

Domestic Banks

(25)


TOTAL 7096 453,362

C) POST NATIONALIZATION ERA

In 1990 the government decided to denationalize all the nationalized

institutes. Some was also suggested in banking sector. For this purpose,amendments were made to Nationalization Act 1974 and two nationalized bankswere privatized. Along with this a permission to open banks in private sector wasalso granted. The rules regarding establishment of new banks and for incomingforeign banks were also relaxed.

The- privatized banks are;

a) MCB taken up by a private group in April, 1991

b) ABL taken up by its own employees in September, 1991.

c) UBL taken up by UAE party in 2002.

d) December 29, 2003 HBL was taken by AKFED

After these changes a large number of private and foreign banks started theiroperations in Pakistan and the present status can be seen from the following figure:



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AboutHabib Bank Limited

HBL was the first commercial bank to be established in Pakistan in 1947. Over theyears, HBL has grown its branch network and become the largest private sectorbank with over 1,450 branches across the country and a customer base exceedingfive million relationships. With a presence in 25 countries, subsidiaries in Hong Kongand the UK, affiliates in Nepal, Nigeria, Kenya and Kyrgyztan and representativeoffices in Iran and China, HBL is also the largest domestic multinational. The Bank isexpanding its presence in principal international markets including the UK, UAE,South and Central Asia, Africa and the Far East. Key areas of operations encompassproduct offerings and services in Retail Banking. HBL has the largest CorporateBanking portfolio in Pakistan with an active Investment Banking arm. SME andAgriculture lending programmes and banking services are offered in urban and ruralcenters. In the UK and GCC, HBL focuses on trade finance and remittances for theSouth Asian Diaspora in addition to basic banking facilities. HBL has always been abank and a brand for the masses, with a history that is inextricably linked with thehistory of Pakistan itself. As it continues to grow, both locally and abroad, it strives toembody its brand personality: honest, approachable, and inclusive. HBL is currentlyrated AA+ (Long term) and A1+ (Short term)*. It is the first Pakistani bank to raiseTier II Capital from external sources.



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HISTORY AND BACKGROUNG

Habib Bank Limited was established by Mr. Ismail Habib (Late) on August 25,

1942 at Bombay. It was the first Muslim Bank of the sub-continent. It wasestablished with a paid up capital of Rs. 2.5 million. At an early stage, the number ofits branches was only 12.

HBL established operations in Pakistan in 1947 and moved its head office toKarachi. Our first international branch was established in Colombo, Sri Lanka in1951 and Habib Bank Plaza was built in 1972 to commemorate the banks 25thAnniversary. With a domestic market share of over 40%, HBL was nationalized in1974 and it continued to dominate the commercial banking sector with a majormarket share in inward foreign remittances (55%) and loans to small industries,traders and farmers. International operations were expanded to include the USA,Singapore, Oman, Belgium, Seychelles and Maldives and the Netherlands.

Privatization of Habib bank

On December 29, 2003 Pakistan's Privatization Commission announced thatthe Government of Pakistan had formally granted the Aga Khan Fund for EconomicDevelopment (AKFED) rights to 51% of the shareholding in HBL, against aninvestment of PKR 22.409 billion (USD 389 million). On February 26, 2004,management control was handed over to AKFED. The Board of Directors wasreconstituted to have four AKFED nominees, including the Chairman and thePresident/CEO and three Government of Pakistan nominees.



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HBLs Vision, Mission and

Values

VisionEnabling people to advance with confidence and success.

MissionTo make our customers prosper, our staff excel and create value for shareholders.

ValuesOur values are the fundamental principles that define our culture and are brought tolife in our attitude and behaviors. It is these values that make us unique and

unmistakable. Our values are defined below:ExcellenceThis is at the core of everything we do. The markets in which we operate arebecoming increasingly competitive, giving our customers an abundance of choice.Only through being the very best in terms of the service we offer, our products andpremises - can we hope to be successful and grow.

IntegrityWe are the leading bank in Pakistan and our success depends upon trust. Ourcustomers - and society in general expect us to possess and steadfastly adhere tohigh moral principles and professional standards.

Customer FocusWe understand fully the needs of our customers and adapt our products andservices to meet these. We always strive to put the satisfaction of our customersfirst.

MeritocracyWe believe in giving opportunities and advantages to our employees on the basis oftheir ability. We believe in rewarding achievement and in providing first-class careeropportunities for all.

ProgressivenessWe believe in the advancement of society through the adoption of enlightenedworking practices, innovative new products and processes and a spirit of enterprise.



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Board of Directors

MANAGEMENT


NAME DESIGNATION

Sultan Ali Allana CHAIRMAN

R. Zakir Mehmood President & CEO

Moez Jamal Director

Mushtaq Malik Director

Ahmed Jawad Director

Sajid Zahid Director

o

Sikander Mustafa Khan Director


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PIC. FROM HBL CORPORATE FROFILE

Management Hierarchy



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DESIGNATIONS

1. PresidentSenior,2. Executive Vice President,3. (SEVP)Senior4. Vice President, 5.(SVP)Vice President,6.(VP)Assistant Vice

President,7.(AVP)Officers,8.Grade1,9. Officer Grade II,10.OfficerGrade III,11.Cashier,12.Clerks

Corporate Information


Chairman

President

Board of

Directors

SEVP

InternationalOperations

SEVP CorporateBanking & Treasury

SEVP RetailBanking &Information

Technology

SEVP Finance, Audit& Administration

SEVP Asset RemedialManagement

SEVP Credit Policy

SEVP Corporate Banking,

financial institute & ProjectFinance


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Head OfficeHBL Plaza

I. I. Chundrigar RoadKarachi-75650, Pakistan.Tel : +92 (21) 2418000 [50 lines]

Fax : +92 (21) 9217511

Registered Office4th Floor, Habib Bank TowerJinnah AvenueIslamabad, Pakistan.Tel: +92 (51) 2872203Fax: +92 (51) 2872205

RegistrarsTHK Associates (Pvt.) Ltd.Ground Floor, State Life Bldg No. 3Dr. Ziauddin Ahmed RoadKarachi, Pakistan.Tel: +92 (21) 111-000-322

WebsitesCorporate website:

www.hbl.comTreasury website:www.hblgtr.com.pkEbank (internet banking):www.hblebank.com

AuditorsKPMG Taseer Hadi & Co.

Chartered Accountant

Global locations

http://www.hblebank.com/http://www.hblebank.com/


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Swot analysis

Strengths

Strength can be defined as an area where a company is best at doingsomething or a feature that puts the company at an advantage in comparison to itscompetitors. HBL enjoys the following strengths:



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HABIB BANK is a well established bank enjoying long history of over 65 yearsof experience and profitable operation.

HBL is the largest private bank in Pakistan now and people trust is very high.

It has the largest branch network among private banks of Pakistan.

HBL has been very effective in controlling costs as it successfully restructureditself after its privatization. During this process more than 1,600 employees

were relieved under a golden handshake scheme and 110 branches wereclosed.

Excellent branches appearance gives an edge to HBL over other banks. HBLhas the ability to bring innovative products and services like personalizedservice, electronic funds Transfer, sophisticated financial products such aselectronic banking, auto-teller machines and evening banking.

The Banks Rupee Traveler Cheques have been market leaders for the pastsix years.

HBLs car to car financing scheme is unique in auto loan segment.

Habib bank is an internationally recognized name in banking services and

products. HBL has forged strategic alliances with international banks for expanding itsnetwork further, both locally and internationally.

Weaknesses

A weakness is defined as an area in an organization where the organization is not asgood at doing something as its competitors or a thing which an organization lacksthus putting the organization at disadvantage in comparison to its competitors.Based on the above definition, HBL has the following weaknesses.

Lack of communication between bank and customers about terms and

condition of products and services. Like centralization of cheque book issuingprocess.

Employees at branch level are not properly motivated to work by heart. Theytake the all routine activities as a boring job.

Most of the employees lack managerial training as they are not properlyeducated. Due to seniority, they have moved up on the hierarchy line toGrade-I, II or III positions having hardly bachelor degrees. This type of seniorstaff cannot apply the modern and innovative techniques of management indecision making.

Mission of HBL is not well defined.

Though HBL is second largest bank in Pakistan, yet the fact remains that it isnot market leader as NBP. Its total assets are always less than NBP totalassets.

Now as it is a privatize bank that is why GOVERNAMENT support to HBLdecreased as it was in past

Opportunities

An opportunity can be defined as a change in external environment which if properlyexploited with the organizational strengths will result in enhanced sales, market

share, or income. Using its strengths, HBL can avail the following opportunities.Opportunities require explanation therefore I have used headings instead of arrowsE-Banking



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Generally speaking, three factors, quickness, easiness and cheapnesshave become the catchwords for the competitiveness and usefulness of all thebusiness operations. Particularly it is commonplace today to say that banking isundergoing a radical transformation. Only those banks that use their technologyresources effectively have the opportunity to secure real competitive advantage inthis fast-changing industry through real product or service differentiation.

High mark up rates Of late markup rates have increased considerably. Presentrates are 4% above KIBOR i.e. 16% appx. High markup rate has decreased theinterest of people in loaning from from banks. Habib bank can increase its income by

offering loan at lower interest rate than other banks.ONLINE BANKING It is doing banking transactions through our home P.C. Thebanks that do business through net have WebsitesSo Habib bank should focusheavily on providing online banking faculties to its customers. Currently it is doing thesame.CORPORATE BANKING TERMINAL (CBT)

Large corporate customers can loginto the bank's database and have access to their accounts/transactions from theirbusiness houses. This facility has still not been started for customers in Pakistan. SoHabib can focus on that.AUTOMATIC TELLER MACHINE (ATM) This system is known as "Any TimeMoney" because it allows customers who have an ATM card to withdraw money atany time from the bank without interacting with human teller.. It allows customers totransact with the bank 24 hours a day and 365 days a year. They allow thecustomers to transfer money to and from accounts to view account information, toreceive cash. It can also be used to deposit cheques and cash into the accounts.

No bank in Pakistan is offering this service currently. So an opportunity exists forHabib bank to differentiate.Rate of return The range and choice of products available & offered by thecommercial banks is limited. Rates of Return / Profits on Deposits are so low andunattractive that very limited options are available to the depositors. They do notmatch the current rate of inflation. HBL differentiate and increase its deposit byoffering attractive rate of return on deposits.

ThreatsThreat can be defined as a change in external environment which if not met withproper strategies will result in loss of revenues, market share, or income. In thecontext of HBLs external environment, the following potential threats exist:

Other private commercial bank with sound profitability is also a threat to HBLe.g. UBL, Alfalah, MCB etc



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The Rupee Travelers Cheque (RTC) sales volumes may be affected onaccount of regulatory restriction imposed by SBP on issuance of large valuedenominations.

For the last of 2 to 3 years, Pakistan is facing economic and political instabilitywhich is a big threat.

Foreign banks are flourishing in field of consumer financing.

Afghan war and Iraq war has a deep effect on the economy of Pakistan, whichhas affected HBL.

Increased regulations from State Bank of Pakistan may affect its business.

Operations of HBL

A. banking departments of

habib bank



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Various departments are working in all the branches of Habib bank to facilitate thecustomers. Following are the banking departments functioning in HBL punjabmedical college branchFaisalabad.

1. Account opening department.2. Cash department.3. Credit department.4. Lockers department.5. Bill clearing department.6. Foreign exchange department.7. I.T department.

1. Accounts opening departmentBasic function of the accounts department is to open new account and facilitate thecustomer for the account opening purpose. There are certain formalities which are tobe observed for opening of an account with a Bank. These formalities in brief are asunder:FORMAL APPLICATION:

The customer is to fill "Account Opening Form. It is a formal request by a customerto the bank to allow him to have and operate the account.Documents require for opening an account:

Copy of CNIC

Service certificate or student card.

Utility bill

Provisional receipt

KYC (Know Your Customer)SPECIMEN SIGNATURE:When the Banker is satisfied about the integrity of the customer, he agrees to openthe account. The Banker obtains the specimen signatures of the customer on thesignature book or on card.

Posting the account on the system:After that officer has to post the new account on computer system for furtherprocessing. During the process customer id and account number is generated. Newaccount remains active for one day after that it is blocked by the head office untilCNIC of the customer is verified from NADRA.

Cheque book issuing:After the CNIC verification account opening officer has to issue a cheque book tocustomer so that he can be able to make withdrawal from his account. Now a day inHabib bank cheque book issuing process is centralized that take 06 days tocomplete.

SECRECY:



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The secrecy of depositors account is the. Responsibility of every official engaged inthe Bank service.

Types of accounts:Individual accounts:

Individual accounts are the most common personal investment accounts. Opened bysingle person.

JOIN ACCOUNT:A joint account occurs when two or more than two customers have one account. Theparties to a joint account are considered in law as they are one person.

Business accounts:Business accounts can be opened by institutions, companies, partnerships, trustsand non-profit organizations. Following documents are required.

BOOKS RELATING TO CUSTOMERS:

Pay-in-Slip

When money is to be deposited in the bank the pay in slip is to be filled. The objectof this book is to provide the customer with the banks acknowledgement for receiptof money to be credited his account.

Cheque Book

A chequebook contains a number of cheques, which is given to a customer uponwritten request and after marking the payment for the chequebook. It enables acustomer to make withdrawal from his account or make payment to various partiesby issue of cheques.GROUNDS FOR CLOSING THE CUSTOMERS ACCOUNT:The banker may close the account of the customer due to following reasons:

i. Notice by a Customer

ii. Death of a Customer

iii. Customers Insanity

iv. By order of court

I) NOTICE BY CUSTOMER

The banker closes the account of the customer on the application of the customer forclosing his account.

II) DEATH OF CUSTOMER

On death of his customer, the bank must stop payment on cheques drawn on him bythe deceased customer because the death revokes his authority to pay such cheque.

The heirs or the executors of the deceased customer are not authorized to operateon the account; it can act only in accordance with provisions mentioned in the letterof probate issued by a competent courts.



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III) CUSTOMERS INSANITY

If the customer becomes insane or mental it terminates the bankers authority to actas his customers agent. Since the banker customer relationship comes to end, insuch as situation, it is usually considered that the bankers authority to pay his

customers cheques is revoked by notice of insanity. However, the bankers treat theircustomers as it unless a fairly inclusive evidence of the customers insanity isavailableto them.

IV) ORDER OF COURT

A court of law may serve a banker with an order in garnish proceeding in executionof a decree prohibiting him from honoring a customers cheques.

2. CASH department

ash Department is very sensitive and risky part of the bank. Very causationsand competent personnel are needed for the Job. HBL has really such adiligent staff with appreciable competencies and will to do work. Main function

of cash department is to deal with cash payment and cash receipts.

CCash deposit procedure:The customer fills the pay slip. The cashier receives the pay slip and cash. Hecounts the cash and makes the detail of the notes at the back of the pay slip. Thenhe compares the detail with amount written on slip and signs the pay Slip. Then hecredits the entries in the computer by serial No, account type, Account number andamount. Puts the stamp of the cash Received on the payment slip. The first portion

is for bank record while other one is given to the customer.Cash payments procedure:When a customer comes to withdraw a certain amount from his account, he brings aCheque along with him. In this case the following steps are taken.The cashier receives the cheque and checks it whether it is post dated or predated.Cheque can be cashed within six months. A predated cheque cannot be cashed. Hetakes two signatures at the back of the cheque from the bearer. He gives the chequefor posting at the computer. The computer checks out whether there is balance in theaccount or not. Other instructions are also received e.g. blocked, frozen, Etc. theposting is done in the computer and the cheque is stamped posted with the serial

number and date. He gives the cash to bearer and the respected account is debited.Online fund transfer:Another function of the cash department is of online transfer of funds.Customer has give filled remittances form with cash or without cash (from accounttransfer) to the cashier in cash department who will then credits the beneficiaryaccount.

Balancing cash at the end and transferring excess cash:At the day end cash department is responsible for balancing the cash. Physical cashshould be balanced with the amount in the computer. P.M.C branchs limit for cash is40 million which it can keep within the branch over the night excess cash istransferred to SBP.



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3. CREDIT DEPARTMENT

1. Introduction

2. Securities.

3. Types of credits

INTRODUCTION

The function of credit department is to lend money in the form of clean advances,against promissory notes, as well as secured advances against tangible andmarketable securities. The bankers prefer such securities that do not run the risk ofgeneral depreciation due to market fluctuations.Common Securities for the bankers advances are as under:-

SECURITIES

1. GuaranteesWhen an application for advance cannot offer any tangible security, the banker mayrely on personal guarantees to protect himself against loss on advances or overdraftto the applicant.

2. Mortgage

A mortgage is the transfer of an interest in specific immovable property for thepurpose of security the payment of money advanced or to be advanced by way ofloan, and existing or future debt, or the performance of an engagement which mayrise to a pecuniary liability. The transfer is called a mortgagor, the transferee amortgage.

3. Hypothecation

When property in the shape of goods is charged as security for a loan form the bankthe ownership and possession is left with the borrower, the goods are said to beHypothecated The essence of hypothecation is that neither the property in the goodsnot the possession of them are possession is left with the borrower, the goods aresaid to be Hypothecated the essence of hypothecation is that neither the property inthe goods not the possession of them are possessed by the lender, but the securityis granted by means of letter of hypothecation, which usually provides for a bankerscharge on the hypothecation goods.

4. Pledge

In a pledge the ownership remains with pledge, but the pledge has the exclusivepossession of property until the advance is repaid in full. While in case of the defaultthe pledge has the power of sale after giving due notice.

5. Promissory Note

Sometimes promissory note is also accepted as a security, "A promissory note is aninstruments in writing containing an unconditional undertaking signed by the maker,to pay on demand or at a fixed or determinable future time a certain sum of moneyonly, to or to the order of certain persons, or to the bearer or the instrument." A

promissory note is incomplete until has been delivered to payee or the bearer.Moreover, the sum promised in a promissory note may be made by two or moremakers who may be liable there on jointly and severally.



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TYPES OF ADVANCES

The advances which are given by Habib Bank Limited are as under:-

1. DEMAND FINANCE (Ordinary Loan)

Demand Finances are those advances which are allowed in lump sum for a fixedperiod and are repayable lump sum or gradually in installments.

TYPES OF ADVANCES

a. Demand Finance (Packing Credit)

Scheme introduced by State Bank of Pakistan for exporter of carpet, surgicalinstruments, at zero percent rate of interest. While banks provides atconcessional rate of interest.

b. Loan ordinary (Demand Finance to Students)

Qarz-e-Hasana Scheme Loans are allowed to the students, teachers withoutany interest or mark up with the recommendations of the MPA or MNA.

c. Demand Finance (Staff)

Loans are offered to the staff of the following four categories.

i. House Building Loans against mortgage of property.

ii. Loan for purchasing vehicles.

iii. Loan equivalent to months salary.

2. RUNNING FINANCE (Overdraft)

Running finance (old name overdrafts) are advances, which are generally, given tomeet temporary requirements of the customers. A good customer use the banksrunning finance limit as a mean of protecting his credit in the market and as a line ofsecurity defense to meet his commitments.

TYPES OF RUNNING FINANCE

I. Unsecured

Under such type of overdraft the bank pay upon the personal security of thecustomers mentioned on the customers account.

II. Secured

Under this type of overdraft the bank allows his customer to withdraw morethan his deposits after giving security against the amount overdrawn.

The securities against which they given are:

i. Share certificate, Saving certificate

ii. Deposits

iii. Mortgage of property

iv. Guarantee of person

SMALL LOANS

Loan is allowed to contractors clearing and forwarding agents.



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3. FINANCE AGAINST THE FOREIGN BILLS (FAFB)

The advance facility is allowed both to local foreign bills and is classified as under:-

i. FAFB (Local) advance against Railway receipts and truck receipt, a companywith bills of exchange and invoices, are given under this head.

ii. FAFB (Foreign) advances against foreign bill, covering bills of exchange bills

of lading airway bills of exchange bills of lading airways bills etc.

4. AGRICULTURE LOANS

Loans to the farmers with holding up to 25 acres for meeting their short terms,medium and long terms Agricultural production requirements, such as:

i. Agricultural inputsii. Tube wellsiii. Live Stock Framingiv. Land improvement

5. INDUSTRIAL LOANS

Besides the short-term loans which play a part in working capital medium and long-term loans are also given to industrial sector for purchase of machinery and othercapital nature goods.

4. Bills clearing

department

INTRODUCTIONEvery bank acts in two way i.e.

i. Paying Bank

ii. Collecting Bank

Here in theory no legal obligation on a banker to collect cheques, drawn up toother banks for a customer. It is, however, an important function of crossed cheques.A large part of this work is carried out through the N.I.F.T.

NIFT- National Institutional Facilitation Technologies (Pvt.) Limited:

NIFT is a joint venture between a consortium of six major banks and privatesector. It is responsible for the establishment and management of automatedclearinghouse facilities in Pakistan. NIFT is proactively involved in the modernizationof payment systems in Pakistan.

FUNCTION OF CLEARING DEPARTMENT

The following are the main functions of clearing department.

4. To accept transfer deliveries and clearing cheques from the customer of thebranch and to arrange for their collection.

5. To arrange the payment of cheque drawn on the branch and given for

collection to any other branch of Habib Bank of Pakistan or any othermembers, or sub-members of the local clearing area..



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6. To collect amounts of cheques drawn on members, sub-members of the localclearing house, sent for collection by those Habib Bank Limited, brancheswhich are not represented a the local clearing area.

PROCEDURE OF DEPOSITING CHEQUES IN CLEARING DEPARTMENT

Whenever a customer wants to deposit cheque, etc, he fills a pay in slip and

hands it over the counter along with the instruments he wants to deposit with bank.As far as possible, the customer desire that on of the staff member fill in a slip forhim, he should be obliged promptly.

One portion of the perforated pay in slip is handed over to the depositor andthe portion becomes the regular portion of a credit voucher

TYPES OF CHEQUES COLLECTED BY CLEARING DEPARTMENT

a. Transfer Cheques

Transfer cheques are those cheques, which are collected and paid by thesame branch of bank.

b. Transfer Delivery Cheques

Transfer Deliver cheques are those cheques, which are collected and paid bytwo different branches of a bank, situated in the same city.

c. Clearing Cheques

Clearing cheques are those cheques in which the payee (Person who depositcheques for collection) and the drawer of a cheque maintain the account withdifferent banks.

These clearing instruments are handed over to NIFT after posting necessarystamps and checking them for any errors. Then further process of clearing is carried

on the behalf of NIFT.

5.Forex Department

International trade is growing and with the development of international tradeit has become more imperative. For countries to devote more and more attention tothe complicated mechanism of Foreign Exchange. It is more important in case ofdeveloping countries. It is need of time, that a country should conserve its foreignexchange resources.

MEANING OF FOREIGN EXCHANGE

The foreign exchange term refers to the principles that determine the rate ofexchange. It covers following three senses:

i. The mechanism or system by which international obligations or indebtednessare fulfilled.

ii. The currency of one country is exchanged for that of another.

iii. The principles on which the people of world settle their debts to one another.

Letter of Credit:

It is a negotiable instrument through which the bank of the exporter deals with bankof the importer through the guarantee of a bank. There are different parties involved



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in the L/C, e-g importer, exporter, importer bank, exporter bank, and advisory bank.LC involves banking channels in foreign trade to mitigate risk.The procedure of opening of an L/C is as follow

The first thing is the Performa invoice. The Performa invoice is a document(say a clip), which is, sends by the exporter to the importer and includes theinformation like. Descriptions of goods, what type of goods you are needed

and what are the quality, rate and originating country etc. Before to open a L/C the bank also consider that the goods which the importer

is importing is allowed by govt. of Pakistan or not. Because the importer is notallowed to import that goods which are prohibited by the Govt. of Pakistan.

The importer is asked to show the membership certificate of any chamber ofcommerce and industry affiliated with the Pakistan federation of chamber ofcommerce and industry.

Fill the import form of the govt. of Pakistan, which is the proof of this that thereis no objection on the goods, which the customer is importing.

What type of goods you are needed and what are the quality, rate andoriginating country etc.

Necessary Documents required for L/C:

NTN

Tax Authority registration certificate

Chamber of Associations trade certificate

Type of Business

NIC

Margin

Registration No.

Application for L/C

On providing these documents the importer will be given the L/C form named asIB-8.Contents of IB 8

1. Request for LC2. Rate3. Importer and Exporters particulars4. Amount5. Terms6. Partial Shipment (Allowed, not allowed)7. Transshipment (Allowed, Not Allowed)8. Port of Loading and destination9. Payment Mode

I. SightOn seeing the documents the importer has to pay.

II. At Sight and Negotiation:It means that exporter will submit his documents with the bank and immediately asksfor payment.

III. Acceptance:On showing the documents to the importer, the bank asks him to accept that he willpay within 30, 60, 90, 120, 180 etc days.

10.Documents Required: Certificate of Origin.

Commercial Invoice



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Bill of Lading / Air way bill.

Charges:

For L/C following charges are applicable;

Commission

Postage L/C Advising commission

L/C amendment Commission

L/C confirmation Commission

L/C Negotiation Commission

Payment Mode:In foreign trade payment modes are

1) Advance Payment: Importer makes payment before delivery of goods.2) Open A/C: Importer makes payment after receiving the goods.

Issuing foreign exchange accounts cheques booksAnother function of foreign exchange department in P.M.C branch is to issue foreignexchange accounts cheques books to customers on request. This process is not yetcentralized. Cheque book is issued within 15 minute of receiving request fromcustomers after making necessary register entries and posting stamps on it.



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Products and Services of Habib BankLimited

Retail Banking

For

Individual Customers

Current AccountsMake unlimited transactions while maintaining a low minimum balance every month.HBL is currently offering three types of accounts in current account category. Theirdetail and name is as under.

1. HBL BusinessValueAccount2. Current Account3. Basic Banking Account (BBA)

HBL BusinessValueAccount

Unique transactional account for Businessmen

Up to 5.35%* profit per annum

Profit calculated daily, paid every quarter

Minimum balance of Rs. 20,000

HBL DebitCard and Inter Branch Transaction System (IBTS) facilities

Up to 10 Bankers Cheques free (at minimum balance of Rs. 500,000)

Funds transfer to any bank through HBL PhoneBanking

Current Account


Unlimited transactions

Non-profit bearing HBL DebitCard and Inter Branch Transaction System (IBTS) facilities


Basic Banking Account (BBA)

Can be opened with only Rs. 1,000

No minimum balance requirement

Upto 2 withdrawal and 2 deposit transactions free every month

Unlimited withdrawals through HBL DebitCard

Non-profit bearing

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Savings accounts

Avail the flexibility of making transactions while earning profit on daily/monthly basis.HBL is currently offering five types of accounts in savings account category. Theirdetail and name is as under.

1. HBL Value Account2. PLS-Savings Account3. Remittance Munafa Plus Savings Account4. Daily Munafa Account5. Daily Progressive Account

HBL Value Account

7.19%* profit per annum

Profit calculated monthly, paid every quarter

Deposit ranges from Rs. 10,000 to Rs. 1,000,000 Two withdrawals free every month

PLS-Savings Account

5.06% profit per annum*

Profit paid bi-annually

HBL DebitCard and Inter Branch Transaction System (IBTS) facilities



Unlimited transactions

Remittance Munafa Plus Savings Account

Special account for receiving foreign remittances

5.12%* profit per annum

Profit paid every month


Daily Munafa Account

Profit calculated daily, paid every month

Up to 8.84% profit per annum*

HBL DebitCard and Inter Branch Transaction System (IBTS) facilities Funds transfer to any bank through HBL PhoneBanking


Daily Progressive Account

Unique transactional account for Institutions

Profit calculated daily, paid every month

Up to 11.57% profit per annum*

Inter Branch Transaction System (IBTS) facility





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Terms Accounts

Invest your savings in HBL term deposits for a fixed duration and earn profit whilekeeping your savings secure. HBL is currently offering one type of account in termsaccount category. Their detail and name is as under.

1. HBL Advantage Account

HBL Advantage Account Multiple options for tenure and profit payout

Loan facility up to 90% of investment

Minimum investment of Rs. 25,000

Withdrawal at end of fixed term

Foreign Currency Accounts

HBL offers Foreign Currency Accounts in multiple currencies as savings and termaccounts. Their detail is as under.

FC-SB

Savings Account offered in 3 currencies, USD (US dollar), EUR (Euros) andGBP (UK pound)

Tiered product, with rates depending on choice of currency

To earn profit, minimum balance in USD, EUR and GBP is 1,000

Interest is payable on a quarterly basis

HYFFD (High Yield Foreign Currency Fixed Deposit)

Available in 1 month, 2 month, 3 month, 6 month and 12 Month in USD, EURand GBP

Tiered product, with rates depending on choice of currency and term

Profit paid on maturity only. No interim interest is payable. *NOTE: All the rate and terms and condition are revised by HBL after every sixmonths periods. These rates are only applicable for period 01.07.09 to 31.12.09.Further detail of terms and conditions about profit and rates is given in annex B.


Tenure Profit at maturity

3 MONTHS 7.50%*

6MONTHS 8.00%*

1 YEARS 11.00%*

3 YEARS 13.00&*

5 YEARS 14.00%*10 YEARS 17.00%*


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HBL Car Loan helps customers to get their preferred car through a simple andhassle-free process, backed by superior service and support. Now customer candrive a car he always wanted.

Features

Choice of used, new local/imported and reconditioned imported car.

Repayment options ranging Upto 7 years. Upto 85% of financing for the car of your choice.

Insurance at all times for complete peace of mind and security.

Round the clock support available through HBL PhoneBanking; you can placeyour requests and queries, track the status of your repayment/loan accountand avail other value-added services through HBL PhoneBanking.

Eligibility Criteria

How to apply

Just visit any HBL branch or Habib Bank Auto Finance Centre for details andapplication.

Submit complete set of application without any charges to the branch or the

Auto Center. Sign the necessary documents on approval of the application

Payment is released within 24 hours of the submission of post-dated chequesand initial payment after approval of the request.

Documentation

Salaried Individuals

Complete Application Form

Salary Certificate / Most recent Salary Slip

Bank Statement for past one year Two Copies of NIC

Employment Certificate with date of joining

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Two passport size photographs

Copy of the last paid utility bill (residence)

Self-Employed Business persons/Professionals


Two Copies of NIC Two passport size photographs

Letter of proprietorship / Registered Partnership Deed

Certified latest Form A and Form 29, where applicable, along with articles andMemorandum of Association

Copy of last paid utility bill (residence)

Bank Statement for the last 1 year

HBL CarToCar is a revolutionary car financing offer. It makes the car of customerchoice affordable and practical with a buy back guarantee. HBL CarToCar offersmatchless features and unique options at the end of the lease. Now customer candrive a new car at the end of every two years.

Features

Pay only for what you use

When customer lease a car under HBL CarToCar, he only pay for that part of the

cars value that he use during the lease term. The cars residual value (forecasted forthe end of the specific lease term) is agreed with him at the start of the lease term.This amount is deducted from the car price thus lowering the finance amount. Thisfinance amount is based only on a part of the cars value and not the full value of thecar. Therefore, HBL CarToCar offers very low installments as compared to anyconventional financing.

Upgrade of lifestyle

HBL gives customer the guarantee that if he wishes to return the car to HBL at the

end of the lease term, he will not have to pay off the cars residual value. Instead,HBL will directly settle this outstanding liability for customer under the buy backguarantee. Hence, he can upgrade to a new car as frequently as two years withoutany complication and hassle.

Affordability

With HBL CarToCar, customer only has to pay the difference between the car priceand the pre-agreed residual value to the bank. As a result, the monthly installmentmay even be 40% to 50% less than that of conventional financing.

FlexibilityHBL CarToCar offers customers several choices at the end of the lease term: Upgrade - Simply return the car to HBL and drive a new one home



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Walk away - Return the car to HBL and end the lease Buy - Keep the same car. Just make a one-time settlement of the cars residualvalue to HBL or pay the same in easy installments over a specified extended periodof time Sell - Enjoy the gain from selling off the car at a higher price in the market thanwhat you ay HBL as the residual value

Eligibility Criteria

DocumentationSalaried Individuals


Salary Certificate / Most recent Salary Slip

Bank Statement for past one year

Two Copies of NIC

Employment Certificate with date of joining


Copy of the last paid utility bill (residence)

Self-Employed Business persons/Professionals


Two Copies of NIC


Letter of proprietorship / Registered Partnership Deed

Certified latest Form A and Form 29, where applicable, along with articles andMemorandum of Association

Copy of last paid utility bill (residence)

Bank Statement for the last 1 year



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By the help of HBL credit card customer enters into the world of convenience andflexibility. Accepted at over 29 million merchants worldwide, HBL Credit Card makesshopping fun and paying simple. So that a customer can make the most of hisshopping experience.

Benefits

Buy now, pay laterBuy what customer want, when he want and pay for it later. A credit card statementwill be sent to him every month with details of all his purchases. He will have 21



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credit free days to make the payment from the statement date. Customer should payat least 3 days in advance if he makes your payment by cheques to allow enoughtime for clearance.Pay as much as customer wants

A customer can pay the entire or as little as 5% of the outstanding balance in hisstatement. The unpaid amount will be transferred to his next months statement

along with applicable services charges.Cash advanceCustomer can go to any specified HBL branch and withdraw cash at the counter. Hecan also go to any 1Link ATM in Pakistan and more than 1,000,000 ATMs worldwidedisplaying the Visa/Plus logo. Withdraw cash up to the available cash advance limiton his HBL Credit Card for a charge applicable from the withdrawal date.Balance transfer facility

Card holder can pay off balances he owes to other banks through his HBL CreditCard at a lower service charge.Security

Card holder cannot lose cash if he doesnt carry it! In the event that his card gets

stolen/lost, he should call HBL PhoneBanking to have his card blocked immediately.

HBL Visa Debit Card allows a card holder to pay for his purchases directly from hisbank account. He doesnt have to carry cash and his monthly statement provideshim with a complete record of all his transactions so he can manage his expenseswith ease.

Features

No Interest

HBL Visa Debit Card is the perfect way of paying for purchases as it gives access tothe exact amount of money a customer needed, as and when he needs it. There isno interest or credit on payments because he spends from the money available in hispersonal HBL Account.

Ease & Security

HBL Visa Debit Card offers ease and convenience because card holder doesnt have

to visit an ATM to withdraw cash. A single swipe automatically debits the exactpurchase amount from his personal HBL account.



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Spending Limits

The daily spending limit at shops and outlets on HBL Visa Debit Card is Rs. 25,000-100,000. (These figures are subject to the balance available in account).

Free Account Statement

HBL cardholders receive a free monthly account statement for their Debit Card and

ATM transactions to help them keep track of their spending.International Recognition & Acceptability

HBL Visa Debit Card is accepted at over 20 million Visa merchants worldwide,including over 10,000 merchants in Pakistan. As an ATM card it is accepted at morethan 1,000 1-Link & M-Net ATMs in Pakistan and 864,000 Visa ATMs worldwide. Nomatter where card holder is, with the HBL Visa Debit Card, HBL is always with him.

No Liability

In case of a lost or stolen card, card holders are protected against fraudulenttransactions made on their card after they report the incident.

With the rising cost of living, it is becoming increasingly difficult to make expensivepurchases or meet unexpected expenses. HBL is helping customer finance themwith Habib Bank personal Loans (old name flexi loan). Customer may avail apersonal loan of up to SIX TIMES of his net take-home salary subject to a maximumof Rs.300,000/- provided he work for an organization approved by HBL.

Features Flexible tenure: 12, 24, 36,48 or 60 months

No processing fee

Repayment through easy and affordable monthly installments from salary.

Credit Life & Disability Insurance

Repayment through easy and affordable monthly installments

You determine the need, we help you finance

Option of add up replacement for existing customer.

Minimum salary Rs. 12000

No salary limit for existing customers.

23% or 21% rate for existing users instead of 25%

Now the bank is just call away. Customer can now call HBL PhoneBanking andsave a trip to the branch. His query will be resolved in a single telephone call fromanywhere and at anytime.

T-PIN Generation

Customers TPIN (Telephone Personal Identification Number) is generated the firsttime he calls and he can use it as your password for verification purposes, self-



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service banking through IVR and additional services through HBLs PhoneBankingOfficers. Customer can change his TPIN anytime he like.

HBL PhoneBanking services for Deposit Account customers

Customers can use the Interactive Voice Response (IVR) system or talk to HBLPhoneBanking Officers to:

Get his account balance Get information about the last 5-10 transactions carried out on his account

Request bank statement, either through fax or email (as supplied in hissubscription form)

Get details of transactions from the last 6 months on each of the accountslisted on his subscription form

Change and/or modify his contact details

Transfer funds between his own accounts (as listed in the subscription form)or from his account to a third party account (as listed in the Third PartyAuthorization Form)

Transfer funds from his own account to an account in another bank under the1-Link network (Inter Bank Funds Transfer)

Generate his own choice of ATM Pin without filling a request at your branch

Inquire about HBLs product offerings

Lodge a complaint in case of any inconvenience

Inquire about the daily accounts related profit rates and currency exchangerates

Request a number of physical instruments and/or branch banking relatedservices that he might require, including:

Pay Order

Demand Draft

Statement

Balance Certificate

Cheque Book

HBL PhoneBanking services for HBL CarToCar and Car Loan customers

HBL CarToCar and HBL CarLoan customers can enjoy the following servicesthrough HBL PhoneBanking:

Balance Inquiry

Last 5-10 Transactions

Statement Generation (Email and Fax)

Account Maintenance

Assistance in case of Car Theft/Damage

HBL and New Jubilee Life Insurance Company Limited (NJI) introduce Amaan(Retirement Plan) and Tabeer (Child Education & Marriage). These products havebeen designed keeping HBLs customer base as the focus and will provide lifeinsurance along with an investment option.



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Amaan (Retirement plan)

Amaan is a pension plan that provides an opportunity for growth through investmentin a balanced portfolio with post-retirement income benefits. The plan covers lifeinsurance and gives attractive returns on investment to its customers.

Tabeer (Child Education and marriage plan)

Tabeer is a plan that provides parents with a means to accumulate a fund over aperiod of time which can then be used to pay for a childs education or marriage.Plans are available for both under and over 45 years of age.

Lockers are available in many of the HBL branches in different sizes like small,medium and large; some branches also have extra large and cubical lockers. Exceptrural areas because of security reasons.

Eligibility for using lockers

Only the account holders can avail the facility of lockers. The annual rent will bedirectly debited from their respected accounts at the start of the year.

Charges



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SizeKey deposit(refundable)

Annual rentRs.

SMALL 2500 2750

MEDIUM 3000 3850

LARGE 4000 6050

Key deposit is refundable at the time handing over the locker to bank. For the staff ofHBL key deposit is not required and also the annual rent is very low for them.

HBL Corporate Banking Group comprises a seasoned team of RelationshipManagers (RMs) to meet the demanding service standards of large corporations. Along history of financing and nurturing relationships in Pakistan has given HBL aunique insight, enabling it to provide timely and effective financial solutions for theircustomers to meet the growing challenges of a global economy. For a corporatecustomer, with a turnover of at least PKR 300 million, HBL has a range of solutionsdesigned to help him with his banking needs. Their RMs have the expertisecustomer need to create tailored financial solutions catering to the specificrequirements of his business. Whether establishing a new venture or expanding an

existing business, HBLs team understands customers banking needs and worksclosely with him to realize his goals.

Services

HBL provides the following services to meet customers funding requirements:

Working Capital Finance, including Overdraft, FE Loans, etc.

Pre and Post Shipment Export Financing (PKR and USD based)

Import Financing (PKR and USD based)

LMM Funding

Receivable Discounting

Islamic Banking facilities Cash Management Services

Trade Services including Letter of Credit, Letter of Guarantee and StandbyLetter of Credit, etc.

HBL CORPORATE CENTERS

1.Corporate Centre, Karachi 6.Export Processing Zone, Karachi2.PIA Branch, Karachi 7.Steel Mills, Karachi

3.Stock Exchange, Karachi 8.Stock Exchange, Lahore4.Corporate Centre, Islamabad 9.Morga Branch, Rawalpindi5.Corporate Centre, Faisalabad 10.Corporate Centre, Multan

11. Karachi Port Trust, Karachi

http://www.hbl.com/business-customers-islamic.phphttp://www.hbl.com/business-customers-cash.phphttp://www.hbl.com/business-customers-islamic.phphttp://www.hbl.com/business-customers-cash.php


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HBLs Commercial Banking Group targets medium sized companies with a turnoverof at least PKR 50 million. Its business units are located in Karachi, Lahore,Faisalabad, Sialkot, Gujranwala and Peshawar. Each unit is dedicated to servicebusiness clusters located within these cities. They have the ability and the resourcesto meet the needs of customers business with their pro-active, responsive andexperienced Relationship Managers who are committed to understanding customersbusiness.

Services

HBL offers financing for the following: Working Capital

Procurement of Inventory

Receivables

Procurement of Machinery

Expansion of production facilities

Import of raw materials

Exports

GuaranteesHBL COMMERCIAL BANKING CENTERS

1.Al-Noor, Karachi 9.Foreign Exchange, Karachi

2.Korangi Industrial Area, Karachi 10.Napier Road, Karachi

3.Saddar, Karachi 11.S.I.T.E. Karachi

4.Tariq Road, Karachi 12.Panorama Centre, Lahore

5.Badami Bagh, Lahore 13Peco Road, Lahore

6.Kashmir Road, Sialkot 14.Paris Road, Sialkot

7.Small Ind. Estate, Sialkot. 15.Circular Road, Faisalabad

8.Peoples Colony, Faisalabad 16.Trust Plaza, Gujranwala



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17.Super Market, Peshawar

HBL ZaraiBanking facilities are spread across the country and provide financingthrough more than 800 of their branches. HBLs presence in all agriculture belts ofthe country ensures easy access to farmers in rural areas. HBL ZaraiBankingprovides loans to small-scale land owning farmers as well as large institutionalizedand alliance based finance, enhancing agricultural harvest and, in turn, economicoutput of the country.

Products

HBL ZaraiBanking enables farmers to invest in premier quality seeds, fertilizers,pesticides, agricultural implements and non-farm setups through its various productprograms.

Crop InputsCrop specific finance for purchase of Agriculture inputs such as seed, fertilizer,pesticide and other related inputs.Farm Implements

Finance available for purchase of farm implements & machinery like combinedharvester, sprayers, ploughs, tube wells and other crop-related tools/implements.Tractors/Agricultural Vehicles

Finance available to individual farmers, self-employed tractor operators, providingthe option to select vehicles from a range of different manufacturers.Livestock

Finance available for feed, medicines, raw material, raising charges and other

related activities.Poultry



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Finance available for all poultry related activities including poultry farmconstruction/equipment, hatchery plant & machinery, poultry feed, poultry medicines,composite feed production, poultry processing and other related activities.Fish Farming

Finance available for inland fish farms as well as deep-sea fishing. This includesprocurement of boat, fish locating equipment, nets & ropes, ice maker, fish farm

water solution, hatchery construction/equipment, purchase of medicines / feed andother related activities.Group Lending

Joint finance facility for a group of farmers with small land holdings for workingcapital requirement.NOTE: These finances may be availed under Demand Finance or Running Financecategories. Demand Finance is usually available for short term financing needs whileRunning Finance is available on the basis of revolving limit.

Islamic Banking is a growing market segment that offers attractive opportunities topotential and existing customers. At HBL, Islamic Banking offers Shariah compliantproducts and services to meet the short and long term requirements of business,trade and industry.

Shariah Compliance

HBLs Islamic Banking products are in strict compliance with the tenets of Shariah

and bear Shariah Compliance Certification from an independent Shariah Advisor.Their Shariah Advisor has in depth experience in Shariah rulings (Fatawa) andteachings at different forums with qualifications of Dars-e-Nizami, M.A and L.L.B.HBL also have a Shariah Scholar, as member of their Shariah SupervisoryCommittee to ensure a sound Shariah Compliance mechanism, giving promptresponses to customers needs and access to Shariah knowledge.

Products and Services

Corporate and Commercial customers can choose from Shariah compliant bankingsolutions to meet their business needs.Ijarah (Leasing)

Medium to long term facility for vehicles, plant and machinery leased out to the clienton rental basis.Diminishing Musharaka

Medium to long term facility for vehicles, plant and machinery on joint ownershipbasis.Murabaha

Local and Import facilities for purchase of raw materials, semi finished and finishedgoods, stores or spares.Trade Services

Letter of Credit Facility, Collection of Foreign Bills, Collection of Local Bills, Letter of

Guarantees.

Customers are welcome to visit their Islamic Banking branch for the followingservices:



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Current Account (PKR, USD, EURO, POUND STERLING)

Basic Banking Account

ATM/Debit Card Facility

Foreign / Inland Remittances

Utility Bills Collection

E-banking / Internet Banking Services

24/7 Phone Banking Services Personalized customer friendly services

Saving Deposits will be introduced soon

Branch

AddressFinlay HouseGround FloorI.I Chundrigar RoadKarachi

As every body knows that "Knowledge without practice is sterile ".I JOINED HBL ON28TH, May, 2008.During my job I got a chance to work and learn in followingdepartments of the bank:

Foreign exchange department

Bills clearing department

Credit department

I.T department

Cash department Accounts, ATM and Lockers department

Duties and learning in Foreign exchange department

First of all I started my job training in foreign exchange department of the bank underthe supervision of Manager Forex department. I came to know about the differentfunctions of foreign exchange department and how to perform these functions duringmy work in the department.My duties in the department were related to the followings:

Foreign currency exchange rates.

Letter of credit (L.C) both opening and negotiation. Letter of guarantee

Issuing check books for foreign currency accounts

Remittances applications.

LearningOpening of letter of credit. Bank starts working on opening process after anapplication is received from the buyer (importer). I came to know about the processof opening of L.C, documents that bank demands from applicant, form used for thatpurpose, getting A.T (Availance Ticket) from regional head office and scanning andmailing the documents to head office Karachi for the purpose of getting approval,and payment on maturity date. Opening and negotiation both are centralized processin Habib bank therefore approval from head office is required.



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Negotiation of L.C. Bank starts negotiation of letter of credit (which would bealready opened by importers bank) after the application from seller (exporter).Before sending the documents for payment to importer bank negotiator bank mustensure that the entire document mentioned in Claus 46A of the L.C are attached andcomplete.I also worked on Remittances application. An applicant who wants to transfer

funds abroad must have a foreign currency account in the bank. Because State Bankof Pakistan only allow account to account transfer of funds abroad through banks.And I came to know about the process and information required to fill the form. I alsocame know about the process of issuing foreign currency accounts cheque book tocustomers. I learnt many things about the mechanism of foreign trade.

Duties and learning in bill clearing department

The second department in which I got a chance to work was bill clearing department.During the work in clearing department I came to know about the different functionsof clearing department and how to perform them. I came to know the process ofreceiving cheques by Dak, how to check cheques for any error like, the chequesshould be of the bank which is the clearing member of area which comes underP.M.C branch for example if the cheque is of bank Al-Fallah Lahore then it should goto zonal branch of Lahore region instead of zonal branch of Faisalabad. Thenchecking whether the amount of cheque and OBC (outward bank collections)voucher attached to it is same or not. If no error is found then making register entriesby noting down their OBC number branch code and amount of the voucher. Then:

Calculating the total amount of vouchers by summing individual amounts.

Calculating the total amount of cheques by summing individual amounts. Preparing an add list to be attached with clearing instruments (cheques).

Writing vouchers for demand drafts.And I also came to know about the different types of stamps and their use inparticular situation like DAK RECEIVED stamp and CLEARING stamp. Afterattaching add list, clearing instruments are handed over to NIFT for furtherprocessing. These clearing instruments are delivered to their respective banks forclearance by NIFT. I also learnt in case of Bankers Cheques how to verify signaturefrom the book in which all the signatures of authorized persons of HBL are given withtheir specific code. And I also worked on OBC (Outward bank collection) forwardingschedule. I came to know the process of sending cheques or other clearing

instruments for clearance to zonal branch of another region. Filling vouchers

Assigning OBC numbers

Making entries in OBC register

Duties and learning in credit department

After bill clearing department I started my work and learning in credit department ofthe branch. Mr. Shehryar Ali (Credit Manager) told me about the terms andconditions of the commercial loan, types of commercial loan like industrial loan andloan for merchants, how to make proposal for commercial loan, document required

to make a proposal, markup of commercial loan (18.5 % annually). He also gave mechance to view some old proposals and the proposal on which he was working.



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I am working as assistant manager credit and dealing consumer financing. I wastold about different types of consumer financing.

Flexi loan (personal loan)

Auto finance

Lifestyle loanIn Faisalabad region at this point of time from HBL only personal loan is active while

auto finance is about to start again in near future and lifestyle loan is inactive. I cameto know about the terms and conditions of personal loan. Only the governmentservant who has his salary account at least six month old in HBL can apply. Differentmarkup for different categories like 21%, 23% and 25%.

21% for existing users upto 3 year duration

23% for existing users for 4 or 5 years duration.

25% for new customersI also did work on documentation process for personal loan. I came to know aboutthe different types of document required to complete a case for sending it to regionalhead office for approval. Document like branch check list, application form, Copy ofCNIC of customer and two references, CNIC verification report from NADRA,customers account statement, finance agreement form etc.I also came to know about different types of securities which a bank demands fromcustomer while issuing loan. e.g. Guarantees, Mortgage, Hypothecation andPledge.

Duties and learning in Accounts, ATM and Lockers department

Then I learned about ATM (automatic teller machine). I came to know about thefunctions and working process of ATM machine. Loading cash and balancing at thetime of loading again. Next my main concern was to know about all the aspects ofATM card. I came know about the types, process of issuing ATM card to customers,

filling forms, how to activate ATM card, charges of issuing and using ATM card.Then I spent my time in lockers department. I took all the information about theterms and conditions of allotting and operating a locker, types of locker like small,medium and large, charges of using lockers, key deposit (refundable), fillingapplication forms, insurance amount for specific size of locker and etc. I also cameto know about the process of operating locker by the customer, how to open thelocker with the help of two keys.

1 key in the hand of bank officer (anticlockwise)

2nd key in the hand of customer (clockwise)Customer is allowed to operate the locker in full privacy. Only the customer himselfor other person authorized by him can operate the locker. After that bank officer has

to take the signature of the customers on attendance register maintained for thispurpose.Then my duty was in Accounts department. I came to know the procedure for fillingthe form to open an account, different types of stamps required and about signatureof the staff. Documents required to be attached with the form.

Copy of CNIC

Utility bill

Provisional receipt

KYC (Know Your Customer)And how to post an account on system after filling the form. Then I came to know

about Saving accounts and different types of accounts in saving category and termsand conditions of each type.

1. HBL Value Account



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2. PLS-Savings Account3. Remittance Munafa Plus Savings Account4. Daily Munafa Account5. Daily Progressive Account

Then current accounts6. HBL Business Value Account

7. Current Account8. Basic Banking Account (BBA)Term accounts

9. HBL Advantage Account10.Investment plus Deposit

FC accounts11.FC-SB

Savings Account offered in 3 currencies, USD (US dollar), EUR (Euros) and GBP(UK pound)

12.HYFFD (High Yield Foreign Currency Fixed Deposit)Available in 1 month, 2 month, 3 month, 6 month and 12 Month in USD, EUR and

GBPAssignments (1)During my work in accounts department Mr.Maqbool Ahmed khan (manageroperation) assigned me the duty of checking the files of previously opened accountsfor any type of discrepancies like utility bill or service certificate of the account holderis attached or not and checking stamps and signature of the staff etc. It was becausean audit of these files in the coming month is scheduled. Almost above 50% of theapplication forms were having discrepancies of different types. This turns out to bevery informative experience for me. Deposits are considered as lifeblood for anybank to survive. I came to know about the procedure and different types of depositsthat customers can maintain in HBL, return rates that a customer can get and other

terms and conditions of each type of account. As far as checking the old files areconcern it seems boring but from my point of view it was very informative. Thelearning I got while doing this job would never be easy to get otherwise.(2) Due to my familiarity with their computer software I was given another task of

updating account information on their computer system MISYS. Like accountholders name, address, CNIC number etc. In case of any problem I was consulting itwith Mr.Ehsan. This task gave me more chances to learn about the computer systemof HBL and also I can proudly say that I have my own share of working incomputerizing HBLs record.



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Achievements HBL - 'The Best Emerging Market Bank in Pakistan'

2008 HBL - 'Most innovative Global Trade Finance' award

2008 - 'Best bank In Pakistan' Award

Habib Bank Limited

Balance sheetAs on 31 December 2010

Habib Bank LimitedProfit & loss Account

As on 31 December 2010


2010 2009


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An index that relates two accounting numbers and is obtained by dividing onenumber by other

Ratio Analysis is an important and age-old technique of financial analysis. Itsimplifies the comprehension of financial statements. Ratios tell the whole story ofchanges in the financial condition of business. It provides data fro inter firmcomparison. Ratios highlight the factors associated with successful and unsuccessfulfirm. They also reveal strong firms and weak firms, over- valued and under valued

firms. It helps in Planning and forecasting. Ratios can assist management, in itsbasic functions of forecasting, planning, co-ordination, control and communication.Ratio analysis also makes possible comparison of the performance of differentdivisions of the firm. The ratios are helpful in decision about their efficiency ofotherwise in the past and likely performance in future. Ratios also help in Investmentdecisions in the investors and lending decisions in the case of bankers etc.Following are the main types of ratios that I am going to calculate in this report tocompare and highlight the financial performance of Habib bank in 2008 with 2007.

Return on Equity Ratio

Return on Assets

Loan to Assets ratio

Net Profit Ratio

Loan to Deposit

Return on Equity Ratio



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Interpretation:The past two years data shows an improvement in the return onequity which is a positive sign. The Bank should have to continue its policies. Byobserving the audited account I found that this improvement is due to increase in theNet profit which is good sign.

Return on Assets Ratio


Return on Equity Ratio2008 2007

Net Profit after tax X 100Owner Equity

Net Profit after tax

15,614,020 10,084,037Owner Equity

75,180,436 63,237,429

Return on equity20.76 15.94

Return on Assets

2008 2007

Net Profit after tax X 100Total Assets

Net Profit after tax15,614,020 10,084,037

Total Assets757,928,389 691,991,521

Return on Assets2.06 1.45


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Interpretation:Return on assets ratio shows an improving trend. This ratio shows that the both the

Net profit and Total Assets has improved in 2008 than 2007. But net profit hasincreased more rapidly.


Interpretation:



2008 2007

LoansAssets

Advances456,355,507 382,172,734

Assets 757,928,389 691,991,521

Loan to Assets ratio60.21 55.22


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Loan to Asset Ratio is showing increasing trend in 2008. This is because advancesare increasing more rapidly than assets of the bank.

Net Profit Ratio

Interpretation:

Net profit Ratio is giving upward trend. This trend is observed due to increase in Netprofit but on the other hand the expenses decreases which shows an efficientmanagement.Loan to Deposit Ratio


Net Profit Ratio 2008 2007

Net profit /Interest Income X 100

Net profit 15,614,020 10,084,037

Interest Income 43,970,884 33,250,937

Net profit ratio35.50 30.32


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Interpretation:

Loans to deposit ratio show an increasing trend in 2008 as compare to 2007. Thistrend is observed as the advances and deposits both are increasing but advancesare increasing more rapidly than deposits.

The financial results for the first quarter of 2009 are

(Rs. In 000)Profit after tax 3,384,623Share of profit attributable to minority interest 45,063Profit attributable to shareholders 3,339,560

Earnings per share rupees (Basic & Diluted) 4.40


Loan to Deposit

2008 2007

Loans/Deposits*100

Advances456,355,507 382,172,734

Deposits 597,090,545 531,298,127

Loan to deposit ratio76.43 71.93


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In the following diagram HBLs balance sheets and income statements items for2008 are compared with the items of 2007 and percentage growth is also calculated.

HBL - 'The Best Emerging Market Bank in Pakistan'

HBL has been selected as The Best Emerging Market Bank in Pakistan by Global

Finance Magazine.Global Finance magazine has named the Best Emerging Market Banks in Asia inan exclusive survey to be published in the May 2009 issue. Global Finance editors



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with input from industry analysts, corporate executives and banking consultantsselected the best emerging market bank in the region and in 20 countries. GlobalFinance reports on the international finance sector, covering topics such ascorporate finance, joint ventures and M&A, country profiles, capital markets, investorrelations, currencies, banking, risk management, custody, direct investment, andmoney management. The magazine also holds several awards ceremonies

throughout the year to recognize the winning financial institutions and companies.

2008 HBL - 'Most innovative Global Trade Finance' award

HBL received the 'Most Innovative GTFP (Global Trade FinanceProgram)' award. The award was received at the InternationalFinance Corporation Annual Trade Conference in Paris where126 issuing and 145 confirming multinational banks that were

present. Mr. Tariq Mateen - Head Financial Institutions

Division, gave a presentation showcasing the success of HBLin the global trade financing business. The award was receivedby Mr. Mateen and Mr. Anwar Zai