Fixed depositsFixed deposits are those which can be withdrawn only after the maturity period. In this type of deposits the Bank allows high rates of interest depending on the time period of deposits. The shorter the period of deposits, the less will be the interest and vice versa.Account Opening DepartmentIn this department I have to learn how to open a new account of a customer. The HBL open the different types of accounts. The opening of an account is the establishment of banker customer relationship. Before a banker opens a new account, the banker should determine the prospective customers integrity, respectability, occupation and the nature of business by the introductory references given at the time of account opening. I already explain these accounts. In order to open an account first of all the customer has to fill a form prescribed by the bank. The person is required to bring some reference or introduction for opening the account. Introducer may be a person who has an account with HBL. Some important information regarding introducer e.g. the name and account number of the introducer is written on the space provided on the specimen signature cards. Then in order to find out whether he is a true introducer or not a letter is sent to him thanking him for this introduction, so that anything wrong may come into notice. There are different requirement for different types of accounts and account holders. An important thing is that the customer should have a corporate customer. The corporate customer limit is 40 million and this branch always deals the corporate customer.Procedure of Account Opening Duly filled prescribed A/C opening form. Attested photocopy of N.I.C./Passport of Account Holder(s), Proprietor, Partners, Directors and office Bearers as the case may be. Certified true copy of the certificate of incorporation or registration (in case of limited companies & registered bodies only). Certified true copy of the certificate of commencement of business (in case of public limited companies only). Certified true copy of the memorandum and articles of association (in case of limited companies). Certified true copy of rules and regulations or By-Laws (in case of association etc.). Certified true copy of the resolution of the Board of Directors/Managing Committee/Governing Body regarding conduct of the account.Procedure for Account closingAny time the customer can close their account if he is not satisfy with the bank or may be other reason. He can easily close their account. For closing of account the customer meets the manager that he want to close his account .For this purpose the application is written to the manager. The manager sing this application and this is submit to the account opening department this department close the account of the custom.Remittance DepartmentRemittance is a major function of the bank. It is the transfer of money from one place to another place without directly involving cash. As it is the function of the Bank to the money to any place where there is a Bank. It is the most easiest and safe way to send money to any place. Bank charges menial amount as a commission for the remittance. Here in the Habib Bank Limited Chubara Road Layyah Branch there is also remittance Department. By providing this service to the customers the national bank earns a lot of income in Exchange.There are two types of bills remittance:I) Remittance InwardII) Remittance OutwardI. Remittance InwardCheques and Drafts received for payment and clearance or drawn on us from customer of other banks on behalf of their customers is called Remittance Inward.II. Remittance OutwardAll instruments issued by us, which are drawn on other branch of the same bank or instruments deposited for collection from other bank locally or out of city are called Remittance Outward There are mostly four methods to remit the money. They are Demand Draft (DD) Mail Transfer (MT) Pay Order (PO) Telegraphic Transfer.(TT)Demand Draft (DD)It is the most commonly method used for remittance of money. It is very simple, firstly a form is to be filled in which all details are specified that where and it which branch the draft is to be sent then the money is depositor which is called draft and money can be drawn after showing to the bank of the specified branch of the Bank. Only specified person can draw the money on that draft. Another method to secure the payment of the draft could be the crossing of the draft, which means that it will only be deposited in the payee's account. To make it more secured and safe the Bank has coded the amount exceeding Rs. 15000. Only the banker or the person known the actual amount of the draft in return bank gets a commission which is its mode of earning.Following parties are involved in demand draft: Applicant Issuing branch Drawee branch BeneficiaryA demand draft may be issued against the written request of the customer before issuing it must be seen that the demand draft is in order.The DD application must be scrutinized by the counter clerk in respect of following points. There should be branch where payment is to be made. Full name of payer should be mentioned. Amount in words and figures must be same The applicant on two places should sign application.Mail Transfer (MT)The money is transferred through mail. One Branch of the bank sends advice to the branch of the same bank to credit the account of payee. In this type of transfer the payee must has the Bank account. For example, now days PTV's licenses are made all over the Pakistan. Bank also gets commission on the mail transfers the amount to the PTVs Islamabad account.Pay Order (PO)Pay order is less expensive method of transfer money. Normally this method is used to transfer money inside the city. If it is used city wide, it takes a long time. The bank charge Rs. 10 which is flat fee the pay order and an excise duty of Rs, 1 per leaf withholding tax of 20% on the sum is also taken from the party. Now if the pay order is to be cancelled or duplicate of the pay order is to be needed is case of misplacement Rs.20 is to be paid.Following parties are involved in pay order: Applicant issuing branch PayeeTelegraphic Transfer.(TT)It is a good safe and fast method of transferring money from one place to another. The advice is sent through the telegram and the bank to which the advice is made reconfirms that whether the advice is made or not. After the confirmation the money is paid to the payee. Telegraphic Transfer could be made by giving the name and the telephone number of the payee but account number is considered good and sage. The amount exceeding Rs.15000 is coded in order to keep security.Following parties are involved in TT Applicant Drawing branch Drawee branch BeneficiaryFollowing important things should be included in TT: Full name of the beneficiary or account number should be mentioned in the application form. Instruction regarding mode of payment should be obtained. A record in the remittance outward register should be maintained. All the remittance must be controlled through number or codes.Advances DepartmentThis department has been working under the supervision of knowledge experienced & well qualified banker. Mr. Nadeem, who has been serving this bank for the last 22 years. This department has been playing one of the primary functions of the bank because a bank is the organizations that accept deposits & give advances. Advances department is one of the most sensitive and important departments of the bank. The major portion of the profit is earned through this department. The job of this department is to make proposals about the loans. The Credit Management Division of Head Office directly controls all the advances. As we known bank is a profit seeking institution. It attracts surplus balances from the customers at low rate of interest and makes advances at a higher rate of interest to the individuals and business firms. Credit extensions are the most important activity of all financial institutions, because it is the main source of earning. However, at the same time, it is a very risky task and the risk cannot be completely eliminated but could be minimized largely with certain techniques. Any individual or company, who wants loan from HBL, first of all has to undergo the filling of a prescribed form, which provides the following information to the banker.Advances are investments of bank to earn profit. After restructuring of Habib Bank Limited, Head office gives loan targets to each branch that must be achieved for its survival. The manager is responsible to achieve these targets in the given period. The amount is collected partially with an agreement containing the markup or interest rate, which is to be paid the interest, or markup is applied on a time limit after that it can be increased with the given conditions applied. There are basically two types of loans. Fund base Non-fund baseFund baseIn fund base the cash is involved.Non-fund baseWhile is non fund base cash is not involved.These are following types of advances those are given by the BANK. Cash Finance (CF) Running Finance (RF) Machinery Loan. International Development Agency Loan(IDA)Cash finance (CF)Cash Finance is the biggest loan given to the businessmen, industrialists, and its limit is in crores and bank do require security for this purpose. After the proper investigation and documentation these finances are given and genuine property is pledged as a matter of security.These loans are taken for the purchase of stocks etc. The bank appoints its staff of two or three persons at the place where that stock is lying. Bank also keeps the record of the stock and current position too. A notice is also written at the place that the stocks are pledged with the bank. To get these types of loans prior permission from the zonal office of the Habib bank is also required. The bank gets back its principal amount and also markup for the loanRunning finance (RF)Running Finances are also given for the purchase of stock etc. But its limit is not too much. Normally up to RS 15, 00,000 is given as a Running Finance and no staff is appointed. This is termed as Hypothecation, which means that party is wholly liable for the stock and

payment of the principal amount and markup. The procedure is almost same as for the cash finance and the loan is given to those parties which are able to prove its genuineness and satisfies the bank. The bank also pledges the genuine security of the party which normally more valuable than the amount of loan. To get this type of loan prior permission of the zonal office is necessary.Machinery loanCertain loans are given for the purchase of machinery. These loans are called Local Machinery Manufacturing Loan (LMM LOAN). The bank finances for the machinery, which is manufactured in Pakistan. Like other loans after the proper verification and proper documentation.With the prior approval from the zonal office, these loans are given. The bank pledges some genuine property as a security. Personal security is also required in the getting of this loan. The loan is to repay in certain installments which includes the mark-up also. Normally these loans are for the period of five years and first six or three months are exempted from the installments as the ease or as the terms and conditions may be. The rate of the interest to be paid by the party is 8% per annum.International Development Agency Loans.These loans are given for the purchase of foreign machinery, stocks, etc.Though these loans are not in practice but there is a provision for this loan. The cause of in practicing of the loan may be the unawareness of the people about the provision.The rate of interest on these loans is 11% per annum.These finances are provided by the World Bank.Principles of AdvancesThere are five principles, which must be duly observed while advancing money to the borrowers. Safety Liquidity Dispersal Remuneration Suitability Other Finance system of the HBL Demand finance Fixed assets financing (FAF) House Finance Hire Purchase FinancingMarketing DepartmentFunction of Market DepartmentThe function of the marketing department of a HBL is to advertise about the bank and reach more possible customer who would open accounts with the HBL. They usually start up the campaign or a promotional scheme explaining a benefit that come along with the process of account opening with the bank. Such a campaign usually results in the increase in the customers base and increased the profit for the HBL.Another important function of HBL is to use of the segmentation strategy, in it the HBL divide the market into distinct group of buyers with different needs how might require It is very important strategy which is applied by the operation marketing department in the HBL, the Main focus of this selecting strategy is to spreading the market into different groups, where the persons have comparable needs as well as wants for services and products.The marketing department in HABIB BANK LIMITED is very strong. It is the main source of gaining and maintains the customers that can give a large profit to the bank. There are five relationship managers in Habib bank and every person is responsible for the credit of his party. There are three market of HBL.Money Market T-Bill and Govt. Securities Bonds of Provincial Govt. Defense Saving Certificates Mutual Funds etc.Capital Market Equities e.g. shares Mutual Funds Bonds Debt Market

Foreign Exchange Market Spot Transactions Outright Transactions Swap TransactionsCustomer dealingHBL corporate center only deal with the following categories of business: The organization that have minimum 250 million sales in a year. The organization that have availed 80 million finance Agri based industry. HBL do not deal with the agriculture sector.

Clearing DepartmentThe major function of clearing department is to receive the cheques, which are drawn on some other banks. The customer can get the money in his account at Habib Bank Limited through a cheque drawn on another bank. The bank accepts these cheques and collects the amount from that bank on which cheques are drawn through the Clearing House. Bank charges some commission for this function. Every bank performs both as a paying as well as collecting functions on behalf of its customer. It is however an important function of crossed cheques. A large part of this work is carried out through the bankers clearing house. A clearing house is a place where representatives of all the banks of a city get together and settle the receipts and payments of cheques drawn on each other bank. As the collecting banker runs the certain risks in receipt of their ownership, the law has provided certain protections to the banks. The basic function of clearing dept. arises when HBL account holder deposits cheque of another back to collect its payment on his behalf or HBL account holder gives a cheque to any other party concerning to any other bank. Usually a cheque is sent through clearing is credited to the depositor account day after tomorrow.In this regard there are two types of clearings. Inward Clearing Outward ClearingInward ClearingInward clearing means all those cheques which are issued by account holders too their parties and now these cheques are presented for payment (in term of amount of cheque credit to presenter account).

Outward ClearingSimilarly when outside parties issue some cheque to our account holders, they deposit these cheques in cheque Receipts Department. Afterward these cheques, as relating to other banks operating in country, are sent to clearing department or further process. Clearing dept. sends these cheques to respective banks and after realization of cheque, funds are credited to the account of respective customer. In this regard there are two types of clearing Intra city clearing Intercity clearingForeign Exchange DepartmentAs the Pakistani currency accounts are opened the requirements are same for the foreign currency accounts. All the transactions are made in the foreign currency in which the account is opened1. Computer DepartmentThrough this department bank has make its way to enter in twenty-first century. This department is playing a very important role in making the banking procedures fasters and helping the bank for providing the new services to its customers. This division provided the bank with online branches system to make the whole procedure fool proof.Description of the departments I work inWorking of the Bank divided between various departments. Different departments perform their jobs as described in the bank policies. In AKBL each branch is divided into various departments. Head of department manage the task of all departments & of the branch as well. The working of the Department within branch is as: GENERAL BANKING DEPARTMENT Account opening Department Remittances department Cash department Clearing department PRIVILEGE BANKING DEPARTMENT Online banking Lockers CREDIT DEPARTMENT FOREIGN TRADE DEPARTMENT ACCOUNTS DEPARTMENT ACCOUNT OPENING DEPARTMENT Functions of Account Opening Department Providing account opening form to the customers. Guide the customers regarding form filling and check whether the customers fill it correctly or not. Preparing checklist, Stamping on the form, Maintaining account opening register, Pasting of forms in register after release from general banking in charge, Issuance of cheque books, Issuance of accounts maintenance certificate, Inquires about Customer Have all necessary information with him regarding his generally a banker is asked by another banker to give his opinion about his customers financial position. it is highly beneficial for the both that the banker should customers. Now a practice that Bank officer visit to customer and inquire about his business nature then writes a report.

Account Opening Procedure and Requirements The main objective of knowing customer is to have an idea about the identity of customer and to build the long term relationship. A banker must have following information about the customer:

Customer name: Enter complete name as mentioned in original ID card /other business documents. Nature of business /profession: also enters the customers title/position and address of the business/employer.

Address: Enter the complete business/residential address. Within the brackets you may also provide prominent address identification marks for ease of physically locating the address. Contact Numbers: Enter home, official, mobile, fax number and e-mail address. Banker can verify the contact number by calling the customer. Change Contact Numbers: After Opening A/C contact can be change by receiving an application from customer with specify new contact. Other/ secondary/ mailing address: Some customer may volunteer their parents or siblings addressor second home address or a mailing address other than a permanent address. Special instructions Clear-cut special instructions must be obtained from customers.

CONCLUSION Habib Bank Ltd. is obviously the first and foremost selection of each and everyone who believes in qualitative approach of banking, an atmosphere of extremely accountable employees. Habib Bank is taking pleasure in a strong market share and enjoying the taste of high-quality standing in terms of its operational features and customer support. Habib Bank Ltd. is undoubtedly the unsurpassed bank operating in Pakistan. Personal loan is a distinguished feature of HBL experiencing a good reputation and reasonable mark up with respect to prevailing market mark up with assurance of satisfaction and support. HBL has additional customers as contrast to other banks, if they give appropriate concentration to every customer then in coming few years it will be the principal bank of the country.I noticed that Habib Bank Ltd. is an economically sound bank. Its proceeds are increasing gradually more years by year. Its personnel are exceptionally good and genuine with the bank. But due to the current economic crash, business of the bank has been reduced.

Habib Bank Limited views specialization and service brilliancy as the foundation of its policy. The people at Bank understand that innovation, creativity, reliability, customized services and their implementation is the important constituent for their future enlargement. HBL is aware that they have paced into 21st century and they must get together its challenge by obtaining the maximum level of technology. Habib bank was among the top banks of the world but in few years it has lost its position. HBL is not giving any progress due to political pressure and instability. Other factors holding back the performance of HBL are unproductive and inefficient management. Last but not the least corruption is the root cause of declining worth of HBL.Removing these factors will not only retain the worth and place of HBL but also lead it to top ten banks of the world.HBL is lacking in conflict management. There are many problems aroused regarding any issue that leads to a conflict; HBL must be having a conflict resolving system in which higher officials must be involved to have a keen and close look on the critical issues.HBL took a great step of introducing mobile banking. But a huge problem HBL is facing is the lack of knowledge of client. Client is unaware of this sort of banking.HBL can launch an organized marketing program to make its customers aware of their product. HBL has upgraded its system by installing MISYS to ensure real time banking at its about 300 local and overseas locations. RECOMMENDATIONS

As we seen from the previous analysis of the financial statements I have realized that that Habib Bank is performing very well since its inception. It is quite difficult to give suggestion to improve the banking conditions Habib Bank Limited. As we know that nothing is perfect, there is always a room for improvement, so I will recommend following suggestions for HBL: Employees Training programs can be introduced on continuous basis so that Employees have understanding with the latest developments especially with the customers. Bank may introduced incentive plans for employees on regular basis so that if employees may work whole heartedly for the welfare of their organization. While giving incentives qualification, work, experience, hard work and such other factors must be considered. Mismanagement of resources must be avoided as much as possible as it decreases profit but also discourage hard worker and honest employees. Fresh graduates must be recruited. As the combination of Experienced and fresh can produce better results and it will improve the efficiency of management. Habib Bank is going towards mobile banking but the problem is that a common client has no idea of its usage due to lack of marketing. I think that a proper marketing programme must be launched for clients awareness. Banks different schemes must be conveyed to the targeted customers so that to have a reasonable share in market. Bank should help the society by providing interest free loans to the Talented Students. Online Banking should be introduced in all the branches. To motivate the employees their remuneration / salaries should be made at par with top tier Banks. Aggressive publicity campaign must be introduced through press and Electronic media for new products and scheme by initiating vigorous marketing policy. Bank should adopt such an induction plan that when a customer opens his account with the bank he should be supplied with a booklet which enables him to know the procedure of filing the cheques, pay-in-slip etc. It will save a lot of time of the bank staff afterward during the conduct of the account of that customer. The attitude of the bankers with all of their customers is not the same; they pay more attention and good service to some of the customers and neglect a major portion of them. Some of the customers approach to the bank officials and get their work done before others; it is not a good practice. All the customers should be treated equally. HBL should increase its communication with customers about the terms and conditions of its different products and services. Procedure for issuance of debit is very difficult and has many problems,like sometimes phone officers treat customers improperly, having a huge network of branches does not mean to prolong debit card delivery procedure, as it took about one month to collect debit card,and then its activation is also a major problem. Bank should think about this issue.

System Link down is also a problem; it must be resolved by new technology and equipments.