hbl internship replor t for finance

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INTERNSHIP REPORT ON

HABIB BANK LIMITED PAKISTAN

SUBMITTED BY: MUHAMMAD IRFAN ALI

LOGID: mc070402338

Phone# 0313-6747208

Mail address: [email protected]

& [email protected]

Address: Ward # 2 Mohala Chah Kurai

MBA (FINANCE)

2007-09

SUPERVISED BY: MAHER AMEER MUHAMMAD

DATE OF FINAL REPORT

10-04-2009 to 10-06-2009

NAME OF THE UNIVERSITY

VIRTUAL UNIVERSITY OF PAKISTAN

Virtual University of Pakistan

www.vustudents.ning.com

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DEDICATION

Allah Almighty( whose claim (to obedience) cannot be satisfied by those who

attemptto do so)& His Beloved People.



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ACKNOWLEDGEMENT

Thanks to ALLAH Almighty for giving me such a beautiful opportunity and enabling

me to complete my project. Thanks to my loving parents and guardian who help me a lot

at every phase of my life, encouraged me in the days of depression and sacrificed for my

better future.

I am very thankful to Mr. Maher Ameer Muhammad my supervisor, who has helped me

a lot in finding an appropriate project and for his reviews, encouragement, and support.

I am thankful to all of my teachers and my class fellows and friends whom

Cheerfulness and guidance is an asset for me .I am especially thankful to the bank staff

and particularly.



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Executive Summary

HBL established operations in Pakistan in 1947 and moved its head office to

Karachi Our first international branch was established in Colombo, Sri Lanka in

1951 and Habib Bank Plaza was built in 1972 to commemorate the banks 25th

Anniversary. HBL has the largest Corporate Banking portfolio in the country with an

active Investment Banking arm. It encompasses product offerings and services in Retail

Banking and, in recent years, Consumer Banking as well.

Satisfying customers are the only way to stay competitive in today's Market

Place. The balancing act between what customers want and what the HBL can provide

must be optimized in order to maximize HBLs long-term profits.

HBL is expanding its presence in principal international markets including the UK,

UAE, South and Central Asia, Africa and the Far East.

With a domestic market share of over 40%, HBL was nationalized in 1974 and it

continued to dominate the commercial banking sector with a major market 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.

HBL is currently rated AA (Long Term) and A-1+ (Short term). HBL is the first

Pakistani bank to raise Tier II Capital from external sources.



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Internship certificate



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Table of content

Introduction 8

Brief history& Overview of the organization 12

Nature of the organization 18

Business volume 21

Product lines 22

Competitors 37

Organizational structure 41

Organizational Hierarchy chart 43

Number of employees 44

Main offices

44

Comments on the organizational structure 45

Plan of your internship program 47

A brief introduction of the branch where I did your internship 47

Starting and ending dates of your internship 48

The departments in which I got training and the duration of your training 48

Training program 49

Introduction of all the departments 49

Detailed description of the department you worked in 49

Structure of the Finance Department 70

Department hierarchy 70

Accounting system of the organization 71

Finance system of the organization 73

Mobilization of funds 73

Generation of funds 79



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Sources of funds 81

Critical analysis 88

Ratio analysis 95

Organization analysis in comparison with itscompetitors 101Future prospects of the organization. 103

SWOT analysis of organization in the business sector 104

Conclusion & recommendations for improvement 108

Reference & Sources used 110

ANNEXES 111



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IntroductionHabib Bank Ltd is a Banking HBL which is engaged in Commercial &

Retail Banking and related services domestically and overseas. HBL Enjoy

20% of the marketShare in Pakistan. Today HBL is truly the bank of the people

Providing its customers convenience and Satisfaction all Over the world. Habib

Bank Plaza, the tallest building in Pakistan, is the proud symbol of HBL leadership

In Pakistans corporate ground. HBL is currentlyuses rate AAand A1+.

ESTABLISHMENT:

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 was Established with a

Paid up capital of Rs. 2.5millon

BRANCHES:

Numbers of branch of HB L 1437.in the form of 1408 retail

Banking branch 18 commercial banking division 10

Corporate center 1 Islamic banking.

Registered office:

Habib Bank Limited 4th Floor, Habib Bank Tower

Jinnah Avenue Islamabad, Pakistan.

Phone: 051-2872203 &051-2821183

Fax: 051-2872205



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Head office:

Habib Bank Plaza I.I. Chundrigar Road

Karachi 75650 Pakistan.

Phone: 2418000 [50 Lines]

Fax: 021-921751

Auditors:

Taseer Hadi Khalid & co.

(A member firm of KPMG International)

Sh. Sultan Trust Bidg. No. 2

Beaumont Road

Karachi-75530Pakistan

A.F. Ferguson & Co.

(A member firm of price water house coopers)

State Life Building 1-C

I. I. Chundrigar Road Karachi

Pakistan.

Audit Committee:

Mr. Sikandar Mustafa Khan Chairman

Mr. Ebrahim Sidat Member

Mr. Ansar Hussain Shamsi Member



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Board of Directors:

Sul t an Al i A l l ana Chairman

Moez J amal Director

Ahmad J awad Director

R.Zak i r Mehmood Pres ident & CEO

Yas i n Mal i k Director

Sa j i d Zah i d Director

Mus ht aq Mal i k Director



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Management



Sohail Malik

Group Executive, Risk ManagementNauman K. Dar

Group Executive, International Banking &

CEO, Habib Allied International Bank

Plc.,UK

Abid Sattar

Group Executive,

Retail & Consumer Banking

Zafar Aziz Osmani

Group Executive, Human

Resources & Organizational Development

Mudassir H. Khan

Group Executive,

Chief Compliance Officer

Salim Amlani

Group Executive, Audit,

BRR & Investigation

Aslam Gadit

Group Executive,

Asset Remedial Management

Yousuf Nasir

Group Executive,

Information Technology

Nausheen Ahmad

HBL Secretary

& Head of Law Division

R. Zakir Mahmood

President & CEO

Group Executive,

Corporate Banking

Ayaz Ahmed

Group Executive,

Chief Financial Officer

Jamil Iqbal

Group Executive, MISYS /

Business Process Re-engineering

Jamil A. Khan

Group Executive,Global Operations

Faizan Mitha

Group Executive,

Global Treasurer

Mirza Saleem Baig

Group Executive,

Commercial Banking

Kashif Shah

Group Executive,

Investment Banking

Aly Mustansir

Head of Marketing

& Brand Management

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Overview of the Organization

History



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The branches of Habib Bank in Pakistan

HBL Plaza in Karachi

Mohammed Ali Jinnah, Pakistan's founding father, realized the importance of financial

intermediation while he was campaigning for the creation of a separate homeland for theMuslims of India. He persuaded the Habib family to establish a commercial bank that

could serve the Indian Muslim community. His initiative resulted in the creation of

Habib Bank in 1941, with HO in Bombay (now Mumbai), and fixed capital of 25,000

rupees. The bank played an important role in mobilizing funds from the Muslim

community to finance the All-India Muslim League's campaign for the establishment of

Pakistan. Habib Bank also played an important role in channeling relief funds to the

people hurt in the communal riots and violence that preceded the departure of the British

from India.

After Pakistan was born in 1947, Habib Bank, at the urging of Governor-General Jinnah,

moved its headquarters to Karachi, Pakistan's first capital. This gave Karachi its first

commercial bank of the newly formed Islamic Republic of Pakistan. The Habib family



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owned and managed the bank until the Pakistan government nationalized it on 01

January 1974.

1951 HBL opened the first of 3 branches in Sri Lanka.

1952 HBL established Habib Bank (Overseas).

1956 HBL opened first of 5 branches in Kenya.

1957 or 1958 HBL opened a branch in Aden.

1961 HBL opened the first of what would become 6 branches in the UK.

1964 HBL opened the first of 4 branches in Mauritius and a branch in

Beirut.

1966 HBL opened the first of 8 branches in the UAE.

1969 HBL opened first of 3 branches and an OBU in Bahrain. However,

HBs branch in Aden is nationalized.

1971 HBL opened an OBU in Singapore and a branch in New York.

1972 HBL opened the first of 11 branches in Oman. HBL constructed

Habib Bank Plaza in Karachi to commemorate the banks 25th

Anniversary.

1974 The government of Pakistan nationalized HBL and HBL merged

with Habib Bank (Overseas).

1975 HBL opened a branch in Belgium. HBL also merged with Standard

Bank, a Pakistani bank.

1976 HBL opened a branch in the Seychelles, the first of two branches in

Bangladesh, and a branch in the Maldives.

1979 HBL opened a branch in the Netherlands.

1980 HBL opened a branch in Paris and another in Hong Kong.

1981 HBL established Nigeria Habib Bank with 40% ownership. HBL

also opened a representative office in Teheran.

1982 HBL opened a branch in Khartoum.



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1983 HBL opened branch in the Karachi EPZ and a branch in Istanbul.

1984 HBL established Habib American Bank in New York with a branch

each in Manhattan and Queens, and a US International Banking Facility.

HBL also opened a branch in California.

1987 HBL opened in Australia.

1991 The Habib Group established a separate private bank, the Bank AL

Habib, after private banking was re-established in Pakistan. HBL opened

a branch in the Fiji Islands, and took over the Paksistani branches of

failed bank, BCCI.

1992 In Nepal HBL acquired 20% of Himalayan Bank.

1995 HBL established a representative office in Cairo.

1990s HBL established Habib Finance (Australia), and Habib Finance

International Limited, Hong Kong.

2000 HBL established Habib Canadian Bank.

2002 On June 13, 2002 Pakistan's Privatization Commission announced

that the Government of Pakistan had granted the Aga Khan Fund for

Economic Development (AKFED), a subsidiary of the Aga Khan

Development Network, rights to 51% of the shareholding in HBL, against

an investment of PKR 22.409 billion (USD 389 million).

HBL's UK operation came close to being shut down due to regulatory

issues with the Financial Services Authority. The issue was resolved by

converting the operations to a subsidiary. Then Habib Bank Limited and

Allied Bank of Pakistan merged their operations (Habib contributed its 6

branches and Allied its 4), into a new bank, called Habib-Allied

International Bank, in which Habib Bank has a 90.5 percent shareholding,

while Allied Bank has 9.5 percent. Simultaneously with the transfer of

business to the new bank, both allied and Habib Bank close down all

independent operations in the UK.



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2003 HBL received permission to open a branch in Afghanistan.

2004 On February 26, the Government of Pakistan handed over

management control of Habib Bank to AKFED. The Board of Directors

was reconstituted to have four AKFED nominees, including the Chairman

and the President/CEO and three Government of Pakistan nominees

2006 HBL sold the operations that it had established in Fiji in 1991 to

Bank of South Pacific.



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VisionSimply the vision of Habib Bank is mass banking. At the time of formation it

changed its motto from class banking to mass banking. Expedite the economic

growth of the country through spreading the banking services to the doorsteps of

mass people so that they get institutional financial help and participate in the

economic activities of the country.

Mission To be the trendsetter for innovative banking with excellence and

perfection.

To be the best performing bank in the country and the region.

To exceed customer expectations through innovative financial products &

services and establish a strong presence to recognize shareholders'

expectations and optimize there rewards through dedicated workforce.

Keeping ahead of other competitors in productivity and profitability. To

attain budgetary targets fixed in each area of business.

ObjectivesLike other business organization the core desire of Habib Bank is to

maximize the profit through saving & loaning money to the life of the

common people. The Objectives of the Habib Bank is given below:

I. Broad Goal:



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As a nationalized commercial organization, Habib Bank belongs to the

people. It implies that it stands for meeting the banking needs of the mass

people of the society.

II. Operating Goal:

In compliance with the very nature of the organization, the objective in mind

the bank aims at excelling quality and diversified services. To fulfill its

mission Habib Bank has its main objectives as followings:

To provide banking services to people.

To earn profit.

Act as a media of exchange.

To contribute to gross domestic product (GDP).

Maintain a satisfactory deposit mix.

To promote and boost up business sector inside the country.

To help to grow entrepreneurship.

Increase loan portfolio diversification and geographical coverage.

To mitigate unemployment problem.

Provide finance specialized services to the export.

To help to boost economic development.

To help in development and industrialization of the country

Service Attitudes:



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Habib Bank is a service organization. It will live and prosper on the

quality of service it provides. Hence quality of service must be

maintained at all levels.

Banks image with people should be identified on the quality and diversity

of services that the people aspire to receive.

As a dynamic bank it will remain in search of new field of activity in line

with people economic need. Suggestions by customers and other people

shall receive proper attention so as to help identify new activity or

improve upon present activities.

The bank shall maintain healthy competition with other banks aiming at

excelling services in meeting economic needs of the people.

Nature of the organization

Accepting Deposits

The primary function of HBL is to accept and receive surplus money from the

people, which they willingly deposit with the Bank. Like all other Banks, HBL also

take incitation to attract as much depositors as it can. They offer different deposit

schemes to its customers, which includes the following types. These schemes as

follow.

Current Deposits

This type of account is often maintained by the business



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Current deposits are those deposits on which Bank offers no interest but it allows the

account holders to withdraw their money at any time they want without giving any

prior notice to the community, which requires large sums of money very often for

their business transaction.

Profit and loss sharing account (Saving)

Saving deposits or PLS is those accounts on which Bank offers a lower rate of

interest. After the Islamization of the Banking system in the country it has been

given the name of PLS saving account. The Bank undertakes to repay deposits on

demand up to a certain amount.

Fixed deposits

Fixed 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.

Making Loans and advances

The second most important function of HBL is to provide financing facility to its

customers. These loans and advances are usually made against document of title to

goods, marketable securities, and personal securities. HBL charges different interest

rates on these loans and advances depending on the terms and conditions settled with the

customers. Following types of loans and advances are made available to the customers.

Demand Finances



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Demand finances are those finances which are given to the borrowers for specified

period and can be called back without any prior notice. It is a single transaction finance.

It can be long term, medium term and short term. Mark up is also charge. Here the

amount can be withdrawn once at the time of disbursement.

Running Finance

HBL provides these finances against the security of current assets like shares, bond, cash

crops like cotton and other cashable commodities. The borrowers account is opened

with the Bank with the amount of the total loan provided or allowed to the borrower. The

borrower is allowed to withdraw any amount from his account within the specified limit

and interest is charged only on the amount actually withdrawn.

Over Draft

This type of facility is usually given to very loyal clients. This allows them to withdraw

over and above the amount held by them in their account, and interest is charged only on

the amount, which is withdrawn in excess of the amount actually held in their account.

Discounting bills of exchange

Discounting bills of exchange can also be considered as a form of loan because it allows

the holder to get the bill encased before the maturity period. A bill of exchange is usually

issued by the importer of goods to the exporters, which allows them to be paid in their

own currency after three months time. If the exporter needs the money before the

maturity of the bill of exchange, he can get his money from the Bank by discounting the

bill of exchange. The Bank utilizes their surplus funds by discounting the bills of

exchange at their market worth i.e. Bank pay to the holders of the bill on amount equal



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to their face value after deducting interest at the current rate for the maturity period of

the bill. Our stated objective of being a premier emerging market bank.

Business volumeHabib Bank Limited (HBL), Pakistans biggest IPO of Rs 12 bn in terms of value,

will be formally listed today at the Karachi Stock Exchange (KSE). This listing

would

further add Rs 162 bn to the banking sector market capitalization of nearly Rs 3,700

bn if we simply take the offer price of Rs 235/share as a proxy. Pakistans banking

sector has already got the biggest share of 29% in the market capitalization of KSE

and with this listing it will increase up to 33%.

We have signaled our positive outlook for the bank in our detailed Pakistans

banking jewel IPO report on HBL mainly due to 1) our forecasted CY07 ROE of

27% which is also in line with high performing peer banks viz. MCB Bank & United

Bank (UBL) 2) satiating 10% yield on earning assets 3) presence of more than 80%

low cost deposits and mere 4.2% weighted average cost on remunerative deposits 4)greater market share of fee-based income of 16% vis--vis peer banks 5)

management thrust on retail banking 6) strong brand equity. On the flipside, recent

draft circular by State Bank of Pakistan (SBP) regarding withdrawal of forced sale



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value (FSV) facility on illiquid securities in taking provision coverage against non-

performing loans (NPLs) is a blow to HBL. HBL has relatively low provision

coverage against historical NPLs and we expect the bank to make more provisioning

to the tune of Rs 5.2 bn that could impair our CY07 EPS forecast of Rs 26.85/share.

Product Lines

Services / Products Offered by the bank

Car to car

Car Loan

Credit Cards

Deposit Accounts

Bancassurance

Debit Card

Phone Banking



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Mutual Funds



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1. Credit Cards

Welcome to a world of convenience, flexibility and opportunity. The HBL Credit Card

will add simplicity and excitement to your life. Accepted at over 24 million merchants

worldwide, HBL Credit Card makes shopping fun and paying simple. Make the most out

of your shopping experience with your very own HBL Credit Card.

Gold Card Green Card

i. Convenience

ii. Securityiii. Affordability

iv. Cash Advance

v. Balance Transfer Facility



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vi. Internet shopping

i. Convenience

Instead of paying with cash, simply present your HBL Credit Card to the

shopkeeper and pay for anything you want.

Bill Payments

We'll pay your bills on your behalf and charge the amount to your HBL Credit

Card. You can give one-time standing instructions to pay your monthly bills.

Check the amount in your monthly card statement and make the payment with

your regular card payment.

SMS Alerts

For all transactions, an SMS alert will be sent to you on your mobile phone to

confirm that the transactions have been conducted by you. A nominal fee will be

charged for this service.

E-Statements

You can enroll for an e-statement with a simple call. An e-statement with detailsof all your transactions will be sent to your specified email address every month.

You wont have to wait for your paper statement any more or have to worry

about storing it.

Statement by Fax

HBL Credit Card also offers the facility of receiving your card statement by fax.

Just give us a call and your last card statement will be faxed to you at the fax

number specified by you



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ii. Security.

Your HBL Credit Card ensures your money stays completely secure. You cannot

lose cash if you dont carry it. In the unlikely event that your card is stolen, call

us at HBL Phone Banking and your card will be blocked immediately.

iii. Affordability

Buy Now, Pay Later

HBL Credit Card gives you the flexibility to buy what you want, when you want

and pay for it later. A credit card statement will be sent to you every month with

details of all your purchases. You will have 21 credit free days to make the

payment from the statement date. Please pay at least 3 days in advance if you

make your payment by cheques to allow enough time for clearance.

Pay As Much As You Want

You have the freedom to pay the entire outstanding amount on your card

statement or as little as 5% of the outstanding balance in your statement. The

remaining amount will be transferred to next months statement. A nominal

service charge will be applied to the unpaid amount each month.

Lower Rate Every Year

Just make sure all your HBL Credit Card payments are made before the due date

and you will benefit from a reduction in the rate of service charges at the end of

each year.

iv. Cash Advance

If you require cash urgently, you can go to any specified HBL branch and

withdraw cash at the counter. You can also go to any 1 Link ATM in Pakistan

and



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more than 780,000 ATMs and financial institutions worldwide displaying the

Visa/Plus logo. You can withdraw cash up to the available cash advance limit on

your HBL Credit Card. For Cash Advance, nominal service charges will be

applied from the withdrawal date.

v. Balance Transfer Facility

With your HBL Credit Card Balance Transfer Facility, you have the opportunity

to pay off balances you owe to other banks through your HBL Credit Card at

lower service charges.

vi. Internet shopping

Enjoy a hassle free shopping experience and shop from a choice of online

merchants, all from the comfort of your home. To activate /de-activate the

service please call 111-111-425

2. HBL Car Loan

HBL Car Loan helps you get your preferred car through a simple and hassle-free

process, backed by superior service and support. Now you can drive a car you

always wanted.



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Car Showroom Car Navigator

Choice of either a new local/imported car or a reconditioned imported car.

Repayment options ranging unto 7 years.

Upton 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

3. HBL Phone Banking;

PHONE BANKING



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Your bank is just a phone call away. You can now call HBL Phone Banking and save a

trip to the branch. Your query will be resolved in a single telephone call from anywhere

and at anytime.



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You can place your requests and queries, track the status of your repayment/loan

account and avail other value-added services through HBL Phone Banking.

Eligibility Criteria

Salaried

Individuals

Self-Employed

Business persons/Professionals

Citizenship Pakistani Pakistani

Age 22-60 years 22-65 years

Minimummonthly income

Rs. 20,000 Rs. 25,000

Documentation

Salaried Individuals

Copy of CNIC

2 recent passport size photographs

Latest original salary slip and personal bank statement for last 3 months

Self-Employed Business persons/Professionals

Copy of CNIC



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2 recent passport size photographs

Bank statement for last 6 months and bank letter confirming details of

account

Proof of business

Home Loan

HBL yet not offered home loan in the future the management of the HBL will

offered Home loan also.

Types of accounts offered by the bank

Term Accounts



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HBLs Term Accounts are offered in a variety

of tenure with deposits as low as Rs.10, 000.

HBL Advantage Account

Term Profit

10 year 18%

5 year 15%

3 year 14%

1 Year 12%

Multiple options for tenure and profit payout

Loan facility up to 90% of deposit

Minimum required investment as low as Rs. 25,000

Special Notice Time Deposit

7 days or 30 days (and over) notice

Minimum deposit of Rs. 10,000

Balances less than Rs. 1 million

Balances equal to and greater than Rs. 1 million

Returns range from 0.75% to 4% depending on notice period and amount

Term Deposit Receipts

3 month term deposit

Minimum balance of Rs. 10 million

Returns range from 0.75% to 2.25%

IPDC



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Minimum investment of Rs. 20 million except in the case of 1 month where

minimum investment is Rs. 100 million

Available in 1 month, 3 month, 6 month, 12 month and 3 year terms

Profit paid on maturity

Rates on IPD are conveyed on a daily basis by the Treasury Division

Remittance Munafa plus Deposit (Certificates)

Available in 1 year, 3 year and 5 year certificates

Profit disbursement is monthly, quarterly, bi-annually, annually and on

maturity

Profit paid on maturity

Returns range from 7.8% to 11%

Current Account

Non-profit bearing

No transaction limits

Minimum balance of Rs. 10,000. If the average balance falls below this

amount, then service charges will be deducted

No restriction on anyone opening a Current Account (as long as regulatory

guidelines are met)

Basic Banking Account (BBA)

No minimum balance

No service charges



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Savings Account

Profit paid bi-annually

Minimum average balance of Rs. 10,000

5% profit per annum

HBL Value Account

7% profit per annum*

Profit credited every 3 months

Deposit ranges from Rs. 10,000 to Rs. 100,000

Flexibility of withdrawals

HBL Supervalu Account

7.25% profit per annum*

Profit credited every 3 months

Deposit ranges from Rs. 100,000 to Rs. 500, 00

Flexibility of withdrawals



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Remittance Munafa Plus Saving Account

Remittance Based (no credit allowed except remittance)

Daily Basis Product

Tiered

Monthly profit

Minimum average balance of Rs. 10,000

Less than Rs. 20,000 earns 0.10% profit Rs. 1 million and above earns 5% profit

Special Saving Bank Deposit Scheme

Daily Basis Product

Tiered

Monthly profit

Minimum balance of Rs. 20,000

Returns unto 8%

Daily Munafa plus Deposit Account

Daily Basis Product

Tiered

Monthly profit

Minimum balance of Rs. 50,000

Returns unto 8%



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FC-SB

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

GBP (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,

EUR and GBP

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

Profit paid on maturity only. No interim interest is payable.

Tabeer Children Education:



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An insurance plan that enables parents to cover education and marriage costs.

DEBIT CARD

HBL Visa Debit Card allows you to pay for your purchases directly from your bank

account. You dont have to carry cash and your monthly statement provides you with a

complete record of all your transactions so you can manage your expenses with ease.

No Interest

Ease & Security

No Liability



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International Recognition& Acceptability

Spending Limits

Free Account Statement

24 hour Customer Service

Global Customer Assistance Service

HBL has a long history of being a partner of growth for business and industry. We

provide tailored banking solutions to business customers of all sizes in a wide range of

industries.

We cater to the needs of a broad spectrum of clients. To do this, the business banking

group is segregated by the size of the customer. For customers with an annual turnover

between PKR 50 million to PKR 300 million, our Commercial Banking group provides a

wide range of products that meet specific customer needs.



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The Corporate Banking Group focuses on personalized services to large corporate

borrowers who need tailored facilities. The Corporate Bank manages a diverse portfolio,

being an active player in a multitude of sectors including textiles, sugar, leather,

pharmaceuticals, fertilizer, petrochemicals, power, aviation, automotive, telecom, oil and

gas and FMCGs.

The Investment Banking Group is a market leader. It provides innovative capital strategy

solutions to major local and multinational entities.

HBL offers a wide range of products and services for its business customers. They are as

follows:

Competitors

Local Private Banks in Pakistan

Allied Bank of Pakistan Limited

Arif Habib Rupali Bank Limited

Askari Commercial Bank Limited

Bank Al Habib

Bank Al Falah Limited

Faysal Bank Limited

MCB Bank

United Bank Limited

Foreign Banks in Pakistan

Citibank NA



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ABN AMRO Bank NV

HSBC

American Express Bank Limited Emirates Bank

Doha Bank

Bank of Tokyo Mitsubishi Limited

However Habib Bank feels that its major competitors are as follows:

United Bank Limited (UBL)

MCB Bank

Citibank

Askari Bank

As far as UBL is concerned, Habib Bank feels that it is a competitor because UBL itself

is a sister HBL of Habib Bank as the Abu Dhabi Group has stake in UBL and so there isalways a comparison between them.

Furthermore, Askari Bank is a competitor because of the fact that the product and

services that it offers is fairly similar to that of Habib Bank and its markup rates are

similar as well. MCB, after being privatized has also introduced a wide variety of

services and with its large number of account holders, it is also a big competitor.

Citibank is a foreign bank that has been established in Pakistan for a long period of time

and has introduced a number of first class services and as Habib Bank is also competing

in the services industry, it needs to benchmark its product and services to a bank with a

stature to that of Citibank



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Their Goals and Strategies

United Bank Limited

UBL was established in 1959, to provide banking facilities to the nation, after its

nationalization in 1971, the bank became an inefficient enterprise, however after its

privatization in 2000; the whole face of UBL has been changed.

Today UBL stands on a solid network of more than 1000 branches nationwide and 15

overseas branches and with an experience of 46 years its main goal is to become the

leading bank of Pakistan.

To achieve its goal, UBL has introduced innovative products in the banking sector to

facilitate the general public. It was one of the very first banks to introduce internet and

SMS banking to its customers. It has divided its banking into three divisions, each

having customized products to satisfy the needs of that particular division:

Consumer: for individual customers

Commercial: for small and medium enterprises

Corporate: for large national and multinational companies

These strategies have helped UBL to raise its image in the banking sector. Its long term

credit rating is AA+1.

MCB Bank

In 1974, MCB was nationalized along with all other private sector banks. This led to

deterioration in the quality of the Banks loan portfolio and service quality. Eventually,

MCB was privatized in 1991. The vision of MCB is

Challenging and Changing the Way you Bank.

1



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The main strategies of the bank have concentrated on growth through improving service

quality, investment in technology and people, utilizing its extensive branch network,

developing a large and stable deposit base and managing its non-performing loans via

improved risk management processes.

In 2006, MCB Bank was awarded the Euro money Award for the best bank in

Pakistan, which shows its commitment of changing the way you bank.

Askari Bank

Askari Commercial Bank was established in 1992, with the vision of maintaining

excellent standards of banking quality and service, so as to serve its customers better.

With time Askari Bank has also changed its identity, changing its name to a shorter

Askari Bank, a new logo and a new slogan Ask Us.

Askari Bank has a wide variety of product and services that cater to need of all type of

customers. It also developed a wide variety of products for the Ksaans or farmers of

Pakistan, a segment of Pakistanis neglected by the baking sector of Pakistan. Askari

bank was also the first bank in Pakistan to introduce ATM machines on a third party

basis.

Askari Banks long term rating of AA+ by Pakistan Credit Rating Agency Limited

(PACRA) also shows its commitment of developing excellent standard of products and

services for its customers.

Citi Bank

Citi Bank was established in Pakistan in 1990 and since then has been using its

international roots and knowledge to make a name in the Pakistani banking sector. Its

main vision is to provide right financial solutions - every time, all the time and to fulfill

their vision Citi Bank has used its ability to identify market needs and develop products



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which are unique in concept and fulfill customer requirements. Every customer is served

by a versatile team of relationship managers who ensure in-depth knowledge of trends

and opportunities while synchronizing their financial activities.

Some of the innovative products introduced by Citi Bank or the very first time in the

Pakistani Banking sector are as follows:

CitiGold Priority Banking

Photo Credit Card

First to launch Personal Loans in Pakistan

First foreign bank to launch MasterCard in Pakistan

Complaint Tracking System (CTS) launched

Organizational structure

A well-developed and properly coordinate structure is an important requirement for

the success of any organization. It provides the basic framework within which

functions and procedures are performed. Any organization needs a structure, whichprovides a framework for successful operations. The operation of an organization

involves a number of activities, which are related to decision making, and

communication of these decisions. These activities must be well coordinated so that

the goals of the organization are achieved successfully.

STRUCTURE OF HBL

At present the Bank operates through one central and 23 Regional Offices and 1439

branches, all over Pakistan. The president and Executives Committee look after the

affairs of the Bank. Each Regional Head Quarter is headed by a Chief Executive and



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assisted by General Manager Operations and General Manager Support Services.

The Regional Head Quarter controls the branches in their area. Overseas operations

consist of 65 main branches, two affiliates, two representative offices and two

subsidiaries. President, from Head Office at Karachi controls the officers of the Bank

with the help of the senior management. Functional responsibilities of the Banks are

broken into seven groups known as 1) International Operations Group2) Corporate

Banking and Treasury Investment Group3) Retail Banking and Operation Group

Finance, Audit and Administration Group5) Assets Remedial Management Group6)

Credit Policy Group7)Corporate Bank, Financial Institutions and Project Finance

Group. In addition to the overall controlling authority, president also manages the

International Operations Group individually. While the Senior Executive Vice

Presidents supervise rest of the functional groups. Each Senior Executive Vice

President is individually responsible for the group which is assigned to him. At the

level of provinces there are Regional Head Quarters headed by Regional Chief

Executives (RCE). Each RCE is assisted by GM operations and GM Support

Services. Branches are also controlled by the RCEs. Circle Offices of the past times

have been removed to reduce Managerial Layers, which were working under the

control of Zonal Offices. This happened as a result of policy of beginning new

changes in the organizational structure.



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Organizational Hierarchy chart



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President

Chairman

SEVP International

Operation

Board of Directors

SEVP Corporate Banking

& Treasury

SEVP Finance, Audit &

Administration

SEVP Asset RemedialManagement

SEVP Retail Banking &

Information Technology

SEVP Credit Policy

SEVP Corporate Banking, financial

institute & Project finance

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Number of employees

Main offices

Habib Bank Plaza I.I. Chundrigar Road

Karachi 75650 Pakistan.

Phone: 2418000 [50 Lines]

Fax: 021-921751



HBL Profile: Habib Bank Limited

Ticker: HBL

Exchanges: KAR

2008 Sales: 73,498,000,000

Major Industry: Financial

Sub Industry: Commercial Banks

Country: PAKISTANEmployees: 14123

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Comments on the organizational structure

The purpose of an organizational structure is to help in creating an environment for

human performance. It is then, a management tool and not an end in its own. Although

the structure must define the task to be done, the rules so established must also be

designed in the light of abilities and motivation of the human recourse available. By

analyzing the organizational structure of HBL presence of the following elements can be

found in its structure.

Centralized Decision Making

By looking at the organizational structure of HBL would be found that the structure at

HBL is a critical one. All the decisions are made at the top management level and the

subordinates have to obey these decisions. This trend in the decision making shows a

pattern of rigidity in structure of HBL.

Downward Communication



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Communication is the process by which information is exchanged and understood by

two or more people, usually with the interest to motivate or influence the behavior of

others in the organization. Downward communication is the message and information

sent from top management to subordinates in a downward direction. Managers can

communicate downward to the employees through speeches, massages in HBL

publications, information leaflets, tucked into pay envelops material on bulletin boards,

policy and procedure mandates. The same pattern is followed at HBL. No doubt its a

very

traditional approach but it can create problems because it ignores the receiver of the

communication because the issuer

Of policies and procedures does not ensure communication. In reality may the messages

communicated downward are not understood perfectly.

Chain of Command

The chain of command is an unbroken line of authority that links all persons in an

organization and shows who reports to whom. By analyzing the organizational structure

it can be found that there is a scalar principle followed with in the Bank because each

and every person knows to whom can one report. The authority and responsibility for

different tasks and duties are different, as well as every one knows the successive levels

of management all the way to the top.

Authority and Responsibility



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The chain of command illustrates the authority structure of HBL. Authority is the formal

and legitimate right of the manger to make decisions, issues orders and allocates

resources to achieve organizational desired outcomes. By analyzing the chain of

command of HBL, one can come to the conclusion that, as there is scalar pattern

followed at the organizational setup of HBL therefore it is implied that everyone in his

position knows that what is ones authority and what is the responsibility and the

authority it allocated.

Delegation

Delegation is the process, which managers use to transfer the authority and responsibility

to position below in the hierarchy. Most organizations today encourage managers to

delegate authority to the lowest possible level to provide maximum flexibility to meet

customer needs and adapts to the environment. But at HBL no such system prevails the

managers try to keep as much of the authority as they can and if some authority is

delegated it is sure that it will be misused

Plan of your internship program

A brief introduction of the branch



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Habib Bank Limited main branch chubara road Layyah is the center of the employee of

different organizations, cotton and grain business. According to its location majority of

its accounts holders are businessmen and employees of different organizations and as

well as it has huge accounts of the farmers those are the brokers of wheat and cotton.

This Branch work under the very experienced Manager Chudary Sarwer.He is very

talented and hardworking person he tries to make hard to improve the progress of the

branch by leaps and bunds. He manage his employees very efficiently also motivated

them according to his work and encourage them. The employees of this branch are also

well experienced. Every employee of the branch guide the customers properly.As the

working of the branch is organized so different are made in order to make the working

easier and error free. Every person of the branch done his duty beautifully.

Starting and ending dates of internship

I start my internship at HBL from 10-04-2009 to 10-06-2009. I completed two month in

the HBL and in this two month I get great experience from different departments of the

HBL.

The departments in which I got training and theduration of training

These are departments where I get training

1. Remittance Department

2. Finance Department

3. Account services Department



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4. AgriFinance Department

Training program

Introduction of all the departments

There are some Names of the departments

1. Account Department


3. Utility bills

4. CD In charge Department

5. Finance department

6. Cash Department

7. Agri -Finance Department



Sr.# Name of the Department Duration

From To

1 Remittance Department 10-04-2009 25-04-2009

2 Finance Department 26-04-2009 10-05-2009

3 Account services Department 11-05-2009 25-05-2009

4 AgriFinance Department 26-05-2009 10-06-2009

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Detailed description of the department Iworked

These are those departments where I worked


2. Finance/Advance Department

3. Account services Department


These are detail of there department.


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 HabibBank Limited Chubara Road Layyah Branch there is also remittance

Department. There are mostly four methods to remit the money. They Are

i. Demand Draft (DD)

ii. Mail Transfer (MT)

iii. Pay Order (PO)

i. Demand Draft



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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 by 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.

ii. 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.

iii. 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



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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 with holding 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.

2. Finance/Advance Department

This department has been working under the supervision of knowledge

experienced & well qualified banker. Mr. Nadeem who has been serving this

bank for last 22 years.

This department has been playing one of the primary function of the bank

because a bank is the organization 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 withcertain techniques.



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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.

There are basically two types of loans.

Fund base

Non-fund base

In fund base the cash is involved while in non-fund base cash is not

involved.

These are following types of advances those are given by the bank.

Cash Finance

Running Finance

Any individual or HBL, 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.

Name and address of the borrower.

a) Existing financial position of a borrower at a particular branch.

b) Accounts details of other banks (if any).

c) Security against loan.

d) Exiting financial position of the HBL. (Balance Sheet & Income

Statement).



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e) Signing a promissory note is also a requirement of lending, through this

note borrower promise that he will be responsible to pay the certain amount of

money with interest.

Principles of Advances

There are five principles, which must be duly observed while advancing money

to the borrowers.

Safety

Liquidity

Dispersal

Remuneration

Suitability

a. Safety

Bankers funds comprise mainly of money borrowed from numerous customers

on various accounts such as Current Account, Savings Bank Account, Call

Deposit Account, Special Notice Account and Fixed Deposit Account. It

indicates that whatever money the banker holds is that of his customers who have

entrusted the banker with it only because they have full confidence in the expert

handling of money by their banker. Therefore, the banker must be very careful

and ensure that his depositors money is advanced to safe hands where the risk of

loss does not exist. The elements of character, capacity and capital can help a



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banker in arriving at a conclusion regarding the safety of advances allowed by

him.

b. Character

It is the most important factor in determining the safety of advance, for there is

no substitute for character. A borrowers character can indicate his intention to

repay the advance since his honesty and integrity is of primary importance. If the

past record of the borrower shows that his integrity has been questionable, the

banker should avoid him, especially when the securities offered by him areinadequate in covering the full amount of advance.

It is obligation on the banker to ensure that his borrower is a person of character

and has capacity enough to repay the money borrowed including the interest

thereon.

c. Capacity

This is the management ability factor, which tells how successful a business has

been in the past and what the future possibilities are. A businessman may not

have vast financial resources, but with sound management abilities, including the

insight into a specific business, he may make his business very profitable. On the

other hand if a person has no insight into the particular business for which he



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wants to borrow funds from the banker, there are more chances of loss to the

banker.

d. Capital

This is the monetary base because the money invested by the proprietors

represents their faith in the business and its future. The role of commercial banks

is to provide short-term capital for commerce and industry, yet some borrowers

would insist that their bankers provide most of the capital required. This makes

the banker a partner. As such the banker must consider whether the amount

requested for is reasonable to the borrowers own resources or investment.

e. Liquidity

Liquidity means the possibilities of recovering the advances in emergency,

because all the money borrowed by the customer is repayable in lump sum on

demand. Generally the borrowers repay their loans steadily, and the funds thus

released can be used to allow fresh loans to other borrowers. Nevertheless, the

banker must ensure that the money he is lending is not blocked for an undue long

time, and that the borrowers are in such a financial position as to pay back the

entire amount outstanding against them on a short notice. In such a situation, it is

very important for a banker to study his borrowers assets to liquidity, because he

would prefer to lend only for a short period in order to meet the shortfalls in the

wording capital. If the borrower asks for an advance for the purchase of fixed

assets the banker should refuse because it shall not be possible for him to repay

when the banker wants his customer to repay the amount. Hence, the baker must

adhere to the consideration of the principles of liquidity very careful.

f. Dispersal



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The dispersal of the amount of advance should be broadly based so that large

number of borrowing customer may benefit from the bankers funds. The banker

must ensure that his funds are not invested in specific sectors like textile

industry, heavy engineering or agriculture. He must see that from his available

funds he advances them to a wide range of sector like commerce, industry,

farming, agriculture, small business, housing projects and various other financial

concerns in order of priorities.

Dispersal of advances is very necessary from the point of security as well,

because it reduces the risk of recovery when something goes wrong in one

particular sector or in one field.

g. Remuneration

A major portion of the bankers earnings comes form the interest charged on

the money borrowed by the customers. The banker needs sufficient earnings to

meet the following:

a) Interest payable to the money deposited with him.

b) Salaries and fringe benefits payable to the staff members.

c) Overhead expense and depreciation and maintenance of the fixed assets

of the bank.

d) An adequate sum to meet possible losses.

e) Provisions for a reserve fund to meet unforeseen contingencies.

f) Payment of dividends to the shareholders.



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h. Suitability

The word suitability is not to be taken in its usual literary sense but in the

broader sense of purport. It means that advance should be allowed not only to

the carefully selected and suitable borrowers but also in keeping with the

overall national development plans chalked out by the authorities concerned.

Before accommodating a borrower the banker should ensure that the lending is

for a purpose in conformity with the current national credit policy laid down by

the central bank of the country.

Cash Finance

Cash finance is the biggest loan given to the businessmen, industrialists. 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. This is a very common form of borrowing

by commercial and industrial concerns and is made available either against

pledge or hypothecation of goods, produce or merchandise. In cash finance a

borrower is allowed to borrow money from the banker up to a certain limit,

either at once or as and when required. The borrower prefers this form of

lending due to the facility of paying markup/services charges only on the

amount he actually utilizes. If the borrower does not utilize the full limit, the

banker has to lose return on the un-utilized amount. In order to offset this loss,

the banker may provide for a suitable clause in the cash finance agreement,

according to which the borrower has to pay markup/service charges on at least

on self or one quarter of the amount of cash finance limit allowed to him even

when he does not utilize that amount.



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Bank also keeps three records of the stock and current position. a notice is

also written at the place that the stock are pledged with the bank To get these

types of loan prior permission from the zonal office of the HBL is also

required the bank gets back its principal amount and also markup for the

loan. The rate of markup is Rs. 0.521/1000 per day.

Document Required For the Loan

1. Demand Promissory Note DP Note

This document is filled in by the party that promises to pay the amount

whenever it is demanded.

2. Facility Letter

This is the requisition of the finance facilities to the bank by the party.

3. Balance Confirmation

After the approval of loan this letter is written by the party that such amount

is in the account of the party.

4. Letter of Pledge (IB26)

For the getting of the cash finance a letter of pledge is to be given to the bank

that such property is to be pledged with the bank as a security.

5. Letter of Guarantees (IB 29)

A letter for the personal guarantees is also required, in which the guarantee

from a sound person to the party is attached with the application.



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6. Agreement for Financing (IB 6)

This agreement for the short term medium term/long term on the markup

basis. At most these are the documents required in attaining of the loan.

Running Finance

When a customer borrows from a banker a fixed amount repayable either in

periodic installments or in lump sum at a fixed future time, it is called a

loan. When bankers allow loans to their customers against collateral

securities they are called secured loans and when no collateral security is

taken they are called clean loans.

The amount of loan is placed at the borrowers disposal in lump sum for the

period agreed upon, and the borrowing customer has to pay interest on the

entire amount. Thus the borrower gets a fixed amount of money for his use,

while the banker feels satisfied in lending money in fixed amounts for

definite short periods against a satisfactory security.

This is the most common form of bank lending. When a borrower requires

temporary accommodation his banker allows withdrawals on his account inexcess of the balance which the borrowing customer has in credit, and an

overdraft thus occurs. This accommodation is generally allowed against

collateral securities. When it is against collateral securities it is called

Secured Overdraft and when the borrowing customer cannot offer any

collateral security except his personal security, the accommodation is called a

Clean Overdraft. The borrowing customer is in an advantageous position in

an overdraft, because he has to pay service charges only on the balance

outstanding against him. The main difference between a cash finance and

overdraft lies in the fact that cash finance is a bank finance used for long term



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by commercial and industrial concern on regular basis, while an overdraft is a

temporary accommodation occasionally resorted to.

Demand Financing/Loans

When a customer borrows from a banker a fixed amount repayable either in

periodic installments or in lump sum at a fixed future time, it is called a

loan. When bankers allow loans to their customers against collateral

securities they are called secured loans and when no collateral security is

taken they are called clean loans.

The amount of loan is placed at the borrowers disposal in lump sum for the

period agreed upon, and the borrowing customer has to pay interest on the

entire amount. Thus the borrower gets a fixed amount of money for his use,

while the banker feels satisfied in lending money in fixed amounts for

definite short periods against a satisfactory security

3. ACCOUNT DEPOSIT DEPARTMENT: -

It controls the following activities:

a) A/C opening.

b) Issuance of cheque book.

a) Current a/c

b) Saving a/c



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c) Cheque cancellation

d) Cash

Account opening

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. Preliminary investigation is necessary because of the

following reasons.

i. Avoiding frauds

ii. Safe guard against unintended over draft.

iii. Negligence.

iv. Inquiries about clients.

There are certain formalities, which are to be observed for opening an account

with a bank.

Formal Application

Introduction

Specimen Signature



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Minimum Initial Deposit

Operating the Account

1. Pay-In-Slip Book

2. Pass Book

3. Issuing Cheque Book

a) Qualification of Customer

The relation of the banker and the customer is purely a contractual one,

however, he must have the following basic qualifications.

He must be of the age of majority.

He must be of sound mind.

Law must not disqualify him.

The agreement should be made for lawful object, which create legal

relationship

Not expressly declared void.

b) Types of Accounts

Following are the main types of accounts

1) Individual Account



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2) Joint Account

3) Accounts of Special Types

Partnership account

Joint stock HBL account

Accounts of clubs, societies and associations

Agents account

Trust account

Executors and administrators accounts

Pak rupee non-resident accounts

Foreign currency accounts1

Issuing of cheque book:

This department issue cheque books to account holders.

Requirements for issuing cheque book

a) The account holder must sign the requisition slip

b) Entry should be made in the cheque book issuing book



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c) three rupees per cheque should be recovered from a/c holder if not then

debit his/her account.

Current account

These are payable to the customer whenever they are demanded. When a banker

accepts a demand deposit, he incurs the obligation of paying all cheques etc.

drawn against him to the extent of the balance in the account. Because of their

nature, these deposits are treated as current liabilities by the banks. Bankers in

Pakistan do not allow any profit on these deposits, and customers are required to

maintain a minimum balance, failing which incidental charges are deducted from

such accounts. This is because the depositors may withdraw Current Account at

any time, and as such the bank is not entirely free to employ such deposits.

Until a few decades back, the proportion of Current Deposits in relation to Fixed

Deposits was very small. In recent years, however, the position has changed

remarkably. Now, the Current Deposits have become more important; but still

the proportion of Current Deposits and Fixed Deposits varies from bank to bank,

branch to branch, and from time to time.

Saving account

Savings Deposits account can be opened with very small amount of money, and

the depositor is issued a cheque book for withdrawals. Profit is paid at a flexible



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rate calculated on six-month basis under the Interest-Free Banking System. There

is no restriction on the withdrawals from the deposit accounts but the amount of

money withdrawn is deleted from the amount to be taken for calculation of

products for assessment of profit to be paid to the account holder. It discourages

unnecessary withdrawals from the deposits.

In order to popularize this scheme the State Bank of Pakistan has allowed the

Savings Scheme for school and college students and industrial labor also. The

purpose of these accounts is to inculcate the habit of savings in the constituents.

As such, the initial deposit required for opening these accounts is very nominal.

Cheque cancellation:

This department can cancel a cheque on the basis of;

a) Post dated cheque

b) Stale cheque

c) Warn out cheque

d) Wrong sign etc

Cash

This department also deals with cash. Payment of cheques, deposits of cheques

etc.




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At HBL Agri Finance we understand the peaks and troughs of farming. Thats

why we have designed our lease, loan and hire-purchase agreements to match

your income situation. On an arable or dairy farm, for example, cash flow is tight

early in the year when you are buying stock and feed. You may have a surplus at

harvest time or when you receive the single farm payment.

We simply arrange to take high repayments when cash flow is good and lower

ones at quieter periods. If necessary, you can even hold off payments during

periods when your income is under pressure.

Flexible loan

Our lease, loan and hire-purchase agreements do not just apply to farms. We also

help finance equipment used by local authorities, landscape gardeners and sports

clubs in caring for grounds. Unlike buying equipment outright, this allows you to

spread your payments over several yearly budgets. If club membership is an

issue, it means you can spread costs fairly between present and future members.

For more information, contact your local HBL Agri Finance

Area sales executive

Multiple equipment purchase

Page 3

If you need a range of different pieces of equipment or vehicles over period of

time, we may be able to arrange a credit line for you. We can make an agreed

amount of finance available to you to draw down (take) as you need. Ask your

Agri Finance area sales executive about credit lines and agency purchasing.

Outright purchase



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If you want to buy equipment outright, our hire-purchase agreement is the

flexible and cost-effective alternative to overdrafts or term loans. Full ownership

passes to you at the end of the agreed term. On the other hand, with a loan

agreement, you will own the equipment from the beginning. This can be useful in

grant-aided projects, for example, where you need an invoice in your own name.

Hire purchase and loan agreements offer:

fixed repayments, making budgeting easy;

repayments which you can time to suit the income pattern

Of your farm;

the option to claim capital tax allowances on the equipment;

interest on your repayments which is tax-deductible ;

A flexible deposit;

VAT which you can claim back immediately on the whole purchase

Price (except for motor vehicles); and

with a hire-purchase agreement, no need for extra security or to repay

On demand (unlike bank loans).

Ask your HBL Agri Finance area sales executive to explain

The benefits to you in detail.

Lease agreements

Leasing is an efficient way of paying for the use of equipment over a set

Period of time. You negotiate the purchase of the equipment you want and we

will pay

The supplier and keep legal ownership of the equipment. You then rent the

equipment from us over an agreed term - from five up to seven years for tractors.

You can then choose from the following options.

Carry on using the equipment for a small yearly rental fee.



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Sell the equipment as our agent and keep all the sales proceeds.

Trade it in as a repayment against new equipment.

Other benefits of leasing include:

Fixed rentals making budgeting easy;

Rentals you can time to suit your income;

Using the equipment just as if you owned it;

Rentals which are fully tax-deductible (except for motor vehicles);

Using an overdraft facility for other purposes;

You do not usually need extra security which you would for a bank loan;

And

a flexible first rental payment.

YourHBL Agri Finance sales executive will tell you more about

The benefits of leasing. Talk to your accountant about which leasing

Product is most suitable for you.

The key to our success is our focus and dedication to agriculture. We know that

our business depends on farming - a unique industry with unique problems and

challenges. As a result, we make it our business to understand the needs of Irishfarmers. Our field service is one of a kind - a team of dedicated area sales

executives, covering the whole country and backed by teams at regional offices.

Our nationwide network of branches means we understand the rural economy.

We always try to make sure our service and products meet your needs. We work

with agricultural dealers and manufacturers to provide a quality service to the

farming community.



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Agriculture finance is defined as a subset of rural finance dedicated to financing

for

agricultural related activities viz. input supply, production, processing, and

marketing.

understood as the outstanding practice in the particular process or function, i.e.

producing

the best results, among those in the same industry. Rural finance, as defined by the

World Bank(WB Report-2004), includes a range of financial services such as

savings, credit,

payments and insurance to rural individuals, households, and enterprises, both farm

and

non-farm, on a sustainable basis. It includes financing for agriculture and agro

processing/agribusiness.

Microfinance is the provision of financial services for poor and low income people

and also covers the lower ends of both rural and agriculture finance. It includes

financing

both in rural and urban areas. Consistent with these operational distinctions,

agricultural microfinance can be defined as referring to the overlap of agriculture

finance andmicrofinance dedicated to providing financial services to poor agricultural

households.

Importance of AgriFinance

Availability of agrifinance is a prerequisite for enhancing productivity and

improving standard of living by breaking the vicious circle of poverty of small

farmers. It has been observed that farmers usually utilize the credit facility to meet

short term credit needs mostly for purchase of inputs. The banks are also interested

in extending short term credit. The

hbl internship replor t for finance

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