Sundus MumtazInternship Report

COMSATs Institute of Information Technology

Bachelors In Business Administration

Semester 7

FA11- BBA- 114

Duration : 21st June 2014 to 31st July 2014

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Executive Summary

The experience working at HBL was phenomenal & remarkable. It was a delightful saga & drive of

erudition that unquestionably cleared the perceptions of banking. Banking is a power that reckons and possesses the finest people in the

nation serving all the businesses. This learning was all about serving others in the best possible

approach.

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Acknowledgement

I am actual much obliged and offer salutation to my parents & instructors who have assisted me in

shaping this report. I’m gratified to the Area Manager SirSohail Siraj as well as Sir Mir Ahsan for

his unconditional support.I am also thankful to the whole staff of Habib Bank

Ltd for their demonstrative provision.

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Table of ContentsCONTENTS Page Number

Executive summary ………………………………………………………………………………… 2Acknowledgement ……………………………………………………………………………….…. 3Introduction Banking evolution …………………………………………………… 5 Structure of Financial Sector in Pakistan …………………… 8 Habib Bank Limited …………………………………………………9

Company’s background ………………………………………………………………...… ….10Habib Bank’s Privatization …………………………………………………………………..11HBL’s Mission ……………………………………………………………………………………12HBL’s Vision ……………………………………………………………………………………..13

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HBL’s Administration …………………………………………………………………………14Departmentalization at Habib Bank Limited

Account Opening Department…………………………………..17 Cash Department …………………………………………………….19 Clearing Department………………………………………………..20 Transfer Department………………………………………………..23

Project Assigned…………………………………………………………………….……………26SWOT Analysis…………………………………………………………………………………..40Conclusion………………………………………………………………………………………….44Recommendations & Suggestions…………………………………………………………..45

Chapter # 1

INTRODUCTION

1.1 Evolutions of Banks

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The word “bank” has been derived from the French word

“banque” or bancus which means bench, office or institution for

the keeping, lending and exchanging of money. Some authorities

have the opinion that “Bank” is derived from the “Germen” word

back which to the meaning of “joint stock fund”. The bank is a

financial institution that borrows money from one party and lends

to the other party (Government, individual, business) and the

difference between borrowing and lending rate of profit/Interest

for the bank. Bank borrows and lends money on interest basis.

History of bank is very old; the history of bank is traced to as

early as 2000 B.C. The priest in Greece used to keep money and

valuable of the people in temples. Its origin is also traced to early

goldsmiths. They used to keep strong safe, for storing the money

and other valuable of the people. People with surplus money

deposited with them. The first stage in the development of

banking was the acceptance of deposits from people. Later on

goldsmiths began to issue receipts for the money deposited with

them to settle transactions. These receipts were used in payment

of debt and acceptable to all. This was the second stage towards

the development of banking.

When goldsmiths realized that they had surplus money therefore

they intended to lend some portion of money to he nearly traders

and merchants who constantly requested for loans This business

was quiet profitable and they instead of charging interest from

depositors began to give interest on the money deposited with

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them to attract more people this was the third stage towards the

development of banking.

They also planned to allow the customers to withdraw in excess of

the amount deposited to meet the customer’s needs. This facility

is called overdraft and they used to keep some portion of money

for this purpose. After some time there was then started too much

confusion in the banking system and they were not able to meet

the demands of customers. This failure on the part of money

lender to return money caused distress

among the people.

To overcome this problem people felt that their must be a bank

which control the banking activities of different lending

organization.

Banks are classified according to their sphere of activity; the

main types of banks are as under.

Commercial bank

Industrial banks.

Agricultural banks.

Saving banks.

Exchange banks.

Central banks.

Cooperative banks

1.1.1 COMMERCIAL BANK:

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An institution which accepts deposits, makes business loans, and

offers related services. Commercial banks also allow for a variety

of deposit accounts, such as checking, savings, and time deposit.

These institutions are run to make a profit and owned by a group

of individuals, yet some may be members of the Federal Reserve

System. While commercial banks offer services to individuals,

they are primarily concerned with receiving deposits and lending

to businesses. Commercial is engaged in performing the routine

duties of banking business. Such bank collects the money from

the people (as borrowing) and extends the same money as a loan

for development purposes. Commercial bank plays a vital role in

the economic development of a country by performing the variety

of function as given below:

1. Accepting of deposits (Current, saving and fixed account).

2. Making loans and advances (overdraft, cash credit,

discounting bill).

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1.2 Structure of Financial Sector of Pakistan:

Pakistan's banking sector has been remarkable and unprecedented. Classified as Pakistan's and region's best performing sector, the banking industry's assets have risen to over US $97 billion with profitability of Rs 187 billion. Pakistan microfinance regulation had been ranked number 1 in the world by the economist intelligence unit of the economist magazine 2010 and 2011.

Pakistan has become one of the fastest growing markets for branchless banking in the World. These developments include increased competition, technological innovation, new business models, transformation in customers' needs and behaviors, and regulatory proportionality.

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International development agencies and media have now been highlighting Pakistan for its market and institutional environment for branchless banking.

Pakistan’s financial sector consists of the following type of entities:

i. Scheduled Banksii. Development Finance Institutions (DFIs)iii. Micro Finance Institutions (MFIs)iv. Non-Banking Finance Companies (NBFCs)v. Insurance Companiesvi. Modarabasvii. Directorate of National Savings (DNS)

1.3 Habib Bank Limited

The Habib Bank Ltd is a leader in Pakistan's services industry.

An extensive network of 1425 domestic branches – the largest

in Pakistan and 55 international branches has enabled HBL to

provide comprehensive services that meet customer needs.

This has ensured thriving client relationships that form the

backbone of the Bank's operation.

Today, HBL plays a central role in Pakistan's financial and

economic development. It has come a long way from its

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modest beginnings in Mumbai on August 25, 1941 when it

commenced operations with a fixed capital of 25,000 rupees.

Habib Bank has been a pioneer in providing innovative banking

services. These have included the installation of the first

mainframe computer in Pakistan followed by the first ATM and

more recently, internet banking facilities in almost 1425 domestic

branches.

The Bank's towering presence in Pakistan's financial and

commercial life has remained unchanged over the decades.

The strength of its brand and image is symbolized by its

prominent Head Office building that has dominated Karachi's

skyline for35Years. Following are the values of HBL

Integrity Meritocracy Team Work Innovation

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Chapter # 2

COMPANY’S BACKGROUND

HABIB BANK was the first commercial bank to be established in Pakistan in 1947. Over the years, HBL has grown its branch network and become the largest private sector bank with over 1,500 branches and 1,400 ATMs across the country and a customer base exceeding five million relationships.

The Government of Pakistan privatized HBL in 2004 through which AKFED acquired 51% of the Bank's shareholding and management control. HBL is majority owned (51%) by the Aga Khan Fund for Economic Development, 42.5% of the shareholding is retained by the Government of Pakistan (GOP), whilst 7.5% is owned by the general public i.e. over 170,000 shareholders following the public listing that took place in July 2007. The main aims for which this bank was establish are mentioned below

Mobilize private savings and public funds and ensure their

availability.

To promote industrial agriculture and socioeconomic

process

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Help under developed areas and create employment

opportunities

Assist the people of Pakistan serving overseas to

effectively

Profitably invest their foreign

Create a diversified and sound portfolio for utilization of

idle funds

Create new ventures for investments ensuring maximum

return

Participative and seek the share of the country in the

capital market

Eventually paving the way for establishing a stock market.

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Chapter # 3

3.1 Habib Bank’s Privatization

Habib Bank privatization is the hallmark for compliance with corporate governance practices. A tremendous increase in deposits and overwhelming profits of approximately Rs. 22.3 bn (PKR) for the financial year 2012, a network of over 1,500 branches, and recent acquisition ofciti bank, personal loan and car financing divisions are the milestones which HBL has achieved on account of good corporate governance.On 13 June 2002, Pakistan's Privatization Commission announced that the

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Government of Pakistan would grant the Aga Khan Fund for Economic Development(AKFED), a subsidiary of the Aga Khan Development Network, majority ownership of HBL against an AKFED's investment in the bank.

Chapter # 4

4.1 Habib Bank Limited Mission

“To Be A Strong And Stable Financial Institution Offering Innovative Products

And Services While Contributing

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Towards The National Economic And Social Development”

HBL wants its investor(s) to prosper, to make their staff excel and to create value for our stakeholders.

To mobilize private savings and public funds for diverting the same intoproductive channels and ensure their availability.

To promote industrial agriculture and socioeconomic process through the active participation of private and public sector in the province.

Help under developed areas and create employment opportunities, especiallyin the rural areas of the province.

Further, to guide and assist the people of Pakistan serving overseas to effectively and profitably invest their foreignsavings in the province as well as in other parts of Pakistan.

Create a diversified and sound portfolio for utilization of idle funds and their investment in the existing and new ventures especially in the pioneering of high-techs agro-based export oriented and engineering project to ensuremaximum returns.

Participative and seek the share of the country in the capital market of Pakistan by way of subscription through locally peopled resources in theleading stock exchange of the country and eventually paying the way for establishing a stock market in the province.

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Chapter # 5

5.1 Habib Bank Limited Vision

"To Be A Quality Financial Service Provider Maintaining The Highest Standards In Banking

Practices"

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Chapter # 66.1 Habib Bank Limited Administration

ORGANIZATIONAL STRUCTURE OF HABIB BANK

LIMITED

PRESIDENT AND CEO

7 MEMBERS OF BOARD OF DIRECTORS

G.E, IOBGG.E, CPODG.E, CPCSG.E, RBGG.E, CIBGG.E, ARMG.E, AGAHEAD OF

IT

HEAD OF HRHEAD OF FINANCE

SENIOR VICE PRESIDENTS

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VICE PRESIDENTS

ASSISTANT VICE PRESIDENTS

GRADE I OFFICERS

GRADE II OFFICERS

GRADE III OFFICERS

CLERICAL STAF &NON-CLERICAL STAFF

6.2 Members of Board of Directors :

G.E GROUP EXECUTIVE

IOBG INTERNATIONAL AND OVERSEAS BANKING GROUP

CPODCORPORATE PLANNING AND ORGANIZATIONAL DEVELOPMENT

CPCS CREDIT POLICY AND COMPANY SECRETARY

RBG RETAIL BANKING GROUP

CIBG CORPORATE AND INSTITUTIONAL BANKING GROUP

ARM ASSETS REMEDIAL MANAGEMENT

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AGA AUDIT AND GENERAL INFORMATIOn

6.3 Members Of HBL Base Chaklala Branch

AREA MANAGER MIR AHSAN

OPERATION MANAGER AMIR SHAHZAD

SENIOR SUPERVISOR HUSNAIN & SHABBIR GONDAL

CHIEF TELLER MUNAWAR SIR

TELLER FATIMA, SABEEN KHAN & WAQAS

CUSTOMER RELATIONSHIP OFFICER SANA & AZZUHARA

ACCOUNT OFFICER HAIDER ZEB, ADNAN & MOYE UDIN

TRANSFER & REMITANCE SIR SHAHID

CLEARANCE OFFICER SHAHNAZ MAM

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Chapter # 77.1 Departmentalization HABIB BANK BASE CHAKALA

This department consists of the following sections:- 7.1 Account opening section. 7.2 Cash section. 7.3 Clearing section. 7.4 Remittance section.

7.1 ACCOUNT OPENING SECTION:

7.1.1 HOW TO OPEN AN ACCOUNT: There are certain formalities which are to be observed for opening of a current or saving account with a Bank. These formalities in brief are as under. FORMAL APPLICATION: The customer is to fill "Account Opening Form. It is a formal request by a customer to the bank to allow him to have and operate the current or saving account. SPECIMEN SIGNATURE:

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When the Banker is satisfied about the integrity of the customer, he agrees to open the account. The Banker obtains the specimen signatures of the customer on the signature book or on card.

MINIMUM INITIAL DEPOSIT: In Pakistan the current account can be opened with a minimum of Rs. 5000/- and PLS Saving Account with a minimum of Rs 1000/- These amounts are also the minimum balances to be maintained by the account holders with the Bank.

7.1.2 OPERATING THE ACCOUNT:When an account is opened in a Bank, the Banker gives to the customer. i. Pay in slip book. ii. Cheque Book and pass book with a view to operate it.

7.1.2 WITH-DRAWL:Withdrawal is made on cheques supplied by the Bank. A new cheque book is issued only on receipts of the requisition slip attached to the cheque book issued previously.

7.1.3 INTEREST:The current rate of interest allowed on deposit in saving Bank account is ascertained at the Bank. This rate is subject to change. The amount of interest is calculated for each calendar month on the lowest balance at credit of an account between the close of the 1st day of a month and the end of the month and only on every complete sum of ten rupees. Every account is made up half yearly to 30th June 31st December, and the interest calculated as above is added to the balance of each account as on these dates.

7.1.4 TRANSFER OF AN ACCOUNT: Account can be transferred to any other branches of HBL. free of charge. If a depositor wants to transfer his account, he presents

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his pass book personally or sends it to Bank and writes an application for the transfer of an account.

7.1.5 CLOSING OF AN ACCOUNT: It is done simply on letter or request for closing the account, unused cheque leaves on hand are also surrendered at the same time.

7.1.6 SECRECY: The secrecy of depositor’s account is the. Responsibility of every official engaged in the Bank service.

7.1.2 TYPES OF BANK ACCOUNT:

SAVING ACCOUNT:Saving Account is that account in which customer puts his surplus money which he saves from his daily expenditure. The account can be operated by depositing a minimum cash of Rs. 1000/-. Small percentage of interest is allowed on the balance of this account.

CURRENT ACCOUNT: The current account is that one which the customer draws his daily cheques and is normally operated by the Business-men. It can be operated by minimum amount of Rs. 5000/- Any number of cheque can be issued by the account holder for withdrawal or for payment. No interest is allowed on this account.

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

PROFIT AND LOSS SHARING ACCOUNT. This can be operated by a person, firm or organization by depositing Rs. 1000/- or above. The holder of this account will get profit of his amount, or he will bear the loss as the case may be. So an individual is equally participant in profit and loss.

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The holder of account can withdraw up to Rs.15,000/- per month, in case of higher withdrawal, seven day prior notice is necessary, but in practice have not seen it. This account is operated under interest free system.

FIXED DEPOSIT ACCOUNT. In this account an amount is deposited into the Bank for a fixed period of time. The fixed period may be three months, six months, one year, two years, five years and more. The Bank allows a higher rate of interest for larger period. At the time of operating on account the Bank issues deposit certificates for the period and amount. The account holder can withdraw his amount before the specified period, but refunding the excess profit paid at higher rate and the same Bank will allow loan against that certificate. Bank is liable to give interest on this account on maturity date is monthly or quarterly or six month.

7.2 CASH SECTION :

Every bank has this section as it’s the main function of the bank. Every bank lends & borrows money & pay mark up or charge interest on its customers. The basic working of this department is to lend money at a particular interest rate and also maintain the deposits and lend them to other people for investment. The difference between the interest paid & the markup they provide is called Spread & is source of income for banks.Further more the cash department is also responsible for the making payments or collect deposits that can be current or saving and also helping in the payments and collections of funds, utility bills etc. In the above mentioned forms, the bank makes an agreement with his customers for their deposits.

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7.3 CLEARING SECTION:

Every Bank performs the paying and receiving functions. Cheques are collected which are drawn up to Banks for customers. Similarly the cheques drawn on different Banks and deposited by Banks own customers for collection within the city is know as clearing The functions of receiving and paying is mostly done through the clearing house. A clearing house can be defined as "AA place where that representatives of all Bank get together to settle the receipts and payment of cheques drawn on each other" Clearing House provides the facility which can hardly be dispensed with especially, in case of crossed cheques. There are two main types of clearing. i Outward clearing ii Inward clearing.

7.3.1 OUTWARD CLEARING: It includes those cheques and other instruments which are sent by the Bank to the Banks for payment on behalf of its own clients. Cheques are sent to clearing house thorough local main branch. A delivery message from the local main branch comes to every branch at a fixed time to pick its outward clearing or outward returns as the case maybe. Outward Clearing at Branch

o Account number of payee/endorsee is written on the back side of the cheques.

o The instrument and the paying in slips are separated. o The instruments are sorted I Bank-wise and branch

wise. o Schedules are prepared. o Jotting of all the schedules are taken in the clearing

House statement. Amount of the chequeso in written in the "Delivered" and to pay column.

o After balancing the outward clearing, the pay in slips are released to C.D department.

o After balancing, a transfer debit voucher is prepared.

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o The instrument, schedules are delivered to the messenger from the main branch.

7.3.2 INWARD CLEARING. The cheques drawn are called inward clearing drawn on Habib Bank through its representatives. On the Bank presented by other Banks for payment it includes those cheques and other instruments of Pakistan branches which other Banks present at the clearing house. Inward Clearing at the Drawn Branch

o Numbers of instruments noted in the schedules are verified immediately on receipt.

o The amount's of all the instruments are jotted down and totaled. If should be equal to

o the amount mentioned in schedule from the local main branch.

o The amounts are debarred to the relevant accounts if otherwise in order.

7.3.3 TYPES OF CHEQUES COLLECTED BY CLEARING SECTION:

7.3.3.1 TRANSFER CHEQUES:These are the cheques which are collected and paid by same branch of HBL For example Mr. Ali is a customer of HBL of CITY branch and draws a cheque in favor of Mr. Hussain who is also the customer of the same branch. 7.3.3.2 TRANSFER DELIVERY CHEQUES:The cheques which are collected and paid by two different branches of a Bank situated in the same city. For example a person draws a cheque on N.B.P. main branch, D.I.Khan in favor of another person who maintains an account with N.B.P. RakhMandra branch, D.I.Khan.

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7.3.3.3 CLEARING CHEQUES: When the payee/endorse and the drawer of cheque maintains account with different Banks, the collection Bank in any one of the following methods:- a. It can collect cash by sending its representative with the cheques to each of the paying Banks. It is not so much appropriate. b. The Bank maintains an account with the paying Bank. c. The cheques can be exchanged by representative of the various Banks who meet at a fixed time and at a fixed place. This is the most efficient method of collection and paying cheques.

7.3.4 FUNCTIONS OF CLEARING SECTION IN A BRANCH:

To accept transfer, transfer delivery and clearing cheques from the customer of the branch and to arrange for their collection.

To arrange payment of cheques drawn on the branch and gives for collection to any other branch of H.B.L. or any other member or such member of local clearing house.

To collect amounts of cheques drawn on members of the local clearing house sent for collection by N.B.P. branches not represented at the local clearing house.

7.3.5 PROCEDURE FOR CLEARANCE OF CHEQUE:

The customers are provided with the copes of pay In-slip, whenever the customer wants to deposit any cheque, he fills in the pay in slip himself and hands it over the counter along with the instrument.

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7.4 REMITTANCE SECTION:Remittance means transfer of money from one place to another place. It is of two kinds.

I: Inland remittance. II: Home remittance 7.4.1 INLAND REMITTANCE. An inland remittance means a transfer of money payable at a certain place within the country. Inland remittances can be classified as under:- I: Within locality. II: Out side locality.

WITHIN LOCALITY:When a branch situated in D.I.Khan is required to send drafts to any other branch situated in the same city the process is know as within locality. For example HBL. Main Branch, D.I.Khan sends any draft to HBL. RakhMandar branch, D.I.Khan.

OUTSIDE LOCALITY: Outside locality is an important type of inland remittances, which means the transfer of money payable outside the city. For example, HBL. Main Branch D.I.Khan sends any draft to a Branch situated at LAHORE. It is commonly done through the following means:- Demand Draft (D. D)

DEMAND DRAFT (D.D): Demand draft is a written order by a branch of a specified Bank, drawn on another branch of the same Bank to pay a certain sum of money only to or to the order of the Payee. Demand drafts are purchased by the clients and after receipt of money Bank issues and delivers the D.D. to the purchaser, who himself sends it to the payee. In D.D. the Banks do not recover postal charges as it is payable by the purchaser. The Bank, after delivery of D.D. to the purchaser also sends its own advice called IBCO (Inter Branch

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Credit Order) to the drawee branch mentioning therein all details of issued draft.

Chapter # 8

PROJECT ASSIGNMENTUpdating Customer DataKnow Your Customer ZYC

Introduction

It’s the progression used by different businesses to validate the information provided by their clients. This is also referred to BANK REGULATIONS which preside over these activities. Banks, insurance companies & export credit agencies are increasingly demanding the proper use of KYC & to verify their integrity & probity. An inadequate or non existent KYC can result a subject to civil or criminal penalties. A standard form in the investment industry that ensures investment

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advisors know detailed information about their clients' risk tolerance, investment knowledge and financial position.

Customers are referred as the entity that opens or maintains an account as well as beneficial owners, beneficiaries of transactions performed by intermediaries.

Importance of KYC

The KYC is becoming progressively more significant to prevent theft, financial frauds, money laundering & terrorist financing. Its main focal point is to put off banks from being used deliberately or unintentionally through criminal elements. Further more it assists the banks in knowing their clienteles in greater detail & has better monetary transactions. This lends a hand to manage the probability of risks prudently.

Collection & analysis of basic identity information Customer Identification Program Determination of Risk Behavior of Transaction of Customer Source of Income Recording Profile of Clients Matching the Income with Transactions

Effective KYC requires continuous monitoring of customers base & the customer’s behavior of transactions. The accounts & account holders that may depict extra risk or complex nature transactions must be observed & undergo extra scrutiny. Banks can ser thresholds for transaction amounts that warrant enhanced due to diligence.

The project that was allocated to me was to bring up-to-date the customer’s data that were not updated during the Account opening process. The customers of HBL during account opening process provide detail description & proofs of their source of income, their perspective debits and credits along with their transaction behavior is mentioned

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but due to some slackness the data of 800 customers remained un-updated.Following is the practice to update the Customer details:

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TH is the transaction history to interpretation the transaction behaviors of customers, the account holder, the available balance, the nature and type of account. It also depicts the heads through which the amounts are credited. Your Transaction History lists the date and the amount of deposits along with the withdrawals.

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TH of this account reflects the Account title, Moheyyu DinThe nature of account expresses that’s Current Account, Basic Banking Account, customer number along with the account number. The details of why amount was qualified and withdrawn along with the obtainable balances every time any transaction took place on that particular date. From all these details we can assume that the account is opened for acceptance of remuneration & the foundation of income is income been

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generated through salary & is underneath 25000 PKR and furthermore, this account has not been opened for saving purpose.

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The key in MYSIS for updating Know Your Customer is ZYC.

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Subsequently, TH of this account we got to know that this account goes to Asia Iqbal with the account figure 04897900355603 And the customer number CBCD8AThe account is current account and is opened in Pakistani ruppee and the available balance is 55012.No additional particulars can be examined through TH, no facts can be seen that what are the reasons of amount credits in this account therefore we can get fine points of the account holder & her foundation of revenue by her consumer number by ECI equation in Mysis Software.

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The above information shows that the account is Individual account & the source of income is Others.As she is a house wife and is not working somewhere so the income source would be that she is getting income from his spouse or any family member or any shares she purchased. Consequently we need to verify the business details of her

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husband or any other details have to be given deeper interest to verify the information.

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Chapter # 9

SWOT ANALYSIS of HBL

The purpose of such analysis is to build on company’s strengths in order to exploit opportunities and counter threats and to correct company’s weaknesses. SWOT analysis is based on the assumption that if managers carefully review such strengths, weaknesses, opportunities, and threats, a useful strategy for ensuring organizational success will become evident.

Strengths and weaknesses typically relate to the internal environment of an organization, whereas opportunities and threats are brought about by the external environment of an organization. In the following section, both internal and external analysis of HABIB BANK IMITED is outlined:

9.1 INTERNAL ANALYSIS

Internal analysis of a firm is the analysis of its strengths and weaknesses. Unless a firm has internal strengths and controls its weaknesses, it cannot take advantage of

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opportunities and escape threats which the external environment presents. Following are the main strength and weaknesses of HBL.

9.1.1 Strengths

1. HABIB BANK is a well established bank enjoying long history.

2. HBL was the first privatized bank that gives it an edge over other nationalized banks as it can develop any strategy consistent with the demand of market and free from any political or bureaucratic influence.

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

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

5. HBL is the market leader in introduction of e-banking and it has the largest ATM network in the country.

6. The Bank’s Rupee Traveler Cheques have been market leaders for the past six years.

7. HBL was rated the best domestic bank for two consecutive years of 2000and 2001 by Euro money, a leading international publication.

8. HBL has forged strategic alliances with international banks for expanding its network further, both locally and internationally.

9. HBL has the ability to bring innovative products and services like personalized service, electronic funds

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Transfer, sophisticated financial products such as electronic banking, auto-teller machines and evening banking.

10. HBL has been very effective in controlling costs as it successfully restructured itself after its privatization. During this process more than1,600 employees were relieved under a golden handshake scheme and110 branches were closed.

11. Excellent branches appearance gives an edgeto HBL over other banks. The branches are well furnishedeven in less developed areas where other banks’branches give a poor view.

9.1.2 Weaknesses

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

1. Mission of HBL is not well distinct.2. Though HBL is second largest bank in

Pakistan, yet the fact remains that it isnot market leader as NBP. Its total assets is always less than NBP total aasets.

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

4. Employees at branch level are not properly motivated to work. Job rotation is not found in this organization.

9.2 EXTERNAL ANALYSIS

An organization has to monitor its environment constantly to keep up with new developments and changes in the environment. A change in the external environment may be either an opportunity or threat. In either case, the organization has to properly use it strengths to avail the opportunities and avoid or minimize the negative effects of threats. Following are the main opportunities and threats of HBL.

9.2.1 Opportunities

An opportunity can be defined as a change in external environment which if properly exploited with the

organizational strengths will result in enhanced sales, market share, or income. Using its strengths, MCB can

avail the following opportunities:

i. H.B.L. is oldest bank in the country people do rely on this bank with some additional

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efforts bank can attract high deposit from Pakistan and overseas.

2. Instead of emphasizing on big & long term projects bank should concentrate on small scale investments heaving small maturity period.

3. Now-a-days H.B.L. has been investing almost 18% of its total investment on cotton business, along with investment in cotton it should invest in other cash crops, i.e. Rice, Sugar Cane, Tobacco, Wheat etc and their related agro based industry.

9.2.2 THREATS

1. First threat that bank has to face is the Privatization, downsizing & restructuring these changes could make drastic effects as well.

2. New incoming local & specially foreign banks those are main cause of stiff competition in the market

3. DFI’s are going very well in financial set up of Pakistan. So, these are also effecting on the operations of bank. Along with other threats the threat of corruption has vital importance.

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CONCLUSION

The competition tends to increase with the passing time, in order to maintain better position HBL

needs to work on employee retention & customer satisfaction and should remove all the weaknesses.

As the draw backs have removed then bank will not only join its previous position rather we hope it

will be rated among world top ten bank.

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Chapter # 10

Recommendations & Suggestions

The bank must propose proper employee motivational strategies as I have observed the lack of motivation among all employees.

The management must take actions & promote the competent individuals; it feels that the promotion process is moderately slow.

Employee retention strategies should be projected.

Customer dealings should be given more weighted.

Despite of so many advancements, manual work is more promoted. This should be discouraged.

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HBL should also focus on its marketing strategies so that the market share could be increased.

……………………………………………………………………………………………………….

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