remaing repo

7/27/2019 Remaing Repo

1/51


2/51

Page 2 of51

DEFINITIONS OF BANK

ACCORDING TO BANKING COMPANIES ORDINANCE 1962

Banking means the accepting for the purpose of lending, or investment, of

deposits of money from the public, repayable on demand or otherwise, and

withdraw able by cheque, draft, order or otherwise.

(1) Banks do business of money. Rather banks do business of lending and

borrowing loans.

(2) Banks are guardian distributor of cash money

(3) Banker or a bank or a person or company carrying on the business

receiving moneys and collecting drafts for customers subject to the

obligation of honoring cheques drawn upon them from time to time by the

customer to the extent of the amount available on their current accounts.

The name bank is derived from Latin word banchomeaningdesk/bench, used

During the renaissance by the Florentines bankers, who used to maketransactions above a desk covered with a green table cloth.

The first modern bank was founded in Italy in Genoa in 1406; its name was

Banco di San Giorgio (Bank of St.George).

The word bank can be traced down to the ancient Roman Empire, when

money lenders would set up their stalls in the middle of an enclosed

courtyard called macella on a long beach called bancu.


3/51

Page 3 of51

INTRODUCTION ABOUT BANKING SECTOR

Word Bank is said to be derived from the words Bancusor Banque thatmeans a bench.

Other authorities hold the opinion that the word Bank is derived fromthe German word Back which means joint stock fund.

Later on, when the Germans occupied major part of Italy, the wordBack was Italianized into Bank(Aslam, 1999)It is therefore, not

possible to decide as to which of the opinions is correct, for no record

is available to ascertain the validity of any of the opinion.

Banking is the business of providing financial services to consumersand businesses.

The basic services a bank provides areo checking accounts, which can be used like money to make

payments and purchase goods and services

o savings accounts and time deposits that can be used to savemoney for future use;

o loans that consumers and businesses can use to purchase goodsand services; and

o basic cash management services such as check cashing andforeign currency exchange.


4/51

Page 4 of51

ANALYSIS OF BANKING SECTOR IN THE PRESENT

DECADE

The Banking sector, which was fully dominated by Nationalized Commercial

Banks (NCBs) until a few years ago, has been opened up to the private

sector.

Four of out five largest NCBs have been privatized.

While the ownership and management of the banks by private sector is one

pillar of the reforms, the other pillar is a strong regulatory environment.

Private banks are prone to taking excessive risks in their lending as their

own capital is much lower in relation to the depositors money.

It is the responsibility of the central bank as a regulator to be extremely

vigilant and take prompt timely action to prevent the bank managers and

owners from assuming excessive risks.

The Central Bank in Pakistan has strengthened its capacity by acquiring new

skills, upgrading the quality of the existing human resources base, adopting

technology and re-engineering business processes.

The banking regulation and supervision are risk-based and are fully

compliant with the international standard sand codes prescribed by Basle

Committee.

The financial soundness indicators show a healthy and sound banking

system with high degree of financial stability.

Along with strong regulation, supervision and enforcement, a number of

measures have been taken to put best corporate governance practices in the


5/51

Page 5 of51

system by prescribing fit and proper criteria for Chief Executives, members

of the Boards of Directors and top management positions.

Accounting and audit standards have been brought to the International

Accounting Standards (IAS) and the International Audit Codes.

External audit firms are rated according to their performance and

track record and those falling short of the acceptable standards are

blacklisted

The banking sector has now diversified its product base and carried out a lot

of innovation.

They have expanded their outreach to agriculture, SMEs, mortgage financing

and consumer financing.

Not only that this diversified lending portfolio mitigates risks but it also

raises the purchasing power of a large segment of population that was

completely shut out from credit markets.

Pakistans auto industry has expanded its car production by a multiple of fivetimes in the last four years as auto financing enabled a vast number of

middle class income earners to purchase the cars on monthly installments.


6/51


7/51

Page 7 of51

INTRODUCTION OF ASKARI BANK

ARMY WELFARE TRUSTBeing a subsidiary business unit, Askari Bank Limited is powered by Army

Welfare Trust.

Army Welfare Trust enjoys a unique and proud history.

The Pakistan Armed Forces have established several organizations for

running industrial and commercial enterprises.

These organizations provide employment for ex-servicemen, besides

creating job opportunities for others.

These organizations include Army Welfare Trust (AWT), Fauji Foundation and

Shaheen Foundation.

Army Welfare Trust has established a reputation as a leader in the corporate

sector.

Its story is that of perseverance, innovation, business acumen and going

beyond the frontiers in agriculture, cement, pharmaceuticals, leasing,

insurance, banking, energy, information technology and many other diverse

fields.

VISION

To be the bank of first choice in the region.

MISSION

To be the leading private sector bank in Pakistan with an international

presence, delivering quality service through innovative technology and

effective human resource management in a modern and progressive

organizational culture of meritocracy, maintaining high ethical and


8/51

Page 8 of51

professional standards, while providing enhanced value to all our

stakeholders, and contributing to society.

NAME, LOGO AND INTERPRETATION

The management and board of directors of the bank decided to change the

name of the bank from Askari Commercial Bank Limited to simply Askari

Bank Limited.

This was for multiple reasons

Firstly, the bank was generally referred to as "Askari Bank". Secondly, in the current scenario, the word "commercial" has

become redundant since all banks are commercial banks.

The change of name presented an excellent opportunity for a fresh new look

for the bank, which would be a reflection of the bank's desire to continue to

evolve with and adapt to the changing environment and dynamic consumer

needs.

A: Simplicity in Design

The typefaces used for the logo are simple yet elegant. Without being overly

stylish, they make a solid statement about the bank, its approach to

business while maintaining the most critical aspect of any logo's design:

readability. This is loosely defined as the ability of any text to be readable

and recognizable at first glance. The new "Askari bank" logo is distinctive

and can be recognized instantly on sight. The use of all lower case letters

and the use of "Askari" and "bank" as one word gives the logo a unique

identity, enabling it to stand out from the crowd


9/51

Page 9 of51

B: The colors

Change and evolution being the key driving elements of the new brand

identity, the colors of the bank have been revisited completely. The new

colors are blue and grey, with a touch of orange/yellow. Understanding this

selection needs a basic study of color psychology. Blue is the color of

peacefulness, loyalty, productivity and strength (or solidity). It is a color that

induces positive emotions in the human body and its effects on productivity,

even human strength, have been documented. Body builders work in blue

rooms to be able to lift heavier weights.

The second color used is a dark grey. This is the color of elegance, respect,

wisdom and balance.

Darker shades of grey are said to be more representative of the propertiesof the color black, which are modernity, power, sophistication and wealth.

However, by being grey and not black, it avoids the connotations of death,

fear, etc.

The last two colors, orange and yellow, are used in a combination which is

representative of a rising sun. The colors themselves, aside from the positive

connotations of a rising sun, carry the joint properties of sunlight, joy,

happiness, hope, wealth, energy, enthusiasm.

C: The stylized "AB"

Evolution, not revolution, is a key in the development of a brand. The

stylized AB, presented in 3D and in the new brand colors, is a solemn nod to


10/51

Page 10 of51

the outgoing logo design, which has served the bank very well for the first

15 years of its existence. Retaining this icon maintains the recognition of the

old logo, while also creating a positive link between the past, present and

future of Askari bank.

WEBSITE

Detailed corporate information together with this annual report, product and

service offerings along with contacts of branches / offices can be accessed at

the Banks website:www.askaribank.com.p
http://www.askaribank.com.p/http://www.askaribank.com.p/http://www.askaribank.com.p/http://www.askaribank.com.p/


11/51

Page 11 of51

PRESENT STATUS OF ASKARI BANK

Askari bank is the only bank in the world run by an army; serving AdjutantGeneral of Pakistan Army being head of the Board of Governors

Askari Bank has expanded into a network of 226 branches, including 31

dedicated Islamic banking branches, and a wholesale bank branch in

Bahrain. A shared network of 4,173 online ATMs covering all major cities in

Pakistan supports the delivery channels for customer service.

Since inception, the bank has concentrated on growth through improving

service quality, investment in technology and people, utilizing its extensive

branch network which includes Islamic and Agricultural banking.

It has been successful in providing commercial banking facilities to its

customers and has developed a good reputation among Pakistani Banks.

In the coming years, Bank plans to open a number of new branches to

ensure that its customers get benefit in the form of extended branch

network and comprehensive product and services.

Over the years the management has succeeded in establishing an ideological

base for the employees to build the bank upon customer loyalty, provide

service with dedication and development of a wide range of products for the

customers to choose from.


12/51

Page 12 of51

Where the bank stands today financially, is depicted by following chart


13/51

Page 13 of51

BUSINESS INITIATIVES

Bank strives to enhance its product range through product innovations and

enhancements. During the year a significant headway has been made

towards completing the institutional arrangements for branchless banking

initiative (mobile phone banking) which is planned for launch in the ensuing

year.

Banc assurance product was launched in 2010 in collaboration with a partner

Eastern Federal Union (EFU) Life Insurance Company gained momentum

during the year 2010-11.

The bank aims to further enhance performance standards through

implementation of innovations in products by discovering new avenues of

clients benefit. This customer focused strategy has enabled Askari Bank to

evolve as a single source financial service provider of corporate and retail

banking services and regarded highly by its customers.

FLEX CUBE SOFTWARE:

Askari bank is using FLEX CUBE software to do banking transactions. As we

know that in banks numbers of transactions are made in a day. To have a

proper record and to control the activity bank needs this software.

GROWTH

"There is no sin punished more implacably by nature than the sin of

resistance to change

Askari bank live in a moment of history where everything is changing so fast

that it begin to see the present only when it is already disappearing


14/51

Page 14 of51

Banks customer needs are changing and their expectations are growing.

Technology is fast proliferating the distribution channels and now banking

services can be accessed from multiple contact points. Askari believe that

balanced growth is the key to survival in today's global banking

environment.

From a humble beginning with just 7 branches in 1992, today Askarienjoy a network of more than 150 outlets in Pakistan, spread across

the country. A network of self-service ATMs supports these outlets.

Banks total assets now exceed Rs.50.9 billion and have over 17products and services to match customers individual needs.

Bank's equity base stands at Rs. 2.58 billion with 20%growth over thelast 5 years.

The human resource capital of the bank today exceeds1,200employees.

As part of bank growth strategy, Askari bank is now extending itsbanking services to the remote and rural areas.


15/51

Page 15 of51

BRANCHES


16/51

Page 16 of51

ORGANIZATIONAL MANAGEMENT CHART

Chairman

Board of Directors

Chief Executive Officer

Executive Committee

Executive Inchar es

Area Manager

South

Area Manager

North


17/51

Page 17 of51

MANAGEMENT STRUCTURE

Askari Bank is proud of its human resource, as almost all the employees

have been handpicked by the management. However, in this section, I

would discuss those people who are responsible for hiring such a bright staff

and establishing a magnificent bank. These are the higher management of

Askari bank limited.

THE CHAIRMAN:

Lt Gen Javed IqbalPRESIDENT AND CHIEF EXECUTIVE OFFICER:

Mr. M. R. MehkariBOARD OF DIRECTORS:

Lt Gen (R) Tahir Mahmood

Malik Riffat Mahmood Mr. Zafar Alam Khan Sumbal Dr. Bashir Ahmad Khan Mr. Ali Noormahomed Rattansey, FCA Mr. Shahid Mahmud Mr. Muhammad Riyazul Haque Mr. Wazir Ali Khoja

Khawaja Jalaluddin Roomi Mr. M. R. Mehkari

AUDIT COMMITTEE:

Dr. Bashir Ahmad Khan


18/51

Page 18 of51

Mr. Ali Noormahomed Rattansey, FCA Mr. Wazir Ali Khoja Khawaja Jalaluddin Roomi

CHIEF FINANCIAL OFFICER:

Mr. Saleem Anwar, FCACOMPANY SECRETARY:

Mr. M. A. Ghazali Marghoob, FCAAUDITORS:

KPMG Taseer Hadi & Co (Chartered Accountants)LEGAL ADVISORS:

Rizvi, Isa, Afridi & AngellSHARIAH ADVISOR:

Dr. Muhammad Tahir MansooriREGISTERED / HEAD OFFICE:

AWT Plaza, The Mall,

P.O. Box No. 1084

Rawalpindi-46000,

Pakistan.

Tel: (92 51) 9063000

Fax: (92 51) 9272455

E-mail: [email protected]


19/51

Page 19 of51

REGISTRAR AND SHARE TRANSFER OFFICE:

THK Associates (Private) Limited

Ground Floor, State Life Building No. 3,

Dr. Ziauddin Ahmad Road,

P.O. Box: 8533

Karachi-75530

Tel: (92 21) 111 000 322

Fax: (92 21) 35655595


20/51

Page 20 of51

ORGANOGRM OF ASKARI BANK LIMITED

BOARD OF DIRECTORS

Executive Committee

President and Chief

Executive

Internal Audit

Corp. Banking &

Fin. Inst. Group

Operating and

credit group Regions

Retail Banking

Group

Credit Cards

International Credit

Rawalpindi/

Islamabad Asset Products

Planning and

Corporate affairs

Treasury

Electronic

Technology

North Investment

products

Human Resource

Corporate and

Merchant Banking

Systems and

Operations Lahore

Finance

Data ReportingEast

Legal Affairs South I

South II

West


21/51

Page 21 of51

ASKARIs OPERATIONAL DEPARTMENTS

The general banking department is the one which deals with the general

banking operations and activities that are mostly routine work on daily

bases. It can be further sub divided into the following departments

A. Account opening department.B. Clearing departmentC. Remittance departmentD.Accounts department.E. Cash Department.F. IT Department

A: ACCOUNT OPENING DEPARTMENT

This is the fundamental department that not only performs the fundamental

and basic operations but also deal the new as well as the retained clients of

the bank.

Main Duties:

It opens the accounts. Various information regarding account opening and account type are

also given here.

It deals in the lockers issuing and regarding information. It issues the Cheque Book and regarding issues. It deals in issuing and handling various matters regarding ATM, Debit

cards and Credit cards.

Very often, customers are given little services like assisting in fillingform, filling various deposit slips etc.


22/51

Page 22 of51

It also engages in record keeping of all the above mentioned activities.Some of these activities are quickly updated at the bank intranet

B: CLEARANCE DEPARTMENT

CLEARING DEPARTMENT

Meaning of clearing:

The word clearing has been derived from the word Clear and is defined as

a system by which banks exchange cheques and other negotiable

instruments drawn on each other within a specific area and thereby secure

payment for their clients through the Clearing House At specified time in an

efficient way.

1. Since clearing does not involve any cash etc. and all the transaction

take place through book entries, the number of transaction can be unlimited.

2. No cash is needed as such the risk of robbery, embezzlements and

pilferages are totally eliminated.

3. As major payments are made through clearing, the banks came

manage cash payments at the counters with a minimum amount of cash in

vaults.

4. A lot of time, cost and labor are saved.

5. Since it provides an extra service to the customer of banks without

any service charges or costs, more and more people are inclined and

attracted towards banking.


23/51

Page 23 of51

CLEARING HOUSE:

It is a place where representatives of all banks sit together and interchange

their claims against each other with the help of controlling staff of State

Bank of Pakistan And where there is no branch of State Bank of Pakistan the

designated branch of National Bank of Pakistan act as controlling member

instead of State Bank of Pakistan.

C: Remittance Department

First we have a look at definition of remittance that is given below

Remittance is transfer of funds from one place to another or from one

person toanother.This is important service provided by banks both to its

account holders as well as non-account holder. It is also income generating

source for bank. The unique distinction of this department is that it works for

the clearance of outside the city instruments presented by the clients or any

banks branch from outside the city. Then it makes the relevant remittances.

D: ACCOUNT DEPARTMENT

The most important task of this department is the maintaining and keeping

eye at records of past day activities that are taken place in the bank.

An important thing that takes place here is the daily verification and

matching of various transactions from their physical slips against the

computer generated reports. These reports are continuously updated by the

bank intranet and finally at the end of banking day, they are printed.

their physical prove are match to the computer generated report and save it


24/51

Page 24 of51

as a physical that these transaction are take place in the bank. It is for this

reason that accounts department is sometimes termed as the backbone of

bank.

A Second very important function of account department is that it is

responsible for budgeting and also record daily expense incurred by the bank

and its employees. The account department is also engaged with

correspondence with head office and other branches. Also it is responsible

for making statements like expenses, taxes etc. The reports generated by

this department may be daily, weekly, monthly, quarterly, semi annually as

well as annually. It depends upon the nature of activity. However mostly

simple activities required daily reporting.

E: CASH DEPARTMENT

This is the most important department. It deals with the physical movement

of cash in a bank. Cash is either deposited by customers in the bank or is

withdrawn by them. It also has to balance the debit side with credit side at

the end of the day. When a person wants to deposit amount in his account,

then he has to fill a deposit slip. The deposit slip is very simple in its format.

The customer has to fill his name, account number and finally the amount to

be deposited is to be mentioned both in numbers and words. In some cases,

the customer is said to narrate his address, national identity card number

and cell number at the back of slip. Often the customers are given

assistance in slip filling either by internees or relevant employees. The

deposit slips in Askari Bank vary to bit extent for current and saving

accounts. In case the customer gives cheque to draw certain amount, then

the customers account will be debited and money is paid to the customer.


25/51


26/51

Page 26 of51

FIELD OF ACTIVITIES

During my internship in askari, I noticed that the bank basically works under

three groups named as

1)Corporate banking and financial institutions group2)Retail banking group3)Operations and credit group.

1-CORPORATE BANKING AND FINANCIAL INTITUTION

GROUP

This Group is responsible for serving the needs of large corporate clients in

public and private sector, managing correspondent banking relationships and

undertaking money market transactions. The Group is organized in three

divisions namely

Corporate and Merchant Banking Division, International Division And Treasury.

CORPORATE AND MERCHANT BANKING DIVISION:

This Division is engaged in provision of financing facilities to large corporate

clients including multinationals. Principal activities include syndicated loans,

guarantees, and working capital finance, underwriting and advisory services.

The Division has played an important role in providing development finance

for the modernization and expansion of the country's core industries. Credit

risk is well diversified with exposures in sectors like fuel & energy,


27/51

Page 27 of51

chemicals, textiles and fertilizers. Three units have been set-up at Karachi,

Lahore and Rawalpindi for sales and operations, which are supported by

centralized marketing from the Head Office.

INTERNATIONAL DIVISION:

Mainly responsible for managing correspondent banking relationships and

planning overseas operations, the Division plays a vital role in extending

foreign trade transactions support to the branches. The Bank became a

member of SWIFT in the Year 2000 and is also a contributor to the equity of

Pakistan Export Finance Guarantee Agency Ltd With a network of 167

correspondents spread over 95 countries worldwide.

The Bank continued to reinforce its leadership position in trade finance,

transacting business of over Rs. 70 billion, during this year. Through the

concerted efforts of this Division, it is a participating Bank under the

"Pakistan Trade Enhancement. Facility" of the International Finance

Corporation, and our customers are entitled to avail of the "Political Risk

Guarantees Scheme" extended by the Asian Development Bank.

TREASURY:

It is responsible for managing Banks liquidity and foreign exchange

transactions. The treasury of Askari bank is one of the most active in the

market. Through reported transactions, purchase of Government paper and

foreign exchange trading, the Division adds substantially to the Bank'ssustained earnings.


28/51

Page 28 of51

2-RETAIL BANKING GROUP

Retail banking group was formed in 2000, this group is responsible for

serving the needs of the retail market. Focusing on individual consumers and

small and medium size enterprises, for purpose of product differentiation,

the group is managed in three business arms.

Investments products unit, Asset products unit, And the credit cards division.

INVESTMENT PRODUCTS UNIT:

Responsible for developing and managing brands which serve the

investment needs of the consumer market, this unit focuses on deposit

mobilization, provision of value added services based on modern technology

and undertaking the centralized marketing and advertising for the Bank. This

unit is also actively involved in the acquisition business and has signed-up

over 300 merchants nation-wide which offers shopping discounts to the

Bank's Privilege Card members.

Askari Bank's Value Plus is a unique deposits account, which offers

handsome monthly profits, accidental insurance cover, partial liquidity on all

time deposits and free Privilege Card membership. The Unit is also

administering the sales and distribution, including arrangement for strategic

partnership alliances for Askari- i-Net Banking, the first internet banking in

Pakistan, which allows routine banking transactions from anywhere in the

World, round the clock, over the internet.

ASSET PRODUCTS UNIT:

This Unit is engaged in the development and management of retail credit

schemes. The consumer market in Pakistan has not only grows exponentially


29/51

Page 29 of51

over the last decade or so, but the needs of this segment have become

extremely diverse. In order to sustain competition, it is but imperative to

continue offering innovative consumer credit schemes. With the launch of

Askari Bank's Personal Finance an Askar (auto-loans), this unit is emerging

as a significant contributor to the Bank's loan growth. The unit also

administers the first e-commerce banking solution in Pakistan, under the

brand name ASK-IBL online. This is a b2b automated credit transaction

module, offering merchandise credit to retailers on goods purchased form

one of the largest distributors n the country. Strong collection and prudent

risk management policies have restricted delinquencies to very low levels.

CREDIT CARDS DIVISION:

This Division manages Askari Master Card brand and is headquartered at

Karachi. With a new fully automated transaction processing system, the

brand was re-launched in 2001, supported by an aggressive advertising

campaign and strong sales team network. The product now has portfolio of

nearly 20,000 cards, in less than one year. The brand is accepted worldwide

and over 3,000 locations in Pakistan.

3- OPERATIONS AND CREDIT GROUP

A support function group is mainly responsible for development of systems

and procedures, process re-engineering, automation and credit

management. The group is organized in three divisions,

System and operations division Electronic technology divisions And the credit division


30/51

Page 30 of51

SYSTEM AND OPERATIONS DIVISIONS:

This group has been instrumental in development of procedures and

manuals for various operating requirements of the bank. After careful

mapping of the existing process flows, the division recommends automation

and re-engineering requirements to improve transaction efficiencies. The

division is active in providing equipment procurement support and

development of new branches. The protection of fixed assets of the bank is

also managed by the by this division, as directs function.

During year 2001, the division has proposed several cost cutting initiatives

based upon improvement of our existing procedures and documentation

reduction. Seven new branches have been opened during this year i.e. 2011.

The division successfully implements the model branch concept during 2001,

which has been proved to be a milestone towards improving our customer

service standards and achieving process uniformity with optimum resource

utilization.

ELECTRONIC TECHNOLOGY DIVISION:

This division operates as the backbone for all operational functions in the

bank. Responsible primarily for the development of banking software and

provision of computer hardware to all business units, the division also

engaged in the development of technology based value added customer

service products. The division has helped the bank in playing the pioneering

role in offering Internet banking service e-commerce solution and on-line

banking. The division provides online real time branch connectivity and has

fully-automated transaction processing support programmers in the place.

The division is focusing on use of data-warehousing technology to enhance

the relationship management program of the bank.


31/51

Page 31 of51

CREDIT DIVISION:

Providing extensive support to branches for credit administration, control

and monitoring, the division has played a pivotal role in helping the bank

achieve a remarkable loan

It shows a growth of 31%, with well diversified risk exposures. Most of the

loans are of short -term trade financing on a secure and self-liquidating

basis. The division has a special assert management team, which is

responsible for ensuring low ratio of bad debts, effective monitoring of

delinquent advances and close follow-up of recoveries.

Bank's head office credit committee, reviews the credit quality and pricing on

regular basis not only to ensure healthy credit growth but also the

management of bank's risk assets in almost prudent and profitable manner.

Taking into account the expanding branch network and the increasing

customer base, credit administration was strengthened by decentralizing the

delegation of lending authorities at the regional and area management level.

The decentralization has benefited the bank and its customer tremendously

as the new arrangements now provide for faster credit delivery, focused

credit development, and more effective monitoring and controls. Further

steps are being taken to streamline credit appraisal procedures and training

to credit officers at all levels.

HUMAN RESOURCE DIVISION

Strategically, perhaps the most important division at the head office is

responsible for human resource management, including recruitment staff


32/51

Page 32 of51

training and evaluation. The division also handles matters relating to

administration. This division operates on future oriented strategy focusing on

employees personal and professional growth.

Staff development activities are geared to enhance their capabilities for

applying the knowledge and facts towards development of practical

situations. Under its human resource management policy, Askari bank

develops and groom their management personal for positions of greater

responsibilities analytical, interpersonal, conceptualized and specialized skills

to enable them understand cause-and-effect relationships and to think

logically.

Staff is given on the-the -job as off-site training in diverse areas of banking

and management. Hiring philosophy is based upon meritocracy and selecting

the right person for the right job. They lay greater emphasis on employees

honesty and integrity besides technical competence. Candidates are selected

through well defined and systematic selection procedure.

FINANCE DIVISION

Responsible for bookkeeping and accounts, this division at head office,

prepare all financial return and the MIS through its management-reporting

wing. The division is actively involved in preparing market comparative

analysis, consolidation of bank's budgets, its monitoring and constant review

of various financial indicators.Finance division works as the backbone for the bank's operations. The

division, which reports directly to the president and chief executive of the

bank, has been instrumental in preparation of banks business plans and

future strategies. The budgetary performance are constantly reviewed and


33/51

Page 33 of51

through a sophisticated " monthly performance report which is a computer

based program, the division provides feed back to the senior on strategic

issue like reasons for budgetary variance and methods to arrest negative

performance factors.

Preparing the bank's annual accounts and coordinating external audit is also

a direct function of the finance division. Through the dedicated efforts of

staff at this division, the bank has been winning various awards foe the best

presentation of the annual accounts and also the management has also been

able to monitor and review the bank's performance in proactive manner.

AUDIT DIVISION

The audit division reports directly to the board through the executive

committee, which is also the audit committee. The audit division is

completely independent of the management and is responsible for checking

and reporting on the management compliance with the board policies and

directives, as also the prudential regulations and other directives of the SBP.

However their role is not intended to just that of fault finding; but also

guiding and assisting branches in improving their operations.

The division is responsible for evaluating every aspect of the bank's

operations with the goal of improving the effectiveness of risk management

and internal control. There is also a regional audit function attached to each

area office; the nature of this business is of more quality assurance rather

than strictly audit. The regional audit report to the area manager, and assist

them in ensuring that there is proper compliance with all the relative

directives, and also that customer service standards are maintained and

improved, at the branches in the area.


34/51

Page 34 of51

RISK MANAGEMENT

Askari Bank fully understands that risk management is critical given the

various risks that the Bank is inherently exposed to in addition to internalcontrol systems. An effective risk management framework is in place for

appropriate assessment and monitoring of risks. Askari bank continues to

strive for the management of change in their institutional culture to make it

more professional and responsive to a dynamic environment


35/51

Page 35 of51

SWOT ANALYSIS

An analysis indicating towards the organizations strengths, weaknesses,

opportunities and threat is termed as SWOT Analysis. Such an analysis is

very important for the management in retaining the strength, overcoming

the weaknesses, capitalizing over the emerging market opportunities, and

carving ways to successfully tackle with the threats and ultimately

converting them in the strengths for the organization.

During six weeks of my stay at Askari Commercial Bank, Allama Iqbal town

Lahore, I have come across the following SWOT analysis of the bank.

STRENGTHSLEADING PRIVATE SECTOR BANK:

Askari commercial bank is the leading private sector bank in the banking

network in Pakistan with many of them online branches in major cities of the

country.

AUTOMATIC OPERATIONS:

The operations performed by the bank are highly automated that result in

assurance for the customers that their transactions are completed reliably,

efficiently and securely.

FULL DAY BANKING:

One can avail the benefit of the services provided at the bank till 5:00 P.m.

which is highly useful for those customers who find it difficult to leave their

officers in the morning.


36/51

Page 36 of51

ATM NETWORK:

The bank has the largest ATM Network across the country. The customers of

ACBL withdraw access their funds any time at all the ATM Sites with

ASKCASH Logo.

CUSTOMIZED SOLUTIONS:

The management of the bank believes in customer focused banking rather

than the product oriented banking. The products and services designed by

the bank are specifically tailored to the individual needs of its customers.

CUSTOMER ORIENTED BANKING:

The priority banking centres of the bank offer an unmatched where the

customer receives highly privileged services in a highly elegant environment.

It gives the chance of experiencing new standards in banking. Designed

especially for those who appreciate only the finest things in life, Priority

Banking offers the very highest levels of personalized banking to match

customers unique status.

ELECTRONIC BANKING:

The revolution in the banking in the form of electronic banking operations

have opened avenues of excellent, efficient and quick services saving the

time and costs of the customers and fortunately ACBL is among those few

banks who are already reaping the benefits of electronic transactions.

ELECTRONIC FUNDS TRANSFER:

ACBL management is quite prepared to adopt the latest advancements in

technology resulting in revolution in the banking operations such as check


37/51

Page 37 of51

clearing process, computer based teller equipment, automatic teller

machines, and electronic funds transfers among the others.

PHONE BANKING:

Phone banking service is very attractive for those classes of customers who

dont have time to personally come to the bank i.e. banking on the phone

line thus saving the precious time of the customers.

ETHICAL CONCERNS AND PUBLIC IMAGE:

The organizations showing concern for the people, ethics, and environment

enjoy good public reputation and are able to reap the benefits in the long

run. ACBL management is quite sensitive to this issue.

WEAKNESSESIn my opinions these are the points that might be detrimental to the

efficiency and profitability of the bank.

NOT HIGHLY AUTOMATED:

The bank has still some of the traditional ways of operations in this

advanced technological environment.

MANUAL BOOK-KEEPING:

Although the bank has computerized accounting system but, still the

bankers use to make their entries in the accounting register.

LOW JOB SATISFACTION:


38/51

Page 38 of51

Understanding and the effective management of the human resources is the

most difficult challenge faced not only by the bank but by all the

organizations. Even though the people have been sacrificed in the new

organizational developments, it is becoming clear that the true lasting

competitive advantage comes through human resources and how they are

managed. ACBL seems to not focusing on this highly critical issue as the job

satisfaction level of the employees working at ACBL, was quite low.

LACK OF SPECIALISATION:

This famous and useful concept given by Adam Smith in 1776 seems to be

missing in the bank. The employees are constantly rotated from one job to

another job of totally different characteristic in the view of giving them the

know-how of the working in all the departments. But I think this is not a

very good tactics used by the management. Otherwise the situation might

be like this Jack of all and master of none.

CENTRALIZATION:

There is a high degree of centralization in the bank. Almost all the decision-

making is in the hands of the upper management. But centralization is

effective up to a certain level otherwise it becomes inefficient and at times

costly too. I personally observed that delay occurred in the operations of the

employees only due to the fact that they had not got any instructions from

the head office.

LACK OF TRAINING FACILITIES:

Presently there is no specific training program arranged for the new

recruiters. They have to learn based on their observations and also their

mistakes. It takes a bit time for the fresh one to learn the banking and the


39/51

Page 39 of51

result is huge amount of blunders, mistakes etc. resulting in monetary and

non-monetary losses for the bank. There is pressure not only on the new

learner but also on the person placed upon with this responsibility.

OPPORTUNITIESApart from the ones discussed in External Factors Evaluation Matrix,

the bank is facing the following threats and opportunities currently:

These are positive external environmental factors effecting the organization.

It deals in bulk business. A large amount of foreign investment is attracted. Strong potential for growth Steady increase in Customer Deposit Overseas Operations Branches In Remote Areas Islamic Banking Sharp increase in imports and exportsTHREATS

HIGH EMPLOYEES TURNOVER:

As discussed above, the job satisfaction level of the employee is very low

resulting in high turnover, which is bad for any organization as there are

huge monetary and non-monetary costs involved in the fresh recruitments.


40/51

Page 40 of51

HIGH CHARGES:

The schedules of charges indicate that the fees charged by the bank on the

various services it provides are extremely high. It may result in decrease in

the number of its existing customers. Furthermore, this could be very

alarming situation for the bank in case some of the competitors grasped the

opportunity and lowered its rates. The result would be either the loss of

market share or decrease in the charges resulting in lowering the banks

income.

LESS ATTRACTIVE RATE OF RETURN:

Commercial banks face considerable competition in attracting deposits from

individuals or small investors. In contrast, the Govt. of Pakistan national

saving scheme offers attractive rates of return (approx. 16 to 18 percent

annually) on 10-15 year fixed accounts, which banks find difficult to match.

STIFF COMPETITION:

Askari bank limited is currently facing strict competition from the foreign

banks especially the American who banks enjoy a good market position.

Collectively U.S. banks hold approximately 9 percent of all commercial

banks' assets. At present, three American banks are operating in Pakistan:

American Express Bank; Bank of America and Citibank.

LESS EXPERIENCED STAFF:

Owing to huge turnover of the employees, the no. of experienced and well

trained staff is very low. Majority of the staff working in the bank branches is

quite young and inexperienced. If the bank failed to bring down its high

employees turnover, then it would be lacking the most important resources

of any organization i.e. the experienced staff.


41/51

Page 41 of51

INTRODUCTION OF THE ALLAMA IQBAL TOWN BRANCH

The Allama Iqbal Town branch of Askari ban is the branch in which I did my

internship of six weeks. This branch is located at Main Boulevard, Gulshan

Block near Moon market. Due to attention and interest of branch manager,

Mr. Salman Aziz Rana, the exterior as well as interior of the branch has been

delightfully decorated.

This branch has only 20 employees, ranging from bank manager to security

guards, tellers and cleaning boys along with the in charge of the kitchen.

The main reason of the banks existence is the acceptance of peoples money

to keep safe until they need it back and extending money on interest to

those who need it for investment purposes. The growing number of peoples

needs near the branch is the main reasons for its increasing profits.

The branch is growing well for credits and operations but foreign trade load

is low as compared to other branches.

One another important thing of this branch is that it used to have highest

number of internees.


42/51

Page 42 of51

HEIRARCHY OFASKARI BANKSALLAMA IQBAL

TOWN BRANCH

BRANCH MANAGER

MANAGER

CREDITSMANAGER

INTERNATIONL

BANKING

IMPORTSDEPARTMENT

EXPORTS

DEPARTMENTS

FOREIGNEXCHANGE

LEASING

DEPARTMEN

HOME

FINANCE

DEPARTME

CAR FINANCE

DEPARTMENT

CREDIT CARD

DEPARTMENT

INTERNAL AUDIT

DEPARTMENT

MARKETING

DEPARTMEN

MANAGER

OPERATIONS

ACCOUNTS

DEPARTMENT

CASHDEPARTMENT

ACCOUNT OPENING

DEPARTMENT

CLEARING DEPARTMENT


43/51

Page 43 of51

WORK DONE BY ME AS AN INTERNEE DURING SIX

WEEKS

There were following learning points for me in the bank.

FIRST WEEKDuties:

In my first week in Askari Commercial Bank commercial bank, they

assigned me work in Account Opening Department.Miss Sheeren trained me

very nicely and I learned lot of things in this department. He told me

different accounts names and their codes and how to open the account.

New Computerized national identity card is must for opening of new account. For current account 10,000 and for saving 5,000 are required.

What are the necessary requirements of different accounts to be opened?

Other activities are :

How to fill the deposit Slip if anyone wants to transfer cash in theaccount or online transfer

How to fill the different accounts Form How to fill the voucher for issuing of the Cheque Book for the first time How to fill the requisition slip for the second time issuance How to issue the Cheque Book How to enter it in the register


44/51

Page 44 of51

Accomplishments:

I m fully trained in this job how to open the different accounts ,how to issue

the cheque book and enter it in the register and how to transfer the amount

through cash or cheque to an account .

SECOND WEEKIn the Second Week they assigned me work in Clearing Department .Miss

Noreen trained me very nicely and I learned lot of things in this department.

Duties:

There are two types of clearing.

1. I/W (Inward clearing)

2. O/W (Outward clearing)

In this week I entered the cheques lodged for inward clearing in clearing

register as their cheque number account holder name cheque amount and

bank name amount to be paid.

Secondly in this week I prepared (O/W) clearing for next day. Same as

entered cheque number account holder name amount and Bank name.

In this week I also entered cheque return in cheque return register and put

cheque return slip on cheque.

Accomplishments:

I am fully trained now in this particular job. How to fill cheque

return slip? How to enter in I/W, O/W clearing register.


45/51

Page 45 of51

THIRD WEEKDuties:

In third week I perform following tasks relating to the banking system.

1. IBC (Inter bills clearing)

2. OBC

In this week I worked for IBC (Inter bills clearing). IBC mean cheques

lodged for clearing from other city. I entered these cheques in IBC register if

it is ACBL cheque then Miss Noreen cleared or return this cheque and if it is

cheque of other bank then it is again entered in O/W clearing registered and

lodged next day for clearing.

Secondly in this week I prepared OBC, filling of OBC slip as cheque number

their amount OBC number and branch name.

Accomplishments:

In this week I repeatedly performed this job and now I am fully trained in

this job.

FOURTH WEEKIn Fourth week they assign me work for Remittances Demand draft and Pay

order preparation.

Duties:

Demand draft is for payment outside of city and pay order for local payment.

It is a secure source of payment.


46/51

Page 46 of51

There are no charges for Pay order while other banks charge for this service

so it is an advantage going to ACBL bank to attract customers.

Accomplishments:

In this week I repeatedly perform the jobs and I am fully trained in such

type of operations i.e. to make the DD, Pay order and mark the Charges if

Customer is not account holder of the Bank then 255 Rs commission of the

Bank.

FIFTH WEEKDuties:

In this week I worked in Accounts and Cash Department.

In fifth week they assign me work in cash department.

In cash department I learned about Receipts and Payments and about how

to receipt cash and how to enter it in computer.

In Accounts Department how to sort the Vouchers and preparation of

Salaries

Accomplishments:

I am fully trained in this job i.e. to check that all the vouchers are

scrutinized and matched with the activity

SIXTH WEEK

Duties:

In Sixth Week I worked in Foreign Exchange and in Credit Department.


47/51

Page 47 of51

They told me brief introduction about import and Export. Necessary

Requirement about the Letter of Credit .What Documents are required for

Import and Export

Secondly in this week I learned about Advances from credit manager Mr.

Hussnain. What are requirements for loan? It is a procedure that takes many

days

Accomplishments:

I in this week I m fully Trained in these jobs.


48/51

Page 48 of51

IDENTIFICATION OF PROBLEMS AT ASKARI BANK

There are problems being faced here at Askari Bank some of which can

easily be highlighted;

Bank is facing a high tax rate, which affects its profitabilityand attractiveness for new entrants.

Middle class and low income group have limited access tobank credit.

Weak internal controls, non-merit based recruitments. High administrative costs affect the performance of bank. Continuous maintenance is compulsory. Favoritisms while promoting employees. Education level of the employees.


49/51

Page 49 of51

RECOMMENDATIONS

It was an interested experience to do internship in Askari Bank . The staff

was highly cooperated and due to their help I learned big deal about modern

banking. I suggest that such an internship program highly integrative for the

students of business education so that the students should been aware with

the knowledge of practice world .Here I am putting some suggestions, which

will enable the bank to compete with other banks more effectively &

efficiently.

It is observed that the employees were overburdened so they have tostay at branch till late at night. In this way their efficiency is affected

and hiring more employees can reduce their work.

The employees should be signed jobs for specific period and than theyshould shifted to other department so that they gain knowledge of

other jobs.

The Askari Bank should properly advertise and Communicate to publicabout the services provided by it, so that more customers will be

attracted.

The banks management should give more incentives and pay scale ofofficers should be revised & improved.

System and operations should be more defined and organized. IT draw backs should be improved Administration drawbacks should be improved by the strict control of

general issues.

Some employees waive the bank charges (Statement charges, chequebook charges etc) that decrease the income of the bank.

Expenditures must be control, which are very high Askari Bank offers higher charges in many of its services as compared

to its competitors.I think they should be bit flexible in this regard.


50/51

Page 50 of51

CONCLUSION

Askari Bank is a good Organization in the way that anybody can join it for

his/ her long-term career. Overall working environment is comfortable.

Management of branch cares a lot of its employees and considers them as

the Asset of bank. Behavior of senior executive of bank is very polite and

they are caring about the individuals career and their growth. However

management is very demanding about the targets but good reward at the

achievement of assigned targets is awarded. Employees at Askari Bank are

quite efficient. Therefore, they work more than their working hours and it is

all according to their will. It also shows their loyalty, commitment to

organization. Employees are given the benefits like bonus, gratuity funds,

loans, increments, and medical. All the customers are entertained

individually. Same kind of behavior and attention is given to all the

customers. Getting ideas for improvement from customer side is a new idea

and that is working very well in Askari Bank. All the customers are asked to

fill a suggestion form and the standards of the bank are improved through

them. Prioritizing its product portfolio in line with its corporate and

consumer needs and wants the bank is committed to develop products that

give more value to its customers. In bank, all the work is done on

computers. All the entries are made in computer. This increases efficiency of

the bank. During my internship training I gathered information regarding

how successful bank operational aspects decorticated with the practical. I

found my internship training a very rewarding experience. The training was

beneficial because it helpful me to aware a real life working environment. So

far my learning is concerned; all the employees at branch were quite

cooperative. They helped me to understand the activities of a bank to

possible extent. Their good attitude gave me more confidence to learn more

and to ask if I have any query in my mind. Besides their ever going activities


51/51

they never get irritant by my questioning. I had made an honest efferent to

present the working & operation of Bank in simplest way. I feel pleasure that

I have really gained a lot during 6 weeks & enjoyed working with

experienced cooperative & intelligent staff.