Arslan HBL Report

February 21, 2011 [HABIB BANK LIMITED:]
Report on
Internship AT HABIB
BANK limited
From
ARSLAN AHMED BHUTTO
IQRA UNIVERSITY
ACKNOWLEDGEMENT
1
No one can say that I am perfect, everyone should admit that
without the help of ALLAH and His people a man can’t get anything
so I bow my head before Almighty Allah with gratitude. I am also
very much thankful and presents salute to many individuals who
have helped me in shaping this report. I am also very much thankful
to lot of former fellows and contemporary colleagues who took the
time and trouble during the last few days to speak to me about the
way this text could be further improved. I have no words to express
my gratitude to my advisor Mr. Kashif Ullah Khan for his intellectual
guidance without which it could have been rather difficult for me to
complete this report.
I am also very thankful to the staff Habib Bank Limited
KHEKASHAN branch especially to Mr. Akbar Ali (Branch Manager)
who provided me an opportunity to work in friendly environment.
It was an honor for me to work with:
Mr. Kashif ullah Khan (Operations Manager)
Mr. Syed Muhammad Hafeez Ullah (Assitant Manager)
Mr. Noman Ashraf (Retail Banking Officer)
Mr. Imran Hamdani (Head cash Department)
Table of Contents
No. Description Page
2
No.
01 Executive Summary 05 to 06
02 Evolution of Banking 07
03 Commercial Banking in Pakistan 08 to 10
History of Banking in Pakistan
04 About HBL Pakistan 10 to 19
History and Background
Privatization
HBL’s Mission, Vision and values
Board of Directors
Management
Corporate information
05 SWOT Analysis 20
06 Operations of HBL 25 to 57
Banking Departments in HBL
Products and services of HBL
07 Learning and Duties as an Intern 58 to 64
Foreign Exchange Department
Bills clearing Department
Credit Department
Account, lockers, ATM Department
Assignments
Impact on my Career
08 Award and Financial performance in 2008 63 to 73
09 Recommendations 74
10 Glossary, Bibliography, Index 76 to 80
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executive summary
Every student of Bachelors in Business Administration at IQRA UNIVERSITY
has an essential requirement to do internship in any of the well reputed
organization. The purpose of this program is to acquaint the students with
practical applications of theoretical concepts taught to them during
conduct of their BBA program. The internship in Habib Bank was a nice
opportunity to have a close comparison of theoretical concept in practical
field, involving the use of primary and secondary data. All the efforts on
the way are summarized in shape of this Internship Report.
Report starts with the topic evolution of banking. The word 'Bank' is said
to have been derived from the words Bancus or Banque or Bank. This
history of banking is traced to as early as 2000 B.C. Talking about
commercial banking in Pakistan It was very difficult for Pakistan to build
up its own Banking system immediately after independence without
4
sufficient resources. By 30th June 1948 the number of schedule banks in

Pakistan declined from mere scratch. Today there are more than 7000
branches of commercial banks along with an established network of
supplementary financial institutions. All this development in the banking
sector is the result of untiring efforts of six decades. HBL 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 1,450 branches across the country and a customer base
exceeding five million relationships.
On December 29, 2003 Pakistan's Privatization Commission announced

that the Government of Pakistan had formally granted the Aga Khan Fund
for Economic Development (AKFED) rights to 51% of the shareholding in
HBL, against an investment of PKR 22.409 billion (USD 389 million). This
report contains information about HBL’s board of directors, management,
mission, vision and values. HBL’s operations are discussed in light of its
working department in the branches like cash, clearing, foreign exchange
and accounts department and also in light of its services and products
which it is offering to customers’ whether they are individual, business,
corporate or agriculture field related customers. HBL is currently offering
phone banking, internet banking and various cash management services
for the facilitation of its customers. HBL’s car to car loan has its own
uniqueness in Pakistan’s banking sector. HBL’s branch network is
extended all over the Pakistan which has its competitive edge over all
other private sector banks in Pakistan.
During the time of my internship in Habib Bank Khekashan Branch

Karachi, I got the chance to work in all the departments of HBL working
there. Duties and learning in each department is given in this report.
Talking about financial performance of the bank in 2010 all the financial
indicators are showing positive results when the financial performance of
the bank in 2010 is compared with financial performance of 2009. During
2010 HBL also won some awards. At the end of this report I have given
my suggestion for the improvement of the bank.
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I had been assigned to several departments to learn and experience the
working of branch banking and on the basis of grasped knowledge and
experience, this report is being presented to the management of Habib
Bank Limited.
Evolution of banking
The word 'Bank' is said to have been derived from the words Bancus or
Banque or Bank. This history of banking is traced to as early as 2000 B.C.
The priests in Greece used to keep money and valuables of the people in
temples. These priests thus acted as financial agents. The origin of
banking is also traced to early goldsmiths. They used to keep strong safes
for storing the money and valuables of the people. The persons who had
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surplus money found it safe and convenient of deposit their valuables with
them. The first stage in the development of modern banking, thus, was
the accepting of deposits of cash from those persons who had surplus
money with them.
The goldsmiths used to issue receipts for the money deposited with them.
These receipts began to pass from hand to hand in settlement of
transactions because people had confidence in the integrity and solvency
of goldsmiths. When it was found that these receipts were fully accepted
in payment of debts; then the receipts were drawn in such a way that it
entitled any holder to claim the specified amount of money from
goldsmiths. A depositor who is to make the payments may now get the
money in cash from goldsmiths or pay over the receipt to the creditor.
These receipts were the earlier bank notes. The second stage in the
development of banking thus was the issue of bank notes.
The goldsmiths soon discovered that all the people who had deposited
money with them do not come to withdraw their funds in cash. They found
that only a few persons presented the receipts for encashment during a
given period of time. They also found that most of the money deposited
with them was lying idle. At the same time; they found that they were
being constantly requested for loan on good security. They thought it
profitable to lend at least some of the money deposited with them to the
needy persons. This proved quite a profitable business for the_
goldsmiths. They instead of charging safe keeping charges from the
depositors began to give them interest on the money deposited with
them. This was the third stage in the development of banking.
COMMERCIAL BANKING IN
PAKISTAN
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It was very difficult for Pakistan to build up its own Banking system
immediately after independence without sufficient resources. Following
the announcement of the partition plan in June 1947 there was a haste
movement on the parts of banks to transfer their funds and accounts
across the borders. The banks having their registered offices in Pakistan
were transferred to India. In an effort to bring about the collapse of the
new state by the persecuting an international policy of withdrawal, the
Indian bank offices closed quickly. Those banks, which stayed, were
considering the winding up of their business. By 30th June 1948 the
number of schedule banks in Pakistan declined from mere scratch.
Today there are more than 7000 branches of commercial banks along with
an established network of supplementary financial institutions. All this
development in the banking sector is the result of untiring efforts of four
decades.
History of Banking In Pakistan

The interesting point which I observed during the span of mine internship
was the historical background of Banking & Financial sector which is the
one in which great improvement and growth is observed since the
formation of Pakistan. For studying the growth of this sector we can divide
it into three stages, which are as follows:
a) Pre-Nationalization Era
b) Nationalization Era
c) Post Nationalization Era
PRE NATIONALIZATION ERA:
There were only two Muslim banks in Indo Pak before partition; they
were .Habib Bank Ltd. (est. in 1941 at Bombay) & Australia Bank Ltd. (est.
In 1944 at Lahore). All other banks, at that time, were either owned by
Hindus or Foreigners.
At the time of partition there were 631 bank branches in area which came
under Pakistani control. But due to blood shed and violence at large scale,
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mostly branches were closed and the disparity can be assessed from the
fact that on July 1948 there were 195 branches with deposits of Rs.88
million only.
Also a factor lagging in Pakistani industry was a central bank of its own, by
that time Reserve Bank of India was acting as central bank for both
countries and same currency notes were used in both territories. But
Reserve Bank of India was biased and Set down Pakistan on many
occasions such as the issue of funds transfer etc.
1) Inauguration of State Bank of Pakistan (SBP) on 1st July, 1948.

2) Setting up of National Bank of Pakistan in November, 1949 to
control the 'jute' export in East Pakistan and to act as agent of
SBP.
3) Larger powers were given to SBP through SBP Act (1956) for
controlling purposes.
4) Banking Companies Ordinance 1962 for protection and guidance
to banks.
5) Establishment of specialized banks, such as ADBP (1952);
a) HBFC (Nov, 1952);
b) P1CIC (Oct, 1957)
c) IDBP (Aug. 1961);
d) NDFC (Jan, 1973).
These were the steps, which built a strong banking sector in Pakistan. This
is also obvious from the facts that by 1973 there were almost 10 foreign
banks were working in Pakistan and all over deposit position was around
Rs.2300 crore (23,000 million). A bird eye view of 5 top banks was as
given below:
BANK POSITION IN 1973
BANK NO. OF BRANCHES DEPOSITS

(Rs in Million)
HBL 667 6,160
NBP 579 5,660
UBL 497 5,670
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MCB 506 1,640
ABL 145 570
B) NATIONALIZATION ERA
On January 01, 1974 all Pakistani banks were nationalized through
Nationalization Act 1974. Under this law all Pakistani banks became a
public property. All small banks were merged in bigger banks to create 5
major Pakistani banks Pakistani banks. These banks were to control by
Pakistan Banking Council. There are still controversies about this act of
government as whether it contributed in success of failure of banks.
However the major changes after nationalization were as follows:
 Working of banks was extended to under developed areas.
 Market expansion for credit and deposits.
 Decrease in service level of bank officers.
 Decrease in profitability as well.
However the effect of expansion was enormous and it can also be

depicted with the help of table 2 which shows the deposit & branch
positions of different nationalized banks.
BANK POSITION IN 1992

Bank No. of Deposits (Rs. In
Branches Millions)
HBL 1926 153,431
NBP 1448 128,679
UBL 1684 87,482
MCB 1288 50,013
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ABL 750 33,757
TOTAL 7096 453,362
C) POST NATIONALIZATION ERA

In 1990 the government decided to denationalize all the
nationalized institutes. Some was also suggested in banking sector. For
this purpose, amendments were made to Nationalization Act 1974 and
two nationalized banks were privatized. Along with this a permission to
open banks in private sector was also granted. The rules regarding
establishment of new banks and for incoming foreign banks were also
relaxed.
The- privatized banks are;
a) MCB taken up by a private group in April, 1991
b) ABL taken up by its own employees in September, 1991.
c) UBL taken up by UAE party in 2002.
d) December 29, 2003 HBL was taken by AKFED
After these changes a large number of private and foreign banks

Structure of Financial Sector in Pakistan
started their operations in Pakistan and the present status can be seen
from the following figure:
Scheduled Banks NBFIs
(47) - Modarabas
- Commercial banks - Leasing companies
- Specialised banks - Mutual funds
- Specialised financial (DFIs)
- Investment banks
- Housing Finance Companies
Speci alised Banks Commercial Banks
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Foreign Banks Domestic Banks
About Habib Bank Limited

HBL 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 1,450 branches across the country and a
customer base exceeding five million relationships. With a presence in 25
countries, subsidiaries in Hong Kong and the UK, affiliates in Nepal,
Nigeria, Kenya and Kyrgyztan and representative offices in Iran and China,
HBL is also the largest domestic multinational. The Bank is expanding its
presence in principal international markets including the UK, UAE, South
and Central Asia, Africa and the Far East. Key areas of operations
encompass product offerings and services in Retail Banking. HBL has the
largest Corporate Banking portfolio in Pakistan with an active Investment
Banking arm. SME and Agriculture lending programmes and banking
services are offered in urban and rural centers. In the UK and GCC, HBL
focuses on trade finance and remittances for the South Asian Diaspora in
addition to basic banking facilities. HBL has always been a bank and a
brand for the masses, with a history that is inextricably linked with the
history of Pakistan itself. As it continues to grow, both locally and abroad,
it strives to embody its brand personality: honest, approachable, and
inclusive. HBL is currently rated AA+ (Long term) and A1+ (Short term)*.
It is the first Pakistani bank to raise Tier II Capital from external sources.
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*Rating given by JCR-VIS
HISTORY AND BACKGROUND

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. 2.5 million. At an early
stage, the number of its branches was only 12.
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 bank’s 25th Anniversary. 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.
PRIVATIZATION OF HABIB BANK

On December 29, 2003 Pakistan's Privatization Commission announced
that the Government of Pakistan had formally granted the Aga Khan Fund
for Economic Development (AKFED) rights to 51% of the shareholding in
HBL, against an investment of PKR 22.409 billion (USD 389 million). On
February 26, 2004, management control was handed over to AKFED. The
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Board of Directors was reconstituted to have four AKFED nominees,

including the Chairman and the President/CEO and three Government of
Pakistan nominees.
VISION, MISSION AND VALUES

Vision
Enabling people to advance with confidence and
success.
Mission
To make our customers prosper, our staff excel and
create value for shareholders.
Values
Our values are the fundamental principles that define our culture and are
brought to life in our attitude and behaviors. It is these values that make
us unique and unmistakable. Our values are defined below:
• Excellence
This is at the core of everything we do. The markets in which we operate
are becoming increasingly competitive, giving our customers an
abundance of choice. Only through being the very best – in terms of the
service we offer, our products and premises - can we hope to be
successful and grow.
• Integrity
We are the leading bank in Pakistan and our success depends upon trust.
Our customers - and society in general – expect us to possess and
steadfastly adhere to high moral principles and professional standards.
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• Customer Focus
We understand fully the needs of our customers and adapt our products
and services to meet these. We always strive to put the satisfaction of our
customers first.
• Meritocracy
We believe in giving opportunities and advantages to our employees on
the basis of their ability. We believe in rewarding achievement and in
providing first-class career opportunities for all.
• Progressiveness
We believe in the advancement of society through the adoption of
enlightened working practices, innovative new products and processes
and a spirit of enterprise.
NAME DESIGNATION
Board of
Sultan Ali Allana CHAIRMAN Directors
R. Zakir Mahmood PRESIDENT & C.E.O
Mushtaq Malik DIRECTOR
Ahmed Jawad DIRECTOR
Head Office
Yasin Malik DIRECTOR
HBL Plaza
I. I. Chundrigar Road
15
Moez Jamal DIRECTOR
Karachi-75650, Pakistan.
Tel : +92 (21) 2418000 [50 lines]
Fax : +92 (21) 9217511
Registered Office
4th Floor, Habib Bank Tower
Jinnah Avenue
Islamabad, Pakistan.
Tel: +92 (51) 2872203
Fax: +92 (51) 2872205
Registrars
THK Associates (Pvt.) Ltd.
Ground Floor, State Life Bldg No. 3
Dr. Ziauddin Ahmed Road
Karachi, Pakistan.
Tel: +92 (21) 111-000-322
Websites
Corporate website:
www.hbl.com
Treasury website:
www.hblgtr.com.pk
Ebank (internet banking):
www.hblebank.com
Auditors
KPMG Taseer Hadi & Co.
Chartered Accountants
GLOBAL LOCATION
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SWOT ANALYSIS
Strengths
Strength can be defined as an area where a company is best at

doing something or a feature that puts the company at an advantage in
comparison to its competitors. HBL enjoys the following strengths:
 HABIB BANK is a well established bank enjoying long history of over 65

years of experience and profitable operation.
 HBL is the largest private bank in Pakistan now and people trust is very
high.
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 It has the largest branch network among private banks of Pakistan.

 HBL has been very effective in controlling costs as it successfully
restructured itself after its privatization. During this process more than
1,600 employees were relieved under a golden handshake scheme and
110 branches were closed.
 Excellent branches appearance gives an edge to HBL over other banks.
The branches are well furnished even in less developed areas where
other banks’ branches give a poor view.
 HBL has the ability to bring innovative products and services like
personalized service, electronic funds Transfer, sophisticated financial
products such as electronic banking, auto-teller machines and evening
banking.
 The Bank’s Rupee Traveler Cheques have been market leaders for the
past six years.
 HBL’s car to car financing scheme is unique in auto loan segment.
 Habib bank is an internationally recognized name in banking services
and products.
 HBL has forged strategic alliances with international banks for
expanding its network further, both locally and internationally.
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, HBL has the following weaknesses.
 Lack of communication between bank and customers about terms and
condition of products and services. Like centralization of cheque book
issuing process.
 Employees at branch level are not properly motivated to work by heart.
They take the all routine activities as a boring job.
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 Most of the employees lack managerial training as they are not
properly educated. Due to seniority, they have moved up on the
hierarchy line to Grade-I, II or III positions having hardly bachelor
degrees. This type of senior staff cannot apply the modern and
innovative techniques of management in decision making.
 Mission of HBL is not well defined.
 Though HBL is second largest bank in Pakistan, yet the fact remains
that it is not market leader as NBP. Its total assets are always less than
NBP total assets.
 Now as it is a privatize bank that is why GOVERNAMENT support to HBL
decreased as it was in past
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, HBL can
avail the following opportunities. Opportunities require explanation
therefore I have used headings instead of arrows
E-Banking
Generally speaking, three factors, quickness, easiness and cheapness
have become the catchwords for the competitiveness and usefulness of all
the business operations. Particularly it is commonplace today to say that
banking is undergoing a radical transformation. The symptoms are new
products, new players, new channels etc. This transformation is taking
place across all sectors of the banking industry. That is why Habib bank
urgently needs to improve their ability, to think strategically about IT
investments. Only those banks that use their technology resources
effectively have the opportunity to secure real competitive advantage in
this fast-changing industry through real product or service differentiation.
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High mark up rates

Of late markup rates have increased considerably. Present rates are 4%
above KIBOR i.e. 16% appx. High markup rate has decreased the interest
of people in loaning from from banks. Habib bank can increase its income
by offering loan at lower interest rate than other banks.
ONLINE BANKING
It is doing banking transactions through our home P.C. The banks that do
business through net have Websites. The customer clicks into the Website
and gets the history of the bank. Then he can demand the necessary
application form through the net. He fills in the form and passes it on to
the bank. The Online banking is fast gaining ground in Pakistan. Some
software companies are also offering network-banking facilities. So Habib
bank should focus heavily on providing online banking faculties to its
customers. Currently it is doing the same.
CORPORATE BANKING TERMINAL (CBT)

Large corporate customers can log into the bank's database and have
access to their accounts/transactions from their business houses. This
facility has still not been started for customers in Pakistan. So Habib can
focus on that.
AUTOMATIC TELLER MACHINE (ATM)

This system is known as "Any Time Money" because it allows customers
who have an ATM card to withdraw money at any time from the bank
without interacting with human teller. Since the ATM machine can be
installed anywhere like petrol bunks, markets, railway stations etc, and
can well be linked to the main computer. It allows customers to transact
with the bank 24 hours a day and 365 days a year. They allow the
customers to transfer money to and from accounts to view account
information, to receive cash. It can also be used to deposit cheques and
cash into the accounts. No bank in Pakistan is offering this service
currently. So an opportunity exists for Habib bank to differentiate.
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Rate of return
The range and choice of products available & offered by the commercial
banks is limited. Rates of Return / Profits on Deposits are so low and
unattractive that very limited options are available to the depositors. They
do not match the current rate of inflation. HBL differentiate and increase
it’s deposit by offering attractive rate of return on deposits.
Threats
Threat can be defined as a change in external environment which if not

met with proper strategies will result in loss of revenues, market share, or
income. In the context of HBL’s external environment, the following
potential threats exist:
 Other private commercial bank with sound profitability is also a threat
to HBL e.g. UBL, Alfalah, MCB etc
 The Rupee Travelers Cheque (RTC) sales volumes may be affected on
account of regulatory restriction imposed by SBP on issuance of large
value denominations.
 For the last of 2 to 3 years, Pakistan is facing economic and political
instability which is a big threat.
 Foreign banks are flourishing in field of consumer financing.
 Afghan war and Iraq war has a deep effect on the economy of Pakistan,
which has affected HBL.
 Increased regulations from State Bank of Pakistan may affect its
business.
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BANKING DEPARTMENTS of HABIB

BANK
Various departments are working in all the branches of Habib bank to
facilitate the customers. Following are the banking departments
functioning in HBL Jinnah Chowk branch Sahiwal.
1. ACCOUNT OPENING DEPARTMENT.
2. CASH DEPARTMENT.
3. CREDIT DEPARTMENT.
4. LOCKERS DEPARTMENT.
5. BILL CLEARING DEPARTMENT.
6. FOREIGN EXCHANGE DEPARTMENT.
7. I.T DEPARTMENT.
Accounts opening department

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Basic function of the accounts department is to open new account and

facilitate the customer for the account opening purpose. There are certain
formalities which are to be observed for opening of an 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 account.
Documents require for opening an account:
 Copy of CNIC
 Service certificate or student card.
 Utility bill
 Provisional receipt
 KYC (Know Your Customer)
SPECIMEN SIGNATURE:
When the Banker is satisfied about the integrity of the customer, he
agrees to open the account. The Banker obtains the specimen signatures
of the customer on the signature book or on card.
Posting the account on the system:

After that officer has to post the new account on computer system for
further processing. During the process customer id and account number is
generated. New account remains active for one day after that it is blocked
by the head office until CNIC of the customer is verified from NADRA.
Cheque book issuing:

After the CNIC verification account opening officer has to issue a cheque
book to customer so that he can be able to make withdrawal from his
account. Now a day in Habib bank cheque book issuing process is
centralized that take 06 days to complete.
SECRECY:
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The secrecy of depositor’s account is the. Responsibility of every official

engaged in the Bank service.
Types of accounts:
Individual accounts:
Individual accounts are the most common personal investment accounts.
Open by single person.
Join 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.
Business accounts:
Business accounts can be opened by institutions, companies,
partnerships, trusts and non-profit organizations. Following documents are
required.
BOOKS RELATING TO CUSTOMERS:
Pay-in-Slip
When money is to be deposited in the bank the pay in slip is to be filled.
The object of this book is to provide the customer with the bank’s
acknowledgement for receipt of money to be credited his account.
Cheque Book
A chequebook contains a number of cheques, which is given to a
customer upon written request and after marking the payment for the
chequebook. It enables a customer to make withdrawal from his account
or make payment to various parties by issue of cheques.
GROUNDS FOR CLOSING THE CUSTOMER’S ACCOUNT:
The banker may close the account of the customer due to following
reasons:
i. Notice by a Customer
ii. Death of a Customer
iii. Customer’s Insanity
iv. By order of court
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I) NOTICE BY CUSTOMER
The banker closes the account of the customer on the application of the
customer for closing his account.
II) DEATH OF CUSTOMER

On death of his customer, the bank must stop payment on cheques drawn
on him by the deceased customer because the death revokes his
authority to pay such cheque. The heirs or the executors of the deceased
customer are not authorized to operate on the account; it can act only in
accordance with provisions mentioned in the letter of probate issued by a
competent courts.
III) CUSTOMER’S INSANITY

If the customer becomes insane or mental it terminates the banker’s
authority to act as his customer’s agent. Since the banker customer
relationship comes to end, in such as situation, it is usually considered
that the banker’s authority to pay his customer’s cheques is revoked by
notice of insanity. However, the bankers treat their customers as it unless
a fairly inclusive evidence of the customer’s insanity is available to them.
IV) ORDER OF COURT

A court of law may serve a banker with an order in garnish proceeding in
execution of a decree prohibiting him from honoring a customer’s
cheques.
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Cash Department
C
ash Department is very sensitive and risky part of the bank. Very
causations and competent personnel are needed for the Job. HBL
has really such a diligent staff with appreciable competencies and
will to do work. Main function of cash department is to deal with cash
payment and cash receipts.
Cash deposit procedure:

The customer fills the pay slip. The cashier receives the pay slip and cash.
He counts the cash and makes the detail of the notes at the back of the
pay slip. Then he compares the detail with amount written on slip and
signs the pay Slip. Then he credits the entries in the computer by serial
No, account type, Account number and amount. Puts the stamp of the
“Cash Received” on the payment slip. The first portion is for bank record
while other one is given to the customer.
Cash payments procedure:

When a customer comes to withdraw a certain amount from his account,
he brings a Cheque along with him. In this case the following steps are
taken.
The cashier receives the cheque and checks it whether it is post dated or
predated. Cheque can be cashed within six months. A predated cheque
cannot be cashed. He takes two signatures at the back of the cheque from
the bearer. He gives the cheque for posting at the computer. The
computer checks out whether there is balance in the account or not.
Other instructions are also received e.g. blocked, frozen, Etc. the posting
is done in the computer and the cheque is stamped posted with the serial
number and date. He gives the cash to bearer and the respected account
is debited.
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Online fund transfer:

Another function of the cash department is of online transfer of funds.
Customer has give filled remittances form with cash or without cash (from
account transfer) to the cashier in cash department who will then credits
the beneficiary account.
Balancing cash at the end and transferring excess cash:

At the day end cash department is responsible for balancing the cash.
Physical cash should be balanced with the amount in the computer. Jinnah
Chowk branch’s limit for cash is 40 million which it can keep within the
branch over the night excess cash is transferred to NBP.
Credit Department
1. Introduction
2. Securities.
3. Types of credits
INTRODUCTION
The function of credit department is to lend money in the form of clean
advances, against promissory notes, as well as secured advances against
tangible and marketable securities. The bankers prefer such securities
that do not run the risk of general depreciation due to market fluctuations.
Common Securities for the banker’s advances are as under:-
SECURITIES
1. Guarantees
When an application for advance cannot offer any tangible security, the
banker may rely on personal guarantees to protect himself against loss on
advances or overdraft to the applicant.
2. Mortgage
A mortgage is the transfer of an interest in specific immovable property
for the purpose of security the payment of money advanced or to be
27
advanced by way of loan, and existing or future debt, or the performance

of an engagement which may rise to a pecuniary liability. The transfer is
called a mortgagor, the transferee a mortgage.
3. Hypothecation
When property in the shape of goods is charged as security for a loan
form the bank the ownership and possession is left with the borrower, the
goods are said to be Hypothecated The essence of hypothecation is that
neither the property in the goods not the possession of them are
possession is left with the borrower, the goods are said to be
Hypothecated the essence of hypothecation is that neither the property in
the goods not the possession of them are possessed by the lender, but
the security is granted by means of letter of hypothecation, which usually
provides for a banker’s charge on the hypothecation goods.
4. Pledge
In a pledge the ownership remains with pledge, but the pledge has the
exclusive possession of property until the advance is repaid in full. While
in case of the default the pledge has the power of sale after giving the
due notice.
5. Promissory Note
Sometimes promissory note is also accepted as a security, "A promissory
note is an instruments in writing containing an unconditional undertaking
signed by the maker, to pay on demand or at a fixed or determinable
future time a certain sum of money only, to or to the order of certain
persons, or to the bearer or the instrument." A promissory note is
incomplete until has been delivered to payee or the bearer. Moreover, the
sum promised in a promissory note may be made by two or more makers
who may be liable there on jointly and severally.
TYPES OF ADVANCES
The advances which are given by Habib Bank Limited are as under:-
1. DEMAND FINANCE (Ordinary Loan)
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Demand Finances are those advances which are allowed in lump sum for
a fixed period and are repayable lump sum or gradually in installments.
TYPES OF ADVANCES
a. Demand Finance (Packing Credit)
Scheme introduced by State Bank of Pakistan for exporter of carpet,
surgical instruments, at zero percent rate of interest. While banks
provides at concessional rate of interest.
b. Loan ordinary (Demand Finance to Students)
Qarz-e-Hasana Scheme Loans are allowed to the students, teachers
without any interest or mark up with the recommendations of the
MPA or MNA.
c. Demand Finance (Staff)
Loans are offered to the staff of the following four categories.
i. House Building Loans against mortgage of property.
ii. Loan for purchasing vehicles.
iii. Loan equivalent to month’s salary.
2. RUNNING FINANCE (Overdraft)

Running finance (old name overdrafts) are advances, which are generally,
given to meet temporary requirements of the customers. A good customer
use the banks running finance limit as a mean of protecting his credit in
the market and as a line of security defense to meet his commitments.
TYPES OF RUNNING FINANCE

I. Unsecured
Under such type of overdraft the bank pay upon the personal
security of the customer’s mentioned on the customer’s account.
II. Secured
Under this type of overdraft the bank allows his customer to

withdraw more than his deposits after giving security against the
amount overdrawn.
The securities against which they given are:
i. Share certificate, Saving certificate
ii. Deposits
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iii. Mortgage of property
iv. Guarantee of person
SMALL LOANS
Loan is allowed to contractors clearing and forwarding agents.
3. FINANCE AGAINST THE FOREIGN BILLS (FAFB)
The advance facility is allowed both to local foreign bills and is
classified as under:-
i. FAFB (Local) advance against Railway receipts and truck receipt, a
company with bills of exchange and invoices, are given under this
head.
ii. FAFB (Foreign) advances against foreign bill, covering bills of
exchange bills of lading airway bills of exchange bills of lading
airways bills etc.
4. AGRICULTURE LOANS
Loans to the farmers with holding up to 25 acres for meeting their short
terms, medium and long terms Agricultural production requirements, such
as:
i. Agricultural inputs
ii. Tube wells
iii. Live Stock Framing
iv. Land improvement
5. INDUSTRIAL LOANS
Besides the short-term loans which play a part in working capital medium
and long-term loans are also given to industrial sector for purchase of
machinery and other capital nature goods.
Bills Clearing Department

INTRODUCTION
Every bank acts in two way i.e.
i. Paying Bank
ii. Collecting Bank
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Here in theory no legal obligation on a banker to collect cheques,

drawn up to other banks for a customer. It is, however, an important
function of crossed cheques. A large part of this work is carried out
through the N.I.F.T.
NIFT- National Institutional Facilitation Technologies (Pvt.)

Limited:
NIFT is a joint venture between a consortium of six major banks and
private sector. It is responsible for the establishment and management of
automated clearinghouse facilities in Pakistan. NIFT is proactively involved
in the modernization of payment systems in Pakistan.
FUNCTION OF CLEARING DEPARTMENT
The following are the main functions of clearing department.
1. To accept transfer deliveries and clearing cheques from the customer

of the branch and to arrange for their collection.
2. To arrange the payment of cheque drawn on the branch and given for
collection to any other branch of Habib Bank of Pakistan or any other
members, or sub-members of the local clearing area..
3. To collect amounts of cheques drawn on members, sub-members of

the local clearing house, sent for collection by those Habib Bank
Limited, branches which are not represented a the local clearing area.
PROCEDURE OF DEPOSITING CHEQUES IN CLEARING DEPARTMENT

Whenever a customer wants to deposit cheque, etc, he fills a pay in slip
and hands it over the counter along with the instruments he wants to
deposit with bank. As far as possible, the customer desire that on of the
staff member fill in a slip for him, he should be obliged promptly.
One portion of the perforated pay in slip is handed over to the depositor
and the portion becomes the regular portion of a credit voucher
TYPES OF CHEQUES COLLECTED BY CLEARING DEPARTMENT

a. Transfer Cheques
Transfer cheques are those cheques, which are collected and paid
by the same branch of bank.
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b. Transfer Delivery Cheques

Transfer Deliver cheques are those cheques, which are collected
and paid by two different branches of a bank, situated in the same city.
c. Clearing Cheques
Clearing cheques are those cheques in which the payee (Person who
deposit cheques for collection) and the drawer of a cheque maintain the
account with different banks.
These clearing instruments are handed over to NIFT after posting

necessary stamps and checking them for any errors. Then further process
of clearing is carried on the behalf of NIFT.
Forex Department
International trade is growing and with the development of international
trade it has become more imperative. For countries to devote more and
more attention to the complicated mechanism of Foreign Exchange. It is
more important in case of developing countries. It is need of time, that a
country should conserve its foreign exchange resources.
MEANING OF FOREIGN EXCHANGE

The foreign exchange term refers to the principles that determine
the rate of exchange. It covers following three senses:
i. The mechanism or system by which international obligations or

indebtedness are fulfilled.
32
ii. The currency of one country is exchanged for that of another.
iii. The principles on which the people of world settle their debts to one
another.
Letter of Credit:
It is a negotiable instrument through which the bank of the exporter deals
with bank of the importer through the guarantee of a bank. There are
different parties involved in the L/C, e-g importer, exporter, importer bank,
exporter bank, and advisory bank. LC involves banking channels in foreign
trade to mitigate risk.
The procedure of opening of an L/C is as follow
 The first thing is the Performa invoice. The Performa invoice is a
document (say a clip), which is, sends by the exporter to the
importer and includes the information like. Descriptions of goods,
what type of goods you are needed and what are the quality, rate
and originating country etc.
 Before to open a L/C the bank also consider that the goods which
the importer is importing is allowed by govt. of Pakistan or not.
Because the importer is not allowed to import that goods which are
prohibited by the Govt. of Pakistan.
 The importer is asked to show the membership certificate of any
chamber of commerce and industry affiliated with the Pakistan
federation of chamber of commerce and industry.
 Fill the import form of the govt. of Pakistan, which is the proof of this
that there is no objection on the goods, which the customer is
importing.
 What type of goods you are needed and what are the quality, rate
and originating country etc.
Necessary Documents required for L/C:
 NTN
 Tax Authority registration certificate
 Chamber of Association’s trade certificate
 Type of Business
 NIC
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 Margin
 Registration No.
 Application for L/C
On providing these documents the importer will be given the L/C form
named as
IB-8.
Contents of IB 8
1. Request for LC
2. Rate
3. Importer and Exporter’s particulars
4. Amount
5. Terms
6. Partial Shipment (Allowed, not allowed)
7. Transshipment (Allowed, Not Allowed)
8. Port of Loading and destination
9. Payment Mode
I. Sight
On seeing the documents the importer has to pay.
II. At Sight and Negotiation:
It means that exporter will submit his documents with the bank and
immediately asks for payment.
III. Acceptance:
On showing the documents to the importer, the bank asks him to accept
that he will pay within 30, 60, 90, 120, 180 etc days.
10. Documents Required:

 Certificate of Origin.
 Commercial Invoice
 Bill of Lading / Air way bill.
Charges:
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For L/C following charges are applicable;

 Commission
 Postage
 L/C Advising commission
 L/C amendment Commission
 L/C confirmation Commission
 L/C Negotiation Commission
Payment Mode:
In foreign trade payment modes are
1) Advance Payment: Importer makes payment before delivery of
goods.
2) Open A/C: Importer makes payment after receiving the goods.
Issuing foreign exchange accounts cheques books

Another function of foreign exchange department in Jinnah Chowk branch
is to issue foreign exchange accounts cheques books to customers on
request. This process is not yet centralized. Cheque book is issued within
15 minute of receiving request from customers after making necessary
register entries and posting stamps on it.
Deposit Accounts
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Current Accounts
Make unlimited transactions while maintaining a low minimum balance
every month. HBL is currently offering three types of accounts in current
account category. Their detail and name is as under.
1. HBL BusinessValueAccount
2. Current Account
3. Basic Banking Account (BBA)
HBL Business Value Account
 Unique transactional account for Businessmen

 Up to 5.35%* profit per annum
 Profit calculated daily, paid every quarter
 Minimum balance of Rs. 20,000
 HBL DebitCard and Inter Branch Transaction System (IBTS) facilities
 Up to 10 Bankers Cheques free (at minimum balance of Rs.
500,000)
 Funds transfer to any bank through HBL PhoneBanking
Current Account

 Unlimited transactions
 Non-profit bearing
Basic Banking Account (BBA)
 Can be opened with only Rs. 1,000

 No minimum balance requirement
 Upto 2 withdrawal and 2 deposit transactions free every month
 Unlimited withdrawals through HBL DebitCard
 Non-profit bearing
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Savings Accounts
Avail the flexibility of making transactions while earning profit on
daily/monthly basis. HBL is currently offering five types of accounts in
savings account category. Their detail and name is as under.
1. HBL Value Account

2. PLS-Savings Account
3. Remittance Munafa Plus Savings Account
4. Daily Munafa Account
5. Daily Progressive Account
HBL Value Account

 7.19%* profit per annum
 Profit calculated monthly, paid every quarter
 Deposit ranges from Rs. 10,000 to Rs. 1,000,000
 Two withdrawals free every month
PLS-Savings Account
 5.06% profit per annum*

 Profit paid bi-annually
 Unlimited transactions
Remittance Munafa Plus Savings Account
 Special account for receiving foreign remittances

 5.12%* profit per annum
 Profit paid every month
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Daily Munafa Account
 Profit calculated daily, paid every month

 Up to 8.84% profit per annum*
Daily Progressive Account
 Unique transactional account for Institutions

 Profit calculated daily, paid every month
 Up to 11.57% profit per annum*
 Inter Branch Transaction System (IBTS) facility
Terms Accounts
Invest your savings in HBL term deposits for a fixed duration and earn
profit while keeping your savings secure. HBL is currently offering one
type of account in terms account category. Their detail and name is as
under.
1. HBL Advantage Account
 Multiple options for tenure and profit payout
 Loan facility up to 90% of investment
 Minimum investment of Rs. 25,000
 Withdrawal at end of fixed term
Profit at
Tenure
maturity
3 MONTHS 7.50%*
6MONTHS 8.00%*
1 YEARS 11.00%*
3 YEARS 13.00&*
5 YEARS 14.00%*
10 YEARS 17.00%*
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Foreign Currency Accounts

HBL offers Foreign Currency Accounts in multiple currencies as savings
and term accounts. Their detail is as under.
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.
*NOTE: All the rate and terms and condition are revised by HBL after
every six months periods. These rates are only applicable for period
01.07.09 to 31.12.09. Further detail of terms and conditions about
profit and rates is given in annex “B”.
39
HBL Car Loan

HBL Car Loan helps customers to get their preferred car through a
simple and hassle-free process, backed by superior service and
support. Now customer can drive a car he always wanted.
Features
 Choice of used, new local/imported and reconditioned imported car.

 Repayment options ranging Upto 7 years.
 Upto 85% of financing for the car of your choice.
 Insurance at all times for complete peace of mind and security.
 Round the clock support available through HBL PhoneBanking; you
can place your requests and queries, track the status of your
repayment/loan account and avail other value-added services
through HBL PhoneBanking.
Eligibility Criteria
How to apply
 Just visit any HBL branch or Habib Bank Auto Finance Centre for
details and application.
 Submit complete set of application without any charges to the
branch or the Auto Center.
40
 Sign the necessary documents on approval of the application

 Payment is released within 24 hours of the submission of post-dated
cheques and initial payment after approval of the request.
Documentation
Salaried Individuals
 Complete Application Form

 Salary Certificate / Most recent Salary Slip
 Bank Statement for past one year
 Two Copies of NIC
 Employment Certificate with date of joining
 Two passport size photographs
 Copy of the last paid utility bill (residence)
Self-Employed Business persons/Professionals

 Letter of proprietorship / Registered Partnership Deed
 Certified latest Form A and Form 29, where applicable, along with
articles and Memorandum of Association
 Copy of last paid utility bill (residence)
 Bank Statement for the last 1 year
41
HBL Car to Car

HBL CarToCar is a revolutionary car financing offer. It makes the car of
customer choice affordable and practical with a buy back guarantee.
HBL CarToCar offers matchless features and unique options at the end of
the lease. Now customer can drive a new car at the end of every two
years.
Features
Pay only for what you use
When customer lease a car under HBL CarToCar, he only pay for that part
of the car’s value that he use during the lease term. The car’s residual
value (forecasted for the end of the specific lease term) is agreed with
him at the start of the lease term. This amount is deducted from the car
price thus lowering the finance amount. This finance amount is based only
on a part of the car’s value and not the full value of the car. Therefore,
HBL CarToCar offers very low installments as compared to any
conventional financing.
Upgrade of lifestyle
HBL gives customer the guarantee that if he wishes to return the car to
HBL at the end of the lease term, he will not have to pay off the car’s
residual value. Instead, HBL will directly settle this outstanding liability for
customer under the buy back guarantee. Hence, he can upgrade to a new
car as frequently as two years without any complication and hassle.
Affordability
With HBL CarToCar, customer only has to pay the difference between the
car price and the pre-agreed residual value to the bank. As a result, the
monthly installment may even be 40% to 50% less than that of
conventional financing.
Flexibility
42
HBL CarToCar offers customers several choices at the end of the lease
term:
• Upgrade - Simply return the car to HBL and drive a new one home
• Walk away - Return the car to HBL and end the lease
• Buy - Keep the same car. Just make a one-time settlement of the car’s
residual value to HBL or pay the same in easy installments over a
specified extended period of time
• Sell - Enjoy the gain from selling off the car at a higher price in the
market than what you ay HBL as the residual value
Eligibility Criteria
Documentation
Salaried Individuals

 Salary Certificate / Most recent Salary Slip
 Bank Statement for past one year
 Employment Certificate with date of joining
 Copy of the last paid utility bill (residence)
Self-Employed Business persons/Professionals

 Letter of proprietorship / Registered Partnership Deed
43
 Certified latest Form A and Form 29, where applicable, along with
articles and Memorandum of Association
 Copy of last paid utility bill (residence)
 Bank Statement for the last 1 year
HBL Credit Card

By the help of HBL credit card customer enters into the world of
convenience and flexibility. Accepted at over 29 million merchants
worldwide, HBL Credit Card makes shopping fun and paying simple. So
that a customer can make the most of his shopping experience.
44
Benefits
Buy now, pay later
Buy what customer want, when he want and pay for it later. A credit card
statement will be sent to him every month with details of all his
purchases. He will have 21 credit free days to make the payment from the
statement date. Customer should pay at least 3 days in advance if he
makes your payment by cheques to allow enough time for clearance.
Pay as much as customer wants

A customer can pay the entire or as little as 5% of the outstanding
balance in his statement. The unpaid amount will be transferred to his
next month’s statement along with applicable services charges.
Cash advance
Customer can go to any specified HBL branch and withdraw cash at the
counter. He can also go to any 1Link ATM in Pakistan and more than
1,000,000 ATMs worldwide displaying the Visa/Plus logo. Withdraw cash
up to the available cash advance limit on his HBL Credit Card for a charge
applicable from the withdrawal date.
Balance transfer facility
Card holder can pay off balances he owes to other banks through his HBL
Credit Card at a lower service charge.
Security
Card holder cannot lose cash if he doesn’t carry it! In the event that his
card gets stolen/lost, he should call HBL PhoneBanking to have his card
blocked immediately.
Hbl debit card

HBL Visa Debit Card allows a card holder to pay for his purchases directly
from his bank account. He doesn’t have to carry cash and his monthly
45
statement provides him with a complete record of all his transactions so

he can manage his expenses with ease.
Features
No Interest
HBL Visa Debit Card is the perfect way of paying for purchases as it gives
access to the exact amount of money a customer needed, as and when he
needs it. There is no interest or credit on payments because he spends
from the money available in his personal HBL Account.
Ease & Security

HBL Visa Debit Card offers ease and convenience because card holder
doesn’t have to visit an ATM to withdraw cash. Paying with the HBL Debit
card is safe because it eliminates the need to carry cash. A single swipe
automatically debits the exact purchase amount from his personal HBL
account.
Spending Limits
The daily spending limit at shops and outlets on HBL Visa Debit Card is Rs.
100,000. (These figures are subject to the balance available in account).
Free Account Statement
46
HBL cardholders receive a free monthly account statement for their Debit
Card and ATM transactions to help them keep track of their spending.
International Recognition & Acceptability

HBL Visa Debit Card is accepted at over 20 million Visa merchants
worldwide, including over 10,000 merchants in Pakistan. As an ATM card it
is accepted at more than 1,000 1-Link & M-Net ATMs in Pakistan and
864,000 Visa ATMs worldwide. No matter where card holder is, with the
HBL Visa Debit Card, HBL is always with him.
No Liability
In case of a lost or stolen card, card holders are protected against
fraudulent transactions made on their card after they report the incident.
HBL Personal Loans

With the rising cost of living, it is becoming increasingly difficult to make
expensive purchases or meet unexpected expenses. HBL is helping
customer finance them with Habib Bank personal Loans (old name flexi
loan). Customer may avail a personal loan of up to SIX TIMES of his net
take-home salary subject to a maximum of Rs.300,000/- provided he work
for an organization approved by HBL.
Features
 Flexible tenure: 12, 24, 36,48 or 60 months

 No processing fee
 Repayment through easy and affordable monthly installments from
salary.
 Credit Life & Disability Insurance
 Repayment through easy and affordable monthly installments
47
 You determine the need, we help you finance

 Option of add up replacement for existing customer.
 Minimum salary Rs. 12000
 No salary limit for existing customers.
 23% or 21% rate for existing users instead of 25%
HBL Phone Banking

Now the bank is just call away. Customer can now call HBL PhoneBanking
and save a trip to the branch. His query will be resolved in a single
telephone call from anywhere and at anytime.
T-PIN Generation
Customer’s TPIN (Telephone Personal Identification Number) is generated
the first time he calls and he can use it as your password for verification
purposes, self-service banking through IVR and additional services
through HBL’s PhoneBanking Officers. Customer can change his TPIN
anytime he like.
HBL PhoneBanking services for Deposit Account customers

Customers can use the Interactive Voice Response (IVR) system or talk to
HBL PhoneBanking Officers to:
 Get his account balance
 Get information about the last 5-10 transactions carried out on his
account
 Request bank statement, either through fax or email (as supplied in
his subscription form)
 Get details of transactions from the last 6 months on each of the
accounts listed on his subscription form
 Change and/or modify his contact details
 Transfer funds between his own accounts (as listed in the
subscription form) or from his account to a third party account (as
listed in the Third Party Authorization Form)
48
 Transfer funds from his own account to an account in another bank

under the 1-Link network (Inter Bank Funds Transfer)
 Generate his own choice of ATM Pin without filling a request at your
branch
 Inquire about HBL’s product offerings
 Lodge a complaint in case of any inconvenience
 Inquire about the daily accounts related profit rates and currency
exchange rates
 Request a number of physical instruments and/or branch banking
related services that he might require, including:
 Pay Order
 Demand Draft
 Statement
 Balance Certificate
 Cheque Book
HBL PhoneBanking services for HBL CarToCar and Car Loan

customers
HBL CarToCar and HBL CarLoan customers can enjoy the following
services through HBL PhoneBanking:
 Balance Inquiry
 Last 5-10 Transactions
 Statement Generation (Email and Fax)
 Account Maintenance
 Assistance in case of Car Theft/Damage
Hbl Bank Assurance

HBL and New Jubilee Life Insurance Company Limited (NJLI) introduce
Amaan (Retirement Plan) and Tabeer (Child Education & Marriage). These
products have been designed keeping HBL’s customer base as the focus
and will provide life insurance along with an investment option.
49
Amaan (Retirement plan)

Amaan is a pension plan that provides an opportunity for growth through
investment in a balanced portfolio with post-retirement income benefits.
The plan covers life insurance and gives attractive returns on investment
to its customers.
Tabeer (Child Education and marriage plan)

Tabeer is a plan that provides parents with a means to accumulate a fund
over a period of time which can then be used to pay for a child’s
education or marriage. Plans are available for both under and over 45
years of age.
Lockers
50
Lockers are available in many of the HBL branches in different sizes like
small, medium and large; some branches also have extra large and
cubical lockers. Except rural areas because of security reasons.
Eligibility for using lockers
Only the account holders can avail the facility of lockers. The annual rent
will be directly debited from their respected accounts at the start of the
year.
Charges
Annual
Key deposit
Size rent
(refundable)
Rs.
SMALL 2500 2750
MEDIUM 3000 3850
LARGE 4000 6050
Key deposit is refundable at the time handing over the locker to bank. For
the staff of HBL key deposit is not required and also the annual rent is
very low for them.
51
HBL CORPORATE BANKING

HBL Corporate Banking Group comprises a seasoned team of Relationship
Managers (RMs) to meet the demanding service standards of large
corporations. A long history of financing and nurturing relationships in
Pakistan has given HBL a unique insight, enabling it to provide timely and
effective financial solutions for their customers to meet the growing
challenges of a global economy. For a corporate customer, with a turnover
of at least PKR 300 million, HBL has a range of solutions designed to help
him with his banking needs. Their RMs have the expertise customer need
to create tailored financial solutions catering to the specific requirements
of his business. Whether establishing a new venture or expanding an
existing business, HBL’s team understands customer’s banking needs and
works closely with him to realize his goals.
Services
HBL provides the following services to meet customers funding
requirements:
 Working Capital Finance, including Overdraft, FE Loans, etc.
 Pre and Post Shipment Export Financing (PKR and USD based)
 Import Financing (PKR and USD based)
 LMM Funding
 Receivable Discounting
 Islamic Banking facilities
 Cash Management Services
 Trade Services including Letter of Credit, Letter of Guarantee and
Standby Letter of Credit, etc.
HBL CORPORATE CENTERS
1.Corporate Centre, Karachi 6.Export Processing Zone, Karachi

2.PIA Branch, Karachi 7.Steel Mills, Karachi
3.Stock Exchange, Karachi 8.Stock Exchange, Lahore
4.Corporate Centre, Islamabad 9.Morga Branch, Rawalpindi
52
5.Corporate Centre, Faisalabad 10.Corporate Centre, Multan

11. Karachi Port Trust, Karachi
HBL COMMERCIAL BANKING

HBL’s Commercial Banking Group targets medium sized companies with a
turnover of at least PKR 50 million. Its business units are located in
Karachi, Lahore, Faisalabad, Sialkot, Gujranwala and Peshawar. Each unit
is dedicated to service business clusters located within these cities. They
have the ability and the resources to meet the needs of customer’s
business with their pro-active, responsive and experienced Relationship
Managers who are committed to understanding customer’s business.
Services
HBL offers financing for the following:
 Working Capital
 Procurement of Inventory
 Receivables
 Procurement of Machinery
 Expansion of production facilities
 Import of raw materials
 Exports
 Guarantees
HBL COMMERCIAL BANKING CENTERS

1.Al-Noor, Karachi 9.Foreign Exchange, Karachi
2.Korangi Industrial Area, Karachi 10.Napier Road, Karachi
3.Saddar, Karachi 11.S.I.T.E. Karachi
4.Tariq Road, Karachi 12.Panorama Centre, Lahore
5.Badami Bagh, Lahore 13Peco Road, Lahore
6.Kashmir Road, Sialkot 14.Paris Road, Sialkot
7.Small Ind. Estate, Sialkot. 15.Circular Road, Faisalabad
8.Peoples Colony, Faisalabad 16.Trust Plaza, Gujranwala
53
17.Super Market, Peshawar
HBL Zarai Banking

HBL ZaraiBanking facilities are spread across the country and provide
financing through more than 800 of their branches. HBL’s presence in all
agriculture belts of the country ensures easy access to farmers in rural
areas. HBL ZaraiBanking provides loans to small-scale land owning
farmers as well as large institutionalized and alliance based finance,
enhancing agricultural harvest and, in turn, economic output of the
country.
Products
HBL ZaraiBanking enables farmers to invest in premier quality seeds,
fertilizers, pesticides, agricultural implements and non-farm setups
through its various product programs.
Crop Inputs
Crop specific finance for purchase of Agriculture inputs such as seed,
fertilizer, pesticide and other related inputs.
Farm Implements
Finance available for purchase of farm implements & machinery like
combined harvester, sprayers, ploughs, tube wells and other crop-related
tools/implements.
Tractors/Agricultural Vehicles
Finance available to individual farmers, self-employed tractor operators,
providing the option to select vehicles from a range of different
manufacturers.
54
Livestock
Finance available for feed, medicines, raw material, raising charges and
other related activities.
Poultry
Finance available for all poultry related activities including poultry farm
construction/equipment, hatchery plant & machinery, poultry feed, poultry
medicines, composite feed production, poultry processing and other
related activities.
Fish Farming
Finance available for inland fish farms as well as deep-sea fishing. This
includes procurement of boat, fish locating equipment, nets & ropes, ice
maker, fish farm water solution, hatchery construction/equipment,
purchase of medicines / feed and other related activities.
Group Lending
Joint finance facility for a group of farmers with small land holdings for
working capital requirement.
NOTE: These finances may be availed under Demand Finance or Running

Finance categories. Demand Finance is usually available for short term
financing needs while Running Finance is available on the basis of
revolving limit.
ISLAMIC BANKING
Islamic Banking is a growing market segment that offers attractive
opportunities to potential and existing customers. At HBL, Islamic Banking
offers Shariah compliant products and services to meet the short and long
term requirements of business, trade and industry.
Shariah Compliance
HBL’s Islamic Banking products are in strict compliance with the tenets of
Shariah and bear Shariah Compliance Certification from an independent
Shariah Advisor. Their Shariah Advisor has in depth experience in Shariah
55
rulings (Fatawa) and teachings at different forums with qualifications of

Dars-e-Nizami, M.A and L.L.B. HBL also have a Shariah Scholar, as
member of their Shariah Supervisory Committee to ensure a sound
Shariah Compliance mechanism, giving prompt responses to customer’s
needs and access to Shariah knowledge.
Products and Services

Corporate and Commercial customers can choose from Shariah compliant
banking solutions to meet their business needs.
Ijarah (Leasing)
Medium to long term facility for vehicles, plant and machinery leased out
to the client on rental basis.
Diminishing Musharaka
Medium to long term facility for vehicles, plant and machinery on joint
ownership basis.
Murabaha
Local and Import facilities for purchase of raw materials, semi finished and
finished goods, stores or spares.
Trade Services
Letter of Credit Facility, Collection of Foreign Bills, Collection of Local Bills,
Letter of Guarantees.
Customers are welcome to visit their Islamic Banking branch for the
following services:
 Current Account (PKR, USD, EURO, POUND STERLING)
 Basic Banking Account
 ATM/Debit Card Facility
 Foreign / Inland Remittances
 Utility Bills Collection
 E-banking / Internet Banking Services
 24/7 Phone Banking Services
56
 Personalized customer friendly services

 Saving Deposits will be introduced soon
Learning as an intern
As every body knows that "Knowledge without practice is sterile "In order
to give vent to this idea an Internship program of six to eight weeks has
been arranged in different esteemed organizations during M.B.A. In this
regard on 15th of June 2009, I was asked by Mr. Mirza Saeed (HR officer in
HBL regional office Sahiwal) to go to Habib Bank Jinnah Chowk branch to
start an internship of seven weeks there. During this period I got a chance
to work and learn in following departments of the bank:
 Foreign exchange department
 Bills clearing department
 Credit department
 I.T department
 Cash department
 Accounts, ATM and Lockers department
57
Duties and learning in Foreign exchange department

First of all I started my training in foreign exchange department of the
bank under the supervision of Mr. Asif Iqbal (Manager Forex department). I
came to know about the different functions of foreign exchange
department and how to perform these functions during my work in the
department.
My duties in the department were related to the followings:
 Foreign currency exchange rates.
 Letter of credit (L.C) both opening and negotiation.
 Letter of guarantee
 Issuing check books for foreign currency accounts
 Remittances applications.
Learning
Opening of of L.C., bank starts working on opening process after an
application is received from the buyer (importer). I came to know about
the process of opening of L.C, documents that bank demands from
applicant, form used for that purpose, getting A.T (Availance Ticket) from
regional head office and scanning and mailing the documents to head
office Karachi for the purpose of getting approval, and payment on
maturity date. Opening and negotiation both are centralized process in
Habib bank therefore approval from head office is required.
Bank starts negotiation of letter of credit (which would be already opened
by importer’s bank) after the application from seller (exporter). Before
sending the documents for payment to importer bank negotiator bank
must ensure that the entire document mentioned in Claus 46A of the L.C
are attached and complete.
During the week I also worked on Remittances application. An
applicant who wants to transfer funds abroad must have a foreign
currency account in the bank. State Bank of Pakistan only allow account to
account transfer of funds abroad through banks. And I came to know
about the process and information required to fill the form. I also came
know about the process of issuing foreign currency account’s cheque book
58
to customers. During the week I learn many things about the mechanism
of foreign trade.
Duties and learning in bill clearing department

The second department in which I got a chance to work was bill clearing
department. During the work in clearing department I came to know about
the different functions of clearing department and how to perform them. I
came to know the process of receiving cheques by Dak, how to check
cheques for any error like, the cheques should be of the bank which is the
clearing member of area which comes under Jinnah Chowk branch for
example if the cheque is of bank Al-Fallah Lahore then it should go to
zonal branch of Lahore region instead of zonal branch of Sahiwal. Then
checking whether the amount of cheque and OBC (outward bank
collections) voucher attached to it is same or not. If no error is found then
making register entries by noting down their OBC number branch code
and amount of the voucher. Then:
 Calculating the total amount of vouchers by summing individual
amounts.
 Calculating the total amount of cheques by summing individual
amounts.
 Preparing an add list to be attached with clearing instruments
(cheques).
 Writing vouchers for demand drafts.
And I also came to know about the different types of stamps and their use
in particular situation like DAK RECEIVED stamp and CLEARING stamp.
After attaching add list, clearing instruments are handed over to NIFT for
further processing. These clearing instruments are delivered to their
respective banks for clearance by NIFT. I also learnt in case of Banker’s
Cheques how to verify signature from the book in which all the signatures
of authorized persons of HBL are given with their specific code. And I also
worked on OBC (Outward bank collection) forwarding schedule. I came to
know the process of sending cheques or other clearing instruments for
clearance to zonal branch of another region.
 Filling vouchers
59
 Assigning OBC numbers

 Making entries in OBC register
Duties and learning in credit department

After bill clearing department I started my work and learning in credit
department of the branch. Credit Manager told me about the terms and
conditions of the commercial loan, types of commercial loan like industrial
loan and loan for merchants, how to make proposal for commercial loan,
document required to make a proposal, markup of commercial loan (18.5
% annually). He also gave me chance to view some old proposals and the
proposal on which he was working.
Different types of consumer financing.
 Flexi loan (personal loan)
 Auto finance
 Lifestyle loan
Only the government servant who has his salary account at least six
month old in HBL can apply. Different markup for different categories like
21%, 23% and 25%.
 21% for existing users’ upto 3 year duration
 23% for existing users for 4 or 5 years duration.
 25% for new customers
I also did work on documentation process for personal loan. I came to
know about the different types of document required to complete a case
for sending it to regional head office for approval, document like branch
check list, application form, Copy of CNIC of customer and two references,
CNIC verification report from NADRA, customer’s account statement,
finance agreement form etc.
I also came to know about different types of securities which a bank
demands from customer while issuing loan. e.g. Guarantees, Mortgage,
Hypothecation and Pledge.
60
Duties and learning in Accounts, ATM and Lockers

department
Then I learned about ATM (automatic teller machine). I came to know
about the functions and working process of ATM machine. Loading cash
and balancing at the time of loading again. Next my main concern was to
know about all the aspects of ATM card. I came know about the types,
process of issuing ATM card to customers, filling forms, how to activate
ATM card, charges of issuing and using ATM card.
Then I spent my time in lockers department. I took all the information
about the terms and conditions of allotting and operating a locker, types
of locker like small, medium and large, charges of using lockers, key
deposit (refundable), filling application forms, insurance amount for
specific size of locker and etc. I also came to know about the process of
operating locker by the customer, how to open the locker with the help of
two keys.
 1 key in the hand of bank officer (anticlockwise)
 2nd key in the hand of customer (clockwise)
Customer is allowed to operate the locker in full privacy. Only the
customer himself or other person authorized by him can operate the
locker. After that bank officer has to take the signature of the customers
on attendance register maintained for this purpose.
Then my duty was in Accounts department. I came to know the procedure
for filling the form to open an account, different types of stamps required
and about signature of the staff. Documents required to be attached with
the form.
 Copy of CNIC
 Utility bill
 Provisional receipt
 KYC (Know Your Customer)
And how to post an account on system after filling the form. Then I came
to know about Saving accounts and different types of accounts in saving
category and terms and conditions of each type.
61
1. HBL Value Account

2. PLS-Savings Account
3. Remittance Munafa Plus Savings Account
4. Daily Munafa Account
5. Daily Progressive Account
Then current accounts

6. HBL Business Value Account
7. Current Account
8. Basic Banking Account (BBA)
Term accounts
9. HBL Advantage Account
10. Investment plus Deposit
FC accounts
11. FC-SB
Savings Account offered in 3 currencies, USD (US dollar), EUR (Euros) and
GBP (UK pound)
12. HYFFD (High Yield Foreign Currency Fixed Deposit)
Available in 1 month, 2 month, 3 month, 6 month and 12 Month in USD,
EUR and GBP
Assignments
(1)During my work in accounts department Mr. Khalid Dogar (manager
operation) assigned me the duty of checking the files of previously
opened accounts for any type of discrepancies like utility bill or service
certificate of the account holder is attached or not and checking stamps
and signature of the staff etc. It was because an audit of these files in the
coming month is scheduled. Almost above 50% of the application forms
were having discrepancies of different types. This turns out to be very
informative experience for me. Deposits are considered as lifeblood for
any bank to survive. I came to know about the procedure and different
types of deposits that customers can maintain in HBL, return rates that a
customer can get and other terms and conditions of each type of account.
As far as checking the old files are concern it seems boring but from my
62
point of view it was very informative. The learning I got while doing this
job would never be easy to get otherwise.
(2) Mr. Khalid Dogar assigned us another task. State bank of Pakistan has
instructed all the banks in Pakistan to make sure availability of
computerized national identity cards of all the account holders. We were
given a list of accounts from which CNIC was required and preprinted
letters. Our task was to take the information from accounts like Name,
Address and Account type by entering the account number in the system
and then printing that information on one corner of the letters. This also
turns out to be a very informative experience for me. I learn and get a
chance to work on computer software that the HBL is using, how to view
account information, checking balances and updating the information.
(3) Due to my familiarity with their computer software I was given another
task of updating account information on their computer system MISYS.
Like account holder’s name, address, CNIC number etc. In case of any
problem I was consulting it with Mr. Asif Iqbal. This task gave me more
chances to learn about the computer system of HBL and also I can proudly
say that I have my own share of working in computerizing HBL’s record.
How this experience will impact my career

Working for 07 weeks in HBL Jinnah Chowk branch as an intern was very
informative experience for me. During the time I learnt many new things
which are surely going to help me in my professional career. It was a good
experience for me to observe and to be the part of practical working of an
organization like HBL. During the internship I got a chance to understand
general consumer’s behavior and his needs and wants related to banking
services and products.
63
Recommendations
As we seen from the previous analysis of the financial statements I have

realized that that Habib Bank is performing very well since its inception. It
is quite difficult to give suggestion to improve the banking conditions
Habib Bank Limited. As we know that nothing is perfect, there is always a
room for improvement, so I will recommend following suggestions for HBL:
 Employees Training programmes must be introduced on continuous

basis so that Employees have understanding with the latest
developments especially with the customers.
 Bank should introduced incentive plans for employees on regular

basis so that if employees may work whole heartedly for the welfare
of their organization. While giving incentives qualification, work,
experience, hard work and such other factors must be considered.
 Mismanagement of resources must be avoided as much as possible

as it decreases profit but also discourage hard worker and honest
employees.
64
 Fresh graduates must be recruited. As the combination of

Experienced and fresh can produce better results and it will improve
the efficiency of management.
 Habib Bank is going towards mobile banking but the problem is that a
common client has no idea of its usage due to lack of marketing. I
think that a proper marketing programme must be launched for
client’s awareness.
 Banks different schemes must be conveyed to the targeted

customers so that to have a reasonable share in market.
 Bank should help the society by providing interest free loans to the
Talented Students.
 Online Banking should be introduced in all the branches.
 To motivate the employees their remuneration / salaries should be

made at par with top tier Banks.
 Aggressive publicity campaign must be introduced through press and

Electronic media for new products and scheme by initiating vigorous
marketing policy.
 Bank should adopt such an induction plan that when a customer

opens his account with the bank he should be supplied with a booklet
which enables him to know the procedure of filing the cheques, pay-
in-slip etc. It will save a lot of time of the bank staff afterward during
the conduct of the account of that customer.
 The attitude of the bankers with all of their customers is not the
same; they pay more attention and good service to some of the
customers and neglect a major portion of them. Some of the
customers approach to the bank officials and get their work done
before others; it is not a good practice. All the customers should be
treated equally.
 HBL should increase its communication with customers about the

terms and conditions of its different products and services.
65
Bibliography
Material on these books, articles and websites has helped me a lot in
preparation this report
Books
 HBL Corporate Profile 2008

 HBL Annual Reports 2008 and 2009 first Quarter
Articles & Documents

66
 BANKING SECTOR REFORMS IN PAKISTAN:

http://www.ishrathusain.iba.edu.pk/speaches/BANKING_SECTOR_REFORMS
.pdf
 www.encyclopedia.com/doc/1G1-61864366.html
Websites
 www.hbl.com
 www.habibbankltd.com
 www.hblasset.com
 www.investopedia.com/articles/07/banking.asp
 wiki.answers.com/Q/Evolution_of_banking
67

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February 21, 2011 [HABIB BANK LIMITED:]

No one can say that I am perfect, everyone should admit that

so I bow my head before Almighty Allah with gratitude. I am also

very much thankful and presents salute to many individuals who

have helped me in shaping this report. I am also very much thankful

to lot of former fellows and contemporary colleagues who took the

way this text could be further improved. I have no words to express

my gratitude to my advisor Mr. Kashif Ullah Khan for his intellectual

guidance without which it could have been rather difficult for me to

complete this report.

I am also very thankful to the staff Habib Bank Limited

KHEKASHAN branch especially to Mr. Akbar Ali (Branch Manager)

who provided me an opportunity to work in friendly environment.

It was an honor for me to work with:

Mr. Kashif ullah Khan (Operations Manager)

Mr. Syed Muhammad Hafeez Ullah (Assitant Manager)

Mr. Noman Ashraf (Retail Banking Officer)

Mr. Imran Hamdani (Head cash Department)

No. Description Page

sufficient resources. By 30th June 1948 the number of schedule banks in

On December 29, 2003 Pakistan's Privatization Commission announced

During the time of my internship in Habib Bank Khekashan Branch

I had been assigned to several departments to learn and experience the

working of branch banking and on the basis of grasped knowledge and

experience, this report is being presented to the management of Habib

History of Banking In Pakistan

PRE NATIONALIZATION ERA:

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

BANK NO. OF BRANCHES DEPOSITS

NBP 579 5,660

UBL 497 5,670

MCB 506 1,640

ABL 145 570

 Working of banks was extended to under developed areas.

 Market expansion for credit and deposits.

 Decrease in service level of bank officers.

 Decrease in profitability as well.

However the effect of expansion was enormous and it can also be

BANK POSITION IN 1992

NBP 1448 128,679

UBL 1684 87,482

MCB 1288 50,013

ABL 750 33,757

TOTAL 7096 453,362

C) POST NATIONALIZATION ERA

The- privatized banks are;

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

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

c) UBL taken up by UAE party in 2002.

d) December 29, 2003 HBL was taken by AKFED

After these changes a large number of private and foreign banks

Speci alised Banks Commercial Banks

About Habib Bank Limited

*Rating given by JCR-VIS

HISTORY AND BACKGROUND

PRIVATIZATION OF HABIB BANK

Board of Directors was reconstituted to have four AKFED nominees,

VISION, MISSION AND VALUES

R. Zakir Mahmood PRESIDENT & C.E.O

Mushtaq Malik DIRECTOR

Ahmed Jawad DIRECTOR

Strength can be defined as an area where a company is best at