CHAPTER 1:

INTRODUCTION

1.1 BACKGROUND:
The aim of this report is the studying and analysis of askari bank (AKBL) and
its branch office at nowshera, in particular. The main purpose of my internship is to
prepare and submit a report as a partial fulfillment for the award of bba degree from
abdulwali khan university mardan. this report has the aim to share my knowledge and
experience that i have gathered during my academics and practical training at askari
bank. being the world-class bank, askari bank has maintained the world-class
standards in all aspects including financial standards. this report has covered the
financial strategies and practices that are being followed in askari bank.

Pakistan’s economy at present is going in depression. The

importance of sound banking system cannot be denied in such critical time to re-
stabilize the economy, which must meet the financial needs of the growing
agriculture, industrial and commercial/services sector. In the present day world,
economy has started dominating every sphere of life and for the socioeconomic
growth of any country, monetary institution is critical. Banking sector is the backbone
of the industrial sectors, trade and commerce of the country hence providing stimulus
to overall development of the economy. Askari Bank since 1991 has played a pivotal
role in the development of Pakistan. Like other multinational banks, ABL has adopted
a customer-oriented approach, in order to provide quality products according to
customer needs and stands as a role model for the other banks. Askari Bank works
round the clock to provide services that are unmatched in the region. It has the
experienced, committed team of professionals with diversified expertise. This report
has the aim to cover all operational aspects of Askari Bank and products that it offers.

1.2PURPOSE:
The main purpose of the internship was to work in an organization and apply the
theoretical knowledge in the real life situation. Another purpose was to improve managerial
skills in general and interpersonal skills, communication skills, decision making and
analytical skills in particular.

1
1.3SCOPE:
The time duration of six weeks was quite adequate for the completion of study
and observation of the Bank. Askari bank is one of the well-established banks of
Pakistan; efforts were made to study the existing setup and functions of Bank. Some
of problems faced by the Bank have been identified and remedies have been
suggested to these problems. During internship at ASKARI BANK Branch nowshera,
the following departments were observed:

 Deposit Department
 Remittances Department
 Credit Department
 Accounts Department
 Foreign Exchange

While working in these department problems were identified and recommendations

were given to overcome those problems. Also comparative analysis of five years
financial statements and SWOT analysis was done. An overview of five-(5) year
performance of the overall ASKARI BANK is also included.

1.4 METHODOLOGY:

During internship at ASKARI NOWSHERA BRANCH the most important

task was to collect quality information about the organization as possible. Due to this
reason, a number of techniques we used to collect the required material and compile
the report. Data is collected in two ways:

1.4.1Primary data:

The first hand data, or data that is collected for the first time is known as primary
data.

Methods used in collecting primary data:

1 Personal observations.

2 Discussion with the staff members of the bank.

2
3 Internet

4 Television

1.4.2Secondary data:

Secondary data is the data that have been already collected by and readily
available from other sources.

Methods used in collecting secondary data:

 Annual Reports
 Manuals of departments of the bank
 Relevant books
 Brochures and circulars of the bank
 Internet
 Previous internships reports

1.5Scheme of report:

In order to provide reader a comprehensive data, the report is divided into four
sections.

Section 1

This section encompasses the background of the study. It also looks into the purpose,
scope, methodology and scheme of the study.

Section 2

It gives over all view of the Bank. In this, I have discussed comprehensively the
history of banking as well as historical background of Nowshera cantt Branch, its
present operations, mission and objectives as well.

Section 3

This section encompasses the departmentalization of Askari Commercial Bank

Limited. In this section attention has also been given to its specialized departments,
their operations and functions. Some light has also been shed on management and
organizational structure of Nowshera cantt Branch.

3
Section 4

In this section, observing the operations of the Bank, findings, recommendation, and
conclusions and these suggestions have also been given to the management of Askari
Commercial Bank Ltd Nowshera cantt Branch.

Being subsidiary business units, Askari bank limited is powered by army welfare
trust.so before preceding a bank history; we first take a quick glance of

1.6ARMY WELFARE TRUST

1.6.1Introduction:
Army Welfare Trust enjoys a unique and proud history. The Pakistan Armed
Forces have established several organizations for running industrial andcommercial e
nterprises. These roganizations 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.

1.6.2Vision:
To be one of the leading business housing employing best business practices.

1.6.3Mission:
To undertake safe and profitable commercial activities in a manner that portrays army
welfare trust image as a respected market leader while generating maximum funds for meeting the
welfare requirements of the Army.

1.6.3Core values:
We have an unwavering commitment of being a good partner, focused on building
productive, collaborative, trusting and beneficial relationships with governments, other companies,
customers, communities and each other.

4
Milestone:
 1984
Askari Sugar Mills was established in district Badin, province Sindh
 1990
Askari Woolen Mills started its operations in March 1990
Askari Shoe project was established in May 1990.
Askari Real Estate unit was established in 1990.
 1992
.Askari Bank Ltd. commenced its operations in April 1992
 1993
.Askari Leasing Ltd. was established in September, 1993
 1995

Askari Aviation Pvt. Ltd. was established in July 1995.

Askari General Insurance Company Ltd. was established in October 1995

 1996

Askari Guards Pvt. Ltd. was raised in May 1996.

AWT acquired two Cement Plants at Wah and Nizampur in 1996.

Askari Pharmaceuticals was found in 1996.

Mobile Askari Lubricants Ltd. started operations in December 1996.

 1997
Askari College for Entrepreneurs was established in July 1997 at Rawalpindi.
 1998
Askari Information Systems Ltd. was established in 1998.
 2002
Askari Compressed Natural Gas Project was launched in 2002.

1.7CURRENT BUSINESS UNITS

Army welfare trust runs these business units:

5
1. Public listed companies
 Askari bank limited
2. Public Unlisted Companies
 Askari Cement Ltd Wah
 MAL Pakistan Ltd
 Askari Securities Ltd
 Askari Investment Management Ltd
3. Private Limited Companies
 Askari Aviation Pvt Ltd
 Askari Guards Pvt Ltd
 Askari Enterprises Pvt Ltd
4. Other Business Units
 Askari Cement Nizampur
 Askari Real Estate
 Askari Projects (Woolen & Shoes)
 Askari CNG
 Askari Farms and Seeds
 Army Welfare Sugar Mills
 Blue Lagoon & Army Welfare Mess
 Askari Cement Marketing

6
CHAPTER#02

LITERATURE REVIEW

2.1 EARLY GROWTH OF BANKING

Banking in fact is as ancient as human society. For ever since man came to
realize the
Importance of money as a medium of exchange. Perhaps these were the Babylonians who developed
banking system as early as in 2000B.C. It is evident that the temples of Babylon were used as banks
because of the prevalent respect and confidence in the clergy.

2.2 DEFINITION OF BANK

Finance is the life blood of trade, commerce and industry. Now-a-days,
banking sector acts as the backbone of modern business. Development of any country
mainly depends upon the banking system.

The term bank is either derived from Old Italian word “banca” or from a
French word “banque” both mean a Bench or money exchange table. In olden days,
European money lenders or money changers used to display (show) coins of different
countries in big heaps (quantity) on benches or tables for the purpose of lending or
exchanging.

A bank is a financial institution which deals with deposits and advances and
other related services. It receives money from those who want to save in the form of
deposits and it lends money to those who need it.

These are the following types of banks:

 Central Bank
 Commercial Bank
 Industrial Bank
 Exchange bank
 Saving bank etc…

7
2.3 BANKING IN INDO-PAKISTAN SUBCONTINENT

Ever since, money became the medium of exchange in our society, banks
existed in one form or the other. In those days there function was mainly to lend
money to the people and the kings (aslam 2011).

The Vedic Epics clearly mentioned about giving and taking of credit and also
contracts of debts at dicing. Later on, Manu in his “Sammurti” clearly mentioned
these transaction by saying, a sensible man should deposit his money with a person of
good family, of good conduct, well acquainted with the law, veracious, having many
relatives wealthy and honorable”. Manu has also prescribed the rules to govern the
policy of loan and rates of interest.

During the fifth century people were accustomed to use “Hundies” as a credit
instrument. The land revenue was collected generally in kind, while the services were
paid mostly in cash. Therefore, Bankers assistance in these and other financial matters
of state was very much necessary. The bankers enjoyed very good reputation, and the
people deposited there jewelry and cash holding them for custody.

Loans were given to the people against personal and other securities such as
ornaments, goods and immovable properties and the banker and customer had very
cordial relations.

The Muslim rulers provided substantial encouragement to the farmers by

giving them interest-fee loans and grants in cash. They also allowed them to pay the
land revenue in cash or kind. This “agricultural finance” resulted in bumper food
production, which had a great surplus after consumption at home. Therefore, it was
being exposed against pure gold.

Industrial development was not ignored at all. State loans were also given for
increase in production. These factories thus produced enough for local consumption
and left substantial quantities for exports. Textile, calico-printing and dyeing, pottery,
china-ware, indigo, opium, metal-work, paper, leather and sugar etc, were being
exported to foreign countries like china, East Indies and Pacific Islands against pure
gold. Thus the port towns of “Surat” and “Coa” (Gujarat), “Calicut” and “Cochin”

8
(Malabar Coast); “Masulipatam” and “Negapatam” (Coromandal coast) became the
centers of the world trade, where foreign buyers used to come for purchase of Indian
commodities.

Muslim historians of the 12th century have also mentioned some, bankers
known as “Multani” and “Shroffs”. They used to act as agents to the government to
collect revenue. Such a prosperous society did need a well-regulated financial
administration and monetary system. Muhammad Tughlaq was the first king to have
introduced token currency system in India. Akber established mints all over the
country under a well conceived plan so that they could function as the offices of
“Central Bank” of that time; they also worked as the drawing and disbursing offices to
the Government.

Though the Muslim rulers did not establish “Bank” as such, yet they
revolutionized the entire financial and monetary structure in India and the old
“Sahokars” and “Mahajins” were eliminated. Government introduced reforms were so
effective that these “classical-bankers” were pushed into the past. Due to the
prosperity of Indian society of that time, the Royal mints and treasuries did act as
agencies for transfer of money as well as for custody of valuables.

2.4 HISTORY OF BANKING IN PAKISTAN

At the time of independence, the areas, which now constitute Pakistan, were
producing only food grains and agricultural raw material for Indo-Pakistan
subcontinent. There were practically no Industries, and whatever raw material was
produced was being exported from Pakistan. However, commercial Banking facilities
were provided fairly well here.

Before partition of sub-continent, the entire banking system was almost in the
hands of Muslims. When Hindus capitalists became sure of division of sub-continent,
they transferred their funds to safe places in India. Pakistan was declared an
independent state. In mass scale migration of Non-Muslim from Pakistan to India
caused the reduction in bank deposits. The number of scheduled bank branches was
reduced form 619 to 213, and the number of non-scheduled bank reduced from 411 to

9
106. The independent state of Pakistan did not have a central bank of its own at time
of independence.

As a new country without resources it was very difficult for Pakistan to run its
own banking system immediately. Therefore, in accordance with the provision of
India independence Act of 1947, as Expert Committee was appointed to study the
issue. The Committee recommended that the Reserve Bank of India should continue
to function in Pakistan until 30th September 1948, so that problems of time and
demand liability, coinage, currencies, exchange etc, are settled between India and
Pakistan. It was also stipulated that Pakistan would take over the management of
public debt and exchange control from Reserve Bank of India on 1 st April, 1948, and
that India Notes would continue to be legal tender in Pakistan till 30 th September
1948. Following the announcement of independence Plan June 1947, the Hindus
residing in the territories now comprising Pakistan started transferring their assets to
India. Moreover, the banks included those having their registered offices in Pakistan
transferred to India in order to bring a collapse of new State. Some important dates are
mentioned here.

The first important date was establishment of Habib Bank Limited, on August
25, 1941 at Bombay. This was the first bank in India sub-continent, which was
operated by Muslims. Habib Bank Limited transferred its Registered Head Office to
Karachi on August 07, 1947; it played a great role in the Pakistan’s Economic
Development.

The second important date in the history of Banking in Pakistan is the

establishment of Australasia Bank Limited, at Lahore on December 03, 1942. Its
name was changed to Allied Bank of Pakistan Limited, on July 01, 1974. After
nationalization of the Banking Industry on January 01, 1947, three other banks were
merged in to it.

The other important date is July 09, 1947; when the Muslim Commercial Bank
Limited was registered at Calcutta. Its registered Head Office was transferred to
Dacca on August 17, 1948. Subsequently its registered Head office moved to Karachi
on August 23, 1956.

10
The most important date is July 01, 1948, when state Bank of Pakistan was
established at Karachi as the Central Bank of the Country. Central Bank addressed
itself with an urgent task of creating a national banking system. In order to attain this
goal it provided every help and encouragement to Habib Bank to expand its network
of branches, and also recommended to Government the establishment of a new bank
which could serve as an agent of the State Bank. As a result, The National Bank of
Pakistan came into being on November 09, 1949, and by 1952 it became strong
enough to take over the agency function from the Imperial Bank of India. This was
the first Commercial Bank in the public sector. By December 1973 there were
scheduled Banks with 3042 branches all over the country. They were:

1. National Bank of Pakistan.

2. Habib Bank Limited.
3. Habib bank (overseas) limited.
4. United Bank Limited.
5. Muslim Commercial Bank Limited.
6. Pak Bank Limited.
7. Standard Bank Limited.
8. Commercial Bank Limited.
9. Australia Bank Limited.
10. Bank of Bahawalpur Limited.
11. Premier Bank Limited.
12. Sarhad Bank Limited.
13. Lahore Cooperative Bank Limited.
14. Punjab Provincial Cooperation Bank Limited.

At the end of Jun 2002, the number of scheduled Banks in Pakistan was 52 with
7,874 branches. Out of these; there are 25 Pakistani banks with 7,779 branches
and 27 foreign banks with 95 branches.

2.5 HISTORICAL BACKGROUND OF ASKARI COMMERCIAL

BANK
ABL was incorporated in Pakistan on October 09, 1991, as a Public Limited Company. It
commenced operations on April 1, 1992 and is principally engaged in the business of banking, as

11
defined in the Banking Companies Ordinance, 1962. The Bank is listed on the Karachi, Lahore &
Islamabad Stock Exchanges and its shares are currently the highest quoted from among the new
private sector banks in Pakistan. The Head office of Askari Bank, Limited is located at AWT plaza,
Rawalpindi. The bank obtains its business commencement certificate on February 26,
1992. And started its operations from April 01, 1992. Army welfare trust directly and
indirectly holds a significant portion of the bank’s equity at the year-end. The bank
has 226 branches in Pakistan and Azad Jammu and Kashmir at the year-ended of
2009.The bank is a scheduled commercial bank and is principally engaged in the
business of banking as defined in the banking companies’ ordinance, 1962. We are
proud to say that Askari Bank Limited is now a leading market player in the Financial
Sector in Pakistan.

2.6 VISION STATEMENT

To be the bank of first choice in the region.

2.7 CORE VALUES OF BANK

 Commitment: Passionate about our customers’ success, delighting them with
the quality of our service.
 Integrity: A distinctive investment, delivering outstanding performance, return
and value.
 Fairness: Exemplary compliance, governance business ethics.
 Team-work: Caring for our people and helping them to grow.
 Service: Dedication towards social development and improvement in quality
of life.

2.8 MISSION STATEMENT

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 professional standards, while providing
enhanced value to all our stakeholders, and contributing to society.

2.9 CORPORATE OBJECTIVES

 To achieve sustained growth and profitability in all areas of business.

12
  To build and sustain a high performance culture, with a continuous
improvement focus.
 To develop a customer service oriented culture with special emphasis on
customer care and convenience.
 To build an enabling environment, where employees are motivated to
contribute to their full potential.
 To maximize use of technology to ensure cost effective operations, efficient
management information system, enhanced delivery capability and high
service standards.
 To manage the Bank’s portfolio of businesses to achieve strong and
sustainable shareholder returns and to continuously build shareholder value
 To deliver timely solutions that best meet the customers‟ financial needs
 To explore new avenues for growth and profitability

2.10 CREDIT RATING

The Pakistan Credit Rating Agency (PACRA) as given in Annual Report 2008
maintained both ABL long term and short term ratings at “AA”and “A1+”. The rating
specifies a very high credit quality and very strong capacity for timely payment
of financial commitments

2.11 AWARDS AND ACHIEVEMENTS

 Recently Askari Bank have been once again been given the “Best Retail Bank
in Pakistan” by The Asian Banker for the 2nd consecutive year.
 Askari Bank has been given the 1st Consumer Choice Award 2004 for the
Commercial Banking Category by the Consumer Association of Pakistan.
 The bank has also received the Corporate Excellence Award for the financial
sector from the Management Association of Pakistan (MAP) for the years
2002, 2003 and 2004.
 The bank has been declared “The Best Bank in Pakistan” by the global finance
magazine for the years 2001 and 2002.
 Askari bank won the first prize in the Best Corporate Report awards for the
year 2000, 2001 and 2002 from the institute of chartered accountants of

13
 Pakistan and the institute of cost and management accountants of Pakistan, for
the services sector.

2.12 BUSINESS ETHICS AND CODE OF CONDUCTS

Askari Bank seeks to maintain high standards of service and ethics enabling it to be
perceived as impartial, ethical and independent. In addition to the general guidelines
the following are the salient features of the Bank’s code of ethics and conduct.

• Presence of a corporate culture that seeks to create an environment where all

employees are treated equitably and with respect.

• Employees must carry out their responsibilities in a professional manner at all times.
They must act in a prudent manner and must avoid situations that could reflect
unfavorably on themselves, the Bank or its customers.

• Employees must commit to the continued development of the service culture in

which the Bank consistently seeks to exceed customers’ expectations. Fairness,
Truthfulness and Transparency govern our customer relationships in determining the
transactional terms, conditions, rights and obligations.

• Employees must safeguard confidential information which may come to their

possession during the discharge of their responsibilities. Respect for customers’
confidential matters, merits the same care as does the protection of the Bank’s own
affairs or other interests.

• Employees must ensure that ‘know your customer’ principles are adhered to by
obtaining sufficient information about the customers to reasonably satisfy
ourselves as to their reputation, standing and the nature of their business
activities.

• Employees must avoid circumstances in which their personal interest conflicts, or

may appear to conflict, with the interest of the Bank or its customers. Employees must
never use their position in the Bank to obtain personal advantage or gain.

• Employees must not enter into an agreement, understanding or arrangement with

any competitor with respect to pricing of services, profit rates and / or marketing
policies, which may adversely affect the Bank’s business.

14
• Employees must not accept gifts, business entertainment or other benefits from a
customer or a supplier / vendor, which appear or may appear to compromise
commercial or business relationship.

• Employees must remain alert and vigilant with respect to frauds, thefts or illegal
activities committed within the Bank premises.

2.13 NEW NAME AND LOGO INTERPRETETION

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.

B: THE COLOURS

15
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
properties of 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”

16
Evolution, not revolution, is key in the development of a brand. The stylized AB,
presented in 3D and in the new brand colors, is a solemn nod to 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.

17
 CHAPTER#03

ORGANIZATONAL STRUCTURE

3.1 CORPORATE PROFILE (2017)

Corporate body of askari bank consists of 10 boards of directives and 1 chairman.

1. President
2. Chief Executive
3. Secretary
4. NIT Nominees

List of board of directors

1. Lt.Gen Shafqat Ahmed(Hi)(M)(Retd)
2. Lt.Gen Javed Iqbal,(Hi)(M)(Retd)
3. Mr.Qaiser Javed
4. Dr. Nadeem Inayat
5. Mr.Manzoor Ahmed(Nit)
6. Mr Kamal A.Chinoy
7. Mr. Justice(Retd)Sarmad Jalal Osmanay
8. Syed Ahmed Iqbal Ashfaq
9. Mr.Mushtaq Malik
10. Syed m.husanini(president and chief executives)
Lt.gen Khalid Nawaz khan, Hi (M) (Retd)

Board audit and compliance committee

 Syed ahmed iqbal ashraf(chairmen)

 Mr.qaiser javeed
 Dr.nadeem inayat
 Mr.manzoor ahmed

Board human resource and remuneration committee

18
  Lt.Gen Shafqaat Ahmed,(Hi)(M)(Retd)Chairman
 Dr.Nadeem Inayat
 Syed Ahmed Iqbal Ashraf
 Mr.Mushtaq Malik

Company secretory

 Mr. M. A. Ghazali Marghoob, FCA

Chief financial officer

Legal advisors

 RIAA Law
 Advocates & Corporate Counsellors

Shariah Advisor

 Dr. Muhammad Tahir Mansoori

Auditors

 KPMG Taseer Hasdi & Co.

 Chartered Accountants

Registered/head office

AWT Plaza, the Mall,

P.O. Box No. 1084

Rawalpindi, Pakistan.

Tel: (92 51) 9063000

Fax: (92 51) 9272455

E-mail: webmaster@askaribank.com.pk

Website: www.askaribank.com.pk

19
3.2 ENTITY RATINGS
 Long Term: AA
 Short Term: A1+ by Pakistan Credit Rating Agency (PACRA)

3.3 ORGANIZATIONAL CHART

It shows the linkage of employee to employee infect it covers every single

individual who is working in one specific organization for common goal.
Organizational chart of Askari bank shows the step by step relation from
president to senior vice president then in branch hierarchy it shows the step by
step relation from vise president to peon.

Sources: annual reports of AKBL 2017

20
3.4 BRANCH NETWORK OF ASKARI BANK
Askari Bank has expanded into a nationwide presence of 200 Branches/sub-branches including 20
dedicated Islamic Banking Branches, and whole sale bank Branch in Bahrain. A shared network of
over 2,991 online ATMs covering all major cities in Pakistan supports the delivery channels for
customer service. As on December 31, 2008, the Bank had equity of Rs.12.97 billion and total assets
of Rs.206.19 billion, with over816, 629 banking customers, serviced by 6,496 employees.

21
3.5 ORGANIZATIONAL STRUCTURE OF HEAD OFFICE

22
 BOARD OF
DIRECTORS

PRESIDENT

EXECUTIVE
COMMITTEE

SEVPs/ SEVPs/ SEVPs/ SEVPs SEVPs

CHIEF CHIEF CHIEF WINGS WINGS
SINDH PUNJAB NWFP &
AND AJK
BALUCHIS
TAN

Sources: Annual reports of askari bank 2017

3.51 BRANCH MANAGER RESPONSIBILITIES

 Overall affairs of the branch.

 Checking and ensure effectiveness of control system and working procedures.
 Meeting existing and new customers.
 Marketing business/deposit development and public relations.
 Assignment of accounts to relationship manager/officer.
 Income and business budget.
 Performance evaluation of reporting staff.
 Develop objectives for reporting staff.
 Review of reports.

23
  Conduct periodical meeting of the staff.
 Liaison with controlling offices.
 Approval of credit proposal with-in delegated authority.
 Follow-up for recovery of non performing finance.
 Restructuring and rescheduling of classified accounts.
 Special projects/assignment by controlling officers.

3.52 OPERATIONS MANAGER RESPONSIBILITIES

 Supervision of all assigned operation department.

 Ensure check and control systems are in place.
 Create cordial and customer friendly atmosphere in branch.
 Ensure continuous satisfactory service to customers.
 Review of daily activity report.
 Ensure compliance of bank/SBP and local regulation.
 Approval of new accounts.
 Approval of expenses with in delegated authority.
 Preparation of expenses budget.
 Develop duty list for all branch operation staff.
 Performance evaluation of reporting staff.
 Cross-training to the staff.
 Management of staff attendance and vacation.
 Provide leadership and guidance to operations departments.
 Reporting of all exceptions to controlling office.
 Conduct periodical meeting of operation staff.
 Represent branch on operation matter.
 Rectification of audit irregularities.
 Maintenance and upkeep of branch.
 Act as compliances officer.
 Special projects/assignment by manager/ controlling offices.

24
All the account and transaction of Western Union are conducted by the operation
manager.

3.6 Ornogram of ASKARI NOWSHERA BRANCH

BRANCH MANAGER
(hummayon raja)

INCHARGE CREDIT
MANAGER
BDO OPERATIONS
(mr.hummayon)

REMITTANCE ACCOUNT
credit agriculture auto finance
ONLINE BILLS OPENING
FOREX (amjad ali) (sajjid ali)
(naqab) (salman)
DEPARTMENT
INCHARGE
(yasir hayyat)
BDO

cashier
deposits ACCOUNTS CLEARANCE
(danish and
(yasir hayyat) shah khalid (yasir hayyat)
tehsin)

25
 CHAPTER#04

DEPARTMENTALIZATION

4.1 OPERATIONAL BANKING DEPARTMENTS

The organization of ABL is a complete banking system. This banking system is collection of
interrelated departments that works together to achieve the objectives of the organization. I can rightly
say that ABL is a hierarchical system in that it includes other sub departments and these are integrated
to work together to deal their routine work activities.

The ABLs existing system include following departments

A: Account opening department.

B: Clearing department

C: Remittance department

D: Accounts department.

E: Cash Department.

F. credit Department

G. Auto Finance Department

H. Foreign Trade Department

4.2 STRUCTURE OF NOWSHERA ABL BRANCH

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 Branch Manager
Hummayon raja

Credit department Manager Operations

Amjad ali hummayon

Accounts Deposits Department

Shah Khalid Salman

Auto finance Department Agriculture Department

Sajjid ali Amjad Ali

Remittance Department Foreign Exchange

Department.
Naqab khan
Yasir Hayat

Cash Department
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Danish and tehsin
4.3 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. As
Borrowing funds from different sources has become an essential feature of today business
enterprises. But in the case of a bank borrowing funds from outside parties is all more vital because
the entire banking system is based on it. The borrowed capital of bank is much greater than their own
capital. Banks borrowing is mostly in the form of deposits. These deposits are lent out to different
parties. Such deposit creation is done through opening an account in the bank.

Functions

• It opens the accounts.

• It deals with the lockers issuing and regarding information.

• 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 filling form, filling
various deposit slips etc.

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

Types of accounts

Customers open accounts in different forms:

1. CURRENT ACCOUNTS

These accounts are for the current deposits i.e. customer can deposit and withdraw the amount any
time and no profit is paid.” This account is operating through cheques and ATM
cards. In current account, there is no profit and interest on the money kept.no deduction of zakat is
done, and can be open with atleast RS.5000/-

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 2. SAVING/PLS (PROFIT LOSS SHARING)

Pls. saving accounts opened by individuals (single or joint), for charitable institutions, companies,
educational institutions, firms etc. This account is opened for profit basis; return is paid at flexible rate.
There can be profit or loss on the investment of the Customer’s funds deposited with
the bank and this amount shall be acceptable to the Customer. The profit is paid after
six months. Deduction of Zakat is also done is PLS accounts.

3. TERM DEPOSIT ACCOUNT

The deposits that can be withdrawn after a specified period of time are known as fixed or term
deposits. In this account person or account holder keeps the money for definite period of time. The
amount deposited is not withdrawn able by cheques. After the maturity of account, account holder
receives the actual money along with the profit given after each six months during deposited period.
The term deposit account varies from one month to 5 years, and the minimum balance requirement is
Rs.5000/-

4. Askari Special deposit Account (ASDA)

It is a special scheme known as “ASKARI Special Deposit Accounts”. Amounts in

these accounts are accepted as prescribed by bank from time to time. The deposits are subject to PLS
rules/regulations and invested by the bank on the same basis.
RULES
 The profits on ASDA is payable as determined by the bank in the basis of profit and loss
sharing arrangements.
 The profit as determined by the bank shall be final binding on the account holder.
 Profit shall be paid every six months on declaration of actual rate of profit on such deposits
by H.O.

4.4 CLEARING DEPARTMENT

There is no legal obligation on a banker to collect cheques drawn upon other banks
for a customer. However, it is function of almost every modern bank of collection of
cheques and bills on behalf of the customers. Clearing department services are
provided in order to make arrangements for the economic collection of cheques, DD‟s
pay and other negotiable instruments. A large part of this work is carried on through
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the clearing house. The clearing house is place where different ambassadors of
various banks exchange the instrument. Initially the bank used to perform this activity
themselves. But now, National Institutional Facilitation Technologies (NIFT) is
performing this operation among about 40 different Banks, 5571 Bank branches in
185 cities of Pakistan. The NIFT has made the operation much easier and quick. Here
at this branch, normally the representative of NIFT comes daily near 2 pm and not
only collects all instruments that are accumulated in this branch but also assign the
instruments to the branch that are delivered by other banks. This process is made very
safe and secure by taking the assistance of Seal tags.

The instruments that are normally cleared via this department include

 Cheques
 Demand Drafts
 Pay Orders

4.5 REMITTANCE DEPARTMENT

This department is concerned with transfer of money from one place to another place.

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 bank’s branch from outside the city. Then it makes the
relevant remittances.

In broad sense, we can divide that involved parties into four classes, which are as
follows

1) Remitter

The remitter is the person who initiates the request for remittance. He /She comes to
issuing bank, requests for a remittance to be made, and pays the money to be remitted.
This is not a free service and the customer has to pay its charges. Also it is not
necessary to be account holder of that bank for utilizing this service.

2) Remittee

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A remittee is known as the payee. It is the person in whose name the remittance is
made. or in other words, we can say that remittee is the person who receives the
payment.

3) Issuing Bank

The bank that sends or makes the remittance order on the request of customer in
termed as the issuing bank. For example if a person goes to the Askari bank and
requests for a remittance, then this Askari bank branch will be the issuing bank.

4) Paying Bank

Paying Bank is also called the drawee branch. It is the branch from where the
instrument is drawn by the remittee. It is usually located in a different city.

Instruments Used In Remittances

Following are the instruments that are used in remittances

Payment of Remittances

Pay Order (PO)

Pay Slip

Call Deposit Receipt (CDR)

Telegraph Transfer

Advance Tax against Remittances

4.6 ACCOUNT DEPARTMENT

This is one of the most important departments in banks. The bank daily transactions are recorded in
computers, nowadays, so the function of this department is to get a summary of all the transactions.
The credit and debit vouchers are arranged and saved for the record purpose. It also indicates, head
office entries as clearing, transfer delivery etc. On the weekend it has to prepare the extract which is
send to head office for reconciliation. Thus this department will create a link between head office and
branch office.

functions of Accounts department are as follows:

 Preparation of daily bank position Statement.

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  Checking Bank’s daily Activity
 Maintenance of book of the accounts of head office.
 Salary disbursement and investment of staff.
 Arrangement of stationary for bank.
 Dealing with disposal of commercial external audit reports and state bank
of Pakistan instructions.
 Pre audit checking of all bank transactions.

In the Askari Bank nowshera branch, the Human Resource Department also works
together along with the account department and by the same employees. Though most
of the human resource related policies and activities are centralized in Askari Bank,
yet this department perform some activities like performance evaluation report
making of bank employees ,feedback /complains from employees, any conflict
or problem resolution with the bank or its employees. This department also monitors
and handles matters relevant to internship and internees. Obviously it is this
department that clarify any candidate for internship approval ,then makes its
placement and finally evaluate its performance and task performed and grants the
Internship Letter.

4.7 CASH DEPARTMENT

The main function of this system is Receipts & payments to the customers, on behalf of their
account, through Cheques or any other negotiable instruments. All those transactions, which are held
on the counter on cash basis lies under the cash department. The cash system mainly deals with
following areas:

 Receipts
 Payments

Cheaques can be in two forms:

Open Cheques

Open Cheques are those cheques, which are paid across the counter of the bank. Open
cheques may be

Bearer Cheques

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In this case, any person who lawfully possesses a bearer cheque is entitled to receive
payment of that cheque.

Order Cheques:

In this case, the cheque amount is paid only to that person whose name is mentioned
at the cheque.

Crossed Cheque

In this case, the amount of this cheque is not paid at counter to the customer. Rather
amount of this cheque is transferred to the person’s account whose name is specified
on the cheque. Two parallel lines lying across in a crosswise direction lines are drawn
across the face of the cheque to devote cross cheque tag.

4.8 CREDIT DEPARTMENT/AGRICULTURE DEPARTMENT

The agri credit department enjoys offering its services right from the start of banking
operations here.

To a lot of extent, this department is in direct supervision of branch manager and well
as credit manager. It deals in both running as well as term financing.

It offers the following services,

 Kissan Ever Green Finance

 Kissan Tractor Finance
 Kissan Aabpashi Finance
 Kissan Livestock Development Finance
 Kissan Farm Mechanization Finance
 Kissan Transport Finance

B: General Credit Department/consumer finance

This department is intended to satisfy general public needs who want to take loan
from bank for their particular purpose or for business. Askari bank offers wide and
unique package to their customers. They are very attracting as well as worthy for the
customers.

The products offered by this department are

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 Personal Finance

One can avail unlimited opportunities through Askari Bank’s Personal Finance. With
unmatched financing features in terms of loan amount, payback period and most
affordable monthly installments, Askari Bank’s Personal Finance makes sure that you
get the most out of your loan. No matter what your need is, Askari Bank has more
ways to serve you than ever before.

 Borrower: Resident Pakistani Nationals.

 Facility: Term Finance
 Financing Limits: Maximum upto Rs. 500,000/. (Clean)

Maximum up to Rs. 1 Million. (Secured)

 Tenure: Maximum up to 5 Years

 Repayment: Monthly Installments
 Markup Rates: Competitive
 Servicing: Available at all Askari Bank branches
 Balance Transfer Facility: Available
 Eligibility:
 Age: Between 21 to 65 years
 Income: Minimum gross monthly income of Rs. 10,000/- only.

Employment:

Salaried: Minimum length of confirmed service with present employer is 6 months

with a total length of 1 year service.

Self Employed: Minimum 1 year in business.

Charges/Fees: As per current schedule of charges. The personal finance is much

flexible in its approach. For example , Askari bank offers financing of huge range
of electronic appliances and motorbikes against consumer financing. This is very
beneficial for those people who can afford quality home appliances at affordable
installments. For this purpose, Askari bank has signed agreements with the leading

34
manufacturers and companies like Samsung, Philips, LG, Dawlance, Honda, Dawood
Yamaha Limited. This flexible approach makes this offer very unique and attracting.

• Smart Cash

Borrower: Resident Pakistani Nationals

Facility: Personal Line of Credit

Financing Limits: Maximum upto Rs. 500,000/-(Clean)

Maximum upto Rs. 1 Million (Secured)

Tenor: One year (renewable).

Repayment: Monthly debt servicing on the outstanding balance.

Markup Rates: Competitive.

Servicing: Available at all Askari Bank Branches

Balance Transfer Facility: Available

• Mortgage Finance

Ever since the inception of life, shelter has been rated among the primary needs of
mankind. Owning a home for oneself still remains an exclusive dream for many.
Askari Bank has made the realization of your dream to have a house of your very own
possible. Whether you plan to build a house, tailor made to your requirements or buy
a constructed house, Askari mortgage finance enables you to pursue your goal without
any problems. Mortgage is a premium home financing product for customers aged
between 23 – 65 years belonging to the upper, upper middle and middle income
groups, residing in the urban areas of Pakistan.

• Business Finance

Borrower: Resident Pakistani Nationals.

Facility: Running Finance/Term Finance.

Financing Limits: Maximum upto Rs.50.0 Million

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Primary Security: Residential & commercial / built up Properly & Land.

Mode of Financing: Running Finance: One year line of credit (renewable)

Repayment: Running Finance: Monthly debt servicing on the outstanding balance.

Markup Rates: Competitive

Servicing: Available at all Askari Bank Branches.

Balance Transfer Facility: Available.

Eligibility

Age: 21 to 65 Years.

Borrowers: Resident Pakistani Nationals.

Employment: Minimum one year's business or professional experience in the

present business

Charge/Fees: As per current Schedule of charges

Lending Product Rates

Particulars Markup Rates

Personal Finance

Upto 3 Years 18%

Upto 5 Years 22%

Smart Cash

1 Year (Renewable) 22%

Business Finance

1 Year 1 Year Kibor + 3% to be reviewed on

Yearly basis.

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Mortgage Finance

20 years maximum 1 Year Kibor + 3% to be reviewed on

yearly basis.

Auto Financing 13% to 15%

4.9 AUTO FINANCE DEPARTMENTS

Consumer banking services

1: Askari Finance / Loans:

A: smart cash

B: personal finance

C: mortgage finance

D: Business finance.

2: Investment Products.

2. A: Askari Paishgi Munafa Term Deposit:

Askari Paishgi Munafa term deposit account is an innovative addition in the wide
range of bank’s products and value added services. This unique product will meet the
immediate financial needs of individual investors who want to invest funds for a
medium term. The most significant feature of this product is that the customer will
receive the entire profit upfront.

Salient Features

Tenure: 15 Months.

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Minimum Amount: Rs. 100,000/- or in multiples of Rs. 100,000/-

Profit Amount: Rs. 12,000/- on a deposit amount

ofRs.100,000/-

Profit Payment: Upfront at time of placement of funds.

Additional Benefits for Customers:

• Financing Facility up to 80% of Principal amount.

• Free Visa Debit Card issuance.

• Free Accidental Life Insurance coverage up to Rs. 500,000.

• No Minimum Balance requirement in checking account.

• 2 Free Pay Orders in a month. (Withholding Tax and other Government charges will
be applicable as per Law)

• No maximum limit for investment.

It is subject to applicable Zakat and Govt. levies and changes in the Banks policies
from time to time.

2. B: Askari Mahana Bachat Account (1 + 3 Years Term)

“Earn Rs. 842/- per month on investment of every Rs. 100,000/- for one year!" “Earn
Rs. 917/- per month on investment of every Rs. 100,000/- for three years!”

Askari Mahana Bachat Account is a Term Deposit facility available to individual

customer with the option of 1 and 3 Years tenure. It has been designed keeping in
view savings needs of individual investors who don’t want to block their funds for
longer terms, with a competitive rate of return paid monthly on the 1st of every
month. A financing facility up to 90% will be available for customers if required.

Salient Features

Product Type: Term Deposit

Eligibility: Individuals Only

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Balance requirements: Minimum Rs. 50,000/-Maximum uptoRs.10,000,000/-In
multiples of Rs. 25,000/-Tenure(s): 1 + 3 Years

Profit payment: Monthly - 1st of every month

Profit Rates: Competitive

Servicing: Available at all Askari Bank branches

Financing Limits: Upto 90% of the principle amount

2. C: Askari Roshan Mustaqbil Deposit

Askari Bank has launched the Askari Roshan Mustaqbil Deposit, a saving plan
specially designed for individual investors who wish to invest now for a regular return
at a later stage while keeping their principal amount intact. With Askari Roshan
Mustaqbil Deposit you can double your investment in a time period of ten years.
Invest now in the form of monthly deposits for five years and get paid back the same
amount for the next five years while receiving your principal amount in full at the end
of the tenure.

Salient Features

Product Type: Term Deposit

Eligibility: Individuals Only

Balance requirements: Minimum Rs. 5,000/-Maximum upto Rs. 50,000/-In

multiples of Rs. 5,000/- Tenure: 10 Years (5 + 5)

Profit payment: Monthly – on completion of first 5 years

Profit Rates: Competitive

Servicing: Available at all Askari Bank branches

Financing Limits: Upto 90% of the principle amount after completion of first 5
years

2. D: Askari Deposit Multiplier Account

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“Value of initial investment of Rs. 100,000/- will increase to Rs. 265,000/- at
maturity!”

Aim higher with your investments with Askari Deposit Multiplier account. This
account is for individual investors whose purpose is long term savings with high
returns. With a tenure of 10 Years and a competitive rate of return on maturity this
account is ideal for investors who wish to start saving for their future today.

Salient Features

Product Type: Term Deposit

Eligibility: Individuals Only

Balance requirements: Minimum Rs. 50,000/-Maximum upto Rs. 10,000,000/-

Tenure: 10 Years

Profit payment: On maturity

Profit Rates: Competitive

Servicing: Available at all Askari Bank branches

Financing Limits: Upto 90% of the principle amount

2. E: Askari value plus deposits

Askari Bank leads the way, yet again with the introduction of Askari Value plus
Rupee Deposit Accounts, which promise greater financial freedom and security, in an
unmatched way. Now you can open a "Value plus Account “while enjoying the
flexibility of a normal checking account.

Types of Value plus Account

1. Value plus Current Account

2. Value plus Saving Account

3. Value plus Time Deposits

Why Askari Value Plus Account?

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1. Free issuance of Debit Card

2. Free global accidental insurance coverage against debit card irrespective of balance
in the account or age of the cardholder

3. Free ATM Cash Withdrawal insurance

4. Free online funds transfer facility

5. Free internet banking services

6. Free of cost 24 hours global accidental insurance coverage up to Rs. 2 million

7. Facility of Supplementary Debit Cards

8. Monthly returns on saving deposits

9. Partial encashment facility for time deposits

10. Automatic roll over facility for time deposits

11. Our un-matched service quality

2. F: askari rupee traveller cheques

Askari Bank Limited has always remained at forefront in introducing innovative and
unique products in banking sector. Our financial instruments provide greater financial
freedom and security in an unmatched way to our valued customers. Askari Bank
offers you its "Rupee Traveller Cheques" eliminating all financial risks while
traveling. So avoid risk of carrying cash through Askari Bank's Rupee Traveler
Cheques.

"Your Best Travelling Companion"

Why Askari Bank's Rupee Traveler Cheques?

1. Free issuance

2. Free encashment

3. Profit will be offered at the time of encashment*

4. Nationwide acceptability

5. Facility of encashment in cash to the purchaser

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6. Facility of encashment through clearing

7. No purchasing limit

8. Valid until encashed

9. Easily transferable

10. Account relationship not mandatory

11. Fastest refund procedure in case of loss / theft

12. Safe & secure mode of funds transfer

13. Available in Rs. 10,000 Denomination at all branches of Askari Bank

14. Perfect subtitute of your cash

3: ASKCARD (Askari Debit Card)

Askari Bank is committed to provide you innovative and competitive solutions to

your banking needs in a more efficient and personalized manner. Your Bank enjoys a
strategic competitive advantage over all domestic players by virtue of its leadership,
large network and technological advancement. In line with our tradition of innovation,
Askari Bank takes pride in announcing launch of Askari Bank's Debit Card. Askari
Debit Card means freedom, comfort, convenience and security, so that you can have
retail transactions with complete peace of mind. Askari Debit Card is your new
shopping companion which enhances your quality of life by letting you do shopping,
dine at restaurants, pay your utility bills, transfer funds, withdraw and deposit cash
through ATM anywhere, anytime.

"Convenience at its best"

Why ASKCARD?

• Free of Cost (24) hours Global Accidental Life Insurance upto Rs. 500,000/- for
every cardholder irrespective of balance in the account

• Free ATM Cash Withdrawal Insurance upto daily cash withdrawal limit of the
cardholder against snatching, armed hold-up or forced deprivation of money

• Free issuance of Debit Card for new Value plus Accountholders

42
• Umrah Tickets for 2 lucky cardholders (Each year)

• Home insurance of 10 lucky cardholders (Each year)

• No hidden charges

• Free from carrying cash or cheque books

• Free Funds Transfer Facility

• Free Utility Bills Payments through ATM’s

• Shopping Facility at POS terminals

• Maximum daily cash withdrawal limit

• Balance Inquiry, Mini Statement

• Supplementary Cards

• Un-matched Online Real-time Services

4: Investment Certificates

Askari Bank's Investment Certificates not only provide the added security, investment
and monthly return to the customers. These certificates are negotiable and can be
transferred to third party. Investment Certificates can be issued for a period of 3
months and profit is payable on monthly basis through pre-printed tear-off coupons.

Product Features

1. Free issuance and free encashment

2. Account relationship with Askari Bank is not mandatory

3. No penalty on pre-mature encashment

4. Negotiable and payable in Pakistan in Pak rupees only

5. No purchasing limit

6. Valid until encashed

7. Encashable at all Askari Bank Branches

8. Profit is payable on monthly basis through pre-printed coupons

43
9. In case of loss / theft or damage, there is replacement / refund to the original
purchaser.

10. Encashment by third party

11. There is no penalty on pre-mature redemption, except that profit coupon shall be
valid only for completed month.

Rates of Profit Paid to Value plus A/C Holders & on ABIC

Particulars Profit Rates

Value plus Saving Deposits

Rs. 10,000/- to Rs. 24,999/- 2.50%

Rs. 25,000/- & above 3%

Value plus Time Deposits

Three months 5%

Six Months 5.50%

One Year 6%

Investment Certificates

First Month 4%

Second Month 4.50%

Third Month 5%

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 CHAPTER#05

PRODUCT AND SERVICES

5.1PRODUCTS AND SERVICES:

The product & services of Askari commercial bank limited are developed keeping in
view the customers needs & wants, & the expectation that the customer attaches with
its financial institutions. A product ACBL includes all those services which customer
normally required for effectively managing his business. ACBL offers the following
financial services to its customers.

1) Deposits

2) Advances

3) Products

4) International banking services

5.1.1 Deposits
One of the basic functions of commercial banking is to receive deposits. ACBL
accepts deposits in both local & foreign currency.

Local currency deposits:

• Current Account

• PLS Saving Account

• Term Deposit

• Notice Deposit

• Askari Faida Account

• Askari Special Deposit Account

• Value Plus Saving Account

• Askari Advantage

• Askari Faida Account

45
• Installment account

• Compound advantages

5.1.2 Advances:
Advances are major sources of earning of income for commercial banks. Banks
attracts surplus balances from the customers at low interest rates & makes advances at
higher interest rates to the individuals or business firms, ACBL offer these facilities in
two forms:

• Funded facilities

• Non-Funded facilities

5.1.3 Products:
1. Personal finance

2 Mortgage finance

p. Business finance

4, Askcar (car finance)

5. Askcard

6. Value plus

7. Traveler cheques

8. Askpower

5.1.4 ASKCARD:
"ASKCARD" is an Askari Bank's Debit Card. ASKCARD has been introduced as a
shopping companion. It lets the customer do shopping, dine at restaurants, pay their
utility bills, transfer funds, withdraw and deposit cash through ATM anywhere,
anytime.

ASKPOWER:

ASKPOWER is the name for Askari Bank's Pre-paid Card. Although, it is a "stored
value" card, but unlike an ATM or debit card, ASKPOWER is not connected to any
account. It is an instant cash card that can be used at any ACBL ATM or other ATMs

46
carrying 1-Link symbol, 1-Net Banking and at all designated Point of Sale
terminals. The card offers remarkable convenience for:

• Everyday purchases

• Payment of bills

•Safe alternative for carrying cash during traveling, special occasions, and emergency
back up.

• Easy transfer of money from one ASKPOWER card to other ASKPOWER

card.

• The ideal accessory for students.

• As a pre-paid card, ASKPOWER has its own built-in spending limit; the
Customer can set how much money is loaded to it and how frequently it is topped up.

• Money can be conveniently loaded to any card either by depositing cash at any
ACBL Branch or through the ATM.

• I-Net Banking from another ASKPOWER Card.

Key Features:

• Issued to ACBL / Non-ACBL customers. (NIC Card holders)

•Minimum Issuance Limit: Rs. 500/-.

• 100% customer acceptance.

• Card can be reloaded anytime.

• Transfer of money from one card to another card.

• Payment of Utility Bills through ATMs and Internet.

• Instant access to money; 24 hours a day, 7 days a week.

• Easy cash withdrawal through ACBL ATMs or ATMs carrying 1-Link or Orix
Leasing network symbol.

• Fast, private, safe and secure option for cash transfers.

• Replacement of card in case of loss, theft, damaged or defective card.

47
ASKSMART CASH

This personal line of credit is set up with a specified credit limit agreed upon by
customer and ACBL.

• The customer can withdraw cash from his credit line as and when they require.

• The markup is charged only on the utilized amount and for the number of days the
credit is used.

• The markup is lower than a credit card.

• Personal loan and balance transfer facility.

• Finance Amount up to Rs 1 Million revolving credit line.

ASKARI MASTER CARD:

The distinguishing characteristics are:

• No joining fee

• Worldwide acceptability:

This card is acceptable all over the world. It provides services at thousands of
locations in Pakistan and over 14 million establishments all over the world. The
customer can receive their monthly billing in Pak Rs, regardless of the currency of
purchase.

• Traveling safety net

In case the travel tickets are purchased on Askari master card, they are automatically
covered under the travel insurance plan for up to Rs.8 million on a gold card and Rs.4
million on silver card.

ASKARI TRAVELER'S CHEQUES:

Askari Bank's Travelers Cheques are available in the denomination of Rs.l0,000/-.the

distinguishing feature of these travelers cheques are:

• Light and safe

48
• No service charges for purchasing Askari traveler's cheques. They can be brought
against cash or debit to the personal account of the customers

• The customers are charged only 0.10% commissions whenever the traveler cheque is
encashed after 30 days of holding

• High security lithograph

• Ultra violet printing

• Special thread

• Anti scanner pyramid design

• Unique micro lines

• Easily refundable in case of loss and theft

5.2Services of Askari Commercial Bank

5.2.1 Foreign Remittances:

Remittance department performs the function of remitting funds i.e. to transfer funds
for customers from one location to another. The transfer of funds may be from one
branch to another or from one bank to other Remittances mean "the transfer of money
or fund from one place to another place through bank". It may be "inland remittance"
or "Remittance" Inland remittance may be classified as:

1) Within locality.

2) Outside locality.

1. Within Locality:

When a branch situated in Islamabad is required to send the draft to any other
branch situated in the same locality, the process will say to be within locality. I.e.
ACB main branch Islamabad, send any draft to ACB Apara branch, this is
known as within locality.

5.2.2 Telegraphic Transfer:

Telegraphic transfer is an important mode of remittance. It is the quickest mean of
transferring the funds from one place to another place by the use of telephone or

49
telegraphic. Now a day, new technology is used for this purpose i.e. fax, e-mail. The
big traders and businessman use this method of remittance in this method of
remittance the purchaser is not responsible for the dispatch.

How One Can Apply:

The purchaser fills an application form in which he mentioned the sum of

(T.T) name of payee, accounts number of payee and place of payment etc. The
purchaser signs the application form and the bank charge the commission for
this purpose.

5.2.3 Demand Draft & Pay Order:

For safe, speedy, and reliable way to transfer money, ACB Demand Drafts and pay
orders are available for customers at very reasonable rates. Any person whether an
account holder of the bank or not, can purchase a Demand Draft from a bank branch.
A demand draft is an order drawn by a bank on its branch or on another bank in a
different place requiring the later to pay on demand the sum of money specified in the
draft. Pay order is just like demand draft except the pay order is made for local
transfer of money whereas demand draft is meant for remittances of funds from one
city to another.

5.2.4 Mail Transfer:

Mail transfer draft is one of the bank modes of remittance. Mail transfer is issued by
one branch of bank to another branch of the same bank by instructing to branch to
pay the other branch by issuing mail transfer receipts. In M.T the purchaser is
not responsible for dispatch, but the bank will be responsible for dispatch.

How to Apply:

The purchaser fills application forms, which includes the amount of M.T name of
payee, account number of payee, name of the bank branch. Place of payment and
signature of purchaser. Bank charges the commission for this service.

5.2.5 Bank Draft:

Bank draft is the most important type of remittance. Draft is an instrument issued by a
bank. Draft is issued by one branch to another branch out of the city. The difference
branches of same bank can issue the bank draft to each other and it is also called the

50
banker cheques i.e. the main branch of ACB in Islamabad issued the draft to the
ACBL Daska.

5.2.6 Letters of Credit

ACBL is committed to offering its business customers the widest range of options in
the area of money transfer. If you are a commercial enterprise then our letter of
Credit service is just what you are looking for. With competitive rates, security, and
ease of transaction, ACBL Letters of Credit are the best way to do your business
transactions.

5.2.7 ATM:
Automated Teller Machine is a hi-teq. Invention in the field of the banking, it
facilitate that a depositor can withdraw money at any time without the need of
banking personnel. We can also deposit money with the help of this machine. But it is
not so much practiced here because of sonic drawbacks. In these terms and
conditions, "Cardholder" means the individual to whom the ATM Card is issued,
"Bank" means Askari Commercial Bank Limited and "Bank Account” means the
account of the Cardholder maintained with the Bank.

1. The issue of ATM card (ASKCARD) entitles the Cardholder to avail the facilities
of the Bank's Automated Teller Machines (ATMs) also referred to as machines.

2. It is a condition of issue and use of the Card that the Cardholder maintains a
Current or PLS-SB Account with the Bank at one of its branches in Pakistan.
In the event of the stopped for any reason, whatsoever the Card shall immediately
be returned to the Bank by the cardholder and its validity shall cease to have any
effect on the date of such closure of A\C henceforth.

3. The card shall remain the property of the Bank at all times. The bank may, at its
sole discretion and without prior notice, cancel or refuse to re-issue or renew the card
or suspend its use for the time being and call for its return at any time, in which
case the Cardholder shall immediately return the Card to the Bank.

4. The cardholder shall be responsible for the payment of any taxes, duties,
levies, which may be attracted, to payments related to the issuance and use of
the card by the cardholder.

51
5. The cardholder undertakes not to disclose his/her Personal Identification Number
(PIN) to any other person. In the event of the PIN becoming known to someone
other than the cardholder, that person may be treated by the Bank as an acting
agent of the cardholder. The Cardholder indemnifies the bank against all losses or
damages which may occur as a result of the PIN becoming known to anyone else
from any source whatsoever.

6. The bank shall not be responsible for any loss or damage arising directly or
indirectly from any malfunction of the Card or ATM or any technical or non-technical
defect or breakdown of the machine and/or any part thereof or the temporary non-
availability of case in such machines.

7. Except as otherwise prescribed by law, ACBL shall have no responsibility or

liability for any act or omission or inability to perform any of its obligations
hereunder which results from any cause beyond ACBL's control.

8. The Cardholder agrees to accept that any cash or instrument(s)delivered

through ATM with the use of Card shall be, for the all the purposes, at the
entire risk and sole responsibility of the Cardholder. The bank would hence be
assuming no responsibility whatsoever in this behalf. The Cardholder understands and
accepts that the crediting of account, as specified on the frontal side of the envelope,
designed for the purpose, will be subject to:

I. In the case of Cash Delivery: Upon physical checking and verification of the
currency note(s) that would be found contained in the envelope, and confirmation
of the correctness of the particulars mentioned on envelope.

II. In the case of Delivering the Instrument(s): Upon checking and confirmation
of the correctness of the particulars of instrument(s) that would be found contained
in the envelope and after its clearance and/or realization of its proceeds through
lodgments in collection as per procedure.

III. The physical checking and verification of cash so delivered shall be carried
out by the Bank through its two officials, whose count, checking and findings will be
accepted by the Cardholder as correct and final. The Cardholder also expressly
waives its rights to, in any way, question or challenge the same.

52
IV. The amount stated on the ATM screen or on the printed transaction
record/slip shall not for any purpose whatsoever be takes as conclusive of the status of
the Cardholder's account with the bank.

V. The Cardholder further undertakes to accept full responsibility for all

transactions made by the use of the Card whether or not made with his/her
knowledge/authority or consent and he/she shall accept the Bank's record of
transactions as binding for all purposes.

VI. The Cardholder shall take every possible due and proper care to prevent the
Card from being lost, mislaid or stolen and shall not pass the Card to any other
person. He shall notify the Bank immediately if the Card is lost, mislaid or stolen or if
it comes into the hands of a third party.

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 CHAPTER#06

ASKARI ONLINE BANKING SYSTEM

6.1 BACKGROUND
The growth in use of the Internet worldwide and the development of procedures
enabling secure transactions On-Line have created the new field of On-Line banking,
where customers deal with their banks chiefly or entirely through Internet
connections. Such services are not restricted by opening hours or location of branches,
unlike the traditional banks. Both existing banks and new groups are already moving
into this potentially very important area. Since On-Line banking services can be
accessed with equal ease almost anywhere in the developed world, this raises the
possibility of banking networks operating without regard to national boundaries, with
consequent regulatory problems. Banking on line, commonly called PC banking,
electronic banking or Internet banking, has been around in one form or another for a
decade or more.

"This is one of the fastest-growing developments I've seen in banking in 35 years,"

said James M. Shelton, a former banker who now is executive director of the On-Line
Banking Association. “Bank branches, automated teller machines, credit cards, checks
and good old-fashioned cash aren't going away. At least not anytime soon”.

6.2 FORMS OF ONLINE BANKING

On-Line Banking can take different forms. Some On-Line banking systems are
software based - meaning you will need software such as Quicken or Microsoft
Money in order to access your account (and you will only be able to handle your
banking from your own computer). Other systems are Internet based - meaning you
can access your bank account from any computer that is connected to the Web from
your home, office or while travelling.

6.3 INTERNET BASED BANKING

There are banks which are truly Internet based and 100% available On-Line, in other
words, those banks without a "PHYSICAL PRESENCE" of offices and branches.
These banks also offer Internet-based banking, which can be accessed by any Internet
computer, without the need of special software. Since these On-Line banks have a
54
lower business cost (they do not have to build, support and maintain expensive
branches) their fees are generally lower and their interest rates (on your deposits) are
generally higher than "traditional" banks.

WHY ONLINE BANKING?

Unfortunately, banking is a "necessary evil" that can take a large chunk out of already
busy schedules. Visiting a branch or ATM, paying bills by paper check (and mailing
them) and balancing a chequebook all can be time consuming. Banking On-Line, by
its nature, can automate many of these processes, saving you time and, in many cases,
money. You can access your account and do your banking when (and where) it is
convenient for you.

If someone decides to do banking On-Line, the group can give lots of hints on getting
the most out of the experience of the others who are practicing this concept of
banking. If you are not sure about banking On-Line yet, we can point out some of the
advantages and let you know of some potential disadvantages, so you can compare.

6.4 ADVANTAGES OF ONLINE BANKING

In general, you will find lower fees and higher interest rates for deposits due to the
reduced cost of operating On-Line and not needing numerous physical bank
branches.

You will have easy access to account information and transactions, because any
Internet-enabled computer can become your "bank terminal."

You will generally have up-to-the-minute current bank account information due to the
automation of most systems.

In many cases, On-Line banks offer free bill pay, which can be a big savings in both
money and time.

You can transfer funds electronically between accounts.

6.5 ONLINE BANKING IN PAKISTAN

55
In Pakistan On-Line Banking is not yet being practiced at its full capacity. The State
Bank of Pakistan (SBP) has not authorized On-Line payments and receipts due to
absence of safe and secure Internet browsers and sites. As Internet Culture has not
been established in Pakistan, the Internet in Pakistan is very insecure. The credit card
numbers and banks pin codes can easily be hacked so do to this reason only limited
On-Line banking is allowed by the SBP and it is being practiced. Askari Commercial
Bank has taken the lead in On-Line banking in Pakistan. Its service is available for
customers all around the country. Bank Alfalah also provides On-Line banking
facility but only for its Karachi branch and others like Sonairi Bank, ABN Amro is
also venturing in the field.

6.6 ASKARI ONLINE BANKING SERVICES

Information technology plays a decisive role in banking industry for
competitive edge, so Askari commercial bank also strive to become the
symbol of excellence by providing innovative customer services through the
use of art of technology. All branches of Askari commercial bank are well
equipped to provide innovative and high sophisticated Technology-based products
and services.

In 1998, the Bahawalpur branch started its online

t r a n s a c t i o n . O n l i n e transaction is actually transfer transaction. The customer
finds it easy to precede their t r a n s a c t i o n s i t t i n g a t o n e c o r n e r o f c o u n t r y
to other corner. The customer can shift their transaction, the
c u s t o m e r c a n s h i f t t h e i r a m o u n t f r o m o n e b r a n c h o f b a n k t o another,
their cheques can be enchased, and they can make deposit and can draw the
money also through online banking availing quick and speedy service for
his urgent requirement.

When a customer wants to transfer his funds through online then he fills
the pay in slip and amount and online transaction charges deposit to cash
receipt counter. Then bank officer transfer there his funds through online to any
other branch.

Following are the charges of online transactions.

56
Up to RS 25,000 RS.50
From 25,000 to 200,000 RS.100
From 200,000 to 500,000 RS.250
From 500,000 to 2,000,000 RS.500
Over RS 2,000,000 RS.750

6.7 INTERNET BANKING

Askari commercial bank always provides most modern service
s t o i t s customers. Askari Commercial bank is the first bank in
P a k i s t a n t h a t p r o v i d e s t h e means of remotely accessing valuable banking
services through Internet. To provide i n f o r m a t i o n a b o u t t h e s t r u c t u r e o f
bank, its network, about its product & services, about the bank
performance, ACBL design an innovative website for its inspiring
relationship on Internet.

ACBL website address:

www.askaribank.com.pk

Initially customer can enjoy the non-financial banking services but now
bank assigns a secure ID and password to its customer. Now customer
enters their ID and password and has access of his account. The customer
can check his account balance. He can print his account statement. He can
transfer funds from one of his account to another account.

All the branches of ACBL are connected through Internet. And customer
can mail to any branch about his inquires and problems. ACBL will
response to customer problems and inquires through Internet. All the above
facilities are provided in other banks by traditional means, but Askari
commercial bank is providing all the modern facility in most modern
technological means.

IMPORTANT FEATURES:

Important • Payment of Utility Bills

57
Features: • Payment of Mobile Payments.
• Purchase of Mobile Air Time.
• Account Statements
• Payments' Details
• Online registration.
• Fund transfer to any account within Askari
Bank
• Inter-bank fund transfer ( IBFT)
• Askari Master Card details
• Askari Master Card bill payment
• Email alerts
• Account Balance Enquiry
• Schedule Transaction
•History of Financial Transactions
• Enhanced security
• SMS alerts

6.8 CREDIT CARD

Another valuable financial service provided by the A Commercial bank is credit card.
It is like a credit and is issued to facilitate the small financial needs of the customer
like shopping of goods or any other short-term financing need. It is not concerned
with the operation of account and even with zero balance; the customer can use the
credit card. Askari bank has credit card division in Karachi.

Three types of credit cards are issued:

♦Silver Card

♦Gold Card

♦Local Card

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◊Silver card has the limit of 200,000.

◊Gold card has the limit up to 500,000.

◊Local card has limit up to 200,000.

Local card is used in Pakistan while Silver and Gold card can
b e u s e d internationally as well as for Internet shopping. Credit card
l i m i t i s b a s e d o n t h e evaluation of customer credit history, income and ability to
pay.

♦I f t h e a c c o u n t h o l d e r i s a r m y f o r c e p e r s o n n e l t h e n h e s h o u l d a t t a c h
copy
of salary certificate, ID card, account statement and 3photographs w
i t h t h e application form. In case of non-payment his salary is blocked.

♦I f a c c o u n t h o l d e r i s G o v t . o f f i c e r o f g r a d e 1 7 o r a b o v e t h e n h e w i l l
a t t a c h account statement and 3 photographs with application.

♦If account holder has job in private sector but has salary Rs.15, 000 or greater t h e n
he can also avail the credit card facility and submit the same above
mention documents. In case of entrepreneur, he will attach the copy of balance sheet
and profit & loss account with the application.

♦If a person is not account holder then he will show the account statement of last 6
months maintained in other bank. All the account holders are required to maintain
a healthy account at least for 6 months then they can enjoy the facility of credit card.
Minimum payment of 5% is to be deposited. Credit card is a form of unsecured loan
so high interest rate is charged. The credit card limit is not debited to customer
existing account but a separate loan account is opened. When credit card is issued
then this loan account will be debit and sundry
credit adjustment account will be credit. When the
c u s t o m e r m a k e s payment then sundry account will be debit and credit-to-credit
card division.

59
It’s the advantage for a person if he makes payment at Avari tower Karachi,
Avari Lahore, Avari Dubai & Beach Luxury Hotel Karachi by the Askari master
credit card. Then he will enjoy the following discounts.

Room rake rate 40% discount

Food & bevereges 15% discount

6.9 ASKCARD
It is an innovative step in the evolution of today's plastic money. It gives
you the freedom to access your savings, current or ASDA Account at
merchant locations and ATMS. W h e n e v e r y o u m a k e p a y m e n t s , t h e
amount will be instantly debited to your account. ASKCARD
c o m b i n e s t h e k e y e l e m e n t s o f A T M C a r d s , Credit Cards and Cheques
besides giving instant access to cash and acceptance.

How do you get your askcard?

If you already have an account with Askari Bank, you simply have to
submit an application form in the concerned branch. If you are not
maintaining an account, you will have to open an account first and request for
ASKCARD to be issued to you.

Benefits of Askcard

Free from carrying cash or Cheque books.

Easier to obtain than Credit Cards.

You do not have to carry cash or travelers cheque while

t r a v e l i n g with in the country.

More readily acceptable than Cheques.

No monthly installments.

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No interest / markup payments.

No spending limit.

Guides to Use Ask Card

Insert your ASKCARD into the ATM.

Enter your PIN.

Select "Account Statement".

Select the account (saving/ current).

Collect your mini statement which will display your last ten transactions.

press “yes” for next transaction or “no” for return of your “ASKCARD.

6.10 FUNCTIONS OF ASK CARD

1. for Cash Withdrawals

Insert your ASKCARD into the ATM

Enter your PIN.

Select "Cash Withdrawal".

S e l e c t t h e a c c o u n t ( S a v i n g / C u r r e n t ) y o u w i s h t o t r a n s a c t , if you have
more than one account.

Enter amount and press "yes"

Collect your ASKCARD and receipt

2. for Balance Inquiry

Insert your ASKCARD into the ATM.

Enter your PIN.

Select option for Balance Inquiry.

61
Select the account (saving/ current) you wish to transact if you have more than one
account.

Your Balance will appear on the screen.

For receipt press "Yes".

3. for Pin Change

Insert your ASKCARD into the ATM.

Enter your PIN.

Select "PIN CHANGE"

Enter new PIN.

Re-enter new PIN to confirm

4. FOR DEPOSIT

Insert your ASKCARD into the ATM.

Enter your PIN.

Select the deposit option.

Select to which account (saving/ current) you want to deposit

Select mode of payment (Cash/Cheque)

Enter the amount to be deposited and press yes.

Take the envelope from the envelope dispenser and seal it.

Collect the deposit receipt from the ATM.

Place your cash/cheque and the deposit receipt into the

envelope

Insert the envelope into the depository slot

62
Press "Yes" for next transaction or "No" for return of
y o u r "ASKCARD".

5. For Transfer From One Account To Other Account

Insert your ASKCARD into the ATM and then perform

following functions.

Enter your PIN.

Select fund transfer option.

S e l e c t t h e a c c o u n t ( s a v i n g / c u r r e n t ) y o u w i s h t o t r a n s a c t , i f you have
more than one account.

Enter the account no, to which funds should be transferred and press enter to
"proceed".

Enter the amount and press "Yes"

Press "Yes" for next transaction or "No" for return of

y o u r "ASKCARD".

6. for Bill Payment

Insert your ASKCARD into the ATM.

Enter your PIN.

Select Utility Bills Payment

Select the account (saving/ current) you wish to transact if you have more than one
account.

S e l e c t t h e t y p e o f y o u r u t i l i t y b i l l ( T e l e p h o n e / E l e c t r i c i t y / Gas) from
the second Main Menu screen.

Select any one of the linked utility bill ID(s) or "new bill ID.

63
 CHAPTER#07

BANK POLICIES AND ISLAMIC BANKING

Askari bank policies

An Askari bank has following policies which are adopted by the banks and its clients.

These are:

MANAGERIAL POLICIES

FINANCIAL POLICIES

PROCUREMENT POLICIES

MARKETING POLICIES

PROMOTIONAL POLICIES

LENDING POLICIES

PERSONAL POLICIES

7.1 FINANCIAL POLICIES

The financial policies of any bank are the most important policies through
which the whole banking activity is conducted. These policies are primarily
conducted on two ways

 Source of funds
 Use of funds

SOURCE OF FUNDS

The bank finance policy is acquiring funds from the following sources:

1. Deposits of account holders.

 Interest on advances and loans granted to the borrowers.
 Income and commission from the services provided by the bank.

64
  Bank opens various types of accounts for its customers Services are provided
for earning.
 Interest income and commission bank providing the services to its customer.

2. USE OF FUNDS

After the acquisition of the funds their acquisition becomes necessary. The bank seeks
the best way for making investment to get more profit with the maximum security.
The bank has an investment portfolio in which it allocate its funds for crediting to
borrowers, investment in the stock market, investment in the real estate property etc.
for the allocation of funds a bank has to follow some banking policies and the
prudential regulations of SBP these are:

 A bank has to maintain liquidity with state bank of Pakistan, i.e. 25 %of its
total deposits.
 A bank cannot invest all of its funds otherwise it will be difficult to meet
urgent needs.
 A substantial part of funds is received from interest on loans
a n d a d v a n c e s . B e f o r e granting a loan the bank analyzes and observes the
borrower and conduct a complete ratio analysis. Bank prepares credit line for
this purpose the major thing is granting an advance is the security offered by
the borrower and its actual market value.

7.2 PROCUREMENT POLICIES

Procurement policies are more concerned with manufacturing
o r g a n i z a t i o n . I n b a n k industry that is service industry procurement means the
procurement of funds from various sources such as deposits. It involves
attracting and holding the funds of the depositors. After the acquisition of
funds, the bank invest the acquire funds. One alternative is to lend its money and
earned interest markup or invest in govt. securities etc. as already mentioned in the
above paragraph the major sources of funds for a bank are the deposit of the general
and the other sources of income includes interest or markup charges
received for various services offered by the bank to its clients. A bank tries to
attract maximum no. Of accounts so that it can increase it’s deposits and these lending

65
ability. In order to get maximum no. of accounts the staff of the bank must be
efficient as compared to the other banks and the manager of the branch must
take personal interest in attracting deposits. Good quality of the service is the key to
success.

7.3 MARKETING POLICIES

Marketing policies are also one of the most important policies because they are
related to the growth of the organization. Marketing for a bank would mean:

1. Creation of new product and services.

2. The bank marketing must be consumer oriented.

Following are the marketing policies of the ACBL.

a. Keeping the track of latest development in the world and incorporating

the latest and most modern equipment to make the banking procedures simple and
easy for the customers.

b. Development of products for the customers.

c. Giving good services and maintaining good relations with the customers.

These policies can be implemented by providing the right product and

service to the customer at the right place, at the right time, at the right price. It is
necessary for the managers to keep in touch with consumers, observe their needs and
develop products, which meet their needs.

7.4 PROMOTIONAL POLICIES

Public relation and advertising has assumed a great importance in the
modern banking business. As for as promotional activities are concerned, the main
objective of the bank is to inform the existing clients and other people about
its new products or change in the existing services. ACBL establishes its purpose
through:

1. Direct contact with customers.

2. Relation with business organizations.

66
3. Community relations.

7.5 LENDING POLICIES

Every bank has its own lending policies except for those, which are
common for all the banks, i.e. the policies, which are imposed on all the
commercial banks by the SBP, are known as prudential regulations. The lending
policies of ACBL are as follows:

1. The bank only invests in those sound and viable projects, which have
good rate of return.

2. Bank prefers to advance loan to their account holders.

3. Loan is given to reliable person only.

4. No political loan is sanctioned by bank.

5. Any account holder can apply for running finance or demand finance. The
manger appraises the past record of account holder and his credit worthiness. If he
finds anything wrong he can refuse to sanction the amount.

6. The bank while taking security prefers govt. Securities to shares.

7. It also advances working capital loans.

7.6PERSONAL POLICY
Personal policies have an important role in the success of any organization.
ACBL have its proper personal policies. Good personal policies motivate the
employees towards hardworking.

Following are the main personal policies of ACBL:

1. Selection of employees on merit

2. Selection of capable employees.

67
3. Attractive salary package for motivation of employees.

4. To train and develop the future management of the bank.

5. Every employee must have certain set of clearly defined duties

6. Effective communication at all levels of the organization.

7.7 ISLAMIC BANKING

Askari Bank Limited opened its doors for Shariah compliant banking solutions in the
year 2006 by establishing a dedicated Islamic Banking Services Division (IBSD). In a
short period of time, Askari Islamic has grown considerably, and now provides a
comprehensive range of products and services in personal banking, corporate banking,
Islamic treasury, trade services and Banca-Takaful solutions. AKB objective is to put
in place an efficient banking system that is supportive to economic justice and welfare
of society in line with the Shariah principles.

Customers enjoy the freedom to choose from a wide array of deposit product menu,
which offer; flexible term deposit schemes, current accounts and savings accounts. On
the consumer banking front, Askari Ijarah allows the customers to drive a car of their
choice, while the Askari Home Musharakah allows the customers to own a home.

7.8SHARIAH ADVISOR
An eminent scholar and recipient of the president’ medal for president of performan
ce for the year 2004, Professor Dr. Muhammad Tahir Mansoori, has been
appointed as the Shariah advisor askari bank. Dr.tahir mansoori is presently chairman
of Islamic law department at the Islamic research institute of the
international university, Islamabad. He has taught and written on Fiqh and usool-e-
Fiqh matters for over two decades. He has also responded to a large number of queries
issued religious rulings I-e Fatwa’s on various matters pertaining to Islamic law,
especially in the field of commercial law.

7.9DEPOSITS PRODUCTS
Askari Islamic Banking constantly and consistently strives to develop new Islamic
Banking Deposit Products to cater to ever growing needs of its customers.

Askari nowshera branch offers following deposit menu cards:

68
Pak rupee chequing accounts

It includes:

 Askari halal and savings and notice account (AHSAN)

 Askari halal and saving account(AHS)
 Ahsan munafa account
 Ahsan pensioners
 Ask sona Islamic plus account
 Ask sona Islamic current account
 Ahsan masrafi account

Foreign currency cheque

 Askari halal us dollar saving account

Askari halal investment accounts (AHIA)-non cheqing accounts

 Askari Islamic investment certificate

 Askari khas Islamic deposit account
 Ahsan masrafi certificate of Islamic investment

Askari Islamic Consumer Products:

 Askari Ijarah Bis Sayarah for new / used car financing &
 Askari Home Musharakah to buy, build and renovate home.

For detailed information about our consumer products, please visit the nearest Islamic
Banking Branch

Islamic Corporate & Structured Finance:

We are also offering tailor made Islamic Corporate & Structured Finance solutions to
our corporate clients to meet their financial needs. Our products are very competitive,
professionally serviced and in accordance with principles of Shariah.

69
All Islamic Banking Products are approved by the Shariah Advisor of the Bank. As
per Shariah requirements, funds and products of Islamic Banking are managed
separately from the Conventional banking side. All funds obtained, invested and
shared in Halal Modes & Investments, under the supervision of Shariah Advisor.

7.10 ASKARI HOME MUSHARAKAH

Joint ownership is created in the property between Bank & Customer on the basis of
the Musharakah Agreement. (This is bases on the principles of Shirkat ul Milk).

Bank’s share is divided into units and is given to the client on rent.

 Client promises to purchase Bank’s share (units) over the tenure of

transaction.
 Client purchases the units every month and will eventually become the owner
of the property.
 Rental amount will be adjusted according to the bank’s share (units) remaining
in the property.
 Askari Home Musharakah has tailor made solutions to meet your needs.

Askari Islamic Banking offers a convenient and easy way to buy your own home,
with a financing of 85% of the property cost, upto Rs. 50 Million.
You can simply build your home as you desire, with halal Istisna’/Musharakah
Finance from Askari Islamic Banking, specifically tailored to match your cash flows
and needs.

If you want to renovate your home, let Askari Islamic Banking facilitate you in
making you home look even better. Just switch your existing interest based mortgage
to Askari Islamic Banking by getting advantage of our Askari Home Musharakah
Transfer Facility, with peace of mind of having halal transaction.

BENEFIT

 Shariah compliant.
 Prompt processing.

70
  Competitive rentals.
 Clubbing-of family income.
 Maximum financing limit: Up to Rs. 50 million.
 Financing tenure: 3 to 20 years.
 Documentation/ legal/ valuation/ income estimation charges at actual.

ELIGIBILITY

 A Pakistani National.
 Earning at least two times more than your monthly Car Ijarah rentals.
 Between 21 to 65 years.
 A permanent employment with atleast six months of service with present
employer.
 A self employed individual with atleast 3 years of business track record.
 Income verification / documents required.

DOCUMENTS REQUIRED

PERSONAL INFORMATION

 Copy of CNIC.
 Two Passport size colored photographs of applicant.
 Copy of rental documents (if applicable).
 Copy of last paid utility bills (Electricity/ Gas/ Telephone).
 Bank statement last 6 months.

INCOME INFORMATION

 Original or certified copy of recent pay slip.

 Employer’s certificate including date of joining/current designation/salary.
 Bank statement of business-last one year.
 Copy of management accounts (if applicable).

BUSINESS INFORMATION

 Years proof of business (e.g. tax return / bank certificate).

 Partnership deed (in case of partnership).

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  Professional association membership certificate / practice license.

STEP BY STEP GUIDE

Step 1: Application form & processing fee payment.

Step 2: Submission of required documents.

Step 3: Address verification & income estimation.

Step 4: Legal opinion, property valuation.

Step 5: Facility approval.

Step 6: Signing of Askari Home Musharakah agreement.

Step 7: Transfer of property & disbursement.

7.11 ASKARI IJARAH BIS SAYYARAH(ASKARI CAR

FINANCING)
Ijarah is a rental agreement, under which the usufructs of assets is transferred to the
client on pre-agreed terms and conditions. It is shariah ccomplaint mode of finance,
adapted by askari Islamic banking to meet the car financing needs of its valued
customers. We are Shariah Compliant and market competitive. Askari Islamic
Banking deals in all kinds of new, locally assembled, as well as imported vehicles.
Terms and conditions we offer are most flexible, with prompt processing time.
Moreover, in order to enhance customers’ convenience, we offer family income
evaluation plan, where our valued clients can also avail Ijarah Bis Sayyarah facility
for more than one vehicle. In Ijarah, nominal additional charges are taken by the Bank
due to any delay in rental installment(s) by the customer, which are used for “charity”
purposes, rather than going into the income of the Bank, as it is done in the case of
conventional lease. This concept of charging “penalty” is approved by the
contemporary Shariah Scholars to allow the Banks to safeguard themselves against
the “habitual defaulters”.

As Ijarah, by definition, is “rental paid for the usufruct of an asset” hence, rental
payment always starts with delivery of the vehicle to the user, unlike conventional
lease, where lease installments start right after the payment to the vendor by the
lessor.

72
In Ijarah, nominal additional charges are taken by the Bank due to any delay in rental
installment(s) by the customer, which are used for “charity” purposes, rather than
going into the income of the Bank, as it is done in the case of conventional lease. This
concept of charging “penalty” is approved by the contemporary Shariah Scholars to
allow the Banks to safeguard themselves against the “habitual defaulters”. It is a
requirement of the State Bank of Pakistan for auto finance / leasing institutions to
insure the leased vehicle(s). Hence, we are bound to charge Takaful/ Insurance, which
is within the rental installments, throughout the Ijarah period.

If the vehicle is stolen or destroyed in any mishap, unlike conventional lease, Ijarah
rentals will not be charged, and security is refundable in this case. However, this is
subject to there being no misconduct, or negligence, on part of the client.

Once the client successfully repays the whole Ijarah rental, Bank gives him / her the
opinion to become the owner of the vehicle, against the security already.

FEATURES

 Prompt Processing Time.

 Facility to acquire more than One Vehicle.
 Facility Income Evaluation Plan.
 Low Security Deposit.
 Competitive Profit Rates.

ELIGIBILITY

 A Pakistani National.
 Earning at least two time more than your monthly Car Ijarah rentals.
 Between 21 to 60 years, (for salaried class), and of age, till the maturity of the
lease period.
 Employment experience of minimum six months in a permanent capacity in
the current organization.
 Being in business for at least on year.

DOCUMENTS REQUIRED

FOR BUSINESS PERSON

73
  Copy of CNIC.
 Two recent passport sizes colored photographs.
 Last six months Bank statement(s).
 Residential utility bills (as a proof of residence).
 Business proof required.
 Copy of valid driving license (optional).
 Two references.
 Bank’s Signature Verification form.

FOR SALARIED PERSON

 Copy of CNIC.
 Two recent passport sizes colored photographs.
 Last six months Bank statement(s).
 Recent salary slip.
 Employment certificate.
 Residential utility bills (as a proof of residence).
 Copy of valid driving license (optional).
 Two references.
 Bank’s Signature Verification form.

FOR SELF EMPLOYED

 Copy of CNIC.
 Two recent passport sizes colored photographs.
 Last six months Bank statement(s).
 Copy of professional degree/certificate.
 Residential utility bills (as a proof of residence).
 Copy of valid driving license (optional).
 Two references.
 Bank’s Signature Verification form.

ASKARI ISLAMIC INVESTMENT CERTIFICATES

74
UNIQUE FEATURES

One year maturity with monthly profit payment

Profit rate announced on monthly basis

Funds Invested in Halal modes under supervision of banks Shariah Advisor

Roll over option available upon maturity

Premature withdrawal option available

FREE VALUE ADDED SERVICES

Issuance of Visa Debit / ATM Card (for individual account only)

I-Net Banking Facility (for individual account only)

SMS Alerts for Cash withdrawal through ATM and I-Net Banking Transactions (for
individual account only)

 Online Funds Transfer

 Issuance of Cheque Book
 Local Remittances (PO / DD / TT)
 Same Day Clearing
 Inter-City Clearing
 Outward Cheque Returned Un-paid in Clearing
 Duplicate Account Statement

75
 CHAPTER#08

FINANCIAL STATEMENT ANALYSIS

8.1 INTRODUCTION
The importance of financial statement analysis lies in their utility to satisfy the question in the mind of
stakeholders. Different classes of people are interested in the financial statements with a view to
assessing the economic and financial position of any business or industrial concern in term of
profitability, liquidity or solvency etc.

Financial statements among other things include balance sheet and income statement. Balance sheet
presents assets and liabilities of the business at a given date. Besides showing the ability of the
business to service the loans on the strength of its financial structure and its profitability, helps in
judging the impact of financial and fiscal support.

8.2 PURPOSE OF FINANCIAL ANALYSIS

The analysis of Financial Statements (FS) is to examine past and current financial data so the
company’s performance and financial position can be evaluated and future risk and potentials
can be estimated. The analysis can yield valuable information about trends and Relationship, the
quality of a company’s earnings, and its financial strengths and Weaknesses.

8.3ANALYSIS
The financial data of ABL is analyzed in the following two ways:

 Common Size Analysis

 Ratio Analysis
Common size analysis and ratio analysis are techniques that can be used to identify trends in
financial statement; common size analysis is also useful in comparative analysis, and some
source of industry data.

76
8.4 COMMON SIZE ANALYSIS
Technique for identifying relationship between items in the same financial statement by expressing all
amounts as the percentage of the total amount taken as 100.For common size analysis two basic
techniques are used.

1) Common Size Vertical Analysis

Comparison with base amount with in the same year

a. Vertical Analysis of Balance Sheet.

b. Vertical Analysis of Income Statement

2) Common Size Trend Analysis

Comparison with Base year

a. Trend Analysis of Balance Sheet

b. Trend Analysis of Income Statements

Trend analysis of balance sheet

Balance sheet formula

ASSETS=LIABILITIES + OWNER EQUITIES

Rs in millions

2014 2015 2016

Assets
Advances-net 170496 199931 235164
investments 217214 268021 295846
Cash, short term 8299 9230 11020
funds and
statutory
deposits
Operating fixed 8299 9230 11020

77
assets
Assets held for 54 - 262
sale
Other assets 21392 19891 21597
Total assets 447083 535867 619139
Non-performing 21376 31484 28535
loans
Provisions for 28169 28482 2659
non-performing
taxes
Liabilities
Deposits 387587 433172 472811
Definance 7954 10327 12891
borrowing from
sbp
Sub oriented 7993 4997 4995
loans
Other liabilities 19841 60518 95866
Total liabilities 423375 509014 586562
Owner
equities
Share capital 12603 12603 12603
Reserves 6686 9209 12755
Surplus on 4418 5041 7219
revaluation of
assets
Total 23707 26853 32577
shareholders
fund

78
HORIZONTAL ANALYSIS OF BALANCE SHEET

Formula: current year/base year*100

2016/2015 2015/2014
Assets
Cash & balances with 43% 55%
treasury banks
Balances with other banks -30% 17%
Lending to financial 741% -76%
institutions
Investments 10% 23%
Advances 18% 17%
Operating fixed assets 19% 11%
Assets held for sale 0% 0%
Deferred tax assets 0% -100%
Other assets 9% -3%
16% 20%
Liabilities
Bills payable 41% -11%
Borrowings 56% 317%
Deposits & other accounts 9% 12%
Sub ordinate loans 0% -37%
Deffered tax liabilities 446% 0%
Other liabilities 42% 2%
15% 20%
Net assets 21% 13%
Owner equities
Share capital 0% 0%
Reserves 35% 34%
Unaprropriate profit/loss 48% 48%
16% 13%

79
Surplus on revaluation of 43% 14%
assets-net of tax
21% 13%

25%

20%

15%

2016/2015
10% 2015/2014

5%

0%
total assets total liabilities net assets represented by
reserves

VERTICAL ANALYSIS OF BALANCE SHEET

Formula: current year/total assets*100

2016 2015 2014

ASSETS
Cash & balances with 7% 6% 4%
treasury banks 1% 2% 2%
Balances with other 1% 0% 1%
banks
Lending to financial 48% 50% 49%
institutions
Investments 38% 37% 38%
Advances 2% 2% 2%
Operating fixed assets

80
Assets held for sale 0% 0% 0%
Deferred tax assets 3% 4% 5%
Total assets 100% 100% 100%

Liabilities
Bills payable 1% 1% 2%
Borrowings 14% 11% 3%
Deposits & other 76% 81% 87%
accounts
Sub ordinate loans 1% 1% 2%
Deferred tax liabilities 0% 0% 0%
Other liabilities 2% 1% 2%
95% 95% 95%
Net assets 5% 5% 5%
Owner equities
Share capital 2% 2% 3%
Reserves 1% 1% 1%
Unaprropriate 1% 1% 0%
profit/loss
4% 4% 4%
Surplus on 1% 1% 1%
revaluation of assets-
net of tax
5% 5% 5%

81
 120%

100%

80%

2016
60%
2015
2014
40%

20%

0%
totol assets total liabilites net assets owner equities

INCOME STATEMENT (3 YEARS)

A financial statement that measures a company’s financial performance over a specific accounting
period. Financial performance is assessed by giving a summary of how the business incurs its
revenues and expenses through both operating and non-operating activities. It also shows the net
profit or loss incurred over a specific accounting period, typically over a fiscal quarter or year.

Also known as “profit/loss statement” OR “statement of revenues and expenses”.

Rs in millions

note 2016 2015

Mark- up/return/interest 25 35512309 36592093
earned
Mark-up return/interest 26 20496757 21690386
expenditure
Net markup/interest income 15015552 14,901,707
Provision/(reversal)against
non-performing loans
Advances-net 10.4 729441 315840

82
Impairment loss/on 22565 217243
available for sale
investments
Provision in diminution in 9.2.1 48052 345969
the value of investment
Bad debts/written off - - -
directly
658824 879052
Net markup interest income 15,674,376 14,022,655
after provision
Non mark–up/interest
income
Fee, commission and 2,155,856 1,732,140
brokerage income
Dividend income 304,850 302,721
Income from dealing in 639,827 834,956
foreign currencies
Gain on sale of investments 27 3,526,687 3,246,294
– ne
Un realized gain on
revaluation of investments
Classified as held for - -
trading – net
Other income 28 3,526,687 3,246,294
Total non–markup / interest 7,106,359 6,689,588
income

Non mark–up/interest
expenses
Administrative expenses 29 14,078,992 12,014,237
Other provision/write offs 3,260 49,671
Other charges 30 221,535 216,639
Total non–markup / interest 14,303,787 12,280,547

83
expenses
Extraordinary unusual 8,476,948 8,431,696
items
Profit before taxation 8,476,948 8,431,696
Taxation – current 2,129,263 2,329,796
Prior years’ 266,425 266,425
Deferred 860,625 642,481
31 3,256,313 3,388,277
Profit after taxation 5,220,635 5,043,419
Unappropriated profit 2,763,314 1,862,223
brought forward
Profit available for 7,983,949 6,905,642
appropriation
Basic / diluted earnings per 32 4.14 4.00
share – Rupees

HORIZONTAL ANALYSIS OF NET INCOME

2016 vs 2015 2015 vs 2014
Mark- up/return/interest earned -3 6%
Mark-up return/interest -6 -4%
expenditure
Net markup/interest income 1 25%
Provision/(reversal)against non- 331 480%
performing loans
Advances-net -90 5%
Impairment loss/on available for -86% 75%
sale investments
Provision in diminution in the 0% 0%
value of investment
Bad debts/written off directly 0% 0%
175% 173%
Net markup interest income after 12% 21%

84
provision
Non mark–up/interest income

Fee, commission and brokerage 24% 21%

income
Dividend income 1% -13%
Income from dealing in foreign -23% -15%
currencies
Gain on sale of investments – ne 9% 80%
Un realized gain on revaluation
of investments
Classified as held for trading – 0% -23%
net
Other income -16% 26%
Total non–markup / interest 6% 23%
income
10% 23%
Non mark–up/interest
expenses
Administrative expenses 17% 10%
Other provision/write offs -93% 6%
Other charges 2% 72%
Total non–markup / interest 16% 11%
expenses

Profit before taxation 1% 46%

Taxation – current -9% 130%
Prior years’ 0% 0%
Deferred 34% -15%
-4% 92%
Profit after taxation 4% 26%
Basic / diluted earnings - -
per share – Rupees

85
 100%

80%

60%

40%

20% 2016/2015
2015/2014
0%
2015/2014
-20%
p

2016/2015
ku

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VERTICAL ANALYSIS OF INCOME STATEMENT

2016 2015 2014
Mark- up/return/interest 100% 100% 100%
earned
Mark-up return/interest 58% 59% 66%
expenditure
Net markup/interest 42% 41% 34%
income
Provision/ -2% 1% 0%
(reversal)against non-
performing loans
Advances-net 0% 1% 1%
Impairment loss/on 0% 1% 1%
available for sale
investments
Provision in diminution in - - 0%

86
the value of investment
Bad debts/written off - - -
directly
- 0% -
Net markup interest -2% 2% 1%
income after provision 44% 2% 33%
Non mark–up/interest 38%
income
Fee, commission and 6% 5% 4%
brokerage income
Dividend income 1% 1% 1%
Income from dealing in 2% 2% 3%
foreign currencies
Gain on sale of 10% 9% 5%
investments – ne
Un realized gain on
revaluation of investments
Classified as held for 0% 0% 0%
trading – net
Other income 1% 2% 2%
Total non–markup / 20% 18% 15%
interest income
64% 57% 49%
Non mark–up/interest
expenses
Administrative expenses 40% 33% 32%
Other provision/write offs 0% 0% 0%
Other charges 1% 1% 0%
Total non–markup / 40% 34% 32%
interest expenses
24% 23% 17%
Profit before taxation
Taxation – current -6% -6% -3%
Prior years’ -1% -1% 0%
87
Deferred -2% -2% -2%
-9% -9% -5%
Profit after taxation 15% 14% 12%

100%
80%
60%
40%
20%
2016
0% 2014 2015
-20% 2015 2014
d

2016
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FINANCIAL RATIO ANALYSIS

Financial ratio is a ratio of two selected numerical values taken from an enterprise’s
Financial statements. There are many standard ratios that are used to try to evaluate the overall
financial condition of a company. Financial ratios may be used by managers within a firm, by current
and potential shareholders (owners) of a firm, and by a firm’s creditors. Security analysis use
financial ratios to compare strengths and weaknesses from various companies. While conducting the
analysis of Askari Bank I will use two set of ratios and will try to portray the financial health of the
bank. The following ratios will be used for analysis purpose.
 Liquidity

88
  Profitability
 Degree of in debtness

LIQUIDITY RATIOS
The ratio between the liquid assets and the liabilities of a bank or other institution.

i. Current ratios

The current ratio is a financial ratio that measures whether or not a firm has
enough resources to pay its debts over the next 12 months. It compares a
firm's current assets to its current liabilities. It is expressed as follows:

current assets
current ratios=
current liabilities

2014 2015 2016

1.001313 1.075605 1.11603

Chart Title
0.08

0.07

0.06

0.05
Series1
0.04

0.03

0.02

0.01

0
2012 2013 2014 2015 2016 2017 2018

INTERPRETATION

The current ratio for year 2014 is 1.00, this means that there is 1 rupee of liability for each 1.00
rupees of assets, then in 2015 it is same having no changes, in 2016 it then shows an increase of

89
10%.The ratio is below from that of the standard that’s why the bank should improve
this ratio further.
ii. CASH RATIOS
iii. The ratio of cash to deposits in a bank (for which minimum values are
generally set officially).
cash
cash ratios=
current liabilities

2014 2015 2016

0.074520507 0.087076949 0.113282676

cash ratios
0.12

0.1

0.08
cash ratios
0.06

0.04

0.02

0
2012 2013 2014 2015 2016 2017

INTERPRETATION

90
The cash ratio for year 2014 has decreased as compared to that of 2015 and 2016.this
shows that the bank carries less cash in 2014.in 2016 cash ratios has been increased.

III.OPERATING CASH FLOWS/CURRENT

LIABILITIES

0.16

0.14

0.12

0.1

0.08
Series1
0.06

0.04

0.02

0
1 2 3

91
INTERPRETATION

The current ratio in the year 2014 has decreased as compared to that of the year
2015.in 2015 operating cash flows are more and in 2016 its same as 2014.

2. FINANCIAL LEVERAGE /DEBT RATIOS

The use of various financial instruments or borrowed capital, such as margin, to

increase the potential return of an investment.
i. DEBT TO EQUITY RATIO
A measure of a company's financial leverage calculated by dividing its total liabilities
by stockholders equity. It indicates what proportion of equity and debt the company is
using to finance its assets.
total debt
debt ¿ equity ratio=
share holder equity
2014 2015 2016
18.64228697 18.84291482 18.95557293

total debt/total shareholders equi-

ties
19

18.9

18.8 total debt/total share-

holders equities
18.7

18.6

18.5

18.4
2,014 2,015 2,016

92
INTERPRETATION

The ratio of debt is increased in year 2016 as compare to 2015.the ratio of debt is less
in 2014.

ii. Debt to asset ratio

Total debt to total assets is a leverage ratio that defines the total amount of debt
relative to assets.

total debt
debt ¿ asset ratio=
total assets

2014 2015 2016

0.949089431 0.949604178 0.949888685

total debt/total assets

0.95

0.9498

0.9496

0.9494 total debt/total assets

0.9492

0.949

0.9488

0.9486
2014 2015 2016

INTERPRETATION

Debt ratio means how much debt bank has been taken from its total assets. The ratio has been
increased from 0.94908 to 0.094960 which means bank total debt has been increased due to which
the amount of ratio has been increased which is not favorable for the bank. The ratio increases in
2016.

93
 iii. Total Capitalization Ratio
A measurement of a company's financial leverage, calculated as the company's debt divided
by its total capital. Debt includes all short-term and long-term.

LONGTERM DEBT
LONGTERM DEBT+SHAREHOLDER’S EQUITY

2014 2015 2016

0.946645267 0.956696873 0.962405289

capitalization ratio
0.965

0.96

0.955
capitalization ratio
0.95

0.945

0.94

0.935
2,014 2,015 2,016

Net Working Capital Ratio

A measure of both a company's efficiency and its short-term financial health. The
working capital ratio is calculated as:

Net working capital=total current assets-total current liabilities

2014 2015 2016

-15,100 37,628 95,765

94
 net working capital
120,000

100,000

80,000
60,000 net working capital
40,000

20,000

0
2014 2015 2016
-20,000

-40,000

INTERPRETATION

The analysis of net working capital is in minus in 2014 and is increased in 2015 and
2016 as compare to 2014.

TOTAL ASSETS TURNOVER

The asset turnover ratio is an efficiency ratio that measures a company's ability to
generate sales from its assets by comparing net sales with average total assets.

interest earned
total asset turnover=
total assets

2014 2015 2016

18.81 21.31 25.85

1. ACTIVITY RATIOS
Ratios that measure a firm's ability to convert different accounts within its balance
sheets into cash or sales. Activity ratios are used to measure the relative efficiency of
a firm based on its use of its assets, leverage or other such balance sheet items.

95
 i. RECIEVABLES TURNOVER/ADVANCES TURNOVER
The receivable turnover ratio quantifies a company's ability to collect liabilities/debts.
It helps investors gauge the efficiency of a company's collection.

MARK UP, INTEREST EARNED

ADVANCES.

2014 2015 2016

0.026596954 0.026863085 0.02513068

receivable turn over

0.0275

0.027

0.0265

0.026 receivable turn over

0.0255

0.025

0.0245

0.024
2014 2015 2016

INTERPRETATION

The receivable turnover ratio is 0.0265 and is less as compare to 2015.in 2016
receivable ratio is less.

FIXED ASSETS TURNOVER

The fixed asset turnover ratio is the ratio of net sales to net fixed assets (also known
as property, plant, and equipment). A high ratio indicates that a business is: Doing an
effective job of generating sales with a relatively small amount of fixed assets.

96
 net earning
¿ assets turnover=
¿ assets

2014 2015 2016

0.083731495 0.076606937 0.065391036

fxed assets turnover

0.09
0.08
0.07
0.06
0.05 fxed assets turnover

0.04
0.03
0.02
0.01
0
1 2 3

INTERPRETATION

The three years of comparison shows that fixed assets of askari bank is increased as
compare to year 2015, 2016.

Return on equity

The return on equity ratio or ROE is a profitability ratio that measures the ability of a
firm to generate profits from its shareholders investments in the company. In other
words, the return on equity ratio shows how much profit each dollar of common
stockholder’s equity generates.

NET PROFIT AFTER TAX/SHAREHOLDERS EQUITY*100

2014 2015 206
97
22.35 24.55 22.14

ROE
25
24.5
24
23.5
23 ROE

22.5
22
21.5
21
20.5
2014 2015 2016

RETURN ON ASSETS

An indicator of how profitable a company is relative to its total assets.ROA gives an

idea as to how efficient management is at using its assets to generate earnings.
Calculated by dividing a company's annual earnings by its total assets, ROA is
displayed as a percentage.
NET INCOME
RETURN ON ASSETS =
TOTAL ASSETS

2014 2015 2016

0.95 1.03 0.90

98
 ROA
1.05

0.95 ROA

0.9

0.85

0.8
2014 2015 2016

GROSS PROFIT MARGIN

A company's total sales revenue minus its cost of goods sold, divided by the total
sales revenue, expressed as a percentage.
interest expense
GROSS PROFIT MARGIN =
interest earned

2014 2015 2016

0.656311409 0.592752514 0.577185177

gross profit margin

0.68
0.66
0.64
0.62
gross profit margin
0.6
0.58
0.56
0.54
0.52
2014 2015 2016

99
INTERPRETATION

Askari bank has a better gross profit in the year 2014.and is less than in year 2016. . It
shows that askari has become more effective in producing the services reasonably
above cost and charging for them.

100
 CHAPTER#09

SWOT ANALYSIS

SWOT ANALYSIS
SWOT analysis is one of the most expedient technique or tool used in the Strategic Management
process for conducting the situation analysis of an organization. The proper analysis of the firm is
given in the form of Strengths, Weaknesses, Opportunities and Threats (SWOT) the company
presently facing or can be forecasted for the future. It is a common approach to make assessments in
terms of internal and external environment of the organization, and to formulate strategies analyzing
its internal strengths and weakness, external opportunities and threats, coming up is the SWOT
analysis for the ABL:

9.1 STRENGHTS

9.1.1Computerization
The main strength of Askari Bank Limited is that all of its branches are fully computerized and
they have latest software’s available to keep the records of their customers account and
other important information up-to-date. It reduces manual work and provides good customer
services.

9.1.2Well-knitted branch network

ABL has a well-knitted and adequately equipped branch networking system that efficiently covers
both the domestic and international markets. ABL has the largest branch networking in Pakistan.

9.1.3Largest Private Bank

ABL is one of the largest private banks with deposit base of Rs.167.68 billion /- showing
constant growth over the period 1999 till day and with many online branches in major cities of
Pakistan.

101
9.1.4Competent Staff
Strength of Askari Bank Limited is that it has staff which is well qualified and capable of performing
the task because of their expertise and training in the field.

9.1.5Customer’s Feedback

Customers are allowed to give suggestions regarding banking services. If there is any complaint by
the customer the bank authorities investigates the reasons for complaint. Complaint monitoring
system is excellent at Askari Bank that shows bank values more toits customers.

9.1.6International markets
ACBL is actively participating in international markets and has recently introduced credit cards in
UAE, Bahrain and Qatar, being backed by 24 hours call center out of UAE.

9.1.7The ABL ATM Switch-Net

I.T group of ABL has been able to create the largest network for secure electronic financial
transactions in Pakistan.

9.1.8Information System
Askari Bank has also invested heavily in information technology resources, which has now allowed
bank to develop one of the most comprehensive and advanced system available. With the help of
this system Askari bank has now achieved an “online” status via real time facilities and
features available through nationwide network. With the team of highly qualified professionals,
Askari Bank is able to use its real time system resources to provide customers with comprehensive
account of their transaction on a daily basis.ABL is one of those few banks who are reaping the
benefits of electronic transaction

9.1.8.1 Leadership in ATM’s

 With over 186 ATMs and 106 online branches ABL is again an undoubted industry leader
with connectivity extended to above than twenty five cities of Pakistan
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  ABL atms not only serve 24 hours cash convenience but also improve on the counter
services and turnaround time at cash counters.

9.1.8.2Worldwide master card

The ABL ATMS Master Card has become a global service furthering the convenience to the
customers. Traveling customers can access their accounts from a large number of internationally
deployed ATMs and point of sale unit.

OTHER STRENGTHS
 Askari Bank has a massive network of 226 branches, including 31 dedicated
Islamic banking branches. This let them to serve a huge segment of customers
from almost every sort of occupation, and make more profitable relationships
with customers by satisfying their customized needs. The bank has not
retained here but is inclining at its journey of success as opening of many new
branches in remote areas as well as in serving areas, is under consideration.
 Askari bank is a subsidiary business unit of Army Welfare Trust. This is one
of the biggest strength for the bank because Army Welfare Trust has
established strong financial, industrial, technological and diverse market
matrix. They have a well furnished logistics infrastructure. This has lead in
attracting large number of customers and also making strong and long
lasting relationships with industrial and corporate level clients. Also now
the salaries of military personnel’s are dispatched by Askari Bank .All
these things have turned Askari Bank as the fastest growing bank of
Pakistan. The many awards that it has received are clear sign of its brisk
progress.
 Askari bank is serving a huge market segments and its market offering are also
diverse and flexible according to the segment needs and specification.
However this has not let the bank to compromise at its quality standards.
Supreme and elegant service is the top most priority of the bank.
 Askari Bank has the largest ATM network in the county that comprises of
shared network of 4,173 online ATMs covering all major cities in the country.
These machines can be used at any time. Askari Bank has installed the

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 technologically advanced and latest ATM machines that work in optimized
way without any obstacles like jamming etc.
 Askari bank is powered by Army welfare trust. So discipline and time is given
the utmost importance. The employees reach the branch at least ten minutes
before 9 am and the banking activities are launched right at 9 am and its goes
nonstop up to 5 am. This thing makes the customers feel very ease to visit the
bank. This finally leads to customer loyalty, retention and thus profitable
relationship. Disciplines obviously garnishes and boosts the activities and
behaviors of employees.
 Askari Bank believes in customer orientation. It offers huge flexibility in its
various services and thus it becomes very simple, easy, attracting and
affordable for the customer to choose the desired facility. The bank pays keen
attentation at customer relationship management and special purposely
developed software’s and technological instruments are used for this matter.
 Information technology has revolutionized the banking industry.Askari bank’s
management believes is embracing the state-of-art and latest technology to
ensure brisk and quality services. This not only provides the quality in offering
services but also saves time, energy and cost. ACBL management is quite
prepared to adopt the latest advancements in technology resulting in revolution
in the banking operations such as check clearing process, computer based
teller equipment, automatic teller machines, and electronic funds transfers
among the others and also Askari Bank is the first to launch many of these
services.
 Askari bank has keen concern for the people, ethics and environment .So it
enjoys good and better public reputation, goodwill as compared to its
competitors. This is one of the greatest strengths that lets bank not only to
retain existing customers but also to attract new customers. The bank has
made enough contributions in sports sponsorships, education, environmental
friendly and other social activities.
 The human resource philosophy at Askari Bank focuses on multi-talent merit
based hiring, professional grooming, requisite training the employees are
consistently undergone by various sorts of trainings. These talented, multi
skilled, motivated and energetic employees are the assets of Askari Bank. And

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 the Bank pays special attention to their circumstances. Askari Bank gives
maximum salary to employees among all private banks. In addition to basic
salary, there are many other rewards like insurances ,medical and
bonuses. Employees here feel secure at their position and have maximum
job security. These all elements acts as huge motivational source for
employees and the result is that bank enjoys their maximum output.

9.2WEAKNESSES
Secondly we analyze the Weakness of the ABL that are as follows:
 Due to risks such as political economy and legal the bank has suffered losses the main reason
was piling up to of large amount of irrevocable debts.
 The bank still has traditional ways of operations in this advance technological environment.
For example account opening registers, manual checking of vouchers.
 Accumulated losses pushed the bank to cut down its promotional activities in order to reduce
expenses for last few years.
 Although the bank has computerized accounting system, but still bankers make their entries
in accounting register manually.
 In Askari Bank the individual difference has strong impact on the
organization’s
Performance due to wrong criteria of selection of employees. So with the passage of time
individual differences start increasing which undermine the goodwill of the organization.
 The advertising media used by Askari bank for publicity include mostly newspapers and
journals. But the most powerful and effective media is of television through which people in
Pakistan as well as outside Pakistan can have instant information about new products and
developments of ABL
 No availability of sophisticated equipment’s in branches and lengthy credit processing
and documentation procedures.
 AKBL ATM’s are usually out of work without any notification to customers
as compared to MCB, which advertises in newspapers that a certain machine
is out of order. Moreover one of their customers also mentioned in a survey
that the machine is out of order mostly at weekends.
 One of the weaknesses of AKB L ATM is that they have prescribed cash
withdrawal limit for all kinds of customers whereas AKBL ATM offers no

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 cash withdrawal limit. They have cyclic withdrawal limit which allows each
customer to have his own cash withdrawal limit

9.3OPPURTUNITIES
Thirdly we analyze the Opportunities of the ABL that are as follows:
 ABL as a largest Pvt. Bank can increase its market share by producing good, market
oriented and customer needs satisfying products.
 Askari Bank is now looking into new ways of providing banking services to its customers.
New concept of mobile banking has been introduced by the bank, which will prove to be
remarkable success in the field of consumer banking.
 Customer feedback on different products and accounts have really improved the bank
performance and encouraged the atmosphere for other future policies.
 Askari bank is an active player in the loan business. Its strength in loaning stems from its
ability to forge strong relationships not only with borrowers but also with bank investors.
Bank can capture more markets by introducing new products for business community, as it
is the only group, which can contribute more towards increasing the assets of the bank.
 Foreign remittances are another area as present worldwide control system over transfer of
currencies through illegal channels has facilitated the area for the banks.
 There is a large pool of free MBA graduates who can be hired to achieve professionalism on
its organizational culture.
 Now computer literacy rate is increasing and its really big opportunity for Askari Bank that
when public will have more knowledge about computers than they will be more attractive to
the innovative products of Askari bank.
 Increase the product range to fulfill customer requirements and ATM network, ABL can
expend its 24 hours cash facilities to other cities of the country in order to meet growing
market demand.

 ABL also has an opportunity to expend its new technological advancement like, Tele
banking and Internet banking facilities in order to serve the customers more efficiently.

 Due to efficient and experienced management group. ABL can also improve well and
expend its foreign operation successfully.

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  Increasing need and potential of leasing in Pakistan provide ABL an opportunity to utilize its
skills and efficiencies in leasing business as well.

9.4THREATS
Economic Environment

Economic environment is a major threat to ATM’s success .For example in 2000

when the government embarked on an economic revival plan with a complete task of
resource mobilization, GDP growth and poverty alleviation in a different economic
environment with continued international sanctions. During the year domestic demand
though improving still remained weak and fiscal constraints did not allow the
government to increase development expenditure and boost demand.

Political/Legal environment

Law and order situation has a direct impact on how frequently or how many people
use ATM. Also legal obligations also hinder/pose threat to ATM availability. For
example there is a rule that he two ATMs should be at least 3 kms away from each
other. If there are strict regulations on this policy then it is a threat to ATM
availability for example there is an ATM in Melody and also at Aabpara so it is
important that legal environment is positive and firm enough to pose threat to Bank’s
activities.

Expense Base

The expense base will be a major threat to the ATM because it will impact the need to
spend in order to modernize AKBL’s customer interface. Expenditure has to be
incurred on Branch rationalization and computerization. This expenditure is essential,
given poor infra-structure at Branch level resulting from years of underinvestment.
Because 90 million is sufficient money to invest to open an ATM there should be a
strong expense base to support the expansion of ATM.

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 CHAPTER#10

CONCLUSION AND RECOMMENDATION

10.1CONCLUSION
In this world, no one is perfect. Every organization is facing difficulties. Askari Bank
is also facing some difficulties. There is a mushroom growth of banks in the banking
sector of Pakistan. So, there is very much competitive environment in the banking
sector of Pakistan. Every bank is trying to catch the attention of more and more
customers towards it. Overall experience of my Internship was very good. If the
recommendations, which I have given for Askari Bank, are fulfilled then there shall
be much improvement in the working of Askari Bank.

10.2 RECOMMENDATIONS
 Doing internship at Askari Bank was an interesting ,gaining ,grooming and
ever remembering experience .The highly cooperative staff , variety of tasks ,
dealing and communication with customers and documentation were some of
tasks that made me to gain a lot. Though there every activity was at its
elegance, but I am here giving some recommendations that in my thinking will
be beneficial for the bank.
 Askari Bank must expand its network of branches. Pakistan is an agricultural
country and most of its population lives in villages and rural areas .However
contrary to this fact, almost all of the branches of Askari bank are in urban
areas. Bank’s management should pay serious attention to this. Though bank
is offering special services in agriculture but clients have to travel far too
urban areas to access its services. So there are much chances that such
customers turn to some other bank. Today is the era of electronic media and
advertising play a major role in the success and worth building of any
organization. Askari bank’s management should pay some attention at this
side as well .By giving consistent advertisements in electronic as well as print
media to aware, retain, attract and appeal people. There is a high degree of
centralization in Askari Bank. It should be bit flexible as herein this branch, I
have seen many simple cases where many matters get late or pending because

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 the case is being sent to higher authorities for approval. Though there exists
Human Resource Department in Askari Bank, Peshawar Cantt branch but it is
just up to name of existence. There is no HR specialized personnel for it and
normally accounts department employees also perform its tasks and activities.
This should be removed and HRM department should be trimmed with
specialized persons in order to ensure efficient and effective working of this
department. 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.
During internship at Askari Bank, it was observed that the maintenance speed
is very much slow. So, it can be stated that the maintenance staff is very much
careless. If possible, bank should arrange externships for some employees in
other reputable banks, to bring up new ideas and more accuracy in AKBL.
 I have noticed that the employee’s performance appraisal system is not
practically applied as far the Peshawar Cantt Branch is concerned. The
employees are not considered as the assets of the bank, they are not treated
properly. Those employees are treated well which bring more depositors and
bring cash to the bank. The employees who are working very hard and there is
lot of Burdon on them, they are not properly appraised and benefited with
some rewords or given compensations. There were some equipment’s which
were not working well from day I started till the day I ended my internship,
which included. The electricity generator, UPS system, some of computers
were not working. I have also noticed that the Askari Bank has suffered from
some serious attacks (bomb blasts) in the past yet the security level was not
upto the standard and there was a high risk. The bank employees are very
much worried about it. Some serious steps should be taken to improve the
security level. One thing which discourages a lot of customers is the extra and
meaningless rules and regulations of the bank. Like for encashment above one
hundred thousand, the account holder must provide photocopy of NIC, which
in other banks are not compulsory, there are some more such extra
requirement which are necessary in various departments, such requirements
discouraged a lot of customers and thus effected the bank performance in a
great deal.

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REFERENCES
 https://www.scribd.com/doc/16412330/Askari-Bank
 https://www.scribd.com/doc/13377085/Askari-Bank-Prjct
 https://www.scribd.com/doc/50938300/Askari-Islamic-Bank-internship-report
 https://www.scribd.com/doc/27260636/Report-on-Askari-Bank
 http://akbl.com.pk/islamic/overview/
 https://www.scribd.com/doc/17236046/ASKARI-COMMERCIAL-BANK-
internship-report
 http://www.managementparadise.com/sayed123/documents/15925/
presentation-on-askari-bank/
 http://www.managementparadise.com/rajeshsekar/documents/9260/askari-
bank-ratio-analysis/
 http://akbl.com.pk/investor-relations/financials/annual-reports/
 http://akbl.com.pk/wp-content/uploads/2014/12/Askari-Bank-Limited-AR-
2016-1.pdf
 Hoans Vane James: Financial Management in the edition 2005.
 http://www.ibp.org.pk
 http://en.wikipedia.org/wiki/State_Bank_of_Pakistan/online
 http://en.wikipedia.org/wiki/AskariJBank/online
 www.google.com

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