TABLE OF CONTENT

EXECUTIVE SUMMARY .................................................................................................................................. 5 INTRODUCTION ............................................................................................................................................. 6 CENTRAL BACKGROUND INFORMATION .................................................................................................. 6 BANKING IN PAKISTAN .......................................................................................................................... 6 COMPANY BACKGROUND ......................................................................................................................... 7 HBL MISSION & OBJECTIVES ..................................................................................................................... 9 MISSION ................................................................................................................................................ 9 VISION ................................................................................................................................................... 9 OUR BRAND........................................................................................................................................... 9 VALUES .................................................................................................................................................. 9 COMPANY ANALYSIS ................................................................................................................................... 10 OPERATIONAL ANALYSIS ......................................................................................................................... 10 DEPARTMENTS OF HBL ....................................................................................................................... 10 FUNCTIONS OF DIFFERENT DEPARTMENTS OF HBL ........................................................................... 11 ACCEPTING DEPOSITS ............................................................................................................................. 11 CURRENT DEPOSITS ................................................................................................................................ 11 PROFIT AND LOSS SHARING ACCOUNT (SAVING) ............................................................................... 11 FIXED DEPOSITS................................................................................................................................... 11 MAKING LOANS AND ADVANCES ........................................................................................................ 12 DEMAND FINANCES ............................................................................................................................ 12 RUNNING FINANCE ............................................................................................................................. 12 PRODUCTS AND SERVICES .................................................................................................................. 12 Auto Finance ........................................................................................................................................... 12 For Personal Loans .................................................................................................................................. 13 For Credit Card Payments ....................................................................................................................... 13 DEBIT/ ATM CARD ................................................................................................................................... 13 HBL FAST TRANSFER................................................................................................................................ 13 HBL E-BANK ............................................................................................................................................. 13 SWIFT ...................................................................................................................................................... 14

AGENCY SERVICES TO THE CUSTOMERS ..................................................................................................... 14 COLLECTION OF CHEQUES ...................................................................................................................... 14 TRANSFER OF FUNDS .............................................................................................................................. 14 FOREIGN EXCHANGE BUSINESS .............................................................................................................. 14 COLLECTION OF UTILITY BILL .................................................................................................................. 14 LOCKER FACILITY ..................................................................................................................................... 15 HUMAN RESOURCE ASSESSMENT .......................................................................................................... 15 HUMAN RESOURCE MANAGEMENT ................................................................................................... 15 RECRUITMENT AND SELECTION .......................................................................................................... 16 ENTRY LEVEL PROGRAMS.................................................................................................................... 17 EXPERIENCED PROFESSIONALS ........................................................................................................... 17 MARKETING ANALYSIS ............................................................................................................................ 18 Product ................................................................................................................................................ 18 Price .................................................................................................................................................... 18 Place .................................................................................................................................................... 18 Promotion ........................................................................................................................................... 19 SWOT ANALYSIS .......................................................................................................................................... 19 STRENGTHS: ............................................................................................................................................ 19 WEAKNESSES:.......................................................................................................................................... 19 OPPORTUNITIES: ..................................................................................................................................... 20 THREATS: ................................................................................................................................................. 20 ENVIROMENTAL ANALYSIS.......................................................................................................................... 20 POLITICAL AND LEGAL ENVIRONMENT ................................................................................................... 21 ECONOMIC TRENDS ............................................................................................................................ 21 SOCIO-CULTURAL ENVIRONMENT ...................................................................................................... 22 TECHNOLOGICAL FACTORS ......................................................................................................................... 22 GROWTH RATE FOR THE BANKING INDUSTRY........................................................................................ 22 TRENDS IN COMMERCIAL BANK INTERMEDIATION IN PAKISTAN .......................................................... 23 MAJOR PRODUCT LINES AND MARKET SEGMENTS ................................................................................ 25 COMPETITORS ANALYSIS ............................................................................................................................ 26 MAJOR COMPETITORS ............................................................................................................................ 26 MARKET SHARES ..................................................................................................................................... 26

GOALS ..................................................................................................................................................... 27 STRATEGIES ............................................................................................................................................. 27 TECHNOLOGY ANALYSIS.............................................................................................................................. 28 TECHNICAL METHODS THAT AFFECT THE INDUSTRY.............................................................................. 28 SOFTWARE USED BY HBL ............................................................................................................................ 29 MISYS .......................................................................................................................................................... 29 DEPARTMENTS I WORKED IN ...................................................................................................................... 29 OPERATIONS ............................................................................................................................................... 29 ACCOUNT OPENING DEPARTMENT .................................................................................................... 30 CURRENT ACCOUNT OR DEMAND DEPOSIT: ...................................................................................... 30 SAVING ACCOUNT ............................................................................................................................... 30 BASIC BANKING ACCOUNT .................................................................................................................. 30 OPENING OF AN ACCOUNT ................................................................................................................. 31 CLEARING DEPARTMENT..................................................................................................................... 31 INWARD CLEARING ............................................................................................................................. 31 OUTWARD CLEARING.......................................................................................................................... 32 CONSUMER BANKING DEPARTMENT.......................................................................................... 32

MAIN PROBLEMS IN HBL............................................................................................................................. 32 FINDINGS..................................................................................................................................................... 33 CONCLUSION & RECOMMENDATIONS ....................................................................................................... 33 CONCLUSION........................................................................................................................................... 33 RECOMMENDATIONS ............................................................................................................................. 34

EXECUTIVE SUMMARY

The purpose of this report is to evaluate the performance of Habib bank limited. This job report is a partial requirement for the fulfillment of their MBA for the BAHRIA UNIVERSITY ISLAMABAD. The presentation of the job experience in the form of a report also carries great importance. The report aims at appraising the working of HABIB BANK LIMITED, its functions and operations and also attempts to asses its performance. Certain recommendations are presented for the potential areas of improvement. HBL has aggressive growth plans in Pakistan. Its name is generally considered for quality and reputation. It offers a broad range of products to target different market segments.

INTRODUCTION
CENTRAL BACKGROUND INFORMATION

Banking in primitive societies existed in some form. The greatest invention of all times is considered to be the invention of wheel which made transportation easy and transportation opened a gateway to business and exchange of goods flourished. The initial business was done on barter which meant an exchange of commodity for commodity. There is a myth also about the invention of money, which tells that king Midas of Libya invented money in 800 B.C. Another statement states that the king of Babylonian empire named as King Hammurabi in 1700 B.C. made all the rules and regulations of lending and borrowing and interest etc. He wrote them on an eight feet stone in the center of the city. Two famous temples are also remembered for the lending and borrowing in different transactions. One was the temple of Ephesus and the second was known as the temple of Delphi. It is said that the first bank was established in Barcelona in Spain. Another statement tells that Venice and Genoa was the hub of financial transactions and the first bank was founded there in 14th century. The first public bank that was formed was in Germany in later part of the time.

BANKING IN PAKISTAN Before the partition of India and Pakistan in 1947, branches of British banks dominated banking in Pakistan. The first domestic banking institutions emerged in the 1940s, immediately after Pakistan's independence from Britain. These institutions include the Australasia Bank (today, Allied Bank Limited or ABL), Habib Bank Limited (HBL), Muslim Commercial Bank (MCB), and the National Bank of Pakistan (NBP). The NBP was wholly government owned but prominent merchant families established the other three. In 1948, the SBP was formed. It assumed the

supervisory and monetary policy powers of the State Bank of India. From 1960 to 1970, a number of specialized development finance institutions (DFIs) such as industrial Development Bank of Pakistan (IDBP) and the Agricultural Bank emerged. These DFIs were either controlled directly by the state or through the SBP, and were intended to concentrate on lending to longterm projects in specific priority sectors. Banking and Financial services sector in Pakistan comprises the commercial banks and the nonbanking financial institutions, including the development finance institutions (DFIs), leasing companies, modarabas (Islamic Mutual Funds) and investment banks. These are controlled and regulated by the State Bank of Pakistan (SBP). Pakistan is in the process of adopting an Islamic (Shariah) financial system, under which interest-based banking is not allowed. However, this has not been made into a law as yet, and exists only on paper, and most banks provide an anticipated profit rate in advance. Since 1990 the Government of Pakistan (GOP) has introduced various reforms in the financial services sector enhancing the level of autonomy enjoyed by the SBP. The number of banks operating in Pakistan has increased, which in turn has resulted in increased competition. The banking sector, in general, has shown good progress during the last few years. During previous five years, the combined total assets of domestic banks, showed an average annual increase of 22 percent, while combined deposits have recorded an increase of 27 percent per annum. A total of forty-six commercial banks, including twenty-one foreign banks, are operating in Pakistan. Additionally, sixteen Investment Banks, twenty-nine Leasing Companies and fifty-three Modaraba Companies provide a mix of financial services.

Opportunities for new foreign banks exist in consumer banking, corporate bonds, investment banking, leasing and housing finance sectors. Good reputation enjoyed by the existing foreign banks will be helpful for new entrants. Some challenges, however, do exist in the form of weak economic conditions in Pakistan and the turnaround possibilities in Nationalized Commercial Banks (NCBs) through privatization. COMPANY BACKGROUND

HBL established operations in Pakistan in 1947 and moved its head office to Karachi. Our first international branch was established in Colombo, Sri Lanka in 1951 and Habib Bank Plaza was built in 1972 to commemorate the banks 25th Anniversary.

With a domestic market share of over 40%, HBL was nationalized in 1974 and it continued to dominate the commercial banking sector with a major market share in inward foreign remittances (55%) and loans to small industries, traders and farmers. International operations were expanded to include the USA, Singapore, Oman, Belgium, Seychelles and Maldives and the Netherlands. At the time of independence, the areas which now constitute Pakistan were producing only agricultural products raw material for indo-Pak subcontinent. Partially no industries were there to process the raw material; therefore the raw material was exported from Pakistan. There were 19 non-Indian foreign Banks which were engaged in the export of crops from Pakistan with only two Pakistani Banks i.e. HBL and the Australia Bank. The circumstances were completely un-certain. The confidence of the people had been shaken by the un-friendly environment and till the time peace had not been restored, people would naturally have been interested in other things. The nation was quite young with extreme scarcity of resources and these definitely added to the difficulties of the govt., to run its own Banking system immediately. Following the announcement of the independence plan in June, 1947, the Hindus residing in the territories now comprising Pakistan started transferring their assets to India and vice versa. The Banks included those having their registered offices in Pakistan, transferred them to India in order to bring a total collapse of the new state. It had been decided that the Reserve Bank of India would continue to function in Pakistan so that the problem of demand and time liabilities, coinage, currencies, exchange rate etc be settled between India and Pakistan and the Indian Notes would continue to be legal tender in Pakistan till 30th September, 1948. Again due to certain differences between Indian Pakistan, the India government withheld Pakistan's share of

Rs.75 core in forward and subscribed heavily to the government of Pakistan to the tide over the crises. At a time when this newly born country was at whirlwind of crises, it was HBL which fulfilled generously the financial needs of all its sectors, paid salaries to the employees of all Govt. departments, helped in the establishment of State Bank of Pakistan which the Quaid-e-Azam inaugurated on July 1st, 1948. HBL after partition opened its branches throughout Pakistan to provide finance and other facilities to the business community. In association with HBL, the Govt. sponsored Pakistan Finance Corporation Limited for financing of cotton. The Bank helped handsomely in the construction of WARSAK DAM PROJECT, WAPDA, & K.D.A. by provided finance and other facilities. On December 29, 2003 Pakistan's Privatization Commission announced that the Government of Pakistan had formally granted the Aga Khan Fund for Economic Development (AKFED) rights to 51% of the shareholding in HBL, against an investment of PKR 22.409 billion (USD 389 million). On February 26, 2004, management control was handed over to AKFED. The Board of Directors was reconstituted to have four AKFED nominees, including the Chairman and the President/CEO and three Government of Pakistan nominees. HBL MISSION & OBJECTIVES MISSION To make our customers prosper, our staff excel and create value for shareholders VISION Enabling people to advance with confidence and success OUR BRAND Our brand identity is the outward expression of what we stand for as an organization. This is summarized in our vision, mission and is supported by our values. VALUES Our values brought to

are life

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fundamental our attitudes

principles and

that

define It is

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are make

behavior.

us unique and unmistakable. Our values are defined below:

 Excellence Integrity Progressiveness Customer Focus.

COMPANY ANALYSIS
The company analysis of a firm comprise of many factors and revolves around all the internal activities, which refers to the operations carried out, strategies that are a part of the marketing mix and the environment in which the firm or company has to survive. All these factors are linked to one another in some form and make a chain of necessities for the achievement of a successful status in the market. HBL is no different than any other firm and faces the same trio on its face ahead. OPERATIONAL ANALYSIS The operational analysis enlightens the procedures and methods that a firm adopts to carry out and perform its work. Different departments are accordingly formed and tasks are specified. Thus workload load is divided between different departments and to responsibilities are delegated to carry out function properly. There are also different departments, which carry out several functions specifies and as a result of coordination between them it provides its services

DEPARTMENTS OF HBL

There are few departments on which general or day to day banking of HBL composes. There details are as under: Deposit department Clearing Departments Inland Remittance Department Bills Departments Advances Departments Cash department

 CD Department Foreign Exchange Department. FUNCTIONS OF DIFFERENT DEPARTMENTS OF HBL

The basic functions of different departments HBL are as follows. Accepting deposits Making Loans and advance. ACCEPTING DEPOSITS The primary function of HBL is to accept and receive surplus money from the people, which they willingly deposit with the Bank. Like all other Banks, HBL also take incitation to attract as much depositors as it can. They offer different deposit schemes to its customers, which includes the following types. These schemes as follow. CURRENT DEPOSITS This type of account is often maintained by the business Current deposits are those deposits on which Bank offers no interest but it allows the account holders to withdraw their money at any time they want without giving any prior notice to the community, which requires large sums of money very often for their business transaction. PROFIT AND LOSS SHARING ACCOUNT (SAVING) Saving deposits or PLS are those accounts on which Bank offers a lower rate of interest. After the Islamization of the Banking system in the country it has been given the name of PLS saving account. The Bank undertakes to repay deposits on demand up to a certain amount. FIXED DEPOSITS Fixed deposits are those which can be withdrawn only after the maturity period. In this type of deposits the Bank allows high rates of interest depending on the time period of deposits. The shorter the period of deposits, the less will be the interest and vice versa.

MAKING LOANS AND ADVANCES The second most important function of HBL is to provide financing facility to its customers. These loans and advances are usually made against document of title to goods, marketable securities, and personal securities. HBL charges different interest rates on these loans and advances depending on the terms and conditions settled with the customers. Following types of loans and advances are made available to the customers. DEMAND FINANCES Demand finances are those finances which are given to the borrowers for specified period and can be called back without any prior notice. It is a single transaction finance. It can be long term, medium term and short term. Mark up is also charge. Here the amount can be withdrawn once at the time of disbursement. RUNNING FINANCE HBL provides these finances against the security of current assets like shares, bond, cash crops like cotton and other cashable commodities. The borrowers account is opened with the Bank with the amount of the total loan provided or allowed to the borrower. The borrower is allowed to withdraw any amount from his account within the specified limit and interest is charged only on the amount actually withdrawn.

PRODUCTS AND SERVICES

Auto Finance Habib Bank Auto Finance, a lease product, designed to offer you an economical way For owing the car of your choice. Some characteristics are: Lowest Down Payment Lowest monthly rentals Fixed repayment tenures of 36,48and 60 months. Lowest Processing charges Insurance premium rates as low as 3%

 World wide personal accidental insurance coverage of up to Rs. 200,000. All locally assembled new cars can be financed through this scheme. For Personal Loans Maximum loan up to Rs. 2,000,000 Choice of 12,24,36,48 and 60 months for payback Lowest Mark- up Quick processing Full Credit Life insurance Available from over 400 designated branches throughout Pakistan

For Credit Card Payments Lowest mark-up-compared to any credit card Quick processing Full Credit Life insurance Available from over 400 designated branches throughout Pakistan DEBIT/ ATM CARD HABIB BANK icard is used for dual purposes-a debit card and an ATM card and provides u the direct access to cash in your account. HBL FAST TRANSFER A unique solution for overseas Pakistanis to send money back home in a swift and convenient manner. HBL E-BANK It provides services via a dedicated communication link on the internet. The E-Banking services provide anytime, anywhere banking to all 5 million customers. This service, designed to be user friendly, assures secured access and confidentiality.

SWIFT The bank is a major SWIFT user in 70 domestic branches & 21 overseas countries / locations in the network. SWIFT services are being used for funds transfer, remittances and trade related transactions, resulting in major improvement in payment processing capability for enhanced customer service.

AGENCY SERVICES TO THE CUSTOMERS HBL also provides agency services to its customers. Some of which are as follow: COLLECTION OF CHEQUES HBL pays and collects cheques on behalf of their customers, and for this it receives commission form their account holders. EXECUTION OF STANDING INSTRUCTION HBL also executes the standing in case if it is ordered by the customers of the Bank to do so. These instructions are usually given in writing to Bank. The Bank debits and credits the accounts of its customer for the transactions carried out by the individual or firm. TRANSFER OF FUNDS HBL, also transfers funds of the customers from one Bank to another Bank. If the transfer is within one station, they dont charge any commission and even if they charge, they charge on reduced rates. GENERAL UTILITY SERVICES HBL also performs a number of generally utility services to its customers which are as follows: FOREIGN EXCHANGE BUSINESS HBL transacts foreign exchange business by discounting foreign bills of exchange and thus provides facilities for financing in foreign trade. COLLECTION OF UTILITY BILL Electricity, telephone and other such bills can also be deposited with HBL.

LOCKER FACILITY HBL also provides locker facility to its customers where valuables of customers can be kept FINANCIAL ANALAYSIS
Year 2009 2010

DEPOSIT 682,750,079 747,374,799

PROFIT ASSETS (PRE-TAX) 454,662,499 13,400,749 8 4,369,798 459,750,012 17,034,380 9 6,250,771

ADVANCES

Above all figures are in Rs ooo. Which shows that the habib bank is very sound financially?Assets are increasing and the profit after tax is also increasing. Which is a very good sign for any commercial bank. Price per share is also increasing in stock exchange presently its is Rs 119.

HUMAN RESOURCE ASSESSMENT

HUMAN RESOURCE MANAGEMENT

Human Resource Management is the part of the organization that is concerned with the people dimension. Every organization is comprised of people. Acquiring their services, developing their skills, motivating them to high levels of performance, and ensuring that they continue to maintain their commitment to the organization are essential achieving organizational objectives. HBL is an organization that provides opportunities for its staff to have a challenging and rewarding long-term career. To this end the Human Resource Group (HRG) encourages and motivates its employees to excel in the responsibility that they have in the organization .It believes that creativity and innovation comes from talent, knowledge and experience and it is HBLs endeavor to provide and maintain an environment which not only nourishes these strengths but also provides opportunities for the staff to have a career which has multidimensional growth opportunities.

In doing so, HRG has been restructuring and redesigning the overall structure of the organization, which includes rationalization, cutting down the decision layers, improvement in staff training and hiring professionals and MBAs at entry-level management. The overall direction of HRG has been towards nurturing the strengths of the human capital to its maximum with a defining principal to help create a progressive environment and sustain a thorough commitment of our staff towards focused customer service. HRG therefore recognizes the need to proactively invest in staff training and develop courses on a regular basis. Under the umbrella of its Management and Organization Development Division (MODD) its Management Development Institute (MDI) with its three fully equipped chapters at Karachi, Lahore & Islamabad regularly conducts and outsource technical and personal development courses for its all level of staff enabling them to meet the challenges of the everchanging business requirements and customer needs. During 2008, 529 courses, workshops, skill development clinics and seminars in the disciplines of Service & Attitude, Market Research & Selling, Management & Communication, Credit & Finance, I.T. & e-Banking, Treasury & Trade Finance, Global/ Domestic Banking Operations and on other diverse subjects were conducted by In / Ex-House professionally skilled, qualified and certified faculty and industry experts for 10233 people of senior / middle line management & staff carving 1334 days training days. There is no budget limit for Training and Education at Habib Bank. HR Group aims to maintain and further improve the service-oriented culture and to make employment not only satisfying but also enjoyable.

RECRUITMENT AND SELECTION

Our Recruitment Meritocracy is an integral part of HBLs recruitment policy. Our merit-based recruitment process incorporates the principles of equal opportunity and leads to the appointment of the most capable candidate. This ensures openness and transparency, allowing greater confidence in the outcome of the selection process. The merit principle at HBL aims to identify the most suitable person for the job assessed on the

basis of the following parameters:

Educational Background Skills and Competencies Abilities and Attitude Experience Interpersonal / Communication skills

ENTRY LEVEL PROGRAMS

It includes Management Trainee Cash Officer Internship

EXPERIENCED PROFESSIONALS

We recruit experienced professionals in all areas of the bank and encourage the creation and pursuit of innovative ideas. Our dynamic work environment offers diverse opportunities to stimulate ongoing employee needs and supports career enhancement opportunities. SELECTION PROCESS

The diagram below represents the process on which we base our selection.

MARKETING ANALYSIS
The marketing analysis of the bank focuses the promotional campaign, the four Ps of marketing are also in vision of the bank that it uses for its marketing (called 4 pillars) i.e., product, price, place (distribution) and promotion. For more lucidity they shall be explained briefly here.

Product
The products at HBL are its various banking services, which are its Deposits (PLS and Non-PLS), Remittances, and ATM & VISA Cards, Lockers etc.

Price
The prices for various services of Bank are given in the booklet "the Schedule of Bank Charges". The prices at the bank are quite competitive with those of other banks working nationally.

Place
The Bank has over 45 branches through which it offers services to its clients. The distribution channels are its employees who deal with customers.

Promotion
Various promotional techniques as advertising, personal selling etc. are used. The promotional strategies of the Bank vary according to the market conditions. However, the following techniques are mostly used:

SWOT ANALYSIS

STRENGTHS:
Goodwill & historical background Professional and well trained staff Largest customer base HBL is Pakistan's largest commercial bank HBL has a domestic network of 1,425 branches with an international network of 48 branches in 26 countries 20% share of HBL in financial market Large Balance sheet size Decentralized authority

WEAKNESSES:
Unfavorable union activities and management conflicts Checking System is at intra-department level Weak marketing policies Nepotism & Favorism

 Infected portfolio still exists as bad debts Centralized management in particular areas

OPPORTUNITIES:
Opportunities for growth and expansion in cash management. Faster market growth represents opportunity to grow and diversify Restoration of investors confidence and pick up in private sector investment flows. Large deposit base and funds flow can help to avail related market opportunities

THREATS:
Adverse & unstable government policies Political instability Advance technology Competition from other banks

ENVIROMENTAL ANALYSIS
A broad view of market is important when management is interested in introducing better services for customers. Rapid technological change, global competition and the diversity of buyers preferences in many markets require the constant attention of the market vouchers to identify promises business opportunities, see the shifting requirements of the buyers, evaluate changes in competitors positioning and guide the choice of which buyers to target and classify them according to respective segments. Identification of external and macro factors that influence buyers and thus change the size and composition of market overtime involves initially building customer profiles. These influences include: Political and legal environment

 Economic trends Socio cultural environment Technological factors

POLITICAL AND LEGAL ENVIRONMENT

Banks are strongly affected by the political and legal considerations. This environment is composed of regulatory agencies and government law that influence and limit various organizations and individuals. Mostly these laws create new opportunities for business.

BUSINESS LEGISLATION HAS FOLLOWING MAIN PURPOSES To protect banking companies from unfair competition. To protect consumers from unfair business practices adopted by banking companies To protect the interest of the society from unbridled business behavior.

ECONOMIC TRENDS A banking market requires better consumer market in volume along with higher borrowing power. The available borrowing power depends on: Consumer income Saving rates Consumption patrons Rates of interest Budget deficit Exchange rates Cost of living Inflation

SOCIO-CULTURAL ENVIRONMENT A society is shaped by beliefs, norms and values. People in a society consciously and unconsciously interact with: Themselves Others Organization Society Nature

Following are the main factors. Which arise because of change in socio-cultural environment? Consciousness about services Concern for environment Improved customer relation

TECHNOLOGICAL FACTORS
Forces of technological advancement have played the most dramatic role in shaping the lives of people. The rate of change of technology has greatly affected the rate of growth of economy. New technology is creating deep rooted affects which could be observed in long run. The improvement techniques involved in on line banking. In brief PEST analysis affects the overall banking companies and provides us the information about the external macro condition.

GROWTH RATE FOR THE BANKING INDUSTRY

In Pakistan, the problem of inadequate financial intermediation during the early years was overcome by the creation of a nationwide system of commercial bank branches. Banks were encouraged to mobilize deposits and lend to the corporate sector. Historically, prudent guidelines

followed maturity matching assets and liabilities, but industrial loans were of longer tenor, and this led to several imperatives for financial institutions.

First, to ensure a positive response from the banking system, credit guidelines (eventually to become quantitative credit controls) were established.

Second, to ensure a positive response from the corporate sector, funds were provided at rates below those that would have prevailed in a competitive market in a capitalconstrained economy.

These policies had major repercussions. Credit guidelines and controls and disequilibria pricing created signaling distortions in the capital market. With term finance available cheaply from the banking system, there was an incentive to adopt capital-intensive techniques in production. In the financial markets, cheap capital was a direct hindrance to the development of a market for corporate debt. Pricing anomalies also affected banks balance sheets and their profitability. Over time, this restricted the ability of the banking system to mobilize and allocate funds efficiently and contributed to disinter mediation and the over abundance of financial institutions in the country.

TRENDS IN COMMERCIAL BANK INTERMEDIATION IN PAKISTAN

Government policy has been the key determinant of the growth of commercial banks in the country. By 1995, there were over forty commercial banks in the country, together with investment banks, brokerage houses, mutual funds and life insurance companies. In 1973, the government nationalized and consolidated the Pakistani financial system, ostensibly on the grounds of reversing socio-economic inequity and for improving the direction of economic development. Nationalization had both structural and portfolio implications for the banks.

The Pakistani private banks were consolidated into the big five Nationalized Commercial Banks (NCBs): Habib, National, Muslim Commercial, United and Allied, whose 7500 branches dominated the financial services industry until the early 1990s. They contributed to a phenomenal growth of banking liabilities and assets during the 1970s and 1980s: between June 1975-90, NCBs was 55.5% and asset growth was higher still. By the end of 1990, the NCBs had mobilized over Rs 275 billion in deposits, and had Rs 548 billion in assets. By 1990, the financial performance of the five NCBs had declined substantially since nationalization. Additionally, government borrowing requirements increased throughout this period with major negative investment portfolio effects for the NCBs. However by 1990, with a more or less similar market share, foreign banks were contributing over 35% of the profits. The entry of the Pakistani private banks also contributed to this trend. The five years following 1991 have seen more substantive changes in Pakistani banking system than at any other time in the countrys history. Two NCBs were privatized: Muslim Commercial Bank and Allied Bank, while licenses were given to ten private banks during 1991. The growth of the financial sector as a whole also attracted a number of new foreign banks, and encouraged existing banks to expand their branch networks. By 1995, there were twenty-two foreign banks operating in the country, complimenting the seventeen private and six government-owned banks. At the same time, a number of external factors also combined to have an impact on banks operating performance, and on the extent to which the sector supported economic development. The statutory reserve requirements for banks had been reduced between 1991-5, while ceilings on loans had been eliminated. But the government moved away from explicit prudential guidelines to implicit recommendations and moral suasion. The latter has been a weapon in the armor of all central banks, but was used to the extreme by the State Bank of Pakistan throughout 1995-6 primarily to avoid IMF criticism over the use of excessive quantitative controls to regulate credit. As a result, banks curtailed asset expansion under and implicit threat of sanctions. This not only reduced their most profitable area of business but supported a widelyheld view in the financial market, that given the governments inability to control the deficit, the first casualty would be credit availability to the private sector.

MAJOR PRODUCT LINES AND MARKET SEGMENTS

HBL has following Strategic Business Units or SBUs, these units are listed below: 1. Branch Banking Deposit Rates Remittances Foreign Trade Lockers

2. Consumer Banking Credit Cards Auto Loans Home Loans Consumer Durables

3. Electronic Banking Phone Banking ATMs Online Banking

4. Corporate Banking Trade Finance Structured Finance

5. Treasury and Investment Money Market Forex Market Investments Government Securities Nostro Account

COMPETITORS ANALYSIS
In every industry a firm or company is faced with tough competition from other companies of the same route. The key to survival for every firm is innovation and keeping its image unique, upholding its traditional values and brand name. A corporation may not be perfect in every field but a moderate approach towards customers makes it stable and reliable. The firm policies should be an amalgamation of its strong and weak points so that a modest blend of products is offered.

MAJOR COMPETITORS
In banking industry HBL has also other multinational competitors like: Standard Chartered Bank. Askari Commercial Bank Citi Bank ABL FAYSAL BANK BANK OF PUNJAB UBL

In addition to these there are many others. All these banks have their roots back in their own culture and heritage. They have their own specific policies and strategies. Thus the banking industry comprise of such banks, which have different backgrounds and unique marketing style. They all combine to provide a fair chance of selection for customers.

MARKET SHARES
As such no financial organization in Pakistan is unable to determine the correct market share of the banking industry. Also banks do not disclose certain confidential information to the general public and internees. Still generally foreign banks in Pakistan contribute to about 35% to the whole banking industry. Out of which Askari, Citi, Standard Chartered Grindlays, Muslim Commercial, bank share the major market.

GOALS
Every business organization has a main goal before starting the business and they strive hard for the achievement of their ultimate goal. Similarly these banks also have a goal i.e. to maximize profit by offering unique and distinct products to their clients.

Every department in these banks also has a goal which heads towards the main goal for example as in Mortgage Department. Marketing personnel not only call their clients but they personally meet them and give them updated information about their unique new products.

STRATEGIES
These banks build their financial services on mainly three pillars that when put together efficiently, gives them a significant advantage:

First, they have created more distribution channels-both physical and virtual than any other company in financial services, thereby serving customer segments across the entire wealth spectrum.

Second, they have created an unparalleled footprint, being locally embedded in more than 30 cities and the leading domestic player in most.

Third, the breadth of its products and services creates cross-services opportunities through its global distribution channels that are unavailable to any other company in the industry.

This unique combination of strategies gives these banks enormous strategic flexibility for growth. These strategies are not permanent and hence changes with circumstances in the market which can be the customers buying habits, country political situations, seasonal targets, competitors policies, internal changes in the bank policies and effects of international trade. Thus these market-targeting policies of banks changes with time and hence they are not uniform in their approach. Here are some of the trends of competitors.

TECHNOLOGY ANALYSIS
TECHNICAL METHODS THAT AFFECT THE INDUSTRY
In modern world banking latest technology is bloodline for every bank. It has to provide the latest information for satisfied customers. Bank is well aware of this practice and aims for further improvements in all fields. The stationary used reflects the compatibility with latest trends. The computerization at the bank is according to the bank and customers need and provide as much help as possible. There are different kinds of vouchers, and other items, which aim at the better arrangement of keeping the record of, every activity or transaction taking place in the bank. These are the different items used.

SIGNATURE CARD The instrument is used to keep a record of the customers signature. The customer at the time opening an account fills the card. It carries the information about the customer. His name, account number, amount of money deposited and specimen signature.

VOUCHERS

Vouchers show the details about the amount received and paid. Bank use a double entry system i.e. debit and credit system. Thus debit and credit vouchers are used. Debit vouchers are used when bank incur an expense. Credit vouchers are used when the bank receives an amount.

MACHINES

There are different king of machines used at the bank for different purposes. These machines and there functions are explained here.

POS Machine

POS means Point Of Scale. This machine is used for the credit cards, whenever sales are made on credit card; it is used to record the sales transaction.

SOFTWARE USED BY HBL HBL is enjoying the competitive advantage of vast operational area. There are two types of branches come under HBL network. One type is the online branches whereas other type is batch branches (offline branches). So obviously HBL uses two types of different software. All batch branches use SIMEX software whereas online branches use MYSIS.

MISYS MISYS (online) perform two type of system Cashier system

This system use only cash transaction like cash withdraw, deposited, Remittance, Accounts opening, LFT etc. Equation system

Clearing inward or out ward, special or intercity clearing, supervision

DEPARTMENTS I WORKED IN
OPERATIONS Account Opening Dept. Clearing Dept.

ACCOUNT OPENING DEPARTMENT

Account opening department is one of the most important departments of a bank. It is known as Gateway to the bank as anyone (any individual, partnership firm or JSC) who wants to initiate relations or to avail the services of bank has to open an account. This is why it is known as gateway to the bank. For opening of account a form is given which includes all necessary requirements needed for further process. This form also includes term and conditions of account holders and all details of bank and customer relationship.

CURRENT ACCOUNT OR DEMAND DEPOSIT: Current Account of Habib Bank is open with 20,000/-, any Amount less than 20,000/- the bank will charge 5% on the remaining balance, the current is mainly open for the business man. Who can draw money any time from the bank this is the main function of this account. With minimum balance of Rs. 5,000 in this account, account holder can enjoy unlimited transaction facility. There is no interest paid by the bank on this sort of account.

SAVING ACCOUNT Saving accounts are opposite of current account. These sorts of accounts are provided to encourage savings habits. There are different classifications of saving accounts, usually termed as short, medium and long term saving plans. Each set has its own unique characteristics. The saving Account of Habib Bank is started from 20,000/-, any Amount less than bank will make charges of 55 per month against the balance. The function of the saving accounts is to save the surplus money of the people by giving them good interest rate. (Annexure 1)

BASIC BANKING ACCOUNT This account is basically introduced to cater needs of student and salaried persons. We can say that it is an aspect of corporate social responsibility of bank. It is similar to current account as no interest is paid. There will not be any deduction or penalties in case of minimum balance. The only precaution to operate this account to make sure that balance should not be zero or negative.

 OPENING OF AN ACCOUNT When all requirements are fulfilled by the applicant, the procedure of account opening starts. To open an account of any type, bank officer has to go through five different windows of MYSIS than the account holder information is sent for verification. 1) ANC stands for Add New Customer 2) CIM stands for Customer Additional Information Maintenance 3) CAA stands for Customer Account Address 4) OCA stands for Open Customer New Account 5) ZYC stands for Know Your Customer

CLEARING DEPARTMENT

Every bank performs both as a paying as well as collecting functions on behalf of its customer. It is however an important function of crossed cheques. A large part of this work is carried out through the bankers clearing house. A clearing house is a place where representatives of all the banks of a city get together and settle the receipts and payments of cheques drawn on each other bank. As the collecting banker runs the certain risks in receipt of their ownership, the law has provided certain protections to the banks. The basic function of clearing dept. arises when HBL account holder deposits cheque of another back to collect its payment on his behalf or HBL account holder gives a cheque to any other party concerning to any other bank. Usually a cheque is sent through clearing is credited to the depositor account day after tomorrow. In this regard there are two types of clearings Inward Clearing Outward Clearing

INWARD CLEARING Inward clearing means all those cheques which are issued by account holders to other parties and now these cheques are presented for payment (in term of amount of cheque credit to presenter account).

 OUTWARD CLEARING Similarly when outside parties issue some cheque to our account holders, they deposit these cheques in Cheque Receipts Department. Afterward these cheques, as relating to other banks operating in country, are sent to clearing department or further process. Clearing dept. sends these cheques to respective banks and after realization of cheque, funds are credited to the account of respective customer. In this regard there are two types of clearing a. Intra city clearing b. Intercity clearing These cheques are sent through NIFT. Time for realization may differ in case of remote areas.

CONSUMER BANKING DEPARTMENT

Presently I am working in consumer banking department in capacity of RSO. My job responsibility includes Marketing of HBL personal loan I am also looking after a corporate deal between HBL and PTV of Rs 400 m Cross selling of other products Customer compliant resolution Assist customer in banking rules and regulation.

MAIN PROBLEMS IN HBL

During my job I found some major problems in HBL overall management. There is noticeable communication gap between upper level management and operational staff. There is also over staffing in HBL moreover inefficient individuals are in credit card department. There is huge difference in approaches of experienced staff & young staff

 Imported upper level management Experienced staff is frustrated mainly because of two reasons Salaries have not been revised from last 10 years Experienced Habibians are neither satisfied by the privatization of bank nor they were taken into confidence at that times

FINDINGS Employees of the bank are generally indifferent about achieving targets given to them. The reason behind this is termed to be the impracticality of the targets which are assigned to staff members. The appraisal system makes the promotion of employees on the basis of the achievement of these targets. This factor is one of the reasons for the low motivation depicted by employees at times. The bank has improved its financial position during the year 2010 as compared to year 2009. The aggressive growth strategies employed by the bank have paid great dividends

The bank has also inaugurated the Islamic Banking Division of the bank; The financial analysis of the bank shows that bank has a sound financial status. Its marketing force is already targeting various segments of the market.

CONCLUSION & RECOMMENDATIONS

CONCLUSION
HBL is clearly the first choice of every one who believe in qualitative approach of banking an environment of highly responsible people. Bank is enjoying a healthy market share and taste of good status in terms of its operative features and customer support. HBL is clearly the best bank operating in Pakistan. Personal loan is a Distinguished feature of HBL experiencing a good reputation and reasonable mark up with respect to prevailing market mark up with assurance of satisfaction and support. HBL has more customers as compare to other banks, if they given proper attention to every customer then in .

RECOMMENDATIONS
The management should try to decrease job insecurity among the employees. Training program should be started for internees and newly appointed employees. There should be transport facility for the employees. The number of employees should be increased in order to decrease the workload. The bank charges high service charges as compared to the other banks, so these should be lowered down. Surveys must be conducted regarding customer satisfaction level and all employees of this dept. should look forward to getting feedback whenever possible. Adding of value added features that offer competitive advantage is also a means of avoiding customer dissatisfaction. Quick response to customer queries is necessary to maintain a healthy relationship with the customer. Proper training of customer handling should be given to employees. Training workshops and coaching clinics should be considered as an option that would provide adequate results.