ACKNOWLEDGEMENT
No one can say that I am perfect, everyone should admit that without the help
of ALLAH and His people a man can’t get anything so I bow my head before
almighty Allah with gratitude. I am also very much thankful and presents salute to
many individuals who have helped me in shaping this report .I am also very much
thankful to lot of former fellows and contemporary colleagues who took the time and
trouble during the last few days to speak to me about the way this text could be
Ali for his intellectual guidance without which it could have been rather difficult for me
I am also very thankful to the staff Habib Bank Ltd Gulgasht branch Multan
Table of Contents
01 Executive Summary 03
02 Evolution of Banking 04
03 Commercial Banking in Pakistan 05 to 09
History of Banking in Pakistan
04 About HBL Pakistan 10 to 19
History and Background
Privatization
HBL’s Mission, Vision and values
Board of Directors
Management
Corporate information
05 SWOT Analysis 20
06 Operations of HBL 25 to 57
Banking Departments in HBL
Products and services of HBL
07 Learning and Duties as an Intern 58 to 64
Foreign Exchange Department
Bills clearing Department
Credit Department
Account, lockers, ATM Department
Assignments
Impact on my Career
08 Award and Financial performance in 2008 & 2009 63 to 73
09 Recommendations 74
10 Glossary, Bibliography, Index 76 to 80
executive summary
Every student of master of commerce 0f BZU Multan has an essential
requirement to do Eight weeks internship in any of the well reputed organization.
The purpose of this program is to acquaint the students with practical applications of
theoretical concepts taught to them during conduct of their BSIT program. The
internship in Habib Bank was arranged by the job placement cell of the institute.
Really, it was a nice opportunity to have a close comparison of theoretical concept in
practical field, involving the use of primary and secondary data. All the efforts on the
Internship Report 3 Habib Bank Limited
way are summarized in shape of this Internship Report. Report starts with the topic
evolution of banking. The word 'Bank' is said to have been derived from the words
Bancus or Banque or Bank. This history of banking is traced to as early as 2000 B.C.
Talking about commercial banking in Pakistan It was very difficult for Pakistan to
build up its own Banking system immediately after independence without sufficient
resources. By 30th June 1948 the number of schedule banks in Pakistan declined
from mere scratch. Today there are more than 7000 branches of commercial banks
along with an established network of supplementary financial institutions. All this
development in the banking sector is the result of untiring efforts of six decades. HBL
was the first commercial bank to be established in Pakistan in 1947. Over the years,
HBL has grown its branch network and become the largest private sector bank with
over 1,450 branches across the country and a customer base exceeding five million
relationships.
During the time of my internship in Habib Bank gulgasht Multan I got the
chance to work in all the departments of HBL working there. Duties and learning in
each department is given in this report. Talking about financial performance of the
bank in 2009 all the financial indicators are showing positive results when the
financial performance of the bank in 2009 is compared with financial performance of
2008. During 2009 HBL also won some awards. At the end of this report I have given
my suggestion for the improvement of the bank.
Evolution of banking
Internship Report 4 Habib Bank Limited
The word 'Bank' is said to have been derived from the words Bancus or
Banque or Bank. This history of banking is traced to as early as 2000 B.C. The
priests in Greece used to keep money and valuables of the people in temples. These
priests thus acted as financial agents. The origin of banking is also traced to early
goldsmiths. They used to keep strong safes for storing the money and valuables of
the people. The persons who had surplus money found it safe and convenient of
deposit their valuables with them. The first stage in the development of modern
banking, thus, was the accepting of deposits of cash from those persons who had
surplus money with them.
The goldsmiths used to issue receipts for the money deposited with them.
These receipts began to pass from hand to hand in settlement of transactions
because people had confidence in the integrity and solvency of goldsmiths. When it
was found that these receipts were fully accepted in payment of debts; then the
receipts were drawn in such a way that it entitled any holder to claim the specified
amount of money from goldsmiths. A depositor who is to make the payments may
now get the money in cash from goldsmiths or pay over the receipt to the creditor.
These receipts were the earlier bank notes. The second stage in the development of
banking thus was the issue of bank notes.
The goldsmiths soon discovered that all the people who had deposited money
with them do not come to withdraw their funds in cash. They found that only a few
persons presented the receipts for encashment during a given period of time. They
also found that most of the money deposited with them was lying idle. At the same
time; they found that they were being constantly requested for loan on good security.
They thought it profitable to lend at least some of the money deposited with them to
the needy persons. This proved quite a profitable business for the_ goldsmiths. They
instead of charging safe keeping charges from the depositors began to give them
interest on the money deposited with them. This was the third stage in the
development of banking.
COMMERCIAL BANKING IN
PAKISTAN
Internship Report 5 Habib Bank Limited
It was very difficult for Pakistan to build up its own Banking system
immediately after independence without sufficient resources. Following the
announcement of the partition plan in June 1947 there was a haste movement on the
parts of banks to transfer their funds and accounts across the borders. The banks
having their registered offices in Pakistan were transferred to India. In an effort to
bring about the collapse of the new state by the persecuting an international policy of
withdrawal, the Indian bank offices closed quickly. Those banks, which stayed, were
considering the winding up of their business. By 30th June 1948 the number of
schedule banks in Pakistan declined from mere scratch.
Today there are more than 7000 branches of commercial banks along with an
established network of supplementary financial institutions. All this development in
the banking sector is the result of untiring efforts of four decades.
a) Pre-Nationalization Era
b) Nationalization Era
c) Post Nationalization Era
There were only two Muslim banks in Indo Pak before partition; they were
.Habib Bank Ltd. (est. in 1941 at Bombay) & Australia Bank Ltd. (est. In 1944 at
Lahore). All other banks, at that time, were either owned by Hindus or Foreigners.
At the time of partition there were 631 bank branches in area which came
under Pakistani control. But due to blood shed and violence at large scale, mostly
branches were closed and the disparity can be assessed from the fact that on July
1948 there were 195 branches with deposits of Rs.88 crore (880 million) only. Also a
Internship Report 6 Habib Bank Limited
factor lagging in Pakistani industry was a central bank of its own, by that time
Reserve Bank of India was acting as central bank for both countries and same
currency notes were used in both territories. But Reserve Bank of India was biased
and Set down Pakistan on many occasions such as the issue of funds transfer etc.
In this period drastic steps were taken in government sector for the
improvement of overall position. The private sector also responded to these changes
and some very positive changes were observed. Some of the steps taken by the
government in this regard were as under:
B) NATIONALIZATION PERIOD
On January 01, 1974 all Pakistani banks were nationalized through
Nationalization Act 1974. Under this law all Pakistani banks became a public
property. All small banks were merged in bigger banks to create 5 major Pakistani
banks Pakistani banks. These banks were to control by Pakistan Banking Council.
There are still controversies about this act of government as whether it contributed in
success of failure of banks. However the major changes after nationalization were as
follows:
However the effect of expansion was enormous and it can also be depicted
with the help of table 2 which shows the deposit & branch positions of different
nationalized banks.
After these changes a large number of private and foreign banks started their
operations in Pakistan and the present status can be seen from the following figure:
product offerings and services in Retail Banking. HBL has the largest Corporate
Banking portfolio in Pakistan with an active Investment Banking arm. SME and
Agriculture lending programmes and banking services are offered in urban and rural
centers. In the UK and GCC, HBL focuses on trade finance and remittances for the
South Asian Diaspora in addition to basic banking facilities. HBL has always been a
bank and a brand for the masses, with a history that is inextricably linked with the
history of Pakistan itself. As it continues to grow, both locally and abroad, it strives to
embody its brand personality: honest, approachable, and inclusive. HBL is currently
rated AA+ (Long term) and A1+ (Short term)*. It is the first Pakistani bank to raise
Tier II Capital from external sources.
Habib Bank Limited was established by Mr. Ismail Habib (Late) on August 25,
1942 at Bombay. It was the first Muslim Bank of the sub-continent. It was
established with a paid up capital of Rs. 2.5 million. At an early stage, the number of
its branches was only 12.
HBL established operations in Pakistan in 1947 and moved its head office to
Karachi. Our first international branch was established in Colombo, Sri Lanka in
1951 and Habib Bank Plaza was built in 1972 to commemorate the bank’s 25th
Anniversary. With a domestic market share of over 40%, HBL was nationalized in
Internship Report 10 Habib Bank Limited
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.
Vision
Enabling people to advance with confidence and success.
Mission
To make our customers prosper, our staff excel and create value for shareholders.
Values
Internship Report 11 Habib Bank Limited
Our values are the fundamental principles that define our culture and are brought to
life in our attitude and behaviors. It is these values that make us unique and
unmistakable. Our values are defined below:
Excellence
This is at the core of everything we do. The markets in which we operate are
becoming increasingly competitive, giving our customers an abundance of choice.
Only through being the very best – in terms of the service we offer, our products and
premises - can we hope to be successful and grow.
Integrity
We are the leading bank in Pakistan and our success depends upon trust. Our
customers - and society in general – expect us to possess and steadfastly adhere to
high moral principles and professional standards.
Customer Focus
We understand fully the needs of our customers and adapt our products and
services to meet these. We always strive to put the satisfaction of our customers
first.
Meritocracy
We believe in giving opportunities and advantages to our employees on the basis of
their ability. We believe in rewarding achievement and in providing first-class career
opportunities for all.
Progressiveness
We believe in the advancement of society through the adoption of enlightened
working practices, innovative new products and processes and a spirit of enterprise.
Board of Directors
Internship Report 12 Habib Bank Limited
NAME DESIGNATION
MANAGEMENT
Internship Report 13 Habib Bank Limited
Management Hierarchy
PRESIDENT
BOARD OF DIRECTOR
Internship Report 14 Habib Bank Limited
REGIONAL CHIEF
ZONAL CHIEF
BRANCH MANAGERS
DESIGNATIONS
President
Officers Grade 1
Officer Grade II
Cashier
Clerks
Peon
Corporate Information
Head Office
HBL Plaza
I. I. Chundrigar Road
Karachi-75650, Pakistan.
Tel : +92 (21) 2418000 [50 lines]
Fax : +92 (21) 9217511
Registered Office
4th Floor, Habib Bank Tower
Jinnah Avenue
Islamabad, Pakistan.
Internship Report 16 Habib Bank Limited
Registrars
THK Associates (Pvt.) Ltd.
Ground Floor, State Life Bldg No. 3
Dr. Ziauddin Ahmed Road
Karachi, Pakistan.
Tel: +92 (21) 111-000-322
Websites
Corporate website:
www.hbl.com
Treasury website:
www.hblgtr.com.pk
Ebank (internet banking):
www.hblebank.com
Auditors
KPMG Taseer Hadi & Co.
Chartered Accountants
Global location
Internship Report 17 Habib Bank Limited
Global locations
Internship Report 18 Habib Bank Limited
Swot analysis
Strengths
HABIB BANK is a well established bank enjoying long history of over 65 years
of experience and profitable operation.
HBL is the largest private bank in Pakistan now and people trust is very high.
It has the largest branch network among private banks of Pakistan.
HBL has been very effective in controlling costs as it successfully restructured
itself after its privatization. During this process more than 1,600 employees
Internship Report 19 Habib Bank Limited
were relieved under a golden handshake scheme and 110 branches were
closed.
Excellent branches appearance gives an edge to HBL over other banks. The
branches are well furnished even in less developed areas where other banks’
branches give a poor view.
HBL has the ability to bring innovative products and services like personalized
service, electronic funds Transfer, sophisticated financial products such as
electronic banking, auto-teller machines and evening banking.
The Bank’s Rupee Traveler Cheques have been market leaders for the past
six years.
HBL’s car to car financing scheme is unique in auto loan segment.
Habib bank is an internationally recognized name in banking services and
products.
HBL has forged strategic alliances with international banks for expanding its
network further, both locally and internationally.
Weaknesses
process.
Employees at branch level are not properly motivated to work by heart. They
Most of the employees lack managerial training as they are not properly
Grade-I, II or III positions having hardly bachelor degrees. This type of senior
decision making.
Though HBL is second largest bank in Pakistan, yet the fact remains that it is
not market leader as NBP. Its total assets are always less than NBP total
assets.
Opportunities
E-Banking
Generally speaking, three factors, quickness, easiness and cheapness have become
the catchwords for the competitiveness and usefulness of all the business
operations. Particularly it is commonplace today to say that banking is undergoing a
radical transformation. The symptoms are new products, new players, new channels
etc. This transformation is taking place across all sectors of the banking industry.
Internship Report 21 Habib Bank Limited
That is why Habib bank urgently needs to improve their ability, to think strategically
about IT investments. Only those banks that use their technology resources
effectively have the opportunity to secure real competitive advantage in this fast-
changing industry through real product or service differentiation.
Of late markup rates have increased considerably. Present rates are 4% above
KIBOR i.e. 16% appx. High markup rate has decreased the interest of people in
loaning from from banks. Habib bank can increase its income by offering loan at
lower interest rate than other banks.
ONLINE BANKING
It is doing banking transactions through our home P.C. The banks that do business
through net have Websites. The customer clicks into the Website and gets the
history of the bank. Then he can demand the necessary application form through the
net. He fills in the form and passes it on to the bank. The Online banking is fast
gaining ground in Pakistan. Some software companies are also offering network-
banking facilities. So Habib bank should focus heavily on providing online banking
faculties to its customers. Currently it is doing the same.
Large corporate customers can log into the bank's database and have access to
their accounts/transactions from their business houses. This facility has still not been
started for customers in Pakistan. So Habib can focus on that.
AUTOMATIC TELLER MACHINE (ATM)
This system is known as "Any Time Money" because it allows customers who have
an ATM card to withdraw money at any time from the bank without interacting with
human teller. Since the ATM machine can be installed anywhere like petrol bunks,
markets, railway stations etc, and can well be linked to the main computer. It allows
customers to transact with the bank 24 hours a day and 365 days a year. They allow
Internship Report 22 Habib Bank Limited
the customers to transfer money to and from accounts to view account information,
to receive cash. It can also be used to deposit cheques and cash into the
accounts. No bank in Pakistan is offering this service currently. So an opportunity
exists for Habib bank to differentiate.
Rate of return
The range and choice of products available & offered by the commercial banks is
limited. Rates of Return / Profits on Deposits are so low and unattractive that very
limited options are available to the depositors. They do not match the current rate of
inflation. HBL differentiate and increase it’s deposit by offering attractive rate of
return on deposits.
Threats
Threat can be defined as a change in external environment which if not met with
proper strategies will result in loss of revenues, market share, or income. In the
context of HBL’s external environment, the following potential threats exist:
Other private commercial bank with sound profitability is also a threat to HBL
denominations.
Internship Report 23 Habib Bank Limited
For the last of 2 to 3 years, Pakistan is facing economic and political instability
Afghan war and Iraq war has a deep effect on the economy of Pakistan, which
Increased regulations from State Bank of Pakistan may affect its business.
Operations of HBL
A. banking departments of habib
bank
Various departments are working in all the branches of Habib bank to facilitate the
customers. Following are the banking departments functioning in HBL AUSC branch
Peshawar.
2. Cash department.
3. Credit department.
4. Lockers department.
6. I.T department.
Accounts opening
department
Basic function of the accounts department is to open new account and facilitate the
customer for the account opening purpose. There are certain formalities which are to
be observed for opening of an account with a Bank. These formalities in brief are as
under:
FORMAL APPLICATION:
Copy of CNIC
Internship Report 25 Habib Bank Limited
SPECIMEN SIGNATURE:
When the Banker is satisfied about the integrity of the customer, he agrees to open
the account. The Banker obtains the specimen signatures of the customer on the
signature book or on card.
After that officer has to post the new account on computer system for further
processing. During the process customer id and account number is generated. New
account remains active for one day after that it is blocked by the head office until
CNIC of the customer is verified from NADRA.
After the CNIC verification account opening officer has to issue a cheque book to
customer so that he can be able to make withdrawal from his account. Now a day in
Habib bank cheque book issuing process is centralized that take 06 days to
complete.
SECRECY:
Types of accounts:
Individual accounts:
Internship Report 26 Habib Bank Limited
Individual accounts are the most common personal investment accounts. Opened by
single person.
JOIN ACCOUNT:
A joint account occurs when two or more than two customers have one account. The
parties to a joint account are considered in law as they are one person.
Business accounts:
Business accounts can be opened by institutions, companies, partnerships, trusts
and non-profit organizations. Following documents are required.
Pay-in-Slip
When money is to be deposited in the bank the pay in slip is to be filled. The object
of this book is to provide the customer with the bank’s acknowledgement for receipt
of money to be credited his account.
Cheque Book
A chequebook contains a number of cheques, which is given to a customer upon
written request and after marking the payment for the chequebook. It enables a
customer to make withdrawal from his account or make payment to various parties
by issue of cheques.
GROUNDS FOR CLOSING THE CUSTOMER’S ACCOUNT:
The banker may close the account of the customer due to following reasons:
i. Notice by a Customer
ii. Death of a Customer
iii. Customer’s Insanity
iv. By order of court
I) NOTICE BY CUSTOMER
The banker closes the account of the customer on the application of the customer for
closing his account.
Internship Report 27 Habib Bank Limited
Cash department
C
ash Department is very sensitive and risky part of the bank. Very
causations and competent personnel are needed for the Job. HBL has
really such a diligent staff with appreciable competencies and will to do
work. Main function of cash department is to deal with cash payment and cash
receipts.
Cash deposit procedure:
The customer fills the pay slip. The cashier receives the pay slip and cash. He
counts the cash and makes the detail of the notes at the back of the pay slip. Then
he compares the detail with amount written on slip and signs the pay Slip. Then he
credits the entries in the computer by serial No, account type, Account number and
amount. Puts the stamp of the “cash Received” on the payment slip. The first portion
is for bank record while other one is given to the customer.
Internship Report 28 Habib Bank Limited
CREDIT DEPARTMENT
1. Introduction
2. Securities.
3. Types of credits
INTRODUCTION
The function of credit department is to lend money in the form of clean advances,
against promissory notes, as well as secured advances against tangible and
marketable securities. The bankers prefer such securities that do not run the risk of
general depreciation due to market fluctuations.
Common Securities for the banker’s advances are as under:-
SECURITIES
1. Guarantees
Internship Report 29 Habib Bank Limited
When an application for advance cannot offer any tangible security, the banker may
rely on personal guarantees to protect himself against loss on advances or overdraft
to the applicant.
2. Mortgage
A mortgage is the transfer of an interest in specific immovable property for the
purpose of security the payment of money advanced or to be advanced by way of
loan, and existing or future debt, or the performance of an engagement which may
rise to a pecuniary liability. The transfer is called a mortgagor, the transferee a
mortgage.
3. Hypothecation
When property in the shape of goods is charged as security for a loan form the bank
the ownership and possession is left with the borrower, the goods are said to be
Hypothecated The essence of hypothecation is that neither the property in the goods
not the possession of them are possession is left with the borrower, the goods are
said to be Hypothecated the essence of hypothecation is that neither the property in
the goods not the possession of them are possessed by the lender, but the security
is granted by means of letter of hypothecation, which usually provides for a banker’s
charge on the hypothecation goods.
4. Pledge
In a pledge the ownership remains with pledge, but the pledge has the exclusive
possession of property until the advance is repaid in full. While in case of the default
the pledge has the power of sale after giving due notice.
5. Promissory Note
Sometimes promissory note is also accepted as a security, "A promissory note is an
instruments in writing containing an unconditional undertaking signed by the maker,
to pay on demand or at a fixed or determinable future time a certain sum of money
only, to or to the order of certain persons, or to the bearer or the instrument." A
promissory note is incomplete until has been delivered to payee or the bearer.
Moreover, the sum promised in a promissory note may be made by two or more
makers who may be liable there on jointly and severally.
TYPES OF ADVANCES
The advances which are given by Habib Bank Limited are as under:-
Internship Report 30 Habib Bank Limited
TYPES OF ADVANCES
a. Demand Finance (Packing Credit)
Scheme introduced by State Bank of Pakistan for exporter of carpet, surgical
instruments, at zero percent rate of interest. While banks provides at
concessional rate of interest.
b. Loan ordinary (Demand Finance to Students)
Qarz-e-Hasana Scheme Loans are allowed to the students, teachers without
any interest or mark up with the recommendations of the MPA or MNA.
c. Demand Finance (Staff)
Loans are offered to the staff of the following four categories.
i. House Building Loans against mortgage of property.
ii. Loan for purchasing vehicles.
iii. Loan equivalent to month’s salary.
Under such type of overdraft the bank pay upon the personal security of the
customer’s mentioned on the customer’s account.
II. Secured
Under this type of overdraft the bank allows his customer to withdraw more
than his deposits after giving security against the amount overdrawn.
ii. Deposits
SMALL LOANS
Loan is allowed to contractors clearing and forwarding agents.
3. FINANCE AGAINST THE FOREIGN BILLS (FAFB)
The advance facility is allowed both to local foreign bills and is classified as
under:-
i. FAFB (Local) advance against Railway receipts and truck receipt, a company
with bills of exchange and invoices, are given under this head.
ii. FAFB (Foreign) advances against foreign bill, covering bills of exchange bills
of lading airway bills of exchange bills of lading airways bills etc.
4. AGRICULTURE LOANS
Loans to the farmers with holding up to 25 acres for meeting their short terms,
medium and long terms Agricultural production requirements, such as:
i. Agricultural inputs
ii. Tube wells
iii. Live Stock Framing
iv. Land improvement
5. INDUSTRIAL LOANS
Besides the short-term loans which play a part in working capital medium and long-
term loans are also given to industrial sector for purchase of machinery and other
capital nature goods.
NIFT is a joint venture between a consortium of six major banks and private
sector. It is responsible for the establishment and management of automated
clearinghouse facilities in Pakistan. NIFT is proactively involved in the modernization
of payment systems in Pakistan.
4. To accept transfer deliveries and clearing cheques from the customer of the
branch and to arrange for their collection.
5. To arrange the payment of cheque drawn on the branch and given for
collection to any other branch of Habib Bank of Pakistan or any other
members, or sub-members of the local clearing area..
One portion of the perforated pay in slip is handed over to the depositor and
the portion becomes the regular portion of a credit voucher
c. Clearing Cheques
Clearing cheques are those cheques in which the payee (Person who deposit
cheques for collection) and the drawer of a cheque maintain the account with
different banks.
Internship Report 33 Habib Bank Limited
These clearing instruments are handed over to NIFT after posting necessary
stamps and checking them for any errors. Then further process of clearing is carried
on the behalf of NIFT.
Forex Department
International trade is growing and with the development of international trade
it has become more imperative. For countries to devote more and more attention to
the complicated mechanism of Foreign Exchange. It is more important in case of
developing countries. It is need of time, that a country should conserve its foreign
exchange resources.
iii. The principles on which the people of world settle their debts to one another.
Letter of Credit:
It is a negotiable instrument through which the bank of the exporter deals with bank
of the importer through the guarantee of a bank. There are different parties involved
in the L/C, e-g importer, exporter, importer bank, exporter bank, and advisory bank.
LC involves banking channels in foreign trade to mitigate risk.
The procedure of opening of an L/C is as follow
The first thing is the Performa invoice. The Performa invoice is a document
(say a clip), which is, sends by the exporter to the importer and includes the
information like. Descriptions of goods, what type of goods you are needed
and what are the quality, rate and originating country etc.
Before to open a L/C the bank also consider that the goods which the importer
is importing is allowed by govt. of Pakistan or not. Because the importer is not
allowed to import that goods which are prohibited by the Govt. of Pakistan.
The importer is asked to show the membership certificate of any chamber of
commerce and industry affiliated with the Pakistan federation of chamber of
commerce and industry.
Internship Report 34 Habib Bank Limited
Fill the import form of the govt. of Pakistan, which is the proof of this that there
is no objection on the goods, which the customer is importing.
What type of goods you are needed and what are the quality, rate and
originating country etc.
Necessary Documents required for L/C:
NTN
Tax Authority registration certificate
Chamber of Association’s trade certificate
Type of Business
NIC
Margin
Registration No.
Application for L/C
On providing these documents the importer will be given the L/C form named as
IB-8.
Contents of IB 8
1. Request for LC
2. Rate
3. Importer and Exporter’s particulars
4. Amount
5. Terms
6. Partial Shipment (Allowed, not allowed)
7. Transshipment (Allowed, Not Allowed)
8. Port of Loading and destination
9. Payment Mode
I. Sight
On seeing the documents the importer has to pay.
II. At Sight and Negotiation:
It means that exporter will submit his documents with the bank and immediately asks
for payment.
III. Acceptance:
On showing the documents to the importer, the bank asks him to accept that he will
pay within 30, 60, 90, 120, 180 etc days.
Internship Report 35 Habib Bank Limited
Charges:
Payment Mode:
In foreign trade payment modes are
1) Advance Payment: Importer makes payment before delivery of goods.
2) Open A/C: Importer makes payment after receiving the goods.
Retail Banking
For
Individual Customers
Deposit Accounts
Current Accounts
Make unlimited transactions while maintaining a low minimum balance every month.
HBL is currently offering three types of accounts in current account category. Their
detail and name is as under.
1. HBL BusinessValueAccount
2. Current Account
3. Basic Banking Account (BBA)
HBL BusinessValueAccount
Unique transactional account for Businessmen
Up to 5.35%* profit per annum
Internship Report 37 Habib Bank Limited
Current Account
Minimum balance of Rs. 5,000
Unlimited transactions
Non-profit bearing
HBL DebitCard and Inter Branch Transaction System (IBTS) facilities
Funds transfer to any bank through HBL PhoneBanking
Savings accounts
Avail the flexibility of making transactions while earning profit on daily/monthly basis.
HBL is currently offering five types of accounts in savings account category. Their
detail and name is as under.
PLS-Savings Account
5.06% profit per annum*
Profit paid bi-annually
HBL DebitCard and Inter Branch Transaction System (IBTS) facilities
Funds transfer to any bank through HBL PhoneBanking
Minimum balance of Rs. 20,000
Unlimited transactions
Terms Accounts
Invest your savings in HBL term deposits for a fixed duration and earn profit while
keeping your savings secure. HBL is currently offering one type of account in terms
account category. Their detail and name is as under.
1. HBL Advantage Account
FC-SB
Savings Account offered in 3 currencies, USD (US dollar), EUR (Euros) and
GBP (UK pound)
Tiered product, with rates depending on choice of currency
To earn profit, minimum balance in USD, EUR and GBP is 1,000
Interest is payable on a quarterly basis
Internship Report 40 Habib Bank Limited
*NOTE: All the rate and terms and condition are revised by HBL after every six
months periods. These rates are only applicable for period 01.07.09 to 31.12.09.
Further detail of terms and conditions about profit and rates is given in annex “B”.
Features
Choice of used, new local/imported and reconditioned imported car.
Repayment options ranging Upto 7 years.
Upto 85% of financing for the car of your choice.
Insurance at all times for complete peace of mind and security.
Round the clock support available through HBL PhoneBanking; you can place
your requests and queries, track the status of your repayment/loan account
and avail other value-added services through HBL PhoneBanking.
Eligibility Criteria
How to apply
Just visit any HBL branch or Habib Bank Auto Finance Centre for details and
application.
Submit complete set of application without any charges to the branch or the
Auto Center.
Sign the necessary documents on approval of the application
Payment is released within 24 hours of the submission of post-dated cheques
and initial payment after approval of the request.
Documentation
Salaried Individuals
Features
Pay only for what you use
When customer lease a car under HBL CarToCar, he only pay for that part of the
car’s value that he use during the lease term. The car’s residual value (forecasted for
the end of the specific lease term) is agreed with him at the start of the lease term.
This amount is deducted from the car price thus lowering the finance amount. This
finance amount is based only on a part of the car’s value and not the full value of the
car. Therefore, HBL CarToCar offers very low installments as compared to any
conventional financing.
Upgrade of lifestyle
HBL gives customer the guarantee that if he wishes to return the car to HBL at the
end of the lease term, he will not have to pay off the car’s residual value. Instead,
HBL will directly settle this outstanding liability for customer under the buy back
Internship Report 43 Habib Bank Limited
guarantee. Hence, he can upgrade to a new car as frequently as two years without
any complication and hassle.
Affordability
With HBL CarToCar, customer only has to pay the difference between the car price
and the pre-agreed residual value to the bank. As a result, the monthly installment
may even be 40% to 50% less than that of conventional financing.
Flexibility
HBL CarToCar offers customers several choices at the end of the lease term:
• Upgrade - Simply return the car to HBL and drive a new one home
• Walk away - Return the car to HBL and end the lease
• Buy - Keep the same car. Just make a one-time settlement of the car’s residual
value to HBL or pay the same in easy installments over a specified extended period
of time
• Sell - Enjoy the gain from selling off the car at a higher price in the market than
what you ay HBL as the residual value
Eligibility Criteria
Documentation
Salaried Individuals
Benefits
Buy now, pay later
Buy what customer want, when he want and pay for it later. A credit card statement
will be sent to him every month with details of all his purchases. He will have 21
credit free days to make the payment from the statement date. Customer should pay
at least 3 days in advance if he makes your payment by cheques to allow enough
time for clearance.
displaying the Visa/Plus logo. Withdraw cash up to the available cash advance limit
on his HBL Credit Card for a charge applicable from the withdrawal date.
Balance transfer facility
Card holder can pay off balances he owes to other banks through his HBL Credit
Card at a lower service charge.
Security
Card holder cannot lose cash if he doesn’t carry it! In the event that his card gets
stolen/lost, he should call HBL PhoneBanking to have his card blocked immediately.
Features
No Interest
HBL Visa Debit Card is the perfect way of paying for purchases as it gives access to
the exact amount of money a customer needed, as and when he needs it. There is
no interest or credit on payments because he spends from the money available in his
personal HBL Account.
Internship Report 47 Habib Bank Limited
Spending Limits
The daily spending limit at shops and outlets on HBL Visa Debit Card is Rs. 100,000.
(These figures are subject to the balance available in account).
HBL Visa Debit Card is accepted at over 20 million Visa merchants worldwide,
including over 10,000 merchants in Pakistan. As an ATM card it is accepted at more
than 1,000 1-Link & M-Net ATMs in Pakistan and 864,000 Visa ATMs worldwide. No
matter where card holder is, with the HBL Visa Debit Card, HBL is always with him.
No Liability
In case of a lost or stolen card, card holders are protected against fraudulent
transactions made on their card after they report the incident.
Features
T-PIN Generation
Customer’s TPIN (Telephone Personal Identification Number) is generated the first
time he calls and he can use it as your password for verification purposes, self-
service banking through IVR and additional services through HBL’s PhoneBanking
Officers. Customer can change his TPIN anytime he like.
Get details of transactions from the last 6 months on each of the accounts
listed on his subscription form
Change and/or modify his contact details
Transfer funds between his own accounts (as listed in the subscription form)
or from his account to a third party account (as listed in the Third Party
Authorization Form)
Transfer funds from his own account to an account in another bank under the
1-Link network (Inter Bank Funds Transfer)
Generate his own choice of ATM Pin without filling a request at your branch
Inquire about HBL’s product offerings
Lodge a complaint in case of any inconvenience
Inquire about the daily accounts related profit rates and currency exchange
rates
Request a number of physical instruments and/or branch banking related
services that he might require, including:
Pay Order
Demand Draft
Statement
Balance Certificate
Cheque Book
HBL PhoneBanking services for HBL CarToCar and Car Loan customers
HBL CarToCar and HBL CarLoan customers can enjoy the following services
through HBL PhoneBanking:
Balance Inquiry
Last 5-10 Transactions
Statement Generation (Email and Fax)
Account Maintenance
Assistance in case of Car Theft/Damage
Hbl bancassurance
HBL and New Jubilee Life Insurance Company Limited (NJLI) introduce Amaan
(Retirement Plan) and Tabeer (Child Education & Marriage). These products have
been designed keeping HBL’s customer base as the focus and will provide life
insurance along with an investment option.
Internship Report 50 Habib Bank Limited
Lockers
Lockers are available in many of the HBL branches in different sizes like small,
medium and large; some branches also have extra large and cubical lockers. Except
rural areas because of security reasons.
Only the account holders can avail the facility of lockers. The annual rent will be
directly debited from their respected accounts at the start of the year.
Charges
Key deposit is refundable at the time handing over the locker to bank. For the staff of
HBL key deposit is not required and also the annual rent is very low for them.
designed to help him with his banking needs. Their RMs have the expertise
customer need to create tailored financial solutions catering to the specific
requirements of his business. Whether establishing a new venture or expanding an
existing business, HBL’s team understands customer’s banking needs and works
closely with him to realize his goals.
Services
HBL provides the following services to meet customers funding requirements:
Working Capital Finance, including Overdraft, FE Loans, etc.
Pre and Post Shipment Export Financing (PKR and USD based)
Import Financing (PKR and USD based)
LMM Funding
Receivable Discounting
Islamic Banking facilities
Cash Management Services
Trade Services including Letter of Credit, Letter of Guarantee and Standby
Letter of Credit, etc.
Services
HBL offers financing for the following:
Working Capital
Procurement of Inventory
Receivables
Procurement of Machinery
Expansion of production facilities
Import of raw materials
Exports
Guarantees
Products
HBL ZaraiBanking enables farmers to invest in premier quality seeds, fertilizers,
pesticides, agricultural implements and non-farm setups through its various product
programs.
Crop Inputs
Crop specific finance for purchase of Agriculture inputs such as seed, fertilizer,
pesticide and other related inputs.
Farm Implements
Finance available for purchase of farm implements & machinery like combined
harvester, sprayers, ploughs, tube wells and other crop-related tools/implements.
Tractors/Agricultural Vehicles
Finance available to individual farmers, self-employed tractor operators, providing
the option to select vehicles from a range of different manufacturers.
Livestock
Finance available for feed, medicines, raw material, raising charges and other
related activities.
Poultry
Finance available for all poultry related activities including poultry farm
construction/equipment, hatchery plant & machinery, poultry feed, poultry medicines,
composite feed production, poultry processing and other related activities.
Fish Farming
Finance available for inland fish farms as well as deep-sea fishing. This includes
procurement of boat, fish locating equipment, nets & ropes, ice maker, fish farm
water solution, hatchery construction/equipment, purchase of medicines / feed and
other related activities.
Group Lending
Joint finance facility for a group of farmers with small land holdings for working
capital requirement.
Internship Report 55 Habib Bank Limited
NOTE: These finances may be availed under Demand Finance or Running Finance
categories. Demand Finance is usually available for short term financing needs while
Running Finance is available on the basis of revolving limit.
Islamic banking
Islamic Banking is a growing market segment that offers attractive opportunities to
potential and existing customers. At HBL, Islamic Banking offers Shariah compliant
products and services to meet the short and long term requirements of business,
trade and industry.
Shariah Compliance
HBL’s Islamic Banking products are in strict compliance with the tenets of Shariah
and bear Shariah Compliance Certification from an independent Shariah Advisor.
Their Shariah Advisor has in depth experience in Shariah rulings (Fatawa) and
teachings at different forums with qualifications of Dars-e-Nizami, M.A and L.L.B.
HBL also have a Shariah Scholar, as member of their Shariah Supervisory
Committee to ensure a sound Shariah Compliance mechanism, giving prompt
responses to customer’s needs and access to Shariah knowledge.
Diminishing Musharaka
Medium to long term facility for vehicles, plant and machinery on joint ownership
basis.
Murabaha
Local and Import facilities for purchase of raw materials, semi finished and finished
goods, stores or spares.
Trade Services
Internship Report 56 Habib Bank Limited
Letter of Credit Facility, Collection of Foreign Bills, Collection of Local Bills, Letter of
Guarantees.
Customers are welcome to visit their Islamic Banking branch for the following
services:
Current Account (PKR, USD, EURO, POUND STERLING)
Basic Banking Account
ATM/Debit Card Facility
Foreign / Inland Remittances
Utility Bills Collection
E-banking / Internet Banking Services
24/7 Phone Banking Services
Personalized customer friendly services
Saving Deposits will be introduced soon
Branch
Address
Finlay House
Ground Floor
I.I Chundrigar Road
Karachi
Contact details:
021-32429304, 32429431&32
Fax
021-32429307
E-mail
hbl.5000@hbl.com
Learning as an intern
As every body knows that "Knowledge without practice is sterile "In order to give
vent to this idea an Internship program of six to eight weeks has been arranged in
different esteemed organizations during BSIT. In this regard on 24th of Nov 2009, I
was asked by Mr. Ronaq Zaman (VP & RGM in HBL RHQ Peshawar) to go to Habib
Internship Report 57 Habib Bank Limited
Bank AUSC branch to start an internship of eight weeks there. During this period I
got a chance to work and learn in following departments of the bank:
Foreign exchange department
Bills clearing department
Credit department
I.T department
Cash department
Accounts, ATM and Lockers department
Because State Bank of Pakistan only allow account to account transfer of funds
abroad through banks. And I came to know about the process and information
required to fill the form. I also came know about the process of issuing foreign
currency account’s cheque book to customers. During the week I learn many things
about the mechanism of foreign trade.
Then I spent my time in lockers department. I took all the information about the
terms and conditions of allotting and operating a locker, types of locker like small,
medium and large, charges of using lockers, key deposit (refundable), filling
application forms, insurance amount for specific size of locker and etc. I also came
to know about the process of operating locker by the customer, how to open the
locker with the help of two keys.
1 key in the hand of bank officer (anticlockwise)
2nd key in the hand of customer (clockwise)
Customer is allowed to operate the locker in full privacy. Only the customer himself
or other person authorized by him can operate the locker. After that bank officer has
to take the signature of the customers on attendance register maintained for this
purpose.
Then my duty was in Accounts department. I came to know the procedure for filling
the form to open an account, different types of stamps required and about signature
of the staff. Documents required to be attached with the form.
Copy of CNIC
Utility bill
Provisional receipt
KYC (Know Your Customer)
And how to post an account on system after filling the form. Then I came to know
about Saving accounts and different types of accounts in saving category and terms
and conditions of each type.
1. HBL Value Account
2. PLS-Savings Account
3. Remittance Munafa Plus Savings Account
4. Daily Munafa Account
5. Daily Progressive Account
Financial performance
Financial Statements
Ratio analysis
The financial results for the first quarter of 2009
Financial highlights 2008
Achievements
changes in the financial condition of business. It provides data fro inter firm
comparison. Ratios highlight the factors associated with successful and unsuccessful
firm. They also reveal strong firms and weak firms, over- valued and under valued
firms. It helps in Planning and forecasting. Ratios can assist management, in its
basic functions of forecasting, planning, co-ordination, control and communication.
Ratio analysis also makes possible comparison of the performance of different
divisions of the firm. The ratios are helpful in decision about their efficiency of
otherwise in the past and likely performance in future. Ratios also help in Investment
decisions in the investors and lending decisions in the case of bankers etc.
Following are the main types of ratios that I am going to calculate in this report to
compare and highlight the financial performance of Habib bank in 2009 with 2008.
Return on Assets
Loan to Deposit
2009 2008
Return on Equity Ratio
Return on equity
20.76 15.94
Interpretation:
The past two years data shows an improvement in the return on equity which is a
positive sign. The Bank should have to continue its policies. By observing the
audited account I found that this improvement is due to increase in the Net profit
which is good sign.
2009 2008
Return on Assets
Return on Assets
2.06 1.45
Internship Report 68 Habib Bank Limited
2009 2008
Loan to Assets ratio
Loans
Assets
Advances
456,355,507 382,172,734
Interpretation:
Return on assets ratio shows an improving trend. This ratio shows that the both the
Net profit and Total Assets has improved in 2009 than 2008. But net profit has
increased more rapidly.
Interpretation:
Loan to Asset Ratio is showing increasing trend in 2009. This is because advances
are increasing more rapidly than assets of the bank.
Interpretation:
Net profit /
Interest Income X 100
33,250,937
Interest Income 43,970,884
Net profit Ratio is giving upward trend. This trend is observed due to increase in Net
profit but on the other hand the expenses decreases which shows an efficient
management.
2009 2008
Loan to Deposit
Loans/Deposits*100
Advances
456,355,507 382,172,734
Interpretation:
Loans to deposit ratio show an increasing trend in 2009 as compare to 2008. This
trend is observed as the advances and deposits both are increasing but advances
are increasing more rapidly than deposits.
(Rs. In 000)
Profit after tax 3,384,623
Share of profit attributable to minority interest 45,063
Profit attributable to shareholders 3,339,560
Earnings per share rupees (Basic & Diluted) 4.40
Financial highlights
2008
In the following diagram HBL’s balance sheet’s and income statement’s items for
2008 are compared with the items of 2007 and percentage growth is also calculated.
Internship Report 72 Habib Bank Limited
Achievements
HBL has been selected as ‘The Best Emerging Market Bank in Pakistan’ by Global
Finance Magazine.
Global Finance magazine has named the “Best Emerging Market Banks in Asia” in
an exclusive survey to be published in the May 2009 issue. Global Finance editors—
with input from industry analysts, corporate executives and banking consultants—
selected the best emerging market bank in the region and in 20 countries. Global
Finance reports on the international finance sector, covering topics such as
corporate finance, joint ventures and M&A, country profiles, capital markets, investor
relations, currencies, banking, risk management, custody, direct investment, and
money management. The magazine also holds several awards ceremonies
throughout the year to recognize the winning financial institutions and companies.
HBL received the 'Most Innovative GTFP (Global Trade Finance Program)' award.
The award was received at the International Finance Corporation Annual Trade
Internship Report 73 Habib Bank Limited
Conference in Paris where 126 issuing and 145 confirming multinational banks that
were present. Mr. Tariq Mateen - Head Financial Institutions Division, gave a
presentation showcasing the success of HBL in the global trade financing business.
The award was received by Mr. Mateen and Mr. Anwar Zaidi – Head Operations.
This recognition has raised our profile among a large forum of international banks
and paved way for IFC to increase our facility from USD 75 million to USD 100
million which has helped us in creating liquidity in our international network
In October 2008, HBL received the ‘Best Bank in Pakistan’ award in recognition for
its continuous efforts in providing world class products and services to customers.
Award was received by Mr. Sultan Ali Allana - Chairman. The ceremony in
Washington was also attended by Mr. Zakir Mehmood - President & CEO, Mr.
Nauman Dar - Head International Banking and Mr. Tariq Mateen - Head Financial
Institutions Division.
Internship Report 74 Habib Bank Limited
Mr. Sultan Ali Allana (right) receiving the award
Revelation Inc, a Pakistan based brand Development Company, carried out a poll
among marketing and advertising representatives, as well as a panel of judges to
pick the most active brand in Pakistan. HBL was received the “Buzziest Brand”
award in the Banking and Financial Institutions Category. HBL was competing with
strong consumer brands like Olpers and Coca Cola yet accomplished third position
among top five brands in the entire advertising industry. The award was received by
Mr. Aly Mustansir - Head Marketing and Brand Management. The first two places
were awarded to telco brands, Telenor and Mobilink.
Recommendations
As we seen from the previous analysis of the financial statements I have realized
that that Habib Bank is performing very well since its inception. It is quite difficult to
give suggestion to improve the banking conditions Habib Bank Limited. As we know
that nothing is perfect, there is always a room for improvement, so I will recommend
following suggestions for HBL:
Habib Bank is going towards mobile banking but the problem is that a
common client has no idea of its usage due to lack of marketing. I
think that a proper marketing programme must be launched for client’s
awareness.
Bank should help the society by providing interest free loans to the
Talented Students.
Bank should adopt such an induction plan that when a customer opens
his account with the bank he should be supplied with a booklet which
enables him to know the procedure of filing the cheques, pay-in-slip
etc. It will save a lot of time of the bank staff afterward during the
conduct of the account of that customer.
The attitude of the bankers with all of their customers is not the same;
they pay more attention and good service to some of the customers
and neglect a major portion of them. Some of the customers approach
to the bank officials and get their work done before others; it is not a
good practice. All the customers should be treated equally.
Glossary
A/C: account
Dr: debit
Cr: Credit
Bibliography
Material on these books, articles and websites has helped me a lot in preparation
this report
Books
Websites
www.hbl.com
Internship Report 78 Habib Bank Limited
www.habibbankltd.com
www.hblasset.com
www.investopedia.com/articles/07/banking.asp
wiki.answers.com/Q/Evolution_of_banking
Index
Annex A:
INTERNTSHIP CERTIFICATE
Annex B:
INDICATIVE RATES
Annex C:
Annex D:
REMITTANCES APPLICATION
Internship Report 79 Habib Bank Limited
Annex E:
Annex F:
DEPOSIT SLIP