Nimra Naseem

University of Gujrat

April 2010

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2
 Faculty of Management and Administrative
Sciences
University of Gujrat, HH Campus

Supervisors
Signature
Name
Designation

Chairman
Signature
Name

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Internship Certificate

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Executive summary

Banking sector owes a pivotal importance in the economy of any country

through its vibrant functions. This is the deep seated motivator that geared up
me to join any bank for internship. Moreover, the practice and familiarity
learned during this tenure would also attest very helpful and alleviating in the
awaiting proficient life.

Every student of MBA (Finance) in university of gujrat has an essential

requirement to do six to eight weeks internship in any of well reputed
organization. This report is an upshot of my six weeks internship in Habib
Bank Limited, kutchery chowk Branch, Wazirabad– Pakistan. Hbl possesses
an imperative importance in the banking sector of Pakistan. It always remains
the center of hustles in business activities. Although, a derisory period of six
weeks is not enough to learn the complex operations of Habib Bank Limited I
made industrious efforts to converse them comprehensively in this report.
Particularly, I have remunerated more accents on study of distinguishing
features and services of. I have made maximum venture to elaborate this
report with the material read, listened and observed.

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Acknowledgements
First I wish to thank Allah Almighty the most merciful and beneficent for
enabling me to reach here and use HIS resources to complete my internship. I
am also grateful to the department of administrative Sciences who gave us an
opportunity of internship to enhance our capabilities. This internship
programmed, is very much helpful for me because, I have learnt a lot by
applying theoretical knowledge in practical field. I am humbly thankful to all
the employees of HBL, Kutchery Chowk, Wazirabad, who guided me during
the course of internship. The behavior of all the department supervisors was
very good to me. They were always there to encourage me and they were
really cooperative to guide me the mechanism of all departments in which I
worked. In addition, I wish to say thanks to my parents to support me and
encourage me at every step.

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Seria Heading Page
lNo. number
(i) title 1
(ii) Submission page 2
(iii) Signature page 3
(iv) Internship letter 4
(v) Executive summary 5
(vi) Acknowledgement 6
(vii) Table of contents 7
Chapter 1 Table of
1.0 Introduction Contents
1.1 Background of study
1.2 Purpose
1.3 Scope
CHAPTER 1
1.4 Objective
1.0
1.5 Methodology
Introduction
Summary
Chapter 2 The core
2.0 Introduction objective of
2.1 Over all respective sectors in Pakistan preparing this
2.2 Role of organization in Pakistan report is to
2.3 Organization structure express my
2.4 Over all Functions of organization in learning
Pakistan During the 6
Summary weeks period
Chapter 3
3.0 Introduction of internship.
3.1 Brief history of organization This is the
3.1.2 Relationship of head office to the branch mirror of my
3.1.3 No of departments practical
3.1.4 Offices
exposure that
3.2 Current staff
is originated
3.2.1 Current staff of branch according to qualification
through time
and experience
3.2.2 Training received by no.of employees
spent in
3.2.3 Work load “Habib
3.2.4 Salary structure Bank
3.2.5 Promotion system Limited”.
3.2.6 Incentives and motivation
The report is
3.2.7 Responsibilities and Duties performed
about HBL its
3.3 Critical analysis of branch
3.3.1 Communication system
departments,
3.3.2 Hiring system profile and its
3.3.3 Morale of staff
3.3.4 Physical facilities 7
3.4 Performances
Summary
financial analysis. In the report, SWOT analysis is conducted so that I may
able to give an authenticated approach to problems and Dilemmas faced by the
Branch. Then I conducted analysis for problem identification and also gave
some recommendations to eliminate these problems and finally I concluded
this report. Management style of HBL is somewhat participative and its
culture is friendly and cooperative. I have learnt a lot of different fields, and
organizational behavior in real world phenomenon which gave me practical
knowledge of what I have studied theoretically in MBA.

1.1 Background of study

In general, an Internship is thought of as a program which "bridges the

gap" between the academic environment and a future work
environment. Students that participate in an Internship are generally
more confident and more qualified when seeking future employment.
1.2 Purpose
The purpose of my internship was
 To have intensive field experience
 To receive an introduction to an organization
 To apply what was learned during coursework to the
working world.
 To acquire good work habits.

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1.3 Scope
As an internee of HBL the focus of my study was on general banking
procedures in one of the branches of HBL. These operations include
remittance deposits advances and foreign exchange
Similarly different aspects of over all of HBL are also covered in this
report
1.4 Objective
Discuss thorough study of Habib bank limited
To test my aptitude for a particular career before permanent
commitments are made.
Mainly My objectives toward internship program are to broaden my
horizon by applying my accumulated knowledge and skills in
accomplishing my tasks. When entering in the real working
environment, I have developed my socializing skills with
organizational personnel.
Also, I can observe my strength and weakness while working.
Importantly, I can say that internship gained my experience and is a
firm step for my future career.

1.5 Methodology

The methodology reported for collection of data is primary as well as

secondary data. The biggest source of information is my personal observation while
working with staff and having discussion with them. Formally arranged interviews and
discussions also helped me in this regards.

(i)Primary data:

Personal observation

Interviews of staff

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(ii)Secondary data:

Manuals

Journals

Magazine

Annual reports

Internet

Summary
Chapter 1 was an introductory chapter that discussed the introduction
of study, background of study, purpose, scope and objective of the
study.

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 CHAPTER 2

2.0 Introduction

In this chapter I will throw light on the bank, about its history in
Pakisatn, types and brief details of HBL.

What is bank?
The term bank is being used for a long time yet it has no precise definition. The
basic reason is that banks perform not just one but many types of functions
originally. The banks were supposed to make short term loans to traders only. The
banks now not only make short term loans to the formers, traders, industrialists
etc. but also invest in a wide variety of long term earning assets. Commercial
banks also undertake and execute trust, deal in stocks shares and debentures, issue
guaranties and indemnities underwrite and sell new securities and deal in foreign
exchange etc. Banking industry acts as life blood of modern trade and commerce
acting as a bridge to provide a major source of financial intermediation.
Following are some definitions from different authors.

According to Dr. Hart “Banker or bank is a person or company carrying on

business of receiving money and collecting drafts for the customers subject to the
obligation of honoring cheque drawn upon them from time to time by customers
to the extends of the amounts available on their currents accounts”
In the words of G W Gilbert, “A banker is a dealer in capital or more properly a
dealer in money. He is an intermediate party between the borrower and lender. He
borrows one party and lends to the another”
Evolution of banking

The word 'Bank' is said to have been derived from the words Bancus or Banque or
Bank. This history of banking is traced to as early as 2000 B.C. The priests in
Greece used to keep money and valuables of people in temples. The origin of

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banking is also traced to early goldsmiths. They used to keep strong safes for
storing the money and valuables. 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 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 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 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.
Types of Banks
Central bank or state bank
Commercial bank
Exchange bank
Industrial bank
Agriculture bank

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 Investment bank
Saving bank
2.1 Over all respective sector in pakistan
The partition plan was announced on June 3, 1947 and August 15, 1949 was fixed
as the date on which independence was to take effect. It was decided that the
Reserve bank of India should continue to function in the dominion of Pakistan
until September 30, 1948 due to administrative and technical difficulties involved
in immediately establishing and operating a Central Bank. At the time of partition,
total number of banks in Pakistan were 38 out of these the commercial banks in
Pakistan were 2, which were Habib Bank Limited and Australia Bank of India.
The total deposits in Pakistani banks stood at Rs.880 million whereas the
advances were Rs.198 million. The Governor General of Pakistan, Muhammad
Ali Jinnah issued the order for the establishment of State Bank of Pakistan on 1st
of July 1948. Thus a landmark was made in the history of banking when the state
bank of Pakistan assumed full control of banking and currency in Pakistan. Up to
December 31, 1973, there were 14 Pakistan commercial banks that functioned all
over the country and in some foreign countries through a network of branches.
All these commercial banks were nationalized in January 1, 1974. The network of
bank branches now covers a very large segment of national economy. The
numbers of branches have increased appreciably and there now a branch of bank
is for every 3000 heads of population approximately. There is done reasonable
growth in deposits from the establishment of Pakistan.
The Government of Pakistan in the late 90‟s introducing the need for the
privatization of state owned banks and companies. The private sector has accepted
the challenge and most of the banks are privatized today. The State Bank of
Pakistan issues the shares of these periodically. Bank employees and other
common peoples can also purchase these shares and earn profit.

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Commercial banking
Today, in Pakistan, 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.
2.2 Role of HBL in Pakistan

HBL was the first commercial bank to be established in Pakistan in 1947. Over
the years, HBL has grown its branch network and became the largest private
sector bank with over 1,468 branches across the country and a customer base
exceeding five million relationships.
With a presence in 40 countries, subsidiaries in Hong Kong and UK, affiliates in
Nepal, Nigeria, Kenya and Kyrgyzstan and representative offices in Iran and
China, HBL is also the largest domestic multinational.
The Bank is expanding its presence in principal international markets including
UK, UAE, South and Central Asia, Africa and the Far East. Key areas of
operations encompass product offerings and services in Retail Banking. HBL has
the largest Corporate Banking portfolio in Pakistan with an active Investment
Banking arm. SME and Agriculture lending programs and banking services are
offered in urban and rural centers. In UK and GCC, HBL focuses on trade finance
and remittances for 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) by JCR-VIS.

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Branches:

HBL carries on its business through a wide network of branches. These branches
perform their functions under the supervision of local principal offices and head
office in Karachi. The bank has over 1468 branches in Pakistan in 216 cities and
40 overseas branches, with ATM Facility in more than 80 cities.

History of HBL

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. HBL first international branch was established in Colombo, Sri Lanka in
1951 and HABIB BANK PLAZA was built in 1972 to commemorate the bank’s
25th anniversary. With a domestic market share of over 40%, HBL was
nationalized in 1974 and it continued to dominate commercial banking sector with
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a major market share in inward foreign remittances (55%) and loans to small
industries, traders and farmers. International operations were expanded including
USA, Oman, Belgium, Singapore, Mauritius, Seychelles Maldives, Netherlands,
France, china & Hong Kong. It was HBL that introduced products such as Credit
Cards, ATMs, Travelers Cheques, etc., to the Pakistani market. Habib Bank caters
to the needs of millions with quality products & services. Today, Habib Bank is
truly the bank of the people, providing its customers convenience and satisfaction
all over the world. Habib Bank Plaza, the 1 Habib Bank Limited tallest building in
Pakistan, is the proud symbol of HBL‟s leadership in Pakistan‟s corporate arena.
.Share capital:

Issued Capital
The bank was setup with an issued capital of Rs.1.5 million.
Authorized Capital
Authorized capital of HBL in 13800 million rupees
Issued, Subscribed, and Paid-up Capital
Issued, subscribed and paid-up capital in year (6942.615 million*10)
Objectives:

Following are some main objective of HBL

 To earn profit for the Bank itself and maximize its shareholder‟s value.
 To provide solutions for multiple requirements of clients of diverse
financial nature

 To manage with the changing trends of the modern day financial market
 To be a diversified bank by offering all basic consumer services and
specialized services

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  Honest and ethical conduct, including ethical handling of actual or
apparent conflicts of interest between personal and professional
relationship.
 To provide employment opportunities to people
 To help in development and industrialization of the country

Symbol of HBL

This symbol of HBL contains Bismillah at top,

Sword under Bismillah
And then lion under sword
.This symbol depicts:
Bismillah …….. Islamic values and culture
Sword……power
Lion…….. Strength
HBL ……..brand name
THE POWER TO LEAD …….logo

Privatization of HBL

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 shareholding in HBL, against an
investment of PKR 22.409 billion (USD 389 million). On February 26, 2004,

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management control was handed over to AKFED. The Board of Directors was
reconstituted to have four AKFED nominees, including the Chairman and
President/CEO and three Government of Pakistan nominees.
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.

Vision
Enabling people to advance with confidence and success.

Mission Statement
To make our customers prosper, our staff excel and to create value for
shareholders.

Core values
HBL is firmly grounded with a corporate philosophy that incorporates five solid
values which each individual associated with the bank abides by.
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 service we
offer, our products and premises, can we hope to be successful and grow.

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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.

2.3 Organization structure

Any organization needs a structure, which provides a framework for successful
operations.
The operation of an organization involves a number of activities, which are
related to decision-making, and communication of these decisions. These
activities must be well coordinated so that the goals of the organization are
achieved successfully.
Chairman

Board of director

President

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Country heads

Area heads(regional manager)

Branch manager

A chart defines the line of authority in an organization and its departmentation. It

is a sort of visual presentation of the organizational structure. It specifies the
duties and responsibilities of the personnel of the organization. At present the
Bank operates through one central and 23 Regional Offices and 1439 branches, all
over Pakistan. The president and Executives Committee look after the affairs of
the Bank. Each Regional Head Quarter is headed by a Chief Executive and
assisted by General Manager Operations and General Manager Support Services.
The Regional Head Quarter controls the branches in their area. Overseas
operations consist of 65 main branches, two affiliates, two representative offices
and two subsidiaries. President, from Head Office at Karachi controls the officers
of the Bank with the help of the senior management. Functional responsibilities of
the Banks are broken into seven groups known as 1) International Operations
Group2) Corporate Banking and Treasury Investment Group3) Retail Banking
and Operation Group 4) Finance, Audit and Administration Group5) Assets
Remedial Management Group6) Credit Policy Group7) Corporate Bank, Financial
Institutions and Project Finance.

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 2.4 Over all functions of HBL in Pakistan

Individual customers

HBL caters to all market segments, offering products that are as diverse as the
people we service. We remain resolute in our commitment to provide products
that are competitive and services that are exemplary. Whether establishing a new
venture or expanding an existing business, our team understands your banking
needs and works closely with you to realize your goals. HBL provides the
following products and services to meet its individual customer requirements:
I. Term accounts:

Offered in a variety of tenors with deposits as low as Rs. 10,000.

II. Current accounts:

Our Current Accounts offer features that meet your daily banking needs.

III. Saving accounts:

HBL‟s Saving Accounts cater to individual saving habits.

IV. Foreign currency accounts:

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Offered in multiple currencies with interest paid on a quarterly basis.

V. Debit card:

HBL Visa Debit Card allows you to pay for your purchases directly from your
bank account. You don‟t have to carry cash and your monthly statement provides
you with a complete record of all your transactions so you can manage your
expenses with ease. Features
1. No Interest
2. Ease & Security
3. No Liability
4. International Recognition& Acceptability S
5. pending Limits
6. Free Account Statement
7. 24 hour Customer Service
8. Global Customer Assistance Service
VI. Bank insurance:

HBL and New Jubilee Life Insurance Company Limited introduce Amaan
(Retirement Plan) and Tabeer (Child Education & Marriage). These products have

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been designed keeping HBL`s customer base as the focus and will provide life
insurance along with an investment option.
1. Amaan (Retirement plan)

Amaan is a pension plan that provides an opportunity for growth through

investment in a balanced portfolio with post-retirement income benefits. The plan
covers life insurance and gives attractive returns on investment to its customers.
2. Tabeer (Child Education and marriage plan)

Tabeer is a plan that provides parents with a means to accumulate a fund over a
period of time which can then be used to pay for a child’s education or marriage.
Plans are available for both under and over 45 years of age.
VII. Phone banking:

Your bank is just a phone call away. You can now call HBL Phone Banking and
save a trip to the branch. Your query will be resolved in a single telephone call
from anywhere and at anytime.
b. Business Customers:

HBL offers a wide range of products and services for its business customers.

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 I. Corporate banking:

HBL Corporate Banking Group comprises a seasoned team of Relationship

Managers (RMs) to meet the demanding service standards of large corporations.
A long history of financing and nurturing relationships in Pakistan has given HBL
a unique insight, enabling us to provide timely and effective financial solutions
for our customers to meet the growing challenges of a global economy. If you are
a corporate customer, with a turnover of at least PKR 300 million, we have a
range of solutions designed to help you with your banking needs. Our RMs has
the expertise you need to create tailored financial solutions catering to the specific
requirements of your business. Whether establishing a new venture or expanding
an existing business, our team understands your banking needs and works closely
with you to realize your goals.
II. Commercial banking:

HBL‟s Commercial Banking Group targets medium sized companies with a

turnover of at least PKR 50 million. Our business units are located in Karachi,
Lahore, Faisalabad, Sialkot, Gujranwala and Peshawar. Each unit is dedicated to
service business clusters located within these cities. We have the ability and the
resources to meet the needs of your business with our proactive, responsive and
experienced Relationship Managers who are committed to understanding your
business. We cater to the needs of a broad spectrum of clients. To do this, the
business-banking group is segregated by the size of the customer.
For customers with an annual turnover between PKR 50 million to PKR 300
million, our Commercial Banking group provides a wide range of products that
meet specific customer needs.
Features:
We offer financing for the following:

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  Working Capital
 Procurement of Inventory
 Receivables
 Procurement of Machinery
 Expansion of production facilities
 Import of raw materials
 Exports
 Guarantees
III. Investment banking:

HBL offers full-service Investment Banking capabilities to its clientele. This year
alone, HBL has closed over thirty transactions with a cumulative worth of over
USD 2 billion. This is a testament to out-of-box thinking and innovative products
we bring to our customers.
The Investment Banking Group functions in three specialist business
 Project Finance,
 Debt Capital Markets & Syndications areas and
 Equity Capital Markets & Advisory.
IV. 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 and trade. Islamic Banking provides Ijarah (leasing) for vehicles, plants
and machinery to meet long-term customer resource requirements. Murabaha
(local & import) facilities are provided to meet the short-term financial needs of
mid-market and corporate customers. HBL‟s Islamic Banking products are fully
Shariah compliant and duly certified by independent Shariah Advisors

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 V. Cash management:

HBL offers a comprehensive platform for customers to avail Cash Management

Services throughout Pakistan. Our Cash Management Services reduce the cash
turnaround of your company, thereby making it cost efficient
Features:
 Centralized Collections / Funds Transfer
 Centralized Payments / Disbursements
 Customized MIS Reporting
 Centralized Customer Support through IT/Operations
VI. E-banking:

HBL is also providing unique and latest online services like online fund transfer,
balance checking to its customers.

VII. Rural finance:

HBL‟s Agriculture loans are spread across the country and provide financing
through over 800 branches. We have the largest private bank portfolio in the
country with over PKR 18 billion in various agriculture sectors. HBL‟s presence
in all agriculture belts of the country ensures easy access to farmers in rural areas.
Features:
 Revolving Agri Scheme
 Haryali Farm Transport Scheme
 Agri Development loan
 Agri Development loan (Fish Farming)
 Agri Development loan (Drip Irrigation)
 Agri Production Finance

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  Haryali Livestock Loans
VIII. Asset management:

HBL Asset Management Limited, A Wholly own subsidiary of Habib Bank Ltd.
was incorporated on 17 February, 2006 as a public limited company under the
Companies Ordinance 1984 and was licensed for Investment Advisory and Asset
Management Services by Securities and Exchange Commission of Pakistan on
3rd April, 2006. The credit department has to:
 Visit their clients.
 Carry out through investigation about the client.
 Check the credit status of the client with other banks.
 Report the SBP about the credit status.
 Arrange the credit approval from the State Bank.
 Calculate client mark up.
 Charge mark up from the client account
Summary
This chapter concludes what is bank? The brief history of banking,
evolution of banking types of banks, introduction of HBL in Pakistan,
history of HBL in Pakistan. Organization structure, brand, vision, mission,
core values, products/services of bank.

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CHAPTER 3

Organization

Introduction

This chapter is all about organization in which I worked. it tells us about brief
history of HBL in wazirabad. Its relationship with headoffice,departments,offices,
staff, critical analysis of branch and its performances.

3.1 Brief history of organization

In wazirabad HBL was formed on 31st march 1970.it developed by leaps and
bounds and now the largest commercial bank of city. it was the 2nd bank
established in Wazirabad. All the surrounding rural areas were facilitated by
it.noe it has also its branches in Dhaunkal and Rasool Nagar. it has gone through
many hardships that’s why able to be reached at this position.

3.1.2 Relationship of head office to the branch office

All major policies rules regulations and controls are devised by head office of
HBL in Karachi. Then these policies are conveyed to regional heads and branch
heads. You can say that it is a centralized decision making style.

All routine matters are decided at branch level by the manager of branch with
permission of him. If any problem or matter is beyond limits then it is referred to
regional headquarter. it can be said a decentralized decision making style

3.1.3 Number of departments

There are various departments on which day to day banking of HBL composes to
satisfy customers. here are banking department`s functioning in HBL Kutchery
chowk, Wazirabad.
1) Computer Department

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 2) Credit department
3) Foreign exchange department
4) Operations department
5) lockers
a. Computer Department
The objective of this department is to facilitate customers in payment of their
cheques. The main functions performed by this department are:
1. Checking balance.
2. Deduction from balance on clearing cheques.
3. Issuing bank statements.
4. Deduction of charges for services provided
5. Receipt of utility bills
6. Online transfer of remittances
7. Comparing signature
8. Maintain a record of transaction history of accounts
9. Communication through E-mail etc…
b. Credit Department:

For one week I was sent to credit department but I spent a single day there.
Although in credit department there was lot more to learn but to my hard luck the
in charge of credit department was not cooperative. On my first day in credit
department I was keen to know what the procedure to sanction credit is. I also
wanted to know what different types of advances are as it is asset of any bank but
the in charge was not in a mood to tell me anything about credits and when I said
to him that I want to learn about credit he replied that this is totally different from
your bookish knowledge. However, I tried my own and got following
information. Because I believe: “A problem is a chance for you to do your
best.” Following are some services of Credit department:
I. HBL credit card:

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With the help of HBL Credit Card customer enters to a world of convenience and
flexibility. It is accepted over 29 million merchants worldwide. HBL Credit card
makes shopping fun and paying simple. So makes most of your shopping
experience. Benefits
1. Buy now, pay later
2. Pay as much as customer wants
3. Cash advance
4. Balance transfer facility
5. Security
6. Convenience
II. HBL debit card

HBL Visa Debit Card allows a card holder to pay for his purchases directly from
his bank account. He doesn’t have to carry cash and his monthly statement
provides him with a complete record of all his transactions so he can manage his
expenses with ease.
Benefits
1. No Interest
2. Ease & Security
3. Spending Limits
4. Free Account Statement
5. International Recognition & Acceptability
6. No Liability
III. HBL personal loan

With the rising cost of living, it is becoming increasingly difficult to make

expensive purchases or meet unexpected expenses. HBL is helping customer

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finance them with Habib Bank personal Loans (old name flexi loan). Customer
may avail a personal loan of up to SIX TIMES of his net take-home salary subject
to a maximum of Rs.300,000/- provided he work for an organization approved by
HBL.
Features
1. Flexible tenure: 12, 24, 36,48 or 60 months
2. No processing fee
3. Repayment through easy and affordable monthly installments from
salary.
4. Credit Life & Disability Insurance
5. Repayment through easy and affordable monthly installments
6. You determine the need, we help you finance
7. Option of add up replacement for existing customer.
8. Minimum salary Rs. 15000
9. No salary limit for existing customer

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 IV. HBL Bank insurance:

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.
V. HBL Zarai banking

HBL Zarai Banking facilities are spread across the country and provide financing
through more than 800 of their branches. HBL‟s presence in all agriculture belts
of the country ensures easy access to farmers in rural areas. HBL Zarai Banking
provides loans to small-scale land owning farmers as well as large
institutionalized and alliance based finance, enhancing agricultural harvest and, in
turn, economic output of the country. Products HBL Zarai Banking enables
farmers to invest in premier quality seeds, fertilizers, pesticides, agricultural
implements and non-farm setups through its various product programs.
c. Foreign Exchange 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 resource
d. Bills Clearing Department
I. What is clearing?

“A system by which banks exchange cheques and other negotiable instruments

drawn

32
on each other within a specific area and thereby secure payment for their clients
through the Clearing House at specified time in an efficient way.”
Clearing in HBL
By clearing means, sometimes accountholder of HBL presents a cheque that is
drawn on a person (who has an account in HBL) instead of the bank. In this case,
bank accepts this cheque in clearing department and on 3rd day collects amount
from bank on which cheque is drawn through clearing to take amount from that
person‟s account upon whom the original cheque was drawn. Every Bank
performs the paying and receiving functions. Cheques are collected which are
drawn up to Banks for customers. Similarly the cheques drawn on different Banks
and deposited by Banks own customers for collection within the city is known as
clearing The functions of receiving and paying is mostly done through the
clearing house.
II. Clearing House

Clearing House is a place where representatives of all banks sit together and
interchange their claims against each other with the help of controlling staff of
NIFT. It is one of the services provided by the NIFT to the commercial banks.
Different banks are the members of this clearing house. Here each representative
presents the cheque that is not drawn on his bank to the representatives of the
banks on which the cheque was drawn and collects the amount on behalf of his
customer. Similarly each bank receives cheques from other banks.
III. National Institution Facilitation Technologies (NIFT)
NIFT (National Institution Facilitation Technologies) is the department
which is created by the SBP for clearing the checks of different banks. National
Institutional Facilitation Technologies (Pvt.) Ltd. was incorporated in September
1995 as a joint venture between a consortium of six major banks and private
sector. It is responsible for the establishment and management of automated

33
clearinghouse facilities in Pakistan. NIFT is proactively involved in the
modernization of payment systems in Pakistan. There are more than 20 NIFT
centers in Pakistan including Gujranwala. NIFT deals directly with every branch
in 20 major cities and adjoining 164 commercial and industrial towns. More than
5571 bank branches avail NIFT services.

V. Types of Clearing:

Clearing instruments are those instruments which are drawn on the branches of
some other bank of the same city or of the same area which covers a particular
clearing house. There are following types of clearing:
1. Intercity Clearing

Intercity clearing means the cheques which are drawn on the branches of some
other banks from outside the city. In HBL Kutchery chowk all the cheques that
come from outside the Gujranwala region are to be considered as intercity
clearing.
2. Local Clearing

LOCAL clearing means the cheques which are drawn on the branches of some
other banks of the same city. In HBL Kutchery chowk all the cheques that come
from Gujranwala region are to be considered as Local clearing.
3. Same day Clearing

In same day clearing, clearing cheque comes in bank in same day and after entries
of this cheque, this cheque is sent to NIFT on same day. Person of NIFT daily
comes in the bank for taking cheques of same day clearing. But payment of these

34
cheques is cleared on next day. Basically these are local cheques that are cleared
same day to provide benefit to customers.

e. Remittance Department

Remittance is “the transfer of money from one place to another or from one
person to another for the purpose of paying bill for example”

A remittance is an important service a bank provides to its accountholders and to

non-accountholders. It is form of income for bank because a fix amount of money
income is charged from the customer. Following four types of parties are involved
in remittance procedure:
1. Issuing bank
2. Paying bank
3. Remitter
4. Remittee

35
Issuing Bank
The bank that affects or sends the remittance through SWIFT (Society for
Worldwide Interbank Financial Telecommunication), Banker‟s cheque or local
funds transfer through mail transfer etc.
Paying Bank This is the bank on which instrument is drawn. Paying bank makes
the payment. It may be located in different city or country.
Remitter is the person who requests for remittance, either accountholder or non-
accountholder. He comes to the branch and asks for remittance to be made. He
deposits the money to be remitted and pays commission for this service.
Remittee This is the person for whom remittance is made. Remittee is also called
payee or beneficiary.
i. Kinds of remittances

Some of the kinds of remittance are following:

1. Transfer within branch (Inland remittance)
2. Transfer from one branch to another branch (Inland remittance)
3. Transfer from one bank to another bank within same city (inside
locality)
4. Transfer of funds intercity (outside locality)
5. Transfer of funds from one country to other country.

36
 3.1.4 Offices
There is only one branch of HBL in wazirabad which is at the central location of
city at katchery chowk.

3.2 Current staff

A detail about the current staff is as follows.

 Branch Manager (Mr. Asghar Abbas Bukhari)

 Operational manager (Mr. Abbas Butt)
 Clearing and Remittance Officer (Shaista Dar)
 Head Foreign Exchange (Mr. Khalid Farooq Butt
 Cash Officer (Mr. Nadeem)
 (Shaista Butt)
 (Mr. M. Arshad)
 (Raja Fayyaz Ahmad)
 Tea boy (Shahzad)
 Guard

(M.Zaheer)

(M.Arshad)

37
 3.2.1 Current staff of branch according to qualification and
experience

Staff Qualification Experience

Branch Manager Masters 35 years
Operational Manager Graduation 29 years
Clearing and Remittance Graduation 2 years
Officer
Head Foreign Exchange Graduation 18years
Cash Officer Inter 5 years
Tea Boy metric 8 months
Guard metric 10 years

This table shows the details about the staff, their qualification and experience.as from
the table we can analyse that experience as well as education is the key to success in
HBL.

38
 3.2.2 Training received by no. of employees

When I was doing internship at HBL kutchery chowk branch wazirabad. There
were three girls and one boy doing internship there. So we can say that HBL
provides better training to the fresh graduates to enhance their skills knowledge
and abilities in practical world.

3.2.3 Workload

The bank timing was 9 am to 5p.m. to provide customer services..sometimes the

staff of the bank has to stay there in the bank till 8 to 9 pm for setting and
compiling their work. that is really a tough and hectic timing of a job. It increases
the burden on the employees and reduces their motivation

3.2.4 Salary structure

Staff was not ready to disclose information about their salary. however manager
`s salary was Rs 70,000 per month and operational manager`s salary was Rs
35000 per month. they did not provide me any information about the structure of
salary.

3.2.5 Promotion system

The process of promotion at HBL is low. promotion is awarded on seniority and

experience basis. however if the supervisor of an employee appraises him in
grades it affects directly its salary and promotion. after three years individual is
eligible for promotion. if an employee has a “C” grade he is not applicable for the
promotion interview.

3.2.6 Incentives and motivation

The salaries, rewards, bonuses and incentives on the basis of jobs and
performances according to performance and experience. each employee on HBL
gets incentives and compensation whether as direct payment or indirect financial
payment.direct payment in form of wages,salaries,commissions,bonuses.indirect
payment is not related to cash payment like insurance, car, car fuel.

3.2.7 Responsibilities and duties performed

39
Responsibility is the obligation to perform assigned activities. it is a self assumed
commitment to handle a job to the best of one`s ability. the source of
responsibility lies within the individual.

At HBL all employees are encouraged to take full responsibility of actions and
various job tasks. Responsible employees tend to be more motivated and focused
on achieving organizational objectives. And perform their assigned duties

3.3 critical analysis of branch

When we think critically we are being active; we are not passively accepting
everything we read and hear, but questioning, evaluating, making judgments,
finding connections and categorizing

3.3.1 Communication system

Communication system in branch is sound. there is a proper hierarchy in branch.

cash officers report to operational manager and operational manager reports to the
branch manager. head of foreign exchange and credit department are directly
liable to the manager of the branch.

3.3.2 Hiring system

Hiring system in bank is not proper. Employees are recruited on the basis of
favoritism, nepotism political pressure. Both the staff and unions try to hire their
favorites

3.3.3 Morale of staff

I don’t think so that morale of staff is high because there are some people in
branch that are not hard working and try to put their burden on the shoulders of
others. At the end of the working hours the employees are so exhausted that they
are about to quarrel. only the manger and branch manager head of foreign
exchange and head of credit department have the professional attitude.

3.3.4 Physical facilities

The physical facilities provided to HBL are not enough to meet the needs of staff
as well as the customers. There are no rooms in the bank. Nevertheless separate

40
cabins are provided to branch manager and credit officer. At ground floor there
are the air conditions but at 1st floor where those are needed most are not
available. More over at ground floor facility of drinking water is not available.
Staff does not have enough equipment to handle their data.

3.4 Performance

The results of activities of an organization or investment over a given period of

time.
Performance management is the process of creating a work environment or setting
in which people are enabled to perform to the best of their abilities
In terms of quality (through customer satisfaction)

Customer satisfaction, a business term, is a measure of how products and services

supplied by a company meet customer expectation.

A customer's perception of the degree to which their requirements have been

fulfilled.

The services provided to the customers of HBL in kutchery chowk branch

wazirabad are not so good to satisfy the customers as the customers having high
deposits in their account are treated with courtesy and the customers having no
reference are treated with dry attitude and they are not dealt properly. Their
services are delayed often or staff becomes lazy to process their requirements.

In terms quality (number of accounts)

No. of accounts are enough to meet the needs of bank but now a day’s
competition has increased customer transfer their amounts in other banks there
may be a reason that they are not satisfied with the services provided. However
HBL is one of the oldest banks in city.

Summary

41
In chapter 3rd I summarized about the work I did in the departments of HBL.Its
history and performances of current staff.

Chapter 4

Introduction

In this chapter policies of HBL ,strategies, successes will be discussed general

because I did not find any information about it in branch. Policies of HBL include
social responsibility, Human resource development, Information Technology.

4.1 policies

It is a known fact that the Habib Bank Limited (HBL) is one of the largest and the
oldest financial institutions both in the public as well as in the private sector of
Pakistan.

Traditionally, it provides financial services to all segments of the national

economy within and outside Pakistan. With a revamp customer oriented
philosophy, the Habib Bank is pursuing the new avenues of leadership through
innovation and automation in customer services. The direction given to the staff
by the leadership in the management is to gear up the efforts to face the
challenges to bring new heights of professionalism in the banking system.

Social responsibility

42
Fresh air is also blowing in the Public Relation Division of HBL that believes in
effective rapport with the general public by communicating the policies and
schemes of the bank through print and electronic media. Besides maintaining
close relationship with the media, the publicity division of HBL is also leaves no
stone unturned to render all possible assistance to the visiting dignitaries and
delegations from abroad.

HBL believes in serving the nation and building the country's economy on sound
footings. The HBL is also on its forefronts to support and appreciate the efforts
being done for the noble causes and promote social and cultural activities in the
country. In this direction, the public relation division sponsors various social,
cultural and sports events to generate healthy activities in the society. It also
organizes religious programs to enhance social, human and religious values and
traditions of our society. The division also represents the bank at important for to
exchange views on national and international issues with various organizations to
boost the intellectual activities.

Human resource development

At every stage and level right from selection to advancement, the bank has
designed a consistent system of human resource development based on result
oriented objectives. The brilliant performance shown by majority of the staff
reflects the desired results of these efforts. The team spirit generated by the
training division to the staff has started showing positive signs and a concerted
and unified force has been developed within ranks and files of the bank to offer
the best possible services to the valued customers. These efforts have brought
success stories to the credit of Habib Bank. As a result of concerted efforts the
HBL has succeeded in making substantial increase in the import forward booking
volume. It also registered an increase in export bill discounting volume. These

43
efforts also enabled the bank to increase in monthly treasury profits that directly
contribute towards the profitability of the bank. An improved communication
between the branches and dealing room accompanied by increased customer
interaction with treasury is also the part of the improved performance of the bank.
HBL has succeeded to place itself in a position where its Treasury is considered
as market maker. Most of the small local banks use HBL's rate sheet as their
benchmark.

In the nutshell, the forum gave a chance to all country managers to develop and
redefine strategies and bring them in line with the overall objectives of the bank.
The International Strategy Conference organized by HBL at Muscat last year was
the part of that effort to develop and implement business plans that recognize the
ground realities but at the same time incorporate a stretch component so that the
Bank can regain its pre-eminent position in the emerging market.

Information Technology

In order to keep pace with changes swiftly taking place around the world, the
HBL has embarked upon an ambitious plan for automation to have competitive
edge over competing banks. An uphill task, it started in full swing and tempo
which is unprecedented in the history of HBL. The team of I.T professionals has
almost hit the goals set by the management and showing positive and encouraging
results. The computer division is providing technical support both for hardware
and software to branches and other offices at the region or Head Office level
throughout the country to ensure trouble-free operations of the Bank.

4.2 successes

Istanbul: On the occasion of the World Bank Annual Meetings 2009 currently
underway in Istanbul, Global Finance presented banking awards to the top global

44
banks at a ceremony attended by senior bank officials. HBL was presented with 3
awards: Best Bank – Pakistan, Best Trade Finance Provider – Pakistan and Best
Foreign Exchange Provider – Pakistan. These awards were conferred on HBL in
recognition of its achievements in product delivery and service quality in the
markets it serves.

4.4 summary

All the policies,stratgies of HBL are according to dynamic enviornment of world

that’s why it has received remarkable success on national and international level.

Chapter 5

Introduction

In this chapter I shall discuss the SWOT analysis and ratio analysis of HBL of
2007 and 2008.

SWOT ANALYSIS

SWOT analysis is based on assumption, that if managers carefully review such

strengths, weaknesses, opportunities, and threats, a useful strategy for
organizational success will become evident. HBL is considered to be a very sound
bank in the financial circles; the bank where the customers can safely keep their
money as long as they want. In SWOT analysis the best strategies accomplish in
organization’s mission by: 1. Exploiting opportunities and strengths. 2.
Neutralizing its threats and 3. Avoiding its weaknesses
. a. Strengths
While interning at HBL I was able to conduct a SWOT analysis of the
organization. I learnt a great deal about the banks Strengths, Weaknesses,
opportunities available in the future and the threats that are ever present in today’s
competitive Banking Industry. The analysis is as follows:
1. HBL is the larger commercial bank in Pakistan with the network of
over 1468 domestic and international branches

45
 2. HBL is a well established bank enjoying long history of over 65 years
of experience, high people trust and profitable operation
3. HBL has opened all its branches at commercial areas so that the
customers or clients face no problems in reaching to the bank
4. 24 hours cash access and safe payment products for high value
transactions
5. HBL focuses on consumer banking by lucrative schemes, diversified
product range and services suiting best to the wants and demands of the customers
6. HBL has very good security system.
7. I observed that HBL employees interact with their clients as if they are
their personal friends and discuss about their problems as their own
8. HBL has got a reliable and easy to use internal computer system. ALL
information regarding the transactions in customers‟ deposits has been
computerized
9. HBL is market leader in introducing e-banking and has largest ATM
network in country
10. HBL was rated the best domestic bank for two consecutive years of
2000 and 2001 by Euro money, a leading international publication and has gotten
many other awards
11. 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
12. Wide number of services provided to the customer at cash counter
13. HBL has got a well-developed on-line system in most of its branches.
Remittance Department is working very efficiently in transferring funds of people
due to this system.
14. HBL have strength that most of the imports & exports which are done
around Wazirabad are handled by HBL Wazirabad Branch.

46
 15. Having potential to encounter the competitive environment in the
market

b. Weaknesses
Even though the bank is making continuous efforts towards minimizing its
weaknesses, there are still some areas that have to be improved to be able to
compete in this industry. During my internship period I came to know about
following weaknesses in HBL:
1. Highest number of branches effecting the proper maintenance and
difficulty in providing same working environment at the each branch
2. Though HBL is the premier 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.
3. Staff here lacks managerial training as they are not properly educated.
Due to seniority, they have moved up on the hierarchy line to Grade- I, II or III
positions having hardly
Bachelor degrees. This type of senior staff cannot apply the modern and
innovative techniques of management in decision making.
4. Public respect is not very effective at HBL. Employees do not take care
of the customers, especially at token issuing counter and remittance department.
5. The lack of proper infrastructure in small branches is also a major
weakness. These are the branches which are being visited by a large portion of
customers. In certain branches there is not even proper separation between
departments to separate one department from another. This is a source of
confusion for both the staff and the customers.
6. Employees are constantly rotated from one job to another different one
to give them the knowhow of other departments.
7. The major weakness, I observed was charging of higher commissions
and markup rates.

47
 8. There are no entertainment facilities for waiting customers; magazines,
newspapers etc…

c. Opportunities:
At present the bank is faced with a large avenue of opportunities as it has proved
by launching new products and exploring various options in the market. The
major opportunities are:
1. Huge untapped market potential in consumer banking
2. In the presence of a huge network of branches all over the country,
provision of “Fast cash” facility can be an opportunity
3. Having a separate section for ladies will be more convenient and
attractive.
4. Nowadays internet banking system is growing quickly so HBL have
opportunities to improve the standard and get the more share in the market.
5. Providing lower markup rates, HBL can lure more customers to
increase its income
6. 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 HBL can focus on that.
7. ATM 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.
8. It can be an opportunity for HBL to enter into agreement with other
banks to use each other’s ATM, resulting in an increased convenience to
customers of HBL and other banks
9. Customer feedback on different products can really improves the bank
performance.

48
d. Threats

HBL faces many threats as competitive pressures have escalated in this particular
industry. There are also some threats that HBL faces apart from competitive
pressures. All these are discussed:
1. Day to day changing global technology
2. Shortage of trained and specialized staff at lower executive and officer
levels
3. Highly attractive and advance services by foreign banks to their
customers
4. Competent taskforce of some other banks is a threat because human
resource is the most valuable asset.
5. Political and economic instability can be a threat

49
Ratio analysis
Ratios 2007 2008 Increase/Decrease
Return on equity 15.94631% 20.76873% Favorable
Return on total assets 1.457249% 2.060092% Favorable
Equity to total assets 0.091385 0.099192 Favorable
Earnings per share 14.61455 20.57183 Favorable
Advances to total assets 0.5522 .6021 Unfavorable
Book value per share 91.64845 94.56659 Favorable
Loan to deposits 0.7193 0.7643 Favorable
Net profit ratio 30.32% 35.50% Favorable
Deposit to equity ratio 8.40164 7.9421 Unfavorable

Above mentioned ratios are showing overall favorable trend in 2008 instead of
2007. In real sense ordinary shareholders are the real owners of the company.
The rates of dividend vary with the availability of profit in case of ordinary
shares only. Thus ordinary shareholders are more interested in the profitability
of the company. Return of equity of HBL is showing a increasing trend. In
year 2007 the return on equity of HBL is 15.95%, in year 2008 it is 20.77%.
This increase shows that company is utilizing its funds properly in relation to
previous year. Bank should have to continue its policies. Return on assets ratio
shows an improving trend. This ratio shows that the both the Net profit and
Total Assets has improved together in 2008 than 2007. But net profit has
increased more rapidly. Equity to assets ratio shows an improving trend. This
ratio shows that equity and assets both have increased but with a decreasing
trend. It shows that organization has implemented policies in better way to
finance assets through shareholder‟s equity. It shows that how much company
is earning with respect to number of ordinary shares. It shows that how much
investor is earning. The earnings per share of HBL of year 2007 is 14.61455
rupees per share and in year 2008 it is 20.57183 this increase is due to increase
in profit but also there is increase in number of shares. Advances to total assets
ratio shows how much assets are financed through debts. This ratio for bank is
unfavorable because more assets are financed through debts in 2008 (60%) as
compared to 2007 (55%) assets. The increasing debt ratio shows the increased
share of debt in total assets as compared to owner‟s equity. The higher the

50
share of the debt lesser will be the secure financial position. Book value per
share is a relationship between network of business and no of ordinary share
of business. The ratio is decreasing in 2008 was compared to 2007. So this
ratio is unfavorable As deposits show an increase, the advances also increased.
Bank is now providing the advances and loans to more customers as compared
to previous year. But the deposits showed an increase in a decreasing trend.
This shows an increase in area of activity of bank. Net profit Ratio is giving
upward trend in 2008, which is a positive sign. This trend is observed due to
increase in Net profit but on the other hand the expenses decreases which
shows an efficient management. This ratio shows position of equity in total
assets of business. It is also important ratio for a bank as all the bank profits
are mostly based on loans and deposits. It is showing a decreasing trend so an
unfavorable situation for bank. Since there is an increasing trend of equity but
deposits increased with decreasing rate.
Summary

In chapter 5 I have summarized the SWOT analysis of HBL and ratio analysis’
have tried to discuss all those strengths, weaknesses.opprotunities and threats
which I consider are present in this dynamic environment. and ratio analysis
tell us about the current financial position of HBL.

51
Recommendation
Here I am giving some suggestions, which will enable the bank to compete with
other banks more effectively & efficiently
1. I suggest that number of staff members in the branch should be
increased so that they can meet their customers‟ requirements quickly and
efficiently
2. I suggest that in order to deal with women there should be a Lady
Officer or Lady Clerk in the bank and there should be a separate cabin for them
3. Recruitments should be strictly on merit basis and induction should be
after proper and extensive training
4. Old and lazy staff should be replaced by young, qualified and energetic
staff.
5. Working environment, equipment, furniture and staff dressing should be
according to the modern banking style.
6. There should be specific procedure for account closing and the record
should be maintained. Cheque book must be taken back for avoiding future
inconveniences
7. Special attention should be given to the behavior of the employees
towards the customers, as customer is the most important person for any bank.
8. More power to the branches should be allocated
9. Reference system should be eliminated and management should strictly
order to the employees and in charge officers to provide complete training to
those internees also who don’t have any reference.
10. Bank should give interest free loan to students for the betterment of
society.

11. There should be the facility of clean drinking water at the ground floor.
12. Staff should be provided with separate USB`s to each one to handle his data.

52
References/Bibliography:

en.wikipedia.org/wiki/Customer satisfaction

qualityisoexpert.com/glossary/

http://www.habibbankltd.com/about-us-news.php#32

www.deakin.edu.au/

www.hbl.com

www.KSE.com.pk

www.DAWN.com

Negotitble instrument Act .

Societies Registration Act, 1866.

Companies Ordinance, 1984 .

Banking Ordinance, 1962.

Analysis of Financial Statements by George foster.

HBL Corporate profile 2008 HBL

Annual Report 2008

Daily times articles

Interviews from: Branch Manager (Mr. Asghar Abbas Bukhari) Operational Manager (Mr.

Abbas Butt) Clearing and Remittance Officer (Shaista Dar) Head Foreign Exchange (Mr. Khalid

Farooq Butt)

53