CHAPTER

1
1.1

STUDY OF REPORT

BACKGROUND OF STUDY

To develop a conceptual and analytical understanding of the finances and their practical implications, it is necessary to integrate knowledge in the respective fields, learn and apply tools combined with working knowledge to have better impact of decisions when called upon to apply financial concepts. The study being the review of internship at First Women Bank Limited, Peshawar Cantt Branch, follows the objective to apply management knowledge in practice by working in real life situations to improve personal skills while dealing directly with people, developing analytical and report writing skills along with learning practically the commercial banking techniques. First Women Bank is a small bank started functioning in December 1989 with the purpose to enhance women development in financial sector. The Bank, however, has no deviated function except that it is administered and run by women bankers. The main branch of NWFP is operating quite successfully and effectively with limited staff and facilities. It has done well in meeting its objectives besides rendering services to its clients despite trapped into various administrative and operational constraints.

1.2

PURPOSE OF STUDY

This internship report is an attempt to organize and write about all the knowledge that I have acquired during my internship at First Women Bank Limited, The Mall Branch Peshawar Cantt. It is based on my experience and

observations. My internship gave me an opportunity to work in real life situation with an aim of applying my management knowledge in practice and to improve my personal and analytical skills. The basic purpose of this study is to analyze the existing structure of the bank and preparing an analytical review with findings of the research and specific recommendations regarding the organization

1.3

SCOPE OF THE STUDY

During a short span of eight weeks, I tried my level best to study, analyze and evaluate the performance of the main departments of the bank like deposits, advances foreign exchange and remittances. Limitations Eight weeks were not enough to gather information about such a large organization. As FWBL us online, I didnt get experience of manual operations. They keep their records confidential due to which internees dont get information about each and every department. Delimitations The study will remain the part of literature review for the upcoming students of the institute, which in fact is the delimitation of the topic under review.

1.4

METHODOLOGY OF THE STUDY

The organization where I worked used to keep all the documents, data or figures and records quite orderly and in sound security. Therefore it was not easy to know and collect the whole information that was required. However I tried my best to collect all possible information. While collecting the data and other relevant information, I have used both primary and secondary data.

Primary data is the data, which is collected for the first time. In this case, direct observation and informal interviews are used as a source of primary data. During my internship I use to observe the working procedure of the officers, their dealing with customers, following of the rules and procedures. I used to ask question from time to time to satisfy my queries. I also interviewed the manager of the bank to know about the history of the bank and the general overview of the organization.

Secondary data is the data that has already been collected. The main
source of information to this report is the secondary data. Annual Reports of the Bank for the year 2006 & 2007, various Manuals concerning the policies and procedures of the bank, Books on Banking and Management areas like Practice and Law of Banking in Pakistan & Management Skills and Applications, internship reports on FWBL by the previous student available at our library and the website of FWBL are part of secondary data.

1.5

SCHEME OF THE REPORT

The scheme of the study enjoys the following pattern; Introduction of the topic of the study assignment has been presented through its background review, purpose, scope, limitations and methodology combining as the first section. An overall picture of the organizational structure with the past review and recent changes, Human Resource Policies and Promotional Tools have been made the part of the report. Description of the different product offered by the bank, the support services, national and international collaborations, recognitions, awards and

achievements are included in the third section.

CHAPTER

2
2.1

HISTORY OF FWBL

INTRODUCTION AND BACKGROUND

In order to encourage the participation of women in the economic activities of the country, First Women Bank Limited was established as a specialized organization headed and managed exclusively by women it started its operation on December 2nd, 1989 under the Limited Companies Ordinance, Act 7 with the authorized capital of Rs.100, 000million (now extended to 200,000 million). The entire capital was subscribed by the other National Commercial Banks. The specific objective of its establishment was to augment the economic status of the women by offering traditional and non traditional banking services and to serve as a Social Welfare Organization. The bank is directly and indirectly providing credit, advisory and consultancy services with regard to investment for entrepreneurs, marketing assistants and training facilities. FWBL emerged as a small bank with only five branches at the major cities of the country including branches at Karachi, Lahore, Islamabad, Peshawar, Quetta and a few main departments. It later increased progressively with the changing needs.

2.2

VISION

To be the lead Bank for Women" Dynamic, adaptive and responsive to their special economic needs, offering the best financial services and the best banking practices.

2.3

MISSION

The mission of FWBL is to be a financially sustainable bank with a specialized focus on promoting economic prosperity and self-reliance in women of urban and rural areas by: Transforming the status of women from passive beneficiaries of social services to dynamic agents of change. Promoting asset ownership, through its unique credit policies. Promoting entrepreneurs through Computer Literacy and Business Centers for skill enhancement, product development and business management. Facilitating their access to financial services by providing support through its Financial Services Desk on Corporate Affairs, Credit Management and Trade Finance activities and advice on Legal, Taxation and Marketing issues.

2.4

AIMS AND OBJECTIVES

The basic aim of the bank is to empower women specially those from low and middle income groups economically through facilitating their induction in economic process. To achieve this Bank offers not only conventional Banking services but also various non traditional services to women. It encourages and provides opportunities to women for their self development. The Bank is not restricted to women only. Male clients are also welcomed provided they maintain joint personal accounts with female members of their family or if they are partners and directors in the firm where major share holding in paid up capital and management is with women.

2.5

STRATEGY TO ACHIEVE OBJECTIVES

With the basic aim of creating economic empowerment for women, women are motivated to take up income generating activities by making available to them not only easy credit but also; Entrepreneurial skill training programs to enable them to update their management, technical and behavioral skills. Develop market for the products of the clients of the Bank through product display counters/ window arranged at leading branches of the bank. Identify market outlet by arranging exhibition of clients products in five star hotels and encourage and support clients to display their products in he exhibition held abroad. Promote computer literacy amongst Women entrepreneurs and women from all walks of life to equip them to meet challenges of 21st century. To promote women saving through banking channels. Special credit scheme for women and students from low income groups who cannot afford any collateral for securing loan from financial institution.

2.6

UNIQUE CHARACTER

Undertaking the conduct of all forms of business of Banking Company in a manner designed to meet the special needs of women and to encourage and assist them in promotion and running of trade and industry and practice of profession.

2.7

UNIQUE CREDIT POLICIES

First Women Bank Ltd. a commercial bank caters to women at all levels of economic activities - Micro, SME and Corporate, thereby enabling them to transcend their status from passive beneficiaries to dynamic agents of change. The Bank has always looked at its micro-finance borrowers as potential SME and Corporate clients. The Bank's unique credit policies promote asset ownership for women, by:

2.8
or or

FINANCING TO BUSINESS ENTITY

where women have 50%shareholding

where a woman is the managing director

where women employees are 50% or more

2.9

PRESENT STRUCTURE

The experiment of establishing such a unique financial institution proved very successful as it has developed into network of 38 branches all over the country with the Head Office and Training Division at Karachi. 2.9.1 Branches in Pakistan Karachi Lahore -9 -4

Islamabad -3 Peshawar -2 Rawalpindi-2 AbbotAbad

Bahawalpur Faisalabad Gujranwala Gujrat Hyderabad Jhelum Khairpur Larkana Mardan Multan Quetta Rahim Yar khan Sargodha Sialkot Shikarpur Sukkur Wah Cantt

2.10 EXPANSION PROGRAM

Because of proposed privatization, the further expansion of the bank is undecided, which has hampered its growth, particularly extending its services to the under developed and rural areas. Besides, mobile teams provide credit facilities in rural areas directly or through other Bank channels, where FWBL has no branches. At places, various Non Government Organization (NGOs) are also incorporated for such services for example Sarhad Rural Support Corporation (SRSC).

2.11 ORGANIZATIONAL STRUCTURE

It is defined as A framework that defines the boundaries of the formal organization and within which the organization operates The Banks framework strictly follows the government policies of centralization with a flat organizational structure and the top to bottom authority relationship, since the day of its establishment. The top management took all the decisions ranging from small loans to large projects. Recently some changes have taken place at the top level, where the powers have been delegated. In order to ensure quick dispersal and efficient decision making it has decided to decentralize the discretionary powers. The whole setup of the organization has been divided into four sectors. Each sector headed by the Sector Executive is provided with the powers to deal with micro credits at their branch levels through Credit Committees consisting of four members. The decision taken by the sector Committees are subjected to rectification by the executive Committee headed by the President of the bank. The four sectors are; Sector Executive Sector Executive Sector executive Sector executive Sindh & Baluchistan N-W-F-P Punjab Federal Capital Area &Upper Punjab

The two provinces Sindh and Baluchistan are merged together as a one sector for the convenience of their management. An Executive Vice President, who also serves as the head of Credit Departments, controls it.

A vice President heads the four branches of NWFP while an Executive Vice President is in charge of sixteen branches of Punjab. Federal Capital and the two branches of Rawalpindi operate as a separate unit with a Senior Vice president as a Sector Executive.

EXECUTIVE COMMITTEE FIRST WOMEN BANK LIMITED

MS ZARINE AZIZ
Chief Executive/President Ms Charmaine Hidayatullah Ms Safia Hasan Ms Shahwana Yamin Mr Shahid Mughal Ms Tazeen Ahmed EVP & Head of Legal Division EVP & Head of IT Division EVP, Company Secretary, Head of SME Division Head of Finance, Planning & Operations Head of Corporate Finance

10

CHART 2.1: SECTOR DIVISION CHART

President/Chairperson
ZARINE AZIZ

Sector Executive Sindh &Balu 1+4 Branches

Sector Executive N-W-F-P 4 Branches

Sector Executive Punjab 14 Branches

Sector Executive Fed Capital Area &Upper Punjab 5 Branches

(Source: FWBL Circular)

CHART 2.2: BRANCH DEPARTMENTATION

BRANCH MANAGER

Deposits /Accounts

Credit

Foreign Exchange

Cash

Remittanc es

Comp

11

2.12 PESHAWAR CANTT BRANCH

Peshawar Cantt Branch of FWBL started its operation on December 10th 1989. It is one of the first five branches of the bank. Situated on the Mall Road it serve as the main branch of NWFP performing various functions that is clearing, cash etc on behalf of its other branches. The branch consists of 12-member staff. Branch manager is responsible for all the activities of the bank and the performance of the individual member. It includes; AVP / Manager OG-II OG-I Cashiers Office Assistance Computer Operator Male Messenger Female Messenger Driver Guard

1 2
1 2 1 1 1 1 1 1

12

2.12.1 Branch Departmentation The functions of the branch are divided into six departments. Each member staff is responsible for the operations of the individual unit. The departments are; Deposits/Accounts Advances Remittances Cash Foreign Exchange Computer

13

CHAPTER

ACCOUNT OPENING / CUSTOMER SERVICES

3.1

PROCEDURE FOR OPENING OF AN ACCOUNT

The opening of an account is the establishment of banker customer relationship. Before a banker open a new account, the banker should determine the prospective customers integrity, respectability, occupation and the nature of business by the introductory references given at the time of account opening. Preliminary investigation is necessary because of the following reasons. i. Avoiding frauds ii. Safeguard against unintended overdraft. iii. Negligence. iv. Inquiries about clients. a. Formal Application

The customers are to fill in an account opening form. It is a formal request by a customer to the bank to allow him to have and operate the account.

b.

Obtaining introduction

The bank before opening an account obtains introduction of the customer from an old customer.

14

c.

Specimen signature

The customer gives the banker a specimen signature generally taken on a card specially designed for the purpose, and rules for the customer, full name and account number are entered on it. It expresses customers authority for the payment of cheques drawn on his banker.

d.

Minimum initial Deposit

The customer must have to maintain the minimum amount with the bank according to the requirements.

e.

Operating the Account

After opening an account the banker gives to the customer

i. ii. iii. Pay-in-slip book Pass book Cheque book

f.

Qualification of a Customer

The relation of the banker and the customer is purely a contractual one. However, he must have the following basic qualifications He must be of the age of majority. He must be of sound mind. He must not be disqualified by law. The agreement should be made for lawful object, which create legal relationship. Not expressly declared void.

15

3.2

NATURE OF ACCOUNTS

The different types of accounts being generally opened by a bank are as follows: 3.2.1 Individual Accounts The accounts opened in the name of one person are called individual or personal account. While opening the individual account, the details about following columns should be taken carefully: Occupation Address Special instructions Next of kin Copy of N.I.C.

3.2.2 Partnership Firms Account As per section 4 of the Partnership Act, 1932: Partnership is the relation between persons who have agreed to share the profits of the business, carried on by all or any of them acting for all. A partner is the agent of the firm having powers to execute transactions for the purpose of the business of the firm. A retiring partner has no liability so far as the transactions after retirement are concerned, if a notice of such retirement has been given to the bank. Otherwise, the retiring partner continues to be liable, even for finances made after his/her retirement. In case of the death of a partner, the firm will be dissolved. The account should therefore, be closed and a new account will be opened with the remaining partners.

16

3.2.3 Joint Accounts The account in the name of more than one person is called joint account. The account shall be operated on by: Any one singly or survivor or either or survivor(s). Any two or jointly or survivor(s). All jointly or survivor(s). The survivorship mandate should be taken. Signature of all partners at the specified places.

3.2.4 Joint Stock Companies Account While opening the account of the company the following documents should be taken: Attested copy of the N.I.C of each Director. Copy of the Certificate of Incorporation. Copy of Memorandum and Articles of Association. Copy of the Resolution of the Board of Directors. List containing the names and signatures of the Directors. Copy of the Commencement of Business (in case of public limited company). Audited Balance Sheet.

3.2.5 Associations, Societies & Clubs Accounts Accounts are often opened in the names of non-trading institutions such as Clubs, association, schools, committee, funds and Unions.

17

The following documents should be taken Attested copies of N.I.C of all the office bearers. Certified Copy of the bye-laws or rules & regulations. Copy of the Resolution of the Governing Body/Managing Committee. Account opening form duly signed by the authorized persons. List containing the names, addresses and signatures of the Directors.

3.2.6 Trust Account A Trust has been defined in section 3 of Trust Act, 1882, in the following terms: A Trust is an obligation annexed to the ownership of property and arising out of a confidence proposed in and accepted by him for the benefit of another, or of another and the owner. Any person who is competent to contract may create a Trust which must be for a property transferable to the beneficiary. The account should be opened in the name of Trust and all the trustees should sign the account-opening form. The banker should examine the Instrument of Trust very carefully, and a copy of it should be kept on record. The Deposits Section The deposits section is one of the most fundamental sections of any bank. This section had been set up with a view to accept deposits from general public, which was also a central idea to create a bank. It will not wrong to say that the banking starts from this section. Deposits provide most of the raw material for bank loans and thus, represent the ultimate source of bank profits and growth

18

Types of Deposits/Products offered First Women Bank classifies deposits on the basis of duration and purpose for which these are kept with the bank. They are as follows: PLS (Saving Deposits) PLS means Profit and Loss sharing Account. Here the bank shares with the customer the profit or loss resulting from investment of customers funds along with the banks pool of funds. Salient Features i. This account is opened with Rs.100/- at the end of each half accounting period. ii. Profit is declared by the head office of FWBL and the profit is distributed amongst all the branches. iii. iv. For profit the minimum balance is Rs.5, 000. Profit or return is paid bi-annually on minimum monthly balance (JanJune & July-Dec.) which is announced in July and January respectively. v. Generally withdrawals from PLS saving accounts are allowed on demand, i.e. without any prior notice of withdrawal. vi. All cheques and other instruments should be crossed, before they are deposited for credit into account. vii. Zakat is deducted from the balance outstanding on the first day of every valuation date i.e. 1st Ramadan. viii. ix. Overdraft/CF is not allowed in PLS saving accounts. Withholding tax on the profit amount is to be recovered whenever profit is paid on deposit account

19

PLS (Term Deposits) The PLS Term Deposit is non-interest bearing techniques. It is also called time liability because it is kept for a certain period of time by the bank. Initially this type of deposit was called as fixed deposits but after the islamization of banking system in 1985, its name has been changed from fixed to PLS Terms Deposit. Salient Features 1. The minimum deposits is accepted by the bank with the sum of Rs.1000/2. 3. The maximum deposit has got no limit. The deposits are accepted for the period from three months maximum to above. 4. The maturity dates are 5 years, 4 years, 3, 2, 1 year, 6 months and 3 months. 5. 6. Every six months the profit rates are changed. The PLS term depositors would be eligible for sharing profit/loses with the bank at true rate determined by the bank. 7. 8. Where profits and losses would be distributed on half yearly basis. On the maturity, the depositors shall have an option either to draw the deposit and the amount of his profit share if any or renew the deposit.

Current Deposits A current account is that account which is payable on demand. A holder can withdraw the money on any date during working hours without giving any

20

prior notice to the bank. That is why the bank has to keep sufficient funds to meet uncertain funds of the current account holder. Salient Features i. The account holder is expected to maintain a minimum balance of Rs.500/- in his account or whatever the minimum amount is prescribed for the purpose. ii. iii. No profit or return is paid on current accounts. The deposits and withdrawals can be made through cheques, demand drafts, pay orders etc. drawn on the branch. iv. These accounts are completely exempted from withholding tax and Zakat deduction.

Call Deposit Account It means the deposit from which the money deposited can be withdrawn at any time by presenting receipt of call deposit issued from the bank. The purpose of these deposits is to serve as a guarantee provided by bank to any department either public or private in taking or giving tenders. This type of account is for the purpose of to participate in tender bid; contractors are required to deposit a certain amount or percentage of the tender amount along with the tender documents for which Call Deposit Receipt are issued by Banks. Call deposit are return free. When a contractor requires such a receipt, He approaches his bank for the issuance of Call Deposit Receipt.

Foreign Currency Term Deposits All individuals including resident citizens and corporate bodies are entitled to get term deposits. Foreign currency accounts are opened on proper introduction and submission of required documents along with an initial deposit prescribed from time to time. Banks are allowed by SBP to fix their own rates of interest for term deposits of 3 months, 6 months, 12 months, 2

21

years and 3 years provided they do not exceed the Euro-Dollar Bid rates of Barclays Bank, London, plus the margins prescribed by SBP from time to time. The Barclays Bank Bid rates and the maximum rates for payment of interest including margins allowed by State Bank are published daily by Foreign Exchange Rates Committee. Salient Features i. Interest on term deposits of 2 years and 3 years will be paid on yearly basis. ii. The return on foreign currency account will be paid on six month basis during June & December. iii. The return on term deposits will be paid on maturity or as prescribed by the state bank of Pakistan. iv. Term deposits will be automatically renewed for a like period and amount including or excluding return as per instruction by the depositor.

3.3

REMITTANCES DEPARTMENT

Along with other services, FWBL is also providing the facility of transfer of funds from one bank to another bank and from one place to another place. The transfer of funds is the main responsibility of the remittances department. 3.3.1 Mail Transfer (MT) It is a mode of transferring money from one branch to another branch within the city or outside the city or outside the country. It is an order by a bank to its branch, agent or correspondent in a foreign center. It is an order to pay a specified sum of money to the person named in the mode of transfer. It is sent by sea or airmail.

22

If the customer is an account holder of the bank, then the bank will debit his account. The concerned officer will fill three forms to make the mail transfer complete. The forms used for this purpose are listed below Debit Voucher Credit Voucher Mail Transfer Register Entry

If the customer is not an account holder of the bank, firstly, he/she has to deposit money and then the above said procedure will be adopted to transfer his/her money. 3.3.2 Telegraphic Transfer (TT) With the changing requirements of today, NBP has introduced the fastest transfer of money possible, i.e. telegraphic transfer. This service may be provided to the public on their written request and against the value received. In case of telegraphic transfer, instructions regarding payment are sent to the drawee branch telegraphically i.e. the order to pay is sent by cable. These telegrams, which authorize payment to the payee, should be sent to the drawee branch in a coded language and under a confidential number known as a test number The rate of TT is always higher than the rate of MT. 3.3.3 Demand Draft (DD) Demand draft (DD) is another way of transfer of money from one bank to another bank. It is a written order, drawn by one branch of a bank upon another branch of the same bank, to pay a certain sum of money to or to the order of a specific person. Drafts are not issued, or drawn on branches situated within the same city. Any person whether an account holder of the bank or not, can purchase a Demand Draft from a bank branch.

23

3.3.4 Payment Order (PO) Payment order (PO) is the most convenient, simple and secure way of transfer of money. It is used for local transfer only. A pay order is a written order issued by a bank or its branch, drawn upon and payable by itself. It is an order to pay a specified sum of money to or to the order of a specific person. For the issuance of Pay Order FWBL charges Rs.50 (flat) and for the Cancellation/Issuance of Duplicate FWBL charges again Rs.50 (flat). 3.3.5 Travelers Cheque Travelers cheque is an order drawn by a bank upon itself to pay a specified sum of money on demand to the purchaser of the cheques. The paying bank after comparing the signature of purchaser which he has signed at the time of the purchase of cheques makes the payment.

3.4

CLEARING DEPARTMENT

The main function of the clearing department is the interchange and settlement of credit claims. This is usually done through a clearing house. A clearing house is an association of commercial banks setup in a given locality, for the purpose of interchange and settlement of credit claims. The function of a clearinghouse is performed by the central bank of a country by tradition or by law. In Pakistan, the clearing system is operated by the State Bank of Pakistan. If SBP has no office at a place, then the NBP, as a representative of SBP, acts as a clearinghouse. The mechanism whereby cheques are exchanged in bulk and the cross obligations of banks are offset is explained in brief as follows. In practice the person receiving a cheque as payment deposits the cheque at the bank where he/she has an account. The cheque is deposited for collection purposes. The bank stamps the cheque which states that the payees account

24

will be credited on realization from the other bank i.e. the bank on which the cheque is drawn. Now the bank in which the cheque has been deposited becomes creditor of the drawer (other) bank. The debtor bank will pay the amount of cheque by transferring it from cash reserve, if there are no offsetting transactions. At the same time, the creditor bank receives large amounts of cheques drawn on it by other banks giving claims of payments by them. It will be most uneconomical and confusing if the bank had to transfer cash for meeting each liability. The easiest and safest way is to offset the reciprocal claims against one another and receive only the net amount owned. This facility is provided by the clearing house i.e. SBP. In Peshawar, the cheques of the clearing department are sent to the FWBL, Mall Branch for clearing at clearinghouse. The official of the clearing department make entry of Cheque coming form each branch in a register, which is called Transfer Delivery Register. Then they arrange the entire cheques bank wise. The representative of all commercial banks meets at a fixed time on all the business days of the week in the morning is SBP. The representative of FWBL hands over the cheques drawn on other banks to the representative of the bank and collects the cheques drawn on FWBL. A summary sheet is prepared which shows the amount and name of the Branch and bank on which the cheque was drawn; the total number of cheques delivered and received by them and the total amount is calculated. After this process the officials of clearing department separates cheques of each branch of FWBL. Which are then send to the respective branches via peon for clearing. Then three copies of Inter Office Advice Clearing are prepared. This show the net amount credited or debited. One copy is sent to HOK, one to the concerned branch and the other for office record. The branches of FWBL receive the cheques, DDs, RTC for clearing. They check all these and if some condition is unfulfilled, they are returned to Main Branch with the reason showing the causes of dishonor. The branches keep the

25

honored cheques. The peon collects the remaining cheques form branches and submits these to the Main Branch. The officials at the clearing department makes required changes in Transfer Delivery Register, if cheques are returned from branches. In the second session of the clearinghouse, representatives of the banks meet again. There the dishonored cheques are returned to the representatives of the banks. The net amounts owed or payable are settled by debiting/crediting the bank by the SBP official. The functions of the clearing department are very technical and require accuracy and quick response. Delay or negligence in the clearing department is very costly to the bank.

3.5

FOREIGN CURRENCY ACCOUNT SECTION

The section deals in foreign currency accounts. The account can be opened in personal name or joint names by Pakistan residents or non-residents or nonresidents foreign Nationals. Foreign currency account can be opened in four global currencies i.e. US Dollar, Pound Sterling, Japanese Yen and Deutsche Mark. Travelers cheques and foreign currency notes can also be issued to the holders of the personal and joint account. Travelers cheques, foreign currency notes and foreign exchange generated by enchasing (F.E.B.Cs) Foreign Bearer Certificate may be deposited in these accounts. Rupee loan facility is also available against this account. The foreign currency account holder can draw any amount of foreign exchange from foreign currency account and transfer or remit the amount freely to any part of the World without any restrictions.

26

The restrictions imposed by State Bank of Pakistan for the opening of Foreign Currency Account in absence of passports, work permit and resident visa have been withdrawn. The account will be restriction free. The prime currency scheme is exempted from all form of taxes including income tax, wealth tax and zakat dedications. The return on the scheme is up to 10% per annum, payable in foreign currency only. FWBL ATM & ONLINE BANKING FWBL has introduced FWBL ATM and Online Banking effective from August 10, 2006. Now, FWBL customers can withdraw cash from any ATM carrying the MNET sign across Pakistan. At present this facility is available at following branches. Karachi Lahore Islamabad Imperial Court Main Boulevard Blue Area

SUPPORT SERVICES FOR WOMEN FWBL recognizes that the access to credit alone is not sufficient to economically empower women. Therefore FWBL also offers a number of services to support the women:

3.6

BUSINESS CENTER

The FWBL Business Center spells a new era of economics empowerment and development center of opportunities aimed at improving business run by women. There are three Business centers at Karachi, Lahore and Islamabad. Business Center Lahore and Islamabad started their operation in Feb 1999, while Karachi in May 1999.

27

Aims
Developing new women Entrepreneurs Linking the center with branch network countrywide. Providing Women Entrepreneurs information and business advice relating to business panning and management Finance Sales & Marketing Export Quality standards. Exhibitions of products at Chamber of Commerce and Export Promotion Bureau and other places at concessionary rates. Lecture / Seminars on business, Management and Export.

Target Group of Women

House Wives Working Women

Female Student Strategy Educations Economic of enlistment

Welfare of women and their families

Activities To achieve the above mentioned aims and objectives the following activities are carried out on regular basis. 1. Shorts terms courses (One Month).

28

2. 3. 4. 5.

Workshops (Two or Three days). Advanced Courses (More then one month ) Exhibition & Display of products Advisory Services & Counseling

Summer Camp Business Center offered special courses for female students during their summer vacations at discounted rate. Admission Procedure Admissions are granted on first come first served basis. Nominal fee is charged for each course. Registration fee of cost.

Business Center Offices Karachi Lahore Islamabad

Target Group of Women

House Wives Working Women

Female Student

29

Strategy Educations Economic of enlistment

Welfare of women and their families

Activities To achieve the above mentioned aims and objectives the following activities are carried out on regular basis. 1. 2. 3. 4. 5. Shorts terms courses (One Month). Workshops (Two or Three days). Advanced Courses (More then one month ) Exhibition & Display of products Advisory Services & Counseling

Business Center Offices Karachi Lahore Islamabad

3.6.1 Computer Literacy Centers Computer literacy center play an important role in developing computer skills amongst urban poor, unemployed and businesswomen. These centers are located centrally at Karachi, Lahore and Islamabad and have trained 6,784 women in computer literacy.

30

CHAPTER

4
4.1

CREDITS &ADVANCES

BUSINESS LOANS FOR WOMEN

FWBL extends loan to business women for establishment of new business/development of existing business, and for working capital. Women can get loans ranging from 100,000 to 500,000. The Financial Services Desk of the bank assists the applicants of the loan in financial, legal, taxation, marketing and management issues.

4.2

EDUCATION LOANS FOR WOMEN

Often women are deprived of their right to pursue higher education mainly because of the financial constraints many family face. Society does not realize that well-educated enlightened women health by rearing an equally enlightened future generation. First Women Bank Ltd. offers education loan at an attractive rate, with special bonus for the bright students who meet the bank's merit criteria.

4.3

PERSONAL LOAN FORWOMEN

With personal loan, women can get a greater spending power. Women can utilize this loan to fulfill any of their need. It provides an extra spending power around the house no matter what needs might be.

31

Women can get loans ranging from Rs. 100,000 to Rs. 500,000. The Financial Services Desk of the bank assists the applicants of the loan in financial, legal, taxation, issues. marketing and management

4.4

FIRST CHOICE

"FIRST CHOICE" Scheme facilitates women by presenting loans for buying consumer durables. Through this scheme, women can buy electrical appliances for their home and kitchen, which they otherwise could not afford due to budgetary constraints with the convenience of paying on monthly basis.

4.5

FIRST CAR

The scheme "First Car" is designed to assist women from all walks of life to

conveniently avail car loan facility from the bank on low markup rates. The scheme is specially designed for working women who often face problems in commuting to their workplace. FWBL's 'First Car' offers competitive financing rates, low down payment,

flexible repayment option, quick processing and insurance coverage from reputable companies. First Women Bank Ltd. has the distinction of being the world's only bank designed to meet the financial needs of women. The Bank has introduced innovative schemes aimed at promoting the economic prosperity of women. First Car is the first of its kind car ownership scheme designed exclusively for women. Salient Features:

32

Financing up to Rs.1,000,000/Mark-up as low as 9% p.a. 10% Down Payment Quick processing Comprehensive insurance coverage from reputed insurance companies Low processing fee Repayment period up to 5 years Flexible repayment option No pre-payment penalty

You can apply if you are: a National Identity Card holder between the ages 21 and 60 years, at the time of maturity of Finance a businesswoman/ salaried or self-employed professional in employment for 3 or more years and earning at least Rs.25.000/- per month. Minimum take home salary Rs.15.000/ per month with a service contract valid for 18 to 60 months at the time of applying limit maintaining a bank account with any bank for the last 6 months Documents you need to provide: Salaried Individuals: Copy of National Identity Card Two recent passport size photographs Salary certificate with details regarding date of joining, designation, experience and salary particulars Bank statement for last six months Copies of utility bills (residence) / Bills of Mobile Phone / Credit Cards

33

Professionals: Doctors, Engineers, Architects, Teachers, Professors with minimum

experience of three years in same profession.

Copy of National Identity Card Two recent passport size photographs Bank statement for last six months Proof of profession Tax return for last two years Copies of utility bills / Bills of Mobile Phone/ Credit Cards

Business / Self-employed: Copy of National Identity Card Two recent passport size photographs Declaration of proprietorship/ registered partnership deed Bank statement for last six months Tax return for last two years Copies of Utility Bills/ Bills of Mobile Phone/ Credit Cards Business proof along with financial statement for last two years Women who do not fall in the aforementioned categories can jointly apply with their spouse or next of kin where the spouse's/ next of kin's salary will be combined wftti the applicant's income to determine monthly repayment capacity. Monthly instalment must not be more than 35% of take home salary in case of salaried women and monthly declared income in case of selfemployed or businesswomen.

4.6

MICRO FINANCING

FWBL is amongst the pioneers in micro-finance. In 2001 Women World Banking acknowledged FWBL as leader in micro-finance for its innovative products and services.

34

The three-pronged strategy of FWBL micro-finance model is: Extending micro-credit to the Urban and Rural Women. Offering wide-ranging support services. Research, documentation and compilation of women centric data.

The Micro-Finance product offers; Ranges from Rs. 5000 to highest credit amount in the industry; of Rs. 100,000 Mark-up rates are amongst the lowest n

Thus retaining and elevating micro borrowers to higher micro-credit ceilings

4.7
1.

SME FINANCING
The model of First Women Bank Ltd. is the way forward, which believes that a "micro-borrower" of today is a potential "SME" and a "Corporate Client" of the future.

2.

The Bank offers SME Loans to Women Entrepreneurs:

3.

Funds for start-ups

4.

Working capital / Export Finance

5.

These medium term loans to established SMEs help them to purchase new equipment.

35

CHAPTER

5
5.1

HUMAN RESOURCE SECTION

RECRUITMENT

Recruitment involves seeking and attracting a supply of people from which qualified candidates for jobs vacancies can be selected. Appointment in the bank is either; Through promotion. Trough direct recruitment.

In case of Appointment through Promotion, the employees possessing the required qualifications, serving in lower grades are eligible to be promoted to the upper levels. In Direct Recruitment, the bank makes appointment through external resources. Recruitment of the employees under this category follows a systematic procedure with the three main steps; Advertisement of the vacant position. Aptitude Tests Interviews

Most of the appointments are done on contract basis.

5.2

TRAINING

Training means acquiring skills or learning concepts to increase the performance of the employees.

36

Training of the work force is an important part of the Human Resource Department. The training aim of FWBL says; We want to continuously enhance professional competence of our employees by means of effective training and development. 6 The Bank is successfully conducting training programs at its Training Division in Karachi and Islamabad and through other external agencies like LUMS, NIPA, and IBP etc. Besides this, at branch level, the junior employees are provided with on-theJob Training, where they are put under the supervision of the senior employee, who is made responsible for their performance. The Bank has for the first time hired 21 Graduates Management Trainees offering market based salary package and extensive advance level 6 weeks training through IBP.

5.3

RETIREMENT

Every year the bank offers its employees to submit their option for voluntary retirement under the Voluntary Retirement Scheme. In such cases the rules applicable to the scheme are followed.

5.4

STAFF RETIREMENT BENEFITS

The Bank operates provident and un-funded pension scheme for the eligible employees. The employees only make contribution to the provident fund scheme.

5.5

RESIGNATION

In case of resignation by any Bank employee, the Branch Manager is required to carry out an Exit Interview, to find out the actual reason for the resignation.

37

5.6

PROMOTIONAL POLICIES

Being a small bank, with limited resources FWBL has not been able enough to create a competitive edge for itself over other commercial banks through effective promotional activities. However, the Bank maintains its market position by providing excellent counter services to its customers, offered by all its branches. The main objective of the Bank is the financial assistance of the women for whom it has constantly launched various financing schemes as part of its promotional tools. Small loans in the form of Micro Credits and the recently launched schemes are also serving the purpose. Apart from financing small businesses of urban and rural women, it imparts Skill Development/Enhancement Training Programs in various lines of he businesses to attract more and more customers. It has helped in the development of 6,500 new entrepreneurs who are successfully running their businesses and thus adding to the GDP of the country.

38

CHAPTER

6
6.1

FINANCIAL ANALYSIS

RATIO ANALYSIS

To evaluate a firms financial condition and performance, the financial analyst needs to perform check ups on various aspects of a firms financial health. A tool frequently used during these check is financial ratio or index, which relates two pieces of financial data by dividing one quantity by the other for the ratio analysis of the bank the data for the year 2006 and 2007 has been used which is the last publish data available. A few financial ratios have been calculated which are as follows: 6.1.1 Profitability Ratios Net Profit Margin (Or-Net Return On Sales)

We apply the formula for net profit margin: Net profit margin Net profit margin 2006 = = = = = profit after taxation X 100 Markup 165910X100 722410 0.22% 157887X100 685346 0.23%

Net profit margin 2007

It shows the after taxation the profit margin per dollar of markup. Its shows as the FWBL increases its par dolor profit by 0.01%. This indicates FWBL has been succeeding to control its operational expresses during the year 2007.

39

G58 Gross Profit Margin

We apply the formula for gross profit margin. Gross profit margin = markup - cost

Gross profit margin 2006

722410-237905 722410

= Gross profit margin 2007 =

0.67= 67% 685346-171694 685346

74.9%

74.9%

The gross profit margin indicates the total margin available to cover operating expense. Thus its indicating FWBL increases its gross profit by 7.9% and its earning is more then its expenses. Return On Total Assets

We apply the formula for return on total assets: Return on assets = profit after Ration X Total assets Return on total assets 2006 = 165910X100 8989402 = Return on total assets = 1.85% 157887X100 8985576 = 1.75%

The return on asset of bank has been dropped from .1.85% in 2006 to 1.75% in 2007. This show management fails to utilize the assets of the bank efficiently.

40

Return On Stockholders Equity (Return On Net Worth)

We apply the formula: for return on net worth: Return on equity = profit after taxation X 100 Shareholder equity Return on equity2006 = 165910 X 100 868479 = Return on equity 2007 = 19.10% 157887X 100 1028116 = 15.35%

The return on equity of bank had declined to 15.35% in 2007 as compare to 19.10% in 2006, due to lower profit after taxation of the bank in 2007. 6.1.2 Liquidity Ratio Current Ratio

We apply the formula for current ratio: Current ratio = Current Assets Current liabilities Current ratio 2006 = 243887 7958955 = Current ratio 2007 = 0.306 2439449 7794923 = 0.313

Current ratio of bank has been increased to 0.306 in 2006 as compare to 0.313 in 2007. This means that the bank has more current assets reserve then its current liabilities.

41

Cash Ratio

We apply the formula for cash ratio: Cash ratio = cash Current liabilities Cash ratio 2006 = 7646937 83868821 = Cash ratio 2007 = 0.091 8601193 101314945 = 0.085

The current ratio of the bank has been reduces to 0.085 in 2007 from 0.091 in 2006. This means that the bank has now less cash on hand to retire the current liabilities. 6.1.3 Leverage Ratio Debt-To-Assets Ratio

We apply the formula for debt-to-asset-ratio: Debt-to-asset ratio = Total debt Total assets Debt-to-assets ratio 2006 = 8054770 8989402 = Debt-to-asset ratio 2007 = 0.896 7897332 8985576 = 0.878

The debt-to-asset ratio of the bank has been increased to .878 in 2007 from 0.896 in 2006. This means that the bank borrowed fund more the in pervious year. This debt includes both long term and short term debt.

42

Debt-To-Equity Ratio

We apply the formula for debt-to-equity ratio: Debt-to-equity ratio = Total Debt Stock holder equity Debt-to -equity ratio 2006 = 8054770 868479 = Debt-to-equity ratio 2007 = 9.27 7897332 1028116 = 7.68

The debt equity ratio of bank has decreased to 7.683 in 2007. As compare to 9.27 in 2006. This means that liabilities of bank have decreased in 2007 as compared to the bank's liabilities in 2006. Long-Term Debt-To-Equity Ratio

We apply the formula for long-term debt-to-equity ratio: Long term debt-to-equity ratio = long term debt Total stockholder equity

Long term debt-to-equity ratio 2006 =

3066249 868479 = 3.53

Long term debt-to-equity ratio 2007 =

3063507 1028116 = 2.97

The long term debt-to-equity ratio of the bank has decreased to 2.97 in 2007 as compare to 30583 in 2006. This mean that bank have 0.56 less then pervious year which show weak capital structure.

43

Times Interest Earned (or Coverage ) Ratio We apply the formula of times interest earned ratio: Times interest earned ratio = profit before interest & taxation Total interest charges Times interest earned ratio 2006 = = Times interest earned ratio 2007 = = 540796 284312 1.90 578072 339650 1.70

The time interest earned ratio of the bank has decreased to 1.70 in 2006 as compare to 1.70 in 2007. This mean that bank have 0.2 earnings which can decline without the firm becoming unable to meet its annual interest cost.

44

Table 6.1: FWBL Financial Turnaround Ratios

2000 Return on average Equity (ROAE) % Advances / Deposits ratio % Income/Expenses Ratio Times 37.27 17.78 1.25 2001 28.86 13.49 1.86 54 13.20 17.50 1.82 2002 6.97 13.25 1.82 55 12.7 32.32 0.58 2003 25.44 1610 2.30 43 9.22 31.46 1.78 2004 21.02 19.37 1.97 51 7.05 2005 187.38 28.74 1.87 53 8.80 2006 17.75 44.72 1.90 53 10.54 32.95 1.70 2007 15.65 41.35 1.78 56 11.20 38.36 1.93

Expenses/Income Ration 80 % Return on Advances -A % 10.69

Net asses value per share 5.50 Rs Return on Average Assets (%) - (ROA) 1.23

120.18 25.62 1.28 1.33

Source:

Annual Report of First Women Bank 2007

Graph - 6.1: Advances /Deposits Ratio %

45 40 35 30 25 20 15 10 5 0 44.72 41.35

28.74 17.78 13.49 13.52 16.1 19.37

2000

2001

2002

2003

2004

2005

2006

2007

Interpretation: The percentage of advances to deposits is increasing and reaches 44.72 in year 2006. But in 2007 the ratio is decreased to 41.35. But the average trend of % is increasing which shows good performance of the bank.

45

Graph - 6.2: Return on Advances -A-%

15 10.69 10 5 0 2000 2001 2002 2003 2004 2005 2006 2007 13.2 12.7 9.22 7.05 8.8

10.54 11.26

Interpretation: Return on advances do not have better increase and is increased only by 0.57% which do not show a very good performance.

Graph - 6.3: Net Asset value per share-Rs

38.36

40 30 20 10 0
5.5 17.5

32.32

31.46 25.62 20.81

32.95

2000

2001

2002

2003

2004

2005

2006

2007

Interpretation: Net assets value per share is Rs.5.5 in 2000. Then it increases for three years to Rs. 31.46, but in 2004 it falls to Rs. 20.18. But after that it increase to Rs. 38.36 for year 2007.

46

Table 6.2: FWBL Financial Turnaround

Rs. in Million 2000 Paid up capital Share holders equity Total Assets Advances (Gross) Deposits Pre tax profit /Loss 200 110 3870 604 3398 26 2001 200 250 7234 832 6167 115 2002 200 646 8213 872 6580 135 2003 200 629 9744 1308 8126 270 2004 284 590 9647 1683 8690 211 2005 284 727 10503 2505 8716 221 2006 284 935 8989 3115 6965 256 2007 284 1,088 8985 3129 7569 238

Source: Annual Report of First Women Bank 2007

G rap h - 6.5: T o tal A ssets

1 20 00
9744 9647 10503 8989 8213 7234 8985

1 00 00 80 00 60 00
3870

40 00 20 00 0 2 0 00 20 0 1 2 00 2 20 03 2 00 4 2 00 5 20 06 2 00 7

Interpretation: Total assets of the bank increasing trend of Rs.10503 million in year 2005. Bur for 2006 and 2007 the assets are declining. But if we see over all performance so it is good.

47

G rap h - 6.6: Ad van ces (G ro ss)

350 0 300 0 250 0 200 0 150 0 100 0 50 0 0 2 000 2 001 2 002 2 003 2 004 2 005 200 6 200 7 604 832 1 308 8 72 1 683 250 5 311 5 312 9

Interpretation: Advances of the bank is increasing since 2000 which shows good performance of the bank and the bank tending is increasing which is very important for a bank.

Graph - 6.7: Deposits

10000 8000 6000 4000 2000 0 2000 2001 2002 2003 2004 2005 2006 2007
3398 6167 6580 8690 8716 6965

8126

7569

Interpretations Deposits of the bank increase since 2000 in which the deposits are Rs. 3398 million to Rs. 7569 million in 2007. Increase in deposits shows that bank is performing quite well. This shows that the customers confidence has been improved overtime.

48

CHAPTER

SWOT ANALYSIS

SWOT is an acronym for an organizations Strengths, weaknesses, Opportunities and Threats. A SWOT analysis consists of sizing up a firms internal strengths & weaknesses & its external opportunities & threats. It is a tool to get a quick overview of firms strategic situation. In the following lines is the SWOT analysis of FWBL.

7.1
1.

STRENGTHS
It has more branches and therefore accessible to more potential customers. It has the ability to cope with pressure of competition and has several times come out of competition successfully. It has modern technology and resources to cater to its customers. Staff is young and rich in experience and working skills. It has the good will of people and it is an asset to it. It provides services to Pakistanis outside the country. Unique character and existence. It offers attractive schemes from time to time.

2.

3. 4. 5. 6. 7. 8.

7.2
1. 2. 3.

WEAKNESSES
Marketing skills of the bank need improvement. Lack of consistency among branches. Banks internal environment does not match with its Smart image.

49

4. 5. 6.

Poor communication among different level of management. Rules and regulation are not strictly followed. Employees lack motivation.

7.3
1. 2. 3. 4. 5. 6.

OPPORTUNITIES
Bank should take interest and explore new market segments. Expend branches providing an easy access to customers. Increase its product line by providing new services. New schemes should be introduce for overseas Pakistanis. Reduce risk by increasing credit facilities to lower income groups. New technological advancement like: Tele bank and internet banking facilities should be started in order to serve the customers more efficiently.

7.

Customers feed back on different products and accounts can really improve the bank performance and encouraged the atmosphere for other future policies.

7.4
1. 2. 3.

THREATS
Increasing number of foreign banks in the country. Privatization of other domestic banks. Highly specialized and attractive services provided by foreign banks to their customers. Inconsistency in governments policies regarding to business and economic sector. Growing global technological advancement. Strict regulations by the government over credit facilities to the customers as well as to meet the prudential regulations.

4.

5. 6.

50

7.

Loss of confidence of overseas prospects/customers due to freezing of accounts.

From SWOT analysis I have concluded that the management of the bank should adopt systematic planning for the bank growth, communicate with all management levels of the bank, discover new segments of the customers by offering new schemes, introduce new technological advances in their operations. Also the bank should give more attention to its existing customer by catering their needs and informing them about ongoing activities and services.

51

CHAPTER

8
8.1.

FINDING & RECOMMENDATIONS

GENERAL ORGANIZATION FINDINGS

8.1.1. Centralization FWBL has a centralize structure. There is no delegation of authority to the lower management. In order to improve the performance of the staff and to build confidence, some authority must be delegated to the lower management. 8.1.2. Improper distribution of resources In FWBL there is an improper distribution of duties and responsibilities among the officers. Officers of the same grade are often performing more duties and have more responsibly as compare to other officer. 8.1.3. Product Rates Products rate are not high enough to attract the customers to have a better market share. 8.1.4. Negligence of Rules and Regulations Rules and regulations are not properly communicated to the employees therefore they usually neglect the rules and regulations. 8.1.5. Poor job rotation The rotation of jobs among officers is not done properly. Officers of the one department are often unaware of the working of the other departments so their must be a proper job rotation among the officers so that employees have know how of the whole system.

52

8.1.6. Promotional Policy The promotional policy of FWBL is very slow there are very few opportunities for upward advancement. 8.1.7. Branch Setup There are some deficiencies in branch setup, which creates disturbance and effect the efficiency of the employees. 8.1.8. Separation of Activities There is no separation of activities. Often a task is not performed by a single department instead it is done partially in one department and partially in the other .which results in conflicts among the officers. 8.1.9. Specialized Training The training provided to officers is based on generalization rather than specialization. Therefore after the completion of training the officer inducted into a specific field faces difficulty 8.1.10. Markup Charges The bank charges a high markup rate on short-term loans as compare to the other banks. 8.1.11. Marketing at Desk The bank officers are doing very little on their own to explore the possibilities of selling banking services to the people with whom the bank has no account or regular business relationship. 8.1.12. Training Program The training program of bank is not adequate. Both specialized and generalized training should be provided to fresh as well as on-job workers to maintain high standards of services. The training program of bank should include scientific techniques to improve the decision-making and inter personnel as well as individual needs of the employees.

53

8.1.13. Public Communication There is no proper way of giving the information that customer need which has a negative effect on the efficiency of the services. 8.1.14. Use of Media The bank does not pay much attention to marketing. In order to increase market share the bank should properly advertise it self and introduce its services in detail through media. 8.1.15. Age of Retirement The age of superannuation is fixed at 60 years. A variable retirement age policy should be introduced. This will force the bank management to do more effective job of appraising the employees performance.

8.2

RECOMMENDATIONS

In the end I would like to end my report with some recommendations. These recommendations are based on my analysis. I hope that if the bank follows these recommendations, it will have a positive effect on the performance and profitability of the bank. 8.2.1. Improvement in customer services Constant improvement in customer services are needed in todays competitive environment. Personalized banking should be introduced to attract more customers. 8.2.2. Computerized telephone banking system The bank should introduce this product of modern banking, which guarantees to provide its clients the satisfaction with convenient, secure, time saving way of banking. The customer can always remain in touch by just a telephone call. This latest computer service will truly bring banking to homes and Offices and it can ensure the security of account by providing with a user ID with the help of which one can get the facilities of account balance, transaction history and currency rates etc by just a phone call.

54

8.2.3. Better feed back System There is a great need of improving an upward communication in the different management levels of the bank. For this purpose a better feed back system should be design. 8.2.4. Introduction of Management by Objectives (MBO) The concept of management by objectives should be introduced in the bank where the subordinates should be expected to formulate objectives for themselves. This will ensure the setting up of the objectives according to the capabilities of the individuals. In addition to this, it will also help in achieving the goals because they are involved in the process of goal setting. 8.2.5. Job rotation The employees of FWBL are specialist in their field but they need straightening in general banking. They are generally confine to their own work and do not give sufficient consideration to other departments. In order to have some basic information about other department, there must be proper job rotation. 8.2.6. Evaluating the job A detail and systematic study of the job should be done to know the nature and characteristics of the people to be employed. This will help in identifying the training needs and in appraising the performance of the employees. 8.2.7. Special Marketing Training In this competitive era, the bank should give special marketing training to employees for motivating customers. The training program of bank should include scientific techniques to improve the decision-making and inter personnel as well as individual needs of the employees.

55

8.2.8. Decentralization In order to increase efficiency and motivation of the employees, the bank must delegate some authority to lower grade staff. This will increase their confidence and they will consider them selves important and responsible. 8.2.9. Introducing Carrier Planning As a matter of personnel policy, personnel department should prepare a career plan showing their future growth potential, depending on the job performance and evaluation, which should be made known to the employees. Employees should be given opportunities to show performance. 8.2.10. Working Conditions The working area is comparatively smaller as compared to the needs of the branch. As a result there is lesser working space provided to employees. The congested place affects their efficiency at work. In order to have an efficient and effective out-put, better working condition should be provided. 8.2.11. Promotion and Publicity Like all the other successful banks the bank should enhance its business in the best way. It should adopt strong strategies for promotion and publicity of its services that they offer. 8.2.12. Product Innovation During this time of competition, the bank must come up with innovative products better than its competitors for their customers. 8.2.13. Expansion The bank should increase the number of its branches .they should not only expand their network nation wide but also out side the country. 8.2.14. Accommodation There should be proper seating arrangement for the customers as well as staff.

56

8.2.15. Proper Distribution of Work There is no proper distribution of work among employees. Some employees have more work to do which increase stress and load. The work should be distributed in such a manner so that there should be no undue burden on any one. 8.2.16. Latest Technology In order to save time latest software should be used in the bank. This will enhance the data processing speed of the computers. 8.2.17. Use of Motivation In order to motivate employees, individual must have a job with responsibility, advancement and growth. Such motivators should be used for efficient working. 8.2.18. Use of Media The bank can increase its market share by effective use of media and publications. it can introduce its services in detail and in a more easy manner through media. 8.2.19. More Friendly Environment Establishment of a friendly environment is very important because it will help to gain the interest of the employees in work. More space should be provided. There should be separate section for separate task. 8.2.20. Cost and Benefit Analysis Proper survey and research should be conducted before the introduction of any new schemes i.e. cost and benefit analysis should be viewed. 8.2.21. Revision of Policies The existing policies should be reviewed and there should be permanent revision of the policies from time to time

57

BIBLIOGRAPHY
1. 2. 3. Sidiqui Israr H, Practice and Law of banking in Pakistan, Royal book Company, Karachi, 1993, p.46. FWBL Annual Report, Karachi, 2005, p.8. Rue Leslie W. and Byers Lloyd L., Management Skills and Applications, Richard D. Irwin, Boston, 1992, p.572. Ibid, p.571. Ibid, p.573. FWBL Policy Manual, Karachi. FWBL Annual Report, Karachi, 2005, p.24. Ibid, p.2. Ibid, p.3. Ibid, pp.7-8. FWBL Policy Manual, Karachi, p.62. Ibid, p.64. Ibid, p.68-69. Ibid, p.73. Sidiqui Israr H, Practice and Law of Banking in Pakistan, Royal book Company, Karachi, 1993, p.68. Ibid, p.59. FWBL Annual Report, Karachi, 2005, p.110. Ibid, p.121. Ibid, p.24. Ibid, p.15. Ibid, p.106 Ibid, p.103.

4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.

16. 17. 18. 19. 20. 21. 22.

58

Balance Sheet
As at 31st Dec 2007

(Rupees in '000) Assets Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments - net Advances - net Operating fixed assets Deferred tax assets - net Other assets - net Liabilities Bills payable Borrowings Deposits and other accounts Subordinated loan Liabilities against assets subject to finance lease Deferred tax liabilities - net Other liabilities Net assets Represented by: Share capital Reserves Unappropriated profit Surplus on revaluation of assets - net of tax 193,321 21,543 7,569,059 62,057 931,520 6,965,378 809,657 384,792 1,245,000 3,159,640 3,063,507 148,686 174,294 8,985,576 705,703 301,056 1,431,628 3,137,533 3,066,249 153,060 4,536 189,637 8,989,402

11,000 102,409 7,897,332 1,088,244 95,815 8,054,770 934,632

283,650 207,336 537,130 1,028,116 60,128 1,088,244

283,650 175,759 409,070 868,479 66,153 934,632

Contingencies and commitments

59

Cash Flow Statement

For the year ended 31 December 2007
(Rupees in '000) Cash Flows From Operating Activities Profit before taxation Less: Dividend income 229,047 Adjustments: Depreciation Amortization of intangible assets Provision against advances - net Provision against other assets Gain on sale of operating fixed assets Bad debts written off directly 35,892 264,939 (Increase) / decrease in operating assets Lendings to financial institutions Advances Other assets (excluding advance taxation) 186,628 (15,323) 25,717 197,022 (Decrease) / increase in operating liabilities Bills payable Borrowings Deposits and other accounts Other liabilities 131,264 (909,977) 603,681 6,594 (168,438) 293,523 Income tax paid Net cash (outFlows) / inflow from operating activities (118,509) (609,734) 18,488 (709,755) 20,073 270,773 16,111 2,184 18,065 (313) (155) 256,484 5,784 250,700 13,528 1,035 5,583

(73)

(5,349) 85,370 (1,750,807) (50,989) (1,721,775) (2,160,757) (68,006) (2,228,763)

60

Profit and loss-Account

For the year ended 31 December 2007

2007 Mark up / return / interest earned Mark up / return / interest expense Net mark up/ interest income Provision for diminution in the value of investments Provision against advances net Bad debts written off directly Net mark up / interest income after providers Non markup / interest income Fee commission in brokerage income Dividend income Income from dealing in foreign currencies Gain on sale of securities Other income Total non-markup / interest income Non-markup / interest expenses Administrative expenses Other provisions / write offs / (reversals) other charges Total non-markup / interest expenses Extra ordinary / unusual terms Profit before taxation Taxation Current year Prior years Deferred Profit after taxation Unappropriated profit brought forward Transferred to stationary reserved Transferred from surplus on revaluation of fixed assets net of tax 20.1 Profit available for unappropriation Basic and diluted earnings per share after tax 685,346 171,694 513,652 18,065 18,065 495,587 31,672 9,375 4,406 24,115 12,917 82,485 578,072 332,517 (313) 7,446 339,650 238,422 82,464 (17,563) 15,634 80,535 157,887 409,070 (31,577) 1,750 379,243 537,130 5.57

2006 (Rupees in 000) 722,410 237,905 484,505 5,583 5,583 478,922 35,391 5,784 4,073 3,306 13,320 61,874 540,796 284,219 93 284,312 256,484 89,067 2,536 (1,029) 90,574 165,910 276,054 (33,182) 288 243,160 409,070 5.85

61

Statement of Changes in Equity

For the year ended 31 December 2007
Share capital Capital/ reserve inventor y reserve 142,577 Revenue reserve / unappropriated profit 276,054 165,910 288 Total

Balance as at 31 December 2005 Changes in equity for the year 2006 Profit after taxation for the year ended 31 December 2006 Transferred from surplus on revaluation of fixed assets to unappropriated profit net of tax Total recognized income for the year ended 31 December 2006 Total referred to statutory reserve Balance as at 31 December 2006 Changes in equity for the year 2007 Profit after taxation for the year ended 31 December 2007 Transferred from surplus on revaluation of fixed assets to unappropriated profit net of tax Total recognized income for the year ended 31 December 2007 Transferred to statutory reserve Balance as at 31 December 2007

283,650

702,281 165,910 288

283,650

33,182 175,759

166,198 (33,182) 409,070

166,198 686,479

157,887 1,750

157,887 1,750

31,577 283,650

159,637 (31,577) 537,130

159,637

1,028,116

62