Habib Bank Intership Report By Junaid Javaid

INTERNSHIP REPORT HABIB BANK LIMITED Furniture Hub Branch, G.T Road Gujrat

Supervised by: Mr. Asim Ali Prepared By: Junaid Javaid 06108082 Semester: 7th Date of Submission: 12-OCT-2009

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ACKNOWLEGEMENT All the praises are for “Almighty Allah” whose uniqueness, oneness and wholeness are absolute. Who gave me enough courage, knowledge and ability to accomplish this assignment? All respects are for His “Holy Prophet Hazrat Muhammad” Who enabled me to recognize oneness of my Creator? My Parents whose rising gave me character and a compassionate heart. So I pay my gratitude to Mr.Hassan Jabar whose cooperation on every step of this subject is highly appreciable. Without his cooperation it was not possible to complete this task. …………………………………..

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EXECUTIVE SUMMARY This report is on my corporate sector internship. And for that internship I chose the organization which is recognized for its most number of bank branches operating in Pakistan named Habib Bank Limited. I preferred to HBL branch situated at Furniture Hub G.T Road Gujrat. And for doing internship in that branch me and my two fellows received the reference letter from the Branch Manager Mr. Asim Ali. Me and my two friends began our internship on 03 August 2009. We spent the first week in noting the brief history and introduction given by Mr. Asim Ali. From the second week, we started our practical work and in that we worked for clearing department where we used to receive cheques from the customers drawn on different branches. In the third week, we started working in deposit department of bank. There are almost seven types of deposits offered by the Habib Bank, so we spent the whole six days while in the understanding the purpose and concept of each deposit type. On the forth week, we were stayed at the Bill Department of the Branch where we collected the bills of Electricity, PTCL & SSG, and also in the understanding of Bill Department Functions. From the fifth week, we started working for Remittance Department, where we make Pay Orders, Pay Slip, Demand Draft and Telegraph Transfer. Then we spent sixth week in the Account Opening Department which was responsible for the opening and closing of accounts. Our Seventh Week was spent Cash Department where we used to receive cash from customers and then deposits it into the accounts of the customers and maintained their balances. We spent the last in the credit department of Bank and also noted down the bank’s procedure and requirements in processing Car Finance and Loan Financing Facility to their customers.

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After doing the Internship in the Bank, I drawn conclusion that Working for a bank is a good experience especially when it comes to the point to learn something and to have broad understanding of the different areas. I spent almost 8 weeks in the bank and come to know that bank as an institution seems simple but its working is really a challenging one because a bank not only has to satisfy its customers but also has to provide services which are to be considered as unique and superior from all of its competitors.

Table of Contents 1. INTRODUCTION

…………………….

2. DESCRIPTION OF INTERNSHIP 3. LEARNING

.…

1 4

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26

4. SWOT ANALYSIS ……………………..

29

5. CONCLUSION

……………………..

32

6. SUGGESTIONS

….. .……………….. 33

7. APPENDICES

…………………….. 35

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1. INTRODUCTION Habib Bank Ltd is a Banking Company which is engaged in Commercial & Retail Banking and related services domestically and overseas. HBL enjoy 20% of the market share in Pakistan. Today HBL is truly the bank of the people, providing its customers convenience and satisfaction all over the world. Habib Bank Plaza, the tallest building in Pakistan, is the proud symbol of HBL leadership in Pakistan’s corporate ground. HBL is currently uses rate AA and A1+.

1.1 ESTABLISHMENT 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. 2.5millon

1.2 BRANCHES Numbers of branch of HB L 1437.in the form of 1408 retail Banking branch 18 commercial banking division 10 corporate center 1 Islamic banking.

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1.3 MISSION To be recognized as the leading financial institution of Pakistan and a dynamic international bank in the emerging markets, providing our customers with a premium set of innovative products and services, and granting superior value to our stakeholders – shareholders, customers and employees.

1.4 OBJECTIVES OF HBL Following are some of the main objectives of HBL. 

To earn profit for the Bank itself and for its shareholders.



To promote and boost up business sector inside the country.



To provide employment opportunities to people.



To help in development and industrialization of the country.



To provide loan and advances to help out in self employment schemes.

1.5 SYMBOL OF HBL Symbol depicts Bismillah ============Islamic Culture and Values Sword ============== Power Lion================ As a symbol of strength

1.6 CORE VALUES OF HBL HBL is firmly grounded with a corporate philosophy that incorporates five solid values which each individual associated with the bank abides by. 1.6.1. Humility HBL encourages a culture of mutual respect and treats both their team members and customers with humility and care.

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1.6.2. Integrity For them, integrity means a synergic approach towards abiding their core values. United with the force of shared values and integrity, they form a network of a well-integrated team. 1.6.3. Meritocracy At every level, from selection to advancement, they have designed a consistent system of human resource practices, based on objective criteria throughout all the layers of the organization. HBL is therefore, able to achieve a specific level of performance at every layer of the organization. 1.6.4. Teamwork Their team strives to become a cohesive and unified force, to offer the customer, a service beyond his expectations. This force is derived from participative and collective endeavors, a common set of goals and a spirit to share the glory and the strength to face failures together. 1.6.5. Culture of Innovation Their aim is to be proactively responsive to new ideas, and to respect and reward the agents, leaders and creators of change.

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2. DESCRIPTION OF INTERNSHIP

2.1 GOALS •

To gain a practical experience and shaping a good future for myself.

•

To gain the understanding that how different departments of an organization coordinate with each other or work together to achieve one goal.

•

To understand the working of each department of a bank.

•

To utilize my abilities up to the mark in order to achieve the full advantage of the given opportunity.

•

To observe the bank’s dealing with the customers.

•

To observe how much an important role bank plays for their customers.

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2.2 Duties and Responsibilities I started my practical training by following Departments:

• Clearing

From 10 August 2009 to 15 August 2009

• Deposit

From 17 August 2009 to 22 August 2009

•

Bill collection

• Remittance

From 24 August 2009 to 29 August 2009 From 31 August 2009 to 05 September 2009

•

Account Opening From 07 September 2009 to 12 September 2009

•

Cash

From 14 September 2009 to 19 September 2009

•

Credit

From 21 September 2009 to 26 September 2009

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2.3 Daily Base Work Description of activities from 03 Aug to 08 Aug Me and my two fellows started our corporate sector internship on that day. We were welcomed by the Branch Manager of HBL named Mr. Asim Ali. He also introduced us with his staff members. Mr. Asim told us about himself and also share his experience at Habib Bank. Mr. Asim gave us the schedule for Mon

that week and according to his plan, we would be given the important and necessary information of the Habib Bank which would be fruitful for us regarding to the understanding of Banking functions and operations and we will have to start the practical work from the next week. We have to remain at the bank from

Tue

9am to 5pm. On Tuesday, Mr. Asim gave us the introduction of Habib Bank. According to him, Habib Bank Ltd is a Banking Company which is engaged in Commercial & Retail Banking and related services domestically and overseas. HBL enjoy 20% of the market share in Pakistan. Today HBL is truly the bank of the people, providing its customers convenience and satisfaction all over the world. Habib Bank Plaza, the tallest building in Pakistan, is the proud symbol of HBL leadership in Pakistan’s corporate ground. HBL is

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currently uses rate AA and A1+. On that day Mr. Asim told us the objectives of HBL which are given below: To earn profit for the Bank itself and for its shareholders. To promote and boost up business sector inside the country. Wed

To provide employment opportunities to people. To help in development and industrialization of the country. To provide loan and advances to help out in self employment schemes. On that day, Mr. Asim gave us an overview of HBL Organizational Structure. According to him, At present the Bank operates through one central and 23 Regional Offices and 1439 branches, all over Pakistan. The president and Executives

Thu

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.

Fri

On that day, Mr. Asim told us very important things which are the Functional Responsibilities of HBL. He said that the Functional responsibilities of the Banks are broken into seven groups known as: 1) International Operations Group 2) Corporate Banking and Treasury Investment Group 3) Retail Banking and Operation Group 4) Finance, Audit and Administration Group

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5) Assets Remedial Management Group 6) Credit Policy Group 7) Corporate Bank, Financial Institutions and Project Finance Group

On that day Mr. Asim told us that there are few departments on which general or day to day banking of HBL composes. There details are as under:

Sat

•

Deposit department

•

Clearing Departments

•

Inland Remittance Department

•

Bills Departments

•

Advances Departments

•

Cash department

•

Foreign Exchange Department

Description of activities from 10 Aug to 15 Aug Mon On Monday, I started my work in the clearing department of Bank and I had to work in that department for the whole week. Before carrying on the activities in the clearing department, I was advised by my Manager to be remained alert about the fake cheques,

and

giving

some

instructions

for

the

careful

examination of cheques like signature verification from specimen card. For the time of receiving cheques I have to consider the following instruction •

Date of the cheque mean post/ out dated cheque will not receive

•

Amount in figure or wording will be same

•

Signature must be authorized

•

If cheque amount in above of 50000 than supervision

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must be necessary I carried on my routine task in the clearing department and also Tue

accepted transfer deliveries and clearing cheques from the customers of the branch and arranged it for the collection. I had to arrange the payment of cheque drawn on the branch

Wed

and give it for collection to any other branch of Habib Bank of Pakistan and also to any member or sub-member of the local clearing house. I had to collect amounts of cheques drawn on members, sub-

Thu

members of the local clearing house and send for collection by those Habib Bank Limited branches which are not represented at the local clearing house.

Fri

It was a holiday for the Independence Day. On Saturday, Mr. Asim Ali (Bank’s Manager) gave the schedule for the next week and also told the advantages of clearing house, some of them are mentioned below:

Sat

1. It prevents the cost and waste involved in the collection of each and every cheque and claim. 2. A banker has no obligation to collect cheques drawn upon other banks for the customers.

Description of activities from 17 Aug to 22 Aug Mon On Monday, Me and my two fellows were ordered by the branch manager to do the work in the Deposit department and stayed there for the whole week. There are almost seven types of deposits offered by the Habib Bank, so we have decided to spend each day on each type in order to gain knowledge regarding to these different types.

So on the same day, we

spent the day in collecting current deposits from the customers and came to know that it is the type of account where the client is allowed to deposits or withdraw money as much as he likes. Final Internship Report

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And small amount of fee deducts by the bank as service charges on each withdrawal. We spent our whole day in the Saving Bank Deposits & come to Tue

the point that this type of account is for those persons who want to make small savings. And the number withdrawal on that account is limited. On Wednesday, we were working in understanding the concept of Fixed Deposits and made our final statement that in this type

Wed of account a certain amount is deposited for a certain period and fix deposit is issued to the depositor. Bank pays handsome interest to the depositor at the end of certain time period. Thursday was reserved for the Call Deposits. The general point Thu

for that deposit is that it is the sort of deposit, which is deposited with the banker against any tender. And this is without interest deposit. Friday was belonged to Short Notice Term Deposits (S.N.T.D). This kind of deposit is for a short period. The depositor may

Fri

withdraw his deposit at any tine by giving seven days notice to the banker. In this type of deposit facility, the trader is allowed to withdraw his amount with interest of the deposited period. Saturday was being the half day spent in working for Profit and Loss Sharing Deposit. These types of accounts are new and also a step towards the Islamic Banking System in Pakistan.

Sat

Under such types of accounts bank allow no interest to the customers. The Executive Board declares profit or loss every year and the rate of profit or loss shall be determined on that base.

Description of activities from 24 Aug to 29 Aug Mon On Monday, we received an order from the branch manager according to which me and two other fellows would have to spend our Forth Internship week in the Bill Department. So we began our work on the same day. Final Internship Report 14

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We spent the whole day in collecting the bills of Electricity, PTCL Tue

and SSG (Sui Sothern Gas). On Wednesday we extended our responsibility and also used to write Scrolls (which are written to keep record of bills collected

Wed by the branch and one copy of them is sent to the concerned organization) along with the collection of bills. We carried on working in the Bill Department. On that day, Mr. Asim Ali told us that Bills department of any bank normally Thu

performs two functions. Which are: 1. Inward Bills for Collection (IBC) 2. Outward Bills for Collection (OBC) On Friday, Mr. Asim Ali gave us the brief explanation IBC. And according to him, IBC are the bills which are collected locally. They are received from outstation branches banks and parties. The process of collection starts when the cheques of Habib Bank

Fri

Ltd are received from other banks. Then these cheques are sent to the Head Office Karachi, which sends the cheques to SBP (State Bank of Pakistan) for clearing and get the confirmation of cheque and credit advice. Main activity of clearing is performed by Head Office, which contacts other banks through SBP.

Sat

Saturday was devoted to the explanation of OBC. According to the Bank Manager: “When an instrument is drawn on a bank, which is located outside the city, its proceeds can be collected through a mechanism called Outward Bills for Collection (OBC).” Procedure

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All the cheques are received on one counter along with the paying slips duly filled in properly containing particulars of cheques and account holder. Counter folio of paying slip is handed over to the customer by putting stamp for “cheque received for collection for Habib Bank” on it duly signed by officer. These cheques are scrutinized and cheques for local clearing are separated from OBCs. Cheques for local clearing are entered in Clearing Register, whereas cheques for collection are entered in OBC register. OBC number is allotted to the cheque from OBC register. Special crossing and bank endorsement stamps are affixed on the cheque. Description of activities from 31 Aug to 05 Sep Mon On Monday, we (me and my two fellows) were directed by the Branch Manager to spend that whole in working for the Remittance Department. So we had started our work from the same day. On the first day, we were given the introduction of that department. I considered that introduction be an important for my report, so I mention it below: “Remittance is transfer of funds from one place to another or from one person to another.” A Remittance is an important service provided by banks to customers as well as to non-customers. Since it is not a free service it is a source of income for the bank. Instruments used in remittances: • • • •

Demand Draft (DD) Pay Order (PO) Pay Slip Telegraph Transfer

We had to spend the upcoming days while working on each Final Internship Report

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instrument in order to get aware of them.

We had drawn some Demand Drafts. Came to know that Demand Draft is a negotiable instrument, which is drawn by one branch to another branch of the same bank. In case of agency arrangement Demand Draft can also be issued by one branch of the bank payable to other branch of the other bank e.g. DD issued by the HBL (Habib Bank Limited) payable by UBL (United Bank Limited). Tue

Process of the issuance of DD:

When a customer requests HBL Furniture Hub Branch, Gujrat to provide him a DD made on his account or against cash payment for a particular city like Islamabad. Then, after having the total amount including commission demand draft is issued in favor of the specified person in that city and is drawn on HBL, Islamabad Branch. So, when payee in any bank presents this demand draft, it constitutes the inward clearing of Habib Bank Limited, Islamabad Branch. Wed Wednesday was belonged to Pay Order issuance. The description of Pay Order is that it is a negotiable instrument made by the bank, on account of a customer, to pay on order the specified amount to the directed person (payee). Use of Pay Order: Pay orders are used to make payment or to transfer money, with in the same city. Pay order is always drawn on the bank that has issued it. The main advantage of pay order is that it cannot be dishonored by the bank. Pay order can be endorsed if it is not crossed. The payee may present pay Order for payment either over the counter for cash payment or the payee may transfer credit to his account. Process of issuance of Pay Order: 1. Cash Deposited or gives Cheque in favor of HBL. 2. Fill Application Form for Pay Order and signed by Applicant. 3. Entry in Bank Smart. 4. Bank issue a Pay Order after recovering Charges (2 Copies) which is signed by two officers. Final Internship Report 17 GIFT University

5. Do necessary Vouchering and Take Signature of Applicant at the Place of received Instrument. 6. One Copy of Pay Order is given to Customer. 7. Other Copy is for Filing Purpose. Thursday was reserved for issuing Pay Slip, which is describe as a negotiable instrument like cheque issued by the bank on its own account to pay a specified amount to the directed person. Use of Pay Slip: Pay Slips are used to make payment by the bank itself against certain expenses incurred; like furniture purchased by bank, electricity charges. Process of the Issuance of pay slip: Thu

1. Bank issue a pay slip in favor of person, to whom payment is made. 2. Affixes payee’s Account only stamp. 3. Revenue stamp pasted on it. 4. Entry in bank smart. Example: If bank has purchased furniture (fixed Asset) costing Rs. 40,000 from a company then a pay slip in the name of that company is made and, instead of writing the issuing date on pay slip, date of encashment (realization) is written when it is presented in bank. Friday was spent in making Telegraphic Transfer (TT). Procedure of Making Telegraphic Transfer: This type of transfer is simple. After filling the application form,

Fri

the concerning officer shall fill the telegraphic transfer form. Then it is sent to the required bank, which on receiving it immediately makes the payment to the customer and afterwards the voucher

Sat

are sent to that bank by ordinary mail. On Saturday, Mr.Asim Ali (Branch Manager) told us the current rate schedule of Both Instrument Demand Draft & Pay Order, which are mentioned below: The current rate schedule of DD is as follows:-

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Up to Rs. 10,000 0.25% or Rs.25 Which ever is higher Rs.10,001 to Rs. 100,000 0.20% or Rs.40 Which ever is higher Rs. 100,001 to Rs. 10,00,000 0.10% or Rs.200 Which ever is higher Rs. 10,00,001 to Rs. 20,00,000 0.75% or Rs.1000 Which ever is higher Above Rs. 20,00,000 0.06% or Rs. 2000 Which ever is higher

The current rate schedule of Pay Order is as follows: Issuance of Pay Order Rs. 50/- for a/c holder Rs. 500/- for non-a/c holder' Cancellation Rs. 100/- for a/c holder Rs. 100/- for non-a/c holder Duplicate Issuance Rs.100/- for a/c holder Rs. 100/- for non-a/c holder And in the last he also told us the Cancellation of Pay Order (PO), Demand (DD), which is given below: After issuance of Pay Order, Demand Draft by Habib Bank Limited, Furniture Hub Branch, Gujrat, if any one of these has to be cancelled by the customer, it is returned in the bank. Then, after deducting the cancellation charges of Rs.100 for PO and Rs. 200 for DD, the remaining (net) amount is paid to the Final Internship Report

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customer.

Description of activities from 07 Sep to 12 Sep On Monday, me and two fellows were started working in Account Opening Department. This department is responsible for the Mon

opening and closing of accounts. In consideration of Habib Bank Limited, opening and/or continuing to maintain any account, the Account Holder/Depositor or Investor would be bound by the

Tue

terms and conditions written on the account opening form. On Tuesday, we were told that the account opening procedures engage in following steps: 1. The Account Opening Form:When a client comes to the bank, and makes a request for opening of an A/C. The officer says that first fill up a prescribed application form. 2. Completion of The Form:The name, occupation, and complete address of the person opening the account are written in the columns that are provided in the form. Signatures are obtained from the customer where it is required. These signatures should be usual signatures and he would operate the account with them. 3. Introduction:The introduction of a current account holder is accepted for the opening of either a current account or a saving account. The introducer should be Account Holder. The signature of the account-holder introducing the account is obtained at the place provided for in the account opening form. 4. Specimen Signature Card, Cheques Book Requisition, Online Form:The signatures of the client are obtained on a specimen Signature card Cheque book requisition and online form.

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5. Signature Difference Form:The signatures of the client are obtained on a signature difference form if his / her signatures differ from the computerized National Identity Card. 6. Account Number:When all the formalities are completed then the final approval of account has to be taken from the Branch Manager. After obtaining approval of the branch manager an account number is allotted to the customer all the information is entered into the computer. Then that account number is written on the Cheque Book, Specimen Signature cards and account opening form. 7. Send the form to Head Office:After fulfill all the requirement and verify the form from operation manager the account opening form send to Head Office Karachi and make request to issue the printed cheque book. 8. Issuance Of A Cheque book:After opening an A/C with the bank, the A/C holder receive a letter of thanks from Head Office Karachi then after receiving this letter client come to bank and makes a request in the name of bank for the issuance of a Cheque book. The A/C holder mentions title of A/C, A/C number, signs it properly. Normally BAL issues a Cheque book having 25 leaves for Saving Account and 50 leaves Cheque Book to Current Account Holder. Every Cheque book also contains one leaf that is used for another issue of a Cheque book. 9. Entry Of A Cheque book:Before issuance of a Cheque book, the employee performs certain functions. They include: • • •

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Stamping requisition slip that is in Cheque book. Enters it in the Cheque book issue register. Check whether or not a senior officer has verified the signatures, if not then first gets them verified. 21

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After entry in the manual register, the employee issues the Cheque book to the A/C holder with his/her signature on the register. On Wednesday, I was performed the task of opening a current for the customer named Mr. Zafar Iqbal. For that purpose, I had followed the same procedure told on Tuesday. I also make assumption in my mind that the current account is the most common account and the most preferred amongst business concerns. There is no restriction on the amount of withdrawal. Current account enables the client to do cash transactions in a more efficient manner. Features:Current Accounts can be opened in the HBL with the sum not less than Rs.1,000/-

Wed

No Profit No deduction of Zakat Account close charges Rs.150 Service charges balance Rs.100

for

maintaining

minimum

Online Charges Rs.100 Thu

On Thursday, we were opened some saving accounts for the new customers and came to know that in Pakistan (PLS) saving account was introduced in January 1982. Individuals who wish to invest their money in order to get profit maintain this account. Features:The minimum balance requirement for opening the account is Rs.5000. There can be profit or loss on the investment of the Customer’s funds deposited with the bank and

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this amount shall be acceptable to the Customer. The profit is paid half yearly. Deduction of Zakat With holding tax on profit @ 10% No Service Charges to close the account Service Charges for maintaining minimum Balance Rs.50 Online Charges Rs.150 On Friday, we were engaged in opening term deposit account and make general point that term deposit is a deposit that is made of a certain period of time. At the end of specific period the customer is allowed to with draw the principal amount. Features:Fixed Profit Fri

The longer the period for which the amount is kept higher is rate of interest. Term Deposit usually for the period of three months, six months, One year, and five years. Deduction of Zakat and withholding Tax @ 10%.

Sat

On Saturday, on special request of us we were taught the Joint Account Opening Procedure. Joint Account Opening Procedure involve following steps: 1. Title of Account:Title of account holder should mention the names of all the joint account holders.

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2. Special Instruction:At the time of opening the account clear and specific instructions should be obtained regarding operation of the account and payment of the balance at the death of one or more joint account holders in the following manner:• • • • •

The account shall be operated by any joint account holders singly. By either or survivor singly By any two or more joint account holders or by any two or more survivors jointly. By all the joint account holders jointly By all the survivors jointly.

These instructions as far as possible should be obtained in handwriting of the parties concerned, under the signature of all the joint account holders. 3. Documents:Computerized national Identity Card of all the joint account holders. 4. Mode of Signature:All joint account holders are required to sign as applicant and in the column of special instructions. Specimen Signature of only those joint account holders are required who are authorized to operate the account. Description of activities from 14 Sep to 19 Sep Mon Me and my two fellows began our day by starting work in cash department. We were told that the cash department is the most important department of the bank. It receives cash from customers and then deposits it into the accounts of the customers and maintained their balances. The officers in this department are called teller and there were four tellers at the counter. This department involves in two activates:1. Deposit cash in customer’s account Final Internship Report

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2. Make payments from customer’s account So that we will have to spend next days while playing a part in these two activities. Tuesday was belonged to activity named Deposit Cash In Customer’s Account. This activity took place in following way:

Tue

When the customer want to deposit amount in his account at opening of account or after that then he has to fill a deposit slip that shows the amount and the account in which the cash will be deposited. Then teller will receive amount and credit the customer’s account that shows increase in customer’s bank account. That day was spent for the activity known as Make Payments From Customer’s Account. That activity has a very common task:

Wed When the customer draws a cheque on the bank to pay a certain amount then teller will debit the customer’s account that shows reduction in his account balance. Thu

On Thursday, we were given briefing on the Account Deparment of Habib Bank Limited. We were told that account department is responsible to keep the record of each and every transaction and prepare reports about the amount of deposits and advances and sent to Head office or State Bank of Pakistan on monthly, quarterly and yearly basis. The accounts department deals with various routine activities for the bank. The main activities performed by it are:a) Budgeting b) Reporting c) Maintenance & depreciation of fixed assets d) Miscellaneous functions

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On Friday, we were given brief explanation of two main activities of account department. The explanation is mention below: Budgeting

Fri

Accounts department of a bank, for a year makes budget of every branch. Fiscal year of bank starts from January 01 and ends on December 31. The accounts department starts preparing budget from October for the next year. Reporting

Sat

The accounts department, in the form of reports, clubs the details of various departments together. Each and every minute detail is provided in weekly, monthly and annual reports. The reports are submitted to head office, SBP and to the government. Detail of other two activities of Account Department were given on Saturday. The description of all that briefing is mention below: Maintaining of Fixed Assets & their Depreciation Accounts department maintains the record of all the assets and charges depreciation on them. The bank normally uses the straight-line method to compute the depreciation. It is calculated on monthly basis and charged yearly. Bank not only depreciates the existing assets but also the assets transferred in and transferred out. 　 Miscellaneous Functions The accounts department miscellaneous functions like

also

performs

some

other

i. Closing Entries ii. Daily activity checking

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iii. Report Generation iv. Minor expense recording

Description of activities from 21 Sep to 26 Sep Mon

Eid Holiday

Tue

Eid Holiday

Wed Eid Holiday Thu On Thursday, we started working in the credit department observe how its activity took place specially when it comes to provide loan to a customer to run business or to finance a car from the bank. On the same day, we had told the important things about the Car Finance facility which are mentioned below: Benefits and Features • • • • • • • •

Quickest processing No hidden charges Minimum down payment Complete repayment at any point of time Balance transfer facility {BTF} for existing as well as new clients from other Banks Tenure period ranging from 1 to 5 years. Financing of all brand new locally assembled vehicles and used cars. Financing limit ranging b/w Rs. 200,000/- to Rs. 2000,000/- for brand new cars

Insurance Renowned and reliable Insurance companies are offering the competitive rates of Insurance. Pay year insurance premium in advance { at the time of down payment } and remaining in the subsequent equal monthly installment. Repayment Easily affordable installments on monthly basis in the form of postdated cheques will set you free of depositing your rental Final Internship Report 27 GIFT University

cheques every month. Security Hypothecation of vehicle in the name of the Habib Bank Limited. Documents required Two passport size photographs. Copy of National ID card. Bank statement for the last six months. Salary certificate {for salaried individual}. Business proof {for a business person}. N.T.N Certificate. Co borrower’s NIC copy {if the car is to be in the name of the coborrower}. Eligibility Yes you get a car loan form HBL to purchase a brand new car if you are: Pakistani National Identity Card holder. Over 20 years of age (Maximum 60 years in case of salaried and 62 in case of a business person at the time of maturity of the loan). Salaried , Businessman or self employed . Fri

On Friday, we were told that a good financial system support when officials of credit department invest money of depositors into feasible projects by lending loans to various business concerns. In order to lend loan to business concerns, the client's position regarding the financial and business performance concern is to be evaluated. Evaluation of client process has following steps: i) Financial Statement Analysis ii) Nature of Business to be Considered iii) Bank References iv) Plant Visit v) Credit Rating vi) Report From SBP

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Once the client is being evaluated then bank will provide the credit to the customer in any form demand by the client in the credit line proposal form. In credit department of HBL, various forms of credit are offered to different clients. Following are the main forms of lending: i) Cash Credit: In this form of lending, cash is required to keep as a security. This form is less risky than others. Because bank is fully equipped with cash. ii) Running Finance: is most popular sort of credit facility given to clients. This is mostly obtained for the purpose of working capital requirements. Client can draw money even daily from the account but not more than the limit iii) Term Finance: This credit facility is also required for working capital requirements. This is the same like running finance but difference is that in this term finance, disbursement of amount is in once a time. iv) Purchase and Discounting of Bills: Bank purchases the bills from its own client at lower value but when bills are discharged, then amount received will be more than that purchased value. This is mostly happened in case of export and import transaction.

Sat

Saturday was the last day of my internship. On that day, Mr. Asim (Bank Manager) appreciated me and my two fellows and also admired our effort. We also thanked him for providing such environment in which utilize our resources and skills in a right way and without any pressure. We also said Goodbye to the staff members who are very respective and corporative. We collected our internship completion letter and returned home.

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3. LEARNING 3.1 DID I ACHIEVE MY GOALS? To some extend I have achieved my goals. In order to achieve the goals mentioned in the Description of Internship section, I had worked really hard and tried my best. And the reason behind all that hard work is that I was eager to grasp and pave my own path towards excellence.

3.2 WAS THE INTERNSHIP DIFFERENT FROM WHAT I HAVE EXPECTED? Yes, my internship was totally different from what I have expected. Because student life and practical life is totally different. Book knowledge is totally different from practical knowledge and practical life pattern is totally changed and we cannot apply more book knowledge in practical life. Another difference is that I was facilitated by the support and patronage of our esteemed seniors, who provide due guidance and utilize internees like us as an asset.

3.3

WHAT

WERE

UNUASUALL

INTERESTING ABOUT MY INTERNSHIP?

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/

The interesting thing about the internship is that I spent every week in different departments. Because according to the Bank Managers “they didn’t want to make us master one specific department.” And his works very well, we were not even feel bored and overburden by the tasks given to us.

3.4

WHAT

DID

I

LEARN

FROM

MY

INTERNSHIP? The things I have learnt from the Internship are mentioned below: i.

I learnt the way how to deal with different customers at the different time.

ii.

I learnt how the banking trend is changing in Pakistan and what new improvements should be needed in order to make the banking sector more attractive to the customers.

iii.

I learnt that how bank’s different negotiable instruments are providing benefits to their customers.

iv.

I learnt that internship is the only way which will helpful for the Students in improving the interpersonal, communication and professional skills. And also

helpful in increasing self confidence and self awareness. Final Internship Report 31 GIFT University

v.

I learnt that time management is really important asset for the Professionals and Internees.

vi.

I learnt that there is nothing difficult to do and to achieve.

vii.

I learnt that in order to be successful in future, students like me should have to start working hard from now, so that we will face less difficulty when we will step in to the practical life.

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4. SWOT ANALYSIS 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. Following is the SWOT Analysis of HBL:

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4.1 Strengths  A skill or capability that enables HBL to conceive and implement its strategies.  The officers of HBL are considered as one of the most able professionals in the banking world.  I observed that HBL employees interact with their clients as if they are their personal friends and discuss about their problems as their own.  HBL has got a reliable and easy to use internal computer system. Every information regarding the transactions in customers’ deposits has been computerized.  HBL maintained its data properly.  HBL has very good security system.  HBL is the larger commercial bank in Pakistan with the network of over 1439 domestic and international branches.  Being the pioneer of banking in Pakistan, HBL is the oldest and is the richest in experience.  HBL focuses on consumer banking by lucrative schemes, products and services suiting best to the needs and demands of the customers.  HBL has opened all its branches at commercial areas so that the customers or clients face no problems in reaching to the bank.  Human resources development and introduction of new technology towards modern banking.  24 hours cash access and safe payment products for high value transaction.  Having potential to encounter the competitive environment in the market.  Customer enjoys the services at the residential localities.

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4.2 Weaknesses  Highest number of branches effecting the proper maintenance and difficulty in providing same working environment at the each branch  Poorer system of recovery of the system is a threat to bankruptcy.  Lack of customer feed back.  Low job satisfaction.  Poor ATM’s Service  Inconsistency in efficiency and working atmosphere due to the largest of branches.  Sense of insecurity in the employees serving at low profitable branches due to the down sizing.  Less opportunity for the Females to get employment.  Victim of political, legal and socio-cultural pressures  Lack of professionalism in the branch employees mostly.

4.3 Opportunities  Huge untapped market potential in consumer banking  Opportunity for developing value added services combined with corporate banking relationships, cash management services to large and medium sized corporate clients.  Growing policies of government on business and commerce sector provide HBL opportunities to take advantages of these policies to meet efficiently with the business people to solve their problems with the instant cash and financing facilities. Final Internship Report

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 Government is taking very bold steps to promote IT in Pakistan. HBL has an opportunity to introduce new technology.  Large international network which principally focuses on trade finance with Pakistan can be utilized to tap trade activities in other markets. In addition, services such as cross border / offshore financing for corporate customers can be enhanced.  Customer feedback on different products and accounts can enhance the bank performance and also can encourage the atmosphere for other future policies.  HBL also has an opportunity to expand its new technological advancement like; internet banking facilities and ordering cheque facilities in order to serve the customer more efficiently, specially  Further reduction in intermediation costs possible, with improving technology.  With the efficient and veteran management group, HBL can also improve and expand its foreign operation successfully.  Habib Bank Limited has an opportunity in order to utilize its skills and efficiencies in leasing business.

4.4 Threats  Political Instability of Pakistan.  Consolidation in the banking sector resulting in increased competition.  Shortage of skilled and specialized staff in the Banking Sector of Pakistan  Inconsistency of government policy  Growing global technological advancement.  Strict regulation by government over credit facilities to the customers as Ill as to meet the prudential.  Loss of confidence of overseas customers due to freezing of accounts.

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 Facing more competition by foreign banks in the market like Barclays and Citibank.  Increasing operation of private banks.  Highly attractive and advance services by other banks like UBL and Bank AlFalah to their customers.

5. Conclusion Working for a bank is a good experience especially when it comes to the point to learn something and to have broad understanding of the different area’s. I spent almost 8 weeks in the bank and come to know that bank as an institution seems simple but its working is really a challenging one because a bank not only has to satisfy its customers but also has to provide services which are to be considered as unique and superior from all of its competitors. A banking sector of Pakistan is toward the way of forming as a digital firm because it has digitalized most of its major operations. That is why the future of Pakistan’s banking sector seems bright and their systems are capable to face the challenges will be resulted from the future innovations and creativity.

6. SUGGESTIONS  The management of HBL should have to decrease job insecurity among the employees.  Training program should be started for internees and newly appointed employees.  The number of employees should be increased in order to decrease the workload.  The bank charge high service charges as compared to the other banks, so these should be lowered down.

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 Surveys

Should be conducted regarding customer satisfaction level and all

employees of this department should look forward in getting feedback whenever possible.  Adding of value added features that offer competitive advantage is also a means of avoiding customer dissatisfaction.  Quick response to customer queries is necessary to maintain a healthy relationship with the customer.

 Proper

training of customer handling should be given to employees. Training

workshops and coaching clinics should be considered as an option that would provide adequate results.  In order to grasp the audience, HBL should have to increase its advertising budget.  In order to compete with other banks, HBL should have to provide ATM services throughout the country as this service is becoming popular among the bank customers.  HBL Data Recovery System should be improved.  Employees Training program should be introduced on continuous basis.  In planning compensation and benefits plan for the employees, the factors like employee’s qualification, work experience and effort must be considered.  HBL recruitment need some changes because they only recruit people putting emphasis on internal sources not on internal.  HBL should have to introduce interest free banking system on the basis of pure Islamic banking in order to attract people who are against interest. So by doing that they will have a great chance of increasing the market share as well as the number of customers.

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7. APPENDICES

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