Management Of Habib Bank Ltd Pakistan

1.1 INTRODUCTION OF HBL It is the prime Bank in country established in 1941 having a registered head office in Karachi. It was nationalized in 1974, but recently on 26th February 2004 it has been privatized by Government of Pakistan and is taken over by Aga Khan Fund for Economic Development (AKFED). They acquired 51 percent of shares of HBL. It is one of the largest Banks of Pakistan with 1439 branches and having total assets of Rs. 434,931,930,000.

1.1.1Brief History of HBL HBL at its present state has a long and rich history of deeds and sacrifices. All this has been possible on the account of sustained efforts. The first branch of HBL started functioning on 30th August, 1941 at Muhammad Ali Road Bombay, where Quaid-e-Azam Muhammad Ali Jinnah first of all opened his personal account. Mohammad Ali Habib was a man of stern and persistent will. God. Almighty had bestowed him with extra ordinary capabilities. He was devoted to his Bank with a view to take his share in the uplift of the strife-torn and devastated Muslim community. At the time of its inception, the Bank's total paid up capital was Rs.2.5 million but it is evident from the following data that the Bank experienced a steep rise in the business in a few years. In 1942, on the desire of Quaid-e-Azam, Habib family migrated to Pakistan and later on shifted the Bank's Head Office from Bombay to Karachi on 7 th August, 1947 just one week prior to independence, to play its pivotal role in the development of this newly born country. At the time of independence, the areas which now constitute Pakistan were producing only agricultural products raw material for indo-Pak subcontinent. Partially no industries were there to process the raw material, therefore the raw material was exported from Pakistan. There were 19 non-Indian foreign Banks which were engaged in the export of crops from Pakistan with only two Pakistani Banks i.e. HBL and the Australia Bank. The circumstances were completely un-certain. The confidence of the people had been shaken by the un-friendly environment and till the time peace had not been restored, people would naturally have been interested in other things. The nation was quite young with 2 M. ISMAIL

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extreme scarcity of resources and these definitely added to the difficulties of the govt., to run its own Banking system immediately. Following the announcement of the independence plan in June, 1947, the Hindus residing in the territories now comprising Pakistan started transferring their assets to India and vice versa. The Banks included those having their registered offices in Pakistan, transferred them to India in order to bring a total collapse of the new state. It had been decided that the Reserve Bank of India would continue to function in Pakistan so that the problem of demand and time liabilities, coinage, currencies, exchange rate etc be settled between India and Pakistan and the Indian Notes would continue to be legal tender in Pakistan till 30th September, 1948. Again due to certain differences between Indian Pakistan, the Indian Govt., withheld Pakistan's share of Rs.75 core in forward and subscribed heavily to the Govt. of Pakistan to the tide over the crises, Payment was made to the Govt., by the Bank at a very nominal rate of interest, even before the actual issue of securities. At a time when this newly born country was at whirlwind of crises, it was HBL which fulfilled generously the financial needs of all its sectors, paid salaries to the employees of all Govt. departments, helped in the establishment of State Bank of Pakistan which the Quaid-e-Azam inaugurated on July 1st, 1948. HBL after partition opened its branches throughout Pakistan to provide finance and other facilities to the business community. In association with HBL, the Govt. sponsored Pakistan Finance Corporation Limited for financing of cotton. The Bank helped handsomely in the construction of WARSAK DAM PROJECT, WAPDA, & K.D.A. by provided finance and other facilities. Another innovation introduced by HBL is the evening Banking cash long after the crossing of normal Banking hours. It was also the first in making available such new facilities as Gift Cheques, Rupee Traveler’s Cheques, Credit Card System, short term and long term schemes for small businessmen.

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1.1.2 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. OR Opening new horizons and fresh perspectives of trust, dependability and service through 1425 domestic branches and 112 overseas offices with a comprehensive range of financial products.

1.1.3OBJECTIVES 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.

1.1.4SYMBOL OF HBL Symbol depicts Bismillah ============Islamic Culture and Values Sword ============== Power Lion================ As a symbol of strength

1.1.5CORE 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.

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1.1.5.1

Humility

HBL encourages a culture of mutual respect and treats both their team members and customers with humility and care.

1.1.5.2

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.

1.1.5.3

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.

1.1.5.4

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.

1.1.5.5

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

1.1.6CORPORATE BANKING Only local bank with special focus on Corporate Banking with a presence in all major locations through out the country, offering full range of Banking products / services and one window interface through designated Relationship Managers. Our large equity base allows us to take longer per party exposures to meet the needs of the largest corporate & 5 M. ISMAIL

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our extensive local & foreign network allows us to imperiously service our clients. Corporate manages well diversified portfolio, and include most of the top tier names of the market. Corporate Banking offers tailor made products / solutions as required by corporate customers which includes:

1.1.6.1

Key Features of Corporate Banking

Funded facilities, ranging from short to medium and long term lending  Trade related financing.  Foreign currency financing.  All sorts of non-funded facilities / services which include Cash receipts / payments, Remittances, Collections, guarantees, letter of credit etc..  Customized products / solutions

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

2.1.1FUNCTIONS OF DIFFERENT DEPARTMENTS OF HBL The basic functions of different departments HBL are as follows.  Accepting deposits  Making Loans and advance. 6 M. ISMAIL

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2.1.1.1

Accepting Deposits

The primary function of HBL is to accept and receive surplus money from the people, which they willingly deposit with the Bank. Like all other Banks, HBL also take incitation to attract as much depositor’s as it can. They offer different deposit schemes to its customers, which includes the following types. These schemes as follow.

2.1.1.1.1

Current Deposits

This type of account is often maintained by the business Current deposits are those deposits

on which Bank offers no interest but it allows the account holders to withdraw their money at any time they want without giving any prior notice to the community, which requires large sums of money very often for their business transaction.

2.1.1.1.2

Profit and loss sharing account (Saving)

Saving deposits or PLS are those accounts on which Bank offers a lower rate of interest. After the Islamization of the Banking system in the country it has been given the name of PLS saving account. The Bank undertakes to repay deposits on demand up to a certain amount.

2.1.1.1.3

Fixed deposits

Fixed deposits are those which can be withdrawn only after the maturity period. In this type of deposits the Bank allows high rates of interest depending on the time period of deposits. The shorter the period of deposits, the less will be the interest and vice versa.

2.1.1.2

Making Loans and advances

The second most important function of HBL is to provide financing facility to its customers. These loans and advances are usually made against document of title to goods, marketable securities, and personal securities. HBL charges different interest rates on these loans and advances depending on the terms and conditions settled with the customers. Following types of loans and advances are made available to the customers.

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2.1.1.2.1

Demand Finances

Demand finances are those finances which are given to the borrowers for specified period and can be called back without any prior notice. It is a single transaction finance. It can be long term, medium term and short term. Mark up is also charge. Here the amount can be withdrawn once at the time of disbursement.

2.1.1.2.2

Running Finance

HBL provides these finances against the security of current assets like shares, bond, cash crops like cotton and other cashable commodities. The borrower’s account is opened with the Bank with the amount of the total loan provided or allowed to the borrower. The borrower is allowed to withdraw any amount from his account within the specified limit and interest is charged only on the amount actually withdrawn.

2.1.1.2.3

Over Draft

This type of facility is usually given to very loyal clients. This allows them to withdraw over and above the amount held by them in their account, and interest is charged only on the amount, which is withdrawn in excess of the amount actually held in their account.

2.1.1.2.4

Discounting bills of exchange

Discounting bills of exchange can also be considered as a form of loan because it allows the holder to get the bill encased before the maturity period. A bill of exchange is usually issued by the importer of goods to the exporters, which allows them to be paid in their own currency after three months time. If the exporter needs the money before the maturity of the bill of exchange, he can get his money from the Bank by discounting the bill of exchange. The Bank utilizes their surplus funds by discounting the bills of exchange at their market worth i.e. Bank pay to the holders of the bill on amount equal to their face value after deducting interest at the current rate for the maturity period of the bill. our stated objective of being a premier emerging market Bank. 8 M. ISMAIL

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2.1.2PRODUCTS OFFERED BY HBL

2.1.2.1

Tele-printer service

Introduced in 1952, this system helped the Bank to improve its services.

2.1.2.2

Rupee Traveler’s Cheques

It was introduced in 1957. Here the customers are provided the facility of encashment of their traveler’s cheques through any branch of the Bank.

2.1.2.3

Small Factory Owner Scheme

In 1959 the Bank offered loans to small scale producers under the “small factory owner scheme” in order to boost the economy of Pakistan.

2.1.2.4

Foreign Tele printer Service

It was introduced in 1961. The idea behind this scheme was to provide quick and prompt Banking services to customers in foreign countries.

2.1.2.5

Gift cheques schemes

It was launched in 1962. Under this scheme, the Bank provided customers with preprinted cheques of various denominations which could be used to send gifts to their loved one on various occasions.

2.1.2.6

School Banking

This scheme was introduced in 1962 to provide Banking services to children in a number of schools though out the country.

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2.1.2.7

“Drive in” Banking

HBL established “Drive in” branches in 1962 at various major cities of the country where the customers could avail Banking services without getting down from their vehicles.

2.1.2.8

Mobile Banking

It was introduced in 1962. The feature of this scheme is to provide Banking services to the customers residing in the rural areas.

2.1.2.9

Night safe scheme

In 1962 the Bank offered facility to their customers to deposit their valuables at night in specified branches of the Bank.

2.1.2.10

Computer accounts

In 1962 the Bank introduced computer accounts through which most of the accounts in head office were computerized

2.1.2.11

Computer Prize Bond

It was introduced in 1966. It is a scheme through which prize could be declared for prize bond scheme.

2.1.2.12

Credit card scheme

It was introduced in 1966 through which customers could get certain sum of money from specified branches. Many business organizations accepted payments through valid credit cards.

2.1.2.13

Infant Saving Scheme

In 1968 the Bank offered infants to open saving accounts operated by their parents/ guardians.

2.1.2.14

Courtesy Card

It was launched in 1968 through which the customer could be introduced to other branches in the country. 10 M. ISMAIL

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2.1.2.15

Deposit growth certificate

This scheme was introduced in 1975 with increase rate of interest.

2.1.2.16

Special five years deposit certificate

This scheme was introduced in 1975 where the major emphasis is on increased rate of interest.

2.1.2.17

Dollar traveler cheques

Introduced in 1976, the scheme was more helpful and safe for the travelers than carrying foreign currency notes.

2.1.2.18

Haj accidental death scheme

Introduced in 1983, according to this insurance scheme, if a Haji who has submitted his Haj application through HBL died while he was away for performing Haj, his family was to be provided a certain sum of money.

2.1.2.19

Auto Cash Teller Machine

Auto cash machines are installed in 1988 at various branches which allows customers to withdraw cash round the clock and on all days of the week.

2.1.2.20

Transport Finance Scheme

In 1989 the Bank in order to decrease unemployment in the country introduced owner, driver taxi finance and scooter loans. According to this scheme they were provided loans on soft terms.

2.1.2.21

Gold card system

In 1991 HBL introduced the scheme with the features of offering card holders to get upto Rs. 10,000 at a time.

2.1.2.22

Muhafiz Rupee Traveler Cheque

It was introduced in 1998. A cheques available in denomination of Rs. 10,000, 25,000, 50,000 and 100,000 with the advantage of 100% free purchase and encashment.

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2.1.2.23

Distinct Properties Of Muhafiz

 It can be issued from more than 700 branches all over Pakistan.  Muhafiz provides the facility of payment in all branches of HBL.  There is no commission and fee charge for purchase of Muhafiz HBL keeps alive the tradition of “Serve you better” charges nothing for the purchase and sale of Muhafiz.

2.1.3INNOVATIVE PRODUCTS 2.1.3.1House Finance HBL provides the facility of house finance: Financing available for: 1. Purchase of house 2. Home improvement and renovation 3. Self Construction

2.1.3.1Some characteristics of House Finance of HBL Are:  Lowest marl-Ups leading to affordable monthly installments  5 years fixed Rates/ one year Floating Rate available.  Lowest processing charges  Financing tenures ranging from 3 to 20years.  Financing limits of up to Rs. 7.5 million (Rs. 3.0 million for Home Improvement/Renovation)  Quick Processing

2.1.3.2Auto Finance Habib Bank Auto Finance, a lease product, designed to offer you an economical way for owing the car of your choice.  Some characteristics are:  Lowest Down Payment 12 M. ISMAIL

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 Lowest monthly rentals  Fixed repayment tenures of 36,48and 60 months.  Lowest Processing charges  Insurance premium rates as low as 3%  World wide personal accidental insurance coverage of up to Rs. 200,000.  All locally assembled new cars can be financed through this scheme.

2.1.3.4

HBL Flexi Loan:

HBL had introduced a unique loan system for the middle income serving people in various public sectors. It is basically meant for those in service people who earn more than Rs. 5,000 per month. This loan meets the petty requirements of the salaried class. Since the introduction of this scheme Rs. 6 billion is advanced throughout the country. The maximum limit of this loan is Rs. 3,000,000.

2.1.3.5

Life Style

Habib Bank Lifestyle is an economical financing scheme for Household Appliances and consumer Electronics. Salient features of HBL LIFESTYLES:  Loans for salaried/ self Employed individuals or business persons  Low Mark-ups leading to affordable monthly installments.  Financing from Rs.10,000 to Rs.500,000  Fixed tenures of 6,12,18,24 and 36 months  Low Processing charges  Full credit Life Insurance  Free Doorstep Delivery of items  Available throughout Pakistan from over 330 designated Habib Bank Branches

2.1.3.6

HBL Rescue

(Balance Transfer Facility) HBL provides the facility to transfer your personal loan and credit card liabilities, at the lowest rates ever. 13 M. ISMAIL

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2.1.3.7

For Personal Loans

 Maximum loan up to Rs. 1,000,000  Choice of 12,24,36,48 and 60 months for payback  Lowest Mark- up  Quick processing  Full Credit Life insurance  Available from over 400 designated branches throughout Pakistan

2.1.3.8

For Credit Card Payments

 Maximum loan up to Rs.1,000,000  Lowest mark-up-compared to any credit card  Choice of 12,24,36,48 and 60 months for payback  Quick processing  Full Credit Life insurance  Available from over 400 designated branches throughout Pakistan

2.1.3.9

Auto Cash (Debit/ ATM Card)

Habib BANK icard is used for dual purposes-a debit card and an ATM card and provides u the direct access to cash in your account.

2.1.3.10

Habib Bank icard as your Debit Card

When payment is made at any merchant location using the card , exact purchase amount is deducted from your account. Convenient, secure, quick and easy payment option Nationwide acceptability at various merchant locations displaying ORIX Network logo Free of charge debit card transactions 14 M. ISMAIL

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2.1.3.11

HBL iCard as your ATM Card

Offer a number of facilities such as cash withdrawal, Funds transfer between accounts, Balance Inquiry, Mini Statement, PIN Change etc. Accepted at all 1LINK and MNET ATMs across the Country.

2.1.3.12

HBL Easy Access-

Online access to banking services at over two hundred branches in Pakistan

2.1.3.13

HBL Fast Transfer

A unique solution for overseas Pakistanis to send money back home in a swift and convenient manner.

2.1.3.14

Haryali Agricultural Loans

It entails all kind of agricultural finance facility for the rural market.

2.1.3.15

HBL E-Bank

It provides services via a dedicated communication link on the internet. The E-Banking services provide “anytime, anywhere” banking to all 5 million customers. This service, designed to be user friendly, assures secured access and confidentiality.

2.1.3.16

SWIFT

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

2.1.4AGENCY SERVICES TO THE CUSTOMERS HBL also provides agency services to its customers. Some of which are as follow:

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2.1.4.1Collection of cheques HBL pays and collects cheques on behalf of their customers, and for this it receives commission form their account holders.

2.1.4.2

Collection of dividends

The Bank provides a very useful service by acting as an agent for its customers. It arranges the collection of dividends on shares and securities held by its customers. The customer is simply to inform the issuer of the securities that the interest on the securities is to be credited to his account in the Bank. Bank charges commission for the collection of the dividends on behalf of account holders.

2.1.4.3

Purchase and sale of securities

HBL if authorized by the customers also makes purchase and sale of securities on the behalf of its customers. Bank charges commission for the purchase or sale made by its on behalf on the customers.

2.1.4.4

Execution of standing instruction

HBL also executes the standing in case if it is ordered by the customers of the Bank to do so. These instructions are usually given in writing to Bank. The Bank debits and credits the accounts of its customer for the transactions carried out by the individual or firm.

2.1.4.5

Transfer of Funds

HBL, also transfers funds of the customers from one Bank to another Bank. If the transfer is within one station, they don’t charge any commission and even if they charge, they charge on reduced rates.

2.1.4.6

Acts as an agent

HBL also acts as an agent, correspondent or representative of its customers at home and abroad.

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2.1.4.7

General utility services

HBL also performs a number of generally utility services to its customers which are as follows:

2.1.4.8

Foreign exchange Business

HBL transacts foreign exchange business by discounting foreign bills of exchange and thus provides facilities for financing in foreign trade.

2.1.4.9

Acts as a referee

HBL provides useful services to its customers by acting as a referee for its credit worthiness. The information is supplied in utmost secrecy and is based on financial standing of the customers. Acceptance of Bills of exchange HBL also undertakes acceptance business connection with bills of exchange and thus enables its customers to obtain the desired credit.

2.1.4.10

Issuance of traveler’s cheques

HBL also issues traveler’s cheques. These cheques can be issued to anyone whether an account holder or not and charges no commission on issuance of such cheques. HBL has recently introduced Muhafiz rupee traveler cheques with enhanced features.

2.1.4.11

Collection of Utility Bill

Electricity, telephone and other such bills can also be deposited with HBL.

2.1.4.12

Locker Facility

HBL also provides locker facility to its customers where valuables of customers can be kept.

2.1.5Operational Policy 17 M. ISMAIL

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The operational policies of HBL deal with the method of provision of better services to its customer. Through the introduction of new schemes as means of satisfaction for their customers, the operational policy of HBL can be divided into two spears. Domestic operations. International operations.

2.1.5.1

Domestic Operations

HBL is quite successfully operating its domestic business. Facilities at the door step across the length and breadth of the country also in conformity with the government’s socio-economic objectives. The number of operating domestic branches total 1350.

2.1.5.2

International Operations

HBL’s overseas branches are continuously rendering satisfactory services and are also contributing to the channeling home remittances of Pakistan working abroad. HBL’s international network comprises of 60 offices in 26 countries, operating in USA, Europe, UK, Middle Ease, Asian Pacific Region and Africa. It is also the largest Banking in financial services provider in Pakistan. HBL concentrates on markets and business they understood. Through a global network, the Bank provide a comprehensive range of financial services, personal, commercial, trade services, cash management, treasury/ capital market services, and private Banking. HBL strives to provide high quality product through efficient delivery system and excellent customer services. In this way, HBL will grow and achieve

2.1.6ORGANIZATION STRUCTURE A well-developed and properly coordinate structure is an important requirement for the success of any organization. It provides the basic framework within which functions and procedures are performed. Any organization needs a structure, which provides a framework for successful operations. The operation of an organization involves a number of activities, which are related to decision making, and communication of these decisions. These activities must be well coordinated so that the goals of the organization are achieved successfully. 18 M. ISMAIL

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2.1.6.1

STRUCTURE OF HBL

At present the Bank operates through one central and 23 Regional Offices and 1439 branches, all over Pakistan. The president and Executives Committee look after the affairs of the Bank. Each Regional Head Quarter is headed by a Chief Executive and assisted by General Manager Operations and General Manager Support Services. The Regional Head Quarter controls the branches in their area.

Overseas operations consist of 65 main branches, two affiliates, two representative offices and two subsidiaries. President, from Head Office at Karachi controls the officers of the Bank with the help of the senior management. Functional responsibilities of the Banks are broken into seven groups known as 1) International Operations Group 2) Corporate Banking and Treasury Investment Group 3) Retail Banking and Operation Group 4) Finance, Audit and Administration Group 5) Assets Remedial Management Group 6) Credit Policy Group 7) Corporate Bank, Financial Institutions and Project Finance Group In addition to the overall controlling authority, president also manages the International Operations Group individually. While the Senior Executive Vice Presidents supervise rest of the functional groups. Each Senior Executive Vice President is individually responsible for the group which is assigned to him. At the level of provinces there are Regional Head Quarters headed by Regional Chief Executives (RCE). Each RCE is assisted by GM operations and GM Support Services. Branches are also controlled by the RCEs. Circle Offices of the past times have been removed to reduce Managerial Layers, which were working under the control of Zonal Offices. This happened as a result of policy of beginning new changes in the organizational structure. 19 M. ISMAIL

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2.1.6.2

Organizational Chart of HBL

A chart defines the line of authority in an organization and its departmentation. It is a sort of visual presentation of the organizational structure. It specifies the duties and responsibilities of the personnel of the organization. The Organizational chart of HBL is given below.

2.1.6.3

Organizational Chart Chairman

President Board of Directors

SEVP

SEVP Finance, Audit & Administration

International SEVP Corporate Banking & Treasury

SEVP Retail Banking &

SEVP Asset Remedial Management

SEVP Credit Policy

SEVP Corporate Banking, financial institute & Project Finance

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2.1.7ANALYSIS OF ORGANIZATIONAL STRUCTURE The purpose of an organizational structure is to help in creating an environment for human performance. It is then, a management tool and not an end in its own. Although the structure must define the task to be done, the rules so established must also be designed in the light of abilities and motivation of the human recourse available. By analyzing the organizational structure of HBL presence of the following elements can be found in its structure.

2.1.7.1

Centralized Decision Making

By looking at the organizational structure of HBL would be found that the structure at HBL is a critical one. All the decisions are made at the top management level and the subordinates have to obey these decisions. This trend in the decision making shows a pattern of rigidity in structure of HBL.

2.1.7.2

Downward Communication

Communication is the process by which information is exchanged and understood by two or more people, usually with the interest to motivate or influence the behavior of others in the organization. Downward communication is the message and information sent from top management to subordinates in a downward direction. Managers can communicate downward to the employees through speeches, massages in company publications, information leaflets, tucked into pay envelops material on bulletin boards, policy and procedure mandates. The same pattern is followed at HBL. No doubt it’s a very traditional approach but it can create problems because it ignores the receiver of the communication because the issuer

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of policies and procedures does not ensure communication. In reality may the messages communicated downward are not understood perfectly.

2.1.7.3

Chain of Command

The chain of command is an unbroken line of authority that links all persons in an organization and shows who reports to whom. By analyzing the organizational structure it can be found that there is a scalar principle followed with in the Bank because each and every person knows to whom can one report. The authority and responsibility for different tasks and duties are different, as well as every one knows the successive levels of management all the way to the top.

2.1.7.4

Authority and Responsibility

The chain of command illustrates the authority structure of HBL. Authority is the formal and legitimate right of the manger to make decisions, issues orders and allocates resources to achieve organizational desired outcomes. By analyzing the chain of command of HBL, one can come to the conclusion that, as there is scalar pattern followed at the organizational setup of HBL therefore it is implied that everyone in his position knows that what is one’s authority and what is the responsibility and the authority it allocated.

2.1.7.5

Delegation

Delegation is the process, which managers use to transfer the authority and responsibility to position below in the hierarchy. Most organizations today encourage managers to delegate authority to the lowest possible level to provide maximum flexibility to meet customer needs and adapts to the environment. But at HBL no such system prevails the managers try to keep as much of the authority as they can and if some authority is delegated it is sure that it will be misused

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3.1 PERSONAL EXPERIENCE DURING INTERNSHIP I started my internship at HBL liaqat road branch. Basically HBL hired internees for marketing of its new product HBL Phone Banking. For this purposes HBL trained internees and sent them in different branches of Islamabad and Rawalpindi region. First few days I worked on HBL Phone Banking. HBL provides Phone banking for its account holder. During my work I meet different type of account holders. Many interesting things came to know about account holder. For instance, I meet one of the account holders, I told about phone banking to him and after few minutes when I finished my words about phone banking . The person said “Yeh mera bohat bhare account hay. Main nay es ke information apnay ghar walon ko b nahin de the jab main hajj pay gia tha .aap ko es ke information nahin doon ga” One person said I did not need phone banking. Another person said I preferred manual banking than phone banking. I think there are two reasons of hesitation of account holders from phone banking. First and important thing is that employees of HBL are against this. They feel phone banking is burden on them. Second thing is that most of The account holders of HBL are illiterate. I also worked in different department of HBL. The detail is as under

3.1.1Issuance of Cheque Books I was given the assignment of issuing Cheque books. It is issued to those customers whose accounts are operated by the concern bank. Cheque books in two different categories are issued which are as fallows.  Cheque book for Current account  Cheque book for Profit & Loss Sharing Accounts (PLS).

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3.1.2Filling of an Account Opening form Account opening is an agreement in which customer offers his funds and bank accepts these funds, therefore the nature of relation between a banker and customer is of a contractual one and all the conditions applicable to this contract act are also applicable.

3.1.3Remittance Department Remittances are sums of money sent in payment for or against something. The remittance department is mainly concerned with these payments. Remittances are divided into:

3.1.3.1

Inward remittances

Inward remittances refer to payment in favor of the banks account holders inward remittance includes all Cheque received for collection.

3.1.3.2

Outward remittances

Outward remittances are all payments made to other people on behalf of the account holders in the bank. Outward remittances can also be done for none account holders who deposit cash in the bank and remittance tools are prepared for them. Among the work done by the clearing department is receiving credit advises in favor of the banks account holders and also debit advises against the account holder’s accounts. There are various tools of remittances to the customers who want the facility of remittance.

3.1.4 Demand Draft This draft is made for the customer. This mode of remittance is normally used for payment to out of city beneficiaries. They are normally also drawn on banks near the beneficiary’s residence.

3.1.5 Pay Order Pay orders are mostly used when a customer wants to pay someone who is in the same city as he uses and who prefers non cash payment for any service or goods that he/she sold. This remittance facility is providing to the general public as a whole. 24 M. ISMAIL

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3.1.6 Clearing This is an extra ordinary banking facility which is provided to the public in this if they are maintaining an account with the HBL they can lodge Cheque of any bank in Pakistan, which will be collected and credited to their respective accounts through the process of clearing. In this representatives of various banks are gathered at SBP and exchanges the Cheque presented to them for debit of the respective accounts and in second round of meeting provide each other the fate of those Cheques to be credited to respective accounts.

When people present the Cheque of any other bank for clearing, first enter the Cheque into the clearing register of the bank. Then this Cheque sent to the NIFT for clearing. NIFT is the department which is created by the SBP for clearing the checks of different banks.

3.1.7 Collection of Utility Bills HBL-is providing this facility since long but recently it embark upon it with anew with a new vigor and vitality and extended the range of its utility collections. In this connection HBL nominated its all most all Branches all over the Pakistan to provide utility bill collection facility up to 9:pm instead of normal working hours 5:pm. It also amended the previous collection timings which were from 9: am- to 1: pm, now all branches collect the utility bills up to 5: pm instead of 1: pm. This amounts to the un-matched and unique services provided HBL. Its utility collection ratio is more than 34% of market, which is a clear proof of its exclusive services in this respect.

3.1.8 Pensions Payment Both types of pensions that is provincial and federal are paid to the thousands of pensioners, this is also a unique feature of HBL

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3.1.9 Payment of Salaries This is one the distinct features of HBL, that it provides services to the Govt. departments to distribute their salaries every

month. The prominent examples include ARMY,

RANGERS, POLICE, EDUCATION, and PUBLIC WORKS ETC.

3.1.10

Call Deposit and Payment Order

This is another mode of remittance facility being provided by HBL. When the bank makes any private transaction locally it does not make the demand draft but it makes the payment through payment order. When the bank makes any contract it make payment through call deposits. Call deposit receipts are mainly used for payments concerning application for tenders.

3.1.11

Deposits Section

In the deposit section the amount of rupees deposited are carried out in two ways. One is that the customer wants to deposits the money in his/her account directly in monetary terms, while the second way of depositing the money is through Cheque. In both the cases I observed the following procedures.

3.1.12

Deposit through Cash

In this method a voucher is filled for the customers with the descriptions of Account number, amount deposited title of the account and the name of the customer having that account. The depositor put a signature on the voucher and the amount is paid to cashier who stamped it and the voucher consisted of two parts, one is given to the customers and the other part remains with the bank. In this type of deposit, the voucher is received by writing the amount as BY CASH.

3.1.13

Deposit through a Cheque

In this case the same procedure is fallowed but in the voucher the Cheque number through which the amount is deposited is written against writing BY CASH.

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4.1 SWOT ANALYSIS OF HBL 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 a list of SWOT of HBL

4.1.1Strengths  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 wants 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.

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 The band is always on the look to improve its services both to the domestic as well as overseas customers.  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.  Veteran and experience private management group also involved in other interests like, textile and cement industry.  Customer enjoys the services at the residential localities.

4.1.2Weaknesses  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.  Females feel uneasy in an environment among the male workers.  Victim of political, legal and socio-cultural pressures  .Lack of professionalism in the branch employees mostly.

4.1.3Opportunities  Huge untapped market potential in consumer banking  In opportunity exist, in form of opening of ladies banking section within the branch which is entirely a new idea and it will attract customer. 28 M. ISMAIL

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 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.  Govt. is taking very bold steps to promote IT in Pakistan. HBL has an opportunity to improve in 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 has really improved the bank performance and encourage the atmosphere for other future policies.  HBL also has an opportunity to expand its new technological advancement like; tele banking and internet banking facilities in order to serve the customer more efficiently, specially  E-banking facility is also a new opportunity which is a flourishing business in foreign countries and can also be here, if HBL takes the initiatives.  Further reduction in intermediation costs possible, with improving technology.  Due to efficient and veteran management group, HBL can also improve Ill and expand its foreign operation successfully.  Habib Bank Limited provide opportunity to utilize its skills and efficiencies in leasing business.

4.1.4Threats  An area in the environment that increases the difficulties the organization’s achieving high performance. 29 M. ISMAIL

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 Consolidation in the banking sector resulting in increased competition.  Shortage of trained and specialized staff at lower executive and officer levels  The threat of inconsistency and government policy regarding to business and economics sectors, specially political and regional situation which makes the environment uncertain.  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.  Facing more competition by foreign banks in the market.  Foreign banks are flourishing in field of consumer financing.  Also the increasing operation of private banks.  Highly attractive and advance services by foreign banks to their customers.

5.1 CONCLUSION & RECOMMENDATIONS 5.1.1CONCLUSION HBL is clearly the first choice of every one who believe in qualitative approach of banking an environment of highly responsible people. Bank is enjoying a healthy market share and taste of good status in terms of its operative features and customer support. HBL is clearly the best bank operating in Pakistan. Personal loan is a Sdistinguished feature of HBL experiencing a good reputation and reasonable mark up with respect to prevailing market mark up with assurance of satisfaction and support. HBL has more customers as compare to other banks, if they given proper attention to every customer then in few years it will be the leading bank of the country.

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5.1.2RECOMMENDATIONS  The management should try to decrease job insecurity among the employees.  Training program should be started for internees and newly appointed employees.  There should be transport facility for the employees.  The number of employees should be increased in order to decrease the workload.  The bank charges high service charges as compared to the other banks, so these should be lowered down.  Surveys must be conducted regarding customer satisfaction level and all employees of this dept. should look forward to getting feedback whenever possible.

Adding of value added features that offer competitive advantage is also a means of avoiding customer dissatisfaction.  Quick response to customer queries is necessary to maintain a healthy relationship with the customer.

Proper training of customer handling should be given to employees. Training workshops and coaching clinics should be considered as an option that would provide adequate results.

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