Report on-askari-bank-by-linky-city

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Report on-askari-bank-by-linky-city

  1. 1. INTERNSHIP REPORT BANKING Monetary policy and banking system play an important role in the development of all economic fields of the country because necessary finances for completion of economic plans are provided by them. therefore an organize banking system and the financial institutions plays an active role in this matter. The stable an organize banking policy is much effective to improve the level of saving and consequently the level of investment. The monitory policy is adopted and controlled by the bank but its success depends upon the cooperation of commercial banks. availability of the credit is a big problem for LDCs. The shortage of supply of capital can be improved better and organized banking system because the banks can increasing the saving through launching the various attractive schemes in various productive sectors banks also produce credit money and through this way resources are supplied to productive sectors of the country. KINDS OF BANKS: In Pakistan following types of banks are operating in the business circle like economics. COMMERCIAL BANKS: These banks are set up on commercial basis. Therefore, their primary objective is to earn profit And maximize it is far as possible. For this they received cash deposits from the people in different accounts. They give loans to different business enterprises and thereby create credit money. The State Bank of Pakistan is the central bank of Pakistan, Commercial Banks, financial institutions and cooperative banks are the other components of the banking system. 1
  2. 2. INTERNSHIP REPORT AGRICULTURAL BANK These banks are provide long term and short term credit facilities to landlords and tenant farmers. INDUSTRIAL BANK These banks are medium and long term loans to industrialists to set up new industries for the extension of industries already in operation. MORTGAGE BANKS These banks provides the loans to the people against their moveable and immoveable property. EXCHANGE BANKS These banks deal in foreign exchange. They provide credit to importers and exporters by discounting foreign bills of exchange. SAVING BANKS These banks are set up to induce the people to accumulate their small saving in these banks. CENTRAL BANKS Each country in the world has its own central bank. This bank does not deal with public directly. This means that it neither receives cash deposits from the people nor its give them loans. Therefore it is not a profit making institution. 2
  3. 3. INTERNSHIP REPORT Askari Bank was incorporated on October 09, 1991 as a Public Limited Company and is listed on the Karachi, Lahore and Islamabad Stock Exchange. It started its operations from April 01, 1992. The bank was declared as “Best Bank in Pakistan” in 2001 in Global Finance. The bank’s registered office/Head Office is situated in AWT Plaza, The Mall, P.O.Box No. 1084, Rawalpindi, (Pakistan). Askari Bank Limited has expanded into a nation wide presence of over a 100 branches, comprising commercial and Islamic banking branches, connected online and supported by a network of Automated Teller Machines (ATMs). It also enjoys an offshore banking unit in Bahrain. Over the years, Askari Bank Limited has proven its strength as a leading banking sector entity with ever increasing commitment to its clients, through a strategic investment in electronic technology. It has A1+, the highest possible credit rating, for short-term obligation, and AA+ for long-term rating. Beside day-by-day banking solutions, Askari Bank Limited has a wide range of Corporate, Consumer, and Islamic Banking products. Askari Commercial Bank Limited was the first bank in Pakistan to offer Internet banking Services and B2B e-commerce (Business to Business electronic Commerce) solutions for merchants looking to purchase on credit. They believe that balanced growth is the key to survive in the today’s global banking environment. 3
  4. 4. INTERNSHIP REPORT Mission Statement: - The mission statement of the bank is “To be the leading private sector bank in Pakistan with an international presence, delivering quality services through innovative technology and effective resource management in a modern and progressive organization culture of meritocracy, maintaining high ethical and professional standards, while providing enhanced value to all their stakeholders, and contributing to society” 4
  5. 5. INTERNSHIP REPORT Core Values: We understand that our commitment to satisfy customers’ needs must be fulfilled within a professional and ethical framework. We subscribe to a culture of high ethical standards, based on the development of right attitudes. We believe in our 'core values' as the essential and enduring tenets of our organization - the very small set of guiding principles that have a profound impact on how everyone in the organization thinks and acts. They have an intrinsic value for us and bear significant importance to all our employees. They are the few extremely powerful guiding principles; the soul of the organization - the values that guide all our actions. The intrinsic values, which are the corner stones of our corporate behavior, are: • Commitment • Integrity • Fairness • Team-work • Service Vision: “To be the Bank of first choice” CORPORATE PHILOSOPHY: I n s p i r i n g R e l a t i o n s h i p sI n s p i r i n g R e l a t i o n s h i p s 5
  6. 6. INTERNSHIP REPORT From knowing our customers requirements to understanding employee needs, from utilizing modern technology to making responsible social contributions, from enhancing stake-holders value to practising corporate ethics.... We are continuously and consistently striving to address newer challenges with a single motivation: “the power to inspire and be inspired” OBJECTIVES: Ζ Deliver solutions that meet customer’ financial needs. Ζ Build and sustain a high performance culture. Ζ Build trusted relationships with all stakeholders. Ζ Build and manage the Banks’ portfolio of business to achieve strong and sustainable shareholder return. Ζ Create and leverage strategic assets and capabilities for competitive advantage. Ζ To facilitate the bank with modern banking technique. Ζ To accelerate commercial activities and capture large market share. 6
  7. 7. INTERNSHIP REPORT Corporate Information Lt. Gen. Imtiaz Hussain (HIM) Chairman Lt. Gen. (R) Zarrar Azim Chairman Executive Committee Mr. Shaharyar Ahmad President & Chief Executive Brig (R) Muhammad Shiraz Baig Director Brig (R) Asmat Ullah 7
  8. 8. INTERNSHIP REPORT Khan Niazi Director Brig (R) Muhammad Bashir Baz Director Brig (R) Shaukat Mahmood Chaudhari Director Mr. Zafar Alam Khan Sumbal Director Mr. Kashif Mateen Ansari Director Mr. Muhammad Najam Ali Director 8
  9. 9. INTERNSHIP REPORT Mr. Muhammad Afzal Munif Director Mr. Tariq lqbal Khan Director (NIT Nominee) Mr. A.J.Mubbashar Company Secretary Audit Committy Brig (R) Asmat Ullah Khan Niazi Chairman Brig (R) Muhammad Shiraz Baig Member Mr. Kashif Mateen Ansari Member Auditors A.F.Ferguson & Co. Chartered Accountants Legal Advisors Rizvi, Isa, Afridi & Angell Registrar & Share Transfer Office M/s THK Associates (Private) Limited, Ground Floor, State Life Building # 3, Dr. Ziauddin Ahmad Road, Karachi – 75530 P.O.Box No. 8533, Karachi. Tel : (021) 5689021, 5686658, 5685681 Fax: (021) 5655595 9
  10. 10. INTERNSHIP REPORT Registered Office /Head Office AWT Plaza, The Mall, P.O.Box 1084, Rawalpindi. Tel : (051) 9063000 Fax: (051) 9272455 Website: http://www.askaribank.com.pk/ 10
  11. 11. INTERNSHIP REPORT Executive Profiles • Mr. Agha Ali Imam- Senior Executive Vice President • M.R Mehkari - Senior Executive Vice President • Suhail Ahmad Rizvi- Executive Vice President • Mr. Nazimuddin A. Chaturbhai, Senior Executive Vice President • Malik Asad Ali Noon, Executive Vice President • Mr. Tahir Aziz, Executive Vice President • Mr. Israr Ahmed, Executive Vice President • Mr. Riaz Khan Bangash, Senior Vice President • Mr. Nauman Bashir Khan, Senior Vice President • Mr. Muhammad Ahmed Khan-Senior Vice President 11
  12. 12. INTERNSHIP REPORT Branch Network. 12
  13. 13. INTERNSHIP REPORT Product and services: Personal Finance Personal Finance is a parameter driven product for catering to the needs of the general public belonging to different segments. One can avail unlimited opportunities through Askari Bank's Personal Finance. With unmatched finance features in terms of loan amount, payback period and most affordable monthly installments, Askari Bank's Personal Finance makes sure that one gets the most out of his/her loan. Once a good credit history is established, the door to opportunity opens much wider. Mortgage Finance 13
  14. 14. INTERNSHIP REPORT Askari "Mortgage Finance" offers the convenience of owning a house of choice, while living in it at its rental value. The installment plan has carefully designed to suit both the budget & accommodation requirements. It has been designed for enhancing financing facility initially for employees of corporate companies for purchase/ construction/ renovation of house. Business Finance Smart Cash 14 In pursuance of the National objectives to revive the economy of the country, ACBL is providing loans to small and medium size business enterprises under Askari Bank's Business Finance Scheme. Our goal is to offer a loan, which enables business community to receive the financing required by them based on their cash flows. Our valued customers can enjoy the convenience of getting financing on attractive terms with the minimum processing turnaround time.
  15. 15. INTERNSHIP REPORT This personal line of credit would be set up with a specified credit limit upto Rs. 500,000/- Auto Financing ASKARI CARD ASKCARD means freedom, comfort, convenience and security, so that you can have retail transactions with complete peace of mind. ASKCARD is your new shopping companion which enhances your quality of life by 15 Yet another of our products, Askar offers the most convenient and affordable vehicle- financing scheme, which provides our valuable customers an opportunity to own a brand new vehicle of their choice. With minimum down payment, lowest insurance rates and widest range of available car makes and models, Askcar offers the best value to our esteemed customers
  16. 16. INTERNSHIP REPORT letting you do shopping, dine at restaurants, pay your utility bills, transfer funds, withdraw and deposit cash through ATM anywhere, anytime. TYPE OF CREDIT CARD. There are three types of credit cards issued. i. Silver card ii. Gold card iii. Local card * Silver card has limit upto 2 lac. * Gold card has limit upto 5-lac. * Local card has limit upto 2 lac. Silver and Gold card can be used internationally for shopping and also can be used for internet shopping. * Local card can be used in Pakistan. Travelers Cheques The range of our products and value added services enhances with introduction of Rupee Travelers Cheques (RTCs) launched in March 2002. In spite of our constraint on issuing higher denomination of RTCs against restrictions imposed by the Central Bank of Pakistan we have been striving to attain our shares with sizeable portfolio. Value Plus Deposits The first liability product launched by this unit is showing a remarkable acceptability in the market. The growth of this product is witnessed by its 16
  17. 17. INTERNSHIP REPORT share, which has presently reached at Rs. 1,079 Million even after lowering down the profit rates due to sufficient liquidity in the market. 17
  18. 18. INTERNSHIP REPORT FUNCTIONS OF ASKARI COMMERCIAL BANKS 1. Accepting Deposits Cash in the hand of the people is unsafe because it can be lost. moreover, because some people lack entrepreneurial talents and therefore do not make investment in any enterprise, but they want income on the amount of money they have. Bank promises to solve these problems of people. Banks receives three types of deposits from the people.  Current deposits  Fixed Deposits.  Saving Deposits. Advancing Loans Every bank has learn experience that depositors do not draw whole of their deposits at a time. They only draw a part of it for day to day transactions. Therefore, a bank keeps a part of total deposits as “cash reserve” to meet the cash demand of depositors and advances the remaining part of deposits to businessmen on interest. A bank gives loans entrepreneurs/businessmen in the following ways:  By Opening a loan account.  By means of overdraft.  By discounting bills of exchange.  By purchasing bonds and securities. 18
  19. 19. INTERNSHIP REPORT Creation of the safest medium of exchange: It is neither safe nor easy to make payment in the form of metallic coins or paper notes. Therefore, payments are made by cheques these days. Agency Services A commercial bank performs many services as an agent of its clients or depositors. It makes payments on order cheques issued by its depositors. It receives the amount of money on crossed cheques issued in the favour of its clients and deposits the amount in their accounts. General Utility Services A bank provides general utility services to its clients as well, for example it keeps their precious documents, gold ornaments, bonds and shares etc. in safe custody in its lockers. Financing of Foreign Trade. A commercial bank receives foreign exchange earned by exporters and makes payment also in foreign exchange in foreign countries on behalf of importers. It also advances loans. Departments Of Askari Commerical Bank  Accounts Department  Cash Department  Clearing Department  Credit Department 19
  20. 20. INTERNSHIP REPORT DEPOSIT & ACCOUNT OPENING DEFINITION OF BANKERS As defined in section 3(b) of negotiable instrument act 1881, ‘”bankers” means the person transacting the business of accepting for the purpose of lending on investment of deposits of money from the public, repayable on demand or otherwise, and withdraw able by cheque, draft, or otherwise, and include the post office savings the bank. DEFINATION OF THE CUSTOMER: A customer is the person who maintains a regular bank accounts without taking in to consideration the duration and frequency of operation of his accounts it means that the person becomes a customer of the bank as soon as he open his accounts deposit money in the same and the bank accepts the said deposit. QUALIFICATION OF CUSTOMER: He should not be a minor because a minor is not competent to contrect.according to section (3) of the majority act 1875 a person is deemed to have attained the age of majority when he has completed the age of (18) years. He should be a person of sound mind Section (12) of the contract act says that “the person is said to be of sound mind for entering into contract if at the time when he makes it he is capable of understanding it and of forming a rational judgement as to its effects upon his interest. He should have not been debarred from entering in to any contract under the law. There is an offer by the customer and acceptance by the banker. The customer offer the money to deposit and banker offers to accept it. 20
  21. 21. INTERNSHIP REPORT RIGHTS OF A CUSTOMER A customer has the following universally accepted rights. To draw cheques against his credit balance in the account. To receive pass book or statement of his account. To sue the bank for the cost, loss and damages, when his cheque is wrongfully dishonoured by the banker. To sue when the banker has not maintained the secrecy of his account, except when it is done under compulsion of law in the interest of the bank or as the duty to public. DUTIES OF THE CUSTOMER Section (72) of negotiable instrument act 1881 lays down that the customer must present the cheques for payment and collection with in the business hours of the bank. To keep his cheque book under lock and key To draw the cheques very carefully so that there is no room for any fraudulent additions or alterations. To see that the cheque issued by him presented to the bank for payment with in a reasonable time. OPENING OF ACCOUNT The banking history is replete with various instances of fraud largely due to incorrect opening of accounts. These fraud could have been avoided in if the branch managers and other designated officers had taken due care and exercised required precautions at the time of opening of accounts. At the time of opening of accounts, officers should tactfully obtain as much information as possible about the integrate and character of the person, his correct name, address and 21
  22. 22. INTERNSHIP REPORT occupation. This infect will be the only opportunity when they will be able to talk to the prospective customers in a friendly and frank atmosphere. This is the time when they have a slight edge over the customer. He or she at this point of time is willing to divulge as much information about his personal status and business etc to the bank manager. It is therefore necessary that due care and proper procedure be followed for opening different types of accounts for various types of customers. Askari commercial bank limited has the following classifications of accounts, A INDIVIDUALS ACCOUNTS B PARTNERSHIP FIRM ACCOUNTS C JOINT STOCK COMPANY ACCOUNTS D AGENCY ACCOUNTS E CLUBS, SOCIETIES & ASSOCIATIONS ACCOUNTS F EXECUTORS AND ADMINISTRATORS ACCOUNTS G TRUSTS H LOCAL BODIES ETC. I PROPERITORSHIP J JOINT ACCOUNTS K OTHER MISC ACCOUNTS When a customer open an account under the law he enters into a contractual relationship with the bank. At the time of opening the account, intended customer must have the following characteristics: A He must have reached the age of majority 22
  23. 23. INTERNSHIP REPORT In term of section 3 of the Indian majority act 1875 (as adopted in Pakistan) a person is a major if he attain the age of 18 years. However, the age of majority shall be 21 years in case of European nationals and also where guardian is appointed under the guardians and wards act. A person who is under the age specified herein above is considered a minor. in term of section 11 of the contract act, a minor is declared incompetent to enter into a contract. As such, any contract with a minor is a void. However , the banks generally allows the minor to open accounts with a view to inculcate in them the habits of saving. Such account is opened jointly with their guardian and are allowed to be operated by the guardian. The guardian for the purpose will sign the account opening from and the specimen signature card. B He must be of sane mind A person is said to be of sane or sound mind it he understands the terms and the conditions of the contract and is capable enough to form rational judgement as the effects of the contract upon his interest. C He must not be insolvent and bankrupt. At the time of opening the account, he should not be adjudicated as insolvent. Generally a person is considered as insolvent if his liabilities exceeds the assets he is possessing. D He must not be debarred under any law from entering into any contract. It is the duty of the banker to make sure that all above criteria is satisfied before he allow the opening of the account. For general guidance of the officers, given below are the essential points that must not escape their attention while opening the accounts. WHO DEAL WITH OPENING OF ACCOUNT: As for as possible the account opening job should be handled by the branch manager himself. Only in exceptional cases in main branches, the job may be assigned to other officers. 23
  24. 24. INTERNSHIP REPORT INFORMATION: As much relevant information as possible must be elicited from the prospective customer relating to his means, line and place of business etc. FORMS TO BE FILLED IN CAREFULLY: Each and every column of the account opening form should be neatly and correctly filled in with necessary details. INTRODUCTION OF ACCOUNT: Account must be properly introduced. In this concern, the following precautions are to be observed. I As for as possible, the person introducing the account should attend the personally with the prospective customer. This would serve the dual purpose. A The branch manager shall have the opportunity of eliciting vital information as to the standing, respectability and the means of the person he is introducing. B The identity of the customer must be properly established beyond any doubt. Iintroducing from person having doubtful dealing with the bank should be discretely declined. The staff member generally should not introduce the account. They will introduce accounts only for those persons who are personally known to them and whose credentials are absolutely clean. 24
  25. 25. INTERNSHIP REPORT As for possible, the account opening form should be completed by the prospective customer in presence of the introducer who is then aware of the particulars furnished and can corroborate the same. Specific information concerning the profession should be recorded in the account opening form. The description private Service’ or ‘Businessman’ is insufficient. Signature on the account opening form must be put by the customer will attest them properly in presence of introducer. No cheque book should be issued to the new accounts are properly introduced. Account may be opened with cash or cheque. Initial deposits, it is incumbent upon the Branch Manager to satisfy themselves additionally that title of account holder is genuine for the cheque deposited. Prudent bankers avoid opening new accounts with cheque. Letter of thanks should be sent to the introducer the day the account is opened. This precaution would accomplish the purpose of intimating the introducer that the account has been opened on strength of his introduction thereby inviting disclaimer if untrue. A letter of thanks should be sent to the new account holder, preferably through registered mail, to verify his address. In the evening, the officer of the branch should visit the customer’s area to establish that the address given by the customer is correct and the commands respect and honour in the neighbourhood/vicinity he is living. Number of the customer’s national identity card should be correctly recorded in the account opening form and copy of it should be kept on record. No account should be opened in the name of an undischarged insolvent. TYPES OF ACCOUNTS Let us now turn to procedure to be followed in case of each type of accounts. INDIVIDUAL ACCOUNTS: Such account may be classified as follows:  Accounts of literate ladies and gentlmen. 25
  26. 26. INTERNSHIP REPORT  Accounts of parade observing ladies.  Joints accounts.  Minor accounts. 1. In order to open the account for literate people an account opening form, signature card, form “A”, and an ID copy are required with Rs. 2500 for opening account and he must fulfil all customer characteristics. 2. In case of illiterate ladies and gents, the following precautions are observed in addition to those provided in the above guideline. a) Two photographs are to be obtained one to be pasted on account opening form and the other specimen signature card. b) Instead of signature left hand thumbs impression to be obtained on the specimen signature card from gents and right hand thumb impression from the ladies. c) Each time such customers should attend the bank personally and will put their thumb impressions on the cheque before the passing officer. d) Such customers should be advised not to issue cheque payable to third parties. e) Cheque should be marked payment in person to ensure even if the cheque is presented through clearing that particular cheque can only be paid in person 3. When account is opened by more than one person but the relationship between them is neither of trustees nor partners it would be termed as joint account. Whenever such accounts are open-end, definite instruction regarding operations on the account and payments of balance in cased of death of any one of them should be obtained. 4. A person who is under the age as specified above is considered as minor, a minor is declared incompetent to enter into a contract. However, the banks generally allow the minor to open accounts with a view to the condition of saving habits. Such account is opened jointly with their guardian and is allowed to operate by the guardian. 26
  27. 27. INTERNSHIP REPORT ACCOUNTS OF PARTNERSHIP FIRMS While opening accounts of the partnership firms, the partnership deed from registered firms is required obtained in the addition to account opening form and specimen signature card. The partnership letter is attached with the accounts opening form, which must also be signed by all the partners of the firms whether registered or unregistered. In these accounts, the following points should be remembered. 1. All the partners must sign the account opening form. 2. The names of persons authorised to operate the account must be neatly and correctly given in the account opening form. 3. For partnership concerns carrying on the business under impersonal name it is generally described that the title of accounts should show name of the partners or managing partner. 4. A cheque payable to the firm should not be accepted for credit to personal accounts of the partners without the written authority of all the partners. 5. The maximum numbers of partners in general business 20 and the minimum is 2 for the banking firms the maximum numbers of the partners is 10 in Pakistan however bank can not be opened by the partnership concern 6. Since these are the business concern they will be allowed to open current accounts. No saving s bank accounts be opened in partnership name. Partnership account opening required following documents: 1) Account opening form (A.O.P) 2) A.O.P should be duly introduced 3) Copy of N.I.C Of all partners 4) Registration certificate (optional) 5) Partnership deed 6) Rubber-stamp on letterhead of the firm 27
  28. 28. INTERNSHIP REPORT 7) Letter Head 8) Official capacity (It means that all the partners will sign and choose the singe for operation of account with the bank. And in account opening form the name of the official capacity is written in special instruction and recommended by all the partners). ACCOUNTS JOINT STOCK COMPANIES Joint stock companies include  Private limited companies and  Public limited companies PRIVATE LIMITED COMPANIES Private limited companies are those where the share capital is not offered to the general public instead the offer is restricted to particular class of society or with in the family members. Generally their share are not transferable. The minimum number of shareholder is 2 and maximum, is 50 private limited company are not listed on stock exchanges and therefore their shares are not publicly quoted. PUBLIC LIMITED COMPANIES: In this case, the promoters and general public contribute share capital. Any Pakistani who is authorised to enter into contract can purchase share. Shares of these companies are transferable and brought and sold freely in stock exchanges. The minimum number of shareholder is 10 whereas there is no upper limit. The following documents are required for joint stock companies account opening. a). Copy of resolution While opening the company’s account, the manager must ensure that board of directors of the company is properly constituted and request for opening the account comes through resolution of the board of directors. The resolution for account opening should bear company seal and signed by the chairman of the meeting where such resolution is 28
  29. 29. INTERNSHIP REPORT passed and counter-signed by the company’s secretary or authorised director must be submitted to the bank before an account can be opened. b) A.O.F. duly signed. c) Memorandum of Association & Articles of Association. d) Certificate of Incorporation. e) Certificate of Commencement of Business (only required for public limited companies. f) National identity cards of directors. g) List of director with their shareholding. h) Specimen signature card duly signed ACOUNT OF PROPRIETOR: 1. A.O.F should be duly introduced 2. Copy of N.I.C of proprietor 3. Specimen signature card duly signed 4. Proprietorship declaration concerns on firm’s letterhead.s ACCOUNTS OF CLUBS, SOCIETIES AND ASSOCIATION: Clubs, societies and associations are non-profit and non-trading in nature. They have their own rules and regulations and committees mention their affairs, which is called Governing Bodies. Documents that are required are: i) Account opening form ii) Specimen signature card iii) Resolution to be passed by their governing bodies iv) Certified copy of rules and regulations or Bye-law v) Letter of registration vi) Letter of undertaking to the effect that as and when change take place they will inform the bank of such changes. 29
  30. 30. INTERNSHIP REPORT DEPOSITS: Deposit is the lifeblood of a commercial bank. Main function of a commercial bank is to enhance the savings from the savers to the ultimate user of funds. The process of collecting savings is called Deposit Moblization. FORMS OF DEPOSITS: Two broad forms of deposits with reference to time period are: A)Demand deposit: These are payable on demand. They include current account, sundry deposit (e.g. margin account) and deposit receipt. No profit is given on demand deposits. i) CURRENT ACCOUNT: ii) This type of account is usually opened for businessman or such persons who needs deposits and withdrawals facility without any restriction. Introduction is necessary when opening a current account, the procedure has already been explained else were in this book and account number is allotted and for withdrawals cheque book is issued and a statement of account is provided so that customer can reconcile his account with his own record. No interest return is paid on such account is Pakistan, This account can be opened with Rs. 500. Banks usually recover service/incidental charges on current account if the required minimum balance is not maintained. Or when the maintenance of the account becomes expenses e.g. For example too many transactions take place on summing a large number of chequebooks and other stationary not consistent with the average balance. ii) CALL DEPOSIT RECEIPT: 30
  31. 31. INTERNSHIP REPORT It is a contract for a specific deposit transaction and is used as a security for bidding etc. It is non-transferable and is payable only to beneficiary or purchaser. iii) SUNDRY DEPOSIT -MARGIN ACCOUNT, At the time of issuance of LG / LC or acceptance the party is supposed to deposit is kept in an account called sundry deposit. Margin account Similarly, at the time of allotment of locker the locker holder is supposed to deposit a certain sum as security, which is kept in sundry deposit account. FEATURES OF MARGIN/SUNDRY DEPOSIT ACCOUNT. ϕ Reduces risk/exposure. ϕ Free of cost deposit enhances profitability ϕ Respective accounts are opened. 31
  32. 32. INTERNSHIP REPORT ϕ Non checking account- rather customer has no approach to this account. As far as operations are concerned ϕ It relates to the liability L/C, L/C acceptance and is adjusted when liability is redeemed/released. B)TIME DEPOSIT: Payable on demand with certain maturity. Attracts profit with respect to time.  PLS Saving accounts 32 Deposit Accounts Minimum Balance (Rs) Rate of Return p.a. % Payment of Return Product Base. FISDA (financial institutional special deposit account) 50,000 & above 0.25% Monthly Daily ASDA (Askari special deposit account) 50,000to 999,999 1000000& above 1.00% 2.00% Monthly Monthly Daily Deposit Accounts Minimum Balance (Rs) Rate of Return p.a. % Payment of Return Product Base. Value Plus (saving account) Minimum Rs 10,000 2.00% Monthly Minimum monthly balance Notice deposits 07 days 30 days 5,000 5,000 0.50% 1.00% Maturity Daily
  33. 33. INTERNSHIP REPORT  maturates Askari FISDA (ASDA)  Special notice time deposits are of two types: i account  Askari Special Deposit Account.e. 7 & 30 days notice.  All TDRS (term deposit receipt) of different, maximum one year. ϕ SAVING ACCOUNT (INTEREST BASED SYSTEM) As the name denotes savings accounts are basically meant for mobilizing saving of people. In the interest based system a saving account could be opened with only Rs. 2500 for new persons but regular customer’s saving account can be opened with Rs. 500 for single individual or for two or more individuals jointly, charitable institution, provident or other funds of benevolent nature for local bodies, autonomous corporation, companies, associations, educational institutions etc. 33
  34. 34. INTERNSHIP REPORT CLOSING OF ACCOUNTS. It is the prerogative of either party to the contact i.e. the banker or the customer whether to keep the account with a particular bank or close the same without assigning the any reasons. A customer generally uses this discretion. • When the particular branch becomes out of the way or too far from his place of business. • The purpose for which the account was opened has been served. • The bank branch is unable to give him certain credit facility that he requires. In such a case the customer should surrender the unused chequebooks to the bank and withdraw the balance lying to his credit after informing the bank formally. Bank may also closed the account of the customer after notifying the banks intention and giving him a reasonable time to make arrangement to have his cheques in circulation presented for payment before the notice period expires. Closing of customers account warrants a proper Notice determining the contractual relationship. Following are the reasons by which bank can close the account of customer. 34 TDR One month Two months Three months Six months One year 5,000 5,000 5,000 5,000 5,000 1.00% 1.25% 1.5% 2.00% 2.50% Maturity Six monthly Daily Daily
  35. 35. INTERNSHIP REPORT a) By frequently drawing cheques much in excess of the balance in his account which are return unpaid. b) By introducing accounts of parties, which becomes undesirable in cause of time. c) By frequently contravening the Rules for operation on the account. d) By making himself aggravate during his visit to the banks branches and picking quarrel with the staff unnecessarily. LOCKERS: ACBL also offers the facility of lockers of three type to it customer to offer security. Types Size Annual rent (Rs) or Refundable deposit (Rs) Small 6 inches x 2feet 1,000 15,000 Medium 12 inches x 2feet 1,500 20,000 Large 2 feet x 2feet 2,500 35,000 Key deposit is Rs 1,000 per locker. In the case if customer lose the key of locker then breakage fee will be charged about Rs. 2,000 per locker plus actual charge of supplier of locker. DOCUMENTS REQUIRED FOR LOCKER OPENING: ⌠ Locker opening form ⌠ Specimen signature card ⌠ Copy of NIC Applicant should be account holder in the bank. 35
  36. 36. INTERNSHIP REPORT CLEARING Clearing is a system by which bank exchange cheques and other negotiable instruments drawn one each other within specified area and securing the payment for their clients through the clearing house. A clearinghouse is an organization where these cheques are brought and the mutual claims of each bank on the other are offset ad settlement is made by the payment of difference. The responsibility of operation for the clearinghouse function lies with the state bank of Pakistan. The function of clearing can be understood with the help of a simple example. Every bank has its account with state bank of Pakistan. Suppose on of the account holder of ACBL brings a cheques of habit bank of (Rs 7000/-). Now in state bank of Pakistan the representatives of both banks will appear for clearing physical payment of cash is not made, but our banks (ACBL) account would be reduced by RS. 7000 and increased by Rs. 10,000 the reverse would be true for habit bank limited the clearing may be “for” or “against” if our bank’s A/C in sbp contains a net debit balance then it would be for and if credit balance then it would be “against” clearing. COLLECTION OF CHEQUES; These cheques may be drawn on UBL HBL, or MBPor other banks of Pakistan. The clerk collects all the cheques of different banks and prepares schedule for them. Representatives of all banks will receive the cheques related to their branch either issued by its branch or other banks. If bank transfers funds in the same city, it is called IBC “INWARD BILL OF COLLECTION” and if bank transfers funds to another city when it is called OBC OUT WARD BILL OF COLLECTION. Bills are of 2 types Clean and documentary clean bills include finance instruments and documentary includes documents attached with goods. . 36
  37. 37. INTERNSHIP REPORT ADVANTAGES OF CLEARING:  Systematic arrangement for collection and clearance of cheques.  Speedy and economic collection and clearance of cheques.  Clearance of cheques and other instruments of different branches of different banks in a systematic manner without any flaw and mistake.  The collection and clearance of Govt. bills, instruments, and cheques.  The collection of Govt. revenue through cheques, pay order and drafts payable through the State Bank of Pakistan and National Bank of Pakistan.  It avoids the difficulties and cumbrances to be faced by the branches if they collect the instruments directly from branch to branch.  Confidence among the clearing members is produced. CLEARING OUTWARD: When the customer deposits cheques and other instruments of other banks for collection, we send the cheques in outward. Clearing. PROCEDURE: cheques are received duly entered on pay-in-slip. Counter foil is returned to customer after signatures. Crossing stamp is fixed on the cheque. Clearing stamp is fixed on the cheque and pay-in-slip. Clearing stamp with next date is fixed on the cheque and pay-in-slip. Endorsement stamp is fixed on the reverse of the instruments. CLEARING HOUSE; In the clearinghouse the representatives of all the banks gather and exchange their instruments. They enter the total amount of cheques delivered and 37
  38. 38. INTERNSHIP REPORT received in their summary sheets. The total of schedule received tally with the total of summary. Clearing cheques received from other banks are sent to branches which will clear the cheques and instruments to respective amounts. Some cheques are returned un paid with the reasons mentioned in the cheques return memo.IBCA for net amount is sent to main branch. In the 2nd house clearing cheques are return and exchanged by the representative of the banks. A summery is prepared for cheques received and delivered and net position is ascertained. Amounts are settled through SBP accounts. After cheques are returned, the main branch sends IBCAs for net amount to the branches. Computer entries are made for (-) credits for returns and debits to main office A/C. INWARD CLEARING: In clearing house the cheques received from other banks are collected & sent to branches for their payment. Crossing stamps, clearing stamps and endorsement are checked. Crossing stamp other than collecting bank is cancelled. Cheques & instruments are posted to the debit of respective accounts. Any instruments returned un-paid shall be returned in the second session of the clearinghouse i.e. 2nd clearing. Cheques & instruments if un-paid are returned along with return memo. IBCA,s for net amount is sent to the main branch. ENTRIES FOR O/W CLEARING: Dr. Suspense A/C clearing. Cr. Customers A/Cs. 38
  39. 39. INTERNSHIP REPORT FOR I/W CLEARING: Dr. customers/Cs clearing(for return) Cr. suspense A/C clearing (1/W clg) TRANSFER DELIVERY: This is the arrangement by which instruments of the branches of the same bank with in the city are collected and cleared. OUTWARD TRANSFER DELIVERY: The system is just like outward clearing. In outward clearing branch wise schedule are prepared. The clearing instruments are presented to the branches through main branch of the city. This is more effective & speedy process as compared to LBC because fate is received next date. PROCEDURE OF O/W TRANSFER DELIVERY: The customers deposits cheques & instruments of the branches of ACBL at Lahore along with pay-in-slip duly filled in. Crossing stamp is fixed on the instruments. Transfer delivery stamp is fixed for next date. Endorsement stamp is fixed on reverse of the instrument. Payee’s A/C is credited Askari Commercial Bank Ltd Badami Bagh Lahore. INWARD TRANSFER DELIVERY: Cheques drawn on the branch are received with the schedule. The entries are made in the I/W. TD register and balanced with the summery of T.D. 39
  40. 40. INTERNSHIP REPORT cheques are debited to respective account and cheques which are not passed returned with the objection memo. The IBCA is sent for the net amounts for cheques passed. INTERNAL CLEARING: When the customer deposits the cheques in the branch drawn on the account in the same branch. The cheques are received along with the pay-in-slip. The amount is transfer from the account where the cheque is deposited and credited to the account where it is transfer. SPECIAL DELIVERY: SBP conducts special clearing when clearance of special Government revenues is required. Government cheques. Pay order treasury cheques are cleared and paid. Remittance department plays an important an important role in transfer of funds; it includes DD, TT, MT, TC and pay order. It is an instrument payable on demand for which value has been received issued by the branch of the bank drawn i.e. the payable at some other place (Branch) of the same bank. TRAVELLERS CHEQUES (TC): TC (traveller’s cheques) is for all branches with no charges. We give the money in cash/cheque/direct debit instructions to the banker and he gives in return the slips of Rs.10,000, Rs. 25,000, Rs.50,000, Rs.100,000, Rs.500,000 which is required. Now government has made some restriction against TC because people have stared it to 40
  41. 41. INTERNSHIP REPORT use in place of money. There are no charges of any type such as postage, taxes, commission charges. TELEGRAPHIC/MAIL TRANSFER (TT/MT): This is an instrument that is use to transfer the money from one branch to other branch of same bank through bank. The person known as payee, for whom TT is made, TT is only paid to him after seeing his ID card. TT has been made on following modes of payments. 1. On cash. 1. On cheques. 2. Through debiting account no. After issuing TT it is get registered in issuing register. Which required TT/MT no. payee name and address, amount, account no.(if through account payment has been made), cheque no.. Along TT/MT an advice also be send to other branch from where money will be drawn, that advice is called telex message. On the basis of which the other branch will pay the money after tallying serial no. and test no. of TT. TT is made if the client has account in the bank if he has no account then he has to fill the TTR (telegraphic transfer receipt) which is a voucher for the official record in bank. Its form is of blue colour. In DD the person has to take care of DD which is issued to him. Demand Draft (DD): The demand draft (DD) is issued to the person who want to draw money from another branch in any other city, then by showing that draft he can easily draw money if he has account there. Demand Draft is issued by one branch of 41
  42. 42. INTERNSHIP REPORT bank payable to other branch of the other bank e.g. DD is issued by ACBL payable by MCB. The person who pays the value and on whose behalf draft is issued is called purchaser. 42
  43. 43. INTERNSHIP REPORT The Branch/Office which issues a draft on another branch or office is called the drawing/issuing branch. The Branch /Office on which draft is drawn is called the drawee branch. The person entitled to receive the payment is called the payee. DD also has been made on three modes of payments. 1. On cash. 2. On cheques. 3. Through debiting account no.  ISSUANCE OF DD:  Request shall be on the standard DD application form.  Fill in all information such as name of beneficiary place where the DD is drawn, amount, mode of payment cash/cheque /debit authority signature with name and addresses.  Check the application form.  Charge commission as per schedule of charges.  Get voucher from cash department. After the customer has made payment by cash /cheque.  Prepare the demand draft (Security Stationery)  The issuance of DD is computerised and the amount is automatically protected graphed during printing for avoidance of forgery.  Entry is then made in DD issued register, in the DD issued register separate folio is allotted for each draw branch and a serial control number is applied. After issuance of DD, an advice is send to the branch from where client wants the money to be drawn, which confirms the DD. In this aspect cantra is another concept, which is followed in the branch where money is transferred. Payment of DD takes place in two ways: 43
  44. 44. INTERNSHIP REPORT 1. If advice reach the other branch before the draft then that branch debit the H.O of bank and credit client. 2. If draft reach first then bank open the temporary account called suspense account or red account through which amount is debited for the satisfaction of client and credited the H.O of bank when that branch receives the advice than it debit the H.O of bank and credited the suspense account. There are postage and commission charges. CANCELLATION OF DD: • Obtain application in writing along with original DD. • Verify the signature of applicant. This signature should tally with signature on DD application form. • Mark cancellation in DD issued register. • Payment from suspense account DD cancelled after recovery of cancellation cheques as per current schedule of charges. • Inform the drawee branch regarding cancellation and ask for IBCA. • On receipt of IBCA adjust amount paid out of suspense account. Lost/Stop Payment/Issuance Of Duplicate DD. • Get application from purchaser and verify the signatures. • Inform the drawee branch of the loss of DD and advise them to mark caution against payment if presented. • After necessary checking, the drawee branch will inform us about the status of DD- whether it has been paid or is still outstanding. • Write on the face of duplicate DD in red ink “Duplicate in lieu of original DD. no.____ dated ____ reported lost”. • The duplicate DD will have the same control number. 44
  45. 45. INTERNSHIP REPORT • The printed number and serial control number of DD issued shall be mentioned on the application form. • Signatures of two attorney holders with their attorney number should obtained on the DD. The 2nd signing officer must check all the particulars before signing. The postage rate is fixed Rs.25and commission rates are as following: PAY ORDER: Pay order is also called “banker’s cheque” drawn upon the issuing branch/Office itself. It required account no. and other information about client which mean cross payment is its restriction. • Get the application form. Issues pay order after recovering charges. • Do necessary vouchering. Make entry in PO issue register. • All pay orders shall be crossed “payee’s account only”. • It may be noted that IBCA is not involved because PO are payable in same branch. CANCELLATION OF PO: • Application for cancellation. Surrender of original pay order. Recover cancellation charges. LOST AND DUPLICATE PAY ORDER. Check the record to ensure that payment has not been effected. Get application for issuing of duplicate PO. Recover charges. Issue duplicate pay order. Pay slip: The banks for settlement of its own payment issue pay slips. There is no excise duty and no commission. 45
  46. 46. INTERNSHIP REPORT “ C r e d i T D e p a r t m e n t ” “The major source of bank’s income Credit department is most important department of bank to earn her income by lending money to other at different rates as compare to that deposit interest rate. Normally, bank takes money from depositors at rate X and utilize those funds by advancing them at X+1 rate, so X- (X+1)=1 this 1 is the income of the bank. If we say that bank is body then credit is blood of that body. It generates revenue for the bank so credit decisions are to be carefully analyzed. Different departments are working in SBP to monitor credit. * BCD.................. Banking control Department. * BSD.................... Banking supervision Department. * BPRD ............... Banking policy and regulation department, Commonly operations regulate credit size, sector and bank. Credit line is given to banks finance the purchase of crops after every six months . NATIONAL CREDIT PLAN: Every year economic survey is made and with the help of this survey government patronize certain sectors and also advise banks to give more loans in these sectors. According to this year the agriculture sector is the target for financing. CREDIT REGULATION 1992: In 1992, certain regulation are made by SBP for credit advancement: ⌡ Bank cannot lend more than 10% of its reserves. ⌡ No bank can lend to its directors. 46
  47. 47. INTERNSHIP REPORT ⌡ No bank can finance its own shareholders. ⌡ If bank finance to other bank’s shareholder than it has to take permission from SBP. ⌡ Bank has to handle its suspense liabilities within 30 days. ⌡ Advances ratio should not exceed 65%. Bank should check the current ratio of the customer. PROCEDURE FOR TAKING LOANS: For taking loan first credit line proposal (CLP) is made. In a CLP there are different types of documents: ϕ Application form ϕ Credit information Application form: The customer requests the application form from the bank for the loan. Some documents are also attached with the application, which are of two types: • Permanent Information Memo • Charge Document • Permanent Information Memo: These are the documents in which there are permanent information of customer and his business. Charge Document: Charge document is made for the security purpose. These document are sign by borrower. Purpose for sign is that if the borrower does not pay the loan in a certain specific period of maturity then these documents can be shown in a court against him. Credit Information: 47
  48. 48. INTERNSHIP REPORT For the satisfaction purpose bank also take credit information about the party. Credit information is taken from the Credit Information Bureau (CIB). This type of information is taken when loan of huge amount is taken, above 5 million. Clearance report is checked. All these documents are arranged in a file. This file is called credit line proposal. Every loan is sanctioned after the preparation of CLP. DISCRETIONARY POWERS OF ADVANCES: Up to certain limit each level can give orders of advancing loan but for the bigger amount branches have to take permission from upper level of authorities. Credit sanction advice move through these levels. 48 B ra n c h c re d it c o m m itte e A re a o ffic e c re d it c o m m itte e H e a d o ffic e c re d it c o m m itte e E x e c u tiv e c re d it c o m m itte e B o a rd o f d ire c to rs
  49. 49. INTERNSHIP REPORT TYPES OF SECURITIES Normally loans are of two kinds. i. Clean loans. ii. Documentary or secured loans. In clean loan no tangible securities are taken from the customer. But in secured loans tangible securities are Different kinds of secure securities are • Deposit with bank. • Deposit with other banks. • Government securities. • Account receivable /notes receivable. • Inventory. • Moveable /immovable property Fixed assets are hypothecating, Pledging or mortgaging. In these three cases tittles charge and control varies among bank and the borrower Type Title Charge Control Hypothecation Borrowers Bank Borrowers Pledge Borrowers Bank Bank Mortgage Joint Bank Bank GOOD LENDING PRINCIPLES. There are five good lending principles, which are kept in mind while considering a credit decision. 49
  50. 50. INTERNSHIP REPORT 1. SAFETY Lending must be safe enough and given to one who already has the ability in the form of cash flows to show and for this purpose some liquidity security should be pledge. 2. SUITABILITY Lending must fit into the plan and loans are given to a business a growing industry. 3. LIQUIDITY. Business cycle should be complete in one year. The credit will be refunded in liquid form and for debt security bank consider most liquid security. 4. DISPERSAL Loans should be given in diverse sector and should not be concentrated just to one sector to maintenance balance growth of economy. 5. REMUNERATION Lending must be remunerative and ultimate goal is to maximize the profit. RISK ANALYSIS We know higher the risk higher the return but risk must be carefully evaluated. There are five Cs, which should be considered. 1. CHARACTER Normal and social character of an individual or organization should be good. He should not be involved in any illegal and unethical business like smuggling or black- marketing. 2. CAPACITY Borrower must have the capacity to take the loan and repay that loan. 3. CASH There must be regular cash flows of business because liquidity is important for refund of loan. 4. COLLATERAL Transaction must be secured by collateral. The applicant should have such amount of asset that can be used as security of credit he has taken from bank. 50
  51. 51. INTERNSHIP REPORT 5. CONDITIONS Different conditions are important to minimize the risk of lending mostly these conditions are two kinds. These conditions relate to industry and country environment. • Positive condition: Bank does not restrict the applicant to do something but it demand for some paper to be signed. • Negative condition: Bank restrict the applicant to invest this credit in pre-specified business. TYPES OF LENDING: There are two types of advances: A. Funded finance B. Non-funded finance A. FUNDED FINANCE In a fund base loan cash are involved. In these loans cash transaction are made directly. Fund based loans are further divided into five types: 1. Running finance 2. Cash finance 3. Term finance 4. Staff finance 5. Clean finance 6. Mortgage finance 7. Trade finance 51
  52. 52. INTERNSHIP REPORT 1. RUNNING FINANCE This is also known as current finance or hypothecation. Per day mark-up is a charge but customer is flexible to draw within the drawing power. Hypothecation of stock is the prime security. In running finance amount is mentioned clearly. Mark-up is charges on the amount that is drawn not on full amount. Previously this is known as “overdraft”, in which customer can withdrawal his credit account in excess of credit in it. 2. CASH FINANCE This is just like in running finance the only distinction in this case security is stock pledged form and the security margin is also charged. Chequebook is not issued. Cash flow must be regular one. Bank issues delivery order if the borrower wants to draw stock equal to money deposited by customer. 3. TERM FINANCE Its time period is fixed. Amount and mark-up rate is mentioned. Mark-up is charged on the full amount of loan because amount is withdrawal at once. Term finance is secured by security. Credit should be given according to the security. It is more profitable than running and cash finance because mark-up is charged on whole amount. There are some cases when long term finance is also provided, these are: * Existing plant is in running and expansion in it is needed * To running plant for replacement of machinery * To running plant for modernization 52
  53. 53. INTERNSHIP REPORT 4. STAFF FINCNE (PERSONNEL) This facility is given to the staff of ACBL. The amount of loan depends upon the rank of staff. * OG iii to OG I the amount of loan is Rs,25,000 * Above OGI up to SVP Rs.50,000. * And above SVP Rs.100, 000 Repayment period is 2 years and instalments are deducted from salary. Mark-up rate is 5% no security is needed it is against GP fund. The eligibility is 2 years or more service. 5. CLEAN FINANCE: These are the special types of finance is given without the security. In the ACBL these type of finance are given to the Army officers mostly. The amount of this finance is Rs 25000. The bank should not be given more than Rs. 25000. 6. MORTGAGE FINANCE This I also transacted through Retail Banking Division. as a security simply the mortgage of property is demanded by the bank. this is for three purposes; * Purchase of house * Construction of house * Renovation of house This facility is for individuals. Repayment period is 15 years for construction and purchase of house and for renovation 7 years subject to remaining service. The mark-up is SBP discounting rate 4% plus with a floor rate 15%. Total service of the applicant should be 3 years and minimum 2 years with the existing employer. no complicated procedure only the recommendation of the employer is needed. 8. TRADE FINANCE: There are two kinds of the trade finance. 1. Import related finance 53
  54. 54. INTERNSHIP REPORT 2. Export related finace 1). IMPORT RELATED FINANCE: There are two types of import related finance: ⌡ Finance against trust receipt (FATR) ⌡ Finance against imported merchandise (FIM) ⌡ Payment against documents (PAD) FATR: In this type of finance cash is involved between borrower and bank only. This type of loan is given on the basis of trust only. This type of finance is very risky, so the bank charges high interest rates. FATR finance is given to selective persons. The can put signee behind the bars without going to court after 180 days purchase good from exporter. FIM: Importer says that he has no money and wants to import goods. Bank then opens LC and pledge all the imported goods. After arrival of goods bank allows him to take away goods as he pays to the bank and charges mark-up to the remaining balance. It is like cash financing. PAD: If the importer does not pay with in 3 days of arrival of good then bank converts LC into funding facility and charges mark-up . 2). EXPORT RELATED FINANCE: There are two types of export finance. 54
  55. 55. INTERNSHIP REPORT 1. FAFB (finance against foreign bills) 2. FAPC (finance against packing credit ) 2a. Pre-shipment finance 2b. Post-shipment finance 1. FAFB: This is provided in case of usance LC. The exporter discounts usance LC with bank and bank after taking cushion (check) makes payment. 2. FAPC: This type of finance is given for the packing purpose. It can be before shipment for purchasing raw material and for packing of shipment and after shipment, for giving the salary of labours and payment of raw material. B. NON FUND BASED It is the commitment and does not involve hard cash. It is normally an obligation of the bank and in case of default of original borrower the bank stands responsible. In this type of facility bank asks the applicant for cash margin and for mortgage of property. Because even though no funds of bank involve but this facility is as risky as funded finance. But it is very lucrative for bank because no funds of bank are involved but bank charges and interest on the cash margin by head office generates revenues for bank. TYPES OF NON_FUNDED FINANCE: There are two types of non-funded finance. 1. Letter of credit (LC) 2. Letter of guarantee (LG) 1. Letter of credit: 55
  56. 56. INTERNSHIP REPORT There are two types of LCs: 56
  57. 57. INTERNSHIP REPORT ϕ Usance LC ϕ Sight LC Usance LC: It is the LC in which the time period is involved. Time period is 60, 120, 160, days. Bank makes the payment of LC when they received the documents, like transport receipt and invoice. Sight LC: It is the LC, opposite to usance LC, in which payment to the exporter is made on the sight of documents. LETTER OF GUARANTEE. Banks issue guarantees when contract is made between two parties. It requires no prime security and only collateral security is taken. The amount of guarantee to be given is calculated after valuation of assets of applicant, which he/she wants to give as collateral. 70% of total property is taken as FORCED SALE value of the assets and after taking 25 %security margin on forced sale value the guarantee is given for remaining value. Normally 25%cash margin is also taken for guarantee. This margin may vary according to the credibility of the applicant. No mark-up is charged but commission is taken. The rates for commissions are: * Up to 5million . 4% or minimum Rs 500. * 5m-10m . 3% * 10m-200m . 25% * over200m .2% * .125% is charged to Govt. and semi-Govt. Organizations This commission is charged quarterly. 57
  58. 58. INTERNSHIP REPORT TYPES OF GUARANTEE Most of the guarantees are given in case of contracts. Guarantees are allowed for the purchase of fertilizers and for travailing agencies to PIA. Following are the major type of guarantees: 1. BID BOND Banks give commitment for a bid. Normally 5 % contract amount is kept as bid security to qualify bid. Now bank gives guarantee to beneficiary on behalf of applicant for this amount. If bid is accepted then contractor asks the bank for ADP. 2. ADVANCE PAYMENT GUARANTEE (ADP) Bank gives this guarantee to beneficiary to provide the contractor the advance payment because he now has to start work. 3. PERFORMANCE BOND GUARANTEE That the contractor will perform the task assigned with in the specified period of time. 4. SHIPPING GUARANTEE This type of guarantee is very rare and given it at 100 % margin. “FOREIGN EXCHANGE” Foreign exchange is one of the important departments of ACBL. It deals with foreign currency and foreign exchange. In a foreign exchange department ACBL deals with Account opening, Withdrawal, deposits and remittance. ACCOUNT OPENING: There is two type of account opening in foreign exchange. 58
  59. 59. INTERNSHIP REPORT 1. Frozen or Old scheme accounts 2. Incremental or New scheme accounts. FROZEN OR OLD SCHEME ACCOUNTS: This type of accounts was frozen on 28, May 1998. In frozen accounts, account holders can withdrawal their amounts only in Pakistani currency. Account holder cannot withdrawal their amount in foreign currency. INCREMENTAL OR NEW SCHEMEM ACCOUNTS: A new scheme was introduced by SBP for foreign currency accounts. In this new foreign currency account, account holder is allowed to open an account in foreign currency. Deposit and its withdrawal both can be done in foreign currency. There will no restoration on foreign remittance. Deposits of foreign currency are easily transfers for investment purpose. State bank of Pakistan does not charge forward coverage fee on new scheme accounts. But the SBP charges forward coverage fee on the old account because Pakistani government holds deposit in these accounts. In the ACBL foreign currency account deposits are also reported in a local currency. Foreign currency deposits are also revalued at the end of each month. Revaluation rate is announced at the end of each month. TYPES OF SERVICES IN FOREIGN EXCHANGE: ACBL provides two types of services in foreign exchange. _ Trade Related services _ Travel Related services 59
  60. 60. INTERNSHIP REPORT TRADE RELATED SERVICES: ACBL provides two types of trade related services. 1. Export related 2. Import related  EXPORT RELATED TRADE SERVICES: Export means transfer of goods and services from the home country to another country. There are four methods of payment, that is used in a export trade services. ϕ Cash against documents collection (CAD) ϕ Foreign bill purchase ϕ Consignment sale basis ϕ Advance payment CASH AGAINST DOCUMENTS COLLECTION (CAD): In CAD there is no guarantee and liability of the bank. Bank of the exporter will send shipping document to the advising bank. Then the importer’s bank transfers the documents to the importer after the payment is received. After completing the assurance that payment has been received than the exporter’s bank makes the payment to the exporter. FOREIGN BILL PURCHASED: In this mode of purchase importer will send LC to the advising (importer) bank. After receiving the LC the advising bank will give it to the exporter. After the shipping of goods, exporter will hand-over shipping documents to negotiating bank and they will receive payment from the negotiating bank. 60
  61. 61. INTERNSHIP REPORT CONSIGNMENT SALE BASIS: In this mode of payment, payment is received within 120 days. Importer will receive the goods after paying the custom duty. The importer makes the payment when he receives the sale proceeds and after the attestation of the sale proceeds receipt from concerned embassy. Advance payment: Advance payment means payment of the goods before they are delivered to importer. In the advance payment inward remittances are transferred from the foreign bank to the exporters account.  IMPORT RELATED TRADE SERVICES: Import is receiving goods and services from the foreign country to home country. Four modes of payment are used for imports: 1. Cash against documents (CAD) 2. Deferred payment 3. Advance payment 4. LC documentary credit 1. CASH AGAINST DOCUMENTS (CAD): Bank of the exporter will send shipping document to the advising bank. Then the importer’s bank transfers the documents to the importer after the payment is received. After completing the assurance that payment has been received than the exporter’s bank makes the payment to the exporter. 2. DEFERRED PAYMENT: In this mode of payment, the important thing is the mutual concern of exporter and importer. In this case the seller shipping the good and the buyer makes the payment with a mutual understanding. 61
  62. 62. INTERNSHIP REPORT 3. ADVANCE PAYMENT: In this mode of payment the seller receives advance payment of his goods. The buyer can also take discount benefit for his advance payment. The seller takes the benefit through investing advance in the preparation of goods. 4. LC DOCUMENTARY CREDIT: LC means letter of credit. The opening bank on the behalf of the applicant writes letter of credit in the favor of beneficiary. This letter of credit is written for a specified amount against the submission of shipping documents. Applicant requests for the LC through bank, which is called LC opening, bank. In this case beneficiary is exporter and applicant is importer. Other parties of LC are:  Advising bank  Negotiating bank  Reimbursing bank ADVISING BANK: Advising bank is the bank of importer. Its duty is to transfer LC documents to the exporter bank. NEGOTIATING BANK: Negotiating bank is the bank of exporter country bank. It makes the payment to the exporter for his goods, which he exports to the importer. REIMBURSING BANK: Reimbursing bank is the foreign bank. This is a bank, which has the Nostro Accounts of the ACBL. The duty of this bank is to make the payment to the negotiating bank. 62
  63. 63. INTERNSHIP REPORT HR Philosophy: Askari Bank has a progressive and a dynamic human resource (HR) philosophy. The Bank believes in transforming its human capital into a key source of competitive advantage. The Bank believes that investment in human capital is critical for achieving and sustaining growth. Nature of Strategic Planning in Askari Bank Askari Bank is trying to achieve Business Level Competitive Strategy, which will help them in strengthening the business’s long-term competitive position in the market place. The Bank is using Human Resource as a strategic weapon, which will help them in achieving short term as well as long-term objectives. Importance of Human Resource Division of Askari Bank: - “Our staff is our most valuable asset” That’s why Staff is given on the job as well as site training in diverse areas of banking and management. Fifty two in house courses were organized during 2001 in Askari Bank for training the employees. 63
  64. 64. INTERNSHIP REPORT The HR manager says that we are committed to provide a healthy environment, culture, job satisfaction, opportunity and compensation that attracts and retains outstanding individuals. Askari Bank value a work place where: • People are promoted on their merit rather than on their tenure. • People treat each other with mutual respect and dignity. • People truly feel that no matter how large we grow, each one of us can make a difference. • No discrimination among the male and female employees. 64
  65. 65. INTERNSHIP REPORT HR Head’s Responsibilities; Human Resource Division of Askari Bank was successful in implementing: 1. Staff Hospitalization Plan; 2. Staff Transport Finance Scheme; 3. Medical Leave of Absence Facility; 4. Privilege Leave of Absence Encashment; 5. Enhancement in Staff House Finance Limit; 6. Insurance of House Finance; 7. Increment in Salaries Up to 15%; 8. Rationalization of Pay Scales; 9. Performance Appraisal System; 10. House Rent Facility. 65
  66. 66. INTERNSHIP REPORT JOB ANALYSIS AND DESIGN: Job Analysis. Provide information about jobs currently being done and the knowledge, skills, and abilities that individuals need to perform the job adequately Steps In Job Analysis. 1. Understand the purpose of job analysis. Managers do the job analysis and assign responsibilities according to the caliber and skill of the employee. 2. Understand the role of the job in the organization. 3. Benchmark positions. 4. Determine how to collect job analysis information Managers collect the information through Observation, technical conference. 5. Seek clarification. 6. Develop draft. 7. Review draft with supervisor JOB DISCRIPTION, JOB SPECIFICATION 66
  67. 67. INTERNSHIP REPORT Job Description. Service manager according to the skills capabilities personality communication skill confidence level has designed Job description. Job Specification. Statements indicating the minimal acceptable qualifications incumbents must possess to successfully perform the essential elements of their jobs. In which includes the knowledge, skills, education, experience, certification, and abilities need to do the job effectively. Askari Bank mainly focuses on the communication and confidence level of the candidate as skill can be updated. Recruitment is the process of searching for prospective employees and stimulating them to apply for jobs in the organization. Objective: Askari Bank believes that by bringing together our collective expertise, insight, and professionalism, we will grow individually and succeed collectively. 67
  68. 68. INTERNSHIP REPORT RECRUITMENT CRITERIA: if you want to work for us, and have the right capabilities and experience, our process will ensure that all candidates are provided with equal opportunities to secure a position. You are: • Entry level fresh Induction: At this level, fresh graduates are hired normally in officer cadre of the bank ranging from OG–III to OG–I. • Management Trainee Officers: A special batch of qualified, energetic, high caliber and qualified young with good academic records is also hired as Management Trainee Officers (MTOs) on annual basis with an aim to nurture high-talented lot of future executives/managers for the Bank. • Hiring of experienced professionals: At this level, experienced and skilled professionals are hired normally for Senior Slots. ROLE OF HRD IN RECRUITMENT PROCESS: HRD of Askari Bank is responsible for designing the selection system and managing its everyday operation. 68
  69. 69. INTERNSHIP REPORT RECRUITMENT SOURCES: Recruitment of employees, in general the sources of recruitment can be classified into two types. i) Internal Job Posting: Filling a job opening from within the firm has the advantages of stimulating preparation for possible transfer, or promotion and increasing the general level of morale. ii) External Job Posting: Askari Bank also goes to external sources for positions whose specification cannot beam by present personnel. Askari Bank uses following outside sources. • Advertising: • Employment Agencies: • Casual Applications: • Leasing: 69
  70. 70. INTERNSHIP REPORT THE HIRING PROCEDURE FOR NEW/FRESH EMPLOYEES. RECRUITMENT PROCESS (FRESH/ BATCH PROGRAMS): SELECTION Our selection processes differ from position-to-position, and are designed to effectively match an individual’s knowledge, skills, interests, and experiences to those needed for a particular position. 70
  71. 71. INTERNSHIP REPORT THE HIRING PROCESS: In the hiring procedure, Askari Bank is following steps to discover significant information about an applicant. 1) Call for application 2) Preliminary interview 3) Applications blank 4) Check of References 5) Psychological lest 6) Employment interview 7) Approval by the supervisor 8) Physical examinations 9) Induction or orientation ASKARI BANK INTERVIEW ASSESSMENT FORM Job Title: ___________ Trade: _____________ Department: ___________ Name: ___________ Age/DOB ______________App. Source: ___________ Place of Domicile: ___________ Available to joining No: _____________________ Expected Salary Rs: ____________________________ 71
  72. 72. INTERNSHIP REPORT Name of the Interview: 1. (HRD Executive) 2. (Concerned Executive) 3. Supporting Executive) (1) (2) a) Appearance ABC a) Assignment Knowledge ABC a)Potential ABC b) Health ABC b)Experience Rating ABC b) Behaviour ABC c) Education ABC c) Professionalism ABC c) Observation ABC d) Experience ABC d) Verbal/Written Expression ABC e) Skill ABC f) Confidence ABC g) Intelligence ABC Rating ABC Final Rating: Merit Rating: 1. Excellent: ________________ 2. Good: ________________ 3. Average: ________________ 72
  73. 73. INTERNSHIP REPORT 4. Below Average: ________________ General Remarks: _____________ _____________ _____________ HRD Executive Concerned Executive Supporting Executive ORIENTATION AND PLACEMENT Once employees are "on board" their personal growth and development overtime become a major concern. Change is a fact of an organizational life and to cope it effectively. OBJECTIVES: The following are the objectives of orientation program of Askari Bank: 1) To make the employees comfortable 2) To get along with the workers 3) To learn them new culture of the organization ORIENTATION OF NEW EMPLOYEES 73
  74. 74. INTERNSHIP REPORT After the selection of successful employees the first step in their introduction to bank policies, practices and benefits is an orientation program. The Orientation program in Askari Bank is completed in three phases. FIRST PHASE: The first phase is usually conducted by the staff personnel unit. Subjects covered include products of the bank, employee benefits, salary schedules, safety, probationary period, timed recording and absence, holidays equal employment opportunity programs, packing and the grievance procedure. SECOND PHASE: The second phase of most organized induction program is performed by the immediate supervisor. The inductee is introduced to fellow employees, given a tour of the department, and informed about such details as locker and rest rooms, supply procedures, hours of work overtime, call in procedures, rest and lunch periods, and lunching facilities. THIRD PHASE: The complete in action program will provide for phase three follow up some week later. The interview, conducted by either the supervisor or a personnel specialist is concerned with 1) Employee satisfaction with the job and organization. 2) Supervisor satisfaction with the employees. PLACEMENT: In Askari Bank Placement means “Right person for a right job” A lot of applicants’ abilities are matched with a specific job requirement and then that person is placed on that position. 74
  75. 75. INTERNSHIP REPORT TRAINING AND DEVELOPMENT After the employee has been received, selected and inducted, he or she must next be developed to better fit the job and the organization. INVESTMENT IN THEIR ASSETS: Askari Bank is a multinational organization in which importance has been given to training. The management considers the training as an "Investment in their Asset". OBJECTIVE: The objectives of training and development programs are to enhance and improve the capabilities, efficiency, and productivity of an employee up to the desired standards for current and future assignments and responsibilities. We have our own specialized in-house training facilities in the shape of Training Academies at Rawalpindi and Lahore. AREAS OF TRAINNING: 75
  76. 76. INTERNSHIP REPORT The Training Academies of the Bank are equipped with modern state of the art facilities and are responsible for imparting multi-functional high quality trainings to all staff members in the following areas: s The employees of Askari Bank are also sent to attend specialized courses by various banking /non-banking training institutes. TRAINING NEEDS ASSESSMENTS: In Askari Bank there are three level of analysis for determining the needs training can fulfill. 1. Organization analysis: Focuses on identifying where within the organization training is needed. 2. Operation analysis: 76 •Business Development » Customer Service » Liabilities Management » Asset Development » Consumer Finance •Commercial Banking » General Banking » Foreign Trade » Credit Management •Credit Administration •Risk Management •Consumer Banking •Soft Skills » Effective Communication Skills » Negotiation Skills » Team Building » Selling Skill » Customer Care etc.
  77. 77. INTERNSHIP REPORT Attempts to identify the content of training - what an employee must do to perform competently. 3. Individual Analysis: Determines how well each employee is performing the tasks that make up his or her job. At this level, training needs may be defined in terms of a simple equation. Desired performance - Actual Performance = Training need. OPERATIVE TRAINING: The development of operative calls for specific increased in skills and knowledge to perform a particular job. In Askari Bank there is primarily two basic methods in use. 1) On The Job Training: Since most jobs in Askari Bank can be learned in a relatively short period of time, this method is most widely used. The type of on the job training implemented in Askari Bank is: Apprenticeship program which include both classroom instructions as well as on the job training. This type of training is given to the new inductees and usually two years long. 2) Off the Job Training: 77
  78. 78. INTERNSHIP REPORT There are following methods used in Askari Bank for Off the Job training. i) Staff Training Program: ii) Special Courses: iii) Selling and Technical skills training program: iv) Opportunities For Improvement Of Educational And Technical Qualification: EVALUATING TRAINING PROGRAMS: To assess the utility or value of training, in Askari Bank management seek ensures to four questions. 1. Did change occur? 2. Is the change due to training? 3. Is the change positively related to the achievement of organizational goals? 4. Will similar change occur with new participants in the same training programs? MEASURES OF CHANGE: In evaluating training programs, measures of change fall into four categories. Reaction: How do participants feel about the training program? Learning: To what extent have trainees learned what was taught? Behavior: What on the job changes in behavior occur because of attendance at the training program? Results: Is what extent have cost related behavior outcomes or quality improvement, turn over or accident reduction (productivity) resulted from the training. 78
  79. 79. INTERNSHIP REPORT DEVELOPMENT: We also focus on providing opportunities and facilitating our executives and officers for developing their managerial and leadership skills through management development programs for present and future responsibilities. PERFORMANCE APPRAISEL Definition: It is a formal process and structured process through which management measures, evaluates and assesses job related attitudes behavior and out comes. Importance of performance appraisal in Askari Bank: • It identifies employees current job i.e. what is he doing? • It will help in identifying in weak and strength points. • It will help an employee to improve his or her performance. • Organization compensation and rewards are all based on performance appraisal. • It motivates the individual to face constructive criticism when there is negative performance appraisal. • It also helps in assessing in training and development needs. • It helps in documenting the HR policies. • It helps in decision making of retention and termination. • It is important for promotion, transfer and termination. Method used in Askari Bank for performance appraisal: A special document is used for performance appraisal in Askari Bank, which is known as GDD (grade development document) Following are the main things, which are included in document. 79
  80. 80. INTERNSHIP REPORT • Assignments • Job duties • Achievements • Audit objectives • Complaints These things are discussed in document with regard to performance of employee. Performance appraisal is done on annually basis. Some other methods of performance appraisal normally used in Askari Bank: • Written essay: Here you write the employee weak and strong points, future potential and past achievement and area for improvement. • Critical incident method: Here the appraisal based on those factors which are very effective and the events where your performance was efficient Problems with the appraisal: There is no specific problem is faced in performance appraisal 80
  81. 81. INTERNSHIP REPORT JOB EVALUTON Definition: It is a process by which the relative worth of various jobs is determined for pay purpose. It checks the out the amount of employee’s pay or salary to the contribution made by this job. The job is evaluated according to its importance. JOB EVALUATION: The process of job evaluation involves assessing the relative dollar-worth of each job to the organization to set up internally equitable pay structures. If pay structures are not equitable, employees will be dissatisfied and quite, or they will not see the benefits of striving for promotions. To put dollar values on jobs, it is necessary to get information about different jobs to determine which jobs deserve higher pay than others. Job Evaluation. Askari Bank do job evaluations with the help of • Manager Analysis • Mystery shopping • Quizzes/Snaps • Exit interviews • Curiously calls 81
  82. 82. INTERNSHIP REPORT • Training • Attitude • Relations with Customer and Employee • Targets Specifies the relative value of each job in the organization. HEALTH, SAFETY & WELFARE SAFETY AWARENESS: The employees are given a physical environment that is comfortable and healthy. In summer there is adequate air-conditioning and in winter there is central heating. Since Askari Bank is handling with services and there is no potential danger in the nature of its business, hence the only thing that the HR management needs to ensure a healthy environment. HEALTH AND SAFETY: A monthly health and safety meeting held at Askari Bank. Chief Manager presides this meeting and discuss any accident if happen in preceding month. Measures in future to avoid these types of accidents. Working hours = 48 hours per week. Sick leave = 8 days Casual leave = 10 days 82
  83. 83. INTERNSHIP REPORT FEATURES OF COMPENSATION SYSTEM AND SOCIAL SERVICES: * Fixed salary * Overtime is paid according to Government rules and regulations i.e. double on holidays. * Group Insurance scheme is practiced for the compensation of two objectives: i) Accidents ii) Injuries * Employees old age benefit scheme. * Gratuity scheme. * Bonus is awarded (Minimum one bonus in a year) * Monthly Medical Allowance * Social Security services are obtained for employees. HEALTH SERVICES: Following are included in the health services of Askari Bank: • Adequate facilities for emergency • Pre-employment medical examinations • Reasonable first aid to employees for non-occupational illness while on the job. • Information and education services for the personal health of employees • Advice and supervision, where necessary, to maintain proper company sanitation. 83
  84. 84. INTERNSHIP REPORT COLLECTIVE BARGAINING It is a process to determine the terms and conditions of employment and regulating employment relationship, which utilizes the process of negotiation between representative of management and employees intending to result in an agreement, which may be applied across the group of employees. Terms of Employment: - The following are four categories of employment in Askari Bank Limited; 1. Regular Employment; 2. Probationer Employment; 3. Contractual Employment; 4. Temporary Employment; and 5. Casual Employment. Regular Employment: - These are the employees, which are after the final selection employed for a regular period. These employees enjoy all the benefits such as annual gratuity fund, Retirement benefit and after the retirement, pension etc. Usually managers and supervisors fall in this category. Probationer Employment: - When an employee is selected for some post, he or she undergo for the probation period of 6 months normally. However for the management cadre, it can be less than 6 months. When the probation period is completed, the employee signs a contract with 84
  85. 85. INTERNSHIP REPORT personnel manager. Contractual Terms: - There are three major considerations;  Employment is temporary in nature.  The person should be of age 60 or above.  Duration of employment contract is one year and renewable. When the bank management feels that the person retiring from the job have enough capabilities and potential to work more in the benefit of the organization, then sign this type of agreement with the retired employee. Employee form the top to bottom can be included in this type of employment terms. Temporary Workers: - Employees of cadre of workers and supervisors are hired for a period of 6-9 months according to government rules on temporary terms of employment. Casual Workers: - It is concerned with the daily wages workers. When the company requires the workers urgently, they employ the casual worker to fill the vacancies. Apprenticeship Training: - According to government regulation, Banks have to hire the apprentices against the regular scheme. Askari Bank is not bound to give regular jobs to the apprentice trainees. 85
  86. 86. INTERNSHIP REPORT GRIEVANCES DEFINITION: Grievance is any dissatisfaction or feeling of injustice in connection with one’s employment situation that is brought to the attention of management. HANDLING CONFLICT SITUATION: Obvious sources of conflict range from a difference of opinion, problematic working conditions or unrealistic work expectations through discriminatory behavior, to poor communication or non-compliance with organization norms or values. Conflict can be covert and take the form of resentment or irritation. Such conflict is much harder to detect and easier to ignore. ADVANTAGES OF MANAGING CONFLICTS: Advantages of managing conflict situations for the Askari Bank management are: • Better motivated staff; staff energies are directed to work rather than emotions • An organization or staff that presents a positive name to the outside world • Improved team work • Better personal development of individuals DIFFERENT TYPES OF DISPUTES IN ORGANIZATION: There are some signs of disaffection with organization such as strikes, confrontation leading to lockouts and various forms of withdrawal of cooperation by staff in furthermore of their claims. And other conflicts such as poor training, turnover, and 86
  87. 87. INTERNSHIP REPORT absenteeism. To solve all disputes Askari Bank, management take action which are very right and then all the employees are happy ad are more committed to their work. ROLE OF HRD IN SOLVING PROBLEMS: HRD performs following chief roles. • Supportive behavior on manager's part. • A work group problem solving. • To design job techniques in such a way that gives satisfaction for individual and opportunity for improving performance. • Letting everyone to have his or her say. DISCIPLINE DEFINATION: Discipline is condition where employees know that what is expected from them and what will be the consequences of violation. Purpose of discipline in Askari Bank: Following are the main purposes of discipline in Askari Bank: • To enforce rules and regulations • Smooth running of organization. 87
  88. 88. INTERNSHIP REPORT • To ensure efficiency of workers. • To improve work relations. CAREER DEVELOPMENT Askari Bank values performances. We have introduced an objective system of performance evaluation based on Management by Objectives and Behavioral Competencies. The system allows for mid-year reviews and is 100% open to appraisees. CAREER PLANNING: It entails matching an individual’s skills and aspirations with opportunities that are or may become available in the organization. This matching process requires that those in charge of career planning know the skill requirements of the various jobs. This allows them to guide individuals into jobs in which they will succeed and be satisfied. CAREER DEVELOPMENT IN ASKARI BANK: Askari Bank Limited is one of the most progressive institutions in the country today. - Currently, Askari Bank is pursuing an ambitious expansion strategy, which envisions opening a large number of branches throughout the country. Askari Bank, besides being the most rapidly expanding Bank in the market, is also the choice of many career-focused individuals since it offers some of the following benefits: 88
  89. 89. INTERNSHIP REPORT • Stability of Career • Tremendous Growth Opportunities • Extensive Training & Development Program • Motivating Work Environment • Attractive Salary Packages • Nurturing Culture MANPOWER PLANNING Askari Bank has a progressive and a dynamic human resource (HR) philosophy. The Bank believes in transforming its human capital into a key source of competitive advantage for that they believe in human resource planning. BASIC PURPOSE: In Askari Bank basic purpose for which HRD in relation to HRP serves are as under: 1. Balancing the cost between utilization of plant & manpower: This theme involves comparing costs of these two resources in different combinations and selecting the optimum. 89
  90. 90. INTERNSHIP REPORT 2. Determining recruitment needs: It is an essential prerequisite to the process of recruitment. It means that HRD unexpected shortages, wastage, blockages of unexpected shortages, wastage, blockages in promotion flow and needless redundancies. 3. Determining training needs: HRD plans fundamental training programmes for which it is necessary to assess not only quantity but also quality in terms of the skills required by Askari Bank. 4. Management Development: HRD provides succession of trained and experienced manager that is essential to the effectiveness of the organization and this depends on accurate information about present and future requirements in all management level in Askari Bank. A system of HRP in Askari Bank: A system of HRP in Askari Bank has some specific points on which Banking Act. 1. Defining or redefining organizational objectives. 2. Determining and implementing the basic requirement to sound planning. 3. Assessing future requirements to meet objectives. 4. Assessing current resources and availability of resources in the future. 5. Monitoring system and amending as indicated. REASONS FOR HUMAN RESOURCE PLANNING Following are specific reasons for which Askari Bank management is carrying on systematic human resource planning. 1) Future Personnel Needs: 2) Coping with Change: 3) High-Talent Personnel: 4) Strategic Planning: 5) Equal Employment Opportunity: 90
  91. 91. INTERNSHIP REPORT 6) Foundation for Personnel Functions: THE PLANNING PROCESS: Planning for human resources is tied in with overall Askari Bank long range planning. The process of planning in itself forces management to think through objectives of firm and people problem relating to achieving those objectives through planning. 1) GOALS AND PLANS OF ORGANIZATION: Human resource planning is a part of overall strategic planning for Askari Bank. A personnel vice-president and his staff cannot make useful plans for period of one or three or five years, unless they have data on possible corporate expansions new products, new plants, new markets and so on. IMPORTANT STEPS: Important steps involved in overall planning for Askari Bank are: 1. To analyze and evaluate environmental influence. a) Political trends and legislation which will have impact upon the business. b) Social trends in leisure time, consumer tastes, work values and retirement. c) Technological advances affecting enterprise. 2. To identify the values and aspirations of Askari Bank's directors and executive. 3. To identify and evaluate the internal strengths and weaknesses of the enterprise. 4. To create specific enterprise objectives and plans for achieving these objectives. 5. To evaluate progress toward implementation of plans and take corrective action where necessary. PLANNING PERIOD: Askari Bank's planning period is from 3 years to 5 years. Period for three year is short range and of five years is long-range period. 91
  92. 92. INTERNSHIP REPORT 2) CURRENT HUMAN RESOURCE SITUATION: The second phase of the planning process for Askari Bank is the preparation of an inventory of personnel presently within the organization. A skill inventory consists of up-to date information regarding the qualifications of the selected categories of personnel. IMPORTANT USES OF SKILL INVENTORY: The skills inventory has several important uses. 1) After preparing human resource forecast, Askari Bank compare, the number, types and skills specified by forecast with the present baseline or current position given by skill inventories to ascertain what skills must be developed from present personnel via training, up grading and special development efforts. 2. Other use is to identify talent within the organization for specific job opening. 3. An up to date skill inventory is valuable for the preparation of rosters of qualified technical and managerial personnel. COMPUTERIZED SYSTEM: Askari Bank along with manually prepared Human Resource Data cards also use computerized system to handle data. The computer can readily provide a printout of the age distribution of all mangers by level, job, and department. 92
  93. 93. INTERNSHIP REPORT TRANSFERS, PROMOTIONS AND SEPARATION TRANSFERS: The Headquarters of all employees as mentioned in the letter of appointment is subject to change at the discretion of the Management in which event an employee will be required to work anywhere in Pakistan as Headquarters with no extra remuneration and /or allowance or compensation whatsoever in the salary structure. In case of a transfer, an employee will be entitled to the following transfer benefits: I) Air-conditioned Coach train fare or air passage as per entitlement for himself and his immediate family to the place of transfer will be provided. II) 14 days upcountry allowance (Boarding & Lodging allowance) as per entitlement in the traveling scheme will be provided. For single employees, reimbursement is at a flat rate. The amount allowed will be specified in the transfer letter served by the Management. In cases where the Management has initiated the move, it can at its discretion, allow a higher ceiling/additional benefits. Transfers are also being done within the city and outside the city. The purpose is to provide employees a better chance to excel in their area at different locations and in different bank branches. Job rotation is also being done. Traveling and transfer allowances are also given so that employees get settled as soon as they join the duty. 93
  94. 94. INTERNSHIP REPORT Promotion: - Promotions are an integral part of the job. Every employee is looking forward towards its career path. In Askari Bank the promotions are given on the basis of superior performances. The promotion occurs both in the ranks and in the salary structure. SEPARATION OF SERVICE: a) An employee's service can be terminated on three months notice in case of a manager or level above that and one month's notice in case of a junior Officer, Senior Officer and Assistant Manager or pay in lieu thereof b) If in the course of an employee's service, the employee suffers from any serious ailment or permanent disability of any kind which in the opinion of the management may or is likely to interfere with the due performance of duties, the employee's service may be terminated at the discretion of the management by giving notice as mentioned above, or payment in lieu thereof as the bank may deem fit. SALARY AND INCENTIVES Salary: - Askari Bank tries it best to keep the staff fully satisfied and provide them with perfect career paths. The employees are paid well so that they can maintain reasonably decent living and are motivated to work as bank’s employees. The employee compensation at Askari Bank caters both 94
  95. 95. INTERNSHIP REPORT “Direct financial payments” “ Indirect financial payments”. The pay scale is determined on the commendable factors and on the decision-making ability for the managers and executives. Allowances: Which are given to employees other than the basic pay, are as follows:  House Rent Allowance.  Utilities Allowance  Technical allowance.  Traveling Allowance and Daily allowance. Fringe Benefits: - In Askari Bank, following benefits are offered to the employees.  Medical Facility.  Facilities at residence.  Grants of incentives for improving qualification every year.  Cash prizes.  Increments (Annual increase in pay)  Bonuses. Indirect Compensations: - Askari Bank offers three types of indirect compensation to its workers.  Employee insurance scheme  Providing funds  Gratuity scheme. department shall initiate the case to P & A. Pay Plans and Incentives at Askari: - Establishing Pay Rates: - 95
  96. 96. INTERNSHIP REPORT For establishing the pay rates, first step is to conduct the salary surveys. The Salary Surveys: - For the purpose of conducting salary survey, Askari Bank is taking help of The Ferguson firm, which conducts surveys and researches in the field of marketing and finance. Moreover, the bank’s managers are well informed about the pay and salary structure for the candidates to be hired in case of hiring. This external survey is conducted once in two years. Complete documented information is being delivered to the bank so that the pay scales do not vary from the market rates. Job Evaluation: - Evaluation of the job performance is done yearly. The purpose is to see and identify the employees who have done their respective work well through out the year considered and who have not been able to show good performances. . Pay Plan at Askari: - Pay plans at Askari are established on the basis of job rating. All jobs are ranked from top to bottom, on the basis of commendable factors. Employee with higher rank gets higher salaries and incentives. Askari Bank has its own criteria for establishing pay rates. . HR manager believes that competency and skill based pay can increase motivation and employee commitment. But more often employees are paid on the basis of their jobs. Their pay is based on job or skills. Skill Based Pay: - Skill based pay is given to employees for the recognition of their knowledge, decision making, problem solving abilities and competency of efficient and effective working in their jobs. Variable Pay: - 96
  97. 97. INTERNSHIP REPORT Variable pay is a group incentive plan that ties pay to some measure of an organization’s overall profitability. When the bank performs or the branch of the bank 97

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