HBL Internship Report on Banking Operations and Services

Internship Report 1 Habib Bank Limited
ACKNOWLEDGEMENT
No one can say that I am perfect, everyone should admit that without the help
of ALLAH and His people a man can’t get anything so I bow my head before
almighty Allah with gratitude. I am also very much thankful and presents salute to
many individuals who have helped me in shaping this report .I am also very much
thankful to lot of class fellows and contemporary colleagues. I am especially grateful
to Ms. Abeerah who took the time and trouble during the last few days to speak to
me about the way this text could be further improved.
I am also very thankful to the staff Habib Bank Ltd. Jinnah chowk
branch who provided me an opportunity to work in friendly environment.

Table of Contents
Description Page No.
Executive Summary 3
Commercial Banking in Pakistan 4
History of Banking in Pakistan 5
About HBL Pakistan 8
History and Background 8
Privatization 9
HBL’s Mission, Vision and values 9
Board of Directors 10
Management 11
Corporate information 13
SWOT Analysis 15
Operations of HBL & Banking departments 18
A .Account opening department 18
B .Cash department 20
C .Credit department 21
D. Bill clearing department 23
E. Foreign exchange department 24
Products and services of HBL 27
Deposit accounts 28
HBL car loan 29
HBL credit card & Debit card 32
HBL personal loan & Phone banking 34
HBL Banc assurance 35
HBL Corporate banking & Commercial banking 37
HBL zarai banking 39
HBL Islamic banking 40
Learnings as an employee 42
Financial Performance of HBL in 2014 46
Ratio analysis of HBL 48
Award and Financial performance in 2014 52
Recommendations 54
Discussing a credit dept. problem 55
Glossary, Bibliography 56

executive summary
Every student of Master in commerce has an essential requirement to do Six
to Eight weeks job in any of the well reputed organization. The purpose of this
program is to acquaint the students with practical applications of theoretical concepts
taught to them during conduct of their m.com program. Report starts with the topic
evolution of banking. HBL was the first commercial bank to be established in
Pakistan in 1947. Over the years, HBL has grown its branch network and become
the largest private sector bank with over 1,450 branches across the country and a
customer base exceeding five million relationships.
On December 29, 2003 Pakistan's Privatization Commission announced that
the Government of Pakistan had formally granted the Aga Khan Fund for Economic
Development (AKFED) rights to 51% of the shareholding in HBL, against an
investment of PKR 22.409 billion (USD 389 million). This report contains information
about HBL’s board of directors, management, mission, vision and values. HBL’s
operations are discussed in light of its working department in the branches like cash,
clearing, foreign exchange and accounts department and also in light of its services
and products which it is offering to customers’ weather they are individual, business,
corporate or agriculture field related customers. HBL is currently offering phone
banking, internet banking and various cash management services for the facilitation
of its customers. HBL’s car to car loan has its own uniqueness in Pakistan’s banking
sector. HBL’s branch network is extended all over the Pakistan which has its
competitive edge over all other private sector banks in Pakistan.
.

COMMERCIAL BANKING IN
PAKISTAN
The word 'Bank' is said to have been derived from the words Bancus or
Banque or Bank. This history of banking is traced to as early as 2000 B.C. The
priests in Greece used to keep money and valuables of the people in temples. These
priests thus acted as financial agents. The origin of banking is also traced to early
goldsmiths.It was very difficult for Pakistan to build up its own Banking system
immediately after independence without sufficient resources. Following the
announcement of the partition plan in June 1947 there was a haste movement on the
parts of banks to transfer their funds and accounts across the borders. The banks
having their registered offices in Pakistan were transferred to India. In an effort to
bring about the collapse of the new state by the persecuting an international policy of
withdrawal, the Indian bank offices closed quickly. Those banks, which stayed, were
considering the winding up of their business. By 30th June 1948 the number of
schedule banks in Pakistan declined from mere scratch.
Today there are more than 7000 branches of commercial banks along with an
established network of supplementary financial institutions. All this development in
the banking sector is the result of untiring efforts of four decades.
History of Banking In Pakistan
The interesting point which I observed during the span of mine job was the
historical background of Banking & Financial sector which is the one in which great
improvement and growth is observed since the formation of Pakistan. For studying
the growth of this sector we can divide it into three stages, which are as follows:
a) Pre-Nationalization Era
b) Nationalization Era
c) Post Nationalization Era
a) Pre Nationalization period:
There were only two Muslim banks in Indo Pak before partition; they were
.Habib Bank Ltd. (est. in 1941 at Bombay) & Australia Bank Ltd. (est. In 1944 at
Lahore). All other banks, at that time, were either owned by Hindus or Foreigners.
At the time of partition there were 631 bank branches in area which came
under Pakistani control. But due to blood shed and violence at large scale, mostly
branches were closed and the disparity can be assessed from the fact that on July
1948 there were 195 branches with deposits of Rs.88 crore (880 million) only. Also a
factor lagging in Pakistani industry was a central bank of its own, by that time
Reserve Bank of India was acting as central bank for both countries and same
currency notes were used in both territories. But Reserve Bank of India was biased
and Set down Pakistan on many occasions such as the issue of funds transfer etc.
In this period drastic steps were taken in government sector for the
improvement of overall position. The private sector also responded to these changes
and some very positive changes were observed. Some of the steps taken by the

government in this regard were as under:
1) Inauguration of State Bank of Pakistan (SBP) on 1st July, 1948.
2) Setting up of National Bank of Pakistan in November, 1949 to control the
'jute' export in East Pakistan and to act as agent of SBP.
3) Larger powers were given to SBP through SBP Act (1956) for controlling
purposes.
4) Banking Companies Ordinance 1962 for protection and guidance to banks.
5) Establishment of specialized banks, such as ADBP (1952);
a) HBFC (Nov, 1952);
b) P1CIC (Oct, 1957)
c) IDBP (Aug. 1961);
d) NDFC (Jan, 1973).
These were the steps, which built a strong banking sector in Pakistan. This is
also obvious from the facts that by 1973 there were almost 10 foreign banks were
working in Pakistan and all over deposit position was around Rs.2300 crore (23,000
million). A bird eye view of 5 top banks was as given below:
B) NATIONALIZATION PERIOD
On January 01, 1974 all Pakistani banks were nationalized through
Nationalization Act 1974. Under this law all Pakistani banks became a public
property. All small banks were merged in bigger banks to create 5 major Pakistani
banks Pakistani banks. These banks were to control by Pakistan Banking Council.
There are still controversies about this act of government as whether it contributed in
success of failure of banks. However the major changes after nationalization were as
follows:
 Working of banks was extended to under developed areas.
 Market expansion for credit and deposits.
 Decrease in service level of bank officers.
 Decrease in profitability as well.
However the effect of expansion was enormous and it can also be depicted
with the help of table 2 which shows the deposit & branch positions of different
nationalized banks.

BANK POSITION IN 1992
Bank No. of Branches Deposits (Rs. In Millions)
HBL 1926 153,431
NBP 1448 128,679
UBL 1684 87,482
MCB 1288 50,013
ABL 750 33,757
TOTAL 7096 453,362
C) POST NATIONALIZATION ERA
In 1990 the government decided to denationalize all the nationalized
institutes. Some was also suggested in banking sector. For this purpose,
amendments were made to Nationalization Act 1974 and two nationalized banks
were privatized. Along with this a permission to open banks in private sector was
also granted. The rules regarding establishment of new banks and for incoming
foreign banks were also relaxed.
The- privatized banks are;
a) MCB taken up by a private group in April, 1991
b) ABL taken up by its own employees in September, 1991.
c) UBL taken up by UAE party in 2002.
d) December 29, 2003 HBL was taken by AKFED
After these changes a large number of private and foreign banks started their
operations in Pakistan and the present status can be seen from the following figure:

Structure of Financial Sector in Pakistan
Scheduled Banks
(47)
- Commercial banks
- Specialised banks
NBFIs
- Modarabas
- Leasing companies
- Mutual funds
- Specialised financial (DFIs)
- Investment banks
- Housing Finance Companies
Specialised Banks Commercial Banks
Foreign Banks
(22)
Domestic Banks
(25)
About Habib Bank Limited
HBL was the first commercial bank to be established in Pakistan in 1947. Over the
years, HBL has grown its branch network and become the largest private sector
bank with over 1,450 branches across the country and a customer base exceeding
five million relationships. With a presence in 25 countries, subsidiaries in Hong Kong
and the UK, affiliates in Nepal, Nigeria, Kenya and Kyrgyztan and representative
offices in Iran and China, HBL is also the largest domestic multinational. The Bank is
expanding its presence in principal international markets including the UK, UAE,
South and Central Asia, Africa and the Far East. Key areas of operations encompass
product offerings and services in Retail Banking. HBL has the largest Corporate
Banking portfolio in Pakistan with an active Investment Banking arm. SME and
Agriculture lending programmes and banking services are offered in urban and rural
centers. In the UK and GCC, HBL focuses on trade finance and remittances for the
South Asian Diaspora in addition to basic banking facilities. HBL has always been a
bank and a brand for the masses, with a history that is inextricably linked with the
history of Pakistan itself. As it continues to grow, both locally and abroad, it strives to
embody its brand personality: honest, approachable, and inclusive. HBL is currently

rated AA+ (Long term) and A1+ (Short term)*. It is the first Pakistani bank to raise
Tier II Capital from external sources.
HISTORY AND BACKGROUNG
Habib Bank Limited was established by Mr. Ismail Habib (Late) on August 25,
1942 at Bombay. It was the first Muslim Bank of the sub-continent. It was
established with a paid up capital of Rs. 2.5 million. At an early stage, the number of
its branches was only 12.
HBL established operations in Pakistan in 1947 and moved its head office to
Karachi. Our first international branch was established in Colombo, Sri Lanka in
1951 and Habib Bank Plaza was built in 1972 to commemorate the bank’s 25th
Anniversary. With a domestic market share of over 40%, HBL was nationalized in
1974 and it continued to dominate the commercial banking sector with a major
market share in inward foreign remittances (55%) and loans to small industries,
traders and farmers. International operations were expanded to include the USA,
Singapore, Oman, Belgium, Seychelles and Maldives and the Netherlands.

Privatization of Habib bank
On December 29, 2003 Pakistan's Privatization Commission announced that
the Government of Pakistan had formally granted the Aga Khan Fund for Economic
Development (AKFED) rights to 51% of the shareholding in HBL, against an
investment of PKR 22.409 billion (USD 389 million). On February 26, 2004,
management control was handed over to AKFED. The Board of Directors was
reconstituted to have four AKFED nominees, including the Chairman and the
President/CEO and three Government of Pakistan nominees.

HBL’s Vision, Mission and
Values
Vision
Enabling people to advance with confidence and success.
Mission
To make our customers prosper, our staff excel and create value for shareholders.
Values
Our values are the fundamental principles that define our culture and are brought to
life in our attitude and behaviors. It is these values that make us unique and
unmistakable. Our values are defined below:
Excellence
This is at the core of everything we do. The markets in which we operate are
becoming increasingly competitive, giving our customers an abundance of choice.
Only through being the very best – in terms of the service we offer, our products and
premises - can we hope to be successful and grow.
Integrity
We are the leading bank in Pakistan and our success depends upon trust. Our
customers - and society in general – expect us to possess and steadfastly adhere to
high moral principles and professional standards.
Customer Focus
We understand fully the needs of our customers and adapt our products and
services to meet these. We always strive to put the satisfaction of our customers
first.
Meritocracy
We believe in giving opportunities and advantages to our employees on the basis of
their ability. We believe in rewarding achievement and in providing first-class career
opportunities for all.
Progressiveness
We believe in the advancement of society through the adoption of enlightened
working practices, innovative new products and processes and a spirit of enterprise.

Board of Directors
NAME DESIGNATION
Sultan Ali Allana CHAIRMAN
R. Zakir Mahmood PRESIDENT & C.E.O
Mushtaq Malik DIRECTOR
Ahmed Jawad DIRECTOR
Yasin Malik DIRECTOR
Moez Jamal DIRECTOR

Management Hierarchy
DESIGNATIONS
1. PresidentSenior,2. Executive Vice President,3. (SEVP)Senior
4. Vice President, 5.(SVP)Vice President,6.(VP)Assistant Vice
President,7.(AVP)Officers,8.Grade1,9. Officer Grade II,10.Officer
Grade III,11.Cashier,12.Clerks
Chairman
President
Board of
Directors
SEVP
International
Operations
SEVP Corporate
Banking & Treasury
SEVP Retail
Banking &
Information
Technology
SEVP Finance, Audit
& Administration
SEVP Asset Remedial
Management
SEVP Credit Policy
SEVP Corporate Banking,
financial institute & Project
Finance

Corporate Information
Head Office
HBL Plaza
I. I. Chundrigar Road
Karachi-75650, Pakistan.
Tel : +92 (21) 2418000 [50 lines]
Fax : +92 (21) 9217511
Registered Office
4th Floor, Habib Bank Tower
Jinnah Avenue
Islamabad, Pakistan.
Tel: +92 (51) 2872203
Fax: +92 (51) 2872205
Registrars
THK Associates (Pvt.) Ltd.
Ground Floor, State Life Bldg No. 3
Dr. Ziauddin Ahmed Road
Karachi, Pakistan.
Tel: +92 (21) 111-000-322
Websites
Corporate website:
www.hbl.com
Treasury website:
www.hblgtr.com.pk
Ebank (internet banking):
www.hblebank.com

Auditors
KPMG Taseer Hadi & Co.
Chartered Accountant
Swot analysis
Strengths
Strength can be defined as an area where a company is best at doing
something or a feature that puts the company at an advantage in comparison to its
competitors. HBL enjoys the following strengths:
 HABIB BANK is a well established bank enjoying long history of over 65 years
of experience and profitable operation.
 HBL is the largest private bank in Pakistan now and people trust is very high.
 It has the largest branch network among private banks of Pakistan.
 HBL has been very effective in controlling costs as it successfully restructured
itself after its privatization. During this process more than 1,600 employees
were relieved under a golden handshake scheme and 110 branches were
closed.
 Excellent branches appearance gives an edge to HBL over other banks. HBL
has the ability to bring innovative products and services like personalized
service, electronic funds Transfer, sophisticated financial products such as
electronic banking, auto-teller machines and evening banking.
 The Bank’s Rupee Traveler Cheques have been market leaders for the past
six years.
 HBL’s car to car financing scheme is unique in auto loan segment.
 Habib bank is an internationally recognized name in banking services and
products.
 HBL has forged strategic alliances with international banks for expanding its
network further, both locally and internationally.
Weaknesses
A weakness is defined as an area in an organization where the organization is not as
good at doing something as its competitors or a thing which an organization lacks
thus putting the organization at disadvantage in comparison to its competitors.
Based on the above definition, HBL has the following weaknesses.

 Lack of communication between bank and customers about terms and
condition of products and services. Like centralization of cheque book issuing
process.
 Employees at branch level are not properly motivated to work by heart. They
take the all routine activities as a boring job.
 Most of the employees lack managerial training as they are not properly
educated. Due to seniority, they have moved up on the hierarchy line to
Grade-I, II or III positions having hardly bachelor degrees. This type of senior
staff cannot apply the modern and innovative techniques of management in
decision making.
 Mission of HBL is not well defined.
 Though HBL is second largest bank in Pakistan, yet the fact remains that it is
not market leader as NBP. Its total assets are always less than NBP total
assets.
 Now as it is a privatize bank that is why GOVERNAMENT support to HBL
decreased as it was in past
Opportunities
An opportunity can be defined as a change in external environment which if properly
exploited with the organizational strengths will result in enhanced sales, market
share, or income. Using its strengths, HBL can avail the following opportunities.
Opportunities require explanation therefore I have used headings instead of arrows
E-Banking
Generally speaking, three factors, quickness, easiness and cheapness
have become the catchwords for the competitiveness and usefulness of all the
business operations. Particularly it is commonplace today to say that banking is
undergoing a radical transformation. Only those banks that use their technology
resources effectively have the opportunity to secure real competitive advantage in
this fast-changing industry through real product or service differentiation.
High mark up rates
Of late markup rates have increased considerably. Present
rates are 4% above KIBOR i.e. 16% appx. High markup rate has decreased the
interest of people in loaning from from banks. Habib bank can increase its income by
offering loan at lower interest rate than other banks.
ONLINE BANKING
It is doing banking transactions through our home P.C. The
banks that do business through net have WebsitesSo Habib bank should focus
heavily on providing online banking faculties to its customers. Currently it is doing the
same.
CORPORATE BANKING TERMINAL (CBT)
Large corporate customers can
log into the bank's database and have access to their accounts/transactions from
their business houses. This facility has still not been started for customers in
Pakistan. So Habib can focus on that.
AUTOMATIC TELLER MACHINE (ATM)
This system is known as "Any Time
Money" because it allows customers who have an ATM card to withdraw money at
any time from the bank without interacting with human teller.. It allows customers to
transact with the bank 24 hours a day and 365 days a year. They allow the
customers to transfer money to and from accounts to view account information, to
receive cash. It can also be used to deposit cheques and cash into the accounts.

No bank in Pakistan is offering this service currently. So an opportunity exists for
Habib bank to differentiate.
Rate of return
The range and choice of products available & offered by the
commercial banks is limited. Rates of Return / Profits on Deposits are so low and
unattractive that very limited options are available to the depositors. They do not
match the current rate of inflation. HBL differentiate and increase it’s deposit by
offering attractive rate of return on deposits.
Threats
Threat can be defined as a change in external environment which if not met with
proper strategies will result in loss of revenues, market share, or income. In the
context of HBL’s external environment, the following potential threats exist:
 Other private commercial bank with sound profitability is also a threat to HBL
e.g. UBL, Alfalah, MCB etc
 The Rupee Travelers Cheque (RTC) sales volumes may be affected on
account of regulatory restriction imposed by SBP on issuance of large value
denominations.
 For the last of 2 to 3 years, Pakistan is facing economic and political instability
which is a big threat.
 Foreign banks are flourishing in field of consumer financing.
 Afghan war and Iraq war has a deep effect on the economy of Pakistan, which
has affected HBL.
 Increased regulations from State Bank of Pakistan may affect its business.

Operations of HBL
A. banking departments of habib
bank
Various departments are working in all the branches of Habib bank to facilitate the
customers. Following are the banking departments functioning in HBL Jinnah Chowk
branch Sahiwal.
1. Account opening department.
2. Cash department.
3. Credit department.
4. Lockers department.
5. Bill clearing department.
6. Foreign exchange department.
7. I.T department.

1. Accounts opening department
Basic function of the accounts department is to open new account and facilitate the
customer for the account opening purpose. There are certain formalities which are to
be observed for opening of an account with a Bank. These formalities in brief are as
under:
FORMAL APPLICATION:
The customer is to fill "Account Opening Form. It is a formal request by a customer
to the bank to allow him to have and operate the account.
Documents require for opening an account:
 Copy of CNIC
 Service certificate or student card.
 Utility bill
 Provisional receipt
 KYC (Know Your Customer)
SPECIMEN SIGNATURE:
When the Banker is satisfied about the integrity of the customer, he agrees to open
the account. The Banker obtains the specimen signatures of the customer on the
signature book or on card.
Posting the account on the system:
After that officer has to post the new account on computer system for further
processing. During the process customer id and account number is generated. New
account remains active for one day after that it is blocked by the head office until
CNIC of the customer is verified from NADRA.
Cheque book issuing:
After the CNIC verification account opening officer has to issue a cheque book to
customer so that he can be able to make withdrawal from his account. Now a day in
Habib bank cheque book issuing process is centralized that take 06 days to
complete.
SECRECY:
The secrecy of depositor’s account is the. Responsibility of every official engaged in
the Bank service.
Types of accounts:
Individual accounts:
Individual accounts are the most common personal investment accounts. Opened by
single person.
JOIN ACCOUNT:
A joint account occurs when two or more than two customers have one account. The
parties to a joint account are considered in law as they are one person.
Business accounts:
Business accounts can be opened by institutions, companies, partnerships, trusts
and non-profit organizations. Following documents are required.

BOOKS RELATING TO CUSTOMERS:
Pay-in-Slip
When money is to be deposited in the bank the pay in slip is to be filled. The object
of this book is to provide the customer with the bank’s acknowledgement for receipt
of money to be credited his account.
Cheque Book
A chequebook contains a number of cheques, which is given to a customer upon
written request and after marking the payment for the chequebook. It enables a
customer to make withdrawal from his account or make payment to various parties
by issue of cheques.
GROUNDS FOR CLOSING THE CUSTOMER’S ACCOUNT:
The banker may close the account of the customer due to following reasons:
i. Notice by a Customer
ii. Death of a Customer
iii. Customer’s Insanity
iv. By order of court
I) NOTICE BY CUSTOMER
The banker closes the account of the customer on the application of the customer for
closing his account.
II) DEATH OF CUSTOMER
On death of his customer, the bank must stop payment on cheques drawn on him by
the deceased customer because the death revokes his authority to pay such cheque.
The heirs or the executors of the deceased customer are not authorized to operate
on the account; it can act only in accordance with provisions mentioned in the letter
of probate issued by a competent courts.
III) CUSTOMER’S INSANITY
If the customer becomes insane or mental it terminates the banker’s authority to act
as his customer’s agent. Since the banker customer relationship comes to end, in
such as situation, it is usually considered that the banker’s authority to pay his
customer’s cheques is revoked by notice of insanity. However, the bankers treat their
customers as it unless a fairly inclusive evidence of the customer’s insanity is
available to them.
IV) ORDER OF COURT
A court of law may serve a banker with an order in garnish proceeding in execution
of a decree prohibiting him from honoring a customer’s cheques.
2. CASH department

ash Department is very sensitive and risky part of the bank. Very causations
and competent personnel are needed for the Job. HBL has really such a
diligent staff with appreciable competencies and will to do work. Main function
of cash department is to deal with cash payment and cash receipts.
C
Cash deposit procedure:
The customer fills the pay slip. The cashier receives the pay slip and cash. He
counts the cash and makes the detail of the notes at the back of the pay slip. Then
he compares the detail with amount written on slip and signs the pay Slip. Then he
credits the entries in the computer by serial No, account type, Account number and
amount. Puts the stamp of the “cash Received” on the payment slip. The first portion
is for bank record while other one is given to the customer.
Cash payments procedure:
When a customer comes to withdraw a certain amount from his account, he brings a
Cheque along with him. In this case the following steps are taken.
The cashier receives the cheque and checks it whether it is post dated or predated.
Cheque can be cashed within six months. A predated cheque cannot be cashed. He
takes two signatures at the back of the cheque from the bearer. He gives the cheque
for posting at the computer. The computer checks out whether there is balance in the
account or not. Other instructions are also received e.g. blocked, frozen, Etc. the
posting is done in the computer and the cheque is stamped posted with the serial
number and date. He gives the cash to bearer and the respected account is debited.
Online fund transfer:
Another function of the cash department is of online transfer of funds.
Customer has give filled remittances form with cash or without cash (from account
transfer) to the cashier in cash department who will then credits the beneficiary
account.
Balancing cash at the end and transferring excess cash:
At the day end cash department is responsible for balancing the cash. Physical cash
should be balanced with the amount in the computer. P.M.C branch’s limit for cash is
40 million which it can keep within the branch over the night excess cash is
transferred to SBP.
3. CREDIT DEPARTMENT
1. Introduction
2. Securities.
3. Types of credits
INTRODUCTION
The function of credit department is to lend money in the form of clean advances,
against promissory notes, as well as secured advances against tangible and
marketable securities. The bankers prefer such securities that do not run the risk of
general depreciation due to market fluctuations.
Common Securities for the banker’s advances are as under:-
SECURITIES
1. Guarantees

When an application for advance cannot offer any tangible security, the banker may
rely on personal guarantees to protect himself against loss on advances or overdraft
to the applicant.
2. Mortgage
A mortgage is the transfer of an interest in specific immovable property for the
purpose of security the payment of money advanced or to be advanced by way of
loan, and existing or future debt, or the performance of an engagement which may
rise to a pecuniary liability. The transfer is called a mortgagor, the transferee a
mortgage.
3. Hypothecation
When property in the shape of goods is charged as security for a loan form the bank
the ownership and possession is left with the borrower, the goods are said to be
Hypothecated The essence of hypothecation is that neither the property in the goods
not the possession of them are possession is left with the borrower, the goods are
said to be Hypothecated the essence of hypothecation is that neither the property in
the goods not the possession of them are possessed by the lender, but the security
is granted by means of letter of hypothecation, which usually provides for a banker’s
charge on the hypothecation goods.
4. Pledge
In a pledge the ownership remains with pledge, but the pledge has the exclusive
possession of property until the advance is repaid in full. While in case of the default
the pledge has the power of sale after giving due notice.
5. Promissory Note
Sometimes promissory note is also accepted as a security, "A promissory note is an
instruments in writing containing an unconditional undertaking signed by the maker,
to pay on demand or at a fixed or determinable future time a certain sum of money
only, to or to the order of certain persons, or to the bearer or the instrument." A
promissory note is incomplete until has been delivered to payee or the bearer.
Moreover, the sum promised in a promissory note may be made by two or more
makers who may be liable there on jointly and severally.
TYPES OF ADVANCES
The advances which are given by Habib Bank Limited are as under:-
1. DEMAND FINANCE (Ordinary Loan)
Demand Finances are those advances which are allowed in lump sum for a fixed
period and are repayable lump sum or gradually in installments.
TYPES OF ADVANCES
a. Demand Finance (Packing Credit)
Scheme introduced by State Bank of Pakistan for exporter of carpet, surgical
instruments, at zero percent rate of interest. While banks provides at
concessional rate of interest.
b. Loan ordinary (Demand Finance to Students)
Qarz-e-Hasana Scheme Loans are allowed to the students, teachers without
any interest or mark up with the recommendations of the MPA or MNA.
c. Demand Finance (Staff)

Loans are offered to the staff of the following four categories.
i. House Building Loans against mortgage of property.
ii. Loan for purchasing vehicles.
iii. Loan equivalent to month’s salary.
2. RUNNING FINANCE (Overdraft)
Running finance (old name overdrafts) are advances, which are generally, given to
meet temporary requirements of the customers. A good customer use the banks
running finance limit as a mean of protecting his credit in the market and as a line of
security defense to meet his commitments.
TYPES OF RUNNING FINANCE
I. Unsecured
Under such type of overdraft the bank pay upon the personal security of the
customer’s mentioned on the customer’s account.
II. Secured
Under this type of overdraft the bank allows his customer to withdraw more
than his deposits after giving security against the amount overdrawn.
The securities against which they given are:
i. Share certificate, Saving certificate
ii. Deposits
iii. Mortgage of property
iv. Guarantee of person
SMALL LOANS
Loan is allowed to contractors clearing and forwarding agents.
3. FINANCE AGAINST THE FOREIGN BILLS (FAFB)
The advance facility is allowed both to local foreign bills and is classified as under:-
i. FAFB (Local) advance against Railway receipts and truck receipt, a company
with bills of exchange and invoices, are given under this head.
ii. FAFB (Foreign) advances against foreign bill, covering bills of exchange bills
of lading airway bills of exchange bills of lading airways bills etc.
4. AGRICULTURE LOANS
Loans to the farmers with holding up to 25 acres for meeting their short terms,
medium and long terms Agricultural production requirements, such as:
i. Agricultural inputs
ii. Tube wells
iii. Live Stock Framing
iv. Land improvement
5. INDUSTRIAL LOANS

Besides the short-term loans which play a part in working capital medium and long-
term loans are also given to industrial sector for purchase of machinery and other
capital nature goods.
4. Bills clearing department
INTRODUCTION
Every bank acts in two way i.e.
i. Paying Bank
ii. Collecting Bank
Here in theory no legal obligation on a banker to collect cheques, drawn up to
other banks for a customer. It is, however, an important function of crossed cheques.
A large part of this work is carried out through the N.I.F.T.
NIFT- National Institutional Facilitation Technologies (Pvt.) Limited:
NIFT is a joint venture between a consortium of six major banks and private
sector. It is responsible for the establishment and management of automated
clearinghouse facilities in Pakistan. NIFT is proactively involved in the modernization
of payment systems in Pakistan.
FUNCTION OF CLEARING DEPARTMENT
The following are the main functions of clearing department.
4. To accept transfer deliveries and clearing cheques from the customer of the
branch and to arrange for their collection.
5. To arrange the payment of cheque drawn on the branch and given for
collection to any other branch of Habib Bank of Pakistan or any other
members, or sub-members of the local clearing area..
6. To collect amounts of cheques drawn on members, sub-members of the local
clearing house, sent for collection by those Habib Bank Limited, branches
which are not represented a the local clearing area.
PROCEDURE OF DEPOSITING CHEQUES IN CLEARING DEPARTMENT
Whenever a customer wants to deposit cheque, etc, he fills a pay in slip and
hands it over the counter along with the instruments he wants to deposit with bank.
As far as possible, the customer desire that on of the staff member fill in a slip for
him, he should be obliged promptly.
One portion of the perforated pay in slip is handed over to the depositor and
the portion becomes the regular portion of a credit voucher
TYPES OF CHEQUES COLLECTED BY CLEARING DEPARTMENT
a. Transfer Cheques
Transfer cheques are those cheques, which are collected and paid by the
same branch of bank.
b. Transfer Delivery Cheques
Transfer Deliver cheques are those cheques, which are collected and paid by
two different branches of a bank, situated in the same city.

c. Clearing Cheques
Clearing cheques are those cheques in which the payee (Person who deposit
cheques for collection) and the drawer of a cheque maintain the account with
different banks.
These clearing instruments are handed over to NIFT after posting necessary
stamps and checking them for any errors. Then further process of clearing is carried
on the behalf of NIFT.
5.Forex Department
International trade is growing and with the development of international trade
it has become more imperative. For countries to devote more and more attention to
the complicated mechanism of Foreign Exchange. It is more important in case of
developing countries. It is need of time, that a country should conserve its foreign
exchange resources.
MEANING OF FOREIGN EXCHANGE
The foreign exchange term refers to the principles that determine the rate of
exchange. It covers following three senses:
i. The mechanism or system by which international obligations or indebtedness
are fulfilled.
ii. The currency of one country is exchanged for that of another.
iii. The principles on which the people of world settle their debts to one another.
Letter of Credit:
It is a negotiable instrument through which the bank of the exporter deals with bank
of the importer through the guarantee of a bank. There are different parties involved
in the L/C, e-g importer, exporter, importer bank, exporter bank, and advisory bank.
LC involves banking channels in foreign trade to mitigate risk.
The procedure of opening of an L/C is as follow
 The first thing is the Performa invoice. The Performa invoice is a document
(say a clip), which is, sends by the exporter to the importer and includes the
information like. Descriptions of goods, what type of goods you are needed
and what are the quality, rate and originating country etc.
 Before to open a L/C the bank also consider that the goods which the importer
is importing is allowed by govt. of Pakistan or not. Because the importer is not
allowed to import that goods which are prohibited by the Govt. of Pakistan.
 The importer is asked to show the membership certificate of any chamber of
commerce and industry affiliated with the Pakistan federation of chamber of
commerce and industry.
 Fill the import form of the govt. of Pakistan, which is the proof of this that there
is no objection on the goods, which the customer is importing.
 What type of goods you are needed and what are the quality, rate and
originating country etc.
Necessary Documents required for L/C:
 NTN
 Tax Authority registration certificate
 Chamber of Association’s trade certificate

 Type of Business
 NIC
 Margin
 Registration No.
 Application for L/C
On providing these documents the importer will be given the L/C form named as
IB-8.
Contents of IB 8
1. Request for LC
2. Rate
3. Importer and Exporter’s particulars
4. Amount
5. Terms
6. Partial Shipment (Allowed, not allowed)
7. Transshipment (Allowed, Not Allowed)
8. Port of Loading and destination
9. Payment Mode
I. Sight
On seeing the documents the importer has to pay.
II. At Sight and Negotiation:
It means that exporter will submit his documents with the bank and immediately asks
for payment.
III. Acceptance:
On showing the documents to the importer, the bank asks him to accept that he will
pay within 30, 60, 90, 120, 180 etc days.
10.Documents Required:
 Certificate of Origin.
 Commercial Invoice
 Bill of Lading / Air way bill.
Charges:
For L/C following charges are applicable;
 Commission
 Postage
 L/C Advising commission
 L/C amendment Commission
 L/C confirmation Commission
 L/C Negotiation Commission
Payment Mode:
In foreign trade payment modes are
1) Advance Payment: Importer makes payment before delivery of goods.
2) Open A/C: Importer makes payment after receiving the goods.
Issuing foreign exchange accounts cheques books
Another function of foreign exchange department in P.M.C branch is to issue foreign
exchange accounts cheques books to customers on request. This process is not yet
centralized. Cheque book is issued within 15 minute of receiving request from
customers after making necessary register entries and posting stamps on it.

Products and Services of Habib Bank
Limited
Retail Banking
For
Individual Customers
Deposit Accounts
Current Accounts
Make unlimited transactions while maintaining a low minimum balance every month.
HBL is currently offering three types of accounts in current account category. Their
detail and name is as under.
1. HBL BusinessValueAccount
2. Current Account

3. Basic Banking Account (BBA)
HBL BusinessValueAccount
 Unique transactional account for Businessmen
 Up to 5.35%* profit per annum
 Profit calculated daily, paid every quarter
 Minimum balance of Rs. 20,000
 HBL DebitCard and Inter Branch Transaction System (IBTS) facilities
 Up to 10 Bankers Cheques free (at minimum balance of Rs. 500,000)
 Funds transfer to any bank through HBL PhoneBanking
Current Account
 Unlimited transactions
 Non-profit bearing
Basic Banking Account (BBA)
 Can be opened with only Rs. 1,000
 No minimum balance requirement
 Upto 2 withdrawal and 2 deposit transactions free every month
 Unlimited withdrawals through HBL DebitCard
 Non-profit bearing
Savings accounts
Avail the flexibility of making transactions while earning profit on daily/monthly basis.
HBL is currently offering five types of accounts in savings account category. Their
detail and name is as under.
1. HBL Value Account
2. PLS-Savings Account
3. Remittance Munafa Plus Savings Account
4. Daily Munafa Account
5. Daily Progressive Account
HBL Value Account
 7.19%* profit per annum
 Profit calculated monthly, paid every quarter
 Deposit ranges from Rs. 10,000 to Rs. 1,000,000
 Two withdrawals free every month
PLS-Savings Account
 5.06% profit per annum*
 Profit paid bi-annually

 Unlimited transactions
Remittance Munafa Plus Savings Account
 Special account for receiving foreign remittances
 5.12%* profit per annum
 Profit paid every month
Daily Munafa Account
 Profit calculated daily, paid every month
 Up to 8.84% profit per annum*
Daily Progressive Account
 Unique transactional account for Institutions
 Profit calculated daily, paid every month
 Up to 11.57% profit per annum*
 Inter Branch Transaction System (IBTS) facility
Terms Accounts
Invest your savings in HBL term deposits for a fixed duration and earn profit while
keeping your savings secure. HBL is currently offering one type of account in terms
account category. Their detail and name is as under.
1. HBL Advantage Account
HBL Advantage Account
 Multiple options for tenure and profit payout
 Loan facility up to 90% of investment
 Minimum investment of Rs. 25,000
 Withdrawal at end of fixed term
Tenure Profit at maturity
3 MONTHS 7.50%*
6MONTHS 8.00%*
1 YEARS 11.00%*
3 YEARS 13.00&*
5 YEARS 14.00%*
10 YEARS 17.00%*

Foreign Currency Accounts
HBL offers Foreign Currency Accounts in multiple currencies as savings and term
accounts. Their detail is as under.
FC-SB
 Savings Account offered in 3 currencies, USD (US dollar), EUR (Euros) and
GBP (UK pound)
 Tiered product, with rates depending on choice of currency
 To earn profit, minimum balance in USD, EUR and GBP is 1,000
 Interest is payable on a quarterly basis
HYFFD (High Yield Foreign Currency Fixed Deposit)
 Available in 1 month, 2 month, 3 month, 6 month and 12 Month in USD, EUR
and GBP
 Tiered product, with rates depending on choice of currency and term
 Profit paid on maturity only. No interim interest is payable.
*NOTE: All the rate and terms and condition are revised by HBL after every six
months periods. These rates are only applicable for period 01.07.09 to 31.12.09.
Further detail of terms and conditions about profit and rates is given in annex “B”.
HBL car loan
HBL Car Loan helps customers to get their preferred car through a simple and
hassle-free process, backed by superior service and support. Now customer can
drive a car he always wanted.
Features
 Choice of used, new local/imported and reconditioned imported car.
 Repayment options ranging Upto 7 years.
 Upto 85% of financing for the car of your choice.
 Insurance at all times for complete peace of mind and security.

 Round the clock support available through HBL PhoneBanking; you can place
your requests and queries, track the status of your repayment/loan account
and avail other value-added services through HBL PhoneBanking.
Eligibility Criteria
How to apply
 Just visit any HBL branch or Habib Bank Auto Finance Centre for details and
application.
 Submit complete set of application without any charges to the branch or the
Auto Center.
 Sign the necessary documents on approval of the application
 Payment is released within 24 hours of the submission of post-dated cheques
and initial payment after approval of the request.
Documentation
Salaried Individuals
 Complete Application Form
 Salary Certificate / Most recent Salary Slip
 Bank Statement for past one year
 Two Copies of NIC
 Employment Certificate with date of joining
 Two passport size photographs
 Copy of the last paid utility bill (residence)
Self-Employed Business persons/Professionals
 Letter of proprietorship / Registered Partnership Deed
 Certified latest Form A and Form 29, where applicable, along with articles and
Memorandum of Association
 Copy of last paid utility bill (residence)
 Bank Statement for the last 1 year
HBL car to car
HBL CarToCar is a revolutionary car financing offer. It makes the car of customer
choice affordable and practical with a buy back guarantee. HBL CarToCar offers

matchless features and unique options at the end of the lease. Now customer can
drive a new car at the end of every two years.
Features
Pay only for what you use
When customer lease a car under HBL CarToCar, he only pay for that part of the
car’s value that he use during the lease term. The car’s residual value (forecasted for
the end of the specific lease term) is agreed with him at the start of the lease term.
This amount is deducted from the car price thus lowering the finance amount. This
finance amount is based only on a part of the car’s value and not the full value of the
car. Therefore, HBL CarToCar offers very low installments as compared to any
conventional financing.
Upgrade of lifestyle
HBL gives customer the guarantee that if he wishes to return the car to HBL at the
end of the lease term, he will not have to pay off the car’s residual value. Instead,
HBL will directly settle this outstanding liability for customer under the buy back
guarantee. Hence, he can upgrade to a new car as frequently as two years without
any complication and hassle.
Affordability
With HBL CarToCar, customer only has to pay the difference between the car price
and the pre-agreed residual value to the bank. As a result, the monthly installment
may even be 40% to 50% less than that of conventional financing.
Flexibility
HBL CarToCar offers customers several choices at the end of the lease term:
• Upgrade - Simply return the car to HBL and drive a new one home
• Walk away - Return the car to HBL and end the lease
• Buy - Keep the same car. Just make a one-time settlement of the car’s residual
value to HBL or pay the same in easy installments over a specified extended period
of time
• Sell - Enjoy the gain from selling off the car at a higher price in the market than
what you ay HBL as the residual value
Eligibility Criteria
Documentation
Salaried Individuals

 Salary Certificate / Most recent Salary Slip
 Bank Statement for past one year
 Employment Certificate with date of joining
 Copy of the last paid utility bill (residence)
Self-Employed Business persons/Professionals
 Letter of proprietorship / Registered Partnership Deed
 Certified latest Form A and Form 29, where applicable, along with articles and
Memorandum of Association
 Copy of last paid utility bill (residence)
 Bank Statement for the last 1 year
HBL Credit Card
By the help of HBL credit card customer enters into the world of convenience and
flexibility. Accepted at over 29 million merchants worldwide, HBL Credit Card makes
shopping fun and paying simple. So that a customer can make the most of his
shopping experience.

Benefits
Buy now, pay later
Buy what customer want, when he want and pay for it later. A credit card statement
will be sent to him every month with details of all his purchases. He will have 21
credit free days to make the payment from the statement date. Customer should pay
at least 3 days in advance if he makes your payment by cheques to allow enough
time for clearance.
Pay as much as customer wants
A customer can pay the entire or as little as 5% of the outstanding balance in his
statement. The unpaid amount will be transferred to his next month’s statement
along with applicable services charges.
Cash advance
Customer can go to any specified HBL branch and withdraw cash at the counter. He
can also go to any 1Link ATM in Pakistan and more than 1,000,000 ATMs worldwide
displaying the Visa/Plus logo. Withdraw cash up to the available cash advance limit
on his HBL Credit Card for a charge applicable from the withdrawal date.
Balance transfer facility
Card holder can pay off balances he owes to other banks through his HBL Credit
Card at a lower service charge.
Security
Card holder cannot lose cash if he doesn’t carry it! In the event that his card gets
stolen/lost, he should call HBL PhoneBanking to have his card blocked immediately.
Hbl debit card
HBL Visa Debit Card allows a card holder to pay for his purchases directly from his
bank account. He doesn’t have to carry cash and his monthly statement provides
him with a complete record of all his transactions so he can manage his expenses
with ease.

Features
No Interest
HBL Visa Debit Card is the perfect way of paying for purchases as it gives access to
the exact amount of money a customer needed, as and when he needs it. There is
no interest or credit on payments because he spends from the money available in his
personal HBL Account.
Ease & Security
HBL Visa Debit Card offers ease and convenience because card holder doesn’t have
to visit an ATM to withdraw cash. A single swipe automatically debits the exact
purchase amount from his personal HBL account.
Spending Limits
The daily spending limit at shops and outlets on HBL Visa Debit Card is Rs. 25,000-
100,000. (These figures are subject to the balance available in account).
Free Account Statement
HBL cardholders receive a free monthly account statement for their Debit Card and
ATM transactions to help them keep track of their spending.
International Recognition & Acceptability
HBL Visa Debit Card is accepted at over 20 million Visa merchants worldwide,
including over 10,000 merchants in Pakistan. As an ATM card it is accepted at more
than 1,000 1-Link & M-Net ATMs in Pakistan and 864,000 Visa ATMs worldwide. No
matter where card holder is, with the HBL Visa Debit Card, HBL is always with him.
No Liability
In case of a lost or stolen card, card holders are protected against fraudulent
transactions made on their card after they report the incident.
hbl personal Loans
With the rising cost of living, it is becoming increasingly difficult to make expensive
purchases or meet unexpected expenses. HBL is helping customer finance them
with Habib Bank personal Loans (old name flexi loan). Customer may avail a
personal loan of up to SIX TIMES of his net take-home salary subject to a maximum
of Rs.300,000/- provided he work for an organization approved by HBL.

Features
 Flexible tenure: 12, 24, 36,48 or 60 months
 No processing fee
 Repayment through easy and affordable monthly installments from salary.
 Credit Life & Disability Insurance
 Repayment through easy and affordable monthly installments
 You determine the need, we help you finance
 Option of add up replacement for existing customer.
 Minimum salary Rs. 12000
 No salary limit for existing customers.
 23% or 21% rate for existing users instead of 25%
hbl phone banking
Now the bank is just call away. Customer can now call HBL PhoneBanking and
save a trip to the branch. His query will be resolved in a single telephone call from
anywhere and at anytime.
T-PIN Generation
Customer’s TPIN (Telephone Personal Identification Number) is generated the first
time he calls and he can use it as your password for verification purposes, self-
service banking through IVR and additional services through HBL’s PhoneBanking
Officers. Customer can change his TPIN anytime he like.
HBL PhoneBanking services for Deposit Account customers
Customers can use the Interactive Voice Response (IVR) system or talk to HBL
PhoneBanking Officers to:
 Get his account balance
 Get information about the last 5-10 transactions carried out on his account
 Request bank statement, either through fax or email (as supplied in his
subscription form)
 Get details of transactions from the last 6 months on each of the accounts
listed on his subscription form
 Change and/or modify his contact details
 Transfer funds between his own accounts (as listed in the subscription form)
or from his account to a third party account (as listed in the Third Party
Authorization Form)
 Transfer funds from his own account to an account in another bank under the
1-Link network (Inter Bank Funds Transfer)
 Generate his own choice of ATM Pin without filling a request at your branch
 Inquire about HBL’s product offerings
 Lodge a complaint in case of any inconvenience
 Inquire about the daily accounts related profit rates and currency exchange
rates
 Request a number of physical instruments and/or branch banking related
services that he might require, including:
 Pay Order
 Demand Draft

 Statement
 Balance Certificate
 Cheque Book
HBL PhoneBanking services for HBL CarToCar and Car Loan customers
HBL CarToCar and HBL CarLoan customers can enjoy the following services
through HBL PhoneBanking:
 Balance Inquiry
 Last 5-10 Transactions
 Statement Generation (Email and Fax)
 Account Maintenance
 Assistance in case of Car Theft/Damage
Hbl bancassurance
HBL and New Jubilee Life Insurance Company Limited (NJI) introduce Amaan
(Retirement Plan) and Tabeer (Child Education & Marriage). These products have
been designed keeping HBL’s customer base as the focus and will provide life
insurance along with an investment option.
Amaan (Retirement plan)
Amaan is a pension plan that provides an opportunity for growth through investment
in a balanced portfolio with post-retirement income benefits. The plan covers life
insurance and gives attractive returns on investment to its customers.
Tabeer (Child Education and marriage plan)
Tabeer is a plan that provides parents with a means to accumulate a fund over a
period of time which can then be used to pay for a child’s education or marriage.
Plans are available for both under and over 45 years of age.

Lockers
Lockers are available in many of the HBL branches in different sizes like small,
medium and large; some branches also have extra large and cubical lockers. Except
rural areas because of security reasons.
Eligibility for using lockers
Only the account holders can avail the facility of lockers. The annual rent will be
directly debited from their respected accounts at the start of the year.
Charges
Size
Key deposit
(refundable)
Annual rent
Rs.
SMALL 2500 2750
MEDIUM 3000 3850
LARGE 4000 6050
Key deposit is refundable at the time handing over the locker to bank. For the staff of
HBL key deposit is not required and also the annual rent is very low for them.
Hbl corporate banking
HBL Corporate Banking Group comprises a seasoned team of Relationship
Managers (RMs) to meet the demanding service standards of large corporations. A
long history of financing and nurturing relationships in Pakistan has given HBL a
unique insight, enabling it to provide timely and effective financial solutions for their
customers to meet the growing challenges of a global economy. For a corporate
customer, with a turnover of at least PKR 300 million, HBL has a range of solutions
designed to help him with his banking needs. Their RMs have the expertise
customer need to create tailored financial solutions catering to the specific
requirements of his business. Whether establishing a new venture or expanding an
existing business, HBL’s team understands customer’s banking needs and works
closely with him to realize his goals.

Services
HBL provides the following services to meet customers funding requirements:
 Working Capital Finance, including Overdraft, FE Loans, etc.
 Pre and Post Shipment Export Financing (PKR and USD based)
 Import Financing (PKR and USD based)
 LMM Funding
 Receivable Discounting
 Islamic Banking facilities
 Cash Management Services
 Trade Services including Letter of Credit, Letter of Guarantee and Standby
Letter of Credit, etc.
HBL CORPORATE CENTERS
1.Corporate Centre, Karachi 6.Export Processing Zone, Karachi
2.PIA Branch, Karachi 7.Steel Mills, Karachi
3.Stock Exchange, Karachi 8.Stock Exchange, Lahore
4.Corporate Centre, Islamabad 9.Morga Branch, Rawalpindi
5.Corporate Centre, Faisalabad 10.Corporate Centre, Multan
11. Karachi Port Trust, Karachi
HBL Commercial banking
HBL’s Commercial Banking Group targets medium sized companies with a turnover
of at least PKR 50 million. Its business units are located in Karachi, Lahore,
Faisalabad, Sialkot, Gujranwala and Peshawar. Each unit is dedicated to service
business clusters located within these cities. They have the ability and the resources
to meet the needs of customer’s business with their pro-active, responsive and
experienced Relationship Managers who are committed to understanding customer’s
business.
Services
HBL offers financing for the following:
 Working Capital
 Procurement of Inventory

 Receivables
 Procurement of Machinery
 Expansion of production facilities
 Import of raw materials
 Exports
 Guarantees
HBL COMMERCIAL BANKING CENTERS
1.Al-Noor, Karachi 9.Foreign Exchange, Karachi
2.Korangi Industrial Area, Karachi 10.Napier Road, Karachi
3.Saddar, Karachi 11.S.I.T.E. Karachi
4.Tariq Road, Karachi 12.Panorama Centre, Lahore
5.Badami Bagh, Lahore 13Peco Road, Lahore
6.Kashmir Road, Sialkot 14.Paris Road, Sialkot
7.Small Ind. Estate, Sialkot. 15.Circular Road, Faisalabad
8.Peoples Colony, Faisalabad 16.Trust Plaza, Gujranwala
17.Super Market, Peshawar
Hbl zarai banking
HBL ZaraiBanking facilities are spread across the country and provide financing
through more than 800 of their branches. HBL’s presence in all agriculture belts of
the country ensures easy access to farmers in rural areas. HBL ZaraiBanking
provides loans to small-scale land owning farmers as well as large institutionalized
and alliance based finance, enhancing agricultural harvest and, in turn, economic
output of the country.

Products
HBL ZaraiBanking enables farmers to invest in premier quality seeds, fertilizers,
pesticides, agricultural implements and non-farm setups through its various product
programs.
Crop Inputs
Crop specific finance for purchase of Agriculture inputs such as seed, fertilizer,
pesticide and other related inputs.
Farm Implements
Finance available for purchase of farm implements & machinery like combined
harvester, sprayers, ploughs, tube wells and other crop-related tools/implements.
Tractors/Agricultural Vehicles
Finance available to individual farmers, self-employed tractor operators, providing
the option to select vehicles from a range of different manufacturers.
Livestock
Finance available for feed, medicines, raw material, raising charges and other
related activities.
Poultry
Finance available for all poultry related activities including poultry farm
construction/equipment, hatchery plant & machinery, poultry feed, poultry medicines,
composite feed production, poultry processing and other related activities.
Fish Farming
Finance available for inland fish farms as well as deep-sea fishing. This includes
procurement of boat, fish locating equipment, nets & ropes, ice maker, fish farm
water solution, hatchery construction/equipment, purchase of medicines / feed and
other related activities.
Group Lending
Joint finance facility for a group of farmers with small land holdings for working
capital requirement.
NOTE: These finances may be availed under Demand Finance or Running Finance
categories. Demand Finance is usually available for short term financing needs while
Running Finance is available on the basis of revolving limit.
Islamic banking
Islamic Banking is a growing market segment that offers attractive opportunities to
potential and existing customers. At HBL, Islamic Banking offers Shariah compliant
products and services to meet the short and long term requirements of business,
trade and industry.

Shariah Compliance
HBL’s Islamic Banking products are in strict compliance with the tenets of Shariah
and bear Shariah Compliance Certification from an independent Shariah Advisor.
Their Shariah Advisor has in depth experience in Shariah rulings (Fatawa) and
teachings at different forums with qualifications of Dars-e-Nizami, M.A and L.L.B.
HBL also have a Shariah Scholar, as member of their Shariah Supervisory
Committee to ensure a sound Shariah Compliance mechanism, giving prompt
responses to customer’s needs and access to Shariah knowledge.
Products and Services
Corporate and Commercial customers can choose from Shariah compliant banking
solutions to meet their business needs.
Ijarah (Leasing)
Medium to long term facility for vehicles, plant and machinery leased out to the client
on rental basis.
Diminishing Musharaka
Medium to long term facility for vehicles, plant and machinery on joint ownership
basis.
Murabaha
Local and Import facilities for purchase of raw materials, semi finished and finished
goods, stores or spares.
Trade Services
Letter of Credit Facility, Collection of Foreign Bills, Collection of Local Bills, Letter of
Guarantees.
Customers are welcome to visit their Islamic Banking branch for the following
services:
 Current Account (PKR, USD, EURO, POUND STERLING)
 Basic Banking Account
 ATM/Debit Card Facility
 Foreign / Inland Remittances
 Utility Bills Collection
 E-banking / Internet Banking Services
 24/7 Phone Banking Services
 Personalized customer friendly services
 Saving Deposits will be introduced soon
Branch
Address
Finlay House
Ground Floor
I.I Chundrigar Road
Karachi
Learning as an EMPLOYEE
As every body knows that "Knowledge without practice is sterile ".I JOINED HBL ON
28TH
, May, 2014.During my job I got a chance to work and learn in following
departments of the bank:
 Foreign exchange department

 Bills clearing department
 Credit department
 I.T department
 Cash department
 Accounts, ATM and Lockers department
Duties and learning in Foreign exchange department
First of all I started my job training in foreign exchange department of the bank under
the supervision of Manager Forex department. I came to know about the different
functions of foreign exchange department and how to perform these functions during
my work in the department.
My duties in the department were related to the followings:
 Foreign currency exchange rates.
 Letter of credit (L.C) both opening and negotiation.
 Letter of guarantee
 Issuing check books for foreign currency accounts
 Remittances applications.
Learning
Opening of letter of credit. Bank starts working on opening process after an
application is received from the buyer (importer). I came to know about the process
of opening of L.C, documents that bank demands from applicant, form used for that
purpose, getting A.T (Availance Ticket) from regional head office and scanning and
mailing the documents to head office Karachi for the purpose of getting approval,
and payment on maturity date. Opening and negotiation both are centralized process
in Habib bank therefore approval from head office is required.
Negotiation of L.C. Bank starts negotiation of letter of credit (which would be
already opened by importer’s bank) after the application from seller (exporter).
Before sending the documents for payment to importer bank negotiator bank must
ensure that the entire document mentioned in Claus 46A of the L.C are attached and
complete.
I also worked on Remittances application. An applicant who wants to transfer
funds abroad must have a foreign currency account in the bank. Because State Bank
of Pakistan only allow account to account transfer of funds abroad through banks.
And I came to know about the process and information required to fill the form. I also
came know about the process of issuing foreign currency account’s cheque book to
customers. I learnt many things about the mechanism of foreign trade.
Duties and learning in bill clearing department
The second department in which I got a chance to work was bill clearing department.
During the work in clearing department I came to know about the different functions
of clearing department and how to perform them. I came to know the process of
receiving cheques by Dak, how to check cheques for any error like, the cheques
should be of the bank which is the clearing member of area which comes under
P.M.C branch for example if the cheque is of bank Al-Fallah Lahore then it should go
to zonal branch of Lahore region instead of zonal branch of Faisalabad. Then
checking whether the amount of cheque and OBC (outward bank collections)

voucher attached to it is same or not. If no error is found then making register entries
by noting down their OBC number branch code and amount of the voucher. Then:
 Calculating the total amount of vouchers by summing individual amounts.
 Calculating the total amount of cheques by summing individual amounts.
 Preparing an add list to be attached with clearing instruments (cheques).
 Writing vouchers for demand drafts.
And I also came to know about the different types of stamps and their use in
particular situation like DAK RECEIVED stamp and CLEARING stamp. After
attaching add list, clearing instruments are handed over to NIFT for further
processing. These clearing instruments are delivered to their respective banks for
clearance by NIFT. I also learnt in case of Banker’s Cheques how to verify signature
from the book in which all the signatures of authorized persons of HBL are given with
their specific code. And I also worked on OBC (Outward bank collection) forwarding
schedule. I came to know the process of sending cheques or other clearing
instruments for clearance to zonal branch of another region.
 Filling vouchers
 Assigning OBC numbers
 Making entries in OBC register
Duties and learning in credit department
After bill clearing department I started my work and learning in credit department of
the branch. Mr. Shehryar Ali (Credit Manager) told me about the terms and
conditions of the commercial loan, types of commercial loan like industrial loan and
loan for merchants, how to make proposal for commercial loan, document required
to make a proposal, markup of commercial loan (18.5 % annually). He also gave me
chance to view some old proposals and the proposal on which he was working.
I am working as assistant manager credit and dealing consumer financing. I was
told about different types of consumer financing.
 Flexi loan (personal loan)
 Auto finance
 Lifestyle loan
In Faisalabad region at this point of time from HBL only personal loan is active while
auto finance is about to start again in near future and lifestyle loan is inactive. I came
to know about the terms and conditions of personal loan. Only the government
servant who has his salary account at least six month old in HBL can apply. Different
markup for different categories like 21%, 23% and 25%.
 21% for existing users’ upto 3 year duration
 23% for existing users for 4 or 5 years duration.
 25% for new customers
I also did work on documentation process for personal loan. I came to know about
the different types of document required to complete a case for sending it to regional
head office for approval. Document like branch check list, application form, Copy of
CNIC of customer and two references, CNIC verification report from NADRA,
customer’s account statement, finance agreement form etc.
I also came to know about different types of securities which a bank demands from
customer while issuing loan. e.g. Guarantees, Mortgage, Hypothecation and Pledge.
Duties and learning in Accounts, ATM and Lockers department
Then I learned about ATM (automatic teller machine). I came to know about the
functions and working process of ATM machine. Loading cash and balancing at the

time of loading again. Next my main concern was to know about all the aspects of
ATM card. I came know about the types, process of issuing ATM card to customers,
filling forms, how to activate ATM card, charges of issuing and using ATM card.
Then I spent my time in lockers department. I took all the information about the
terms and conditions of allotting and operating a locker, types of locker like small,
medium and large, charges of using lockers, key deposit (refundable), filling
application forms, insurance amount for specific size of locker and etc. I also came
to know about the process of operating locker by the customer, how to open the
locker with the help of two keys.
 1 key in the hand of bank officer (anticlockwise)
 2nd key in the hand of customer (clockwise)
Customer is allowed to operate the locker in full privacy. Only the customer himself
or other person authorized by him can operate the locker. After that bank officer has
to take the signature of the customers on attendance register maintained for this
purpose.
Then my duty was in Accounts department. I came to know the procedure for filling
the form to open an account, different types of stamps required and about signature
of the staff. Documents required to be attached with the form.
 Copy of CNIC
 Utility bill
 Provisional receipt
 KYC (Know Your Customer)
And how to post an account on system after filling the form. Then I came to know
about Saving accounts and different types of accounts in saving category and terms
and conditions of each type.
1. HBL Value Account
2. PLS-Savings Account
3. Remittance Munafa Plus Savings Account
4. Daily Munafa Account
5. Daily Progressive Account
Then current accounts
6. HBL Business Value Account
7. Current Account
8. Basic Banking Account (BBA)
Term accounts
9. HBL Advantage Account
10.Investment plus Deposit
FC accounts
11.FC-SB
Savings Account offered in 3 currencies, USD (US dollar), EUR (Euros) and GBP
(UK pound)
12.HYFFD (High Yield Foreign Currency Fixed Deposit)
Available in 1 month, 2 month, 3 month, 6 month and 12 Month in USD, EUR and
GBP
Assignments
(1)During my work in accounts department Mr.Maqbool Ahmed khan (manager
operation) assigned me the duty of checking the files of previously opened accounts
for any type of discrepancies like utility bill or service certificate of the account holder
is attached or not and checking stamps and signature of the staff etc. It was because
an audit of these files in the coming month is scheduled. Almost above 50% of the
application forms were having discrepancies of different types. This turns out to be
very informative experience for me. Deposits are considered as lifeblood for any

bank to survive. I came to know about the procedure and different types of deposits
that customers can maintain in HBL, return rates that a customer can get and other
terms and conditions of each type of account. As far as checking the old files are
concern it seems boring but from my point of view it was very informative. The
learning I got while doing this job would never be easy to get otherwise.
(2) Due to my familiarity with their computer software I was given another task of
updating account information on their computer system MISYS. Like account
holder’s name, address, CNIC number etc. In case of any problem I was consulting it
with Mr.Ehsan. This task gave me more chances to learn about the computer system
of HBL and also I can proudly say that I have my own share of working in
computerizing HBL’s record.
Financial performance and
achievements of HBL in 2014
 HBL - 'The Best Emerging Market Bank in Pakistan'
 2014 HBL - 'Most innovative Global Trade Finance' award
 2014 - 'Best bank In Pakistan' Award
Ratio Analysis of the HBL:
“An index that relates two accounting numbers and is obtained by dividing one
number by other”
Ratio Analysis is an important and age-old technique of financial analysis. It
simplifies the comprehension of financial statements. Ratios tell the whole story of
changes in the financial condition of business. It provides data fro inter firm
comparison. Ratios highlight the factors associated with successful and unsuccessful
firm. They also reveal strong firms and weak firms, over- valued and under valued
firms. It helps in Planning and forecasting. Ratios can assist management, in its
basic functions of forecasting, planning, co-ordination, control and communication.
Ratio analysis also makes possible comparison of the performance of different
divisions of the firm. The ratios are helpful in decision about their efficiency of
otherwise in the past and likely performance in future. Ratios also help in Investment
decisions in the investors and lending decisions in the case of bankers etc.
Following are the main types of ratios that I am going to calculate in this report to
compare and highlight the financial performance of Habib bank in 2014 with 2013.
 Return on Equity Ratio
 Return on Assets
 Loan to Assets ratio
 Net Profit Ratio
 Loan to Deposit

Return on Equity Ratio
Interpretation:The past two years data shows an improvement in the return on
equity which is a positive sign. The Bank should have to continue its policies. By
observing the audited account I found that this improvement is due to increase in the
Net profit which is good sign.
Return on Assets Ratio
Return on Equity Ratio
2014 2013
Net Profit after tax X 100
Owner Equity
Net Profit after tax
15,614,020 10,084,037
Owner Equity
75,180,436 63,237,429
Return on equity
20.76 15.94

Interpretation:
Return on assets ratio shows an improving trend. This ratio shows that the both the
Net profit and Total Assets has improved in 2014 than 2013. But net profit has
increased more rapidly.
Net Profit Ratio
Return on Assets
2014 2013
Net Profit after tax X 100
Total Assets
Net Profit after tax
15,614,020 10,084,037
Total Assets
757,928,389 691,991,521
Return on Assets
2.06 1.45
Net Profit Ratio
2014 2013
Net profit /
Interest Income X 100
Net profit 15,614,020 10,084,037
Interest Income 43,970,884 33,250,937
Net profit ratio
35.50 30.32

Interpretation:
Net profit Ratio is giving upward trend. This trend is observed due to increase in Net
profit but on the other hand the expenses decreases which shows an efficient
management.
Loan to Deposit Ratio
Interpretation:
Loans to deposit ratio show an increasing trend in 2014 as compare to 2013. This
trend is observed as the advances and deposits both are increasing but advances
are increasing more rapidly than deposits.
The financial results for the first quarter of 2009 are
(Rs. In 000)
Profit after tax 3,384,623
Share of profit attributable to minority interest 45,063
Profit attributable to shareholders 3,339,560
Earnings per share rupees (Basic & Diluted) 4.40
Loan to Deposit
2014 2013
Loans/Deposits*100
Advances
456,355,507 382,172,734
Deposits 597,090,545 531,298,127

Achievements
HBL - 'The Best Emerging Market Bank in Pakistan'
HBL has been selected as ‘The Best Emerging Market Bank in Pakistan’ by Global
Finance Magazine.
Global Finance magazine has named the “Best Emerging Market Banks in Asia” in
an exclusive survey to be published in the May 2009 issue. Global Finance editors—
with input from industry analysts, corporate executives and banking consultants—
selected the best emerging market bank in the region and in 20 countries. Global
Finance reports on the international finance sector, covering topics such as
corporate finance, joint ventures and M&A, country profiles, capital markets, investor
relations, currencies, banking, risk management, custody, direct investment, and
money management. The magazine also holds several awards ceremonies
throughout the year to recognize the winning financial institutions and companies.
2014 HBL - 'Most innovative Global Trade Finance' award
HBL received the 'Most Innovative GTFP (Global Trade Finance
Program)' award. The award was received at the International
Finance Corporation Annual Trade Conference in Paris where
126 issuing and 145 confirming multinational banks that were
present. Mr. Tariq Mateen - Head Financial Institutions
Division, gave a presentation showcasing the success of HBL
in the global trade financing business. The award was received
by Mr. Mateen and Mr. Anwar Zaidi – Head Operations. This
recognition has raised our profile among a large forum of
international banks and paved way for IFC to increase our
facility from USD 75 million to USD 100 million which has
helped us in creating liquidity in our international network
2014 - 'Best bank In Pakistan' Award
In October 2014, HBL received the ‘Best Bank in Pakistan’ award in recognition for
its continuous efforts in providing world class products and services to customers.
Award was received by Mr. Sultan Ali Allana - Chairman. The ceremony in
Washington was also attended by Mr. Zakir Mehmood - President & CEO, Mr.
Nauman Dar - Head International Banking and Mr. Tariq Mateen - Head Financial
Institutions Division.

Mr. Sultan Ali Allana (right) receiving the award
2014 HBL Milestones - 'Buzziest Brands' Awards
Revelation Inc, a Pakistan based brand Development Company, carried out a poll
among marketing and advertising representatives, as well as a panel of judges to
pick the most active brand in Pakistan. HBL was received the “Buzziest Brand”
award in the Banking and Financial Institutions Category. HBL was competing with
strong consumer brands like Olpers and Coca Cola yet accomplished third position
among top five brands in the entire advertising industry. The award was received by
Mr. Aly Mustansir - Head Marketing and Brand Management. The first two places
were awarded to telco brands, Telenor and Mobilink.

Recommendations
As we seen from the previous analysis of the financial statements I have realized
that that Habib Bank is performing very well since its inception. It is quite difficult to
give suggestion to improve the banking conditions Habib Bank Limited. As we know
that nothing is perfect, there is always a room for improvement, so I will recommend
following suggestions for HBL:
1) Employees Training programmes must be introduced on continuous
basis so that Employees have understanding with the latest
developments especially with the customers.
2) Bank should introduced incentive plans for employees on regular basis
so that if employees may work whole heartedly for the welfare of their
organization. While giving incentives qualification, work, experience,
hard work and such other factors must be considered.
3) Mismanagement of resources must be avoided as much as possible as
it decreases profit but also discourage hard worker and honest
employees.
4) Fresh graduates must be recruited. As the combination of Experienced
and fresh can produce better results and it will improve the efficiency of
management.
5) Habib Bank is going towards mobile banking but the problem is that a
common client has no idea of its usage due to lack of marketing. I
think that a proper marketing programme must be launched for client’s
awareness.
6) Banks different schemes must be conveyed to the targeted customers
so that to have a reasonable share in market.
7) Bank should help the society by providing interest free loans to the
Talented Students.
8) Online Banking should be introduced in all the branches.
9) To motivate the employees their remuneration / salaries should be
made at par with top tier Banks.
10)Aggressive publicity campaign must be introduced through press and
Electronic media for new products and scheme by initiating vigorous
marketing policy.
11)Bank should adopt such an induction plan that when a customer opens
his account with the bank he should be supplied with a booklet which
enables him to know the procedure of filing the cheques, pay-in-slip
etc. It will save a lot of time of the bank staff afterward during the
conduct of the account of that customer.
12)The attitude of the bankers with all of their customers is not the same;
they pay more attention and good service to some of the customers
and neglect a major portion of them. Some of the customers approach
to the bank officials and get their work done before others; it is not a
good practice. All the customers should be treated equally.
13)HBL should increase its communication with customers about the
terms and conditions of its different products and services.

Discussing a problem faced by the credit department &
recommendations for it:
Non-performing loans(NPL);
These are such loans which are no
more profitable for the bank or in other words those loans which fall into
the categories of bad debts are called NPL.
Classification of NPL:
We can classify NPLs into the following categories:
1. Substandard.
2. Doubtful.
3. Loss.
1. Substandard:
When markup amount remains outstanding from
day 1 to 89th
day the particular finance is marked
substandard on the 90th
day.
2. Doubtful:
When the markup amount remains outstanding from
91st
day to 179th
day then the particular finance is marked as
doubtful on the 180th
day.
3. Loss:
When the markup amount remains outstanding above
the 180th
day then the finance is marked as loss.
All the finances in which markup is stuck and fall in particular categories
are called classified amounts and are treated as NPL.
Remedies to avoid NPL:
Banks are taking special measures to avoid NPL
by applying different warning systems given by State Bank of Pakistan.
SBP has introduces early warning system which is applicable for all
commercial/scheduled banks. According to that system any account
which will fall in any of the above classification will be regularly
monitored and kept in continuous observation. More over these
accounts will be in system’s early warning category.

Glossary
GCUF: Government college university Faisalabad
D.D: Demand Draft
A/C: account
O.B: Other Bank
O.B.C Outward Bills Collection
P.L.S: Profit and Loss Account
Dr: debit
Cr: Credit
C.A: Current Account
F.L: Flexi loan
L.G: Letter of Guarantee
D.F: Demand Finance
L.C: Letter of Credit
R.F: Running Finance
F.A.P.C: Finance against Packing Credit
HBL Habib Bank Limited
ABL Allied Bank Limited
MCB Muslim Commercial Bank
NBP National Bank Limited
UBL United Bank Limited
NIFT National Institutional Facilitation
Technologies (pvt) LTD.
Bibliography
Material on these books, articles and websites has helped me a lot in preparation
this report
Books
 HBL Corporate Profile 2014
 HBL Annual Reports 2014 and 2009 first Quarter
Articles & Document
 BANKING SECTOR REFORMS IN PAKISTAN:

http://www.ishrathusain.iba.edu.pk/speaches/BANKING_SECTOR_REFORMS.pdf
 www.encyclopedia.com/doc/1G1-61864366.html
Websites
 www.hbl.com
 www.habibbankltd.com
 www.hblasset.com
 www.investopedia.com/articles/07/banking.asp
 wiki.answers.com/Q/Evolution_of_banking
Index
Annex A:
JOB CERTIFICATE
Annex B:
INDICATIVE RATES
Annex C:
ACCOUNT OPENING FORM
Annex D:
REMITTANCES APPLICATION
Annex E:
DEBIT CARD APPLICATION FORM
Annex F:
DEPOSIT SLIP
Annex G:
APPLICATION FORMS OF DIFFERENT BANK SCHEMES..

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