1.1 INTRODUCTION OF HBLIt is the prime Bank in country established in 1941 having a registered head office inKarachi. It was nationalized in 1974, but recently on 26th February 2004 it has beenprivatized by Government of Pakistan and is taken over by Aga Khan Fund forEconomicDevelopment (AKFED). They acquired 51 percent of shares of HBL.It is one of the largest Banks of Pakistan with 1439 branches and having total assets ofRs. 434,931,930,000.History of HBLThe first branch of HBL started functioning on 30th August, 1941 at Muhammad AliRoad Bombay, where Quaid-e-Azam Muhammad Ali Jinnah first of all opened hispersonal account.In 1942, on the desire of Quaid-e-Azam, Habib family migrated to Pakistan and later onshifted the Banks Head Office from Bombay to Karachi on 7th August, 1947 just oneweek prior to independence, to play its pivotal role in the development of this newly borncountry.At the time of independence, the areas which now constitute Pakistan were producingonly agricultural products raw material for indo-Pak subcontinent. Partially no industrieswere there to process the raw material, therefore the raw material was exported fromPakistan. There were 19 non-Indian foreign Banks which were engaged in the export ofcrops from Pakistan with only two Pakistani Banks i.e. HBL and the Australia Bank. Thecircumstances were completely un-certain. The confidence of the people had beenshakenby the un-friendly environment and till the time peace had not been restored, peoplewould naturally have been interested in other things.1.1.2 MISSIONTo be recognized as the leading financial institution of Pakistan and a dynamicinternational bank in the emerging markets, providing our customers with a premium setof innovative products and services, and granting superior value to our stakeholders –shareholders, customers and employees.1.1.3OBJECTIVES OF HBLFollowing are some of the main objectives of HBL.To earn profit for the Bank itself and for its shareholders.To promote and boost up business sector inside the country.To provide employment opportunities to people.
To help in development and industrialization of the country.To provide loan and advances to help out in self employment schemes.1.1.4SYMBOL OF HBLSymbol depictsBismillah ============Islamic Culture and ValuesSword ============== PowerLion================ As a symbol of strength1.1.5CORE VALUES OF HBLHBL is firmly grounded with a corporate philosophy that incorporates five solid valueswhich each individual associated with the bank abides by.4M. ISMAIL L1F07BBAM0001 UCP LAHORE126.96.36.199 HumilityHBL encourages a culture of mutual respect and treats both their team members andcustomers with humility and care.188.8.131.52 IntegrityFor them, integrity means a synergic approach towards abiding their core values. Unitedwith the force of shared values and integrity, they form a network of a well-integratedteam.184.108.40.206 MeritocracyAt every level, from selection to advancement, they have designed a consistent systemofhuman resource practices, based on objective criteria throughout all the layers of theorganization. HBL is therefore, able to achieve a specific level of performance at everylayer of the organization.220.127.116.11 TeamworkTheir team strives to become a cohesive and unified force, to offer the customer, aservice beyond his expectations. This force is derived from participative and collectiveendeavors, a common set of goals and a spirit to share the glory and the strength tofacefailures together.18.104.22.168 Culture of InnovationTheir aim is to be proactively responsive to new ideas, and to respect and reward theagents, leaders and creators of change2.1 Departments of HBLThere are few departments on which general or day to day banking of HBL composes.There details are as under:Deposit departmentClearing DepartmentsInland Remittance DepartmentBills DepartmentsAdvances DepartmentsCash departmentCD Department
Foreign Exchange Department2.1.2PRODUCTS OFFERED BY HBL22.214.171.124 Tele-printer serviceIntroduced in 1952, this system helped the Bank to improve its services.126.96.36.199 Rupee Traveler’s ChequesIt was introduced in 1957. Here the customers are provided the facility of encashment oftheir traveler’s cheques through any branch of the Bank.188.8.131.52 Small Factory Owner SchemeIn 1959 the Bank offered loans to small scale producers under the “small factory ownerscheme” in order to boost the economy of Pakistan.184.108.40.206 Foreign Tele printer ServiceIt was introduced in 1961. The idea behind this scheme was to provide quick andpromptBanking services to customers in foreign countries.220.127.116.11 Gift cheques schemesIt was launched in 1962. Under this scheme, the Bank provided customers withpreprintedcheques of various denominations which could be used to send gifts to their lovedone on various occasions.18.104.22.168 School BankingThis scheme was introduced in 1962 to provide Banking services to children in anumberof schools though out the country.9M. ISMAIL L1F07BBAM0001 UCP LAHORE22.214.171.124 “Drive in” BankingHBL established “Drive in” branches in 1962 at various major cities of the country wherethe customers could avail Banking services without getting down from their vehicles.126.96.36.199 Mobile BankingIt was introduced in 1962. The feature of this scheme is to provide Banking services tothe customers residing in the rural areas.188.8.131.52 Night safe schemeIn 1962 the Bank offered facility to their customers to deposit their valuables at night inspecified branches of the Bank.184.108.40.206 Computer accountsIn 1962 the Bank introduced computer accounts through which most of the accounts inhead office were computerized220.127.116.11 Computer Prize BondIt was introduced in 1966. It is a scheme through which prize could be declared for prizebond scheme.18.104.22.168 Credit card schemeIt was introduced in 1966 through which customers could get certain sum of money fromspecified branches. Many business organizations accepted payments through validcredit
cards.2.1.4AGENCY SERVICES TO THE CUSTOMERSHBL also provides agency services to its customers. Some of which are as follow:15M. ISMAIL L1F07BBAM0001 UCP LAHORE22.214.171.124Collection of chequesHBL pays and collects cheques on behalf of their customers, and for this it receivescommission form their account holders.126.96.36.199 Collection of dividendsThe Bank provides a very useful service by acting as an agent for its customers. Itarranges the collection of dividends on shares and securities held by its customers. Thecustomer is simply to inform the issuer of the securities that the interest on thesecuritiesis to be credited to his account in the Bank. Bank charges commission for the collectionof the dividends on behalf of account holders.188.8.131.52 Purchase and sale of securitiesHBL if authorized by the customers also makes purchase and sale of securities on thebehalf of its customers. Bank charges commission for the purchase or sale made by itsonbehalf on the customers.184.108.40.206 Execution of standing instructionHBL also executes the standing in case if it is ordered by the customers of the Bank todoso. These instructions are usually given in writing to Bank. The Bank debits and creditsthe accounts of its customer for the transactions carried out by the individual or firm.220.127.116.11 Transfer of FundsHBL, also transfers funds of the customers from one Bank to another Bank. If thetransferis within one station, they don’t charge any commission and even if they charge, theycharge on reduced rates.18.104.22.168 Acts as an agentHBL also acts as an agent, correspondent or representative of its customers at homeandabroad.16M. ISMAIL L1F07BBAM0001 UCP LAHORE22.214.171.124 General utility servicesHBL also performs a number of generally utility services to its customers which are asfollows:126.96.36.199 Foreign exchange BusinessHBL transacts foreign exchange business by discounting foreign bills of exchange andthus provides facilities for financing in foreign trade.2.1.6ORGANIZATION STRUCTUREA well-developed and properly coordinate structure is an important requirement for the
success of any organization. It provides the basic framework within which functions andprocedures are performed. Any organization needs a structure, which provides aframework for successful operations. The operation of an organization involves anumberof activities, which are related to decision making, and communication of thesedecisions.These activities must be well coordinated so that the goals of the organization areachieved successfully.18M. ISMAIL L1F07BBAM0001 UCP LAHORE188.8.131.52 STRUCTURE OF HBLAt present the Bank operates through one central and 23 Regional Offices and 1439branches, all over Pakistan. The president and Executives Committee look after theaffairs of the Bank. Each Regional Head Quarter is headed by a Chief Executive andassisted by General Manager Operations and General Manager Support Services. TheRegional Head Quarter controls the branches in their area.Overseas operations consist of 65 main branches, two affiliates, two representativeoffices and two subsidiaries.President, from Head Office at Karachi controls the officers of the Bank with the help ofthe senior management. Functional responsibilities of the Banks are broken into sevengroups known as1) International Operations Group2) Corporate Banking and Treasury Investment Group3) Retail Banking and Operation Group4) Finance, Audit and Administration Group5) Assets Remedial Management Group6) Credit Policy Group7) Corporate Bank, Financial Institutions and Project Finance GroupIn addition to the overall controlling authority, president also manages the InternationalOperations Group individually. While the Senior Executive Vice Presidents superviserest of the functional groups. Each Senior Executive Vice President is individuallyresponsible for the group which is assigned to him.At the level of provinces there are Regional Head Quarters headed by Regional ChiefExecutives (RCE). Each RCE is assisted by GM operations and GM Support Services.Branches are also controlled by the RCEs. Circle Offices of the past times have beenremoved to reduce Managerial Layers, which were working under the control of ZonalOffices. This happened as a result of policy of beginning new changes in theorganizational structure.184.108.40.206 Organizational Chart of HBLA chart defines the line of authority in an organization and its departmentation. It is asortof visual presentation of the organizational structure. It specifies the duties andresponsibilities of the personnel of the organization. The Organizational chart of HBL isgiven below.220.127.116.11 Organizational ChartChairman
PresidentBoard ofDirectorsSEVPInternationalOperationsSEVP CorporateBanking & TreasurySEVP RetailBanking &InformationTechnologySEVP Finance, Audit& AdministrationSEVP Asset RemedialManagementSEVP Credit PolicySEVP Corporate Banking,financial institute & ProjectFinance2.1.7ANALYSIS OF ORGANIZATIONAL STRUCTUREThe purpose of an organizational structure is to help in creating an environment forhuman performance. It is then, a management tool and not an end in its own. Althoughthe structure must define the task to be done, the rules so established must also bedesigned in the light of abilities and motivation of the human recourse available. Byanalyzing the organizational structure of HBL presence of the following elements can befound in its structure.18.104.22.168 Centralized Decision MakingBy looking at the organizational structure of HBL would be found that the structure atHBL is a critical one. All the decisions are made at the top management level and thesubordinates have to obey these decisions. This trend in the decision making shows apattern of rigidity in structure of HBL.22.214.171.124 Downward CommunicationCommunication is the process by which information is exchanged and understood bytwoor more people, usually with the interest to motivate or influence the behavior of othersinthe organization. Downward communication is the message and information sent fromtop management to subordinates in a downward direction. Managers can communicatedownward to the employees through speeches, massages in company publications,information leaflets, tucked into pay envelops material on bulletin boards, policy andprocedure mandates.The same pattern is followed at HBL. No doubt it’s a very traditional approach but it cancreate problems because it ignores the receiver of the communication because theissuer21of policies and procedures does not ensure communication. In reality may themessagescommunicated downward are not understood perfectly.
126.96.36.199 Chain of CommandThe chain of command is an unbroken line of authority that links all persons in anorganization and shows who reports to whom. By analyzing the organizational structureit can be found that there is a scalar principle followed with in the Bank because eachandevery person knows to whom can one report. The authority and responsibility fordifferent tasks and duties are different, as well as every one knows the successivelevelsof management all the way to the top.188.8.131.52 Authority and ResponsibilityThe chain of command illustrates the authority structure of HBL. Authority is the formaland legitimate right of the manger to make decisions, issues orders and allocatesresources to achieve organizational desired outcomes. By analyzing the chain ofcommand of HBL, one can come to the conclusion that, as there is scalar patternfollowed at the organizational setup of HBL therefore it is implied that everyone in hisposition knows that what is one’s authority and what is the responsibility and theauthority it allocated.184.108.40.206 DelegationDelegation is the process, which managers use to transfer the authority andresponsibilityto position below in the hierarchy. Most organizations today encourage managers todelegate authority to the lowest possible level to provide maximum flexibility to meetcustomer needs and adapts to the environment. But at HBL no such system prevails themanagers try to keep as much of the authority as they can and if some authority isdelegated it is sure that it will be misused22M. ISMAIL L1F07BBAM0001 UCP LAHORE4.1 SWOT ANALYSIS OF HBLHBL is considered to be a very sound bank in the financial circles. The bank where thecustomers can safely keep their money as long as they want.In SWOT analysis the best strategies accomplish in organization’s mission by:1. Exploiting opportunities and strengths.2. Neutralizing its threats and3. Avoiding its weaknesses.Following is a list of SWOT of HBL4.1.1StrengthsA skill or capability that enables HBL to conceive and implement its strategies.The officers of HBL are considered as one of the most able professionals in thebanking world.I observed that HBL employees interact with their clients as if they are theirpersonal friends and discuss about their problems as their own.HBL has got a reliable and easy to use internal computer system. Everyinformation regarding the transactions in customers’ deposits has beencomputerized.
HBL maintained its data properly.HBL has very good security system.HBL is the larger commercial bank in Pakistan with the network of over 1439domestic and international branches.Being the pioneer of banking in Pakistan, HBL is the oldest and is the richest inexperience.HBL focuses on consumer banking by lucrative schemes, products and servicessuiting best to the wants and demands of the customers.HBL has opened all its branches at commercial areas so that the customers orclients face no problems in reaching to the bank.27M. ISMAIL L1F07BBAM0001 UCP LAHOREThe band is always on the look to improve its services both to the domestic aswell as overseas customers.Human resources development and introduction of new technology towardsmodern banking.24 hours cash access and safe payment products for high value transaction.Having potential to encounter the competitive environment in the market.Veteran and experience private management group also involved in other interestslike, textile and cement industry.Customer enjoys the services at the residential localities.4.1.2WeaknessesHighest number of branches effecting the proper maintenance and difficulty inproviding same working environment at the each branchPoorer system of recovery of the system is a threat to bankruptcy.Lack of customer feed back.Low job satisfaction.Poor ATM’s ServiceInconsistency in efficiency and working atmosphere due to the largest ofbranches.Sense of insecurity in the employees serving at low profitable branches due to thedown sizing.Females feel uneasy in an environment among the male workers.Victim of political, legal and socio-cultural pressures.Lack of professionalism in the branch employees mostly.4.1.3OpportunitiesHuge untapped market potential in consumer bankingIn opportunity exist, in form of opening of ladies banking section within thebranch which is entirely a new idea and it will attract customer.28M. ISMAIL L1F07BBAM0001 UCP LAHORE
Opportunity for developing value added services combined with corporatebanking relationships, cash management services to large and medium sizedcorporate clients.Growing policies of government on business and commerce sector provide HBLopportunities to take advantages of these policies to meet efficiently with thebusiness people to solve their problems with the instant cash and financingfacilities.Govt. is taking very bold steps to promote IT in Pakistan. HBL has an opportunityto improve in technology.Large international network which principally focuses on trade finance withPakistan can be utilized to tap trade activities in other markets. In addition,services such as cross border / offshore financing for corporate customers can beenhanced.Customer feedback on different products and accounts has really improved thebank performance and encourage the atmosphere for other future policies.HBL also has an opportunity to expand its new technological advancement like;tele banking and internet banking facilities in order to serve the customer moreefficiently, speciallyE-banking facility is also a new opportunity which is a flourishing business inforeign countries and can also be here, if HBL takes the initiatives.Further reduction in intermediation costs possible, with improving technology.Due to efficient and veteran management group, HBL can also improve Ill andexpand its foreign operation successfully.Habib Bank Limited provide opportunity to utilize its skills and efficiencies inleasing business.4.1.4ThreatsAn area in the environment that increases the difficulties the organization’sachieving high performance.29M. ISMAIL L1F07BBAM0001 UCP LAHOREConsolidation in the banking sector resulting in increased competition.Shortage of trained and specialized staff at lower executive and officer levelsThe threat of inconsistency and government policy regarding to business andeconomics sectors, specially political and regional situation which makes theenvironment uncertain.Growing global technological advancement.Strict regulation by government over credit facilities to the customers as Ill as tomeet the prudential.Loss of confidence of overseas customers due to freezing of accounts.Facing more competition by foreign banks in the market.Foreign banks are flourishing in field of consumer financing.Also the increasing operation of private banks.Highly attractive and advance services by foreign banks to their customers.
5.1 CONCLUSION & RECOMMENDATIONS5.1.1CONCLUSIONHBL is clearly the first choice of every one who believe in qualitative approach ofbanking an environment of highly responsible people. Bank is enjoying a healthymarket share and taste of good status in terms of its operative features and customersupport. HBL is clearly the best bank operating in Pakistan. Personal loan is aSdistinguished feature of HBL experiencing a good reputation and reasonable markup with respect to prevailing market mark up with assurance of satisfaction andsupport. HBL has more customers as compare to other banks, if they given properattention to every customer then in few years it will be the leading bank of thecountry.30M. ISMAIL L1F07BBAM0001 UCP LAHORE5.1.2RECOMMENDATIONSThe management should try to decrease job insecurity among the employees.Training program should be started for internees and newly appointed employees.There should be transport facility for the employees.The number of employees should be increased in order to decrease the workload.The bank charges high service charges as compared to the other banks, so theseshould be lowered down.Surveys must be conducted regarding customer satisfaction level and allemployees of this dept. should look forward to getting feedback wheneverpossible.Adding of value added features that offer competitive advantage is also ameans of avoiding customer dissatisfaction.Quick response to customer queries is necessary to maintain a healthy relationshipwith the customer.Proper training of customer handling should be given to employees.Training workshops and coaching clinics should be considered as an option thatwould provide adequate results.31M. ISMAIL L1F07BBAM0001 UCP LAHORE