CH NO: 1 BRIEF HISTORY OF HBL:

1.1.1Brief History of HBL

HBL at its present state has a long and rich history of deeds and sacrifices. All this has been
possible on the account of sustained efforts. The first branch of HBL started functioning on 30
th August, 1941 at Muhammad Ali Road Bombay, where Quaid-e-Azam Muhammad Ali
Jinnah first of all opened his Personal account. Mohammad Ali Habib was a man of stern and
persistent will. God. Almighty had bestowed him with extra ordinary capabilities.
He was devoted to his Bank with a view to take his share in the uplift of the strife-torn
and devastated Muslim Community. At the time of its inception, the Bank's total paid up
capital was Rs.2.5 million but it is evident from the following data that the Bank experienced a
steep rise in the business in a few years. In 1942, on the desire of Quaid-e-Azam, Habib family
migrated to Pakistan and later on shifted the Bank's Head Office from Bombay to Karachi on 7
th August, 1947 just one week prior to independence, to play its pivotal role in the
development of this newly born country. At the time of independence, the areas which now
constitute Pakistan were producing only agricultural products raw material for indo-Pak
subcontinent. Partially no industries were there to process the raw material, therefore the raw
material was exported from Pakistan. There were 19 non-Indian foreign Banks which were
engaged in the export of crops from Pakistan with only two Pakistani Banks i.e. HBL and the
Australia Bank. The circumstances were completely un-certain. The confidence of the people
had been shaken by the un-friendly environment and till the time peace had not been restored,
people would naturally have been interested in other things. The nation was quite young with
extreme scarcity of resources and these definitely added to the difficulties of the govt., to run
its own Banking system immediately. Following the announcement of the independence plan
in June, 1947, the Hindus residing in the territories now comprising Pakistan started
transferring their assets to India and vice versa. The Banks included those having their
registered offices in Pakistan, transferred them to India in order to bring a total collapse of the
new state. It had been decided that the Reserve Bank of India would continue to function in
Pakistan so that the problem of demand and time liabilities, coinage, currencies, exchange rate
etc be settled between India and Pakistan and the Indian Notes would continue to be legal
tender in Pakistan till 30 th September, 1948. Again due to certain differences between Indian
Pakistan, the Indian Govt., withheld Pakistan's share of Rs.75 core in forward and subscribed
heavily to the Govt. of Pakistan to the tide over the crises, Payment was made to the Govt., by
the Bank at a very nominal rate of interest, even before the actual issue of securities. At a time
when this newly born country was at whirlwind of crises, it was HBL which fulfilled
generously the financial needs of all its sectors, paid salaries to the employees of all Govt.
departments, helped in the establishment of State Bank of Pakistan which the Quaid-e-Azam
inaugurated on July 1 st, 1948. HBL after partition opened its branches throughout Pakistan to
provide finance and other facilities to the business community. In association with HBL, the
Govt. sponsored Pakistan Finance Corporation Limited for financing of cotton. The Bank
helped handsomely in the construction of WARSAK DAM PROJECT, WAPDA, +ACY-
K.D.A. by provided finance and other facilities. Another innovation introduced by HBL is the
evening Banking cash long after the crossing of normal Banking hours. It was also the first in
making available such new facilities as Gift Cheques, Rupee Traveler+AMIAtg-s Cheques,

1
Credit Card System, short term and long term schemes for small businessmen. 1 . 1 . 2
MISSION To be recognized as the leading financial institution of Pakistan and a dynamic
international bank in the emerging markets, providing our customers with a premium set of
innovative products and services, and granting superior value to our stakeholders +AMIAsQ-
shareholders, customers and employees. OR Opening new horizons and fresh perspectives of
trust, dependability and service through 1425 domestic branches and 112 overseas offices with
a comprehensive range of financial products.

1.1.3OBJECTIVES OF HBL
Following are some of the main objectives of HBL. To earn profit for the Bank itself
and for its shareholders. To promote and boost up business sector inside the country. To
provide employment opportunities to people. To help in development and industrialization of
the country. To provide loan and advances to help out in self employment schemes.

1.1.4SYMBOL OF HBL
Symbol depicts Bismillah+AD0- +AD0- +AD0- +AD0- +AD0- +AD0- +AD0- +AD0-
+AD0- +AD0- +AD0- +AD0-Islamic Culture and Values Sword+AD0- +AD0- +AD0-
+AD0- +AD0- +AD0- +AD0- +AD0- +AD0- +AD0- +AD0- +AD0- +AD0- +AD0- Power
Lion+AD0APQA9AD0APQA9AD0APQA9AD0APQA9AD0APQA9AD0- As a symbol of
strength

1.1.5CORE VALUES OF HBL

HBL is firmly grounded with a corporate philosophy that incorporates five solid values
which each individual associated with the bank abides by.

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

1.1.5.2 Integrity
For them, integrity means a synergic approach towards abiding their core values.
United with the force of shared values and integrity, they form a network of a well-integrated
team.

1.1.5.3 Meritocracy
At every level, from selection to advancement, they have designed a consistent system
of human resource practices, based on objective criteria throughout all the layers of the
organization. HBL is therefore, able to achieve a specific level of performance at every layer
of the organization.

1.1.5.4 Teamwork
Their team strives to become a cohesive and unified force, to offer the customer, a
service beyond his expectations. This force is derived from participative and collective

2
endeavors, a common set of goals and a spirit to share the glory and the strength to face
failures together.

1.1.5.5 Culture of Innovation

Their aim is to be proactively responsive to new ideas, and to respect and reward the
agents, leaders and creators of change

1.1.6CORPORATE BANKING
Only local bank with special focus on Corporate Banking with a presence in all major
locations through out the country, offering full range of Banking products / services and one
window interface through designated Relationship Managers. Our large equity base allows us
to take longer per party exposures to meet the needs of the largest corporate +ACY- our
extensive local +ACY- foreign network allows us to imperiously service our clients. Corporate
manages well diversified portfolio, and include most of the top tier names of the market.
Corporate Banking offers tailor made products / solutions as required by corporate customers
which includes:

1.1.6.1 Key Features of Corporate Banking

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

CH NO: 2 DEPARTMENT OF HBL:

2.1 Departments of HBL

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

2.1.1FUNCTIONS OF DIFFERENT DEPARTMENTS OF HBL

The basic functions of different departments HBL are as follows. Accepting deposits Making
Loans and advance.

2.1.1.1 Accepting Deposits

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

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2.1.1.1.1
Current Deposits
This type of account is often maintained by the business Current deposits are those deposits

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

2.1.1.1.2 Profit and loss sharing account (Saving)

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

2.1.1.1.3 Fixed deposits

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

2.1.1.2 Making Loans and advances

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

2.1.1.2.1 Demand Finances

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

2.1.1.2.2 Running Finance

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

2.1.1.2.3 Over Draft

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

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

our stated objective of being a premier emerging market Bank.

2.1.2PRODUCTS OFFERED BY HBL

2.1.2.1 Tele-printer service
Introduced in 1952, this system helped the Bank to improve its services.

2.1.2.2 Rupee Traveler+AMIAtg-s Cheques

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

2.1.2.3 Small Factory Owner Scheme

In 1959 the Bank offered loans to small scale producers under the +AMIAsw-small factory
owner scheme+AMIAtA- in order to boost the economy of Pakistan.

2.1.2.4 Foreign Tele printer Service

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

2.1.2.5 Gift cheques schemes

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

2.1.2.6 School Banking

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

2.1.2.7 +AMIAsw-Drive in+AMIAtA- Banking

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

2.1.2.8 Mobile Banking

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

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

2.1.2.10 Computer accounts

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

2.1.2.11 Computer Prize Bond

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

2.1.2.12 Credit card scheme

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

cards.

2.1.2.13 Infant Saving Scheme

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

2.1.2.14 Courtesy Card

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

2.1.2.15 Deposit growth certificate

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

2.1.2.16 Special five years deposit certificate

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

2.1.2.17 Dollar traveler cheques

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

2.1.2.18 Haj accidental death scheme

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

2.1.2.19 Auto Cash Teller Machine

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

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

2.1.2.21 Gold card system

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

2.1.2.22 Muhafiz Rupee Traveler Cheque

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

2.1.2.23 Distinct Properties Of Muhafiz

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

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

2.1.3.1Some characteristics of House Finance of HBL Are:

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

2.1.3.2Auto Finance
Habib Bank Auto Finance, a lease product, designed to offer you an economical way for
owing the car of your choice. Some characteristics are: Lowest Down Payment Lowest
monthly rentals Fixed repayment tenures of 36,48and 60 months. Lowest Processing charges
Insurance premium rates as low as 3+ACU- World wide personal accidental insurance
coverage of up to Rs. 200,000. All locally assembled new cars can be financed through this
scheme .

2.1.3.4 HBL Flexi Loan:

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

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

2.1.3.6 HBL Rescue

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

2.1.3.7
For Personal Loans
Maximum loan up to Rs. 1,000,000 Choice of 12,24,36,48 and 60 months for payback Lowest
Mark- up Quick processing Full Credit Life insurance Available from over 400 designated
branches throughout Pakistan

2.1.3.8 For Credit Card Payments

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

2.1.3.9 Auto Cash (Debit/ ATM Card)

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

2.1.3.10 Habib Bank icard as your Debit Card

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

2.1.3.11 HBL iCard as your ATM Card

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

2.1.3.12 HBL Easy AccessOnline access to banking services at over two hundred branches in
Pakistan

2.1.3.13 HBL Fast Transfer

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

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2.1.3.14 Haryali Agricultural Loans
It entails all kind of agricultural finance facility for the rural market.

2.1.3.15 HBL E-Bank

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

2.1.3.16 SWIFT
The bank is a major SWIFT user in 70 domestic branches +ACY- 21 overseas countries /
locations in the network. SWIFT services are being used for funds transfer, remittances

and trade related transactions, resulting in major improvement in payment processing

capability for enhanced customer service.

2.1.4AGENCY SERVICES TO THE CUSTOMERS

HBL also provides agency services to its customers. Some of which are as follow:

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

2.1.4.2 Collection of dividends

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

2.1.4.3 Purchase and sale of securities

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

2.1.4.4 Execution of standing instruction

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

2.1.4.5 Transfer of Funds

HBL, also transfers funds of the customers from one Bank to another Bank. If the transfer is
within one station, they don+AMIAtg-t charge any commission and even if they charge, they
charge on reduced rates.

2.1.4.6 Acts as an agent

9
HBL also acts as an agent, correspondent or representative of its customers at home and
abroad.

2.1.4.7 General utility services

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

2.1.4.8 Foreign exchange Business

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

2.1.4.9 Acts as a referee

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

2.1.4.10

Issuance of traveler+AMIAtg-s cheques

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

2.1.4.11 Collection of Utility Bill

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

2.1.4.12 Locker Facility

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

2.1.5Operational Policy
The operational policies of HBL deal with the method of provision of better services to its
customer. Through the introduction of new schemes as means of satisfaction for their
customers, the operational policy of HBL can be divided into two spears. Domestic operations.
International operations.

2.1.5.1 Domestic Operations

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

2.1.5.2 International Operations

HBL+AMIAtg-s overseas branches are continuously rendering satisfactory services and are
also contributing to the channeling home remittances of Pakistan working abroad.
HBL+AMIAtg-s international network comprises of 60 offices in 26 countries, operating in

10
USA, Europe, UK, Middle Ease, Asian Pacific Region and Africa. It is also the largest
Banking in financial services provider in Pakistan. HBL concentrates on markets and business
they understood. Through a global network, the Bank provide a comprehensive range of
financial services, personal, commercial, trade services, cash management, treasury/ capital
market services, and private Banking. HBL strives to provide high quality product through
efficient delivery system and excellent customer services. In this way, HBL will grow and
achieve

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

2.1.6.1 STRUCTURE OF HBL

At present the Bank operates through one central and 23 Regional Offices and 1439 branches,
all over Pakistan. The president and Executives Committee look after the affairs of the Bank.
Each Regional Head Quarter is headed by a Chief Executive and assisted by General Manager
Operations and General Manager Support Services. The Regional Head Quarter controls the
branches in their area. Overseas operations consist of 65 main branches, two affiliates, two
representative offices and two subsidiaries. President, from Head Office at Karachi controls
the officers of the Bank with the help of

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

2.1.6.2 Organizational Chart of HBL

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

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

2.1.7.1 Centralized Decision Making

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

2.1.7.2 Downward Communication

Communication is the process by which information is exchanged and understood by two or
more people, usually with the interest to motivate or influence the behavior of others in the
organization. Downward communication is the message and information sent from top
management to subordinates in a downward direction. Managers can communicate downward
to the employees through speeches, massages in company publications, information leaflets,
tucked into pay envelops material on bulletin boards, policy and procedure mandates. The
same pattern is followed at HBL. No doubt it+AMIAtg-s a very traditional approach but it can
create problems because it ignores the receiver of the communication because the issuer of
policies and procedures does not ensure communication. In reality may the messages
communicated downward are not understood perfectly.

2.1.7.3 Chain of Command

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

2.1.7.4 Authority and Responsibility

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

2.1.7.5 Delegation
Delegation is the process, which managers use to transfer the authority and responsibility to
position below in the hierarchy. Most organizations today encourage managers to delegate
authority to the lowest possible level to provide maximum flexibility to meet customer needs
and adapts to the environment. But at HBL no such system prevails the

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managers try to keep as much of the authority as they can and if some authority is delegated it
is sure that it will be misused

3.1 PERSONAL EXPERIENCE DURING INTERNSHIP

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

3.1.1Issuance of Cheque Books

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

3.1.2Filling of an Account Opening form

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

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

3.1.3.1 Inward remittances

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

3.1.3.2 Outward remittances

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

13
advises against the account holder+AMIAtg-s accounts. There are various tools of remittances
to the customers who want the facility of remittance.

3.1.4 Demand Draft

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

3.1.5 Pay Order

Pay orders are mostly used when a customer wants to pay someone who is in the same

city as he uses and who prefers non cash payment for any service or goods that he/she sold.
This remittance facility is providing to the general public as a whole.

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

3.1.7 Collection of Utility Bills

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

3.1.8 Pensions Payment

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

3.1.9 Payment of Salaries

This is one the distinct features of HBL, that it provides services to the Govt. departments to
distribute their salaries every month. The prominent examples include ARMY, RANGERS,
POLICE, EDUCATION, and PUBLIC WORKS ETC.

3.1.10 Call Deposit and Payment Order

14
This is another mode of remittance facility being provided by HBL. When the bank makes any
private transaction locally it does not make the demand draft but it makes the payment through
payment order. When the bank makes any contract it make payment through call deposits. Call
deposit receipts are mainly used for payments concerning application for tenders.

3.1.11 Deposits Section

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

3.1.12 Deposit through Cash

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

3.1.13 Deposit through a Cheque

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

4.1 SWOT ANALYSIS OF HBL

HBL is considered to be a very sound bank in the financial circles. The bank where the
customers can safely keep their money as long as they want. In SWOT analysis the best
strategies accomplish in organization+AMIAtg-s mission by: 1. Exploiting opportunities and
strengths. 2. Neutralizing its threats and 3. Avoiding its weaknesses. Following is a list of
SWOT of HBL

4.1.1Strengths
A skill or capability that enables HBL to conceive and implement its strategies. The officers of
HBL are considered as one of the most able professionals in the banking world. I observed
that HBL employees interact with their clients as if they are their personal friends and discuss
about their problems as their own. HBL has got a reliable and easy to use internal computer
system. Every information regarding the transactions in customers+AMIAtg- deposits has
been computerized. HBL maintained its data properly. HBL has very good security system.
HBL is the larger commercial bank in Pakistan with the network of over 1439 domestic and
international branches. Being the pioneer of banking in Pakistan, HBL is the oldest and is the
richest in experience. HBL focuses on consumer banking by lucrative schemes, products and
services suiting best to the wants and demands of the customers. HBL has opened all its
branches at commercial areas so that the customers or clients face no problems in reaching to
the bank. The band is always on the look to improve its services both to the domestic as well
as overseas customers. Human resources development and introduction of new technology
towards modern banking. 24 hours cash access and safe payment products for high value

15
transaction. Having potential to encounter the competitive environment in the market. Veteran
and experience private management group also involved in other interests like, textile and
cement industry. Customer enjoys the services at the residential localities.

4.1.2Weaknesses
Highest number of branches effecting the proper maintenance and difficulty in providing same
working environment at the each branch Poorer system of recovery of the system is a threat to
bankruptcy. Lack of customer feed back. Low job satisfaction. Poor ATM+AMIAtg-s Service
Inconsistency in efficiency and working atmosphere due to the largest of branches.

Sense of insecurity in the employees serving at low profitable branches due to the down
sizing. Females feel uneasy in an environment among the male workers. Victim of political,
legal and socio-cultural pressures .Lack of professionalism in the branch employees mostly.

4.1.3Opportunities
Huge untapped market potential in consumer banking In opportunity exist, in form of opening
of ladies banking section within the branch which is entirely a new idea and it will attract
customer. Opportunity for developing value added services combined with corporate banking
relationships, cash management services to large and medium sized corporate clients. Growing
policies of government on business and commerce sector provide HBL opportunities to take
advantages of these policies to meet efficiently with the business people to solve their
problems with the instant cash and financing facilities. Govt. is taking very bold steps to
promote IT in Pakistan. HBL has an opportunity to improve in technology. Large international
network which principally focuses on trade finance with Pakistan can be utilized to tap trade
activities in other markets. In addition, services such as cross border / offshore financing for
corporate customers can be enhanced. Customer feedback on different products and accounts
has really improved the bank performance and encourage the atmosphere for other future
policies. HBL also has an opportunity to expand its new technological advancement
like+ADs- tele banking and internet banking facilities in order to serve the customer more
efficiently, specially E-banking facility is also a new opportunity which is a flourishing
business in foreign countries and can also be here, if HBL takes the initiatives. Further
reduction in intermediation costs possible, with improving technology. Due to efficient and
veteran management group, HBL can also improve Ill and expand its foreign operation
successfully. Habib Bank Limited provide opportunity to utilize its skills and efficiencies in
leasing business.

4.1.4Threats
An area in the environment that increases the difficulties the organization+AMIAtg-s
achieving high performance. Consolidation in the banking sector resulting in increased
competition. Shortage of trained and specialized staff at lower executive and officer levels The
threat of inconsistency and government policy regarding to business and economics sectors,
specially political and regional situation which makes the environment uncertain. Growing
global technological advancement. Strict regulation by government over credit facilities to the
customers as Ill as to meet the prudential. Loss of confidence of overseas customers due to
freezing of accounts. Facing more competition by foreign banks in the market. Foreign banks

16
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 +ACY- RECOMMENDATIONS

5.1.1CONCLUSION

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

5.1.2RECOMMENDATIONS
The management should try to decrease job insecurity among the employees. Training
program should be started for internees and newly appointed employees. There should be
transport facility for the employees. The number of employees should be increased in order to
decrease the workload. The bank charges high service charges as compared to the other banks,
so these should be lowered down. Surveys must be conducted regarding customer satisfaction
level and all employees of this dept. should look forward to getting feedback whenever
possible. Adding of value added features that offer competitive advantage is also a means of
avoiding customer dissatisfaction. Quick response to customer queries is necessary to maintain
a healthy relationship with the customer. Proper training of customer handling should be given
to employees. Training workshops and coaching clinics should be considered as an option that
would provide adequate results.

Shehryar Khan Roll +ACM-w582039 Reg +ACM-07NNA0010 1.1 INTRODUCTION OF

HBL
It is the prime Bank in country established in 1941 having a registered head office in Karachi.
It was nationalized in 1974, but recently on 26 th February 2004 it has been Privatized by
Government of Pakistan and is taken over by Aga Khan Fund for Economic Development
(AKFED). They acquired 51 percent of shares of HBL. It is one of the largest Banks of
Pakistan with 1439 branches and having total assets of Rs. 4 3 4 , 9 3 1 , 9 3 0 , 0 0 0 .

1.1.1Brief History of HBL

HBL at its present state has a long and rich history of deeds and sacrifices. All this has been
possible on the account of sustained efforts. The first branch of HBL started functioning on 30
th August, 1941 at Muhammad Ali Road Bombay, where Quaid-e-Azam Muhammad Ali
Jinnah first of all opened his Personal account. Mohammad Ali Habib was a man of stern and
persistent will. God. Almighty had bestowed him with extra ordinary capabilities. He was
devoted to his Bank with a view to take his share in the uplift of the strife-torn and devastated

17
Muslim Community. At the time of its inception, the Bank's total paid up capital was Rs.2.5
million but it is evident from the following data that the Bank experienced a steep rise in the
business in a few years. In 1942, on the desire of Quaid-e-Azam, Habib family migrated to
Pakistan and later on shifted the Bank's Head Office from Bombay to Karachi on 7 th August,
1947 just one week prior to independence, to play its pivotal role in the development of this
newly born country. At the time of independence, the areas which now constitute Pakistan
were producing only agricultural products raw material for indo-Pak subcontinent. Partially no
industries were there to process the raw material, therefore the raw material was exported from
Pakistan. There were 19 non-Indian foreign Banks which were engaged in the export of crops
from Pakistan with only two Pakistani Banks i.e. HBL and the Australia Bank. The
circumstances were completely un-certain. The confidence of the people had been shaken by
the un-friendly environment and till the time peace had not been restored, people would
naturally have been interested in other things. The nation was quite young with extreme
scarcity of resources and these definitely added to the difficulties of the govt., to run its own
Banking system immediately. Following the announcement of the independence plan in June,
1947, the Hindus residing in the territories now comprising Pakistan started transferring their
assets to India and vice versa. The Banks included those having their registered offices in
Pakistan, transferred them to India in order to bring a total collapse of the new state. It had
been decided that the Reserve Bank of India would continue to function in Pakistan so that the
problem of demand and time liabilities, coinage, currencies, exchange rate etc be settled
between India and Pakistan and the Indian Notes would continue to be legal tender in Pakistan
till 30 th September, 1948. Again due to certain differences between Indian Pakistan, the
Indian Govt., withheld Pakistan's share of Rs.75 core in forward and subscribed heavily to the
Govt. of Pakistan to the tide over the crises, Payment was made to the Govt., by the Bank at a
very nominal rate of interest, even before the actual issue of securities. At a time when this
newly born country was at whirlwind of crises, it was HBL which fulfilled generously the
financial needs of all its sectors, paid salaries to the employees of all Govt. departments,
helped in the establishment of State Bank of Pakistan which the Quaid-e-Azam inaugurated on
July 1 st, 1948. HBL after partition opened its branches

throughout Pakistan to provide finance and other facilities to the business community. In
association with HBL, the Govt. sponsored Pakistan Finance Corporation Limited for
financing of cotton. The Bank helped handsomely in the construction of WARSAK DAM
PROJECT, WAPDA, +ACY- K.D.A. by provided finance and other facilities. Another
innovation introduced by HBL is the evening Banking cash long after the crossing of normal
Banking hours. It was also the first in making available such new facilities as Gift Cheques,
Rupee Traveler+AMIAtg-s Cheques, Credit Card System, short term and long term schemes
for small businessmen. 1 . 1 . 2 MISSION To be recognized as the leading financial institution
of Pakistan and a dynamic international bank in the emerging markets, providing our
customers with a premium set of innovative products and services, and granting superior value
to our stakeholders +AMIAsQ- shareholders, customers and employees. OR Opening new
horizons and fresh perspectives of trust, dependability and service through 1425 domestic
branches and 112 overseas offices with a comprehensive range of financial products.

1.1.3OBJECTIVES OF HBL

18
 Following are some of the main objectives of HBL. To earn profit for the Bank itself
and for its shareholders. To promote and boost up business sector inside the country. To
provide employment opportunities to people. To help in development and industrialization of
the country. To provide loan and advances to help out in self employment schemes.

1.1.4SYMBOL OF HBL
Symbol depicts Bismillah+AD0- +AD0- +AD0- +AD0- +AD0- +AD0- +AD0- +AD0-
+AD0- +AD0- +AD0- +AD0-Islamic Culture and Values Sword+AD0- +AD0- +AD0-
+AD0- +AD0- +AD0- +AD0- +AD0- +AD0- +AD0- +AD0- +AD0- +AD0- +AD0- Power
Lion+AD0APQA9AD0APQA9AD0APQA9AD0APQA9AD0APQA9AD0- As a symbol of
strength

1.1.5CORE VALUES OF HBL

HBL is firmly grounded with a corporate philosophy that incorporates five solid values which
each individual associated with the bank abides by.

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

1.1.5.2 Integrity
For them, integrity means a synergic approach towards abiding their core values. United with
the force of shared values and integrity, they form a network of a well-integrated team.

1.1.5.3 Meritocracy
At every level, from selection to advancement, they have designed a consistent system of
human resource practices, based on objective criteria throughout all the layers of the
organization. HBL is therefore, able to achieve a specific level of performance at every layer
of the organization.

1.1.5.4 Teamwork
Their team strives to become a cohesive and unified force, to offer the customer, a service
beyond his expectations. This force is derived from participative and collective endeavors, a
common set of goals and a spirit to share the glory and the strength to face failures together.

1.1.5.5 Culture of Innovation

Their aim is to be proactively responsive to new ideas, and to respect and reward the agents,
leaders and creators of change

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

19
extensive local +ACY- foreign network allows us to imperiously service our clients. Corporate
manages well diversified portfolio, and include most of the top tier names of the market.
Corporate Banking offers tailor made products / solutions as required by corporate customers
which includes:

1.1.6.1 Key Features of Corporate Banking

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

2.1 Departments of HBL

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

2.1.1FUNCTIONS OF DIFFERENT DEPARTMENTS OF HBL

The basic functions of different departments HBL are as follows. Accepting deposits Making
Loans and advance.

2.1.1.1 Accepting Deposits

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

2.1.1.1.1
Current Deposits
This type of account is often maintained by the business Current deposits are those deposits

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

2.1.1.1.2 Profit and loss sharing account (Saving)

20
Saving deposits or PLS are those accounts on which Bank offers a lower rate of interest. After
the Islamization of the Banking system in the country it has been given the name of PLS
saving account. The Bank undertakes to repay deposits on demand up to a certain amount.

2.1.1.1.3 Fixed deposits

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

2.1.1.2 Making Loans and advances

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

2.1.1.2.1 Demand Finances

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

2.1.1.2.2 Running Finance

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

2.1.1.2.3 Over Draft

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

2.1.1.2.4 Discounting bills of exchange

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

our stated objective of being a premier emerging market Bank.

21
2.1.2PRODUCTS OFFERED BY HBL
2.1.2.1 Tele-printer service
Introduced in 1952, this system helped the Bank to improve its services.

2.1.2.2 Rupee Traveler+AMIAtg-s Cheques

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

2.1.2.3 Small Factory Owner Scheme

In 1959 the Bank offered loans to small scale producers under the +AMIAsw-small factory
owner scheme+AMIAtA- in order to boost the economy of Pakistan.

2.1.2.4 Foreign Tele printer Service

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

2.1.2.5 Gift cheques schemes

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

2.1.2.6 School Banking

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

2.1.2.7 +AMIAsw-Drive in+AMIAtA- Banking

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

2.1.2.8 Mobile Banking

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

2.1.2.9 Night safe scheme

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

2.1.2.10 Computer accounts

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

2.1.2.11 Computer Prize Bond

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

22
2.1.2.12 Credit card scheme
It was introduced in 1966 through which customers could get certain sum of money from
specified branches. Many business organizations accepted payments through valid credit

cards.

2.1.2.13 Infant Saving Scheme

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

2.1.2.14 Courtesy Card

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

2.1.2.15 Deposit growth certificate

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

2.1.2.16 Special five years deposit certificate

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

2.1.2.17 Dollar traveler cheques

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

2.1.2.18 Haj accidental death scheme

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

2.1.2.19 Auto Cash Teller Machine

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

2.1.2.20 Transport Finance Scheme

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

2.1.2.21 Gold card system

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

2.1.2.22 Muhafiz Rupee Traveler Cheque

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

23
2.1.2.23 Distinct Properties Of Muhafiz
It can be issued from more than 700 branches all over Pakistan. Muhafiz provides the facility
of payment in all branches of HBL. There is no commission and fee charge for purchase of
Muhafiz HBL keeps alive the tradition of +AMIAsw-Serve you better+AMIAtA- charges
nothing for the purchase and sale of Muhafiz.

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

2.1.3.1Some characteristics of House Finance of HBL Are:

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

2.1.3.2Auto Finance
Habib Bank Auto Finance, a lease product, designed to offer you an economical way for
owing the car of your choice. Some characteristics are: Lowest Down Payment Lowest
monthly rentals Fixed repayment tenures of 36,48and 60 months. Lowest Processing charges
Insurance premium rates as low as 3+ACU- World wide personal accidental insurance
coverage of up to Rs. 200,000. All locally assembled new cars can be financed through this
scheme .

2.1.3.4 HBL Flexi Loan:

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

2.1.3.5 Life Style

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

2.1.3.6 HBL Rescue

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

24
2.1.3.7
For Personal Loans
Maximum loan up to Rs. 1,000,000 Choice of 12,24,36,48 and 60 months for payback Lowest
Mark- up Quick processing Full Credit Life insurance Available from over 400 designated
branches throughout Pakistan

2.1.3.8 For Credit Card Payments

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

2.1.3.9 Auto Cash (Debit/ ATM Card)

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

2.1.3.10 Habib Bank icard as your Debit Card

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

2.1.3.11 HBL iCard as your ATM Card

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

2.1.3.12 HBL Easy AccessOnline access to banking services at over two hundred branches in
Pakistan

2.1.3.13 HBL Fast Transfer

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

2.1.3.14 Haryali Agricultural Loans

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

2.1.3.15 HBL E-Bank

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

2.1.3.16 SWIFT
The bank is a major SWIFT user in 70 domestic branches +ACY- 21 overseas countries /
locations in the network. SWIFT services are being used for funds transfer, remittances

25
and trade related transactions, resulting in major improvement in payment processing
capability for enhanced customer service.

2.1.4AGENCY SERVICES TO THE CUSTOMERS

HBL also provides agency services to its customers. Some of which are as follow:

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

2.1.4.2 Collection of dividends

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

2.1.4.3 Purchase and sale of securities

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

2.1.4.4 Execution of standing instruction

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

2.1.4.5 Transfer of Funds

HBL, also transfers funds of the customers from one Bank to another Bank. If the transfer is
within one station, they don+AMIAtg-t charge any commission and even if they charge, they
charge on reduced rates.

2.1.4.6 Acts as an agent

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

2.1.4.7 General utility services

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

2.1.4.8 Foreign exchange Business

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

2.1.4.9 Acts as a referee

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

2.1.4.10

Issuance of traveler+AMIAtg-s cheques

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

2.1.4.11 Collection of Utility Bill

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

2.1.4.12 Locker Facility

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

2.1.5Operational Policy
The operational policies of HBL deal with the method of provision of better services to its
customer. Through the introduction of new schemes as means of satisfaction for their
customers, the operational policy of HBL can be divided into two spears. Domestic operations.
International operations.

2.1.5.1 Domestic Operations

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

2.1.5.2 International Operations

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

2.1.6ORGANIZATION STRUCTURE
A well-developed and properly coordinate structure is an important requirement for the
success of any organization. It provides the basic framework within which functions and
procedures are performed. Any organization needs a structure, which provides a framework

27
for successful operations. The operation of an organization involves a number of activities,
which are related to decision making, and communication of these decisions. These activities
must be well coordinated so that the goals of the organization are achieved successfully.

2.1.6.1 STRUCTURE OF HBL

At present the Bank operates through one central and 23 Regional Offices and 1439 branches,
all over Pakistan. The president and Executives Committee look after the affairs of the Bank.
Each Regional Head Quarter is headed by a Chief Executive and assisted by General Manager
Operations and General Manager Support Services. The Regional Head Quarter controls the
branches in their area. Overseas operations consist of 65 main branches, two affiliates, two
representative offices and two subsidiaries. President, from Head Office at Karachi controls
the officers of the Bank with the help of

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

2.1.6.2 Organizational Chart of HBL

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

2.1.7ANALYSIS OF ORGANIZATIONAL STRUCTURE

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

2.1.7.1 Centralized Decision Making

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

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2.1.7.2 Downward Communication
Communication is the process by which information is exchanged and understood by two or
more people, usually with the interest to motivate or influence the behavior of others in the
organization. Downward communication is the message and information sent from top
management to subordinates in a downward direction. Managers can communicate downward
to the employees through speeches, massages in company publications, information leaflets,
tucked into pay envelops material on bulletin boards, policy and procedure mandates. The
same pattern is followed at HBL. No doubt it+AMIAtg-s a very traditional approach but it can
create problems because it ignores the receiver of the communication because the issuer of
policies and procedures does not ensure communication. In reality may the messages
communicated downward are not understood perfectly.

2.1.7.3 Chain of Command

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

2.1.7.4 Authority and Responsibility

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

2.1.7.5 Delegation
Delegation is the process, which managers use to transfer the authority and responsibility to
position below in the hierarchy. Most organizations today encourage managers to delegate
authority to the lowest possible level to provide maximum flexibility to meet customer needs
and adapts to the environment. But at HBL no such system prevails the

managers try to keep as much of the authority as they can and if some authority is delegated it
is sure that it will be misused

3.1 PERSONAL EXPERIENCE DURING INTERNSHIP

I started my internship at HBL liaqat road branch. Basically HBL hired internees for
marketing of its new product HBL Phone Banking. For this purposes HBL trained internees
and sent them in different branches of Islamabad and Rawalpindi region. First few days I
worked on HBL Phone Banking. HBL provides Phone banking for its account holder. During
my work I meet different type of account holders. Many interesting things came to know about
account holder. For instance, I meet one of the account holders, I told about phone banking to

29
him and after few minutes when I finished my words about phone banking . The person said
+AMIAsw-Yeh mera bohat bhare account hay. Main nay es ke information apnay ghar walon
ko b nahin de the jab main hajj pay gia tha .aap ko es ke information nahin doon ga+AMIAtA-
One person said I did not need phone banking. Another person said I preferred manual
banking than phone banking. I think there are two reasons of hesitation of account holders
from phone banking. First and important thing is that employees of HBL are against this. They
feel phone banking is burden on them. Second thing is that most of The account holders of
HBL are illiterate. I also worked in different department of HBL. The detail is as under

3.1.1Issuance of Cheque Books

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

3.1.2Filling of an Account Opening form

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

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

3.1.3.1 Inward remittances

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

3.1.3.2 Outward remittances

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

3.1.4 Demand Draft

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

3.1.5 Pay Order

Pay orders are mostly used when a customer wants to pay someone who is in the same

30
city as he uses and who prefers non cash payment for any service or goods that he/she sold.
This remittance facility is providing to the general public as a whole.

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

3.1.7 Collection of Utility Bills

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

3.1.8 Pensions Payment

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

3.1.9 Payment of Salaries

This is one the distinct features of HBL, that it provides services to the Govt. departments to
distribute their salaries every month. The prominent examples include ARMY, RANGERS,
POLICE, EDUCATION, and PUBLIC WORKS ETC.

3.1.10 Call Deposit and Payment Order

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

3.1.11 Deposits Section

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

3.1.12 Deposit through Cash

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

3.1.13 Deposit through a Cheque

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

4.1 SWOT ANALYSIS OF HBL

HBL is considered to be a very sound bank in the financial circles. The bank where the
customers can safely keep their money as long as they want. In SWOT analysis the best
strategies accomplish in organization+AMIAtg-s mission by: 1. Exploiting opportunities and
strengths. 2. Neutralizing its threats and 3. Avoiding its weaknesses. Following is a list of
SWOT of HBL

4.1.1Strengths
A skill or capability that enables HBL to conceive and implement its strategies. The officers of
HBL are considered as one of the most able professionals in the banking world. I observed
that HBL employees interact with their clients as if they are their personal friends and discuss
about their problems as their own. HBL has got a reliable and easy to use internal computer
system. Every information regarding the transactions in customers+AMIAtg- deposits has
been computerized. HBL maintained its data properly. HBL has very good security system.
HBL is the larger commercial bank in Pakistan with the network of over 1439 domestic and
international branches. Being the pioneer of banking in Pakistan, HBL is the oldest and is the
richest in experience. HBL focuses on consumer banking by lucrative schemes, products and
services suiting best to the wants and demands of the customers. HBL has opened all its
branches at commercial areas so that the customers or clients face no problems in reaching to
the bank. The band is always on the look to improve its services both to the domestic as well
as overseas customers. Human resources development and introduction of new technology
towards modern banking. 24 hours cash access and safe payment products for high value
transaction. Having potential to encounter the competitive environment in the market. Veteran
and experience private management group also involved in other interests like, textile and
cement industry. Customer enjoys the services at the residential localities.

4.1.2Weaknesses
Highest number of branches effecting the proper maintenance and difficulty in providing same
working environment at the each branch Poorer system of recovery of the system is a threat to
bankruptcy. Lack of customer feed back. Low job satisfaction. Poor ATM+AMIAtg-s Service
Inconsistency in efficiency and working atmosphere due to the largest of branches.

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Sense of insecurity in the employees serving at low profitable branches due to the down
sizing. Females feel uneasy in an environment among the male workers. Victim of political,
legal and socio-cultural pressures .Lack of professionalism in the branch employees mostly.

4.1.3Opportunities
Huge untapped market potential in consumer banking In opportunity exist, in form of opening
of ladies banking section within the branch which is entirely a new idea and it will attract
customer. Opportunity for developing value added services combined with corporate banking
relationships, cash management services to large and medium sized corporate clients. Growing
policies of government on business and commerce sector provide HBL opportunities to take
advantages of these policies to meet efficiently with the business people to solve their
problems with the instant cash and financing facilities. Govt. is taking very bold steps to
promote IT in Pakistan. HBL has an opportunity to improve in technology. Large international
network which principally focuses on trade finance with Pakistan can be utilized to tap trade
activities in other markets. In addition, services such as cross border / offshore financing for
corporate customers can be enhanced. Customer feedback on different products and accounts
has really improved the bank performance and encourage the atmosphere for other future
policies. HBL also has an opportunity to expand its new technological advancement
like+ADs- tele banking and internet banking facilities in order to serve the customer more
efficiently, specially E-banking facility is also a new opportunity which is a flourishing
business in foreign countries and can also be here, if HBL takes the initiatives. Further
reduction in intermediation costs possible, with improving technology. Due to efficient and
veteran management group, HBL can also improve Ill and expand its foreign operation
successfully. Habib Bank Limited provide opportunity to utilize its skills and efficiencies in
leasing business.

4.1.4Threats
An area in the environment that increases the difficulties the organization+AMIAtg-s
achieving high performance. Consolidation in the banking sector resulting in increased
competition. Shortage of trained and specialized staff at lower executive and officer levels The
threat of inconsistency and government policy regarding to business and economics sectors,
specially political and regional situation which makes the environment uncertain. Growing
global technological advancement. Strict regulation by government over credit facilities to the
customers as Ill as to meet the prudential. Loss of confidence of overseas customers due to
freezing of accounts. Facing more competition by foreign banks in the market. Foreign banks
are flourishing in field of consumer financing. Also the increasing operation of private banks.
Highly attractive and advance services by foreign banks to their customers.

5.1 CONCLUSION +ACY- RECOMMENDATIONS

5.1.1CONCLUSION

HBL is clearly the first choice of every one who believe in qualitative approach of banking an
environment of highly responsible people. Bank is enjoying a healthy market share and taste
of good status in terms of its operative features and customer support. HBL is clearly the best
bank operating in Pakistan. Personal loan is a Distinguished feature of HBL experiencing a

33
good reputation and reasonable mark up with respect to prevailing market mark up with
assurance of satisfaction and support. HBL has more customers as compare to other banks, if
they given proper attention to every customer then in few years it will be the leading bank of
the country.

5.1.2RECOMMENDATIONS
The management should try to decrease job insecurity among the employees. Training
program should be started for internees and newly appointed employees. There should be
transport facility for the employees. The number of employees should be increased in order to
decrease the workload. The bank charges high service charges as compared to the other banks,
so these should be lowered down. Surveys must be conducted regarding customer satisfaction
level and all employees of this dept. should look forward to getting feedback whenever
possible. Adding of value added features that offer competitive advantage is also a means of
avoiding customer dissatisfaction. Quick response to customer queries is necessary to maintain
a healthy relationship with the customer. Proper training of customer handling should be given
to employees. Training workshops and coaching clinics should be considered as an option that
would provide adequate results.

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