HBL Reprot Help

8/9/2019 HBL Reprot Help

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1.1 INTRODUCTION OF HBL

It is the prime Bank in country established in 1941 having a registered head office in Karachi. It was

nationalized in 1974, but recently on 26th February 2004 it has been privatized by Government of

Pakistan and is taken over by Aga Khan Fund for Economic Development (AKFED). They acquired 51

percent of shares of HBL. It is one of the largest Banks of Pakistan with 1439 branches and having total

assets of Rs.434, 931,930,000.

1.1.1 Brief 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 30thAugust, 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. Allah 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 7th

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 were19 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 timeliabilities, coinage, currencies, exchange rate etc be settled between India and Pakistan and the Indian

Notes would continue to be legal tender in Pakistan till 30th September, 1948. Again due to certain

differences between Indian Pakistan, the Indian Govt., withheld Pakistan's share of Rs.75 core in forward

and subscribed heavily to the Govt. of Pakistan to the tide over the crises, Payment was made to the

Govt., by the Bank at a very nominal rate of interest, even before the actual issue of securities. At a time

when this newly born country was at whirlwind of crises, it was HBL which fulfilled generously the


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financial needs of all its sectors, paid salaries to the employees of all Govt. departments, helped in the

establishment of State Bank of Pakistan which the Quaid-e-Azam inaugurated on July 1st, 1948. HBL

after partition opened its branches throughout Pakistan to provide finance and other facilities to the

business community. In association with HBL, the Govt. sponsored Pakistan Finance Corporation Limited

for financing of cotton. The Bank helped handsomely in the construction of WARSAK DAM PROJECT,

WAPDA, & K.D.A. by provided finance and other facilities. Another innovation introduced by HBL is the

evening Banking cash long after the crossing of normal Banking hours. It was also the first in making

available such new facilities as Gift Cheques, Rupee Travelers Cheques, Credit Card System, short term

and long term schemes for small businessmen.

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1.1.2

MISSION

To be recognized as the leading financial institution of Pakistan and a dynamic international bank in the

emerging markets, providing our customers with a premium set of innovative products and services, and

granting superior value to our stakeholders

shareholders, customers and employees. OR Opening new horizons and fresh perspectives of trust,

dependability and service through 1425 domestic branches and 112 overseas offices with a

comprehensive range of financial products.

1.1.3 OBJECTIVES OF HBL

Following are some of the main objectives of HBL.

To earn profit for the Bank itself and for its shareholders.


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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.

1.1.4

SYMBOL OF HBL

Symbol depicts Bismillah ============Islamic Culture and Values Sword ============== Power

Lion================ As a symbol of strength

1.1.5 CORE VALUES OF HBL

HBL is firmly grounded with a corporate philosophy that incorporates five solid values which each

individual associated with the bank abides by.

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1.1.5.1 Humility

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

humility and care.

1.1.5.2 Integrity

For them, integrity means a synergic approach towards abiding their core values. United with the force

of shared values and integrity, they form a network of a well-integrated team.

1.1.5.3 Meritocracy


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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

2.1.1 FUNCTIONS OF DIFFERENT DEPARTMENTS OF HBL

The basic functions of different departments HBL are as follows.

Accepting deposits

Making Loans and advance.

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2.1.1.1 Accepting Deposits

The primary function of HBL is to accept and receive surplus money from the people, which theywillingly deposit with the Bank. Like all other Banks, HBL also take

incitation to attract as much depositors 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


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This type of account is often maintained by the business

Current deposits are those deposits on which Bank offers no interest but it allows the account holders to

withdraw their money at any time they want without giving any prior notice to the community, which

requires large sums of money very often for their business transaction.

2.1.1.1.2 Profit and loss sharing account (Saving)

Saving deposits or PLS are those accounts on which Bank offers a lower rate of interest. After the

Islamization of the Banking system in the country it has been given the name of PLS saving account. The

Bank undertakes to repay deposits on demand up to a certain amount.

2.1.1.1.3 Fixed deposits

Fixed deposits are those which can be withdrawn only after the maturity period. In this type of deposits

the Bank allows high rates of interest depending on the time period of deposits. The shorter the period

of deposits, the less will be the interest and vice versa.

2.1.1.2 Making Loans and advances

The second most important function of HBL is to provide financing facility to its customers. These loans

and advances are usually made against document of title to goods, marketable securities, and personal

securities. HBL charges different interest rates on these loans and advances depending on the terms and

conditions settled with the customers. Following types of loans and advances are made available to the

customers.

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2.1.1.2.1 Demand Finances

Demand finances are those finances which are given to the borrowers for specified period and can be

called back without any prior notice. It is a single transaction finance. It can be long term, medium term

and short term. Mark up is also charge. Here the amount can be withdrawn once at the time of

disbursement.

2.1.1.2.2 Running Finance

HBL provides these finances against the security of current assets like shares, bond, cash

crops like cotton and other cashable commodities. The borrowers account is opened with


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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.

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2.1.2 PRODUCTS 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 Travelers Cheques

It was introduced in 1957. Here the customers are provided the facility of encashment of


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their travelers ch

eques through any branch of the Bank.

2.1.2.3 Small Factory Owner Scheme

In 1959 the Bank offered loans to small scale producers under the small factory owner scheme in

order to boost the economy of Pakistan.

2.1.2.4 Foreign Tele printer Service

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

services to customers in foreign countries.

2.1.2.5 Gift cheques schemes

It was launched in 1962. Under this scheme, the Bank provided customers with pre-printed 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 schoolsthough out the country.

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2.1.2.7

Drive in Banking

HBL established Drive in branches in 1962 at various major cities of the country where

the customers could avail Banking services without getting down from their vehicles

.


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2.1.2.8 Mobile Banking

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

residing in the rural areas.

2.1.2.9 Night safe scheme

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

branches of the Bank.

2.1.2.10 Computer accounts

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

computerized

2.1.2.11 Computer Prize Bond

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

2.1.2.12 Credit card scheme

It was introduced in 1966 through which customers could get certain sum of money from specified

branches. Many business organizations accepted payments through valid credit cards.

2.1.2.13 Infant Saving Scheme

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

2.1.2.14 Courtesy Card

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

country.

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2.1.2.15 Deposit growth certificate

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

2.1.2.16 Special five years deposit certificate

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

2.1.2.17 Dollar traveler cheques


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

currency notes.

2.1.2.18 Haj accidental death scheme

Introduced in 1983, according to this insurance scheme, if a Haji who has submitted his Haj application

through HBL died while he was away for performing Haj, his family was to be provided a certain sum of

money.

2.1.2.19 Auto Cash Teller Machine

Auto cash machines are installed in 1988 at various branches which allows customers to withdraw cash

round the clock and on all days of the week.

2.1.2.20 Transport Finance Scheme

In 1989 the Bank in order to decrease unemployment in the country introduced owner, driver taxi

finance and scooter loans. According to this scheme they were provided loans on soft terms.

2.1.2.21 Gold card system

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

time.

2.1.2.22 Muhafiz Rupee Traveler Cheque

It was introduced in 1998. A cheques available in denomination of Rs. 10,000, 25,000, 50,000 and

100,000 with the advantage of 100% free purchase and encashment.

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2.1.2.23 Distinct Properties Of Muhafiz

It can be issued from more than 700 branches all over Pakistan.

Muhafiz provides the facility of payment in all branches of HBL.


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There is no commission and fee charge for purchase of Muhafiz HBL keeps alive

the tradition of Serve you better charges nothing for the purchase and sale of

Muhafiz.

2.1.3 INNOVATIVE 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


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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

2



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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.

434,931,930,000.



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




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



not been restored, people

3

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


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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, & 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 Travelers Cheques, Credit Card System, short term and

long term schemes for small businessmen.

4

1.1.2

MISSION








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1.1.4

SYMBOL OF HBL





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5

1.1.5.1 Humility


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 humanresource 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

1.1.6

CORPORATE BANKING

Only local bank with special focus on Corporate Banking with a presence in all major locations throughout 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 &

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our extensive local & foreign network allows us to imperiously service our clients. Corporate manages

well diversified portfolio, and include most of the top tier names of the market. Corporate Banking

offers tailor made products / solutions as required by corporate customers which includes:

1.1.6.1 Key Features of Corporate Banking

Funded facilities, ranging from short to medium and long term lending

Trade related financing.











Accepting deposits


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7


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









Saving deposits or PLS are those accounts on which Bank offers a lower rate of interest. After theIslamization of the Banking system in the country it has been given the name of PLS saving account. The











customers.

8


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disbursement.




















9



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2.1.2.2



their travelers ch












This scheme was introduced in 1962 to provide Banking services to children in a number of schools

though out the country.


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10

2.1.2.7

Drive in Banking



.









computerized










country.


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11







currency notes.




money.









time.




12



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Muhafiz.






Self Construction



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Quick Processing

2.1.3.2Auto Finance


your choice.


Lowest Down Payment


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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


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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.

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2.1.3.7 For Personal Loans

Maximum loan up to Rs. 1,000,000

Choice of 12,24,36,48 and 60 months for payback

Lowest Mark- up

Quick processing

Full Credit Life insurance

Available from over 400 designated branches throughout Pakistan


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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

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2.1.3.11 HBL iCard as your ATM Card

Offer a number of facilities such as cash withdrawal, Funds transfer between accounts, Balance Inquiry,

Mini Statement, PIN Change etc. Accepted at all 1LINK and MNET ATMs across the Country.

2.1.3.12 HBL Easy Access-

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

2.1.3.13 HBL Fast Transfer

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

2.1.3.14 Haryali Agricultural Loans

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

2.1.3.15 HBL E-Bank

It provides services via a dedicated communication link on the internet. The E-Banking

services provide anytime, anywhere banking to all 5 million customers. This service,

designed to be user friendly, assures secured access and confidentiality.

2.1.3.16 SWIFT

The bank is a major SWIFT user in 70 domestic branches & 21 overseas countries / locations in the

network. SWIFT services are being used for funds transfer, remittances and trade related

transactions, resulting in major improvement in payment processing capability for enhanced customer

service.


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2.1.4 AGENCY SERVICES TO THE CUSTOMERS

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

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2.1.4.1Collection of cheques

HBL pays and collects cheques on behalf of their customers, and for this it receives commission form

their account holders.

2.1.4.2 Collection of dividends

The Bank provides a very useful service by acting as an agent for its customers. It arranges the collection

of dividends on shares and securities held by its customers. The customer is simply to inform the issuer

of the securities that the interest on the securities is to be credited to his account in the Bank. Bank

charges commission for the collection of the dividends on behalf of account holders.

2.1.4.3 Purchase and sale of securities

HBL if authorized by the customers also makes purchase and sale of securities on the behalf of its

customers. Bank charges commission for the purchase or sale made by its on behalf on the customers.

2.1.4.4 Execution of standing instruction

HBL also executes the standing in case if it is ordered by the customers of the Bank to do so. These

instructions are usually given in writing to Bank. The Bank debits and credits the accounts of its

customer for the transactions carried out by the individual or firm.

2.1.4.5 Transfer of Funds

HBL, also transfers funds of the customers from one Bank to another Bank. If the transfer

is within one station, they dont charge any commission and even if they charge, they

charge on reduced rates.

2.1.4.6 Acts as an agent

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


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17

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 travelers cheques

HBL also issues travelers 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.

2.1.5 Operational Policy


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18

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 l

ength and breadth of the country also in conformity with the governments

socio-economic objectives. The number of operating domestic branches total 1350.

2.1.5.2 International Operations

HBLs overseas branches are continuously rendering satisfactory serv

ices and are also

contributing to the channeling home remittances of Pakistan working abroad. HBLs

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

2.1.6 ORGANIZATION 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.

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2.1.6.1 STRUCTURE OF HBL

At present the Bank operates through one central and 23 Regional Offices and 1439 branches, all over

Pakistan. The president and Executives Committee look after the affairs of the Bank. Each Regional Head


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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.

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2.1.6.2 Organizational Chart of HBL


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A chart defines the line of authority in an organization and its departmentation. It is a sort of visual

presentation of the organizational structure. It specifies the duties and responsibilities of the personnel

of the organization. The Organizational chart of HBL is given below.

2.1.6.3 Organizational Chart

Chairman

President

Board of Directors

SEVP

International Operations

SEVP Finance, Audit &

Administration

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2.1.7 ANALYSIS 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


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motivation of the human recourse available. By analyzing the organizational structure of HBL presence

of the following elements can be found in its structure.

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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 theorganization. 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 its a very trad

itional 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.

23

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


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position knows that what is ones 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 him and after few minutes when I finished my words about

phone banking . The person said

Yeh

mera bohat bhare account hay. Main nay es ke information apnay ghar walon ko b nahin de the jab

main hajj pay gia tha .aap ko es ke

information nahin doon ga One person said I did not need phone banking. Another

person said I preferred manual banking than phone banking. I think there are two reasons

24

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

3.1.1 Issuance 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.


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Cheque book for Current account

Cheque book for Profit & Loss Sharing Accounts (PLS).

3.1.2 Filling 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.

3.1.3 Remittance 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.

25

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 holders 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

beneficiarys residence.

3.1.5 Pay Order


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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.

2



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.

434,931,930,000.



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


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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




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



not been restored, people

3

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, & K.D.A. by provided finance and other facilities. Another innovation


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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 Travelers Cheques, Credit Card System, short term and

long term schemes for small businessmen.

4

1.1.2

MISSION












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1.1.4

SYMBOL OF HBL






5

1.1.5.1 Humility


humility and care.

1.1.5.2 Integrity

For them, integrity means a synergic approach towards abiding their core values. United with the forceof 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.


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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

1.1.6

CORPORATE 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 &

6

our extensive local & foreign network allows us to imperiously service our clients. Corporate manages

well diversified portfolio, and include most of the top tier names of the market. Corporate Banking

offers tailor made products / solutions as required by corporate customers which includes:

1.1.6.1 Key Features of Corporate Banking

Funded facilities, ranging from short to medium and long term lending

Trade related financing.



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Accepting deposits


7


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






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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











customers.

8





disbursement.








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9




2.1.2.2



their travelers ch




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This scheme was introduced in 1962 to provide Banking services to children in a number of schools

though out the country.

10

2.1.2.7

Drive in Banking



.





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computerized










country.

11







currency notes.



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money.









time.




12







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Muhafiz.






Self Construction







50/121


Quick Processing

2.1.3.2Auto Finance


your choice.


Lowest Down Payment

Lowest monthly rentals

13

Fixed repayment tenures of 36,48and 60 months.

Lowest Processing charges


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Insurance premium rates as low as 3%

World wide personal accidental insurance coverage of up to Rs. 200,000.

All locally assembled new cars can be financed through this scheme

.

2.1.3.4 HBL Flexi Loan:

HBL had introduced a unique loan system for the middle income serving people in various public sectors.

It is basically meant for those in service people who earn more than Rs. 5,000 per month. This loan

meets the petty requirements of the salaried class. Since the introduction of this scheme Rs. 6 billion is

advanced throughout the country. The maximum limit of this loan is Rs. 3,000,000.

2.1.3.5 Life Style

Habib Bank Lifestyle is an economical financing scheme for Household Appliances and consumerElectronics. 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


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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.

14

2.1.3.7 For Personal Loans

Maximum loan up to Rs. 1,000,000


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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


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2.1.3.13 HBL Fast Transfer

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

2.1.3.14 Haryali Agricultural Loans

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

2.1.3.15 HBL E-Bank

It provides services via a dedicated communication link on the internet. The E-Banking

services provide anytime, anywhere banking to all 5 million customers. This service,

designed to be user friendly, assures secured access and confidentiality.

2.1.3.16 SWIFT

The bank is a major SWIFT user in 70 domestic branches & 21 overseas countries / locations in the

network. SWIFT services are being used for funds transfer, remittances and trade related

transactions, resulting in major improvement in payment processing capability for enhanced customer

service.

2.1.4 AGENCY SERVICES TO THE CUSTOMERS

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

16

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 collectionof 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


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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 dont 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.

17

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.


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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 travelers cheques

HBL also issues travelers 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.

2.1.5 Operational Policy

18

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 l

ength and breadth of the country also in conformity with the governments

socio-economic objectives. The number of operating domestic branches total 1350.

2.1.5.2 International Operations

HBLs overseas branches are continuously rendering satisfactory serv

ices and are also


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contributing to the channeling home remittances of Pakistan working abroad. HBLs

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, cashmanagement, 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

2.1.6 ORGANIZATION 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.

19

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)


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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.

20

2.1.6.2 Organizational Chart of HBL

A chart defines the line of authority in an organization and its departmentation. It is a sort of visual

presentation of the organizational structure. It specifies the duties and responsibilities of the personnel

of the organization. The Organizational chart of HBL is given below.

2.1.6.3 Organizational Chart

Chairman

President

Board of Directors


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SEVP

International Operations

SEVP Finance, Audit &

Administration

21

2.1.7 ANALYSIS 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.

22

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.


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The same pattern is followed at HBL. No doubt its a very trad

itional 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.

23

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 ones 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 him and after few minutes when I finished my words about

phone banking . The person said


62/121


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Inward remittances refer to payment in favor of the banks account holders inward remittance includes

all Cheque received for collection.

25

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 holders 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

beneficiarys 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 bank

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