Askari Bank 3o3s49

Internship Report

Askari Commercial Bank

EXECUTIVE SUMMARY: The Department of Management Sciences was established in 2001 and offers Bachelors and Masters degree in Business istration. They are giving the best education and are offering for specialization, financial management, marketing, human resource management and computer application to business. An important programmed is six to eight weeks internship with any recognized organization. I decided to take up Askari Commercial Bank Limited for my internship because its competing bank nowadays and gives a good training to the internees. So in order to learn more this was my choice. This report is about my internship that I have undergone at Askari Commercial Bank Limited Multan Branch from 15th July 2006 to 26 August 2006.. During my internship I am able to learn practical aspect of business, and get good working experience. On the very first day of my internship I reported to Human Resource Manager / Operation Manager Mr. Shoukat Hayat Babar. He gave me small introduction of the bank and introduced me to the staff of the bank. Every internee is rotated among the bank’s departments and so was I. This rotation is done in order to have general concept regarding bank’s functions, operations and policies. In this rotation the stay in department is usually a week. I have learned more about the Bills and Foreign Trade department and have given below the caption of activities I was involved in during the period of six weeks. During my internship I found that Askari Commercial Bank is a best bank in Multan because most of the Exports and Imports in Multan are done through this bank. Multan is one of the cotton growing cities of Pakistan. Most of the businesses in Multan are directly or indirectly linked to cotton that is also the case with Askari Commercial Bank’s clients. Because Multan is a Agricultural City, and its major export is Cotton and Mango. So its export is done on seasonal basis. In the season of cotton and Mango export Askari Commercial Bank get its target easily but difficult

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for it to get its target in the off season. Same with the case of imports, in Multan major imports is Oil Seeds, which is also done on seasonal Basis. Low profit rates are one of the major reasons for not meeting the deposit targets. The profit rates on Askari deposit schemes are quite low when compared with other banks especially with the National Saving Centers. In today’s every customers is the rational customer he knows the value of money and wants a best return on his money.

Earlier Askari Commercial were able to attract customer due to their anxillury services like ATM Cards, Credit Cards, Online Banking etc. but now all the banks are offering these services through their own network or through third party contracting, so our plus points are no more our advantages. So the only thing through which ACBL can increase their deposits are profit rates, because the customers only want maximum profit on their investment.

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INTRODUCTION Definition of Bank There are large number of definitions which are offered by the different authors keeping view the various definitions we may define the bank in the following words.

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“A Bank is reliable financial institution which receives the money from one group of people and lends to other group of people”. So bank performs the duty of financial intermediary among the people and creates the credit money.

Bank Origin There are different views about origin of the world “Bank”. According to some people the word “Bank” is derived from the world “Bancus” which means a “Bench”. They argue their point by this transacted their business of money exchange on the benches. If the business of any businessman failed, his bench was destroyed by the people. Due to this practice the word “Bankrupt” was also used. On the other hand some people say that the world “Bank” is derived from German time the word “Bank” was replaced by the word “Bank” which is called “Banco” in Italian language.

Evolution of Banking The history of banking evolution is very interesting. In the early ages human like and wealth was not secure. Due to fear of loot-mar and theft people buried their wealth under land but this method was not satisfied. People started to search the custodians of wealth. The evolution of banking started and it has crossed the following stages.

First Stage of Evolution After a great struggle people succeeded in finding the reliable persons to deposit their money and valuable goods for safety. These people were goldsmiths. These were considered the most trusted persons due to their sounds financial position. On the other hand they had a very strong iron safes for keeping gold, money and other valuable items. People started depositing their gold and cash in the safe of goldsmiths. Goldsmiths charged something for this purpose and they returned the depositors their money whenever they needed banking evolution and goldsmith were the early bankers.

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Second Stage Of Evolution During this period those receipts which were issued by the goldsmiths against the valuables goods were being used as a medium of exchange by the merchants. People purchased the various things from the traders against their receipts against the payments. So the receipts were used like the bank cheque of the modern age.

Third stage of Evolution This period started at that time when goldsmiths came to know by the experience that people are using their receipts as medium exchange and very few people demand their deposits. So they reach to the conclusion that they may lend some portion of their total deposits to some other people and they can earn profit. Goldsmith started the business of lending. They also started paying interest to attract the depositors of net cash. Now this business became very profitable, so the traders and money lenders also jumped in this field.

Fourth Stage of Evolution It was started at that time when people were tempted to deposit more and more cash to the traders, money lenders and goldsmiths to earn maximum interest. On other hand number of borrowers also increased borrowing the money. So for the borrowing and lending business regular institutions came in to being. In the present age bank is modernized shape of those institutions. But to earn more profit every bank started issuing overdraft facility without maintaining adequate cash reserves to meet the demands of the depositors. This inability created the financial crises. Now to maintain the good will of the banks perform their duties. All the commercial banks perform their duties keeping in view the instructions of the Central Bank. Keeping in view the above discussion about the evolution of bank we can say that it is the result of the different activity of goldsmiths, merchants and money lenders. They are the real founders of modern banking business. All the basic functions of modern bank like accepting are similar with the founders. Now with the changing business requirements the secondary functions of banks have been changing with the age of time.

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Growth of Banking in Pakistan The entire banking business was controlled by the non-Muslims before the partition of the sub-continent. When Hindu’s became sure about the divisions of the sub continent, they secretly began to transfer their capital to the safe places in India. The funds and other valuables were transferred to India.

Time of Independence Hindus migration from Pakistan to India also caused drain on the bank deposits. In order to run the economy of Pakistan. Hindu’s closed down most of the head offices and branches of the scheduled and non scheduled banks in Pakistan. At the time of independence there were only two Pakistani banks, that is Habib Bank and Australasia Bank. At the time, Pakistan had 631 branches of scheduled banks and 411 of no-scheduled banks. The total deposits of Pakistan banks were Rs. 800 million and advances were 198 million, the non-scheduled banks number reduced from 411 to 106 over the same period. The mass scale withdrawal of deposits closure of branches and migration caused a deadlock in the banking business in Pakistan. Keeping in view the above situation government of Pakistan took various steps to provide all kinds of facilities to the non-Muslim bankers for restoring normal banking facilities but response was not encouraging.

Establishment of State Bank After independence it was not possible Sc-r Pakistan to set up the Central Bank immediately. The Reserve Bank of India acted as a Central Bank of Pakistan till 30th September 1948. But it could not protect the interests of Pakistan. To remove the financial difficulties and to establish sound banking system Govt. established the State Bank on 1st July 1948. In the development, to banking system it played very important role as a Central bank of the country.

Banking sector in Pakistan No economy can grow and improve the living standards of its population in the 6

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absence of a well functioning and efficient financial sector. Banks in Pakistan for 95 percent of the financial sector and hence good health of banks is directly related to economic growth and development of Pakistan. What was wrong with the Pakistani banking system that such massive reforms had to be undertaken? Banks in Pakistan have been catering basically to the needs of the Government organizations, subsidizing the fiscal deficit, serving a few large corporations and engaging in trade financing. There was no lending to small and medium enterprises, to the housing sector or to the agricultural sector, which create most of the growth and employment in Pakistan. Most important, the financial system suffered from political interference in lending decisions and also in the appointment of managers. The middle class which is the backbone of any Reproduced from Blue Chip – The Business People’s Magazine - January 2005 economy was not given due attention by the banking sector. There were legitimate reasons for such an errant behavior. First, the government’s fiscal deficit was so high that most of the deposits the banks used to get, were loaned to the government and government corporations. This was safe lending which fetched good returns and the banks made good profit out of it. Naturally, there was little incentive for them to do anything else except lend to the Government which was both risk free and highly remunerative. Secondly, the government owned most of the banks. In the government banks the staff worked like typical government employees, coming to office at 9:00 a.m., checking files; having nothing important to do and leaving at 5.00 p.m. without doing much work. These banks suffered from a high bureaucratic approach, overstaffing, unprofitable branches and poor customer service. istrative costs were high reducing profits of depositors. Thirdly, recovery rate was so low that almost 25% of the loans were stuck up as a large number of loans to the private sector borrowers were not given on the merit of the proposal but on political considerations. These influential borrowers hardly repaid their loans. Fourth, banking industry faced a high tax rate of 58 percent while the rest of the corporate sector paid only 35 percent. This high punitive rate along with the burden of stuck loans and inefficiency of the staff was ed on to the customers in form of high lending rates and low deposit rates. The banking industry was not attractive for new entrants who could foster competition and improve efficiency. Because of these factors, i.e. high istrative costs, burden of stuck-up loans and excessive tax rates, the average interest rate for lending was about 21% per annum. The middle class borrowers could not afford to 7

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get credit on such high interest rates and pay it back. Banking sector reforms were thus needed badly to address these and other constraints so that the banks could play their due role in the economic development of the country. Although, there is no room for complacency and a lot still needs to be done, even the worst critics of this government do concede that if there is one sector which has undergone basic transformation that is the banking sector. The IMF and the World Bank who are not always very generous or effusive in their praise had this to say about the Banking sector in Pakistan after completing a comprehensive and thorough review in early 2004. Quote: “far reaching reforms have resulted in a more efficient and competitive financial system. In particular, the pre-dominantly state-owned banking system has been transformed into one that is predominantly under the control of the private sector. The legislative framework and the State Bank of Pakistan’s supervisory capacity have been improved substantially. As a result, the financial sector is sounder and exhibits an increased resilience to shocks”

Privatization of NCBs All the nationalized commercial banks, except one, have been privatized. As a consequence their domination of the banking sector has been reduced from almost 100 percent in 1991 to about 20 percent by June 2004. Even in the case of National Bank of Pakistan 23.5 percent shares have been floated through Stock Market mainly aimed at small retail investors.

Corporate Governance Strong corporate governance is absolutely essential if the banks have to operate in a transparent manner and protect the depositors’ interests. The SBP has taken several measures in the last four years to put in place and enforce good governance practices to improve internal controls and bring about a change in the organizational culture.

Capital Strengthening Capital requirements of the banking sector have to be adequate to ensure a strong base, ability to compete and withstand unanticipated shocks. The minimum paid- up capital requirements of the banks have been raised from Rs 500 million to Rs 1 billion and have again been raised to Rs. 2 billion (by December 31, 2005). This has 8

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Askari Commercial Bank

already resulted in mergers and consolidation of many financial institutions and weeding out of several weaker banks from the financial system.

Improving Asset Quality The stock of gross non-performing loans (NPLs) that amounted to Rs 252 billion and ed for 22 percent of the advances of the banking system and DFIs has been reduced to Rs. 225 billion i.e. 14 percent of advances. More than two-thirds of these loans are fully provided for and net NPLs to net advances ratio has come down to as low as 5 percent for the commercial banks. The positive development is that the quality of new loans disbursed since 1997 has improved and recovery rate is 95 percent.

Liberalization of Foreign Exchange Regime Pakistan has further liberalized its foreign exchange regime and set up foreign exchange companies to meet the demands of Pakistani citizens. Pakistani Corporate sector companies have also been allowed to acquire equity abroad. Foreign ed investors can bring in and take back their capital, profits, dividends, remittances, royalties, etc. freely without any restrictions.

Consumer Financing By removing restrictions imposed on nationalized commercial banks for consumer financing, the State Bank of Pakistan has given a big boost to consumer financing. Middle class employees can now afford to purchase cars, TVs, air- conditioners, VCRs, etc. on installment basis. This, in turn, has given a large stimulus to the domestic manufacturing of these products.

Mortgage Financing A number of incentives have been provided to encourage mortgage financing by the banks. The upper limit has been raised from Rs 5 million to Rs 10 million. Tax deduction on interest payments on mortgage have been allowed up to a ceiling of Rs.1 million. The new recovery law is aimed at expediting repossession of property

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by the banks. The banks have been allowed to raise long term funds through rated and listed debt instruments like TFCs to match their long term mortgage assets with their liabilities.

Legal Reforms Legal difficulties and time delays in recovery of defaulted loans have been removed through a new ordinance i.e. The Financial Institutions (Recovery of Finances) Ordinance, 2001. The new recovery laws ensures the right of foreclosure and sale of mortgaged property with or without intervention of court and automatic transfer of case to execution proceeding. A Banking Laws Reforms Commission is reviewing, revising and consolidating the banking laws and drafting new laws such as bankruptcy law.

Prudential Regulations The prudential regulations in force were mainly aimed at corporate and business financing. The SBP in consultation with the Pakistan Banking Association and other stakeholders has developed a new set of regulations which cater to the specific separate needs of corporate, consumer and SME financing. The new prudential regulations will enable the banks to expand their scope of lending and customer out reach.

Micro Financing To provide widespread access to small borrowers particularly in the rural areas the licensing and regulatory environment for Micro Credit and Rural financial institutions have been relaxed and unlike the commercial banks these can be set up at district, provincial and national levels with varying capital requirements. There is less stringency and more facilitative thrust embedded in the prudential regulations designed for this type of institutions. Khushali Bank and the First Microfinance Bank in the private sector have already started working under this new regulatory environment. Khushali Bank has already reached a customer base of 125,000 mainly in poorer districts of the country and its recovery rate is above 95 percent.

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SME Financing The access of small and medium entrepreneurs to credit has been a major constraint to expansion of their business and up gradation of their technology. A Small and Medium Enterprise (SME) Bank has been established to provide leadership in developing new products such as program loans, new credit appraisal and documentation techniques, and nurturing new skills in SME lending which can then be replicated and transferred to other banks in the country. Program lending is the most appropriate method to assist the SME financing needs. The new prudential regulations for SMEs do not require collateral but asset conversion cycle and cash flow generation as the basis for loan approval. The State Bank is also contemplating to develop capacity building among a select group of banks for SME lending. This will revitalize the lending to SMEs particularly export oriented ones.

Taxation The Government has already reduced the corporate tax rate on banks from 58 percent to 41 percent during the last four years and it is envisaged that the rate will be reduced gradually and brought at par with the corporate tax rate of 35 percent in the next two years. This will, in turn, help in reducing the spread between the deposit rate and lending rate and benefit financial savers.

Agriculture Credit A complete revamping of Agriculture Credit Scheme has been done recently with the help of commercial banks. The scope of the Scheme which was limited to production loans for inputs has been broadened to the whole value chain of agriculture sector. The broadening of the scope as well the removal of other restrictions have enabled the commercial banks to substantially increase their lending for agriculture by a multiple of four times compared to FY 1999-00 thus mainstreaming agriculture lending as part of their corporate business. Unlike the previous years when they were prepared to pay penalties for under performance they have achieved consistently rising higher targets every year. The private commercial banks have also agreed to step in and increase their lending to agriculture.

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Islamic Banking Pakistan has introduced Islamic banking system to operate in parallel with the conventional banking providing a choice to the consumers. A large number of Pakistanis have remained withdrawn from commercial banking because of their strong belief against riba-based banking. These individuals and firms – mainly middle and low class – will have the opportunity to invest in trade and businesses by availing of loans from Islamic banks and thus expand economic activity and employment. A full-fledged Islamic bank has already opened the doors for business and several banks have branches exclusively dedicated to Islamic banking products and services. The State Bank of Pakistan has set up a full-fledged Islamic Banking Department and a Shariah Advisory Board to help it in the promotion of Islamic banking in the country.

E-Banking There is a big surge among the banks including NCBs to upgrade their technology and on-line banking services. During the last three years there has been a large expansion in the ATMs and at present about 700 ATMs are working throughout the country. The decision mandating the banks to one of either two ATM switches available in the country has provided a further boost. Progress in creating automated or on-line branches of banks has been quite significant so far and it is expected that by 2005 almost all the bank branches will be on-line or automated. Utility bills payment and remittances would be handled through ATMs, Kiosks or Personal Computers reducing both time and cost.

Human Resources The banks have recently embarked on merit-based recruitment to build up their human resource base – an area which has been neglected so far. The private banks have taken lead in this respect by holding competitive examinations, interviews and selecting the most qualified candidates. The era of appointment on the basis of sifarish and nepotism has almost come to an end as the private owners want to attract and retain the best available talent which can maximize their profits. This new generation of bankers will usher in a culture of professionalism and rigour in the

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banking industry and produce bankers of stature who will provide leadership in the future.

Credit Rating To facilitate the depositors to make informed judgments about placing their savings with the banks, it has been made mandatory for all banks to get themselves evaluated by credit rating agencies. These ratings are then disclosed to the general public by the SBP and also disseminated to the Chambers of Commerce and Trade bodies. Such public disclosure will allow the depositors to choose between various banks. For example, those who wish to get higher return may opt for banks with B or C rating. But those who want to play safe may decide to stick with only AAA or AA rated banks.

CURRENT NATIONAL BANKING PORTFOLIO Banks are very important institutions in a society. They play an important role in carrying out economic transaction in a healthy commercial society. The economic growth and activities depend on good banking services in a country. They help in smooth flow of economic blood of a country. The financial sector in Pakistan can be presented as:  Banking Sector.  Non-Banking Sector.

Banking Sector: Banking sector comprises the following: Public scheduled Banks Private sector Banks Foreign Banks.

Non-Banking Sector: Non-banking sector comprises the following:

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Development finance institutions (DFIs) Private sector banks Investment banks. Leasing companies. The large public sector scheduled commercial banks, namely National Bank of Pakistan. Habib Bank Ltd. United Bank Ltd. These banks are dominant in term of number of branches but in term of profits these banks are not as much profitable as are the private or the foreign banks. The private sector banks are relatively new when compared to public sector banks. These includes: Askari Commercial Bank Ltd. Bank Al-Habib Ltd. Bank Al-Falah Ltd. Soneri Bank. Bolan Bank. Union Bank. Platinum Commercial Bank. Etc. These banks have still very small network of branches and level of operation. They focus on very selective market segment where they are quite successful. So for as there profit proportion is concerned they are gaining handsome profits. Owing to the inefficiencies of public sector scheduled banks and lower standing of private sector banks and dollarization of the economy, foreign banks started performing their operations in Pakistani market. There are about 20 foreign banks operating in the country:The most important are  ABN Amro Bank Ltd.  American Express Bank Ltd.

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 Standard Chartered Bank  Deutsche Bank AG  Habib Bank AG Zurich  Al-Baraka Islamic Investment Bank 

CITIBANK N.A. (KARACHI)

 RUPALI BANK LTD. (KARACHI)  The Bank of Tokyo Mitsubishi Ltd.  Hong Kong and Shanghai Bank  Oman International Bank S.A.O.G.

Army Welfare Trust Army welfare trust was established namely for the welfare of army officials. The office of Army welfare trust is situated at AWT PLAZA Rawalpindi. AWT offers the “AWT Saving Scheme” to the army officials only. AWT has further as units. 1. Askari Associates 2. Askari leasing 3. Askari general 4. Private businesses 5. Textile mill 6. Cement industry 7. Askari commercial bank Askari associates deals with the share holding. Askari General Insurance Askari Leasing are ed

at stock exchanges. Cement industry, firstly produced

“Nizam Cement”.

ASKARI COMMERCIAL BANK LTD Askari commercial bank limited was incorporated on October 09, 1991 as a public limited company, and is listed on the Karachi, Lahore and Islamabad stock exchanges. The bank obtained business commencement certificate on February 26, 1992 and started operations from April 01, 1992. Askari commercial bank is a

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scheduled commercial bank and is principally engaged in the business of banking as defined in the banking companies ordinance, 1962. Askari commercial bank limited continued to scale new heights in all areas of its operations. The safety and security of depositor’s funds, high productivity, and optimum use of technology are the hallmarks of its corpora to strength. ACBL is the first and so far the only Pakistani bank in private sector to have been rated as A1 + (for short term category) and A+ (for long term category) by PACRA Pakistan credit rating agency (Pvt.) Ltd. The rating of A1+ is the highest in the short tem category and stands for “obligations ed by the highest capacity for timely repayment”. In 1994 ACBL earned international recognition as Asia money award and the title of “best commercial bank of Pakistan for the year 1994” while euro money declared the bank as “best domestic bank of Pakistan for the year 1995”. A financial institution has to given due emphasis to its network expansion because with the age of time the graph of growth through existing network attains the point of saturation ACBL has its head office in Rawalpindi. In view of deteriorating operating environment, bank slowed down the expansion plan and added one branch in 1998 making the total number of branches 30. Now in 2006 there are 30 branches of ACBL in all over the Pakistan.

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Comparisons with other banks in the Industry

Banks

Bank

Year of

Share

No. of

Total

Total

Net Profit

Incorpor-

Capital

Branches

Deposits

Advances

Rs.million

ation

(Rs.000’s)

Rs.million

Rs.million

After tax

1992

3000000

156

222345

118864

1702

5.75

1991

1507018

100

118798

85977

2022

13.42

1991

812,151

40

91186.52

68969.40

715.21

6.21

Earning per share(Rs.)

Al-

Falah Limited Askari Commerci al Bank Ltd Union Bank Ltd

THE MISSION 17

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As it is said that an organization’s culture, products, services, employees, their attitude, philosophy, self-concept, markets and environment throws light on the corporate mission, so one of the business executives at the bank, based on his personal observation and judgment, carved the following mission of The Askari Commercial Bank Limited as “ To be the leading private sector bank in Pakistan with an international presence, delivering quality service through innovative technology and effective human resource management in a modern and progressive organizational professional

culture standards,

of

meritocracy,

while

maintaining

providing

enhanced

high

ethical

and

value

to

our

all

stakeholders, and contributing to society”.

Objectives & Core Values The intrinsic values, which are corner stones of our corporate behavior, are:  Commitment  Integrity  Fairness  Team-work and  Service

Inspiring Relationships From knowing our customer requirements to understanding employee needs, from utilizing modern technology to making responsible social contributions, from enhancing

stake-holders

value

to

practicing

corporate

ethics…….We

are

continuously and consistently striving to address newer challenges with a single motivation: “the power to inspire and be inspired”

Code of Business Principles 18

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Our Code of Business Principles is to:  Deliver solutions that meet customers’ financial needs  Build and sustain a high performance culture  Build trusted relationships with all stakeholders  Build and manage the Bank’s portfolio of businesses to achieve strong and sustainable shareholder returns  Create and leverage strategic assets and capabilities for competitive advantage

Inspiring Relationships Inspiring 250,000 relationships Knowing our customers and their needs is key to our business success. Our products and services are as diverse as our market segments. Our client relationship managers are well equipped and well trained to provide the most efficient and personalized service to the customers. We have structured and syndicated financing arrangements, provided working capital and balancingmodernization replacement (BMR) facilities, financed international trade, provided small business loans, cash management services, and developed innovative investment and loan products for the individual savers and households. Askari Bank is proud of its pioneering role in providing the most modern and technologically advanced services to its 250,000 relationships.

Inspiring employee relationships We strongly believe that the interests of the bank and the employees are inseparable. At Askari we try to create a ‘we’ culture where there is mutual trust and respect for each other. We encourage ownership behavior so that everyone feels responsible for the performance and reputation of the Bank. We are committed to develop and enhance each employee’s skills and capabilities through extensive in-house and external training programs and job rotations. The strong employee-

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bank relationship is evidenced by the fact that Askari has one of the lowest employee turnovers. Most of the top management today has reached their present positions by growing within the organization.

Inspiring technological innovation Technology has played a pivotal role in meeting customer expectations, particularly with respect to speed and quality of service. We have fully automated transaction-processing systems for back-office . Our branch network is connected online real time and our customers have access to off site as well as on site ATMs, all over Pakistan. Our Phone Banking Service and Internet Banking Facility allows customers to enjoy routine banking services from anywhere anytime in the world.

Inspiring ethical values Integrity is the most valued standard in whatever we do. We understand that our commitment to satisfy customers’ needs must be fulfilled within a professional and ethical framework. We subscribe to a culture of high ethical standards, based on the development of right attitudes.

Inspiring corporate citizenship Inspiring corporate citizenship: We have made useful contributions in the areas of sports, culture, poverty alleviation, health and medical sciences, education and scientific research.

Inspiring growth For us the challenge is to build a foundation of strong, consistent financial performance and focus on growing our balance sheet and revenues at low risk. During the year, we opened ten new fully automated branches, increasing our branch network to 46. Central to our growth strategy is a focus on specialization and transformation. We are reshaping our portfolio of businesses by investing in higher growth areas, extending and developing our core competencies and moving out of weak and non-core segments.

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Inspiring shareholder confidence We believe that the bottom line of any business is creating shareholder value. To gain their trust and confidence, we believe in providing our shareholders timely, regular and reliable information on our activities, structure, financial situation and performance. At the same time, we try to give them one of the best earnings per share in the banking industry of the country.

VISION STATEMENT “To be the Best Bank of First Choice in the Region”

CORPORATE INFORMATION

Board of Directors Lt. Gen. Waseem Ahmad Ashraf

Chairman Chairman Executive

Lt. Gen. (R) Zarrar Azim Mr. Kalim-ur-Rahman Brig (R) Muhammad Shiraz Baig Brig (R) Muhmmad Bashir Baz Brig (R) Asmat Ullah Khan Niazi Brig (R) Shaukat Mahmood Chaudhari Mr. Kashif Mateen Ansari MrZafar Alam Khan Sumbal Mr. Muhmmad Afzal Munif,FCA Mr Muhammad Afzal Munif ,FCA

Committee President & Chief Executive Director Director Director Director Director Director Director Director

Mr Tariq lqbal Khan,FCA

Director (NIT Nominee)

Mr. Saleem Anwar, FCA

secretary

Auditors A. F. Ferguson & Co. Legal Advisors Rizvi, Isa, Afridi Angell Registrar & Share Transfer Office

Chartered ants

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M/s THK Associates (Private) Limited Ground Floor, Modern Motors House, .Beaumont Road, Karachi, 75530 P.O. Box No. 8533, Karachi Tel: (92 21) 5689021, 5686658, 5685681 Fax: (92 21) 5655595 ed Office/Head Office AWT Plaza, The Mall, P.O. Box No. 1084, Rawalpindi - Pakistan. Tel: (051) 9272150-53 Fax: (051) 9272455 Web Site: www.askaribank.com.pk

Organizational Chart Executive Committee

Internal Audit

President & Chief

Corp. Banking &

International

Operating & Credit

Credit

Regions

Rawalpin di/ 22

Retail Banking

Asset Products

Credit Cards

Planning & Corp. Affairs

Internship Report

Treasury

Corporate & Merchant

Askari Commercial Bank

Electronic Technology

North

System & Operations

Lahore

Data

Investme

Human

nt

Resource Finance

East

Reporting Legal Affairs

South I

South II

West

COMPANY MARKETING MIX The concept of marketing mix is very important in the business literature. Marketing mix is a combination of a number of marketing elements according to a market situation. If a business enterprise rationally blends the elements of marketing into a program of mix, then it competes, stays and earns profit in the market. In case, the integration of the various elements of marketing is defective, the firm cannot fight out its rivals in the market and ultimately suffers losses. Marketing mix is defined as

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“The set of controllable tactical marketing tools that the firm blends to produce in response to wants in the target market.”‘ The various elements of marketing mix are as follows;  Products  Promotion  Price  Place Marketers use numerous tools to elicit desired responses from their target market. These tools constitute a market mix. “Marketing mix is a set of marketing tools that the firms use to pursue its marketing objectives in the target market.”

Four P’s

Four C’s

Product

Customer needs and wants

Price

Cost to the customers

Place

Convenience

Promotion

Communication

Now let us discuss the marketing mix of ASKARI COMMERCIAL BANK LIMITED. While successfully penetrating the key domestic markets through strategic expansion and business diversification, we remain alive to the challenges emanating from the developments in the global financial markets; the opportunities and threats engendered by greater deregulation, and increased customer expectations. These provide us the impetus to make the best use of available resources, including modern technology, to meet the challenges ahead.

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Historically, Askari’s core marketing focus for its asset base has been the middle and upper middle business houses (including wholesales and manufacturers) operating in the

large urban centers of Pakistan, which are primarily oriented

towards foreign trade. This segment contributes significant revenues to the Bank. The liability side remains focused on the middle and upper middle class, retired and serving government and armed forces personnel, and mid size business houses. Benefiting from the bank’s growing balance sheet size, this division is now gaining momentum and our long term aim is to develop it into an independent strategic business unit (SBU). This would enable the bank to acquire, develop and retain specialized abilities, and enhance our focus on serving the emerging needs of the corporate clients. With the branch network of 46 and further expected increase of 18 during 2003, the ATM’s facility and Internet Banking. Askari bank’s reach is ever increasing. In recognition of this reach, we set up Retail Banking Group in July 2000, dedicated to serving the urban consumer market. Askari is committed to aggressively market this segment. The strategy is to provide our customers with a banker of innovative products to meet their varying needs. In view of the fast changing market conditions and the narrowing of traditional lucrative margins on loans, Askari bank now commits itself to seek out new opportunities and make its existing operations more efficient. This is evident from revamping of the Treasury that is being geared to provide innovative products and efficient services to our clients. In the process, we hope to improve overall margins on the surplus liquidity available with the Treasury. Despite the falling interest rates, which compelled people to divert their investments to the share market and property, our deposits increased from PKR 41 billion in 2001. Our operating Profit (before provisions) for the year, stood at PKR 1,595 million as at December 31, 2002, while the figure for last year was PKR 1,291 million. Although the interest margins were greatly squeezed during the year 2002, especially in the second half, we succeeded in compensating for the reduced margins by a substantial increase in volumes. 25

Internship Report

Askari Commercial Bank

The Board and Management is steering towards contemporary management design. This is evident from the conception of the new division for “Planning and Corporate Affairs”. The division was set up to play a proactive role in pursuing corporate and organizational development, giving strategic direction to the bank and looking out for new growth avenues. Askari is one of the first Pakistani banks to develop such a dedicated function with a high focus on the future. During the first quarter of 2003, the bank plans to operationalize an Offshore Banking Unit (OBU) in Bahrain. In the near future, Askari bank also plans to launch some new consumer products, developed and designed by its Retail Banking Group. This will include debit cards, prepaid cards and electronic billing systems. The bank plans to enhance its ATMs and Internet banking services with new features like inter branch funds transfer, and the payment of utility bills. We plan to setup a Call Center and Date Warehouse to enhance the timeliness and quality of our services. Enhancements are also planned for the banking software so that functions like Trade Finance, SWIFT messages, and credit approvals can be integrated into the core banking system. The bank is also in the process of obtaining a new IT system for its Treasury. Realizing that “Assets make things possible, people make things happen”. Askari plans to reemphasize its focus on its human resource. The bank will try to build the organization from within, giving special emphasis on the quality of its human resource. Our emphasis on technology is evident from the products that we are developing. We understand and are committed to enhancing our technology not just to keep abreast with the modern developments but also to retain our position as leaders in this field Our motivation is driven by one single factor “Providing customer satisfaction”. 26

Internship Report

Askari Commercial Bank

PRODUCTS Askari Bank presents you an entire range of products... whether you are looking for high returns on your deposits, lockers for your valuables, liquidity for your business needs, loans to meet an emergency cash need, or financing for the purchase of an automobile, we have the solutions to your questions.

Policies Regarding Product

 Intangibility, inseparability and high perish ability are a significant product planning challenge in service marketing. So to overcome these challenges the service industry has to adopt various strategies. We would discuss these strategies in context of ACBL.  ACBL emphasis is on the benefit the service offers rather than on the service itself. For example the “e-statement” service emphasis is on the customer’s convenience, easiness and advantage than on the service itself.  For product promotion the use of visualization technique, association, physical presentation and documentation are used. On every brochure of ACBL product one sees an image. For example the “High Yield” saving brochure shows an image of wheat plant. What does it reflects or communicates with the customer? It instantly gives the idea that something very rewarding, giving higher returns, a worthy investment etc. so the customer mind instantly visualizes, associates the service with something physical.  In relation to product feature the bank’s emphasis is on building up an effective brand image. In includes the whole theme more than just the brand name. Uses of distinctive color schemes, tangible objects, slogans etc are being used.

27

Internship Report

Askari Commercial Bank

 Due to intangibility of products and in the absence of physical features the bank has to emphasize on differentiation of their offering.

Askari Bank’s Personal Finance One can avail unlimited opportunities through Askari Bank’s Personal Finance. With unmatched financing features in of loan amount, payback period and most affordable monthly installments, Askari Bank’s Personal Finance makes sure that you get the most out of your loan. No matter what your need is, Askari bank has more ways to serve you then ever before. Features: 

Loan amount from Rs.50,000 to 500,000



Repayment period from 1 to 5 years



Fixed monthly repayment



Low rates that never change



No pre-payment penalties



Shortest processing time



Funds may be obtained at any ACBL branch



And certainly unmatched service quality

When you are working towards your financial goals, how you borrow can be just as important as how you invest. The right borrowing options can improve your savings, your cash flow and your ability to take advantage of personal or business opportunities. Eligibility to Apply: Your age is between 21 and 57* You have a verifiable minimum gross monthly income of Rs. 15,000. Salaried:

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Askari Commercial Bank

Minimum length of confirmed service with present employer is at least six months with a total length of at least one year service.

Askari Car Financing Askari Commercial Bank Limited offers the most convenient and affordable vehicle-financing scheme, which provides our valuable customers an opportunity to own a brand new vehicle of their choice. Askar's "No eligibility" clause automatically qualifies a person to own a latest car of their choice. With minimum down payment, lowest insurance rates and widest range of available car makes and models, Askar offers the best value to you.

ASKARI BANK'S Cash Management Services  "Askari Cash Management Services" aimed at effectively managing the s receivable portfolio of medium and large corporate entities. While this service will help the corporate entities improve their liquidity, due to our well-diversified branch network.  The service primarily aims at providing clearing, collection and cash/transfer facility to corporations, under one resource center, which will handle the process through the branches and provide adequate reporting to the corporate clients, on various aspects of their s receivable portfolio, every month.  As the product can be tailor made for National and Multinational companies. The transaction process flows, operational methodologies and service pricing varies from customer to customer, with marginal modifications, depending upon volumes and nature of transactions involved.

Askari Bank's Value Plus Askari Bank leads the way, yet again ...... with the introduction of Askari bank's Value Plus, rupee deposit , which promises greater financial freedom and security, in an unmatched way. Invest as little as Rs.10,000/- in a value plus savings

29

Internship Report

Askari Commercial Bank

deposit and you are entitled to earn monthly returns, while still enjoying the flexibility of a normal checking .

Advantages:  Partial liquidity offer on all time deposits  Monthly return  24hours world-wide protection plan  ASKCARD (Debit Card) &  Our unmatched service quality

Partial Liquidity Offer: Offering you a truly exciting opportunity to make your investments break new grounds for you. All you have to do is to invest a minimum deposit of Rs.25,000/-, in a value plus time deposit for a choice tenure i.e. 3 months,6 months or 1 year. The investment will be held in blocks of Rs. 25,000/each. In case you wish to partially withdraw some amount from your total investment, you have the flexibility of encashing the blocks that you want, without touching the remaining investment. The unencashed blocks will continue at the same maturity and return.....and yet you don't lose the share of profit on the encashed blocks.Upon maturity you have the freedom of either booking your time deposit for tenure of your choice, or let the bank roll it over automatically for a like period.

24 hours worldwide protection: A unique partnership between Askari Bank and New Hampshire Insurance Company (American International Group, Pakistan) brings global accidental protection for your entire family. At home or at work, your Askari Bank's Value Plus is there to take care of you ...round the clock ...providing insurance cover of up to 4 times* the average

30

Internship Report

Askari Commercial Bank

balance in your .This is a choice enrolment plan with an automatic monthly deduction facility at a price so low ... you can't even imagine i.e. only Rs. 20/per month..... .....that's what we call relationship banking! The privilege card: A truly relationship card that identifies and recognizes your status. Besides serving to identify you, this card provides with instant cash access at more than 40 ATMs around Pakistan..... But that's not what it's all about!Visit our authorized merchants today and get a special discounì¥Á31q` ø¿31313131313131313131313131›¥31

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Internship Report

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666666666666666666666”666666666666üz6666666666üz6666666666üz66P666666L{66,ì¥Á66 Address : Adyala Road, Rawalpindi66: 66: 66Ç™666666666666: 66: 66Ç™6666666666 6666 6666 6666 6666 6666 6666 666 Æ666666666666ÿÿ¤6 6666 6666 6666 6666 6ÿÿ6666È666666666666È666666666666p666666666666p666666666666p6666$6

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Internship Report

Askari Commercial Bank

Fax No: (051) 5948085 Tlx:-----Direct: (051) 5948088, (051) 5948087 E-Mail: [email protected] 15. Abbottabad Branch Address : Lala Rukh Plaza, Mansehra Road, Abbottabad. PABX No: (0992)332182-3 Fax No: (0992)332184 Tlx:-----Direct: (0992)332157, (0992)332158

Branch Code : 0024

E-Mail: [email protected] 16. Chakwal Branch

Branch Code : 0079

Address : Talagang Road, Chakwal PABX No: (0543) 553142-3 Fax No: (0543) 601979

Tlx:----------

Direct: (0543) 551255, E-Mail: [email protected] 17. Dera Ismail Khan Branch

Branch Code : 0069

Address : Kaif Gulbahar Building, A.Q.Khan Chowk, Circular Road, D.I.Khan PABX No: (0966)720180-82 Fax No: (0966)720184 Tlx:-------Direct: (0966)720178, (0966) 720179 E-Mail: [email protected] 18. Jhelum Branch Branch Code : 0070 Address : Plot No. 225 & 226, Kohinoor Plaza, Old G.T Road, Jhelum Cantt-49600 PABX No: (0544)720053-55 Fax No: (0544)720060 Tlx:------Direct: (0544)720051, (0544) 720052

68

Internship Report

Askari Commercial Bank

E-Mail: [email protected] 19. Mardan Branch Address : The Mall, Mardan. P.O.Box 197

Branch Code : 0007

PABX No: (0937) 9230501-2 Fax No: (0937) 9230503

Tlx:--------

Direct: (0937) 9230500, E-Mail: [email protected] 20. Mirpur (Azad Kashmir) Address : Nathia Building Chowk Shaheedan, Mirpur

Branch Code : 0005

PABX No: (05-8610)45451-52 Fax No: (05-8610) 35429

Tlx:--------

Direct: (05-8610) 45450, (05-8610) 35247 E-Mail: [email protected] 21. Nowshera Branch

Branch Code : 0084

Address : Taj Building, Main GT Road, Nowshera PABX No: (0923) 9220300-301 Fax No: (0923) 9220304 Tlx:-------Direct: (0923) 9220302, 610530, (0923) 9220303 E-Mail: [email protected] 22. Cantt Branch

Branch Code : 0004

Address : 3-7, Fakhr-e-Alam Road, Peshawar, P.O.Box 606 PABX No: (091) 9212433-6 Fax No: (091) 276391 Tlx: 52314 ACBL PK Direct: (091) 5273829, (091) 5279683 E-Mail: [email protected] 23. City Branch Address : Bank Square Chowk Yadgar, Peshawar PABX No: (091) 2561246-7 Fax No: (091) 2561245 Tlx: 53423 ACBL PK Direct: (091) 2560156, (091) 2567315

Branch Code : 0014

E-Mail: [email protected] 24. Mingora Branch Branch Code : 0061 Address : Opposite Park Hotel, Makaan Bagh, Saidu Sharif Road, Mingora, Swat PABX No: (0946) 713358-9 Fax No: (0946) 713361

Tlx:--------

69

Internship Report

Askari Commercial Bank

Direct: (0946) 713356 E-Mail: [email protected] 28. Gulberg Branch

Branch Code : 0006

Branch Code : 0011

Branch Code : 0017

Branch Code : 0021

Address : 10-E/11, Main Boulevard, Gulberg-III, Lahore. PABX No: (042) 5764842-4, 5878431-2, 5877297 Fax No: (042) 5760958 Tlx:-------Direct: (042) 5760369, (042) 5760427 E-Mail: [email protected] 30. D.H.A. Branch

Branch Code : 0027

Address : 324-Z, Defence Housing Authority, Lahore 54792 PABX No: (042) 5898891-5 Fax No: (042) 5732310 Tlx:-------Direct: (042) 5726818, (042) 5896036 E-Mail: [email protected] 31. The Mall Branch Branch Code : 0045 Address : Bank Square, 47 The Mall, (Shahrah-e-Quaid-e-Azam), Lahore PABX No: (042) 7211851-5

70

Internship Report

Askari Commercial Bank

Fax No: (042) 7211865 Tlx:------Direct: (042) 7314196, (042) 7322351 E-Mail: [email protected] 71: 71: 71Ç™717171717136.

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Internship Report

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Internship Report

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Internship Report

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Internship Report

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Internship Report

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Internship Report

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Internship Report

Askari Commercial Bank

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Internship Report

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Internship Report

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Internship Report

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Internship Report

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Internship Report

Askari Commercial Bank

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Internship Report

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Internship Report

Askari Commercial Bank

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Internship Report

Askari Commercial Bank

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Internship Report

Askari Commercial Bank

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4È949494949494È9494È949494949494È949494949494p949494949494p949494949494p9494 94

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595959595959595959595”959595959595üz9595959595üz9595959595üz95P959595L{95,ì¥Á9

9595ø¿95959595959595959595959595›¥9595bjbjqPqP95959595959595959595959595 5959 5959 5959 5959 5959 5959 595 Æ959595959595ÿÿ¤9 5959 5959 5959 5959 5ÿÿ¤9 5959 5959 5959 5959 5ÿÿ¤9 5959 5959 5959 5959 5959 5959 5959 5959 5¤9 5959 5959

5È959595959595È9595È959595959595È959595959595p959595959595p959595959595p9595

95

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696969696969696969696”969696969696üz9696969696üz9696›¥9696bjbjqPqP969696969696 Address : Airport Road, Gwadar, 9120096: 96: 96Ç™969696969696: 96: 96Ç™9696969696 6969 6969 6969 6969 6969 6969 696 Æ969696969696ÿÿ¤9 6969 6969 6969 6969 6ÿÿ¤9 6969 6969 6969 6969 6ÿÿ¤9 6969 6969 6969 6969 6969 6969 6969 6969 6¤9 6969 6969

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696969696969696969696”9696969696969696969696969696969696›¥9696bjbjqPqP96969696 96

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7979 7979 7979 7979 7979 7979 797 Æ979797979797ÿÿ¤9 7979 7979 7979 7979 7ÿÿ¤9 7979 7979 7979 7979 7ÿÿ¤9

797979797979797979797979797979797¤97979797p9797$9797979797979797979797”9797979

9797ø¿97979797979797979797979797›¥9797bjbjqPqP97979797979797979797979797 PABX No: (0864) 211359-60 Fax No: (0864) 211358 Tlx:-------Direct: (0864) 211357, E-Mail: [email protected]

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Branch Code : 0002

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63. Clifton Branch Branch Code : 0015 Address : Marine Trade Center, Block-9, Clifton, Karachi. P.O.Box 13807 PABX No: (021) 5868551-4 Fax No: (021) 5868555 Tlx:---------Direct: (021) 5862868, (021) 5868557 E-Mail: [email protected] 69. Bahadurabad Branch Branch Code : 0041 Address : Zeenat Terrace, Plot No. 265, Block No.3, Bahaduryar Jang Society, Bahadurabad, Karachi PABX No: (021) 9232565-8 Fax No: (021) 9232574 Tlx:------Direct: (021) 9232569,

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E-Mail: [email protected] 72. Saddar Branch Branch Code : 0048 Address : Sindh Small Industries Building, Regal Chowk, Saddar, Karachi PABX No: (021) 2762840-2 Fax No: (021) 2760992 Direct: (021) 2760506,

Tlx:---------

E-Mail: [email protected] 73. Napier Road Branch Branch Code : 0049 Address : Ishaq Chamber, North Napier Road, Karachi. PABX No: (021) 2549581-3 Fax No: (021) 2549585

Tlx:---------

Direct: (021) 2549588, (021) 2549587 E-Mail: [email protected] 76. S.I.T.E. Branch Branch Code : 0054 Address : B/17, Estate Avenue, S.I.T.E. Karachi, 75700 PABX No: (021) 2585913-17 Fax No: (021) 2585525 Tlx:-------

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Direct: (021) 2585911, (021) 2585912 E-Mail: [email protected] 83. Metroville Branch Branch Code : 0088 Address : G-50, Block-3, Metroville-1, Karachi PABX No: (021) 6762532-5 Fax No: (021) 6762541 Tlx:------Direct: (021) 6762527, (021) 6762528

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E-Mail: [email protected] South 2 Region

Branch Code : 0043

89. Hyderabad Branch Branch Code : 0016 Address : 332-333, Saddar Bazar, Hyderabad. P.O.Box 470 PABX No: (022) 2783616,2783618, 2784745 Fax No: (022) 2783617 Tlx: 22054 ACBL PK Direct: (022) 2783615, (022) 2784760 E-Mail: [email protected]

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91. Nawabshah Branch Address : Katchary Road, Nawabshah

Branch Code : 0081

PABX No: (0244) 9370460-64 Fax No: (0244) 9370467 Tlx:-------Direct: (0244) 9370466, (0244) 9370465 E-Mail: [email protected] 94. Cantt Branch Address : Bolan Complex, Cantt Area, Quetta PABX No: (081) 2882101-2

Branch Code : 0029

Fax No:----Tlx:--------Direct: ------------,-----------E-Mail: [email protected]

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98. Satellite Town Branch Code : 0091 Address : Kasi Plaza, Sirki Road, Satellite Town, Quetta PABX No: (081) 2451535-36 Fax No: (081) 2451538 Tlx:-------Direct: (081) 2451530, (0333) 7804779 E-Mail: [email protected]

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PRICE Pricing Policies At Askari Commercial Bank Limited the pricing strategies applicable are:  One price strategy  Flexible price strategy  For Priority Customers many of the charges are waived in order to facilitate them and provide them with high-class services.  The bank staff in higher posts is also in a position to waive some charges in order to oblige their customers.

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 So the pricing strategies are adaptable and stern depending upon the type of the customer. The Bank offers deposits at competitive prices.

FINANCIAL ANALYSIS The importance of financial statements lies in their utility to satisfy the questions in the mind of different stakeholders. Different classes of people are interested in the financial statements analysis with a view to assessing the economic and financial position of any business or industrial concern in or profitability, liquidity or solvency etc. for example, the commercial banks are mainly interested in short term liquidity and profitability while prospective investors may be interested in long profitability and solvency. Financial statements, among other things, include balance sheet and income statement. Balance sheet presents assets and liabilities of the business at a given date. Beside, showing the ability or the business to servic3e the loans on the strength of its financial structure and on the history of its profitability, it helps in judging the impact of financial and fiscal and in evolving secured basis for extending such . Likewise, apart from showing the progress and profitability or a business, income statements disclose, how the business has been conducted and determines factors behind a rise or decline in the net worth. The purpose of analysis of financial statements is to examine past and current financial data so that a company’s performance and financial position can be evaluated and future risk and potentials can be estimated. The analysis can yield valuable information about trends and relationship, the quality of a company’s earning, and it financial strengths and weaknesses. The analysis would answer questions like:  Is the business expanding or contracting?  Is it more profitable than last year or less profitable?

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 How efficiently is the capital employed in the business being utilized?  Does the business have any financial problem?  And much more To evaluate financial statements, an analyst must:  Be acquainted with business practices;  Understand the business and ing terminology; be aware of ing conventions and limitations of ing;  Be acquainted with the tools of analysis of FS

Balance Sheet of ACBL

BALANCE SHEET AS AT 31ST DECEMBER, 2004-2005 (Rupees in 000) Rs Rs 2004 2005 ASSETS: Cash and balances with treasury bank 8,762,866 Balances with other banks 4,847,899 Investments 17,239,156 Lending to financial institutions

11,766,925 5,550,148 25,708,194

Investments Advances Other assets Operating fixed assets Total Assets

2,324,839 10,172,242 69,838,392 85,976,895 1,559,365 2,732,641 2,595,023 3,192,862 107,167,540 145,099,907

LIABILITIES Bills payable Borrowing from financial institution Deposits and other s Liab.against assets subject to fin. lease Other liabilities Deferred tax liabilities

1,227,093 13,781,555 83,318,795 14,159 1,282,980

Sub-ordinated loans Total Liabilities Net assets

1,315,680 10,562,338 118,794,690 1,459 2,271,393

526,866 567,217 1,000,000 2,999,700 101,151,448 136,512,477 6,016,092

Represented by: 109

8,587,430

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Share capital Reserves Un-appropriate profits

1,255,848 4,317,301 ----5,573,149

1,507,018 5,862,074 ----7,369,092

442,943 6,016,092

1,218,338 8,587,430

Surplus on revaluation of assets – net of tax Contingencies and commitments

Profit and Loss of ACBL PROFIT AND LOSS FOR THE YEAR ENDED DEC. 31, 2004-2005 Figures in '000'

Mark Up/Return/Interest Earned Mark Up/Return/Interest Expensed Net Mark Up/Interest Income Provision against non-performing Loans & Advances Value of investment Bad debts written of directly Net Mark Up/Interest Income after provisions Non-Mark Up/ Interest Income Fee, Commission and Brokerage Income Dividend Income Income from dealings in foreign currencies Other Income Gain on sale of investment Total Non-Mark Up/Interest Income

2004 2005 RS RS 4,487,206 8,780,698 1,117,206 4,278,374 3,370,000 4,502,324 277,398 638,547 38,066 (36,555) 7 ---315,471 601,992 3,054,529 3,900,332 708,377 26,318 180,992 177,648

838,561 51,143 356,218 206,819

540,193 99,825 1,633,528 1,552,566 4,688,057 5,452,898

Non-Mark Up/Interest Expenses istrative Expenses Other Provisions Other Charges

1,845,179 2,591,985 --------138 1,832

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Total Non-Mark Up/Interest Expenses

1,845,317 2,593,817 2,842,740 2,859,081 2,842,740 2,859,081 876,089 828,774 --(188,247

Profit Before Taxation Taxation-current -prior years -deferred Profit After Taxation Un-appropriated Profit Brought forward Profit available for appropriation Appropriations: transfer to: Statutory reserve Capital reserves (reserves for issue of bonus shares) Revenue reserves Proposed cash dividend (Rs.1.5 per share; 2004: Rs.2 per share) Un-appropriated profit carried forward Basic / diluted earnings per share – (Rupees)

111

43,611 196,558 919,700 837,085 1,923,040 2,021,996 ----1,923,040 2,021,996 384,608 251,170 1,036,092

404,399 497,315 894,229

251,170 226,053 1,923,040 2,021,996 ---------12.76 13.42

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Askari Commercial Bank

ASKARI COMMERCIAL BANK LIMITED MULTAN Askari Commercial Bank Limited Multan was inaugurated on December 28,1994. It is located on Abdali Road Opposite to PIA Office. The location is connected to all the main trade centers in Multan. It is a prosperous branch streaming towards great achievements. At the time of its establishment the factored who were considered are as follows  Multan is zone covering a large population.  Multan City is linked to many big cities.  Agro based area constituting growers and gainers  Army Offices & Fort Colony  Educational Institution The total strength of staff in ACBL Multan is 70. They are dedicated their work. The branch is progressing rapidly. Under the dynamic leadership of Vice President Mr. Sajjad A Sjheikh and Operational Manager Mr. Shaukat Hayyat Babar Competitors of Askari Commercial Bank Multan Here is the list of different national banks and private banks along with their branches available in the Multan market.

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COMPETITORS OF ASKARI COMMERCIAL BANK MULTAN BRANCH.

SR.NO. BANKS

BRANCHES SR.NO. BANKS

BRANCHES

1

Askari Commercial Bank

1

10

United Bank Ltd.

21

2

Bank Al-Habib Ltd.

3

11

Prime Bank Ltd.

1

3

Bank Al-Falah.

1

12

First Women Bank 1

4

M.C.B

22

13

Habib Bank Ltd.

28

5

National Bank of Pak.

22

14

Allied Bank Ltd.

17

6

EBI

1

15

Soneri Bank Ltd.

1

7

Bolan Bank Ltd.

1

16

Bank of Punjab.

10

8

Platinum Bank Ltd.

1

17

Metropolitan Bank. 1

9

Saudi –Pak Bank

1

18

Faisl bank

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Organizational Hierarchy

Branch operation Manager

Cash/Deposit



Retail

s

Department

opening

Banking

Department

Department

Department

Customers

Clearing

Bills/

Services

Department

Remittance

Department

Department

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Agri. Credit Department

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Market Comparison If we compare the ACBL products with all other banks available in the market we can see that ACBL is providing some advance and quality services to its customers. Most important thing in this comparison is related with the deposits of the branch with other banks, in which we can see that the deposits of ACBL are far better than the other banks.

Goals and Objective Every Marketing Department has its goals and objectives and according to their plans they set their goals and objectives. ACBL marketing department has also some goals and objectives, which ultimately focus the customer is, needs and wants satisfaction.  Introduced new relationship Deposit TSD Credit Increase number of s Identify target market Identify prospective customers  Introduced bank products in target market On-line ATM Quality Service  Activate dormant s

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DEPARTMENTS The Askari Commercial bank has following department:  Opening department  Cash Department  ATM Department  Department  Remittance Department  Clearing Department  Foreign Trade Department  Credit Department  Credit Card Department

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OPENING DEPARTMENT Borrowing funds from different sources has become an essential feature of today's business enterprises. But in the case of a bank borrowing funds from outside parties is all the more vital because the entire banking system is based on it . The borrowed capital of a bank is much greater their own capital. Banks borrowing is mostly in the form of deposits. These deposits are lent out to different parties. Such deposit creation is done through opening an in the Bank. In ACBL Multan Mr. Asaad Bhutta is operating the opening department along with performing some auxiliary functions of Check Book Issuing.

TYPES OF S In ACBL, there are the following types of s:  Current .  Saving .  Askari Special Deposit .  Term Deposit.  Basic Banking  Ever Green

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CURRENT In current there is no interest on it. It is for only transaction purposes. They are paid on demand. When a banker accepts a demand deposit, he incurs the obligation of the paying all cheques drawn against him to the extended of the balance in the . As there is no profit paid on this it is also called chequing because cheques can be drawn on it. Current is mostly opened for business. Following is a brief description of the current

DEPOSIT

RATE OF

MINIMUM

PAYMENT

PRODUCT

SCHEMES PLS

RETURN 2.50%

BALANCE UPTO---

OF RETURN 6-

BASE MINIMUM

SAVING

24,999

MONTHLY

DEPOSITS

MONTHLY BALANCE Rs.10,000

SAVING The purpose of this is to induce the habit of saving individuals in the neighborhood. The profit is on the basis of 8.5% per 6 month. The minimum deposit for opening the is Rs.100/-. Though individuals open such s for saving purpose, persons belonging to Armed forces, and different military institutions are free to use this on current basis. Following is a brief description of Saving

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DEPOSIT

RATE OF

MINIMUM

PAYMENT

PRODUCT

SCHEMES PLS

RETURN 2.50%

BALANCE UPTO---

OF RETURN 6-

BASE MINIMUM

3.00%

24,999 25000TO

3.50%

99,999 100,000 TO

4.00%

999,999 1,000,000

SAVING DEPOSITS

MONTHLY

MONTHLY BALANCE Rs.10,000

--------

ASKARI SPECIAL DEPOSIT ASDA is an interest bearing current interest is paid. The payment of return is monthly, where as the rate of return with aspect to the amount of minimum deposit clear from deposit schedules in following table). It is also chequing because cheques can be drawn on it. It is necessary for this that the client must maintain a minimum balance of Rs. 50,000 at the end of the month. That’s why it is similar to current . It is mostly opened by Business but individuals to open this .Its code is 165.

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DEPOSIT

RATE OF

MINIMUM

PAYMENT

PRODUCT

SCHEMES

RETURN

BALANCE

OF

BASE

1.50%

50,000 TO 999,999

RETURN MONTHLY

MONTHLY

2.00%

1,000,000 TO

MONTHLY

AVE. BAL. MONTHLY

2.50%

4,999,999 5,000,000 TO

MONTHLY

AVE. BAL. MONTHLY

2.75%

19,999,999 20,000,000 To

MONTHLY

AVE. BAL. MONTHLY

3.00%

99,999,999 100,000,000 AND

MONTHLY

AVE. BAL. MONTHLY

ASDA ASKARI SPECIAL DEPOSIT ACC.

ABOVE

AVE. BAL

TERM DEPOSITS A term deposit is a deposit that is made for a certain periods of time at the end of the specific period. The customer is allowed to with draw the principle amount . ACBLs Term deposits are of types clear in the deposit scheme in the table). One of them is "Askari" Advantage one month. The rate of return on this is 9.75%. The term deposit vary one month to 5 years and the min balance requirement is Rs.5000/- for all following s The amount of profit is given to depositors in three ways: By cash By sending a bank Draft to depositors Home address or Officers or whichever is specified as mailing Address. The amount is credited in any one of the checking s of the depositor.

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DEPOSIT SCHEMES PLS TERM DEPOSIT

Askari Commercial Bank RATE OF

MINIMUM

PAYMENT

PRODUCT

RETURN

BALANCE

OF

BASE

4%

5,000

RETURN MATURITY

4.5%

5,000

MATURITY

DAILY

5%

5,000

MATURITY

DAILY

5.5%

5,000

MATURITY

DAILY

1 YEAR

6%

5,000

2YEARS

7%

5,000

1 MONTH 2 MONTHS 3 MONTHS 6 MONTHS

3 YEARS 5 YEARS

8% 9%

5,000 5,000

SIX MONTHS SIX MONTHS SIX MONTHS SIX MONTHS

DAILY

DAILY DAILY DAILY DAILY

Basic Banking This is only for Salaried Persons. is opened just for 1000 rupees.In one months any person can withdraw upto two times through cheque and through ATM at any time .Its code is 021.

Ever Green This is for those people who want to borrow Agri Loan.Its code is 025.

OPENING PROCEDURE

For the s (C/A, ASDA , SAVING) , there are different types of holders are required for all these types of holders. The operation

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/procedure requirement that is needed for " Individual " differ greatly from " t " proprietorship "Partner ship “, "Limited Company" and "Club society or Association " as explained below. INDIVIDUAL'S When a single man or women opens an in his/her own name and has the right to operate it is called individual . DOCUMENTATION REQUIREMENT For literate person copy of National Identity Card is required as a primary requirement. For illiterate person and Veiled Women, along with the copy of National Identity Card requirement he or she must come in person for opening the . OPERATION  The person place a "Check Mark " in the type of and type of operation required  He/She fills in part-I of the form , a fix his /her either two or four similar signature (or thumb expression in the signature space) and get it introduced and signed by a person who already has an with the bank and write his number in the specific rows in a specific space.  The person fills in "next of Kin " position where he/she father, mother, husband/wife or any other relative's name, his /her address, phone no and affix his/her signature to certify this requirement. This requirement is needed because in his/her absence bank can have correspondence with the specific person.  The person put her /his signature (" or thumb expression) on the signature Specimen Card (SS CARD) similar in the area on the form. One the back of S.S card mailing address, telephone no, Person to

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and introducer space is filled in. All these requirement are necessary for future  The person deposits the initial amount for opening on to the cash counter.  The person put his signature on form -A (check book requisition) on two places in "authorized signature" and fills in the "Title of space by writing his name.  If the person put his signature in Urdu or any language other than English, he signed a "Vernacular form" where under take that affixed signature are original and his own signature and two postal size photos are needed.  The next day is the opening of . T When two or more persons, neither partners, nor trustees, open an in their name is called t . Husband and wife or two persons of same sex can open t . DOCUMENTATION For t copy of National Identity Card of all the persons is obtained other things remaining same as in individuals . OPERATION  The person checks the type of amount and type of operation required in the respective box on the form.  The persons fill in the Part-I and part-II in the form.  Signature

of both persons are obtained on the form in the area

specified for signature and S.S. Card.  In the title of space names of all the persons are mentioned.  s holder specified in the form that they will operate the form singly or tly. 123

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PROPRIETORSHIP When an owner of a firm operating singly, opens an in his firm name, this is called a proprietorship the proper himself liable for all his acts. DOCUMENTATION REQUIRED For this kind of , an application for opening the on the firm letter -pad (having the firm name) is required along with the N-I-CCard of proprietor. OPERATION All operation remains the same except that the firm name is written in the "Title of the " area and signature of the proprietor are affixed in the S.S. Card and the area specified for signatures on the form. PARTNER SHIP The is opened in the firm name and all partner designate one two persons to act on behalf of the partner ship firmer all acts on behalf of firm. The partners in the partnership firm are liable for the acts of the firm tly and severely. Every partner has in a firm has an implied authority bind his co. partners by drawing and enclosed cheques.

DOCUMENTATIONS  Copy of C. N.I. C of all partners  Application to open the on the firm letter pad.  Partner ship deed in case ed partnership firm.  Letter showing the implied Authority of one or more partners to act on behalf of the firm.

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 In case of non -ed partnership firm, understanding on behalf of the firm to remain liable for all acts of the firm.  Name, address of all partners is written on the pad. OPERATION All other requirement remain same except that the form is dully signed by all partners cards are signed by all those partners who will act on behalf of the firm and along filling part-I , Part-Iv is also filled. LIMITED COMPANY This is for limited companies. In order to facilitate their transaction with outside parties, bank provides many facilities. DOCUMENTATION REQUIRED  Memorandum of Association.  Articles of the Association  Resolution of the Board of Director.  Certificate of Incorporation.  Certificate of commencement of business  C-N-I-C OPERATION The persons authorized in the Resolution of the Board of Directors put their signatures on S.S Cards. Next of kin "requirement "is not need in case of a Limited Company. After completing each and every formality, introducer signature is verified by S.S card and is stamped "Verified" customer signatures are itted by stamping "itting" near signature and again signatures on S.S card are itted in the same way. The same process of verification and ission of the signatures is repeated on Form-A and next of Kin area.

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After completing each and every formality, ant is open in the computer by writing name, address, A/C Number etc. LETTER OF THANKS At the start of the letter 2nd day, ACBL issues letter of thanks to " opener" and " Introducer " for the trust the have on ACBL.

OTHER RESPONSIBILITIES CHECK BOOK ISSUING Check books are issued only for checking such as current , saving and ASDA . They are not issued for other fixed and term deposits because of their Long term s “nature.” ISSUING PROCEDURE  Signatures on cheque – book requisition are verified by matching with signatures on SS.  Cheque – book leaves number, number, holder’s name are mentioned in the cheque- book is made by mentioning the and the total of sum of excise duty and provincial tax.  The name of A/c holder and date of cheque – book issuance is written on cheque – book requisition the -opening officer puts his initials on requisition leave.  A/c number is stamped over the leaves of cheque – book and finally authorized person affix his signature over the debit voucher and he voucher is attached from the cheque book and is handed over to the customer.

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RECEIVING INWARD CHEQUES Another responsibility and function of Opening Department is to receive Inward cheques for collection of other Banks as well as of ACBL. Then these cheques are sent to clearing official who clears these checks at SBP from other banks. CLOSING is closed on the written request of the customer ACBL debits Rs. 100/- as charges for closing the customer from that . The holder with draws the amount by writing a cheque and just leaves Rs. 100/- in his . But to surrender the cheque book yet if some leaves are yet to be write to the bank as a necessary requirements for closing the . PROCEDURE  The customer for individuals write an application to the manager of the bank an a simple paper about the closing of his with the bank (In case of proprietor ship partnership and limited company the application should be written an firm or company letter –head)  The individual or in case of other type- proprietor firm and company surrender the cheque book to the bank.  The cheque book is then torn from one side and is attached with the application.  In case of Ltd. Company resolution of the board of directors is also obtained to attach it with the application.  The opening form of the holder is taken from the -opening file, and the application, cheque book, and resolution of board of directors in case of limited company are attached with the form.

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 Lastly, it is written in “Red Ink on the form that closed” and “Date of closing.”

ATM- CARDS DEPARTMENT This department deals in issuing ATM-Card, term deposits Mr. Waseem deals this department.

ATM CARD ATM – Cards are only issued to Holder ISSUING PROCEDURE  The person, first open the within the blank.  Then he fills the ATM application form in which name of holder, Fathers name number and C.N.I.Card number are mentioned.  A copy of C.N.I.C is also attached with the application form.  After completing this process, the application package is sent to head office  ACBL head office takes a period of 2-3 weeks for preparing and processing of ATM – cards. First, list of card holder is issued and then after 15 days cards are send to ACBL’s issuing branch. The card and list are not sent simultaneously in order to avoid any mishandling.  ACBL takes Rs. 200/- per year as charges for a card

TERM DEPOSIT Any person can open a term deposit. He needs not have an in the bank. PROCEDURE  The customer comes to the bank and specifies the number of days for which he wants to Deposit hid money in term deposit.

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 The credit voucher is made for the amount of cash to be deposited. The presence of is not necessary.  The term deposit form is then filled by the officer. The date of opening, the period, the name of the customer, the signature etc is all written on the form.  The term deposit Receipt is filed according. All the requirements are carried out, the signature of the customer and the authorized officer, the stamp of the bank etc.  The term deposit Receipt is then given to the customer.  The number of the term deposit form and term deposit is noted receipt is then given to the customer.  The number of the term deposit form and term deposit receipt is noted in the term deposit .  After completion of the form, it is posted in the term deposit file.  A 0.2% tax on the provincial amount is taken while issuing the receipt.  A credit voucher made and the amount is credited to the tax on TD.

CASH DEPARTMENT Cash department of Bank Alfalah works under the operation department. This department is given the complete responsibility of cash, as result of transaction in touch local and foreign currencies. It is also responsible for the book keeping of these transactions and the safe custody of cash. This department performs the main function. Cash receipts Cash payments

Cash Receipts

In cash department depositors use deposit slip for depositing the

amount into their s. The officer checks if the deposit slip is properly filled up containing title of , A/C number, date and amount in words 129

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and figures. Detail on both counter file and cash receipt voucher should be the same. Cash receiving officer, after twice counted and matched with the deposit slips will handover cash to the customer. The cash details are written on the back of the deposit slip and are also entered in cash receiving . Cash received stamp is affixed on the face of the deposit slip along with the signature of the cash receiving officer.

CASH PAYMENTS

First the cheque is presented by the customer or holder to cash

payment officer. He confirms that it is drawn on the same branch and the particulars of cheque are properly filled in. one signature of the holder is taken on the back of the cheque. Cheque is handed over to the officer cash department for scrutiny where officer checks the date, amount in words and amount in figures, payee’s name, crossing if any, number, cheque serial number, any material alterations / endorsements and signature of the customer. is debited and then the officer cancels cheque. It is posted in the system and posting stamp and number is affixed on it. Cheque is handed over to the cash payment officer for payment. One more signature on that back of the cheque is taken from the holder to match with the first one, and then cash is paid to the cash detail is written on the back of the cheque. Cash paid stamp is affixed on the face of the cheque. Entry is ed in the cash payment and system.

S DEPARTMENT s department is a department which deals and checks all the activity of all the department .It also deals in expression of finance of the bank. Salary payment is also one function of the bank.

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CHECKING BANK’S DAILY ACTIVITY s department deals and checks the entire working of the Branch; all the vouchers that have been posted at the computer are scrutinized in s department. The “End of Day” i.e. computer print is also received from the computer. The next day the activity is separated some statements from the “End of Day”. Then next day activity separated some statements from the “End of Day”. The vouchers are sorted out head wise. The vouchers are matched with the entries in the statements. Any abnormality if occurs, is immediately dealt with. All the vouchers and instruction are checked individually against the computer printouts. After checking they are signed by Mr. Naeem Shahzad and the internal auditor Mr. Shafiq. OTHER ACTIVITIES Preparation of daily bank positions statement Payment of salaries Preparation of the statements Depreciation calculation

REMITTANCES DEPARTMENT Remittance department provides services to the customer of the bank. The main function of this department is transfer of funds.

INSTRUMENTS OF BILLS & REMITTANCE DEPARTMENT The instruments that are handled in the B & R department are as follows:  Demand Draft.  Traveller’s Cheque  Telegraphic transfer.

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 Mail transfer.  Pay order.  OBC.  IBC.

DEMAND DRAFT A demand draft is an instrument, which is drawn by one bank upon another bank for a specific sum of money payable on demand. It is made by the bank and given to the purchaser against cash or cheque. If two banks are involved, then one banks sends a DD to another bank. But in customer - Bank case the customer sends his DD to the receiver. ISSUANCE PROCEDURE  A demand draft application (Annexure--) to given to the customer, he fills in a relevant information and signs it.  The Officer in charge then checks the information form.  The charges such as commission, excise duty, postage is charged as per effective schedule of charges. Tax is exempted if he is taxpayer & knows his No.  In case of cash deposit the cashier counts the amounts & signs the DD application and enters it in the .  The cash received equals the amount of remittance & the cheques there on.  Then the officer of the bills & remittance department signs it and operation manager counter signs it.  The entry is made in the DD issuing .  It is given to the customer.  The vouchers and the DD form given for posting at the computer.  The DD advises are printed at the computer and mailed to the respective branch. 132

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NOTE  On the contra, when a DD is received i.e. a customer comes to us with the DD, the procedure is as follows.  The DD credit advice is received through mail. The No’s are checked & signatures are verified.  An entry is made on the DD payable , and the vouchers are made.  the Branch

Dr DD payable

Cr

 The DD credit is attached with the vouchers and given for the posting at the computer.  When DD is received, the test No’s are checked, and the payment is made.  The vouchers are given for posting. And the entry that was made in is closed. i.e. DD payable is Nil.

Traveller’s Cheque The range of our products and value added services enhances with introduction of Rupee Travellers Cheques (RTCs) launched in March 2002. In spite of our constraint on issuing higher denomination of RTCs against restrictions imposed by the Central Bank of Pakistan we have been striving to attain our shares with sizeable portfolio. Total volume handled by the department during the year 2004 is Rs. 798 Million. The safe way to carry cash.....another Valuable Financial Service Going places? Don't leave home without the convenience of Askari Travellers Cheques in your pocket. Available in the denomination of Rs.10,000/-, it's light, safe and ideal for all travel purposes. Welcome to another valuable financial solution from your trusted bank.

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Free Issuance You don't have to pay any service charges for purchasing Askari Travellers Cheques. You can buy these either against cash or debit to your personal . Simply visit any of our branches located all over Pakistan and enjoy the privileges of buying Askari Travelers Cheques

Earn 0.10% encashment Commission This matchless feature lets you experience yet another innovative customer care solution. You will receive 0.10% commission whenever the traveller cheque is encashed after 30 days of holding. Enjoy Added Safety & Security With our state-of-.the-art in-built security features you can be rest assured that this is the best way to make and accept payments. High security lithography, ultra violet printing, special thread, anti scanner pyramid design and unique micro lines, all done and printed in UK gives you the comfort of dealing in the most safest substitute for cash, easily refundable in case of loss and theft.

TELEGRAPHIC TRANSFER A telegraphic transfer is a fastest & safest way to transfer money. The message is fixed. ISSUANCE 134

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 The request for maintenance through T.T is taken on the standard printed form.  The customer fills it & signs it.  The Head & remittance department checks it, the charges such as commission, tax, telex as per effective schedule and signs it.  If he fills the tax exemption from then no tax is levied.  Then a neat T.T is made on the white slip. There are 3 copies. The original faxed to the Branch, one to the Head Office and one is kept as record.  The entry is made in the TT issuing .  The following vouchers are posted.  Commission Charges

Cr

 Fax charges

Cr

 W.H. Tax.

Cr

 When commission bill is received, it is attached to the T.T office copy in the file. PAYMENTS  When a T.T arrives, the test numbers are checked and the signatures are verified.  The entry is done in the T.T pay able .  The following vouchers are prepared & given for posting.  Head Office

Dr

T.T Pay able  T.T Payable.

Cr Dr

party A./C.

Cr

 If there is no a/c then the T.T receipt needs revenue stamps and then the payment is made. The T.T receipt is strictly non negotiable.

PAYORDER 135

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It is a cheque drawn by a bank on itself. Pay order is an instrument in which the parties are involved the purchase, the bank and the receiver. It can he purchased by any customer. It is usually made by govt. Bodies. A single bank is included in this case. ISSUANCE  The standard form is given to the customer; he fills in the detail and signs it.  The concerned staff checks the form.  Charges as per effective schedule are applied.  The cash of the pay order is received.  A cost memo is signed, stamped and handed over to the applicant as a receipt.  Then the pay order receipt is filled accordingly.  Counter foil is also filled.  An entry is made in the pay order issued .  Then the authorized office after checking the pay order signs it.  The pay order is then handed over to the application after obtaining his signature on the P.O form.  A voucher is also made and posted at the computer Cr bills payable P.O issued.

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PAYMENT  On representation of the pay two authorized officers of the branch sign order receipt the receipt.  The P.O entry is made in the P.O issued .  Then the amount is credited to the of the customer or paid in cash.  The P.O is posted at the computer.

PAY SLIP It is an instrument used by the bank s for its payment. The slips are issued to the employees of the banks their bills & invoices. The bills are transferred payments. In this case only one bank is involved .He is the issuer as well as the payer. Procedure prescribed for P.O for issuance and payment is followed for payment is followed for pay slips with the following expectations.  Pay slips are issued by the bank for the settlements of this own payment.  No excise duty is applicable on P.S. ISSUANCE  A credit voucher is sent from the s dept. to the b debt. According to the b debt.  The P.S books is taken out & filled according to the credit voucher.  It is entered in the P.S./P.O .  It is signed by, an authorized officer, Operational Manager Mr. Abdul Jabbar Qureshi.  The pay slips is handed to the customer.  A voucher made and posted payment.  The P.S. is received on the counter, clearing or transfer.  On receiving the P.S. if it is transferred in the P.S. . 137

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 The payment is made and the P.O. is posted at the computer.  Dr. Bills payable P.S. issued.  If Askari branch is in that city, the OBC forwarding schedule in sent to that Askari Branch. Otherwise it is addressed to the particular Branch to whom the cheque belongs.

OUTWARD BILLS FOR COLLECTION The bills, which are sent to their cities banks for the local clearing in that city, are called outward bills for collection. PROCEDURE  The cheques that are banks in other cities are separated.  They are entered in the OBC , the number is written on the stamps.  The OBC forwarding schedules are prepared for the different branches.  The respective cheques are attached with the schedule.  Two authorized officers sign the schedule.  The office copy is filled and the original schedule is mailed.  On clearance the respective banks send back the OBCS along with IBCA. Inter branch credit advice.  The OBC no are checked for the OBC and the received any entry is made.  Charges i.e. commission charges and postages charges are deducted from the A/C.  Vouchers of following entries are made.  Party A/C

Dr 138

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Cr

Postage charges

Cr

 At the end of the day the contra vouchers are.  OBC collection

Dr

OBC lodged

Cr

 OBC collection

Dr

OBC lodged

Cr

INWARD BILLS FOR COLLECTION The bills are received from other banks out of city for the local clearing are called inward bill for collection. PROCEDURE  The OBC of the other branches will be the IBC’s of this branch. So an OBC forwarding schedule is received by mail.  The cheques are entered in the IBC . The IBC numbers are allotted to them.  The cheques are lodged for clearing.  After realization, an IBCA is prepared and mailed to the branch.  At the end of the day two contra vouchers are made & posted. IBC collection

Dr IBC logged

IBC Collection

Cr Dr.

IBC lodged

Cr

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OTHER FUNCTIONS BALANCING THE At the end of the day, all the s are balanced with the computer balances. The heads and checked are as follows.  DD payable  IBC collection.  MT payable.  OBC lodged.  OBC Collection.  TT payable.  IBC lodged.  Bills payable. P.S. issued.  Bills payable P.O. issued. If the payables are not cleared for a lot of days, a reminder is sent to the respective branches.

CLEARING DEPARTMENT “The process by which cheque exchanged between the collecting and paying bank and the ensuing financial settlement is called “clearing”. This facility is provided by the state bank of Pakistan for offsetting of cross obligations between the different banks. Clearing is of two types. 1)

Inward clearing

2)

Outward clearing

Inward Clearing When cheque drafts, etc, of our branch presented to us for clearing by the SBP. Cheque to be honored by bank.

Outward Clearing

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The cheque of other banks, which the holder deposit in their s is, sends for collection. CLEARING PROCESS (INWARD/OUTWARD) Here the local cheques are received that are drawn on BAL. All the cheques are received on one counter along with the paying slips duly filled in properly containing particulars of cheque and holder. Counter folio of paying slip is handed over to the customer by putting stamp for cheque received for collection for Bank Alfalah on it duly signed by officer. These cheques are scrutinized and cheques for local clearing are separated from OBCs. These are then entered in clearing and cheques for collecting are entered in OBC and handed over the bills department of collection. Clearing officer checks and verifies title of all the cheques deposited by the customer to confirm the good title of the cheques. Cheques are scrutinized properly and paying slips are separated from cheques. Special crossing, endorsement and clearing stamps are affixed on the cheques. Cheques of each bank are sorted and arranged branch wise. All the cheques are then entered into the clearing system of bank. Print out of the clearing is taken and details are attached. With the cheques of each bank. Details of these banks are then entered into the clearing schedule containing number of cheques presented and their total amount against the name of each bank. Then total number of cheques presented to all banks and their total amount is written on the foot of that schedule, which is tallied with the clearing . Next morning, these cheques are delivered to the respective banks in clearing house of SBP between 9:00 to 9:30 AM. In the same manner, other banks present their clearing drawn on Bank Alfalah. Total number of cheques and their amount delivered to other banks are received from them are written on the clearing house schedule and handed over to the officer clearing house SBP. Cheques / DD received in clearing are given to the officer cash department of the branch for their repayment. After I proper scrutiny of cheques, verification of signatures and confirmation of balance in the , 141

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officer cash department pays these cheque by canceling and posting them in the system. If any cheque is not ed due to insufficient balance or any other reason, officer cash department returns the same cheque by attaching a cheque return memo containing reason for return. This cheque is entered into the cheque returned and bank charges are deducted according to the schedule of charges. Second clearing is called at 2:30 PM to check the fate of the cheques presented to other banks in the morning. If any cheque is to return, that is delivered to the same bank in second clearing. In the same manner, if any cheque presented by Bank Alfalah in first clearing is returned, they receive it and once again give schedule of clearing figure to the officer-clearing house SBP containing number of cheques and their amount delivered and received unpaid.

FOREIGN TRADE DEPTARTMENT Mr. Noor, Mr. Rahat and Miss Samia deals this department. Nature has distributed its wealth un-evenly. Some countries are rich in human resources other have mineral wealth in abundance and yet other have arable land and favorable climate conditions for agricultural production. This un-even distribution of resources basically determines the productive efficiencies of different countries. This is the point where different countries come together to exchange their competencies and efficiencies. The countries, which lack in any of the resource, start importing those resources from the country that is having excess of it. In this way the trade starts between different countries. Benefits of Foreign Trade: Following are the main benefits of foreign trade. 142

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o It enables the country to use its resources most profitably and efficiently. o A wide scope is available for a country for its surplus production. o International competition compels countries to produce quality products at competitive costs. o A country can earn foreign exchange by selling its products in the international market. Trade Finance Services of ACBL. With its presence in most export-oriented cities in the country, the volume of trade finance business ACBL is one of the highest in Pakistan. That is why most of the companies prefer banking with us. To the growth of our business partners' ventures, we offer them a wide range of services:  Documentary Collection  Import Letter of Credit  Export Letter of Credit  Guarantees  Bill Discounting Pre-shipment and Post-shipment Financing. Foreign Exchange Department works like the general bank departments with the difference that it deals in foreign currency. This department deals with the following: Import  Export  Foreign Currency s  Foreign Remittance  Submission of Monthly Reports to SBP

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IMPORT: The international trade transaction, in which one country buys goods from other country, is called import. The import trade in Pakistan is governed by import and export Act of 1950. Previously, the regulating body of imports was controller of Import and Export. But this function has been shifted to Export Promotion Bureau. Foreign Exchange Departments of all banks are restricted to word under the rules and regulations of government. Import License and Registration: The individuals and firms who desire to import goods from the foreign countries are required to obtain import license. Import licenses are a type of artificial restraint on the import trade of a country. To acquire import license, the importer has to submit applications to the licensing authority. The importers can only get their merchandize cleared from the custom authorities if they have the import license duly issued in their names. The import licenses issued by the Import Trade Controller are required to be ed with the State Bank of Pakistan.

Contract of sale: After getting the license, the importer then negotiates with the exporter. When they reach to an agreement on all of sale, they sign a contract. Thus contract includes all information of and condition of sale.

Letter of credit: Foreign trade payment problems are mainly solved by a letter of credit. A letter of credit is issued by the importer’s bank. If guarantees payment to the exporter up to specified amount of money provided the and conditions laid down the L/C are fulfilled. A letter of credit is a commitment on the part of buyers bank to pay or accept draft drawn upon it, provided drafts do not exceed a specified amount. 144

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A letter of credit thus is a (I) written undertaking by an importer’s bank to exporter’s bank. (II) that it will pay or accept draft drawn upon it up to a stated amount with a specified time. (III) the payment will only be made to the exporter if he compliers with the of credit.

Parties to a letter of credit: There are four parties involved in letter of credit.

1. party: The buyer or the importer on whose and request the letter of credit is opened is known as party or opener.

2. Issuing bank: The bank which issues or opens a letter of credit at the request of importer is called issuing bank.

3. Exporter or seller: The seller or the party in whose favor L/C is drawn is the exporter. He is also called beneficiary.

4. Negotiating bank: The paying bank in the exporter’s country, on which the draft is drawn is called negotiating bank or paying bank.

Opening of letter of credit: The main steps involved in the opening of the letter of creditor as follows: Application for letter of credit: The importer will request his own bank or any other bank, which deals in foreign trade transactions to issue a letter of credit in favor of the exporter. He will prepare an application on the prescribed form available from the bank. The information, which are supplied in the application are based on the contract of sale and include only the important feature of contract, such as value of merchandise, port of shipment, documents to be presented, port of unloading, brief description of goods, import license etc.

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Scrutiny of application: Before issuing a letter of credit, the bank will scrutinize whether the importer is of good financial standing, possesses the import license issued by import control. Authorities, the amount available covers the letter of credit applied for, market demand of goods, collateral offered to cover the credit etc.

Cash margin: The bank asks the importer to deposit cash or securities with the bank. The proper margin of cash or securities to be deposited is decided by the bank depending upon the credit worthiness of the importer.

Issuance of the letter of credit: The importer bank after being fully satisfied will issue a letter of credit in favor of the exporter. The L/C may be sent directly to the exporter or the advising bank in the exporter’s country. In such a case, the advising bank will inform the exporter about opening a letter of credit.

Shipment of goods: When the exporter receives L/C, he examines it to ensure that it conforms to the of contract of sales. He then shifts the goods and presents all required documents along with the bill to negotiating bank.

Role of negotiating bank: The negotiating bank after receiving all the documents and the bill from the exporter will scrutinize them whether these conform with the of letter of credit. If the documents of title accompanying the bill are in order, these will be sent to the importers bank for payment.

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On receipt of documents and the bill, the issuing bank will examine them. If the documents on the face appear to be in order, the payment would be released by the bank. In case any defect is found in the documents and the draft is honored by the issuing bank the importer can claim damages on the issuing bank. The issuing bank is only able for the completeness of documents, not to see whether goods conform to the contract of sale.

Payment by importer to the bank: First the importer pays all his obligations the bank then bank releases the documents. In case of sight draft, the importer’s bank pays the amount on the same day charging the importing customer’s . In case of a time draft, the importer discharges his obligations to the accepting bank on or before the maturity date of acceptance. The accepting bank will then release all the shipping documents to the importer.

Payment to the exporter: The exporter can obtain payment from the negotiating bank by discounting the draft (L/C) immediately after shipping the goods and obtaining shipping documents.

2: EXPORT SECTION The international trade transaction in which one country sells its goods to other country is called Export. The controlling body of export in Pakistan is Export Promotion Bureau, it gives different incentives to the businessmen for enhancing the exports and reducing the Balance of payment deficit. It restricts the export of some goods and reinforces export of other.

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Export section is another section of Trade Services Department. If any person wants to sell his or her products in the foreign countries, he can do all that with the help of export section of the bank. This department is responsible for the export procedures and documentation. This department handles export documents complying with rules and regulations prescribed by the State Bank of Pakistan. These rules and regulations are briefly described as under.  He must all in to sale contract with the importer.  He must be having with the bank.  He must have ed himself with CCI&E.  He must have export license from EPB.  He must have income tax certificate that would be only for export purpose.  He is not allowed to export to those countries for which Govt. has restrictions for foreign trade.  Full value of goods exported from Pakistan must be declared to custom authorities. Documents Required For Exports Normally following documents are required by the importer that the exporter must submit to the negotiating bank with the shipment documents. 1. Invoices: The invoice form is needed along with the export documents which are sent to the importers bank. In the invoice form different information is provided regarding the goods to be shipped. It contains the amount, rate, weight, description, sending and receiving parties names.

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]2. Bank Covering Letter. This covering letter is very important letter with the export documents, which are sent to the importers bank. The exporters bank provides this letter. It contains all the information about parties’ names and addresses, amount, tenor, date, goods, enclosures and & conditions.

3. Shipping Documents: The shipping document includes the buyers and buyer’s bank addresses, amount, tenor, shipping source and destination. 4. Bill of Exchange: The bill of exchange is the negotiable instrument for the payments. This is also very important to attach with. 5. Packing List: The packing list is also attached with the documents of export, which contains the information about the packing of goods being exported. 6. Bill of Lading. The shipping company issues bill of lading. It means that the goods have been shipped and that goods are in the custody of the master of the ship. In the bill of lading all information regarding the goods shipped are give. It also indicates that payment has been paid. 7. Insurance. The insurance of the goods sent for exports should also be maintained and attached with the other documents. 149

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8. Letter of Credit. The letter of credit issued by the importer’s bank is also sent to the importer’s bank after the review and acceptance. 9. Export Form. This is just like the import form. It is issued by the exporter’s bank, which contains the information about goods, quality, invoices, port, consignee, tenor, consignor and mode of shipment.

Foreign bill purchased (FBP): Following requirements must be fulfilled before the purchase of Foreign Export Bills. Exporter should be holder of the bank. Bank issues the FormE. Form-E should be filled correctly and then bank authenticates the E-Form. Exporter goes to the custom authorities for custom clearance. Shipping Company issues Bill of Lading or Airway Bill. Exporter should bring other documents like certificates of Origin, commercial invoice, packing list etc. Bank scrutinizes the documents. After fulfilling these requirements, bank purchases the export bill and makes payment for the value of goods in Pak Rupee to the Exporter.

Lodgment: Lodgment means making the payment to exporter by bank against the purchase of bill. Two types of rates are used in evaluating the amount: OD Buying rate/At sight rate: It is the rate of export bill, payment of which is to be received within 12 days from the date of lodgment. Usance rate:

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It is the rate payment of which is to be made at a future date, normally within 30, 60, 90, 120, 150, or 180 days. Realization: Realization means receiving the payment from the foreign bank for the export of goods. Other activities: In addition to Export and Import, there are also other activities performed in Foreign Exchange Department. 1.Foreign currency s: A depositor can open in US Dollar, Pond, Japanese Yen and Euro with nominated branches. For opening of a Form is provided to the person/party, introduction of the new holder or by the Officer of the Bank. Procedure of opening foreign currency s is same as other s. No Zakat is deducted on these s, no income tax deductions, no wealth tax deduction will be there, these incentives reinforce and motivate the people to invest in foreign currency s rather to keep foreign currency idle.

2. Foreign remittance: Bank also operates in Foreign Currency s. In accordance with instructions of SBP, foreign currency s are opened in these currencies: US Dollar, Pond, Japanese Yen, Euro. Funds are transferred abroad by Foreign Telegraphic Transfer Swift MT-100 is used for this transfer. Askari Commercial Bank has its agency arrangements in those countries, where its own branches are not established. Its agency arrangements with Citi Bank, American Express, ABN Amro, Standard Chartered Bank. Submission of monthly returns: It includes reporting of Form-M and Form-E to SBP. 151

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Reporting of Form-E: Every Exporter is required to submit a declaration of custom authorities for goods exported. This declaration is submitted on prescribed Form-E in quadruplicate, which is certified by authorized dealer. Four copies of Form-E are maintained. Form-E is reported to SBP at the end of the month, in which the amount is realized. There is a prescribed Performa used for the reporting of Form-E. It includes the reporting period, currency, Serial No. of Form-E, amount, Code No. of country and commodity. Reporting of Form-M: Every foreign bank deducts some charges form the value of goods. It is for miscellaneous purposes like foreign bank charges or foreign agent commission. Form-M is used to declare this outflow of foreign currency. At the end of the month of realization of the amount, Form-M is reported. It includes the list of Serial No. amount and purposes of every Form-M.

REFINANCING SECTION Refinancing is the credit facility for the exporters provided by the Govt. at lower rate of interest, just to boost the exports in the country. It was started in early 70’s. The interest rates are always changing in this facility. The state bank of Pakistan charges 8% and then bank will charge 10% from the customers. For banks this is free source of income because in this way funds of banks are not used. Refinancing is further divided into two parts.  Finance against Packing Credit (FAPC).  Finance against Foreign Bills (FAFB).

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1. FAPC Loan: This loan is on the basis of export contract. The shipment amount should be equal to the loan amount. It is approved within 48 hours or otherwise disapproved. If approved, the amount is credited in the of the party. This is also called pre-shipment loan.

2.

FAFB Loan:

This loan is under L.C. It involves the bank risk line because of the transactions between the banks. This loan is given against security and this is called post-shipment loan.

CREDIT DEPARTMENT Credit department is also one of the most important departments of the bank. It is called the mind of the bank. This department controls the affairs of bank related with the finances or loans. The credit department of Emirates Bank International also performs the functions relating to the credit istration and credit s. It performs following functions. Products & Services of Credit Dept. Our Credit and Marketing Department aims at providing complete financial solutions for its customers. Skilled professionals deliver contemporary corporate banking services in a personal manner. Committed to maintaining stable and long term relationships with our customers, Askari Commercial Bank combines personalized services with technological capabilities to deliver sophisticated banking solutions. Products and Services offered include:  Trade finance

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 Short Term Working Capital Finance  Local Currency Syndication Finance (Foreign Currency Syndication can also be arranged)  Medium Term /Long Term Finance  Term Finance Certificates  Offshore Loans  Advisory Role (Balance Sheet Restructuring). OBJECTIVES OF LENDING. In the modern economics, more than 90% business concern raises their funds from various financial institutions to meet their multifold transaction. Actually it very difficult for the modern businessman to run his business on a huge scale solely. He has to float his shares to the public or knock the doors of financial institutions, for example the banks. The most easy way to make fund available to seek assistance by such agencies including banks which have got surplus funds and will come to the assistance of producing units, distributing units and exchanging units. In this way of lending, the banks earn the profits in term of interest and mark-up. Selection of Borrowers: The selection of a reasonable and trustworthy borrower is complicated and at the same time very sensitive task which requires decision-making power from the bank employees. In the words of the manager of a branch of Askari Commercial Bank. “ Good selection of borrowers does the half task in the profit of the Bank.” So banks do not throw the money away but every application is tested carefully before being sanctioned. It is the policy of Askari Bank to provide a outline to all of its branches and on the basis on those requirements the bank select the borrower.

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Following are the main points, which are considered before lending. 1. Character: The bank inquires the character of the borrower in every aspect. Because this is the right way to judge his dealing and business tactics. When the bank get sure that this person has good relationship with us and in the business market, they give him the facility of credit. 2. Capacity: This factor is related with the ability of the borrower to manage his business successfully. So this is checked that either they have necessary management, ing and technical skills and the degree of experience in the particular line of business for which the finance is required. This ability of the customer can be judge from the trading results, turnover ratios, and collection of receivables and management of s payables. 3. Capital: The proportions of the borrower’s own resources to the of finance requested are the next point to receive the branch manager’s attention. This is checked that both the amount of loan required by the person is equal to his resources available in his business and will he be able to cover them out of his resources.

4. Cash Flows: The source of repayment should be ascertained at the beginning. For this purpose the financial worth of the customer is checked that either he is able to repay the loan by the sale of his inventory or from realization of the s receivables, then the loan is sanctioned.

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5. Collaterals: Security is to be correctly looked upon as the second source of repayment. As we have discussed that this is one of the most critical decisions for the credit management to sanction the loan that’s why they require any collateral by the customer for the security of the loan. In case the borrower is unable to pay his debts then the amount can be recovered by selling the collaterals. 6. Purpose: Another important factor, which is taken into the consideration by the bank, is that for what purpose the loan is being sanctioned. If the customer wants to get the loan for business purpose then he is given the preference over when he wants to get loan for personal use. 7. Period: It is the policy of every lender that first the period of the loan is decided. Normally the short-term loans are preferred to be sanctioned because of the lesser risks available. ACBL Bank has its own policy of lending. It only sanction the loans for short term period not for the long term period, normally these are less than or equal to one year. CLASSIFICATION OF ADVANCES The loans and advances given by the bank are classified into two parts.  Unsecured or Clean Advances.  Secured Advances. 1. Unsecured or Clean Advances. An unsecured advance is made against the personal reputation of the borrower with the bank. Normally these advances are given to the regular 156

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customers of the bank and have maintained a good dealing with the bank for many years. The policy of Askari Commercial Bank is to avoid such clean advances because of the unsecured nature. If the party is unable to repay the loan then it becomes very difficult for the bank to collect the loan. That’s why the bank uses this policy just to give this type of loan only to the exceptional customers.

2. Secured Advances: The word security means any thing given to protect the repayment of an advance. This is the policy of every financial institution to provide the secured loans to the customers. So secured loans are those, which are backed by the tangible security. A tangible is that which has a physical existence for example  Land and Building.  Stocks.  Share certificates  NIT Units.  Security of Cash in his .

TYPES OF ADVANCES: ACBL normally classify the advances into the following three major types.  Agricultural Advances.  Commercial Advances.  Industrial Advances. 1. Agricultural Advances: Agricultural advances are available for each of the following spouse. 157

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2. Farm Credit. These credits are provided for purchase of inputs development of agricultural land. Following are two main classes of farm credit. 3.Production Finance. This loan is provided to farmers for purchase of inputs like seeds, fertilizers and pesticides. 4.Development Finance. This loan is provided for the development of agricultural land like purchase of tractors, for tube well and for watercourse improvements etc. The basic purpose of these is to boost up the small agricultural industry to provide the opportunities of earning in agricultural sector. Non Farm Credit Following is the different type of small agriculture industry for which this loan is granted.  Live Stock.  Fish Form.  Dairy Form.  Forestry.  Sericulture 2. Commercial Advances: These are the advances which are given to the small business men, who want to start the business on a small scale. Such loans or advances are not of large amounts but of small amounts. 3. Industrial Advances:

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These advances are sanctioned to the industrial persons. The industrialists who are running their businesses on a large scale can get the facility of these advances. These advances are in large amounts required for the import and exports of the goods and services. These advances are given on the credibility of the parties. Credit istration: When some one wants to obtain the loan and his loan is approved, the work of credit starts. He prepares the documentations relating to the advances of the holders and makes the further processing. He also prepares all the related reporting and then sends it to the head office. He also maintains the documents, which are required by the state bank of Pakistan. The filing of all the legal cases is also maintained by the credit istration. After that the officers maintain the credit s and ledgers of the customers.

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CREDIT CARD DEPARTMENT Mr. Shafeeq deals this department. He told me that the bank is authorized to issue the credit card of two companies, which are under bank of America.  Master Card  Visa Card But due unavailability of visa card machine in Multan, ACBL Multan branch deals only Master Card. There are following types of master card.  Silver card  Gold card These are different due to their credit amount limit. For example for silver card, cardholder can take the maximum amount ranging between Rs. 25,000 to Rs, 180,000. For gold cardholder this limit has been Rs. 180,000 to 500,000. ISSUING CHARGES When the card is given to cardholder, there are certain fee charges to by the bank, which is different for different cards. Silver cardholder is charged Rs. 1700. Gold cardholder is charged Rs. 3500. ISSUING PROCEDURE Credit card is issued to three types of parties.  Professional (Govt & private officers)  Business man  Landlord. PROFESSIONALS For professionals bank require

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 Authorized letter from the concerned organization in which he works. This letter shows all particulars about the person, on the basis of these particulars; bank open on and some feasible amount is required. BUSINESS MAN In the case of businessman bank need  Balance sheet of businessman.  Type of business.  Turnover of 5 years. And then when it is sured that the business has the ability to cover the expenses of credit card and to pay it at any time, the bank issues the credit card. Land Lord In the case, the person is totally new, and the bank doesn’t know anything about him. For this bank need an having the amount over and above the credit card limit of that credit card. Usually, there is more chance of default in this case; so, the bank avoids issuing credit card to that person. PAYMENT PROCEDURE The cardholder should have to pay all the amounts what he has consumed. But in order to facilitate the cardholder, 5% is the minimum limit that the bank requires and that should be paid monthly. If you paid only 5% then 2% interests will be charged on remaining amount and it is added into the next month payments. If that 5% is not paid then Rs. 100 are the additional charges charged to the next month payment apart form the 2% interest.

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FUTURE PROSPECTS The outlook for the rest of the year 2006 remains challenging and is dependent on the success of the Government’s economic policies and n improvement in the investment climate. The bank’s commitment and endeavor to excel in rendering contemporary banking services along with acceleration of business mobilization will, Inshallah, further enhance the portfolio of its business, and the profitability, in the ensuing half-year.

LEARNING AS A STUDENT INTERN: There are following learning points for me in the bank.

First week Duties In my first week in Askari Commercial Bank commercial bank, they assigned me work in Opening Department.Mr Bilal Mehmood trained me very nicely and I learned lot of things in this department. He told me diffrenet s names and their codes.How to open the .  New Computerized national identity card is must for opening of new .  For current 10,000 and for saving 5,000 are required. What are the necessary requirements of different s to be opened. Other activities are  How to fill the deposit Slip if anyone wants to transfer cash in the or online transfer  How to fill the different s Form  How to fill the voucher for issuing of the Cheque Book for the first time

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 How to fill the requisition slip for the second time issuance  How to issue the Cheque Book  How to enter it in the  What are the procedures for the ATM card Accomplishments I m fully trained in this job how to open the different s ,how to issue the cheque book and enter it in the and how to transfer the amount through cash or cheque to an and how to issue a Debit Card.

Second Week In the Second Week they assigned me work in Clearing Department.Mr Jibran trained me very nicely and I learned lot of things in this department. Duties There are two types of clearing. 1. I/W (Inward clearing) 2. O/W (Outward clearing) In this week I entered the cheques lodged for inward clearing in clearing as their cheque number holder name cheque amount and bank name amount to be paid. Secondly in this week I prepared (O/W) clearing for next day. Same as entered cheque number holder name amount and Bank name. In this week I also entered cheque return in cheque return and put cheque return slip on cheque. Accomplishments I am full trained now in this particular job . How to fill cheque return slip? How to enter in I/W ,O/W clearing .

Third Week Duties In third week I perform following tasks relating to the banking system. 1. IBC (Inter bills clearing)

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2. OBC In this week I worked for IBC (Inter bills clearing) . IBC mean cheques lodged for clearing From other city. I entered these cheques in IBC if it is ACBL cheque then Mr. Jibran cleared or return this cheque and if it is cheque of other bank then it is again entered in O/W clearing ed and lodged next day for clearing. Secondly in this week I prepared OBC, filling of OBC slip as cheque number their amount OBC number and branch name. Accomplishments In this week I repeatedly performed this job and now I am fully trained in this job.

Fourth Week In Fourth week they assign me work for Remittances Demand draft and Pay order preparation. Duties Demand draft is for payment outside of city and pay order for local payment. It is a secure source of payment. There are no charges for Pay order while other banks charge for this service so it is an advantage going to ACBL bank to attract customers. Accomplishments In this week I repeatedly perform the jobs and I aIn m fully trained in such type of operations i.e to make the DD,Pay order and mark the Charges if Customer is not holder of the Bank then 255 Rs commision of the Bank.

Fifth Week Duties

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In this week I worked in s and Cash Department. In fifth week they assign me work in cash department. In cash department I learned about Receipts and Payments and about how to receipt cash and how to enter it in computer. In s Department how to sort the Voiuchers and preparation of Salaries Accomplishments I am fully trained in this job i.e to check that all the vouchers are acrutinized and matched with the activity

Sixth Week Duties In Sixth Week I worked in Forein Exchange and in Credit Department. They told me brief introduction about import and Export. Necessary Requirement about the Letter of Credit .What Documents are required for Import and Export Secondly in this week I learned about Advances from credit manager Mr. Ateeq. What are requirements for loan. It is a procedure that takes many days Accomplishments: I In this week I m fully Trained in these jobs

Problems faced by branch: During my internship at this particular branch of ACBL, there are following problems I have found which are directly affect on efficiency and performance of the bank. There problems are also called as an internal problems. So these are discussing below

1. Lack of communication among the employees: During the period of my internship I found this problem as a biggest problem that, they are not very effective in communication between themselves. They do not share the experience with each other and do not care the other employee. If one employee has a problem, then he asked to other, but he does not give clear solution to that problems. They are shows the facial

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expressions against each other.They are talk against each other in front of me. So finally it is very needy for a public services organization to keep atmosphere friendly among the management and employees. 2. Low Efficiency of employees: Efficiency of employees is also low at this branch. For example Mr. Assad Bhutta manager has 3 years experience at ACBL but he is not professional. Where he assign the result is zero. During my internship no body was satisfy from his performance.Sometimes he has done wrongly postings. 3. lack of computing skills: Computing skills are also low, some executive are very efficient in computing skills but some are not totally aware from this system. For example ATM machine at this branch is only handled to Mr. Naeem Shehzad manager. When operation manager is on leave branch faces problems about ATM machine. 4. Misuse of resources: Resource are very needy, so there must be avoid to misuse the resources but in this branch it is reverse case, there is very wrong use of the resources, employees does not take care of resources and not used them in right direction. For example every person misuse telephone service even guards they use it for personal matters.

NEW KNOWLEDGE ACQUIRED During the internship there is practical knowledge acquired about the banking sector. What activities are performed by banks and how to deal with public? Also commitment about work and operations of banks. Financing and credits and other public services are performed by the banks. What are implementations of banking rules in banking sector? And much learn about the various executive’s experiences and their skills. What is role of higher authority (manager) in decision making and how to solve the problems? How 166

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much money or reserves are used to meet the requirements in the branch. What are the duties of operation manager and how to pay cheques and all procedure relating to opening in the banks?

How Experience Impacts My Career I have gained a lot from my internship.I am doing Specializaion in Finance and in ACBL Bank I have learned a lot of work related with Finance .This helps me a lot to complete my specialization.My communication and negotiation skills are very much improved.How to Communicate with the professional People. ACBL is a very well known Bank and its products and services are very vast and customers are very much satisfied with the Bank.Its a lerning organization.ACBL is now emerging as one of the competitive banks in the banking sector.Doing internship in Askari Commercial Banl also helps me a lot for finding my job Inshallah in the future.

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SWOT ANALYSIS SWOT (Strength, Weaknesses, Opportunities & Threats) analysis of ACBL is described below:

Strengths:  As

ACBL

pursuing

the

path

of

Excellence

customer satisfaction remains its priority. It is only when we know our customers better, can we deliver a higher quality of services, thereby adding synergy to our existing management expertise, financial strength and profitability.  Bank

Chairman

Message

”our

core

philosophy

of

honesty,

transparency in customer dealings, product innovation, excellence in customer service and our commitment to being a responsible corporate citizen”  ACBL has got a well-developed on-line system in most of its branches. Remittance Department is working very dfficiently in transferring the funds of people due to this system.  The bank has also started ATM facility in most of its branches. 24-hour banking is new trend in Pakistan and ACBL has also taken apart in this trend.

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 One distinctive feature of the bank is that it is the only bank working for the welfare of army officers, which was established by Army Welfare Trust.  The productivity of the bank is very good. Bank is providing a high quality service to its customers.

 Askari Commercial Bank developing & delivering the most innovative products, manage customer experience, deliver quality service that contribute to brand strength, establishes a competitive advantage and enhances profitability, thus providing value to the stakeholders of the bank.  Most of the customers are satisfied with the bank services and friendly environment of the bank.

 In comparison to other banks Askari Commercial Bank providing high excellence services like home, car, agri-financing, which facilitate bank to get market excellence and move towards prosperity and development.

 Customer’s behavior shows that they feel proud to being as an holder in Askari Commercial Bank

and also refer people to enjoy

different schemes and open their s.  Customer gives suggestion for the improvement of bank and these suggestions are listened carefully and communicated to the higher management so that action taken on relative deficiencies immediately.  Bank having good friendly environment, security system concentration like cameras installed and security guards available all the time.  ACBL have strength that most of the imports which are done in Multan are handle by ACBL Multan.

Weaknesses:

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 ACBL has lesser number of branches as compared to many other branches. Due to this problem, army officers can not avail the benefits of their own bank.  The human resource department is not performing the function of selection and recruitment very effectively. Selection process is not on merit due to which competent persons cannot be selected.  The majority of people are not well aware about the products of Askari Commercial Bank. Therefore it should extensively especially home, agri & car loans Credit Cards.  Mismanagement of time is another big mistake in Askari Commercial Bank branches, the bank official time of closing is 5:00pm but due Mismanagement of time employees leave their desk at 8.00pm which is so hectic and cause employee frustration.  A behavior has been noted that bank tries to feel at ease with good looking rich and educated people and the un-educated and old customers feel some bit strange in the environment of the bank.  Proper guideline should be given to the customer about bank products. They facilitate with current information. Many of the customer’s complaint that there should be two or more person who will guide people at entrance where they have to move, concerned person and department, teach how to fill forms, slips and cheques.  The number of cash counter must be increased because the customer have to wait at peak hours on the counter for deposit, withdrawals and online.  Bank is not introducing new products and new saying schemes. Bank should boost the product development and increase the range of facilities offered for customers.  Bank is weak in its credit management. Bank should lend to very sound parties and increase its payment rate.

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 The policies of the new government to uplift the economy and pursue financial sector reforms are expected to yield positive results in the banking industry of the country. The Askari Commercial Bank is very well praised to avail promising opportunities.  Govt. is taking very bold steps to promote IT in Pakistan. ACBL has an opportunity to improve in technology.  Stock exchange is very volatile and takes immediate effect. So, in the time of crises, conservative investors return to saving deposits.  ACBL is surrounded by many competitors. It has an opportunity to do aggressive marketing to increase its business.

 As a result of the different steps taken by the Government regarding the betterment of the economy, small borrowers are attracted to get the financing and start small businesses. So, the Askari Commercial Bank has an opportunity to attract the customers by giving them attractive schemes.  The need of privatization has made people to switch to banks to satisfy their needs of lending and borrowing. This not only increases the deposits but also the credit business.  Modernized banking system with highly integrated informative system, record kept properly, online banking, and integrated circuits between branches and personal computer provided at every desk.

 Higher management committed to the development, quality, and continious improvement.

 Salaries are very reasonable, so the employees are not financially disturbed and they devote theirselves fully to their work.  Entertainment facilities are available in the Bank when customer goes to the Bank for a longer time they will enjoy newspaper, magazines, television and serve with tea, soft drink, sweets and snakes etc.

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Threats:  Askari Commercial Bank has many competitors who are continuously increasing their products and marketing aggressively it may cause its customer to shift to its competitors.

The Competition has become

severe by the entrants of so many banks, So to exist one will have to prove himself in its services through excellent management and will have to satisfy its shareholders. Otherwise it will be out of the market.  The decrease purchasing power of consumer in the current economic situation of the country affecting the business activity speed too much and the result is the low investment from the investors in new projects can create problem for the bank because it is working a lot in trade.  The privatization of other banks is also a threat for the Bank. Due to the privatization of the different bank e.g. MCB; the competition has increased a lot. Furthermore many private banks have come in the sector due to which it is becoming more difficult day by day to attract the customers.  Some other banks have competent taskforce, which is also a threat for ACBL. Because human resource is the most valuable resource.  The biggest threat in the banking sector is the continuous downfall of the country economy since the last few years. If this downfall remains for more few years then it may be the great hindrance in achieving the Bank’s objectives.  Pakistan India relations often create a war danger. This chance of war may cause army officer and their families to increase the frequency of withdrawals, which would decrease deposits.

CONCLUSION

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I observed the Askari Commercial bank a financially sound bank. Its profits are increasingly year-by-year. Its staff is very good and sincere with the bank. Askari Commercial Bank Multan under the leadership of Sajjad A Sheikh has made significant progress in building and strengthening both the corporate and retail banking sectors in Pakistan. Askari Commercial Bank views specialization and service excellence as the cornerstone of its strategy. The people at bank realize that innovation; creativity, reliability, customized, services and their execution are they key ingredients for their future growth. Revenues from these activities have started yielding dividends and they expect significant growth. They are aware that they have stepped into the 21st century and they must meet its challenges by acquiring the highest level of the technology. They will thus be accelerating their technological advance to enable them to distribute their products and services through most efficient and high tech means. They say that they will continue to invest in the modern tools and substantial allocation to resources will be made to achieve this objective during the current year. Online banking have been started and the introduction of ATM at strategic locations have been firmed up.

RECOMMENDATIONS This is the fact that in this universe nothing is perfect. In every field of life there are some pluses and minuses. But the best institutions are those, which learn from the changing environment and competition. So it is necessary for them to keep them update with the changing environment. Although ACBL Multan Branch is one of the good branches in Multan but there are few points that should be improved for more perfection.  Marketing department is very active but the or the follow up of the customers should be improved.

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 As every thing is computerized in ACBL Multan, the persons should be properly trained in the computer systems.  As we have discussed that this is one of the busy branch in Multan market, its building is not as per the requirements of the branch. So the building should be further expanded and there should be more space for the sitting arrangements of the customers.  The ATM service should be provided 24 hours. Because customers feel upset when most of the times the machine is out of order.  The staff should be decreased in Foreign exchange Dept.., Credit dept. because the building under operation is in adequate for such a large staff.  Under no circumstances cheque book should be given to the customer if the formalities are incomplete  Cheques, which are drawn on Askari Commercial Bank Branch and returned unpaid in clearing, are not reflected in the statement of of the customers. These cheque must be reflected in the s so that credibility of the customers may be assessed.  Audit should be held internally, rather there should be an audit department in the branches to make audit on daily basis. This can become so, helpful as a different banks are having this department of their own.  When giving the loan, the Bank must carefully analyze the past six months transaction history of the borrower.

This will help in the

judgment of the dealing behavior and financial status of the client. In most cases, this thing is not properly done and this is the major reason for the default of many clients.  The Bank should try to give more loans to the small borrowers as the past history shows that most of the loans given to the corporate borrowers have converted into bad debts  Evening banking should also be started in this branch. 174

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