KMBL Gujrat Internship Report

Internship report on kmbl

INTERNSHIP REPORT ON KMBL

BRANCH NAME

KMBL Gujrat

INTERNSHIP PERIOD

26 July 2013 to 9 Sep 2013

SUBMISSION DATE

13 September

CLASS

MBA finance (2011-2015)

EXECUTIVE SUMMARY

The report is specially meant for the students of UOG. It is concerned to a brief study of operations, functions, tasks and services of Kashf Micro-finance Bank Limited of Pakistan. It is the requirement of the MBA (3.5yearz) course in university of Gujrat that all the students of MBA have to spend six weeks in any organization to get practical exposure and to get familiarized with the ways to survive in the organization environment which is totally different from the educational environment. These six weeks period is called the INTERNSHIP PERIOD. I have also been assigned to do the internship of six weeks period in Kashf Micro-finance Bank Limited, Faisal gate circular road Gujarat branch. It has enabled me to understand the practical scenario and sharpen my decision making power and utilizing the skills in an effective and efficient manner I have put all of my efforts and tried my level best to gain maximum knowledge about practical work of my bank. During the internship period I worked in different departments like operating, teller and liability to know briefly about the working operations of bank

In preparation of this report I have tried my best to provide all possible information about the operations, functions, tasks and the corporate information of Kashf Micro-finance Bank Limited in brief and comprehensive form.

The internship report ends with some recommendation after identification of problems that I observed during the course of my internship training.

INTRODUCTION:

The practical training is essential exercise that all the students are required to undergo during specified period of compulsory training in private or public organization during their studies. the student performance during the training is assessed and considered as partial fulfillment of the requirements for award of MBA degree. However the practical training is a complement to the knowledge acquired in the two years of classroom lessons. The training period is for 6 weeks.

I have done 6 weeks internship in Kashf micro finance bank limited Faisal gate branch Gujrat because of feasibility as this branch is situated at walk in distance from my home and there is an inspirational factor to join this bank as now a days Micro finance sector is growing very rapidly in Pakistan

I am also very thankful to the branch manager sir Adil and operation manger mam Shumaila khan that they help in training and learning of different operations of bank.

Purpose

The basic aim of my internship is to observe the working of organization and to get practical experience of my class room knowledge I just dont get the knowledge about the company I also want to see that isnt this the best option to do a job in this sector. Because during internship you can easily understand the working condition of that particular company

Scope:

The internship is a 6 weeks live experience to gain knowledge about organizational matters. This is also very important to gain confident and become aware of the mechanism of an organization. As an internee I want to achieve following objectives during my internship and organization study

It will provide students the opportunity to test their interest in a practical career before permanent commitments are made.

The students will develop skills in the application of theory to practical work situation.

Internship will develop the skills and techniques directly applicable to their careers.

It will aid students in adjusting from college to full time employment.

It will provide students the opportunity to develop attitudes conductive to effective interpersonal relationship.

It will increase the student sense of responsibility.

Students will require good working habits.

It will help the students to enter into full time employment in their area of specialization upon masters.

References that will enhance employment opportunities

Students will have higher levels of academic performance.

It will provide students opportunities to understand informal organizational interrelationship.

It will provide students knowledge of the formal functional activities of practicing organizations.

Introduction of KMBL

Micro-finance:

Microfinance refers to a variety of financial services that target low-income clients. Since the clients of microfinance institutions (MFIs) have lower incomes and often have limited access to other financial services, microfinance products tend to be for smaller monetary amounts than traditional financial services. These services include loans, savings, insurance, and remittances. Microloans are given for a variety of purposes. The diversity of products and services offered reflects the fact that the financial needs of individuals, households, and enterprises can change significantly over time, especially for those who live in poverty

Kashf Micro-finance Bank Limited (KMBL):

KMBL Was established in June 2008 with a vision to become Pakistans leading microfinance bank serving all to become a prosperous, equitable and poverty free Pakistan. KMBL offers a diversified range of financial products and services to low income wage earners as well as the self-employed of Pakistan.

KMBL has initiated its lending operations from 1st November 2008 and also commenced liability operations from June 2009. Currently, our presence is in 26 cities of Pakistan with a network of 31 branches. In 5 years, we plan to open 100 branches across 31 cities reaching out to more than 1 million clients.

Our Vision

KMBL vision is to be Pakistan leading Microfinance bank serving all to build a prosperous equitable and poverty-free Pakistan.

Our Mission

KMBL will become the provider of choice by offering a full range of financial services to micro and small entrepreneurs, especially women, to equitably expand economic opportunities and to maximize value for all stakeholders.

Core values:

Core values of kmbl are;

1. Loan sanction

2. Respect

3. Excellence

4. Customer satisfactory

5. Innovations

Shareholders:

Kashf holdings (Pvt) limited

International finance cooperation (IFC)

Shore cap international, limited

WWB microfinance equity fund

History:

Kashf Foundation began with many firsts. It was the first specialized Microfinance institution in Pakistan, it was the first Microfinance institution targeting only women from low income communities and it was also the first Microfinance institution to charge a sustainable price for its

services. Since its inception Kashf Foundation has continued to trail blaze in 1999 it introduced the first pro-women consumption loan in the sector, in 2001 it was the first Microfinance institution to offer micro-insurance services by collaborating with one of Pakistans oldest insurance companies, in 2003 it was the first Microfinance institution to become financially sustainable, in 2004 it was the first Microfinance institution to obtain an investable credit rating and in 2007 it has been able to close over $36 million in commercial deals with key local and international banks.

Nature of organization:

Kmbl aim to be an organization that is founded on

Growth by formation of sustainable relationships with customers.

Caution to guide our business conducts.

Give the business and personal loans to the customer

Kmbl shall work to

Meet the expectations by Market-based solutions and products.

Reward for entrepreneurial efforts.

Creation of value for stakeholders.

Kmbl aim to be peopling who

Concern about relationships.

Lead through the strength of our commitment and willingness to our class.

Do integrity, sincerity and hard work.

Kmbl have confidence that tomorrow we will be

Leaders in our industry.

An institution maintaining the confidence of stakeholders.

A revolutionary, motivated and energetic institution responding to the changing needs of the internal and external environment.

Objectives

Following are some main objective of kmbl

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

To provide solutions for multiple requirements of clients of diverse financial nature.

To manage with the changing trends of the modern day financial market.

To be a diversified bank by offering all basic consumer services and specialized services.

Honest and ethical conduct, including ethical handling of actual or apparent conflicts of interest between personal and professional relationship.

To provide employment opportunities to people.

To help in development and industrialization of the country.

PRODUCTS/SERVICES OF KMBL

Lending products

Deposited accounts

Free banking

Genral banking

Funds transfer products

Clearing

Obc collection

Outward remmittance

Online banking

Atms

Lending products:

Following are the lending products of kmbl

Kashf raqam barwaqt

Kmbl can provide the running finance for the business to the applicant to boost up their business without the hurdles of any finance. To get this loan the applicant age is from 21 to 60.

The applicant business duration limit is minimum 6 months. The bank can charge the mark up only on used amount and it also has insurance facility. Applicant has to provide the computer id card copy and copy of utility bills

Kashf sunehre karza

Kmbl can also provide loan on gold ornaments to facilitate its customer and they can fulfill their finance needs. The documents required are the same that can be used in the other financing loans The bank can charge the mark up only on used amount and it also has insurance facility. Applicant has to provide the computer id card copy and passport size pictures.

Business Surmaya Loan

Clients requiring loans below Rs 500,000 cannot obtain access to formal financial sources, since such amounts are still too small for commercial banks. A quick estimate can show that the potential market for small enterprises is about 6 million with a negligible outreach to such entrepreneurs by the banking and the microfinance sector as a whole. Kashf targets fast moving small entrepreneurs through the BSL the entire methodology of which is based on a credit scoring model. The BSL is advanced to clients with a minimum of 2 years running experience of their businesses and has no collateral requirements. Generally the loan has a minimum processing time of less than 5 days.

Insurance

Credit for life insurance has been a popular product amongst Kashf clients, since economic upheavals are a regular part of their lives. Kashf was one of the pioneer organizations to introduce life insurance for poor clients in order to deal with emergency periods such as the death of a bread winner. This service is provided to the client and her spouse at a minimal premium. The insurance covers all outstanding loan balances plus a small burial payout at the time of the death of either party. This means that the family is able to cope with the consequences of such an event and faces no liabilities at that time. This is in stark contrast to the exploitative lending practices of the traditional money lender, where the burden of repayment of the loan is transferred to the remaining family members.

Rates:

Purpose of Loan:

To meet working capital or fixed assets requirements only.

Loan Amounts

First Loan Cycle:

Second Loan Cycle:

Third Loan Cycle:

Rs. 50,000-Rs.100,000

Rs. 50,000-Rs.100,000

Rs. 50,000-Rs.150,000

Tenure

First Loan Cycle

Second Loan Cycle and beyond:

3 months 12 months

3 months 15 months

Age of the clients:

For all loan cycles: 23-60 (at the time of sanction of the loan)

Age of the Guarantor:

Age of the guarantor: 23-60 (at the time of sanction of the loan)

Business:

It should be an operational business owned by the client.

Type of Activity:

Trade, production, services or livestock raising

Experience:

At least 2 years of experience in the same business.

Business Location:

Business operating in the same location for at least 1 year.

Deposits products &accounts:

Kashf Tahaffuz term deposit

Kashf Kamaal committee

Kashf Sahulat account

Kashf Ahtimad Bachat account

High yield saving account

Kashf Winspiration institutional term deposit


This account ranging from three months to thirty six months tenure with profit payable on monthly, quarterly, bi-annually and yearly basis.

Features

Minimum investment of Rs.5,000/-

No account opening and closing charges

No minimum balance required


A programmed savings goal oriented account. The purpose of this account is to encourage savings for different occasions and necessities e.g. marriage, old age benefit, education, transportation, consumer durables, Hajj, Umara etc. This will serve as a substitute for committee system. An edge that this product has over the traditional committee system is that profit is given on the deposit. Investment limits range from Rs. 500 Rs. 5,000 while the tenure for this product is 1, 3, 5, and 10 years.

Features

Minimum investment of Rs.500/-



Kashf Sahulat account

A basic non interest-bearing, karobari current checking account.

Features

Initial deposit to open account is Rs. 100/-

No account opening charges


Kashf Ahtimad Bachat account

A checking, basic low balance savings instrument. This product represents KMBLs standard savings product. While there is no minimum balance requirements, profit is only be payable on balances greater than Rs. 25,000.

Features

Initial deposit to open account is Rs.100/-

No account opening charges


Profit bearing checking account

High yield saving accounts

This product has been introduced to facilitate Micro and other entrepreneurs who wish to place funds for short run due to their business seasonal cycles and who want to earn competitive profit. It functions just like a regular savings account, and added benefit is higher profit rate as compared to a regular savings account, upon maintaining a certain level of deposit balance.

Features

No Minimum balance requirement


Free banking above RS. 1,000,000/-

Kashf Winspiration account

Is a term deposit account. Balances kept in this account are divided into three tiers: Rs. 1,000,001 to Rs. 2,000,000; Rs.2, 000,001 to Rs. 5,000,000 and the third tier is for balances in excess of Rs. 5,000,001. The tenure for this product ranges from 1 month to 36 months.

Features

Minimum investment of Rs.1,000,001/-


Relationship Manager for each account

Rates


Rs 5000 and above

Term/profit frequency

Monthly

Quarterly

Bi-annually

Yearly

Maturity

1 month

10.50%

3 months

10.50%

11.00%

11.00%

6 months

10.95%

11.25%

11.50%

12 month

11.15%

11.65%

11.45%

11.75%

24 months

11.50

11

11.85%

12.00%

12.50%

36 months

11.65%

11.85%

12.00%

11.25%

13.00%


Term

Rate

6 months

8.00%

1 year

8.00%

Kashf muhafiz term deposit

6 month

Monthly

12.50%

maturity

12.75%

1 year

Monthly

13.00%

Maturity

13.80%

Kashf savings

On minimum monthly balance

6%

High yield saving account

Amount

Rate

0-25000

0.00%

25001-100000

6.00%

100001-500000

6.50%

500001-1000000

7.50%

1000001-above

10.00%

Outward remittance

Pay order

Demand draft

Cal deposit receipt

Fund transfer

PEST ANAYLSIS

Political and Legal

The countries in which banks are running their operations are strongly affected by the political and legal considerations. Political and legal structure of a country is composed of regulatory agencies and government law, which influence and limit various organizations and individuals. Habitually county changing political environment create new opportunities for business.

There is a political instability in Pakistan, so the countries laws and policies changes continuously, that may be in favor or in against the banking sector.

Political structure of Pakistan has effect on banking sector as,

Employment practices are expected to change.

Political interference regarding policies is estimated to increase as current government is in race of power gain.

Due to lack of confidence on government investor is reluctant so mobilization of funds is going to decrease.

Government policies are changing day by day and government stability is also not there

Economic

Economy of Pakistan is facing many serious issues about

Employment

Inflation

Illiteracy

Which hamper the business growth

The banking environment for stability requires two important things;

Better consumer markets

Higher borrowing powers

The main risk for bankers is the declining value of Pakistani currency. Whenever our currency value depreciates, it decreases the foreign reserves of banks and liabilities increases. There is a continuity changing situations in

Interest rates

Labor policies

In Pakistan, Inflation is very high which will decrease purchasing power.

Staff cost is increasing as basic wage rate has increased.

Operating costs are increasing due to inflation.

Interest rate is increasing so loan taking has decreased.

Value of rupee is decreasing which is pressurizing the economy.

Cost of doing business in Pakistan is increasing day by day so business activities are badly affected and in return it has bad effect on working of Banks.

Social

Society is shaped by norms, values and believes. Social factors often look at the cultural aspects and include health consciousness, population growth rate, age distribution, changes in tastes and buying patterns. . So understanding changes in this area can be vital. Banking sector is very important for the well being of the society such as the bank activity participating in the Prime Minister self employment Scheme.

Social culture of Pakistan affects the banking sector as,

There is lack of experts in our country concerning management so for this reason innovative activities are slow and conventional methods are adopted.

Pakistani people have very luxurious life style as compared to their income; people dont prefer to save money so culture is not very supportive for banking sector.

Cultural strain to savings is the reason due to which investment remains low.

Decline in work ethics which is mainly due to poverty, lack of training.

Inadequate Accountability, lack of good governance and lack of good infrastructure helps creditor to cheat and heavy bad debts occur. Same situation is hoped to prevail.

Inadequate Empowerment is also a usual problem in our organization as every person

Want to get more power hence there is less delegation of authority and decision making.

Technological

Advances in technology have a major impact on bankers success. Technology is vital for competitive advantage. The changes in technology have greatly affected the banking sector of Pakistan. So we can say that PEST Analysis is a perfect tool for the managers and policy makers that help them,

in analyzing the forces that are driving their industry and

How these factors will influence their banks and the whole industry in general.

Technological management has helped the Bank in providing multiple delivery channels to the customers and satisfying their needs anytime & anywhere in the world.

Organization structure

Chief executive Mohammad Mudassar Aqil (CEO)

President Roshaneh Zafar

Management committee

Farhan Haider (Head Business Banking)

Nuvin Jatala (Head IT & ADC)

Mahmood Shamsher Ali (Head HR & Training)

Mobeen Yaqoob (Financial Controller)

Noshina Bukhari (Head Operations & Banking Services)

Ommara Raza Ali (Head Research & Product Development)

Asma Irfan (Company Secretary/Head Legal & Corporate Affairs)

Numan Ali Amjad (Head Internal Audit)

Executive committee

Chief executive officer

Chief operating officer

Chief financial officer

BOARD OF DIRECTORS

Roshaneh Zafar

Ms. Roshaneh Zafar is the Founder and Managing Director of Kashf Foundation the first specialized microfinance organization in Pakistan established in 1996.

Zar Wardak, Chairperson

Zar Wardak serves FINCA as chief executive officer of FINCA Afghanistan and as regional

director of the network MESA (Middle East South Asia) region.

Margarita Cherikbaeva

Margarita Cherikbaeva joined FINCA in June 2011. Prior to this she worked for ProCredit, a German bank holding company, supervising the work of ProCredit Banks in Central Asia, Western Africa and Latin America.

Salim Khan

Salim Khan is the chief operating officer for FINCA Afghanistan, responsible for all operational aspects of that Subsidiary, including product and services delivery, human resources, information technology, risk management, and compliance with parent company policies as well as relevant local regulations.

Volker Renner

Volker Renner brings more than 15 years experience in managing microfinance operations in Eastern Europe and Central Asia. He most recently held the position of Regional Director for FINCA Eurasia and Vice President. Prior to joining FINCA in 2004, Mr. Renner held positions as CEO of ProCredit Bank (Ukraine), member of the Audit Committee of ProCredit Bank (Georgia).

Rupert Scofield

Rupert Scofield, FINCA International President and Chief Executive Officer, is an agricultural economist with 40 years of experience in the developing countries of Africa, Latin America, Eurasia and the Greater Middle East. He also serves as President and CEO of FINCA Microfinance Holdings.

Head office

387-E johar town

Lahore Pakistan

BRANCH INFORMATION

I did my internship in Kashf micro finance bank limited Faisal gate Gujrat, some important information about my branch is as follows

Gujrat branch

Branch name

Kmbl Gujrat

Branch code

9-7-2

Address

Faisal gate, circular road Gujrat

Phone no

053-3523467

Province

Punjab

Region

Sialkot

Email

[email protected]

Management of branch

Designation

Name

Regional manager

Khizar hayat Awan

Branch manager

Sm Adil

Operational manger

Shumaila khan

Customer services officer

Qudsia hina

Customer service officer

Sana mujtaba

Credit risk officer

Muhammad hanif

Asst.branch manager

H.muhammad nouman saleem

Asst.branch manager

Azhar riaz

Team leader

Saqib ali

Loan officer

Mujahid

Loan officer

Mohsin

Teller

Khawar

Guards

M.inam & munawar hussain

Office boy

Sajjad

Supervisors

During my internship at kmbl I worked under the kind supervision of the whole branch staff including the Branch manager, Operation Manager and CSO Manager.

Period of internship: 25 July 2013 --- 9 September, 2013

Departments

Operation department

Lending department

Risk department

Liability department

Description of activities of department

One main and basic purpose of banks is to provide services to the general public. Now-a-days banks play a vital role in the overall development of the country and the functions performed by these banks are changed and enhanced. Kmbl where I did my internship is a micro finance bank main activities performed by different departments of kmbl are as follows:

Operation department

Operation is all about customer care. I have learnt many things from this department Mr. Khawar is teller he deals with cash on counter. Ms Sana and Ms. Qudsia are customer services officers they deal the customer on front desk. Ms Shumaila khan asst operation manger she deals with HR/Admin and other branch matters. I have learnt following things from this department

Account opening

Know your customer

Disbursement of loan files

Inward and outward clearing

OBC

Record keeping

Voucher statistic

How to meet deadlines

How to manage work in pressure

How to serve to delight a customer

Lending department

Lending department is about loan distribution in market that work with the logo prosperity with

dignity the work follow of this department is as follows

Mobilization

File making

File completion

Credit risk verification

Disbursement of loan

Risk department

Mr. Muhammad hanif is credit risk officer in Gujrat branch he deals with clients who are going to take loan from kmbl.

He verifies the clients business and also makes shore that client is fulfilling all the requirements of kmbl. He also keenly studies the file and makes necessary change he has the authority to reject any loan with following reasons:

If applicant is involve in fraudulent activities

If applicant is not the actual owner of the business

If applicant is going to miss-utilize the loan

If there is policy violation

Credit risk officer visits the files and if file is ok than he marks the file discrepant and handed over the file to loan officer for necessary changes. Loan officer completes the file and then credit risk officer mark the file ok to proceed then file is ready to disburse otherwise operations department is not allowed to disburse any file. This department is a check in market and branch.

Liability department

Liability department works for deposit, mobilization and business department

WEEKLY WORK

1ST WEEK WORK

Introduction:

Introduction of staff and Departments was given. Observed the business process. Observed the activities of all the staff, especially with the help of my supervisor Miss Shumaila khan. She guided me that how to fill the deposit slip and what is the purpose of these slips. I treated some customers of deposit slips and practiced that how to fill online and deposit slips. Learned that how to fill cheque, how to issue new cheque books and how to total the demand notices and purpose of demand notice. Also deal the customers of deposit slips. Treated all the customers of online and deposit slips. Filled the cheque books.

Important notice:

Some important things that must keep in mind while filling slips:

a. No cutting and overwriting is allowed in amount.

b. Amount should be same in words and figures.

Online deposit slip transaction

In on line transaction the process is so simple in this the client receives a request form from the customer for online transactions. In such case customer presence is not compulsory.

In this the following requirements are necessary to keep in mind. These are:

1. Sender name

2. Senders account number

3. Bank and branch number

4. Check number (if the customer has account in that branch)

5. Beneficiary branch number and address

6. Total deposit and date

7. Signature of the sender

8. CNIC of the customer (if the customer dont have account in that branch of the bank)

When writing a cheque keep in mind that

a. No cutting/overwriting is allowed

b. Signature should be matched with the ID card signature.

c. On the back of the cheque there should be the sign of the issuer

2ND WEEK WORK

Account opening procedure

Opening of New Account

Account opening is the basic procedure which creates a relationship between a customer and a banker. When a customer opens his/her account it increases the business of the bank and worth of the bank. Banks open different types of accounts for their customers according to their requirements. Customers may be

Individuals (Single or Joint),

Firms (partnership/proprietorship),

Limited Companies,

Local Bodies.

Kmbl normally opens following types of accounts,

1. Current account

2. Saving account

3. Term account

Basics to Open an Account

I learned a lot about the account opening procedure and requirements during my internship period. Its an establishment of contractual relationship between the bank and the customer. Further I am going to express the steps involved in the opening of an account.

Opening of individual account:

There are a number of rules and regulations that are followed in banking, and requirements Checked before opening an account for people similarly kmbl like all other banks in Pakistan make sure whether the person who is going to open the account in the bank is a desirable customer or not. After that kmbl determines the integrity, respectability, occupation and the nature of business of the perspective customers through the introductory references which is provided at the time of account opening. This initial investigation of the people asking for account is important to conduct carefully because if it is not properly done may result serious consequences not only for the banker concerned but also for other bankers and general public. All the necessary information which bank wants to know about customer is written in the form.

Opening an account for the partnership

Copy of CNIC

Copy of CNIC of all the partners

Request letter of account opening

Company letter head

Copy of registered certificate (if registered)

Signature specimen duly attested

After all these requirements, the authorized officer attaches two signature specimen forms called SSC (Signature Specimen Card) and one requisition form. On which the authorized officer put his/her signature and pasted signature admitted and verified and bank stamp on it.

Along with this form the copy of CNIC and a VeriSys form and form known as (KYC) is attached with it. At the last a separate file is maintained for each of the customer for banks record.

In case of employed person

Copy of CNIC

Salary slip

A letter from employer

Initial deposit of Rs. 1000

Photo copy of utility bill

In case of non employed person

Copy of CNIC

Initial deposit of Rs. 1000.

Photo copy of utility bills

Issuance of Cheque Book

For withdrawing amount from account, a cheque book is provided by the bank to the customer. When all the documents are checked then a cheque book is issued to the customer. The customer brings the letter of thanks and gives to the authorized person. The person fills the check book requisition slip for the customer and takes his signatures. Then the authorized person saves that slip in his record and fills another slip and customer is asked to come after 5 days.

A cheque book contains 10, 25, 50or hundred leaves. There is a requisition slip in the cheque book for the issuance of the new cheque book. This slip is duly filled and signed by the customer. Bank verifies the signature of the customers and new cheque book is issued and serial numbers of the cheque are entered in the book of the bank. Customer also has to write his full name and address.

Only one cheque book is issued at a time, however big concerns who need a number of cheque books at a time, may ask the bank to stock as number of cheque books in their name and to point their name on these cheque books.

Bank has a separate register for recording Cheque book inventory and cheque books issued. Account number and the number of leaves are also recorded in this register. When the cheque book issued an entry is passed in the cheque book issue register. The officer takes signature of the customer and put a verify stamp on it with his on signature.

How to close an account?

Customer has the authority to close his account. For this customer has to submit an application for closing the account.

Then the account is closed out. Account balance is paid to the customer. Cheque book is returned back to bank. Officer cancels the remaining cheques in cheque book.

3RD WEEK WORK

Clearing

Nearly all the banks provide a wide variety of services to their depositors. Clearing also plays an important role in performing the activities of the bank. The basic function of clearing is to provide services to customers in collection of their cheque of other banks, whether they are in city or outside the city. The customer can get the money in his account at kmbl from the cheque drawn on another bank. The bank accepts the cheque in the clearing which it is drawn through the clearing house i.e., SBP.

Clearing is the transfer of funds from one branch of bank to the other branch of the same bank or the other bank on which the instrument is drawn, without involving cash through State Banks clearing house or we can say in other that cheques which cannot be cash at the cash counter of the bank.

Types of clearing

Outward clearing

Inward clearing

Outward clearing:

Similarly cheques which are drawn on other bank and presented to kmbl my branch are known as outward clearance for my Branch. So outward clearing results in inflow of funds from paying bank into the clearing account maintained with clearing house increasing the balance in the clearing account.

In case of outward clearing the customer give cheques for collection and receive deposit slip. In clearing register the details about the account title, account number, amount of transaction, drawee bank and instrument number is written. Then different stamps are put on the instruments and deposit slips such as crossing stamps, clearing stamps and endorsement stamps. The amount of these cheques is credited to the customers account but if the cheque is returned it is again debited along with cheque. Then all these cheques along with the summary /delivery report (2 copies), bundle cover, clearing and add list are attached together and all this put in a bag. NIFT representative come daily after the bank timing to take this bag to the branch of kmbl. Officer after checking cheques, make badges in the system and credited the customers account.

Inward clearing

Cheque drawn on kmbl, presented to other Banks or handed over to kmbl in clearing house. That is inward clearance for Kashf micro finance bank. So inward clearing results in outflow of funds to collecting bands reducing the balance in the clearing account.

Cheques are brought daily in morning to the branch. Officer debit the amount from the account after checking the following,

Signature specimen

Account balance

Proper discharge

Date etc

If the cheques are passed but if the cheque is not passed then it is returned along with cheque return memo in which reason is written why cheque is returned. All the transactions are recorded in a register for keeping banks records. At the end officer makes badges in the system and debited the customers account.

Inter city clearing

Inter city includes big or major cities of Pakistan like Islamabad, Lahore etc. it is also recorded in the same clearing register but to differentiate intercity stamp is used. Then these cheques are sent in special envelop provided by NIFT to the main branch. The cheque is usually cleared in third day.

In Gujrat Branch of kmbl the intercity clearing is considered out of the Gujranwala district. All the cheques which are received from other banks but are outside the Gujranwala district are considered in the intercity clearing. Like cheques from Lahore, Islamabad and Karachi are considered in the intercity clearing.

Types of Cheques Collected

Transfer cheques: transfer cheques are those cheques, which are collected and paid by the same branch of bank.

Transfer delivery cheques: transfer delivery cheques are those cheques, which are collected and paid by two different branches of the same bank situated in the same city.

Clearing cheques: clearing cheques are those cheques, which are drawn on the branches of the other banks located in the same city or in the same area. And which is covered by a particular clearing house.

Collection cheques: collection cheques are those cheques, which are drawn on the branches of either the same bank or of another bank, but those branches are not in the same city or they are not the members of clearing house

Function of Clearing

First important function of clearing department is to accept transfer, transfer deliveries and clearing cheques from the customer of the branch and to arrange for their collection.

Another important function is to arrange the payment of cheque drawn on the branch and given for collection to any other branch of kmbl or any other members, or sub-members of the local clearing house.

To collect amounts of cheques drawn on members, sub-members of the local clearing house, sent for collection by kmbl branches which are not represented the local clearing house. Bank charges some commission of these facilities. Now a days clearing is being supervised and conducted by a private company NIFT.

4TH WEEK WORK

Remittance

Remittance is the monitory transfer from one place to another place or from one country to another country to fulfill the requirements of the customers by the order of the customer, through legal means.

Remittance can be either domestic or international. Remittance can be divided into two sections due to its activities.

Types of Remittance

Inward Remittance:

The branch receives the instrument directly from the customer or from the originating branch, and is responsible to pay to part is called inward remittance.

Outward Remittance

The branch, which issue or sold the instrument to the responding branches, called outward remittance.

Parties:

The parties involved in remittance process are,

Applicant

Beneficiary

Intermediaries like bank or Remittance Company

Functional Importance

Remittance is cheap as compared to other modes of remittances i.e. money order. Normally any amount can be remitted through banks. Important source of earnings i.e. commission, service charges, and FED. The risk involved in physical transportation of money is eliminated. Its a safe and secure method of making payments to others.

Modes of Payment

Demand Draft (DD)

Pay Order (PO)

Telegraphic Transfer (TT).

Demand Draft (DD)

DD is a written draft drawn by the branch of the bank on the behalf of the customer to other branch of the same bank for the purpose to pay the certain amount to the customer. DD are issued for the particular place other than place of issuance.

DD is just like cheque and issued when the customer does not want to take cash with him personally. DD is just to avoid the risk and burden of currency notes in huge quantity. Demand draft easily be handled, whatever amount it has and the money can easily be taken from the bank, when it is presented. In fact, to avoid the risk of frauds, the bank forces the customer to transfer money by drafts. Drafts are issued only when the bank knows customer and bank has the confidence in him.

Pay Order:

Pay order is a written order issued by the bank drawn and payable on itself. Customer must have the account in pay order issuing bank. Pay order are more liquid as compared to cheques because cheques may be dishonored while PO cant be. Pay order is used for local transfer of money from one person to another person.

Procedure of issuing DD and PO:

If a regular customer wants to make DD or PO then in this case, customer has to fill up a form. This form is known as FUNDS TRANSFER FROM on making this DD/PO

In the form all the mandatory places are compulsory to fulfill. Like, currency of instrument, type of remittance, beneficiary details, particular of applicant, applicant signature etc. these are such requirements that must be fill up.

And at the last the authorized officer puts his/her signature on DD/PO form and three stamps are pasted on it;

a) Transfer stamp

b) Signature verified stamp

c) Crossing check stamp (in case if half payment is made through cash form, then a check is fill up for this and attached with the DD/PO form)

And at the last the operational manager puts supervision on this and all the records are transferred into computer for bank records. And at the final stage, all the transactions are recorded in a register for keeping banks records.

5TH WEEK WORK

Cash department

Cash department provides different facilities to the customers such as receive cheques, receive

cash, pay cash, online transactions, collect bills etc. cash department maintains following books.

1. Receiving Cash Book

2. Paying Cash Book

3. Token Book

4. Scroll Book

5. Cash Balance Book

When cash is received at the counter, an entry is made in the Scroll Book and Receiving Cashier Book. These two are balanced with each other at closing.

When the cheque or any negotiable instrument is presented at counter for payment, it is entered in the token book and then token is issued to the customer. After that the token clerk and the Cashier make entries in the paying book and payment is made to payee. Then the Token Book and Paying Cashier Book both are balanced at the closing.

The consolidated figure of receipt and payment of cash is entered in the cash balance book and then drawn closing balance of cash.

Opening Balance + Receipts - Payments = closing Balance.

In Cash department customer after filling up the cheques give it to the authorized office. The following information is required for further proceeding of the cheque.

Name of the customer

Exact amount in words

Date of the cheque

Signature of the Customer

After providing all the above mandatory places check is hand over to the relevant person.

The authorized person after receiving Cheque puts bank stamp on it

1. Checks the balance of the customer account

2. Verify the signatures of customer

3. Then gives the cash to the customer

The consolidated figure of receipt and payment of cash is entered in the cash balance book and then drawn closing balance of cash.

OPENING BALANCE + RECEIPTS - PAYMENTS = CLOSING BALANCE

This section of general banking is very important because cash is the most liquid asset and mostly frauds are made in this department, therefore, extra care is taken in this department and nobody is allowed to enter or leave the area freely. Mostly, cash area is grilled and the doors of this area are under supervision of the head of that department. All the books maintained in Cash department are checked by an officer.

Utility bills collection:

Kmbl only collects utility bills on behalf of Sui Gas Companies, by putting the stamp on the utility bills Paid, Date of payment, Signature of the officer receiving the utility bills.

I worked in the utility bills collection department and collect bills from the customers. After receiving utility bills from people a list is made on the form which is called Bills scroll form. One copy of the scroll is held with the bank for evidence whereas the original copy with the receipt of the bills is sent to the billing department of the respective corporation. The bank charge commission on the bills for collection.

6TH WEEK WORK

ATM Service

Kmbl ATMs services not only provide convenience and flexibility to customers but also help the bank to reduce work load and cash handling cost at the branches counters. Kmbl offers ATM facility to its customers.

A form is filled by customer where the basic information about the customer and if he wants supplementary card, the details about that supplementary is given.

It is checked by the officer and sent to the head office.

Head office sends the card to the customer at the address given by the customer.

Pin code is held by the customer.

Then customer will come to the branch take pin code and the card become active.

1st time he has to use the card in the bank timings.

Charges for this facility are taken on annual basis.

ATM card charges:

Issuance charges: Rs.250/-

Annual renewal fee: Rs.250/-

TASKS ASSIDNED TO ME

During my internship at kmbl, Faisal gate Gujrat Branch I was assigned with different tasks such as

Issuing Deposit Slips to Customers

Worked in clearing department, received cheques from customers and issued deposit slips to them.

Fill the online fund transfer applications

During my internship period I filled online fund transfer applications on various times on the behalf of customers. I learned about different scheme of charging charges of online transfer money for the applicants.

Opening of an account

I have learned about different types of accounts that kmbl offers to its customers and the requirements for opening a new account. Then I learned about the process of account opening. After having a complete knowledge, I opened two individual accounts. My supervisor taught me the whole process.

Vouchers

I made different vouchers day to day. I prepared debit vouchers for cheque book issuance, for branch maintenance services, petty expenses, cheque return, lockers etc.

Issuance of cheque book

Customer is provided with the cheque book for withdrawals from the account. The first cheque book is issued to the customer after checking all the required documents. I issued cheque books to the customers. I wrote account title and account number on cheque books, prepared their debit vouchers. Then I entered date, account number and title and number of leaves in the cheque book issuing register. When customer comes with later of thanks, I took signature on the register and officer verifies it. Then I issued cheque book to him.

Making Entries in Clearing Register

I also worked in the clearing department. I made entries in the clearing registers (inward and out ward clearing registers) and record the following information in the register

Name of the favoring party

Name of the bank on whom drawn

Account title

Account number

Cheque number

Amount of transaction

I also made intercity clearing. For Intercity Clearing a stamp of intercity posted on face of bill, then amount, account number and city name is entered in a separate register and deposit slip is attached in a specific file. And a stamp is posted on back of bill. A separate slip is filled for every city given by NIFT. In the specified envelope is used for every city given by NIFT with printed name of city.

If inward clearing is more than the out word clearing then it is against the bank. But if the outward clearing is more than the inward clearing then it is in favor of the bank

I returned some cheques on the basis of different reasons by attaching cheque return memo and recorded the entries in cheque return register by attaching one copy of memo.

Working as Customer Service Officer

I also worked as Customer Service Officer and provided the people with the general information about how to open an account, how to fill up the form etc. I was also assigned a task in which I have to call the customers to take their cheque books from the bank.

Issuing of ATM cards

I also issued ATM cards with the help of my supervisor both for current account holders and new ones. I also recorded account number, name and address, date of ATM issued with ATM card number in the register for the evidence.

LEARNING SUMMARY

According to the requirement of MBA fianc (3.5 years) degree, it is necessary for each student to gain the practical knowledge of six week internship. I chose the kmbl for internship for gaining basic knowledge of banking sector. I did my internship in kmbl Faisal gate branch.

It was such a great experience for me to work with such a well known and reputed bank. The internship proves very valuable for me as it not only enhances my skills and qualifications but also gives me experience and brings clarity in my future plans.

When I started my Internship I was a little bit confused as it was my first chance to do practical work in any organization. But with the help and cooperation of the staff of the kmbl Gujrat Branch, I learnt a lot about the banking field and tried my level best to get the maximum output from the time available to me.

I gained a number of skills that will be beneficial for me in my future career some of these are

Enhanced my confidence level.

Strengthen my interpersonal and communication skills.

Improve my abilities how to deal with the customer and how to behave with the staff members.

Helped to improve team work and leadership skills.

It gave me a lot of confidence and manners to behave in the working environment.

Improved time management skills and made me punctual.

It helps me to understand how to behave in different situations professionally.

It made me think critically in difficult situations and act accordingly.

Improved my decision making capability.

After doing internship I acquired good work habits

During my internship period I have worked in various departments of the bank like account opening department, remittance department, cash department, clearing department. I learned the working of these departments. My supervisors taught me all those things. I learned about different forms, vouchers, applications, advices, stamps and record keeping of the bank. I understood different procedures and process of the activities of the bank.

I was assigned by different task and duties. Which I fulfilled interestingly with the help of my supervisors.

I filled deposit slips, vouchers, and online fund transfer applications.

I learned how to open a new account. And all about the documents which are necessary for the account opening.

I work as a SCO and deal with customer. I was assigned a duty to call the customers to take their cheque book from the bank. I also attended the phone calls and listened the complaints of the customer.

I worked with the remittance officer.

Clearing officer assigned me a task to made entries in the clearing registers.

I also issued checkbooks to the customers.

Collection of utility bills was another interesting task assigned to me.

By working in all these departments I enhanced my knowledge. I also observed that how different rules and regulations are too much important for the efficient working of the organization and how each and every person perform his role in making an organization prosperous.

Internship provides opportunities to experiment and purse careers that match academic and personal interest. Planning about the career is always difficult as there are many doubts regarding different possible opportunities and it is really difficult for the students to select the best possible place for their future job because they do not have enough knowledge about different work settings, they do not have the experience that can provide help to them in attaining the best possible job alternative. So in this situation internship programs provides great help and gave the students and the people who are looking for jobs for the first time, the opportunity to select the best field in which they can show their full potential, can better utilize their skills and knowledge, and most importantly that matches and suits to their temperament .

Universities provide opportunities to teach you the theoretical knowledge, that will be implemented in your future practical life but there is great difference in theoretical and practical knowledge that is why students face difficulties in the real situation in adjusting in the practical environment of the organization. So being a student I encountered different sorts of problems that was challenging for me.

I am always interested to get job in banking sector. But do not know what tasks bankers do, their duties, timings etc. By this internship my doubts vanished. Now I have a clear vision about my future. This internship brings a great change in me. I have learnt punctuality and the significance of time in an organization. I have realized that time management is the most important element at working environment. My practical learning has taught me to prioritize and organize my work according to schedule that enabled me to complete my tasks in the allotted time.

My personal view about banking environment is that its a very good and safe for females. I critically analyzed the banking sector as a whole and I can openly say that banking sector provides conductive environment for career growth. After completing my education I will look forward to join a well reputed bank like kmbl because I feel that the banking sector is where I can better utilize my academic and personal interests.

Choosing kmbl for my internship was really a good decision and it created a big worth for me. It was a very rewarding experience to work in such a disciplined organization with highly experienced and cooperative staff. I really gained very beneficial knowledge about banking during my 6 weeks internship and also enjoyed working with experienced and intelligent staff.

SWOT ANALYSIS

Strength

It can provide the loan to the individuals who are below the poverty line and cannot able to access from the commercial banks

By providing small loans to this people Micro finance helps in reducing the poverty.

For borrower there are many small and medium size MFIs are available in even remote areas.

Kmbl have experienced and skilled staff.

Its performance is improving day by day

Kmbl is continuously trying to develop new and innovative products to attract their target market

It has strong culture and has professional staff

Customer relationship of kmbl is very strong.

Asset utilization of kmbl is very efficient.

Weaknesses

Rules and Regulation of Micro Finance Institutions are not regulated properly.

In the absent of the rules and regulation there would be high case of credit risk and defaults.

High number of people access to informal sources

Level of job satisfaction of employees is not good

Majority of the people are not well aware off its products.

To give everyone equal protocol is lacking among employees Customers having account with small amount are not given same services like dealing to others who have high account.

Promotions of employees are generally done on seniority basis.

Opportunities

Micro Finance helps the poor people by not only providing them with loan but also helps them in their business.

Micro Finance helping in increase the employment opportunity for them and for the society.

Many Pvt. Banks are shying away from to serve the people are unable to access big loans, because of the high intervention of the Govt. but the door open for the Pvt.

Greater profitability can be achieved through strong internal control.

Flexible environment provides many opportunities for the growth.

Although provide services to their existing customers, but word of mouth can also be helpful in increasing the number of customers to have a competitive advantage over its growing number of competitors.

Professional training is given to the staff which gives elimination to the risk of fraud.

Threats

The formal source of finance through Micro Finance is beginner, and the rules are also not properly placed for it.

This is the biggest that threat that many MFIs are facing. Because the excess of anything is injurious, so in the same way the excess involvement of Govt. is a serious threat for the MFIs.

Current economic situation of Pakistan is a threat for banking industry

Mergers & acquisition activities are getting fame in Pakistan day by day, and consolidating the banking sector

Political uncertainty in Pakistan and poor law and order situation are also big threats for the working of bank.

Cost of doing business in Pakistan is increasing day by day so its very hard to compete with financial sector.

Political instability in Pakistan is also a great threat for operations of the bank

Strong competition in banking industry in Pakistan.

Deposit rates are increasing day by day

RECOMMENDATIONS

Kmbl is performing well, can be judged through its financial data and profitability ratios. Its deposits are growing and also its profitability. Following are some recommendations and suggestions for the better working of the bank.

Open communication should be there. In which every employee who has some problems with his officers can communicate it to the higher management and some steps must be taken to improve that.

There is no proper timing about the bank and unnecessary delay in transactions. Bank should have to improve this for future prosperity of the bank.

Recruitment must be on merit basis and training should be after proper and extensive training.

Old and lazy staff should be replaced by young and qualified staff.

Working environment, equipment, furniture and staff dressing should be according to the modern banking style.

Mismanagement of resources must be avoided as much as possible as it decreases profit but also discourage hard worker and honest employees.

Proper attention should be paid to upgrade customer services.

Bank should adopt the global organizational banking structure to meet the international standards of banking sector.

Refresher courses for the staff are most important for them to increase and enhance their knowledge.

CONCLUSION

KMBL has completed 5 years since its privatization, it is evident from its continuing success that

Kmbl is making progress by leaps and bounds. All of its success is purely based on its management capability, its Directors and, in no small measure, to the entire KMBL team for its dedication, concerted efforts and excellent team spirit.

Therefore, I conclude that KMBL has a very prosperous present and future, which assures the shareholders of wealth maximization. There is always room of improvement in each and every thing. No doubt KMBL is performing very well but I think that if bank would be able to cover and control on the below mentioned recommendations then it would be in such a situation that will really lead it towards the road of prosperity, development and integrity.

KMBL is performing well but some hurdles regarding customers and staff are also there. For the proper working of the bank customers should also cooperate with the bank which will be really a good, ambitious and diligent condition for the bank. Hence, KMBL can better perform and position itself for to compete its competitors in the country.

References

http://www.kmfbank.com/

Guide lines from ms shamaila khan operational manager at Kashf micro finance bank limited, Faisal gate Gujrat

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Documents

KMBL Gujrat Internship Report