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1.1 INTRODUCTION OF HBL
It is the prime Bank in country established in 1941 having a registered head office in Karachi. It was
nationalized in 1974, but recently on 26th February 2004 it has been privatized by Government of
Pakistan and is taken over by Aga Khan Fund for Economic Development (AKFED). They acquired 51
percent of shares of HBL. It is one of the largest Banks of Pakistan with 1439 branches and having total
assets of Rs.434, 931,930,000.
1.1.1 Brief History of HBL
HBL at its present state has a long and rich history of deeds and sacrifices. All this has been possible on
the account of sustained efforts. The first branch of HBL started functioning on 30thAugust, 1941 at
Muhammad Ali Road Bombay, where Quaid-e-Azam Muhammad Ali Jinnah first of all opened his
personal account. Mohammad Ali Habib was a man of stern and persistent will. Allah Almighty had
bestowed him with extra ordinary capabilities. He was devoted to his Bank with a view to take his share
in the uplift of the strife-torn and devastated Muslim community. At the time of its inception, the Bank's
total paid up capital was Rs.2.5 million but it is evident from the following data that the Bank
experienced a steep rise in the business in a few years. In 1942, on the desire of Quaid-e-Azam, Habib
family migrated to Pakistan and later on shifted the Bank's Head Office from Bombay to Karachi on 7th
August, 1947 just one week prior to independence, to play its pivotal role in the development of this
newly born country. At the time of independence, the areas which now constitute Pakistan were
producing only agricultural products raw material for indo-Pak subcontinent. Partially no industries were
there to process the raw material, therefore the raw material was exported from Pakistan. There were19 non-Indian foreign Banks which were engaged in the export of crops from Pakistan with only two
Pakistani Banks i.e. HBL and the Australia Bank. The circumstances were completely un-certain. The
confidence of the people had been shaken by the un-friendly environment and till the time peace had
not been restored, people would naturally have been interested in other things. The nation was quite
young with extreme scarcity of resources and these definitely added to the difficulties of the govt., to
run its own Banking system immediately. Following the announcement of the independence plan in
June, 1947, the Hindus residing in the territories now comprising Pakistan started transferring their
assets to India and vice versa. The Banks included those having their registered offices in Pakistan,
transferred them to India in order to bring a total collapse of the new state. It had been decided that the
Reserve Bank of India would continue to function in Pakistan so that the problem of demand and timeliabilities, coinage, currencies, exchange rate etc be settled between India and Pakistan and the Indian
Notes would continue to be legal tender in Pakistan till 30th September, 1948. Again due to certain
differences between Indian Pakistan, the Indian Govt., withheld Pakistan's share of Rs.75 core in forward
and subscribed heavily to the Govt. of Pakistan to the tide over the crises, Payment was made to the
Govt., by the Bank at a very nominal rate of interest, even before the actual issue of securities. At a time
when this newly born country was at whirlwind of crises, it was HBL which fulfilled generously the
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financial needs of all its sectors, paid salaries to the employees of all Govt. departments, helped in the
establishment of State Bank of Pakistan which the Quaid-e-Azam inaugurated on July 1st, 1948. HBL
after partition opened its branches throughout Pakistan to provide finance and other facilities to the
business community. In association with HBL, the Govt. sponsored Pakistan Finance Corporation Limited
for financing of cotton. The Bank helped handsomely in the construction of WARSAK DAM PROJECT,
WAPDA, & K.D.A. by provided finance and other facilities. Another innovation introduced by HBL is the
evening Banking cash long after the crossing of normal Banking hours. It was also the first in making
available such new facilities as Gift Cheques, Rupee Travelers Cheques, Credit Card System, short term
and long term schemes for small businessmen.
4
1.1.2
MISSION
To be recognized as the leading financial institution of Pakistan and a dynamic international bank in the
emerging markets, providing our customers with a premium set of innovative products and services, and
granting superior value to our stakeholders
shareholders, customers and employees. OR Opening new horizons and fresh perspectives of trust,
dependability and service through 1425 domestic branches and 112 overseas offices with a
comprehensive range of financial products.
1.1.3 OBJECTIVES OF HBL
Following are some of the main objectives of HBL.
To earn profit for the Bank itself and for its shareholders.
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To promote and boost up business sector inside the country.
To provide employment opportunities to people.
To help in development and industrialization of the country.
To provide loan and advances to help out in self employment schemes.
1.1.4
SYMBOL OF HBL
Symbol depicts Bismillah ============Islamic Culture and Values Sword ============== Power
Lion================ As a symbol of strength
1.1.5 CORE VALUES OF HBL
HBL is firmly grounded with a corporate philosophy that incorporates five solid values which each
individual associated with the bank abides by.
5
1.1.5.1 Humility
HBL encourages a culture of mutual respect and treats both their team members and customers with
humility and care.
1.1.5.2 Integrity
For them, integrity means a synergic approach towards abiding their core values. United with the force
of shared values and integrity, they form a network of a well-integrated team.
1.1.5.3 Meritocracy
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Foreign currency financing.
All sorts of non-funded facilities / services which include Cash receipts / payments, Remittances,
Collections, guarantees, letter of credit etc..
Customized products / solutions
2.1 Departments of HBL
There are few departments on which general or day to day banking of HBL composes. There details are
as under: Deposit department Clearing Departments Inland Remittance Department Bills Departments
Advances Departments Cash department CD Department Foreign Exchange Department
2.1.1 FUNCTIONS OF DIFFERENT DEPARTMENTS OF HBL
The basic functions of different departments HBL are as follows.
Accepting deposits
Making Loans and advance.
7
2.1.1.1 Accepting Deposits
The primary function of HBL is to accept and receive surplus money from the people, which theywillingly deposit with the Bank. Like all other Banks, HBL also take
incitation to attract as much depositors as it can. They offer different deposit schemes to
its customers, which includes the following types. These schemes as follow.
2.1.1.1.1 Current Deposits
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This type of account is often maintained by the business
Current deposits are those deposits on which Bank offers no interest but it allows the account holders to
withdraw their money at any time they want without giving any prior notice to the community, which
requires large sums of money very often for their business transaction.
2.1.1.1.2 Profit and loss sharing account (Saving)
Saving deposits or PLS are those accounts on which Bank offers a lower rate of interest. After the
Islamization of the Banking system in the country it has been given the name of PLS saving account. The
Bank undertakes to repay deposits on demand up to a certain amount.
2.1.1.1.3 Fixed deposits
Fixed deposits are those which can be withdrawn only after the maturity period. In this type of deposits
the Bank allows high rates of interest depending on the time period of deposits. The shorter the period
of deposits, the less will be the interest and vice versa.
2.1.1.2 Making Loans and advances
The second most important function of HBL is to provide financing facility to its customers. These loans
and advances are usually made against document of title to goods, marketable securities, and personal
securities. HBL charges different interest rates on these loans and advances depending on the terms and
conditions settled with the customers. Following types of loans and advances are made available to the
customers.
8
2.1.1.2.1 Demand Finances
Demand finances are those finances which are given to the borrowers for specified period and can be
called back without any prior notice. It is a single transaction finance. It can be long term, medium term
and short term. Mark up is also charge. Here the amount can be withdrawn once at the time of
disbursement.
2.1.1.2.2 Running Finance
HBL provides these finances against the security of current assets like shares, bond, cash
crops like cotton and other cashable commodities. The borrowers account is opened with
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the Bank with the amount of the total loan provided or allowed to the borrower. The borrower is
allowed to withdraw any amount from his account within the specified limit and interest is charged only
on the amount actually withdrawn.
2.1.1.2.3 Over Draft
This type of facility is usually given to very loyal clients. This allows them to withdraw over and above
the amount held by them in their account, and interest is charged only on the amount, which is
withdrawn in excess of the amount actually held in their account.
2.1.1.2.4 Discounting bills of exchange
Discounting bills of exchange can also be considered as a form of loan because it allows the holder to get
the bill encased before the maturity period. A bill of exchange is usually issued by the importer of goods
to the exporters, which allows them to be paid in their own currency after three months time. If the
exporter needs the money before the maturity of the bill of exchange, he can get his money from the
Bank by discounting the bill of exchange. The Bank utilizes their surplus funds by discounting the bills of
exchange at their market worth i.e. Bank pay to the holders of the bill on amount equal to their face
value after deducting interest at the current rate for the maturity period of the bill.
our stated objective of being a premier emerging market Bank.
9
2.1.2 PRODUCTS OFFERED BY HBL
2.1.2.1 Tele-printer service
Introduced in 1952, this system helped the Bank to improve its services.
2.1.2.2
Rupee Travelers Cheques
It was introduced in 1957. Here the customers are provided the facility of encashment of
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their travelers ch
eques through any branch of the Bank.
2.1.2.3 Small Factory Owner Scheme
In 1959 the Bank offered loans to small scale producers under the small factory owner scheme in
order to boost the economy of Pakistan.
2.1.2.4 Foreign Tele printer Service
It was introduced in 1961. The idea behind this scheme was to provide quick and prompt Banking
services to customers in foreign countries.
2.1.2.5 Gift cheques schemes
It was launched in 1962. Under this scheme, the Bank provided customers with pre-printed cheques of
various denominations which could be used to send gifts to their loved one on various occasions.
2.1.2.6 School Banking
This scheme was introduced in 1962 to provide Banking services to children in a number of schoolsthough out the country.
10
2.1.2.7
Drive in Banking
HBL established Drive in branches in 1962 at various major cities of the country where
the customers could avail Banking services without getting down from their vehicles
.
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2.1.2.8 Mobile Banking
It was introduced in 1962. The feature of this scheme is to provide Banking services to the customers
residing in the rural areas.
2.1.2.9 Night safe scheme
In 1962 the Bank offered facility to their customers to deposit their valuables at night in specified
branches of the Bank.
2.1.2.10 Computer accounts
In 1962 the Bank introduced computer accounts through which most of the accounts in head office were
computerized
2.1.2.11 Computer Prize Bond
It was introduced in 1966. It is a scheme through which prize could be declared for prize bond scheme.
2.1.2.12 Credit card scheme
It was introduced in 1966 through which customers could get certain sum of money from specified
branches. Many business organizations accepted payments through valid credit cards.
2.1.2.13 Infant Saving Scheme
In 1968 the Bank offered infants to open saving accounts operated by their parents/ guardians.
2.1.2.14 Courtesy Card
It was launched in 1968 through which the customer could be introduced to other branches in the
country.
11
2.1.2.15 Deposit growth certificate
This scheme was introduced in 1975 with increase rate of interest.
2.1.2.16 Special five years deposit certificate
This scheme was introduced in 1975 where the major emphasis is on increased rate of interest.
2.1.2.17 Dollar traveler cheques
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Introduced in 1976, the scheme was more helpful and safe for the travelers than carrying foreign
currency notes.
2.1.2.18 Haj accidental death scheme
Introduced in 1983, according to this insurance scheme, if a Haji who has submitted his Haj application
through HBL died while he was away for performing Haj, his family was to be provided a certain sum of
money.
2.1.2.19 Auto Cash Teller Machine
Auto cash machines are installed in 1988 at various branches which allows customers to withdraw cash
round the clock and on all days of the week.
2.1.2.20 Transport Finance Scheme
In 1989 the Bank in order to decrease unemployment in the country introduced owner, driver taxi
finance and scooter loans. According to this scheme they were provided loans on soft terms.
2.1.2.21 Gold card system
In 1991 HBL introduced the scheme with the features of offering card holders to get upto Rs. 10,000 at a
time.
2.1.2.22 Muhafiz Rupee Traveler Cheque
It was introduced in 1998. A cheques available in denomination of Rs. 10,000, 25,000, 50,000 and
100,000 with the advantage of 100% free purchase and encashment.
12
2.1.2.23 Distinct Properties Of Muhafiz
It can be issued from more than 700 branches all over Pakistan.
Muhafiz provides the facility of payment in all branches of HBL.
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There is no commission and fee charge for purchase of Muhafiz HBL keeps alive
the tradition of Serve you better charges nothing for the purchase and sale of
Muhafiz.
2.1.3 INNOVATIVE PRODUCTS
2.1.3.1House Finance
HBL provides the facility of house finance: Financing available for: 1.
Purchase of house 2.
Home improvement and renovation 3.
Self Construction
2.1.3.1Some characteristics of House Finance of HBL Are:
Lowest marl-Ups leading to affordable monthly installments
5 years fixed Rates/ one year Floating Rate available.
Lowest processing charges
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Financing tenures ranging from 3 to 20years.
Financing limits of up to Rs. 7.5 million (Rs. 3.0 million for Home Improvement/Renovation)
Quick Processing
2.1.3.2Auto Finance
Habib Bank Auto Finance, a lease product, designed to offer you an economical way for owing the car of
your choice.
Some characteristics are:
Lowest Down Payment
Lowest monthly rentals
2
1.1 INTRODUCTION OF HBL
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It is the prime Bank in country established in 1941 having a registered head office in Karachi. It was
nationalized in 1974, but recently on 26
th
February 2004 it has been privatized by Government of Pakistan and is taken over by Aga Khan Fund for
Economic Development (AKFED). They acquired 51 percent of shares of HBL. It is one of the largest
Banks of Pakistan with 1439 branches and having total assets of Rs.
434,931,930,000.
1.1.1 Brief History of HBL
HBL at its present state has a long and rich history of deeds and sacrifices. All this has been possible on
the account of sustained efforts. The first branch of HBL started functioning on 30
th
August, 1941 at Muhammad Ali Road Bombay, where Quaid-e-Azam Muhammad Ali Jinnah first of all
opened his personal account. Mohammad Ali Habib was a man of stern and persistent will. God.
Almighty had bestowed him with extra ordinary capabilities. He was devoted to his Bank with a view to
take his share in the uplift of the strife-torn and devastated Muslim community. At the time of its
inception, the Bank's total paid up capital was Rs.2.5 million but it is evident from the following data
that the Bank experienced a steep rise in the business in a few years. In 1942, on the desire of Quaid-e-
Azam, Habib family migrated to Pakistan and later on shifted the Bank's Head Office from Bombay to
Karachi on 7
th
August, 1947 just one week prior to independence, to play its pivotal role in the development of this
newly born country. At the time of independence, the areas which now constitute Pakistan were
producing only agricultural products raw material for indo-Pak subcontinent. Partially no industries were
there to process the raw material, therefore the raw material was exported from Pakistan. There were
19 non-Indian foreign Banks which were engaged in the export of crops from Pakistan with only two
Pakistani Banks i.e. HBL and the Australia Bank. The circumstances were completely un-certain. The
confidence of the people had been shaken by the un-friendly environment and till the time peace had
not been restored, people
3
would naturally have been interested in other things. The nation was quite young with extreme scarcity
of resources and these definitely added to the difficulties of the govt., to run its own Banking system
immediately. Following the announcement of the independence plan in June, 1947, the Hindus residing
in the territories now comprising Pakistan started transferring their assets to India and vice versa. The
Banks included those having their registered offices in Pakistan, transferred them to India in order to
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bring a total collapse of the new state. It had been decided that the Reserve Bank of India would
continue to function in Pakistan so that the problem of demand and time liabilities, coinage, currencies,
exchange rate etc be settled between India and Pakistan and the Indian Notes would continue to be
legal tender in Pakistan till 30
th
September, 1948. Again due to certain differences between Indian Pakistan, the Indian Govt., withheld
Pakistan's share of Rs.75 core in forward and subscribed heavily to the Govt. of Pakistan to the tide over
the crises, Payment was made to the Govt., by the Bank at a very nominal rate of interest, even before
the actual issue of securities. At a time when this newly born country was at whirlwind of crises, it was
HBL which fulfilled generously the financial needs of all its sectors, paid salaries to the employees of all
Govt. departments, helped in the establishment of State Bank of Pakistan which the Quaid-e-Azam
inaugurated on July 1
st
, 1948. HBL after partition opened its branches throughout Pakistan to provide finance and other
facilities to the business community. In association with HBL, the Govt. sponsored Pakistan Finance
Corporation Limited for financing of cotton. The Bank helped handsomely in the construction of
WARSAK DAM PROJECT, WAPDA, & K.D.A. by provided finance and other facilities. Another innovation
introduced by HBL is the evening Banking cash long after the crossing of normal Banking hours. It was
also the first in making available such new
facilities as Gift Cheques, Rupee Travelers Cheques, Credit Card System, short term and
long term schemes for small businessmen.
4
1.1.2
MISSION
To be recognized as the leading financial institution of Pakistan and a dynamic international bank in the
emerging markets, providing our customers with a premium set of innovative products and services, and
granting superior value to our stakeholders
shareholders, customers and employees. OR Opening new horizons and fresh perspectives of trust,
dependability and service through 1425 domestic branches and 112 overseas offices with a
comprehensive range of financial products.
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1.1.3 OBJECTIVES OF HBL
Following are some of the main objectives of HBL.
To earn profit for the Bank itself and for its shareholders.
To promote and boost up business sector inside the country.
To provide employment opportunities to people.
To help in development and industrialization of the country.
To provide loan and advances to help out in self employment schemes.
1.1.4
SYMBOL OF HBL
Symbol depicts Bismillah ============Islamic Culture and Values Sword ============== Power
Lion================ As a symbol of strength
1.1.5 CORE VALUES OF HBL
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HBL is firmly grounded with a corporate philosophy that incorporates five solid values which each
individual associated with the bank abides by.
5
1.1.5.1 Humility
HBL encourages a culture of mutual respect and treats both their team members and customers with
humility and care.
1.1.5.2 Integrity
For them, integrity means a synergic approach towards abiding their core values. United with the force
of shared values and integrity, they form a network of a well-integrated team.
1.1.5.3 Meritocracy
At every level, from selection to advancement, they have designed a consistent system of humanresource practices, based on objective criteria throughout all the layers of the organization. HBL is
therefore, able to achieve a specific level of performance at every layer of the organization.
1.1.5.4 Teamwork
Their team strives to become a cohesive and unified force, to offer the customer, a service beyond his
expectations. This force is derived from participative and collective endeavors, a common set of goals
and a spirit to share the glory and the strength to face failures together.
1.1.5.5 Culture of Innovation
Their aim is to be proactively responsive to new ideas, and to respect and reward the agents, leaders
and creators of change
1.1.6
CORPORATE BANKING
Only local bank with special focus on Corporate Banking with a presence in all major locations throughout the country, offering full range of Banking products / services and one window interface through
designated Relationship Managers. Our large equity base allows us to take longer per party exposures to
meet the needs of the largest corporate &
6
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our extensive local & foreign network allows us to imperiously service our clients. Corporate manages
well diversified portfolio, and include most of the top tier names of the market. Corporate Banking
offers tailor made products / solutions as required by corporate customers which includes:
1.1.6.1 Key Features of Corporate Banking
Funded facilities, ranging from short to medium and long term lending
Trade related financing.
Foreign currency financing.
All sorts of non-funded facilities / services which include Cash receipts / payments, Remittances,
Collections, guarantees, letter of credit etc..
Customized products / solutions
2.1 Departments of HBL
There are few departments on which general or day to day banking of HBL composes. There details are
as under: Deposit department Clearing Departments Inland Remittance Department Bills Departments
Advances Departments Cash department CD Department Foreign Exchange Department
2.1.1 FUNCTIONS OF DIFFERENT DEPARTMENTS OF HBL
The basic functions of different departments HBL are as follows.
Accepting deposits
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Making Loans and advance.
7
2.1.1.1 Accepting Deposits
The primary function of HBL is to accept and receive surplus money from the people, which they
willingly deposit with the Bank. Like all other Banks, HBL also take
incitation to attract as much depositors as it can. They offer different deposit schemes to
its customers, which includes the following types. These schemes as follow.
2.1.1.1.1 Current Deposits
This type of account is often maintained by the business
Current deposits are those deposits on which Bank offers no interest but it allows the account holders to
withdraw their money at any time they want without giving any prior notice to the community, which
requires large sums of money very often for their business transaction.
2.1.1.1.2 Profit and loss sharing account (Saving)
Saving deposits or PLS are those accounts on which Bank offers a lower rate of interest. After theIslamization of the Banking system in the country it has been given the name of PLS saving account. The
Bank undertakes to repay deposits on demand up to a certain amount.
2.1.1.1.3 Fixed deposits
Fixed deposits are those which can be withdrawn only after the maturity period. In this type of deposits
the Bank allows high rates of interest depending on the time period of deposits. The shorter the period
of deposits, the less will be the interest and vice versa.
2.1.1.2 Making Loans and advances
The second most important function of HBL is to provide financing facility to its customers. These loans
and advances are usually made against document of title to goods, marketable securities, and personal
securities. HBL charges different interest rates on these loans and advances depending on the terms and
conditions settled with the customers. Following types of loans and advances are made available to the
customers.
8
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2.1.1.2.1 Demand Finances
Demand finances are those finances which are given to the borrowers for specified period and can be
called back without any prior notice. It is a single transaction finance. It can be long term, medium term
and short term. Mark up is also charge. Here the amount can be withdrawn once at the time of
disbursement.
2.1.1.2.2 Running Finance
HBL provides these finances against the security of current assets like shares, bond, cash
crops like cotton and other cashable commodities. The borrowers account is opened with
the Bank with the amount of the total loan provided or allowed to the borrower. The borrower is
allowed to withdraw any amount from his account within the specified limit and interest is charged only
on the amount actually withdrawn.
2.1.1.2.3 Over Draft
This type of facility is usually given to very loyal clients. This allows them to withdraw over and above
the amount held by them in their account, and interest is charged only on the amount, which is
withdrawn in excess of the amount actually held in their account.
2.1.1.2.4 Discounting bills of exchange
Discounting bills of exchange can also be considered as a form of loan because it allows the holder to get
the bill encased before the maturity period. A bill of exchange is usually issued by the importer of goods
to the exporters, which allows them to be paid in their own currency after three months time. If the
exporter needs the money before the maturity of the bill of exchange, he can get his money from the
Bank by discounting the bill of exchange. The Bank utilizes their surplus funds by discounting the bills of
exchange at their market worth i.e. Bank pay to the holders of the bill on amount equal to their face
value after deducting interest at the current rate for the maturity period of the bill.
our stated objective of being a premier emerging market Bank.
9
2.1.2 PRODUCTS OFFERED BY HBL
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2.1.2.1 Tele-printer service
Introduced in 1952, this system helped the Bank to improve its services.
2.1.2.2
Rupee Travelers Cheques
It was introduced in 1957. Here the customers are provided the facility of encashment of
their travelers ch
eques through any branch of the Bank.
2.1.2.3 Small Factory Owner Scheme
In 1959 the Bank offered loans to small scale producers under the small factory owner scheme in
order to boost the economy of Pakistan.
2.1.2.4 Foreign Tele printer Service
It was introduced in 1961. The idea behind this scheme was to provide quick and prompt Banking
services to customers in foreign countries.
2.1.2.5 Gift cheques schemes
It was launched in 1962. Under this scheme, the Bank provided customers with pre-printed cheques of
various denominations which could be used to send gifts to their loved one on various occasions.
2.1.2.6 School Banking
This scheme was introduced in 1962 to provide Banking services to children in a number of schools
though out the country.
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10
2.1.2.7
Drive in Banking
HBL established Drive in branches in 1962 at various major cities of the country where
the customers could avail Banking services without getting down from their vehicles
.
2.1.2.8 Mobile Banking
It was introduced in 1962. The feature of this scheme is to provide Banking services to the customers
residing in the rural areas.
2.1.2.9 Night safe scheme
In 1962 the Bank offered facility to their customers to deposit their valuables at night in specified
branches of the Bank.
2.1.2.10 Computer accounts
In 1962 the Bank introduced computer accounts through which most of the accounts in head office were
computerized
2.1.2.11 Computer Prize Bond
It was introduced in 1966. It is a scheme through which prize could be declared for prize bond scheme.
2.1.2.12 Credit card scheme
It was introduced in 1966 through which customers could get certain sum of money from specified
branches. Many business organizations accepted payments through valid credit cards.
2.1.2.13 Infant Saving Scheme
In 1968 the Bank offered infants to open saving accounts operated by their parents/ guardians.
2.1.2.14 Courtesy Card
It was launched in 1968 through which the customer could be introduced to other branches in the
country.
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11
2.1.2.15 Deposit growth certificate
This scheme was introduced in 1975 with increase rate of interest.
2.1.2.16 Special five years deposit certificate
This scheme was introduced in 1975 where the major emphasis is on increased rate of interest.
2.1.2.17 Dollar traveler cheques
Introduced in 1976, the scheme was more helpful and safe for the travelers than carrying foreign
currency notes.
2.1.2.18 Haj accidental death scheme
Introduced in 1983, according to this insurance scheme, if a Haji who has submitted his Haj application
through HBL died while he was away for performing Haj, his family was to be provided a certain sum of
money.
2.1.2.19 Auto Cash Teller Machine
Auto cash machines are installed in 1988 at various branches which allows customers to withdraw cash
round the clock and on all days of the week.
2.1.2.20 Transport Finance Scheme
In 1989 the Bank in order to decrease unemployment in the country introduced owner, driver taxi
finance and scooter loans. According to this scheme they were provided loans on soft terms.
2.1.2.21 Gold card system
In 1991 HBL introduced the scheme with the features of offering card holders to get upto Rs. 10,000 at a
time.
2.1.2.22 Muhafiz Rupee Traveler Cheque
It was introduced in 1998. A cheques available in denomination of Rs. 10,000, 25,000, 50,000 and
100,000 with the advantage of 100% free purchase and encashment.
12
2.1.2.23 Distinct Properties Of Muhafiz
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It can be issued from more than 700 branches all over Pakistan.
Muhafiz provides the facility of payment in all branches of HBL.
There is no commission and fee charge for purchase of Muhafiz HBL keeps alive
the tradition of Serve you better charges nothing for the purchase and sale of
Muhafiz.
2.1.3 INNOVATIVE PRODUCTS
2.1.3.1House Finance
HBL provides the facility of house finance: Financing available for: 1.
Purchase of house 2.
Home improvement and renovation 3.
Self Construction
2.1.3.1Some characteristics of House Finance of HBL Are:
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Lowest marl-Ups leading to affordable monthly installments
5 years fixed Rates/ one year Floating Rate available.
Lowest processing charges
Financing tenures ranging from 3 to 20years.
Financing limits of up to Rs. 7.5 million (Rs. 3.0 million for Home Improvement/Renovation)
Quick Processing
2.1.3.2Auto Finance
Habib Bank Auto Finance, a lease product, designed to offer you an economical way for owing the car of
your choice.
Some characteristics are:
Lowest Down Payment
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Habib Bank Lifestyle is an economical financing scheme for Household Appliances and consumer
Electronics. Salient features of HBL LIFESTYLES:
Loans for salaried/ self Employed individuals or business persons
Low Mark-ups leading to affordable monthly installments.
Financing from Rs.10,000 to Rs.500,000
Fixed tenures of 6,12,18,24 and 36 months
Low Processing charges
Full credit Life Insurance
Free Doorstep Delivery of items
Available throughout Pakistan from over 330 designated Habib Bank Branches
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2.1.3.6 HBL Rescue
(Balance Transfer Facility) HBL provides the facility to transfer your personal loan and credit card
liabilities, at the lowest rates ever.
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2.1.3.7 For Personal Loans
Maximum loan up to Rs. 1,000,000
Choice of 12,24,36,48 and 60 months for payback
Lowest Mark- up
Quick processing
Full Credit Life insurance
Available from over 400 designated branches throughout Pakistan
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When payment is made at any merchant location using the card , exact purchase amount is deducted
from your account. Convenient, secure, quick and easy payment option Nationwide acceptability at
various merchant locations displaying ORIX Network logo Free of charge debit card transactions
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2.1.3.11 HBL iCard as your ATM Card
Offer a number of facilities such as cash withdrawal, Funds transfer between accounts, Balance Inquiry,
Mini Statement, PIN Change etc. Accepted at all 1LINK and MNET ATMs across the Country.
2.1.3.12 HBL Easy Access-
Online access to banking services at over two hundred branches in Pakistan
2.1.3.13 HBL Fast Transfer
A unique solution for overseas Pakistanis to send money back home in a swift and convenient manner.
2.1.3.14 Haryali Agricultural Loans
It entails all kind of agricultural finance facility for the rural market.
2.1.3.15 HBL E-Bank
It provides services via a dedicated communication link on the internet. The E-Banking
services provide anytime, anywhere banking to all 5 million customers. This service,
designed to be user friendly, assures secured access and confidentiality.
2.1.3.16 SWIFT
The bank is a major SWIFT user in 70 domestic branches & 21 overseas countries / locations in the
network. SWIFT services are being used for funds transfer, remittances and trade related
transactions, resulting in major improvement in payment processing capability for enhanced customer
service.
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2.1.4 AGENCY SERVICES TO THE CUSTOMERS
HBL also provides agency services to its customers. Some of which are as follow:
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2.1.4.1Collection of cheques
HBL pays and collects cheques on behalf of their customers, and for this it receives commission form
their account holders.
2.1.4.2 Collection of dividends
The Bank provides a very useful service by acting as an agent for its customers. It arranges the collection
of dividends on shares and securities held by its customers. The customer is simply to inform the issuer
of the securities that the interest on the securities is to be credited to his account in the Bank. Bank
charges commission for the collection of the dividends on behalf of account holders.
2.1.4.3 Purchase and sale of securities
HBL if authorized by the customers also makes purchase and sale of securities on the behalf of its
customers. Bank charges commission for the purchase or sale made by its on behalf on the customers.
2.1.4.4 Execution of standing instruction
HBL also executes the standing in case if it is ordered by the customers of the Bank to do so. These
instructions are usually given in writing to Bank. The Bank debits and credits the accounts of its
customer for the transactions carried out by the individual or firm.
2.1.4.5 Transfer of Funds
HBL, also transfers funds of the customers from one Bank to another Bank. If the transfer
is within one station, they dont charge any commission and even if they charge, they
charge on reduced rates.
2.1.4.6 Acts as an agent
HBL also acts as an agent, correspondent or representative of its customers at home and abroad.
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2.1.4.7 General utility services
HBL also performs a number of generally utility services to its customers which are as follows:
2.1.4.8 Foreign exchange Business
HBL transacts foreign exchange business by discounting foreign bills of exchange and thus provides
facilities for financing in foreign trade.
2.1.4.9 Acts as a referee
HBL provides useful services to its customers by acting as a referee for its credit worthiness. The
information is supplied in utmost secrecy and is based on financial standing of the customers.
Acceptance of Bills of exchange
HBL also undertakes acceptance business connection with bills of exchange and thus enables its
customers to obtain the desired credit.
2.1.4.10
Issuance of travelers cheques
HBL also issues travelers cheques. These cheques can be issued to anyone whether an
account holder or not and charges no commission on issuance of such cheques. HBL has recently
introduced Muhafiz rupee traveler cheques with enhanced features.
2.1.4.11 Collection of Utility Bill
Electricity, telephone and other such bills can also be deposited with HBL.
2.1.4.12 Locker Facility
HBL also provides locker facility to its customers where valuables of customers can be kept.
2.1.5 Operational Policy
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The operational policies of HBL deal with the method of provision of better services to its customer.
Through the introduction of new schemes as means of satisfaction for their customers, the operational
policy of HBL can be divided into two spears. Domestic operations. International operations.
2.1.5.1 Domestic Operations
HBL is quite successfully operating its domestic business. Facilities at the door step across the l
ength and breadth of the country also in conformity with the governments
socio-economic objectives. The number of operating domestic branches total 1350.
2.1.5.2 International Operations
HBLs overseas branches are continuously rendering satisfactory serv
ices and are also
contributing to the channeling home remittances of Pakistan working abroad. HBLs
international network comprises of 60 offices in 26 countries, operating in USA, Europe, UK, Middle
Ease, Asian Pacific Region and Africa. It is also the largest Banking in financial services provider in
Pakistan. HBL concentrates on markets and business they understood. Through a global network, the
Bank provide a comprehensive range of financial services, personal, commercial, trade services, cash
management, treasury/ capital market services, and private Banking. HBL strives to provide high quality
product through efficient delivery system and excellent customer services. In this way, HBL will grow
and achieve
2.1.6 ORGANIZATION STRUCTURE
A well-developed and properly coordinate structure is an important requirement for the success of any
organization. It provides the basic framework within which functions and procedures are performed.
Any organization needs a structure, which provides a framework for successful operations. The
operation of an organization involves a number of activities, which are related to decision making, and
communication of these decisions. These activities must be well coordinated so that the goals of the
organization are achieved successfully.
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2.1.6.1 STRUCTURE OF HBL
At present the Bank operates through one central and 23 Regional Offices and 1439 branches, all over
Pakistan. The president and Executives Committee look after the affairs of the Bank. Each Regional Head
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Quarter is headed by a Chief Executive and assisted by General Manager Operations and General
Manager Support Services. The Regional Head Quarter controls the branches in their area. Overseas
operations consist of 65 main branches, two affiliates, two representative offices and two subsidiaries.
President, from Head Office at Karachi controls the officers of the Bank with the help of the senior
management. Functional responsibilities of the Banks are broken into seven groups known as 1)
International Operations Group 2)
Corporate Banking and Treasury Investment Group 3)
Retail Banking and Operation Group 4)
Finance, Audit and Administration Group 5)
Assets Remedial Management Group 6)
Credit Policy Group 7)
Corporate Bank, Financial Institutions and Project Finance Group In addition to the overall controlling
authority, president also manages the International Operations Group individually. While the Senior
Executive Vice Presidents supervise rest of the functional groups. Each Senior Executive Vice President is
individually responsible for the group which is assigned to him. At the level of provinces there are
Regional Head Quarters headed by Regional Chief Executives (RCE). Each RCE is assisted by GM
operations and GM Support Services. Branches are also controlled by the RCEs. Circle Offices of the past
times have been removed to reduce Managerial Layers, which were working under the control of Zonal
Offices. This happened as a result of policy of beginning new changes in the organizational structure.
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2.1.6.2 Organizational Chart of HBL
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A chart defines the line of authority in an organization and its departmentation. It is a sort of visual
presentation of the organizational structure. It specifies the duties and responsibilities of the personnel
of the organization. The Organizational chart of HBL is given below.
2.1.6.3 Organizational Chart
Chairman
President
Board of Directors
SEVP
International Operations
SEVP Finance, Audit &
Administration
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2.1.7 ANALYSIS OF ORGANIZATIONAL STRUCTURE
The purpose of an organizational structure is to help in creating an environment for human
performance. It is then, a management tool and not an end in its own. Although the structure must
define the task to be done, the rules so established must also be designed in the light of abilities and
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motivation of the human recourse available. By analyzing the organizational structure of HBL presence
of the following elements can be found in its structure.
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2.1.7.1 Centralized Decision Making
By looking at the organizational structure of HBL would be found that the structure at HBL is a critical
one. All the decisions are made at the top management level and the subordinates have to obey these
decisions. This trend in the decision making shows a pattern of rigidity in structure of HBL.
2.1.7.2 Downward Communication
Communication is the process by which information is exchanged and understood by two or
more people, usually with the interest to motivate or influence the behavior of others in theorganization. Downward communication is the message and information sent from top management to
subordinates in a downward direction. Managers can communicate downward to the employees
through speeches, massages in company publications, information leaflets, tucked into pay envelops
material on bulletin boards, policy and procedure mandates.
The same pattern is followed at HBL. No doubt its a very trad
itional approach but it can create problems because it ignores the receiver of the communication
because the issuer of policies and procedures does not ensure communication. In reality may the
messages communicated downward are not understood perfectly.
2.1.7.3 Chain of Command
The chain of command is an unbroken line of authority that links all persons in an organization and
shows who reports to whom. By analyzing the organizational structure it can be found that there is a
scalar principle followed with in the Bank because each and every person knows to whom can one
report. The authority and responsibility for different tasks and duties are different, as well as every one
knows the successive levels of management all the way to the top.
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2.1.7.4 Authority and Responsibility
The chain of command illustrates the authority structure of HBL. Authority is the formal and legitimate
right of the manger to make decisions, issues orders and allocates resources to achieve organizational
desired outcomes. By analyzing the chain of command of HBL, one can come to the conclusion that, as
there is scalar pattern followed at the organizational setup of HBL therefore it is implied that everyone
in his
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position knows that what is ones authority and what is the responsibility
and the authority it allocated.
2.1.7.5 Delegation
Delegation is the process, which managers use to transfer the authority and responsibility to position
below in the hierarchy. Most organizations today encourage managers to delegate authority to the
lowest possible level to provide maximum flexibility to meet customer needs and adapts to the
environment. But at HBL no such system prevails the managers try to keep as much of the authority as
they can and if some authority is delegated it is sure that it will be misused
3.1 PERSONAL EXPERIENCE DURING INTERNSHIP
I started my internship at HBL liaqat road branch. Basically HBL hired internees for marketing of its new
product HBL Phone Banking. For this purposes HBL trained internees and sent them in different
branches of Islamabad and Rawalpindi region. First few days I worked on HBL Phone Banking. HBL
provides Phone banking for its account holder. During my work I meet different type of account holders.
Many interesting things came to know about account holder. For instance, I meet one of the account
holders, I told about phone banking to him and after few minutes when I finished my words about
phone banking . The person said
Yeh
mera bohat bhare account hay. Main nay es ke information apnay ghar walon ko b nahin de the jab
main hajj pay gia tha .aap ko es ke
information nahin doon ga One person said I did not need phone banking. Another
person said I preferred manual banking than phone banking. I think there are two reasons
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of hesitation of account holders from phone banking. First and important thing is that employees of HBL
are against this. They feel phone banking is burden on them. Second thing is that most of The account
holders of HBL are illiterate. I also worked in different department of HBL. The detail is as under
3.1.1 Issuance of Cheque Books
I was given the assignment of issuing Cheque books. It is issued to those customers whose accounts are
operated by the concern bank. Cheque books in two different categories are issued which are as fallows.
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Cheque book for Current account
Cheque book for Profit & Loss Sharing Accounts (PLS).
3.1.2 Filling of an Account Opening form
Account opening is an agreement in which customer offers his funds and bank accepts these funds,
therefore the nature of relation between a banker and customer is of a contractual one and all the
conditions applicable to this contract act are also applicable.
3.1.3 Remittance Department
Remittances are sums of money sent in payment for or against something. The remittance department
is mainly concerned with these payments. Remittances are divided into:
3.1.3.1 Inward remittances
Inward remittances refer to payment in favor of the banks account holders inward remittance includes
all Cheque received for collection.
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3.1.3.2 Outward remittances
Outward remittances are all payments made to other people on behalf of the account holders in the
bank. Outward remittances can also be done for none account holders who deposit cash in the bank and
remittance tools are prepared for them. Among the work done by the clearing department is receiving
credit advises in favor of the banks
account holders and also debit advises against the account holders accounts. There are
various tools of remittances to the customers who want the facility of remittance.
3.1.4 Demand Draft
This draft is made for the customer. This mode of remittance is normally used for payment to out of city
beneficiaries. They are normally also drawn on banks near the
beneficiarys residence.
3.1.5 Pay Order
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Pay orders are mostly used when a customer wants to pay someone who is in the same city as he uses
and who prefers non cash payment for any service or goods that he/she sold. This remittance facility is
providing to the general public as a whole.
3.1.6 Clearing
This is an extra ordinary banking facility which is provided to the public in this if they are maintaining an
account with the HBL they can lodge Cheque of any bank in Pakistan, which will be collected and
credited to their respective accounts through the process of clearing. In this representatives of various
banks are gathered at SBP and exchanges the Cheque presented to them for debit of the respective
accounts and in second round of meeting provide each other the fate of those Cheques to be credited to
respective accounts.
When people present the Cheque of any other bank for clearing, first enter the Cheque into the clearing
register of the bank. Then this Cheque sent to the NIFT for clearing.
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1.1 INTRODUCTION OF HBL
It is the prime Bank in country established in 1941 having a registered head office in Karachi. It was
nationalized in 1974, but recently on 26
th
February 2004 it has been privatized by Government of Pakistan and is taken over by Aga Khan Fund for
Economic Development (AKFED). They acquired 51 percent of shares of HBL. It is one of the largest
Banks of Pakistan with 1439 branches and having total assets of Rs.
434,931,930,000.
1.1.1 Brief History of HBL
HBL at its present state has a long and rich history of deeds and sacrifices. All this has been possible on
the account of sustained efforts. The first branch of HBL started functioning on 30
th
August, 1941 at Muhammad Ali Road Bombay, where Quaid-e-Azam Muhammad Ali Jinnah first of all
opened his personal account. Mohammad Ali Habib was a man of stern and persistent will. God.
Almighty had bestowed him with extra ordinary capabilities. He was devoted to his Bank with a view to
take his share in the uplift of the strife-torn and devastated Muslim community. At the time of its
inception, the Bank's total paid up capital was Rs.2.5 million but it is evident from the following data
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that the Bank experienced a steep rise in the business in a few years. In 1942, on the desire of Quaid-e-
Azam, Habib family migrated to Pakistan and later on shifted the Bank's Head Office from Bombay to
Karachi on 7
th
August, 1947 just one week prior to independence, to play its pivotal role in the development of this
newly born country. At the time of independence, the areas which now constitute Pakistan were
producing only agricultural products raw material for indo-Pak subcontinent. Partially no industries were
there to process the raw material, therefore the raw material was exported from Pakistan. There were
19 non-Indian foreign Banks which were engaged in the export of crops from Pakistan with only two
Pakistani Banks i.e. HBL and the Australia Bank. The circumstances were completely un-certain. The
confidence of the people had been shaken by the un-friendly environment and till the time peace had
not been restored, people
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would naturally have been interested in other things. The nation was quite young with extreme scarcity
of resources and these definitely added to the difficulties of the govt., to run its own Banking system
immediately. Following the announcement of the independence plan in June, 1947, the Hindus residing
in the territories now comprising Pakistan started transferring their assets to India and vice versa. The
Banks included those having their registered offices in Pakistan, transferred them to India in order to
bring a total collapse of the new state. It had been decided that the Reserve Bank of India would
continue to function in Pakistan so that the problem of demand and time liabilities, coinage, currencies,
exchange rate etc be settled between India and Pakistan and the Indian Notes would continue to be
legal tender in Pakistan till 30
th
September, 1948. Again due to certain differences between Indian Pakistan, the Indian Govt., withheld
Pakistan's share of Rs.75 core in forward and subscribed heavily to the Govt. of Pakistan to the tide over
the crises, Payment was made to the Govt., by the Bank at a very nominal rate of interest, even before
the actual issue of securities. At a time when this newly born country was at whirlwind of crises, it was
HBL which fulfilled generously the financial needs of all its sectors, paid salaries to the employees of all
Govt. departments, helped in the establishment of State Bank of Pakistan which the Quaid-e-Azam
inaugurated on July 1
st
, 1948. HBL after partition opened its branches throughout Pakistan to provide finance and other
facilities to the business community. In association with HBL, the Govt. sponsored Pakistan Finance
Corporation Limited for financing of cotton. The Bank helped handsomely in the construction of
WARSAK DAM PROJECT, WAPDA, & K.D.A. by provided finance and other facilities. Another innovation
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introduced by HBL is the evening Banking cash long after the crossing of normal Banking hours. It was
also the first in making available such new
facilities as Gift Cheques, Rupee Travelers Cheques, Credit Card System, short term and
long term schemes for small businessmen.
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1.1.2
MISSION
To be recognized as the leading financial institution of Pakistan and a dynamic international bank in the
emerging markets, providing our customers with a premium set of innovative products and services, and
granting superior value to our stakeholders
shareholders, customers and employees. OR Opening new horizons and fresh perspectives of trust,
dependability and service through 1425 domestic branches and 112 overseas offices with a
comprehensive range of financial products.
1.1.3 OBJECTIVES OF HBL
Following are some of the main objectives of HBL.
To earn profit for the Bank itself and for its shareholders.
To promote and boost up business sector inside the country.
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To provide employment opportunities to people.
To help in development and industrialization of the country.
To provide loan and advances to help out in self employment schemes.
1.1.4
SYMBOL OF HBL
Symbol depicts Bismillah ============Islamic Culture and Values Sword ============== Power
Lion================ As a symbol of strength
1.1.5 CORE VALUES OF HBL
HBL is firmly grounded with a corporate philosophy that incorporates five solid values which each
individual associated with the bank abides by.
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1.1.5.1 Humility
HBL encourages a culture of mutual respect and treats both their team members and customers with
humility and care.
1.1.5.2 Integrity
For them, integrity means a synergic approach towards abiding their core values. United with the forceof shared values and integrity, they form a network of a well-integrated team.
1.1.5.3 Meritocracy
At every level, from selection to advancement, they have designed a consistent system of human
resource practices, based on objective criteria throughout all the layers of the organization. HBL is
therefore, able to achieve a specific level of performance at every layer of the organization.
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1.1.5.4 Teamwork
Their team strives to become a cohesive and unified force, to offer the customer, a service beyond his
expectations. This force is derived from participative and collective endeavors, a common set of goals
and a spirit to share the glory and the strength to face failures together.
1.1.5.5 Culture of Innovation
Their aim is to be proactively responsive to new ideas, and to respect and reward the agents, leaders
and creators of change
1.1.6
CORPORATE BANKING
Only local bank with special focus on Corporate Banking with a presence in all major locations through
out the country, offering full range of Banking products / services and one window interface through
designated Relationship Managers. Our large equity base allows us to take longer per party exposures to
meet the needs of the largest corporate &
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our extensive local & foreign network allows us to imperiously service our clients. Corporate manages
well diversified portfolio, and include most of the top tier names of the market. Corporate Banking
offers tailor made products / solutions as required by corporate customers which includes:
1.1.6.1 Key Features of Corporate Banking
Funded facilities, ranging from short to medium and long term lending
Trade related financing.
Foreign currency financing.
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All sorts of non-funded facilities / services which include Cash receipts / payments, Remittances,
Collections, guarantees, letter of credit etc..
Customized products / solutions
2.1 Departments of HBL
There are few departments on which general or day to day banking of HBL composes. There details are
as under: Deposit department Clearing Departments Inland Remittance Department Bills Departments
Advances Departments Cash department CD Department Foreign Exchange Department
2.1.1 FUNCTIONS OF DIFFERENT DEPARTMENTS OF HBL
The basic functions of different departments HBL are as follows.
Accepting deposits
Making Loans and advance.
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2.1.1.1 Accepting Deposits
The primary function of HBL is to accept and receive surplus money from the people, which they
willingly deposit with the Bank. Like all other Banks, HBL also take
incitation to attract as much depositors as it can. They offer different deposit schemes to
its customers, which includes the following types. These schemes as follow.
2.1.1.1.1 Current Deposits
This type of account is often maintained by the business
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Current deposits are those deposits on which Bank offers no interest but it allows the account holders to
withdraw their money at any time they want without giving any prior notice to the community, which
requires large sums of money very often for their business transaction.
2.1.1.1.2 Profit and loss sharing account (Saving)
Saving deposits or PLS are those accounts on which Bank offers a lower rate of interest. After the
Islamization of the Banking system in the country it has been given the name of PLS saving account. The
Bank undertakes to repay deposits on demand up to a certain amount.
2.1.1.1.3 Fixed deposits
Fixed deposits are those which can be withdrawn only after the maturity period. In this type of deposits
the Bank allows high rates of interest depending on the time period of deposits. The shorter the period
of deposits, the less will be the interest and vice versa.
2.1.1.2 Making Loans and advances
The second most important function of HBL is to provide financing facility to its customers. These loans
and advances are usually made against document of title to goods, marketable securities, and personal
securities. HBL charges different interest rates on these loans and advances depending on the terms and
conditions settled with the customers. Following types of loans and advances are made available to the
customers.
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2.1.1.2.1 Demand Finances
Demand finances are those finances which are given to the borrowers for specified period and can be
called back without any prior notice. It is a single transaction finance. It can be long term, medium term
and short term. Mark up is also charge. Here the amount can be withdrawn once at the time of
disbursement.
2.1.1.2.2 Running Finance
HBL provides these finances against the security of current assets like shares, bond, cash
crops like cotton and other cashable commodities. The borrowers account is opened with
the Bank with the amount of the total loan provided or allowed to the borrower. The borrower is
allowed to withdraw any amount from his account within the specified limit and interest is charged only
on the amount actually withdrawn.
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2.1.1.2.3 Over Draft
This type of facility is usually given to very loyal clients. This allows them to withdraw over and above
the amount held by them in their account, and interest is charged only on the amount, which is
withdrawn in excess of the amount actually held in their account.
2.1.1.2.4 Discounting bills of exchange
Discounting bills of exchange can also be considered as a form of loan because it allows the holder to get
the bill encased before the maturity period. A bill of exchange is usually issued by the importer of goods
to the exporters, which allows them to be paid in their own currency after three months time. If the
exporter needs the money before the maturity of the bill of exchange, he can get his money from the
Bank by discounting the bill of exchange. The Bank utilizes their surplus funds by discounting the bills of
exchange at their market worth i.e. Bank pay to the holders of the bill on amount equal to their face
value after deducting interest at the current rate for the maturity period of the bill.
our stated objective of being a premier emerging market Bank.
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2.1.2 PRODUCTS OFFERED BY HBL
2.1.2.1 Tele-printer service
Introduced in 1952, this system helped the Bank to improve its services.
2.1.2.2
Rupee Travelers Cheques
It was introduced in 1957. Here the customers are provided the facility of encashment of
their travelers ch
eques through any branch of the Bank.
2.1.2.3 Small Factory Owner Scheme
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In 1959 the Bank offered loans to small scale producers under the small factory owner scheme in
order to boost the economy of Pakistan.
2.1.2.4 Foreign Tele printer Service
It was introduced in 1961. The idea behind this scheme was to provide quick and prompt Banking
services to customers in foreign countries.
2.1.2.5 Gift cheques schemes
It was launched in 1962. Under this scheme, the Bank provided customers with pre-printed cheques of
various denominations which could be used to send gifts to their loved one on various occasions.
2.1.2.6 School Banking
This scheme was introduced in 1962 to provide Banking services to children in a number of schools
though out the country.
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2.1.2.7
Drive in Banking
HBL established Drive in branches in 1962 at various major cities of the country where
the customers could avail Banking services without getting down from their vehicles
.
2.1.2.8 Mobile Banking
It was introduced in 1962. The feature of this scheme is to provide Banking services to the customers
residing in the rural areas.
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2.1.2.9 Night safe scheme
In 1962 the Bank offered facility to their customers to deposit their valuables at night in specified
branches of the Bank.
2.1.2.10 Computer accounts
In 1962 the Bank introduced computer accounts through which most of the accounts in head office were
computerized
2.1.2.11 Computer Prize Bond
It was introduced in 1966. It is a scheme through which prize could be declared for prize bond scheme.
2.1.2.12 Credit card scheme
It was introduced in 1966 through which customers could get certain sum of money from specified
branches. Many business organizations accepted payments through valid credit cards.
2.1.2.13 Infant Saving Scheme
In 1968 the Bank offered infants to open saving accounts operated by their parents/ guardians.
2.1.2.14 Courtesy Card
It was launched in 1968 through which the customer could be introduced to other branches in the
country.
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2.1.2.15 Deposit growth certificate
This scheme was introduced in 1975 with increase rate of interest.
2.1.2.16 Special five years deposit certificate
This scheme was introduced in 1975 where the major emphasis is on increased rate of interest.
2.1.2.17 Dollar traveler cheques
Introduced in 1976, the scheme was more helpful and safe for the travelers than carrying foreign
currency notes.
2.1.2.18 Haj accidental death scheme
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Introduced in 1983, according to this insurance scheme, if a Haji who has submitted his Haj application
through HBL died while he was away for performing Haj, his family was to be provided a certain sum of
money.
2.1.2.19 Auto Cash Teller Machine
Auto cash machines are installed in 1988 at various branches which allows customers to withdraw cash
round the clock and on all days of the week.
2.1.2.20 Transport Finance Scheme
In 1989 the Bank in order to decrease unemployment in the country introduced owner, driver taxi
finance and scooter loans. According to this scheme they were provided loans on soft terms.
2.1.2.21 Gold card system
In 1991 HBL introduced the scheme with the features of offering card holders to get upto Rs. 10,000 at a
time.
2.1.2.22 Muhafiz Rupee Traveler Cheque
It was introduced in 1998. A cheques available in denomination of Rs. 10,000, 25,000, 50,000 and
100,000 with the advantage of 100% free purchase and encashment.
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2.1.2.23 Distinct Properties Of Muhafiz
It can be issued from more than 700 branches all over Pakistan.
Muhafiz provides the facility of payment in all branches of HBL.
There is no commission and fee charge for purchase of Muhafiz HBL keeps alive
the tradition of Serve you better charges nothing for the purchase and sale of
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Muhafiz.
2.1.3 INNOVATIVE PRODUCTS
2.1.3.1House Finance
HBL provides the facility of house finance: Financing available for: 1.
Purchase of house 2.
Home improvement and renovation 3.
Self Construction
2.1.3.1Some characteristics of House Finance of HBL Are:
Lowest marl-Ups leading to affordable monthly installments
5 years fixed Rates/ one year Floating Rate available.
Lowest processing charges
Financing tenures ranging from 3 to 20years.
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Financing limits of up to Rs. 7.5 million (Rs. 3.0 million for Home Improvement/Renovation)
Quick Processing
2.1.3.2Auto Finance
Habib Bank Auto Finance, a lease product, designed to offer you an economical way for owing the car of
your choice.
Some characteristics are:
Lowest Down Payment
Lowest monthly rentals
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Fixed repayment tenures of 36,48and 60 months.
Lowest Processing charges
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Insurance premium rates as low as 3%
World wide personal accidental insurance coverage of up to Rs. 200,000.
All locally assembled new cars can be financed through this scheme
.
2.1.3.4 HBL Flexi Loan:
HBL had introduced a unique loan system for the middle income serving people in various public sectors.
It is basically meant for those in service people who earn more than Rs. 5,000 per month. This loan
meets the petty requirements of the salaried class. Since the introduction of this scheme Rs. 6 billion is
advanced throughout the country. The maximum limit of this loan is Rs. 3,000,000.
2.1.3.5 Life Style
Habib Bank Lifestyle is an economical financing scheme for Household Appliances and consumerElectronics. Salient features of HBL LIFESTYLES:
Loans for salaried/ self Employed individuals or business persons
Low Mark-ups leading to affordable monthly installments.
Financing from Rs.10,000 to Rs.500,000
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Fixed tenures of 6,12,18,24 and 36 months
Low Processing charges
Full credit Life Insurance
Free Doorstep Delivery of items
Available throughout Pakistan from over 330 designated Habib Bank Branches
2.1.3.6 HBL Rescue
(Balance Transfer Facility) HBL provides the facility to transfer your personal loan and credit card
liabilities, at the lowest rates ever.
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2.1.3.7 For Personal Loans
Maximum loan up to Rs. 1,000,000
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Choice of 12,24,36,48 and 60 months for payback
Lowest Mark- up
Quick processing
Full Credit Life insurance
Available from over 400 designated branches throughout Pakistan
2.1.3.8 For Credit Card Payments
Maximum loan up to Rs.1,000,000
Lowest mark-up-compared to any credit card
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2.1.3.13 HBL Fast Transfer
A unique solution for overseas Pakistanis to send money back home in a swift and convenient manner.
2.1.3.14 Haryali Agricultural Loans
It entails all kind of agricultural finance facility for the rural market.
2.1.3.15 HBL E-Bank
It provides services via a dedicated communication link on the internet. The E-Banking
services provide anytime, anywhere banking to all 5 million customers. This service,
designed to be user friendly, assures secured access and confidentiality.
2.1.3.16 SWIFT
The bank is a major SWIFT user in 70 domestic branches & 21 overseas countries / locations in the
network. SWIFT services are being used for funds transfer, remittances and trade related
transactions, resulting in major improvement in payment processing capability for enhanced customer
service.
2.1.4 AGENCY SERVICES TO THE CUSTOMERS
HBL also provides agency services to its customers. Some of which are as follow:
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2.1.4.1Collection of cheques
HBL pays and collects cheques on behalf of their customers, and for this it receives commission form
their account holders.
2.1.4.2 Collection of dividends
The Bank provides a very useful service by acting as an agent for its customers. It arranges the collectionof dividends on shares and securities held by its customers. The customer is simply to inform the issuer
of the securities that the interest on the securities is to be credited to his account in the Bank. Bank
charges commission for the collection of the dividends on behalf of account holders.
2.1.4.3 Purchase and sale of securities
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HBL if authorized by the customers also makes purchase and sale of securities on the behalf of its
customers. Bank charges commission for the purchase or sale made by its on behalf on the customers.
2.1.4.4 Execution of standing instruction
HBL also executes the standing in case if it is ordered by the customers of the Bank to do so. These
instructions are usually given in writing to Bank. The Bank debits and credits the accounts of its
customer for the transactions carried out by the individual or firm.
2.1.4.5 Transfer of Funds
HBL, also transfers funds of the customers from one Bank to another Bank. If the transfer
is within one station, they dont charge any commission and even if they charge, they
charge on reduced rates.
2.1.4.6 Acts as an agent
HBL also acts as an agent, correspondent or representative of its customers at home and abroad.
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2.1.4.7 General utility services
HBL also performs a number of generally utility services to its customers which are as follows:
2.1.4.8 Foreign exchange Business
HBL transacts foreign exchange business by discounting foreign bills of exchange and thus provides
facilities for financing in foreign trade.
2.1.4.9 Acts as a referee
HBL provides useful services to its customers by acting as a referee for its credit worthiness. The
information is supplied in utmost secrecy and is based on financial standing of the customers.
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Acceptance of Bills of exchange
HBL also undertakes acceptance business connection with bills of exchange and thus enables its
customers to obtain the desired credit.
2.1.4.10
Issuance of travelers cheques
HBL also issues travelers cheques. These cheques can be issued to anyone whether an
account holder or not and charges no commission on issuance of such cheques. HBL has recently
introduced Muhafiz rupee traveler cheques with enhanced features.
2.1.4.11 Collection of Utility Bill
Electricity, telephone and other such bills can also be deposited with HBL.
2.1.4.12 Locker Facility
HBL also provides locker facility to its customers where valuables of customers can be kept.
2.1.5 Operational Policy
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The operational policies of HBL deal with the method of provision of better services to its customer.
Through the introduction of new schemes as means of satisfaction for their customers, the operational
policy of HBL can be divided into two spears. Domestic operations. International operations.
2.1.5.1 Domestic Operations
HBL is quite successfully operating its domestic business. Facilities at the door step across the l
ength and breadth of the country also in conformity with the governments
socio-economic objectives. The number of operating domestic branches total 1350.
2.1.5.2 International Operations
HBLs overseas branches are continuously rendering satisfactory serv
ices and are also
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contributing to the channeling home remittances of Pakistan working abroad. HBLs
international network comprises of 60 offices in 26 countries, operating in USA, Europe, UK, Middle
Ease, Asian Pacific Region and Africa. It is also the largest Banking in financial services provider in
Pakistan. HBL concentrates on markets and business they understood. Through a global network, the
Bank provide a comprehensive range of financial services, personal, commercial, trade services, cashmanagement, treasury/ capital market services, and private Banking. HBL strives to provide high quality
product through efficient delivery system and excellent customer services. In this way, HBL will grow
and achieve
2.1.6 ORGANIZATION STRUCTURE
A well-developed and properly coordinate structure is an important requirement for the success of any
organization. It provides the basic framework within which functions and procedures are performed.
Any organization needs a structure, which provides a framework for successful operations. The
operation of an organization involves a number of activities, which are related to decision making, and
communication of these decisions. These activities must be well coordinated so that the goals of the
organization are achieved successfully.
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2.1.6.1 STRUCTURE OF HBL
At present the Bank operates through one central and 23 Regional Offices and 1439 branches, all over
Pakistan. The president and Executives Committee look after the affairs of the Bank. Each Regional Head
Quarter is headed by a Chief Executive and assisted by General Manager Operations and General
Manager Support Services. The Regional Head Quarter controls the branches in their area. Overseas
operations consist of 65 main branches, two affiliates, two representative offices and two subsidiaries.
President, from Head Office at Karachi controls the officers of the Bank with the help of the senior
management. Functional responsibilities of the Banks are broken into seven groups known as 1)
International Operations Group 2)
Corporate Banking and Treasury Investment Group 3)
Retail Banking and Operation Group 4)
Finance, Audit and Administration Group 5)
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Assets Remedial Management Group 6)
Credit Policy Group 7)
Corporate Bank, Financial Institutions and Project Finance Group In addition to the overall controlling
authority, president also manages the International Operations Group individually. While the Senior
Executive Vice Presidents supervise rest of the functional groups. Each Senior Executive Vice President is
individually responsible for the group which is assigned to him. At the level of provinces there are
Regional Head Quarters headed by Regional Chief Executives (RCE). Each RCE is assisted by GM
operations and GM Support Services. Branches are also controlled by the RCEs. Circle Offices of the past
times have been removed to reduce Managerial Layers, which were working under the control of Zonal
Offices. This happened as a result of policy of beginning new changes in the organizational structure.
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2.1.6.2 Organizational Chart of HBL
A chart defines the line of authority in an organization and its departmentation. It is a sort of visual
presentation of the organizational structure. It specifies the duties and responsibilities of the personnel
of the organization. The Organizational chart of HBL is given below.
2.1.6.3 Organizational Chart
Chairman
President
Board of Directors
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SEVP
International Operations
SEVP Finance, Audit &
Administration
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2.1.7 ANALYSIS OF ORGANIZATIONAL STRUCTURE
The purpose of an organizational structure is to help in creating an environment for human
performance. It is then, a management tool and not an end in its own. Although the structure must
define the task to be done, the rules so established must also be designed in the light of abilities and
motivation of the human recourse available. By analyzing the organizational structure of HBL presence
of the following elements can be found in its structure.
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2.1.7.1 Centralized Decision Making
By looking at the organizational structure of HBL would be found that the structure at HBL is a critical
one. All the decisions are made at the top management level and the subordinates have to obey these
decisions. This trend in the decision making shows a pattern of rigidity in structure of HBL.
2.1.7.2 Downward Communication
Communication is the process by which information is exchanged and understood by two or
more people, usually with the interest to motivate or influence the behavior of others in the
organization. Downward communication is the message and information sent from top management to
subordinates in a downward direction. Managers can communicate downward to the employees
through speeches, massages in company publications, information leaflets, tucked into pay envelops
material on bulletin boards, policy and procedure mandates.
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The same pattern is followed at HBL. No doubt its a very trad
itional approach but it can create problems because it ignores the receiver of the communication
because the issuer of policies and procedures does not ensure communication. In reality may the
messages communicated downward are not understood perfectly.
2.1.7.3 Chain of Command
The chain of command is an unbroken line of authority that links all persons in an organization and
shows who reports to whom. By analyzing the organizational structure it can be found that there is a
scalar principle followed with in the Bank because each and every person knows to whom can one
report. The authority and responsibility for different tasks and duties are different, as well as every one
knows the successive levels of management all the way to the top.
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2.1.7.4 Authority and Responsibility
The chain of command illustrates the authority structure of HBL. Authority is the formal and legitimate
right of the manger to make decisions, issues orders and allocates resources to achieve organizational
desired outcomes. By analyzing the chain of command of HBL, one can come to the conclusion that, as
there is scalar pattern followed at the organizational setup of HBL therefore it is implied that everyone
in his
position knows that what is ones authority and what is the responsibility
and the authority it allocated.
2.1.7.5 Delegation
Delegation is the process, which managers use to transfer the authority and responsibility to position
below in the hierarchy. Most organizations today encourage managers to delegate authority to the
lowest possible level to provide maximum flexibility to meet customer needs and adapts to the
environment. But at HBL no such system prevails the managers try to keep as much of the authority as
they can and if some authority is delegated it is sure that it will be misused
3.1 PERSONAL EXPERIENCE DURING INTERNSHIP
I started my internship at HBL liaqat road branch. Basically HBL hired internees for marketing of its new
product HBL Phone Banking. For this purposes HBL trained internees and sent them in different
branches of Islamabad and Rawalpindi region. First few days I worked on HBL Phone Banking. HBL
provides Phone banking for its account holder. During my work I meet different type of account holders.
Many interesting things came to know about account holder. For instance, I meet one of the account
holders, I told about phone banking to him and after few minutes when I finished my words about
phone banking . The person said
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Inward remittances refer to payment in favor of the banks account holders inward remittance includes
all Cheque received for collection.
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3.1.3.2 Outward remittances
Outward remittances are all payments made to other people on behalf of the account holders in the
bank. Outward remittances can also be done for none account holders who deposit cash in the bank and
remittance tools are prepared for them. Among the work done by the clearing department is receiving
credit advises in favor of the banks
account holders and also debit advises against the account holders accounts. There are
various tools of remittances to the customers who want the facility of remittance.
3.1.4 Demand Draft
This draft is made for the customer. This mode of remittance is normally used for payment to out of city
beneficiaries. They are normally also drawn on banks near the
beneficiarys residence.
3.1.5 Pay Order
Pay orders are mostly used when a customer wants to pay someone who is in the same city as he uses
and who prefers non cash payment for any service or goods that he/she sold. This remittance facility is
providing to the general public as a whole.
3.1.6 Clearing
This is an extra ordinary bank