FINAL Internship Report of Askari Bank

askari bank

1

2

askari bank

ASKARI BANK LIMITED SUBMITTED TO: SIR ZAHID PREPARED BY:

CLASS :

MUSTAFA TAHIR ROLL NO: 06 (SELF SUPPORT) M.COM (2008-2010)

DEPARTMENT OF COMMERCE,

UNIVERSITY OF SARGODHA

askari bank

BANK CERTIFICATE

3

askari bank

4

5

askari bank

PREFACE

6

askari bank

The pre-requisite of internship program is to make the students of M.Com aware of the practical expertise and to acquaint them with the real management process. With an intention of grooming the best executives of the future, Department of Commerce has organized a comprehensive internshiptraining program. All of us were placed in leading organizations of business arena to gain first hand knowledge and insight into their management and working. So, when I was given the chance of selecting an organization, I opted for Askari Commercial Bank Limited. Getting a chance of working in Askari Bank Limited. proved to be very beneficial for me. I think that I gained comprehensive insight into the working of a bank. But nothing could have been possible without the co-operation and guidance of the officers of Askari Bank Ltd, which is formally (Askari Commercial Bank Limited.) After the completion of internship program, internship report has been prepared just in accordance with the practical exposure. I have strong belief that this report will guide and ease the readers to understand the operations of banking system and more prominently have good knowledge about Askari Bank Limited, one of the most trusty and leading banks in Pakistan. Dear readers, I hope that you will appreciate my report and sense that reading my report is not like to waste the time in any respect.

ACKNOWLEDGEMENT Countless thanks to Almighty Allah (The most merciful the most beneficial). The only creator of universe who enabled me to complete this report, in spite of various difficulties. All respects to the Holy

7

askari bank

Prophet (P.B.U.H) who enable us to recognize our greater and whose spiritual teaching guide us in every matter of the life. I would like to express my gratitude to the Department of Business Administration for giving me the opportunity and arranging such an extensive internship program. I would also like to acknowledge my debts to those officers Askari Bank Limited, of who have been extremely helpful for me. First of all Mr.Ghulamm Habib, He has been a permanent source of encouragement and guidance. His helpful nature did not restrict me to the premises to the branch but extended to any place and any matter I needed his support on. I would also acknowledge my debt to Mr.Nabeel , for the knowledge he provided me. In short, I would always be thankful to all the managers and officers, for their courteous and compassionate treatment given to me.

DEDICATIONS All the efforts in compiling this report are dedicated To My Beloved Parents, Brothers, Friends & My Honourable Faculty Members of Department of Commerce, As they helped me in this Achievement

askari bank

8

EXECUTIVE SUMMARY The Department of Commerce was established in 2005 and offers Masters and Bachelors degree in Commerce. An important programme is six to eight weeks internship with any recognized institution. I decided to take up Askari Commercial Bank Limited for my internship because its competing bank nowadays and gives a good training to the internees. So in order to learn more this was my choice. This report is about my internship that I have undergone at Askari Commercial Bank Limited Sargodha Branch from 15th June 2009 to 27th July 2009. During my internship I am able to learn practical aspect of business, and get good working experience. On the very first day of my internship I reported to Operation Manager Mr.Farukh Mehmood. He gave me a small introduction of the bank and introduced me to the staff of the bank. Every internee is rotated among the bank’s departments and so was I. This rotation is done in order to have general concept regarding bank’s functions, operations and policies. In this rotation the stay in department is usually a week. I have learned more about the Bills and Foreign Trade department and have given below the caption of activities I was involved in during the period of six weeks. During my internship I found that Askari Commercial Bank is a best bank in Sargodha because most of the Exports and Imports in Sargodha are done through this bank. Today every customers is the rational customer he knows the value of money and wants a best return on his money. Earlier Askari Commercial were able to attract customer due to their ancillary services like ATM Cards, Credit Cards, Online Banking etc. but now all the banks are offering these services through their own network or through third party contracting, so our plus points are no more our advantages. So the only thing through which ACBL can increase their deposits are profit rates, because the customers only want maximum profit on their investment.

9

askari bank Table of Contents 1. Industry Introduction 2. An Overview of Organization - History of Organization - Nature of Organization a. Vision Statement b. Mission Statement - Main Features - Competitors 3. Organizational Structure - Hierarchy Chart - Number of Employees - Main Offices - Introduction of all Departments - Comments on Organizational Structure 4. Work done by Internee 5. Financial Analysis of Organization - Financial data of last 5 years a. Horizontal Analysis b. Vertical Analysis - Significance of Ratio - Components of Ratios (formulae used) - Horizontal Analysis of Ratios - Interpretation of Ratios 6. SWOT Analysis 7. Conclusion

askari bank 8. Recommendations 9. Limitations 10. Bibliography 11. Annexes 12. Glossary

1.INTRODUCTION OF INDUSTRY

10

askari bank

11

For developing administrative capabilities and giving practical touch to the studies, a program of six weeks has been introduced as part of our M.Com studies. For this Purpose we entirely depend on the active cooperation of well-established and reputed organizations. The students prepare internship report on the basis of this training and take viva voce-examination. I have divided my report in some parts. The major part of my internship report is based on my working in the bank. The names and brief introduction of these parts is as under:-

INTRODUCTION OF ASKARI BANK:When the Bank came into being? Its brief History, its Mission, its Values, and what services it provide to its customers, is discussed in this part.

ORGANIZATIONAL CHART OF THE BANK:The list of names of management personnel, management hierarchy and Organ gram of Askari Bank

FIELD OF ACTIVITIES:In what fields, Askari Bank deal. The main fields of activities are Retail Banking, Consumer Banking, Electronic Banking, Correspondent Banking, and Treasury and Investment.

MY INTERNSHIP PROGRAM:-

12

askari bank

It is the main part of my internship report. It consist on the detail of the work that I have done there as an internee. In Askari Bank I worked in Account opening, Remittance, Clearing, Credit, Foreign Trade and Accounts Department. The detail of my work in each department is described in this part with all possible details.

FINANCIAL ANALYSIS:It consists on horizontal analysis, vertical analysis and financial ratios of Askari Bank and pros and cons of this analysis.

FINDINGS AND RECOMMENDATIONS:This part contains the Findings and brief recommendations given by me to the bank.

DEFINITIONS OF BANK (1) “Banks do business of money. Rather banks do business of lending and

borrowing loans.”

(2) “Banks are guardian distributor of cash money”. (3) “Banker or a bank or a person or company carrying on the business

receiving

moneys

and

collecting

drafts

for

customers subject to the obligation of honoring cheques drawn upon them from time to time by the customer to the extent of the amount available on their current accounts”.

TYPES OF BANKS Primarily all banks gather temporarily idle money for the purpose of lending to other and investment gain in the form of return, profits and dividends etc. however, due to the verity of resources of money and the

askari bank

13

diversity in lending and investment operations, banks have been place in various categories, such as  Commercial bank  Savings bank  Merchant banks  Mortgage banks  Consumer bank  Investment bank  Central bank

COMMERCIAL BANK: The commercial banks received deposits from the general public, which are repayable on demand upon written orders of the depositors. As their most distinctive feature the commercial banks maintain the checking accounts for the constitutions. Te commercial banks are also distinguished for providing shortterm finance to trade, commerce and industry to enable these sectors to expand their productive activities

MERCHANT BANKS: Merchant banks are those, which have been mainly financing the domestic and international trade. During the late 18 t h and early 19 t h centuries the trade between countries was financed by bill of exchange by well-reputed merchant’s houses for which they would charges a commission for their services

SAVINGS BANKS: The basic purpose of these banks is to inculcate the habit of saving in the people the savings banks deposits are not repayable upon only the written order of depositor but the depositor of his agent has

askari bank

14

to appear personally at the saving banks to make withdrawal and for this purpose he must present a pass book a certificate of deposit or some similar documents to prove his right to receive his payments. Post office savings banks and savings accounts at national saving organizations are well known national saving banks in Pakistan.

MORTGAGE BANKS: These banks mainly deal in loans for acquisition or construction of real estate against the securities of mortgage.

CONSUMER BANKS : These banks providing finance for purchasing consumption goods for the use of Brewers.

INVESTMENT BANKS: These banks assists business houses and governmental bodies to raise money through the sale of stocks and bond for usually long term purposes these banks perform the usual functions of raising deposits of idle money from the public and finance the business houses other bodies.

CENTRAL BANKS: Central banks occupy the unique position in banking structure of a country because they have been interested with the responsibility of controlling the money supply, interest rate, and financial market of a country for the purpose of economic development.

15

askari bank INTRODUCTION ABOUT BANKING SECTOR

Banking is the business of providing financial services to consumers and businesses. The basic services a bank provides are checking accounts, which can be used like money to make payments and purchase goods and services; savings accounts and time deposits that can be used to save money for future use; loans that consumers and businesses can use to purchase goods and services; and basic cash management services such as check cashing and foreign currency exchange. Four types of banks specialize in offering these basic banking services: commercial banks, savings and loan associations, savings banks, and credit unions. A broader definition of a bank is any financial institution that receives,

collects,

transfers,

pays,

safeguards money for its customers.

exchanges,

lends,

invests,

or

This broader definition includes

many other financial institutions that are not usually thought of as banks but which nevertheless provide one or more of these broadly defined banking services. These institutions include finance companies, investment

companies,

investment

banks,

insurance

companies,

pension funds, security brokers and dealers, mortgage companies, and real estate investment trusts.

2.AN OVERVIEW OF ORGANIZATION Askari Bank was incorporated in Pakistan on October 9, 1991, as a public limited company. It commenced operations on April 1, 1992, and is principally engaged in the business of banking, as defined in the Banking Companies Ordinance, 1962. The Bank is listed on the Karachi, Lahore and Islamabad Stock Exchanges and its share have consistently remained amongst the highest quoted in the banking sector in Pakistan. Askari

Bank

has

expanded

into

a

nation-wide

presence

of

121

branches, including 6 dedicated Islamic Banking Branches, and an offshore Banking Unit in Bahrain, A shared network on over 1300 on-line

16

askari bank

ATMs covering all major cities in Pakistan supports the delivery channels for customer service. As at December 31, 2006, the Bank had equity of Rs.11.1 billion and total assets of Rs. 1660. Billion, with over 665000 banking customers, Serviced by our 4585n employees.

A.VISION TO BE THE BANK OF FIRST CHOICE IN THE REGION.

B.OUR MISSION To

be

the

leading

international

private

presence,

sector

delivering

service

through

innovative

effective

human

resource

bank

in

quality

technology

management

and in

a

modern and progressive organizational culture of meritocracy, maintaining high ethical and professional

standards,

while

providing

enhanced value to all our stakeholders, and contributing to society. You

may

already

have

seen

our

advertising

campaign and the new look of our branches, but I take

pleasure

identity:

in

sharing

with

you

our

new

Pakistan

with

an

askari bank

17

Our shorter, smarter name, crisper new colours and fresh new look are an insight to our views on banking. We aim to provide innovative financial solutions to our customers, with the security of knowing they are dealing with one of the strongest financial institutions in the country. Our new slogan

Re f le ct s o u r cu sto me r se rvice ph ilo sop h y – we ’re Aska ri B an k, ask u s!

OBJECTIVES To achieve sustained growth and profitability in all areas of business. To build and sustain a high performance culture, with a continuous improvement focus. To develop a customer-service oriented culture with special emphasis on customer care and convenience. To build an enabling environment, where employees are motivated to contribute to their full potential. To effectively manage and mitigate all kinds of risks inherent in the banking business. To maximize use of technology to ensure cost-effective operations, efficient management information system, enhanced delivery capability and high service standards. To manage the Banks portfolio of businesses to achieve strong and sustainable shareholder returns and to continuously build shareholder value. To deliver timely solutions that best meets the customers’ financial needs. To explore new avenues for growth and profitability.

STRATEGIC PLANNING

askari bank

18

To comprehensively plan for the future to ensure sustained growth and profitability. To facilitate alignment of the vision, mission, corporate objectives and with the Business Goals and Objectives. To provide strategic initiatives and solutions for projects, products, policies and procedures. To provide strategic solutions to mitigate weak areas and to counter threats to profits. To identify strategic initiatives and opportunities for profit. To create and leverage strategic assets and capabilities for competitive a dva nt a ge .

MAIN FEATURES FIELD OF ACTIVITIES 1. 2. 3. 4. 5.

Retail Banking Consumer Banking Electronic Banking Correspondent Banking Treasury And Investment

1- RETAIL BANKING I. II. III. IV. V. VI.

Account Opening Department Remittance Department Clearing Department Cash Department Accounts Department Foreign Exchange Department

COMPETITORS The main competitors of the bank are:

• Muslim Commercial Bank. • Union Bank. • Prime Commercial Bank.

askari bank • HBL Bank • NIB Bank • NBP Bank • Silk Bank • Allied Bank

3.ORGANIZATIONAL STRUCTURE

19

20

askari bank CODE OF ETHICS AND CONDUCT

Askari Bank seeks to maintain high standards of service and ethics enabling to be perceived as impartial, ethical and independent. In addition to the general guidelines, the following are the salient features of the Banks code of ethics and conduct. •

Presence

of

a

corporate

culture

that

seeks

to

create

an

environment where all persons are treated equitably and with respect. •

Employees must carry out their responsibilities in a professional manner at all times. They must act in a prudent manner and must avoid situations that could reflect unfavorably on themselves, the Bank or its customers.

•

Employees must commit to the continued development of the service culture in which the Bank consistently seeks to exceed customers’

expectations.

Fairness,

Truthfulness

and

Transparency govern our customer relationships in determining the transactional terms, conditions, rights and obligations. •

Employees must safeguard confidential information which may come

to

their

responsibilities.

possession Respect

for

during

the

customers

discharge confidential

of

their

matters,

merits the same care as does the protection of the Bank’s own affairs or other interests. •

Employees must ensure that know your customer principals are adhered by obtaining sufficient information about the customers to reasonably satisfy ourselves as to their reputation, standing and the nature of their business activities.

•

Employees must avoid circumstances in which their personal interest conflicts, or may appear to conflict, with the interest of the Bank or its customers. Employees must never use their position in the Bank to obtain an advantage or gain.

21

askari bank •

Employees must not accept gifts, business entertainment or other benefits from a customer or a supplier / vender, which appear pr may appear to compromise commercial or business relationship.

•

Employees must remain alert and vigilant with respect frauds, thefts or illegal activities committed within the Bank premises.

ORGANIZATIONAL CHART

Chairman Board of Directors

Chief Executive Officer Executive Committee Executive Incharges

Area Manager North

HIERARCHY

Area Manager South

22

askari bank CORPORATE INFORMATION

Lt. Gen. Nadeem Taj

Chairman

Lt. Gen (R) Imtiaz Hussain

Chairman Executive Committee

Maj Gen (R) Saeed Ahmed Khan

Director

Mr. Zafar Alam Khan Sumbal

Director

Dr. Bashir Ahmad Khan

Director

Mr. Shahid Mahmud

Director

Mr. Muhammad Riyazul Haque

Director

Mr. Ali Noormahomed Rattansey

Director

Mr. Wazir Ali Khoja ( Nominee NIT )

Director

Mr. Muhammad Rafiquddin Mehkari

President & Chief Executive

Mr. M. A. Ghazali Marghoob

Company Secretary

AUDIT COMMITTEE

Dr. Bashir Ahmad Khan

Chairman

Mr. Ali Noormahomed Rattansey

Member

AUDITORS KPMG Taseer Hadi & Co.

LEGAL ADVISORS

Chartered Accountants

askari bank

Rizvi, Isa, Afridi & Angell

REGISTRAR & SHARE TRANSFER OFFICE

M/s THK Associates (Private) Limited, Ground Floor, State Life Building # 3, Dr. Ziauddin Ahmad Road, Karachi – 75530 P.O.Box No. 8533, Karachi. Tel :

(021) 5689021, 5686658, 5685681

Fax:

(021) 5655595

UAN:

111-000-322

REGISTERED OFFICE /HEAD OFFICE

AWT Plaza, The Mall, P.O.Box 1084, Rawalpindi. Tel :

(051) 9063000

Fax:

(051) 9272455

EXECUTIVE PROFILES • •

Mr. Shaharyar Ahmed- President & Chief Executive Mr. Agha Ali Imam- Senior Executive Vice President

23

askari bank • • • • • • • • • •

24

M.R Mehkari - Senior Executive Vice President Mr. Muhammad Arif Mian, Senior Executive Vice President Suhail Ahmad Rizvi- Executive Vice President Mr. Nazimuddin A. Chaturbhai, Senior Executive Vice President Mr. Ejaz Ahmed Khan, Senior Executive Vice President Malik Asad Ali Noon, Executive Vice President Mr. Tahir Aziz, Executive Vice President Mr. Israr Ahmed, Executive Vice President Mr. Moghis Rafiuddin Bokhari, Executive Vice President Mr. Nauman Bashir Khan, Senior Vice President

Mr. Muhammad Ahmed Khan-Senior Vice President

INTRODUCTION OF ALL DEPARTMETS ACCOUNT OPENING DEPARTMENT This department is responsible for the opening and closing of accounts. In consideration of Askari Bank , opening and/or continuing to maintain any account, the Account Holder/Depositor or Investor would be bound by the terms and conditions written on the account opening form. The first part establishes the preference regarding the type of account to be maintained. The various choices offered in this regard are:     

Current Account Saving/ PLS Account Royal Profit Account Term Deposit Account Basic Banking Account

CURRENT ACCOUNT The current account is the most common account and the most preferred amongst business concerns. There is no restriction on the amount of withdrawal. Current account enables the client to do cash transactions in a more efficient manner.

askari bank

25

Features: Current Accounts can be opened in the ASKARI BANK with the sum not less than Rs.5,000/ No Profit  No deduction of Zakat  Account close charges Rs.150  Service charges for maintaining minimum balance Rs.100  Online Charges Rs.100

Saving / PLS Account In Pakistan (PLS) saving account was introduced in January 1982. Individuals who wish to invest their money in order to get profit maintain this account.

Features: The minimum balance requirement for opening the account is Rs.10,000.  There can be profit or loss on the investment of the Customer’s funds deposited with the bank and this amount shall be acceptable to the Customer. The profit is paid half yearly.  Deduction of Zakat  With holding tax on profit @ 10%  No Service Charges to close the account  Service Charges for maintaining minimum balance Rs.50  Online Charges Rs.150

Term Deposit Account A term deposit is a deposit that is made of a certain period of time. At the end of specific period the customer is allowed to with draw the principal amount.

Features: Fixed Profit  The longer the period for which the amount is kept higher is rate of interest.  Term Deposit usually for the period of three months, six months, One year, and five years.  Deduction of Zakat and withholding Tax @ 10%.

Basic Banking Account

askari bank

26

Basic Banking Account is opened is ASKARI BANK . The minimum amount deposit in this account is very small as compared to other accounts.

Features: Minimum Deposit amount is Rs. 1000  1 s t two transactions is free of cost  Bank can close the Account after six month if balance is zero.

REMITTANCES DEPARTMENT Meaning Of Remittance:“Remittance is transfer of funds from one place to another or from one person to another.” A Remittance is an important service provided by banks to customers as well as non-customers. Since it is not a free service it is a source of income for the bank.

Parties Involved In Remittance Four parties involved in remittance:   

Remitter Remittee Issuing Bank Paying Bank

Remitter:One who initiates, or requests for a remittance. The remitter comes to the issuing or originating branch, asks for a remittance to be made, and deposits the money to be remitted. The bank charges him a commission for this service. He may or may not be the branch’s customer.

Remittee:-

askari bank

27

A remittee is also called the beneficiary, or the payee. The person in whose name the remittance is made. A remittee is also the one who receive the payment.

Issuing Bank:The bank that sends or effects the remittance, through demand drafts, telegraphic transfers, or Mail Transfers.

Paying Bank:Paying Bank also know as the drawee branch. The branch on whom the instrument is drawn. It has to make the payment (usually located in a different city country).

Kinds Of Remittances    

Transfer within the branch Transfer from one branch to another Transfer from one bank to another bank in the same city Transfers from one bank to another bank in two cities.

Instruments Used In Remittances        

Demand Draft (DD) Pay Order (PO) Pay Slip Call Deposit Receipt (CDR) Telegraph Transfer Rupees Traveler Cheque (RTC) Cancellation of PO, DD & CDR Advance Tax against Remittances

CLERING DEPARTMENT Meaning Of Clearing:The word clearing has been derived from the word “clear” and is defined as: “A system by which banks exchange cheques and other negotiable instruments drawn on

askari bank

28

each other within a specific area and thereby secure payment for their clients through the Clearing House at specified time in an efficient way.”

Explanation:By clearing means sometimes the account holder of Askari Bank present a cheques, which is not drawn on Askari Bank but the person, has an account in Askari Bank . In this case bank accepts this cheques in clearing department and later on collets the amount from bank on which cheques is drawn through clearing house. This function is called clearing.

Clearing House:It is a place where representatives of all banks sit together and interchange their claims against each other with the help of controlling staff of NIFT. It is one of the services provided by NIFT to other commercial banks. NIFT acts as a clearinghouse. Different banks are the members of the clearinghouse. A representative of each bank represents his bank in the clearinghouse. Each bank has collected cheques as behalf of their customer but these cheques are not drawn on their own bank so in the clearinghouse, they hand over these cheques to respective banks on which these cheques are drawn. Similarly each bank receives cheques from other banks if any.

Instruments To Be Presented In Clearing  Cheques  Demand Drafts  Pay Orders

askari bank

29

TYPES OF CLEARING There are four types of clearing:1. 2. 3. 4.

Inward Clearing Outward Clearing Intercity Clearing Same Day Clearing

Inward Clearing:Those Cheques and other negotiable instruments which are drawn on Askari Bank, sent by other banks, constitutes the inward clearing of Askari Bank. After having all the stamps and dates of cheques confirmed, the concerned drawer’s accounts are debited in Askari Bank limited.

INWARD RETURN:Return may be of any reason:Presentation Flaw e.g. Clearing stamp not affixed or wrong discharge given by collecting banker.  Defect In The Cheques i.e. Post dated cheques, unauthorized cutting.  Insufficient Askari Bank ance

Accounting Entries OF Inward Clearing Inward Clearing Single Branch:In Case OF Lodgment:Dr. Cr.

Customer Account SBP Account

In Case Of Return:Dr. Cr.

SBP Account Customer Account

askari bank

30

Inward Clearing Main Branch:In Case OF Lodgment:Dr. Cr.

M.O Account SBP Account

In Case Of Return:Dr. Cr.

SBP Account M.O Account

Inward Clearing Centre Branch:In Case OF Lodgment:Dr. Cr.

Customer Account M.O Account

In Case Of Return:Dr. Cr.

M.O Account Customer Account

Outward Clearing:When cheques and other negotiable instruments drawn upon other banks like City Bank, MCB, ABN-AMRO or ABL of the same city (Lahore) are presented in Askari Bank to deposit them in the respective payee’s accounts, these instruments are lodged in outward clearing of Askari Bank.

Outward Return: Cheques return will be treated as inward cheques.  In case the cheques is returned because of wrong presentation e.g. clearing stamp not affixed or wrong discharge given on the cheques etc. it should be relodged in the next day clearing after rectification of the mistake.

askari bank

31

If the cheques is returned for any other reason then  Enter the cheques in cheques return register, mentioning the reason as appearing on the cheques return memo received from the paying bank.  Advice the customer about fate.  Return the cheques to the customer after getting sign on the register.  Collect the cheques return charges as per S.O.C (Schedule of charges).

Accounting Entries Of Outward Clearing Outward Clearing Single Branch:In Case OF Lodgment:Dr. Cr.

SBP Account Customer Account

In Case Of Return:Dr. Cr.

Customer Account SBP Account

Outward Clearing Main Branch:In Case OF Lodgment:Dr. Cr.

SBP Account M.O Account

In Case Of Return:Dr. Cr.

M.O Account SBP Account

Outward Clearing Centre Branch:In Case OF Lodgment:Dr. Cr.

M.O Account Customer Account

askari bank

32

In Case Of Return:Dr. Cr.

Customer Account M.O Account

Inter City Clearing:The cheques that are presented in inter city clearing are of another city and received by air. In this type of clearing the bank confirm at that time that the cheques are clear or not and give to the rider.

Same Day Clearing:The cheques that are presented in same day clearing are the local cheques and these cheques are clear in same day. Basically it is the benefit that are provided to customer.

CASH DEPARTMENT The cash department is the most important department of the bank. It receives cash from customers and then deposits it into the accounts of the customers and maintained their Askari Bank ances. The officers in this department are called teller and there were four tellers at the counter. This department involves in two activates: Deposit cash in customer’s account  Make payments from customer’s account

Deposit Cash In Customer’s Account:When the customer want to deposit amount in his account at opening of account or after that then he has to fill a deposit slip that shows the amount and the account in which the cash will be deposited. Then teller will receive amount and credit the customer’s account that shows increase in customer’s bank account.

Make Payments From Customer’s Account:When the customer draws a cheque on the bank to pay a certain amount then teller will debit the customer’s account that shows reduction in his account Askari Bank ance. There are two main types of cheques that are  Open Cheques  Crossed Cheques

askari bank

33

Open Cheques:Open Cheques are those cheques, which are paid across the counter of the bank. Open cheques may be • •

Bearer Cheques Order Cheques.

Bearer Cheque:If the drawer orders the bank to pay a stated sum of money to the bearer, it is called a bearer cheque. Any person who lawfully possesses a bearer cheque is entitled to receive payment of that cheque.

Order Cheque:The amount of this cheque is payable to the person whose name is written on the face of the cheque. The amount is paid at counter after identification of that person.

Crossed Cheque:The amount of this cheque is not paid at counter. The amount of this cheque is transferred to the person’s account whose name is specified on the cheque. Two parallel transverse lines are drawn across the face of the cheque.

Kinds Of Crossing:Legally there are two kinds of crossing  General Crossing  Special Crossing

General Crossing:In case of General Crossing the payment can only be deposited into the payee’s account only.

Special Crossing:In case of Special Crossing the payment can only be made to bank named therein the cheque.

askari bank

34

CHEQUE ENCASHMENT PROCEDURE Cheque Encashment are made in four steps, these are:-

   

Receiving Of Cheques Verification Of Signature Computer Terminal Process Payment Of Cash

Receiving Of Cheques:The cash is paid against the cheque of the client. The following points are kept in mind while receiving the cheque from the client.    

Cheque is drawn on ASKARI BANK Cheque is not post dated. Amount in words and figure are same. It should be a bearer cheque so the word bearer should not cross.

Verification Of Signature:After receiving the cheque the cheque the officer verify the signature of the account holder and the signature on the cheque. If the signature is not same it is returned back otherwise forward to computer terminal.

Computer Terminal Process:The cheque is received in computer terminal, where the computer operator checks the Askari Bank ance of the account holder. The operator also sees the stop payment instructions are received from account holder or not. After considering these points computer operator post the cheque in account holder ledger and returned back to the officer.

Payment Of Cash:After posting the cheque the officer cancelled the cheque and returned back to cashier. The cashier enters the cheque in cash paid registered and pay against the second signature of receiver on the back of the cheque. If the payment is of Rs. 50000 the cashier can make it on its own. If the amount is greater than Rs. 50000 to Rs. 100,000 the cashier and cash

35

askari bank

deposit Incharge will verify the check and will sing it. Then the payment will be made. But, if the amount is greater than Rs. 100000 to Rs. 1000,000 the manager operation will also verify the check and sign it so that the payment can be made. If the amount is greater than Rs. 1000,000 the Branch Manager will also verify the check and sign it. Otherwise the payment will not be made.

CODE OF ETHICS AND CONDUCT Askari Bank seeks to maintain high standards of service and ethics enabling to be perceived as impartial, ethical and independent. In addition to the general guidelines, the following are the salient features of the Banks code of ethics and conduct. •

Presence

of

a

corporate

culture

that

seeks

to

create

an

environment where all persons are treated equitably and with respect. •

Employees must carry out their responsibilities in a professional manner at all times. They must act in a prudent manner and must avoid situations that could reflect unfavorably on themselves, the Bank or its customers.

36

askari bank •

Employees must commit to the continued development of the service culture in which the Bank consistently seeks to exceed customers’

expectations.

Fairness,

Truthfulness

and

Transparency govern our customer relationships in determining the transactional terms, conditions, rights and obligations. •

Employees must safeguard confidential information which may come

to

their

responsibilities.

possession Respect

for

during

the

customers

discharge confidential

of

their

matters,

merits the same care as does the protection of the Bank’s own affairs or other interests. •

Employees must ensure that know your customer principals are adhered by obtaining sufficient information about the customers to reasonably satisfy ourselves as to their reputation, standing and the nature of their business activities.

•

Employees must avoid circumstances in which their personal interest conflicts, or may appear to conflict, with the interest of the Bank or its customers. Employees must never use their position in the Bank to obtain an advantage or gain.

•

Employees must not accept gifts, business entertainment or other benefits from a customer or a supplier / vender, which appear pr may appear to compromise commercial or business relationship.

•

Employees must remain Chairman alert and vigilant with respect frauds, thefts or illegal activities committed within the Bank premises.

ORGANIZATIONAL Board of Directors CHART Chief Executive Officer Executive Committee Executive Incharges

Area Manager North

Area Manager South

37

askari bank

HIERARCHY

CORPORATE INFORMATION

Lt. Gen. Nadeem Taj

Chairman

Lt. Gen (R) Imtiaz Hussain

Chairman Executive Committee

Maj Gen (R) Saeed Ahmed Khan

Director

Mr. Zafar Alam Khan Sumbal

Director

Dr. Bashir Ahmad Khan

Director

Mr. Shahid Mahmud

Director

Mr. Muhammad Riyazul Haque

Director

Mr. Ali Noormahomed Rattansey

Director

Mr. Wazir Ali Khoja ( Nominee NIT )

Director

Mr. Muhammad Rafiquddin Mehkari

President & Chief Executive

Mr. M. A. Ghazali Marghoob

Company Secretary

AUDIT COMMITTEE

Dr. Bashir Ahmad Khan

Chairman

Mr. Ali Noormahomed Rattansey

Member

38

askari bank AUDITORS KPMG Taseer Hadi & Co.

Chartered Accountants

LEGAL ADVISORS

Rizvi, Isa, Afridi & Angell

REGISTRAR & SHARE TRANSFER OFFICE

M/s THK Associates (Private) Limited, Ground Floor, State Life Building # 3, Dr. Ziauddin Ahmad Road, Karachi – 75530 P.O.Box No. 8533, Karachi. Tel :

(021) 5689021, 5686658, 5685681

Fax:

(021) 5655595

UAN:

111-000-322

REGISTERED OFFICE /HEAD OFFICE

AWT Plaza, The Mall, P.O.Box 1084, Rawalpindi. Tel :

(051) 9063000

Fax:

(051) 9272455

askari bank

39

EXECUTIVE PROFILES • • • • • • • • • • • • •

Mr. Shaharyar Ahmed- President & Chief Executive Mr. Agha Ali Imam- Senior Executive Vice President M.R Mehkari - Senior Executive Vice President Mr. Muhammad Arif Mian, Senior Executive Vice President Suhail Ahmad Rizvi- Executive Vice President Mr. Nazimuddin A. Chaturbhai, Senior Executive Vice President Mr. Ejaz Ahmed Khan, Senior Executive Vice President Malik Asad Ali Noon, Executive Vice President Mr. Tahir Aziz, Executive Vice President Mr. Israr Ahmed, Executive Vice President Mr. Moghis Rafiuddin Bokhari, Executive Vice President Mr. Nauman Bashir Khan, Senior Vice President Mr. Muhammad Ahmed Khan-Senior Vice President

FIELD OF ACTIVITIES 6. Retail Banking 7. Consumer Banking 8. Electronic Banking 9. Correspondent Banking 10. Treasury And Investment

1- RETAIL BANKING I. II. III. IV. V. VI.

Account Opening Department Remittance Department Clearing Department Cash Department Accounts Department Foreign Exchange Department

ACCOUNT OPENING DEPARTMENT This department is responsible for the opening and closing of accounts. In consideration of Askari Bank , opening and/or continuing to maintain

askari bank

40

any account, the Account Holder/Depositor or Investor would be bound by the terms and conditions written on the account opening form. The first part establishes the preference regarding the type of account to be maintained. The various choices offered in this regard are:     

Current Account Saving/ PLS Account Royal Profit Account Term Deposit Account Basic Banking Account

CURRENT ACCOUNT The current account is the most common account and the most preferred amongst business concerns. There is no restriction on the amount of withdrawal. Current account enables the client to do cash transactions in a more efficient manner.

Features: Current Accounts can be opened in the ASKARI BANK with the sum not less than Rs.5,000/ No Profit  No deduction of Zakat  Account close charges Rs.150  Service charges for maintaining minimum balance Rs.100  Online Charges Rs.100

Saving / PLS Account In Pakistan (PLS) saving account was introduced in January 1982. Individuals who wish to invest their money in order to get profit maintain this account.

Features: The minimum balance requirement for opening the account is Rs.10,000.  There can be profit or loss on the investment of the Customer’s funds deposited with the bank and this amount shall be acceptable to the Customer. The profit is paid half yearly.  Deduction of Zakat  With holding tax on profit @ 10%  No Service Charges to close the account  Service Charges for maintaining minimum balance Rs.50  Online Charges Rs.150

askari bank

41

Term Deposit Account A term deposit is a deposit that is made of a certain period of time. At the end of specific period the customer is allowed to with draw the principal amount.

Features: Fixed Profit  The longer the period for which the amount is kept higher is rate of interest.  Term Deposit usually for the period of three months, six months, One year, and five years.  Deduction of Zakat and withholding Tax @ 10%.

Basic Banking Account Basic Banking Account is opened is ASKARI BANK . The minimum amount deposit in this account is very small as compared to other accounts.

Features: Minimum Deposit amount is Rs. 1000  1 s t two transactions is free of cost  Bank can close the Account after six month if balance is zero.

REMITTANCES DEPARTMENT Meaning Of Remittance:“Remittance is transfer of funds from one place to another or from one person to another.” A Remittance is an important service provided by banks to customers as well as non-customers. Since it is not a free service it is a source of income for the bank.

Parties Involved In Remittance

askari bank

42

Four parties involved in remittance:   

Remitter Remittee Issuing Bank Paying Bank

Remitter:One who initiates, or requests for a remittance. The remitter comes to the issuing or originating branch, asks for a remittance to be made, and deposits the money to be remitted. The bank charges him a commission for this service. He may or may not be the branch’s customer.

Remittee:A remittee is also called the beneficiary, or the payee. The person in whose name the remittance is made. A remittee is also the one who receive the payment.

Issuing Bank:The bank that sends or effects the remittance, through demand drafts, telegraphic transfers, or Mail Transfers.

Paying Bank:Paying Bank also know as the drawee branch. The branch on whom the instrument is drawn. It has to make the payment (usually located in a different city country).

Kinds Of Remittances    

Transfer within the branch Transfer from one branch to another Transfer from one bank to another bank in the same city Transfers from one bank to another bank in two cities.

Instruments Used In Remittances  Demand Draft (DD)

askari bank       

43

Pay Order (PO) Pay Slip Call Deposit Receipt (CDR) Telegraph Transfer Rupees Traveler Cheque (RTC) Cancellation of PO, DD & CDR Advance Tax against Remittances

CLERING DEPARTMENT Meaning Of Clearing:The word clearing has been derived from the word “clear” and is defined as: “A system by which banks exchange cheques and other negotiable instruments drawn on each other within a specific area and thereby secure payment for their clients through the Clearing House at specified time in an efficient way.”

Explanation:By clearing means sometimes the account holder of Askari Bank present a cheques, which is not drawn on Askari Bank but the person, has an account in Askari Bank . In this case bank accepts this cheques in clearing department and later on collets the amount from bank on which cheques is drawn through clearing house. This function is called clearing.

Clearing House:It is a place where representatives of all banks sit together and interchange their claims against each other with the help of controlling staff of NIFT. It is one of the services provided by NIFT to other commercial banks. NIFT acts as a clearinghouse. Different banks are the members of the clearinghouse. A representative of each bank represents his bank in the clearinghouse. Each bank has collected cheques as behalf of their customer but these cheques are not drawn on their own bank so in the clearinghouse, they hand over these cheques to respective banks on which these cheques

askari bank

44

are drawn. Similarly each bank receives cheques from other banks if any.

Instruments To Be Presented In Clearing  Cheques  Demand Drafts  Pay Orders

TYPES OF CLEARING There are four types of clearing:5. 6. 7. 8.

Inward Clearing Outward Clearing Intercity Clearing Same Day Clearing

Inward Clearing:Those Cheques and other negotiable instruments which are drawn on Askari Bank, sent by other banks, constitutes the inward clearing of Askari Bank. After having all the stamps and dates of cheques confirmed, the concerned drawer’s accounts are debited in Askari Bank limited.

INWARD RETURN:Return may be of any reason:Presentation Flaw e.g. Clearing stamp not affixed or wrong discharge given by collecting banker.  Defect In The Cheques i.e. Post dated cheques, unauthorized cutting.  Insufficient Askari Bank ance

Accounting Entries OF Inward Clearing Inward Clearing Single Branch:In Case OF Lodgment:Dr.

Customer Account

askari bank Cr.

45

SBP Account

In Case Of Return:Dr. Cr.

SBP Account Customer Account

Inward Clearing Main Branch:In Case OF Lodgment:Dr. Cr.

M.O Account SBP Account

In Case Of Return:Dr. Cr.

SBP Account M.O Account

Inward Clearing Centre Branch:In Case OF Lodgment:Dr. Cr.

Customer Account M.O Account

In Case Of Return:Dr. Cr.

M.O Account Customer Account

Outward Clearing:When cheques and other negotiable instruments drawn upon other banks like City Bank, MCB, ABN-AMRO or ABL of the same city (Lahore) are presented in Askari Bank to deposit them in the respective payee’s accounts, these instruments are lodged in outward clearing of Askari Bank.

askari bank

46

Outward Return: Cheques return will be treated as inward cheques.  In case the cheques is returned because of wrong presentation e.g. clearing stamp not affixed or wrong discharge given on the cheques etc. it should be relodged in the next day clearing after rectification of the mistake.

If the cheques is returned for any other reason then  Enter the cheques in cheques return register, mentioning the reason as appearing on the cheques return memo received from the paying bank.  Advice the customer about fate.  Return the cheques to the customer after getting sign on the register.  Collect the cheques return charges as per S.O.C (Schedule of charges).

Accounting Entries Of Outward Clearing Outward Clearing Single Branch:In Case OF Lodgment:Dr. Cr.

SBP Account Customer Account

In Case Of Return:Dr. Cr.

Customer Account SBP Account

Outward Clearing Main Branch:In Case OF Lodgment:Dr. Cr.

SBP Account M.O Account

In Case Of Return:Dr.

M.O Account

askari bank Cr.

47

SBP Account

Outward Clearing Centre Branch:In Case OF Lodgment:Dr. Cr.

M.O Account Customer Account

In Case Of Return:Dr. Cr.

Customer Account M.O Account

Inter City Clearing:The cheques that are presented in inter city clearing are of another city and received by air. In this type of clearing the bank confirm at that time that the cheques are clear or not and give to the rider.

Same Day Clearing:The cheques that are presented in same day clearing are the local cheques and these cheques are clear in same day. Basically it is the benefit that are provided to customer.

CASH DEPARTMENT The cash department is the most important department of the bank. It receives cash from customers and then deposits it into the accounts of the customers and maintained their Askari Bank ances. The officers in this department are called teller and there were four tellers at the counter. This department involves in two activates: Deposit cash in customer’s account  Make payments from customer’s account

Deposit Cash In Customer’s Account:When the customer want to deposit amount in his account at opening of account or after that then he has to fill a deposit slip that shows the amount and the account in which the cash will be deposited. Then teller will receive amount and credit the customer’s account that shows increase in customer’s bank account.

Make Payments From Customer’s Account:-

askari bank

48

When the customer draws a cheque on the bank to pay a certain amount then teller will debit the customer’s account that shows reduction in his account Askari Bank ance. There are two main types of cheques that are  Open Cheques  Crossed Cheques

Open Cheques:Open Cheques are those cheques, which are paid across the counter of the bank. Open cheques may be • •

Bearer Cheques Order Cheques.

Bearer Cheque:If the drawer orders the bank to pay a stated sum of money to the bearer, it is called a bearer cheque. Any person who lawfully possesses a bearer cheque is entitled to receive payment of that cheque.

Order Cheque:The amount of this cheque is payable to the person whose name is written on the face of the cheque. The amount is paid at counter after identification of that person.

Crossed Cheque:The amount of this cheque is not paid at counter. The amount of this cheque is transferred to the person’s account whose name is specified on the cheque. Two parallel transverse lines are drawn across the face of the cheque.

Kinds Of Crossing:Legally there are two kinds of crossing  General Crossing  Special Crossing

General Crossing:In case of General Crossing the payment can only be deposited into the payee’s account only.

Special Crossing:-

askari bank

49

In case of Special Crossing the payment can only be made to bank named therein the cheque.

CHEQUE ENCASHMENT PROCEDURE Cheque Encashment are made in four steps, these are:-

   

Receiving Of Cheques Verification Of Signature Computer Terminal Process Payment Of Cash

Receiving Of Cheques:The cash is paid against the cheque of the client. The following points are kept in mind while receiving the cheque from the client.    

Cheque is drawn on ASKARI BANK Cheque is not post dated. Amount in words and figure are same. It should be a bearer cheque so the word bearer should not cross.

Verification Of Signature:After receiving the cheque the cheque the officer verify the signature of the account holder and the signature on the cheque. If the signature is not same it is returned back otherwise forward to computer terminal.

Computer Terminal Process:The cheque is received in computer terminal, where the computer operator checks the Askari Bank ance of the account holder. The operator also sees the stop payment instructions are received from account holder or not. After considering these points computer operator post the cheque in account holder ledger and returned back to the officer.

Payment Of Cash:After posting the cheque the officer cancelled the cheque and returned back to cashier. The cashier enters the cheque in cash paid registered and pay against the second signature of receiver on the back of the cheque. If the payment is of Rs. 50000 the cashier can make it on its own. If the amount is greater than Rs. 50000 to Rs. 100,000 the cashier and cash

askari bank

50

deposit Incharge will verify the check and will sing it. Then the payment will be made. But, if the amount is greater than Rs. 100000 to Rs. 1000,000 the manager operation will also verify the check and sign it so that the payment can be made. If the amount is greater than Rs. 1000,000 the Branch Manager will also verify the check and sign it. Otherwise the payment will not be made.

ACCOUNTS DEPARTMENT This department is responsible to keep the record of each and every transaction and prepare reports about the amount of deposits and advances and sent to Head office or State Bank of Pakistan on monthly, quarterly and yearly basis.

Activities The accounts department deals with various routine activities for the bank. The main activities performed by it are:    

Budgeting Vouchers batch Reporting Maintenance & depreciation of fixed assets Miscellaneous functions

Budgeting The department of a bank, for a year makes budget of every branch. Fiscal year of bank starts from january 01 and ends on december 31. the accounts department starts preparing budget from october for the next year.

voucher batch The voucher batch mean the all kind of vouchers will be sorted as batch wise for example current a/c voucher makes sprit batch saving a/c batch sprit and in the same way third batch Mise a/c and general ledger a/c voucher makes sprit batches maintained date wise for record of the bank.

Reporting The accounts department, in the form of reports, clubs the details of various departments together. Each and every minute detail is provided in weekly, monthly and annual reports. The reports are submitted to head office, SBP and to the government.

askari bank

51

The accounts department prepares many reports, of which the most common are:• Statement Of Affairs • Income & Expenditure • Business Report • SBP Report • Outstand Receipt Report • Currency Wise Deposits Report

Maintaining of Fixed Assets & their Depreciation Accounts department maintains the record of all the assets and charges depreciation on them. The bank normally uses the straight-line method to compute the depreciation. It is calculated on monthly basis and charged yearly. Bank not only depreciates the existing assets but also the assets but also the assets transferred in and transferred out.

Miscellaneous Functions The accounts department also performs some other miscellaneous functions like i. ii. iii. iv.

Closing Entries Daily activity checking Report Generation Minor Expense Recording

Closing Entries:Accounts department also passes the closing entries on monthly, 6 monthly and yearly bases to calculate the profit and analyze the overall performance for a certain period.

Daily Activity Checking:All the operations performed in various departments of Askari Bank Urdu Bazaar Branch Lahore are computerized. The functions are performed through the customized software. In order to facilitate double-checking of all the transactions done, every concerned official also passes vouchers and cheques manually. At the day end all the vouchers passed by various officers working in different departments are given to Accounts Department. Furthermore the I.T. department also prints a very bulky report of all the transactions / entries which have been fed into the computer system of the branch that day. When both of these things are at the desk of concerned officer, he performs

askari bank

52

the job of tallying the daily activity report with all the corresponding vouchers and cheques, in order to track down any discrepancy.

Report Generation:The reports generated by the accounts department on a daily, weekly, monthly, bi-yearly and yearly are written in a proper format. It is neither necessary nor possible to get acquainted by all of these reports in a short period of time. Some of the common reports are:-

Daily Advance and Deposit Position: 

Daily Exchange Position Daily MIS information

Closing Reports:    

Monthly Monthly Monthly Monthly Monthly

Assets & Liabilities Budget Review Report Monitory Statement Performance Review Report fixed investment

From these statements, five reports carry extreme importance. The five reports are:    

Daily position of advances and deposits Statement of affairs Daily exchange position report Fixed assets statement Monthly review of performance.

Minor Expense Recording:The account department of ASKARI BANK Urdu Bazaar Branch has to record even the minor expenses of the branch like tea for the staff, stationery for the branch.

FOREIGN EXCHANGE DEPARTMENT Foreign Exchange involves the import and export activities. This department provides protection to the rights of importer and exporter. The function of this department is to serve as a bridge between the importer and exporter in order to settle a transaction.

53

askari bank Foreign Exchange Department handles two activities:1. Import 2. Export

Import Import Department of ASKARI BANK merchandise. Import can be defined as:

deals

with

the

import

of

“The bringing of commodities into Pakistan from outside by sea, land or air.”

Requirement For The Importer:These requirement / document must be fulfilled from importer before doing the import: NTN  Sale Registration Certificate  Membership from Chamber Of Commerce

Methods Of Doing Import    

Letter of Credit Contract Advance Payment Open Account

Letter Of Credit A Letter Of Credit is a financial instrument issued by a bank on behalf of the registered customers It gives surety to the Exporter that his amount is safe. “The letter of credit is a written instrument issued by the buyer’s bank authorizing the seller to draw in accordance with certain terms and conditions.”

Parties Involved In A Letter Of Credit:There are four basic parties involved 1. Importer

askari bank

54

2. Issuing Bank 3. Exporter (Beneficiary) 4. Advising Bank

Contract These are the contracts on which there is no liability of the bank. Bank charge commission against this service.

Main Reason Of Bank Involvement:Bank involve in contract for that purpose:The record of this foreign exchange entered in State Bank Of Pakistan (SBP) and this record shows that how many Foreign Exchange go outside Pakistan that is helpful to count the total imports of Pakistan.

Advance Payment In mean some part of payment is made before shipment and remaining is made after shipment. Advance Payment is through TT (Telegraphic Transfer). But State Bank Of Pakistan allows limit of Rs.10, 000 it means that Advance Payment does not exceeds Rs.10, 000. In case of Advance Payment the importer show the document to Askari Bank after four months as a proof of import.

Open Account Open Account is reciprocal of Advance Payment. In this case importer first receive the shipment and then make the payment. And there is no limit involved in open Account. Importer makes payment of any amount. In open Account there is no as such restrictions from State Bank Of Pakistan (SBP) importer simply show the document and make payment after one year means no restriction of time is involved. In all these four methods Letter of Credit is mostly used in Askari Bank Urdu Bazaar Branch Lahore.

Export

askari bank

55

Exports are major sources of earning foreign exchange and play an important role in the economic development of the country. It helps to utilize excess resources of the country. “Exports mean selling goods to another country.” Exports of all eligible commodities through authorized banking channels are admissible under exchange control regulation.

Requirement For The Exporter:These requirement / document must be fulfilled from exporter before doing the export: NTN  Sale Registration Certificate  Membership from Chamber Of Commerce As well as the market stability, reputation, financial position of the exporter is first of all checked.

Documents To Be Attached For Export  Commercial Invoice  Bill of lading  Packing list (a) Total quantity (b) Net weight/carton (c) Gross weight/carton (d) Total net weight/carton (e) Total gross weight  Bill of exchange (original or draft)  E-form: Initial document on which total export proceeding is based. In this form, all the conditions are given, which are necessary for exports.  Letter of credit: It is written agreement between importer and exporter.  Certificate of Origin (Form –A)  Insurance (if any)

2. Consumer Banking     

Credit Cards Hilal Card (Debit Card) Auto Loan Home Loan Consumer Durables

56

askari bank  RTC’s  Money Gram  Agriculture Finance

Credit Cards Askari Bank Credit Card master card is accepted at nearly 30 million locations in more than 150 countries around the globe and at over 10,000 establishments in Pakistan. Once

the

application

form

and

required

documents

have

been

processed and approved, it takes 2-3 weeks time period to reach you. Its exceptional features are as follows:

             

No Joining Fee No Annual / Renewal Fee Low Service Charges Askari Bank once Transfer Facility Global Askari Bank Acceptability Revolving Credit Step-By-Step (SBS) Monthly Installment Plan Free Supplementary Cards 24-Hour Phone Banking Service All Billing in Pak Rupees Comprehensive Travel Protection Monthly Statement of Account Exciting Rewards Special Discounts and Promotions at various outlets

DOCUMENTS REQUIRED For Salaried person: Copy of NIC  Current Salary Slip / Salary Letter / Proof of BPS (For Govt. Employees) / Proof of rank (For Armed Forces Personnel).  Computerized Personal bank statement (on ban letterhead in original) for last six months

Additional Documents for Classic Blue Applicants: Proof of minimum six-month experience  Copy of Graduation Certificate or equivalent.

57

askari bank For Self Employed:-

 Copy of NIC  Computerized personal bank statement (on bank letter head in original) for last six month.

Additional requirements: Partnership deed & personal account statements of the partners (if any) for last six month.  Bank letter / certificate confirming Proprietorship.  Memorandum / Articles of Association /Form A.  Financial Statements  Recognized professional degree / membership certificate to professional association.

MANAGEMENT OF THE BRANCH Staff of the branch consists of 30 members: DESIGNATION Branch Manager Operation Manager Credit Manager Foreign Trade Manager Officer Range I Officer Range II Officer Range III Cashier System Administrator Telephone Operator Gun Man Peons Driver

NO OF EMPLOYEES 01 01 01 01 02 05 05 04 01 01 04 03 01

Learning From A/C Opening Department This Branch is having about 7000 accounts but there was only one officer, Mr. Muhammad Shahid to handle this tough work. He has to deal different people. My experience in this department was really very good. I learnt how to handle different customers, how to fill Account Opening Form, what are the required documents that should be with you in order to open an account, what types of account Askari Bank is offering to the

58

askari bank

customers, what are the facilities that an account Holder can enjoy and what are the profit rates Askari Bank is giving to its customers. I have learnt the procedure that an Account Opening Officer has to follow in order to open and maintain an Account. Procedure of Opening an Account

The Account Opening Form:When a client comes to the bank, and makes a request for opening of an A/C. The officer says that first fill up a prescribed application form.

Completion of The Form:The name, occupation, and complete address of the person opening the account are written in the columns that are provided in the form. Signatures are obtained from the customer where it is required. These signatures should be usual signatures and he would operate the account with them.

Introduction:The introduction of a current account holder is accepted for the opening of either a current account or a saving account. The introducer should be Account Holder. The signature of the account-holder introducing the account is obtained at the place provided for in the account opening form. Specimen Form:-

Signature

Card,

Cheques

Book

Requisition,

Online

The signatures of the client are obtained on a specimen Signature card chequebook requisition and online form. These specimen signature cards are obtained in duplicate with two signatures on each card from the customer. Every time a Cheque is received for a payment from the client, the signature on the Cheque are verified by comparing them with the Specimen Signature Card.

Signature Difference Form:The signature of the client are obtained on a signature difference form if his / her signature differ from the computerized National Identity Card.

Vernacular Form:-

askari bank

59

The signature of the customer is also obtain on the vernacular form if he / she signs in a language other than English.

Account Number:When all the formalities are completed then the final approval of account has to be taken from the Branch Manager. After obtaining approval of the branch manager an account number is allotted to the customer all the information is entered into the computer. Then that account number is write on the Cheque Book, Specimen Signature cards and account opening form.

Issuance Of A Cheque book:After opening an A/C with the bank, the A/C holder receive a letter of thanks from askari bank then after receiving this letter client come to bank and makes a request in the name of bank for the issuance of a Cheque book. The A/C holder mentions title of A/C, A/C number, sign it properly. Normally ASKARI BANK issues a Cheque book having 25 leaves for Saving Account and 50 leaves Cheque Book to Current Account Holder. Every Cheque book also contains one leaf that is used for another issue of a Cheque book.

Entry Of A Cheque book:Before issuance of a Cheque book, the employee performs certain functions. They include: • Stamping requisition slip that is in cheque book. • Enters it in the Cheque book issue register. • Check whether or not a senior officer has verified the signatures, if not then first gets them verified. After entry in the manual register, the employee issues the Cheque book to the A/C holder with his/her signature on the register.

TYPES OF ACCOUNT Accounts Of General Customers  Minor Account  Illiterate Person Account  Joint Account

Accounts Of Special Customers

askari bank       

60

Individual Account Proprietorship Account Partnership Account Limited Company’s Account Account of Club Societies and Association Agents Account Trust Account

MINOR ACCOUNT Account Opening Procedure:The natural guardian who signs both Account Opening Form and Specimen Signature Card can open account in the name of minor.

Title Of Account:The title of account should clearly indicate both the names of minor as well as guardian in the following manner:e.g. Amir Rafique ( minor) Muhammad Rafique (Guardian)

Special Instructions:The guardian will continue to operate the account even if minor attains the age of majority.

Documents: Computerized National Identity Card of Guardian  Form “B” of minor  In case guardian is appointed by the court of law then attested copy of guardianship certificate be obtained and placed on record.

Illiterate Person Account Before opening such account the illiterate person should be informed that he / she cannot issue cheques in favour of any other person.

Account Opening Procedure:Title Of Account:Name of account holder should be written in block form.

askari bank

61

Special Instructions:Personal Withdrawal

Documents: Copy of Computerized National Identity Card  Two attested photographs to be obtained for pasting on AOF and other on Specimen Signature Card.  Thumb Impressions Male -------- Left Hand Thumb Impression Female ------- Right Hand Thumb Impression

Joint Account These are the account of two or more persons who are neither partners nor trustees.

Account Opening Procedure:Title Of Account:Title of account holder should mentioned the names of all the joint account holders.

Special Instruction:At the time of opening the account clear and specific instructions should be obtained regarding operation of the account and payment of the Askari Bank ance at the death of one or more joint account holders in the following manner:• The account shall be operate by any joint account holders singly. • By either or survivor singly • By any two or more joint account holders or by any two or more survivors jointly. • By all the joint account holders jointly • By all the survivors jointly. These instructions as far as possible should be obtained in handwriting of the parties concerned, under the signature of all the joint account holders.

Documents: Computerized national Identity Card of all the joint account holders.

askari bank

62

Mode Of Signature: All joint account holders are required to sign as applicant and in the column of special instructions.  Specimen Signature of only those joint account holders are required who are authorized to operate the account.

Individual Account When a single man or woman opens an account in his or her own name and has the right to operate, it is called individual A/C.

ACCOUNT OPENING PROCEDURE:Title Of Account:Title of Account should mentioned the name of the person who operate the account.

Special Instructions:At the time of opening the account clear and specific instructions should be obtained regarding the nominee of the account holder means after the death of the account holder who will operate the account.

Documents: Computerized national Identity Card.  Proof of Income if he / she is a salaried person then the pay slip or salary certificate of that person.

Proprietorship Account When the owner of the firm operating singly, open an account in his firm name.

ACCOUNT OPENING PROCEDURE:Title Of Account:Title of account must be in the name of the proprietorship concern.

Special Instructions:-

askari bank In case of proprietorship concern, the special the style of the account and the name of the the account as sole proprietor. For example, if in the name of “Islamabad Cloth Store”, the proprietor should declare as such.

63 instruction should cover person who will operate the account to opened is person who is the sole

Documents:Computerized National Identity Card (CNIC) of proprietor. Declaration for proprietorship concern. Proprietorship Stamp Letter of request to open the account on the letterhead of proprietorship.  Third party Mandate, in case any other person has been authorized by the proprietor to operate the account.  National Tax Number (NTN) but it is optional.    

Partnership Account “Partnership” is a relationship between persons who have agreed to share profits of a business carried on by all or any of them acting for all.

Account Opening Procedure:Title Of Account:Title of account must be in the name of the firm as declared by the partners.

Operational Instructions: Operations on the account must be allowed strictly in accordance with the instructions given in partnership mandate and Declaration (Part III) in terms of section 25 of Partnership Act 1932.  According to Partnership deed, if given.

Documents: Copy of Computerized National Identity Card of all the partners.  Copy of registration Certificate (if a registered firm)  Letter of request to open the account on the letterhead of partnership.  Partnership Stamp  Partnership Deed  Third Party Mandate, if third party is authorized to operate the account.

askari bank

64

 NTN (optional)

Limited Companies Account Section 2 of the Companies Act, 1913, defines companies as:“An association of individuals for the purpose of profit, possessing a common capital contributed by the members constituting it, such capital being commonly divided into shares, of which each possess one or more and which are transferable by the owners.”

Account Opening Procedure:Title Of Account:Title of account should be exactly in the same name and style as mentioned on the memorandum and article of association.

Special Instructions:All the special instructions should be given to the bank in the form of Resolution of Board of Director.

Documents: Computerized National Identity Card (CNIC) all the Director attested by company CEO.  Resolution of Board of Director passed under Company’s seal to open account.  Memorandum and Article of Association  Certificate of Incorporation Form 29 (B) (Lasted Copy). Company secretary will certify all these copies.  List of Directors and authorized signatories.  Certificate of Commencement of Business (for Public limited company’s only).

Trust Account According to section 3 of Trust Act, 1882: “A trust is an obligation annexed to the ownership of property and arising out of a

askari bank

65

confidence proposed in and accepted by him for the benefit of another, or of another or owner.”

Account Opening Procedure:Branches are allowed to open the Trust Account subject to the prior approval of Area Manager, after scrutiny of the legal documents by the legal advisor.

Title Of Account:The account should be opened in the name of the trust. However, if the account is opened in the name of the trustees, the account should not be treated as a joint account, rather it should be treated as a trust account.

Special Instructions:The Banker should examine the trust deed very carefully. Particular attention should be paid to the borrowing powers, status of account in case of death of any trustee or signatory, and provisions for the appointment of new trustees.

Documents: Attested photocopy of Computerized National Identity Cards (CNIC) of all the trustees.  Attested copy of Certificate of Registration.  Certified copy of Instrument of Trust / Trust Deed

Mode of Signature:All the trustee are required to sign the account opening form, Specimen Signature Card, and cheque book requisition slip in their official capacity.

Clubs, Societies and Associations Account These are non- trading / non- profit organization and are formed for the promotion of culture, education, recreational activities and charitable purpose etc.

ACCOUNT OPENING PROCEDURE:Title Of Account:Account must be opened in the name of organization in the following manner:e.g. Islamabad Cricket Association

Operational Instructions:-

66

askari bank

 All the parties must be in accordance with the clauses of the resolution.  In case of death of office bearer, account should be blocked until new resolution is received.

Documents:    

Copy of bye- laws / regulations. List of members of managing / executive Committee. Copy of certificate of Registration (if registered) Copies of CNICs of the members of Executive Committee. List of names of officials authorized to sign on behalf of the organization along with the Specimen Signature under the signature of the Secretary of the club / society.

Agent Account Account Opening Procedure:Title Of Account:Account must be opened in the name of agent.

Special Instructions: Manager should ensure compliance of contract between principle and agent.  Agent cannot delegate powers to third party.  Transfer between principle and agent account should be in accordance to agreement.  In case of death / insolvency / insanity of principle agency transactions are automatically terminated.

Documents: Attested photocopy of Computerized (CNIC) of the agent.  Certified copy of Power of Attorney.

National

Identity

Card

Learning in Remittance and Clearing Department There were two officers in this department one was Miss. Hina Naeem Khan and the other was Mr. Nadeem Zahid. Miss Hina Naeem Khan was handling inward clearing and Outward Clearing. While issuance of other negotiable instruments like Pay

askari bank

67

Order, Demand Draft, Pay Slip etc, were handled by Mr. Nadeem Zahid. In these departments I saw the clearing process and negotiable instrument that transfer the money.

Clearing Process Stamps Put On the Cheques:When the cheques are presented in MCB Bank Branch to be deposited in their respective payee’s accounts, different stamps are put on cheques before their lodgment in outward clearing.

Crossing the cheques:Crossing means two parallel lines, drawn across the face of the cheques with or without words written in between them. Crossing may be general or special. In clearing, cheques are crossed specially. Cheques are stamped with bank’s name between two parallel lines to constitute special crossing. After the cheques have been crossed specially, the holder cannot receive payment except through the banker named on the cheques crossing saves the instrument to go it in illegal hands. If, crossed cheques is lost or stolen, there is no risk involved. So it is an effective means of minimizing the risk of loss.

Clearing Stamp:After the cheques have been crossed specially, clearing stamp is put on the cheques and other instruments, with the next date, so these cheques would have to be presented in their concerned drawee banks on the subsequent day.

Endorsement Stamp:The word endorsement means anything written or printed on the back of an instrument. So endorsement stamp has to put with words “Payee’s account Credited in Askari Bank ,sargiodha”.

National Institutional Facilitation Authority:After putting these three stamps on cheques & other negotiable instruments, they are sent to NIFT. NIFT after segregating the cheques of different banks delivers them to their concerned banks.

Send Report To The Bank:After delivering the cheques to different banks NIFT send report to ASKARI BANK sargodha, then the bank’s staff tally the amount of that report for its own record.

Delivered Cheques to Respective Banks:-

askari bank

68

Next morning, these cheques are delivered to the respective banks between 9:00 to 9:30AM. In the same manner, other banks present their clearing drawn on Askari bank. Total number of cheques and their amount delivered to other banks and received from them are written on the Clearing House schedule branch for their payment. After proper scrutiny of cheques, verification of signatures and confirmation of balance in the account, the Officer Clearing Department Debit the customer Account. If any cheque is not passed due to insufficient balance or any other reason, Officer Cash Department returns the same cheque by attaching a cheque return memo containing reason for return.

Credit The Customer Account:If the cheques are clear then the ASKARI BANK credit the customer Account. If the bank receives the outward return due to any reason then this cheque is entered into the cheque returned register and bank charges are deducted according to the schedule of charges. Then send the outward and return inward as IBDA (Inter Branch Debit Advise) to Main Branch LDA Plaza. And LDA Plaza sends outward return and inward to ASKARI BANK Urdu Bazaar Branch, Lahore.

PROCEDURE OF SETTLEMENT Assume that ASKARI BANK got the cheques which are drawn on HBL, bank alfalah , and MCB for amount Rs.50, 000/-, Rs.30,000/-, Rs.15,000/- respectively, its total being Rs.95,000/-. It means that this amount is to be credited to ASKARI BANK account with NIFT. On the other hand the cheques drawn on ASKARI BANK are from HBL, ASKARI BANK and MCB of Rs.15,000/- Rs.75,000/-, and Rs.30,000/respectively, its total being Rs.120,000/-. It means that this amount is to be debited from ASKARI BANK account . The difference between Rs.95,000/- credit and Rs.120,000/- debit is Rs.25,000/- debit, which means the house is against ASKARI BANK for Rs.25,000/-.

Settlement sheet:In clearing department this sheet is prepared and contain detail amount of cheques received, amount of cheques will be paid and balance of these accounts.

Demand Draft Demand Draft is a negotiable instrument, which is drawn by one branch to another branch of the same bank. In case of agency arrangement Demand Draft can also be issued by one branch of the bank payable to other branch of the other bank e.g. DD issued by the ASKARI BANK payable by UBL.

69

askari bank Explanation:-

If any person wants to make payment from one city to another city then he can make payment through demand draft. Bank charges a commission for performing this kind of service according to bank rate schedule, which is revised after 6 months. Demand draft may be issued or paid. There are two ways to issue Demand Draft:1. Issue of DD against cash payment 2. Issue of DD against Debit of the account The current rate schedule of DD is as follows:-

Up to Rs. 10,000

0.25% or Rs.25 Which ever is higher

Rs.10, 001 to Rs. 100,000

0.20% or Rs.40 Which ever is higher

Rs. 100,001 to Rs. 10,00,000

0.10% or Rs.200 Which ever is higher

Rs. 10,00,001 to Rs. 20,00,000

0.75% or Rs.1000 Which ever is higher

Above Rs. 20,00,000

0.06% or Rs. 2000 Which ever is higher

Process of the Issuance of DD:When a customer requests ASKARI BANK Urdu Bazaar Branch, Lahore to provide him a DD made on his account or against cash payment for a particular city like Islamabad. Then, after having the total amount including commission demand draft is issued in favor of the specified person in that city and is drawn on ASKARI BANK , Islamabad Branch. So, when payee in any bank presents this demand draft, it constitutes the inward clearing of Askari Bank , Islamabad Branch.

ENTRIES When ASKARI BANK receive the Demand Draft then it pass the following entry:-

askari bank Dr. Cr.

70

Head Office Account with Treasury Demand Draft Payable Account

When ASKARI BANK issue the Demand Draft then it pass the following entry:Dr. Cr. Then Dr. Cr.

Customer Account Transit Account Transit Account Head Office Account with Treasury

At the end of day the Transit Account will be zero (nil).

Entry Of Commission that ASKARI BANK Received From Customer:Dr. Cr.

Customer Account Commission on Remittances Account

Entry Of Excise Duty that ASKARI BANK Recovered From Customer:-

Dr. Cr.

Customer Account Excise Duty Recovered Account

PAY ORDER Pay order is a negotiable instrument made by the bank, on account of a customer, to pay on order the specified amount to the directed person (payee).

Use Of Pay Order:Pay orders are used to make payment or to transfer money, with in the same city. Pay order is always drawn on the bank that has issued it. The main advantage of pay order is that it cannot be dishonored by the bank. Pay order can be endorsed if it is not crossed. The payee may present pay Order for payment either over the counter for cash payment or the payee may transfer credit to his account.

71

askari bank The current rate schedule of Pay Order is as follows:Issuance of Pay Order

Rs. 50/- for a/c holder Rs. 500/- for non-a/c holder'

Cancellation

Rs. 100/- for a/c holder Rs. 100/- for non-a/c holder

Duplicate Issuance

Rs.100/- for a/c holder Rs. 100/- for non-a/c holder

askari bank

72

PAY SLIP “It is a negotiable instrument like cheque issued by the bank on its own account to pay a specified amount to the directed person.”

Use Of Pay Slip:Pay Slips are used to make payment by the bank itself against certain expenses incurred; like furniture purchased by bank, electricity charges.

Issuance Of Pay Slip Bank   

issue a pay slip in favour of person, to whom payment is made. Affixes payee’s Account only stamp. Revenue stamp pasted on it. Entry in bank smart.

Example:If bank has purchased furniture (fixed Asset) costing Rs. 40,000 from a company then a pay slip in the name of that company is made and, instead of writing the issuing date on pay slip, date of encashment (realization) is written when it is presented in bank.

Call Deposit Receipt (CDR) Askari Bank also issues Call Deposit Receipts (CDR). “It is an instrument like Cheque issued by the bank on account of a customer & in favor of a person, to pay the specified amount”. CDR’s are issued to make payments, especially when a company goes for some tenders or for purchase of government securities. The bank enjoys the benefit of keeping funds deposited until the payment is not made.

askari bank

73

Rupees Traveler Cheque Askari Bank presents Rs.1,000, 5,000 and 10,000 denominations of travellers cheques, making it very convenient to carry money while travelling or keeping your emergency cash safe. The paying bank has to verify the signatures and after verification payment is made.

Cancellation of PO, DD & CDR After issuance of Pay Order, Demand Draft or Call Deposit Receipt by Askari Bank, Urdu Bazaar Branch, Lahore, if any one of these has to be cancelled by the customer, it is returned in the bank. Then, after deducting the cancellation charges of Rs.100 for PO and Rs. 200 for DD, the remaining (net) amount is paid to the customer.

Advance Tax against Remittances Advance Tax is deducted on issuance of PO & DD from customers except those who have tax exemption form and credited in Tax on PO & DD account. Tax deducted has to be paid to State Bank of Pakistan (SBP) with in one week of issuance of these instruments.

COLLECTION All the cheques under collection are called cheques under Collection in Askari Bank . There are two types of bills for collection:  Outward Bills for Collection (OBC)  Local Bills for collection (LBC)

Outward Bills For Collection Meaning Of OBC:“When an instrument is drawn on a bank, which is located outside the city, its proceeds can be collected through a mechanism called Outward Bills for Collection (OBC).”

74

askari bank Features:   

Remunerative Transfer of funds between cities Collecting Bank work as an agent Collecting Bank is the holder in due course

Procedure All the cheques are received on one counter along with the paying slips duly filled in properly containing particulars of cheques and account holder. Counter folio of paying slip is handed over to the customer by putting stamp for “cheque received for collection for Askari Bank” on it duly signed by officer. These cheques are scrutinized and cheques for local clearing are separated from OBCs. Cheques for local clearing are entered in Clearing Register, whereas cheques for collection are entered in OBC register. OBC number is allotted to the cheque from OBC register. Special crossing and bank endorsement stamps are affixed on the cheque.

OBC REGISTER Da te

O BC No

Ti tle O f Ac c ount

Acc ount No

Dr a w n On

Ma i le d To

I ns tr um e nt No

Am ount Rs

I ni ti al

OBC schedule is attached with the cheque and dispatched to the main branch of that city for collection. If they do not have any branch in that city, then cheque will be sent to the Collecting Agent of Askari Bank for that city, and if they do not have any collecting agent even, then cheque can be sent directly to the drawing branch. Instructions are given on the OBC schedule for the payment of that cheque. Contraliability vouchers are also posted in the system. When OBC is realized, collection bank pays the amount through IBCA if it is the same bank or through DD if it is another bank. If DD is received against OBC, it is presented in the clearing for collection. If IBCA is received from the branch for the payment of OBC, certain vouchers are posted in the system.

75

askari bank OBC REALIZATION Commission

Postage

Net

Date Of

Amount

Payment

Entries Lodgment Entries:Dr. Cr.

Customer Liability Banker Liability

Realization Entries:Dr. Cr.

Banker Liability on OBC Customer Liability on OBC (Reversal of the Contra Liability)

Dr. Cr.

M.O Account Customer Account (For the amount of the instrument)

Dr.

Customer Account

Cr.

Postage Charges

Cr.

Commission on OBC

Local Bills For Collection

Initial

Remarks

76

askari bank If any other bank sends a cheque of Askari Bank , it is Inward Bill for

Collection. Askari Bank remits money after checking the balance of the customer account. The process of collection starts when the cheques of Askari BankLtd. Are received from other banks.

Then these cheques are sent to the

Head Office Rawalpindi, which sends the cheques to SBP for clearing and get the confirmation of cheque and credit advice. Main activity of clearing is performed by Head Office, which contacts other banks through SBP.

Entry Dr. Cr.

M .O Account Customer Account

Learning from Accounts & Finance Department There were two officers in this department; Mr. Atif and Mr. Nouman They have divided their work between them. Mr. Atif handles Reporting and Mr. Nouman handles daily activity checking. I used to help Mr. Nouman in Daily Activity checking, sorting and counting of vouchers and how to calculate the deprecations of all fixed assets and how to prepare the daily advances and deposits statement, Daily MIS information, Foreign Currency / Exchange position (Currency UK Pounds, Currency Euro, Currency US Dollars). I learnt from Mr. Atif the items of the Askari Bank ance Sheet of Bank and saw the format of different reports. He helped me to understand his work. He told me about the reports that he has to prepare & the purpose of those reports. It was one of those Departments in which Customer interaction is not involve rather paper interaction is important.

77

askari bank Learning in Home Finance

In Home Finance there was one officer – Mr. Kashif. I saw few customers in this department. I learnt what the debt to equity ratio is in Home Finance, how to calculate installment, what are the documents required to get this product, what the eligible criterion is for Home Finance Agreement, and what is the procedure and activities of this department. What is that maximum limit. What are requirement to apply for this Finance.

Steps to Arranging ASKARI BANK Home Finance: ASKARI BANK

provides you with all the information you need

about Askari BankHome Finance. This can be through a face-toface meeting with our Relationship Officer, or over the telephone, or through the post.  You give some basic information about your income and the amount you need so that ASKARI BANK

can give you an

agreement in principle.  Once you have decided on the amount you want, you complete an application form and pass it on to us, together with the required documents.  ASKARI BANK

makes some inquiries about your financial

circumstances.  It carryout a valuation of the property and verification of your income.  Once it has carried out all the initial processing, ASKARI BANK send you our offer through a “Facility Advice Letter”.  You sign the Facility Advice Letter and return it to ASKARI BANK  Its Documentation Control Centre will get in touch with you to complete Finance & Security documentation including legal opinion on the title documents of the property and also the insurances.  You sign the Finance Agreement and Charge documents.

78

askari bank

 ASKARI BANK legal advisor will accompany you to the Registrar’s office on the appointed date with our cheque against the financing for conveyance of the property and your home finance begins.

Learning from Trade Finance This was a new department in Askari Bank so there was only one officer whose name was Mr. Hafiz Farrukh who had experienced in trade

finance.

I

learnt

the

different

methods

of

Trade

Finance,

requirement of importer and exporter before doing import and export, requirement of opening of L/C and procedure of opening L/C, I read L/C that helped me understand that what things would be included in it. In this department few Customers were seen because this was a new department and it will take time to generate profits for the bank.

Requirement Of Opening Letter Of Credit For opening L/C, the importer has to submit the following documents: Performa Invoice  Application For Import  Annexure B  Insurance of consignment  Promissory Note  L/C Margin  L/C Commission

Clauses of Letter of Credit A letter of credit contains various clauses prominent of them are:

79

askari bank  Type of L/C  Amount  Description Of Goods  Trans-shipped / Part-shipped or not.  Collection Charges  Validity Period Of L/C

Import Process  An L/C form is filled.  The customer prepares insurance document from any insurance company.  Filled the SBP Application form that is called Appendix B.  Performa Invoice is Prepared.  Undertaking from the customer on letter Head.  Prepare four copies of Form I (Form I explain the detail of import that are helpful for the SBP.  Approval From Area Office  Prepare voucher and make entries in the system.  Preparation of L/C  These forms are then sent to the Swift Centre of ASKARI BANK .

Swift Centre Machine:•

It

is

the

fastest

and

the

safest

mode

of

financial

communication in the world. •

These are according to the rules and regulations of ‘UCP500’ just like prudential regulations of SBP.

 Now this is received by the exporter’s bank.  When

ASKARI

BANK

receives

shipment

documents

documents are either rejected or accepted within 7 days.  If accepted, the payment from the importer is made.

and

80

askari bank

 An IBCA is received of that amount and send to the exporter’s bank.  Now during these transactions, both the banks receive profit in the form of commission. •

ASKARI BANK

startly receives commission / charges from

the importer. •

Conversion of foreign currency into Pakistan rupees.

Payment Against Document (PAD) In case the payment is not made, then an account of PAD is opened. The bank the issuing bank on the customer’s behalf of a letter of credit, pays the negotiating or advising bank, and debits the PAD account, till its payment by customer. Until the realization of the amount a full set of documents representing title to the goods shipped by the foreign exporter, is held by the bank as security.

Dr.

Payment Against Documents (PAD)

Cr.

Bank Current Account

When the importer brings payment then, Dr.

Current Account

Cr.

Payment Against Documents (PAD)

Export Procedure:-

 Receipt of Letter Of Credit:  Issuance of E-Forms that is verified by an authorized signatory. There are four copies of it.

Copies Of E-Form

81

askari bank  Original: is sent to the custom officer  Duplicate: Bank receive the duplicate  Triplicate: is sent to the State Bank Of Pakistan

 Quadruplicate: is kept by the exporter for his personal record.  Verification of E-Form  Export Documents  Scrutiny Of The Documents  Dispatch  Realization of Export Proceeds.

Learning in Corporate & SME Finance This department was at second floor of the branch. This department is giving a huge amount of return to the branch. There were two officers Mr. Irfan Ahmad Khan and Mr. Atif. I learnt that which assets could be leased through this department. What are the documents that are required

from

different

type

of

client

like

sole

proprietorship,

Partnership, company and trust. How the risk can be evaluated. Preparations of offer latter, Credit line proposal, approval process, Borrower’s

Basic

Fact

Sheet

for

SME’s,

Financial

Statement

of

applicant.

Learning From the Car Finance Department One officer in this department, whose name was Mr. Shakeel used to sit the second floor of the branch. Although the Urdu Bazaar Branch was small but still the demand for financed cars through Askari Banklead this department to prosperity. This department handles a large number of customers daily and, without overstatement; this department is the third “busiest” department after the Account Opening

82

askari bank

Department. It requires constant customer interaction and requires high level of intelligence to screen the validity of the customers. Where as sound marketing skills are required to actually force the walkin customer to select Alfalah Car Financing, still stronger skills are needed to scan the incoming customer for validity. I learnt how to face the customers conveniently, how roper files should be maintained, how to apply for a car, what are requirement to apply for this Product, what is that maximum limit, what is the procedure to this department.

Branches Network North Region

30

Central Region

41

South Region

44

Islamic Banking Branches

06

Offshore Banking Unit 01

Total Branches

122

Credit Card Centers

06

Retail Banking Centers

06

Business & Operational Review During 2006, Askari Bank continued with its growth momentum and posted

substantial

environment.

earnings

Although

despite

monetary

highly

tightening

competitive

business

helped

reducing

in

inflationary pressures in the economy during fiscal 2006, aggregate demand remained high as indicated by the strong GDP growth, high growth in private sector credit, sluggish decline in core inflation and large external account deficit.

83

askari bank

The year on year growth in private sector credit remained strong, although down from the phenomenal growth witnessed last year. The slowdown in private sector credit was not broad based and was mainly due to net retirement by sugar and cotton spinning sectors.

Corporate Banking This business in managed by a central corporate banking division based at head office Rawalpindi and Supported by dedicated marketing and back office units in Karachi, Lahore and Rawalpindi. The division maintains a diverse portfolio and primarily offers Structured financing Solutions to cater for the business needs of its clients. During 2006, corporate

banking

further

expanded

its

customer

base

and

new

relationships were established in telecommunications sectors, fuel and energy, and fertilizer sectors. In order to enhance focus on relationship management and service quality, more dedicated and experienced staff is being assigned to this division. The corporate Banking will continue to play a major role in loan syndications and structured financing transactions with the objectives of providing a range of corporate banking solutions to its valued clients.

Products Lines Here we discuss the products which are given by us to our customer facilitations. There is many product as followed.

CONSUMER BANKING SERVICES Con s ume r Ba nk i ng Se r vi c es

Is la m i c Ba nk i ng Se r vi c es

84

askari bank I sla mic Co rp o ra te Ba n kin g

P e rso n a l Fina n ce Mo rt ga g e Fin an ce B u sin e ss Fina n ce

I sla mic In ve st me n t Ba n kin g

S ma rt Ca sh

I sla mic Trad e Fina n ce

A ut o Fina n cing

I sla mic Ge ne ra l Ba n kin g

Ca sh Ca rd

I sla mic Con su me r Ba n kin g

P ro f it / Ma rkup Ra te s

De cla re d We igh t ag es P ro f it Rat e s K issa n Eve r G ree n Fina n ce Agr ic ul tur e Fi na nc e S ol uti ons

K issa n Tra ct o r Fin an ce K issa n Aa bp a sh i Fina n ce

Cor por a te & I nv es tm e nt Ba nk i ng

K issa n Live sto ck Co rpo ra te B an king De ve lo p men t Fina n ceDivisio n K issa n Fa rm Te rm Lo an s Me ch an iza t ion Fin an ce Fu n d Tra n sfe rs / K issa n Tran spo rt Re mit ta n ce s Fina n ce In ve st me n t B an kin g Divisio n P ro je ct Fina n ce I sla mic Fina n ce

Personal Finance Personal Finance is a parameter driven product for catering to the needs of the general public belonging to different segments. One can avail unlimited opportunities through Askari Bank's Personal Finance. With unmatched finance features in terms of loan amount, payback period and most affordable monthly installments, Askari Bank's Personal Finance makes sure that one gets the most out of his/her loan.

85

askari bank

Once a good credit history is established, the door to opportunity opens much wider.

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

Product Featuring: Borrower:

Resident Pakistani Nationals.

Facility:

Term Finance

Financing Limits:

Maximum upto Rs. 500,000/. (Clean) Maximum upto Rs. 1 Million. (Secured)

Tenor:

Maximum upto 5 Years

Repayment:

Monthly Installments

Markup Rates:

Competitive

Servicing:

Available at all Askari Bank branches

Askari Bank ance Transfer Facility:

Available

Eligibility to Apply: Age: Income:

Between 21 to 65 years. Minimum gross monthly

Financing

10,000/- only. Maximum upto Rs. 500,000/. (Clean)

Limits:

income

of

Rs.

86

askari bank Employment:

a) Salaried:

Minimum confirmed present

length

of

service

with

employer

is

6

months with a total length b) Charges/Fees:

of 1 year service. SelfMinimum 1 year

in

Employed: business. As per current schedule of charges.

When you are working towards your financial goals, how you borrow can be just as important as how you invest. The right borrowing options can improve your savings, your cash flow and your ability to take advantage of personal or business opportunities. So, choose the right options and call us now to enquire about your entitlement amount and exclusive service. At Askari bank we make every effort to serve our customers with care. Not restricted to new financing, under Personal Finance scheme, we offer extended facilities, which are:

Back to Original:

Under this scheme borrower can avail extended amount of finance upto the utilized allocated amount, if his/her repayments are regular.

Askari Bank ance Transfer Facility:

It gives the customer the opportunity to pay off his/her outstanding dues on their credit cards or other loans at a rate of interest much lower than what one pays on them. That not only frees up their credit limit, but cost of servicing the debt is greatly reduced.

87

askari bank Computer Loans: This scheme was launched to promote the I.T. technology in the country. In this regard, we have signed MOU’s with Multinational companies and large local corporates including schools & colleges.

Dream Life (Financing for Consumer Durables):

We are the financial market player in delivering quality service to customers with highly professional standards. We have joined hands with various Electronic Companies for sale, of the domestic appliances against

consumer

financing.

Under

this

scheme,

Askari

Bank

is

financing products of these companies, which would benefit those people who can only afford to buy home appliances on installments due to

limited

resources.

In

addition

to

this,

we

have

also

signed

agreements with other top manufacturers of automobiles for financing of motorcycles to the general public at most competitive rates. We have established relationship with almost all top manufacturers and dealers of:

88

askari bank Mortgage Finance

Askari "Mortgage Finance" offers the convenience of owning a house of choice, while living in it at its rental value. The installment plan has carefully

designed

requirements. enhancing

It

to has

financing

suit

both

the

budget

been

designed

for

facility

initially

for

&

accommodation

employees of corporate companies for purchase/ construction/ renovation of house.

Ever since the inception of life, shelter has been rated among the primary needs of mankind. Owning a home for oneself still remains an exclusive dream for many. Askari Bank has made the realization of your dream to have a house of your very own possible. Whether you plan to build a house, tailor made to your requirements or buy a constructed house, Askari mortgage finance enables you to pursue your goal without any problems Product Featuring: Borrower: Financing Limits: Tenor: Repayment: Prime Security: Markup Rates: Servicing:

Resident Pakistani Nationals. Maximum upto Rs. 30 Million. Maximum upto 20 years. Monthly Installments. Mortgage of property. Competitive Available at all Askari Bank

Branches Askari Bank ance Transfer Available Facility: Askari Bank ance Transfer Available. Facility:

Eligibility to Apply:

89

askari bank Age: Income:

Between 21 to 65 years. a) Salaried: Minimum

gross

monthly

income of Rs.20,000/- only and a permanent employee with

atleast

service

2

including

years

of

present

employer. b) Self Employed: Minimum length of 1 years in business. Charges/Fee As per current schedule of charges. s:

Business Finance In pursuance of the National objectives to revive the economy of the country, ACBL is providing loans to small and medium size business enterprises under Askari Bank's Business Finance Scheme. Our goal is to offer a loan, which enables business community to receive the financing required by them based on their cash flows. Our

valued

customers

can

enjoy

the

convenience of getting financing on attractive terms with the minimum processing turnaround time. You always wanted to put in that extra money into your business, which makes it grow... and grow!. Now you can stop worrying about your daily cash requirements, and start enjoying our unique Askari Business Finance facility. Available upto 60% of the assessed market value of your residential property, through equitable/token mortgage.

Product Featuring: Borrower:

Resident Pakistani Nationals.

90

askari bank Facility: Financing

Running Finance/Term Finance. Maximum upto Rs.1.0

Limits: Primary

Maximum upto Rs.50.0 Million Residential & Commercial / Built up Properly &

Security: Mode

Land. ofRunning

Finance:

One

year

line

Million

of

credit

Financing: (renewable). Repayment: Running Finance: Monthly debt servicing on the Markup

outstanding Askari Bank ance. Competitve.

Rates: Servicing: Available at all Askari Bank Branches. Askari BankAvailable ance Transfer Facility:

Eligibility to Apply: Age: 21 to 65 Years. Borrowers: Resident Pakistani Nationals. Business Requirements: Maximum upto Rs. 500,000/. Employment:

(Clean) Minimum one year's business or professional

Charge/Fees:

experience

present business As per current

in

Schedule

the of

charges Enjoy the convenience of most attractive financing with minimum loan approval turnaround time. Don't wait act now, to enhance your financial resources

Smart Cash This personal line of credit would be set up with specified credit limit upto Rs. 500,000/-

a

91

askari bank

Product Featuring: Borrower: Facility: Financing Limits: Tenor: Repayment: Markup Rates: Servicing: Askari Bank ance Facility:

Resident Pakistani Nationals Personal Line of Credit. Maximum upto Rs. 500,000/-(Clean) Maximum upto Rs. 1 Million (Secured) One year (renewable). Monthly debt servicing on the outstanding Askari Bank ance. Competitive. Available at all Askari Bank Branches Transfer Available.

Eligibility to Apply: Age:

Between 21 to 65 Years.

Income:

Minimum gross monthly income of Rs. 25,000/-

only. Employment: a) Salaried:

Minimum

length

of

confirmed

service with present employer is six months with a total length of one year service. b) Self Employed:

Minimum

1

year

in

business.

(against security). Charges/Fees: As per current schedule of charges.

Auto Financing Yet another of our products, Askar offers the most convenient and affordable vehicle- financing scheme, which provides our valuable customers an opportunity to own a brand new vehicle of their choice. With minimum down payment, lowest insurance

92

askari bank

rates and widest range of available car makes and models, Askcar offers the best value to our esteemed customers. Askari Bank offers you the most convenient and affordable vehicle financing scheme to help you own your favorite brand new car.

Product Features: Borrower: Facility: Financing Limits: Repayment: Markup Rates: Askari Bank Payment:

Resident Pakistani Nationals TermFinancing Rs: 100,000/- to Rs: 3.0 Million Monthly Installments Competitive loon

Available Salaried:

Minimum Income:

Auto Insurance: Financing Tenor

10,000/-,

Self Employed Businessman: Rs: 25,000/As Per

Charge / Fees:

Rs:

current

Schedule

of

Charges Mandatory Up to 7 years

ASKARI CARD ASKCARD means freedom, comfort, convenience and security, so that you

can

have

retail

transactions

with

complete

peace

of

mind.

ASKCARD is your new shopping companion which enhances your quality of life by letting you do shopping, dine at restaurants, pay your utility bills, transfer funds, withdraw and deposit cash through ATM anywhere, anytime.

Travelers Cheques The range of our products and value added services enhances with introduction of Rupee Travelers Cheques (RTCs) launched in March 2002. In spite of our constraint on issuing higher denomination of RTCs

askari bank

93

against restrictions imposed by the Central Bank of Pakistan we have been striving to attain our shares with sizeable portfolio. Askari Commercial Bank Limited has always remained at forefront in introducing innovative and unique products in banking sector. Our financial instruments provide greater financial freedom and security in an unmatched way to our valued customers. Askari Bank offers you its "Rupee Traveler Cheques" eliminating all financial risks while traveling. So avoid risk of carrying cash through Askari Bank's Rupee Traveler Cheques. Your Best Traveling Companion.

Why Askari Bank's Traveler Cheques? 1. Free Issuance. 2. Free Encashment. 3. Plus commission for the Customer at the time of encashment if retained for a specific period. 4. Nationwide acceptability. 5. Facility of encashment in cash to the purchaser. 6. Facility of encashment through clearing. 7. No purchasing limit. 8. Valid until encashed. 9. Easily Transferable. 10.

Account relationship not mandatory.

11.

Fastest refund procedure in case of loss/theft.

12.

Safe & Secure due to foreign printing with multiple security features.

13.

Available in Rs. 10,000 Denomination at all branches of Askari Bank.

14. No withholding tax on sale or encashment Subject to change as per Govt. rules.

94

askari bank Value Plus Deposits

The first liability product launched by this unit is showing a remarkable acceptability in the market. The growth of this product is witnessed by its share, which has presently reached at Rs. 1,079 Million even after lowering down the profit rates due to sufficient liquidity in the market.

Profit / Markup Rates on Retail Products Rates of Profit Paid to Value Plus A/C Holders & on ABIC Particulars Value Plus Saving Deposits Rs. 10,000/- to Rs. 24,999/Rs. 25,000/- & above Value Plus Time Deposits Three months Six Months One Year Investment Certificates First Month Second Month Third Month

Profit Rates 2.50% 3% 5% 5.50% 6% 4% 4.50% 5%

Commission being paid to customers on retention of RTC for a period of One Month, @ 0.1% of face value of RTC.

Lending Product Rates Particulars

Markup Rates

Personal Finance Upto 3 Years Upto 5 Years Smart Cash 1 Year (Renewable)

18% 22% 22%

Business Finance 1 Year

1 Year Kibor + 3% to be

95

askari bank reviewed on yearly basis

Mortgage Finance 20 years maximum

1 Year Kibor + 3% to be

Auto Financing

reviewed on yearly basis. 13% to 15%

Islamic Banking Services,

Islamic Banking was launched under the brand 'Askari Islamic Banking', by opening 6 dedicated Islamic Banking branches in major cities of the country. Further expansion is planned with improved capabilities for offering products conforming to the Shariah principles. Askari Islamic Banking opens the doors for Halal banking solutions. Our objective is to put in place an efficient banking system supportive to economic justice and welfare of society in line with Shariah standards. A comprehensive range of Islamic Banking products and services is being

offered,

in

order

to

meet

customer's

Compliant Banking, in the following areas: •

Islamic Corporate Banking

•

Islamic Investment Banking

•

Islamic Trade Finance

•

Islamic General Banking

•

Islamic Consumer Banking

demand

of

Shariah

96

askari bank

Islamic Banking products have been approved by the Bank's Shariah Advisor. As per Shariah requirements, funds and products of Islamic Banking are managed separately from the Conventional Banking side. All funds obtained, invested and shared in Halal modes & investments, under supervision of the Shariah Advisor.

Profit Rates for the Month of December - 2009 Local Currency Account Category

Profit Rate

Ahsan 10,000-99,999 Ahsan 100,000-999,999 Ahsan 1,000,000-9,999,999 Ahsan 10,000,000-49,999,999 Ahsan 50,000,000-99,999,999 Ahsan Masrafi 100,000,000 & Above Ahsan Masrafi COI 1 Month AHCAAM 1 Month (100M & above) AIIC- 3 Months ( Profit at maturity) AIIC- 6 Months ( Profit at maturity) AIIC - 1 Year (Profit on monthly basis) AIIC - 1 Year maturity (Profit at Maturity)

3.04% 4.00% 5.09% 6.36% 9.20% 8.35% 8.95% 10.20% 8.40% 8.50% 8.15% 9.50%

AIIC - 3 Years monthly (Profit on monthly basis)

8.40%

AIIC - 3 Years (Profit on quarterly basis)

8.65%

AIIC - 5 Years monthly (Profit on monthly basis)

8.91%

AIIC - 5 Years quarterly (Profit on quarterly basis) 9.16%

Foreign Currency

97

askari bank USD Ahsan 3,000-999,999,999 Note: Rates are declared on a monthly basis

1.59%

98

askari bank ASKARI BANK LIMITED ISLAMIC BANKING SERVICES DIVISION

Declared Weight ages

Date: 31.12.2009

The following will be the declared weight ages, for the Month of January, 2010.

PKR Accounts: Account

Profit Distribution Period/ Tier

Weight

Category

group(s)

age

AHSAN AHSAN AHSAN AHSAN AHSAN AHSAN AHSAN AHSAN AHSAN

Account Account Account Account Account Account MASRAFI MASRAFI MASRAFI

COI –

01 Week

Maturity AHSAN MASRAFI COI –

10,000,000 and above

1.25

10,000,000 and above

1.40

10,000,000 and above

1.60

10,000,000 and above

1.75

01 Month

Maturity AHSAN MASRAFI COI –

Assigned 0.50 0.75 1.00 1.25 1.40 1.75 1.00 1.40 1.00

02 Weeks

Maturity AHSAN MASRAFI COI –

10,000 to 99,999 100,000 to 999,999 1,000,000 to 9,999,999 10,000,000 to 49,999,999 50,000,000 to 99,999,999 100,000,000 & Above 10,000,000 to 99,999,999 100,000,000 & Above 10,000,000 and above

03

Months Monthly AHSAN MASRAFI

99

askari bank COI –

06

Months Monthly AHCAMM-01

50,000 to 9,999,999

1.30

Month AHCAMM-01

10,000,000 to 49,999,999

1.50

Month AHCAMM-01

50,000,000 to 99,999,999

1.60

Month AHCAMM-01

100,000,000 & above

2.00

3 Months 6 Months Monthly Quarterly Maturity Monthly Quarterly Maturity Monthly Quarterly Maturity Monthly Quarterly Maturity Maturity Maturity Maturity Maturity Six monthly Maturity Six Monthly Maturity Six Monthly Maturity

1.50 1.55 1.60 1.65 1.70 1.65 1.70 2.10 1.70 1.75 2.15 1.75 1.80 2.20 1.70 1.75 1.80 2.10 1.85 2.15 1.90 2.25 2.00 2.40 0.50

Month AIIC- 3 Months AIIC- 6 Months AIIC- 1 Year AIIC- 1 Year AIIC- 1 Year AIIC- 3 Years AIIC- 3 Years AIIC- 3 Years AIIC- 4 Years AIIC- 4 Years AIIC- 4 Years AIIC- 5 Years AIIC- 5 Years AIIC- 5 Years AKIDA-3 Months AKIDA- 6 Months AKIDA- 1 Year AKIDA- 2 Years AITQAD- 3 Years AITQAD - 3Years AITQAD -5Years AITQAD - 5Years AITQAD- 7 Years AITQAD- 7Years HO Mudarabah Account HO Draw Down

2.00

facility on Mudarabah Account Equity/ Bank

1.00

askari bank

100

Profit sharing ratio in respect of special pools will be as per agreement between the Bank and Depositor (Rab-ul-Maal). PROFIT SHARING RATIO FOR GENERAL POOL Askari Bank Ltd-Islamic Banking 50% Depositors 50%

101

askari bank Agriculture Finance Solutions The

role

of

agriculture

in

Pakistan

economy is of pivotal nature. Due to diverse

geographical

and

climatic

conditions the country has tremendous potential for growth and development in agriculture.

However,

adequate

and

timely financial assistance to the farmers will improve production potential of agriculture sector in the country. The modern concept of agricultural credit envisages establishment of an efficient institutional credit system to serve as a package of credit, supplies and knowledge for the overall strength of the farmers who at present

suffer

from

low

productivity

and

financial

insecurity.

A

successful credit evaluation system, therefore, should have the basic ingredients to provide adequate amount at the right time and in the right form to help farmers in making a productive use of loan funds.

ASKARI KISSAN AGRICULTURE FINANCE PROGRAM The Askari Kissan Agri Finance Program (AKAFP) has been designed to meet ON FARM / OFF FARM credit requirements of farmers on the most convenient, flexible, easy terms and conditions. The program features: •

A

broad

array

of

credit

lines

designed

to

meet

farming

requirements. •

Repay and borrow at your convenience on revolving credit basis at lowest mark-up rates renewal able after three years.

•

Convenient repayment terms based on cash flow abilities.

•

Availability Collateral.

of

leased

Tractors

/

Transport

without

Land

/

102

askari bank •

No Hidden Cost.

•

Availability of interest free package for inputs and tractors etc.

•

No Pre-adjustment penalties.

•

Earn prompt payment Bonuses and reduce financial costs.

•

Insurance

cover

of

leased

assets,

animals,

crops

and

life

assurance of borrowers.

AGRICULTURE FINANCE PROGRAM •

Kissan Ever Green Finance

•

Kissan Tractor Finance

•

Kissan Aabpashi Finance

•

Kissan Livestock Development Finance

•

Kissan Farm Mechanization Finance

•

Kissan Transport Finance

Kissan Ever Green Finance Askari Bank has launched this program with the sole motive to provide dignity, prosperity and freedom to the tiller of the land. The program is designed to help small, medium and large farmers in meeting their short-term

input

requirements

against

one

time

sanction

automatically renewable upto 3 years subject its

stipulated

and to

utilization/periodical

adjustment. The credit line is sanctioned in the light of available cash flows and input requirements

i.e.

Seeds,

Fertilizer

&

Pesticides etc.

Salient Features of the Program are given as: •

Farmer open a profit earning "Askari Ever Green Account" with the branch. A special cheque book is issued to the farmer.

103

askari bank •

Revolving credit limit as "Ever Green Agri Finance" is available to the farmer against security i.e mortgaged charge on agri land through Zari Pass Book.

•

Hassle

free,

automatic

renewal

upon

adjustment

of

entire

principal amount with mark-up once in a year. rmers both ways. If the account is in credit, it earns profit, otherwise it provides is eds. •

The mark-up is charged for the actual days the finance is utilized.

•

Profit on credit Askari Bank ances will be paid on half yearly basis as declared by the bank on PLS savings accounts.

Salient Features of the Program are: ed water resources.

Salient Features of the Program are: •

To facilitate the farmer, to overcome the scarcity of water.

•

To develop mechanical water resources, sprinkler and drip system etc.

•

To avoid traditional / inefficient modes of irrigation and waste of available water.

•

To manage natural / available resources through water

KISSAN LIVE STOCK DEVELOPMENT FINANCE In order to supplement the income of the farmer, Askari Bank has launched a program enabling the farmer to purchase Milch Animals, Goats, Sheep, Poultry and Fisheries without incurring extra expenditure because of availablility at his farm. He will be able to get milk, meat and eggs etc., which normally do not form part of his diet. This program

104

askari bank

has the added advantage that besides fulfilling his own family’s consumption needs he will be able to market the surplus and earn additional income. This will further improve their cash flows to repay their other Loans / Revolving Credit on due date.

Salient Features of the Program are: •

The program will provide regular day to day income to the farmer to meet his own consumption and surplus to be marketed.

•

This

will

revive

/

accelerate

and

supplement

the

income

generating capacity. •

It will enhance the repayment capacity of the farmer.

KISSAN FARM MECHANIZATION FINANCE Beside Power at the farm i.e. Tractor, the benefits / advantages of power are maximized with the use of Mechanical Support i.e. modern and improved equipments which essentially complement one another due to their cost effectiveness and time efficiency. Askari Bank has launched

an

Askari

Kissan

Farm

Mechanization Finance for the assistance of small farmers and provide finance for farm equipment,

trailer,

rotavators etc.

thresher,

drills

&

the

105

askari bank Salient Features of the Program are: •

Under this program the farmer will get benefit of use of modern agricultural tools, implements and equipments which are cost and time effective.

•

Improves per acre yield of agri crops and quality of agriculture produce to get good price in the market.

•

Helps

to

match

/

compete

with

international

standards

for

exportable agriculture produce.

KISSAN FARM TRANSPORT FINANCE A grave handicap that afflicts our farmers is their inability, due to lack of proper facilities, to take their produce to the market through efficient means of transportation. This adversely affects the freshness, quality of the product and denies them the desirable Price-Fetching opportunity. Conversely, they lack mobility to acquire much needed inputs essential for their farming needs. One can safely conclude that if provided with appropriate and speedy transport, the farmer can benefit by enhancing his selling ability and thus increase his income / cash flow. it is pertinent to mention that a number of Banks, Leasing Companies and Private Agencies have geared their marketing efforts to concentrate on and have mainly captured the urban markets. There is no support provided to cater to the transport needs of deserving rural farmers community. Askari Bank true to its commitment, has taken the lead to launch Askari Kissan Farm Transport Finance

Salient Features of the Program are: •

To increase mobility and access of the farmer to the markets.

•

To lower the burden / cost of transportation against hired transport.

106

askari bank •

To create awareness of market movements in order to obtain maximum price of their produce.

•

This will also supplement the income of the farmer which will ultimately enhance the repayment capacity of the borrower.

•

Additional income can be generated if used for hired services to the fellow farmers.

Corporate & Investment Banking Group (CIBG) As Askari Bank, we understand the unique business requirements of our corporate and institutional clients, and accordingly, strive to meet their expectations through the provision of a customized, relationship based

banking

approach,

through

Banking

the

Corporate

and

Investment

Group

(CIBG).

CIBG is a one-window operation that provides all requisite banking services

for

our

corporate

clientele

in

an

efficient,

dependable,

consistent, and competitive manner – the objective being to become your

“bank

of

first

call”

for

all

your

financial

needs.

CIBG is specifically structured to provide dedicated banking services and products to its corporate customers through two key divisions. •

Corporate Banking Division

•

Investment Banking Division

Corporate Banking Division (CBD) CBD is your long-term business partner that is geared to help you in meeting your business growth objectives. The business is managed by a team of professionals who understand your requirements and can firmly stand by your side. Dedicated relationship managers for each of our corporate clients ensure your satisfaction, which is our top priority. Our relationship

askari bank

107

oriented outlook focuses upon providing a complete array of tailored financing solutions, that are practical and cost effective, some of which include. •

Working Capital Facilities

•

Term Loans

•

Structured Trade Finance Facilities

•

Letters of Guarantee

•

Letters of Credit

•

Fund Transfers / Remittances

•

Bill Discounting

•

Export Financing

•

Receivable Discounting

Investment Banking Division IBD provides value-added, specialist services and products through a dedicated team of professionals, with world-class skills, to provide customized solutions to help our clients meet their strategic objectives. IBD is responsible for seamlessly originating, executing and distributing all forms of investment banking transactions ranging from syndicated loans to complex structured and project financing transactions. Some examples of products offered by IBD include: •

Strategic Advisory

•

Privatization Advisory

•

M & A Advisory

•

Askari Bank ance Sheet Restructuring

•

Syndications

•

Project Finance

•

Structured Finance

•

Islamic Finance

•

Private Placements of Debt and Equity

108

askari bank •

Issuance and distribution of Term Finance Certificates, Sukuk Bonds, and Commercial Paper

•

Underwritings

•

Capital Market Hybrid Products

•

International Division

International Division strives to place at the disposal of our branch network, efficient correspondent banking arrangements on gloAskari Bank basis, thereby catering the needs of our client diaspora. In short, this is made possible through a variety of arrangements with various banks which, amongst other benefits, ensures placement of suitable Credit lines at our disposal by our counter-party banks to facilitate Foreign Trade and Treasury related activities. Today International Division boasts of multi-faceted correspondent banking relationships with over 200 Banks in 77 countries around the world thereby improving the capacity of our branches in serving their clients. Alongside,

International

Division

is

entrusted

to

arrange

evaluation/approval of exposure limits favoring various local/overseas banks and Non-banking Financial Institutions with whom our Treasury and branches deal on day-to-day basis. Within the context comes the Country exposure, which is managed and monitored at this division, whereas our liaison with State Bank of Pakistan, in respect of Foreign Trade related issues, helps us to provide timely directions and efficient advisory to our branch network. Optimum monitoring of business reciprocity with banks compliments our efforts to manage the business flows and ensure greater profitability and

Askari

Bank

anced

distribution

of

business

amongst

our

correspondents. In addition and as a part of the ongoing exercise of Know Your Customer

(KYC)

compliance

with

regard

to

our

correspondents,

109

askari bank

International Division carries out regular Due Diligence exercises to ensure that our bank deals only with financial institutions that are able to meet the prescribed standards and criteria. Standard settlement instructions for commercial payments through our major correspondents are appended below: Standard Settlement Instructions for commercial payments Curr Bank ACU American

Swift/BIC Express

Bank

Account No

Ltd , AEIB IN DX MAS 510280058

Chennai ACU Bank of Ceylon , Colombo

BCEY LK LX 125 111-250400- 021

ACU Bank Saderat Iran , Tehran

BSIR IR TH

216-1-1-6400

ACU Standard Chartered Bank , Dhaka SCBL BD DX

15-2000938- 01

ACU Standard

22205306892

Chartered

Bank , SCBL IN BB

Mumbai ACU State Bank of India , New Delhi

SBIN IN BB 172

09046/031044

AED MashreqBank PSC , Dubai City

BOML AE AD

0195510502

AUD Commonwealth

Bank

of CTBA AU 2S

Australia , Sydney

10000

7701

AUD

112601

CAD Royal Bank of Canada , Toronto

ROYC CA T2

CHF Credit Suisse , Zürich

CRES

CH

201-383-7 ZZ 919989-53

80A DKK Danske Bank A/S , Copenhagen

DABA DK KK

EUR American Express Bank GmbH , AEIB DE FX

3996035360 424-007396907

Frankfurt am Main EUR Bayerische

Hypo-und HYVE DE MM

69105173

Vereinsbank AG , Munich EUR Citibank NA , London

CITI GB 22

EUR Commerzbank AG , Frankfurt am COBA DE FF

8562059 400-88-07190-00

Main EUR Dresdner Bank AG , Frankfurt am DRES DE FF

8 127 815 00

Main GBP Habibsons Bank Limited , London HSBL GB 2L

21003198

GBP Lloyds TSB Bank plc , London

LOYD GB 2L

01001583

GBP National Westminster Bank Plc , NWBK GB 2L

04461843

London

110

askari bank GBP Standard

Chartered

Bank , SCBL GB 2L

01-249443401

London JPY

American

Express

Bank

Ltd , AEIB JP JX

313001707

Tokyo JPY

Askari Bank , Tokyo

ASKARI BANK A 21057 JP JT

SAR The National Commercial Bank , NCBK SA JE

555 653 15000 101

Jeddah SEK Svenska

Handelsbanken

AB HAND SE SS

99-40-956-709

(publ) , Stockholm SGD ABN AMRO Bank NV , Singapore

ABNA SG SG

USD American Express Bank Ltd , New AEIB US 33

10-0044-115 000718577

York USD Citibank NA , New York

CITI US 33

3607 9507

USD Habib American Bank , New York

HANY US 33

2072-9550

USD Habib Bank Limited , New York

HABB US 33

0021-507008- 091

USD MashreqBank PSC , New York

MSHQ US 33

70119455- 1067

USD Askari Bank , New York

ASKARI BANK A 005580-4563 US 33

USD Standard Chartered Bank , New SCBL US 33

3582-025923- 001

York

Askari Debit Card Askari Bank is committed to provide you innovative and competitive solutions to your banking needs in a more efficient and personalized manner. Your Bank enjoys a strategic competitive advantage over all domestic

players

by

virtue

of

its

leadership,

large

network

and

technological advancement. In line with our tradition of innovation, Askari Bank takes pride in announcing launch of "Askari Debit Card"Askari Bank's Debit Card. Askari Debit Card is tailored to your shopping needs and is another valuable financial solution reflecting our commitment to build lasting relationship with you.

111

askari bank

Askari Debit Card means freedom, comfort, convenience and security, so that you can have retail transactions with complete peace of mind. Askari Debit Card is your new shopping companion which enhances your quality of life by letting you do shopping, dine at restaurants, pay your utility bills, transfer funds, withdraw and deposit cash through ATM anywhere, anytime.

Entity Ratings Askari Bank has the following Entity Ratings from the Pakistan Credit Rating Agency Limited (PACRA): Short Term Long Term

A1+ AA+

Definitions By PACRA: A1+: Obligations supported by the highest capacity for timely repayment. AA+: Very high credit quality. 'AA' ratings denote a very low expectation of credit risk. they indicate very strong capacity for timely payment of financial commitments. This capacity is not significantly vulnerable to foreseeable

events.

A plus (+) appended to a rating,

denotes

relative

status within major rating categories.

Core Values:

askari bank

112

We understand that our commitment to satisfy customers’ needs must be fulfilled within a professional and ethical framework. We subscribe to a culture of high ethical standards, based on the development of right attitudes. We believe in our 'core values' as the essential and enduring tenets of our organization - the very small set of guiding principles that have a profound impact on how everyone in the organization thinks and acts. They have an intrinsic value for us and bear significant importance to all our employees. They are the few extremely powerful guiding principles; the soul of the organization - the values that guide all our actions. The intrinsic values, which are the corner stones of our corporate behavior, are: •

Commitment

•

Integrity

•

Fairness

•

Team-work

•

Service

ASKARI BANK BALANCE SHEET AS AT 31ST DECEMBER (Rupees in 000)

113

askari bank A sset s Ca sh a nd A ska ri Ba nk a nce with t re a su ry B an ks A ska ri Ba n k a n ce s wit h Ot he r

2 00 9 1 4, 87 9 ,2 31

2 00 8 1 1, 76 6 ,9 28

7 ,3 36 , 83 8

5 ,5 78 , 65 4

8 ,3 92 , 95 0

1 0, 19 7 ,2 42

2 8, 57 1 ,9 69 9 9, 17 9 ,4 39 3 ,8 28 , 81 8 -

2 5, 61 8 ,6 20 8 5, 99 8 ,6 49 3 ,1 98 , 66 6 -

B an ks

Le ndi ng to fi na nc e i ns ti tuti ons I n ve st men t s A d va n ce s O pe ra t ing f ixed A sse t s De fe rre d t ax a sse t s O th e r A sse t s

3 ,8 24 , 10 5 1 66 ,0 1 3, 35 0

51 2 1 45 ,0 9 5, 55 8

Li a bil i ti es B ills P a ya b le

1 ,8 39 , 07 7 1 4, 96 4 ,0 87

1 ,3 15 , 68 0 1 0, 56 2 ,3 38

Bor r ow i ngs De po sit s a nd ot he r a cco un t s S ub -o rd ina t e lo an s L iab ilit ie s a ga in st a sset s sub je ct to f ina n ce le a se De fe rre d t ax lia b ilit ie s O th e r L ia b ilit ie s

Ne t Ass e ts

1 31 ,8 3 7, 23 0 2 ,9 98 , 50 0 4 ,4 40

1 18 ,7 9 4, 15 1 2 ,9 99 , 70 0 3 ,9 71

72 6, 49 7

56 4, 38 8

2 ,6 08 , 36 0

2 ,0 47 , 10 0

1 54 ,9 7 8, 19 1

1 36 ,2 8 7, 32 8

1 1, 03 5 ,1 59

8 ,8 08 , 23 0

114

askari bank

PROFIT AND LOSS ACCOUNT (Rupees in 000) 2009

20 0 8

12,602,910

8,782,369

M ar k u p / r e t ur n / i n t e r es t e xp e ns e d

6 , 9 7 6 , 7 04

4,276,130

Ne t m a r k u p / i n t e r e s t i n c o me

5 , 6 2 6 , 2 06

4,506,239

P r ov i s i on a ga i n s t no n - pe r f o r m i n g l o a ns an d ad v a nc es - n e t

1 , 1 2 8 , 1 37

63 8 , 5 4 7

P r ov i s i on f o r d i m i n u t i o n i n t h e v a l u e o f i nv e s t m e n t s B a d d e b t s w ri t t e n o f f d i r ec t l y

37 6

( 3 6 , 5 5 5)

-

-

1 , 1 2 8 , 5 13

60 1 , 9 9 2

4 , 4 9 7 , 6 93

3,904,247

M ar k u p / r e t u r n / i n t e r es t e ar n e d

Ne t m a r k u p / i n t e r e s t i n c o me af t e r provisions NO N M A RK - U P / I N T E R E S T I N C O M E F ee , c o m m i ss i o n a n d b ro k er a g e i n c o m e

1 , 0 2 7 , 4 91

83 8 , 5 8 8

Di v i d e nd i nc o m e

109,326

51,143

Income from dealing in foreign c u rr e n c i es O t h er i nc o m e

584,344

35 6 , 2 1 8

321,700

20 6 , 8 1 9

2 , 1 5 4 , 6 51

1,552,600

6 , 6 5 2 , 3 44

5,456,847

3 , 3 1 9 , 0 69

2,604,016

-

-

6,141

1,832

3 , 3 2 5 , 2 10

2,605,848

3 , 3 2 7 , 1 34

2,850,999

E x t r ao r d i n ar y / u n u su a l i t e m s

- - -- - -- -

-- - -- - --

P R O F I T B E F O R E TA X A T I O N

3 , 3 2 7 , 1 34

2,850,999

983,944

62 8 , 7 7 4

-

(1 8 8 , 2 4 7 )

T ot a l n o n ma r k- u p / i n t e r e s t i n c o me NO N M A RK - U P / I N T E R E S T E X P E N S E S A d m i n i s t r a t i ve ex p e ns es O t h er pr o v is i o n s / w r i t e o f f O t h er ch a r ge s T ot a l n o n - ma r k u p / i n t e r e st

ex p e n s e s

T ax a t i o n F or t h e y ea r – C ur r e n t F or pr i o r y ea r – C ur r e n t -D e f e rr e d

106,034

19 3 , 7 2 9

1 , 0 8 9 , 9 78

83 4 , 2 5 6

PROFIT AFTER TAXATION Inappropriate profit brought forward

2 , 2 3 7 , 1 56

2,016,743

1 , 6 1 2 , 3 44

1,533,179

Profit available for appropriation

3 , 8 4 9 , 5 00

3,549,922

115

askari bank

2005

2006

2007

2008

2009

shareholders

20.3

23.9

34.8

27.7

22.6

funds Return on average assets Profit before tax ratio Gross spread ratio Income / expense ratio Advances to depositsb76 Operating fixed assets to average

1.1 25.6 37.9 1.3 58.1 49.3

1.4 46.7 66.1 1.6 72.6 43.0

2.0 63.3 75.1 1.9 83.9 46.9

1.6 32.5 51.3 1.4 72.4 43.7

1.4 26.6 44.6 1.3 75.2 38.4

share holders funds Capital adequate ratio Rate of cash dividend Rate of bonus issue Price earning ratio Dividend yield ratio Dividend payout ratio

12.0 20.0 5.0 4.5 7.4 31.6

9.9 20.0 10.0 5.3 3.9 20.7

8.5 20.0 20.0 6.1 2.1 13.1

11.0 15.0 33.0 9.6 1.2 11.2

10.9 10.0 50.0 9.3 1.0 8.9

RATIOS Rerurn on

average

ASKARI BANK LIMITED. PERFORMANCE OF FIVE YEAR.

TOTAL LOAN *100 ------------------TOTAL DEPOSIT

LOAN TO DEPOSIT RATIO Total loans Total deposits Ratios

(RS. 000) 2009 13,378 131,839 10.14723%

(RS.000) 2008 9,778 118,795 8.23099%

116

askari bank

Analysis shows an increase in loan and also increase in the deposit but the rate of increase of deposit is greater than that of loans.

TOTOAL EXTERNAL DEBT -----------------------------------------TOTAL INTERNAL DEBTS

DEBT EQUITY RATIO TOTAL EXTERNAL DEBT TOTAL INTERNAL DEBT RATIOS

(RS.000) 2008 11,053 1,507 7.334

(RS.000) 2009 8,813 2,004 4.3977

This ratio depicts the relationship between equity and debt financing. This current year ratio shows decrease in ratio from above times. Because lesser is equity financing lesser will be the soundness of the bank. The reason behind this decrease is a decrease in external borrowings and increase in internal debt aslso but rate of increase in internal borrowing is greater. It is necessary to keep the bank fund up to 40 % as reserve.

PROFIT AFTER TAX

X 100

------------------------------------------TOTAL NO. OF EQUITY SHARES

117

askari bank

EARNING PER SHARE PROFIT AFTER TAX TOTAL NO OF OUTSTANDING EQUITY SHARE RATIOS

(RS.000) 2009 2,249,974 200,4333

(RS.000) 2008 2,021,996 2665455

11.23%

9.42%

This ratio is telling that is in the current year 2009 profit has increased and that is why earning per share has also increased. Its mean that the profit will be directly influence on the earaning per share This ratio indicates that what is the earning on each share of the company, which is issued by the company. If there will be more earning, then shareholders will take interest in the company and willing to invest in it. Earning per share is high in both years. It means that shareholders are interested in the company and they would like to invest more and more in the company.

FPROFIT AFTER TAX _____________________ * 100 TOTAL ASSETS

Return on assets Profit after tax

(RS. 000) 2009 2,249,974

(RS. 000) 2008 2,021,996

118

askari bank Total assets

166,033 1.4%

145,099 1.6%

. This ratio shows that the return is greater in 2008 as compared to return in assets in the year 2009. Although interest and discount on loans which is the major source of revenue for bank has increased in 2009 as compared to last year but cost on deposit and borrowing which is the major expenditure of bank has increased more in the current year than the last year. Return on shareholder fund

PROFIT AFTER TAX ------------------------------------- * 100 SHAREHOLDER FUND RETURN

ON

(RS. 000)

(RS. 000)

2009 2,249,974 11053230

2008 2,021,996 11698891

20.35

17.28

SHAREHOLDER FUND PROFIT AFTER TAX SHAREHOLDER FUND RATIOS

This ratio is a further explanation of the above ratio. In 2009 profit after tax has increased and on the other hand its denominator shareholder fund has decreased due to reserve fund and other reserves. Therefore both the factors are responsible for this ratio.

Loan to Assets Ratio

TOTAL LOANS -----------------------

* 100

119

askari bank Total assets

Loan

to

assets

(RS. 000)

(RS. 000)

2009

2008

3000 166,033 1.80%

2999 145,099 2.06%

ratios Total loans Total assets Ratios

Total assets of bank increased in 2009 as compared to 2008 and have % increase in assets , which has resulted in an increase in loan but to shorter extent. Therefore the net result is decrease in the loan to assets ratio in 2009. Equity Ratio:

SHAREHOLDER FUND ------------------------------------ * 100 TOTAL ASSETS Equity ratio

(RS.000) 2009 11,053 166,033 6.65711%

Shareholder fund Total assets Ratios

This

ratio

explain

that

participation

(RS.000) 2008 8813 145,100 6.07374%

in

the

assets

by

the

shareholder funds is limited by outsiders fund when we take year under review. (2009) we see ratio has increased in 2009 as

120

askari bank

compared to the year 2008. Reason behind this is that increase in assets is financed by outsiders fund rather than the fund provided by the shareholders.

INTEREST INCOME

*100

---------------------------------------TOTAL LOAN

RATE

OF

RETURN

(RS.000)

(RS.000)

2009 12,597 2999 4.20%

2008 8,781 3000 2.927%

ON LOAN Interest income Total loan Ratios

Here we are watching very interesting situation as there is decrease in interest income in 2008 and ratio has also deceased , reason is that interest has decreased but amount of loan has increased resulting in decrease in return on loan.

EQUITY CAPITAL TO ASSETS

Equity capital -----------------------TOTAL ASSETS

* 100

121

askari bank EQUITY CAPITAL TO

(RS. 000)

(RS. 000)

2009 2004 166033 1.20%

2008 1507 145,100 1.038%

ASSETS EQUITY CAPITAL TOTAL ASSETS RATIOS

In the current year banks assets have been increased from Rs. 145100 (billion ) to Rs.166033 (billion). so, this is the reason that ratio equity to assets has increased in 2009. Denominator total assets have increased substantially during the year 2009 and increase in equity capital resulted in increase in this ratio. A special batch of qualified, energetic, high caliber and qualified young with good academic records is also hired as Management Trainee Officers (MTOs) on annual basis with an aim to nurture high-talented lot of future



 STRENGTHS ASKARI BANK one of the largest financial institutions of Pakistan with eight million of customer base ASKARI BANK holds 24.6% share of time and demand deposits in the country. Local currency deposits comprise 67% of bank's total deposits while foreign currency deposits account for the rest.



ASKARI BANK has an extensive domestic branch network of 1200 (according to the latest data) branches located all over Pakistan. The Bank also has a presence in 19 international locations including the USA, United Kingdom, Europe and the Far East.



ASKARI BANK 's total assets stood at Pak Rs.370 billion on December 2004. This included total earning assets of about Pak Rs.268 billion with gross loan portfolio of Pak Rs.140 billion. The bank also has an investment portfolio of Pak Rs.91 billion, which comprises treasury securities, corporate bonds, shares and other securities.

askari bank

122



ASKARI BANK cash provision as percentage of non performing loans equal to 60% this coverage factor for the non performing loans is the highest amongst the nationalized commercial bank.



ASKARI BANK is working as right arm government of Pakistan as it is responsible for all claims of government for recovery as well as payment. All depositor of ASKARI BANK are in relief that their money security is guaranteed by government of Pakistan.



It acts as an agent of the Central Bank wherever the State Bank does not have its own Branch.

 WEAKNESSES 



ASKARI BANK staff especially at lower considers their work as burden. They usually waste time in other task a part in performing their duty. Using government property for there own need. They are reluctant to accept change brought by latest restructuring efforts. The general out look and interior layout of branches are not as required according to modern banking



ASKARI BANK bearing up large burden in running those branches, which are not producing any income but keep on adding expenditure.



ASKARI BANK is relying on its traditional sources of income it has not taken benefit from innovation in banking like introducing retail banking or consumer banking and using any type of scheme to generate more deposits and producing more advances. Further, more don’t even continue its credit card due mismanagement and lack of control.



ASKARI BANK is far behind in offering modern banking facility like automated teller machines then other commercial bank in Pakistan as only eighteen branches in all over country have this facility.



ASKARI BANK has only forty-four on line branches. While from remaining branches data gathering is time consuming, and not fool proof. Quantum of settlement within different branches is pending because of this updating daily record is becoming very difficult.



Customers have to fallow long lengthy procedure for opening of account as well applying for debt. Which discourage most of the people to invest in ASKARI BANK .



In ASKARI BANK , most of the time merit not has importance in hiring of employees. Such practices are black spot on the face of bank and resulted big losses and fraudulent acts by ASKARI BANK own employees.

askari bank

123

 OPPORTUNITIES  Reorganizing efforts going on in the ASKARI BANK has open many opportunities for ASKARI BANK to grow. ASKARI BANK current management has boarder vision. They have taken steps to improve customer services, streamline internal procedure and creating a delectating climate for technology initiative. To achieve above mention objective they have created operation group Starting of the retail banking initial working.

  

Setting of target for of making at least 300 branches country wide on line.



Closing of all those branches, which are burden on ASKARI BANK .



Management to offer specialized services to major corporate including advisory and debt syndication introduces the concept of relationship manager.



Comprehensive training programs has been develop to up grade the core banking skills of the existing staff as well as integrate high quality hiring.



To improve the motivation of staff a merit-based culture is being promoted. Through overhauling the manpower recruitment preservation and performance appraisal system. These actions taken by current management provide a great opportunity for ASKARI BANK for making it future prosper and can make ASKARI BANK not less than any modern commercialize bank in Pakistan.  THREATS

Following are the major threats which Askari Bank is facing: 

Major threats ASKARI BANK facing is from its competitor especially from denationalized commercial bank. In which MCB is on the top of the list, The Bank provides 24 hour banking convenience with the largest ATM network in Pakistan covering 15 cities with over 100 ATM locations.



Retail banking and consumer banking resulting in the products such as credit cards, housing finance and automobile finance lending to small individual consumers, and purchases of automobiles, housing, and consumer goods are generally made on a cash basis. These are

124

askari bank 



causing another threat, if not counter will result in significance loss of customers Recently banks and other financial institutions have introduced innovative schemes to attract deposits, like gift cheque scheme by MCB. These schemes offer prizes on short and long term fixed deposits, through lucky draws. Now banks are using technology which covers the distance no matter how far away any one, through a satellite based, on-line real-time banking system and by offering telephone banking, electronic funds transfer, E-Banking and other modern facilities.

RECOMMENDATIONS It was an interested experience to do internship in Askari Bank . The staff was highly cooperated and due to their help I learned big deal about modern banking. I suggest that such an internship program highly integrative for the students of commerce education so that the students should be enquired with the knowledge of practice world .I do summarize that it would be a great help to me in selection of job or future field of work. Here I am putting some suggestions, which will enable the bank to compete with other banks more effectively & efficiently.  It is observed that the employees were overburdened so they have to stay at branch till late at night. In this way their efficiency is affected and hiring more employees can reduce their work.  The employees should be signed jobs for specific period and than they should shifted to other department so that they gain knowledge of other jobs.  The Askari Bank should properly advertise and Communicate to public about the services provided by it, so that more customers will be attracted.  The bank’s management should give more incentives and pay scale of officers should be revised & improved.  System and operations should be more defined and organized.  IT draw backs should be improved.

125

askari bank

 Administration drawbacks should be improved by the strict control of general issues.  Some employees waive the bank charges (Statement charges, cheque book charges etc) that decrease the income of the bank.  Lockers, ATM, all these facilities should be provided to attract more customers.  Expenditures must be control, which are very high.

SUMMARY Askari Bank is a good Organization in the way that anybody can join it for his/ her long-term career. Overall working environment is comfortable. Management of branch cares a lot of its employees and considers them as the Asset of bank. Behavior of senior executive of bank is very polite and they are caring about the individual’s career and their growth. However management is very demanding about the targets but good reward at the achievement of assigned targets is awarded. Employees at Askari Bank are quite efficient. Therefore, they work more than their working hours and it is all according to their will. It also shows their loyalty, commitment to organization. Employees are given the benefits like bonus, gratuity funds, loans, increments, and medical. All the customers are entertained individually. Same kind of behavior and attention is given to all the customers. Getting ideas for improvement from customer side is a new idea and that is working very

126

askari bank

well in Askari Bank . All the customers are asked to fill a suggestion form and the standards of the bank are improved through them. Prioritizing its product portfolio in line with its corporate and consumer needs and wants the bank is committed to develop products that give more value to its customers in both the sectors. In bank, all the work is done on computers. All the entries are made in computer. Askari Bank ance are fed into the computer. This increases efficiency of the bank. During my internship training I gathered information regarding how a successful bank operational aspects decorticated with the practical. I found my internship training a very rewarding experience. The training was beneficial because it helpful me to aware a real life working environment. So far my learning is concerned; all the employees at branch were quite cooperative. They helped me to understand the activities of a bank to possible extent. Their good attitude gave me more confidence to learn more and to ask if I have any query in my mind. Besides their ever going activities they never get irritant by my questioning. I had made an honest efferent to present the working & operation of Bank in simplest way. I feel pleasure that I have really gained a lot during 6 weeks & enjoyed working with experienced cooperative & intelligent staff.

REFERENCES

 MALIK RIZWAN HAIDER Branch Manager  FARUKH MEHMOOD Operations’ Manager  GHULAM HABIB CD Incharge