askari bank

Internship Report Askari Commercial Bank

EXECUTIVE SUMMARY:

The Department of Management Sciences was established in 2001 and offers

Bachelors and Masters degree in Business Administration. They are giving the best

education and are offering for specialization, financial management, marketing,

human resource management and computer application to business. An important

programmed is six to eight weeks internship with any recognized organization.

I decided to take up Askari Commercial Bank Limited for my internship because its

competing bank nowadays and gives a good training to the internees. So in order to

learn more this was my choice.

This report is about my internship that I have undergone at Askari Commercial Bank

Limited Multan Branch from 15th July 2006 to 26 August 2006.. During my internship

I am able to learn practical aspect of business, and get good working experience.

On the very first day of my internship I reported to Human Resource Manager /

Operation Manager Mr. Shoukat Hayat Babar. He gave me small introduction of the

bank and introduced me to the staff of the bank. Every internee is rotated among the

bank’s departments and so was I. This rotation is done in order to have general

concept regarding bank’s functions, operations and policies. In this rotation the stay

in department is usually a week. I have learned more about the Bills and Foreign

Trade department and have given below the caption of activities I was involved in

during the period of six weeks.

During my internship I found that Askari Commercial Bank is a best bank in Multan

because most of the Exports and Imports in Multan are done through this bank.

Multan is one of the cotton growing cities of Pakistan. Most of the businesses in

Multan are directly or indirectly linked to cotton that is also the case with Askari

Commercial Bank’s clients. Because Multan is a Agricultural City, and its major

export is Cotton and Mango. So its export is done on seasonal basis. In the season

of cotton and Mango export Askari Commercial Bank get its target easily but difficult

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for it to get its target in the off season. Same with the case of imports, in Multan

major imports is Oil Seeds, which is also done on seasonal Basis.

Low profit rates are one of the major reasons for not meeting the deposit targets.

The profit rates on Askari deposit schemes are quite low when compared with other

banks especially with the National Saving Centers. In today’s every customers is the

rational customer he knows the value of money and wants a best return on his

money.

Earlier Askari Commercial were able to attract customer due to their anxillury

services like ATM Cards, Credit Cards, Online Banking etc. but now all the banks are

offering these services through their own network or through third party contracting,

so our plus points are no more our advantages. So the only thing through which

ACBL can increase their deposits are profit rates, because the customers only want

maximum profit on their investment.

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INTRODUCTION

Definition of Bank

There are large number of definitions which are offered by the different authors

keeping view the various definitions we may define the bank in the following words.

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“A Bank is reliable financial institution which receives the money from one group of

people and lends to other group of people”. So bank performs the duty of financial

intermediary among the people and creates the credit money.

Bank Origin

There are different views about origin of the world “Bank”. According to some people

the word “Bank” is derived from the world “Bancus” which means a “Bench”. They

argue their point by this transacted their business of money exchange on the

benches. If the business of any businessman failed, his bench was destroyed by the

people. Due to this practice the word “Bankrupt” was also used.

On the other hand some people say that the world “Bank” is derived from German

time the word “Bank” was replaced by the word “Bank” which is called “Banco” in

Italian language.

Evolution of Banking

The history of banking evolution is very interesting. In the early ages human like and

wealth was not secure. Due to fear of loot-mar and theft people buried their wealth

under land but this method was not satisfied. People started to search the

custodians of wealth. The evolution of banking started and it has crossed the

following stages.

First Stage of Evolution

After a great struggle people succeeded in finding the reliable persons to deposit

their money and valuable goods for safety. These people were goldsmiths. These

were considered the most trusted persons due to their sounds financial position. On

the other hand they had a very strong iron safes for keeping gold, money and other

valuable items. People started depositing their gold and cash in the safe of

goldsmiths. Goldsmiths charged something for this purpose and they returned the

depositors their money whenever they needed banking evolution and goldsmith were

the early bankers.

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Second Stage Of Evolution

During this period those receipts which were issued by the goldsmiths against the

valuables goods were being used as a medium of exchange by the merchants.

People purchased the various things from the traders against their receipts against

the payments. So the receipts were used like the bank cheque of the modern age.

Third stage of Evolution

This period started at that time when goldsmiths came to know by the experience

that people are using their receipts as medium exchange and very few people

demand their deposits. So they reach to the conclusion that they may lend some

portion of their total deposits to some other people and they can earn profit.

Goldsmith started the business of lending. They also started paying interest to attract

the depositors of net cash. Now this business became very profitable, so the traders

and money lenders also jumped in this field.

Fourth Stage of Evolution

It was started at that time when people were tempted to deposit more and more cash

to the traders, money lenders and goldsmiths to earn maximum interest. On other

hand number of borrowers also increased borrowing the money. So for the

borrowing and lending business regular institutions came in to being.

In the present age bank is modernized shape of those institutions. But to earn more

profit every bank started issuing overdraft facility without maintaining adequate cash

reserves to meet the demands of the depositors. This inability created the financial

crises. Now to maintain the good will of the banks perform their duties. All the

commercial banks perform their duties keeping in view the instructions of the Central

Bank.

Keeping in view the above discussion about the evolution of bank we can say that it

is the result of the different activity of goldsmiths, merchants and money lenders.

They are the real founders of modern banking business. All the basic functions of

modern bank like accepting are similar with the founders. Now with the changing

business requirements the secondary functions of banks have been changing with

the passage of time.

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Growth of Banking in Pakistan

The entire banking business was controlled by the non-Muslims before the partition

of the sub-continent. When Hindu’s became sure about the divisions of the sub

continent, they secretly began to transfer their capital to the safe places in India. The

funds and other valuables were transferred to India.

Time of Independence

Hindus migration from Pakistan to India also caused drain on the bank deposits. In

order to run the economy of Pakistan. Hindu’s closed down most of the head offices

and branches of the scheduled and non scheduled banks in Pakistan.

At the time of independence there were only two Pakistani banks, that is Habib Bank

and Australasia Bank. At the time, Pakistan had 631 branches of scheduled banks

and 411 of no-scheduled banks. The total deposits of Pakistan banks were Rs. 800

million and advances were 198 million, the non-scheduled banks number reduced

from 411 to 106 over the same period.

The mass scale withdrawal of deposits closure of branches and migration caused a

deadlock in the banking business in Pakistan.

Keeping in view the above situation government of Pakistan took various steps to

provide all kinds of facilities to the non-Muslim bankers for restoring normal banking

facilities but response was not encouraging.

Establishment of State Bank

After independence it was not possible Sc-r Pakistan to set up the Central Bank

immediately. The Reserve Bank of India acted as a Central Bank of Pakistan till 30th

September 1948. But it could not protect the interests of Pakistan.

To remove the financial difficulties and to establish sound banking system Govt.

established the State Bank on 1st July 1948. In the development, to banking system

it played very important role as a Central bank of the country.

Banking sector in PakistanBanking sector in Pakistan

No economy can grow and improve the living standards of its population in the

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absence of a well functioning and efficient financial sector. Banks in Pakistan

account for 95 percent of the financial sector and hence good health of banks is

directly related to economic growth and development of Pakistan. What was wrong

with the Pakistani banking system that such massive reforms had to be undertaken?

Banks in Pakistan have been catering basically to the needs of the Government

organizations, subsidizing the fiscal deficit, serving a few large corporations and

engaging in trade financing. There was no lending to small and medium enterprises,

to the housing sector or to the agricultural sector, which create most of the growth

and employment in Pakistan. Most important, the financial system suffered from

political interference in lending decisions and also in the appointment of managers.

The middle class which is the backbone of any Reproduced from Blue Chip – The

Business People’s Magazine - January 2005 economy was not given due attention

by the banking sector. There were legitimate reasons for such an errant behavior.

First, the government’s fiscal deficit was so high that most of the deposits the banks

used to get, were loaned to the government and government corporations. This was

safe lending which fetched good returns and the banks made good profit out of it.

Naturally, there was little incentive for them to do anything else except lend to the

Government which was both risk free and highly remunerative. Secondly, the

government owned most of the banks. In the government banks the staff worked like

typical government employees, coming to office at 9:00 a.m., checking files; having

nothing important to do and leaving at 5.00 p.m. without doing much work. These

banks suffered from a high bureaucratic approach, overstaffing, unprofitable

branches and poor customer service. Administrative costs were high reducing profits

of depositors. Thirdly, recovery rate was so low that almost 25% of the loans were

stuck up as a large number of loans to the private sector borrowers were not given

on the merit of the proposal but on political considerations. These influential

borrowers hardly repaid their loans. Fourth, banking industry faced a high tax rate of

58 percent while the rest of the corporate sector paid only 35 percent. This high

punitive rate along with the burden of stuck loans and inefficiency of the staff was

passed on to the customers in form of high lending rates and low deposit rates. The

banking industry was not attractive for new entrants who could foster competition

and improve efficiency. Because of these factors, i.e. high administrative costs,

burden of stuck-up loans and excessive tax rates, the average interest rate for

lending was about 21% per annum. The middle class borrowers could not afford to

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get credit on such high interest rates and pay it back. Banking sector reforms were

thus needed badly to address these and other constraints so that the banks could

play their due role in the economic development of the country. Although, there is no

room for complacency and a lot still needs to be done, even the worst critics of this

government do concede that if there is one sector which has undergone basic

transformation that is the banking sector. The IMF and the World Bank who are not

always very generous or effusive in their praise had this to say about the Banking

sector in Pakistan after completing a comprehensive and thorough review in early

2004. Quote: “far reaching reforms have resulted in a more efficient and competitive

financial system. In particular, the pre-dominantly state-owned banking system has

been transformed into one that is predominantly under the control of the private

sector. The legislative framework and the State Bank of Pakistan’s supervisory

capacity have been improved substantially. As a result, the financial sector is

sounder and exhibits an increased resilience to shocks”

Privatization of NCBs

All the nationalized commercial banks, except one, have been privatized. As a

consequence their domination of the banking sector has been reduced from almost

100 percent in 1991 to about 20 percent by June 2004. Even in the case of National

Bank of Pakistan 23.5 percent shares have been floated through Stock Market

mainly aimed at small retail investors.

Corporate Governance

Strong corporate governance is absolutely essential if the banks have to operate in a

transparent manner and protect the depositors’ interests. The SBP has taken several

measures in the last four years to put in place and enforce good governance

practices to improve internal controls and bring about a change in the organizational

culture.

Capital Strengthening

Capital requirements of the banking sector have to be adequate to ensure a strong

base, ability to compete and withstand unanticipated shocks. The minimum paid- up

capital requirements of the banks have been raised from Rs 500 million to Rs 1

billion and have again been raised to Rs. 2 billion (by December 31, 2005). This has

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already resulted in mergers and consolidation of many financial institutions and

weeding out of several weaker banks from the financial system.

Improving Asset Quality

The stock of gross non-performing loans (NPLs) that amounted to Rs 252 billion and

accounted for 22 percent of the advances of the banking system and DFIs has been

reduced to Rs. 225 billion i.e. 14 percent of advances. More than two-thirds of these

loans are fully provided for and net NPLs to net advances ratio has come down to as

low as 5 percent for the commercial banks. The positive development is that the

quality of new loans disbursed since 1997 has improved and recovery rate is 95

percent.

Liberalization of Foreign Exchange Regime

Pakistan has further liberalized its foreign exchange regime and set up foreign

exchange companies to meet the demands of Pakistani citizens. Pakistani Corporate

sector companies have also been allowed to acquire equity abroad. Foreign

registered investors can bring in and take back their capital, profits, dividends,

remittances, royalties, etc. freely without any restrictions.

Consumer Financing

By removing restrictions imposed on nationalized commercial banks for consumer

financing, the State Bank of Pakistan has given a big boost to consumer financing.

Middle class employees can now afford to purchase cars, TVs, air- conditioners,

VCRs, etc. on installment basis. This, in turn, has given a large stimulus to the

domestic manufacturing of these products.

Mortgage Financing

A number of incentives have been provided to encourage mortgage financing by the

banks. The upper limit has been raised from Rs 5 million to Rs 10 million. Tax

deduction on interest payments on mortgage have been allowed up to a ceiling of

Rs.1 million. The new recovery law is aimed at expediting repossession of property

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by the banks. The banks have been allowed to raise long term funds through rated

and listed debt instruments like TFCs to match their long term mortgage assets with

their liabilities.

Legal Reforms

Legal difficulties and time delays in recovery of defaulted loans have been removed

through a new ordinance i.e. The Financial Institutions (Recovery of Finances)

Ordinance, 2001. The new recovery laws ensures the right of foreclosure and sale of

mortgaged property with or without intervention of court and automatic transfer of

case to execution proceeding. A Banking Laws Reforms Commission is reviewing,

revising and consolidating the banking laws and drafting new laws such as

bankruptcy law.

Prudential Regulations

The prudential regulations in force were mainly aimed at corporate and business

financing. The SBP in consultation with the Pakistan Banking Association and other

stakeholders has developed a new set of regulations which cater to the specific

separate needs of corporate, consumer and SME financing. The new prudential

regulations will enable the banks to expand their scope of lending and customer out

reach.

Micro Financing

To provide widespread access to small borrowers particularly in the rural areas the

licensing and regulatory environment for Micro Credit and Rural financial institutions

have been relaxed and unlike the commercial banks these can be set up at district,

provincial and national levels with varying capital requirements. There is less

stringency and more facilitative thrust embedded in the prudential regulations

designed for this type of institutions. Khushali Bank and the First Microfinance Bank

in the private sector have already started working under this new regulatory

environment. Khushali Bank has already reached a customer base of 125,000

mainly in poorer districts of the country and its recovery rate is above 95 percent.

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SME Financing

The access of small and medium entrepreneurs to credit has been a major constraint

to expansion of their business and up gradation of their technology. A Small and

Medium Enterprise (SME) Bank has been established to provide leadership in

developing new products such as program loans, new credit appraisal and

documentation techniques, and nurturing new skills in SME lending which can then

be replicated and transferred to other banks in the country. Program lending is the

most appropriate method to assist the SME financing needs. The new prudential

regulations for SMEs do not require collateral but asset conversion cycle and cash

flow generation as the basis for loan approval. The State Bank is also contemplating

to develop capacity building among a select group of banks for SME lending. This

will revitalize the lending to SMEs particularly export oriented ones.

Taxation

The Government has already reduced the corporate tax rate on banks from 58

percent to 41 percent during the last four years and it is envisaged that the rate will

be reduced gradually and brought at par with the corporate tax rate of 35 percent in

the next two years. This will, in turn, help in reducing the spread between the deposit

rate and lending rate and benefit financial savers.

Agriculture Credit

A complete revamping of Agriculture Credit Scheme has been done recently with the

help of commercial banks. The scope of the Scheme which was limited to production

loans for inputs has been broadened to the whole value chain of agriculture sector.

The broadening of the scope as well the removal of other restrictions have enabled

the commercial banks to substantially increase their lending for agriculture by a

multiple of four times compared to FY 1999-00 thus mainstreaming agriculture

lending as part of their corporate business. Unlike the previous years when they

were prepared to pay penalties for under performance they have achieved

consistently rising higher targets every year. The private commercial banks have

also agreed to step in and increase their lending to agriculture.

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Islamic Banking

Pakistan has introduced Islamic banking system to operate in parallel with the

conventional banking providing a choice to the consumers. A large number of

Pakistanis have remained withdrawn from commercial banking because of their

strong belief against riba-based banking. These individuals and firms – mainly

middle and low class – will have the opportunity to invest in trade and businesses by

availing of loans from Islamic banks and thus expand economic activity and

employment. A full-fledged Islamic bank has already opened the doors for business

and several banks have branches exclusively dedicated to Islamic banking products

and services. The State Bank of Pakistan has set up a full-fledged Islamic Banking

Department and a Shariah Advisory Board to help it in the promotion of Islamic

banking in the country.

E-Banking

There is a big surge among the banks including NCBs to upgrade their technology

and on-line banking services. During the last three years there has been a large

expansion in the ATMs and at present about 700 ATMs are working throughout the

country. The decision mandating the banks to join one of either two ATM switches

available in the country has provided a further boost. Progress in creating automated

or on-line branches of banks has been quite significant so far and it is expected that

by 2005 almost all the bank branches will be on-line or automated. Utility bills

payment and remittances would be handled through ATMs, Kiosks or Personal

Computers reducing both time and cost.

Human Resources

The banks have recently embarked on merit-based recruitment to build up their

human resource base – an area which has been neglected so far. The private banks

have taken lead in this respect by holding competitive examinations, interviews and

selecting the most qualified candidates. The era of appointment on the basis of

sifarish and nepotism has almost come to an end as the private owners want to

attract and retain the best available talent which can maximize their profits. This new

generation of bankers will usher in a culture of professionalism and rigour in the

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

future.

Credit Rating

To facilitate the depositors to make informed judgments about placing their savings

with the banks, it has been made mandatory for all banks to get themselves

evaluated by credit rating agencies. These ratings are then disclosed to the general

public by the SBP and also disseminated to the Chambers of Commerce and Trade

bodies. Such public disclosure will allow the depositors to choose between various

banks. For example, those who wish to get higher return may opt for banks with B or

C rating. But those who want to play safe may decide to stick with only AAA or AA

rated banks.

CURRENT NATIONAL BANKING PORTFOLIO

Banks are very important institutions in a society. They play an important role in

carrying out economic transaction in a healthy commercial society. The economic

growth and activities depend on good banking services in a country. They help in

smooth flow of economic blood of a country.

The financial sector in Pakistan can be presented as:

Banking Sector.

Non-Banking Sector.

Banking Sector:

Banking sector comprises the following:

Public scheduled Banks

Private sector Banks

Foreign Banks.

Non-Banking Sector:

Non-banking sector comprises the following:

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Development finance institutions (DFIs)

Private sector banks

Investment banks.

Leasing companies.

The large public sector scheduled commercial banks, namely

National Bank of Pakistan.

Habib Bank Ltd.

United Bank Ltd.

These banks are dominant in term of number of branches but in term of profits these

banks are not as much profitable as are the private or the foreign banks.

The private sector banks are relatively new when compared to public sector banks.

These includes:

Askari Commercial Bank Ltd.

Bank Al-Habib Ltd.

Bank Al-Falah Ltd.

Soneri Bank.

Bolan Bank.

Union Bank.

Platinum Commercial Bank. Etc.

These banks have still very small network of branches and level of operation. They

focus on very selective market segment where they are quite successful. So for as

there profit proportion is concerned they are gaining handsome profits.

Owing to the inefficiencies of public sector scheduled banks and lower standing of

private sector banks and dollarization of the economy, foreign banks started

performing their operations in Pakistani market. There are about 20 foreign banks

operating in the country:The most important are

ABN Amro Bank Ltd.

American Express Bank Ltd.

Standard Chartered Bank

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Deutsche Bank AG

Habib Bank AG Zurich

Al-Baraka Islamic Investment Bank

CITIBANK N.A. (KARACHI)

RUPALI BANK LTD. (KARACHI)

The Bank of Tokyo Mitsubishi Ltd.

Hong Kong and Shanghai Bank

Oman International Bank S.A.O.G.

Army Welfare Trust

Army welfare trust was established namely for the welfare of army officials. The

office of Army welfare trust is situated at AWT PLAZA Rawalpindi. AWT offers the

“AWT Saving Scheme” to the army officials only. AWT has further as units.

1. Askari Associates

2. Askari leasing

3. Askari general

4. Private businesses

5. Textile mill

6. Cement industry

7. Askari commercial bank

Askari associates deals with the share holding. Askari General Insurance Askari

Leasing are registered at stock exchanges. Cement industry, firstly produced

“Nizam Cement”.

ASKARI COMMERCIAL BANK LTD

Askari commercial bank limited was incorporated on October 09, 1991 as a public

limited company, and is listed on the Karachi, Lahore and Islamabad stock

exchanges. The bank obtained business commencement certificate on February 26,

1992 and started operations from April 01, 1992. Askari commercial bank is a

scheduled commercial bank and is principally engaged in the business of banking as

defined in the banking companies ordinance, 1962.

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Askari commercial bank limited continued to scale new heights in all areas of its

operations. The safety and security of depositor’s funds, high productivity, and

optimum use of technology are the hallmarks of its corpora to strength.

ACBL is the first and so far the only Pakistani bank in private sector to have been

rated as A1 + (for short term category) and A+ (for long term category) by PACRA

Pakistan credit rating agency (Pvt.) Ltd. The rating of A1+ is the highest in the short

tem category and stands for “obligations supported by the highest capacity for timely

repayment”.

In 1994 ACBL earned international recognition as Asia money award and the title of

“best commercial bank of Pakistan for the year 1994” while euro money declared the

bank as “best domestic bank of Pakistan for the year 1995”.

A financial institution has to given due emphasis to its network expansion

because with the passage of time the graph of growth through existing network

attains the point of saturation ACBL has its head office in Rawalpindi. In view of

deteriorating operating environment, bank slowed down the expansion plan and

added one branch in 1998 making the total number of branches 30. Now in 2006

there are 30 branches of ACBL in all over the Pakistan.

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Comparisons with other banks in the Industry

Banks

Year of

Incorpor-

ation

Share

Capital

(Rs.000’s)

No. of

Branches

Total

Deposits

Rs.million

Total

Advances

Rs.million

Net Profit

Rs.million

After tax

Earning

per

share(Rs.)

Bank Al-

Falah

Limited

1992 3000000 156 222345 118864 1702 5.75

Askari

Commerci

al Bank Ltd

1991 1507018 100 118798 85977 2022 13.42

Union

Bank Ltd 1991 812,151 40 91186.52 68969.40 715.21 6.21

THE MISSION

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As it is said that an organization’s culture, products, services, employees,

their attitude, philosophy, self-concept, markets and environment throws light on the

corporate mission, so one of the business executives at the bank, based on his

personal observation and judgment, carved the following mission of The Askari

Commercial Bank Limited as

“ To be the leading private sector bank in Pakistan with an international

presence, delivering quality service through innovative technology and

effective human resource management in a modern and progressive

organizational culture of meritocracy, maintaining high ethical and

professional standards, while providing enhanced value to all our

stakeholders, and contributing to society”.

Objectives & Core Values

The intrinsic values, which are corner stones of our corporate behavior, are:

Commitment

Integrity

Fairness

Team-work and

Service

Inspiring Relationships

From knowing our customer requirements to understanding employee needs,

from utilizing modern technology to making responsible social contributions, from

enhancing stake-holders value to practicing corporate ethics…….We are

continuously and consistently striving to address newer challenges with a single

motivation:

“the power to inspire and be inspired”

Code of Business Principles

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Our Code of Business Principles is to:

Deliver solutions that meet customers’ financial needs

Build and sustain a high performance culture

Build trusted relationships with all stakeholders

Build and manage the Bank’s portfolio of businesses to achieve strong and

sustainable shareholder returns

Create and leverage strategic assets and capabilities for competitive

advantage

Inspiring Relationships

Inspiring 250,000 relationships

Knowing our customers and their needs is key to our business success.

Our products and services are as diverse as our market segments. Our client

relationship managers are well equipped and well trained to provide the most

efficient and personalized service to the customers. We have structured and

syndicated financing arrangements, provided working capital and balancing-

modernization replacement (BMR) facilities, financed international trade, provided

small business loans, cash management services, and developed innovative

investment and loan products for the individual savers and households. Askari Bank

is proud of its pioneering role in providing the most modern and technologically

advanced services to its 250,000 relationships.

Inspiring employee relationships

We strongly believe that the interests of the bank and the employees

are inseparable. At Askari we try to create a ‘we’ culture where there is mutual trust

and respect for each other. We encourage ownership behavior so that everyone

feels responsible for the performance and reputation of the Bank. We are committed

to develop and enhance each employee’s skills and capabilities through extensive

in-house and external training programs and job rotations. The strong employee-

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bank relationship is evidenced by the fact that Askari has one of the lowest

employee turnovers. Most of the top management today has reached their present

positions by growing within the organization.

Inspiring technological innovation

Technology has played a pivotal role in meeting customer

expectations, particularly with respect to speed and quality of service. We have fully

automated transaction-processing systems for back-office support. Our branch

network is connected online real time and our customers have access to off site as

well as on site ATMs, all over Pakistan. Our Phone Banking Service and Internet

Banking Facility allows customers to enjoy routine banking services from anywhere

anytime in the world.

Inspiring ethical values

Integrity is the most valued standard in whatever we do. We understand that

our commitment to satisfy customers’ needs must be fulfilled within a professional

and ethical framework. We subscribe to a culture of high ethical standards, based on

the development of right attitudes.

Inspiring corporate citizenship

Inspiring corporate citizenship: We have made useful contributions in the

areas of sports, culture, poverty alleviation, health and medical sciences, education

and scientific research.

Inspiring growth

For us the challenge is to build a foundation of strong, consistent financial

performance and focus on growing our balance sheet and revenues at low risk.

During the year, we opened ten new fully automated branches, increasing our

branch network to 46. Central to our growth strategy is a focus on specialization and

transformation. We are reshaping our portfolio of businesses by investing in higher

growth areas, extending and developing our core competencies and moving out of

weak and non-core segments.

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Inspiring shareholder confidence

We believe that the bottom line of any business is creating shareholder

value. To gain their trust and confidence, we believe in providing our shareholders

timely, regular and reliable information on our activities, structure, financial situation

and performance. At the same time, we try to give them one of the best earnings per

share in the banking industry of the country.

VISION STATEMENT

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

CORPORATE INFORMATION

Board of Directors

Lt. Gen. Waseem Ahmad Ashraf Chairman

Lt. Gen. (R) Zarrar AzimChairman Executive

Committee

Mr. Kalim-ur-Rahman President & Chief Executive

Brig (R) Muhammad Shiraz Baig Director

Brig (R) Muhmmad Bashir Baz Director

Brig (R) Asmat Ullah Khan Niazi Director

Brig (R) Shaukat Mahmood Chaudhari Director

Mr. Kashif Mateen Ansari Director

MrZafar Alam Khan Sumbal Director

Mr. Muhmmad Afzal Munif,FCA Director

Mr Muhammad Afzal Munif ,FCA Director

Mr Tariq lqbal Khan,FCA Director (NIT Nominee)

Mr. Saleem Anwar, FCA secretary

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Auditors

A. F. Ferguson & Co. Chartered Accountants

Legal Advisors

Rizvi, Isa, Afridi Angell

Registrar & Share Transfer Office

M/s THK Associates (Private) Limited

Ground Floor, Modern Motors House,

.Beaumont Road, Karachi, 75530

P.O. Box No. 8533, Karachi

Tel: (92 21) 5689021, 5686658, 5685681

Fax: (92 21) 5655595

Registered Office/Head Office

AWT Plaza, The Mall,

P.O. Box No. 1084,

Rawalpindi - Pakistan.

Tel: (051) 9272150-53

Fax: (051) 9272455

Web Site: www.askaribank.com.pk

Organizational Chart

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ExecutiveCommittee

ExecutiveCommittee Internal

Audit

Internal

Audit

http://www.askaribank.com.pk/


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President &Chief

Executive

President &Chief

Executive

Corp.

Banking &

Fin. Group

Corp.

Banking &

Fin. Group

Operating &Credit Group

Operating &Credit Group

RegionsRegionsRetail

BankingGroup

Retail BankingGroup

Credit Cards

Credit Cards

InternationalInternational

TreasuryTreasury

CreditCredit Rawalpin

di/

Islamaba

d

Rawalpin

di/

Islamaba

d

Asset

Products

Asset

Products

Planning &Corp. Affairs

Planning &Corp. Affairs

Corporate &Merchant

Bank.

Corporate &Merchant

Bank.

ElectronicTechnology

ElectronicTechnology

System &Operations

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COMPANY MARKETING MIX

The concept of marketing mix is very important in the business literature.

Marketing mix is a combination of a number of marketing elements according to a

market situation. If a business enterprise rationally blends the elements of marketing

into a program of mix, then it competes, stays and earns profit in the market. In case,

the integration of the various elements of marketing is defective, the firm cannot fight

out its rivals in the market and ultimately suffers losses.

Marketing mix is defined as

“The set of controllable tactical marketing tools that the firm blends to

produce in response to wants in the target market.”‘

The various elements of marketing mix are as follows;

Products

Promotion

Price

Place

Marketers use numerous tools to elicit desired responses from their target

market. These tools constitute a market mix.

“Marketing mix is a set of marketing tools that the firms use to pursue its

marketing objectives in the target market.”

Four P’s Four C’s

Product Customer needs and wants

Price Cost to the customers

Place Convenience

24


Promotion Communication

Now let us discuss the marketing mix of ASKARI COMMERCIAL BANK

LIMITED.

While successfully penetrating the key domestic markets through strategic

expansion and business diversification, we remain alive to the challenges emanating

from the developments in the global financial markets; the opportunities and threats

engendered by greater deregulation, and increased customer expectations. These

provide us the impetus to make the best use of available resources, including

modern technology, to meet the challenges ahead.

Historically, Askari’s core marketing focus for its asset base has been the

middle and upper middle business houses (including wholesales and manufacturers)

operating in the large urban centers of Pakistan, which are primarily oriented

towards foreign trade. This segment contributes significant revenues to the Bank.

The liability side remains focused on the middle and upper middle class, retired and

serving government and armed forces personnel, and mid size business houses.

Benefiting from the bank’s growing balance sheet size, this division is now

gaining momentum and our long term aim is to develop it into an independent

strategic business unit (SBU). This would enable the bank to acquire, develop and

retain specialized abilities, and enhance our focus on serving the emerging needs of

the corporate clients.

With the branch network of 46 and further expected increase of 18 during

2003, the ATM’s facility and Internet Banking. Askari bank’s reach is ever increasing.

In recognition of this reach, we set up Retail Banking Group in July 2000, dedicated

to serving the urban consumer market. Askari is committed to aggressively market

this segment. The strategy is to provide our customers with a banker of innovative

products to meet their varying needs.

In view of the fast changing market conditions and the narrowing of traditional

lucrative margins on loans, Askari bank now commits itself to seek out new

25


opportunities and make its existing operations more efficient. This is evident from

revamping of the Treasury that is being geared to provide innovative products and

efficient services to our clients. In the process, we hope to improve overall margins

on the surplus liquidity available with the Treasury.

Despite the falling interest rates, which compelled people to divert their

investments to the share market and property, our deposits increased from PKR 41

billion in 2001. Our operating Profit (before provisions) for the year, stood at PKR

1,595 million as at December 31, 2002, while the figure for last year was PKR 1,291

million. Although the interest margins were greatly squeezed during the year 2002,

especially in the second half, we succeeded in compensating for the reduced

margins by a substantial increase in volumes.

The Board and Management is steering towards contemporary management

design. This is evident from the conception of the new division for “Planning and

Corporate Affairs”. The division was set up to play a proactive role in pursuing

corporate and organizational development, giving strategic direction to the bank and

looking out for new growth avenues. Askari is one of the first Pakistani banks to

develop such a dedicated function with a high focus on the future.

During the first quarter of 2003, the bank plans to operationalize an Offshore

Banking Unit (OBU) in Bahrain.

In the near future, Askari bank also plans to launch some new consumer

products, developed and designed by its Retail Banking Group. This will include

debit cards, prepaid cards and electronic billing systems. The bank plans to enhance

its ATMs and Internet banking services with new features like inter branch funds

transfer, and the payment of utility bills.

We plan to setup a Call Center and Date Warehouse to enhance the

timeliness and quality of our services. Enhancements are also planned for the

banking software so that functions like Trade Finance, SWIFT messages, and credit

approvals can be integrated into the core banking system. The bank is also in the

process of obtaining a new IT system for its Treasury.

26


Realizing that “Assets make things possible, people make things happen”.

Askari plans to reemphasize its focus on its human resource. The bank will try to

build the organization from within, giving special emphasis on the quality of its

human resource.

Our emphasis on technology is evident from the products that we are

developing. We understand and are committed to enhancing our technology not just

to keep abreast with the modern developments but also to retain our position as

leaders in this field

Our motivation is driven by one single factor “Providing customer satisfaction”.

PRODUCTS

Askari Bank presents you an entire range of products... whether you are

looking for high returns on your deposits, lockers for your valuables, liquidity for your

business needs, loans to meet an emergency cash need, or financing for the

purchase of an automobile, we have the solutions to your questions.

Policies Regarding Product

Intangibility, inseparability and high perish ability are a significant product

planning challenge in service marketing. So to overcome these challenges

the service industry has to adopt various strategies. We would discuss

these strategies in context of ACBL.

ACBL emphasis is on the benefit the service offers rather than on the

service itself. For example the “e-statement” service emphasis is on the

customer’s convenience, easiness and advantage than on the service

itself.

27


For product promotion the use of visualization technique, association,

physical presentation and documentation are used. On every brochure of

ACBL product one sees an image. For example the “High Yield” saving

account brochure shows an image of wheat plant. What does it reflects or

communicates with the customer? It instantly gives the idea that

something very rewarding, giving higher returns, a worthy investment etc.

so the customer mind instantly visualizes, associates the service with

something physical.

In relation to product feature the bank’s emphasis is on building up an

effective brand image. In includes the whole theme more than just the

brand name. Uses of distinctive color schemes, tangible objects, slogans

etc are being used.

Due to intangibility of products and in the absence of physical features the

bank has to emphasize on differentiation of their offering.

Askari Bank’s Personal Finance

One can avail unlimited opportunities through Askari Bank’s Personal

Finance. With unmatched financing features in 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 then ever before.

Features:

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

Repayment period from 1 to 5 years

Fixed monthly repayment

Low rates that never change

No pre-payment penalties

28


Shortest processing time

Funds may be obtained at any ACBL branch

And certainly unmatched service quality

When you are working towards your financial goals, how you borrow can be

just as important as how you invest. The right borrowing options can improve your

savings, your cash flow and your ability to take advantage of personal or business

opportunities.

Eligibility to Apply:

Your age is between 21 and 57*

You have a verifiable minimum gross monthly income of Rs. 15,000.

Salaried:

Minimum length of confirmed service with present employer is at least six

months with a total length of at least one year service.

Askari Car Financing

Askari Commercial Bank Limited offers the most convenient and

affordable vehicle-financing scheme, which provides our valuable customers an

opportunity to own a brand new vehicle of their choice. Askar's "No eligibility" clause

automatically qualifies a person to own a latest car of their choice. With minimum

down payment, lowest insurance rates and widest range of available car makes and

models, Askar offers the best value to you.

ASKARI BANK'S Cash Management Services

"Askari Cash Management Services" aimed at effectively managing the

accounts receivable portfolio of medium and large corporate entities. While

this service will help the corporate entities improve their liquidity, due to

our well-diversified branch network.

The service primarily aims at providing clearing, collection and

cash/transfer facility to corporations, under one resource center, which will

29


handle the process through the branches and provide adequate reporting

to the corporate clients, on various aspects of their accounts receivable

portfolio, every month.

As the product can be tailor made for National and Multinational

companies. The transaction process flows, operational methodologies and

service pricing varies from customer to customer, with marginal

modifications, depending upon volumes and nature of transactions

involved.

Askari Bank's Value Plus

Askari Bank leads the way, yet again ...... with the introduction of Askari bank's

Value Plus, rupee deposit account, which promises greater financial freedom and

security, in an unmatched way. Invest as little as Rs.10,000/- in a value plus savings

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

a normal checking account.

Advantages:

Partial liquidity offer on all time deposits

Monthly return

24hours world-wide protection plan

ASKCARD (Debit Card) &

Our unmatched service quality

Partial Liquidity Offer:

Offering you a truly exciting opportunity to make your investments break new grounds

for you. All you have to do is to invest a minimum deposit of Rs.25,000/-, in a value plus

time deposit for a choice tenure i.e. 3 months,6 months or 1 year.

The investment will be held in blocks of Rs. 25,000/each. In case you wish to

partially withdraw some amount from your total investment, you have the flexibility of

30


encashing the blocks that you want, without touching the remaining investment. The un-

encashed blocks will continue at the same maturity and return.....and yet you don't lose

the share of profit on the encashed blocks.Upon maturity you have the freedom of either

booking your time deposit for tenure of your choice, or let the bank roll it over

automatically for a like period.

24 hours worldwide protection:

A unique partnership between Askari Bank and New Hampshire Insurance

Company (American International Group, Pakistan) brings global accidental protection

for your entire family.

At home or at work, your Askari Bank's Value Plus account is there to take care

of you ...round the clock ...providing insurance cover of up to 4 times* the average

balance in your account .This is a choice enrolment plan with an automatic monthly

premium deduction facility at a price so low ... you can't even imagine i.e. only Rs. 20/-

per month.....

.....that's what we call relationship banking!

The privilege card:

A truly relationship card that identifies and recognizes your status. Besides

serving to identify you, this card provides with instant cash access at more than 40

ATMs around Pakistan..... But that's not what it's all about!Visit our authorized

merchants today and get a special discounì¥Á31q` 3131

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Address : Adyala Road, Rawalpindi

PABX No: (051) 5948081-4

Fax No: (051) 5948085 Tlx:------

Direct: (051) 5948088, (051) 5948087

E-Mail: [email protected]

North Area

14. Chashma Branch Branch Code : 0097

Address : Plot No.1, Bank Square, Chashma Barrage Colony, Opposite PAEC Chashma

Hospital,

Main D.I.Khan Road, Distt. Mianwali.

PABX No:-----------------

Fax No: (0459) 242761 Tlx:-------

Direct: (0459) 241544, (0459) 241667


15. Abbottabad Branch Branch Code : 0024

Address : Lala Rukh Plaza, Mansehra Road, Abbottabad.

PABX No: (0992)332182-3

Fax No: (0992)332184 Tlx:------

Direct: (0992)332157, (0992)332158


16. Chakwal Branch Branch Code : 0079

Address : Talagang Road, Chakwal

PABX No: (0543) 553142-3

Fax No: (0543) 601979 Tlx:----------

Direct: (0543) 551255,


17. Dera Ismail Khan Branch Branch Code : 0069

Address : Kaif Gulbahar Building, A.Q.Khan Chowk, Circular Road, D.I.Khan

PABX No: (0966)720180-82

49

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Fax No: (0966)720184 Tlx:--------

Direct: (0966)720178, (0966) 720179


18. Jhelum Branch Branch Code : 0070

Address : Plot No. 225 & 226, Kohinoor Plaza, Old G.T Road, Jhelum Cantt-49600

PABX No: (0544)720053-55

Fax No: (0544)720060 Tlx:-------

Direct: (0544)720051, (0544) 720052


19. Mardan Branch Branch Code : 0007

Address : The Mall, Mardan. P.O.Box 197

PABX No: (0937) 9230501-2

Fax No: (0937) 9230503 Tlx:--------

Direct: (0937) 9230500,


20. Mirpur (Azad Kashmir) Branch Code : 0005

Address : Nathia Building Chowk Shaheedan, Mirpur

PABX No: (05-8610)45451-52

Fax No: (05-8610) 35429 Tlx:--------

Direct: (05-8610) 45450, (05-8610) 35247


21. Nowshera Branch Branch Code : 0084

Address : Taj Building, Main GT Road, Nowshera

PABX No: (0923) 9220300-301

Fax No: (0923) 9220304 Tlx:--------

Direct: (0923) 9220302, 610530, (0923) 9220303


22. Cantt Branch Branch Code : 0004

Address : 3-7, Fakhr-e-Alam Road, Peshawar, P.O.Box 606

PABX No: (091) 9212433-6

50







Fax No: (091) 276391 Tlx: 52314 ACBL PK

Direct: (091) 5273829, (091) 5279683


23. City Branch Branch Code : 0014

Address : Bank Square Chowk Yadgar, Peshawar

PABX No: (091) 2561246-7

Fax No: (091) 2561245 Tlx: 53423 ACBL PK

Direct: (091) 2560156, (091) 2567315


24. Mingora Branch Branch Code : 0061

Address : Opposite Park Hotel, Makaan Bagh, Saidu Sharif Road, Mingora, Swat

PABX No: (0946) 713358-9

Fax No: (0946) 713361 Tlx:--------

Direct: (0946) 713356


Lahore Region

25. Aiwan -e-Tijarat Branch Branch Code : 0006

Address : 7-A, Shahrah-e-Aiwan-e-Tijarat, Lahore. P.O. Box 1624

PABX No: (042) 9203673-77

Fax No: (042) 9203351 Tlx:--------------

Direct: (042) 9203081, (042) 9203633


26. Tufail Road Branch Branch Code : 0011

Address : 12-Tufail Road, Lahore Cantt.

PABX No: (042) 9220940-45

Fax No: (042) 9220947 Tlx: 47746 ASKCT PK

Direct: (042) 9220931, (042) 9220932


27. Circular Road Branch Branch Code : 0017

Address : 77-Circular Road, Lahore

PABX No: (042) 7635920-22

Fax No: (042) 7635919 Tlx: 44254 ACBCR PK

51







Direct: (042) 7633694, (042) 7633702


28. Gulberg Branch Branch Code : 0021

Address : 10-E/11, Main Boulevard, Gulberg-III, Lahore.

PABX No: (042) 5764842-4, 5878431-2, 5877297

Fax No: (042) 5760958 Tlx:--------

Direct: (042) 5760369, (042) 5760427


29. Badami Bagh Branch Branch Code : 0022

Address : 165-B, Badami Bagh, Lahore

PABX No: (042) 7727601-2

Fax No: (042) 7704775 Tlx:------

Direct: (042) 7725300, (042) 7721318


30. D.H.A. Branch Branch Code : 0027

Address : 324-Z, Defence Housing Authority, Lahore 54792

PABX No: (042) 5898891-5

Fax No: (042) 5732310 Tlx:--------

Direct: (042) 5726818, (042) 5896036


31. The Mall Branch Branch Code : 0045

Address : Bank Square, 47 The Mall, (Shahrah-e-Quaid-e-Azam), Lahore

PABX No: (042) 7211851-5

Fax No: (042) 7211865 Tlx:-------

Direct: (042) 7314196, (042) 7322351


32. Township Branch Branch Code : 0056

Address : 48/10, B-1, Akbar Chowk, Township, Lahore 54770

PABX No: (042) 5140520-22

Fax No: (042) 5124222c Tlx:-------

Direct: (042) 5151279, (042) 5120302

52








33. Baghbanpura Branch Branch Code : 0063

Address : 6/7, Shalimar Link Road, Baghbanpura, Lahore.

PABX No: (042) 6830361-63

Fax No: (042) 6830367 Tlx:------

Direct: (042) 6830360, "(042) 6830366"


34. D.H.A. Phase II Branch Branch Code : 0064

Address : Plot No. 53, Block CCA, Phase II C, DHA, Lahore Cantt.

PABX No: (042) 5746423

Fax No: (042) 5746421-22 Tlx:-----

Direct: (042) 5896615


35. Shahdara Branch Branch Code : 0066

Address : N-127R-70C, Opposite Rustom Sohrab Cycle Factory, Sheikhupura Road,

Shahdara, Lahore 54950

PABX No: (042) 7919302-05

Fax No: (042)7919306 Tlx:------

Direct: (042) 7919300, (042) 7919301


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5858585858585858585858585858Æ585858

858585858585858585858585858585858¤5858585858È58$58 58 58 58 58 58 58 58 58 58 58 ” 58 58 58 58

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PABX No: (0864) 211359-60

Fax No: (0864) 211358 Tlx:--------

Direct: (0864) 211357,


61. Ghotki Branch Branch Code : 0071

Address : Plot No. D-9, Deh Odher Wali, Qadirpur Road, Opposite Town Committee, Ghotki

PABX No: (0723) 600500

Fax No: (0723) 600526 Tlx:---------

Direct: (0723) 600707,


62. Saima Trade Tower Branch Branch Code : 0002

Address : I.I. Chundrigar Road, Karachi P.O.Box 1096

PABX No: (021) 2630731-3, 2624316, 2634610

Fax No: (021) 2631176 Tlx: 27499 ASKRI PK

Direct: (021) 2624714, (021) 2631178

58





63. Clifton Branch Branch Code : 0015

Address : Marine Trade Center, Block-9, Clifton, Karachi. P.O.Box 13807

PABX No: (021) 5868551-4

Fax No: (021) 5868555 Tlx:----------

Direct: (021) 5862868, (021) 5868557


64. Sharah-e-Faisal Branch Branch Code : 0019

Address : 11-A, Shahrah-e-Faisal, Progressive Square, Block-6, P.E.C.H.S, "Karachi,

P.O.Box 12696

PABX No: (021) 4520026-9

Fax No: (021) 4520030 Tlx: 27041 ASKSF PK

Direct: (021) 4526641, (021) 4526640


65. Jodia Bazar Branch Branch Code : 0023

Address : Qazi Usman Road, Near Lal Masjid, Karachi, 6831

PABX No: (021) 2474851-5

Fax No: (021) 2474856 Tlx: 27597 ACBJB PK

Direct: (021) 2473498, (021) 2473439


66. Gulistan-e-Jauhar Branch Branch Code : 0032

Address : Asia Pacific Trade Center, Rashid Minhas Road, Karachi, 75290

PABX No: (021) 4632500-04

Fax No: (021) 4632505 Tlx:-------

Direct: (021) 4630166, (021) 4630167


67. D.H.A. Branch Branch Code : 0033

Address : Jami Commercial Street No.11, Khayaban-e-Itehad, D.H.A Phase-VII, Karachi

PABX No: (021) 5387490,5384902-4

Fax No:----------- Tlx:-------

Direct: (021) 5384905, (021) 5384902

59








68. Cloth Market Branch Branch Code : 0039

Address : Laxmidas Street, Karachi 74000

PABX No: (021) 2472611-5

Fax No: (021) 2472605 Tlx:-------

Direct: (021) 2472607, (021) 2472606


69. Bahadurabad Branch Branch Code : 0041

Address : Zeenat Terrace, Plot No. 265, Block No.3, Bahaduryar Jang Society, Bahadurabad,

Karachi

PABX No: (021) 9232565-8

Fax No: (021) 9232574 Tlx:-------

Direct: (021) 9232569,


70. Hydri Nazimabad Branch Branch Code : 0042

Address : Plot No. SF/14-18 Al Burhan Arcade, Block E, Barkat-e-Hydri

PABX No: (021) 6632904-6

Fax No: (021) 6632922 Tlx:-------

Direct: (021) 6632921,


71. Shaheed-e-Millat Branch Branch Code : 0046

Address : A/22, Block 7&8, Anum Pride K.C.H.S Commercial Area, Main Shaheed-e-Millat

Road, Karachi

PABX No: (021) 4392850

Fax No: (021) 4392875-76, 4392878-9 Tlx:-----

Direct: (021) 4392859, (021) 4392886


72. Saddar Branch Branch Code : 0048

Address : Sindh Small Industries Building, Regal Chowk, Saddar, Karachi

PABX No: (021) 2762840-2

Fax No: (021) 2760992 Tlx:---------Direct: (021) 2760506,

60








73. Napier Road Branch Branch Code : 0049

Address : Ishaq Chamber, North Napier Road, Karachi.

PABX No: (021) 2549581-3

Fax No: (021) 2549585 Tlx:---------

Direct: (021) 2549588, (021) 2549587


74. Badar Commercial Area Branch Branch Code : 0052

Address : 29-C, Badar Commercial Area, St.#1, Phase V, DHA Karachi 75500

PABX No: (021) 5344175-8

Fax No: (021) 5344174 Tlx:------

Direct: (021) 5344171, (021) 5344172


75. Gabol Town Branch Branch Code : 0053

Address : Plot No.1, Sector 12-B, North Karachi Industrial Area, Karachi 75850

PABX No: (021) 6950332

Fax No: (021) 6950333 Tlx:--------

Direct: (021) 6950331


76. S.I.T.E. Branch Branch Code : 0054

Address : B/17, Estate Avenue, S.I.T.E. Karachi, 75700

PABX No: (021) 2585913-17

Fax No: (021) 2585525 Tlx:-------

Direct: (021) 2585911, (021) 2585912


77. New Challi Branch Branch Code : 0057

Address : Abdullah Square Building, Shahrah-e-Liaqat, I Challi, Karachi 74000

PABX No: (021) 2471042-44

Fax No: (021) 2471023 Tlx:------

Direct: (021) 2471021, (021) 2471022


61








78. Korangi Branch Branch Code : 0060

Address : Plot No. ST 2/3, Sector 23, Main Korangi Road, Korangi Industrial Area, Karachi

PABX No: (021) 5115024-6

Fax No: (021) 5115027 Tlx:-------

Direct: (021) 5115020, (021) 5115019


79. Marriot Road Branch Branch Code : 0062

Address : walpindiwala Building, Marriot Road, Market Quarters, Karachi

PABX No: (021) 2418424-28

Fax No: (021) 2418429 Tlx:----------

Direct: (021) 2418412, (021) 2418421


80. M.A Jinnah Road Branch Code : 0077

Address : Survey No. 4, Sheet No. RB-7, Aram Bagh Quarters, M.A.Jinnah Road

PABX No: (021)2217531-34

Fax No: (021)2217494 Tlx:--------

Direct: (021)2217490,


81. Marston Road Branch Branch Code : 0085

Address : Shafiq Shopping Plaza, Marston Road, Karachi

PABX No: (021) 2745722-4

Fax No: (021) 2725644 Tlx:---------

Direct: (021) 2745772, (021) 2745773


82. Gulshan-e-Iqbal Branch Code : 0086

Address : University Road, Gulshan-e-Iqbal, Karachi

PABX No: (021) 9244365-69

Fax No: (021) 9244370 Tlx:------

Direct: (021) 9244361, (021) 9244362


83. Metroville Branch Branch Code : 0088

Address : G-50, Block-3, Metroville-1, Karachi

62







PABX No: (021) 6762532-5

Fax No: (021) 6762541 Tlx:-------

Direct: (021) 6762527, (021) 6762528


84. Federal 'B' Area Branch Code : 0094

Address : Plot No. ST-2/B, Block No. 14, Al-Siraj Square, Federal 'B' Area, Karachi

PABX No: (021) 6806091-92

Fax No: (021) 6806095 Tlx:-------

Direct: (021) 6806152, (021) 6806094


85. Atrium Mall Branch Branch Code : 0096

Address : 249-Staff Lines, Fatima Jinnah Road, Karachi

PABX No: (021) 5650953, 5651046, 5651048, 5651091

Fax No: (021) 5651207 Tlx:---------

Direct: (021) 5650940, (021) 5650939


86. Bohra Pir Branch Code : 0098

Address : Plot No. 22/1, Princess Street, Bohra Pir, Ranchore Line, Karachi

PABX No: (021) 2744768-69, 2744771, 2744776-77

Fax No: (021) 2744779 Tlx:------

Direct: (021) 2745961, (021) 2745962


87. Larkana Branch Code : 0082

Address : Bunder Road, Larkana

PABX No: (074) 4053823-24

Fax No: (074) 4045371 Tlx:---------

Direct: (074) 4045381, (074) 4045382


88. Sukkur Branch Branch Code : 0043

Address : Sarafa Bazaar, Sukkur

PABX No: (071) 5628267-8, 5628286

63







Fax No: (071) 5627219 Tlx:--------

Direct: (071) 5627218, (071) 5627212


South 2 Region

89. Hyderabad Branch Branch Code : 0016

Address : 332-333, Saddar Bazar, Hyderabad. P.O.Box 470

PABX No: (022) 2783616,2783618, 2784745

Fax No: (022) 2783617 Tlx: 22054 ACBL PK

Direct: (022) 2783615, (022) 2784760


90. Mirpur Khas Branch Branch Code : 0074

Address : C.S. 835, Ward B, M.A. Jinnah Road, Mirpurkhas

PABX No: (0233) 9290335

Fax No: (0233) 9290331 Tlx:---------

Direct: (0233) 9290333, (0233) 9290334


91. Nawabshah Branch Branch Code : 0081

Address : Katchary Road, Nawabshah

PABX No: (0244) 9370460-64

Fax No: (0244) 9370467 Tlx:--------

Direct: (0244) 9370466, (0244) 9370465


West

92. Chaman Branch Code : 0020

Address : Trunch Road, Off Mall Road, Chamman

PABX No: (0826) 613330, 614447

Fax No: (0826) 613331 Tlx:---------

Direct: (0826) 613330,


93. M.A. Jinnah Road Branch Branch Code : 0003

Address : M.A.Jinnah Road, Quetta

64







PABX No: (081) 2843751-2843754

Fax No: (081) 2824602 Tlx:------

Direct: (081) 2836074,


94. Cantt Branch Branch Code : 0029

Address : Bolan Complex, Cantt Area, Quetta

PABX No: (081) 2882101-2

Fax No:----- Tlx:---------

Direct: ------------,------------


95. Hazar Ganji Branch Branch Code : 0059

Address : Fruit Market, Hazar Ganji, Quetta

PABX No: (081) 2460808

Fax No: (081) 2460807 Tlx:-------

Direct: (081) 2460806,


96. Masjid Road Branch Branch Code : 0076

Address : Cut Piece Gali No. 7, Cloth Market, Masjid Road, Quetta. P.O.Box 87300

PABX No: (081) 2824008-09

Fax No: (081) 2845227 Tlx:---------

Direct: (081) 2824004, 2001641, (081) 2001594, 2841007


97. Meezan Chowk Branch Branch Code : 0083

Address : Meezan Chowk, Liaqat Bazar, Quetta

PABX No: (081) 2668386-7

Fax No: (081) 2668389 Tlx:-------

Direct: (081) 2665985, (081) 2665996


98. Satellite Town Branch Code : 0091

Address : Kasi Plaza, Sirki Road, Satellite Town, Quetta

PABX No: (081) 2451535-36

65







Fax No: (081) 2451538 Tlx:--------

Direct: (081) 2451530, (0333) 7804779


New Branch

99. Muzafarabad Branch Branch Code : 0099

Address : Main Secreteriat Road, Muzafarabad, Azad Kashmir

PABX No: (058810) 43387 & 43557

Fax No: (058810) 43454 Tlx:------

Direct: (058810) 43475, (058810) 43470


66




67


68


69


PRICE

Pricing Policies

At Askari Commercial Bank Limited the pricing strategies applicable are:

One price strategy

Flexible price strategy

For Priority Customers many of the charges are waived in order to

facilitate them and provide them with high-class services.

70


The bank staff in higher posts is also in a position to waive some

charges in order to oblige their customers.

So the pricing strategies are adaptable and stern depending upon the

type of the customer.

The Bank offers deposits at competitive prices.

FINANCIAL ANALYSIS

The importance of financial statements lies in their utility to satisfy the

questions in the mind of different stakeholders. Different classes of people are

interested in the financial statements analysis with a view to assessing the economic

and financial position of any business or industrial concern in terms or profitability,

liquidity or solvency etc. for example, the commercial banks are mainly interested in

short term liquidity and profitability while prospective investors may be interested in

long terms profitability and solvency.

Financial statements, among other things, include balance sheet and income

statement. Balance sheet presents assets and liabilities of the business at a given

date. Beside, showing the ability or the business to servic3e the loans on the

strength of its financial structure and on the history of its profitability, it helps in

judging the impact of financial and fiscal support and in evolving secured basis for

extending such support. Likewise, apart from showing the progress and profitability

or a business, income statements disclose, how the business has been conducted

and determines factors behind a rise or decline in the net worth.

The purpose of analysis of financial statements is to examine past and current

financial data so that a company’s performance and financial position can be

evaluated and future risk and potentials can be estimated. The analysis can yield

valuable information about trends and relationship, the quality of a company’s

earning, and it financial strengths and weaknesses.

71


The analysis would answer questions like:

Is the business expanding or contracting?

Is it more profitable than last year or less profitable?

How efficiently is the capital employed in the business being utilized?

Does the business have any financial problem?

And much more

To evaluate financial statements, an analyst must:

Be acquainted with business practices;

Understand the business and accounting terminology; be aware of

accounting conventions and limitations of accounting;

Be acquainted with the tools of analysis of FS

Balance Sheet of ACBL

BALANCE SHEET AS AT 31ST DECEMBER, 2004-2005

(Rupees in 000)

Rs Rs

2004 2005

ASSETS:

Cash and balances with treasury bank 8,762,866 11,766,925

Balances with other banks 4,847,899 5,550,148

Investments 17,239,156 25,708,194

Lending to financial institutions

Investments 2,324,839 10,172,242

Advances 69,838,392 85,976,895

Other assets 1,559,365 2,732,641

Operating fixed assets 2,595,023 3,192,862

Total Assets 107,167,540 145,099,907

LIABILITIES

Bills payable 1,227,093 1,315,680

Borrowing from financial institution 13,781,555 10,562,338

72


Deposits and other accounts 83,318,795 118,794,690

Liab.against assets subject to fin. lease 14,159 1,459

Other liabilities 1,282,980 2,271,393

Deferred tax liabilities 526,866 567,217

Sub-ordinated loans 1,000,000 2,999,700

Total Liabilities 101,151,448 136,512,477

Net assets 6,016,092 8,587,430

Represented by:

Share capital 1,255,848 1,507,018

Reserves 4,317,301 5,862,074

Un-appropriate profits ----- -----

5,573,149 7,369,092

Surplus on revaluation of assets – net of

tax 442,943 1,218,338

6,016,092 8,587,430

Contingencies and commitments

Profit and Loss Account of ACBL

PROFIT AND LOSS ACCOUNT

FOR THE YEAR ENDED DEC. 31, 2004-2005

Figures in '000'

2004 2005

RS RS

Mark Up/Return/Interest Earned 4,487,206 8,780,698

Mark Up/Return/Interest Expensed 1,117,206 4,278,374

Net Mark Up/Interest Income 3,370,000 4,502,324

Provision against non-performing Loans & Advances 277,398 638,547

Value of investment 38,066 (36,555)

73


Bad debts written of directly 7 ----

315,471 601,992

Net Mark Up/Interest Income after provisions 3,054,529 3,900,332

Non-Mark Up/ Interest Income

Fee, Commission and Brokerage Income 708,377 838,561

Dividend Income 26,318 51,143

Income from dealings in foreign currencies 180,992 356,218

Other Income 177,648 206,819

Gain on sale of investment 540,193 99,825

Total Non-Mark Up/Interest Income 1,633,528 1,552,566

4,688,057 5,452,898

Non-Mark Up/Interest Expenses

Administrative Expenses 1,845,179 2,591,985

Other Provisions ----- -----

Other Charges 138 1,832

Total Non-Mark Up/Interest Expenses 1,845,317 2,593,817

2,842,740 2,859,081

Profit Before Taxation 2,842,740 2,859,081

Taxation-current 876,089 828,774

-prior years --- (188,247

-deferred 43,611 196,558

919,700 837,085

Profit After Taxation 1,923,040 2,021,996

Un-appropriated Profit Brought forward --- ---

Profit available for appropriation 1,923,040 2,021,996

Appropriations: transfer to:

Statutory reserve 384,608 404,399

Capital reserves (reserves for issue of bonus shares) 251,170 497,315

Revenue reserves 1,036,092 894,229Proposed cash dividend (Rs.1.5 per share; 2004: Rs.2 per

share) 251,170 226,053

1,923,040 2,021,996

74


Un-appropriated profit carried forward ----- ------

Basic / diluted earnings per share – (Rupees) 12.76 13.42

75


ASKARI COMMERCIAL BANK LIMITED MULTAN

Askari Commercial Bank Limited Multan was inaugurated on December

28,1994.

It is located on Abdali Road Opposite to PIA Office. The location is connected

to all the main trade centers in Multan. It is a prosperous branch streaming

towards great achievements.

At the time of its establishment the factored who were considered are as

follows

Multan is zone covering a large population.

Multan City is linked to many big cities.

Agro based area constituting growers and gainers

Army Offices & Fort Colony

Educational Institution

The total strength of staff in ACBL Multan is 70. They are dedicated their

work. The branch is progressing rapidly. Under the dynamic leadership of

Vice President Mr. Sajjad A Sjheikh and Operational Manager Mr. Shaukat

Hayyat Babar

Competitors of Askari Commercial Bank Multan

Here is the list of different national banks and private banks along with their

branches available in the Multan market.

76


COMPETITORS OF ASKARI COMMERCIAL BANK MULTAN BRANCH.

SR.NO. BANKS BRANCHES SR.NO. BANKS BRANCHES

1 Askari Commercial Bank 1 10 United Bank Ltd. 21

2 Bank Al-Habib Ltd. 3 11 Prime Bank Ltd. 1

3 Bank Al-Falah. 1 12 First Women Bank 1

4 M.C.B 22 13 Habib Bank Ltd. 28

5 National Bank of Pak. 22 14 Allied Bank Ltd. 17

6 EBI 1 15 Soneri Bank Ltd. 1

7 Bolan Bank Ltd. 1 16 Bank of Punjab. 10

8 Platinum Bank Ltd. 1 17 Metropolitan Bank. 1

9 Saudi –Pak Bank 1 18 Faisl bank 1

77


Organizational Hierarchy

78

Bills/

Remittance

Department

Bills/

Remittance

Department

Clearing

Department

Clearing

Department

Customers

Services

Department

Customers

Services

Department

Account

opening

Department

Account

opening

Department

Cash/Deposit

Department

Cash/Deposit

Department

Agri. Credit

Department

Agri. Credit

Department

Accounts

Department

Accounts

Department

Branch

operation

Manager

Branch

operation

Manager

Retail

Banking

Department

Retail

Banking

Department


Market Comparison

If we compare the ACBL products with all other banks available in

the market we can see that ACBL is providing some advance and quality

services to its customers. Most important thing in this comparison is related

with the deposits of the branch with other banks, in which we can see that the

deposits of ACBL are far better than the other banks.

Goals and Objective

Every Marketing Department has its goals and objectives and

according to their plans they set their goals and objectives. ACBL marketing

department has also some goals and objectives, which ultimately focus the

customer is, needs and wants satisfaction.

Introduced new relationshipDeposit

TSD

Credit

Increase number of accounts

Identify target market

Identify prospective customers

Introduced bank products in target marketOn-line

ATM

Quality Service

Activate dormant accounts

79


DEPARTMENTS

The Askari Commercial bank has following department:

Account Opening department

Cash Department

ATM Department

Account Department

Remittance Department

Clearing Department

Foreign Trade Department

Credit Department

Credit Card Department

80


ACCOUNT OPENING DEPARTMENT

Borrowing funds from different sources has become an essential feature of

today's business enterprises. But in the case of a bank borrowing funds from

outside parties is all the more vital because the entire banking system is

based on it . The borrowed capital of a bank is much greater their own

capital. Banks borrowing is mostly in the form of deposits. These deposits

are lent out to different parties. Such deposit creation is done through opening

an account in the Bank.

In ACBL Multan Mr. Asaad Bhutta is operating the account opening

department along with performing some auxiliary functions of Check Book

Issuing.

TYPES OF ACCOUNTS

In ACBL, there are the following types of accounts:

Current account.

Saving Account.

Askari Special Deposit Account.

Term Deposit.

Basic Banking Account

Ever Green Account

81


CURRENT ACCOUNT

In current account there is no interest on it. It is for only transaction purposes.

They are paid on demand. When a banker accepts a demand deposit, he

incurs the obligation of the paying all cheques drawn against him to the

extended of the balance in the account. As there is no profit paid on this

account it is also called chequing account because cheques can be drawn on

it. Current account is mostly opened for business.

Following is a brief description of the current account

DEPOSIT

SCHEMES

RATE OF

RETURN

MINIMUM

BALANCE

PAYMENT

OF RETURN

PRODUCT

BASE

PLS

SAVING

DEPOSITS

2.50% UPTO---

24,999

6 -

MONTHLY

MINIMUM

MONTHLY

BALANCE

Rs.10,000

SAVING ACCOUNT

The purpose of this account is to induce the habit of saving individuals in the

neighborhood. The profit is on the basis of 8.5% per 6 month. The minimum

deposit for opening the account is Rs.100/-. Though individuals open such

accounts for saving purpose, persons belonging to Armed forces, and

different military institutions are free to use this account on current basis.

Following is a brief description of Saving Account

82


DEPOSIT

SCHEMES

RATE OF

RETURN

MINIMUM

BALANCE

PAYMENT

OF RETURN

PRODUCT

BASE

PLS

SAVING

DEPOSITS

2.50% UPTO---

24,999

6 -

MONTHLY

MINIMUM

MONTHLY

BALANCE

Rs.10,000

3.00% 25000TO

99,999

3.50% 100,000 TO

999,999

4.00% 1,000,000

--------

ASKARI SPECIAL DEPOSIT ACCOUNT

ASDA account is an interest bearing current account interest is paid. The

payment of return is monthly, where as the rate of return with aspect to the

amount of minimum deposit clear from deposit schedules in following table). It

is also chequing account because cheques can be drawn on it. It is necessary

for this account that the client must maintain a minimum balance of Rs.

50,000 at the end of the month. That’s why it is similar to current account. It is

mostly opened by Business but individuals to open this account.Its code is

165.

83


DEPOSIT

SCHEMES

RATE OF

RETURN

MINIMUM

BALANCE

PAYMENT

OF

RETURN

PRODUCT

BASE

ASDA

ASKARI

SPECIAL

DEPOSIT

ACC.

1.50% 50,000 TO 999,999 MONTHLY MONTHLY

AVE. BAL.

2.00% 1,000,000 TO

4,999,999

MONTHLY MONTHLY

AVE. BAL.

2.50% 5,000,000 TO

19,999,999

MONTHLY MONTHLY

AVE. BAL.

2.75% 20,000,000 To

99,999,999

MONTHLY MONTHLY

AVE. BAL.

3.00% 100,000,000 AND

ABOVE

MONTHLY MONTHLY

AVE. BAL

TERM DEPOSITS

A term deposit is a deposit that is made for a certain periods of time at the

end of the specific period. The customer is allowed to with draw the principle

amount .

ACBLs Term deposits are of types clear in the deposit scheme in the table).

One of them is "Askari" Advantage one month. The rate of return on this

account is 9.75%. The term deposit account vary one month to 5 years and

the min balance requirement is Rs.5000/- for all following accounts

The amount of profit is given to depositors in three ways:

By cash

By sending a bank Draft to depositors Home address or Officers or whichever

is specified as mailing Address.

The amount is credited in any one of the checking Accounts of the depositor.

84


DEPOSIT

SCHEMES

RATE OF

RETURN

MINIMUM

BALANCE

PAYMENT

OF

RETURN

PRODUCT

BASE

PLS

TERM

DEPOSIT

1 MONTH 4% 5,000 MATURITY DAILY

2

MONTHS4.5% 5,000 MATURITY DAILY

3

MONTHS5% 5,000 MATURITY DAILY

6

MONTHS5.5% 5,000 MATURITY DAILY

1 YEAR 6% 5,000SIX

MONTHSDAILY

2YEARS 7% 5,000SIX

MONTHSDAILY

3 YEARS 8% 5,000SIX

MONTHSDAILY

5 YEARS 9% 5,000SIX

MONTHSDAILY

Basic Banking Account

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

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

code is 025.

ACCOUNT OPENING PROCEDURE

85


For the accounts (C/A, ASDA , SAVING) , there are different types of account

holders are required for all these types of account holders. The operation

/procedure requirement that is needed for " Individual Account " differ greatly

from " Joint account " proprietorship "Partner ship “, "Limited Company"

and "Club society or Association " as explained below.

INDIVIDUAL'S ACCOUNT

When a single man or women opens an account in his/her own

name and has the right to operate it is called individual Account.

DOCUMENTATION REQUIREMENT

For literate person copy of National Identity Card is required as a

primary requirement. For illiterate person and Veiled Women, along with the

copy of National Identity Card requirement he or she must come in person for

opening the account.

OPERATION

The person place a "Check Mark " in the type of account and type of

operation required

He/She fills in part-I of the form , a fix his /her either two or four similar

signature (or thumb expression in the signature space) and get it

introduced and signed by a person who already has an account with

the bank and write his account number in the specific rows in a specific

space.

The person fills in "next of Kin " position where he/she father, mother,

husband/wife or any other relative's name, his /her address, phone no

and affix his/her signature to certify this requirement. This requirement

is needed because in his/her absence bank can have correspondence

with the specific person.

The person put her /his signature (" or thumb expression) on the

signature Specimen Card (SS CARD) similar in the area on the form.

86


One the back of S.S card mailing address, telephone no, Person to

contact and introducer space is filled in. All these requirement are

necessary for future

The person deposits the initial amount for opening account on to the

cash counter.

The person put his signature on form -A (check book requisition) on

two places in "authorized signature" and fills in the "Title of Account

space by writing his name.

If the person put his signature in Urdu or any language other than

English, he signed a "Vernacular form" where under take that affixed

signature are original and his own signature and two postal size photos

are needed.

The next day is the opening of account.

JOINT ACCOUNT

When two or more persons, neither partners, nor trustees, open an in

their name is called joint Account. Husband and wife or two persons of same

sex can open joint account.

DOCUMENTATION

For joint account copy of National Identity Card of all the persons is

obtained other things remaining same as in individuals account.

OPERATION

The person checks the type of amount and type of operation required

in the respective box on the form.

The persons fill in the Part-I and part-II in the form.

Signature of both persons are obtained on the form in the area

specified for signature and S.S. Card.

In the title of account space names of all the persons are mentioned.

87


Accounts holder specified in the form that they will operate the form

singly or Jointly.

PROPRIETORSHIP ACCOUNT

When an owner of a firm operating singly, opens an account in his

firm name, this account is called a proprietorship Account the proper himself

liable for all his acts.

DOCUMENTATION REQUIRED

For this kind of account, an application for opening the account on

the firm letter -pad (having the firm name) is required along with the N-I-C-

Card of proprietor.

OPERATION

All operation remains the same except that the firm name is written

in the "Title of the Account " area and signature of the proprietor are affixed in

the S.S. Card and the area specified for signatures on the form.

PARTNER SHIP ACCOUNT

The account is opened in the firm name and all partner designate one

two persons to act on behalf of the partner ship firmer all acts on behalf of

firm. The partners in the partnership firm are liable for the acts of the firm

jointly and severely. Every partner has in a firm has an implied authority bind

his co. partners by drawing and enclosed cheques.

DOCUMENTATIONS

Copy of C. N.I. C of all partners

Application to open the account on the firm letter pad.

Partner ship deed in case registered partnership firm.

88


Letter showing the implied Authority of one or more partners to act on

behalf of the firm.

In case of non -registered partnership firm, understanding on behalf of

the firm to remain liable for all acts of the firm.

Name, address of all partners is written on the pad.

OPERATION

All other requirement remain same except that the form is dully signed

by all partners cards are signed by all those partners who will act on behalf of

the firm and along filling part-I , Part-Iv is also filled.

LIMITED COMPANY ACCOUNT

This account is for limited companies. In order to facilitate their

transaction with outside parties, bank provides many facilities.

DOCUMENTATION REQUIRED

Memorandum of Association.

Articles of the Association

Resolution of the Board of Director.

Certificate of Incorporation.

Certificate of commencement of business

C-N-I-C

OPERATION

The persons authorized in the Resolution of the Board of Directors put their

signatures on S.S Cards. Next of kin "requirement "is not need in case of a

Limited Company. After completing each and every formality, introducer

signature is verified by S.S card and is stamped "Verified" customer

signatures are admitted by stamping "Admitting" near signature and again

signatures on S.S card are admitted in the same way. The same process of

89


verification and admission of the signatures is repeated on Form-A and next

of Kin area.

After completing each and every formality, Accountant is open in the

computer by writing name, address, A/C Number etc.

LETTER OF THANKS

At the start of the letter 2nd day, ACBL issues letter of thanks to

"Account opener" and " Account Introducer " for the trust the have on ACBL.

OTHER RESPONSIBILITIES

CHECK BOOK ISSUING

Check books are issued only for checking account such as current

Account, saving Account and ASDA Account. They are not issued for other

fixed and term deposits because of their Long term Accounts “nature.”

ISSUING PROCEDURE

Signatures on cheque – book requisition are verified by matching with

signatures on SS.

Cheque – book leaves number, account number, account holder’s

name are mentioned in the cheque- book is made by mentioning the

and the total of sum of excise duty and provincial tax.

The name of A/c holder and date of cheque – book issuance is written

on cheque – book requisition the account-opening officer puts his

initials on requisition leave.

A/c number is stamped over the leaves of cheque – book and finally

authorized person affix his signature over the debit voucher and he

voucher is attached from the cheque book and is handed over to the

customer.

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RECEIVING INWARD CHEQUES

Another responsibility and function of account Opening

Department is to receive Inward cheques for collection of other Banks as well

as of ACBL. Then these cheques are sent to clearing official who clears these

checks at SBP from other banks.

ACCOUNT CLOSING

Account is closed on the written request of the customer ACBL

debits Rs. 100/- as charges for closing the customer account from that

account. The account holder with draws the amount by writing a cheque and

just leaves Rs. 100/- in his account. But to surrender the cheque book yet if

some leaves are yet to be write to the bank as a necessary requirements for

closing the account.

PROCEDURE

The customer for individuals account write an application to the

manager of the bank an a simple paper about the closing of his

account with the bank (In case of proprietor ship partnership and

limited company account the application should be written an firm or

company letter –head)

The individual or in case of other type- proprietor firm and company

surrender the cheque book to the bank.

The cheque book is then torn from one side and is attached with the

application.

In case of Ltd. Company account resolution of the board of directors is

also obtained to attach it with the application.

The account opening form of the account holder is taken from the

account-opening file, and the application, cheque book, and resolution

of board of directors in case of limited company account are attached

with the form.

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Lastly, it is written in “Red Ink on the form that account closed” and

“Date of account closing.”

ATM- CARDS DEPARTMENT

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

deals this department.

ATM CARD

ATM – Cards are only issued to Account Holder

ISSUING PROCEDURE

The person, first open the account within the blank.

Then he fills the ATM application form in which name of account

holder, Fathers name account number and C.N.I.Card number are

mentioned.

A copy of C.N.I.C is also attached with the application form.

After completing this process, the application package is sent to head

office

ACBL head office takes a period of 2-3 weeks for preparing and

processing of ATM – cards. First, list of card holder is issued and then

after 15 days cards are send to ACBL’s issuing branch. The card and

list are not sent simultaneously in order to avoid any mishandling.

ACBL takes Rs. 200/- per year as charges for a card

TERM DEPOSIT

Any person can open a term deposit. He needs not have an account in the

bank.

PROCEDURE

The customer comes to the bank and specifies the number of days for

which he wants to Deposit hid money in term deposit.

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The credit voucher is made for the amount of cash to be deposited.

The presence of account is not necessary.

The term deposit form is then filled by the officer. The date of opening,

the period, the name of the customer, the signature etc is all written on

the form.

The term deposit Receipt is filed according. All the requirements are

carried out, the signature of the customer and the authorized officer,

the stamp of the bank etc.

The term deposit Receipt is then given to the customer.

The number of the term deposit form and term deposit is noted receipt

is then given to the customer.

The number of the term deposit form and term deposit receipt is noted

in the term deposit Register.

After completion of the form, it is posted in the term deposit file.

A 0.2% tax on the provincial amount is taken while issuing the receipt.

A credit voucher made and the amount is credited to the tax on TD.

CASH DEPARTMENT CASH DEPARTMENT

Cash department of Bank Alfalah works under the operation department. This

department is given the complete responsibility of cash, as result of

transaction in touch local and foreign currencies. It is also responsible for the

book keeping of these transactions and the safe custody of cash.

This department performs the main function.

Cash receipts

Cash payments

Cash ReceiptsCash Receipts In cash department depositors use deposit slip for depositing the

amount into their accounts. The officer checks if the deposit slip is properly

filled up containing title of account, A/C number, date and amount in words

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and figures. Detail on both counter file and cash receipt voucher should be

the same. Cash receiving officer, after twice counted and matched with the

deposit slips will handover cash to the customer. The cash details are written

on the back of the deposit slip and are also entered in cash receiving register.

Cash received stamp is affixed on the face of the deposit slip along with the

signature of the cash receiving officer.

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

payment officer. He confirms that it is drawn on the same branch and the

particulars of cheque are properly filled in. one signature of the holder is taken

on the back of the cheque. Cheque is handed over to the officer cash

department for scrutiny where officer checks the date, amount in words and

amount in figures, payee’s name, crossing if any, account number, cheque

serial number, any material alterations / endorsements and signature of the

customer. Account is debited and then the officer cancels cheque. It is posted

in the system and posting stamp and number is affixed on it. Cheque is

handed over to the cash payment officer for payment. One more signature on

that back of the cheque is taken from the holder to match with the first one,

and then cash is paid to the cash detail is written on the back of the cheque.

Cash paid stamp is affixed on the face of the cheque. Entry is passed in the

cash payment register and system.

ACCOUNTS DEPARTMENT

Accounts department is a department which deals and checks all the activity

of all the department .It also deals in expression of finance of the bank. Salary

payment is also one function of the bank.

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CHECKING BANK’S DAILY ACTIVITY

Accounts department deals and checks the entire working of the Branch; all

the vouchers that have been posted at the computer are scrutinized in

accounts department. The “End of Day” i.e. computer print is also received

from the computer. The next day the activity is separated some statements

from the “End of Day”. Then next day activity separated some statements

from the “End of Day”. The vouchers are sorted out head wise. The vouchers

are matched with the entries in the statements.

Any abnormality if occurs, is immediately dealt with. All the vouchers and

instruction are checked individually against the computer printouts. After

checking they are signed by Mr. Naeem Shahzad and the internal auditor Mr.

Shafiq.

OTHER ACTIVITIES

Preparation of daily bank positions statement

Payment of salaries

Preparation of the statements

Depreciation calculation

REMITTANCES DEPARTMENT

Remittance department provides services to the customer of the bank. The

main function of this department is transfer of funds.

INSTRUMENTS OF BILLS & REMITTANCE DEPARTMENT

The instruments that are handled in the B & R department are as follows:

Demand Draft.

Traveller’s Cheque

Telegraphic transfer.

Mail transfer.

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Pay order.

OBC.

IBC.

DEMAND DRAFT

A demand draft is an instrument, which is drawn by one bank upon another

bank for a specific sum of money payable on demand. It is made by the bank

and given to the purchaser against cash or cheque. If two banks are involved,

then one banks sends a DD to another bank. But in customer - Bank case the

customer sends his DD to the receiver.

ISSUANCE PROCEDURE

A demand draft application (Annexure--) to given to the customer, he

fills in a relevant information and signs it.

The Officer in charge then checks the information form.

The charges such as commission, excise duty, postage is charged as

per effective schedule of charges. Tax is exempted if he is taxpayer &

knows his No.

In case of cash deposit the cashier counts the amounts & signs the DD

application and enters it in the register.

The cash received equals the amount of remittance & the cheques

there on.

Then the officer of the bills & remittance department signs it and

operation manager counter signs it.

The entry is made in the DD issuing register.

It is given to the customer.

The vouchers and the DD form given for posting at the computer.

The DD advises are printed at the computer and mailed to the

respective branch.

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NOTE

On the contra, when a DD is received i.e. a customer comes to us with

the DD, the procedure is as follows.

The DD credit advice is received through mail. The No’s are checked

& signatures are verified.

An entry is made on the DD payable register, and the vouchers are

made.

the Branch Dr

DD payable Cr

The DD credit is attached with the vouchers and given for the posting

at the computer.

When DD is received, the test No’s are checked, and the payment is

made.

The vouchers are given for posting. And the entry that was made in

register is closed. i.e. DD payable is Nil.

Traveller’s Cheque

The range of our products and value added services enhances with

introduction of Rupee Travellers Cheques (RTCs) launched in March 2002.

In spite of our constraint on issuing higher denomination of RTCs against

restrictions imposed by the Central Bank of Pakistan we have been striving to

attain our shares with sizeable portfolio. Total volume handled by the

department during the year 2004 is Rs. 798 Million.

The safe way to carry cash.....another Valuable Financial Service

Going places? Don't leave home without the convenience of Askari Travellers

Cheques in your pocket. Available in the denomination of Rs.10,000/-, it's

light, safe and ideal for all travel purposes. Welcome to another valuable

financial solution from your trusted bank.

Free Issuance

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You don't have to pay any service charges for purchasing Askari Travellers

Cheques. You can buy these either against cash or debit to your personal

account. Simply visit any of our branches located all over Pakistan and enjoy

the privileges of buying Askari Travelers Cheques

Earn 0.10% encashment Commission

This matchless feature lets you experience yet another innovative customer

care solution. You will receive 0.10% commission whenever the traveller

cheque is encashed after 30 days of holding.

Enjoy Added Safety & Security

With our state-of-.the-art in-built security features you can be rest assured

that this is the best way to make and accept payments. High security

lithography, ultra violet printing, special thread, anti scanner pyramid design

and unique micro lines, all done and printed in UK gives you the comfort of

dealing in the most safest substitute for cash, easily refundable in case of loss

and theft.

TELEGRAPHIC TRANSFER

A telegraphic transfer is a fastest & safest way to transfer money. The

message is fixed.

ISSUANCE

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The request for maintenance through T.T is taken on the standard

printed form.

The customer fills it & signs it.

The Head & remittance department checks it, the charges such as

commission, tax, telex as per effective schedule and signs it.

If he fills the tax exemption from then no tax is levied.

Then a neat T.T is made on the white slip. There are 3 copies. The

original faxed to the Branch, one to the Head Office and one is kept as

record.

The entry is made in the TT issuing register.

The following vouchers are posted.

Commission Charges Cr

Fax charges Cr

W.H. Tax. Cr

When commission bill is received, it is attached to the T.T office copy

in the file.

PAYMENTS

When a T.T arrives, the test numbers are checked and the signatures

are verified.

The entry is done in the T.T pay able register.

The following vouchers are prepared & given for posting.

Head Office Dr

T.T Pay able Cr

T.T Payable. Dr

party A./C. Cr

If there is no a/c then the T.T receipt needs revenue stamps and then

the payment is made. The T.T receipt is strictly non negotiable.

PAYORDER

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It is a cheque drawn by a bank on itself. Pay order is an instrument in which

the parties are involved the purchase, the bank and the receiver. It can he

purchased by any customer. It is usually made by govt. Bodies. A single bank

is included in this case.

ISSUANCE

The standard form is given to the customer; he fills in the detail and

signs it.

The concerned staff checks the form.

Charges as per effective schedule are applied.

The cash of the pay order is received.

A cost memo is signed, stamped and handed over to the applicant as a

receipt.

Then the pay order receipt is filled accordingly.

Counter foil is also filled.

An entry is made in the pay order issued register.

Then the authorized office after checking the pay order signs it.

The pay order is then handed over to the application after obtaining his

signature on the P.O form.

A voucher is also made and posted at the computer Cr bills payable

account P.O issued.

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PAYMENT

On representation of the pay two authorized officers of the branch sign

order receipt the receipt.

The P.O entry is made in the P.O issued register.

Then the amount is credited to the account of the customer or paid in

cash.

The P.O is posted at the computer.

PAY SLIP

It is an instrument used by the bank s for its payment. The slips are issued to

the employees of the banks their bills & invoices. The bills are transferred

payments. In this case only one bank is involved .He is the issuer as well as

the payer.

Procedure prescribed for P.O for issuance and payment is followed for

payment is followed for pay slips with the following expectations.

Pay slips are issued by the bank for the settlements of this own

payment.

No excise duty is applicable on P.S.

ISSUANCE

A credit voucher is sent from the accounts dept. to the b debt.

According to the b debt.

The P.S books is taken out & filled according to the credit voucher.

It is entered in the P.S./P.O register.

It is signed by, an authorized officer, Operational Manager Mr. Abdul

Jabbar Qureshi.

The pay slips is handed to the customer.

A voucher made and posted payment.

The P.S. is received on the counter, clearing or transfer.

On receiving the P.S. if it is transferred in the P.S. register.

The payment is made and the P.O. is posted at the computer.

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Dr. Bills payable P.S. issued.

If Askari branch is in that city, the OBC forwarding schedule in sent to

that Askari Branch. Otherwise it is addressed to the particular Branch

to whom the cheque belongs.

OUTWARD BILLS FOR COLLECTION

The bills, which are sent to their cities banks for the local clearing in that city,

are called outward bills for collection.

PROCEDURE

The cheques that are banks in other cities are separated.

They are entered in the OBC register, the number is written on the

stamps.

The OBC forwarding schedules are prepared for the different

branches.

The respective cheques are attached with the schedule.

Two authorized officers sign the schedule.

The office copy is filled and the original schedule is mailed.

On clearance the respective banks send back the OBCS along with

IBCA. Inter branch credit advice.

The OBC no are checked for the OBC register and the received any

entry is made.

Charges i.e. commission charges and postages charges are deducted

from the A/C.

Vouchers of following entries are made.

Party A/C Dr

Commission Charges Cr

Postage charges Cr

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At the end of the day the contra vouchers are.

OBC collection Dr

OBC lodged Cr

OBC collection Dr

OBC lodged Cr

INWARD BILLS FOR COLLECTION

The bills are received from other banks out of city for the local clearing are

called inward bill for collection.

PROCEDURE

The OBC of the other branches will be the IBC’s of this branch. So an

OBC forwarding schedule is received by mail.

The cheques are entered in the IBC register. The IBC numbers are

allotted to them.

The cheques are lodged for clearing.

After realization, an IBCA is prepared and mailed to the branch.

At the end of the day two contra vouchers are made & posted.

IBC collection Dr

IBC logged Cr

IBC Collection Dr.

IBC lodged Cr

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OTHER FUNCTIONS

BALANCING THE REGISTER

At the end of the day, all the registers are balanced with the computer

balances. The heads and checked are as follows.

DD payable

IBC collection.

MT payable.

OBC lodged.

OBC Collection.

TT payable.

IBC lodged.

Bills payable. P.S. issued.

Bills payable P.O. issued.

If the payables are not cleared for a lot of days, a reminder is sent to the

respective branches.

CLEARING DEPARTMENTCLEARING DEPARTMENT

“The process by which cheque exchanged between the collecting and paying

bank and the ensuing financial settlement is called “clearing”. This facility is

provided by the state bank of Pakistan for offsetting of cross obligations

between the different banks. Clearing is of two types.

1) Inward clearing

2) Outward clearing

Inward Clearing Inward Clearing

When cheque drafts, etc, of our branch presented to us for clearing by the

SBP. Cheque to be honored by bank.

Outward ClearingOutward Clearing

The cheque of other banks, which the account holder deposit in their

accounts is, sends for collection.

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CLEARING PROCESS (INWARD/OUTWARD)

Here the local cheques are received that are drawn on BAL. All the cheques

are received on one counter along with the paying slips duly filled in properly

containing particulars of cheque and account holder. Counter folio of paying

slip is handed over to the customer by putting stamp for cheque received for

collection for Bank Alfalah on it duly signed by officer. These cheques are

scrutinized and cheques for local clearing are separated from OBCs. These

are then entered in clearing register and cheques for collecting are entered in

OBC register and handed over the bills department of collection. Clearing

officer checks and verifies title of all the cheques deposited by the customer

to confirm the good title of the cheques. Cheques are scrutinized properly and

paying slips are separated from cheques. Special crossing, endorsement and

clearing stamps are affixed on the cheques. Cheques of each bank are sorted

and arranged branch wise. All the cheques are then entered into the clearing

system of bank. Print out of the clearing is taken and details are attached.

With the cheques of each bank. Details of these banks are then entered into

the clearing schedule containing number of cheques presented and their total

amount against the name of each bank. Then total number of cheques

presented to all banks and their total amount is written on the foot of that

schedule, which is tallied with the clearing register.

Next morning, these cheques are delivered to the respective banks in clearing

house of SBP between 9:00 to 9:30 AM. In the same manner, other banks

present their clearing drawn on Bank Alfalah. Total number of cheques and

their amount delivered to other banks are received from them are written on

the clearing house schedule and handed over to the officer clearing house

SBP. Cheques / DD received in clearing are given to the officer cash

department of the branch for their repayment. After I proper scrutiny of

cheques, verification of signatures and confirmation of balance in the account,

officer cash department pays these cheque by canceling and posting them in

the system.

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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. This cheque is entered into the

cheque returned register and bank charges are deducted according to the

schedule of charges.

Second clearing is called at 2:30 PM to check the fate of the cheques

presented to other banks in the morning. If any cheque is to return, that is

delivered to the same bank in second clearing. In the same manner, if any

cheque presented by Bank Alfalah in first clearing is returned, they receive it

and once again give schedule of clearing figure to the officer-clearing house

SBP containing number of cheques and their amount delivered and received

unpaid.

FOREIGN TRADE DEPTARTMENT

Mr. Noor, Mr. Rahat and Miss Samia deals this department. Nature has

distributed its wealth un-evenly. Some countries are rich in human resources

other have mineral wealth in abundance and yet other have arable land and

favorable climate conditions for agricultural production. This un-even

distribution of resources basically determines the productive efficiencies of

different countries.

This is the point where different countries come together to exchange their

competencies and efficiencies. The countries, which lack in any of the

resource, start importing those resources from the country that is having

excess of it. In this way the trade starts between different countries.

Benefits of Foreign Trade:

Following are the main benefits of foreign trade.

o It enables the country to use its resources most profitably and

efficiently.

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o A wide scope is available for a country for its surplus production.

o International competition compels countries to produce quality

products at competitive costs.

o A country can earn foreign exchange by selling its products in

the international market.

Trade Finance Services of ACBL.

With its presence in most export-oriented cities in the country, the volume of

trade finance business ACBL is one of the highest in Pakistan. That is why

most of the companies prefer banking with us. To support the growth of our

business partners' ventures, we offer them a wide range of services:

Documentary Collection

Import Letter of Credit

Export Letter of Credit

Guarantees

Bill Discounting

Pre-shipment and Post-shipment Financing.

Foreign Exchange Department works like the general bank departments with

the difference that it deals in foreign currency. This department deals with the

following:-

Import

Export

Foreign Currency Accounts

Foreign Remittance

Submission of Monthly Reports to SBP

IMPORT:

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The international trade transaction, in which one country buys goods

from other country, is called import.

The import trade in Pakistan is governed by import and export Act of

1950. Previously, the regulating body of imports was controller of Import and

Export. But this function has been shifted to Export Promotion Bureau.

Foreign Exchange Departments of all banks are restricted to word

under the rules and regulations of government.

Import License and Registration:

The individuals and firms who desire to import goods from the foreign

countries are required to obtain import license. Import licenses are a type of

artificial restraint on the import trade of a country. To acquire import license,

the importer has to submit applications to the licensing authority. The

importers can only get their merchandize cleared from the custom authorities

if they have the import license duly issued in their names. The import licenses

issued by the Import Trade Controller are required to be registered with the

State Bank of Pakistan.

Contract of sale:

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

Letter of credit:

Foreign trade payment problems are mainly solved by a letter of

credit. A letter of credit is issued by the importer’s bank. If guarantees

payment to the exporter up to specified amount of money provided the terms

and conditions laid down the L/C are fulfilled.

A letter of credit is a commitment on the part of buyers bank to pay or

accept draft drawn upon it, provided drafts do not exceed a specified amount.

A letter of credit thus is a (I) written undertaking by an importer’s bank

to exporter’s bank. (II) that it will pay or accept draft drawn upon it up to a

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stated amount with a specified time. (III) the payment will only be made to the

exporter if he compliers with the terms of credit.

Parties to a letter of credit:

There are four parties involved in letter of credit.

1. Account party: The buyer or the importer on whose account and

request the letter of credit is opened is known as account party or

opener.

2. Issuing bank: The bank which issues or opens a letter of credit at the

request of importer is called issuing bank.

3. Exporter or seller: The seller or the party in whose favor L/C is drawn

is the exporter. He is also called beneficiary.

4. Negotiating bank: The paying bank in the exporter’s country, on

which the draft is drawn is called negotiating bank or paying bank.

Opening of letter of credit:

The main steps involved in the opening of the letter of creditor as follows:

Application for letter of credit:

The importer will request his own bank or any other bank, which deals

in foreign trade transactions to issue a letter of credit in favor of the exporter.

He will prepare an application on the prescribed form available from the bank.

The information, which are supplied in the application are based on the

contract of sale and include only the important feature of contract, such as

value of merchandise, port of shipment, documents to be presented, port of

unloading, brief description of goods, import license etc.

Scrutiny of application:

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Before issuing a letter of credit, the bank will scrutinize whether the importer

is of good financial standing, possesses the import license issued by import

control. Authorities, the amount available covers the letter of credit applied

for, market demand of goods, collateral offered to cover the credit etc.

Cash margin:

The bank asks the importer to deposit cash or securities with the bank.

The proper margin of cash or securities to be deposited is decided by the

bank depending upon the credit worthiness of the importer.

Issuance of the letter of credit:

The importer bank after being fully satisfied will issue a letter of credit

in favor of the exporter. The L/C may be sent directly to the exporter or the

advising bank in the exporter’s country. In such a case, the advising bank will

inform the exporter about opening a letter of credit.

Shipment of goods:

When the exporter receives L/C, he examines it to ensure that it

conforms to the terms of contract of sales. He then shifts the goods and

presents all required documents along with the bill to negotiating bank.

Role of negotiating bank:

The negotiating bank after receiving all the documents and the bill from

the exporter will scrutinize them whether these conform with the terms of

letter of credit. If the documents of title accompanying the bill are in order,

these will be sent to the importers bank for payment.

Liability of the issuing bank:

On receipt of documents and the bill, the issuing bank will examine

them. If the documents on the face appear to be in order, the payment would

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be released by the bank. In case any defect is found in the documents and

the draft is honored by the issuing bank the importer can claim damages on

the issuing bank. The issuing bank is only accountable for the completeness

of documents, not to see whether goods conform to the contract of sale.

Payment by importer to the bank:

First the importer pays all his obligations the bank then bank releases

the documents. In case of sight draft, the importer’s bank pays the amount on

the same day charging the importing customer’s account. In case of a time

draft, the importer discharges his obligations to the accepting bank on or

before the maturity date of acceptance. The accepting bank will then release

all the shipping documents to the importer.

Payment to the exporter:

The exporter can obtain payment from the negotiating bank by discounting

the draft (L/C) immediately after shipping the goods and obtaining shipping

documents.

2: EXPORT SECTION

The international trade transaction in which one country sells its goods to

other country is called Export.

The controlling body of export in Pakistan is Export Promotion Bureau, it

gives different incentives to the businessmen for enhancing the exports and

reducing the Balance of payment deficit. It restricts the export of some goods

and reinforces export of other.

Export section is another section of Trade Services Department. If any person

wants to sell his or her products in the foreign countries, he can do all that

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with the help of export section of the bank. This department is responsible for

the export procedures and documentation. This department handles export

documents complying with rules and regulations prescribed by the State Bank

of Pakistan. These rules and regulations are briefly described as under.

He must all in to sale contract with the importer.

He must be having account with the bank.

He must have registered himself with CCI&E.

He must have export license from EPB.

He must have income tax certificate that would be only for export

purpose.

He is not allowed to export to those countries for which Govt. has

restrictions for foreign trade.

Full value of goods exported from Pakistan must be declared to

custom authorities.

Documents Required For Exports

Normally following documents are required by the importer that the exporter

must submit to the negotiating bank with the shipment documents.

1. Invoices:

The invoice form is needed along with the export documents which are sent

to the importers bank. In the invoice form different information is provided

regarding the goods to be shipped. It contains the amount, rate, weight,

description, sending and receiving parties names.

]2. Bank Covering Letter.

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This covering letter is very important letter with the export documents, which

are sent to the importers bank. The exporters bank provides this letter. It

contains all the information about parties’ names and addresses, amount,

tenor, date, goods, enclosures and terms & conditions.

3. Shipping Documents:

The shipping document includes the buyers and buyer’s bank addresses,

amount, tenor, shipping source and destination.

4. Bill of Exchange:

The bill of exchange is the negotiable instrument for the payments. This is

also very important to attach with.

5. Packing List:

The packing list is also attached with the documents of export, which contains

the information about the packing of goods being exported.

6. Bill of Lading.

The shipping company issues bill of lading. It means that the goods have

been shipped and that goods are in the custody of the master of the ship. In

the bill of lading all information regarding the goods shipped are give. It also

indicates that payment has been paid.

7. Insurance.

The insurance of the goods sent for exports should also be maintained and

attached with the other documents.

8. Letter of Credit.

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The letter of credit issued by the importer’s bank is also sent to the importer’s

bank after the review and acceptance.

9. Export Form.

This is just like the import form. It is issued by the exporter’s bank, which

contains the information about goods, quality, invoices, port, consignee,

tenor, consignor and mode of shipment.

Foreign bill purchased (FBP):

Following requirements must be fulfilled before the purchase of

Foreign Export Bills.

Exporter should be account holder of the bank. Bank issues the Form-

E. Form-E should be filled correctly and then bank authenticates the E-Form.

Exporter goes to the custom authorities for custom clearance. Shipping

Company issues Bill of Lading or Airway Bill. Exporter should bring other

documents like certificates of Origin, commercial invoice, packing list etc.

Bank scrutinizes the documents.

After fulfilling these requirements, bank purchases the export bill and

makes payment for the value of goods in Pak Rupee to the Exporter.

Lodgment: Lodgment means making the payment to exporter by bank against

the purchase of bill. Two types of rates are used in evaluating the amount:

OD Buying rate/At sight rate: It is the rate of export bill, payment of which is to be received within

12 days from the date of lodgment.

Usance rate: It is the rate payment of which is to be made at a future date,

normally within 30, 60, 90, 120, 150, or 180 days.

Realization:

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Realization means receiving the payment from the foreign bank for the export of goods.

Other activities: In addition to Export and Import, there are also other activities

performed in Foreign Exchange Department.

1.Foreign currency accounts:

A depositor can open account in US Dollar, Pond, Japanese Yen and Euro

with nominated branches. For opening of account a Form is provided to the

person/party, introduction of the new account holder or by the Officer of the

Bank. Procedure of opening foreign currency accounts is same as other

accounts. No Zakat is deducted on these accounts, no income tax

deductions, no wealth tax deduction will be there, these incentives reinforce

and motivate the people to invest in foreign currency accounts rather to keep

foreign currency idle.

2. Foreign remittance:

Bank also operates in Foreign Currency accounts. In accordance with

instructions of SBP, foreign currency accounts are opened in these

currencies: US Dollar, Pond, Japanese Yen, Euro. Funds are transferred

abroad by Foreign Telegraphic Transfer Swift MT-100 is used for this transfer.

Askari Commercial Bank has its agency arrangements in those countries,

where its own branches are not established. Its agency arrangements with

Citi Bank, American Express, ABN Amro, Standard Chartered Bank.

Submission of monthly returns:

It includes reporting of Form-M and Form-E to SBP.

Reporting of Form-E:

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Every Exporter is required to submit a declaration of custom

authorities for goods exported. This declaration is submitted on prescribed

Form-E in quadruplicate, which is certified by authorized dealer. Four copies

of Form-E are maintained. Form-E is reported to SBP at the end of the month,

in which the amount is realized. There is a prescribed Performa used for the

reporting of Form-E. It includes the reporting period, currency, Serial No. of

Form-E, amount, Code No. of country and commodity.

Reporting of Form-M: Every foreign bank deducts some charges form the value of goods.

It is for miscellaneous purposes like foreign bank charges or foreign agent

commission. Form-M is used to declare this outflow of foreign currency. At the

end of the month of realization of the amount, Form-M is reported. It includes

the list of Serial No. amount and purposes of every Form-M.

REFINANCING SECTION

Refinancing is the credit facility for the exporters provided by the Govt. at

lower rate of interest, just to boost the exports in the country. It was started in

early 70’s. The interest rates are always changing in this facility. The state

bank of Pakistan charges 8% and then bank will charge 10% from the

customers. For banks this is free source of income because in this way funds

of banks are not used.

Refinancing is further divided into two parts.

Finance against Packing Credit (FAPC).

Finance against Foreign Bills (FAFB).

1. FAPC Loan:

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This loan is on the basis of export contract. The shipment amount should be

equal to the loan amount. It is approved within 48 hours or otherwise

disapproved. If approved, the amount is credited in the account of the party.

This is also called pre-shipment loan.

2. FAFB Loan:

This loan is under L.C. It involves the bank risk line because of the

transactions between the banks. This loan is given against security and this is

called post-shipment loan.

CREDIT DEPARTMENT

Credit department is also one of the most important departments of the bank.

It is called the mind of the bank. This department controls the affairs of bank

related with the finances or loans.

The credit department of Emirates Bank International also performs the

functions relating to the credit administration and credit accounts. It performs

following functions.

Products & Services of Credit Dept.

Our Credit and Marketing Department aims at providing complete financial

solutions for its customers. Skilled professionals deliver contemporary

corporate banking services in a personal manner. Committed to maintaining

stable and long term relationships with our customers, Askari Commercial

Bank combines personalized services with technological capabilities to deliver

sophisticated banking solutions.

Products and Services offered include:

Trade finance

Short Term Working Capital Finance

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Local Currency Syndication Finance (Foreign Currency Syndication

can also be arranged)

Medium Term /Long Term Finance

Term Finance Certificates

Offshore Loans

Advisory Role (Balance Sheet Restructuring).

OBJECTIVES OF LENDING.

In the modern economics, more than 90% business concern raises their

funds from various financial institutions to meet their multifold transaction.

Actually it very difficult for the modern businessman to run his business on a

huge scale solely. He has to float his shares to the public or knock the doors

of financial institutions, for example the banks.

The most easy way to make fund available to seek assistance by such

agencies including banks which have got surplus funds and will come to the

assistance of producing units, distributing units and exchanging units. In this

way of lending, the banks earn the profits in term of interest and mark-up.

Selection of Borrowers:

The selection of a reasonable and trustworthy borrower is complicated and at

the same time very sensitive task which requires decision-making power from

the bank employees. In the words of the manager of a branch of Askari

Commercial Bank.

“ Good selection of borrowers does the half task in the profit of the Bank.”

So banks do not throw the money away but every application is tested

carefully before being sanctioned. It is the policy of Askari Bank to provide a

outline to all of its branches and on the basis on those requirements the bank

select the borrower.

Following are the main points, which are considered before lending.

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1. Character:

The bank inquires the character of the borrower in every aspect. Because this

is the right way to judge his dealing and business tactics. When the bank get

sure that this person has good relationship with us and in the business

market, they give him the facility of credit.

2. Capacity:

This factor is related with the ability of the borrower to manage his business

successfully. So this is checked that either they have necessary

management, accounting and technical skills and the degree of experience in

the particular line of business for which the finance is required. This ability of

the customer can be judge from the trading results, turnover ratios, and

collection of receivables and management of accounts payables.

3. Capital:

The proportions of the borrower’s own resources to the account of finance

requested are the next point to receive the branch manager’s attention. This

is checked that both the amount of loan required by the person is equal to his

resources available in his business and will he be able to cover them out of

his resources.

4. Cash Flows:

The source of repayment should be ascertained at the beginning. For

this purpose the financial worth of the customer is checked that either he is

able to repay the loan by the sale of his inventory or from realization of the

accounts receivables, then the loan is sanctioned.

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5. Collaterals: Security is to be correctly looked upon as the second source of

repayment. As we have discussed that this is one of the most critical

decisions for the credit management to sanction the loan that’s why they

require any collateral by the customer for the security of the loan. In case the

borrower is unable to pay his debts then the amount can be recovered by

selling the collaterals.

6. Purpose:

Another important factor, which is taken into the consideration by the bank, is

that for what purpose the loan is being sanctioned. If the customer wants to

get the loan for business purpose then he is given the preference over when

he wants to get loan for personal use.

7. Period:

It is the policy of every lender that first the period of the loan is decided.

Normally the short-term loans are preferred to be sanctioned because of the

lesser risks available. ACBL Bank has its own policy of lending. It only

sanction the loans for short term period not for the long term period, normally

these are less than or equal to one year.

CLASSIFICATION OF ADVANCES

The loans and advances given by the bank are classified into two parts.

Unsecured or Clean Advances.

Secured Advances.

1. Unsecured or Clean Advances.

An unsecured advance is made against the personal reputation of the

borrower with the bank. Normally these advances are given to the regular

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customers of the bank and have maintained a good dealing with the bank for

many years.

The policy of Askari Commercial Bank is to avoid such clean advances

because of the unsecured nature.

If the party is unable to repay the loan then it becomes very difficult for the

bank to collect the loan. That’s why the bank uses this policy just to give this

type of loan only to the exceptional customers.

2. Secured Advances:

The word security means any thing given to protect the repayment of an

advance. This is the policy of every financial institution to provide the secured

loans to the customers. So secured loans are those, which are backed by the

tangible security. A tangible is that which has a physical existence for

example

Land and Building.

Stocks.

Share certificates

NIT Units.

Security of Cash in his Account.

TYPES OF ADVANCES:

ACBL normally classify the advances into the following three major types.

Agricultural Advances.

Commercial Advances.

Industrial Advances.

1. Agricultural Advances:

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Agricultural advances are available for each of the following spouse.

2. Farm Credit.

These credits are provided for purchase of inputs development of agricultural

land. Following are two main classes of farm credit.

3.Production Finance.

This loan is provided to farmers for purchase of inputs like seeds, fertilizers

and pesticides.

4.Development Finance.

This loan is provided for the development of agricultural land like purchase of

tractors, for tube well and for watercourse improvements etc.

The basic purpose of these is to boost up the small agricultural

industry to provide the opportunities of earning in agricultural sector.

Non Farm Credit

Following is the different type of small agriculture industry for which this loan

is granted.

Live Stock.

Fish Form.

Dairy Form.

Forestry.

Sericulture

2. Commercial Advances:

These are the advances which are given to the small business men,

who want to start the business on a small scale. Such loans or advances are

not of large amounts but of small amounts.

3. Industrial Advances:

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These advances are sanctioned to the industrial persons. The

industrialists who are running their businesses on a large scale can get the

facility of these advances. These advances are in large amounts required for

the import and exports of the goods and services. These advances are given

on the credibility of the parties.

Credit Administration:

When some one wants to obtain the loan and his loan is approved,

the work of credit administrator starts. He prepares the documentations

relating to the advances of the account holders and makes the further

processing. He also prepares all the related reporting and then sends it to the

head office. He also maintains the documents, which are required by the state

bank of Pakistan. The filing of all the legal cases is also maintained by the

credit administration. After that the officers maintain the credit accounts and

ledgers of the customers.

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CREDIT CARD DEPARTMENT

Mr. Shafeeq deals this department. He told me that the bank is authorized to

issue the credit card of two companies, which are under bank of America.

Master Card

Visa Card

But due unavailability of visa card machine in Multan, ACBL Multan branch

deals only Master Card.

There are following types of master card.

Silver card

Gold card

These are different due to their credit amount limit. For example for silver

card, cardholder can take the maximum amount ranging between Rs.

25,000 to Rs, 180,000. For gold cardholder this limit has been Rs.

180,000 to 500,000.

ISSUING CHARGES

When the card is given to cardholder, there are certain fee charges to by

the bank, which is different for different cards.

Silver cardholder is charged Rs. 1700.

Gold cardholder is charged Rs. 3500.

ISSUING PROCEDURE

Credit card is issued to three types of parties.

Professional (Govt & private officers)

Business man

Landlord.

PROFESSIONALS

For professionals bank require

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Authorized letter from the concerned organization in which he works.

This letter shows all particulars about the person, on the basis of these

particulars; bank open on account and some feasible amount is

required.

BUSINESS MAN

In the case of businessman bank need

Balance sheet of businessman.

Type of business.

Turnover of 5 years.

And then when it is sured that the business has the ability to cover the

expenses of credit card and to pay it at any time, the bank issues the credit

card.

Land Lord

In the case, the person is totally new, and the bank doesn’t know anything

about him. For this bank need an account having the amount over and above

the credit card limit of that credit card. Usually, there is more chance of

default in this case; so, the bank avoids issuing credit card to that person.

PAYMENT PROCEDURE

The cardholder should have to pay all the amounts what he has consumed.

But in order to facilitate the cardholder, 5% is the minimum limit that the bank

requires and that should be paid monthly. If you paid only 5% then 2%

interests will be charged on remaining amount and it is added into the next

month payments.

If that 5% is not paid then Rs. 100 are the additional charges charged to the

next month payment apart form the 2% interest.

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FUTURE PROSPECTS

The outlook for the rest of the year 2006 remains challenging and is

dependent on the success of the Government’s economic policies and n

improvement in the investment climate. The bank’s commitment and

endeavor to excel in rendering contemporary banking services along with

acceleration of business mobilization will, Inshallah, further enhance the

portfolio of its business, and the profitability, in the ensuing half-year.

LEARNING AS A STUDENT INTERN:

There are following learning points for me in the bank.

First week

Duties

In my first week in Askari Commercial Bank commercial bank, they assigned

me work in Account Opening Department.Mr Bilal Mehmood trained me very

nicely and I learned lot of things in this department. He told me diffrenet

accounts names and their codes.How to open the account .

New Computerized national identity card is must for opening of new

account.

For current account 10,000 and for saving 5,000 are required.

What are the necessary requirements of different accounts to be opened.

Other activities are

How to fill the deposit Slip if anyone wants to transfer cash in the

account or online transfer

How to fill the different accounts Form

How to fill the voucher for issuing of the Cheque Book for the first time

How to fill the requisition slip for the second time issuance

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How to issue the Cheque Book

How to enter it in the register

What are the procedures for the ATM card

Accomplishments

I m fully trained in this job how to open the different accounts ,how to

issue the cheque book and enter it in the register and how to transfer the

amount through cash or cheque to an account and how to issue a Debit Card.

Second Week

In the Second Week they assigned me work in Clearing Department.Mr

Jibran trained me very nicely and I learned lot of things in this department.

Duties

There are two types of clearing.

1. I/W (Inward clearing)

2. O/W (Outward clearing)

In this week I entered the cheques lodged for inward clearing in clearing

register as their cheque number account holder name cheque amount and

bank name amount to be paid.

Secondly in this week I prepared (O/W) clearing for next day. Same as

entered cheque number account holder name amount and Bank name.

In this week I also entered cheque return in cheque return register and put

cheque return slip on cheque.

Accomplishments

I am full trained now in this particular job . How to fill cheque return

slip? How to enter in I/W ,O/W clearing register.

Third Week

Duties

In third week I perform following tasks relating to the banking system.

1. IBC (Inter bills clearing)

2. OBC

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In this week I worked for IBC (Inter bills clearing) . IBC mean cheques lodged

for clearing

From other city. I entered these cheques in IBC register if it is ACBL cheque

then Mr. Jibran cleared or return this cheque and if it is cheque of other bank

then it is again entered in O/W clearing registered and lodged next day for

clearing.

Secondly in this week I prepared OBC, filling of OBC slip as cheque number

their amount OBC number and branch name.

Accomplishments

In this week I repeatedly performed this job and now I am fully trained in this

job.

Fourth Week

In Fourth week they assign me work for Remittances Demand draft and Pay

order preparation.

Duties

Demand draft is for payment outside of city and pay order for local payment. It

is a secure source of payment.

There are no charges for Pay order while other banks charge for this service

so it is an advantage going to ACBL bank to attract customers.

Accomplishments

In this week I repeatedly perform the jobs and I aIn m fully trained in such

type of operations i.e to make the DD,Pay order and mark the Charges if

Customer is not account holder of the Bank then 255 Rs commision of the

Bank.

Fifth Week

Duties

In this week I worked in Accounts and Cash Department.

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In fifth week they assign me work in cash department.

In cash department I learned about Receipts and Payments and about how to

receipt cash and how to enter it in computer.

In Accounts Department how to sort the Voiuchers and preparation of

Salaries

Accomplishments

I am fully trained in this job i.e to check that all the vouchers are acrutinized

and matched with the activity

Sixth Week

Duties

In Sixth Week I worked in Forein Exchange and in Credit Department.

They told me brief introduction about import and Export. Necessary

Requirement about the Letter of Credit .What Documents are required for

Import and Export

Secondly in this week I learned about Advances from credit manager Mr.

Ateeq. What are requirements for loan. It is a procedure that takes many days

Accomplishments:I In this week I m fully Trained in these jobs

Problems faced by branch:

During my internship at this particular branch of ACBL, there are following

problems I have found which are directly affect on efficiency and performance

of the bank. There problems are also called as an internal problems. So

these are discussing below

1. Lack of communication among the employees:

During the period of my internship I found this problem as a biggest problem

that, they are not very effective in communication between themselves. They

do not share the experience with each other and do not care the other

employee. If one employee has a problem, then he asked to other, but he

does not give clear solution to that problems. They are shows the facial

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expressions against each other.They are talk against each other in front of

me. So finally it is very needy for a public services organization to keep

atmosphere friendly among the management and employees.

2. Low Efficiency of employees:

Efficiency of employees is also low at this branch. For example Mr. Assad

Bhutta manager has 3 years experience at ACBL but he is not professional.

Where he assign the result is zero. During my internship no body was satisfy

from his performance.Sometimes he has done wrongly postings.

3. lack of computing skills:

Computing skills are also low, some executive are very efficient in computing

skills but some are not totally aware from this system. For example ATM

machine at this branch is only handled to Mr. Naeem Shehzad manager.

When operation manager is on leave branch faces problems about ATM

machine.

4. Misuse of resources:

Resource are very needy, so there must be avoid to misuse the resources but

in this branch it is reverse case, there is very wrong use of the resources,

employees does not take care of resources and not used them in right

direction. For example every person misuse telephone service even guards

they use it for personal matters.

NEW KNOWLEDGE ACQUIRED

During the internship there is practical knowledge acquired about the banking

sector. What activities are performed by banks and how to deal with public?

Also commitment about work and operations of banks. Financing and credits

and other public services are performed by the banks. What are

implementations of banking rules in banking sector? And much learn about

the various executive’s experiences and their skills. What is role of higher

authority (manager) in decision making and how to solve the problems? How

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much money or reserves are used to meet the requirements in the branch.

What are the duties of operation manager and how to pay cheques and all

procedure relating to opening account in the banks?

How Experience Impacts My Career

I have gained a lot from my internship.I am doing Specializaion in Finance

and in ACBL Bank I have learned a lot of work related with Finance .This

helps me a lot to complete my specialization.My communication and

negotiation skills are very much improved.How to Communicate with the

professional People.

ACBL is a very well known Bank and its products and services are very vast

and customers are very much satisfied with the Bank.Its a lerning

organization.ACBL is now emerging as one of the competitive banks in the

banking sector.Doing internship in Askari Commercial Banl also helps me a

lot for finding my job Inshallah in the future.

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SWOT ANALYSIS

SWOT (Strength, Weaknesses, Opportunities & Threats) analysis of

ACBL is described below:

Strengths:

As ACBL pursuing the path of Excellence

customer satisfaction remains its priority. It is only when we know our

customers better, can we deliver a higher quality of services, thereby

adding synergy to our existing management expertise, financial

strength and profitability.

Bank Chairman Message ”our core philosophy of honesty,

transparency in customer dealings, product innovation, excellence in

customer service and our commitment to being a responsible

corporate citizen”

ACBL has got a well-developed on-line system in most of its branches.

Remittance Department is working very dfficiently in transferring the

funds of people due to this system.

The bank has also started ATM facility in most of its branches. 24-hour

banking is new trend in Pakistan and ACBL has also taken apart in this

trend.

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One distinctive feature of the bank is that it is the only bank working for

the welfare of army officers, which was established by Army Welfare

Trust.

The productivity of the bank is very good. Bank is providing a high

quality service to its customers.

Askari Commercial Bank developing & delivering the most innovative

products, manage customer experience, deliver quality service that

contribute to brand strength, establishes a competitive advantage and

enhances profitability, thus providing value to the stakeholders of the

bank.

Most of the customers are satisfied with the bank services and friendly

environment of the bank.

In comparison to other banks Askari Commercial Bank providing high

excellence services like home, car, agri-financing, which facilitate bank

to get market excellence and move towards prosperity and

development.

Customer’s behavior shows that they feel proud to being as an account

holder in Askari Commercial Bank and also refer people to enjoy

different schemes and open their accounts.

Customer gives suggestion for the improvement of bank and these

suggestions are listened carefully and communicated to the higher

management so that action taken on relative deficiencies immediately.

Bank having good friendly environment, security system concentration

like cameras installed and security guards available all the time.

ACBL have strength that most of the imports which are done in Multan

are handle by ACBL Multan.

Weaknesses:

ACBL has lesser number of branches as compared to many other

branches. Due to this problem, army officers can not avail the benefits

of their own bank.

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The human resource department is not performing the function of

selection and recruitment very effectively. Selection process is not on

merit due to which competent persons cannot be selected.

The majority of people are not well aware about the products of Askari

Commercial Bank. Therefore it should advertise extensively especially

home, agri & car loans Credit Cards.

Mismanagement of time is another big mistake in Askari Commercial

Bank branches, the bank official time of closing is 5:00pm but due

Mismanagement of time employees leave their desk at 8.00pm which

is so hectic and cause employee frustration.

A behavior has been noted that bank tries to feel at ease with good

looking rich and educated people and the un-educated and old

customers feel some bit strange in the environment of the bank.

Proper guideline should be given to the customer about bank products.

They facilitate with current information. Many of the customer’s

complaint that there should be two or more person who will guide

people at entrance where they have to move, concerned person and

department, teach how to fill forms, slips and cheques.

The number of cash counter must be increased because the customer

have to wait at peak hours on the counter for deposit, withdrawals and

online.

Bank is not introducing new products and new saying schemes. Bank

should boost the product development and increase the range of

facilities offered for customers.

Bank is weak in its credit management. Bank should lend to very

sound parties and increase its payment rate.

Opportunities:

The policies of the new government to uplift the economy and pursue

financial sector reforms are expected to yield positive results in the

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banking industry of the country. The Askari Commercial Bank is very

well praised to avail promising opportunities.

Govt. is taking very bold steps to promote IT in Pakistan. ACBL has an

opportunity to improve in technology.

Stock exchange is very volatile and takes immediate effect. So, in the

time of crises, conservative investors return to saving deposits.

ACBL is surrounded by many competitors. It has an opportunity to do

aggressive marketing to increase its business.

As a result of the different steps taken by the Government regarding

the betterment of the economy, small borrowers are attracted to get

the financing and start small businesses. So, the Askari Commercial

Bank has an opportunity to attract the customers by giving them

attractive schemes.

The need of privatization has made people to switch to banks to satisfy

their needs of lending and borrowing. This not only increases the

deposits but also the credit business.

Modernized banking system with highly integrated informative system,

record kept properly, online banking, and integrated circuits between

branches and personal computer provided at every desk.

Higher management committed to the development, quality, and

continious improvement.

Salaries are very reasonable, so the employees are not financially

disturbed and they devote theirselves fully to their work.

Entertainment facilities are available in the Bank when customer goes

to the Bank for a longer time they will enjoy newspaper, magazines,

television and serve with tea, soft drink, sweets and snakes etc.

Threats:

Askari Commercial Bank has many competitors who are continuously

increasing their products and marketing aggressively it may cause its

customer to shift to its competitors. The Competition has become

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severe by the entrants of so many banks, So to exist one will have to

prove himself in its services through excellent management and will

have to satisfy its shareholders. Otherwise it will be out of the market.

The decrease purchasing power of consumer in the current economic

situation of the country affecting the business activity speed too much

and the result is the low investment from the investors in new projects

can create problem for the bank because it is working a lot in trade.

The privatization of other banks is also a threat for the Bank. Due to

the privatization of the different bank e.g. MCB; the competition has

increased a lot. Furthermore many private banks have come in the

sector due to which it is becoming more difficult day by day to attract

the customers.

Some other banks have competent taskforce, which is also a threat for

ACBL. Because human resource is the most valuable resource.

The biggest threat in the banking sector is the continuous downfall of

the country economy since the last few years. If this downfall remains

for more few years then it may be the great hindrance in achieving the

Bank’s objectives.

Pakistan India relations often create a war danger. This chance of war

may cause army officer and their families to increase the frequency of

withdrawals, which would decrease deposits.

CONCLUSION

I observed the Askari Commercial bank a financially sound bank. Its profits

are increasingly year-by-year. Its staff is very good and sincere with the bank.

Askari Commercial Bank Multan under the leadership of Sajjad A Sheikh has

made significant progress in building and strengthening both the corporate

and retail banking sectors in Pakistan.

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Askari Commercial Bank views specialization and service excellence as the

cornerstone of its strategy. The people at bank realize that innovation;

creativity, reliability, customized, services and their execution are they key

ingredients for their future growth.

Revenues from these activities have started yielding dividends and they

expect significant growth. They are aware that they have stepped into the 21st

century and they must meet its challenges by acquiring the highest level of

the technology. They will thus be accelerating their technological advance to

enable them to distribute their products and services through most efficient

and high tech means. They say that they will continue to invest in the modern

tools and substantial allocation to resources will be made to achieve this

objective during the current year. Online banking have been started and the

introduction of ATM at strategic locations have been firmed up.

RECOMMENDATIONS

This is the fact that in this universe nothing is perfect. In every field of life

there are some pluses and minuses. But the best institutions are those, which

learn from the changing environment and competition. So it is necessary for

them to keep them update with the changing environment.

Although ACBL Multan Branch is one of the good branches in Multan but

there are few points that should be improved for more perfection.

Marketing department is very active but the feedback or the follow up

of the customers should be improved.

As every thing is computerized in ACBL Multan, the persons should be

properly trained in the computer systems.

As we have discussed that this is one of the busy branch in Multan

market, its building is not as per the requirements of the branch. So the

building should be further expanded and there should be more space

for the sitting arrangements of the customers.

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The ATM service should be provided 24 hours. Because customers

feel upset when most of the times the machine is out of order.

The staff should be decreased in Foreign exchange Dept.., Credit dept.

because the building under operation is in adequate for such a large

staff.

Under no circumstances cheque book should be given to the customer

if the account formalities are incomplete

Cheques, which are drawn on Askari Commercial Bank Branch and

returned unpaid in clearing, are not reflected in the statement of

account of the customers. These cheque must be reflected in the

accounts so that credibility of the customers may be assessed.

Audit should be held internally, rather there should be an audit

department in the branches to make audit on daily basis. This can

become so, helpful as a different banks are having this department of

their own.

When giving the loan, the Bank must carefully analyze the past six

months transaction history of the borrower. This will help in the

judgment of the dealing behavior and financial status of the client. In

most cases, this thing is not properly done and this is the major reason

for the default of many clients.

The Bank should try to give more loans to the small borrowers as the

past history shows that most of the loans given to the corporate

borrowers have converted into bad debts

Evening banking should also be started in this branch.

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