management of habib bank ltd pakistan

1.1 INTRODUCTION OF HBLIt is the prime Bank in country established in 1941 having a registered head office in

Karachi. It was nationalized in 1974, but recently on 26 th February 2004 it has been

privatized by Government of Pakistan and is taken over by Aga Khan Fund for Economic

Development (AKFED). They acquired 51 percent of shares of HBL.

It is one of the largest Banks of Pakistan with 1439 branches and having total assets of

Rs. 434,931,930,000.

1.1.1Brief History of HBLHBL at its present state has a long and rich history of deeds and sacrifices. All this has

been possible on the account of sustained efforts.

The first branch of HBL started functioning on 30th August, 1941 at Muhammad Ali

Road Bombay, where Quaid-e-Azam Muhammad Ali Jinnah first of all opened his

personal account. Mohammad Ali Habib was a man of stern and persistent will. God.

Almighty had bestowed him with extra ordinary capabilities. He was devoted to his Bank

with a view to take his share in the uplift of the strife-torn and devastated Muslim

community. At the time of its inception, the Bank's total paid up capital was Rs.2.5

million but it is evident from the following data that the Bank experienced a steep rise in

the business in a few years.

In 1942, on the desire of Quaid-e-Azam, Habib family migrated to Pakistan and later on

shifted the Bank's Head Office from Bombay to Karachi on 7 th August, 1947 just one

week prior to independence, to play its pivotal role in the development of this newly born

country.

At the time of independence, the areas which now constitute Pakistan were producing

only agricultural products raw material for indo-Pak subcontinent. Partially no industries

were there to process the raw material, therefore the raw material was exported from

Pakistan. There were 19 non-Indian foreign Banks which were engaged in the export of

crops from Pakistan with only two Pakistani Banks i.e. HBL and the Australia Bank. The

circumstances were completely un-certain. The confidence of the people had been shaken

by the un-friendly environment and till the time peace had not been restored, people

would naturally have been interested in other things. The nation was quite young with

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M. ISMAIL L1F07BBAM0001 UCP LAHORE

extreme scarcity of resources and these definitely added to the difficulties of the govt., to

run its own Banking system immediately.

Following the announcement of the independence plan in June, 1947, the Hindus residing

in the territories now comprising Pakistan started transferring their assets to India and

vice versa. The Banks included those having their registered offices in Pakistan,

transferred them to India in order to bring a total collapse of the new state. It had been

decided that the Reserve Bank of India would continue to function in Pakistan so that the

problem of demand and time liabilities, coinage, currencies, exchange rate etc be settled

between India and Pakistan and the Indian Notes would continue to be legal tender in

Pakistan till 30th September, 1948. Again due to certain differences between Indian

Pakistan, the Indian Govt., withheld Pakistan's share of Rs.75 core in forward and

subscribed heavily to the Govt. of Pakistan to the tide over the crises, Payment was made

to the Govt., by the Bank at a very nominal rate of interest, even before the actual issue of

securities.

At a time when this newly born country was at whirlwind of crises, it was HBL which

fulfilled generously the financial needs of all its sectors, paid salaries to the employees of

all Govt. departments, helped in the establishment of State Bank of Pakistan which the

Quaid-e-Azam inaugurated on July 1st, 1948. HBL after partition opened its branches

throughout Pakistan to provide finance and other facilities to the business community. In

association with HBL, the Govt. sponsored Pakistan Finance Corporation Limited for

financing of cotton. The Bank helped handsomely in the construction of WARSAK DAM

PROJECT, WAPDA, & K.D.A. by provided finance and other facilities.

Another innovation introduced by HBL is the evening Banking cash long after the

crossing of normal Banking hours. It was also the first in making available such new

facilities as Gift Cheques, Rupee Traveler’s Cheques, Credit Card System, short term and

long term schemes for small businessmen.

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1.1.2 MISSION To be recognized as the leading financial institution of Pakistan and a dynamic

international bank in the emerging markets, providing our customers with a premium set

of innovative products and services, and granting superior value to our stakeholders –

shareholders, customers and employees.

OR

Opening new horizons and fresh perspectives of trust, dependability and service through

1425 domestic branches and 112 overseas offices with a comprehensive range of

financial products.

1.1.3OBJECTIVES OF HBL Following are some of the main objectives of HBL.

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

To promote and boost up business sector inside the country.

To provide employment opportunities to people.

To help in development and industrialization of the country.

To provide loan and advances to help out in self employment schemes.

1.1.4SYMBOL OF HBL

Symbol depicts

Bismillah ============Islamic Culture and Values

Sword ============== Power

Lion================ As a symbol of strength

1.1.5CORE VALUES OF HBL

HBL is firmly grounded with a corporate philosophy that incorporates five solid values

which each individual associated with the bank abides by.

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1.1.5.1 Humility

HBL encourages a culture of mutual respect and treats both their team members and

customers with humility and care.

1.1.5.2 Integrity

For them, integrity means a synergic approach towards abiding their core values. United

with the force of shared values and integrity, they form a network of a well-integrated

team.

1.1.5.3 Meritocracy

At every level, from selection to advancement, they have designed a consistent system of

human resource practices, based on objective criteria throughout all the layers of the

organization. HBL is therefore, able to achieve a specific level of performance at every

layer of the organization.

1.1.5.4 Teamwork

Their team strives to become a cohesive and unified force, to offer the customer, a

service beyond his expectations. This force is derived from participative and collective

endeavors, a common set of goals and a spirit to share the glory and the strength to face

failures together.

1.1.5.5 Culture of Innovation

Their aim is to be proactively responsive to new ideas, and to respect and reward the

agents, leaders and creators of change

1.1.6CORPORATE BANKING

Only local bank with special focus on Corporate Banking with a presence in all major

locations through out the country, offering full range of Banking products / services and

one window interface through designated Relationship Managers. Our large equity base

allows us to take longer per party exposures to meet the needs of the largest corporate &

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our extensive local & foreign network allows us to imperiously service our clients.

Corporate manages well diversified portfolio, and include most of the top tier names of

the market. Corporate Banking offers tailor made products / solutions as required by

corporate customers which includes:

1.1.6.1 Key Features of Corporate BankingFunded facilities, ranging from short to medium and long term lending

Trade related financing.

Foreign currency financing.

All sorts of non-funded facilities / services which include Cash receipts /

payments, Remittances, Collections, guarantees, letter of credit etc..

Customized products / solutions

2.1 Departments of HBL

There are few departments on which general or day to day banking of HBL composes.

There details are as under:

Deposit department

Clearing Departments

Inland Remittance Department

Bills Departments

Advances Departments

Cash department

CD Department

Foreign Exchange Department

2.1.1FUNCTIONS OF DIFFERENT DEPARTMENTS OF HBL

The basic functions of different departments HBL are as follows.

Accepting deposits

Making Loans and advance.

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2.1.1.1 Accepting DepositsThe primary function of HBL is to accept and receive surplus money from the people,

which they willingly deposit with the Bank. Like all other Banks, HBL also take

incitation to attract as much depositor’s as it can. They offer different deposit schemes to

its customers, which includes the following types. These schemes as follow.

2.1.1.1.1 Current DepositsThis type of account is often maintained by the business Current deposits are those deposits

on which Bank offers no interest but it allows the account holders to withdraw their

money at any time they want without giving any prior notice to the community, which

requires large sums of money very often for their business transaction.

2.1.1.1.2 Profit and loss sharing account (Saving)Saving deposits or PLS are those accounts on which Bank offers a lower rate of interest.

After the Islamization of the Banking system in the country it has been given the name of

PLS saving account. The Bank undertakes to repay deposits on demand up to a certain

amount.

2.1.1.1.3 Fixed depositsFixed deposits are those which can be withdrawn only after the maturity period. In this

type of deposits the Bank allows high rates of interest depending on the time period of

deposits. The shorter the period of deposits, the less will be the interest and vice versa.

2.1.1.2 Making Loans and advancesThe second most important function of HBL is to provide financing facility to its

customers. These loans and advances are usually made against document of title to

goods, marketable securities, and personal securities. HBL charges different interest rates

on these loans and advances depending on the terms and conditions settled with the

customers. Following types of loans and advances are made available to the customers.

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2.1.1.2.1 Demand FinancesDemand finances are those finances which are given to the borrowers for specified period

and can be called back without any prior notice. It is a single transaction finance. It can

be long term, medium term and short term. Mark up is also charge. Here the amount can

be withdrawn once at the time of disbursement.

2.1.1.2.2 Running FinanceHBL provides these finances against the security of current assets like shares, bond, cash

crops like cotton and other cashable commodities. The borrower’s account is opened with

the Bank with the amount of the total loan provided or allowed to the borrower. The

borrower is allowed to withdraw any amount from his account within the specified limit

and interest is charged only on the amount actually withdrawn.

2.1.1.2.3 Over DraftThis type of facility is usually given to very loyal clients. This allows them to withdraw

over and above the amount held by them in their account, and interest is charged only on

the amount, which is withdrawn in excess of the amount actually held in their account.

2.1.1.2.4 Discounting bills of exchangeDiscounting bills of exchange can also be considered as a form of loan because it allows

the holder to get the bill encased before the maturity period. A bill of exchange is usually

issued by the importer of goods to the exporters, which allows them to be paid in their

own currency after three months time. If the exporter needs the money before the

maturity of the bill of exchange, he can get his money from the Bank by discounting the

bill of exchange. The Bank utilizes their surplus funds by discounting the bills of

exchange at their market worth i.e. Bank pay to the holders of the bill on amount equal to

their face value after deducting interest at the current rate for the maturity period of the

bill.

our stated objective of being a premier emerging market Bank.

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2.1.2PRODUCTS OFFERED BY HBL

2.1.2.1 Tele-printer serviceIntroduced in 1952, this system helped the Bank to improve its services.

2.1.2.2 Rupee Traveler’s ChequesIt was introduced in 1957. Here the customers are provided the facility of encashment of

their traveler’s cheques through any branch of the Bank.

2.1.2.3 Small Factory Owner SchemeIn 1959 the Bank offered loans to small scale producers under the “small factory owner

scheme” in order to boost the economy of Pakistan.

2.1.2.4 Foreign Tele printer ServiceIt was introduced in 1961. The idea behind this scheme was to provide quick and prompt

Banking services to customers in foreign countries.

2.1.2.5 Gift cheques schemesIt was launched in 1962. Under this scheme, the Bank provided customers with pre-

printed cheques of various denominations which could be used to send gifts to their loved

one on various occasions.

2.1.2.6 School BankingThis scheme was introduced in 1962 to provide Banking services to children in a number

of schools though out the country.

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2.1.2.7 “Drive in” BankingHBL established “Drive in” branches in 1962 at various major cities of the country where

the customers could avail Banking services without getting down from their vehicles.

2.1.2.8 Mobile BankingIt was introduced in 1962. The feature of this scheme is to provide Banking services to

the customers residing in the rural areas.

2.1.2.9 Night safe schemeIn 1962 the Bank offered facility to their customers to deposit their valuables at night in

specified branches of the Bank.

2.1.2.10 Computer accountsIn 1962 the Bank introduced computer accounts through which most of the accounts in

head office were computerized

2.1.2.11 Computer Prize Bond

It was introduced in 1966. It is a scheme through which prize could be declared for prize

bond scheme.

2.1.2.12 Credit card schemeIt was introduced in 1966 through which customers could get certain sum of money from

specified branches. Many business organizations accepted payments through valid credit

cards.

2.1.2.13 Infant Saving SchemeIn 1968 the Bank offered infants to open saving accounts operated by their parents/

guardians.

2.1.2.14 Courtesy CardIt was launched in 1968 through which the customer could be introduced to other

branches in the country.

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2.1.2.15 Deposit growth certificateThis scheme was introduced in 1975 with increase rate of interest.

2.1.2.16 Special five years deposit certificateThis scheme was introduced in 1975 where the major emphasis is on increased rate of

interest.

2.1.2.17 Dollar traveler chequesIntroduced in 1976, the scheme was more helpful and safe for the travelers than carrying

foreign currency notes.

2.1.2.18 Haj accidental death schemeIntroduced in 1983, according to this insurance scheme, if a Haji who has submitted his

Haj application through HBL died while he was away for performing Haj, his family was

to be provided a certain sum of money.

2.1.2.19 Auto Cash Teller MachineAuto cash machines are installed in 1988 at various branches which allows customers to

withdraw cash round the clock and on all days of the week.

2.1.2.20 Transport Finance SchemeIn 1989 the Bank in order to decrease unemployment in the country introduced owner,

driver taxi finance and scooter loans. According to this scheme they were provided loans

on soft terms.

2.1.2.21 Gold card systemIn 1991 HBL introduced the scheme with the features of offering card holders to get upto

Rs. 10,000 at a time.

2.1.2.22 Muhafiz Rupee Traveler ChequeIt was introduced in 1998. A cheques available in denomination of Rs. 10,000, 25,000,

50,000 and 100,000 with the advantage of 100% free purchase and encashment.

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2.1.2.23 Distinct Properties Of Muhafiz It can be issued from more than 700 branches all over Pakistan.

Muhafiz provides the facility of payment in all branches of HBL.

There is no commission and fee charge for purchase of Muhafiz HBL keeps alive

the tradition of “Serve you better” charges nothing for the purchase and sale of

Muhafiz.

2.1.3INNOVATIVE PRODUCTS

2.1.3.1House FinanceHBL provides the facility of house finance:

Financing available for:

1. Purchase of house

2. Home improvement and renovation

3. Self Construction

2.1.3.1Some characteristics of House Finance of HBL Are:

Lowest marl-Ups leading to affordable monthly installments

5 years fixed Rates/ one year Floating Rate available.

Lowest processing charges

Financing tenures ranging from 3 to 20years.

Financing limits of up to Rs. 7.5 million (Rs. 3.0 million for Home

Improvement/Renovation)

Quick Processing

2.1.3.2Auto FinanceHabib Bank Auto Finance, a lease product, designed to offer you an economical way

for owing the car of your choice.

Some characteristics are:

Lowest Down Payment

Lowest monthly rentals

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Fixed repayment tenures of 36,48and 60 months.

Lowest Processing charges

Insurance premium rates as low as 3%

World wide personal accidental insurance coverage of up to Rs. 200,000.

All locally assembled new cars can be financed through this scheme.

2.1.3.4 HBL Flexi Loan:HBL had introduced a unique loan system for the middle income serving people in

various public sectors. It is basically meant for those in service people who earn more

than Rs. 5,000 per month. This loan meets the petty requirements of the salaried class.

Since the introduction of this scheme Rs. 6 billion is advanced throughout the country.

The maximum limit of this loan is Rs. 3,000,000.

2.1.3.5 Life StyleHabib Bank Lifestyle is an economical financing scheme for Household Appliances and

consumer Electronics.

Salient features of HBL LIFESTYLES:

Loans for salaried/ self Employed individuals or business persons

Low Mark-ups leading to affordable monthly installments.

Financing from Rs.10,000 to Rs.500,000

Fixed tenures of 6,12,18,24 and 36 months

Low Processing charges

Full credit Life Insurance

Free Doorstep Delivery of items

Available throughout Pakistan from over 330 designated Habib Bank Branches

2.1.3.6 HBL Rescue (Balance Transfer Facility)

HBL provides the facility to transfer your personal loan and credit card liabilities, at the

lowest rates ever.

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2.1.3.7 For Personal Loans Maximum loan up to Rs. 1,000,000

Choice of 12,24,36,48 and 60 months for payback

Lowest Mark- up

Quick processing

Full Credit Life insurance

Available from over 400 designated branches throughout Pakistan

2.1.3.8 For Credit Card Payments Maximum loan up to Rs.1,000,000

Lowest mark-up-compared to any credit card

Choice of 12,24,36,48 and 60 months for payback

Quick processing

Full Credit Life insurance

Available from over 400 designated branches throughout Pakistan

2.1.3.9 Auto Cash (Debit/ ATM Card)Habib BANK icard is used for dual purposes-a debit card and an ATM card and provides

u the direct access to cash in your account.

2.1.3.10 Habib Bank icard as your Debit CardWhen payment is made at any merchant location using the card , exact purchase amount

is deducted from your account.

Convenient, secure, quick and easy payment option

Nationwide acceptability at various merchant locations displaying ORIX Network logo

Free of charge debit card transactions

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2.1.3.11 HBL iCard as your ATM CardOffer a number of facilities such as cash withdrawal, Funds transfer between accounts,

Balance Inquiry, Mini Statement, PIN Change etc.

Accepted at all 1LINK and MNET ATMs across the Country.

2.1.3.12 HBL Easy Access- Online access to banking services at over two hundred branches in Pakistan

2.1.3.13 HBL Fast TransferA unique solution for overseas Pakistanis to send money back home in a swift and

convenient manner.

2.1.3.14 Haryali Agricultural LoansIt entails all kind of agricultural finance facility for the rural market.

2.1.3.15 HBL E-BankIt provides services via a dedicated communication link on the internet. The E-Banking

services provide “anytime, anywhere” banking to all 5 million customers. This service,

designed to be user friendly, assures secured access and confidentiality.

2.1.3.16 SWIFTThe bank is a major SWIFT user in 70 domestic branches & 21 overseas countries /

locations in the network. SWIFT services are being used for funds transfer, remittances

and trade related transactions, resulting in major improvement in payment processing

capability for enhanced customer service.

2.1.4AGENCY SERVICES TO THE CUSTOMERSHBL also provides agency services to its customers. Some of which are as follow:

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2.1.4.1Collection of chequesHBL pays and collects cheques on behalf of their customers, and for this it receives

commission form their account holders.

2.1.4.2 Collection of dividendsThe Bank provides a very useful service by acting as an agent for its customers. It

arranges the collection of dividends on shares and securities held by its customers. The

customer is simply to inform the issuer of the securities that the interest on the securities

is to be credited to his account in the Bank. Bank charges commission for the collection

of the dividends on behalf of account holders.

2.1.4.3 Purchase and sale of securitiesHBL if authorized by the customers also makes purchase and sale of securities on the

behalf of its customers. Bank charges commission for the purchase or sale made by its on

behalf on the customers.

2.1.4.4 Execution of standing instructionHBL also executes the standing in case if it is ordered by the customers of the Bank to do

so. These instructions are usually given in writing to Bank. The Bank debits and credits

the accounts of its customer for the transactions carried out by the individual or firm.

2.1.4.5 Transfer of FundsHBL, also transfers funds of the customers from one Bank to another Bank. If the transfer

is within one station, they don’t charge any commission and even if they charge, they

charge on reduced rates.

2.1.4.6 Acts as an agentHBL also acts as an agent, correspondent or representative of its customers at home and

abroad.

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2.1.4.7 General utility servicesHBL also performs a number of generally utility services to its customers which are as

follows:

2.1.4.8 Foreign exchange BusinessHBL transacts foreign exchange business by discounting foreign bills of exchange and

thus provides facilities for financing in foreign trade.

2.1.4.9 Acts as a refereeHBL provides useful services to its customers by acting as a referee for its credit

worthiness. The information is supplied in utmost secrecy and is based on financial

standing of the customers.

Acceptance of Bills of exchange

HBL also undertakes acceptance business connection with bills of exchange and thus

enables its customers to obtain the desired credit.

2.1.4.10 Issuance of traveler’s chequesHBL also issues traveler’s cheques. These cheques can be issued to anyone whether an

account holder or not and charges no commission on issuance of such cheques. HBL has

recently introduced Muhafiz rupee traveler cheques with enhanced features.

2.1.4.11 Collection of Utility BillElectricity, telephone and other such bills can also be deposited with HBL.

2.1.4.12 Locker FacilityHBL also provides locker facility to its customers where valuables of customers can be

kept.

2.1.5Operational Policy

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The operational policies of HBL deal with the method of provision of better services to

its customer. Through the introduction of new schemes as means of satisfaction for their

customers, the operational policy of HBL can be divided into two spears.

Domestic operations.

International operations.

2.1.5.1 Domestic OperationsHBL is quite successfully operating its domestic business. Facilities at the door step

across the length and breadth of the country also in conformity with the government’s

socio-economic objectives. The number of operating domestic branches total 1350.

2.1.5.2 International OperationsHBL’s overseas branches are continuously rendering satisfactory services and are also

contributing to the channeling home remittances of Pakistan working abroad. HBL’s

international network comprises of 60 offices in 26 countries, operating in USA, Europe,

UK, Middle Ease, Asian Pacific Region and Africa. It is also the largest Banking in

financial services provider in Pakistan.

HBL concentrates on markets and business they understood. Through a global network,

the Bank provide a comprehensive range of financial services, personal, commercial,

trade services, cash management, treasury/ capital market services, and private Banking.

HBL strives to provide high quality product through efficient delivery system and

excellent customer services. In this way, HBL will grow and achieve

2.1.6ORGANIZATION STRUCTUREA well-developed and properly coordinate structure is an important requirement for the

success of any organization. It provides the basic framework within which functions and

procedures are performed. Any organization needs a structure, which provides a

framework for successful operations. The operation of an organization involves a number

of activities, which are related to decision making, and communication of these decisions.

These activities must be well coordinated so that the goals of the organization are

achieved successfully.

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2.1.6.1 STRUCTURE OF HBLAt present the Bank operates through one central and 23 Regional Offices and 1439

branches, all over Pakistan. The president and Executives Committee look after the

affairs of the Bank. Each Regional Head Quarter is headed by a Chief Executive and

assisted by General Manager Operations and General Manager Support Services. The

Regional Head Quarter controls the branches in their area.

Overseas operations consist of 65 main branches, two affiliates, two representative

offices and two subsidiaries.

President, from Head Office at Karachi controls the officers of the Bank with the help of

the senior management. Functional responsibilities of the Banks are broken into seven

groups known as

1) International Operations Group

2) Corporate Banking and Treasury Investment Group

3) Retail Banking and Operation Group

4) Finance, Audit and Administration Group

5) Assets Remedial Management Group

6) Credit Policy Group

7) Corporate Bank, Financial Institutions and Project Finance Group

In addition to the overall controlling authority, president also manages the International

Operations Group individually. While the Senior Executive Vice Presidents supervise

rest of the functional groups. Each Senior Executive Vice President is individually

responsible for the group which is assigned to him.

At the level of provinces there are Regional Head Quarters headed by Regional Chief

Executives (RCE). Each RCE is assisted by GM operations and GM Support Services.

Branches are also controlled by the RCEs. Circle Offices of the past times have been

removed to reduce Managerial Layers, which were working under the control of Zonal

Offices. This happened as a result of policy of beginning new changes in the

organizational structure.

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2.1.6.2 Organizational Chart of HBLA chart defines the line of authority in an organization and its departmentation. It is a sort

of visual presentation of the organizational structure. It specifies the duties and

responsibilities of the personnel of the organization. The Organizational chart of HBL is

given below.

2.1.6.3 Organizational Chart

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Chairman

President

Board of Directors

SEVP

International Operations

SEVP Corporate Banking & Treasury

SEVP Retail Banking & Information Technology

SEVP Finance, Audit & Administration

SEVP Asset Remedial Management

SEVP Credit Policy

SEVP Corporate Banking, financial institute & Project Finance

2.1.7ANALYSIS OF ORGANIZATIONAL STRUCTURE

The purpose of an organizational structure is to help in creating an environment for

human performance. It is then, a management tool and not an end in its own. Although

the structure must define the task to be done, the rules so established must also be

designed in the light of abilities and motivation of the human recourse available. By

analyzing the organizational structure of HBL presence of the following elements can be

found in its structure.

2.1.7.1 Centralized Decision Making

By looking at the organizational structure of HBL would be found that the structure at

HBL is a critical one. All the decisions are made at the top management level and the

subordinates have to obey these decisions. This trend in the decision making shows a

pattern of rigidity in structure of HBL.

2.1.7.2 Downward Communication

Communication is the process by which information is exchanged and understood by two

or more people, usually with the interest to motivate or influence the behavior of others in

the organization. Downward communication is the message and information sent from

top management to subordinates in a downward direction. Managers can communicate

downward to the employees through speeches, massages in company publications,

information leaflets, tucked into pay envelops material on bulletin boards, policy and

procedure mandates.

The same pattern is followed at HBL. No doubt it’s a very traditional approach but it can

create problems because it ignores the receiver of the communication because the issuer

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of policies and procedures does not ensure communication. In reality may the messages

communicated downward are not understood perfectly.

2.1.7.3 Chain of Command

The chain of command is an unbroken line of authority that links all persons in an

organization and shows who reports to whom. By analyzing the organizational structure

it can be found that there is a scalar principle followed with in the Bank because each and

every person knows to whom can one report. The authority and responsibility for

different tasks and duties are different, as well as every one knows the successive levels

of management all the way to the top.

2.1.7.4 Authority and Responsibility

The chain of command illustrates the authority structure of HBL. Authority is the formal

and legitimate right of the manger to make decisions, issues orders and allocates

resources to achieve organizational desired outcomes. By analyzing the chain of

command of HBL, one can come to the conclusion that, as there is scalar pattern

followed at the organizational setup of HBL therefore it is implied that everyone in his

position knows that what is one’s authority and what is the responsibility and the

authority it allocated.

2.1.7.5 DelegationDelegation is the process, which managers use to transfer the authority and responsibility

to position below in the hierarchy. Most organizations today encourage managers to

delegate authority to the lowest possible level to provide maximum flexibility to meet

customer needs and adapts to the environment. But at HBL no such system prevails the

managers try to keep as much of the authority as they can and if some authority is

delegated it is sure that it will be misused

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3.1 PERSONAL EXPERIENCE DURING INTERNSHIP I started my internship at HBL liaqat road branch. Basically HBL hired internees for

marketing of its new product HBL Phone Banking. For this purposes HBL trained

internees and sent them in different branches of Islamabad and Rawalpindi region. First

few days I worked on HBL Phone Banking. HBL provides Phone banking for its account

holder. During my work I meet different type of account holders. Many interesting things

came to know about account holder. For instance, I meet one of the account holders, I

told about phone banking to him and after few minutes when I finished my words about

phone banking . The person said “Yeh mera bohat bhare account hay. Main nay es ke

information apnay ghar walon ko b nahin de the jab main hajj pay gia tha .aap ko es ke

information nahin doon ga” One person said I did not need phone banking. Another

person said I preferred manual banking than phone banking. I think there are two reasons

of hesitation of account holders from phone banking. First and important thing is that

employees of HBL are against this. They feel phone banking is burden on them. Second

thing is that most of

The account holders of HBL are illiterate. I also worked in different department of HBL.

The detail is as under

3.1.1Issuance of Cheque Books

I was given the assignment of issuing Cheque books. It is issued to those customers

whose accounts are operated by the concern bank. Cheque books in two different

categories are issued which are as fallows.

Cheque book for Current account

Cheque book for Profit & Loss Sharing Accounts (PLS).

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3.1.2Filling of an Account Opening formAccount opening is an agreement in which customer offers his funds and bank accepts

these funds, therefore the nature of relation between a banker and customer is of a

contractual one and all the conditions applicable to this contract act are also applicable.

3.1.3Remittance DepartmentRemittances are sums of money sent in payment for or against something. The remittance

department is mainly concerned with these payments. Remittances are divided into:

3.1.3.1 Inward remittances Inward remittances refer to payment in favor of the banks account holders inward

remittance includes all Cheque received for collection.

3.1.3.2 Outward remittancesOutward remittances are all payments made to other people on behalf of the

account holders in the bank. Outward remittances can also be done for none account

holders who deposit cash in the bank and remittance tools are prepared for them. Among

the work done by the clearing department is receiving credit advises in favor of the banks

account holders and also debit advises against the account holder’s accounts. There are

various tools of remittances to the customers who want the facility of remittance.

3.1.4 Demand DraftThis draft is made for the customer. This mode of remittance is normally used for

payment to out of city beneficiaries. They are normally also drawn on banks near the

beneficiary’s residence.

3.1.5 Pay OrderPay orders are mostly used when a customer wants to pay someone who is in the same

city as he uses and who prefers non cash payment for any service or goods that he/she

sold. This remittance facility is providing to the general public as a whole.

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3.1.6 ClearingThis is an extra ordinary banking facility which is provided to the public in this if they

are maintaining an account with the HBL they can lodge Cheque of any bank in Pakistan,

which will be collected and credited to their respective accounts through the process of

clearing. In this representatives of various banks are gathered at SBP and exchanges the

Cheque presented to them for debit of the respective accounts and in second round of

meeting provide each other the fate of those Cheques to be credited to respective

accounts.

When people present the Cheque of any other bank for clearing, first enter the Cheque

into the clearing register of the bank. Then this Cheque sent to the NIFT for clearing.

NIFT is the department which is created by the SBP for clearing the checks of different

banks.

3.1.7 Collection of Utility BillsHBL-is providing this facility since long but recently it embark upon it with anew with a

new vigor and vitality and extended the range of its utility collections. In this connection

HBL nominated its all most all Branches all over the Pakistan to provide utility bill

collection facility up to 9:pm instead of normal working hours 5:pm. It also amended the

previous collection timings which were from 9: am- to 1: pm, now all branches collect

the utility bills up to 5: pm instead of 1: pm. This amounts to the un-matched and unique

services provided HBL. Its utility collection ratio is more than 34% of market, which is a

clear proof of its exclusive services in this respect.

3.1.8 Pensions PaymentBoth types of pensions that is provincial and federal are paid to the thousands of

pensioners, this is also a unique feature of HBL

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3.1.9 Payment of SalariesThis is one the distinct features of HBL, that it provides services to the Govt. departments

to distribute their salaries every month. The prominent examples include ARMY,

RANGERS, POLICE, EDUCATION, and PUBLIC WORKS ETC.

3.1.10 Call Deposit and Payment OrderThis is another mode of remittance facility being provided by HBL. When the bank

makes any private transaction locally it does not make the demand draft but it makes the

payment through payment order. When the bank makes any contract it make payment

through call deposits. Call deposit receipts are mainly used for payments concerning

application for tenders.

3.1.11 Deposits SectionIn the deposit section the amount of rupees deposited are carried out in two ways. One is

that the customer wants to deposits the money in his/her account directly in monetary

terms, while the second way of depositing the money is through Cheque. In both the

cases I observed the following procedures.

3.1.12 Deposit through Cash

In this method a voucher is filled for the customers with the descriptions of Account

number, amount deposited title of the account and the name of the customer having that

account. The depositor put a signature on the voucher and the amount is paid to cashier

who stamped it and the voucher consisted of two parts, one is given to the customers and

the other part remains with the bank. In this type of deposit, the voucher is received by

writing the amount as BY CASH.

3.1.13 Deposit through a ChequeIn this case the same procedure is fallowed but in the voucher the Cheque number

through which the amount is deposited is written against writing BY CASH.

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4.1 SWOT ANALYSIS OF HBLHBL is considered to be a very sound bank in the financial circles. The bank where the

customers can safely keep their money as long as they want.

In SWOT analysis the best strategies accomplish in organization’s mission by:

1. Exploiting opportunities and strengths.

2. Neutralizing its threats and

3. Avoiding its weaknesses.

Following is a list of SWOT of HBL

4.1.1Strengths A skill or capability that enables HBL to conceive and implement its strategies.

The officers of HBL are considered as one of the most able professionals in the

banking world.

I observed that HBL employees interact with their clients as if they are their

personal friends and discuss about their problems as their own.

HBL has got a reliable and easy to use internal computer system. Every

information regarding the transactions in customers’ deposits has been

computerized.

HBL maintained its data properly.

HBL has very good security system.

HBL is the larger commercial bank in Pakistan with the network of over 1439

domestic and international branches.

Being the pioneer of banking in Pakistan, HBL is the oldest and is the richest in

experience.

HBL focuses on consumer banking by lucrative schemes, products and services

suiting best to the wants and demands of the customers.

HBL has opened all its branches at commercial areas so that the customers or

clients face no problems in reaching to the bank.

The band is always on the look to improve its services both to the domestic as

well as overseas customers.

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Human resources development and introduction of new technology towards

modern banking.

24 hours cash access and safe payment products for high value transaction.

Having potential to encounter the competitive environment in the market.

Veteran and experience private management group also involved in other interests

like, textile and cement industry.

Customer enjoys the services at the residential localities.

4.1.2Weaknesses Highest number of branches effecting the proper maintenance and difficulty in

providing same working environment at the each branch

Poorer system of recovery of the system is a threat to bankruptcy.

Lack of customer feed back.

Low job satisfaction.

Poor ATM’s Service

Inconsistency in efficiency and working atmosphere due to the largest of

branches.

Sense of insecurity in the employees serving at low profitable branches due to the

down sizing.

Females feel uneasy in an environment among the male workers.

Victim of political, legal and socio-cultural pressures

.Lack of professionalism in the branch employees mostly.

4.1.3Opportunities Huge untapped market potential in consumer banking

In opportunity exist, in form of opening of ladies banking section within the

branch which is entirely a new idea and it will attract customer.

Opportunity for developing value added services combined with corporate

banking relationships, cash management services to large and medium sized

corporate clients.

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Growing policies of government on business and commerce sector provide HBL

opportunities to take advantages of these policies to meet efficiently with the

business people to solve their problems with the instant cash and financing

facilities.

Govt. is taking very bold steps to promote IT in Pakistan. HBL has an opportunity

to improve in technology.

Large international network which principally focuses on trade finance with

Pakistan can be utilized to tap trade activities in other markets. In addition,

services such as cross border / offshore financing for corporate customers can be

enhanced.

Customer feedback on different products and accounts has really improved the

bank performance and encourage the atmosphere for other future policies.

HBL also has an opportunity to expand its new technological advancement like;

tele banking and internet banking facilities in order to serve the customer more

efficiently, specially

E-banking facility is also a new opportunity which is a flourishing business in

foreign countries and can also be here, if HBL takes the initiatives.

Further reduction in intermediation costs possible, with improving technology.

Due to efficient and veteran management group, HBL can also improve Ill and

expand its foreign operation successfully.

Habib Bank Limited provide opportunity to utilize its skills and efficiencies in

leasing business.

4.1.4Threats An area in the environment that increases the difficulties the organization’s

achieving high performance.

Consolidation in the banking sector resulting in increased competition.

Shortage of trained and specialized staff at lower executive and officer levels

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The threat of inconsistency and government policy regarding to business and

economics sectors, specially political and regional situation which makes the

environment uncertain.

Growing global technological advancement.

Strict regulation by government over credit facilities to the customers as Ill as to

meet the prudential.

Loss of confidence of overseas customers due to freezing of accounts.

Facing more competition by foreign banks in the market.

Foreign banks are flourishing in field of consumer financing.

Also the increasing operation of private banks.

Highly attractive and advance services by foreign banks to their customers.

5.1 CONCLUSION & RECOMMENDATIONS

5.1.1CONCLUSION

HBL is clearly the first choice of every one who believe in qualitative approach of

banking an environment of highly responsible people. Bank is enjoying a healthy

market share and taste of good status in terms of its operative features and customer

support. HBL is clearly the best bank operating in Pakistan. Personal loan is a

Sdistinguished feature of HBL experiencing a good reputation and reasonable mark

up with respect to prevailing market mark up with assurance of satisfaction and

support. HBL has more customers as compare to other banks, if they given proper

attention to every customer then in few years it will be the leading bank of the

country.

5.1.2RECOMMENDATIONS

The management should try to decrease job insecurity among the employees.

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Training program should be started for internees and newly appointed employees.

There should be transport facility for the employees.

The number of employees should be increased in order to decrease the workload.

The bank charges high service charges as compared to the other banks, so these

should be lowered down.

Surveys must be conducted regarding customer satisfaction level and all

employees of this dept. should look forward to getting feedback whenever

possible.

Adding of value added features that offer competitive advantage is also a means

of avoiding customer dissatisfaction.

Quick response to customer queries is necessary to maintain a healthy relationship

with the customer.

Proper training of customer handling should be given to employees. Training

workshops and coaching clinics should be considered as an option that would

provide adequate results.

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management of habib bank ltd pakistan

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