Internship Report
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Internship Report
Dedication
Whatever, I am today could never have been possible without the proper guidance,
effort and support of my parents, I sincerely thank to my loving father and sweet
mother as well as the Internship Advisor, Sir Fahad Javaid who bestowed me with
the courage, the commitment and the awareness to follow the best possible route, by
his unmatchable style and by best possible training. Their love, affection, amicable
attitude and prays for my success. ALLAH Almighty blesses all of them.
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EXECUTIVE SUMMARY
I decided to take up Askari Commercial Bank Limited for my internship because it's
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 Sheikhupura Branch from 2 July 2011 to 13th August, 03. 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. Habib-ur Rahman. 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 Remittance and
Accounts department and have given below the caption of activities I was involved in
during the period of six weeks.
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 every customers is the
rational customer he knows the value of money and wants a best return on his
money.
Earlier Askari Commercial were able to attract customer due to their ancillary
services like ATM Cards, Credit Cards, Online Banking etc. but now all the banks are
offering these services through their own network or through third party contracting,
so our plus points are no more our advantages. So the only things through which
ACBL can increase their deposits are profit rates, because the customers only want
maximum profit on their investment.
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ACKNOWLEDGEMENT
First of all I am thankful to Almighty Allah who gave me knowledge and power to
make me able to complete my internship successfully.
I am also thankful to Department of Management Sciences Comsats Institute of
Information and Technology who provide me this opportunity to have an experience
in a reputed organization and groom myself for the future professional
responsibilities.
I shall also like to wish to acknowledge and show my deep gratitude to our
respective teacher, Mr. Fahad Javaid, for his consistence, advice and support given
during the writing up of this report.
I offer my heartiest tribute and cordial gratitude to present my thanks to Mr. Habib-urrehman Operation Manger of Askari Bank Sheikhupura Branch, on his excellent cooperation and moral support during internship and writing the manuscript and also
provide material to improve my communication skill and develop my personality.
Whatever, I am today could never have been possible without the proper guidance,
effort and support of my parents. I sincerely thank to my loving father and sweet
mother for their love, affection, amicable attitude and pray for my success. The repot
of Internship is the result of our day and night efforts, which we have made to,
complete this very extensive and creative work.
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Table of Content
I.
EXECUTIVE SUMMARY
……………………………………………………………………………
3
II.
ACKNOWLEDMENT
……………………………………………………………………………………
4
III.
TABLE OF CONTENT
……………………………………………………………………………………..
5
IV.
INTRODUCTION
……………………………………………………………………………………
7
a. HISTORY OF ASKARI COMMERCIAL BANK …………………………………….
…………………………………………………………………………..
7
V.
AWARDS AND ACHIEVEMENTS
9
VI.
MISSION STATEMENT
…………………………………………………………………………………..
10
VII.
VISION
…………………………………………………………………………………...
11
VIII.
ORGANIZATIONAL STRUCTURE OF ASKARI BANK
…………………………………………..
12
IX.
IN BRANCH
…………………………………………………………………………………..
13
X.
DEPOSITS DEPARTMENT
…………………………………………………………………………………..
14
TYPE OF ACCOUNTS
………………………………………………………………………….. 14
XI.
a. PLS SAVING ACCOUNT
…………………………………………………………………….
b. CURRENT ACCOUNT
XII.
XIII.
XIV.
……………………………………………………………
14
15
REMITTANCE DEPARTMENT
………………………………………………………………………….
17
a. Demand Draft
…………………………………………………………………..
17
b. Telegraphic Transfer
…………………………………………………………………..
18
c. Pay Order
…………………………………………………………………..
19
d. Pay Slip
…………………………………………………………………..
20
e. Outward Bills for Collection
…………………………………………………………
21
f. Inward Bills for Collection
…………………………………………………………
21
CLEARING
………………………………………………………………………………………………..
22
a. NIFT Clearing System ……………………………………………………………………
22
b. Outward Clearing at the Branch ………………………………………………….
24
c. Inward Clearing of the Branch
26
CREDIT DEPARTMENT
……………………………………………………………………………..
a. CREDIT MANAGEMENT CYCLE
i. Proposal
…………………………………………………..
…………………………………………………….
……………………………………………………………………
27
27
27
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ii. Processing ………………………………………………………….
iii. Decision
28
…………………..…………………………………………..
30
iv. Documentation
……………………………………………………………… 37
v. Disbursement
……………………………………………………………… 39
vi. Review
………………………………………………………………………… 40
b. OTHER FINANCING ACTIVITIES ………………………………………………………………… 40
XV.
ACCOUNT DEPARTMENT
……………………………………………………………………………….. 42
XVI.
CASH DEPARTMENT
XVII.
ASKARI RUPEE TRAVEL Cheques ………………………………………………………………………..
XVIII.
ASKCARD (Askari Debit Card)
…………………………………………………………………………………. 42
43
…………………………………………………………………………. 43
XIX.
I.T DEPARTMENT
………………………………………………………………………………………….
45
XX.
BALANCE SHEET
………………………………………………………………………………………….
46
XXI.
SWOT ANALYSIS
…………………………………………………………………………………………… 50
XXII.
RECOMMENDATIONS
……………………………………………………………………………………….. 54
XXIII.
LIST OF ACRONYMES
…………………………………………………………………………………….. 55
XXIV.
CONCLUSION
……………………………………………………………………………………………
57
XXV.
REFERENCES
………………………………………………………………………………………………
58
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INTRODUCTION
ACCORDING TO BANKING COMPANIES ORDINANCE 1962
“Banking means the accepting, for the purpose of lending, or investment, of deposits
of money from the public, repayable on demand or otherwise, and withdraw able by
cheque, draft, order or otherwise.”
“Banking companies mean companies which transact the business of banking in
Pakistan.”
COMMERCIAL BANK
“The commercial bank receives surplus money from the public and lend to others
who needs funds. Bank collects cheque, bills of exchange etc from customers. It
transfers money from one place to another. It provides agency and general utility
services. Purpose of commercial bank is to earn profit.”
HISTORY OF ASKARI COMMERCIAL BANK
Askari Commercial Bank Limited (ACBL) works as a Unit of Army Welfare Trust
was established 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 its units as under:
1. Askari Associates.
2. Askari Leasing.
3. Askari General.
4. Private Business.
5. Textile Mills.
6. Cement Industry.
7. Askari Commercial Bank.
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The banking sector has witnessed a dramatic change during the last ten years
with the development of Askari Bank, which is not only redefining priorities and focus
of the banks, but also threatening the domination of traditional players.
The story begins with the incorporation of Askari Commercial Bank limited in
Pakistan on October 09, 1991, Askari Bank Commenced (begin) to operations in
April 1992, as a public limited company. The bank is listed on the Karachi, Lahore
and Islamabad Stock Exchanges and the initial public offering was oversubscribed
by 16 times.
While capturing the target market share amongst the view banks, Askari has
provided good value to its shareholders. Its share price has remained approximately
12% higher than the average share price of quoted banks during the last four years.
The total assets of the Bank amounted to Rs. 329,409,708 in thousand as at June 30,
2011, registering an increase of 4.45% percent over December 31, 2010.Customer
deposits reached Rs. 274.7 billion by June 30, 2009, an increase of 7 percent over
December 31, 2010.
Askari Bank has expanded into a nationwide presence of 226 Branches. A shared
network of over 4,173 online ATMs covering all major cities in Pakistan supports the
delivery channels for customer service.
Askari Bank is the only bank with its operational head office in the twin cities of
Rawalpindi-Islamabad, which have relatively limited opportunities as compared to
Karachi and Lahore. This created its own challenges and opportunities, and forced
as to evolve an outward-looking strategy in terms of Askari market emphasis. As a
result, Askari developed a geographically diversified assets base instead of a
concentration and heavy reliance on business in the major commercial centers of
Karachi and Lahore, where most other banks have their operational Head offices.
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Awards and Achievements
“Best Retail Bank in Pakistan” by The Asian Banker.
"1st Consumer Choice Award" by the Consumer Association of Pakistan.
2004
"Corporate Excellence Award" by the Management Association of Pakistan
(MAP). 2002, 2003 & 2004.
“The Best Bank in Pakistan” by Global Finance magazine. 2001 and 2002.
“Best Consumer Internet Bank” Global Finance magazine. 2002 and 2003.
"Euromoney and Asiamoney Awards" 1994, 1996 and 1997.
“Best Presented Annual Accounts” by (ICAP) and (ICAMP). 2000, 2001and
2002.
“The Best Presented Annual Accounts” by South Asian Federation of
Accountants (SAFA), in the SAARC region.
“The Best Consumer Banking Award 2006” by the Consumer Association of
Pakistan. 2007
“The Best Retail Banking Award 2008” by Pakistan Guarantee Export
Corporation Ltd. 2008
"Best Corporate Report Award for the year 2008" by ICAP & ICMAP. 2008
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MISSION STATEMENT
MISSION STATEMENT
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
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Vision
The Vision:
“To be the Bank of First Choice in the Region”
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ORGANIZATIONAL STRUCTURE OF ASKARI BANK
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In Branch
Branch
Manager
Operational
Manager
OG1
OG2
OG3
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DEPOSITS DEPARTMENT
Deposit is the functional unit of a Commercial Bank. No bank can run its operations
without deposits. Main function of a commercial bank is to channelize saving from
the savers to the ultimate users of funds. The process of collecting saving is called
Deposit Mobilization.
Two board categories of deposits with reference to time period are:
Demand Deposit:
These are payable on demand. They include current account, sundry deposit (e.g.
margin account) and call deposit receipt. No profit is given on demand deposits.
Time Deposit:
Payable on demand with certain maturity. Attracts profit with respect to time.
TYPE OF ACCOUNTS:
PLS Saving Bank Account:
Saving deposits were introduction to inculcate and encourage the of saving among
people of small means in order to achieves of Islamisation of the banking system in
the country, the government authorized the banks to accept Saving Deposit on profit
and loss sharing basis. Deposits received under this scheme are invested in noninterest bearing advances and other avenue so as to eliminate the element of
interest.
Points to Remember:
1. The PLS Saving Account may be opened in the name of an
individual, or jointly in the names of two or more persons. These
accounts may also be opened by charitable institutions or got
provident fund and other funds of benevolent nature by local
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bodies,
autonomous
corporations,
companies,
associations,
societies and educational institutions.
2. PLS Accounts can be opened with initial cash deposit having
Rs.100. The amount of initial deposit should be mentioned on AOF.
A minimum balance of Rs.100 (or as per bank policy announced
from time to time) will have to be maintained for qualifying for
sharing profit/loss.
3. Not more than one account may be opened in any one name
except in cases where such accounts are opened in the name of
parent of guardian for more than one child.
4. Statement of PLS accounts are normally provided once in every six
month as on June 30 and December 31.
5. No service charges shall be levied on PLS saving account as per
SBP prudential regulations.
6. Profit on PLS deposit is calculated on minimum monthly balanced
standing from 6th of the month till the end of the month. The profit is
paid on half yearly basis announced by the Head officer after June
30 and December 31.
7. Zakat at the rate of 2.5% is deducted from the PLS SB account
holders on the 1st Ramazan-ul-Mubarik. Balanced below a certain
limit that is announced by the government every year is exempted
form Zakat.
8. A withholding tax at the rate of 10% on profit is also recovered from
the account holders irrespective of the amount of profit.
Current Account:
A current account is a running account, which is continuously in operation, by the
customer on all working days of the bank. The customer deposits without the current
deposits without previous notice to the bank.
Points to Remember:
1. Current account can be opened with an initial deposit of not less
then Rs.5,000. The amount of initial deposit should be mentioned
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on AOF. A minimum balance of Rs.---------- will have to be
maintained.
2. It is an open account for which there is no fixed period for deposit.
3. There is no restriction on making deposits in an d withdrawals from
this account.
4. Bank does not pay any interest on these deposits, as they can be
withdrawn without notice.
5. Cheques are used for withdrawals from these accounts.
6. Loans and credits may be sanctioned to the credit worthy current
account holders with ease.
PLS Term Deposit:
Fixed or term deposits are the major source of funds of a commercial bank. Term
deposits, as the name implies, are deposits kept with a bank for a certain period of
time. They are not payable on demand like the current deposit. The depositor can
only withdraw them after the specified period of time. The persons or firms trust,
religious bodies, which have surplus funds keep the money in fixed deposits with
bank.
Points to Remember:
1. PLS Term deposit are grouped into the following categories: 1
Month, 2 Months, 3 Months, 6 Months, 1 Year.
2. Minimum balanced of Rs.100 is to be maintained in PLS Term
Deposit.
3. Profit on this account is paid on maturity.
4. Because the deposited amount remains fixed during the period the
profit is calculated on that fixed amount.
5. The rate of interest on fixed deposits is higher than that of saving
deposits and it varies with time of deposit. Rate of interest is 1% on
1 Month, 1.25% on 2 Months, 1.50% on 3 Months, 2% on 6 Months,
2.5% on 1 Year.
6. The holder of Term Deposit cannot issue cheque for the withdrawal
of the amount.
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REMITTANCE DEPARTMENT
The need of remittance is commonly felt is commercial life particularly and in
everyday life generally. The main function of the remittance department is to transmit
money from one place to another. By providing this service to the customer, bank
earns a lot of income. Also customer is able to meet its day to day financial
requirements.
Demand Draft:
It is an instrument payable on demand for which value has been received, issued by
the branch of the bank drawn i.e. payable at some other place (branch) of the same
bank. If two banks are involved then the DD is sent to other bank but in other case it
is handed over to the applicant.
Issuance Procedure:
 A demand draft application is given to the customer; he fills in relevant
information and signs it.
 The officer checks the information form.
 The bank charges such as commission, excise duty is charged as per
effective schedule of charges. If he fills the tax exemption form, tax is not
charged.
 In case of cash deposit, the cashier counts the amount and signs the DD
application and enters it in the register.
 Then the officer of remittance department signs it and operation manager
counter signs it.
 The entry is made in the DD issuing register, DD is given to the customer.
 Vouchers are prepared and posted.
 DD advises are printed and mailed to the respective branch.
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Payment Procedure:
 The bank receives DD.
 The DD credit advice is received through mail. The numbers are checked and
signatures are verified.
 An entry is made on the DD payable register and the vouchers are made.
 DD credit is attached with the vouchers and given for posting to the computer.
 When DD is received the test numbers are checked and the payment is
made.
 Vouchers are given for posting and the entry that was made in the register is
closed i.e. DD payable is Nil.
Telegraphic Transfer (TT):
It is the quickest way of transfer of funds from one place (Branch) to other place
(Branch) of the same bank. Generally, a mail transfer advice reaches the drawer
branch the next day through courier services. But sometimes, a customer demands
that his funds should be transferred through the quickest means. In such cases,
transfer of funds message is passed through telephone or telegram.
This mode of transfer was used before online. Online system is very effective for this
purpose now-a-days. In Askari Commercial Bank online system is used.
Issuance Procedure:
 The request of issuing TT is taken on the standard printed form.
 The customer fills the form properly and signs it.
 The Head of Remittance Department checks it; the charges such as
commission, tax and telex as per effective schedule and sign it.
 If he fills the tax exemption form then no tax is deducted.
 Then a TT is made on white slip. There are 3 copies, the original one is faxed
to the Branch, one to the Head Office and one is kept for record.
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 The entry is made in the TT issuing register.
 When commission bill is received; it is attached to the TT office copy in the
file.
Payment Procedure:
 When a TT arrives, the test numbers are checked and the signatures are
verified.
 The entry is made in the TT payable register.
 If there is no account then the TT received needs revenue stamp and then
payment is made. TT receipt is strictly non-negotiable.
Pay Order:
It is an instrument issued for payment in same city. Pay order issued from one
branch can only be payable from the same branch. It is normally referred to as
banker’s cheque. It is also called confirmed cheque, because bank issues this on its
own guarantee.
Issuance Procedure:
 The standard form is given to the customer. He fills in the details and signs it.
 The concerned officer checks the form.
 Bank charges or (commission) as per the schedule of charges and the
withholding tax of 0.3% are applied.
 The cash amount of the pay order is received.
 A cash memo is signed, stamped and handed over to the applicant as a
receipt.
 Then the pay order receipt is filled accordingly.
 An entry is made in the pay order issue register.
 Then the authorized officer signs it after checking the pay order.
 The order is then handed over to the applicant after obtaining his signature on
the PO Form.
 A voucher is also made and posted at the computer.
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Payment Procedure:
On presentation of the pay order receipt, two authorized officers of the branch sign
the receipt.
 PO entry is made in the PO issue register.
 Then the amount is credited to the account of the customer.
 PO is posted at the computer.
Pay Slip:
It is an instrument issued by the bank for the settlement of its own payment. It is
used for payment by the bank to anyone (may be employees) in this case only one
bank is involved. He is the issuer as well as the payer.
No Excise Duty
No Commission
Issuance:
 A credit voucher is sent from the account department to the remittance
department.
 Pay Slip book is taken out and filled according to the credit voucher.
 It is entered in the pay slip register.
 It is signed by authorized Officer.
 A voucher is prepared and posted.
 Pay Slip is then handed over to the customer.
Payment Procedure:
 Pay Slip is just like a cheque and bank is liable to pay against pay slip.
 After that when the pay slip is received by the bank for payment; it is again
transferred in the register.
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 Then payment is made and it is posted in the computer.
Outward Bills for Collection:
The bills, which are received by the bank and sent to other cities (branches) for the
local clearing in that city, are called Outward Bills for Collection.
Procedure:
 The Cheques that are of other cities are separated.
 They are entered in the OBC Register and OBC numbers are given to them.
 The OBC forwarding schedules are prepared for different branches.
 The respective Cheques are attached with the schedule.
 The office copy is filled and original schedule is mailed.
 On clearing, the respective banks send back the OBCs along with the IBCA
(Inter Branch Credit Advice).
 The OBC numbers are checked from the OBC register, after those entries are
made.
 Commission charges are deducted from the account.
Inward Bills for Collection:
The bills, which are received by the bank from other branches out of the city for local
clearing, are called Inward Bills for Collection.
Procedure:
 The OBC of other branches will be the IBC 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 from where
the cheque was received.

At the end of the day, two vouchers are prepared and posted.
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CLEARING:
Meaning of clearing:
The word clearing has been derived from the word “Clear” and is defined as “a
system by which banks exchange Cheques and other negotiable instruments draw
on each other within a specified area and thereby secure payment for their client
through the clearing house at specified time” in an efficient way.
Advantages of Clearing:
1. Since clearing does not involve any cash etc. and the entire
transaction take place through book entries, the number of transactions
can be unlimited.
2. No cash is needed as such the risks of robbery, embezzlements and
pilferage is totally eliminated.
3. As major payments are made through clearing, the banks can
manage cash payment at the counters with a minimum amount of cash
in vaults.
4. A lot of time, cost and labor are saved.
5. Since it provides an extra service to the customers of banks without
any service charger or costs, more and more people are inclined and
attracted towards banking.
NIFT Clearing System
The automation process at BSC is at advance stage and all the branches of BSC
would be online in near future. In the payment systems area, manual cheque
processing has been eliminated and in order to modernize payment systems
processing, the job has been entrusted to NIFT, a joint venture between a
consortium of six major banks and private sector. It is responsible for the
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establishment and management of automated clearing house facilities in Pakistan.
NIFT is actively involved in the modernization of payment systems in the country.
All commercial banks and all their branches in major cities avail NIFT’s services and
BSC plays monitoring role on the clearing operations of the NIFT. The NIFT has
created a semi-automated clearinghouse on image based processing of payment
instruments. In the first phase the instruments related to the commercial banks and
other financial institutions have already been standardized and made “Machine
Readable” by using Magnetic Ink Character Recognition (MICR) Code Line that is
being used internationally. This is a major achievement towards electronic clearing
house and the use of the future technology of Cheque Truncation whereby physical
movement of payment instruments will not take place rather cheque clearance will
be obtained with the transfer of images authenticated through digital signatures. This
will reduce the turnaround time needed for clearing. As mentioned earlier, the
functions of clearing house of BSC have been handed over to NIFT in most of its
field offices. As of June 2005, NIFT has been allowed to undertake automated
clearing functions at nine cities. These are Karachi, Lahore, Peshawar, Faisalabad,
Hyderabad, Rawalpindi, Islamabad, Multan and Quetta together with intercity
clearing offices which cover 2,679 branches of commercial banks. In other field
offices, BSC performs all the functions of the clearing house. In addition during 200405, the setting up of clearing house has also been allowed at NBP Mansehra,
Lodhran and Mardan under their supervision. The main functions performed by the
NIFT are as under:
Functional Highlights
•
Inter-bank clearing and settlement
•
Intra-bank clearing and settlement
•
Timely pick-up and drop services through recognized couriers
•
Advices / vouchers for intra-bank accounting
•
Direct posting support on media for returns and inward
•
Query systems - Software and data enabling large member banks to
organize internal call centers
•
Call center services
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•
Reports and statistics to member banks on a regular basis
•
Turnkey support for preparation of clearing involving payment of utility
bills by cheque (in drop boxes)
Clearing Services Offered
•
Overnight clearing (24 hour clearing service)
•
Same Day / High Value clearing (3 hour clearing service)
•
Intercity clearing (48 hour clearing service)
•
Countrywide Local US Dollar Clearing (5 day clearing service)
•
Same day returned Cheques processing
•
High value clearing
•
No transfer delivery
•
NIFT provides service up to branch level. It also provides a net
settlement position to BSC and settlement advice to branches.
•
The role of the main branch in clearing has been abolished and banks
do not exchange document.
•
Image based processing of all documents can offer image and data on
CD’s; images effectively pave the way for electronic clearing, enabling
data communication.
Image based facilities have been established at Karachi, Lahore, Islamabad,
Peshawar, Rawalpindi, Hyderabad, Multan and Faisalabad, for automated cheque
clearing. Accounts Department of the BSC has close coordination with key players of
the payment system in respect of clearing and settlement activities in retail payment
system such as NIFT, NBP, and field offices of the BSC. The BSC Karachi Office is
working with NIFT to settle all the clearing transactions (including other field offices)
as “centralized settlements” in Karachi Office.
Outward Clearing at the Branch:
The following points are to be taken into consideration while an instrument is
accepted at the counter to be presented in outward clearing:
1. The name of the branch appears on its face where it is drawn on
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2. It should not be stale or postdated or without date
3. Amount in words and figures does not differ
4. Signature of the drawer appears on the face of instrument
5. Instruments is not mutilated
6. There should be no material alteration if so, it should be properly
authenticated
7. If order instrument, suitably endorsed and last endorsee’s account being
credited
8. Endorsement is in accordance with the crossings if any
9. The amount of the instrument is same as mentioned on the paying-in-slip and
counterfoil
10. The title of account on the paying-in-slip is that of payee or endorsee (with the
exception of bearer cheque).
If an instrument is in order then out bank’s special crossing stamp is affixed across
the face of the instrument. Clearing stamps is affixed on the face of the instruments,
paying-in-slip and counterfoil (The stamp is affixed in such a manner that half
appears on paying-in-slip and half on counterfoil). The instrument is suitably
discharged, where a bearer cheque does not required any discharge and also an
instrument in favor of a bank need not be discharged. The instrument along with
paying-in-slip is retained while the counterfoil is given to the customer duly signed.
Then the following steps are to be taken:1. The particulars of the instruments and the pay-in-slip or credit vouchers are
entered in the Outward Clearing Register.
2. Serial number is given to each voucher
3. The register is balanced, the credit voucher are separated from the instrument
and are released to respective departments against instrument and are
released to respective departments against acknowledgement in the register
4. The schedules are arranged bank-wise
5. The schedules are prepared in triplicate, two copies of which are attached
with the relevant instrument and the third is kept as office copy
6. The house page is prepared from schedules in triplicate
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7. The schedules and house pages are signed by the officer in charge with
branch stamp
8. The grand total of the house page is taken and agreed with that of the
outward clearing register
9. The instruments along with duplicate and house page are sent to the Main
Office
Inward Clearing of the Branch:
1. The particulars of the instruments are compared with the list
2. The instruments are detached and sort out department wise
3. The entry is made in the Inward Clearing Register (serial number, instrument
number, account number, amount of the instrument is written).
4. The
instruments
are
sent
to
the
respective
departments
against
acknowledgement in the Inward Clearing Register.
5. The instruments are scrutinized in each respect before honoring the same.
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CREDIT DEPARTMENT
To give credit is to finance directly or indirectly the expenditure of others against
future payment.
Lending or financing is one of the basic functions of banks of all categories, through
which they gain major part of their profits. A bank accepts deposits of money and
repays cash to its depositors on demand. But this is not to say that; bank gives this
service for nothing. Bank borrows money at a lesser rate of interest and lends to the
borrower at higher rate of interest. And the difference between these two is the profit
of the bank.
Credit department deals with all the activities related to giving credit to customers.
CREDIT MANAGEMENT CYCLE:
Credit Management is composed of six steps:
1. Proposal
2. Processing
3. Decision
4. Documentation
5. Disbursement
6. Review
PROPOSAL:
The first step in the Credit Management is receiving a credit request, which is a
lending proposal for the bank each borrower has a purpose for borrowing. Some
borrow to fulfill their working capital needs, others wants to finance any project. The
customer presents his idea to the banker and wants the information on bank’s
facilities. Then after collecting information if the customer deems it beneficial he
makes a loan request.
This bank customer relationship should be mutually beneficial.
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PROCESSING OF LOAN PROPOSAL:
Managing a safe, healthy and profitable credit portfolio depends on the quality of
judgment exercised by the officer and the depth of their risk associated with the
nature of the borrowers business. The banker is supposed to make a judicious
judgment, which should be based on a critical study of advance proposals. It is very
much necessary that the banker should have a complete confidence in the integrity
and ability of the customer to use the money to his advantage and repay it within a
reasonable period. Information must be collected and confirmed by investigation and
negotiation during processing of the proposal.
In respect of fresh (ending proposal, the CLP is the end result of a series of internal
and external investigation exercises following the identification of a potential
customer, beginning with the first call on the customer.
EVALUATION:
To assess the risk and estimate the potential of a particular business, a series of
investigative exercise is undertaken. This evaluation stage include knowing the
purpose of borrowing, knowing business prospects of a customer, visiting the
business place, analysis of financial statement, visiting the collateral securities etc.
PURPOSE OF BORROWING:
The borrower must disclose factual purpose for seeking financial accommodation
from bank without such, the proposal should not be given due consideration.
The possible purpose may be as follows:
1. Export Financing / Packing Credit.
2. Import Trade Financing.
3. Working Capital need for Trade and industry.
4. Fixed Investment for Industry (Project Financing).
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5. Purchase of Industrial or Commercial Vehicles.
6. Construction of Residential, Industrial and Agricultural
7. Buildings.
8. Finance for movement of Goods / Crops within the country.
9. Purchase of Agricultural Machinery.
10. Development of Agricultural Land.
Different Advance Facilities are offered according purpose of borrowing. Some
facilities may be used for specific purposes because of their very nature and
therefore, risk involved in extending them can be accurately identified; for example;
an LC Facility can be used only for imports and depending on the items being
imported, risk can be assessed reasonably and accurately. But other facilities
however may be used for a variety of purposes and it may not be possible to assess
the risk as accurately. It is, therefore, important that in all cases facilities is extended
only after understanding precisely the use to which they will be put, and monitoring
systems devised to ensure that their use is confined to disclose purposes only.
Because without these safeguards, risk involved in extending them would not remain
the same as envisaged at the time of extending he facility.
KNOWING THE BUSINESS PROSPECTS OF THE BORROWER:
Fortunes of business enterprises fluctuate with changing trends in their respective
business and industrial sectors. All businesses grow in spite of individual
weaknesses and shortcomings. But during recession in an industry some companies
suffer more than other because of their particular circumstances such as flaws in
sourcing of materials, structural weaknesses in manufacturing process or distribution
arrangements,
sales
and
receivable
management,
sales
and
receivable
management and more often financial management.
Aside from fluctuating market conditions caused by temporary imbalances in
demand and supply, which result in unusual growth or slump in sales, there is a
gradual impact of the natural life cycle of industries and their products. Product life
cycles are characterized by an initial period of rapid sales growth followed by the
period of decline in growth rate signifying weakening of demand, either slowly or
rapidly, forced by any one or all of the following:
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1. Market saturation due to increased competition.
2. Innovation or the development of better / cost effective substitute.
3. Technological changes, which render older models obsolete.
4. Changes in import / export tariff which affect pricing structure.
Thus while preparing CLP, the concerned officer must look at these trends to identity
both short term as well as long term prospects of the business of the borrower in the
market place and the economy as a whole. He must also satisfy himself about
capacity of the borrower to survive these shocks as and when they surface before
recommending establishment of a lending relationship.
FINANCIAL ANALYSIS:
The purpose of analysis of Financial Statement (FS) 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 company earnings
and its financial strengths and weaknesses.
Financial Statements among other things include balance sheet and income
statement. Balance sheet represents assets and liabilities of the business at a given
data. Besides showing the ability of the business to service the loans on the strength
of its financial structure. It also helps in evolving secured basis for extending financial
support. Apart from showing the profitability of a business, income statements
disclose how the business has been conducted and determine factors behind a rise
or decline in the net worth.
VALUATION OF COLLATERAL SECURITIES:
Valuation of collateral securities is an area which is fraught with dangers because
there can be errors of judgment or deliberate over estimation for ulterior purposes.
As far as cash and other liquid securities are concerned, there is not difficulty in
disposing them of because their merits are self-evident. However, in respect of real
estate, there are some important aspects, which need special examination.
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An additional problem with collateral securities are that there is many security types
whose valuation remains subjective because of the fact that there are no verifiable
market prices quoted for them.
When any asset of the customer is taken into charge with the bank, the concerned
officer visits the security and examines the suitability of the security for the facility
required by the borrower. Banker must also check whether there are any existing
charges on the asset because is that case the institution which has registered the
charge first will have prior claim on the proceeds on the event of borrower’s
liquidation.
After that a surveyor examines those fixed assets and estimates their value. It should
be remembered that not every surveyor is competent to value every type of asset.
So reliable experts competent to assess particular type of asset must carry out
valuation.
NEGOTIATION:
While processing a loan proposal, a banker has to do a detailed negotiation with the
customer, to have first-hand knowledge about certain things and then confirm them.
The negotiation phase is very important for creating a safe credit portfolio. The
information collected in this phase may include the type of advance, the mode of
creating charge over securities, the source of repayment and period for which the
facility is needed.
RUNNING FINANCE: (R/F)
It is popularly known as overdraft. It is offered for working capital requirement of the
customer. It is created in current account adjustment from time to time finally on
expiry date. This facility is normally issued against hypothecation of immovable
property. It is allowed to the borrower under a pre-sanctioned limit. A current account
is opened and the conduct of this account is kept under review for a period of three
to six months. The borrower can draw cheque on his account maximally up to the
amount of limit sanctioned to him. The amount outstanding against the borrower is
mark-up will be changed on the basis of the amount outstanding. This facility is
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issued on revolving basis repayment should be completed by the maturity date.
Repayment in monthly installments is not required.
CASH FINANCE: (C/F)
It is also offered for the working capital requirement of the customer. It is the type of
loan in which client is given cash in lump sum it is offered against the pledge of
moveable property or stock of borrower. In majority of the cases this finance is
allowed against pledge of stock. The amount of finance is credited to borrowers CD
account and he/she utilizes it for business purposes. Repayment is not made by
monthly installments. Adjustments are linked with delivery of goods kept under
bank’s pledge. Goods are pledge when the payment is done on delivery order of the
bank. Goods released are equivalent in value to the repayment amount and
remaining goods are stills kept in pledge with bank for further recovery. Goods are
released on the Delivery Order (DO) by the bank to the Go down Officer.
TERM FINANCE: (T/F)
Term finance is offered to client for investment in any project or business. It is issued
for fixed time period. The amount of finance is credited to borrower's personal
account by debiting the Term Finance Account. The amount of finance is credited to
borrower's personal account by debiting the Term Finance Account. The amount of
Finance is disbursed in lump sum. Partial transactions are not allowed in the Term
Finance account. The repayment of Term Finance is usually in installments and with
other documents a letter of installments is taken from the borrower at the time of
disbursement. By that letter, the borrower binds him to pay the installments at
regular intervals. Monthly repayment amount is calculated by dividing the principal
amount by time period plus mark-up.
NON-FUND BASED FACILITIES:
These are those types of facilities in which funds are not directly involved.
LETTER OF GUARANTEE:
Guarantees issued by the bank can be classified under two broad categories.
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(1) FINANCIAL GUARANTEE:
Bank guarantees the fulfillment of a financial commitment on behalf of the
customer. Under these guarantees, the bank is called upon to pay in the
event of a breach of terms on the part of the customer.
(2) PERFORMANCE GUARANTEE:
The bank guarantees the due fulfillment of a contract or other work as
specified in the guarantee, by the customer. The amount of guarantee is
usually up to the extent of the value of the contract.
(3) SHIPPING GUARANTEE:
Bank issues guarantee in favor of the shipping company to enable the
importer to obtain delivery of the goods without production of the Bill of
Lading.
MODES OF CREATING CHARGE OVER SECURITIES:
Primarily bankers rely on the character, capacity and capital of the borrower in
ensuring the safety of his funds. The viability of the project itself and its cash
generating capacity ensure to a large extent the safety of bank funds. But the banker
cannot afford to take any risk and hence the reliance is placed on the tangible assets
of the borrower. In case of default by the borrower in repaying the loan the banker’s
interest if safeguarded if he possesses change or right over the tangible assets of
the borrower. Loans with such rights conferred upon the bankers are called secured
advances. In secured advances, charges are created on the tangible assets in
several ways depending upon the nature of assets. Modes of creating such charges
are as follows:
1. Lien
2. Pledge
3. Hypothecation
4. Mortgage
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Lien:
Lien has been defined as the right of a person to retain the property of the borrower
until a debt due from him (borrower) is repaid. In ordinary lien, the ownership of the
property under the lien remains with the borrower, although its actual or the lien
remains with the borrower, although its actual or constructive possession is with the
creditor, though the creditor does not have any right to sell it. This is not the case
with banker’s lien, as a banker’s lien is an implied pledge and the banker has the
right to sell the securities under lien after giving a reasonable notice to the borrower
in case of his default.
Pledge:
The bailment of goods as security for payment of a debt or performance of a promise
is called pledge. The relationship of a customer and a banker is this case is that of a
pledger (customer) and a pledgee (banker). The ownership of the goods, pledge
remains with the borrower, while the possession is with the banker.
Bailment is the delivery of goods by one person to another for some purpose, upon a
contract that they shall, when the purpose is accomplished be returned or otherwise,
disposed off according to the direction of the person delivering them.
Mortgage:
A mortgage is the transfer of an interest in specific immovable property for the
purpose of securing the payment of money advanced or to be advanced by way of
loan, existing or future debt.
The transferor is called a mortgagor and the transferee a mortgagee. The principal
amount and the interest of which the payment is secured are called the mortgaged
amount and instrument (if any) by which transfer is affected is called the mortgage
deed.
The mortgage does not transfer the ownership of the property and the actual
possession of the property is also not transferred. He (mortgagor) transfers only
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some of his rights as an owner e.g. He now cannot sell the property without the
consent of the mortgagee.
Hypothecation:
An agreement to give a charge to goods or documents of title without conferring
possession is called hypothecation. The goods are charged as security for a loan
form the bank but ownership and possession remains with the borrower. The
security is granted by the borrower to the lender by a letter of hypothecation, which
contains the terms and conditions of the hypothecation agreement.
As physical possession of goods remains with the borrower, the banker seeks
periodical stock reports from the borrower confirming full description and value of the
stock hypothecated. In order to prevent a possible loss of stock by fire, theft, and the
borrower is asked to get his stock insured. The hypothecated stock is liable to be
inspected by bank’s authorized person. The creditor (Banker) has the right to take
possession of the hypothecated goods as and when required.
Repayment of the Credit: (Identify the source of repayment)
The banker’s most important single consideration should be on time repayment of
the credit extended t a borrower from the normal business operations of the
borrower. Availability of collateral securities although essential should never be
considered for extending credit. Any proposal, about which repayment from normal
business operations of the borrower is uncertain, even though it is supported by
good securities, is unfit for consideration. Bankers obtain collateral securities from
borrowers for recovering credit if market conditions make it impossible for the
borrower to repay, not as a protection against borrower’s dishonesty. If the
borrowers intentions are doubtful, better not lend at all because auctioning borrowers
collateral is not your business.
It is, therefore, important that the CLP must mention the scenario for repayment and
identify the sources of repayment after negotiation with the borrower.
First source of the repayment is the revenue generated by the business of the
borrower. For this, the likely market demand scenarios must be estimated.
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Second source of repayment is the general cash flow of the borrowers business
arising out of operations other than the sale of specific goods.
Third and the least derivable source of repayment is encashment of collateral
securities.
Period of Financing:
The period for which the finance is issued is called the maturity period. It may be for
a month two months, 3 months, 6 months and for a maximum period of 1 year. If the
facility of advance is allowed up to 3 months then it will be considered as temporary
accommodation and if it exceeds to 6 months to 1 year, then it will be a permanent
limit.
Making a Lending Decision:
Bank credit decision for any proposal has to be very rational one, because there are
many restrictions on monetary and credit expansion by the State Bank of Pakistan
and it is no longer within the power of banks to distribute it freely. Credit office must
learn to make the best use of the bank’s available deposits by deploying them in the
most productive advances. To make a prudent decision it is required that decision
should be made only after comparing the benefits available from several competing
proposals and agree to finance the proposal which offers a risk-reward combination
closest to the standard set out in the Bank’s Credit Policy. Before recommending
facilities for any customer, banker must ask himself the question “Why should we
lend to this customer in particular? Why not the next one?”
Consideration for Lending Decision:
Usually, the two major considerations for recommending fresh credit facilities are the
business anticipated from the borrower in relation to the funded facilities and
projected earnings from facility utilization by the borrower. In case of renewal of
existing facilities the consideration is the business received in the past and earnings
and that promised by the borrower for the following year.
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Besides these, there could be other supplementary considerations such as deposits
of the borrower, including title, amount, period and profit / interest rate being paid on
such deposits is important in order to ascertain the profitability of the overall
relationship.
The entire information will help the decision maker in reaching a conclusion about
the relative importance of the customer for the bank. But for making a profitable and
safe decision, the information on which the decision is based should be gathered
carefully and checked that the figures are correct.
After receiving the proposal and processing it by analyzing it’s all risk-return
characteristics, the credit officer prepares CLP. CLP is the input of the decision
stage, which is used for approval of the proposal. Once the CLP is prepared, first
Branch Credit Committee approves it and then it is forwarded to Head Office, from
where the final decision is made. The Credit Officer first uses his judgment and
recommends potential proposals. Then Branch Credit Committee further screens out
risky proposal. In this way a profitable portfolio is maintained.
DOCUMENTATION:
Document shall include any matter written, expressed or described upon any
substance by means of letters, figures or marks or by more than one of those means
which is intended to be used for the purpose of recording that matter.
Obtaining the proper documents, legally valid and enforceable, is a prerequisite for
the disbursement of an advance by bank. The type of document to be obtained
mainly depends on the following aspects:
 Nature of Facility
 Kind of Security
 Type of Borrower
 Mode of Charge
Rights and liabilities of the parties involved in the credit transaction are mainly
established from the contents of the documents executed by the parties. The banks
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resorting to the court of law would only be benefited if the documents are properly
executed and they are valid and enforceable at law. If there is any defect in
execution of the documents, the bank may lose its claim. So, it is very essential to
have proper documentation before the loan is disbursed to the borrower.
Nothing is better proof than the documents themselves for the banker in pleading for
his claim. Therefore, utmost care should be taken in execution of the documents.
The banker must take care of the following:
1. The documents must be properly stamped with full value.
2. The parties should sign according to their usual specimen signatures; initials
of the parties are not enough.
3. Each page of the document is required to be signed by the executing person.
4. There should be no cutting, alteration, overwriting or erosion in the
documents. The executing person under his full signature if any, must
authenticate the cuttings.
5. Documents must be completed in all respects. Blank and undated documents
sometimes pose serious problems for the bank.
6. Documents when executed should be:
a. Properly diaries.
b. Placed in Safe.
7. Documents should not be punched or torn out.
8. Documents where required must be duly registered.
Maintaining and Balancing the Documents:
Among other activities, maintaining and balancing the documents is also an
important activity of the Credit Department. These documents carry a substantial
value and create a great problem if any dislocation occurs. Different documents are
of different values. These documents are counted, stamped and properly placed in
the strong room of the branch. A separate ledger is maintained for these blank
documents for accounting purpose. After a short time period, the total value of actual
documents is matched with the balance in the ledger.
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Disbursement:
Procedure of Loan Disbursement:
1. Proper documents, which are legally valid and enforceable at law, are
obtained.
2. The concerned Credit Officer in the branches prepares proposal (CLP), it is
also known as Credit Sanction Advice (CSA). The purpose of making CLP is
to record the required information on it and having approval of the Branch
Credit Committee and Head Office on it.
3. Credit line proposal include the following information:
1. Date of opening
2. Date of maturity
3. Nature of the business
4. Type of facility
5. Purpose of facility
6. Securities
7. Source of repayment
4. There is a Branch Credit Committee in each Branch. Committee holds a
meeting and takes decision whether to give loan or not. This decision is taken
by keeping in view all the risks associated with that borrower.
5. New account with a new account number is opened. These account numbers
are previously fed into the computer if the system is online.
6. There are two accounts maintained for each borrower, Credit Account and the
borrowers account. In the start, the credit account has a credit balance equal
to the amount of loan.
7. After all other requirements are fulfilled; the loan is actually transferred to the
borrower by debiting the credit account and crediting the customer account.
8. Now the borrower can draw the amount from his account according to his
allotted Drawing Power (DP).
9. After a fix time period, on each installment date, borrower has to repay the
principal and mark-up. Loan repayment installments are deducted by debiting
the customer account and crediting the credit account.
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Account Monitoring Loan Status Review:
Account monitoring system is an evaluation technique intended to provable a basis
for reviewing over all condition of an existing borrower. It will help in identifying
symptoms of possible problems in the areas of financial or business management
and indicate the need for corrective action to prevent the account form becoming
slow moving or eventually delinquent. This exercise of monitoring alerts the amulets
or account manager to the need for appropriate corrective action starting with a
detailed discussion with the borrower to understand the borrower’s point of view on
the areas highlighted by the analysis of the account.
Account Status Review:
In this section, different things about the current status of the account are checked.
For instance, what is limit of the account? What drawing power was allotted to the
borrower? What is the outstanding balance? Since when the account is inactive?
What is the Net Asset Value?
OTHER FINANCING ACTIVITIES:
Instead of giving loan to the general public Credit Department of Askari Commercial
Bank performs various activities to facilitate the general people and Armed Forces.
Recently ACBL performs various financing activities, which are as follows:
Askari Bank’s Personal Finance:
Askari Bank recently started a new financing project that is Askari Bank’s Personal
Finance. According to this financing Scheme only Armed forces can avail. Following
are features of this financing scheme:
Featuring:
Loan amounts from Rs. 30000 to Rs. 300000 are available.
Repayment period from 1 to 3 years
Fixed monthly repayment
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Low markup rate i.e 12%
No pre-payment penalties
Shortest Processing time i.e 3 weeks
Funds may be obtained at any ACBL branch
Some restriction are apply on getting the loan,
Your age is between 21 yrs to 57 yrs
You have a verifiable minimum gross monthly income of Rs 15000/Minimum length of confirmed service with present employer is at least six
months with a total length of at least one-year service.
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Account Department
The most important task of this department is the maintaining and keeping
eye at records of past day activities that are taken place in the bank .An important
thing that takes place here is the daily verification and matching of various
transactions from their physical slips against the computer generated reports. These
reports are continuously updated by the bank intranet and finally at the end of banking day,
they are printed. their physical prove are match to the computer generated report and
save it as a physical that these transaction are take place in the bank. It is
for this reason that accounts department is sometimes termed as the backbone of bank.
A Second very important function of account department is that it is responsible for
budgeting and also record daily expense incurred by the bank and its employees. The account
department is also engaged with correspondence with head office and
other branches. Also it is responsible for making statements like
e x p e n s e s , t a x e s e t c . The reports generated by this department may be daily,
weekly, monthly, quarterly; semiannually as well as annually .It depends upon
the nature of activity. However mostly simple activities required daily reporting.
Cash Department
This is the most important department. It deals with the physical movement of cash
in a bank. Cash is either deposited by customers in the bank or is withdrawn by
them. It also has to balance the debit side with credit side at the end of the day. When a
person wants to deposit amount in his account, then he has to fill a
deposit slip. The deposit slip is very simple in its format. The customer
has to fill his name, account number and finally the amount to be
deposited is to be mentioned both in numbers and words. In some cases, the
customer is said to narrate his address, national identity card number and cell number at
the back of slip. Often the customers are given assistance in slip filling either by
internees or relevant employees. The deposit slips in Askari Bank vary to bit extent for
current and saving accounts.
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Askari rupee traveller Cheques
Askari Bank Limited has always remained at forefront in introducing
innovative and unique products in banking sector. Our financial instruments
provide greater financial freedom and security in an unmatched way to our valued customers.
Askari Bank offers you its "Rupee Traveller Cheques" eliminating all financial risks while
traveling. So avoid risk of carrying cash through Askari Bank's
R u p e e T r a v e l e r Cheques. "Your Best Travelling Companion "Why Askari Bank's Rupee
Traveler Cheques ?1 . F r e e i s s u a n c e 2 . F r e e e n c a s h m e n t 3.Profit will be
offered at the time of encashment*4 . N a t i o n w i d e a c c e p t a b i l i t y 5.Facility
of encashment in cash to the purchaser 6.Facility of encashment through
clearing7 . N o
purchasing
l i m i t 8.Valid
until
encashed9.Easily
t r a n s f e r a b l e 10.Account relationship not mandatory11.Fastest refund procedure in
case of loss / theft12.Safe & secure mode of funds transfer 13.Available in Rs.
10,000 Denomination at all branches of Askari Bank14.Perfect substitute of your
cash.
ASKCARD (Askari Debit Card)
Askari Bank is committed to provide you innovative and competitive solutions to your
banking needs in a more efficient and personalized manner. Your
B a n k e n j o y s a strategic competitive advantage over all domestic players
by virtue of its leadership, large network and technological advancement. In line
with our tradition of innovation, Askari Bank takes pride in announcing launch of Askari
Bank's Debit Card. Askari Debit Card means freedom, comfort, convenience and
security, so that you can have retail transactions with complete peace of
mind. Askari Debit Card is your new shopping companion which enhances
your quality of life by letting you do shopping, dine at restaurants, pay
your utility bills, transfer funds, withdraw and deposit cash through ATM
anywhere, anytime ."Convenience at its best "Why ASKCARD?
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
Free of Cost (24) hours Global Accidental Life Insurance up to Rs. 500,000/for every cardholder irrespective of balance in the account

Free ATM Cash Withdrawal Insurance up to daily cash withdrawal
limit of the cardholder against snatching, armed hold-up or forced deprivation of money

Free issuance of Debit Card for new Value Plus Accountholders

Umrah Tickets for 2 lucky cardholders (Each year)

Home insurance of 10 lucky cardholders (Each year)

No hidden charges

Free from carrying cash or cheque books

Free Funds Transfer Facility

Free Utility Bills Payments through ATM’s

Shopping Facility at POS terminals

Maximum daily cash withdrawal limit

Balance Inquiry, Mini Statement

Supplementary Cards

Un-matched Online Real-time Service
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I.T department
This department is also of much importance in daily banking
activities. As we know that this is the era of information technology, so having up-to-date and
state-of-the-art technological infrastructure is of keen importance for
banking s e c t o r . T o m e e t a n d f a c e t h e c h a l l e n g i n g c o m p e t i t i o n a n d
to
make
competitive
edge,
Askari
Bank
has
renovated
its
i n f r a s t r u c t u r e w i t h t h e l a t e s t t e c h n o l o g i c a l equipment's and tools. The main
activities of IT department are
Maintain and ensure the proper working of LAN.
Keep maintenance and ensure proper working of all computers within the branch
Verification of N.I.C online for the purpose of account opening.
Computerize record keeping of Accounts.
Generate report of daily transaction in the bank.
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BALANCE
SHEET
JUNE 2011
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During the current half year, your Bank's operating profit (i.e. profit before provisions
against non-performing loans / investments and impairment loss stood at Rs.2.28
billion, registering a decline of 4% when compared with the corresponding period last
year. This was mainly attributable to increase in revenue suspensions against nonperforming assets that increased by 16% since June 30, 2010. During the period,
aggregate revenues i.e., net mark-up based and non-mark-up based income,
increased by 3%, while the administrative expenses increased by 7% over the
corresponding period last year, mainly due to additional expenses incurred on
expansion of branch network that reached 235 at the close of the half year under
review from 227 as on June 30, 2010, besides inflationary upsurge. The provisions
against non-performing loans /investments and impairment loss decreased by 5%
over the same period last year. Profit before and after taxation stood at Rs.1,066
million and Rs.704 million respectively; reflecting a marginal decline i.e. around 1%
over the corresponding period last year.
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SWOT ANALYSIS
Strength:
ACBL has got a well-developed on-line system in most of its
branches. Remittance Department is working very efficiently 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.
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.
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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.
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.
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.
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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.
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Threats:
ACBL has many competitors, which are continuously
increasing its products and marketing aggressively. It may
cause its customers to shift to competitors.
Some other banks have competent taskforce, which is also
a threat for ACBL.
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.
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RECOMMENDATIONS:
As such there is no need of any improvement as Askari Commercial Bank is one of
the leading banks of the country and upholds its name but still I have a few
suggestions in my mind which I think my duty to mention. First of all, in order to
make the working environment of the bank better some recommendations are given.
In any organization we have to work like a group as a whole. The attitude of the one
employee can cause tension in the whole environment so it is suggested that they
should work as a team and co-operate with each other as well as with internees for
better working environment. For this purpose they should either make a schedule for
the internees or the rotation time period be reduced in those department, which have
less work for internees. Because during the internship the internees come him to
learn and know about the working of the organization. They should try to tell as much
to the internees as possible. So that they can learn how they have to work in an
organization when they get the job. Even if they get job in any other organization
they know how working in the organization goes on.
The important problem ACBL Sheikhupura Branch face is the number of employees
working in the bank. The number of employees are very low due to this problem the
distribution of work is also not right. Some person has more burden of work while
some have fewer burdens. So the overall working efficiency of the bank is not good.
So the ACBL Sheikhupura Branch have need of good, honest, skilled young
employees who can increase the efficiency of the bank.
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List of Acronyms
AWT Army Welfare Trust
CLP Credit Line Proposal
LC Letter of Credit
FS Financial Statements
RF Running Finance
CF Cash Finance
CD Call Deposits
TF Term Finance
DO Delivery Order
SS Specimen Signature
AOF Account Opening Form
ASDA Askari Special Deposit Account
FISDA Financial Institution Special Deposits Account
DD Demand Draft
TT Telegraphic Transfer
PO Pay Order
OBC Outward Bills for Collections
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IBCA Inter Branch Credit Advice
IBC Inward Bills for Collections
SBP State Bank of Pakistan
ATM Auto Teller Machine
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Conclusion:
The organizational policies, vision and mission all depict its essence and ideology of an ideal
banking institution that delivers elegant services by nourishing supreme, competitive and favorable
environment. Overall experience there was very good .
Branch management pays keen attention and concern for all employees. The employees are
motivated, energetic, well groomed and trained in order to serve the customers in most effective
manner. Special individualized attention is paid to every customer and is also given guidance in
important consultancy.
However due to growing number of customers and over whelming work, it's become very difficult
for managers to properly guide internees. And internees have to put maximum effort and patience
to get guidance and knowledge. The entire department has their own importance in bank. And so
internees are sometimes rotated in all departments but this gives them negligible time to get
adequate grip and knowledge in any particular department. Before me, few internees were given
full rotation in bank but at my time and after that, internees were confined to few departments only.
I started my internship at remittance department, then proceeded to accounts opening
department, then to leasing department, then to credit department and finally accounts
department where my tenure of internship ended.
Besides the routine banking activities, the employees also used to enjoy pleasing
occasions like on raining day, they used to enjoy traditional food
i t e m s l i k e pakoray etc. This thing is very good because such little pleasing
moments and happiness let employees to get fresh and have some time to be spent together.
As far as the future of Askari Bank is concerned, I perceive it is very
splendid. The bank’s policies, vision , flexible approach ,financial strength , strong
back and firm foundation ,all these elements have already put the bank on its journey
to marvelous success .It has proved its value and strength in a very brief span of
time and yet it has a long way to go ahead. The commitment, teamwork
and fairness of bank’s employees and the integrity of all of its activities are focused at efforts
driven towards success, customer satisfaction and eventually long term profitable
relationships.
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References:
 Askaribank.com.pk
 Google.com.pk
 Wekipedia.com
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