INTERNSHIP REPORT
ON
UNITED BANK LIMITED PAKISTAN
MAIN BRANCH, BANNU (0306)
Submitted To:
The Director (IMS)
Prof. AMAN ULLAH AWAN
Submitted By:
MUSTAFA KHAN
BBA-IT (HONS)
Roll No.832
Session 2006-10
INSTITUTE OF MANAGEMENT SCIENCES, UNIVERSITY OF
SCIENCE AND TECHNOLOGY BANNU
INSTITUTE OF MANAGEMENT SCIENCES
INTERNSHIP REPORT ON
UNITED BANK LIMITED OF PAKISTAN
MAIN BRANCH, BANNU
External Examiner:
Signature
...............................
Signature
………………………
Name
PROF. AMAN ULLAH AWAN
Signature
……………………
Director:
Supervisor:
Name
Designation
MR. AFTAB KHAN
Lecturer
Institute of Management Sciences
University of Science and Technology, Bannu.
Dedicated to
2
In The Name of
The Great, Merciful and kind.
3
PREFACE
Banking is the backbone of the economy of any country. In Pakistan, banks are now getting the
attention and support of the government, to nourish and initiate the developmental projects in
this Country. Banks have also attained a high level of initiation, productivity, and growth. One
such bank with new policies and strategies pushing forth towards progress is United Bank
Limited, which has since its inception shown remarkable achievements and discovered new
avenues of innovative banking.
During my two months Internship in UBL, Main Branch Bannu,
I acquired first hand
information about Consumer Banking of the bank.
Report writing is infact a crucial exercises because the performance of a student is judged
through this report. I have tried my level best to cover every aspect of this specialized banking
activity, asses the working and performance of the Center and forward solutions for its further
improvements.
A number of persons have offered their help and guidance in writing this report. I express my
thanks to my supervisor MR.AFTAB KHAN, and my manager MR. JAVID KHAN. I would
also like to thank to the other staff members of UBL, especially MR. HANIF ULLAH KHAN ,
without whose support it was impossible for me to do this tedious job.
ARSHAD MEHMOOD
BBA-IT (HONS)
Roll No.832
Session 2006-10
4
ACKNOWLEDGEMENT
In completion of this work I am thankful to Almighty ALLAH, as I firmly believe, without his
gracious help; this accomplishment would not have been possible.
First and foremost, my deep appreciation, gratitude and indebtedness to my supervisor
MR.AFTAB KHAN, Lecturer, Institute of Management Sciences, University of Bannu, for his
continuous encouragement, moral support and generosity in sharing his time and knowledge
during my studies.
I wish to express my sincere gratitude to personnel of UBL, Main Branch, Bannu, for their help
and guidance during my Internship.
Thanks to the constraints of academic protocols, that those who were and are always first in my
mind are being mentioned last. They are my parents and my loved ones. It is, I believe, their
sincere prayers, which were a constant source of strength and inspiration to me that resulted in
the completion of this work. I dedicate this work, blended in my boundless love and affection, to
them.
ARSHAD MEHMOOD
BBA-IT (HONS)
Roll No.832
Session 2006-10
5
EXECUTIVE SUMMARY
Now a day’s strong and efficient capital and financial institutions are the basic requirements of
each country. So no country can be considered strong without having strong enough capital and
financial institutions and markets. One of the components of these financial institutions are the
banks. No one can deny the role the banks are playing in the economic development of a
country.
In Pakistan’s banking sector, UBL is one of the leading commercial banks. Very renowned
bankers such as I.I. Chundrigar and Agah Hassan Abidi established UBL in 1959. From the very
beginning, UBL was showing very good performance but in 1974 after the nationalization of
commercial banks, the bank has received some very severe financial shocks. The shocks
received in 1995 were so severe that SBP had to assume the control of the bank in order to save
it from bankruptcy. But after taking over the management of the UBL by the new set-up under
the leadership of Zubyr Soomro, the bank was successful in rebuilding its shattered image. The
new management started new schemes and injected new concepts in order to improve its services
to the clients. Now the bank is in very good financial position and also has gained its lost
Goodwill.
My two months internship in UBL Main branch Bannu, gave me a very good deal of the
practical experience about the bank, its personnel and various services it offers to the clients.
Although two months duration for studying organization by no means is enough but I have tried
my ever best to cover all the areas of the bank in my report.
This report highlights the operations and functions of bank. Banks acts as financial agents to
their customer; in return they get reward for their services. Banks play important role in
development of society. A strong economy must have a good banking system.
United Bank Limited is one of the leading banks in Pakistan. This report explains how different
functions of UBL works and what are their services. During the critical analysis, it was observed
that UBL is one of the leading commercial banks of Pakistan.UBL has a greater responsibility
for safety and prudence. since commercial banks must make a living by putting the money at
their disposal to work, they are faced with the problem of making a living without jeopardizing
the safety of their institution and UBL is doing all this very efficiently.
6
TABLE OF CONTENTS
S.No.
Topic
Page No.
Preface
i
Acknowledgement
ii
List of Tables
vi
List of Graphs and Charts
vii
List of Acronyms
viii
Executive Summary
ix
Chapter – 1
1.
1.1
INTRODUCTION
Background of the Study
1
1.2
Objectives of the Study
1
1.3
Scope of the Study
1
1.4
Importance of the Study
1
1.5
Limitations of The Report
2
Chapter – 2
2.
EVOLUTION OF BANKING
Introduction
3
2.1
Growth and History of UBL
3
2.2
Subsidiaries
4
2.3
Joint Venture
4
2.4
Role of UBL in NWFP
5
2.5
Mission Statement of UBL
5
2.6
Objectives of UBL
5
Chapter – 3
3.
ORGANIZATIONAL STRUCTURE
3.1
UBL Organizational Structure
7
3.3
Division of UBL’s Office
8
3.6
Organization Hierarchy chart
3.7
Location map work of UBL in PAK
9
12
4.
DEPARTMENTATION
7
4.1
Accounts Department
13
4.2
Remittances Department
14
4.3
Deposits Department
16
2.4
Foreign Exchange Department
18
4.5
Advance department
Chapter – 5
20
5.
SERVICES & PRODUCT OF UBL
5.1
GENERAL DEPOSIT
23
5.2
CURRENT DEPOSIT
23
5.3
SAVING DEPOSIT
24
5.4
5.5
FIXED DEPOSIT
25
UNI-CASH
UBL WALLET VISA CARD
25
5.6
26
Chapter – 6
6.
SWOT ANALYSIS
6.1
Strengths
29
6.2
Weaknesses
29
6.3
Opportunities
30
6.4
Threats
Chapter – 7
30
7.
FINDINGS AND RECOMMENDATIONS
33
7.1
Deposits Department
33
7.2
Remittances Department
34
7.3
Cash Department
35
7.4
7.5
Bills and Clearing Department
Advance department
35
BIBLIOGRAPHY
38
36
8
CHAPTER # 1
INTRODUCTION
1.1
Background of study-
United Bank of Pakistan is one of the leading and first government recognized bank in Pakistan.
Aimed to be the pre-eminent financial institution in Pakistan and achieve market recognition
both in the quality and delivery of service as well as the range of product offering.
The reason of its development was that the UBL in addition to being a commercial bank in the
public sector at a time when all other commercial banks were in the private sector
also came to acquire certain characteristics which to this day set it part from other commercial
banks of the country.
The establishment of UBL thus signaled the achievement of another milestone in the
development of the banking industry in Pakistan.
1.2
Objective of the study
For getting the Master degree of Business Administration, each student is required to spend at
least two months as an internee in a recognized organization. The students are required to work
in their own field in which they have done their specialization.
Main purpose of this program is to make students familiar with the practical work, as there is
great difference between what they have learnt during their MBA. And how the job is practically
done.
Another important aspect of the internship program is that internee is placed in most of the
departments of the organization through job rotation. It provides a glance of each department, as
the period is too short for learning in detail.
1.3
Scope of the study
It is a compulsory requirement for the award of Master’s Degree of Business Administration.
It will help the present and prospective students of the department in making assignments and
writing reports on the UBL, evolution of banking, importance of banking and different
operations.
It can also provide help to UBL’s management in identifying their Strengths, Weaknesses,
Opportunities and Threats.
9
It can also provide assistance to students seeking financial data for analysis.
1.4
IMPORTANCE OF STUDY
Banks play a central and very important role in the economic life of a country, that’s why they
are considered as the lifeblood of modern economy. Today no one can deny the importance of
banking in the economy. They facilitate and expedite trade and commerce and provide a variety
of services that one can’t imagine with out banks.
I have chosen the United Bank Limited Pine View Road branch for my internship
because it has all the departments a bank could have.
Besides this, UBL plays an important role in the economic development of Pakistan.
1.5
Limitation of the Report
There were however some limitations and that is the two months durations of internship are
nothing to gain entire knowledge of banking. Moreover the bank does not want to provide data
particularly about the rightsizing of employees and stuck-up loans due to various reasons, so the
reader must also keep this in mind.
10
CHAPTER # 2
INTRODUCTION
2.1 Historical Background and Growth of UBL:
“The reserve Bank of India which was given the responsibilities of exercising
control over banking sector did not perform its duties properly in Pakistan.”
The real momentum was given to banking system when the State Bank of Pakistan,
was established on 1st July 1948. But a real turn took place in the banking section
when a renowned banker Agha Hassan Abdi took initiative of opening a bank,
which he announced to the different mode from the others. His dream became true
when the first branch of United Bank Limited (UBL) was opened at Macleod Road
(now 1.1. Chandrigar Road Karachi) on 7th November 1959.
11
This achievement was recurred after passing through many problems and after
completion of a lot of legal formalities. UBL was established on 24th July 1959 as a
public limited company with registered office at 1.1 Chandrigar Road, Karachi.
The authorized capital was Rs. 2, 00,00,000 issued, subscribed and paid up capital
was a Rs 1,00,00,000 share of Rs. 101 each. . The bank currently operating through
1300, branches in all the major cities of the Pakistan and its registered office are
situated at state life insurance corp. Building # 1, 11. Chundrigar road, Karachi.
United bank limited is one of the most famous bank working in different area of
Pakistan, UBL is now officially the second largest private sector bank in Pakistan
with its 25 percent growth in deposits to RS 237 billion in 2004.
Progressive Banking was a vision that came true in 1959 with the birth of UBL. It
brought in an era of modern banking and customer care beyond the ordinary.
The Bank launched a variety of consumer banking products and services – UBL
Drive, UBL Cash line, UBL Address, UBL Business Line, UBL Wallet ATM card
and UBL Business Partner.
UBL is one of the largest commercial banks in Pakistan with assets of over RS.
190 billion, Net Assets of over RS. 13 billion and a solid track record of 47 years.
UBL offers its services through a nationwide network of over 1300, branches
spread all over Pakistan and 15 overseas branches. The Bank earned RS 4.3 billion
pre-tax profits in 2003, a 59 percent increase over the previous year, and
announced a dividend of 22.5 per cent. This remarkable performance was based on
a record growth of 38 percent in advances, which grew from RS 72.8 billion in
2002 to RS 100.2 billion in 2003 driven by growth in deposits from RS 158.3
billion in 2002 to RS 185.1 billion in 2003.
The Bank was privatized in 2002, through the sale of 51 percent stake to a
consortium of the Abu Dhabi Group led by His Highness Shaikh Nahayan
Mabarak al Nahayan and the Bestway Group led by Sir Mohammed Anwr Pervez,.
12
The issue is unsecured and subordinated to payment of principal and profit to all
other indebtedness of the Bank including deposits.
United Bank Limited is one of the largest commercial bank in the country. With
almost 47 years of good standing to its valued clients, it has stood the test of time,
producing assets of over RS. 282 billion.
It offers its services through a wide network of over 1300, domestic branches all
over Pakistan and 25 overseas branches as part of global network.
2.2
Subsidiaries:
UBL A G. Zurich (Switzerland) established in 1968.
Its paid up capital of dollars 2722 thousand, deposits of dollars 5827
thousand and advances of dollars 5538 thousand as on Dec 31, 1962.
UBL of Lebanon and Pakistan established in 1968.
Its paid up capital of dollars 379000 deposit of dollars 125978 advances of
dollars 1983313.
2.3
Joint Ventures:
a. Commercial bank of Oman Limited (Mascot) established in 1982.
b. United Saudi Commercial Bank Limited (Saudi Arabia) established in
1982.
c. UBL has been presenting a very good track record since its inception into
banking business.
2.3
Branches
13
UBL has a large network of branches, which extends to the remotest areas of the
country. In December 1983 there were 1623 branches where in 1974 it had only
1238 branches. At present UBL have 1096 domestic branches. and present 15
overseas branches. some names are .bahrain,Qatar,SaudiArabia,
unitedArabemirates, yemenarab republic,uk,Switzerland,Egypt,oman and the
united states.
2.4
Role of UBL in KPK
The role of UBL has developed largely; through out the country in very short
period of forty seven years. The bank is operating in the entire country and has
branches all over the country and overseas. In N.W.F.P, UBL is operating
successfully. The number of branches of UBL in Peshawar region is 156 up to
dec.2001 i.e. there are total 14 Hub Branches in Peshawar region and under these
Hub branches, there are 142 spokes branches. These 156 branches come under the
Peshawar Region, for which there is a Regional head Quarter (RHQ) in Peshawar.
The list of hub branches come under the Peshawar Region is as under.
1.
Peshawar
2.
3.
4.
5.
Bannu
Mansehra
Timergara
Hangu
6.
Haripur
11.
8.
9.
7.
D.I. Khan
Mingora
13.
Nowshera 14.
10. Bathela
Mardan
12. Swabi
Kohat
Abbotabad
2.5 Mission Statement of UBL
“We shall dominate Pakistan’s financial markets and be the leading bank of
Pakistan in term of quality of customer services, assets, profits and reserves. We
shall consistently try to be among banks in the Pakistan. Comparing over selves to
international standards. We shall be a modern universal bank. Our employees will
be efficient, motivated and have corporate pride”
2.6
Objectives of UBL
14
Objectives mean the end towards which an activity is aimed. An organization
without objective is like a person who is wandering with no purpose. All the
activities of an organization are due to its objectives and goals. And for the
attainment of those objectives, various types of financial products and plans are
developed. UBL has also some objectives, which are as under.

To ensure growth and development of the bank.

To use resources of the bank efficiently.

To get more deposits.

To participate in development of the country.

Paying special attention to the areas, which are under developed.

To develop SME’S.

To increase industrialization in the country.

To provide financial help to the farmers.

To provide employment opportunities.

To make people more of mind to have saving habits
15
CHAPTER#3
ORGANIZATIONAL STRUCTURE
Organizational structure of a firm provides boundaries for authority of persons and
clarifies individual responsibility and authority. It shows who is responsible to
whom, and who has the authority to give orders to someone. An organization
having dual authority or vague structure would not have clear direction and will
face hurdles in getting its goals and objectives. Therefore, it is very important for
any organization to have a well-established structure of responsibility and
authority. An organization structure should be so designated to clarify the
environment so that everyone knows his duty and who is responsible for what. It
results to remove obstacle to performance caused by confusion and uncertainty of
16
tasks and to furnish a decision making communication network reflecting and
supporting enterprise objectives.
3.1
UBL ORGANIZATIONAL STRUCTURE:
UBL also has a well defined formal organizational structure.
UBL is a very vast
organization. In the organization set up of UBL, the highest authority rests with
Board of Directors which consists of Chairman, Deputy Chairman, President &
CEO and the directors. In which four directors are from UBL, one from Pakistan
Banking Council, one from Ministry of Finance and one who is also the secretary
of the board. So the Board of Directors is an eight member team, and is responsible
for policy formulation and making important strategic decisions.
The names of the Board of Directors are as follows:

CHAIRMAN
H.H Sheikh Nahayan Mabarak Al Nahayan

DEPUTY CHAIRMAN
Mr. Muhammad Anwar Pervez, OBE, HPK

PRESIDENT & CEO
Atif R. Bokhari

DIRECTOR
Zameer M. Choudrey

DIRECTOR
Omar Z. Al Askari

DIRECTOR
Muhammad Tehsin Khan Iqbal

DIRECTOR
Ahmad Waqar

Director
Javed Sadiq Malik
17
The authority, which is second highest, lies with executive committee. It consists
of seven members, including the president and secretaries are in charge of
divisions. The members are Senior Executive Vice President (SEVP) of UBL.
There are twenty divisions, which have their own Senior Executive Vice President
(SEVT). Executive Vice President (EVP), or Senior Vice President (SVP), the
SEVP to international divisions manages the operations of foreign countries
branches.The rest of the divisions work along their functional lines as shown in the
organizational chart.
At the National level, UBL has a network of branches spread allover the
country and its field operations are one of the most extensive among the leading
banks in Pakistan. At provincial level the bank is managed by SEVP, who is
assisted by General Manager (OM), who is EVP or SEVP. The OM is responsible
for either a number of regional areas or in charge of various provincial departments
such as Administration, General Recovery, Loans, Inspection, etc. The complexity
and extensiveness of the operations in a given province determine the number of
OMs. OMs are assisted by circles executives who are of the rank of SEVP or VP.
The entire country is divided into Circles which are further divided into Zones.
The circles are administered by circle executive. Each zone is comprised of a
number of branches, which are managed by branch managers who are mostly
Grade I or Grade II officers. Some large sized branches are also managed by
AVPs.
3.2
DIVISION OF UBL’S OFFICE
Basically there are two types of offices in UBL
1.
Head Office
2.
Regional Head quarters
18
1.
Head Office
Head office of UBL is in Karachi. It exercises overall control over the bank.
The head office (HQ) has various functions.

It formulates polices and ensures its implementation.

To supervise and control the operations of the regional offices.

To formulate policies and ensure its implementation by the field offices.

To deal/liaison with foreign donors like IBRD (World Bank), Asian

Development Bank, Islamic Development Bank, KFW (German Bank),

FMO Netherlands etc.

To deal with Ministry of Finance.

To supervise RHQs.

To sanction loan applications received from the branches.

To deal with ministry of finance.
2.
Regional Head Quarters
There are Eleven Regional Offices of UBL which fully cooperate with the
Head Office. UBL Regional Offices performance with reference to
sanctions, disbursement, recoveries, and deposit mobilization is of vital
importance to the bank operations. The functions are as follows:

To implement the policies formulated by the Head Office.

To extend the credit facilities by keeping in view all the prescribed
conditions.

To recover/collect the existing long-term credits extended by the bank as per
schedule.
19

To assist customers in the process of development by advancing loans for
viable financial projects.
All the 1056 UBL branches are the representatives of the bank. These
branches provide commercial as well as non-commercial banking facilities.
Various structures involved in the organization of UBL are given below.
20
3.3
Organizational Hierarchy Chart
Board of Directors
Executive Committee
President/CEO
SEVP
EVP
SVP
VP
AVP
Office Grade 1
Non Clerical Staff
Clerical Staff
Officer Grade III
Officer Grade
II
21
3.4 Organizational Hierarchy Chart of consumer sector in UBL
Board of Directors
Executive Committee
President/CEO
Group Executive
Global Sales Head
Head Secured Financing
Head Un-secured
Financing
National Sales Manager
Senior Sales Manager
Regional Sales Manager
Relationship
Manager
22
3.5
Location map
WITH an integrated network of over 1000 branches in Pakistan as well as Overseas, UBL
gives you direct access to a comprehensive range of better banking facilities to help you monitor
your business locally as well as internationally.
www.ubl.com.pk
23
CHAPTER # 4
DEPARTMENTATION
UBL like other commercial banks established various departments for the
performance of various functions. Some of the departments of UBL are Foreign
Exchange department, Advance Department, Accounts Department, Deposit
Department and Remittance department etc.
Now we will highlight the various function performed by the different
departments in the UBL.
4.1.
ACCOUNTS DEPARTMENT:
The Accounts department of UBL mainly deals in the accounts of customer
maintained at the bank. The accounting book maintained for these services is
known as cashbook. The summary book and ledger are maintained through
computer.
The cashbook is used for balancing the cash received and cash paid at the end of
the day.
Kinds of Accounts:
24
i.
Current Account
ii.
Saving Account
iii.
Fixed Account
i.
Current Account:
There is no restriction on the deposit and withdrawals of money in this account..
ii.
Saving Account:
In Pakistan saving deposit account can be opened with a very small amount of
money, and the depositor is issued a chequebook for withdrawals. Return is paid at
a flexible rate. Calculated on by yearly basis. However, withdrawals of limited
accounts are generally allowed only one or twice a week. The consumers have to
give a notice of about two weeks before the withdrawals of large amount” the
minimum amount of money required for opening the saving Account is Rs. 500/while to remain the A/c is running position the account holder has to maintain a
balance of Rs. 100/- for the withdrawals are concerned there is no restriction but
the bank discourages very regular withdrawals of small amounts.
iii.
Fixed Account:
“The deposits that can be withdrawn after a specified period of time are referred to
as fixed or term deposits.” The account holder keeps a specified amount of money
for a definite period of time. The amount deposited is not withdrawal by cheques.
And after the maturity of the previously agreed rate of return.
A single individual, partners and companies, too can maintain such accounts as
well. The period of which these deposits are help by the bank ordinarily varies
from three months to 60 months with the agreement made between the customer
and the banker.
25
iii. Business Bank Account.(BBA A/C):
This is the special type of Account (A/c) offered by UBL. This type of A/c is
opened for the students and salary holders. In this A/c there are some facilities
offered for the A/c holder such as……..
I. No restriction of minimum balance.
II. ATM facility.
III. No restriction on drawing.
IV. Transfer facility.
V. Receiving from others Banks with minimum commission.
VI. Receiving of salary from others Banks before 1st of the month.
4.2
REMITTANCES DEPARTMENT:
This department is concerned with the transfer of money from one place to
another. In this, various modes of transferring money are available which are
discussed below.
A.
Mail Transfer (MT):
In this the money is transfer from one place to another by mail. If the person is
account holder of the bank, then the banker debit his account with the amount of
money he wants to transfer. The concerned bank officer will prepare the necessary
vouchers to make the mail transfer complete. It contains on;
1)
Debit Voucher: Debiting the account holder for the amount to be sent plus
the commission and postage charged.
2)
Credit Voucher: credit the drawer branch
26
3)
Mail Transfer Register: The remittance is entered in the mail transfer issue
register.
But if the person is not an account holder in the initiating branch, then he has
first to deposit the stated money with the same bank and then the above process
starts.
B.
Telegraphic Transfer (TT):
People who want to transfer money quickly and without delay use this type of
transferring money. This type of transfer is also very simple. The person who
wants to transfer money fills the TT application form. The applicant asked to
deposit money to be remitted plus the amount of commission and telegraph
charges. After the amount is deposited with cashier, the officer incharge
remittances will prepare the TT message. The TT message also carried a test
number which is a sum of values derived from number items like date, amount,
and the drawer branch consecutive number etc. then this telegram is sent to the
bank where the money is to be transferred. After receiving the telegram the drawer
bank makes payment after the test number is correctly decoded according to the
procedure prescribed.
C.
Demand Draft (DD)
In this way the person who wants to remit money goes to the bank and fills the
application form by filling the name of the drawer branch, amount and the payee’s
name. The amount to be remitted is deposited with the cashier along with the
commission on DD and the in charge of remittances department will prepare the
instrument. It is signed by two officers of the branch and is then handed over to the
applicant. The amount can be received by presenting DD to the drawer branch
personally or through a bank.
27
D. Uni remote (ON LINE TRANSFER).
It is the most faster transfer of money from one bank to another with in the
country.
Thorough on line facility you can transfer the amount from one city to another city
in no time without commission (if you are account holder of the Bank).
In this method the transferor A/c are Debited by the Bank and the transferee A/c
are Credited (to whom the amount is transferred) by his Bank where he has A/c.
The amount is transferred in no time. Online transfer bring great revaluation in the
business world and make business more secure and fast.
The trader transfer money to the seller through bank, and the seller sent goods to
the buyer as soon as possible, and thus buyer save his traveling charges , as well as
he also not close his business of the buying of goods for the business.
4.3
DEPOSIT DEPARTMENT:
One of the important functions of the bank is to receive surplus money from the
individuals, firms and institutions etc. It can be said about the deposit that it is the
lifeblood of any bank. A bank cab not runs its business without the deposits.
The bank usually receives deposits in the following type of accounts, which are as
under.
1)
Current Account
2)
Saving Deposit Account
3)
Fixed Deposit or Time Deposit
4)
Call Deposit
28
`The classification of deposit chiefly on the basis of time and the purpose for
which the account is opened with the bank.
Now we will study the various types of deposits in detail:
1.
Current Account:
This type of deposit is withdrawal by crepes whenever the customer draws crepes
on this account. As such deposit is also termed demand deposit. In Pakistan,
bonds do not allowed any interest on such deposit. And the bond treat these
deposit as current liabilities. The banker also requires the customer to maintain a
minimum amount of balance. If the customer fails to do so, then bank makes
deduction from such accounts/deposits under the heading on incidental chargers.
“Until a few decades bank, the proportion of current deposits in relation to fixed
deposits was very small. In recent years, however, the position has changed
remarkably”.
2.
Savings Deposit Account:
In Pakistan a saving deposit A/c can open with a very small amount of
money and the depositor is issued a chequebook for withdrawals. Return is paid at
a flexible rate calculated on six months basis. However, withdrawals of limited
amount are generally allowed only twice a week. The customer has to give a notice
of about two weeks before the withdrawals of large amounts.
Such account may be maintain and run by an individual, partners and companies as
well.
The most important character of this type of deposit is issued with a
chequebook for withdrawals. The account holder is returned with profit rate,
calculated on six months basis.
3.
Fixed or term Deposit:
29
It is payable to the customer after the expiry of a certain duration. The duration of
fixed deposit are various from three months to sixty months. The bankers offer
different rate of return on the fixed deposits depending upon the duration of the
deposit. The amount deposited in fixed account is not withdrawn able. The
amount is received back after the expiry of fixed period.
One of the most important aspects of term deposit for the banks is that the money
of this deposit can be invested in various what the bank consider profitable.
This type of deposit is also known as single transaction account. It is because the
account holder cannot operate upon the account like other deposit accounts. The
banker usually gives a receipt of the fixed deposit mentioning the amount of
money and date of maturity of the deposit. No pay in slip book, passbook or
chequebook is issued to the customer.
4.4
FOREIGN EXCHAGE DEPARTMENT:
In today’s world no one country can keep itself self-sufficient in every area of life.
So they have to trade with other countries for the things, which she does not have.
But such Business required a medium of Exchange, which is acceptable to the
countries concerned. So they usually do business through the medium of stable
currencies of the world.
For such International Business transaction the bank utilize the service of its
Foreign Exchange Department. The department plays very crucial and important
role in international trade. The service, which Foreign Exchange Department of
the banks offers, is the parallel banking with general banking and additional
30
function of import and Export Business controlled by State Bank of Pakistan. The
rules and regulations are framed by the SBP.
In UBL its foreign exchange department as per SBP regulations carries out the
international banking. The SBP exercises full control over the Foreign Exchange
Business. No transaction is considered effective without permission from the SBP
under Foreign Exchange control Act 1947. Foreign Exchange regulations are
issued though the Exchange control Department of the SBP.
Any transaction in the international Banking shall be carried out at rates
determined by the SBP. For this purpose the SBP fix the rate of US dollar with
other currencies. Foreign Exchange rate committee in Karachi Head Office does
this by the formula approved by SBP and as published daily. It also makes sure the
rates approved are conveyed to the braches on the same day.
Foreign Exchange Department provides the following services to the customer.

Foreign Exchange Currency Accounts

Foreign Exchange Remittance Facility
a.
Foreign Currency Account:
“Government of Pakistan has introduced many important reforms in foreign
exchange control in the county in February, 1990, for the purpose of strengthening
foreign exchange reserve.” UBL as an authorized commercial bank offer the
facility of foreign currency account in four currencies, which are US Dollar,
Japanese Yen, German Mark, and UK Pound sterling.
The foreign currency account facility by UBL is available both for Pakistani
citizen currency account is similar to opening of local currency account. The
account may be an individual or joint account. There are two types of foreign
currency account.
31

Current Account

Saving Account
i.
Current Account:
Just like local currency current account holder no interest is given to the
foreign currency account holder. Foreign Currency A/C are also exempted from
Zakat, Income Tax, Wealth Tax, the Account holder can shift his money abroad
through Foreign Exchange remittance services
ii.
Saving Account:
UBL offers a very handsome rate of return foreign currency saving accounts.
The profit is paid in currency in which is opened. This account too is exempted
form.
Zakat, Income Tax and Wealth Tax.
The facility of inward outward
remittances is granted to the customer.
Purchase and Sale Of Foreign Currencies:
Foreign currency department of UBL also has a very extensive system for
the purchase and sale of foreign currencies. UBL is an authorized dealer in the
touring currency, given the authority by SBP. UBL deals in the sale and purchase
of the following foreign currencies.






US DOLLARS
UK POUND STRELING
JAPANES YEN
GERMAN MARK
SAUDI RIYAL
UAE DARHAM
32
4.5
ADVANCES DEPARTMENT:
Besides deposits the other major function of the bank is to advance money to the
clients. This function of the bank contributes a great deal to the revenues to the
bank. Due to its utmost importance to the bankers’ success, this area is given
special importance and attention.
Bank normally makes advances of the types:

Commercial Finance

Agriculture Finance

Industrial Finance

Export Finance

Import Finance
The banks also advance to small size businesses and construction companies etc.
Many UBL Branches are having departments for granting advances to the
borrowers. Normally, it is responsible for performing the following functions.
a. To handle all the cases of short or long term loans.
b. To process all the cases concerned.
c. To forward the cases for approval and consideration to the higher
authorities.
d. Direct dealing with the borrowers.
e. To insure the disbursement of loan.
f. To inform the high authorities about various loans.
33
UBL make advances in the following ways.
(a)
BY CASH CREDIT:
Through this credit facility, the banker advances loan to the borrower after
having tangible asset as a security. Main characteristics of this facility are that the
total amount is not given to the borrower at once rather it is given in installments,
or when over required. The borrower has to the interest only on the amount
outstanding against him.
The cash credit facility is given either through by hypothecation or pledging
of goods. Some requirements are as under.
i.
Custody of stock remains with the borrower.
ii.
Bank lien on the stock.
iii.
Stock hypothecated must be insured against fire etc.
iv.
Customer must submit the stock report on monthly basis.
v.
Frequent stock verification to be done by UBL.
vi.
Bank may send officers or staff in order to supervise verification
Some characteristics of pledging asset against loan. Stocks are pledged with
under banks lock and key.

Stock must be duly insured against for and burglary.

On monthly basis stock reports has to be prepared by the borrower duly
incorporating delivery of goods, if any during the months.

(b)
Delivery of goods/stock is made against cash payments.
BY DISCOUNTING BILL OF EXCHANGE:
This credit facility is a very advanced form of advancing money/credit to the
borrower. It is also termed as factoring. In this facility, the bank purchases the bills
34
of beaching from the borrower. The bank gives face value of the bill to the
borrower after deducting interest on the remaining period required for the bill to
mature.
(c)
BY OVER DRAFT
Some time it happens that a reliable, regular customer may ask for a very
short period credit. The bank accommodates such customers through the facility of
over-drafting. In this facility the bank charges interest on the outstanding amount
only. This facility may be given without any security or is provided against some
collateral.
It might be a temporary facility or an over-draft-limit may be
sanctioned to the customer, which may be used again and again during a certain
period of time.
4.6
CLEARANCE HOUSE:
It is an association of banks; usually set up in a given locality for the Purpose of
inters changing credit claims. Nearly, everywhere this function is performed by the
central bank of a country. But in cities where there is a no branch of central bank,
other authorized banks perform this fiction. In Pakistan, the areas where there is no
central bank branch the function of clearing house is performed by National Bank
of Pakistan (NPB).
In undertaking the process of inter changing credit the following procedure is
adopted. In banking business when creditor asks for some payment, it is always
the chouse through which the payment is asked for. But there arises to situations
when the payee for payment through cheques. The payee may be account holder in
the same bank i.e. of drawer or he may not be the account holder in the same bank.
When the payee is an account holder in the same bank, then the cheque is directly
transferred from one to the other. And the total assets and liabilities of the bank
35
remains the same. Then in such cases the payee deposits cheque in this bank drawn
on some other
bank. The bank with the cheque is deposited becomes the creditor
of the drawers bank. The debtor bank will pay this amount of the cheque by
transferring it from cash reserves if there is on off setting transaction.
In daily business of the bank, there are a number of cheques deposited with one
bank, which are drawn by other banks. The drawer bank becomes indebted to the
bank in which the cheques are deposited for collection. In the same way the
creditor banks also receive cheques drawn on other banking giving blooms of
payment by them. Now it will be very inconvenient, uneconomical for the bank to
transfer cash for fulfilling reciprocal obligations. The best, easiest and safest way
will be to off set the reciprocal claims of each other and transferring only the net
amount due by any on the Clearing House provides this facility.
The clearance house is the branch of central bank of Pakistan or in case of area
where on central bank is available. The representative of each bank meets at fixed
time on all business day of week. This meeting is held in the bank performing
duties of clearing house. The messenger of the various commercial banks gathered
at the clearance house and transferring cheques payable by other banks while
collecting drawn on their banks. A summary sheet is prepared describing the
number of cheques received and delivered by a bank at the clearance house.
Normally, the banks maintain two books for clearing house.

Inward clearing book.

Outward clearing

Book.
CHAPTER # 5
SERVUCES &PRODUCT OF UBL
36
In banking services UBL provides a number of services. These services include
customer banking, merchant banking and corporate banking. The following is the
brief description of various services offered by the UBL to its customers.
5.1
General Deposits:
Due to the ever-increasing need for capital there are now a few business
enterprises, which are carried, put totally with the owner’s equity/capital. So
borrowing is becoming an essential feature of today’s enterprise. But in case of
banking business borrowing from outside sources is all the most vital. And this is
very common observation in the banking business that in a given bank’s found
treasures the borrowed capital is much greater than its own capital. Bank borrows
mostly in the form of various deposits the greater the difference between the rate of
borrowing and lending; the greater will be the profit margin, for the bank. But the
bank look forward for more deposits, as this will create more funds available for
employment. So greater deposits will result in greater return for the bank and as a
result greater profit. In banking business these deposits are the lifeblood of a bank.
In deposit being the main advantage for the customer is as debts.
When bank receive a deposits from a customer a relationship of debtor and creditor
is established. Customer becomes creditor while bank takes the responsibilities of
debtor. On receiving of deposits the acquired liability for that much amount while
becoming of the deposit, it can invest anywhere it deems right with out consulting
the creditor of the deposit. But it does not mean that the bank becomes the sole
owner of this amount, rather through an implicit agreement the bank will be liable
to pay the depositor money as and when the depositor demand.
5.2
Current Deposits:
37
UBL offers the facility of current a/c both in Pakistan rupees and foreign
currencies. On maintaining such accounts these is no restriction on the customer
residence. These accounts are usually maintained by businessman and business
concerns. It is become that they can take and deposit money as money times as
they deem right during the banking hours. As such these accounts are payable on
demand. In Pakistan on offer any interest. Some of the solvent features of this a/c
are as.
i.
No restriction on number of with drawls from a/c’s and on prior notice is
required for with drawl.
ii.
These A/c’s are regulated under the rules and regulation of SBP especially
deposits of $1000 is free from all exchange control.
iii.
Conversion of these funds into any currency and transfer for of these finds
into any country is not restricted.
iv.
The foreign currency A/c’s are acceptable as a collateral against rupee loans.
v.
In case of payment to third party standing instruction by customer is
required.
vi.
By debiting these a/c’s a TC can be obtained.
vii.
For obtaining lockers facility preference is given to foreign currency A/c’s
holders.
5.3
Saving Deposits:
The main objective of maintaining saving deposits in running status by the
bank is to develop saving habits in the people of our country. Such people may
include young people, married or household woman. These people can start their
a/c by depositing only a small amount at a time. These accounts can also be opened
38
in foreign currencies. Some year ago it was not possible to withdraw money from
saving a/c more than two times in a weak and prior notice was to given the bank
for drawing money above a certain level. This restriction is now removed by SBP
and the customer can deposit and withdraw money as and when required by the
client during the banking hour.
Some of the silent features are as under:

Interest is payable by the bank in accordance with the rates announced by
SBP.

No restriction on the number of withdrawals and the amount of withdrawals
during a week.

The funds of this a/c can be utilized for purchasing Government and other
securities such as foreign exchange leader certificates, special saving
certificates and foreign currency bearer certificate.

Principal and interest earned there is on exempt from income tax and Zakat.

In accordance with Govt. of Pakistan regulation, customer’s deposits are free
from all exchange controls.

If payment of a certain amount is to be made to a third party at regular
intervals i.e. monthly, quarterly, standing instruction to this effect can be
issued to the banker.

TC can be issued to the customer by debiting the customer’s a/c for the
amount.

Preferences given to foreign currency saving account holder in providing
locker facility.

Conversion and transfer of the currency into any other currency or country is
not restricted.
39
The rate of return on these a/c’s are not fixed and are computed and
announced at the end of the half year after half yearly and yearly closing in June
and December respectively.
5.4
Fixed Deposits:
These deposits are created by a single as such there are two transaction involved.
One is when some body deposits the money and the other when the customers
withdraw the money after or before the due date. In case of withdrawing the
deposit before maturity no interest is paid to the deposit holder. The rate of return
on time deposits various with the duration for when the deposit is created. The
duration various from a day as long as five years.
5.5
Uni cash:
Now days carrying cash while going out of your place is very risky. Every body
wants maximum security while keeping is money in his pocket. People make use
of TC and other various credits cards for this purpose. UBL provides such facility
through UNI-CASH the management of UNI-CASH is carried out in following
ways.
a.
PIN (Personal Identification Number)
Personal identification number (PIN) is very important number allotted when a
UNI-CASH card is issued to the customer. This number is made unique by giving
four-digit can financial number and when it is used in conjunction with the UNICASH card is enable the customer to avail the cash point facilities. The allotted
PIN number is kept event confidential form the bank staff by printing it in a special
40
number buy the computer on a pre-sealed, tamper proof PIN millers. These PINMILLERS can only be seen when the customer opens the envelope.
b.
Pin Change:
When a customer after availing the facility first time with the UNI-CASH card,
he/she will be required to change PIN (Personal Identification) number is sought
from security point of view. The change number selected by the customer should
be such that the customer can easily remember it and can not be easily guessed by
other.
c.
Card Serial Number:
Card serial number is given to a particular UNI-CASH card which the customer
can know by looking at the card. The first line contains the UNI-CASH card serial
number with the customer’s name, a/c number and card expiry date is followed in
the subsequent lines.
d.
Withdrawal Limit:
This limit is determined at the time of depositing money for availing the facility of
UNI-CASH card. The limit depends upon money deposited.
e.
Cash Points:
To facilitate the process of getting money through UNI-CASH card a number of
cash points are available in the country. The machines may be used round the
clock. UNI-CASH card are used in these machines for drawing money from the
account and for availing a number of other facilities such as the following.
i.
Balance Inquiry
ii.
Mini Statement
iii.
PIN Change
41
5.6 UBL WALLET VISA CARD:
UBL WALLET VISA is a secure innovative card providing the customers the
benefits of both an ATM (automatic tailor machine) and a debit card locally and
internationally.
With UBLVISA WELLET , the customers have the power of using your card at
more than 925 ATMs across the country and over 900,000 VISA ATM locations
world wide in 150 countries and over 5,000 ORIX locations across the nations and
22 millions VISA merchant locations world wide. It can be used 24hour day,
7
days a week at all UBL ATMs as well as others ATMs in 1Link & MNET
network.
ATM CARD USAGE:
1. Insert the card in to the slot labeled “insert card”.
2. Select the Language.
3. Use the keypad to enter the personal Identification number(PIN).
MAIN MENUE:
In the main menu, select an icon to conduct a transact
CASH WITHDRAWAL:
1. Select “cash” withdrawal” from the main menu.
2. Select the account type.
3. Enter the required amount in multiples of Rs.500* and press OK.
MINI STATEMENT:
1. Select mini statement from the main menu.
2. Select the account type.
42
3. Collect the mini statement.
PIN CHANGE:
1. Select “pin change” from the menu.
2. Use the keypad to enter your new PIN.
3. Reenter your new PIN to confirm.
FUNDS TRANSFER. (From UBL to UBL to others banks):
1. Select “funds transfer” from the menu.
2. Select the type of funds transfer you to wish to conduct.
3. Select the account from which you wish to transfer funds.
4. Select the account to which you wish to transfer funds, or type in the
account number according to the given layout.
5. Type in the amount of funds that you wish to transfer.
6. Confirm the account name and number and amount of funds to execute
The Funds transfer.
DEBIT CARD USAGE:
1.
After shopping, present the UBL Wallet to the cashier the UBL Wallet
is accepted at all outlets exhibiting the VISA logo as well as ORIX logo
displaying machines.
2.
The cashier will swipe your UBL Wallet through the point of sale (POS)
Terminal and enter the purchase amount.
3.
It is as simple as buy, swipe & sign. Simply purchase the item, swipe the
card
43
At the POS terminal and sign on the receipt generated. For transactions on
the ORIX network simply enter the PIN to complete the transactions.
CHAPTER # 6
SWOT ANALYSIS
The word “SWOT” consists of four words, which are stands for Strengths,
weaknesses, opportunities and threats, respectively.
Through the “SWOT” Analysis technique one can analyze the present condition
and performance of a given organization and can prepares plans for the future.
In the SWOT Analysis of UBL the following points can be discussed in brief.
6.1
STRENGTHS:
Its Strengths are as follows.
44

Having reputation for high customer banking services.

3rd largest Bank of Pakistan

Easy asses to branch locality.

Large network.

Professional and skilled management.

Well co-coordinated branch office system.

Experienced personnel.

Strong loyal customer group.

Excellent competitive skills.

Sound level of deposits.

Excellent promotional and marketing campaigns.
6.2
WEAKNESSES:
Weaknesses is something an organization lakes at doing that.for UBL these are.

Customer having accounts with small amounts are not given the same
attention given to those with large amounts.

Security system of UBL main branch bannu very careless

Most of employees are overloaded with the work and promotion is also not
timely.

Low salaries to staff.

Political inter presence.

Low market value of the bank’s stock.

Bad recovery of over due advances.
45

Un-satisfactory working condition of branches.

No availability of sophisticated equipments in branches.

In efficient system of recruiting and selecting of personnel.
6.3
OPPORTUNITIES:
An external situation, which an organization can benefit from,is called opportunity.

Increase the serving customer group.

Due to efficient and experienced management group,UBL can improve and
expend its foreign operations successfully.

Enter new markets.

Increase product line to serve large range of customers needs.

Hiring of well-qualified personnel in the work force.

Deployment of sophisticated technology in offices and branches.
6.4
THREATS:

Increase the number of new local and foreign banks.

Low moral of employees.

Political interference in the affairs of the bank.

Lake of consistence in policies due to Political instability.

Low saving rated in the country.

Economic recession in the country.
This “SWOT” Analysis is a mirror to the bank o its present condition. From this
analysis we can conclude that the bank has done some professional changes in its
banking system. The management can develop elaborated strategy planes for
46
capitalization the available opportunities. One area where the bank has done some
work is the improvement in customer services.
The bank should maintain principle of professional management and adhere the
sound and sophisticated banking rules and regulations in order to build confidence
of people in the institution
CONCLUSION:
After the establishment of UBL in the year of 1959, the bank was successful in
achieving some of its objectives. In the very first the bank earned a handsome
profit.
After the exhaustive era of nationalization, the bank is now transforming to private
ownership again. The decade of 60’s was dominated by on exceptional increase in
economic activities. This result in bringing various changes in the management and
structure of the commercial banks. In area of management more professional were
brought in and the same was done with the structure.
UBL was not an exception to these changes. In the last decade of the century the
bank had witnessed very bad banking business. To rebuild the bank new
professional people were inducted under the leadership of Mr.Zahoor Soomro.
Under this leadership the bank introduced incentive schemes and products such as
CARAMMAD,
ZARAMMAD
and
UNI-MAHANA,
etc,
schemes
were
introduced. The bank also reshaped the product of Rupee Traveler’s Cheque (RTC)
with a new name of HAMRAH.
All these schemes were very successful in stopping the capital flight from the
country, which was the result of the foreign currency a/cs in May 1998 after the
nuclear detonation. Now the bank is focusing on improving the standard of its
services facilities, specially improving its corporate banking and more customer
47
satisfactory culture. All these new and potential improvements are signs of bright
future for the UBL.
After the conclusion I would like to recommend some points which I think if given
due consideration by the UBL management will definitely result in improving the
bank’s image, goodwill and position as well. Like other companies, for expansion
of its business the bank should focus its activities on increasing its stockholders
equity. And also the hank should be obliged and fulfill its obligations to its
customer, stockholders and public. Some suggestions may be given in order to give
right back/objectives.

Development and maintenance of congenial work environment for the bank
employees.

Achieving more customer satisfaction through quality services.

Increasing assets and decreasing expenses through letter management.

Playing more responsible role in the social environment of the society
meaning
full filling the social obligations as well.
48
CHAPTER#7
RECOMMENDATIONS FOR IMPROVEMENT:
Recommendations are based on the previous sections of a report and are
suggestions that the analyst feels are required to be implemented in order to
improve further the standing and position of the firm in the financial world. These
are thus based on the findings and shortcomings noted in an organization while
working with it and then writing on it. Opinions of various capable individuals are
sought who through their real life experiences and deep insight are better able to
49
judge whether the course of action adopted by the organization is going to prove
fruitful or does it require further improvement in the form of changes in its
strategies.
Following are the findings and recommendations for various Departments that
were felt are required while consulting the staff members of UBL, Main Branch
Bannu.
7.1
Deposits Department
The comparative analyses reveal that UBL has the lowest share of Deposits
out of the total in the market. Since deposits are the lifeblood of a bank, it
should attract more customers and expand its deposit base in the following
manner
7.1.1 Simplification of Procedures
The procedure of opening an account should be simplified. The account
opening form should be self-explanatory and include translations in Urdu for
those customers who are not well read, since the fact cannot be ignored that
many people do not have a good understanding of English.
7.1.2 No Duplication of Activities
Once the account opening form is filled there should be no reason to submit
a written application for opening an account, since it not only is a wasteful
and time consuming exercise on the part of the customer but also makes
filing lengthy.
7.1.3 Incentives for Depositors
Those who deposit large amounts of money or are old customers of the bank
should be given free credit lines up to a certain limit. Besides, financial
50
advice should be provided to customers in case there is a change in the
market trend before they seek for it.
7.1.4 Integrated Marketing Approach
All the officers in Deposits Department should be involved in marketing and
not just opening accounts and maintaining their records. This can be done
through improving their personnel relations’ skills and applying the UniService concept of visiting the potential customers at their offices and
homes.
7.1.5 Performance Appraisal
UBL should follow the performance evaluation policy strictly and award
those who bring in deposits and help it increase its market share.
Unfortunately, this has been stated in the bank’s policy but is not being
implemented.
7.2
REMITTANCES DEPARTMENT
The Remittances Department at the Branch is divided into Inland
Remittances and Foreign Remittances.
Both these are dealt by separate officers and involve using specific
stationary and procedures. The following recommendations are made for this
very important Department of the bank
7.2.1 Organizing the Department
The Department is spread over the entire bank with no specific person or
desk for the purpose. Usually drafts and telegraphic transfers are made in the
cash counter that results in hassle for the other customers. A senior officer
detached from the other officers performing inland remittance transactions
51
handles the foreign remittances. It would be better for them to sit together so
that they can benefit from his experience and know how.
7.2.2 Centralized Money gram Services
The customers receiving funds from abroad have to wait quite long in order
to get their money as the branch sends the application form through fax to
the City Branch from where it is confirmed whether the amount has been
credited to the Swabi. Branch or not. This confirmation takes long at times
and there is always a fear of the bank losing its goodwill in case of lengthy
delays. The service should thus be decentralized and the Hub Branch having
the authority of directly confirming the amount.
7.3
CASH DEPARTMENT
The following recommendations are made for the Cash Department.
7.3.1 Expansion of the Cash Counter
The Cash Department at the Branch needs special attention in the sense that
the cash counter is small and becomes crowded when there are more than
five to six customers to attend. Customers purchase drafts and other
instruments from the very same counter where utility bills are collected and
cash is deposited and withdrawn. Hence, if a new counter cannot be built
due to certain limitations the utility bills should be collected through a
window so that the regular customers do not face any problems.
7.3.2 Extended timings for Cash
In order for the bank to progress and compete with the others in the market,
it should extend the time for accepting and withdrawing cash. The customers
face great hardship especially when they come from far off places and find
that the cash counter is closed for the daily transactions.
52
7.4
BILLS AND CLEARING DEPARTMENT
The following suggestions are made for this Department keeping in view the
problems noted in it.
7.4.1 Career Development
It has been noted that the officers taking bills for clearing do not involve
themselves much with the other operations of the bank and thus remain on
the very same post and seat throughout their banking career. This is against
the modern day policies of organizations giving their employees conducive,
rewarding and equal opportunities of prospering and growing with it. Thus,
the Human Resource Department at the Head Office should prepare a plan
that shows the future growth potential of the employees based on their job
performance and evaluation and make it known to all.
7.4.2 Job Rotation
There should be job rotation of employees especially in this department as it
was felt that the employees here know quite less as compared to the others.
This will enhance their capabilities and help them break the monotony
making them find their work more interesting.
7.5
ADVANCES DEPARTMENT
There were certain drawbacks in the application and processing for the loan
requests that were observed at the branch. The findings and the
recommendations are as under
7.5.1 Proper Documentation
53
If valid documents are not obtained before sanctioning the loan limit, it
becomes irrecoverable in case of default by the borrower. It has been noted
that at times the related officers oblige the customer by letting him submit
the documents later and approving the limit by getting the Disbursement
Authorization Certificate from the Credit Committee. It proves to be very
time and resource consuming afterwards tracing the borrower to bring in the
documents. Therefore, correct and complete documents should be attained
before the amount is sanctioned and no leniency shown in any case.
7.5.2 Computerized Record
All the sanctioned cases should have record on the computer as it is easy to
access and does not involve the hassles of maintaining and retrieving large
and old files. For this purpose, training programs should be organized for the
Relationship Managers to enable them to have a basic computer know how.
Through this, they would also be able to assess the financial position of the
prospective borrower in minutes by using related financial software.
7.5.3 Verification of Security
Physical verification of the security tendered is a must rather than to merely
rely on the documents. It had been noted that where the property to be
hypothecated/ mortgaged lay in remote areas such as the Gadoon Industrial
Estate regular physical visits are avoided by the officers. This and the above
factors result in an increase in the non-performing loans of the bank and as
result UBL had more debts turned bad as compared to the other banks. For
this purpose, regular physical verification must be conducted of securities
pledged and hypothecated.
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BIBLIOGRAPHY
i.
Annual Report of United Bank Limited (UBL), 2010-10
ii.
Mr. Aftab khan lecturar in IMS UST Bannu.
iii.
Sir Majid khan lecturar in IMS UST Bannu.
iv.
Mr. Javed khan branch manager of UBL (Parety gate bannu).
v.
Hanif ullah khan customer servecies manager in UBL (Parety gate bannu).
vi.
Strategic management by Fred R David 10th Edition.
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