Internship Report of Askari Bank Limited Lahore

Prepared By

Nabeel Ahmed.

(091646-004).

MSBF

2012

UNIVERSITY OF MANAGEMENT & TECHONOLOGY LAHORE

Acknowledgement

First and foremost, I would like to express my utmost gratitude to ALLAH ALMIGHTY to not

only help me to complete my internship but in finishing this report.

I express my sincere gratitude to Mr. Salman Aziz rana (Chief Manager), Ms. Rafia Alam

(Manager Operations), Mr. Usman mir (Manager Trade) who not only gave me an opportunity to

work in the bank as internee but made the experience for me in every possible way memorable

and full of knowledge.

I would also like to acknowledge all the staff members of Askari, who cooperated with me in

every department. They have provided me with valuable information which helped me a lot in

the completion of this report.

I sincerely like to thank Institute of SPA and my teachers specially Sir khalil Arbi at there who

prompted me to take up this task. This experience has made me more inclined towards pursuing

a professional career with utmost zeal.

And most importantly, I would like to extend my thanks to my family and my friends without

their support this whole experience would not have been possible.

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Table of Content

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Executive Summary:

To attain practical knowledge as a requirement of the MSBF programme, it was mandatory for

me to work in a well reputed organization for a minimum of 6 weeks. With the grace of Allah

Almighty, I was hired as an intern in Askari Bank Limited, Allama Iqbal Town, Lahore for a

period of 6 weeks.

Askari Bank was incorporated in Pakistan on October 9, 1991, as a public limited company. It

commenced operations on April 1, 1992, and is principally engaged in the business of banking,

as defined in the Banking Companies Ordinance, 1962. The Bank is listed on Karachi, Lahore

and Islamabad Stock Exchanges. The Bank has emerged as one of the leading commercial banks

in the financial sector of Pakistan and has made significant contribution in building and

strengthening both the corporate and retail banking in Pakistan.

Prioritizing its products portfolio in line with consumer needs and wants, the bank is committed

to develop products that give more value to its customer-be it a simple bank account or complex

financial of a major project. With its key indicators of progress already soaring to the new

heights, the bank is committed to pull its energies, resources and time to bring higher value and

satisfaction of its customer, employees and shareholders.

During my internship, I learnt and observed how things are done practically, how things are

different from closed classroom and much relies on your ability to judge. I learnt that the

employees of an organization are like a family and each person takes care of the other. The

departments in Askari Iqbal town branch where I work are OBC, Clearing department, Accounts

and remittance department and Credits department. I worked in all these departments for one or

less than one week to understand the basic working of all these, but I worked for two weeks in

Foreign Trade department as according to my supervisor Ms farzana Raza at this department, I

had potential in me to work for them in future. I was the only and first ever intern to refer to

Credits department in last week but because of shortage of time I couldn’t learnt many things at

there.

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I also learnt how customer is being monitored and finally what are the different ways through

which the bank earns money for itself. The two primary things I learnt about banks are that banks

always secure their interest and almost always remain profitable in a transaction.

In the end I would like to say that doing internship, especially during our MSBF program was a

genuinely illuminating experience and gave a just insight of the working of an organization.

Most importantly this experience has further enhanced my zeal to pursue a successful career.

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Chapter 1:

Students of MSBF are requiring undergoing an internship report of one and half month. This is

an essential for fulfill the academic requirement. This internship report is comprehensive report

writing to submit to the SPA department of UMT.

Purpose of this Report:

The purpose of study is to work in real situation and learn banking practice by doing. In this

context its objective is:

To analyze banking operation i.e. financial analysis, operational analysis

To develop concrete and feasible recommendation

To improve the report writing sills.

Scope of this Report:

Examines and identifies key information and issues about 'Bank Alfalah Limited' for

business intelligence requirements

The profile also contains information on business operations, company history, major

products and services, key employees

Studies and presents the company's strengths, weaknesses, opportunities (growth

potential) and threats (competition). Strategic and operational business information is

objectively reported

Provides analysis on financial ratios along with a competitor benchmarking section

Objective of this Report:

Discussion through study of SBL

To understand the various operation and to equip with practical knowledge of the SBL.

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Structure of this Report:

The structure of this report compare with four chapters. First chapter of this report is to describe

the purpose, scope and the objective of this report. Second chapter describe the introduction of

the Bank Alfalah, describe all the department and SWOT analysis. Third chapter describe the

experience in the Bank Alfalah and describe my work that I have worked in different department

in my internship program. Fourth chapter describe the different financial analysis of the Bank

Alfalah and compare it to the Askari bank and gives the conclusion and some recommendation to

the Bank Alfalah.

Limitation of this Report:

It is to admit that the study cover only those aspects which are closely relevant to the

purpose of the study.

The most important limitation from which the study is suffered is the non availability of

information in a manner that required for analysis and the secrecy of bank.

Another important limitation of the study is time and constraint.

Research Methodology:

Both primary and secondary data were used in complication of the report. These tools are

Primary Data:

Personal Observation

Discussion with Bank Personnel

Secondary Data:

Brochures

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Annual report

Bank internship report on BAL available in internet

Internet

Chapter 2:

Introduction of Overall Banking System:

A well-developed monetary sector is pre-requisite for the development of any country. The

banking system can contribute greatly to the realization of a nation’s potentialities for

development by helping to keep aggregate demand in proper balance with the supply of those

resources, which are responsive to monetary demand.

Historical Background of Bank:

Different opinions exist about the origin of the ‘Bank’. According to some authorities the word

“Bank” itself derived from the words “Bancus” or “Banque”, that is a bench. The early bankers,

the Jews in Lombrady, transacted their business of money exchange on benches in the market

place. When the business failed the “Banco” was broken by the people; and the word “Bankrupt”

has evolved from this practice. This etymology is however ridiculed by Macleod on ground that

“the Italian money changers as such were never called Banchieri in the Middle Ages. There are

the others who are of the opinion that word “Bank” is originally derived from the German word

“Back” meaning a joint stock fund, which was italianised into “Banco” when the German the

greater part of the Italy.

Formal Definition:

“Bank is an institution transacting the business of accepting for the purpose of money from

public, repayable on demand or otherwise and withdrawal by cheque, draft, and order and

includes any post office saving bank.”

These are the following types of banks

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Central Bank

Commercial Bank

Industrial Bank

Exchange Bank

Saving Bank

Mortgage Bank

Introduction of Askari Bank

History of Askari Bank

Askari bank is a branch of Army Welfare Trust organization (AWT).Army welfare trust was

established mainly for the welfare of army officials. The office of army welfare trust is situated

at AWT PLAZA Rawalpindi.AWT offers the “AWT Saving Scheme” to the army officials only.

AWT has further units as.

Listed Companies

Askari Bank Limited

Askari Leasing Limited

Askari General Insurance Company Limited

Other Companies

Askari Cement Limited

Askari Aviation (Pvt.) Limited

Askari Guards (Pvt.) Limited

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Askari Projects

Askari Sugar Mills

Askari Farms and Seeds

Askari CNG

Askari Shoe Project

Askari Woolen Mills

Askari Real Estate

ASKARI BANK LIMITED

Askari Bank was incorporated in Pakistan on October 9, 1991, as a public limited company. It

commenced operations on April 1, 1992, and is principally engaged in the business of banking,

as defined in the Banking Companies Ordinance, 1962. The Bank is listed on Karachi, Lahore

and Islamabad Stock Exchanges. Askari Bank has expanded into a network of 204 branches / sub

branches, including 18 dedicated Islamic banking branches, 15 sub branches and a wholesale

bank branch in Bahrain. A shared network of 2,991 online ATMs covering all major cities in

Pakistan supports the delivery channels for customer service. Askari Investment Management

Limited and Askari Securities Limited are subsidiaries of Askari Bank engaged in managing

mutual funds and shares brokerage, respectively.

From the inception it has achieved and sustained an increasing trend of profitability and growth

by focusing on the basic essentials of banking. The Head Office of Askari Commercial Bank,

Limited is at AWT Rawalpindi. The Head Office leads and supervises all the branches scattered

in the far off areas. The departmentalization of head office has been done on the basis of

functions. In order to perform various functions there are eight divisions of the Head Office.

Askari bank is the only private bank in the region that has been approved by the World Bank as a

Participating Financial Institution for the US$ 200 million Line of Credit Sanction to the

government of the Pakistan for the financial sector Deepening and Intermediation Project.

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Present Status of Askari Bank Limited

Askari Commercial Bank was incorporated in 1992 but its performance was much better than

other small banks like Prime Bank, My bank, etc., mainly because the bank has strong backing.

All of these facts show how effectively and efficiently Askari Bank works.

All this show that even the crises in economy Askari Bank Still working well as compare to the

other commercial banks in Pakistan. All this is due to the strong policy making and strategy

formulation of the management of the Askari Bank.

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Revenues 17%

over last year

Total Assets 13%

over last year

Operating Profit 10%

over last year

Advances 28%

over last yearDeposits 17%

over last year

General Profile of the Bank

HIERARCHY

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PRESIDENT

SENIOR EXECTIVE VICE PRESIDENTSENIOR EXECTIVE VICE PRESIDENT

EXCUTIVE VICE PRESIDENT

SENIOR VICE PRESIDENT

VICE PRESIDENT

ASSISTANT VICE PRESIDENT

OFFICER GRADE I

OFFICER GRADE II

OFFICER GRADE III

JUNIOR OFFICER

PHONE OPERATOR

DRIVER

PEON

BR

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CH

HIE

RA

RC

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BR

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HIE

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ORGANIZATIONAL STRUCTURE

Following is the Vertical structure which is followed by Askari Bank. The bank is divided into

different groups, regions and areas, each section is headed by group heads, regional general

managers and area managers respectively and each one take command from the president and

chief executive and answerable for their working to the same.

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Board of Directors

Executive Committee Internal Audit

President & Chief

Executive

Corporate Banking

& Financial Inst.

Group

Operation & Credit

GroupRegions

Retail Banking

Group

Credit Cards

Division

International

Division

Treasury Division

Corporate &

Merchant Division

Investment

Product Unit

Asset Product

Unit

Electronic Technology

division

Credit Division

System & Operation

Division

North

South

Central

Audit Division

Corporate &

Planning Division

Finance Division

Business Dvlp.

Division

Law Department

HR Division

Product and Services

Product and services are the major attribute of any company, which are developed according to

the needs of the customers of the company. Similarly the product and services of the Askari

Bank are developed the customer needs and wants and the expectation that customer attaches

with financial institutions. A product of Askari Bank includes all those services which customer

normally required for effective managing his business.

Askari Bank offers the following financial services:

Deposits

Advances

Products

International Banking Services

Agency Services to customers

Deposits

One of the basic functions of the bank is to receive deposits. Askari Bank accepts deposits in

both local and foreign currency.

Local Currency Deposits

Current Account

PLS Saving Account

Askari Faida account

Askari Special Deposit Account

Advances

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Advances are major source of earning income for commercial banks. Banks attract surplus

balance from customers at low interest rates and make advantage at high interest rates to the

individuals or businesses. Askari Bank provided these two facilities:

Funded Facilities

Non-Funded Facilities

Products

Smart Cash

It is product of the Askari Bank in which is offer to the personal letter of credit and its has two

maximum limits: 500,000 for clean credit and 1000, 000 for secure credit.

Product Featuring:

Borrower: Resident Pakistani Nationals

Facility: Personal Line of Credit.

Financing Limits:  Maximum up to Rs. 500,000/-(Clean)

Maximum up to Rs. 1 Million (Secured)

Tenor: One year (renewable).

Repayment: Monthly debt servicing on the outstanding balance.

Markup Rates: Competitive.

Servicing: Available at all Askari Bank Branches

Balance Transfer Facility: Available.

Eligibility to Apply:

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Employment:

 

a) Salaried: Minimum length of confirmed service with present employer is six

months with a total length of one year service. b) Self Employed: Minimum 1

year in business. (Against security).

Personal Finance

One can avail unlimited opportunities through Askari Bank’s Personal Finance. With unmatched

financing features in terms of loan amount, payback period and most affordable monthly

installments, Askari Bank’s Personal Finance makes sure that you get the most out of your loan.

No matter what your need is Askari Bank has more ways to serve you than ever before.

Product Featuring:

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Eligibility to Apply:

Employment: a) Salaried: Minimum length of confirmed service with present

employer is 6 months with a total length of 1 year

service.

b) Self Employed: Minimum 1 year in business.

ASKCARD

Askari Bank is committed to provide you innovative and competitive solutions to your banking

needs in a more efficient and personalized manner. Your Bank enjoys a strategic competitive

advantage over all domestic players by virtue of its leadership, large network and technological

advancement. In line with our tradition of innovation, Askari Bank takes pride in announcing

launch of Askari 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"

Askari Rupee Traveler Cheques

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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 Traveler Cheques" eliminating all financial risks while

traveling which was launched in March 2002. So avoid risk of carrying cash through Askari

Bank's Rupee Traveler Cheques.

"Your Best Travelling Companion"

Investment Certificates

Askari Bank's Investment Certificates not only provide the added security, investment and

monthly return to the customers. These certificates are negotiable and can be transferred to third

party. Investment Certificates can be issued for a period of 3 months and profit is payable on

monthly basis through pre-printed tear-off coupons.

Product Features

Free issuance and free encashment

Account relationship with Askari Bank is not mandatory

No penalty on pre-mature encashment

Negotiable and payable in Pakistan in Pak rupees only

Askari Value Plus Deposits

Askari Bank leads the way, yet again with the introduction of Askari Value Plus Rupee Deposit

Accounts, which promise greater financial freedom and security, in an un-matched way.

Now you can open a "Value Plus Account" while enjoying the flexibility of a normal checking

account.

Types of Value Plus Account

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Value Plus Current Account

Value Plus Saving Account

Value Plus Time Deposits

Why Askari Value Plus Account?

Free issuance of Debit Card

Free global accidental insurance coverage against debit card irrespective of balance in the

account or age of the cardholder

Free ATM Cash Withdrawal insurance

Askari MasterCard

Askari Bank leads the way, yet again with the introduction of Askari MasterCard, which promise

greater financial freedom and security, in an un-matched way.

Product Features:

No joining Fee is charged after successfully applying for Askari MasterCard.

Comparatively low service charges on Askari MasterCard

In case of any loss or theft of your Askari MasterCard immediately inform Customer Service

Center and get replacement card within 24 hrs.

When you purchase your airline ticket on Askari MasterCard you get:

Up to *Rs.10, 000/- insurance cover for flight delays exceeding 6 hrs.

Up to *Rs.10, 000/- insurance cover for baggage delays exceeding 6 hrs.

Up to *Rs.20, 000/- as baggage loss claim

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*(Certain conditions apply)

Askari Mahana Bachat Account (1 + 3 Years Term)

“Earn Rs.925/- per month on investment of every Rs.100, 000/- for one year!"

“Earn Rs.1, 000/- per month on investment of every Rs.100, 000/- for three years!”

Askari Mahana Bachat Account is a Term Deposit facility available to individual customer with

the option of 1 and 3 Years tenure. It has been designed keeping in view savings needs of

individual investors who don’t want to block their funds for longer terms, with a competitive rate

of return paid monthly on the 1st of every month. A financing facility up to 90% will be

available for customers if required.

Salient Features

Balance requirements: Minimum Rs. 50,000/-

Maximum up to Rs.

10,000,000/-

In multiples

of

Rs. 25,000/-

Askari Deposit Multiplier Account

“Value of initial investment of Rs.100, 000/- will increase to Rs.265, 000/- at maturity!”

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Aim higher with your investments with Askari Deposit Multiplier account. This account is for

individual investors whose purpose is long term savings with high returns. With a tenure of 10

Years and a competitive rate of return on maturity this account is ideal for investors who wish to

start saving for their future today.

Salient Features

Product Type: Term Deposit

Eligibility: Individuals Only

Balance requirements: Minimum Rs. 50,000/-

Maximum up to Rs. 10,000,000/-

Tenure: 10 Years

Profit payment: On maturity

Profit Rates: Competitive

Servicing: Available at all Askari Bank branches

Financing Limits: Upton 90% of the principle amount

Electronic Bill Payment Services

It has always been our endeavor to introduce products and services tailor made to the

requirements of our valued customers. Now you can pay your Utility Bills through:

ASKCARD (Askari Debit Card),

Askari bank's ATMs Nationwide

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Internet Banking Services

Call Center.

Askari Roshan Mustaqbil Deposit

Askari Bank has launched the Askari Roshan Mustaqbil Deposit, a saving plan specially

designed for individual investors who wish to invest now for a regular return at a later stage

while keeping their principal amount intact. With Askari Roshan Mustaqbil Deposit you can

double your investment in a time period of ten years. Invest now in the form of monthly deposits

for five years and get paid back the same amount for the next five years while receiving your

principal amount in full at the end of the tenure.

Salient Features

Product Type: Term Deposit

Eligibility: Individuals Only

Balance

requirements:

Minimum Rs. 5,000/-

Maximum up to Rs. 50,000/-

In multiples of

Rs. 5,000/-

Tenure: 10 Years (5 + 5)

Profit payment: Monthly – on completion of first 5 years

Profit Rates: Competitive

Servicing: Available at all Askari Bank branches

Financing

Limits:

Upton 90% of the principle amount after

completion of first 5 years

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Agriculture Finance Solutions

The role of agriculture in Pakistan economy is of pivotal nature. Due to diverse geographical and

climatic conditions the country has tremendous potential for growth and development in

agriculture. However, adequate and timely financial assistance to the farmers will improve

production potential of agriculture sector in the country. The modern concept of agricultural

credit envisages establishment of an efficient institutional credit system to serve as a package of

credit, supplies and knowledge for the overall strength of the farmers who at present suffer from

low productivity and financial insecurity. A successful credit evaluation system, therefore,

should have the basic ingredients to provide adequate amount at the right time and in the right

form to help farmers in making a productive use of loan funds.

Branch Network in Pakistan

Askari Bank is fully aware that the branch network has direct implications on the services that it

provides to its valued customers. During the year, Askari bank opened no of new branches

including some Islamic Banking branches. It offers services through a network of 204 branches.

Through this branch network, the bank is able to present its wide range of products and services

to its valued customers. Banking products and services, supported by our technology based

services such as on-line banking and ATMs. In the first quarter of 2009 four branches have been

opened and further expansion will continue during 2009 and work is already underway at some

proposed locations. Strategic branch expansion is the bank priority to cover all important towns

and cities and to explore new markets in the smaller towns for its retail, agriculture and Islamic

Banking products and services, following is the map which tells about the Askari bank’s

presence in all over Pakistan.

Overall Appraisal

Bank is growing with the high speed in little time in year 2009 it’s earning increases as compare

to the previous years. The job satisfaction is also very high in Askari than other banks. Its current

condition is comparable with the other good banks in Pakistan and more respectable. Askari use

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latest technology and IT system in the banking. Apart from all this, bank also fulfills its

responsibility towards its society.

Corporate Social Responsibilities

Askari Bank strongly believes that the success of an entity is directly connected with the well

being of a society in which it operates as business could not exist or prosper in isolation. It is

thus giving something back to the society in recognition of the benefits and advantages drawn

from it. Therefore it is our belief that it’s a privilege, not a right, which the Bank ought to pay

back as a responsible corporate citizen.

Marketing Standing (Competition situation, Market share etc)

As the Askari is the army bank, due to these advantages Askari has large Market share in

banking industry. It has the largest share in private sector The National Bank is at number one

position because it is a Government bank and it has all government deposits.

Following are the year wise progress of top 5 banks according to deposits, advances, borrowing

from financial institutions, lending to financial institutions, mark-up earned, and net profit after

tax, share capital and fixed assets.

Market standing of 2007

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From the above figure it is shown that the NBP was on the top in 2007 in deposits but it is not

properly utilize its deposit as compare to Askari and other Banks. Banks borrow from other

banks and financial institutions to maintain the liquidity of the Bank. In earning mark-up, Askari

was on top numbers.

Market standing of 2008

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The above figure showed the market standing of Askari in top 5 banks of Pakistan, in deposits

the Askari is on fifth position and NBP was on the top. In private sector the Askari top brand and

people relay on it and deposit their savings. Although the NBP had large amount of deposits but

in fixed assets the Askari is on top. The advances are source of generating revenue, the more the

advances the more revenue.

Market standing of 2009:

The above figure shows the market standing of top 5 banks of Pakistan in 2009. The figure

shows that the Askari deposits are more than their advances. And largest in fixed assets. In

borrowing from financial institutions the Askari relatively equal to other top banks.

Market standing of 2010

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The above figure shows the market standing of Top 5 banks in 2010. The figure shows that the

fixed assets of other banks increase as compare to previous years. Borrowing from financial

institution and lending to financial institution is lesser than the advances. Over all askari have a

good strength in the market to survive?

Departments in Askari Bank

Banking procedures are divided between various departments. Different departments do their

jobs in the occurrence with the bank policies. In Askari Bank each branch is divided into various

departments. Head of department manages each department and officials of the branch follow the

procedures. There are two basic departments in each branch of the Askari Bank: General

Banking Department and Credit Department, and the third department that’s Foreign Exchange

Department exist in those branches which are allowed by the SBP.

General Banking Department

Credit Department

Foreign Exchange Department

General Banking Department

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There are four basic departments in main branch, Lahore of Askari Bank in the General banking

Department. These departments are controlled by the Operation Manager or General Banking

Manager.

Account Opening Department

Cash Department

Clearing Department

Remittances Department

Lockers

ATM Cards

Credit Cards

Now here is the description of each part separately.

Account Opening Department

Borrowing funds from different sources has become an essential feature of today’s business

enterprises. But in the case of a bank borrowing funds from outside parties is all more vital

because the entire banking system is based on it. The borrowed capital of a bank is much greater

their own capital. Banks borrowing is mostly in the form of deposits. These deposits are lent out

to different parties. Such deposit creation is done through opening an account in the bank.

Types of Accounts

In ASKARI BANK, there are the following types of accounts:

Current Account.

Saving Account.

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Askari Special Deposit Account.

Unique Account.

Foreign Currency Account.

Askari Bachat Certificate.

Notice Deposit.

Term Deposit.

Call Deposit.

Current Account

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

demand. When a banker accepts a demand deposit, he incurs the obligation of the paying all

cheques drawn against him to the extent of the balance in the account. As there is no profit paid

on this account it is also called checking account because cheques can be drawn on it. Current

account is mostly opened for business. In current account unlimited transactions are done. The

minimum deposit for opening current account is Rs. 5,000.

Saving Account

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

PLS account is normally opening for individual, charitable institution, provident and other

benevolent funds. The profit is PLS saving and ASDA Accounts in ASKARI BANK are

chequing accounts paid on the basis of profit and loss sharing at the rate of 8.5% six monthly.

The minimum deposit for opening the account is Rs.5, 000/- (as obvious in the Annexure).

Askari Special Deposit Accountant: (ASDA Account)

ASDA account is an interest bearing current account interest is paid on it at the rate of 8.00% it

is open with the minimum balance of Rs.5, 000. The payment of return is monthly, where as the

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rate of return with aspect to the amount of minimum deposit clear from deposit schedules in

annexure. It is also checking account because cheques can be drawn on it. It is necessary for this

account that the client must maintain a minimum balance of Rs. 5,300 million at the end of the

month, no interest is paid. That’s why it is similar to current account. It has the function of

current as well as the saving account.

It is mostly opened by business but individuals to open this account.

Unique Account:

This type of account is mostly opened by the individuals with the minimum opening balance of

Rs. 5,000. There is restriction in it of maximum two debits and two credit transactions in a

month. There is no profit and deduction on it.

Foreign Currency Account:

It is opened for the person who receives funds from outside the country. The currency is

mentioned in the account opening form.

Askari Bachat certificate:

ABCs are long term fixed deposit for 3 and 5 years. These are not term deposits because

payment of return is on monthly basis rather than on maturity of deposits. The minimum balance

requirement is Rs. 2, 5000/- and maximum balance requirement is Rs.1.0 million. If ABC is for 3

years, the rate of return for 3 years is 12%, if ABC is for 5 years the rate of return is 13.00%.

Because in such account the balance is kept for either ‘3’ or ‘5’ years within the bank no cheque

is drawn on it. That’s why it is not a chequing account, but only payment of return is made

monthly.

Notice Deposits:

Notice deposits are kind of fixed deposits. The minimum balance requirement for opening the

account is Rs.5000/- and payment is drawn on maturity of the specific period. Notice deposit is

of the two kinds:

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One for which a prior notice of 30 days and above is required from the customer before

withdrawing deposited amount and for which rate of return is 8%.

Second for which a prior notice of 30 days and above is required from the customer before

withdrawing the deposited amount and for which rate of return is 10%.

Term Deposits:

A term deposit is a deposit that is made for a certain periods of time. At the end of the specific

period, the customer is allowed to with draw the principle amount.

After the maturity of the term deposit the profit is given to the customer. The rate of return on

this account is 12.0% for 4 years.

Call Deposit:

Call deposit is different from the term deposit. This is basically use for tenders. If a tender is

made, a certificate is given to the person who got the tender. When the work is completed the

issuer of the tender stamped the certificate that the tender is realized. After that the person come

to the back and gets the amount. No profit or loss is given on it.

Account Opening Procedure:

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

are required for all these types of accounts. The operation / procedure requirement that is needed

for “Individual Account” differ greatly from “Joint Account” Proprietorship “Partnership”,

“Limited Company” and “Club Society or Association” as explained below.

Individuals’ Account:

When a single man or woman opens an account in his/her own name and has the right to operate

it is called individual account. It may be of salaried person’s account current or saving accounts.

Documentation:

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National Identity Card.

Employee certificate/ appointment letter along with recent salary slip for salaried person.

Visiting card not only acceptable if exist than feasible.

In case of the Doctor an application on the letter head of the Doctor and certificate of

him/her this type of account is called Self Employed Account.

For lawyer court registration.

For student ID card of the college or university.

Operation:

The person place a “Check Mark” in the type of account and type of operation required.

He/she fills in part-1 of the form, a fix his/her either two or four similar signature (or thumb

expression in the signature space and get it introduced and signed by a person who already has

an account with the bank and write his account no in the specific rows in a specific space.

The person fills in “next of kin” position where he/she father, mother, husband/wife or any other

relative’s name, his/her address, phone no and affix his/her signature to certify this requirement.

This requirement is needed because in his/her absence bank can have correspondence with the

specific person.

The person put her/his signature (or thumb expression) on the signature specimen card (SS

CARD) similar in the area on the form. One the back of SS card mailing address, telephone no,

person to contact and introducer space is filled in. These entire requirements are necessary for

future. SS card is scanned by the bank and check it when they want to verify the signature of the

customer.

Joint Account:

When two or more persons, neither partners, nor trustees, open an account in their name is called

joint account. Joint account can be opened by husband and wife or two persons of same sex.

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Documentation:

For joint account copy of N-I-C Card of all the persons is obtained other things remaining same

as in individuals account.

Operation:

The person checks the type of amount and type of operation required in the respective box on the

form.

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

Signatures of both persons are obtained on the form in the area specified for signature and SS

Cards.

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

Accounts holder specified in the form that they will operate the form singly or jointly.

Proprietorship Account:

When the owner of the firm operating singly, opens an account in his firm name of when an

owner of a firm operating singly, opens an account in his firm name, this account is called a

proprietorship account proper himself liable for all his acts.

Operation

All operation remains the same except that the firm name is written in the “Title of the Account”

area and signature of the proprietor are affixed in the SS Card and the area specified for

signatures on the form.

Partnership Account:

The account is opened in the firm name and all partners designate one or two persons to act on

behalf of the partnership firm all acts on behalf of firm. The partners in the partnership firm are

34

liable for the acts of the firm jointly and severely. Every partner in a firm has an implied

authority bind his co. partners by drawing and enclosed cheques.

Documentation:

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

Application to open the account on the firm’s letter pad.

Partnership deed in case registered partnership firm.

Registration Form (Form-C)

Board Resolution on Letter Head

NTN

Limited Company Account

Documentation:

Account opening request on Letter Head.

Embossed seal resolution (clear instructions regarding operation of the A/C)

Certified copies of Memorandum of Associations/Form-29.Certificate of incorporation /

Certificate of commencement of business.

Articles of Association

List of directors and authorized signatories.

SS card duly signed.

Copies of CNIC of company secretary/ all Directors.

Minor Account:

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Guardian can be natural /parent/legal. They can operate he account

Account must be title as “Minor account”.

Style should be Zulfiqar Ahmad (M) Aftab Ahmad (G).

No credit facility extended to minor account.

Date of Birth of Minor and the date of maturity should be mentioned on the SS card and on

account opening form (AOF).

At the age of the maturity the account should be ceased.

Copy of CNIC of the guardian (legal or natural)

Form- B of the minor.

Trust/ Society/ Provident Funds:

AOF filled by the company nominees

Employees provident fund registration certificate

Trust deed of the employees’ provident fund

Formal account opening request dated by the company along with copies of CNIC of company’s

nominees

Other Responsibilities of Account Opening Department

Letter of Thanks

At the start of the letter 2nd day, ASKARI BANK issues letter of thanks to “Account opener” for

the trust they have on ASKARI BANK.

Stamping “Posting”

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After completing all this process, the forms are signed from manager of the branch after which

forms are stamped across as “POSTED” on one corner of the front side of the form. Then they

are posted in the respective. “Account opening file” very next day cheque book is issued to the

customer when customer brings the Letter of Thanks (LOT). The official person checks the LOT

and fills a slip with account holder signature along with the verification of the sign.

Charges of Cheque Book Issuance

Total charges of issuance of Cheque book are Rs. 6/- per leaf.

If you want to get loose cheques then you have to pay Rs. 320/-.

Reissuance of the cheque book against Form B charges are Rs. 550/- plus Rs. 6/- per leaf.

Issuing procedure

Firstly, signatures on cheque book requisition are verified by matching with signatures on SS

Cards.

Secondly, cheque book leaves number, account number, account holders’ name are mentioned in

the cheque book is made by mentioning and the total of sum of excise duty and provincial tax.

Thirdly, the name of A/c holder and date of cheque book issuance is written on cheque book

requisition the account opening officer puts his initials on requisition leave.

Fourthly, A/c number is stamped over the leaves of cheque book and finally authorized person

affix his signature over the debit voucher and he voucher is attached from the cheque book and is

handed over to the customer.

Account closing:

Account is closed on the written request of the customer Askari Bank debits Rs. Nil as charges

for closing the customer account from that account. The account holder withdraws the amount by

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

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

37

Procedure:

The customer for individuals account write an application to the manager of the bank a simple

paper about the closing of his account with the bank (In case of proprietor ship partnership and

limited company account the application should be written on firm or company letter-head).

The individual or in case of other type-proprietor firm and company surrender the cheque book

to the bank.

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

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

Everyday posting

At the end of each day, posting of cheque books is performed, the account opening department

OG3 makes credit vouchers of excise duty and provincial tax on cheque book leafs, and posts it

in the company and at the end of the day all the leafs with the vouchers send to the Accounts

department.

Procedure of Opening Other Accounts:

Askari Bachat certificate

The ABC application form is filed and signed. All the requirements are properly fulfilled. The

detail is written.

The credit voucher is made against the cash that the customer deposits to the bank.

The certificate is filled according to the specification.

The certificate is then handed over the customer.

The entry is made in the ABC register.

The application is then posted in the file.

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Notice deposit

The procedure for issuing notice deposit in ASKARI BANK is as follows:

The customer comes to the bank and specifies the number of days for which he wants to deposit

hid money in notice deposit.

The notice deposit receipt is then given to the customer.

The number of the notice deposit form and notice deposit is noted receipt is then given to the

customer.

The number of the notice deposit form and notice deposit receipt is noted in the notice deposit

register.

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

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

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

Cheque

Cheque is bill of exchange drawn on specified banker and not expressed to be payable otherwise

than on demand.

The Request of a Cheque

It should be in writing.

The drawer must not put any condition for the payment of the Cheque.

Drawn on a specified banker only.

Payable on demand.

A certain sum of money.

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Payable to a specified person.

Signed by the drawer.

Types of Cheques

There are two types of cheques.

Foreign Currency Cheque

Pak. Rupees Cheque

In the cash department the record is maintained in different types of books and these are:

Receiving Cashier's Book (FCY)

Receiving Cashier's Book (Pak. Rupee)

Paying Cashier’s Book (FCY)

Paying Cashier's Book (Pak Rupee)

Daily cash position Book (FCY)

The receiving cashier’s book is used to write down the details of the incoming cash.

The paying cashier’s book is used to note the details of the outgoing cash.

The daily cash position books are used to prepare the daily ending balance of the cash on hand.

The books for foreign currency are separate while the books for the Pakistani Rupee are separate.

Cash Deposit Procedure:

A customer comes to deposit cash in his account. The procedure followed in the cash department

in this case as follows:

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The customer fills the pay-in slip. There are two types of pay-in slips. The red slip is filled if he

is a current account holder. The cashier receives the pay-in slip and cash.

He counts the cash and makes the detail of the notes at the bank of the pay-in-slip.

Then he compares the detail with amount written on the pay-in slip and signs it.

Writes the entries in the Receiving cashier's book, i.e. serial No, account type, account number,

cheque number and amount.

Cash Payment Procedure:

When a customer comes to withdraw a certain amount from his account, he brings a Cheque

along with him. In this case the following steps are taken.

The cashier receives the Cheque and check it whether it is posted or predated. Cheque can be

cashed within six months. A repeated Cheque cannot be cashed.

He takes two signatures at the back of the Cheque from the bearer.

The cashier counts the cash and makes the detail at the back of the Cheque.

The cash is paid to the person and the Cheque is stamped “Cash Paid" immediately.

The entry is made in the Paying Cash book and the Serial number is written on the Cheque.

Liquidity Maintenance

Askari Bank has to maintain 35% liquidity at SBP. Every branch maintains 5% of its deposits at

the local SBP. But this 30% is kept in the form of Approved securities, e.g. Foreign Investment

Bills and Treasury Bills.

Clearing Department:

It is the department where all bills from outward and inward are cleared. In it there are two sub

departments

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OBC

Local clearing

OBC

It is the department where the funds are collected from outwards and pay to bank’s own

customers and collect funds from bank’s customers and pay it to other banks out of city. Under it

there are two processes

Inwards Bill for Collection

Outwards Bill for Collection

Inwards Bills for Collection (IBC)

When the cheques of Askari Bank is given to the customers of other out of city banks by the

customers of Askari, then Askari has to collect funds from its customers and to pay the other

banks this process is called Inwards Bills for Collection (IBC).

Outwards Bills for collection (OBC)

When the cheques, DD etc of other banks out of city is presented in Askari Bank by its

customers then Askari has to collect funds from other banks and credited this amount in the

customer’s account this process is called OBC.

Local Clearing

There is no legal obligation on a banker to collect cheques drawn upon other banks for a

customer. However it is function of almost every modern bank of the collection of cheques and

bills on behalf of the customer.

Clearing department services are provided in order to make arrangements for the economic

collection of the cheques, DD’s, pay orders and other negotiable instruments. A large part of this

work is carried on through the clearing house.

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Clearinghouse

Clearinghouse is a place where all the representation of different banks and exchange all means

of transaction other than cash and then settlement procedure carried out for the balancing of the

SBP accounts.

The clearance house is in the new Davis road, Abulmalik Plaza, 3rd Floor Lahore. All the clearing

members of each bank go to the clearinghouse for the first clearing at 9:30 am and for the second

clearing at 1 to 2 pm.

First clearing

NIFT is the clearing member of Askari. Rider of the NIFT takes the outward cheques and goes to

the clearinghouse. The outward cheques are given to the respective branch members and inward

cheques received. A summary is prepared and given to the supervisor of the clearinghouse. He

balances the accounts of all the banks.

Second clearing

After the outward cheques, they are checked and the ones to return are to be attached with a

memo. Then at 1 to 2 pm, clearing members goes for the second clearing. At this returned

cheques are received. Once again, the summary is prepared and given to the supervisor for

balancing. The supervisor balances the accounts of nearly 25 banks. The SBP gives ending

position to each member.

Book Keeping

There are three registers in this department:

Clearing summary register.

Inward clearing register.

Clearing Summary Register

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In this register the clearing summary balance is made. The received cheques and the delivered

cheques are written in the respective columns.

Inward Clearing Register

The inward clearing register used to write the details of the inward cheques cleared. Inward

cheques are those cheques, which have been recovered from the different banks. The amount of

these will be credited from one SBP Account. So these cheques are against us and have a

negative effect.

Same Day Clearing

All the cheques are cleared after one day. If the customer says for the same day clearing then

bank official affixes the stamp of same day on the cheques and send to the bank through the

NIFT. The funds are received within 24 hr. from the time of collecting the cheque. But this

cheque must be of more than Rs.50, 000/- . The charges of same day clearing are normally in

higher than the normal procedure.

Clearing Position Statement

After the 1st and 2nd clearing the clearing positioned is prepared.

A. Inwards cheques, Demand Draft, Pay orders etc.

B. Outwards Cheques, Pending cheques

If amount B is greater than amount A, it means that our cash balance at SBP has increased and so

it is a favorable for bank. On the contrary, if A is greater than B, it means that cash balance in

SBP account has decreased and here it is unfavorable for the bank.

Charges of Bills

Collection Clean

0.19% min Rs. 65/- (Up to Rs.100,000/-)

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0.15% min Rs.275/- (Rs. 100,001-1,000,000)

0.80% min Rs.1300/- (over Rs.1,000,000)

Intercity Collection for Cheque through NIFT Charges

Rs.300/- per item (Up to Rs. 1 Million)

Rs.585/- per item (over Rs. 1 Million up to Rs. 2 Million)

Rs.1300/- per item (Over Rs. 2 Million)

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Types of Advances

Funded advances

Non funded advances

Funded Advances

Funded advances are those advances in which funds of banks are involved.

Main features of term finance are

It is for proper time period. May be of one year, two year, and three year. House building finance

is including in term finance.

Account will be debited only once adjustments are possible further but account will be debited

only once.

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Term Finance

Clean Secured

Funded Advances

Term Finance Revolving Facility

Secured Finance

Financing against Govt. securities i.e. price bonds, defense saving certificate.

Documents Required

L/C, Demand promissory note, L/G

Clean Finance

These funds are extended against personal guarantee for salaries people.

Documents Required

LC of Govt. salaries personal, letter of guarantee

Revolving Facilities

Proper limit is facility is called summing.

Types of Revolving Facility

Running finance

Cash finance.

Running Finance

It is extended the business community and Govt. enterprises.

Cash Finance.

Cash finance against tangible securities.

Non Funded Advances

Non funded advances in which bank funds are not involved e.g. L/C, L/G.

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How to establish a Letter of Credit?

Documentary Letter of Credit can only be opened by branches authorized to deal in foreign

exchange. The branches, which are not authorized to deal in foreign exchange, submit their

customer’s application for opening letter of credit duly completed and signed in all respect along

with all other documents to the nearest authorized branch.

After completion of the above formalities the opening should proceed further as under:

Foreign currency amount is converted into Pak Rupee, at TT/OD selling rate.

The names of advising and reimbursing banks are from the International Division.

Full particulars of the LC recorded in the LC opening register.

Separate folio is allotted for each customer in this register and necessary entries for LC liability

and margin are recorded at the time of opening of LC.

Vouchers are passed on the same day.

SWIFT send this L/C to Exporter.

Accounts Department

Accounts department is a department, which deals and checks all the activity of the entire

department. It also deals in expression of finance of the bank. Salary payment is also one

function of the bank.

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SWOT Analysis:

49

Chapter 3:

INTERNSHIP ACTVITIES

Detailed description of Activities Performed on weekly basis

Introduction of Askari Alama Iqbal Town Branch Lahore:

I did my internship in Askari Commercial Bank ltd Allama Iqbal Town branch Lahore. The

branch is located at Iqbal Town main boulevard road, at a prime location near by all other

competitive banks. It has ample parking space and interior of branch is handsomely decorated.

Among the 45 branches in Lahore it is the second best branch with excellent client portfolio. The

branch had a total of 26 employees from the Bank Manager to the teller. Other than these, there

were about 10 workers from security guard to the cleaning boys.

The branch is well known for its credit marketing department.

I joined the Bank 2nd of april 2011 and my internship program ended at 11th of may, 2011.Before

I narrate the experience which I gained during this tenure, I would like to mention the organ

gram of the branch

Branch Management:

Salman Aziz Rana

(Chief Manager)/(AVP)

Rafia Alam

(Manager Operations)/ (AVP)

Farzana Raza

(Manager Foreign Trade)(AMG)

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Muhammad Usama Mir

(Incharge Accounts department)

Mr yaqoob

(Incharge of account opening depatment)

Iftikhar Sb.

(Internal asuditor)

1st Week:

2nd July 2011 was the first day of my internship. I was to report to Manager Operations Ms.

Rafia Alim. Upon arriving at bank I report to him. I was sent to the OBC department. It is the

department where the funds are collected from outwards and pay to bank’s own customers and

collect funds from bank’s customers and pay it to other banks out of city.

Activities in OBC Department:

Normally OBC department comes under clearing department but as it is the main branch of

Askari bank in Lahore and had more work of clearing so to lessen the burden of clearing

department, it has a separate OBC department. I worked in this department for the whole week.

The department had one officer Mr Butt who is solely responsible for all the working. I worked

under her kind guidance and it was helpful to start my internship from here. The first day of my

internship , I was introduce about the OBC department and I keenly learned it as before this I

didn’t hear this term, but as it was my first day so I remain little bit reserve and ask just a few

questions. On second day I was asked to feel free to ask as many questions as I want and I learnt

the following things from this department. There are two main processes in this department

Inwards Bill for Collection

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Outwards Bill for Collection

2nd Week:

On second week I was referred to the clearing department to learn the activities of this

department. This department has three officers; Mr. Usman mir is the in charge for this

department who was doing this laborious task as there was a rush of work at this department.

Despite of being busy they gave me sufficient information about the working of department and

in fact after two or three days I assist them in their working. It is the department where all bills

from outward and inward which are within in a city are cleared.

Clearing department services are provided in order to make arrangements for the economic

collection of the cheques, DD’s, pay orders and other negotiable instruments. A large part of this

work is carried on through the clearing house. The clearance house is in the new Davis road,

Abulmalik Plaza, 3rd Floor Lahore. All the clearing members of each bank go to the

clearinghouse for the first clearing at 9:30 am and for the second clearing at 1 to 2 pm. NIFT is

the clearing member of Askari which does all the clearing work on Bank’s behalf.

Activities in Clearing Department:

For inwards clearing

The following procedure is adopted by the branch for clearing inward items. First of all in the

morning rider gives the cheques to the bank. Then the account of the customer who issues the

cheque is debited and returned the cheques which are not fulfill the requirement of the clearing.

Then all the cleared cheques are U. V Scand. Then canceled the cheques and send for the

supervision to the head of the clearing department and to the operation manager. After the

supervision some cheques may be returned. Then funds of all the cleared cheques are sent to the

head office in the form of advice. Head office collect funds from all the branches and send to

SBP. Cheques send to the accounts department they keep these cheques as a record.

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For Outward clearing

All cheques received for outwards clearing to be deposited by the customers are be accepted on

the bank’s relevant pay-in slip duly filled in by the depositor as per printed columns of the pay-in

slip. Immediately on the receipt of the instrument the cleaning official of the bank affixes the

bank’s crossing and clearing stamps on the face of the instrument payee’s account will be

credited on the back of the instrument. The pay-in-slip shall be stamped on both parts with the

clearing signature beneath the stamp. Then the amount is credited in the account of the customer

and system gives a sup. Code this code is wrote on the cheque.

All instruments received over the counter and from branches for outward clearing are entered in

the outward clearing register (Askari Commercial Bank CLG BK 953). All columns of the

registers are filled in for each instrument received from any other branch of the bank; the name

of the branch is mentioned in the column for the name of depositor. Then these cheques are

given to the NIFT

After clearing all the cheques the detail of these cheques is sent back to NIFT by the responding

bank and as well as the returned cheques. These returned cheques give back to the customer who

deposits that. In the next day bank receive the advice of the fund clear and the detail of the clear

funds of main as well as the other branches of the Lahore. The main branch gives these funds to

the other branches in the form of credit advices and sends a debit voucher of the same amount to

the accounts department.

Same Day Clearing

All the cheques are cleared after one day. If the customer says for the same day clearing then

bank official affixes the stamp of same day on the cheques and send to the bank through the

NIFT. The funds are received within 24 hr. from the time of collecting the cheque. But this

cheque must be of more than Rs.50, 000/- . Bank deducts charges for the same day clearing.

3rd Week:

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Accounts and Remittance Department:

In 3rd week I was sent to the accounts department, the department has an accounts manager Mr.

usman mir, and three officers named Mr. Nauman, Mr. Faisal. I feel that this is the department

which was overstaffed as there is less work to do.

Activities in Accounts Department

In this department Mr. Nauman is the source of getting information about the working in this

department. He was really a nice person and he shared all the possible information about this

department. His work at department was to sort out all the cheques and other instruments which

were collected for the previous working day according to their respective accounts/heads. After

the sorting completes all the instruments are verified by ticking on vouchers so that any mistake

can be avoided.

Remittances Department:

I worked just three days in this department. Mr. Faisal was the officer who deals this department.

Remittance department provides to the customer of the bank for their convenience to transfer

funds. The main function of this department is transfer of funds through Demand Draft, Pay

Order, Telegraphic Transfer and Pay Slip.

I was tell about the issuance of Demand Draft, in which first demand draft application is to given

to the customer, he fills in a relevant information and signs it. The officer in charge then checks

the information form. The charges such as commission, excise duty, postage are charged as per

effective schedule of Charges. Tax is exempted if he is taxpayer and knows his NTN.

In case of cash deposit the cashiers counts his amounts and sign the DD application and enters it

in the register. The cash received equals the amount of remittance and the cheques there on. Then

the officer of the bills and remittance department signs it and operation manager counter signs it.

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4th and 5th week:

Foreign Trade Department:

After the 3rd week I ask permission from manager operations for foreign Trade department. I

remained there for two weeks as one of the officers was on annual leave and other was on a

training programme with SBP so there was only Manager Foreign Trade, Ms. farzana Raza was

working. For the first two days she deals me and shares his worthy knowledge which he freshly

gained during his training.

On the day 3rd in this department I gained the attention of senior officer and after which I spent

more 8 days with them. He was a very capable person having much knowledge of not only

foreign trade but also general banking and credits as I noticed many time that relationship

officers often comes to Mr. Khalid to ask their queries.

He gave me the blank copy of L/C for study at home. The next day I have many questions from

that L/C form and he replied all my questions like what is the meaning of Irrevocable L/C, The

term Documentary Credit which can be used in place of L/C, who is the beneficiary, the parties

involved in L/C, Trans shipment and partial shipment, Bill of Lading and Airway Bill and All the

things which were mentioned in that L/C form.

And also know about the two types of L/C

Sight: As I learn that in this case, time period is not specified. Payment should be made

immediately. The draft is to be drawn at sight within 12 to 115 days limit. Documents negotiated

and received against sight are held as security till their retirement.

Usance: In this case there is specified time period. The drafts are for the period of 30, 60, 90,

120, days specified in the L/C and are payable to customer on due date.

To whom Export Refinance under Part-1 is allowed?

55

Export finance is allowed for exports against a Letter of Credit or a Firm Contract. In case of a

LC name of the commodity and the amount of LC are noted but in case of the contract, full

details of the contract are noted and exporter verify the signature of buyer on the firm contract.

Sales on consignment basis do not qualify for refinance facility. Finance is allowed for total

period of 180 days inclusive of pre-shipment and post-shipment period. However, if the exporter

avails finance on post-shipment basis, it shall be for 180 days or the date of realization of

proceeds whichever occur earlier.

Documentation

Pre-shipment

DP Note

Undertaking (as per Annexure A of the said scheme) on non-judicial stamp paper

Copy of letter of credit or firm contract/firm export order

Post-shipment

DP(Demand Promissory) Note

Undertaking (as per Annexure A of the said scheme) on non-judicial stamp paper

Copy of letter of credit or firm contract/firm export order

Bill (s) of lading

Invoices

To whom Export Refinance under part-2 allowed?

An exporter avails of finance limit at the concessionaire rate in a financial year to half of the

export performance of eligible commodities made by him during the previous financial year. The

56

limit is available to the exporter on revolving basis. Where in outstanding balance on any date

shall not exceed ‘Half’ of the export performance. The exporter shall be required to repatriate

export proceeds of eligible items (excluding receipts from exports for which finance has been

obtained during the period) two times of the daily average of finance obtained by him during the

monitoring period.

Documentation

Copy of Letter of Credit

DP Note

Undertaking (as per Annexure of the said scheme) on non-judicial stamp paper

Form ‘EE’

Customer’s invoices

Bill of lading

6th Week:

Credits Department:

After spending two weeks in Foreign Trade department I was allowed by Chief Manager, Mr.

Khawaja Safdar for the Credit department. Here I was under supervision of a Credits officer, Mr.

Naveed. He was a very competent person and quite professional. I spend only last three days in

this department. On 2nd day Mr. Naveed gave me the introductory lecture and I was really

impressed the way, he delivered the things and on asking he told me that he was a teacher by

profession and also delivered lectures at IBIT for two to three years.

The things which I learnt from this department are:

First he tells about that Credits/Loans are of two types

57

Credits

Funded Non-funded

For local, corporate and international. L/C L/G

He explained all these that on Funded loans bank charges markup on them and on Non- Funded

bank charges commission on them.

For local funded loans Pledge is to be made and any physical goods remain kept under bank

custody for 120 days, while it is FIM (finance against imported merchandise) for international

transaction.

For capital expenditures bank also provide Term loans, bank advances on future expectation or

cash flow which customer is claim to generate from utilizing that amount on capital expenditure

like on machinery.

Hypothecation, in it goods physically remains in customer custody. In this customer make stock

report and send to the bank.

Import related facilities: Banks provide two types of facilities FIM against pledge for sight L/C

and FATR (finance against trust receipt) against Hypothecation for sight L/C, maximum for 90

days.

Application of knowledge learned during MSBF studies:

58

To be very realistic whatever I learned during MSBF, all was not applied in the field where I did

my work. But many things that I learned in management and finance courses like in Organization

Theory and Design, Banking and Finance are applied but there was no special IT knowledge

applied in banks except it helped me in making this report.

Like in OTD I learned about the organizational structure that helps me a lot in understanding the

structure of ABL. In management I learned about the culture, management styles, leadership,

conflict management, these all helps me a lot in understanding the application of these things in

banks.

In our finance related subjects the course of Banking and finance was very useful for me as I

already had familiar with many terms like L/C, Bill of lading, pledge, hypothecation etc, that’s

why I understand the working in better way.

Above all this theoretical knowledge the skills of hard work, regularity, confidence and look

presentable gave the real edge to me and I am highly obliged to IBIT for all this.

59

Chapter 4:

Growth Prospects and Trends of Last Five Years

Profit after Tax of Askari

In 2007 bank had profit after tax PKR 2681 Million and in 2007 it decreased to PKR 386 Million

and that is due to increase in administrative expenses , from 2009 Askari started to stable its

administrative expenses and the result of that, Bank grew and earned profit after tax PKR 1108

Million. In the coming years company follow the same policy and progress with the profit after

tax of PKR 1108 Million, PKR 943 Million, and PKR 1628 Million, in 2009, 2010 and 2011

respectively.

Deposit and other Accounts

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c

The above figure shows that Askari had PKR 167677 million in 2007 and it reached at PKR

205970 million in 2008 with the growth of 17.23%. Askari have the smooth branch network in

Pakistan and have the access of those areas where there is no other bank, taking the advantage of

smooth network to increase the deposits of the bank. In 2009; askari deposits grew 22.84% from

previous year and in the next year increased with 26.84%. Due to economic conditions of the

country the bank could not sustain the growth level, although the conditions were not in favour

of the bank, bank decrease with 13.90% with the deposits of PKR 291503 million.

Advances

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The above diagram shows the advances or Loans given by Askari, the increase or decrease in

advances depends upon the rate of interest charge by the bank and deposits of the bank. In 2007

askari advance loans PKR 100780 million and that increase in comings years with 27.82% in

2008. In 2009 due to inflation and large amount of NPLs; State Bank imposed some restriction

on advances in shape of interest rate and policies. Due to above policies the change in 2009 and

2010 was 4.83% and 13.14 respectively.

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Ratio analysis:

Ratio of Askari and UBL:

Financial Ratios Analysis of Askari & UBL 2008-2011

Ratios 2008 2009 2010 2011

Askari UBL Askari UBL Askari UBL Askari UBL

Current Ratio 0.18 0.18 0.18 0.20 0.17 0.19 0.16 0.17

Cash Ratio 0.11 0.10 0.12 0.12 0.09 0.14 0.10 0.11

Equity/Assets 0.08 0.09 0.08 0.12 0.07 0.12 0.07 0.12

Return on Assets 0.00 0.01 0.00 0.01 0.00 0.02 0.00 0.00

Return on Equity 0.02 0.15 0.05 0.13 0.04 0.14 0.07 0.04

Percentage (%)

Non-interest revenue/Total

revenue

12.83 17.06 10.13 16.09 9.29 14.57 8.14 15.27

Commissions ,brokerage

etc/Total revenue

5.96 9.98 5.19 8.17 4.22 9.13 3.35 8.11

Cost/Income 97.81 77.84 93.49 80.65 95.77 74.45 93.24 74.57

Mark up/Total revenue 87.17 82.94 89.87 83.91 90.71 85.43 91.86 84.73

Net interest income/Pre-tax profit 1678.13 200.78 550.02 232.95 737.73 192.24 417.23 181.67

Customer Advances/Assets 62.48 61.29 53.09 57.14 48.54 47.76 43.84 49.18

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Cash and interbank loans/Total

Assets

11.86 13.27 12.73 14.48 11.29 14.03 9.89 11.69

Investment/Total Assets 17.30 19.21 26.36 21.97 32.49 32.14 38.91 32.90

loans/Deposits 79.50 81.47 67.80 76.67 63.28 62.86 52.25 65.51

Loan loss provision/Loans 3.06 2.06 2.09 3.34 1.89 2.31 1.20 0.67

Customer deposits/Liabilities 88.15 87.97 88.25 89.98 87.43 89.05 91.38 88.20

Interbank funding/Liabilities 7.99 8.04 8.27 6.43 8.73 7.29 5.42 7.34

The above table shows the financial ratios of Askari and UBL of 2008, 2009, 2010 and 2011 .

The current ratio of UBL is more than the ABL’s the current ratios shows the relationship

between current assets and current liabilities. The UBL has strong position than ABL to pay its

current liabilities out of current assets. The current ratio of ABL is equal in 2008.

The cash ratio (liquidity ratio) shows the relationship between the cash and cash equivalent and

current liabilities. From the above table the cash ratio of Askari is more than the ABL but vice

versa in 2011.

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CHAPTER 3

Conclusion and recommendation:

It was a good experience of doing internship in Askari and I have learned a lot. Askari is a big

organization and all works are done in manner. Manager of our branch is well disciplined that’s

why branch have good morale over other branches .During my internship my findings were:

There is proper documentation style, new employee very easy to find any document.

Up-to-date record

The staff is cooperative with employees also cooperative with customers. They only pay

intention to permanent staff member.

Most of the staff members deliberately are pending their work to next days.

Using exchange during customer dealing hours.

Very strict criteria for open an account.

Favoritism with the customers

The recommendations that I feel are as follow:

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The documentation in proper format but manage it date wise so the new employee and any other

employee of same branch can easily find the required file.

The staff should welcome new employee, and should not treat them their replacement and tell

them all the work they are doing and should trust on them, if they are not supporting them then

they find difficulty in running bank matter, the loss is only the bank.

The work should not be pending to late hours it should do regular and on time the benefit is that

the expenditure will reduce if they do it on time

There are very strict criteria for open an account, every customer who wants to open an account

must follow the criteria except the favourite customer, or who have belonging to any branch

officer. There should not be favouritism with the customer and should treat every customer on

equal footing

The purpose of any institute is to impart maximum knowledge and exposure to its students so

that they are ready to meet the challenges awaiting them in the practicle life. For this purpose,

the department can arrange workshops and tours for the students to enhance their exposure and

work experience.

The department has to market itself by handing out the latest CV book of its graduates through

its liaison person as lack of awareness about the degree and the institution poses job problem for

the students.

There should be some taste of extracurricular activities which should be held side by side with

studies like Tilawat, Naat, speeches on different topics and other competitions among all batches.

With this students and department both will be benefited a lot.

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BIBLIOGRAPHY

Financial statement of HBL, MCB, ABL, UBL, NBP

http://www.google.com.pk/search?

um=1&hl=en&biw=1024&bih=571&tbm=isch&sa=1&q=askri+bank

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

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

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

http://en.wikipedia.org/wiki/Askari_Bank

http://www.careermidway.com/jobs/company/Askari-Bank-Limited-960/page1

http://www.careermidway.com/jobs/company/Askari-Bank-Limited-960/page1

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

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

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

https://secure.askaribank.com.pk/

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

https://secure.askaribank.com.pk/

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