Documente Academic
Documente Profesional
Documente Cultură
BANKING IN RETROSPECT
The word “Bank” is of a European origin and is derived from the
Italian word “BANCO”, which means a table or a counter. In the
opinion of the eminent scholars of banking, the reason why this
word was given to the banking business was the then prevailing
traditions of Lombardian money changers. It was at the end of the
middle ages when the trade and the business of exchange of money
was flourishing in the Northern cities of Italy and the money
changers used the wooden benches to carry out their business in
the markets of buying and selling of various currencies.
The Greeks, in the early stages, had almost the similar banking
activities to that of Babylonians. At that time the sacred temples
were the most popular place of banking operations but did not
monopolize it totally. The financial activities like accepting deposits
giving loans, checking and exchanging money and making
remittances between different cities, to minimize the risk of carrying
money were being carried out during 4th Century B.C.
MODERN BANKING
The banking which was known in various forms and guises in the
ancient civilization in various parts of the world did not coincide with
the emergence of the modern Banks. The banking which had its
roots in the flourished culture and had lost its required effectiveness
regained the strength with the development of the modern banking.
VISION
“Excellence in all that we do.”
Group Information
Ithmaar Bank B.S.C. is licensed by the Central Bank of Bahrain and
listed on the Bahrain Stock Exchange (ITHMR). It has a paid-up
capital of US$360 million, total equity of US$1.1 billion and is a full
investment bank with its direct business covering the Middle East
and North Africa (MENA) region, as well as South Asia, Asia-Pacific
and Europe. Besides holding significant investments in the banking,
financial services and real estate sectors in different markets, the
main activities of the Bank include underwriting (equity and other
financings), private equity (structuring, participation and portfolio
management), Islamic financing, private banking, and advisory
services covering project financing, investments, capital markets
and mergers & acquisitions.
Board of Directors
Syed Naseem Ahmad Chairman
Management Information
Features:
Faysal Sahulat
Features:
Features:
Faysal Premium
Features:
Features:
Features:
Features:
• Faysal Finance
Product Features
Documentary Requirement
Salaried Individual
• Copy of CNIC.
• 2 Photographs (passport-sized).
• Salary Certificate.
• NTN Certificate.
Product Features
Eligibility Criteria
Documentary Requirement
• 2 Photographs (passport-sized).
Product Features
Eligibility Criteria
Documentary Requirement
• Utility Bills/Credit Cards Bills for CCM “B” rated & others.
• SME Finance
• Trade Financing
• Investment Banking
• Agricultural Financing
• Cash Management
Corporate Financing
Trade Financing
Investment Banking
Cash Management
Services
• PocketMate Visa Debit Card
• Travellers Cheques
• Transfer of Funds
• Non-stop Banking
Travelers Cheques
Transfer of Funds
Customers can deposit and withdraw cash from any branch of Faysal
Bank, regardless of which branch the account is in. Customers need
only to carry their cheque book.
All branches of Faysal Bank remain open for business from 9 a.m. to
5 p.m. from Monday to Thursday and Saturday. On Friday, the bank
is open from 9 a.m. to 12.30 p.m. and then again from 3 p.m. to 5
p.m. To suit customer needs, FBL has extended its banking hours on
Saturdays. Now customers can enjoy its consistent and quality
service from 9 a.m. to 5 p.m.
Ticker FYBL
Country Pakistan
Branches 129
Website www.faysalbank.com
ORGANIZATIONAL STRUCTURE
The organisational structure of Faysal Bank is functional. Faysal
Bank has nation wide network of branches. Most of the departments
have been divided on the basis of functions.
Structural dimensions
Formalization
Specialization
Standardization
Hierarchy of Authority
Centralization
In Faysal bank the Centralization is high and the goals are set by the
top management and low-level management just works according
the guideline provided by the top management.
Complexity
Professionalism
Board of Directors
Chief Executive
Officer
Executive
Committee
Executive Incharges
Operations Department
• Remittance
• Cash
• Account Opening
• Customer Service
Agri-Finance Department
Marketing Department
It peruse the customers to make business with the bank either in the
form of deposits or by applying for financing. Different tools and
• The employees are important part of the bank, but they are
not satisfied with the pay- scale which is very low. The bonus
given and the annual increase in pay are very low which may
cause dissatisfaction in employees or it may lead towards the
high turnover of the employees.
Departments, I served
During my internship at FBL, I got a chance to work in three main
departments.
These are:
• Clearing Department
• Account Opening
• Remittance
CLEARING
I started my internship in the clearing department where my
supervisor was Madam Shabnam Riaz. I spent 4 weeks in this
department. During my stay in this department, my supervisor told
me the basics and the practical work involved in cheque clearing
and cheques received for collection purposes.
I would like to start from cheque clearing. The major things involved
in this context are to be discussed here.
Types of Clearing
The Clearing process is of two types:
• Inward clearing
After looking for the necessary components of the cheque, the next
procedure is to affix stamps on the cheque and the deposit slips.
• Clearing stamp.
• The stamps are duly signed by the authorized officer of the
bank. In FBL new garden town branch, the manager operations
Mr. Ahsan Iqbal Sheikh signs the stamps.
The date on the clearing stamp is always one day ahead, because
the cheques are presented in the concerned branches the next day
for payment.
• Cheque amount.
• Deposit slip amount.
• Depositor’s account number.
Filing of Documents
The cheques which are sent for local clearing may be returned for
the following reasons:
• Funds Insufficient
• Signatures Differs
• Dormant Account
That clearing process was not efficient and the cost was high,
chances of dishonor of the cheques were high and process of
clearing was lengthy. State Bank of Pakistan also kept no proper
records of clearing cheques.
Automated Clearing
In major cities, the functions of the SBP clearing house have been
handed over to NIFT to the extent of sorting of payment instruments
and preparing clearing schedules. The agent of NIFT directly collects
the cheques from each branch of the bank instead of collecting from
head office. Now the process of segregation and sorting the cheques
is done by the NIFT rather commercial banks through the automated
system. NIFT also keeps the record of cleared cheques and also
provides the net position to the banks.
After discussing the role of NIFT and SBP, I would like to discuss the
procedure of cheques on collection which is as follows
Cheques on Collections
Cheques for collection are those which are not included in the local
clearing. They are outside city cheques. There treatment is
somewhat different as compared to local clearing cheques.
cheque.
• “Payee’s Account will be Credited on Realization” stamp on the
back of the cheque.
• “Outward Collection Number” stamp on the back of the
cheque. The same stamp is also affixed on the deposit slip.
• Date.
• Beneficiary Name.
• Cheque Number.
• Account Number.
• Amount.
• Bank Name and Address.
After stamping and entries, the cheques are posted in the system.
The software used for this purpose in Faysal Bank is “SYMBOLS”.
After posting of cheques, the letters are printed from the system
For those outside city areas, where Faysal bank has its branches,
cheques on collection are sent to these branches which collects the
funds from the branches on which cheque is drawn and then credits
the same in the customer account. This branch sends those cheques
in its local clearing and after the clearing process the funds are
transferred to the customer’s account.
Those areas where FBL has no branch, the cheques are directly sent
to the branches on which the cheques are drawn. These branches
draws a Demand Draft in favor of Faysal Bank which when received
by the branch lodge in the local clearing for the release of funds.
Filing of Documents
The cheques which are sent for collection, if not realized after a
reasonable period of time, reminders are issued to the respective
bank’s branches. For record purposes, photocopies of reminders are
maintained in the file called “COC Reminders”.
Realization of COC’S
When cheques are sent for collection, they are treated as a liability
for the bank. When COC gets realized, the entries are made in the
OBC (Outward Bills for Collection) register bearing the realization
date. The realized cheques on collection are also kept in separate
file called as “COC Realized”.
COC Returned
• Introduction of Account.
• Introduction by Staff.
• Obtaining CNIC from the Customer.
• CNIC Verification from NADRA.
• Verification of the Customer’s Name.
• Occupation/ Employment Evidence.
• Customer Profile Form (CPF).
• Verification of signatures on Account Opening Form and SSC
(Signature Specimen Card).
• Signature Scanning from AOF/SSC.
• Sending Documents to CPU.
• Initial Deposit.
• Letter of Thanks.
• Issuance of Cheque Book.
Introduction of Account
Introduction by Staff
Occupation/Employment Evidence
The signatures on the completed AOF and SSC must match with
each other. The account opening officer must give reasonable
attention for the purpose of verification of the signatures. This is
manually done by the officer without using the system.
Initial Deposit
After the confirmation from CPU after three working days that the
account has been opened for the customer, the account number is
allotted to the customer and the customer deposits an initial amount
in cash. Cheques may only be accepted as part of the initial deposit
Letter of Thanks
Letter of thanks is the letter issued by the bank to the customer for
two purposes:
Closing of Account
At any time the customer can come to the bank and ask for the
closing of the account. For this purpose, the following requirements
are to be fulfilled:
After doing this, the documents which are to be sent to the Central
Processing Unit (CPU) are:
The CPU confirms the credentials of the account holder and after
necessary verification, closes the account of the customer and
confirms the branch via fax.
Categories of Accounts
An account can be opened in any of the following categories:
• An Individual Account.
• Joint Account.
• Partnership.
• Copy of CNIC.
• Copy of Services Card or any other proof of employment.
• Power of Attorney.
• Declaration of Proprietorship.
• Copy of CNIC.
• Completed Signature Specimen Card.
• Power of Attorney.
• Income Proof.
• Any Other.
REMITTANCE DEPARTMENT
In the last week of my internship I was moved to the remittances
department where my supervisor was Mr. Siddiq Ahmed. He was
very encouraging personality and helped me in each and every way
• Pay Orders.
• Demand Drafts.
• Traveler’s Cheques.
• Tele-graphic Transfer through SWIFT.
• Western Union Money Transfer.
Pay Orders
Validity
Pay order is valid for 6 months after the date of issue. If the
customer does not claim the payment within 6 months of the issue
then the amount of the pay order is included in the “Unclaimed
Account” and the amount stays there for 10 years.
o Transaction Details.
Mode of Payment.
Demand Draft
Types
• Local DD.
• Foreign DD.
Local DD
In FBL, local demand drafts are not issued. Local DD’s are those
which are issued by the banks for the settlement of funds between
the cities.
Foreign DD
Nostro A/c
Vostro A/c
Traveler’s Cheques
• Local TT.
• Foreign TT.
Local TT
In local telegraphic transfer, the funds are transferred from one city
to another. The local transfer system is not been used in FBL. The
method was that the customer who wanted to avail this facility was
given the funds transfer application. The person who wanted to
remit the money used to provide the details of the receiving person.
The transaction was done between the banks. The bank remitting
the money used to credit the account of the person sending the
money and the paying bank used to debit such account and made
payment to the receiving person. The payments were done on the
counters. The NIC of the persons were taken in that kind of
transactions. This system has not been used today because the SBP
has started restricted the counter payments due to the fraudulent
nature of the transaction.
Foreign TT
o Applicant’s Details.
• After filling out the information, the customer signs the form
and hands it over to the remittance officer along with the
cheque.
The completed form along with the cheque is sent to the FBL head
office where all the SWIFT operations are taken place. The head
office makes all the dealing with the correspondent banks in abroad
for the purpose of TT.
SWIFT has its headquarters in Belgium and has offices in the world's
major financial centers and developing markets.
Joining SWIFT
Following are the steps below to learn how to join SWIFT, connect to
the SWIFT network and become fully operational.
Procedure
Every client has its own SWIFT BIC code, in order to identify
Financial Institutions. BIC stands for Bank Identifier Code. To transfer
messages securely and efficiently, the client bank connects through
SWIFTNet network by the assigned SWIFT BIC code. SWIFT clients
can configure their existing email infrastructure to pass email
messages through the highly secure and reliable SWIFTNet network
instead of the open Internet. SWIFTNet Mail is intended for the
secure transfer of sensitive business documents, such as invoices,
contracts and signatories, and is designed to replace existing telex
and courier services, as well as the transmission of security-
sensitive data over the open Internet.
SWIFT code
Outward Transfer
Inward Transfer
Procedure of Payment
o Date.
o Sender Country.
When the customer completes the form, the remittance officer asks
for the photocopy of the valid identity card of the receiving person.
If the ID card is not available, the photocopy of the passport is taken
from the customer. The officer then makes the needed entries in the
Western Union software which is installed at FBL. The entries are
made in the software in the form called as “To Receive Money”.
After making the entries, the print out of the form is taken, the
officer signs the western union form. The money transfer form is
kept by the bank for its own record purposes. The customer is given
the “To Receive Money” form and the customer puts his/her
signatures on the form and takes the payment from the counter by
presenting such form and photocopy of ID card.
Duration
The following are the period for which these terms deposits are
issued:
• 1 Month.
• 3 Month.
• 6 Month.
• 1 Year.
• 2 Year.
• 3 Year.
• 4 Year.
• 5 Year.
• 6 Year.
• 7 Year.
• 7 Days Notice.
Profit Rates
• Wrack Rate.
• Grid Rate.
Wrack Rate
Grid Rate
Grid rate is the special rate which is given to the prime customers
and is determined on daily basis. In FBL, the approval is to be taken
from the area manager for providing such rate to the customer.
When the customer comes to the bank for the opening of a new
TDR, then the following procedure is adopted for this purpose:
o Title Account.
After filling the application form, the customer signs the form and
hands it over to the remittance officer. The remittance officer after
scrutiny of the form affixes the following stamps on the form:
• Time Stamp.
The completed form, IOM and the profit rate approval sheet from the
branch manager or area manager is sent to the FBL head office
(Karachi) for the approval of TDR.
Redemption of TDR
On the date of maturity, the customer has the option to re-invest the
amount. There are three options available to the customer:
• Principal Re-investment.
• No Re-investment.
MANAGEMENT STYLE
Management of Faysal Bank is fully responsible for establishing and
maintaining adequate controls and procedures. The bank’s
management fully recognizes this responsibility and appreciates its
value and significance. Accordingly, policies and procedures
encompassing various functional and administrative areas have
been developed and circulated across all pertinent levels of the
organization. These policies and procedures are approved by the
OVERALL SUMMARY
Faysal Bank Limited is a full service banking institution that offers
consumer, corporate and investment banking facilities to its
customers. The bank offers a variety of consumer products such as
auto finance, home loans, saving schemes and debit cards.
The bank also offers specialized products for the agricultural sector.
Its trade finance services include a range of import, export and
guarantee products. The bank also offers services such as cash
management, automated teller machines, traveler’s cheque,
transfer of funds, safe deposit lockers and non stop banking.
They are aware that they have stepped into 21st century and they
must meet its challenges by acquiring the highest level of
TABLE OF CONTENTS
BANKING IN RETROSPECT...................................................................1
MODERN BANKING..............................................................................3
VISION ............................................................................................................. 7
MISSION ........................................................................................................... 8
Group Information..............................................................................................8
Board of Directors...............................................................................................9
Services ........................................................................................................... 27
ORGANIZATIONAL STRUCTURE..........................................................30
Structural dimensions.......................................................................................31
Departments, I served......................................................................38
CLEARING ........................................................................................................ 38
Cheques on Collections.................................................................................50
ACCOUNT OPENING..........................................................................................54
Categories of Accounts..................................................................................60
REMITTANCE DEPARTMENT..............................................................................62
MANAGEMENT STYLE........................................................................79
OVERALL SUMMARY..........................................................................82
TABLE OF CONTENTS........................................................................86