Executive Summary

The banking structure in Pakistan comprises of the following types, State Bank of Pakistan, Commercial Bank of Pakistan; Exchange Banks, Saving banks, Cooperative banks, specialized credit institutions. The state bank of Pakistan is the Central bank of the country and was established on July 01, 1948. The network of bank branches now covers a very large segment of national economy. The State Bank of Pakistan issues the shares of these periodically. Bank employees and other common peoples can also purchase these shares and earn profit.To open an account the customer has to meet the general banking manager with an introducer. The procedure begins with the punching of account opening form to the customer file i.e. customers master file. Before closing any account, bank send letter to the account hold for informing him that his account is going to be closed. There is need an approval form higher authority to close any account. Current deposits are those which are payable to bank whenever demanded by the customer. Bank does not pay any profit on current deposits. The following are the financial products/services of PLS Account, Saving Account, Term deposit and Foreign currency accounts. In remittance department like any other United Bank Ltd also have instruments for transferring of money, Telegraphic Transfer, Mail Transfer. In cash department both deposits and withdrawals go side by side. This department works under the CD In charge and deals with cash deposits and payments. This department maintains the following sheets, books, and ledger of account cash received voucher sheet.Cash paid voucher sheet, Paying-in-slip, Cheque Book, Cash balance book. The clearing in Karachi at UBL or other banks is being done through NIFT (National Institute of Facilitation Technology).Bank provides this facility to the people who need advance money to meet their requirement. Party dealing with other banks financial condition of borrower business and as a first step credit proposal is being made. UBL provides advances, which are two types. 1

Secured Advances, Unsecured Advances. UBL usually classified advances in to following types Commercial Advances, Corporate/SMEs Advances, Agricultural Advances. Commercial Advances are of following types Demand Finance, Cash Finance, Export Refinance Part I (Pre Shipment) & others. Banks Agriculture division deals with the agriculture advances. Bank provides the Agriculture Advances in order to enhance and support the agriculture sector of the country. Farm Credit & Non Farm Credit. In foreign exchange, UBL is dealing Foreign Currency Accounts, Foreign Remittances, and Foreign Bills for Collection, Imports & Exports .Foreign currency accounts & the foreign currency department deals with the following types of accounts, Current account, Saving bank account, Term deposit. Foreign accounts are convertible on floating rate available to the bank. Letter Of Credit facility is being provided by UBL in foreign exchange.

Date Established November 7, 1959 Chairman His Highness Shaikh Nahayan Mabarak Al Nahayan Deputy chairman Sir Mohammed Anwar Pervez OBE President & CEO Mr. Atif R. Bokhari Branches 1039 Domestic, 15 Overseas Branches Joint Venture with NBP United National Bank Limited , U.K Representative Offices Tehran and Cairo Subsidiary United Bank AG Zurich, Switzerland Associated Company Oman United Exchange Company, Muscat Offshore Banking Unit Export Processing Zone, EPZ Branch, Karachi, Pakistan Employees 8,998

Evolution of Banking
It has not so far been decided as to how the word 'Bank' originated. Some authors have the opinion that this word is derived from the words `Bancus' or `Banque', which mean a bench. Other authorities hold the opinion that the word `Bank' is derived from German word `Back', which means `joint stock fund'. It is therefore, not possible to decide as to which of the opinion is correct, for no record is available to ascertain the validity of any of the opinions. Banking in fact is primitive as human society, for ever since man came to realize the importance of money as a medium of exchange; the necessity of a controlling or regulating agency or institution was naturally felt. Perhaps it was the Babylonians who developed banking system as early as 2000 BC. It is evident that the temples of Babylon were used as 'Banks' because of the prevalent respect and confidence in the clergy.

HISTORY OF BANKING IN PAKISTAN

At the time of independence, there were 63I offices of scheduled banks in Pakistan, of which 487 were located in West Pakistan alone. As a new country without resources it was very difficult for Pakistan to run its own banking system immediately. Therefore, one expert committee recommended that the Reserve Bank of India should continue to operate in Pakistan until 30th September1948, so that problems of time and demand ability, coinage currencies, exchange etc. are settled between India and Pakistan. The non-Muslims started transferring their funds and accounts to India. By the end of June 248 the number of officers of scheduled banks in Pakistan declined from 631 to 225. There were 19 foreign banks with the status of small branch offices that were engaged solely in export of crop from Pakistan, while there were only two Pakistani institutions, Habib Bank of Pakistan and the Australian Bank. The customers of the bank are not satisfied with the uncertain condition of banking. Similarly the Reserve Bank of India was not in the favor of Govt. of Pakistan. The Govt. of Pakistan decided to establish a full-fledge central bank. Consequently the Governor-general of Pakistan Quaid-IAzam inaugurated the State Bank of Pakistan on 1st July 1948. Thus a landmark was made in the history of banking when the state bank of Pakistan assumed full control of banking and currency in Pakistan. The banking structure in Pakistan comprises of the following types.

FORMS OF BANKS

FORMS OF BANKS

Central Bank

Scheduled Banks

Commercial Banks

State Bank of Pakistan Commercial Bank of Pakistan Saving banks. Cooperative banks Specialized credit institutions.

Non-Scheduled Banks

COMMERCIAL BANKS: Commercial banks have been the most effective mobilizers of savings and have been providing short-term requirements of working capitals to trade, commerce and industry. Up to 31'` December 1973, there were 14 Pakistan cemmercial banks that were performing their functions all over the country and in some foreign countries through a network of branches, the name of these were: National Bank of Pakistan Habib Bank Limited Habib Bank (Overseas) Limited United Bank Limited Muslim Commercial Bank Limited Commerce Bank Limited 6

Australia Bank Limited Standard Bank Limited Bank of Bahawalpur Limited Premier Bank Limited Pak Bank Limited Lahore Commercial Bank Limited Sarhad Bank Limited Punjab Provincial Co-operative Bank Limited All these commercial banks were nationalized in 1 st January 1974, and were recognized and merged into the following five banks: National Bank of Pakistan Muslim commercial bank limited Habib Bank Limited United Bank Limited Allied Bank of Pakistan The state bank of Pakistan is the Central bank of the country and was established on 1'` July 1948. The separation of East Pakistan and its repercussion in the form of economic depression has caused a lot of difficulties to the banking system in Pakistan. The network of bank branches now covers a very large segment of national economy. The numbers of branches have increased appreciably and there is now one branch of bank for every 3000 heads of population approximately. There is done reasonable growth in deposits from the establishment of Pakistan. Besides this growth, specialized credit and financial institutions have also developed over the years. The Government of Pakistan in the late 90's introducing the need for the privatization of state owned banks and companies. The private sector has accepted the challenge and most of the banks are privatized today. The State Bank of Pakistan issues the shares of these periodically. Bank employees and other common the people can also purchase these shares and earn profit. Through out the period of banking history the banks have been expanding rapidly and achieved the desired goal of progress.

Introduction of United Bank Ltd.

HISTORY
The decision to establish UBL was taken in June 1959 and the company was registered on July 24, 1959. It was on November 7th that United Bank Limited appeared on the banking horizon in Pakistan and started operations with its first branch namely Mcleod Road now I.I Chundigar Road at Karachi. On 9th November 1959 the Gazette of Pakistan notified and included United Bank Limited in its list of scheduled banks operating in Pakistan. With its shortest span of time UBL emerged as dynamic and large international organization. In 1969 the Management of Union Bank Limited incorporated in former East Pakistan, was handed over to UBL, which was later merged with UBL in early seventies. The Bank continued its operations as private banking company until 31st December 1973 when it was nationalized along with other banks operating in the country and other two Banks namely Pak Bank of former East Pakistan and Commerce Bank Limited were merged with UBL. A Batik, like the society it serves should be dynamic as banking is about people customers with their needs and opportunities and staff with skills, experience and resources. United Bank Limited has shown dynamism since its inception. There have been many changes in the structure, functions and the services provided. These changes reflect the changing requirements of our developing economy as a whole and those of Industry. Commerce and private Individuals. On October 19th 2002, biggest event occurred in the history of UBL. As UBL was privatized. The government handed over the management of united Bank Limited, the third largest bank of the country, to the successful bidder - Consortium Of Abu Dhabi group (UAE) & Bestway Holding Limited (UK). The sales agreement for the transfer of 5 1% shares was signed by Privatization Minister Altaf M. Saleem and

Bestway Holding, Sheikh Nahayan Mubarak A1 Nahayan at a ceremony. This event was declared as a "New journey For UBL". On May 18th 2004, Atif Bokhari took over the charge as new Chief Executive Officer of United Bank Ltd from Amar Zafar Khan, who served UBL for more than seven years. United Bank officially announced the appointment of Atif Bokhari as its Chief Executive Officer. Bokhari was previously Senior Executive Vice president & Group Head, Corporate and Investment Division of Habib Bank. He was also a member of the HBL management committee. In the view of highly impressive growth and development achieved during its 45 years of experience, UBL has come to be accepted as one of the most progressive and dynamic components of the banking industry in Pakistan.

VISION STATEMENT

To be a world class bank dedicated to excellence, and to surpass the highest expectations of our customers and all other stakeholders.

Mission of United Bank Ltd.

Our mission is to: Set the highest industry standard for quality across all areas of operation, on a sustained basis; Optimize people, processes and technology to deliver the best possible financial solutions to our customers; Become the most sought after investment; Be recognized as the employer of choice

10

STRATEGIC THRUST
Causative factor making UBL's vision to become a world-class bank a reality is the strategic thrust that drives its impetus from People, Premises, Products and Processes. UBL continues its journey towards these four strategic pillars by hiring and developing a world-class team, investing in new premises, launching customer-focused products and through continuous improvements of our processes. FUTURE STRATEGY : UBL expects its strong customer focus to drive the Bank's future business strategy. On the domestic side bank has already launched its consumer banking business. Increased investment is targeted in developing human resources; infrastructure and internal system support the aggressive consumer initiative and explorations of new avenue generation. The first step under this initiative is the launch of the Bank's ATM/Debit Card, branded as UBL Wallet. Furthermore UBL has plans to introduce a full suite of innovative consumer finance products designed to capture a significant share of the local consumer financing market and tap into the current growth in demand of such financing. Personalized Service and Dynamic Approach : In order to meet its goals and capture the market share the Bank employed professional and skillful approach to the management, which took a series of successive measures to educate the people of Pakistan banking and savings minded. Various drives for the mobilization of savings and other accounts were initiated. The knowledge of customer's business market research and business planning, visits to customers at their doorsteps, development of personalized relationship with the business community, fixation of seasonal business targets and follow-ups to achieve these goals attained prominence. Flexibility, delegation of authority to the lowest possible level and encouragement by initiative were the key factors, which helped the bank, to achieve the objectives. 11

CATALYST OF CHANGE : UBL emergence proved catalyst and brought changes in the banking sector as a whole. The Bank-Customer relationship attained a new dimension and courtesy, politeness and efficiency gained fundamental importance. Convenience for the customer remained a core and criterion for this relationship. UBL initiated the scene in the office and the branches redesigned and modernized. UBL Corporate Banking : UBL's mission is to serve all corporate needs of its customers and ensure full satisfaction through the product innovation, personalized banking through Relationship Banking,. Best Customers Service & Key Contacts. UBL Investment Banking : IBG specialized with providing innovative and unique advice to its clients to assist them in meeting challenges in an ever-changing market. A healthy mixture of structuring , advisory and project Finance business deals in either leading or participating in TFCs. UBL Treasury: Responding to customers need and to provide treasury services with the reorganized dealing room. This department is interacting with the market and dealing with Core Treasury Products in the money market and Foreign Exchange. INTERNATIONAL OPERATIONS : After achieving dynamic progress domestically, the Bank took a basic decision to make its presence felt internationally and to cater to the needs of Importers and Exporters as well as its shares in the international market, foreign trade, UBL opened its first branch in 1963 in London UK, the most important center of the international finance and trade.

12

The UK operations of Unite Bank Limited were closed during the year 2002 and along with the branches of National Bank Of Pakistan a new bank namely Pakistan International Bank has been incorporated in UK with 55% share holding of UBL. In Oman the share holding in Commercial Bank of Oman was withdrawn however an exchange company namely Oman United Exchange Company a joint venture was formed in 1983. The bank has also withdrawn its share holding the United Saudi Commercial Bank, Saudi Arabia as well as United Bank Of Lebanon and Pakistan SAL. The UBL global network with its strategically located overseas branches and affiliates, covering almost all major financial markets of the world, is well positioned to act as a correspondent bank for Pakistan and currency transaction. With its strategy to reach its customers in various diversified markets across the globe, UBL is progressing fast in the arena of' cross border ventures with an appetite for commercial and country risks. To meet the required international standards of modern banking United Bank Limited is the first Pakistan bank to shift its international division from Karachi to Dubai. At present UBL and its subsidiaries are: United Bank Limited Pakistan International Bank Oman United Exchange Co. United Bank Ag-Zurich United Assets Management Co. Ltd United Executor & Trustees Co. Ltd United bank Financial Services (pvt) Ltd Ready For 21st Century : - Holding Company - Joint Venture - Joint Venture - Subsidiary - Subsidiary -Subsidiary - Subsidiary

13

United Bank Limited has stepped into the 21 st century with confidence. Now that the bank has been privatized and 51% shares have been purchased by investors i.e. The Best Ways Group UK and Abu Dhabi consortium electing H.H Shaikh Nahyan al Mubarik as Chairman UBL. UBL has geared itself to provide services, which the customers in modern banking expect from the bank. The Bank has also planned to play its dynamic role in the overall development of the country. It is now well equipped with latest technologies and professional experience to face the future with determination and confidence and with its high aims and sense of direction to serve the Nation with zeal and devotion.

14

ORGANIZATIONAL HIRARCHY OF BANK

The Structure of UBL follows the following Hierarchy: Chairman Chief Executive Officer (PRESIDENT) Senior Executive Vice President Executive Vice President Senior Vice President Assistant Vice President Officer Grade I (OG-I) Officer Grade II (OG-II) Officer Grade III (OG-III) Junior Officer

15

The Structure of UBL Main Branch thull hamza

Branch Manager

Credit Department

CSM

Account Opening Department

Computer Department

Clearing Department

Bills and Remittances

Foreign Remittance Department

Finance Department

Cash Department

16

Board of Directors
Name His Highness Shaikh Nahayan Mabarak Al Nahayan Sir Mohammed Anwar Pervez, OBE, HPK Mr. Atif R. Bokhari Mr. Omar Ziad Jaafar Al Askari Mr. Zameer Mohammed Choudrey Dr. Ashfaque Hasan Khan Mr. Muhammad Sami Saeed Mr. Amin Uddin Mr. Aqeel Ahmed Nasir Mr. Aameer Karachiwalla Designation Chairman Deputy Chairman President & CEO Director Director Director Director Director Company Secretary & Chief Legal SEVP/Group Chief Financial Officer

17

Map of Regions

18

PROVINCE WISE REGION ALLOCATION

Province/Area Sindh Do Punjab Do Do Do NWFP Baluchistan Azad Kashmir Domestic Network of Multan Region Multan Region Head Office Multan Bahawalpur Dera Ghazi Khan Rahim Yar Khan Sahiwal Vehari

Region Name Karachi Hyderabad Faisalabad Multan Islamabad Peshawar Quetta MuzafarAbad

225Branches 1 48 38 36 32 38 32

19

Major Operations
ACCOUNT DEPARTMENT
OPENING OF ACCOUNT .
To open an account the customer have to meet the general banking manager with an introducer (the person who is going go introduce that person in the bank) and get an application form used for account opening. Single Account Opening Application Form is available for all types of account. Along with the form a card for specimen signature is also supplied to customer. Manager has every right not to accept this contract if he is not satisfied by the details provided by the customer. In case the contract is acceptable to both, then it is the time to open the account formally.

PROCEDURE
The procedure begins with the punching of account opening form to the customer file i.e. customer's master file. The manager records the necessary details into this register and allots an a/c number from this a/c opening register. This register is maintained for each type of account and the A/c no's allotted serially. After opening a saving and current account every applicant's data is entered into the computer to maintain a safe record and application form is properly filled so that it can be available when necessary. Checking officer is responsible to Tele the manual application form with the computerized a/c opening file. For fixed deposit only that application form is needed this is prepared manually, because most of the procedure of fixed deposit is done manually. The signature specimen card contains three signatures of an applicant, applicant a/c no, a/c type, branch code, title of a/c, it will be attached with an application form. Banker uses this card at 20

the time when he receives the cherub; he compares customer's signature with the signature on the cherub for avoiding fraud.

TYPES OF ACCOUNT
Though in theory there many types of accounts but commonly account operators can be classified in one of the following categories. a) Individual b) Joint c) Partnership d) Private Limited e) Public Limited f) Sole Proprietorship g) Minor

a) INDIVIDUAL ACCOUNT :
Only one person can operate this a/c. An individual who can fulfill the requirement of bank can open this a/c. We can call it a personnel or individual a/c. The requirements for this type are National Identity Card Photocopy, Minimum Deposited Balance, Account Opening Form, Letter of Kinship (Photograph requires only for illiterate people) etc.

b) PARTNERSHIP ACCOUNT :
For partnership a/c, along with the application form other requirements needs satisfied. The requirements for this type are National Identity Card Photocopy, Minimum Deposited Balance, Account Opening Form, Registration certificate, agreement among partners and Commencement of business and private registration, resolution of board of directors, commencement of business, memorandum and articles of association and balance sheet etc.

c) JOINT ACCOUNT:

21

In case of joint a/c applicant mentions that how much person will operate a/c, Instruction are given for joint a/c such that the account shall be operated by anyone or more. The requirements for this type are National Identity Card Photocopy, Minimum Deposited, Balance, Account Opening Form, Letter Kinship, Additional Signature Form (For Joint Account), and Declaration regarding the operator of account.

d) PRIVATE LIMITED ACCOUNT :

Such type of account is opened in the name of the businesses having private limited concern and mostly medium business enterprises open such kind of accounts. All the board of directors have to submit the declaration regarding the account operator on the company pad and with the rubber stamp with the signature of the all the members of the board of directors. In case of any change in director's bank must be informed regarding that. In case funds are borrowed by the company all the directors approval is necessary rather not only the authorized partner who can be the operator of the account.

e) PUBLIC LIMITED ACCOUNT :

Public Limited A/C type of account is opened in the name of the businesses having Public limited concern and mostly medium business enterprises open such kind of accounts. All the board of directors have to submit the declaration regarding the account operator on the company pad and with the rubber stamp with the signature of the all the members of the board of directors. In case of any change in director's bank must be informed regarding that.

f) SOLE PROPRIETORSHIP ACCOUNT :

Sole proprietorship account is an account that is opened in the name of the company that is owned by a single person and only that owner is allowed to have transaction with the bank in terms of withdrawals.

g) MINOR ACCOUNT:
22

In Pakistan Minor person is one having age less than 18 years and that person is not feasible to have an individual account with the bank. For that particular reason account of minor person can be opened with some mature person it is a sort of account opened for a child by his/her guardian. Until the age of 18 of minor his/her guardian will be allowed to withdrawal transaction with the bank and his signature will be verified for payment not of the minor.

CASH DEPARTMENT
In cash department both deposits and withdrawals go side by side. This department works under the accounts department and deals with cash deposits and payments. This department maintains the following sheets, books, ledger of account: Cash received voucher sheet. Cash paid voucher sheet. Paying-in-slip Cheque Book Cash balance book

Cash department is performing its job completely through computers. The following staff member is performing their duties with patience and hard work. Cash Payment: The instrument that can be used to withdraw an amount from an account is the Cheque book. Cheques can be of two types: Open Cheques: They are payable in cash at the counters of the bankers in accordance with the practice of the bankers. Crossed Cheques: They are not payable in cash at the counter of the banker, but can be collected by only the banker who would credit the proceeds to his customer's account after realization.

23

While making the payment of cheque, special attention must be given to the following important points. Drawer's signature have been duty verified from the relative SS card after affixing the rubber stamp of "signature verified" and putting the initials by the verifying officer. Dates of Cheque have been checked. Two signature of the recipient of cash on the reverse of the cheque have been duly obtained Amounts in words and figure should be checked and it should be confirmed that there isn't any discrepancy in the amount written in figures and words. The Cheques should not be stated as post dated. If in the Cheque there may discrepancy regarding any of the aspects described above the Cheque is returned to the customer for rectification. On other hand if the Cheque is valid in all respects, the cashier enters the necessary inputs in the computer and posts the entry so that account balance is updated. When manger posts these entries, computer automatically display the balance before posting the transaction amount, balance after posting. The cashier easily and quickly see whether the amount being withdrawn so exceed the balance or within the balance. Cash Receipt : For depositing the cash into customer's accounts, there is need to fill in the paying-in-slip giving the related details of the transaction. This paying-in-slip contains the date, A/c/no, A/c title, particulars, amount being deposited and details of the cash. There are two portion of the paying-in-slip. The depositor signs the one part of the paying-in-slip one is retained by the bank to show an acceptance of the entries made in the slip. The paying-inslip serves as a voucher to update to computerized transaction ledger. The transaction ledger is only updated by paying-in-slip and Cheque. The cashier responsible to receive both the paying-in-slip and cash from the depositor. The cashier check the necessary details provided by the paying-in-slip and accounts the cash and tallies with the amount declared in the slip. If the amount does not tally with the cash given, the deposit is not entertained until the customer removes the discrepancy. On the other hand if the two amounts tally, the cashier fills in the "Cash voucher received 24

Record Sheet" and assigns a voucher no. to both the transaction being made in the sheet and the slip. This voucher no. starts with one and continue by serial increments of one for each day till the closing of the sheet, the cashier fills the voucher no, an account, cash day till the closing of the sheet. The cashier fills in the voucher no, an account of, cash entry in the related type of A/c and he posts his initials on both part of the voucher. Then the cashier send both to the accountant who verifies all the entries in the two documents, if the entries in the two documents, if the entries in the two documents tally with one another, the manger authenticates the two by singing on the two documents and posting stamps on the slip. One part of the slip is then returned to the customer and other is given to the computer operator. A very important check is that the dates mentioned into the two documents must be the same. Then cashier posts the transaction entries in computer ledger. This ledger contains the A/c no, A/c title, voucher no, voucher date, transaction code, transaction amount. After posting these entries, computer display before posting balance and after posting. On every transaction computer generates an output of transaction ledger. He assigns the stamp "POSTED" on the voucher to show voucher transaction entries are posted. Checking officer receives this voucher and the compute output transaction ledge, he manually inspects the entries of ledger and voucher. If both are tallied, he then signs the ledger and put a mark of cancellation on the voucher. After the verifications from the checking officer, manger receives the voucher. CASH BOOK BALANCE: At the end of the working day cashier is responsible to maintain the cash balance book. The cash book contain the date, opening balance, detail of cash payment and received in figures, closing balance, denomination of government notes (Currency). It is checked by manager. The consolidated figure of receipt and payment of cash is entered in the cash book and the closing balance of cash is drawn from that i.e. Opening Balance of Cash + Receipts - Payments = Balance 25

The closing balance of today will be the opening balance of tomorrow. This department is one of the most important departments of the bank. Manager checks all the books maintained in this department.

DEPOSIT DEPARTMENT :
Bank deals in money and they are merely mobilizing funds within the economy. They borrow from one person and lend to another, the difference between the rates borrowed and lend from their spread or gross profit. These deposits are liability of the bank so from the viewpoint of bank we can refer to them as liabilities. This department maintains all formalities of the accounts and account holders like it account name, account holder's name, code number and full address. TYPES OF DEPOSITS : Different types of deposits that are treated in UBL are described as follows: CURRENT ACCOUNT: In this type of accounts, the client is allowed to deposit or withdraw money as and when he likes, but there is requirement of maintaining the minimum balance of Rs.10, 000/- other wise Rs.50/- will be deducted every month. Usually the businessmen open this type of account and the bank pays no profit on it. These types of deposits are also exempt from compulsory deduction of Zakat. PLS SAVING BANK ACCOUNT : This type of account is for those persons who want to make small savings. This type of account is opened with a minimum deposit if Rs.200/- If the balance in the account falls below the minimum requirement then a flat charge of Rs.150/- is made in the account once in a half year. Zakat is deducted @ 2.5% on 1 st of Ramzan each year on the minimum balance declared by the central Zakat 26

committee. Tax is deducted @ 10 % on profit paid to the depositor irrespective of the amount of profit. FIXED DEPOSITS : In this type of account a certain amount is deposited for a certain period such as six months, one year, two year or longer. A fixed deposit receipt is issued in the name of the depositor. The receipt is signed by the officer in charge and the bank manager. A notice is given to the depositor on a prescribed from two weeks before the Fixed Deposit Receipt (FDR) falls due, requesting the depositor to withdraw his money or to renew his deposits. The interest is allowed on fixed deposit varies with the period for which the deposit is made. SHORT NOTICE TERM DEPOSIT : This kind of deposit is for a short period as the name indicates. The depositor may withdraw his deposit at any time by giving seven days notice to the banker. This type of deposit facilitates the trader to withdraw his amount with interest of the deposited period. CALL DEPOSIT : Call Deposits are the sorts of deposits, which are deposited with the banker against any tender. This is with out interest deposit, this may be with interest provided with the depositor has agreed to keep this amount with the banker for some fixed period. FOREIGN CURRENCY ACCOUNT : All persons, firms and companies of local or foreign origin, whether resident or non resident, can open foreign currency accounts all foreign currency accounts are interest based and are not PLS based. Accounts may be opened in US Dollars, pound Sterling, deutsche marks, and EURO. Deposits in FC Accounts may be made in the form of cash, traveler's cheque, Bank or any other agency cannot enquire or raise any question about the sources 27

of funds, deposited in foreign current Accounts by the customer. Any amount at any time can be withdraw form these accounts. There is no limit for CASH withdrawls.

REMITTANCES DEPARTMENT :
BANK DEMAND DRAFTS (DD): A bank draft is an order instrument issued for the payment of certain sum of money to or to order of certain person and drawn on one office of the bank by another office usually. There are 3 parties to the draft. Drawer Drawee Payee Issuing Bank The bank on which the draft is drawn. The named person to whom the payment is to be made. He

may be an endorsee if the draft has been endorsed properly. Where request is received by the banker to issue a bank draft, it is written request on specifies DD application form. While issuing a draft it is necessary that the draft should be free from alternation. All the details must be written neatly and clearly in ink. In UBL demand drafts are categorized into two forms one is for the amount of Rs.5000 or below and the second is for the amount greater than 5000. As an additional precaution the draft should be protect graphed across the face of the same. In case the protect graph is not available a sum slightly in excess of the amount payable must be written in red ink preceded by the words "Under" or " Not over". It is known as " Protective Crossing" or security notation.

28

After the issuance of a bank draft, it is handed over to the applicant and its advice containing the particulars of the draft is sent to Drawee branch for their necessary information and payment of the draft on its presentation. It is not necessary to be an account holder of payee in Drawee branch. But if DD is crossed then payee must be the account holder of Drawee branch. Payment of Demand Draft: The payment of demand daft may be executed in two possible ways. On receiving the dd credit advice (IBCA) at the drawee branch. Payment before the IBCA is received (EX-advice). The original DD is to be retained by Drawee branch in each of the above mentioned cases and serves the purpose of the debit voucher. A record of the situation pertaining to the payment or otherwise of a particular DD is maintained in the DD payable register at the Drawee branch. 1. Practical procedure regarding the payment of DD in United Bank limited is summarized. The branch which issue DD is called originating branch. After issuance of DD, it passes following entry: Dr. - Cash Cr. - HO A/c 2. All drafts drawn on the branch are routed through the general ledger account "Draft Payable" of the bills payable account. The Drawee branch on receipt of the advice credits this account. Following entry is passes after receiving advice. Dr. - HO A/c Cr. - DD Payable 3. Drafts are to be retained as debit voucher to the relative account when a draft has been paid. Following entry is passes after payment. 29

Dr. - DD Payable Cr. - Payee account on Cash 4. In DD is presented In other bank, then it comes to Drawee branch through clearing and following entry is passed: Dr. - DD Payable Cr. - HO A/C 5. Signatures are always verified on all drafts drawn on a branch. 6. Normally, payment of a draft should be made after receipt of a corresponding advice. In case the advice has not been received. Payment should be executed through the approval of the manager at the Drawee branch who should satisfy himself with the authenticity of the draft in term of signatures and otherwise. The draft paid ex-advice should also be debited to the demand draft payable account. 7. On the receipt of advice from the drawer branch, signature should be verified and test verified if the amount of draft exceeds Rs. 5,000/8. The particulars of draft should be entered in DD payable register. The draft when paid should be marked in the DD payable register. Mail Transfer : Sometime a constituent of the bank wants to transfer funds from one account to another, or a non-constituent wishes at remit funds in a particular account maintained at some place with a branch of the bank or when the accounts are transferred from one branch to other, such amount/balances are remitted by means of mail transfer. The procedure for issuance of a mail transfer is the same as discussed for the draft except that the applicant is provided with the memorandum for money received from him for issuance of a mail transfer on the particular branch of the bank. Mail transfer advice is sent to the paying branch where it is treated as a credit voucher because money only transfers in the account of payee in paying branch. 30

Documentation: Issuing Branch Name & Code Beneficiary Branch Name & Code Number of MT Amount in words & Figure Commission charged

Telegraphic Transfer (TT): Generally mail transfer advice reaches the Drawee branch next day when courier arrangements exist. However when it is sent through post offices it usually take 2 to 3 days to reach its destination. But sometimes an individual whether customer or no, demand that this funds should be transferred from one place to another through the quickest means. In such cases transfer of funds message is passed on though a telegram, ordinary or express, to the Drawee branch of the bank. A tested message is sent to the drawee branch followed by the confirmation copy. In case the payee immediately requires the payment, the tested message is given on the telephone. For telegraphic message, bank charges one additional expense of Rs. 100/from the customer. Documentation Issuing Branch Name & Code Beneficiary Branch Name & Code No. Of TT Amount in words & Figure Commission

Pay Order:

31

A Banker's pay order or branch Cheque is an instrument drawn by a banker on himself. Implicit in a payment order is an undertaking on the part of banker to pay, certain sum of money on the presentation of the instrument. The payment orders are generally issued for anyone of the following practical purposes. To facilitates all locally payable expenses on account of a bank for the reason that such payments are not executed through Cheques. For all local payments under instructions of customers for sundry purposes like payment of insurance premium, payments to third parties, club bills, rent and taxes etc. Issuance: For the issuance of the payment order, the purchaser giving his name and address thereof will tender an application on bank's standard form. In the case of request from the bank customer for the issuance of payment order, a letter in this respect will be obtained giving full particulars of the payee authorizing the bank to debit the account. The cost of the payment order along with an amount of Rs.50/- as commission plus excise duty will be paid on the counter. In case of letter of authority, the total amount i.e. payment order amount, commission, excise duty and postage, if any, will be debited to the customer's account as per bank instructions and contra credit will be passed to bills payable / payments orders account, commission, excise duty and postage account. The transfer voucher as above shall be processed through bank transfer book. The manager/second officer shall sign the application form for the issuance of payment Order. The cash receipt voucher or transfer credit voucher duly passed by the authorized officials containing bank transfer stamp and its running serial number shall be 32

appended with the next payment order serial number under the authentication of the authorized official. The particulars of payment order shall be inserted on the blank payment order leaf either through a trying machine or shall be neatly hand written using indelible ink. Subsequently, the particulars of the each payment order shall be recorded in payment order issued register. The payment order shall be signed by two authorized officers of the bank simultaneously authenticating entry and verify the following. Name, code and address of issuing branch. Name of payee. Amount in words and figures. Date of issue. Nature of crossing if desired by purchaser.

Payment : Payment shall be duly identified by the bank customer or by manager/second officer in case the payment order is presented for cash payment on the counter or the payee shall be requested to present it for payment either through clearing or some account according to the type of crossing it contains and it will be ensured that the payment order is properly receipt on it reverse on appropriated value or revenue stamps which will serve as endorsement also. The payment orders will be entered in payment order issued register after marking the date of issue against the date of payment and date of payment against the date of issue in the contra columns under authentication. The payment as given above will be adopted in case of all payment orders received for payment either through clearing or bank transfers except that usual precaution shall be observed to ensure that the bank stands discharged from the payment in due course. Uni-Remote: Uni-remote is another application which has two main points: 33

o funds transfer o funds debit Funds transfer: Funds transfer from one (UBL) branch to another online branch. This helps us to transfer funds from one location to another in some seconds. It has no limit we transfer required money from one (UBL) branch to another online (UBL) branch. Because in which there are no chances of lose or fraud. Funds debit Funds debit is another feature of uni remote. In which we debit Funds as an employee need. But it has some limit. Only one million rupees allowed to debit. So for a big amount of currency debit chances of farad may be occurs. In this way following security will be remaining from employee Point of view. Only those persons which has there own account can fund debit. Signature verification is necessary. Branch conformation is also necessary.

So this is the simple over view of (UBL) uni-romote application. So this is also free application for customers.

ACCOUNTS DEPARTMENT :
Accounts department handles all the activity that is happening inside the branch. They have to keep view of all the transactions and have to determine that in the transaction right sources are used for debits and credits and if they find any discrepancy then they are authorized to make amendments and if the case is serious then branch manager get involve in it. They are responsible for preparing the monthly reports of the branch and have to provide state bank with the report required. 34

They also have to keep into account all the expenditure of the branch like the stationary, pages for print, tea used in the branch, any equipment purchased like printer or mouse etc all the small and big expenditure are kept into account by them. LOCKERS: Lockers are provided just for valuable customers. Customer who has some valuable goods as jewelry, ornaments or other valuable documents, they hire a locker in the branch that is the safer custody. When client want to open the lockers, he has to first open an account in the branch and along with that he has to submit the application for the locker opening. Operation of Lockers: Whenever any one who is locker holder visits the officer first match the signature put down the initial information in the lockers register as time of operating the locker, date, locker number and signature of client as well as the officer. Officer first open the locker with master key and then client operate the locker by using his/her key. Only the key of locker holder can lock the locker. Lockers available at UBL: In every branch of UBL lockers facility to the client to provide them secure place for the precious goods as jewelry or any other things as a safe custody. Bank gets a specific fee for the lockers annually for different types of lockers. Lockers are of three types as gives below Lockers Size Small Size Lockers Medium Size Locker Large Size Locker Fees Rs.1000/Rs.1500/Rs.2000/Security Rs.2000/Rs.2500/Rs.3000/35

Extra Large Locker

Rs.3000/-

Rs.4000/-

A refunds security is also taken from the customers at the time of issuing of lockers. A locker fee is recovered in advance when the year is completed bank fee is charged next year when the client comes to operate. In case, if the client do not pay the fee the will inform him for the payment of annual fee but if the fee is not paid; bank can call their lockers and took action for law suits. For each locker holder the bank requires another person for operation of locker in case of death or any other accident that person can operate the locker. For availing the locker facility client has to open the personal account in bank. To get the locker facility clients has to fill a form that is application format that contains all rules and regulations regarding to obtain a locker specimen signatures card is also signed by both the persons and terms and conditions are also negotiated with the client have some extra instruction for operation the locker. He can tell the bank and can get that facility. Bank assigns a password to every client for secrecy. Locker number and key number are not the same for safety purpose.

ADVANCES DEPARTMENT :
It is major part of the branch. Bank provides this facility to the people who need advance money to meet their requirements. The function of Advances and Credit Department is to lend money in the form of clean advances, against the promissory note, as well as secured advances against tangible and marketable securities. For getting the advances, the first step is the preparation of credit proposal. Some principles of lending are considered whenever financing is made. These principles are: Character Capacity Collateral 36

Capital Condition

Nature of Products: Running Finance: The lending product which was called overdraft before Islamisation of Banking system in Pakistan has been named Running Finance in the post-Islamisation era. This is temporary facility when drawing is allowed in excess of the credit balance in account. Cash Finance: It is the Islamic name of what previously was called Cash Credit. This facility is usually extended against pledge or hypothecation of goods, produce, or merchandise. Markup is payable on the amount actually utilized by the customer. The drawing power changes too frequently as the movement of the pledge goods from and into the godown is the normal trade activity. Demand Finance: It is the name of what was previously called Demand loan or Fixed Loan. It is the credit facility for a fixed amount for a fixed specified period. Usually the period is one year and if the extension is desired, the limit is renowned on yearly basis. Repayment is made in periodical installments. The sum of money once credited in the loan cannot be withdrawn as the limit is automatically reduced with each deposit made into the account by amount of the deposit.

Bills Purchase Facility: Bills are purchased or discounted by the way of making advance against cheques, bills of exchange etc. received for collection. These are called clean bills. When financial documents are accompanied by documents of title to goods,

37

such as, bill of lading railway receipt, carrier's receipt, or airway bill, these are called documentary bills. The discounting bills may be either inland or foreign. Bridge Finance: Public limited companies need temporary accommodation to bridge up their financial stringency during the time lag between their incorporation and subscription of share capital by general public. This accommodation is called bridge finance. It is secured by the mortgage of company's assets and is payable as soon as the share capital is paid up. Consortium Finance: Where funding of huge amount is required to finance a massive project for a considerable long period, one single bank does not prefer to take the entire risk alone. In this situation two or more banks join hands and form themselves into a consortium for financing the project jointly, sharing risk proportion to the funds provided by them. In consortium financing, pari passu charges on the securities are created in the favor of the, members of the consortium. These are long-term loans for huge amount.

SECURITIES
1. BANKERS' LIEN: (Moveable property possessed to the lender cannot be sold in case of default) Lien is the bankers' right to hold the property until the claim on the property is paid. The bankers look at their lien as a protection against loss on loan or overdraft or any other credit facility. In ordinary lien, the borrower remains the owner of the property, but the actual or constructive possession remains with the creditors, though he has no right to sell it. 2. GUARANTEES: When an application for an advance can offer any tangible security, the banker may rely on personal guarantees to protect himself against loss on advances or overdraft to the applicant. 38

3. MORTGAGE: (Immoveable property possessed to the lender can be sold in case of default) A mortgage is the transfer of an interest in specific immoveable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, and existing of future debt, or the performance of an engagement, which may rise to a particular liability. The person in whose interest the property is transferred is called mortgagee. 4. HYPOTHICATION: (Immoveable property possessed to the borrower can be sold in case of default) When property in the shape of goods is charged as security for a loan from the bank, the ownership and possession is with the borrower, the goods are said to be hypothecated. The essence of hypothecation is that neither the property in goods nor the possession of them passes to the lender, but the security is granted by means of letter of hypothecation, which usually provides for a banker's charge on the hypothecated goods. 5. PLEDGE: (Moveable property possessed to the lender can be sold in case of default) In a pledge, the ownership remains with pledger (borrower), but the pledgee has the possession of property until the advance is repaid in full. While in case of defaulter, the pledger has the right of sale after giving due notice.

BASIC TENETS OF LENDING

While there is no single right answer to a lending proposal, a banker needs to sure that he has not overlooked any of the relevant facts before reaching a conclusion. SEVEN STEP SCALE (SSS): A seven step scale as under tends to cover all the basic tenets of lending. Certain writers on banking, for brevity, for sake, have reduced this scale to 3-word 39

phenomenon, namely, Safety, Liquidity and Profitability. All lending proposals irrespective of their nature and size should be evaluated against this scale to ensure that all the relevant aspects have been covered. 1. Borrower: The first consideration in lending proposition must be borrower himself. The various aspects of an indenting borrower, which need to be looked into, are as under. Connections: Connections of an intending borrower, which maybe useful for the bank over a period of time---such as treasure of a project maintaining huge funds with the bank--- may be given due weigh. However, this should not be an excuse for bad lending. It may at times be preferable to lose a connection rather to lend where repayment is doubtful. Length of Association: This means the length of time banker has known the borrower. Longer the association, better are the chances of having meaningful insight into the affairs of borrower. On the contrary, a newly introduced client hardly merits any accommodation.

Credit Worthiness: The expression means and includes the integrity --- an evidence of effective willingness to repay promptly---, and repaying capacity of the borrower. Integrity: Whether facilities have been repaid without problem in the past and whether the borrower general reputation is good are the two questions to be answered. If any 40

doubt exists in the mind of the banker concerning the integrity of the intending borrower, obviously he would not lend. Repaying Capacity: Stake of the Sponsors: The term refers to the net assets of the borrower. This may be appropriately called worth. It is obviously confirming to know that sufficient monetary reserves or assets are owned by the borrower to repay the advance if the repayment cannot be made from the originally agreed source. Repaying capacity of the borrower is also linked with the debt-equity ratio in the project. The fixed debt equity ratio falls short to take care of the future cash flow hazards. For example when projects do not generate enough cash for the number of years resulting in non-servicing of the debts, equity at the fixed ratio keeps the borrower comfortable at the cost of the creditor. In case of cost overrun also if the banks do not obtain from the sponsors their share of the cost escalation, the so-called ratio dogma is frustrated, and defacto risks of the owner borrower in highly leveraged projects is considerably reduced. The stake of the sponsors is further reduced to the extent the equity is offered to and subscribed by the general public. AGE: To lend for 20 years to a person of 70 may not be a proposal worth considering. Again special conditions apply when lending is to a minor. Similarly in the case of a business concern, it is of significant value to know for how long it has been trading. Experience: Risk Managing Capability: An individual setting up is business for the first time will be received with caution, whereas management of a company, which has been successfully trading for many years, will be duly regarded.

41

Virtually all decisions are made in the atmosphere of uncertainty. Hence there is some risk inherent in each decision. However, the degree of uncertainty will vary from situation to situation and with it the degree of risk. Thus the capability of management to manage risk plays a very significant role in making any business venture a success. The evaluation of the risk-managing capability of the management is, therefore, the most important aspect of the project evaluation. 2. PURPOSE OF THE ADVANCE: The purpose of the advance must be legitimate and consistent with the bank's policy. Generally bankers do not wish to be involved in risky or speculative ventures.Advances may also be distinguished as those for the purchase of an asset those for the replacement of a liability. 3. Amount: The amount requested must bear a reasonable relationship to the customer's own resources, and must be sufficient to achieve the purpose, or the bank will be faced with the necessity of additional lending to safeguard the outstanding advance. Likewise, the amount asked for may not be in excess of what is genuinely required to achieve the purpose. 4. Security: A security that bears the following characteristics is considered good. It should be: easy to value, easy for the bank to obtain the title; easy to control; easy to realize; and stable in value. Moreover it should provide a good margin over the amount lent. Nevertheless security is one of the last considerations in any proposition, and no lending should be made purely because good security is offered. The proposition should stand on its own with the security providing a cushion should things go wrong. 5. Terms of Advance: 42

The longer the term of advance the more risky it becomes as the future s more uncertain. Long-term advances therefore need security sufficient to cover the risk. The term helps also to determine the nature of advance. Running finance is usually repayable in less than one-year time. Conversely demand finance will be usually granted for longer period of time. The term of advance must not in any case exceed the life of the asset being purchased. 6. Repayment/Liquidity: A realistic repayment program which is commensurate with the term of advance, the liquidity position of the borrower manifested by the proper cash budget, and the revenue generating capacity of the project as evidenced by the capital budget, should be evaluated and obtained as to its viability. 7. Yield/Return: Bankers expect some rewards for the risk they undertake and the funds they spare. They also need to be remunerated for the work and expenses in taking and administering the security.

USE OF FINANCIAL STATEMENT IN THE SEVEN-STEP SCALE APPROACH

An essential part of the seven-step approach is the examination of the financial statement to analyze past performance of the business, and to compare its present operating results with the overall performance of the industry. These helps banks to assess the experience and skill of the borrower, the appropriateness of the sum requested, whether the business is generating enough profit to cover repayment of the advance and return on it, suitability of the term for advance in the light of the profitability and growth of the business, the 43

availability of assets as security, and the degree of risk involved and the ability of the management to effectively manage that risk. The break-even analysis and the analysis of the financial statements through various ratios help achieve this objective.

ADVANCES DOCUMENTATION : Documents relating to credit can perform two functions: they can be the evidence of underlying credit transaction or they can be the security or support to ensure the full repayment of the debt. In other words, there are some documents that we necessarily should have in order to prove our claims against our clients: they are the evidence that client owes us the money. Instead there are other documents that we choose to take to ensure recovery through a " First or second way out in case that the customer is unable to pay us back. The promissory note is however the best example of a documents taken as evidence of debt. Simply stated, promissory note is written commitment by the borrower to pay bank a sum of money sometime in the future. The mere existence of the promissory note is sufficient evident of the validity of the debt. On the other hand, a bank guarantee or a mortgage on a property or the hypothecation of stock is not the document that proves the validity of the debt itself. We take them only when we feel that we want to protect our exposure by having direct access to some specific assets or to the guarantor in case any thing go wrong with the original credit. Whether they serve as evidence or security, however, credit documents have one thing in common: they embody a legal claim of the bank against the client, against certain assets, or against the guarantor. In other words the protection that we get from our credit documents is based on the law. If the documents do not confirm to the law, we are just not protected. Requirement to be met :

44

In order to be effective not only from the legal point of view but also for our own internal purposes, all credit documents must meet certain key requirements. For Example: Credit documents must be appropriate for the nature of transaction involved. They must be sufficient to provide adequate coverage of the perceived risk. They must be properly executed (filled in) by duly authorized signers. They must be legally valid so that our rights will not be impaired by some formal defects. For collateral security the documents must provide for fairly straightforward access to the pledged assets. In the case of documents on standard form blanks must be properly filled out. Documents not on standard forms should be either drawn up or reviewed by our attorney. Credit documents must be kept current. Some of them such as time promissory notes and insurance policies have a specific date for expiration or maturity. Responsibility for the Documentation : Regardless of how you look at it, there is no way to escape the fact that the responsibility for having the unimpeachable documentation package falls squarely on the shoulders of the RM. Other departments of the banks or even legal counsel are available to help, but the RM, in the final analysis, is the person who has to be satisfied that the documentation at hands meet all the applicable requirements. To begin with it is RM who based on his analysis of the risks involved, first determines the kind of security documents that will be required to properly protect the bank. The RM is also the one who will physically obtain the documents from the client and who will have to go back to the client if the documents received are defective. The RM will also have to follow up with the clients to replace expiring documents or to obtain those that were properly deferred. The RM is also the one who has to satisfy him that the documents are in order before sending them out for safekeeping to CAD and issuance of DAC.

45

It is likewise the RM who has to review the documentation physically, whenever it is required. There are at least two instances in which these physical review is mandatory: at the time of annual review and when the account is adversely classified. Finally the RM again gets involved when the time comes to return the documents to the client, to make sure that at no time are we exposed to a break in our protection cover. Documents may be surrendered to the clients (a) To replace them with new or updated ones (b) When the credit committee agrees to reduce the security protection (c) when the facilities have been paid out in full. The logic behind making the RM fully responsible for the documentation is quite simple. The RM's involvement in an account does not end when he gets the CP approved: from then he must see to it that the relationship is kept in good shape and free of troubles. We not only make loans, we live with them. In assuming the responsibility for the adequacy of the documentation, the relationship manager is simply observing one of the many "C's" of credit: the control of the relationship. To perform these duties the RM can enlist the help of other units both inside and outside the bank. For example The CAD provides second look at the documents, to make doubly sure that they are indeed complete, in order, and in accordance with the approved requirements. The CAD has the obligation to refuse to issue the DAC (in effect blocking the implication of the approved facility) if the documentation is defective. In addition, the CAD is responsible for getting up a tickler system to remind the RM's of the documents still to be obtained. The CAD also is the focal point to provide the required valuations in accordance with a schedule appropriate to a volatile type of collateral (shares).

The CAD is basically the department who permits the RM to rest on the assurance that the documents he obtained from the client are safely tucked away in the vault and available for his inspection whenever necessary.

46

The CREDIT COMMITTEE is also valuable source of assistance, not only because of their shared experience but also because, in certain cases, the credit committee may step in if it is willing to accept the additional risk entailed by a slightly defective documents rather than going back to the client for correction. Finally, legal counsel should be consulted in any case of doubt. (In some cases, such as term loan agreements or loans to the government, referral to the attorneys is mandatory). By and large, the efficacy of the document is more a legal matter than a banking matter. Request by Client At start when the customer wants to avail the facility of loan/limit from the bank he has to submit the "Request Letter". Submission of the request letter is the first step in the procedure of providing credit facility to the customer. He himself has to visit the bank and submit this request letter to the bank. Amount of request along with relative information about the company as well as the purpose for which the company wants to have the credit facility should be mentioned inside that letter. It is preferable that the letter should be written on the letter pad of the company and should be stamped and duly signed by the owner/chief executive. At the time of request the client (who has come to the bank) is been asked some questions like information about his line of business, about its customers and suppliers, about its sales and growth, about the reason for the loan/limit and certain questions like that by which it is initially determined either to invest in the form of loan/limit in that business. Basic Fact Sheet : The second step that has to be covered is the filling of the form named "Basic Fact Sheet". This is a sheet that is provided by the bank to the client and he has to fill all the blanks properly. By this basic fact sheet UBL gets the information about the client and his business.

47

The information that is collected through the basic fact sheet is explained as follows: Borrower's Profile Detail of Directors/Owners/Partners Management Corporate Status Nature of Business Requested Limits Business Handled/Effected With All the Financial Institutions during the Last Accounting Year Existing Limits and Status Any Write-Off, Rescheduling/Restructuring Availed During the Last Three Years Details of Prime Securities Mortgaged/Pledged Details of Secondary Collateral Mortgaged/Pledged Credit Rating Dividend Declare Share Price of the Borrowing Entity Net worth (Particulars of assets owned in their own name)

Trade Checking : Trade checking is a system at UBL that is implemented to check the credit status of the party in terms that either the party has already sanctioned loan from other banks or not. Incase if they are found as defaulter from any bank or leasing company than their creditworthiness will be checked and securities requirement will be tightened. UBL Cantt Branch normally does trade checking from four banks these are National Bank of Pakistan, The Bank of Punjab, Bank Al-Habib and Bolan Bank. CIB Report: CIB stands for Central Information Bureau. CIB is a department at SBP that has all the information about the loans/limits that has been sanctioned in that region to

48

the parties. A CIB report is requested from the SBP about particular party to check whether they are defaulters or not of any bank or leasing firm. Trade checking and CIB report have same purpose to check the party for default. The question that can be raised here is that if one can get complete information about the party through SBP than why it is necessary to do trade checking? Reason of trade checking is that different banks provide the information of all defaulters to the SBP, in some cases it may happen that the party is going to be defaulted within 2 or 3 months but still information is not with the SBP cause party has not defaulted yet in that case it is good to have trade checking to minimize the risk. Report of Financial Statements For obtaining credit, party has to submit the last two to five years Balance Sheet and Profit & Loss Statement duly attested to authorize auditors. It is preferred that the statements should be properly prepared and audited by chartered accountants that give the true picture of the business. But in some cases as I observed in UBL most of the clients who lie in the category of Consumer Banking Client don't have their financial statements. In such case UBL has to prepare the financial statement on the behalf of customer and it is mentioned in other relative documents that the financials submitted are self/un-audited. There is a high percentage of risk involved in it. Import & Export Data : If the party is also involved in export or import business then the bank also consider the data of three years about imports and exports. Evaluation of Property : Property that is been offered as security in the form of any sort of mortgage is been evaluated by certain authorized company. This evaluation report helps in determining the actual worth of the property and while keeping the margin of about 20% its forced value is checked.

49

"Forced Sale Value" is been referred as the minimum value of a property in any case. This value is calculated by keeping the margin of 20%. Its formula is like this. Forced Sale Value = Actual Value -margin amount Where "actual value" is the net value of the property today whereas margin is the 20% of the actual value and while subtracting this from the actual value gives a Forced Sale Value of the property. Call Report: If the party seems to be good enough with whom the relationship can be developed a Relationship Manger visits the company and view all the working conditions of the company, meet with its management and try to get maximum information about the company from inside and even from the outside of company from its neighbors. A report that is prepare in which all the experience of visit to the company is written. The property that is been provided as security in the form of mortgaged property is also checked for confirmation either that property exist at that particular place or not which was mentioned in the report and either it is been evaluated properly. This property is also checked for pre-mortgage against the loan from any other firm or bank. All this information is written in the report. Visit Report/Visit Certificate : Visit report has the same purpose as that of call report. But the main difference between the call report and visit report/visit certificate is that visit report is just a single statement for the evidence that RM has visited the place of both working and of security whereas call report is a short summary of the visit and all information is described briefly in that report so that CAD make the right decision. Comparative Statement of Financial Condition : This form is in tabular form and as the name indicates it helps in analyzing the financial condition of the firm from all perspectives. In this form bank has to do the RATIO ANALYSIS of the financial statements submitted. 50

All the analysis that is covered by this form is described below: Liquidity Analysis Activity Analysis Profitability Analysis Debt Analysis Vertical and Horizontal Assessment of Profit & Loss Statement Vertical and Horizontal Analysis of Balance Sheet

Management Assessment Form : Management assessment form is a document in which varied skills regarding the management prospective of the party are categorized and these skills in each category are rated with standard rating criteria by RM. RM has to fill this form and it requires a complete background and future prospective growth knowledge about the management. RM has to give marks to each category out of 5. The rating criteria are as follows: Outstanding = 5, Strong = 4, Acceptable = 3, Weak = 2, Very Weak = 1. MANAGEMENT ASSESSMENT FORM Rating Board Of Directors Reputation Involvement with the company Experience/influence Source of representation Management Depth Qualification/Experience Exercise of duties/authority Back-ups/second-level support Continuity Availability of authorized signers Competence/Reputation of Management Capability of administrative, strategic management and planning decision 51 Concise Qualitative Remarks

Industry reputation Management Controls Organizational/holding parent company Financial Cost - evaluation Production Inventory Distribution Collections Level of automation MIS system Risk Management Awareness and identification of key risks Measures implemented to address these risks Financial risk management Summary of Rating Main weakness Main strengths Steps being taken to improve weakness Special Features Preparation of Credit Approval : After having the trade checking from the banks nearby, receiving the CIB report from the SBP, having a keen look at the financial reports and evaluation reports the next step is the preparation of "Credit Approval" which was earlier termed as "Credit Proposal". Credit Approval is a document that is to be prepared either by Relation Manager or the Area Manager. In Regional Headquarter Multan Cantt branch of UBL relationship manager was responsible for the preparation of credit approval. The main purpose of preparing credit approval is that to make the decision about the sanctioning of loan quite easier.

52

Credit approval is a 6-page document at UBL and has a standard format. It covers all the aspects that are of key importance in making a decision about the limit/loan sanction. It is divided into different segments here is a brief summary about the CA.

Borrower and Location : Name of the borrower along with its full address is written in it. Line of Business : Work or business of the borrower is written in it. Legal Structure : It depicts either the business is Sole Proprietorship, partnership, Public Ltd. Company or Private Ltd. Company. Purpose of Credit Approval : Credit approval is prepared at varied time span. Normally it is been categorized into three purposes. Initial Review: At the start when the borrower requests for loan Annual Review: Right after one year again credit approval is prepared for the checking of business condition and the position of loan. Interim Review: If anything happens unusual during the year then this review is undertaken to check the condition either borrower is moving in the right direction and is giving markup or installment on regular basis. Originating Unit : The branch of UBL, where the request for advances was submitted. Facility Type: 53

The type of facility that is been used by the borrower either it is Fun Based like NICF and NIDF or Non-Fund Based like LG and LC. Description of Credit Facilities: Every type of facility is being provided with certain format. Like in the format of Running Finance Facility the accounts that are to be discussed in this format table LINE AMOUNT Rs. In Million EXISTING
PROPO SED

FACILITY FACILI DESCRIPTION OF CREDIT NO. TY FACILITIES TYPE

NET CHANGE +/

NICF

For Running finance in CF Account-CF Purpose: For working capital requirement to finance inventory receivables. A/c No: Markup: Existing: Nil P.A Quarterly Proposed: % P.A Quarterly Cleanup/Adjustment: Annual for 3 days on or before Outstanding: Fresh Account TOTAL

Security : This is the most important section from the point of view of sanctioning loan to the party. All the securities against the loan that are provided by party are discussed in this section. Its standard format is like this in the CA.

54

SECURITY
FACILITY NO. 1 FACILITY DESCRIPTION OF SECUIRTY / SUPPORT HELD TYPE NICF PRIME:

COLLATERAL:

Here Prime securities are those securities that have primary importance and will be sold by the bank first in case of bankruptcy of the business. Collateral securities are of secondary importance and will be kept under consideration after prime ones. As far as documentation is concerned with every sort of facility and against the security there is some particular documentation that has to be performed that gives the true evidence of the transaction and will act as security against the loan availed.

Financials :

This section of the CA contains the financial data about the borrower. This financial data helps the managers of UBL to make the analysis of the company and their creditability to determine either it is applicable to sanction them the facility requested or not. FINANCIALS Sales Net Income Days A/c Receivable FY FY 31.12.2002 FY 31.12.2003

55

Days Inventory Net Operating Cash Generation Tangible Net Worth Working Capital Current Assets Current Liabilities Current Ratio Debit/Equity Ratio This is the sample format of financials used in the credit approval.

Import & Export : Information about export and import is also a part of CA. As the table shows only the trade in terms of rupees is needed to be mentioned in this area. VOULME OF BUSINESS FY FY FY Imports Exports Other (Specify) Deposits

'

Comments/Recommendations : In the section of comments and recommendations the RM and SRM give their comments about the party and recommend either to sanction them facility or not. RECOMMENDED BY: RM NAME & SIGNATURE SRM NAME R. SIGNATURE AREA MANAGER NAME & SIGNATURE

CREDIT COMMITTEE APPROVAL: NAME / TITLE / SIGNAURE NAME / TITLE / SIGNATURE NAME / TITLE / SIGNATURE

56

DAC AUTHORIZED BY REGIONAL CREDIT ADMINISTRATION DEPARTMENT DATE: SIGNATURE

CREDIT APPROVAL REMARKS

UNITED BANK LIMITED DATE BRANCH CREDIT APPROVAL REMARKS CA # REVISION DATE:

1. PURPOSE: Type of facility along with the purpose and amount of facility is determined in it. 2.ACCOUNT STATUS/STRATEGY: The strategy at UBL is to ascertain that funded line approved is utilized properly and at the same time ensure that Bank's collateral position is not compromised. 3.JUSTIFICATION FOR ACCOUNT STRATEGY: Following are the terms to justify the account strategy. Satisfactory financial. Growth potential. Good income /return potential. (A) BUSINESS STRATEGY: Business background of the party is mentioned in it and the products in which they are dealing and their relationship with the suppliers and customers is mentioned. (B) MANAGEMENT STRUCTURE/COMPETENCE: Type of management is determined either it is sole- proprietorship or partnership concern or others and their competency to run the business in mentioned.

57

(C) FINANCIAL ANALYSIS: It is mentioned that all financials submitted meet the requirement of SBP prudential regulations and either they are self/un-audited or audited by authorized accountants. All the ratios that were calculated earlier are analyzed in this portion. 4. TREND: BETTER STABLE WORSE: It is mentioned that either the business is stable enough or not and its Future growth prospect is mentioned. 5. RISKS: All the risks involved in providing the facility and about its recovery are mentioned in this part. Here is an example of few of the risks involved in providing facility. One-man show (In case of sole proprietorship). Fire Stocks become stale/out of date. 6. MITIGANT Mitigates are the solutions to lessen the impact of the risk involved. Here are few in response of the above-mentioned risks. The proprietor is running its business with a team of expertise, who are looking after different aspects of business. Frequency is rotation keeps them away from this risk. Insurance cover with assignment of UBL as loss payee covers this risk. 7. WAYS OUT: Different ways are mentioned to have recovery from the party against the facility allotted. 8. CONCLUSION/RECOMMENDATION : Conclusions are provided either to build long term relationship with the customer or not. 58

Basic Information Report This page is attached withe the CA and covers the varied aspects about the party that has Applied for the credit facility.

BASIC INFORMATION REPORT

BRANCH: DATE: Originating branch name is Date on which the CA is mentioned in it. prepared. NAME: LINE OF BUSINESS: Name of the company is The business in which the mentioned. party is dealing is mentioned. ADDRESS: Address of the company is quoted here. DATE: A/C OPENED Date on which the account was opened in the branch. HOW OBTAINED: Source through which the request has come to central branch. LEGAL STATUS: Structure of management either Sole proprietor or Partnership or Public/private Ltd.

OWNERSHIP

Name of the owner(s) is mentioned in it

MANAGEMENT AND DIRECTORS

DIRECTORS
Name of directors is mentioned.

MANAGEMENT
Top management has depth, skill, vast experience and strong succession. Aggressive and able to anticipate and adapt to change.

HISTORY
Historical background of the company is mentioned. The date of its establishment and the business perspective along with other relative information is a part of this section.

BANKING AND OTHER F.I. 59

NON-FUND SECURITY/ BANK'S NAME FUND BASED MARK-UP BASED SUPPORT OPERATIONS

PRODUCTS Name of the products that they use in their business is mentioned here. FACILITIES Information about their shops, showrooms, warehouses or distribution centers is mentioned in this portion. SUPPLIERS AND TRADE REPUTATION Reputation in the market and relation with the suppliers. Relative information from their suppliers about the settlement of their past obligations. DISTRIBUTION & SELLING TERMS Cash & credit both depending upon the credibility of the buyer. MAJOR INDUSTRY COMPETITORS/INDUSTRY OUTLOOK

NAME

SHARE IN THE MARKET

PERFORMANCE / FINANCIALS

All the competitors in the market and their position or standing among them.

AFFILIATED COMPANIES
Other banks or companies from which they have already taken loan.

NAME

HOW AFFILIATED

SHARE OF PRESENT COMPANY

FACILITIES WITH UBL OTHER BANKS FUNDED NON FUNDED FUNDED NON FUNDED

60

Volume of Business routed through UBL during the last 3 years Average balance Current Account No. Deposit. Import. Export.

Future Business Projection Fairly a stable business segment with good future growth prospects. Customer Revenues (Account Profitability) Previous Year Markup-Fund based Commission LCs/LGs Other income Total CREDIT PROPOSAL IDAC : After obtaining all the information from the client and negotiating the RM will prepare the draft of credit proposal on the standard format and submit the same to the CAD for verification of following. Standard Line Description Listing Of Security or Support Completion of Document Check Off List Completion of Prudential Check Off List Current Year To date Current Year Forecast M M

61

After review the draft proposal will be initiated in the pencil and returned to RM for preparation of final CP/CA. package. The final CP package will be signed by the RM/SRM and forwarded to RCAD for onward circulation to the Credit Committee Members. RCAD will submit the Credit Approval to the available Credit Committee Members within the marketing units, the other Credit Committee member in the CRM and finally the credit committee member/SCO with the credit unit. A total of four credit initials are required. After Approval, RM will be advised along with remarks and additional terms & conditions if any imposed by Credit Committee members. The Documentation Check Off List will be updated in the light of credit committee approval/ comments if there is any change in the security/support documentation. The RM will obtain the required credit documentation from the customer and handover to the documentation incharge in the CAD for review and safekeeping. The RCAD documentation incharge will review the documentation and will advice CAD Head the status. The CAD head will authorize disbursement to the concerned branch. Presently disbursement is authorize through "Sanction Advice" followed by DAC The concerned branch will disburse the credit facilities by obtaining the transaction related documentation if any as mentioned in the documentation check off list. In secured advances, the bank takes any security against the loans while in case of unsecured advance no security is taken by the bank. 1. Direct security : When the borrower himself pledge security to convey to the bank a part of his assets e.g., his heritable property, an insurance policy of his own life, shares of joint stock company in his own name etc. Such as security can be specifically appropriated against the debt to the bank. 62

2. Third Party Security : When the security has been provided by third party, either by way of grantee or pledge, its value does not require to be deducted by the bank in ranking on the borrowers estate. Good Security: A good security has the following merits: Reliability: The bank should be able realize its security quickly and without undue formality. Stability of value: The value should be easily ascertained and there should not be sudden fluctuation in value. Simplicity of value: The security can be completed easily and cheaply.

Promissory Note (IB-12) Promissory Note is perhaps the best example of a documentary taken as evidence of facility provided. It is written communication by the borrower to pay up a sum of money sometime in the future. He agrees that he is bound to pay the money that has been lent to him. Letter of Agreement (IB-6) It is agreement between bank and client, in which the client agrees to pay the amount at "Payback price". Payback Price is the amount containing the Principal amount along with markup charged on that amount. PAY BACK PRICE = PRICIPAL AMOUNT + MARKUP Letter of Equitable Mortgage (IB-24) Equitable mortgage is a sort of mortgage in which certain portion of the property is taken as mortgage by the bank while providing debt facility. So equitable mortgage is a security against the debt provided and the document as evidence 63

that is prepared to show the value of property mortgage along with its complete address is letter of equitable mortgage. Letter of continuity : Statement regarding letter of continuity is given as follows: A promissory note payable on demand which is given to you as security for the payment by us/me to you of any sums now due or which may hereafter be or become the from me to you under the finance agreement(s) entered between ourselves/me and your Bank. The security shall be a continuing security for the payment of any and all amounts due from me/us to you under the said finance agreement(s).

Letter of Hypothecation (IB-25) : Like mortgage hypothecation is also a sort of security in which ownership and possession of the property is left with the borrower and the bank just get the security in the form of this document which is duly signed by the party that bank has right to sale the property in case the party defaults. Thus this letter is also a security document that secures the transaction of lending.

Letter of Pledge (IB-26) :

In pledge the ownership remains with the pledger, but the pledgee has the exclusive possession of the property until the advance is repaid in full, while in case of default the pledgee has the power of sale after giving due notice. So the document that is prepared to show that the property is pledged is termed as letter of pledge. Personal Guarantee : 64

When an applicant for an advance is unable to offer any tangible adequate or personal security the banker may rely on personal guarantees to protect himself against loss on advances or overdraft to the applicant.

Undertaking : Two conditions that are undertaken by the parties are as follows: 1- The duties and or any other levies as declared by Govt. of Pakistan shall exclusively be borne by our company. 2- Our Company shall submit financials conforming to SBP prudential regulations on annual basis

Letter of Authority : It is an authority that is provided by the party to the bank and its statement is as follows: "In the event of my/our failure to pay the mark-up, as aforesaid on the due dates. I/We hereby irrevocable and unconditional authorize you to recover the amount of mark-up and other charges due and payable by me/us under the agreement by debiting the same to me/us. Any amount(s) debited to my/our account as aforesaid shall not be questioned or challenged by me/us, and shall be deemed to discharge to the extent of such deduction, the amount of mark-up and any other charges falling due on the due dates under the agreement referred above." Letter of Disbursement : A request by the client to disburse the amount of finance by crediting the amount to the account of party. Letter of Arrangement : Statement written in the letter of arrangement goes like this: "With reference to the limit allowed to M/S ABC for which we have this day executed promissory note and other necessary documents. We hereby 65

acknowledge you right to cancel the facility at any time with or without intimation to us. In the event of facility being cancelled by you, we undertake to pay you all the money due to aforesaid documents plus service charges or any and all cost, charges, expenses and liquidated damages, if any, payable to or incurred by the bank from us immediately on demand." Agricultural Finance : Agricultural finance is of great importance in Pakistan, as 65% of the population of the country is engaged in the business of agriculture. It is very unfortunate that this profession does not provide much to the farmers and cultivators to meet even their basic necessities of life. The uneconomic holding, primitive method of cultivation, natural calamities such as floods and drought, illiteracy of the cultivators and lack of infrastructure including organized ware-housing have adversely affected the repaying capacity of the agriculturists. Therefore financing of agriculture is much more complex as compared to commercial lending and industrial financing.

Kinds of Loans:
Farmers generally need 3 types of loans: Short Term Loans Medium Term Loans Long Term Loans

Short Term Loans : Short-term loans are normally taken at the most for one crop period, and are fully recoverable from the proceeds of same crop after its harvest. These loans are needed for seeds, pesticides, fertilizers and wages of hired labor, which are meant for input for a particular crop. Medium Term Loans :

66

Medium term loans are usually taken for a maximum period of 3 years, and they are usually taken for the purchase of tractors, tube-wells, agricultural implements, cattle and live-stocks, dairy farming and poultry farming etc. Long Term Loans : Long-term loans are generally taken for the period above three years, and amount is used for buying land, constructing embankment, improvement of land or for arranging damages etc. The only security farmer can offer is the charge on agricultural land and hypothecation of his stocks. Commercial Banks and Agricultural Finance : Commercial banks have all along been playing appreciable and active role in the marketing of agricultural produce. However, they have not been able to provide long term finance to agriculture obviously due to structure of bank funds, lack of acceptable securities and the farmer's proprietary rights over the land. Though the State Bank Of Pakistan has established the Rural Credit Fund which was been utilized for agricultural finance through the agricultural development bank of Pakistan, the commercial banks were quite reluctant to finance agriculture upto the year 1972, when the Banking Reforms Order was promulgated by the Federal Government. Commercial banks have now been expressly asked to finance agriculture; and well-defined scheme have been introduced for implementation, under which the SBP allocates target to be achieved bank-wise during the financial year. Currently target allocation is as under: Target for small agricultural loans up to Rs. 100,000/- in each case provide for production and input purpose. Targets of Farm Credit for development purposes. Targets of Non-Farm Credits for development purposes. The commercial banks have been authorized to obtain the registered mortgage of agricultural land and hypothecation of machinery and equipment as security in all cases except those under "Small Agricultural Loans to Subsistence Holders" up to Rs. 100,000.For this purpose the value of land has been presently fixed at Rs. 400/- per Agriculture 67

Produce Unit (PIU) while bankers are to hold the margin of 20% of the total value. These Produce Index Units are calculated in the agriculture Pass Book issued to the land owners as the Document of Title under the Advances of Agriculture Purpose Ordinance 1973.The salient features of the Agriculture credit scheme of the commercial banks are as under: Short Term Finance up to Rs. 100000/- for seeds, fertilizers, pesticides, water, farm power, hiring of god owns, transport and cost of packing material are provided to farmers holding cultivating land up to Subsistence Level. These loans are provided free of any interest or service charge if repaid in full within two months after the harvesting of crop for which they are granted. Short term finance for poultry and fruit farming and fisheries is provided to the borrower at concessional rate of mark up. The loans are repayable in 18 to 24 months, through installments. The repayment starts after a grace period. Medium term loans for development purposes, including development of water resources, farm power, storage and transportation etc. is provided to the farmers. The loans are to be repaid in five years, with the grace period of 12 months. Medium term non-farm finances for the development of livestock, fisheries and farming are also provided. The loans are to be repaid in seven years with the grace period of 18 months. Long term finance for the development of land, water courses, farm construction. arboriculture, and orchard and storage facilities is provided to the farmers. The loans are to be repaid in seven years in annual installments, with a grace period of 18 months.

Long-term non-farm finance for the development of livestock, poultry farming, forestry and fisheries is also available. The loans to be repaid in seven years in annual installments with grace period of 18 months.

EXPORT-IMPORT PROCEDURE : 1. Seller and Buyer conclude a sales contract, with method of payment usually by letter of credit (documentary credit). 68

2.

Buyer applies to his issuing bank, usually in Buyer's country, for letter of credit in favor of Seller (beneficiary).

3.

Issuing bank requests another bank, usually a correspondent bank in Seller's country, to advice, and usually to confirm, the credit.

4.

Advising bank, usually in Seller's country, forwards letter of credit to Seller informing about the terms and conditions of credit.

5.

If credit terms and conditions conform to sales contract, Seller prepares goods and documentation, and arranges delivery of goods to carrier.

6.

Seller presents documents evidencing the shipment and draft (bill of exchange) to paying, accepting or negotiating bank named in the credit (the advising bank usually), or any bank willing to negotiate under the terms of credit.

7. 8.

Bank examines the documents and draft for compliance with credit terms. If complied with, bank will pay, accept or negotiate. Bank, if other than the issuing bank, sends the documents and draft to the issuing bank.

9.

Bank examines the documents and draft for compliance with credit terms. If complied with, Seller's draft is honored.

10. Documents release to Buyer after payment or on other terms agreed between the bank and Buyer. 11. Buyer surrenders bill of lading to carrier (in case of ocean freight) in exchange for the goods or the delivery order.

International Commercial Terms (INCOTERMS)

The INCOTERMS (International Commercial Terms) is a universally recognized set of definitions of international trade terms, such as FOB, CFR and CIF, developed by the International Chamber of Commerce (ICC) in Paris, France. It defines the trade contract responsibilities and liabilities between buyer and seller. 69

It is invaluable and a cost-saving tool. The exporter and the importer need not undergo a lengthy negotiation about the conditions of each transaction. Once they have agreed on a commercial term like FOB, they can sell and buy at FOB without discussing who will be responsible for the freight, cargo insurance, and other costs and risks.

EXW
Ex Works Ex means from. Works means factory, mill or warehouse, which are the sellers premises. EXW applies to goods available only at the seller's premises. Buyer is responsible for loading the goods on truck or container at the seller's premises, and for the subsequent costs and risks.

FCA
Free Carrier The delivery of goods on truck, rail car or container at the specified point (depot) of departure, which is usually the seller's premises, or a named railroad station or a named cargo terminal or into the custody of the carrier, at seller's expense. The point (depot) at origin may or may not be a customs clearance center. Buyer is responsible for the main carriage/freight, cargo insurance and other costs and risks.

FAS
Free Alongside Ship Goods are placed in the dock shed or at the side of the ship, on the dock or lighter, within reach of its loading equipment so that they can be loaded aboard 70

the ship, at seller's expense. Buyer is responsible for the loading fee, main carriage/freight, cargo insurance, and other costs and risks.

FOB
Free On Board The delivery of goods on board the vessel at the named port of origin (loading), at seller's expense. Buyer is responsible for the main carriage/freight, cargo insurance and other costs and risks.

CFR
Cost and Freight The delivery of goods to the named port of destination (discharge) at the seller's expense. Buyer is responsible for the cargo insurance and other costs and risks. The term CFR was formerly written as C&F. Many importers and exporters worldwide still use the term C&F.

CIF
Cost, Insurance and Freight The cargo insurance and delivery of goods to the named port of destination (discharge) at the seller's expense. Buyer is responsible for the import customs clearance and other costs and risks.

CPT
Carriage Paid To

71

The delivery of goods to the named place of destination (discharge) at seller's expense. Buyer assumes the cargo insurance, import customs clearance, payment of customs duties and taxes, and other costs and risks.

CIP
Carriage and Insurance Paid To The delivery of goods and the cargo insurance to the named place of destination (discharge) at seller's expense. Buyer assumes the import customs clearance, payment of customs duties and taxes, and other costs and risks.

Sight Drafts versus Term Drafts : Sight Draft : The sight draft is most commonly used in international trade. In a sight draft, the payment is on demand or on presentation of the negotiation documents to the paying bank or the importer. In practice, the bank may pay within three (3) working days (not instantly) after the receipt and review of the negotiation documents and if they are in order, that is, the documents comply exactly to the letter of credit (L/C) stipulations.In certain countries where the business relationships between the exporter and the bank is well established, the bank may pay the exporter a few hours after the receipt of the negotiation documents that are in order.In the sample L/C it was stipulated "available by your draft(s) drawn at sight", as such the payment is by sight draft(s). Term Draft : The term draft---time draft or usance draft---is used in a deferred payment arrangement. The payment is on the maturity date determinable in accordance with the stipulations of the letter of credit (L/C). The maturity date can be at a stated period after sight or after date: After sight --

72

after the draft is presented to the drawee for acceptance, for example, "at 90 days sight" and "at 120 days after sight". After date -after a specific date, for example, "at 150 days B/L date" (i.e., the maturity date is 150 days after the date of the bill of lading) and "at 180 days after date" (i.e., the maturity date is 180 days after the date of the draft). Unless the maturity date is tied to a specific date, the importer may refuse to accept the draft until the goods have arrived; such deferred acceptance can extend the maturity date.

IMPORTS
The documents that are provided by importer to its Bank for opening/ issuance of L/C are as follows: L/C Application IB-8 Original Indent/ Pro-forma Invoice Insurance Policy Cover Note With Premium Paid o I-Form Copy of sanction advice/ DAC no.

For the first transaction of received DAC reflecting subsequent charges. Confirmed that original DAC is held by us and all terms and conditions spelled out. Provide detail of limit.

LETTER OF CREDIT : This document is issued by the Buyers Bank which promises to pay the seller the specified amount when the bank has received certain documents stipulated in the letter of credit by the specified time. 73

Irrevocable Letter of Credit : An irrevocable letter of credit cannot be amended or cancelled without the consent of the issuing bank, the confirming bank, if any, and the beneficiary. The payment is guaranteed by the bank if the credit terms and conditions are fully met by the beneficiary. The words "irrevocable documentary credit" or "irrevocable credit" may be indicated in the L/C. Revocable Letter of Credit : A revocable letter of credit can be amended or cancelled by the issuing bank at any time without the consent of the beneficiary, often at the request and on the instructions of the applicant. There is no security of payment in a revocable letter of credit (L/C). The words "this credit is subject to cancellation without notice", "revocable documentary credit" or "revocable credit" usually is indicated in the L/C. Confirmed Irrevocable Letter of Credit : An irrevocable letter of credit (L/C) opened by an issuing bank whose authenticity has been confirmed by the advising bank and where the advising bank has added its confirmation to the credit is known as confirmed irrevocable letter of credit. The words "we confirm the credit and hereby undertake ..." or "we add our confirmation to this credit and hereby undertake ..." normally are included in the L/C. An exporter whose method of payment is a confirmed irrevocable L/C is assured of payment even if the importer or the issuing bank defaults. If the letter of credit is not confirmed the correspondent bank (Seller's Bank) has no obligation to pay the seller when the seller when it receives the documents listed in the letter of credit. Only the issuing bank is responsible. If the seller wishes to be able to collect from the corresponding bank in its own country, it will insist that such a bank confirm the credit. Confirmation is generally done by correspondent bank (exporter's bank). When the seller's bank confirmed the credit, it undertook an obligation to pay seller if all the documents listed in the letter were presented on or before the stipulated date. 74

Letter Of Credit Transaction : When the buyer/importer accepts the terms of sale that provide for confirmed and irrevocable letter of credit, it goes to its bank to arrange for opening the required letter. The buyer will furnish the bank with the information contained in the proforma invoice; specify the documents that the exporter must present to obtain the payment, and set the expiration date of credit.The issuing bank than instructs its corresponding bank in the exporter's country to confirm the letter of credit and inform the seller that it has been established. The seller than prepares the merchandize for shipment and notifies the freight forwarder who books space on the ship, prepares the export documents, and arrange to have the merchandize delivered to the port.

The documents together with the sight or time draft drawn by seller are presented to the US bank which pays the seller and forwards the documents for collection to the issuina bank. To obtain the documents that give title to the shipment, the buyer in Pakistan must either pay the sight draft or accept a time draft. Having done so, the buyer receives the documents, which are given to the customhouse broker. The customhouse broker acts as a buyer's agent in receiving the goods from the steamship line and clearing them through Pakistani Customs.

Letter Of Credit Application (IB-8) : Application and Agreement for Irrevocable Documentary Credit freely negotiated in beneficiary's country. IB-8 letter is provided with other documents to the Bank of importer by the importer. It is termed as Letter Of Credit Application, which contains almost all the important information that the bank requires for preparing letter of credit. Information contained in IB-8 is as follows 75

L/C no. A certain number is been provided to the LC and that number is assigned by the Importer's Bank Date Date on which letter of credit is prepared. Name and full address of opener. Name and full address of the importer is required. This importer is also named as opener because he is requesting for opening LC. Name and full address of beneficiary. Name and full address of the exporter is also written on the IB-8 application. Description of merchandise Description of goods is provided normally on this form else it is been referred from Performa invoice. Price Price of the product is provided in foreign currency or the currency of beneficiary's country. Per unit price as well as total amount of import is also written. Terms of Sale Among the varied terms of sale like CNF, CPT, FOB, CIF,FAS etc a single one is provided on which both the parties have already negotiated.

Mode of transport Mode of transport is described either product should be delivered through air or by sea. Port of exit and entry Name of entry and exit ports are also written on the form. If product is transferred through shipment then the seaport of exporter's country is mentioned that is the exit port and also the importer's country port is mentioned from where they want to receive the delivery. If air transport is used than the name of both country's airport is to be mentioned on the form. 76

Proposed method of shipment Transshipment and part shipment are the two terms normally used in the form that indicate either the product can be transferred through other country like Indian and Israeli vessel. Shipping time Last date for shipment is also been mentioned by the importer on the form. So exporter has to make shipment before this date. Tenor : Tenor indicates the condition that either exporter wants payment on sight or he will provide some time for payment to the importer. Proforma Invoice : Prior to opening a letter of credit, a buyer frequently requests a pro forma invoice. Generally the bank will use it when opening a letter of credit. Pro forma invoice is exporter's formal quotation containing following things.

Description of merchandise o Price Delivery Time Shipping Time Proposed method of shipment Ports of entry and exit Terms of sale Letter Of Credit Letter of credit opens by means of SWIFT SWIFT MSG: MT 700 FIELD 15 (TEST WITH SWIFT CODE 2000) TEST NO: DATED: AMOUNT: FROM: UNILPKKA FOR: NAME OF BENEFICIARY BANK TAG 27 FIELD NAME SEQUENCE OF TOTAL 77

40A 20 31C 31D S1A 50 59 32B 41A 42C 42A 43P 43T 44A 44B 44C 45A 46A 47A 71B 48 49 78 53A 57A 72

FORM OF DOCUMENTARY CREDIT DOCUMENTARY CREDIT NUMBER DATE OF ISSUE DATE & PLACE OF EXPIRY APPLICANT BANK APPLICANT BENEFICIARY CCY. CODE AMOUNT AVAILABLE WITH .... BY...... DRAFTS AT DRAWEE PARTIAL SHIPMENT TRANSHIPMENT LOADING ON BOARD/DISPATCH/TAKING INCHARGE FOR TRANSPORTATION TO LATEST DATE OF SHIPMENT DESCRIPTION OF GOODS DOCUMENTS REQUIRED ADDITIONAL CONDITIONS CHARGES PERIOD OF PRESENTATION CONFIRMATION INSTRUCTION INSTRUCTIONS TO THE PAYING/ ACCEPTING/NEGOTIATING BANK REIMBURSING BANK ADVISED THROUGH BANK SENDER TO RECEIVER INFORMATION 78

Vouchers prepared at the time of preparing LC.

Contra Voucher: Customers Liability LC cash Debit Bankers Liability LC cash Credit

Narration: To amount of LC no._________________Dated___________for USD__________on behalf of M/S______________. Where LC no. is the number that is assigned by the opener's bank to the LC. Dated indicates the date on which LC was opened USD is the abbreviation of US dollar in case if the currency is in dollar otherwise the currency amount of beneficiary's country is used

PLS Income Account Commission On LC :

Credit By amount of commission on LC no.______________________ Dated____________ for USD___________ on behalf of M/S___________ received. 79

Income Account Foreign Courier: Credit By amount of swift charges on LC no._____ _______________Dated_________ for USD___________________on behalf of M/S______________

Party Debit Voucher: Debit M/S___________________ To the amount of LC opening charges as per detailed debited for opening LC no.______ dated____________________for USD_____________ Inward Foreign Documentary Bills Sent for Collection (IFDBC) : In case of IFDBC the documents are sent for collection to the importers bank by the exporter bank. Exporter bank will do OFDBC against those documents as it is sending the documents for the collection of money by the importers bank. Importers bank when receives those documents along with the commercial invoice that shows the position of payment will do the IFDBC vouchering. 1. Contra Voucher: First of all the liability that was created against the importer will be reversed on contra voucher with the same rounded figure noted in liability register ledger. Debit: Bankers Liability LC Cash Credit: Customers Liability LC Cash 2. PLS Income Account Exchange & Commission Narration: By amount of service charges on account of LC no.__________________dated_________for USD_________________on behalf of M/S________________ 80

3. PLS Income Account Commission On Foreign Bill Narration: By Amount of commission charged on LC no._________________Dated___________for USD__________________On Behalf of M/S_________________received. 4. Income Account Fax/SWIFT charges By Amount of TELEX charges on LC no.______________Dated_________________for USD_________________On Behalf of M/S__________________received. 5. FETCA: The amount is credited to the corresponding bank or the bank that has sent the documents on collection basis. Amount credited is mentioned in the covering letter. 6. Party Debit Voucher: All the credit vouchers are added and is debited to the concerned party's account. 7. Sundry Deposit Account : Amount left over in excess in sundry deposit account after charging all the Taxes and amount debited in foreign bank is credited to the party's account.

Payment against Documents : In case the exporter's bank has paid the amount to the exporter on the negotiation of the bank that bank will FDBP and will send those documents for the receipt of payment for the trading happened between two parties. When the importer bank receives the documents he will make the PAD means the vouchers passed will be of PAD. The documents will remain with the bank and will not be provided to the importer unless he makes his payment that was due on him.At the time of lodgment 81

means at the time when the documents are received by the importer's bank, entry passed is as follows Debit: NIPAD Credit: HO Debit Voucher passed is of Non Interest Payment Against Documents and is narrated as "To LC no.________ dated_________for USD________ vide PAD no._______ lodged". At the time of Retirement when the payment is made following entry is passed. Debit: Party Account Credit: NIPAD Credit Voucher passed is of Non Interest Payment Against Documents because the liability that was created is reversed as the payment is made and is narrated as "By Amount of LC no.________dated___________for USD__________ retired". Debit voucher passed is of the party account as the payment is made from the account of party. EXPORTS : Bills of Exchange (Drafts) : The bill of exchange, commonly referred to as the draft or the bill, is an unconditional order in writing, signed and addressed by the drawer (the exporter usually) to the drawee (the confirming bank or the issuing bank usually), requiring the drawee to pay the drawer a certain sum of money at sight or at a fixed or determinable future time. Bill Of Lading (B/L) : The bill of lading (B/L) serves as a receipt for goods, an evidence of the contract of carriage, and a document of title to the goods. The carrier issues the B/L according to the information in a dock receipt, or in some cases according to a completed working copy of the B/L supplied by the customs broker. 82

The B/L must indicate that the goods have been loaded on board or shipped on a named vessel, and it must be signed or authenticated by the carrier or the master, or the agent on behalf of the carrier or the master. The signature or authentication must be identified as carrier or master, and in the case of agent signing or authenticating, the name and capacity of the carrier or the master on whose behalf such agent signs or authenticates must be indicated.

Certificate of Origin : The certificate of origin is a document certifying the country in which the product was manufactured, and in certain cases may include such information as the local material and labor contents of the product. The country of origin is the country where the goods are grown, produced or manufactured. Beneficiary's Certificate : The beneficiary's certificate, sometimes referred to as the certificate of assurance, is a certification issued by the beneficiary of the letter of credit (L/C) showing, unless wording is specified in the L/C, the summary of a consignment and declaring (i.e., assuring the consignee) that the shipment in question conforms to the specifications in the sales contract. The exporter can issue a beneficiary's certificate using company letterhead.

Phytosanitary or Plant Health Certificate

The prefix 'phyto' means plant. The phytosanitary certificate---plant health certificate---is issued by the government agricultural department or certified inspector for such agricultural products as seeds, fruits, vegetables, rice, wheat, soybean, corn, and milled materials (e.g. flour and soybean meal), certifying that the goods are free from harmful pests and diseases.

83

Commercial Invoice : The commercial invoice is a record or evidence of transaction between the exporter and the importer. It is similar to an ordinary sales invoice, except some entries specific to the export-import trade are added. Outward Foreign Documentary Bills Sent For Collection (OFDBC) : In outward foreign documentary bills sent for collection the documents are sent for collection by the exporters bank. In collection fist the importers bank will sent the collection from the importers account to the corresponding bank and then that exporters bank will make the payment to the exporter. Time duration is provided as tenor of 3, 6, 9, 12,15 or 18 months. Vouchers Prepared For OFDBC OFDBC stands for Outward Foreign Documentary Bills Sent For Collection. 1. Contra Voucher: (At the time of lodgment) Debit: Foreign documentary bill lodged. Credit Foreign documentary bill sent for collection 2. Contra voucher (At the time of realization) Debit: Foreign documentary bills sent for collection. Credit: Foreign documentary bills lodged.

CREDIT VOUCHERS: 3. Sundry Deposit Account EDS: Credit By amount of export development charges on ofdbc #___________________ Amount Realized * special rate * 0.25% 84

4. Sundry deposit account WHT (withholding tax): Credit By amount of withholding tax charges on OFDBC#_________________dated_____________ for USD_________________ for M/S________________ . Amount realized * special rate * tax rate (as per refined product) 5. PLS income account exchange commission on USD exports: Credit By amount of service charges on OFDBC#________________dated for_____________ USD___________________account of M/S_________________ PLS income account commission on export bill 6. Income Account Foreign Courier: Income account is credited with flate rate of Rs.1000/- for all parties and for the special Parties like Pak Arab Fertilizer it is reduced to Rs. 900/- only. 7. Income Account Postage: Income account is credited with Rs.100/- as postage charges. 8. PLS Income Account Commission On Export Bill: Income account is credited with Rs. 200/- plus Rs. 80/- (For bank in respect of handling Charges to customer authority for deducting EDS) Total making Rs. 280/- (Rs. 80/- is earned on account of providing service/handling for collecting EDS to custom authorities. 9. Income Account Trunk Call Charges: It is flate rate of Rs. 100/85

10. Party Account is credited with net amount after deducting all the above noted expenses. Foreign Documentary Bills Paid : In Foreign Documentary Bills Paid the exporter negotiate the documents with the bank. Negotiation refers to the manner that the payment is made to the exporter by its corresponding bank and that bank than will contact the importers bank to pay on the behalf of importer. That bank to the importers bank along with the receipt that indicates that payment has been made then sends the documents that are negotiated with the exporter's bank. Normally it is written on the commercial invoice either payment has been made or the payment will be made after collection.

ICU Department: ICU stands for Internal Control Unit. It is a department in the hub branch that keeps in view the activities of all the branches that lies inside that hub. They normally do Internal

Audit of the branches . They check all the activities of the departments of all the branches inside hub. Their main work is to pin point the mistake and communicate that mistake from the originating branch in black & white form. In the form of sheet they let the branches know about their mistakes like low commission is charged or wrong check is passed. After pointing out the problem they want that branch to rectify the problem if immediate action is not taken than they have authority to inform about the attitude of the branch to the head office Karachi.

Information: Technology Department :

86

In the banking sector UBL introduced computer for the first time. Software that is used in all the computerized branches of UBL in Pakistan is UNIBANK System +2000 software. This software is programmed in ORACLE 9 language earlier this system was in COBOL. UNIBANK system is only used in Pakistan or it is on national basis because of different laws of country it is viable only in Pakistan, means in case of Zakat deduction there is only law in Muslim Countries. In this system all the activities that are related to the banking is feeded and this department has access to all the data that is related to different branches. This department helps in providing the statements to the different departments of the bank and the pass book that is provided to the customers so that they can have a view of their balance and the activities that they perform with the bank can also be getting through this department.

Human Resources Department

Transfers & Postings Scrutinizing bills (Hospital Bill) Staff Deceased cases & its Correspondence Retired employees Cases & its correspondence All staff legal cases & Court at Multan & Lahore. Retrenchment cases Complaints and its correspondence Fraud & Forgery cases Mandatory Leaves and its observance. Staff leaves and other related staff matters Goals of all Staff 87

 Monthly Statement of Staff Disciplinary Action Cases

Consumer Banking :
You as an individual can gain and benefit the most through UBL Consumer Banking. In UBL you get friendly, efficient and attentive personalized banking services - a unique banking relationship experienced by each UBL client. You can utilize the following services UBL Drive UBL Address Uni-Saver UBL Business Line UBL Cash Line UBL Credit Cards UBL Money Buying a home

UBL Drive: UBL Drive is a car financing scheme, which is launched by UBL as their first consumer product on may 27 2004. The PAYS feature of UBL Drive is a powerful tool for the consumer whereby the customer can design his own repayment plan. He can either pay higher at the beginning with installments reducing in subsequent years or start with lower instalments and increase subsequently. There is a huge potential for Auto Loans. So far Banks have been focusing on a few major cities only and there is a huge market that remains untapped. UBL plans to expand the market by its vast distribution network" Bokhari said.

UBL Address : 88

UBL Address is innovative consumer banking product, which offers loans to build, buy, or renovate homes. The housing sector is a fundamental pillar in the development of the economy. The government as well as the State Bank is encouraging banks to come up with affordable & accessible home financing schemes to fulfill the rising demand of housing due to rapid urbanization and lack of adequate housing units in the country "Consumer finance is one area that we see tremendous potential in this country, and we have invested a substantial amount of resources and capital into this effort. Inshallah, we will see the results going forward in the next 12 months" Mr. Bokhari said. "UBL Address will change industry norms by providing innovation, options and flexibility unmatched by any other bank. This has been possible due to the investment made in systems, people & processes". "True to our vision that our customers come first , UBL Address has been designed with the single-minded focus of providing an affordable substitute to rising monthly rentals so consumers can get the security & peace of mind they deserve", Mr. Bokhari concluded.

UNI-Saver: UBL Uni-Saver Account is an innovative way of serving customer's banking needs. Be it trade, business or personal finance, the UBL UniSaver allow maximum flexibility to their customers, yet gives them optimum returns. Special Features are; Daily Profits on your daily balance Higher returns on higher balances Attractive rate of return

Services
89

UBL WALLET (ATM Card):

UBL

Wallet ATM / Debit Card is all the convenience & security you desire quality

you deserve. This Wallet holds all the cash in your bank account. With UBL Wallet you can withdraw cash at ATMs any time, or make cashless purchases at outlets through the Debit Card facility. With no joining fee and an accompanying complimentary cardholder for your convenience, UBL Wallet has been designed to exhibit the best in features and facilities, as well as look & feel. Because at UBL,

you come first.

All the Cash You Need UBL is the only bank that offers the ATM and Debit Card facility to all account holders at all UBL branches, regardless of whether their branch is online or offline. Nine Supplementary cards UBL Wallet also gives you the facility of having up to 9 supplementary cards issued against one primary card. All supplementary cardholders will be able to conduct ATM/Debit transactions and will share the transaction limits of the primary card account.

24 x 7 Toll-Free Contact Centre

UBL's dedicated staff is at your service 24 hours a day, 7 days a week. You can call our contact centre at 0800-11-825 (Toll-Free), or you can simply pick up the telephone placed next to every UBL ATM and be instantly connected to our customer service representative via a hotline. UBL Wallet Your ATM Card

90

ATM Network: UBL already has its own network of 53 ATMs, which continues to Expand by the day. Moreover, UBL Wallet is part of the 1-Link switch, which is a fast expanding ATM network of more than 12 banks. This allows you to use your UBL Wallet across Pakistan at more than 300 ATMs

Funds Transfer : UBL Wallet allows three kinds of instant funds transfers through UBL ATMs from your UBL account: 1. Into any of your UBL accounts 2. Into any pre-linked UBL account 3. Into any other UBL account On confirmation, the amount from the cardholder account is instantly transferred to the beneficiary account. Human Assistant: For the first time in Pakistan, selected UBL ATMs feature a Virtual Human Assistant, who guides you in conducting your ATM transactions. Security: Your UBL Wallet functions on a PIN (Personal Identification Number) based system, ensuring complete security of your transactions. UBL Wallet Your Debit Card With UBL Wallet as your Debit Card, you can shop all you want, eat all you can, or fill up your car tank without carrying any cash. Simply use your UBL Wallet for direct debit from your bank account. The Debit Card facility is being offered in association with the Orix network, which offers connectivity at more than 1600 outlets across the country. You can use your UBL Wallet to conduct a debit transaction at any outlet in Pakistan that displays the Orix logo. Your debit transactions are safe and secure, since only you are aware of your Personal Identification Number (PIN). A debit transaction is conducted only when you type your PIN into the Point of Sale (POS) terminal located at the retailers' premises. Annual Fee (Rs.) Daily Limits (Rs.) 91

Card Type Gold Silver UBL ONLINE :

Primary 500 300

Supplementary 250 150

ATM Withdrawal 40,000 20,000

Debit Card 100,000 50,000

Funds Transfer 500,000 300,000

With UBL's state of the art online banking, you can access your account from more than 350 branches located in 71 cities across Pakistan. Your account gets to travel with you and can be accessed throughout Pakistan, be it Karachi, Kotli Main, Nalka Kohla or Mandara. Now UBL enables you to do all the following transactions in minutes through designated online branches. Salient features of online banking are: 1. 2. 3. 4. 5. Tezraftaar Free Doorstep Remittances With-in the country or from abroad, UBL offers the most efficient and price competitive service. With our large network of branches, we are poised to offer you service almost at your door step. Cash Deposit Cheque Encashment Stop Payment Account Statement Funds Transfer (Account to account / IBCA)

UBL's new remittance service, TezRaftaar offers all overseas Pakistanis the fastest and the most convenient delivery of their`:' money to their beneficiaries in 92

Pakistan. Best of all, TezRaftaar is completely cost free and is available at all UBL branches along the Bank's Network in the Middle East, UK and US.

Benefits Fastest delivery to your given address in Pakistan Doorstep delivery by authorized courier or credited to the recipient's account Free of charge transfer service Open to all including those who are not UBL account holders

Click N Remit: United Bank Limited has revolutionized the concept of remittances to Pakistan. UBL has brought a very Reliable, Simple, Speedy and Secure web based remittances product with the convenience of remitting money to your dear ones in Pakistan from the comfort of your home / office. It works 24 hours a day, seven days a week and it is inexpensive too. HAMRAH: UBL has always been at the forefront in identifying and meeting the financial needs of its valued customers. UBL was the pioneer in introducing Rupee Travellers Cheque facility in Pakistan, as early as 1971. In continuation of the same tradition, UBL in the shape of "Hamrah" Rupee Travelers Cheque enhances this facility for the convenience of its valued customers by offering denominations up to Rs. 10,000 UBL "Hamrah" has been designed keeping in mind, both convenience and security - be it business, property, trade or personal needs. "Hamrah" Rupee Traveller Cheques are the ideal and safest way of carrying cash when travelling anywhere in Pakistan. UBL has a 24-Hours customer help-line, providing its customers with round the clock tele-verification of "HAMRAH" traveler's Cheques. 93

Money Gram: The Money Gram money transfer service was started in 1988 by integrated Payment Service a US based division of First Data Corporation (FDC), a data processing company. At that time, FDC was owned by American Express. In 1996,Money Gram Payment System Inc,was floated on the New York Stock exchange. Money Gram Payment System is based in Denver USA. There is call center located there; it handles transactions for all non-automated agents and answers queries from customers on a 24-hour hotline. Money Gram has a world -wide agent base of over 29,000 agents, which allows customers to transfer funds around the world within minutes in over 130 countries. The Money Gram service will enable our customers to send and receive funds in 10 minutes. Money Gram is a 10 minute person to person money transfer service, which is quick and reliable and allows customers to send money world wide. UBL is providing MoneyGram Service through its dolrteytic branch neovork: Key benefits: Reliable and Secure Fast and Convenient Value for Money Expanded Network Free Message service

Buying a home Why rent when you can buy? Buying a home of your choice has never been so easy. With a maximum financing limit of 80% you can easily buy a house or apartment that best fits your requirements. So go ahead and start the search for your dream home because with easy and affordable installments you need not think of renting a house when you have hot UBL Address.

94

UBL Business Line UBL Business line a complete solution to all your Business Financing needs. With UBL Business Financing facility, you can now take your business to greater and newer heights, and achieve the level of success that you truly deserve. UBL Business line is a running Finance facility that not only provides funds for growth but also enables you to capitalize on profitable opportunities. With UBL Business line, now you will surely say. Ab Hui Kamiyaabi Meri Manzill. Now, UBL Business line credit line is here to solve all your cash flow problems. You can utilize up to Rs.10 million with the help of which you now focus on your business expansion and growth. UBL Cash line UBL Cash line is a flexible loan that provides you cash up to Rs.500,000 without any security requirements. It empowers you to take control of your finance. UBL Cashline is aimed to make your life easier ZINDAGEE ASAAN . Whether you are a salaried individual or a businessman, UBL Cash line takes care of your cash requirements. UBL Credit Card Welcome to the world of UBL Credit Cards the most exciting and vibrant credit card brand in Pakistan. We offer you a range of innovative and exciting cards that is not only powered by the security of chip but also enable you to personalize it any way you want

New Car Financing UBL Drive allows you to drive away in your own car by making a down payment of just 15% and to top that with low monthly installments. Used Car Financing

95

With UBL Drive you can buy favorite used car (up to 5 years old) at the most affordable rates. Cash Your Car UBL Drive is not a car loan; its financing facility that gives you Cash on your car, you can get up to 75% of your car value. UBL Money UBL money, the personal installment loan from UBL provides you with power, Control convenience and the flexibility to manage your financial requirements and realize on your dreams. Its about buying new furniture or marriage expenses, financing the education of your child or enjoying vacations abroad! UBL Money caters your needs handsomely. You can borrow any sum between 50,000 to 500,000 (PKR) and payoff up till 5 years. We know what you need at what time. Just give us the opportunity and let us serve you best.

Other Services:
UBL Net Banking UBL e-statement Hamrah UBL Wallet

UBL Net Banking:

UBL Net Banking is an internet banking portal offering a simple, convenient and secure method of accessing bank accounts on the internet. Its never being so easy to access and manage your finances in a secure real-time, online environment UBL e-statement: UBL is pleased to announce the launch of the UBL e-statement facility which it easier for you to get your statement of accounts and automated transactional debit/credit alerts right into you inbox.

96

Commercial Banking
Agriculture Products Small Business Schemes Investment and Saving Accounts UBL Basic Banking Account UBL Business Partner (Current Account) PLS UniSaver PLS UniSaver Plus UBL Rupee Transaction Account (PLS Saving) UBL UniFlex E-Transaction (Current Account) UBL Profit COD

Commercial Banking To stand tall among the worlds leading banks, UBL has developed a YOU attitude to understand its customers well. When you talk, we speak for you. For small and middle size investors, UBL has so much to offer, so much to deliver. You live the way you want; we will always be shadowing you. Walk in to any nearest branch of UBL, enter the world class bank and let us serve you with what you need. Small Business Scheme Under the Small Business Scheme, UBL is providing loans on easy terms to those who wish to set up their own small-scale business. This scheme is aimed at spreading prosperity in the country by reducing unemployment. As more and more people start their own industrial units, the country will move steadily towards economic self-reliance. 97

Investment and Saving Accounts: At UBL, we offer you the most beneficial and secured financial investment and saving options. You can choose from the following list of accounts anything that serve your needs best. UBL Basic Banking Account Exempted from Minimum Balance charges, UBL BBA holders can carry out two deposits and two withdrawals each month as per the bank policy. Through 24hrs ATM services, they can carry out transactions as and when desired, staying in the daily withdrawal limit. UBL Business Partner (Current Account) For our regular customers, we offer the ultimate option, UBL Business Partner (Current Account). With unlimited deposits and withdrawals, we offer you convenience of UBL net banking, UBL Wallet, UBL Orion and other exciting consumer products. Customers are liable to maintain minimum balance of Rs. 10000 to avoid the minimum balance charges until and unless they are exempted from it. Remember! We are not just a business; we are your caretakers; we know what you need. PLS UniSaver Let your savings earn you bucks. PLS UniSaver offers you semi annually profit disbursement with profit being calculated upon average monthly balance. PLS UniSaver Plus Big amounts earn you big; but with PLS UniSaver Plus, we make it bigger for you. With deposits starting from Rs. 25 million, we offer 5.00% but more you put in, more profit rate will we offer.

Avg. Balance per month

Profit Rate* 98

Rs. 25 million Rs. 25 million to Rs. 100 million Rs. 100 million to Rs. 250 million Rs. 250 million to Rs. 500 million Above Rs. 500 million

5.00% 5.10% 5.20% 5.30% 5.50%

* Profit rates are for the month of July only

UBL Rupee Transaction Account (PLS Saving) Have your money box at UBL! Put in your savings and let us earn you 5% p.a. over your daily savings. UBL UniFlex Have couple of thousands spare? Come invest in our UBL UniFlex Accounts, we will make you earn handsome. Amount 1000-50000 50001-100000 100001-200000 Profit Rate 7.0% 7.25% 7.5%

With UBL UniFlex, we serve you with fix profit rates at maturity. E-Transaction (Current Account) In the era of glooming computerization, even Chicago, Tokyo, Sydney, all are seconds away from you. Internet has turned distance into time, and we have turned your account into a shear pleasure. Now sitting at home, or at office or anywhere in the world, we offer you a wide spectrum of world-class electronic services and banking products each time you log in. Use your account like a regular account plus use the premium Internet & Mobile banking services for Instant Fund Transfers, Instant Shopping, Instant Bill payments, Instant Mobile top ups, Alerts, Statements and much more. You love surfing, come surf with UBL.

99

UBL Profit COD Make fix investment with us, choose your profit option, and we will serve you the best rates in Pakistan. What if you earn at 16.25% p.a. Stop imagining, come invest in our Certificates of Deposit! At maturity, we offer you the following rates: Deposit Products 3 months 6 months 1 year 2 years 3 years 4 years 5 years 6 years 7 years 8 years 9 years 10 years 8.25% 8.50% 9.50% 11.50% 12.75% 13.25% 13.75% 14.25% 14.75% 15.25% 15.75% 16.25% Tiers & Jul 1 Jul 31, 2008

Complementary Services

100

Insurance Certificate UBL not only cares about you, we care about those too who are dependent upon you. So UBL now offers enhanced Free Accidental and Disability Insurance Certificate coverage to all existing and new account holders.

Closing Balance at month Insurance Limit (PKR)* end (PKR) 1 10,000 10,001 100,000 100,001 500,000 500,001 and above * Terms and conditions apply 100,000 250,000 500,000 1,000,000

UBL Wallet VISA Imagine you are shopping in a big mall and you are ever so watchful about your cash in your wallet. Every time you shop, you're in a mess! Let UBL Wallet Visa ease your shopping. Shop around and pay your expenses directly from your account through UBL Wallet. Not only can this, individuals and sole proprietors, through more than 925 ATM machines, debit their accounts as many times as they want. You can choose according to your need. We offer

Card

Annual fee (Rs.) y ary

Daily Limits (Rs.) Debit Spend Funds Transfer UBL) Funds Transfer other banks) 250,000 250,000 Withdraw Card al

Type Primar Supplement ATM

(From UBL to (From UBL to

Gold

500

250 150

40,000 20,000

100,000 250,000 50,000 250,000

Silver 300

Moreover, the convenience and excitement of Internet Shopping is also available at UBL Wallet VISA ATM/ Debit Card. So surf around and feel free to shop. We are here to help you pay miles away. 101

UBL Orion Buy W100! (Message tone) Dear customer your voucher # is 1456894525796324 Thank you for using Orion Your finger tips might have not been that powerful before. Just type in commands and at your ease, buy mobile cards and pay your utility bills. With UBL Orion Mobile Wallet, running around for mobile cards and queuing to pay your utility Bills is no longer a part of your life. Live your life at your finger tips. UBL Net banking UBL is very much determinant to make banking as you will. How about being in office, or on your way, at home or at anywhere in the world but still connected to your account! Through UBL Net banking, Access your accounts any time, pay anyone you want, pay your bills, buy vouchers you need and get account alerts, all integrated with one of the best security systems in the world. Humrah Humrah is your secured cash, something thats safe anywhere and accepted everywhere. Offered in the denominations of 10,000 and 5,000, "Hamrah" Rupee Traveller Cheques are the ideal and safest way of carrying cash when traveling anywhere in Pakistan. Let it be business; property; trade or personal needs; we make you have the most convenient option. Moreover, Humrah RTC's are now accepted at more than 2000 places such as hotels, shops, real estate agents, jewelers, car dealers, etc and of course at all our UBL branches.

UBL e-statement: During your busy hours, you dont have to bother about visiting us to get your account statement. Neither theres a risk of anyone else knowing your account details. Subscribe today, free of cost to UBL e-statement facility and let us share 102

details with you daily, weekly, monthly, quarter or semi-annually. Get debit/credit alerts and know as soon as you get money or pay off.

Financial Analysis
FINANCIAL STATEMENTS OF 5 YEARS

UNCONSOLIDATED BALANCE SHEET AS AT DECEMBER 31, 2008

Note 2008 2007 ------- (Rupees in '000) -------

ASSETS Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Performing Non-performing

6 50,069,965 57,526,451 7 7,497,174 4,191,128 8 22,805,341 24,781,723 9 116,328,288 115,585,646 10 361,863,689 293,373,007 10 9,275,986 5,981,729 371,139,675 299,354,736 11 18,021,445 16,943,950 18 2,055,609 - Other assets 12 17,154,985 11,740,697 605,072,482 530,124,331

Operating fixed assets Deferred tax asset - net

LIABILITIES Bills payable

14 5,194,449 6,079,341

103

Borrowings Deposits and other accounts Sub-ordinated loans Deferred tax liability - net Other liabilities

15 44,195,886 59,103,350 16 483,560,062 400,974,539 17 11,993,848 5,996,696 18 2,232,344 19 16,265,478 13,316,657 561,209,723 487,702,927 43,862,759 42,421,404

NET ASSETS

REPRESENTED BY: Share capital Reserves Unappropriated profit

20 10,117,188 8,093,750 15,501,513 10,261,958 16,604,076 15,653,703 42,222,777 34,009,411 21 1,639,982 8,411,993 43,862,759 42,421,404

Surplus on revaluation of assets - net of deferred tax

UNCONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED DECEMBER 31, 2008
Note 2008 2007 ------- (Rupees in '000) -------

Mark-up / return / interest earned Mark-up / return / interest expensed Net mark-up / interest income Provision against loans and advances - net (excluding impact on account of change in Prudential Regulations) (Reversal) / additional provisioning arising on account of change in Prudential Regulations Provision against loans and advances - total Provision for / (reversal of) diminution in value of investments - net debts written off directly

24 52,253,361 41,045,543 25 24,117,702 16,936,187 28,135,659 24,109,356

10.5 5,879,185 1,689,467 10.5 (1,369,229) 3,803,759 4,509,956 5,493,226 9.3 10.7 935,123 2,219,815 (6,303) Bad 1,367,514 8,097,285

104

Net mark-up / return / interest income after provisions Non Mark-up / Interes t Income Fee, commission and brokerage income Dividend income Income from dealing in foreign currencies Gain on sale of securities Unrealized loss on revaluation of investments classified as held for trading income Total non mark-up / return / interest income 26 849,367 9.4

6,422,046 20,038,374 17,687,310 6,304,927 5,165,066 587,989 548,782 1,819,250 827,328 254,046

27 1,617,564 10,401,394 8,992,352 30,439,768 26,679,662

(19,547) (15,755) Other 1,454,729

Non Mark-up / Interes t Expenses Administrative expenses Other provisions / write offs - net Worker welfare fund - Other charges 17,430 Total non mark-up / interest expenses Profit before taxation Taxation - Current Taxation - Prior year Taxation - Deferred

28 15,519,634 13,420,977 29 450,390 236,281 31 336,999 30 258,321 16,565,344 13,674,688 13,874,424 13,004,974 32 6,090,351 5,075,600 32 435,072 442,066 32 (984,119) (915,283) 5,541,304 4,602,383 8,333,120 8,402,591 15,653,703 12,429,853 23,986,823 20,832,444 253,018 24,239,841 20,895,472 ----------- (Rupees) -----------

Profit after taxation Unappropriated profit brought forward

Transfer from surplus on revaluation of fixed assets - net of tax 63,028 Profit available for appropriation

21.1

Earnings per share 8.31

33

8.24

105

106

107

108

Current Ratio Current Assets / Current Liabilities

years
CURRENT RATIO
2004 2005 2006 2007 2008

0.24

0.21

0.24

0.43

0.37

0.45 0.4 0.35 0.3 0.25 0.2 0.15 0.1 0.05 0

Current Ratio

2004

2005

2006

2007

2008

INTERPRETATION
Current ratio measure the liquidity of a firm and this is up to the mark according to standards of accounting and it is also improving. Current ratio tells the shareholders and investors how much efficient the company is. UBL. current ratio decrease in 2005 and then increasing from 2006 to 2008

109

ACID TEST RATIO C.A Inventory / C.L

years
2004 2005 2006 2007 2008

CURRENT RATIO

0.24

0.21

0.24

0.43

0.37

0.45 0.4 0.35 0.3 0.25 0.2 0.15 0.1 0.05 0

Quick Ratio

2004

2005

2006

2007

2008

INTERPRETATION Acid test ratio is more useful to measure the liquidity position of any organization but because UBL has no Inventory so current ratio and acid test ratio has the same meaning and no difference is there.

WORKING CAPITAL
110

Assets Liabilities
Year Working capital

2004 17364031

2005 21668270

2006 29863387

2007 4242404

2008 43862759

45000000 40000000 35000000 30000000 25000000 20000000 15000000 10000000 5000000 0

working capital

2004 2005 2006 2007 2008

INTERPRETATION
The of the UBL is showing Increasing trend Current assets are more than current liabilities mean UBL is Stronger in its working capital. There is trend towarsds improvements.

111

NET PROFIT MARGIN

Net Income / Sales * 100

Years NET PROFIT MARGIN

2004 40%

2005 29%

2006 28%

2007

2008

20.4% 15.94%

40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% Net Profit Margin

2004

2005

2006

2007

2008

INTERPRETATION
Net Profit to total income when we examine that it has been decreasing trend. I have already discuss in my report that UBL was facing heavy management expenses when it comes in UBL control its become profitable.

OPERATING PROFIT MARGIN

Operating profit / Sales * 100

112

Years OPERATING PROFIT MARGIN

2004 85%

2005 80%

2006 77%

2007 64%

2008 58.2%

90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00%

Operating Profit Margin

2004

2005

2006

2007

2008

INTERPRETATION
Operating Profit to total income when we examine that it has been decreasing trend .I have already discuss in my report that UBL was facing heavy management expenses when it comes in UBL control its become profitable.

GROSS PROFIT MARGIN

G.P / Sales * 100

113

Years GROSS PROFIT MARGIN

2004 80%

2005 70%

2006 63%

2007 58%

2008 53%

80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Gross Profit Margin

2004

2005

2006

2007

2008

INTERPRETATION
Gross Profit to total sales when we examine that it has been decreasing trend. From 2004 to 2008 it is effected badly.

RETURN ON ASSETS Net profit / Total Assets

114

Years Return on assets

2004 13%

2005 17%

2006 20%

2007 15%

2008 13%

20% 15% 10% 5% 0%

ROA

2004

2005

2006

2007

2008

INTERPRETATION
Return on total assets shows that it is increasing every year and improving every year but it decreases from 2007 to 2008. UBL must improve it.

Return on Equity EACS / Equity

115

Years Return on equity

2004 21%

2005 27%

2006 31%

2007 19.8%

2008 18.9%

35% 30% 25% 20% 15% 10% 5% 0% 2004 2005 2006 2007 2008 ROE

INTERPRETATION
Return on Equity shows that it is increasing every year and improving but it decreases from 2007 to 2008. UBL needs for improvement to increase market capitalization.

116

Total Liabilities / Total Assets * 100

Years Debt Ratio

2004 93%

2005 93%

2006 92%

2007 91%

2008 92%

93% 93% 92% 92% 91% 91% 90% 2004 2005 2006 2007 2008 Debt Ratio

INTERPRETATION
Debt to equity is deceasing 2004 to 2007 but improving in 2008. It must be improve continuously to survive in market.

117

Time Interest Earned EBIT/ Interest Expense

Years Time Interest Earned Ratio

2004 1.72

2005 2.15

2006 2.27

2007 1.95

2008 1.83

2.5 2 1.5 1 0.5 0 TIE

2004

2005

2006

2007

2008

INTERPRETATION
Time interest earned ratio is having increasing trend from 2004 to 2006 and it is good for UBL. But it is decreasing from 2007 to 2008 it is not a good sign for UBL 118

it should improve this. It also shows the inefficiency of UBL to pay its interest amount.

Price Earning Ratio

Market price per share / EPS

Years Price Earning Ratio

2004 6.99

2005 5.44

2006 3.41

2007 6.01

2008 6.06

7 6 5 4 3 2 1 0 2004 2005 2006 2007 2008 P/E

119

INTERPRETATION
It shows the earning from the sale of stock as more it is better for the UBL. In 2004 it is good but decreased in 2005 and 2006 but improved in 2007 and slightly in 2008 is good sign but continuous improvement is required.

REGULATORY RATIOS Advances to deposits Advances / Deposits * 100

Years Advances to deposits ratio

2004 63%

2005 70.8%

2006 73.8%

2007 74.6%

2008 76.7%

120

80% 70% 60% 50% 40% 30% 20% 10% 0% 2004 2005 2006 2007 2008 Advances to Depositd

INTERPRETATION
It shows the bank loaning against its deposits a certain percentage should landed only. The Graph shows that the UBL is advancing more and more through out the year 2004 to 2008.

Cash to Deposits Cash / Deposits * 100

Years cash to deposits ratio 2004 14.5% 2005 14.8% 2006 14.6% 2007 2008

14.4% 10.35%

121

14.80% 14.70% 14.60% 14.50% 14.40% 14.30% 14.20% 14.10% 14.00% 2004 2005 2006 2007 2008 Cash to Deposits

INTERPRETATION
It shows the amount of cash available in bank against of cash deposited and advanced. It has increased in 2005 and afterward have decreasing trend. It is better to hold only a certain percentage of cash more cash in hand is not good for UBL.

Capital Adequecy Ratio Equity to Deposit Ratio

Equity / Deposits * 100

122

Years Equity to Deposit ratio

2004 7.6%

2005 7.5%

2006 7.9%

2007 10.5%

2008 9.7%

12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 2004 2005 2006 2007 2008
INTERPRETATION
It shows the amount of equity in against of deposits. It has increasing trend from 2004 to 2007 and afterward decreased in 2008.It is better to hold only a certain percentage of cash more cash in hand is not good for UBL.

Equity to Deposits

Equity to Asset Equity / Asset * 100

123

Years Equity to Asset ratio

2004 6.37%

2005 6.24%

2006 7.05%

2007 8%

2008 7.25%

8.00% 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% 2004 2005 2006 2007 2008 Equity to Asset

INTERPRETATION
It shows the amount of equity in accordance to total assets. It has decreased in 2005 but increased in 2006 and 2007 but decreased in 2008.It should be at moderate level.

124

SWOT ANALYSIS Of UBL BANK Ltd.

125

STRENGTHS
The first and the foremost strength of UBL is fastly increasing no. of branches in the whole country. The customers relation is the strength of UBL. The UBL is charging the less mark up rate as compare to it competitors. The unique slogan of the UBL has a very positive impression in the minds of all the customers. Working environment of UBL is very much friendly. The bank also has started ATM facility in most of the branches 24 hours banking is now the trend in Pakistan. UBL provide the fast services. Every thing goes very quickly. They response their customers very quickly.

126

WEAKNESSES
The bank is not introducing new products these days, so bank should boost up the process of product development and increase the range of services for the customers.

UBL bank does not follow the proper policies for reward and compensations system in the organization which is creating the demotivation in employees.

The human resource department is not performing well in the organization. Selection process is not done on the merit due to which many competent persons cant get job in UBL.

UBL officers salaries are low as compare to the other private banks.

127

 UBL has low level of motivation in the employees of the bank

OPPORTUNITIES
The concept of mobile banking is emerged and many banks are following this, so UBL is also has the opportunity in this concept.

A vast market is still empty in the country especially in the small towns and cities.

UBL has a very large network of branches all over the country. Unfortunately, these braches are not fully equipped with modern instrument, while other banks offering modern services, if management launches innovative production these areas, bank will able to get the edge in these areas over other banks.

128

THEARTS
Threats are also external factors in the environment, which are not in the favor of company, which can seriously hamper the companys ability to serve its customers. The Expansion and emergence of new commercial banks like ASKARI bank, UNION bank and etc.. And their better performance may cause loss of market shares of UBL. The terrorism is the burning issue which is effecting all the industries including banking sector as well. The rising inflation and overall depression is also a threat for the bank.

The political influences affect the performance of bank very badly. Most of the loans become bad debts due to political forces. No stable government in Pakistan, Government policies change with the change of government. 129

 UBL has many competitors who are continuously increasing their products and marketing aggressively it may cause its customer to shift to its competitors

Recommendations
SWIFT MECHANISM : SWIFT mechanism is gaining importance for the treatment of LC and it has been found that UBL has only provided SWIFT facility at its head office not to all the authorized dealers dealing with foreign exchange in their branches. To save the precious time of the prestigious customer and to avoid them from defection UBL should insert SWIFT mechanism for LC in their Central branches inside the country. TO AVOID CUSTOMER DEFECTION : During my time period that I spent in foreign exchange department I found in their registers that many firms were defecting means those who were first loyal to UBL for the operations of opening LC were not viewed in the list for a longer period of time. To avoid their defection whether it is partial or full relationship should be created by giving a phone call. It will make betterment in UBL's goodwill and their profits. REDUCE COMPLEXITY IN ADVANCES : While providing advances the mechanism that is opted by UBL is to provide facility and renew it after a year. In the renewal whole procedure is followed again 130

that was opted at the start. Lot of documentation get not only employee confuse but even customer avoid that. This can be the reason for UBL having low ratio of advance as compared to their deposits. So UBL should finish the method of renewal but keep checking the performance of the organization by having relationship. INTERNATIONAL EXPANSION : UBL has internationalized already and is performing very well in its abroad branches. But UBL has internationalized to few countries. They have big markets ahead of them and with their branches all over the world they can very easily access the people around the world and their working activity will get simpler with that. In the form of European Countries and markets like CHINA where there is lot of activity related to banks they can expand their chains. MOBILE BANKING: Mobile banking is actually banking that you can do yourself You can perform various activities of bank through your mobile phones or through your computers. With just a call you can transfer money from one account to another and similarly other activities. It is a concept that is gaining importance throughout the World Pakistan is no exception. UBL should start working on this concept to maintain their existence in the changing banking sector. ADOPT PRO-ACTIVE APPROACH : UBL management should adopt proactive approach to survive in this sector. What I have observed is that UBL management is having reactive approach means they react to the situation that their competitors have created. In case of consumer financing UBL has responded by having same schemes that have been already launched by their competitors e.g. Car financing and housing schemes are responded but very late by the UBL. UBL should try for new innovative ideas rather than moving on the same rack that their competitors are doing. EDUCATE ACCOUNT HOLDERS : 131

Whether the account holders are new or existing bank should provide them with the initial information about how to deposit and withdraw money from the bank. It will be beneficial for the bank in a way that lot of time could be saved afterwards with that approach. CREDIT CARD FACILITY : Credit card facility should be provided by UBL because by that they can utilize their idle deposit in best way and it is the best source for establishing relationships with the strong parties. PROMOTIONAL ACTIVITY : Bank must let potential customers know that all attractions for banking exist. This is done by advertising on television and obtaining press coverage, in conjunction with direct mail, window displays, pamphlet in branches and in appropriate other locations (such as hotels, shops, etc.) and including leaflets in statement of accounts sent to existing customers in the hope that they will tell potential customers about the services provided by our bank. RELATIONSHIP : The bank should keep on filling the gap between customer and the bank through consumer friendly attitude and efficient services. They should work on building relationship with the customers.

BUSINESS PARTIES : UBL should start thinking about relationship with the parties that are willing to do the business with the bank. Business in the form of deposits for a longer period of time. Rather than looking for small parties whose purpose is just to deposit in the morning and have withdrawal in the evening should be discouraged. Lot of time and work activity can be saved by having few but good parties rather than having huge accounts of small amount and especially those are not for the purpose of long term deposits. 132

CHANGE ATTITUDE: Employees inside the branches should change their attitude toward the customer. It has been observed that customer do not get the same warm welcome and importance that he wants and he is been provided by other emerging banks like ALFALAH and UNION bank. They should start thinking about changing their attitude from now.

Conclusion
If I have to express my experience of internship in UBL DOABA Road Khanpur .I would briefly say: UBL is a good Organization in the way that anybody can join it for his/ her longterm career. Overall working environment is comfortable. Management of branch cares a lot of its employees and considers them as the Asset of bank. Behavior of senior executive of bank is very polite and they are caring about the individuals career and their growth. However management is very demanding about the targets but good reward at the achievement of assigned targets is awarded. Employees at UBL are quite efficient. , its employees have to bring their bank

among the list of good banks. Therefore, they work more than their working hours and it is all according to their will. It also shows their loyalty, commitment to organization. Employees are given the benefits like bonus, gratuity funds, loans, increments, and medical. 133

All the customers are entertained individually. Same kind of behavior and attention is given to all the customers. Getting ideas for improvement from customer side is a new idea and that is working very well in UBL improved through them. Prioritizing its product portfolio in line with its corporate and consumer needs and wants the bank is committed to develop products that give more value to its customers in both the sectors. In bank, all the work is done on computers. All the entries are made in computer. Balance are fed into the computer. This increases efficiency of the bank. During my internship training I gathered information regarding how a successful bank operational aspect decorticated with the practical. I found my internship training at UBL environment. So far my learning is concerned; all the employees at branch were quite cooperative. They helped me to understand the activities of a bank to possible extent. Their good attitude gave me more confidence to learn more and to ask if I have any query in my mind. Besides their ever going activities they never get irritant by my questioning. I had made an honest efferent to present the working & operation of UBL in simplest way. be a very rewarding experience. The . All the customers are asked to fill a suggestion form and the standards of the bank are

training was beneficial because it helpful me to aware a real life working

I feel pleasure that I have really gained a lot during 6 weeks & enjoyed working with experienced cooperative & intelligent staff.

134

Annexure

135