(Checked Pages 41) House Building Finance Corporation LTD

Government College Of Management Sciences Peshawar.
INTERNSHIP REPORT
ON
(House building Finance Corporation Ltd)
Presented by:
Name: Mehtab Ali Shah
Student ID: M .COM, Final
Roll NO: 656
Submitted to,
Peshawar University.
DEDICATED TO
Dedicated to my Parents for their love,
Sincerity and unflinching support.
ACKNOWLEDGEMENTS
Countless thanks to God; who is the Creator of this mysterious universe, The
Merciful and Benevolent. Worthy of all praises, whose bounteous blessings enabled me to
complete this Report work successfully and all the respect for his last prophet Muhammad
(Peace be upon him) for enlightening our conscience with the essence of faith.
I feel highly privileged and pleasured to record the deep sense of gratitude to Saeed
Khan, provincial Chief in HBFC Zonal office, Peshawar, and the whole staff of HBFC for
their valuable guidance and supervision. His valuable suggestions generated my vigor for
excellence in pursuits, without which this work would have never been materialized.
I am thankful to all my VU staff members who guided us well and helped us in
completing our tasks and to successfully reach our destinations.
Special thanks are also extended to my parents who always imparted full
encouragement and sincere cooperation not only during the course of this research but all
over my academic career in the university.
Mehtab Ali Shah
EXECUTIVE SUMMARY
Now a days strong and efficient capital and financial institutions are the basic requirements
of each country. So no country can be considered strong without having strong enough
capital and financial institutions and markets. One of the components of these financial
institutions are the banks. No one can deny the role the banks are playing in the economic
development of a country.
In Pakistans banking sector, HBFC is one of the leading financial institutions, the prime
housing finance institution of the country, providing affordable housing solutions to low and
middle income groups of population by encouraging new constructions in Small & Medium
Housing (SMH) sector.
House Building Finance Corporation was established under the Act No. XVIII of year 1952.
Since its inception in 1952, the House Building Finance Corporation has been providing
financial assistance to various segments of the society, all over the country, to build and own
a house of ones own. HBFC can rightly be called a pioneer in this region of the world in
specific purpose financing in housing sector.
The new management started new schemes and injected new concepts in order to improve its
services to the clients. Now the bank is in very good financial position and also has gained its
lost Goodwill.
My two months internship in HBFC gave me a very good deal of the practical experience
about the financial institution, its personnel and various services it offers to the clients.
The report aims at appraising the working of House Building Finance Corporation, its
functions and operation and also attempts to asses its performance. Certain recommendations
are presented for the potential areas of improvement. An implementation plan of the
recommended steps is given at the end of the report.
At present, HBFC is providing financial assistance under two schemes, namely Ghar Aasan
Scheme (GAS) for purchase and constructions of housing units, and Shandar Ghar Scheme
(SGS) for renovation of houses. To cater the needs of changing time, and to make the product
more attractive and easy for the intending house owners, while fully maintaining the
compliance with Shariah, the financing facilities have been remodeled, remolded,
restructured and repackaged with the title of Ghar Aasan Islamic House Financing or in
short Ghar Aasan Scheme.
Although two months duration for studying such a large organization by no means is enough
but I have tried my ever best to cover all the areas of the bank in my report.
PHOTOCOPY OF THE INTERNSHIP CERTIFICATE

(NOTE: Will be enclosed with hard copy)
Table of contents;
CHAPTER 1:
1.1.
1.2.
1.3.
1.4.
1.5.
Vision
Mission
Constitution
Ownership
Potential for Housing Construction Industry
And House Finance.
1.2.
Brief Introduction of the Organization Business Sector.
1.2.1. Ghar Aasan Scheme.
1.2.2. Shandar Ghar Scheme.
CHAPTER 2
2.1
2.2.1.
2.2.
2.3.
2.4.
2.5.
2.5.1.
2.5.2.
2.5.3.
2.5.4.
Brief History
HBFC LTD.
Nature of The Organization.
Business Volume.
Product Lines.
Competitors.
Housing Creditors.
National Bank
Bank Alfalah
Housing Finance in the country.
CHAPTER 3
3.1.
3.1.1.
3.1.2.
3.2.
3.2.1.
3.2.2.
3.3.
Brief introduction of the Branch where you did

Your internship
Zonal Office Peshawar.
Responsibilities of GMs and ZMs.
Period of my internship.
Starting Date.
Ending Date.
Training Departments.
CHAPTER 4
4.1.
4.1.1.
4.1.2.
4.1.3.
4.1.4.
Introduction of all Departments.

Investment Department.
IT. Department.
Marketing Department.
Administration Department.
4.1.5. Accounts Department.

4.1.6. Recovery Department.
CHAPTER 5
5.1.
Planning.
5.1.1. Decision Making Process.
5.1.2. Organization Current Strategies.
5.2.
Organizing.
5.2.1. Main Office.
5.2.2. Number of Employees.
5.2.3. Organizational Design.
5.2.3.1.
Departmentalization.
5.2.3.2.
Span of Control.
5.2.3.3.
Chain of Command.
5.2.3.4.
Centralization / Decentralization.
5.2.3.5.
Formalization.
5.2.3.6.
Work specialization.
5.2.4. Managing Change and innovation.
5.2.5. Managing IT and Communication.
5.3.
Leading.
5.3.1. Leadership style.
5.4.
Controlling.
5.4.1. Controlling Operations.
5.4.2. Controlling performance.
5.4.2.1.
Performance Appraisal System.
CHAPTER 6.
6.1.
Customer Relationship.
6.2.
Inadequate Training Programme
6.3.
Shortage of latest Computers.
6.4.
Poor Job Rotation.
6.5.
Lack of Security.
6.6.
Lack of Motivation.
6.7.
Improper work distribution.
6.8.
Lack of appreciation.
6.9.
Lack of reliability.
6.10. Human Resource Management.
6.10.1. Selection and Recruitment.
6.10.2. Job for Life.
6.10.3. Staff seen as Job Holders.
6.10.4. Interpersonal Relationships.
CHAPTER 7.
7.1.
7.1.1.
7.1.2.
7.1.3.
7.1.4.
SWOT Analysis.
Strengths.
Weaknesses.
Opportunities.
Threats.
CHAPTER 8. CONCLUSION AND RECOMMENDATIONS

8.1.
Conclusion.
8.2.
Recommendations.
References and Sources used.
Chapter 1: INTRODUCTION
It was in 1952 that an Act of the Pakistan legislature, known as the House Building Finance
Corporation Act, 1952 (Act XVIII of 1952) was passed to establish the House Building
Finance Corporation, to provide financial assistance for house construction in the country.
The Act XVIII of 1952, was published in the Gazette of Pakistan, dated 18th April, 1952
and came into force in November 1952, as per Government Notification No.22(9)F.1/52
Dated 8th November 1952.
For over a period of 20 years, the Corporation advanced loans only for house construction in
urban areas of Pakistan. Its activities also suffered financial and management constraints due
to paucity of funds. The Head Office of the Corporation was shifted, in 1963 from Karachi to
Dacca which presented the Zonal Office at Karachi, with many difficulties. It was after the
re-establishment of its Head Office back in Karachi, in 1972, that a large number of
amendments were affected in the HBFC Act and its financial allocations were augmented
which enabled it, besides making construction loans, to sanction loans for house purchase in
rural as well are urban areas of Pakistan, finance construction of housing projects, provide
financial assistance in form of bulk loans to the development authorities, housing corporation
etc., advance re-habilitation loans and undertake construction of housing projects for sale to
public. This undoubtedly, revolutionized the operative potential of the Corporation, but the
real revolutionary change in its working was yet to come.
It was in 1979 that the Government decided to introduce a new system of interest free
financing through HBFC. An investment scheme, based on partnership, was worked out and
after the HBFC Amendment Ordinance, 1979 was approved by the Cabinet the same was
introduced from August, 1979. This brought a major change in the HBFC working.
The Profit & Loss Sharing Scheme (PLS), which was implemented in 1979, was for a period
of 15 years, which was simplified twice and with certain more amendments was reintroduced
in 2002 with modification which is in vogue to date. Under the new investment scheme
(Ghar Aasan) the repayment period (maximum) was initially 25 years but later in 2005 it was
changed to 20 years.
1.1.
VISION:
To be the prime housing finance institution of the country, providing affordable housing
solutions to low and middle income groups of population by encouraging new
constructions in Small & Medium Housing (SMH) sector.
1.2. MISSION
To be a socially responsible and commercially sustainable housing finance institution.
TARGET MARKET
TARGET AREAS
Low and middle income groups of population.

No negative list, all legalized residential locations.
Responding to housing needs of low-income groups is a social responsibility, beyond that

everything has to be 100% commercially sustainable.
1.3. CONSTITUTION
House Building Finance Corporation was established underthe act No. XVIII of year 1952.
1.4. OWNER SHIP
Growing rate of Housing Demand:
In urban areas:
Housing units in country:
Ownership:
Rent free:
80% P.A
19 million.
80.8% (15.5) million
10.2% (2.0 million)
Rented:
Units required for the population of 149 million:
Shortfall of housing units:
9.0% (1.5 million)

25 million
6.0 million
*Based on 1998 survey.

*This estimates that Backlog may now be increased to 7.0 million.
1.5. Potential for Housing Construction Industry and Housing Finance:
Urban Housing needs:
At average cost of Rs. 1.0 Million/Unit:
MORTAGE
35% of Urban housing needs
Current mortgage finance
(2005)
400,000 per year

400 Billion
FINANCE
135 billion
18 BILLION ONLY
POTENTIAL
3% of GDP
.5% of GDP.
1.2. BRIEF INTRODUCTION OF ORGANIZATION BUSINESSS SECTOR

PRODUCTS
1.2.1. GHAR AASAN SCHEME:
The Management of HBFC has taken bold steps in helping its customers obtain affordable
quality housing to fulfill their individual needs and expectations. They are now committed to
play a prominent role as a socially responsible and commercially sustainable house financing
institution of the country.
The Ghar Aasan Scheme will support you in purchase or construction of house / flats. The
salient features of the scheme are as following:
1. Financing support up to Rs.75, 00,000/ is accessible to be provided to all
prospective customers subject to the customers eligibility & location of the
project.
2. The loan can be repaid over a maximum repayment period of 20 years in
affordable installments depending on the customers age, repayment ability and
the share in the rental income.
3. The overall cost in acquiring housing under the scheme is much more attractive as
compared to other financing institutions.
4. Sharia compliant scheme.
5. Hassle free investment & repayment facility.

HOW TO APPLY FOR HBFC INVESTMENT in GAS (GHAR AASAN)
The application forms are available at all offices of HBFC, free of cost. One-time processing
fee shall be payable to the Corporation along with application.
PERSONS FROM WHOM APPLICATION FOR HBFC INVESTMENT MAY BE
ACCEPTED:
Applications may be accepted from and in the name of persons who are in ownership
of a plot of land, either lease hold or free hold, with a clear non-encumbered
marketable title and have a reliable source of income from service, Government or
private or through business.
Applications may be accepted from persons holding powers of attorney in the

prescribed form of HBFC, provided it is established that the owner is serving abroad
or in a province other than the one where the application is filed and is not in a
position to complete the required formalities himself. In either case, the attorney
should be a guarantor for such investment.
Application may be accepted from a minor through his duly certificated guardian with
prior permission of the family Court, in writing, to assign the property of the minor to
the Corporation as security against the investment. In such cases the guardian should
invariably, execute a letter of guarantee on behalf of the minor.
A Pakistani, residing abroad, may apply for investment in the same way as
persons/applicants within the country. The income of such applicants should be
confirmed/verified by respective Pakistani Embassies, wherever considered
necessary.
WHAT DOCUMENTS ARE REQUIRED?

(A). HOUSE CONSTRUCTION:
The following documents in original together with a photo stat of each, should accompany
the investment application for the construction of a house:
(i). LEASE HOLD PROPERTIES:

i.
Lease deed or sub-license or Agreement for Sale or Grant. In case there was any
subsequent transaction on the plot, Sale Deed and mutation certificate in favour of the
applicant, shall accompany the documents mentioned above.
ii.
Site Plan of the plot.
iii.
Non-encumbrance certificate in the prescribed Form L-2 & L-3 from the date of lease
deed to the date the application is made.
iv.
Permission to assign in the prescribed Form L-19-R, from the allotting authority
concerned.
v.
Proof of income.
vi.
Bank receipt for payment of fee as prescribed.
vii.
Three passport size photographs of applicant and of guarantor and attorney, if any.
viii.
Affidavit on prescribed form in cases of investment of above Rs.1 million, if on the

basis of declaration through Affidavit.
ix.
Medical certificate of the applicants or guarantor from the authorized medical

practitioner of SLIC, in case of investment of above Rs.3 million.
(ii). FREE HOLD PROPERTIES:

i.
Last jamabandi or certified copy of City Survey Extract with registered Sale Deed in
favor of the applicant (if the property was bought by him) and clear title to land. In
NWFP, Baluchistan and Gilgit where the sale was by way of Mutation, a certificate of
Assurance from the Collector or his nominee, together with clear title to land.
ii.
Non-encumbrance certificate in the prescribed form for the last 12 years.
iii.
Mutation in favor of the applicant.
iv.
Akse-Shajra/Site Plan.
Other documents required in lease hold as well as free hold lands are as follows:
i.
Original approved building plan with a spare copy.
ii.
Letter approving the building plan.
iii.
Income certificate of Government department/reputed organization on the letter head

showing details of income and deduction.
iv.
Payment receipt of proposal fee from the bank, at the prescribed rate.
v.
Computerized National Identity Card (CNIC).
If the title deeds and other documents presented for registration are found to be lacking, the
applicant should be asked to present the application for investment after completing full
documentation (the official receiving the application should not, however, refuse it without
valid reasons).
In case the income is through business, or agricultural land, Income Tax Return or proof of
income from Tehsildar shall be considered for calculation of repayment capacity. In case the
applicant offers a surety, the prescribed guarantors questionnaire Form provided in
application form shall be filled in with proof of income of the guarantor therein.
(B) HOUSE PURCHASE (ONLY FOR URBAN AREAS):
The facility of investment by the Corporation for purchase of finished house is available in
urban areas of District Headquarters. Considering maximum age of the house of A Class
construction as 45 years, the period of repayment of investment including agreed and
moratorium period shall be determined by deducting the age of house from 45 e.g., a house
aged 40 years shall be admissible for investment up to a maximum of 5 years. Investment
may be made at all coastal areas except for the front row of Sea View Township and
Darakhshan Villas, Clifton Karachi subject to submission of soundness Certificate from the
Pakistan Engineering Councils approved Engineer/Architect.
The application for investment for purchase of house should accompany the below
mentioned documents in addition to the one submitted in cases of investment for construction
of house:
i.
Sale Agreement between the Seller and Purchaser, drawn on stamp paper of existing
prescribed value duly attested by Oath Commissioner or Notary Public.
ii.
For the purpose of house purchase no transaction will be allowed between blood
relations such as father and son, brother and brother or sister and also, wife and
husband etc.
The age of the house and soundness of construction should be further verified by the
inspecting official of the Corporation by site inspection and report recorded in the case file.
(C). VALUATION OF HOUSE/FLAT:
The applicant may request HBFC in writing in Form HF-4, for valuation of the house/flat for
purchase investment which shall be done through one valuer of Pakistan Bank Association
(engaged by HBFC) in case of investment below Rs.2.50 million and through 2 valuers in
cases of investment of Rs.2.50 million and above. The applicant shall be responsible to pay
the cost of the valuation through pay order. In such cases, the District Manager shall issue a
letter to the Valuer.
(D) RE-VALUATION OF HOUSE/FLAT:
In case the applicant disagrees with the Collector Index Rate and if the,
a. Rate of plot pertaining to the particular locality has not been entered in the Revenue
Collector Index.
b. Only commercially constructed building rate of the locality are appearing in the
Revenue Collector Index.
c. And the applicant requests in Form HF-4/1 for re-valuation and submits pay order in
respect of fees of the valuer, in that case the property valuation be got done for the
second time for calculation of admissibility of investment.
INVESTMENT IN RURAL AREAS
The HBFC investment may be made for the construction of houses in Rural Areas which are
approved by Federal/Provincial Government.
The land on which the house is to be constructed should be in clear undisputed possession of
the applicant/vendor. The chain of title established for the last 12 years and there shall be no
restriction on the applicant/partners right to transfer ownership and assign that land together
with the structure there upon to the HBFC. The Corporations right to attach and sell the
house constructed thereon without intervention of the court should always be assured.
Investment for purchase of house shall not be approved in rural areas.
To verify the title to land to be assigned to the Corporation, the following documents be
called:
i.
Unbroken chain of the title for the last 15 years i.e. certified copy of extract of
Jamabandi records and Mutation certificates issued by Revenue Authority concerned.
ii.
Original building plan approved by an authorized officer of the District or Union

Council and where there is no District or Union Council, a building plan approved by
a licensed architect and countersigned by the Collector of the District or his nominee.
iii.
In case of joint holdings of land entry from Revenue records showing that the land on
which the house was to be constructed was duly partitioned and demarcated by AkseShajra, which is well distinguishable, and its boundaries defined by consent of all cosharers.
iv.
A certificate (Letter of Assurance) from District Collector or his nominee in Form

L-20.
v.
Computerized National Identity Card (CNIC).
vi.
The repayment capacity shall be calculated in the manner as explained in paragraph

6.1/b & but rental income shall not be added to increase the admissibility of
investment.
Vii
The maximum limit of HBFC investment shall not exceed Rs.100,000/= in each case.
All the other conditions as described in this Manual for HBFC Investment in Urban
Areas shall, however, remain unchanged in cases of Rural Areas.
POLICY FOR APPROVAL OF INVESTMENT:

(A) MAXIMUM INVESTMENT LIMIT:
URBAN AREA
Up to Rs.75,00,000/=
RURAL AREA
Up to Rs.1,50,000/=
LOCATION-WISE INVESTMENT LIMIT:

a
Up to
Rs.1,000,000/=
Up to
Rs.1,000,000/=
In all Urban areas including

Tehsil and small towns all
over Pakistan.
In District
(including
Headquarters
Cantonment
Up to
Rs.2,500,000/=
Up to
Rs.7,500,000/=
Rs.150,000/=
areas of Tehsils planned for

housing.
For urban areas of (i)
Faisalabad (ii) Multan,
Hyderabad (iv) Peshawar
(v) Abbottabad
(vi) Quetta.
In big cities i.e. Karachi,
Lahore & Islamabad/
Rawalpindi, the Committee
constituted for the purpose
shall recommend the city or
locality other than the above
which qualifies for
investment above Rs.1
million. The Committee
may also recommend
investment limit of an
adjacent locality in a
articular area, locality or a
case. The Managing
Director may allow
investment on such
recommendation of the
Committee.
In Rural areas approved by
the Federal/Provincial
Government.
The maximum repayment period for each individual investment shall be 20 years.
A partner, who has already constructed or purchased a house from HBFC investment
may be eligible for making an application for investment on partnership basis, for the
same or any other house provided the previous investment has been fully adjusted.
There is no limit of covered area of a housing unit for financing by the Corporation.
Income accruing through regular employment shall be substantiated by a certificate

from the employer as prescribed in Form G-7 or on letter-head of the
institution/organization.
Incomes through business or a profession, if below the taxable limit, shall be declared
through an affidavit by the applicant in Form HF-21 and accepted after verification by
the District Manager. In all such cases, the verification report shall be recorded by the
official concerned in Form HF-22.
Incomes falling under taxable limit shall be supported by the latest Income Tax
Return together with tax paid challan and Photostat copy of the same. The original
Income Tax Return duly acknowledged by Income Tax Department may be returned
after attesting the photo-stat.
Income accruing through rent of a house shall be proved by furnishing a copy of the
rent agreement together with the title to the property (to prove ownership). In case the
rent is through the same house for which investment from the Corporation is being
sought, for additional construction/unit only rent agreement shall be furnished. The
title documents in cases of the first nature may be returned after verification.
Incomes accruing through agricultural land shall be substantiated through certificates

of ownership issued by the Tehsildar or Mukhtiarkar concerned along with Deh
Form-VII.
If husband and wife have independent sources of income, the repayment capacity
may be calculated on their joint income. In such cases, guarantee of the wife or
husband, as the case may be, shall be obtained.
In cases of applicants who are depending upon their children/parents the income of
either may be taken in full for the purposes of repayment capacity. In cases where
parents/children are both earning members of the family, joint income of husband and
Wife or father/mother and children may be accepted. In such cases the age of the
oldest member of family shall be considered for repayment period of investment. All
earning members shall sign the letter of guarantee.
The applicants who are 55 years of age or above can also avail HBFC investment
subject to age limit of 60 years or 65 years on case to case basis for the purchase of
entire investment units with the approval of the Managing Director.
The period of repayment of investment shall be so fixed that all the units of the
Corporation is purchased by the partner before he/she attains the age of 60 years.
However the age, may be relaxed up to 65 years on case to case basis on the basis of
Report of Zonal Head which will be first examined by a Committee consisting of

ED(Ops) and GM(Ops). The Managing Director will then decide relaxation of age on
the recommendation of the committee.
In case of co-applicants, the age of all co-applicants, whose income is taken for
establishing the admissibility of investment amount may be considered but the period
of purchase of investment units shall be fixed on the basis of age of the oldest coapplicant having income.
In case the applicant/co-applicants are not within the age stipulated above or have no
income of their own, guarantor(s) having inheritable right in the house within the age
limit as stipulated above shall be required whose verifiable income(s) shall be
considered for calculating the admissible investment amount. However guarantee of
blood relations i.e., brother, sister & or their adult children, son-in-law, daughter-in
law etc., may also be accepted in deserving cases. The age of the oldest guarantor
shall be used for fixing the period for purchase of investment units. In case of joint
income of the applicants and the guarantor(s), only verifiable income of applicants
and the guarantor(s) having inheritable right in the house, shall be considered.
CALCULATION OF REPAYMENT CAPACITY:

The calculation of repayment capacity is governed as under:
1. The admissibility of investment in applications of up to Rs.500,000/= shall be @ 50%
of net monthly verifiable income if the total cost of the house is twice the amount of
investment applied for.
2. In all other cases the repayment installment shall be calculated at the ratio of 3:1
(33%).
3. Agriculture Income: Annual Assessed Income 12
The annual estimated income from land holdings beyond tax exempted limit of
agriculture income shall be supported by tax payment receipt. Income per acre in
respect of canal irrigated land shall be assessed by respective Zonal Head on the basis
of Income certificate obtained from Revenue Department. Income through poultry,
fish and cattle farms and orchid to be assessed through physical verification of site of
business, bank account, checking of annual turnover and on production of
ownership/rental agreement of property on which these farms are established.
INVESTMENT ON THE BASIS OF DECLARATION THROUGH
AFFIDAVIT:
Investment above Rs.1 million where cost of Plot as assessed by the valuers approved by
PBA (Pakistan Banking Association) is equal or more than the amount of investment applied
for, may be allowed on the basis of declaration through an affidavit, made by the
applicant/guarantor that he has sufficient monthly income to Purchase from the corporation
its investment units at the agreed value along with the payment of monthly rental income.
For Construction of house:
1. The plot is 400 sq.yds or above;

Or
2. The cost of plot assessed by the PBAs approved value is equal or more than the
amount applied for but not less than Rs. 1 Million and the estimated cost of
construction is Rs. 1.5 Million or above.
For Purchase of house/flat:
The forced Sale value (FSV) of house/flat is Rs.2, 500,000/- or above, as assessed by the
PBAs approved valuer (s).
Or
In case of house the plot size is 400 sq. yards or above
Or
In case of flat, the covered area of flat is 1500 sq.ft or above.
In all such cases, the concerned Zonal Head shall certify that he is satisfied that the
applicant/guarantor has, in his assessment, sufficient sources of income to meet the
liability of corporations investment.
RATE OF CONSTRUCTION:
The rates of constructions as prescribed from time to time be applied based on the Circular
issued.
The rates of construction shall be revised periodically on the recommendations of a
Committee constituted by the Managing Director, consisting of ED(Operations) and
ED(Finance). The Committee will decide the frequency. Such revision will be made on the
assessment/ recommendation of a panel of valuers/architects to be engaged by HBFC.
ASSESSMENT OF COST OF HOUSE/FLAT:
The cost of the house/flat shall be assessed on the basis of the cost of land, undivided share
of the flat in the gross cost of land of the project as per Collector Index or where Collector
Index is not available, the market value of the land obtained through sample survey or
through valuation by approved valurers of PBA. If the applicant disagrees with the rates of
Collector Index and approved by the Head Office plus the cost of the construction arrived at
by multiplying the covered area of the house/flat with the applicable rate of cost of
construction determined by the Corporation from time to time.
If the applicant who is constructing a smaller unit on a big size of plot, the covered area of
housing unit shall be taken twice the covered area of site for determining cost of land.
MAXIMUM INVESTMENT:
Subject to adequacy of monthly income of the applicant(s)/guarantor(s) the admissibility of
maximum investment that the Corporation may make shall be in the debt equity ratio of
80:20 subject to the location wise maximum limit.
REGISTRATION OF APPLICATION:
When an application is submitted by the applicant in the District Office of HBFC, the official
In-charge of receipt of applications shall check that all the columns of application form have
been correctly filled and the required set of documents accompanies the same. Appropriate
data is available to the District Manager when he interviews the applicant.
The District Manager shall, thereafter interview the applicant after satisfying himself that the
preparatory work has been done correctly, by the official in-charge of receipt of application.
The purpose of personal interview of the applicant is to determine whether the applicant is
sufficiently credit worthy to receive the HBFC investment.
The District Officer shall, therefore, go into the applicants circumstances i.e., financial
strength & liabilities, and the size of the family. If there is a guarantor he shall also be
interviewed in the same manner.
The District Officer shall always keep in mind that the Collateral Security (property to be
assigned against HBFC investment) is only of a subsidiary relevance because a forced
liquidation in case of default in future because of the unsound financial position of the
applicant, shall be a lengthy and unrewarding exercise for the Corporation. As such, it is the
foremost and personal duty of the District Manager, to make selection of the client after very
carefully examining the applicants and his guarantors credit worthiness.
In course of interview some of the relevant questions to probe about the credit worthiness of
the applicant may be:
a. The job of the applicant, length of service.
b. Is the applicant in the habit of changing his jobs often (as it will definitely effect his
future repayment of HBFC investment).
c. Has he any other loan liabilities (through any Bank or private source).
d. Is the house to be constructed will be for self occupation or partly for rent purposes
etc.
e. Are there other family members earning and providing financial support.
In case the documents initially appear in order and the D.M. concerned is satisfied about the
credit worthiness of the applicant and guarantor, if any, he will advise the dealing officials to
register the case in Form HF-2.
The dealing official shall then attest the photocopies of the documents if he is authorized in
writing to do so, otherwise authorized official shall attest the photocopies.
After attestation of the documents the dealing official shall retain the application form,
attested photocopies of documents, Computerized National Identity Card (CNIC) etc. along
with original proof of income and Bank Memo receipt of application fee and return all the
original documents to the applicant. He will also issue to the applicant the computergenerated receipt of the above documents, on Form HF-3, bearing computer generated
account number. Thereafter, the details of case and documents submitted shall be entered on
computer and a case of the applicant under the computer generated account number shall be
opened with the following documents/papers.
Proposal Form HF-1.
Photocopies of title documents.
Any other required/necessary paper and office note by the dealing assistant/officer.
PROCESSING OF INVESTMENT PROPOSALS:
After the receipt of the application, the case file, with photo-stat copies of documents under
the HF computer number allocated, shall be forwarded by the District Manager concerned to
the Manager Law/Legal Adviser for scrutiny of title documents, if it is a free hold property
case. In cases of direct lease where no subsequent sale or transfer is involved and the lease
deed is in a form already scrutinized by the Corporation, there shall be no need for any legal
scrutiny.
After title to land/house has been declared clear in writing by the Law Officer/Legal
Advisor/Advocate on Panel (as the case may be) and income of the applicant(s)/guarantor(s)
has been verified, the processing for the approval of investment shall be computer-based and
audit proposal shall be generated by Computer.
Credit Information Bureaus (CIB) report shall be obtained from State Bank of Pakistan,
before approval of investment of Rs.0.5 million and above.
For investment of above Rs.3 million, medical certificate of the applicant(s) or guarantor(s) if
any/all of them from an authorised medical practitioner of SLIC shall invariably, be required
at the time of submission of application. If the applicant/guarantor is serving abroad the same
certificate shall be required on prescribed format of SLIC from a Government hospital duly
attested by the Pakistan Embassy concerned. If the sum assured for an applicant is more than
three million, the insurance cover shall commence only if SLIC agrees to provide the
insurance cover after medical underwriting of the applicant. The medical examination fee
will be borne by the applicant in addition to
insurance premium.
Standard type of leases as in case of K.D.A, C.D.A, L.D.A, Cantonment Board, Improvement
Trust, Satellite Towns, Housing Societies and Agencies shall be examined for valid title only
once. The title deeds in free hold property cases shall be scrutinized in each individual case
by the Manager Law/Legal Adviser to clear the title. In cases of Field/District Offices such
scrutiny shall be done by the part time legal adviser.
If the scrutiny reveals deficiency of any kind in the documents or information or the
particulars, the applicant shall be advised in Form HF-5 to furnish the requisite documents or
information within the time limit to be specified by the Manager/District Manager.
If the documents are not completed within 3 months, a reminder, in HF-6, may be sent to the
applicant and in case there is no response within a week the case should be filed and the
decision conveyed to the applicant, in Form HF-6A. All such cases should be noted in a
register to be maintained in Form HF-7.
In case the title to land is found defective or the applicants declaration in respect of his
income, stage of construction etc., is found incorrect the application should be rejected and
noted in the rejected cases register to be maintained by each District Office in Form HF-8.
The processing of the application shall be computer based. After the applicants title to
property is declared in order by Manager Law, Zonal Offices and Legal Adviser at Field
Offices, the dealing assistant concerned shall generate the audit proposal through computer
containing the following details:
a. Total cost of construction.
b. Rental income at the prescribed rates.
c. Share in rental income, and
d. Repaying capacity of the applicant based on the income certificate/verification report
etc.
After the audit proposal has been generated by computer, the same shall be checked, placed
in the account file and forwarded to the District Manager for sending it to concerned Audit
Branch under his seal and signature for audit.
APPROVAL OF INVESTMENT:
For approval of investment a Credit Committee at Zonal, Regional and Head Office level has
been formed which shall approve investment cases as per delegated powers in the following
manner:
1. ZONAL CREDIT COMMITTEE:
a. If the Committee is headed by below the rank of General Manager:
Members:
Powers
Zonal Head (CM)/ Manager
Up to Rs.500, 000/=
Manager/In charge (Admin),

Manager/In charge (Recovery)
Quorum:
Two out of three (including Zonal Manager)
Frequency:
Once in a week.
b. If the Committee is Headed by a General Manager
Members :
Powers
Zonal Head (General Manager )
Up to Rs.1000,000/=
Manager/In charge (Admin),

Manager/In charge (Recovery)
Quorum:
Two out of three (including General Manager)
Frequency:
Once in a week.
c. REGIONAL CREDIT COMMITTEE REGION-A
Members:
Powers
Regional Director, Region-A
Above Rs.500, 000/= and up to Rs.2500, 000/=
Zonal Head, Abottabad

Zonal Head, Islamabad
Quorum:
Two out of three (including Regional Director)
Frequency:
Once in a week.
d. REGIONAL CREDIT COMMITTEE REGION-B:
Members:
Powers
Regional Director, Region-B
above Rs.500, 000/= and up to Rs.2500, 000/=
Zonal Head, Lahore

Zonal Head, Faisalabad
Quorum:
Two out of three (including Regional Director)
Frequency:
Once in a week.
e. CREDIT COMMITTEE, HEAD OFFICE, KARACHI:
Executive Director (HR&A)- Chairman
Powers
Executive Director (Operations)-Member
AboveRs.500, 000/=and up to Rs.7500,

000
Executive Director (Recovery) -Member

Executive Director (SAM)-Member
Executive Director (Finance)-Member
Manager (Operations) - Secretary
Quorum:
Three out of five (including Chairman)
Frequency:
Once in a week.
In cases where the investment is more than the competency of Zonal Credit Committee as
mentioned above, the said Credit Committee in the southern Region (via Zonal Offices,
Karachi, HPZ, Hyderabad, Sukkur & Quetta), shall recommend the investment proposals to
Credit Committee, Head Office, Karachi, whereas the Zonal Committees in Northern
Regions shall recommend the proposals to their respective Regional Committees.
Where the investment amount is above Rs.2.5 million, the Zonal Committees of Region A
& B shall directly recommend the cases to Credit Committee, Head Office, Karachi.
However, such cases including cases of bulk/project financing should be examined other by
the Risk Management Division and commented upon in the context of managing the credit &
the overall risks before the proposal is considered by the above committee.
Before approval of investment extra vigilance should be exercised by the DMs and Zonal
Heads to ensure that documentation and procedural formalities are complete.
Before forwarding the case for approval of investment by the respective Zonal/Regional/
Head Office Credit Committee, date-wise account of the processing of the case should be
prepared by the District Offices in Form HF-10 and placed in the file duly signed by the
District Manager concerned. The application shall be disposed of/put up for approval within
stipulated time fixed by the Head Office.
At every stage, the movement of the files should be recorded in journey of file Performa by
the dealing assistants concerned, as well as, in the movement register maintained by him/her
personally and by the official in charge of the diary and dispatch of the files in the relevant
registers to keep track of the files.
The District Manager of each District should maintain category-wise registers in Form HF-12
to bifurcate the investments approved under various categories by the respective
Zonal/Regional and Heads Office Credit Committee for information and record.
A computerized statement of the investment applications received, approved, filed, rejected

and pending, investment disbursed and recovered should be prepared by each District Office
in Form HF-14 & HF-15 and sent to the Zonal Offices on the 1st day of the next following
month for compilation of the data. The Zonal Offices should, in turn, send a duly compiled
statement in the same Form to the Operations Division, Head Office Karachi by the 5th day
of the next following month for further necessary action.
The District Offices should also send category-wise statement of investments approved, in
Form HF-11, to the respective Branch of Zonal Offices for compilation of the required
information by the latter.
ISSUANCE OF ACCEPTANCE LETTER:
A, computer generated Acceptance Letter containing all conditions imposed by audit and
others shall be issued. The acceptance letter shall be issued under the official stamp and
signature of District Manager or any authorized officer in writing on this behalf in Form HF13.
The computer shall also generate the payment schedule for the total investment period. This
schedule shall be based on regular payment of monthly rent and purchase of units on due
dates and payment of monthly insurance premium after the expiry of moratorium period.
This payment schedule shall be invariably enclosed with the Acceptance Letter sent/delivered
to the applicant.
A record of all such investment applications which are not finalized during a month and
pending on the 1st day of the next following month should be kept by each District Office in
a separate register. A list of all such cases, with reason for its pendency in the remarks
column thereof, shall be sent along with the statement in Form HF-14 by each District Office
to the Zonal Office concerned.
The Investment Branch of each Zonal Office should compile the above information and send
statements in Forms HF-12, HF-14 and HF-15 to the Operations Division, Head Office for
further compilation of statements for information of the Managing Director and record.
A Flow Chart representing the above steps is attached at Attachment-A.
After approval of investment and issuance letter of acceptance, the file shall be sent to the
inspecting officer for verification of stage of construction at site.
If the first instalment of investment approved is not drawn within the validity period of
acceptance letter, a reminder in HF-17 shall be sent to the partner and in case of no response,
the approval should be withdrawn by the District Manager concerned and the decision
conveyed to the applicant. The documents of title (photo-copies) in such cases shall be
returned to the applicant or his duly authorized agents against proper receipt. Such
withdrawals should be noted in Investment Cancellation Register in Form HF-9.
The period of approval of investment may be extended by the (Zonal Head/GM or D.M. in
District Office) by a further period of 3 months.
INSPECTION OF SITE AND RELEASE OF INVESTMENT:
The release of investment installment shall be concomitant with the stage of construction at
site.
The applicants shall apply in Engineering Form HF-37, for the release of investment
installment. Physical inspection of the site should be conducted by the District Manager and
the stage of construction recorded towards the noting side of the HF file. An inspection report
in, duplicate should also be prepared in each case in Form HF-38 under the signature of the
inspecting official.
In cases of investment for construction of new houses, physical inspection of the sites should
be conducted at the time of release of each installment. In cases of house purchase, however,
such inspection should be only before the release of investment.
The officer inspecting the site shall take three photographs of the site on which house has
been constructed or to be constructed i.e. one photograph of the exact site of the house,
second covering as well the house/site of right dimension and third the left dimension. The
officer inspecting the site shall paste the photographs on white legal size paper (foolscap) and
affix his official stamp and signature in such a way that it partly appears on each photograph
and the rest on the paper. The account number & date of inspection shall be recorded on top
of the page. One copy of the set of photographs shall
be placed in account file and the other in the cover of document in the Strong Room. The
print of photos tend to diminish after few years, hence assuring safekeeping all the
photographs shall be got laminated before placing in account file and documents cover.
Note: Camera shall be provided to each District Office for the purpose of taking photographs
of the sites, whereas scanners shall be provided to the Zones for storing the photos and
inspection reports. Software shall be developed at each Zone for this purpose.
In cases of investment for house purchase, the District Manager/GM or his authorized
nominee shall inspect the house and draw completion report in Engineering Form HF-40.
The valuation certificate of the house, its life and soundness of construction furnished in
Engineering Form HF-41 should also be checked to see if it is in order.
In order to identify the plot and avoid any misunderstanding regarding the same, the
inspecting official should check up the boundaries of the plot and ensure that the same tally
with the one shown in the approved building plan and lease deed/sale deed/site plan.
Apart from the above it should also be ensured by the inspecting officials that the
construction is being carried out in accordance with the approved plan, is sound and the
security of the Corporations investment is in no way impaired.
In case the investment is not adequate for the release of installment applied for, and the
construction at site has not reached the required stage, the partner should be asked in
Engineering Form HF-42 to make good the shortage and apply for re-inspection of site.
In all cases of first and subsequent cheques, the DM shall inspect the site. In cases of final
cheque and house purchase, however, the Zonal/General Manager or his nominee shall
conduct inspection in rotation. In order to keep a check, on the reports of the District
Manager the ZM/GM or his nominee shall re-inspect the sites on percentage basis while
conducting inspection for final cheques.
In order to keep a constant watch on the security of HBFC finances the ZM/GM should reinspect the sites in at least 10% cases of the Zone under their control and submit report in
Form HF-43 to the Executive Director (Operations) for information and record.
The General Managers should also conduct super inspection in 5% cases in their respective
Zone and report in Form HF-43 to the Managing Director through Executive Director,
Operations the results of their inspection.
After the inspection report is recorded and the investment found in order, the file should be
sent back to the concerned official for taking further necessary action for the payment of
installment.
The order for issue of cheque shall be recorded in the file by the District Manager under a
rubber stamp.
A monthly statement of the inspections conducted by the ZM/GM and District Manager shall
be compiled in Form HF-43 to remain on record of the Zonal Office for future reference, if
any.
RELEASE OF INVESTMENT INSTALMENTS:
The investment installments shall be released as per the stages of construction set out below.
NO. OF
INST.
1st
a. GROUND FLOOR:
RATE
30%
2nd
30%
3rd
30%
4th
10%
NO. OF
INST.
1st
b. FIRST FLOOR:
RATE
30%
2nd
30%
3rd
30%
4th
10%
STAGE
OF
CONSTRUCTION
After completion of plinth
with DPC.
After
completion
of
structure (with block/brick
masonry)
After completion of internal
and external plaster, fixation
of
Frames of doors and
windows and flooring of all
rooms.
After completion of flooring
of all bath rooms, fittings of
shutters of doors/windows,
completion of sanitary
fittings,
Drainage work and electric
fittings.
STAGE OF
CONSTRUCTION
After completion of lintel
level of first floor.
After
completion
of
masonry)
of frames of doors and
rooms.
fittings,
drainage work and electric
fittings.
c. GROUND AND FIRST FLOOR:
NO. OF
INST.
1st
RATE
2nd
30%
3rd
30%
4th
10%
30%
STAGE OF
CONSTRUCTION
After
completion
of
structure on ground and first
floor up to
Lintel level.
After completion of first
floor
structure
with
block/brick
masonry of ground & 1st
floor.
rooms.
of all bath rooms, fitting of
fittings,
fittings
FIRST & SECOND FLOOR

NO. OF
INST.
1st
RATE
2nd
30%
3rd
30%
30%
STAGE
OF
CONSTRUCTION
After completion of first
floor structure and second
floor up to lintel level.
After
completion
of
structure of second floor
(with block/brick masonry
work of 1st & 2nd floors).
4th
NO. OF
INST.
1st
2nd
10%
d. GROUND FIRST AND SECOND FLOOR:

RATE
STAGE
OF
CONSTRUCTION
30%
After structure of ground
and first floor up to lintel.
30%
After
completion
of
structure of all the floors
and block masonry.
3rd
30%
4th
10%
NO. OF
INST.

rooms.
shutters of doors/windows
e. FOR SECOND FLOOR ONLY:

RATE
1st
30%
2nd
30%
3rd
30%
4th
10%
After
fixation
of
doors/windows
frames,
completion
of
internal/external plaster and
floor of all rooms.
shutters
and
doors,
windows, sanitary fittings,
drainage work
and electric fittings.
STAGE
CONSTRUCTION
OF
After completion of lintel

level of second floor.
After
completion
of
masonry).
rooms.
fittings,
fittings.
DISBURSEMENT FIRST TRANCHE:

Before making disbursement of first tranche the dealing official, the cheque signatories and
the District Manager will ensure that:
1) All original documents have been submitted by the applicant(s) and final computer
generated receipt of original documents on Form HF-3(a) has been issued to the
applicant and copy thereof duly signed by the applicant is placed in the account file.
2) All the post sanction formalities have been fulfilled and audit observations complied
with.
3) Site inspection report and photographs of the site are available in the file and stage of
construction qualifies for the release of first tranche.
4) Undertaking by the applicant(s) and letter of guarantee in case of guarantor has been
received in Form HF-18 & HF-18-A respectively.
5) Paid receipt of insurance premium for two years in advance together with undertaking
of partner(s)/guarantor(s) for Group Life Insurance has been received - specimen in
Form HF-23 & HF-24.
6) Promissory note - in Form HF-25 equal to the amount of first tranche bearing stamp
of prescribed value and letter of continuity - in Form HF-26 have been received from
the applicant(s)/guarantor(s) and found in order.
7) It is compulsory in this investment scheme that repayment shall be made through

advance post dated cheques of 36 monthly instalments and one post-dated cheque for
the entire outstanding balance in lump sum for the remaining period whereas the 37th
cheque for the entire outstanding balance for the remaining period shall not be
presented for encashment and returned back on receipt of 37 cheques for the next
cycle. It should therefore, be ensured that advance cheques for the said period of
investment (excluding agreed period) drawn on the bank of the applicant with
instructions for payment has been received in advance (as per Guideline & Procedure
in Form HF-27. For illiterate partners and those having verbatim signature,
arrangement has already been made with the bank and therefore, it is compulsory for
such partners to open their personal accounts in any designated branch of bank
authorized for collection.
8) Deed of Assignment and Partnership has been received and bears the prescribed
adhesive stamp and the effect has been duly recorded on noting side of the file. The
blank columns of the Deed of Assignment and Partnership shall be filled.
9) Cheque issue order has been passed by the competent authority, under his official
seal, full signatures, employee number and date.
After having checked and found the above complete, the disbursement voucher shall be
generated through the computer by the dealing official concerned in accordance with the
Users Manual provided by Information Technology Department, Head Office, Karachi and
simultaneously, a cover of documents shall be opened and all original documents including
promissory note, photographs of site and letter of continuity letter shall be placed therein.
The documents will be kept in safe custody with the District Manager till delivery of cheque
of first tranche.
On the basis of computer generated voucher, Account payee cheque shall be prepared in
favor of partner(s) and put up for signature to the authorized first and second signatories.
The cheque of first tranche shall be delivered to the partner or his duly authorized attorney
(accepted by the Corporation) before the Sub Registrar concerned at the time of registration
of Deed of Assignment and Partnership. The photocopy of the receipt received from Sub
Registrars office is placed in the account file and effect be noted on noting side.
The official holding Power of Attorney on behalf of the Corporation for executing the Deed
of Assignment and Partnership shall continue to maintain a register in Form L6-A to record
the date of the assignment deed and the sale deed etc. (in case of house purchase) together
with date of collection of said documents from Sub Registrars office concerned.
The register shall be put up to District Manager on every Saturday with the number of
assignment deeds collected and those outstanding showing reasons for non-collection in the
remarks column. Within 5 days after collection of Deed of Assignment and Partnership, the
same shall be sent / delivered to the Law Branch of the concerned Zonal Office against
proper receipt, while the original documents cover shall be sent - in Form HF-28 for placing
it in Strong Room. However, a photocopy of assignment deed shall be placed in investment
file.
The entry of assignment, where applicable, shall continue to be made in the record of
right/revenue record. Entry to this effect shall be made on the noting side of account file and
certificate received for such entry shall be placed therein.
The delivery of cover shall not be delayed for want of assignment deed which shall be sent
when received on due date as per para 17.5 above. Law Branch of Zonal Office shall retain
the first copy of receipt thereof and return the second copy duly signed, stamped with seal.
The District Manager shall ensure that all the documents required to be placed in the cover
have been detached from the account file, placed in the relevant documents cover and the
same has been sent/delivered to the Law Branch of the Zonal Office concerned for placing in
the Strong Room as per Legal procedure.
DISBURSEMENT-SECOND, THIRD & FINAL TRANCHE:

Before release of second, third & final tranche it should be ensured that:
1) Site inspection report and a set of three photographs of present stage of construction
have been submitted by the concerned official and the same are placed on
correspondence side of the account file and also recorded on noting page.
2) According to site inspection report stage of construction qualifies for the release of
second/third & final tranche.
3) Promissory note equal to the amount of second, third & final tranche together with
letter of continuity has been received, found in order and recorded on noting side.
4) In case of release of final tranche it should be ensured that registered Deed of
Assignment and Partnership if due for delivery, has been collected from the
concerned Sub Registrar.
Entry of assignment of house/flat has been made in the record of right/revenue record,
certificate to this effect has been received, placed in the account file and also recorded on
noting side thereof. As a matter of abundant precaution it should also be ensured that all audit
conditions and post sanction formalities have been met/fulfilled.
Cheque issue order has been issued by the competent authority under his official seal, full
signatures, employee number and date.
After having checked and found the above complete, the disbursement voucher shall be
generated through computer by the official concerned. On the basis of computer generated
voucher, Account payee cheque shall be prepared in favor of the partner and put up for
signatures of authorized first and second signatories.
The A/c Payee cheque of second, third & final tranches shall be delivered to the partner at the
concerned District Office against proper receipt bearing revenue stamp of prescribed value.
After delivery of final tranche, registered Deed of Assignment and Partnership shall be
sent/delivered to law Branch of concerned Zonal Office for placing it in the relevant
document cover and receipt thereof be obtained in writing and shall be recorded on the
noting side.
As the final Installment shall be released after flooring, fixation of shutters of doors and
windows including kitchen & bathroom and after electric fittings, a completion report shall
simultaneously be drawn at this stage by the District Manager, if the work is complete at site.
If the partner does not draw subsequent installment(s) within the agreed period, he should be
reminded in Form HF-46 to apply for the same immediately. In case of non-response the site
be inspected by the D.M. and if the construction is found complete the investment shall be
reduced to the extent of amount disbursed. Consequently audit proposal and approval shall be
revised and revised acceptance letter be sent to the partner.
The Corporation may also reduce the investment without assigning any reason. The partner
may also request the Corporation to reduce the investment if he has completed the building
from his own resources after drawl of part of the investment.
All payments in respect of investment for construction of houses/flats are made by cross
cheques drawn in favor of the applicant or the person who holds a duly registered power of
attorney on behalf of the applicant. In cases of house purchase investment, an order cheque
may be issued.
All cheques of investment for construction are specifically crossed with the words Account
Payee Only except cheques which are intended for the payment of departmental house
building advance in cases of Government servants or for the payment of balance price of land
if a part of the investment is advanced for this purpose. The latter type of cheques are to be
endorsed by the partners in favor of the Government or the allotting authority and are to be
handed over to the representative of the department concerned, duly authorized to collect the
cheques, at the time of registration of the Deed of Assignment and Partnership. Such cheques
should be crossed but may not be endorsed Account Payee Only.
The investment cheques of 1st installment are delivered before the registration officer
concerned at the time of registration of Assignment Deed. As the fact of payment of 1 st
cheque is recorded in the Assignment Deed and the payment is made in the presence of the
Registrar, no other receipt of payment is necessary from the partner.
The cheques for second and subsequent instalments of investment are made to the partner at
the offices of the Corporation against stamped receipt signed by the partner or his duly
constituted attorney, holding power of attorney under a registered document in the prescribed
form L-4. Moreover, such cheques can also be deposited/ sent to the bank account of the
partner if so desired by the latter and full information regarding bank account number etc.,
along with a written request and pre-signed receipt is furnished to the Corporation, in this
behalf.
1.2.2. SHANDAR GHAR SCHEME:
The Management of HBFC has taken drastic steps to help people add value to their existing
abodes at a reasonable cost. These efforts are targeted at fulfilling individual needs and
expectations. HBFC is actively aiming at playing a remarkable role as a socially responsible
and commercially sustainable housing finance institution.
Hence HBFCL has devised a scheme by the name of Shandar Ghar (home Improvement
Scheme), which is purported to support the borrowers to purchase materials, fixtures and
fittings for the renovation of their houses.
Its salient features are as under:
1. The maximum financing support HBFCL offers is up to Rs.2,500,000.
2. The loan can be repaid over a maximum period of 10 years in affordable installments.
3. The applicable Murabaha profit is 12%. Thus the overall cost charged to each
borrower will be considerably less as compared to other financing institutions.
4. This is a Sharia compliant scheme based on Murabaha mode of financing.
5. It offers hassle free investment & repayment facility.
6. Early repayment facility is available.
SHANDAR GHAR SCHEME (DETAIL)
HBFC investment is available for home improvement also under its Murabaha financing
scheme named Shandar Ghar.
The criteria for obtaining the investment under the Shandar Ghar Scheme, is a clear title to
the property/house and a stable income to repay the HBFC investment.
ORGANIZATION:
The Scheme is operative in all the Zonal Offices through its District Office. The District
Office will consist of the following officers and staff:
i.
District Manager.
ii.
Customer Relation Officer (CRO). Under this category of officer, number of

incumbent shall depend on the load of work.
iii.
Dispatch Rider.
iv.
Naib Qasid.
Home improvement investment is available for the following items of work:
Structural repairs including walls, filling of cracks;
Water proofing and roofing including replacement of roof and Polyurethanes (heat
resistant).
Flooring and tiling.
Grills, doors and windows, additions/replacement/improvement.
Plumbing and bathroom fixtures additions/replacement/improvement.
Construction or repair of underground/overhead water tanks, water boring.
Electrical works and installation including security devices.
Extension/addition of rooms in existing unit subject to approval of building

authority.
Improvement/replacement of fixed kitchen fixtures; and
Interior/Exterior Paint.
Addition of a room to the existing construction.
ESTIMATION OF INVESTMENT FOR FINANCING:

The admissibility of investment in this scheme shall be based on the forced sale value of the
house/flat as assessed by the valuer + bill of quantity equal to incremental value i.e.
renovation cost of the house, as assessed by the valuer.
The minimum limit of investment shall be Rs.25,000/= to a maximum of Rs.0.5 million.
The valuers report (to be drawn in two parts) as per below:
Forced sale value of the property plus incremental value of the house as assessed by
the Valuer.
Item-wise cost estimate report.
HBFC will finance upto 50% of the incremental value of the property subject to the
maximum investment limit & adequacy of income.
In case of existing partners, the investment payable to HBFC shall be deducted from the
forced sale value of the property assessed by the engaged Valuer. The partner, if any, shall
clear the default, before the case is processed for approval.
SECURITY OF INVESTMENT:
The financing shall be secured by way of a equitable mortgage of the house, or additional
collateral of moveable or immovable property offered by the applicant, at the discretion of
HBFC.
PROCESSING OF APPLICATION:
The CRO shall scrutinize the case thoroughly before preparing the audit proposal on
following counts:
i.
Title to land declared clear by law.
ii.
Income verification report of applicant/guarantor appears in the file.
iii.
Valuation report is available.
iv.
For existing partners the account position is up-to-date.
In fresh cases/application the title Manager Law/Advocate shall examine documents legally
on panel.
Valuation of the house shall be assessed and the approved Valuer/Architect engaged by
HBFC, at the cost of the applicant, shall examine cost estimates.
The applicant shall be responsible for payment of stamp duty, valuers fees, all other charges
and expenses incurred on processing and execution of document.
After preparing the audit proposal, the file shall be sent to Audit Division for necessary audit.
After the file is received duly cleared by the audit, it shall be put up to the respective Credit
Committee for approval of investment.
While approving the investment, the file should also re-check thoroughly for any audit
remarks, documents clearance, income verification and repaying capacity calculation
etc.before sanctioning of investment.
After the approval of investment, the account number of the case shall be recorded on the
cover of document and letter of approval issued to the partner through courier.
1.2.3. Finance Facility for Small Builders:
A large number of Small Builders are engaged throughout the country in constructing and
selling individual houses on small scale. In order to encourage them, HBFCL has launched
"Finance Facility for Small Builders" which will help Overcome the shortage of houses in
the country and would simultaneously be instrumental in boosting up national economy as a

whole.
Chapter 2: OVERVIEW OF THE ORGANIZATION

2.1. BRIEF HISTORY OF THE ORGANIZATION
House Building Finance Corporation, the oldest housing finance institute of Pakistan, was
established as a statutory federal body in 1952 with the objective of providing financial
assistance for the construction of houses. Ensuingly HBFCs scope also branched out into
diverse dominions like purchase, repair and renovation of houses. Later on HBFCs mission
was evermore reformed to specifically target the needs of the low and middle income strata
of the country by providing Small and Medium Housing (SMH) Solutions, hence
successfully providing skilled and user friendly service at affordable costs. Over the years
HBFCs operation has flourished and is now spread over a network of 3 Regional, 12 Zonal
and 58 District Offices, 4 camp offices and 25 Representative Offices/Service Agents and 21
more such offices will be opened very soon. HBFC today has its presence in 80 cities and
towns all over Pakistan and is targeting to expand its business to 150 cities and towns.
HBFCs Head office is situated in Finance & Trade Centre Karachi.
HBFCs paid up capital is Rs. 3.50 Billion (53.7 percent for Federal Government and Rs.
46.43 percent for State Bank of Pakistan). The general directive and administration of the
corporation and its affairs is entrusted to a Board of Directors and the Managing Director,
who together with the assistance of Board Committee manages and controls the affairs of the
corporation.
2.1.1. HBFC Ltd.

HBFC Ltd. which was on its way to become a corporate organization has finally been
incorporated as HBFC Ltd. under Banking Companies Ordinance 1984, since July, 2007.
Henceforth, Part privatization by offering share holding to firms like IFC, ADB and IDB etc
is also a part of the agenda. HBFC Ltd. is also intent upon the securitization of mortgages
and establishment of Real Estate Investment Trusts (REITs) and Mortgage Bonds (MBs).
To meet the upcoming corporate challenges and to cater to the growing needs of the
corporation, HBFCL has taken certain drastic steps. It is enhancing its operational efficiency
through preparation and implementation of manuals, computerization, human resource

development and elimination of ineptness and corruption through internal controls and
redesigned reward structure. In the near future HBFC plans on expanding its outreach
representative offices from 80 to 150 towns and cities. HBFC is trying to augment its market
image by having pro-active, efficient and customer friendly policies.
2.2.
NATURE OF THE ORGANIZATION
HBFC main aim has remained to provide Sharia compliant financing to its consumer market.
HBFC financing schemes have also evolved over its 55 years of establishment to acquiesce
with this aspiration. These schemes have propelled HBFC towards the fulfillment of its
Business Focus which is to accommodate the low and middle income groups housing needs.
Thus HBFC offers a wide range of products for the ministration of its consumers. House
Construction Financing, financing for purchase of house/flat, renovation of House (Home
improvement financing), loan transfer and Balance transfer fund is the range offered by this
organization.
2.3.
BUSINESS VOLUME
Since inception to date, the corporation has financed over one and half million units for Rs.
41.437 billions, provided housing finance facility to 28 corporate clients for Rs. 1.7 million,
made recoveries of Rs. 51.368 billions and has outstanding portfolio of Rs. 19.6 billion.
Disbursed Rs. 600 millions flood loans to over Rs 0.4 million affected families granted
remissions to Widows, Orphans and retired Government Servant of Rs. 1.23 billion on
Federal Governments directive. Its Average annual disbursements and recoveries are around
Rs. 2-1/2 to 3 billions. It has contributed Rs. 17.149 billion towards National Exchequer in
shape of payment of interest, profit and income tax to Government and State Bank of
Pakistan. In 1984-85, the corporation launched Faisal Town Housing Project, at Lahore
consisting of 312 bungalows and also constructed 19-storeyed Office Building named
HBFC House Islamabad. HBFC owns prestigious Office Buildings/Premises at Karachi,
Lahore and Hyderabad. It also owns valuable plots at Lahore, Islamabad, Hayatabad
(Peshawar) and Hyderabad. Arrangements are afoot to construct on these plots modern
commercial-cum-residential buildings, estimated to cost over Rs. one billion. Design concept
of 12-16 storeyed Flat Project consisting of 208 apartments at Lahore and 12-storeyed office
building at Islamabad conceptualized by M/S NESPAK stands approved by HBFC Board of
Directors.
HBFCs paid up capital is Rs. 3.50 Billion (53.7 percent for Federal Government and Rs.
46.43 percent for State Bank of Pakistan). The general directive and administration of the
corporation and its affairs is entrusted to a Board of Directors and the Managing Director,
who together with the assistance of Board Committee manages and controls the affairs of the
corporation.
PRODUCT LINES
2.4.
At present HBFCL have following housing finance schemes in operation:

1. GHAR AASAN SCHEME based on diminishing Musharka, a Shariah compliant
scheme under which credit for construction and purchase of houses is allowed.
2. SHANDAR GHAR SCHEME under which credit for repairs, renovation/upgradation is available.
3. LOAN FACILITY FOR SMALL BUILDER for construction and sale of small
houses/flats
4. GHAR AASAN SCHEME (FLEXI) for construction, purchase and renovation for
houses/flats
COMPETITORS
2.5.
2.5.1. Housing Creditors
House Building Finance Corporation Building Finance Corporation
Public
The biggest public sector organization providing housing finance since 1952 across the
country including Northern areas and Azad Kashmir.
Housing Finance Companies (HFCs) (Private Sector).

Out of 7 HFCs permitted to start business, only 1 has survived with a mortgage portfolio of
merely Rs.300 million i.e. IHFL.
Commercial Banks
Since March 2003, housing finance market has experienced a turn around. As many as 24
banks are active in providing housing finance.
As I have mentioned that 24 commercial banks are active in house finance but the most
dangerous competitors to HBFC are two, which is competing HBFC as for as the products
are concerned.
2.5.2. NATIONAL BANK
2.5.3. ALFALAH BANK.
EXPLANATION.
2.5.2. NATIONAL BANK

Product Items
Home Purchase
Home Construction
Home Renovation
Purchase of Land + Construction
Balance Transfer Facility (BTF)
Home Purchase (House or Apartment)
Financing Amount
Financing Period
Debt to Equity
Upto 35 Million
3 to 20 Years
85:15 (Maximum)
Home Construction
Financing Amount
Financing Period
Debt to Equity
Upto 35 Million
3 to 20 Years
85:15 (Maximum)
Home Construction * - Product Detail

Financing Amount
Financing Period
Debt to Equity
Upto 35 Million
3 to 20 Years
85:15 (Maximum)
Home Renovation
Financing Amount
Financing Period
Debt to Equity
Upto 15 Million
3 to 15 Years
80:20 (Maximum)
Purchase of Land and for Construction thereon

Financing Amount
Financing Period
Debt to Equity
Upto 35 Million
3 to 20 Years
80:20 (Maximum)
Re-Financing (Balance Transfer Facility (BTF)

If you have a Home Finance Facility outstanding with another bank you can have it
transferred to NBP through a hassle-free process.
2.5.3. BANK ALFALAH

HOME CONSTRUCTION
If someone have plot and need financing for the construction of a house, Bank Alfalah
provided upto 100% of the construction cost, The one difference is that if someone have no
plot Bank Alfalah will provide upto 60% of the value of the plot that one have selected to
purchase. Payment period ranges from 3 to 20 years.
HOME RENOVATION
If someone already own a home, but need extra space for a growing family or want to see
some rooms get a new look. Simply apply for financing of upto Rs. 3.50 million or 40% of
the surveyed value of their home and get yourself the extra space. The payment period is
upto 10 years.
HOME PURCHASE
With this facility, A person wants to purchase a house already constructed can be financed by
bank Alfalah. Bank will provide them upto 80% of the purchase price of the property, so
that they can realize their dream and enter the reality of owning a home. Payment period
ranges from 3 to 20 years.
2.5.4. Housing Finance in the Country

Institutions
HBFC
Cases/year
8000
Focus on
Building
Other Banks
20,000*
Purchase
Chapter 3. PLAN OF INTERNSHIP PROGRAMME

3.1.
Brief introduction of the branch where you did your internship.
3.1.1 ZONAL OFFICE PESHAWAR:

I have done my internship in House building finance corporation, Zonal office Pehswar,
which is located at Mall Road Sadder area of Peshawar on the 7th floor of State life building.
The Zonal Offices of the Corporation are its functional units where investments are approved
and disbursed for construction and purchase of houses by the clients and recovery is
monitored through the District Offices falling under the jurisdiction of each Zonal Office.
The Zonal Offices are of two types, ones which have heavy work-load and larger number of
District Offices under their jurisdiction are headed by General Managers (Senior Grade
Officer), the other with lesser number of District Offices under their control and
comparatively, lesser work-load are headed by Zonal Manager who are junior officers of
Chief Manager Grade-II level. Presently, HBFC has 12 Zonal Offices out of which 7 are
headed by Senior Grade GMs and 5 by junior Grade Officers of CM level. Zonal office
Peshawar is one of large zonal offices under which 7 districts are working:
1.
2.
3.
4.
5.
6.
7.
PESHAWAR
MARDAN
SWAT
KOHAT
BANNU
D.I.KHAN
CHITRAL
3.1.2. RESPONSIBILITIES OF G.MS & Z.MS:

The General/Zonal Managers are responsible within the areas of their jurisdiction for the
following:
1. Overall administrative control of the Zonal Office concerned, as well as the District
Offices.
2. Organising and controlling the investment activities including Accounting and
Recovery operations.
3. Conducting periodical tours of all District Offices to ensure efficient and smooth
working.
4. Exploring the possibilities of further expansion of Corporations investment activities

and sending recommendations for opening of new offices in their areas of jurisdiction
to the Executive Director-Operations.
5. Super inspection of houses in 5 % cases of investment for sending report to Head
Office.
6. Inspection of the site in all cases of final installment.
7. Approving the statistical data and statements concerning investment activities and
expenditure etc.
8. Checking and approving of the annual budget estimates for onward transmission to
the Head Office.
9. Approving all transfers, postings etc., of the staff and officers Grade-III A.Ms, within
an office, which have no financial implication.
10. Disciplinary action against the staff up to the level of Senior Assistant.
11. Approving the salary bills of the Zonal Office and District Offices.
12. Any other job assigned by the Executive Director-Operations /Managing Director.
3.2.
PERIOD OF MY INTERNSHIP PROGRAMME
3.2.1. STARTING DATE:

I have started my internship in HBFC at 3rd July, .
3.2.2. ENDING DATE:
My internship was ended at 13th August,2012 after completion of 6 weeks in HBFC and
getting the Internship completion certificate from Saeed Khan, the Provincial Chief of
HBFC.
3.3. TRAINING DEPARTMENTS:

I got training during my internship in the following departments.
1. Investment Branch
2. Recovery Branch
3. Accounts Branch
4. Administration Branch
5. Audit Branch
6. Provincial Chief secretariat

7. IT Branch
8. MIS Branch
My internship was eight weeks in HBFC, got one week training in each branch of HBFC as
per the schedule provided to me by their Manager administration
Chapter 4. TRAINING PROGRAME

4.1.
INTRODUCTION OF ALL THE DEPARTMENTS
4.1.1 INVESTMENT DEPARTMENT

Investment department is concerned about the purchase of the products/Schemes. A manager
and assistant manager is working in this department with some staff. They are
primarily concerned with customer dealing.
Good service is the primary factor for them that keep customers coming back. Profits jump
considerably as the customer is retained over time. They achieve high-level customer service
by;
1. Establish customer satisfaction goals.
2. Understand your customers needs and place them first.
3. Show care and concern.
4. Communicate a positive attitude.
5. Make the buyer feel good.
6. Display strong business ethics.
7. Be helpful rather than defensive when a customer complains.
8. Invite the customer back.
9. Avoid rudeness.
In short, good customer service stems naturally from practicing good human relations.
JOBS ASSIGNED TO ME:

Customer dealing (To give them products information and features)
Entry of cases to software.
Collection of necessary documents from partners.
Generation of receipts for partners.
Generation of various reports for management.
Generation of Account Status for partners.
4.1.2 IT BRANCH
The HBFC has appointed some qualified software and hardware engineers in the IT
department. The senior most is deputed as In-charge of the IT department. Software
engineers/programmers are not only responsible for application development in The HBFC,
to fulfill requirements of the bank, but also act like trouble shooters, whereas, installation of
the hardware in the branch set up is the responsibility of hardware engineers. In each branch,
they have assigned a systems administrator to look after jobs related to the computing
system. Proper trainings have been provided to system administrator in this effect.

Assistance in regular data backups from Branch offices.
Assistance in Network troubleshooting.
Assistance in Downloading ECIB from State Bank.
Assistance in forwarding electronic attendance to Head Office Karachi.
4.1.3. Marketing Department
Banks are aware of the fact that marketing and advertising are very important for the healthy
growth of all organizations including banks. Advertisements are meant to get the attention of
a segment of the society, which is the banks target. This is done through the following:
News papers/periodical/journals.
Radio & T.V
Out door boards/sign boards
Gifts with the banks name printed on them like key chains or wall clocks.

Some visits I have made with manager marketing to females oriented places for the purpose
of their products marketing.
4.1.4. Administration Department:

The Zonal office Administration Department focuses on administrative as well as human
resources related matter. As there is no separate department of Human Resources therefore,
the Admin. Department deals all the HR related areas. Major functions of the admin
department include.
Deals HR related matters.
Provides stationery to various departments.
Day to day administration of the branch and logistics.
Expense budgeting and forecasting.
Maintenance of the premises, staff houses and office equipment
Security.

Assistance in maintaining, receiving and processing bills from Branch Offices.
Assistance in all expenditure files and bills of Zone
Assistance in making all Legal Fee Bill, Legal Advances and adjustments.
Assistance in Processing of salaries, offices rent, pension on monthly basis.
Preparation of all type of computer generated reports of Admin Branch.
4.1.5. Accounts Department
The function of Accounts department is to post daily activities of each and every section.
Every department is sending the detailed report of daily progress to the Account Department
for posting the same in the cashbook, also allowed the clean cash register. The transaction
then will be shifted to their appropriate heads. Accounts department deals in two types of
registers.
In the income ledger the transactions relating to the income of the bank are to be posted, like
commission from parties, maintenance etc. all the development expenses of
the bank
including salaries expenses of the staff, rent expenses etc are to be posted in the expense
ledger. Accounts department also maintains the deposits, and also prepares the weekly and
daily statements of the affairs of the branch. It is just like a balance sheet. It also keeps the
record of branch reserve 5% of deposits with SBP. Excess or shortage is reported to the
treasury.
Maintaining Cash book and ledgers.
Collection of reports from all departments of the office on daily basis.
Maintaining Post dated Cheques.
Preparation of Computer generated Reports for Managers.
4.1.6. RECOVERY DEPARTMENT

This department is concerned about the recoveries of installments form various partners
(Who have availed loans), A recovery incharge with some lower staff is working in this
department. The recovery in HBFC is through post dated cheques, that is filled and signed
cheques have been taken from the partner which is sent monthly to the bank in which the
partner has opened account, and the amount is cashed. If the cheque is bounced three times
then action is taken by the HBFC management in banking court.
The Manager- Recoveries will be responsible for the following:
1. Procurement of the various District/Zone-wise statements of recovery & default from
the IT Division.
2. Examining the statements before putting up the same to the ED (Recoveries).
3. Maintenance of office files opened on subjects of recovery etc.
4. Correspondence with various quarters as well as Zone & Districts Offices.
5. Any other job assigned by Executive Director (Recoveries).
Collection of post dated cheques and current month due from accounts.
Presentation of due cheques in Banks.
Issuance of Q4 to bounced cheque partners.
Preparation of Auction cases lists.
Chapter 5. MANAGEMENT FUNCTION

5.1.
PLANNING
5.1.1.
DECISSION MAKING PROCESS.
The decision making process is shown in the form of a flow in ascending order:
MD
PROVINCIAL CHIEF
CHIEF MANAGER
GENERALMANAGER/ZONAL CHIEF
MANAGER
MANAGING DIRECTOR (MD):

The managing Director is the chairman of the organization, the Chief Executive officer and is
involved directly and indirectly in all decision making process.
PROVINCIAL CHIEF:
The Provincial chief, being the overall In-charge of the operational units of the Corporation,
is responsible to conduct tours of the Zonal Offices as well as their subordinate units (District
Offices) from time to time and submit reports on the working of the said offices to the
Managing Director, together with his suggestions for improvement, if any.
GENERAL MANAGER/ZONAL MANAGER

To monitor and supervise operational activities in order to ensure smooth and efficient
working of Zonal/District Offices of their Regions, besides taking timely steps to prevent and
eradicate all sorts of irregularities, if any.
CHIEF MANAGER/MANAGER
The District Officer is in-charge of the District Office who works under the overall control of
Zonal/General Manager. He should be aware that the due processing of an application and
the decision to approve or reject it is not a mechanical process it is essentially a process of
negotiation and that the personal integrity and the familys financial condition of the
applicant determine the ultimate success of the transaction.
5.1.2
ORGANIZATION CURRENT STRATEGIES
New up-coming Schemes

1.
Step-up-plan
2.
Savings and Loan Plan
3.
Equity Building Plan
4.
Construction Project Finance
5.
Residential Hostels Finance
6.
Home Finance for Overseas Pakistani
7.
Syndicated Finance for Large Construction Projects
HBFC FUTURE PLANS:

HBFC has been a household name traditionally associated with housing finance. The
scenario changed with the entry of banks and leasing/house finance companies in the house
finance sector from late 1990. HBFC had reconsidered its whole business philosophy. This
was rather inevitable for its survival. The new management has brought a revolutionary
changes for the Corporation in all areas of its working including Operations, Human
Resource, Administration, Finance, IT, etc as well as client services.
The strategic changes being initiated is expected to help HBFC emerge as a vibrant and
customer friendly housing finance institution thereby establishing more firmly its age old
place in the field of house financing with a new look. HBFC occupies a special place in the
house finance business as it has all along catered to the needs of the lower and lower-middle
income groups whereas the commercial banks have targets of high profile clients.
Commercial Banks have a large negative list of locations as well as professions. HBFC, on
the other hand does not maintain any negative list of locations or professions and it rather
encourages applicants from lower income localities, as long as housing constructions are on
valid land title and the client meets other minimum eligibility criteria. Presently nearly 85%
of HBFCs clientele is low-income people where loan amount is less than Rs.100, 000
whereas nearly 80% clients have per party loan below Rs.500, 000 and have monthly income
between Rs3, 500 to Rs5, 000 and could only afford to pay an installment of Rs1000 to
Rs1200 per month in 15 to 20 years besides meeting their monthly expenditure of basic
necessities. For HBFC, its social role is an integral and inseparable part of its commercial
stance.
Since the beginning of the year 2005, HBFC is striving for a new outlook with a new
ideology. Consequently, it has changed its Vision to to be the prime housing finance
institution of the country, providing affordable housing solutions to low and middle income
groups of population by encouraging new constructions in Small & Medium Housing (SMH)
sector. Its Mission is now to be a socially responsible and commercially sustainable
housing finance institution
IMPROVE CORPORATE IMAGE OF HBFC:

As pointed out above HBFC has network of about 58 branches all over Pakistan. In order to
expand its outreach to the small cities and towns, HBFC is going to set up around 50
Representative Offices where market driven techniques like appointment of service agents
will also be adopted. The working conditions in HBFC offices are being improved to show
that it values and honors its clients, who are from lower and middle income sections of
population and being the working class are the backbone of our economy.
MEGA HOUSING SCHEMES FOR SMALL AND MEDIUM HOUSING

UNITS:
HBFC is actively working in association with the Provincial Governments, Corporate
Bodies, Industrial Estates and Public Sector Organizations to develop mega housing schemes
comprising of small and medium housing units, based on horizontal and vertical housing
solutions. NESPAK is working as HBFCs consultant for developing such schemes. In view
of the fact that the housing shortage in the country, particularly for lower and middle income
groups of the population is acute and needs some mega solutions, these mega schemes have
achieved paramount importance for the HBFC. Accordingly, while containing its retail
housing finance products, HBFC will focus on bulk housing schemes so that the housing
stock in the country gets increased on fast track.
HOUSING FINANCE FACILITIES TO OVERSEAS PAKISTANIS:

HBFC would be launching an online program for the overseas Pakistanis to facilitate them in
owning a house in Pakistan where, on their return, they could live or earn reasonable return
by putting the same on rent. For availing this facility they do not need to visit HBFC office as
every thing would be arranged on website and the overseas Pakistanis would have direct
contact with the HBFC offices specifically designated and equipped with all the required
information for the scheme.
HBFC will provide financing facilities as well as property related service, which include
help in locating suitable residential locations with detailed information on lists of properties
available, classified by location and price with detailed specifications. Subsequently HBFC
would be providing them with additional services such as evaluating the reliability of
developer, perusal of the legal documentation, periodic visit to the projects site, helping
them to determine initial down payment for booking and assist them in completion of
purchase transaction.
OTHER HOUSING SCHEMES:

Other schemes include schemes where experience of Korangi Township can be replicated.
Such scheme is considered as among the best housing solutions to rehabilitate squatters/poor
people. Provincial Governments are being approached with a proposal to earmark a piece of
land in suburbs of major cities starting with provincial capitals for building houses for low
income group of population.
5.2. ORGANIZING
5.2.1. MAIN OFFICE

HBFC main office (Head Office) is in Karachi, working under the direct supervision of
Managing Director.
5.2.2.
NUMBER OF EMPLOYEES
S.NO
1
Headquarter/Zone
Head
Office(Karachi)
Karachi Zone
HPZ
Hyderabad Zone
Sukkar Zone
Quetta Zone
Multan Zone
Faisalabad Zone
Lahore Zone
Islamabad Zone
Peshawar Zone
Abbottabad Zone
Gilgitt Zone
Total
2
3
4
5
6
7
8
9
10
11
12
13
Officers
177
Staff
112
Total
289
123
69
50
38
8
50
36
144
67
48
52
11
873
73
27
40
26
10
33
22
75
54
29
31
07
539
196
96
90
64
18
83
58
219
121
77
83
18
1412
5.2.3. ORGANIZATIONAL DESIGN

5.2.3.1. DEPARTMENTATION
Departmentation is the logical process of grouping of activities, or the process of grouping
jobs in a logical arrangement through which the organizational goals or objectives can be
achieved. It is also the process of division of work into various sections or departments or
divisions, over which a manager has authority & responsibility for performance of specified
activities. Basically there are four ways for organizational departmentation.
i)
Departmentation by function
ii)
Departmentation by product
iii)
Departmentation by geography
iv)
Departmentation by customer
The departmentation in HBFC has been done purely on functional basis, in the following
manner:
This division is known as the eyes and ears of the top executives of the Organization .It keeps
them informed of any contravention of bank regulations by any branch/department or the
staff and also proposes remedial measures to set it right. In the HBFC there are three types of
Auditing, i.e. Internal Audit, External Audit and SBP Audit.
Internal Auditors are assigned to make comprehensive audit on yearly basis of all branches. A
separate team of Audit Division is deputed to make sure the compliance of all irregularities,
pointed out during their inspection.
The Board of Directors of The HBFC has appointed External Auditors for comprehensive
audit of all branches on yearly basis. The BOD of The HBFC has to appoint any Chartered
Accountants from the approved list of The SBP. Since they are external auditors and
approved for SBP, therefore they prepare all the financial statements of The HBFC.
Since SBP is the central bank of the country and it has a right to carefully monitor all the
activities of all banks, therefore they also conduct their audit in The HBFC on a yearly basis.
In case, any bank violates Prudential Rules & Regulations of the SBP, SBP reserves the
right to panelize such banks. In case of any major violation, they may solve the management
of any bank. The compliance of irregularities is made sure by them as well.
5.2.3.2.
SPAN OF CONTROL
PROVINCIAL CHIEF
GENERAL MANAGER
CHIEF MANAGER
MANAGER
ASSISTANT MANAGER
STAFF
5.2.3.3. CHAIN OF COMMAND

The affairs of the Corporation are managed by a Board of six Directors appointed by Federal
Government, including the Managing Director who is appointed in consultation with State
Bank of Pakistan. The Managing Director is the Chief Executive and Chairman of the Board
of Directors and the Executive Committee. The meetings of the Executive Committee and the
Board of Directors are held from time to time to conduct the business of the Corporation, in
accordance with the HBFC Act and Regulations.
All the selections, promotions of employees of the Corporation (except the MD/Chairman)
and decisions as to their remuneration and benefits are made by the MD/Chairman in
accordance with the evaluation criteria and personal policies determined by the Board.
5.2.3.4 CENTRALIZATION/DECENTRALIZATION
HBFC has decentralized structure with limited levels of management. Decentralized structure
eliminates unnecessary costs. There is a zonal office in each region under the custody of
General Manager who is supervising and controlling all the activities of Branch offices. The
branch Managers of each Branch directly reports to General Manager about the activities of
their concerned Branch. There is quick decision making because of greater hands on
approach to the management.
5.2.3.5.
FORMALIZATION
There is highly formalized structure which provides proper awareness to the staff members
about board of directors rules and laws, as the organization is older so there is highly
formalized structure with well defined rules and regulations. Role of each member of an
organization is well defined with their specific tasks and responsibilities. Staff members are
provided with the awareness about new happenings and activities of an organization.
5.2.3.6.
WORK SPECIALIZATION
Every employee has been trained in their respective area of specialization, there is training
programs provided to the employees for increasing their better performance and to resolve
conflicts.
5.2.4. MANAGING CHANGE AND INNOVATION
HBFC has been a household name traditionally associated with housing finance. The
scenario changed with the entry of banks and leasing/ house finance companies in the
housing finance sector from late 1990. HBFC had to, therefore, reconsider its whole business
philosophy which was rather inevitable for its survival. The year 2005 brought with it a
revolutionary change for the Corporation in all areas of its working including Operations,
Human Resource, Administration, Finance, IT, etc. as well as client service.
The strategic changes being initiated are expected to help HBFC emerge as a vibrant and
customer friendly housing finance institution thereby establishing more firmly its age old
place in the field of housing finance with a new look. HBFC occupies a special place in the
housing finance business as it has all along catered to the needs of the lower and lower
middle income groups whereas the commercial banks have targets of high profile clients.
Presently, nearly 85% of HBFCs clients are low-income people where loan amount is less
than Rs.100,000 whereas nearly 80% clients have per party loan below Rs.500,000. The poor
sections of the society take HBFC as their partner in housing finance.
For HBFC, its social role is an integral and inseparable part of its commercial stance. It has
to cater to the needs of the people who have small means, striving hard to have at least a
shelter of their own in their lifetime.
HBFC believes in focusing on more than 85 per cent of clientele who mostly seek housing
loans of Rs.100,000 and have monthly income between Rs3,500 to Rs5,000 and could only
afford to pay an installment of Rs1000 to Rs1200 per month in 15 to 20 years besides
meeting their monthly expenditure of basic necessities.
With the advent of the year 2005, HBFC is striving for a new outlook with a new ideology.
Consequently, it has changed its Vision to To be the prime housing finance institution of the
country, providing affordable housing solutions to low and middle income groups of
population by encouraging new constructions in Small & Medium Housing (SMH) sector.
Its Mission is now To be a socially responsible and commercially sustainable housing
finance institution. It has adopted a new strategy for ensuring the success of its policy. Its
business focus as always shall remain SMH Finance at the same time it will gear up its effort
to encourage low cost housing methods of construction to create affordable housing for the
lower income groups of the population. It is planning to offer retail and bulk housing
solutions, so as to increase housing stock in the country through new construction.
CRITICAL CHALLENGES TO HBFC

1. Tenancy laws.
2. Implementation of foreclosure law
3. Credit Bureaus
4. Developer Finance
5. Housing Schemes for Federal/Provincial Govt. Employees.
6. e-enabled documentation verification
7. Training
8. Establishment of REITs.
9. Land Registration Information System (LRIS).
10. Land Banks.
11. Funding of Housing Loans.
12. Low Cost Housing.
5.2.5. MANAGING IT AND COMMUNICATION

The Information Technology function (IT) in HBFC manages supports activities in the
areas of software, hardware, networking, website, data protection, data archiving, data back
up, data recovery etc.
The main functions are;
1. ESTABLISING, MAINTAING AND IMPROVING T H E STANDARDIZED

SOFTWARE.
2. STANDARDIZED HARDWARE SPECIFICATIONS
3. UNINTERRUPTED POWERSUPPLY [U P S] SPECIFICATIONS
4. NETWORK SPECIFICATIONS
5. Branded HARDWARE & EQUIPMENT
6. Protection Against SOFTWARE & DATABASES
7. Regular Data Backups
5.2.5.1. ESTABLISING, MAINTAINING AND IMPROVING THE STANDARDIZED
SOFTWARE:
PURPOSE:
To provide help and assistance in planning, organizing implementing, maintaining and
updating the standard application software, databases throughout HBFC, including the
following:
On different Servers, following software are installed:
a. Windows 2003 Operating System with latest Service Packs;
b. Oracle 10g Database;
c. Internet Security Accelerator (ISA);
d. Anti-Virus Software;
e. Acrobat Reader,
f. WinZip Utility.
2. On different Work-stations, following software are installed:
a. Windows XP Professional Edition Operating Systems with Latest Service
Packs;
b. Microsoft Office 2003;
c. Acrobat Reader;
d. McAfee Antivirus Standard Edition; and
e. WinZip Utility.
REQUIRED
To introduce the ERP, other necessary software, state-of-the-art networking, and interactive
website operations.
POLICY:
1. It is the policy of the HBFC to achieve and maintenance its IT infrastructure at the
optimum efficiency level throughout IT functions. It will provide all required
resources towards achieving the objective.
2. All the software /software specifications would be as per IT policy of the
Management in force. Any software not in line with the IT policy would not be a part
of the software to be used. This software would be installed in accordance with the
prescribed procedure.
3. All software installed on workstations is to be identical to maintain the consistency of
the software/ specification within the organization. These may however, differ on
different servers according to the specific needs.
5.2.5.2. STANDARDIZED HARDWARE SPECIFICATIONS:
PURPOSE:
To provide help and assistance in planning, organizing implementing, maintaining, and
updating the specifications of the hardware throughout HBFC including the network
environment that can fulfill the current and future requirements. The key concept is to
maintain the uniform specifications hardware platform for efficient administration of PCs,
and workstations.
POLICY:
1. All the hardware/ hardware specifications would be as per IT policy of the

Management in force. The hardware and brand of hardware would be uniform and
compatible, as far as possible, for hardware consistency within the organization.
2. The hardware having optimum level would be obtained/ installed in accordance with
the prescribed procedure.
3. All desktops and notebook computers provided/ to be provided to the users (at present
individual UPS systems are provided in critical areas) would be gradually connected
through a local area network (LAN) to the main server suitably located. It is planned
to have the entire network placed on Uninterrupted Power Supply to ensure continuity
of the systems.
5.2.5.3 UNINTERRUPTED POWER SUPPLY [UPS] SPECIFICATIONS:
PURPOSE:
To maintain uninterrupted power supply to the crucial computers, network devices and other
allied accessories related of IT Division and other divisions/departments of HBFC.
POLICY:
All the critical servers, workstations, standalone computers, network devices, and other allied
accessories must be connected to the central UPS system.
5.2.5.4. NETWORK SPECIFICATIONS:
PURPOSE:
To maintain the identical network devices, transmission speed, protocol, cables, and
topologies for obtaining optimal network speed.
POLICY:
The network devices must be identical and interoperable to support optimal network speed
for database and Internet users.
5.2.5.5. HARDWARE & EQUIPMENT:

PURPOSE:
To provide guidance for accountability regarding physical IT assets of the HBFC. The IT
asset inventory is defined as the means by which the hardware and software assets are
accounted for within the HBFC domain.
POLICY:
All hardware and software operated by divisions/sections of the HBFC will be documented
in compliance with all applicable IT asset management policies.
5.2.5.6. SOFTWARE & DATABASES:
PURPOSE
To establish policies for the classification of electronically stored HBFC information and
data.
POLICY :
Each user must adopt and adhere to an information classification system that includes the
extent to which information should be disclosed to specified users, consistent with applicable
access, privacy, and confidentiality statutes.
5.2.5.7. REGULAR DATA BACKUPS
PURPOSE:
To ensure that periodical back up of essential business data are routinely related, and properly
stored on safe premises, and data restoration procedures are prepared and tested.
POLICY:
Back-ups of all essential business data must be routinely created and properly stored to
ensure prompt restoration.
5.2.5.8. BUSINESS VALUE OF THE SOLUTION

The above-mentioned solutions would help in re-engineering the business process and
achieve a dramatic improvement in business performance like;
1. Facilitate revenue generation and supporting functions and to cater to the relevant
needs of the Management, the stakeholders and the customers of HBFC by providing
them user-friendly and hassle free interface of various information technology
facilities.
2. Provide state-of-the-Art systems to align with mission and vision of HBFC.
3. Help in re-engineering the business process and achieve a dramatic Improvement in
business performance.
4. These improvements will document organizations basic processes, methodologies
and procedures associated with Information technology and would provide clear
understanding to all the users.
5. By setting guidelines and procedures relating to the protection of its valuable
information, financial and technological assets will avoid unauthorized use and
disclosure resulting loss to the Corporation.
6. These improvements will provide basis and implementation of security controls that
reduces risks and system vulnerability.
7. This will define roles and responsibilities of users, IT function and IT Steering
Committee, to have proper control of IT functions.
8. These efforts will make useful evidence to its regulators, credit rating agencies,
authorized audit firms, clients/customers, etc. which will affect the business of
organization.
9. The Customer satisfaction could be achieved by making these improvements.
5.2.5.9. IMPACTS ON THE CURRENT WORKING SYSTEM

This computer-based system perform the following activities.
1. Data Security
Unlike the existing system the proposed system will provide the data security for the
end user.
2. Flexibility
Addition of new units and handling of new application will be possible, which makes
it more flexible.
3. Ease In Modification
The system facilitates the modification procedure. It will help the user in modification
in the proposed system.
4. Ease In Data Entry
Data entry is a process of submitting data into the computer for processing. The
system provides an efficient, reliable and interactive data entry facility.
5. User Friendly
The system is organized in such away that user can easily understand the working
mechanism. The system is menu drive.
6. Efficiency
The system will be much faster, efficient and reliable.
7. Minimum Storage Space
Computerizing a system also has an advantage of requiring less storage space.
8. Record Keeping
The system is capable in keeping the record of the customers, Exchanges, Cabinets,
DPs.
10
Security
The computerization of the system provides full security to the records, because in
computerized system database is secured. Only authorized persons can access and retrieved
data.
11
Hardware & Software Selection

Hardware and Software are the backbones of a computerized system. The efficiency
of the system depends upon the choice of better hardware and software.
12
Facilitate revenue generation and supporting functions and to cater to the relevant
needs of the Management, the stakeholders and the customers of HBFC by
providing them user-friendly and hassle free interface of various information
technology facilities.
13
Provide state-of-the-Art systems to align with mission and vision of HBFC.
14
To help in re-engineering the business process and achieve a dramatic

Improvement in business performance.
GANTT CHART
ACTIVITIES
01/01/2008 05/01/2008 11/01/2008 15/01/2008 20/01/2008 25/01/2008

TO
TO
TO
TO
TO
TO
05/01/2008 10/01/2008 15/01/2008 20/01/2008 25/01/2008 30/01/2008
DATA
BACKUP
REPORTS
CIB
RISK MANAGEMENT
Risk management is the human activity which integrates recognition of risk, risk assessment,
developing strategies to manage it, and mitigation of risk using managerial resources.
The strategies include transferring the risk to another party, avoiding the risk, reducing the
negative effect of the risk, and accepting some or all of the consequences of a articular risk.
1. Uauthorize access by the Top Management to Data.
2. Improper backup management
3. Use of poor quality Data switches.
4. Interrupted/fluctuation in power supply.
1. RESOURCE MANAGEMENT
Information Resource Management is responsible for the ongoing management of data
within and across Administrative Computing.
1. Administer and assist Data Analysts, Developers, and Data Stewards in protecting
and maintaining the quality and integrity of their data.
2. Promote adherence to common standards, orally and in writing, to ensure data
consistency and data accuracy.
3. Actively participate and effectively communicate computing and infrastructure issues
in teamwork environments to guarantee data quality
4. Foster technological ideas and solutions that benefit not only Information Technology,
but also the University as a whole.
5. Administer IT principles for the data structure; the policies, procedures, and
standards, which support the data architecture.
5.3.
LEADING
5.3.1. Leadership style

There is visionary leadership in various housing issues although it is risky but it is necessary
to provide awareness about various issues to the world and make sure that all the activities
have been carried out properly or not. Clear vision is the main purpose of the leaders of
HBFC.
Leadership style in traditional leadership theory is how you relate to subordinates.
In our knowledge driven world, the power to lead is shifting to the power to promote new
ideas, a better way, based on innovation. The meaning of leadership now should be simply
the successful promotion of new directions. Leaders show the way. The beauty of this
definition of leadership is that it is consistent with market leadership or leadership in sports
where one individual, team or organization "shows the way" for others. By focusing our
attempts to define leadership on what it means to be the head of a group, we have created a
very distorted picture of leadership.
From this point of view, there is only management style. There is no such thing as leadership
style.
Leadership style is the manner and approach of providing direction, implementing plans, and
motivating people. There are normally two styles of leadership in HBFC, depending on the
circumstances around;
o Authoritarian or autocratic
o
Participative or democratic
AUTHORITARIAN OR AUTOCRATIC
This style is used when the leader tells their employees what he wants done and how he
wants it done, without getting the advice of their followers. Some of the appropriate
conditions to use it is when leaders have all the information to solve the problem, they are
short on time, and their employees are well motivated.
PARTICIPATIVE OR DEMOCRATIC
This type of style involves the leader including one or more employees in on the decision
making process (determining what to do and how to do it). However, the leader maintains the
final decision making authority. Using this style is not a sign of weakness, rather it is a sign
of strength that their employees will respect.
HBFC leaders (Top Management) uses all two styles, depending on what forces are involved
between the followers, the leader, and the situation. Some examples include:
Using an authoritarian style on a new employee who is just learning the job. The
leader is competent and a good coach. The employee is motivated to learn a new skill.
The situation is a new environment for the employee.
Using a participative style with a team of workers who know their job. The leader
knows the problem, but does not have all the information. The employees know their
jobs and want to become part of the team.
5.4.
CONTROLLING
5.4.1. CONTROLLING OPERATIONS

I have done my internship in zonal office Peshawar, here the head is General manager who is
responsible for the controlling of operations.
The General/Zonal Managers are responsible within the areas of their jurisdiction for the
following:
1. Overall administrative control of the Zonal Office concerned, as well as the District
Offices.
2. Organizing and controlling the investment activities including Accounting and
Recovery operations.
3. Conducting periodical tours of all District Offices to ensure efficient and smooth
working.
4. Exploring the possibilities of further expansion of Corporations investment activities
and sending recommendations for opening of new offices in their areas of jurisdiction
to the Executive Director-Operations.
5. Super inspection of houses in 5 % cases of investment for sending report to Head
Office.
6. Inspection of the site in all cases of final installment.
7. Approving the statistical data and statements concerning investment activities and
expenditure etc.
5.4.2. CONTROLING PERFORMANCE.
5.4.2.1. PERFORMANCE APPRAISAL SYSTEM.

PERFORMANCE APPRAISAL:
The performance of employees of the Bank are appraised though their annual confidential
reports at the end of each year. This has become an outdated method of performance
appraisal and no longer used due to the following reasons:
1. The performance of employees is evaluated after quite a long time.
2. Element of subjectivity is involved in this method.
3. Employees participation is not ensured in the process of evaluation.
4. Objectives of employees are not quantified.
PROMOTION CRITERIA:
The criteria as approved by the Board, covers various parameters to be considered, allocation
of marks for individual achievements and Divisional / Departmental performance as
considered with reference to performance of the Corporation as a whole.
PARAMETERS OF CRITERIA:
The parameter as discussed above would specifically be as follows:

1. Performance Evaluation Reports
2. Length of stay in present grade
3. Operational duties in field offices and/or functions at Head Office and Zones.
4. Performance of the field office and of various Divisions and Departments at Head Office.
5. Improvement in Educational Qualification.
TOTAL MARKS ALLOCATION:
Out of total marks of 100, the individual allocations would be as under:

ITEMS
MARKS
Performance
evaluation 75
reportsof five years
Length of stay in present 10
grade, over and above
COMMENTS
One (1) per year in present
carde starting from 6th year.
minimum requirements
Field operational duty.
Performance evaluation of
field office/ Zonal office/
departments at Head office.
Improvement
in
qualification since last
promotion.
Total
05
05
05
100
QUALIFICATION OF ACRS (RATING)

Marks allocated to annual confidential reports would be as under.
Very good
Good
Average
Below average
15
10
05
00
Per year
Per year
Per year
Per year
Chapter 6. CRITICAL ANALYSIS

6.1. Customer Relationship
In the bank the officers come across many customers daily. There is a need to improve the
customer relationship in all the departments. The relationship manager has a very close
contact with the customers and this is his duty to give proper guidance to the customers.
Where as in HBFC I have found that the customer relationship is not up-to the satisfactory
level.
6.2. Inadequate Training Program
As the employee finishes his training he is induced in a specified field since he does not have
knowledge about the specific job assigned to him thus he feel difficulty to perform his job.
There is no special training given to the employees for motivating customers.
6.3. Shortage of Latest Computers and skills
There is a shortage of latest computers and skills. They have been using the same old
computers; those are out dated now a day. It results in the inefficiency of work. There is also
lack of latest software, which results in slow processing.
6.4. Poor Job Rotation
There is no specific job rotation in HBFC The Mall, Pesh. Officers spend most of the time in
the same department. A person can spend years sitting in one department, performing the
same duties.
6.5. Lack of Security
The most important aspect consider in the bank is security. But in HBFC I have seen that
there was easy accessibility to account information.
There was not enough security as far as the accounts were concerned. Anyone can call and
can get the information from the bank, which has been creating trouble in the Organization.
6.6. Lack of Motivation

Motivation is the most important aspect in any organization. There is a lack of motivation in
the employees of all departments, which has to be improved. By motivating people they can
create a change in the bank.
6.7. Improper Work Distribution
I have noticed it through out my whole internship, which was also irritating for me that the
work distribution is totally improper here. Few people have to perform less responsibility
with same grade and few have to perform more responsibility.
6.8. Lack of Appreciation
Another very important thing that is ignored in different department is appreciation of the
employees who work with dedication and efficiency. If hard work and performance of the
staff members is not recognized and appreciated, it dis-hearts them resulting in poor
efficiency.
6.9. Lack of reliability:
Customer service of the Bank lacks reliability i.e., what is promised is not provided
dependably and accurately to the customers. All commitments while making prospective
customers are not carried out in due course.
6.10. Human resource management:
Human Resource plays a vital role in the success of every service organization. They interact
between man and machine. Their attitude can win or loose the customer. The positive attitude
could only be created in a conducive environment, which can make the staff dedicated
towards the organization and its objectives. In reality the man is more important than
machine as it is the human which could get maximum out of machine to keep a happy
customer. However, most organizations give little importance to this very important asset.
Various aspects related to human resource of Muslim Commercial Bank have been critically
examined in the following text:
6.10.1. Selection and recruitment:

Although the Bank believes in merit but in practice the selection of employees is not done on
merit. Most of the employees are low educated and unskilled. This shows that candidates
with some strong family background or political pressure are recruited and qualified
candidates are left behind.
JOB FOR LIFE:
Like the employee of public sector organizations in Pakistan, the employees of HBFC also
enjoy their job for life. Since there is no risk of early retirement or redundancy in rank, they
do not perform with their full potentials. This is one of the reason responsible for the low
productivity of the employees of the Bank.
STAFF SEEN AS JOB HOLDERS:
Human resource of an organization is regarded as knowledge and idea contributors. But the
employees of MCB are seen as job holders only. It lacks innovative personnel. Creativity is
mistaken for opposition to the established order.
6.10.4 INTER-PERSONAL RELATIONSHIP:
Modern management acknowledges human resources as one of the most important assets of
an organization. But by their very nature, human beings are also the most unpredictable.
Where a number of persons work together, interactions among them, of necessity, will lead to
conflicts and HBFC is no exception.
As a whole I have learned a lot during my internship, and faces the difficulties, challenges
practically in doing something which make me capable of doing better, As for as our course
work is concerned that was all theoretical and was about how to do something, I was totally
unaware of the hurdles and challenges which could be faced in doing something but after
completing my internship now I am capable of accepting challenges and responsibilities not
only in case of HBFC but in each and every field of my life and this is i think the greatest
gain for mine.
Chapter 7. SWOT ANALYSIS OF ORGANIZATION IN THE BUSINESS SECTOR

SWOT ANALYSIS.
SWOT analysis is a strategic development tool that matches internal organization strengths
and weaknesses with external opportunities and threats. SWOT analysis is based on the
assumption that if managers carefully review such strengths, weaknesses, opportunities, and
threats a useful strategy for ensuring organizational success will become evident to them
SWOT analysis is an important tool to analysis the overall situation in which organization is
conducting its affairs; each issue remains relevant and useful of corporate strategy
formulation.
The purpose of a strengths & weaknesses analysis is to express, quantitatively or
qualitatively which areas of the business have 1
Strengths that should be exploited by suitable strategies;
Weaknesses for which strategies should be developed to improve them.
The purpose of an external appraisal (opportunities & threats) is to identify profit making
opportunities, which can be exploited by the organizations strengths, and also to anticipate
environmental threats, which will affect competitors and the organization as well. Thus
internal and external appraisals are brought together in a SWOT Analysis.
7.1. STRENGTHS
1.
The Oldest financial institution of Pakistan ,In

,In existence over 53 years.
2.
HBFC target market is middle and lower income group, which is not facilitating by
any other financial institution for house making, we can say that HBFC is serving the
95% population of this country.
3.
HBFC is government financial institution due to which its reputation and image is
stronger & more positive.
4.
HBFC has a large number of clients with both huge and medium Loans, distributing
loans all over country.
5.
HBFC has the combination of experienced as well as young, active and inspired staff.
This combination of old and new reflecting in the form of good services.
6.
Knowledge, Experience & Leader in Housing Finance.
7.
8.
9.
Penetration all over Pakistan (Azad Kashmir and Northern Areas)

Adequacy of Funds.
Over 50 years of experience in handling Mortgaged Documents Lending to both
lower , middle & high income group.
1.
10. Extension and improvement in services to domestic as well as foreign customers.

11. Best optional policies and attractive compensation packages for employees, which
have really improved their commitments, dedication and headwork towards the
accomplishment of organization objectives.
12. HBFC offers various kinds of Schemes with varying features and interest rates, which
is not offered by other financial institutions, e.g. Small builders Loan Scheme.
13. HBFC is a renowned bank all over the country. Its branches are spread across all the
regions of the country. Thus, enabling customers to make transaction more easily
locally or out side the country. It also has Representative offices in areas where it
does not have any branch.
14. A pleasant operational atmosphere develops the efficiency of the staff and also boosts
the employees motivation. Fortunately at HBFC Peshawar Branch employees are in
good relations with each other. The burden of work is generally willingly shared
between the employees. When any of the employees is on a short leave so other
subordinate takes his work with care.
7.2. WEAKNESSES
Weaknesses, like strengths are a part of almost every organization. These weaknesses points
out the potential areas of improvements and make the organizational behavior intelligent. A
cumulative effort to overcome these flaws makes success possible.
During the internship period the weaknesses that generally surfaced and were visible at
HBFC Peshawar Branch are as described below in detail.
1. Increase in the non-performing loans due to political, economic and legal factors has
adversely affected the banks image.
2. Administrative expenses are increasing every year.
3. Promotions are carried out on annual basis ignoring the importance of capabilities and
performance outputs.
4. Lengthy Credit processing and documentation procedures are a weakness of HBFC.
5. It is only operating nationally.
6. Fewer branches as compared to other banks.
7. There is no separate prayer room and dinning hall in the bank.
8. Political pressure from vested interest group selection.
9. No marketing of advances.
10. Most of the employees consider them selves to be govt. employees and do not take
interest in their work, which does affect the performance of the bank (in the long run).
Beside this, the behaviors of the staff are some times very rude to their customers and
naturally the customers want to wind up their accounts in the HBFC as a result.
11. Slow down in advance growth in the short term as HBFC focuses on quality
customers in the market.
12. Customers having accounts with small amounts are not given same services and
dealing, which is given to those who have high accounts.
13. System of recruitment and selection is not transparent and few training programs to
junior level officers.
14. The outlook of an organization plays important role in portraying its image to
customers. The HBFC Peshawar Branch has a structure that is simple and not enough
eye-catching that will attract customers. The interior of the bank gives a crowded
look. The atmosphere is professional. It is not centrally heated and air conditioned, so
as to provide customer and staff with better working condition in every climate.
15. Performance appraisal is generally considered a motivational as well as evaluative

tool. At HBFC its use is normally made in an exploiting fashion. Evaluation is made
on the basis of the achievements of market targets. Unfortunately sometimes the
market targets are always unachievable. Thus employees face the condition of being
called inefficient at times. This is an annoying factor for some of the employees,
which leads towards de motivation and anxiety.
7.3. OPPORTUNITIES
Opportunities are the external circumstances, events or situations that offer an organization
the chance to achieve its objective. The bank has the following opportunities that can be
availed.
1. They have the opportunity to open new branches in the country as well as in foreign
countries. They should open new branches at least at the district level. They have the
opportunity to open new branches especially in the rural areas of Pakistan.
2. Growing policies of governments on business and commerce sector provided HBFC
an opportunity to efficiently meet with the business peoples requirements of instant
cash and financing facilities.
3. The HBFC has the opportunity to hire skilled, professional and educated persons who
are specialized in the course of banking and accountancy like CAs (Chartered
Accountants) & MBAs.
4. Customers feed back on different products and accounts has really improved the
bank performance and encourage the atmosphere for other future polices.
5. HBFC also has an opportunity to expand new technology.
6. Reconstruction of Afghanistan is a great opportunity for the HBFC to grow by House
financing in the war-affected areas.
7. Expand its product line similar to other competitive banks by introducing various
other modes of consumer financing such as financing for the purchase of plots.
8. Expansion of IT platform.
9. Stronger position to recover bad debts.

10. Benefits from incoming expertise and competition.
7.4. Threats
1. Increase in competition due to the rapidly growing number of foreign and
domestic private financial institutions offering highly specialized and attractive
financial services.
2. Reduction in developmental activities and foreign direct investment due to the
shaken investors confidence has also lead to a fall in the banks expansion pace.
3. Extensive promotional campaigns run by the other banks are a major threat to
HBFC in that they are able to attract more customers.
4. The Political instability, which is big threat to the policies of State Bank.
5. Un-consistency in government policies regarding to business and economic
sector.
6. Growing global technological advancement.
7. Strict regulations by the government over credit facilities to the customers as to
meet the prudential regulations.
8. Loss of confidence of the customers due to lengthy loaning procedure.
9. Concentration risk is involved with the credit department.
10. The step of Islamization of banks in Pakistan is a big threat for the HBFC.
Because the whole banking system will be changed.
11. Changing of customer needs.
Chapter 8. CONCLUSION AND RECOMMENDATIONS FOR MPROVEMENT

CONCLUSION
HBFC was established in 1952 as a financial institution. The main objective of the
Corporation was to be a socially responsible and commercially sustainable housing finance
institution.
Rs. In Billions:
From the year 1953 to 2002,
Total disbursed amount Rs. 30 billion
14.457
12.877
2.311
0.080
Ist 10 Year
0.448
2nd 10 Year
3rd 10 Year
4th 10 Year
5th 10 Year
The overall performance of HBFC in terms of profitability and growth had been declining in
the very beginning, the main reasons responsible for this poor performance of HBFC were
stuck-up loans, over-expenditure and overstaffing.
Then the Management took revolutionary steps, HBFC offers variety of services to its
customers. The most important to them are Islamic products. HBFC is now having branches
in all cities of Pakistan offering services to its accounts holders and also even to non-accounts
holders.
HBFC is offering innovative schemes these days. The important among these are Small
Builders loan facility, for construction and sale of small houses/flats
In conclusion one can say that HBFC has played a big role in the creation and the
development of the country. One thing significant about this institution is that it has always
sacrificed monetary consideration over national interest. This fact raises the HBFC above all
in the services of Pakistan. In my opinion HBFC is improving its performances at present for
the hope to succeed in future.
8.2. RECOMMENDATIONS
1. As with other functions of management, establishment of objectives and orderly
planning are necessary for good organization. Planning helps determine future
personnel needs and attendant training programs. With out knowing what managerial
personnel will be needed and what experience to demand, an enterprise cannot
intelligently recruit people and train them. Further more, organizational planning can
disclose weaknesses in the organization and other aspects keeping in view the
importance of planning, it cannot be ignored.
2. For promotion and marketing purpose if media services are used through commercial
and through print media this can help the promotion of HBFC in many ways.
3. There should be proper job rotation in the branch so that every officer is familiar with
the work of all departments.
4. Before making any decision in planning its activities, should properly forecast to see
that the decision which they are likely to take as any good or bad implementation for
the Organization and for the economy as a whole.
5. In decision making every one should be involved, which will also improve
relationship between management and employees. All the department head should be
given full authority regarding decision-making.
6. HBFC should adopt once again aggressive strategy because the number of its
competitors is increasing day by day.
7. The communication system of the bank should be improved by installing new
equipments. Because Co-ordination can be improved among different department by
adopting proper channels of communications.
8. Regular staff appraisal will screen the shortcomings, with this reinforcement factor,
desirable performance can be obtained and every employee will get fair treatment.
9. To have big promotion of customer in market product with good attributes should be
offered at reasonable price.
10. Manager should try to reinforce work on employees in positive ways. Rewards should
be given for their better performance. Benefit should be given. They should be
properly motivated to increase efficiency.
11. Management by Objective needs to be introduced immediately. It will help improve
in the functioning of bank and will lead to greater participation. In MBO system there
is proper coordination of employees at all levels.
12. Loan procedure should not be cumbersome and should be made easy, so as to ease the
customer.
13. While auditing advances the auditor should see that advances are sanctioned
according to SBP rules and regulation.
14. As mentioned above employees take undue leave from bank. Unnecessary leaves are
given to the employees. Those who are frequently absent must be punished. There
should be a cut in the leaves.
15. Unions should not be over powered. They should not always be encouraged. In order
to solve the problem of unions, law must be clear to all members and there should not
be any concession to the one who has done wrong.
16. Since in HBFC there is overlapping of functions, therefore each department should be
functionally defined, and all those departments should be amalgamated whose
functions are similar, to reduce cost.
17. In order to mitigate inefficiency, the management should adopt some management
principle i.e. proper job, clear cut division of work should be introduced.
18. The advances department should be made free from political influence in order to
enable the deserving persons to get the loan.
19. The bank should prefer tangible securities before advancing loan.
20. The bank should take care that the loan that it has advanced is being utilized for the
purpose for which it is advanced.
21. There should be proper training (Up to date) for newly selected employees.
22. There should be refresher courses for officers then to tackle marketing complexities.
23. HBFC should also send employees for training and seminar arranged by other banks,
so that they can compare the procedures adopted by other Bank, and adopt what ever
better and new.
24. Salaries should commensurate with job, for this purpose a proper job analysis system
should be introduced.
25. Transfer for punishment purpose should be avoided because it not only disturbs the
prevailing branch conditions but it also affects employee's efficiency. More over the
transfer should be made free from union influence.
26. Before transferring a person to a place, his qualification and experience should be
matched with responsibilities of the post.
REFERENCES AND SOURCES USED

MANUALS
1. The House Building Finance Corporation, Operational Manual Volume I.
2. The House Building Finance Corporation, Administration Manual.
3. The House Building Finance Corporation, Human Resource Manual.
4. The House Building Finance Corporation, Management Information System Manual.
5. The House Building Finance Corporation, Legal Manual.
6. The House Building Finance Corporation, Recovery Division Manual.
7. The House Building Finance Corporation, IT Manual.
8. www.hbfc.com.pk

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Government College Of Management Sciences Peshawar.

Mehtab Ali Shah

PHOTOCOPY OF THE INTERNSHIP CERTIFICATE

Brief introduction of the Branch where you did

Introduction of all Departments.

4.1.5. Accounts Department.

CHAPTER 8. CONCLUSION AND RECOMMENDATIONS

Low and middle income groups of population.

Responding to housing needs of low-income groups is a social responsibility, beyond that

1.4. OWNER SHIP

Growing rate of Housing Demand:

9.0% (1.5 million)

*Based on 1998 survey.

400,000 per year

1.2. BRIEF INTRODUCTION OF ORGANIZATION BUSINESSS SECTOR

5. Hassle free investment & repayment facility.

Applications may be accepted from persons holding powers of attorney in the

WHAT DOCUMENTS ARE REQUIRED?

(i). LEASE HOLD PROPERTIES:

Site Plan of the plot.

Bank receipt for payment of fee as prescribed.

Affidavit on prescribed form in cases of investment of above Rs.1 million, if on the

Medical certificate of the applicants or guarantor from the authorized medical

(ii). FREE HOLD PROPERTIES:

Non-encumbrance certificate in the prescribed form for the last 12 years.

Mutation in favor of the applicant.

Original approved building plan with a spare copy.

Letter approving the building plan.

Income certificate of Government department/reputed organization on the letter head

Computerized National Identity Card (CNIC).

Original building plan approved by an authorized officer of the District or Union

A certificate (Letter of Assurance) from District Collector or his nominee in Form

Computerized National Identity Card (CNIC).

The repayment capacity shall be calculated in the manner as explained in paragraph

POLICY FOR APPROVAL OF INVESTMENT:

LOCATION-WISE INVESTMENT LIMIT:

In all Urban areas including

areas of Tehsils planned for

Income accruing through regular employment shall be substantiated by a certificate

Incomes accruing through agricultural land shall be substantiated through certificates

Report of Zonal Head which will be first examined by a Committee consisting of

CALCULATION OF REPAYMENT CAPACITY:

For Construction of house:

1. The plot is 400 sq.yds or above;

For Purchase of house/flat:

Proposal Form HF-1.

Photocopies of title documents.

Zonal Head (CM)/ Manager

Manager/In charge (Admin),

b. If the Committee is Headed by a General Manager

Zonal Head (General Manager )

Manager/In charge (Admin),

Regional Director, Region-A

Above Rs.500, 000/= and up to Rs.2500, 000/=

Zonal Head, Abottabad

d. REGIONAL CREDIT COMMITTEE REGION-B:

Regional Director, Region-B

above Rs.500, 000/= and up to Rs.2500, 000/=

Zonal Head, Lahore

Executive Director (Operations)-Member

AboveRs.500, 000/=and up to Rs.7500,

Executive Director (Recovery) -Member

A computerized statement of the investment applications received, approved, filed, rejected