Sunteți pe pagina 1din 41

Detailed Description of the Tasks Assigned During my internship I learnt about different segments which are as follow: 1) I learnt

how to open different Accounts of different customers. 2) I learnt how to record the Inward Dak of the bank. 3) I learnt how to record the Outward Dak of the bank. 4) I learnt about the Inward Clearing. 5) I learnt about the Outward Clearing. 6) I learnt how to work as Customer Service Officer (CSO) 7) I learnt procedure of opening of the Letter of Credit. 8) I learnt how to make Demand Drafts, Pay Order and Call Deposit Receipt. 9) I learnt how to make the Outward Bills for Collection. (OBC) 1. Inward Dak of the Bank Inward Dak is the dak that is received in the bank. This dak can be from anywhere from any part of the Pakistan or any part of the word. Now the dak can come from any part of the world because of the international connection or agreement with the countries. Procedure of recording the Dak: There is a register that is called inward dak register. In this register every inward dak is registered and recorded. When the dak is received in the bank it is first opened and in inward dak register a serial number for that dak is allocated then reference number and subject of that letter is recorded. At the end of the recording initials are pasted by the person who is recording the inward dak. Once the dak is recorded then it is separated department wise i.e. general baking department, advances department, and foreign exchange department. After this separation all the dak is disbursed throughout the banks departments. The disbursement of dak is done at quick basis because the some daks are more important for the official because they have to respond to their head quarter.

2. Outward Dak of the Bank Outward dak of the bank is the opposite to inward dak of the bank. In outward dak we send to the outsiders. This outward dak can pertain to any bank, customer or can be sent internationally. Procedure of recording the Outward Dak: There is a register that is called outward dak register. In this register all those daks that will be sent out from the bank are recorded. For recording the outward dak first we write the address of the personality to whom it is being addressed. After pasting the addresses then we give the number on envelop and the number is also recorded in the register. Initials are also pasted on it. Then these daks are handed over to the courier services with which the bank has the agreement like MCB Muree Road branch has the agreement with OCS couriers. When the dak is handed over to the person he gives the receipt against each dak this receipt contains the acknowledgement of receipt of dak and the serial number this serial number is recorded in the outward register for proof. If any dak is misplaced, we can confirm them from the couriers by this number for our dak.

Customer Service Officer (CSO) Customer Service Officer is the person whose primary function is to facilitate and entertain the customers needs. As CSO I performed the following functions; Issuing of cheque book request form Issuing of the deposit slips Issuing of ATM Cards form Issuing of form for online funds transfer, DD form, and PO form. Issuing of Bank Statements Entertain the Balancing inquiry of the customers.

Inward Clearing: Inward clearing means those cheques that are drawn on us but they are presented for payment at any other branch of any bank and are sent by that bank to us through NIFT for clearance . Before discussing this issue we must also know about the institution that helps the banks in clearing the cheques. NIFT (National Institutional Facilitation Technologies) is the institution that has the network all over the Pakistan of collecting the cheques from different banks branches and then allocates the cheques to the relevant banks for clearance. This institution acts as clearing house which was previously performed by the State Bank of Pakistan and if there is no branch of SBP then this function was performed by the National Bank of Pakistan. Now this institution performs this function. For example NIFT will allocate the area for a person who will collect the cheques from branches of that area then it will arrange them and will deliver these cheques to the relevant branches. When these cheques are received by the clearing department they first do the scrutiny of cheques to check whether the cheques are in proper order or not. If the cheque is in its proper form and there are sufficient funds for payment then the customer account is debited with the amount and if there is no sufficient balance or there is any other reason for nonpayment a form called cheque return memo is attached with and cheque is returned to the NIFT who in turn will return it to the relevant branch. Procedure of Inward Clearing 1. Scrutiny of Cheques 2. Signature Verification 3. Balance Verification 4. Debiting the account 5. Return/Dishonor of cheque 6. Advice preparation

7. Notification to NIFT Explanation 1. Scrutiny of Cheques: scrutiny of cheque means verifying the cheques in different angles. A scrutiny of cheque can be done in following way: we see, We see that is this cheque is drawn on us or not. Date mentioned on the cheque either it is pre dated or post dated. If the cheque is post dated then cheque is returned on the ground of post date. Whether the amount in words and figures are same or different. Is the cheque mutilated or not. If cheque is crossed then is the crossing is in proper format. Is there crossing on the cheque if the cheque is of huge amount. Endorsement signature are verified Clearing stamp is also checked.

2. Signature Verification: Once the scrutiny of cheque is done next stage comes to verify the signature of person on the cheque with the signature that is stored in the bank computer system. If signature is verified (matched with specimen signature) then customers account is debited. If signature is different from that of specimen signature then cheque is returned. If there is any doubt on signature then we call the customer for verification that is the cheque issued by the customer or not for safety purpose. If customer signifies then he is called at bank for verification of signature. But this happens very rare this happens only for those customers who are valuable to the bank business. 3. Balance Verification: once the scrutiny of cheque is done then next step is to check the balance sufficiency. Here each customers balance inquiry is made for honoring the cheques. This balance verification is mandatory and if the bank makes the payment without checking or verifying the account of the customer and there is no such sufficient funds in his account then the banker will be responsible for this wrong action. 4. Debiting the Account: In 3rd step the balance verification is done. If there is sufficient balance in the account then the customers account is debited. It means the amount is deducted from the account of the customer. If there are no

sufficient funds in the account of the customer then we will dishonor the cheque and move to the next step. 5. Dishonor/Return of Cheque: we divide this point in two sub categories, i.e. Dishonor and Return. Dishonor of cheque: if there are insufficient funds in the account of customer then cheque is dishonored and a cheque return memo is also attached with it and bank charges the fee named as bank charges. Return of Cheque: here other than insufficient balance bank can return the cheque for several different reasons, these can be either: We see that is this cheque is drawn on us or not. Date mentioned on the cheque either it is pre dated or post dated. If the cheque is post dated then cheque is returned on the ground of post date. Whether the amount in words and figures are same or different. Is the cheque mutilated or not. If cheque is crossed then is the crossing is in proper format. Is there crossing on the cheque if the cheque is of huge amount. Endorsement signature are verified Clearing stamp is also checked.

6. Advices Preparation: After passing through scrutiny of cheque through Dishonor and return of cheques next comes the advice preparation. What is advice? Advice is a document that is directed to the regional head quarter of bank notifying about the clearing of the cheques. We send this advice to our regional head quarter. In this advice we give the brief detail about the cheques that were received minus the cheques that were returned or dishonored by the bank. Main logic of sending this advice to the regional head quarter is to adjust the reserves of their banking system. Regional head quarter receives different advices from different MCB Bank branches. Specimen of Advice By amount of funds transferred

MCB 612



Cheques Received Cheques Returned Total SIGNATURE

1,500,000 300,000 1,200,000

7. Notification to NIFT: as we send the advice to our regional head quarter similarly we send a notification to the NIFT not the advice. NIFT then hands over this notice to the banks. On receiving this information the banks that had sent the cheques to us will credit the accounts of the customers if the cheques are honored by us otherwise the bank will hand over the cheque to the customer along with the cheque return memo. Important points about Inward Clearing Insufficient Funds: if the bank dishonors the cheque of the customer on the ground of insufficient funds then the bank charges the bank charges on it. But these bank charges are only deducted if there are sufficient funds i.e. at least Rs. 200, because the bank charges are Rs. 200 for insufficient funds. Its general entry is as under Customers account Bank Charges DR. Cr.

Two different vouchers are used for above two heads i.e. dr. and cr. One voucher will be for DR. and one voucher will be for Cr. Error made by the Customer. If any of the customer makes error on drawing cheque then bank also charges the commission on such error. However if any error is made by the bank then no commission is charged from the customer.

Outward Clearing: Outward clearing is the opposite of the inward clearing. In inward clearing the cheques is brought in by the NIFT in our branch. But opposite is the case here. In outward clearing branch receives the cheques that are presented at our branch but they are drawn on other branches. These cheques are collected throughout the banking hours. In this section bank only hands over the cheques to the NIFT and NIFT separates the cheques with respect to branch names. Here only number of instruments are counted and handed over to the NIFT. As I did my internship at Rawalpindi when the cheques are sorted for outward clearing, the cheques pertaining to Rawalpindi and Islamabad are temporarily posted in the customers account under the head Float. When cheques are realized they are permanently transferred to their account otherwise that float is taken away from the account of the customers. Procedure of Outward Clearing In outward clearing the person must be the account holder of the bank. The cheque must relate to different branch of different bank. The person giving the cheque for collection must first fill in the slip and then present the cheque to the clearing officer. Clearing officer signs and stamps the deposit slip and handover the counter slip to the person and keeps the cheque and remaining part of the deposit slip. For Outward clearing the clearing officer receives the cheques whole day but he sends only those cheques for outward clearing that are received upto 3:00 PM. Its main reason is that NIFT comes and

collects the cheques at 3:00 PM. The cheques that were received after 3:00 PM are also collected but they are sent for clearing next day for clearing. Steps involved in Clearing for Outward. 1. First we differentiate the cheques with respect to the bank on whom they are drawn. 2. Next different stamps are pasted on the face and back of the cheque. Following are the stamps that are pasted on the cheques for Outward Clearing. Clearing Stamp: this stamp is pasted on front of the cheque for clearing. This stamp is pasted with the date of next working day. Next working day is pasted because on the next day the cheques are normally cleared. Payees Account will be credited on Realization: This is used to stamp on the back of following instruments. 1) Cheque, 2) Travelers Cheque. 3) Pay Order. 4) Speed Cash. This means that the account of the payee will be credited provided that cheque is accepted by Drawers bank otherwise not. This stamp is normally used when the cheque is in the name of the customer. Received Payment for MCB: this stamp is used where the cheque is in the name of the MCB Bank. An important thing to remember is that if the cheque or DD etc. contains the name of the payee and the name of the bank then both stamps are used by the bank i.e. Payees account will be credited on realization and Received payment for MCB will be pasted on the back of the cheque or Demand Draft. If by mistake you paste the yesterdays clearing stamp on the face of the cheque then you will cancel it for this purpose you will paste the new date stamp which is required by the bank and Our previous clearing stamps is cancelled is written on the back of the cheque. Some banks have made their stamps with the same wording. After pasting all different types of stamps then all cheques are separated according to their city areas from where the payment will be realized. Once separation is done a paper

note issued by the NIFT is attached by which contains the information about the number of cheques and their total value. These packed instruments are handed over to the NIFT representative.

Outward Bills for Collection (OBC) Outward bill for collection is a procedure by which cheques are collected (realized) by the bank. The need for the OBC occurs when there is no facility of NIFT. Procedure for Issuing the Outward Bills for Collection In order to make the OBC following procedure is adopted. OBC Form: this OBC form is in duplicate containing the name of the bank on whom the cheque is drawn. For example, a cheque drawn on Habib Bank Limited. In To section we will write the name of Habib Bank Limited name we will also give the OBC number in OBC No. section. This number is taken from the OBC register which is the series of number coming in sequence from the last OBC in OBC register. Next we will write the name of person who has the account in that bank. This name is normally written on the cheque in signature area. At the end we will write the amount of cheque. OBC Register: in OBC register first we write the OBC number which is written on the OBC form. Actually on OBC form OBC number is taken from this registers. Then on the next column we write the name of the account holder who has the account in our bank and in the very next column the amount that is written on cheque is recorded. At the end the instrument is posted to the relevant bank.

Realization of OBC: if there are sufficient funds in the account of the customer they make a demand draft in the favor of our bank and deliver to us. This demand draft is ultimately transferred to the account of the customer.

Demand Draft, Pay Orders and Call Deposit Receipt: Demand Draft As we know that pay orders are issued and paid only within the same city of issuing bank, but the demand draft can be issued Rawalpindi and can be paid in at Lahore or any other city of Pakistan. Demand drafts are made for the beneficiary for payments, funds transfers etc... These are made for outstation branches of the concerned banks. An advice is also made for the confirmation of the draft made. These are also noted by computerized system and a serial number is issued from the computer system. One important thing to remember is that if the demand draft is made below the value of Rs. 100,000 then advice is also sent to the concerned bank. But if the value of demand draft is greater than 100,000 then along with their advice they are also online posted to the Pak account of the relevant bank. Pay Orders

Pay orders are issued by the bank that are paid or realized within the city of issuing bank. It means MCB of Muree road branch Rawalpindi will issue the pay order in the favor of any branch of MCB that is located in only in Rawalpindi Pay orders is the property of person or company that has to take benefit of the amount being pay ordered by the concerned person. Pay orders are made for the payment of fees, tender or issued for the payments of dealings. These are required for the proof of payments made between the bank and the customer in the favor of beneficiary. These are noted in printed block letters and yearly serial numbers are issued from computerized system.

Requisites of Demand Draft: following are the requisites for Demand draft (DD): Customer Request for Funds transfer: this is the form is used to issue either for pay orders, demand draft or call deposit receipt. In this form we need the customer or applicant information and the detailed information about the person or the company to whom the funds will be transferred. In applicant section we need the name of the applicant his ID card number after seeing the original, CNIC the purpose of transferring the funds is also mentioned. In beneficiary account section we need to know the name address and other relevant information for issuing the DD or PO. One main important thing to remember for this section is that you have to make the sure that the address provided by the applicant is correct otherwise the DD or PO will be issued in the title of wrong person which means that person will be entitled to take the payment. Demand Draft Issue Register: in this register we write the name of the person for whose favor the DD is issued. The amount of the DD is mentioned and a control number is also written. This control number is similar to that of OBC number.

Procedure for the issue of DD: DD is issued in the following way: 1. 2. Customer request for fund transfer form is filled as given above Credit and Debit vouchers are made: here we divide it in two shapes. (1) Debit

and Credit vouchers against cash payment and (2) Debit and Credit vouchers against amount drawn from the account. Let us see them one by one. Debit and Credit voucher against cash: here the transaction will be passed in the following manner Cash account DD Payable entry will be made. Customer Account DD Payable Dr. Cr. Dr. Cr.

Debit and Credit vouchers against payment from the account: here following

3. Advice Preparation: Advice is prepared if the value of the DD is less than the Rs. 100,000 if the value exceeds the Rs.100,000 then the amount is transferred by online funds transfer method. 4. After doing all the documentation the DD is issued.

Account Opening The general banking performs various functions among them the first and most important function is account opening. The process of opening an account is very simple and anybody who would like to open his account can do it easily without any difficulty. Types of Accounts There are three types of accounts CURRENT ACCOUNT SAVING ACCOUNT TERM DEPOSITS ACCOUNT

Procedure for Account Opening 1) Application Form The customer would like to open his account is required to meet with the manager or second officer, who will give him an APPLICATION FORM specifically used for account opening. Green color-coded Application Form is available for each type of account. So the form is given to the customer to fill in for opening a related account. 2) Specimen Card (SS) SIGNATURE SPECIMEN CARD is the card is compulsory for opening the account. Without getting the signature of the customers you cannot open the account. These are the signatures that verify the cheque because these cheques are kept by the bank. This card contains four signatures of an applicant, applicant account number, account type, branch code, and title of account. It is attached with an application form. Banker uses this card at the time when he receives the cheque; he compares customers signature with the signature on the cheque for avoiding fraud. Manager has every right not to accept this contract if he is not satisfied by the details provided by the customer. 3) Account Opening Register The manager records the necessary details into this register and allots an account number from this account opening register. This register is maintained for each type of account and the account numbers are allotted serially. After opening a saving and current account every applicants data is entered into the computer to maintain a safe record and application form is properly filled so that it can be available when necessary. For fixed deposit only that application form is needed this is prepared manually, because most of the procedure of fixed deposit is done manually. 4) Cheque Book Cheque book is issued to the customer when the bank accepts the account opening application form.

Letter of Thanks Bank prepares two LETTER OF THANKS one for the new customer and the other for his introducer. This act promotes good will among the customer and the introducer. Types of Customers and Documents Required Following are the different types of customers who can open their account with the bank with the following documents. 1. Individual Copy of CNIC Next of Kin CNIC Income Proof National Tax Number Copy of CNIC Request of account opening on the letter head with signatures and stamp

2. For Business

3. For Companies: companies are divided into following sub categories i) Sole Proprietors:
Copy of CNIC National Tax Number Letter head request Surety Bond (request on Rs. 100 stamp paper) Partnership deed Partners CNIC National Tax Number Letterhead request signed by all partners and stamped Certificate of incorporation

ii) Partnership

iii) Private (Ltd.) Companies

Certificate of commencement Directors CNICs Memorandum of Association Articles of Association Board of Resolution (Persons who will deal with the bank

iv) Public (Ltd.) Companies

Letter of Credit Definition of letter of credit.

A letter of credit is a written instrument issued by a bank authorizing the seller to draw in accordance with certain terms and stipulations legal forms, that all such bill will be honored. Reasons for letter of credit 1. Exporters are uncertain of the importer capacity to pay. 2. The importers are unwilling to pay the amount unless the goods are actually shipped and the documents received by the bank. 3. In case of nonpayment the seller should be assured to legal rights in foreign country. 4. There should be an agency which should meet the sellers need of finance when the goods are shipped. 5. The commercial banks come to the help of exporters and importers. 6. The importers can undertake the obligation to pay to the exporter for the purchase made by the importer and this is usually done through a letter of credit. Parties involved in Letter of Credit There are four parties involved in a letter of credit. Account party Issuing party Exporter Paying or negotiating bank

Account party The buyer or the importer on whose account and request the letter of credit is opened is known as account party. Issuing Party The bank which issues or opens a letter of credit at the request of importer is called the issuing bank. Exporter The seller or the party for whose favor the letter of credit is drawn is the third party or it is also called beneficiary. Paying or negotiating bank

The paying bank in the exporters country on which the draft is drawn is called paying bank. Operation of a letter of credit 1. The importer of buyer contacts the seller in foreign country for the purchase of a particular good or goods. 2. He settles with the seller the quantity and quality of the goods to be importer. 3. The sale contract also includes the method of payment. 4. The importer then submits an application to his bank for the issuing of an individual letter of credit. 5. The form on which the importer employees for a letter of credit is supplied by the bank. 6. This form contains all the necessary details discussed between the importer and exporter for the shipment of goods which include the description of merchandise, port of shipment, port of unloading, the documents against which the bank is the honor the draft, the total value of the goods etc. 7. If the documents supplied by the seller conform to the terms of contract the exporter will be paid. 8. The issuing bank will not be responsible if there is any fraud or the merchandise does not conform to the sales contract. 9. The obligation of the buyers bank is, To issue letter of credit on agreed terms and condition with the buyer. To have a proper examination of the documents. To honour draft when presented with proper documents.

EXECUTIVE SUMMARY: The Department of Administrative Sciences offers Masters degree in Business Administration. They are giving the best education and are offering for specialization, financial management,

marketing management, human resource management and computer application to business. An important program is six to eight weeks internship with any recognized institution. I decided to take up Askari Bank Limited for my internship because it is a competing Bank nowadays and gives a good training to the internees. So in order to learn more this was my choice. This report is about my internship that I have undergone at Askari Bank Limited Multan Branch from 2nd June 2008 to 18th July 08. During my internship I am able to learn practical aspect of business, and get good working experience. On the very first day of my internship I reported to Operation Manager Mr. Noor ul Islam. He gave me small introduction of the Bank and introduced me to the staff of the Bank. Every internee is rotated among the Banks departments and so was I. This rotation is done in order to have general concept regarding Banks functions, operations and policies. In this rotation the stay in department is usually a week. I have learned more about the Basic Banking, Credits and Foreign Trade department and have given below the caption of activities I was involved in during the period of six weeks. During my internship I found that Askari Bank is a best Bank in Multan because most of the Exports and Imports in Multan are done through this Bank. Multan is one of the cotton growing cities of Pakistan. Most of the businesses in Multan are directly or indirectly linked to cotton that is also the case with Askari Banks clients. Because Multan is an Agricultural City, and its major export is Cotton and Mango. So its export is done on seasonal basis. In the season of cotton and Mango export Askari Bank get its target easily but difficult for it to get its target in the off season. Low profit rates used to be one of the major reasons for not meeting the deposit targets. The profit rates on Askari deposit schemes were quite low when compared with other Banks especially with the National Saving Centers, but now Askari Bank is giving a comparatively high profit rates to its customers. In todays every customer is a rational customer, he knows the value of money and wants a best return on his money. INTRODUCTION TO BANK: Askari Bank Limited (AKBL) works as a Unit of Army Welfare Trust was established for the Welfare of Army Officials. The office of Army Welfare Trust is situated at AWT Plaza, Rawalpindi. AWT offers the AWT Saving Scheme to the army officials only. AWT has its units as under: Askari Associates.

Askari Leasing. Askari General. Private Business. Textile Mills. Cement Industry. Askari Commercial Bank.

Askari Bank Limited was incorporated on October 9, 1991, as a Public Limited Company, and is listed on Karachi, Lahore and Islamabad Stock Exchanges. The Bank obtained business commencement certificate on February 26, 1992 and started operations form April 1, 1992. Askari Bank is scheduled Commercial Bank and is principally engaged in the business of Banking as defined in the Banking Companies Ordinance 1962. Askari Bank Limited continues to scale new heights in all areas of its operations. The safety and security of depositors funds, high productivity and optimum use of technology are the hallmarks of its corporate strength. In 1994, AKBL earned international recognition as Asia Money Award and the title of Best Commercial Bank of Pakistan for the year 1994, while Euro money declared the Bank as best domestic Bank of Pakistan for the year 1995. ASKARI BANK LIMITED MULTAN Askari Bank Limited Multan was inaugurated on December 28,1994. It is located on Abdali Road Opposite to PIA Office. The location is connected to all the main trade centers in Multan. It is a prosperous branch streaming towards great achievements. At the time of its establishment the factored who were considered are as follows Multan is zone covering a large population. Multan City is linked to many big cities. Agro based area constituting growers and gainers Army Offices & Fort Colony Educational Institution

DEPARTMENTS: The bank has following department: Account Opening department ATM Department Credit Card Department Account Department Credit Department Remittance Department Foreign Trade Department Cash Department

ACCOUNT OPENING DEPARTMENT Borrowing funds from different sources has become an essential feature of todays business enterprises. But in the case of a bank borrowing funds from outside parties is al l the more vital because the entire banking system is based on it. The borrowed capital of a bank is much greater their own capital. Banks borrowing is mostly in the form of deposits. These deposits are lent out to different parties. Such deposit creation is done through opening an account in the Bank. In AKBL Multan Mr. Sheeraz Hassan is operating the account opening department along with performing some auxiliary functions of Check Book Issuing TYPES OF ACCOUNTS In AKBL, there are the following types of accounts: Current account. Saving Account. Askari Special Deposit Account.(ASDA) Basic Banking account Term Deposit.

CURRENT ACCOUNT In current account there is no interest on it. It is for only transaction purposes. They are paid on demand. When a banker accepts a demand deposit, he incurs the obligation of the paying all cheques drawn against him to the extended of the balance in the account. As there is no profit paid on this account it is also called chequing account because cheques can be drawn on it. Current account is mostly opened for business. SAVING ACCOUNT The purpose of this account is to induce the habit of saving individuals in the neighborhood. The minimum deposit for opening the account is Rs.1050/- (as obvious in the Annexure). Though individuals open such accounts for saving purpose, persons belonging to Armed forces and different military institutions are free to use this account on current basis. ASKARI SPECIAL DEPOSIT ACCOUNTANT ASDA account is an interest bearing current account interest is paid. The payment of return is monthly, where as the rate of return with aspect to the amount of minimum deposit clear from deposit schedules in following table). It is also chequing account because cheques can be drawn on it. It is necessary for this account that the client must maintain a minimum balance of Rs. 50,000 at the end of the month. Thats why it is similar to current account. It is mostly opened by Business but individuals too open this account.

Tax of 0.3% would be deducted on ASDA if withdrawals are more than Rs.25,000. TERM DEPOSITS A term deposit is a deposit that is made for a certain periods of time at the end of the specific period. the customer is allowed to with draw the principle amount . AKBLs Term deposits are of types clear in the deposit scheme in the table). One of them is Askari Advantage one month. The rate of return on this account is set by head office. The term deposit account vary one month to 1 year for all following accounts (as clear from Deposit Scheme in the table). The amount of profit is given to depositors in three ways: By cash

By sending a bank Draft to depositors Home address or Officers or whichever is specified as mailing Address. The amount is credited in any one of the checking Accounts of the depositor. ACCOUNT OPENING PROCEDURE Fro the chequing accounts (C/A, ASDA, SAVING), there are different types of account holders are required for all these types of account holders. The operation /procedure requirement that is needed for Individual Account differ greatly from Joint account proprietorship Partner ship , Limited Company and Club society or Association as explained below. INDIVIDUALS ACCOUNT When a single man or women opens an account in his/her own name and has the right to operate it is called individual Account. DOCUMENTATION REQUIREMENT For literate person copy of National Identity Card is required as a primary requirement. For illiterate person and Veiled Women, along with the copy of National Identity Card requirement he or she must come in person for opening the account. OPERATION The person place a Check Mark in the type of account and type of operation required He/She fills in part-I of the form , a fix his /her either two or four similar signature (or thumb expression in the signature space and get it introduced and signed by a person who already has an account with the bank and write his account no in the specific rows in a specific space. The person fills in next of Kin position where he/she father, mother, husband/wife or any other relatives name, his /her address, phone no and affix his/her signature to certify this

requirement. This requirement is needed because in his/her absence bank can have correspondence with the specific person. The person put her /his signature ( or thumb expression) on the signature Specimen Card (SS CARD) similar in the area on the form. One the back of S.S card mailing address, telephone no, Person to contact and introducer space is filled in. All these requirement are necessary for future The person deposits the initial amount for opening account on to the cash counter. The person put his signature on form -A (check book requisition) on two places in

authorized signature and fills in the Title of Account space by writing his name. If the person put his signature in Urdu or any language other than English, he signed a Vernacular form where under take that affixed signature are original and his own signature and two postal size photos are needed. The next day is the opening of account. JOINT ACCOUNT When two or more persons, neither partners, nor trustees, open an in their name is called joint Account. Husband and wife or two persons of same sex can open joint account. DOCUMENTATION For joint account copy of National Identity Card of all the persons is obtained other things remaining same as in individuals account. OPERATION The person checks the type of amount and type of operation required in the respective box on the form. The persons fill in the Part-I and part-II in the form. Signatures of both persons are obtained on the form in the area specified for signature and S.S. Card. In the title of account space names of all the persons are mentioned. Accounts holder specified in the form that they will operate the form singly or jointly.

PROPRIETORSHIP ACCOUNT When an owner of a firm operating singly, opens an account in his firm name, this account is called a proprietorship Account the proper himself liable for all his acts. DOCUMENTATION REQUIRED For this kind of account, an application for opening the account on the firm letter -pad (having the firm name) is required along with the NIC Card of proprietor. OPERATION All operation remains the same except that the firm name is written in the Title of the Account area and signature of the proprietor are affixed in the S.S. Card and the area specified for signatures on the form.

PARTNER SHIP ACCOUNT The account is opened in the firm name and all partner designate one two persons to act on behalf of the partner ship firmer all acts on behalf of firm. The partners in the partnership firm are liable for the acts of the firm jointly and severely. Every partner has in a firm has an implied authority bind his co. partners by drawing and enclosed cheques. DOCUMENTATIONS Copy of N.I.C card of all partners Application to open the account on the firm letter pad. Partner ship deed in case registered partnership firm. Letter showing the implied Authority of one or more partners to act on behalf of the firm. In case of non -registered partnership firm, understanding on behalf of the firm to remain Name, address of all partners is written on the pad.

liable for all acts of the firm. OPERATION All other requirement remain same except that the form is dully signed by all partners cards are signed by all those partners who will act on behalf of the firm and along filling part-I , Part-Iv is also filled. LIMITED COMPANY ACCOUNT This account is for limited companies. In order to facilitate their transaction with outside parties, bank provides many facilities. DOCUMENTATION REQUIRED Memorandum of Association. Articles of the Association Resolution of the Board of Director. Certificate of Incorporation. Certificate of commencement of business N-I-C

OPERATION The persons authorized in the Resolution of the Board of Directors put their signatures on S.S Cards. Next of kin requirement is not need in case of a Limited Company. After completing each and every formality, introducer signature is verified by S.S card and is stamped Verified customer signatures are admitted by stamping Admitting near signature and again signatures on S.S card are admitted in the same way. The same process of verification and admission of the signatures is repeated on Form-A and next of Kin area.

After completing each and every formality, Accountant is open in the computer by writing name, address, A/C Number etc. LETTER OF THE THANKS At the start of the letter 2nd day, AKBL issues letter of thanks to Account opener and account opener and Account Introducer for the trust the have on AKBL. CHECK BOOK ISSUING Check books are issued only for checking account such as current Account, saving Account and ASDA Account. They are not issued for other fixed and term deposits because of their Long term Accounts nature. ISSUING PROCEDURE Signatures on cheque book requisition are verified by matching with signatures on SS. Cheque book leaves number, account number, account holders name are mentioned

in the cheque- book is made by mentioning the and the total of sum of excise duty and provincial tax. The name of A/c holder and date of cheque book issuance is written on cheque book requisition the account-opening officer puts his initials on requisition leave. A/c number is stamped over the leaves of cheque book and finally authorized person affix his signature over the debit voucher and he voucher is attached from the cheque book and is handed over to the customer . RECEIVING INWARD CHEQUES Another responsibility and function of account Opening Department is to receive Inward cheques for collection of other Banks as well as of AKBL . Then these cheques are sent to clearing official who clears these checks at SBP from other banks. ACCOUNT CLOSING Account is closed on the written request of the customer AKBL free of cost. But to surrender the cheque book yet if some leaves are yet to be write to the bank as a necessary requirements for closing the account. PROCEDURE The customer for individuals account write an application to the manager of the bank an a simple paper about the closing of his account with the bank (In case of proprietor ship partnership and limited company account the application should be written an firm or company letter head) The individual or in case of other type- proprietor firm and company surrender the cheque book to the bank. The cheque book is then torn from one side and is attached with the application.

In case of Ltd. Company account resolution of the board of directors is also obtained to attach it with the application. The account opening form of the account holder is taken from the account-opening file, and the application, cheque book, and resolution of board of directors in case of limited company account are attached with the form. Lastly, it is written in Red Ink on the form that account closed and Date of account closing. EVERYDAY POSTING Following transaction of cheque book is posted:Dr_____________ party A/c Rs 5/leave. ATM- CARDS DEPARTMENT This department deals in issuing ATM-Card, term deposits and Askari Bachat Certificate. Mr. Sheeraz Hassan deals this department. ATM CARD ATM Cards are only issue to Account Holder ISSUING PROCEDURE The person, first open the account within the blank. Then he fills the ATM application form in which name of account holder, Fathers name account number and N.I.Card number are mentioned. A copy of N.I. card is also attached with the application form. After completing this process, the application package is sent to head office 50(for 10 leaves)

ACBL head office takes a period of 3-4 weeks for preparing and processing of ATM cards. First, list of card holder is issued and then after 15 days cards are send to ACBLs issuing branch. The card and list are not sent simultaneously in order to avoid any mishandling. ACBL takes Rs. 350/- for 1st time issuance as charges for a card Biannually takes Rs 75.

ACCOUNTING DEPARTMENT Accounts department is a department which deals and checks all the activity of all the department .It also deals in expression of finance of the bank. Salary payment is also one function of the bank. CHECKING BANKS DAILY ACTIVITY Accounts department deals and checks the entire working of the Branch; all the vouchers that have been posted at the computer are scrutinized in accounts department. The End of Day i.e. computer print is also received from the computer. The next day the activity is separated some

statements from the End of Day. Then next day activity separated some statements from the End of Day. The vouchers are sorted out head wise. The vouchers are matched with the entries in the statements. Any abnormality if occurs, is immediately dealt with. All the vouchers and instruction are checked individually are checked individually against the computer printouts. After checking they are signed by Mr. .Naeem Shehzad and the internal auditor Mr. Shafiq. OTHER ACTIVITIES Preparation of daily bank positions statement Payment of salaries Preparation of the statements Depreciation calculation Lockers Issuance

REMITTANCE DEPARTMENT: The need of remittance is commonly felt is commercial life particularly and in everyday life generally. The main function of the remittance department is to transmit money from one place to another. By providing this service to the customer, Bank earns a lot of income. Also customer is able to meet its day to day financial requirements. Demand Draft: It is an instrument payable on demand for which value has been received, issued by the branch of the Bank drawn i.e. payable at some other place (branch) of the same Bank. If two Banks are involved then the DD is sent to other Bank but in other case it is handed over to the applicant. Issuance Procedure: A demand draft application is given to the customer, he fills in relevant information and signs it. The officer checks the information form. The Bank charges such as commission, excise duty is charged as per effective schedule of charges. If he fills the tax exemption form, tax is not charged. In case of cash deposit, the cashier counts the amount and signs the DD application and enters it in the register. Then the officer of remittance department signs it and operation manager counter signs it. The entry is made in the DD issuing register, DD is given to the customer. Vouchers are prepared and posted. DD advises are printed and mailed to the respective branch.

Payment Procedure: The Bank receives DD.

The DD credit advice is received through mail. The numbers are checked and signatures are verified. An entry is made on the DD payable register and the vouchers are made. DD credit is attached with the vouchers and given for posting to the computer. When DD is received the test numbers are checked and the payment is made. Vouchers are given for posting and the entry that was made in the register is closed i.e.

DD payable is Nil. Pay Order: It is an instrument issued for payment in same city. Pay order issued from on e branch can only be payable from the same branch. It is normally referred to as Bankers cheque. It is also called confirmed cheque, because Bank issues this on it own guarantee. Issuance Procedure: The standard form is given to the customer. He fills in the details and signs it. The concerned officer checks the form. Bank charges (or commission) as per the schedule of charges and the withholding tax of

0.3% are applied. The cash amount of the pay order is received. A cash memo is signed, stamped and handed over to the applicant as a receipt. Then the pay order receipt is filled accordingly. Counter foil is also filled. An entry is made in the pay order issue register. Then the authorized officer signs it after checking the pay order. The order is then handed over to the applicant after obtaining his signature on the PO

Form. A voucher is also made and posted at the computer. Payment Procedure: On presentation of the pay order receipt, two authorized officers of the branch sign the receipt. PO entry is made in the PO issue register. Then the amount is credited to the account of the customer or pain in cash. PO is posted at the computer.

Outward Bills for Collection: The bills, which are received by the Bank and sent to other cities (branches) for the local clearing in that city, are calledOutward Bills for Collection. Procedure: The cheques that are of other cities are separated. They are entered in the OBC Register and OBC numbers are given to them. The OBC forwarding schedules are prepared for different branches. The respective cheques are attached with the schedule.

The office copy is filled and original schedule is mailed. On clearing, the respective Banks send back the OBCs along with the IBCA (Inter Branch

Credit Advice). The OBC numbers are checked from the OBC register, after that entries are made. Commission charges are deducted from the account. Inward Bills for Collection: The bills, which are received by the Bank from other branches out of the city for local clearing are called Inward Bills for Collection. Procedure: The OBC of other branches will be the IBC of this branch. So an OBC forwarding schedule is received by mail. The cheques are entered in the IBC register. The IBC numbers are allotted to them. The cheques are lodged for clearing. After realization, an IBCA is prepared and mailed to the branch from where the cheque

was received. At the end of the day, two vouchers are prepared and posted. FOREIGN TRADE DEPARTMENT Foreign trade department deals in: Foreign currency account Exports Imports

FOREIGN CURRENCY ACCOUNT Mainly this account deals in individual, personal and companies account CRITERIA FOR OPENING FOREIGN CURRENCY ACCOUNT There are not hard and fast rules for becoming the Foreign Currency Account holder. Bank wants only introduction of the Client and very little about the background. I.D card is also not necessary, if someone has; well and good, otherwise no restriction will be there for him. FEATURES OF FOREIGN CURRENCY ACCOUNTS There will be legal protection for the account holders. According to foreign exchange rules and regulation every citizen of Pakistan, either within the Pakistan or outside the Pakistan, can open the foreign currency account. Resident firms and Resident Companies including investment Banks can open Foreign Currency Accounts. All foreign nationals and foreign Companies in Pakistan or abroad can open Foreign Currency Accounts. Opening of Foreign Currency Accounts in the joint names of residents/non-residents is permissible. Foreign Currency can be deposited by: Remittance received from abroad

Foreign Currency Notes There will be no restriction and questioning to him about the currency, which he wants to

deposit that from where he got that money. No Zakat will be deducted on these accounts; no Income Tax deduction, no Wealth Tax deduction will be there. These incentives reinforce and motivated the people to invest in foreign currency accounts rather to keep the foreign currency idle. Foreign currency accounts can easily be transferred from one person to another, one place to another, with in the ACBL Branches or in other Bank. The account holder can transfer the funds freely, in any currency to any part of the world. Foreign currency Accounts can be used for payment of purchases at Duty Free shops. FACILITIES This account provides following facilities: Traveling quota Out ward remittances In ward remittances receiving To make remittances procedure flexible

EXPORT Mainly export deals in: Negotiation of documents Sending the documents for collection Pre-shipment financing Post-shipment financing Remittance against agent commission Forward covered booking Handling the documents for negotiation according to the UCP 500 (uniform custom and

practices) Handling the documents for collection according to URR (uniform rules for collection) Submission of monthly returns to SBP regarding the export on form A-2/O-2 IMPORT Opening the letter of credit Scrutinize the documents receive from flowing bank under letter of credit. Account to UCP 500 and extending the credit facility to the importer informs FIM (finance against imported merchandise) FATR (finance against trust receipt). Arrange forward cover booking regarding import payments Also arrange forward cover booking for letter of credit open other then ACBL Submission of monthly returns to SBP regarding the import on form I

SWOT ANALYSIS SWOT (Strength, Weaknesses, Opportunities & Threats) analysis of AKBL is described below: Strengths:

AKBL has got a well-developed on-line system in most of its branches. Remittance Department is working very efficiently in transferring the funds of people due to this system. The Bank has also started ATM facility in most of its branches. 24-hour Banking is new trend in Pakistan and AKBL has also taken apart in this trend. One distinctive feature of the Bank is that it is the only Bank working for the welfare of army officers, which was established by Army Welfare Trust. The productivity of the Bank is very good. Bank is providing a high quality service to its customers. AKBL have strength that most of the imports which are done in Multan are handle by AKBL Multan. Weaknesses: AKBL has lesser number of branches as compared to many other branches. Due to this problem, army officers can not avail the benefits of their own Bank. The human resource department is not performing the function of selection and recruitment very effectively. Selection process is not on merit due to which competent persons cannot be selected. Bank should boost the product development and increase the range of facilities offered for customers. Bank is weak in its credit management. Bank should lend to very sound parties and increase its payment rate. Opportunities: Govt. is taking very bold steps to promote IT in Pakistan. AKBL has an opportunity to improve in technology. AKBL is surrounded by many competitors. It has an opportunity to do aggressive marketing to increase its business. AKBL may increase its branches in competitive areas Threats: AKBL has many competitors, which are continuously increasing its products and marketing aggressively. It may cause its customers to shift to competitors. Some other Banks have competent taskforce, which is also a threat for AKBL. Because human resource is the most valuable resource. Due to the increased bad situation of Pakistan in which army is considered to be involved increase the frequency of withdrawals, which would decrease deposits. Financial Analysis: Financial Highlights The current years profit (2007) after taxation of the bank stood at Rs. 2,681,012 as compared to Rs. 2,249,974 for last year. The deposits decreased by 16.49% to Rs. 11,197,424 as against Rs. 13,044,593 as on 31 Dec 2006. The loans and advances figure stood at R.s 5,521,030 reflect on the improving market image of Askari Bank as a formidable financial institution.

Ratio Analysis The information contained in the four basic financial statements is of major significance to various interested parties who regularly need to have relative measures of the companys operating efficiency. Relative is the key word here, because the analysis of financial statements is based on the use of ratios or relative values. Ratio analysis involves methods of calculating and interpreting financial ratios to analyze and monitor the firms performance. The basic inputs to ratio analysis are the firms income statement and balance sheet.

Ratios Current ratio Total asst turnover Debt ratio Gross Profit margin Operating profit margin Net profit margin ROA
Earning asset to total assets

2007 1.03 0.11 0.93 0.11 0.21 0.22 0.02

2006 1.04 0.09 0.93 0.22 0.12 0.26 0.02

Earning assets are the assets which are very important for any company for the bank earning assets are the assets on which bank can earn its profit which may includes loans, advances, operating fixed assets and other assets on the loans and advances bank can make profit by giving or investing in some where so Askari Bank has increased its earning assets in the year 2007 as compared to the previous year that show the good trend in the profitability of the Askari bank and the customer believe on the Bank. Ratio tells that on what percentage earning assets contribute the total assets. Well bank also has increased its earning assets ratio shows the more profitability of the bank as it can be shown by the profit and loss account of the 2007 that shows the net mark up income more for the year as compared to the previous year so bank is going gradually to the more profitability by giving more advances and loans. Earning assets



Cash Balances with other banks Lending Investments Advances Operating fixed assets Total earning Assets Other assets

13356055 3497054 14444143 39431005 100780162 5128428 176636847 5535038

Total Earning Assets: Formula: Earning Assets / Total Assets = 176636847 / 182171885 = 0.969616 Return on earning asset Rs. 176636847


This ratio indicates the how much of earning assets take part in making of the profit before taxation. This ratio is decreased during the year. Why is it so it has different reasons these are as follows Profit before taxation was more in the previous year as compared to the year 2007 because bank has low expenses and less provision for the bad debts and also bank has small investments and limited loans and advances but in 2007 situation has changed and bank increased its loans and advances. Earning assets were also low in the previous year as compared to the 2007 so overall ratio has been decreased but shows the good trend for the making of long term planning Formula: Profit after tax / earning assets = 2,681,012 / 176636847

= .015 Loan loss coverage ratio This important figure is a reserve account to cover unexpected defaults on loans by borrowers. These are generally referred to as no performing loans. The higher the no performing loan and charge-off percentages, the higher the provision for loan losses should probably be. Consequently, this would reduce net income and earnings per share. Well in the year 2007 banks this ratio has been increased to a great extent due to different reasons theses are as follows. Profit before taxation is low for the 2007 due to more expenses because bank is in expanding mode thats why its expenses are increasing day by day. Provisions and bad debts also increased in the year 2007 because bank also has invested more in this year and ad more also granted more loans. Formula: Provision against non-performing loan and advances / profit (loss) before tax = 3,920,240 / 2,299,785 = 1.70 Loan to deposit Well there is a concept that banks loans are its assets while its deposits are liabilities. But if a bank has low deposits then obviously it will give low loans because bank gives its loans by the deposits and earn on the loans then pay mark up on the deposits to the customers. Well bank has increased its loans to deposits ratio in the year 2007 showing its more deposits as well more loans and that is good for the bank to remain in the market and to penetrate in the market. But profit has not increased with the same ratio because Bank has low mark up rates Bank has more capacity for provisions Formula: Loans / deposit = 14444143 / 11,197,424 = 1.289 Current ratio

This ratio indicates the liquidity of the bank. Well this ratio has been decreased but nt much decreased during the year to a small extent due to Bank has increased its deposits so liabilities have been increased. Bank has increased its assets as well to overcome the liabilities. So overall we can say bank is the liquid enough to pay its liabilities Formula : Current assets / current liabilities = 171508419 / 166214583 = 1.03 Debt Ratio: Debt ratio remained the same in previous year it was .93 and in 2007 its again 0.93. Bank has not decreased its debt ratio in 2007. Net Profit Margin: Net profit margin of a bank has been increased from 0.12 to 0.21. Horizontal and vertical analysis Comparing analytical data for a current period with similar computations for prior years affords some basis for judging whether the condition of the business is improving or worsening. This comparison of data over time is called ashorizontal or trend analysis, to express the idea of reviewing data for a number of consecutive periods. It is distinguished from vertical analysis or static analysis which refers to the review of the financial information of only one accounting period. HORIZONTAL ANALYSIS Balance sheet accounts




Cash balances wid other banks Lendings Investments

13356055 3497054 14444143 39431005

14879230 7333002 8392950 28625915

-1523175 -3835948 6051193 10805090

-10.2369 -52.3107 72.09852 37.74583

Advances o.fixd assets defferd tax assets other assets

100780162 5128428

99179372 3810331

1600790 1318097

1.614035 34.59272











bills payable Borrowings deposits&other acc sub-ord loans liabl against assets deferred tax liab other liab

2627051 17553525 143036707 2997300

1839077 14964087 131839283 2998500

787974 2589438 11197424 -1200

42.84617 17.30435 8.493238 -0.04002

471519 3219796

736298 2603113

-264779 616683

-35.9608 23.69021






Net assets
PROFIT and loss accounts








interest earned





interest expensed





net mark up/interest income





loans & advances value of investment bad debts written off

3920240 1501

1128137 376

2792103 1125

247.4968 299.2021





interest income after provision Non markup/interest income





fee,comm,brockerage income dividends income income from dealing in for curr gain on sale of inv unleasing gain other income

1072868 137079 655761 2361251 1728 336809

1013660 109326 584344 112474 -2308 321758

59208 27753 71417 2248777 4036 15051

5.841012 25.38554 12.22174 1999.375 -174.87 4.677739

total non markup/interest income









Non markup/interest expense admin exp other pro/write offs other charges 12051 6141 5910 96.2384 4789536 3277353 1512183 46.14038

total non markup/interest expense









Profit before taxation

current yrs prior yrs Deferred

98535 -233950 -245812







-381227 Profit after taxation 2681012

1096881 2249974

-1478108 431038

-134.756 19.15747

profit brought forward





profit available for appr.

VERTICAL ANALYSIS balance sheet accounts








cash balances wid other banks lendings Investments advances o.fixd assets defferd tax assets other assets

13356055 3497054 14444143 39431005 100780162 5128428

7.331567657 63.18030698 7.928854115 21.64494538 55.32146851 2.815158881

14879230 7333002 8392950 28625915 99179372 3810331

8.961578 4.416577 5.054971 17.24104 59.73452 2.294916









Bills payable Borrowings deposits&other acc Sub-ord loans liabl against assets deferred tax liab other liab

2627051 17553525 143036707 2997300

1.442072689 9.635693784 78.51744357 1.645314259

1839077 14964087 131839283 2998500

1.107654 9.012687 79.40519 1.80596

471519 3219796

0.258831927 1.767449461

736298 2603113

0.443463 1.567823




Net assets



Findings on the basis of analysis By the horizontal or comparative analysis in which base year is taken as 2006 certain changes are measured in the Banks performance. Cash with other banks and balances with other banks gradually increased in the time line showing the banks good performance and this indicate that bank can earn more by making balances with the other banks. Lending to financial institutions not done in the last year due to more investments done by the bank and by giving more and more advances to the customers but this also has increased the bad debts and provisions of the bank as compared to the previous years. Operating assets has been decreased so that is in favor of the bank. On the liabilities side bank also has increased its bills payable that shows that bank has certain increased in the liabilities as well banks deposits also increased showing the great penetration in the market place as well customers believe on the bank to make deposits thats why banks mark up expense has been increased. Equity also increased in the previous year but banks profit has been decreased because bank has invested so much and in the development process so increased in the expenses. Overall banks financial position in the marketplace has been increased in terms of deposits and advances. All these reasons are favorable to the bank in year 2006 because at one side banks assets have been increased in the form of advances and at other side markup income increased due to deposits because bank can more invest it Balance Sheets one portion that is Assets shows certain changes during the year. e.g Cash & balances with treasury banks have been increased that shows the bank has fulfilled and improved SBP requirements because of maintenance of foreign currency as well as Pakistani currency with other banks due to this balances with the other banks whether outside the Pakistan or inside the Pakistan have been increased. While investment have been decreased due to making balances with the other banks and so advances increased by giving more to the customers so earning power also increased. In 2007 bank not lend money to the financial institutions. Banks operating fixed assets have been decreased to a small extent due to this profit also is increased because bank is the service organization and for service organizations no need of more operating fixed assets. Banks deposits and other accounts have not been increased to the same extent as bank is giving advances. Well that shows a positive trend because bank expenses would be automatically decreased that are due to cash management.

Banks net assets have been decreased because of less operating fixed assets and also due to increase in liabilities. Balance Sheet shows the assets are more contributed by the Advances and liabilities are more contributed y the Deposits that are favorable for the Bank. Overall result is less profit for 2007 as compared to 2006. But this has certain different reasons these are as follows Increase cash and balances with the other banks More advances Increase in deposits All these reasons are favorable to the bank in year 2007 because at one side banks assets have been increased in the form of advances and at other side markup income increased due to deposits because bank can more invest it. Applications of Class Room Concept: In Accounts department there was an implementation of Financial Accounting in making balance sheets, income statements, calculation of depreciation etc In credits department there was an implementation of different categories of loans like personal loans, corporate loans etc which was studied in Financial Management. Recommendations: Already the bank is having a good infrastructure not much recommendations are needed as a manager but few can work : Customers should be given some sort of facilities which can convince people for investment and go for Askari bank for Exports n Imports. Fist floor of bank is much congested, there is needed to work on that. There is not a proper environment of customer dealing on that floor thats why customer

feels difficulty in that. Accounts department was much congested, so area of that department should be extended. After biannually closing of bank there should be a get together of all the employees of bank which can give them a healthy atmosphere to work. Few of the employees used to interfere in others work so they should be strictly advised to perform their own duty well.