DEDICATION I Finally, I dedicate this report to Mr.

Muhammad Saeed for not only being our teacher but our mentor as well and teaching us everything that we must know to be the knights of the business empire. I would also like to dedicate this report to all my respectable teachers. Getting practical knowledge in one of the major aims of MBA (Finance) program. Department of Business Administration Gomal University D.I.Khan has followed policy of assigning different practical assignments to its students so a touch of real working environment can be given to the students apart from classroom studies to widen their perspective.

PREFACE
In this context, respectable Chairman Mr. Bhaktiar Khattak has assigned me to do internship in Soneri Bank. This internship report consists of two findings to work in the different departments of bank and gathered useful information from different sources. I hope that the readers of this report will get valuable information about Soneri Bank Multan.

AUTHOR MUHAMMAD ADEEL

ACKNOWLEDGEMENT
My prays goes to Allah almighty. To write an acknowledgement after the completion of an enormous task as always been more enormous than the task itself. But with the firm determination and noble passion of hard working, nothing remains difficult. I am grateful to our honorable Chairman Mr. Bhaktiar Khattak assigned me this report, which would be very helpful for my future in practical life. I gain a lot from this interesting earning job. I want to thank all those personalities, who have been a source of guidance during the Internship. I acknowledge them with thanks for their help. My deep gratitude also goes to Soneri Bank Limited management. Muhammad Adeel (Branch Manager) Naveed Abbas Qureshi (Operations Manager) Umiar Ahsan

EXECUTIVE SUMMARY
The banking structure in Pakistan comprises of the following types, State Bank of Pakistan, Commercial bank of Pakistan, Exchange Bank, Saving Bank, cooperative banks, specialized credit institutions. SONERI BANK LIMITED Incorporated on September 28, 1991 the first branch of Bank formally opened doors for operations in Lahore on April 16, 1992 followed by Karachi Branch on May 09, 1992. The bank now operates with 118 branches spread all over Pakistan including the Northern Areas of the country where no other private bank has ventured so far. Expansion of branches is based on a policy of maintaining a balance between the urban and rural areas with a view to offering services even in the remote areas of Pakistan. In six week internship program, I have worked in different departments like General banking, trade department and credits department. I have learned about the banking from experienced managers running these departments. This report contains the information about SBL that I have gathered during my six weeks internship period. This report basically deals in General banking, trade and credits where I worked.

The bank is using SWIFT for transfer of information about imports and exports. SBL Multan branch basically cover three departments like General Banking Department, Trade department and credit department. To open an account the customer has to meet Operations Managers with an introducer. The introducer must have an account in bank, or introducer might be the employee of the bank. Soneri bank strictly followed the account opening procedure. The bank cant open an account of customer before the verifications comes from NADRA. SBL has different types of account like, Basic Banking A/C. Current account, PLS and Soneri PLS A/C. They store all the information of their customers in data base. After entering data, they assigned customer an ID is known as Customer Relationship Management ID. He told me with the help of this ID their different branches can easily get information about customer account. In clearing and remittances section they have very efficient system. They clear the cheque through NIFT (National Institute of Facilitation Technology) where SBP exits. In remittances they told me about T.T D.D. and pay orders. Now people prefer D.D instead of T.T. D.D is a banker instrument and draft used for outside the city. It is valid for six month. Bank use pay order, when the payment is to be made with in a city. In trade the bank has good repute as compare to other in Multan. The leading industries of Multan are trading through SBL. In corporate finance the bank deals only worthy enough industries. In consumer finance bank management always try to satisfy them. Bank offer different products for its customers like

 Ghar Finance Car Finance Generator Finance Soneri personal finance At the end of this report, on the basis of my observations during internship, financial analysis and SWOT analysis of SBL is provided. Suggestions are also recommended as per learning from analysis. This report will provide better and comprehensive learning about Soneri Bank Limited

Chapter # 1

INTRODUCTION
History: SONERI BANK LIMITED Incorporated on September 28, 1991 the first branch of Bank formally opened doors for operations in Lahore on April 16, 1992 followed by Karachi Branch on May 09, 1992. The bank now operates with 118 branches spread all over Pakistan including the Northern Areas of the country where no other private bank has ventured so far. Expansion of branches is based on a policy of maintaining a balance between the urban and rural areas with a view to offering services even in the remote areas of Pakistan. Pleasant and sophisticated atmosphere has been provided in the branches which are all fully air-conditioned and computerized. The bank is looking forward to attain growth through activating the areas of SMEs and Agriculture credits. The Pakistan Credit rating Agency Limited (PACRA) has maintained banks credit rating at AA- for long term and for the short term and A+ for the Term Finance. Certificates reflecting banks well maintained risk profile with preserved sound asset quality. We take this opportunity to thank the Ministry of Finance and State bank of Pakistan their continued support and guidance. Bank Introduction Soneri bank Limited is engaged in banking service, and operate more than 118 braches including four Islamic Banking Branches in Pakistan. The bank operates in four segment corporate finance, trading and sales, retail

banking and commercial banking. Corporate finance includes syndicated financing and services provided in connection with mergers and acquisitions, underwriting, privatization, securitizations, debt, equity, syndication, Initial public offers (IPO) and secondary private placement. Trading and sale segment includes fixed income, equity, foreign exchange, commodities, credit, funding, own position securities, brokerage debt and prime brokerage. Retail banking segment includes retail lending and deposit, banking services, private lending and deposit, trust and estates investment advice and merchant/ commercial/ corporate cards. Commercial banking includes project finance, real estate, export finance, trade finance, factoring and leasing. The essence of our business philosophy is to cater to the banking requirements of small & medium sized entrepreneurs, providing them qualitative & competitive services with emphasis on encouraging exports. Nearly forty percent of our credit portfolio is related to export financing and credit decisions are taken within 48 hours that is why we say.

DATE ESTABLISH: 9 September 28, 1991 Chairman Mr. Alauddin Feerasta Representative Officer Tasaduq Gardezi HEAD OFFICE: 87, Shahrah-e-Quaid-e- Azam, P.O. Box No# 49, Lahore Tel +92426368142 Fax+9242-6368138 Swift: SONEPKKALHR Email. Main.lahore@soneribank.com CENTRAL OFFICE 5th Floor, Al-Rahim Tower,I.I. Chundrigar Road, P.O.Box 5856, Karachi Tel: 021.2439562-67 Swift: SONEPKAXXX e-mail: info@soneribank.com SONERI BANK LIMITED (MULTAN) Main branch: Mall plaza, Quaid-e-Azam Road, Multan Cantt., Pakistan. Tel: 061-4512884, 4519927 UAN# 111-567-890 Swift: SONEPKKAMTN email:ma in.multa n@s oneriba nk .com SONERI BANK LTD (MULTAN) Opposite Center Law College Bosan Road, Multan Tel: 061-6510692 Email: Umair.ahsan@soneribank.com

Authorized Capital: Authorized capital ( ordinary shares of Rs. 10/ each 500,000,000,000 Paid up capital: Paid up capital Total Branches of Soneri Bank: 186 branches in 79 cities of Pakistan. ATM: ATM is 204 in all over the Pakistan through one link facility. 300 Million

NATURE OF THE ORGANIZATION Retail Banking Refers to banking in which individual customers use local branches of larger commercial banks for their financial activities. Banking institutions execute transactions directly with consumers, rather than corporations or other banks. Services offered include Savings and checking accounts Mortgages Personal loans Issuance of debit/credit cards Certificates of deposit (CDs Corporate Banking Corporate Banking offers tailor made products / solutions as required by corporate customers which includes: Funded facilities, ranging from short to medium and long term lending. Trade related financing. All sorts of non-funded facilities / services which include Cash receipts / payments, Remittances, Collections, guarantees, letter of credit etc. Customized products / solutions.

SBL covers cash management, foreign exchange, business-to-business payments, trust, custody, commercial lending, trade finance, and other corporate banking issues. Unique Feature Soneri Bank offered the following Unique services to their customers which are given below. Full range of corporate and retail banking services with special emphasis to provide qualitative and competitive services to small and medium entrepreneurs. Highly professional and efficient treasury operations and a world wide network of correspondents. A complete range of products for trade Finance, one of their core banking activities. Funds transfer services through On-Line banking and the bank own ATMs network, cheque-free banking and Soneri VISA Debit cards are just a few of their value added services. A wide range of attractive saving schemes to suit all segments of investors, Consumer finance Schemes and Islamic Banking products catering to the needs of a variety of consumers. Future products include unique Investment plans under Banc assurance business in collaboration with M/s. New jubilee Life Insurance Company

Vision Statement To provide quality services to its customers through adoption of best practices and full exploitation of I.T advancement, culminating at a leading position amongst its peer banks Stronger banking relationships, increasing customer confidence Mission Statement To developed Soneri bank Limited into an aggressive and dynamic financial institution having the capabilities to provide personalized service to the customers with cutting edge technology and a wide range of products, and during the process to ensure maximum return on assets with ultimate goal of serving the economy and society. We have more time for you Objectives of the Soneri commercial bank limited: As Soneri Bank looks ahead to the future by moving through the decade of the 1990's its efforts are guided by a broad framework of corporate objectives, which are as follows: Soneri is committed to its identity of "security & trust" and will endure to uphold this image at al the times. It will endure to provide its customers with as many creative financial services and products, as is required. As today customer demands a package of services suited to his particular business, Soneri plans to develop different and new products to cater to the customer's demand. Soneri Bank has they strength to be a market leader. Bank will keep standing and by and develop, its human capital base. It is planning to provide all the required training to its staff towards achieving a

higher level of professionalism. Soneri will continue striving to build a strong, motivated and dedicated work force where total commitment will be towards customer's satisfaction and wealthy growth of organization. Soneri Bank will endure to provide a competitive return to its shareholders and will strive to maximize its share value. The enhancement in its capital and returns will be a continuous process. Soneri Bank is interested in being one of the most financially institutions. So it lays great emphasis on gradual building up to a healthy deposit mix. In the years ahead, the bank will enhance its focus on growth through operational efficiency, creating strategic alliances developing well-structured networking system innovating new products, enhancing marketing and sales efforts improving customer service, achieving greater employee motivation and providing the best value to its stakeholders - will make it a leader in the corporate world. Organizational Setup of the Branches: There are 184 branches of Soneri Bank Limited operating all over the country. The branches are headed by Vice President and Senior Vice residents. In branch, there are different departments providing different type of customer services. Each department is headed by Senior Officer who has vast experience in the related field. Under departmental incharge, there are other junior officers who report to the Departmental Incharge. Local currency Department Foreign Currency Department Foreign Trade Department

 Credit Department Finance & Accounts Department Remittances. Cash deposit/withdrawals. Account opening /closing. Deposit schemes

Chapter # 2

ORGANIZATIONAL STRUCTURE
General Outlook Organizing is a process of breaking down the overall tasks of the enterprise into individual assignments / activities and then getting them put together in units or departments or groups along with the delegation of authority to a manager of a unit / departments / group. Organizational structure implies a formalized intentional structure of roles and position. This is not the end in itself, rather a means with which to help achieve certain objectives. A well developed and properly coordinated structure is an extremely important requirement for the successful operation of any organization. It provides the basic framework within which functions and procedures are performed. Organizational structure is the formal hierarchy for management, decision making, establishing accountability, reporting & control. The structure defines line of authority and is based on the functions of the organization and its business, segmented in to departments but interlinked according to the nature of activities performed. There are four main types of organizational structures. Vertical organization Flat organization Matrix organization Hybrid organization Vertical structure is a management structure characterized by an overall narrow span & relatively more hierarchal levels. It is also called top

to bottom structure .On the other hand, flat structure is a management structure characterized by an overall broad span of control & relatively few hierarchal levels. The flat level is horizontally dispersed & is a new type of structure. Matrix Structure is an organizational structure that assigns specialists from different functional departments to work on one or more projects being led by project managers. Hybrid structure is a blend of two or more different types of organization design. A hybrid organization is formed that has different levels of the organizational design. The organization chart is represented in the form of an organizational chart, arranged. The chart provides the picture of the operating structure and the decision of labor.

BOARD OF DIRECTORS Chairman Mr. Alauddin Feerasta Chief Executive Officer Mr, Atif Bajwa DIRECTORS Mr. Noor Feerasta Mr. Inam Elahi Mr. S. Ali Zafar Mr. Abdul Hayee Mr. Shahid Anwar (NIT Nominee) Mr. Manzoor Ahmad (NIT Nominee) AUDIT COMMITTEE Mr. Nooruddin Feerasat( Chairman) Mr. S. Ali Zafar(Member) Mr. Shahid Anwar (Member) Mr. Inam Elahi (Member) COMPANY SECRETARY Mr. Muhammad Altaf Butt AUDITORS KMPG Taseer Hadi & Co. (Chartered Accountant)

LEGAL ADVISOR Manan Associates, Advocates

Chapter # 2

DEPARTMENTS
General Banking Trade Department Credit Department Introductions of the departments in which I worked as Internee In my first week in SBL, the branch manager Mr. Naveed Abbas Qureshi assigned me to learn the basic banking concept. For this purpose he directed me to meet with the Operations Manager, Mr. Umair Ahsan. He is very cooperative kind of person. General Banking General banking is divided in to four sections Account Opening Cash Clearing Remittances Account Opening Types Of Account Opening Form There are types of account opening form For single, sole proprietorship & joint personal For partnership, limited Company, trust, clubs etc.

Basic Reqirments For Opening An Account For Single, Sole Proprietorship & Joint Personal CNIC photocopy. Introducer must have an account in the same branch. KYC. NTN certificate (for Sole Proprietorship) World Check. Letter Head in case of sole proprietorship Note: The account of person will opened after receiving verification from NADRA. For partnership, limited company, trust, clubs etc For partnership Attested photocopy of CNIC of all partners Attested photocopy of partnership deed duly signed by all partners. Attested photocopy of registration of firm with registrar of firms. In case of partnership unregistered the fact should be mention in account opening form. Authority letter, in original, in favor of the person authorized to operate on the account of the firm. KYC. NTN certificate World Check.

Types Of Accounts Soneri bank is dealing in different types of account. Basic Banking A/C Current A/C PLS Saving Soneri Saving Fixed/ Term deposit A/C Basic Banking Account This is account is for salaried person account. Normally different companies, Schools, Colleges opened their employees account in this account. Benefits of basic baking account are given below: No Zakat deduction No service charges Soneri debit card Current Account Current is a non profit account flexible account with a great convenience or individuals (in single or joints names), minors (to be operated by the guardian), charitable institutions, autonomous corporations, limited companies, firms, associations, educational institutions etc. Current account may be opened with any amount.

Salient Features Minimum Rs 10,000 required opening an account. Service charges will be deducted. Soneri Saving Account Soneri savings account provides an opportunity to small and medium income group people, with an attractive return. Salient Features Minimum Rs 5,000 required opening an account. No minimum charges. Zakat will be deducted. Up to Rs 100, 00 Expected profit 5% P.A. Soneri debit and credit card. Chequing Account facility with no limit on a number of transactions. Free Cash Deposit and Withdrawal facilities through your bank branch. Free clearing facility to deposit cheques of other banks within the city. Online Funds Transfer through Cheques to any account across Pakistan through your bank branch. Online Cash Deposit, Withdrawal and Funds Transfer through cheques from any of our branch across Pakistan. Profit & Loss Savings Account PLS saving Bank Account is a simple, straight forward saving bank Account with a great convenience for individuals (in a single or joint names) minors( to be printed by the guardians) charitable institutions, provident fund and other funds of benevolent nature local bodies, autonomous

corporations, limited companies, firms associations, educational institutions, etc. the account may be opened with any amount; however accounts with balance below Rs.5000- on any day shall be subjected as per their schedule of charge in force. The PLS Savings Account entitle Account Holder to avail amazing facilities such as: Chequing Account facility with no limit on a number of transactions. Free Cash Deposit and Withdrawal facilities through your bank branch. Free clearing facility to deposit cheques of other banks within the city. Online Funds Transfer through Cheques to any account across Pakistan through your bank branch. Online Cash Deposit, Withdrawal and Funds Transfer through cheques from any of our branch across Pakistan. Remittance facilities such as Payment Orders, Demand Draft, Telegraphic Transfers and Free Rupee Travelers Cheques through your bank branch. Standing Orders facilities. (CRM ID) In (CRM) fill all the information of customer in their data base. After entering data, they assigned customer an ID is known as Customer

Relationship Management ID. With the help of this ID their different branches can easily get information about customer account. NOTE: But they are reluctant to give us complete information about their data base. Clearing In clearing some important terminologies come, these are given below. And this is second most important part of general banking. Banker cheques Types of clearing IBDA OBC IBC NIFT Standing Instruction Daily Fund Transferring Banker Cheques In this cheque all the expenses of the bank are recorded on daily bases. Expenses like OCS charges TCS charges Stationary Classic water Utility Bills

 Generator Diesel These expenses recorded in banker cheque. Standing Instruction Standing instructions are given by the customer to the banker. In this cash will be transfer to second partys account according to the instruction given by the customer. Example If Customer instructs the bank if his children fee voucher comes, bank has authority to take these vouchers and pass the transaction, or any utility bills of customer etc. Daily Fund Transferring In daily fund transferring the bank transfer the funds to customers main account where he wants. Example Uniliver has an account in different cities, like (Karachi, Multan, Lahore, Islamabad, and Faisalabad) .The Accounts manager of the company instruct the bank that banks should transfer their fund to their main account in Karachi. So HQ-Soneri Bank instruct their branches that they should transfer the funds of Uniliver to companys main account in Karachi. Types Of Clearing There are three types of clearing. Normal clearing Special clearing Intercity clearing

Normal Clearing Normal clearing is further divided into two types. Internal cheque External cheque Internal Cheques: Internal cheques are given by the customer of the same branch. The clearing Department check the status of the account if the status of account would be OK, then they credited the account of the second party and Debited the account of their customer. External Cheques: External cheque comes from different bank to Soneri bank but from the same city. Theses cheques are delivered by NIFT. Clearing department check the status of the account. If the status of the account is ok, then they pass the transaction. In case of not they return the cheque to NIFT. Special Clearing NIFT delivered these cheques to bank and instruct the bank to transfer the amount to respected account. Bank is liable to pass the transaction according to the instruction given by the customer. Charges of special clearing are Rs.500. These charges charge by NIFT. And bank debited these charges from customer accounts. Inter Bank Debit Adjustment (IBDA) In IBDA always Head Office has right to debit the account of its branches. If there are some mutual expenses. So Head office sends IDBA note to its branch that they have debited their account.

Example Soneri Multan had sent request for UPS. Soneri Head Quarter has purchased the UPS on the behalf of Multan branch, and debited the account of Multan Branch with that amount.

UAN: Soneri has the UAN all over the country. The bill of UAN comes to HQ- Karachi. So HQ debited the account of all braches account according to their usage.

Outward Bills for Collection (OBC) OBC send by one bank to another bank, where State Bank is not exists. If a Soneri Bank customer received a cheque by a party of HBL- DGKhan. Soneri Bank Multan sends OBC to HBL-(DG-Khan) for clearing. If HBL (DG-Khan) clear the cheque they send clearing notice to Soneri Bank, then Soneri bankcredited the account of customer. Inward Bills for Collection (IBC) IBC send by one bank to another bank, where State Bank is not exists. If one bank sends OBC to other bank, for other bank OBC would be IBC. If Soneri Bank Vehari received a cheque of Soneri Bank Abdali Road Multan. They send the cheque to SBL-Mux, then Multan branch send the cheque in normal clearing to Soneri Commercial Bank Multan. If ACB clear the cheque, then Soneri Bank send notice to Vehari Branch for clearing throughDAK, and credited the account of customer.

Realization And Un-Realization There are three steps in realization of cheque in clearing. Shadow Realized Unrealized Shadow It just a record till the cheque is not clear. Realized Bank realized entry when it received a notice of clearing from other bank. Unrealized In case if cheque is not clear, then we unrealized the cheque and removed from theshadow Remittances NEGOTIABLE INSTRUMENTS Cheque Draft on Demand Pay orders ATM Cards

Draft on Demand One party is not certain about other party. Then they requested for D.D instead of cheque. D.D minimizes the risk. D.D is the bankers instrument; bank issued the draft after verifying the status of account of party who is making this note in the favor of other party. After issuing the draft now its banks responsibility to pay the cash to the party. Draft used for outside the city Its validity six month. Pay Order If one party is not certain about other then they requested for pay order instead of cheque. Pay order minimize the risk. Pay order is the banks instrument; bank issued the pay order after checking the status of account of party who is making this note in the favor of other party. After issuing the pay order now its bank responsibility to pay the cash to party. Pay order used within the city Its validity for six month. ATM & credit cards Soneri Banking Card offers convenient and 24-Hours-a-day, 365 days a year access to ATMs across the country. When traveling within Pakistan, use the Card at Soneri Banks own network of ATMs and hundred of ATMs displaying either the 1-link or M-Net symbols.

Eligibility: You can also apply for a Debit Card services. If you are having Soneri Banking Card, if you are maintaining a Soneri Bank PKR Current or Savings account Single or Joint account with either signatory authorized to operate the account, a further supplementary card can also be issued to the second account holder. All Soneri Banking Card holders use debit card facility. ATM access across all over Pakistan: Now cash withdrawals and Balance Inquiry services are available by any of the ATM in Pakistan. Available services: At all ATMS Cash Withdrawal: You can withdraw cash from your account(s) up to Rs.25,000 per day in multiples of Rs.500, and Rs.1,000 currency notes. Balance Enquiry: You can see the available balance in your account displayed on the screen or obtain a printed advice At Soneri Bank ATMS: Fast Cash: You can withdraw up to Rs.1000, 3000, 5000, 7000 and 10000 cash from your account(s).

Mini-Statement: The ATM shall provide you with an instant mini-statement of your ATM linked accounts (declared by you on the application) listing 10 last transactions in the account(s). Request for Cheque Book: Request for fresh cheque book may be made through the ATM. The Cheque book may be collected from your branch after 3 working days against surrender of duly signed cheque book Requisition slip. Request for Statement of Account: Request for a detailed statement is processed at the push of a button. Requested statement shall be dispatched by your branch at your Registered Address within 4 working days. Pin Change: You may change the Personal Identification Number (PIN) through the own ATMs any number of times. Smart Option: Fund transfer Utility bill payments Fund Transfer facility: You have the power to transfer money from your account to any account of Soneri Bank anywhere in Pakistan.

Cash Department The following books are maintained in the cash department. Receiving cashier books Token Book Paying cashier Book Scroll Books Cash Balance Book. When cash is received in counter, it is entered in the Scroll book and cash receiving cashier book. At the close of the day these are balanced with each other. When cheque or any negotiable instrument is presented at counter for payment, its entered in the token book and token is issued to the customer. The token and cashier make entry in the payment book and after that payment is made to the payee. At the closing of the day, the token book and paying cashier book is balanced. The consolidated figure of receipt and payments of cash is entered in the balance book and drawn closing balance of cash. Opening Balance + Receipt Payments= Closing Balance This is very important department because cash is the most liquid asset and mostly frauds are made in this department, therefore , extra care sis taken in this department and no body is allowed to entered or leave the area freely. Mostly, cash area is grilled and its door is under the supervision of the head of that department. Officer checks the books maintained in this department.

Sundry Debtor Sundry debtor is also known as suspense account. Bank maintains this account to meet the cash in emergency. Like if employee needs salary in advance due to some problem. Bank will advance him cash. But bank will deduct this amount at the time of paying salary to him. Some important point for SD At the month debit side must be equal to credit side. At the start of next month debit side and credit would be equal to zero. Any expense like TADA, and new branches expenses can be adjusted in this account. TRADE DEPARTMENT TRADE Trade department is further divided into two sections. Exports Imports EXPORTS What is Letter of credit? Letter of Credit: Letters of credit are used primarily in international trade transactions of significant value, for deals between a supplier in one country and a customer in another. The parties to a letter of credit are usually a beneficiary who is to receive the money, the issuing bank of whom the applicant is a client, and the advising bank of whom the beneficiary is a client. Almost all

letters of credit are irrevocable, i.e., cannot be amended or canceled without prior agreement of the beneficiary, the issuing bank and the confirming bank, if any. STEPS INVOLVED IN OPENING L/C There are following steps are involved in L/C After a contract is concluded between buyer and seller, buyer's bank supplies a letter of credit to seller. Seller consigns the goods to a carrier in exchange for a bill of lading. Seller provides bill of lading to bank in exchange for payment. Seller's bank exchanges bill of lading for payment from buyer's bank. Buyer's bank exchanges bill of lading for payment from buyer. Buyer provides bill of lading to carrier and takes delivery of goods. TYPES OF LETTER OF CREDIT There are two types of letter of credit that are given below. Revocable Letter Of Credit Irrevocable letter of credit Revocable Letter of Credit L/C A revocable letter of credit may be revoked or modified for any reason, at any time by the issuing bank without notification. It is rarely used in international trade and not considered satisfactory for the exporters but has an advantage over that of the importers and the issuing bank. It should be indicated in LC that the credit is revocable. If there is no such indication the credit will be deemed as irrevocable.

IRREVOCABLE LETTER OF CREDIT L/C: In this case it is not possible to revoked or amended a credit without the agreement of the issuing bank, the confirming bank, and the beneficiary. Form an exporters point of view it is believed to be more beneficial. An irrevocable letter of credit from the issuing bank insures the beneficiary that if the required documents are presented and the terms and conditions are complied with, payment will be made. Form-E It describes the details of the goods to be exported, the importers particulars, the amount of foreign currency payments and the details of the importer as well. Government has provided facility to exporter in taking Form-E from any bank and can present it to any bank for negotiation. Exporter proceeds realization certificates, SBP gives rebate to exporter against exporter after realization, it is paid according to commodity wise and bill wise. Claim period: 1 year Following steps are involved in Form-E. Firstly bank requested his customer to fill all the documents. After completing the documents send to Custom for clearing, and received custom clearing certificate Then send the shipment to port. Lastly bank will send all the documents to issuing bank. NOTE: Bank deals only in documents. Bank is not responsible for any damage.

 100% margin required for opening L/C. with passage of if party developed understanding with bank. Then bank would give some kind of relaxation in Cash margin. TYPES OF EXPORT Foreign Bill Purchase "An instant financial solution for exporters with payment on L/C, D/A, basis" To obtain a production continuity and to maximize every sources, Exporters should make the best of our Foreign Bill Purchase in FBP bank provide finances to exporter for given time period Types Of Exports Finances There are two types of export finances. Pre-shipment Finances Post- Shipment Finances Pre-Shipment Finances Pre Shipment Finance is issued by a financial institution when the seller wants the payment of the goods before shipment. The main objective behind reshipment finance or pre export finance is to enable exporter to: Procure raw materials. Carry out manufacturing process. Provide a secure warehouse for goods and raw materials. Process and pack the goods. Ship the goods to the buyers. Meet other financial cost of the business.

The pre-shipment finance is further divided in to two types. Financial Against Packing Credit Pre-Shipment Loan Finance against Packing Credit (FAPC) When customer facing financial problem, while delivering the goods to importer. Like packing expense and shipment charges. Then exporter requested his bank for(FAPC). Bank credited the account of his customer. When his bank received cash from importers bank. Exporter bank will deducted the FAPC and the rest of the amount will be credited to his account. Pre- Shipment Loan (PSL) Authorized dealers are permitted to extend Preshipment Credit in Foreign Currency (PCFC) with an objective of making the credit available to the exporters at internationally competitive price. Following advantages and important points of (PSL) This is considered as an added advantage under which credit is provided in foreign currency in order to facilitate the purchase of raw material after fulfilling the basic export orders. The rate of interest on PCFC is linked to London Interbank Offered Rate (LIBOR). According to guidelines, the final cost of exporter must not exceed 0.75% over 6 month LIBOR, excluding the tax. The exporter has freedom to avail PCFC in convertible currencies like

USD, Pound, Sterling, Euro, Yen etc. However, the risk associated with the cross currency truncation is that of the exporter. Post- Shipment Finances Post Shipment Finance is a kind of loan provided by a financial institution(Soneri Bank) to an exporter or seller against a shipment that has already been made. This type of export finance is granted from the date of extending the credit after shipment of the goods to the realization date of the exporter proceeds. Exporters dont wait for the importer to deposit the funds. Types Of Post Shipment Finances Foreign Bill Purchase (FBP) Finance Against Foreign Bill (FAFB) Foreign Bill Discounted (FBD) Foreign Bill Purchase (Fbp) After shipment exporter present all shipping document to authorized dealer (bank) and get finance. The bank will credited the account of his customer. When payment will received by importers bank, bank will adjust the account of customer and credit the bank account. Finance Against Foreign Bill Bills can only be sent on collection basis, if the bills drawn under LC have somediscrepan cie s. Sometimes exporter requests the bill to be sent on the collection basis, anticipating the strengthening of foreign currency. Banks may allow advance against these collection bills to an exporter with a

concessional rates of interest depending upon the transit period. The transit period is from the date of acceptance of the export documents at the banks branch for collection and not from the date of advance. Imports Imports start with Letter of credit. Information in L/C The name of the local company, which is importing the goods. The name of foreign company, which is exporting the goods. The details of goods to be transacted including the amount, quantity mode of packing etc. The total amount of L/C The numbers of the days fro which L/C is valid. The name of the bank, who is regulating all these dealing. The name of the carrier which will be used for the shipment of the goods t the importers. The bill of shipment number. Parties Involved In a Letter Of Credit There are normally six parties involved in L/C. Buyer (known as importer or consignee) Buyers bank (known as opening or paying bank) Sellers bank ( known as advising bank or negotiating bank) Carrier (known as shipping company) Insurance company.

Opening Of L/C For opening of L/C following documents are required by the bank. Application or bond Order or invoice or indent. Insurance Liability endorsement of customer Irrevocable documentary credit(LC) An L.C is issued after opening of letter of credit it is sent to exporters bank. LC opening charges: When an LC is opened, the bank collect certain charges from importer, these are; Commission postage charges telex charges SWIFT It is network among all banks. No other institute can get involved in it. The swift system has been introduce speedy service in the area of home remittances. The system has built-in features of computerized test keys, which eliminate the manual application of test that often causes delay in the payments of home remittances. Swift is operational at Habib bank of Pakistan wit a universal access number SONEPKKAMTN. All Soneri branches and overseas correspondents are drawing remittances through SWIFT.

DISCREPANCIES When issuing bank received document from advising bank. If bank found any discrepancies bank will inform his customer. If importer claim any objection, then issuing bank inform advising bank about discrepancies. Types Of Import Finances Finance Against Imported Merchandise (FIM) Inward foreign Bills. Finance Against Imported Merchandise (Fim) When customer facing financial problem, while lading the goods from port. Then importer requested his bank for(FI M). Bank credited the account of his customer. But pledge the merchandise as security. Bank charge the following charges to his customer. Commission FED. Markup Bank charged commission 1%. Markup on the basis of number of days he used that amount Financing Amount Purchase Rs.Up to 10 Million Construction Rs.Up to 10 Million Extension / Renovation Rs.Up to 03 Million Balance Transfer Facility Rs.Up to 10 Million

Tenure Purchase Up to 20 Years Construction Up to 20 Years Extension / Renovation Up to 07 Years Balance Transfer Facility Up to 20 Years (Calculated from the date of original finance) Mark-up Rates** 1 Year KIBOR + 2% p.a., to be revised on each anniversary of finance. Processing Fee Rs. 2500/- or 0.50% of the finance amount whichever is higher (refundable where case is not approved). Generator Financing Purpose of Financing For purchase of brand new Electric Power Generator to be installed at residential / commercial / industrial property owned by the borrower. Eligible Borrowers Salaried Persons Self Employed Professionals Business Persons Financing Amount Minimum Amount of Finance: Rs. 0.1 Million Maximum Amount of Finance Up to Rs. 1.0 Million

Down Payment A minimum of 20% of price of the Generator (as per Quotation / Invoice) being financed shall be paid by the borrower Tenure Maximum repayment period is 3 years Mark-up Rate ** 1 Year KIBOR + 3% p.a., to be revised on each anniversary of finance. Processing Fee Rs. 2000/- per approved application. Service Length Minimum 1 year of confirmed service with present employer in case of Salaried Person. Corporate Finance Mr. Junaid in dealing in corporate finance, and he is also Incharge of credits department. Soneri Bank Multan is dealing with big clients like. Hussain textile Fatima fabric Noreen Fatima Main Products The main corporate finance products are, General financing facilities Import Financing Facility Exports financing facility.

General Financing Facility General financing is further divided into four types, these are given below. Temporary Running Finance Running Finance Cash Finance Term Finance Demand Finance Temporary Finance: Customer who maintains satisfactorily conducted account may at their specific request. Bank accommodated to temporarily their current account to meet unexpected and urgent financing requirement. Running Finance Running finance is nothing but the finance offerings by financial institutions against mortgages. It works under the working capital finance. Specifically, the running finance is a credit facility established for a specific time limit at variable interest rates. Cash Finance Cash finance is a term that means that the goods are pledged or released to the borrower against the cash payments only. While the running finance is offered by the financial companies against the mortgages. It usually comes under the heading of the working capital finance.

Import financing Facility Import financing is further divided into two types, these are given below. Inward foreign Bills Finance against Imported Merchandise (FIM) Export financing Facility Export financing is further divided into two types, these are given below. Pre-shipment Loan (PSL) Post-shipment Loan Finance against Packing Credit(FAPC) SMALL AND MEDIUM ENTERPRISES (SMES) Soneri Bank Limited, arguably at the forefront of commercial excellence, has strengthened its product profile by introducing the following cost effective innovative tailor made small and medium enterprises (SMEs) financing options on flexible terms to its most discerning customers need. The Market segment for this business is primarily SMEs and the bank stands committed to contribute in the process of national development with an explicit focus in providing quality finance solutions. Main Products Of SMES Financing There are three types or products that they offered to their customers. SONERI SARMAYA SCHEME SONERI AASAN SCHEME SONERI TEJARAT SCHEME

Who Can Avail This Facility Individuals Proprietorship Partnerships Limited Companies AGRICULTURE FINANCE Following agriculture finance facilities are provided by Soneri Bank Limited at its selected branches. Production Loans: Production loans are offered to meet the input and other working capital requirements for farming, orchards and nursery, tunnel farming, storage of raw material, transportation marketing grading and packing etc., by farmers. Note: Financing facilities for all other purposes as detailed in SBPs list of eligible items for Agricultural Credit are also available. Development Loan Development loans are offered for the purchase of tractors, trolley, thrashers, ploughs, cultivators, laser levelers, combine harvesters, processing machinery, transport for delivery of dairy, poultry, fisheries. Installation of tube-wells, turbine, land leveling, soil improvement, land reclamation, seed processing units and for godowns, silos and cold storages.

Live Stock To meet the fixed cost and working capital requirements for cattle farming, cattle feed units, dairy farming, poultry farming; poultry feed units and fish farming. Repayment Period Principal amount of Finance plus mark-up thereon is repayable depending upon nature of business ranging from one to five years. Revolving facility is also available under specific terms. Mark-up rate: All Type of Agriculture Loans upto Rs. 100,000/- 6M Kibor + 2% Production Loan under Revolving Credit Scheme: 6M Kibor + 3% Distribution of Credit: SBP has advised diversification of credit as under. 70% of credit should go to small land holders. 20% of credit should go to economic land holders. 10% of credit should go to above economic land holders. Finance can be provided to all categories of farmers owner/tenants),

who are genuine growers and are able to provide propersecurities/sureties etc. Indicative per acre limit of different crops is as under 1. Cotton 21,000 2. Wheat 16,000 3. Sugar Cane 16,000 4. Paddy 19000 5. Other Crops As per actual cost Types Of Agriculture Credits There are two types of agriculture credits Production finance Development Finance Development Finance Development finance for farm and non farm credit are divided into two categories. 1. Short Term 2. Medium Term Short Term: Short term finance usually allowed for working capital requirement. Medium Term: Medium term is needed for purchase of livestock and implements etc.

Chapter # 4

POLICIES Managerial policies:

A. Financial policies B. Procurement policies C. Marketing policies D. Promotional policies E. Lending policies F. Personal policies A) FINANCIAL POLICIES: The financial policies of any bank are the most important policies through which the whole banking activity is conducted. These policies are primarily conducted on: Source of funds Use of funds SOURCE OF FUNDS: The bank finance policy is acquiring funds from the following sources: Deposits of account holders. Interest on advances and loans granted to the borrowers. Income and commission from the services provided by the bank. Bank opens various types of accounts for its customers Services are provided for earning.

 Interest income and commission bank providing the services to its customer. USE OF FUNDS: After the acquisition of the funds their acquisition becomes necessary. The bank seeks the best way for making investment to get more profit with the maximum security. The bank has an investment portfolio in which it allocate its funds for crediting to borrowers, investment in the stock market, investment in the real estate property etc. for allocation of funds a bank has to follow some banking policies and the prudential regulations of SBP these are: A bank has to maintain liquidity with central bank, i.e. 25 % of its total deposits. A bank cannot invest all of its funds otherwise it will be difficult to meet urgent needs. A substantial part of funds is received from interest on loans and advances. Before granting a loan the bank analyzes and observes the borrower and conduct a complete ratio analysis. Bank prepares credit line for this purpose the major thing is granting an advance is the security offered by the borrower and its actual market value.

B) PROCUREMENT POLICIES: Procurement policies are more concerned with manufacturing organizations. In bank industry that is service industry procurement means the procurement of funds from various sources such as deposits. It involves attracting and holding the funds of the depositors. After the

acquisition of funds, the bank invest the acquire funds. One alternative is to lend its money and earned interest markup or invest in govt. securities etc. as already mentioned in the above paragraph the major sources of funds for a bank are the deposit of the general and the other sources of income includes interest or markup charges received for various services offered by the bank to its clients. A bank tries to attract maximum no. Of accounts so that it can increase its deposits and these lending ability. In order to get maximum no. of accounts the staff of the bank must be efficient as compared to the other banks and the manager of the branch must take personal interest in attracting deposits. Good quality of the service is the key to success. C) MARKETING POLICIES: Marketing policies are also one of the most important policies because they are related to the growth of the organization. Marketing for a bank would mean: 1. Creation of new product and services. 2. The bank marketing must be consumer oriented. Following are the marketing policies of the Soneri Bank Limited. a. Keeping the track of latest development in the world and incorporating the latest and most modern equipment to make the banking procedures simple and easy for the customers. b. Development of products for the customers. c. Giving good services and maintaining good relations with the customers.

These policies can be implemented by providing the right product and service to the customer at the right place, at the right time, at the right price. It is necessary for the managers to keep in touch with consumers, observe their needs and develop products, which meet their needs. D) PROMOTIONAL POLICIES: Public relation and advertising has assumed a great importance in the modern banking business. As for as promotional activities are concerned, the main objective of the bank is to inform the existing clients and other people about its new products or change in the existing services. Soneri Bank Limited establishes its purpose through: 1. Direct contact with customers. 2. Relation with business organizations. 3. Community relations.

E) LENDING POLICIES : Every bank has its own lending policies except for those, which are common for all the banks, i.e. the policies, which are imposed on all the commercial banks by the SBP, are known as prudential regulations. The lending policies of Soneri Bank Limited are as follows: 1. The bank only invests in those sound and viable projects, which have good rate of return. 2. Bank prefers to advance loan to their account holders. 3. Loan is given to reliable person only. 4. No political loan is sanctioned by bank.

5. Any account holder can apply for running finance or demand finance. The manger appraises the past record of account holder and his credit worthiness. If he finds any thing wrong he can refuse to sanction the amount. 6. The bank while taking security prefers govt. Securities to shares. 7. It also advances working capital loans. F) PERSONAL POLICIES: Personal policies have an important role in the success of an organization. Soneri Bank Limited have its proper personal policies. Good personal policies motivate the employees towards hardworking. Following are the main personal policies of Soneri Bank Limited: 1. Selection of employees on merit 2. Selection of capable employees. 3. Attractive salary package for motivation of employees. 4. To train and develop the future management of the bank. 5. Every employee must have certain set of clearly defined duties 6. Effective communication at al levels of the organization.

Chapter # 5

ANALYSIS
Ratio Analysis Ratio analysis is an important and age-old technique of financial analysis. Ratios are important and helpful in the reference that: These simplify the comprehension of financial statement and tell the whole story of changes in the financial conditions of the business. These provide data for inter-firm comparison. The ratios highlight the factors associated with successful and unsuccessful firms, also reveal strong and weak firms. These help in planning and forecasting these can assist management in its basic functions of forecasting, planning, coordination and control. These help in investment decision in case of investor and lending decision in case of Bankers etc. However the ratios are only indicator, they cannot be taken as final regarding good or bad financial position of the business other things have also to be taken. Advances and deposits are prime components of financial statements of banking industry organizations because mainly there trading is commonly depend on these items so these both ratios are very important

PEST (Political Environmental Social & Technological) Political: Political factors influencing the bank performance. We have seen, 10 yrs back the banking sector in Pakistan was flourishing, and the reason was political stability. Now the banking sector is declining not able to meet the required requirements by SBP. The reason is political instability. Particularly, agriculture people get benefits due to relations with politicians. Such people get loan and job on references. Economical: Population of Pakistan is very rich as compared to other countries. So economical factors are good for banking sectors. Soneri Bank always looking forward to cater their customer by its attractive offers like Basic Banking A/C for salaried persons. SBL has mission that we have more tome for you Social Factors Social and cultural factors are affecting the bank. Majority of the population is un-educated and unaware of the benefits of banking sectors. They have low saving and want to keep money with them. Technological factors: Technologically, SBL is strong and this element strengthens to SBL. Online banking advances and any transactions bank has speedy network. The

reason of their speedy network they have limited operations. Their first priority is customer satisfaction. For this they have established ITDepartment in every branch to cater network problems.

SWOT ANALYSIS
There are following strength weakness opportunity and threats for SBL. STRENGTH: Since, inception of SBL, it has moved rapidly in expanding branch network and deposit bases along with profitable advances and increasing the products and services. Prior in Multan bank has only two branches, two months back, the SBL management has decided to expand its business in Multan by opening new branches. Bosan Road branch starts its operation by the end of last month. SBL is serving particular certain community like (Agha Khanis). They are considering being their loyal customer. Agha Khan Hospital, Agha Khan Laborites and Agha Khan Medical College, All they have an account with SBL. Agha Khan is a Big name. The Pakistan Credit rating Agency Limited (PACRA) has maintained banks credit rating. SBL has been awarded an AA- for long term and for the short term and A+ for the Term Finance. Certificates reflecting banks well maintained risk profile with preserved sound asset quality. In order to maintain an effective communication of information regarding the need of valued client bank has designed its website to be user friendly as possible, SBL collaborate with different cellular companies to provide bank

 statement on their customerscell phone.

The leading companies of Multan like Hussain Textile Fatima Mills Noreen Fatima have an account with SBL. These companies are trading through SBL.

Loyal workforce and satisfied Customers. Weakness: As per bank policy, advertising and publicity is not extensively emphasized. Through advertisement customers could be kept abreast with the product and services.

The main focus of SBL is major cities of Pakistan. Its direly needed to extend its network and people should be educated about the functioning of bank.

Poor employee development and promotion. During the training the trainer couldnt gave them proper information. So the trainee faces problem. Defensive approach in lending. No branches of Soneri bank are in any other country. So the bank has to incur additional cost for correspondent banking. Opportunity: The life cycle of an organization is comprised of threats as well as opportunities. If we say, today the rates of challenges are too high but simultaneously the rate of opportunity is also too high. It is obligatory to try to make progress with consistency as well as to adapt changes with the need of time, in order to cope up with both conditions.

 In the prevailing scenario, SBL should penetrate further and capture various corporate customer as well as retail customer by expanding their network. In addition to the excellent routine banking, it has earned a good name by offering special products like Soneri car finance, ghar finance and personal finance. So the penetration of these products could enhance the market share. SBL has launched another division know as Islamic Banking. This new aspect will also attract a large number of people, who dont want to deal with interest bearing bank. If SBL focusing on advertisement it would be good for organization, because promotions makes people know about the products of SBL. Management should also open new branches is rural areas to capture market share. SBL can enjoy handsome return its funding base by investing in capital markets in the foreign countries. If management of SBL giving facility of night banking to its customer. I think it would also attract the other bank customers. Threats While doing business, threats are part of business. Especially, in this era, most of the financial institutions are working as Private Limited Company and facing or have a fear of threat from their competitor as

well as new entrants. In order to maintain as well as enhance the market share , SBL always try to introduce new schemes /packages like Soneri generator finance etc In our country, the rate of inflation is increasing along with unemployment. So due to increase in price of the products, the saving of the people is decreasing with passage of time. So it is threat for banking sector. In future the deposits of the bank will decreases. The number of banks in Pakistan increasing with passage of time. Foreign bank like to open their branches in Pakistan. So it would be threat for SBL. SBL has also threat with different bank who are offering the same product like Home finance Car Finance Self Finance Education Loan So management may face problem. Uncertainty in political and economical environment. Mergers and Acquisitions are other threat to bank. Impact of Privatization.

Conclusion Of Swot Analysis Since SBL has decent strengths and opportunities in the market, its market share is increasing and it is expanding its branches rapidly. So I concluded that SBL is adopting and implementing on Growth Strategy.

SUGGESTIONS If I was the manager of SBL. There are following suggestions for SBL. The life cycle of an organization is comprised of threats as well as opportunities. If we say, today the rates of challenges are too high but simultaneously the rate of opportunity is also too high. It is obligatory to try to make progress with consistency as well as to adapt changes with the need of time, in order to cope up with both conditions. In the prevailing scenario, SBL should penetrate further and capture various corporate customer as well as retail customer by expanding their network. In addition to the excellent routine banking, it has earned a good name by offering special products like Soneri car finance, ghar finance and personal finance. So the penetration of these products could enhance the market share. SBL has launched another division know as Islamic Banking. This new aspect will also attract a large number of people, who dont want to deal with interest bearing bank. If SBL focusing on advertisement it would be good for organization, because promotions makes people know about the products of SBL. Management should also open new branches is rural areas to capture market share. SBL can enjoy handsome return its funding base by investing in capital markets in the foreign countries. If management of SBL giving facility of night banking to its customer. I think it would also attract the other bank customers.

Well at the same time SBL has some threats with different product line of their competitors. Now what they have to do? They just reduce their mark up rate as compare to their competitors. By doing this they may capture big market share. In long run it would also beneficial for the bank. They must focus on their own Marketing team, rather than outsourcing, their own Marketing team launches new ads. In Multan I have seen that the huge customer traffic in trading area (Corporate section) rather than retail customer. The management should launch new offers for their old customer as well as dissatisfied customers of other banks. Management should give their customer good mark up rate.

CONCLUSION
Soneri bank Limited is engaged in banking service, and operate more than 186 braches including four Islamic Banking Branches in Pakistan. The bank operates in four segment corporate finance, trading and sales, retail bankingand commercial banking. Within the span of 19 years, SBL has become the one of the largest private bank in the country. There are about 112 correspondent banks in 31 countries of the world. Its capital and reserves level is increasing day-byday. Their main objective is to provide professional, personalized and efficient service to the clients at all the times. SBL is always looking forward to provide new and better services than their competitors. I have seen they are now expanding their branches, when I have joined SBL there were only two branches in Multan but now in Multan three branches are operational. They have told me that two more branches will be operational by the end of this year. So SBL is adopting and implementing on Growth Strategy. These branches are located in commercial areas. . They have clearly defined values and norms and they strictly practice their norms and values. To develop Soneri bank Limited into an aggressive and dynamic financial institution having the capabilities to provide personalized service to the customers with cutting edge technology and a wide range of products, and during the process to ensure maximum return on assets with ultimate goal of serving the economy and society.