Job Report 1 Habib Bank Limited ACKNOWLEDGEMENT No one can say that I am perfect, everyone should admit that without the help of ALLAH and His people a man can’t get anything so I bow my head before almighty Allah with gratitude. I am also very much thankful and presents salute to many individuals who have helped me in shaping this report .I am also very much thankful to lot of class fellows and contemporary colleagues. I am especially grateful to Ms. Abeerah who took the time and trouble during the last few days to speak to me about the way this text could be further improved. I am also very thankful to the staff Habib Bank Ltd. Punjab Medical College branch especially to Mr. Javed Raza (Area Manager & Branch Manager) and Mr. Shehryar Ali (Manager Credit) who provided me an opportunity to work in friendly environment. It was an honor and pleasure to work with: Mr. Javed Raza (Chief Manager HBL Punjab Medical college branch) Mr. Asif Iqbal (Asst. Manager Foreign Trade Department) Mr.Shehryar Ali (Manager Credit Department) Mr. Kashif (Head cash Department) Mr. Maqbool Ahmed Khan(Manager operations) Ahsen Ali,Roll no:509 Job Report 2 Habib Bank Limited Table of Contents Description Page No. Executive Summary 3 Commercial Banking in Pakistan 4 History of Banking in Pakistan 5 About HBL Pakistan 8 History and Background 8 Privatization 9 HBL’s Mission, Vision and values 9 Board of Directors 10 Management 11 Corporate information 13 SWOT Analysis 15 Operations of HBL & Banking departments 18 A .Account opening department 18 B .Cash department 20 C .Credit department 21 D. Bill clearing department 23 E. Foreign exchange department 24 Products and services of HBL 27 Deposit accounts 28 HBL car loan 29 HBL credit card & Debit card 32 HBL personal loan & Phone banking 34 HBL Banc assurance 35 HBL Corporate banking & Commercial banking 37 HBL zarai banking 39 HBL Islamic banking 40 Learnings as an employee 42 Financial Performance of HBL in 2008 46 Ratio analysis of HBL 48 Award and Financial performance in 2008 52 Recommendations 54 Discussing a credit dept. problem 55 Glossary, Bibliography 56 Index 57 Ahsen Ali,Roll no:509 Job Report 3 Habib Bank Limited executive summary Every student of Master in Business Administration at Government College University Faisalabad has an essential requirement to do Six to Eight weeks job in any of the well reputed organization. The purpose of this program is to acquaint the students with practical applications of theoretical concepts taught to them during conduct of their MBA program. But I got job at HBL during my M.B.A so I am submitting job report.. I joined HBL on 28 th day of May,2008 as officer Band-1. Report starts with the topic evolution of banking. HBL was the first commercial bank to be established in Pakistan in 1947. Over the years, HBL has grown its branch network and become the largest private sector bank with over 1,450 branches across the country and a customer base exceeding five million relationships. On December 29, 2003 Pakistan's Privatization Commission announced that the Government of Pakistan had formally granted the Aga Khan Fund for Economic Development (AKFED) rights to 51% of the shareholding in HBL, against an investment of PKR 22.409 billion (USD 389 million). This report contains information about HBL’s board of directors, management, mission, vision and values. HBL’s operations are discussed in light of its working department in the branches like cash, clearing, foreign exchange and accounts department and also in light of its services and products which it is offering to customers’ weather they are individual, business, corporate or agriculture field related customers. HBL is currently offering phone banking, internet banking and various cash management services for the facilitation of its customers. HBL’s car to car loan has its own uniqueness in Pakistan’s banking sector. HBL’s branch network is extended all over the Pakistan which has its competitive edge over all other private sector banks in Pakistan. During the time of my job in Habib Bank Punjab Medical College branch Faisalabad I got the chance to work in all the departments of HBL working there but my specialization was credit department.. Duties and learning in each department is given in this report. Talking about financial performance of the bank in 2008 all the financial indicators are showing positive results when the financial performance of the bank in 2008 is compared with financial performance of 2007. During 2008 HBL also won some awards. At the end of this report I have given my suggestion for the improvement of the bank. Ahsen Ali,Roll no:509 Job Report 4 Habib Bank Limited COMMERCIAL BANKING IN PAKISTAN The word 'Bank' is said to have been derived from the words Bancus or Banque or Bank. This history of banking is traced to as early as 2000 B.C. The priests in Greece used to keep money and valuables of the people in temples. These priests thus acted as financial agents. The origin of banking is also traced to early goldsmiths.It was very difficult for Pakistan to build up its own Banking system immediately after independence without sufficient resources. Following the announcement of the partition plan in June 1947 there was a haste movement on the parts of banks to transfer their funds and accounts across the borders. The banks having their registered offices in Pakistan were transferred to India. In an effort to bring about the collapse of the new state by the persecuting an international policy of withdrawal, the Indian bank offices closed quickly. Those banks, which stayed, were considering the winding up of their business. By 30th June 1948 the number of schedule banks in Pakistan declined from mere scratch. Today there are more than 7000 branches of commercial banks along with an established network of supplementary financial institutions. All this development in the banking sector is the result of untiring efforts of four decades. History of Banking In Pakistan The interesting point which I observed during the span of mine job was the historical background of Banking & Financial sector which is the one in which great improvement and growth is observed since the formation of Pakistan. For studying the growth of this sector we can divide it into three stages, which are as follows: a) Pre-Nationalization Era b) Nationalization Era c) Post Nationalization Era a) Pre Nationalization period: There were only two Muslim banks in Indo Pak before partition; they were .Habib Bank Ltd. (est. in 1941 at Bombay) & Australia Bank Ltd. (est. In 1944 at Lahore). All other banks, at that time, were either owned by Hindus or Foreigners. At the time of partition there were 631 bank branches in area which came under Pakistani control. But due to blood shed and violence at large scale, mostly branches were closed and the disparity can be assessed from the fact that on July 1948 there were 195 branches with deposits of Rs.88 crore (880 million) only. Also a factor lagging in Pakistani industry was a central bank of its own, by that time Reserve Bank of India was acting as central bank for both countries and same currency notes were used in both territories. But Reserve Bank of India was biased and Set down Pakistan on many occasions such as the issue of funds transfer etc. In this period drastic steps were taken in government sector for the improvement of overall position. The private sector also responded to these changes and some very positive changes were observed. Some of the steps taken by the government in this regard were as under: Ahsen Ali,Roll no:509 Job Report 5 Habib Bank Limited 1) Inauguration of State Bank of Pakistan (SBP) on 1st July, 1948. 2) Setting up of National Bank of Pakistan in November, 1949 to control the 'jute' export in East Pakistan and to act as agent of SBP. 3) Larger powers were given to SBP through SBP Act (1956) for controlling purposes. 4) Banking Companies Ordinance 1962 for protection and guidance to banks. 5) Establishment of specialized banks, such as ADBP (1952); a) HBFC (Nov, 1952); b) P1CIC (Oct, 1957) c) IDBP (Aug. 1961); d) NDFC (Jan, 1973). These were the steps, which built a strong banking sector in Pakistan. This is also obvious from the facts that by 1973 there were almost 10 foreign banks were working in Pakistan and all over deposit position was around Rs.2300 crore (23,000 million). A bird eye view of 5 top banks was as given below: B) NATIONALIZATION PERIOD On January 01, 1974 all Pakistani banks were nationalized through Nationalization Act 1974. Under this law all Pakistani banks became a public property. All small banks were merged in bigger banks to create 5 major Pakistani banks Pakistani banks. These banks were to control by Pakistan Banking Council. There are still controversies about this act of government as whether it contributed in success of failure of banks. However the major changes after nationalization were as follows: Working of banks was extended to under developed areas. Market expansion for credit and deposits. Decrease in service level of bank officers. Decrease in profitability as well. However the effect of expansion was enormous and it can also be depicted with the help of table 2 which shows the deposit & branch positions of different nationalized banks. BANK POSITION IN 1992 Bank No. of Branches Deposits (Rs. In Millions) HBL 1926 153,431 NBP 1448 128,679 UBL 1684 87,482 MCB 1288 50,013 ABL 750 33,757 Ahsen Ali,Roll no:509 Job Report 6 Habib Bank Limited TOTAL 7096 453,362 C) POST NATIONALIZATION ERA In 1990 the government decided to denationalize all the nationalized institutes.