Askari Bank Internship Report 6v5yn

Internship report Submitted To Sir Faisal iqbal

Department Faculty of Management and istrative sciences MBA (3.5 year)

1 istration

masters in Business

Chapter no.1

Introduction

Internship is the academic requirement for completing MBA (3.5) degree. Students are required to undergo six weeks of internship with a well recognized organization. Main purpose of internship is to serve as the way of enabling the students to get practical knowledge about banking istration. 1.1.

Purpose of the Study

Main purpose is to get relevant information to complete internship report on Askari commercial bank.

2 istration

masters in Business

1.2.

Objectives of the Study

Main objective of this report is to thoroughly discuss the working of Bank. 1.3.

Limitation of the Study

Something is better than nothing. No matter how professionally a study is conducted, it cannot be perfect in all aspects. The report may not include broad explanations of facts and figures due to its nature.

3 istration

masters in Business

Chapter no. 2

OVERVIEW OF THE ORGANIZATION

ACCORDING TO BANKING COMPANIES ORDINANCE 1962 “Banking means the accepting, for the purpose of lending, or investment, of deposits of money from the public, repayable on demand or otherwise, and withdraw able by cheque, draft, order or otherwise.” “Banking companies mean companies which perform the business of banking in Pakistan.”

COMMERCIAL BANK “The commercial bank receives surplus money from the public and lend to others who needs funds. Bank collects cheque, bills of exchange etc from customers. It transfers money from one place to another. It provides agency and general utility services. Purpose of commercial bank is to earn profit.” Askari Bank has stretched into a network of 200 branches /sub branches, including 20 devoted Islamic banking branches. The Bank is listed on Karachi, Lahore and Islamabad Stock Exchanges.

A shared network of 2,991 online

ATMs layers all major cities in Pakistan chains the delivery channels for customer service. As at December 31, 2008, the Bank had equity of Rs. 12.97 billion and total assets of Rs. 206.19 billion, with 816,629 banking customers, serviced by our 6,808 employees. Askari Investment Management Limited and Askari Securities Limited are subsidiaries of Askari Bank occupied in managing shared funds and shares brokerage, respectively. Askari Bank is the only bank with its equipped head office in Rawalpindi, which have comparatively limited opportunities as compared to Karachi and Lahore. This created its own challenges and opportunities, and forced as to evolve an

4 istration

masters in Business

outward-looking strategy in of Askari market emphasis. As a result, Askari residential a geographically diversify assets base instead of a concentration and heavy dependence on business in the major commercial centers of Karachi and Lahore, where most other banks have their operational Head offices. The branch of Askari Bank was opened in Gujrat in June, 2002. Gujrat is a famous from fan and furniture industries, so to get the export market of these industries ACBL opened its branch in Gujrat. In short span of time this branch increased their business remarkably.

5 istration

masters in Business

6 istration

masters in Business

7 istration

masters in Business

Core Values: Honesty is the most valued standard in whatever we do. We understand that our commitment to satisfy customers’ needs must be fulfilled within a professional and ethical framework. We subscribe to a culture of high ethical standards, based on the development of right attitudes. The intrinsic values, which are corner stone’s of our corporate behavior, are i.

Commitment

ii.

Integrity

iii.

Fairness

iv.

Team-work

v.

Service

Corporate philosophy: From knowing our customer requirements to understanding employee needs, from utilizing modern technology to making responsible social contributions, from enhancing stake-holders value to practicing corporate ethics… We are continuously and consistently striving to address newer challenges with a single motivation: “The power to inspire and be inspired” Code of Business Principles: Askari Bank Code of Business Principles is to: i.

Deliver solutions that meet customers’ financial needs;

ii.

Build and sustain a high performance culture;

8 istration

masters in Business

iii.

Build trusted relationships with all stakeholders.

2.1.

BRIEF HISTORY OF THE BANK

The banking sector has witness a remarkable change during the last ten years with the development of Askari Bank, which is not only redefining priorities and focus of the banks, but also threatening the domination of traditional players. The story begins with the integration of Askari Commercial Bank limited in Pakistan on October 09, 1991, Askari Bank Commenced (begin) to operations in April 1992, as a public limited company. The bank is listed on the Karachi, Lahore and

Islamabad

Stock

Exchanges

and

the

initial

public

offering

was

oversubscribed by 16 times. While capturing the target market share amongst the view banks, Askari has provided good value to its shareholders. Its share price has remained just about 12% higher than the average share price of quoted banks during the last four years. Askari Bank has expanded into a nationwide presence of 83 Branches, and an Offshore Banking Unit in Bahrain. A shared network of over 800 online ATMs covering all major cities in Pakistan s the delivery channels for customer service. As on December 31, 2004, the Bank had equity of Rs. 6.016 billion and total assets of Rs. 107.168 billion, with over 475,000 banking customers, serviced by a total staff of 2,118. Askari Bank is the only bank with its operational head office in the twin cities of Rawalpindi-Islamabad, which have relatively limited opportunities as compared to Karachi and Lahore. This created its own challenges and opportunities, and forced as to evolve an outward-looking strategy in of Askari market emphasis. As a result, Askari developed a geographically diversified assets base instead of a concentration and heavy reliance on business in the major

9 istration

masters in Business

commercial centers of Karachi and Lahore, where most other banks have their operational Head offices. 2.1.1. MOTIVATION OF ASKARI COMMERCIAL BANK While successfully penetrating the key domestic markets through strategic expansion and business diversification they remain alive to the challenge emanating from the development in the global financial markets; the opportunities and threats engendered by greater deregulation and increased customer expectations. These provide them the impetus (moment) to make the best use of available resources, including modern technologies, to meet the challenges ahead. Historically, Askari’s core marketing focus for its asset base has been the middle and upper middle business houses (including wholesalers and manufacturers) operating in the large urban centers of Pakistan, which are primarily oriented towards foreign trade. This segment constitutes significant revenues to the bank. The liability side remains focused on the middle and upper middle class retired and serving government and armed forces personal and mid-size business houses. Their corporate banking division was established in April 1999 with the primary focus on servicing large corporate and multi-national companies (MNCs). Benefiting from the bank’s growing balance sheet size, this division B now gaining momentum and their long-term aim D to develop it into an independent. Strategic business unit (SBU)… This would the bank to acquire, develop and specialized abilities, and enhance their focus on serving the emerging needs of the corporate clients. With this branch network of 75 and further expected increase in future, the ATM’s facility and internet Banking, Askari Bank’s reach is ever increasing. In recognition of this reach, they have set up a retail-banking group in July 2000, the mobile ATM’s facility is first time started by Askari commercial bank in 2005 dedicated to serving the urban consumer market; Askari is committed to

10 istration

masters in Business

aggressively market this segment. The strategy is to provide their customers with a basket of innovative products to meet their varying needs. Askari Commercial Bank is the only Private Sector bank that has been approved by the World Bank as a Participating Financial Institution for the US$ 200 million Line of Credit sanctioned (authorized) to the Government of Pakistan for the Financial Sector Deepening and Intermediation Project. Askari's emphasis on further broadening its core foreign trade business translated into handling a higher volume of Export and Import business of Rs. 36 billion ing a growth of 42% over the previous year. This enhanced foreign trade business was secured due to excellent customer services and efficient international settlement arrangements with our correspondent banks. Askari Bank is operating throughout Pakistan. Most of the branches are connected through our State of the Art, On-line Communications Network, which gives the bank a competitive edge in providing instant services to its clientele. We also offer direct access to the latest Foreign Exchange Rates through our Online Communications. 2.2.

Nature of Askari commercial Bank

ACBL is private sector Bank and is categorized in commercial bank. Commercial bank is a separation of a bank primarily dealing with deposits and loans from corporations and large businesses. Commercial bank may also be seen as separate from retail banking, which involves the provision of financial services direct to consumers. ACBL offers both retail and commercial banking services offered include; personal loans, mortgages, saving and checking s, credit cards, debit cards. It provides both services and products to the business and consumer. Army Welfare Trust directly and indirectly holds an important portion of the Bank's share capital at the period end. The Bank has 150 branches (December

11 istration

masters in Business

31, 2007: 150 branches); 149 in Pakistan and Azad Jammu and Kashmir including 14 Islamic Banking Branches and an Offshore Banking Unit in the Kingdom of Bahrain. Corporate Information:

12 istration

masters in Business

Board of Directors Lt.Gen. Javed Zia

Chairman

Lt.Gen.(R) Imtiaz Zia

Chairman

Maj Gen Saeed Ahmad

Director

Mr.Zafar Alam Khan

Director

Dr.Bashir Ahmad Khan

Director

Mr.Shahid Mahmud

Director

Mr.Riyaz ul Haq

Director

Morale Noor mahomed

Director

Mr. Tariq Iqbal Khan

Director

Mr.Rafiqueuddin Mr. M.A Gazali

President Company Secretary

Audit Committee Dr.Bashir Ahmad Khan

Chairman

Mr. Ali Noor mahomed

Member

Mr. Zafar Alam Khan

Member

Legal Advisors Rizvi, Isa, Afridi & Angell

2.3.

Business volume, Reward honors

13 istration

masters in Business

Business Volume: Askari Bank achieved planned growing in concern and military operation during 2009.The total possessions of the bank amounted to RS. 254 billion as on December 31, 2009, ing an increase of 23 percent over December 31, 2008. Achievements and Reward Honors:

ACBL is the first and so far the only Pakistani Bank in private sector to have been rated as A1+ for short term category and A+ for long term category by PACRA(Pakistan Credit Rating Agency). The rating of A1+ is the highest category and stands for “obligations ed by the highest capacity for timely repayment” In 1994 ACBL earned International recognition as Asia currency Award and the statute title of Best commercial message Bank of Pakistan for the year 1994 while monetary unit money stated the depository financial institution as topper domestic depository financial institution of Pakistan for the year 1995. ACBL has recognition of achieving the following firsts in Pakistani banking; First Pakistani Bank to offer on-line real-time banking on a countrywide basis. First Bank with a nation-wide ATM network. First Bank to offer Internet banking services.

14 istration

masters in Business

First Bank to offer e-Commerce solutions. Different institutions and magazines have also awarded them at different occasions,

some

are;

“The Best Bank in Pakistan” by the Global Finance magazine for the years 2001 & 2002. “Best Consumer Internet Bank” award for Pakistan by Global Finance for the year 2004.

“Best Presented Annual s” awards for 2000and 2001 from the Institute of Chartered ants of Pakistan and the Institute of Cost and Management s of Pakistan, Prizes from the South Asian Federation of ants for The best Presented Annual s” for the financial sector, in the SAARC region. During the year 2009, the annual report of the Bank for the year 2008 won: 

The first prize of

“The Best Annual Report” for the financial sector,

instituted tly by The Institute of Chartered ants of Pakistan and The Institute of Cost and Management ants of Pakistan.

15 istration

masters in Business

2.4. PRODUCT/Service line 2.4.1. PRODUCT LINE Askari Commercial Bank Ltd, has taken progressive tense steps and has introduced innovative products and employment for their customer by saying provide you a assortment Askari Bank Offers Askari bank serves in the following areas:  Investment Banking  Consumer Banking  Treasury & International Banking  Agriculture Banking  Islamic Banking Investment Banking The main activity involved in investment banking debt/capital markets, advisory services and trading (both equities and bonds) in this portion following are the products are involved:  Commercial Paper.  Debt Capital Markets

16 istration

masters in Business

 Capital Raising  Trading activity (equities and derivatives) Consumer Banking During 2007, the consumer banking services obtainable by the Bank were updated by combining consumer financing business and credit card business under one umbrella and were renamed as consumer banking service group. In this portion following are the products are involved:  AskCard (Debit/ATM Card).  AskPower (Prepaid card)  Askari Bank’s mortgage finance (Home Loans)  Askari Bank’s personal finance.  Cash management services  Rupee traveler cheques.  Askari investment certificates etc. PERSONAL FINANCE  Personal Finance is a parametric quantity driven merchandise for business to the needs of the full general public happiness to unlike segments. One can help unlimited opportunities through Askari Bank s Personal business. With unmatched business features in of loan sum payback time period and most affordable serial installments Askari Bank s Personal business makes certain that one gets the most out of his her loanword. Once a good credit history is established, the door to opportunity opens much wider

.

17 istration

masters in Business

MORTGAGE FINANCE

 Askari "Mortgage Finance" offers the convenience of owning a house of choice, while living in it at its rental value. The installment plan has carefully designed to suit both the budget & accommodation requirements. It has been designed for enhancing financing facility initially for employees of corporate companies for purchase/ construction/ renovation of house. The maximum financing amount is Rs. 10 million with repayment tenure up to 20 years.

BUSINESS FINANCE  In pursuance of the National objectives to review the economy of the country, ACBL is providing loans to small and medium size business enterprises under Askari Bank's Business Finance system .ACBL’s goal is to offer a loan, which enable business group of people to receive the financing required by them based on their cash flows. ACBL’s valued customers can enjoy the convenience of getting

18 istration

masters in Business

financing

on

attractive

with

the minimum processing

turnaround time.

ASKCAR (Car Finance)

 Yet another of our products, Askari offers the most convenient and affordable vehicle- financing scheme, which provides our valuable customers an opportunity to own a brand new vehicle of their choice. With minimum down payment, lowest insurance rates and widest range of available car makes and models, Askcar offers the best value to our esteemed customers. ASKCARD  ASKCARD means freedom, comfort, convenience and security, so that you can have retail transactions with complete peace of mind. ASKCARD is your new shopping companion which enhances your quality of life by letting you do shopping, dine at restaurants, pay your utility bills, transfer funds, withdraw and deposit cash through ATM anywhere, anytime.

19 istration

masters in Business

Treasury and International Operations During 2007, the bank increased its overall foreign trade business. The import business increased to Rs. 119.3 billion. I.e. growth of 11% over last year, while the exports increased by 6% over last year, to Rs. 97.3 billion. Products:  Foreign Currency s.  Foreign Trade Services (Import & Export)  Import & Export Financing etc.

Agriculture Credit Financing In agriculture credits financing the banks facilitate the following schemes to the public:  Askari Kissan Ever Green Finance.  Askari Kissan Tractor Finance  Askari Kissan Farm Mechanization Finance,  Askari Kissan Aabpashi Finance etc. Islamic Banking During the last year Islamic banking was launched under the brand ‘Askari Islamic Banking’ by opening 6 devoted Islamic Banking Branches in main cities of the country. In order to meet customer’s demand for Shariah Compliant banking, in the following areas:  Islamic Corporate Banking  Islamic Investment Banking  Islamic Trade Finance  Islamic General Banking

20 istration

masters in Business

 Islamic Consumer Banking. 2.4.2. S Askari Bank operating following types of s:  Current .  Saving .  Askari Special Deposit .  Term Deposit.

ADVANCES

Advances are major sources of earning of income for commercial banks. Banks attracts excess balances from the customers at low interest revenue enhancement makes advances at higher involvement rates to the individuals or concern firms. ACBL offer these facilities;  Funded facilities  Non- Funded facilities Funded facilities In funded facilities the bank actually advances money against further repayment. These facilities are known as cash credits. Non- Funded facilities

21 istration

masters in Business

Non Funded facilities are those in which depository financial institution substitutes its own recognition for its customers. ACBL offers to its customers are large number of non-funded facilities. These facilities include; 1. Guarantee 2. Letter of credit

2.5.



Irrevocable letter of credit



Revocable letter of credit



Sight letter of credit



Usance letter of credit

Pestle analysis

Political Pakistan despite all international and public perceptions, today is a functioning democracy and gradually there is a change in complexion and composition of legislatures with more educated people and women (27% of National Assembly and 17% of Senate) entering into politics Similarly it helps in deg best strategies to implement that could the revival of bank industry. Like in the time of nationalization banks had to suffer as other industries that’s why that impact is still found in the presentation of this industry. Economical Although banking aspect development is important at the other stage of economic maturation general relaxation presuming a homogeneous banking concern role may not necessarily promote maturation. The estimated monetary value construction indicates that province closely-held commercialized Banks are ample sufficient piece evolution business institutions and secret Banks can expect to obtain monetary value good advantages by expanding their trading operations. Since scope economies are important portfolio variegation generally

22 istration

masters in Business

increases bank net income. In addition privatized banks are the most efficient followed by strange and buck private banks. Public banks are the least efficient. Social Banks always helped people in improvement of living status of poor people in various forms like contribution loans to poor for starting concern or directly providing them the instruments that could enhance their living conditions. Similarly Askari depository financial institution always tested to provide the poor people loans on delicate and also helped to eradicate unemployment by providing job opportunities. Recent high growth trends coupled with enhanced spending on social and Poverty programs that rose from 3.8% of GDP in 2001/2002 to 5.05% by 2005/2006 has together begun to pay some dividends as evident from the Reversal in poverty incidence trends and social indicators. Technology The Banking sector in Pakistan has experienced a rapid change. Almost a decade back this sector was limited to the Sarkari (read nationalized) and cooperative banks. Then came the multi-national banks, but these were limited to serving a selected few. One could regard the past as the 'medieval ages' in the banking industry, wherein every branch of the same bank acted as an independent information storage tower and multi-channel banking (ATMs, Net banking, Tele-banking, etc) was almost unreal. Today banks have to look much away from just providing a multi-channel service platform for its customers. There are other pressing issues that banks need to address in order to chalk-out a roap for the future. Here are the top three concerns in the mind of every bank's CEO. The customer is interested in how he/she can benefit from the bank and its products. That's why it becomes necessary for a bank to differentiate its products from the others. Some of the ways in which differentiation can be

23 istration

masters in Business

introduced are through specialization, new products, and increasing the added value. 2.6 Contribution of Askari bank limited toward economic development ACBL has been at the top of economic development in the country. It has period of play the old age funded projects which topper serve the economic objectives and sociable needs of the state. The bank has made enormous contribution to the evolution of body part and culture medium sized entrepreneurs and to self employ schemes. ACBL realizing its responsibility towards improving natural environment accepted the challenge of planting saplings in an area of 3,000 hectares where severe deforestation has occurred over the years in the districts of Umerkot, Tharparkar and Mirpurkhas. The bank was celebrated for its contribution in setting “Business World Record” for planting maximum number of trees in a single day. The record was set on 15th July 2009 in an area of Kati Bundara under the president’s Mass Forestation Program for plantation of 400,000 mangrove tree seedlings.

24 istration

masters in Business

Chapter no. 3

3.1.

Organizational structure

Organizational Structure in Askari Commercial Bank

Organizational structure is more than boxes on the chart. It is a pattern of interaction and coordination that links. Technology and human components work together to ensure that organization accomplishes its purpose. Some characteristics of ideal organizational structure called Bureaucracy by Max Weber is found in the organizational structure of the ACBL as follows Position arranged in a hierarchy Each lower office is under the control and supervision of a higher one. This bureaucratic principle helps the management of ACBL to control over every member in the structure. A system of abstract rules A continuous organization of functionary functions should be boundary by rules. This bureaucratic principle helps the management of ACBL to ensure uniformity and coordination of effort. In this age of complex, highly conflicting relationships, advanced technology and empowered employees; Max Weber bureaucratic model is only the historical starting point, not the end, of the organizational analysis. VERTICAL STRUCTURE ANALYSIS Vertical analysis concentrates on centralization versus decentralization and on flat versus span of control structuring. Centralization versus Decentralization 1) Geographical

25 istration

masters in Business

Geographical centralization means that the organization has all its operations under one roof. Geographical decentralization means the dispersion of Organization operations through the country. SIL has its operating office in Lahore and Karachi, which show that it is geographically decentralized. 2) Functional An organization has separate department that performs such as selection or training for others is called centralized organization and if the various functional departments (for example; marketing, production and finance) handle their own human resources functions then it is considered decentralized organization. In SIL, functional level is centralized. 3) Delegation Centralization and decentralization commonly refers to delegation of decision making command. Within the company, there is centralization to a greater extent. Flat versus Span of control In ACBL, the structure of the organization is tall with a few at each level. As a result there is narrow span of control and supervisors have close control over their subordinates. HORIZONTAL STRUCTURE ANALYSIS Horizontal structural analysis is concerned with organizing one level of the hierarchy. The concept of Departmentalized and of line and staff represent this approach. Departmentalization ACBL has a functional departmentalized structure. The greatest single advantage of functional departmentalization is that it incorporates the positive aspects of specialization. It also leads to greatest efficiency and the most economical utilization of employees.

26 istration

masters in Business

3.1.

Organizational Hierarchy chart

27 istration

masters in Business

3.2.

Number Of Employees

Branch G.T road Gujrat Overall

3.3.

Total employees 32 6,808

Year 2013 2014

Main Offices of Askari Commercial Bank

Registrar & Share Transfer Office THK Associates (Pvt) Limited Ground Floor, State Life Building No. 3, Dr.Ziauddin Ahmad Road, Karachi – 75530 P.O. Box: 8533, Karachi. Tel: (92 21) 5689021, 5686658, 5685681 Fax: (92 21) 111 000 322 E-Mail: [email protected] Website: www.askaribank.com.pk 3.4 Introduction to all Departments

28 istration

masters in Business

Banking procedures are divided up between diverse departments. Different departments do their jobs in synchronization with the bank policies. In Askari bank each branch is divided into various departments. The departments working within ACBL are as: 3.4.1. GENERAL BANKING DEPARTMENT 1. opening department 2. Remittances department 3. Cash department 4. Clearing department 3.4.2. PRIVILEGE BANKING DEPARTMENT 1. Online banking 2. Lockers 3.4.3. CREDIT DEPARTMENT 1. Nature of credit 2. Types of credit instruments 3.4.4. FOREIGN EXCHANGE DEPARTMENT 1. Functions of foreign currency department 2. Requirements of fund transfer S DEPARTMENT FUNCTIONS OF OPENING DEPARTMENT 1. Provide opening form according to the customer's requirements. 2. Guide the customer about the requirements of the opening and form filling. 3. Check the forms whether they are correctly completed or not 4. Preparing Checklist.

29 istration

masters in Business

5. Stamping on the form. 6. Maintain opening . 7. Pasting of forms in after release from general banking in charge. 8. Issuance of cheque books. 9. Issuance of s maintenance certificate. 10. Closure of . 3.4.5 REMITTANCE DEPARTMENT The remittance section deals with the transportation of currency from one place to another. This department deals with the local acceptance transfer only. Askari banking concern provides this work to both customers non customers. FUNCTIONS OF REMITTANCE DEPARTMENT The function of remittance department is to handle the following instruments: 1. Pay Order 2. Demand Draft 3. Pay slip 4. Telegraphic Transfer 5. Payment of Remittances 6. Cancellation of pay order & demand draft Remittance can be made through:  Instrument transfer  Electronic transfer  Mail transfer

30 istration

masters in Business

CASH DEPARTMENT All physical movement of cash in the bank is made through the cash department. Normally cash department performs following functions: 1. Receipt 2. Payments 3. Act according to any standing instructions 4. Transfer of funds from one to another 5. Handling of ATM 6. Verification of signatures 7. Posting 8. Handling of prize bond 3.4.6 CLEARING DEPARTMENT The word clarification has been derived from the intelligence area and is formed as a system by which Sir Joseph Banks exchange cheques and former negotiable instruments drawn on each former within a specific region and thereby secure defrayment for their clients through with the clarification House at specified clock time in a competent way. 1. Since clearing does not involve any cash etc. And entire written take property through record book entries the number of transaction can be straightout 2. No cash is needed as such the risk of robbery, misuses and pilferages are totally eliminated. 3. As major payments are ready-made through glade the Banks came manage cash payments at the counters with a lower limit amount of cash in vaults.

31 istration

masters in Business

4. A lot of time, cost and labor are saved. 5. Since it provides an extra service to the customer of banks without any service charges or costs, more and more people are inclined and attracted towards banking 3.4.7 CREDIT DEPARTMENT Although the study of money is important for the understanding of the way in which our economic system operates, we must recall this point that most exchange transactions in this system are carried on today without the use of actual money, i.e. Those are carried on by means of credit and credit instruments rather than money. While money still forms the basis of credit. 3.4.8 FOREIGN EXCHANGE DEPARTMENT The term "foreign exchange" is used to denote either a foreign currency or the rate at which one currency is converted into another or the means & methods by which one currency is exchanged for another. Foreign exchange department performs following functions: 1. Foreign Bills for collection (FBC) 2. Foreign telegraphic transfer (FTT) 3. Foreign Demand Draft (FDD) 4. Issuance of Proceed realization certificate 5. Inward remittances 6. Daily Reporting

32 istration

masters in Business

3.5 Comments on the organizational structure Organization structure; The official pattern of how people and jobs are grouped in a concern. Departmentalization; The basis which jobs are together. Chain of command; Is the constant line of power that expands from upper organization level to the lowest level and clarifies who report to whom? Centralization and Decentralization; Decision making is made by top level or lower level. Span of control; The number of subordinate a manager can direct professionally and successfully. In my point of view, the structure of ACBL is simple active and unify decision making the whole department is report to operational manager and then he report to branch manager. The jobs duties and responsibilities are apart into entire section but due to little figure of worker in ACBL jobs responsibilities are portion between employees. Centralize decision making make the distance between the top level and lower level manager. The main benefit of centralize decision devising is supervisory program can justice and evaluate the public presentation of all employee.

33 istration

masters in Business

Chapter no. 4 Part - ‖

Brief Introductions to Branch

Internee work

4.1 Introduction of branch Askari commercial Bank started its operations in 1992, and head office of Askari commercial bank in Rawalpindi. ACBL has 75 branches in Pakistan. One of the branches is located in Hassan Plaza G.T road Gujrat where I have done my internship of six weeks period. There are 32 employees and the environment of bank is very self-motivated and attractive. The branch Manager Mr. sheikh Javed is very hardworking. The business volume of the branch is twenty million and it has the following departments; Remittances Department Cash Department Agricultural Department s Department Foreign Trade Department Credit Department IT Department Clearing Department Starting And Ending Date of Internship; Starting Date of Internship 15-07-2013 Ending Date of Internship 30-08-2013

34 istration

masters in Business

4.2 Details of supervisors Branch Manager Operational Manager

Javaid sheikh abid khan

4.2.1 Cash department; Incharge: Mr. M.shabir OG-2 Assistant: Mr. Zeeshan adil C.D Incharge: Mr. Abid Khan 4.2.2 Clearing Department; Incharge: Mr. Qazi Irtza Incharge IBC Mr. Habib Shah 4.2.3 Foreign Trade Department; Incharge: Syed Awais Mehdi Assistants: Mr.Irfan Rasheed & Mr. Atique Rehman 4.2.4 Deposit Department; Inchrge Opening: Mr. Haseeb Mali s Incharge: Mr, Mohsin Raza 4.2.5 Credit Department; Incharge: Mr. Abdul Majid Assistant: Mr.Shams-us-Din

35 istration

masters in Business

4.3 Weekly Timetables 4.3.1 Week 1st (18, July, 2013– 24 July, 2013) DATE 18-7-

DAY Thursday

2013

19-7-

Friday

2013

DEPARTMENT

TASK SIGNATURE Introduction own self &

OPENINING

exchange

DEPARTMENT

Letters Introduce the General banking & procedure of opening

22-7-

Monday

2013

23-7-

Learn the basis rules for opening an

Tuesday

2013

Customer Dealing to attract them through providing

the

information related to the bank and s 24-7-

Wednesda

Filling

the

forms

for

2013

y

opening the s (Individual )

36 istration

masters in Business

4.3.2 WEEK 2(25 July, 2013, 31st July ,2013) DATE 25-7-2013

26-7-2013

DAY Thursday

DEPARTMENT

TASK Fill the forms of Individual

OPENING

filled ss card and punch stamps

DEPARTMENT

on form and ss card Types of opening

Friday

SIGNATURE

(t or 29-7-2013

individual) and operate Filling the forms for

Monday

opening

the

s

(t )+filled ss card and punch stamps on form and ss card 30-7-2013

Tuesday

Same job do this Day and fill pay in slip

31-7-2013

Wednesday

Record the open into their specific

4.3.3 Week # 3 (1 August, 2013– 7 august, 2013) Date 01-8-2013

Day Thursday

Department Activities Foreign Trade Introduction Department

of

new

department

37 istration

Signature

masters in Business

02-8-2013

Friday

Basic procedure of its working

related

to

imports and exports

05-8-2013

Monday

Learnt basic

about

the

documentation

involved in imports

06-8-2013

Tuesday

learnt about the basic documentation

07-8-2013

involved in exports Learnt about the

Wednesday

remittances

4.3.4 WEEK 4TH (08 august 2013, - 14, august, 2013) DATE 08-8-2013 09-8-2013

DAY Thursday Friday

DEPARTMENT Clearing

ACTIVITIES I deal with

inward

SIGNATURE

Department

clearing Deal cheques

which

are drawn on ACBL G.t road Gujrat branch sent 12-8-2013

Monday

by other banks. I did same activity as 38

istration

masters in Business

13-8-2013

yesterday I deal with

Tuesday

outward

clearing

14-8-2013

Wednesday

I received the cheques of the customers check the

date,

signatures,

amount in figures and words

and

cheque

number of deposit slip.

4.3.5 Week 5th (15, august, 2013-21, august, 2013) Date 15-8-2013

Day Thursday

Department Remittance

Activities Signature Introduce about new task

department

of Remittances Department

16-8-2013

Friday

Learn basic requirement and how it will be issued

19-8-2013

Monday

supervisor told about the method of filling the form of

demand drafts &

observe 20-8-2013

Tuesday

the work Dealing customers & told

39 istration

masters in Business

them course of action about 21-8-2013

issuing

the

demand draft Payment of

Wednesday

Demand

Draft

after

checking that it will be paid or not and take signature of the customers

4.3.6 Week 6th (26, august 2013-30,august, 2013) Date 26-8-2013

Day Monday

Department Remittance

Activities Introduce new task of

department

Remittances Department,

Signature

that issuance, procedure of the Pay Order

27-8-2013

Tuesday

supervisor told about the procedure of entering the Pay Order & observe the Work

28-8-2013

Wednesday

Fill the form for issuing the Pay Order

29-8-2013

Thursday

Payment of Pay

40 istration

masters in Business

Order after checking that it is related to will be paid or not and take signature of the customers 30-8-2013

Friday

work on entering the payment of Pay order

4.4 Detailed description of departments you worked in your internship DEPOSITS DEPARTMENT Deposit is the functional component of a Askari Commercial Bank. No bank can run its operations without deposits. Main function of a commercial bank is to channelize saving from the savers to the ultimate s of funds. The process of collecting saving is called Deposit Mobilization. Two board categories of deposits with reference to time period are: Demand Deposit: These are payable on demand. They include current , varied deposit (e.g. margin ) and call deposit receipt. No profit is given on demand deposits. Time Deposit: Payable on demand with certain maturity. Attracts profit with respect to time. OPENING OF S:

41 istration

masters in Business

At the time of opening s, officers

considerately obtain as much

information as possible about the honesty and character of the person, his correct name, address and occupation. It is, therefore, essential that appropriate care and proper procedure be followed for opening different types of for different types of customers. Askari Commercial Bank Ltd. has the following classification of s a. INDIVIDUAL S b. PARTNERSHIP FIRM S c. T STOCK COMPANY S d. AGENCY S e. CLUBS, SOCITIES AND ASSOCIATIONS S f. EXECUTORS AND S S g. TRUSTS h. LOCAL BODIES ETC. I. PROPERITORSHIP j. k. OTHER MISC. S. Individual : Such s may be classified as

42 istration

masters in Business

I. of literate ladies and gentlemen. ii. of illiterate ladies and gentlemen. iii. o Parda observing ladies. iv. t . iv.

Minor .

of Partnership Firms: Mean opening s of the partnership firms the business concern deed from ed firms is needful to be obtained in addition to opening night form and specimen signature card. The partnership letter is incorporate in the opening form which must also be gestural by all the partners of the firm weather condition ed or un certified s t Stock Companies: t stock companies include (1) Private Limited Companies and (2) Public Limited Companies. Askari Commercial Bank needs following documents whereas opening s of t stock companies: Copy of Resolution: a. Memorandum of Association b. Article of Associate c. Certificate of Incorporation

43 istration

masters in Business

d. Certificate of commencement of Business (only required for public Limited company) e. National identity cards of Directors f. List of Directors with their shareholding s of Agents: An agent is the person who is allowed certain acts in behalf of another person. The person for whom he has to carry out the business is called the principal. s of Clubs, Societies and Associations: Clubs, societies and associations concerns are non trading and non-profit in nature. They have their own rules and their affairs are monitored by committees, which may be called governing bodies or managing committee or executive committees. Documentation Check List: a. opening form b. Specimen signature card c. Resolution to be ed by their governing body wherein they will resolve that: I. Banking open in their name with the Askari Commercial Bank Limited. II. Name(s) of person to be specific for operation on the III. The manner in which the shall be operated.

44 istration

masters in Business

d. Certified copy of Rules and Regulations or Bye-n-laws e. Letter of registration. f. Letter of undertaking to the effect that as and when change takes place they will inform the bank of such changes. PLS Saving Bank : Saving deposits were launched to repeat and give confidence the of saving among people of small income in order to achieves of Islamisation of the banking system in the country, the government authorized the Askari commercial bank to accept Saving Deposit on profit and loss sharing basis. Deposits received under this scheme are invested in non-interest bearing advances and other avenue so as to remove the element of interest. Current : A current is a running , which is continuously in operation, by the customer on all working days of the bank. The customer deposits without the current deposits without previous notice to the bank. PLS Term Deposit: Fixed or term deposits are the major source of funds of a commercial bank. Term deposits, as the name implies, are deposits kept with a bank for a certain period of time. They are not payable on demand like the current deposit. The depositor can only withdraw them after the specified period of time. The persons or firms self-assurance churchlike bodies which wealthy person surplusage monetary resource livelihood the medium of exchange in rigid deposits with banking concern.

45 istration

masters in Business

Cheque Book Issuance: Check book is issued for only electric current PLS and ASDA FISDA and FAIDA s. It is not issued for PLS Term Deposit and value plus Saving s, because in these s, amount cannot be withdrawn within a fixed time period.

REMITTANCE DEPARTMENT The need of remittance is generally felt is commercial life mostly and in everyday life generally. The major 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 a tool payable on demand for which value has been estimated, issued by the branch of the bank drawn i.e. to be paid 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 candidate. Issuance Procedure for Demand Draft:  A demand bill of exchange application is given to the client he fills in applicable 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 freedom form, tax is not charged.

46 istration

masters in Business

 In case of cash sedimentation the teller counts the amount and signs the DD practical application and enters it in the registry.  Then the In charge of remittance department signs it and operation manager counter signs it.  The entry is made in the DD issuing registry DD is given to the client.  Vouchers are prepared and posted.  DD advises are printed and mailed to the several branch. Payment Procedure for Demand draft:  DD is received by the bank.  The DD credit advice is received through mail. The numbers are checked and signatures are verified.  An entry is made on the DD payable registry and the vouchers are made.  DD credit is attached with the vouchers and presumption for poster to the computer  When DD is received the test numbers are checked and the payment is made.  Vouchers are presumption for poster and the entry that was readymade in the is closed i.e. DD payable is nil. Telegraphic Transfer (TT): It is the quickest means of transfer of funds from one place (Branch) to other place (Branch) of the same bank. Generally a mail service conveys proposal reaches the drawer subdivision the following day done courier employment. But sometimes, a client demands that his funds should be transferred through the quickest way. In such cases, transfer of funds message is ed through telephone or telegram. This mode of transfer was used before online. Online system is very effective for this purpose now-a-days. In Askari Commercial Bank online scheme is used.

47 istration

masters in Business

Issuance Procedure for TT:  The request of issuing TT is taken on the regular in print form.  The customer fills the form correctly and signs it.  The Head of Remittance Department checks it, the charge such as expenses, tax and telex as per efficient schedule and signs it.  If he fills the tax freedom form then no tax is deducted.  Then a TT is made on colorless slip. There are 3 copies, the original one is faxed to the Branch, one to the Head Office and one is kept for record.  The entry is made in the TT issuing registry.  When payment bill is received, it is attached to the TT office copy in the file. Payment Procedure for TT:  When a TT arrives, the test numbers are checked and the signature is verified.  The entry is made in the TT payable registry.  If there is no then the TT received needs income stamp and then payment is made. TT receipt is strictly fixed. Pay Order: It is an instrument issued for payment in same city. Pay order issue from on e branch can only be allocated from the same branch. It is normally referred to as banker’s cheque. It is also called confirmed cheque, because bank issues this on it own guarantee. Issuance Procedure:  The standard form is given to the client. He fills in the facts and signs it.  The concerned officer checks the form.

48 istration

masters in Business

 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 candidate as     

a receipt. Then the pay order receipt is filled consequently. Counter foil is also packed. An entry is made in the pay order issue . Then the authorized officer signs it after checking the pay order. The order is then handed over to the candidate after obtaining his

signature on the PO Form.  A voucher is also made and post 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 .  Then the amount is credited to the of the customer or pain in cash.  PO is posted at the computer.

Pay Slip: It is a tool issued by the bank for the completion of its own payment. It is used for payment by the bank to anyone (may be employees) in this case only one bank is involved. He is the issuer as well as the payer.  No eliminate Duty  No Commission Issuance:

49 istration

masters in Business

 A recognition voucher is sent from the department to the remittance department.  Pay Slip book is taken out and filled according to the recognition    

voucher. It is entered in the pay slip . It is signed by authorized Officer. A voucher is prepared and posted. Pay Slip is then handed over to the customer.

Payment Procedure:  Pay Slip is just like a cheque and bank is liable to pay against pay slip.  After that when the pay slip is received by the bank for payment, it is again transferred in the .  Then payment is made and it is posted in 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 called Outward Bills for Collection. Procedure:  The cheques that are of other cities are separated.  They are entering in the OBC and OBC numbers are set to    

them. The OBC forwarding schedules are organized for different branches. The respective cheques are attached with the schedule. The office copy is filled and new schedule is mailed. On clearing, the particular banks send back the OBCs along with the

IBCA (Inter Branch Credit Advice).  The OBC numbers are checked from the OBC , after those entries are made.

50 istration

masters in Business

 Commission charges are deducted from the . 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 registry. The IBC numbers are chosen to them.  The cheques are lodged for clearing.  After recognition, an IBCA is arranged and mailed to the branch from where the cheque was received.  At the end of the day, two vouchers are ready and posted. CLEARING Department  Outward Clearing  Inward Clearing Outward Clearing at the Branch: The following points are to be taken into concern while a tool is accepted at the counter to be presented in outward clearing: 1. The name of the branch appears on its face where it is drawn on 2. It should not be stale or post dated or without date 3. Amount in words and figures does not differ

51 istration

masters in Business

4. Signature of the drawer appears on the face of instrument 5. Instruments is not mutilated 6. There should be no objects modification if so, it should be properly authenticated 7. If order tool, duly authorized and last endorsee’s being credited 8. Approval is in accordance with the crossings if any 9. The amount of the tool is same as mention on the paying-in-slip and stump 10. The label of on the paying-in-slip is that of payee or endorsee (with the exception of bearer cheque). If a tool is in order then out bank’s special crossing stamp is affixed across the face of the tool. Clearing stamps is affixed on the face of the tools, paying-inslip and counterfoil (The stamp is affixed in such a manner that half appears on paying-in-slip and half on counterfoil). The tool is suitably discharged, where a bearer cheque does not required any discharge and also a tool in favor of a bank need not be discharged. The tool along with paying-in-slip is retained while the counterfoil is given to the customer duly signed. Then the following steps are to be taken:1. The particulars of the tools and the and the pay-in-slip or credit vouchers are entered in the Outward Clearing . 2. Serial number is given to each voucher 3. The is balanced, the credit voucher are separated form the tool and are released to respective departments against tool and are

52 istration

masters in Business

released to respective departments against acknowledgement in the 4. The schedules are arranged bank-wise 5. The schedules are prepared in triplicate, two copies of which are attached with the relevant tool and the third is kept as office copy 6. The house page is prepared from schedules in triplicate 7. The schedules and house pages are signed by the officer incharge with branch stamp 8. The grand total of the house page is taken and agreed with that of the outward clearing 9. The tools along with duplicate and house page are sent to the Main Office Inward Clearing of the Branch: 1. The particulars of the tools are compared with the list 2. The tools are detached and sort out department wise 3. The entry is made in the Inward Clearing (serial number, tool number, number, amount of the tool is written). 4. The tools are sent to the respective departments against acknowledgement in the Inward Clearing . 5. The tools are scrutinized in each respect before honoring the same FOREIGN EXCHANGE DEPARTMENT

53 istration

masters in Business

Foreign Exchange Department works in ACBL like the general bank departments. This department deals with the following:   1.

Import Export Foreign Remittance IMPORT:

The international trade transaction, in which one country buys goods from other country, is called import. The import trade in Pakistan is governed by import and export Act of 1950. Previously, the regulating body of imports was controller of Import and Export. But this function has been shifted to Export Promotion Bureau. Import License and Registration: The individuals and firms who desire to import goods from the foreign countries are required to obtain import license. Contract of sale: After getting the license, the importer then negotiates with the exporter. When they reach to an agreement on all of sale, they sign a contract. Thus contract includes all information of and condition of sale. Letter of credit: Foreign trade payment problems are mainly solved by a letter of credit. A letter of credit is issued by the importer’s bank. If guarantees payment to the exporter up to specified amount of money provided the and conditions laid down the L/C are fulfilled. A letter of credit is a commitment on the part of buyer’s bank to pay or accept draft drawn upon it, provided drafts do not exceed a specified amount.

54 istration

masters in Business

A letter of credit thus is a (I) written undertaking by an importer’s bank to exporter’s bank. (II) That it will pay or accept draft drawn upon it up to a stated amount with a specified time. (III) The compensation will only be made to the exporter if he compliers with the conditions of credit. 2. EXPORT: This department deals with the transactions, which relates to sale of goods in foreign countries and receipt of foreign exchange from abroad. The calculating body of export in Pakistan is Export Promotion Bureau, it gives special incentive to the businessmen for attractive the exports and reducing the Balance of payment shortfall. It restricts the export of some goods and reinforces export of other. Documentation:      

E-Form Bill of exchange Export invoice Packing list Bill of lading Certificate of origin

3. Foreign remittance: Askari Bank also operates in Foreign Currency s. In agreement with instructions of SBP, foreign currency s are opened in these currencies: US Dollar, Pond, Japanese Yen, and Euro. Funds are transferred abroad by Foreign Telegraphic Transfer Swift MT-100 is used for this transfer. Askari Commercial Bank has its bureau planning in those countries, where its own branches are not reputable. Its agency arrangements with City Bank, American Express, ABN Amor, Standard Chartered Bank.

55 istration

masters in Business

4.5 Detail description of operations I worked in different departments of ACBL and performed different activities, which are as follows 4.5.1 opening department; I performed many operations in opening department, as  Customer dealing to attract them through providing the information related to the bank and s.  Filling the forms for opening the s (Individual )  Fill the forms of Individual filled ss card and punch stamps on form and ss card  Filling the forms for opening the s (t )+filled ss card and punch stamps on form and ss card  Record the open into their specific 4.5.2 Foreign Trade Department;  Customer dealing  Filled the different documentation relating imports and exports 4.6 Tasks assigned to me: I did my internship in Askari Bank Limited (Hassan Plaza G.T road Gujrat). My timings were 9am to 4pm. During that time period I was assigned different tasks. First of all the bank Manager, Mr.Javeid Sheikh, told me about the rules and regulations of the Askari Bank and the basics of some operations of the departments in the bank. In six weeks I have performed different activities like opening procedure, remittances, chequebooks issuance, bills collection, vouching, clearing and credit granting procedures. 4.7 Summary of learning:

56 istration

masters in Business

Working with Askari commercial Bank Limited, for internship project added a great value to my knowledge, skills, and abilities and hence gave me a chance to relate my studies in the practical working environments. Internship taught me,    

Professionalism Confidence and presentation abilities Communication skills Handling the stressful situations

Workings in an organization does not bound your cognitive content to equitable one section that you are allotted with but actually the organization is running with a orderly collaboration of the departments and hence requires communication theory and fundamental interaction. Wellspring that‘s it that the point that you should not ignore and always keep your mind and heart clear for the experience. If you are in a situation and have interactions your studies are beginners implemented in practical environs there. You’re not by ing your boss because you know that organizational hierarchy is defined and proper abstraction channels are available which should be used. OR. You won’t display resistance to change reason you deliberate that change is the alone constant

and hence

necessary for organizational evolution and employees survival 4.7.1 What skills and qualifications you think that you have gained from the internship?  The most important thing that I got to learn from this internship program is that I gained some experience of working in a real world scenario. After gaining academic knowledge and classroom experience for so many years this was the first time that we got to work in the real world. This work experience though of a short span has thought us so many things like dedication, commitment, interpersonal and communication skills etc which will certainly help us in any future endeavors we take. Whatever I have

57 istration

masters in Business

learned at this actual first time experience is going to stay with me for a lifetime.  One other major skill I learnt from the experience is the importance of building personal relation skills and also the importance of maintaining it. PR relations are one of the major components of a successful person as it helps in all major steps of the professional career.  Another major skill I learnt from the banking experience is the importance of understanding the basics of the career one is pursuing. The more a person is acquainted to the basics that his job acquires, the more are the chances that he would succeed in the career.  Patience and time management skill is also one of the major skills I learnt in the internship. Having patience during the pressure of work and also when working with non- cooperative clients is a major skill every professional should have. Time management in also a major component of any management personnel as without the proper management of time which is a major resource, success and efficiency is hard to achieve which shows the lack of competency in a person.

4.7.2 What kind of responsibilities you have undertaken during the internship period? During my internship in Askari Commercial Bank Limited, I have undertaken the following responsibilities,  I have to follow the rules and regulations which are followed by other    

employees during working hours. I have to perform punctuality in work. I have to follow the time schedule of the bank. I have to assist the employees of each department in which I worked. I issued cheque book to customers

58 istration

masters in Business

Cheque-Book Issuing Bank check books are issued alone for chequing so much as electric current economy and ASDA history. They are not issued for other fixed and term deposits because of their long term s “nature”. When an is opened, cheque-book is usually issued the next day, however they too are issued on the same day of opening the keeping in view the energy requirements the holder and after that cheque-books are issued whenever customer need cheque-books. Cheque-books leaves vary with the nature of the . For example, 25 leaves and 50 leaves chequebook are issued for current and ASDA s. Whereas 10 leaves and 25 leaves chequebook are for saving s. Usually 25 leaves cheque-books are given only army fund s, and 10 leaves cheque-books are handed over to “easily individual’s , holder”.

4.7.3. How do you think the internship will influence your future career plans?  The skills learned in the internship program will be very useful for me both in my academics and my career ahead. Initially I was thinking that I would go for my masters directly but now I have understood that working in real organizations will give me experience that will help me in my academics later.  Further, my aim of becoming a successful banker has been motivated as I found the banking industry challenging and interesting. This industry is very interactive, creative and a good platform to use the knowledge learned throughout the years.  For my academics, I could identify which courses would be useful for me to go through to gain a competitive advantage in the industry.

59 istration

masters in Business

Also the skills of analyzing balance sheets, analyzing business proposals and project financing proposals will be a major boost for me in the academic courses I pursue further. 4.7.4. How do you think the internship activities that you carried out are correlated with your classroom knowledge? Internships provide an opportunity for students to link hypothesis with pattern and farther serve as a temp labor pond for those agencies that have attached to participate in the internship programs. The department fulfills its mission of preparing students for significant skilled and managerial positions in the community sector. Internship is the capstone experience that provides students with practical, real world experience in a work setting. Ideally, internship will enable interns to: (a) Integrate and use their knowledge and skills from the classroom, (b) Discover where further skill is needed, (c) Take steps to gain that capability under educational supervision, and (d) Become better familiar with the types of work settings in which such competences can be applied.

60 istration

masters in Business

Chapter no. 5

5.1.

Conclusion of the report

A summary of key conclusions derived from the internship experience.

First and leading, when I ed the internship program I thought that I had a lot of knowledge about the working of the bank. But when I actually started working in the bank I realized that the real practice is very different from the academic learning. What is learned in books and what is practiced are two different things. I got to learn about Askari Bank Limited, its product details, the strategy with which the bank works and the various business sectors the bank has made investments in. I also got to learn about the various departments in the bank and how they functioned. I was completely unaware about all this and in this short span of time I got to know a lot about the bank. Looking at the status of the bank I was very excited about ing the internship program. But as the time of starting the job came closer, my excitement shifted to nervousness considering the grandeur of the bank and the thought as to how my supervisors would be. But after my first day at work all my nervousness disappeared as the people at the bank were very friendly and helpful. The working environment at the bank is very healthy. I always believed that banks in Pakistan are very professional. But after spending few weeks in the bank I realized that it is not as professional as it looks from outside. It is more a casual environment to work in. I also thought that my HR/PR skills are very good and there is nothing more to be learned in that aspect but within a few days of working in the bank I realize that I am not perfect. The way the top level management of the bank would

61 istration

masters in Business

communicate was a big surprise and I am certainly very impressed. I got to learn a lot from them though. I actually realized that there are lots to learn in this regards and I am just a beginner. Other things that I learned from my supervisors were communication and interpersonal skills again of what I was quite proud of. I realized that communicating in general day to day life or in college is very different that communication at work. One has to really think before we speak. Words have to be manipulated so that a negative impact is not laid down. 5.2. General observations about the sector in which your internship company/institution operates.

During my internship in ACBL I have observed different problems which are as under: Customer Satisfaction In ACBL customer dealing is well, but during rush hour the customer has to wait for a long time for their turn. It’s quite hard for a new customer or potential customer to get the required information. Poor record management and filing system During my internship I pragmatic that filing system of area office is not good. When certain record is needed the employees has to great effort to find it out and a lot of time is exhausted. Unequal distribution of work Work is not equally spread. On one hand some employee have to work all the day without relax while some others have nothing to do in any way. This not only creates uncertainty among employees but also throbbing and disturbing for

62 istration

masters in Business

overall setup of the bank. And above all it results in disappointment among customers as well. Formal Organization Formal organization includes the dealings of two or more person, which are carefully strong-minded groups and synchronized towards a given objective. In ACBL, I find a formal organization. The formal organization comes into being when people are able to exchange a few words with one another or ready to act and share a purpose. In this formal organization of ACBL the activities are carried out in a more formal way. In theoretical it provides basis for communication with one another but in practice it is not exercised. Difference between theory and practice A vast difference exists between theory and practice and ACBL has written procedure but practical work done by employees is a bit different from written procedures. Bank duty to maintain secrecy They don’t care about maintaining secrecy, especially during the rush hours. They speak loudly about the position. In this consider another deficit is in giving the information about the balance on telephone. Excessive paper work It is notify that due to the lengthy method of paper work the bank employee are over loaded. They are unable to give proper attention to the consumers due to lengthy procedure and extreme paper work in the bank. More s fewer deposits ACBL is more interested in increasing its number of irrespective to its deposit. The main reason behind it is that bank does not provide personalize 63 istration

masters in Business

service to the entire holder and does not get better its excellence and services. Delegation of authority Manager has very partial authority; he has to take the approval from his management authority i-e. In case of advance he has to take the approval of general and regional manager. The other problem is created, when the manager is not present in his office, the customer have to wait for hours. Job analysis is not effective Only on the basis of job analysis it can be determined how a right person can be hired, trained, rewarded or promote. Most of the employees are simple graduate and do not have proper background about their job. This creates problems both for organization and for the employees. In ACBL salaries are given according to the seniority and grades. People with simple or compound responsibility are getting the same salary and services. Lack of specialized training ACBL does not provide adequate facility of specialized training to their staff. Training is generalized rather than specialized. As the worker finishes his training, he is inducting into a specific field without having great contract of knowledge about the field. Low Profit Rates Most of the clients shifted their history to the National economy Center because of the low revenue enhancement of economy deposit discourage the customers. Bank should increase their profit rates to be a focus for customers. Good job rotation

64 istration

masters in Business

The job rotation is present in the ACBL’s Gujrat branch. Employees are placed from one department to another. It increases career opportunities for all the employees. Job rotary is precise crucial for worker especially for those who are newly chosen. The newly chosen should be rotate in all department of the banking in order to get familiar with working of different departments so that when they get a responsible position they have know how of the whole system. Lack of appreciation Another very important thing which is ignored in the ACBL is appreciation if the employee on their good performance. If hard work and performance of employees is not predictable and respected they become discourage which results in decline in performance. PERSONAL MANAGEMENT ANALYSIS Need for better training program Need of training is greatly emphasized all around the world. Training of the personnel is part of human resource management. It has been noticed that the training program of ACBL is not sufficient. The training programmed of the bank should include knowledge domain technique to get better the determination making and interpersonal as will individual needs of the worker both specific to bracing as wellspring as on job to maintain the high standards of religious service. Developing Managerial Leadership Leadership is a practical term of noticeable, clear on objective and communicating superior control on financial and managerial matter. Manager is not only to blame for their own units in business, but also in people i.e. training, recruiting, criticism handling and taking immediate initiative in crisis

65 istration

masters in Business

situation to take major decision affection the future of the bank and banking community. Promotions Promotion in ACBL is purely on the basis of superiority, so the new young person having high qualification remains behind for quite a lot of time. Thus a better and neutral policy of promotion needs to be followed. Lack of business communication There is no proper way to give information to their customer. To avoid this minor disappointment and tension in the mind of client, and lack of the service, it is recommended that the bank should provide brochures etc containing information in details. Some general information should be located in information notice board on the entrance where client can see it easily or it should be self-attractive. 6.3 SWOT ANALYSIS An analysis indicating towards the organizations strengths, weaknesses, opportunities and threat is termed as SWOT Analysis. Such an analysis is very important for the management in retaining the strength, overcoming the weaknesses, capitalizing over the emerging market opportunities, and carving ways to successfully tackle with the threats and ultimately converting them in the strengths for the organization. During six weeks of my stay at Askari Commercial Bank, G.T road Gujrat, I have come across the following SWOT analysis of the bank.

5.2.

STRENGTHS

LEADING PRIVATE SECTOR BANK

66 istration

masters in Business

Askari commercial bank is the most important private sector bank in the banking network in Pakistan with many of them online branches in major cities of the country. AUTOMATIC OPERATIONS The operations performed by the bank are highly automated that result in assurance for the customers that their transactions are completed reliably, efficiently and securely.

FULL DAY BANKING One can avail the benefit of the services provided at the bank till 5:00 P.m. which is highly useful for those customers who find it difficult to leave their officers in the morning... ATM NETWORK The bank has the largest ATM Network crossways the country. The customers of ACBL withdraw access their funds any time at all the ATM Sites with ASKCASH Logo. CUSTOMIZED SOLUTIONS The management of the bank believes in customer focused banking rather than the product leaning banking. The products and services designed by the bank are specially tailored to the individual needs of its customers. CUSTOMER ORIENTED BANKING

67 istration

masters in Business

The priority banking centers of the bank offer an unmatched where the customer receives highly privileged services in a highly elegant environment. It gives the chance of experiencing new standards in banking. Designed especially for those who appreciate only the supreme things in life, Priority Banking offers the very highest levels of modified banking to match customer’s single rank. ELECTRONIC BANKING The revolution in the banking in the form of electronic banking operations have opened avenues of excellent, efficient and quick services saving the time and costs of the customers and fortunately ACBL is among those few banks who are already reaping the benefits of electronic transactions. ELECTRONIC FUNDS TRANSFER ACBL management is quite prepared to adopt the latest advancements in technology resulting in revolution in the banking operations such as check clearing process, computer based teller equipment, automatic teller machines, and electronic funds transfers among the others. PHONE BANKING Phone banking service is very attractive for those classes of customers who don’t have time to personally come to the bank i.e. banking on the phone line thus saving the precious time of the customers. ETHICAL CONCERNS AND PUBLIC IMAGE The organizations showing concern for the people, ethics, and environment enjoy good public reputation and are able to reap the benefits in the long run. ACBL management is quite sensitive to this issue.

68 istration

masters in Business

WEAKNESSES: In my opinions these are the points that might be detrimental to the efficiency and profitability of the bank. NOT HIGHLY AUTOMATED The bank has still some of the traditional ways of operations in this advanced technological environment. MANUAL BOOK-KEEPING Although the bank has computerized ing system but, still the bankers use to make their entries in the ing . LOW JOB SATISFACTION Understanding and the effective management of the human resources is the most difficult challenge faced not only by the bank but by all the organizations. Even though the people have been sacrificed in the new organizational developments, it is becoming clear that the true permanent competitive advantage comes through workforce and how they are managed. ACBL seems to not focusing on this highly critical issue as the job satisfaction level of the employees working at ACBL, was quite low. LACK OF SPECIALISATION This famous and useful concept given by Adam Smith in 1776 seems to be missing in the bank. The employees are constantly rotated from one job to another job of totally different characteristic in the view of giving them the knowhow of the working in all the departments. But I think this is not a very good tactics used by the management. Otherwise the situation might be like this ‘Jack of all and master of none.’ CENTRALIZATION

69 istration

masters in Business

There is a high degree of centralization in the bank. Almost all the decisionmaking is in the hands of the upper management. But centralization is effective up to a certain level otherwise it becomes inefficient and at times costly too. I personally observed that delay occurred in the operations of the employees only due to the fact that they had not got any instructions from the head office. LACK OF TRAINING FACILITIES Presently there is no specific training program arranged for the new recruiters. They have to learn based on their observations and also their mistakes. It takes a bit time for the fresh one to learn the banking the result is huge amount of blunders, mistakes etc. resulting in monetary and non-monetary losses for the bank. There is pressure not only on the new learner but also on the person placed upon with this responsibility.

OPPORTUNITIES The bank is facing the following threats and opportunities currently: These are positive external environmental factors effecting the organization.  It deals in bulk business.  A large amount of foreign savings is fascinated.      

Strong potential for growth Steady increase in Customer Deposits Overseas Operations Branches In Remote Areas Islamic Banking Sharp increase in imports and exports

THREATS High Employees Turnover

70 istration

masters in Business

As discussed above, the job satisfaction level of the employee is very low resulting in high turnover, which is bad for any organization as there are huge monetary and non-monetary costs involved in the fresh recruitments. High charges The schedules of charges indicate that the fees charged by the bank on the various services it provides are extremely high. It may result in decrease in the number of its existing customers. Furthermore, this could be very alarming situation for the bank in case some of the competitors grasped the opportunity and lowered its rates. The result would be either the loss of market share or decrease in the charges resulting in lowering the bank’s income. Less attractive rate of return Commercial banks face considerable competition in attracting deposits from individuals or small investors. In contrast, the Govt. of Pakistan national saving scheme offers attractive rates of return (approx. 16 to 18 percent annually) on 10-15 year fixed s, which banks find difficult to match. Stiff Competition SCB is currently facing strict competition from the foreign banks especially the American who banks enjoy a good market position. Collectively U.S. banks hold approximately 13 percent of all commercial banks' assets. At present, three American banks are operating in Pakistan: American Express Bank; Bank of America and Citibank. Less Experienced Staff Owing to huge turnover of the employees, the no. of experienced and well trained staff is very low. Majority of the staff working in the bank branches is quite young and inexperienced. If the bank failed to bring down its high employees

71 istration

masters in Business

turnover, then it would be lacking the most important resources of any organization i.e. the experienced staff.

5.3.

Recommendations

After spending six weeks at different departments of the bank, interacting with the employees, getting their views, observing the organizational structure and design, I have come up with the following suggestions that in my view, will definitely improve a few weaknesses observed in the bank by me. Job Training Programs: The bank should place emphasis on effective training and development programs for its new as well as existing employees so that these are gradually updated regarding the recent developments in the field of banking. Team Work: In any organization we have to work like a group as a whole. The attitude of the one employee can cause tension in the whole environment so it is suggested that they should work as a team and co-operate with each other. Decentralization: The higher authorities should form team-based management rather than centralized management. It would result in improvement in uplifting the morale of the employees. They will be more motivated and involved in all their operations resulting in overall effectiveness of the organization. Job security: The employees in the organization should be insured job security so that there is no pressure on the employees while performing their tasks. Permanent Hiring: The fresh hiring should be made permanent so that they are secured for their future.

72 istration

masters in Business

Increase number of Branches: It is necessary for Askari commercial bank to increase the number of branches and increase number of employees in their branches. Adoption of Flexible Policies: The bank should adopt flexible policies especially in the area of recruitment and promotions. Revival Charges: The rate of the various charges provided by the bank should be brought down a bit, as it would result in increase in the number of customers of the bank.

73 istration

masters in Business

Chapter no. 6 References and Appendix

6.1.

References:

1) www.askaribank.com.pk 2) Annual report of Askari bank 2009 3) http://www.onlinewbc.gov/docs/finance/fs.ratio 4) Wikipedia the encyclopedia 5) http://en.wikipedia.org/wiki/Commercial_bank

74 istration

masters in Business

6.2. Appendix

75 istration

masters in Business