Bank Al Habib LTD PDF

INTERNSHIP REPORT
ON
BANK AL-HABIB LTD

Submitted By:
MUHAMMAD SHAHEER JAVAID
Roll No. 60
M.Sc (Insurance & Risk Management)
Session 2013-15
BAHAUDDIN ZAKARIYA UNIVERSITY,

MULTAN
First of all thank to whom who is most merciful and kind to all of his creations with out
any discrimination and who make us able to Prepare this report
We are proud on following personalities for being our friends and relatives that
guidance helps us in the preparation of this report
ii
DEDICATION
TO MY BELOVED
PARENTS
Who always wishing and praying for

My success in every sphere of life
I pray to Almighty Allah to
Enable me to serve them
So well and kindly as they did
In my life especially in my childhood
Aamin!
iii
PREFACE
The management student must have sound knowledge of some practical procedure
and functions of Accounts and Computer being performed by different types of
organizations.
Thats why, every student of Management is sent to some
organization where he acquaints himself with practical aspect of his studies.
In order to meet this requirement, I was assigned to prepare Internship report on The
Bank Al Habib. During the training, I tried my best to acquire maximum knowledge
about the functions of the banking and there by learned a lot, which in my view would
be much beneficial to me in my profession carrier.
I do not claim of this report to be comprehensive and detailed but I am confident that
the reader, after studying this report, will be aware of BAH and about its different
departments.
Suggestion to improve the working and prosperity of BAH are added at the end of this
report making it more comprehensive to some extent and strategic.
Muhammad Shaheer Javaid
iv
ACKNOWLEDGEMENT
All praise to Almighty Allah, the most merciful and compassionate, who
give me skills and abilities to complete this report successfully
I am grateful to my parents who are always been a source of
encouragement for me throughout my life and from start to the end of this
report
I am thankful to all my staff members so Bank Al-Habib Ltd Old
Bahawalpur Road Main Branch Multan.
I found every one very co-operative and helpful for providing me the
Theoretical as well as practical knowledge about the function and
operation of the bank.
I express my greatest gratitude to my kindhearted, who was the Person
who made me able to write this report, His enthusiasm shows the way
forward to me to achieve this success and who kept me in high spirit
through his appreciation. He helped me a lot each time I went up to him.
My Special Thanks:
Mr. Mehmood Zahid
(Zonal Manager)
Mr. Hussain Haider Qureshi
(Branch & Chief Manager)
Mr. Fraz Haider Zaidi
(Operation Manager)
Mr. Muhammad Asghar
(Account Opening Officer)
Mr. Mujahid Haideri
(ATM & Cheque Book Dealing)
Mr. Muhammad Imran
(Remittance Officer)
Mr. Muhammad Naseer
(Clearing Inward Officer)
Mr. Tahir
(Clearing Outward Officer)
Mr. Umar Bukhari
(Car Financing Officer)
Mr. Muhammad Musa
(Foreign Exchange Manager)
EXECUTIVE SUMMARY
The main theme behind this report is to help understand the major functions of the
different departments of BAH as I had the opportunity of interning at this bank. As
we know that Internship experience is very important and helpful before anyone goes
looking for a job.
Employers want people who have experience. Internship gives
students the opportunity to grow, academically and personally. When anyone initially
starts out he is going to be doing the menial repetitive task that every new person had
to do. However this is not necessarily negative as it teaches the person responsibility
at the smallest level. The major part of my report is a training program; you could
read all my tasks which I assigned during the internship. This report is typically has
been made on the BAH different activities, its promotion, segments, and target
marketing. Readers will be able to read BAH customers retain technique and how
BAH deal with the customers.
BAH main objective are to provide its customers with safe, secure, valuable and
reliable service through wide range of products. The report covers all the product
information provided by the bank.
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TABLE OF CONTENTS
History of Bank Al Habib:
01
DAWOOD HABIB
02
History of Habib group in Pakistan:
02
Introduction of Bank AL_HABIB:
04
VISION AND MISSION
05
Our Services
06
OBJECTIVES OF THE BANK
08
Planning
09
Process of planning
11
Purpose of organizing;
12
Democratic leader:
13
Process of control:
14
ORGANIZATION STRUCTURE
16
BANKING OPERATIONS
17
DUTIES OF A BANKER
17
ACCOUNTS OF CUSTOMERS
18
CHEQUES
19
KINDS OF CHEQUES
20
(I) DATE OF THE CHEQUE:
21
2. PAYMENT BY CHEQUE: -
22
BANKER'S AUTHORITY TO TERMINATE THE PAYMENT OF CHEQUES:ENDORSEMENT:
27
REQUIREMENTS OF VALID ENDORSEMENT:
28
CLASSIFICATION OF ENDORSEMENT
28
Islamic Banking
29
For Machinery & Equipment (Leasing):
32
Declaration of Profit
35
ACCOUNT OPENING SECTION:
38
Bank Al-Habib Term Deposit
41
AL Habib Salana Munafa Account
43
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CLEARING SECTION
46
FUNCTIONS OF THE ACCOUNT SECTION.
52
INTERNET BANKING
53
CASH DEPARTMENT
57
SECURITY ARRANGEMENTS KEEPING OF EXCESS CASH
58
PRICING
62
Apni Car
64
Swot Analysis
65
Pest Analysis
68
viii
History of Bank Al Habib:

Habib Esmail, founder of Habib Group, started his career in Bombay in 1891 at the
age of 13 on a salary of Rs. 5 per month in a firm that dealt in copper and brass
utensils. He worked day and night, arriving before the shop opened, staying till late in
the night, and then walking home to save money on conveyance. No wonder that in
the short span of five years, at the age of 18, he was made a partner in the firm. Even
at that young age, he had established an excellent reputation for honesty, hard work,
fair play, trustworthiness, humility. These values continue to guide the activities of
Habib Group to this day.
During the next 17 years, he captured over 60 percent of the local utensils business
and diversified into export of copper, cotton scrap iron and manganese ore, selling to
East Africa, Italy, France and Great Britain. Being a person of great insight, he sent
his representatives to Europe in 1912 and established branch offices in Genoa and
Vienna. Simultaneously, he initiated business relationships with Japan and China.
His reputation for honesty and fair play was so well known that his customers and
local merchants would leave their surplus funds with him for safe-keeping and
investment, thus establishing the foundation of the family's banking business. In 1921,
he started Habib & Sons. The firm traded in cotton, oil seeds, and bullion and acted as
a merchant bank. It eventually became the flagship of the family and the parent family
and the parent company of Habib Bank Limited
Introduction of Habib family

The history of the House of Habib goes back to middle of the previous-to-last century
when Esmail Ali of Jamnagar, India, set up a small utensil factory in Bombay. His son
Habib Esmail, born in1878, founded the House of Habib. Habib was very young when
his father died, forcing him to join the business of his uncle Cassum Mohammad,
owner of Khoja Mithabai Nathoo, merchant, and manufacturer of copper and brass
utensils. It was because of hisassociation with Mithabai Nathoo that Habib Ismaeel
came to beknown as Seth Habib Mitha.
DAWOOD HABIB
Habib and Sons was formed in the 1920s to trade in cotton, copper, oil seeds, gold
bullion and other commodities and to act as a merchant bank. This in turn led to the
formation in 1941 of Habib Bank Ltd. Bombay, as a public limited company.
Introduction of Habib groups of companies:

The Origin of what is now known as the Habib Group of companies can be traced to
Habib Esmail,and his association with the firm of Khoja Mithabani Nathoo, a leading
metals dealer established inBombay in 1841. Habib joined the firm at the age of 13
for a monthly salary of Rs. 5. Through hishard work and determination he became
partner at the age of 18 and also became the president of theCopper and Brass
Merchants Association.Habib sent his representative to Europe in 1912 and followed
that up by establishing branch offices inGenoa and Vienna. Simultaneously, he began
business relationship with Japan and China importinghosiery, yarn, glassware and
cutlery and exporting cotton.He started the firm "Habib & Sons" in 1921 and changed
the family name to "Habib". His four sonsnamely Ahmed Habib, Dawood Habib,
Mohammed Ali Habib and Ghulam Ali Habib joined the business. The firm expanded
rapidly - banking remaining a core business.This in turn led to the formation in 1941
of Habib Bank Ltd. Bombay, as a public limited company.The bank was to become
the flagship of the familys industrial and commercial ventures. Prior to thecreation of
Pakistan the bank moved its head office to Karachi and played a vital role in
providing the basic banking and financial needs of this new country.A network of
branches and training centers were established in former East and West
Pakistan.When all banks in Pakistan were nationalized in 1974, Habib Bank was one
of the largest commercial banks in South Asia with 875 branches in Pakistan and 44
branches overseas, including 20 in theUnited Kingdom.

The House of Habib holds many distinctions in Pakistan's history. Habib Bank was
shifted to Pakistan on the personal bidding of Quaid-e-Azam Mohammad Ali Jinnah
and came to the aid of the nascent state "even before the Govt of Pakistan was ready
to issue appropriate government paper" with a Rs 80 million loan when the Reserve
Bank of India failed to deliver Pakistan share of Rs 750 million held by it. It is said
that Mohammad Ali Habib gavea blank cheque on Llyod Bank to the Quaid-e-Azam
who wrote Rs 80 million in it. (Anarticle in Habib Bank Golden Jubilee Presentation
and a letter to the Editor in daily Dawn,September 11, 1991).
Habib Family's Business Units

BANKING & FINANCE;
Bank AL Habib
(Pakistan)
Habibsons Bank (UK & Switzerland)

Habib Overseas Bank (South Africa)
Habib African Bank (Tanzania)
Habib Banking Corporation (Bahamas)
Habib Investment Corp. (FZE) (UAE)
Habib Capital Advisors Ltd (BVI)
INSURANCE;
Habib Insurance Co. (Pakistan)
Green shield Insurance Brokers (UAE & Pakistan)
REA L ESTATE;
Habib Properties FZC (UAE)
Green shield DevelopersGreen
(UAE)
shield Real Estate Brokers (UAE)

Gulf Properties International (BVI)
OTHER;
Habib Sugar Mills (Pakistan)
Habib & Sons (Pakistan, UK & USA)
Habib Motor Company (Pakistan)
Habib Foods (Pakistan)
Habib IT (Pakistan)

The House of Habib holds many distinctions in Pakistan's history. Habib Bank was
shifted to Pakistan on the personal bidding of Quaid-e-Azam Mohammad Ali Jinnah
and came to the aid of the nascent state "even before the Govt of Pakistan was ready
to issue appropriate government paper" with a Rs 80 million loan when the Reserve
Bank of Indiafailed todeliver Pakistan share of Rs 750 million held by it. It is said
that Mohammad Ali Habib gavea blank cheque on Llyod Bank to the Quaid-e-Azam
who wrote Rs 80 million in it. (Anarticle in Habib Bank Golden Jubilee Presentation
and a letter to the Editor in daily Dawn,September 11, 1991)
Introduction of Bank AL_HABIB:

Bank AL Habib was incorporated as a Public Limited Company in October 1991 and
started itsoperations in January 1992. It is a venture of the Habib Group, which owns
50% of the shares - 20 %shares are owned bank AL Habib was incorporated as a
Public Limited Company in October 1991 andstarted its operations by NIT and 30%
are owned by the general public. The bank operates in the private sector, with 30
branches in the major cities of Pakistan, and has its principle office at Karachi.It is a
scheduled bank principally engaged in the business of commercial banking with a
network of 233 branches including a wholesale branch (in the Kingdom of Bahrain, a
branch in Karachi ExportProcessing Zone and four Islamic Banking branches. The
Bank has invested in 66.67% shares of ALHabib Capital Markets (Private)
Limited.The principal objective of the company is to engage in the business of equity,
money market andforeign exchange, brokerage, equity research and corporate
financial advisory
and
consultancyservices.
AL
Habib
Capital
Markets
(Private) Limited (the Company) was incorporated in Pakistan asa (Private)

Limited Company on 23 August 2005 under the Companies Ordinance, 1984 and
startedoperations from14 December 2005.AL Habib Financial Services Limited is a
wholly ownedsubsidiary of the Bank. The principal objective of the company is to
engage in arranging / advising onfinancial products and services. AL Habib Financial
Services Limited was incorporated in Dubai on05 March 2008.Its commercial
banking services also include acceptance and placement of funds in the
interbank market; purchase and sale of foreign currencies; trade information and
research; remittances andtransfer of funds; purchase and sale of government securities;
Sui gas bills collection; and MCB rupeetraveler cheque services.
VISION AND MISSION
VISION STATEMENT
TO BE A QUALITY FINANCIAL SERVICE PROVIDER

MAINTAINING THE HIGHEST STANDARDS IN
BANKING PRACTICES
MISSION STATEMENT
TO BE A STRONG AND STABLE FINANCIAL INSTITUTION
OFFERING INNOVATIVE PRODUCTS AND
SERVICES WHILE CONTRIBUTING
TOWARDS THE NATIONAL ECONOMIC AND
SOCIAL DEVELOPME
Our Services
What can Home Remittance Division of Bank AL Habib do for you?
Home Remittance Division at Bank AL Habib facilitates instant transfer of money
sent by overseas Pakistanis through our dedicated agents free of cost to the
remitter and the beneficiary. We are also facilitating Money Gram beneficiaries at
our counters. Bank AL Habib account holders will have their remittance directly
transferred to their accounts whereas Cash Pick up facility is provided at all our
branches. Furthermore, account holders with other Banks are also facilitated.
How can you get your payments?

For Bank AL Habib account holders
As soon as the remittance is received for our account holders, we aim to credit the
funds on an instant basis. Upon availability of correct mobile number SMS alerts
are generated to the beneficiaries for their convenience.
For Cash Over Counter Payments / Cash Pick up

Beneficiaries can collect their cash payments from any Bank AL Habib Home
Remittance dedicated counter throughout Pakistan. For Branch network click here.
You can receive your remittances for cash payments through the following three
simple steps.
Step 1
Ask the sender / remitter for the reference number / PIN code.
Step 2
Visit any Bank AL Habib branch throughout Pakistan with the given reference
number / PIN code and your original CNIC or Passport.
Step 3
Fill a simple form and collect your payment instantly from the designated Home
Remittance counter.
Upon availability of correct mobile number SMS alerts are generated to the
beneficiaries for their facilitation.
For Other Bank Account Holders

If you are maintaining an account with any other bank, funds will be transferred to
your account accordingly.
Product
As defined by State Bank of Pakistan (Small Enterprises)
A small enterprises (SE) will be a proprietor or a partnership concerns which
meets the following parameters, as per new SBP PR, are as follows:
Number of Employees upto 20.
Annual Sales Turnover upto Rs.75 Million.
As defined by State Bank of Pakistan (Medium Enterprises)

Medium Enterprises(ME) means an entity, ideally not a public limited company
which meets the following parameters, as per new SBP PR, are as follows:
Number of Employees from 21 to 250 (Manufacturing & Services MEs)
Number of Employees from 21 to 50 (Trading MEs)
Annual Sales Turnover upto Rs.400 Million.
Recognizing the economic and regulatory importance of the Small Enterprises &
Medium Enterprises, the facts and figures around the world reveal that being
engine of economic growth, SE & ME sectors are considered to be the hub of
employment creation and resource mobilization activities. The SME Division was
established with an aim to provide SE & ME Banking and undertakes to
strategically serve this important segment. BAHL believes in simplification of
procedure and reduction in turnaround time and quality services.
We offer the following facilities to the customers:
Working Capital Financing.
Procurement of Inventory,
Receivable Financing.
Procurement of Machinery.
7
Expansion of production facilities
BMR.
Import / Export.
Guarantees.
Auto Leasing
OBJECTIVES OF THE BANK

Commercial Banks operate under profit motive and perform various functions in
a modern society.
Bank al habib of Pakistan is a commercial Bank till with socioeconomic
objectives e.g. to earn profit and at the same time develop the economy of the country
and uplift the socioeconomic status of community. The main objectives of the Bank
are as follows-
1. MAXIMUM PROFIT
As the name of the Bank indicates that it was established to finance the nation. As
a Business organization its objective is to earn more and more profit by the least
expenditures.
2. GOOD ADMINISTRATION.
A good administration is an objectives of the Bank. Without proper
administration no organization can run successfully. A good administration should
have the following qualities:a:
Quick decision.
b:
Correct decision.
3. CUSTOMER SERVICE.
The main objective of the Bank is to serve his customers. It serves the customers
on both directly and indirectly. Bank collects money from an individual, firms, and
limited Companies etc. It also gives loan to the people.
4. DEVELOPMENTS.
Banks spending large amount of its profit for its own development. Therefore, the
large amount of its profit is spent on opening the new branches of the bank and
8
increasing the work efficiency of the Bank.
5. EXPENDITURE DISCIPLINE.
Bank is trying to minimize its expenditure. So, it keeps strict control over
expenditure and avoids wastage of money at every stage.
6. ZONAL INSPECTION.
Every branch should be inspected by Zonal inspector at least once a month as
directed by Principal Office under B.D. may verify from time to time.
7. MAXIMUM UTILIZATION OF STAFF.

The staff requirement of the most branches is sufficient. However, services
should be utilized systematically for effective functioning.
Management function
Planning
Organizing
Leading
Controlling
Planning
Planning is Defining organization goals and objectives.Establishing overall strategies
for achieving those goals.Developing a comprehensive set of plans to integrate and
coordinate organization work.
Types of planning:
Bank Al Habib us e both formal and informal types of planning;
Informal;
In informal planning, their planning is not written down, short term focus and specific
toan organizational unit.
Formal;
In formal planning, their planning is written down, specific, long term focus and
involvesshared goals for the organization.
Goals and objective:
Financial strength and profitability by making profitable advances.
Customer satisfaction by providing higher quality of services at an affordable

cost.
Growth by expending branch network and deposit base.
Short term objective;
Profitability
Long term objective;
Profitability
To optimize the use of resource
10
Process of planning
Mission:
To be a strong and stable financial institution offering innovative products
and services
whilecontributing
towards
the
National
economic
and
social
development.
Strategies
Strategies of bank Al Habib are giving loans and accepting deposits.Types of
strategies used by bank Al Habib; cost leadership strategy, differentiation strategy,
focusedstrategy and etc.
Plans
Plans of bank Al Habib are short-term and long-term advances & deposits.
Programs
Programs of bank Al Habib are up to one year or more then one year advances,
fixedaccounts, and etc.
Policies:
Policies of the bank Al Habib are profitability, by making profitable advances and
customerssatisfaction by providing best services at an affordable cost.
Rules:
The rules are define the upper level management according to situation.
Budget:
Bank Al Habib always met its budget
Organizing
Managers work in organization. But what is an organization?An organization is an
arrangement of the people to accomplish some specific purpose. Your
colleges,university, banks, governments departments are all organizations because
they have three commoncharacteristics.First; each organization has a distinct purpose.
This purpose is typically expressed in terms of a goalor set of goals that the
organization hope to accomplish.Second; each organization is composed of
people. One person is working alone is not an organizationand it takes people to
perform the work thats necessary for the organization to achieve its goals
11
Purpose of organizing;
Divide work to be done into specific jobs and departments in bank Al Habib.
Assign tasks and responsibilities associated with individual jobs in bank AlHabib.
Coordinates diverse organizational tasks in Bank Al Habib.
Establish relationship among individuals, groups and departments in Bank Al Habib.
Types of organization
I. Tall vs. Flat:
Bank Al Habib is a tall organization.
II. Multinational vs. National:
Bank AL Habib is a multinational organization.
III. Single vs. Branch:
Bank Al Habib is a branched organization.
IV. Mechanistic vs. Organic:
Bank Al Habib is an organic organization.
V. Big vs. small:
Bank AL Habib is a big organization.
Leadership:
The process of influencing a group of people towards the achievement of pre
selected goalsis called leadership. & The person who makes this process or who can
influence others / group of people and who has managerial authority is called a
leader.
Traits & skills of Leader:
The leaders of bank Al Habib have the following Traits & Skills in themselves.
Decision making
Risk taking and risk bearing
Stress taking & stress bearing
Communication power
Motivation power
Honesty
Strong vision
12
Interpersonal skills
Market forecasting skill
Consistency
Step forward
Discipline
Competitive skills
Types of leader:
There are three basic types of leaders;
Dictator
Democratic
Laissez-fair
NOTE:
But the Bank Al Habib has the democratic leaders.
Democratic leader:
The leaders, Bank Al Habib have, are the types of Democratic. Because the major
portion of the bank is decentralized, thats why the each leader has the complete
power of decision making, but they are working collaboratively in whole
organization with each other. All leaders of bank are involved in decision making,
delegating their authorities to their higher qualified employees, encouraged the
participation of their employees in work and gives them opportunities of coaching in
well manners.
Motivation:
Motivation is the very important skill of the leader, without the motivation skill the
leader does not work effectively in the organization. Motivation of the employees to
done the certain task and achieve the organization goals is too much important in the
organization for its operations. Motivation is the duty of the leader toward his
subordinate to do for the certain task to accomplish the organization goals.
13
Control:
Control is the process of monitoring activities to ensure that they are being
accomplished as planned and of correcting any significant deviation.
Importance of control;
Control is very much important because it is the final link in the management
functions. It is the only way mangers know whether organizational goals are being
met and, it not, the reasons why. The value of control function lies in its relation to
planning, empowering employees, and protecting work place. In Bank Al Habib the
importance of control can not be neglected because its a service base organization
and deals with finance. Every employee in this organization has direct of indirect
interaction with financial activities and finance play the key role in the progress of the
bank. Thats why there is significance importance of a good control over all the
activities in the bank for progressing on the right path.
Process of control:
A three-step process including measuring actual performance, comparing actual
performance against astandard and taking managerial action to correct deviation or
inadequate standards.
I. Measuring actual performance:

To determine what actual performance is managers must acquire the information
about the actual performance of the workers who are working in the organization and
overall performance of theorganization. In Bank Al Habib managers get prepared
statistical and financial reports about the employees and progress of the bank to see
that where organization is going. In statistical reports there is all mentioned about the
progress of employees that which employee have achieve how much targets at the end
of the month which were given by there bosses
14
II. Comparing actual performance with standards:

The comparing performance determines the degree of variation between actual
performance and the standard performance.
Standards;
In Bank Al Habib following standards are set to compare actual performance!
General standard;
Compliance with law
Reasonable assurance and safeguards
Integrity, competence, and positive attitude
Specific standards;
Internal control system and all transaction and significant events must be
clearly documented, and the documentation readily available for examination.
Transaction and other significant events are to be without delay recorded and
properly classified.
Transactions and other significant events are to be authorized and executed

only by authorized persons.
Key duties and responsibilities in authorized and executed only by authorized

persons.
Qualified and continued supervision is to be provided to ensure that internal

control objectives are achieved.
Access to resources and records is to be limited to authorized individuals and

accountability for custody and use of resources is assigned and maintained.
Managers are to; evaluate promptly findings and recommendations reported

by reviewers. Determine proper actions in response to findings and
recommendations, and complete, with in established time frames, all actions
that
correct
or
otherwise
resolve
the
matters
brought
to
managements attention.
15
III. Taking correct actions:

Corrective action in the organization corrects problem at once to get performance
back on track. Management of Bank Al Habib revise the results from the comparison
of the actual performance with the standards and then takes the corrective actions to
solve that particular problem to ensure the achievement of targets in the organizations.
ORGANIZATION STRUCTURE
BOARD OF DIRECTORS
EXECUTIVE BOARD
CHIEF EXECUTIVE
DIVISIONAL CHIEFS
PROVINCIAL CHIEFS
CIRCLE CHIEFS
ZONAL HEADS
BRANCH MANAGERS
16
BANKING OPERATIONS
The Bank provides a wide range of facilities for transacting money in and outside
the country. Being' custodian of the money, it manages the assets in such a way that
the Bank remain solve and liquid to a high degree so that it is able to meet the demand
of the customers for cash payments. In the operation of a Bank, there i~ a close
relation between the Banker and the customer.
BANK AND CUSTOMER
Banker is a person, whether corporate or not who carries on the business of the
banking. The customer is a person who has some sort of account either current or
fixed o~ some similar relation with a banker.
BANKER AND CUSTOMER RELATION
The relationship between Banker and customer is primarily that of debtor and
creditor with the rules reserved where the customers are relying on a loan from the
banker.
DUTIES OF A BANKER
1. To honor a customers cheques.
The Banker's duty is to honor the cheques of the customers.
i.
They are properly drawn.
ii.
The customers has balances to his credit.
iii.
The loan contract has been signed.
iv.
There is no legal bar attaching to the customers funds.
2. Standing orders:The Bank abides by the standing orders of the customers in making periodical
payments on his behalf such as club, library and insurance perineum etc.
17
3. Secrecy of the customers. Account: The Bank owes a contractual duty not to disclose the customers financial
position with out his consent.
4. Valuables for safe custody:The Bank takes care of the property deposited with it by the customers with or
without charge. When a Bank does not charge, the Banker is called gratuitous bailey
and when a specific charge is made, the Banker is then a paid bailey.
ACCOUNTS OF CUSTOMERS
A Bank should not open an account for a customer unless his integrity and
responsibility is duly authenticated by a responsible person known to the Bank.
By
opening of an account, the Banker usually gets the specimen signatures on cards.
a. Authorities to sign an Account.

- If a customer desires that his agent also operate on his Account, the
Bank should get a precise written mandate from his customer. The person to whom
the authority has been delegated will continue operating the account till the authority
is revoked in writing.
b. Mental patients: If the Bank comes to know of a customers lunacy, the Bank will immediately
suspend the OPERATIONS on the account until the court gives order or the Bank has
full proof that his customer has fully recovered. When the customers is mentally
unsound, the court appoints a receiver who operates the accounts under the direction
of Master in Lunacy.
c.
Husband and wide account:

If husband and wife both open an account it will be considered an ordinary joint
account by the Bank. At the death of the husband, the widow is fully authorized to
withdraw the balance.
18
d. Infants:An infant can open an account with a Bank, but he is not allowed to overdraw the
account. If the infant customer wishes to have an over draft, an adult should draw and
sign on indemnity contract.
e.
Partners:When an account is opened by the partner they are to sign a mandate authorizing
any or all of their member to make with drawls. The partners are jointly responsible
for all the loans and other obligation incurred by the firm.
f.
Societies, Clubs etc:If an incorporate body opens an account in a Bank, the committee of management
deputes certain of lice bearers to operate on the account. The bank obtains a copy of
the resolution of the society or clubs appointing certain members to administrative
funds.
If there is any change in the committee of management, it is notified to the
Bank immediately. The. members of the society who are operating the account or
not liable for any draft.
g. Death of a customers:If a Bank receives the notice of a customers death , all operations on the account
are suspended until the executors or administrators produce the probate. All credits
received after the notice of the death of customer are placed in a new account for
disposal by the executor or administrator later.
CHEQUES
A cheque is a bill of exchange drawn on a Banker and payable on demand.
According to Dr. Hard,
"A cheque is an unconditional order in writing drawn on a Banker signed by the
drawer, requiring the Banker to pay on demand a certain sum in money to or to the
order of a specified person or to learner."
Cheque is merely an order on a Bank by its clients to pay a sum of money to
himself or to a third party on demand.
19
There are three parties involve in a cheque:

(i)
The drawer.
(ii)
The drawee and
(iii)
The payee.
The drawer is the person who signs the cheque. The party which is authorized to
pay back the money is called drawer. The person to whom or to whose or order the
money is to be paid is called payee. A cheque in order to be valid must bear the
signature of the drawer. It should be in writing preferable by means of a pen.
KINDS OF CHEQUES
There are three kinds of cheques : 1.
Bearer Cheque:
ii.
Order Cheque: and
iii.
Cross Cheque:
(i) Bearer cheque:

Bearer cheque is that which can be cashed from a Bank by any person who
possesses the cheque and presents it at the counter.
(ii) Order Cheque:

If the word bearer is struck off from the cheque, it then becomes an order cheque.
Order cheque is a safe form of payment because it can not be encashed unless it is
ascertained by a Bank that it is paid to the right person. If cheque is drawn payable to
the order of a specified person the Bank will make the payment only after the
identification of the specified person.
(iii) Cross Cheque:

If the parallel lines are drawn across the face of the cheque and the words "&
Co" are written between them, it becomes a crossed cheque. The payments made by
the crossed cheque are the safest forms of payments because a cheque can only be
deposited in the payee's account or it can be endorsed to somebody's else account by
20
the payee. The crossed cheque can not be cashed when it is presented at the counter of
the Banker.
(I) DATE OF THE CHEQUE:

(i) Undated cheque:
If a cheque does not bear any date, the holder of the cheque can insert the date
and cheque will quite valid.
(ii) Post dated cheque:

The post dated cheque is, infect, not a cheque because it is not payable on
demand. It is equivalent to a bill of exchange, when the cheque is due for payment,
the cheque will be honored by the Bank.
If a Bank makes payment of post dated cheque before it falls due, the Bank would
be liable to the drawer for the amount.
(iii)
Stale and Over due cheque:

If a cheque is in circulation for an unreasonable period of time, the cheque is said
to be stale or over due. Normally, if the cheque is presented six on seven months after
the date, it is marked as "Stale" or "out of date". The out of date cheque requires the
confirmation of the drawer.
(iv)
Alterations on a cheque:
If the drawer is to make changes in the date or amount or in the name of the
person then full signature must be obtained on all the material alterations made on the
cheque.
(v) Mutilated Cheque:

If a cheque is torn in two or more than two-pieces and after pasting the pieces
together is presented to the Bank for payment. the Bank would return it to the drawer
marked, "Multitude Cheque". If the drawer confirms the mutilated cheque, the Bank's
position is then quite safe.
21
2. PAYMENT BY CHEQUE: (i) Conditional payment:

A cheque or bill of exchange is not a legal tender money. A debtor, therefore, can
not compel a creditor to accept the cheque or bill of exchange as a means of payment.
When the cheque is honored and payment is made by the Bank, the date is then
effectual discharged.
(ii) Cheque through the post:

If a cheque or other negotiable instrument is sent by post and is lost in transit
and is presented and paid by the bank, the loss if any rests on the sender. However, if
the creditor requests the debtor to send the cheque by post, than the risk is to be borne
by the creditor.
(iii) Cheques as evidence of payment:

When the payee receives the amount written on the cheque from the Bank, it
serves prima face as evidence of receipt.
THE PAYING BANKER:

1. The obligation to pay: the paying Banker or the drawer Bank is under legal to
honor his customers cheque provided:a.
There is sufficient credit in the account of the customers to cover the amount
written on the face of the cheque :-
b.
The cheque are properly drawn:
c.
Are not stale or over due: and
d.
There is no legal prohibiting the Bank to make payment.
2. Time Allowed for Payment:

When a cheque is presented over the counter, the following rules are usually
observed:
a.
If a cheque is properly drawn and is complete in every respect it must

ordinarily be said or dishonored at once.
22
b.
If a cheque is presented through a clearing House, then the rules of the

Clearance House regarding time are to be observed.
c.
If the cheque of a customer is sent by another commercial Bank is to send the

notification of payment or dishonor within 24 hours of the receipt of the
cheque to the presenting Bank.
d.
If the holder of a cheque presents it through the post to the paying Banker the
usual practice for drawer Bank is to send back the cheque instructing the
holder to either present the cheque in person or the collection should be made
through another Bank.
3. Payment in Due Course :If a cheque is drawn in proper form and is paid by the paying Banker in good
faith the Bank does not incur any liability.
4. Protection of paying Banker:

If the paying Banker makes payment of a cheque drawn on him with forged
signature of the drawer, He will not be held responsible provided:
a.
The payment is made in good faith.
b.
The payment is made in the ordinary course of Business.
Similarly, in case of crossed cheque, the drawer Bank is protected of the forged
document only if
a.
The payment is made in good faith:
b.
In the ordinary course of Business:
C.
Without the negligence of the Banker: and
d.
According to directions contained in crossing.
5. Fraudulent Alteration of amount:If a drawer draws the cheque in such a manner that it makes room for alternation
of the amount, or hi signs a Blank cheque, and the Bank pays in good faith the amount
which is fraudulently increased, the Bank will not be held responsible for the
customers loss.
23
BANKER'S AUTHORITY TO TERMINATE THE

PAYMENT OF CHEQUES:1. Countermand of payment: The drawer of a cheque can stop the payment of a cheque by informing the
Banker either on telephone or through a special message or in writing. The Banker
will mark on the orders not to pay or payment countermanded by telegram payment
postponed pending confirmation present again:. If the cheque has been presented and
cashed before the countermand is received in time, the Banker will stop the payment
of the cheque even if he was about to pay.
In all such cases, where the payment is stopped well in time, the operative
signatures are cancelled and the cheque is returned with a marked "Cancelled in error,
payment countermand."
2. Customer's Balance:The Banker can refuse to make the payment of a customer's cheque1 if his
balance is not sufficient to cover the cheque. However, if the Bank has allowed the
facility of overdraft, the Banker is bound to make the payment provided the amount is
within the limit of the overdraft.
3. Cheque is not an assignment of funds:A holder of a cheque can not ask the Banker to earmarl. credit balance of the
drawer in his favor. If the customer's balance is sufficient to cover the cheque, the
payment will be made. The cheque will be dishonored if the Balance available for
drawing the cheque is not sufficient. The holder of the cheque can not either have an
equitable claim against the drawer Banker.
4. Payment in due Course:The Banker will refuse to make the payment. of a cheque if :
i.
It is not in accordance with the drawers instructions and
ii.
It is also presented after office hours or is not in the ordinary course of
24
Business.
5. Advising Fate By Telegram:If cheques are presented direct to the -Banker or through the collecting Banker
with a request to wire fate and the paying Banker's answer is in the affirmative then
the Banker has to make the payment even if he receives the countermand of payment
written or oral from the Customer.
6. Marking Cheques:A drawer may get a particular cheque 'Marked' from his Banker. The Banker will
retain the amount in order to honor the "marked" cheques. If' the other cheques issued
by him are not covering his credit Balance, Bank will dishonor them for want of
funds.
7. Forgery of the Drawer's signatures:If the Banker is doubtful of the drawer's signature of in the alternation of amount
the Bank can refuse to make the payment.
8. Notice of Customers Death:The Banker will terminate the payment of a cheque if he receives the notice of the
customer death.
9. Bankruptcy Petition:If the customer is unable to pay his debt i.e. he is insolvent, then he or his creditors
present as petition to the court to take over the debtors, property for distribution
among creditors. If the Bank receives a notice of t he refuse to honor the cheque
forthwith.
10. Making of a Receiving order:If the customer is satisfied that the cu-stomer appears to be insolvent, it will
immediately issue a receiving order. The Bank will refuse to make payment on the
advertisement of receiving order of its customer in the news paper or on direct
intimation from the court.
25
11. Trust Funds:If the Banker is satisfied that his customer by breach of trust is crediting the trust
fund to his account, the Banker may refuse to pay the cheques.
12. Garnishee Order:If the creditor of Banks customer gets a garnishee order from the court, the
customer is not allowed to operate the account by the Bank.
13. Account Closed:If the drawer has closed his account, the Bank will dishonor the cheque presented
to the Bank.
14. Mutilated Cheques:If a cheque is mutilated, torn or cancelled, the Bank will refuse to debit the account
of the customer. The payment on. the torn cheque can, however, he made, if it is
confirmed from the drawer or from the payees Banker.
15. Difference in words and Figures, :If the amount stated in words differ from the amount expressed in figures, the
Bank will refer the cheque to the drawer remarking: amount in words and figures
differs.
16. Irregular endorsement:Ii the endorsement on the chequ-e is irregular, the Bank will not make the
payment on the cheque presented to it.
17. Lost or Stolen Cheque:If a cheque is lost or stolen and the drawer informs the Bank well ii. time, the
Bank will refuse to honor the cheque if presented after the receipt of the notice.
18. Stop Cheque note:If a customer informs the Bank orally or verbally for stopping the payment of the
particular cheque, the Bank will obey the instructions and will put "Stop Cheque
Notice" in red ink in the account of the drawer.
26
19. Receipt of Notice of Indemnity:If the Bank comes to know that a particular customer has become insane or is of
unsound mind and the Bank is satisfied that hi customer is unable to act rationally, the
authority of the Bank to act as agent will then cease. If the Bank receives the lunacy
order from the court, the cheques will be returned with the remark "refer to drawer.
20. Joint Account:If there is a joint account the Banker will get definite instructions as to how the
account is to be operated upon whether all of them shall operate the account or
delegate the authority to one. On the death of any party to a joint account, the balance
rests in the surveyor or surveyors subject to an expressed authority on the contrary.
21. Partnership Account:-
In case of a partnership firm, every partner can open an account in his name. But the
Banker would not allow until and unless it is signed by all partners, giving the manner
of operation. The death or retirement of a partner dissolves the partnership then the
Bank should not allow any operation on such an account.
22. Company Account:If the Company or a corporation wants to open an account with the Bank it would
provide a copy of resolution passed by the Board of Directors appointing it as a
Banker to the Company, naming the person or persons authorized to operate the
account. If any authorized person draws a cheque on behalf of the company, then it
would be dishonored.
ENDORSEMENT:
A cheque or a bill is endorsed when the transfer puts his signature on the back or
an along of a cheque and a bill as a part of its negotiation. If the cheque is bearer, it
needs no endorsement. However, in our country, the Banker insists on getting the
endorsement (signature) on the back of the cheque. If the holder of the cheque does
not agree to put his signature, then he shall have to give a properly stamped receipt for
27
the amount paid to him. If the cheque or bill is drawn payable to order, it requires the
endorsement of the transferor, so that the payment is made in due course
REQUIREMENTS OF VALID ENDORSEMENT:

The main requirements of endorsement to be effective are as follows;
1.
The endorsement must be on the back or on an along of the cheque or bill. If

the endorser simply put down his signature on the back of the cheque, the
endorsement is valid.
2.
Endorsement may be made in ink, print, pencil or with a rubber stamp. The
Bank prefers the endorsement to be wholly in ink as it is not liable to
obliteration as well as alteration.
3.
The endorsement must be of the entire value of the Cheque and bill. Partial
endorsement which may be in the name of one endorsee or more than one
endorsees separately is not legally valid.
4.
If the number of endorsees or payees is more than one on the bill then all the
payees are the endorse unless one endorsee has the authority to
endorse on
behalf of other payees as it is generally in partnership.

5.
Another important requisite of valid endorsement is that the endorsement must

correspond with that of the drawing. For instance, if the name of the endorsee
is misspells. The payee should also endorser the bill in the misspells version.
However, the endorsee can at the proper signature, if he so desires. If the
names of the payees are two or more than two, the endorsement should also be
in the same order, which is penned down on the back of the bill.
CLASSIFICATION OF ENDORSEMENT
The Main classification of endorsement are as follows:
1. Conditional endorsement :
-If the endorsement makes the payment of a bill subject to the fulfillment of a
condition or conditions, the endorsement is called conditional endorsement. The Bank
or the payer can disregard the conditions and make the payment to the endorsee and
the payment will be considered valid.
28
2. Blank Endorsement :It the endorser signs his name on the bill but does not give the name of any other
person to whom he wishes to transfer the cheque, the endorsement is called blank.
When there is no endorsee specified on the bill, it becomes payable to bearer even
though it may be originally drawn to order.
3. Special Endorsement :
-An endorsement which
specifies the name of the transferor for the payment of
the bill is called special endorsement. Special endorsement is payable to order.

4. Restrictive Endorsement: A restrictive endorsement is one which restricts or prohibits the further
negotiation of the bill. For instance, pay to Hamid only signed by Rafique.
5. Partial Endorsement:If the bill purports to be endorsed for a part of the amount payable, the
endorsement is called partial endorsement is legally in effective.
This department consists 'if the following sections:1. Account opening section.
2. Deposit section.
3. Clearing section.
4. Remittance section.
5. Accounts section.
Islamic Banking
Bank AL Habib Limited is a well established commercial bank in Pakistan, which
has also been licensed by the State Bank of Pakistan to undertake Islamic Banking
through its Islamic Banking branches.
Bank AL Habibs Islamic Banking Branch offers Deposit Schemes and Islamic
Financing for Individuals / Traders / Industries which are completely based on
Islamic Shariah principles.
All arrangements / documents relating to above are Shariah compliant and have
29
been approved by our Shariah Advisor. He will regularly monitor all Deposits and
Financing to ensure that these are Shariah compatible.
Introduction to Shariah Advisor Mufti Dr. Ismatullah
Mufti Ismatullah is the Shariah Advisor of Bank AL Habib Islamic Banking. He is
a PhD in Islamic Economics. His thesis Zar (Money) in light of Shariah is
considered as one of the useful researches of Islamic Economics.
Mufti Islamtullah holds the degrees of Aalim-e-Deen and Takhassus Fil Fiqh
from Jamia Dar-ul-Uloom, Karachi. He has been teaching Quran, Hadith, Fiqh,
Philosophy and Arabic Grammar in Dar-ul-Uloom since 1993. Mufti Sahab has a
vast experience in issuing Shariah rulings (fatwa) and is currently serving
Dar-ul-Ifta of Dar-ul-Uloom. So far he has issued about 20000 Fatwas regarding
different topics and Shariah issues.
He is a renowned research scholar, his research papers have been published in

Monthly Al Balaagh. He wrote a book Guide to Takaful or Islamic Insurance
which will be published very soon.
Mufti Sahab is also a member of Shariah Advisory Board of Pak Qatar Takaful
Group.
All products are approved by our Shariah Advisor and all transactions are
personally supervised by him.
Islamic Financing
We also offer Islamic Finance for Individual / Traders / Industries, etc. These
finances are offered in the following forms:
Murabaha Finance
Ijarah Finance (Leasing)
Diminishing Musharakah Finance
Istisna Finance
30
All arrangements / documents relating to above are Shariah compliant and have
been approved by our Shariah Advisor.
a) Murabaha Finance
A contract between the Bank and a Customer under which the Customer first
purchases certain goods/commodities/assets as an Agent of the Bank, and the
Bank after taking possession of the goods/commodities/assets sells it to the same
Customer by adding certain profit margin to its cost.
Murabaha Financing is available for:
Local purchase of Assets/Commodities/Goods.
Imports under Letter of Credit/Firm Contract.
Purchase of raw material for exports.
Local purchase of raw materials for production of Goods/Assets.
Shariah Compatibility:
Assets must be Shariah compatible.
All agreements/documents approved by our qualified and experienced Shariah

Advisor and regular monitoring/checking of Murabaha transactions by the
Shariah Advisor.
Customers Guidance:
Murabaha is always allowed for fresh purchases.
Goods shall not be used by the Customer before the Murabaha offer and
acceptance are signed.
Rollover in Murabaha is not allowed. However, fresh purchases can be made

under new Murabaha arrangements.
Murabaha price once fixed cannot be changed.
In case of late payment, Customer will have to pay certain amount to charity
fund as per Murabaha Agreement.
31
b) Ijarah Finance (Leasing)

Ijarah is basically the transfer of usufruct of a fixed/durable asset to another person
for an agreed period, at an agreed consideration. Under Ijarah agreement the asset
will be given to the Customer on rent for the period agreed at the time of contract.
For Vehicles (Commercial/Personal use):
Ijarah agreement and other document approved by our qualified and

experienced Shariah Advisor.
Periodical rentals to be fixed according to Customer needs at very competitive

terms.
Regular monitoring and checking of Ijarah transactions by our Shariah

Advisor.
For Machinery & Equipment (Leasing):

Machinery (for small, medium and large industrial units) and office equipment.
Lease agreements and other documents approved by our qualified and

experienced Shariah Advisor.
Periodical rentals to be fixed according to Customer needs at very competitive

terms.
Regular monitoring and checking of Ijarah transaction by our Shariah Advisor.
c) Diminishing Musharakah Finance (For Shirkat-ul-Milk)

Diminishing Musharakah is a form of partnership in which one of the partners
promises to buy the equity share of the other partner gradually until the title of the
equity share is completely transferred to him. This transaction starts with the
formation of a partnership, after which buying and selling of the equity takes place
between the two partners. Diminishing Musharakah can be used for plant &
machinery, equipment, buildings and automobile financing.
Principles of Diminishing Musharakah (Shirkat-ul-Milk):
Diminishing Musharakah (DM) is a form of co-ownership in which the client

and the bank share the ownership of a tangible asset in agreed proportion and
the client undertakes to buy in periodic installments of the proportionate share
32
of the bank until the title to such tangible asset is completely transferred to the
client.
Diminishing Musharakah can be created only in tangible assets. Diminishing

Musharakah shall be limited to the specific asset(s) and not to the whole
enterprise or business.
A DM would consist of the following three steps
Creation of joint ownership between the bank and the client.
Renting out by the bank undivided share in the asset owned to the client.
Selling its share in periodic installments by the bank to the client.
All other terms and conditions as are essential to co-ownership, Ijarah and sale
shall be fulfilled in respect of different stages in the process of DM
arrangement.
Proportionate share of the client and the bank must be known and defined in
terms of investment.
Loss, if any, shall be borne by the bank and the client in the proportion of their
respective investments.
The amount of periodic payment would go on decreasing with purchase of

ownership units by the client.
Each periodic payment shall constitute a separate transaction of sale.
Separate agreements/contracts shall be entered into at different times in such

manner and in such sequence so that each agreement/contract is independent
of the other in order to ensure that each agreement is a separate transaction.
Following are the documents to be executed in DM Financing;
Diminishing Musharakah Agreement
Rental Agreement for moveable/Immoveable Assets
Agreement for purchase of Musharakah Units
In case a client fails to honor the undertaking, as aforesaid with regard to the
periodic payment and purchase of sale of units as the case may be, the asset
may be sold in the open market and the bank aggrieved by such failure shall
be entitled to recover:
Actual loss, defined as the difference between the market price and price
mentioned in the undertaking, if any, not being the opportunity cost.
ny gain on sale of property, shall be shared by the bank and the client in
proportion of their respective investment at the time of such sale.
33
The bank shall be entitled to recover outstanding periodic payments in respect

of the period for which the client has actually used or possessed the asset
which shall be payable to the bank.
d) Istisna Finance
Istisna is a contract of sale of specified item(s) to be manufactured or constructed.
It is an order to a manufacturer to manufacture a specific commodity for the
purchaser. It is necessary for the validity of Istisna that the price is fixed with the
consent of the parties and that the necessary specifications of the required items
are fully settled between them. The Istisna price can either be paid in advance, or
in installments or at the time of delivery of goods.
Istisna Financing is available for:
Manufacturing of specified item(s).
Construction of buildings, plants, highways, bridges, under Build, Operate and

Transfer arrangements.
Manufacturing of aircrafts, ships, machines, plant/factory and equipment.
Shariah Compatibility:
Goods/Material/Specified items that require manufacturing or construction

must be Shariah compatible.
All agreements/documents approved by our qualified and experienced Shariah

Advisor and regular monitoring/ checking of Istisna transactions is being done
by the Shariah Advisor
34
Declaration of Profit
Declaration of Profit on various Deposits for the Quarter ended June 30, 2014
Bank AL Habib Limited Islamic Banking has declared the following Profit
Rates:
Products
Profit Rates
Saving Deposit (1 999,999)
5.31%
Saving Deposit (1,000,000 9,999,999)
5.46%
Saving Deposit (10,000,000 49,999,999)
5.68%
Saving Deposit (50,000,000 & above)
6.06%
Mahana Savings Account
6.44%
AL Habib Tijarat Account (Current Remunerative)
0.02%
Term Deposit - 7 Days
6.52%
Term Deposit - 1 month
6.82%
Term Deposit - 3 months
7.58%
8.19%
Term Deposit - 1 year (profit to be paid on monthly)
8.49%
Term Deposit - 1 year (profit to be paid on maturity)
8.94%
Term Deposit - 3 years (profit to be paid monthly)
9.10%
Term Deposit - 3 years (profit to be paid on maturity) 9.32%
Term Deposit - 5 years (profit to be paid on maturity) 9.40%

Foreign Currency
Saving Account (USD)
0.66%
The above profit rates have been approved by our Shariah Advisor.
35
Profit Sharing Mechanism for Distribution of Profit for next three months
i.e. from July 1, 2014 September 30, 2014.
The Bank is currently offering Term Deposits and Saving Deposits under the
principle of Mudarabah.
The Bank will calculate the profit of the deposit pool after every quarter. Profit
will be distributed at the Net Income level i.e. Gross Income less direct
expenses, write-offs/charge-offs and loss on sale of investments. In case of
comingling of Banks equity with depositors fund in pool, the Net
Income/Loss of Pool shall be allocated between the Banks equity and the
depositors fund in proportion to their respective share in pool.
Net Income of the deposit pool will be shared between the Bank (Mudarib) and
depositors (Rab ul Maal) on the basis of a pre-determined profit sharing ratio.
The Banks profit sharing ratio will be 50% of the Net Income and Depositor(s)
profit sharing ratio will be 50% of the Net Income after the allocation of profit
to Banks equity in proportion to the respective share in the pool.
The profit is distributed among the account holders on the banks
predetermined weightages, announced at the beginning of the quarter based on
their respective category/tiers.
At the end of the period, the Bank may unilaterally reduce its profit sharing
ratio for the benefit of all the deposit categories in a pool.
In case of a loss, as per the rules of Mudarabah, the deposit pool will share the
loss in the ratios of investment of depositors.
36
Weightages declared for the 3rd quarter i.e. (1st July, 2014 September 30,
2014) are:
S. #
Products
Weightages assigned
Saving Deposit (1 999,999)
0.70
Saving Deposit (1,000,000 9,999,999)
0.72
Saving Deposit (10,000,000 49,999,999)
0.75
Saving Deposit (50,000,000 & above)
0.80
Mahana Monthly Saving
0.85
AL Habib Tijarat Account (Current Remunerative)
0.002
Term Deposit - 7 Days
0.86
Term Deposit - 1 month
0.90
1.00
10
1.08
11
Term Deposit - 1 year (profit to be paid monthly)
1.12
12
Term Deposit - 1 year (profit to be paid on maturity) 1.18
13
Term Deposit - 3 years (profit to be paid monthly)
14
Term Deposit - 3 years (profit to be paid on maturity) 1.23
15
Term Deposit - 5 years (profit to be paid on maturity) 1.24
1.20
For Foreign Currency Deposit Pool

The Banks profit sharing ratio will be 90% of the Net Income and Depositor(s)
profit sharing ratio will be 10% of the Net Income.
The above mechanism has been approved by our Shariah Advisor
37
ACCOUNT OPENING SECTION:

A. HOW TO OPEN AN ACCOUNT
There are certain formalities which are to be observed for opening of a current or
saving account with a Bank. These formalities in brief are as under-
i.
FORMAL APPLICATION:
The customer is to filling "Account Opening Form 11 It is a formal request by a
customer to the bank to allow him to have and operate the current or saving account.
ii. OBTAINING INTRODUCTION:The bank before opening , and account obtains introduction of the customer from
old customer, responsible person etc.
iii. SPECIMEN SIGNATURE

when the Banker is satisfied about the integrity of the customer, he agrees to open
the account. The Banker obtains the specimen signatures of the customer on the
signature book or on card.
IV. MINIMUM INITIAL DEPOSIT:In Pakistan the current account can be opened with a minimum of Rs. 500/- and
PLS Saving Account with a minimum of Rs 100/- These amounts are also the
minimum balances to be maintained by the account holders with the Bank.
V. OPERATING THE ACCOUNT.

When an account is opened in a Bank, the Banker gives to the customer.
i.
Pay in slip book.
ii.
Cheque Book and pass book with a view to operate it.
IV. PRECAUTIONS IN PREPARING THE PASS BOOK:The Banker should be careful in preparing the pass book However, the customer
himself should.
38
i.
Send the pass book for making entries and also periodically check up them.
ii.
He should also see that the entries are initialed by the accountant.
iii.
The customer should verify the entries with own books of account.
iv.
In order to safe guard the secrecy of the account, the customer should receive
the pass book in closed cover.
B. WITH-DRAWL.
Withdrawal is made on cheques supplied by the Bank. A new cheque book is
issued only on receipts of the requisition slip attached to the cheque book issued
previously and this presented along with the depositor pass book for entire against
cheque book challan. Cheque book is issued on discretion of the branch manager.
C. INTEREST.
The current rate of interest allowed on deposit in saving Bank account is
ascertained at the Bank. This rate is subject to change. The amount of interest is
calculated for each calendar month on the lowest balance at credit of an account
between the close of the sixth day of a month and the end of the month and only on
every complete sum of ten rupees.
Every account is made up half yearly to 30th June 31st December, and the interest
calculated as above is added to the balance of each account as on these dates.
D. TRANSFER OF AN ACCOUNT.
Account can be transferred to any other branches of N.B.P. free of charge. If a
depositor wants to transfer his account, he presents his pass book personally or sends
it to Bank and writes an application for the transfer of an account.
E. CLOSING OF AN ACCOUNT:
A depositor willing to do ,e his account must present his pass book in order that
with drawls and the amount of interest due on the account is entered therein and final
balance stuck. This balance is then paid to the depositor and his receipt is taken, the
pass book is canceled, unused cheque forms on hand are also surrendered at the same
time.
39
F. SECRECY:
The secrecy of depositors account is the. responsibility of every official engaged
in the Bank service.
G. MONEY DEPOSITED OR DRAWN BY POST:

When money is sent by post for deposit, the pass book and a letter starting the
amount of the deposit and the number of the account accompany it.
When a depositor wishes to withdraw money by post he must forwards his pass
book with a letter starting the number of his account, the amount to be drawn and
either the money is to be remitted by money-order or in currency notes registered.
H. TYPES OF BANK ACCOUNT.

i.
Saving account
Saving Account is that account in which customer puts his surplus money which
he saves from his daily expenditure.

The account can be operated by depositing a minimum cash of Rs. 5/-. Small
percentage of interest is allowed on the balance of this account.
ii. CURRENT ACCOUNT:

The current account is that one which the customer draws his daily cheques and is
normally operated by the Business-men. It can be operated by minimum amount of Rs.
500/-
Any number of cheque amounting undue minimum balance limit can be
issued by the account holder for withdrawal or for payment. No interest is allowed on
this account.
iii JOIN ACCOUNT

A joint account occurs when two or more than two customers have one account.
The parties to a joint account are considered in law as they are one person.
iv. PROFIT AND LOSS SHARING ACCOUNT.

This can be operated by ~ person, firm or organization by depositing Rs. 100/- or
above. The holder of this account will get profit of his amount, or he will bear the loss
as the case may be. So an individual is equally participant in profit and loss.
40
The holder of account can withdraw upto Rs. 15,000/- per month is eight
withdrawals, in case of higher withdrawal, seven day prior notice is necessary. This
account is operated under interest free system.
v.
FIXED DEPOSIT ACCOUNT.

In this account an amount is deposited into the Bank for a fixed period of time. The
fixed period may be three months, six months, one year, two years, five years and
more. The Bank allows a higher rate of interest for larger period.
At the time of operating on account the Bank issues deposit certificates for the
period and amount. The account holder can not withdraw his amount before the
specified period, but the same Bank will allow loan against that certificate. Bank is
liable to give interest on this account on maturity date.
2. DEPOSITS SECTION:
There are two types of deposits i.e. current and saving There are different forms
present in the section of or deposits.
1.
Current account form.
ii
Saving account form.
iii
Private or individual form
iv
Private firm account form
In he above mentioned forms, the bank makes an agreement with his customers.
Bank Al-Habib Term Deposit

Bank Al-Habib is currently offering the best term deposit for the one year tenure.
Their product, Salana Munafa Account is presently maintaining the highest profit
payout rate when compared to all other one-year term deposits. With markup rate as
high as 11% per annum, Bank Al-Habib term deposit offers flexible conditions to its
customers with easy balance maintenance requirements. Some of the impressive
features of this term deposit are highlighted below.
Minimum balance requirement as low as Rs. 25,000. This condition helps

expand the potential depositor base as lower and middle income individuals
can avail this product for a low volume term deposit as well.
41
One year tenure is an optimal time period for fixing ones savings in a term
deposit. Lower tenures pay lower markups and higher tenures increase the risk
of breaking the term deposit and further foregoing accrued profits.
Each individual has the option to avail a line of credit equivalent to 90% of
their deposit amount. This facilitates the fixture of an individuals savings for
the one year tenure.
Deposit Schemes
Bank AL Habib Limited, Islamic Banking Branch, invites participation in the
following deposit schemes:
AL Habib Current Accounts
AL Habib Saving Accounts
AL Habib Term Deposits
The above deposit schemes are based on the Islamic Shariah principles and have
been approved by our qualified and experienced Shariah Advisor.
a) AL Habib Current Accounts
It is non-profit earning account with cheque book facility.
ATM, Debit Card and Online Banking facilities are available.
Funds will be used for investments and providing finances to trade and
industries on fully Shariah compliant basis.
Regularly reviewed by qualified and experienced Shariah Advisor.
b) AL Habib Saving Accounts
Based on Islamic principles of Musharakah / Mudarabah.
Profits and Losses to be shared as per prescribed rules.
Profits to be paid every six month in January and July.
Profit to be calculated on the basis of weightages, to be announced at periodic

intervals.
ATM, Debit Cards and Online Banking facilities are available.
Regularly reviewed by our qualified and experienced Shariah Advisor.
42
c) AL Habib Term Deposits
Based on Islamic principles of Musharakah / Mudarabah.
Available in tenures of 3 months, 6 months, 1 year, 3 years and 5 years.
Profit to be paid periodically or on maturity as per rules.
Profit to be shared according to a system of weightages, to be announced at

periodic intervals.
Regularly reviewed by our qualified and experienced Shariah Advisor
Mahana Munafa Account

Mahaha Munafa Account can be opened with an amount of Rs. 25,000/-.
Profit will be paid on the 1st working day of each month.
90% financing allowed against deposit.
Deposit will be rolled over on maturity for same period at prevailing rates unless
otherwise requested by the customer.
Profit may be drawn through Cheque or ATM at any branch of Bank AL Habib.
Profit is subject to Zakat, Withholding Tax and other Government Levies unless
exempted.
If the deposit is encashed before completing tenure, the profit on such deposits will be
calculated as per rate of last nearest completed tenure plus profit on the remaining
number of days deposit held as per prevailing savings account profit rate
AL Habib Salana Munafa Account
AL Habib Salana Account is a deposit account and can be opened with Rs,
25,000/-
All other rules applicable to PLS Savings account will also apply to AL Habib
Salana Account inculding Zakat, Withholding Tax and other Government
Levies unless exempted.
If the deposit is encashed before maturity, profit will be calculated and paid for
the period held at the rate applicable to Savings Account.
AL Habib Salana Account profit is paid on yearly basis.
43
The indicative return payable on "AL Habib Salana Account" deposit effective
July 01, 2014 is 9.10% per annum. (The rate of profit on deposit schemes are
current and subject to change)
Up to 90% financing allowed against deposit
Young savers account;

Young Pakistanis, Bank AL Habib has designed a new account specially for
you, ...your own Young Savers Account.
Features;
This is an account for Young Savers of up to 18 years.Visit the nearest Bank

AL Habib branch with your parent/guardian to open your Young Savers
Account. You can open an account with as little as Rs.5/=
Rate of return on Young Savers Account is expected to be well above the

return on normal savings accounts. Currently indicative rate of return on
balances
up
to
Rs.500,000 is 10%
P.A
and for
balances over Rs.
500,000 is 5% P.A, payable six monthly.
Young Savers Account will have Internet Banking facility and ATM Debit
Card available to your parent/guardian
Young Savers
of 16 years and more will also be eligible to receive ATM
Cards and can withdraw money through ATMs, if specifically authorized by

their parents/guardians (certain conditions apply).
Until you the Young Savers are a minor, i.e., below 18 years, the account will
be operated by your parent/guardian. When you attain majority, the balance in
the account will be transferred to a new account which you will open and
operate after completing required formalities, including the concurrence
of your parent/guardian.
Bank officers will also visit your school to help you open Young Savers
Account and collect your deposit
PLS saving account:
Profit is paid out to your Account on six-monthly basis.
There is NO Minimum Balance requirement for PLS Savings Account.
44
The indicative Return Payable on "PLS Savings Account" deposits with effect
from July 01, 2008 is 5.00 % per annum.
Free Life and Disability Insurance cover for account holders.
Monthly profit plan:
This plan adds to the earning ability of your PLS Savings Account with Bank
ALHabib.
Your profit is paid out / credited every month to your Account instead of
six-monthly as in case of PLS Savings Account.
NO Special forms or applications, NO Minimum Balance requirement.
The indicative Return Payable on "Monthly Profit Plan" deposits with effect
from July 01, 2008 is 5.00 % per annum.
Free Life and Disability Insurance cover for account holders
Treasurers call;
Corporate societies, trusts and even individuals have large funds which are
generallyidle. Such funds can be put to This plan is open to Current Deposited
Account. Access to such funds requires only a 24 hour notice. Profit is calculated on a
daily product basis and credited to your Account monthly. The applicable rates for the
Treasurer's Call Deposited Account,effective January 1, 2005 are: work to earn
handsome profits via the AL Habib Treasurer's Account
Growth certificates
Bank AL Habib has now introduced 5 Years Growth Certificates for its
customerswhich are for a longer tenor at very attractive rates. Receipts may be issued
on PLS TermDeposit Receipts clearly marked 5 Years Growth Certificates.
Super saving account

Bank AL Habib has introduced Super Saving account to meet your needs.
Features of Super Saving Account.
Profit is Paid to your account on a quarterly basis.
Minimum Deposit in the Account must be 500,000 or above.
45
Her mah munafa imdani main izaffa:

AL Habib Mahana Munafa AccountHigh Returns Reliable and Convenient
Senior citizen account;

High Returns Reliable and Convenient
In case of a joint account the Senior Citizen will be the primary account holder
and other joint account holders must be between 18 and 60 years of age.
Profit will be paid on the first working day of the next month
Up to 90% financing allowed against deposit..
The indicative return payable on "Senior Citizen's Account" deposit effective

November 01,2008 is 11% per annum.
Free ATM Card.
Profit may be drawn through Cheque or ATM from any branch of Bank AL
Habib.
Profit is subject to Zakat, Withholding Tax and other Government

Levies unless exempted.
CLEARING SECTION
Every Bank performs the paying and receiving functions. Cheques are collected
which are drawn upto Banks for customers. Similarly the cheques drawn on different
Banks and deposited by Banks own customers for collection within the city is know
as clearing The functions of receiving and paying is mostly done through the clearing
house. A clearing house can be defined as "AA place where that representatives of all
Bank get together to settle the receipts and payment of cheques drawn on each other"
Clearing House provides the facility which can hardly be dispensed with especially,
in case of crossed cheques.
There are two main types of clearing.
i Outward clearing
ii
Inward clearing.
46
i.
OUTWARD CLEARING:
It includes those cheques and other instruments which are sent by the Bank to the
Banks for payment on behalf of its own clients. Cheques are sent to clearing house
thorough local main branch.
A delivery message from the local main branch comes to every branch at a fixed
time to pick its outward clearing or outward returns as the case maybe.
Outward Clearing At Branch

a.
Account number of payee/endorsee is written on the back side of the cheques.
b.
The instrument and the paying in slips are separated.
c.
The instruments are sorted I Bank-wise and branch wise.
d.
Schedules are prepared.
e.
Jotting of all the schedules are taken in the clearing House statement. Amount
of the cheques in written in the "Delivered" and to pay column.
f.
After balancing the outward clearing, the pay in slips are released to C.D.
department.
g.
After balancing, a transfer debit voucher is prepared.
h.
The instrument, schedule. etc. are delivered to the messenger from the main
branch.
ii. INWARD CLEARING.

The cheques drawn is called inward clearing. drawn on National Bank through its
representatives on the Bank presented by other Banks for payment It includes those
cheques and other instruments of Pakistan branches which other Banks present at the
clearing house.
Inward Clearing At The Drawn Branch

a.
Number of instruments noted in the schedules are verified immediately. on

receipt.
b.
The amount's of all the instruments are jotted down and totaled. If should be
equal to the amount mentioned in schedule from the local main branch.
c.
The amounts are debarred to the relevant accounts if otherwise in order.
d.
The IBCO is prepared crediting the amount of the main branch.

47
e.
If there is any return, that is deducted from the total and IBCO prepared for the
remaining amount.
TYPES OF CHEQUES COLLECTED BY CLEARING SECTION.

1. TRANSFER CHEQUES.
These are the cheques which are collected and paid by same branch of N.B.P. For
example Mr. Ali is a customer of N.B.P. of Khaplu branch and draws a cheque in
favor of Mr. Hussain who is also the customer of the same branch.
2. TRANSFER DELIVERY CHEQUES.

The cheques which are collected and paid by two different branches of a Bank
situated in the same city. for example a person draws a cheque on N.B.P. main branch,
DIKhan in favor of another person who maintains an account with N.B.P. Rakh
Mandra branch, DIKhan.
3. CLEARING CHEQUES.
When the payee/endorse and the drawer of cheque maintains account with
different Banks, the collection Bank in any one of the following methods:a.
it can collect cash by sending its representative with the cheques to each of the
paying Banks. It is not so much appropriate.
b.
the Bank maintains an account with the paying Bank.
c.
the cheques can be exchanged by representative of the various Banks who

meet at a fixed time and at a fixed place. This is the most efficient method of
collection and paying cheques.
FUNCTIONS OF CLEARING SECTION IN A BRANCH.

a.
To accept transfer, transfer delivery and clearing cheques from the customer of
the branch a~ d to arrange for their collection.
b.
To arrange payment of
cheques drawn on the branch and gives for collection
to any other branch of BAH or any other member or such member of local
clearing house.
c.
To collect amounts of cheques drawn on members of the local clearing house
48
sent for collection by BAH branches not represented at the local clearing
house.
PROCEDURE FOR CLEARANCE OF CHEQUE.

The customers are provided with the copes of pay4n-slip, whenever the customer
wants to deposit any cheque, he fills in the pay in slip himself and hands it over the
counter along with the instrument.
REMITTANCE SECTION
Remittance means transfer of money from one place to another place. It is of two
kind.
I.
Inland remittance.
II.
Home remittance.
1. INLAND REMITTANCE.
An inland remittance means a transfer of money payable at a certain place within
the country. Inland remittances can be classified as under:a.
Within locality.
b.
Out side locality.
a. WITHIN LOCALITY
When a branch situated in DIkhan is required to send drafts to any other branch
situated in the same city The process is know as within locality. For example BAH
Main Branch, DI Khan sends any draft to BAH Rakh Mandar branch ,DI Khan.
b. OUTSIDE LOCALITY.
Outside locality is an important type of inland remittances, which means the
transfer of money payable outside the city. For example, BAH Main Branch DIkhan
sends any draft to a Branch situated at D.I.Khan.
It is commonly done through the following three means:i.
Telegraphic transfer (T.T)
ii
Mail Transfer (M.T)
iii
Demand Draft (D. D)
49
i.
TELEGRAPHIC TRANSFER
In telegraphic transfer, the Bank takes commission and telegram charges from the
sender.
A receipt is issued to the sender for the value received.
The Bank itself transfer the funds to the drawee branch though a coded message
in telegram, confirmatory of which is also sent through routine dak mentioning all
details. All bank Branches have been provided with their code books name Bank Keys
Code Book where from the coded message is agreed by the drawee branch. T.T. can
be sent open, which may be paid in cash in drawee branch, or may be direct y
creditable to relevant account.
ii
MAIL TRANSFER (M.T.)

The Money can be remitted through this means also. In this case the payable
amount at the drawee branch can only be transferred to an account, amount can not be
paid in cash. Other procedure is same as T. deposit of money at sending branch.
Difference is only of postage and. telegram charges. The M.T. which in its self is an
advice also is sent by registered post, while T.T. is sent through telegram.
iii DEMAND DRAFT (D.D)

Demand draft is a written order by a branch of a specified Bank, drawn on
another branch of the same Bank to pay a certain sum of money only to or to the order
of the Payee. Demand drafts are purchased by the clients and after receipt of money
Bank issues and delivers the D.D. to the purchaser, who himself sends it to the payee.
In D.D. the Banks do not recover postal charges as it is payable by the purchaser. The
Bank, after deliver of D.D. to the purchaser also sends its own advice called IBCO
(Inter Branch Credit Order) to the drawee branch mentioning therein all details of
issued draft.
ACCOUNT SECTION.
Every Business organization deals in money matters. Bank also deals in money
and more over since the money belong to the depositors therefore, it is of utmost
importance to keep systematic and correct record.
50
Further-more, the Banks are commercial institutions and its main objective is to
earn profit, therefore, then record of all incomes and expenditures are kept correct an(t
systematically.
In BAH the responsibility for maintaining necessary accounting data and to
keep upto date records In a systematic manner has been assigned to the Accounts
Department.
The Branches of Bank Pt perform their daily routine work and deal in money that
belongs depositors. Here account department hold great importance in banking,
because it keeps all the accounting records properly.
ACCOUNTS TERMS
The account department maintain all the accounting records properly There are
certain accounting terms which are defined into the following-
1. ACCOUNT
A summary of all debit and credit transaction pertaining to a similar nature or to
an individual or body of persons is called an account.
2. VOUCHERS
A written evidence recorded on a price of paper in respect of a money transaction
is called voucher.
3. GENERAL LEDGER.
Main ledger is a book, where various accounts of different type are kept.
Generally this book is in binded form containing several sheets for several accounts.
4. SUBSIDIARY LEDGER.
Where a main head has got different sub-head of it: subsidiary leader are
maintained. These subsidiary ledgers are maintained from the main ledger.
BOOKS AND STATIONERY

The account department uses the following books and stationerya.
Cash book cum-general ledger.
51
b.
Abstract book.
c.
Income and expenditure ledger.
d.
Register of vouchers
e.
Transfer book.
f.
Receiving cashier book.
g.
Paying cashier book.
h.
Supplementary sheets.
i.
Different vouchers.
FUNCTIONS OF THE ACCOUNT SECTION.

The main functions of the account section of a branch are as follows: 1.
Balancing and maintenance of books.
11.
Preparation of statement.
During the course of daily business of the branch, a number of cheques are
presented by customer for cash payment, though transfer, delivery and clearing
cheques at the counter. Also a number of new accounts are opened and cash is
deposited by the customers. A number of new vouchers are passed by the branch by
debiting, one account and crediting another account.
So in order to ensure that during the day all the transactions have properly been
recorded and they are complete in all respects and are recorded in proper books by the
branch this recording is done on daily basis and maintained by account section.
1. BALANCING AND MAINTAINING OF BOOKS.

Balancing the cash book means that all the transactions have properly been
recorded and there is no mistake in any of these vouchers.
1.. Arrangement of voucher.
11. Preparation of suplimentaries.
111. Preparation of summary.
iv. Agreement of total of the summary, with the total of transfer book.
52
2. PREPARATION OF STATEMENTS.
To Judge the performance of branches, the Head Office requires periodic
statements from them. Through these statements the top management watches the
progress of the branches and they provide them necessary guidance, The top
management decisions depend upon these statements also. The following are the
important statements prepared by the account section: a.
Balance sheet on daily basis.
b.
Pak account on daily basis.
c.
Provisional income and expenditure statement on monthly basis.
INTERNET BANKING
What is Internet Banking?
Internet banking is a real-time solution that allows you to access your accounts 24
hours a day, 7 days a week. You may do your banking from the convenience of
your own home or office without visiting the branch or ATM. You may check
your balances; view your account statements and transaction history for your
various accounts. You can also transfer money between your accounts, change
your password etc over the Internet all in a secure manner.
What do I need to make use of this service and how does it work?
Our Internet Banking is easy to use. All you need is a personal computer or laptop
that is connected to the Internet.
What are the requirements to use Internet Banking?
You need a Bank AL Habib account.
You must be a customer who has registered for our Internet Banking service.
You need a PC/ Laptop with Internet access.
How do I sign-up for Internet Banking?

If you are already a customer with Bank AL Habib, here are the things you need to
do:
Contact your concerned branch, where your account is maintained, for the Internet
banking application form. Upon filling the form, your user name and password
53
will send to you, after 5 working days, from the date of submitting the application
form.
You can also print the Internet Banking Application Form from online,
www.bankalhabib.com
Please read the terms & conditions carefully and print a copy and/or retain the
information electronically for future reference.
I'm already signed up for Internet banking. How do I sign-on?

As long as you have Internet connection, log on to Bank AL Habib website and
click on the Internet Banking. Enter your Username and Password at the prompt.
What banking transactions can I perform with Internet Banking?

Internet Banking enables you to manage your accounts and investments more
easily. It also gives you greater control over balances, transfers and fixed deposits.
The following services will be available for customers:
Account Info and Other Services
Balance Inquiry
Account Statement
Cheque Book Request
Fixed and Call Deposit
Cheques in Clearing
Change Password
Address Change Request
Funds Transfer
Bill Payment
Remittance Request
Account Usage
Credit Card Services
Balance Inquiry
Transaction details
Credit Card Payment
Change Password
Account Usage
54
How secure is Internet Banking?

The information you provide is kept strictly confidential. And the latest electronic
encryption technology ensures the secure transfer of information over the Internet.
Because account security is important to us, we have built safety measures into
Bank AL Habib which reflect the importance of this issue. You'll be allowed to
change your own password, and all information sent and received is encrypted.
How does the Bank AL Habib make sure that only I can access my accounts?
You must enter Internet Banking Password every time you access the system. The
password is known ONLY to you.
What can I do to maximize security?
Keep your password secret.
Never leave your computer unattended while logged on to Bank AL Habib

Internet Banking service.
Don't use your date of birth, telephone number, address, your name or the
name of a friend or relative in your password.
Lock your password when you logout from Bank AL Habib Internet Banking
service.
How often do I have to change my password?

We recommend that you change your password frequently. Your password is your
'key' to Online Banking, so it's important that you take precautions to keep it safe.
Under the Online Banking Conditions of Use, you are obliged to protect your
password. To change your password, use the 'Change Password' link within your
Online Banking session.
How secure is Online Banking on a shared computer?

As long as you log off properly and maintain appropriate personal security
procedures, your Online Banking can be just as secure on a shared computer as a
personal computer.
55
Does Bank AL Habib charge to use the Internet Banking Application?

No
What if I forget my Username and Password?

If you forget your Username and Password, You should Contact your concerned
branch, where your account is maintained during banking hours or call anytime at
111 -014 014 for assistance.
Can I view all my accounts via the internet?

Yes, you can view all your various accounts.
What do I do if I notice an unauthorized transaction has gone through my

account?
If you believe your Internet Banking information has been negotiated or you
notice a transaction you did not initiate, you must contact your concerned branch,
where your account is maintained or call 111-014-014.
If I transfer money today, can I take it out at the ATM?

If you transfer funds to your Bank AL Habib accounts, which allow access via the
ATM, you will be able to withdraw any available funds immediately.
Can I transfer money overseas?

No. To arrange an International Telegraphic Transfer, please contact your
concerned branch, where your account is maintained.
Whom should I talk to when encountering trouble in using Internet Banking

during banking hours or after banking hours?
You should Contact your concerned branch, where your account is maintained
during banking hours or call anytime (24 hours a day, 7 days a week) at 111 -014
014 for assistance and support. We look forward to serving you.
56
CASH DEPARTMENT
PROCEDURE OF CASH RECEIPTS AND PAYMENTS
The cash department is the largest department in Banking. The basic goals or
objective of the Bank are to earn profit. Therefore, receive money from their clients
and invest in business. The adopted in the Bank is as under
TOKEN
The payments are made only against the tokens. The tokens are issued by the
clerk deputed for this job. The branches have code numbers of There own branch
engraved on the existing stock of tokens. When the cashier makes payment against
tokens, he ensures that beside, the token number, the Code number is also correct.
The token are checked daily by the officer responsible for checking of cash and
he tallies the number with the number shown in the stock on hand in the furniture and
fixture register.
CASH RECEIVED STAMP.

"Cash Received Stamp" remains under the custody of an Officer only. Cashier is
not allowed to handle the stamp. The stamp is affixed and under officer signs in the
paying-in-slip or voucher only after satisfying himself that such paying-in-slip or
voucher in properly signed in full by the cashier or the Officer receiving cash in token
of having received the cash.
An appropriate sign board which displayed at cash counters in the branches which
clearly gives indication to the depositors that such Cash Receipts will not be valid if
signed by one signatory only. The depositors thoroughly check their receipt of cash
deposits that these bear two authorized Signature.
At branches where then is no cashier, this stamp remains in the custody of an

officer other than the person who receives cash.
In the afternoon, the stamp is safe
in along with the cash in hand.

Entries in the Receiving cashier's Book is initialed by the Officer holding the
"Cash Received" stamp only after tailing the figures in the registered with the figures
given in the vouchers or the pay-in-slip.
57
RECEIPTS AND PAYMENTS

Before payments of all cheques, the cashier or paying officer satisfies himself that
the cheques have between duly posted, supervised and cancelled by authorized
persons
It is the responsibility of the Manager or the Sub-Manager who check the cash,
and verify the totals of the receiving and paying cashier's Book.
SAVING-IN-CASH-CHECKING THEREOF
The Manager or the officer checking the cash, checks the cash physically in the
afternoon before the cash is safed in.
Loose and unstitched notes of all denomination as well as stitched notes of Rs.
100/- denomination are physically counted.
In addition, the number of sticked
bundles and sealed bags containing coins are properly checked and tallied with the
cash position before the cash is safe-in. It is the personal responsibility of the Manger
and Sub-Manager to see that till such time the cash is safe-in, One Officer always
remain in the branch. The branch hours of the officers art so fixed that at least one
officer remains in the branch till the cash is safe-in.
When the cashier goes to lunch, be safes-in the cash properly and does not leave
it in his drawers or in box. All the branches are given a limit permission for keeping
cash. No branch is allowed and are strictly prohibited to keep excess cash to its
prescribed limit.
DEFECTIVE AND CUT NOTES

Defective and cut notes are not issued by the Bank to the public. Branch collects
sufficient fresh and re-issuable notes from State Bank of Pakistan to meet the
requirement of The customers in particular and public in general.
SECURITY ARRANGEMENTS KEEPING OF EXCESS CASH

The branches takeout, in ~e morning that cash from the safe which is needed for
days transactions, keeping in mind that some payments could be made from receipts
also.
During transaction hours large receipts are transferred to the safe immediately to
58
void accumulation of cash in the department.

The Manager of the branch checks the armed Guard who remains in the branch or
accompany the cash actually know how to handle the gun.
At night a Guard sleeps in the branch premises as the wage commission award if
called upon, he is bound to do round the clock duty.
During counter hours no other work is taken from the Guard except to guard the
premises. The Guard stands behind the counter and in a position that they can not be
over powered easily. In the case of robbery the Guard has within his
rights and is
fully protected if he opens fire with a view to injure or even to kill the Dakotas at the
time of commission of robbery or when they are escaping with the loot. The Guard
care instructed by the Zonal Chief on the Manager of the Branch.
CASH-IN-TRANSIT
At the time of feeding cash to the branches or lift surplus cash from the branches
the cash is accompanied with a gun-man an Officer and a cashier. The boxes
containing with cash are locked. Whenever The cash is transferred from the van to the
branch or vice versa, the gun-man accompanying the cash and of the Guard Branch
are standing on Guard at some distance with loaded gun so that any attempt of
robbery may be failed.
Cash is not taken out from the cash trunks in the van but the locked cash trunks
are taken inside the branch, the necessary amount of cash is delivered. The branch
Manager thoroughly checks up the antecedents of the occupants of the adjacent shape;
boarding the walls of the branches in order to ensure that a burglary by breaking the
wall or digging a tunnel underneath is avoided.
PETTY CASH.
An advance for petty cash is given to the cashier on the first of each month by
debit to suspense Account. Advance for "Petty Cash" payments. form petty cash are
made on the authority of the Manager givens on the relative petty cash Memo.The
cashier maintains a petty cash statement/register. The supervisory Officer checks the
register regularly and initialed on it. The advance is kept separate from other money in
cashiers hand, At the end of the month
the Suspense Account entry is adjusted by
debiting the amount expended to Expenditure Account under relevant sub-heads.
59
The petty cash Memos are attached with the relative expenditure account voucher. At
least once in a week the balance of the advance given for petty cash is verified by a
supervisory officer on different day.
Similar verification is carried out by the Manager or second officer at least once a
month on different days.
EXCESS/SHORT CASH
At the time of Balancing the cash by the Cashier if the Manager finds that the
cash is in excess. In such cases, the excess account is kept in Sundry Deposit sundry
Creditors Account by passing a credit voucher.
If any claim there after is received by branch it is paid to the claimant after
thorough scrutiny by reversing the entry of Sundry Deposit-Sundry creditor Account.
Similarly in case of short cash, a voucher debiting Suspense Account Sundry
Debtor is passed by the branch. The short cash is immediately report to Zonal and as
per instruction of Zonal Office/Head Office the entry of Suspense Account Sundry
Debtors is reversed.
CASH BALANCE BOOK

Daily cash balance with the details of The denominations of notes is recorded in
the cash balance book, which is signed by the cashier and Manager of the Branch,
who have checked the cash.
In this connection the branches are instructed that the cash balance book should
be kept in steel cabinet under lock and keys and it should never be kept in the cash
safe of the branch.
A memo of such cash balance duly signed by Manager is also prepared and
attached to the General vouchers of the branch.
CASH FINANCE
The smartest way of fulfilling your personal & family needs, while keeping your
savings intact. Now take advantage of a hassle-free personal loan at the most
competitive rate against your National Savings Certificates, Pak Rupee/Foreign
Currency Deposits & First Habib Cash Fund units. The AL Habib Cash Finance is
a secured personal loan which offers both Running Finance Facility (RF), which is
60
a Revolving line of Credit with quarterly mark-up servicing, and a Term Finance
Facility (TF), for a period of 1 Year to 5 years, to make your repayments easier
with equal monthly installments.
SALIENT FEATURES
Prompt & Hassle Free Processing
Balance Transfer Facility is also available
No Processing Fee
Documentation Charges (At Actual).
No Pre-payment Penalty
Third Party security of Bank AL Habib Deposit is allowed
Free ATM/ Debit Card
Free Online Banking
Free e-Statement/ Internet Banking Facility
ELIGIBILITY CRITERIA
All Resident Pakistani Individuals such as Salaried, Self Employed &

Business Persons.
Satisfactory Credit History
Required Documentation
ALHABIB CASH FINANCE Application Form
Copy of CNIC
BBFS
Latest salary slip / Salary Certificate (For salaried person)
Bank Account Statement for last six Months (For Business Person)
Any other document of income proof, if available
Currently Liability declaration *As per the prescribed SBP format)
FINANCE AMOUNT
Minimum Finance amount is Rs. 50,000/-
Maximum (90% against PKR Deposits / Encashment value of Securities and

85% on FCY Deposits)
61
PRICING
Financing upto Rs. 5.0 Million Against Bank AL Habib PKR Deposits
Running Finance: 2.00% over Deposit Rate
Term Finance: 1.50% over Deposit Rate
Financing upto Rs. 5.0 Million (Against FCY Deposits and Permissible
Government Securities)
Running Finance: 2.00% over 3 Months Kibor
Term Finance:l 1.50% over 1 Year Kibor
For Financing of over Rs 5.0 Million
Running Finance: 1.50% over 3 Months Kibor
Term Finance: 1.25% over 1 Year Kibor
Aggregate Debt Burden 50% of net disposable income
FAQs
Q. What kind of financing facility does the Bank provide under AL Habib
Cash Finance?
A. We offer both Term Finance (TF) & Running Finance (RF) Facility for
individuals for meeting their personal, family or household needs.
Q. What is the amount of financing offered under AL Habib Cash Finance?

A. Minimum Finance amount is Rs. 50,000/- . Maximum (90% against PKR
Deposits / Encashment value of Securities and 85% on FCY Deposits).
Q. What is the mark-up rate?

A. For amount up to 5 Million: In case of PKR Deposit with BAHL taken as
security minimum 2.00% spread on deposit rate for Running Finance and
1.50% on deposit rate for Term Finance. In case of FCY Deposits and
Permissible Government Securities taken as security minimum 2.00% over on
3 Months KIBOR for Running Finance and 1.50% on 1 Year KIBOR for Term
Finance.
B.
For
amountRunning Finance: 1.50%
over 5 Million :
over 3 Months Kibor

Term
Finance: 1.25%
over 1 Year Kibor
62
Q. What is the frequency of mark up repayment?

A. Quarterly mark-up payable in Running Finance is payable within 15 days of
its becoming due. Monthly mark-up payable will be included in Equal Monthly
Installment for Term Finance. Late Payment charge of Rs. 500/- shall be
applicable after due date.(in case of Post Dated Cheques)
Q. What is the security that I will have to offer to avail AL Habib Cash
Finance?
A. Defence Saving Certificates, Special Savings Certificates & Regular Income
Certificate issued by the Government of Pakistan under the National Saving
Schemes and purchased through Banks, State Bank of Pakistan Offices and
National Saving Centers shall be acceptable as security.
Q. Will third party security be acceptable?

A. Yes, it shall be only acceptable if the third party is a BAHL Accountholder.
Q. Will the facility be extended against third party certificate holders?

A. No. Only certificate holder shall be facilitated.
Q. Can my Behbood Certificates be considered as security?

A. No. As per SBP regulations, only DSCs, SSCs, RICs are acceptable.
Q. What is the processing fee for this facility?

A. There is no processing fee for the AHCF Facility; however, documentation
charges are at actual.
Q. What conversion rate would be applicable on FCY Deposit?

A. Bank would be taking prevalent selling rate (applicable on the day) for
calculating the facility limit.
63
Q. How is the loan entitlement calculated?

A. AL Habib Cash Finance shall not exceed 90% of the encashment value of
the security offered. In case of financing against Foreign Currency Deposit the
maximum financing should not exceed 85% of the deposit encashment value.
Q. What is the clean-up requirement under AL Habib Cash Finance?

A. There is no clean-up requirement.
Apni Car
Product Benefits and Features
Financing available for Brand New, Used & Imported Cars
Minimum Down Payment for Brand New Cars is 20% & 40% for Imported
Cars
Minimum Loan: Rs 250,000/-
Maximum Loan: Rs. 3,000,000/- for Brand New Cars and: Rs. 1,500,000/- for
Imported Cars
Loan period is 1-5 years.
Affordable monthly installments.
No Pre-payment penalty.
Partial payments allowed with no charges
Choice of reputable insurance companies at competitive rates.
Quick processing and minimal documentation
Our highly trained executives will take care of your financing requirements.
The only thing you need to worry about is choosing the car and its colour
64
SWOT Analysis:
SWOT Analysis is a strategic planning method used to evaluate the Strengths,

Weaknesses, Opportunities, and Threats involved in a project or in a business venture.
It involves specifying the objective of the business venture or project and identifying
the internal and external factors that are favorable and unfavorable to achieving that
objective.
a)-Strength:
Attributes of the organization that are helpful to achieving the objective.
Strengths of bank Al Habib are as follows:
ATMs at bank Al Habib are secured friendly and easy to access.
Youngers account of the bank Al Habib is good source of promotion for
bank Al Habib.
65
Bank Al Habibs brand name is itself a strength

Bank Al Habib provides online as well as physical training for its employees
all over world
Bank Al Habib have the more then 230 branches in Pakistan
There is a huge variety of products and services
They do not consume to much capital on the marketing of their product
Less risk in their banking system because they are not easily give the credit
facilities to the customer
Brand name is also the strength of the bank Al Habib.
Decent way of dealing with the customers.
Rapidly expansion of branches in the different cities of Pakistan.
To much focus on the development and the promotion of the employees.
Proper online banking system.
No too much threat of the political environment.
Sufficient liquidity position.
Do well socially
Habib schools 50% concession for the poor peoples
Current ratio is above 20% of the total deposits

Controlling Standards
b)-Weaknesses:
Attributes of the organization those are harmful to achieving the objective.
Weaknesses of bank Al habib are as follows:
Bank Al Habib is not quick to give loans and cards.
Not Easy application is for applying for a credit card
No marketing for the promotion of their marketing.
They are not high risk taker In business activities but in business the term is
used high risk high profit, low risk low profit
Too much poor Self Marketing Department.
Low incentives like bonuses overtime pay etc.
66
c) Opportunities:
External conditions those are helpful to achieving the objective.
Opportunities that Bank Al Habib can avail are as follows:
There is a lot of cushion available for Bank Al Habib in terms of expanding
its network of branches up to 230 but all this depends on stability of the
Pakistan economic and political situation
The opportunities available for Bank Al Habib are financing to SMEs (Small
and Medium Enterprises) in Pakistan.
Bank Al Habib can also look for small account holders
Bank Al Habib has an opportunity to merge with some other bank to increase
the number of its branches in Pakistan.
Attractive salary packages should be awarded.
Marketing department should be started in order to promote the name of Bank
Al HAbib.
On the job training & coaching sessions can be conducted.
d)- Threats:
External conditions which could do damage to the business's performance
Threats that could affect Bank AL Habib in negative way are as follows:
Day by day competition is increasing not only of the expansion of the banks
but also due to the launching of the new bank in the market e.g. Barclays.
Circumstances of Pakistan are a great threat for the existence of the Bank Al
Habib.
More and more banks are launching there operations in Pakistan which is
increasing competition for the Bank AL Habib.
The conventional banks those having high growth rate and high market share
are always being a threat.
Large business parties have fewer attractions in being a client of BAL-IBD,
mainly because of excessive amount of documentation.
67
PEST analysis:
Political forces;
The events in the last couple of years; the bomb blast of May 28th 1998 and the
subsequent freezing of the FCAs, the declaration that Riba is Un-Islamic, and a
volatile political scenario that saw the overthrow of the Nawaz Sharif regime, all
contributed in highlighting the important role of government in the local economy.
The freezing of the FCAs destroyed the confidence of foreign depositors.
Also, the
declaration that Riba is against the Sharia, is likely to cause tremendous uncertainty in
the banking sector. After this Pakistans army totally holds on the government and
push back the economy. Stability under the new regime is also very important for the
economy as a whole. Continuous political changes have disrupted the policies and
objectives as each regime brings with it its own agenda. Organizations need time to
68
adjust to one regime and then work with it towards economic enhancement. Due the
wrong policies of the government the talibanization also develop in Pakistan and
become the international issue in Pakistan and badly affected the Pakistan repute in
the world and promote the uncertain conditions for the business in the Pakistan. Due
to this the investors are not interested in the Pakistan.
Economic factors;
The Pakistan economy is more controlled economy, then one where market forces
reign supreme. Several key institutions are stated owned. Thus a discussion of the
economic forces that influence the private organization such as bank Al Habib cannot
ignore the substantial role played by the government in determining the state of the
economy. The biggest indicator of the heavy role enjoyed by the government was
evidence when foreign currency accounts (FCAs) were frozen on the orders of the
ministry of finance in the wake of explosion tests on may 31st 1998.
This and the recent efforts by the state bank to artificially lower the interest rates by
revising the repo rates downwards and encouraging lower bids for T-Bill, highlights
the overwhelming role of the government in the economy. Badla rates are a true
indication of market rates at which financial intuitions are willing to lend but the
government, under the dictates of the IMF wants to artificially lower the interest rates
so as to provide investment liquidity within the economy.
General Musharaf period of government putt back the economy of the Pakistan due
to the wrong policies of the government for the economic growth in the Pakistan.
Pakistan economy destroyed badly in that 10 to 11 years of the government, and
investors hesitated to invest in the Pakistan, and also the load shading is another factor
that effect the Pakistan economy badly.
This not the end of the story after this Pakistan economy face lot of problems like
bomb attacks in Pakistan no electricity and the unstable government, due to this the
investor are not invest in the Pakistan and the existing business men finish their
business unit due to the loss.
Social forces:
A low saving culture has offset the huge population advantage this is enjoyed by
Pakistan. Also culture is dedicated by the religion, and in Pakistan a significant
69
segment of the population is loath to accept interest for their deposits due to the
negative religious implications of such an act.
About 70% of Pakistans population is based on rural areas, thus making it harder for
banks to mobilize their deposits within these regions.
Habib group also started a school system in Karachi for the cherty purpose.
They give the funds to the poor person on the daily basis
Technological forces:
Banks in the developed world have been turning to heavy IT investments, which
differentiate their products, provide response times, enhance accessibility and improve
customer satisfaction. Though investing in state-of-the-art host banking solution
(Fiserv, Kapiti, etc) , ATM and POS ( point of sale) networks, visa, MasterCard, and
Amex switches, smart cards, telebanking and now internet banking are common IT
investment in the developed world, it is now that these products and services are
gaining faster acceptance in Pakistan.
Bank Al Habib change their technology in IT sector due to the requirements of the
current time, before this they have the poor technology of the IT and un less skilled
person in that field but at this time they replace it with the heavy installation of the IT
instruments. They hired new skill employed and trained them for the efficient and
effective work.
Porters five forces analysis:

The model of the five competitive forces was developed by Michael E. Porter in
his book Competitive strategy: Techniques for Analyzing Industries and
Competitors in 1980.
Porters model is based on the insight that a corporate strategy should meet the
opportunities and threats in the organizations external environment.
70
I. Rivalry Among Competing firms;

Bank Al Habib limited is facing a strong competition from other private Pakistani
banks like Metropolitan bank. Soneri bank and Askari Commercial bank. The
improved performance of the nationalized commercial banks (NCBs) is also the threat
for the bank Al Habib. Foreign banks are also competing with the bank for same small
medium sized companies. The bank is overcoming the incentive competition due to its
strong reputation as a renowned financial group in Pakistan and a long history of
experience in the banking sector.
II. Potential entry of new competitors;

The entry barriers in this market are high. The new banks need permission from SBP so
entry of new banks is restricted. Also the paid up capital requirement is likely to be
raised from Rs.500 million to Rs.1 billion.
III. Development of substitute products;

The non banking financial institutions including development finance institutions
(DFIs), private sector investment banks (PSIBs), leasing corporations (LCs) and
71
Modarbas are almost in the same line of business and can be treated to the bank. Other
substitutes that compete include the national saving certificates, the stock market, its
supporting industry and brokerage houses.
IV. Bargaining power of suppliers;
The main suppliers in the banking sectors are depositors. Although the bank is given
higher return then any other bank (12% per annum) to attract the depositors but the low
innovation in the product and also low investment in the marketing sector of the bank
may provide difficulties in coming years.
The regulatory bodies could also be the suppliers as they provide guidelines to the bank
from time to time. These include the State Bank of Pakistan (SBP), The Corporate Law
Authority (CLA), The Ministry of Finance and the religious board.
V. Bargaining power of customers;
The main customers are small traders and exporters based in Karachi and Lahore,
majority of whom deal in textile related commodities. Since the bank is targeting the
short-term trade finance market, the bargaining power of customer is substantial as
other banks within the same sector like Habib bank, Bank Al Falah and Metropolitan
are fast catching up with the Bank Al Habib in providing services to the traders.
72

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INTERNSHIP REPORT

BANK AL-HABIB LTD

BAHAUDDIN ZAKARIYA UNIVERSITY,

Who always wishing and praying for

Thats why, every student of Management is sent to some

organization where he acquaints himself with practical aspect of his studies.

Muhammad Shaheer Javaid

Mr. Hussain Haider Qureshi

(Branch & Chief Manager)

Mr. Fraz Haider Zaidi

Mr. Muhammad Asghar

(Account Opening Officer)

Mr. Mujahid Haideri

(ATM & Cheque Book Dealing)

Mr. Muhammad Imran

Mr. Muhammad Naseer

(Clearing Inward Officer)

(Clearing Outward Officer)

Mr. Umar Bukhari

(Car Financing Officer)

Mr. Muhammad Musa

(Foreign Exchange Manager)

Employers want people who have experience. Internship gives

History of Bank Al Habib:

History of Habib group in Pakistan:

Introduction of Bank AL_HABIB:

VISION AND MISSION

OBJECTIVES OF THE BANK

(I) DATE OF THE CHEQUE:

BANKER'S AUTHORITY TO TERMINATE THE PAYMENT OF CHEQUES:ENDORSEMENT:

REQUIREMENTS OF VALID ENDORSEMENT:

For Machinery & Equipment (Leasing):

ACCOUNT OPENING SECTION:

Bank Al-Habib Term Deposit

AL Habib Salana Munafa Account

FUNCTIONS OF THE ACCOUNT SECTION.

SECURITY ARRANGEMENTS KEEPING OF EXCESS CASH

History of Bank Al Habib:

Introduction of Habib family

Introduction of Habib groups of companies:

History of Habib group in Pakistan:

Habib Family's Business Units

Habibsons Bank (UK & Switzerland)

shield Real Estate Brokers (UAE)

History of Habib group in Pakistan:

Introduction of Bank AL_HABIB:

(Private) Limited (the Company) was incorporated in Pakistan asa (Private)

VISION AND MISSION

TO BE A QUALITY FINANCIAL SERVICE PROVIDER

How can you get your payments?

For Cash Over Counter Payments / Cash Pick up

For Other Bank Account Holders

Number of Employees upto 20.

Annual Sales Turnover upto Rs.75 Million.

As defined by State Bank of Pakistan (Medium Enterprises)

Number of Employees from 21 to 250 (Manufacturing & Services MEs)

Number of Employees from 21 to 50 (Trading MEs)

Annual Sales Turnover upto Rs.400 Million.

We offer the following facilities to the customers:

Working Capital Financing.

Expansion of production facilities

OBJECTIVES OF THE BANK