Executive Summary

The banking structure in Pakistan comprises of the following types, State Bank of
Pakistan, Commercial Bank of Pakistan; Exchange Banks, Saving banks, Cooperative banks,
specialized credit institutions. The state bank of Pakistan is the Central bank of the country
and was established on July 01, 1948. The network of bank branches now covers a very large
segment of national economy. The State Bank of Pakistan issues the shares of these
periodically. Bank employees and other common peoples can also purchase these shares and
earn profit.

In BBA the internship program is compulsory for the regular students and without the
internship program the degree is not complete and concepts that I learn during study is very
important for me to learn all the concepts practically associated with the organization and
learn practical concepts .I selected Askari Bank and decide to internship in this bank.

This report is the brief description and summary of my work that I have undergone at
Askari Bank Limited Sahiwal Branch from 20th June 2011 to 3th Aug 2011.

During the period I work in accounts opening department, exchange department, clearing
deparment, remittance department and credit department .It was a great experience for me to
work in organization .My theoretical knowledge became a potent and strong with the help of
practical implication. My report includes the introduction of banking sector in Pakistan.
Banks plays very important role in the economy of country of country and Pakistan is so
exception. Banks are custodian to the assets of general masses. It is banking sector which
plays a significant role in a contemporary world and economy.

On the very first day of my internship I reported to Mr. Saeed Ahmed Malik, Incharge
General Banking. He gave me small introduction of the Bank and introduced me to the staff
of the Bank. Every internee is rotated among the Bank’s departments and so was I. This
rotation is done in order to have general concept regarding Bank’s functions, operations and
policies. In this rotation the stay in department is usually a week. I have learned more about
the Basic Banking, Credits and Foreign Trade department and have given below the caption
of activities I was involved in during the period of six weeks.

During my internship program I learnt the brief working of major departments working in
that organization. Normally banking is categorized under two heads which are

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 General/operations Banking

 Consumer Banking

Under general or operations banking various functions are performed. Such as

customer services, accounts, account opening, clearing, cheque books & cash department.

In the customer services all kinds of information and guidance is provided to internal as
well as external customers whom they require.In account section, all type of income and
expenses are recorded may be on daily basis.Account opening gives the first impression of
Bank and opens the way for customers to make transactions. Here cheques are being cleared,
either received or delivered through NIFT which is working under state bank of Pakistan and
is responsible for the inward & outward clearing of each bank.In the cheque book and cash
department section, requests for the cheque books are received and sent to the head office.
From where, the cheque book of that account is sent the very next day of request receiving.
Each leaf contains the customer’s name & account number printed also.

All kind of transactions which are directly associated with the flow of paper money and
internal transfer of amount from one account to another are dealt over here. Automatic teller
machine (ATM) also works under this section & the cash officers are responsible for its all
transactions.

The functions performed under consumer banking are personal finance, credit cards,
business loans, car finance, home finance, agriculture finance & credits.The personal loans
are also sanctioned through banks to meet the requirement of salaried person.Credit cards are
widely used in place of paper money now a day. Its acceptability is increasing day by day
because there is no chance of loss in case of theft or robbery.Business loans are also issued by
Askari bank Limited, which are really very beneficial for the development of business &
grants high interest rates to bank also. Special business development officers are hired for this
purpose.Agriculture sector is also financed by bank to support farmers so that they become
able to introduce new technologies in their work to earn more.Credits are also given to the
clients who are well reputed or the guarantor must be a loyal customer of bank.

This report also includes the financial analysis (Vertical, Horizontal & ratio analysis).
Which is really very helpful in assessing the financial strength of Askari Bank Limited?

During my internship I found that Askari Bank is a best Bank in Sahiwal with respect to
the technological advancement. The revolution in the banking in the form of electronic

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banking operation have opened avenues of the effective ,efficient and quick services saving
the time and cost of the customers and fortunately AKBL is among those few banks who are
already reaping the benefits of electronic transactions.

Low profit rates used to be one of the major reasons for not meeting the deposit targets.
The profit rates on Askari deposit schemes were quite low when compared with other Banks
especially with the National Saving Centers. But now Askari Bank is giving a comparatively
high profit rates to its customers. In today’s every customer is a rational customer, he knows
the value of money and wants a best return on his money.

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CHAPTER NO 1
INTRODUCTION

Page 4
 INTRODUCTION

ORIGIN OF WORD ‘BANK’

Banks play very important role in the economic life of the nation. The health of the
economy is closely related to the soundness of its banking system. Although banks create no
new wealth but their borrowing, lending and related activities facilitate the process of
production, distribution and consumption of wealth.

It has not so far been decided as to how the word ‘Bank’ originated. Some authors opine
that this word is derived from the words ‘Bancus’ or Banque’ which mean a bench. Other
authorities hold the opinion that the word ‘Bank’ is derived from the German word ‘Back’,
which means ‘joint stock fund’.

The term bank is being used for a long time yet it has no precise definition. The basic
reason is that the banks perform not just one but many types of functions originally the banks
were supposed to make short term loans to the traders only.

MODERN DEFINITION

Bank is defined as “Financial institution that accepts deposits and channels the money
into lending activities; "he cashed a check at the bank"; "that bank holds the mortgage on my
home"

According to Dr. Hart

“Banker or bank is a person

Or company carrying on business of

Receiving money and collecting drafts for the

Customers subject to the obligation of honoring cheques

Drawn upon them from time to time by

Customers to the extends of

The amounts available

On their currents

Accounts”

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 IMPORTANCE OF BANKING

Banking industry acts as life-blood of modern trade and commerce acting as a bridge to
provide a major source of financial intermediation.

Banks collect money from various sources and provide necessary funds to individuals and
government to carry out big projects in the field of industry and commerce. They also give
advice and technical guidance in commercial industrial matters.

Banking is now an essential part of our economic system. Modern trade and commerce
would almost be impossible without the availability of suitable banking services.

First of all, banking promotes savings. All manner of people, from the ordinary laborers and
workers to the rich land owners and businessmen, can keep their money safely in banks and
saving centers.

Secondly, banking promotes investments. Banks easily invest the money they get
in industry , agriculture and trade. They either invest it directly or advance loans to other
investors.
Thirdly, it is most through banks that foreign trade is carried on. Whether we export or
import, it is through banks that money is transferred from one country to another. For
example, bills of exchange and letters of credit are the regular ways banks use to transfer
money.

TYPES OF BANK’s

 Central bank or state bank.

 Commercial bank.

 Exchange bank.

 Industrial bank.

 Agriculture bank.

 Investment bank.

 Saving bank.

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Central Bank

Every country has its central bank or state bank. Its major function is to carry out a
country’s monetary policy with an aim to safeguard its financial and economic stability. It
has the monopoly of note issue. It is also the custodian of money market. State bank is the
Banks bank and lender to the government.

Commercial Bank

Commercial banks are profit earning concerns. They receive deposits and advance loans
to the borrows. They greatly help in financing for internal and external trade of the country.

Exchange Bank

The main function of the exchange bank is to finance the foreign trade by the purchase
and sale of foreign currencies in the form of drafts, bills of exchange, telegraphic transfers.
They also perform the function of commercial bank. Receiving deposits and advancing loans.

Industrial Bank

Commercial bank cannot afford to block their funds in long term investments. The
industrial banks receive long term deposits and finance the industries by providing them long
term credits. In Pakistan the Industrial bank named as Industrial Development Bank of
Pakistan (I.D.B.P) was established in 1961 for this purpose.

Agricultural Bank

Agricultural bank provides short and long period loans for financing agriculture. The
agriculturists need short and long term loans for meeting their day to day and long term
requirements for making permanent improvement in the land. In Pakistan Agricultural Bank
is named as Agricultural Development bank of Pakistan (A.D.B.P) and it was established in
1961

Investment Bank

The main function of investment bank the merchandising of shares and other securities,
managing and distributing the issue of shares and other securities.

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 Saving Banks

These are the institutions which are sponsored by the government for having facilities to
the people and small means. These banks collect small saving of people and allow them to
withdraw in small amounts. Also another institution i.e. National Savings is working in the
same capacity.

HISTORY OF BANKING IN PAKISTAN

Banking in fact is primitive as human society, for ever since man came to realize the
importance of money as a medium of exchange; the necessity of a controlling or regulating
agency or institution was naturally felt. Perhaps it was the Babylonians who developed
banking system as early as 2000 BC. IT is evident that the temples of Babylon were used as
‘Banks’ because of the prevalent respect and confidence in the clergy.

The partition plan was announced on June 3, 1947 and August 15, 1949 was fixed as the
date on which independence was to take effect. It was decided that the Reserve bank of India
should continue to function in the dominion of Pakistan until September 30, 1948 due to
administrative and technical difficulties involved in immediately establishing and operating a
Central Bank.

At the time of partition, total number of banks in Pakistan were 38 out of these the
commercial banks in Pakistan were 2, which were Habib Bank Limited and Australia Bank of
India. The total deposits in Pakistani banks stood at Rs.880 million whereas the advances
were Rs.198 million. The Governor General of Pakistan, Muhammad Ali Jinnah issued the
order for the establishment of State Bank of Pakistan on 1st of July 1948.

In 1949, National Bank of Pakistan was established. It started with six offices in former
East Pakistan. There were 14 Pakistani scheduled commercial banks operating in the country
on December 1973, the name of these were:

 National Bank of Pakistan

 Habib Bank Limited

 Habib Bank (Overseas) Limited

 United Bank Limited

 Muslim Commercial Bank Limited

 Commerce Bank Limited

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 Australia Bank Limited

 Standard Bank Limited

 Bank of Bahawalpur Limited

 Premier Bank Limited

 Pak Bank Limited

 Lahore Commercial Bank Limited

 Sarhad Bank Limited

 Punjab Provincial Co-operative Bank Limited

The Pakistan Banking Council prepared banks amalgamation schemes in 1974 for
amalgamation of smaller banks with the five bigger banks of the country. These five banks
are as under:

 National Bank of Pakistan

 Habib Bank Limited

 United Bank Limited

 Muslim Commercial Bank Limited

 Allied Bank Limited

So, through the Nationalization of Bank Act 1974, the State Bank of Pakistan, all the
commercial banks incorporated in Pakistan and carrying on business in or outside the country
were brought under the government ownership with effect from Jan. 1, 1974. The ownership,
management, and control of all banks in Pakistan stood transferred to and vested in the
Federal Government. The Finance Minister announced plans to start Islamic Banking system
in Pakistan in the budget speech on June 26, 1980, but it could not be possible till August,
2003.

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 INTRODUCTION OF ASKARI BANK LIMITED

An important player in Pakistan’s financial services industry, Askari Bank is now leading
the way to the most modern and dynamic Banking in the country.

Askari Bank was incorporated on October 9, 1991 as a Public Limited Company and is
listed on Karachi ,Lahore and Islamabad Stock Exchange. It started its operations from April
1992.The bank was declared as “Best Bank in Pakistan” in 2001 in Global Finance.

Askari Bank has expanded into a nationwide presence of 256 branches, including 31
dedicated Islamic banking branches, and a wholesale bank branch in Bahrain. A shared
network of 4,173 online ATMs covering all major cities in Pakistan supports the delivery
channels for customer service

ASKARI BANK is the leading private sector Bank in Pakistan, delivering quality service
through innovative technology. In the success story of ASKARI BANK, one of the most
important factors, apart from its dynamic management and prudent approach, is the
QUALITY of its SERVICES, which gives it a great edge over its competitors. ASKARI
BANK has always strived to facilitate its customers by introducing various high quality hi-
tech services for the first time in Pakistan.

Askari Bank plays the pioneer role in providing the most modern and technologically
advanced services to their customers. It has A1+, the highest possible credit rating, for short
term obligation, and AA+ for long term rating.

It is also a matter of satisfaction that ASKARI BANK has been the first Bank to introduce
PTCL and WAPDA utility bills payment electronically through ATM and Internet on an
Online-Real-Time Basis. For the first time in Pakistan, we have introduced Mobile ATMs to
provide Banking facilities at the doorsteps of our customers. Askari Bank’s mobile ATMs
first in the Banking history of Pakistan, now four in number, continue to serve customer
needs. Bank has established its Data Warehouse and Customer Care Centre, a dedicated
customer call center to provide one window service to valued customers in terms of their
telephonic enquires. Askari Bank remains focused on using technology for improving
customer service standards and expanding the range of products being offered and other
technology based solutions.

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 THE MISSION STATEMENT

To be the leading private sector bank in Pakistan

With an international presence,

Delivering quality services

Through innovative technology

An effective resource management

In a modern and progressive organization

Culture of meritocracy, maintain

High ethical and professional standards,

With providing enhance value to all our stakeholders,

And contributing to society

VISION

To be the leading bank in the region...

CORE VALUES

The intrinsic values, which are corner stone’s of Askari corporate behavior, are:

• Commitment

• Integrity

• Fairness

• Team-work

• Service

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ACHIEVEMENT OF ASKARI BANK

Since its inauguration, Askari Commercial Bank Limited engaged in share the
development of the country. Its basic mission is to be the leading private sector Bank in
Pakistan. During its very few years of life, AKBL has a high regard for its ‘Best Banking’.
No Bank achieved such fame in a short time period. In this age of tough competition, AKBL
plays a role of responsible corporate citizen

“The Best Bank in Pakistan”

Askari Commercial Bank honored with this award by the Prestigious Global Finance
Magazine in the year 2001. It has been selected by the above magazine as the “BEST
CONSUMER INTERNET BANK IN PAKISTAN” for the year 2002.

“Best Domestic Bank”

Askari Commercial Bank won the Euro money award in 1995.

“Commercial Bank of the Year”

Askari Commercial Bank Ltd. awarded as the ‘Commercial Bank of the year’ for the year
1994 and 1996 by the Asia money.

“Short Term Rating A1+”

PACRA awarded Askari Commercial Bank as A1+, the highest possible credit rating for
short term obligations.

“Long Term Rating AA”

Askari Commercial Bank’s long term rating stands at AA asserted by the PACRA.

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 OBJECTIVES OF THE ASKARI BANK LIMITED

As Askari Bank looks ahead to the future by moving through the decade of the 1990's its
efforts are guided by a broad framework of corporate objectives, which are as follows:

 Askari is committed to its identity of "security & trust" and will endure to uphold this image
at all the times.
 It will endure to provide its customers with as many creative financial services and products,
as is required. As today customer demands a package of services suited to his particular
business, Askari plans to develop different and new products to cater to the customer's
demand. Askari bank has the strength to be a market leader.
 Bank will keep standing and by and develop, its human capital base. It is planning to provide
all the required training to its staff towards achieving a higher level of professionalism.
Askari will continue striving to build a strong, motivated and dedicated work force where
total commitment will be towards customer's satisfaction and wealthy growth of organization.
 Askari bank will endure to provide a competitive return to its shareholders and will strive to
maximize its share value. The enhancement in its capital and returns will be a continuous
process. Askari bank is interested in being one of the most financially viable institutions. So
it lays great emphasis on gradual building up to a healthy deposit mix. In the years ahead, the
bank will enhance its focus on growth through operational efficiency, creating strategic
alliances developing well-structured networking system innovating new products, enhancing
marketing and sales efforts improving customer service, achieving greater employee
motivation and providing the best value to its stakeholders - will make it a leader in the
corporate world.

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ORGANIZATIONAL STRUCTURE

BOARD OF
DIRECTOR

PRESIDENT

COUNTRY
HEADS

REGIONAL
MANAGERS

AREA AREA
MANGER MANAGER

BRANCH BRANCH BRANCH BRANCH BRANCH BRANCH

MANAGER MANAGER MANAGER MANAGER MANAGER MANAGER

Page 14
 BRIEF INTRODUCTION OF AKBL SAHIWAL BRANCH

Askari Bank Limited Sahiwal was inaugurated on December 31, 2001.It is located on
High Street Jinnah Road Sahiwal. The location is connected to all the main trade centers in
Sahiwal. It is a prosperous branch streaming towards great achievements. At the time of its
establishment the factored that were considered are as follows

 Sahiwal is zone covering a large population.

 Agriculture based area constituting growers and gainers
 Educational Institution

ORGANIZATIONAL STRUCTURE OF ASKARI BANK SAHIWAL

Manager

Manager
Operations

General
Credit Accounts Computer
Banking

Deposit A/C

Remittance Cash Clearning

Page 15
CHAPTER NO 2
DEPARTMENTS

Page 16
 WORKING IN DEPARTMENTS

Bank procedures are divided between various departments. Different departments do their
job in concurrence with the bank policies. In AKBL each branch is divided into various
departments. Head of the department manages each department and officials of the branch
follow procedure.

Within the Sahiwal branch following department are working.

 GENERAL BANKING DEPARTMENT

 ACCOUNTS DEPARTMENT

 FOREIGN EXCHANGE DEPARTMENT

 CREDIT DEPARTMENT

GENERAL BANKING DEPARTMENT

Mr. Saeed is the head of general banking department in this branch of Askari Bank.
Following department comes in the General banking department.

 Account opening department

 Remittance department

 Cash department

 Clearing department

ACCOUNT OPENING DEPARTMENT

Borrowing funds from different sources has become an essential feature of today’s
business enterprises. But in the case of a bank borrowing funds from outside parties is al l the
more vital because the entire banking system is based on it. The borrowed capital of a bank is
much greater their own capital. Banks borrowing is mostly in the form of deposits. These
deposits are lent out to different parties. Such deposit creation is done through opening an
account in the Bank. . In AKBL Sahiwal Mr. Sohail is operating the account opening
department along with performing some auxiliary functions of Check Book Issuing
and receiving IBC’s (incoming Bank Cheque for Collection).

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 TYPES OF ACCOUNTS

In AKBL, there are the following types of accounts:

 Current account.

 Saving Account.

 Askari Special Deposit Account.(ASDA)

 Basic Banking account

 Term Deposit.

Current Account

In current account there is no interest on it. It is for only transaction purposes. They are
paid on demand. When a banker accepts a demand deposit, he incurs the obligation of the
paying all cheques drawn against him to the extended of the balance in the account. As there
is no profit paid on this account it is also called chequing account because cheques can be
drawn on it. Current account is mostly opened for business.

Saving Account

The purpose of this account is to induce the habit of saving individuals in the
neighborhood. The profit is on the basis of 5% per 6 month. The minimum deposit
for opening the account is Rs.2500/-.Though individuals open such accounts for saving
purpose, persons belonging to Armed forces and different military institutions are free to use
this account on current basis.

Askari Special Deposit Accountant

ASDA account is an interest bearing current account interest is paid. It is also chequing
account because cheques can be drawn on it. It is necessary for this account that the client
must maintain a minimum balance of Rs. 50,000 at the end of the month. That’s why it is
similar to current account. It is mostly opened by Business but individuals to open this
account. Tax of 0.3% would be deducted on ASDA if withdrawals are more than Rs.25, 000.

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 Term Deposit

A term deposit is a deposit that is made for a certain periods of time at the end of the
specific period. The customer is allowed to with draw the principle amount .Initial deposit
of Current Value plus Account is Rs. 25000/-. The rate of return on this account is set by
head office. The term deposit account varies one month to 1 year for all following accounts.

ACCOUNT OPENING PROCEDURE

From the chequing accounts (C/A, ASDA, SAVING), there are different types of account
holders are required for all these types of account holders. The operation /procedure
requirement that is needed for ” Individual Account ” differ greatly from ” Joint account ”
proprietorship “Partnership “, “Limited Company” and “Club society or Association ” as
explained below.

INDIVIDUAL’S ACCOUNT

When a single man or women opens an account in his/her own name and has the right to
operate it is called individual Account.

DOCUMENTATION REQUIREMENT

For literate person copy of National Identity Card is required as a primary requirement.
For illiterate person and Veiled Women, along with the copy of National Identity Card
requirement he or she must come in person for opening the account.

OPERATION

 The person place a “Check Mark ” in the type of account and type of operation required.

 He/She fills in part-I of the form , a fix his /her either two or four similar signature (or thumb
expression in the signature space and get it introduced and signed by a person who already
has an account with the bank and write his account no in the specific rows in a specific space.

 The person fills in “next of Kin ” position where he/she father, mother, husband/wife or any
other relative’s name, his /her address, phone no and affix his/her signature to certify this
requirement. This requirement is needed because in his/her absence bank can have
correspondence with the specific person.

 The person put her /his signature (” or thumb expression) on the signature Specimen Card
(SS CARD) similar in the area on the form. One the back of S.S card mailing address,

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 telephone no, Person to contact and introducer space is filled in. All these requirement are
necessary for future

 The person deposits the initial amount for opening account on to the cash counter.

 The person put his signature on form -A (check book requisition) on two places in
“authorized signature” and fills in the “Title of Account space by writing his name.

 If the person put his signature in Urdu or any language other than English, he signed a
“Vernacular form” where under take that affixed signature are original and his own signature
and two postal size photos are needed.

 The next day is the opening of account.

JOINT ACCOUNT

When two or more persons, neither partners, nor trustees, open an in their name is called
joint Account. Husband and wife or two persons of same sex can open joint account.

DOCUMENTATION

For joint account copy of National Identity Card of all the persons is obtained other things
remaining same as in individuals account.

OPERATION

 The person checks the type of amount and type of operation required in the respective box on
the form.

 The persons fill in the Part-I and part-II in the form.

 Signatures of both persons are obtained on the form in the area specified for signature and
S.S. Card.

 In the title of account space names of all the persons are mentioned.

 Accounts holder specified in the form that they will operate the form singly or jointly.

PROPRIETORSHIP ACCOUNT

When an owner of a firm operating singly, opens an account in his firm name, this
account is called a proprietorship Account the proper himself liable for all his acts.

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 DOCUMENTATION REQUIRED

For this kind of account, an application for opening the account on the firm letter -pad
(having the firm name) is required along with the NIC Card of proprietor.

OPERATION

All operation remains the same except that the firm name is written in the “Title of the
Account” area and signature of the proprietor are affixed in the S.S. Card and the area
specified for signatures on the form.

PARTNERSHIP ACCOUNT

The account is opened in the firm name and all partner designate one two persons to act
on behalf of the partnership firmer all acts on behalf of firm. The partners in the partnership
firm are liable for the acts of the firm jointly and severely. Every partner has in a firm has an
implied authority bind his co. partners by drawing and enclosed cheques.

DOCUMENTATIONS

 Copy of N.I.C card of all partners

 Application to open the account on the firm letter pad.

 Partnership deed in case registered partnership firm.

 Letter showing the implied Authority of one or more partners to act on behalf of the firm.

 In case of non -registered partnership firm, understanding on behalf of the firm to remain
liable for all acts of the firm.

 Name, address of all partners is written on the pad.

OPERATION

All other requirement remain same except that the form is dully signed by all partners
cards are signed by all those partners who will act on behalf of the firm and along filling part-
I , Part-Iv is also filled.

ATM- CARDS DEPARTMENT

This department deals in issuing ATM-Card, term deposits and Askari Bachat
Certificate.

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 ISSUING PROCEDURE

 The person, first open the account within the blank.

 Then he fills the ATM application form in which name of account holder, Fathers name
account number and N.I.Card number are mentioned.

 A copy of N.I. card is also attached with the application form.

 After completing this process, the application package is sent to head office

 ACBL head office takes a period of 3-4 weeks for preparing and processing of ATM – cards.
First, list of card holder is issued and then after 15 days cards are send to ACBL’s issuing
branch. The card and list are not sent simultaneously in order to avoid any mishandling.

REMITTANCE DEPARTMENT

Remittance department plays an important role in transfer of funds from one place to
another. Askari commercial bank provides this service to their customer, as well as general
clients. Different instruments are use to remit the money. The instrument can be defined as
“It is in writing containing an unconditional order signed by the maker to pay certain amount
to or to the order of a certain person for future determinable time. The following different
instruments are used to remit the funds in ACBL.

 Demand Draft

 Telegraph Transfer

 Pay Order

 Pay Slip

 Travelers Cheques

Demand Draft

Demand draft is most frequently used instrument. It is defined as “an unconditional

instrument in writing drawn by a bank in a favor of any person on a branch of its own bank or
any other bank to pay a certain sum of money to his order, for value received”. Virtually
there is no “stop payment” of a bank draft. It is issued or paid to all customers and clients.

Page 22
Telegraph Transfers

The transfer of funds by means of fax or telegram is called telegraph transfer. It is fast
way to transfer of funds from one branch to another of same bank. The amount will credit to
the beneficiary account within 24 hours. The customer fills TT application form. The bank
officer enters into TT issued register.The bank officer writes the message and apply test on
the TT message and give appropriate instruction such as “advice and credit” or advice & pay
“telegraph transfer receipt is issued to make cash payment to the beneficiary. The
commissions charges are same for DD and fax charges are Rs.40. And message is fax to the
beneficiary bank in beneficiary account, but if the beneficiary has no account then payment
will be made by TTR. It is quick mode but it is not used for business purpose and preferably
used for personal use..

Pay Order

Pay order is issued for payment in the same city because it is issued form one branch can
only be payable from the same branch. All the procedure of pay order is same as in the DD.
The only difference is that in pay order the distinction is not specified, i.e. the issuing and
paying end of pay order is same branch. It is generally refereed as Banker’s cheque.

Commission on Pay Order

Up to 100000 Rs.25

Greater than 100,000 No charges

Pay Slip

It is used by the bank for the settlement of its own payment of expenses. The contractor in
favor of agencies makes call deposit receipts. After the approval of the bid, when the
contractor complete their work then release of security letter is issued by the agency. If the
contractor has no account then its cash payment is made by the pay slip. No excisable duty
and commission is charges on pay slip.

Travelers Cheques

Askari traveler’s cheques are a valuable financial service of ACBL. They are issued to
settle all your business transaction and customer can travel without any pocket load. It is

Page 23
 safest substitute for cash, easily refundable in case of theft and loss. Askari bank issues the
traveler cheques denomination of Rs. 10,000.

Askari traveler cheques are issued against cash cheque or debit to customer account. It is
issued on purchase agreement form and 3 copies are prepared. One is sent to head office, the
second one for record of bank and third one for the custom. No service charges are taken on
it. Any branch of ACBL can make payment of Askari traveler cheque.

CLEARING DEPARTMENT

The word clearing has been derived from the word “Clear” and is defined as “a system by
which banks exchange cheques and other negotiable instruments draw on each other within a
specified area and thereby secure payment for their client through the clearing house at
specified time” in an efficient way.

Advantages of Clearing

1. Since clearing does not involve any cash etc and the entire transaction take place through
book entries, the number of transactions can be unlimited.

2. No cash is needed as such the risks of robbery, embezzlements are totally eliminated.

3. As major payments are made through clearing, the banks can manage cash payment at the
counters with a minimum amount of cash in vaults.

4. A lot of time, cost and labor are saved.

5. Since it provides an extra service to the customers of banks without any service charger or
costs, more and more people are inclined and attracted towards banking..

Working of Clearing House

All the bank which are the member of clearing house maintain accounts with State Bank
of Pakistan by debit and credit to which the clearing settlements are made. If on a particular
day, a bank delivers cheques and other negotiable instruments worth more than the total
amount of Cheque received by it that banks accounts with State Bank of Pakistan will be
credited with the differential amount. If on the other hand the total amount of cheques and
other negotiable instruments draw on a certain bank by other bank is more than the total
amount receivable by it from other banks, then this bank’s account will be debited on that
day.The cheque delivered to the representatives of other banks for clearing are called outward

Page 24
 clearing, whereas cheques received from the representatives of other banks for payment are
called inward clearing.

Outward Clearing of the Branch

The following points are to be taken into consideration while an instrument is accepted at
the counter to be presented in outward clearing:

 The name of the branch appears on its face where it is drawn on

 It should not be stale or post dated or without date

 Amount in words and figures does not differ

 Signature of the drawer appears on the face of instrument

 Instruments is not mutilated

 There should be no material alteration if so, it should be properly authenticated

 If order instrument, suitably endorsed and last endorsee’s account being credited.

 The title of account on the paying-in-slip is that of payee or endorsee (with the exception of
bearer cheque).

If an instrument is in order then out bank’s special crossing stamp is affixed across the
face of the instrument. Clearing stamps is affixed on the face of the instruments, paying-in-
slip and counterfoil (The stamp is affixed in such a manner that half appears on paying-in-slip
and half on counterfoil). The instrument is suitably discharged, where a bearer cheque does
not required any discharge and also an instrument in favor of a bank need not be discharged.
The instrument along with paying-in-slip is retained while the counterfoil is given to the
customer duly signed. Then the following steps are to be taken:-

 The particulars of the instruments and the pay-in-slip or credit vouchers are entered in the
Outward Clearing Register.

 Serial number is given to each voucher

 The register is balanced, the credit voucher are separated from the instrument and are
released to respective departments against instrument and are released to respective
departments against acknowledgement in the register

 The schedules are arranged bank-wise

Page 25
 The schedules are prepared in triplicate, two copies of which are attached with the relevant
instrument and the third is kept as office copy

 The house page is prepared from schedules in triplicate

 The schedules and house pages are signed by the officer in charge with branch stamp

 The grand total of the house page is taken and agreed with that of the outward clearing
register

 The instruments along with duplicate and house page are sent to the Main Office

Inward Clearing of the Branch

 The particulars of the instruments are compared with the list

 The instruments are detached and sort out department wise

 The entry is made in the Inward Clearing Register (serial number, instrument number,
account number, amount of the instrument is written).

Page 26
 ACCOUNTS DEPARTMENT

STRUCTURE

BRANCH MANAGER

OPERATIONS MANAGER

INCHARGE ACCOUNTS

RECORD KEEPER

FUNCTIONS OF ACCOUNTS DEPARTMENT

Accounts department is a department which deals and checks all the activity of
all the department .It also deals in expression of finance of the Bank. Salary payment is also
one function of the Ban

CHECKING BANKS DAILY ACTIVITY

Accounts department deals and checks the entire working of the Branch; all the vouchers
that have been posted at the computer are scrutinized in accounts department.
The “End of Day” i.e. computer print is also received from the computer. The next day the
activities separated some statements from the “End of Day”. Then next day activity
separated some statements from the “End of Day”. The vouchers are sorted out
head wise. The vouchers are matched with the entries in the statements .Any abnormality if
occurs, is immediately dealt with. All the vouchers and instruction are ch eck ed
i ndi vi dual l y a gai nst t he com put er pri nt o ut s.

Page 27
 OTHER ACTIVITIES

 Preparation of daily Bank positions statement

 Payment of salaries

 Preparation of the statements

 Depreciation calculation

Page 28
 CREDIT DEPARTMENT

Credit department is one of the most important departments of the bank. Assets are
resources of any organization and “Advances” are most valuable asset of the bank. Credit
department takes money from depositors at certain rates and utilizes these funds by extending
loans at specified rate to the creditors. The difference between these two rates is the profit of
bank. So it is major source of profit. The credit decisions are carefully analyzed because
advances create risks for the bank.

CREDIT POLICY OF ASKARI BANK

Follow the Prudential regulations and other SBP directions.

 Follow the principles of good lending.

 Avoid concentration of credit in one particular sector.

 Concentrate mainly on short-term self-liquidating advances e.g. export bills advances of

maturity of one year.

 Encourage trade financing.

 Maximize yields on advances without compromising on quality/security.

 Maximize advances, which are outside the “credit ceiling” i.e. post shipment finance.
Evaluate credit proposals thoroughly, including the borrower ability to repay.

 Monitor credit on a regular and ongoing basis.

 Review credit facilities at least once every year.

 Advances/deposit ratio not to exceed 65%.

RISK ANALYSIS

The high risk gives the high return. Bank analyzes their risk on advances by applying the
five C’s.

Page 29
 CONDITION

COLLATERAL

CHARACTER RISK
CASH
ANALYSIS

TYPE OF LOANS

Askari Commercial Bank provides two types of loan that are:

1. Fund Based Loan

2. Non Fund Based Loan

FUND BASED LOAN

In this type of finance, bank actually deploys its funds and mark up is charged on it.
ACBL provide the following types of fund-based loan.

 Running Finance

It is also called “over draft” because bank provides an extra credit limit to customer
existing current account. Running finance is a secured loan because bank provides extra
credit limit against some collateral security or hypothecation security. Hypothecation is prime
security. The customer can avail this credit limit at any time of the maturity time period;
which is normally one year. But if the conduct of customer is satisfactory and customer can
avail this facility to the extended period, then this limit is roll over to next year.

 Cash Finance

Cash finance is like a running finance but it is extended against the pledged security like
inventory or stock and 25% cash margin is also charged. The pledged stock is also insured
from any insurance company and the customer also pays all the insurance and any other
security expenses. The chequebook is not issued so the customer has no fee will to debit or
credit the amount. But if customer wants to draw stock then he will deposit amount equal to

Page 30
 the stock and bank will issue delivery order in favor of customer. Mark up is charged over the
full loan amount and for whole time period of maturity.

 Term Finance

In the finance, replacement schedule of loan is mentioned along with loan amount,
time period and mark up rate. Term finance has maximum time limit of 5 year. Mark up rate
varies according to nature of offered security and time period but now a day it exists between
7 to 10 %. Replacement schedule contains monthly installment in which amount of markup
and principle (deducting adjusted amount of principle from the actual principle amount) term
finance is profitable for the bank because it generates regular income for bank.

 Term Finance DHA (Defense Housing Authority)

ACBL provide term finance its customer and especially army personnel to apply for
different schemes of DHA. The customers fill the application form of DHA and submit it
with initial deposit in ACBL. The bank provides 90% of initial deposit as loan and also
receives the processing charges. If their application is accepted then bank also provide credit
facility for the payment of remaining amount.

 Trade Finance

Trade finance is provided for short time period so it is most suitable for bank. These
generate more income for the bank due to greater revolution of money. Trade finance is of
money.

NON FUND BASED FINANCE

In this finance, no cash is involved. It is only a commitment. It is an obligation of bank

and if the customer declares default then bank is liable to make payment. The bank charges
commission in these finances in respect of markup. This facility is provided against the cash
margin and mortgage of property because bank has risk in this type of finances.

I. Letter of Guarantee (LG)

ii. Letter Of Credit (LC)

Page 31
 FOREIGN TRADE DEPARTMENT

Foreign trade department deals in:

 Foreign currency account

 Exports

 Imports

FOREIGN CURRENCY ACCOUNT

Mainly this account deals in individual, personal and companies account

Criteria for Opening Foreign Currency Accounts

There are not hard and fast rules for becoming the Foreign Currency Account holder.
Bank wants only introduction of the Client and very little about the background. I.D card is
also not necessary, if someone has; well and good, otherwise no restriction will be there for
him.

Features of Foreign Currency Accounts

 There will be legal protection for the account holders.

 According to foreign exchange rules and regulation every citizen of Pakistan, either within
the Pakistan or outside the Pakistan, can open the foreign currency account.

 Resident firms and Resident Companies including investment Banks can open Foreign
Currency Accounts.

 There will be no restriction and questioning to him about the currency, which he wants to
deposit that from where he got that money.

 No Zakat will be deducted on these accounts; no Income Tax deduction, no Wealth Tax
deduction will be there.

 These incentives reinforce and motivated the people to invest in foreign currency accounts
rather to keep the foreign currency idle.

 Foreign currency accounts can easily be transferred from one person to another, one place to
another, with in the Askari Bank Branches or in other Bank.

Page 32
IMPORT

The international trade transaction, in which one country buys goods from other country,
is called import. The import trade in Pakistan is governed by import and export Act of 1950.
Previously, the regulating body of imports was controller of Import and Export. But this
function has been shifted to Export Promotion Bureau.

Import License and Registration

The individuals and firms who desire to import goods from the foreign countries are
required to obtain import license. Import licenses are a type of artificial restraint on the
import trade of a country. To acquire import license, the importer has to submit applications
to the licensing authority. The importers can only get their merchandize cleared from the
custom authorities if they have the import license duly issued in their names. The import
licenses issued by the Import Trade Controller are required to be registered with the State
Bank of Pakistan.

Contract of Sale

After getting the license, the importer then negotiates with the exporter. When they reach
to an agreement on all terms of sale, they sign a contract. Thus contract includes all
information of terms and condition of sale.

Letter of Credit

Foreign trade payment problems are mainly solved by a letter of credit. A letter of credit
is issued by the importer’s bank. If guarantees payment to the exporter up to specified amount
of money provided the terms and conditions laid down the L/C are fulfilled.

Parties to a letter of Credit

There are four parties involved in letter of credit.

1. Account party: The buyer or the importer on whose account and request the letter of
credit is opened is known as account party or opener.

2. Issuing bank: The bank which issues or opens a letter of credit at the request of importer
is called issuing bank.

3. Exporter or seller: The seller or the party in whose favor L/C is drawn is the exporter. He
is also called beneficiary.

Page 33
 4. Negotiating bank: The paying bank in the exporter’s country, on which the draft is drawn,
is called negotiating bank or paying bank.

EXPORT

The international trade transaction in which one country sells its goods to other country is
called Export.

The controlling body of export in Pakistan is Export Promotion Bureau, it gives different
incentives to the businessmen for enhancing the exports and reducing the Balance of payment
deficit. It restricts the export of some goods and reinforces export of other.The steps involved
in import are described earlier from the importer’s point of view. The procedure of export is
same, as it can be described from exporter’s point of view. The activities, which are different,
described here.

OTHER DEPARTMENTS

CASH DEPATMENT

Cash department is the most important because it is point of contact between the bank and
the customer. The ACBL provides efficient and personalized services to their customer. This
department creates the impression of bank commitment of professionalism in its system and
procedure and to courteous and efficient customer service. So the staff of cash department is
well equipped and trained not only in technical handing of cash but also in the art of
customer.

FUNCTION OF CASH DEPARTMENT

It includes:

 Receiving cash from the customer.

 Making payment to the customers against their cheques or other payment Instruments.

 Handling cash withdrawal and deposit into the bank account with state bank Of Pakistan and
with other branches of bank.

 Ensuring proper storage safety and security of the cash in cash and in transit.

 Ensuring proper cash management and sorting out of issue able cash into the Denominations.

Page 34
 Transfer of cheques from one account to another and shift the cheques of other bank to
clearing department.

Transfer of Cheques

If one account holder wants to transfer some amount from one account to another, then
he will give the cheque favoring the other account holder and also fill the pay in slip. The
cashier after checking the details and enter in the register transfer to the officer. The officer
transfers the mentioned amount from one account to another.

Cash department has two counters

1. Cash Receipt Counter.

2. Cash Payment Counter.

Page 35
 CHAPTER NO 3
FINANCIAL ANALYSIS

Page 36
 DOCUMENTARY PROOF

Askari Bank Limited

Balance Sheet
2010 2009 2008 2007 2006
Cash and balances with 22,565,000 19,386,000 16,030,000 13,356,055 14,879,230
treasury banks
Balances with other banks 3,785,000 8,364,000 3,955,000 3,497,054 7,333,002
Lendings to financial 9,172,000 4,614,000 4,480,000 14,444,143 8,392,950
institutions
Investments 102260000 67,046,000 35,678,000 39,431,005 28,625,915

Advances 152784000 135,034,000 128,818,000 100,780,162 99,179,372

Operating fixed assets 9,988,000 9,846,000 8,266,000 5,128,428 3,810,331
Deferred tax assets – – – – –
Other assets 14,190,000 10,036,000 8,964,000 5,535,038 3,812,788
314745000 249,414,000 206,191,000 182,171,885 166,033,588
LIABILITIES
Bills payable 3,090,000 2,946,000 2,585,000 2,627,051 1,839,077
Borrowings 25,555,000 19,300,000 15,190,000 17,553,525 14,964,087
Deposits and other 255937000 205,970,000 167,677,000 143,036,707 131,839,283
accounts
Sub-ordinate loans 5,993,000 5,995,000 2,996,000 2,997,300 2,998,500
Liabilities against assets – – – – –
subject to finance lease
Deferred tax liabilities 86000 334000 13,000 471,519 736,298
Other liabilities 8,081,000 4,833,000 4,759,000 3,219,796 2,603,113
298740000 239,378,000 193,220,000 169,905,898 154,980,358
NET ASSETS 16,004,000 14,949,000 12,971,000 12,265,987 11,053,230
REPRESENTED BY
Share capital 6,427,000 5,073,000 2,004,000 3,006,499 2,004,333
Reserves 7,691,000 7,183,000 5,815,000 6,948,336 5,814,754
Inappropriate profit 702000 886000 1,800,000 2,144,810 1,799,797
14,821,000 13,142,000 9,619,000 12,099,645 9,619,066
Surplus on revaluation of 1,184,000 1,806,000 1,434,000 166,342 1,434,164
assets - net of tax
16,004,000 14,948,000 11,053,000 12,265,987 11,053,230

Page 37
 Askari Bank Limited
Profit And Loss Statement
2010 2009 2008 2007 2006
Mark-up / return / interest 27,952,000 22,587,000 18,393,000 15,143,000 12,596,921
earned
Mark-up / return / interest 17,937,000 13,554,000 10,651,000 8,686,000 6,977,313
expensed

Net mark-up / interest 10,016,000 9,033,000 7,743,000 6,458,000 5,619,608

income
Provision against non- 2,319,000 2,324,000 3,825,000 3,920,000 1,128,137
performing loans and
advances
Impairment loss on available 383,000 431,000 – – –
for sale investment
Provision for impairment in 297000 77000 1000 2,000 376
the value of investments
Provision against reverse 66000 83000 – – –
repo
Bad debts written off directly – – 247000 – –
3,064,000 2,915,000 4,073,000 3,922,000 1,128,513
Net mark-up / interest 6,951,000 6,118,000 3,670,000 2,536,000 4,491,095
income after provisions

NON MARK-UP/INTEREST INCOME

Fee, commission and 1,271,000 1,308,000 1,258,000 1,073,000 1,013,660
brokerage income
Dividend income 210000 163000 174000 137,000 109,326
Income from dealing in 13000 538000 874000 656,000 584,344
foreign currencies
Gain on sale of investments - 213000 144000 37000 2,361,000 112,474
net
Unrealized gain / (loss) on - - - - -
revaluation of investments
classified as held for trading - -2000 22000 2,000 -2,308
- net
Other income 470000 404000 343000 337,000 321,758
Total non-markup / interest 2,177,000 2,544,000 2,707,000 4,565,000 2,139,254
income
9,128,000 8,672,000 6,377,000 7,101,372 6,630,349
NON MARK-UP/INTEREST EXPENSES
Administrative expenses 7,813,000 6,996,000 5,904,000 4,790,000 3,277,353
Other provisions / write offs - - - - -
Other charges 42000 34000 11000 12,000 6,141
Total non-markup / interest 7,855,000 7,030,000 5,916,000 4,802,000 3,283,494

Page 38
expenses
1,273,000 1,632,000 461000 2,300,000 3,346,855
Extra ordinary / unusual - - - - -
items
PROFIT BEFORE 1,273,000 1,632,000 461000 2,300,000 3,346,855
TAXATION
Taxation – current year 330000 562000 17000 99,000 983,875
– prior years' - 120000 -50000 -234,000 -
– deferred - -147000 108000 -246,000 113,006
330000 534000 75000 -381,000 1,096,881
PROFIT AFTER 943000 1,098,000 386000 2,681,000 2,249,974
TAXATION
Inappropriate profit brought 834000 309000 2,145,000 1,799,979 1,617,597
forward
Profit available for 1,777,000 1,406,000 2,531,000 4,480,979 3,867,571
appropriation
Basic / diluted earnings per 1.48 1.79 0.76 6.61 7.4
share - Rupees

Page 39
 HORIZONTAL ANALYSIS

Askari Bank Limited

Balance Sheet
2010 2009 2008 2007 2006
Cash and balances with treasury 16.40% 20.94% 20.02% -10.24% 26.45%
banks
Balances with other banks -54.75% 111.48% 13.10% -52.31% 32.12%
Lending to financial institutions 98.70% 2.99% -68.93% 72.01% 17.50%
Investments 52.52% 87.92% -9.52% 37.75% 11.30%
Advances 13.15% 4.83% 27.82% 1.62% 15.35%
Operating fixed assets 1.45% 19.11% 61.18% 34.59% 19.34%
Deferred tax assets 0.00% 0.00% 0.00% 0.00% 0.00%
Other assets 41.39% 11.96% 61.95% 45.17% 40.00%
26.19% 20.96% 13.18% 9.72% 14.42%
LIABILITIES
Bills payable 4.89% 12.63% -1.60% 42.85% 39.78%
Borrowings 32.41% 27.06% -13.46% 17.30% 41.67%
Deposits and other accounts 24.25% 22.84% 17.23% 8.49% 11.00%
Sub-ordinate loans 0% 100.10% 0.00% 0.00% 0.00%
Liabilities against assets subject to 0% 0% 0% 0% -1%
finance lease
Deferred tax liabilities -74.07% 2469.00% -97.24% -35.96% 30%
Other liabilities 67.20% 1.56% 47.80% 23.69% 27.30%
24.80% 23.89% 13.72% 9.63% 13.90%
NET ASSETS 7.06% 15.25% 5.75% 10.97% 25.40%
REPRESENTED BY
Share capital 26.70% 153.14% -33.34% 50.00% 33.00%
Reserves 7.07% 23.53% -16.31% 19.50% 30.00%
Inappropriate profit -20.77% -50.78% -16.08% 19.17% 11.20%
12.78% 36.63% -20.51% 25.70% 26.70%
Surplus on revaluation of assets - -34.44% 25.94% 762.08% -88.40% 17.70%
net of tax
7.06% 35.24% -9.89% 10.97% 25.40%

Page 40
INTERPRETATION

In horizontal analysis I consider very preceding year of the current year as a base .In
balance sheet, management views the three major aspects of the organization

 Assets
 Liabilities
 Equity

The total assets of Askari Bank in 2006 is 14.42% .In 2007 it suddenly decrease to 9.72%
because of negativity in accounts like cash and balance with other banks. Then in 2008 it
slightly increase to the 13.18% and after that till 2010 it shows upward trend.

Total liabilities of Askari Bank in 2006 is 13.90%.This ratio decreased to the 9.63% in
2007 because of increase in subordinate loans .In 2008 it again increase to 13.72%.Now from
2008 to 2010 it indicate the increasing trend.

Total stock holder equity of Askari bank in 2006 is 25.40% and in 2007 this ratio further
decrease to 10.97%.In 2008 it becomes negative. After that trend shows the positive trend but
not up to the satisfactory level.

Page 41
 HORIZONTAL ANALYSIS

Askari Bank Limited

Profit And Loss Statement
2010 2009 2008 2007 2006
Mark-up / return / interest earned 23.75% 22.80% 21.46% 20.20% 43.50%
Mark-up / return / interest expensed 32.34% 27.26% 22.62% 24.48% 64.00%
Net mark-up / interest income 10.88% 16.67% 19.90% 14,91% 25.00%
Provision against non-performing 0% -39.24% -2.42% 247.49% 78.20%
loans and advances
Impairment loss on available for sale -11.37% 0% -66.15% 0.00% 0%
investment
Provision for impairment in the 295.71% 7600% -50% 299.20% 7.20%
value of investments
Provision against reverse repo -20.48% 0% 0% 0% -101.00%
Bad debts written off directly 0% 100% 0% 0% 0%
5.11% -28.43% 3.85% 247.51% 87.50%
Net mark-up / interest income after 13.61% 66.70% 44.72% -43.53% 15.15%
provisions
NON MARK-UP/INTEREST
INCOME
Fee, commission and brokerage -2.83% 3.97% 17.21% 5.84% 20.88
income
Dividend income 28.89% -6.32% 26.65% 25.38% 113.76%
Income from dealing in foreign -97.58% -38.44% 33.20% 12.22% 64.04%
currencies
Gain on sale of investments - net 47.92% 289.19% -98.44% 1999.30% 12.01%
Unrealized gain / (loss) on -100% 109.09% 1195.37% 174.87% -296.56%
revaluation of investments classified
as held for trading - net
Other income 16.34% 17.78% 1.88% 4.67% 55.57%
Total non-markup / interest income -14.43% -6.02% -40.70% 113.40% 37.78%
5.26% 35.99% -10.20% 7.10% 21.59%
NON MARK-UP/INTEREST
EXPENSES
Administrative expenses 11.68% 18.50% 23.27% 46.14% 26.44%
Other provisions / write offs 0% 0% 0% 0% 0%
Other charges 23.53% 209.89% -8.82% 96.23% 235.20%
Total non-markup / interest 11.74% 18.83% 23.20% 46.23% 26.58%
expenses
-22.00% 254.01% -79.93% 46.23% 235.20%
Extra ordinary / unusual items 0% 0% 0.00% 0% 0%
PROFIT BEFORE TAXATION -22% 254.01% -79.93% -31.25% 17.06%
Taxation – current year -41.00% 3205.88% -82.37% -89.98% 18.71%

Page 42
– prior years' 100% 340% -78.62% 100% 100%
– deferred -100% -336.10% -143.85% -317.52% -42.50%
-38.20% 612.00% -119.71% -134.75% 31.03%
PROFIT AFTER TAXATION -14.12% 184.46% -85.59% 19.15% 11.27%
Inappropriate profit brought 169.90% -85.60% 19.15% 11.27% 5.14%
forward
Profit available for appropriation 26.39% 44.45% -43.51% 15.86% 8.62%

INTERPRETATION

In horizontal analysis of profit and loss account the net markup interest income in 2006
was 25.00%, in 2007 it decrease to 14.91% and then slightly increase in 2008 and 2009, But
after that in 2010 it again decrease to the 10.88%.

Profit after taxation in 2006 was 11.27% ,that increase up to the 19.15% in 2007.But in
2008 it sharply decline and have a negative balance of 85.59%.After that in 2009 it have a
positive balance and this positive balance again becomes negative in 2010.

Page 43
 VERTICAL ANALYSIS

Askari Bank Limited

Balance Sheet
2010 2009 2008 2007 2006
Cash and balances with treasury banks 7.17% 7.77% 7.78% 7.33% 8.96%
Balances with other banks 1.20% 3.35% 1.92% 1.92% 4.41%
Lending to financial institutions 2.91% 1.85% 2.17% 7.93% 5.05%
Investments 32.49% 26.88% 17.30% 21.64% 17.24%
Advances 48.54% 54.14% 62.48% 53.32% 59.73%
Operating fixed assets 3.17% 3.95% 4.00% 2.62% 2.29%
Deferred tax assets 0% 0% 0% 0% 0%
Other assets 4.51% 4.02% 4.00% 3.04% 2.29%
100.00% 100% 100% 100% 100%
LIABILITIES
Bills payable 1.03% 1.23% 1.34% 1.44% 1.11%
Borrowings 8.55% 8.06% 7.86% 9.64% 9.00%
Deposits and other accounts 85.67% 86.46% 86.78% 78.52% 79.40%
Sub-ordinate loans 2% 2.50% 1.55% 1.64% 1.80%
Liabilities against assets subject to finance 0% 0% 0% 0% 0%
lease
Deferred tax liabilities 0% 0% 0% 0% 0%
Other liabilities 2.71% 2.12% 2.46% 1.77% 1.56%
100% 100% 100% 100% 100%
NET ASSETS 5.36% 6.20% 6.71% 7.72% 7.13%
REPRESENTED BY
Share capital 40.16% 33.94% 18.13% 1.65% 1.20%
Reserves 48.06% 48.05% 52.61% 3.81% 3.50%
Inappropriate profit 4.39% 5.93% 16.29% 1.18% 1.10%
92.61% 87.92% 87.03% 98.64% 87.02%
Surplus on revaluation of assets - net of 7.40% 12.08% 12.97% 1% 1%
tax
100% 100% 100% 100% 100%

Page 44
INTERPRETATION

The total asset have great increasing trend from 2006 to 2010.Approximately advances
are making the 50% of total assets and showing significant impact on total assets .Other
assets are very much less then advances.

Liabilities in term of bill payables is almost negligible of total liabilities .Almost 85% of
liabilities consist of deposits of customers .In equity there is fluctuation lies from 2006 to
2010,In year 2007 it is 98.64% and then year 2008 and 2009 indicate the decreasing trend
that is 87%. After that in 2010 its increase to some extends as compare to following years.

VERTICAL ANALYSIS

Askari Bank Limited

Profit And Loss Statement
2010 2009 2008 2007 2006
Mark-up / return / interest earned 100% 100% 100% 100% 100%
Mark-up / return / interest expensed 64.17% 60.00% 57.91% 57.35% 55.39%
Net mark-up / interest income 35.835 40.00% 42.00% 42.64% 44.61%
Provision against non-performing 8.30% 10.29% 20.79% 25.89% 8.96%
loans and advances
Impairment loss on available for sale 1.37% 1.91% 0% 0% 0%
investment
Provision for impairment in the value 1.06% 0% 0% 0% 0%
of investments
Provision against reverse repo 0% 0% 0% 0% 0%
Bad debts written off directly 0% 0% 1% 0% 0%
10.96% 12.91% 22.14% 25.90% 8.96%
Net mark-up / interest income after 24.87% 27.91% 19.95% 16.75% 35.65%
provisions
NON MARK-UP/INTEREST INCOME
Fee, commission and brokerage 4.55% 5.79% 6.84% 7.09% 8.05%
income
Dividend income 1% 1% 1% 1% 1%
Income from dealing in foreign 0% 2.38% 4.75% 4.33% 4.64%
currencies
Gain on sale of investments - net 1% 6.38% 0% 15.59% 1%
Unrealized gain / (loss) on revaluation 0% 0% 0% 2.22% 0%
of investments classified as held for
trading - net
Other income 1.68% 1.79% 1.87% 2.22% 2.25%
Total non-markup / interest income 7.78% 11.26% 14.71% 30.15% 16.98%

Page 45
 32.66% 38.39% 34.76% 46.89% 52.63%
NON MARK-UP/INTEREST EXPENSES
Administrative expenses 27.95% 30.97% 32.10% 31.63% 26.02%
Other provisions / write offs 0% 0% 0% 0% 0%
Other charges 0% 0% 0% 0% 0%
Total non-markup / interest expenses 28.10% 31.12% 32.16% 31.71% 26.07%
4.55% 7.23% 2.51% 15.91% 26.02%
Extra ordinary / unusual items 0% 0% 0% 0% 0%
PROFIT BEFORE TAXATION 4.55% 7.23% 2.51% 15.91% 26.02%
Taxation – current year 1.18% 2.49% 0% 0% 7.81%
– prior years' 0% 1% 0% -1.55% 0%
– deferred 0% -1% 1% -1.62% 1%
1.18% 2.36% 0% -2.52% 8.71%
PROFIT AFTER TAXATION 3.37% 4.86% 2.10% 17.70% 17.86%
Inappropriate profit brought forward 2.98% 1.37% 11.66% 42.64% 12.84%
Profit available for appropriation 6.36% 6.22% 13.76% 29.59% 30.70%

INTERPRETATION

In the vertical analysis of the Askari Bank of Pakistan by considering the markup interest
income as a key figure to analyze the item of income statement the total interest expense
shows the 64.17% of the total interest and it shows a stable increasing trend in previous 5
years. Administrative expenses stability showing the efficient operational management of the
Askari Bank.

Page 46
 RATIO ANALYSIS

To evaluate a firm’s financial condition and performance, the analyst needs to

perform “ch eck ups” on va ri ous aspe ct s of a fi rm ’s financial health .It involves
methods of calculating and interpreting financial ratios to analyze monitor the firm’s
performance.

RATIO

“A ratio is a simple mathematical expression of the relationship of one item to another”

IMPORTANCE OF RATIO

Ratios are particularly important in understanding financial statements, because

they permit us to compare information from one financial statement with
information from another financial statement.There ratio analysis which I have discussed in
report regarding Askari Bank is as follows:

LIQUIDITY RATIO

 Net working capital.

 Current ratio

LEVERAGE RATIO

 Debt Ratio
 Equity Ratio
 Timely Interest Earned

PROFITABILITY RATIO

 Gross Profit Margin

 Profit Margin
 Return on Asset
 Return on Equity

MARKET RATIO

 Earnings Per Share.

Page 47
 LIQUIDITY RATIO

Liquidity ratios of the firm is measure its ability to satisfy its short term obligations to
evaluate the risk associate if they were to invest and transact with the company. It shows the
firms overall financial position.

(a) Net working capital:

This ratio shows in replacement of current assets how much liabilities are present. If it
shows positive answer and assets are greater than liabilities then it is beneficent for the
company.

Net working capital = current assets – current liabilities

Years 2010 2009 2008 2007 2006

Net Working Capital 6877000 10118000 12971000 12265987 11053230

14000000

12000000
net working capital

10000000

8000000

6000000

4000000

2000000

0
2010 2009 2008 2007 2006
years

Interpretation:

From the trend of the net working capital we can say that in 2008 it show the highest
value which means it has more assets in this year but after that it show the decreasing trend.
According to this ratio higher the value of it betters the condition of the business.

Page 48
(b) Current ratio:
The concept behind this ratio is to ascertain whether the company short -term assets are
readily available to pay off its short-term liabilities. If it gives ratio more than one then it is
fruitfully otherwise not.

Current ratio= current assets/ current liabilities

Years 2010 2009 2008 2007 2006

Current Ratio 1.24 1.45 1.80 1.55 1.80

2
1.8
1.6
current ratio %

1.4
1.2
1
0.8
0.6
0.4
0.2
0
2010 2009 2008 2007 2006
years

Interpretation:

This ratio tell about the liquidity of the firm and higher the value of current ratio more
liquid the firm is so in this 2006 and 2008 both show the same amount of current ratio so we
can say that at this point both are more liquid .This graphical representation shows that there
is increase at start but after 2008 it show decreasing trend. So we can say that now bank is
now not as much liquid as compared to 2008.

LEVERAGES RATIO

These ratios help to measure the financial contribution of the owners compared with that
of the creditors and also the risk of debt financing. Basically leverage ratios show that from
minimum input how we are able to generate maximum output. Following are the all leverage
ratios.

Page 49
(a) Debt Ratio:
The debts ratios measure the proportion of the total assets financed by the firm’s
creditors. If this ratio is high then people are able to earn more money otherwise low income
can be generated.

Debt ratio= total debt/ total assets

Year 2010 2009 2008 2007 2006

Debt Ratio .95 .96 .94 .93 .93

0.965
0.96
0.955
0.95
debt ratio %

0.945
0.94
0.935
0.93
0.925
0.92
0.915
2010 2009 2008 2007 2006
years

Interpretation:

Basically this ratio shows that higher the debt ratio more people use money to generate
profit. And when focus on this trend then we can say that it show increasing trend from 2006
to 2009 but in 2010 it show decrease as compared to 2009 .This difference is not as much
large and can be easily covered. So we can say that from 2006 to 2009 it show increasing
trend.

(b) Debt Equity Ratio:

This ratio is significant measure of solvency.Since a high degree of debt in the capital
structure may make it difficult for the company to meet interest charges and principal
payment at maturity.

Debt equity ratio= total liabilities/ common equity

Page 50
 Year 2010 2009 2008 2007 2006

Debt Equity Ratio 20.16 18.22 16.05 14.04 16.11

25

20
debt equity ratio %

15

10

0
2010 2009 2008 2007 2006
years

Interpretation:

From the graph of the debt equity ratio we can say that there is a fluctuation lies. In year
2006 debt equity ratio is 16.11% but in 2007 it decrease to 14.04%,In 2008 it again increase
as compared to 2007 but if we start from 2007 then we can say that it show increase and in
other word we can say that trend is positive.

(c) Time Interest Earned Ratio

The time interest earned ratio, some time called interest coverage ratio, measure the
firm’s ability to make contractual interest payment. Higher the value better will be the firm to
pay its debts.

Time interest earned ratio= EBIT/ interest expense

Year 2010 2009 2008 2007 2006

Time interest earned ratio .39 .45 .35 .29 .64

Page 51
 0.7
time interest earned ratio
0.6

0.5

0.4

0.3

0.2

0.1

0
2010 2009 2008 2007 2006
years

Interpretation:

It graph indicate that there is a highest value in 2006 and after that it show sudden
decrease in 2007 and after that it show increase and this increase continue till 2009 .In
2010 it again start to decrease.

PROFITABILITY RATIOS

These ratios are intended to measure the end result of the business operations .Higher the
value firm will be better to do work and if the value is low then cant able to fulfill the
demands.

(a) Gross Profit Margin

The gross profit margin measures the percentage of each sales $ remaining after the firm
has paid for its goods. Higher gross margin ratio is better than lower ratio.

Gross profit margin= gross profit/ net sales

Year 2010 2009 2008 2007 2006

Gross profit margin 36 40 42 43 45

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 50
45
gross profit margin %

40
35
30
25
20
15
10
5
0
2010 2009 2008 2007 2006
years

Interpretation:

Gross profit shows that profit is continuously decreasing with very little ratio .It shows
the negative trend but with the little fluctuation.

(b) Profit Margin:

Profit margin measures the percentage of each dollar sale remaining after all the cost and
expenses, including interest, taxes, and preferred stock dividend, have been deducted. Same
as above its higher value is better and lower value show negative condition.

Profit margin =net income / net sales

Years 2010 2009 2008 2007 2006

Profit margin 4 5 2.09 17.7 17.8

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 20
18
16
profit margin %

14
12
10
8
6
4
2
0
2010 2009 2008 2007 2006
years

Interpretation:

Profit margin measures the percentage of each sale rupees remaining after all the cost and
expenses including interest, taxes, and preferred dividend have been deducted. Profit margin
show the poor condition from this we can say that as compared to 2006 and 2007 there is
huge reduction in percentage of preceding years.

(c) Return on Total Assets (ROA)

Return on assets often called the return on investment, measure the overall effectiveness
of management in generating profit with its available assets. Higher the value better will be it
condition.

Return on total assets= net income / total assets

Year 2010 2009 2008 2007 2006

Return on total asset .30 .44 .20 1.5 1.36

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 1.6
1.4
return on assets %

1.2
1
0.8
0.6
0.4
0.2
0
2010 2009 2008 2007 2006
years

Interpretation:

It measure the firm’s ability to utilize the assets to create profit by comparing the profits
with the assets that generate the profit .The graphical representation shows that in first two
years there is increasing trend but after that it shows reduction and that trend of decreasing
amount is continue. In 2009 bank try to improve this situation and due to that percentage also
increase but again in 2010 it show decrease.

(d) Return on Equity (ROE)

Return on common equity measures the return earned on the common stockholders’
investment in the firm. Generally, the higher this return, the better off is the owner.

Return on equity= net income/ common equity

Years 2010 2009 2008 2007 2006

Return on Equity 6.36 8.35 3.06 22.99 22.60

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 25

20
return on equity %

15

10

0
2010 2009 2008 2007 2006
years

Interpretation:

It is the one of the most important ratio that is use to check the efficiency and
performance of the firm. This shows that how well that firm acceptance of investment
opportunities and effective expense management. It has almost same trend as return on assets
has.

MARKET RATIOS

Market ratios relate the firm’s marker value, as measured by its current share price, to
certain accounting values. Following are the market ratio that we calculate.

(a) Earnings per Share

The firms earning per share is generally of interest to present or prospective stockholder
and management.EPS represents the number of dollars during the period on behalf of each
outstanding share of common stock.
Earning per shares= net income / common stock outstanding

Year 2010 2009 2008 2007 2006

Earnings per share .27 .27 .62 1.49 1.93

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 2.5

2
earning per share %

1.5

0.5

0
2010 2009 2008 2007 2006
years

Interpretation:

It is generally of interest to present or prospective stock holders and management. It

decrease from 1.49% from 1.93% from 2006 to 2007.This decreasing trend is continue till
2010.This trend also shows huge decrease in 2008.

Page 57
 SWOT ANALYSIS

SWOT analysis is a strategic planning method that is 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 achieve that
objective. Such an analysis is very important for the management in retaining the strength,
overcoming the weaknesses, capitalizing over the emerging marketing opportunities, and
curving ways to successfully tackle with the threats. During six weeks of my stay at Askari
Bank Sahiwal I have come across the following SWOT analysis of the bank.

STRENGTHS WEAKNESSES

 Network  Recruitment System

 Shortage of branches
 Electronic fund transfer
 Low job satisfaction
 ATM Network
 Lack of specification
 Provide high quality products  Centralization.

 Secure Bank

 Customer oriented bank

OPPORTUNITIES THREATS

 A large amount of foreign investment  Economic conditions

is attracted.  Stiff competition

 Strong potential for growth.  Less attractive rate of return

 Threat of war
 Steady increase in Customer Deposits
 Less Experienced staff
 Branches in Remote Areas.

 Islamic Banking.

 Sharp increase in import and export.

 Overseas Operations.

Page 58
STRENGTHS

Network

Network is the major strength AKBL has. AKBL is a Pakistan Bank with the most
extensive and comprehensive global network that open up the new opportunities in near
future. Their up graded technological infrastructure is also important which provide the
uniform service system across the Bank’s network that will allow much higher level of
efficiency and customer services.

Electronic Fund Transfer

Askari Bank Limited has got a well-developed on-line system in most of its branches.
Remittance Department is working very efficiently in transferring the funds of people due to
this system.

ATM Network

The bank has also started ATM facility in most of its branches. 24-hour banking is new
trend in Pakistan and ACBL has also taken apart in this trend.

Electronic Banking

The revolution in the banking in the form of electronic banking operation have opened
avenues of the effective ,efficient and quick services saving the time and cost of the
customers and fortunately AKBL is among those few banks who are already reaping the
benefits of electronic transactions.

Ethical Concern

One distinctive feature of the bank is that it is the only bank working for the welfare of
army officers, which was established by Army Welfare Trust.

Providing High Quality Products

The productivity of the bank is very good. Bank is providing a high quality service to its
customers.Askari Bank developing and delivering the most innovative products, manage
customer experience, deliver quality services that contribute to brand strength, and establish
the competitive advantage.

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Facilitate the Import and Export

AKBL have strength that most of the imports & exports which are done in Sahiwal are
handled by ACBL Sahiwal.

Secure Bank

The online banking facility provides less chances of fraud. Because the receipts of any
online transaction are given to customers at the time transaction takes place and also can be
checked any time. To make it much more secure the NIC copy of the person is also submitted
at the time of online transaction but those customers who also have their accounts in the same
branch do not need to submit the copy of NIC as their copy is already attached with their
account opening forms.

Customer Oriented Banking

The priority banking centers of the bank offer an unmatched where the customer receives
highly privileged services in highly elegant environment. It gives the chance of experiencing
new standards in banking. Designed especially for those who appreciate only the finest thing
in life, Priority Banking offers the very highest levels of personalized banking to match
customer’s unique status.

WEAKNESSES

Shortage of Branches

ACBL has lesser number of branches as compared to many other branches. Due to this
problem, army officers can not avail the benefits of their own bank.

Recruitment System

The human resource department is not performing the function of selection and
recruitment very effectively. Selection process is not on merit due to which competent
persons cannot be selected.

Payment of Utility Bills

There is no facility offered by AKBL for payment of utility bills but it is possible on NBP
ATM.

Page 60
 Shortage of ATM’s

ATM’s, despite of AKBL’s extensive and comprehensive network is still unavailable in

many of the branches. Similarly there are some profitable geographical locations where there
are prospects of increased profitability for example an ATM at Murree means new segment
for AKBL.

Low Job Satisfaction

Understanding and effective management of human resources is most difficult challenge

faced not only by the bank but by all the organizations. Even though the people have been
sacrificed in the new organization development, it is becoming clear that the true lasting
competitive advantage comes through human resources and how they managed.

Lack of Specification

This famous and useful concept given by Adam Smith in 1776 seems to be missing in the
bank. The employees are constantly rotated from one job to another job of totally different
characteristics in the view of giving them the know how the working of all the departments
.But I think this is not a very good tactics used by management. Otherwise the situation might
be like this ‘jack of all and the master of none.’

Centralization

There is high degree of centralization in the Bank. Almost all the decision-making is in
the hand of upper management, But the centralization is effective up to the certain level
otherwise it becomes in efficient and at a time costly too.

OPPORTUNITIES

These are positive external environmental factors effecting the organization

 It deals in bulk business.

 A large amount of foreign investment is attracted.

 Strong potential for growth.

 Steady increase in Customer Deposits

 Branches in Remote Areas.

 Islamic Banking.

 Sharp increase in import and export.

Page 61
THREATS

Stiff Competition

ACBL has many competitors, which are continuously increasing its products and
marketing aggressively. It may cause its customers to shift to competitors.

Less Experienced Staff

Majority of the staff working in bank branch is quite young and inexperienced. Some
other banks have competent and experienced workforce, which is also a threat for ACBL.
Because human resource is the most valuable resource.

Less Attractive Rate of Return

Today the Bank faces the considerable competition in attracting deposit from individuals
or small investors. In contrast the Govt. of Pakistan national saving scheme offers attractive
rate of return (approx. 16 to 18 percent annually) on 10-15 year fixed accounts, which bank
finds difficult to match.

Economic Conditions

The economical condition of Pakistan is very unstable. Economical circumstances that

confronted the banking sector in particular and the country in general, Askari Bank has been
still highly profitable. But, the facts can’t be denied and there might be an adverse impact of
such situation.

Threat of War

Pakistan India relations often create a war danger. This chance of war may cause army
officer and their families to increase the frequency of withdrawals, which would decrease
deposits.

Page 62
 PEST ANALYSIS

Political Economical

 Privatization policy  Staff cost

 Political inference  Operating cost
 High taxation  Bad debts

Social Technological

 Inadequate human resources  Inadequate communication

 Defaulter’s lobby  Inadequate computer facilities
 Adequate empowerment  Inadequate IT trainings

Page 63
 CHAPTER NO 4
LEARNING IN AKBL

Page 64
 APPLICATION OF CLASS ROOM LEARNING IN AKBL

Here my aim to see the application of bookish knowledge and its practical
implementation. Whatever I have learnt in class room lectures is practically implemented in
the organization. I have studied many courses like Financial Accounting, Business law,
Financial Management, Management, Business Finance, Marketing Management etc. These
are subject facilitate me a lot in order to understand the operations of banking sector.

 During my internship I learnt how to apply theoretical concepts of the public relationship and
interact with customer in a real-time environment.
 As I have studied about the depreciation concept in accounting which facilitates me a lot
during working in bank
 The course of Business Finance helps me in order to understand the financial procedure and
associate the transaction with respect to the currency rotation, loan, salary and other peculiar
bank services.
 Realization the work methodology of the Bank as learned in theories related to the
organization Behavior and management.
 As I have studied about the reports in accounting, these reports generated by the accounts
department on the daily, weekly, monthly ,semi-annually, and yearly basis. Without any
classroom learning it is neither necessary nor possible to get acquainted by all of these reports
in a very short period of time.
 As I have studied about the type of cheques in Business Law and Money Banking and
Finance , during my internship I have seen these type of the cheques in remittance
department .So I may conclude that whatever I have learned in my class room is practically
implemented in my organization.

Page 65
 INTERNSHIP EXPERIENCE

FIRST WEEK

They were assigned me to work with Sir Sohail who deals with Accounts Opening
Department. In this department I learned a lot of things. Sir Sohail told me different account
names and their codes. He also guides me regarding the procedure of opening the account.
Here I learn how to fill a deposit slip, online slip, and credit card slip, online payment transfer
slip, get an understanding regarding dealing with customers, and also get an idea about the
minimum amount that is require in order to open different accounts.

SECOND WEEK

They assigned me work in Clearing Department. Here my immediate boss was Sir
Sharjeel. Every transaction which takes place recorded in the computer .Sir Sharjeel was
performing these activities. I was not allowed to use software but I observed all the functions
performed by him. In this week I entered the cheque lodge for inward clearing in clearing
register as their cheque number, account holder name, cheque amount and bank name amount
to be paid.

THIRD WEEK

In this week I worked for IBC (inter bill clearing).IBC means cheque lodge for clearing
from other city. Here I have learnt about different type of stamps, clearing process, about
NIFT and the time duration which is require in clearing of cheques of different location.

FORTH WEEK

In this week I worked in Foreign Exchange Department .Here my immediate boss was
Miss Sobia, Firstly she told me

 The brief introduction about the import and export.

 Necessary requirement about the letter of credit.

 What documentation require for import and export?

FIFTH WEEK

In this week firstly they assigned me work for Remittance Department. Here I learnt
about demand draft and pay order.

Page 66
 SIXTH WEEK

Sir. kashif was credit officer who explained me the procedure of advances. I observed
how the application is processed. I think it sufficient to know the procedure.
In this week I worked in Credit Department and learned about

 How to prepare a limit?

 How to analyze the financial data?

 What are requirement for loan?

 How to calculate the markup rate?

During my internship I deal with many customers and employees, this was a great
experience to learn

 How to deal with customers.

 How to work under pressure i.e. in rush hours.
 How to manage an office.
 My communication skills were improved.
 I observed some signs of mismanagement which I think can be removed if branch manager
take more responsibility.

Page 67
CHAPTER NO 5

Page 68
 RECOMMENDATIONS

As such there is no need of any improvement as Askari Commercial Bank is one of the
leading banks of the country and upholds its name but still I have a few suggestions in my
mind which I think my duty to mention.

After spending six weeks at different departments of the bank, interacting with
employees, getting their views, observing the organization structure and design, I have come
up with the following suggestion that I in my view will definitely improve the few
weaknesses observed in bank by me and enable the bank to compete with other banks
efficiently and effectively.

 In any organization we have to work like a group as a whole. The attitude of the one
employee can cause tension in the whole environment so it is suggested that they should
work as a team and co-operate with each other as well as with internees for better working
environment.

 They should either make a schedule for the internees or the rotation time period be reduced in
those department, which have less work for internees. Because during the internship the
internees come here to learn and know about the working of the organization. They should try
to tell as much to the internees as possible. So that they can learn how they have to work in
an organization when they get the job. Even if they get job in any other organization they
know how working in the organization goes on.

 Askari Bank should properly advertise and communicate to public about the services
provided by it, so that more customers will be attracted.

 The higher authorities should form team based management rather than centralized
management. It would result in improvement in uplifting the morale of employees.

 Under no circumstances cheque book should be given to customer if the account formalities
are in completed.

 The Bank should emphasize much on computer technology. Like other B anks,
AKBL should enhance its on-line services. Bank, also should concentrate on E-Banking and
use of ATM. Moreover, Bank should also emphasize on enhancing its website information.

 The important problem ACBL Sahiwal branch face is the number of employees working in
the bank. The number of employees are very low due to this problem the distribution of work
is also not right. Some person has more burden of work while some have fewer burdens. So
Page 69
 the overall working efficiency of the bank is not good. So the ACBL Sahiwal Branch has
need of good, honest, skilled young employees who can increase the efficiency of the bank.

 Marketing department is very active but the feedback or the follow up of the customers
should be improved.

 As everything is computerized in AKBL, the person should be properly trained in computer

system.

 Askari Bank should develop the fair compensation policies. As the wages of the employees
are quite low as compare to their effort. So in order to enhance the morale there is need to
increase their salaries.

Page 70
 IF I WERE THE MANAGER

If I were the manager of AKBL Bank I would strive to:

 Devise a methodology to ensure quality work within my branch by instituting an

environmental of continual learning through daily useful lectures based on latest banking
trends and sharing of experience with my employees to enlighten and broaden their working
horizon.
 Create a friendly atmosphere between customers and workers and place some newspaper and
magazines to entertain the customers who are waiting for their turn.
 Now a day’s human resource is to be considering one of the important assets of the
organization, so in order to retain and motivate the productive workforce I have designed the
employment satisfaction survey on continuously basis. In order to measure the degree of the
employment satisfaction, and also observe those factors that decreases the employee morale
and tries to overcome those issues.
 Provide the bank’s employees with my idea of enhancing individual’s capacity and capability
through assimilation of Total Quality Management and Six Sigma Technique.
 I must ensure that all the Selection of employees on merit
 Selection of capable employees.
 Develop Attractive salary package for motivation of employees. Give bonuses to efficient
employees so that they should remain motivated and perform their job in a good manner.
 Make a list of my bank’s 100 largest customers so as to provide them with certain incentives
and privileges, remaining within the bank’s rules and regulations.
 Order to make a list of customer complaints that occur the previous day. This will improve
the efficiency of workers to satisfy the customers
 To train and develop the future management of the bank.
 Every employee must have certain set of clearly defined duties.
 I will try to create effective communication at all levels of the organization.
 I will follow the strategy to “earn profit by satisfying the need of all stakeholders”.
 I will try to retain best performing employee by keeping in view this philosophy “Employee
can be best competitive advantage”.
 I will set up a specific schedule for internee for their rotation in different department.

Page 71
 I will conduct meeting to return employees and will advice them to “treat clients as your
bosses and stay in touch with them”.
 Being a manager of bank I will recommend that IT drawbacks in overall system of the bank
should be addressed to make it at par with ever changing modernization and advance
technology.
 To ensure the gender equality in bank and to benefit from their capabilities, I would endeavor
to employ more lady workers in various sections of the bank.

Page 72
 REFERENCES

 Annual report Askari Bank

 Senior employees of Askari Bank that include Sir Saeed Malik, Sir Saeed Qayani, Miss Sobia
and Sir Kashif.
 Manuals of Askari Bank credit department.

 www.askaribank.com.pk

 www.altavistaq.com

 www.pakistanibanks.com

 www.google.com

 www.findfast.com

 www.businessrecorder.com

Page 73
ANNEXURES

Page 74