Executive Summary

HBL was the first commercial bank to be established in Pakistan in 1947. Over the years,
HBL has grown its branch network and become the largest private sector bank with over
1,500 branches and 1,300 ATMs across the country and a customer base exceeding five
million relationships.HBL Pakistan's largest bank with an extensive network of over 1500
branches and presence in over 25 countries around the world. The Government of Pakistan
privatized HBL in 2004 through which AKFED acquired 51% of the Bank's shareholding and
management control.
In this report we put almost all necessary information about HBL. We officially visit HBL
(Bahawalnagar Main Branch) and collect meaningful information from the staff. We gathered
information from internet also. We take start with precise history of the bank. Like HBL
established operations in Pakistan in 1947 and moved its head office to Karachi. Its first
international branch was established in Colombo, Sri Lanka in 1951 and Habib Bank Plaza
was built in 1972 to commemorate the bank’s 25th Anniversary.
Mission and vision are also described briefly and market share of HBL is also mentioned in
report. HBL holds the second largest share of the country's deposits having a market share of 21
percent. Values are the fundamental principles that define HBL culture and are brought to life
in our attitudes and behavior. The main objectives of HBL are also mentioned.

Advances and Loans and their detail is also mentioned in the report. The main purpose of
report means HBL Small Business finance and HBL Business Loan, their features,
requirements and interest rate etc everything is mentioned in extension. E banking of HBL
and purpose of giving loans is described as well.

Project financing, home financing and car financing and all essential information of them is
described in latter part of report. Trade power of HBL and products and Services are given in
the end of the report.

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 History of HBL

HBL established operations in Pakistan in 1947 and moved its head office to Karachi. Our
first international branch was established in Colombo, Sri Lanka in 1951 and Habib Bank
Plaza was built in 1972 to commemorate the bank’s 25th Anniversary.

With a domestic market share of over 40%, HBL was nationalized in 1974 and it continued to
dominate the commercial banking sector with a major market share in inward foreign
remittances (55%) and loans to small industries, traders and farmers. International operations
were expanded to include the USA, Singapore, Oman, Belgium, Seychelles and Maldives and
the Netherlands.

On December 29, 2003 Pakistan's Privatization Commission announced that the Government
of Pakistan had formally granted the Aga Khan Fund for Economic Development (AKFED)
rights to 51% of the shareholding in HBL, against an investment of PKR 22.409 billion (USD
389 million). On February 26, 2004, management control was handed over to AKFED. The
Board of Directors was reconstituted to have four AKFED nominees, including the Chairman
and the President/CEO and three Government of Pakistan nominees.

At present the Bank operates through one central and 23 Regional Offices and 1439 branches,
all over Pakistan. The president and Executives Committee look after the affairs of the Bank.
Each Regional Head Quarter is headed by a Chief Executive and assisted by General
Manager Operations and General Manager Support Services. The Regional Head Quarter
controls the branches in their area. Overseas operations consist of 65 main branches, two
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affiliates, two representative offices and two subsidiaries. President, from Head Office at
Karachi controls the officers of the Bank with the help of the senior management.

HBL VISION AND MISSION STATEMENT

Our brand identity is the outward expression of what they stand for as an organization. This is
summarized in our vision, mission and is supported by our values.

VISION
“Enabling people to advance with confidence and success”

MISSION
To be recognized as the leading financial institution of Pakistan and a dynamic international
bank in the emerging markets, providing our customers with a premium set of innovative
products and services, and granting superior value to our stakeholders – shareholders,
customers and employees.

“To make our customers prosper, our staff excel and create value for shareholders”

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MARKET SHARE:

HBL holds the second largest share of the country's deposits having a market share of 21 per
cent. Of the deposits held by local branches over 89 per cent is local currency. In 1999 HBL
deposit base stood at Rs251 billion, versus Rs239 billion in 1998. During 1999 there was a
growth of 3.5 per cent in industry deposits. HBL's deposits increased by 5.5 per cent which is
significant given the deposit base shrinkage of Rs1 billion on account of the carry over
impact of the May 1998 decision to freeze foreign currency deposits (Rs6 billion) and the
July 1999 discontinuation of HBL's Crorepati Rupee Deposit Certificate" (Rs5 billion)

VALUES OF HBL

Values are the fundamental principles that define HBL culture and are brought to life in our
attitudes and behavior. It is our values that make us unique and unmistakable. Our values are.

 Excellence.
 Integrity.
 Customer Focus.
 Meritocracy.

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  Progressiveness.

Excellence:
This is at the core of everything they do. The markets in which they operate are becoming
increasingly competitive, giving our customers an abundance of choice. Only through being
the very best - in terms of the service they offer, their products and premises - can they hope
to be successful and grow.

Integrity:
For them, integrity means a synergic approach towards abiding their core values. United with
the force of shared values and integrity, they form a network of a well-integrated team. They
are the leading bank in Pakistan and their success depends upon trust. Their customers and
society in general - expect them to possess and steadfastly adhere to high moral principles
and professional standards

Customer Focus:
They understand fully the needs of their customers and adapt their products and services to
meet them. They always strive to put the satisfaction of their customers first.

Meritocracy:
At every level, from selection to advancement, they have designed a consistent system of
human resource practices, based on objective criteria throughout all the layers of the
organization. They are, therefore, able to achieve a specific level of performance at every
layer of the organization. They believe in giving opportunities and advantages to their
employees on the basis of their ability. They believe in rewarding achievement and in
providing first-class career opportunities for all.

Progressiveness:
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They believe in the advancement of society through the adoption of enlightened working
practices, innovative new products and processes, and a spirit of enterprise.

OBJECTIVES OF HBL

The bank’s main aim is to provide better and efficient services to its domestic and efficient
customers and overseas customers regarding the need for improving the financial
performance of the company.

Following are the main objectives of HBL

 To earn profit for the Bank itself and maximize its shareholder’s value.
 To provide solutions for multiple requirements of clients of diverse
 Financial nature.
 To manage with the changing trends of the modern day financial market.
 To be a diversified bank by offering all basic consumer services along with
 specialized services
 Honest and ethical conduct, including ethical handling of actual or apparent conflicts
of interest between personal and professional relationship.
 To provide employment opportunities to people.

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 ADVANCES AND LOAN

At December 31, 1999 HBL's outstanding loans and advances were estimated at Rs181
billion as against Rs160 billion in the previous year of which 32 per cent were non-
performing. The level of non-performing loans was however reduced from 35 per cent in
1998 to 32 per cent 1999. Since the last quarter of 1999, under the government's initiative an
environment has been created for accelerating the restructuring process on problem loans.
During the year HBL made cash recoveries of Rs4.4 billion and restructured Rs14.5 billion of
its problem loan portfolio.

Documents Require for the Loan

Demand Promissory Note (DP Note):
This document is filled in by the party that they promise to pay the amount whenever it is
demanded.
Facility Letter:
This is the requisition of the finance facilities to the bank By the party.
Balance Confirmation:
After the approval of the loan this letter is written by the Party that such amount is in the
account of the party.
 Letter of pledge (IB26)
For the getting of the cash finance a letter of Pledge is to be given to the bank that such
property is to be pledged with the bank as a security.
Letter of Guarantee (IB29)
A letter for the personal guarantee is also required in which the guarantee from a sound
person to the party is attached with the application
Agreement for Financing (IB6)
This agreement is for the short term medium term/long term on the mark up basis. At
most these are the documents required in attaining of the loan.

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 HBL Business Loan
HBL provides loan to the businesses on a large scale. HBL is providing its services to
business for a long time. There are two methods for providing Business loan by HBL.
1) On the Hypothetical method
2) On the Pledge method
Hypothetical Method:
According to this method Securities are just considered but are not kept by bank against
loan. Loan of this nature are usually minor and are provided to the referenced customers.
Properties are usually considered as mortgage and sometimes some items as pledge. No
specific limits for loan.
Pledge Method:
According to this method Securities are kept by bank in the form of Pledge. Pledge can be
in form of
1) Rice
2) Cotton
3) Wheat
4) Sugar
5) Flour etc.
But basic criteria is reputation, status, relationship with bank and turnover rate. Loan is given
on large scale and large amount in this method.
Bank becomes the owner of pledge if creditor didn’t pay the loan amount on time.
Securities are kept 60% against loan. No specific limits for loan.
Requirements:

Most important requirement is that customer must have account in bank since 1 year and
have regular transactions in the account.

Original documents of property, NEC from Revenue department and approved map are
necessary for loan.

Rate of Interest:

In Small Business finance 16% interest is charged, which varies according to situation. But
usually same interest rate is charged to all the parties.

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 Loan against other purposes:
HBL also provides many other different kinds of loan almost for every purpose.
1) HBL provides Loan against cash. Maximum limit is 10 million and securities are 90%
2) HBL provides Loan for Bikes. No specific securities are mentioned.
3) HBL provides Loan for Cars. (Details are provided in later pages)
4) HBL provides Loan for House. (Details are provided in later pages)
5) HBL Provides Loan for Agriculture. i.e. for
a) Poultry forms.
b) Dairy forms.
c) Seeds
d) Fertilizers
e) Tractors
f) Spry
g) Cultivation etc.
And for many other purposes.

E-banking of HBL
Access any time ATM:
With access to over 3700 ATMs nationwide, you can do a lot more than cash withdrawal.
1) Fund transfer
2) Mobile bill payment
3) Utility bill payment
4) General mini statement
Internet Banking:
To fulfill all your banking needs anywhere or anytime, visit www.hbl.com click and bank.
Phone Banking:
For information regarding our products and services, call HBL Phone Banking at 111-111-
425.
Online:
HBL provides you with unmatched convenience. Now every HBL branch is your branch!
Warid, Ufone
SGC, SNGPL, LESCO, KESC.

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 HBL Small Business Financing

HBL Small Business Finance provides you Running Finance for your working capital
requirements and Demand Finance for your business expansion needs.
It was Introduced in 2010.

Features

 Demand Finance Facility up to 70% of the assessed value of your 

  property
 Affordable installments/ mark up
 Financing up to PKR 10 million
 Running Finance and Guarantee facilities renewable every year
 Demand Finance facility up to 5 years
 Secured against residential/ commercial/industrial property
 HBL Debit Card facility

Securities:

Customers Worth and Reputation is most important factor. Then any other Mortgage like
plots, house or shop etc are considered as security.
These securities are more than 60% of the granted loan.
If loan is not returned according to agreement property bank becomes the owner of property
according to law.

Requirements:

Most important requirement is that customer must have account in bank since 1 year and
have regular transactions in the account.

 25 to 65 years of age
 A business in operation for at least 3 years
 A valid CNIC
 Your last paid utility bill
 A certified copy of your bank statement for the last 1 year
 A proprietorship letter or partnership deed or latest form 29

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Rate of Interest:

In Small Business finance 16% interest is charged, which varies according to situation. But
usually same interest rate is charged to all the parties.

Project Finance:

The bulk of HBL’s project finance practice revolves around the power sector. Prior to the
power policy of 2002, HBL actively pioneered Project Finance in Pakistan through the
funding of a gas-fired co-generation plant (94 Megawatts of power and desalination of 3
million gallons per day). Subsequent to the 2002 power policy, HBL continues to play a
fervent role in the sector and is the only Investment Bank that was Lead Advisor to all IPP
transactions that achieved financial close. In the fertilizer sector, HBL financed the largest
local currency financing in Pakistan, worth PKR 23 billion, as well as a green field venture in
the telecom sector worth PKR 12 billion.

Housing Finance:

HBL Provides House financing loan to general public as well as Business men.

Home Buyer:

 Financing from Rs. 500,000 up-to Rs.20 million or entitlement should not exceed
80% of the appraised value of a built up house whichever is lower
 Financing period 20 years.
 Disbursement made as Bullet Payment (one time).
 Repayment in equal monthly installments based on the tenure of financing.

Eligibility Criteria

 Existing individual customers maintaining satisfactory relationship

 Salaried employees of our Corporate/Commercial Relationships
 Self Employed professionals (Doctors, Engineers, Chartered Accountants, Architects)
 Have age between 23 to 60 years.
 Possesses minimum net monthly take home income of Rs.20000
 Salaried individual at least 1 year of permanent service.
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  SEP/Businessmen 2 years of business proof.
 Installment not to exceed 45% (Debt Burden) of the monthly take-home income.
 The aggregate Debt Burden should not be more the 50%
Loan Tenor:
For Buying & Construction: up-to 20 years.
For Renovation – up-to 10 years.

Minimum and the maximum loan amount that can be acquired:

Home Purchase – Rs. 0.3M to 20M

Home Construction – Rs. 0.3M to 20M

Home Renovation – Rs. 0.5M to 5M

Penalty on early settlement of the loan:

The penalty on early settlement of loan is 3% on principal loan outstanding.

Documents Required (BUSINESSMEN & SEP)

 Loan Application Form (to be filled-in by the applicant)

 Borrowers Basic Fact Sheet
 Computerized NIC
 2 recent photographs (passport size)
 Business Proof ( at least 2 years)
 NTN Certificate
 6 months Bank Statements
 Direct Debit Authority (Repayment mode)
 Current paid utility bill for current residential address
 Declaration of other loan liability
Distribution:

All Branches of HBL are authorized for booking Home Loans

HBL Car Loan:

HBL Provides Car financing loan to general public as well as Business men.
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It consists of following steps:
 Choice of used, new local/imported and reconditioned imported car
 Repayment options ranging up to 7 years
 Up to 85% of financing for the car of your choice
 Insurance at all times for complete peace of mind and security

Criteria  Salaried Individuals Self-Employed Business

persons/ Professionals
Citizenship Pakistani Pakistani
Age 22-60 years 22-70 years
Minimum monthly income Rs. 20,000 Rs. 25,000

RUNNING FINANCE:
Running Finances are also given for the purchase of stock etc. But its limit is not too
much. Normally up to RS 15, 00,000 is given as a Running Finance and no staff is
appointed. This is termed as Hypothecation, which means that party is wholly liable for
the stock and payment of the principal amount and markup. The procedure is almost same
as for the cash finance and the loan is given to those parties which are able to prove its
genuineness and satisfies the bank. The bank also pledges the genuine security of the
party which normally more valuable than the amount of loan. To get this type of loan
prior permission of the zonal office is necessary.

The rate of mark up is RS 0.52/1000 per day and to calculate the mark up for the finance
period as per formula is:
Amount of Amount of Finance + one installment

Mark Up----------------------------- Rate of Mark up

No. of Periods of Installments One Installment.

Future Outlook:

For a bank to deliver quality services, it is imperative that technology be an integral part of

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all aspects of its operations. At Habib bank, strategy has been to utilize cutting edge
technology to serve customer efficiently and in a cost effective manner. HBL strive to
accomplish this while maintaining a strong personalized approach in our customer
relationship. HBL embarked on an ambitious plan in 2009 to revamp its technology platform.
The technology initiative includes:
 Online inter-branch funds transfer
 Alternate delivery channels e.g. POS terminal
 ATM network for cash withdrawal, fund transfer, payment of utility bills etc
 E-commerce
 Internet banking
 PC based banking for corporate customers
 Automation of treasury and trade finance
 HBLcorporate website has recently been revamped and now provi
d e s   c ustomer friendly, information rich and technologically advanced environment
to its clientele. Enhancement of the Bank’s communications network to provide
online connectivity to:
 More than 200 branches, corporate centers and regional offices in over
30cities throughout Pakistan
 More than 100 ATMs covering most of cities
 Over 1000 nationwide ‘point of sales’ terminal.

HBL Trade power:

HBL Trade Power helps you buy goods overseas or locally, ensures your overseas payment
collection, allows you to access proceeds from your sales through LC before the customer
makes payment and also provides your customer with financial or performance guarantees.

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HBL provides a large range of products and services to its business and
individual customers some of which are as follows.

PRODUCTS:
 HBL Muhafiz Rupee Travelers Cheques
 HBL Auto Finance
 HBL Flexi Loans for salaried personnel
 HBL Lifestyles Financing Scheme
 HBL i-Card
 HBL House Financing Loans
 HBL Easy Access
 HBL Fast Transfer
 Haryali Agricultural Loans
 HBL E-Bank

SERVICES:

 Local and International Letters of Credit (Sight and Usance) through: 

 - Finance against trust receipt 
 - Finance against imported merchandise
 Foreign bill collection
 Negotiation and discounting of export bills
 Financing up to PKR 40 million
 Financing available in local/ foreign currency
 Secured against residential /commercial / industrial property
 Pre and post shipment export finance (from bank or SBP re-finance)
 Performance bonds and other guarantees
 Management of Foreign Exchange transactions

Bibliography:
For the completion of this Report we collect information from the following sources.

Search engines:
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www.wikipedia.com

www.hbl.com

Managers we met:
Ghulam Mustafa Bhatti Senior Manager of Bank

Contact: 0301-7867601

Muhammad Azam Khan Assistant Manager

Contact: 0300-6720720

Practical Report at:

Habib Bank Limited

Tehsil Bazar Branch Bahawalnagar, Pakistan

Ph# 111-111-425

Email:
www.hbl.com

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