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1
AN OVERVIEW OF THE ECONOMY:
No doubt, ours is a developing economy. Apart from a few years e.g. 1954, 1991, etc.
the economy of Pakistan has been staggering all the time. Lack of proper planning,
corrupt leadership, political instability and inefficient utilization of the resources has
put the country in serious problems of heavy debt servicing, inflation, corruption,
injustice, poverty, unemployment and many more.
However, during the last one year, after the 11th September attack, there has been
some revival in the economic condition of the country as
• External reserves continue to increase and are currently at USD 6.2 billion
representing seven months import cover.
• GDP growth improved from 2.5% last year to 3.6%.
• The threat of war with India has subsidized, however clashes on the line of
control continues.
• Stock market has shown some signs of improvement and the currency has
stabled as the restoration of democracy in the country.
The pace of banking development in Pakistan has perhaps very few parallels in the
world. Starting virtually from scratch in 1947, the country today possesses a full range
of banking and financial institutions to cope with the multifarious needs of a growing
economy. At the time of partition, total number of commercial banks in Pakistan was
38. Out of these, the Pakistani banks were 2, Indian banks 29, and exchange bank 7.
The total deposits of Pakistani banks stood at Rs. 88.0 millions where as advances
were Rs. 198.0 millions.
2
Since 1990 the Government of Pakistan (GOP) has introduced various reforms in the
financial services sector enhancing the level of autonomy enjoyed by the SBP. The
number of banks operating in Pakistan has increased, which in turn has resulted in
increased competition. The banking sector, in general, has shown good progress
during the last few years. During previous five years, the combined total assets of
domestic banks, showed an average annual increase of 22 percent, while combined
deposits have recorded an increase of 27 percent per annum.
Three major nationalized commercial banks (NCBs) are still the dominant players in
the market, controlling about fifty-one percent of the entire banking sector deposits
and fifty percent of advances.
Commercial banks play a key role in the regeneration of economic activity in the
country. As the country’s largest deposit institutions and the main source of short term
credit, they form, so to speak, the heart of the financial system.
The financial sector of Pakistan can be divided into three broad categories namely
• Banking Companies
• Non-Banking Financial Institutions
3
• PAKISTANI BANKS
Nationalized Commercial Banks
Denationalized Commercial Banks
Domestic Private Commercial Banks
Cooperative Banks
• FOREIGN BANKS
In case the basis of classification is size, then these are of two categories:
• Scheduled Banks
• Non-Scheduled Banks
The Commercial Banks along with all the NBFI's, except for Modarabas and Leasing
Companies are governed by the State Bank of Pakistan (SBP) through its Prudential
Regulations. Pakistan is in the process of adopting an Islamic (Shariah) financial
system, under which interest-based banking is not allowed. There are
• 13 private commercial banks,
4
• 4 privatized commercial banks,
• 3 nationalized commercial banks and
• 21 foreign banks
• 16 Investment Banks
• 29 Leasing Companies
• 53 Modaraba Companies
.
The number of branches for Pakistani banks, stand at 8,597 and for foreign banks at
87. The combined total assets of domestic banks have increased from Rs. 771.3
billion in 1992 to 1,616.3 billion in 1997, showing an average increase of 22 percent
annually. Similarly, combined annual deposits have recorded an increase of 27
percent, from Rs. 318.9 billion in 1992 to 1,066 billion in 1996. Advances recorded
an annual growth of 27 percent from Rs. 192.8 billion in 1992 to Rs. 641 billion in
1997. Capital adequacy ratio is 8 percent for domestic private banks compared to less
than 5 percent for NCBs.
Foreign banks
The twenty one foreign banks operating in Pakistan are playing a significant role by
incorporating new technologies and providing better quality services. Policies of
privatization, foreign exchange reforms and structural adjustments, have increased the
inflow of foreign resources through direct and portfolio investment. Most foreign
banks in Pakistan have branches only in big commercial/industrial centres, unlike
local banks which also operate in small towns.
In trade financing, the role of foreign banks is even more significant, as approximately
30 percent of the total trade of the country is transacted through them. Major portion
of the trade financing is for importers to establish letters of credit.
5
In 1991 when GOP allowed resident Pakistanis to open foreign currency accounts,
many banks directed their efforts towards the previously untapped consumer and retail
banking sector. New products such as credit cards, housing finance and automobile
finance were introduced. Foreign banks also play an important role in assisting local
corporations to access international capital markets. The total deposits of the foreign
banks increased from Rs. 74.4 billion in 1992 to Rs. 213.4 billion in 1997.
Furthermore, their advances increased from Rs. 34.2 billion in 1992 to Rs. 100 billion
in 1997 showing an annual increase of 37 percent.
FOREIGN BANKS
6
LOCAL BANKS/DFIs/MODARABAS
7
LENDING AND DEPOSIT
RATE (Percentage)
8
NUMBER OF BANKS (June 2000)
Banking and financial sector plays an important role in the economic development of
every country. So in order to develop our country, our banking sector need to be very
well organized, efficient and up-to-date. Economy of Pakistan is passing through a
difficult phase and these are the banks which can bring our country out of this
whirlpool victoriously. The financial services sector still offers good opportunities in
consumer banking, corporate bonds, underwriting of equity issues for privatisation,
refinancing of U.S. exports to Pakistan under letters of credit and advisory services
for due diligence and project feasibilities
9
financing of the foreign banks in these agriculture, manufacturing, commerce, and
construction has been far greater than that of Pakistani Banks.
10
INTODUCTION
11
The prelude:
12
banking, interest rate management and debt capital
market.
• In Pakistan, the Group comprises of Standard Chartered Bank and
Standard Chartered Grindlays Bank, the largest foreign banking group in
the country, with a collective experience of 270 years in Pakistan alone.
• The bank with its long heritage of nearly 150 years is capable to change
with time, offering quality products by means that are convenient to the
potential customers.
• The bank has currently 21 online branches across Pakistan in all the four
provinces and eight major cities which ensure that the services are being
performed quickly and efficiently.
• There are 6 branches (two of Standard Chartered Grindlays Bank and four
of Standard Chartered Bank) in Lahore, offering unmatched services to its
customers.
• The bank head office capital account stands at Rs. 2,521.236 millions
where as its reserves and unremitted profits aggregate at Rs. 618.691
millions as on 31st Dec. 2001.
• The bank recorded an increase of 20% in the deposit holdings in the
financial year 2001.
• First Grindlays Modarba, the pioneer and the largest leasing entity, has
been introduced by Standard Chartered Bank (a foreign bank) in the
industry and this is the only Modarba in Pakistan with an external credit
rating of A2.
13
THE STANDARD CHARTERED BANK
IN
HISTORICAL PERSPECTIVE
HISTORICAL PERSPECTIVE
14
Standard Chartered is the world's leading bank headquartered in London. However, it
has been operating all around the world. In fact it is more successful in the regions
other than Europe such as South Asia and Middle East. Here I am giving a brief
summary of the main events in the history of Standard Chartered and some of the
organizations with which it merged.
1853
Of the two banks, the Chartered Bank is the older having been founded in
1853 following the grant of a Royal Charter from Queen Victoria. The moving
force behind the Chartered Bank was a Scot, James Wilson, who made his
fortune in London making hats. James Wilson went on to start “The
Economist”, still one of the world's preeminent publications.
1958
1859
15
• an agency was opened in Singapore.
1861
The Singapore agency was upgraded to a branch which helped provide finance
for the rapidly developing rubber and tin industries in Malaysia.
1862
Over the following decades both the Standard Bank and the Chartered Bank printed
bank notes in a variety of countries including China, South Africa, Zimbabwe,
Malaysia and even during the siege of Marketing in South Africa. Today Standard
Chartered is still one of the three banks which print Hong Kong's bank notes.
1862
1863
1872
1875
16
Malaysia was included in the global banking network of the bank.
1880
The bank’s expansion plan continued as it opened its offices Japan in 1880.
1892
Some 34 years after the Chartered Bank appointed an agent in Sri Lanka, it
opened a branch in 1892 to take advantage of business from the tea and rubber
industries
1894
The chain of expansion continued as the bank entered the soil of Thailand in
1894.
1900
The Chartered Bank opened offices in New York and Hamburg in the early
1900s. The Chartered Bank gaining the first branch license to be issued to a
foreign bank in New York.
1904
1862
Nine years after the formation of The Chartered Bank, in 1862, the Standard
Bank was founded by a group of businessmen led by another Scot, John
17
Paterson, who had immigrated to the Cape Province in South Africa and had
become a successful merchant.
Both banks were keen to capitalize on the huge expansion of trade between Europe,
Asia and Africa and to reap the handsome profits to be made from financing that
trade.
1863
The Standard Bank opened for business in Port Elizabeth, South Africa, in
1863. It pursued a policy of expansion and soon amalgamated with several
other banks including the Commercial Bank of Port Elizabeth, the Colesberg
Bank, the British Kaffarian Bank and the Fauresmith Bank.
1867
The Standard Bank was prominent in the financing and development of the
diamond fields of Kimberly in 1867.
1885
The Standard Bank extended its network further north to the new town of
Johannesburg when gold was discovered there in 1885. Over time, half the
output of the second largest goldfield in the world passed through the Standard
Bank on its way to London.
1892
1894
18
1897
1900
The Standard Bank opened offices in New York and Hamburg in the early
1900s.
1901
1906
1911
1912
Uganda was the one included in the global banking network of the bank in
1912.
Of these new businesses, Botswana, Zanzibar and the D.R.C. proved the most difficult
and the branches soon closed.
1934
A branch in Botswana opened again in 1934 but lasted for only a year
19
1950
Even the First World War offered opportunities for expansion when the Standard
Bank set up a branch in Tanzania shortly after British troops occupied the formerly
German administered Dar-es-Salaam in September 1916. Both banks survived the
inter-war years but the world trade slump led to the closure of operations in the
Canary Islands, Liberia, the Netherlands, and Equatorial Guinea. Disaster struck the
Chartered Bank's office in Yokohama, Japan, when it was destroyed by an earthquake
in 1923 killing a number of staff.
The Chartered Bank was particularly affected by the Second World War when
numerous Asian countries were occupied by Japan.
After the Second World War many countries in Asia and Africa gained their
independence. This led to local incorporation in some countries, particularly in Africa.
Other operations such as those in Iraq, Angola, Myanmar and Libya were
nationalized, while in Indonesia the Jakarta office was destroyed in an attempted coup
detest.
1948
20
1957
During 1957 it acquired the Eastern Bank. The Eastern Bank gave the
Chartered Bank a network of branches including Aden, Bahrain, Beirut,
Cyprus, Lebanon, Qatar and the United Arab Emirates.
1959
The Chartered Bank also entered into a joint venture to form the Irano-British
Bank which opened for business in 1959. The bank grew rapidly and had 24
branches when it was nationalized in 1981. By the mid 1950s the Standard
Bank had around 600 offices in Southern, Central and Eastern Africa.
1965
Its network grew substantially in 1965 when it merged with the former Bank
of British West Africa which had some 60 branches in Nigeria, 40 branches in
Ghana and eleven branches in Sierra Leone in addition to operations in
Cameroon and Gambia. Despite these acquisitions and expansion into new
countries such as Mexico, South Korea and Oman (1968), both the Standard
and Chartered Bank networks were comparatively small. Both viewed the
future with some trepidation as the need to protect themselves from
acquisition became ever more apparent.
Standard Chartered is named after two banks which merged in 1969. They were
originally known as the Standard Bank of British South Africa and the Chartered
Bank of India, Australia and China.
21
The Merger between Standard & Chartered Banks:
In 1969 the decision was made by the Standard Bank and the Chartered Bank to
undergo a friendly merger thus forming Standard Chartered PLC. It was one year later
that the descendants of the "Chartered Bank of India, Australia and China" were
finally permitted to open a representative office in Sydney, Australia.
Standard Chartered decided, after the merger, to expand the Group outside its
traditional markets.
In Europe
22
• Standard Chartered also opened offices in Argentina, Canada,
Colombia, the Falkland Islands, Panama and Nepal.
In USA
• A number of offices were opened and three banks were acquired. These
included the Union Bank of California which gave Standard Chartered a
presence in Brazil and Venezuela.
• The opening of a branch in Istanbul in 1986 was overshadowed by a far
more dramatic event when Lloyds Bank of the UK made a hostile take-
over bid for Standard Chartered. Standard Chartered won its right to
remain independent but entered into a period of considerable change.
23
• Expensive buildings were sold with the proceeds reinvested in the
business, and the senior management team was radically changed and
strengthened.
24
Today Standard Chartered is the world's leading emerging markets bank employing
30,000 people in over 750 offices in more than 56 countries primarily in countries in
the Asia Pacific Region, South Asia, the Middle East, Africa and the Americas.
The new millennium has brought with it the largest acquisitions in the history of the
bank with the purchase of Grindlays Bank from the ANZ Group in the regions of
Middle East and South Asia for US$ 1.34 Billion.
The acquisition of the Chase Consumer Banking operations in Hong Kong for US$
1.32 Billion in 2000 demonstrates Standard Chartered firm committed to the emerging
markets, where it has a strong and established presence and where it sees its future
growth. Deal Makes Standard Chartered Market Leader in Hong Kong Cards.
Standard Chartered PLC announces that it has signed an agreement with The Chase
Manhattan Bank to acquire the entire issued share capital of Chase Manhattan Card
Company Limited ("Chase Manhattan Card") and Chase’s Hong Kong-based retail
banking business for around US$1.32 billion. The total consideration, which includes
goodwill of US$1.02 billion, will be paid in cash and will be determined by reference
to completion accounts.
Standard Chartered sold Chartered Trust, the group’s UK and Channel Islands
consumer finance and contract hire businesses, to Lloyds UDT, a subsidiary of
Lloyds TSB Group, for £627 million in cash.
25
Standard Chartered is a leading player in the world's major financial centers with clear
leadership in the emerging markets. Through their onshore presence in 57 countries,
they offer a one-stop risk management solution to our customers - the local corporate,
multinational companies, investment and financial institutions, and central banks.
At Standard Chartered, they understand your needs and they seek to deliver their
products and services to the customer without compromising on their standards of
service and delivery.
The Standard Chartered Bank is the first in the MESA (Middle East And South Asia)
region and the First in the local market to offer E-Statements to its customers. The
launch of this service further reinforces Standard Chartered’s commitment towards
providing prompt and hassle-free services to its customers. It allows its customers to
access to their statements anywhere in the world-A big SUCCESS.
Consumer Banking
Provides services to
1. individuals and
2. small/medium sized businesses.
credit card
personal loans,
mortgages,
deposit taking and
wealth management services
26
The Wholesale Bank
provides services to
1. multinational,
2. regional and domestic corporate
3. institutional clients
trade finance,
cash management,
custody,
lending,
foreign exchange,
interest rate management
debt capital markets.
27
THE MISSION, OBJECTIVES
&
STRATEGIES
28
CORPORATE GOAL
Organizational goal and strategy define the purpose and competitive techniques that
set it apart from others organizations. Goals are often written down as an enduring
statement of company intent.
A strategy is the plan of action that describes the resource allocation and activities for
dealing with the environment and for reaching the organizational goal. Goals and
strategies define the scope of operations and the relationship with employees, clients
and competitors.,
With over 140 years of experience in trade finance and an extensive international
branch network, Standard Chartered is committed to help the customer succeed in
every competitive environment. To keep pace with changing needs, SCB constantly
review its comprehensive cash, trade and treasury products and services, ensuring that
a full range of flexible and innovative services is always available for the customer
wherever they trade.
29
This is not only a mission of the bank but also an inspiration for the entire
management either at higher level or at bottom.
VISION STATEMENT:
To put it simply
“Committed to making today’s more complex financial world easier for our
customers.”
OBJECTIVES:
STRATEGIES:
FOCUS:
Wealth management, secured loans, basic financial services, and shared
distribution are the ways we can create value for our customers as well as for
30
shareholders and employees. 5 value centers have been created so as to show
to the customers that how much we value them.
TRANSFORMATION:
Keep focused on the new opportunities in order to capitalize on them timely,
profitably and efficiently.
31
Courageous:
Being courageous is about confidently doing what’s right. Often the task may
seem insurmountable but with courage and tenacity the odds can be overcome.
A truly courageous act aspires and builds character.
Responsive:
How we respond to our customers will influence their belief in our
commitment to them. A productive response is often unexpected and more
effective for that. It clearly demonstrates our willingness to go beyond the
expected.
International:
As a member of global village, we view the world from the widest
perspective. We are all global citizens and believe the world is full of new
opportunities and exciting possibilities. We also deliver world-class product
and services.
Creative:
Creativity belongs those of us who are excited by challenges and engage them
with fresh thinking and an open mind. Creative thinkers are not limited by
convention but allow their minds to soar beyond practical solutions.
Trustworthy:
Trust is the foundation of every successful relationship. We trust, because, we
believe in the sincerity of the promise. Building trust can take forever. Losing
trust takes only moments.
32
THE BELIEF
People
Standard Chartered is an international organization operating in over 50
countries. Standard Chartered has world-class managers and employees. Its
aim is to develop this talent even further. This will create greater customer
loyalty and greater benefit for all - staff, shareholders and the community.
The challenge for the bank is that, unlike organizations who may be working
in one country or countries with similar cultures and laws, the bank have to
achieve the best people policies it can while being mindful of the different
countries and cultures in which it operate. Differences in culture, social
structure and economic status mean that one size may not fit all. Each of the
countries in which it operates will potentially have different laws, regulations
and customs. It strives to balance the need for global policies and processes
without imposing rules that may conflict with the diverse local needs and ways
of working of different countries.
Ethics
The principles that govern the behaviour of its business and employees are
reflected in a Group Code of Conduct. The Group Code of Conduct is a
33
practical working document which guides employees through the many
difficult conduct issues which confront them on a daily basis. Complying with
each element of the Code will not always be easy but the employees recognise
that they will be judged not just by what is set out in the Code but on how this
is reflected in their day to day activities and the behaviours.
Environment
Standard chartered Bank is proud to showcase commitments to and awareness for the
environment and encouraged if motivated by the customers in making day to day
choices.
34
STANDARD CHARTERED PLC.
35
STANDARD CHARTERED PLC:
Appointed to the board on 1st August, 1988 and became Chairman on 6th May,
1933. He is also chairman of Royal & Sun Insurance Group.
• Mervyn Davies CBE
Group Chief executive (CBE)
Age-49 years
Appointed GCE on November 29, 2001. Prior to this appointment, he was the
Group Chief Director with responsibility for Hong Kong, China, and North
East Asia and for Group-wide Technology and operations.
• Mike Denoma
Age-45 years
36
Appointed to the board on 12th May, 2000. he is responsible for consumer
banking world wide and for corporate governance in Thailand, Indonesia,
Philippines, & Brunei. He is based in Singapore.
• Chris Keljlk
Appointed to the board on 7th May, 1999. He is responsible for the Whole Sale
Business world wide and for corporate governance in America, Singapore,
India, Malaysia, Australia, and Indo China. He is based in Singapore.
• Peter Sands
Age-40 years
Appointed as Finance Director with effect from May 14, 2002. Responsible
for Group Finance and Strategy.
37
The Non-Executive Directors:
• Lord Stewartby RD
Deputy Chairman
Age-66 years
Appointed to the board on 1st January, 1990. He is the Chairman of the Hang
Lung Group and a founding director of the Morning Side/ Spring Field Group.
He is based in Hong Kong.
• Sir Ck Chow
Age- 51 years
38
Age-49 years
39
Age- 50 years
Appointed to the board on 22nd October, 1996. he is the president of the Wah-
Chang Group and the Chairman of Banyan Tree Totel and Resorts. He is
based in Singapore.
• Sir Ralph Robins
Age- 69 years
Appointed to the board on 1st October, 1991. he is the chairman of Tele West
Communications Plc, Whatsonwhen Plc and IF Online Group Plc and a non-
executive director of other companies.
40
MANAGEMENT TEAM:
• Chief Executive Officers
UAE Andrew Duff
Bangladesh Rumee Ali
Jordan Zahid Rahim
Lebanon B Chandresekar
Bahrain Usman Morad
Qatar Arif Mansoor
41
Srilanka Jayasundara
Oman Shelton Peiris
• Head of Emiritisation & Administration Abdulla Al Sayyah
• Executive Director of Centre for Policy Dialogue
Dr. Debopriyo Bhattacharrya
• Group Economist of SCB Gill James
• MESA Coordinator Rumee Ali
• Head of Media Relations Paul Marriage
42
STANDARD CHARTERED PLC
ORGANOGRAM
43
BOARD OF DIRECTORS
44
&
CHIEF EXECUTIVE
HEAD OF
EXTERNAL
AFFAIRS
45
STANDARD CHRTERED BANK
AROUND THE WORLD
Africa:
Botswana
Cameron
Cote d’ lvoire
Gambia
Ghana
Kenya
Nigeria
South Asia
Tanzania
Uganda
Zambia
Zimbabwe
Asia Pacific:
Australia
Brunei
Darussalam
Cambodia
China
Hong Kong
Indonesia
Japan
Laos
46
Macau
Malaysia
Myanmar
Nepal
Philippines
Singapore
South Korea
Taiwan
Thailand
Vietnam
America:
Argentina
Bolivia
Brazil
Chile
Colombia
Ecuador
Mexico
Paraguay
Peru
Uruguay
United States
Venezuela
Middle East & South Asia:
Bahrain
Bangladesh
India
Iran
Jordan
Lebanon
47
Oman
Pakistan
Qatar
Srilanka
UAE
UK & Europe:
The Falkland Islands
Jersey
UK-Europe
Off Shore Financial Services
Standard Chartered Network
48
CORPORATE MEDIA CONTACTS:
AFRICA:
Name / Title Location Tel / Fax
Audrey Mpunzwana Africa Tel: (4420) 280 7163
Fax: (4420) 280 7156
Regional Head
Mbl: (263) 11 606 950
Corporate Affairs, Africa
Musonda) Trevor Botswana Tel: (267) 360 1688
(267) 360 1901
49
Mwamba Fax: (267) 353 446
Mbl: (267) 7131 0910
Head of Legal &
Compliance, Corporate
Affairs
Gladys Inoni Tel: (237) 230 335
Fax: (237) 221 501
Corporate Affairs Cameroon
Manager
(Philippe ) Serge Bailly Tel: (225) 20 30 32 63
Fax: (225) 20 30 32 61
Corporate Affairs Cote D'ivoire
Mbl: (225) 07 03 90 47
Manager
Fatou Mas Jobe, Tel: (220) 201 305
Fax: (220) 227 714
Head of Corporate Gambia
Mbl: (220) 961 577
Affairs
Willing Vanderpuije Tel: (233) 21 669 688
Fax: (233) 21 661 676
Area Head of Corporate
Ghana & West Africa Mbl: (233) 24 327 527
Affairs
Ghana & West Africa
Titus Mutiso Tel: (2542) 217 235
Fax: (2542) 214 086
Area Head of Corporate
Kenya Mbl: (254) 7282 9236
Affairs,
Kenya & East Africa
Fola Akande Tel: (234) 1 320 2000
Nigeria Fax: (234) 1 262 6801-5
Corporate Affairs Mbl: (234) 1 262 6814
Genevieve Kotta Tel: (255) 22 2139 825
Fax: (255) 22 2113 770
Corporate Affairs Tanzania
Mbl: (255) 744 311 455
Manager
Harriet Musoke Tel: (256) 41 250 034
Fax: (256) 41 231 473
Corpoarte Affairs Uganda
Mbl: (256) 77 221 045
Manager
M’kwinda Sakala Tel: (260) 1 225 244
Fax: (260) 1 223 633
Corporate Affairs Zambia
Mbl: (260) 772 069
Manager
50
Fatima Antipas Zimbabwe Tel: (263) 4 752864
Ext. 240
Fax: (263) 4 758630
51
Regional Head Corporate Fax: (852) 2537 3936
Mbl:(852) 9026 8638
Affairs
Asia
Hong Kong, China & North
East Asia
Tel: (8862) 2514 6627
Cindy Tang Fax:(8862) 2545 1380
Taiwan Mbl
Head Corporate Affairs (8869) 3533 9743
:
MIDDLE EAST:
Name / Title Location Tel / Fax
Abdul Rahman Buchiri Tel: (973) 209 677
Fax: (973) 209 639
Head of Corporate / Bahrain
Mbl:(973) 968 7779
Consumer Banking Product
Alex Blake- Milton Tel: (9714) 508 8150
Fax: (9714) 508 8241
Regional Head of Corporate
Mbl: (971 50) 552 4946
Affairs UAE
Middle East & South Asia
( excluding India)
AMERICA:
52
STANDARD CHARTERED BANK
IN
PAKISTAN
Standard Chartered bank has been present in the region that now constitutes Pakistan
for over 136 years. With 21 branches nationwide, it has as played a pivotal role in
establishing Pakistan as a key financial centre. SCB is Pakistan’s largest foreign
banking group and one of the world’s leading banks which offer a rear combination of
product and service benefits. Its commitment, friendly staff insists that customer
business is carried out quickly and efficiently.
In Pakistan, SCB is one of the leading banks offering an extensive range of products
and services for
• Personal customers,
• Corporate customers and
• Financial institutions.
The Corporate Banking Division covers all corporate segments of the local market. In
Treasury, Standard Chartered Pakistan has put great emphasis on tailoring and
Priority Banking:
Their priority banking centers offer an unmatched private banking service where
customers receive a higher quality of service and personal attention in an exclusive
and elegant environment. So let green and blue set the standard for you. Standard
Chartered bank has five branches in Lahore in different areas the main branch of
Lahore is at Tufail road Cantt; other branches are in Defense, Gulberg, Mall and
Garden town (NGT).
Before 31st July, 2000 ANZ Grindlays and Standard Chartered bank were two separate
entities. Standard Chartered PLC announced on 31st July 2000 the completion of the
US$1.34 billion acquisition of Grindlays Bank and the associated Grindlays Private
Banking business from Australia and New Zealand Banking Group Limited after
obtaining necessary regulatory approvals for completion.
On 31st July 2000 ANZ sold its 51% shares to Standard Chartered bank in MESA
(Middle East South Asia) MESA consisting of 16 countries. So it became Standard
Chartered Grindlays bank. The acquisition was to be completed within three years and
now all the Grindlays Bank’s account holders have been transferred to the Standard
Chartered Grindlays Bank-Gulberg Branch (ALM-Assets Liabilities Migration
Process) and once again it has become Standard Chartered Bank.
A declaration in this regard was published in the daily “The News” dated December
01, 2002 that Standard Chartered Bank has successfully completed the acquisition
process of Grindlays Limited on Dec. 01, 2002. As a result of the amalgamation, both
banks have begun to operate as a single legal entity under a corporate identity with no
change in banking services.
This move positions Standard Chartered as the leading international banking business
in India, Pakistan, Bangladesh and Sri Lanka, and gives a much stronger position in
The move also significantly strengthens Standard Chartered’s position as the world’s
leading emerging markets bank, adding India to rank alongside Hong Kong, Malaysia
and Singapore as significant profit contribution.
In Pakistan, the strength of staff for SCB is 325. Last year it was 502 declining as a
result of the merger.
Product
Support
Liability
Products
Wealth
Manageme
nt
Distributio
n
Alternative
Channels
Group Representative
Area Managers
Branch Managers
TSM
CROs Tellers
Peons
Branch Manager
Alishan Zaidi
Credit
Direct Sales Deptt.
North
Teller Services
Khurram Butt Manager (TSM) Asif A. Habib
Head Sarfaraz Hussain Team Leader
PFCS
CROs
Team Leader
Farzana Shah Shahab
Head Teller
Sabtain Syed Hassan
Mustafa R.Kirmini Sohail
Nadeem
Sajjad
Bhatti
Waqar
Agha
Ahmed Bilal Ghias Waseeem Jaffar
Hassan Malik Butt Raza
RESOURCING
&
EMPLOYEES AT SCG
ORANISATION DESIGN
A small comment on organization design (OD) has been included for complete
understanding of the term “resourcing”.
In brief ,organization design (or organization development ) is a process or tool
whereby an organization , or a section of an organization , can step back and do an
inventory of itself in relation to the business it is doing or, more usually, the business
it intend to do.
From the H R perceptions, the most common application is effectively a skills
inventory. The process would involve an assessment of the skills\competencies
required to conduct the business, now or in the future, followed by an audit of the
current existence and level of that skill within the organization, and then decisions on
how to bridge the gap between the required competencies and the existing pool. It is a
process that is often used by organization that intend to either fundamentally
transform themselves, or organizations that intend to move into wholly new areas of
business (perhaps through vertical or horizontal integration).
A small practical example of the process at work was seen in Dubai (though it wasn’t
called organization development\deign at the time). In 1995, the Consumer Baking
business underwent a significant transformation, moving away from ‘traditional’
branches to the concept of a branch as “sales & service platform”, and the attendant
centralization of virtually all CB operations.
During this process it became evident that new skill sets would be required,
particularly in the sales and service area, and it also became clear that SCB did not
have an adequate supply of those skills amongst existing staff. Therefore, a decision
was made to combine a redundancy program with a recruitment program in order to
MANPOWER PLANNING
MANPOWER BUDGETING
The manpower budget for each business, and for the support functions, must
flow/derive from the business plan for the forthcoming year. Clearly the prime
responsibility for the manpower budget lies with each business/function head. The
‘easiest’ way in which to prepare a manpower plan is, from a review of the business
plan, to simply add and subtract positions from the current organization. This however
assumes that the current structure and numbers are appropriate, an assumption which
may be incorrect.
Standard Chartered Grindlays has a number of tools which can help build a more
accurate manpower budget, and H R can play a challenging/facilitating role in the
process. The following are some suggestions on how that might be done.
First, for each business, based on the business plan, and using capacity information,
standard structure and job family information where available, build structure and
number for the ‘front’ office.
Then again based on capacity information and estimates of transactions from the
business plan, build appropriate back-office structures and numbers.
Finally, based on business requirements and the support function plans (derived from
the business plans), build the support department structure required.
Once agreed organization structure and charts produced then, and in advance
preparation for recruitment/resourcing activity. Line management must ensure that for
each position on the organization charts, an up-to-date and signed-off job description
exists. This must include new positions that are vacant at that point in time. This has
two main benefits – first, for new positions, the job can be in preparation for
recruitment, and second the job description from the basis for the recruitment and
selection process, including advertising and selection.
For managerial level jobs (only, at present) each job must also have a competency
profit from the standard set of competency profiles.
RECRUITMENT PLAN
The final product of the manpower budgeting process should be a recruitment plan.
This plan should be prepared by the H R function, based on the agreed requirements
for the business and functions as expressed in the organization charts, and the timing
of those requirements. This in turn allows advance planning of recruitment so that
timetables are met.
PAY DAY
Your Gross Salary (Basic + Housing Rent Allowance + Utility Allowance) is paid
monthly in arrears, normally by the 25th of each month. The pay period runs from the
first to the last day of the month inclusive. Where the 25th falls on a non-working day,
payment is made on the last preceding working day.
BONUS SCHEME
Our policy is to recognize and reward an individual’s contribution which goes beyond
normal expectations but which may not be adequately covered through salary or
bonus. Examples of rewards are:
• Spot awards to recognize significant contributions to revenues &profits;
• Spot awards to recognize significant contribution to cost-reduction;
• Chairman’s award scheme.
Five awards are made annually which recognize individual or team achievements,
each with a cash prize. Individual winners or a representative of the winning team, are
invited to visit a Standard Chartered Regional office outside their home country.
Objective Setting
Business and performance objectives are set annually and ensure that:
• Employees’ efforts are focused on key priorities:
• The work is co-coordinated with that of others:
• The employees understand exactly what is expected of them.
The employees are required to prepare and draft the annual performance objectives
for discussion and agreement with the manager. A standard form has been designed
for this purpose. Every employee should have a set of annual objectives that have
been agreed with their line manager.
Staff members and their managers meet to informally view progress against objectives
a at least once every quarter. These are called interim performance assessments. Their
purpose is to check that the objectives are still valid, to give the opportunity to revise
them if appropriate and to agree on how well staff is doing.
The employees need to access their performance against their objectives regularly, to
decide what action to take to ensure their achievement.
Performance Assessment
The performance against agreed objectives is formally assessed at the end of the
performance year during a Performance Assessment Interview with the manager. A
CAREER LADDER:
Most people in banking service are interested in ways to advance in their present field
of work. SCB and SCG offer ways through which its employees can advance by
transfers, promotions, and reclassifications within a particular job family. This process
of advancement is called "advancing on a career ladder."
A Career Ladder is a planned progression to a new job and provides another way for
employees to advance in their careers. Since the employee and the manager negotiate
the advancement to the next higher level position, there does not have to be a position
vacancy. Career Ladder progression is a two-fold process. The department must need
the higher level position, and the employee must be both interested in the higher level
job as well as demonstrate the potential to attain the skills needed to perform it
successfully. This program can provide a valuable opportunity for both employee and
organization development.
Who is Eligible?
Employees
• They can learn new skills and duties at their own pace while performing their
current duties.
• They can assume more responsibility and advance their career without moving
to a different department.
Managers
• They retain valued employees who are motivated to advance their careers.
• They maintain a work force of well-trained employees who have high morale.
• They provide more high quality products and services to their customers.
After the employee and his manager have agreed that a Career Ladder is appropriate,
the process is initiated by the manager. A completed Pre-Approved or Individual
Career Ladder form, containing the education, experience, distinguishing
characteristics and job responsibilities required for progression to the higher
classification is required. The manager completes and signs this form. It includes a
proposed time-line for completing the acquisition of the necessary skills or knowledge
and the proposed salary increase. The salary increase will be based on his additional
qualifications using the same criteria that would be used if the next level position had
been filled through recruitment. Pre-approved Career Ladders are developed by
Human Resources while Individual Career Ladders are developed by the manager,
and then approved by Human Resources.
A copy of the signed Career Ladder form is sent to Human Resources for approval
before the employee start the tasks listed on the form.
For a Career Ladder move between positions that have not been pre-approved, your
manager analyzes the progression and the distinguishing characteristics of both the
current and proposed higher classification and inserts them into a blank Individual
Career Ladder form. This form is submitted to Human Resources for approval.
• The time it takes the employee to attain the qualifications, knowledge, skills
and abilities required by the higher level classification. All distinguishing
characteristics must be attained before the ladder can be completed.
• The time it takes for the employee to demonstrate effectiveness in the higher
level classification.
• The time it takes the department to develop the need for the responsibilities of
the higher level classification. Generally, a Career Ladder can be expected to
take at least six months to complete.
Getting started
• First, the employees meet with the manager to discuss their interest in a Career
Ladder.
The Manager
• The employee pay rate increases is reviewed based on qualifications that are
related to duties and skills of the new position.
JOB DESCRIPTION
PERSONAL FINANCIAL
1 JOB TITLE CONSULTANT GRADE
2 Name
3 Reporting Job Title
Key Relationships
6 (Internal & External) INTERNAL
1. Branch Sales & Service Manager
2. Manager Operations
3. Treasury Dealers
4. Retail Credit Control
5. Asset & Liability Product Managers
EXTERNAL
1. Existing and potential customers
2. Commercial Customers of the bank
3. Counterparts at other banks
4. Key officials at Local Regulatory Bodies
JOB SATISFACTION
On the basis of my observation at SCG, Tufail Road Branch, I have found the
employees at low level of job satisfaction.
SCB is a foreign based bank with great repute and prestige nationally as well as
internationally. Many people dream to be a part of this emerging esteem by becoming
either its customer or employee. High repute, beautiful layouts, auspicious financial
Contractual Hiring:
SCB follows the policy of hiring on contractual basis. Generally all the employees at
lower ranks such as CROs are appointed on one year contract and these contracts are
renewable at the expiry of the contractual period. Which means the banks can retain
the same employee without giving him the status of a permanent employee and thus
benefiting from the lower salary package. This is what the bank is actually following
and I have seen the employees working there for more than 2 years but still enjoying
the benefits a contractual hiring only. This is the area where the job dissatisfying
element creeps into the employees.
Based on my observation, one reason for this low job satisfaction was no job security
on account of recruitment on contractual basis. There seems to be no job security in
contractual recruitments as the employees are laid off at any time on short notice. Two
employees have been laid off before my eyes by serving a short notice of less than
one day. It not only discouraged the current employees but also the potential ones like
us. It created chaos and a very uncertain climate for all the employees.
Salary Package:
Contractual recruitment is also discouraging the employees as they don’t enjoy the
benefits of the permanent employees (such as high salary, allowances, perquisites,
facilities, etc. etc.).
Another reason seems to be the very strict procedure followed in the performance
evaluation, allocation of grades and promotions. The manager is very mean in
appreciating, encouraging and upgrading the employees. It is considered to a
tremendous achievement to achieve a grade point of “2 and above” out of total grade
score of “4”. Despite continuous and breath taking efforts the employees fail to get a
good evaluation of their performances.
Although change is the essence of success in the modern world and an organization
that fails to implement the change at the right time loses the race of success. But we
should also not forget that excess of every thing is bad. Too frequently change in
policies leads to unrest, mental disturbance, & wastage of time and resources in
adopting the new policies. This is one of the reasons for low level of job satisfaction
observed at SCB, Tufail Road branch.
Job Timings:
Employees at SCB have a long working day which does starts at 9:00 a.m. but there is
not end limit to it. They stay at bank late at night depending on the work load and
nature of the job. Although these element exist in all other jobs, but they are paid
accordingly. At the banks, the employees have the feelings that they are paid less for
more work done by them.
Transport Facilities:
No transportation facilities have been provided by the bank and the employees face
problems in getting to the bank (as it is situated at quite a distant place from the centre
of the city).
Sales Targets:
Finally strict actions are taken against even small mistakes. The manager seems to
have forgotten that “to err is human.”
The most important factor in the success of an organization is its employees. It’s the
employees who make up an organization. So its very important for the management of
SCB to raise the morale and job satisfaction of its employees otherwise its financial
success may prove to be short
&
POLICY STATEMENT:
For these reasons, we have taken various steps over the years to develop our
compliance standards, such as issuing the Group Code of Conduct and growing a
network of compliance officers to help businesses operate to the required standards.
We now have to achieve a more fundamental goal.
The goal is to fully integrate compliance into our day to day operations, so as to
develop and enhance the culture of compliance in the Group. This is particularly
achieved by continually evaluating the compliance risk areas and successfully
managing them through comprehensive compliance training programs,
Group-Chief-Executive
July 2001
THE PROCES:
In the ordinary course of business the Standard Chartered Group (the Group) collects,
holds, processes and transfers personal data of its employees (current, past,
prospective and temporary employees, and their dependants).
As a first class international banking group it is vital that the Group establishes and
operates to a very high standard of data protection for personal data and for
commercial data. Failure to do so can have serious commercial and legal implications
for the Group. Clearly personal data in some contexts means personal data about
customers, but this Policy is designed for employee personal data.
This Data Protection & Privacy Policy relates to the handling and processing of all
Group employee personal data, whether held manually or electronically. It forms
an important part of the overall Group data protection environment, the other key
parts of which are
This Policy sets out the minimum global standards of conduct and procedure the
Group expects from data users in HR and other functions for the handling of
personal data wherever the Group operates.
If local legislative requirements or local procedures are more stringent they must also
be complied with. Local legislation must be complied with at all times.
SCOPE
Failure by any of these parties to adhere to this Policy may result in civil or criminal
legal action being taken against the Group, or against individual managers or other
employees, by data protection authorities or by the individuals to whom the personal
data relates.
It is the responsibility of managers to ensure that their staff are aware of and comply
with this Policy, and willful or negligent non-adherence to this Policy by any
manager or employee is a serious disciplinary matter which could result in
dismissal.
If the employees have any questions about this Policy, or about data protection, they
should consult their local HR department or their Legal & Compliance department
who will provide clarification, liaising with Group specialists as necessary.
Processing means collecting, recording, holding, or carrying out any operation or set
of operations on the data. In fact doing anything at all with the data, including
transferring, amending, consulting, disclosing, sharing, archiving, and even destroying
it.
Personal Data means any information at all related to employees, including their
contact details, details of their family, employment and remuneration records, medical
and absence records, expressions of opinion, appraisals, career plans, etc.
Although the Standard Chartered is a centralized bank but still every region follows
the policies appropriate to the culture in which it is operating. There are a few ones
followed in all the banks unanimously but most of these are area specific. At SCG,
The main policies followed at Standard Chartered and Standard Chartered Grindlays
Bank is namely:
1. Financial Policies
2. Lending Policies
3. Procurement Policies
4. Service Policies
5. Human Resource Polices
6. Research & Development Policies
7. Audit Policies
8. Investment Policies
9. Money Laundering Policies
10. Security Policies
11. Social & Environmental Policies
The financial policies of any bank are the most important policies through which
the whole banking activity is conducted. These policies are primarily conducted
on:
• Source of funds
• Use of funds
Sources of funds:
One part of bank’s finance policy is acquiring funds from the following sources such
as:
• Deposits received from the various account holders.
• Different type of accounts designed to meet the customers’ requirements.
• Interest income and commission by providing the services to its customer.
• Mark up/interest earned on advances and loans granted to the debtors.
• Fees, brokerage and commission from the various services provided by the
bank.
• Discount earned on specific facilities provided.
• Dividend earned from investments in other securities (shares of listed and
unlisted co.)
Uses of funds:
After the acquisition of the funds, comes the next stage i.e. the utilization of these
funds in an efficient way.
• The bank has an investment portfolio according to which it allocate its funds
Note that the banks don’t invest the whole funds raised by them as they have to
comply with certain restrictions imposed by the State Bank of Pakistan such as
• The bank has to maintain 25% of its time and demand liabilities with the SBP.
• A further 5% of its time and demand liabilities are deposited with the SBP in
order to be a member of clearing house.
1) Lending Policies:
• Secondly, the policies formed by the top level management regarding the
disbursement of funds in the form of loans.
The Prudential Regulations are discussed while discussing the Lending Department of
the bank in the Departments Section in detail.
The bank’s lending policy depends on the interest rates it offers, balances maintained
and repayments. The Bank follows some rules as far as lending is concerned, which
are as follows:
1. the bank conducts a complete analysis of the borrower before sanctioning
any amount.
2. The bank only invests in those sounds viable projects, which have good
rate of return.
The rate that the Bank charges on loans mainly depends on the following factors:
4) Procurement policies:
In bank industry, procurement means the procurement of funds from various sources
such as deposits. It involves attracting and holding the funds of the depositors. The
deposits, no doubt, are inputs / raw material in the banking operations. After the
acquisition of funds, the bank has to made decision regarding their usage.
Deposits Process Lending
As already mentioned in the above paragraph the major sources of funds for a bank
are the deposit and the other sources of income include interest or markup charges
received for various services offered by the bank to its clients.
A bank tries to attract maximum no. of accounts so that it can increase its deposits and
its lending ability. In order to get maximum no. of accounts the staff of the bank must
be efficient as compared to the other banks and the manager of the branches must take
personal interest in attracting deposits.
Standard Chartered spends around USD 1.0 billion annually on the procurement of
goods and services. The bank’s management recognizes that they need to manage this
expenditure from a social, ethical and environmental perspective by ensuring that
their suppliers meet their high standards for responsible behavior. To achieve this aim
social, ethical and environmental considerations have become an integral part of how
the bank evaluates and selects its suppliers.
Human-Rights
The bank expects its suppliers to have adopted and be able to demonstrate human
rights policies and records that reflect international legislation such as the UDHR
(Universal Declaration of Human Rights) and which are consistent with Standard
Chartered’s own standards. In the procurement processes, SCB aims to screen for
abuses with the intention that suppliers who perform poorly in relation to Human
Rights be excluded from doing business with the bank.
Ethics
Environment
The procurement process of the bank is designed in such a way that it ensures all
possible steps have been taken to believe that the suppliers do not unnecessarily
impact the environment in the way they produce, consume and dispose of materials.
Where practicable the bank will favour suppliers who recycle and reuse products and
will encourage priority suppliers to improve their environmental performance. The
bank aims actively to ensure that due regard is given to each of these issues in every
managed procurement by Standard Chartered. This will be achieved by taking account
of each issue throughout the sourcing process ensuring each issue is a factor in the
supplier selection process. This should lead (wherever possible) to Standard Chartered
favouring the use of suppliers whose policies and actions demonstrate, at a minimum,
5) SERVICE POLICY:
The bank emphasizes on providing personalized services. The bank’s efficient and
competent staff is there to provide top class services to its customers. The service
policies followed by the bank are
• This includes 9a.m. –5p.m. nonstop banking so that the customer can come to the
bank any time it is convenient for him.
• ATM facility allows the customer to access his account after banking hours and on
holidays from any Branch of the bank.
• Evenings banking for those people whose busy schedule don’t permit them to visit
the bank in the morning.
• Phone banking allowing banking on phone anytime, anywhere.
• Online banking according to which the customer can operates his account from
any Branch of the bank in Pakistan.
• Solving the problems of the clients on the phone lines and thus saving their
precious time.
• Having the Bank Statements e-mailed ensuring privacy.
• ATM cards let availing exiting discounts across outlets forming part of Bargains
network.
• Priority banking facility for its privileged customers (maintaining large accounts)
to provide them the best service.
PRIORITY SERVICES
The following personalized services are provided to the priority customers free of
charges:
• Issuance of Pay Orders, Drafts and T.Ts
• Issuance of Travellers Cheques
• Standing Instructions
• Stop payments of cheques
• Cancellation of DDs/Pay Orders
• Issuance of balance Confirmation Cerificate/PRCs
• Collection of cheques (LCY/FCY)
• Return of unpaid cheques
• Delivery of cheque books by courier
• Inward Remittances
• Issuance of counter cheques
Call centers will be established in the future to cater for customer’s individual
requirements.
Officers from other Branches also visit the priority centre so that similar services can
also be provided there. Hence the priority centres are provided services of dual nature
• General one for the general customers
• Customized one for the priority customers
These policies are concerned with the recruitment and training of staff in order to
maintain the same standards of banking services.
Standard Chartered supports the rights of the individual as expressed in the 1948
United Nations Universal Declaration of Human Rights (UDHR).
The UDHR contains a number of fundamental rights, which it aims to uphold in all
circumstances, including:
• The right to life
• The right to legal recognition as a person Freedom of thought, conscience and
religion
• Freedom of opinion and expression
• Freedom from torture
• Freedom from cruel, inhumane or degrading treatment
• Freedom from slavery and servitude
Standard Chartered meets all relevant international legal obligations and all relevant
local legal obligations in the countries in which it operates.
The bank is strictly apolitical and does not engage in political activity, support
political parties or have any political affiliations worldwide. It recognizes that it has
direct responsibility for the impact of its activities on its employees, suppliers,
customers and the communities in which it operates. The bank’s management works
to protect human rights in their own operations through its internal policies and
procedures. Its policies also ensure that human rights are taken into account in
procurement and lending decisions.
Human Resource Department of the bank is situated in the Head Office Karachi. The
HR policies are also formulated there. Some recruitments are directly through head
office but in some cases the relevant branch/ department has the authority to make the
selections. The policies of the Bank regarding HR are:
The Bank prefers to hire new employees on contractual basis because they perform
the same functions as the permanent employees do but at a lower pay. This is
beneficial for the Bank because less investment is made on its employees.
The bank also hires experienced employees from other organizations. By recruiting
experienced personnel the Bank is able to introduce new ideas, procedures and
methods of performing its banking functions.
The Bank offered Golden Handshake to its employees at the time of merger. The idea
behind this was that only those persons should be employed who are capable,
competent and challenging. The existing employees were interviewed at the time of
merger. The management quantified each designation and rated each employee, those
who didn’t meet the set standards were offered a golden handshake.
Now promotion is based on the employee’s ability to perform sales of the assets and
liabilities offered by the Bank. The management conducts a quarterly appraisal to
evaluate the performance of the employees. This is done to keep a regular check on
their performance and to give a healthy feedback to them. This is beneficial because if
any shortcomings in performance arise they can be removed immediately.
Some allowances that were previously offered to the employees have been
withdrawn. This was done in order to properly manage the Bank’s finances.
The Bank conducts training sessions at its main Branches. This is done so that the
employees of different branches get a chance to interact with each other. These
sessions are focused on improving employee’s service quality standards. Employees
are also given a chance to highlight any problem they are facing and raise any issues
This policy is essential because it gives vision, insight and creativity to the Bank. We
can discuss its two aspects.
• Research and development as far as the technological progress of the bank is
concerned is conducted at its Head office, which is situated at Dubai. All the
soft wares, which are used by the Bank, are created here. This department is
concerned with updating I.T. procedures and it tries to incorporate the latest
techniques as well. Supervision of the computers, software, servers, teller
systems & signature systems all is done there.
• The Marketing Department also conducts research and develops new products.
This department conducts surveys to determine the needs and requirements of
the customers so that new products can be launched accordingly.
8) Audit Policies:
An Audit is very important since it helps to regulate the operations of the bank. The
bank conducts three audits:
(a) Regulatory Audit
(b) Group Audit
(c) Internal Audit
The State Bank of Pakistan performs the regulatory audit. This audit starts in the
month of January and it is usually conducted in the main branches of all the banks.
(b)GROUP AUDIT
The Standard Chartered Bank’s auditors perform the group audit. The auditors come
from the Regional Head office in United Arab Emirates or the Group’s Head Office in
London to audit the MESA region (Middle East and South Asia). The group rating
depends on the level of abidance of the group policy. The auditors rate the
performance of the different branches in the countries. The country with the best
performance is rated at the top. This audit is conducted rarely, only when the need
arises.
© INTERNAL AUDIT
This audit is conducted at the National level. One representative of the management
committee is appointed to perform the audit. He further appoints a Hub Manager to
conduct the audit in his region. The Hub Manager assigns the job to a particular
Branch Manager in his region. Presently Mr. Abad Ullah (the BSSM of the Mall Road
Branch) is in change of conducting the audit in the Lahore Region. A group of
employees are selected from the different branches as auditors. Those people are
selected who have an enriched experience of the Bank’s operations. The auditor
checks the procedure of documentation and related records. This is an ongoing
process as records are scrutinized every month. At the branch level the branch
manager is held responsible for the performance of his employees. The employees are
9) Investment Policies:
The Bank’s Treasury invests its deposits in profitable ventures. The funds, which are
not required for lending in the foreseeable future, prove to be a source of the Bank’s
investment portfolio. The Bank aims at obtaining the maximum income with the
minimum exposure to risk. The Treasury usually deals in stocks at the national and
the international level. The Treasury deals with international trading. At the national
level it invests in federal investment bonds, treasury bills, national investment units
(NIT) and Federal and Provincial loans. The whole amount of funds generated from
various sources is not invested because it is a requirement of the State Bank of
Pakistan to keep a certain percentage of funds with it as assigned capital. The
Treasury also deals in the sale and purchase of different currencies.
Money laundering is the process by which criminals attempt to hide and disguise the
true origin and ownership of the proceeds of their criminal activities. The term
“Money Laundering” is also used in relation to the financing of terrorist activity
(where the funds may or may not originate from crime). This is a step taken to
legitimize the black money through banking channels. The Standard Chartered Group
has a policy based on dealing with this issue. The group policy states:
a) It is essential, in order to protect its reputation and to meet its legal and
regulatory obligations that the Group minimizes the risks of being used
by money launderers.
Cameras are installed in all the Branches of the Bank covering the entire key areas
e.g. cash management, lockers and ATM. Thus in this way the activities of the Bank
The Bank lays emphasis on environmental issues. It is playing its part in increasing
awareness about environmental hazards. It wants to minimize any adverse impact on
the conduct of business on the environment. Therefore, it aims at the following:
(a) Disposing off waste properly.
(b) Creating awareness amongst its customers.
(c) Conducting its business with minimum use of energy and other resources.
(d) Supporting environmental friendly organizations.
The Gulberg Branch celebrated a “Clean and Green” week in October this year. The
Bank was decorated with sceneries and plants. Customers were given seedlings to
plant in their gardens. This was done in order to create an interest for the safeguard of
the environment amongst the customers. Some of the newly established Branches of
the Bank have also taken a solid step in this direction e.g. the Defence Branch has
spent Rs. 10 lakhs to purchase and maintain a garden in the vicinity of its Branch
The above-mentioned policies highlight how much emphasis the Bank gives to the
different aspects of its operations. These policies are very important because they help
to direct the procedures and the processes followed by the Bank. The policies are the
guidelines, which are to be referred to all the time.
The bank has revised its lending policy to ensure that it identifies its customers' social
issues and any impact they may have on the natural environment. The bank
This means that the will be more conscious of the way all its customers operate, their
attitude to social standards such as child labor and the impact their activities have on
the environment.
STRUCTURAL DIMENSION
FORM OF INTERDEPENDENCE
SPECIALIZATION
Specialization is low in STGB so that the employee performs a wide range of tasks in
their jobs.
CENTRALIZATION
Centralization refers to the hierarchical level that has the authority to make a decision.
There is centralization in Standard Chartered Grindlays Bank almost all departments
are centralized i.e. most of the activities is centralized to management.
Work staff is highly educated and experience according to their post or job title. Staff
has both formal education and job experience. For multi skill development
management rotate the employees after time to time. Standard Chartered Grindlays
bank have larger professional staff ratio.
SPAN OF CONTROL
DEPLOYMENT OF EMPLOYEES
CONTEXTUAL DIMENSION
THE ENVIRONMENT
It includes all the elements present outside the boundary like customer, government
suppliers and financial community. They all have a clear influence on SCGB and act
to satisfy all of them.
Standard Chartered Grindlays Bank has clear cuts goals and strategies to have an edge
on its competitors and to be a market leader and always at the top to serve.
ORGANIZATIONAL CULTURE
A culture is the underlying set of key values, beliefs, understandings and norms
shared by the employees. Standard Chartered Grindlays Bank has a good corporate
culture having a touch of clan culture. It has a good family friendly environment that
pertains to ethical behavior, commitment to employees, efficiency or customer
services and they provide the glue to hold organizational members together.
ORGANISATION CHARTS
Organization charts are not, and are not intended to be, milestones; rather they are
useful tools to allow the management to plan and control the headcount of business,
and to allow the planning of recruitment. They must be working documents, and as
and when changes to the structure are agreed, and/ort changes to headcount are
approved, they should be updated accordingly.
HEADCOUNT CONTROL
We are all aware that the Group pays attention to overall headcount, and this
translates into a requirement for a workable headcount control process for each
country/business. Indeed, headcount budget are one of the targets against which
country and business managers are measured. As stated above, agreed organization
charts, which reflect accurately what has gone into the budget, are the single best
methods of headcount control, and should be viewed as such.
All the 21 branches of Standard Chartered Grindlays are on line through BBS by
which they can access any type of required data when needed and of any branch of
Pakistan. This system is very much helpful and advanced. They can access the
Meetings:
Face to face meeting and group meeting are held whenever required for better
communication.
The whole system is almost computerized all sort of data regarding accounts and
others documentations is also computerized.
MANAGEMENT STLYE:
The management style observed at the Standard Chartered Grindlays is more like an
autocratic one. Although in some departments it does give a glimpse of a democratic
style to some extent.
Autocratic Style:
The management of Standard Chartered Group believes in the centralization of
authority and unilateralism of decision making. All the work methods are dictated to
the employees limiting their participation in majority of the matters. Almost all the
decisions are taken at the head office located in Karachi and the instructions follow to
all the branches which are to work accordingly. I have observed that, at times, even
for a very trivial matter they have to wait hours for the instructions and operations of
Karachi Head Office which creates chaos and demoralizes the employees. It does give
the feeling of working in an environment with both hands tied and limited circle to
move and operate.
Democratic Style:
At SCG, there are a few departments in which democratic style of management is
being followed. The departments work in the form of teams with a team leader who
delegated authority with limitations. Any operation exceeding those limits is to be
referred back to Karachi Head Office and is to be finally executed by them. However
the team leaders are free to take decisions within the limit sanctioned to them.
In short, we can say that Standard Chartered Group is highly centralized in decision
making with the limited delegation and employee participation.
There is no place without power and politics but in certain places it is in the form of
authority (legal) which dominates and rules others so is the case with Standard
Chartered Grindlays Bank, authority is more dominant rather than politics.
In Standard Chartered Grindlays Bank authority exists along the formal chain of
command, and positions at the top of the hierarchy are vested with more formal
authority than are positions at the bottom.
Some of the legitimate power is given to the middle managers so that they can be
highly productive and initiative and it can enhance empowerment among workers. But
empowerment is very little in SCB i.e. power sharing. Power is authorized according
to positions and rank of the job.
The higher authority in Karachi branch does decision-making of all sorts. Decisions
making in Standard Chartered Grindlays Bank is of programmed type i e. repetitive
and well defined and Conflicts are resolved through negotiation and group meetings.
The decision making in Standard Chartered bank is highly logical and rational. Due to
centralization higher authorities make most of the decisions but in case of unclear
problems decision-making is shared to some extend with other managers.
During my internship I never observe any huge conflict in the bank but small conflicts
do occurs. Conflicts are there whenever there is more than one person so if a large
number of people are working under a single roof conflicts are there.
The environment of the Standard Chartered bank is not always stable it changes
according to the environment out side the domain chances. So the uncertainty arises
and disputes may occur. But it will solve immediately to make the environment
certain and stable.
Moreover to avoid conflicts face-to-face meeting are held after time to time with other
departments heads and list what he or she expects from the other departments.
In Standard Chartered Grindlays bank there is family friendly atmosphere and all
work as a member of a single family so they have no psychological distances with in
them and conflicts are there.
They are able to customize a suite of risk management products and services as well
as package debt financing solutions to meet the unique needs of each of their
customers. Through more than 150 years of emerging market experience, their in-
depth understanding of the local market is unrivaled by most other financial
institutions, especially in the currencies of Asia, the Middle East and Africa.
TASK ENVIRONMENT
Market sector have a direct influence on the bank as the market criteria changes so is
the bank’s environment, human resources have also affect the environment domain
the bank tries to attract the highly skill and qualified personnel .The customer have its
own importance to the bank, the bank is due to its customer and is for its customer.
The international sector has also a direct influence on the bank. Like advance
technology, communications, ideas and capital investment, business strategies,
products and services flow freely and rapidly around the world. Standard Chartered
Grindlays bank has to update it self according to the environment. The customer
invests its money in the bank and the bank flourished and provides products and
services to its customer.
GENERAL ENVIRONMENT
The general environment of the Standard Chartered Grindlays bank includes the
government, socio cultural, economic conditions, technology and financial resources
sectors.
The bank regulates according to government rules and regulation and the criteria
changes whenever the government regulation or criteria changes. The economic
Beside all this the environment of the Standard Chartered Grindlays bank is unstable
and organic in nature. They changes occurs more frequently than any other competitor
bank.
MARKETING MIX
Standard Chartered PLC follows an Adapted Marketing Mix as the marketing mix
elements are adjusted to each target market.
Marketing mix covers
1. Product & Service Mix
2. Place
3. Price
4. Promotion
PRODUCT MIX
PERSONAL BANKING
• Managing Personal Needs
• Deposits
• PKR Deposits
• Current
• Saving
• Fixed
• Foreign Currency Deposits
• FE12
• FE 25
• FE 31
• Loans
• Over Draft
• Personal Loans
• Auto Loans
• Lifestyle Loans
• Personal Banking Plans
• Priority Banking
• Services
PERSONAL BANKING
Managing Personal Needs
PRODUCT CODES:
Saving Accounts
Supersave Account 01
Privilege Account 26
High Yield Account 18
Flex Account 08
Current Account
Tijarat Account 10
SAVING ACCOUNT
There are five types of saving account offered at SCB/SCG namely:
• Super save
• Flex
• High yield
• Privilege
1. SUPERSAVE
A tiered rate structure automatically adjusts return relative to the balance, resulting in
higher absolute returns. This simply means, the higher the balance, the more profit
one will earn.
PROFIT CACULATION
The profit on super save Account is calculated on the minimum balance held in the
account each month, every month for six-month periods. Which means, even if the
balance drops below the minimum requirement of PKR 25,000, it will continue to
earn profit at the lowest tier .On the other hand, the more the balance grows, the
higher he rate of return.
PROFIT PAYMENT
Based on calculations, the profit will be credited to the account on a six monthly basis
in January and July.
Anyone above 18years old with an identity card or a passport can apply with a
minimum opening deposit of PKR 25,000.
With no transaction fees and no penalties for low balances, one can open a flex
account for as little as one wish.
Put the salary to work from the day it credited. Profit on flex will be calculated on a
daily balance basis. This means, one benefit on his/her closing balance every day of
the month and not the minimum monthly balance typical of other accounts.
Based on daily calculations, the profit one earns on his/her daily balance will be
credited to the account at the end of each month. One doesn’t have to wait for a series
of months to earn the profit.
COUNTER TRANSACTIONS
By using ATM and phone banking facility, avoid the over-the-counter fee of Rs.50/-
per transaction (for withdrawals only).
Flex offers a first chequebook free of charge. How ever, subsequent chequebooks will
be charged Rs.10/-per leaf
3. HIGH YIELD
“Reap the dual advantage from a current account that works like a saving
account.”
This account is ideal for businesses and offers a dual advantage of earning profit
without sacrificing liquidity as one has full access to his/her savings at all times. A
high-yield account holder also qualifies for 24 hours banking giving day and night
access to his/her savings throughout the year-even on holidays.
A tiered rate structure automatically adjusts return relative to the balance, resulting in
higher absolute returns. Which simply means, the higher the balance, the more will be
the profit.
The profit on high yield account will be calculated on a daily basis. Which means,
benefit on the closing balance every day of the month for as, long as the account is
held.
Based on daily calculations, the profit one earns on the daily balance will be credited
to ones account at the end of each month.
Anyone above 18years old with an identity card or a passport can apply with a
minimum opening deposit of PKR 500,000.
4. PRIVILAGE
“The king of accounts offers you liquidity and growth at the highest rank”.
Ideal for the individuals, Standard Chartered Privilege Account offers the dual
advantage of earning profits without sacrificing liquidity. It’s an account tailored to
the customer’s status and financial position. In other words, it matches with the
financial status of the customer.
A tiered rate structure automatically adjusts the return relative to the balance, resulting
in higher absolute returns. Which simply means, the higher the balance, the more will
be the profit.
PROFIT CALCULATION
The profit on Privilege Account will be calculated on the minimum balance held in
the account each month. Which means, even if one balance goes below 500,000.the
profit will be calculated at the lowest tier rate for that month.
Anyone above 18years old with an identity card or a passport can apply with a
minimum opening deposit of PKR 500,000.
CURRENT ACCOUNT
There is presently only one current account named
• Tijarat
TIJARAT
“Access your business and trade account from 21 online branches, countrywide.”
Variety in the product line provides surety of the success of the enterprise. Standard
Chartered new current account, Tijarat, a customized product, is ideal way to support
the business. With so many services especially packaged for convenience, security
and flexibility of businessmen, Tijarat ensures that the success of their businesses is
its business.
WELCOME PACK:
To ensure immediate usage, the “welcome Pack” contains a cheque book, ATM card
and PIN (Personal Identification Number), TIN (Telephone Identification number),
cash and cheque deposits slips at the time of account opening. So one doesn’t need for
days to receive the financial collateral.
Tijarat is ideal for people engaged in business including sole proprietors, retailers,
wholesalers, distributors who qualify if they are 18 years old or above with an ID card
or a Passport.
Tijarat is opened and ready for business with a minimum balance requirements of
PKR 200,000/- on a current account basis.
As an incentive, Tijarat also waives the processing fee for auto loan.
Tijarat automatically issues a free ATM card (with no annual fees and the highest
withdrawal limit of PKR50, 000) to access funds 24 hours a day, 7 days a week, 365
days a year.
MNET
MNET-a collaboration with MCB has opened new avenues of greater convenience
and accessibility for its customers. Now the customers can have access over 100
additional 24 hour ATMs, 356 days a year, around Pakistan. MCB ATMs bearing the
MNET, has made it easier, convenient, and simpler to withdraw cash and check the
account balances.
BARGAINS
A free ATM card also lets to avail exciting discounts across the favorite outlets in
Karachi, Lahore and Islamabad as part of its bargains network.
LEVIES
• Taxes and Zakat are applicable according to the government of Pakistan’s
regulations.
• Bank charges and fees are levied according to the bank’s schedule of charges.
• Out of pocket expenses are collected for all banking services and otherwise
covered by the schedule.
• Charges may be collected in Pak Rupee or Foreign Currency in all categories.
• Courier charges and postage charges are also recovered.
• Correspondent bank charges are recovered at actual.
• Charges relating to corporate customers may differ as a result of an agreement
between the concerned customer and the bank.
FIXED DEPOSIT
Currently SCB is offering only one account under this head
• Term Deposits
TERM DEPOSITS
“Take home attractive returns short term, long term, all terms, your terms”
CHOICE OF TENURES
With a perfect match of regular income and attractive returns, Standard Chartered Pak
rupee term deposits are 7 days, 14 days, 1 month, 3 months, 6 months (conventional),
and 1,2, 3 years conventional tenors.
PERFECT BALANCE
Tiered rates have been structured in such a way that higher balances offer higher
expected profits carving its way to a perfect balance.
DEPOSIT OF FUNDS
Funds can be deposited by cheques, cash notes, remittances and/or transfers from
other accounts.
PROFIT PAYMENT
There is an option of earning profit monthly, quarterly, six monthly, annually or to
simply receive a lump sum amount at maturity and can be paid out in PKR
transactional account for easy access.
FE 12
These are the foreign currency accounts which have been marked frozen from 28th
May, 1998 by Nawaz Sharif Govt. under circular No. 12.
After the Nuclear Test experiment conducted by Pakistan, Nawaz Sharif Government
on 30th June, 1998, the operation of all the foreign currency accounts were freezed in
anticipation of strict response from the outside world and resultant tremendous
increase in the demand of foreign reserves.
FE 25
Under FE Circular No. 13 dated June 2, 1999 Nawaz Govt. allowed the public to open
foreign currency accounts and facilitate to operate them whenever they want.
FE 31
These are the customer extension accounts. Afterwards Banks’ customers were given
permission to extend their account. The permission was given under circular 31 to
operate frozen circular accounts.
OTHER FACILITIES
LOANS
SCG, Tufail Road branch deals in three types of loans namely
• Auto loans ( detail given while discussing departments)
• Personal loans
• Lifestyle loans
• Over drafts ( detail given while discussing departments)
PERSONAL LOANS
“Time to bounce back and Spring onto life’s opportunities.”
Standard Chartered’s Personal loan provides the opportunity to cash in on boosting
the purchasing power.
The Benefits:
We know that the needs and the wants of all the people are not unanimous. SCB’s
Personal Loan, the easiest and cost effective financing, has been specially designed to
meet the individual requirements and circumstances.
Who is eligible?
THE PROCEDURE:
To get a personal loan one has to simply
submit the completed loan application
submit the necessary documents
PROCESSING FEE:
A processing fee of
1 % of the loan amount or
Rs. 1500
DISBRUSEMENT OF LOAN:
SCB’s team takes all the efforts to reduce the time taken in loan approval and
processing so that the funds are available at the right time.
REPAYMENT OF LOAN:
In order to make the loan repayment an easy and hassle free activity, the same account
in which the loan amount was deposited, is used to pay back in equal, monthly
installments through standing instructions.
PAY-BACK PLANS:
SCB’s personal plans provide flexibility to choose a repayment period between 12
and 36 months depending on the individual earning capacity and circumstances.
Note that all these monthly repayment plans are subject to change.
CREDIT CARDS
(PLASTIC MONEY)
“the one to choose”
Credit cards are defined as
“An interest free loan for a specific time period with revolving facility”
There are mainly two types of credit cards which Standard Chartered bank offers,
these are
Master card
Visa classic
Visa (Gold /Silver)
Visa Classic
One can also avail “Photo Cards”.
GLOBAL ACCEPTABILITY
Standard Chartered credit cards are globally accepted:
MASTER CARD
Over 16.8 million establishments in 160 countries (including 10,000 in
Pakistan) around the world displaying the Master Card logo accept it.
VISA CARD
Acceptable at 18 million establishments worldwide with 10,000 in Pakistan.
SERVICE
INSTANT CASH
Standard Chartered Credit cards allows to with draw any mount up to 75 % of
the available credit limit assigned.
For Master Cards 456,000 ATMs with 16 ATMs in Pakistan
For VISA Cards 562,000 ATMs with 16 ATMs in Pakistan
SUPPLEMENTARY CARDS
PROCESSING TIME:
Processing of the application and delivery of the credit cards generally takes 3 to 4
weeks to complete.
REVOLVING FACILITY:
By paying a nominal amount of only 5% of the amount due or Rs. 500, whichever is
greater by the payment date, the balance can be revolved for further financing
• For Master Card, 10 days
• For Visa Card, 21 days
Note that if the Bank Statement is Typed/ Handwritten/ Photocopied, they should
contain
1. Bank Stamp
2. Signature of the Authorised Signatory
3. Code of Authorised Signatory
Karachi
Standard Chartered Grindlays Bank
1.1. Chundigar Road
Lahore
Standard Chartered Grindlays Bank
Tufail Road Branch, Cantt.
Islamabad
Standard Chartered Grindlays Bank
1 Diplomatic Enclave
SECURITY:
This card also offers a complimentary travel accident cover up to Rs.3.5 million.
Annual fee of Rs. 1000 is charged for Standard chartered and Standard Chartered
Grindlays account holders.
Standard Chartered master card is delivered through carrier service.
BANKING SERVICE
Dial ‘a’ draft:
One can also place an order for draft or other payment instructions over the
phone.
Auto Debit:
It provides the option of making the minimum or 100% payment outstanding,
as specified on the monthly bank statement, through Standard Chartered
Grindlays account
SECURITY:
Complimentary Travel Inconvenience:
If the ticket is purchased on Standard Chartered Visa credit card, the inconvenience
caused by flight delays and lost baggage is reduced.
• If the flight and baggage is delayed more than 6 hours you can have
refreshments, meals etc., and charge it on the card. Charges up to Rs.10,000
can be claimed for reimbursement.
• In the event of lost of the baggage, the card can be used to buy the necessary
items in the baggage and reimbursement claim can be made up to Rs. 20,000.
TRAVEL COMPANION:
Standard Chartered Credit cards simply travel and eliminate the need to carry cash.
HOTEL PRIVILEGES
As a Standard Chartered card member one can enjoy a complete range of benefits in
many prestigious hotels like
• Accommodation: 50 % discount
• Dining: 15 % discount at any restaurant
• Gourmet Shop: 10 % discount
• Health Club membership: 20 % discount
• Laundry & Dry Cleaning: 15% discount
• Accommodation: 50 % discount
• Dining, Laundry, Cake Shop, Health Club, Rent-a-car and Beauty Parlor: 20
% discount
MARRIOT
Ramada (Dubai)
CAR RENTAL:
Credit cards offer an exclusive 25% discount on car rental services of Europe cars in
Pakistan and abroad.
TRAVEL PACKAGE:
A SCB’s credit card holder also has the privilege to the exclusive travel
packages offered by Akbar Group of Companies (representing more than 18
major international airlines as Swissair, Singapore Airlines, Japan Airlines,
Aitalia, Royal Jordanian, and Srilankan Airlines and so on) from time to time
and has the world largest reservation system.
FAST FOOD:
SPORTS WEAR:
Sole distributorship of Nike in Karachi and Lahore.
CIP LOUNGE:
For international travelers, SCB offers Commercially Important Person (CIP) Lounge
at Karachi International Airport with
• Free Secretarial services
• Free buffet
• Internet connection
• Reading materials
• 24 hours patronage
Joining fee for the Visa Card (gold and Classic) has been waived for Standard
Chartered and Standard Chartered Grindlays account holders.
PHOTO CARDS
SERVICE-MIX
A no. of valuable services are offered at SCG such as
PHONE BANKING
“Bank on your phone anytime, anywhere.”
One doesn’t have to wait to visit the branch or stand inline. With most banking
services at fingertips, the bank is only one call away.
A TIN (Telephone Identification Number) is assigned to each account holder in order
to ensure confidentiality.
• Phone banking ensures getting to the bank without leaving for the bank.
• It allows an easy, hassle free access to the account without wasting the
valuable time and energy of the customer.
• All the simple account inquiries are handled by the trained and efficient staff
on the phone.
• Currently available in three major cities of Pakistan: Lahore, Karachi and
Islamabad.
• The following services are available on the phone:
Checking the latest account balance
Getting an update of the last 5 transactions
Placing a request for a cheque book
Requesting the mail or fax of a statement
Transferring funds from one account to another provided the
master number is the same
EVENING BANKING
Standard Chartered banking has broken the orthodox nutshells and now the branches
are open for customer dealings from 9 A.M. till 5 P.M. Evening banking has brought
convenience for those who find it difficult to get free time in the morning to visit the
bank.
E-STATEMENTS
“Have your bank statement mailed to you-anywhere and everywhere.”
• Any person having an e-mail address can have his e-statement mailed by the
bank resulting in minimum paper work and maximum convenience.
• No charges are debited by the bank for this service.
• One can have the privilege of getting e-statements delivered at as many e-mail
addresses as one likes.
• It ensures confidentiality and security as the others will not be having any
access to the bank statement which seems to be a major concern for certain
account holders.
• Frequency of the e-statements depends on the instructions given by the
customer in the application form.
BARGAINS
“Get discount with your atm card as you shop throughout Pakistan.”
MONEYLINK
“Get super-convenient complete banking in the time it takes a red light to turn
green.”
Standard Chartered’s ATM’s network, with over 150, 24 hours ATMs, provide super
convenient banking to its account holders.
Standard Chartered Group ATM bearing the MNET sign provide the following
facilities to its account holders:
CASH WITHDRAWALS:
Cash can be withdrawn from both the Standard Chartered and the MNET ATM
Network in the country, 24 hours a day, 365 days a year subject to the maximum
withdrawal limit. However this limit can be extended depending on individual
requirements.
SPECIAL INSTRUCTIONS
Use the deposit envelops as an electronic mailbox to issue written instructions to the
bank regarding any of accounts.
FUNDS TRANSFER
Funds transfer is also available from one account to another account in the same
branch with the full control of cash flows.
PIN CHANGING
The PIN assigned for each current and saving account can be changed at any time if
the holder feels that it is no more secure.
MNET
MNET-collaboration with MCB has opened new avenues of greater convenience and
accessibility for its customers. Now the customers can have the access to over 150
additional 24 hour ATMs, 356 days a year, around Pakistan. MCB ATMs bearing the
MNET has made it easier, convenient, and simpler to withdraw cash and check the
account balances.
PRICE
INDICATTIVE PKR DEPOSIT RATES (p.a.)
From 1st July 2002 to 31st December 2002
SAVING DEPOSITS
Supersave
Tiers 6 monthly APR
0-24,999 0.01 0.01
25K-99,999 0.03 0.0302
Privilege
Tiers monthly APR
Staff Account
No minimum balance requirement
Profit calculated on Daily Balance
Flex Account
Rate Monthly 2.0%
No minimum balance requirement
Profit calculated on Daily Balance
No product for salaried persons
TERM DEPOSITS
Maturity
200K-<2000K 2.50% 2.53%
2000K-25000K 3.00% 3.04%
14 Days
Tiers Maturity APR
1Month
Tiers Maturity APR
200K-<2000K 4.0% 4.07%
2000K-25000K 4.50% 4.59%
3 Months
Tiers Maturity APR
monthly quarterly
Special 3 Months TD
Tiers Maturity APR
6 Months (conventional)
Tiers Maturity APR
1 Year (conventional)
Tiers monthly quarterly 6 monthly annually
2 Year (conventional)
Tiers monthly quarterly 6 monthly annually maturity
3 Years (conventional)
Tiers monthly quarterly 6 monthly annually maturity
USD
Savings
Tier FE25 Frozen
10,000+ 0.50% 0.00%
Minimum balance requirement: USD 10,000
Term Deposit
Term 1 Month 3 Months
Nature FE25 FE25
10,000+ 0.50% 0.50%
Minimum balance requirement: USD 10,000
GBP
Savings FE25 Frozen
10,000+ 0.00% 0.00%
Minimum balance requirement: GPB 10,000
Term deposits are not offered in GBP
EURO
The bank offers FE25 in currencies like USD, GBP and EURO only.
No mark up is offered on all FE25 deposits except for USD deposits.
No markup is offered o all Frozen FCY deposits.
A negative sign with the interest rate in case of frozen end extension EUR &
JPY Deposits is indicative of the administrative cost charged for their
operation.
PLACE
Standard Chartered Bank, a local international bank gives the peace of mind
that only comes when you're at one of the world's leading banks. You can
avail Standard Chartered Bank's value-added, award winning services across
21 branches in Pakistan's 8 major cities.
1. Karachi
2. Lahore
3. Faisalabad
4. Ialamabad
5. Rawalpindi
6. Sialkot
7. Peshawar
The branches marked with an asterisk (*) offer exclusive Priority Banking
Centres. Branches marked with ** show 24-hour banking with ATMs.
BRANCH NETWORK
KARACHI
Karachi's Clifton* Branch
10 Khayaban-e-Roomi, Clifton
PO Box 3888, Karachi-75600
Tel 21-5867777
Fax 21-5873642
Lahore Defence**
Tel. 589907-77
Fax: 5899126
FAISALABAD
Faisalabad's Railway Road Branch
Railway Road, PO Box 20
Faisalabad
Tel 41-619056
Fax 41-642012
ISLAMABAD
Karachi Centenary**
Tel. 4538044-5
Fax: 4538043
Karachi Clifton**
Tel. 5871891-2
Fax: 5831798
Karachi Gulshan
Tel. 4980906
Karachi Sheraton**
Off-site ATM located in the main body
LAHORE
Lahore Gulberg**
Tel. 5763453
Fax: 5877004
AUTO LOANS
Authorised Dealers :
Toyota Western Motors C-38, Estate Avenue, S.I.T.E, Karachi Tel: 21-2564531-4
Toyota Southern Motors Head Ofiice: Plot No. 13, Sectoir 23 Korangi Industrial
Area, Karachi Branch Office: 118, Defence Housing Authority, Phase 1 Main
Anjum Motors 151-B, Block-2, PECHS Khaild Bin Waleed Road, Karachi Tel: 21-
4555723-6
Macca Motors SL 0809 Main Rashid Minhas Road Gulshan-e-Iqbal, Karachi Tel:
21-4588991-5
World Automobiles 3-A, Main Shahrah-e-Faisal Opp. Awami Markaz, Karachi Tel:
21-4540980-7
Toyota Eastern Motors 118-Rashid Minhas Road Gulshan-e-Iqbal, Karachi Tel: 21-
8114077 and 8114177
Lahore
PROMOTION
Standard Chartered Bank promote its products through various medias, different ads
are made to promote new products and to introduce different packages offered on
different occasions Moreover billboards on public places are upright, in newspapers
different printed ads were published from time to time and the same case with the
electronic media, ads are given on highly favorite and. famous channels of the media
to attract the customer through out the world.
Standard Chartered Bank has many ways to promote its product and services. Some of
the common promotional strategies are:
Advertisements
Sales Promotion
Public Relations
Personal Selling
Direct Marketing
ADVERTISEMENT:
Advertisement is used by the bank to build up a long term image and to trigger quick
sales of the products and services it offers and the Media used includes both
The Bank follows the policy of aggressive marketing of its products in order to
convert the potential customer into the loyal customers of the bank and advertisement
is the one which is the most effective as it efficiently reaches geographically dispersed
customers. The management takes all possible steps to keep its customers in touch
with the developments taking place in & outside the branches in the form of new
products, innovative services, and attractive offerings. The Bank resorts to various
means of promotion of its products and services such as:
(a) Website
(b) Advertorials ( Print Adds)
(c) Television
Infomercials
sponsorship
i. Young Entrepreneurs of the world telecasted by BBC World
ii. Documentaries sponsored on the National Geographic Channel
(d) Newspapers
Hajj & Umrah Scheme
(e) Magazines
(f) Billboards & Hoardings
Placed at the major commercial areas of the city such as Defence, Jail
Road, Upper Mall etc.
SALES PROMOTION:
Sales promotion tools showing the incentive and benefits for the customers are also
used by the bank on timely basis. The schemes such as
Free services such as phone banking, e-statements etc.
Discounts offered at the qualified outlets for being a part of SCB
PUBLIC RELATIONS
SCB believes in maintaining good public relations and positive
publicity as it helps in reaching out for the prospects who prefer to
avoid sales people and advertisement.
Publications, events, news, speeches and public-service activities are
use from time to time.
Sponsorships such as organizing a walk in support of pure and clean
environment are the tactics which help in building up strong public
image.
Children’s day at Wonderland on 19th May, 2002 sponsored by SCB
PERSONAL SELLING
SCB adopts the personal selling tools for building up the buyer preferences,
conviction and action (generally the last stage of the buying process).
Sales representatives are trained in developing personal relations with
the prospects and ultimately converting them into the loyal customers.
They have customers’ best interests at heart. Some other tactics are
Brochures are presented to various visitors to the bank
Call Centers have been established to provide information and satisfy
queries.
DIRECT MARKETING
Promotional Letters mailed to potential and existing customers the
Bank’s products.
Telemarketing to potential and existing customers.
Besides this the Marketing Department of the Bank performs a very vital job. It
dispatches its sales representatives in the market to promote itself and introduce a new
clientage to the Bank. These sales representatives are given targets to meet over a
specified time period. An added advantage of this process is that the bank gets direct
feedback from its customers as well since these sales personnel also contact existing
customers
Apart from the sales representatives, the bank’s internees also play a major role in
promoting the bank’s credibility. The internees placed in the Direct Sale Department
of the bank are kept busy in conducting surveys and preparing their research report on
the basis of their integrated survey results. They visit major commercial areas across
the city getting the views of the people regarding the products it is launching, the
services it is providing, the facilities it is offering and the contribution it is paying in
the uplift of the economy and common man as well. Not only they get feed back about
its current performance but also what the general public aspires to be in the future.
The information such as
the product lacking in the current product mix offered by the bank
the updation required in the existing products/services
the defects found in the services and how to eliminate them
the standard of customer dealing and so on.
are generated through these surveys which help in further generation, modification
and elimination of a product or service.
Thus by following these methods the Bank is able to keep the public as well as its
customers informed about its new innovations and product offerings. Since the Bank
targets the upper middle and the rich class so it has to offer such products, which are
useful to them.
PRODUCT-MIX CONTRACTION:
COMPETITIVE STRATEGIES
Competition is very dominant now a days and every firm is trying to have an edge on
others. Standard Chartered is aware of its competitors its competitors include CITY
BANK, ABN AMRO and others.
Standard Chartered Bank tries to satisfy its customer and keep an eye open for
improvements and innovations. The head office in Karachi makes these strategies to
compete the growing environment. It is not necessary that Standard Chartered Bank
What the competitors try to implement Standard Chartered bank tries to implement it
in a more innovative and advanced form. All sort of competitive strategies are made
by higher authorities.
PRIMARY RESOURCE
As with any professional service, the primary resource they offer is the experience of
their staff brings to research. Their research process utilizes a ‘participative approach’
- and work in close conjunction with Customer representatives.
DATA COLLECTION
They design research instruments, which ask the right questions using the best
methodology, such as,
In-depth Interviews,
One-on-One interviews,
Telephone Interviews,
Central Location Tests,
Mall Intercepts,
Mail Surveys,&
Observation Formats.
STUDIES INCLUDE
Attitude Research --------Customer Satisfaction
Advertising Pre-&-Post Evaluation ---Corporate image studies
Concept and Product Development ---Pricing
Creative Solution Finding----------------Social marketing research
Media Research------------------------------ Audit
REPORTING
Reporting of study results culminates in the development of specific marketing
recommendations. Their aim is to provide workable solutions to marketing problems
based on sound research.
MARKETING-MIX POLICIES
According to Berry
“The most important contribution the marketing department can make is to be
exceptionally clever in getting everyone in the organization to practice marketing.”
PRODUCT
Banks are non-manufacturing concerns which deal in those products that are highly
intangible, perishable, inseparable, variable and client based. Their products meet
both
• a personal need ( a saving account like High Yield)and
• a business need ( a current account like the one offered at SCB named Tijarat,
or the overdraft facility to finance the working capital requirements a
business).
The various product policies followed at the Standard Chartered Grindlays are:
• The policy is to constantly figure out how to give the customers more for less.
• The emphasis is on the development of new, innovative and creative product
for its present as well as potential customers on timely basis.
PRICING
DISRIBUTION
• Make its ideas and services available and accessible to target population.
• To establish new branches in order to reach out for the population spread out
over far distance places.
• Providing a Banking Network that provides access to world-class products
and service portfolio across Pakistan.
• To help people enjoy its services without expending unreasonable amount of
time, effort and/or money.
PROMOTIONAL POLICIES
The bank frequently conducts surveys in the market to know the following:
(a) What are its competitors offering?
(b) What are the requirements of target market?
(c) How are its current products performing in terms of customers’ satisfaction?
Keeping these factors in mind, the Bank launches new products in accordance with
the dynamic nature of the markets. The Bank reviews its interest rates from time to
time so that it offers the best deal to the customers. The concept behind this is to
introduce new customers and generate more deposits so that the Bank gets more
funds. More funds ultimately means more lending which is the ultimate goal behind
raising deposits and this leads to more revenues in return.
.
The Bank needs to continue these practices in order to increase its business circle and
to progress in the aggressive marketing environment of the banking sector.
• A huge amount of funds are allocated each year for the advertisement and
promotional activities.
These policies can be implemented by providing the right product and service to the
customer at the right place, at the right time, at the right price. It is necessary for the
managers to keep in touch with consumers, observe their needs and develop products,
which meet their needs
DEPARTMENTS
DEPARTMENTS
This department provides all sorts of products and services discussed in the Product &
Service Mix (Section of Marketing Mix). Further details are given ahead.
Collection
This department is located in Karachi Head office for the collection of outstation
cheques. The whole collection process is performed by there. Details given ahead
( while discussing BSU).
Verification
This department is located at the Mall Branch, Lahore. The main work vested into this
department is to conduct physical verification of the loans, specially the clean loans
against which there is no security/collateral received by the bank. Since special care is
required in disbursing clean facility, this department has been designed to deal with
this sole responsibility.
Personal Loan
Personal loans have also been discussed in detail in the Product Mix (Marketing Mix
Section) of the report.
Telemarketing
Telemarketing, as the word signifies refers to the process of marketing the products
and services on telephones. The department vested with this responsibility has been
placed at SCB, Mall Branch, Lahore. The department is responsible to call various
target customers, generally the well known businessmen and industrialists and to
convince them to take the benefits of the world class portfolio of products and
services offered at SCB.
This department deals in the accounts of the banks and various financial institutions.
The whole services relating to the account opening to the operation of various
accounts of the banking and non-banking financial institutions are conducted by this
department
Administration
Consumer Service Unit is the department placed in the Head office Karachi assigned
the responsibility of all the back office operations such as
• Govt. securities,
• Credit Cards
• Operations etc.
Consumer and Institutional Banking Trade service deals in the services to the general
consumer and institutions such as
Exports;
Export L/Cs
Export Collection/ Bills
Credit Bills Negotiated
This department is located at the CB, Tufail Road, Lahore. This department provides
the loan for owing the car of ones liking by selecting the monthly payment plan
suitable for the current earing patterns of the borrower.
The further details have been provided in the section of “Departments at SCB, Tufail
Road Branch”
FOR PARTNERSHIP
NIC copies
FOR TRUST/ASSOCIATION
NIC copy
Request letter
Legal opinion
Trust deed (reg.)
Resolution from of Trustee / Authorized Personnel
The names and signatures of any of the following authorities must be present on the
account opening forms alongwith the signature of the branch manager:
o Personal Financial Consultants (PFC)
o Customer Relationship Manager (CRM)
o Direct Sales Assistant (DSA)
o Area Relationship Manager (ARM)
MINOR’S ACCOUNT
“A person is regarded as minor who has not attained the age of 18 years.
Under section 3 of majority act, 1875, if a competent court of law appoints a guardian
of his person or property or both before age of 18 years, the majority extends to the
age of 21 years.”
Special Instructions:
The guardian will continue to operate the account even if minor attains the age of
majority
Documents:
• National identity card of guardian
• Form “B” OF MINOR
• In case the guardian is appointed by the court of law then attested copy of
guardianship certificate be obtained on record.
Special care
• The age of minor should not be recorded either in account opening form or
any other document.
• In case the account has been opened under the directives of court, operations
should strictly be allowed in accordance with the clauses of guardianship
certificate.
• No overdraft is allo0wed I minor’s account.
Special instructions:
Personal withdrawal
Documents:
Two attested photograph to be obtained one for pasting on AOF form and other on
S.S card.
Thumb impression:
Male left hand thumb impression
Female right hand thumb impression
Special care:
• Before opening such account illiterate person should be informed that he /she
cannot issue cheques in favor of any other persons.
• It should be ensured that that illiterate person should not be allowed to operate
the account unless he/she personally comes to the branch and put his /her
thumb impression in the presence of bank officials.
• Accounts of persons signing in raw hand must also be treated as accounts of
illiterate persons.
• Accounts of illiterate “Pardah Nisheen” ladies not willing to give photograph
should not be opened.
INTRODUCTORY REFERANCES
FOR OPENING THE ACCOUNTS
As soon as a person opens an account with the bank, the banker customer relationship
is established. In such situation this is advisable the banker should not open new
It is not sufficient to obtain the reference but its genuineness must also be verified.
Omission of this may have serious consequences. In practice the bank see that there is
tough competition among bankers for procurement of deposits, so to press a
prospective new customer to find the desired reference may offend him, yet he is to be
welcomed by the banker as a source of fresh deposits. But these practical difficulties
have to be handled tactfully because the risk involved carrying out this requirement
partially or wholly may lead to undesirable results.
Customer Name :
The documents should contain complete name as mentioned in original ID card /other
business documents.
Address:
Enter the complete business/residential address. Prominent address identification
marks can also be used for ease of physically locating the address.
Contact Numbers:
Enter home, official, mobile, fax number and e-mail address (if available). Bank can
verify the number by giving the customer a courtesy call or by sending him a e-mail.
Special instructions:
Clear-cut special instructions must be obtained from customers. If the customer has
not given any special instruction specified column must be cancelled by drawing a
line, as this column must not be left blank in any circumstances.
Existing/other bankers:
Almost most all the bankers usually have a banking relationship with another bank. In
case of customer who does not have an existing banking relationship, or does not want
to disclose the existing relationship, then it is strongly recommended that at least for
some time this particular account must be kept under observation.
Refer reject:
Customer’s instruction Neither a debit nor a credit.
Convertible Account:
Those accounts held in PKR currency from which demand drafts or pay orders can be
issued in dollars are called convertible accounts.
For having this facility, a requirement of minimum PKR 20 million in the current
account so that the bank can also take the benefit of larger deposits and further
lending. Usually this facility is provided to NGOs as they enjoy special rights.
OTHER FUNCTIONS
Other functions performed by this department are
• Provision of Bank Statement
Collection
Clearing
Internal Transfers (Inputs & Outputs)
Draft (Printing)
Pay Orders
Scanning
Cheque Books Issuances
Stop Payments Instructions
Standing Order Instructions
Traveler Cheque Issuance
COLLECTION
These are the cheques that are drawn on the branches of other banks outside Lahore.
These cheques are sent for collection.
While collecting a cheque for its customers, the bank may come across two different
situations. First situation is that in which there is cheque drawn on a branch of some
other bank located in the cities where there is no branch of SCB while second
situation is of cheque of the cities where there is a branch of SCB.
This is the first situation that might arise in case of collection cheques.
Step # 1
All the collection cheques are properly stamped and verified as discussed above.
Step # 2:
The collection cheques are mailed to CMO (Cash Management Operations)
department located at Head Office, Karachi.
This is the second situation that might arise in case of collection of cheques.
Step # 1:
All the collection cheques are properly stamped and verified as discussed
above.
Step # 2:
Returned Back to
SCB Credit the
Karachi Branch depositor’s account
Returned Back to
SCB
Tufail Road
Branch
Courageous, International, Responsible, Creative…
202
.
Step # 4:
In case of honoring of the cheque, SCB will credit the amount in the favour of
the depositor. If the cheque is returned dishonor then no credit entry is passed
in the favour of the customer. Customer account will be credited after
confirmation of clearing
PRECAUTIONS
Cheque should not be post dated or out dared in any transaction. Cheque is valid only
for six months. Bank should not honor post dated due to certain reasons i.e.
• There may be possibility that balance become nil on that date
• May be customer stops the cheque
• May be the customer become deceased and the account of deceased person
cannot be operated without instructions from the court.
CLEARING
“ A system by which banks exchange cheques and other negotiable instruments drawn
on each other within a specific area and thereby secure payment for their clients
through the Clearing House at specified time” in an efficient way.
TYPES OF CLEARING
Inward Clearing
The cheques received from the representatives of other banks for payment are called
inward clearing.
PRECAUTIONS
A list of the cheques presented for clearing is presented and all the cheques launched
in the clearing are sent to SCB, Mall Branch on the same date. On the very next day
these cheques are sent to State bank’s department called NIFT. NIFT make the
clearance of cheque. The whole clearing process is performed there.
In case the cheque is honoured, the Mall branch credits the customer’s account. In
case of return of the cheque due to any reason the cheque is returned to SCB, Tufail
Road branch. The entry of the instrument returned unpaid is made in Cheques
returned Register. If the instrument is not to be presented again in clearing then a
covering memo is prepared. The covering memo along with returned instrument and
objection memo is sent to the customer who sent the same to his account.
NOTE:
A bearer cheque does not require any discharge. Similarly an instrument in favor SCB
need not be launched in the local clearing.
CLEARING HOUSE
It is a place where representatives of all banks sit together and interchange their
claims against each other with the help of controlling staff of State Bank of Pakistan.
Where there is no branch of State Bank of Pakistan, the designated branch of National
Bank of Pakistan act as controlling member instead of State Bank of Pakistan
The State Bank of Pakistan maintains two major books for clearing house purpose.
House Register
In which the amount and number of cheques received and delivered by each bank is
noted down.
SPECIAL CLEARING
In addition to the normal clearing function at Clearing house it is mutually
agreed to hold an extra clearing at the clearing house on the particular day and
time which is known as “special clearing” It is arranged due to the rush of
work arising out of say ,more Holidays declared by the Central Govt. at a time
, but normally special clearing is held on last working day of half yearly and
yearly closing i.e. 30th June and 31st Dec. every year.
DEMAND DRAFT
It is an instrument payable on demand for which value has been received, issued by
the branch of the bank drawn i.e. payable at some other place (branch ) of the same
bank. In case of agency arrangements, Demand draft can also be issued by one branch
of the bank payable to other branch of the other bank.
PROCEDURE
It is the order of the bank to pay rupees on the demand of the customer presented in
someother city of Pakistan.. For printing drafts and pay orders we will first check the
balance of that person who has requested for demand draft or pay order i.e. it is
covering the charges or not.
If a customer wanted to draw draft from MCB Sialkot and has asked for a DD at SCB,
tufail road branch. Tufail road Dr. the customer account and credit to MCB while
MCB Sialkot Cr. customer account and debit SCB.
SCB has a large number of DDs drawn on the banks located in Multan but not is the
same case in Mian Chunnu. So if there is any DD for Mian Chunnu , then NBP first
confirms either by fax or phone the genuineness of the transaction and then makes the
payment on behalf of SCB.
Third situation-SWIFT/TELEX
Suppose a customer has asked for draft of x amount from ACB bank, situated in
China. The process is done through swift. It is an advance form of telex.
USA (New York) Have file for Pakistan SCB.
In Pakistan,
SCB, Lahore Branch
Dr. Customer Account
Cr. SCB, New York
.
Pakistan SCB
Dr.Customer a/c
Cr. SCB New York
China XYZ bank
Cr.customer a/c
Dr. New York SCB
Singals
currency is involved)
Signals
Swift has assigned codes to all the banks that deal in foreign currency.
SCB code is GRNDPKXXX
PAY ORDER
Pay order issued from one branch only be payable from the same branch. It is
normally issued for payment in the same city. It is normally referred as Banker's
cheque. It is the order of the bank to pay to specific person in whose favors Pay order
is issued. Pay order has no expiry date. In pay orders, the amount is credited first and
then processed, opposite to what happens in cheques.
• Get the application form.
• Issue pay order after recovering cheques.
• Do necessary vouchering.
• Make entry in PO issue register.
• All pay order shall be crossed "Payees account only".
STOP PAYMENT
It is the order of the customer to the bank to stop certain cheque, all the cheque or
even all the transactions of his account. Only if he verifies the transaction then his
account would be operated. Generally these types of instructions are given by the
customers when they have lost a bearer instrument.
It is the order of the customer to make certain payments (monthly, yearly, quarterly or
on certain dates) out of his account.
The bank charges for standing instructions are;
1. Charge per transaction Rs. 500 per transaction + usual charges
on
remittances
2. Amendment Rs. 100 per amendment
3. Default due to lack of funds Rs. 500
If any cheque is returned back, the bank makes an entry in “Cheque Return Register”
Cheque may be returned due to many reasons :
LEDGER FEE
It is the fee charged by the bank for maintenance of account of customer .If the
account of the customer falls below the minimum requirement then bank charges a
nominal amount as ledger fee for administration and paper work.
The bank deducts the following amounts as ledger fee
FCY accounts $ 15 or equivalent in other foreign currency per month
Fee is levied separately on frozen and extension accounts.
Balance requirements:
USD 10,000
GBP 10,000
EURO 10,000
JPY 1,000,000
COUNTER CHEQUE
These cheque are issued according to the instructions of the customer e.g
If he forgot his cheque book at home then counter cheque are issued @ Rs.200/- per
leave but this can be issued up to only the amount of Rs 50000/-
LOCKERS
During my six week internship program, I did not work in the Lockers. So I am giving
a brief overview of this department.
For having the facility of lockers one should have an account in this bank. Beside this
he/she has to fill a “locker rental application form”. A customer has to deposit an
annual rental fee. Annual fee will double if customers are not maintaining a minimum
balance of Rs.25000.
There are four types of lockers available in Tufail road branch of Standard Chartered
Grindlays Bank. These are
Locker purchase fee is Rs. 2000 per locker waived for Priority
Customers on lockers issued w.e.fr. 01-07-02 till
31-12-02)
Breaking charges Actual or minimum Rs. 5000 per locker
Late payment fees 25% of the applicable annual locker rent per
quarter
LENDING DEPARTMENT
ADVANCES
A bank is a profit seeking institution. It attracts surplus balances from the customers at
low rates of interest and makes advances at a higher rate of interest to the individual
and business firms.
Advance made by commercial banks are mainly of three types;
• Overdrafts
• Cash Credit
• Advances against moveable properties such as
Pledge
Hypothecation
LOANS
A loan is an advance made by a bank to the borrower in a lump for a period exceeding
one year from the date and the credit extended is for meeting the long term capital
requirements of the borrower. Loans made by the banks are generally against
immovable property such as
Mortgage
Advances and loans granted by the bank are the most important assets for the bank as
these accounts for a large fraction of the bank’s earnings.
Standard Chartered Bank provided the following credit facilities to its customers;
Fund based
Overdrafts
Non-Fund Based
Letter of Credit
Financial Guarantees
OVERDRAFTS
Lending department at SCB, tufail road branch deals in the fund based facility only
I.e. Overdrafts. I pent last week of my internship program in this department. So I am
going to give a glimpse of what happens while preparing a Credit Proposal Line for
the customer.
Overdraft is the right given by SCB to his customer to draw in excess of his current
account upto a fixed limit. The facility to overdraw by cheques is allowed only in
current account. The customer is given by the option to overdrawn his current
balances either in installments or in lump sum upto the limit fixed by the bank. The
interest is charged only on the negative balance in the customer’s account.
The bank does not provide the facility of overdraw on checking accounts to all of its
customers. The bank
scrutinizes the applications,
examines the credit worthiness of each borrower and
then approves the upper limit to overdraw the current account with security.
The granting of overdrafts to the customers is advantageous to both the parties, the
bank and the customer:
The bank
Earns income by making advances which are mostly secured against.
The Customer
Gets the temporary amount in lump sum or in installments and
also has the facility of repayment in installments. The interest is
charged only on the debit balances.
1. Character
Character refers to the general reputation enjoyed by the borrower judged on the basis
of the past records of the borrowings by the customer.
5. Collateral
In the employment of his funds a bank generally attaches great significance to
the consideration of security. Banker largely discounts on borrowed funds i.e
deposits; therefore, he cannot afford to take undue risks. He guards his
interests by taking securities.
6. Country Risk
The bank accesses the national conditions of the country before advancing any
amount to the client. He considers the various aspects such as
Economic conditions
Political conditions
Social Factors
Legal Aspects
Technological Advancements
Governmental Regulations
7. Currency Risk
It refers to the impact on the repaying capacity of the borrower owing to the
fluctuations in the foreign exchange rates. This factor is considered in case the
borrower is engaged in export and import of raw materials or finished goods.
This & C’s analysis of the customer helps the bank in forming decision as whether to
finance the short term financing requirements of the borrower or not.
Acceptable Securities
The bank grants overdraft to a few selected customers having high credit worthiness.
Bank gives loans on the basis of securities such as:
• Government securities (whether issued by SCB or any other bank)
Defence saving Certificates (DSCs)
Special Saving Certificates (SSCs)
Special US$ Bonds
• Deposits
Foreign Currency Deposits
Local Currency Deposits
The corporate sector gives loan on the basis of inventories, (pledged in some others
bank) and so on. It advances loans against the securities in the form of inventories
such as cotton bales. These cotton bales are also pledged at some other place.
PARTICULARS OF OD FACILITY
CIB Report
On the receipt of the loan application, the first source of getting information regarding
the credibility of the customer is CIB (Credit information Bureau) report from SBP.
This is credit information and a default showing report issued by the SBP about any
customer who is already engaged in the credit taking activities with the banking
institutions.
All the banks are required to obtain CIB report while disbursing a credit facility of Rs.
500,000 or more thus safeguarding the rights of the bank in case of the default of the
customer. However if the limit is below Rs. 500,000, the lending officer has the
discretion to go for the report.
Markup Charges
The rate of mark up charged by the bank depends on two things;
• Nature of the securities
• Size of the securities
Marking of Lien
Lien is the right of the bank to retain the securities of the borrower till the debt due
from that person is recovered in full.
The bank marks the securities under lien as it safeguards the bank’s right against the
default by the customer. The customer cannot encash the securities unless these are
marked “Lien Removed” by the same bank.
• The customer must properly endorse the securities provided as it gives the
right to the bank to liquidate them in case of nonperformance by the customer.
The bank doesn’t accept any security provided it is properly endorsed by the
borrower.
• If the securities provided are the government securities issued by SCB, the
Government Securities Officer puts a triangular stamp of “Securities Under
lien” on these securities.
• However in case the securities are issued by some other bank, the customer
writes an authority letter requesting that particular bank to mark lien on the
said securities in favour of Standard Chartered Bank. This letter which is
known as “Lien Notation Consent Letter” is then handed over to the lending
Mark Up Payment
Like the revival of the limit, the rate of mark up once decided by the credit officers
can be revived before the expiry of the credit term. This means that normally, mark-
up will be charged at the same rate till the date of expiry unless otherwise changed by
the bank. While reviving the facility, the lending officer may continue with the same
rate unless otherwise provided by the terms of the review.
The mark up is charged on the utilized part of the assigned limit calculated on daily
basis but is collected by the bank after three months. A separate account is opened for
the markup expense and the amount is debited to that account. This is done to avoid
compounding of markup.
At the end of each quarter, a reminder notice is served to the customer stating the
amount of mark-up to be paid for that particular quarter. If within 10 days of serving
the notice, the customer does not pay the outstanding amount due, the Bank reserve
the right to adjust the outstanding amount by liquidation of adequate amount of the
underlying securities, without giving any notice to the customer.
Correspondence
The banks deal in the documents. Each and everything must be communicated in the
written form and properly approved by the customer and the bank as the case may be.
The lending officer prepares a file of those documents, which act as a communicator
REQUIRED DOCUMENTATIONS
While preparing for providing the required facility, the lending officer prepares two
different types of documents.
Transaction Documents
These are the written evidences of the transactions between the bank and the
customer relating to the matters such as Offer Letter, mark up agreement,
Quarterly mark up payment authority, and o on.
Security Documents
These are documentary evidences of the type and value of the securities
submitted with the bank against the overdraft facility. The documents such as
Letter of Lien, Letter of Hypothecation, etc. come under this head.
The following documents are prepared by the lending officer while providing an
overdraft facility to the customers;
• OD Facility Checklist
• SBP Regulations
• Demand Promissory Note with Rs. 100 stamp
• KYC (Know your customer)
• Facility Advice Letter (FAL) or Offer Letter
• Loan Application
The credit officer, after proper verifications and checking, approves the overdraft
facility to the customer. In case the facility is beyond the powers designated, all the
above given documents are forwarded to the head office Karachi for approval.
Now let’s discuss briefly each and every document and the very specific purpose they
are used for.
OD Facility Checklist
OD Checklist acts as a precautionary measure or reminder to the lending officer that
all the necessary information regarding the customer have been taken before
disbursing the loan. It checks whether all the steps have been performed while
deciding upon the credit disbursement.
• Facility Limit
• Review/Repayment Date
• Nature of securities
The customer, by signing the offer letter undertakes to comply with all the terms and
conditions written on it such as;
• The facility has been granted at the sole discretion of the bank and is subject
to such credit restrictions as may be laid down from time to time by the State
Bank pf Pakistan.
• The bank reserves the right to alter the terms and conditions, rates of mark up,
commission, fees, and charges or cancel the facility at any time. In such a
case the borrower will be required to discharge the total outstanding amount
alongwith the mark up due .
• The bank will be reimbursed all the costs incurred (such as litigation charges,
legal fees) in recovering any amount from the borrower through litigation or
otherwise.
• The bank charges will be levied in accordance with the schedule of bank
charges applicable at that time.
• Government levy, if any imposed from time to time will be recovered from
the customer.
Letter of Lien
Letter of lien is a legal document obtained for the purpose of marking lien on the
securities from the owner of the securities.
• In case the securities offered against the facility are owned by the person
actually utilizing the facility, he must sign the document.
• Where the owner of the securities is someone different from the one who
has applied for the facility, the owner must sign the legal document.
• In case of joint ownership of the securities, all the parties to the securities
must sign the letter of lien otherwise it would not be enforceable.
• This letter shows the approval of the owner in providing the securities
against the facility.
• A stamp paper of Rs. 25 is used for this purpose.
Mark Up Agreement
Copies Of Securities
In case the credit facility has been provided by the bank against the government
securities, a copy of all the securities duly signed and attested by the retail lending
officer must be kept alongwith the other documents.
The reason is that all the original securities are kept in the respective branches from
where these were issued and the lending officer retains a copy of these only. Secondly
in case the approval is to be granted from the head office consumer banking, Karachi,
only a copy of the securities is to be forwarded and no need to send the original
certificates..
Credit File
This file contains all the documents such as
• Offer Letter (containing the terms and conditions),
• CIB Report
Loan Document
The documents placed in this file are
• Loan Application
• Asset Liabilities Statement
• Income Tax Return and so on
Securities File
It contains the securities provided by the customer against the facility of overdraft.
All these three files kept in safe custody, as these are the valuables against which
customer has availed financing from the Bank and in most of the cases the value of
the securities amount to Rs. 1 million and more. So it is necessary that proper
lodgment of the securities and the documents is done.
A part from granting the loan, the following functions are also performed by the
Credit Unit North;
This report is prepared with the objective of keeping an eye on the performance of the
customer regarding the discharge of his liability.
Access Follow Up
At times, the amount withdrawn by the customer is in excess of the limit assigned by
the bank. This situation can arise due to the following two reason;
1. On the request of the customer, the bank allows to withdraw in excess of
the limit assigned uptil a certain extent. But this favour is given to only a
selective number of customers.
2. Due to the collection of the mark up from the loan account.
However, this facility is provided for a certain number of days and at the expiry of
these grace period, the excess amount must be submitted by the customer in the
relevant account.
Payment on Demand
Security Replacement
CUN also performs the function of replacement of the securities if the new securities
have a realizable value equal to or more than the previous ones.
The limit for OD facility remains the same until the customer gives a request to
enhance or reduce it. Generally a higher limit is assigned to the customer while
renewing the older facility as the lending officer has build up his confidence in the
customer’s creditworthiness. In case the customer has not given any request for
changing the limit, the facility will automatically get renewed with the existing limit.
CUN keeps on monitoring the loan facility sanctioned. The mark up is considered
over due after 180 days from the withdrawal of the funds. The bank marks
the customer default after the expiry of 365 days.
CENTERLIZATION PROCEDURE-LENDING
2) Preferably, customer will be required to visit the lending officer, who would
reduce the customer’s turnaround time and the lending officer will follow the
existing procedure.
PROCESS FLOW
ALM PROCESS:
ALM PROCESS
OD ALM PROCESS:
Overdraft ALM process is one component of the ALM process. All the
overdraft accounts equal to or above PKR 2 million or above secured against
the deposits or securities are migrated to SCB branch alongwith the deposit
accounts pledged as security.
Lending Officer (LO) will prepare list of OD a/cs equal to or above PKR 2 million limit
alongwith PRPPA a/cs & deposit a/c numbers if secured by deposit. This list should only
contain OD a/cs secured by deposit or securities. Securing deposit a/cs will also be migrated
therefore pledgor will also need to sign borrowing documents as in normal facility renewal.
2. 3.
LO will sent OD migration LO will prepare and obtain
letter, signed by Distribution If limit is expired or renewal documents
facility
Manager, to see customers from bycustomer on SCB
to be expired
(Issued in duplicate – 1 copy documents since facility will
for customer and 1 copy signed 30-02-2002 be migrated to a SCB branch
by the customer to be retained within the Hub. (If securities
by the bank.) are issued by other than SCG
branch, Grindlays Indemnity
should also be in place.)
4. If Facility is current
5.
If above documents have been obtained LO will inform BSSM via email
with copy to Consumer Credit that account may be migrated. Email must
contain associated Masters (PRPPA & securing deposit master if any).
Note:
New signed SCB AOF’s are not required for the migration of current OD
facility accounts. However, they are required for the migration of all expired
OD facility accounts (where the Novation Agreement is not obtained) and for
the migration of all liability accounts that are under the same master as the OD
facility account.
There is a Government office in Standard Chartered Bank where sale and purchase of
government securities takes place. I spent one and a half week in this
department learning about the various procedure followed for issuance,
cancellation and reinvestment of various securities as well as payment of
profit coupons as and when they are due.
SSCs carry a maturity period of 3 years where as DSCs are issued for a long term of
10 years. However it does not mean that the investor needs to hold these securities till
their maturity. He can encash these securities at any time before the maturity but in
that case he will not be entitled to any profit due if it is for less than six months.
After every six month profit is due and credited to the customer either by transferring
that amount to his/her account or in cash in case of no account with SCB. After
maturity date one can enchased his securities and can reinvest them.
THE PROCEDURE
The following procedure is followed for the purchase, encashment and reinvestment
of securities as well as for the encashment of profit coupons.
PURCHASE OF SECURITIES
•
SSCs yield a six monthly profit. Six profit coupons are affixed with the SSCs
Certificates. These profit coupons carries
1. Numbers from1-6; 1 for the first six months profit, 2 for
the next six months profit and so on.
2. The amount of profit due
All the applications are send to Mall branch twice in a day; firstly near 1:00 p.m. and
then again near 4:00 p.m. All the encashment applications are processed at Mall
branch and it takes hardly 2 to 3 hours in transferring the amounts in the accounts of
the customers.
In case of DSCs,
The customer is entitled to the maturity value specified at the
certificate at that particular time period.
The whole procedure for the encashment of securities is the same as given above.
Not only the securities but also their profit can be reinvested in the new securities.
After the atomic explosion in 1998, all the foreign currency accounts were freezed.
After one week of this operation, the government makes an announcement that all the
frozen accounts can be converted into PKR accounts. One month after, the
government came up with another proposal that dollar bonds can be issued out of
these frozen foreign currency accounts with a six monthly profit in dollars. The
government announced a bonus of 5% if the encashment of the profit coupons during
September 2001 to December 2001 is made into Pak rupee and not in dollars. After a
few days another amendment came which extended the limit till the end of March,
2002. After March, 2002, no bonus was to be given on the encashment of the profit
coupons in PKR instead of cash.
OTHER SERVICES
Apart from the above mentioned services, this department also performs the functions
such as
Marking Under Lien
Stop Payment
Marking Certificates Lost
Encashment of Wapda Bonds and Profit coupons
Certificate regarding encashment of government securities
Certificate regarding collection of profit coupons
Certificates regarding encashment of Special US$ Bonds
Certificate regarding Zakat deduction
In case of issuance of duplicate securities SSCs, DSCs, NITs & NDCs etc.Rs.2000per
registration is required. The bank charges Rs. 500 per scrip for marking stop payment
and Rs. 2,000 per registration for amendment cases. The bank charges Rs. 500 for
issuance of various certificates.
This department of the bank can be considered to be the most efficient one in terms of
customers’ satisfaction and efficiency. National Savings Centres are the core places
for the purchase and sales of various government securities but still one month sales
of this department are nine times higher than NSCs or any other bank providing these
services. This fact shows the standard and quality of the services provided by this
department. The securities officers work non-stop from 9:00 a.m. till 6:00 p.m. I had
my personal experience of working there and I enjoyed working there more than in
anyother department.
AUTO LOANS
Standards Chartered Grindlays auto loans make a car ownership as easy as 123. At a
time when car prices have shot up, they have further reduced rates, documentation and
processing fees so owing the car to one dream is now affordable, simple and easy.
However this facility is available to the employees of approved companies only. List
of the approved companies is given at the end of this section.
PROCEDURE
Step # 1
Step # 2
Step # 3
ELIGIBILITY
For the customer applying for auto loan:
REPAYMENT OPTIONS
• One can finance his/her dream car for upto seven years depending on the
engine size of the new car.
• Select a monthly payments plan that allows continuing with the life style and
puts no additional burden on the customer.
• One just has to calculate the minimum PKR amount one can put aside every
month without disturbing his/her cash flows and selects the repayment plan
accordingly.
• Repayment of the loan can be made either through post-dated cheque (PDS) or
automatically through standing instructions in an account with the bank
INSURANCE
PROCESSING FEE
DOCUMENTS REQUIRED
For salaried individuals
a copy of NIC
a letter of confirmed employment
salary slip
For self-employed individuals
a bank statement for the past six months
a copy of NIC
APPROVED COMPANIES
The Instalment amount will change if payment will be made though Post Dated
Cheques instead of Salary Transfers.
&
INCOME STATEMENT
Finance can be defined as the science and art of managing resources especially
money. Virtually all the organizations earn or raise money and spend or invest money.
But this area is extremely important in context of the banking concerns.
Body of information describing even the smallest firm is enormous, spanning the
company’s internal operations and its relations with the outside world. Financial
statement analysis is very helpful in this respect because it highlights company’s
strengths and weaknesses.
All the financial statements have been prepared in accordance with the laws
applicable in Pakistan;
• Companies Ordinances 1984
• International Accounting Standards
As per circular No. 36, dated October 1, 2001 by BSD, State Bank Of Pakistan, all the
financial statements have been reclassified.
All the figures presented in the financial statements are comparable.
I am presenting trend analysis of a few selected items from balance sheet on account
of non-availability of the required financial information.
TREND ANALYSIS
C O M M O N-S I Z E ANALYSIS
RATIO ANALYSIS
TREND ANALYSIS
TREND ANALYSIS
Using Moving Base Year
Figures in %
TREND ANALYSIS
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED DEC. 31, 1999-2001
Using 1998 as Base Year
figures in %
1999 2000 2001
Mark Up/Return/Interest Earned 77.6197 68.2256 70.77092
REND ANALYSIS
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED DEC. 31, 1999-2001
Using Moving Base Year
figures in %
RS RS RS
Mark Up/Return/Interest Earned 77.6197 87.8973 103.731
Mark Up/Return/Interest Expensed 76.6283 76.3535 114.281
Interpretation of Trends:
Trend percentage analysis is most valuable when various related trends for a number
of year are compared and interpreted.
The following favorable and unfavorable tendencies may be noted in SCB’s financial
growth over the last four years.
The improvement in the liquidity position is also indicated by the fact that the
deposits, both short as well as long term, have increased, but at a slightly lower rate in
comparison with the current assets (cash and balances with the treasury. As the
liquidity position of a commercial bank must be related to the demands made upon
them for funds over the period of time. An overview of the deposits portfolio of the
bank indicates that the bank is having almost 75% of its total deposits creation in
current or PLS accounts which means requires more liquid funds at hand and this is
what the bank has done over the last year. It reveals a growing financial strength and a
greater safety for the depositors.
A very important factor in analyzing the liquidity position of SCB is the extent to
which it has advanced loans against the deposits raised. The holder of sizable deposits
balances and the customers who borrow in substantial amounts influence the liquidity
needs of the bank to a degree that is directly related to their size. Trend observed in
the loans and deposits reveals that at times when the deposits of the bank have
increased by 15 to 20 % in the current year, the loans and advances made by the bank
have decreased by 26% as compared to the previous year. A great decline has been
observed in the credit sanctioning in comparison with the year 2000 when the loans
and advances increased by almost 25% (45% if compared with the base year.) The
main reason for this tremendous decline appears to be
The internal factors resulting in the decline in the advances by the bank are
• high rates of mark up charged by the bank,
• strict lending policies,
• and grant of the advances to selected customers with good track record.
Owing to such uncertain circumstances, any bank in the world would be reluctant to
advance credit as there is doubt about the future recovery of the funds disbursed.
The foregoing data shows that Bills Payable by the bank is on a continuous decline.
They have decreased to half the amount if we consider the figures in 1998. It is a good
sign as there would be less pressure on the current assets of the bank which is very
important to stay in the banking business.
Operating fixed assets have increased from Rs. 203,973,000 to Rs. 317,359,000 at a
rate of 156% and during the same time, the deposits of the bank have increased by
107%. The bank acquired fixed assets in the current year. The source of capital used
for the expansion of the assets during the period under review included a finances
lease with a down payment of nearly 12%.
Now comes the income statement positions during the last four years.
First and far most important item in the income statement of a bank is the mark up
earned by the bank. Presently it is showing a declining trend. It is supported by the
fact that the loan disbursements by the bank have also declined in relation to previous
years’ performances. There is a direct relationship between mark up earned and the
loans advanced by the bank. However despite the decrease in the advances, the mark
But this increase in mark up income when compared with the mark up expenses and
the operating fixed assets of the bank, don’t indicate favorable condition. Although
the mark up earned by the bank has increased slightly over the last year but the
increase in mark up expenses is more abrupt. As the mark up income has increased
from 88% to 104%, the mark up expenses incurred by the bank has decreased at a
higher rate i.e. from 76% to 114 % in the current year. The bank is unable to maintain
the mark up expenses at the same level while providing the financing facilities.
The trend in the provision for non performing loans is highly satisfactory. It shows the
efficiency of the credit department to have reduced the amount of provisions by 70%
in the current year. The reasons for this improvement may be
• Careful scrutinizing of all the documents
• Intelligent corresponding with the customer
• True 7 C’s analysis of the customer such as his business and moral character
• Granting facility to selected customers who rate well on the selected criteria
for loan disbursement.
The foregoing data reveal that the non mark up earnings of the bank has decreased by
10% in the current year. The main factor attributable to this decline is decline in the
others incomes in the form of bad debts recovered, frauds recovered etc. In view of
this trend, the bank has become more selective in disbursing the funds.
In contrast to the trend observed in the mark up expenses, the performance of the bank
in controlling its non mark up charges is quite satisfactory. These charges have
decreased by nearly 10 % in the current year. The bank is able to keep its non mark up
expenses at almost the same level. One obvious factor is the substantial decline in the
other charges such as penalties. SCB was imposed penalty by State Bank of Pakistan
as a result of late submission of returns and short fall in maintaining statutory liquidity
result. It seems that the bank has learned from the last years experience as this figure
has been reduced to a very low amount this year. This argument is further
strengthened by the improvement in the liquid assets of the bank.
Taxation charges imposed on the banks have decreased from 67% to 57% owing to
the decrease in the overall taxation rates imposed by the government on the banking
organizations.
Last comment is on the profit for taxation trend. This figure stands at just 18% of the
last year’s figure. But it does not mean that the bank is not performing well. If we at
profit and loss account items, we find out that the bank has to incur huge integration
costs as a result of the acquisition of ANZ Grindlays in the 2001. Although presently
these costs are distracting the net profit figure but the bank will definitely reap the
benefits in the future.
COMMON-SIZE ANALYSIS
PROFIT & LOSS ACCOUNT
FOR THE YEAR ENDED DEC. 31, 1998-2001
Figures in %
1998 1999 2000 2001
RS RS RS Rs
Mark Up/Return/Interest Earned 100 100 100 100
Mark Up/Return/Interest Expensed 68.91 68.03 59.09 65.1
Net Mark Up/Interest Income 31.09 31.97 40.91 34.9
Common size Analysis of Standard chartered Grindlays Banks, shown above reveal
the relationship of each item to its perspective total.
The assets side of the common size analysis is revealing the relationship of each item
to the total assets.
The foregoing data shows that 33% (more than double) of the bank’s total assets have
been invested in cash and marketable securities as compared with the previous year’s
figure of 16%. At the same time the lending to the financial institution has increased
from 6% in the previous year to 14% in the current year. All these measures have
strengthened the bank’s position to discharge foreseeable and unforeseeable liabilities
as they come due.
On one hand the lending to the financial institutions has increased and on the other
hand, the investment made by the bank has decreased from 7.4% to 3%. Advances
have also increased from 43% in the previous year to 64% in the current year which
means the bank is utilizing the funds raised in the other activities primarily lending to
the financial institutions as it is the most secure source of financing available in the
economy. A favorable indication is the increase in the operating fixed assets of the
bank under a finance lease agreement.
Bills payables are showing a decline in proportion to the total liabilities. There
contribution in the total liabilities of the bank has decreased from 0.45% to 0.3% in
the current year. However its impact on the overall gearing position of the bank is
very insignificant.
If we look at the borrowing to the financial institutions, we find that it has decreased
to a greater extent i.e. to 4% from 11.2% in the previous year. On the other hands, the
borrowing to the financial institutions is on a continuous increase resulting in more
borrowing potential for the bank. So the bank has changed the structure of resource
allocation from advances to the lending to the financial institutions.
The bank’s management seems to have adopted a very effective marketing policy as
the deposits of the bank constitute 86% of the total capital employed by the bank. In
the last year, this figure stood at 78% of the total resource. This shows the high level
of products and associated services provided by the bank.
Now comes the capital employed by the bank. Presently the proportion of the assets
funded by the bank’s capital is sufficient. It contributes to nearly 9 % of the total
resources held by the bank.
It shows the percentage of the revenue absorbed by each individual cost or expense
item and other incomes earned by the bank.
The most important component of any profit and loss account of a banking concern is
its mark up expenses it has to pay for servicing the depositors. The foregoing data
shows that the mark-up expenses absorbs 59% of the revenues (a favourable position)
as a successively smaller amount of the mark up earned was absorbed. This
favourable operating position is also reflected by the net mark up percentage of 41%
as compared with the last year’s figure of 35%. It shows that the bank has been
successful in
The most favourable item in the profit and loss account is the decrease in the
provision for non-performing loans and advances. It has got down to just 4% in the
current year from 15% in the last year. Although it shows the better asset management
by the bank but we should not ignore the fact that the decrease in the loans and
advances might be a contributing factor in decreasing the provisioning required
against the default of the advances.
Non mark up income previously stood at 25% in relation to the total revenue
generated by the bank in the form of mark up. However in the current year, this figure
has decreased slightly and has reached at 22. It shows that the bank is focused more in
The bank seems to have increased control over its operating expenses, i.e. non-mark
up expenses as these now absorb 26% of total revenues. Previously the non mark up
expenses absorbed 28 paisa for each rupee of mark up earned.
In the net shell, it would not be wrong to say that the bank has improved its financial
position and operating efficiency over the last years.
Liquidity can be defined as the bank’s ability not only to meet possible deposit
withdrawals but also to provide for the legitimate needs of the economy as well.
CURRENT RATIO
Calculations:
Current Assets 2001 2000
Rs. in ‘000’
Cash and balances with treasury banks 6,980,2939 3,376,100
Balances with other banks 5,653,482 2,974,241
Lending to financial institutions 5,172,377 2,224,265
Investments 1,149,492 2,616,623
Short term advances 14,635,882 15,214,533
Other Assets 2,300,029 2,149,411
Total Current Assets 35,891,555 27,555,173
Interpretation:
In case of Standard Chartered bank, we witness quite a strong current ratio in 2000
and 2001. It indicates that the bank has substantial capacity to solicit more deposits.
There is an increase in almost all the current assets of the bank except for investments.
On the other hand, the bills payables and borrowing from the financial institutions
have decreased resulting in a strong current ratio. Although deposit have increased as
compared with the previous year’s figure, but the increase in the current assets of the
bank is more than the increase in the deposits creation.
As a result, we observe more liquidity which means greater ability to meet the credit
demands that may be made on the bank from time to time. If we go through the notes,
we find out that the bank was charged penalty for not meeting the liquidity statutory
requirement. These charges have decreased to a greater extent in the current year
indicating the focus of management activeness, attention and concern for
improvement in the liquidity position of the bank. That is why the bank’s liquidity
position has increased in the current year.
Formula = Advances
Total Deposits
Interpretation:
It demonstrate the degree to which bank has already used up its available resources to
accommodate the credit needs of its customers.
This ratio, a comparison of funds generation and its funds mobilization, indicates the
total loans sanctioned by the bank in relation to total amount of money deposited with
the bank stands at 50.56% as compared with the last year figure of 82.51%. This
shows that the bank has greater potential to advance additional loans. Total loanable
funds roughly measured by the deposits are sufficient to enable the bank to make
additional loans without recourse to more or less continuous borrowing. At present,
the bank has got a relatively small amount of advances as compared with its deposits
raised. One reason for fewer advances is the cautious and selective approach on the
part of the management while deciding upon credit proposals.
Calculations:
Quick Assets 2001 2000
Rs. in ‘000’
Cash and balances with the treasury 6,980,2939 3,376,100
Balances with other banks 5,653,482 2,974,241
Investments:
Federal Govt. Securities
Federal Investment Bond 956,630 2,242,852
Federal Govt. Loan 46,042 247,220
Listed securities
First Grindlays Modarba 79,800 55,763
National Investment Unit 20,489 24,257
Total Quick Assets 13,736,736 7,920,433
Interpretation:
The ratio of advances to total deposits reveals little, however the bank’s other assets
available for conversion into the funds with which to meet withdrawals or make
additional loans. The ratio of quick assets to deposits is more significant for this
purpose.
The bank’s quick assets constitute 42% of its deposits, which means the bank has the
ability to accommodate the withdrawals of deposits up to 42% of its total deposits (a
situation which hardly happens). It also indicates that the bank has great potential to
meet the demand for new credit approvals. The liquidity position is quite sound in
Interpretation:
This ratio highlights the relationship between the deposits raised by the bank and their
obligations in the form of advances and loans to financial institutions.
As indicated above, this ratio for the bank has decreased from 91% to 66% in the
current year. Again the reason is the same; the desire of the bank’s management to
attain high/good liquidity to safeguard the interest of the depositors. It also indicates
low level of advancements being made by the bank in the current year. Although it
sounds ineffective to held cash today the funds needed to make loans two years from
Interpretation:
This ratio takes into consideration not only the deposits liabilities but other liabilities
as well i.e. borrowed funds.
27,337,250
Demand Deposits 2001 2000
Rs. in ‘000’
Customers
Saving 18,055,308 15,259,792
Current 6,634,564 15,259,203
Margin 47,981 148,202
Financial Institutions
Non-remunerative 124,015 122,154
Total Demand Deposits 24,861,868 19,776,351
Interpretation:
This ratio for SCB is nearly 76% of the total deposits held by the bank. It highlights
the fact of why the bank is having a large degree of current assets in its assets
structure. The deposits held by the bank are very volatile. The management is quite
effective as it has already taken actions to successfully meet any deposit withdrawal.
The ratio for SCB is 6.21 % showing that the management relies less on the borrowed
funds for advancing credit facility to the customers. Most of the advances are granted
against the deposits and the capital funds. Since these funds add up the pressure on the
bank’s current resources, a decline in the ratio from 16% to 6.21% is quite
encouraging.
This ratio for SCB is 4% in the year 2001. There has been a significant decline in this
ratio as previously the bank depended slightly more on the borrowings from financial
institutions. It shows that the bank is concentrating on raising funds from depositors
and relies less on the borrowed funds.
• It is a favorable indication in the sense that the bank has large potential to ask
for borrowed funds in the phase of tight liquidity position.
• Further more, it shows the efficiency of the marketing department to have
created so much of deposits that the bank does not need to look at the financial
institutions for help in improving its liquid position.
• There is another favorable aspect of this declining tendency. The rate of
interest offered to the depositors is very low in comparison with the interest to
be paid to the financial institutions for their funds. A decline in this ratio
means less mark up burden on the bank resulting in less financial risk for the
bank.
Interpretation:
It is an indication of SCB’s funds management policies. The funds allocation to the
financial institutions has increased to a great extent despite the fact that still it holds a
small proportion relevant to the total resources raised by the bank. It is a positive
indicator in the sense that the financing to the banks are the most secure ways of
lending. Considering the economic conditions of the country, it seems to be the best
alternative available to the bank.
GEARING RATIO
Gearing ratios show the extent of debt in the bank’s resources.
Interpretation
If we consider the bank’s liabilities excluding the depositors funds, the situation
would be like this;
2001 2,186,082 = 5.72 %
38,171,663
It shows the true picture of the gearing. Excluding the bank’s core function i.e.
Deposits Creation, the bank seems to be relying less on the borrowings to support its
operations. In the year 2000, this figure stood at 13.30% but the bank has further
decreased this ratio to just 5.72% in the year 2001. This shows the efficiency of the
bank’s management. There is another positive aspect of this ratio; the banks and other
potential lenders will be willing to advance further funds
This decrease in gearing can be attributed to a no. of factors. Firstly, the acquisition of
ANZ Grindlays in the year 2001 has resulted in a large no. of deposits for the bank.
Due to this fact, the bank does not have to resort to outside funds causing decline in
the ratio. Secondly, the marketing and sales department of the bank is so efficient to
raise so much of deposits that the bank is self-sufficient to discharge its obligations at
the right time without getting the support of lending institutions.
Interpretation
This ratio has decreased in the year 2001 as compared to year 2000 resulting in a
more favorable picture.
COVERAGE RATIO
Coverage ratio measure the capacity of the bank to cover its interest charges, which
are the main obligations on the bank.
Interpretation
The above figure shows the less capacity on the part of the bank to cover its interest
payments. It has declined as compared with the last year. The bank cannot afford it to
decline further as it would mean no benefit for the capital providers. But this is a short
term perspective of the bank’s financial position. In view of the long run financial
perspective, this ratio is good for the bank. The reason is the huge integration costs
incurred by the bank on the acquisition of ANZ Grindlays going to yield tremendous
benefits for the bank in the future.
PROFITABILITY RATIO
Profitability ratios are a measure of reasonable rate of return and adequate profits
turnover.
Interpretation
The above given ratios suggest that the profitability of the bank has decreased very
sharply in the year 2001 indicating less profitable operations of the bank. While
discussing the trend analysis, I mentioned that the mark up charges have increased in
a large proportion that the mark up earned by the bank resulting in decline in the
profit available on the capital funds employed. However, the situation is not as intense
as revealed by the above given ratios. Since the bank has incurred huge cost in the
acquisition of ANZ Grindlays resulting in less profit margin on the capital funds.
Return on Investment
Total Assets
Interpretation
This ratio indicates the profit earned by the bank on the resources employed.
As far as SCB is concerned, we observe a decline in the efficient utilization of the
resources. It has decreased to 0.108 % in the year 2001 from 0.6426 % in the year
2000. The reason for this low profitability is the same given above; the increase in the
Interpretation
This ratio, with a minor fluctuation in 2000 came down from 1.0% in 2000 to 0.248 %
in the year 2001. It is indicating less active utilization in the form of advances. The
bank is finding it difficult to keep the level of its expenses less in proportion to the
advances it has disbursed. Lending, no doubt is the core function of a banking
concern. But the bank should find out effective ways of credit provisions affecting
less on profitability of the operations. Non mark up revenues should also be increased
in the face of lower credit disbursements resulting in more returns for the bank.
Return on Deposits
Total Deposits
Interpretation
This ratio indicates to what extent deposits which represent funds mobilization on the
part of the bank contribute towards income generation. Apparently, this ratio is giving
negative remarks on the part of the bank’s profitability and efficient utilization of the
deposits. But a review of the profit and loss account indicates that the bank has
performed well in keeping its overall expenses low. As the above calculations include
the integration expenses incurred in the year 2001 by the bank which was not present
in the last year.
Net Revenue
Interpretation
This ratio signifies the proportion of the revenues that is used to cover the operating
expenses of the bank. The ratios calculated above gives a poor picture of the bank’s
In short, the bank in an attempt to maintain at a good level of liquidity, has a low level
of profitability but there is a continuous push in the profits and there are chances that
the bank will reach at a point of high liquidity and profitability in the near futures.
Interpretation
This ratio indicates the extent of the funds employed by the bank in the total resources
as shown in the balance sheet. It shows that for ever rupee invested in the assets, 82
Interpretation
This ratio takes into account the difference between cash and marketable securities
and other kind of assets. Cash and marketable securities, which are riskless items, are
excluded to find out the true picture of the capital adequacy. A ratio of one rupee of
capital to five rupees of quick assets is considered sufficient. In case of SCB, this ratio
is near 20 % which is sufficient to ensure the public that the bank is in a position to
withstand what ever strains may be placed on it. As the bank has decreased the
advances in the year 2001, the result is the improvement in the risk coverage from the
perspective of the depositors. Previously it was quite low i.e. 13.64%. It shows that
the bank is concerned about its public image regarding risk absorbance.
Interpretation
This ratio gives more or less the same picture as given by the above one. It calculates
the risk absorbed by the owner in both types of financing; borrowing to the financial
institutions and debtors. Although the lending to the financial institutions does not
involves the same level of risk, so this ratio is calculated from a conservative
perspective. An increase in this ratio from 12.41% in the year 2000 to 14.42% in the
year 2001 favors both
• the depositors as their money is safe and
• the potential borrowers as they have the confidence that the bank is in a
position to give genuine considerations to their credit needs.
INTERNAL ANALYSIS
Internal analytical tools are used by the management of the organization to have a
look at the performance of the bank from various perspectives which ultimately leads
towards the development of effective strategies and policies.
Now after giving the external analysis of SCB, let us have a quick look at the internal
analysis of the bank against one of the leading banks in the market; Bank Alfalah.
OPPORTUNITIES
UPLIFT IN EXPORT
GDP growth rate has improved from 2.5 % last year to 3.5 %. This is a significant
size as the result of which people will be having more savings with them. To
capitalize on this opportunity, a no. of different schemes like Super Save, Flex
DE-ESCALATION
TECHNOLOGICAL ADVANCEMENT
The federal govt. has revised the taxation rates from the year 2002-2003. the banking
companies will be required to pay at the rate of 50 % instead of 58% which has
encourage the banking sectors a lot. As the result of this amendment, the bank has
become more focused and committed in its services (being a moral boast).
Now days a trend has generated among the competitors to join hands in order to reap
large profits. Strategies that stress co-operation among the competitors are used
frequently. SCB’s acquisition of Grindlays Bank on 16th July 2000 is a right step in
this direction which has made the bank oldest one in this region.
MARKET DEVELOPMENT
Our society comprises of different classes of the people. Each clan of people need
specific product according to their specific life style. In order to satisfy each clan of
the society, SCB is offering the flexible product mix. Different products like current
A/c, super save A/C, high yield saving A/c, and privilege account are suitable for
different classes of the society.
GLOBAL REACH
The state bank of Pakistan has declared to reduce the lending rates
of the banks after the complaints from the borrowers of charging high
interest rates. Due to high interest rates they were reluctant to
borrow money on such high charges, but after the declaration the
borrowers inclination towards the taking of loans has been increased
which ultimately will upgrade the business of the banking companies
including Standard Chartered Bank.
THREATS
ALLIANCE OF RELIGIOUS-POLITICAL PARTIES
Pakistan’s markets are very small so is the investing climate. The same few people are
seen investing in banks and in stock exchanges. Presently the banks are paying low
mark up that’s is why the investors have shifted to stock exchange market, which has
resulted in boast in stock exchange market but representing threat for the banks.
Pakistan during the last few decades is facing poor level of tranquility. People are not
taking bold steps to start new projects which have been resulted in fewer advances by
the banks.
Terrorist activities, a major issue September 11, 2001, has bring the bad media
impression for Pakistan as neighbouring country has always been trying to prove
Pakistan as a terrorist country. Scared due to the terrorist attacks, foreigners are not
willing to come to Pakistan and make investments which are having bad impacts on
our economy.
TECHNOLOGY MANAGEMENT
Not only adopting the technology is crucial but also technology management can be
testing one. SCB is currently using computer based BBS (basic banking system) to
conduct its day to day operations which is very slow in processing and often gets
This issue of riba free banking has become more severe after the tremendous success
of religious parties in election 2002. Riba free banking represents a threat for banks
but bank can avoid this threat by modelling their products in Islamic forms.
SLOW INDUSTRIALIZATION
Poor industry financial position has darkened the future of huge advances by the
banks. In view large sick units, the banks don’t risk extending loans to the existing as
well as new projects which would result in inefficient utilization of its deposits.
The govt. is privatizing all its holdings and the privatization of UBL is a past of this
process. This has resulted in increased competition among the banks. The banks have
to exert more efforts to maintain their current positions.
BUSH ADMINISTRATION
INTERPRETATION OF EFE
SCB’s total weighted score comes out to be 2.705 which is the little above the average
score of 2.5. It shows that the Bank’s strategies are in line with the existing
opportunities and threats. Bank is responding to the external factors but still there are
better strategies to be followed in order to exploit the opportunities more efficiently.
The competitive profile matrix identifies the firm’s major competitors and their
particular strengths and weakness in relation to sample firms’ strategic position. In
CPM both internal and external issues are included the success factor in CPM are not
grouped onto opportunities and threats. It provides important internal strategic
information.
The score of both the banks are near to 4.which shows that market standing for both
the banks is pretty good. While comparing both the figures of 3.55 and 3.37 we
cannot say that Bank Alfalah is 0.18% better than the Standard Chartered Bank. These
are just the assumed figures and don’t give us the exact difference but only shows the
comparative upper hand.
During six weeks of my stay at SCB, quail road, I have come across the following
SWOT analysis of the bank.
STRENGTHS
USD Clearing
The U.S. Dollar facilitates international trade. With the continued growth of inter- and
intra-regional trade, when the customers need someone responsive to their growing
needs and who can execute their transactions quickly and effectively, Standard
Chartered give the support needed for the growth of their business. SCB understand
the clearing process clearly and have the infrastructure and expertise to help in U.S.
Dollar clearing requirements around the world.
Automatic Operations:
The operations performed by the bank are highly automated that result in assurance
for the customers that their transactions are completed reliably, efficiently and
securely.
9 to 5 Non-stop Banking
One can avail the benefit of the services provided at the bank till 5:00 P.m. which is
highly useful for those customers who find it difficult to leave their officers in the
morning..
ATM Network
Customized Solutions
The management of the bank believes in customer focussed banking rather than the
product oriented banking. The products and services designed by the bank are
specifically tailored to the individual needs of its customers.
Priority Banking
The priority banking centres of the bank offer an unmatched where the customer
receives highly privileged services in a highly elegant environment. It gives the
chance of experiencing new standards in banking. Designed specially for those who
appreciate only the finest things in life, Priority Banking offers the very highest levels
of personalised banking to match customer’s unique status.
Electronic Banking
The revolution in the banking in the form of electronic banking operations have
opened avenues of excellent, efficient and quick services saving the time and costs of
the customers and fortunately SCB is among those few banks who are already reaping
the benefits of electronic transactions.
Technological Advancements
SCB’s management is quite prepared to adopt the latest advancements in technology
resulting in revolution in the banking operations such as check clearing process,
computer based teller equipment, automatic teller machines, and electronic funds
transfers among the others.
WEAKNESSES
In my opinions these are the points that might be detrimental to the efficiency and
profitability of the bank.
Lack of specialisation
This famous and useful concept given by Adam Smith in 1776 seems to be missing in
the bank. The employees are constantly rotated from one job to another job of totally
different characteristic in the view of giving them the know-how of the working in all
the departments. But I think this is not a very good tactics used by the management.
Otherwise the situation might be like this ‘Jack of all and master of none.’
Centralization
There is a high degree of centralisation in the bank. Almost all the decision-making is
in the hands of the upper management located in Karachi. But centralisation is
effective upto a certain level otherwise it becomes inefficient and at times costly too. I
personally observed that delay occurred in the operations of the employees only due
to the fact that they had not got any instructions from the head office.
OPPORTUNITIES
Apart from the ones discussed in External Factors Evaluation Matrix, the following
threats and opportunities are being faced by the bank currently:
Joint Ventures
In order to capitalize on the emerging market opportunities, joint ventures offer the
best strategy. Standard Chartered so far has just three joint ventures, one with MCB,
the other one with McDonalds and the last one with the Akbar Group of Companies.
But if we look at some of it competitors, we find out that they have formed a no. of
joint ventures such as Alfalah Bank with 42 and Prime Commercial Bank with 33. So
the bank should also undertake joint ventures in order to be successful opportunist.
THREATS
High charges
The schedules of charges indicate that the fees charged by the bank on the various
services it provides are extremely high. It may result in decrease in the number of its
exiting customers. Further more, this could be very alarming situation for the bank in
case some of the competitors grasped the opportunity and lowered its rates. The result
Stiff Competition
SCB is currently facing strict competition from the foreign banks especially the
American who banks enjoy a good market position. Collectively U.S. banks hold
approximately 9 percent of all commercial banks' assets. At present, three American
banks are operating in Pakistan: American Express Bank; Bank of America and
Citibank.
After spending six weeks at different departments of the bank, interacting with the
employees, getting their views, observing the organizational structure and design, I
have come up with the following suggestions that in my view, will definitely improve
a few weaknesses observed in the bank by me.
Flexible Policies
The bank should be adopt flexible policies, specially in the areas of the recruitment,
promotions, evaluation of the employees otherwise the high turnover observed in the
bank will continue to create problems for the bank now and in the future.
Job security
The employees in the organization should be insured job security so that there is no
pressure on the employees while performing their tasks.
Decentralization
The higher authorities should form team-based management rather than centralized
management. It would result in improvement in uplifting the morale of the employees.
My Internship Experience
One of the most important aims of the student life is to express himself / herself
correctly and adequately. This was the believe in my mind when I first decided to go
to Standard Chartered Bank to complete my internship program.
Determined, Confident and Persistent in the pursuit of knowledge and learning, I was
on my way to Standard Chartered Bank , Tufail Road Branch in the early morning of
June 17, 2002. Just a day before, I had taken my last paper of final term 3rd semester.
Normally I wanted rest and recreation after the tiring exams but this time I was
anxiously waiting for the start of my internship.
I stepped up the branch with the passion for learning and full commitment. The first
thing that impressed me was the layout of the branch. . Apart from me, a no. of other
After the completion of the first project quite efficiently, the floor manager Fareha
Ramadan, assigned us another project which was even larger than the first one.
However one more intern was included in our team. The job was to update the
previous account no. of 8000 deposits previously kept at ANZ Grind lays bank.
Then I joined sales and service department. Here I got the opportunity of working and
learning from personal financial consultant, Arshad Iqbal.
The first tasked assigned to me by him was the preparation of detailed schedules of
the PKR interest rates offered by different local as well as foreign banks operating in
the country. I was to obtain the information by calling in the banks and asking for the
required information pretending to be a potential customer for those banks. The banks
included the MCB, City Bank, ABM Amro, Agricole Credit, Faisal Bank, Prime
Commercauil bank and Union Bank. It served the purpose of keeping a close watch
The second task he assigned to me was a study of all the products and services offered
by the bank and based on that study, the preparation of a comprehensive promotional
letter for the Standard Chartered Bank showing the world class portfolio and services
offered by the bank. The letter prepared by me has been attached at the end of this
term paper. After the preparation of this letter, the next step was to mail merge it to
800 or more advertising concerns in Lahore and outside Lahore.
I performed a no. of different tasks there as Account opening process, Know your
customers, issuance of bank statements, and so.
After working with the personal financial consultant, the next department I moved in
was the Govt. sec. Firstly I was not so eager to work there but now after having done
my internship there, near me it is the department I have enjoyed working a lot. I was
fortune enough to have learned from highly experienced and qualified people.
After spending one and a half week in the Govt. Securities Department, I joined the
BSU (Banking Service Unit). There I spend one week learning about the various
funds transfer processes such as demand drafts, pay orders etc.
The last week of my internship was spent in the lending department. I performed a no.
of tasks. I also prepared the Profile of Niaz Company, which has been given at the end
of the report.
Today when almost five months have passed since the completion of my internship,
when I look back at those days, I find each and every instance as fresh in my mind as
it has happened only a few days before. This tremendous experience composed of six
weeks has further elevated my desire of working in a bank I really enjoyed working in
Now at the end., when I am almost done with my internship report, I am going to tell
about the problems I encountered during my internship as well as while preparing my
internship report.
The first problem I encountered with was getting the annual financial statements of
the bank. Since a foreign bank, its annual report was not available with the branch I
was working in. For this, I am thankful to the Floor Manager of the bank, who
provided us with a copy of the financial statements of the bank.
Getting the report prepared was the hardest thing I have done in my life. When I have
almost completed my internship report just a few days before the dead line, the hard
disk me computer went corrupt resulting in a dismal situation for me. Fortunately, I
had sent almost 80% of the report in my e-mail accounts as a security measure. I am
thankful to my friends who gave this brilliant idea of saving the material in the e-mail
account. Now it was the most embarrassing moment for me, as I never checked my
mailing account that it contains the data sent by me. Fortunately every thing was
secure in my account. I have to complete the rest of the report in just two days. And I
know what I have to do in giving this final touch to the report.
Anyhow, it was a very learning experience for me that I will never in my entire life.
NPL is engaged in the business of manufacture and sales of savory snacks foods. It is
a major nationwide player in the corn-based segment of the industry as it accounts for
more than 50% of the market share. Its key objective is the development of its market
share in the corn-based segment of the snack food industry.
NPL’s banking group includes three local banks MCB, HBL, and Prime Commercial
Bank. NPL is currently producing “TOP POPS” (launched ten years back) where as it
is planning to introduce a new product “PARTY PUFFS” in the near future. It
depends on the imported raw material mainly from Europe and Far East. Its target
market comprises of primary and secondary school children.
PROMOTIONAL LETTER
Respected Sir:
After 140 years of unmatched worldwide services, Standard Chartered Bank is proud
to be ranked among the best banks of the world. Our 21 branches from the largest
foreign banking network enable you to access your account from across the country.
The core reason behind our success is no doubt the trust you have placed in us by
giving us the opportunity to serve you. Our competent and friendly working staff
working in 21 branches in Pakistan, is committed to upkeep your trust. Our prime
goal is to serve you better than anyone else as we value your money, time and efforts.
Just give us an opportunity to prove that we do what we claim. You will be pleased
with the dealing of our staff as our long life valued customer. If you have any query,
please feel free to contact the undersigned.
Yours Sincerely,
MohammadArshad Iqbal
Personal Financial Consultant
Standard Chartered bank
www.standard chartered.com
My observation