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Commercial banks
POST MID Project of MONEY BANKING FINANCE
PRESENTED BY
TEAM “A”
TEAM MEMBERS:
NAME ROLL
No
1. SHAHRUKH KHAN (L)
8334
2. SHAHRUKH KHAN
8332
3. ABDUL RAUF
8335
4. NOMAN
8354
5.ZEESHAN TARIQ
8306
COURSE
• B.B.A 3RD
SUBMISSION DATE
• 12th May 2009
PRESENTED TO
• Miss Habiba
A DETAIL STUDI ON COMMERCIAL BANKS AND ITS IMPORTANCE
Page 4
Contents
1. executive summary
2. history of bank
3. primary and secondary functions
4. types of loans and their procedure
5. types of account the bank offers
6. references
• Currently:
Principally engaged in the business of commercial banking with
a network of 175 branches, including a wholesale branch in the
Kingdom of Bahrain and a branch in Karachi Export Processing
Zone. The Company also operates four Islamic Banking
branches. The Company offers Internet banking, consumer
banking and commercial banking.
• Primary functions:-
There common primary functions which are used by the bank
are as follows:-
1)To accept deposits at lower rates.
2)Use these deposits by lending to people at high rates
3)Earn from this lending
Example:
The primary function can be further explained by an example.
Suppose the deposit is accepted by Mr. X in Bank Al-Habib for Rs
100,000 at 5% profit. The money taken from Mr. X by Bank Al-
Habib is landed to Mr. Y at 15% interest, from this 15%, 5% is
given to Mr. X as a profit and remaining 10% is earned by the
bank.
4)The primary function of a bank is also that it acts as a
subsidiary of central bank. In Pakistan, State bank of
Pakistan act as the central bank.
• Secondary functions:-
The secondary functions which are used by the bank are as
follows:-
1)Bank accepts all utility bills.
2)It issues guarantees on behalf of a customer.
3)Support in foreign trade.
4)Support foreign exchange earnings/transfers.
5)Opening of letter of credit.
6)Issuance and distribution of the currency to general public
on behalf of State bank of Pakistan.
A DETAIL STUDI ON COMMERCIAL BANKS AND ITS IMPORTANCE
Page 4
Types of loans
• Mortgage of property;
In this type of security, the limit is given to the customer against
having the right of Mortgage of the property. The property can
be Commercial, Residential and Industrial. If the customer is
unable to pay back the limit under the time period, the Bank has
the right to sell their property and cover up their loss.
Basically, Bank provides 70% limit against the value of the
security for e.g. the value of the property is 100,000 so the Bank
will give 70,000 limits, but 70% limit is only given to the trusted
customer. If the new customer wants to get limit the Bank give
50% limit against the value of the security.
Finance against Trust Receipt (FATR)
Term finance:
it is the type of limit which is given to the customer in the form
of installment. Installments can be paid in 1 year to 5 years. It
can be called Short term Loans and as well as Long Term Loans.
Staff loans:
There are 3 types of limits in Staff Loans:-
I. House Loan
II. Motorcycle Loan
III. Staff Personal Loan
But only Staff Personal Loans is only the Short Term Loans.
Other two types are the Long Term Loans.
Consumer loans
There are 3 types of limits in consumer Loans:-
I. Auto Loans\ Car Loans
II. Personal Loans
III. Credit Cards
• Auto loans:
A DETAIL STUDI ON COMMERCIAL BANKS AND ITS IMPORTANCE
Page 4
It is some kind of a Short Term Loan because some of the
customer takes the limit to buy a Car for the time period of 1
year, but the time period can be exceeded to 5 years.
• Personal laons:
It is also some kind of a Short Term Loan because some of the
customers take it for the time period of 1 year but it can also be
exceeded to 5 years.
• Credit cards:
It is a type of a Short Term Loan by which customer uses the
money and pay back the cash after every monthly basis.
Non-
Fund
fund
based
based
Funds are
Funds are Fund
Fund not
credited/p money is
money is credited/p
ut into not
directly ut into
customer directly
involved customer
account involved
account
Letter
Letter of
of credit guarant
ee
Salana account:-
AL Habib Salana Account is a deposit account and can be
opened with Rs, 25,000/-All other rules applicable to PLS Savings
account will also apply to AL Habib Salana Account inculding
Zakat, Withholding Tax and other Government Levies unless
exempted.If the deposit is encashed before maturity, profit will
A DETAIL STUDI ON COMMERCIAL BANKS AND ITS IMPORTANCE
Page 4
be calculated and paid for the period held at the rate applicable
to Savings Account.AL Habib Salana Account profit is paid on
yearly basis.The indicative return payable on “AL Habib Salana
Account” deposit effective March 01, 2009 is 12% per annum.Up
to 90% financing allowed against deposit.
Contact
Head office