United Bank Limited

Table of contents

1. OVERVIEW OF THE ORGANIZATION 4 1.1. BRIEF HISTORY OF THE ORGANIZATION: 1.1.1. ABOUT UBL 1.1.2. FORMULATION 1.1.3. NATIONALIZATION 1.1.4. PRIVATIZATION OF UBL 1.1.6. UBL TODAY 1.2 MANAGEMENT HIERARCHY 1.3 PRODUCT LINES 1.3.1. DEPOSIT PRODUCTS 1.3.2. LOANS & CARDS 1.3.3. AGRICULTURAL PRODUCTS 1.3.3.1.1. FARM LOANS 1.3.3.1.2. NON FARM LOANS 1.3.4. Small Business 1.3.5. NRP services 1.3.6. Other Services 2. Work Done and Departments 2.1 DEPARTMENTATION 2.1.1 DEPOSIT DEPARTMENT 2. 1.2. REMITTANCE DEPARTMENT 2.1.3. BILLS DEPARTMENT 2.1.4. Clearing Department 2.1.5. Cash Department 2.1.6. Advances Department 2.1.7 Foreign Exchange Department 3. Conclusion 4. References

5 5 6 7 7 9 9 10 10 10 10 12 15 15 15 18 22 22 24 24 27 35 36

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1.

OVERVIEW OF THE ORGANIZATION:

1.1. BRIEF HISTORY OF THE ORGANIZATION: 1.1.1. ABOUT UBL: The history of UBL can be divided into four main Phases: Formulation Nationalization Privatization UBL Today 1.1.2 FORMULATION: In June 1957, Mr. Agha Hassan Abidi decided to open a Bank different from others, to provide modern facilities to trade and industry and to promote thrift and habit of saving amount common thereby stimulating the economy as a whole. Necessary formalities completed for obtaining registration certificate from State Bank of Pakistan to perform business activities. After passing through all these formalities on 7th November, 1959 United Bank Ltd came into existence as a Schedule bank. The Head office of the Bank was established in the New Jubilee Insurance House, 1.1 Chundrigar Road Karachi. It was registered as a joint stock company. The bank was incorporated with an Authorized Capital of Rs 20,000,000 and issued and subscribed and paid up capital of RS 10, 00,000. Saigol family owned it and Agha Hassan Abedi was its first managing Director. It had posted a profit of 0.7 million in its first year of operation with just eight branches at Karachi. 1.1.3. NATIONALIZATION: As a policy of nationalization fourteen commercial banks was merged into five big banks. So consequently on 21st December 1974 Commerce Bank and Union bank was merged with the UBL. Mr.Mushtaq Ahmed khan Yousafi took over the charge of UBL. Now, there are six directors, a secretary and a president. 1.1.4. PRIVATIZATION OF UBL: UBL was the largest privatization attempted by the government of Pakistan, launched in June 2001, with 21 interested parties. It was impacted by the adverse developments of the September 11, 2001 and was finally concluded in October 2002, which left stage only three bidders. The consortium comprising Bestway Group (BG), out of the U.K. and Abu Dhabi Group (ADG) from the U.A.E. were finally the winners at a record price. Sale proceed was Rs 12350 million. This signaled the strong confidence reposed by these investor groups, in the improved governance of the country, the economic potential, the banking opportunity and the existing management of the bank.

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1.1.5 UBL TODAY: Today the bank has taken progressive steps. The United Bank Limited (UBL) management has launched its new corporate identity and changed its 44 year-old-logo following its privatization. UBL has started the Online Banking & Click n Remit services. CHAIRMAN: His Highness Shaikh Nahayan Mabarak Al Nahayan. DEPUTY CHAIRMAN: Sir Mohammed Anwar Pervez OBE. PRESIDENT & CEO: Mr. Atif R. Bokhari. BRANCHES: 1079 Domestic, 17 Overseas Branches. REPRESENTATIVE OFFICES: 2. Tehran 3. Kazakhstan 4. China SUBSIDIARY: United Bank AG Zurich, Switzerland. United National Bank Limited, UK (Joint venture with NBP). UBL Fund Managers Limited. ASSOCIATED COMPANIES: Oman United Exchange Company, Muscat. UBL Insurers Limited. OFFSHORE BANKING UNIT: Export Processing Zone, EPZ Branch, Karachi, Pakistan. HEAD OFFICE: State Life Insurance Corp. Building #1, I.I. Chundrigar Road, Karachi, Pakistan P.O. Box No.: 4306 Phone: (92-21) 111-825-111 Gram: "UNITED" Fax: (92-21) 2413492. 4

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1.2 MANAGEMENT HIERARCHY:

Central Office Karachi

Controlled by President

Regional Office (South)

Regional Office (North)

Sindh
Branches

Baluchistan
Branches

Northern Area Branches

Punjab Branches

Azad Kashmir Branches

Islamabad Branches

N.W.F.P Branches

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1.3 PRODUCT LINES

1.3.1. DEPOSIT PRODUCTS:

.

The term Bank Deposit refers to an amount of money in cash or checks form or sent via a wire transfer that is placed into a bank account. The target bank account for the Bank Deposit can be any kind of account that accepts deposits UBL has taken progressive steps and has introduced innovative Products and services to provide you a variety of banking and Financing services including Current and BBA Accounts. UBL uniflex account UBL unisaver account UBL profit cod PlS regular term deposit receipts
Foreign currency Savings & foreign currency term deposit receipts

UBL E-transaction

1.3.2. LOANS & CARDS:

UBL also provides loans and cards to people to make them more comfortable and increase their own reliability. UBL gives these services to facilitates people feel more relaxed and secured even when they have not enough money to buy their necessities. UBL offer following services in LOANS AND CARDS:

UBL MONEY:

UBL BUSINESSLINE: 7

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UBL CASHLINE:

A salaried person of 21 to 60 years, and your monthly net salary is Rs. 15,000 or more; OR A self employed business person/professional between the ages of 21 to 65 years, and your monthly net take home income is Rs. 35,000.

UBL DRIVE:

UBL ADDRESS:

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Eligibility Criteria: Minimum monthly income: Rs.15, 000. Age: 23 to 65 years. Resident Pakistani. Self-employed businessman (SEB)/professional (SEP) or salaried individual. Minimum loan size: Rs. 500,000. UBL PAYPLUS: Eligibility Criteria: Must be Permanent Employee of company. Maximum Loan Amount of up to 15 gross salaries or PKR 500,000.00 (which ever is less). Installment amount must not exceed 33% of Net Take Home Salary (NTHS). Loan amount not to exceed 90% of already accrued End Service Benefits (ESB). Repayment through 12, 24, 36, 48 or 60 monthly installments. Maximum age should be 55 years on the date of disbursement. UBL CRDIT CARD:

1.3.3. AGRICULTURAL PRODUCTS:

Financing is available for Major and Minor crops across Pakistan. Main purpose of financing is to facilitate farmers to purchase Agri Inputs such as Seeds, Fertilizers, 7

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Pesticides, Sprayers, hired labor etc. FARM LOANS: DEVELOPMENT LOAN LAND DEVELOPMENT, EQUIPMENTS AND MACHINERY TRACTOR & VEHICLE FINANCE NON FARM LOANS: LIVESTOCK FINANCING POULTRY FINANCING FISHERIES FINANCING

1.3.4. SMALL BUSINESS:

Under the Small Business Scheme, UBL is providing loans on easy terms to those who wish to set up their own small-scale business. This scheme is aimed at spreading prosperity in the country by reducing unemployment. As more and more people start their own industrial units, the country will move steadily towards economic self-reliance.

1.3.5. NRP SERVICES:

UBL has taken progressive steps and has introduced innovative products and services to provide customers a variety of banking and financing services.

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UBL CLICK N REMIT:

United Bank Ltd. is pleased to offer you access to a Reliable, Fast, Secure, Convenient and inexpensive way of remitting money to anyone in Pakistan. The entire transaction is completed online and with just a few clicks of a mouse, your money is on its way to the recipient of your choice. There is no need to visit a bank to use this service. Remitting money is just a click away through UBL Click N Remit.

TEZRAFTAAR:

Free Doorstep Remittances With-in the country or from abroad, UBL offers the most efficient and price competitive service. With their large network of branches, they are poised to offer customer service almost at customer door step. UBL's new remittance service, TezRaftaar offers all overseas Pakistanis the fastest and the most convenient delivery of their money to their beneficiaries in Pakistan. Best of all, TezRaftaar is completely cost free and is available at all UBL branches along the Bank's Network in the Middle East, UK and US. UBL CLICK N BANK:

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Click N Bank eNRP Account - A simple & convenient way to open, fund and operate account in Pakistan. Its completely online. Some features of this service are: Complete online registration. PKR Accounts operable nationwide. Primary and supplementary ATM cards. Check book (Order online). UBL net banking.

NRP DIRECT:

United Bank brings to you a simple & convenient way to open, fund & operate a bank account in Pakistan. NRP Direct is the first & only deposit account ever to be launched for Non-resident Pakistanis. Now feel at home with your NRP Direct account!

1.3.6. OTHER SERVICES:

UBL E-STATEMENT:
UBL has launched the UBL e-statement facility which makes it easier for customers to get their statement of accounts and automated transactional debit/ credit alerts right into their inbox. It is available for all Rupee and Foreign Currency Account holders.

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UBL WALLET:

UBL offers ATM and Debit Card facility to all account holders at all UBL branches anywhere in Pakistan, regardless of whether their branch is online or offline. UBL HAMRAH: UBL has always been at the forefront in identifying and meeting the financial needs of its valued customers. UBL was the pioneer in introducing Rupee Travelers Cheque facility in Pakistan, as early as 1971 UBL WIZ:

UBL Wiz is Pakistans first ever Prepaid VISA Debit Card that provides the convenience, security and benefits of an ATM and Debit Card, locally and internationally. More than just an ATM card, you can use your UBL Wiz everywhere VISA cards are accepted. Whether you are using it online, paying for petrol, shopping or dining, you are accessing money directly from your prepaid card, without having to visit the bank.

UBL NETBANKING:

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UBL net banking is an Internet Banking portal offering a simple, convenient and secure method of accessing bank accounts on the Internet.

UBL ONLINE: This service is available only for corporate customers of UBL.

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2. Departments at UBL-main branch

2.1 DEPARTMENTATION: "Departmentation refers to the formal structure of an organization composed of various departments and managerial positions and their relationship to each other". Departmentation results from the division of work and the desire to obtain the organization units of measurable size and to utilize the managerial ability. There are many departments in the banks and it is not impossible to work in all departments. during my two month internship I work in general banking like deposit department and remittances department but in spite of these departments I had also understand the working of the other departments As far as the UBL Imamia colony branch is concerned, it has divided its activities on the basis of different functions into following departments. 1. 2. 3. 4. 5. 6. 7. DEPOSITS DEPARTMENT REMITTANCES DEPARTMENT BILLS DEPARTMENT CLEARING DEPARTMENT CASH CELL ADVANCES DEPARTMENT FOREIGN-EXCHANGE DEPARTMENT

2.1.1 DEPOSIT DEPARTMENT:

Banking is a service industry. The life-blood of banking is deposit without which no bank can function and earn profits. Therefore, one of the important duties of the sales staff is to sell bank liability products particularly low cost deposit i-e PLS-SB and CD Accounts in the market. To increases the deposits of branch following efforts are made: Efficient prompts and personalized service. Personal contacts with present and prospective customer. Publicity campaigns through newspapers, electronic media and others. Deposit mobilization campaigns. Incentives/rewards for both operations and Sales Staff. New remunerative Schemes/products.

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Function of deposit department:

Providing guidance to a prospect wishing to open an account assisting them in filling forms, SS cards, cheque requisition slip and completion of their formalities. The new a/c holder is opening and operation of various types of account. Maintenance of account opened and closed register and SP/CD Reference books. Maintenance of CD/SB/NICF ledgers. Posting of cheques and vouchers. Balancing of ledgers. Applying profit/loss to PLS-SB a/cs. Marking stop payment of Cheques. Preparation of inquiry memos. Preparation, dispatch and keeping records of debit/credit balance confirmation letters on closing. Preparation, dispatch and keeping records of debit/credit balance confirmation letters on closing.

DEPOSIT DEPARTMENT ACCOUNT OPENING CHEQUE BOOK ISSUING DEPARTMENMT :

ACCOUNT OPENING The following types of accounts are opened by the bank: 1. Current Account 2. Proprietorship 3. Partnership 4. Joint Stock Company 5. Societies/Club/Association

CHEQUE BOOK ISSUING DEPARTMENT:

A. TYPES OF CHEQUES: There are two types of Cheques. 1. 2. Open Cheques Cross Cheques

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1. Open cheques: Open cheques are those which are payable at the counter of the bank. There are two types of open Cheques: Bearer Cheques Drawer order the bank to make payment to the person who hold the Cheque Order Cheques Drawer order the bank to make payment to a specified person whose name is mentioned in the cheque. The bank pay only when it satisfied about the identity of payee. 2. Cross cheque: A cheque with two small parallel lines is a crossed cheque. You cannot encash such a cheque across the counter. It will only be credited to a bank account. Such a cheque has to go through clearing. Kinds of crossing: There are two types of Crossing. 2.1 General Crossing: The drawing up of two simple parallel transverse lines on the face of the cheque at the top left hand corner with or without the words & co, not negotiable or Account Payee only in know as general crossing. 2.2 Special Crossing: A cheque deems to be crossed especially when it bears across its face the name of the banker either with or without the words not negotiable. In case of special crossing the payment can only be made to the bank named therein the cheque. Objective of Crossing: 1. It prevent the payment of the cheque to a wrongful holder. 2. It ensures safe payment to the concerned party. 3. It is a guard against any cheating or theft. B. ENDORSEMENT..: "The writing of a person's name either on the back or the face of instrument followed by one's signature for the purpose of negotiation is called endorsement". Suppose you receive a crossed personal cheque. You can deposit this cheque into your bank and receive payment in 2-3 days. What if you needed the money urgently? If the cheque is simply crossed, you can endorse the cheque to a friend. The friend can give you cash against the cheque. He / she will then deposit the cheque into their account. The bearer cheque merely endorsed by delivery to another person. 1. 2. 3. 4. 5. Chequebook issuing by "cheque book requisition" against charges of Rs.30\-. Authorized officer takes the signature of client on the requisition. Signature is the referred to Remittance department to verify the signature of the client. Then pass the entry in the register and take the signature of the client in the register. Put it into system. 1 8

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6. Ticking of amounts and account No. by matching with depositing slip and those cheques which were cashed in the branch. 7. Maintenance of the register of "Stock of stationary (such as cheque books, pay orders, demand drafts, RTCs form, TTs forms, stamps on hand it's a name of document, letter of continuity which is required in advance department).

2.1.2 REMITTANCE DEPARTMENT:

Remittance function involves mobilization of money from one place to another. Remittance department only provides its services for out station mobilization of money and deals with documents i.e., demand draft, telegraphic transfer and rupee traveler's cheque. Remittance department deals in following instruments. 1. 2. 3. 4. 5. 6. Demand Draft (DD) Pay Order (PO) Telegraphic Transfer (TT) Mail Transfer (MT) Pay Slip (PS) Rupee Traveler Cheque (RTC)

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DEMAND DRAFT:
1. Demand draft is a written order, drawn by one branch of a bank upon another branch of the same bank, or upon another bank under special arrangements to pay a certain sum of money to or to the order of a specified person. 2. Demand draft is a negotiable instrument. 3. Demand draft is neither issued payable to bearer nor drawn on branches situated within the same city. 4. It is to be insured that the purchaser of Demand Draft is able to at least sign his name. Thumb impression is not to be accepted on DD. A person unable to sign and not having an account may be advised to apply for DD through a literate person to sign on his behalf. To avoid complications DD are not to be issued to Minors. The followings are the parties to a Draft.
1. 2. 3. 4.

Purchases: Is a person, firm, company or local authority. Issuing or Drawing Branch: Which issues a draft on another branch. Drawee Branch: Is one on which a draft is drawn. Payee: Is a person named in the Demand Draft to whom or to whose order the money is directed to be paid.

Issuance of demand draft: 1. 2. 3. 4. 5. 6. 7. On DD application form branch code Hub and Spoke Branch. Commission and other charges will be recovered with normal procedure. Attorney Officers will sign instrument. Name of Drawee (spoke) branch and Hub Branch will be written on instrument. Deliver instrument to purchaser against acknowledgement. DD application form along with all vouchers of the day will be sent to Hub branch. Address of the remitter account number must invariably be written on the back of the DD application form. 8. Hub branch receipt of vouchers (DD Application). 9. Post in the system. 10. System will generate IBCA. 11. Dispatch to Hub branch drawee spoke branch. Encashment of demand draft: 1. Presentation of DD at Spoke Drawee branch. 2. Counter (cash payment). 3. Crediting in the account. 4. Through clearing/Transfer Delivery.

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PAY ORDER:
The Remittances Department on request of the customer/noncustomer issues payment Order when he deposits amount in bank. Since payment through a cheque is doubtful, pay order is generally acceptable be the Government/private Institutions. Some time parties also prefer to make payment through pay order, as they have an acknowledgement (proof) of payment.

Issuance of pay order: 1. Pay order Application Form is filled up and signed by the purchaser. 2. Amount of pay order plus Commission, Excise Duty is deposited with cash department or cheque or party debit voucher debits party account (as the case may be). 3. Pay order instrument is prepared a signed by two authorized officers. 4. Particulars are recorded in any order issued register. It is handover to the purchaser against acknowledgement ("payees account only" crossing stamp is affixed on the face). Payment of pay order: 1. Pay order is presented for payment in Clearing or transfer delivery. In rare case it may be presented for cash payment on counter if it was issued uncrossed (open). 2. Genuineness of pay order is ascertained; date paid is marked in pay order issued register.

PAY SLIP:
Mostly the branch expenses and refunds are made through Pay Slip. It is legal receipt (nontransferable subject to stamp duty). Issuance of pay slip: Pay Slip is issued for making payment of branch expenses such as: 1. 2. 3. 4. 5. 6. 7. 8. Payment of profit on PLS/TDS-NDR. Refund of Demand. Draft Cancelled. Payment of Subscriptions, newspapers. Payment of Petty stationery. Payment of repairs & renovations etc. For the above purpose Pay Slip is issued by debit to expenditure account. Disbursement of House Building Loan/Motor Cycle Loan of staff concern is some time also effected through pay slip. 9. When Pay slips issued, particulars such as name of the payee, pay slip number, date issued (date issued is not written on Pay slips) are recorded in pay slip issued register. 2 1

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Payment of pay slip: 1. Pay Slip may be presented on counter for cash payment (or can be deposited in account). 2. Genuineness of the pay slip is ascertained; date paid is noted on he face of pay slip and is marked in pay slip issued register.

RUPESS TRAVELLERS CHEQUE:

This Facility is basically for the businessmen. Through this facility they can easily keep a huge amount of money with safety.

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2.1.3 BILLS DEPARTMENT:

Ordinary bill is a document giving the relevant details of similar goods sold. But in banking by bill, we mean the bill of exchange and other similar instrument received for collection .The collection of cheques and bills on behalf of the customer is an important product of almost every modern bank, which can hardly be dispensed with because of the following reasons. FUCTION OF BILLS DEPARTMENT: A) OUT WARD BILLS FOR COLLECTION: 1. Bills/Cheques drawn on and sent to our branches. 2. Bills/Cheques drawn on the other banks collected through our branches. 3. Bills/Cheques drawn on other banked collected directly through them. B) INWARD BILLS FOR COLLECTION:
1. Bills/Cheques Received from our branches located and drawn on UBL.

2. Bills/Cheques received from our branches drawn on other banks. 3. Bills/Cheques received directly from other banks.

IBCA:
Fitch IBCA credit ratings are an opinion on the ability of an entity or of a securities issue to meet financial commitments, such as interest, preferred dividends, or repayment of principal, on a timely basis. Fitch IBCA credit ratings apply to a variety of entities and issues, including but not limited to sovereigns, governments, structured financings, and corporations; debt, preferred/preference stock, bank loans, and counterparties; as well as the claims-paying ability of insurance companies and financial guarantors.

2.1.4 CLEARING DEPARTMENT:

CLEARING: Clearing is a system by which banks exchange cheques and other negotiable instruments, drawn on each other, within a specified area, and secure payment for their clients through clearing house specified time by book entries. TWO TYPES OF CLEARING: a) Inward clearing b) outward clearing 2 6

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a) Inward clearing: 1. The satellite branches will handle all collection items. 2. The satellite branch will ensure the validity of cheque, signature verification amount in words and figures and stop payment instruction etc. 3. In case the drawee satellite of same central is away from central even then the cheque should be sent to satellite branch, other banks will automatically be forwarding the Cheques to satellite branch by referring to the printed name of satellite branch. 4. The drawee satellite branch will control / Mark the balance in the blue ledger and will forward collection cheque together with collection schedule (source DD issuance document), for posting at central branch and for issuance of down on collection schedule for posting at central branch and for issuance of IBCA.DD will be issued by the satellite branch of which will be noted down on collection schedule. . Returns:
1. The

presenting branch shall receive the outgoing clearing unpaid returned scroll and instruments and immediately reverse the transaction in the respective account. 2. Presenting branch shall respond the IBCA received from the main branch (prepared by NIFT) showing the number of instrument returned unpaid as well as the net amount. b) OUTWARD CLEARING: 1. In outward clearing branch acts as collecting banker. 2. Branch deposits are increased when clearing is realized. Outward clearing at main branch: 1. Instrument with two copies of branch house page and branch schedule is received. 2. Branch wise entry is made in house register, regarding name of branch and total number and amount of cheques received. 3. Simple credit HO voucher for the branch concerned is prepared and is kept along with original house page for the time being. 4. Instruments are sorted out bank wise. 5. Main schedule is pre pared in duplicate. 6. Main house page is prepared in duplicate and its amount is tallied with amount of house register. 7. The main house page, main schedule and one copy of branch house page and branch schedule along with instruments are sent to clearing house, while duplicate copies of main scheduled and house page are kept as office. 2 6

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Outward clearing at SBP/NBP: 1. The representative of banks exchanges cheques. 2. Total amount and number of instrument received from other banks entered in clearing house book against house book against each bank. 3. Declaration forms are completed and submitted to the controlling staff of clearing house. 4. Clearing House Register is completed from declaration forms. 5. Debit and Credit side of register, If equals the clearing house book is supposed to be balanced. 6. Entries are made in the ledger maintained by the supervisor of clearing house of SBP / NBP. 7. Clearing now received, in exchange of our outward clearing shall be called as sour inward clearing.

2.1.5. CASH DEPARTMENT:

the following books are maintained in the Cash Department Receiving Cashier Book 1. 2. 3. 4. Paying Cashier Book Token Book Book Cash balance Book

When cash is received in counter. It is entered in the Scroll Book and Receiving Cashier Book. At the close of the day, these are balanced with each other. When the cheque or any negotiable instrument is presented at counter for payment. It is entered in the token book and token is issued to the customer. The token and the Cashier make entry in the paying book and payment is made to payee. At the close of day, the Token Book and paying Cashier Book is balanced. The consolidated figure of receipt and payment of cash is entered in the cash balance book and drawn closing balance of cash. Opening balance of Cash + Receipts payments

Closing

Balance.

This is very important department. An officer check all the books maintained in this department.Cash department prepares the utility bills sheets, which are sent by the bank to WAPDA, Sui Gas Department, and PTCL etc for their respective bills. 2.1.6. ADVANCES DEPARTMENT:

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Types of Advances: 1. 2. 3. 4. 5. UBL advances the following types of advances Running Finance (Overdraft) Cash Finance (Cash Credit) Demand Finance (Loan) Discounting the Bills of Exchange

TYPES OF SECURITIES: The following are the types of securities are generally accepter for advances. Banker' Lien: A lien is the right to retain property in its possession till its (banker's) dues are cleared. Lien gives a person only a right to retain the possession of the goods and not the power to sell. Guarantee: When an application for advances can not offer any tangible security, the banker may rely on personal guarantee to protect himself against loss on advances or overdraft to the applicant. Mortgage: A mortgage is the transfer of an interest in a specific immovable property for the purpose of securing the money advanced by way of loan, an existing or future debt. The person in whose interest the property is transferred is known as "Mortgagee". The person who transfers an interest in property against a debt is called" mortgagor". Hypothecation: Hypothecation is defined as" a legal transaction whereby goods may be made available as security for a debt without transferring property or the possession to the lender". Hypothecation is very risky on two main grounds. One, as the goods are in the possession of the owner, the borrower may take out the goods without informing the bank. Secondly, the bank does not have a legal claim as it does not have a valid charge over the goods. Pledge: A pledge is a contract whereby a good is deposited with the lender as security for repayment of the loan. The delivery of goods may be made by transferring the goods from the owner's go down to a banker's go down or the keys of the owner's go down be handed over to the lender. The delivery of documents of title relating to goods also creates a valid pledge. The person delivering the goods as security is called "pledger" and the person to whom the goods is delivered is known as "pledgee". DEFERAL OF SECURITY/SUPPORT DOCUMENTAION: It is UBL's policy to disburse the approved credit facilities after perfection of the security/support documentation. Therefore, deferral of credit documents will generally be 2 6

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discouraged. There may however, be genuine situations where deferral of credit documents be necessary for disbursal of approved credit facilities on exceptional basis for selected customers. The deferrals will be kept at the minimum and will initially be allowed based on tenor may be allowed based on justifiable grounds. The maximum tenor for all deferrals will not exceed 90 days. The following guidelines will be observed for allowing deferrals: 1. The customer has proven positive for track recede 2. The customer has undertaken in writing to regularize the deferred document within the stipulated time. 3. The bank is not exposed to a pecuniary risk on account of the proposed deferral. 4. Completion of deferred documentation is certain and. 5. The deferral does not violate any of the regulatory requirements.

TYPES OF DEFERRED DOCUMENT: A) ANCILLARY DOCUMENT: The ancillary is supportive in nature for determination of bank's legal position. This document will be deferred only when the client has executed basic security/support documentation and has completed all the pre-requisites while deferral is required for completion of procedural formalities by the concerned authorities. In such cases the bank retains an irrevocable right/authority to collect the deferred documents in due course. B) PRIME DOCUMENTS: The prime documents are conclusive in nature and are therefore crucial for establishing Bank's right and/or claims. These documents evidence disbursal of facilities and creation of the relative securities. The prime documents may include:

Mortgage/Title Deeds. Documents for filing of charges. Board resolution for borrowing etc.

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2.1.7 FOREIGN EXCHANGE DEPARTMENT:

Foreign exchange department carries out international banking under SBP regulations. The main functions of this department include opening of foreign currency account in four currencies i.e., DM, UK Pound, $ and Japanese Yen, sales and purchases of foreign currency, issuing of foreign currency traveler's cheques, FTT, FMT, and FDD.

CASH, REMITTENCES, CREDIT & CLEARING DEPARTMENTS:

DEPOSITE DEPARTEMNT: As per the definition of Banking under see 5(b) of BCO 1992 one of the main functions of a bank is to accept deposit. Deposits are the backbone of any bank; other functions of the bank primarily depend upon the type and size of deposits. UBL accepts deposits under the following three accounts. i. Current account ii. PLS Saving account iii. Terms Deposits Opening of Account: To open an account in UBL the customer will have to fill an account opening form in front of bank officer. He has to sign in all required places in front of the officer. Documents Required in Account Opening: i. N.I.C Copy. ii. Account opening form (provided by bank) iii. Two photograph (in case of illiterate person) iv. Specimen Signature card (Provided By Bank) iv. Cheque Requisition Form Types of Account: a. Individual Account:

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In this account a single customer operates the account. The banker will run the account according to the rules, but if the customer gives special instructions the Bank will have to follow it. b. Joint account: In this type of account two or more than two persons will open the account. The account will be operated by one account holder in case of (either of the survival). If the instructions are not given, all the account holders will have to sign the check. NATURE OF ACCOUNTS: A) Current Account: These are non-profitable demand accounts. The account can be opened with minimum amount of rupees 1000/-. These accounts are usually maintained for business purpose. Due to enormous competition UBL has introduced daily profit current account for corporate clients called (UNISEVER) minimum balance required is Rs. 100,000/-. If minimum balance requirement is not met, bank is authorized to recover predetermined charges. B) PLS Saving Account: These accounts were intended with the aim of encouraging thrift among people. These accounts can be opened either in Pakistani rupees or in few major currencies of the world. Bank offers (4%- 6%) return on these accounts. The basic feature is the profit and loss sharing as according to non-interest based banking system. These accounts can be opened in the name of; individuals, joint names, trust accounts, charitable organizations. Unlike current accounts, Zakat is applicable on local currency saving accounts. Minors accounts can be opened on the condition that their guardians shall operate these accounts. C) Term Deposits: Term deposits are also called fixed deposits. These can be with drawn after a specified period of time. Interest is paid to the depositor on all fixed or term deposits. The rate of return varies with the duration for which the amount is kept with bank 3 5

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There are two types of term deposits. i. STDRS Special Term Deposit Receipt (local currency): Special Term Deposit Receipts are issued for different periods of maturity ranging from one month to 5 years, having attractive returns. There is no limit on denominations. ii. NTDRs Notice Term Deposit Receipt (local currency): These are term deposit with special features that these can be withdrawn any Time but after giving a predetermined and pre agreed early notice.

REMITANCES DEPARTEMNT: Current business trends demand fast movement from one geo-graphic end to another. Latest technology and telecom data transmission has made it possible to make such transactions with in minutes. Demand draft (D.D): D.D is a negotiable instrument issued by branch of the bank drawn on other branch of the same bank

2. Telegraphic transfer (T.T): Transfer of funds to another branch of the same bank with the help of test numbers. If the test number agrees the bank make payment to the party. 3. Mail Transfer (MT): When the money is not required immediately, the remittances can also be made by MT. Here the selling officer of the bank sends instructions in writing by mail to the paying bank for the payment of a specified amount of money. The payment under transfer is made by debiting the buyers account at the sending office and crediting it the recipients account at the paying bank. UBL takes mail charges from the applicant where no excise duty is charged.

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4. Pay Orders: Pay order is banker cheque issued favoring a named beneficiary. The issuance Bank is discharged by payment in due course. Application for the PO stamped and the customers account balance is checked or cash received fo rthe amount PO and other charges. Pay Order leaf is typed and crossed if required and signed by two authorized persons. Thereafter it is delivered to the customer. PO can be cancelled at original purchasers request in writing and surrender the instrument, which then marked canceled along with other documents and prior entries. 5. Rupee Traveler Cheques: UBL has launched R.T.C Brand named Hamrah in November 1996. These are issued to applicants with varied denominations without excise duty and commission. When issued HO account is credited and on encashment the same account is debited. RTCs lost cases are communicated to HO and client is either repaid or new RTCs are issued to him/her.

6. Uni Remote: This is a new tool for the transfer of money. This is a step towards the online banking taken by UBL. This tool transfers money from one branch of UBL to other through electronic transfer. The customer will have to fill the deposit slip. On the slip he will write the name and account number of the person to whom the money will transfer, the name of the branch is also written. The amount is deposited with teller and the receipt is shown to remittance in charged. One I.D copy is also attached with slip. The remittances in charge will transfer if by using device (computer) through online service. The fund transfer is must be supervised by another authorized officer. Every time for this is five minutes. CREDIT DEPARTMENT OF UBL: General: Credit extension is the principal function of a bank, through which pace of activity is accelerated in the various sectors of economy. Also the indicators, which mainly reflect the high quality of 3 5

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banks management, are its prudent financing decisions, proper control of finance and prompt recovery. In this regard the credit policy of a bank play a very important role as it provides the overall framework, responsibilities, and authorities and facilitates decision-making. Credit department performance is subject to a defined policy on credit control exercised by the SBP. SBP affect credit decisions through the weapons of bank rate, open market operations, variable reserve requirements, selective credit restrictions and prudential regulations. UBL Credit Policy: Credits operations are undertaken in accordance to banks credit policy. The policy strictly prohibits violation of SBP/Local central banks rules and suggests financing of self liquidating, cash flow supported and well collateralized transactions, which equate the principle of lending (safety, liquidity, dispersal, remunerations and suitability. Facilities offered by UBL: Running Finance (for one year) Demand Finance (3to 5 years) Procedure for Financing from UBL When a party comes for financing, banker will ask the following questions Purpose: In this the party mentions the purpose, they want to apply for the finances. No lending is done with out purpose. Business: The party must have some specific running business i.e. general merchandise, construction business etc. The second question arises of the cash flow that how much flow is generated by the party from the current business. Security: The bank will secure itself against the lending. There can be two type of security. Commercial 3 5

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Residential

The bank prefers commercial security. Relationship Manager (RM) is mainly responsible for the relationship between the banks and party. He acts like a bridge between the two. In the first instance the party would prepare the following property documents. AKS Shajarah Naqsha Tasveeri Approved Building Plan Tresh fard Intaqal Naqal

The party is asked to contact any valuator on the panel of UBL. ICM&L and Tajak Builder are on the panel of UBL. The valuator will visit the site and set market value and FSV of the said property. He prepares report of at least three pages. This document sent for one page legal opinion to any layer on the panel of UBL. Having clear legal opinion RM start preparing credit Approval (CA). The documents are singed by the RM & AM and then forwarded to UBLRHQ in Peshawar. Here SRM examines the CA if he found some exception he will send it back to the respective Rm. RM rectifies the acceptation and send it back to SRM. SRM studied and pass it to credit officer. He has three hours of time to study the CA and if found correct then he pass it to another credit officer. After his examination the CA is passed on to the credit risk manager. He checks the CA and after signing it sent to CAD. He forwards the CA to SCO. Whose office is at UBL RUCO at Lahore, after his signature the C.A is sent back to RCAD. RCAD make a check less list and asked the RM to contact the party to complete the said documents they are.

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Letter of continuity Personal Guarantee Letter of hypothecation of stock D.P Note Mortgage Deed NIC of executants and witness Stock report Insurance policy Party profile After completion of charge document RM send it to RCAD when they found itcorrect, they issues DAC. A copy of DAC is sent to RM and NICF account isopened and debit transaction starts. CLEARING OF BILLS: General: Bank can make payments of only open Cheques on the counter payment. Payment of cross Cheques cannot be made on counter its payment is possible through collecting bankers. The functions of clearing department is divided into two main classes. Inter Branch Transaction Inter Bank Transaction Procedure of Clearance of Cross (Cheques):

Whenever bank receives a cheque of other bank from the client he cannot make payment on the counter. The first job banker has to perform is to put a special crossing across the face of cheque. By special crossing cheque is secured. If it is stolen the paying banker would not suffer because 3 5

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of non-endorsement. On the back of the cheque the stamp is made of payee account will by credited on realization. It is signed by authorized person. Along with the cross cheque the customer has to fill the deposit slip. The half part of slip is given back to the customer. after the special crossing and is necessary endorsement the banker write the amount along with cheque number on paper and attach with each slip. The nagain on he smile paper the amount of all the Cheques along with the bank names are added and attached to cheque presented for clearing, and advice is also attached with the cheque presented for clearing. The following entry is passed on sending the cheque for clearing. Bill lodged for clearing . Dr Bill for collection . Cr The Cheques are sent on the same day for clearing. The bank receives it on other day. The paying bank receives the receipt and the amount is credited in therespective account. The paying banker passed the following. Bill for realization. . Dr Bill lodged. . Cr The other entry passed its Dr. HQ account and Cr Party account. I B C: It means Inter Branch Transaction when UBL received a cheque a drawn on the customers of his branch; first they will cheque the amount in the account on which cheque is drawn. Of the required amount is available in the account they will match the signature on the cheque along with their SS card. If all the requirement are completed the bank will send an IBCA to the bank from which cheque is sent L B C: LBC means local branch cheques received for collection. UBL Nowshera, received cheques from their spoke braches as well as from other UBL branches of the country, drawn of any other bank. They send the cheque to responding bank and after clearing the cheque through clearing houses (which is NBP). They send LBC advised to the bank from which the cheque was received. The following entry is passed after sending LBCA. NBP a/c . Dr 3 5

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Ho a/c. Cr 3.4.4 OBC When the bank receives the cheque from its customer or from any other spoke branch drawn on any other bank of any other city. They sent the cheque to the UBL main branch of that city, after receiving OBCA the bank will pass the following entry. In case of his own customers. Ho a/c. Dr Customer a/c. Cr In case of spoke branch Ho a/c. Dr Spoke Branch a/c. Cr

CONCLUSION
During our visit in ubl main branch banksquare Lahore we observed many things at the United Bank such as its working procedures, policies, and many other aspects of practical nature of a big organization like United Bank. On the basis of all these observations, we have come to the conclusion that the banking field is more competitive and dynamic now a day. There are a lot of financial institutions working side by side. In this competitive environment the bank must have to use more innovative and creative ideas so that to attract customer. Taking care of these things the UBL have started Uni-remote computerized system through which one can send money from one place to another in no time. Which is a good step towards its improvement. Today UBL is opening its eyes to a dynamic new vision that will take banking to new heights and make UBL a world class bank. UBL is the reshaping bank and investing in state of the art technology to give innovative products and services. UBL is now working as a private bank. Its equity position is very strong and it can compete its competitor in every aspect of banking. United Bank is one of the oldest and more settled bank of Pakistan in fact it remained in business of financial services for many years. During its course of history United Bank contributed a lot in the development and fostering the growth of economy in the country. Despite all these facts there are some areas, which needs to be improved, like it should focus on its organization structure, Equal distribution of work should be done and bring professional people to all of its branches in order to meet the requirements of a new era and to fulfill the needs of 21st century.

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References:
www.ubl.com.pk

www.ibp.com.pk "Banking Manual United Bank Limited", 1986. Organization chart of UBL is reproduced from UBL "Annual Report". An interview with sir Ali riasat khan the hub Manager UBL An Interview with sir Zahid abbasi district manager of UBL. An interview with Ibrahim al nasir floor manager/customer service officer UBL bank square branch.

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