CHAPTER -1

INTRODUCTION
1.1 BACKGROUND OF THE STUDY

Financial institutions operating in country are the strength of the economic growth of the country. The Banking sector is one of the examples of financial institutions, which can play a vital role in the development of the over all economy of a country. Banking sector has now become a very challenging field with the advent of modern technology of in creased competition. The role of banking sector is very important for the development of the country but as for as KPK is concerned, the Banking sector has been very advantageous to it, because of the huge amount of remittances from abroad. Askari Commercial Bank Limited is a well-known financial institution having 46 branches through out the country. It incorporated in Oct 9, 1991 and went public on Jun 14, 1992. The major sponsor of group is Army Welfare Trust (AWT), which holds 46% equity stake in Bank. Askari in its short history has tremendous progress. This report attempts to present the study of Askari Commercial Bank Limited focusing its Cantt. (Fakhr-e-Alam road) branch. It is based on my 8-weeks internship.

1.2

PURPOSE OF THE STUDY

Without Internship training it is not possible to write a report on any Organization. The internship program provides the trainee with an opportunity of gaining Knowledge of procedures and principles through observation and actual work performance. In this way, internship training is of great importance. It plays a vital part in developing the managerial skills of the trainees.

The study is based on 8-weeks internship at ACBL attempts to: i.Describe, analyze and evaluate the operations and performance of ACBL. 1

ii.Identify and highlight the Bank shortfalls, problematic areas etc. at macro as well as, Cantt. Branch level. iii.Put forth recommendations for improvement in the Banks performance.

level

1.3

SCOPE OF THE STUDY

The study focuses to ACBL, Cantt Branch Peshawar, about all departments of ACBL are considered in this study. The internship was conducted for two months under the Masters of Business Administration (MBA) Program, which is quite short time to collect and to understand all the information about each of every section of the Bank. But, I made every possible effort to cover all the departments and to gain knowledge about their operations. In this report I have focused on the following departments of ACBL. 1Clearing Department. 2Account Opening Department. 3OBC Department. 4Remittance department. In this report I have tried to make analysis of different policies and strategies of the Bank, as well. I have also tried to give suggestions to further improve the performance and efficiency of the selected functional departments of the branch.

1.4

METHODOLOGY

The main sources of data for my report are as follows:

Priming data sources:

1Personal Observation 2Personal Interviews 3Briefings with Management

Secondary data sources

Certain types of information such as the background details of the organization can be obtained from available published records, the web site of the organization its achieves, and other source. Other types of writing information such as company policies, procedures and rules can be obtained from the organizations records and documents. Data that already exist and do not have to be collected by the researcher 4Official Menu 5Annual Report of the Bank 6Internship Report 7Reference Books 8Circulars 9Brochures 10Askari newsletters.

1.5

SCHEME OF THE REPORT

In order to provide reader easy comprehension and thorough insight, the report is divided into four sections.

Section 1
This section encompasses the background of the study. It also looks into the purpose, scope, methodology and scheme of the study.

Section 2
It gives over all view of the Bank. In this, I have discussed comprehensively the history of banking as well as historical background of ACBL, its present operations, mission and objectives as well.

Section 3
This section encompasses the Departmentation of Askari Commercial Bank Limited. In this section attention has also been given to its specialized departments, their operations and functions. Some light has also been shed on management and organizational structure of ACBL.

Section 4
In this section, observing the operations of the Bank, findings, recommendation, and conclusions and these suggestions have also been given to the management of Askari Commercial Bank Ltd University Road Branch.

CHAPTER-2

INTRODUCTION TO BANKING
Before the actual arrival of the word Bank, it was used as a market place for the exchange of money. Coming from the era of Babylonians of 200 B.C, after Greece and Rome and through the different time periods of Germany. Defining the word Bank as originated from bancus meaning Bench and the German word back meaning the Joint Stock Fund. Some of the authors are of opinion that the word Bank is derived from the German word back, which means joint stock fund. Later on when the German occupied major part of the Italy the word Back was italicized into Back. It has not so far been expressly decided as to how the word Bank originated. Some authors opine that this word is derived from the words Bancus or Banque that mean a bench. The explanation of this origin is attributed to the fact that the Jews in Lombard transacted the business of money exchange on benches in the market place, and when the business failed, the Banco was destroyed by the people. Incidentally the word bankrupt is said to have been evolved from this practice. The opponents of this opinion argue that if it was so, then how is it that the Italian moneychangers were never called Banchierei in the middle Ages? Other authorities hold the opinion that the word Bank is derived from the German word Back which means joint stock fund. Later on, when the Germans occupied major part of Italy, the word Back was Italianized into Bank. It is therefore, not possible to decide as to which of the opinions is correct, for no record is available to ascertain the validity of any of the opinion

After the historical development of Banking in England, the first emergence was that of a small number of large banks with wide network and secondly, increases in the popularity of bank accounts and large-scale use of cheques. With the advent of banks, along came the types of banks depending upon the need and operations of the bank. Categories of Banks have been placed as Commercial Banks, Saving Banks, Merchant Banks, Mortgage Banks, Consumer Banks, Investment Banks, and Central Banks etc. These types were based on the variety of resources of money and the diversity in lending and investment operations.

2.1

EVOLUTIONS AND BRIEF HISTORY OF BANKING

The present forms of banking business are result of continuous process and activities of different persons and societies during different period of times. Evolution of banking can be associated with three classes of old times, money merchants, moneylenders and gold smiths. Banking in its modern form and structured started in Britain when many of the Lombardy merchants came to England in the fourteenth century and settled in the parts of the city of London now called Lombard street. They were so resourceful that, they dealt with not only keeping the money in safe custody but also changed money for the travelers or merchants engaged in foreign trade. The discovery of America brought riches to England and gave a tremendous boost to foreign trade. The merchants now began to hold part of their riches in cash. These merchants however, received a big setback in 1640 A.D., when King Charles-I seized 130,000 and billion left for safe custody with the city merchants at the Royal mint. This shook the confidence of the merchants in the Royal Exchanger and the Royal Mint. Consequently this business was taken over by the goldsmith who up to that time were dealing only in gold and silver. Since these goldsmiths required strong safes for the purpose of their own business, they introduced necessary facilities of safe-keeping of the 5

valuables and cash of their customers. These goldsmiths issued receipts or notes to their depositors in respect of the cash or articles left with them. These were called Goldsmiths Notes, and carried an undertaking to return the money and articles to the depositors or bearers on demand. There were a considerable number of such Notes in circulation among various classes of merchants; and thus they can be aptly called Bank Notes in their earliest form. Over a period of time, these goldsmiths discovered that large sums of money were left in their custody for long periods therefore they started the use of this cash to advance loans to other persons for a fixed period of time and at a considerably high rate of interest. Moreover, they further encouraged cash deposits by their customers by offering them a part of the profits earned on the money. Thus began the issues and deposit banking of modern times. In fact human left the need of bank when it begins to realize the importance of money as a medium of exchange. Perhaps it where the Babylonian who developed banking system as early as 2000 BC. At that time temples were used as banks because of their prevalent respect. During the rule of king Hamurabi (1788 1686 BC) the founder of Babylonians Empire, loans were started being granted for interest. The borrower has to provide guarantee or he had to pledge his goods or valuables. King Hamurabi drew up a code wherein he laid down standards rules for procedures for banking operations by temples and great landowners. Also in Greece, the temples were used as banks, where the people deposited their money and other valuables for safe custody and security. In Europe with the revival of civilization (Renaissance) in the middle of twelve century, trade and commerce started expanding and this development compelled the business community to borrow the money from the Hebrew money lenders on high rates of interest and usury. Seeing the great demand, these moneylenders started organizing themselves and bank started up at the principle seaports of southern Europe. Soon Venice and Geneva became the most important money markets of the time and banking though different from its present form, flourished. What we know as modern banking 6

originated in the 14th century in Barcelona.1

2.2 Early growth

Banking in fact is as ancient as human society. For ever since man came to realize the importance of money as a medium of exchange. Perhaps these were the Babylonians who developed banking system as early as in 2000B.C. It is evident that the temples of Babylon were used as banks because of the prevalent respect and confidence in the clergy. King Hammurabi (1728-1686 BC) the founder of the Babylonian empire drew up a code wherein he laid down standard rules of procedure for banking operations by temples and great landowners. It is not certain as to who invented money; but history records that Gyges, king of Lydia cast electrum (a natural alloy of gold and silver) ingots of identical shape and of uniform weight with a triple emblem engraved on it as an official guarantee of value in 687 BC. Also in Greece, the temples of Ephesus and Delphi were the biggest Banks of their time, where the people deposited their money and other valuables for safety and security, and were also the first-acted financial agents. After some time, Aristotles dictum that Charging of interest is un-natural and immoral became very popular, but the following periods growing necessity forced the acceptance of the principle of interest in lending and borrowing. The Romans, though they did not organize state banking, nevertheless regulated the conduct of private banks in such a way that extreme confidence of the people was created with the Revival of civilization (Renaissance) in the middle of the twelfth century. Trade and commerce started expanding, and this development compelled the business community to borrow money from the Hebrew money- lenders on high rates of interest and usury. Seeing the great demand, these moneylenders started organizing themselves, and banks started coming up at the principal seaports in southern Europe. Soon Venice and Genoa became the most important money markets of the time; and banking, though different from its present form, flourished. What we know now as modern banking originated in 7

the 14th century in Barcelona. In 1401 A D a German Public bank was formed comprising the operations of discounting deposit and transferring of money. By the 16th century, some more public banks were formed in Venice, Milan, Amsterdam, Hamburg and Nuremberg. Similarly in 1690, the Bank of Hamburg came into existence in Hamburg with the business of accepting deposits of fine silver or of foreign moneys and to run accounts on these deposits. This bank rendered great service to the merchants as well as the countries it dealt with until 1873, when it was merged with the Reich Bank2.

2.3 Modern Banking

Despite the classical origin, banking in modern form and structure started in Britain when many of the Lombard merchants came to England in the fourteenth century and settled in the parts of the city of London now called Lombard street. They were so resourceful that even the kings had to depend on them for loans despite the fact that the church was firmly against usury. They dealt with not only keeping the money in safe custody but also changed money for the travelers or merchants engaged in foreign trades. The discovery of America brought riches to England and gave a tremendous boost to foreign trade. The merchants now began to hold part of their riches in cash. These transactions, however, received a big setback in 1640, when King Charles -I seized 130, 000 pounds and billion left for safe custody with the city merchants at the Royal Mint. This shook the confidence of the merchants in the Royal Exchanger and the Royal Mint. Consequently this business was taken over by the goldsmiths who, up to that time, were dealing only in gold and silver. These goldsmiths issued receipts or notes to their depositors in respect of the cash or articles left with them. These were called Goldsmiths Notes, and carried an undertaking to return the money and articles to the depositors or bearers on demand. Over period of time, these goldsmiths discovered that large sums of money were left in their custody for long periods; therefore, they started the use of this cash to advance loans to other persons for a fixed period of time and at a considerably high rate of interest. Moreover, they further encouraged cash deposits by their customers by offering them a part of the profits earned on the money. Thus began the issue and deposit banking of

modern times. Some of the enterprising goldsmiths issued checkbooks for the attraction of their customers, and thus another important step in the evolution of banking was taken. In 1672, however, English banking faced a great crisis when Charles- II borrowed huge sums of money from the goldsmiths and later refused to pay them back. Therefore, a number of goldsmith- bankers formed themselves into a corporation in 1695, known as the Bank of England. This bank lent 1,200,000 pounds at 8% interest to William- III, who in return, allowed a number of privileges to the bank, specially the right to issue notes payable to bearer on demand up to the amount of this loan. This was known as fiduciary issue, not covered by gold. By the year 1700, the Bank of England was not only issuing notes but was also conducting accounts for customers. Being a joint stock bank by charter, its directors were conducting the business like that of limited companies. In 1854 the joint stock companies Act opened an era of corporation/ and the limited liability Act 1855, restricted the liability of shareholders of a limited company to the amount of the successfully paid- up value of the shares held by them. In the succeeding years, joint stock banks became very common either by absorption of private banks or amalgamation amongst joint stock banks themselves. Thus in 1918 came into being eleven clearing Banks of today. In 1946, the Labor Government nationalized the Bank of England and transferred the existing stock to the nominee of the British treasury, and empowered the crown to appoint its Governors, deputy Governors and Directors. The other shareholders of the bank were given in exchange, three- percent long term Government stock, thus keeping the holders content and happy, as they were getting the same return as before. In 1955 the British banks made a departure from traditional banking by undertaking hirepurchase finance for companies buying industrial plants and machinery, and took interest on hire-purchase finance. The percentage of interest was so high that a number of companies became subsidiaries of the lending banks3.

2.4 Evolution of Banking in Pakistan

On 14th August 1947, the partition of the sub-continent came into reality and a new Muslim country with the name of Pakistan came into being. At that crucial time, the new

country was facing a number of problems including the shortage of financial institutions. .Therefore in accordance with the provision of India independence Act of 1947, an expert committee was appointed to study the issue. The committee recommended that the Reserve Bank of India should continue to function in Pakistan until 30th Sep, 1948, so that the problem of item and demand liabilities, coinage, and currency exchange can be settled. At the time of partition there were 631 offices of schedule banks (having a paid up capital of Rs. 5 Lac or more) and West Pakistan contained 487 and East Pakistan had 144 such offices. As a result of transfer of Head Offices of Schedules Bank to India by nonMuslims in July 1948, the number of offices was reduce to 81 in West Pakistan and 114 in East Pakistan causing an overall reduction from 631 to 195. The Reserve Bank of India showed reluctance in solving the banking crises. It rather created further difficulties by refusing to give Rs. 55 corers, which Pakistan was entitled to share the in cash balance of undivided India. Therefore, the government of Pakistan decided to establish its own currency authority earlier than it was mutually agreed upon. The Reserve Bank of India was relieved of its function in Pakistan from the first day of July 1948 At the time of independence, the areas, now constituting Pakistan were very rich in producing various crops and other agriculture Products. There were very nominal industries and those industries too were in very bad shape but as far as the commercial banking facilities are concerned, they were fairly well, because there were 487 offices of scheduled banks for providing banking facilities to this area. For a new country like Pakistan, facing so many problems and having limited resources, it was very difficult to run its own banking system immediately. Therefore in accordance with the provision of Indian Independence Act of 1947, an expert committee was appointed to study the issue. The committee recommended that the Reserve Bank of India should continue to function in Pakistan until 30th September 1948, so that the problem of time and demand liability, homage, currencies, exchange etc. is settled between India and Pakistan. It was also decided that Pakistan would take over the management of public debt and exchange control from Reserve Bank of India on Ist April 1948, and that Indian notes would

10

continue to be legal tender in Pakistan till 30th September 1948. The Hindus residing in the territories now comprising Pakistan started transferring their assets to India after the partition of sub- continent and the banks also followed the same move in order to push the new state into chaos. By 30th June 1948, the number of offices of scheduled banks in Pakistan declined from 487 to only 195. At this time there were 19 foreign banks with the status of small branch offices and only two Pakistani institutions i.e. Habib Bank, and the Australia Bank. To rebuild the confidence of the people in these banks, the then Government promulgated the banking companys ordinance, 19474. Pakistan was further pushed into trouble when the imperial bank of India closed down most of its offices in Pakistan and rejected to accept the token amount of Government of Pakistan securities. Such circumstances necessitated the control and management of banking and currencies in Pakistan. Government of Pakistan inaugurated the State Bank of Pakistan on July 1, 1948, after the State Bank of Pakistan order was promulgated on May 12, 1948. In order to bring the situation under control As the central bank of the country. The state Bank of Pakistan addressed itself with the equally urgent task of creating and developing the Baking system of the country. To achieve this goal, it provided every help and encouragement to Habib Bank to expand its network of branches and also recommended to Government, the establishment of a new bank which could serve as an agent of the State Bank of Pakistan in areas where State Bank branches are not present. As a result, the National Bank of Pakistan came into being in 1940 and by 1952 it became strong enough to take over the agency functions from the Imperial Bank of India. In order to develop sound banking and weed out weak institutions, the Banking companies (control) Act was promulgated in 1949, empowering the State Bank to control the operations of banking companies in Pakistan. Further The State Bank of Pakistan limited the opening of new branches by foreign banks in coastal towns or in big cities from where trade was being carried out with foreign countries, while Pakistani banks were encouraged to open as many branches as possible within the country5. In order to broaden the scope of banking system in Pakistan, The State Bank of Pakistan also helped in the establishment of specialized credit institutions in the fields of agriculture and industry. At the end of June 11

1958, the number of branches of Pakistani banks increased from 195 to 307 and, the number of scheduled banks increased to 36 by June 1965. Up till 1973, 14 Pakistani commercial banks have been operating and functioning all over the country. These were Joint Stock Banking companies functioning under banking companies Act. In 1974, most of the commercial banks were merged and reorganized into five Banks. i.e. Habib Bank Ltd, United Bank Ltd, Muslim Commercial Bank Ltd, National Bank of Pakistan and Allied Bank of Pakistan.

Commercial banks constitute the most important source of institutional credit in the economy of Pakistan. It has been the largest deposit institution and the main source of short-term credit and financial activities in Pakistan. In case of classification of bank by size, the commercial activities of banks have been divided into two categories as:

1Scheduled Bank 2Non-Scheduled Banks. All scheduled banks are the members of the Clearing House arranged and supervised by the State Bank of Pakistan. The statutory cash reserve requirements of scheduled bank are now maintained at 5% of their total demand and twice liability in Pakistan.

The commercial banks are required to submit weekly and monthly returns about their financial position to State Bank of Pakistan. The SBP in their credit and investment policies also guides the commercial banks. The commercial banks can maintain their liquidity of cash by rediscounting their bills of exchange from the State Bank of Pakistan. The non-scheduled banks are not entitled to receive accommodation from the State Bank of Pakistan. As the commercial banking system in Pakistan was based on three kinds of Banks as: i.Pakistani Commercial Banks.

12

ii.Foreign Banks. iii.Indian Banks Now the base has been diverted to the three new bases as: i.Private Banking ii.Government Owned Banks. iii.Foreign Banking.

By now the commercial banks are operating with the concept of providing short-term finance to trade, commerce and industry, to enable these sectors to expand their productive activities The following figures reflect the rapid development of banking system in Pakistan from 1948 to 1993. Bank Deposit Bank Credit Offices of scheduled banks During the five years from 1960 to 1965, the number of scheduled bank branches rose form 430 at the end of June 1960, to 1591in June 1965. Two new banks were formed i.e. Commerce Bank and Standard Bank. A dramatic change in Pakistani banking system took place when in 1974 the Government of Pakistan nationalized all commercial banks incorporated in Pakistan. There were 22 scheduled banks with 3525 branches at the end of December 1973. The nationalization of banks in Pakistan has brought a new era of development and growth. It has taken a completely new turn with the induction of interest free Banking system in January 1981.With the passage of time, the Government of Pakistan realized that the national economy was being dominated by public sector, areas such as production; trade and finance were over regulated. This resulted not only in chronic 1948 880m 200m 81 1993 290,000m 21,000m 7,100 % increase 32854 10500 8665

13

budget deficit, leaving not much for physical and social infrastructure but also led to developing such conditions which could not be changed without the privatization of the nationalized and public sector. Therefore in order to meet the need of the time, the Government of Pakistan introduced comprehensive economic reforms aimed at deregulation of trade, commerce, industry, banking and finance, so that the role of the public sector in industrial and commercial activities is reduced and social sector activities are increased. In order to deregulate the financial sector under these reforms, a program of privatization of public sector banking and financial institution was started and various governing laws were amended in 1990 in which strict criteria for selection of good entrepreneurs as investors was also drawn. Besides these undertakings, private sector was not only invited but also encouraged to set up commercial banks and financial institutions in Pakistan. As a result, a number of banks Modaraba and Leasing companies came into existence and are now actively operating in private sector. It is hoped that this polish of liberalization and privatization of financial institutions will make way for the economic development and professional efficiency in Pakistan. All scheduled banks are the members of the Clearing House arranged and supervised by the State Bank of Pakistan. The statutory cash reserve requirements of scheduled bank are now maintained at 5% of their total demand and twice liability in Pakistan. The commercial banks are required to submit weekly and monthly returns about their financial position to State Bank of Pakistan. The SBP in their credit and investment policies also guides the commercial banks. The commercial banks can maintain their liquidity of cash by rediscounting their bills of exchange from the State Bank of Pakistan. The non-scheduled banks are not entitled to receive accommodation from the State Bank of Pakistan. As the commercial banking system in Pakistan was based on three kinds of Banks as: ii.Pakistani Commercial Banks. iv.Foreign Banks. v.Indian Banks

14

Now the base has been diverted to the three new bases as: ii.Private Banking iv.Government Owned Banks. v.Foreign Banking.

By now the commercial banks are operating with the concept of providing short-term finance to trade, commerce and industry, to enable these sectors to expand their productive activities

2.5

FUNCTIONS OF A BANK

Bank is the essential constituent of the business. It ensures the prompt and smooth running of trade network. The better network of banks dots the landscape of modern economy for the country. Apart from safeguarding peoples money, it gives push to all sectors of economy. The importance of commercial banks can be illustrated by a brief explanation of their major functions.

2.5.1 Accepting deposits 2. 5.2 Advancing loans 2.5.3 Overdraft 2.5.4 Discounting Bills of exchange 2.5.5 Safe keeping 2.5.6 Facilities for Financing of Foreign Trade 2.5.7 Utilization of Resources 2.5.8 Capital Formation

2. 5.1. Accepting deposits

The most important function of commercial banks is to accept deposits from the public. Various sections of society, according to their needs and economic condition, deposit

15

their savings with the banks. For example, fixed and low income group people deposit their savings in small amounts from the points of view of security, income and saving promotion. On the other hand, traders and businessmen deposit their savings in the banks for the convenience of payment. Therefore, keeping the needs and interests of various sections of society, banks formulate various deposit schemes. Generally, there ire three types of deposits which are as follows: (i) Current Deposits: The depositors of such deposits can withdraw and deposit money whenever they desire. Since banks have to keep the deposited amount of such accounts in cash always, they carry either no interest or very low rate of interest. These deposits are called as Demand Deposits because these can be demanded or withdrawn by the depositors at any time they want. Such deposit accounts are highly useful for traders and big business firms because they have to make payments and accept payments many times in a day. (ii) Fixed Deposits: These are the deposits which are deposited for a definite period of time. This period is generally not less than one year and, therefore, these are called as long term deposits. These deposits cannot be withdrawn before the expiry of the stipulated time and, therefore, these are also called as time deposits. These deposits generally carry a higher rate of interest because banks can use these deposits for a definite time without having the fear of being withdrawn. (iii) Saving Deposits: In such deposits, money upto a certain limit can be deposited and withdrawn once or twice in a week. On such deposits, the rate of interest is very less. As is evident from the name of such deposits their main objective is to mobilise small savings in the form of deposits. These deposits are generally done by salaried people and the people who have fixed and less income.
Commercial banks perform a very important service to all sectors of economy by providing facilities for pooling of savings and making them available for economically and socially desirable purposes. The saver is rewarded by the payment of interest on his saving which are safe and in a highly liquid form. These pooled funds are made available to businessmen who may use them for the expansion of their productive capacity and consumers for such items as housing and consumer goods.

2. 5.2 Advancing loans

The second important function of commercial banks is to advance loans to its customers. Banks charge interest from the borrowers and this is the main source of their income. 16

Banks advance loans not only on the basis of the deposits of the public rather they also advance loans on the basis of depositing the money in the accounts of borrowers. In other words, they create loans out of deposits and deposits out of loans. This is called as credit creation by commercial banks. Modern banks give mostly secured loans for productive purposes. In other words, at the time of advancing loans, they demand proper security or collateral. Generally, the value of security or collateral is equal to the amount of loan. This is done mainly with a view to recover the loan money by selling the security in the event of non-refund of the loan. At limes, banks give loan on the basis of personal security also. Therefore, such loans are called as unsecured loan. Banks generally give following types of loans and advances: (i) Cash Credit: In this type of credit scheme, banks advance loans to its customers on the basis of bonds, inventories and other approved securities. Under this scheme, banks enter into an agreement with its customers to which money can be withdrawn many times during a year. Under this set up banks open accounts of their customers and deposit the loan money. With this type of loan, credit is created. (iii) Demand loans: These are such loans that can be recalled on demand by the banks. The entire loan amount is paid in lump sum by crediting it to the lan account of the borrower, and thus entire loan becomes chargeable to interest with immediate effect. (iv) Short-term loan: These loans may be given as personal loans, loans to finance working capital or as priority sector advances. These are made against some security and entire loan amount is transferred to the loan account of the borrower. From the beginning, organizers of banks have been motivated by the opportunities presented by lending function and charters have been granted by the governments primarily because there was a need for credit in a particular community. In making credit available, commercial banks are rendering a great social service through their actions, production is increased, capital investments are expanded and higher standard of living is realized. Bank lending is very important to the economy for it makes possible the financing of the agricultural, commercial and industrial activities of the nation. It makes possible indirect roundabout production as compared to the direct production where consumable goods are

17

secured by direct application of labor to the land or natural wealth. Bank loans enable the farmers to purchase seeds, fertilizers and many other items necessary for agriculture and enable the manufacturer to purchase raw material and machinery, facilitates the employment of labor and production of goods demanded by the industry, government and consumers. It also enables government to run activities smoothly by getting temporary funds by purchasing bonds.

2. 5.3 Over-Draft: Banks advance loans to its customers up to a certain amount through over-drafts, if there are no deposits in the current account. For this banks demand a security from the customers and charge very high rate of interest. 2. 5.4 Discounting of Bills of Exchange: This is the most prevalent and important method of advancing loans to the traders for short-term purposes. Under this system, banks advance loans to the traders and business firms by discounting their bills. In this way, businessmen get loans on the basis of their bills of exchange before the time of their maturity. 2. 5.5 Safe Keeping The safe keeping of valuables is one of the oldest services provided by commercial banks. They have vaults that are difficult to enter even by the best of burglars and have established record of proper custody.
The importance of better network of baking is clear form the above.

2. 5.6. Facilities for Financing of Foreign Trade Although foreign trade is basically the same as domestic trade, some differences necessitate international banking services provided by commercial banks. These differences arise because of the existence of national monetary system, unfamiliarity with the financial ability of the buyers and sellers in foreign countries. For example a person

18

who orders sports car from Germany and shoes from Italy may discover that foreign sellers are not willing to take the currency of the importers country. Therefore arrangements must be made in foreign currencies e.g. in Marks and Lira, to do this, the purchasers can go to commercial banks and quickly and efficiently make the arrangement for foreign exchange needs. The purchaser may encounter a situation where the foreign seller is not willing to place the goods on ship and wait for payment to arrive in the next mail. The transaction might be handled more satisfactorily through the issuance of commercial letter of credit (LC). This protects both the purchaser and seller. 2. 5.7. Utilization of Resources In the new era, it is difficult to imagine that in the absence of banks people can make possible their savings and then their investments in different businesses. It is through the agency of banks that people can make savings and then these savings automatically flow into the channels, which are productive, both for saver and investor. The banks deposit the peoples money, which ensures the economic development by mobilizing the financial resources of the community and making them possible to flow in desired channels. 2. 5.8. Capital Formation Capital formation is one of the major factors in economic development. It is the increase in the stock of both material and humane capital. Capital formation results when some proportion of societys present income is saved and invested in order to increase materials as well as humane capital. The importance of capital formation can be seen from the following; aIt helps in breaking through the vicious circle of poverty. bCapital formation increases the stock of material and humane capital. cIt increases the investment in various sectors of economy. dLeads to expansion of both national and international markets. eIt helps in building import substitution industry. Commercial banks play an important role in creating domestic resources like; 19

1. 2. 3. 4.

Voluntary savings. Involuntary savings Government borrowings Use of idle resources for capital formation

2. 5.9.Investment of Funds: The banks invest their surplus funds in three types of securitiesGovernment securities, other approved securities and other securities. Government securities include both, central and state governments, such as treasury bills, national savings certificate etc. Other securities include securities of state associated bodies like electricity boards, housing boards, debentures of Land Development Banks units of UTI, shares of Regional Rural banks etc

2.6 Banking in the worlds economy

The world economy has witnessed in recent years a phenomenal growth in financial transactions surpassing that of transactions on goods and services. It has been estimated that transaction operations on financial assets are ten to fifteen times those on goods and services. Financial flows are likely to continue to grow at a faster pace than out put. The banking system happens to be at the center of this increase in financial transaction. It has a leading role not only in financing of product trade but also relatively in new areas like such as financing of project companies and states. The solidity of the world banking system depends on the solidity and stability of national economies. Economic growth will naturally have a positive influence on the performance of banking system. Conversely, recession and inflation would affect this performance negatively. In the 1980s cross-country financial flows became a considerable mainstay of the world economy. This situation owes much to four major developments; 1. changes in the regulatory environment. These changes have permitted domestic markets to compete with international markets. 2. technological change especially the advances in computer and telecommunication

20

technologies. This has made possible new methods of mobilizing and placing financial resources. It has speeded up the implementation of transactions, reduced costs and has contributed to the expansion of international financial market. 3. financial innovation. This has been motivated by the drive to avoid regulatory constraints. Further more, changing technical and economical environment have favored the launching of innovative methods in response to changing needs of customers as well as rising concern of financial institutions regarding the protection of their profitability and aversion of risk. 4. growth diversity in financial system and greater flexibility or responsiveness to changing needs and environments.

2.7 Role of commercial banks in the economic development of Pakistan

Commercial banks play an important role in the economic development of a country. They are in the business of providing banking services to individuals, small businesses and large organizations. While the banking sector has been consolidating, it is worth noting that far more people are employed in the commercial banking sector than any other part of the financial services industry. Jobs in banking can be exciting and offer excellent opportunities to learn about business interact with people and build up a clientele. Todays commercial banks are more diverse than ever. We can find a tremendous range of opportunities in commercial banking, starting at the branch level where you might start out as a teller to a wide variety of other services such as leasing, credit card banking, international finance and trade credit. The banking sector in Pakistan has been going through a comprehensive but complex and painful process of restructuring since 1997. It is aimed at making these institutions financially sound and forging their links firmly with the real sector for promotion of savings, investment and growth. Although a complete turnaround in

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banking sector performance is not expected till the completion of reforms, signs of improvement are visible. The almost simultaneous nature of various factors makes it difficult to disentangle signs of improvement and deterioration If the banking system is unorganized and inefficient, it creates maladjustments and impediments in the process of development. In Pakistan, the banking system is very well organized. The State Bank of Pakistan established on July 1, 1948 stands at the apex and is responsible for the operation of the banking system in Pakistan. The other banks, which form the banking structure in Pakistan, are playing an active role in the economic development of the country.

The role of commercial banks in the growth and development of sound and healthy economy of the country is briefly discussed as under;

2.7.1 Mobilizing Savings The commercial banks like National Bank of Pakistan, Habib Bank, Allied Bank, United Bank and Muslim Commercial Banks have opened up branches in urban and rural areas to mobilize savings of people.

2. 7.2 Financing Development Projects The banks and other development finance institutions like IDBP, ADBP, NIB etc advance short and medium term loans for financing of the development projects both in the private and public sector and thus help in accelerating the rate of economic development in the country. 2.7.3 Facilitating Trade Activities The credit institutions collect the savings of the people and make them available for 22

facilitating trade activities, both inside and outside the country.

2.7.4 Creating Climate for Capital Formation A developed banking System is stimulant to growth and creates favorable climate for capital formation in the country.

2.7.5 Helping SBP in Achieving Monetary Policies The Commercial Banks under the supervision and guidance of the State Bank of Pakistan help in implementing and achieving the objectives of the monetary policy, which vary from time to time.

2.7.6 Assisting in Development The commercial banks are profit-seeking enterprises. In order to maximize the profits, they have to maximize the loans. An organized banking system keeps a balance between liquidity and profitability and thus assists in the planned development of the economy.

2.7.7 Provision of Agency Services The commercial banks provide agency services to the clients. They collect dividends and pay interest and premium on behalf of the clients. They keep their customers valuables in safe custody. They help in the mobility of capital and thus stimulate capital formation in the country.

2.7.8 Making Capital Available for Investment The organized banking system helps in directing physical resources into productive channels. It also keeps a balance between the availability and requirements of the capital in the country.

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2.7.9 Less Reliance on Foreign Capital A planned banking system by launching a vigorous campaign of mobilizing idle savings in the country can meet the capital development requirements from within the country. The country will thus have to rely less on foreign capital in financing the development projects. 2.7.10 Profit Sharing Scheme The commercial banks receive surplus balances of households in business and pay interest on the deposits of the clients. The banks have now introduced interest free banking in Pakistan. The depositors, instead of having a fixed rate on the deposits, will share the profit and loss of the banks. The profit and loss sharing (PLS) arrangement, which is an alternative to interest under Islamic Economic System, is now operating in Pakistan. 2.7.11 Provision of Qarz-e- Hasna Qarz-e-Hasna Scheme has been prepared and launched by Pakistan Banking Council through nationalized commercial banks. Under the Qarz-e-Hasna Scheme, financial assistance is provided to the outstanding students, who are unable to pursue their studies due to financial difficulties. Loans are provided for pursuing studies both in and outside Pakistan. 2.7.12 Export Promotion Cell In order to boost the exports, the banks have established Export Promotion Cell for the information and guidance of the exporters.

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CHAPTER 3 HISTORY OF ASKARI COMMERCIAL BANK

The story begins with the incorporation of Askari Commercial Bank limited in Pakistan on October 09, 1991, Askari Bank Commenced (begin) to operations in April 1992, as a public limited company and Askari Bank has expanded into a network of 226 branches, including 31 dedicated Islamic banking branches, and a wholesale bank branch in Bahrain. A shared network of 4,173 online ATMs covering all major cities in Pakistan supports the delivery channels for customer service. The bank is listed on Karachi, Lahore and Islamabad stock exchanges. It is the only bank in the world run by an army; serving Adjutant General of Pakistan Army being head of the Board of Governors In early 1990s, there was a growing trend among government circle to involve private sector in the uplift of socio-economic condition of masses. Many ordinances were passed to facilitate the deregulation. This policy of openness and deregulation presented bright prospect for the private sector to grow and expand their businesses in the country. Many national and international co-operations started investing in various sectors of economy especially in the banking sector. Banking sector holds vast premises in Pakistan and realizing this fact Army Welfare Trust (AWT) decided to establish a commercial bank with its branches spread through out the country. The bank was named Askari Commercial Bank Limited (ACBL), and was incorporated on 9th October 1991. Its a public limited company and is listed on Karachi Stock Exchange, Lahore Stock Exchange and Islamabad Stock Exchange. The bank obtained Business Commencement Certificate on Feb 26, 1992. A bank is principally engaged in business of banking, as defined in Banking Company Ordinance 1962 having its registered office to AWT plaza The Mall Rawalpindi. ACBL started operation from April 1, 1992 as a Scheduled Bank. The main theme of ACBL is to do something for the welfare of Army, general public and give financial support to families of martyrs. The bank is under the control of AWT, is also running business of Leasing, Insurance, Real Estate, Pharmaceuticals, and Cement Factory etc.

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The target market of ACBL has always been the medium sized costumers especially engaged in foreign trade i.e. import and export. Initially the numbers of branches were less but later on number of branches increased and now it has quite stable network of 98 branches, and an Off-Shore Banking Unit in Bahrain. A shared network of over 1,300 online ATMs covering all major cities in Pakistan has eased the arrangement of money for ACBL customers 24 hours a day and 7 days a week. Recently decided to open the Islamic Banking Branches in major cities of the country. Islamic banking is going to expand ACBL outreach and capabilities for offering products conforming to the Shariah principles, all these branches are interconnected as well. As at December 31, 2010, the bank had equity of Rs. 8.6 Billion and total assets of Rs. 145.1 Billion, with over 600,000 banking customers, serviced by ACBL 2,754 employees. Initially bank invested mainly in non-corporate sector of retail market but often achievement of large sum of deposit base, the bank later on stressed on manufacturing and project financing. The bank attained the peaks of excellence in the beginning few years. The bank remained engaged in financial international trade and manipulating imports and exports and established correspondent relations with many international banks. With its sophisticated Information Technology (IT) and professionally well-qualified top management, the bank has become a story of continuous success. ACBL has shown an immense promise to grow further and due to strong support of AWT, investors have shown confidence in ACBL. Management of ACBL has never looked back since its inception. Instead, it has been growing in at an increasing rate. Profitability is not only area where ACBL has shown improvement, in-fact all the possible spheres are covered during an almost one and half decade of its operations. The top management strongly realizes the importance of its internal customers i.e. its employees. Programs are designed at regular intervals to train and develop employee skills to make them highly productive in the ever-increasing competitive business environment. The time, material and financial resources are spent to improve the quality of ACBL Employees. Askari Commercial Bank Limited started Non-Stop Banking on 1st Jan 2007 to serve its customers better than ever it done. Askari Non-

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Stop banking facility enables ACBL to serve its customers 9:00 AM to 5:00 PM without taking a break. 3.1 Present Operations of ACBL

The ACBL performs different operations. These operations include corporate banking, retail banking, investment banking etc. These operations are discussed in detail in the following sections. 3.2. Askari Cooperate Banking

In 1999, the bank went into Cooperate Banking Division, which is expanding the banks credit portfolio by looking quality assets. It also generated sustained non-funded business, which made a useful contribution towards the fee-based income of the bank. Recently the bank has syndicated as the Lead Bank for providing loan facility of Rs.4 Billion to National Database & Registration Authority (NADRA), for the creation of a national data base warehouse. 3.3 Askari in Retail Banking

ACBL launched its Retail Banking Group (RBG) to concentrate on consumer banking, small business and new products to meet individual needs. The group is focusing on relatively low cost deposits and new high yielding personal finance products. For this recently introducing AskCar for car financing and Askari Commercial Bank Limited successfully launched Pakistans first e-commerce venture in the form of a product called ASK-IBL Online. 3.4 Askaris Creditability

The Pakistan Credit Rating Agency (Pvt.) Ltd. an affiliate of FITCH, IBCA, LTD, UK, for maintaining the short-term retainer at Al + has awarded ACBL. The rating upgrade recognizes the demonstrated capacity of ACBLs management to mange risk as well as its strong ability to mobilize resources, as along for having a strong capacity for the timely payment of financial commitments. 3.5 Recent Reorganization at ACBL

ACBL has streamlined its operations by dividing the existing functions of Head Office

27

into main group as: Corporate Banking and Financial Institutions Operations and credit Retail Banking. The former deals with the relationships of the bank with major multinationals, corporate customers, correspondent banks and other financial institutions and constitutes of three division namely cooperate and merchant, international and treasury, while the Operations and Credit deals with divisions system and operations, ETD and Credit while the last one deals in investment, asset product unit and Credit Card Division. 3.6 Customer Services

ACBL has maintained its efficient and personalized services to its customer. Its management has enhancing ability to offer premise financial products to its clients. The bank has linked to a real time Online Communication Network through VSAT in major cities. ATM services as ASKCASH have also been provided to its customers, as the installers are located at major cities. The credit card facilities are already being provided including the Visa Card, Master Card, and Dinner Club Card. For customers facility ACBL has gone into electronic banking. For this ASKLINK as for Telephone Banking ASKNET, providing on line branch facility. Also providing the SWIFT facility to expedite international financial transaction to benefit its customers.

3.7

Askaris Management Concept

ACBL has adopted new policies in the field of human resource. It aims to bring new and modern concept of management with the background of achieving staff satisfaction and bringing in aspects of motivation. The new concept has replaced the old confidential report system and brought in the exercise of appraisal inviting the staff at the same time setting the bank on dynamic footings. ACBL is preparing the staff for future changes as by providing in-house training. Thus sharpening their ideas and 28

minds to cover the gap in the competition. Seminars are conducted in order to generate new ideas and modern concepts. 3.8 ATM

ACBL issue ATM cards to its customers. Askari bank, being a leading bank of Pakistan has been quick to introduce ATM (Automated Teller Machine) services to it customers electronic cash dispensary facilities are now available at major centers like Karachi, Lahore, Peshawar, and Rawalpindi etc. All these ATMs are linked through a state of the art satellite base communications system offering real time 24-hour service. 3.8.1 The ATM Factor:

Cash Withdrawal Utility Bills Payment ATM Call center I-Net banking Funds Transfer (to any other ASKCARD) Balance Enquiry Mini Statement ATM PIN Change If customers suspect their card or PIN has been compromised or is being fraudulently used, inform immediately any ACBL Branch 'or' call ASKPOWER Center at (051) 111-000-788.

3.8.2 The Necessary Precautions:

Hold on to and guard closely all receipts from ASKPOWER card transactions. In order to protect ASKPOWER against misuse, memorize PIN, do not write it down or keep it with card. Also , do not choose a PIN that is easily figured out such as phone number or birth date. Never exchange PIN with anyone ever. Always know how much money available in card.

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3.8.3 Help & Rescue: In case customers card is lost or stolen, immediately report to any ACBL Branch 'or' ASKPOWER Center at (051) 111-000-788 for prompt action and assistance. 3.8.4 How to feel privileged? Submit an application form at any ACBL Branch and get your ASKPOWER Card. 3.9 Electronic Bill Payment Services Electronic Bill Payment Services lets customers to pay their utility bills through ACBL ATM network. They can forget about the inconvenience of readjusting their normal daily routine to the traditional banking hours, or standing in long queues, since Touch and Pay gives customers the option to pay multiple telephone bills, from different accounts, in different ways - as per their own choice and convenience. At present, ACBL joined hands with PTCL and this arrangement facilitates Utility Bills subscribers to pay their monthly Utility bills from Askari Bank's ATMs, Point of Sale Terminals (POS), and the Internet and also at the Bank's branches through direct debit to their personal accounts. In future such transactions can be made through Kiosks and Smart cards. ACBL currently has a total of 150 ATMs in more than 17 cities including ATMs of the Consortium Banks, which will be made available for bill payment 3.10 Askari Travelers Cheques Askari Travelers Cheques bring convenience of not carrying extra amount of cash at different places. ATC is available in the denomination of Rs.10, 000/-, it's light, safe and ideal for all travel purposes. 3.10.1 Free Issuance Customers do not have to pay any service charges for purchasing Askari Travelers Cheques. They can buy it either against cash or debit to their personal account. Simply visit any of branches located all over Pakistan and enjoy the privileges of buying Askari Travelers Cheques.

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3.10 .2 Earn 0.10% encashment Commission This unmatched feature lets customers experience yet another innovative customer care solution. They will receive 0.10% commission whenever the traveler cheque is encashed after 30 days of holding 3.10 .3 Enjoy Added Safety & Security With state-of-.the-art in-built security features customers can be rest assured that this is the best way to make and accept payments. High security lithography, ultra violet printing, special thread, anti scanner pyramid design and unique micro lines, all done and printed in UK gives customers the comfort of dealing in the most safest substitute for cash, easily refundable in case of loss and theft. . 3.10 .4 Enjoy Added Safety & Security With state-of-.the-art in-built security features customers can be rest assured that this is the best way to make and accept payments. High security lithography, ultra violet printing, special thread, anti scanner pyramid design and unique micro lines, all done and printed in UK gives customers the comfort of dealing in the most safest substitute for cash, easily refundable in case of loss and theft. .

3.11

Credit Card

The bank also offer credit card facility to its customers such as Visa International Club Card and Master Card. International Credit Card include a Gold Master Card and a Silver Master Card. Askari Master Card has a worldwide acceptability. It provides service at thousands of locations in Pakistan and over 14 million establishments worldwide. 3.12 World Bank

Askari Commercial Bank Limited is the only private sector bank that has been approved by the World Bank as a participating financial institution for the US$ 200 Million line of credit sanctioned to the Government of Pakistan for the financial sector deepening and intermediation project ACBL has received an A1+ rating for the short 31

term and an AA for the long term, from the Pakistan Credit Rating Agency (Pvt.) Ltd. (PACRA) as affiliate of IBCA Ltd. UK. ACBL is the first private sector Pakistani bank to voluntarily obtain a rating from PACRA. During the survey December 31, 2005 the import business increased to Rs. 98.3 Billion i.e. 31% over last year, while the exports also increased by 31% over last year, to Rs. 92 Billion. This enhanced foreign trade business because it was secured due to excellent customer services and efficient international settlement arrangements with ACBL correspondent banks.

3.13 Askari Banks Personal Finance. One can avail unlimited opportunities through Askari Banks Personal Finance. With unmatched financing features in terms of loan amount, payback period and most affordable monthly installments, Askari Banks Personal Finance makes sure that customers get the most out of their loan. No matter what their need is, Askari Bank has more ways to serve them then ever before. Featuring:

Loan amount from Rs.30,000 to 300,000 Repayment period from 1 to 3 years Fixed monthly repayment Low rates that never change No pre-payment penalties Shortest processing time Funds may be obtained at any ACBL branch And certainly unmatched service quality

When peoples are working towards their financial goals, how they borrow can be just as important as how they invest. The right borrowing options can improve their savings, cash flow and ability to take advantage of personal or business opportunities. So, choose the right options and call us now to enquire about your entitlement amount and exclusive service. Askari bank makes every effort to serve their customers with care. 32

Eligibility to apply if: Customers age is between 21 and 57* Customers have a verifiable minimum gross monthly income of Rs. 15,000. Salaried: Minimum length of confirmed service with present employer is at least six months with a total length of at least one-year service Self-Employed: In business for the last one year Some restrictions apply. Ask from ACBL representative for further details.

Askari Banks Cash Management Services "Askari Cash Management Services" aimed at effectively managing the accounts receivable portfolio of medium and large corporate entities. While this service will help the corporate entities improve their liquidity, due to well-diversified branch network The service primarily aims at providing clearing, collection and cash/transfer facility to corporate, under one resource center, which handle the process through the branches and provide adequate reporting to the corporate clients, on various aspects of their accounts receivable portfolio, every month. The product can be tailor made for National and Multinational companies. The transaction process flows, operational methodologies and service pricing varies from customer to customer, with marginal modifications, depending upon volumes and nature of transactions involved.

3.14

Phone Banking 33

ACBL is one of the first private banks in Pakistan to offer innovative products and services to its customers like 24 hours Telephone Banking. This enables our customers to bank around the clock from the comfort of their homes. Askari Bank arranges Rs.4 Billion syndicated facility for NADRA, ACBL has arranged a syndicated loan facility of Rs.4 Billion to NADRA for the creation of National Data Warehouse. In this connection, on 1st November 2000, a syndicate signing ceremony was held at the NADRA, Islamabad attended among others by Mr. Kalim-ur-Rehman, President and Chief Executive ACBL and Major General Zahid Ihsan, Chairman, NADRA. This is a medium term loan and is repayable over a period of 5 years though quarterly payments. This financing is reportedly the second largest syndication in the history of Pakistan and the first to be arranged and led by ACBL. The facility is parked at ACBLs Blue Area Branch, Islamabad. Standard Chartered Bank is the co-arranger. Other syndicate members are ACBL. Bank Alfalah, Soneri Bank, The Bank of Khyber, Pak Libya Holding Company and Employees Old Age Benefits Institution. Askari Bank successfully launched additional retail products. Retail Banking Group (Asset team), after the successful launch of Askari in September 2000, also initiated few other consumer finance products including Askari Bank personal finance and DHA finance program. Askari bank personal finance is the second mainstream product launched by the retail banking division (Assets). Maintaining their history of institution offering quality products to its customers. Besides these products ACBL also launched different products as Askari Banks mortgage finance (Home loans), Askari Banks business finance (Business loans), Smart Cash (Running finance facility for consumers), I-Net Banking (Internet Banking Solution) etc, ACBL is focusing on generating good business with emphasis on efficient and effective processes, while no major advertising campaigns have been employed for promoting the product, customer response has been quite encouraging. Extensive promotion through print media is planned for the next year.

DHA financing program was yet another tremendous success for the customers and bank financing for applying to the balloting for plots in PHV, Defense Housing

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Authority Lahore was made available to anyone with the participation of 12.5% of the amount required. Capitalizing on the opportunity and timing of the initiative, again, the response from the public was overwhelming. The entire exercise of loan acquisitions, processing, booking and maintenance was in live with its tradition of teamwork with excellent result. Success of such an end-use defined product undertaken on a very short notice is also an attestation of their continued efforts for strong yet flexible processing techniques and the ability of their staff to collectively achieve the impossible.

3.15 Core Values of ACBL

The intrinsic values, which are corner stones of ACBL corporate behavior, are: Commitment Integrity Fairness Team-work and Service

3.16 Objectives of the Bank

The concept of an organization without an objective is meaningless. The main objective of Askari Commercial Bank limited is to maximize profit. This profit is transferred from army welfare trust to general head quarter from where it is distributed among the families of martyrs in proposed ratio. Main objectives of ACBL can be summarized as follows: To survive and earn profits. To provide quality services to customers. Expanding the market shares and grows

3.17 Awards & Achievements Askari Bank is presently operating in 226 branches and internationally its connected with more than 110 countries. The bank has recently linked to real time online communication network through VSAT in Rawalpindi, Karachi, Peshawar, Mirpur (AJK). Lahore, Islamabad, Faisalabad, Sialkot, Gujranwala, Multan, Hyderabad and

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Abbotabad branch in the county. Following are some of the achievements of Askari Commercial Bank Limited that shows its success in banking sector. Over the years ACBL have received several awards for the quality of ACBL banking service to individuals and corporate. These include: Commercial Banking of Year Awards for 1994 & 1996 From the Asia money Magazine Best Domestic Bank of Pakistan Award for 1995 From the Euro money Magazine The Best Bank in Pakistan Awards for 2001 & 2002 From the Global Finance Magazine Best Consumer Internet Bank in Pakistan Awards for 2002 to 2004 From the Global Finance Magazine Best Corporate / Institutional Internet Bank in Pakistan Award for 2004 From the Global Finance Magazine Best Retail Bank in Pakistan Awards for 2003 & 2004 From the Asian Bank Singapore Corporate Excellence Awards for 2002 to 2004 36

From the Management Association of Pakistan (MAP) Bank of First Choice Award for 2004 From the Consumer Association of Pakistan

Best Corporate Report, for the Financial Sector 1st prizes for 2000 to 2004 From the Institute of Chartered Accountants of Pakistan (ICAP) And the Institute of Cost & Management of Accountants of Pakistan (ICMAP) Best Presented Accounts Ranking prizes (2nd or 3rd) for 1997 to 2002 & 2004 From the South Asian Federation of Accountants (SAFA), for The whole South Asian Region The Best Presented Annual Report 1st prizes for 1997 to 2004 From the National Council of Culture & Arts (NCCA) Askari Commercial Bank Ltd has also proved its strength as a leading banking sector entity, by achieving the following firsts in Pakistani banking First Bank to offer on-line real time banking on a country wide basis First Bank with a nation wide ATM network First Bank to offer internet banking services First Bank to offer e-commerce solutions First Bank to introduce mobile ATM

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CHAPTER IV

DEPARTMENTATION
There are various divisions at the head office of ACBL, each division is called a specialized unit and performs different functions as to achieve the overall goals and objectives of the ACBL. President of Askari Commercial Bank limited handles all divisions. Following are the divisions at head office of ACBLThe Askari Commercial Bank Limited Univeristy Road Branch is situated in the main commercial area of umiversity road. It is located on main university Road. The premise is well-equipped and well-furnished and designed to offer maximum facilities to the customers under one roof. There is a specious car parking facility. The staff is well qualified, courteous and well dressed. The suitable location facilities and amiable staff make the customers visit convenient and pleasant. A board of directors, comprising of 12 directors, heads the bank and are responsible for the affairs of the company including operations, management and control of companys business taking important decision and formulating board policies and objectives of the company. An executive committee and the president who is also the Chief Executive Officer of the bank follow in the hierarchy after the board of directors. The president is then responsible for the operating as well as management look after of the bank.

The Departmentation lower in the hierarchy has been done on the basis of the functions performed by different divisions. The divisions at the head office level are engaged in formulating policies and strategies, which extend to the whole of the bank. These divisions are specialized units working in their area of specialization, thereby concentrating on that particular aspect of the Bank and ultimately resulting in a wellcoordinated environment on the whole.

4.1

Departmentation at Head Office of ACBL

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There are various divisions at the head office of ACBL, each division is called a specialized unit and performs different functions as to achieve the overall goals and objectives of the ACBL. Following are the divisions at head office of ACBL:

4.1.1

Credit Division

The Credit Division (CRD) primarily concentrates on the evaluation and appraisal of the credit proposals through a team of highly experienced professional bankers at all levels. The evaluations system comprises of well-defined multi-tier credit appraisal procedures with extensive guidelines covering the qualitative and quantitative aspects of credit evaluation. The emphasis has always been on the diversification of the banks risk assets to avert large-scale industry and single party exposure. Most of the advances are shortterm trade related on a secure and self-liquidating basis.

4.1.2

Electronic Technology Division

The Electronic Technology Division (ETD) has been the most visionary of all the banks operating units. It has established ACBL as the leading provider of electronic services and solutions to its customers and continues to lead in innovations and introduction of new technology based products.

4.1.3

System and Operation Division

The System and Operation Division (SOD) has been instrumental in the development of procedures and manuals for various operating requirements of the bank. After careful mapping of existing process flows, SOD recommends automation and re-engineering requirements to improve transaction efficiencies. It is also responsible for the procurement of equipment of branches and coordinates the development of new branch premises.

4.1.4

Asset Products Division

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The Asset Products Division (APD) is engaged in the development and management of retail credit schemes. The consumer market in Pakistan has not only grown exponentially over the last decade or so, but the needs of this segment have become extremely diverse. is presently offering several innovative consumer credit products. ADP during 2003 started five more retail asset units, taking the total number to ten, countrywide. The consumer market in Pakistan has not only grown exponentially over the last decade or so, but the needs of this segment have become extremely diverse. APD currently offers six products. 1Personal finance 2Business finance 3Mortgage finance 4Revolving Credit Line Car Financing and Consumer Durables Financing

4.1.5

Investments Products Division

Responsible for developing and managing brands, which serve the investment needs of the consumer market, this unit focuses on deposit mobilization, provision of the value added services based on the modern technology and undertaking the centralized marketing and advertising of the bank. The unit is also actively involved in the acquisition business and has signed upto over 300 merchants nation wide which offer shopping discounts to the banks privilege card members. Like ACBLs value plus is a unique deposit account. The Investment Products division is responsible for developing and managing brands which serve the investment needs of the consumer market, this unit focuses on deposit mobilization, provision of the value added services based on the modern technology and undertaking the centralized marketing and advertising of the bank. The IPD continuously makes an effort to provide value-added services and products to the clients. New products introduced during 2003 include. ASKPOWER (Prepaid Card) which enables the making of secure payments without the 40

need to carry cash or a debit or credit card. Askari Banks Electronic Bill Payment System, which allows the customers of Pakistan Telecommunication Company Limited (PTCL) to pay their monthly telephone bills from Askari banks ATMs. Arrangements are underway to facilitate electronic payment of electricity and gas utility bills as well. Askari Banks Investment Certificates are profit bearing, negotiable and transferable instruments, available in three convenient denominations, with a maturity of up to three months.

4.1.6 International Division The International Division is mainly responsible for managing correspondent banking relationships and planning overseas operations, the division plays vital role in extending foreign trade transactions support to the branches. The International division plays vital role in extending foreign trade transactions support to the branches. The International Division (IND) Mainly responsible for managing correspondent banking relationships and planning overseas operations. The bank became a member of SWIFT in the year 2000; with network of 167 correspondents spread over 15 countries worldwide.

4.1.7

Treasury Division

Responsible for managing banks liquidity and foregone exchange transactions, ACBL treasury is one of the most active in the market. Through report transaction, purchase of government paper and foreign adds substantially to the banks sustained earnings. It also reports to the State Bank of Pakistan on regular basis.

4.1.8

Corporate and Merchant Banking Division

This division become an independent unit in April 1999 and since then is working towards providing a complete range of services for its corporate clients. This division has established a separate corporate Banking unit in Karachi to market and service Karachi based customers more effectively. It provides numerous facilities to ACBL clients

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including project financing, syndications, guarantees, working capital finance, underwriting, as well as advisory services.

Principal activities include syndicated loans, guarantees and working capital finance and underwriting and advisory service. The division has played important role in providing development finance for the modernization and expansion of the countrys core industries like fuel & energy, chemicals, textile and fertilizers etc.

4.1.9

Credit Card Division

The Credit Card Division manages the Askari Master Card brand and is headquartered at Karachi. With a new fully automated transaction processing system, the product was relaunched in year 2001 and supported by an aggressive marketing campaign. The portfolio got success to manage more than 30,000 cardholders in the initial two years and is growing at very fast rate. The card is accepted worldwide and at over 4,000 locations in Pakistan.

4.1.10

Planning and Corporate Affairs Division

The Planning and Corporate Affairs Division (PCD) was operationalized in September 2002. It was established to provide strategic direction to the bank having a futuristic outlook. It envisages undertakings that would build towards a solid, stable but rapid growth and would result in sustained profitability.

4.1.11

Human Resource Division

Strategically, perhaps the most important division at the head office is responsible of human resource management including recruitment, staff training and evaluation. The division also handles matters relating to administration. This division operates on a future oriented strategy focusing on employees personal and professional growth.

This division deals with the policies related to the employees of the bank. It formulates

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policies dealing with procurement, appraisal, benefit, compensation training and retirement of its employees. This division keeps on upgrading itself in order to practice modern management concept in the bank. 4.1.12 Internal Audit Division

The Internal Audit Division reports directly to the board through the executive committee. This is also the audit committee. The audit division acts completely independent of the management and is responsible for checking and reporting on the managements complacence with the boards policies and directives as also the prudential regulations and other directives of the State Bank of Pakistan.

4.4.13

Finance Division

The Finance Division is responsible for book-keeping and account. This division of the head office prepares all financial returns and the MIS through its management reporting wing, the division is actively involved in preparing market consolidation of banks budgets, its monitoring and constant review of various financial indicators.

4.2

Departments at Branch Level

There are various departments at the branch level of ACBL. Each department performs one or more special functions as it requires achieving and meeting the specified goals set by the top management of ACBL. Followings are the departments at branch level of Askari Commercial Bank Ltd. 4.2.1 Remittance Department

The Remittance Department deals with money transfer. The instruments accepted by the remittance department of the bank are: 1Pay Order 2Demand Draft 3Telegraphic Transfer 43

4Online Transfer 5Pay Slip 6Security Deposit Receipt All these instruments are discussed in detail below: Pay Order: It is a negotiable instrument and payable on demand. It is an order from It is also a negotiable instrument and is payable on demand. It is an

the customer to make payment in favor of the receiver within a city. Demand Draft: order by one bank branch to the other branch in another. The Demand Draft is purchased by the customer and sent to a required receiver or creditor. There however, can also be FDD i.e. Foreign Demand Draft. Telegraphic Transfer: and Outward TT. Online Transfer: It is one of the latest instruments used for the transfer of funds. Telegraphic Transfer of funds for outstation purposes. It is

like a demand draft but it is more quick then DD. There are two modes of TT; Inward TT

Now-a-days most of the cash is remitted through online system because is the fastest and safest way of money transfer. Pay Slip: Pay slip is another money transfer instrument. Security Deposit Receipt: transfer instrument. Types of Accounts. Keeping in view the purpose and duration for which deposits are to be kept with the deposits section in the bank, the deposits can be classified in following types. 1Demand deposits 2Time or Fixed Deposits. 3Saving deposits 4ASDA 5Notice deposit Demand Deposits 44 The Security Deposit Receipt (SDR) is also a money

The demand deposits are ones which are payable by the bank whenever demanded by the depositors. These are running accounts and are opened by the individuals/businessmen, public institutions and groups, that make deposits and withdrawals frequently. The deposits and withdrawals can be made through cheques, demands drafts, pay orders, etc, drawn on the branch. As these accounts are payable whenever the depositors demand and the bank by accepting these deposits incurs the obligation of paying all types of orders to the extent of the credit balance in the depositors accounts. These deposits represent current liabilities of the bank. So, the bank has to keep sufficient funds in its hand to meet the requirements of the depositors of these deposits. Furthermore the businessmen, who require money frequently, open current accounts. The bank can not apply the proceeds of such expenses, fees, commission, and markup etc arising out of any dealing or services with the branch. Fixed Deposits While on the other hand the deposits which are accepted by the bank under the condition that they will not be payable on demand but will be payable on a fixed or predetermined future time or date are called Time or Fixed Deposits. Following are the types of accounts the deposits department opens. Saving Accounts: These accounts are opened mainly by those customers whose banking transactions are not frequent and numerous. Lower and middle income groups, small traders, professionals, farmers and other salaried classes usually make such deposits, so as to save small amounts for the small or big needs, like purchase of television, refrigerator, car or house. Funds can be deposited frequently through cash, cheques, demand drafts, pay orders, telegraphic transfers and other such instruments. The objectives of the bank to keep deposits are to earn maximum profit by provide assistance in uplifting the economy. investing

the proceeds of the deposits, to help small savers, to fulfill their banking needs and to

45

ASDA It is a special of ACBL. It is act like a current account but interest is given. Notice Deposit In notice deposit the money is saved for 7-10 days and interest is given every day.

4.2.2 Accounts Department

This department coordinates all the banking activities and keeps them in a sequence and provides up to date data. This department is responsible for proper accounting of assets and liabilities for the bank in addition to bookkeeping. The accounts department also deals with the financial statements of the bank. Other functions performed by the department are head office reconciliation, provision of expenses such as medical, repair and maintenance, utilities, disbursement of staff salaries, pre-audit function, budgeting, maintenance of SBP statutory deposit, depreciation calculation, half yearly and yearly closing. 4.2.3 Foreign Exchange Department

The Foreign Exchange department provides the import and export facilities to the customers of the ACBL. It is also responsible to maintain the foreign currency accounts. It makes efforts to increase the foreign exchange balances. 4.2.4 Computer Department

Computers have become an important element of the modern banking system. This department is also called the Information Technology (IT) department. This department of the bank is responsible for the computerization of all the branch operations and the maintenance of the computer system. Network software developed by this department includes:

1Branch operations

46

2General Ledgers 3Accounting 4Foreign Exchange operations 5Reconciliation etc.

4.2.5

Credit/Advances Department

The main function of the bank is advancing loan and in return charges interest. Credit department takes care of advances. The Credit/Advances department issues the credits to the customers in response to their applications and then makes these credited amounts back to the bank after the specified period of time as per contract. This department also issues the credit card and ATM card. Credit is one of the most important departments of the bank. It provide money to the bank. A bank is a profit seeking institution. Its income depends upon the type and nature of credit facilities provide to customers. The formation of credit has made it more effective. 1Branch provides 2Small finance 3Running finance 4Demand finance 5ATM cards 6House finance 7Car finance

4.2.6

Clearing Department

The Clearing Department deals in transfer of money in response to the bills and instruments presented by the customers to credit or debit their accounts. The instruments that result in debit effect to their account are called the Outwards Bills for Clearing (OBC). Similarly, the bills, which change the balance of the account by a credit effect, are termed as Inward Bills for Collection (IBC). 47

4.2.7

Deposit Department

This department deals with the Retail Banking i.e., customers account. Accounts are opened here and maintained by them. It is the blood of whole Banking because accounts are the key to all the Banking activities. Bank reserves deposit in various shapes and offer a wide product line of deposits for sale to customers. Deposit department has three sections: 1Accounts section, which includes a number of accounts like local as well as foreign current account, local saving as well as foreign saving account and ASDA account, Company, Society, and Club Accounts etc. 2Machine room is the section of this department where the punching of data takes place, statement of accounts, is made and sent to the account holders. 3Cash section is the customer service section where the reception of collection and encashment of cheques takes place. 4.2.8 Dispatch Department

Dispatch department is concerned with mails. There are two types of dispatches. Income Mail. Out-going Mail.

Incoming Mail:

The mails, which we receive from other branches or head office or

from any principal office, are known as Inward Mail. A separate incoming mail register is maintained for this purpose. All mails which are received are properly registered in incoming mail register. Then it is sent to manager, which are overviewed and checked by him. Then it is further circulated to the concerned officer for necessary action. While handling over department mail to the concerned department/officer, their acknowledgement is also obtained for confirmation.

Out-going Mail:

The mails, which are sent from bank to another bank, branches or

head office, are known as outward dispatch. Here also a separate register i.e. outgoing 48

mail register is maintained for this purpose and all the record of outgoing mails are kept in it. 4.3 Instruments and Machines used by the Bank

In this section we will have a look on the instruments and the machines that are used by Askari Commercial Bank Ltd Univeristy Road Branch. 4.3.1 Instruments Used by the Bank This instrument is used to keep a record of the customers. The

The Bank is making the use of certain instruments, which are explained below: Signature Card: customer fills this card at the time of account opening. It consists the customers name, account number, amount and signature specimen. All the signature cards are kept in stationary in the order of account numbers, so that whenever the card is needed it can easily be found out. Vouchers: Vouchers are used in every bank. Every bank has its own printed

vouchers. Vouchers show the details about the amounts received and paid by the bank. The bank uses a double entry system i.e., debit and credit system. Therefore vouchers are of two types.

1Debit Vouchers are used to record a debit transaction. To differentiate these two types of vouchers, for the convenience of the officers, debit vouchers are printed in pink color. Whenever bank incurs some expense, entries are made in debit vouchers.

2Credit Vouchers are printed in green color. They are used to enter the credit transactions. Any income or amount received by the bank is entered in a credit vouchers. All the sections of the bank use vouchers because they are sort of documentary proofs, which indicates that the transaction has taken place. Each section of the bank collects its vouchers and if any discrepancy is found it is removed at the end of the day. All the debit and credit vouchers are sent back to office, which processes them. They are then sent to the concerned branches of 49

ACBL. 3Return Memorandum is used by the remittance department. It is used when an inward instrument is bounced. The return memorandum contains information like the instrument number, amount, date when returned and the reason for which it is being returned. The authorized officer fills the return memorandum form and attaches with the instrument and sent to the responding bank or other institution, which then concerns the customer. 4Deposit Receipt is filled up by a customer when he/she deposits money at ACBL, he/she needs to fill a deposit receipt. The deposit receipt contains the information like date, customers account number, account title, amount in figures and words, particulars of what is being deposit and depositors signature. For the customers convenience, the deposit receipts are printed in different colors. Red color is used for deposits in saving accounts, black printed deposit receipt is used for current accounts and the blue printed receipt is used for the Basic Banking Accounts. 5IBCA Vouchers is the advice of debit branch to the credit branch to pay the listed amount on its behalf. The IBCA (Inter Branch Credit Advice) is the advice, which is given by one branch (which debit amount) to another branch (to whom the amount is credited) with in ACBL. The total amount credited to the responding branch is posted on the IBCA with both branches (creditor & debitor) codes and names. This voucher is prepared at the end of all transactions in a department.

4.3.2

Machines Used by the Bank

In todays modern world an organization must adopt the modern machinery to be efficient and consequently profitable. The use of modern machinery can save a good deal of wastage of resource. Fax Machine: In the bank, fax machine is used to communicate the message from one bank to another for sending important letter or any other documents for urgent 50

consideration.

Computers: In order to save the record of the bank in more effective way, the latest computers are used at ACBL. The purpose of these computers is to enter and retrieve the required record with in seconds and provide the fastest services to its customers. The computers are also helpful in the online banking and preparing demand drafts, pay orders, account statements and other office.

CHAPTER V

THE SWOT ANALYSIS

Askari Commercial Bank Limited has some unique factors like being backed by Army Welfare Trust (AWT). AWT is an organization working for the benefit of the retired army officers, which adds to its value. The formal SWOT analysis constitutes of four different solid parts. The word SWOT stands for Strengths, Weaknesses, Opportunities and Threats. SWOT analysis consist sizing up an organizations internal strengths and weaknesses and its external opportunities and threats. It is an easy tool to get a quick overview of an organizations strategic situation. These factors tend to drive the organization through its ups and downs, success and failure. SWOT analysis is grounded on the principle that strategy must produce a strong fit between organizations internal capability (its strengths and weaknesses) and its external situation (its opportunities and threats). SWOT approach suggests that the major issues facing an organization can be isolated through careful analysis of each of these four elements. Strategies can then be formulated to address these issues. The relative importance of these issues needs to be determined and then potential impact on strategy formulation needs to be evaluated. When the top most management of an organization formulates the strategy they have to analyze the strengths, weaknesses, opportunities and threats for their organization. The SWOT

51

analysis is based on two types of analysis.

5.1

INTERNAL ANALYSIS

In the internal analysis, the strategists analyze their organization internal environment. The internal environment means the environment with in the boundaries of the organization. In this analysis we try to study the strengths and weaknesses of the organization. This is the study of the SW portion of SWOT analysis. Here we have a look on the strengths of ACBL.

5.1.1 STRENGTHS
Askari Commercial Bank Limited benefits from few points. These strengths makes its banking strengthened day-by-day. Strength is something an organization is good as doing or a characteristic that gives it an important capability. Strength can be a skill, a competence, a particular organizational resources or competitive asset or something the company has done that parts it in a position of market advantage (like having a better product, stronger name recognition, superior technology or better customer service). ACBL benefit from a few points, which ultimately makes its backing strengthened. Some of these points are as follows: 1.ACBL has a large number of clients with both huge and medium deposits. ACBL has large number of army officer as their clients and year-by-year the army officers client increases. Alongside theses clients Askari Bank also dealing with other civilians as their clients. ACBL believes in maintaining customers with no discrimination between the status, thus maintain equity between their customers.

2.ACBL believes in hiring active and inspired candidates. Experience is not an important requirement for recruitment. The qualification, criteria for selection of employee is MBA, MPA or any other related degree from reputed universities. At ACBL Peshawar Branch, most of the management has communication skills in local as well as foreign languages.

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3.ACBL offers various kinds of accounts with varying features and interest rates. From small accounts to large accounts the profit increases gradually. Its Master card also gives privileges to its customers. ACBL ATM is also a valuable service. Maintain the foreign currency accounts is another factor that attracts customers who wants to make transactions in dollars or pounds or deutsche mark, etc.

4.The bank has established the new BBS System, which stands for Basic Banking System. It has made all the branches of the ACBL online, which means that they are interconnected with each other and in full coordination.

5.ACBL is a renowned bank all over the country. Its branches are spread across all the regions of the country. Thus, enabling customers to make transaction more easily locally or out side the country. It also has agency arrangements in areas where it does not have any branch. This presence of ACBL in the region makes its reliability and its name is generally considered a name of quality and trust. 6.The support of Army Welfare Trust (AWT) with ACBL has alleviated the financial position of the bank. It has increased the operational efficiency and has resulted in reduced risk. The better financial position has opened the way for access to capital markets. As the bank has expanded, the bank is now enjoying economies of scale. A pleasant operational atmosphere develops the efficiency of the staff and also boosts the employees motivation. Fortunately at ACBL Peshawar Branch employees are in good relations with each other. The burden of work is generally willingly shared between the employees of the Bank. When any of the employees is on a short leave so other subordinate takes his work with care.

Economies of Scale:

The support of AWT with the bank has alleviated the

financial position of the bank. It has increased the operational efficiency and has resulted in reduced risk. The better financial position has opened the way for access to capital

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markets. As the bank has expanded, it is now enjoying economies of scale.

Large Number of Clients: Askari Commercial Bank Limited has a large number of
clients with both huge and medium deposits. ACBL has large number of army officers as its clients and year-by-year these clients increase. Alongside these clients Askari bank is also dealing with the civilians as its clients. ACBL believes in maintaining customers with no discrimination between the statuses, thus maintain equity between its customers.

Human Resource Management: Askari Commercial Bank limited believes in hiring

active and inspired candidates. Experience is not an important requirement for recruitment. The qualification criteria, for selection of employees, is BBA, MPA or any other related degree from any well-reputed University. At ACBL Univeristy Road Branch, most of the management has communication skills in local as well as foreign languages. ACBL attracts qualified pool of applicants by offering a superior salary to its present staff. The ACBL pays satisfying salaries to its employees with many other incentives like house loans and medical facilities etc.

Series of Products: ACBL practice the introduction of new products for its customers
to suit their needs. It offers various kinds of accounts with varying features and interest rates. From small accounts to large accounts the profit increases gradually. Its Master Card also gives privileges to its customers. ACBLs AskPower is also a valuable service, which works as ATM and as well as a Debit Card also. It allows customers to withdraw money from their accounts round the clock for 24 hours. Maintaining the foreign currency accounts, is another factor that attracts customers who want to make transactions in foreign currency like dollars or pounds etc.

New Technology: The bank has established new BBS System, which stands for Basic
Banking System. It has made all the branches of ACBL online, which means that they are interconnected with each other and in full coordination. The bank has been provided with new branded DELL computers lately. The employees do their work on computers. In Pakistan, where banking is still done on archaic methods, ACBL has tried its best to introduce new technologies for the betterment of its customer services.

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Employee Relationship: A pleasant operational atmosphere develops the efficiency

of the staff. It also boosts the employees motivation. Fortunately at ACBL Univeristy Road Branch, employees are in good relations with each other. There exists no back biting between employees. The burden of work is generally willingly shared between the employees of the bank. When any of the employees is on a short leave so other subordinate(s) and coworkers take his/her work with care.

High Deposits:

ACBL has got highest branch deposits in Pakistan. Almost all

branches of ACBL are having high deposits. ACBL Univeristy Road Branch is having deposits of more than any bank branch working in Peshawar. This is a strong point. This total exceeds the regional deposit of most banks operating in KPK.

5.1.2 WEAKNESSES
Weakness is something an organization lacks or does poorly or a condition that puts it at a disadvantage. Weaknesses, like strengths are a part of almost every organization. These weaknesses points out the potential areas of improvements and make the organizational behavior intelligent. A cumulative effort to overcome these flaws makes success possible A weakness can be strategically important or not, depending on how much it matters in the competitive battle the organization is in. Weakness in any organization dont mean that the organization lack administrative and operational functioning. It simply indicates the loopholes. Every weakness needs to be filled in and covering their up for effective and efficient future. Weaknesses, like strengths, are part of almost every organization. These weaknesses point out the potential areas of improvements and make the organizational behavior intelligent. A cumulative effort to overcome these flaws makes the success possible. During the internship period the weaknesses that generally surfaced and were visible at ACBL University Road Branch are described below:

Influence of Army Officials:

The army officials influence greatly on ACBL

University Road Branch. Often the customers have to suffer due to such influence. The 55

army officials, when have to deposit or withdraw some money, give order to the ACBL employees to do their work immediately. In case the work consumes more time, the civilian customers have to wait for a long time and they even cannot register their complaints against such officials. Thus the employees are disturbed while doing their work. This factor causes dissatisfaction in the civilian customers as well as unpleasant behavior of employees.

High Markup Rates:

ACBL charges a very high markup rate. In country like

Pakistan, people cannot afford such load of high markup. So middle class investors are discouraged by this activity of ACBL and they unwillingly move to the other banks to have finances for their businesses.

High Bank Charges:

ACBL charges a high amount on different services. For

credit card customers are charged extra amount of Rs. 120/- if they pay their installment in cash. Similarly, customers applying for Demand Draft are charged Rs. 225/- in addition to the bank commission. A student paying for NUST prospectus form has to pay a total sum of Rs. 1030/-, while this amount reduces to Rs.700/- when it is ordered directly from NUST.

Stipend:

Internees at ACBL are not paid a stipend for their internship. They

normally are provided with support and encouragement, which has its effect on their performance. With no stipend the motivational level of the internees is low.

Performance Appraisal: The performance appraisal is generally considered a

motivational as well as evaluative tool. At ACBL its use is normally made in an exploiting fashion. Evaluation is generally made on the basis of achievements of market targets. Unfortunately the market targets are too high and thus are always unachievable. Thus employees face the condition of being called inefficient at times. This is a demotivating factor for the employees, which decreases their performance level.

Understaffed Departments:

This

problem

is

normally

ignored.

Several

56

departments at ACBL Univeristy Road Branch are overloaded with extra work. Only one employee is responsible for the whole department. Such departments include Clearing and Remittance departments. These departments are the most working departments but unfortunately, these both are assigned to one authorized only. Such load cannot be carried during working hours and thus the branch is balanced often after working hours sometimes 10:00PM. This affects the social lives of the employees working at ACBL.

Unfair Allocation of Work:

Work distribution at ACBL Fakhr-e-Alam road

Branch is unbalanced. Some departments like remittance and clearing department have a large number of responsibilities. While on the other hand, lending department have comparatively small amount of work. Over working some employees creates resentment and are in anger to their fellow employees with less work at supposed injustice.

Irregular Stamps: The stamps used at ACBL are not much better in quality terms.
Often stamps have not clear vision and dont put a clear image on the instrument. The departments like clearing and OBC are mostly dependent on the stamping. The inward instruments are often bounced back by the responding banks because of the awkward stamps. This steps down the performance of these departments. Peshawar Branch are as described below in detail. 1.The root problem at ACBL Peshawar Branch, which is normally ignored, is that it is understaffed. Thus several departments are over loaded with extra work. This overburdens the employees, which leads to frustration and anger, provoking several other problems. 2.Performance appraisal is generally considered a motivational as well as evaluative tool. At ACBL its use is normally made in an exploiting fashion. Evaluation is made on the basis of the achievements of market targets. Unfortunately the market targets are always unachievable. Thus employees face the condition of being called inefficient at times. This is an annoying factor for some of the employees, which leads towards de motivation and anxiety.

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3.Work distribution at ACBL Peshawar Branch is unbalanced. Some departments like remittance and export department used to be under extra load of work. On the other hand lending department had comparatively a small amount of work. Over burdening some employees creates resentment in their hearts for their fellow employees with less work. 4.Long queues at cash counter are regular sight at ACBL Peshawar Branch during the first section of banking hours. It is quite a shocking view for a new visitor who enters the bank. This presents and unsophisticated look. 5.The outlook of an organization plays important role in portraying its image to customers. The ACBL Peshawar Branch has a structure that is simple and not enough eye-catching that will attract customers. The interior of the bank gives a crowded look. The atmosphere is professional. Though it is centrally heated and air conditioned, so as to provide customer and staff with better working condition in every climate. There is less seating arrangements in the bank for both the employees and the customers. Internees at ACBL are not paid a stipend for their internship. They normally are provided with support and encouragement, which has its effect on their performance. With no stipend the motivational level of the internees is stumpy.

5.2

EXTERNAL ANALYSIS

In external analysis, the strategists analyze their organizations external environment. The external environment means the environment beyond the boundaries of the organization. In the external analysis we try to study the opportunities of the organization and threats stepping towards the organization. This is the study of the OT portion of SWOT analysis. The opportunities of ACBL Peshawar Cantt are as below:

5.2.1 OPPORTUNITIES
Success, more than anything is all about converting into opportunity what everybody 58

else considers danger Opportunities, when exploited properly reap profits and earn success. They are almost always a matter of time. They are to be sought, picked and made use of, before any body else gets up and do so. Its just about being smart and accurate. ACBL also have some opportunities it can utilize and obtain good market position. Some of the opportunities ACBL can make use of are hinted below. The post September 11, 2001 conditions have turned fruitful for Pakistans economy. The United States of America giving its consent in relaxing foreign debt policies and providing Pakistan with additional loans without interest are factors, which have boosted Pakistans economy. Thus the forthcoming picture seems one with economically more stable Pakistan. In this period Pakistani nationals living in foreign are bringing money back home. Foreign investors are getting encouraged to bring money and invest it here in Pakistan. New NGOs are taking birth. Several countries companies are coming to Pakistan to help the Afghan people Opportunities, when are utilized properly harvest profits and earn success. They are almost always a matter of time. They are to be sought, picked and made use of, before any body else get them up and do so. It is just about being smart and accurate. ACBL have some opportunities that it can utilize and obtain good market position. Opportunities are big factors in shaping an organizations strategy. The prevailing and emerging industry opportunities most relevant to a particular organization are those in which it has a competitive advantage or those that offer important avenues for growth. There are the means and ways, provident to any organization, in order to straighten out it loopholes. These are to be recognized and matched with the prevailing circumstances. Some of the opportunities of Askari Commercial Bank Fakhr-e-Alam road Branch are given as below:

Stable Economic Condition:

The post September 11, 2001 conditions have

turned fruitful for Pakistans economy. The United States of America giving its consent in relaxing foreign debt policies and providing Pakistan with additional loans without interest are the factors, which have boosted Pakistans economy. Thus the forthcoming

59

pictures seem one with economically more stable Pakistan. In this period Pakistani nationals living in foreign are bringing their money back to their home country. Foreign investors are getting encouraged to bring money and invest here in Pakistan. New Non Governmental Organizations are taking birth. Several countries companies are coming to Pakistan to help the Afghan refugees.

Balance in Staffing of Employees:

The employees of ACBL Fakhr-e-Alam

road Branch are high educated and well trained. They are showing good performance. But staffing them in efficient manner can increase their performance level. Some departments have more employees and less work, thus they pass their time by talking with each other. While other departments have less employees with high workload. So it is difficult for them to manage this work and improve their responsiveness to the customers. Thus their performance is low. The Human Resources Department, if maintains the balance in staffing of employees, can improve its performance level and quality.

Fresh Graduates: In todays competitive environment, a lot of fresh graduates are

entering into the market every year. These graduates may produce high results for ACBL, if chance given to them. Acquiring these graduates will also fill the shortage of the employees.

Downsizing by the Banks:

As most of the banks, such as Habib Bank Ltd,

National Bank of Pakistan and the Muslim Commercial Bank Ltd etc are working on downsizing strategies now-a-days. A large number of experienced and professionals of banking are now being un-employed. Askari Commercial Bank Ltd can also hire these experienced people in order to guide the fresh graduate employees to improve their performance level.

Providing Agricultural Loan:

Pakistan is an agricultural country and most of its

population is agricultural in profession. Due to less financial resources, most youngsters of agricultural family, are unemployed. They can produce income for themselves and

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their families, if given some financial back. Askari Commercial Bank Limited can generate its profit as well as provide the employment for such youngsters by advancing them agricultural loans. This increase in line of product will also serve the nation.

5.2.2 THREATS
Threats can stem from the emergence of cheaper technologies. Threats are unseen, futuristic, probable events that can occur and prove dangerous in consequences. Every organization is faced by some category of threats in its operations and functions. Opening new outlets, altering existing policies, designing fresh marketing strategies, bringing change in physical structure, almost every activity that an organization do face some kind of threats just like the benefits it seeks. The introduction of new or better products by rivals, the only of low cost foreign competitions into a companys market stronghold, new regulations that are more burdensome to a company than to its competitors, vulnerability to a rise in interest rates. The potential of a hostile take-over, unfavorable democratic shifts, un-affordable shifts in foreign exchange rates, political instability in a foreign country where the company has facilities and the like. These indicate the pinch points, the edges after which the production and profitability margin of any organization hampers. These are the obstacles in the external environment. Also provide opportunity to set bank certain future strategies to face the threats. Similar obstacles are found against the banking practice of ACBL. ACBL also face some threats, which can just prove minor assumed fears as well as can become events with grave consequences. The prevailing conditions indicate the following as the possible threats:

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Volatile War Situation with India:

The tension between Pakistan and India, due

to Kashmir issue has reached a precarious point now. The decrease in armed forces on both sides of the border has led the business activities to a gradual increase. A war between the two countries would prove hazardous to the economies of both the countries. It is a continuous threat not only for ACBL but also the whole banking industry till Kashmir is not resolved.

Law and Order Situation:

The government must maintain the law and order

situation in order to attract foreign investors. The suicide bomb blast on 27 th January, 2007, in Peshawar city which killed 20 men including CCPO Malik Muhammad Saad, local government heads and several policemen, created an atmosphere of being unsafe in the country. Similarly bomb blast in Karachi, which killed almost 15 French engineers also created unsafe environment amongst the foreigners residing in Pakistan. Incidents like these enormously affect the economy of a country. If the foreign investors will not feel safe in Pakistan, then how it is possible that they will invest their money here in Pakistan?

Competitors:

ACBL also faces competitors in the market. Union Bank and

Standard Charted Bank are already online. These two banks also enjoy sound financial backing and come from a rich background. Also there are working foreign banks like Bank Alfalah, Emirates Bank and Faisal Bank. Various domestic banks like MCB and others have also shown improvements. To survive amongst all these competitors, ACBL needs to keep in touch with modern technology, keeping flexible and customer oriented policies and adopting the latest trends of banking.

Downsizing: The downsizing in the Pakistani banks is the main issue now-a-days that
the employees face. This creates stress among the current employees. It also reduces the interest of potential employees towards banking. The employees of ACBL also are under stress about their job.

Rapid rate of Global Technology:

The technology gets advanced rapidly. But

62

unfortunately, these technologies reach Pakistan very slowly mostly when it expires in the advanced countries. This keeps not only ACBL but the whole banking in Pakistan on a step back to the developed countries. Due to this back step technology, ACBL cannot transact with the foreign banks and its competitors like SCG and Union bank enjoy the new technologies.

Armed Activities in FATA:

Due to unstable law and order situations in

Pakistan, the armed forces of Pakistan attacked several times in Waziristan and Bajor Agencies. Due to these incidents the residents of KPK especially citizens of Peshawar and FATA, dont like the Pakistani armed forces as much as they were having in past. ACBL is backed by Army Welfare Trust, so army officials visit the bank every moment. They also force their influence over civilians and the officers of the bank. So the people dont like to invest money at ACBL.

Low Bank Charges by Competitors:

Most of the competitors of ACBL are

offering very low bank charges for the customers. This is a crucial point for ACBL, which is always ignored by the top management. ACBL charges rupees 225 a customer who wants to have demand draft of less than 35,000 rupees and pays it in cash.

High Inflation Rate:

High inflation rate in a country strikes its economy badly.

Similarly, the banks are also hit by high inflation rates. ACBL is one of those banks who suffer from this critical situation. When inflation rate steps up, the banks deposits step down due to reduction in their saving accounts.

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CHAPTER VI

FINDINGS & OBSERVATIONS

Performance of banking sector in general, has remained depressed due to unpredictable economic situation prevailing in the country. Competition among various banks remained very tough. ACBL continues to grow despite economic stagnation in the country. The bank has successfully penetrated in the key markets through branch expansion and business diversification. System of regional management is in place to ensure greater thrust and improvement productivity. They are alive to the change and growth-taking place in the global financial markets the opportunities and threats endangered by greater deregulation, and the increasing customer expectations. These provide them the impetus to make the best use of available resources, including modern technology, to meet the challenges ahead. ACBL has been growing at varying pace in every aspect of banking. Its employees, from top to bottom, are committed and strive hard to achieve the over all objectives of the bank. They are constantly striving to improve their skill and knowledge regarding new development in the banking sector. Efforts are directed to provide prompt and rapid services to its customers. Lectures, seminars and short courses are arranged at regular intervals through which employees are given the opportunity to develop their skills and broaden their knowledge. ACBL offers considerable benefits for its customers through expertise of its staff around the country, who offer highly competitive and diverse services. Over 115 branches are working in all over the country. Management in each branch are the nationals of Pakistan. Askari Commercial Bank Limited is leading private sector bank, so it should join hand with the commercial banks for the improvement of banking sector in Pakistan. They should conduct research of find out peoples needs and attitude.

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Despite of the fact that profitability of the bank increasing day by day, there is still considered room for improvements no doubt that with the passage of time, improving managerial polices and full introduction of modern techniques, the bank has planned to further enhanced its activities in future. New millennium is full of opportunities and threats in the field of banking. It is vital to identify these opportunities in order to benefit from them. At the same time concrete steps are required to meet the challenges of the new century. My findings are based on eight weeks internship at Askari Commercial Bank Fakhr-e-Alam road Branch. The observations during my stay lead to the following findings.

6.1

PERFORMANCE ORIENTED ENVIRONMENT

Environment of Askari Commercial Bank Limited Peshawar Cantt is very conductive, cooperative and goal oriented, which helps in attaining efficiency. The manager has an effective control over the staff.

6.2

BRANCH NETWORK

The branch network of ACBL is about 226 according to september 30, 2011, which of course are less as compared to its competitors, but recently no doubt that the branch network has shown a substantial increase when compared with the past few years. The business of the bank is increasing day by due to increasing in its branches.

6.3

BRANCH SPACING

The spacing of the branch really requires expansion. The employees are placed very close to each other. Customers also have to suffer a lot due to less space. If a lot of customers come to the bank at the same time, the Bank gives a look of a stock exchange.

6.4

CREDIT RATING

During the year, the Pakistan Credit Rating Agency (PACRA) upgraded the Banks Long

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Term entity rating to AA, while maintains the Short Term Rating at A1+ (The highest possible in the category). The bank has also got Best Bank in Pakistan Award by Global Finance, which is an American Magazine.

6.5

ONLINE BANKING

The worlds banking system is converting to the on-line banking. In Pakistan ACBL is the first bank to start on line banking this facility enables the customers to operate his account from any outlet of ACBL in the country.

6.6

MARKETING

The bank is a part of a service industry so its marketing strategies are customer oriented. The banks marketing moves are in line with their competitors. Whenever a new product is launched proper strategy is followed so that the prospective customers of the bank can know about the new product. Advertisements are placed on the television, newspapers, magazines etc. The bank issues a newsletter in which the achievements of the bank are mentioned. These newsletters do tell something about the new products launched and to be launched by the bank.

6.7

IT STAFF

There is lack of IT personnel in the bank. Just one person is assigned to take care of the working, maintenance and reports generation. The lack of the IT personnel has also caused a considerable workload for the IT coordinator. Long working hours exceed the regular Banking hours has become a routine for the IT coordinator.

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6.8

IMPORTANCE OF EMPLOYEES DEVELOPMENT

The employees of the bank are given a fair chance to develop their careers. The bank encourages its employee to improve their education; seminars and training course are arranged. These courses and seminars improve their personnel career.

6.9

SALARY AND REWARDS

The employees are satisfied with the pay structure of the Bank. Reward system is established to keep the employees motivated. The employees showing good performance are given cash rewards, bonuses and increments. These rewards also pay an important role to keep the employees motivated in future.

6.10 COMBINE TRAINING INSTITUTION

Although the bank is spending a lot of money on human resources development but it should take steps, to make permanent arrangement for creating a source that may provide them with trained manpower as and when required.

6.11 RESEARCH TO FIND OUT CUSTOMERS NEED

ACBL is a leading bank but it is not conducting research in order to find out needs, and attitude of the people towards the bank. This activity of the bank will stop the growth ways in the future as it will not upgrade.

6.12 FAVORITISM
The bank is suffering from the problem of favoritism. Staff is selected not purely on merit basis but their references from the high army officials are given preference. A talented potential employee cant even think about entering ACBL, if he/she has no good relations with any high ranked army official.

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CHAPTER VI

RECOMMENDATION
Conclusions are considered as an integral part of any study especially internship reports. The conclusions and findings are based on various aspects of documentary proofs and self observations. Mostly, the observations and interviews with others are used for concluding any thing about an organization. My recommendations are based on eight weeks internship at Askari Commercial Bank Fakhr-e-Alam road Branch. The observations during my stay at ACBL, lead to the following findings and recommendations.

7.1

FULL AUTOMATION OF THE BRANCH

Full Fakhr-e-Alam road i.e. an extensive computer network is required. Because there is excessive paper work in the bank, if the computerized network is introduced in the bank it will reduce the excessive paper work which in turn will reduce the burden on the bank employees. By full automation of the branch, the employees performance level will become improved. The responsiveness to the customers will also be increased through the electronic storage and accessing of their data. Also the customers needs and wants can also be satisfied with a high rate with the full automation of the branch.

7.2

LATEST OPERATING SYSTEM

For a good reputation it is important to have the latest operating system available in the market, which not only fulfills its needs but also improves the working of efficiency of the banking activities. Windows 98 is on the edge of being out dated in its function and expertise. So it should be replaced by new windows 2000 & XP servers. Windows 2000 & XP have more power to support large volume of data, and is easy to install as well. It has advanced plug and play system, being more reliable core operating system it also provides support to the new networks, which presents a strong base for advanced web base application.

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7.3

COMMUNICATION SYSTEM

This system makes management possible, and helps in selection, appraisal, and training of the employees. Thus help to get productive feed back. Secondly there should be twoway communication between branches and main office. Although satellite communication is very good but due to power failure, weather other or dish movement the communication can be disrupted. Also alternate path using dial-up networking through PTCL lease lines is very unreliable. The system recommended is optic fiber connection. It is under ground so its not effected by weather, it provides a multiple channel for communication. Optic fibers are found to be fast, efficient and effective as well.

7.4

MARKETING TOOLS

In order to promote any product, service, or even an organization it self, its necessary to have marketing tools. These tools are either print media, electronic media or marketing staff. ACBL do realize the importance of their marketing tools but it should put more emphasis on this area. The bank should hire certain people, who can make promotion to the bank, by visiting influential area would be very much useful. Even print media can be used, either by brochures, or contacting the business. Magazines can bring their products on broad scale. Television can also be used, as a biggest and vast source for promotion of any product or service.

7.5

ATM ARRANGEMENTS

To increase the number of outlets of ATMs, ACBL has made arrangements with HBL, but this should be with other leading banks as well, so that the customer can enjoy this facility more and more. Proper maintenance of ATMs should also be pursued.

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7.6

MARK-UP CHANGES

This is the main tool to make advances at flexible routine and to attract customers as to and earn profits. Both for maintaining accounts and for lending loans. If the mark up rates on holding accounts are kept at a hand some rate. Then this will facilitate the Bank to have more deposits to keen out and there to earn profit on normal rates. It will also help the foreign investment to crawl in, thus favoring both the profitability of the Bank as well as the economy.

7.7

BROAD NETWORK OF BBRANCHES

The ACBL should extend its existing branch network through out the country. To attain customer loyalty of to provide better access for the customer, which is very necessary for a growing service organization, maximum branches are to be opened at potential business places through out the country.

7.8

SUITABLE SPACING

The over all spacing of the branch requires expansion. The interconnected departments should be placed together. The flow of work should be followed while space is given to the departments. Customer spacing should be expanded so that the routine work should not be hampered and continue in normal fashion. The suitable spacing will also increase the motivation and performance level of the employees.

7.9

COMBINE TRAINING INSTITUTION

As ACBL is a leading bank in the country and a pretty good number of commercial banks both in the public and private sectors, with wide network of branches are working in Pakistan. Askari Commercial Bank therefore, joins hands to make permanent arrangement for creating a source that may provide them with trained manpower as and when required.

7.10 SELECTION ON MERIT

When an organization hires employees it goes through a certain selection procedure. This process takes cost and time. If the selection is wrong, then it becomes burden on the finances of the bank. The bank should strictly follow merit policy. Any sort of favoritism or nepotism should be avoided. The persons who are suitable for the bank should be

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selected purely on merit. Because it has been observed that being an Army Welfare Bank the say of army is mostly preferred. But it should not be the case. First priority should always be merit, based on educational background and skills. Secondly even if such influential cant be avoided then it should be observed that the recommended person is of certain productive capacity to the bank. Other wise the prestige of the bank can be at stake.

7.11 COMPETENT STAFF

Certain officers are either too good for the job while the others lack the quality to a great extent. This brings unbalance in the functioning of the departments and causes job stress. People with abilities and certain know how are to be given a job they are competent for. Otherwise adjustments are to be made.

7.12 JOB ROTATION

It is an important aspect for any employee to get satisfied with the job. It brings experience, equal distribution of work and providing the employees a suitable environment to work for better output. While at the branch, this trend is very slow and is also uneven.

7.13 PREVENTION OF JOB STRESS

To prevent the job stress and anxiety the working environment of the bank has to be very friendly. There should be recognition for good work and employees should be considered part of what is going on Job Security, good wages, promotion and growth opportunity should be provided to reduce anxiety.

7.14 STAFF PERFORMANCE APPRAISAL

This practice provides various opportunities towards the management as to work out their problems related to their job. This also evolves the participation of the employees in the management. For this purpose the manager is to conduct a weekly staff gathering. Where he/she have to discuss the weekly functioning and the problems related to them. This will help the manager to evaluate the participation of the staff is bank activities. And will also

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help to make promotions and provide incentives to them.

7.15 DISCIPLINE
Good organization follows discipline. Absenteeism is not a good practice. It should be discouraged. Proper procedures should be adopted and implemented to check the attendance of the employees and discourage the mal practice.

7.16 REENGINEERING THE SYSTEM

For the manufacturing of this system new knowledge or skills of employees become the human inputs. Therefore profits, surplus of income over costs, reinvestment in cash and capital goods needs new managerial knowledge. New changes can be brought in through value of engineering the service and through introducing quality circles. This is to provide ideas and suggestions through people and research.

7.17 SEPARATE ACCOUNT OPENING DEPARTMENT

Deposit Dept. services the function and maintaining accounts and also the opening of accounts. This dual service has over burdened the deposit department. As account opening form needs care and attention. So an individual with full concentration can serves the job. For this, either one of the deposit officer (there being two) serves the purpose. As accounts opening is a daily activity but with less number. So the load can be shared later on after bank timings. This can avoid mistakes and errors.

7.18 BROCHURES FOR THE DEPARTMENTS

These are quite helpful explain the elements and products each department is offering besides their actual functioning. If small size pamphlets are issued on behalf of the departments, to give recent development in their products and their details and these brochures should have both the languages English and Urdu, to facilitate the local people.

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7.19 EQUAL DISTRIBUTION OF FACILITIES TO ALL BRANCHES

No doubt that ACBL has shown its success in very few years, with now offering dozens of facilities but its not enough. The facilities with which the bank is known should also to be provided to the branches. Before going for any branch, along with the economic market, if the infrastructure facilities and the latest equipment linked with the bank are provided firstly, then it will help the branch to boost up its activities very soon. Such like the building, internet connection, on-line service, qualified staff and above of all a marketing staff send before to make the market familiar with their products.

7.20 INTRODUCING FRESH BLOOD AND MINDS

With intellectuals from various aspects of the society, the bank has proven to run at a successful pace. But only experience cant be counted in. Fresh minds from various academic institutes are to be taken in. Their skills are to be judged through appropriate selection criteria set. Not just written tests, but also asking the institutions for their best recommendations, especially from administration, commerce, economic and information technology areas. This will generate new ideas and concepts to the banking business.

7.21 TRAINING PROGRAM FOR INTERNEES

The bank should organize an intern-training program to make the best possible outcome from the interns. Interns in the bank face many problems due to various reasons. In short, the bank lacks an intern-training program.

7.22 ORIENTATION FOR INTERNEES

Orientation covers the activities in introducing the organization. After selecting the interns, they should be given a formal orientation of the bank. This can only be possible if they take group of intern at a particular time. When the next group comes same process should be followed.

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OTHERS A brief orientation can be given by any employees discussing the history, mission, the banks role and importance, organization structure, various products, department etc. this will give an insight to the interns to better understand the interdependency and the processing of the bank. It would be a general out look. Moreover, necessary handout. 1.For the attainment of profitable markup charges and the beneficial accounts are set to be at proper level. This will facilitate the customers to have make interest in maintaining the accounts. 2.As with other functions of management, establishment of objectives and orderly planning are necessary for good organization. Planning helps determine future personnel needs and attendant training programs. With out knowing what managerial personnel will be needed and what experience to demand, an enterprise cannot intelligently recruit people and train them. Further more, organizational planning can disclose weaknesses in the organization and other aspects keeping in view the importance of planning, it cannot be ignored. 3.For promotion and marketing purpose if media services are used through commercial and through print media this can help the promotion of ACBL in many ways. 4.A service desk should be maintained to provide information about various departments products and services offered by bank. 5.In order to revolve overstaffing problem, competent person is to be selected according to the job requirement. 6.There should be proper job rotation in the branch so that every officer is familiar with the work of all departments. 7. Before making any decision in planning its activities, should properly forecast to see that the decision which they are likely to take as any good or bad implementation for the bank and for the economy as a whole. 8.In decision making every one should be involved, which will also improve relationship between management and employees. All the department head should be given full authority regarding decision making. 9.ACBL should adopt once again aggressive strategy because the number of its

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competitors is increasing day by day. 10.The communication system of the bank should be improved by installing new equipments. Because Co-ordination can be improved among different department by adopting proper channels of communications. 11. Regular staff appraisal will screen the shortcomings, with this reinforcement factor, desirable performance can be obtained and every employee will get fair treatment. 12. To have big promotion of customer in market product with good attributes should be offered at reasonable price. 13.Manager should try to reinforce work on employees in positive ways. Rewards should be given for their better performance. Benefit should be given. They should be properly motivated to increase efficiency. 14.Recruitment in the bank should be made purely on merits basis, and the HRD should be fully free from any influence of higher authority and staff union in conduction of tests and in the selection of candidates. There should be proper training (up-to-date) for newly selected employees. 15.ACBL must continue to establish and introduce new schemes in shape of different products/accounts with good incentives to the customer in order to compare efficiently and improve its position. 16.Management by Objective needs to be introduced immediately. It will help improve in the functioning of bank and will lead to greater participation. In MBO system there is proper coordination of employees at all levels. 17.Procedure for advancing loans is very lengthy and time consuming. Lengthy procedures of advancing loans must be simplified in case of small amounts. All actions and decisions must be made quickly. It will help the bank to improve its image and it will also increase number of its customers because of its better services.

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18.Loan procedure should not be cumbersome and should be made easy, so as to ease the customer. 19.Timely and quick dispersal of loans and advances are to be under taken. This can be through checks and balance by the higher authority. 20.The markup rates should be set in accordance to the convenience of the clients, as more clients are unable to heavy markups 21.The bank should take care that the loan which is has advanced is being utilized for the purpose for which it is advanced. 22.There must be proper job feed back for the work of employees of credit department. 23.While auditing advances the auditor should see that advances are sanctioned according to SBP rules and regulation. 24.The bank must also provide pleasant response to fresh graduates and internees as well, which is personally observed by me is not satisfactory. 25.ACBL should increase its participation in social welfare activities within the country for the public in order to build public relations. 26.As mentioned above employees take undue leave from bank. Unnecessary leaves are given to the employees. Those who are frequently absent must be punished. There should be a cut in the leaves Unions should not be over powered. They should not always be encouraged. In order to solve the problem of unions, law must be clear to all members and there should not be any concession to the one who has done wrong

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