1

Habib Bank Limited

‫حبیب بینک‬
Dat
a
Submitted to:

Bas Madam Raheela

Submitted by:

e
Rabeel Akram BBA18-014

Esha Younas BBA18-040

Nazish Ijaz BBA18-045

Ma Umama Tahir BBA18-056

nag
Topic:
HBL Management System (Habib Bank Limited)

eme
nt Gujranwala Campus
University of the Punjab

Syst
Contents
Evaluation of Banking:.............................................................................................................................1
Commercial Banking in Pakistan:...........................................................................................................1
History of Banking in Pakistan:...............................................................................................................2
Pre Nationalization period:...................................................................................................................2
Nationalization period...........................................................................................................................3
Post nationalization era:........................................................................................................................3
About Habib Bank Limited:.....................................................................................................................5
History and Background...........................................................................................................................5
Vision, Mission and Values:......................................................................................................................5
Board of Directors:....................................................................................................................................6
Designation:...............................................................................................................................................6
Corporate Information:............................................................................................................................7
SWOT Analysis:........................................................................................................................................8
Strengths:...............................................................................................................................................8
Weaknesses:...........................................................................................................................................9
Opportunities:........................................................................................................................................9
Threats:..................................................................................................................................................9
Banking Department of HBL:................................................................................................................10
Account Opening Details:.......................................................................................................................10
Products and services of Habib Bank Limited:.....................................................................................11
1. Types of Accounts:.......................................................................................................................11
Memberships of Industry Associations and Trade Bodies...................................................................12
Title:.........................................................................................................................................................13
Scope:.......................................................................................................................................................13
Relationships:..........................................................................................................................................13
Entities and Attributes:...........................................................................................................................14
ER Diagram:............................................................................................................................................15
Internship Report
3
Habib Bank Limited
have a close comparison of
theoretical concept in practical
field, involving the use of
primary and secondary data. All
the efforts on the way are
summarized in shape of
this Internship Report. Report
starts with the topic evolution of
banking. The word
'Bank' is said to have been
derived from the words Bancus
or Banque or Bank. This
history of banking is traced
to as early as 2000 B.C.
Talking about commercial
banking in Pakistan It was very
difficult for Pakistan to build up
its own Banking
system immediately after
independence without sufficient
resources. By 30th June
1948 the number of schedule
banks in Pakistan declined from
mere scratch. Today
there are more than 7000
branches of commercial banks
along with an established
network of supplementary
financial institutions. All this
development in the banking
sector is the result of untiring
efforts of six decades. HBL was
the first commercial
bank to be established in
Pakistan in 1947. Over the
years, HBL has grown its
branch network and become
the largest private sector
bank with over 1,450
branches across the country
and a customer base
exceeding five million
relationships.
On December 29, 2003
Pakistan's Privatization
Commission announced that
the Government of Pakistan had
formally granted the Aga Khan
Fund for Economic
Development (AKFED)
rights to 51% of the
shareholding in HBL,
against an
investment of PKR 22.409
billion (USD 389 million). This
report contains information
about HBL’s board of
directors, management,
mission, vision and values.
HBL’s
operations are discussed in light
of its working department in the
branches like cash,
clearing, foreign exchange and
accounts department and also in
light of its services
and products which it is
offering to customers’ weather
they are individual, business,
corporate or agriculture
field related customers.
HBL is currently offering
phone
banking, internet banking and
various cash management
services for the facilitation
of its customers. HBL’s car to
car loan has its own uniqueness
in Pakistan’s banking
sector. HBL’s branch
network is extended all
over the Pakistan which
has its
competitive edge over all other
private sector banks in Pakistan.
nformation Technology has
an essential requirement to
do Six to Eight weeks
internship in any of the well
reputed organization. The
purpose of this program is to
acquaint the students with
practical applications of
theoretical concepts taught to
them during conduct of
their MBA program. The
internship in Habib Bank
was
arranged by the job placement
cell of the institute. Really, it
was a nice opportunity to
Executiv
e
Summar
Report starts with the topic evolution of banking. The word 'Bank' is said to have
been derived from the words Bancus or Banque or Bank. This history of banking

y
is traced to as early as 2000 B.C. Talking about commercial banking in
Pakistan It was very difficult for Pakistan to build up its own Banking system
immediately after independence without sufficient resources. By 30th June 1948
the number of schedule banks in Pakistan declined from mere scratch. Today there
are more than 7000 branches of commercial banks along with an established
network of supplementary financial institutions. All this development in the
banking sector is the result of untiring efforts of six decades. HBL was the first
commercial bank to be established in Pakistan in 1947.Over the years, HBL has
grown its branch network and become the largest private sector bank with over
1,450 branches across the country and a customer base exceeding five million
relationships.
On December 29, 2003 Pakistan's Privatization Commission announced that the
Government of Pakistan had formally granted the Aga Khan Fund for Economic
Development (AKFED) rights to 51% of the shareholding in HBL,
against an investment of PKR 22.409 billion (USD 389 million). This report
contains information about HBL’s board of directors, management, mission,
vision and values. HBL’s operations are discussed in light of its working
department in the branches like cash, clearing, foreign exchange and accounts
department and also in light of its services and products which it is offering to
customer's weather they are individual, business, corporate or agriculture field
related customers. HBL is currently offering phone banking, internet banking and
various cash management services for the facilitation of its customers. HBL’s car
to car loan has its own uniqueness in Pakistan’s banking sector. HBL’s branch
network is extended all over the Pakistan which has its competitive edge over all
other private sector banks in Pakistan.
 1

Evaluation of Banking:
The word 'Bank' is said to have been derived from the words Bancus or Banque or Bank. This
history of banking is traced to early as 2000 B.C. The priests in Greece used to keep money and
valuable of the people in temples. These priests thus acted as financial agents. The origin of
banking is also traced to early gold smiths. They used to keep strong safes for storing the money
and valuable of the people. The persons who had surplus money found it safe and convenient of
deposit their valuables with them. The first stage in the development of modern banking, thus,
was the accepting of deposits of cash from those persons who had surplus money with them.

The goldsmiths used to issue

receipts for the money
deposited with them.
These receipts began to
pass from hand to hand in
settlement of transactions
because people had confidence
in the integrity and solvency of
goldsmiths. When it
was found that these receipts
were fully accepted in payment
of debts; then the
 2

receipts were drawn in such a

way that it entitled any holder to
claim the specified
amount of money from
goldsmiths. A depositor who is
to make the payments may
now get the money in cash from
goldsmiths or pay over the
receipt to the creditor.
These receipts were the earlier
bank notes. The second stage in
the development of
banking thus was the issue of
bank notes.
 3

The goldsmiths used to issue

receipts for the money
deposited with them.
These receipts began to
pass from hand to hand in
settlement of transactions
because people had confidence
in the integrity and solvency of
goldsmiths. When it
was found that these receipts
were fully accepted in payment
of debts; then the
receipts were drawn in such a
way that it entitled any holder to
claim the specified
 4

amount of money from

goldsmiths. A depositor who is
to make the payments may
now get the money in cash from
goldsmiths or pay over the
receipt to the creditor.
These receipts were the earlier
bank notes. The second stage in
the development of
banking thus was the issue of
bank notes
The goldsmiths used to issue receipts for the money deposited with them. These receipts began
to pass from hand to hand in settlement of transactions because people had confidence in the
integrity and solvency of goldsmiths. When it was found that these receipts were fully accepted
in payment of debts; then the receipts were drawn in such a way that it entitled any holder to
claim the specified amount of money from goldsmiths. A depositor who is to make the payments
may now get the money in cash from goldsmiths or pay over the receipt to the creditor. These
receipts were the earlier bank notes. The second stage in the development of banking thus was
the issue of bank notes.
The goldsmiths soon discovered that all the people who had deposited money with them do not
come to withdraw their funds in cash. They found that only a few persons presented the receipts
for encashment during a given period of time. They also found that most of the money deposited
with them was lying idle. At the same time; they found that they were being constantly requested
 5

for loan on good security. They thought it profitable to lend at least some of the money deposited
with them to the needy persons. This proved quite a profitable business for the_ goldsmiths.
They instead of charging safe keeping charges from the depositors began to give them
interest on the money deposited with them. This was the third stage in the development of
banking.

Commercial Banking in Pakistan:

It was very difficult for Pakistan to build up its own Banking system immediately after
independence without sufficient resources. Following the announcement of the partition plan in
June 1947 there was a haste movement on the parts of banks to transfer their funds and accounts
across the borders. The bank shaving their registered offices in Pakistan were transferred to
India. In an effort to bring about the collapse of the new state by the persecuting an international
policy of withdrawal, the Indian bank offices closed quickly. Those banks, which stayed, were
considering the winding up of their business. By 30th June 1948 the number of schedule banks
in Pakistan declined from mere scratch.
Today there are more than 7000 branches of commercial banks along with an established
network of supplementary financial institutions. All this development in the banking sector is the
result of untiring efforts of four decades.

History of Banking in Pakistan:

It divides in three stages:
a) Pre-Nationalization Era
b) Nationalization Era
c) Post Nationalization Era

Pre Nationalization period:

There were only two Muslim banks in Indo Pak before partition; they were. Habib Bank Ltd.
(est. in 1941 at Bombay) & Australia Bank Ltd. (EST. In 1944 at Lahore). All other banks, at
that time, were either owned by Hindus or Foreigners. At the time of partition there were 631
bank branches in area which came under Pakistani control. But due to bloodshed and violence at
large scale, mostly branches were closed and the disparity can be assessed from the fact that on
July1948 there were 195 branches with deposits of Rs.88 crore (880 million) only. Also a factor
lagging in Pakistani industry was a central bank of its own, by that time Reserve Bank of India
was acting as central bank for both countries and same currency notes were used in both
territories. But Reserve Bank of India was biased and Set down Pakistan on many occasions such
as the issue of funds transfer etc.
In this period drastic steps were taken in government sector for the improvement of overall
position. The private sector also responded to these changes and some very positive changes
were observed. Some of the steps taken by the government in this regard were as under:
 6

1. Inauguration of State Bank of Pakistan (SBP) on 1st July, 1948.

2. Setting up of National Bank of Pakistan in November, 1949 to control the 'jute' export in
East Pakistan and to act as agent of SBP.
3. Larger powers were given to SBP through SBP Act (1956) for controlling purposes.
4. Banking Companies Ordinance 1962 for protection and guidance to banks.
5. Establishment of specialized banks, such as ADBP (1952);
a) HBFC (Nov, 1952)
b) P1CIC (Oct, 1957)
c) IDBP (Aug. 1961)
d) NDFC (Jan, 1973)

These were the steps, which built a strong banking sector in Pakistan. This is also obvious from
the facts that by 1973 there were almost 10 foreign banks were working in Pakistan and all over
deposit position was around Rs.2300 crore (23,000million). A bird eye view of 5 top banks was
as given below:

Banks Positions in 1973 in Pakistan

NAME OF BANK NO. OF BRANCHES DEPOSITS
(RS IN
MILLION)
HBL 667 6,160
NBP 579 5,660
UBL 497 5,679
MCB 506 1,640
ABL 145 570

Nationalization period

January 01, 1974 all Pakistani banks were nationalized through Nationalization Act
1974. Under this law all Pakistani banks became a public property. All small banks
were merged in bigger banks to create 5 major Pakistani banks Pakistani banks. These banks
were to control by Pakistan Banking Council. There are still controversies about this act of
government as whether it contributed in success of failure of banks.
However the major changes after nationalization were as follows:
 Working of banks was extended to under developed areas.
 Market expansion for credit and deposits.
 7

 Decrease in service level of bank officers.

 Decrease in profitability as well
However the effect of expansion was enormous and it can also be depicted with the help of
table 2 which shows the deposit & branch positions of different nationalized banks.

Banks Position in 1992

Name of Bank No. of Branches Deposits
(Rs in million)
HBL 1926 153,431
NBP 1448 128,679
UBL 1684 87,482
MCB 1288 50,013
ABL 750 33,757
Total 7096 453,362

Post nationalization era:

In 1990 the government decided to denationalize all the nationalized institutes. Some was also
suggested in banking sector. For this purpose, amendments were made to Nationalization Act
1974 and two nationalized banks were privatized. Along with this a permission to open banks in
private sector was also granted. The rules regarding establishment of new banks and for
incoming foreign banks were also relaxed.

The- privatized banks are;

a) MCB taken up by a private group in April, 1991

b) ABL taken up by its own employees in September, 1991.

c) UBL taken up by UAE party in 2002.

d) December 29, 2003 HBL was taken by AKFED

After these changes a large number of private and foreign banks started their operations in
Pakistan and the present status can be seen from the following figure:

Internship Report
6
Habib Bank Limited
 8

the historical background of

Banking & Financial sector
which is the one in which
great improvement and
growth is observed since the
formation of Pakistan. For
studying the growth of this
sector we can divide it into
three stages, which are as
follows:
a) Pre-Nationalization Era
b) Nationalization Era
c) Post Nationalization Era
a) Pre Nationalization
period:
 9

There were only two Muslim

banks in Indo Pak before
partition; they were
.Habib Bank Ltd. (est. in 1941
at Bombay) & Australia Bank
Ltd. (est. In 1944 at
Lahore). All other banks, at that
time, were either owned by
Hindus or Foreigners.
At the time of partition there
were 631 bank branches in area
which came
under Pakistani control. But due
to blood shed and violence at
large scale, mostly
 10

branches were closed and the

disparity can be assessed from
the fact that on July
1948 there were 195 branches
with deposits of Rs.88 crore
(880 million) only. Also a
factor lagging in Pakistani
industry was a central bank
of its own, by that time
Reserve Bank of India was
acting as central bank for both
countries and same
currency notes were used in
both territories. But Reserve
Bank of India was biased
 11

and Set down Pakistan on many

occasions such as the issue of
funds transfer et
Structure of Financial Sector in Pakistan

NBFIs
Scheduled Banks Modarbas
(47) Leasing Companies
Commercial Banks Mutual Funds
Specialized Banks Specialized financial DFIs
Investment Banks
Housing Finance Companies

Specialized Banks Commercial Banks

Foreign Banks Domestic Banks

About Habib Bank Limited:

HBL was the first commercial bank to be established in Pakistan in 1947. Over the years, HBL
has grown its branch network and become the largest private sector bank with over 1,450
branches across the country and a customer base exceeding five million relationships. With a
presence in 25 countries, subsidiaries in Hong Kong and the UK, affiliates in Nepal, Nigeria,
Kenya and Kyrgyzstan and representative offices in Iran and China, HBL is also the largest
 12

domestic multinational. The Bank is expanding its presence in principal international markets
including the UK, UAE, South and Central Asia, Africa and the Far East. Key areas of
operations encompass product offerings and services in Retail Banking. HBL has the largest
Corporate Banking portfolio in Pakistan with an active Investment Banking arm.
SME and Agriculture lending programs and banking services are offered in urban and rural
centers. In the UK and GCC, HBL focuses on trade finance and remittances for the South Asian
Diaspora in addition to basic banking facilities. HBL has always been a bank and a brand for the
masses, with a history that is inextricably linked with the history of Pakistan itself. As it
continues to grow, both locally and abroad, it strives to embody its brand personality: honest,
approachable, and inclusive. HBL is currently rated AA+ (Long term) and A1+ (Short term)*. It
is the first Pakistani bank to raise Tier II Capital from external sources.

History and Background

Habib Bank Limited was established by Mr. Ismail Habib (Late) on August 25, 1942 at Bombay.
It was the first Muslim Bank of the sub-continent. It was established with a paid up capital of Rs.
2.5 million. At an early stage, the number of its branches was only 12.
HBL established operations in Pakistan in 1947 and moved its head office to Karachi. Our first
international branch was established in Colombo, Sri Lanka in 1951 and Habib Bank Plaza was
built in 1972 to commemorate the bank’s 25thAnniversary. With a domestic market share of
over 40%, HBL was nationalized in1974 and it continued to dominate the commercial banking
sector with a major market share in inward foreign remittances (55%) and loans to small
industries, traders and farmers. International operations were expanded to include the USA,
Singapore, Oman, Belgium, Seychelles and Maldives and the Netherlands.

Vision, Mission and Values:

Vision Mission
Enabling people to advance with To make our customers prosper, our staff
confidence and success. excel and create value for shareholders.

Values
Our values are the fundamental principles that define our
culture and are brought to life in our attitude and behaviors. It
is these values that make us unique and unmistakable.
 13

Board of Directors:

PRESIDENT

BOARD OF DIRECTORS

MEMBER EXECUTIVE BOARD

REGIONAL CHIEF

ZONAL CHIEF

BRANCH MANAGERS

Designation:

President Senior Executive Vice President (SEVP) Senior Vice President (SVP)

Vice President (VP) Assistant Vice President (AVP) Officers Grade I

Officers Grade II Officers Grade III Cashier Clerks Peon

 14

Corporate Information:
Head Office
HBL Plaza
I. I. Chundrigar Road Karachi-
75650, Pakistan. Tel : +92
(21) 2418000 [50 lines]Fax : +92
(21) 9217511
Registered Office
4th Floor, Habib Bank Tower
Jinnah Avenue
Islamabad, Pakistan.
Tel: +92 (51) 2872203
Fax: +92 (51) 2872205

Registrars
THK Associates (Pvt.) Ltd.
Ground Floor, State Life Bldg No. 3
Dr. Ziauddin Ahmed Road
Karachi, Pakistan.
Tel: +92 (21) 111-000-32

Websites
Corporate website:
www.hbl.com
Treasury website:
www.hblgtr.com.pk

Ebank (internet banking):

www.hblebank.com

Auditors
KPMG Taseer Hadi & Co.
Chartered Accountants
 15

SWOT Analysis:

External
Internal

Strengths Oppertunities

Weaknesses Threats

Strengths:
Strength can be defined as an area where a company is best at doing something
or a feature that puts the company at an advantage in comparison to its competitors. HBL enjoys
the following strengths:

 HABIB BANK is a well-established bank enjoying long history of over 65 years of

experience.
 HBL is the largest private bank in Pakistan now and people trust is very high.
 It has the largest branch network among private banks of Pakistan.
 HBL has been very effective in controlling costs as it successfully restructured itself after
its privatization. During this process more than 1,600 employees were relieved under a
golden handshake scheme and 110 branches were closed.
 Excellent branches appearance gives an edge to HBL over other banks. The branches are
well furnished even in less developed areas where other banks’ branches give a poor
view.
 16

 HBL has the ability to bring innovative products and services like personalized service,
electronic funds Transfer, sophisticated financial products such as electronic banking,
auto-teller machines and evening banking.
 The Bank’s Rupee Traveler Cheque have been market leaders for the past six years.
 HBL’s car to car financing scheme is unique in auto loan segment.
 Habib bank is an internationally recognized name in banking services and products.
 HBL has forged strategic alliances with international banks for expanding its network
further, both locally and internationally.

Weaknesses:
A weakness is defined as an area in an organization where the organization is not as good at
doing something as its competitors or a thing which an organization lacks thus putting the
organization at disadvantage in comparison to its competitors. Based on the above definition,
HBL has the following weaknesses.

 Lack of communication between bank and customers about terms and condition of
products and services. Like centralization of Cheque book issuing process.
 Employees at branch level are not properly motivated to work by heart. They take the all
routine activities as a boring job.
 Most of the employees lack managerial training as they are not properly
educated. Due to seniority, they have moved up on the hierarchy line to
Grade-I, II or III positions having hardly bachelor degrees. This type of senior staff
cannot apply the modern and innovative techniques of management indecision making.
 Mission of HBL is not well defined.
 Though HBL is second largest bank in Pakistan, yet the fact remains that it is not market
leader as NBP. Its total assets are always less than NBP total assets.
 Now as it is a privatize bank that is why GOVERNAMENT support to HBL decreased as
it was in past.

Opportunities:
An opportunity can be defined as a change in external environment which if properly exploited
with the organizational strengths will result in enhanced sales, market share, or income. Using its
strengths, HBL can avail the following opportunities.

 E-Banking
 High Markup Rate
 Online Banking
 Corporate Banking Terminal (CBT)
 Automatic Teller Machine (ATM)
 Rate of Return
 17

Threats:
Threat can be defined as a change in external environment which if not met with proper
strategies will result in loss of revenues, market share, or income. In the context of HBL’s
external environment, the following potential threats exist

 Other private commercial bank with sound profitability is also a threat to HBL e.g. UBL,
Alfalah, MCB etc.
 The Rupee Travelers Cheque (RTC) sales volumes may be affected on
account of regulatory restriction imposed by SBP on issuance of large value
denominations.
 For the last of 2 to 3 years, Pakistan is facing economic and political instability which is a
big threat.
 Foreign banks are flourishing in field of consumer financing
 Afghan war and Iraq war has a deep effect on the economy of Pakistan, which has
affected HBL.
 Increased regulations from State Bank of Pakistan may affect its business.

Banking Department of HBL:

Various departments are working in all the branches of Habib bank to facilitate the customers.
Following are the banking departments functioning in HBL Qila Didar Singh Gujranwala
Branch.

1. Account opening department.

2. Cash department.
3. Credit department.
4. Lockers department.
5. Bill clearing department.
6. Foreign exchange department.
7. I.T department.

Account Opening Details:

Basic function of the accounts department is to open new account and facilitate the customer for
the account opening purpose. There are certain formalities which are to be observed for opening
of an account with a Bank. These formalities in brief are asunder:

FORMAL APPLICATION:
Bank Limited The customer is to fill "Account Opening Form. It is a formal request by a
customer to the bank to allow him to have and operate the account.
 18

Documents require for opening an account:

 Copy of CNIC
 Service certificate or student card.
 Utility bill
 Provisional receipt
 KYC (Know Your Customer)

SPECIMEN SIGNATURE:
When the Banker is satisfied about the integrity of the customer, he agrees to open the account.
The Banker obtains the specimen signatures of the customer on the signature book or on card.

Posting the account on the system:

After that officer has to post the new account on computer system for further
processing. During the process customer id and account number is generated. New account
remains active for one day after that it is blocked by the head office until CNIC of the customer
is verified from NADRA.

Cheque book issuing:

After the CNIC verification account opening officer has to issue a Cheque book to customer so
that he can be able to make withdrawal from his account. Now a day in Habib bank Cheque book
issuing process is centralized that take 06 days to complete.

Products and services of Habib Bank Limited:

1. Types of Accounts:
 Current Accounts
o HBL business Value Account
o Current Account
o Basic Banking Account
 Savings Account
o HBL Value Account
o PLS-Savings Account
o Remittance Munafa Plus Savings Account
o Daily Munafa Account
oDaily Progressive Account
 Terms Account
o HBL Advantage Account
 Foreign Currency Account
o FC-SB
o HYFFD
 19

2. HBL Car Loan

3. HBL Credit Card
4. HBL Debit Card
5. HBL Personal Loan
6. HBL Phone Banking
7. HBL Banc assurance
8. Lockers
9. HBL Corporate Banking
10. HBL Commercial Banking
11. HBL Zarai Banking
12. Islamic Banking

Memberships of Industry Associations and Trade Bodies

 Pakistan Banks Association.
 Pakistan Business Council.
 Institute of Bankers Pakistan.
 Pakistan Institute of Corporate Governance.
 Karachi Center for Dispute Resolution.

 HBL has a total asset size of USD 24 billion

(FY’20).
 20

Title:
HBL Management System

Scope:
“The scope of HBL Management System (MS) includes the information
of all Customers, officers, Managers, Accounts which include deposit
Account, Transactions, Loan Accounts and Interest Carried in HBL
Branch Qila Didar Singh, Gujranwala".

Relationships:
 Customer Has Account
 Officer Create Account
 Account can be Deposit Account
 Customer Request for Transaction
 Officer Request for Transaction
 Officer Makes Loan Account
 Loan Account Approved by Manager
 Manager Updates the Interest
 21

 Officer Governs the Manager

Entities and Attributes:

 22

ER Diagram: