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An Internship Report


Submitted By: FAIZA TARIQ

Roll No: 3236
Session: 2007-2011

Department of Management Sciences

Lahore College for Women University

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Directors from international financial institution to open the market and involve the
private sector in the economy of the country got the leading investors from private
sector and one of them was the “Rupali Group”. This group belongs to “Feerasta
Family”. This group started its business before 1971 partition of East Pakistan and
come to West Pakistan after 1971.
SONERI BANK LTD was incorporated on 28th September 1991, the first branch in
Lahore was opened in 16th April 1992 and second branch in Karachi came into
business on 9th May 1992. The head office is in Lahore and the central office is in
The authorized and subscription capital is Rs.300 million Out of which Rs.150 was
million was distributed by Feerasta Family and Rs.150 million worth share was offer
to general public.
There was over subscription of 28 times more than the number of shares offer for
subscription and the over subscription NRPs was 3 times more. The bank currently
operates 170 branches, spread all over Pakistan including the Northern Areas of the
country. The bank’s expansion policy is based on the principle of maintaining a
balance between the urban and rural areas. This created its own challenges and
opportunities, and forced them to evolve an outward-looking strategy in terms of their
market emphasis.
As a result, Soneri Bank developed a geographically diversified assets base instead of
a concentrated and heavy reliance on business in the major commercial centers of
Karachi and Lahore, where most other banks have their operational Head Offices.
Pleasant and sophisticated atmosphere has been provided in the branches which are
fully air conditioned and computerized.
The bank after eight months of functioning published its first Balance Sheet as on 31 st
December, 1992 responding with great satisfaction to the confidence reposed in it by
its shareholders.
Among the new banks, Soneri is a front runner and continuous to make rapid strides
in respect of deposits. The bank is now in the process of consolidation with ‘care and

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caution’ and steady growth on sound footings with best possible services for its
customers as the guiding principles.
The Rupali Group has an investment of more than Rs.10 billion in industrial sector
other than “SONERI BANK LTD”.

History of Rupali Group:

They started their business in 1948. There basic business is “Polyester Fiber” the one
of the largest facilities in Pakistan. Their policy is “To grow on strength of quality and
In 1956, the group started a business and launched their product with the name of
“Consul Stock”. In 1969; they formed “Wooden Spool Manufacturing Co Ltd”.
Collaboration with Japanese company in 1971, the group shifted to West Pakistan and
established “Rupali Nylon Pvt Ltd” and was the sole agent of “Toray” of Japan in
Pakistan. In 1980, the local production “polyester Filament Yarn” started with the
name of “Rupali Polyester Ltd”. In 1968, another project of “Textorium Ltd” was
started which deal in textarized element.

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Soneri bank Limited is engaged in banking service, and operate more than 170
branches including Islamic Banking Branches in Pakistan. The bank operates in four
segment corporate finance, trading and sales, retail banking and commercial banking.
Corporate finance includes syndicated financing and services provided in connection
with mergers and acquisitions, underwriting, privatization, securitizations, debt,
equity, syndication, Initial public offers (IPO) and secondary private placement.
Trading and sale segment includes fixed income, equity, foreign exchange,
commodities, credit, funding, own position securities, brokerage debt and prime
brokerage. Retail banking segment includes retail lending and deposit, banking
services, private lending and deposit, trust and estates investment advice and
merchant/ commercial/ corporate cards. Commercial banking includes project finance,
real estate, export finance, trade finance, factoring and leasing. The essence of the
bank’s business philosophy is to cater to the banking requirements of small &
medium sized entrepreneurs, providing them qualitative & competitive services with
emphasis on encouraging exports. Nearly forty percent of our credit portfolio is
related to export financing and credit decisions are taken within 48 hours.
Date Establish:
September 28, 1991
Mr. Alauddin Feerasta
Representative Officer
Tasaduq Gardezi

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Corporate Data:
Board of directors:
Mr. Alauddin Feerasta

Chief Executive Officer

Mr. Safar Ali K.Lakhani

Mr. Nooruddin Feerasta
Mr.Inam Elahi
Mr. S. Ali Zafar
Mr.Shahid Anwar (NIT Nominee)
Mr. Abdul Hayee
Mr. Manzoor Ahmad (NIT Nominee)

Audit Committee
Mr. Nooruddin Feerasta Chairman
Mr. S. Ali Zafar (Member)
Mr. Abdul Hayee (Member/Secretary)

Company Secretary
Mr. Muhammad Altaf Butt

KPMG Taseer Hadi & Co.
Chartered Accountants

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Legal Advisors
Manan Associates, Advocates

Registered Office


UAN: (021) 111-000-322
FAX: (021) 3565 5595

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“To provide quality services to its customers through adoption of best practices and
full exploitation of I.T advancement, culminating at a leading position amongst its
peer banks”

“Stronger banking relationships, increasing customer confidence”

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“To develop Soneri Bank Limited into an aggressive and dynamic financial institution
having the capabilities to provide personalized service to the customers with cutting
edge technology and a wide range of products, and during the process to ensure
maximum return on assets with ultimate goal of serving the economy and society”.

“We have more time for you”

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Principles for achieving goals:
Soneri Bank has defined the following principles for achieving goals which are set by
the board of Directors for the smooth running of the affairs of the Bank. These
principles are as follows:
• Fully aware of the role, responsibilities, roles, regulations and procedure of the
• Courteous, Quality and efficient services to the services.
• Knowledge about the product.
• Ensure that the time and effects are applied in the most judicious and
productive manner.
• Seeking guidance in serious and complex issue.
• Maintain complete secrecy of the bank and the customer.
• Insure complete adherence to the bank standard code of conduct.
The board would like to record its appreciation for loyalty, devotion and hard work of
the officers and staff of the bank at all level.

“We cannot successfully achieve our goals even if we have all the resources and
instruments at our disposal unless we change our values and attitudes”. The values
which each staff member should inculcate and practice are:
• Personal and professional integrity of highest standards.
• Trust and sense of responsibility
• Team work, collaboration and open communication.
• Honest and candidate feedback.
• Serving the clients with courtesy, respect and competence.

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Business philosophy:
The essence of their business philosophy is to cater the
• Banking requirements of small and medium size entrepreneurs.
• To provide technical and financial assistances to SMEs.
• To take steps in order to promote growth of local enterprises.
• To help important substitute industry.
• Providing them qualitative and competitive services with the emphasis of
encouraging exports.
Nearly 40% of their credit portfolio is related to export financing and credit decisions
are taken within 48 hours that is they say:
“We have more time for you”
“From knowing our customers’ requirements to understand employee needs, from
utilizing modern technology to making responsible social contributions, from
enhancing stake-holders’ value to practicing corporate ethics. We are continuously
and consistently striving to address newer challenges with a single motivation- the
power to inspire and be inspired”.
These philosophies of SONERI BANK will helped in stimulating growth in rural and
backward areas.
In addition of providing support to small & medium enterprise it also extends
different facilities to its clients. Besides providing term loans and finances it holds
deposit, arrange remittances and perform L.C business (Letter of Credit).

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Various Roles of Banks:

i- The Intermediation Role:

Transforming savings received primarily from households into credit (loans) for
business firm and others to make investments in new buildings, equipment, and other
capital goods.

ii- The Payments Role:

Carrying out payments for goods and services on behalf of their customers (such as by
issuing and clearing checks, wiring funds, dispensing currency and coin, etc.

iii- Role as a Guarantor:

Standing behind their customs to pay off customer debts when those customers are
unable to pay (such as by issuing letters of credit to support international trade and to
back customer issues of commercial paper), which makes it both easier and cheaper
for a bank’s customers to obtain credit elsewhere in the financial marketplace.

iv- The Agency Role:

Acting on behalf of customers to manage and protect their property or issue and
redeem a customer’s securities (usually provided through the bank’s trust

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v- The Policy Role:
Serving as a conduct for government policy in attempting to regulate the growth of
the economy and pursue social goals.

Credit rating:
The Pakistan Credit Rating Agency Limited (PARCA) has maintained bank s long-
term and short-term entity ratings at AA- and A1+ respectively and A+ for the Term
Finance Certificates. These ratings denote a very strong capacity for the timely
payment of financial commitments.
The Soneri Bank Limited long term rating increased to AA- and A1+ in the short
term. These ratings have been assigned by PACRA, Pakistan’s Leading rating agency.
These rating denote better risk absorption capacity stemming from enhanced equity as
well as well-maintained credit portfolio.

Rating Definitions:
Obligations supported by the highest capacity for timely repayment.


‘AA’ ratings denote a very low expectation of credit risk, the capacity for timely
payment of financial commitments. This capacity is not significantly vulnerable to
foreseeable events.

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Organizational Chart:
Network vise:







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Organizational Chart:
Designation Vice:




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Departmental Chart:

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Company Description:

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Soneri Bank Limited provides a range of banking products and services in Pakistan.
The company operates through four segments: Corporate Finance, Trading and Sales,
Retail Banking, and Commercial Banking. The Corporate Finance segment provides
syndicate financing; and services in connection with mergers and acquisition,
underwriting, privatization, securitization, research, debts, equity, syndication, IPO,
and secondary private placements. The Trading and Sales segment includes fixed
income, equity, foreign exchanges, commodities, credit, funding, lending and repos,
brokerage debt, and prime brokerage services. The Retail Banking segment offers
retail lending and deposits, banking services, trust and estates, private lending and
deposits, trust and estates investment advice, merchant/commercial/corporate cards,
and private labels and retail services. The Commercial Banking segment includes
project finance, real estate, export finance, trade finance, and factoring, leasing,
lending, guarantees, bills of exchange, and deposits services. In addition, it provides
Islamic banking and electronic banking services. The company offers its products and
services through a network of 170 branches and 177 automated teller machines.
Soneri Bank Limited was incorporated in 1991 and is based in Lahore, Pakistan.

Business Description:

Soneri Bank Limited (the bank) is engaged in banking services, and operates 170
branches in Pakistan. The Bank operates in four segments. Corporate banking
includes syndicated financing and services provided in connection with mergers and
acquisition, underwriting, privatization, securitization, research, debts, equity,
syndication, initial public offering (IPO) and secondary private placements. Trading
and sales includes fixed income, equity, foreign exchanges, commodities, credit,
funding, own position securities, lending and repos, brokerage debt and prime
brokerage. Retail banking includes retail lending and deposits, banking services, trust
and estates, private lending and deposits, banking service, trust and
estates investment advice, merchant / commercial / corporate cards and private labels
and retail. Commercial banking includes project finance, real estate, export finance,
trade finance, factoring, leasing, lending, guarantees, bills of exchange and deposits.

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Recent results of FY09 :
SNBL posted a profit after tax (PAT) of Rs 145 million in FY09, which was 79.27%
lower than the previous year mainly due to large amounts of provisions for diminution
in the value of investments and loss on sale of securities which grew by 1184.89%
and 4439.92% in FY09. Also, the net interest revenue dropped by 7.13% in FY09 as
interest expenses grew by 35.35% while interest income grew only by 19.36%. This
increase in interest expenses can be attributed to the 19.33% rise in the deposits.

Corporate profile:
Soneri Bank Limited:
An overview:
SONERI BANK LTD is one of the new commercial banks which were granted
permission on 26th August 1991 to be established in the private sector. This bold step
of the government was a part of the program to strengthen the process of financial
reforms and promote savings and investment. SONERI BANK LTD has a number of
policies, regulatory and fiduciary responsibilities aimed at strengthening the financial
sector of the country that fosters the economic growth. Their basic responsibilities are
to provide a support to small and medium enterprise (SMEs) because they provide
cheap raw material for large scale industries and also process by-product of these
industries. So as to produce useful products from waste matters.
Over the years SONERI BANK has evolved through various stages and shows a
steady growth in all fields and shows a good response from all the branches. Financial
sector reforms program has continued and shows encouraging results extremely
important and encouraging aspects of these reforms is that they are based on liquidity
position i.e. on a Mark-up rates with the increase in interest rates savings increases
and investments decreases and vice versa.

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Functions and services:
SONERI BANK performs primary, secondary and development functions.
PRIMARY FUNCTIONS includes those which form the basis of commercial banks
operations. These functions are central in nature and are the core of the whole
operations of the bank, which includes the Acceptance of the Deposits, Advancing
loans Soneri bank advances loans in the form of overdraft, discounting bills of
exchange, loans, cash credit & consumer financing. SECONDARY FUNCTIONS
includes agency functions such as collection of dividends & cheques, selling &
purchasing of securities, obeying standing instructions, Executor or trustee, funds
transfer and Agent/Representatives and General Utility service Providing Lockers,
Issuance of Credit Instruments, Providing Trade information, Financing Foreign
Trade, Export Promotion cells and LC operations. In addition to these the also
assumes important development roles. In the present day world, they stay close to
central bank and play their role in achieving the economic targets set by the
government. They help the State Bank in to implement effectively the desire
monetary and fiscal policies and provide assistance to state bank in promoting the
growth of the sectors such as SMEs, Housing & IT. They also provide help in the
promotion of agricultural sectors. Moreover they take essential steps to generate
savings, than they chalk out policies to mobilize such savings and in the end they
ensure their usage in the productive and creative ways.

Development Roles:
SONERI BANK enjoys the crucial position in the financial sectors of the economy.
They perform number of development roles as a responsible member of a private
banking sector. These roles vary from Capital Formation to Expansion of Credit,
Optimum Utilization of resources.

The boards of directors are appointed in the election which is held among

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Shareholders who receive the highest vote will be elected as the directors of the bank.
Soneri Bank now includes eight members.
SONERI BANK has established its head office at Karachi, which comprise of the
following departments:
1. Administration Department
2. Accounts Department
3. Internal Audit Department
4. Exchange policy Department
5. Foreign Exchange Adjudication Department
6. Internal Banking security Department
This branch is currently divided into many departments which are further sub divided
into different sub departments e.g. general Banking includes Clearing Department,
Accounts department, Cash department etc. IT support is also available.

Corporate Governance:
There has been a conscious, concerted effort to make the decision making process at
the Soneri Bank more structured, inclusive and result oriented while the board of
directors which is assisted by various sub committees performs the policy formulation
& oversight functions.

Board of directors:
Mr. Alauddin Feerasta Chairman
Mr. Safar Ali Chief Executive Officer
Mr. Nooruddin Feerasta Director
Mr. S. Ali Zafar Director
Mr. Abdul Hayee Director
Mr. Shahid Anwar Director
Mr. Manzoor Ahmad Director
As in other organizations, the board of directors in the Soneri provides the overall
policy framework, guidelines & directions to conduct the bank’s business.

Management Teams:

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Decision-Making at the management level has been decentralized. The corporate
management team acts as the principal forum for debate and decision on critical
operational issues affecting the quality of work at the institutional level. The corporate
management teams are headed by Board of Directors and consist of Executives
directors, Economic Advisors etc.
The terms of the reference of the corporate management teams provides it to be a
forum to:
• Holds formal, regular interactions and discussions amongst senior
• Serve as policy incubator.
• Enable and facilitate collective & informed, Strategic decision making.
• Monitor change management process and activities.
The directions and guidelines framed by the corporate management teams trickle
down to the other decision-making forums describes above and eventually reached the
relevant division and the individual workers entrusted with the job of ensuring

Training Delivery Center:

The training delivery center at Karachi is looked after by a Resident Director, who
reports to the Managing Director.
• The institute is reposed with the following core functions:
• To design, develop and deliver training program.
• To develop training handbooks and training manuals for training programs.
• To support research in the area of economics, banking, finance and change
• To acquire, collate and disseminate knowledge in the areas of change
management and restructuring of the financial institutions.
Restructuring of financial sector through various policy decisions:
Restructuring of financial sector through various major policy Decisions, has brought
in its wake an intensive regulatory and monitoring Role of the State Bank of Pakistan.

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Prudential Regulations were introduced for Scheduled banks, credit ceiling was
abolished and the level of credit was directly related to deposit. Refinance facility was
revamped to compel the commercial banks to utilized their own resources instead of
remaining dependent on borrowing from SBP.
These changes in regulations may bring fruitful results, when the new Private Banks
are in stage of formation, but these regulations also have created many problems and
has smoothly adopted their operations to the regulatory requirements.

Prudential Regulations:
State Bank of Pakistan has introduced the following prudential regulations for the

1. Limit on exposure to single person.

• The total outstanding financing facilities by banking company to any single
person shall not, at any point in time exceed 30% of the bank’s un-impaired
capital and reserves.
• The maximum outstanding fund based financing facility does not exceed 20%
of the un-impaired capita and reserves.
• Bank shall not make any loans or advances against the security of its own
• Bank shall not grant un-secured loans and advances on the guarantee of any of
its directors or any family member of the director or its chief executives and
its share holders holding 50% or more of share capital of bank.
• Bank shall not make loans or advances to any of its directors or to individuals,
firms or companies in which it or any of its directors is interested as partners,

2. Limit on bank’s exposure against contingent Liabilities.

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• Contingent liabilities of a bank shall not exceed at any point in time 10 times
of its paid up capital. In general reserves, free of losses (10 times of equity).
Liabilities Excluded from Contingent Liabilities
• Bills for Collection
• Forward foreign exchange contract
• Obligations under L/C and L/G to the extent of cash margin retained by bank.
• Letter of credit and guarantees issued on the behalf of federal/provincial
• Weighted of 50% shall be given to Bid Bonds, mobilization, advances and
performance bonds.

3. Limit on Bank’s Exposure against Un-secured Loans/Advances.

 No bank shall provide financing facility in any form of a sum exceeding Rs.
100,000 and in case of credit cards, Rs. 500,000 to any one individual without
obtaining realizable securities.
 Against personal guarantees, for this purpose, following shall be excluded
from par party limit of Rs. 100, 00 on clean facilities.
• Facilities provided to finance the export of commodities eligible under export
finance schemes.
• Financing covered by the export credit guarantee insurance schemes.
• Loans and advances given to employees of a bank in accordance with their
• Loans and advances exempted by the SBP from time to time.
 The aggregate exposure of the bank against all its clean facilities shall not, at
any point in time exceed amount of bank’s capital and general reserve free of
losses (capital + reserves – losses).

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4- Linkage between Borrower’s Equity & Total Borrowing from Banks:
 While granting any accommodation bank shall ensure that total
accommodation availed by any borrower from banks and financial institutions
does not exceed 10 times of borrowers equity as disclosed in its audited
 In case of negative equity, borrower is eligible to borrow 10 times of fresh
equity, he is prepared to inject.
 Non-fund based finance is not included.
 Sub-ordinate loans are conditionally considered part of equity if directors
undertake to not demand payment of loan, unless bank’s loan is re-paid.
 Every bank shall obtained the copy of accounts to the business of each of its
borrower for analyzing the records in the following manner:
• Where the bank’s exposure does not exceeds Rs. 2 million, than accounts that
are signed by the borrower are accepted.
• Where the exposure exceeds Rs. 2 million but does not exceeds Rs. 10 million,
accounts duly signed by the borrowers and counter signed by the internal
auditor of the bank, in case of borrower other than a public company or a
private company which is a subsidiary of a public company.
• Where the exposure exceeds Rs. 10 million, the account duly signed by the
practicing CA or a practicing CMA in case of a borrower other than a public
company or a Pvt. Company which is a subsidiary of public company.

4. Maintaining Current & Debt Equity ratios.

 While granting or renewing financing facilities bank shall ensure that the
current assets to current liabilities of the borrower must not be lower than 1:1.
 Current maturities of Long-term debts not yet due for payment, and excluded
from current liabilities for the purpose of calculation of current ratio.
 Lease rental receivables for the next 12 months as disclosed notes to the
annual audited account shall be treated as current assets for the purpose of
calculations of this ratio.

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 Fresh or additional facilities in the form of long term debts shall be provided
on the basis of debt equity ratio which must be 0:40 or as laid down by the
government. The ratio laid down by the government shall apply.
LTD/LTD + Equity X 100
Financing facilities against the individual borrowers, not exceed Rs. 500,000 per
borrower, shall be exempt from the application of regulation.

5. Financing facilities against Shares.

 Banks shall not provide un-secured credit to finance subscription towards
floatation of share capital of public Ltd. Companies.
 Banks shall not allow financing facilities whether funds based or Non-funds
based, against the share of the companied not listed in stock exchange.
 Banks shall not provide financing to any one person against shares of any
commercial bank in excess of 5% of paid-up capital.
 Banks neither shall nor provide financing facility against the share of
companies that are not in the central depositing system.
 Facilities against the share of listed companies shall be subject minimum
margin of 25% of their average market value of the preceding 12 months.
Banks are however, free to set higher margins requirement keeping in view
other factors.

Policy formation process:

There has been a conscious, concerted effort to make the decision making process at
the Soneri Bank more structured, inclusive and result oriented while the board of
directors which is assigned by various sub committees perform the policy formulation
& oversight functions. Thus the policy formulation process at the SONERI BANK is
controlled by the Board of Directors and policies are prepared with a view to improve
the financial position of the small & medium enterprises and so other financial issues.
These policies are made in the general meetings suggestions by the employees are
transferred up to the hierarchy level and are discussed at the meetings suggestions by
the employees are transferred up to the hierarchy level and are discussed at the

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meetings of the Board of Directors. So the basic area of emphasis for the Soneri Bank
is to strengthen the small & medium enterprise (SMEs).

Learning Organization:
To become successful and gain a competitive advantage organization today are
moving towards learning organizations. This concept is usually attributed to the work
of Chris Argyris and his colleagues.
Soneri Bank Limited being the leading bank of the world today posses the qualities of
learning organization. The band is characterized by human oriented cultural values
such as:
1. Everyone is a source of useful idea.
2. The people closest to the problem have the best ideas regarding its solution.
3. Learning flows up and down the hierarchy.
4. New ideas are encouraged.
In soneri Bank Limited they have a systematic manner of handling things and people
by which we can say that they do posses qualities of a learning organization e.g.
1) Soneri Bank Limited looks at things differently, focusing worldwide with
leadership style.
2) Soneri Bank Limited has a group of people running the human resources
department identification the sources of conflicts and encouraging their
energies toward the substance of disagreement rather than toward personality
clashed or political infighting.
3) Soneri Bank Limited is the only bank with such a level of creativity in its staff
having flexibility and a willingness to take risk.
4) In case of conflicts in Soneri Bank Limited the personnel’s are asked to look at
interpersonal relations over a long time dimension and to repair these
relationships quickly through discussion of the sources of misunderstanding,
refusal to assign individual blame and maintain a level of confidence and trust
among each other.

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How to increase the profit of SBL?

• Minimization of cost
• Attract more CD accounts ( no interest is paid )
• New products launched
• Increase in Remittance
• Efficient use of stationary
• Management of cash

Managerial policies:
SONERI BANK established in 1992 when the government of Pakistan has taken a
bold step in the liberalization of banking in private Sector. This action of the
government of Pakistan has played a wide vital role in boosting up the economy. In
order to lend a hand to government of Pakistan the SONERI BANK formulated its

• Enhancement of saving level in the economy. Particularly in the middle class

of the society in order to generate funds and to accelerate the investment level
in the economy.
• Soneri Bank’s main area of emphasis is concerned with middle class business
to the fulfillment of their working capital requirement.
• Strategy to inject the cash flow in the country in order to generate the
economic activities of the country.
• Encouragement of export oriented business to make the balance of payment
• Supporting of SME business class to provide them financial support. And
financially facilitate them as the main proportion of the economy is consists of
SME and its crucial importance in order to enhance the employment level in
the country.

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• Expanding of banking network in rural areas as well. So that the common
areas must also be benefited.
• Encouragement of trade & finance activities pertaining to SMEs.

Research and economic policies:

• Annual report on the working of the bank.
• Appointment of outside consultants to conduct a study on the annual growth
rate of the bank.
• Development of credit plans.
Assets and liabilities in foreign currencies are translated into Rupees at the rate of
exchange approximating those prevailing at the balance sheet date except those
covered by forward exchange contacts which are converted at contracted rates. Gain
and losses on translation are deal with through the profit and loss account. Forward
exchange fee are charged in the year in which the contracts are entered into by the

Deposit Taking:
Monthly income deposit scheme under profit & loss sharing arrangements has been
floated, which has received overwhelming response:
Following types of accounts are presently offered by SONERI BANK LIMITED.
• Current account can be opened with a minimum deposit of Rs.500 by
individuals and firms.
• Saving account: Based on profit & loss sharing system the account can be
opened with a minimum deposit of Rs.100.
• Student saving-cum-finance account.
• Women’s own saving account.
• Instant profit saving certificate.
• Special notice deposits are excusable on (a) expiry of 7 days or more (b) 30
days or more and minimum deposit acceptable is Rs.1000/-

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• Term deposit of duration ranging from 3 months to 5 years. Minimum deposit
acceptable is Rs.1000/-
• Call deposits.
• Foreign currency saving account.
• Foreign currency Term Deposits.
• Non-resident accounts for non-resident Pakistanis.
• Hyper profit running accounts.
• Deposit multiplier certificates.
• Lockers facility being provided at most of the branches of Soneri Bank

Financing and investment:

Confessionals credit is available through following schemes of the bank.
• Small loan scheme for micro businesses with a maximum limit of Rs.25000.
Available at a mark-up rate of 12% against either 2 personal guarantees or
through group guarantees.
• Small loan scheme for commercial, industrial & agricultural purposes. (These
are available on confessionals rate of mark-up prescribed by the State Bank of
• Export financing scheme(part I and II @6% mark-up)
• Fixed industrial financing.
• Financing for locally manufactured machinery.
• Project financing.
• Shelter less financing schemes.

Accounting Policies:
Accounting convention:
These accounts have been prepared under the historical of banking institutions in

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Staff retirement benefits:
The bank operates funded provident & unfunded pension schemes for the eligible
employees. Contributions to the provident fund scheme are made by the employees

Provision for taxation is based on taxation income at the current rates of taxation.
After taxation into account tax credits and debits available, if any.
The bank accounts for deferred using the liability method on all major timing
differences except where these are not likely to reverse in the foreseeable future.

Advances are stated net of provision had and doubtful debts. Provision is made for
had & doubtful debts in accordance with the requirements of State Bank of Pakistan.
Pakistanis prudential regulations at the year end.

Investments other then securities issued by federal and provincial Government are
stated at cost less provision for the decline, other than temporary, in value.

Operating fixed assets and depreciation:

Fixed assets are stated at cost less accumulated depreciation. Depreciation is charged
to income applying diminishing balance method expects on motor vehicles which are
depreciated on straight line method.

Revenue Recognition:
Mark-up/return on advances and investments is recognized on accrual basis, except
income which warrant carry forward in compliance with the prudential regulations of
the State Bank of Pakistan.

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Our people our assets:
At the Soneri Bank “We firmly believe that the principle source of our strength as an
organization is our human resource base. Managerial attention at the Bank has
therefore been focused on the need to continuously invest in people, provide them
with right incentives to perform better and to make merit and performance the criteria
for professional and career development. At the Soneri Bank, we strive to develop and
sustain a work environment in which each employee is empowered, is provided with
opportunities for professional growth and is recognized and rewarded for the
contributions made towards achievement of organizational objectives. We value
diversity in terms of the unique characteristics that each member of our tram brings to
the organization as reflected in diverse educational and professional backgrounds,
culture and gender perspectives. This mix positively impacts institutional approach
and decision process by providing broadens horizon, helping along the way the
institution to be a more aware and responsive organization”.

The Business Planning:

Business planning was a traditionally undertaken every year with performance
evaluation of department/individuals and variance of budgeted cost vs. actual at the
corporate level.

Planning Environment:
Vision: The process of planning begins with the department of a vision of the
institution. Every employee of the bank owns this vision and departments have
developed departmental vision in alignment with the institutional vision statement.
Strategic/Corporate Plan: Strategic / corporate plans spans over a longer term which
normally is for 5 years and sets the direction of the institution. Typically the plan
covers the main functions and institutional initiatives.
Business Plan: It is a spin off of the strategic plan and cascades down to individual
departments and divisions. The plan covers a one year period and provides details of
resources requirements in terms of Manpower, IT, Training and space.

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The requirements worked out in Business Plans are translated into financial figures.
The Budgets provide a base for decision making in allocation and rationalization of

Performance Management System:

Performance Management System is an off shoot of Business Plan of a division which
is cascaded down to individuals.

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Planning framework Business Plan Integration at Roof Level:

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Vision Vision is a strategic statement; a driver of

Strategic/corporate Plan This is a comparatively a long term policy
guidelines and will not change over the years.
Strategic planning determines where an
organization is going over the next 5 years or
more and how it’s going to get there.
Typically the process of is organization-wide,
or focused on a major function.

Business Plan
Departmental & division:
The business Plan sets a direction for the
organization in terms of what activities its
constituents proposed to undertake.

System Departmental & Divisional:
Budget Financial resources, Fixed, Semi variable &


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Managerial Hierarchy:

Chief Executive Officer

Executive Vice president

Senior Vice president

Vice president

Group Vice President

Assistant Vice President


Deputy Manager

Assistant Manager


Deputy Officer


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Branch Hierarchy:

Chief/Branch Manager

Manager Operation


Deputy Managers

Assistant Managers


Deputy Officers

Assistant Officers

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Unity of Command:
The bureaucratic culture has developed a concept to unity of command in
management. Each office is informed about the offices and the managers to whom it
is to report and subsequently what are its subordinates. This brings a unity of
command and every one knows what he has to do and who is to check whatever he
has done.

1. Job description and responsibilities:

The main functions of each member working in the organization and the job
description for each of them is give below. This information is based on observation
during my internship and also provided by the respected staff of soneri Bank.

Chief Executive Officer:

Mr. Safar ALI K Lakhani is the Chief Executive Officer of the Bank. Hen supervises
the working of all departments and ensures smooth running of the branch.
Conservator with local business and credit conditions, his major task in consultation
with his GMs / AGMs, is lending his bank’s funds and credit to the businessman in
line with the policy set down by the board of directors. Small loans are deferment to
the director’s opinion but large loans are passed upon by the loan committee of the
board of directors. One of his major responsibilities is to get feed back and
suggestions from his staff members. For this purpose, he arranges meetings with

Chief Branch managers:

Chief branch manager is second in command. Each of them is in charge of a bank
division serving and supervising specialized areas of operations. The chief manager is
responsible for the following affairs:
• Branch affairs
• Corporate matters

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• Foreign trade
• Credits
• Increasing revenues and controlling expenses
• Create link between head office and branch
• Coordination’s between staff members
• Attracting and maintaining deposit
• Interaction with valued clients

Manager Operation:
The job description of manager operation includes:
• Responsibilities of operations matter and internal working
• Coordination’s between employees and customers
• Supervision of cash handling transaction
• Handling accounts matters
• Removing the grievances of employees
• Removing the complaints of the customers and meeting their demands.
• Smooth running of operational transaction on daily basis.
• Coordination with branch manager.
The manager operation is responsible for all sorts of operational matters of the bank.
Basically he/she is responsible for all the cash related transactions that are conducted
by all the operational departments of the bank like cash and deposits department and
accounts department. The manager operation is also responsible for customer
relations. It is the duty of the operation manager as the representative of the branch to
satisfy the customer and make them comfortable with the branch operation.

Foreign Exchange Officer:

All transactions related to international banking (i.e. dealings in foreign currency,
imports & exports) are under the control of Manager Foreign Exchange. He manages
his workings within the regulations formulated by State Bank of Pakistan. He is

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primarily responsible for submission of monthly returns to SBP and involved in the
following activities:
• Issuance of SSC’s
• Foreign cheques for collection (FCC)
• Foreign Demand draft (FDD)
• Foreign telegraphic transfer (FTT)
• Encashment
• US $ bonds

Accounts Manager:
Accounts Manager supervises the working of accounts i.e.
• Maintaining legers
• Closing books of accounts
• Preparation of periodic reports
• Electronic data processing
• Reconciliation with head office
• Act as administration
• Monitoring the expenses of the branch
• Salary payment
• Make contracts with suppliers, contractors and service providers
The accounts department is involved in making all the administrative and routine
expenses of the branch. The responsibility of records keeping and reconciliation with
the head office is one of the main duties of the accounts manager.
Head of Cash and Deposit Department:
The responsibilities of the deposit and cash manager involved:
• Receiving cash
• Payment of cash
• Signature verification
• Inter branch transaction
• Cash management

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• Issuance of demand draft, pay order, telegraphic transfer and call deposit
• Making On-line transactions
• Inspection of cash
• Conciliation of tax
Cash and deposit Manager is in charge for the domestic banking. The department of
cash and deposit department is basically related to the normal banking operations.
This department is related to the basic banking needs of the common man. Receipts
and payment of cash, cheques and other instructions are the main functions of this
department. The department head supervises his subordinates in all the above stated
functions of this department and makes necessary decisions regarding the proper
functioning of the department.

Manager Clearing:
The responsibilities of the clearing manager are:
• Inward and outward clearing
• Petty cash account
He is responsible for all inward, outward clearing and within bank transfers. One
junior clerk assists his to ensure timely operations. Manager clearing also controls
petty cash account. He keeps an eye on working of casual labor and handles the
matters regarding them.

2. Job Satisfaction:
Job satisfaction is a result of employee’s perception of how well their job provides
those things which are viewed as important. It is a pleasurable or positive emotional
state resulting from the appraisal of one’s job or job experience.

Cooperation among members:

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Most of the employees are agreed that there is cooperation between personnel in same
department or work group. During my internship at Soneri Bank I observed that there
are lots of coordination’s between different department and their heads.

Ability utilization:
The employees at Soneri think that the bank has make use of their abilities and their
job description makes full use of their qualification. This factor is very important in
determining the employee commitments and dedications towards his work. The
management of Soneri Bank has assigned jobs to people that match with their
qualification and experience. A few employees were not satisfied with their job

Policies by upper management are being communicated to the employees in a proper
way. Most of the employees are satisfied with the way their management discusses
and implement policies and strategies.

Employees are satisfied with the way they are being treated by their boss. They think
that their boss value their work and encourage them.

3. Job Rotation:
It means changing the job with in the for company variety after specified period of
time Soneri Bank Limited have a set format of transfer policy within the branch
between departments from branch to branch within Pakistan and even abroad. These
transfers are made usually on promotion. It gives a change to the employee with a
new explosive & opportunity to gain experience.

4. Job Engineering:

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It concentrates on the efficiency of the job through time and motion analysis and
person machine interfaces. Soneri Bank Limited is striving for increased efficiency
and effectiveness of every employee by providing him with PC (personal computer)
facility. So the tasks which were previously done manually now can be completed in a
better way through computers.

Motivation is a process that starts with a physiological or psychological deficiency
that activates behavior that is aimed at incentive. The process of motivation involves
the following three steps.
1. Needs arises
2. It drives the person to work for the achievement of a particular goal.
3. The person gets some reward when the goal is achieved.
Here goal means organizational goal Soneri Bank Limited itself is an authority for
success which gives motivation to the employees to work accordingly in orders to
maintain its name fame and standard. Moreover the packages provided to the staff
members are also a source of motivation to them. Training also plays an important
role in it.

Committees and their Role:

Since the key committee of the bank desire authority directly from the board of
director, they play a major role in management action and direction. Committees
found are Soneri Bank Limited is as follows:

1- Executive Committee:
The most powerful committee in the Bank is the executive committee. Its membership
includes the chairman of the board, the president and the several key directors. The

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committee also includes some additional key executives of the Bank. This committee
generally reviews loans over a certain amount, all matters relating to policy, sets
interest rates, usually reviews the actions of all other bank committees, and reviews
past due loans, and loans to be charged off the Bank’s books.

2- Management Committee:
This committee is made up of the AGM and the top department executives of the
Bank, and is charged with coordinating the overall management function of the Bank.
The management committee is the top-level policy committee of the Bank. It should
concern itself with the long range of the bank, considering such things as future
executive staffing, capital requirements, space requirements, meeting competition,
and administrative coordination.

3- Operations Committee:
An operation committee made up of the Bank and the key operations department’s
heads concern itself with the analysis of the operating methods and procedure. It also
considers proposed changes to the operating methods and procedures.

4- Officers Loan Committee:

Sometimes referred to as the loan and discount committee, this committee consists of
the president, the senior loan officer, and several key loan and credit officers. This
committee serves to screen loans on a daily or weekly basis at the operating level.
Such a committee bridges the time gap between the executive committee meetings
and, at the same time, top management can be reviewing major credits on a current

5- Audit Committee:
The audit committee is made up of directors who are not actively engaged in the
management of the bank. This committee reviews, with auditor’s assistance, the

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director’s examination, regulatory authority’s examination, and pursues any other
mattes relating to the soundness or accuracy of the Bank’s control or records.

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Products of Soneri Bank:
Soneri Bank offers wide range of products and services to its customers. They serve
their customer by providing them the best quality product to which they have an easy
excess. Customer satisfaction comes first for them that are why they say:
“We stay close to our customers no matter how far away they might be”.
The products of the Bank are essentially services. Any satisfaction the consumer gets
from the performance of the service rather than from the owner ship of a good. Banks
are in business of marketing cash securities, cash accessibility, monetary transfer and
time, to enable customers wants to be satisfied today without waiting until tomorrow.
Soneri Bank Limited offers products to two types of customers’ i.e. individual
customers and industrial or commercial customers.
Products offered by Soneri Bank are as follows:

1- Saving Accounts:
• PLS Saving
• Soneri Saving

i- PLS Saving:
PLS Savings Bank Account is a simple, straight forward Savings Bank Account with
a great convenience for individuals (in single or joint names) minors (to be operated
by the guardian) charitable institutions, provident fund and other funds of benevolent
nature local bodies, autonomous corporations, limited companies, firms associations,
educational institutions, etc.

ii- Soneri Saving:

Soneri Savings Account is a flexible and fast growing cumulative profit account with
a great convenience for individuals (in single or joint names), minors (to be operated
by the guardian), charitable institutions, provident fund and other funds of benevolent
nature local bodies, autonomous corporations, limited companies, firms associations,
educational institutions etc.

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2- Term Deposit:
• Term deposit Account
• Soneri premium Deposit
• Diamond deposit certificate

i- Term deposit Account:

Term deposit is offered by Soneri Bank to Individuals (in single or joint names),
Minors (to be operated by the guardian), Charitable Institutions, Provident Fund and
other funds of benevolent nature local bodies, Autonomous Corporations, Limited
Companies, Firms, Associations, Educational Institutions etc who have the intention
of retaining their savings for a fixed period thereby earning a higher rate of profit.

ii- Soneri premium Deposit:

Soneri Premium Deposit is offered by Soneri Bank to individuals (in single or joint
names), Minors (to be operated by the guardian), Charitable Institutions, Provident
Fund and other funds of benevolent nature, local bodies, Autonomous Corporations,
Limited Companies, Firms, associations, Educational Institutions, Clubs etc. who
have the intention of retaining their savings for a fixed period of 12 months thereby
earning a most lucrative rate of return thereon.

iii- Diamond Deposit certificate:

Soneri Diamond Deposit Certificates provide investment opportunities to small and
medium income group investors, Charitable / Benevolent Funds, Trusts, Societies,
Associations and Clubs with an attractive return.

3- Current Account:
Current is a non profit account, flexible account with a great convenience for
individuals (in single or joint names), minors (to be operated by the guardian),
charitable institutions, autonomous corporations, limited companies, firms,
associations, educational institutions, etc.

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4- Basic Bank Account:

5- Ikhtiar Current Account:

Ikhtiar current is a non profit account, flexible account with a great convenience and
Multiple FREE Services for individuals (in single or joint names), minors (to be
operated by the guardian), charitable institutions, autonomous corporations, limited
companies, firms, associations, educational institutions, etc.

6- Online Banking:
On-Line Banking Services are available for all chequing account holder of our Soneri
all branches.

7- SMS Alert:
Soneri Bank Limited now introduces to its ATM/ VISA Debit Card holders SMS
Alert Service, the best feature for warning about fraudulent transactions conducted
against Cards.

8- SME Finance:
Soneri Bank Limited, arguably at the forefront of commercial excellence, has
strengthened its product profile by introducing the following cost effective innovative
tailor made small and medium enterprises (SMEs) financing options on flexible terms
to its most discerning customers need. The Market segment for this business is
primarily SMEs and the bank stands committed to contribute in the process of
national development with an explicit focus in providing quality finance solutions.



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9- Agriculture Financing:
Following agriculture finance facilities are provided by Soneri Bank Limited at its
selected branches.
• Production Loan
• Development Loan
• Life Stock

10- Lockers:
Specially designed lockers of various sizes to meet the requirements of applicants are
available at our designated branches. The lockers may be operated during the banking
hours of the branch.

11- Consumer Finance:

• Soneri Car Finance
• Soneri Ghar Finance
• Soneri Personal Finance
• Soneri Generator Finance

12- Electronic Banking:

• ATM/VISA Debt Card
• Internet Banking
• Cheque Free Banking
• Telephone Banking
• Utility Bills Payments

i- ATM/VISA Debt Card:

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SONERI VISA Debit Card brings to you the ultimate facility of spending and making
payments. You are privileged to avail the unmatched opportunities and benefits of
the VISA CLASSIC Card and VISA GOLD Card. With the ‘Buy Now – Pay Now’
facility, you pay directly from your bank account.
ii- Internet Banking:
You can Pay Utility Bills, Transfer Funds, and access your Account information
anywhere Round-the-clock through Soneri Direct Internet Banking.

iii- Cheque Free Banking:

• No Cheque book
• 300,000/ Per day
• Time Saving
• No Signature required
• No charges can be used at POS Terminal deployed branches.

iv- Telephone Banking:

You can conduct your banking from any where and at anytime you want.
Dial 111 SONERI (111-766374) to reach our Customer Services Call Center.
With Telephone Banking, You can access all the information you need without
making a trip to the branch. This means no Parking to find, no traffic to flight and no
standing in line. At home, at work or on the go, all you need is a touch-tone
telephone, your card number and the T-PIN to access your bank account, 24 hours a
day, 7 days a week.

v- Utility Bills Payments:

Soneri Bank VISA Debit Card and ATM Card holders can pay their bills using ATM
• No need to stand in a bank queue.
• No need to carry cash.
• Easy way of paying bills for you and your dear ones.

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• Bills once paid are automatically registered in our system.
• 24 hours a day, 7 days a week service from any Soneri Bank ATM across

13- Islamic Banking:

• Soneri Jari Account
• Soneri Bachat Account
• Soneri Munafa Account
• Soneri Meaadi Account

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Prices of Soneri Bank:
Because the Bank’s are the financial institutions they do not charge prices for their
products offered to general public instead they have different CHARGES /
COMMISION for different product.
Price is important since it represents the only element of the marketing mix that
creates the revenue. Thus, Soneri Bank Limited has two main objectives in relation to
price setting:
• To attract as many customers as possible to the selected segments.
• To do this under the most profitable condition.
Soneri Bank Limited services its pricing policies from time to time. Charges are also
made on the recommendation of SBP.
They have different charges for International Banking and Domestic Banking. List of
charges that Soneri Bank recovered are as follows:

Schedule of Bank Charges:

For the purpose of charges, Bank’s transaction are divided into two parts
a) International Banking
b) Domestic Banking

a) International Banking:

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International Banking includes import, export and collection of foreign bills, foreign
remittance and foreign bills purchased.

1. Import:
Cash Letter of Credit 0.40% for first quarter or part of, 0.20% for each subsequent
quarter or part there of minimum Rs.1000/-
Mark-up in case of import a) 52 paisa per Rs.1000/-
Bills under import Letter daily product Up to 14 days.
of credit. b) After 14 days Ps.55 per
thousand daily product or as per
SBP directives.
Collection Rs.400/- (Flat)
2. Export:
i) Letter of Credit
-Advising Rs.350/- (Flat) US $ 25 from the
opening bank if the charges are
on the opener account.
-Confirmation 0.25% per quarter or part there of
-Negotiation under Rs.350/= shall be levied
Reserve on export documents negotiated under reserve due to discrepancies.
ii) If document are sent to other local bank for negotiation under restricted
L/C, Rs.350/= are charged.
iii) Collection
-Outgoing clean cheques Rs.100/- per collection if
proceeds credited to Pak Rupee
Outgoing documentary export Rs.200/-(flat) or 0.13%
flat charges whichever is higher.

3. Remittances( Foreign):
-Outward Draft Rs.200/-, T.T. Rs.600

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-Inward Nil if proceeds are credited to an
account with Soneri Bank
Limited, otherwise a flat charges
of Rs.50
-Foreign traveler cheque Actual commission of principle
-Encashment of FEBC Service Charges 0.15%
(Minimum Rs.250/=)

4. Foreign Bills Purchased:

Correspondent charges if any will Actual
be recovered
b) Domestic Banking:

a) Drafts, MTs and TTs drawn & payable at Soneri’s own branches:
These charges are to be waived for not more than two transactions in one week if the
remitter / purchaser is a banks depositor & maintaining a minimum unencumbered
balance of Rs.200,000/=with you for the past six months.
A customer maintaining a average balance of Rs.250, 000/- Unencumbered in current
Account, throughout the past six months will be allowed four remittances in a week to
their branches free of cost. Additionally they will be allowed two remittances for
every Rs.100, 000/- further credit in the account. It means a customer maintaining a
balance of Rs.350, 000/- will be entitled to free six remittances in a week and the one
maintaining Rs.450, 000/- balance will get the facility of eight free remittances, and
so on.
However any out of pocket expenses like telex/postal charges and government
levies/taxes etc. are to be recovered.
Up to Rs.10, 000/- 0.20% Min Rs.20/-
Rs.10, 001/-to Rs.100, 000/- 0.15% Min Rs.25/-
Over Rs.100, 000/- 0.055% Min Rs.150/-

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b) Telegram / Telex Charges in TTs Rs.50/-(Flat)
Postage in MTs Rs.30/-(Flat)

c) DD/TT Cancellation Rs.50/-

d) Issuance of Duplicate DD Rs.50/-

When remittances by TT are requested on Telephone then telephone charges of
Rs.100/- would be recovered.

II-Pay order:
a) Issuance of Pay order Rs.25/-(Flat)
b) Cancellation Rs.30/-(Flat)
c) Issuance of Duplicate Rs.25/-(Flat)

III- Issuance of State Bank of Pakistan:

Cheque on specific request of Rs.300/-(Flat)

IV- On-line Funds Transfer:

a) Inter City Transfer
Up to Rs.500, 000/- Rs.100/-
Over Rs.500, 000/- Rs.200/-
Plus without holding tax at
Prevalent rates whenever applicable,
b) Within City Transfers. Rs.50/-

V- Same Day Outward Cleaning:

a) For Karachi, Lahore Islamabad & Rs.250/-per installment
Rawalpindi Branches.
b) For other Branches Rs.100/-per installment

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VI- Inland Letter of Credit:
a) Opening Commission 0.40% per quarter or part thereof
Min Rs.300/-for the first quarter

For each subsequent quarter or

part thereof 0.15%.
b) Amendments Rs.250/-Flat or commission as at
(a) above if amendment involves
increase in amount or extension
in validity.
c) Others In case an island LC is opened
through another Bank, then actual
charges of the bank opening the
letter of credit would be
recovered in addition to their own
charges as prescribed above. The
same would apply to
to LCs opened
. through other banks

Safe Deposit Lockers Fee for Sale Deposit Lockers:

Safe Deposit Lockers fee for safe deposit Lockers (to be recovered in advances in
advance or at the commencement of the period-yearly, half yearly, quarterly) as the
case may be:
Normal with Tray & Box
a) Up to 0.40 cft. Small Rs.800/- Rs.1, 000/-
Per annum
From 0.41 to 0.80 cft Medium Rs.1, 200/- Rs.1, 500/-
Per annum

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Form 1.36 to 1.75 cft Large Rs.3, 000/- Rs.3, 000/-
Form 1.76 to 2.00 cft Per annum
From 2.01 to 2.50 cft Extra Large Rs.5, 000/- -------
Per annum
(Locker Rental is to be waived
if key deposit amount is 10 times
of the locker rental or the locker
holder maintains an average
deposit of Rs.100, 000/-in Current
b) Key Deposit:
Revised rate of Key Deposit will Rs.2, 000/-per locker
apply on the issue of new lockers.

c) Breaking Charges:
Breaking Charges Rs.1, 500/-per locker

-ATM Cash Cards:

a) Issuance of New Cards Rs.200/-
b) Renewal Rs.100/-
c) Replacement Rs.200/-
d) Use of Soneri ATM Cards Rs.15/-per transaction
on Switch with other banks.

Miscellaneous Charges:
a) Duplicate statement of accounts Rs.50/-Flat
Duplicate advice older than 1 yr Rs.25/-per advice
b) Return of cheques presented Rs.50/-(To be recovered from the
to us for want of funds Drawer’s Account)
c) Stop payment of cheque Rs.100/-per instruction

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d) Inland Courier, Postal
Cable / Telex & Fax Charges:
i- Postage Rs.30/-
ii- Courier Rs.75/-
iii- Cable / Telex Rs.75/-
iv- Telephone Charges Rs.100/-
v- Fax Inland (from one city Rs.100/-per page
to another)

Fax Local (within same city) Rs.10/-per page

e) Confirmation of Balance to Rs.50/-per Confirmation
f) Any out of pocket expenses or At actual
any Transaction not covered under
this Schedule.
g) Any type of certificate issued at Rs.50/-per certificate.
the request of the customer except
for balance confirmation certificate.

Places of Soneri Bank:

Soneri Bank operates over 170 branches spread all over Pakistan including the
Northern areas of the country where no other private bank has ventured so far.
Expansion of branches is based on a policy of maintaining a balance between the
urban and the rural areas with a view of offering services even in the remote areas of
Pakistan. This created its own challenges and opportunities, and forced them to evolve
an outward-looking strategy in terms of their market emphasis.
They also have a correspondent banking network of 44 banks in Pakistan. If you want
financial advice, walk into any of their branches. Head Office and Main Office are on
Gulberg Lahore, which is the center of business activity. Also location of all branches
of Soneri Bank Limited is very ideal. Soneri Bank Limited of Gulberg is in residential

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area but situated on now becoming commercial and business area. Banking industry
and offices are establishing.
The bank has also got foreign correspondents in almost 70 countries.
Head Office is situated on the Liberty Market Gulberg Lahore, which is the center of
business activity location of other branches is very ideal also.
A good definition of distribution in banking is any means of increasing the
availability and/or convenience of a service that increases its use or the revenue form
its use.
Soneri Bank Limited has an aim to be the all-purpose bank for its private and
corporate customer in considering branch location and distribution means.

Distribution Network:
Distribution Network is based on both geographical area and a number of outlets.
Soneri Bank developed a geographically diversified assets base instead of a
concentrated and heavy reliance on business in the major commercial centers of
Karachi and Lahore, where most other banks have their operational Head Offices.
Pleasant and sophisticated atmosphere has been provided in the branches which are all
fully air conditioned and computerized.
The bank has opened 15 new branches in the year 2010 at different areas of Pakistan
e.g. Karachi, Lahore etc and response from all the locations is encouraging. Presently
170 branches are fully operational. Branch expansion program is continuing and a
number of new branches will be added in the year 2011.
They give emphasis to open new branches at different remote areas of Pakistan so that
the common areas must also be benefited e.g. they have branches in HUNZA,

Main Branch
Address: 87 Shahrah-e-Quaid-e-Azam Lahore
Telephone No: ((+92) 42) 36368141-48
Fax No: ((+92) 42) 36303266, 36368138

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Email: main.lahore@soneribank.com

Defence Branch
Address: G-14 Commercial Area Defense Housing Authority
Telephone No: ((+92) 42) 35897181-83, 35730760-61
Fax No: ((+92) 42)35724325
Email: defence.lahore@soneribank.com

Gulberg Branch
Address: 90-B-C/11 Liberty Market Gulberg 111 Lahore
Telephone No: ((+92) 42) 35713445 - 48
Fax No: ((+92) 42) 35713326
Email: gulberg.lahore@soneribank.com

Circular Road Branch

Address: 49/2 B Circular Road Lahore
Telephone No: ((+92) 42) 37670486 , 37670489 , 37670483
Fax No: ((+92) 42) 37636253
Email: circular.lahore@soneribank.com

Model Town Branch

Address: Blank square Market 1-C Model Town Lahore Tele # Fax #
Telephone No: ((+92) 42) 35889311-12 , 35889313
Fax No: ((+92) 42) 35889315
Email: modeltown.lahore@soneribank.com

Akbar Chowk Branch

Address: 866 D Faisal Town Peco Road Lahore
Telephone No: ((+92) 42) 35177800-02
Fax No: ((+92) 42) 35177803
Email: akbarchowk.lahore@soneribank.com

Cavalry Ground Branch

Address: 101 Commercial Area Cavalry Ground Lahore
Telephone No: ((+92) 42) 36653730, 36653728-29
Fax No: ((+92) 42) 36653731
Email: cavalary.lahore@soneribank.com

Qartaba Chowk Branch

Address: Shop # 6,7 Plot S-57 –R-136/6 Queens Road Lahore
Telephone No: ((+92) 42) 37211991- 4
Fax No: ((+92) 42) 37211995
Email: qartabachowk.lahore@soneribank.com

Allama Iqbal Town Branch

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Address: 17 Gulshan Block Allama Iqbal Town Lahore
Telephone No: ((+92) 42) 35437613 - 5 , 35411325
Fax No: ((+92) 42) 35437617
Email: allamaiqbaltown.lahore@soneribank.com

Baghbanpura Branch
Address: 268 G.T Road Baghbanpura
Telephone No: ((+92) 42) 36832811 - 13
Fax No: ((+92) 42) 36832814
Email: baghbanpura.lahore@soneribank.com

Thokar Niaz Baig Branch

Address: Plot # 04, Block B Judicial Employee Housing Co-operative Society Thokar Niaz Baig Lahore
Telephone No: ((+92) 42) 35313651 - 53
Fax No: ((+92) 42) 35313655
Email: thokarniazbaig.lahor@soneribank.com

Ghazi Chowk (NESPAK) Branch

Address: 265-c1 Phase 1, NESPAK Employees Housing Society, Lahore
Telephone No: ((+92) 42) 35188505 - 07
Fax No: ((+92) 42) 35185663
Email: ghazichowk.lahore@soneribank.com

Garden Town Branch

Address: 23rd Ali Block New Garden Town Branch Lahore
Telephone No: ((+92) 42) 35940611 - 3
Fax No: ((+92) 42) 35940615
Email: gardentown.Lahore@soneribank.com

DHA Phase III Branch

Address: Plot # 19, Block -Z, Phase III, Defence Housing Authority Lahore Cantt
Telephone No: ((+92) 42) 35734083 - 85
Fax No: ((+92) 42) 35734081
Email: ph3defence.lahore@soneribank.com

Chungi Amer Sadhu Branch

Address: Khasra No. 1055, Kheqat No. 330, Khatooni No. 2331, Hadbast Mouza Chand Rai, Lahore.
Telephone No: ((+92) 42) 35808611 - 13
Fax No: ((+92) 42) 35808615
Email: chungisadhu.lahore@soneribank.com

Johar Town Branch

Address: 10-B, Main Boulevard, M.A. Johar Town, Branch, Lahore.
Telephone No: ((+92) 42) 35204191 - 93

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Fax No: ((+92) 42) 35204191- 3
Email: johartown.lahore@soneribank.com

Wahdat Road Branch

Address: 11-A, Aziz Centre, Main Wahdat Road, Lahore.
Telephone No: ((+92) 42) 37578211 - 13
Fax No: ((+92) 42) 37578214
Email: wahdatroad.lahore@soneribank.com

Gunpat Road Branch

Address: Plot No. S III Is I Gunpat Road, Lahore.
Telephone No: ((+92) 42) 37361607 - 9
Fax No: ((+92) 42) 37361611
Email: gunpatroad.lahore@soneribank.com

Airport Road Branch

Address: Airport Road Branch Plot No.E-27 Main Defence Airport Road Lahore
Telephone No: ((+92) 42) 35700115 - 17
Fax No: ((+92) 42) 35700119
Email: airportroad.lahore@soneribank.com

Ravi Road Branch

Address: Khasra # 3084/ 1088, Khatooni # 826, Ravi Road, Lahore
Telephone No: ((+92) 42) 37725356 - 57
Fax No: ((+92) 42) 37725353
Email: raviroad.lahore@soneribank.com

Shahdara Chowk Road Branch

Address: Khasra # 366, Khatooni # 1324, Jia Musa, Shahdara, Lahore
Telephone No: ((+92) 42) 37941741 - 43
Fax No: ((+92) 42) 37941740
Email: shahdara.lahore@soneribank.com

Manga Mandi Branch

Address: Khasra No.10734-10735 Haji Park Bypass Manga Mandi
Telephone No: ((+92) 42) 35383517, 35383518 - 9
Fax No: ((+92) 42) 35383516
Email: mangamandi.lahore@soneribank.com

Badian Road Branch

Address: Khasra # 2265/1 min, Khatooni # 429/604-605 Hadbast Mouza Ladharkay Badian Road Lahore
Telephone No: ((+92) 42) 35749741- 42 , 35749744
Fax No: ((+92) 42) 35749743
Email: badianroad.lahore@soneribank.com

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Mughalpura Branch
Address: No.SE 3R-147/RH/Shop 147 Shalimar Link Road Mughalpura Lahore
Telephone No: ((+92) 42) 36880892 - 4
Fax No: ((+92) 42) 36880896
Email: mughalpura.lahore@soneribank.com

Samnabad More Branch

Address: Property # 33, 2A & 3A, Khasra # 1797 Mor Samnabad Lahore
Telephone No: ((+92) 42) 37591404 - 6
Fax No: ((+92) 42) 37590873
Email: samanabad.lahore@soneribank.com

Islampura Branch
Address: Plot No. SW III - 40 - S 61/ RH Islampura (Khrishan Nagar)
Telephone No: ((+92) 42) 37214394 - 6
Fax No: ((+92) 42) 37214398
Email: islampura.lahore@soneribank.com

Garhi Shahu Lahore

Address: Allama Iqbal Road, Garhi Shahu Lahore
Telephone No: ((+92) 42) 36294201-02
Fax No: ((+92) 42) 36294204
Email: garhishahu.lahore@soneribank.com
Main branch: Mall plaza, Quaid-e-Azam Road, Lahore Cantt., Pakistan.
Tel: 061-4512884, 4519927 UAN# 111-567-890
Swift: SONEPKKAMTN email: main.lahore@soneribank.com

Main branches in the different cities of the Pakistan

Region Number of Branches
Lahore 23
Karachi 43
Faisalabad 2
Peshawar 2
Faisalabad 1
Mirpur (Azad Kashmir) 2
Quetta 2
Islamabad 3
Gujranwala 1
Sialkot 1
Rawalpindi 2
Wizirabad 1
Sheikhupura 1
Hyderabad 5
Lahore 3

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Gilgit 2
Sahiwal 1
Skardu 1
Hunza 1
Lodhran 1
Rahim Yar Khan 1
Bahawalpur 1
Gwadar 1
Abotabad 1
Okara 1
Sargodha 1
Hub chowki 1
Golarchi 1
Bohara 1
Gujar Khan 1
Jehlum 1
Khanewal 1
Booni 1
Burewala 1
Jati Town 1
Hafizabad 1

Promotion of Soneri Bank:

“Promotion includes all the activities that an organization undertakes to communicate
and promote the products to customers. Promotion programs consist of advertising,
sales promotion and public relations.”
At the Soneri Bank Limited it is appreciated if staff member introduces customers.
Usually it is based on personal relations. Advertising is done in a form of Neon signs
and signboards. They publish their brochures and pamphlets so that the information is
communicated to a large number of people. They distribute calendars, diaries and key
chains to their officers and customers.
To promote its products and enlarge its market share bank should plan and carry out
specific program based on the sound and basis concept of marketing research and

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product development. A bank’s promotional activities will encompass most area of
direct competition with other institutions.

Promotional Policies:
In Soneri Bank Limited, there are no clearly defined or written promotional policies.
No promotional policies are undertaken by the management to promote its various
products ant to advertise its services.

1- Advertising:
Advertising includes the promotion of ideas, product or services by an identified
SONERI BANK is a well reputed private bank it basically advertise its product and
services through its customers. It does not advertise on TV but through public
relations the bank promotes its product also the good will of bank towards its clients
has played an important part not only in the promotion of its product but also its
name. Customers are usually attracted towards this bank because they receive best
service and good response from their staff.

2- Advertising Media:
In addition of promoting their products through public relation they use different
Medias like Newspapers, Bill boards etc. they also give brochures and pamphlets to
their customers which gives the customers which gives the customers the detail of
their products. Nowadays as every one knows that the most important part of
promotion is through internet, keeping this in view Soneri Bank has developed its
own web site in which it has provided all information related to its products and

3- Direct Customer Solicitation:

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In absence of any advertising campaign, direct customer solicitation becomes the
most crucial source of securing accounts in Soneri Bank Limited.
Personal selling is a technique that demands from the Bank’s managerial and non-
managerial staff of the following
A knowledge of all existing services (or at least a knowledge of to whom the
customer should be referred to further information).

4- An understanding of customer problems:

An ability to solve the customer’s problem and persuade the customer to accept the

5- Direct Customer Contact:

The keystone to the Bank is the customer’s impression when he enters the Bank.
Soneri Bank Limited has spent sizeable sums in recent years to improve their facilities
and to make them more attractive. This is certainly the first step in making the actual
and potential customer feel welcome. Off-hour and evening bank hours, accessible
counters, carpeted lobbies, attractively decorated- all are part of Bank’s attempt to
imprint good impression to visiting. Soneri Bank Limited tries to create a banking
image of friendless and community participation. In this way, responsibility of good
marketing of the bank is on every employee of the Bank. So the efficiency of
employees and their behavior is corner stone in this regard. Employees also utilize
their personal contacts to get the deposits and business for the Bank.

Publicity is perhaps the least controllable elements of the communication mix, since it
is the media who will tend to decide what is newsworthy. Soneri Bank Limited does
not get into news very often, though information about it can be found in periodic
reviews by banking reviews.

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Financial Analysis:
Financial Analysis refers to the assessment of a business to deal with the planning,
budgeting, monitoring, forecasting, and improving of all financial details within an
There are two types of analysis used in a business: Horizontal and Vertical.

Horizontal Analysis:
This method of analysis is simply comparing the same item in a company's financial
statements from two or more comparable periods, and then calculating the difference.

Vertical Analysis:
This type of analysis illustrates the relationship of certain components compared to
the whole, or the financial stability of a company. There are several different types of
ratios or indexes that may help us determine where the company currently stands in
relationship to where it wants to go.
The most common form of Vertical Analysis is using percentages to show one
account's relationship to another.

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Financial Highlights:
Year ended 31 December
2009 2008 2007 2006
Investment- Net 29,537,179 14,053,177 19,181,562 16,724,253
Advances- Net 48,727,103 47,575,364 40,154,449 35,412,248
Deposits and other 73,548,226 61,634,491 60,150,128 53,000,647
Profit before taxation 190,413 953,233 1,476,685 1,448,901
Profit after taxation 145,355 701,041 1,000,334 985,298
Net assets 7,803,201 7,113,047 6,610,479 5,611,903
Earning per share 0.29 1.40 2.43 2.39

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2009 2008 2007 2006

Profit pre tax and Profit after tax



500,000 Profit before tax

Profit after tax
2009 2007

Earning per share


1 Earning per
0.5 share
2009 2008 2007 2006

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Soneri Bank Limited
Balance Sheet
As on the Year Ended December 31st
Rupees in ‘000
2009 2008 2007
Cash and balances with treasury banks 6,471,173 5,646,755 5,861,205
Balances with other banks 1,497,193 3,908,859 4,349,673
Lending to financial and other institutions 2,755,377 3,990,269 3,175,009
Investments- net 29,537,179 14,053,177 19,181,562
Advances- net 48,727,103 47,575,364 40,154,449
Fixed assets 3,333,891 3,126,857 2,150,955
Deferred tax assets- net 108,429 125,843 ----------
Other assets- net 2,879,927 2,550,130 1,981,207
95,310,272 80,977,254 76,854,060
Bills payable 1,763,401 1,254,496 1,640,514
Borrowings 9,385,522 8,441,454 5,865,471
Deposits and other accounts 73,548,226 61,634,491 60,150,128
Sub-ordinated loans 1,197,840 1,198,320 1,198,800
Liabilities against assets subject to
financial lease ----------- ----------- -----------
Deferred tax liability- net ----------- ----------- 425,398
Other liabilities 1,612,082 1,335,446 963,270
87,507,071 73,864,207 70,243,581
Net Assets 7,803,201 7,113,047 6,610,479
Presented by
Share Capital 5,019,351 4,114,222 4,114,222
Reserves 2,003,948 2,016,877 1,876,669
Unappropriated profit 158,278 834,650 238,775
7,181,577 6,965,749 6,229,666

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Surplus on revaluation of assets-net of tax 621,624 147,298 380,813
7,803,201 7,113,047 6,610,479

Soneri Bank Limited

Balance Sheet
Horizontal Analysis
As on the Year Ended Dec 31st
2009 2008 2007
Cash and balances with treasury banks 110% 96% 100%
Balances with other banks 34% 90% 100%
Lending to financial and other institutions 87% 126% 100%
Investments- net 154% 73% 100%
Advances- net 121% 118% 100%
Fixed assets 155% 145% 100%
Deferred tax assets- net ---------- --------- -------
Other assets- net 145% 129% 100%
124% 105% 100%
Bills payable 107% 76% 100%
Borrowings 160% 144% 100%
Deposits and other accounts 122% 102% 100%
Sub-ordinated loans 100% 100% 100%
Liabilities against assets subject to
financial lease ----------- ----------- -----------
Deferred tax liability- net ----------- ----------- 100%
Other liabilities 167% 139% 100%
125% 105% 100%
Net Assets 118% 108% 100%
Presented by
Share Capital 122% 100% 100%
Reserves 107% 107% 100%
Unappropriated profit 66% 350% 100%

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115% 112% 100%
Surplus on revaluation of assets-net of tax 163% 37% 100%
118% 108% 100%

Interpretation of Horizontal Analysis of Balance Sheet of Soneri

Bank Limited:
Horizontal Analysis of the Bank Balance Sheet has been prepared by taking the year
2007 as the base year ad the remaining years as compared to the base year. The most
liquid asset of the Bank such as cash and balances with treasury Bank has increased
from the year 2008 to 2009 that is 96% in 2008 and 110% in 2009, where as other
liquid assets such as balances with other Banks and lending to financial and other
institutions have shown a decreasing trend such as balances with other Banks is 90%
in 2008 and 34% in 2009 and lending to financial institutions is 126% in 2008 and
87% in 2009. The reason for this declining trend might be the uncertain political and
law and order situations in Pakistan. All other assets such as mark-up accrued in local
currency, rent and repayments, suspense account, stamps on hand etc shows a
increasing trend as well as fixed assets, advances and investment also have shown a
positive trend. The overall effect is increased in total assets.
Liabilities especially current liabilities have shown a significant increase in 2008 to
2009. Bills payable increases from 76% in 2008 to 107% in 2009 and similarly
Borrowings from 144% to 160% and Deposits and other accounts from 102% to
122%. This increase in current liabilities depicts that the Bank is performing its
operations successfully. Percentage of sub-ordinated loans almost same in both the
years. Other liabilities also increase from 139% to 167%. In the end the net assets
increased from 108% to 118%. Soneri Bank Limited shows progress in all fields
including the financial position due to this the market share of Soneri Bank also

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Soneri Bank Limited
Balance Sheet
Vertical Analysis
As on the Year Ended Dec 31st
2009 2008 2007
Cash and balances with treasury banks 6.8% 6.9% 7.6%
Balances with other banks 1.6% 4.8% 5.7%
Lending to financial and other institutions 2.9% 4.9% 4.1%
Investments- net 31.0% 17.3% 24.9%
Advances- net 51.1% 58.8% 52.2%
Fixed assets 3.5% 3.9% 2.8%
Deferred tax assets- net 0.1% 0.2% -------
Other assets- net 3.0% 3.1% 2.6%
100% 100% 100%
Bills payable 1.6% 1.5% 2.1%
Borrowings 9.8% 10.4% 7.6%
Deposits and other accounts 77.2% 76.1% 78.3%
Sub-ordinated loans 1.3% 1.5% 1.5%
Liabilities against assets subject to
financial lease ----------- ----------- -----------
Deferred tax liability- net ----------- ----------- 0.6%
Other liabilities 1.7% 1.6% 1.3%
91.6% 91.1% 91.4%
Net Assets 8.2% 8.8% 8.6%
Presented by
Share Capital 5.3% 5.1% 5.4%
Reserves 2.1% 2.5% 2.4%
Unappropriated profit 0.2% 1.0% 0.3%

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7.5% 8.6% 8.1%
Surplus on revaluation of assets-net of tax 0.7% 0.2% 0.5%
8.2% 8.8% 8.6%

Interpretation of Vertical Analysis of Balance Sheet of Soneri Bank

The financial position of the Soneri Bank is continued to be excellent. The Vertical
Analysis of the Balance Sheet of Soneri Bank shows fluctuation in its assets and
liabilities but also shows a positive trend. When different items of the Balance Sheet
are compared with total assets the following results is obtained. The cash and balance
ratio is 7.6% in 2007 and 6.9% and 6.8% in 2008 and 2009, balances with other banks
shows the negative trend and decreases from 5.7% to 4.8% in 2008 and 1.6% in 2009,
similarly lending to financial institution also shows a negative trend. The advances
were 52.2% in 2007 and increased in 2008 to 58.8% and then decreased in 2009 to
51.1%. The Vertical Analysis of the fixed assets shows the similar trend, 2.8% in
2007 and increased in 2008 to 3.9% and then decreased in 2009 to 3.5%, the increase
in advances in 2008 was due to the increase in loans, cash credits and running finance.
Bills payable as the percentage of current assets is 2.1% in 2007 and 1.5% in 2008 but
slightly increases in 2009 to 1.6%, the increase is due to increase bills payable in
Pakistan while outside the Pakistan there are no bills payable. Borrowing increases
from 7.6% in 2007 to 14.4% in 2008 and then decreases to 9.8% in 2009, the increase
in 2008 was due to the increase in borrowing outside the Pakistan. As compared to
2007 the deposits decrease in 2008 from 78.3% to 76.1% but increase in 2009 to
77.2%, the reason for this increase in deposit is increase in saving and current
deposits. Other liabilities also have shown an increase from 1.3% to 1.6% in 2008 and
1.7% in 2009.
Shared holders Equity is 8.1% in 2007 and it increases in 2008 to 8.6% and then
decreases to 7.5% in 2009. However the overall trend is positive and strengthens the
banks financial position.

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Soneri Bank Limited
Income Statement
For the Year Ended December 31st
Rupees in ‘000
2009 2008 2007
Mark-up/return/interest earned 9,337,284 7,822,941 6,271,636
Mark-up/return/interest expensed 6,602,779 4,878,347 4,334,355
Net mark-up/interest income 2,734,505 2,944,594 1,937,281
Provision against non-performing loans and
advances- net 1,312,121 1,240,746 234,815
Provision for diminution in the value of
investments 321,222 25, 0000 ---------
Bad debts written off directly ---------- 196 ---------
1,633,343 1,265,942 234,815
Net mark-up/interest income after provisions 1,101,162 1,678,652 1,702,466
Fee commission and brokerage income 291,820 358,685 288,205
Dividend income 130,639 268,016 32,613
Income from dealing in foreign currencies 381,502 279,284 184,181
Gain/ (loss) on sale of securities-net (10,805) (238) 299,570
Unrealized gain/ (loss) on revaluation of
investments classified as ‘held for trading’ ---------- --------- -----------
Other income 375,037 320,459 263,095
Total non-mark-up/interest income 1,168,193 1,226,206 1,067,664
2,269,355 2,904,858 2,770,130
Administrative expenses 2,113,660 1,673,590 1,278,974
Provision against other assets-net 16,408 134,311 5,871
(Reversal)/provision against off-balance
sheet obligations (100,000) 100,000 ----------

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Other charges 48,874 43,724 8,600
Total non-mark-up/interest expenses 2,078,942 1,951,625 1,293,445
190,413 953,233 1,476,685
Extra ordinary/unusual items ---------- ---------- -----------
Profit before taxation 190,413 953,233 1,476,685
Taxation-Current 321,000 697,000 403,000
-Prior --------- (437) (9,684)
-Deferred (275,942) (444,371) 83,035
45,058 252,192 476,351
Profit after taxation 145,355 701,041 1,000,334
Unappropriated profit brought forward 834,650 238,775 400,853
Transfer from surplus on revaluation of
fixed assets-net of tax 70,473 35,042 35,042
Profit available for appropriation 1,050,478 974,858 1,436,229
Basic and diluted earnings per share (Rupees) 0.29 1.40 2.43

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Soneri Bank Limited
Income Statement
Horizontal Analysis
For the Year Ended December 31st
Rupees in ‘000
2009 2008 2007
Mark-up/return/interest earned 149% 125% 100%
Mark-up/return/interest expensed 152% 113% 100%
Net mark-up/interest income 141% 152% 100%
Provision against non-performing loans and
advances- net 559% 528% 100%
Provision for diminution in the value of
investments -------- --------- ---------
Bad debts written off directly ---------- --------- ---------
696% 539% 100%
Net mark-up/interest income after provisions 65% 99% 100%
Fee commission and brokerage income 101% 124% 100%
Dividend income 401% 822% 100%
Income from dealing in foreign currencies 207% 152% 100%
Gain/ (loss) on sale of securities-net (3.6%) (0.08%) 100%
Unrealized gain/ (loss) on revaluation of
investments classified as ‘held for trading’ ---------- --------- -----------
Other income 143% 122% 100%
Total non-mark-up/interest income 109% 115% 100%
82% 105% 100%
Administrative expenses 165% 131% 100%
Provision against other assets-net 279% 2288% 100%

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(Reversal)/provision against off-balance
sheet obligations --------- ---------- ----------
Other charges 568% 508% 100%
Total non-mark-up/interest expenses 161% 151% 100%
13% 65% 100%
Extra ordinary/unusual items ---------- ---------- -----------
Profit before taxation 13% 65% 100%
Taxation-Current 80% 173% 100%
-Prior --------- --------- --------
-Deferred 332% 535% 100%
10% 53% 100%
Profit after taxation 15% 70% 100%
Unappropriated profit brought forward 208% 60% 100%
Transfer from surplus on revaluation of
fixed assets-net of tax 201% 100% 100%
Profit available for appropriation 73% 68% 100%
Basic and diluted earnings per share (Rupees) 0.29 1.40 2.43

Interpretation of Horizontal Analysis of Income Statement of Soneri

Bank Limited:
Horizontal Analysis is done by taking the year 2007 as the base year and the
remaining years of the bank income statement when compared with the years 2008
and 2009 shows the following results the net mark-up interest income is 152% for
2008 and 141% for 2009 the percentage shows a negative trend the income decreases
due to the increase in interest expense for the bank this interest is paid by the bank on
different deposit offered to the public. Non mark-up interest income also decrease
from 105% to 82% the non mark-up interest income is a major source of the bank
income and includes fee, commission, dividend income, income for dealing in foreign
currencies and other incomes. There is increase in interest expense as compared to
2008 i.e. in 2008 the interest expense is 151% and 161% in 2009. Profit after taxation
is 70% in 2008 and decreased in 2009 to 15% which is much lesser as compared to

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2008. So the overall profit for the bank increases from 68% to 73% the major source
of increase in bank’s profit in 2009 is increase in unappropiated profit brought
forward, transfer from surplus on revaluation of fixed assets-net of tax.

Soneri Bank Limited

Income Statement
Vertical Analysis
For the Year Ended December 31st
Rupees in ‘000
2009 2008 2007
Mark-up/return/interest earned 239% 188% 209%
Mark-up/return/interest expensed 169% 117% 144%
Net mark-up/interest income 70% 71% 64%
Provision against non-performing loans and
advances- net 34% 30% 7.8%
Provision for diminution in the value of
investments 8.2% 0.6% ---------
Bad debts written off directly ---------- 0.004% ---------
42% 30% 7.8%
Net mark-up/interest income after provisions 28.2% 40% 57%
Fee commission and brokerage income 7.5% 8.6% 10%
Dividend income 3.3% 6.4% 1.1%
Income from dealing in foreign currencies 9.8% 6.7% 6.0%
Gain/ (loss) on sale of securities-net (0.28%) (0.006%) 10%
Unrealized gain/ (loss) on revaluation of
investments classified as ‘held for trading’ ---------- --------- -----------
Other income 9.6% 7.7% 9.0%
Total non-mark-up/interest income 30% 29% 36%
58% 70% 92%
Administrative expenses 54% 40% 43%

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Provision against other assets-net 0.42% 3.2% 0.2%
(Reversal)/provision against off-balance
sheet obligations (2.6%) 2.3% ----------
Other charges 1.3% 1.0% 0.3%
Total non-mark-up/interest expenses 53% 47% 43%
4.9% 23% 49%
Extra ordinary/unusual items ---------- ---------- -----------
Profit before taxation 4.9% 23% 49%
Taxation-Current 8.2% 17% 13%
-Prior --------- (0.01%) (0.3%)
-Deferred 7.0% 11% 3.0%
1.2% 6.0% 16%
Profit after taxation 3.7% 17% 33%
Unappropriated profit brought forward 21.4% 6.0% 13%
Transfer from surplus on revaluation of
fixed assets-net of tax 1.8% 0.84% 1.2%
Profit available for appropriation 27% 23.3% 48%
Basic and diluted earnings per share (Rupees) 0.29 1.40 2.43

Interpretation of Vertical Analysis of Income Statement of Soneri

Bank Limited:
The vertical Analysis of the Income Statement indicates that the Net Mark-up for the
Soneri Bank is favorable and increases from 64% to 71% and then decreases to 70%
in 2009, the increase is due to the higher interest rate this is a positive trend because a
bank principle revenue source is usually interest from loans and interest. Total non-
mark-up interest income as a percentage of profit shows a decreasing trend and
decreases from 92% to 70% in 2008 to 58% in 2009, usually falling interest rates are
positive for a bank’s interest and because of this bank profit increases. Taxation for
the bank increase from 2007 to 2009 Soneri Bank has already achieved its target
which is settled done by the higher authorities of the bank. The bank income
statement shows that the bank net income for the year 2009 has increased as
compared to previous year.

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The soneri bank has achieved broad based growth in non-interest income during the
year just ended with all categories but mortgage banking income showing



Profitability analysis of Soneri Bank Limited indicates the overall efficiently of the
management. Without profit a company can not attract the outside capital.
Profitability analysis includes:

• Return on total assets

• Return on-equity
• Return on investment
• Return on fixed assets
• Net profit Margin
• Return on total income
• Return on advances

Net Profit after Tax

Total Assets

Year 2009 (000) 2008 (000) 2007 (000)

Net Profit after Tax 145,355 701,041 1,000,334
Total Assets 95,310,272 80,977,254 76,854,060
Return 0.15% 0.86% 1.30%

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Net Profit after Tax
× 100

Year 2009 (000) 2008 (000) 2007 (000)

Net Profit after Tax 145,355 701,041 1,000,334
Equity 7,803,201 7,113,047 6,610,479
Return 1.86% 9.85% 15.1%

Net Profit after Tax


Year 2009 (000) 2008 (000) 2007 (000)

Net Profit after Tax 145,355 701,041 1,000,334
Investment 29,537,179 14,053,177 19,181,562
Return 0.49% 4.98% 5.2%

Net Profit after Tax

Fixed Assets

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Year 2009 (000) 2008 (000) 2007 (000)
Net Profit after Tax 145,355 701,041 1,000,334
Fixed Assets 3,333,891 3,126,857 2,150,955
Return 4.35% 22.41% 46.5%

Net Profit after Tax

Interest Income

Year 2009 (000) 2008 (000) 2007 (000)

Net Profit after Tax 145,355 701,041 1,000,334
Interest Income 9,337,284 7,822,941 6,271,636
Return 1.55% 8.96% 15.9%

Interest Income
× 100

Year 2009 (000) 2008 (000) 2007 (000)

Total Income 145,355 701,041 1,000,334
Interest Income 9,337,284 7,822,941 6,271,636
Return 6423.77% 1115.90% 626.95%

Interest Income
Total Loans

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Year 2009 (000) 2008 (000) 2007 (000)
Interest Income 9,337,284 7,822,941 6,271,636
Total Advances/ 40,154,449
48,727,103 47,575,364
Return 19.16% 16.44% 15.6%


Profitability analysis shows the entire performance of a business and if we study the
profitability trend of bank then it will clear to us that it showing a positive trend. Net
profit after tax is decreased as compare to previous year, due to it return on assets,
equity and investment is also decreasing. Not only overall profit is decreasing but also
average profit of all the branches is decreasing. Bank interest income is increasing due
to more advances in this year. This year bank total deposits are also increased and that’s
why interest expenses are showing up ward trend.

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Liquidity Analysis:
Liquidity is the ability to quickly convert an asset into cash without a big effect on the
price. In forex trading, it applies as the ability to buy or sell a currency pair without a
real effect on the price. The more liquid a currency pair is, the less it will move when
large buying or selling orders are executed. Liquidity Analysis includes:

• Advances to Total Deposit

• Interest Coverage Ratio
• Total Financing Funds to Deposit & Borrowed Fund Ratio
• Due from Bank to Due to Bank Ratio

Total Deposits

Year 2009 (000) 2008 (000) 2007 (000)

49,727,10 40,154,449
Advances 47,575,364
73,548,22 60,150,128
Total Deposits 61,634,491
Ratio 67.61% 77.18% 66.75%

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INTEREST COVERAGE RATIO= Earnings before interest and tax × 100

Interest Charges

Year 2009 (000) 2008 (000) 2007 (000)

Earnings Before interest and tax 2,734,505 2,944,594

Interest Charges 6,602,779 4,878,347 4,334,355

Ratio 41.41% 60.36% 44.69%


Borrowings + Deposits

Year 2009 (000) 2008 (000) 2007 (000)

Lendings 2,755,377 3,990,269 3,175,009
48,727,10 40,154,449
Advances 47,575,364
51,482,48 43,329,458
Lending + Advances 51,565,633

Borrowings 9,385,522 8,441,454 5,865,471

73,548,22 60,150,128
Deposits 61,634,491
82,933,74 66,015,599
Borrowings + Deposits 70,075,945

Ratio 62.07% 73.58% 65.63%


BANK RATIO = × 100

Year 2009 (000) 2008 (000) 2007 (000)

Lendings 2,755,377 3,990,269 3,175,009

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Borrowings 9,385,522 8,441,454 5,865,471
Ratio 29.35% 47.26% 54.13%

Overall there is a decreasing trend in the bank’s liquidity ratios which shows that the
bank expanding its business. On the other side it also shows that the bank liquidity is
not in a good condition.

Capital Leasing Analysis:

One where substantially all of the benefits and risks of ownership are transferred to
the lessee. It must be reflected on the company's balance sheet as an asset and
corresponding liability. Capital Lease Analysis includes:

• Debt and Equity Ratio

• Debt to Total Asset Ratio

Long-Term Debt
Shareholders Equity

Long-Term Debt= Subordinated Loans + Deferred Tax Liability +Other


Year 2009 (000) 2008 (000) 2007 (000)

Subordinated 1,198,800
1,197,840 1,198,320

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Deferred Tax 425,398
--------------- ---------------------
Other Liability 1,335,446 1,612,082 963,270

Shareholders 6,610,479
7,803,201 7,113,047
Ratio 32.46% 39.51% 39.14%

Total Debt
Total Assets

Year 2009 (000) 2008 (000) 2007 (000)

Total Debt 87,507,071 73,864,207 70,243,581
Total Assets 95,310,272 80,977,254 76,854,060
Ratio 91.81% 91.21% 91.39%
There is an increasing trend in Debt to Total Assets Ratio which shows increase in
financing and decreasing trend in Debt to Equity Ratio.

Portfolio Management Analysis:

The art and science of making decisions about investment mix and policy, matching
investments to objectives, asset allocation for individuals and institutions, and
balancing risk against performance. Portfolio management Analysis includes:
• Advances to Total Assets Ratio
• Investment to Total Assets Ratio

Total Assets

Year 2009 (000) 2008 (000) 2007 (000)

Advances 48,727,103 47,575,364 40,154,449
Total Assets 95,310,272 80,977,254 76,854,060

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Ratio 51.12% 58.75% 52.24%

Total Assets

Year 2009 (000) 2008 (000) 2007 (000)

Investment 29,537,179 14,053,177 19,181,52
Total Assets 95,310,272 80,977,254 76,854,060
Ratio 30.99% 17.35% 24.95%

Both the ratios Advances to Total Assets and investment to Total Assets are
decreasing as compared to the previous years, which show lesser portion of Advances
and investment in the Total Assets composition.

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SWOT Analysis:
The overall evaluator of the corporate strengths, weaknesses, opportunities and threats
is called SWOT Analysis.


1- Market Standing:
Pakistan Credit Rating Agency (Private) Limited (PACRA) maintained their previous
rating of ‘A+’ for short term and ‘AA-‘for long term. These rating represent very high
credit quality and very low expectations of credit risk emanating from very strongly
payments of financial commitments. This indicates the success of the Bank’s policies.
Therefore people have trust and confidence in the banks operating profitability.

2- Branch Network:
Soneri Bank has stayed successfully in the market for almost eighteen years and still
opening new branches. They have very carefully selected the places of business and
have provided pleasant and sophisticated atmosphere at their branches. The bank has
opened 15 new branches in the year 2010 and the response from all the branches is
encouraging. Presently 170 branches are fully operational. Branch Expansion
Program is continuing and a number of new branches will be added in the year 2011.

3- Geographical Coverage:

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Branches are also being opened in distant areas like Gilgit and Remote areas are being
linked online. The Bank has its own WEB SITE which customer can visit to acquire
information about the Bank.
4- Customer Oriented:
There ATM is “To provide best possible service to our clients” and all their actions
are geared to achieve this objective. Their MOTTO is “We have more time for you”
and they are trying it to be true. To facilitate their clients, they have made
arrangements and now selling Visa Travelers Cheque with their logo on it.

5- ATM Cards:

ATM card facility has proven to be success. The ATM Card can be used at any
branches who are the member of 1-Link agreement to withdraw money. The Soneri
ATM Card is also the Soneri Debit Card.

6- Service Quality:
Providing superior service, innovation, specialized products and professional
guidance is the main objective of the Bank.

7- Pricing Effectiveness:
Because the bank is a financial institution they do not charge prices of their services
but take charges of these services. Soneri Bank charges very low amount of money
for their services which no other banks charged. This is another reasons that why
customers are attracted towards Soneri Bank.

8- Financial Stability:

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The banking sector remains flushed with surplus liquidity. In spite of intense
competition the results depicts satisfactory performance with 31% increase in deposit,
13% growth in Foreign Trade and pretax profit being 31% more than the last year’s
figure. This financial result of the SONERI BANK provides an ample proof of the
viability and strengths of this new BANK.


As such the bank does not have any strong weakness which it needs to overcome.

1- Competition:
The bank is facing strong competition from the rival banks do the bank need to
provide best quality services to its customers more effectively and efficiently than its
competitors do.

2- More Customers:
The bank should also try to increase the number of its customers. So they also try to
increase the deposit and mare customers.

3- More Branches:
Though it is a Pakistani bank but it should also try to open new branches outside the
Pakistan. So that to improve the Pakistan’s image in the international market.

4- Advertisement:
The bank does not advertise its products on large scale. So it should advertise its name
in the market so that people became aware of this bank.

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1- New Products and Schemes:

Soneri bank is endeavoring to diversity its operations by introducing new products
and various Schemes to retain and enhance its market shares better results, this will
also increased the number of customers. Different Schemes such as Housing Finance
Scheme, Car Finance Scheme & Ghar Finance Scheme has been introduced. These
schemes have provided different opportunities to the customer and a reason to choose
this bank in order to attain the services offer by the Bank.

2- Marketing:
More market shares and customers can be gained through effective strategies.

3- Branch Network:
Due to lenient licensing policies by the State Bank of Pakistan Soneri Bank have more
opportunities to open new branches.

4- ATM Cards:
It’s ATM Card has proven to be an excellent opportunity has received a very good

5- Foreign Exchange Dealings:

A very important is of foreign exchange dealings through which a Bank earns most of
its profit.

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Some developments in the external environment represent threats. Soneri Bank is as
such facing no large threats. Except that there are very large numbers of private banks
in the market which are providing the same services to its customers. They can
overcome this threat by:
• Delivering the benefits better than any actual or potential competitors.
• Target market be located and reached with a cost effective media.
• Bank can introduce new capabilities.
• By offering products at the reasonable prices to which the common man
should have easy excess.

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The department that is responsible for opening and closing an account assumes
immense significance and holds a central place in the basic banking operations.


These accounts are further divided into two main categories, which are as follows:
• Saving Account
• Current Account

Saving Accounts:
Saving accounts are those accounts in which the bank gives the customers profit on
their deposits. Bank also deducts Zakat on this account. For opening the saving
account the customer’s initial deposit must not be less than Rs. 5000.

Current Accounts:
Current accounts are those accounts in which we give no profit to customer on their
deposits. Bank also deducts no Zakat on this account. For appending the current
account the customer’s initial deposit must not less then Rs.10, 000.


This account is also divided into three categories. These are as follows.

• Business Account
• Personal Account
• Club Society Account

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Business Account:
This account is related to the business community. This account is also further
subdivided into three categories.
• Sole Proprietor Account
• Partnership Account
• Limited Company Account

Sole Proprietorship / Individual Account:

• NIC/ Passport Photocopy
• Letter from Proprietor Confirming “Sole Proprietorship”

Partnership Account:
• Partnership deed certified copy
• NIC photocopies of all partners.
• Partnership mandate for account signed by all the partners
• A letter duly signed by all the partners containing the operating instructions of
the account also has to be taken.

Limited Company Account:

Copy of certificate of incorporation
• Memorandum of Association
• List of Director’s
• Copy of board resolution
• Certificate of Commencement of Business
• Copies of NIC of Director’s
• Latest copy of Form-29

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Personal Account:
The accounts related to persons other than companied and partnership firms are called
personal accounts. These are further subdivided into three categories:
• Personal Account
• Joint Account

Personal Account:
Personal account is own by only one person and not more then this. This account can
be current or saving depending upon the will of the customer.
The documents required are:
• Copy of NIC

Joint Account:
Joint accounts are those accounts that are owned by 2 or more persons. This account
may also be either saving or current depending on the customer’s will.
Documents required are:
• Copy of NIC of all the Member of Joint Account

• Copy of Rules/ By-Laws
• Copy of Registration (if applicable)
• List of Executive Member Management Committee/Management
Board etc.
• Certified Copy of Resolution
• NIC of all Members of the Management Body


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This account is also divided into two categories. These are as follows:
• Local Currency Account
• Foreign Currency Account

Local Currency Account:

The account dealing with the local currency is called local currency account.

Foreign Currency Account:

The account dealing with the foreign currency is called foreign currency account. This
account is further subdivided into following.
• Euro
There are two things that always accompany an account opening form;
• Signature Specimen Card.
• Cheque Book Requisition.

Procedure of Opening an Account :

The Account Opening Form:

When a client comes to the bank, and makes a request for opening of an A/C. The
officer first gave him a prescribed application form.

Completion of the Form:

The name, occupation, and complete address of the person opening the account are
written in the columns provided in the form. One signature of the person is taken on
the face of the form and one is taken on the backside.

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Specimen Signature Card (S. S. Card):
The signatures of the client are obtained on a specimen Signature card. These cards
are obtained in duplicate with two signatures on each card from the customer. Every
time a Cheque is received for a payment from the client, the signature on the cheques
are verified by comparing them with the S.S. Card.

Issuance of Account Number:

When all the formalities are completed then the final approval of account has to be
taken from the Branch Manager. After obtaining approval of the branch manager an
account number is allotted to the customer and all the information is entered into the
computer. Then that account number is printed on the Cheques Book, S. S. cards and
account opening form.

Issuance of a Cheques Book:

After opening an A/C with the bank, the A/C holder once again makes a request in the
name of bank for the issuance of a cheques book. The A/C holder mentions title of
A/C, A/C number, sign it properly and mentions the no of leaves he requires.
Normally BAL issues a cheques book having at least 25 leaves.
Every cheques book also contains one leaf that is used for another issue of a cheques

Entry of a Cheques Book:

Before issuance of a cheques book, the employee performs certain functions. They
• Stamping every leaf with specific A/C number.
• Enters it in the cheques book issue register.
• After entry in the manual register, the employee issues the cheques book to
the A/C holder after his/her signature on the register.

Recording in Computer:
After opening of account, all information regarding the account is entered into the

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computer. Currently, a program named Bank Smart is being used for this purpose.
Record of all the transactions regarding the account of a customer is kept updated in
the computer.

Procedure for Closing an Account:

The procedure followed for the purpose of closure of an account is described in the
following steps.
The client who wishes to close an account first has to give an application, duly signed
on the pre-printed application of the bank. The client has to attach this application
with the liability form (explained below). The client can also give an application on a
plain paper, but correct signatures are very necessary.
Then it has to be made sure that if the account to be closed is a saving or Foreign
Currency Account then the account balance before closing should be zero. In case of
these types of accounts the bank does not take any closing charges. If a client wishes
to close a current account then the bank charges Rs.150, so at the time of closing the
balance should be Rs.150.
Along with the application to close the account client’s Cheques book is also received
from him and then it is destroyed in order to prevent any misuse in the future.
A liability form is filled and sent to the Trade Finance Department and Credit
Department in order to check that the customer does not owe the bank a single penny
in any regard. A debit voucher and a credit voucher are also attached to the liability
Form is returned to the account opening department then the original account opening
form pasted in the ledger when the account was opened is marked ‘account closed’
along with the date on which it is so marked. One thing has to be taken into
immediate consideration that the account number allotted to the client (who has
closed his account), after closure of the account becomes useless and is not allotted to
any one in the future.

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This department of bank is mainly responsible for the handling of cash deposits and
encashment of cheques issued by the account holders. The following are the sections
of the cash dealing department
• Receipts of Cash
• Encashment of Cheques
• Cash Receipt Section
The depositor uses depositor slip/vouchers for depositing the amount. Client fills
these vouchers, fulfilling all requirements.

Cheques Encashment is made in Four Steps:

• Receiving of Cheques
• Verification of Signatures
• Computer Terminal Process
• Payment of Cash

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One of the basic economic functions of banks is to receive deposits and to honor
cheques drawn upon them. So, cheques are a most commonly used instrument for
making payments by account holders.

Now the question arises that how these cheques & other negotiable instruments drawn
on one bank are deposited in other banks and money is transferred from one bank to
another. Clearing House has provided this facility. Clearing house facilitates different
banks to get their cheques drawn upon other banks to be cleared.

Cheques lodged in clearing constitute two types of clearing:

• Outward Clearing
• Inward Clearing

Outward Clearing:
When cheques and other negotiable instruments drawn upon other banks like MCB,
NBP of the same city (as Lahore) are presented in Soneri Bank Limited to deposit

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them in the respective payee’s accounts, these instruments are lodged in outward
clearing of Soneri Bank limited.
When the cheques are presented in SBL to be deposited in their respective payee’s
accounts, different stamps are put on cheques before their lodgment in outward

Crossing the cheques:

Crossing means two parallel transverse lines, drawn across the face of the cheques
with or without words written in between them. Crossing may be general or special.
In clearing, cheques are crossed specially. Cheques are stamped with bank’s name
between two transverse parallel lines to constitute special crossing. After the cheques
have been crossed specially, the holder cannot receive payment except through the
banker named on the cheques.
Basic advantage of crossing is to save the instrument to go it from illegal hands. If,
crossed cheques is lost or stolen, there is no risk of wrong payment. So it is an
effective means of minimizing the risk of loss or forgery.

Clearing Stamp:
After the cheques have been crossed specially, clearing stamp is put on the cheques
and other instruments, with the following day’s date, as these cheques would have to
be presented in their concerned drawee banks on the subsequent day.

Endorsement Stamp:
It means anything written or printed upon the back of an instrument. So, at the end,
the cheques are endorsed in full (endorsed specially) by putting the stamp with words
describing “Payee’s account Credited in Soneri Bank Limited.
After putting these three stamps on cheques & other negotiable instruments, they are
sent to NIFT (National Institutional Facilitation Authority) with Add List. NIFT after
segregating the cheques of different banks delivers them to their concerned banks,
which constitute the inward clearing for those (drawee) banks.

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Inward Clearing:
Cheques and other negotiable instruments (PO, DD etc.) drawn on Soneri Bank
Limited, Allama Iqbal Town, sent by other banks, constitutes the inward clearing of
SBL, Allama Iqbal Town. After having all the stamps and dates of cheques
confirmed, the concerned drawer’s accounts are debited (in Soneri Bank Limited) and
main branch’s account is credited by the total amount.

When cheques and other negotiable instruments drawn upon other banks outside the
city are presented in Soneri Bank Limited, Allama Iqbal Town to deposit in payee’s
accounts, then instead of clearing, these instruments are lodged in collection and
constitute outward bills for collection.
Cheques of cities, where Soneri Bank Limited branch exists (e.g. Islamabad,
Faisalabad etc.) are sent to that branch where these cheques are lodged in is outward
clearing. Otherwise, they are directly sent to the drawee bank. Postage & other
charges are deducted on account of payee according to Schedule of Charges.

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It is probably the only department in the entire bank where there is almost no direct
customer dealing. Two types of accounts are there which are as follows:

Inter-Branch Accounts:
Like other banks, Soneri Bank Limited has a network of branches all over the country.
These branches in different cities are interlinked with each other through their
correspondent accounts in other branches.
So, all payments from one branch to another branch (in the same city or another) are
made by debiting and crediting these inter-branch accounts.

Inter-Bank Accounts:
Like inter-branch accounts of a bank, different banks have correspondent accounts
with each other. Main branches of banks in a city maintain these inter-bank
accounts. So, money is transferred from one branch of a bank to another bank’s
branch through these inter-bank and inter-branch accounts.
The accounts department deals with various routine activities for the bank. The main
activities performed by it are:
• Budgeting
• Reporting
• Maintenance & Depreciation of Fixed Assets
• Miscellaneous Functions
• Budgeting
Accounts department of bank, for a year makes budget of branch. Fiscal year of bank
starts from January 01 and ends on December 31. The accounts department starts
preparing budget from October for the next year.

• The budget is based on forecasting through past performance First of all, the
bank reviews what are its sources of funds and where it can utilize these

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• The main sources of the bank are deposits, borrowing from other banks,
borrowing from SBP, bank’s paid-up capital, its reserve fund, profit generated
by the bank.
• The budget is submitted to the head office for recommendation and
• Monthly budget meeting is held by branch managers to analyze the monthly
performance. Budget and actual performances are employed and variance is
computed for analysis.
• The management will then drive the reasons for the variance and take remedial
measures to achieve the targets.

The accounts department, in the form of reports, clubs the details of various
departments together. Each and every minute detail is provided in weekly, monthly
and annual reports. The reports are submitted to head office, SBP and to the
The accounts department prepares many reports, of which the most common are:

• Statement Of Affairs
• Income & Expenditure
• Foreign Currency Report
• Outstand Receipt Report
• Subsidiary Statement
• Currency Wise Deposits Report

Maintaining of Fixed Assets & Their Depreciation:

Accounts department maintains the record of all the assets and charges depreciation
on them. The bank normally uses the straight-line method to compute the
The accounts department prepares asset purchase report and asset sale report after

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every 6 months that helps in changing the depreciation. It is calculated on monthly
basis and charged yearly.
Bank not only depreciates the existing assets but also the assets transferred in and
transferred out.

Miscellaneous Functions:
The accounts department also performs some other miscellaneous functions like:
• Reconciliation Statements.
• Closing Entries.
• Foreign Exchange Forward Transaction.
• Reconciliation statements.
• The bank prepares reconciliation statement with head office and SBP.

Head Office:
Reconciliation with head office is done in reconciliation department. The branches
send their reports to the head office. They check the posting of all the entries if
outstanding, which has not been posted by branch or head office. The reconciliation is
carried out in the head office and accounts department handles quarries.

State Bank of Pakistan:

The SBP keeps the record of every scheduled bank. The bank statements and
statements of SBP are reconciled on daily basis. Reconciliation is basically setting of
outstanding entries. The reconciliation statement contains two sides. One contains
entries originated from bank but not responded by SBP and on the other side entries
originated by SBP but not responded by bank.

Closing Entries:
Accounts department also passes the closing entries on monthly, 6 monthly and yearly
bases to calculate the profit and analyze the overall performance for a certain period.

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Foreign Exchange forward Transaction:
In the past, the banks had to keep their foreign exchange with SBP on the agreement
that SBP will purchase the foreign exchange on book rate and charge a fee for
covering the risk.
This whole transaction was known as foreign transaction. Now this facility is not
available. Now banks can avail it by renewing their limit on old accounts with SBP.

The predominant functions performed by the accounts department can be categorized
into two broad categories.
• Daily Activity Checking
• Report Generation

Daily Activity Checking:

In order to facilitate double-checking of all the transactions done, every concerned
official also passes vouchers. At the day end all the vouchers passed by various
officers working in different departments are given to Accounts Department.
Furthermore the I.T. department also prepares a report which constitutes of the
computer print outs of all the transactions / entries which have been fed into the
computer system of the branch that day.

Report Generation:
The exact number of reports generated by the accounts department on a daily, weekly,
monthly, bi-yearly and yearly basis is somewhere in the bracket of 500. It is neither
necessary nor possible to get acquainted by all of these reports in a short period of
time. Some of the common reports are:
• Daily Advance And Deposit Position
• Daily Exchange Position
• Daily Fund Management
• Closing Reports

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• Monthly Assets & Liabilities
• Monthly Budget Review Report
• Monthly Monitory Statement
• Monthly Performance Review Report
• Schedule Of Maturity Distribution
Besides cheques (the primary notes of exchange in a bank), banks also handle
Promissory Note, Bills of Exchange, Bank Drafts, Pay Orders, Traveler Cheques, Pay
Slips, Call Deposit Receipts; as negotiable instruments.

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Pay Order (PO):

“Pay Order is a negotiable instrument made by the bank, on account of a customer, to

pay on order the specified amount”.
Pay Orders are used to make payment or to transfer money, with in the same city. Pay
Order is always drawn on the bank that has issued it.
Following are the parties to a pay order:

Purchaser: Is a person, firm, company or local authority.

Issuing / Paying Branch: Which issues / pays on presentation?

Payee: Is a person named therein?

Making of PO:

When a person requires a Pay Order (made by Soneri Bank Limited, Allama Iqbal
Town), he is asked to complete the prescribed application form in which the amount
of pay order is to be stated. Certain amount of commission and advance tax is charged
on issuance of pay order.
After having the total amount deposited in the bank (in cash or through cheques, in
case of account holder), pay order is issued in favor of the payee.
Like cheques, when pay orders issued by Bank, are presented in other banks to get
them deposited in the payee’s accounts, they constitute the outward clearing for those
banks and inward clearing for Soneri Bank Limited, Branch Allama Iqbal Town.

Demand Draft (DD):

Demand Drafts are used to make outstation payments or to transfer money, out of the
city. Therefore, a DD is always made for a particular city.
The followings are the parties to a Draft:
Purchases: Is a person, firm, company or local authority.

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Issuing or Drawing Branch: Which issues a draft on another branch?

Drawee Branch: Is one on which a draft is drawn.

Payee: Is a person named in the Demand Draft to whom or to whose order the money
is directed to be paid.

Making of a DD:
Suppose a customer requests his Soneri Bank Limited Branch, Allama Iqbal Town to
provide him a DD made on his account for a particular city like Islamabad. Then,
after having the total amount to be deposited with application form, demand draft is
issued in favor of the specified person in Islamabad (supposed) and is drawn on
Soneri Bank Limited, Islamabad Branch.
So, when this demand draft is presented by payee in any bank, it constitutes the
inward clearing of Soneri Bank Limited, Islamabad Branch.

Cancellation of PO & DD:

After issuance of Pay Order, Demand Draft by Soneri Bank Limited, Allama Iqbal
Town, Lahore, if any one of these has to be cancelled by the customer, it is returned in
the bank. Then, after deducting the cancellation charges of Rs.100, the remaining
(net) amount is paid to the customer through Cash Payment Voucher.

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Corporate Banking & SME



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Finance is the most important source of earning for the banks. SBL is also giving full
attention towards this aspect and it is also obvious from the growing portfolio of
advances and from very low delinquency rate. The credit portfolio of this institution is
in a very much better shape than other financial institutions of Pakistan and the credit
goes to the management and the staff who are concerned about the quantity and
quality as well.
Finance department at developed branches of Soneri Bank Limited is usually
segregated into:

• Credit Marketing
• Credit Administration

Credit Marketing:
The principal responsibility of credit marketing is to attract good customers to avail
credit facility from Soneri Bank limited.
The people who constitute the credit-marketing segment of the credits department are
termed as the credit officers. Credit Officers are supposed to be really good at
assessing and determining the financial soundness of a company or an individual.

Credit Administration:
The major responsibility of the people working in the credit administration is to issue
Guarantees, monitor the periodic disbursement of Pledged Commodities, and perform
the job of providing finance against Imported Merchandise and finance against Trust

Types of Borrowers:
Before a bank starts lending, it has to classify its target customers in to groups of
similar ones in order to simplify the provision of credit to them. Soneri Bank Limited
has divided its clients into the following heads:

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• Individuals
• Existing account holders
• Staff members
• Close relatives of staff members
• Employees of other banks
• Joint accounts
• Business entities
• Sole proprietorship
• Partnership
• Limited liability company
• Joint venture
• Group accounts
• Others
• Clubs and associations
• Federal, provincial and local government bodies
• Traders
• Contractors / construction companies
• Transport, storage and warehousing
• Property dealers
• Manufactures

Kinds of Credit – General Overview:

The three basic kinds of credit have been transformed in to various credit
facilities/products by banks. These are;

Short Term Credit:

Short-term credit is that type of credit that is to be repaid with in a time span of one
year. Short-term credit secured by 100% cash margin is considered to be the ideal
way to extend this type of credit.

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Long Term Credit:
Credit that is extended for a relatively long time (which may extend to ten years), but
practically speaking long-term credit facility is extended for a time span of not more
than five years.

Kinds of Credit Offered By Soneri Bank Limited:

Letter of Credit (L/C):

Letter of credit is a short-term non-fund based finance facility. LC is a bank’s written
undertaking given to the exporter for payment of a certain sum of money on behalf of
the importer, provided the exporter tenders to the bank, or its overseas agents, the
specified documents within a specified period in accordance with the terms of the

Letter of Guarantee (L/G):

Apart from letter of credit Soneri Bank Limited also extends another non-fund based
credit facility for its customers i.e. Letter of Guarantee or more commonly known as
The basic difference between a letter of credit and a letter of guarantee is that in case
of L/G the liability has to be retired four or five days before the actual date of
maturity, but in case of L/C the customer can retire his liability after maturity after
paying some amount as interest.

Finance against Imported Merchandise (FIM):

In case of finance against imported merchandise, the importer gives the imported
goods into the effective pledge of the bank and avails the credit facility against the
pledged goods. There is a slight technical difference between ‘pledge’ and ‘effective
In case of pledge the imported goods come under the banks ownership when they
reach the desired go down that is under the supervision of the Muqadams, appointed

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by the bank.
But on the other hand in case of ‘effective pledge’ the goods are under the ownership
of the bank even when they are being transported from the port to the go down. So, in
case of effective pledge the bank must make sure that the goods are comprehensively

Finance against Trust Receipt (FATR):

The mechanism, with which Finance against Trust Receipt works, is identical to that
of Hypothecation. The logical rationale behind FATR is that all the imported goods
cannot, by nature, be given to the effective pledge of the bank; imported goods could
be of perishable nature or they could be of central importance for the operations of the
business concern. In such a case the goods are hypothecated and finance is extended.

Credit Proposal:
In order to avail any of the credit facilities a proposal (case) has to be made approved
by the Branch Credit Committee and then subsequently by the Credit Division at the
Head Office. The credit proposal can be categorized in to two types.

Credit Line Proposal (CLP):

A credit line proposal is made for those clients whose credit limit has been approved
by the banks’ credit department.

One Time Transaction (OTT):

An OTT is prepared for a client who has no approved credit limit, but the bank is
doing business with that client on a one-time basis.

SBP Regulations:
The state bank of Pakistan has laid down some principles in regards the lending of
credit to customers. Prudential regulations form the backbone of such regulations.
Prudential regulations forbid the banks to take up exposure to a single borrower or a
group of related borrowers in excess of 30 % of the bank’s equity base of which Fund

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Based (Cash Finance or Term Finance) should not exceed 20 % of the bank’s equity.
Non Fund Based (e.g. Letters of Credit, guarantees) can be allowed to any extent
within the parameter of 30%.

Banker’s Lien:
Lien is the right of a creditor, who is in actual or constructive possession of his
debtor’s property, to retain such property until the debt due to him has been repaid.
The borrower is still the owner of the property, but the lender has possession of the

Financial Appraisal:
Financial statements of the customer for three or five years should be summarized,
analyzed and detail comments regarding the past performance, sales, profit, stock
turnover, collection period, payment period, working capital, debt/equity etc. will be
recorded. Condensed statements and representative ratios shall be incorporated in the
text of the report. In case of new customer, financial projections for the next three
years of the project are analyzed for making a decision.

Financial Projections:
A complete financial forecast including earning and cash flow projections should be
prepared. Estimated income statements and balance sheet for at least three operative
years of the project along with related data would be prepared. The report shall
contain full description on the major aspects of the financial plan, earning, forecast
and prospective financial position.

CIB Report:
In all cases, latest CIB reports from SBP should invalidity obtained which is presently
available on line for all the banks and attached with the proposal. Customers whose
CIB report shows overdue / default with other financial institutions must not be
provided financing facility unless there is a reason recorded which warrant extension
of financing facility by SBL.

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Financial Ratio:
The Ratio was considered to be useful tools in the bands of the bands of the financial
analyst for judging the performance of the project. The computation of a number of
basic test ratios (current ratio, liquidity ratio etc) would help in casting light on
different aspects of projects. It should be noted that ratio analysis is not conclusive. It
sets forward the facts to the management for decision making.

Working Capital:
The working capital needs of the customer’s company should be carefully estimated
to avoid excessive financing. The tied up period of funds for raw material, finished
goods and credit sales will be determined on the basis of experience and realistic
assessment of the condition and trends in the industry.
The following expense should be given the recognition while estimating the working
capital requirements for the period for which raw material goes through works in
process, finished goods are held in stock and sale proceeds remain uncollected.

Approving Authority:
Depending upon the exposure to be taken, the approving authority for approval of
financing shall be as per the basic operational manual, credit & investment and follow
the policy for financing approvals.
Finance proposals will be approved by respective committees in accordance with the
authority delegated to each committee.

Bank References:
Bankers of the client may be approached for obtaining a confidential report on:
• Business reputation of the company and management
• Resource position
• Their experience in the line of business

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• Credit worthiness and reliability

Markets Checks:
Information should be gathered on the reliability and business reputation of the client
and documented.

Cash Flow :
Analysis of the present and future financial capability of the client is critical to
determine the cash flow coverage of the finance.

Risk & Mitigates:

Weaknesses in the proposal i.e. client is in loss, negative Govt. legislation etc. will be
mentioned along with mitigating factors / strength which forms justification of the
recommending the proposal.

Future Outlook:
The future market and economics appraisal should cover study of overall market,
local as well as foreign, for the product and sales forecast of the company’s product.
Since the sale forecast is the key basis for the technical and financial appraisal of the
project to determine the size and design of the plant and to develop income flow of
the enterprise, it should be based on realistic assumptions.
A critical and in depth appraisal of the following factors may be undertaken supply
and demand for the products, post trends, present position, expected growth in
demand, import and company share in the market, competition etc.

Modes of Securing Advances:

Pledge is a bailment of goods as security for payment of a debt or performance of a
promise. Bailment means delivery of goods by one person to another for some
purpose, under a contract that the goods shall, when the purpose is accomplished, be

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returned or otherwise disposed according to the directions of the person delivering
The person delivering the goods is called the pledgor or pawnor and the persons to
whom the goods are delivered are called the pledgee or Pawnee.
A pledge may be in respect of goods, stocks, and shares, document of title to goods
and any other moveable property. However, to avoid any dispute a letter of pledge is
taken by bankers duly signed by the borrower, so that there is then, no doubt about the
intention of the pledgor. A charge by way of pledge of goods does not require
registration under the companies Act.

In case of pledge, godowns are in the premises of the clients under the custody of
Macadams, whose honesty cannot be bought at any time. Therefore greater risk is
imposed by the client. So, the bank must be satisfied with the honesty and credibility
of the client.

Nature of Commodity :
The banker must be aware of the nature of the property i.e. whether the commodity is
a perishable item like sugar. Also the commodity being pledged should be easily
saleable, so that in case of default of client, bank can easily sell it in the market.

Proper Valuation:
Whenever goods are pledged, the banker should be aware of the true cost of the
product as the client always overvalues his products. Sales taxes, excise duties are
also paid on the finished goods. So a banker must have knowledge regarding all these

The goods offered for security must be properly insured. Banker must analyze all the
associated risks of the goods.
So, to cover these risks banker should decide about the insurance of the commodity.

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Macadam :
People who look after the pledged goods for bank are called Macadams. If cotton
(raw material) is to be pledged by the bank, it is kept in the godown of the company.
So, to make these goods secure, the bank appoints its own men called Macadams to
take care of stock.

A mortgage is the transfer of an interest in specific immoveable property for the
purpose of securing the payment of an existing or future debt or the performance of an
obligation that may give rise to a financial liability. Before advancing mortgage
against immovable property as security, the bankers conduct following preliminary

Nature and Value of Property:

The bankers satisfy themselves that whether the property is suitable for security
Purposes and that in case of forced sale he would not suffer any loss. For this purpose,
the bankers inspect the property and property visit report is prepared. Also, the
bankers hire the services of different valuators to assess the right value of property.

Character :
A borrower’s character can indicate his intention to repay the advance, since his
honesty and integrity is of primary importance. If the past record of the borrower
shows that his integrity has been questionable then the bakers usually try to avoid
such a customer.

Capital :
The bankers also check the property capital of the borrower. This property can be kept
as a security of loan. In other words if the businessman’s financial condition is sound
then can be given certain amount of credit, otherwise not.

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CIB Report :
Bank cannot sanction any credit to a customer, unless it gets Credit report from CIB
(Credit Information Bureau, SBP). Therefore, first of all, the banker requests CIB to
provide him the credit report of client. This report indicates all the credit facilities
(outstanding) availed by the client.


Sound marketing skills are required to actually attract the walk-in customer to select
Car; still stronger skills are needed to scan the incoming customer for validity and
long-term liquidity. This is because the client has to pay only 20 % of the actual price
of the car (minimum) where as the bank has to put in the rest 80 %. The rate of rent
charged by Soneri Bank for the car is 14%.
Another thing to note here is that Soneri Bank Limited finances only brand-new cars.
It does not finance second hand cars because of the concern of exploitation or
improper ownership at the time of sale.

Purpose of Finance:

Purchase of brand new:

• Un-registered cars for private use.

• Un-registered light commercial vehicles for private use.

Eligible Borrowers:

• Salaried Persons
• Self Employed Professionals
• Business Persons

Financing Amount:

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• For Cars up to 2000 CC: Rs. 1.0 Million
• For Cars exceeding 2000 CC: Rs. 2.0 Million

Down Payment:

• On finance up to Rs. 1.0 M: Minimum 15% of the vehicle price.

• On finance over Rs. 1.0 M: Minimum 20% of the vehicle price.


• Maximum repayment period is 5 years

Mark-up Rate:

• 1 year KIBOR + 4% p.a., to be revised on each anniversary of finance.

Processing Fee:

• Rs. 2000/- per approved application.

Service Length:

• Minimum 2 years of confirmed service with present employer in case of

Salaried Person.


At the time of Application for finance applicant’s age must not be more than;

• 55 years in case of Salaried Persons

• 60 years in case of Self Employed / Business Persons

Debt Burden:

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• Monthly repayment installments not to exceed 40% of the net take home
salary or 40% of declared monthly income (taking into account other
financing facilities availed from other Banks/DFIs).

Pre-Payment Penalty:

• 2% pre-payment penalty on outstanding principal amount of finance being


Late Payment Charges:

• Rs. 500/- per installment per month.

Insurance of Cars / Motor Vehicles:

• Cars / Motor Vehicles financed are to be comprehensively insured with

any of the Insurance Companies listed on the approved panel of Soneri
• Insurance Premium is payable up-front for each year during the life of the


• Documentation Charges at actual.

• Income Estimation Charges (if applicable).

The Procedure Followed to Finance a Car:

Step One:
The Client Submits Application and Required Documents:
The very first thing the client has to do is he has to give an application requesting the
bank for financing of a car. Along with the application the client is suppose to attach

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some documents which are:
• Copy of N.I.C
• Copy of Utility Bill(s)
• Bank Statement for last six months (from the date of application)
• Signature Verification Form
• Proof of Proprietorship/Partnership
• Copy of driving License
• 2 Passport Size Photograph
The application form along with the personal data also contains the home address, the
address of the place of business (if the client is a business man), and two references.
These three things are of immense significance for the verification officers. Moreover
in the application form the client has to mention how much down payment he is going
to make.
It is a policy matter of Soneri Bank that the minimum percentage of down payment is
20 % i.e. the client must at least pay 20 % of the sale price as the down payment. If a
client feels like paying a higher percentage as down payment than there is no higher
limit; he can pay as much he wants to, provided that after he pays his down payment
the amount to be financed by the bank does not go below Rs.200,000.
The down payment apart from 20% (minimum) of sale price also includes.

Step Two:
Verification Process by the Verification Officers:
This step embodies immense significance as the results of this very step reveal
whether the client is genuine and trustworthy and whether all the details provided by
him are true or not.
What the verification officers do is that they first visit the house of the client and
certify that the client has provided the bank with the correct residential address.
Then they inquire about the conduct, character, behavior, occupation, and other
activities of the client from at least two of his/her neighbors. After being satisfied the
verification officers visit the place of business (if the client is a business man). There
they first make sure that the said business actually exists and the

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factory/organization/company actually is situated at the said place.
Then the verification officers either visit or call any one or both of the references
given by the client in the application form. When all aspects of the verification
process are complete then what the verification officers do is that they prepare four
reports namely.
• Business office verification report
• Residence verification report
• Reference verification report
• Telephone verification report
These reports are than filed in the proposal file and these constitute an integral part of
the proposal.

Step Three:
Preparation of the Proposal File:
Once the customer’s credibility is verified then the file is prepared for
acceptance/approval by the branch Credit Committee.
This preparation calls for attachment of certain documents apart from those that were
provided by the client along with the application. These documents are:
• Borrower’s Basic Fact Sheet
• The Proposal Sheet
• A Check List
• Credit Information Bureau Report
• Verification Reports
• Printed Statement of Customer Inquiry Generated by the System
After the approval stage the client is called to the branch and the process of legal
documentation is under taken. For this purpose the operations personnel gets the
signatures of the client on all the legal documents including the offer letter which is of
prime importance. The list of legal documents the client has to sign is as follows;
• The account opening form as a result of which the client could give the post-
dated cheques for payment of installments.

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• The letter in which the client acknowledges the Finance Limit that has been
provided to him by the bank
• The agreement for financing the motor vehicle
• Letter of hypothecation of motor vehicle
• Irrecoverable power of attorney
• Letter of authorization to take possession of motor vehicle
• Bill of exchange without recourse to the drawer
• Delivery acceptance form
• Transfer letter
• Promissory note
• Letter of hypothecation of movables
Apart from these legal documents one of the most important documents is the offer
letter. The offer letter basically consists of a brief description of the following;
• Amount Of Finance Facility
• Period Of Finance Facility
• Purchase Price Payable
• Rate of Rent
• Payment Schedule Of Purchase Price
• Insurance Premium
• Prepayment
• Documentation
• Down Payment
• Administration Fee / Processing Fee
• Availability
• Cancellation
• Purchase Of Motor Vehicle
• Disbursement Of Purchase Price

Step Four:

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Receipt of Down Payment and Post Dated Cheques:
When all the legal documents are properly signed then the customer is asked that his
share of financing (the down payment) is required. The down payment apart from
20% of the sale price also includes the processing charges, the registration fee, the
insurance premium of first year, and Advance first month’s installment.
The customer comes to the bank deposits this amount and also gives the bank post
dated cheques, duly signed. These cheques are of the amount of installment due to the
customer on monthly basis.
Step Five:
Getting the Car Insured:
Now come on the step to insure the car for which the financing is done. The bank has
to get the car insured, as it is a part of the car financing agreement that the car has to
be fully insured. What the bank does is that it issues a letter addressing the insurance
company specifying all the details of the car to be insured and also communicates this
to the insurance company as to which show room the insurance inspector will have to
go to locate the said car.
The inspector goes to that particular show room and, after duly inspecting the car
makes an inspection report. After two or three days of the preparation of the
inspection report the representative of the insurance company comes and hands over
the insurance policy to the bank. This insurance policy is in the name of the respective
client, but care of Soneri Bank Limited, Allama Iqbal Town, Lahore is vividly

Step Six:
Establishment of Delivery Order and Demand Draft (In The Name Of the
When bank has got physical possession of the insurance policy the car dealer is
suppose to send the bank a quotation of the car being sold, on his official letter head.
On the basis of that quotation the delivery order is being made, which contains the
instructions for the dealer that now he, should hand over that car to the customer.
The bank will not pay to the dealer the bank would make a Demand Draft in the name

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of the manufacturer and hand it over to the dealer and the dealer would give it to the

Step Seven:
Getting the Vehicle Registered:
When the manufacturer gets the payment against the demand draft then he sends the
Invoice to the bank. This invoice contains all the details of the vehicle namely; price,
customer name, bank name, color of the vehicle, mode of payment etc.
If the car is completely ready for the delivery this invoice will also contain the engine
number and the chassis number, but if the car is not ready for delivery i.e. it is in the
booking process than the invoice will not contain these two items. The bank gets the
vehicle registered with the help of its private agents on the basis of this invoice.


Soneri Bank Limited with the objective to touch every aspect of their customer’s life
has a product in the shape of "housing Finance".
Considering the long-term tenure of the facility, erratic real estate market and the
inherent risks pertaining to house property, extra vigilance is required to determine
the genuineness of the title documents, perfection of securities, accurate valuation and
strict monitoring of the repayment of financing. To proceed further following
important things should be taken into consideration.
Housing Finance is an investment facility in which the Bank and the Customer jointly
purchase and or construct a property / house / flat etc.
Purpose of facility is to finance the purchase & construction of private residential real
estate / property.
The finance shall be extended for all types of real estate / properties, that is, for
purchase / construction of houses, apartments, bungalows, town house etc.
The target customers for housing finance are salaried/self employed individuals,
business persons & employees of corporate entities.

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Types of Housing Finance:
Tailored keeping in view the specific need of the customers, and is provided under
following categories:

Products Purpose

Soneri Ghar Buying Purchase of already constructed housing unit on

Diminishing basis.

Purchase of land and subsequent construction thereon which

Soneri Ghar Construction is to be completed within 12-15 months from the date of
disbursement of the first trance.

Renovation, extension, restoration and enhancement of an

Soneri Ghar Renovation already owned housing unit.

Taking over the existing house finance facility obtained by

Soneri Ghar BTF the customer from other financial institutions.

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Product Minimum Tenor Maximum Tenor
Soneri Ghar Buying 3 Years 20 Years
Soneri Ghar Construction 3 Years 20 Years

Soneri Ghar Renovation 3 Years 07 Years

Soneri Ghar BTF 3 Years 20 Years

Equity Participation :
The Debt Equity financing ratio should be in accordance with the following;

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Product Debt/Equity ratio
Soneri Ghar Buying Buying Home 80 % (SBL) : 20 % (Customer)

Soneri Ghar Construction Land: 60 % (SBL) : 40 %(Customer)

Construction: 70% (SBL): 30% (Customer)

Soneri Ghar Renovation Up to 30% of the value, after valuation, of the property
with maximum of Rs. 2.5M which ever is lower.

Soneri Ghar BTF 70 % (SBL): 30 % (Customer)

Mark-up Rates:

• 1 Year KIBOR + 4% p.a., to be revised on each anniversary of finance.

Processing Fee:

Rs. 2500/- or 0.50% of the finance amount whichever is higher (refundable where
case is not approved).


At the time of maturity of the Finance applicant's age must not be more than;

• 60 years in case of Salaried persons

• 65 years in case of self Employed / Business persons

Debt Burden:

Monthly repayment installments not to exceed 40% of the net take home salary or
40% of declared monthly income (taking into account other financing facilities
availed from other banks (DFIs).

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A moratorium of 12 months is allowed in case of finance for Construction.

Pre-Payment/ Partial Prepayments:

In case of Partial Payment / Balloon Payment / Full adjustment, no penalty will be


Late Payment Charges:

Rs. 500/- per Installment per month.


• Mortgage Protection Insurance cover through Bank’s designated Insurance

• Insurance premium on the insurance cover payable upfront each year.


• Documentation Charges at actual

• Valuation Charges
• Legal Opinion Charges
• Income Estimation Charges (if applicable)

Appointment of Lawyer (s):

A reputed lawyer or firm of lawyers on the Bank’s approved list or approved by the
Executive Committee should be hired on non- retainer ship / retainer ship basis to
attend to all legal formalities pertaining the Housing Finance facility. A Lawyer / firm
of lawyers should be selected / approved as and when required.

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Any Other Pertinent Information:

The concerned Chief Managers/Area Manager after completing the appraisal process
shall recommend the appointments to the Executive In charge, Islamic Banking
Division for his approval.

Eligibility Criteria:

The prospective customer identified by the branches should meet the following
acceptance criteria.
• Pakistani national.
• Finance is available in the nominated cities and areas approved by EC.
• Age between 25 years to 65 years (at the time of maturity of finance).
• Minimum household gross annual income of Rs. 200,000 or more.
• Monthly payment amount of Housing Finance should not exceed 35% of the
gross income of the customer. Relaxation in gross income to the extent of 10%
can be allowed by Executive In charge, Islamic Banking Division.
• Permanent employee having a continuous employment of 2 years or more.
• Contract employee having a continuous employment of 2 years or more
subject to the approval of Executive In charge, Islamic Banking Division.
• Self employed individual must be practicing and conducting business for at
least three years with satisfactory track record.
• All customers having a satisfactory financing relationship of past one year
with Soneri Bank Limited.
• Customers having satisfactory financing relationship of past one year with
other financial institutions.
• High net worth individuals.

Aggregate & Individuals Exposure:

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Overall Limits:
The overall aggregate portfolio limit for the Housing Finance shall be determined by
Board of Directors on the recommendation of Executive Committee and should all
times comply with State Bank of Pakistan’s regulations.

Individual Limits:
Depending on the purpose for which the Housing Finance is required, the limits are
given below. Presently the maximum limit prescribed by the State Bank of Pakistan to
the individuals is Rs. 10 M.

Product Minimum Maximum finance

Alfalah Home Buying Rs 0.500 Rs 0.500 Up to Rs 10 M or three times of gross
annual income of the main customer plus 1.5
times of gross annual income of the spouse, which
ever is less.

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Alfalah Home Construction Rs.0.500 Up Rs.0.500 Up to Rs 10 M or three times of gross
annual income of the main customer plus 1.5
times of gross annual income of the spouse,
whichever is less. Property to be constructed on
Istisnaa basis.

Alfalah Home Renovation Rs 0.100 Rs 0.100 Up to Rs 2.5 M or 30% of the value,

after completion, of the property whichever is

Alfalah Home BTF Rs 0.5 00 Rs 0.5 00 Up to Rs 10 M or three times of gross

annual income of the main customer plus 1.5
times of gross annual income of the spouse,
whichever is less.

Approving Authority:
The approving authorities and their limits for Housing Finance Scheme are set out as

Authorities Amount(Rs in million)

Up to Rs. 2.000 M
Branch Credit Committee & or Area Managers
Executive In charge IBD Up to Rs. 6.000 M
Executive In charge IBD, & Credit Division Sub Up to Rs.10.000 M

Housing Finance Proposal and Approval:

The Housing Finance Relationship Officer at the branch will assess the applicant’s
requirements. The real estate planned to be purchased / constructed will be discussed
in detail, and the Relationship Officer will ensure that it complies with the policy

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guidelines of the bank. The area of property will be evaluated in accordance with the
prescribed procedure.
Customer should be asked to provide detailed information about his/her/their financial
position and source of income, repayment capability with supporting documents as
prescribed by the policy / procedures. The proposal will be subject to legal opinion,
valuation of property and reputation of society / authority.
The prospective customer shall complete and sign the prescribed application form.
The designated officer to ensure that all columns in the application are completed in
full and support documents are in order.

Eligibility Criteria are satisfied without Any Exceptions:

Banking Division Where the salary of customer’s spouse is taken into account to
determine the repayment capacity, the spouse may also be made co-guarantor in the
Housing Finance facility.
Where the income of the customer is not verifiable, guidance of Executive In charge,
Islamic shall be obtained.
The following documents shall be submitted by the customer with the application:

Salaried Individuals:
• Copy of NIC to be obtained and checked with original and
checking/verification evidence is documented on copy of an NIC.
• Copy of last salary slip/pay slips duly attested by the Human Resources
Department of the employer.
• Salary Certificate (Original) from the employer, showing gross salary and
• Employment Verification Form from Employer.
• Details of other verifiable income (if any).
Self Employed Business & High Net worth Individuals:
• Copy of NIC to be obtained, checked with original and checking evidence
be documented on copy of NIC.

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• Copy of current professional association/ trade body membership, if any.
• Certified Copies of last six months bank’s statements.
• Copies of last three years income and wealth tax returns.
• Copy of Partnership Deeds (if applicable)

Sole Proprietor:
• Latest Form “29” be obtained (where applicant is a director of a company)
• Letter from company's secretary confirming the status and share holdings,
where applicant is a director of a company.
In case of partner / proprietor / director of company, Bank statement for the last
six months of the business should be obtained certified by their bankers.

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Trade deals with entry / departure of goods into / from one country to another country.
International trade basically is a consequence of an agreement between buyer and a
seller separated by geographical boundaries.
To ensure secured transfer of goods to the right buyer and a right seller, the services
of the Financial Institutions are of great importance. In this relation the banks have
proved to be not only dealers but also the leaders.
The Trade Finance Department has two predominant dimensions namely Exports and
Imports. Thus there are two processes that take place in international trade.
• The buying process (the importer purchases the products from the
• The selling process (the exporter sells the goods to the importer).

The Buying Process:

The buying act exchanges one thing, usually currency, for another of equivalent
value. The objective of the buyer is to obtain the most competitive price and delivery
with the best quality. The buying process begins with locating the source of a good or
service, and ends when it is resold, stocked in inventory, or the service is completed.

The Selling Process:

The selling process exchanges goods and services for currency of equivalent value.
The objective of a sale is to achieve the highest price for the goods while preserving
the relationship for continued business.
Trade finance can be categorized into two departments.
• Imports Department
• Exports Department
Banks Involved in the Processing of Letter of Credit (L/C)
Starting from the establishment of an L/C, till the retirement of documents, following
are the banks involved in the whole L/C Cycle. The number of banks involved in L/C
Processing may vary from 1 to 6. Only a single bank can perform all the functions
through its different branches.

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Issuing Bank (Opening Bank):
Bank opening the letter of credit is called Opening Bank or Issuing Bank. Opening
bank’s undertaking under an irrevocable or confirming L/C is absolute. Therefore,
once an L/C has been communicated to the beneficiary through the bank, the banker
has no option, but to pay provided the other terms and conditions have been fulfilled.

Advising Bank:
The bank that advises the L/C i.e., the bank that physically delivers the L/C to the
exporter on the behalf of the issuing bank. It is a correspondent bank of the issuing
bank situated in the beneficiary’s country or it can also be a branch of issuing bank.

Negotiating Bank :
The negotiating bank receives the documents and delivers to exporter. When the
exporter completes all the documents, after making shipment, the negotiating bank
sends them to the issuing bank.

Reimbursement Bank:
According to ICC Rules, Reimbursement against foreign currency has to be made
through the country originating that currency. Therefore, for dollar transactions,
reimbursement has to be made (received) through the banks situated in USA.
When issuing bank don’t have any branch in USA (for dollar payments), like Bank
Alfalah Limited-IBD, the reimbursement is made through a bank in USA.
Where the issuing bank has Nostro Account, that bank is known as Reimbursement
Bank or Drawee Bank. It is a correspondent bank of issuing bank and makes payment
by debiting the Nostro account.

Intermediary Bank (Collecting Bank):

Intermediary Bank is that where the negotiating bank has its Nostro Account and who
obtains reimbursement against L/C from reimbursing bank and gives credit to the
negotiating bank.

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For dollar payments, intermediary bank would have to be situated in USA. Similarly,
for transactions in GBP, both the Reimbursement & Intermediary banks would be in

Approval of Letter of Credit (L/C):

When the importer has provided all the required documents for the credit, an approval
sheet is put on top of them. This sheet shows the credit limits of the party and if the
tenure is Sight. After, the completion of the approval sheet, the L/C is presented to the
local credit committee of the bank for approval.

Communicating Letter of Credit (L/C):

After establishing the letter of credit, it is communicated to the beneficiary through
many intermediaries.

Transmission of Letter of Credit (L/C):

After issuance, the L/C is sent to the advising bank. There are many ways to transmit
an L/C to the advising bank. These are:
• Through Airmail
• Through Courier
• Through Telex
The medium is used according to the instructions of importer mentioned on the top of
the L/C Application form.

Advising Letter of Credit (L/C):

After transmitting the L/C to advising bank, it is advised (physically delivered) to the
exporter, through advising bank. BAL-IBD has collaboration with a number of banks
worldwide, for advising its L/C’s.
For example, if an L/C has to be advised in Australia, it can be advised through ABN
AMRO or Standard Chartered Bank, Australia.

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Negotiating Letter of Credit (L/C) Documents:
Negotiating bank, after receiving the documents from advising bank, intimates the
exporter. When the exporter makes the shipment and completes all the documents, he
presents them to the negotiating bank. The negotiating bank sends these documents to
the issuing bank, according to the date of negotiation mentioned on L/C, and claims
the reimbursement.

Documents Sent by the Negotiating Bank:

Following are the documents sent by the negotiating bank for the settlement of L/C.

Bill of exchange:
“A Bill of Exchange is an instrument in writing containing an unconditional order,
signed by the maker, directing a certain person to pay a certain sum of money on
demand or at a future determinable period, to a certain person or to the bearer of the

Commercial Invoice :
Commercial Invoice prepared by the exporter signifies the name and address of
importer, invoice price, invoice number and all the specifications of goods being

Packing List:
It is prepared by the exporter to show that the consignment is in accordance with the
order of importer.

Shipment Advice:
Shipment Advice is issued for the insurance company to provide every information
and specifications regarding shipment.

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Certificate of Origin:
This document is a certification for the origin of goods. It certifies that the goods
being imported (or exported) have the origin of a specific country.

Bill Of Lading/ Airway Bill/ Railway Receipt :

Bill of Lading is a document issued by the shipping company that stipulates the
quantity of commodity, weight, port of shipment & discharge, date of shipment and
other specifications.

Insurance Policy (If Applicable) :

If insurance is responsibility of exporter i.e. in case of CIF price, then the L/C issuing
bank also requires the insurance policy along with other documents. Usually, all the
transactions are carried out in FOB or C&F prices.

Covering Schedule :
Along with the above stated documents, the negotiating bank sends its Covering
Schedule on which the instructions regarding the whole transaction are prescribed. It
also mentions the number of each document sent by the exporter.

Scrutiny of Documents:
After receiving all the documents, next and the most important step is to scrutinize the
documents. For this purpose, a list called “Check List of Import Documents” is
All the documents must be in accordance with the requirements of L/C. In case of any
deviation the documents can be rejected and payment can be stopped. Negotiating
bank must be intimated about any discrepancy found, with in 7 days.

Retirement of Documents:
The whole transaction of foreign trade in which an L/C is involved, completes with
the retirement of documents.
The documents that are first lodged in PAD are retired when the importer pays the

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total amount (payable). This amount includes the PAD plus the mark-up charged on
PAD and other charges (mentioned on cost memo).
Upon receipt of payment, when the documents are retired, they are given to the
importer and he gets the consignment cleared from custom authorities (by submitting
the Bill of Entry).
This completes the whole transaction of Foreign Trade, carried out through a Letter of

The Exports Department:

Exporting involves payment in a currency foreign either to the buyer or to the seller,
or to both; and hence entails exchange risk. Any movements in the relative values of
currencies which takes place between the date a contract is signed and final payment
will mean that the seller obtains less (or more) in terms of his own currency than
expects; or that the buyer has to pay more (or less) than planned, and exchange
control regulations may exist in both the seller’s and the buyer’s country.

Conditions for Exporter:

Like an importer, there are certain conditions that a person must fulfill to become an
• The person must be an account holder of Soneri Bank.
• No one can export any commodity until and unless he/she is a Pakistani
and has a valid export registration with the EPB.
• The person must process a valid membership certificate of Trade
Organization, licensed and recognized by Federal Government like a
Chamber of Commerce (e.g. Lahore Chamber of Commerce).
• The person must possess a valid NTN (National Tax Number) certificate.
• A person cannot export any good unless he files a Form E (E stands for
exports) with his application to the bank.
• The person must have the Sales Tax Registration Certificate.

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Bill of Lading:
Bill of lading is receipts for goods for shipment, a contract and a document of title.

It is used to cover against loss or damage which may occur during shipment.

Foreign Currency Accounts:

• Nostro
It is a Latin word meaning ‘our’. The account which a bank maintains with banks
overseas is called its ‘Nostro’ or ‘our’ accounts.
• Vostro
It is a Latin word meaning ‘Your’. The accounts which a bank keeps in its own
books in the name of banks abroad are its ‘Vostro’ or ‘Your’ accounts.

Complete Export Cycle:

The process of export starts with the receipt of the Letter of Credit (or Contract) by
the bank. The issuing bank sends the L/C to Soneri Bank Limited Branch, Allama
Iqbal Town, Lahore through the advising bank. Upon receipt of L/C, an intimation
letter is prepared and is sent to the beneficiary of the L/C, advising him that his
reached Soneri Bank Limited Allama Iqbal Town, Lahore and he should collect it
As mentioned earlier, an E-form is necessary for exports out of the country. It is a part
of exchange control mechanism of the State Bank of Pakistan. When an exporter
receives an L/C, the next job is to get an E-form from the bank. After filling in the
complete information about the goods to be exported, the exporter brings the E-form
to the bank for verification. The bank verifies the contents in accordance with the
documents and not by physical checking. The E-form is a quadruplicate and contains
the following information.
• The Commodity

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• The quantity
• The price
• The port of shipment
• The port of destination
• Terms of shipment
• Export registration number
After getting the E-form verified from bank, the exporter starts preparing for his
shipment. As the banks only deal in documents, so in order to receive the payment for
his good to be exported, the exporter has to send certain documents to the L/C issuing
bank via negotiating bank. These documents have already been discussed in import
A very important step in the export process is to scrutinize the documents, before
sending them to the issuing bank. It requires utmost care and attention of the bank
officer. When the documents are presented in the bank, they are always scrutinized
and they must be in accordance with the requirements stipulated on the L/C. Any
deviation could result in rejecting the documents by the importer, hence causing loss
to the exporter or even to the bank if the documents are to be negotiated.

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During my internship in the Soneri Bank Limited, I really enjoyed to work with the
staff of Branch, Defence Housing Authority, Lahore from 7thJune to 17th
July, 2010 and have a wish to be employee of Soneri Bank Limited. It
was almost impossible to work in all the departments within that limited
time. But on my request, the staff of the branch provided me the
opportunity to work in the different departments for the sake of practical
knowledge. I am really very thankful to branch manager Mr.
Muhammad Tariq that provides me a learning environment in the
During my internship training in the SBL as I early mentioned that I have worked in
different departments & seats and learnt the followings.
This section is based on my observation and experience and rotation during my
internship at the defence housing authority branch of soneri bank limited. Some of the
jobs that i performed or assisted in performing or overlooked in the various
departments were.


In first week I was placed in account opening department. In account opening
department I learned about

Account Opening Procedure:

• The persons who are eligible to open an account
• Kinds of Accounts offered by Soneri Bank Limited.
• Documents required by different categories of persons
• Issuance of Cheques Book
• Preparation of Debit and Credit Vouchers
• Details about Lose Cheques

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• Procedure of closing an account
I worked with Miss Amina in this department. She was often busy dealing with
customers as in this department lots of customers use to come daily. But still she told
a lot about account opening procedure.
She also briefed me how to use bank smart in account opening department. She use to
be very polite with customers as her job requires this. She uses to manage
relationships with customers by providing them better services. Therefore, customers
are pleased.
In this department I worked for 4 days and in this span of time I learned different kind
of accounts offered by bank, stamping leafs, entering of books in cheques book issue
book and entries in system.


As in clearing, accounts and remittances department has very less work to done so
they are combined in single department here in Soneri Bank DHA, Lahore. This
department is collectively called Operations department and 4 people work over here.
I worked with Mr. Hamid and Mr. Qasim. They told me about different activities of
this department. Their attitude is very nice.
They told me about;
• Procedure of clearing a cheques
• Checking of cheques
• Inward and outward clearing
• Within bank transfer
• Different reason of returning a cheques
• Types of clearing stamps
Then they told me about the operations of Accounts department. I learned weekly,
monthly, bi-annually, annually and quarterly reports that are sent to main branch and
head office and even to SBP. Most of these are prepared by system automatically.

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Two main functions performed by this department are daily activity checking, report
generation. Main reports prepared are;
• Daily Advance And Deposit Position
• Daily Exchange Position
• Daily Fund Management
• Closing Reports
• Monthly Assets & Liabilities
• Monthly Budget Review Report
• Monthly Monitory Statement
• Monthly Performance Review Report
• Next he told me about remittances. Here I gained knowledge about inward
clearing and outward clearing. He told me about following things;
• Demand draft (D.D)
• Pay order (P.O)
• Local remittances and outgoing remittances
• Schedule of bank charges for remittances


In second I was transferred to Finance Department. Here Mr. Ahsan led me. He is a
very knowledgeable person and use to know even operations of other departments. He
is in charge CAD (Credit Administration Department) and use to administer all the
credit based activities of branch. His work is very technical and requires deep
knowledge and clear understanding.
Here I learned about the credit facilities provided to customers. He also told what is
financing and how it differs from conventional way of financing. So he clears my
concept about Islamic banking.
This department deals with corporate customers who want to avail this facility. They
can take loan by either mortgage, pledge or hypothecate their property as a security.
Bank can pay for any goods purchased but bank would not give them cash. This is
main difference between Islamic and conventional banking.

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A few pledge cases were also shown to me. There I also use to read stock reports sent
by Macadam. During my placement in this department an audit also came. So I
observed what an audit is. I get the knowledge what is a LPC (Legal Perfection
Certificate) and how it helps in audit proceedings.
In third week, I worked in Soneri Ghar Finance department, with Mr. Ahsan. He is a
very soft spoken and generous person. He is in charge of Ghar Finance department.
He uses to deal with people who want loan to construct, buy or renovate home.
Likewise finance department, this department also did not give any sort of cash to
If any customer want to buy home the department after completely evaluating the
price, would share with customers the amount. Same is the case in construction and
renovation. The ratio of sharing is mentioned above in departments section. He told
me the eligibility criteria of bank and how the approval is taken.


In forth week I worked in Soneri Car Finance department with Mr. Ahsan. Here I
learned how a car is issued to any customer. The procedure followed after filling in
application form along with required documents. Afterwards the verification
procedure starts which is done by head office. Here reference, residence and business
verification is done. After verification the report is send to branch carrying
information whether to accept or reject.
Afterwards data check is done by checking previous credit history of the customer.
For this purpose CIB report is asked for. If everything is clear then car financing
approval is taken from branch approving committee.
Each file of customer contains following documents;
• Statement of Account (last 6 months)
• Salary Slip (in case of salaried person)
• Application form
• Verification report
• Finance proposal

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• CIB report
• Fact sheet
• Personal Financial statement
• Signature verification form
• PBO form
Next week I worked in Trade Finance department with Miss Nazia. She is a very kind
person and told me a lot about trade finance department. Although one week period
was very small to get knowledge of whole of this department but still he explained me
everything that he can in this short span of time.
Here I gained knowledge about shipping terms, shipping documents required, and
procedure to open L/C. She also told me about different kinds of banks involved in
this procedure are Issuing Bank, Advising Bank, Negotiating Bank, Reimbursement
Bank, Intermediary Bank. Then he told me role of these banks.
The main activities of this department are divided into two parts; Import and Export.
And requirements for importers and exporters are different. He also told me about
Parties of L/C, Types of L/c, Import license (registration of import in EPB), Import
bill, checking a scrutinizing of documents, Mode of payment.

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Dilemmas Faced By Organization:

All these problems are faced by the SBL branch DHA, Lahore.

• Software security is not good. It is open to all restriction. Internal control is

not efficient. Use of Flash drive can cause virus in the system.
• In SBL non availability of IT professionals.
• No proper appraisal to evaluate performance of employees.
• Employees are not holding the proper position.
• Finance manager & IT professional is a same person.
• Sale promotion/marketing department are same in the SBL.
• Employees are not cooperative with the trainees / internees.
• There is too much manual work as compared to others bank.
• They introduced there DOT net software last year, so employees are not
complete trained.
• There is no CRO (customer relation officer) in the branch who proper guide
the new coming customers.

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With the help of SWOT analysis we can see that the bank’s strength are much more
than its weakness but still there is room for some of improvements and innovations.

1- Marketing:
Soneri Bank Limited should have a separate marketing department. They should
advertise their products through media i.e. Radio and Television and through Banners,
neon signs.

2- Product development:
Soneri Bank Limited should concentrate on product development innovations

3- Customer Feedback:
Feedback from customers should be taken on regular basis on the products that are
presently offered. Suggestions for improvement should also be asked for. Bank should
ask its valued customers to apprise them of any problem they face, listen to their
complaints and should have a positive attitude towards the customer feedback.

4- Customer Record:
Percentage of customers using the products and other financial services should be
taken, and of those customers who are turning over.
Such products should be offered which commensurate customer needs and facilitates
their relationship with the bank.

5- Innovations:
Each branch on its part should promote its products with value added innovative and
appealing marketing strategies that compliment customer needs.

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6- Reward and incentives:
Reward and incentives should be given to employees. Annual increment should be
applied with the New Year. Special allowances or bonus should be given to those
employees whose performance is better than others.

7- Employees Benefits:
Services of employees should be acknowledged and they should be rewarded either
through cash allowances or promotion.

8- Job Rotation:
Employees should be rotated on different jobs after the passage of certain time period.

9- Interaction with Employees:

Management should have strong and healthy interaction with the employees. They
should have a friendly attitude to them in order to increase their productivity.

10- More Branches:

Bank should increase its branches at the international level. Which not only increase
the number branches but also improve the Pakistan image in the international market.

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As I have studied and analyzed SBL I found out that this a good bank as its working,
management is concerned. First of all the reason of this is that there is no directive
style in the management of Soneri Bank and which shows that there is
decentralization in the Bank and every branch manager can take decision according to
the situation.
Soneri Bank is providing their customers with wide range of services including online
banking, phone banking and some of their new products in the pipeline; include ATM
network etc shows that Soneri Bank is taking good care of their customers. Soneri
Bank made heavy investments, towards enhancing its capabilities in the area of
automation and technology. Soneri Bank is well positioned to meet client needs, with
improved competitive advantage.
The essence of there business philosophy is to cater to the banking requirements of
small & medium sized entrepreneurs, providing them qualitative & competitive
services of conventional and all Islamic banking with emphasis on encouraging
There success is because of having branches in many northern areas but they should
increase the number of branches to readily accessible to wide range of people in this
competitive environment, of this new products and services.
And from the financial and when I conduct comparative analysis with other banks I
found that it is somewhat better than others, and from the analysis of previous year I
concluded that it is improving and in 2009 profits are more than the previous year. So
I can say that Soneri Bank is performing very well.

We have more time for you!

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Financial Statements 2008,2009,2010 of Soneri bank

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