Table of Contents

Introduction ................................................................................................................................................. 3 Departments of RBS .................................................................................................................................. 4 Marketing Department of RBS: ............................................................................................................. 4 Credit Risk Management department of RBS: ...................................................................................... 5 Credit Administration Department RBS: ............................................................................................... 5 Secured loans ............................................................................................................................................ 8 Conventional Mortgages:...................................................................................................................... 8 CHARGES: .................................................................................................................................................. 8 N cash facility (Business Finance): ......................................................................................................... 10 WHEELS ................................................................................................................................................... 11 Charges: .............................................................................................................................................. 11 Cash near Cash ........................................................................................................................................ 12 Loan against Shares ................................................................................................................................ 12 Personal Loans ........................................................................................................................................ 13 Credit Cards Facility ................................................................................................................................ 14 CREDIT POLICY: GENERAL DEFINITION: ............................................................................................................................ 16 OBJECTIVES: ............................................................................................................................................ 16 SBPS REQUIREMENT: ............................................................................................................................. 16 Credit Standards Followed By RBS: ......................................................................................................... 17 CENTRALIZED AUTHORITY: ..................................................................................................................... 18 FUNDED AND NONFUNDED FACILITIES .................................................................................................. 18 SECTORAL BASED LENDING..................................................................................................................... 18 NICHE MARKETING ................................................................................................................................. 19 UNAPPROVED SEGMENTS....................................................................................................................... 19 TIME REQUIRED FOR APPROVAL OF LOAN ............................................................................................. 19 PATTERN OF INSTALLMENTS................................................................................................................... 19 CREDIT CARD ........................................................................................................................................... 19 Page NPL Ratio ................................................................................................................................................. 19

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REVISION OF CREDIT POLICY ................................................................................................................... 19 INCOME REQUIREMENT.......................................................................................................................... 20 TIME PERIOD FOR FINANACING .............................................................................................................. 20 LC FACILITY .............................................................................................................................................. 20 Collateral Based Lending: ........................................................................................................................ 20 CDR (Credit deposit Ratio) position of RBS: ............................................................................................ 21 SAFTY MARGIN:....................................................................................................................................... 21 CREDIT POLICY FOR RENEWALS & ENHANCEMENT ................................................................................ 21 SPREAD:................................................................................................................................................... 21 PAYMENT INCENTIVES: ........................................................................................................................... 21 Documentation Required By RBS for Facilitating a LOAN: ..................................................................... 22 Sole Proprietor: ....................................................................................................................................... 22 Partnership:............................................................................................................................................. 22 Company: ................................................................................................................................................ 22 Security Based: ........................................................................................................................................ 23 Property: ............................................................................................................................................. 23 Other Legal Documents: ..................................................................................................................... 23 SUGGESTIONS ......................................................................................................................................... 24 CONCLUSION........................................................................................................................................... 25

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INTRODUCTION
The Royal Bank of Scotland Group has grown from small beginnings nearly 300 years ago to become the second largest financial services group by profit, in the world. With an AA credit rating, RBS group has more than 40 million customers worldwide, operating profit in 2007 10.3 billion, and total assets, as at 31 December 2007, of GBP 1,900.5 billion. Today the situation is different. Due to worldwide recession bank had a massive loss. According to unaudited quarter report i.e30th June 2009 bank had a net loss of RS.584, 090,0001, compare to net loss of RS.59, 703,0002 on 30th June 2008.now MCB Bank has bought the Pakistan operations of the Royal Bank of Scotland (RBS), paying a price of PRs7.2 billion ($87.4 million) for a 99.37% stake in RBS Pakistan3. RBS brands operate around the globe and down the street to provide banking services for individuals, businesses and institutions.

VALUE PROPOSITION
Royal Preferred Banking offers its clients an unmatched blend of personalized banking and wealth maximization opportunities.

PRODUCTS
Alongside a comprehensive range of premium banking products and services, RBS offers fully integrated financial planning and investment advisory capabilities.

PRIVILEGES
From luxurious lounges to personalized attention, Royal Preferred Banking delivers its clients exclusive services.

Unaudited half year income statement 2009 Source: www.rbs.com.pk 2 Unaudited half year income statement 2009 Source: www.rbs.com.pk 3 Source:financeasia.com

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Departments of RBS
RBS has a centralized banking system. Facilitating a loan is a continuous process here which linked up THREE major departments namely; MARKETING CREDIT RISK MANGEMENT CAD

Marketing Department

Credit Risk Management Department

Credit Administration Department

ALL the departments work together to make the system more efficient and to satisfy the customers properly. Marketing Department of RBS: Following are the duties of this department: It initiate the proposal Direct the customer relationship with RBS It collects all the required documents It analyzes the financial statements of the bank From initial analysis of the customer and his needs to the preparation of the proposal, marketing department performed all duties to assist the Credit Risk Management Department.

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Credit Risk Management department of RBS: The information provided by the marketing department is analyzed by this department to manage the probability of being default of the customer. It has to manage in this way that profitability of RBS increased and defaulters have been decreased. It checks out the purpose of this facility, track out the record, ancillary business, margin or mark up. The team of marketing department of RBs provide all documents and a track to reach the customer after it the credit risk management department of RBS performed the further duties to check the credit worthiness of the customer. Credit Administration Department RBS: It performed the following duties: Perfection of the securities Completion and last stamp on the authenticity of the documents Acceptance and rejection of the proposal based on the decision of this department

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OVERVIEW OF PRODUCTS
INTEGRATED CASH MANAGEMENT SERVICES Product/ Services Cash Management TRADED SERVICES AND SUPPLY CHAIN

PAYMENTS

COLLECTIONS

Product/ Services

IMPORT

EXPORT

Cash Withdrawl

Cash Deposit
Documentry Credit

Issuance and amendments of LC

LC Confirmation

Bankdraft

BankDraft
Documentry Collections Special credit Advising and Negotiation of LC

Cheque

Cheque
Documents against Acceptance & Payments Re-Imbursement Undertaking

Direct Debit

Documents against Acceptance & Payments

TREASURY / FINANCIAL MARKETS:

Foreign Spot and Currency Forward Deposits Exchange

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The figures above give a brief overview of products and services provided by a bank.

OVERVIEW OF RBS LOAN PRODUCTS

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Secured loans
Conventional Mortgages: Following are the different mark-up rates for mortgages. MARKUP:
Slabs Up to 4,999,999 Between 5,000.000 & 9,999,999 Between 10,000,000 & 19,999,999 More than 20,000,000 Benchmark 1 year KIBOR+4.25% 1 year KIBOR+3.75% 1 year KIBOR+3.5% 1 year KIBOR+3.25% KIBOR 12.93% 12.93% 12.93% 12.93% Spread 4.25% 3.75% 3.50% 3.25% Total 17.18% 16.68% 16.43% 16.18%

CHARGES:

Documentation, Stamp Duty & Government Levies Legal Charges Late payment charges

Actual

3500 Rs. 1,000/- or 10% of installment which ever is higher 10% for all BTF cases.

Pre-payment penalty, Full pay-off & Partial pre payment Processing Fee Enhancement Fee Installment Collection Charges

Rs. 5,000/Rs. 5,000/Rs. 400/- per visit

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N Cash Facility (RUNNING FINANCE):

This facility is provided for Loan Enhancement Facility Choice between Running Finance or Installment Based financing

Empower the customers with financing to fulfill their business needs. With Running Finance customer can fulfill his working capital/cash flow needs.
Markup of N cash facility (Running Finance)
Slabs Up to 4,999,999 Between 5,000.000 & 14,999,999 More than 15,000,000 Benchmark 3 Month KIBOR+4.00% 3 Month KIBOR+3.75% 3 Month KIBOR+3.50% KIBOR 12.60% 12.60% 12.60% Spread 4.00% 3.75% 3.50% Total 16.60% 16.35% 16.10%

Charges

Fresh case processing fee

up to Rs. 5,000/- upfront

BTF case processing fee

up to Rs. 5,000/- upfront

Enhancement case processing fee

up to Rs. 5,000/- upfront

Late payment charges

Rs. 100/- per day

Installment collection charges

Rs. 400 per visit

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N cash facility (Business Finance): with the Business Loan customer can invest in
project financing, capital investment, business expansion or balance transfer from a running finance facility to a term loan.

Mark up of N cash facility (Business Finance)

Slabs Up to 4,999,999 Between 5,000.000 & 14,999,999 More than 15,000,000 Benchmark 1 year KIBOR+4.00% 1 year KIBOR+3.75% 1 year KIBOR+3.50% KIBOR 12.93% 12.93% 12.93% Spread 4.00% 3.75% 3.50% Total 16.93% 16.68% 16.43%

Charges:

Fresh case processing fee

Up to Rs. 5,000/- upfront

BTF case processing fee

Up to Rs. 5,000/- upfront

Enhancement case processing fee

Up to Rs. 5,000/- upfront

Late payment charges

Rs. 1,000/- or 10% of installment which ever or higher

Installment collection charges

Rs. 400 per visit

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WHEELS
RBS cherishes the relationship with its customers; they will be accommodated with assistance from Relationship Managers who will facilitate them through the procedure until they find exactly what they want. Markup of Wheels
Slabs Less than 600 K More than 600 K Existing AAB Customers Benchmark 1 year KIBOR+4.50% 1 year KIBOR+4.00% KIBOR 12.93% 12.93% Spread 4.50% 4.00% Total 17.43% 16.93%

0.5% discount on above

Charges:

Processing Fee Re-issuance of purchase order Late payment charges Installment collection charges Full prepayment of Cars with registration: During first 6 months During 7th month to 12 months During 2nd year During 3rd year 4th year onward Partial Prepayment : Upto 1st year During 2nd year During 3rd year After 3rd year

Up to Rs. 5,000/Up to Rs. 1,000/Rs. 600/- per month Rs. 400/- per visit

10% (on outstanding amount) 8% (on outstanding amount) 6% (on outstanding amount) 4% (on outstanding amount) 2% (on outstanding amount)

5% (on amount being prepaid) 4% (on amount being prepaid) 3% (on amount being prepaid) 2% (on amount being prepaid)

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Cash near Cash

Help the customers to meet their sudden cash flow needs.

Acquire funds against your existing deposits or near cash instruments without liquidating them. Earn income from your pledged deposit or near cash instrument without it being disturbed.

Markup for Cash near Cash

Slabs Branch/Preferred Customers RBS Staff

Minimum Bench mark 3 month KIBOR*+0.75% 3 month KIBOR*+0.25%

Charges
Balance Confirmation Certificates Balance Confirmation Certificates to auditors Mark up Settlement Rs. 300/- per certificate Rs. 1,500/- per certificate Up to Rs. 7,000/- if mark up is not paid within specified period

Loan against Shares

Loan against Shares (LAS) facility enables customers to take a loan against the shares invested in companies listed on the KSE-100 index and release the initial investment at its current market value. Their slogan is Get more than just dividends - get the competitive edge with Loan against Shares .

Charges:
Financing against shares 1) Pledged Share Scrips 2) Forced Facility Liquidation Fees Rs. 1,000/- per charge requested

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Rs. 5,000/- Plus applicable brokerage charges

BTF (Balance Transfer Facility)

BTF is the most convenient, flexible, economical and easy-to-use loan facility designed to suit customer needs and gives them the power to control their finances. It offers a variety of features that provide the spending convenience a customer actually craves for.
Markup of BTF
Slabs Salaried & SEP Self Employed Business Segment Benchmark 26.0% 29.9%

Schedule of Charges

Mark up Rate may vary for different customer segments Late Payment Fee Enhancement Fee Cash Withdrawal over the counter from BTF accounts Cancellation of BTF Pay Orders over the counter

Mark up Rate Up to 35% per annum

Rs. 500/- or 10% of the minimum amount whichever is higher Up to Rs. 1,500/Up to Rs. 150/Up to Rs. 200/- per pay order

Personal Loans
Whether a customer want s to reorganise their finances, pay for a major purchase such as a car or home improvements or simply give themselves more financial flexibility, RBS offer a range of affordable loan options. Markup of Personal Loans
Slabs Salaried A&B Salaried C Self Employed Persons Self Employed Business Persons Unapproved Segment Benchmark 22.0% 25.0% 22.0% 28.0% 29.99%

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Schedule of Charges:

Mark up Rate may vary for different customer segments/loan tenure Processing fee* Late Payment Fee

Mark up Rate 35% per annum

Up to Rs. 2,000/- or 1% of the loan amount whichever is higher Rs. 500/- or 10% of the installment amount whichever is higher

Credit Cards Facility

Platinum Credit Card: It provides luxurious facilities to the customers and they can enjoy a selection of the finest privileges complementing their superior preferences and lifestyle. Air blue Credit Card: We can take credit to spend on Fuel Groceries, Restaurants, utilities, entertainment, and anywhere else. Its a master card of RBS. Gold Credit Card: Our Gold Credit Card charges a fixed rate on transferred balances, until they are repaid. It could help to shrink your balance. This offer is available exclusively to existing RBS current account customers and only available online.

Markup of Credit Cards

Slabs Airblue Credit card Gold Credit Card Platinum Credit Card

Benchmark 39.0% 39.0% 18.0%

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Schedule of Charges:
Annual Fees Primary Cards Blue / Standard - up to Rs. 2,000/Gold - up to Rs. 4,000/Platinum - up to Rs. 15,000/Supplementary Cards Blue / Standard /Gold - up to 1,000/Platinum - up to Rs. 2,000/Joining Fees* Primary Cards Blue / Standard - NIL Gold - NIL Platinum - NIL Supplementary Cards Up to Rs. 500/- (First 2 supplementary cards free)

Tenure in months 6 12 18 24 30 36 42 48 54 60

Service fee (%) 30.23% 31.72% 31.76% 31.46% 31.04% 30.59% 30.14% 29.70% 29.28% 28.88%

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CREDIT POLICY
GENERAL DEFINITION:
Credit Policy is the clear, written guidelines that set the following basic things: (1) The terms and conditions for supplying goods on credit (2) Customer qualification criteria (3) Procedure for making collections (4) Steps to be taken in case of customer delinquency. It is also called collection policy4.

OBJECTIVES:
SBP regulations and economic conditions are kept in mind while designing the techniques and objectives for credit management strategy. Following are some of the objectives of SPCBs credit policy: o Enable the bank to develop long-term business plans. o Equip the bank to face the ever changing competitive scenario more effectively and act proactively rather than reactively. o To be a source of confidence to the lending officers and enable them to operate more effectively within the framework of approved delegated authority. o Provide a framework of reference and standards and to enable the bank to provide uniform treatment to the borrowing customers. o Provide guidance for what to do, not how to do. o Properly serve the credit needs of current customers by satisfying them and establish long-term relationship with them. o Provide a framework in which to conduct business.

SBPS REQUIREMENT: It is SBPs requirement that every

bank should keep 2% of its total capital as reserves with the State Net Assets of RBS as on June Bank. SBP approves every loan and provides comprehensive 30, 2009 are Rs. 9,346,762,000. directions to every bank in the prudential regulations. These instructions are same for every bank but banks could make certain changes in the level of deposits, advancement ratio and their loan portfolio. Total amount of loan advancement is totally dependent on SPCBs credibility situation.

Source:businessdictionary.com

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CREDIT POLICY OF RBS

Credit Standards Followed By RBS:
The RBS credit standards are as follows: DIVERSIFICATION: RBS being a clever financial institution doesnt invest in just one sector. It follows the basic rule i.e.

DONT PULL ALL YOUR EGGS IN ONE BASKET!!!

Their focus is on the following sectors: SECTORS Small Medium Enterprise (SME) Commercial Sector Global banking and Markets LIMIT OF LOANS 50 million 50-350million Above 350 million

Agriculture financing is just 12% because SBP makes it essential for the bank.

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SAFETY: RBS follow the SAFETY-FIRST principle i.e. Money given as loan must be used properly. The credit risk management department handles this principle. The following five elements(Cs) help a banker in arriving at the conclusion regarding safety. Character: Borrowers intention to repay the RBS focuses on 3cs: advance, since his honesty and integrity is of CHARACTER, CAPITAL.CAPACITY significance. Capacity: Mixture of academics and experience in the relative field and ability to repay. And How well do we understand and know the relevant customer. Capital: it means how much you are willing to invest your money.SBP restricts the misuse of banks money. Conditions: Bank should analyze the economic, business and socioeconomic conditions to secure the loan. Cash-flows: Cash flow statement of the customer should be analyzed to secure the loan. We analyze the inflow and outflow of cash.

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LIQUIDITY: bank should analyze the liquidity condition of its and its customer. PROFITIBILITY: Profits are as important to RBS as are to the other organizations as they also have different types of expenses. The main source of income for RBS is the amount it charges from its customers as mark up. Therefore, the RBS may prefer a customer with low risk and reasonable markup to ensure an optimal profit.

Liquidity condition means tendency of convertibility of assets into cash.

DESIRABILITY: RBS focuses that money should be used for agreed purposes. CREDIT RISK AND RETURN: The Credit risk management focuses risks associated with the loans and their repayments.RBS focuses on short term loans to avoid defaults.

CENTRALIZED AUTHORITY:
The decision making power regarding credit policy and any loan approvals is centralized in RBS. They are moving toward the hub concept. This has a negative impact on potential or prospective customers because any person wanting to acquire a small loan in a few days time has to wait a lot and as a result a number of applicants cannot be satisfied. RBS credit policy hinders such activity because having no power and setup to verify credentials etc, the process at the head office takes minimum 15days. But this step is also going to show the confidential output by bank.

FUNDED AND NONFUNDED FACILITIES

Both funded and non-funded facilities are provided by RBS but the preference is to provide non funded facilities as it involves lower risk.

SECTORAL BASED LENDING

RBS extends loan to almost all the sectors except for certain unapproved segments. However, RBS focuses on consumer, commercial, corporate, agriculture, construction, engineering, automobiles and fertilizers sector. No loans are available for textile sector this time because of the bad conditions of this sector. RBS is moved the directions of its credit policy toward the recovery of its loans.

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NICHE MARKETING
Their marketing objectives and techniques are based on niche marketing. They target on salaried class which they have named as Category A. This is because salaried class is more conscious about making the payments on time and it is easier to recover loan from them as compared to any other class. In current economic conditions of Pakistan and worldwide recession, its the basic pillar of RBS which is not only secured but also profitable but because of rapidly unemployment, RBS not advancing loans to this sector but again we will say that they are not destroying their customers of this sector even at the time of recovery. They are providing their non funded facility mostly to salaried based sector after all they are golden pillars of RBS.

UNAPPROVED SEGMENTS
Unapproved segments are the segments to which bank does not extend loan due to some reasons. These include lawyers, journalists, farmers, money changers, politicians.

TIME REQUIRED FOR APPROVAL OF LOAN

As RBS is a multinational bank it takes a long time of 15 days for any loan to get approved from the head office because it does not give decision power to each branch. It has centralized system. The preparation of documents also required a lot of time because of manual working system. Due to this reason RBS is also losing a great number of its customers.

PATTERN OF INSTALLMENTS
RBS prefers quarterly payments as part of their selling terms set with the customers in advancement of the loan. However, such terms may vary from customer to customer and situation to situation.

CREDIT CARD
Client can withdraw cash up to 75% of the available shared credit limit (if he is holding more than one RBS Credit Card). For example, if your shared credit limit is PKR 300,000 and your cash withdrawal limit is 75%, you can withdraw up to PKR 225,000.

NPL Ratio
RBS NPL ratio is comparatively good if we consider the financial crisis and current position of the bank. Reason behind this is that they dont accrue their revenues .Instead they are recorded when actually incurred. Thats why their books show the good position.

REVISION OF CREDIT POLICY

The credit policy is revised at least quarterly to incorporate the economic and financial changes in the country. Similarly, any change in the prudential regulations by the State Bank of Pakistan and socioeconomical factors can prompt the bank to revise its policy in the given scenario accordingly. Their policy also changed according to risks and opportunities in the market like payment incentives 54(flat rate, computed rate) and low risk credit policies (advance payment & LC). So according to this policy, now a day RBS is working with flat rate

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INCOME REQUIREMENT
Minimum Income of Salaried, SEB, SEP, NTI & Branch Banking Segment are: Segments A,B,C, Unapproved & Contractual SEP SEB/ NTI * Branch Banking Net Income (PKR) 40,000 50,000 50,000 50,000

Where; SEB stands for Self-Employed Businessman SEP stands for Self-Employed Professional. NTI stands for New to the industry. The customer having between 1-6 months credit history reflecting in e-CIB will be considered as NTI's.

A includes bankers and clients with a good pay back history. They are given credit up to 4times of their salary. B includes all the employees related to the textile sector. They are given credit up to 3times of their salary. C includes the government employees. They are given credit up to 2times of their salary. Unapproved are given credit up to2 times of their salary.

TIME PERIOD FOR FINANACING

Running finance: its short term loan Demand finance: 1 to 5 years maximum time period for this loan because it fulfilled the specific need of the customer like construction. Term finance: 5 to 10 years maximum time period but in this loan the installment is involved.

LC FACILITY
RBS focused on hypothecate based facility.

Collateral Based Lending:

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Bank focuses on financing backed up by a security. Because there is no proper documentation system and Corruption rate is high!!

CDR (Credit deposit Ratio) position of RBS:

RBS has to reserve 30% in form of reserves in SBP (State Bank of Pakistan). This 30% can be reserved in different forms as cash, T Bonds, T Bills and anything which can be easily convertible into cash.

RBS cash reserve ratio is 5 to 7 percent

SAFTY MARGIN:
For funded based facilities: 10 to 25 percent is the average safety margin rate. It varies customer to customer. Its also varies by securities and liquidity position of the customers.0% safety margin can also be for those customers who are most reliable customers. For non- funded based facilities: on average the 15% to 35% safety margin is taken.

If government has to stop the imports of anything to support the local production, SBP ordered to increase this safety margin. For critical items like perishable items this safety margin can be 100%.

CREDIT POLICY FOR RENEWALS & ENHANCEMENT

Following are the requirements for renewals: Actual last year business progress Clean up condition for one year Basic Borrowers fact sheet report Credit Information Report Auditing Report of their business Bank Reference Personal Reference Customer has also to provide the action plan that the money which has been enhanced where to use. The reason for which request of renewal is given.

SPREAD:
RBS is stated to be charging around 2%-4% spread to its customers with negotiations or bargains with customers even though they might not always be providing ancillary business to RBS. This depends on the customers track record and his credibility. RBS invests extensively in mortgages and as fewer mortgage investments are present, RBS has the opportunity to charge high mark ups. The high charges cover the costs incurred on those who have defaulted.

PAYMENT INCENTIVES:

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RBS deals with flat rate because flat rate does not consider TIME VALUE CONSTRAINT. Being customer friendly it helps the customer to forecast his budget .this is rate is not affected by economic conditions.

Documentation Required By RBS for Facilitating a LOAN:

Sole Proprietor:
Call report Id card. Address and other business related information. BBFS (Borrower Basic Fact Sheet). E-CIB report.(Electronic Credit Information Bureau Report) Credit Worthiness Report Bankers Report

Partnership:
Call report Id card. Address and other business related information. BBFS (Borrower Basic Fact Sheet). E-CIB report.(Electronic Credit Information Bureau Report) Partnership deed. Credit Worthiness Report Bankers Report

Company:
Call report Basic Information Report Companys e-CIB report. Id cards of Directors. Financial Statements. Directors search and Assets Charges search report. BBFS (Borrower Basic Fact Sheet). Credit Worthiness Report Bankers report

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Security Based:
Based on different securities, bank requires the following documents: Cash deposit: Letter of Lien on cash deposit with the signature of borrower. Govt. securities: Letter of Lien on Govt. securities e.g.; T-Bills etc. Shares: Letter of Lien obtained by bank with the help of ID assigned by SECP.

Property: Title document: o Sale deed o Lease deed o Transfer letter Memorandum of deposit of title deed. Personal guarantee by third party. Letter of Lien on property. Approved map of the location where the property is located. General Power of Attorney (GPA). PT-1 form is required for old cities, which had been settled by Settlement Commission during partition. Mortgage Deed (except DHA). Faard and Letter of Lien are required from registrar in case of agriculture land. Other Legal Documents: Pro-note: It is a promissory note in which the customer promises to pay principal and markup. Markup agreement: It contains all the terms and conditions related to markup e.g.; calculation of markup at flat or computed rate etc. Letter of Continuity (LOC).

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SUGGESTIONS

A strong forum of all the stakeholders should be made, where the state representatives, industrialists, bankers and the concerned people can gather together and give valuable suggestions for the betterment of the whole financial system e.g.; Federal Reserve of U.S.A. SECP should be more helpful to the banks; it should work more efficiently in providing the details of Ranking charges and Pari-Pasu charges. Keeping the current economic scenario of the country, RBS must also focus on agriculture sector because Pakistan is an agricultural country and providing loans to this sector will lead towards prosperity. RBS should give a customer friendly credit facilities at most in each of its branches so that the customer feels more convenient. RBS should held meetings and seminars for their customers to give them suggestions and advices to improve their credit worthiness. Moreover to guide the customers about their loan products and procedures.

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CONCLUSION

Due to worldwide recession RBS has faced huge losses in current times; RBS in Pakistan is not advancing long-term loans to corporate sector or other sectors as well due to the bad social and economic conditions in the country. When RBS re-branded the name of ABN-AMRO formally last year, total branches of RBS in Pakistan were 85 but now the number has reduced to 73. Similarly the net value of assets of RBS in Pakistan has also been reduced to 23 billion PKR from 73 billion PKR. Moreover, more than 90% share of RBS Pakistan has been purchased by MCB and this take over will be completed in the upcoming year. In the current business environment with reduced sales and threats of recession RBS is under great pressure to manage their cash flows productively; in this regard RBS has kept somehow a lenient credit policy (in consumer financing i.e. short-term) as compared to other banks so that it may be able to retain its customers in future for upcoming year.

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