UBL Report

AN INTERNSHIP REPORT ON UNITED BNAK LIMITED TAKHT BHAI BRANCH
WAQAR AHMAD
INSTITUTE OF MANAGEMENT STUDIES UNIVERSITY OF PESHAWAR
June 2002
INTERNSHIP REPORT SUBMITTED TO INSTITUTE OF MANAGEMENT STUDIES UOP IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE DEGREE OF MBA
June 2002
INSTITUTE OF MANAGEMENT STUDIES UOP
SUPERVISOR:
Signature
Name Designation
Mr. Abdul Wahid Coordinator MBA
COORDINATOR R& DD:

Signature
Name
Mr. Zia ud Din
46
PREFACE
The development of skills to perform well in professional life has become a dire need of every Business Graduate. The very purpose, an internship is to acquaint the business graduate with empirical business practices. As a compulsory requirement of Professional Degree in Business Administration, I opted to join United Bank Limited, to fulfill my degree requirement. My reason for choosing UBL was to enhance my skills in Management Finance and Accounts, so that to provide myself the opportunity to cope with real life situation. To better understand the report my recommendation would be to look into different parts mainly covering the overview of UBL, overall management of Finance and Accounts. I pay my gratitude to all my teachers, senior staff members of IMS and all my colleagues. Deep gratitude is extended to Mr. Sarfaraz Khan (Manager UBL, Takht Bhai Br.). I am also thankful to the staff members of UBL, Takht Bhai Br. for their continuous help and guidance during my Internship. I am indebted to Mr. Abdul Wahid who proved to be more than a supervisor, whose guidance enabled me to write this report. His wisdom, kind considerations, and unique insights were invaluable and his real world experience added an extra advantage to my report. Finally, keeping the tradition alive as well as fulfilling social and ethical responsibility, my dedications will always go to my dear Parents & Family and Friends. Waqar Ahmad
LIST OF CONTENTS
Preface Acknowledgement List Of Contents List Of Graphs List Of Acronyms Executive Summary Section-1 Chapter # 1 _____________________________________________________ INTRODUCTION 1.1 Objective of The Study 1.2 Scope of The Study 1.3 Importance of Study 1.4 Research Methodology Section-2 Chapter # 2 _____________________________________________________ IMPORTANCE OF BANKING 2.1 Major Functions Of Commercial Banks 2.2 Banking in the Worlds Economy 2.3 Role of Commercial Banks in the Economic Development of Pakistan-9 8 4 1 1 2 2 3 I Ii Iii
ii
Chapter # 3 _____________________________________________________ HISTORY AND GROWTH OF UBL 3.1 Number Of Branches 3.2 Services Offered by UBL Chapter # 4_____________________________________________________ ORGANIZATION STRUCTURE OF UBL Chapter # 5 _____________________________________________________ DEPARTMENTATION 6.1 Accounts Department 6.2 Remittances Department 6.3 Deposits Department 6.4 Advances Department 6.5 Foreign Exchange Department 6.6 Clearing House Chapter # 7 _____________________________________________________ FINANCIAL PRODUCTS OF UBL 7.1 Unicash 7.2 Unisona 7.3 Unizar 7.4 Unisaver 7.5 Tezrafter Section-3 Chapter # 8 _____________________________________________________ FINANCIAL ANALYSIS Common Size Analysis of Balance Sheet Common Size Analysis of Profit and Loss Account Trend Analysis(Regular) Trend Analysis(Percentages) 26 23 20
iii
Ratio Analysis Chapter # 9 _____________________________________________________ SWOT ANALYSIS 9.1 Strengths 9.2 weaknesses 9.3 Opportunities 9.4 Threats Conclusion Section-4 Chapter #10 10.1 Problems Faced By Banking Sector In Pakistan 10.2 Conclusion
iv
LIST OF ACRONYMS
AVP IDBP DD ADBP Assistant Vice President Industrial Development Bank of Pakistan Demand Draft Agricultural Pakistan GM HO L/C UBL OGI RTC SBP SEVP SVP TT NIB IMF DM FDD MT VP General Manager Head Office Letter of Credit United Bank Limited Officer Grade I Rupee Travelers Checks State Bank of Pakistan Senior Executive Vice President Senior Vice President Telegraphic Transfer Non Interest Banking International Monetary Fund Deutsche Mark Foreign Demand Draft Mail Transfer Vice President Development Bank of
EXECUTIVE SUMMARY
Now a days strong and efficient capital and financial institutions are the basic requirements of each county. So no country can be considered strong without having strong enough capital and financial institutions and markets. One of the components of these financial institutions are the banks. No one can deny the role the banks are playing in the economic development of a country.
In Pakistans banking sector, UBL is one of the leading commercial banks. Very renowned bankers such as I.I. Chundrigar and Agah Hassan Abidi established UBL in 1959. From the very beginning, UBL was showing very good performance but in 1974 after the nationalization of commercial banks, the bank has received some very severe financial shocks. The shocks received in 1995 were so severe that SBP had to assume the control of the bank in order to save it from bankruptcy. But after taking over the management of the UBL by the new set-up under the leadership of Zubyr Soomro, the bank was successful in rebuilding its shattered image. The new management started new schemes and injected new concepts in order to improve its services to the clients. Now the bank is in very good financial position and also has gained its lost Goodwill. My two months internship in UBL TAKHT BHAI branch gave me a very good deal of the practical experience about the bank, its personnel and various services it offers to the clients. Although two months duration for studying such a large organization by no means is enough but I have tried my ever best to cover all the areas of the bank in my report. I have divided my report in ten chapters. Chapter # 1 is about the introduction of the report. In this chapter it is discussed that how the internship is important and what a student can learn from it. Light is also thrown on the way in which the research has been conducted. Chapter # 2 of my report is about the importance of banking. This chapter contains detailed information that what role the banks play in the economic development of a country.
vi
Chapter # 3 is about the Evaluation of banking. In this chapter the bank is defined. Growth of the banking globally as well as in Pakistan is pointed here. Chapter # 4 is about the historical background of UBL. The circumstances in which UBL was established and its growth are discussed here. This chapter also gives the information about various services offered by the UBL. Chapter # 5 of my report is about the organizational structure of UBL. Hierarchy of staff and various positions of seniority are shown and discussed through a Chart. Chapter # 6 covers various departments of UBL. Each department is separately given due consideration. Various functions performed by different departments are highlighted. Chapter # 7 of the report throws light on various financial products UBL offers to its customers. Chapter # 8 of the report consists of analysis. Financial statements are analyzed horizontally and vertically. Also the performance of the bank has been shown through ratio analysis and trend analysis. Chapter # 9 includes SWOT analysis of UBL and conclusion based on SWOT analysis. Chapter #10 contains problems faced by banking sector. First problems faced by banking sector in Pakistan are discussed and then problems of each department of UBL are highlighted and possible suggestions to each problem are given.
vii
Chapter-1
Introduction
INTRODUCTION
1.1 OBJECTIVE OF THE STUDY
For getting the master degree in business administration, each student is required to spend at least two months as an internee in a recognized organization. The students are required to work in their own field in which they have done their specialization. Main purpose of this program is to make students familiar with the practical work, as there is great difference between what they have learnt during their MBA and how the job is practically done. Another important aspect of the internship program is that internee is placed in most of the departments of the organization through job rotation. It provides a glance of each department, as the period is too short for learning in detail.
1.2 SCOPE OF THE STUDY

1). It is a compulsory requirement for the award of Masters Degree in Business Administration. 2). It will help the present and prospective students of the department in making assignments and writing reports on the UBL, evolution of baking, importance of banking and different operations. 3). It can also provide help to UBLs management in identifying their Strengths, Weaknesses, Opportunities and Threats. 4). It can also provide assistance to students seeking financial data for analysis.
1.3 IMPORTANCE OF STUDY

Banks play a central and very important role in the economic life of a country, thats why they are considered as the lifeblood of modern economy. Today no
Chapter-1
Introduction
one can deny the importance of banking in the economy. They facilitate and expedite trade and commerce and provide a variety of services that one cant imagine with out banks. I have chosen the United Bank Limited Takht Bhai branch for my internship because it has all the departments a bank could have. Besides this, UBL plays an important role in the economic development of Pakistan.
1.4 RESEARCH METHODOLOGY

The methodology that I adopted for this research project is based on both the primary as well as secondary data. The sources of primary data were: 1. Formally arranged interview/ discussions with Management,
Director and Joint Directors. 2. Personal observations.
The sources of secondary data were; 1. 2. 3. Annual reports Over view of the UBL Relevant books.
During the research project, I observed that enough written material regarding the Bank is not available, so I had count on my personal observation and interviews with directors.
Chapter-1
Introduction
I spent eight weeks in the main branch and one week at each department and collected information from discussion and interviews with directors, so most of the data of this report is primary .I also availed assistance from few relevant books.
Chapter-2
Evolution of Banking
Chapter-2
2
EVOLUTION OF BANKING
It has not so far been expressly decided as to how the word Bank originated. Some authors opine that this word is derived from the words Bancus or Banque that mean a bench. The explanation of this origin is attributed to the fact that the Jews in Lombard transacted the business of money exchange on benches in the market place, and when the business failed, the Banco was destroyed by the people. Incidentally the word bankrupt is said to have been evolved from this practice. The opponents of this opinion argue that if it was so, then how is it that the Italian moneychangers were never called Banchierei in the middle ages? Other authorities hold the opinion that the word Bank is derived from the German word Back which means joint stock fund. Later on, when the Germans occupied major part of Italy, the word Back was Italianized into Bank. It is therefore, not possible to decide as to which of the opinions is correct, for no record is available to ascertain the validity of any of the opinion1.
3.1 EARLY GROWTH

Banking in fact is as ancient as human society. For eversince man came to realize the importance of money as a medium of exchange. Perhaps these were the Babylonians who developed banking system as early as in 2000B.C. It is evident that the temples of Babylon were used as banks because of the prevalent respect and confidence in the clergy.
Siddiqi Asrar H. Practice and law of Banking in Pakistan 6th ed. Royal book Co. Karachi
P-1.
Chapter-2
King Hammurabi (1728-1686 B.C.) the founder of the Babylonian empire drew up a code wherein he laid down standard rules of procedure for banking operations by temples and great landowners. It is not certain as to who invented money; but history records that Gyges, king of Lydia cast electrum (a natural alloy of gold and silver) ingots of identical shape and of uniform weight with a triple emblem engraved on it as an official guarantee of value in 687 BC. Also in Greece, the temples of Epheusus and Delphi were the biggest Banks of their time, where the people deposited their money and other valuables for safety and security, and were also the first-acted financial agents. After some time, Aristotles dictum that Charging of interest is un-natural and immoral became very popular, but the following periods growing necessity forced the acceptance of the principle of interest in lending and borrowing. The Romans, though they did not organize state banking, nevertheless regulated the conduct of private banks in such a way that extreme confidence of the people was created with the Revival of civilization (Renaissance) in the middle of the twelfth century. Trade and commerce started expanding, and this development compelled the business community to borrow money from the Hebrew moneylenders on high rates of interest and usury. Seeing the great demand, these moneylenders started organizing themselves, and banks started coming up at the principal seaports in southern Europe. Soon Venice and Genoa became the most important money markets of the time; and banking, though different from its present form, flourished. What we know now as modern banking originated in the 14th century in Barcelona. In 1401 A D a German Public bank was formed comprising the operations of discounting deposit and transferring of money. By the 16th century, some more public banks were formed in Venice, Milan, Amsterdam, Hamburg and
Chapter-2
Nuremberg. Similarly in 1690, the Bank of Hamburg came into existence in Hamburg with the business of accepting deposits of fine silver or of foreign moneys and to run accounts on these deposits. This bank rendered great service to the merchants as well as the countries it dealt with until 1873, when it was merged with the Reich Bank2.
3.2 MODERN BANKING

Despite the classical origin, banking in modern form and structure started in Britain when many of the Lombard merchants came to England in the fourteenth century and settled in the parts of the city of London now called Lombard street. They were so resourceful that even the kings had to depend on them for loans despite the fact that the church was firmly against usury. They dealt with not only keeping the money in safe custody but also changed money for the travelers or merchants engaged in foreign trades. The discovery of America brought riches to England and gave a tremendous boost to foreign trade. The merchants now began to hold part of their riches in cash. These transactions, however, received a big setback in 1640, when King Charles -I seized 130, 000 pounds and billion left for safe custody with the city merchants at the Royal Mint. This shook the confidence of the merchants in the Royal Exchanger and the Royal Mint. Consequently this business was taken over by the goldsmiths who, up to that time, were dealing only in gold and silver. These goldsmiths issued receipts or notes to their depositors in respect of the cash or articles left with them. These were called Goldsmiths Notes, and carried an undertaking to return the money and articles to the depositors or bearers on demand.
Ibid p-1
Chapter-2
Over period of time, these goldsmiths discovered that large sums of money were left in their custody for long periods, therefore, they started the use of this cash to advance loans to other persons for a fixed period of time and at a considerably high rate of interest. Moreover, they further encouraged cash deposits by their customers by offering them a part of the profits earned on the money. Thus began the issue and deposit banking of modern times. Some of the enterprising goldsmiths issued checkbooks for the attraction of their customers, and thus another important step in the evolution of banking was taken. In 1672, however, English banking faced a great crisis when Charles- II borrowed huge sums of money from the goldsmiths and later refused to pay them back. Therefore, a number of goldsmith- bankers formed themselves into a corporation in 1695, known as the Bank of England. This bank lent 1,200,000 pounds at 8% interest to William- III, who in return, allowed a number of privileges to the bank, specially the right to issue notes payable to bearer on demand up to the amount of this loan. This was known as fiduciary issue, not covered by gold. By the year 1700, the Bank of England was not only issuing notes but was also conducting accounts for customers. Being a joint stock bank by charter, its directors were conducting the business like that of limited companies. In 1854 the joint stock companies Act opened an era of corporation/ and the limited liability Act 1855, restricted the liability of shareholders of a limited company to the amount of the successfully paid- up value of the shares held by them. In the succeeding years, joint stock banks became very common either by absorption of private banks or amalgamation amongst joint stock banks themselves. Thus in 1918 came into being eleven clearing Banks of today. In 1946, the Labor Government nationalized the Bank of England and transferred the existing stock to the nominee of the British treasury, and 8
Chapter-2
empowered the crown to appoint its Governors, deputy Governors and Directors. The other shareholders of the bank were given in exchange, three percent long term Government stock, thus keeping the holders content and happy, as they were getting the same return as before. In 1955 the British banks made a departure from traditional banking by undertaking hire- purchase finance for companies buying industrial plants and machinery, and took interest on hire-purchase finance. The percentage of interest was so high that a number of companies became subsidiaries of the lending banks3.
3.3 EVOLUTION OF BANKING IN PAKSITAN

On 14th August 1947, the partition of the sub-continent came into reality and a new Muslim country with the name of Pakistan came into being. At this crucial time, the new country was facing a number of problems including the shortage of financial institutions. At the time of independence, the areas, now constituting Pakistan were very rich in producing various crops and other agriculture Products. There were very nominal industries and those industries too were in very bad shape but as far as the commercial banking facilities are concerned, they were fairly well, because there were 487 offices of scheduled banks for providing banking facilities to this area. For a new country like Pakistan, facing so many problems and having limited resources, it was very difficult to run its own banking system immediately. Therefore in accordance with the provision of Indian Independence Act of 1947, an expert committee was appointed to study the issue.
. Ibid p-3
Chapter-2
The committee recommended that the Reserve Bank of India should continue to function in Pakistan until 30th September 1948, so that the problem of time and demand liability, homage, currencies, exchange etc. be settled between India and Pakistan. It was also decided that Pakistan would take over the management of public debt and exchange control from Reserve Bank of India on Ist April 1948, and that Indian notes would continue to be legal tender in Pakistan till 30th September 1948. The Hindus residing in the territories now comprising Pakistan started transferring their assets to India after the partition of sub- continent and the banks also followed the same move in order to push the new state into chaos. By 30th June 1948, the number of offices of scheduled banks in Pakistan declined from 487 to only 195. At this time there were 19 foreign banks with the status of small branch offices and only two Pakistani institutions i.e. Habib Bank, and the Australasia Bank. To rebuild the confidence of the people in these banks, the then Government promulgated the banking companies ordinance, 19474. Pakistan was further pushed into trouble when the imperial bank of India closed down most of its offices in Pakistan and rejected to accept the token amount of Government of Pakistan securities. Such circumstances necessitated the control and management of banking and currencies in Pakistan. Government of Pakistan inaugurated the State Bank of Pakistan on July 1,1948, after the State Bank of Pakistan order was promulgated on May 12,1948. In order to bring the situation under control As the central bank of the country. The state Bank of Pakistan addressed itself with the equally urgent task of creating and developing the Baking system of the country. To achieve this goal, it provided every help and encouragement to Habib Bank to expand its network of branches and also recommended to Government, the
4
. Ibid. P-17
10
Chapter-2
establishment of a new bank which could serve as an agent of the State Bank of Pakistan in areas where State Bank branches are not present. As a result, the National Bank of Pakistan came into being in 1940 and by 1952 it became strong enough to take over the agency functions from the Imperial Bank of India. In order to develop sound banking and weed out weak institutions, the Banking companies (control) Act was promulgated in 1949, empowering the State Bank to control the operations of banking companies in Pakistan. Further The State Bank of Pakistan limited the opening of new branches by foreign banks in coastal towns or in big cities from where trade was being carried out with foreign countries, while Pakistani banks were encouraged to open as many branches as possible within the country5. In order to broaden the scope of banking system in Pakistan, The State Bank of Pakistan also helped in the establishment of specialized credit institutions in the fields of agriculture and industry. At the end of June 1958, the number of branches of Pakistani banks increased from 195 to 307 and, the number of scheduled banks increased to 36 by June 1965. The following figures reflect the rapid development of banking system in Pakistan from 1948 to 1993. 1948 Bank Deposit Bank Credit 880m 200m 1993 290,000m 21,000m 7,100 % increase 32854 10500 8665
Offices of scheduled 81 banks
During the five years from 1960 to 1965, the number of scheduled bank branches rose form 430 at the end of June 1960, to 1591in June 1965. Two new banks were formed i.e. Commerce Bank and Standard Bank. A dramatic change in Pakistani banking system took place when in 1974 the Government
. Ibid P-19
11
Chapter-2
of Pakistan nationalized all commercial banks incorporated in Pakistan. There were 22 scheduled banks with 3525 branches at the end of December 1973. The nationalization of banks in Pakistan has brought a new era of development and growth. It has taken a completely new turn with the induction of interest free Banking system in January 1981.With the passage of time, the Government of Pakistan realized that the national economy was being dominated by public sector, areas such as production, trade and finance were over regulated. This resulted not only in chronic budget deficit, leaving not much for physical and social infrastructure but also led to developing such conditions which could not be changed without the privatization of the nationalized and public sector. Therefore in order to meet the need of the time, the Government of Pakistan introduced comprehensive economic reforms aimed at deregulation of trade, commerce, industry, banking and finance, so that the role of the public sector in industrial and commercial activities is reduced and social sector activities are increased. In order to deregulate the financial sector under these reforms, a program of privatization of public sector banking and financial institution was started and various governing laws were amended in 1990 in which strict criteria for selection of good entrepreneurs as investors was also drawn. Besides these undertakings, private sector was not only invited but also encouraged to set up commercial banks and financial institutions in Pakistan. As a result, a number of banks Modaraba and Leasing companies came into existence and are now actively operating in private sector. It is hoped that this polish of liberalization and privatization of financial institutions will make way for the economic development and professional efficiency in Pakistan.
12
Chapter-3
History and Growth of UBL
HISTORY AND GROWTH OF UBL
Commercial banks play a role of vital importance in the economic growth of a country. Banks mobilize idle savings of public and provide finance to various sectors of economy. In spite of vital importance, there was shortage of branches of commercial banks in the areas of sub-continents, which now constitute Pakistan. When Pakistan got independence, there were only 487 branches of commercial banks, which were further reduced to 195 as at 30/09/47 due to shifting of a number of branches to India or U.K. The Reserve Bank of India, which was made responsible to exercise control over banking sector in both the dominions, did not perform its duties properly in Pakistan. The State Bank of Pakistan was established on 01/07/1948. After the establishment of State Bank of Pakistan, banking expansion got momentum but real progress was not achieved until 1959, when a dynamic banker Mr. Agha Hassan Abedi conceived the idea of opening a bank different from others. His dream was translated into reality on November 07/1959 when first branch of UBL was opened at Macleod Road Karachi (now known as I.I. Chundrigar Road). This achievement was secured after passing through many problems and after completion of a lot of legal formalities. UBL was established on 24-07-59 as a public limited company with registered office at I.I. Chandrigar road Karachi. The authorized capital was RS. 20,000,000 issued, subscribed and paid up capital was. RS. 10,000,000 divided into 1,000,000 shares of RS. 10each.
13
Chapter-3
The first Board of Governors of UBL consisted of the following members; 1 2 3 4 5 6 7 8 Mr. Ismail Ibrahim Chandrighar Mr. Muhammad Shafiq Saigol Mr. Muhammad Rafiq Saigol Mr. M.Bashir saigol Mr. A. Razaq Dada Mr. Mian M.Yahya Mr. M. Saeed Saigol Mr. Agha Hassan Abidi Chairman Managing Director Director Director Director Director Director Director and General Manager
Presently UBL is managed by a board of directors including one president, 4 directors from UBL, 1 from Pakistan Banking Council and one from ministry of finance. The names and designations of present top management include; 1 2 3 4 5 6 7 8 Mr. Amar Zafar Khan Mr. Afzal H.Mufti Mr. Iltaf M. Saleem Mr. Iftikhar Allahwala Mr. Munnawar Hameed Mr. Syed Shamsul Haq Mr. Afaq Tiwana Mr. Abdul Ghafoor Chairman and president Director Director Director Director Director Director Corporate Secretary
Since inception, UBL provides personalized, efficient and courteous services to its customers and has achieved dynamic progress in a short span of time. UBL has achieved the distinction of earning profit in very first year of its operation. UBL also introduced many remunerative schemes for its depositors and introduced computer services for the first time in the banking history of Pakistan. UBL gives advance finances to small, medium and large industries, commercial establishments, agriculturists, construction companies and other needy persons. UBL offers computerized services to intending Hajis free of cost. UBL collects Electricity, Gas and Telephone bills from public and issues 14
Chapter-3
TV licenses on behalf of Pakistan Television Corporation. It also offers evening banking and lockers facilities at its selected branches. Over 100 branches deal in foreign exchange where facilities to importers, exporters, travelers and other persons are being given. UBL arranges prompt payment of inward remittances. Similarly for issues of outward remittances minimum time is taken. Other auxiliary services such as unicorn, inland travelers checks, school banking and collection of checks and other documentary bills drawn on its station drawees are offered. The names and tenure of various presidents of UBL after nationalization are given here under1;
. Daily Dawn Amar Zafar Kahn appointed as new president of UBL, Lahore, Jan 15th
2000, P-11
15
Chapter-3
S.N o. 1 2 3 4 5 6 7 8 9 10 11 12 13
Name of Presidnet
From
To
Mr. Mushtaq Ahmad Khan Yousafi Mr. Kh. Zai Ud Din Mr. Sami Mr. M. Sadiq Dar (Acting president) Mr. Tajammal Husain Mr. Amjad Ali Mr. Maqbool A Soomro Mr. Salim Malik Mr. Maqbool A Soomro Mr. Aziz ullah Mamon Mr. Shafi Arshad Mr. Zubayr A Soomro Mr. Amar Zafar Khan
01/01/74 01/01/77 01/01/80 04/02/82 01/01/83 16/07/88 7/02/89 19/07/89 01/08/90 15/05/93 4/08/96 14/07/97 15/01/00
31/12/76 31/12/79 01/02/82 31/12/82 15/07/88 04/02/89 18/07/89 01/08/90 15/05/93 4/08/96 14/07/97 15/01/00
4.1 NUMBER OF BRANCHES

UBL has a large network of branches, which extends to the remotest areas of the country. In December 1983, there were 1623 branches whereas in 1974 it had only 1238 branches and in December 1999 there were 1417 branches.
16
Chapter-3
Overseas Branches UBL has been very active in increasing its overseas branches network. The first foreign branch was established in London in 1963. Now UBL has branches in Bahrain, Qatar, Saudi Arabia, United Arab Emirates, Yemen Arab Republic, UK, Switzerland, Egypt, Oman and The United States. These branches are playing a significant role in channeling home remittances and foreign trade of Pakistan. Subsidiaries UBL has two subsidiaries, namely, United Bank of Lebanon & Pakistan United bank A. G. Zurich. United bank of Lebanon and Pakistan was established in 1968, 1st had a paid up capital of dollars 379,000, deposits of dollars 125,978, advances of dollars 1983,313 and six branches as on December 31,1983. United Bank A.G. Zurich also was established in 1968 and had a paid up capital of dollars 2722 thousand, deposits of dollars 5827 thousand and advances of dollars 5538 thousand as on December 31, 1962. Joint Venture UBL has two ventures, Commercial Bank of Oman limited, established in 1975. It had a paid up capital of dollars 8,700 million, deposits of dollars 7,333 million, advances of dollars 73.993 million and 11 branches as on December 31,1962. And United Saudi Commercial Bank Limited (Saudi Arabia), established in 1982.
17
Chapter-3
4.2 SERVICES OFFERED BY UNITED BANK LIMITED

Islamic Banking The interest free banking system was introduced on January 1, 1981. Since then, UBL has played an important role in the successful operation of this system. For this purpose, it has established a special division, The Islamic Banking Cell. The sincere efforts of UBL as making Islamic Banking successful is proved by the fact that it declared the highest rate of profits for PLS deposits for the first half year of 1983. This has been due to a sound planning of all its Islamic Banking efforts. The bank has provided capital to businessmen and industrialists on the basis of Mudaraba and Musharika. Additionally the bank has started interest- free hire purchase and lease schemes for financing purchase of buses, trucks and industrial machinery on installments. The bank also provides. Qarz-e-Hasna to needy and deserving students. UBL has also played important role in Islamic banking and successful operation of Non - interest based system of banking. Agriculture UBL has contributed in full measures to the development of agriculture. It has always exceeded, by a considerable margin, the targets given by the State Bank of Pakistan. UBL has also provided loans for a variety of agricultural activities including tractors, tube-wells, fertilizers, insecticides, poultry farming, bio-gas plants etc. The banks officers who are qualified agricultural graduates not only provide loans at the doorsteps of the farmers, they also render technical assistance to them. To maintain constant liaison with the farmers, they have been provided with motorcycles.
18
Chapter-3
Financing of Small Business To meet the goals of social justice, the bank has zealously participated in the small loans scheme. It has always tried to exceed the targets fixed by the state Bank. A fullfledged department catering the needs of small businessmen is functioning. To improve its operations, the bank has made arrangements for overseas training of its staff. The bank is also participating in the dollars 30 million IDA credit, which will be provided to small industrialists. For training its staff, a staff collage was established at Karachi in 1994. Now there are three such colleges at Karachi, Lahore and Rawalpindi where the officers and staff are provided extensive training. Furthermore for training senior officers, a UBL school of Banking has been set up at Karachi. Senior bankers and management experts provide training to the executives and senior officers of the bank. Research Department UBL was the first commercial bank in the private sector to establish a fullfledged Research Department. Prominent economists of the country have been acclaimed both at home and abroad. Not only does this research provides useful and cogent studies of economic development in Pakistan and abroad, it also assists in the managerial decision making process. The Research Department is publishing Economic Matters every month since 1967. It was recently upgraded to UBL Economic Journal. In addition, the department also brings out the UBL Home Journal.
19
Chapter-3
Computer Services UBL was the first bank to introduce computers. The Computer Division was established in 1968. Presently, UBL has Computer Department at Karachi, Lahore and Rawalpindi. Many branches have been fully equipped with computers. . The Computer Division prepares weekly, monthly, quarterly, biannual and annual reports for top services to many Government, Semi Government and private institutions. Service to Hajis For providing prompt and efficient services to the intending Hajis who come to UBL every year, the bank has introduced the most modern system of electronic banking which permits all formalities to be completed within a short time. This year, UBL received the greatest number of applications from customers for Hajj, which shows the customers faith in UBL. Auxiliary Banking Service The bank provides a number of auxiliary services such as credit cards, travelers checks and school banking. Collection of Utility Bills UBL also collects electricity, gas, and telephone bills from the public on behalf of the respective organizations. The bank also introduced the bills collection facilities in selected branches in the evening hours for the convenience of general public.
20
Chapter-3
Issuance of TV License UBL also collects TV License fee on behalf of Pakistan Television Corporation and issues TV Licenses to the general public. Sports UBL was one of the first banks to patronize sports. Senior executives at the highest level supervise the sports activities. The bank has established a special department to organize its various sports activities. It has provided parsonage to leading sportsmen. Many outstanding test players and national players have been on its teams. The bank has won various trophies in hockey, cricket, badminton, table tennis, rifle shooting etc.
21
Chapter-4
Organizational Structure of UBL
4
ORGANIZATIONAL STRUCTURE OF UBL
As stated before, a Board of Directors consisting of one President, 4 directors from UBL, one from Pakistan Banking Council, one from Ministry of Finance and an additional one who is the secretary of the board manages United Bank Limited. Hence the board of directors is an 8-member team, which manages the overall operations of the bank. Under the board of directors is the executives committee consisting of 7 members including the president/chairman of UBL and the Secretary of UBL. These members of the Executive Committee, except Secretary, are in-charge of many divisions. These members are all Senior Executive Vice Presidents (SEVP). There are 20 divisions, which have their own heads who are Senior Executive Vice Presidents (SEVP), Executive Vice Presidents (SVP) or Senior Vice Presidents (SVP). The SVEP of international division manages the overseas filed operations of the 26 UBL branches located in 10 different countries. In the Domestic field operations, UBL has established its presence all over the country. Its filed operations are one of the most extensive among the leading banks in Pakistan. Every province has a Provincial Chief, usually an SEVP, who overlooks the operations of UBL in that particular province. Under the provincial chief is the General Managers who is either EVP or SVP. The general managers are responsible for either a number of regional areas or incharge of various provincial departments such as Administration, Recovery, General inspection, Loan etc. The number of general managers depends upon the complexity and extensiveness of the field operations in the province. Below the general manager are the circle executives who are senior vice president (SVP) or Vice-Presidents (VP).
22
Chapter-4
The circle executives are in-charge of geographical circle areas such as Islamabad circle, Peshawar North circle, South circle etc. In each circle area, there are a number of zones such as Peshawar Cantt Zone, Peshawar city Zone etc. There is Zonal Head for every Zone who is either a Vice President (VP) or Additional Assistant Vice President (AVP). In each Zone, there are a number of bank branches, which are managed by branch managers who are Grade-1or 2 officers. In each branch, in turn, there are a number of graded officers and non-graded employees (e.g. peon and gunman). In the UBL organization, the employees are promoted to higher ranks. In Grade-1, it includes the AVP, VP, SVP, EVP, and SEVP. The difference in salaries and power is primarily due to seniority in the organization and competence.
23
Chapter-4
UBL ORGANIZATION CHART

President
Senior Executive Vice President (SEVP) Executive Vice President (EVP) Senior Vice President (SVP)
Vice President (VP)
Additional /Assistant Vice President (AVP)
Grade -1
Grade -II
Grade -III
Clerk, Cashier etc
Non Clerical staff
24
Chapter-6
Departmentation
DEPARTMENTATION
6.1 ACCOUNTS DEPARTMENT
This department deals with the internal accounts of the bank. The only Book maintained here is the cashbook. The summary book and main ledger are maintained through the computer. The function of cashbook is to balance the daily transactions. At the end of the day this department receives cash position from the cashier. This position shows opening and closing balance.
TYPES OF ACCOUNTS: There are three types of accounts: Current Accounts Saving Accounts Fixed Accounts
A)
CURRENT ACCOUNT:
In current account, there is no restriction on the account holder for the withdrawal of money. He can take as much money as he wants and no profit is given on this account. It can be further classified into the following types: * Individual Account:
Individual account is opened in the name of a single person. The person in whose name is it opened can only operate it. The bank doesnt pay any interest on it. * Joint Account:
25
Chapter-6
Departmentation
Two or more persons open the joint account and the bank follows their instructions for the conduct of the account. * Proprietorship Account:
A partnership firm is a business unit whose ownership and management are vested in one person. This individual assumes all risk of loss or failure of the enterprise and receives all profits from successful operations. * Partnership:
Partnership is an avocation of two or more persons who have agreed to share the profit of a business managed by all or by some of them on behalf of all. A deed is prepared on the stamp form by the partners approved by Sub-Registrar and presented to the bank. The bank follows this deed during the conduct of account. This is, when the partnership is registered. In case of unregistered firm, the bank takes the instruction from the party at the bank on account opening form. * Limited Companies:
There are two types of limited companies; a. Private Limited Company b. Public Limited Company
a) Private Limited Company:

The shareholders of limited company are called directors. The board of directors decides the bank in which they should open their account and the amount to be kept in current account. The bank requires the following documents from the board of directors; - The Article and Memorandum of Association
26
Chapter-6
Departmentation
- The Certificate of Incorporation - Resolution of Board of Directors - List of Directors
b) Public Limited Company:

The public limited company, not only requires the above-mentioned documents, but in addition to it, it also needs a certificate of commencement of business. Power of Attorney: Power of attorney is an instrument in writing in which one person authorizes another to do any lawful acts on his behalf. The proprietor can give authority to any person to handle his account in his absence. The owner of the form writes deed on the stamped form. Oath commissioner attests it. The bank follows all the instructions given on the stamp form. B) SAVING ACCOUNT In the saving account, the client receives certain profits on his account. The saving accounts are of two types; Individual account: It is opened and conducted by a single person. Joint account: It is opened and operated by two or more persons. The account holder regarding handling of the account gives instructions. C) FIXED ACCOUNT In the fixed account the deposits that can be withdrawn after a specified time are referred to as fixed or term deposits. The account holder keeps a specified amount of money for a definite period of time. The amount deposited is not withdraw able by checks and after the maturity of the account,
27
Chapter-6
Departmentation
the account holder receives the actual money along with return at rate, previously agreed upon. A single individual, partners and companies, too can maintain such accounts as well. The period for which the bank keeps these deposits ordinarily varies from three months to sixty months in accordance with the agreement made between the customer and the bank.
6.2 REMITTANCES DEPARTMENT

This dept is concerned with transfer of money from one place to another place. Remittance can take place in three different ways. a) Mail Transfer When a customer requests the bank to transfer his money from this bank to any other bank or the branch of the same bank in the city/ outside the city or outside the country, the first thing he has to do is to fill an application form in which he states that I want to transfer the money from this bank to another bank. If the customer is the account bolder of bank, then the bank will debit his account. The concerned office will fill the different forms to make the mail transfer complete. Three forms used for this purpose are listed below; Debit voucher Credit voucher Mail transfer register If the customer is not the account holder of bank, then firstly he has to deposit the money and then the above said procedure will be adopted to transfer his money.
28
Chapter-6
Departmentation
b) Telegraphic Transfer This type of transfer is simple. After filling the application form, the concerned officer fills the telegraphic form. This telegram is sent to the required bank. Which on receiving it immediately makes the payment to the customer and afterwards the vouchers are sent to the bank by ordinary mail. c) Demand Draft. DD is just a check and is issued when the customer wants to take the draft personally. The idea behind it is that as the cash is not safe to be kept along and a check in the shape of a draft is safer and one can easily get cash by presenting it in the bank, on whose favor it has been made. Draft is only issued when the customer is known to the bank and the bank has the confidence that the customer will not do anything wrong with the draft. For the preparation of a draft, first of all customer has to fill an application form, then the concerned officer fills the following before delivering the draft to the customer. The forms filled for this purpose are as follows; Demand draft register Credit vouchers
6.3 DEPOSITS DEPARTMENT

The main economic function of the commercial bank is to receive surplus balances of individuals, firms, public institutions and to honor check drawn up to it. The funds deposited with the commercial banks are classified under four main heads. a) Current or Demand Deposits In this type of deposits, the depositor at any time by presenting a check can draw his money from the bank. People keep some of their deposits in current
29
Chapter-6
Departmentation
account in order to have ready command over money. No interest is given on current deposits, because it is subject to transfer or cashing by check at sight. The bank charges commission on the account, which is called bank charges. b) Saving Deposits This deposit refers to the deposits, which are kept to meet the customer and unexpected outlay or to safeguard financial respectability. The bank undertakes to repay the money on demand up to a certain limit fixed by the rules of the bank. The bank pays interest to the customers on saving deposits. The customer has to give a notice to the bank about two weeks in advance for withdrawal of large amounts. c) Fixed Deposits Fixed deposits are those, which are repayable only after the expiry of the stipulated period i.e. from three months up to sixty months. The rate of interest depends upon the length of the period. The rate of interest on fixed deposits is higher than saving account, because the bank can safely utilize these deposits for a certain period. Customer is allowed to borrow the required amount, which should not exceed his fixed deposit. The bank charges one or two percent higher rate of interest than the profit allowed to him at his fixed deposit. The bank issues a receipt against the fixed disposition stating the amount and the time of expiry to the customer. There is no paying book or passbook or checkbook issued to the depositor.
d) Call Deposits It is a type of bank guarantee on behalf of the depositor given at call. In this case, Security Deposit Receipt (SDR) is issued by the bank at the instructions of the depositor, confirming that amount of the SDR is held by the bank, to be paid whenever called upon to do so by the beneficiary named in the SDR.
30
Chapter-6
Departmentation
6.4 ADVANCES DEPARTMENT

It is the loan function, which produces the major portion of banks income, and as such it is one of the major areas of professional bankers concerns and attention. A bank generally deals in following areas; Agricultural finance Commercial finance Industrial finance Export finance Import finance In addition to the above-mentioned broad areas, there are loans available to small size businessmen, construction companies etc. In UBL, advances department is responsible to deal with following cases; 1. 2. 3. To handle all the cases of short and long term loans. To process all the cases concerned. To forward the cases for approval and consideration to the higher authorities. 4. 5. 6. To deal with the borrower directly. To implement the disbursement of the loan. To give feed back to higher authorities in advance.
UBL advances loans in the following manners:
31
Chapter-6
Departmentation
a) By Cash Credit: In this form of lending, the bank lends money to the borrower against a tangible security. The total amount of the loan, which is given, is not paid in one installment. The borrower has to pay interest on the amount borrowed. Cash credit is the favorite loan for large commercial and industrial concerns, on account that the customers need not to borrow at once the whole amount he is likely to require, but can draw such amount as and when required. Cash credit is obtained either by Hypothecation or Pledge. Peculiarities of Hypothecation 1) Custody of the stock remains with the customer. 2) Bank lien on the stock. 3) Stock hypothecated must be insured against fire etc. 4) Customer/ party must submit the stock record on monthly basis. 5) Frequent stock verification may be made by UBL 6) Bank may sent officers or staff for surprise verification. Peculiarities of Pledge 1. Stock/ Goods are pledged with bank under lock and key. 2. Goods/ stock must be duly insured against fire and burglary. 3. On monthly basis stock report has to be prepared by borrowers/ UBL. 4. Delivery of goods is made against cash payment. b) By Discounting Bills of Exchange: It is another method of advancing loans to borrowers. The holder of bills is paid an amount equal to the face value of the bill after deducting interest at the
32
Chapter-6
Departmentation
market rate for the period the bill has to mature. Interest in this type of loan can be charged as running finance and demand finance. C) By Over Drafting: This facility is given to regular, reliable and well- established customers. The bank charges interest on the extra money, which the borrower takes. When a customer requires temporary accommodation, he may be allowed to overdraw his current account usually against collateral security. From the customers point of view this agreement like cash credit is advantageous, as he is required to pay interest on the amount actually used by him. There can be temporary, secured and clear overdraft.
FIM OR FINANCE AGAINST IMPORTED MERCHANDISE

FIM is short-term facility given to such importers who are not in the position to collect their documents due to unavailability of funds for time being or lack of finance. Against FIM, amount will be adjusted within three months after the lapse of six months. In FIM, UBL deals in documents.
33
Chapter-6
Departmentation
FIANCE FOR EXPORT MERCHANDISE

It is facility granted to the exporter, it is pre-shipment facility. The exporter applies for such finance to bank by showing Export L/C. or some export order from foreign countries excluding Israel. The bank gives him loan, which he would utilize for the execution of the export order.
PROCEDURE OF APPLYING FOR LOANS

Any customer who applies for loan should have an account (usually current account) with the UBL branch concerned. That account must be in running position. When approval comes, bank gives terms and conditions to the party. Bank does not advance 100% loan against a security, rather a 30% margin is deducted from all loans. The borrower has to provide some important documents. a. Two personal guarantees b. Charge forms c. Confidential report d. NIB s non interest banking Charge form is taken from party for if it turns bankrupt, bank goes to court of law then this agreement helps.
6.5 FOREIGN EXCHANGE DEPARTMENT

In modern banking system, foreign exchange department plays very crucial and important role from every aspect. It is parallel banking with general banking with an additional function of import and export business controlled by State Bank of Pakistan. Rules and regulations are framed by state Bank of Pakistan in the form of manuals. 34
Chapter-6
Departmentation
Foreign exchange department under SBP regulations also carries out international banking of UBL. Foreign exchange is being controlled by SBP. No transaction can be affected without permission of SBP, under foreign exchange regulations Act 1947 and notification issued there under. Exchange control department of State Bank of Pakistan is responsible for day-to-day administration of exchange control. All the transactions shall be done at rate authorized by SBP. For this purpose, US dollar has been fixed by SBP and the rates of other currencies are calculated in accordance with the formula approved by SBP and as published daily by the Foreign Exchange Rate Committee in Karachi. Head office ensures that the branches receive the rates published by Foreign Exchange Rate Committee on the same day. The foreign exchange department provides the following services; 6.5.1 Foreign Currency Accounts Foreign currency in UBL can be opened in 4 major currencies of the world i.e. US dollar $, Japanese Yen, German Mark, DM and Pound Sterling. Only authorized branches of UBL can deal in foreign currency account. Pakistani citizens and foreigners both can open foreign currency account by introduction and following the procedure required for general accounts with one exception for foreigners that they will have to submit a copy of their passport. The account may be personal or joint. Amount deposited in foreign currency account must be in four currencies, which were mentioned earlier. When the customer will withdraw the money he will receive the amount in the same foreingn currency. Profit will also be in the same currency.
35
Chapter-6
Departmentation
There are two types of foreign currency account; a) Current account b) Saving account A) Current Account On current account, no profit is given to the account holder. This account is exempted from zakat, income tax and wealth tax. Worldwide remittances (inside and outside) facility is given to customer. Cash travel checks, foreign exchange bearer certificate, and coming for customer can be deposited in his account. Similarly account holder can shift the amount or any part thereof to foreign countries through exchange remittances service. B) Saving Account On saving account, a handsome profit is paid to the account holder. On saving account, profit is paid to the customer in the same currency in which he had opened the account. This account is also exempted from zakat, income tax and wealth tax etc. Saving account can be opened with an amount of $ 100 equivalent in other three currencies. The facility of inward and outward remittance is also granted to the customer. Profit is paid on monthly product basis. 6.5.2 Sale and Purchase of Foreign Currency UBL is an authorized dealer of State Bank of Pakistan. It can sell and purchase foreign currency. UBL usually involves sale and purchase of US dollars, Japanese yen, Pound Sterling, German Mark, Saudi Riyal, and UAE Durham. Daily exchange rate by SBP from ANZ Grindlays Bank Karachi is sent to all the branches authorized in foreign exchange. Daily sale and purchase of
36
Chapter-6
Departmentation
foreign currencies is done according to that rate sheet issued by SBP on daily basis. Sale and purchase rates of foreign currency are different. The purchase of coins is avoided, only notes are purchased. Only those foreign currencies are purchased for which resale to customer is possible. And only those persons, who have passport, can sell and purchase foreign currency to or from UBL. Foreigners can also sell foreign currencies by showing their passport. There are 5 rates of foreign currencies: 1. For import 2. Cash purchase 3. Cash sale 4. Travel check purchases 5. Foreign currency It is the policy of UBL to involve only in the sale of hard currencies i.e. those, which are easily accepted. Head office of UBL has given certain limits to each authorized branch about the custody of foreign currency. If the amount exceeds this limit, the branch must transfer the cash to feeding branch or SBP. All the authorized branches of UBL must submit following reports about foreign exchange business; 1. Report to general manager office 2. Monthly business report to SBP 3. Monthly report to head office 6.5.3 Remittances in Foreign Exchange As we know that the money of one country is not legal tender in other countries. The monetary device, which has been evolved, for all international 37
Chapter-6
Departmentation
payments is the foreign exchange from the exporter and others who have it for sale and sell foreign currency to importers and others who need it in their own countries. A transfer from a bank account in the debtors country to the creditors country affects the international payments. Two branches of the same bank or of different banks involve in foreign remittance. One is called remitting branch or bank and the other is called receiving branch or bank. In foreign currency, SBP has given general permission to authorized dealers in foreign exchange including UBL to affect remittances for specific purposes without referring it to (SBP) for approval i.e. remittance on account of education subscription, books and periodical of technical nature. Remittance can be done in following ways; 1. Telegraphic Transfer (TT) 2. Mail Transfer (MT) 3. Foreign Demand Draft (FDD) 6.5.4 Advance in Foreign Exchange UBL gives the facility of loan on prime currency scheme in Pakistani rupees. In other words we say that loan on the basis of foreign currency given only in Pakistani rupees and not in foreign currency. UBL gives running finance demand facility to customer when an account holder applies for loan on the basis of foreign currency account. UBL will keep an eye on his deposits or as per the sanction of competent authority will allow advance to the customer. IMPORT EXPORT AND L/C As import and export business is very risky. The importers want the surety of goods to be delivered to his prescribed destination while exporter wants surety of the money to be reached to his prescribed bank. So, with a view to
38
Chapter-6
Departmentation
overcome such difficulties a system of L /C is designed and its operation is controlled under the Article of the Uniform Customs And Practices for documentary credits as adopted by The Council Of International Chamber Of Commerce and enforced with effect from Jan 1983. Different banks are involved in foreign exchange transaction of export and import. A) Issuing Bank It is that bank which opens letter of credit and sends it from where import is to be made. Issuing bank may send L/C to one of its branches or some agents or any other bank of the country. B) Advising Bank It receives the letter of credit send by the branch of issuing bank or recognized agent in this connection. Advising bank advises the exporter about L/C so received. C) Negotiating Bank Negotiating bank is that bank which conducts negotiation from exporters side. It may or may not be advising bank. The documents are negotiated as per the terms of L/C D) Reimbursing Bank This is the bank, which reimburses the payment to the negotiating bank. It may be a special bank or issuing bank. LETTER OF CREDIT A letter of credit is a document issued by the importer countrys bank authorizing the exporter countrys bank to honor the checks of the exporter to the extent of the amount mentioned there in. In this way, a substitute bank
39
Chapter-6
Departmentation
enjoying good faith and credit for that of an importer who is comparatively unknown protects the exporter. The importer is also protected as the letter of credit specifies in close details all the things an exporter must do to receive payment. TYPES OF LETTER OF CREDIT Irrevocable Letter of Credit Irrevocable L/C is one which cant be cancelled once decided by the parties and in which the issuing bank gives a lasting undertaking to accept and in due course to pay bills drawn up to it provided that the exporter fulfils the terms and conditions stipulated in the letter relating to documents, insurance etc, etc. Revocable Letter of Credit This L/C can be modified or cancelled by the issuing bank at any time without any obligation on its part. This letter is usually not acceptable to the businessmen. Unconfirmed Letter of Credit In unconfirmed L/C, the bank through which the credit is negotiated does not give any guarantee to the exporter that the issuing bank will honor the bills drawn. Clean Letter of Credit If there are no conditions attached to the bill and the issuing bank makes payment up to the credit limit, the letter is called A clean letter of credit OPENING OF L/C This mechanism of financing trade through letters of credit is quite simple. The importer or buyer will contact the seller in foreign country for the purchase of particular goods.
40
Chapter-6
Departmentation
The importer will then submit an application to his bank for the issuance of an individual letter of credit. The bank supplies the form on which the buyer applies for a letter of credit. This form contains all the necessary details of course, the description of merchandise, port of shipment, port of unloading, the document against which the bank is to honor the draft and the total value of the goods. When the buyer bank is called upon to honor the draft, the bank will concern it self only with the features of the contract of sales. The letter of credit can be opened by mail or by cable. When the letter of credit is opened by mail, the buyer bank sends the letter of credit and the carbon copies of the letter to the importer. If an importer directed the bank to open letter of credit by cable, the buyers bank sends a cable (Telex) to the corresponding bank in the foreign country with request to notify the exporter of L/C and terms and conditions laid there. Following documents must be attached with L/C; 1. Application of L/C. 2. Performa invoice of sending foreign company. 3. Membership certificate of chamber of commerce or association. 4. Insurance certificate. 5. IBC charge form. Negotiation of L/C Documents Negotiation will take place in following manners; 1. The seller sends the documents evidencing the shipment to the bank where the credit is available, accompanied by a draft drawn on the buyer, or on any other drawer specified in the credit at sight or at a tenure as specified in the L/C. 41
Chapter-6
Departmentation
2.
After checking that the documents meet the credit requirements, the bank may negotiate the draft. Negotiating by the issuing bank or any other bank will be with recourse to the seller.
3.
This bank then sends the documents and the drafts to the issuing bank. Reimbursement is obtained in the per-agreement manners.
6.6 CLEARANCE HOUSE

A clearinghouse is an association of commercial banks, set up in a given locality for the purpose of inter-change and settlement of credit claims. The function of clearinghouse is performed by the central bank of a country by tradition or by law. In Pakistan, the clearing system is operated by SBP. If the SBP has no office at a place, the National Bank of Pakistan (NBP) as a representative of SBP acts as a clearing agent. The mechanism whereby checks are exchanged in bulk and the cross obligations of the banks are off set is now explained in brief. Check as we know, is an effective method of making payments. When checks are drawn on one bank of drawer, the mutual obligations are settled by the internal bank administration and there arise no inter-bank debits from the use of check. The total liabilities of the bank remain unchanged. In practice, the person receiving a check is rarely a deposition of the check in the same bank as the drawer. He deposits the check with his bank (other than that of the drawer) for the collection of the amount. Now the bank in which the check has been deposited, becomes a creditor of the drawers bank. The debtor bank will pay his amount of the check by transferring it form cash reserves, if there are no offsetting transactions. In the course of every day life, there is large number of checks drawn on a bank, deposited in other banks. The banks,
42
Chapter-6
Departmentation
on which the checks are drawn, become in-debt to the banks in which the checks are deposited. At the same time, the creditor banks receive large amount of checks drawn on other banks giving claims of payment to them. It will be most uneconomical and confusing if banks had to transfer cash for meeting each others liability. The easiest safest and the most efficient way is to offset the net payment. This facility of net inter bank payments is provided by the clearinghouse. The representatives of the local commercial banks meet at a fixed time on all the business days of the week. The meeting is held in office of the bank, which officially performs the duties of a clearinghouse. The representatives of the commercial banks deliver the cheques payable at other local banks and received by them. Totals are also made of all the checks presented by or to each bank. The difference between the total represents the net amount payable to or by it. Banks keep two books regarding clearinghouse. Onward clearing book. For the purpose of recording all the checks that are received by the bank in the first clearing uses this. Details of checks are recorded in this book. Outward clearings book. This book uses outward clearing register for the purpose of recording all the details of the checks that the bank has delivered to other banks in first clearing.
43
Chapter-7
Financial Products of UBL
7
FINANCIAL PRODUCTS OF UBL
7.1 UNI CASH
Now a days carrying cash while going out of your home is very risky. Every body wants maximum security while keeping his money in his pocket. People make use of TC and various credit cards for this purpose. UBL provides such facility through UNI CASH. The management of UNI CASH is carried out in the following way. Personal identification number When a Uni-Cash card is issued to a customer, a unique number known as Personal Identification Number (PIN) is also allotted to him/her. This is a 4 digits confidential number which when used in conjunction with the Uni-Cash card enables the customer to avail the cash point service. To keep it secret even from the bank staff, the PIN is generated and printed in a special manner by the computer on pre-sealed, tamper proof PIN millers. These PIN millers are designed in such a way that the PIN is only visible after the envelope is opened by the customer. Pin change As an additional safeguard, customer can change his PIN number. This means that he will allot himself different 4 digits secret number instead of the one received by him in the pin miller. For this purpose, he may like to select a number, which he finds easy to remember, but which any other person cannot easily guess. Card serial number The customer will notice that some numbers and alphabets are embossed on his Uni-Cash card. The first line obtains UNICASH CARD SERIAL
44
Chapter-7
NUMBER while the other line has customers name, account number and card expiry Month/ Year. Weekly withdrawal limits The Uni-Cash card issued to customer carries a weekly withdrawal limit, which applies to cash withdrawal, made from any of the cash point. This limit is equal to initial amount deposited by him at the time of applying for his card. Cash points For customers convenience, a number of cash points are available in the country. These machines are at customers service round the clock on all days of the year. Uni-Cash card can be used in these machines. Besides cash withdrawal, cash points would provide the following facilities; 6.7 Balance Inquiry Mini Statement 6.8 Pin Change Card captures Cash points will automatically capture card that have been duly reported as lost or have been cancelled or have expired. Similarly if one fails to key-in his correct PIN, in three repeated attempts, the card will be captured.
45
Chapter-7
Time out In order to provide added security, UBL cash point has been programmed to capture the card if the customer forgets to take it back after a transaction. Similarly if customer forgets to take the cash within a present time limit, the machine will also take it back. Normal time for recapture of the card/cash is 20 seconds. Loss of card In case, customer loses his UNI CASH card or the card is stolen, the matter should invariably be brought to the notice of the bank personnel.
7.2 UNI SONA

This product has been designed to attract more and more savings. As inflation in Pakistan is at a very high rate, due to which money has very limited value. The features of Uni-Sona are the following; 1. The amount deposited in the bank becomes triple after seven years. 2. If person withdraws his money after five years he will get double amount as compared to its initial deposits. There is also a facility for partial withdrawal from principle amount. For example, if a person has deposited Rs.50, 000,000 in January 1993 and he withdraws Rs.20, 000,000 in January 1995. In 1996 the person has Rs. 30,000,000. This amount will receive the same interest rate and would be doubled (Rs. 60,000,000) in January 98 and triple (RS. 90,000,000) in January 2000.
46
Chapter-7
7.3 UNIZAR
It is a special type of foreign currency account and can be opened in two currencies i.e. US $ and Pound Sterling. Minimum amount required for opening of this account is 750 pounds or $ 1000. Profit is paid in the currency in which the account is opened. Rate of return of 2.25% is paid to the depositor. A special feature of this account is that withdrawal from the deposits can be made anywhere in the world in the UBL branch.
7.4 UNISAVER
It is a special type of account designed for corporate savers. This account can be opened with Rs. 1 m up to Rs. 10 m. The minimum profit rate is 4% while maximum limit is 8%. Profit is paid on daily product basis. Any one can open this account.
7.5 TEZRAFTAR
It is an annual home remittance service for overseas remittance, promising delivery within 24 hours. This facility is a perfect substitute to the Hundi business.
47
Chapter-8
Financial Analysis
8
FINANCIAL ANALYSIS
COMMON SIZE ANALYSIS
Balance Sheet as at December 31, (Rs. In thousands)
Regular
%age 1998 11,1222,801 2000 5.23 1999 7.55 1998 7.94
Assets
Cash &Cash Reserves Balances With Other Banks & Money at Call Investments AdvancePerforming NonPerforming TaxesRecoverable Deferred Taxation Operating Fixed Assets Other Assets Total Assets
2000 8,129,223
1999 11,657,573
10,995,922 33,101,778 74,156,421 6,380,572
12,010,493 44,953,910 61,714,410 5,411,265
10,453,410 47,955,359 48,468,324
7.08 21.32 47.78 4.11
7.77 29.10 39.95 3.50
7.47 34.25 34.02
8,297,500 2,764,367
9,101,500 2,811,978
2,828,198
5.34 1.78
5.89 1.82
2.02
11,385,333 155,211,116
6,789,328 154,450,457
19,163,552 139,991,646
7.33 100
4.39 100
13.69 100
48
Chapter-8
Financial Analysis
Regular
%age 1998 117,718,301 2000 82.91 1999 82.31 1998 84.09
Liabilities
Deposits &Other Accounts Borrowings From Other Banks Bills Payable Other Liabilities Deferred Liabilities
2000 128,679,245
1999 127,133,204
4,859,758 1,186,961 10,387,683 1,294,883
7,329,160 1,508,553 9,427,031 1,002,297
5,495,192 865,559 6,918,942 1,278,598
3.13 0.76 6.69 0.83
4.74 0.97 6.10 0.65
3.92 0.62 4.94 0.91
146,408,530 Share Holders Equity Surplus/(Deficit) on Revaluation of Securities Surplus on Revaluation of Fixed Assets Total Liabilities 2,179,391 (103,409) 6,726,604
146,400,245 5,866,362
132,276,592 5,531,202
94.33 4.33
94.78 3.80
94.49 3.95
(0.06)
2,183,850
2,183,850
1.40
1.41
1.56
155,211,116
154,450,457
139,991,644
100
100
100
49
Chapter-8
Financial Analysis
COMMON SIZE ANALYSIS

Profit & Loss A/C for the year, ended Dec 31, (Rs. In thousands)
Regular 2000 Mark Up/ Interest And Discount And /or Return Earned Less: Cost/Return on Deposits, Borrowings etc. Gross Profit Fees, Commissions Brokerage Divided Income Other Operating Incomes Total Income Administrative Expenses Operating Profit Provision Against Performing Assets Non& 10,416,460 1999 9,861,676 2000 100
%age 1999 100
(6,740,868) 3,675,592 1,180,448 22,733 2,293,856 7,172,629 (5,159,130) 2,013,499 (120,539) 1,892,960 (247,463) 1,645,497 (978,405) 667,092
(7,508,557) 2,353,119 969,051 18,417 2,139,140 5,479,727 (4,719,951) 759,776 (65,504) 694,272 558,787 1,253,059 (746,000) 507,059
(64.71) 35.28 11.33 .22 22.02 68.86 (49.53) 19.33 (1.16) 18.17 (2.37) 15.80 (9.39) 6.41
(76.14) 23.86 9.82 .19 21.69 55.56 (47.86) 7.70 (.66) 7.04 5.67 12.71 (7.56) 5.14
Profit Before Unusual Items Unusual Items Profit Before Taxation Taxation Charges Profit After Taxation
50
Chapter-8
Financial Analysis
TREND ANALYSIS (REGULAR) (Rs. in thousands)

UBLS GROWTH IN DIFFERENT AREAS
1995 Authorized Capital Paid Up Capital Reserve Fund Total Assets Total Deposits Advances & Investments Total Expenditure 2,950 1,482 2,113 124,283 109,260 95,866 11,380
1996 2,950 1,482 2,133 121,820 106,735 87,787 10,377
1997 2,950 1,482 4,360 101,490 106,711 76,656 11,293
1998 25,000 22,482 383,2 139,510 117,718 96,423 11,359
1999 25,000 22,482 3,761 154,450 127,133 106,668 12,026
2000 25,000 22,482 4,087 155,211 128,679 107,258 11,899
51
Chapter-8
Financial Analysis
TREND ANALYSIS (PERCENTAGES)
1995 Authorized Capital Paid Up Capital Reserve Fund Total Assets Total Deposits Advances Investments Total Expenditure 100 & 100 100 100 100 100 100
1996 100
1997 100
1998 847.45
1999 847.45
2000 847.45
100 100.96 98.01 97.68 91.57
100 163.4 81.66 97.66 79.96
1541.25 181.35 112.25 107.74 100.58
1541.25 177.99 124.48 116.35 111.26
1541.25 193.42 124.88 117.77 111.88
91.18
99.23
99.81
105.67
104.56
52
Chapter-8
Financial Analysis
Reserve Fund Growth for the Last 6 Years
5000 4000 Reserve 3000 Fund 2000 1000 0 1995 1996 1997 1998 1999 2000
Total Assets Growth for the Last 6 Years
160000 140000 120000 100000 Total 80000 Assets 60000 40000 20000 0
1995 1996 1997 1998 1999 2000
53
Chapter-8
Financial Analysis
Total Deposits Growth for the Last 6 Years
150000 100000 50000 0
Total Deposits
1995 1996 1997 1998 1999 2000
Advances & Investment Growth for the Last 6 Years
120000 100000
Advances & Inve stm ent
80000 60000 40000 20000 0 1995 1996 1997 1998 1999 2000
54
Chapter-8
Financial Analysis
Total Expenditure for the Last 6 Years
12500 12000 11500

Total Expenditure
11000 10500 10000 9500 1995 1996 1997 1998 1999 2000
Authorized Capital for the Last 6 Years
25000 20000
Authorized Capital
15000 10000 5000 0 1995 1996 1997 1998 1999 2000
55
Chapter-8
Financial Analysis
Paid Up Capital for the Last 6 Years
25000 20000
Paid Up Capital
15000 10000 5000 0 1995 1996 1997 1998 1999 2000
56
Chapter-8
Financial Analysis
UBL's Business & Investment Portfolio 2000
Others 8.00%
Textile Spinning 11.30%
Food & Allied 6.60% Chem ecals & Pharm aceutical 5.5% Leather 3.10% Auto & Allied 2.60%
Textile Com posite 11.30%
Energy & Natural Resources 47.60%
M edia 1.30% Cons. Goods 1.10% J ute 1.00%
Construction 0.00% Technology 0.30% F.I.S 0.00%
Services 0.30%
Construction Jute Leather T extile Spinning
F.I.S Cons. Goods Chemecals & Pharmaceutical T extile Composite
T echnology Media Food & Allied Energy & Natural Resources
Services Auto & Allied Others
57
Chapter-8
Financial Analysis
UBL's Business & Investment Portfolio1999
T extile Spinning 24.00%
Real Estate/ Construction 1.00%
Chemecals & Pharmaceutical 8.00% Leather & Jute 5.00% T extile Allied 8.00%
Energy & Natural Resources 19.00%
T ransportation 6.00% T echnology Consumer Goods 2.00% 0.00%
Agri & Food Products 7.00%
Retail & Services 20%
Consumer Goods T extile Spinning T extile Allied
T echnology Real Estate/ Construction Retail & Services
T ransportation Chemecals & Pharmaceutical Agri & Food Products
58
Chapter-8
Financial Analysis
RATIO ANALYSIS
PROFITABILITY RATIOS 1. Gross Profit Margin: This ratio shows the percentage of gross profit in the total revenues. Formula: Gross Profit / Revenue X 100 Year GPM Analysis: The ratio is getting better and better after the 1998 collapse. 2. Net Interest to Total Assets: This ratio shows the net amount of interest earned per 100 dollars of total assets. Formula: Net Interest Earned/Total Assets X 100 Year Net Interest to T. Assets Analysis: The ratio reflects the positive change in advances. 2000 2.37% 1999 1.52% 1998 1.22% 2000 35.29% 1999 23.86% 1998 19.66%
59
Chapter-8
Financial Analysis
3. Return on Assets After Taxes: The ratio shows the net amount earned per 100 dollars of assets. Formula: Net Income/Total Assets X 100 Year ROA Analysis: After the 1998 crisis, the ratio is improving. 4. Total Income to Total Assets: This shows the amount of total income earned per 100 dollars of total assets. Formula: Total Income/Total Assets X 100 Year T. I to T. A Analysis: The ratio has improved significantly in 2000. 2000 4.62% 1999 3.55% 1998 3.22% 2000 .43% 1999 .33% 1998 1.92%
60
Chapter-8
Financial Analysis
LIQUIDITY RATIOS 5. Current Ratio: This ratio shows the relationship b/w current assets and current liabilities i.e how much of current assets we have, to offset a dollar current liability. Formula: Current Assets/Current Liabilities Year C.R Analysis: The gradual decline shows that the bank likes to meet its current liabilities with minimum current assets. 2000 0.87 1999 0.89 1998 0.90
6. Cash Ratio: This is relationship b/w cash at hand and current liabilities i.e how much cash we have against a dollar liability. Formula: Cash/Current Liabilities Year Cash Ratio Analysis: The bank is currently relying less on cash to meet its current obligations. 2000 .056 1999 .080 1998 .085
61
Chapter-8
Financial Analysis
ACTITIVTY RATIOS 7. Assets Turnover Ratio: The ratio shows the dollar amount of revenue earned per hundred dollars of assets. Formula: Revenue/Total Assets X 100 Year ATO Analysis: The ratio is gradually improving. 2000 6.71% 1999 6.38% 1998 6.21%
8. Fixed Assets Turnover Ratio: This ratio shows the dollar amount of revenue earned per 100 dollars of fixed assets. Formula: Revenue/Fixed Assets X 100 Year FATO Analysis: The ratio is improving partially because the bank is slowly and gradually decreasing its fixed assets. 2000 376.8% 1999 350.70% 1998 307.6%
9. Current Assets Turnover Ratio: This ratio shows the relationship b/w the revenue earned and current assets only.
62
Chapter-8
Financial Analysis
Formula:
Revenue/Current Assets X 100 Year CATO 2000 8.24% 1999 7.57% 1998 7.37%
Analysis: The considerable improvement in the ratio last year is due to the increase in revenue and also decrease in the current assets.
10. Interest Expense to Total Income: It is a relationship b/w interest paid to depositors and the total income earned. Formula: Interest Expense/Total Income X Year I.E to T. Income Analysis: Total income is improving substantially against the interest paid. 2000 93.98% 100 1998 155.20%
1999 137.02%
63
Chapter-8
Financial Analysis
11. Taxation to Total Income: The ratio shows the %age of tax applied to total income. Formula: Tax/Total income X 100 Year T.T.I Analysis: As no extraordinary regulatory changes have occurred so the ratio remains almost the same. 2000 13.64% 1999 13.61%
12. Total Expense to Total Income: This ratio shows the amount of dollars spent to earn a total income of dollar 100. Formula: Total Expense/Total Income X 100 Year T.E to T.I Analysis: The substantial change is due to decrease in expenditure and also increase in total income. 2000 165.90% 1999 223.16% 1998 252.2%
64
Chapter-8
Financial Analysis
13. Interest Expense to Deposits: The ratio reflects the rate at which the bank has honored the depositors. Formula: Interest Expense/Deposits X 100 Year I.E to D Analysis: The change shows the bank has cut down the rate of return to account holders. 2000 5.24% 1999 5.90% 1998 5.94%
14. Total Expenses to Deposits: This shows the amount spent to have a deposit of dollar 100. Formula: Total Expense/Deposits X 100 Year T.E to D Analysis: Despite significant improvement in many areas, improvement here is negligible. 2000 9.25% 1999 9.62% 1998 9.65%
65
Chapter-9
SWOT Analysis
9
SWOT ANALYSIS
On the basis of SWOT analysis, one can analyze the present status and performance of an organization and can make conclusions and
recommendations. The SWOT analysis consists of four words that are S, W, O & T, which stand for Strengths, Weaknesses, Opportunities and Threats respectively.
9.1 STRENGTHS:
Something an organization is good at doing is termed as its strength. UBLs strengths are: 1. 2. Experience of operation, as the bank was established in Nov 15 1959. Banks emphasis on consumer banking by providing them with innovative saving schemes, products and services suiting best to their life style. 3. Best and optional policies and attractive compensation packages for employees, which really improved their commitment, dedication and hard work towards the accomplishment of banks objectives. 4. Easy access to the customers at their residential localities through a well spread branch network. 5. Professional and skilled management as UBL provides proper training to their employees.
9.2 WEAKNESSES:
Weakness is something an organization lacks at doing that. For UBL these are:
1.
Customers having accounts with small amounts are not given the same attention given to those with large amounts.
66
Chapter-9
SWOT Analysis
2.
Higher number of branches affecting maintenance in consistency and same working atmosphere.
3. 4. 5.
Political, legal and sauce cultural pressure. Lengthy advancement procedures. Promotion is purely based on seniority, so young processionals having high qualification are having any chance of promotion.
6.
The software developed for daily recording of the operations is underutilized
7.
Most of the personnel are not qualified, they are mainly rankers so they dont know the logic of operation.
9.3 OPPORTUNITIES:
An external situation, which an organization can benefit from, is called opportunity for that organization. UBL can grab the following opportunities:
1.
Growing policies of the Government on business and commerce sector provides UBL an opportunity to efficiently meet the business peoples requirements of instant cash financing facilities.
2.
Customers feedback on different products and services has really improved the banks performance and encouraged the atmosphere for other future policies.
3.
UBL has an opportunity to expand its new technological advancement like Tele bank and Internet banking facilities in order to serve the customers more efficiently. Especially E Banking is a new opportunity which is a flourishing business in foreign countries and can also be here, if UBL takes the initiatives.
67
Chapter-9
SWOT Analysis
4.
Due to efficient and experienced management group, UBL can improve and expand its foreign operations successfully.
5.
Increasing need and potential of leasing in Pakistan provides UBL an opportunity to utilize its skills and efficiencies in leasing business as well.
9.4 THREATS:
An external situation posed to harm organizations interests is regarded as threat to that organization. UBL worries about the following; 1. A tremendous number of foreign banks are opening their branches in the country. 2. 3. Also the increasing operations of private banks pose threat to UBL. Highly specialized and attractive services offered by foreign banks to their customers. 4. Lack of consistency in Governments policies regarding business and economic sector. 5. 6. Growing global technological advancement. Strict regulations of the Government over credit facilities to the customers as well as to meet the prudential regulations. 7. Loss of confidence of overseas customers due to freezing of accounts.
The SWOT analysis is a mirror to the bank of its present condition. From this analysis, we can conclude that the bank has done some professional changes in its banking system. But still there are chances for improvement. The management can develop elaborate strategic plans for capitalizing the available opportunities. One area where the bank has done some work is the improvement in customer services. But to get the desired results, the bank
68
Chapter-9
SWOT Analysis
should develop long-term objectives and prepare appropriate courses in order to achieve them. The bank should maintain principle of professional management and adhere to the sound and sophisticated banking rules and regulations to build confidence of the people in the institution.
69
Chapter-9
SWOT Analysis
CONCLUSION
After the establishment of UBL in he year 1959, the bank was successful in achieving some of its objectives. In the very first year, the bank earned a handsome profit. After the exhaustive era of nationalization, the banks are now again transforming to private ownership. The decade of 1960 was dominated by an exceptional increase in economic activities. This resulted in brining various changes in the management and structure of the commercial banks. In the area of management, more professionals were brought in and the same was done with the structure. UBL was not an exception to these changes. In the last decade of the century, the bank has witnessed very bad banking business. To rebuild the bank, new professional people were included, under the leadership of MR. Zahoor Soomro. Under him, the bank introduced incentive schemes and products such as CARAMAD, ZAR AMAD and UNI MAHANA etc. The bank also reshaped the product of Rupee Travelers Check (RTC) with a new name of HAMRA. All these schemas were very successful in stopping the capital flight from the country, which was the result of banning foreign currency accounts in MAY, 1998 after the nuclear blasts. Now the bank is focusing on improving the standard of its service facilities, specially improving its corporate banking and more customer satisfactory culture. All these new and potential improvements are signs of bright future for the UBL.
70
Chapter 10 Sector
Critical Analysis of Banking
10
CRITICAL ANALYSIS OF BANKING SECTOR
Exposure to the world through rapid development in the information technologies has brought about considerable change in our perception about a number of fields in general and banking in particular. The very access to information about the development of banking and the level of sophistication that has been accomplished in this particular sector in the developed economies has changed our view that we held previously about banking. Our work with United Bank for two months gave us an opportunity not only to understand banking but also made the problems faced by our poorly performing banking sector quite conspicuous. The main problem that I observed has to do with the general commercial banking in our country and its functioning in economic, socio-political environment. It is poorly regulated sector and far from being developed at the international standards due to the lack of autonomy it has. A great proportion of their loans is non-performing and is stuck up either in the public sector enterprises or with a group of politically influential industrialist class. This class has been termed by Diaz Alejald Ro, a writer from Latin America, as gropes.
71
LIST OF PERSONS INTERVIEWED

1. Mr.Sarfaraz Khan, Manager, UBL Takht Bhai Branch, July20, 2002 2. Mr.Sajid Anwar, Second Officer, UBL Takht Bhai Branch, July22, 2002 3. Mr. Abdul Sattar, In-charge Foreign Exchange Deptt, UBL Mardan Bank Road Branch, July26, 2002 4. Mr. M. Farooq, In-charge Remittances Deptt, UBL Mardan Bank Road Branch, July29, 2002 5. Mr. M. Tahir, In-charge Accounts Deptt, UBL Mardan Bank Road Branch, August 8,2002 6. Mr. Jan Muhammad, In-charge Deposits Deptt, UBL Mardan Bank Road Branch, August 10,2002 7. Mr. Wisal Muhammad, In-charge Bills Deptt, UBL Mardan Bank Road Branch, August 18,2002 8. Mr. Shahid, Chief Cashier,Cash Deptt, UBL Takht Bhai Branch, August 20, 2002
72
BIBLIOGRAPHY
1. 2. 3. March 05,2002. 4. Zahid Hussain. 5. A Case Study of UBL Main Branch Bannu by Muhammad Raza Khan. 6. Iffland, Charles & Langueton, Pierre. (1996) International Banking, Irwin Book Co., New York. 7. Khan Rana, Safdar Hussain & Khan Rana, Ahmad Shabir. (1991) Banking Currency And Finance, Ilmi Kutab Khana, Lahore. 8. Klein, John F. (1998) Money And The Economy, Mc Grath Hill, New York. 9. Meenai, S A. (1992) Money And Banking In Pakistan, Habib Publisher, Multan. 10. Saeed, M Nasir. (1994) Economics Of Pakistan, Ilmi Kutab Khana, Lahore. 11. Siddiqi, Asrar H. (1998) Practice And Law Of Banking In Pakistan,6th Ed, Royal Book Co,Karachi A Case Study of UBL Main Branch Mardan by Annual Report UBL 1999. Annual Report UBL 2000. A Review From Daily The News on Monday
73

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AN INTERNSHIP REPORT ON UNITED BNAK LIMITED TAKHT BHAI BRANCH

INSTITUTE OF MANAGEMENT STUDIES UNIVERSITY OF PESHAWAR

AN INTERNSHIP REPORT ON UNITED BNAK LIMITED TAKHT BHAI BRANCH

INSTITUTE OF MANAGEMENT STUDIES UOP

AN INTERNSHIP REPORT ON UNITED BNAK LIMITED TAKHT BHAI BRANCH

Mr. Abdul Wahid Coordinator MBA

COORDINATOR R& DD:

Mr. Zia ud Din

1.2 SCOPE OF THE STUDY

1.3 IMPORTANCE OF STUDY

1.4 RESEARCH METHODOLOGY

Director and Joint Directors. 2. Personal observations.

3.1 EARLY GROWTH

3.2 MODERN BANKING

3.3 EVOLUTION OF BANKING IN PAKSITAN

Offices of scheduled 81 banks

History and Growth of UBL

HISTORY AND GROWTH OF UBL

History and Growth of UBL

History and Growth of UBL

History and Growth of UBL

4.1 NUMBER OF BRANCHES

History and Growth of UBL

History and Growth of UBL

4.2 SERVICES OFFERED BY UNITED BANK LIMITED

History and Growth of UBL

History and Growth of UBL

History and Growth of UBL

Organizational Structure of UBL

Organizational Structure of UBL

Organizational Structure of UBL

UBL ORGANIZATION CHART

Vice President (VP)

Additional /Assistant Vice President (AVP)

Clerk, Cashier etc

Non Clerical staff

a) Private Limited Company:

- The Certificate of Incorporation - Resolution of Board of Directors - List of Directors

b) Public Limited Company:

6.2 REMITTANCES DEPARTMENT

6.3 DEPOSITS DEPARTMENT

6.4 ADVANCES DEPARTMENT

UBL advances loans in the following manners:

FIM OR FINANCE AGAINST IMPORTED MERCHANDISE

FIANCE FOR EXPORT MERCHANDISE

PROCEDURE OF APPLYING FOR LOANS

6.5 FOREIGN EXCHANGE DEPARTMENT

6.6 CLEARANCE HOUSE

Financial Products of UBL

Financial Products of UBL

Financial Products of UBL

7.2 UNI SONA

Financial Products of UBL

%age 1998 11,1222,801 2000 5.23 1999 7.55 1998 7.94

10,995,922 33,101,778 74,156,421 6,380,572

12,010,493 44,953,910 61,714,410 5,411,265

10,453,410 47,955,359 48,468,324

7.08 21.32 47.78 4.11

7.77 29.10 39.95 3.50

7.47 34.25 34.02

%age 1998 117,718,301 2000 82.91 1999 82.31 1998 84.09

4,859,758 1,186,961 10,387,683 1,294,883

7,329,160 1,508,553 9,427,031 1,002,297