Internship Report

On

Habib Bank Limited

PRESENTED TO
SIR SULEMAN

PRESENTED BY
SANYA KHAN

Dated
17 FEBURARY,2009

Department of Management Sciences

AL-KHAIR University

1
 DEDICATION

I dedicate my effort to my beloved parents who able me to aware me that life is the name

of hard work and encouraged me to assemble self efficacy in myself to successfully cope

with hurdles in my way.

I am very thankful to my father who supports me whenever I take initiatives in my life

and encourage me for hard work also thankful to my mother who pray for me and that’s

why I am successful to complete my studies.

I pray to ALLAH to give all happiness and long life to my parents. [Ameen]

2
 ACKNOWLEDGEMENT

All thanks for Almighty ALLAH whose blessings have helped me to accomplish my

task. I owe my debts to my parents whose love and encouragement have helped me to

achieve my targets. I express my gratitude to AL-KHAIR UNIVERSITY, who

assigned me for such a splendid organization. I am also thankful to my respectable

Instructor Sir Sulaman whose guidance has enabled me to complete my task

and report successfully.

Special thanks to HABIB BANK MAIN BRANCH for providing me an opportunity to

acquire Professional Education. Thanks to Chief Manager Mr. Zammurad

Hussain, Manager Operation Mr. Ansar Mahmood, and whole staff at HBL

Main Branch for cooperation during my training.

I am extremely thankful to Manager Trade Mr. Nayyar Abbas for his cooperation

and assistance during my training at HBL.

Salute to My Parents who prayed all along, Professors who taught me a lot and

friends who inspired me all the way.

3
 PREFACE

Practical training is a privilege, which is provided to the students of MBA with an

objective to help them in pursuance of sound career in future.

Practical training program for students is the important and beneficial part of the course.

While this compulsory facility, students not only enjoy the opportunity to test the

accuracy of theoretical knowledge but also learn professional manners as well as how

they can put their best to earn a place in the ever growing world.

I have completed my training in Habib Bank Ltd. HBL is one of the growing bank in

private sector in Pakistan. I hope this training process in HBL will be very useful and

helpful for my future life.

Sanya Khan

4
 EXECUTIVE SUMMARY

This report comprises of my exposure & learning during my internship at Habib Bank

Ltd. It contains a detailed introduction to the current banking situation. It gives an insight

to the bank profile, its historical background & highlights the present standing of the

Habib Bank. The management & organizational structure of HBL (with special reference

to Main Branch Mirpur A.K.) and global network is discussed, analyzing each aspect of

the organizational structure. Each Department of HBL Main branch is assessed

highlighting their individual tasks. As Human Resource is my Field of Specialization it is

important to know the management system and there is a detailed analysis of managerial

activities in “HABIB BANK Ltd”.

The vast variety of the products & services are explained giving the distinguishing

feature of each service as well as the procedural requirement. Before giving a detailed

account of the products & services, it sheds light on the Management and Organizational

Structure of Habib Bank Limited. ”. The Recruitment & Selection criteria, Training &

Development, Performance Appraisal system and Reward System in Habib Bank Ltd .

5
Conclusions have been drawn stating the Human Resource standing of HBL. Finally, a

number of recommendations, made to further improve the standard of the HBL Main

Branch Mirpur A.K.

TABLE OF CONTENTS

CHAPTER NO. 1
INTRODUCTION 10
1.1 WHAT IS BANK?
11
1.2 BANKING IN PAKISTAN 11
1.3 NEW CHALANGES OF CONTEMPORARY AGE 13
1.4 INTRODUCTION OF HBL’s BUSINESS SECTOR 14
1.4.1 Business Segments 15

1.4.2 Geographical Segments 16

1.4.3 BRANCHES 17

1.4.4 Management and Corporate Data 18

CHAPTER NO. 2
OVERVIEW 20
2.1 OVERVIEW OF HBL
21
2.2 HR POLICIES OF HBL
22
2.3 BRIEF HISTORY
24
2.4 NATURE OF ORGANIZATION
26
2.5 BUSINESS VOLUME
28
2.5.1 HABIB CURRENCY EXCHANGE Pvt. Ltd 30

2.5.2 MAJOR BUSINESS SEGMENTS 31

6
 2.6 PRODUCT LINES
32
2.7 COMPETITORS
36

CHAPTER NO. 3
ORGANIZATIONAL STRUCTURE 38
3.1 Organizational Hierarchy Chart 39
3.2 Number of Employees 39
3.3 Main Offices 40
3.4 Comments on Organizational Structure 40

CHAPTER NO. 4
PLAN OF INTERNSHIP PROGRAM
46
4.1 A brief introduction of the branch where you did your internship 47
4.2 Starting and ending dates of internship 48
4.3 The departments in which I got training and the duration of training 48

CHAPTER NO. 5
TRAINING PROGRAM 50
5.1 Introduction of all the departments 51
5.2 Detailed description of the department I worked in 55

CHAPTER NO. 6
STRUCTURE OF HRM DEPARTMENT
68
6.1 DEPARTMENT HIERARCHY
69

CHAPTER NO. 7
HRM PROCESS IN HBL 70
7.1 HUMAN RESOURCE PLANNING AND FORECASTING
71
7.1.1 HRP PROCESS
71
7.1.2 FORECASTING HR REQUIREMENTS
72
7.1.3 METHODS TO FORECAST HR NEEDS
72
7.2 EMPLOYEES RECRUITMENT & SELECTION
73

7
 7.2.1 SOURCES OF CANDIDATES
75
7.2.1.1 INTERNAL SOURCES
75
7.2.1.2 EXTERNAL SOURCES
76
7.2.2 EMPLOYMENT SELECTION PROCESS
76
7.3 TRAINING & DEVELOPMENT
77
7.3.1 TRAINING NEED ASSESSMENT
77
7.3.2 EMPLOYEE DEVELOPMENT
79
7.4 PERFORMANCE MANAGEMENT
80
7.4.1 SETTING PERFORMANCE STANDARDS & EXPECTATIONS
81
7.4.2 HOW PERFORMANCE REPORTS ARE WRITTEN
84
7.5 EMPLOYEE COMPENSATION & BENEFITS
87
7.5.1 TYPE OF COMPENSATION & BENEFITS
87
7.6 ORGANIZATIONAL CAREER MANAGEMENT
88
7.6.1 EMPLOYEE JOB CHANGES
88
7.6.2 JOB CHANGES WITH HBL
88
7.6.2.1 PROMOTION
90
7.6.2.2 TRANSFER
92
7.6.2.3 DEMOTION
93
7.6.3 SEPARATIONS
95
7.6.3.1 LAYOFF
95
7.6.3.2 TERMINATION
95
7.6.3.3 RESIGNATION
96

8
 7.6.3.4 RETIREMENT
96
7.7 LABOR MANAGEMENT RELATIONS
97
CHAPTER NO. 8
CRITICAL ANALYSIS 101
CHAPTER NO. 9
SWOT ANALYSIS 109
CHAPTER NO. 10
CONCLUSION & RECOMMENDATIONS FOR IMPROVEMENT 112
10.1 Conclusions 113
10.2 Recommendations 116
CHAPTER NO. 11
REFERENCES & SOURCES USED 117
CHAPTER NO. 12
ANNEXES 119

9
“IN THE NAME OF ALLAH MOST MERCIFUL MOST

GRACIOUS AND CREATOR OF ALL THE WORLDS”

“IT’S CURRENT IT’S CURRENCY”

10
 CHAPTER 1
Introduction

“The World is still full of Willing People, Some Willing to Lead

and Rest Willing to Let Them”

11
1.1 What is Bank?

A bank is an institution for the custody, loan, or exchange of money for sanctioning

credit, for transferring of funds by domestic and foreign bills of exchange. It is a pipeline

through which currency moves in to and out of circulation. As it is clear from the

definition of banking, the main activity or function of banking is borrowing and lending

of money with a margin of gain. However, as far as the present day banking is concerned,

there are a number of different, set up under specific different Objectives, performing

various functions.

DEFINITION: According to Banking Companies Ordinance 1962, Section 5 (6)

“Banking means acceptance for the purpose of lending or investment of deposit money

from the public, repayable on demand or otherwise.”

1.2 BANKING IN PAKISTAN

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In Pakistan, there are 182 financial institutions in total. The paid up capital of all these

institutions is almost Rs. 94 Billion or US$ 1.7 Billion which is equivalent to 2.8% of

GDP. Total credit portfolio of the country is Rs. 750 Billion. During the period ended on

30 June 2003 most of the economic indicators remained very positive and the country

managed not only to meet but exceed all its targets. Overall GDP increased by more than

5%. Inflation remained 3.3% and the fiscal deficit decreased to 4.6% of the GDP.

The foreign exchange reserves exceed US$ 10.5 billion and the remittances from

Overseas Pakistanis reached to a record figure of US$ 4.0 billion. Pakistan rupee has also

stabilized against the dollar and the current account has a surplus which exceeded US$

3.0 billion during the year. Foreign trade showed appreciable increase with exports

exceeding the 10.0 billion US dollar mark.

In the developed societies, the banks don’t have to make many efforts in mobilizing

savings, as it has become a second habit with the people. The commercial banker

financing the short and long term capital needs of the business. The loan and discounters

of commercial banks include real state mortgages and long term loans, which extend to as

long a period as ten years. These banks also act as insurance agents and underwrites,

provide brokerage services and implement domestic as well as foreign economic policies

of the Government. Commercial banks in developing countries have to make vigorous

efforts of resource mobilization at all levels. However, with the passage of time the

commercial banking operation is undergoing remarkable qualitative change. In Pakistan

for instance, banking facilities are being extended to the unbaked places. Planned efforts

are made to enhance the supply of bank advance to the new priority sectors in

consonance with the present day socio-economic needs.

13
A special scheme to induct commercial banks in the field of agricultural credit was

introduced in December 1972. The scheme provides for short and medium term loans to

farmers under such a much simplified procedure. The State Bank’s measures aimed at

increasing the flow of credit to the small man in the business and industry as well as to

housing and non-traditional export have also yielded positive results. The “Credit

Guarantee Scheme” is covering the large risk to commercial banks in the sphere of

agricultural finance and small loans to a reasonable extent. Mandatory targets for small

loan credit to agricultural sector and for housing have been prescribed and are being

enforced. Corporate banking is also being reorganized and reactivated on more viable

lines.

1.3 NEW CHALANGES OF CONTEMPORARY AGE

Banks play a vital role in the economic development of the country. They accumulate the

idle saving of the people and make them available for investment. They also create new

demand deposits in the process of granting loans and purchasing investments securities.

They facilitate trade both inside and outside the country by accepting and discounting of

bills of exchange. Banks also increase the mobility of capital. They provide a variety of

facilities for remitting a large amount of money from one place to another by the transfer

of small slip of paper.

In a country like Pakistan, which is still in the initial stages of economic development, a

well-organized banking system is the need of the day. There is shortage of capital in

Pakistan. The banks have to play an important role in promoting capital formation, in

controlling speculation, in maintaining a balance between requirements and availability

and in directing physical resources into desired channels. In advanced countries of world

14
like America, Japan, Germany, the rate of capital formation ranges from 12% to 25% of

their Gross National Product. Where as in Pakistan the rate of saving is from 5% to 8%

only. In order to accelerate the rate of economic development, the government has been

acquiring foreign capital. The banks by launching a vigorous campaign both in the

villages and cities can mobilize an idle savings and can increase the rate of investment.

The country thus becomes independent of foreign capital, which in fact has let us down

on almost all the crucial happenings in the country.

This deficiency of capital accumulation is due to so many reasons like, low per capital

income, disparity of wealth, un-organized banking system, ineffective fiscal measure etc.

1.4 Introduction of the HBL’s business sector

HBL established operations in Pakistan in 1947 and moved its head

office to Karachi. Its first international branch was established in

Colombo, Sri Lanka in 1951 and Habib Bank Plaza was built in 1972

to memorialize the bank’s 25th Anniversary.

HBL has a domestic market share of over 40%, and was nationalized

in 1974 and it continued to dominate the commercial banking sector

with a major market share in inward foreign remittances (55%) and

loans to small industries, traders and farmers. International

operations were expanded to include the USA, Singapore, Oman,

Belgium, Seychelles and Maldives and the Netherlands.

On June 13, 2002 Pakistan's Privatization Commission announced that the Government

of Pakistan had formally granted the Agha Khan Fund for Economic Development

(AKFED) rights to 51% of the shareholding in HBL, against an investment of PKR

15
22.409 billion (USD 389 million). On February 26, 2004, management control was

handed over to AKFED. The Board of Directors was reconstituted to have four AKFED

nominees, including the Chairman and the President/CEO and three Government of

Pakistan nominees.

The bank has been assigned long term entity rating of “AA+” and short term entity rating

“A1+” with a stable outlook by JCR-VIS credit rating Company. The entity rating

assigned to private sector banks in Pakistan.

This bank is engaged in the business which provides products or services (business

segments, discussed below), or it is providing product or services within a particular

economic environment (geographical segment, discussed below), which is subject to risks

and rewards that are different from those of other segments. The bank’s primary format of

reporting is based on business segments. Habib bank envisages growth in their operations

in the Middle East and the Gulf, Africa, South Asia, Singapore and the UK market

through Habib Allied International Bank Plc.

1.4.1 Business Segments

- Retail Banking:

It consists of retail lending, deposits and banking services to private individuals and

small businesses.

- Corporate/ Commercial Banking:

Consists of customers and investment banking, include advices and placements to

corporate mergers and acquisitions, underwriting, privatizations and securitization.

- Treasury:

16
 It involves the businesses of proprietary trading, fixed income, equity and foreign

exchanges.

- International Banking Group:

It represents Group’s operations in 23 countries and is considered a separate segment for

monitoring purposes.

- Head Office:

This includes balances held at Head Office level for regulatory requirements or other

operational reasons and includes some non-performing loans (not managed by other

business segments), statutory liquidity and shareholders equity related balances and their

associated cost/income.

1.4.2 Geographical Segments

The bank operates in five geographical regions, being:

Pakistan

Asia Pacific (including south Asia)

Europe

North America

Middle East

17
1.4.3 BRANCHES

The Bank operates 1,450 branches as below inside Pakistan and 40 branches outside the

country. Thus total number of branches of HBL is 1490.

Name of Region Number of Branches Name of Region Number of Branches

Faisalabad 79 Mardan 88
Gujrat 73 Mirpur 50
Hyderabad 61 Multan-Bahawalpur 113
Islamabad-Rawalpindi 109 Muzaffarabad 33
Jhelum 76 Peshawar-D.I Khan 108
Karachi-north 75 Quetta 36
Karachi-south 66 Sahiwal 86
Lahore 111 Sialkot-Gujranwala 102
Sargodha 87 Sukkur 66
Sub Total 1419
Business Centers

Commercial Banking 17
Corporate Banking 13
Islamic Banking 1
Overseas branch under Administrative Control of Corporate Banking 1

Group Corporate Sub Center KEPZ

Total 1450

18
1.4.4 Management and Corporate Data

An Executive Board composed of six Senior Executives of the Bank and the

Chairman and Chief Executive Officer supervise the affairs and business of the bank.

Board of Directors:

Sultan Ali Allana Chairman Director

Aga Khan Fund for Economic

Development, S.A.

R. Zakir Mahmood President and CEO Chairman

Habib Bank Financial Services(Pvt.)Ltd

Iain Donald Cheyne Director Vice Chairman

Habib Allied International Bank Plc.,UK

Sajid Zahid Director Chairman

The First MicroFinance Bank Ltd

Ahmed Jawad Director Secretary

Privatisation Commision,

Govt. of Pakistan

Mushtaq Malik Director Secretary

Board of Investment,

Govt. of Pakistan

Management Committee

19
R. Zakir Mahmood (President & CEO) Sima Kamil Nauman K. Dar

Abid Sattar Ayaz Ahmed Mudassir H. Khan

Zafar Aziz Osmani Jamil Iqbal Faizan Mitha

Salim Amlani Aslam Gadit Tulu Islam

Mirza Saleem Baig Kashif Shah Jamil A. Khan

Nausheen Ahmad Aly Mustansir Sohail Malik

Board Committees:

Audit Committee Auditors

Mr. Iain Donald Cheyne Chairman KPMG Taseer Hadi & Co.

Mr. Sajid Zahid Member Chartered Accountants

Mr. Ahmed Jawad Member

Risk Management Committee Registered Office

Mr. Sultan Ali Allana Chairman 4th Floor, Habib Bank Tower

Mr. R. Zakir Mahmood Member Jinnah Avenue

Mr. Mushtaq Malik Member Islamabad, Pakistan.

Human resource Committee Phone: 051-2872203

Mr. Sultan Ali Allana Chairman Fax: 051-2872205

Mr. R. Zakir Mahmood Member

Mr. Sajid Zahid Member

Group Chief Financial Officer Head Office

Mr. Ayaz Ahmed Habib Bank Plaza

Company Secretary I.I. Chundrigar Road

Ms. Nausheen Ahmad Karachi – 75650, Pakistan

20
Legal Advisor Phone: 021-2418000[50 lines]

Mahmood Yousaf Mandviwalla Bar-at-Law

CHAPTER 2
Overview

“WE judge ourselves by what we feel capable of doing, while

others judge us by what we have already done”

21
2.1 OVERVIEW OF HBL

HBL is the leading commercial bank in Pakistan. On 25 th of August

1941, Habib Bank inaugurated its operations with the bank’s first

branch in Mumbai. In 1947 Karachi saw its first commercial bank of

the newly formed Islamic Republic of Pakistan, when the bank shifted

its head office there.

It was HBL that introduced products such as Credit Cards, ATMs,

Travelers Cheques, etc., to the Pakistani market. Habib Bank caters to

the needs of millions with their quality products & services. Today,

Habib Bank is truly the bank of the people, providing its customers

convenience and satisfaction all over the world. Habib Bank Plaza, the tallest building in

Pakistan, is the proud symbol of HBL’s leadership in Pakistan’s corporate arena.

Developing bankers, managing banking business, expanding network of branches,

mobilizing public services, pooling resources for generating economic activity were

matters of immediate priority. Habib Bank so rapidly took banking services to every

corner of the country through its branch expansion program.

“Let Habib Bank Serve You Better” has always been the guiding principle in

inventing, innovating and introducing many new schemes and banking services most of

which being the first mobile banking, Drive – in banking, Mechanized Accounting

22
System, National & International Tele-printer service, Pak Rupee Travelers Cheques, Gift

Cheques, Non-Cheques Accounts, Computer Accounts, Computer Prize Bonds,

Children Savings, Auto Cashiers, Double Rupee Scheme, Executors and Trustees

services, Night safe scheme, Hajj Traveler Cheques and Hajj Insurance Scheme, Village

mobile banking, deposits growth certificates and deposit Growth Insurance certificates,

Special Term Deposits, credit card scheme, Auto Cash Tellers etc. command for and wide

appreciation. A major share of Home Remittances is routed through Habib Bank

Limited.

As a leading Commercial bank of Pakistan, Habib Bank plays a vital role in handling

international trade of Pakistan besides providing all help and assistance to importers.

Habib Bank provides special co-operation and guidance to exporters being fully aware of

the fact and dutifully conscious of the responsibility that the development of Pakistan

depends on the growth of exports.

HBL is divided in to14 divisions and 7 groups. The operation of the bank is divided into

14 divisions and groups. Each group is headed by professional and experienced bankers.

The group head (excluding the head of Audit), the company secretary and chief financial

officer, report directly to the President and CEO of the bank.

2.2 HR POLICES OF HBL

“HBL EVOLVE THROUGH NURTURING OF RELATIONSHIPS”
HBL values its employees’ loyalty and commitment to work. Considering them as

partners to the business, management is rigorously putting efforts for the long term

success of its employees so that Habibians can progress with greater efficiency, improve

their systems and help their people improve their effectiveness.

23
To further the objective of creating an environment that benefits their employees and

enhance their well being and satisfaction, the HR & OD Group has introduced and

revised several major polices . Some of these are detailed as follows:-

DRESS CODE AND GENERAL APPEARANCE OF THE STAFF

Employees are the ambassadors for any organization. The way they present themselves

reflect the corporate image and culture of that organization. To address this, HBL has

defined proper dress code to be followed by all the employees.

SEXUAL HARASSMENT POLICY

As a move toward creating a culture free of intimidation and abuse for collective

productivity and to promote a comfortable, congenial work environment, an initiative in

the shape of a policy on sexual harassment was launched. The HBL management aims to

ensure that in the workplace, no employee or supervisor harasses another individual on

the basis of sex and if it happens, bank will not tolerate this under any circumstances.

Engaging in sexual harassment, or failing to carry out the responsibilities established by

the Policy, has given rise to disciplinary action, up to and including separation from the

Bank.

EXIT INTERVIEW POLICY

Under this policy, in an atmosphere of openness and honesty on-going exit interviews are

conducted for all employees departing the bank voluntarily, except under any specific

separation scheme. The purpose of this policy is to enable HBL management to elicit

24
valuable information regarding the experience who are leaving the organization and then

to utilize that data in developing and entraining valued personnel.

HR HELPLINE
Open communication with employees is an integral part of cultural change at HBL, it

facilitates in creating a healthy environment of mutual trust and respect. To facilitate this

HR & OD launched the concept of HR Helpline. HBL’s top management expects their

employees to share their views, concerns, complaints or queries through e-mails on

hrhelpline@hblpk.com

humanresources@hblpk.com

Employees’ confidentiality is maintained strictly. All of these efforts of management in

creating value for its employees by developing a culture of mutual trust and long term

success in the hallmark of a mature organization. Therefore all Officers/ Executives are

encouraged to read all the circulars in detail for better understanding.

2.3 Brief history

1841- An 11 year old boy Habib Ismail started job in a family business company named

“KHOJA MITHA BHAI NATHO” dealing in utensils and scrap metal in Bombay. At the

age of 18 he was not only made partner in the business, but was also elected as President

of the “TAMBA KANTA MARKET” Bombay.

1921- Name of the business company changed to “HABIB & SONS” and now it was

100% owned by the HABIB family. Their line of work expanded from scrap metal to oil

25
seeds, cotton and mica. At some point of time they also used to engage in private banking

activities.

March 23, 1940- resolution of Pakistan was passed.

August 25, 1940-first Muslim financial institution of the sub-continent named Habib

Bank Limited was established by Mr. Muhammad Ali Habib.

August 30, 1940- first branch of the bank opened at Muhammad Ali Road, Bombay

where Quid-e-Azam opened his personal account.

August 07, 1947- head office was shifted from Bombay to Karachi in order to help

Muslims in transferring their assets and resolving the emerging financial issues of the

new nation.

August 14, 1947- Pakistan came into being with numerous financial problems which

were handled and amicably resolved by Habib Bank Limited.

July 01, 1948- State Bank of Pakistan was inaugurated by Quid-e-Azam

October-1947- First Pakistani notes of Rs 5 , 10, 100 were issued which gradually

replaced the existing Reserve Bank of India notes already in circulation.

1949- National Bank of Pakistan was established as agent of the SBP which replaced the

Imperial Bank of India.

1951- HBL established “Habib Overseas Ltd” and its first overseas branch opened in

Colombo (Sri Lanka). Subsequently it opened further branches in Africa, Europe, Far

East, South Asia, and Middle East.

26
2.4 Nature of the organization

Vision

Enabling people to advance with confidence and success

Mission

To make our customers prosper, our staff excel and create value for share holders.

Social Responsibility

The concept of social responsibility proposes that a private corporation has

responsibilities to society that extend beyond making a profit.

HBL believes in serving the nation and building the country strong. HBL is always at the

forefront to support noble causes and promote the social & cultural activities in the

country. The Public Relation Division of HBL sponsors various social, cultural and sports

events to generate healthy activities in the society. It also organizes religious programs to

uphold the religious tradition of the people. The Division represents the bank at important

forums to exchange views on national & international issues with various organizations

to boost the intellectual activities.

27
HBL CULTURE
From knowing it’s customers’ requirements to understand economic need and policies,

from utilization modern technology to making responsible social

contributions from supporting trade and business activities. Habib Bank is

continuously and consistently striving to address newer challenges with a

single motivation.

HBL is firmly grounded with a corporate philosophy that incorporates five solid values

which each individual associated with the bank abides by.

Values
Values are the fundamental principals that define the culture of Habibians and are brought

to life in their attitudes and behavior. The intrinsic values of Habib Bank Ltd are Corner

Stone of their Corporate Behavior are Commitment, integrity, fairness teamwork, loyalty

and looking forward. It is their values that make them unique and unmistakable.

1. excellence
This is the core of everything Habibians do. The markets in which they operate are

becoming increasingly competitive and their customers now have abundance of

choice. Only through being the best in terms of the services they offer, their products

and premises__ can they hope to be successful and grow.

2. integrity

28
 HBL is the leading bank of Pakistan, and their success depends upon trust. Their

success depends on trust. Their customers and society in general expect them to

possess and steadfastly adhere to high moral principals and professional standards.

3. customer focus
Habibians need to understand fully the needs of their customers and adapt their

products and services to meet these. They are striving always to put the satisfaction of

their customer first.

4. meritocracy
Habibians believe in giving opportunities to and advantages to their employee on the

basis of their ability. They believe in rewarding achievement and in providing first

class career opportunities for all.

5. progressiveness
Habibians believe in the advancement of society through the adoption of enlightened

working practices, innovative new products and processes and a spirit of enterprise.

2.5 Business volume

Under the GOP reforms, efforts were initiated in 2000 to prepare the bank for

privatization. Senior & experienced bankers were hired to reinvigorate and restructure the

bank. Bank was also recapitalized through the issuance of right shares amounting PKR 8

billion. Management also implemented a staff and branches rationalization plan. Total

number of staff was reduced from 32,770 to about 14,000. 51% shares of HBL were

29
 acquired by the Agha Khan Fund for Economic Development (AKFED) for a price of

PKR 63.68 per share and the management was transferred on faburary.28, 2004.

Shareholding structure:-
Name of Stake Holder Share
Aga Khan Fund for economic development (AKFED) 51.000%
State Bank of Pakistan 48.047%
NBP (Trustee Dept.), Privatization Commission, Govt. of Pakistan
00.953%
& SECP
Balance Sheet 2007---2006(Rs. In million) % age growth
1 Total Deposit 531,298---459,140 15.72%
2 Total Assets 691,992---594,062 16.48%
3 Advances 382,173---349,433 9.37%
4 Liquid Assets 170,901---126,207 35.41%
5 Shareholders Equity & 62,272---52,530 18.55%
Revaluation Surplus
6 Capital Adequacy Ratios 13.57%---12.88% 5.36%
7 Liquid Assets % of 32.06%---27.72% 15.67%
Deposits from Customer &
Bills Payables.
Profit & Loss
8 Total Net Income 41,350---38,971 6.10%
9 Total expenditure 18,382---17,204 6.85%
10 Provision for Non- 7,823--- 2,927 167.00%
performing Loans & others
11 Pre-tax Profit 15,142---18,840 - 19.61%
12 Profit after Taxation 10,084---12,700 -20.60%
13 Earnings Per Share 14.49---18.30 -20.82%
Others
14 Home Remittance 79,322---66,656 19.00%
15 Export / Imports 308,426---306,718 0.56%
16 Number of Branches 1,490---1,477 0.81%
17 Number of Staff 14,552---14,572 -0.14%
2.5.1 HABIB CURRENCY EXCHANGE Pvt. Ltd

“HCEL EXTENDING BUSINESS VOLUME”

30
Habib Currency Exchange (Pvt.) Ltd, a 100 % owned subsidiary of Habib Bank Ltd,

started its commercial operations on 29th Jan 05. Working against formidable private

ownership, HECL has succeeded in laying a firm foundation with definitive business

strategies. By now HECL has following four branches fully operational.

1. Cloth Market Branch, M.A. Jinnah Road, Karachi

2. Nursery Branch, Shah rah-e-Faisal, Karachi

3. Finlay House Branch, I.I. Chundrigar Road, Karachi

4. Melody Market Branch, Islamabad

The company is poised to enter in to its second phase of expansion in other major cities

& affluent business areas.

Habib Currency Exchange (Pvt.) Ltd is an extended arm, offering products and services

to HBL’s customer base, however major business inflows come through brisk marketing

targeted segments, via Education, Travel, Immigration, Family Maintenance etc…!

THE ROLE OF HABIB CURRENCY EXCHANGE (Pvt.) Ltd

There is common perception; Habib Currency Exchange (Pvt.) Ltd is direct competitor to

HBL, with respect to remittance business. The role of Exchange Company is starkly

distinct in terms of products & services.

Habib Currency Exchange works under Kerb (private) Market rate regime, while

remittances done through Habib Bank Ltd are governed by inter bank exchange rates.

Moreover most segments, which HCEL handles, do not come under domain of Bank

remittances. Transfer of funds for immigration purposes, transfer of heir-ship share,

repayments of loans and family maintenance expenses on private & business tours etc.,

31
are few amongst HCEL’s services that are not offered by the Banks. For all such

segments, HBL’s customers are Private Exchange Companies.

2.5.2 MAJOR BUSINESS SEGMENTS

A. Foreign Currency Exchange to individual as well as corporate clients

B. Foreign Telegraphic Transfers (TT); both inward and outward with quick

processing time and tracking system

C. Foreign Currency Demand Drafts (FDD)

D. Buying and Selling of Advantage Accounts

E. Highly competitive exchange rates

HECL has drawn elaborate segments for Remittances, which are being utilized while

extending services to HBL customers.

Within the confines of Central Bank’s Rules & Regulations, the company is striving hard

and technical expertise & above all customer’s satisfaction in line with the HECL Motto:

2.6 Product Lines

32
HBL's key areas of operations include product offerings and services in Retail Banking

and Consumer Banking. HBL has the largest Corporate Banking portfolio in the country

with an active Investment Banking arm. SME and Agriculture lending programs and

banking services are offered in both urban and rural centers.

Using their branch network as a key competitive advantage, their business concentration

has remained consistent for Retail, Consumer, and Corporate and SME clients.

HBL is expanding its presence in principal international markets including the UK, UAE,

South and Central Asia, Africa and the Far East.

1. Corporate Products & Services

2. Retail Product and Services

3. Commercial Products & Services

4. Overseas Products & Services

5. HBL liability products

6. Habib Bank Modaraba

Main Products & Services

33
Retail Product & Services

1) Habib Bank Flexi Loans

2) Habib Bank Auto Cash (ATMs)
3) Habib Bank Master Card
4) Muhafiz Rupee Traveler’s Cheques
5) Current Account
6) Saving Account
7) Profit & Loss Sharing
8) Lockers
9) Haj/Umra Services
10) Payment of Utility Bills
11) Payment Different Universities’ fees
E.g. VU, Allama Iqbal University, AJK
University, etc.

Corporate Product & Services

1) Corporate Finance
2) Cash Management
3) Other Finances
4) Trade
5) HBL Daily Progressive Account
(Launched on November 12, 2008)

Commercial Product & Services

1) Trade
2) Other Finances
HBL Liability Products

34
In order to cater the needs of multi-status customers, HBL has launched unparalleled

products in the year 2006-2007. These products are as follows:

1. Value Account

2. Super Value Account

3. Business Value Account

Overseas Product & Services

1. Trade Finance
2. Cash Management Services
3. Corresponding Banking
4. Lending
5. Home Remittances

PRODUCT FEATURES
Savings Accounts
HBL’s Savings Accounts cater to individual saving habits.

PLS – Savings Account

1. Profit paid bi-annually

2. Minimum average balance of Rs.10, 000

3. Less than Rs. 20,000 earns 0.10% profit

4. Greater than Rs. 20,000 earns 1% profit

HBL Value Account

1. 7% profit per annum*

2. Profit credited every 3 months

3. Deposit ranges from Rs. 10,000 to Rs. 100,000

4. Flexibility of withdrawals

35
HBL Super Value Account
1. 7.25% profit per annum*

2. Profit credited every 3 months

3. Deposit ranges from Rs. 100,000 to Rs. 500, 00

4. Flexibility of withdrawals

Remittance Munafa Plus Saving Account

1. Remittance Based (no credit allowed except remittance)

2. Daily Basis Product

3. Tiered

4. Monthly profit

5. Minimum average balance of Rs. 10,000

6. Less than Rs. 20,000 earns 0.10% profit Rs. 1 million and above earns 5% profit

PLS - Special Saving Bank Deposit Scheme

1) Daily Basis Product

2) Tiered

3) Monthly profit

4) Minimum balance of Rs. 20,000

5) Returns up to 8%

PLS - Daily Munafa plus Deposit Account

1) Daily Basis Product
2) Tiered
3) Monthly profit
4) Minimum balance of Rs. 50,000
5) Returns up to 8%

36
2.7 Competitors

1. National Bank

2. Standard Chartered

3. City Bank

4. Allied Bank Limited

5. Askari Bank

6. Bank Al-Falah

7. Muslim Commercial Bank(etc)

MARKET AND COMPETITION REVIEW

GDP growth rate of 7% was achieved over the fiscal year 2006-2007, which was 0.4%

higher than the previous year; the manufacturing and services sector were the main

contributors. Foreign direct investment (FDI) reached $5 billion in FY 07 and it is

37
encouraging to note that almost all of this FDI is non privatization related. Inward

remittances over the year were at a record high of $5.5 billion. However high dependence

on imports combined with an increase in global oil prices have caused the trade deficit to

widen; the current account deficit increased significantly. Liquidity in the market has

fuelled inflation.

In order to contain this phenomenon, the SBP has embarked upon a tight monetary policy,

causing interest rates to increase and as a consequence HBL is seeing in reduction in

credit demand; Gross loan to Deposit Ratio has declined from over 75% in 06 to below

66% in 07 in the sector. While the banks have had to increase interest rates in line with

the monetary policy, they have not been able to pass on the corresponding cost due to the

inelastic demand for corporate and consumer credit; spreads for the entire industry have

reduced as a consequence.

Going forward, HBL believes that the SBP will maintain a tight grip on the money supply

side and thus margins could shrink further; based on the current scenario, HBL believes

that the growth next year may reduce from the projected 7% to 6% or so. This may have a

corresponding impact on the credit growth and thus the bank margins are likely to remain

under pressure. With the recent mergers of banks in Pakistan and the expected entry of

renowned Islamic and International banks eyeing the Pakistan financial market, HBL

believes that the banks such as HBL will be able to compete aggressively on the back of a

country wide branch network, profitability and bottom line will remain sensitive to any

margin compression.

38
 CHAPTER 3
Organizational structure

Large Companies Tend To Flatten Out Personalities

39
3.1 HBL MAIN BRANCH HIERARCHY CHART

Chief Manager
Mr. Zammurad Hussain

Manager Credit
Manager Operations Mr. Hammad
Mr. Ansar Mahmood

Recovery Officer Assistant

Manager Teller Mr. Muzammal Manager
Mr. Zamin Abbas Mr. Sarfraz

Cash Officers
Mr. Ishtiaq, Manager Incharge CRO Assistant Clearing
Mr. Nayyar, Trade Remittance Mr. Akhter Manager Officer
Ms. Suniya Ms. Rahat Mr. Ali Mahmood Ms. Nazia Mr. Adeel
Abbas

3.2 NUMBER OF EMPLOYEES

13 employees are in branch under Chief Manager and 3 employees are security guards,

one is peon and one is sweeper.

40
3.3 MAIN OFFICES

MAIN OFFICES

KARACHI (HEAD
OFFICE)

LAHORE

FAISALABAD

RAWALPINDI

3.4 COMMENTS ON ORGANIZATIONAL STRUCTURE

For the organization to perform efficiently, it is of primary importance to have a solid

organizational structure. Organizational structure refers to a formal system of interaction

and coordination that links the duties of individuals and groups to effectively achieve

organization’s goals and objectives. An essential purpose of the organization structure is

to channel information to its appropriate individuals so it facilitates the work process. It

also defines and governs the relationships among various departments insuring an

effective organizational performance. The term organizational structure is very broad

based. However, when we refer to it, we must be able to emphasis on the:

41
 Organization chart

Kind of work specialization

Hierarchy (Chain of command)

Delegation of authority

Decentralization of authority

Span of Control

Kind of departmentalization that exists in an organization

HBL has an effective management structure. The structure of the bank is devised for the

efficient provision of the services being offered. Infact, it is the sound management

system, which has lead to supreme customer confidence in the services being provided.

The clear cut and reliable management system has led to its international popularity.

Let us briefly look at the fundamentals of HBL’s management, with special reference to

the Main Branch where I interned.

WORK SPECIALIZATION

“The term work specialization points to the degree to which the organizations work is

divided into smaller parts, which constitutes separate jobs.” Work specialization is also

called as the division of work. It leads to separated and differentiated tasks so that

managers and employees can concentrate and handle specific areas.

42
HBL has a well-defined work specialization at all levels of the management. Each

employee at the time of hiring is unambiguously told of his responsibilities and duties.

The boundaries of the job are clearly defined so that members understand their job

content.

HIEARACHY (Chain of command)

“The hierarchy referred to as the chain of command which is the unbroken line of

authority. It extends from the top to the bottom of the organization.” The key role of the

chain of command is to define the reporting relationship. It is a tool for the organization

members to identify their direct superiors as well as to identify their own position within

the hierarchy.

As HBL grows increasingly larger and complex, here they can never clearly define

whether it has a vertical or a horizontal structure so it is a blend of both. Based on the

underlining principle of chain of command (called the scalar principal) the line of

authority extends through successive layers of managers and employees. Let us view this

in Main branch of Mirpur (where I interned). There are basically, 2 departments:

 Operation

 Credit

The Operation Manager supervises Manager Teller who heads all underlying departments

while Manager Credit supervises Assistant Manager who heads other department. The

Assistant manager is provided with sufficient staff members according to departmental

needs, therefore this structure covers the three basic levels of management that is the top

level, middle level and the first line management.

The above structure holds good for a single branch.

43
DELEGATION OF AUTHORITY

In HBL, I have observed is that there is complete job specialization and specification in

this branch of HBL. This has resulted in minimum delegation of authority. However,

under special circumstances authority delegates to the individual who is next in command

according to the hierarchy. There is not over centralization along with its negative effects.

CENTRALIZATION & DECENTRALIZATION

Centralization is the extent to which authority is concentrated at the top-level

management. Whereas, decentralization is the extent to which authority delegates to the

lower level management. The degree to which this organization is centralized or

decentralized depends on a variety of factors such as:

 the size of the organization

 the environmental dynamism

 interdependency

 The nature of business in which the organization is engaged, etc

To determine whether this organization is centralized or decentralized I have observed its

nature. Keeping in view, the above factors I may say that in HBL there is both

centralization as well as decentralization of authority.

Certain key decisions & policies, which play a pivotal role, demand a centralized

organizational structure. Strategic polices about the bank are made only by those who are

in the top-level management. Such polices are communicated from the head office to the

respective branches.

44
However, being in the banking sector indicates that most of its activities involve direct

contact with the clients. Therefore, in such an organizational setup there is sufficient

amount to decentralization so that information, facilities & services are readily rendered

to the people. HBL has highly developed information and the communication network

and is able to give managers at all levels the information they need to take decisions, so

that the top management uses these tools to support both centralization as well as

decentralization.

SPAN OF CONTROL

In HBL, a structure is visible where there is a relative narrow span of management &

many hierarchical levels. “Span of control refers to the number of people who report

directly to one manager”. It is the key determinant of how closely managers can interact

with their respective subordinates. Considering the Main Branch, it has two main

departments, which are headed by two managers who subordinate 11 officers. This

ensures great communication among the managers & their subordinates, which helps in

more swift work processing. I believe that the span of control is largely concerned with

the hierarchical structure of the organization

DEPARTMENTALIZATION

“The units into which HBL is divided as to group the jobs of those engaged in related

tasks, are called departments. This process is what we refer to as departmentalization.”

There are four basic types of departmentalization:

45
Functional

Product

Geographical

Customer

The kind of departmentalization followed by HBL solely depends on its nature of

business. In HBL the kind of departmentalization is chosen that best supports the efforts

of HBL toward reaching its goals.

All the topics that have been covered up till now indicate a vertical organizational

structure. The horizontal structure is clearly indicated through the process of

departmentalization in the organizational framework of this bank. Being in the banking

sector HBL follows geographical as well as customer departmentalization.

Geographical departmentalization refers to the grouping of jobs defined by locations. In

HBL, there is distinct division based on location. The division is based on region all

across the country. However, the prime aim of the bank is the provision of high quality

service to its clients. This is ensured through customer departmentalization, meaning the

grouping of jobs to meet the unique needs of customers.

46
 CHAPTER 4
Plan of Internship Program

“Plan Your Work

Then Work Your Plan”

47
4.1 A brief introduction of the branch where I did internship

Main objective of my internship was to study deeply about the role of Human Resource

Department in the organization that how it works in different situations. Secondly my

purpose was to get knowledge about their management and operation processes. I have

come to know after doing this internship is that understanding and learning the human

philosophy and psychology is much more difficult then marketing and finance or any

other area or field of specialization.

I had to understand and learn many things about the management style of HBL because

management plays a key role in any organization and without it the survival of any

organization is not possible and for becoming a future manager it was essential for me to

work with in the departments which are more involved in human relations and

management of human resource.

The purpose of my study was to learn how managers take quick decisions in a time of

crises and what system is implemented in the bank either it is centralized structure or

decentralized way of work. I wanted to know that how management controls, plan, and

coordinate with their subordinates and how they lead. Another purpose was to learn the

fact about the implementation of the basic characteristics of management in practical life.

It was part of my internship to know the difference between the studies of MBA and its

practical implementation in the world of business.

48
The most important thing which I wanted to learn was that how they recruit employees

from the pool of candidates. How do they select the suitable candidates and invest on

them by giving them proper training. How they provide them opportunities to develop

their career. How they measure their performance and how they do performance appraisal

of their employees. How they recognize them and give rewards for their performance.

Finally, I wanted to explore their code of ethics and its implication according to their

cultural values in the organization.

LOCATION OF HBL Main BRANCH:-

This branch is located in the Main Bazar Purani Hattiyan Mirpur AK. I worked here for 8

weeks as an internee.

4.2 Starting and ending dates of your internship

I did internship in HBL Main Branch from 13-11-2008 to 13-01-2009.

4.3 Departments in which I got training and duration of my training

I got training in the departments and Duration of Training was:

Departments Duration

Accounting Opening 13th November – 19th November

Remittance 20th November – 30th November

Foreign Currency 1st December – 12th December

Clearing 13th December – 20th December

Credit 21st December – 3rd January

Cash 4th January – 13th January

49
Time span was not equally distributed because some seats needed more attention then

others. The MISYS software is necessary to be learnt by every employee because no

work could be done without the help of MISYS. First of all I learnt all the necessary

things about this software and then its application according to each seat. As my area of

specialization is HRM and mainly my observation was related to the behaviors and

attitudes of employees with their co-workers, outsiders, their superiors and their juniors

and new comers. I deeply analyzed the issues arose within the branch and how they are

solved at the managerial level. The duration of my internship was exactly eight weeks in

which I tried my level best to gain more and more out of each and every opportunity

provided.

50
 CHAPTER 5

Training Program

“Knowledge brings The Responsibility of Choice”

51
5.1 Introduction of all the Departments

CHIEF MANAGER

 Development of Branch
 Sales
 Checking of Cash Book
 Supervision and Cancellation of Debit/Credit Vouchers of Rs.100, 000/- and
Above Amount
 Overall Internal Working Control
 Overall checking of Working
 Signatures on all Expenditure Vouchers
 Supervision and Cancellation of Dormant & Inoperative Vouchers
 Supervision of All Type of Finance & Return

CREDIT DEPARTMENT
“Credit means any arrangement whereby bank (Issuing bank) acting at the request of and
on the instruction of a customer (applicant) or on its own behalf.”
 It is to make a payment to or to the order of a third party or is to accept and pay bills
of exchange (drafts) drawn by beneficiary.
 Authorizes another bank to effect such payment or to accept and pay bills of
exchange (draft) or authorizes another bank to negotiate, against stipulated
documents.
In credit operations all parties concerned deal with the documents and not with goods,
services, and / or other performances.
 Credit Facilities
 Maintaining of Sundry Creditors Record
 Maintaining of Sundry Debtors Record
 Collateral
Enter a brief but complete and precise description of the collateral, listing the
Specific assets securing the credit facility (and/or third party pledges) in case of
default by, or bankruptcy of the borrower. The nature of these rights/claims (e.g.,
mortgage, pledge, lien, fixed or floating charge, etc.) and the assets secured

52
 (e.g., property, plant & machinery, shares, cash, etc.) should be clearly indicated,
as well as the actual value of the security (and the basis of valuation).
 Management Information
1) Prepare various portfolio composition reports
2) Prepare various exception reports, etc., for submission to RGMs/ RMs
Line Management and senior management
3) Prepare various reports for internal / external auditors, Fincon etc.

 Recovery Process
When a classification occurs, Branch manager should report the classification to
the senior/risk management on prescribed format. It should specify clearly
defined strategies, action plan and triggers with target dates to deal with the
situation.
 All type of Finances & Return under supervision of Chief Manager
 Second Signatures of adjacent seat

OPERATIONS DEPARTMENT

 Checking of Cash
 Internal working control of Operation Department on daily basis
 Supervising Internees
 Supervision of pending entries
 Checking of Balancing
 ATM Cash checking and balancing
 Back office job in absence of Data Administrator

REMITTANCE DEPARTMENT
“Transfer of Funds between two branches of the same bank or branches of two different
banks is called Remittance.”
Functions:
 Issuance of Pay Orders(PO)
“If a customer wants to pay to client or for fee or any other purpose with in the
city then pay order is made for this.” A pay-order is the document, which instructs
bank to pay a certain sum to a third party.
 Issuance of Demand Drafts(DD)
“Demand Draft is the instrument which is made when the sum of amount is pay in

53
 the other cities.”
 Issuance of LFTs
Local Fund Transfer is online fund transfer at a distance up till 25km otherwise it
falls in intercity transfer.

1. Cancellation of PO and DD
 Cheque Transfer(Intercity)
Transfer at a distance of more than 25km falls in intercity.
 IBP
It’s Army account where their salary is debited.
 Online Payment
 Outward Bill Collection(OBC) Realization and Lodgement
 Home Remittance(Payment of CHMT, HMT)
Pension deposits from company account to its retired employee account. HMT is
for pension. CHMT is for foreign funding.

MANAGER TELLER
 Posting Supervision & Cancellation of Cheques up to Rs. 20,000
 Release of receipt payment vouchers
 1st Supervision of all debit & credit vouchers
 Zakat handling
 Junior Supervisor of CRO, Remittance, Clearing and FC Departments
 Cash Department in charge
 Maintaining Cash Limits
 Stationary Record Keeping

Account Opening Department (CRO)

 Account opening (Current, Saving, etc)
 Issuances PKR Cheque books

54
 Cheque book is issued to the account holder on his/her request and charges are
deducted by system which vary according to leaves of issued cheque books.
Cheque books in HBL are of 4 types based upon number of leaves:
1. 10 leaves
2. 25 leaves
3. 50 leaves
4. 100 leaves
 ATM related job including marketing
 Cheque/Cash/Dividend Warrant Deposits
 Withdrawals
 Lockers Operating
Locker facility is provided to account holders of HBL, where customers keep
their expensive goods like gold, etc. HBL takes the responsibility of security of
their goods in lockers.
 Issuance of Statement of accounts
 Hajj
 Zakat form filling
CLEARING DEPARTMENT
The basic function of this department is to provide services to customers in collection of
their cheques of other banks, whether they are in the city or outside of city. “Transfer of
funds from one branch of bank to other branch of same bank or the other bank on which
the instrument is drawn, without involving cash through State Bank’s Clearing House or
we can say in other way that cheques which can’t be cashed at cash counter of the bank. ”
 Inward Clearing of Cheques, Demand Drafts(DD), Pay Orders(PO)
“Instruments drawn on HBL and presented by other bank is called Inward
Clearing.” So inward clearing results in reducing the balance in clearing account
to the collecting.
 Outward Clearing of Cheques, DD, PO
“Instruments which are drawn on other bank and presented to HBL are known as
Outward Clearing for HBL”. So, it results in inflow of funds from paying bank

55
 to clearing account of bank.
 Balancing of Amount
 Data Punching into System
 Any other duty assigned by the Manager
FOREIGN CURRENCY (FC) DEPARTMENT
 Foreign Account Opening

 Issuance of Foreign Currency (FC) Cheque Books

 Cash Handling(FC)

 Conversion of Foreign Currency into Pak Currency

 Inward and Outward Remittance(TT, FTT)

 Export Advance Payment

 Fixed Deposits

 Preparation of FC Supplementary

 Periodical Statements

 Any other duty assigned by Manager

 Checking of general voucher

CASH DEPARTMENT
Cash Department of HBL is given the complete responsibility of handling all receipts and
disbursement of cash, as a result of transaction in local currency.
 Cash Receipts
 Deposit slip/voucher posting
 Cash Payments
 Book keeping of transactions
 Custody of Cash

5.2 Detailed description of the department I have worked in

56
I have done internship at the Main Branch Habib Bank Limited Mirpur (A.K). My

internship was for the short duration i.e. eight weeks. I have performed following tasks in

the following departments:

Account Opening Department (CRO)

 Account opening (Current, Saving, etc)
 Each new customer is given Account Opening form where at the end Rules
governing the conduct of account is written. After reading, s/he signed at 3
places on the form which means s/he undertakes to abide by these rules.
 2 CNIC copies and 1 passport size photograph to be pasted on Account
Opening Form is collected from expected account holder. But in case it is a
photo account or so simple signature/urdu signature then total 3 passport size
photographs are collected from him/her.
 14 digit Account Number is allocated to it. Where these digits represents:
(a) First four digits represent the Branch code 0190.
(b) Next eight digits are from the “Customer Accounts Master File”.
(c) Last 2 digits represent the type of account; 01 for saving and 03 for
current account.
 2 Specimen Signature Cards (SSC) are signed in black ink pen by expected
account holder with allocated account number. One SSC and CNIC copy is
sent to Head Office Karachi for verification. Other SSC and CNIC copy is
retained for bank’s record.
 Account Opening Form is filled by CRO and signed at respective places.
 After 3-4 days, verification is received from Head Office Karachi and if
verified its record has been fed by Karachi Head Office into MYSIS. Now the
account is opened with the opening balance deposited at the time of signing
Account Opening Form.
 Know your customer (KYC) form is also filled, where some more personal
information of customer is recorded e.g. monthly income, other sources of
income, etc.
 Zakat form filling

57
 This form is filled by CRO on the request of account holder that “Bank will not
deduct zakat from his/her account and s/he himself/herself will pay zakat to needy
person.” When this form is attached with his/her form and update in system then
no zakat deduction is done from his account.
 Issuance PKR Cheque books
Cheque Book Request form is filled by CRO on request of customer and then
signed by customer to confirm the request and when customer receives the cheque
book, s/he signs on the respective place on request form that s/he has received
cheque book. Now CRO punch this transaction into system by CBR command.
Feeds respective customer account number, cheque book number, and number of
leaves in cheque book. Thus system automatically deducts charges for cheque
book issuance based upon this information.
 Cheque/Cash/Dividend Warrant Deposits
CRO deposits cheque, cash and dividend warrant on the request of account holder.
Procedure of filling Deposit Slip for Cheque, Cash, and Dividend Warrant
deposit:
(1) Received Cheque/dividend warrant to be deposited.
(2) Name and Account number of account holder in whose account listed
amount is to be deposited, is written on deposit slip.
(3) Date of deposit is written on it.
(4) Name of branch and bank is written on specified place.
(5) In case of cheque/dividend warrant, cheque#/warrant# is written on
specified place.
(6) Amount in words and figures is written on given places.
(7) Signed by customer at the place “Depositor”.
(8) Signed by CRO at the place “Deposited By”.
(9) In case of cash deposit, cash is received by Cash department from customer
and stamp the deposit slip and counterfoil with “CASH RECEIVED” stamp.
(10) Counterfoil is returned to Customer.
 Withdrawals

58
 A customer come to withdraw amount from his/her account, writes cheque by
herself or CRO do it favoring customer. Now s/he goes to Token Cashier to
collect amount. Remaining procedure as explained in Cash Payments.

 Lockers Operating
A Locker Request form is filled by account holder to get the facility of Locker.
Then s/he is given available locker; below rows of lockers are for female account
holders whereas upper rows are specified for males. S/he is given key of allotted
locker and another key is kept to CRO. To unlock the locker both keys are
required. Whenever customer comes to operate locker, s/he signs in the Locker
Operating Register with recording the time of operating locker. After operating
locker, s/he will again signs in the said register with recording of time in the
presence of CRO.

REMITTANCE DEPARTMENT
 Issuance of Pay Orders(PO)

Procedure:

 An issuance of an outward remittance must be supported by an application

along cheque/ or cash, preferably on banks own form, duly completed and
signed by the customer.
 When a customer need a pay sum of amount to some one. He has to fill up the
application of Pay order in which he mention the person in which favor he
want to make a Pay order. The customer can make his pay order through
cheque or through the cash on the counter.
 The customer should sign the application at the time when he is presenting the
application on the counter. The cashier receives the sum of amount and credit
the transfer account, and than the application is forward to the remittance
department. The officer debits the transit account and credits the Customer
account, and gets the print out of the Pay order.
 In the last, customer has to signed the application again on receiving the
instrument.
Charges for the Pay Order
 The branch issuing the remittance should recover all courier/ postage charges
from the customer /issuer, according to the schedule of charges. All charges of
the paying bank/branch will be on the beneficiary’s account.

59
  The charges of the pay order are Rs.143 for cash while from account it is Rs.
121.

 Issuance of Demand Drafts(DD)

Procedure:
 An issuance of am out ward remittance must be supported by an application
along cheque/ or cash, preferably on bank’s own form, duly completed and
signed by the customer.
 When a customer need to pay the sum of amount to some one out of city he
has to fill up the application of Demand Draft by remittance in charge in
which he mentions the person in which favor he want to make a demand
draft. The customer can make his Demand Draft through cheque or through
the cash paying on the counter.
 The customer should sign the application at the time when he is presenting
the application on the counter. The cashier receives the sum of amount and
credit the transit account, and than the application is forward to the
remittance department. Remittance in charge debits the transit account and
credits the Customer account. Get the print out of the Demand draft.
 In the last, the customer has to sign the application again on receiving the
instrument.
Charges for the DD
 The branch issuing the remittance should recover all telex/tale
gram//postage charges from the customer/ issuer, according to the schedule
of charges. All charges of the paying bank / branch will be on the
beneficiary’s account.
 The charges of the Demand Draft are Rs.220.
1.1 Cancellation of PO and DD

The Pay order and demand draft can be cancelled on the customer request by
receive the request on the plain paper. On cancellation of PO / DD Rs.100
charged. The original PO / DD must be in the possession of the designated officer
of the concern branch and marked as cancelled and tear apart.
 Issuance of LFTs
Procedure is same as PO and DD but in case of LFT, account number of
beneficiary is also required. Charges for it are Rs. 138.
 Cheque Transfer(Intercity)
Procedure is same as LFT. Charges for it are Rs. 110 for courier and 30% on
amount is commission and 10% on amount is excise duty.

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  Online Payment
A/c holder after giving his CNIC copy, is allowed to draw Rs. 500,000 like ATM.
 OBC Realization and Lodgment
Make OBC schedule on receiving OBC, where branch name, amount, OBC code
is written. Then courier charges Rs. 138 and Commission Rs. 110 is deducted
from OBC’s account and debited to HBL Main Branch GL.
CLEARING DEPARTMENT
 Inward Clearing of 3 instruments i.e. Cheques, Demand Drafts(DD), Pay
Orders(PO):
Following items to be checked while clearing the instruments:
 If instrument is in favor of bank then there must be “RECIEPT PAYMENT”
stamp otherwise “ENDORSEMENT” stamp on back of instrument.
“ENDORSEMENT” stamp will also be instrument is being sent from other
branch of HBL to Main Branch HBL for other bank.
 “CLEARING” stamp of same date on front of instrument on which date
clearing is to be done.
 Instrument should not be stale.
 Amounts in words and figures must match.
 No cutting on instrument.
 Signature of authority on back of instrument and should verify from database.
 Instrument should be completely filled.
 Crossing Stamp of bank on front of instrument
Officer now stamps the instrument with stamp like “Instrument(name of
instrument) Received”. Now this instrument is cleared.
 Outward Clearing of Cheques, DD, PO:
Officer on receipt of instrument, stamps it with “Instrument Received” stamp,
“Crossing Stamp” and “Clearing stamp”. Before 12:30pm, all instruments are
counted and scrutinized in bank wise and sent to clearing house. Now
are received by respective banks at the counter by concerned officer who
conducts scrutinizing of the instrument. If no discrepancies are noted as

61
 discussed in Inward Clearing then signed the instrument with stamping in
following manner and outward clearing is completed:
(i) “Clearing Stamp” bearing date of next working day on front of
instrument.
(ii) “Crossing Stamp” containing name and branch name of bank on the
front of instrument.
(iii) Third necessary stamp is “Credit Payee’s account” which is
confirmation of outward clearing.
(iv) If “payee’s account only” is mentioned on the instrument, the payee
should sign on back of instrument for endorsement of instrument to
another person.

FOREIGN CURRENCY (FC) DEPARTMENT

 Foreign Account Opening

Same in case of CRO is discussed. Only difference is of foreign currency. Current

account has the a/c ending digits 10 whereas a/c ending digits of saving account

for pound (GBP: code 12), dollar (code 11) or euro (code 14).

 Issuance of Foreign Currency (FC) Cheque Books

Same as in CRO.

 Cash Handling(FC)

Same as in Cash Department with the difference of foreign currency.

 Conversion of Foreign Currency into Pak Currency

For example, I converted Euro into PKR(Pak Rs.) in favor of Muzafarabad

Branch. This task is done into phases as:

Phase 1:

 FC Debit Voucher is made where Euro account is debited.

62
  FC Credit Voucher is made where Trade Routing Account is credited.

These vouchers posting is done in ITA.

Phase 2:

(a) Simple Debit Voucher is prepared where Trade Routing account is

debited.

(b) Simple Credit Voucher to credit Pak a/c Muzafarabad Branch.

These vouchers posting is done in AGI.

 Inward and Outward Remittance(FTT)

(1) Inward FTT:

If FTT received from HBL MZD Br. Drawn on HBL Main Br. Mirpur for

HBL Main Br. Rawalakot:

Prepare Simple Debit Voucher debiting Pak a/c Foreign Exchange Br.

Karachi with listed amount.

Prepare Simple Credit Voucher crediting Pak a/c Main Br. Rawalakot with

same amount.

(2) Outward FTT:

If FTT sent to UK, transaction GBP to GBP:

FC Credit Voucher is prepared crediting that Birmingham bank a/c. From

Where respective a/c is debited, crediting this a/c.

FC Debit Voucher is prepared to debit customer a/c.

Banker’s Check is filled along with Foreign Exchange Regulation Form.

 Export Advance Payment

Requirements:

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 (1) Covering Letter

(a) Copy of Invoice

(b) Copy of Packing List

(c) Copy of Original Airway Bills

(2) Commercial Invoice

(3) Form “E” (Export)

Advance Payment schedule is prepared, after advance payment, charges are

deducted.

FC Debit voucher debiting exporter’s account.

FC Credit voucher is prepared crediting a/c holder a/c.

Its posting is done in ITA.

 Fixed Deposits

To convert any account into Fixed Term Deposit like Advantage Account Opening

Form is filled where amount to be fixed, account to be debited, duration of Fixed

Deposit, Roll over / withdrawn option selected on instruction of customer, and

duly signed by customer and Manager Trade. Profit rates vary for different

periods.

CREDIT DEPARTMENT
Credit Facilities provided by the Bank fall into two broad categories, namely Funded
Facilities and Non-Funded Facilities.
1- FUNDED FACILITIES
(i) DEMAND FINANCE
Demand Finance is allowed to individuals, firms, corporate bodies and
other institutions/organizations against tangible security offered by them. It
is allowed under a Buy Back Agreement and granted in conformity with the
Bank’s credit policy and credit restrictions imposed by SBP from time to
time. Demand Finance consisting of mark-up receivable on different
finances availed by a borrower may be also created as a result of
restructuring / rescheduling of the finances.

64
 Repayment of Demand Finance is generally fixed on installment basis but
may also be repaid on or before expiry in lump sum along with accrued
mark-up. Grace period is allowed as and when considered necessary.
(ii) RUNNING FINANCE
Running Finance is extended to meet the working capital requirements
against hypothecation of stock under Buy-Back arrangement on mark up
basis. The primary security is the stocks and receivables against which
drawing power is calculated monthly. Running Finance to individuals is
generally allowed against pledge of government/marketable securities
retaining margins as per SBP directives.
Running Finance is granted for a fixed period of time, usually one year,
during which the customer is allowed to draw cheques against the running
finance account which is a separate account other than the customer’s
current account.
(iii) CASH FINANCE
Cash Finance is another conventional form of working capital financing
which is provided by the Bank to various sectors of the economy. It is
allowed on mark-up basis under buy back agreement for a period not
exceeding 12 months. The security against this facility is pledge of goods,
products or merchandise (non-perishable) which are kept under the
Bank’s lock and key in a well protected godown within the premises of the
borrower’s factory or elsewhere in a rented godown at the expense of the
borrower.
(iv) TERM LOANS
Term loans are loans with a final maturity of more than one year. Term
loan proceeds are used to finance a specific long-term asset, project
expansion or for other financially viable uses.
Repayment terms are agreed between the Bank and the borrower for
mark-up as well as principal repayments separately.
(vi) AGRICULTURAL FINANCING
Financing to this sector was made mandatory by the government for
which, State Bank was made responsible for formulating various
schemes under their monitoring and control. The financing is allowed
on seasonal basis to farmers for agricultural inputs such as seeds,
fertilizer, pesticides etc. and is based on actual cultivated area in a
particular season.

2- NON-FUNDED FACILITIES
Non-funded facilities are of two types:
(i) LETTER OF CREDIT
A Letter of Credit (L/C) is one of the most widely used modes of settling
trade debts on an international level. Also, it is a convenient and important
method of obtaining short term financial accommodation from banks by
customers. A broad Classification of L/Cs:
(a) Sight LC’s
In case of a Sight L/C, the draft is drawn at sight and the

65
 Bank as security holds the relevant documents, until the
same are retired.
(b) Usance LC’s, also known as Documents against Acceptance (DA)
L/Cs
Regarding Usance or D/A L/C, the draft drawn there under is
for a tenure stipulated in the L/C, payable by the customer on
due date. All limit proposals should invariably mention the
type of L/C, which the center intends to issue and special
types of L/Cs should be clearly described.

(ii) BANK GUARANTEE

In the normal course of business, banks issue guarantees on behalf of
customers. A bank guarantee is an undertaking given by the bank to a third
party, called beneficiary, on behalf of a person, a customer; to be
answerable for a debt of any person or its customer, upon default of the
debtor (customer). Bank guarantee is non-fund based / contingent liability
and for all intents and purposes it is a credit facility and should therefore
receive the same attention, scrutiny and care as is applied at the time of
incurring fund based liabilities like grant of any advance.

CASH DEPARTMENT
1. Cash Receipts
Receiving Cashier when handling cash deposited by customers proceeds as:
(i) Counts cash ensuring that denomination details and total cash stated in
the deposit slip agree with the amount of cash deposited. Also ensures
that whole currency is real.
(ii) Checks that amount in words and figures in the deposit slip is same &
correct.
(iii) Records the amount received into Cash Receipt Register. Stamps the
deposit slip ands counterfoil (customer copy) with “CASH
RECEIVED” stamp retained under exclusive control and signs the
deposit slip and relative counterfoil.
(iv) Counterfoil is now returned to customer/depositor and deposit slip is
retained for further processing.
2. Deposit slip/voucher posting
(i) The amount stated on deposit slip is now posted into customer’s
account through CASHIER of MYSIS by the Cashier.

66
 (ii) Once the transaction is posted, transaction requires supervision by
Manager Teller for amount till Rs. 20,000 and above that is supervised
by Manager Operations. After supervision, the terminal screen displays
a transaction number, which the Cashier records on deposit slip.
(iii) Now this deposit slip is retained by Receiving Cashier until day’s cash
has been balanced.
3. Cash Payments
Main branch is operating on token system under the following procedure:

(i) Customer cheque for cash payment duly signed on the reverse by the

presenter is tendered at Token Counter.

(ii) The Token Cashier ensures that the cheque is correctly drawn by

checking.

(a) Cheque should not be post-dated or stale. Stale means date of the

cheque is more than 6 months old from the date of presentation.

(b) Amount in words and figures are identical.

(c) Cheque is drawn on the branch of bank where it is being presented

for considered cheque payment.

(d) Cheque bears signature of drawer.

(e) Cheque made out “to order” is properly endorsed.

(iii) Token Cashier now enters cheque number and amount into Token

Issued Register against token number issued. Record the relative token

number on the cheque. Then balance of that account is checked to

ensure that it holds the sufficient balance for payment.

(iv) After this, drawer’s signatures on the cheque are matched with those in

the system and verified the signature by stamping it with

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 “SIGNATURE VERIFIED” stamp and signing in full to indicate

payment authorization. Record on the cheque the transaction number

displayed on the terminal screen and now supervision of the cheque is

sent to the Manager Teller through the system.

(v) Manager Teller now views the posting by using the relative transaction

number and does supervision by admitting that payment authorization

is in order.

(vi) Once cheque is processed after supervision, it is returned to Paying

Cashier for payment.

PERFORMANCE MANAGEMENT

I also worked under the Operation manager and my duty was to analyze check in and

check out of the employees and their performance during assigned tasks. I had to report

to the manager. The main purpose of this task was to keep information about the timings

of the employees this is a part of the performance appraisal. These are responsible for

measuring performance of employees and branches.

I analyzed different tasks performed by the employees. The basic purpose of this analysis

was to observe employees’ behavior with the customers and other colleagues.

Communication skills, interpersonal skills and abilities to perform the specific task were

enhanced by doing certain task. My supervisor guided me a lot in this task. Being a

manager the crucial part of the job is to control and observe the employees for what they

are doing and what they were asked to do. I analyzed that many of the employees loose

their increments because of their poor interpersonal skills. Here I shall mention the fact

that performance appraisal is what the manager decides for the particular employee.

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 CHAPTER 6
Structure of the HRM Department

69
6.1 HR DEPARTMENT HEIRARCHY CHART

HR COMMITTEE
(CHAIRMAN)

SVP/MMC + GROUP
EXECUTIVE (HR & OD)

SVP & HEAD (HR

NORTH)

SVP & HEAD (HR SOUTH)

VP + PRINCIPAL MDI

MEMBER

MEMBER

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 CHAPTER 7

HRM Process in Organization

71
7.1 HR PLANNING & FORECASTING

Human Resource Planning (HRP) is the process by which HBL managers ensure that

they have the right number and kinds of people in right places, and at the right time, who

are capable of performing assigned tasks effectively and efficiently.

HBL pays a lot of attention towards the methods of forecasting as it is an important part

of their planning process. Interpreting the forecasts and incorporating that information

into planning decisions is the challenge for managers.

7.1.1 HRP PROESS

In HBL, the managers begin HRP process by reviewing the organization’s current human

resource (HR) status, usually through HR inventory. This information is derived from

forms filled out by employees which includes items such as name, education, training,

prior employment, capabilities and specialized skills. This information is fed into

sophisticated database which makes retrieval of this information quite easy for top

management of HBL.

A part of this assessment is the job analysis which is an assessment that defines jobs and

the behaviors necessary to perform them. The information for job analysis is obtained by

interviewing and filling structured questionnaires by employees.

After getting required information, top management of HBL designs and develops the job

description and job specifications. Job content, environment, minimum qualification and

conditions of employment are given in job description. Job description and Job

specification are important for recruitment and selection.

72
7.1.2 FORECASTING HR REQIUREMENTS

HR needs are determined by the goals and strategies set by the Human Resource and

Organizational Developmental Group (HR & OD Group) of HBL. HR Demand is a result

of demand for HBL’s products and services. On the basis of estimate of total revenue,

managers attempt to establish the number and mix of employees needed to reach that

revenue. With this estimate, managers approximate HR shortages in terms of number and

type and highlight areas in which HBL is understaffed or overstaffed. Now managers

proceed to next step.

7.1.3 METHODS TO FORECAST HR NEEDS

Top management of HBL follows the forecasting methods which are of two categories:

1. QUNATITATIVE
2. QULAITATIVE

Quantitative forecasting is when the predictions about the outcomes are collected by the

HR managers with the help of past data. While quantitative forecasting is important and

useful in the zone of sales and advertisements etc.

HBL’s top managers apply Qualitative forecasting for HR requirements. As the

environment of HBL is dynamic, so qualitative forecasting technique becomes a slightly

difficult task for managers. Also, forecasting becomes relatively ineffective in predicting

non-seasonal events such as recessions, unusual occurrences, discontinued operations,

and all the actions and reactions of competitors. To improve the effectiveness of

forecasting technique the HR and OD managers are trying to use simple forecasting

methods.

73
As the competition is not only domestic but also global, so the managers are paying a
very keen attention towards forecasting methods. The steps that HBL managers are
following are given as under:
 HBL management compares every forecast with “no change” because a no change

forecast is accurate and it’s approximately half the time.

 HBL management does not rely on a single forecasting method. They make
forecasts with several methods and then average them, especially when making
long-range forecasts.
 HBL management does not make any assumptions that its management can

identify turning points in a trend. What is typically perceived as a significant

turning point often turns out to be simply a random event.

 HBL management shortens the length of forecasts to improve their accuracy.

7.2 EMPLOYEEMENT RECRUITMENT & SELECTION

HR department's role is to assist the business lines and to provide conditions where the

employees can achieve their ultimate potential.

Recruitment & Selection

“Recruitment is the process of attracting individuals in a sufficient numbers and

appropriate qualifications to encourage them for jobs with an organization.” Applications

with qualifications most related to job analysis are considered in this process.

In HBL both internal and external recruitment are taking place with a passage of time

although there are patently beneficial effects for bank by following a policy of filling

vacancies with in the bank as possible but there are inherent problems and limitations

also. HBL takes fresh graduates in the officer cadre from reputable intuitions of Pakistan.

After undergoing process a batch of probationary officers, having a minimum

qualification of masters and equivalent degrees, join HBL from all over Pakistan. These

74
officers then undergo classroom training, rotational training, and on-the-job training

before these postings at HBL’s branches.

Meritocracy is an integral part of HBL’s recruitment policy. Their merit-based

recruitment process incorporates the principles of equal opportunity and leads to the

appointment of the most capable candidate. This ensures openness and transparency,

allowing greater confidence in the outcome of the selection process.

The merit principle at HBL aims to identify the most suitable person for the job assessed

on the basis of the following parameters:

 Educational Background
 Skills and Competencies
 Abilities and Attitude
 Experience
 Interpersonal / Communication skills
Below is the diagram which represents the process, on which HBL have based the
selection.

75
7.2.1 SOURCES OF CANDIDATES
7.2.1.1 INTERNAL SOURCES (INTERNAL JOB POSTING)
HR & OD group is creating an environment to bring out the development. HBL

encourage the capabilities to produce business results in line with the strategy by hiring

and grooming the talent from within, as there success depends on the performance of all

of their Employees. One of the most effective tools being used by human resource

department for providing the advancement opportunities to employees within the bank is

Internal Job Posting. It not only helps in communicating to the employees about

opportunities in different groups within the bank network but also germinates ideas about

future opportunities they may aspire to. This strengthens employees’ long-term

commitment to the bank.

LOCAL JOB ADVERTISMENTS

Several positions have been advertised recently for Retail Banking Group and MISYS

Group such as:-

 Manager Teller and Services

 Manager Operations
 Technical Team Member
 Operational Team Member

INTERNATIONAL JOB ADVERTISEMENTS

To enhance the employees’ career scope, various GULF based positions have also been

advertised for International Banking Group i.e.

 Branch Operations Manager

 Internal Control Officer

76
7.2.1.2 EXTERNAL SOURCES
Based on requirements of experienced staff, HBL also recruits talent from the
marketplace. HBL offers competitive salary / benefits to worthy professionals at all levels
who wish to join hands with one of Pakistan's fastest growing bank. External sources
with complete plan as:

7.2.2 Employment selection process

The selection of candidates is through a well-structured system. The branch manager

forwards the submitted CVs of candidates including eligible staff members to the Head

Office in Karachi for final approval. Candidates are selected on the base of Merit,

transparency and competition. The forwarded CVs are sorted and profiled according to

the requirements of the bank and the candidates who qualify according to the pre-set

criteria are selected for interview process. The successful candidates are placed in the job

77
of their preferences. Eventually through this process the deserving candidates emerge in

the bank environment as bank officers.

7.3 TRAINING & DEVELOPMENT

From the very beginning, HBL has been focused on providing the tools to train young

officers and managers for assuming key functions and management positions within the

bank. HBL Training & Development Centers are fully equipped to train the influx of both

newly inducted as well as existing HR.

7.3.1 TRAINING NEED ASSESMENT

HBL Training strategy revolves around the following factors:

 All employees must have access to high quality training in order to build and

further their professional careers.

 Every staff member needs frequent and regular training in his existing, as well as

in future skill areas. Recommended minimum training for each staff member

should be complete in areas relevant to their jobs.

 A sizeable proportion of the Bank’s training resources are spent on its preferred

entry schemes involving fresh candidates inducted from universities. They are

trained and groomed prior to their postings in branches.

TRAINING & DEVELOPMENT PROGRAM FOR EMPLOYEES

Most of the training seminars/courses that are held at HBL are concerned in marketing,

meaning thereby for those staff members who are working in the sales & marketing

78
department. These are called “Management Training Programs”. Very few such courses

are held for those who do not deal directly with the clients.

MISYS
HBL has acquired ‘MISYS’, an internationally accepted state of the art banking

application, so batches of fresh officers receive 4 weeks rigorous training related to all

facets of banking comprising of classroom and on the job sessions. They are also be

trained in arenas of soft skill management and personal development. It helps maintain

the competitive advantage over the peer banks particularly in the local market.

FREQUENCY OF THE PROGRAM

Such courses are not held very frequently. However, their frequency is once yearly on the

average.

CONTENTS OF THE PROGRAM

Its contents include lectures, group discussions, group/individual activities etc. Members
are questioned about their current activities & how they perform their duties. They may
then be given some improved ideas that may further help to improve their efficiency.
VENUE OF THE PROGRAM
Programs of such nature are usually held in Karachi, Lahore or MDI Islamabad and

Rawalpindi, where selected members from all branches gather. They are trained by high

profile personalities and experts from the field and the external world are invited during

their training.

EVALUATION METHODOLOGY
Such courses/seminars are of no benefit until things are not implemented practically

during work process. To ensure whether an attendant has gained any good out of such a

program there are two methods:

79
 1) An after course feed back is taken from the members, where each member is

asked what he/she has learnt/gained out of the course.

2) Another way is that members are told to implement what they have learnt on

their jobs. They are required to periodically report to the program instructor or

their immediate senior & notify them whether or not they are applying their new

skills or knowledge on the job. Immediate senior is the only person who is able to

ensure if the person has actually benefited or not.

7.3.2 EMPLOYEE DEVELOPMENT

After working in HBL, I have come to know that it gives an equal opportunity to all of

their employees. They strive continuously to enhance the skills of their staff through “on

the job” training and customized training programs. The bank encourages staff members

to improve their educational qualifications providing study leave and offering financial

support.

HBL provides opportunities for its staff to have challenging and rewarding long-term

career. To this end, the HR Group (HRG) encourages and motivates its employees to

excel in the responsibility that they have in the organization. In doing so, HRG has been

restructuring and redesigning the overall structure of the organization, which includes

rationalization, cutting down the decision layers, improvement in staff training and hiring

professionals and MBAs at entry-level management.

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The overall direction of HRG has been towards nurturing the strengths of the human

capital to its maximum with a defining principal to help create a progressive environment

and sustain a thorough commitment of their staff towards focused customer service.

Under the umbrella of HBL Management and Organization Development Division

(MODD) their Management Development Institute (MDI) with its three fully equipped

chapters at Karachi, Lahore & Islamabad regularly conducts and outsource technical and

personal development courses for all level of staff enabling them to meet the challenges

of the ever-changing business requirements and customer needs. A few years back, 529

courses, workshops, skill development clinics and seminars in the disciplines of Service

& Attitude, Market Research & Selling, Management & Communication, Credit &

Finance, I.T. & E-Banking, Treasury & Trade Finance, Global/ Domestic Banking

Operations and on other diverse subjects were conducted by In / Ex-House professionally

skilled, qualified and certified faculty and industry experts for 10233 people of senior /

middle line management & staff carving 1334 days training days. There is no budget

limit for Training and Education at HBL.

7.4 Performance management

HBL’s performance management and reward systems ensure that goals are met in an

effective and efficient manner. They define a clear path for every employee to contribute

to the organization’s overall goals, peppered with regular reviews and feedback to help

employees gauge their progress.

At HBL, growth is not a function of time but rather of performance. As performance of

employees improves, the role that they play within the organization will accelerate to

reflect their input. HBL aggressively promotes “Pay for Performance Culture” with an

81
objective to encourage a work environment of high performance and merit-based

compensation.

In order to achieve high level of organizational performance and effectively manage their
people they are continuously striving to improve and streamline the process of
“Performance Evaluation”.

7.4.1 Setting performance standards & expectations

Following guidelines are taken into consideration while the standards and expectations

for performance are set by the HR & OD department of HBL.

 Performance of all executives and officers are evaluated on the enclosed revised

performance evaluation form. There is no change in the performance evaluation

of clerical staff therefore two separate bell curves which are prepared by each

Branch/Region/Division/Group.

 Employees who have been without an assignment for more than six months are

not rated. N/R is marked against name of such employees.

 Performance Evaluation of employees depends on achievement in three key areas:

o Business Results
o Customer Satisfaction
o Employee Satisfaction

 Group Heads assign weight ages to each of the above section as per the business

requirements and communicate it to HR & OD Group at the beginning of each

82
 year. The weight ages are then decided at Group Level & remain same for all the

employees within that Group.

 Within each section Critical Job Elements (CJEs) are defined to facilitate

development of Key Performance Indicators. Key performance Indicators (KPI)

and measurable performance standards for each of the above three sections are

defined by the Group according to the Business Strategy of that Group.

 Group Heads must ensure that KPIs and targets are communicated to each

individual within the Group in order to facilitate evaluation at the year end.

 “Leadership Skills” for supervisory position is assigned 5% weight age in

Performance evaluation. This refers to overall Leadership/potential for growth

keeping in view the overall achievement of the Branch/Department/Division and

supervisor’s capability to optimally utilize manpower.

Suggested Key Performance Indicators for Supervisory Level Positions

(Divisional Heads, Department Heads, Unit Heads/Branch Managers/Team Leaders)

[BUSINESS RESULTS]

Key Performance Indicators Performance Standard

Leadership (Potential for Growth)
1. Potential for Growth Demonstrated Leadership ability
2. Optimum utilization of resources and Ability to be communicated by Groups.
managing head count.
Core Business Goals Key Business Activities
3. Deposit/ Advances Standard to be communicated by groups
4. Reduction in NPL Standard to be communicated by groups
5. Timely delivery of targets Standard to be communicated by groups
6. Effective Implementation of processes Standard to be communicated by groups
7. No. of opportunities identified for No. of customers introduced, % increase in
developing new customer relationships customer base.

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Compliance
8. Adherence to laws, regulations, policies, As per Compliance/ Audit/ HR & OD
procedures & guidelines set by external Group Guidelines
regulators such as SBP
9. Compliance with polices, procedures & As per Compliance/ Audit/ HR & OD
guidelines defined internally for HBL Group Guidelines
10. Upholding highest level of ethical As per Compliance/ Audit/ HR & OD
standards & integrity in all activities Group Guidelines
including compliance with Code of Ethics
& Business Conduct.
Progressiveness
11. No. of new initiates taken for business As per Compliance/ Audit/ HR & OD
development, improve operational Group Guidelines
efficiency, cost reduction etc.

[Customer Satisfaction]

Quality Service
1. Ensure compliance with Customer 100% compliance, added initiatives taken

Service Quality Standards for implementation. Must highlight areas

where service was visibly improved.

Complaint Resolution
2. Resolution of Customer Complaints & Time taken to resolve complaints

evaluated feedback from internal & ______No. of complaints resolved

external customers
Customer Relationships
3. Developed lasting relationship with Monitoring changes in customer

clients/managed perceptions & expectations & proactive approach to cater

relationships with internal/ external it.

customers

[Employee Satisfaction]

Workforce Development
1. Optimally deploy employees & ___% of employee’s development for

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encourage employee development by enhanced responsibility. Identify training

providing required training for requisite needs of employees through TNA. Identify

skills. backups/ replacements of key individuals &

submit list to the Division /Region.

Workforce Environment
2. Must maintain an environment based on Demonstrate courteous and professional

HBL core values of excellence, behavior at all times.

meritocracy, integrity, customer focus and

progressiveness.
Workforce Involvement
3. Provides employees with clear goals/ Objectives set and assigned to all

expectations regarding desired results, employees and performance appraisal done

provides feedbacks and conducts objective as per policy.

Performance Appraisals.

7.4.2 Writing the performance reports

Writing performance reports is a careful task performed by HR and OD Group of HBL.

For evaluating individual’s performance HR & OD group has made RATING SCALE.

This rating scale gives a detailed description of the standards which help the managers in

writing the performance report of employees.

Rating Scale to evaluate individual’s performance is:

5 Outstanding Performance consistently exceeds the required standards at all times.

Highest level of competencies demonstrated. Exemplary
performance. [exceeds targets by 20%]
4 Exceeding Performance is well above the required standards most of the time in
Expectations accomplishing target/objectives/parameters of the assigned task.
Exceed normal expectations. [exceeds targets by 15%]

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3 Meeting Performance is consistent & meets the required
Expectations standards/objectives/expectations in all important aspects. Good
contributor.
2 Missing Performance is consistent & behavior sometimes does not meet the
Expectations basic requirements/expectations. Performance is generally
acceptable but improvement is needed. [Misses targets up to 10%]
1 Below Performance falls below expectations on critical factors.
Expectations Understanding is inadequate, performance & behavior is
inconsistent in completing tasks [Misses targets more than 10%]

Overall performances rating of employees are calculated as follows:

Total (Sum of all points) Divided by No. of KPIs
Following checks are incorporated to enhance Transparency of the System Supervisors

give reasons in the comment column, for assigning higher than 3 rating or assigning

lowest rating in any of the KPIs.

Comments & Signatures of 3 persons are necessary on the submitted forms

1) Employee’s Signature
2) Supervisor’s Signature
3) Reviewer’s Signature
HR representatives conduct spot checks to ensure that appraisee has signed off the

appraisal & forms are completed in all the aspects. As per the existing practice

Supervisors do not assign Performance Grades to the employees. Overall Performance

Grades (Bell Curve Rating): Separate Bell Curves are developed according to

Function/Branch Category/Division and Group as per existing practice. Simple Terms are

introduced for improved understanding of grades assigned as follows:

Grading Scale (Top Performer) Allocated %( 10%)

Exceeding Most Parameters EMP 15%
Exceeding Some Parameters ESP 20%
Meeting All Parameters MAP 30%

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 Missing Some Parameter MSP 15%
Missing Many Parameters MMP 10%

1. The ranges in the above categories depend on the maximum and minimum scores
received in particular Function/Branch Category/Division and Group.
2. Staff data and the total score achieved are mentioned on the front page.

3. Specific training needs and job rotation are highlighted in the development plan

section.

4. Transfer cases for all categories of staff are appraised by both branches/

departments as per existing practice.

5. All Regular employees including Executives on Contract are evaluated under this
Performance Appraisal System.
6. Group conducts Mid Year Performance Evaluation.
7. HR Audit checks do ensure the implementation of the Performance Management
System in a transparent and objective way.
8. Regions/Groups not to the system are asked to review and re-submit their
appraisal rating.
7.5 Employee compensation & benefits

HBL’s focus is on attracting, developing and retaining the best in the business by

offering market driven compensation and benefits packages. Their compensation and

benefits strategy combines the need to maintain a high performance culture along

with market competitiveness.

7.5.1 Type of compensation & benefits

1- Broad Band Pay System

In order to address the concerns, the management has launched the initiative of Broad

Band Pay System for the Bank which helps in achieving the following:

IMPROVED EFFECIENCY: Simpler salary administration process.

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 FLATTER STRUCTURE: Enhance cross-mobility in career.
INTERNAL ALIGNMENT: Alignment between regular and contractual
employees.
An individual’s salary increases as a result of the following:
1) Appraisal increase
2) Market based alignment
3) Enhanced job responsibility
The new benefit structure became effective from 1st Feb 2008. In the new system, all

the differences between allowances and benefits of contractual and regular employees

have been aligned on a consistent basis.

2- Conveyance Allowance

Eligibility: 1 year confirmed service in HBL.

Conveyance allowance is given to all eligible employees of HBL to compensate
them.
3- House Rent Allowance
Employees are compensated to meet their housing expenses smoothly.
4- Medical Allowance
Employees are given this allowance to keep them healthy.
I personally think that this Bank is moving towards a total pay philosophy which means
that all cash benefits of employees along with long-term benefits plus their variable pay
incentive schemes are taken in to consideration in line with the market factor in
determining the compensation.

7.6 Organizational career management

7.6.1 Employee job changes

I believe that facing the reality of unexpected career changes can cause stress and a list of

questions. Unexpected employment changes can happen in anyone’s career with little

notice leaving that person to wonder what hit him/her. It may be due to the performance

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of the individual or due to the performance of the organization. Either way it can result in

overwhelming feelings of joy, depression, anger, fear and uncertainty.

In each case it is important for the employee to remain calm and focus on the choices at
hand. Understanding the options will help make managing the change smoother.

7.6.2 Job changes with the organization

The purpose of these kinds of policies is to achieve optimum utilization of a staff

member's skills and talents by agreement to employee the person in a more advantageous

work situation through promotion, transfer, or demotion, and to enhance the career

advancement of staff members. HBL encourages the policy of open promotion, transfer

and demotion of individuals to staff positions on the basis of qualifications and suitability

without regard to race, sex, age, color, religion, national origin, handicap, disability, or

any social status, and in keeping with federal and state employment laws and regulations

and the polices of the Bank. All staff positions are listed with the Human Resources

Department of HBL.

It’s important to draw attention to the fact that only those staff members who meet the

following requirements may make application and be considered for a promotion/

transfer in HBL:

(a) Meets the minimum qualifications for the job or has clearly demonstrated

the ability to perform the job.

(b) Has been employed in his/her current position for a minimum period of six

consecutive months (the Director of Human Resources may approve

exceptions to this provision, particularly if a staff member is being forced

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 to seek another job due to circumstances beyond his/her control or if an

internal departmental promotion or transfer is involved). In the event the

Director of Human Resources approves a promotion or transfer prior to

completion of the 6 months probationary period and the staff member is

hired into a new position, a new 6 months probationary period is

established.

(c) Has a satisfactory record of performance in his/her current position.

7.6.2.1 Promotion

“The permanent movement of a staff member from a position in one job class to a

position in another job class of increased responsibility or complexity of duties and in

a higher salary range, is called promotion.”

As I have clearly observed the policies of HBL and thus I came to know that the

change of an employee from one position to another in a

classification having a higher salary-range maximum is termed a

promotion. In HBL a promotion is a career opportunity that

involves greater responsibilities, and may also involve an increase

in salary and a change in title. Promotions are intended to be non-

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 interim. In HBL promotion may occur in a unit that has a vacancy or is sometimes

undergoing reorganization.

A supervisor wishes to promote an employee into a vacant position in the department if

the employee demonstrates an exceptional competency and skill for that position. In other

circumstances, a supervisor may wish to assign additional, higher-level responsibilities to

an employee as a result of an internal reorganization or change in workflow in the unit. In

either case, the employee is considered for the promotion on the basis of his or her past

record, length of service, performance in the present position, and qualification to carry

out the duties of the higher position. If the employee is promoted into a classification for

which he or she is not certified, a 6-month probationary period is required. HR

department of HBL is the approving authority for all promotions of classified employees.

Salary recommendations for a promotion made by the hiring authority are reviewed and

approved by HR department. HR department compares the market value of the position

and the salaries of similar positions at the Bank, and where appropriate, the salary of

similar positions at peer institutions, prior to a final salary recommendation. To promote

an employee, the hiring authority or designee takes the following steps:-

 Sends a completed and approved Position Authorization Form and a memo of

justification to the director of Employment Services (HR & OD Group) stating the

name of the employee considered for promotion, an explanation of the office or

department changes, and the reasons why the employee is qualified for the

promotion. Include the employee’s current job description, the new job

description and the employee’s resume with the documentation.

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  Employment Services then reviews the promotional job description for the

responsibilities; job title and salary range and review the individual’s minimum

qualifications with the minimum qualifications stated in the job description.

 Employment Services communicates to the hiring authority the results of the

review.

 When there is more than one employee within the department who meets

minimum qualifications of the position, the department administrator then

documents the qualifications of each employee using the Internal Promotion

Form. This form is submitted to Employment Services (HR & OD Group) for

assessment prior to offering the position.

The Human Resources Department of HBL only makes suggestions and otherwise assists

supervisors in identifying employees qualified for transfer or promotion to open positions

within the bank, and consult with employees concerning their career prospects and job

opportunities. The Human Resources Department makes available to division directors or

department heads, or designees, only information in the personnel folder of employees

under consideration for promotion or transfer that is necessary in determining the

qualifications and suitability of the employees for the position for which they are being

considered.

7.6.2.2 Transfer

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“The permanent lateral movement of a staff member from one position to another

position in the same or another job class assigned to the same salary range is termed as

transfer.”

In HBL transfers within the same department or division with no change in job

classification is approved by the division director or department head. All other transfers

are approved by the Human Resources Department of HBL. An employee who wishes to

be transferred should make a written request to his or her department administrator. An

employee requesting transfer between departments must complete application materials

through Employment Services in HR before a transfer request may be considered. An

employee-requested transfer between departments also requires the written approval of

the department administrators concerned, the employee involved, and the director of

employment services. However, the transfer may affect the employee's leave accrual rate,

which is based on years of service, hours worked, and percentage of the appointment. A

transfer is made without reduction in pay rate unless such reduction is agreed by the

employee and the department administrator. In order to discourage indiscriminate

transfers, job hopping, and unfair competition between departments, a staff member who

transfers laterally to another position having the same or a different title, and the same

salary range, is not eligible for a base salary increase.

7.6.2.3 Demotion

“The permanent movement of a staff member from one position in one job class to a

position in another job class of decreased responsibility or complexity of duties and in a

lower salary range is called demotion.”

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In HBL reclassification to a classification with a lower salary-range maximum is

approved by the Human Resources Department and discussed with the employee.

Demotion is the reassignment of an employee from his or her present position to one that

is in a lower pay grade and in which the employee has previously held certified status or

for which he or she has the minimum qualifications. A department administrator's

recommendation that an employee be demoted is submitted through the equivalent

administrator. Concurrently, written notice is given to the employee and to the assistant

vice president of human resources of HBL. An employee with certified status is then

given notice of demotion at least 15 calendar days before its effective date and is must

given the reasons for the demotion. Upon demotion or downward reclassification of a

staff member's current position, a staff member's salary remains unchanged, if within the

salary range of the new position, or can be adjusted to an appropriate level within the new

salary range as agreed upon by the department official concerned (chair or director) and

the Assistant Vice President Human Resources, and subject to the approval of the

appropriate Vice President or the President. The new pay rate is determined by

consideration of the circumstances related to the demotion, the employee's employment

record and job performance. When an employee is demoted, his or her salary is reduced

to a step in the lower pay grade as recommended by the department administrator and the

assistant vice president for human resources. If demotion is due to failure to complete

successfully the probationary requirements of the higher position, to which he or she had

been provisionally promoted, the salary after demotion normally coincides with the salary

the employee was receiving before the promotion.

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An employee may be demoted, subject to the approval of the department administrator

and the assistant vice president for human resources or designee. The department

administrator may recommend the demotion of an employee for any of the following

reasons:

1. The reallocation or reclassification of a class or position to a lower pay grade.

2. The elimination of the employee's position because of lack of work or lack of

funds.

3. Expiration of a temporary promotional assignment.

4. The failure of the employee to complete successfully the

probationary requirements of a higher position.

5. Disciplinary action for causes stated in the code of ethics of HBL but not of a

degree of severity that would warrant suspension or dismissal.

6. At the request of the employee.

7.6.3 Separations

7.6.3.1 Layoff

“Layoff is the separation due to lack of work or job abolishment.” Separation-layoff is a

separation from bank’s service prior to the expiration of leave without pay/layoff, or prior

to the return from temporary work force reduction, or because the employee rejected an

offer of recall that does not require relocation. In the event of a layoff due to lack of

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work, reduced funding or departmental restructuring, supervisors do consult with the

Human Resources Officer prior to eliminating a position. Any potential layoff is must

discussed with the Office of Employee Relations to ensure that it is in compliance with

anti-discrimination and other laws. Employees are required to turn in all Bank’s property

to their supervisors, including identification, keys, tools, and electronic equipment prior

to their last day of work. The supervisor should ensure that all technology access is

disabled in a timely manner.

7.6.3.2 Termination

“It is involuntary separation due to reasons deemed to constitute proper cause by the

Bank or release during the probationary period.”

Managers/supervisors plan on taking disciplinary action against an employee, especially

if that action is suspension or termination of employment, do consult their HR Officer.

An employee who is terminated for serious misconduct (examples of serious misconduct

include, but are not limited to theft or dishonesty, violence, or refusal to follow a

legitimate work directive) are not eligible for re-employment and may be subject to

criminal charges if conduct involves any criminal activity.

The HR Officer then promptly completes an action to allow for the timely processing of

final paychecks, unemployment insurance and/or other relevant matters.

7.6.3.3 Resignation

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“It is voluntary separation of employee.” An employee who voluntarily resigns from the
Bank is expected to give the Bank’s chief manager the required advance notice. The
supervisor then notifies the HR Officer if the employee did not give the required notice
since failure to do so may result in the employee not receiving pay for their unused
vacation accumulation. An employee should submit a letter of resignation to his or her
supervisor. An employee who plans to resign from bank service is asked to give
reasonable notice to his or her branch’s manager (preferably at least 3-4 weeks), along
with a written explanation for the resignation.

An employee's failure to give his or her organization reasonable notice of resignation is

documented on the employee's termination report. The bank may choose to accept an

employee’s request to rescind his or her resignation within 30 calendar days of

separation.

7.6.3.4 Retirement

“It is a voluntary separation after meeting the Bank’s Retirement Rules.” In planning for

retirement, an employee should give as much advance notice to his or her supervisor as

possible, as it usually takes several months to accommodate and prepare for such a major

change. There is no mandatory retirement age for employees, except for members of the

Bank Officers Retirement System who are required to retire upon reaching 60 years of

age. An employee may take early retirement if he or she:

 is at least 45 and
 Has at least ten years of service

Early retirement may result in reduced benefits if the employee has less than 30 years of

service. If an employee becomes mentally or physically incapable of performing his or

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her job, and there is no reasonable accommodation, including through transfer or

demotion to another position, that will enable the employee to perform the job, then this

bank requires the employee to apply for disability or early retirement.

7.7 Labor management relations

The labor relations discipline is substantively different from traditional personnel

functions. In this particular organization, the labor relations specialists generally see

themselves as an arm of management rather than an arm of the human resources office,

tasked with achieving management's objectives through collective bargaining and other

(e.g., collaborative) processes. To be effective, they are proactive, looking for creative

solutions to problems, and they are not wedded to the status quo.

In terms of competencies, the skills that labor relations professionals of HBL have been

effectively represented the management go far beyond those required of the traditional

human resources management specialist. They know and practice law and they are also

familiar with facilitation, mediation, and other alternative dispute resolution skills; they

also practice a variety of labor relations approaches, from traditional collective

bargaining to collaboration to partnership; they know the operating rules of several third

parties; and they are thoroughly acquainted with line operation issues so that the

management's interests are protected and the missions are mostly accomplished with

effeciency and effectivness. They are working well with officials at all levels of the

organization and with all staff offices (building services, budget, finance, personnel,

general counsel, safety, and health). Habibians deal with matters outside the preview of

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traditional personnel programs and maintain constructive working relationships at both

the local and national level.

And, finally, depending on a variety of factors (e.g., level of union recognition, types of

issues addressed by the parties, nature and amount of labor relations litigation,

organization structure), labor relations have been pulled out of the human resources office

and have been made to stand alone i:e reporting directly to the top manager. I personally

think that recognizing the labor relations can be separated from the human resources

office is simply to recognize that the labor relations function is, in fact, different from

traditional personnel functions.

A careful consideration has been given to the placement and role of the labor relations

function in HBL. According to the top managerial views of HBL, they are not wedded to

the old paradigm that labor relations is inherently part of the human resources function. It

generally is not, and its role and organizational placement are taking this into account.

Habib Bank Ltd is trying to pursue and maintain an organization labor relations

philosophy that transcends changes in organizational strategy or in its management team.

1. HBL continually educate managers, particularly new managers, about rights and

responsibilities under the labor relations programs and their Bank's labor relations

policies and philosophy.

2. HBL is trying to establish and maintain a network that builds bridges to

management and it’s support staffs.

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 3. HBL is providing stability to the labor-management relationships during turbulent
organizational and staff changes.

The distinctive role of labor relations professionals raises the question of where the labor

relations function should be placed organizationally. Traditional thinking places it in the

human resources management office and classifies the labor relations practitioner within

the human resources management field. As far as management of HBL is concerned the

labor relations function has in some instances been separated from the human resources

management office.

There is no set rule for where the labor relations function should reside within HBL. It

depends on a multitude of factors, such as the extent and level of union recognition and

on the issues with which the parties are dealing. Elevating the overall human resources

management function to near the top line on the organization chart of HBL, which of

course help in meeting the needs of all human resources management professionals,

including those responsible for the labor relations professional. In this organization I

found this fact that the labor relations professionals are able to provide unfiltered advice

to the top management. For this reason, they are placed organizationally where their

views will be heard during management's deliberative processes.

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 CHAPTER 8

Critical Analysis

“It is much Easier To Be Critical Than Correct”

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Critical analysis

HBL values its assets especially its reputation. Being the representatives of the bank, each

employee has a significant role to play in preserving and nurturing the bank’s reputation

for honesty, integrity, & fair play in dealing with colleagues, with customers, with

regulators, with suppliers, and with general public.

The bank expects all the

employees to conduct

themselves in accordance

with the highest standards of

personal and professional

integrity and to comply with

all laws, regulations &

corporate policies and

procedures. HBL values employees’ loyalty & commitment to work. Considering them as

partners to the business, management is ruinously putting efforts for the long term

success of its employees so that they can progress with greater efficiency, improve their

systems and help their people improve their effectiveness.

 Majority staff members of Main Branch HBL Mirpur are young under/till age of

30. Young staff is very cooperative with internees as well as with colleagues but

old aged staff members don’t deliver information to internees and colleagues to

that easy extent.

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 I have observed both type A (which are characterized as fast moving,

hardworking, time conscious, comparative, impatient and preoccupied with work)

and type B (which are associated with stress) persons HBL as studied in

Management subjects. Type B persons are liked by the managers which act like

manager and not a leader.

 While observing clearly their strategies and code of ethics, I have come to know
that they have carefully designed their strategies in order to attain their goals with
efficiency and effectiveness. Management of HBL lays stress on the fact that they
have to do the right things in a right manner and at the right time as well. The
strategies of HBL comprise all parts of the POLKA (Planning, organizing,
leading and controlling with assurance) functions which I studied in Management
Subjects.

 HR & OD group is making relentless efforts in order to design the strategies in

such a manner that they are adoptable and every employee can get maximum
satisfaction through their jobs in HBL. Although HR & OD group is designing
very beneficial strategies for employees to improve employees’ satisfaction by
improving allowance structure, pay system, bonus system, etc but by designing a
scheme named “Golden Shake Hand Scheme”, employees’ satisfaction, sense of
future security is adversely affected. HBL is loosing skilled, experienced and
capable talent. Due to this scheme, old employees as well as new comers are not
certain about their future in HBL. Before introduction of this scheme, old and
fresh employees as well as expecting new comers feel sense of security of future
by joining HBL. But new comers are now hesitating to join HBL just because of
it. Competitors are gaining advantage of it.

 I have observed in Main branch Mirpur, in which I did internship, that all rules
implementation is not same for top management and employees.

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 Though there are some cultural differences which exist within the branch
employees but it’s very good to notice that they all respect each other for what
they are.

 Employees are devoted to their work. There is a lack of innovation provided to

new comers for performing their duties. They have to follow the previous lengthy
procedure to do a task when they are getting training from old aged member. They
are trying to adopt the modern ways of doing work in a skillful manner. HR
strategies are mainly based on the fact that customers should be satisfied and the
employees are obliged for these kinds of efforts.

 Staff provides excellent and quick service to customers.

 A more negative point that I noticed is that staff is forced to stay at branch till
6pm, even if anyone has completed their work till 5pm after which bank is closed
for customers. They still provide service to customers till 6pm, as according to
management they are providing facilitating their customers.

 Functions of any staff member will change only due to some problems e.g. some
body is on leave and other staff member is temporarily appointed on its seat.

 Interruption is made by managers while working in Cash Department. Due to

which Rs. 18000 becomes less in this department.

 As whole system of HBL is on MYSIS, but this system goes down very often.

Duration of this problem is from few minutes to 7 hours in day. As I have

observed this during my internship. Due to this problem, employees and

customers both suffer a lot.

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  Whole staff including managers makes customers feel as it’s their own bank. As

whenever a customer comes for a legal problem, they always use the words like

“no problem” “we are here for you” “you shouldn’t have any tension when we are

here” “oh this is your bank” “you are always welcome” etc and release his/her

stress and take own responsibility.

 A well working ATM is installed to facilitate customers.

 Branch is well decorated and renovated. There is enough area for customer

waiting. Very comfortable furniture is provided by branch.

Employees working in this organization learn how to:

 Adapt a deliberate thinking process for solving problems and finding
opportunities.
 Reduce adversarial interactions between team members.
 Stimulate innovation by focusing creative energy.
 Foster collaborative thinking (not necessarily agreement) from everyone on the
group.
 Create dynamic and positive meetings that make people/employees to participate.
 Spot opportunities where others see problems.
 See beyond the obvious.
 View problems from new and unusual angles.
 See all sides of a situation.
 Keep egos and “turf protection” in check.
 Save time.
 Isolate the types of thinking--- negatives, positives etc.
 Identify information that is missing or needed.
 Spot dangers and potential problems and ways to overcome and avoid them.

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Every management needs three kinds of skills…conceptual, human, and technical. In this

branch the implementation of human and technical skills is more than the conceptual

skills. Though the conceptual skills are needed more at the top management level and the

other two are more applicable at the branch level. There is a balance between these two

skills at this branch level and most of the problems are being solved at the branch level.

Employees are treated as internal customers and the management takes care of their

needs. HBL management believes that if the internal customers are satisfied then the

external customers would be satisfied robotically. The internal customers are given a

healthy environment and their needs are clearly observed and identified by the

management.

HBL’s top management has designed a “code of ethics” and they expect all their

employees to follow and adopt the code of ethics. The Board, the Chairman, the President

have ultimate responsibility for ensuring the integrity and the legality of the banks’

operations. Daily responsibility lies with line management. But whatever the position of

an employee is in the bank he/she is personally responsible for ensuring that he/she acts

fully in accordance with the bank’s standards. Violations of the Code may result in

disciplinary action including, in severe situations, immediate termination of employee.

The bank owes a strict duty of confidentiality to its customers. The golden rule in the

Bank is “KNOW YOUR CUSTOMER”. Employees must ensure that their personal

interests do not conflict with the duties which they owe to the bank or which the bank

owes to its customers.

The biggest issue which can become a hurdle in the work behavior of the employees is

“racism” “gender” “religion” and “cultural differences”. The HBL management promotes

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equality of gender, race, and religion. Though I have not seen any case of religion here

but there are some issues of cultural differences. I have not noticed any issues of

“Nepotism” in this branch in case of employees and there is no discrimination of gender,

race, religion, marital status, national origin, sexual orientation, citizenship, disability,

and color. There is no issue of resentment here and all the employees are working as a

team. There work is distributed in such a manner that they all depend on their group

members for their work and proper coordination is needed to complete the tasks. The

studies of management philosophers in different books and articles show that competitive

edge is what the organizations get through its workforce.

All of the branch members are alert and vigilant with respect to frauds, thefts or

significant illegal activity committed within the office. The Code of Ethics designed and

planned by the Human Resource and organizational development groups, is applied to all

staff members of HBL in their decisions and activities within the scope of employment,

or when representing the Bank in any capacity.

A copy of the Code is given to every employee for review. Each of them is required to

sign a written confirmation that they have reviewed, understood and agreed to adhere to

the Code. In case of any changes or additions in the Code, the same is again notified by

the current manner/means prevalent at the bank. Employee satisfaction and customer

satisfaction are both the major goals of this organization.

As a philosopher had said that “if you hold a dove in your hands too tightly it will die and

if you will loose your hands it may fly”. Same is the case with the management style that

the employees should be dealt in the manner that they should own their organization. I

admired this idea the most that there is a proper check system in this branch and there are

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cameras fixed everywhere so that the employees are more concerned and alert in

conducting there work.

As far as change is concerned the HBL team is continuously putting an effort towards the

changing environment. A quote which I have seen on their annual magazines is:

“VISION WITHOUT ACTION IS MERELY A DREAM.ACTION WITHOUT VISION

JUST PASSES THE TIME. VISION WITH ACTION CAN CHANGE THE WORLD.”

This quote is by Joel Barker (Independent Scholar & Futurist) who was first to popularize

the concept of Paradigm Shifts for the corporate world.

HBL’s HR & OD strategies like “SIX THINKING HATS” which is a simple and effective

system that increases productivity. This strategy is taken from management literature.

According to my analysis, they are following good planning and organizing those plans

very nicely but they have also made strategies to control the planning process and they

believe in leading all the steps in a leadership style. The top management believes in

leadership style rather than a typical manager style because leaders can lead and give

direction rightly by supporting all members rightly but the manager only gives

instructions. Their strategies, ideas and policies are mostly gained by Human Resource

Developmental literature which the main reason for HBL to have a competitive edge over

its competitors.

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CHAPTER 9

SWOT Analysis

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SWOT analysis of organization in the business sector

STRENGTHS
 Competitive Organization because HBL is a reliable and powerful name in the
financial market of Pakistan. It has a reputation for value for money, convenience
and a wide range of products and services under one roof.
 Goodwill
 Professional management
 Large network
 Overseas network with large deposit base
 Skilled HR
 High quality products
 Highly qualified management
 Adequate financial resources
 Adopting Information Technology
 Global Working
 Quick implementation of desired change in the work process
 Internationally recognized
 Strong historical background
 Retaining Trust of Customers
 Excellent Service Provider

WEAKNESSES

 Golden Shake Hand Scheme of HBL

 More Work load upon employees
 As an international organization, so cultural differences in the workplace
 Due to strictness from management to stay in branch till 6Pm, employees work
boringly
 No fix time of leaving the bank in the evening especially for males

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  Less Appraisal Opportunities
 Less chances of promotion
 Less promotional activities
 Sexual Harassment

OPPORTUNITIES
 Large network due to having a lot of branches all over Pakistan where others have

to start their businesses

 HBL can excel through good conduct of business and proper use of HR

 Had made right choice of places for their branches where they can attract large

customer base

 Due to above benefit, HBL can capture new market segment

 High degree of potential to entertain local market

 Due to high degree of compensation and benefits provided to employees, HBL

can attract well-educated and experienced staff

 Globalization and new ventures

THREATS

 Competitors can attract skilled and trained human resource by offering them

higher salary package

 Other banks can also attract highly skilled and trained HR due great weakness of

HBL which is its Golden Shake Hand Scheme

 Deposit level can reduce due to loss of skilled HR

 Entry of new competitors e.g. China & India

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 Customer’s need and demand changes

 Political instability in Pakistan

 Changing geopolitical situation

 Changes in government policies

 Low price offered by competitors

 Low account balance limit offered by competitors

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 CHAPTER 10

Conclusion & Recommendations

For Improvement

“Fix Your eyes on Perfection and You make almost

everything speed towards it.”

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10.1 Conclusion

My internship in HBL gave me an opportunity to apply my knowledge and to gain

immense experience of working in a prestigious organization. Staff members of the bank

are cooperative, efficient, devoted & highly professional. They gave me a number of

opportunities to perform various tasks independently. This facilitated me in acquiring an

insight into the operational activities of the bank in providing high quality service to its

clients. Besides, it also introduced me in understanding the internal operations of the

bank.

By keenly observing the HR & OD policies and strategies, I have realized that Top

management of HBL lays stress on the outstanding leadership style for followers. As their

work is based on team work so for this reason, the team should be strong. HBL’s HR &

OD group is continuously making efforts to make their team work more strong. On the

whole strategies of the leadership style are being adopted by the Top managers and for

adopting the real leadership style they are laying stress on the “SIX THINKING HATS”.

As a leader it pays to wear different hats at different times. Here I must explain this

strategy in order to make my point more clear that how the management is getting

maximum benefit by adopting this strategy. Management Guru, Dr.Edward de Bono’s

“SIX THINKING HATS” paradigm is a simple and effective system that increases

productivity. The principal behind the “SIX THINKING HATS” is parallel thinking that

is assuming different leadership characteristics one after the other to ensure that all the

people in a particular meeting are focused on and thinking about the same subject at the

same time. In this system, thinking is divided in to six categories, with each category

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identified with its own colored metaphorical “thinking hats”. By becoming pre-sensitized

to each of the “HATS” one can easily focus and re-direct thoughts, conversation,

meetings or reports. In team environments, the difference between brilliant and mediocre

teams lies not so in their collective thoughts but in how well they use them and how well

members work. HBL’s HR & OD group has included this “SIX THINKING HATS” style

in their strategies of upper level management where decisions take place.

The six tools are given below to fully understand what they are all about and what their

use at the managerial level is:-

CREATIVITY:

Focus is on creativity, possibilities, alternatives and new ideas. It is an

opportunity to express new concepts and new perceptions. Lateral thinking could be used.

CONTROL:

It is used to manage the thinking process. It ensures that the “SIX

THINKING HATS” guidelines are being observed.

INFORMATION:

Calls for information/facts known or needed.

EMOTION:

Signifies feelings, hunches and intuition the place where emotions are placed

without explanation.

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CAUTION:

Signifies caution and critical thinking – Do Not Over-Use! Pointing towards

why some things may not work.

OPTISMISM:

Symbolizes brightness and optimism. Explore the positives and probe for

value and benefit.

BENEFITS OF 6 THINKING HATS

 Lead sorter and more productive meetings
 Reduce conflict
 Look at decisions and problems systematically
 Improve team results
 Achieve results
 Generate more and better ideas
 Solve problems, innovate and create

 Think clearly

Now I conclude by saying that my internship has provided me assistance in bridging the

gap by the knowledge acquired at the university & its practical application in the

organization like bank.

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10.2 RECOMMENDATIONS
 All staff including especially old aged members should be cooperative in

transferring knowledge they hold, to others.

 Golden Shake Hand Scheme should be ended now.

 Implementation of rules should be same and strict for all including top
management and employees.
 As HR and OD group’s strategy is that “Innovation is welcomed by employees.”
So it should be implemented properly. Employees should be allowed to perform
task in their own efficient way.
 It’s good to facilitate customers but there must be a discipline implemented by top
management of HBL that employees’ duty hours are from 9AM-6PM and have
equal effect of salary.
 Interruption should be avoided by managers while working in Cash Department to
avoid any unfavorable effect.
 HBL should enhance Promotional Activities. It includes promos on the TV or by

advertisement campaigns in leading newspapers of the country.

 MYSIS software should be technically such that it can bear the heavy traffic load

at the same time.

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 CHAPTER 11

References & Sources Used

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Reference & Sources
 Dr. Asrar H. Siddiqi ( 7th Edition ) , Practice and Banking in Pakistan ,
Royal Book Company
 David A. Decenzo Stephen P. Robbins, Seventh Edition, Management
(Human Resource), TechBooks and Printed by Von Hoffman
Press.
 www.hbl.com
 www.sbp.com.pk
 HBL Brochures related bank’s products
 Annual report
 Code of ethics

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CHAPTER 12

Annexes

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I use following questionnaires to gather information for my report.

SAMPLE QUESTIONNAIRE

MARK THE ANSWER OF YOUR OPINION:

Recruitment is made:

1. Quarterly
2. Half Yearly
3. Yearly
4. Whenever required

Recruitment process is done by:

1. Human resource manager

2. Regional Chief
3. Chief manager
4. Manager Operation

Source for recruitment used in HBL:

1. Employee referral
2. Promotions
3. Newspaper Advertisement
4. Recruitment agencies
5. Universities & Colleges

Which characteristic you seek in selection test?

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Design of interview:

1. Structured
2. Unstructured
3. Medical test
4. Physical test

How final selection decision is made?

What features of any job are analyzed while conducting its job analysis?

Frequency of conducting job analysis:

1. Quarterly
2. Half Yearly
3. Yearly

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Job Analysis is done by:

1. Chief Manager
2. Manager Operation
3. Human Resource Manager

Job analysis methods which you use:

1. Employees interviews
2. Supervisors interviews
3. Expert panels
4. Structured questionnaires / Forms
5. Task interviews

Contents of job description:

1. General information
2. Purpose of job
3. Responsibilities and functions
4. Reporting relationships
5. Internal / external contacts

To what extent job analysis helps in determining training needs?

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Type of training program designed by HBL:

1. On the job training

2. Off the job training

What are the advantages of performance appraisal in selection process?

What are your criteria for employee’s selection?

What is your experience about reengineering in HBL?

Reasons for attracting large customer base:

1. Excellent Service
2. Higher Profit Rates
3. Competitive Advantage

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