Chapter – 1 Introduction of Study
CHAPTER – 1
INTRODUCTION OF STUDY
1.1 BACKGROUND OF STUDY
The Students of Institute of Management studies University of Peshawar, studying Courses leading to Bachelors in Business Administration (BBA Hons), are required to undergo in Internship Program of Eight Weeks duration in any National or International Organization of repute. The Institute requires internship Report based on the theoretical and practical learning of the Student in the organization. The Internee is required to submit Research Report to the internship and Development Division (R&DD) of, IMS UOP, which is properly evaluated on the basis of his/her description and analytical capabilities by Internal and External Examiners.
To fulfill this academic requirement and being a Student of BBA (Hons), I did my Internship in Habib Bank University campus branch Peshawar.
The concern of this report is to study and analyze the overall view of the Bank & services offered by the bank to its customers.
Habib Bank is considered to be one of the most prominent and outstanding bank as far its reputation and progress is concerned.
1.2 PURPOSE OF STUDY
The purpose of the report is to review and analyze the services offered by the bank to its valued customers, and to get training in real life situations and to see how successful organization’s management apply management skills to run their organization. In this context, its objectives are:
1. To examine and evaluate banking operations.
2. To give an insight to the readers about the Organization.
3. To suggest feasible recommendations.
4. To improve report writing skills.
1.3 SCOPE OF WORK
The report is concerned with the performance of the HBL university campus Branch Peshawar. It explains various functions at the branch.
The branch performs certain banking services for its customers such as Remittances, Deposits, Bills, and Clearing etc.
1.4 METHODOLOGY OF REPORT
Both Primary and Secondary Data were used in compilation of the report. Methodological tools used were:
1.4.1 Primary Data
§ Personal Observation.
§ Questionnaires.
§ Interviews with Bank Personnel.
1.4.2 Secondary Data
§ Brochures of the Bank.
§ Bank Manuals.
§ Annual Reports.
§ Internship Reports on HBL available in Institute of Management Studies and Institute of Management Sciences Libraries.
§ Websites.
1.5 SCHEME OF REPORT
This report is divided into following five sections, which are further divided into Seven Chapters.
SECTION – I
This Section has one Chapter.
Chapter –1
This is an Introductory Chapter, which describes the Background, Purpose, Scope, Methodology and Scheme of the Report.
SECTION – II
This section includes the review of Habib Bank Limited. This section is comprised of four chapters.
Chapter – 2
This chapter is an Introduction to HBL, which encompasses a brief history of banking and overall banking sector in Pakistan in general, and the history of HBL, and its objectives and policies in particular.
Chapter – 3
This chapter is about Organizational Review of HBL, which identifies the Organizational Structure of the bank.
Chapter – 4
This chapter includes Departmentation and its Human Resource Management.
Chapter – 5
This chapter contains products & services offered by HBL
SECTION – III
This section has three chapters and it is about the Analysis of HBL.
Chapter – 6
This chapter includes Critical Analysis of the HBL.
Chapter – 7
This chapter includes SWOT Analysis and tows matrix.
Chapter – 8
It contains a Financial Analysis.
SECTION – IV
This section contains the concluding chapter of the report.
Chapter – 9
It contains findings, suggestions & conclusion. At the end conclusion, bibliography and some annexures are given.
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1 Internship Report On Habib Bank Ltd.
Chapter – 2 Introduction of HBL
CHAPTER– 2
INTRODUCTION OF HBL
2.1 EVOLUTION OF BANKING IN PAKISTAN
The pace of banking development in Pakistan has perhaps very few examples in the world. Starting virtually from scratch in 1947, the country today possesses all range of banking and financial institutions to cope with various needs of economy.
The area now constituting Pakistan was, relatively speaking, fairly well provided with banking facilities in undivided India. In March 1947, there were 3496 Offices of India Scheduled Banks out of which, as many as 487 were situated in territories now constituted Pakistan.
The Reserve Bank of India had decided that in the interest of smooth transition it should continue to function in newly emerging state of Pakistan up-till 30th September 1948.
The event is immediately after independence seriously strained political relations between the two states and a point was reached when it was strongly felt that without control on its currency and banking the newly established state if Pakistan remained exposed to grave dangers.
Following the announcement of independence plan in June 1947, there was a rush in banks to transfer funds and accounts. This resulted in a negative effect on banking service in Pakistan. The banks, which had their Registered Offices in Pakistan, transferred them to India. In effort to bring about the collapse of the new state by pushing a deliberately policy of withdrawals, the Indian Bank’s Offices were closed quickly. The numbers of schedule banks were declined from 487 before independence to only 195 by 30th June 1948.
2.2 DEVELOPMENT OF BANKING IN PAKISTAN
At the time of partition, the Commercial Banks were only as 38, out of these, the Pakistani Banks were 2, Indian Banks were 29 and Exchange Banks were 7. The total deposits of Pakistani Banks stood of Rupees 880 Millions, whereas the advances were Rupees 198 Million.
In order to regulate the growth of banking on a sound footing, the following measures were taken to develop the banking system in Pakistan.
1. The State Bank of Pakistan, which is the Central Bank of the Country, was established on July 1, 1948.
2. The National Bank of Pakistan was established on November 21, 1949. This bank is to serve as an agent to SBP.
3. The Industrial Development Bank of Pakistan (IDBP) was set up on August 1,1961 with a paid up capital of Rs.50.000 Million. The Agricultural Development Bank of Pakistan (ADBP) was set up in 1961, which provides Short, Medium and Long Term Loans to the Farmers.
4. In January 1974, all the Commercial Banks were nationalized. The weaker commercial banks were merged with the stronger ones and five major banking companies were formed. MCB, ABL and UBL have again been privatized while Habib Bank was privatized on 29th December 2006.
5. The Pakistan Banking Council was set up for coordinating the activities of the Nationalized Commercial Banks. The Banking Council formulates policies and guidelines for the banks.
6. Interest has been eliminated from the banking transactions since July 1, 1985. The banks are now accepting saving deposits on profit and loss sharing basis. Modaraba and leasing companies are also operating in Pakistan.
7. The Government of Pakistan has also liberalized the exchange and payments procedure. The Pakistani Firms and Companies can now maintain foreign currency accounts in Pakistan on the same basis as non-Pakistani firms and companies can.
2.3 BRIEF HISTORY OF HBL
Habib Bank Limited (HBL), at its present position, has a long and rich history of deeds and sacrifices. All this has been possible on the account of sustained efforts. In 1841, a family business company was established in the name of Khoja Mithabhai Nathoo in Bombay, which was dealing in steel business with in and outside the Indian Sub-continent.
In 1891, a young Muslim Lad Habib Ismail got employment in this company. By the dent of his ability and sincerity to duty, radiated his career and at the age of just 18 years, he not only became shareholder of the company but also President of the steel market. His four children namely Ahmad Habib, Muhammad Ali Habib, Daud Habib, and Ghulam Ali Habib, after having educated and grown up, were inducted in the business of the company and there after the name of the company was changed as “Habib & Sons”.
Habib Ismail died in 1928 at the age of 53. After the death of their father, the four sons ran the whole business. Mohammad Ali Habib was younger and rank third in the age but was the most intelligent among his brothers and a successful businessman. At that time there was no Muslim Bank in the Sub-Continent. Habib family established the first financial institution of the Muslims with the name of “Habib Bank Limited” on the 25th August 1941.
The first branch of Habib Bank Limited started functioning on 30th August 1941 at Muhammad Ali Road Bombay, where Quaid-e-Azam Muhammad Ali Jinnah first of all opened his personal account. At the time of its inception, the bank’s total paid up capital was Rs.2.5 Million.
Habib family migrated to Pakistan and later on shifted the Bank’s Head Office from Bombay to Karachi on 7th August 1947 just one week prior to independence, to play its pivotal role in the development of this newly born country. The mission statement and its values of HBL are:
2.4 MISSION STATEMENT OF HBL
To be recognized as the leading financial institution of Pakistan and a dynamic international bank in the emerging markets, providing our customers with a premium set of innovative products and services, and granting superior value to our stakeholders – shareholders, customers and employees.
2.5 VALUE OF HBL
HBL is firmly grounded with a corporate philosophy that incorporates five solid values which each individual associated with the bank abides by.
§ Humility
We encourage a culture of mutual respect and treat both our team members and customers with humility and care.
§ Integrity
For us, integrity means a synergic approach towards abiding our core values. United with the force of shared values and integrity, we form a network of a well-integrated team.
§ Meritocracy
At every level, from selection to advancement, we have designed a consistent system of human resource practices, based on objective criteria throughout all the layers of the organization. We are, therefore, able to achieve a specific level of performance at every layer of the organization.
§ Team Work
Our team strives to become a cohesive and unified force, to offer you, the customer, a level of service beyond your expectations. This force is derived from participative and collective endeavors, a common set of goals and a spirit to share the glory and the strength to face failures together.
§ Culture of Innovation
We aim to be proactively responsive to new ideas, and to respect and reward the agents, leaders and creators of change.
HBL after partition opened its branches throughout Pakistan to provide finance and other facilities to the business community. The bank helped handsomely in the construction of WARSAK dam project, Wapda, & K.D.A. by provided finance and other facilities.
HBL started its journey on August 25th, 1941 and with the able guidance of its management, dedication and hard work of its entire staff, it has so far touched the high peaks of its excellence. It was HBL that introduced service products such as Credit Cards, ATMs, Travelers Cheques, etc., to the Pakistani Market. 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.
HBL has today 1456 branches inside the country, 65 branches outside the country and two subsidiaries. Other than this the bank has its overseas operations in 25 countries includes 65 branches, two subsidiaries, two Joint Ventures and two representative offices.
HBL was privatized in an open auction on 29th December 2006 and the management has been handed over to the winner group i.e. Agha Khan Foundation in February 2007. Still after the privatization the objectives and policies are the same and the new management has so far not introduced their line of action.
2.6 ROLE OF HBL IN BANKING SECTOR
Habib Bank was the pioneer, which opened branches all over Pakistan in order to provide finance and other facilities to the business community. HBL has introduced certain new products and services after starting its operations in Pakistan. It was first commercial bank to import the electronic machines that are in use in the leading banks of advance countries. These machines have made easier for the bank to cope with its expanding business and fast growing clientele.
The HBL has introduced new facilities like Evening Banking, Gift Cheques, Rupee Traveler's Cheques, Credit Card System, Short Term and Long Term Schemes for businessmen, Crore Patti Scheme, and Monthly Income Scheme. It also issues a monthly publication with the name of Business News Service. Habib Bank is fully geared to monitor the national economy and play its due role in bringing prosperity to the country.
Habib Bank is playing a vital role in the Public Sector. After partition, the first major association of HBL with the Government was the sponsoring of the Pakistan Finance Corporation Ltd., jointly with the Central and Provincial Government for financing of cotton. The bank always provided financial and technical support to public sector. Bank also associated itself with large-scale projects such as Warsak Dams Project, WAPDA, Pakistan Steel Mill, KDA etc. by providing finances and other facilities.
2.7 OBJECTIVES and POLICIES OF HBL
2.7.1 Objectives of HBL
Objectives are the ends towards which organizational and individual activities are directed. The goal of every manager is to create a "Surplus", and clear and verifiable objective facilitates the measurement of the effectiveness and efficiency of managerial actions. Objectives state the end results desired, and major objectives are usually supported by sub-objectives. Thus, objectives form a hierarchy as well as a network.
As a Commercial Bank, Habib Bank has the following main objective:
1. Earning profits for the bank itself and for its Share Holders.
2. To promote banking business in the country.
3. To provide employment opportunities to the people.
4. To develop Industries both on Large Scale and on Small Scale in the country.
5. To provide self-employment schemes to people.