INTERNSHIP REPORT ON

UNITED BANK LIMITED

MAIN BRANCH D.I.KHAN

Submitted To
ZAHID AWAN

Submitted By

ABDUR REHMAN SOHAIL SHEIKH

BBA(Hons) Roll # 475

Session 2004 2008

IN THE NAME OF

ALLAH
The most Merciful & Compassionate The Gracious & Beneficent Whos Help & Guidance? We always solicited at every step

UNITED BANK LIMITE DERA ISMAIL KHAN

MY LOVING PARENTS
Whatever success in my life achieve, It will largely be the result of the love, Encouragement & Blessing which my family Have brought into my life especially My

MY THIS EFFORT TO MY FAIMLY ESPECIALLY TO

DEDICATION I DEDICATE

Mother & Father.

After this I would be very thankful to my TEACHERS Who helped me on every movement of my study.

UNITED BANK LIMITED D.I.Khan

PREFACE
Students have to face lot of difficulties in practical field's there is a lot of difference in theory & practiec.To avoid this difficulties BBA(Hons) students are obligatory to join a business organization for the period of Six weeks for practical traning.This traning makes the students familiar with the practical system of management ,marketing & finance, which prevail in business organization.So in this regard i had the oppertunity to work practically with United Bank Limited D.I.Khan. I am able to understand the difference between the theoretical & practical work and that experince contributed a lot to my knowledge and exposure. I work with finance and accounting departments and being a student of accounting and finance, I implemented my knowledge there in.

Abdur

Rehman Sohail Sheikh

ACKNOWLEDGMENT
All praise is for ALLAH, the most merciful and his prophet Muhammad for every torch of guidance and knowledge for humanity. I offer humblest and sincerest words of thanks to GOD Almighty WHO blessed me with potential and ability to make material contribution to already existing ocean of knowledge. I am humbly grateful to my honorable and respected teacher ZAHID AWAN, who furnished me with the opportunity to

complete this Research Report, and thereby consolidating my concepts, enriching my knowledge, establishing my skills and strengthening my confidence, especially his lectures.

ABDUR REHMAN SOHAIL

BBA(Hons) Roll # 475 Sess ion 2004-08

INTRODUCTION
Evolution of Banking:
It has not so for been decided as to how the word Bank originated. Some author opine that this word is derived from the words Bencus means a Bench. The explanation of this origin is attributing to the effect that the Jews in Lambert transacted to business of money exchange on benches in the market-place. Incidentally the Bankrupt is said to have been evolved from this practice. The opponents of this opinion argue that if it was so, then how is it that the Italian money changers were never called BANK Other authors hold the opinion that the word Bank is derived from the German word Bank which mean Joint stocks fund later on, when the German occupied major part of Italy, the word bank was Bank. A Bank is an institution, which deals in money. Bank draws surplus money from the people who are not using it at the time and then lend it to those who are in position to use it for productive purpose. A bank is an establishment for deposit, custody, and issue facilitation transaction from one place to another. The companys act 1962 defines banking as the accepting for purpose of lending of investment of deposits of money from public repayable on demand or otherwise and withdraw able by cheque, draft offer of otherwise. A bank is also defined an institution, which purchases and sells money and transacts other financial business of like nature. The business of bank consists of: 1. 1. 1. Receiving money on deposits at moderate rate of return. Conducting cash transactions of customers. Granting loans and advances.

1.

Dealing with bills of exchange and drafts of customers, providing other services to customers. A Bank includes a body of person whether incorporated of not who carry on

business of banking. A bank is an institution dealing mainly in money and credit. It accepts deposits form one class of people at lower rate of interest and advance money out of these deposits to other class of people at higher rate of interest, the difference of interest is banks profit.

BANKING IN PAKISTAN
At the time of independence, the areas which now constitute Pakistan were producing only food grain and agriculture raw material for Indio Pakistan subcontinent. There was practically no industries; and what ever raw material was being produce was being exported from Pakistan of which 487 were located in west Pakistan alone. As a new country with out resources it was very difficult for Pakistan to run its own banking system immediately. There, in accordance with the provision of India independence Act of 1947, an Export committee was appointed to study the issue. The committee commanded that the reserve Bank of India should contain to function in Pakistan until 30th September 1948, so that the problem of time and demand liability, coinage, currency, exchange etc, be seated between India and Pakistan. It was decided that the India note would continue to be legal trend in Pakistan till 30 th September 1948. Foiling the announcement of independence plan in June 1947. The terriers now comprising Pakistan started transferring their assets to India Moreover, the banks including those having their registered officer in Pakistan, transferred them to India in order to bring a collapse of the new state. By 30 th June.1948 , the number of officer of scheduled banks in West Pakistan declined from 487 to only 195. There were 19 foreign banks with the status of small branches offices which were engaged solely in exports of crops from Pakistan, while there were only two Pakistani institutions Habib and Australian bank. confidence of the people. The panic of uncertain further shook the The Government therefore, promulgated the banking

companies Ordinance,1947 to interest of both the bankers and customers. The separation of East Pakistan and its repercussion in the form of economic depression; demonetizations of currency in 1972, and the rampant world-wide inflation have caused a lot of difficulties to the banking system in Pakistan. Yet the growth of banking in Pakistan since 1948 has included been phenomenal. The network of bank branches now covers a very large segment of national economy. In July 1941,west Pakistan had only 81 bank branches; but by December 1977, the number increased appreciably; and there is now one branch of bank of every 5000 heads of population. In July 1948, the total bank credit amount to about Rs.20 corers. During the period of 1971, the number of schedule banks increase from 2 to 17 by end of June 1971 and increase in foreign banks from 7 in 1948 to 20 in 1971,the banks of Pakistan nationalized is in January ,1974 and interest free banking system was introduced in the month of January 1981. The federal government also set up a Pakistan banking council on March 21, 1974 to look after organizational and operational matters including evaluation and progress of nationalized commercial banks.

HISTORY OF UNITED BANK LTD

When Pakistan got independence there were only 487 branches of commercial banks which were further reduced to 195 in 1947. Due to shifting of a number of branches to branches to India of U.K the reserve Bank of India which was made responsible to exercise control over banking sector in both the dominions, did not perform its duties properly in Pakistan. The state bank of Pakistan was established on 1-07-1948. After the establishment of State Bank of Pakistan, banking expansion got momentum but real progress could not be achieved until 1959 when a dynamic banker Mr. Agha hassan abedi conceived the idea of opening a bank different from others. So United Bank Ltd opened first branch in Karachi at November 06, 1959.

United Bank Ltd was established as Public limited company on July 24, 1959. The authorized capital was Rs. 20000000/- issued capital and paid up capital was Rs. 10000000/- divided in to 1000000 sharers of Rs. 10/- each share. The board of directors of United Bank Ltd consists of the following: Board of Directors Name Shaikh Nahayan Mabarak Al Nahayan Sir.Mohammad Anwar Pervez, OBE,HPK Mr. Atif R.Bokhari Mr. Omer Ziad Jaafer AL Askari Mr. Zameer Mohammad Choudrey Mr. Ashfaque Hasan Khan Mr. Muhammad Sami Saeed Mr. Aqeel Ahmed Nasir Mr. Aameer Karachiwalla Designation Chairman Deputy chairman President & CEO Director Director Director Director Company Secretary & Chief Legel SEVP/Group Chief Financial Officer

OBJECTIVES OF BANK
Any thing of the world has their own objectives or in other word there is nothing happened without specific objectives, similarly the all bank have their specific objectives for which they established. The following are the main objectives of UBL. 1. TO MAXIMIZE PROFIT: 2. TO MAXIMIZE DEPOSITS: 3. ECONOMIC DEVELOPMENT: 4. TO SERVE THE SOCIETY: 5. TO MINIMIZE EXPENDITURE:

6. PROVIDE FACILITIES TO STAFF AND UTILIZATION OF STAFF: Details of the above objectives are as follows;

1.

TO MAXIMIZE PROFITS:
The first and basic objective of UBL is to earn more and more profit by providing

loan to Various individuals and financial institutions and by performing other utility function for public.

2.

TO MAXIMIZE DEPOSITS:
The main and major source of the bank project is the interest on loans, which is

contributed and collected from the public by providing them tow rate of interest and inuests such capital in various business at high rate of interest. Greater the deposits of bank the greater will be the profit.

3.

ECONOMIC DEVELOPMENT:
UBL provide loan to various industries and other financial instructions. In the

way the UBL play a an important role in the economic development of our country.

4.

TO SERVE THE SOCIETY:

It is another objective of UBL to serve the society by providing various utility

functions to the public.

5.

TO MINIMIZE EXPENDITURE:
Bank always tries to minimize it expenditure so it holds strict control over

wastage of money at every stage. The branch expenditure must not increase more than 20% of last years budget for correspondence.

6.

PROVIDE FACILITIES TO STAFF AND UTILIZATION OF STAFF:

The bank gives best possible facilities to the working staff and at the same time the bank utilize the staff most effectively.

RESEARCH METHODOLOGY
The methodology that I adopted for this research is based on both the primary as well as secondary data. The source of primary data were: 1. 2. Formally arranged interview with management, director, etc. Personal observations.

The source of secondary data were: 1. 1. 1. 1. Annual reports. Over-view of United Bank Ltd. News papers. Relevant books. During the research project, I observed that enough written material regarding the bank is not available so I had count on my personal observation and interviews with directors. I had spent two months in the central branch and collected information from discussion and interviews with directors. As most of the data of this report is primary besides I availed assistance from few books of management and administration. While my secondary data is consists of information from reverent newspapers.

ORGANIZATIONAL STRUCTURE OF UNITED BANK LTD

As stated before United Bank Ltd is managed by board of directors consisting of directors including one president, 4 directors are from United Bank Ltd, one from Pakistan banking council, one from ministry of finance, and an additional one who is secretary of the board hence the board of directors is an eight member team which manages the overall operation of the bank. The executive committee consists of seven members, which are working under the board of directors. These members are senior executive Vice president (SEVP) the

other twenty divisions have their own heads who are Senior Vice president (EVP). The twenty-eight United Bank Ltd located in ten different countries is usually managed by SEVP of international division. United Bank Ltd has established is presence all over the country, every province has provincial chief usually an SEVP who over looks the operation in that particular province. The General Managers who is wording under the provincial chief are responsible for incharge of various provincial departments. Below the GM are the Circle Executives who are SVP, VP. Circle Executives are incharge of geographic circle. In each circle there are numbers of zone such as Multan Cant zone and Multan City zone. Every zone is controlled by zonal head who either VP or AVP. In each zone there are numbers of bank branches which are managed by branch managers who are Grade I or II officers there are numbers of graded officers and non graded employees. In the United Bank Ltd organization the employees are promoted to higher ranks the order of seniority is as follows: 1. 1. 1. 1. 1. 1. 1. 1. 1. 1. President Senior Executive vice president Executive vice president Senior vice president Vice president Assistant vice president Grade I Grade II Grade III Grade IV

ORGANIZAITON HIERARCHY

Foreign Branches
1. 1. 1. 1. 1. 1. 1. 1. 1. Bahrain Zonal Officer & Branches Qatar Zonal Office & Doha Branches United Arab Emirates (UAE) zonal office & Branches United Kingdom zonal office & Branches. United states of America, New York Branch. Yemen Arab Republic, Branches. Representative offices (Egypt & Iran) Subsidiary, Switzer Land (UBL AG Uurich) Joint venture, Oman United & change Co. UC Musat.

Export proceeding zone (Under international Division H.Q Karachi )

O R G A IZ A T IO N A L S E T U P
P R E S ID E N T
S E N IO R E X E C U T IV E V IC E P R E S ID E N T E X E C U T IV E V IC E P R E S ID E N T S E N IO R V IC E P R E S ID E N T
V IC E P R E S ID E N T A S S IS T A N T V IC E P R E S ID E N T GRADE I G R A D E II G R A D E III C L E R IC A L S T A F F N O N C L E R IC A L S T A F F
12)

11.

HIERARCHY OF UBL (Branch Staff)

FUNCTION OF BANKS
There are three principle functions, which UBL performs.

A)

I. RECEIVING DEPOSITS
This function is important because bank mainly depends on the funds deposited by

the public, deposit are of three kinds.

1.

Current or demand deposits In this type of deposit the bank pay no interest, these can be withdraw in part of in full at any time by issued a cheque.

2.

Fix or time deposit These are left with the bank for a certain fix period before the expiry of which no one can be withdraw except prior notice on such deposit the bank pay higher interest.

Saving deposit The main objective of saving deposit is to encourage saving amount, people of small income like, children, and married and household women those can deposit only a very small amount at a time.

II.

ADVANCED LOAN
The bank make profit by advancing loans, the banks deals in the money deposit

by other people. It has therefore to keep cash to meet the depositor demands. Bank always take great care in the matter of lending and keeping reserve. The bank always to keep a fine balance between liquidity and profitability. If it tries to make too much profit, it may not be able to meet the depositary demand. Bank always creates deposit and make deposited with it. After analyzing that purpose for which loan is required economically sound the customer account.

III.

DISCOUNTING BILLS
Discounting of bills in short is lending of money for short periods of ran

enhancement of bills. A trade for instance how does not wish to lockup large funks in trade credits, draw a bill of exchange of his debater, he gets it discounted by his banker.

This gives the trader immediate possession of the money due for discounted bill less deduction for loss of interest and for three month, and when these become nature, the bank earn a profit in addition of facilitating trade. If worst happens these are rediscounted at the central banks. The banker regards discounting of bill as very well.

IV.

OTHER SERVICES
The bank performs a number of other services for clients. It helps in transfer of

funds from one place to another and from one person to another by the use of cheques. They also supply information an advice to their clients of matters relating to investment. In addition they perform miscellaneous services like taking charges of valuable securities, acting as agents trustee of behalf of account holders and rent, insurance premium etc. UBL always intend its services of its clients.

DISCIPLINES OF BANKING SYSTEM

he major function of the bank called bills and receives money for its customers account. This description covers only a very limited aspect of banking; modern banking companies perform more function all over the world: i.e. 1 1 1 1 2 2 2 2 1 1 One borrowing and lending of money. Collecting negotiable instruments on behalf of customer. Discounting bills of exchange and other negotiable instruments. Receiving valuable items for safe custody. Seal with in foreign exchange. Granting of letters of credit to the customers. Underwriting and dealing in stocks, shares debenture and other securities on behalf of customer under taking and executing trust. Acting as agent to his customer under taking and executing trust. Carrying on guaranties and indemnities positions. Dealing with any property that may come to it as security in satisfaction of its outstanding claims.

CUSTOMERS
A person become customer of a bank when he goes to bank with money or a claque and ask to have an account open in his name and the bank accepted the money or cheque and open an account in the name of that person after that entitled to be called customer of bank. According to he current banking practice only those persons are said to the customer who maintain a regular bank account, without considering the duration and frequency of operation of account.

QUALIFICATION OF A CUSTOMER
I. He should not be minor and must have attained the age of majority because a

minor is not competent of contract. Therefore a contract entered in to by a minor is of no effect. I. I. He should be a person of a sound mind, if not so, he is incompetent or contract. He should not have been departed from entering in to any contract under any law.

RIGHTS AND DUTIES OF CUSTOMER TOWARDS THE BANKER

RIGHT:
The customer has the following universally accepted rights. A. A. A. To draw cheque against his credit balance, or in the absence of credit balance when there are arrangement for accommodation make with the banker earlier. To receive a copy or his account with the banker, in case he find any over crediting or over debiting, he has right to get it corrected. To pay the bank for the case losses and damage when his cheque is wrongfully dishonored. Claims various types of deposit and four plains functioning.

DUTIES:
The customer has following duties toward his banker. A. A. A. The customer must represent the cheque for payment collection with in the business hours of his bank. The customers should see that the cheques and other instruments are presented for payment within a reasonable time for the date of their issue. He should keep his cheque book under lock and key so that no authorizes parson gets access to it. Customer fail in his duty, he is to be held responsible for his negligence in living his cheques unprotected. A. He should draw cheques very carefully and in such a way that thee is no room left for any fraudulent alternation and additions if he draw cheque in a manner with

facility fraud, he will be responsible to the banker for any loss suffered by the banker.

THE BANKERS DUTY FOR SECURITY

Banker have a right to charge for the services that provide to their customer the right is backed by an express agreement with the customer conspiring the charging of a commission telegram expenses etc, from customer has been paying these charges.

1.

UNDER THE COMPULSION OF LAW A Banker may be asked to give evidence in court of law. A court order be served

to the banker before a competent court desires inspection of the books. 2 DUTY TO PUBLIC TO DISCLOSE Some time it becomes the bankers duty to disclose the nature and operation of the account maintained by his customer during national emergencies, banker may make suitable disclosures about the unsatisfactory and use precious nature and operation of customer account, but the bank should make him very sure before venturing on such disclosure. 3. IN THE INTEREST OF BANK Some time the banker uses their customer to recover the amount due in his loan or over draft accounts. In such case the banker may have to disclose some aspects of the customers account. It is also possible that some times the banker may have to disclose the nature of account in order to define against the charges brought him. IV. EXPRESS OF IMPLIED CONSENT CUSTOMER A Customer may give standing instruction to banker to supply certain information about his account for the preparation of valance sheet or send periodic statement of account to some professional adviser for a certain of time.

While answering requires on telephone the banker have to be very careful, he should not under any circumstances pass any information about his customer account to any unauthorized person. V. COMMON COURTESY TO OTHER BANKERS Besides there usual occasions bankers have an established practice of giving confidential opinion on their customer to fellow banker should not disclosed the actual position of the account of his customer and should confine his opinion only to casual expression like fair, good satisfactory act. At the same time, the information should be carefully worded, and it should not be signed.

BANKING INSTRUMENTS
CHEQUE:
Cheque may be defined: As a written order of a deposit upon a bank to pay to or to the order of a designated party or to bearer, a specified sum of money on demand. In other words: It is an unconditional order in writing drawn on a specified banker signed by the drawer requiring the banker to pay on demand a sum of certain in money to or to the order of a specified person or to the bearer and which does not order any act to be done in additional to the payment of money.

CHARACTERISTICS OF CHEQUE
The main characteristics of a cheque are as follow. (i) (i) (i) (i) (i) (i) (i) (i) It should be unconditional. It should be drawn on a specific banker. A cheque is payable only on demand all this demand can be lodged during a reasonable period which is present in Pakistan is 6 month. From the date of its issue after this period a cheque becomes stale. The cheque must be containing the order for the payment of a certain sum of money. It should be in writing oral order cannot be treated as cheques. The cheque should be payable to or to the order of a certain person or bearer of instrument. The person who draws the cheque is called drawer and the person to whom payment is to be made is called payee.

PARTIES OF CHEQUE
The normal CHEAQUE is one in which there is a drawer, drawer banker and payee or to payee but there are the following three parties.

1. The Drawer
The person who draws the cheque is called drawer. He must be an account holder. In order to make the instrument a valid cheque the drawer must be Sign it exactly in accordance with the specimen signature supplied to the bank before hand.

2. The Drawer:
The Bank on which the cheque is drawn is called drawer. With whom the drawer maintains an account so as to constitute the customer.

3. The Payee
The person to whom payment is to be made is called payee.

TYPE OF CHEQUE
Bank in Pakistan deal with only two types of cheque. i. ii. Open cheque: Crossed Cheque.

1.

Bearer Cheques
Bearer cheque is one on which the phrase or bearer is written after the name of the

payee. It is payable, to the bearer, holder or possessor, i.e. any one who present it to the

Bank. The Bank is under No liability to as certain that the payment is made to the right person.

2.

Order cheque
Order cheque is made payable to a certain person or order. It is a cheque on which

the phrase or order is written after the name of the payee. If a cheque is made payable to ascertain person without the addition of the word bearer or order. That to it is regarded as an order cheque. It can be transferred only by endorsement and delivery.

3.

Crossed Cheque
When two parallel lines are drawn across two face of the cheque, it is said to be a

crossed cheque. A crossed cheque cannot be encased at the counter but can be collected only by a bank from the drawee bank. Crossing may be general or special. 1

GENERAL CROSSING:
A general crossing is one where two transverse parallel drawn across the face of

cheque with or with out the words & Co etc. The effect of general crossing is that the holder cannot en cash it him self at the counter of the bank. He/she deposits cheque with bank which obtains cash for it, from the drawee bank. In this way chances of fraud are minimized. 2

SPECIAL CROSSING:
A special crossing is one, which contains the name of the bank between the two

parallel drawn across the face of the cheque. The effect of a special crossing is that the payment of the cheque can be obtained only through that particular bank whose name appears in the crossing.

NOT NEGOTIABLE:
When the word Not Negotiable are written between the two lines drawn on the

face of a cheque it has a special significance. It does not mean that the cheque cannot transfer. It simply means that the transfer can on no account acquire a better title to the

document than his transferor. If the title of the transferor is bad, the title of the transferor will automatically be bad.

ACCOUNT PAYEE ONLY:

The writing of these words between the two parallel lines in a direction to the

collecting banker to collect the cheque and to place the amount to the credit of the payee only. This gives great safety.

PAYMENTS OF CHEQUES
Payment can be effected by cheques, draft, pay order pay slips, vouchers etc. the Bandar to whom the order to pay a cheque is addressed is called the paying banker. It is a contractual obligation of a banker to honor his customer cheques of the following essentials are fulfilled. 1. CHEQUE SHOULD BE IN PROPER FORM: In Pakistan the customers use printed cheques supplied to them by banker. The banker must see that the customer of holder has not change the from of cheque and made it conditional one. If so the should return. 2. CHEQUE SHOULD NOT BE CROSSED: A crossed cheque can not be honored over the counter to any person if the paying banker honors a cross cheque contrary to crossing, the true owner is required the banner to pay him such damages as he might have sustained by the banker action. 3. CHEQUE SHOULD DRAWN ON THE PARTICULAR : The payment of cheque is made only the branch of the bank particularly mentioned on the cheque where the customer is maintaining his account. If the arrangement have been made at a branch other than on where he maintained his account.

4.

CHEQUE SHOULD BE MUTILATED: When a cheque is torn, worn out or does not five sufficient evidence of the

customers intention, it is called a mutilated cheque. The banker should see that the cheque presented for encasement is not mutilated, however mutilated by accident may be accident may be excused if the drawer declare about the fact. 5. UNAUTHORIZED MATERIAL ALTERATION: Material alteration in relation to a promissory note, bill of exchange or cheque includes any alteration of the date sum payable, the time of payment, the palace of payment and where such instrument has been accepted generally, the addition of a payment without the acceptors consent. A banker must not pay a cheque bearing apparent material attentions not authorized by the drawer under his full normal signature, specimen of which has been supplied to the banker before hand. 6. FUND MUST BE SUFFICIENT AND AVALABLE: The bankers see that there are sufficient funds available in customers account to permit the honoring of the cheque presented. 7. THE CHEQUE SHOULD NOT POST DATED OR STALE: The cheque is out of date when it is post dated or stale, post dated cheques are those which are presented for payment before the due date. If banker pay a post dated cheque earlier then the due dates. He loses the protection granted by the law, and shall have to bear loss that may arise out of his action. 8. CHEQUE SHOULD BE PRESENTED DURING BANKING HOURS: The banker must honor cheques presented if these are presented on the working days and during the working hours. In Pakistan banking hours are fixed established by the state bank of Pakistan and cheques are notified through all reliable public media for the in formation of all concern. 9. NOT LEGAL BAR PROHIBITING PAYMENT:

The banker should see that none following clauses is applicable on the cheque presented for payment. i. ii. iii. iv. Payment stopped by the drawer through a notice in writing. Knowledge of any detects in the title of the person who is presenting the cheque for payment. Notice of insolvency or death of the customer or in case of company notice of its winding up received by the banker. Notice of an assignment of the available credit balance in the account by the customer. v. Knowledge that the customer contemplates a branch of trust of an act of insolvency.

BANKERS AUTHORITY TO TERMINATE THE PAYMENT OF CHEQUE / DISHONOUR OF CHEQUE:

1. Countermand of Payment:The drawer of a cheque can stop the payment of a cheque by informing the banker either on telephone or through a special message or in writing if the information has been communicated orally or by Algeria. The bank will immediately take action and suspend payment pending confirmation in writing the banker will mark on the cheque orders not by pay. 2. Not sufficient Fund:The banker can refuse to make the payment of customers cheque if his balance is

not sufficient to cover the cheque. 3. Cheque is not an Assignment of Funds:A holder of a cheque cannot as the banker to earmark the credit balance of the drawer in his favour. It the customers balance is sufficient to cover the cheque, the payment will be made. The cheque will be dishonored if the balance available for drawing the cheque is not sufficient. The holder of the cheque cannot either have equitable claim against the drawer/banker. 4. Payment in due Course: The banker will refuse to make the payment of a cheque if (a) it is not in accordance with the drawers instruction and (b) is also presented after banking hours or is not in the ordinary course of business. 5. Account Closes: If the drawer has closed his account, the bank will dishonor the cheque presented on the bank. 6. Forgery of the Drawers Signature: If the banker is doubtful of the drawers signature or in the alteration of the amount, the bank can refuse to make the payment. 7. Notice of Customers Death: The banker will terminate the payment of a cheque if he receives the notice of the customers death. 8. Marking of a receiving Order: If the court is satisfied that the customer appears to be insolvent, it will immediately issue a receiving order. The bank will refuse to make payment on the advertisement of receiving of its customers in the news-paper or on direct intimation from the court. 9. Instruments other than Cheque: The banker can refuse to honor the instruments, which are not intended to operate as a cheque. 10. Particular Branch:

The bank will refuse to make the payment of a cheque if it is presented in a branch or office other than at which the customer has his own account. 11. Mutilated Cheque: If a cheque is mutilated, torn of cancelled, the bank will refuse to debit the account of the customer. The payment on the torn cheque can however, be made if it is confirmed from the drawer or from the payees banker. 12. Irregular Endorsement: If the endorsement on the cheque is irregular, the bank will not make the payment on the cheque presented to it. 13. Receipt of notice of Insanity: If the bank comes to know of a particular customer has become insane or is of unsound mind and the bank is satisfied that his customer is unable to act rationally, the authority of the bank to act as agent will then cease. If the bank receives the lambency order from the court, the cheque will be returned with the remark, Refer to drawer. 14. Post-Dated or Stale Cheque: If the cheque is post dated or stale, the bank will not honor the cheque.

15.

Partnership: In case of a partnership firm, every partner can open an account in his name. But

the banker would not allow until and unless all the partners, giving the manner of operation, sign it. The death or retirement of a partner dissolves the partnership and bank should not allow an operation on such an account.

ENDORSEMENT
When a holder of a negotiable instrument signs the same or other than a such maker, for the purpose of negotiation, on the back or face there of or on slip of paper annexed to, or so signs for the same purpose a stamped paper intended to be completed as a negotiable instrument, he is said to endorse the same, and is called endorser.

TYPES OF ENDORSEMENT There are five main classes of endorsement. 1. IN BLACK AND FULL ENDORSEMENT If the endorser signs his name only the endorsement is said to be in blank in blank and if he adds direction to pay the amount mentioned in the instrument to, then endorsement is said in full. 2. RESTRICTIVE ENDORSEMENT This is an endorsement which prohibits further negotiation of the instrument of example if a cheque is endorse pay x only, or pay x for the account of y etc. 3. PARTIAL ENDORSEMTNT This is as endorsement which purpose is to transfer to the endorsee only part of the amount payable on a cheque a Bill of Exchange etc. 4. CONDITIONAL ENDORSEMENT It is endorsement, which makes the transfer of the instrument from the endorser to the endorsee after the fulfillment of stated conditions. 5. SANS RECOURSE ENDORSEMENT When an endorser want to exclude his liability to the endorse of subsequent holder he indicates it clearly in the instrument by writing the words sans recourse or without recourse.

OTHER BANKING INSTRUMENTS

Following the detail of each is given various banking instruments as under. 1 PROMISSORY NOTE

Promissory is as instrument in writing containing an unconditional under taking signed by the banker, to pay in demand of at a fixed of determinate future time, a certain sum of money only to or to the order of certain person of to the bears of instrument. 2 BANK NOTE The right to issue bank notes in Pakistan has been given to the State Bank of Pakistan. The bank have sole right to issue bank note made payable to bearer on demand in Pakistan, in accordance with the provision have in after made, provident that the currency note of government of Pakistan supplied to the bank by the government issued by it for period which is fixed by central government. 3 POSTAL ORDER These are not cheques, because these are drawn by a post office on the postmaster of another post office. They are marked not negotiable and no body use entitled to receive the amount of the order if they are lost or stolen. 4 DIVIDEND WARRANTS It is draft issue by a company, directing its banker to pay to a named member of the company his share of the divisible profit. They must be signed the person to whom they are made payable the dividend warrants are treated as cheques, however if they are paid direct to the banker discharge is not required on them and relatives counter foils should be sent to the holders of these shares. 5 DRAWN BONDS These are bonds redeemable by drawing at a named prize on the number of bonds drawn being advertised in certain newspaper. The customer often leaves the bonds with their banker for draws for example prize bond. 6 TRAVELERS CHEQUE They are issued for the convenience of person traveling abroad, but there are also issued in Pakistan currency by some Pakistani banks for use with in the country. Before issuing the banker receive an amount equal to the value of the cheque and also charge a small commission.

VARIOUS DEPARTMENT FUNCTION

AND

THEIR

BL like other commercial Banks established various departments for the performance of various functions. We will highlight the various functions Performed by the difference departments in the UBL. The bank usually receives deposits in the following types of accounts. These are: 1. Current Account Saving Deposit Account Fixed Deposits or Time Deposits Current Deposits

This type of deposit is withdrawal by cheque whenever the customer draws a cheque on his account. As such his deposits are also termed as demand deposit. In Pakistan, Bank does not allow any interest on such deposits. And the bank treats these as current liabilities. The banker also requires the customer to maintain a minimum amount of balance. If the customer fails to do so, then the bank makes deduction from such account under the heading of Incidental charges. Until a few decades back, the proportion of current deposits in relation to fixed deposits was very small. In recent years, however the position has changed remarkably. 2. Saving Deposit Account In Pakistan a saving Deposit Account can open with a small amount of money, and the depositor is issued a cheque book for withdrawal. Return is paid at a flexible rate calculated on Six Months basis. However, withdrawal of limited amount are generally allowed only twice in a week. The customer have to give a notice of about two weeks before the withdrawal of large amount. Such account may be maintain and run by an Individual, Partners and companies as well. The most important characteristic of this type of deposit is that it can be opened with a very nominal amount of money. 3. Fixed Or Time Deposits Those deposits which are payable to the customer after expiry of a certain duration. The duration for fixed deposits varies from three months to six months. The banks offer

different rates of return on the fixed deposits depending upon the duration of the deposit. The amount is received back after the expiry of the fixed period. One of the most important aspects of term deposit for the bank is that the money of these deposits can be invested in areas where the banks consider profitable. This type of Deposit is also known as single transaction account. It is because the account holder cannot operate the account like other accounts. The banker usually gives a receipt of the Fixed Deposit mentioning the amount of money and date of maturity of the deposit. No pay-in-slip book, Passbook or cheque book is issued to the customer.

ADVANCE DEPARTMENT
Besides deposits the other major function of the bank is to advance money to the clients. This function of the bank contributes great deal to the revenues of the bank. Due to its importance for the bankers success, this area is given special importance and attention. The bank also makes advances to small size businesses and construction companies etc. Many UBL branches are having department for granting advances to the borrowers. Normally, it is responsible for performing the following functions: 0* To handle all the cases of short and long term loans. 1* To process all the cases concerned. 2* To forward the cases for approval and consideration to the higher authorities. 3* Direct dealing with the borrowers. 4* To ensure the disbursement of loan. 5* To inform the high authorities about various loans. UBL make advances in the following ways: 1. By Cash Credit Through this credit facility, the bankers advances loan to the borrower after having tangible asset as a security. Main characteristics of this facility is that the total amount is not given to the borrower at one rather it is given in installments, or whenever required. The borrower has to pay the interest only on the amount outstanding against

him. This credit facility is very liked by large commercial and industrial enterprises. The cash credit facility is given through hypothecation or pledging of goods. Some requirements in hypothecation: 6* Custody of stock remains with the borrower. 7* Banks lien on the stock. 8* Stock hypothecated must be insured against fire etc. 9* Customer must submit the stock report on monthly basis. 10* Frequent stock verification to be done by UBL. Some characteristics of pledging assets against loan. 12* 13* 14* 15* 2. Stocks are pledged with the bank under banks lock and key. Stock must be duly insured against fire and burglary. On monthly basis stock report has to be prepared by the borrower duly incorporating delivery of goods, If any during the months. Delivery of Goods / stock is made against cash payments. By Over Draft Some time it happens that a regular customer may ask for a very short period credit. The bank accommodates such customers through the facility of over-drafting. In this facility may be given without any security or is provided against some collateral. It might be a temporary facility or an over-draft-limit may be sanctioned to the customer, which may be used again and again during a certain period of time. 3. By Discounting Bills Of Exchange This credit is a very advanced form of advancing money / credit to the borrower. It is also termed as factoring. In this facility the bank purchases the bills of exchange from the borrower. The bank gives face value of the bill to the borrower after deducting interest on the remaining period required for the bill to mature. 11*Bank may send officers or staff in order to supervise verification.

ACCOUNTS DEPARTMENT
5 Accounts Dealings The accounts department of UBL deals in the account of customer maintained at

the bank. The accounting book maintained for this service is known as cashbook. The summary book and ledger are maintained through computer. The cashbook is used for balancing the cash received and cash paid at the end of the day. 6 Kinds Of Accounts The following types of accounts may be opened with UBL: Current Account Saving Account Fixed Account 1. Current Account : The most important character of this account is that there is no restriction on the withdrawal of money. In Pakistan, Bank do not allow any interest on such deposits. And the bank treats these as current liabilities. The banker also requires the customer to maintain a minimum amount of Rs. 10,000. If the customer fails to do so, then the bank makes deduction from such account under the heading of Incidental charges. Cheques withdraw this type of deposit whenever the customer draws a cheque on his account. This account is also called demand deposit. This type of account may further classified as follows: I. Individual Account : Individual account is maintained and run by that one person in whose name the account was opened. Individual accounts may be opened by an illiterate person, woman and minor. II. Joint Account: These are the accounts of two or more persons who are neither partners not trustees. The account is operated singly or jointly depending upon the operating instructions given on the account opening form. The most common example of joint account is that of husband and wife. III. Proprietorship Account : If a business is owned by one person and the business is not organized under state or federal laws, then this business is called a single proprietorship, or sole proprietorship. IV. Partnership Account:

Partnership is the relationship between persons who have agreed to share the profit of the business carried on by all or any of them acting for all. When the business is owned by two or more persons and is not organized as a separate legal entity, it is called a partnership. A banker should always open a firms account in the firms name. For opening of such account the bank usually require the following information and documents: 1 1 1 1 1 Account opening form signed by all the partners. Nature of the business. Name and addresses of all the partners. Name of those authorized for operating the firms account. Partnership letter signed by all the partners. Although it is difficult task but the above details can be verified from the office of the Registrar or from the Registered Partnership deed. All mandates and authorities are automatically revoked by any change in the constitution of the firm. bankruptcy of partner, retirement of old partner then introduce new partner. V. Private Limited Companys Account: A Private limited company is a company where the right to transfer the shares of its member is restricted and public subscription in the shares of the company is prohibited under its Articles. The accounts of such companies are termed as companys accounts. For opening and running of such accounts the bankers asks for the certified copies of the following documents. 1 1 1 1 VI. Article and Memorandum of association Certificate of Incorporation Resolution of Board of directors List of directors Public Limited Companys Account: A Public Limited Co. is a company where the right to transfer the shares of its member is not restricted and public subscription in the shares of the company is not prohibited under its Article. In case of such Co. The bankers asks for not only the above mentioned documents but also for Certificate Of Commencement of business. One very important aspect of running these accounts is the power of attorney. The power of By death or

attorney deed is a legal authority granted by the Board of Directors of the Co. to company to a person or persons who can operate the account. 2. Saving Account In Pakistan a saving account can be opened with a very small amount of money, and the depositor is issued a cheque book for with drawals. Return is paid at a flexible rate calculated on by yearly bases. However, with drawls of limited amount are generally allowed only twice in a week. The customer has to give a notice of about two weeks before the withdrawal of large amount. The minimum amount of money required for opening such account is Rs. 2000/- while to remain the account in running position the account holder has to maintain a balance of Rs. 10,000. Such account can be maintained and run by an individual, partners and companies as well. 3. Fixed Account The Deposits that can be withdrawn after a specified period of time are referred to as Fixed or Term Deposits. The A/C holder keeps a specified amount of money for a definite period of time. The amount deposited is not with draw able by cheques. After the maturity of the A/c the account holder receives the actual money along with return at previously agreed rate of return. Such account can be maintained and run by an individual, partners and companies as well. The period for these deposits are kept by the bank ordinarily varies from three months to six months in accordance with the agreement made by the customer and the banker.

REMITTANCES DEPARTMENT
1 Remittances Dealings: This department of UBL is concerned with the transfer of money from one place to another. In this department various modes of transferring money are available, which are discussed below. 1. Mail Transfer (MT)

When a customer is interesting in transferring money through mail transfer. The banker asks him first for filling the application form, in which he states that he wants to transfer money to other bank through mail transfer. Now, if the person is the account holder of the bank then the banker debit his account that the amount of money he wants to transfer. The concerned bank officer will prepare the necessary vouchers to make the mail transfer complete. Six copies of the following three forms are: 16* 17* 18* Debit Voucher Credit Voucher Mail Transfer Register But if the person is not an account holder in the initiating branch, then he has, first to deposit the stated money with the same bank and then the above process starts. 2. Telegraph Transfer (TT) This Type of transferring money is used by people who want to transfer money quickly and without delay. This type of transfer is very simple. The person who wants to transfer money fills the TT application form. The applicant is asked to deposit money to be remitted plus the amount of commission and telegraphic charges. After the amount is deposited with the cashier, the officer will prepare the TT messages. The TT message also carries a test number which is a sum of values derived from a number of items like date, amount. The drawee branch number, etc. Then this telegram is sent to the bank where bank makes payment after the test number is correctly decoded according to the procedure prescribed. 3. Demand Draft (DD) In this mode of transferring money the person who wants to remit money goes to the bank and fills the application form. The amount to be remitted is deposited with the cashier along with the commission on DD and the incharge will prepare the instrument. DD is just like a cheque but it is always drawn on another branch of the bank. After DD is prepared it is signed by two officers of the branch and then handed over to the applicant. The amount can be received by presenting DD to the drawee personally or through a bank.

FOREIGN EXCHANGE DEPARTMENT

1 Foreign Exchange Dealings: In today world no country can keep itself self-sufficient in every area of life. So they have to trade with other countries for the things which she does not have. But such business required a medium, which is acceptable to the countries concerned. So they usually do business through the medium of stable currencies of the world. For such International Business Transaction the banks utilize the services of its foreign exchange department. This plays very crucial and important role in International trade. The services which Foreign Exchange Department of the bank offer is the parallel banking with general banking, an additional function of import and export business controlled by State Bank of Pakistan. In UBL its Foreign Exchange Department as per State Bank of Pakistan regulations carries out the International banking. The State Bank of Pakistan exercises full control over the Foreign Exchange Business. No transaction can be considered effective without permission from the State Bank of Pakistan under Foreign Exchange Control Act, 1947. Foreign Exchange Regulations are issued through the Exchange Control Department of the State Bank of Pakistan. Any transaction in the International Banking shall be carried out at rates determined by the State Bank of Pakistan. For this purpose the State Bank of Pakistan fix the rate of US dollar. This is done by formula approved by State Bank of Pakistan and was published daily by Foreign Exchange Rate Committee in Karachi Head Offices. It also makes sure that the rate approved are conveyed to the branches on the same day. Foreign Exchange Department provides the following services to the customer. 19* 20* 21* 22* Foreign Currency Accounts Foreign Exchange Remittance Facility Advances in Foreign Exchange Foreign Currency Accounts: UBL is an authorized commercial bank offer the facility of Foreign Currency Account in 4 Currencies which are U S Dollar, Japanese Yen, German Mark and UK

Pound Sterling. UBLs top management has authorized a few selected branches for dealing in foreign currency accounts. The procedure for opening foreign currency account is similar to opening of local currency account, except that in case of foreigners the bank require photo copy of the applicants passport. The customer may open Foreign Currency A/C. in any of the above mentioned Foreign Currency. Similarly interest on the A/C will also be made in the currency in which the account is maintained. Broadly there are two types of foreign currency accounts. 7 7 I. Current Account Saving Account Current Account Just like local currency current account holder. No interest is given to the Foreign Currency Account holder. Foreign Currency Accounts are also exempted from Zakat, Income Tax and Wealth Tax. II. Saving Account UBL offers a very handsome rate of return on such account. The profit is paid in the currency in which the account in opened. This account also exempted from Zakat, Income Tax and Wealth Tax. Foreign Currency Department of UBL also has a very extensive system for the purchase and sale of Foreign Currencies. U B L deals in the purchase and sale of the following foreign currencies. 23* 24* 25* 26* 27* 28* 29* US DOLLAR UK POUND STERLING JAPANESE YEN GERMAN MARK SAUDI RIYAL UAE DARHAM Foreign Exchange Remittance The currency of one country is legal tender only in the same country and not in other country. So what should the businessmen do while doing International business. To overcome such difficulty the business is done through Foreign Exchanges. So the

importer will need the currency of the Exporting Country. The International Business is carried out by transferring credit from debtors country to the creditor country. Foreign remittances can be done in the following ways: 30* 31* 32* A. Telegraphic Transfer ( TT) Mail Transfer (MT) Foreign Demand Draft (FDD) Advance in Foreign Exchange UBL plays a vital role in facilitating the import and export business of the country. In this respect UBL also gives loans to importer only in the Pakistani currency. The facility of loan is given in the form of running finance to the customer. UBL keeps a vigilant eye on the account holders account that applies for the Foreign Exchange Loan. Now a days Export and Import business is very risky. The importer wants surety of the goods to be delivered to his prescribed destination while exporters want surety of the money to be reached to his prescribed bank. So with a view to overcome such difficulties a system of Letter of Credit is designed and its operation is controlled under the Article of the Uniform customs and practice for documentary credits as adopted by the Council of the International Chamber of Commerce and enforced with effect from January 1983. Various banking companies are involved in the business through L/C. UBL also a very extensive system of business through L/C. The following are the various types of L/C: 33* 34* Irrecoverable Letter of Credit Recoverable Letter of Credit

CLEARANCE DEPARTMENT
35* Clearance House Dealings: It is an association of banks, usually setup in a given locality for the purpose of inter changing credit claims. Nearly, every where this function is performed by the Central Bank of a country. But in cities where there is no branch of central bank, this function is performed by other authorized banks. In Pakistan, the areas where there is no Central Bank branch the function of clearing house is performed by National Bank of

Pakistan. In undertaking the process of interchanging credit the following procedure is adopted. In banking business when a creditor ask for some payment, it is always the cheque through which the payment is asked for, But there arises two situation when the payee asks for payment through cheque. The payee may be account holder in the same bank i.e. of drawer or he may not be the account holder in the same bank. When the payee is an account holder in the same bank, then the cheque is directly transferred from one A/C to other. And the total assets and liabilities of the bank remain the same. But in practice, it is often that the payee has A/C. in some other bank. Then in such cases the payee deposits cheque in his bank drawn on some other bank. The bank with which the cheque is deposited becomes the creditor of the drawers bank. The debtor bank will pay this amount of the cheque by transferring it from cash reserves if there is no offsetting transaction. The Clearance House is the branch of Central Bank of Pakistan or NBP is case of area where no Central Bank branch is available. The representative of each bank meet at fixed time on all business day of week. The messengers of the various commercial banks gathered at the clearance house and transferring cheque payable by other banks while collecting drawn on their banks. A summary sheet is prepared describing the number of cheques received and delivered by a bank at the Clearance Houses. Total of these in and out cheques are collected. Then the difference with a given bank is paid or received from the account maintained at the Central Bank. Normally, the banks maintain two books for Clearinghouse. 1 1 1 Inward Clearing Book Outward Clearing Book

Inward clearing book:

The cheques drawn on the bank presented by bank and other banks for

payment. It includes those cheques and other instruments drawn on central bank branches, which other bank presents to its representatives at the clearing house. 4

Outward clearing book:

Outward clearing means to direct the cheques and other instruments received by account holders of various banks for collection. At UBL once a weak the messenger from main branch collect the outward clearing and deliver outward returns.

FINANCIAL ANALYSIS AND PERFORMANCE

inancial analysis being the most important part of any research, here due care is taken to given the true picture of the Bank. Financial statement such as Balance sheet and income statement has been analyzed to give true and fair current picture of the bank. The bank was very much successful in increasing its assets and deposits while as the same time decreasing its cost through strategies such as rationalization of staff and weeding out unprofitable branches. Looking at the five years growth table and comparative financial statement of 2000-2004 can also see the position of the bank in various areas.

FIVE YEAR PERFORMANCE AT A GLANCE (Rs. In Million)

Particular Authorized Capital Paid-up-Capital Reserve Fund Total Assets Total Deposits Total Income Total Expenditure Operational profit P.L.S Saving Number of Branches Number of Staff 2004 2950 1403 2300 2850 99020 6325 12324 667 27519 1694 15925 2005 2950 1482 3460 101491 106711 7579 11293 714 4170 1643 15615 2006 25000 22482 3832 139510 139510 11492 11359 133 59815 1494 14822 2007 25000 22482 3761 154450 154450 5480 4247 1253 47420 1394 13568 2008 25000 22482 4088 155211 155211 7173 5528 1645 61170 1300 11909

TREND ANALYSIS OF FIVE YEARS

Particular Authorized Capital Paid-up-Capital Reserve Fund Total Assets Total Deposits Total Income Total Expenditure Operational profit P.L.S Saving 2004 100% 100% 150% 76% 100% 70% 103% 136% 95% 2005 100% 100% 166% 88% 107% 72% 114% 144% 90% 2006 847% 1516% 184% 121% 118% 110% 114% 126% 130% 2007 847% 1516% 181% 134% 127% 52% 42% 253% 103% 2008 847% 1516% 196% 135% 129% 68% 55% 332% 133%

UNITED BANK LIMITED COMPARATIVE BALANCE SHEET AS AT DECEMBER 31, 2007 2007
ASSETS Cash and cash reserves Balance with other banks & money at call Investments Advances Net of Provision Taxes Recoverable Deferred Taxation Operating Fixed Assets Other Assets Total AMOUNT 11,65,53 12,010,493 44,953,910 21,361,247 5,411,265 9,101,500 2,811,978 6,789,328 10,2,556,274

2008
AMOUNT 8,129,223 10,995,922 33,101,778 12,955,747 6,380572 8,297,500 2,764,367 11,385,333 94,010,442

2003
LIABILITIES Deposits and other Accounts Borrowings from other banks agents etc. Bills payable Other Liabilities Deferred Liabilities Total AMOUNT 127,133,204 7,329,160 1,508,553, 9,427,031 1,002,297 146,400,245

2008
AMOUNT 128,679,245 4,859,758 1,186,961 10,387,683 1,294,883 146,408,530

2006
NET ASSETS Share Capital Reserve Fund & other Reserves Accumulated Losses Total Share Holders Equity Surplus/ (Deficit) on revaluation of securities Surplus on revaluation of fixed assets AMOUNT 22,481,680 3,761,331 (20,376,649)

2008
AMOUNT 22,481,680 4,087,899 (19,842,975)

6,087,604 (103, 409) 2,179,391 8,802,586

5,866,362 -----------2,183,850 8,050,212

MEMORANDUM ITEMS Bills for collection 12,654,381 8,228,793

Acceptances, endorsements and other obligations 22,259,092

25,415,864

DECLARATION OF RATES OF PROFIT ON PLS DEPOSITS FOR THE HALF YEAR ENDED JANUARY-JUNE, 2004
CATEGORIES OF DEPOSITS PLS SAVINGS ACCOUNTS For Monthly Minimum Balance For Monthly Minimum Balance UNISAVER PLS ACCOUNTS For Monthly Average Balance For Monthly Average Balance For Monthly Average Balance For Monthly Average Balance For Monthly Average Balance For Monthly Average Balance For Monthly Average Balance For Monthly Average Balance UNIZAR RUPEE PLS ACCOUNTS For Monthly Average Balance For Monthly Average Balance SPECIAL NOTIICE DEPOSITS 07 To 29 Days 30 Days and above PLS TERM DEPOSITS 1 Month 3 Month 6 Months %1 Year 2 Years 3 Years 4 Years 5 Years UNI-MAHANA DEPOSITS 05 Months 10 Months 20 Months 30 Months 40 Months 50 Months 60 Months UNI-SONA DEPOSITS UNI-SONA PLUS (18 MONTHS TDR) AMOUNT OF DEPOSITS Up to Rs 10,000 Rs. 10,001 & above Below Rs. 1 Million Rs. 1 Million up to Rs 10 Million Over Rs 10 Million up to Rs. 25 Million Over Rs 25 Million up to Rs 50 Million. Over Rs 50 Million up to Rs 100 Million. Over Rs 100 Million up to Rs 250 Million. Over Rs 250 Million up to Rs 500 Million. Over Rs 500Million. Up to Rs. 10,000 Rs. 10,001 and above RATE 0.00% 4.00% 4.00% 4.50% 6.00% 6.50% 7.00% 7.50% 8.25% 8.75% 0.00% 4.00% 4.00% 5.00% 6.00% 8.00% 8.00% 7.75% 8.00% 7.75% 8.00% 7.75% 8.00% 7.75% 8.00% 7.75% 8.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 9.00% 9.50%

Below Rs. 1 Million Rs. 1 Million and above Below Rs. 1 Million Rs. 1 Million and above Below Rs. 1 Million Rs. 1 Million and above Below Rs. 1 Million Rs. 1 Million and above Below Rs. 1 Million Rs. 1 Million and above

Note: 03 months Term Deposits rate from 01-01-2004

6.50%

SWOT ANALYSIS
uring the two month of internship in UBL central branch Dera Ismail Khan I observed and made discussions with customer and staff of the bank, I have found out some problems and weaknesses in the bank, which can be solved with little efforts which will improve the efficiency of the bank and will enable it to achieve its targets. SWOT consists of four words which stand for Strengths, weaknesses, opportunities and threats, respectively. Through the SWOT Analysis technique one can analyze the present condition and performance of a given organization and can prepares plans for the future. In the SWOT Analysis of UBL the following points can be discussed in brief.

STRENGTHS
Its Strengths are as follows. 36* 37* 38* 39* 40* 41* 42* 43* Having reputation for high customer banking services. Professional and skilled management. Well co-ordinate branch office system. Experienced personnel. Strong loyal customer group. Excellent competitive skills. Sound level of deposits. Excellent promotional and marketing campaigns.

WEAKNESSES
Following are some of its weaknesses. 44* 45* Lack of sound corporate culture. Political inter presence.

46* 47* 48* 49* 50*

Low market value of the banks stock. Bad recovery of over due advances. Un-satisfactory working condition of branches. No availability of sophisticated equipments in branches. In efficient system of recruiting and selecting.

THREATS
51* 52* 53* 54* 55* 56* Increase the number of new local and foreign banks. Low moral of employees. Political interference in the affairs of the bank. Lake of consistence in policies due to Political instability. Low saving rated in the country. Economic recession in the country.

OPPORTUNITIES
1 1 1 1 1 Increase the serving customer group. Enter new markets. Increase product line to serve large range of customers needs. Hiring of well qualified personnel in the work force. Deployment of sophisticated technology in the offices and branches.

This SWOT Analysis is a mirror to the bank o its present condition. From this analysis we can conclude that the bank has done some professional changes in its banking system. The management can develop elaborated strategy planes for capitalization the available opportunities. One area where the bank has done some work is the improvement in customer services. The bank should maintain principle of professional management and adhere the sound and sophisticated banking rules and regulations in order to build confidence of people in the institution.

CONCLUSION
After the establishment of UBL in the year of 1959, the bank was successful in

achieving some of its objectives. In the very first the bank earned a handsome profit. After the exhaustive era of nationalization, the bank is now transforming fearing to private ownership again. The decade of 60,s was dominated by on exceptional increase in economic activities. This result in bringing various changes in the management and structure of the commercial banks. In area of management more professional were brought in and the same was done with the structure. UBL was not an exception to these changes. In the last decade of the century the bank had witnessed very bad banking business. To rebuild the bank new professional people were inducted under the leadership of Mr.Zahoor Soomro. Under this leadership the bank introduced incentive schemes and products such as CARAMMAD, ZARAMMAD and UNI-MAHANA, etc, schemes were introduced. The bank also reshaped the product of rupee travelers cheque (RTC) with a new name of HAMRAH.All these schemes were very successful in stopping the capital flight from the country which was the result of the foreign currency a/cs in May, 1998 after the nuclear detonation. Now the bank is focusing on improving the standard of its services facilities, specially improving its corporate banking and more customer satisfactory culture. All these new and potential improvements are signs of bright future for the UBL. After the conclusion I would like to recommend some points which I think if given due consideration by the UBL management will definitely result in improving the banks image, goodwill and position. Like other companies, for expansion of its business the bank should focus its activities on increasing its stockholders equity. And also the hank should be obliged and fulfill its obligations to its customer, stockholders and public. Some suggestions may be given in order to give right back/objectives. 57* Development and maintenance of congenial work environment for

the bank employees. 58* 59* Achieving more customer satisfaction through quality services. Increasing assets and decreasing expenses through letter

management. 60* Playing more responsible role in the social environment of the

society meaning full filling the social obligations as well.

RECOMMENDATIONS FOR IMPROVEMENT

Nothing in this world is permanent but change. And response to change still needs greater change. All it means that nothing is perfect but there is always some room for improvement. It is always a hard working and some taking activity to make on institution on sound basis and to maintain its performance as steps to improve the performance.

1.

CUSTOMER SERVICES
age of competition. The customer is the king

In the market economy and

customer satisfaction is the road to success. The bank should implement such strategies and facilitates which attracts and satisfy more customer. As most of remittances are sent through informal such remittances. means of Hawala/Hundi. UBL has to play a vital role in mobilizing

2.

PROPER TRAINING OF THE STAFF

Development and change are the two inevitable characteristics of progress. And change has to be there in this process of progress if not then every thing will come to a stand still situation. In such situation only those will survive who accept the change and take measures for adapting to these changes. For imparting various skills and behavior a sound training policy has to be formulated by UBL. The training in under to be more effective should be given by highly qualified and experienced trainer. In the year1998 the bank has given training to its upper and middle management officer, but still a lot of work is required to be done in this connection.

3.

FULL CONTROL AND AUTHORITY

For every organization to run on sound footing it should be given the decision making authority and unnecessary intervention from outside is avoided. For this the

management should be given more authority. But at the same time authority should be taken as commiserating responsibility. The management should be given more authority in decision making in areas of finance, recruitment of staff, posting /promotion. All these decisions should made on merit bank. And such steps should be taken by the upper management.

4.

DISCIPILINE IN FINANCIAL PERFORMANCE

It is an important responsibility of every organization to decrease expenses

and checks are required for the management. All the loopholes must be checked that are incurring expenses in report of vehicles, fuel charges, entertainment, traveling, telephones, medical allowances, foreign benefits etc. The bank will get more if it analyze every activity or cost benefit basis.

5.

PHYSICAL INFRASTRUCTURE

It is said that appearances are often deceptive, but not very much in the fields of service industries. Here first impressions the last time impression. wise saying goes on. Now a-days people judges the worth of an institution from the outward appearance and conditions on the same, so the bank should pay attention to the appearance and apparent condition of its exteriors.

6.

RECOVERY FROM DEFAULTERS

One of the biggest problems of NCB,s is the recovery of the stuck up loans or finances. For this purpose the bank has taken some major steps so that the process of recoveries is accelerated. Total recoveries and restructuring of non-performing loans during the year amounted to Rs.9.4 billion. This amount also includes Rs.3.2 billion in cash recoveries. Provisions for non-performing loans decreased from 57% of total advances18 months ago to 29% as of December 1998. Further achievements this connection will depend upon the following factors. i. State of the economy, as most of the defaulters are raided by other

financial institutions as well at the same time. i. More bold and impartial policies have to be implemented.

i.

More authority should be given to the recovery division.

7.

DELEGATION OF POWERS

The business environment has changed considerably and so is the business mood people/customer wants the satisfaction of their needs at the earliest. For making prompt decision to the middle management. This will facilitate the process of handling transaction with great pace, and resulting in increasing the good image of the bank.

8.

PROFIT HAUNT
Like every business entity, the bank too is always profit conscious. Profit can be

increased either by increasing deposits or by decreasing expenses. As the performance of each branch and department is evaluated mostly on the basis of profitability. And those branches and departments which are incurring consistent losses, and it is

impossible to turn into profit producing units, may be closed.

9.

TRANSPARENT POCICLES AND OBJECTIVES

In todays organization any thing vague will give rise to drastic consequences. So what the bank should do is to develop clear and transparent policies at all levels in the organization. The technique of participate management should be used in order to make objectives more and more achievable and less idealistic. This will also raise the moral confidence of the employees as they will be working for achieving objectives formulated for and by themselves. The transparent policies will also make clear the authority and responsibilities of position. And this will give more confidence /security to the employees. 12.

INTERODUCTION OF IMPROVED TECHNOLOGIES

Technology plays an important role in this regard. No body can stop the process

of innovations. This process is not limited to any particular branch or area. This is also happening in the field of science and technology. Computer is the out put of such

activities. Application of computer in the field of banking is not a novelty any more. For this purpose if a separate research wing is established, it will greatly benefit the bank. Because this wing will asses new technologies that can be adopted bank. by the

11.

ALLOCATION OF PERFORMANCE TARGETS

Allocation of targets to the staff is a very important area. It is through this allocation and achievements of targets that the performance of staff is evaluated. So to allocate such targets which are achievable will definitely bring good and positive response from the staff. This measure will help the employees and the employer alike.

12.

COMMUNICATHON

Swift communication in any organization is the inevitable need. But reliable, swift and workable communication are of utmost importance to the bank. All the operation of the bank are very much depend on inward and outward communication. And any disturbance in the free flow of information will bring drastic consequences. So to avoid such situation a more swift flow of information is to be maintained. So for the written or oral communication are concerned that 7c,s are desired to be considered in bank.

13.
monitoring

MONITORING OF BANK OPERATION:

without you not be able to take remedial action in due time. For this purpose the

Monitoring of the on going activities is very important. Because

management require data and reports from its branches. But this process of reporting information is placing unnecessary burden on the branches. This burden can be minimized through the application information technology (I.T)i.e. .the application of computer for collecting processing and providing relevant information to the management.

SCHEMES FOR UBL CUSTOMERS

UBL have launched different schemes to serve their customer .These are follows.
Tez Raftaar
UBLs new remittance service, Tez Raftaar offers all overseas Pakistani the fastest and the most convenient delivery of their money to their beneficiaries in Pakistan, Best of all Tez Raftaar is completely cost free and is available at all UBL branches along the banks net work in the middle East UK and US. 1 Fastest delivery to your given address in Pakistan. 1 Doorstep delivery by authorized courier or credited to the recipients account. 1 Free charge transfer service.

Money Gram
The money Gram, money transfer service was started in1988 by integrated payment service as a US based division of 1st data corporation (FDC)a data processing company. At that time, American express owned FDC. In 1996 Money Gram payment system Inc, was floated on the New York Stock Exchange. Money Gram payment system is based in Denver USA. There is call center located there, in handles transactions for all non authorized agents and answer queries from customer on a 24 hour hotline. Money Gram has world wide agent base of over 29000 agents, which allows customer to transfer fund around the world within minutes in over 130 countries, The Money Gram service will enable our customer to send and receive funds in 10 minutes. Money Gram is a 10 minute person to person money transfer service, which is quickly and reliable and allows customers to send money world wide.

UBL HAMRAH
UBL has always been at the forefront in identifying and meeting the financial needs of its valued customers. UBL was the pioneer in introducing Rupees Cheque facility in Pakistan as early as 1971.In continuation of the same tradition, UBL in the shape of Hamrah Rupees Travels Cheque enhances this facility for the convenience and security be it business, properly, trade or personal needs .Hamrah Rupees Traveler cheque are the ideal and fastest way of caring cash when traveling cash when traveling anywhere in Pakistan. Hamrah RTCs are now accepted at more then 2000 places such as hotels, real estate agents, jewelers etc and force at all our UBL branches. UBL has a24 hours customer service help line providing its customer with round the clock tele-varification of HAMRAH travelers cheque.

United Money Fund(UMF)

All major banks in the developed world and developing countries have their own money market mutual funds and are sold through their own branches. Amerca alone has money market funds worth over US$ 2.2 trillion accounting for a third of all US cash deposits from retail and institutional investment and the business volume virtually doubles every year .European money market fund providers are experiencing exponential growth in demand and currently stand at $ 92 billion. The phenomenal success of money market fund is not difficult to comprehend. Therere good reasons why money following into money market funds; they are risk optimized, suit the investment objectives of a wide variety of investors and are ideal for short term cash investment.

Online service
Through a growing network of more than 200 online branches in 71 cities, access your account from anywhere ;service like cash withdrawal, payment, deposit, stop payment An acquisition of account statement can be conveniently availed from any of our online branches across the country 9-5 non stop full banking you can avail complete banking services non stop from 9 am to 5 pm ; Century wide instant Cheque clearance; With online banking without any hassel. On the spot fund transfer Account to account transfer of fund is now a matter of minutes trough UBL,s online banking services. Other benefits 1 1 1 1 Free demand draft, pay order, TT and numerous other banking services. No restrictions on the number of with drawals and deposits. Free ATM cards allow you to withdraw cash from more then 270 ATM,s any time. State of the art interment banking service. services, you can get your Cheques cleared instantly,

Business Partner

Business partner is a current account that especially create to the need of business man by offering the convenience and accessibility of online banking a cross the country. Following are some of especial features of UBL business partner. Though a growing network of more then 200 online branches in 71 cities ,access your account from any where service like cash withdrawal ,payment, deposit ,stop payment and acquisition of account state mint can be continently available availed from any of our online branches across the country. 9-5 non-stop full banking; You can avail complete banking service non-stop from 9 to 5 pm .countrywide instant cheque clearance. With online banking service, you can get your cheque cleared instantly, without any hassle. On the spot funds transfer; Account to account transfer of funds is now a matter of minutes through the UBL,s online banking service.

BENEFITS
1 free demand, pay order, TT and numerous other banking services. 2 2 2 No restrictions on the number of withdrawals and deposits. Free ATM cards allow you. State of the art interment banking service.

UBL MONEY-PERSONAL LOAN

This scheme is launched on 2nd June, 2005. It is loan facility which offers instant cash ranging from rs, 50000/- to maximum of is 500,000/- with out any collateral based on a fixed repayment term to be selected by the customer. The tenure options are 1-5 years. This facility has been launched in six major cities that include Karachi, Hyderabad, Lahore, Faisalabad, Rawalpindi, Islamabad and Peshawar.

FEATURES
1.he flexible repayment Tenure option in six months multiples that the customer can choose while selecting the tenure .i.e. .a customer can select 1 year 1.5 years to 2 years,2.5 years and so on

2. Another unique feature is the Zero-prepayment penalty. The customer can repay the loan after the minimum 1-year term without having to pay any penalty. 3. With complimentary credit insurance, the customer or his family need not worry about the repayment of the loan. 4. The customer can choose to get a pay order or get the funds simply credited to an existing UBL count. 5. The documentation for UBL money is very simple and hassle free. 6. The facility enable the customer to realize their dreams and the manage their financial requirements without any hassle. 7. The customer can also avail balance transfer facility (BTF) option and pay off expensive loans at lower rates making life easier and worry free.

UBL WIZisthe1st prepaid VISA Debit card in Pakistan

WIZ is available instantly at selected UBL branches with the facility of reload, allowing you to spend online and at shopping outlets and withdraw cash from ATM,s. With the power and association of VISA, your WIZ card is acceptable at all VISA locations and ATM,s locally and internationally.

Available to all CNIC holder

All veiled CNIC holders in Pakistan can own a UBL WIZ prepaid VISA Debit card. An individual can purchase up to tree cards at a time on his/her CNIC-one of each category, i.e. .a person can have single UBL WIZ ladies, UBL WIZ Teen and UBL WIZ Travelers card at a time

UBLWIZ-

your ATM card

UBL has its own network of 336 ATMs in 85cities!Moreover,UBL is also part of the 1 link ,MNET and VISA network allowing you to access more then 2 million ATMs in 150 countries.

UBL WIZ-your debit card

With UBL WIZ you can shop all your want, eat all you can or fill up your car tank with out carrying cash. Simply use your UBL WIZ to conduct a transaction at any outlet in Pakistan that displays the VISA or ORIX logo. You can also shop internationally at all outlets that display the VISA logo. So just shop, swipe and sign your way to shopping power.

UBL WIZ-a precious Gift

Gift a UBL WIZ prepaid card to family and friends! Simply purchase a card using your CNIC and provide important details of your recipient. As the primary purchaser, you will be able to monitor all cards transaction and spend.

ONLINE SHOPING
Ubl WIZ provide you convenience and security to shop on line for registration call 0800-11-825. Tracking usage on your UBL WIZ card is easy, you can choose from a number of options that include:

A free of cast mini statement from UBL ATMs showing recent transaction history. Balance enquiry at UBL, 1 link or MNET ATMs. Subscription to the free UBL e-statements facility at a frequency of your

choice

UBL WIZ prepaid VISA debit card limits

LIMITS Total balance allowed-max limit per Traveler s 200,000 100,000 00 withdrawal limit per 40,000 00 100,000 00 Internet usage limit per day(PKR) 100,000 25,000 10,000 50,0 00 20,0 00 20,0 es 50,0 00 25,0 00 20,0 00 10,0 Lado n 20,0 Tee

deposit(PKR) Loading/reloading instant(PKR) ATM day(PKR)

PSO usage limit per day(PKR)

UBL WIZ Prepaid VISA debit cards

Card issuance Re-load fee With drawls on 1 link ATMs other then UBL Cancellation Rs.100/-+FED 0.1%,minRS.50/-+FED RS.15/RS.100/-

INTERNET USAGE
Activation charges 0

Per Session Charges

RS.100/-

INTERNATIONAL CHARGES
ATMs withdrawals POS purchase

VISA
2%,min RS.200/2%,min RS.200/-

USAGE

BIBLIOGRAPHY
1.

Akhtar, S.M. Economic development (united publisher, Lahore, 1987).

of Pakistan 1st edition,

1.

Edmister,Robert O., Finical Institutions 2nd edition,(Mc Graw Hill Inc. New York,1986). Haque Irfan-ul A compendium of Pakistan Economy, 1st edition, (royal book co.karachi, 1987). Johnson, Hazel S. Financial Institution and markets. A Global perspective,(Mc Graw Hill Mc.New York 1993) Khans Shahrakh Rafi, Profit and loss sharing, Is edition (Oxford university London karachi, 1987). Meenia, S.A Money banking and Financial Market 3rd edition (Oxford University Press Karachi 1984). Mishkin, Frederic S. money banking se financial markets, 3rd edition (Hourper Collins New York 1992). Saeed,Khawaja Amjad, financial institution in Pakistan. 1st edition (Royal Book Co., karachi.1985). Siddqi,Asrar H. Practice and law of banking in Pakistan.(Royal Book Co. Karachi 1993). Singh Karam Sc Tanna. Suresh, Bankers student Text, (Hutchinson, London, 1989). Sinkey, Joseph F. Commercial Bank Financial management, 2nd Edition. (Macmillan Publishing Co.New York 1986).

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