Académique Documents
Professionnel Documents
Culture Documents
Total Assets of Prime Bank during the period from December 1992 to December 2005
has grown at an annual compound rate of about 23 percent to Rs. 53.8 billion. Within this
period, Shareholders’ Equity grew from Rs.371 million to Rs. 3.4 billion, Deposits to Rs.
38.9 billion and Advances (net) to Rs. 25.5 billion. Profit before tax grew from Rs. 40.6
million to Rs. 765 million for the year ended 31st December 2005.
After fourteen years of well controlled, yet sure and successful operations, the Bank is
now poised to move forward rapidly to be at the cutting edge of financial services
combining highly efficient delivery systems with continuous product innovation.
Therefore, development of superior Human Skills and the latest Information Technology
platform are the cornerstones of Prime Bank’s overall strategy to be in the exclusive club
of winning banks of the future.
During the year ended December 31, 2005 the total assets of the bank grew by 33% to
reach the level of Rs. 53.8 billion (2004; Rs. 40.3 billion). This growth in the balance
Sheet footing was mainly constructed by a healthy and steady in deposits and advances
during the year under review.
Our focus on building up a strong Deposit base by mobilizing care deposits from the
target markets ensures a steady and sustainable growth for the Bank. Introduction of
tailor made deposits products to meet the need of our valued customer son markets
competitive terms and conditions resulted in healthy growth of 29%over the last year.
Total Deposits stood at Rs. 38.9 billion (2004;R. 30.1 billion).
The non-performing advances of the bank as at December 31, 2005, stand at Rs.
789 million as against Rs. 776 million as on December 31, 2004, while the cumulative
provision there-against amounted to Rs. 425 million compared to Rs. 406 million last
year. Despite a good expansion in the loan portfolio this year, the non-performing loans
(NPLs) to net advances ratio was reduced from 3.6% last year to 3% this year while
keeping a check on the absolute amount of NPLs at last year’s level, which is another
evidence or your Bank’s prudent strategy to lend to the right kind of customers.
Despite the healthy position in the balance sheet we successfully managed to maintain a
sustainable level of Advances to Deposits Ratio 66%. This was done to ensure
availability of adequate liquidity so as to successfully manage any and all market
eventualities in the face of swiftly changing interest rate scenarios.
With the capitalization of the Bonus Issue the paid up capital of the bank reached to Rs.
2.3 billion surpassing the minimum required capital of Rs. 2 billion as set by the State
Bank of Pakistan by the end of December 2005. Your bank is well poised to comply with
the new requirements to enhance the capital base by Rs. 1 billion every year, to the level
of Rs. 6 billion by the year-end 2009.
Further to the successful Pre-IPO subscription of the First Term Finance Certificates
(TFCs) of your bank amounting to RS. 640 million last year, the initial publics offer of
Rs.160 million during the first quarter of 2005 was also heavily over subscripted. This
long-term bond issue provides further strength to the already sound Capital Adequacy
Ratio of the Bank.
Operating Performance:
Important financial indicators of PCBL reflect a good and steady progress by the bank
whereby the Pre-tax profit increased by 46% to Rs.525 million for the year2004. The
profit after tax increased to Rs.495 million, as compared to Rs.345 million in 2004,
registering an increase of 43% over last year due to increase in interest margins, which
grew by 68% reflecting expansion in core banking activities coupled with well-managed
treasury operations of your bank.
On the other hand the operating expenses were well balanced and increased by only 24%
over last year to reach Rs.1.17 billion as opposed to last year’s Rs.0.94 billion, due to the
absorption of extra overhead cost of branches opened during the latter part of year
2004Furthermore to optimize its operational efficiencies the bank also undertook a major
re-organization of its internal operating structure, devoting into the Business Process Re-
engineering (BPR) program embarked upon by the bank.
760
800
700
600 500
500 400
Rs.in Million
400
280
300 220
200 150
100
0
2000 2001 2002 2003 2004 2005
BRANCH NETWORK
Inline with the bank’s strategy to strengthen and expend its market share through
enhanced reach to the target customers your bank opened 12 additional branches during
the year under review increasing the overall network to 65 branches covering 25 major
cities of PAKISTAN.
1.1.2 The Vision:
1.1.4 Objectives:
The bank would continue to maintain its primary focus on the middle-market segment
essentially targeting the commercial banking business of the segment. With a view to
getting into the consumer banking in a significant manner, the bank has recently
commissioned an independent consulting study for this purpose. Bank’s operating
procedures, credit processing and internal controls are being reviewed and these studies
have been instituted in order to further improve the quality of our operations.
Salient features:
Salient features:
Cash withdrawal
Account Balance Inquiry
Mini Statement
Account Statement Request
PIN Change Request
• Prime Car
Salient Features:
No hidden cost
No conditions apply
Quick Processing
Flexibility of early settlement and balloon payment during loan
tenure
Financing Limit from Rs. 150,000 up to Rs. 10 Million
Application Processing charges only Rs. 2,000
Salient Features:
• Prime Mahana
Product category:
Proposed tenor:
Target market:
• Prime N’cash
1.2 Training and Development Centre:
The Training and Development Centre at Prime Commercial Bank is one of the most
important departments. Its main function is to give training to the employees of the bank.
Because of the dynamic banking environment it is very important for the company to
train its employees so the company can compete in the growing banking sector of
Pakistan. The Training Department at PCBL is striving for excellence in the banking
sector. It got the best Trainers from the whole country who is working all days for the
continuous improvement of the employees.
Next it is important to know that how this department operates. First of all the team
of the Training Department analyzes the weaker area of the working employees. This is
done by Training Need Analysis (TNA). The Training Department circulates the Revised
Training Need Assessment Form in all branches of the bank throughout the country. This
form contains the list of Training Courses Offered with three different levels, basic level,
intermediary level, and advance level (A copy of Revised TNA Form is attached at the
end of the report). Then the Branch Managers are asked to evaluate the weaker areas of
the employees. And then on his instruction the employee have to attend the training
session which is one day long or some time it is for two days long at the training center.
Basically the courses offered in training center are related to day to day operations
of the bank. It include courses related to Operations, Trade Finance, Treasury,
Accounting, Credits, Islamic Banking, Risk Management, Management and some other
areas according to the needs of the bank. When TNA forms are filled they are again sent
to the Training Center and the record is kept in their database. This is done on
semiannually basis.
Now by looking at the database, Training Courses are designed by the Training
Department Team and then they conduct different courses at regular basis. If we see on
the average 5 -6 courses are offered during a period of a month. If one course is on
Operations the other could be on Trade Finance so this is how this department operates
for the bank.
The structure of training department in very simple. It consists of a team of six people
which includes four trainers, among the four trainers the most senior is the training
manager. One training coordinator and a training administrator. The structure of the
training center can be viewed as:
Branch
Manager &
Senior Trainer
Trainer 3 &
Trainer 1 Trainer 2 Training Coordinator
senior administrator
Training
Administrator
Team spirit, initiative, performance drive, and customer orientation are key characteristics
of the Prime Bank’s employee and the Prime Bank’s culture.
CHAPTER: MANAGERIAL VIEW OF THE PRIME
COMMERCIAL BANK LTD
Managerial Policies:
Managerial policies include all those policies which are adopted by the bank in
performing all it internal activities as well as external operations. Different policies are
required in order to introduce innovation and ensure maximum operational efficiency at
minimum cost.
The policies of Prime Commercial Bank are as follows:
1. Financial Policies:
Prime Commercial Bank believes in capturing the market share through market
development. More and more branches are being opened to increase the deposit portfolio
of the bank. Providing in time and better service to the customers is also a successful
strategy to attract more deposits. Prime bank mainly focuses on individual accounts as
compared to company accounts and also they prefer current accounts as compared to
saving or term deposits. This policy is adopted because current deposits do not cost the
bank; on the other hand that bank has to pay cost against term deposits.
2. Deposits Policies:
The policy of Prime Bank is to raise those deposits in which its costs are least.
The best option is that of current accounts because the bank has to pay zero return on
these deposits. Saving and term deposits are also good but since the bank has to pay some
return on them therefore only current deposits are preferred.
3. Liquidity Policies:
4. Lending Policies:
Lending polices of Prime Bank are in accordance with the prudential regulations
issued by State Bank of Pakistan. Prime Bank adopts a very conservative approach
while advancing loans. The policy is to grant loan to referred people or organizations
only. This is to reduce the element of risk. Adequate security must be acquired before
advancing any sort of loan. The nature of the security should be such that it is readily
marketable and easily transferable. The size of the loan portfolio is to be based on
rational issues. The parameters related to the borrower for granting any financial
assistance are as follows:
• Character
• Capacity
• Capital
• Collateral
• Condition
The preference of Prime Bank is to issue short term secured loans. Long-term loans are
only given to trustworthy selected clients. Usually non-fund based facilities are preferred.
5. Recruitment Policies:
The major criterion to get a job in the banking sector includes business contacts,
deposits and qualification. From the banking point of view, as we all know that they need
business, they need such contacts, which can enhance their business portfolio, or they
need deposits. Both these can happen through contacts or marketing or through people
who work for it. That’s why PCBL is also looking for the people who are eligible as well
as can bring business also. In PCBL the recruitment is done through direct appointment &
management trainee seat.
MANAGEMENT STYLES:
"By making things quantifiable and rational, executives can have more confidence in
their decisions, even when they create uncomfortable outcomes, But when it comes to
working for these executives, that way of thinking might turn their employees off."_
Nathan Washburn, a management researcher currently finishing up his Ph.D. at the W. P.
Carey School of Business.
To know what are management styles and what type of management styles Prime Bank
fellows, I interviewed my Manager Mr. Arif Ahmad he told me that “I think flexibility is
key -- that you employ different styles as different situations present themselves. Also,
each individual requires a different type of leadership.
Just as a trainer must accommodate different learning styles to help people learn,
so must managers as a manager change their styles based on the situation, individual
needs and team needs. In other words, there is no single correct management style to
follow.
The first piece of advice I would give is; remember that different jobs, teams, or
goals require different management styles. That’s the reason there are so many different
styles.
As for the employees that worked with you before, I think you’ll find they may very well
welcome a change from autocratic to democratic. This doesn’t mean you give away
decision making authority or overall responsibility, it does mean that you involve them in
the decision making process. Since the employees work in teams and there are multiple
teams, and since you cannot be everywhere doing everything with them at once unless
you clone yourself.
He said about the styles because there are multiple teams you must be able to rely on
their ability to make sound judgments about there work such as when they need to
involve you for assistance and when they are capable of handling things themselves.
One of the primary goals of a good manager is to develop those below themselves as
professionals. This holds true whether you are working in a gas station or a corporate
boardroom, and the only way to do that is to allow them to make decisions and provide
the overall grand view (see the forest not the trees) and counseling they need when they
need help. It is also the most productive way for a team to accomplish a goal.
When complicated decisions have to be made -- whether about salaries, layoffs or growth
strategy -- executives often rely on their underlying values to help them sort through
possible options. Profit maximization and rationality form the basis of one such set of
values, one frequently used by executives when making these decisions.
The leadership style in most of the departments is AUTOCRATIC means the managers
are very directive and allow no participation from the lower side and tend to give
individual attention when praising and criticizing but try to be friendly or impersonal
rather openly hostile, also try to be objective in giving praise or criticizing.
Prime Commercial Bank limited (the Bank) having its registered office at 77Y, D.H.A,
Lahore (PAKISTAN) was incorporated in Pakistan on September 30,1991 as a Public
Limited Company under the Companies Ordinance, 1984 and is listed on al Stock
Exchanges of Pakistan.
The bank is fully accredited scheduled commercial bank and is principally engaged in the
business of banking. The Bank had22 branches operational at the year-end while one
more branch will be operational by end of February 2002.
2. Basis of Presentation:
Accounting convention
2.1 These accounts have been prepared under this historical cost convention except as
stated in note 4 and are in conformity with the International Accounting Standards
(IASs), as applicable in Pakistan the banking companies Ordinance, 1984 in all material
respects.
2.2 In accordance with the Islamic Banking System, trade related modes of financing
include purchase of goods by the Bank from its customers and immediate resale to them
at appropriate mark up in price of deferred payment basis. The purchased and sale arising
under these agreements are not reflected in these accounts as such, but are restricted to
the amount of facility actually utilized and the appropriate portion of mark up thereon.
3. Statement of Compliance:
The accounts have been prepared in accordance with directives issued by the State Bank
of Pakistan, the requirements of the Banking Companies Ordinance, 1984 and IASC, as
adopted in Pakistan.
4. Basis of Measurements:
Monetary values of elements of financial statements have been measured on historical
cost invention except for those items, which are required, by status or the IASs to be
reported on any other basis.
The Bank account for regular way purchased and sales of financial assets using
“Settlement Date Accounting” by recognizing at the time the instruments are actually
transferred to the enterprise. Gains and losses on reorganization of financial assets and
liabilities are included in the profit and loss for the period in which it arises.
5.2 Investments
These are investment securities that are held for short periods of time principally for
generating profit form short-term price fluctuations.
Available for sale securities
Investment securities intended to be held for an indefinite period of time, which may be
sold in response to need for liquidity or change in equity prices are classified as available
for sale.
Listed Securities
These are marketable securities measured at market value prevailing at the balance sheet
date.
Unlisted securities
Where active market does not exist, these are stated at cost less provision for permanent
diminution in value, if any.
Investment securities with fixed maturity where management has both the intention and
the ability to hold to maturity are classified as held to maturity.
5.4 Advances
Advances are stated net of provisions against non-performing advances, if any, which is
taken to the profit and loss account. Advances are written off when there is no realistic
prospect of recovery.
Tangible
(a) Owned
(b) Leased
Assets subject to finance lease are stated at cost less accumulated depreciation.
Depreciation on leased assets is provided from the date of the lease agreement using
straight-line method at the rates stated in note 12.
Intangible
These are stated at cost less accumulated amortization, which is, computed@20% by
taking into consideration the estimated useful life of the related assets, using straight-line
method. Gains and losses, if an, on disposal of fixed assets are taken to the profit and loss
account.
5.6 Taxation
Current
The charge of current tax is based on the result for the year as adjusted for the items
which are non assessable or disallowed.
Deferred
The bank accounts for defend taxation using the liability method on all significant timing
differences arising form differences between the carrying amount of assets and liabilities
in the financial statements and the corresponding tax basis used in the computation of
taxable income.
Foreign currency transactions are accented for at exchange rated prevailing on the date of
the transactions.
The bank operates an approved contributory provident fund scheme through a trust for all
its permanent employees. Equal contributions are made to the fund on a monthly basis by
the bank and the employees are at the rate of8.33% per month of the basic salaries.
Profit on advances and investments are recognized on an accrual basis, except income, if
any, which warrants suspension in compliance with the Prudential Regulations of the
State Bank of Pakistan. Commissions earned in letters of creditor and a guarantee is also
recognized in an accrual basis. Dividend income is recognized when right to receive
payment is established.
Cash Equivalents are held for meeting short-term cash commitments and comprised cash
and balances with State Bank of Pakistan and other banks.
Derivative financial instruments including forward foreign exchange contracts and other
financial instruments are recognized at cost (including transaction costs) and
subsequently measured at fair value.
5.12 Acceptances
There are different departments and division in PCBL so I am highlighting them in the
form of an organogram.
Organizational Hierarchy
Board of Directors
Executive Committee
President/Chief Executive
The network of Prime Bank is being divided into different regions according to the
location.
Professionalism:
Professionalism is both an individual characteristic and an ideological position. The
primary definition is that of individual professionalism: the idea that membership of a
profession carries with it a set of internalized values that will be reflected in the way in
which work is carried out and the ethical standards that are adhered to. As an example, a
concept of 'medical professionalism' would require that doctors prescribe the most
appropriate treatment for their patients, rather than one which would yield them higher
fees or would meet an externally imposed objective of cost control.
Professionalism is more of an inherent trait but it is influenced by the work environment.
Like in organizations where there is a greater stress on professional integrity places a
special emphasis on it. They look for this trait in their potential employees and also
develop it after their initial hiring. Special training sessions are held to groom the
employees and build their professional attitude. In PCBL, like all other organizations,
special stress in placed on the professional attitude of employees. After the hiring of
employees, a company policy book is handed over to each employee to guide them in
their day to day activities. It is expected from the employees that they will work with
their utmost honesty and integrity.
Degree of formalization is the extent that roles are independent of specific personal
attributes of individuals occupying the roles. Formalization tries to standardize and
regulate behavior.
It also is an attempt to make structure of relationships more visible and explicit.
Diagrams and work flows, org charts are examples.
In the rational perspective, organizational structure is an instrument that can be modified
to improve performance. PPBS (planning, programming, budgeting systems) PERT
(program evaluation review techniques) are examples of rational decision making support
systems. Prior formalization can also reduce the stress of trying to build relationships
between participants, and make roles and relationships more objective and external to
participants.
Formalization is an alternative to the information sociometric structure. It can in some
instances separate personal feelings between participants from the work activities (in fact,
some companies actively try to separate the two. Formalization allows succession to be
put into a routine and make personal abilities like charisma less critical to performance in
a certain role.
Personnel Ratio:
The total number of employees working in the Prime Bank’s network is about 2000 at
present. Prime Bank, Main Boulevard Branch has near 30 employees working with it.
These employees are working in the following departments.
Operations
Cash Department 6
Account Opening Department 3
Accounts 2
Administration/Lockers 1
Foreign Trade 1
Credit
Manager & Deputy Manager 2
Business Development
Branch Manager 1
Business Development Executive 1
Business Development Officers 8
Consumer Banking
Regional Manager(each for Auto ,Business 3
& Home Financing)
Verification Officer 1
Collection Officer 2
RETURN ON EQUITY:
RETURN ON ASSETS:
LIQUIDITY:
SECTION 2
CHAPTER: CORE INTRNSHIP EXPERIENCE AND KEY LEARNING
June 28th was my first day at the Training Centre of Prime Commercial Bank Ltd. I
reported to Training Manager at 9:00 am. He introduced me with the team of the Training
Centre. He then assigns me the job of assisting the Training Administrator Mr. Tahir
Ameen. Basically the job of Mr. Tahir is to administer and monitor all the activities at the
Training Centre.
Being the student of Finance, this doesn’t make any sense to do internship in such
a department whose direct link is with company’s HR department. The main reason is this
that when I got a chance of doing internship in Prime Bank there was no vacant place for
an intern in any branch of Lahore. The branches were already overloaded. My Manager
tried to engage me in a branch but unfortunately he could not able to do so. So that’s why
I joined the Training Centre of Prime Commercial Bank Ltd.
On the very first day Mr. Tahir told me about the affairs of the Training Centre.
He told me in detail his task and also highlighted the area in which he requires my
assistance. Basically his job was to make different types of arrangements regarding the
Training of the employees. For example, if a course is offered on Banking Operations and
it is specially offered for the employees of different branches from different cities like
you can say it is offered for the employees of Northern region, the arrangements related
to their accommodation, lunch or dinner, traveling etc. Making all such arrangements is
part of his duty. This is not finished yet because there were some of the external duties
performed by him, his duty also include handling of the internal affairs also like keeping
the record of the budget granted by the Head Office, record of expense which was
incurred during different training sessions. Another duty performed by him is to handle
the supporting staff of the Training Centre. So these were some of the duties in which I
was asked to assist him in the beginning.
My first week was passed by observing these things over there. What happened in
the next week, Mr.Tahir got injured in a traffic accident. He got some severe injuries on
his back and on his leg and he was advised by the doctor to take a rest of minimum 4
weeks. So his whole responsibility came onto my shoulders. That was a very tough job
for me but I am very great full to my Manager Mr. Arif Ahmad that he guided me at every
step. He told me how to handle things effectively. Then I started performing the duties as
a Training Administrator. Now what happened next new courses are coming according to
their schedule, as a Training Administrator my job was to make arrangement and to take
care of everything happening in the Training Department. So my second week passed in
this way.
At the end of second week, I came to know about a course coming in the start of
the next week on Soft Skills. The name of that course was Telephonic Techniques &
Manners. This course was designed in such a way that it will help all of the employees
working in Prime Commercial Bank Ltd. It is for higher officials as well as for low level
employees. When I came to know about this thing that this course is designed for
everyone in the company, my heart says that I should also attend this course this would
enhance my soft skills and will also make me familiar with the corporate culture that how
u should be talking on the telephone, but being an Intern over there this was against the
policies of the Bank. I went to my Manager and told him about my intensions. I said sir I
came here (PCBL) with the intensions to do internship in a branch but as there was no
vacant place for any intern I have to adjust myself in Training Department. So please it’s
a request, allow me to attend few course on core banking activities. He looked at me with
a smile and said ok I allow u to attend three course of your own choice. But remember
one course a week because you have also other things to do here as a Training
Administrator. So I agreed on this and selected three courses for three weeks.
Now it’s the first working day of third week of my internship. The first course
which I was allowed to attend was a full day course on Telephonic Techniques &
Manners. It tells you about how you should be speaking on telephone with you esteem
clients, your colleagues and your higher officials. This was the main idea of the course
and now I will explain the things which I learned from this course.
The first main thing is that you have to project our whole personality on telephone
through your voice. So we should be very care full in projecting our personalities on
telephone. Next are the key concepts related to Telephonic techniques and Manners.
These are explained as follows:
First we see that what the reasons for which we speak on telephone are
1. To Inform or to Instruct:
Here the goal is to clarify, secure understanding and explain the process
you want.
2. To Persue:
3. To Entertain:
This type of speaking may include humorous statements you will make
In this regard we usually consider few more things which are very important for
telephonic manners:
Pitch:
It’s the highness and lowness of the sound of our voice. It should
be varied in speaking.
Monotone:
Rate:
It’s the number of words you use per minute when you speak 80 to
160 words per minute is the standard in public speaking. Over telephone it
should be 60 to 90 words per minute.
Volume:
Voice:
Sound:
Contrast in Emphasis:
Controlled Breathing:
You should breathe deeply. Fill your lungs with air in order to
produce higher pressure vocal notes.
Extemporaneous:
Memorization:
It is that you can memorize whole message on the phone but you
can’t always depend on your memory because sometime you forgot the
most important point.
So these were few things which are really important in telephonic manners. There are
also some exercises which tell you that at what level your telephonic manners are
standing. Next is the concept of Active Listening it means that you should be active
enough while listening to a telephone call. It consists of a principle called LADDER.
The LADDER Principle is
Next is about the voice how we use our voice to communicate with the person
sitting on the other end.
Voice:
How you use your voice is more critical over phone because the person on
the other end is not “connected with you visually”. Your voice reflects your personality.
Practicing your voice techniques is like practicing a sport. If you stay at it, you will reap
its benefits. It is one of your personal signatures; varying pitch, rate and volume gives it
more interest and appeal. Hence you would have to project your whole personality on
telephone through your voice.
Assertiveness:
It is giving equal weight to your own opinion and others; being aware that both
parties have rights. It is about respect other people rights. But you should also take steps
to ensure that your own rights are also protected.
It is about behaving in a confident, calm and reassuring way that helps you to
control the situation. It is important that the callers feel that they can trust you. If you
communicate on a calm, adult level, anxiety is reduced, and both parties feel good, each
is aware of the other’s feelings and is able to see both side of the story. So assertiveness
does not mean harassing other people and forcing your opinion onto them.
Sometimes what happens that many people automatically discount their own feeling or
become emotional and defensive when they feel that they have lost control of a situation.
By being assertive on the telephone you will save time and feel more in control which
should help you to feel positive towards your caller even in difficult circumstances.
So this was summary of that course which I attended as my first training session.
It ends up with Golden Telephone Rules. These are:
1. Be prompt, answer within three or four rings because callers do not like to be kept
waiting for long.
2. If you are going to be away from your phone for any length of time, activate
divert calls button.
3. Answer with a smile – it comes across in you voice, making you sound friendly
and positive.
4. On answering give a verbal handshake, announcing the Bank’s name branch/
department as well as your own name.
5. When making a call, make sure that it is convenient time for the other person to
handle it.
6. Show empathy, build an instant relationship with you caller by using a warm,
friendly tone of voice.
7. Establish the need of your caller immediately by asking “ how may I help u”
8. Use open question to find out facts and information and also closed questions to
clarify and check understanding.
9. If you can answer the caller’s question promptly and efficiently. If you can’t help,
tell them what you can do for them.
10. Use continuity noises to show the caller that you are listening.
11. Repeat names, telephone and fax numbers and dates back to the caller to make
sure that you have got them right.
12. Make notes because a short pencil is far better then a long memory.
13. Double check all vital information by reading back in summary what have you
discussed.
14. Give the call you full attention. Nobody can hold two conversations and retain the
100% information from both sides.
15. Agree any actions that either party will take.
16. Finish off your call on a positive note.
17. Sign off properly. Confirming what will be happen as a result of this call and
thanking the other person for their time.
So this end up my first Training Session it was a great learning for me. Apparently its
seems to be a very low level training session but in reality it was other way round.
After this course I try to implement what I learned from this session in my
internship period and I found how well it was designed for everyone. So after the first
training session my third week spend in the routine work for the training department.
The fourth week…in this week I chose a very basic course related to daily operations of a
bank i.e. Prevention of Money Laundering – KYC & Account Opening, and Types of
Accounts in Line with Prudential Regulations.
• Money Laundering refers to the methods criminals, use to hide and disguise
money they make from committing crime. The term “laundering” is used when
criminals turn their “dirty” criminal money into “clean funds” without arising
suspicion.
• The conversion of profits derived from illegal activities into financial assets
which consequently appear to have legitimate origin.
• Money Laundering is a magic trick for wealth creation - are haven for drug
traffickers, arm dealers, tax evaders.
• Money Laundering, at best, may be defined as the processing through the banking
system of the proceeds of crime in order to disguise their illegal origin.
• The movement of ill-gotten money can be between the countries or within the
same countries.
• When Banks don’t care about the source of cash flows, it increases the volume of
bank money, which is later on injected into the main stream of economy.
Placement:
Layering:
Integration:
Funds are transfer to off shore companies owned by launderers and loan is
back to the launderers
• Invoicing method
• Introduction:
• Existing Account holder
• Account holder of another branch
• Account holder of another bank
• Employee of own bank/ branch
• Employee of another bank
Due Diligence:
The bankers used to look at this issue from the angle of banking laws,
laws relating to protection to the collecting and paying bankers.
Bankers must protect themselves by establishing the following key points
related to the customers and their business that are likely to pose a higher than
average risk to the bank, and it should be as per SBP Prudential Regulation.
• Establish bonafides
• Determine eligibility
• Receive & examine necessary documents
• Obtain introduction/ references
• Make circumstantial enquires
• Know normal procedures and implication of deviation
• Effectively record and control: mandate, similar accounts.
Branches are advised that KYC/ customer due diligence is not a one time process
exercise to be conducted at the time of entering into a formal relationship with
customer/ account holder. Its an ongoing process for prudent banking practices,
therefore branches are encouraged to:
• KYC:
i. Update customer information and records at reasonable
intervals
• RST:
ii. Put in place a system to monitor the accounts and
transaction on a regular basis.
iii. Install an effective MIS to monitor the activity of the
customer’s account.
iv. Maintain proper records of customer identification
iv. Monitor and check unusually large cash transactions.
General:
vi. Set up compliance unit with a full time head
vii. Chalk out plan of imparting suitable training to the staff of bank/ branch
periodically
Regulation M – 2 (Measuring)
i. Banks DFIs shall ensure that their business is conducted in conformity with
high ethical standards
ii. All banking laws and regulations are adhered
iii. Monitoring of accounts on a regular basis
iv. Transaction which are out of character/ inconsistent with the history should be
viewed with suspicion
v. Implementing of Bank’s policies & procedures and proper training there to
It’s the first step to establish Customer – Banker relationship. Account opening is
necessary for assets based & liability based products.
Types of Accounts:
PLS Account:
Primax Classic:
Primax Anchor:
3 Months 6 Months
1 Year - 5 Year
Profit is paid: 1 Year (at maturity)
SPECAIL ACCOUNTS:
i. Administrator, Executors
ii. Trusts
iii. Liquidator
iv. Local authorities, municipal corporation, etc
i. Individual Accounts:
Saving
Current Account
ii. Company Accounts
The following forms/ documents are always required before opening of accounts:
Statement of Accounts
Monthly:
i Current Accounts
ii Primax Classic
iii Primax Anchor
Half Yearly:
Saving PLS
Hold Mail:
Undelivered Statements:
Blocked accounts
i Dormant Account
iv Attachments
Notice and order served by: Court, Tax Department or some government
agency.
Open the new BBA A/C and complete the formalities for opening the account
as usual , issue a new ATM card if desired and deduct it charges
The following specification will be made known to all account holders
maintaining BBAs:
Deduction of Zakat:
• Zakat is collected at the ratio of 2.5% as per Zakat & Usher Ordiances1980
• It is deducted on all profit bearing accounts on 1st Ramazan, FC accounts are
exempted.
• Minimum deposit amount is announced by the Government on the annual
basis
• Zakat collected is paid to the Govt. On its prescribed format within 24 hours
of its deduction.
• Zakat deducted on 1st of Ramzan, must be reported same day by all branches
to designated Branch of the bank.
• The main branch will consolidate the figure and submit the consolidated
amount along with the statement to SBP and the copy of the challan form and
Zakat statement is submitted to the Ministry of Zakat & Usher in Islamabad
for the record.
These services provided by the Bank Companies, Financial institutions and non –banking
finance companies shall be as follows:
So this end up with my second one day training session. From this session I have learnt
many things related to the general banking operation. As I was doing internship in
Training Department, I was unaware of these operations. I get very important information
related to the concept of money laundering and about the different types of bank accounts
in line with Prudential Regulation. Onward this session my whole week was spent in
doing the routine work for the Training Department.
• SBP
• SECP
• Commercial Banks
• NBFIs
• Investment Companies
• Mutual Funds
• Stock Exchanges
• Markets where funds are borrowed or placed for maturities les than one year is
called money markets.
• Treasury Bills for one, three, and six months
• Short Term Financial Certificates ie. CDs
• Short term inter – bank borrowings
• A market dealing with instruments of long maturities normally more than one year
is called Capital Market.
• Shares of Public Limited Companies
• TFCs secured
• COIs unsecured for long term issue by NBFIs.
• Buying and selling money market instrument under open market operations
• Voluntarily purchasing and selling of Foreign Exchange against local currency
• Changing the interest rate at which commercial banks can get money from central
bank, (the discount rate)
• Changing in reserve requirement for schedule banks
• Every schedule bank must maintain cash reserve requirements and amount not
less than 5 % of its Time and Date Liabilities with SBP
• Statutory Liquidity Requirement and amount not less than 15 % of its Time and
Date liabilities in Government approved securities
Treasury Bills:
Treasury Department:
Functions of FX Desk:
• Position taking
• Jobbing
• Market making
• Filling up commercial orders
• Intervene for Central Bank
What is Risk?
To chance that events or actions will not have previously planned outcomes.
Operational Risk:
Credit Risk:
Currency Risk:
Personal Risk:
• Front Office – dealing room plays an important role in overall structure of the
bank
• It manage liquidity and market based exposure in local and foreign currencies
with the parameters set by the bank
• It is primarily responsible to compile exposure taken by the corporate and retail
sector and ensure that these exposures are managed profitably for the bank
• Treasurer
• Chief Dealer
• Senior Dealers
• Junior dealers/ position pad writers
• Rates which are agreed today but applicable for future transactions
• These are required by the exporters and importers to avoid the negative impact of
exchange rates fluctuations
• If foreign currency shows appreciation against local currency-importers concern
• If foreign currency shows depreciation against local currency-exporters concern
• All forward rates are based on spot rates
• A forward can be at premium over spot
• A forward can be at discount over spot
• A forward can be at PAR with spot
SBP Guidelines:
• Deals
• Take - ups
• Cancelled deals
• Adjusting Entries
• Closing Balance
• All sales to customers must be in cover of genuine transactions approved by SBP.
• Presently exchange rate system in Pakistan is based on free – float system, i.e.
demand and supply forces in inter – bank market
• Rates are quoted in direct or in indirect forms
• Ready rates
• Spot rates
• Cross rates
• Forward rates
• Choice of selling and buying rates in case of direct and indirect quotation
• Application of chain rule of equations for calculating cross rates.
So with the exchange rate mechanism this course has ended. It was a really good
course because its nature was very much practical. It enhances my knowledge
regarding the treasury operations f the commercial bank in Pakistan. Another
important thing of the course is that it also contains some numerical exercises
related to calculation of the cross rates, conversion of spot rates into forward rates
and related to exchange position. In my opinion this course was the best and
toughest course of all the three courses I attended in Prime Commercial Bank Ltd.
I am very great full to my manager that he allowed me to attend such courses.
After this course I have one week left for my internship. In this week Mr. Tahir
who is Training Administrator came back from his leave and takes his charge of
the Training Administrator. So in the last week I didn’t have much work to do.
Like before I just assisted Mr. Tahir in his routine work and in this way I ended
my internship in the Training Department of Prime Commercial Bank Ltd. It was
a very good working experience for me and I am quite sure that this experience
will help me in my professional career specially in banking sectors.
STRENGTHS:
• Cooperation among personnel is the key to success and Prime Bank personnel are
very cooperative and kind to each other.
• A good system of communication flow is there.
• A good attitude of personnel bankers and relationship managers is a plus point .
• The credit administration department enjoys a stuff of very good business
executive who attract and analyze people in a very good manner.
• The bank has a good team of customer relation managers and customer relation
officers to help the people.
• The keeping of a good and modest environment during business hours
• The working of employs even after the end of the business or official hours.
• A good dressing of employees and their attitude towards the people.
• The commitment of employs towards secrecy.
• A good system of training new comers in the bank.
• Service to customer even at the cost of bank increase the business
• Automation and online business
WEAKNESSES
• The role of personal bankers and relationship managers may increase its market
share
• The joining of Mr. Saeed A. Chaudry is opening new ways of development
• A good sales team and marketing people
• committed employees due to payment of higher salaries
• payment of bonus to employees performing well
• a good job recruitment policy of hiring business graduates
• Highly motivated and committed staff towards the bank and towards the
management policies.
THREATS
• Pakistan is a developing country and our debt burdened economy is a major threat
for the banking business
• The adoption of online system and developing of we sites of the other banks can
create a threat to the bank
• The employee turnover can create a serious problem for the bank
• Delaying in launching a credit card
• Lake of promotion and advertisement
• Fewer deposits and advances schemes
• Start of evening banking by some banks
• Higher limit for account opening and profit earning
• Smaller branches network in the country
SUGGESTION
• Increase promotion and marketing efforts by using electronic, print media and
energetic and creative sales force in order to attract and capture the market share
• Employees must be given the opportunities for participation in decision making
• Increase salary package in order to motivate employees
• Control employee turnover
• Improve management
• Recruitment process must be amended and vacancies should be advertised in
newspapers in order to hire more qualified ,young, energetic and capable people
• Favoritism must be controlled
• Update the website and provide more information because other banks have mare
elaborated and fascinated websites
• Improve pricing policy because Prime Bank’s rates are higher as compared to
other banks
• Reduce minimum requirement for account opening and profit calculation because
other banks in the industry have low limits
• Start online foreign operations as early as possible
• Improve the layout of Training Centre.
• Increase number of departments in the branches