INTERNSHIP REPORT ON

ASKARI BANK LIMITED MANSEHRA

Submitted by

Muhammad Ijaz

Roll# F15/B33

Supervised by

Yasir Taj

Government College of Management Sciences

Mansehra
SESSION

2015-2019

i
 INTERNSHIP REPORT ON

ASKARI BANK LIMITED MANSEHRA

Submitted by

Muhammad Ijaz

Roll # F15/B33

Supervised by

Yasir Taj

This internship report is submitted in partial fulfillment of

the requirements for the degree of Bachelor of Business
Administration awarded by the Hazara University,

Mansehra

Government College of
Management Sciences Mansehra
SESSION
2015-2019

ii
 Government College of Management Sciences

Mansehra

APPROVAL SHEET

Approval Committee

1. External Examiner
2.
Mr.______________________ Signature____________________

3. Supervisor
Mr. Yasir Taj Signature____________________

Associate Professor

4. Head of department
Mr. Fiaz Saeed Signature_____________________

Lecturer

DEDICATION

iii
This piece of work is dedicated to the Great Person for which this whole universe was

made are our loveable Holy Prophet Muhammad (S.A.W) after that dedicated this

report to my respective parents, my sister and brother, a constant source of my

inspiration who supported me each and every of my destination.

Without their love and support this project would not have been made possible.

This report is also dedicated to the branch operation manager Muhammad Faisal

Rashid who supports me to collect the data, also to analyze data and interpret in my

words; he is most honorable and helpful for me at any stage of preparing this report.

iv
 ABSTRACT

In order to be able to cope with the changing environment it is necessary to have some
practical experience. As the students of Commerce there are need to pass through a
series of various managerial techniques. During this practical course we are provided
with an opportunity to learn that how the theoretical knowledge can be implemented in
practical grounds.

I selected to do my internship at Askari Bank. I worked there for 8 weeks and it gave
me greater practical knowledge about the operations of a bank. In the following pages I
have narrated my experience, observations and all the working activities which I
observed during my internship period at Askari Bank.

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 Table of Contents

DEDICATION..........................................................................................................................................IV

ABSTRACT................................................................................................................................................V

LIST OF ABBREVIATIONS...................................................................................................................X

EXECUTIVE SUMMARY......................................................................................................................XI

CHAPTER 1..............................................................................................................................................1

INTRODUCTION......................................................................................................................................1

1.1 PURPOSE OF THE STUDY.....................................................................................................................1

1.2 IMPORTANCE OF STUDY.....................................................................................................................2
1.3 PURPOSE OF THE REPORT...................................................................................................................2
1.4 SCOPE OF THE STUDY.........................................................................................................................2
1.5 METHODOLOGY OF THE STUDY..........................................................................................................2
1.5.1 Secondary Data.........................................................................................................................2

CHAPTER 2................................................................................................................................................4

INTRODUCTION TO THE ORGANIZATION.....................................................................................4

2.1 BANKING OVERVIEW.........................................................................................................................4

2.1.1 Trends of the Banking Industry.................................................................................................5
2.1.2 CONSUMER FINANCING...................................................................................................................5
2.2 HISTORICAL BACKGROUND...............................................................................................................6
2.3 GENERAL INFORMATION....................................................................................................................7
2.3.2 Mission......................................................................................................................................7
2.3.3 Core Values...............................................................................................................................8
2.4 CORPORATE OBJECTIVES...................................................................................................................8
2.5STRATEGIC PLANNING........................................................................................................................8
2.6 CORPORATE PROFILE.........................................................................................................................9
2.7 BRANCH NETWORK..........................................................................................................................10
2.7.1 AKBL Mansehra Organizational Chart..................................................................................11
2.8 FINANCE DEPARTMENT....................................................................................................................12
2.8.1 Scope of Activities of the department......................................................................................12
2.9 MARKETING DEPARTMENT..............................................................................................................13
2.9.1 Customer Services...................................................................................................................13

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 2.10 OPERATION DEPARTMENT.............................................................................................................13
2.10.1 Embossing Department.........................................................................................................14
2.10.2 Mailing Department..............................................................................................................14
2.10.3 Collection department...........................................................................................................14
2.10.6 IT Department......................................................................................................................15
2.11 ACCOUNT OPENING PROCEDURE....................................................................................17
2.12 REMITTANCES...........................................................................................................................26

CHAPTER 3..............................................................................................................................................28

PRODUCTS & SERVICES.....................................................................................................................28

3.1 CONSUMER BANKING SERVICES....................................................................................................28

3.2 ASKARI FINANCE AND LOANS.........................................................................................................31
3.3ASKARI BANKING SERVICES.............................................................................................................33
3.4 INVESTMENTS PRODUCTS.................................................................................................................33
3.5 AGRICULTURE FINANCE SOLUTIONS................................................................................................37
3.6 CORPORATE & INVESTMENT BANKING GROUP (CIBG)................................................................38
3.6.1.1 ASK SONA CARD........................................................................................................................39

CHAPTER 4..............................................................................................................................................43

ANALYSIS OF ASKARI BANK.........................................................................................................43

4.1 INTRODUCTION.................................................................................................................................43
4.1.1 Purpose of Financial Analysis................................................................................................43
4.2 BALANCE SHEET..............................................................................................................................44
4.2 ANALYSIS.........................................................................................................................................46
4.3 VERTICAL ANALYSIS OF BALANCE SHEET.......................................................................................46
4.4 HORIZONTAL ANALYSIS OF BALANCE SHEET..................................................................................49
4.5 RATIO ANALYSIS.............................................................................................................................51
4.5.2 Net Working Capital...............................................................................................................52
FORMULA...............................................................................................................................................52
4.5.3 Debt to Equity Ratio................................................................................................................53
4.5.4 Debt Ratio...............................................................................................................................54
4.5.5 Equity Ratio............................................................................................................................54
4.5.6 Net Interest Margin:...............................................................................................................55
4.5.8Earning Asset to total assets....................................................................................................56
4.5.9 Return on Earning Assets........................................................................................................56
4.5.10 Equity to Total Assets............................................................................................................57
4.5.11 Efficiency Ratio.....................................................................................................................57
4.5.12 Credit to Deposit ratio(CD ratio).........................................................................................57
4.6 S.W.O.T. ANALYSIS........................................................................................................................58

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 4.6.1 Strength...................................................................................................................................58
4.6.2 Weaknesses.............................................................................................................................59
4.6.3 Opportunities..........................................................................................................................60
4.6.4 Threats....................................................................................................................................60

CHAPTER 5..............................................................................................................................................62

FINDINGS/ RECOMMENDATION......................................................................................................62

5.1 FINDINGS..........................................................................................................................................62
5.2 CONCLUSION....................................................................................................................................62
5.3 RECOMMENDATIONS........................................................................................................................63

REFERENCES.........................................................................................................................................65

viii
 ACKNOWLEDGEMENT

A milestone of this nature could never have been possible to achieve without the
support of galaxy of some truly loving persons. The events and the process leading to
the accomplishment of my objective have given me a realization in depth of immense
blessing of Allah.

Many people have contributed in the successful completion of this internship report.
My great appreciation goes to whole team of Askari Bank Ltd Mansehra.

They provided me with every kind of help in the completion of this report. Let me also
thank my teachers of Government College of Management and Science, Mansehra
for the knowledge they gave me and their guidance in every field. I would also like to
thank Professor Yasir Taj for his guidance. Last but not the least I would like to thank
to my parents who provided me love, support, patience & good knowledge.

Muhammad Ijaz

ix
 LIST OF ABBREVIATIONS

AKBL Askari Bank Limited

APR Annual Performance Report

ATM Automatic transaction machine

CA Chartered Accountants

DD Demand Draft

ICAMP Institute of Cost and Management Accountants in Pakistan

ICAP Institute of Chartered Accountants in Pakistan

JO Junior Officers JO

LPR Leave Preparatory To Retirement

MAP Management Association of Pakistan

MO Manager Operations

MTO Management Trainee Officers

NIC National identity card

OJT On Job Training

PKR Pakistani Rupees

SAARC South Asian Association for Regional Corporation

SAFA South Asian Federation of Accountants

SBP State Bank of Pakistan

SWOT Strength, Weaknesses, Opportunities and Threats

HRD Human Resource Department

HRIS HRM Information System

HRM Human Resource Management

VHS Voluntary Handshake Scheme

VP Vice President

x
 EXECUTIVE SUMMARY

This internship report consists of profile of the banking sector (industry), its origin the
functioning, how the banks are classified on the basis on function, ownership etc the
trend being followed in the industry. Besides the above mentioned this report is focused
on Askari Bank and to be more precise it discusses the inner details of the bank situated
in Mansehra. Askari Bank origin and its setup in Pakistan are also discussed in the
report.

Askari bank came to Pakistan and gave banking sector a new horizon, today Askari
Bank has set firm foot in the industry.

The report further guides through the department and working of the general banking.

The activities taking place in the bank, the varies products of banking are discussed in
the report.

xi
 CHAPTER 1
INTRODUCTION

Internship is an integral part of all the management courses at Govt. College of

Management Sciences, Mansehra. The Students of BBA Hons are also required to
undergo an internship program of eight weeks in any Foreign or Domestic Bank of
the country. Comprehensive report writing follows the internship. The internee is
required to submit an internship report to the Head of Management Science
Department, which is properly evaluated. The internee is also required to undergo
a viva-voca, in which he/she is asked about the different activities he/she has
performed in the organization.
To fulfill my academic requirement of BBA Hons course, I did my internship in
Askari Bank Mansehra Branch. Although the internship was carried out in the
entire bank departments, like
 Deposits Department
 Bills & Remittances
 Accounts Department
 Credits Department

1.1 Purpose of the study

Apart from the degree requirement of BBA the basis idea of this report is to
analyze the activities preformed by the bank during the internship, also to analyze
the operations carried out in each department especially Deposits Department &
Credits Department of Askari Bank , Mansehra Branch. Besides the analysis,
certain recommendations are also made for the improvement.
In addition this study would be helpful for the students of banking and finance as
well as professional bankers to gain an additional insight into the banking sector of
our country.

1
1.2 Importance of Study
Banks play a central and a very important role in the economic life of a country.
That’s why they are considered as the lifeblood of modern economy. Today no one
can deny the importance of banking in the economy. They facilitate and expedite
trade and commerce and provide a variety of services that one can’t imagine with
out banks. Besides this, the Askari Bank plays an important role in the economic
development of Pakistan.

1.3 Purpose of the report

The purpose of the report is to critically evaluate the operations of each department
of Askari Commercial Bank at branch level. The internship was carried out to
evaluate the efficiency o\f management structure. Based on the analysis certain
recommendations are made for the improvement.
The study was carried out and the report being presented for the fulfillment of
degree requirement of BBA Hons at the Govt College of Management Sciences
Mansehra

1.4 Scope of the study

The main focus of the study is to describe the working of Askari Bank at branch
level. An evaluation of selected departments is carried out, and after some critical
analysis recommendations are given.

1.5 Methodology of the study

The study makes use of one kind of data, secondary source.

1.5.1 Secondary Data

Certain types of information such as the background details of the organization can
be obtained from available published records, the official web site of the

2
organization and other sources. Other types of written information such as
company policies, procedures and rules can be obtained from the organization’s
records and documents. The advantage of this data is that we don’t have to search
for the needed information and the disadvantage of this data is that the information
may not be up to date as changes occur in the organization time. For this report the
secondary data is taken from annual reports of 2017-2018.

3
 CHAPTER 2
INTRODUCTION TO THE ORGANIZATION

2.1 Banking Overview

Banking is a standout the most the touchy organization everywhere thought the
world and assume imperative part in the economy of a nation in Pakistan is a no
exception and in a contemporary universe of cash and economy. The keeping
money arrangement of economy is a verifiable determinant of its development as it
gives a productive channel that courses reserves from surplus parts in the economy
towards shortfall ones.

It impacts and encourages a wide range of however coordinated financial exercises

like assets activation, destitution disposal, and dissemination of open finance.
Banks assume positive and fundamental part in the general financial advancement
of the nation.

Pakistan has an all around created saving money framework, which comprises of a
wide assortment of organizations going a national bank to commercial banks and
to particular officers to cook for exceptional prerequisites of particular segments.
The nation began with no advantageous saving money organize in 1947 however
saw exceptional development in the initial two decades.

A noteworthy accomplishment of the changes procedure has been the change of an

essentially state clamed and frail managing an account part into a more
advantageous, market based framework, possessed by the private division. This has
been encouraged by the rebuilding of real banks, continuous union of the segment
through mergers and acquisitions, reinforcing of the administrative administration
and upgrades in straightforwardness, corporate administration and credit culture.

4
2.1.1 Trends of the Banking Industry

Pakistani Banking Industry these days has indulged itself in the following to fulfill
the needs of the society.

 Consumer Financing
1. House financing
2. Auto financing
 Micro credit financing
 Islamic Banking

2.1.2 Consumer financing

Most of the commercial banks have ventured into consumer financing. Consumer
financing as the name indicates is simply financing for their consumer that may
include financing for household products. Consumer financing also involves two
major categories of products being financed today i.e. House financing & Auto
financing.

 House Financing is a part of consumer financing as it is also financing

of a product which is of vital use to the consumers. It is basically
providing funds to the consumer especially for the purpose of buying or
leasing a house. In some banks it is also known as house loans.

 Auto Financing is another vital idea attempted by keeping money

nowadays and is undoubtedly, the most productive division too for a
bank nowadays. Car financing is additionally as the name shows
financing for Automobiles.
In the previously mentioned drifts there is an exceptionally obvious
advantage for the client that is simple acquiring of homes and autos.
Banks pay the sum required for the particular thing of procurement and
them the client pays back in portion or according to his/her attainability,
the winning of the bank in this methodology is the thing that it receive
consequently of helping out to the clients, the bank charges a specific

5
 measure of enthusiasm on the sum it provides for the client for acquiring
of the house or the auto and that is the place they make benefits

2.1.3 Micro Credit financing:

Micro financing focuses on the people with personal commitment to improve their
lot, do hones labor and have a genuine need for small loans.

Large loans simply few beneficiaries and similarly if big loans default their losses
can be equally hazardous. Converse is true for Micro Credit Loans.

Due to the tough economic condition and failure of giant industrial enterprise all
over the world, people have started shifting from big loans to small loans and
similarly from industrial financing to consumer financing.

2.1.4 Islamic Banking:

Islamic banking is a phenomenon which is continuously gaining popularity in the

country, a –lot of effort is being put in to make Islamic banking penetrate through
the conventional banking. The SBP has initiated the process the process of
converting conventional banks into Islamic banks while the government has
initiated a parallel banking strategy of promoting Islamic banking alongside the
conventional banking. Islamic banking is not much different from the conventional
banking in terms of the processes being carried out it deals with all in a more
Islamic way for e.g. they don’t charge in interest in Islamic banking. They only
take profits which are in fixed amounts of money not interest rate over the loan
disbursed.

2.2 Historical Background

Askari bank Limited (the Bank) was incorporated in Pakistan on October 9.1991 as
a public limited company and is listed on the Karachi, Lahore and Islamabad Stock
Exchanges. The registered office of the Bank is situated at AWT plaza, the Mall
Rawalpindi. The Bank obtained its business commencement certificate in February
26, 1992 and started operation form April 1, 1992. Army Welfare Trust directly

6
and indirectly holds a significant portion of the Bank’s share capital at the period
end.

The Bank has network of 516 branches / sub branches, including 94 devoted
Islamic banking branches and a wholesale bank branch in Bahrain. A shared
network of 617 onsite/offsite ATMs covering all major cities in Pakistan supports
the delivery channel for customer service, and plays a important role in Pakistan
financial services industries, Askari bank is now leading the way to the most
modern and dynamic banking in the country the bank is a scheduled commercial
bank and is principally engaged in the business of banking as defined in the
banking companies ordinance, 1962.
and optimum use of technology are the hallmarks of its corporate strengths.
While capturing the largest market shares among the new banks. AKBL has
provided good value to its shareholders. Share price of AKBL has remained
approximately 15% higher the average share price of quoted banks during the last
four year.
Askari Bank is principally engaged in the business of banking as defined in the
banking company’s ordinance, 1962.

2.3 General information

2.3.1 Vision
To be pre-eminent financial institution in Pakistan and achieve market recognition
both in quality and delivery of service as well as the range of product offering.

2.3.2 Mission
To be the leading private sector bank in Pakistan with an international presence,
delivering quality service through innovative technology and effective human
resource management in a modern and progressive organizational culture of
meritocracy, maintaining high ethical and professional standards, while providing
enhanced value to all our stake-holders, and contributing to society.

7
2.3.3 Core Values
The intrinsic values, which are the corner-stones of its corporate behavior, are:
 Commitment
 Integrity
 Fairness
 Teamwork
 Service

2.4 Corporate Objectives

 To achieve sustained growth and profitability in all areas of business.

 To build and sustain a high performance culture, with a continuous

improvement focus.

 To maximize use of technology to ensure cost–effective operations, efficient

management information system, enhanced delivery capability and high service
standards.

 To develop a customer–service oriented culture.

2.5Strategic Planning
 To comprehensively plan for the future to ensure sustained growth and
profitability.

 To facilitate alignment of the Vision, Mission, Corporate Objectives and with

the business goals and objectives.

 To provide strategic initiatives and solutions for projects, products, policies and
procedures.

 To provide strategic solutions to mitigate weak areas and to counter threats to

profits.

 To create and leverage strategic assets and capabilities for competitive

advantage.

8
2.6 Corporate Profile
Board of Directors

Lt. Gen Syed Tariq Nadeen Gilani, Hl (M) (Retd)

Chairman

Lt. Gen Tariq Khan, Hl (M) (Retd)

Director

Lt. Gen Javed Iqbal, Hl (M) (Retd)

Director

Dr. Nadeem Inayat

Director

Mr. Rehman Laiq

Director

Mr. Manzoor Ahmed (NIT)

Director

Mr. Kamal A. Chinoy

Director

Syed Ahmed Iqbal Ashraf

Director

Mr. Mushtaq Malik

Director

Brig Saleem Ahmed Moeen SI (Retd)

Director

Mr. Abid Sattar

President & Chief Executive

9
2.7 Branch Network

The Bank has network of 516 branches / sub branches, including 94 devoted
Islamic banking branches and a wholesale bank branch in Bahrain. A shared
network of 617 onsite/offsite ATMs covering all major cities in Pakistan supports
the delivery channel for customer service, and plays a important role in Pakistan
financial services industries, Askari bank is now leading the way to the most
modern and dynamic banking in the country the bank is a scheduled commercial
bank and is principally engaged in the business of banking as defined in the
banking companies ordinance, 1962.

10
11
 2.7.1 AKBL Mansehra
Organizational Chart

　 Source: Self Made

2.8 Finance Department

Finance is the significant main impetus behind an association, whatever the

business is, it might pass up a great opportunity some other office which will have
an impact however in the event that it passes up a major opportunity finance the
business can essentially not run. The essential thought before doing any business is
to gain benefits, and it is unrealistic which the finance individual. In the event that
the firm doesn’t know it costs it won’t know its surplus salaries also. Great finance
is the way to a fruitful business.
 The part of the bolster capacities in the business administration is starting
any cutting edge business work as the essentially bargain in dealing with
the inward flow of the association to help with achievement of business
target, execution of system and to authorize a sound control environment
Of blending productivity with administration objectives.
 It is one of the bolster bureaus of all the division of the bank. This office is
in charge of the accompanying capacities. Preparation of financial budget
for the annual operation of the bank.
 Recording of transactions pertaining to the annually operation of the bank.

12
  Calculating and comparing the variances in the actual results with the
budgeted amounts.
 Reconciliation of various accounting records with the records for the
external entities.
 Settlement of dues of the acquirer banks and other parties.

2.8.1 Scope of Activities of the department

The finance department of the bank is responsible for the budgeting, accounting
and reporting of all the operations of the bank.

The finance department of the bank directly reports to the Group head consumer
finance and all the reports send to the head office and other authorities are under
approval and authority of the group head

Consumer finance.

The finance department is of keen interest to the operations

department. It further include different departments, each heaving a

very vital role to pay.

 Payables
 Reconciliation
 IP ( item processing )
 Settlement

B.T.F

Balance transfer department facility. Askari bank offers a balance

transfer facility to all its members an easy and convenient way to transfer
and pay the existing balances of their accounts, issued by other bank in
Pakistan, through their Banks account.

2.9 Marketing Department

The marketing department handles the activities regarding the promotional

activities that are held time to time and marketing agreements with different
retailer for getting factory prices of their products in order to make their products

13
more attractive to the customers by cutting down prices on buying from their credit
card. Like special discount on purchases from credit card.

2.9.1 Customer Services

Customer services is a very self explanatory term .Customer services involve

Services like; after services and satisfying customer needs in case they are Facing
any problems in the services They also handle the application declined by
verification department, by Reviewing them and sending letters to re apply for
clients if they are legible.

2.10 Operation Department

Survival and success of any organization requires its operation to be tightly

monitored and performed well. Askari Bank believes in handling its operation
held. The operation department has a hawk’s eye over all the departments working
because of bank but certain departments under the Operation department are;
 Embossing Department
 Mailing Department
 Recovery Department
 Collection Department
 Authorization Department
 Designing Department
 Human resource &Greeting Department
 IT Department

2.10.1 Embossing Department

They receive data of clients; their work function is to print the account

Numbers it is very easy to say but department has its own significance.

2.10.2 Mailing Department

Mailing Department has a very vital role in the structure their basic tasks

Are listed below

14
  Receive mails; receiving is one of the jobs of this department this is pretty
tedious task receiving mails for the entire bank , the mail include; receipts,
new application, billing application etc.
 Bills Mailing; The payment of and for the bank also follow the path which
pass the mailing department
Besides the above mentioned is also responsible for the inventory
Caretaking for the bank.

2.10.3 Collection department

These are the people who are always being ‘’CURSED” by the customer
because to pay amount from y our very own pocket is not an easy thing.
Plastic memory is just like honey when we use it. It gives us a yummy taste
because we are not using our own money, but when we receive our bills we
feel like heaving chilly taste with lots of black paper in a very pleasant way.
They make calls ,& calls (bund of call) to late payment holder up till 3
month of bill issuance. They make people afraid to collect due payment.
2.10.4 Authorization;
This department monitors all transaction being made on the accounts
through the system. This department also looks for any fraudulent activities.

2.10.5 HR & Greeting Department

Human resource department has a check on the entire system and make sure
that the employee are performing their best. Some activities performed by
HR department are :

 Hiring new employee.

 Contract Renewal.
 Performance Appraisals
 Increment in salaries
 Bonuses Decisions
 Leaves

15
 Greeting employees are there to greet walk in customers and guide them.

2.10.6 IT Department

IT is a standout amongst the most critical areas nowadays, no association is

finished without the from IT division comparable is the situation with Askari
Bank, IT office has the most vital part that is joining the offices with each other,
each office is connected with the office by method for system administration of
computer and a ratio with around 300 phone set is laid in the inside. The IT office
has significantly more to contribute in the inside for example everything these days
is done on PCs and there are distinctive programming’s for various business
exercises, the IT division continues everything prepared for each office. This
division however does not have a noticeable part but rather can no ifs ands or buts
be alluded to as the foundation of the organization.

The name bank is derived from a Latin word bancho meaning desk/bench, used
during the renaissances by the Florentines bankers, who used to make transactions
above a desk covered with a green table cloth.

The first modern bank was founded in Italy in Genoa in 1406; its name Bancu
disan Giorgio (Bank of St George).

The word bank can be traced down to the ancient Roman Empire, when money
lenders would set up their stalls in the middle of an enclosed courtyard called
macella on a long beach called bancu

A banker or Bank is a financial institution that acts as payment agent for

customers, and borrows and lands money. Banks act as payment agents by
conducting checking or current accounts for customers, paying cheques draw by
customers on the bank, and collecting cheques deposited to customers’ current
accounts.

Banks borrow money by accepting funds deposited on account, accepting term

deposits and by issuing debt securities such as bank notes and bonds. Bank lends
money by making advances to customers on current account, by making

16
installment loans, and by investing in marketable debt securities and other forms of
lending.

Banking companies ordinance of 1962 defines banking as “banking means

accepting, for the purpose of lending or investment, of deposits of money from
public; repayable on demand or otherwise, and withdraw able by cheques, Draft, to
order or otherwise’’.

2.11 ACCOUNT OPENING PROCEDURE

Opening of ledger is the essential stride to a relationship between the bank and the
client. As the opening of a financial balances by the man makes him a client of the
bank, the record opening procedure must not b viewed as only a convention.
Knowing the client ought to be the goal of the investor and client due persistence
must be done before foundation of the relationship. The basic documents to b
obtained at the time of opening of account are:

 Account opening form ( Annexure ‘I’)

 National identity card or passport
 Specimen signature card ( Annexure ‘II’)
 Additional documents depending on the constitution of the
account

Know your customer (KYC):

While opening records of clients, every single sensible exertion must make to
decide the genuine character of the client and the sources and uses of assets. To
have a uniform system for client due constancy, a know your customer (KYC)
form (Annexure ‘III’) has been acquainted which is with be finished by the record

17
opening officer/operation chief/branch administrator. over the span of gatherings
with the client to finish the record opening convention, they ought to be gotten
some information about the kind of the exchanges for which the financial balance
would be utilized and any data accumulated must be recorded on the KYC form.
Any additional data felt fundamental and acquired amid discussion with client
ought to be recorded on the KYC form and set on record.

Informal session with the customer:

An informal session with the customer should be arranged to assess and ascertain
his/ her credibility. While having a face to face interactive session with the
customer, following point must be borne in mind, so that at time of filling the KYC
form, comments column would contain all the required and necessary information.

For a salaried person

 Name of employer
 Designation of the customer
 Approximate salary
 Area of residence
 Residence status whether owned, rented etc.
 Expected inflow/ transfer of funds in the account
 Overall background
 Source of funds
 Accounts with other banks
 Any other information

For self-employed:
 Name of the concern
 Constitution of the concern
 Field of operation
 Nature of transactions
 Expected inflow/ transfer of funds in the accounts
 Source of funds

18
  Legitimacy of the business
 Accounts with details of facilities with other banks
 Area of residence
 Residence status where owned, rented etc.
 Overall background
 Any other information

For an organization
 Check all vital documentation as specified in the manual has been
acquired and all fundamental customs of record opening have
been finished.
 Obtain brief profile of the accomplices, executive and so forth to
learn their validity.
 Take satisfactory measure to acquire all pertinent data i.e.free
check of the accomplices, executive and so on and the
association.
 Obtain a report form the client’s other /past brokers
 Account opening officer /director operations/branch administrator
ought to by and by meet the key people of the association and
lead their due persistence.

Account opening form:

A senior officer ought to be assigned by the branch supervisor to handle

the record opening capacity. Proceeding opening of the record, the record
opening structure and all the related archives must be examined and
endorsed by the branch supervisor actually. It must be guaranteed that all
segment of the record opening structure are effectively and appropriated
filled the client has perused and comprehended Rules and regulations for
lead of records that are imprinted on the turn around of the record opening
structure.

No segment of the shape ought to be left clear and sections not relevant to
a specific client ought to be checked so to make preparations for
unapproved increments.

19
 Taking after rules must be followed in such manner:
 Title of record must be in square letters and it ought to validate the
name on the National Identity Card/passport.
 The sort of record i.e. current, PLS or Term must be obviously
specified.
 The status of the record holder i.e. occupant or Non-Resident must
be particularly checked
 The cash in which the record is to be opened must be indicated.

TYPES OF ACCOUNTS

Current Account

It is an account in which profit is paid on the balances. Any individual,

Firm, charitable institution, corporation, association etc, and residents as well as

non-residents can open and operate a current account.

Profit and Loss Sharing Account

It is an account in which profit is paid on the balances. Depending on the

Nature of the account the profit is calculated and credited to the account monthly,

Quarterly or bi-annually. Temporary Running Finance facility is not extended to

PLS Accounts.
 Profit Calculation and Payment
Depending on the nature of the account i.e. whether the profit is to
be
On minimum monthly balance, average monthly balance or on daily
product basis, the same must be defined in the system. The indicative
rates of profit are to be fed into the system which would then
automatically the profit and credit the account on monthly, quarterly or
half-yearly basis as the case may be.
 Deducting of withholding tax on profit

20
 The system automatically calculated the amount to be deducted as
withholding
Currently 10% for resident and 30% for non-residents on profit paid
and credits the respectively tax payable head for onward payment to
the tax authorities. The withholding tax so deducted must be
deposited in the Govt treasury within seven days of deduction.
Withholding tax on profit shall not be deducted if the customer
submits a valid tax exemption certificate issued by the Income tax
Commissioner.

 Deduction of Zakat
Zakat would be deducted @ 2.5% on the credit balance over and above
the declared NISAB for the year. PLS account holders would be required
to furnish a Zakat
Exemption Certificate on the prescribed format to be exempted from this
compulsory deduction. The exemption certificate must be executed and
submitted to the branch, one month prior to the month of Ramadan.
Signature of the customers must be verified on the Zakat Exemption
Form. A check has to be applied in the system in case of Zakat exemption
failing which the system would automatically debit the same from the
accounts on the 1st day of Ramadan each year. The NISAB and procedure
for deposit of Zakat is circulated each year before the 1 st day of Ramadan
by the systems and operations department, Head Office.

Profit and Loss Sharing Term Deposit Receipt

PLS TDR is a time deposit for a fixed tenure in the shape of a deposit receipt
Payable on demand. The rate of return applicable on PLS TDR is base on the
Indicative rate of profit declared by the system operations department. Head Office
Full account opening formalities including KYC procedure should followed for
Issuance of PLS TDR. The customer however should be encourage to open an

21
account. As the PLS TDR is in the shape of deposit receipt, no cheque book is
Issued. In case of deposit through cash, voucher would be prepared by the
Concerned officer and handed over to the customer for deposit of cash with
theTeller.

 Silent features:
 It is not negotiable
 It is not transferable
 Rate applicable on the original Term Deposit would be
applied on the whole completed period in case an account is
maintained with the branch issuing the PLS TDR
 Withholding tax at 10% for non-resident would be deducted
from the profit amount
 In case where the instruction are for roll over on maturity,
same would be rolled over and converted into a new PLS
TDR

 Preparation of a PLS TDR

Each branch is supplied with a stock of pre-numbered
printed blocks of PLS TDR. The same being security stationary
must be kept under lock and key in dual custody and the running
block, which is in used and in possession of the concerned officer,
must be kept in the safe at the end of the day. The PLS TDR is in
two parts, the Counterfoil that is retained by the bank as a
permanent record and the Receipt, which is given to the customer.
While is issuing the PLS TDR following is recorded:
- Amount of deposit in words and figures
- Tenure
- Name of depositor
- Maturity due
- The amount in figures is imprinted by a cheque writer
- Signed by two authorized signatories as per signing
instruction

22
 The PLS TDR is delivered to the depositor upon
acknowledgement which is his signature on the reverse of the
counterfoil which would be verified from the signature on the
Account Opening Form.

 Due Date Diary:

A Due Date Diary shall be maintained for maturity of TDR’s.

FOREIGN CURRENCY ACCOUNTS

Foreign Currency Accounts can be opened in US Dollars, pound sterling.

Japanese Yen and Euro for both resident and non-resident. The account
opening procedure would be discussed and the following types:

i. Current
ii. Saving
iii. Fixed Deposit
Additional requirements and exceptions are outlined hereunder:
 No Zakat is deducted
 Interest on Saving account and Fixed Deposit are circulated by the
International division
 Prior approval of International Division would be sought for deposit of 3
months and above
 Deposit in cash should be avoided if the retention period is less than 2
weeks
 All deposits and withdrawals in all types of foreign currency accounts along
with balances in each foreign currency are to be communicated to the
treasury Division on a daily basis as per the cut off time.
 Deposit in cash would be subject to cash handling charges as per Schedule
of Charges in force.

Safe custody & Deposit Facility

23
 Safe custody Facility

 Bankers accept valuables from customers as they have adequate security

Arrangements.
 Banker- Customer Relationship is based on the contract of bailment.

Bailment:

It is the delivery of goods by one person for some purpose upon a contract that the
goods shall when the purpose is accomplished shall be returned or otherwise
disposed of according to the directions of the persons delivering them.

Obligation of the banker:

 Banker should take proper care

 Bailee has to return the goods subject to the demand from the bailor
 Banker should not use the articles
 Banker has to deliver the goods to the customer according to his instructions

Receipt of securities:

Sealed Boxes:

- Bank accept sealed boxes of convenient sizes

- While accepting a box banker should see that the box is seal with the
customer’s seal
- Words “CONTENTS UNKNOWN” should be prominently written on such
boxes Sealed packet containing wills:

- Banker also accepts from customers for safe custody wills or sealed packets
said to contain a will

24
 - With the instruction to deliver the packet after his death to a named person

- Before delivering the packet banker should satisfy himself that the person is
named as an executor in the will
Delivery of securities
 Full Delivery; Customer has to surrender receipt duly discharged/ signed by
him
 Part Delivery; Customer has to submit a delivery order along with receipt
 The bank will strike out the delivered articles from the receipt

Operation of locker

 Locker operations are controlled by contract, which contains the rules and
conditions which govern the vault operations
 So contract is the basic document that set out the relationship between
banker and a customer

Guidelines to minimize improper access

 in case of joint locker, never deviate from its terms

 never allow access even to an authorized agent on notice of death, mental
incapacity or in solvency of the licensee until legal requirement have been
properly fulfilled
 never allow excess if served with an attachment order or other restraining
orders without first consulting the legal department
 customer’s keys should never be in the possession of the custodian of the
vault

Licensing of lockers

 lockers can only be rented out to the legally capable persons

 Can be allotted singly or jointly
 Filling up and signing of application from and SS card
 Admission of signatures

25
  Pasting of application forms
 Allot locker from the “locker chart” and mark locker numbers so allotted in
pencil on the chart
 Demonstrate operation of the locker to the licensee
 Keys of the un-rented lockers and those surrendered by the licensees must
be kept in the safe under dual control of the officers

Rental Key Deposits

 Initial recovery of rent & key deposit must be recorded on application form
 Recovery of charge are to be balanced on monthly basis and record of each
licensee of lockers is to be maintained in locker issue register
 Record of key deposits and their subsequent refunds is to be made in the
locker issue register
 As rent of locker is received in advance the custodian of locker must check
the record and diaries them for necessary compliance
 In case rent is not deposited within 7 days from the date it becomes due the
licensee be requested to deposit the rent, subsequent reminders be sent on
monthly basis and if after 4 reminders the rent is not received a notice be
sent through Registered A/D giving therein 30 days to deposit the rent and
in case of failure the locker will be broken open

2.12 REMITTANCES

“Transfer of funds from one place to another”

Know Your Customer

 The officer in charge of remittances department should check the following

registers on daily basis
 Inward Remittances Register
 Outward Remittances Register
 Travellers Cheque Register
26
 
 Clear &complete particulars of the beneficiary of outward remittance
should be obtained & recorded in the Remittances Application Form
 Genuineness of funds being remitted should be investigated keeping in
mind following factors:
 Debit in the account is not an aggregate of smaller credits
 Deposit of cash in account immediately prior/along with request of
remittances

 Several account are not being debited to build up the aggregate amount of
remittances where nature of business does not justify
 The account is not being used only for the purpose of effecting/receiving
remittances/transfer of funds to other accounts without any business
personal banking related transactions

27
 CHAPTER 3
PRODUCTS & SERVICES

3.1 Consumer Banking Services

3.1.1 Askari Mahana Bachat Account (1 + 3 Years Term)

Askari Mahana Bachat Account is a Term Deposit facility available to individual

customer with the option of 1 and 3 Years tenure. It has been designed keeping in
view savings needs of individual investors who don’t want to block their funds for
longer terms, with a competitive rate of return paid monthly on the 1st of every
month. A financing facility up to 90% will be available for customers if required.

3.1.2 Askari Roshan Mustaqbil Deposit

Askari Bank has launched the Askari Roshan Mustaqbil Deposit, a saving plan
specially designed for individual investors who wish to invest now for a regular
return at a later stage while keeping their principal amount intact. With Askari
Roshan Mustaqbil Deposit you can double your investment in a time period of ten
years. Invest now in the form of monthly deposits for five years and get paid back
the same amount for the next five years while receiving your principal amount in
full at the end of the tenure.

28
3.1.3 Askari Deposit Multiplier Account

Aim higher with your investments with Askari Deposit Multiplier account. This
account is for individual investors whose purpose is long term savings with high
returns. With a tenure of 10 Years and a competitive rate of return on maturity this
account is ideal for investors who wish to start saving for their future today.
3.1.4 Value Plus Deposits

Askari Bank leads the way, yet again with the introduction of Askari Value Plus
Rupee Deposit Accounts, which promise greater financial freedom and security, in
an un-matched way.Now you can open a "Value Plus Account" while enjoying
the flexibility of a normal checking account.

3.1.5 Askari Card

Askari Bank is committed to provide you innovative and competitive solutions to

your banking needs in a more efficient and personalized manner. Your Bank
enjoys a strategic competitive advantage over all domestic players by virtue of its
leadership, large network and technological advancement. In line with our tradition
of innovation, Askari Bank takes pride in announcing launch of Askari Bank's
Debit Card.

29
Askari Debit Card means freedom, comfort, convenience and security, so that you
can have retail transactions with complete peace of mind. Askari Debit Card is
your new shopping companion which enhances your quality of life by letting you
do shopping, dine at restaurants, pay your utility bills, transfer funds, withdraw and
deposit cash through ATM anywhere, anytime.

3.1.6 Travelers Cheques

Askari Bank Limited has always remained at forefront in introducing innovative

and unique products in banking sector. Our financial instruments provide greater
financial freedom and security in an unmatched way to our valued customers.
Askari Bank offers you its "Rupee Traveller Cheques" eliminating all financial
risks while traveling. So avoid risk of carrying cash through Askari Bank's Rupee
Traveler Cheques.

30
3.2 Askari finance and loans
3.2.1 Smart Cash

This personal line of credit would be set up with a specified credit limit upto Rs.
500,000/-
3.2.2 Personal Finance

Personal Finance is a parameter driven product for catering to the needs of the
general public belonging to different segments. One can avail unlimited
opportunities through Askari Bank's Personal Finance. With unmatched finance
features in terms of loan amount, payback period and most affordable monthly
installments, Askari Bank's Personal Finance makes sure that one gets the most out
of his/her loan.

31
3.2.3Mortgage Finance

Askari "Mortgage Finance" offers the convenience of owning a house of choice,

while living in it at its rental value. The installment plan has carefully designed to
suit both the budget & accommodation requirements. It has been designed for
enhancing financing facility initially for employees of corporate companies for
purchase/ construction/ renovation of house.
3.2.4Business Finance

In pursuance of the National objectives to revive the economy of the country,

AKBL is providing loans to small and medium size business enterprises under
Askari Bank's Business Finance Scheme. Our goal is to offer a loan, which enables
business community to receive the financing required by them based on their cash
flows. Our valued customers can enjoy the convenience of getting financing on
attractive terms with the minimum processing turnaround time.

32
3.3Askari Banking Services
Banking was launched under the brand 'Askari Banking', by opening 6 dedicated
Banking branches in major cities of the country. Further expansion is planned with
improved capabilities for offering products conforming to the Shariah principles.
Askari Banking opens the doors for Halal banking solutions. Our objective is to
put in place an efficient banking system suuportive to economic justice and welfare
of society in line with Shariah standards.
A comprehensive range of Banking products and services is bieng offered, in
order to meet customer's demand of Shariah Compliant Banking, in the following
areas:
 Corporate Banking

 Investment Banking

 Trade Finance

 General Banking

 Consumer Banking

Banking products have been approved by the Bank's Shariah Advisor. As per
Shariah requirements, funds and products of Banking are managed seperately
from the Conventional Banking side. All funds obtained, invested and shared in
Halal modes & investments, under supervision of the Shariah Advisor.

3.4 Investments products

3.4.1 Askari Paishgi Munafa Term Deposit
Askari Paishgi Munafa term deposit account is an innovative addition in the wide
range of bank’s products and value added services. This unique product will meet
the immediate financial needs of individual investors who want to invest funds for
a medium term. The most significant feature of this product is that the customer
will receive the entire profit upfront.
3.4.1.1Additional Benefits for Customers:
 Financing Facility up to 80% of Principal amount.

 Free Visa Debit Card issuance.

33
 No Minimum Balance requirement in checking account.

 Free Pay Orders in a month.

 No maximum limit for investment.

3.4.2 Askari Mahana Bachat Account (1 + 3 Years Term)

Askari Mahana Bachat Account is a Term Deposit facility available to individual
customer with the option of 1 and 3 Years tenure. It has been designed keeping in
view savings needs of individual investors who don’t want to block their funds for
longer terms, with a competitive rate of return paid monthly on the 1st of every
month. A financing facility up to 90% will be available for customers if required.
If you need any further information / assistance, please contact your nearest Askari
Bank branch or call at our Toll Free number 0800 00078. You can also mail your
queries along with your interest in our various other products too.

3.4.3 Askari Roshan Mustaqbil Deposit

Askari Bank has launched the Askari Roshan Mustaqbil Deposit, a saving plan
specially designed for individual investors who wish to invest now for a regular
return at a later stage while keeping their principal amount intact. With Askari
Roshan Mustaqbil Deposit you can double your investment in a time period of ten
years. Invest now in the form of monthly deposits for five years and get paid back
the same amount for the next five years while receiving your principal amount in
full at the end of the tenure.
If you need any further information / assistance, please contact your nearest Askari
Bank branch or call at our Toll Free number 0800 00078. You can also mail your
queries along with your interest in our various other products to:

3.4.4 Askari Deposit Multiplier Account

Aim higher with your investments with Askari Deposit Multiplier account. This
account is for individual investors whose purpose is long term savings with high
returns. With a tenure of 10 Years and a competitive rate of return on maturity this
account is ideal for investors who wish to start saving for their future today.

34
3.4.5 Askari value plus deposits

3.4.5.1 The Best You Deserve

Askari Bank leads the way, yet again with the introduction of Askari Value Plus
Rupee Deposit Accounts, which promise greater financial freedom and security, in
an un-matched way.Now you can open a "Value Plus Account" while enjoying
the flexibility of a normal checking account.

3.4.5.2 Types of Value Plus Account

1) Value Plus Current Account
2) Value Plus Saving Account
3) Value Plus Time Deposits

3.4.6 Askari rupee traveller cheques

Askari Bank Limited has always remained at forefront in introducing innovative
and unique products in banking sector. Our financial instruments provide greater
financial freedom and security in an unmatched way to our valued customers.
Askari Bank offers you its "Rupee Traveller Cheques" eliminating all financial
risks while traveling. So avoid risk of carrying cash through Askari Bank's Rupee
Traveler Cheques.
3.4.7 ASKCARD
Askari Bank is committed to provide you innovative and competitive solutions to
your banking needs in a more efficient and personalized manner. Your Bank
enjoys a strategic competitive advantage over all domestic players by virtue of its
leadership, large network and technological advancement. In line with our tradition
of innovation, Askari Bank takes pride in announcing launch of Askari Bank's
Debit Card.
Askari Debit Card means freedom, comfort, convenience and security, so that you
can have retail transactions with complete peace of mind. Askari Debit Card is
your new shopping companion which enhances your quality of life by letting you

35
do shopping, dine at restaurants, pay your utility bills, transfer funds, withdraw and
deposit cash through ATM anywhere, anytime.

3.4.8. Internet Banking Services

In pursuance of our quest to provide the most modern service to our customers, we
offer banking through internet. Askari Bank is the first bank in Pakistan to
provide such service to its valued customers which is absolutely FREE.

3.4.8.1 Important Features

 Balance enquiry

 Funds transfer

 Statement of accounts

 Chage of password

 Free payment of utility bills

 Payment of school fee

3.4.9 Electronic Bill Payment Services

It has always been our endeavour to introduce products and services tailor made to
the requirement of our valued customers. Now you can pay your Utility Bills
through:
 ASKCARD (Askari Debit Card),
 Askari bank's ATMs Nationawide
 Internet Banking Services
 Call Center.

3.4.10 Cash Management Services

Askari Cash Management Services, aimed to effectively manage the accounts
receivable portfolio of medium and large corporate entities. While this service
helps the corporate entities to improve their liquidity, due to our well diversified
branch network.

36
The service primarily aims at providing clearing, collection and cash / transfer
facility to corporate, under one resource center, which will handle the process
through the branches and provide adequate reporting to the corporate clients, on
various aspects of their accounts receivable portfolio, every month.

3.4.11 Investment Certificates

Askari Bank's Investment Certificates not only provide the added security,
investment and monthly return to the customers. These certificates are negotiable
and can be transferred to third party. Investment Certificates can be issued for a
period of 3 months and profit is payable on monthly basis through pre-printed tear-
off coupons.

3.5 Agriculture finance solutions

3.5.1 Kissan Ever Green Finance
Askari Bank has launched this program with the sole motive to provide dignity,
prosperity and freedom to the tiller of the land. The program is designed to help
small, medium and large farmers in meeting their short-term input requirements
against one time sanction and automatically renewable upto 3 years subject to its
stipulated utilization/periodical adjustment. The credit line is sanctioned in the
light of available cash flows and input requirements i.e. Seeds, Fertilizer &
Pesticides etc.

3.5.2 Kissan Tractor Finance

Traditional modes of cultivation viz Bullocks, Camels, horses etc can no longer
keep pace with the demands of present times due to manifold increase in the
population. Power in the form of modern technology is therefore the need of the
hour. To meet this emergent requirement, Askari Bank has launched a Askari
Kissan Tractor Finance to bring power to the fields.

3.5.3 Kissan live stock development finance

In order to supplement the income of the farmer, Askari Bank has launched a
program enabling the farmer to purchase Milch Animals, Goats, Sheep, Poultry
and Fisheries without incurring extra expenditure because of availablility at his

37
farm. He will be able to get milk, meat and eggs etc., which normally do not form
part of his diet. This program has the added advantage that besides fulfilling his
own family’s consumption needs he will be able to market the surplus and earn
additional income. This will further improve their cash flows to repay their other
Loans / Revolving Credit on due date.

3.5.4 kissan farm mechanization finance

Beside Power at the farm i.e. Tractor, the benefits / advantages of power are
maximized with the use of Mechanical Support i.e. modern and improved
equipments which essentially complement one another due to their cost
effectiveness and time efficiency. Askari Bank has launched an Askari Kissan
Farm Mechanization Finance for the assistance of the small farmers and provides
finance for farm equipment, trailer, thresher, drills & rotavators etc.

3.5.5 kissan farm transport finance

A grave handicap that afflicts our farmers is their inability, due to lack of proper
facilities, to take their produce to the market through efficient means of
transportation. This adversely affects the freshness, quality of the product and
denies them the desirable Price-Fetching opportunity. Conversely, they lack
mobility to acquire much needed inputs essential for their farming needs. One can
safely conclude that if provided with appropriate and speedy transport, the farmer
can benefit by enhancing his selling ability and thus increase his income / cash
flow. it is pertinent to mention that a number of Banks, Leasing Companies and
Private Agencies have geared their marketing efforts to concentrate on and have
mainly captured the urban markets. There is no support provided to cater to the
transport needs of deserving rural farmer’s community. Askari Bank true to its
commitment has taken the lead to launch Askari Kissan Farm Transport Finance.

3.6 Corporate & Investment Banking Group (CIBG)

As Askari Bank, we understand the unique business requirements of our corporate
and institutional clients, and accordingly, strive to meet their expectations through
the provision of a customized, relationship based banking approach, through the
Corporate and Investment Banking Group (CBIG)

38
CIBG is a one-window operation that provides all requisite banking services for
our corporate clientele in an efficient, dependable, consistent, and competitive
manner – the objective being to become your “bank of first call” for all your
financial needs.

CIBG is specifically structured to provide dedicated banking services and products

to its corporate customers through two key divisions.

3.6.1 Corporate Banking Division

IBD provides value-added, specialist services and products through a dedicated

team of professionals, with world-class skills, to provide customized solutions to
help our clients meet their strategic objectives. IBD is responsible for seamlessly
originating, executing and distributing all forms of investment banking transactions
ranging from syndicated loans to complex structured and project financing
transactions. Some examples of products offered by IBD include:
 Strategic Advisory

 Privatization Advisory

 M & A Advisory

 Balance Sheet Restructuring

 Syndications

 Project Finance

 Finance

 Private Placements of Debt and Equity

 Issuance and distribution of Term Finance Certificates and Sukuk Bonds.

3.6.1.1 Ask Sona Card

Ask Sona Card is a joint venture of Askari Bank Limited (AKBL) & Fauji Fertilizer
Company Limited (FFCL), specially designed to create convenience and cater to the
business needs of FFCL and its dealers. It is an innovative, high-tech electronic cash
management solution that replaces the existing conventional collections system. The

39
 payment/transaction specific debit card is proprietary technology, with plastic money
features which will revolutionize the concept of transfer of funds.
Askari Bank has become the market leader in cash management solutions with the
launch of Ask Sona Card. Please visit your nearest Askari Bank Branch to avail this
facility.
Features
FAQs

 User-friendly

 Safe and easy to carry

 Plastic money, error free and cost effective

 Highest per-transaction limit of Rs. 2 million with

unlimited number of transactions in a day

 Instant transfer of funds from dealer’s account to FFCL account

 Instant confirmation of merchandise booking

 Ask Sona Card will only be used to purchase products from FFCL

 Ask Sona Card will have an expiration date of 5 years

 Zero issuance and replacement charges (once in a calendar year)

 Card accepted at all FFCL sales points across Pakistan basis

 Instant confirmation of funds transfer through SMS

3.6.2 Askari Kissan Evergreen Finance

Features Details

Product Type: Profit Earning Account

Eligibility: Pakistani resident (individual)

Security: Mortgaged charge on agricultural land through the Zari

Pass Book

Profit Profit on credit balances will be paid on half yearly basis

Amount: as declared by the bank on PLS savings accounts

Tenor: Yearly Basis

40
Markup: The mark-up is charged for the actual days the finance is
utilized

Benefits: A special cheque book is issued to the farmer

Automatic renewal upon adjustment of the entire

principle amount with an annual mark-up

The account is farmer’s friendly in two ways. If the

account is in credit, it earns profit, otherwise it provides
instant finance to the farmer for his agricultural needs

41
 3.6.3 Askari Kissan Tractor Finance
 Features

Features Details

Product Profit Earning Account

Type:

Eligibility: Pakistani resident (owner as well as non-owner farmers)

Tenure: 5 years

Benefits: The farmer will have the privilege of availing non-

funded facility at reduced cost under this program on
account of more equity participation

Good farmer bonus will be available to the borrower

in case the loan is repaid as per terms of sanction

The farmer’s life, as well as his tractor will be

insured against contingencies, which will provide comfort
and peace of mind

Priority in delivery of tractor will be given by

manufacturer as per arrangements with the Bank

42
 CHAPTER 4
ANALYSIS OF ASKARI BANK

4.1 Introduction
The importance of financial statement analysis lies in their utility to satisfy the
question in the mind of stakeholders. Different classes of people are interested in
the financial statements with a view to assessing the economic and financial
position of any business or industrial concern in term of profitability, liquidity or
solvency etc. for example, the commercial banks are mainly interested in short
term liquidity and profitability while prospective investors may be investors may
be interested in long terms liquidity and solvency.
Financial statements among other things include balance sheet and income
statement. Balance sheet presents assets and liabilities of the business at a given
date. Besides showing the ability of the business to service the loans on the
strength of its financial structure and its profitability, helps in judging the impact of
financial and fiscal support.

4.1.1 Purpose of Financial Analysis

The analysis of Financial Statements (FS) is to examine past and current financial
data so the company’s performance and financial position can be evaluated and
future risk and potentials can be estimated. The analysis can yield valuable
information about tends and relationship, the quality of a company’s earnings, and
its financial strengths and weaknesses.

43
4.2 Balance Sheet
2018 2017
 
Assets    
Cash and Balances with treasury bank 49187645 44239325
Cash and Balances with other bank 4093402 3193835
Lending to financial Institution   2250000
Investments 260233987 314956748
Advances 343107147 258693086
Fixed Assets 12791827 9885958
Intangable Assets 741361 842869
Defferd tax Assets 3773779 100755
other Assets 32522174 28448099
Assets attributable to discontinued operaion 214757 327949
  706666079 662938624
Liabilities    
Bills Payable 15512880 10769262
Borrowings 52702323 71587311
Deposits & Other Accounts 573596926 525805051
Liabilities against asset subject to F.lease    
Subordinated debts 9993600 4992800
Deferred tax liabilities    
other liabilities 21178476 17098223
Liabilities attributable to discontinued operaion 81513 140741
  673065718 630393388
Net Assets 33600361 32545236
     
Represented by    
Share Capital 12602602 12602602
Reserves 15588694 12032263
Surplus on revaluation of assets    
Continued Operation 1649197 5142254
discontinued operation 5723 19877
Unappropriated profit 3710867 2703887
  33557083 32500883
Non-controling interest 43278 44353
  33600361 32545236
Table 1 Balance Sheet

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45
4.2 Analysis
The financial data of Askari Bank Limited is analyzed in the following two ways

4.3 Vertical analysis of balance Sheet

2018 2017
  2018% 2017%
Assets      
Cash and Balances with treasury
bank 49187645 6.96% 44239325 6.67%
Cash and Balances with other bank 4093402 0.59% 3193835 0.48%
Lending to financial Institution   0.00% 2250000 0.34%
Investments 260233987 36.83% 314956748 47.51%
Advances 343107147 48.55% 258693086 39.02%
Fixed Assets 12791827 1.81% 9885958 1.49%
Intangable Assets 741361 0.10% 842869 0.13%
Defferd tax Assets 3773779 0.53% 100755 0.02%
other Assets 32522174 4.60% 28448099 4.29%
Assets attributable to discontinued 214757 0.03% 327949 0.05%
operaion
  706666079 100% 662938624 100.%
Liabilities      
Bills Payable 15512880 2.20% 10769262 1.62%
Borrowings 52702323 7.46% 71587311 10.80%
Deposits & Other Accounts 573596926 81.17% 525805051 79.31%
Liabilities against asset subject to
Finance lease
Subordinated debts 9993600 1.41% 4992800 0.75%
Deferred tax liabilities       0.00%
other liabilities 21178476 3.00% 17098223 2.58%
Liabilities attributable to
discontinued operaion 81513 0.01% 140741 0.02%
  673065718 95.25% 630393388 95.09%
Net Assets 33600361 4.75% 32545236 4.91%
       
Represented by      
Share Capital 12602602 1.78% 12602602 1.90%
Reserves 15588694 2.21% 12032263 1.81%
Surplus on revaluation of assets      
Continued Operation 1649197 0.23% 5142254 0.78%

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 discontinued operation 5723 0.00% 19877 0.00%
Unappropriated profit 3710867 0.53% 2703887 0.41%
  33557083 4.75% 32500883 4.90%
Non-controling interest 43278 0.01% 44353 0.01%
  33600361 4.75% 32545236 4.91%
Table 2 Vertical Analysis
4.3.1 Interpretation
Vertical analysis is an analysis of financial statements where the total assets divide
all balance sheet items of asset side and all credit side balances divided by all
liability items, and all income statement items are divided by net sales/revenues.
Common size analyses are extremely helpful to highlight changes over the time in
financial performance and financial conditions of the company. The table shows
Vertical analysis of the balance sheets for the years, 2017 & 2018.
Assets
Assets are things that a company owns and are sometimes referred to as the
resources of the company. An asset is a resource with economic value that an
individual, corporation or country owns or controls with the expectation that it will
provide future benefit. Assets are reported on a company's balance sheet, and they
are bought or created to increase the value of a firm or benefit the firm's
operations. The vertical analysis result for Assets in AKBL’s Balance sheet are
explained below.

Cash and balances with treasury banks 6.67% in 2017 increased to 6.96% in 2018.
Balances with other banks 0.48% in 2017 to 0.59% in 2018. Investments decreased
from 47.50% in 2017 to 36.82% in 2018. Advances 39.02% in 2017 to 48.55% in
2018. fixed assets increased from 1.49% in 2017 to 1.81% in 2018. Intangible asset
are same as 0.1% in 2017 to 0.1% in 2018. Deffered Tax Assets increased from
0.01% in 2017 to 0.5% in 2018. Other Assets increased from 4.29% in 2017 to
4.60% in 2018. Assets discontinued operations are same as 0.03% in 2017 to
0.03% in 2018.

Liabilities

Bills payable increased from 1.62% in 2017 to 2.20% in 2018. Borrowings

decreased from 10.80% in 2017 to 7.46% in 2018. Deposits and other accounts`
increased from 79.31% in 2017 to 81.16% in 2018. Sub-ordinate loans increased

47
from 0.75% in 2017 to 1.41% in 2018. Other liabilities increased from 2.57% in
2017 to 3% in 2018. Liabilities discontinued operations decreased from 0.02% in
2017 to 0.01% in 2018. Total Liabilities increased from 95.09 in 2017 to 95.24 in
2018. Net Assets decreased from 4.90 in 2017 to 4.75 in 2018.

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4.4 Horizontal analysis of Balance Sheet

Table 4 Horizontal Analysis of Balance Sheet

2018 2017 2017 Vs

2018 %

Assets
Cash and balances with treasury 49,187,645 44,239,325 11.18
banks
Balances with other banks 4,093,402 3,193,835 28.16
Lending to financial institutions - 2,250,000
Investments 260,233,987 314,956,748 (17.37)
Advances 343,107,147 258,693,086 32.63
fixed assets 12,791,827 9,885,958 29.39
Intangible asset 741,361 842,869 (12.04)
Deffered Tax Assets 3,773,779 100,755 36.45
Other Assets 32,522,174 28,448,099 14.32
Assets discontinued operations 214,757 327949 (34.51)
706,666,079 662,938,624 6.59
Liabilities
Bills payable 15,512,880 10,769,262 44.04
Borrowings 52,702,323 71,587,311 (26)
Deposits and other accounts` 573,596,926 525,805,051 9.09
Sub-ordinate loans 9,993,600 4,992,800 100
Other liabilities 21,178,476 17,098,223 23.86
Liabilities associated with 81,513 140,741 (42.08)
discontinued operations
673,065,718 630,393,388 6.76
Net Assets 33,600,361 32,545,236 3.24
Represented by
Share Capital 12,602,602 12,602,602 0
Reserves 15,588,694 12,032,263 29.55
Continued Operations 1,649,197 5,142,254 (67.92)

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 Discontinued Operations 5,723 19,877 (71.20)
unappropriate profit 3,710,867 2,703,887 37.24
Non-Controlling Interest 43,278 44,353 (2.42)
33,600,361 32,545,236 3.24

4.4.1 Interpretation

Assets:

The assets of the ACBL have been growing very fast since its inception. This
growth is the result of the massive expansion policy the management has been
following ever since the inception of ACBL .

One of the important ingredients of any bank‘s growth is increase in most of

current assets that is a good sign as it increases their liquidity. Let us first have a
look at the liquid assets.

The Horizontal analysis shows that Cash and balances with treasury banks
increased to 11.18% in 2018 and the Balances with other banks in creased 28.16%
in 2018.

In earning asset, the lending to financial institutions is decreasing whereas the

other investments decreased 17.37% and advances increased 32.63% . However
the investments have decreased in 2018. The 29 %Increase in the fix assets might
be due to branch expansion.

Liabilities:

As regards the liability section of the balance sheet chief liability of bank is its
deposits it generates from its customer. The Horizontal Analysis reveals that Bills
payable increased 44.04% in 2018 and the Borrowings decreased 26% as
compared to 2017.

The ratio of increase in deposits in 2018 is 9.08% which is increase in 2017.

Equity:

Bank‘s Share Capital profits is same as 2017

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4.5 Ratio Analysis
Ratio analysis is the most commonly used analysis to judge the financial strength
of a company. It is a quantitative relation between two magnitudes of the same
kind. This comparison allows the firm to detect major operating differences. the
main categories of ratios are.

4.5.1 Current ratio

The current ratio is a liquidity and efficiency ratio that measures a firm's ability to
pay off its short-term liabilities with its current assets. The current ratio is an
important measure of liquidity because short-term liabilities are due within the next
year.
This means that a company has a limited amount of time in order to raise the funds
to pay for these liabilities. Current assets like cash, cash equivalents, and
marketable securities can easily be converted into cash in the short term. This
means that companies with larger amounts of current assets will more easily be
able to pay off current liabilities when they become due without having to sell off
long-term, revenue generating assets.
The current ratio is calculated by dividing current assets by current liabilities. This
ratio is stated in numeric format rather than in decimal format. Here is the
calculation:

Current Ratio

Current Assets 2017= 44239325+3193835+2250000+314956748+258693086

=623332994
Current Libalities 2017= 10769262+71587311+525805051=608161624
Current Assets 2018=49187645+4093402+260233897+343107147=656622091
Current Libalities 2018= 15512880+52702323+573596926=641812129

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 CURRENT ASSET/CURRENT RESULT
YEARS LIABILITIES
2017 623332994/608161624 10.24%

2018 656622091/641812129 1.02%

Interpretation
Current ratio for the year 2017 is 10.24%, which decreased to 1.02% in 2018

4.5.2 Net Working Capital

Net working capital is a liquidity calculation that measures a company’s ability to

pay off its current liabilities with current assets. This measurement is important to
management, vendors, and general creditors because it shows the firm’s short-term
liquidity as well as management’s ability to use its assets efficiently.
Much like the working capital ratio, the net working capital formula focuses on
current liabilities like trade debts, accounts payable, and vendor notes that must be
repaid in the current year. It only makes sense the vendors and creditors would like
to see how much current assets, assets that are expected to be converted into cash
in the current year, are available to pay for the liabilities that will become due in
the coming 12 months.
Formula

The net working capital formula is calculated by subtracting the current liabilities
from the current assets. Here is what the basic equation looks like.

YEARS CURRENT ASSETS – RESULT

CURRENT LIABILITIES
2017 623332994-608161624 15171370
2018 656622091-641812129 14809962

Interpretation
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The calculation of this ratio show that net working capital in 2017 was Rs.
15171370 while in 2018 it is decreased to Rs. 14809962

4.5.3 Debt to Equity Ratio

The debt to equity ratio is a financial, liquidity ratio that compares a company's
total debt to total equity. The debt to equity ratio shows the percentage of company
financing that comes from creditors and investors. A higher debt to equity ratio
indicates that more creditor financing (bank loans) is used than investor financing
(shareholders).
The debt to equity ratio is calculated by dividing total liabilities by total equity.
The debt to equity ratio is considered a balance sheet ratio because all of the
elements are reported on the balance sheet.

YEARS TOTAL LIABITIES/TOTAL RESULT

EQUITY
2017 630393388/32545236 19.3%
2018 673065718/33600361 20.03%

Interpretation
Debt to equity ratio for the year 2017 is 19.3% while it increased in the current
year 2018 to 20.03%, due to constant decrease in the liabilities

4.5.4 Debt Ratio

Debt ratio is a solvency ratio that measures a firm's total liabilities as a percentage

of its total assets. In a sense, the debt ratio shows a company's ability to pay off its
liabilities with its assets. In other words, this shows how many assets the company
must sell in order to pay off all of its liabilities.

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This ratio measures the financial leverage of a company. Companies with higher
levels of liabilities compared with assets are considered highly leveraged and more
risky for lenders.
This helps investors and creditors analysis the overall debt burden on the company
as well as the firm's ability to pay off the debt in future, uncertain economic times.

The debt ratio is calculated by dividing total liabilities by total assets. Both of these
numbers can easily be found the balance sheet. Here is the calculation:

YEARS TOTAL LIABILITIES/ RESULT

TOTAL ASSETS
2017 630393388/662938624 0.95
2018 673065718/706666079 0.95

Interpretation
Debt ratio is same in 2018 and 2017 i.e 0.95% which should be increased every
year.

4.5.5 Equity Ratio

The equity ratio is an investment leverage or solvency ratio that measures the
amount of assets that are financed by owners' investments by comparing the total
equity in the company to the total assets.
The equity ratio highlights two important financial concepts of a solvent and
sustainable business. The first component shows how much of the total company
assets are owned outright by the investors. In other words, after all of the liabilities
are paid off, the investors will end up with the remaining assets.
The second component inversely shows how leveraged the company is with debt.
The equity ratio measures how much of a firm's assets were financed by investors.
In other words, this is the investors' stake in the company. This is what they are on
the hook for. The inverse of this calculation shows the amount of assets that were
financed by debt. Companies with higher equity ratios show new investors and
creditors that investors believe in the company and are willing to finance it with
their investments.

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 YEARS TOTAL EQUITY/TOTAL RESULT
ASSETS
2017 32545236/662938624 0.04
2018 33600361/706666079 0.04
Interpretation
The equity ratio is calculated by dividing total equity by total assets. Both of these
numbers truly include all of the accounts in that category. In other words, all of the
assets and equity reported on the balance sheet are included in the equity ratio
calculation. Equity ratio for the year 2017 and 2018 is same 0.04% it is a good sign
for the organization.

4.5.6 Net Interest Margin:

Net interest margin (NIM) is a measure of the difference between the interest
income generated by banks or other financial institutions and the amount of
interest paid out to their lenders, relative to the amount of their assets. It is similar
to the gross margin of non-financial companies

Interest Expenses / Interest

Years Income
2017 2071958/16195262 0.12
2018 25059925/18609958 1.4

Interpretation.

This ratio examines how successful a firm's investment decisions are

compared to its debt situations. The interest margin ratio in 2017 is 0.12%
while it increased in 2018 to 1.4% which is favourable for the bank, because
investment decisions are well planed.

4.5.8Earning Asset to total assets

An asset that produces money for a company without any work needing to
be

55
done. Earning assets include such things as loan, Lease, stocks, bonds,
certificates of deposit, and generally anything that earns interest or
dividends.
Earning assets include loan, Lease, investment securities and money market
assets. This ratio show that the contribution of these assets to total assets.

Interest Earned/Total
Years Assets
2017 36267220/662938624 0.05
2018 43669883/706666079 0.06

Interpretation
The ratio of earning to total assets in 2018 is 0.06 and in 2017 it was 0.05which is
almost same, but the increase could be favorable.

4.5.9 Return on Earning Assets.

An indicator of how profitable a company is relative to its earning assets. ROEA
gives an idea as to how efficient management is at using its assets to generate
earnings.

Years Net income/interest

income
2017 2940149/16195262 0.18
2018 1109189/18609958 0.05
Interpretation
Return on earning assets is decreases in 2018 as compared to previous year, due to
inefficient management of AKBL, showing unfavorable trend.

4.5.10 Equity to Total Assets.

The equity to debt ratio show how much AKBL have equity out of total assets.

YEARS EQUITY/TOTAL ASSETS

2017 32545236/662938624 0.04

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 2018 33600361/706666079 0.04

Interpretation.
This ratio shows the ownership of the bank. In both 2017 and 2018 it is 0.04 which
shows in 2018 bank equity are same.

4.5.11 Efficiency Ratio

NPL, are loans that are no longer producing income for the bank that owns them.
Loans become nonperforming when borrowers stop making payments and the
loans enter default. The exact classification can vary from institution to institution,
but a loan is usually considered to be nonperforming after it has been in default for
three consecutive months.

4.5.12 Credit to Deposit ratio(CD ratio)

YEARS ADVANCES/ DEPOSITS

2017 258639086/525805051 0.49

2018 343107147/573596926 0.5

Interpretation.
Credit to deposit ratio shows how much bank uses deposit to advances. In 2017
bank use 0.49% deposit for advances but in 2018 bank use 0.5% deposit for
advances.

4.6 S.W.O.T. Analysis

SWOT analysis gives a very good analysis of what the firm is, what it wants and
what can it do get better than it is at the same time indicating the factors that could
lead to havoc.

SWOT is an abbreviation for:

 Strength
57
  Weaknesses
 Opportunities
 Threats

4.6.1 Strength

Askari Bank has set its firm foot in Pakistan and has gained its strength
over the period of time an effort of enlisting its strengths can be done as
follow;

 The past decade has been the biggest strength because that the time when
there was not much of the competition and it gave time for the company to
adjust and now it has grown better than the rest
 It has a good reward policy of giving bonuses and incentives for its
customers.
 Askari Bank has a flawless customer services
 The MIS they use in the company is always updated well ahead of time
giving the bank an upper edge
 Honesty, Equality and fairness prevail throughout the organization and that
is the utmost requirement.
 The card division has strong network facilities nationwide
 ACBL has got a well-developed on-line system in most its branches.
Remittance development is working very efficiently in transferring the
funds of people due to this system.
 The Bank has also started ATM facility in most of its branches 24-hour
banking is new trend in Pakistan and ACBL has also taken apart in this
trend.
 One distinctive feature of the bank is that it is the only bank working for the
welfare of army officers, which was established by Army Welfare of army
officers, which was established by Army welfare Trust.
 The productivity of the bank is very good. Bank is providing a high quality
service to its customers

58
  ACBL have strength that most of the imports &which are done are handled
by ACKBL.

4.6.2 Weaknesses

 A certain education level should be set for a particular task, it adds up to

the hard-work, the company has some undergraduates as well which can
affect the company
 It’s good to have a friendly working environment but there should be a
code of conduct.
 Because of the increasing workload the employees a being over burdened

 The inventory management is not up to mark

 Promotions and transfer from department is a political issue.

 Bank is not introducing new products and new saying schemes. Bank
should boost the product development and increasing the range of facilities
offered for customers.

4.6.3 Opportunities

 Better and convenient services to employees and business class.

 Expansion of their branch network can be very helpful.

 Engage qualified professionals for providing of existing system as well as

Infrastructure with de-centralized work processes. The human resource
factor plays a critical role maintaining the efficiency and profitability level
of the bank in future.
 Institutionalization of HRM (best person should be posted for best
assignment), depoliticizing the atmosphere.
 Bank can extend its network in other countries.

 It can enhance its profitability by making use of new technology.

59
  The plastic money business still has a lot of potential to grow so it gives the
company an opportunity to introduce new products and services.
 They should keep on looking for opportunities in the market because it’s
first come first served situation.

4.6.4 Threats

 Very uncertain economic condition.

 Actions taken by competitors.

 Political instability.

 Employees turnover rate is too high

 Politics involved in a working atmosphere has never done well for the
company it has always gone the other way round.
 ACBL has many competitors, which are continuously increasing its
products and marketing aggressively. It may cause its customers to shift to
competitors.
 Some other banks have competent taskforce. This is also a threat for ACBL.
Because human resource is the most valuable resource
 Pakistan India relations often create a war danger. This chance of war may
cause army officer and their families to increase the frequency of
withdrawals, which would decrease deposits.

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 CHAPTER 5
FINDINGS/ RECOMMENDATION

Findings and Recommendations are considered to be the most important part of

internship report, without which no report is considered complete and meaningful.
Realizing the importance of this section, efforts have been made to give feasible
recommendations, which are categorized under the following headings.

5.1 Findings
5.1.1 Employee empowerment
Bank recognizes its employees as the prime asset and key contributors to the
performance of the bank and places great emphasis on the attraction, development,
and motivation of its employees.

5.1.2 Better compensation packages

During the year, the compensation package was substantially improved in order to
Enhance employee’s motivation and loyalty.
5.1.3 Involvement of Higher Management
Whatever AIBL have achieved would not have been possible without the
patronage and support of the manager, which is greatly appreciated and
acknowledged.

5.2 Conclusion
After analyzing Askari Bank as a whole and its Finance department in particular
the following outcomes have been concluded:

 One of the major aspects regarding the efficiency of entity is to focus on

the financial management concerned with the acquisition, financing &
management of asset with some overall goal in mind. It has been observed

61
 that the bank relies more on its interest rate giving less attention of utilizing
its earning assets.

 It is concluded that the bank’s ability of decision making is effective and

profitable but its charges may effect on its deposits.

 The bank’s shareholders fund is showing percentage more than the share
capital, which shows that the bank own capital is less than the shareholders
capital.

 Increasing trend in ROA indicates that Askari bank is profitable relative to

its total assets; it means the return on the investments is positive.

 Analysis shows that return on earning assets have decreased as compared to

2009 analysis which indicates that the income generated by the assets for
the bank has decreased.

 Cost to income ratio of the Askari Bank has slightly increased, which
indicates that the firm is less efficient in reducing its cost.

 Corporate customer credibility has decreased during time.

5.3 Recommendations
Low interest rate should be imposed on advancement of loans and high rate of
profit for depositors. Deposit growth and loan growth are also both important. If
deposit growth is weak, other more expensive sources of funds might have to be
tapped. Likewise, if loan growth is sluggish, it will be more difficult for the bank
to earn a profitable spread on the money it controls.

 SBP should maintain the interest rates

 The bank should be efficient in collecting the outstanding loans.

 Bank should control their administrative expenses and spending in

order to maintain a optimal efficiency ratio.

 Higher margins can be a sign of great management. But it could the

result of riskier lending policies. Narrower margins can suggest trouble
on the deposit side and a higher cost of funds. Or it could mean more

62
 conservative lending practices. Context matters when comparing
numbers.

 Bank should enhance and utilize their earning assets for income rather
than depending on the loans and interest income.

 The higher authority should form team-based manager rather than

centralized management. It would result in improvement in uplifting the
morale of the employees. They will be more motivated and involved in
all their operations resulting in overall effectiveness of the organization.

63
 REFERENCES

 AKBL Annual Report of Askari Bank Limited for the year 2017

 AKBL Annual Report of Askari Bank Limited for the year 2018

 Iffland, Charles & Langueton, Pierre. (1996); International Banking. New

York. Irwin Book Co:

 Khan Rana, Safdar Hussain & Ahmad, Shabir. (1991); Banking Currency
and Finance. Lahore Ilmi Kutab Khana:.

 Saeed, M Nasir. (1994); Economics of Pakistan. Lahore Ilmi Kutab Khana:

 Siddiqi, Asrar H. (1998): Practice And Law Of Banking In Pakistan (6th

Ed). Karachi. Royal Book Co:

 www.Askari bank.com.pk (last accessed on 3rd July 2019)

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