Internship Report Ubl

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 1

I

NTERNSHIP

R

EPORT

ON

U

NITED

B

ANK

L

IMITED

SPECIALIZATION:

BANKING &FINANCE

SUBMITTED TO:

CHAIRMAN,

DEPT. OF BUSINESS ADMINISTRATION

SUBMITTED BY:

ADNAN FAROOQ ROLL #T-521199 REG #06PMN0039

382-RAVI BLOCK,ALLAMA IQBAL TOWN, LAHORE. TEL #042-5417364MOB#0300-6720085

D

EPARTMENT OF

B

USINESS

A

DMINISTRATION

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 2

IN THE NAME OF

ALLAH

THE MOST BENIFICIENT AND MOST

MERCIFUL

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 3

DEDICATED

To My Beloved Parents

For Having Firm Belief in My

Abilities & Whom Prayers Enabled Me

To

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 4

M

Q

MUHAMMADALIJINNAH

“We must work our destiny in our own way and present to the world an economic system based on true Islamic concept of equality of manhood and social justice. We will thereby be fulfilling our mission as Muslims and giving to humanity the message of peace which alone can save it and secure the welfare, happiness and prosperity of mankind”.

(SPEECH AT THE OPENING CEREMONY OF STATE BANK OF PAKISTAN,KARACHI JULY 1, 1948).

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 5

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A

This is to certify that we have read the report submitted by MR. ADNAN FAROOQ Roll No. T-521199 and It is our judgment that this is of sufficient standard to warrant its acceptance by ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD, for MBA (B&F) degree.

R

EPORT

E

XAMINING

C

OMMITTEE

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 6

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All praise to ALMIGHTY ALLAH alone, the Omnipresent and the most Merciful and compassionate. The words are bound, knowledge is limited and time is short to express His dignity. It is one of infinite blessings of ALLAH that he bestowed me with the potential and ability to contribution towards the deep oceans of knowledge already existing. I pay hum-age to greatest personality of the universe; HOLY PROPHET HAZARAT MUHAMMAD (PBUH) Who is forever torch bearer and spring of guidance in every sphere of life. I am deeply indebted and also express my gratitude to my respected teachers at ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD for their support.

At the very outset, I am very thankful to Mr. ZULIFQAR AHMAD RANA (AVP UBL) for providing me the opportunity to have an excellent learning experience during my internship at REGIONAL CREDIT ADMINISTTRATION DEPARTMENT- COMMERCIAL BANKING (RCAD-CB) UNITED BANK LIMITED, LAHORE. It is my privilege and honors to express my deep gratitude and in calculating thanks to Mr. Sohail Amjad Vice President & Head RCAD-CB UBL, Lahore . The person to whom I would like to give my regards is the MIS OFFICER Mr. WASIM AHMAD of RCAD-CB UBL, LAHORE who gave me very useful tips and information. I might not be able to complete my internship without his cooperation and his kind behavior. I am thankful to all of my teachers especially Mr. Muhammad Azeem and Mr. F. R. Tariq (N. K. Fact College, Lahore).

I am thankful to all of my class fellows and friends whom cheerfulness and guidance is an asset for me .I am especially thankful to the bank staff and particularly.

Mr. Nabeel Anwar Senior Vice President & Head North
Mr. Badar Munir Processing Officer

Mr. Naeem Azam Documentation Officer
Mr. Mohsin Hassan Documentation Officer
Mr. Sohail Saeed Processing Officer
Mr. Nadeem Saif Processing Officer

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 7

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United Bank Limited (UBL) is the second largest bank of Pakistan with assets of over Rs. 550 billion and a solid track record of forty six years - in addition to the convenience of over 1400 branches serving its customers throughout the country and also at several overseas locations.

In this 12 weeks (3 Months) internship program I have worked in Regional Credit Administration Departments (MIS section, Processing section, Documentation section) of this high class bank of Pakistan where I have learned about banking from experienced managers running these sections.

This report contains the information and learning about UBL that I learnt during the 12 weeks internship period in United Bank limited. This report deals with History & Nature (Business) of the UBL, its Products and Services, information about main offices and also the review of various departments of the Bank. This report also contains Finance & Accounting operations of the UBL, role of Financial Manager (Branch Manager), Use of Electronic Data in core decision making and the Sources, Generation and Allocation of funds used in the banking operations of the UBL.

Recognizing the need of Islamic banking, UBL also provided number of Islamic banking services like Islamic Deposit Schemes and Islamic Fund Based Facilities.

At the end of this report, on basis of my observation during internship, financial analysis and SWOT analysis of UBL is provided. Suggestions are also recommended as per learning from analysis. This report will provide a better and brief learning about United Bank Limited.

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 8

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This internship offers me an incredible opportunity to gain real-world experience in the high-stakes finance industry. Most importantly this internship allows me to distinguish myself from my classmates, as I gain a competitive advantage by connecting my coursework with industry experience.

Following are important objectives of studying the organization:

Categorize the different products and services offered by the financial institution and note how to most efficiently match those products and services with the needs of customers.

Analyze the company’s financial condition through the financial statements (compute financial ratios and compare to the industry averages).

To describe the impact of financial decisions on the health and functioning of the overall organization.

To learn the various steps and procedures of credit risk management & administration.

Finding out the weaknesses, short comings, strengths and beauties of the credit administration department.

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 9

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1. OVERVIEW OF THE ORGANIZATION 01

1.1 BRIEF HISTORY OF THE ORGANIZATION 01

1.1.1 ABOUT UBL 01

1.1.2 FORMULATION 01

1.1.3 NATIONALIZATION 01

1.1.4 PRIVATIZATION OF UBL 02

1.1.5 UBLTODAY 02

1.2 NATURE OF THE ORGANIZATION 04

1.2.1 VISION STATEMENT 05 1.2.2 MISSION STATEMENT 05 1.3 BUSINESS VOLUME 06 1.3.1 REVENUE 06 1.3.2 DEPOSITS 06 1.3.3 ADVANCES 07 1.3.4 COMPUTATION OF ADVANCES 07 1.4 NUMBER OF EMPLOYEES 08 1.4.1 BOARD OF DIRECTORS 08 1.4.2 STAFF STRENGTH 08 1.4.3 KEY MANAGEMENT 09 1.4.4 MANAGEMENT HIERARCHY 09 1.5 PRODUCT LINES 10 1.5.1 DEPOSIT PRODUCTS 10

1.5.2 LOANS &CARDS 12

1.5.3 AGRICULTURAL PRODUCTS 15 1.5.3.1.1 FARM LOANS 15 1.5.3.1.2 NON FARM LOANS 16 1.5.4 SMALL BUSINESS 17 1.5.5 NRPSERVICES 18 1.5.6 OTHER SERVICES 19

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 10 2. ORGANIZATIONAL STRUCTURE 22 2.1 MAIN OFFICES 22 2.1.1 HEAD OFFICE 22 2.1.2 BRANCHES 23 2.1.3 DOMESTIC NETWORK 23 2.1.4 PROVISIONAL HEADQUARTERS 23 2.1.5 BRANCH HIERARCHY 24 2.1.6 OVERSEAS NETWORK 25

2.2 DEPARTMENTS OF THE UBL 26

3. STRUCTURE AND FUNCTIONS OF THE ACCOUNTS/FINANCE AND AUDIT DEPARTMENT 34

3.1 ORGANIZATIONAL CHART (FINANCE DEPARTMENT) 34

3.2 MY LEARNING AS AN INTERNEE 35

3.3 FINANCE AND ACCOUNTING OPERATIONS 35

3.4 THE ROLE OF FINANCIAL MANAGER 35

3.4.1 ACCOUNTS MANAGEMENT 37

3.4.2 CASH MANAGEMENT 38

3.4.3 CREDIT MANAGEMENT 38

3.5 USE OF ELECTRONIC DATA IN DECISION MAKING 41

3.6 SOURCES OF FUNDS 47

3.7 GENERATION OF FUNDS 47

3.8 ALLOCATION OF FUNDS 49

4. CRITICAL ANALYSIS OF THE THEORETICAL CONCEPTS 57

4.1 FINANCIAL ANALYSIS 57

4.1.1 RATIO ANALYSIS (ABBREVIATIONS USED IN CALCULATIONS 59

4.1.2 CALCULATION OF RATIOS 60

4.1.3 GRAPHICAL REPRESENTATION OF RATIOS 62

4.1.4 EXPLANATION OF FINANCIAL RATIOS 65

4.1.5 HORIZONTAL ANALYSIS 68

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 11

4.1.5.1.1 BALANCE SHEET 68

4.1.5.1.2 PROFIT &LOSS ACCOUNT 73

4.1.6 VERTICAL ANALYSIS 77

4.1.6.1.1 BALANCE SHEET 77

4.1.6.1.2 PROFIT &LOSS ACCOUNT 80

4.2 ORGANIZATIONAL ANALYSIS 82

4.3 FUTURE PROSPECTS OF THE ORGANIZATION 83

5. SHORT –FALLS/WEAKNESSES OF THE ORGANIZATION 84

6. CONCLUSION 85 7. RECOMMENDATIONS 86 8. REFERENCES 88 9. ANNEXES 89

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 12

1.

O

VERVIEW OF THE

O

RGANIZATION

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:

1.1.1.ABOUT UBL:

The history of UBL can be divided into four main Phases:
Formulation

Nationalization
Privatization
UBL Today

1.1.2.FORMULATION:

In June 1957, Mr. Agha Hassan Abidi decided to open a Bank different from others, to provide modern facilities to trade and industry and to promote thrift and habit of saving amount common thereby stimulating the economy as a whole. Necessary formalities completed for obtaining registration certificate from State Bank of Pakistan to perform business activities. After passing through all these formalities on 7th November, 1959 United Bank Ltd came into existence as a Schedule bank.

The Head office of the Bank was established in the New Jubilee Insurance House, 1.1 Chundrigar Road Karachi. It was registered as a joint stock company. The bank was incorporated with an Authorized Capital of Rs 20,000,000 and issued and subscribed and paid up capital of RS 10, 00,000. Saigol family owned it and Agha Hassan Abedi was its first managing Director. It had posted a profit of 0.7 million in its first year of operation with just eight branches at Karachi.

1.1.3.NATIONALIZATION:

As a policy of nationalization fourteen commercial banks was merged into five big banks. So consequently on 21st December 1974 Commerce Bank and Union bank was

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 13 merged with the UBL. Mr.Mushtaq Ahmed khan Yousafi took over the charge of UBL. Now, there are six directors, a secretary and a president.

1.1.4.PRIVATIZATION OF UBL:

UBL was the largest privatization attempted by the government of Pakistan, launched in June 2001, with 21 interested parties. It was impacted by the adverse developments of the September 11, 2001 and was finally concluded in October 2002, which left stage only three bidders. The consortium comprising Bestway Group (BG), out of the U.K. and Abu Dhabi Group (ADG) from the U.A.E. were finally the winners at a record price.

Sale proceed was Rs 12350 million. This signaled the strong confidence reposed by these investor groups, in the improved governance of the country, the economic potential, the banking opportunity and the existing management of the bank.

1.1.5.UBL TODAY:

Today the bank has taken progressive steps. The United Bank Limited (UBL) management has launched its new corporate identity and changed its 44 year-old-logo following its privatization. UBL has started the Online Banking & Click n Remit services.

CHAIRMAN:

His Highness Shaikh Nahayan Mabarak Al Nahayan.

DEPUTY CHAIRMAN:

Sir Mohammed Anwar Pervez OBE.

PRESIDENT &CEO:

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 14 BRANCHES:

1079 Domestic, 17 Overseas Branches.

REPRESENTATIVE OFFICES:
Tehran

Kazakhstan
China

SUBSIDIARY:

United Bank AG Zurich, Switzerland.

United National Bank Limited, UK (Joint venture with NBP).
UBL Fund Managers Limited.

ASSOCIATED COMPANIES:

Oman United Exchange Company, Muscat.
UBL Insurers Limited.

OFFSHORE BANKING UNIT:

Export Processing Zone, EPZ Branch, Karachi, Pakistan.

HEAD OFFICE:

State Life Insurance Corp. Building #1, I.I. Chundrigar Road, Karachi, Pakistan P.O. Box No.: 4306

Phone: (92-21) 111-825-111 Gram: "UNITED"

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 15

1.2.

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UBL is a Banking Company, which is engaged in Commercial & Retail Banking and related services domestically and overseas. UBL was set up in 1959 by. Agha Hasan Abedi and is today one of Pakistan's major banks in terms of deposits and advances. The Group's principal activities are to provide commercial banking and other financial services. The Group offers personal banking, cash management, retail loans and other financial services. These services include deposits, savings/current bank account, vehicle loans, personal loans, retail trade finance, global banking, lending to priority sector and small scale sector, foreign exchange and export finance, corporate loans and equipment loans.

In 1971 the Government of Pakistan nationalized it. In 2002, the Government of Pakistan sold it in an open auction to a consortium of Abu Dhabi Group and Bestway Group. Since its privatization the bank has been successfully turned around and remains a robust and strong performer in all major segments of its operations.

In 2002 it merged its operations in the UK with those belonging to National Bank of Pakistan to form United National Bank Limited, of which it owns 55%, with National Bank of Pakistan owning the remainder.

The Bank is making every effort to meet the up-coming challenges through strategic planning and making the best use of the resources at its command. A professional team was appointed in mid 1997 to restructure the bank and to commence rightsizing. The management is also in the process of rationalizing the branch network and identifying and recovering its doubtful and classified portfolio. It has planned to institute major improvements in customer services and internal systems to improve efficiency. It also intends to launch innovative products. The bank is increasing resource mobilization through regular deposit campaigns and accelerating the process of recovery of outstanding advances and non-performing assets.

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 16

1.2.1.

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“To be a world class bank dedicated to excellence, and to surpass the highest expectations of our customers and all other stakeholders”.

1.2.2.

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Set the highest industry standard for quality across all areas of operation, on a sustained basis;

Optimize people, processes and technology to deliver the best possible financial solutions to our customers;

Become the most sought after investment;
Be recognized as the employer of choice.

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 17

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1.3.1.REVENUE:

Particulars 2007 2006 2005 2004 2003

---(Rupees in ‘000)--- Mark-up / return / interest earned 41,045,543 32,991,603 20,158,860 9,233,881 8,944,260 Fee, commission and brokerage

income 5,165,066 4,435,465 2,543,739 1,654,475 1,442,642 Dividend income / gain on sale of

investments 548,782 837,338 583,982 1,102,510 2,057,314 Income from dealing in foreign

currencies 827,328 659,726 675,109 668,085 436,656 Gain on sale of securities 849,367 280,864 382,419 947,945 1,976,999 Other income 1,617,563 738,330 1,210,202 1,072,756 607,500 Total Revenue 50,053,649 39,943,326 25,554,311 14,679,652 15,465,371 1.3.2.DEPOSITS: 2007 2006 2005 2004 2003 ---(Rupees in ‘000)--- Customers Fixed deposits 127,317,589 114,927,897 79,841,687 42,971,478 35,945,097 Saving deposits 153,001,867 121,878,162 122,662,484 118,243,902 102,372,765 Sundry deposits 4,645,873 4,942,064 4,148,275 3,161,327 2,728,107 Margin deposits 2,746,824 2,698,999 2,214,877 1,218,963 1,212,276 Current accounts – remunerative 5,641,419 1,908,055 1,886,548 393,760 565,433 Current accounts –

non-remunerative 108,116,175 88,662,089 78,324,614 64,150,773 41,253,005 Total Customers Deposits 401,469,747 335,017,266 289,078,485 230,140,203 184,076,683

Financial Institutions

Remunerative deposits 143,603 35,539 - - 8,881 Non-remunerative deposits 24,466 25,068 147,814 116,424 985,938

Total Financial Institutions

Deposits 168,069 60,607 147,814 116,424 994,819 Total Deposits 401,637,816 335,077,873 289,226,299 230,256,627 185,071,502

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 18 1.3.3.ADVANCES: 2007 2006 2005 2004 2003 ---(Rupees in ‘000)--- Performing 293,373,007 243,237,819 201,152,095 139,669,440 92,513,736 Non-performing 5,981,729 4,072,074 3,658,375 4,481,615 3,611,442 Total Advances 299,354,736 247,309,893 204,810,470 144,151,055 96,125,178 1.3.4. COMPUTATIONS OF ADVANCES: Performing Non-performing 2007 2006 2007 2006 ---(Rupees in ‘000)--- Loans, cash credits, running

finance etc.

In Pakistan 222,660,938 200,080,279 17,759,670 9,273,198 Outside Pakistan 60,310,465 33,369,281 3,011,935 4,771,131 282,971,403 233,449,560 20,771,605 14,044,329 Bills discounted and

purchased (excluding government treasury bills)

Payable in Pakistan 5,301,652 5,661,421 745,115 876,300 Payable outside Pakistan 3,820,841 4,080,845 495,691 1,334,780 9,122,493 9,742,266 1,240,806 2,211,080 292,093,896 243,191,826 22,012,411 16,255,409 Financing in respect of

continuous funding system (CFS)

2,631,139 1,462,242 - -

Advances - gross 294,725,035 244,654,068 22,012,411 16,255,409 Provision against advances

- Specific - - (16,030,682) (12,183,335) - General (1,352,028) (1,416,249) - -

(1,352,028) (1,416,249) (16,030,682) (12,183,335) Advances – Net Provision 293,373,007 243,237,819 5,981,729 4,072,074

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 19

1.4. N

1.4.1.BOARD OF DIRECTORS:

Name Designation

His Highness Shaikh Nahayan Mabarak Al Nahayan Chairman

Sir Mohammed Anwar Pervez, OBE, HPK Deputy Chairman

Mr. Atif R. Bokhari President & CEO

Mr. Omar Ziad Jaafar Al Askari Director

Mr. Zameer Mohammed Choudrey Director

Dr. Ashfaque Hasan Khan Director

Mr. Muhammad Sami Saeed Director

Mr. Aqeel Ahmed Nasir Company Secretary & Chief Legal Mr. Aameer Karachiwalla SEVP/Group Chief Financial Officer

As at December 31, 2006, the organization had a total staff strength of 15,369 (FY05: 13,479) employees, of which 9,738 were the bank’s own staff, while the remaining were out sourced resources. Turnover for the year was about 10%, while approximately 1,300 new employees had been hired during the year.

1.4.2.STAFF STRENGTH:

STAFF STRENGTH 2007 2006

Permanent 9,373 9,734

Contractual basis 9 4

Bank's own staff strength at the end of the year 9,382 9,738

Outsourced 5,522 5,631

Total number of employees at the end of the

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 20 1.4.3. KEY MANAGEMENT:

Name Designation

M. A. Mannan Group Executive Consumer & Commercial Bank Risha Mohyeddin Group Executive Treasury & Capital Markets Baqar Muzaffar Group Head Information Technology

Nauman Hussain Group Head Operations

Ayaz H. Shamsi Group Executive Human Resources Aameer Karachiwalla Group CFO

Muhammad Ejazuddin Group Audit & Inspection Head Ali Sameer Group Executive Risk & Credit Policy Mohammad Asghar Group Commercial Bank Head

Saeed Iqbal Group Head Investment Bank

Ahmed Hafeez Group Head Business Development & Strategic Initiatives Hasan Raza Group Head Corporate Banking and Cash Management Najeeb Agrawalla Group Head Marketing Retail Bank

Wajahat Husain Head of Middle East

1.4.4.MANAGEMENT HIERARCHY:
President

Board of directors

Members executive board
Regional chiefs

Zonal chiefs
Branch managers

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 21

1.5. P

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1.5.1.DEPOSIT PRODUCTS:

UBL has taken progressive steps and has introduced innovative products and services to provide you a variety of banking and financing services including Current and BBA Accounts.

UBL UNIFLEX ACCOUNT:

UBL has introduced a new checking account ideal for small investors, traders, businessmen and customers from middle income group. They can now afford an amazing rate of return plus value added benefits only available from the UBL UniFlex PLS Savings Account.

UBL UNISAVER ACCOUNT:

UBL UniSaver Account is an innovative way of serving your banking needs. Be it trade, business or personal finance, the UBL UniSaver allows you maximum flexibility, yet gives you optimum returns.

Innovative and flexible checking account.
Attractive rates of return.

Profit is calculated on monthly average balance.
Profit payment is on six monthly basis.

Higher returns on higher balances.

UBL PROFIT COD:

Customer can earn a higher income on their surplus cash by investing it in UBL Profit Certificate of Deposit. UBL Profit helps them earn extra income with their hard earned money, while providing absolute trust and security. Two Types of Profit Payment Options:

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 22
Profit Payment at Maturity.

Monthly Profit Payment.

PLS REGULAR TERM DEPOSITS RECEIPTS:

If customer wish to make a secured long term investment, UBL’s Term Deposit Receipt is the smart choice. UBL Term Deposit Receipts provides an attractive rate of return. The profit is credited to the customer account every six months. Customer has the flexibility to choose from a wide range of tenors. Customer can avail the Rollover or Renewed option at any time before encashment. Customer can get TDR en-cashed at any time before maturity period.

FOREIGN CURRENCY SAVINGS &FOREIGN CURRENCY TERM DEPOSITS RECEIPTS: United Bank offers the best rates of return on Foreign Currency Deposits in the market. Accounts can be opened in US Dollar, Pound Sterling, Euro, and Japanese Yen at designated branches. All Pakistani nationals residing in Pakistan and outside Pakistan can also open Foreign Currency Accounts. Resident Firms and companies including Investment Banks can open Accounts.

Term deposits in foreign currency are offered for the following periods of maturity with variable rates of return:

Three Months.
Six Months.
Twelve Months.

There are no cash handling (Cash Deposit & Cash Withdrawals) charges from the customers. Zakat is exempted on these TDR’s. Flexible options of rollover or renew the TDR at the time of encashment. Special Rates available from for USD 500,000 and above or equivalent.

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 23 UBL E-TRANSACTION ACCOUNT:

When it comes to electronic financial services www.ubl.com.pk is Pakistan’s favorite Internet destination and why not! With years of experience in innovation United Bank offers a wide spectrum of world-class of electronic services and banking products for trailblazers like you.

Save up to Rs. 2400/- with your eTransaction Package which includes:

A branch Account with all features of a current account (including checkbook, Visa ATM/Debit Card, etc.).

Free Premium Internet Banking Access -- Save up to Rs. 1200/year in subscription fees.

1.5.2. L

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UBLMONEY:

UBL Money, the Personal Installment Loan from UBL provides you with power, control, convenience and the flexibility to manage your financial requirements and realize your dreams.

UBL Money is a fixed installment loan. It gives you access to funds starting from Rs. 50,000/- up to a maximum of Rs. 500,000/- without any collateral.UBL Money provides you the flexibility to manage your monthly installments according to your income stream. You can select any tenor from 1 to 5 years in a multiple of 12 months.

UBL BUSINESSLINE:

UBL Businessline is a running Finance facility that not only provides funds for growth but also enables you to capitalize on profitable opportunities.

“It is a ‘Credit Line/ OD Facility’ against Residential Property. It is an evergreen credit line that the customer can use for his/her business expansion”.

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 24 UBL CASHLINE:

UBL Cashline is a flexible loan that provides you cash up to Rs.500, 000 without any security requirements. It empowers you to take control of your finances. UBL Cashline is aimed to make your life easier. Whether you are a salaried individual or a businessman. Cashline offers you:

You can avail this facility if you are:

A salaried person of 21 to 60 years, and your monthly net salary is Rs. 15,000 or more; OR

A self employed business person/professional between the ages of 21 to 65 years, and your monthly net take home income is Rs. 35,000.

UBL DRIVE:

UBL Drive allows you to drive away in your own car by making a down payment of just 15% and to top that with low monthly installments. With UBL Drive you can buy your favorite used car (up to 5 years old) at the most affordable rates. UBL Drive is not just a car loan; it’s a financing facility that gives you Cash on your car, you can get up to 75% of your car value.

UBL ADDRESS:

UBL Address empowers you to become the proud owner of a home by offering a variety of product and pricing options that are flexible yet affordable. So choose the best product option and pricing to suit your needs. All product options are amortized and range over a tenor of 3 - 20 years.

Eligibility Criteria:

Minimum monthly income: Rs.15, 000.
Age: 23 to 65 years.

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 25
Self-employed businessman (SEB)/professional (SEP) or salaried individual.
Minimum loan size: Rs. 500,000.

Markup Rates:

Segments Pricing

Salaried KIBOR + 3.5% = Applicable Markup Rate SEB/SEP KIBOR + 4.5% = Applicable Markup Rate UBL PAYPLUS:

If you are a permanent employee of a company (Government, Semi-Government, MNC or Local Corporate Entity/Private/Public Limited), which disburses salary through UBL, then UBL PayPlus (loan against salary) is the right product for you. Through UBL PayPlus, you can now easily avail a loan based on your salary level.

Eligibility Criteria:

Must be Permanent Employee of company.

Maximum Loan Amount of up to 15 gross salaries or PKR 500,000.00 (which ever is less).

Installment amount must not exceed 33% of Net Take Home Salary (NTHS).
Loan amount not to exceed 90% of already accrued End Service Benefits (ESB).
Repayment through 12, 24, 36, 48 or 60 monthly installments.

Maximum age should be 55 years on the date of disbursement.

UBL CRDIT CARD:

UBL Credit Card provides the following facilities:

To share the value, excitement and benefits of UBL Credit Card with loved ones, UBL Credit Card offers up to 4 free supplementary cards.

Customers can now withdraw cash through their UBL Credit Card’s instant cash advance facility from any designated UBL Card Payment Branches nationwide

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 26 and more than 780,000 ATMs and financial institutions worldwide displaying VISA/PLUS logo.

Each time UBL Card members use their UBL Credit Card to purchase airline, train or bus tickets, they are automatically covered against any sort of accident that might befall them while traveling. The coverage amounts are:

1. Classic Card: Up to Rs. 3.5 Million 2. Gold Card: Up to Rs. 7 Million

1.5.3.

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1.5.3.1.1. FARM LOANS PRODUCTION LOAN:

Financing is available for Major and Minor crops across Pakistan. Main purpose of financing is to facilitate farmers to purchase Agri Inputs such as Seeds, Fertilizers, Pesticides, Sprayers, hired labor etc.

NIACF (REVOLVING CREDIT SCHEME):
Loan Tenure 3 years.

Documentation once for 3 years.
Cleanup once a year.

Option for the farmer to use limit as per requirement.
Markup is charged on amount used or withdrawn.
Minimum Amount PKR 30,000.

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 27 NIADF (DEMAND FINANCE PRODUCTION):

Loan Tenure 3 months to 1 year.
18 months for Sugar cane only.

Lump sum disbursement of the limit for a specified period.

Repayment of loan in bullet payment on maturity (Principal and markup).
Minimum Amount PKR 30,000.

DEVELOPMENT LOAN:

LAND DEVELOPMENT,EQUIPMENTS AND MACHINERY:

Financing for Land Improvement, Water course improvement, Tube wells, Lift pumps, Deep turbine pumps, Cotton pickers, Godown, Cold Storage, Harvester, Thresher, etc

TRACTOR &VEHICLE FINANCE:

To purchase Tractors, Delivery Vans, Mini Trucks, Motor Cycle and other vehicles used for marketing Agri Products. Loan Tenure: 1 to 3 years for Motor Cycle, 1 to 7 years for Tractor, and 1 to 5 years for other 4 wheel vehicles. Other features are:

1.5.3.1.2.NON FARM LOANS LIVESTOCK FINANCING:

Dairy Farming, Meat Farming, Fattening of Animals, Rearing of Animals, Construction of Sheds, Milk storage tanks, acquire and establish modern and efficient livestock facilities.

POULTRY FINANCING:

Poultry Farm structure and equipments, Hatchery farm structure and equipments, Feed Mills, Purchase of Chicks, Feed, Medicines, Storage tanks, Cold storage, Construction of shed, etc.

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 28
Loan Tenure 1 to 5 years.

Monthly / Quarterly repayment mode for all loans.
Minimum Amount PKR 50,000.

Maximum Amount as per requirement.

FISHERIES FINANCING:

Financing available on Fish seed, Fish feed, Manuring, Construction of pond, Curing and Dying by fishermen, etc.

1.5.4.

S

B

SMALL BUSINESS SCHEME:

Under the Small Business Scheme, UBL is providing loans on easy terms to those who wish to set up their own small-scale business. This scheme is aimed at spreading prosperity in the country by reducing unemployment.

As more and more people start their own industrial units, the country will move steadily towards economic self-reliance.

1.5.5.

N

S

UBL has taken progressive steps and has introduced innovative products and services to provide customers a variety of banking and financing services.

UBL CLICK NREMIT:

United Bank Ltd. is pleased to offer you access to a Reliable, Fast, Secure, Convenient and in-expensive way of remitting money to anyone in Pakistan. The entire transaction is completed online and with just a few clicks of a mouse, your money is on its way to the recipient of your choice. There is no need to visit a bank to use this service. Remitting money is just a click away through UBL Click N Remit.

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 29 TEZRAFTAAR:

Free Doorstep Remittances With-in the country or from abroad, UBL offers the most efficient and price competitive service. With their large network of branches, they are poised to offer customer service almost at customer door step.

UBL's new remittance service, TezRaftaar offers all overseas Pakistanis the fastest and the most convenient delivery of their money to their beneficiaries in Pakistan. Best of all, TezRaftaar is completely cost free and is available at all UBL branches along the Bank's Network in the Middle East, UK and US.

UBL CLICK NBANK:

Click N Bank eNRP Account - A simple & convenient way to open, fund and operate account in Pakistan. It’s completely online. Some features of this service are:

Complete online registration.

PKR Accounts operable nationwide.
Primary and supplementary ATM cards.
Check book (Order online).

UBL net banking.

UBL ORION:

Orion is the “First Complete Mobile Payments Solution” ever to be launched in the country. The UBL Orion provides the following services:

Buy prepaid cards.
Share & send money.
Send flower & cakes.
View current bills.
Pay bills etc.

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 30 NRP DIRECT:

United Bank brings to you a simple & convenient way to open, fund & operate a bank account in Pakistan. NRP Direct is the first & only deposit account ever to be launched for Non-resident Pakistanis. Now feel at home with your NRP Direct account!

1.5.6.

O

S

UBL E-STATEMENT:

UBL has launched the UBL e-statement facility which makes it easier for customers to get their statement of accounts and automated transactional debit/ credit alerts right into their inbox. It is available for all Rupee and Foreign Currency Account holders. UBL e-statement facility is:

Absolutely free of cost.
Accessible when you need it.
Security.

Automated transactional debit/ credit alerts.
Easy to read format.

UBL WALLET:

UBL offers ATM and Debit Card facility to all account holders at all UBL branches anywhere in Pakistan, regardless of whether their branch is online or offline.

UBL Wallet VISA ATM & Debit Card has the entire convenience and security account holder’s desire and the quality they deserve. This Wallet holds all the cash in customer’s bank account. UBL Wallet VISA also gives the facility of having up to 9 supplementary cards issued against one primary card. All supplementary cardholders will be able to conduct ATM/Debit transactions within the limits of the primary card account.

UBL already has its own network of 336 ATMs in 83 cities, which continues to expand by the day. Moreover, UBL Wallet is now part of the 1 Link and VISA networks. These

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 31 allow account holders to use their UBL Wallet VISA across Pakistan at more than 925 ATMs displaying the 1 Link logos and at more than 1 Million ATMs in 150 countries. It is also acceptable on the MNET network of ATMs in Pakistan. UBL Wallet VISA Card will also be acceptable on all local VISA certified machines displaying the VISA Plus sign.

Annual Fee (Rs.) Daily Limits (Rs.)

Card Type

Primary Supplementary ATM Withdrawal Debit Card Funds Transfer (From UBL to UBL) Funds Transfer (From UBL to other banks) Gold 500 250 40,000 100,000 250 40,000 Silver 300 150 20,000 50,000 230,000 250,000 UBL “HAMRAH”:

UBL has always been at the forefront in identifying and meeting the financial needs of its valued customers. UBL was the pioneer in introducing Rupee Travellers Cheque facility in Pakistan, as early as 1971. In continuation of the same tradition, UBL in the shape of "Hamrah" Rupee Travellers Cheque enhances this facility for the convenience of its valued customers by offering denominations up to Rs. 10,000.

UBL WIZ:

UBL Wiz is Pakistan’s first ever Prepaid VISA Debit Card that provides the convenience, security and benefits of an ATM and Debit Card, locally and internationally. More than just an ATM card, you can use your UBL Wiz everywhere VISA cards are accepted. Whether you are using it online, paying for petrol, shopping or dining, you are accessing money directly from your prepaid card, without having to visit the bank.

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 32 UBL NETBANKING:

UBL net banking is an Internet Banking portal offering a simple, convenient and secure method of accessing bank accounts on the Internet.

Using UBL net banking, the customers have access to their bank accounts 24 hours a day, 7 days a week and can keep a close eye on their account balances, print account statements, pay bills, transfer funds, track purchases and schedule their recurring payments at the touch of a button and much more. Important features & benefits of this service are:

Real-time account balance & summary.
Manage multiple accounts.

Receive customized alerts.

Transfer funds between customer’s accounts.

Pay bills online (Only PTCL & Cellular Services Bills).
Send money to anyone using the new PC-to-Person facility.
Net banking Phone Banking: 0800-11-825 (toll-free).
For people in Azad Jammu Kashmir: (021) 2446949.

UBL ONLINE:

This service is available only for corporate customers of UBL. This service contains the following features:

24 hours banking.
Account statement.
Activity log.

Electronic data interchange.
Search facility.

Graphical analysis.

Access visa wireless devices.
Alerts service.

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 33

2.

O

RGANIZATIONAL

S

TRUCTURE

Head Office

Provisional Head Quarters

Zonal Office

Hub Branches

Branches

2.1.1.HEAD OFFICE:

The Bank's registered office and principal office is situated at State Life Building No. 1, I. I. Chundrigar Road, Karachi.

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 34 2.1.2.BRANCHES:

Domestic Branches 1079 Overseas Branches 17 2.1.3.DOMESTIC NETWORK:(IN 2007)

Domestic Network Branches

Azad Kashmir 71 Baluchistan 41 N.W.F.P 163 Punjab 584 Sindh 220 Total 1079 2.1.4.PROVISIONAL HEADQUARTERS: Province Region(City) Balucihstan Quetta N.W.F.P Peshawar Punjab Lahore Sindh Karachi

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 35

2.1.5.

B

H

Sindh

Branches

Baluchistan

Branches

Punjab

Branches

Azad Kashmir

Branches

Islamabad

Branches

N.W.F.P

Branches

Northern Area

Branches

Regional Office

(North)

Regional Office

(South)

Central Office Karachi

Controlled by President

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 36 2.1.6.OVERSEAS NETWORK:

HUB Name Branches

United Arab Emirates 9

Bahrain 3

Yemen 2

Qatar 1

United States of America 1

Export Processing Zone, Karachi 1

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 37

2.2.

D

U

CORPORATE BANKING &CASH MANAGEMENT GROUP:(CBG)

The Corporate Banking Group has endeavored to be the market leader in their area and builds market share through offering superior service, competitive pricing, and a wide product range to valued corporate clients. The group caters to the needs of multinational companies and medium to large corporate clients, which include private and public sector entities.

This group will continue to remain a major contributor to UBL’s earnings by taking advantage of tremendous growth potential of corporate accounts. The group requires talented, qualified, and proactive human resources. Front line relationship managers require a complete grasp of UBL’s credit policies and procedures as they directly affect existing and future credit portfolio handling.

The Corporate Banking Group focuses on attracting and servicing large portfolio customers. Our forte is providing exemplary customer service using the "Single Window" concept and product superiority. The Relationship Management team manned by highly qualified individuals from the industry has steadily expanded UBL customer base and continues to enhance their cordial relations with our esteemed clients.

Despite the sluggish economic growth in recent years, UBL outperformed all the other local banks in the corporate banking sector primarily due to CBG's emphasis on establishing and enhancing relationships with foreign/local blue chip and middle market customer’s thereby capturing significant market share.

UBL's appetite for large exposures coupled with dedicated Structured Finance Unit, and an innovative team of professionals having extensive experience of Corporate Banking gives it the right platform to succeed in todays competitive and a demanding environment.

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 38 Euromoney 2000' Best Local Bank award and recognized it to have out performed all other banks. In year 2000, UBL was also voted as the best Corporate Bank by the customers of a major foreign bank in a survey. Aggressive marketing combined with professionalism has led to an increase in UBL's market share with top corporate customers and in some cases replacing Foreign Banks. Presently, its portfolio includes the quality names in the country, which were initially confined to foreign banks only. CBG – Offers full spectrum of services:

COMMERCIAL BANKING/SME (CB):

The Commercial Banking Group caters to the needs of commercial entities and small and medium enterprises, as defined in the State Bank of Pakistan’s Prudential Guidelines. This group deals with commercial clients of small to medium size in both private and public sectors. It operates in almost every city of the country with qualified and dedicated staff.

This group aims to fulfill necessary business needs of its customers, which are more numerous than corporate clients. However, their individual requirements are relatively much smaller than those demanded by corporate clients. In view of the peculiar nature of this business segment, which involves a higher turnover, a much wider network is needed.

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 39 CREDIT ADMINISTRATION DEPARTMENT:(CAD)

Composition of Credit Functions:
Credit & Marketing.
Credit Administration.

CREDIT &MARKETING:

Market new relationships to increase bank’s asset based portfolio.
Financial Analysis, Evaluation and Processing of credit Line Proposals.

Monitoring of Credit portfolio through Client visits, Factory visits, Inspections, and prepare Call Reports, Visit Reports in this regard.

Responsible for the compliance of all Pre-approval instructions/regulations issued from time to time by Head Office Credit Policy, SBP and other regulatory bodies including obtaining CIB, Borrower Basic Fact Sheet, Compliance of ratios as required under Prudential Regulations, Per party limit etc.

CREDIT ADMINISTRATION:

Disbursement of Credit Facilities including Preparation of Security/Charge documents, perfection of collateral, Ensure compliance of SBP regulations/Credit Policy, HO Circulars & Issuance of Disbursement Authorization Certificate (DAC).

Regular monitoring of Collateral & Asset based portfolio through Weekly Roosters/Diaries, CARS Reports, Credit Maintenance, Identify exceptions and follow for the rectification of the same.

MIS related to Credit & Credit Admin. Department.
Monitoring of Mark up accruals, recoveries thereof.
Liaison with various outside agencies (RCAD Head).
Miscellaneous Jobs.

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 40 CONSUMER BANKING GROUP:

The Consumer Banking Group provides financial facilities to individuals through a diverse product line. Its success depends on the design of versatile and effective products and comprehensive communication and marketing strategies. Agility in monitoring the portfolio and following up with its customer base, which is wholly comprised of individuals, is also an essential requirement.

This group operates in nearly all major cities of Pakistan, and also in some international locations through UBL’s network of branches and trained sales force. This group offers products such as home loans, personal loans, auto loans, business loans, and credit card facilities, etc.

Consumer banking requires regular training of its workforce and the need for imparting basic product knowledge to sales staff is highly pronounced in this group as they are in direct contact with the customer base. This group conducts business based on structured products that fit into the needs of its target market. Product Process Manuals are developed for these products and are provided with the Credit Policy and Procedure guidelines.

Risk management for the consumer has to play a dominant role in formulation and revision of credit policies, monitoring of portfolio quality and devising effective strategies aimed at minimizing the inherent risks.

INVESTMENT BANKING GROUP (IBG):

The Investment Banking Group specializes in providing innovative and unique advice to its clients, assisting them in meeting challenges in an ever-changing market. The group is equipped with adequately experienced professionals.

This group will either lead or participate in major Term Finance Certificates in the market. It offers a full spectrum of services, including Term Finance Certificates, Syndicated Loans, Structured Finance, Leveraged Buyouts, Project Finance,

Quasi-ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 41 Equity Products, Independent Advice, Equity Placements, IPO’s, Equity Underwriting, Mergers, Corporate Restructuring, Acquisitions and other products.

Although the Corporate Banking Group supports the product line of the Investment Banking Group, the special nature of these products demands a more active involvement of risk management. Transactions such as Project Finance offer limited recourse and such transactions need to be structured in a way as to mitigate inherent risks. Risk management is to be proactively involved in Investment Banking Group transactions, right from the time of initiation until the time of execution.

TREASURY &CAPITAL MARKETS GROUP:

The major roles of the Treasury and Capital Markets Group include:

Managing the bank’s liquidity and balance sheet requirements as per UBL and State Bank of Pakistan guidelines,

Dealing in foreign currencies on behalf of its customers, and

Providing treasury and foreign exchange related financial services to its clients. This Group consists of highly qualified and experienced human resources who are actively involved in dealing with other banks and financial institutions to execute transactions in various currencies.

In performing these tasks, it undertakes credit risk, which is identified, monitored, and managed by the middle office.

INTERNATIONAL DIVISION:

The International Division manages overseas operations including credits handled by the network of overseas branches. With careful planning and detailed surveys of the market, the International Division will explore better quality businesses and products and manage them efficiently to enhance UBL’s profitability and turn the overseas branch network into a highly profitable unit of the Bank.

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 42 The Global Credit Risk Management Division monitors and manages the risk, credit process and procedures at overseas branches.

FINANCIAL INSTITUTIONS DIVISION (FI):

This is an independent division operating as a profit center and is responsible for catering to all financial business requirements of banking and non-banking financial institutions. This division caters to the financing needs of all local banks, foreign banks, and other financial institutions including leasing companies, investment banks, DFIs, insurance companies, mutual funds, etc.

Like the Corporate Banking Group, the Financial Institutions Division also operates with a structure of relationship managers, providing comprehensive solutions to its clients. In order to strengthen the division’s credit analytic capabilities, the Financial Institutions Risk Management Unit oversees the risk related to financial institution related transactions. The Financial Institutions Risk Management Unit is part of the Risk Group.

ISLAMIC BANKING GROUP (IB):

The roles and functions of the Islamic Banking Group shall be:

To manage and be responsible for the operations of Islamic Banking Business (IBB), including policy and procedural matters;

To liaise with other departments in the bank and the Shariah Advisor to ensure smooth operations of IBB(s);

To ensure that all funds pooled into the Islamic Banking Fund (IBF) are channeled into Shariah-compliant financing and investment activities;

To arrange training of staff of Islamic banking;

To arrange for compilation and submission of such returns, as may be required to be submitted to the State Bank of Pakistan from time to time;

To ensure that all directives and guidelines, particularly those applicable to Islamic banking, issued by the State Bank of Pakistan are strictly complied with;

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 43
To maintain the Statutory Cash Reserve and Liquidity Requirements with the

State Bank as prescribed from time to time by the State Bank of Pakistan; and
To assume other roles and responsibilities as determined by the bank or the State

Bank of Pakistan from time to time.

HUMAN RESOURCE DEPARTMENT:(HR)

UBL is the place for you if you are willing to materialize all your deliverables in alignment with the organization’s holistic vision to grow and excel. Committed and competent work force is the primary asset in providing value addition to stakeholders of a business organization.

HR Division is responsible for attracting, selecting and recruiting the right people from the market. UBL is proud of its highly professional, transparent and objective approach in its recruitment and selection processes. After applying the eligibility criteria, which depends on the Job grade, a series of selection procedures are applied before hiring employees. Normally the candidates go through the process of test, group discussion and interview. The Interview is conducted by a team of internal as well as external professionals of the related area. Sophisticated recruitment and selection tools like oracle based data management system; online application and behavioral based interviewing techniques have been introduced.

FINANCE DIVISION:

Responsible for book-keeping and accounts, this Division at the head office, prepares all financial returns. The Division is actively involved in preparing market comparative analysis, consolidation of Bank's budgets, its monitoring and constant review of various financial indicators. Finance Division works as the back bone for all Bank's operations. The Division, which reports directly to the President and Chief Executive of the Bank, has been instrumental in preparation of Bank's business plans and future strategies.

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 44 INFORMATION TECHNOLOGY DEPARTMENT:

Operations of UBL have been significantly streamlined post-privatization, however further plans for improving operational efficiency are under-way. Currently the bank is using internally developed distributed database software called UNIBANK. This software is utilizing Oracle Financials at the back end. As all daily banking transactions are stored at the respective branches, consolidation at the head office takes place at day end.

The bank has specialized software to support its various functions and the focus for some time has now been on enterprise application integration (middleware). The management launched a transformation program in 2006 which aims to accomplish bank-wide business and technology reengineering.

The business aspect of this program is expected to improve performance through implementation of uniform business processes and training is ongoing in this respect.

AUDIT DEPARTMENT:

The Board Audit Committee (BAC) comprising three members meets every quarter and is responsible, among other things, for ensuring the effectiveness of the internal audit function and systems for monitoring compliance.

Internal audit procedures include routine branch and business function audit as well as special surprise audits. There is also a dedicated compliance division mainly to follow up on the recommendations advised by the audit team. The deliberations of BAC however reflect concern regarding the overall control environment. The audit and inspection department has been highlighting issues with regard to operational control weaknesses at the branch level.

While most of these are routine in nature, further emphasis on HR training may help in improving the control environment. Some of the issues raised by the external auditors pertain to the capacity of the existing software applications, which the management expects to address over the near term.

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 45

3.

S

TRUCTURE AND

F

UNCTIONS OF THE

A

CCOUNTS

/F

INANCE

/A

UDIT

D

EPARTMENT

3.1.

O

(

)

CFO/Head Global Shared Services TBA 1 Deputy CFO Head-Investor Relations Head of Finance-Middle East Division Head / Financial Controller Financial Controller Statutory TBA 2 Financial Controller Financial Controller-Genesis & Automation Financial Controller-Advances & Overseas TBA-4 Assistant Manager-Genesis Project Manager-Taxation Manager-Overseas Accounts Manager-Write off Cell Asst. Manager Overseas Accounts Senior Manger Finance – Consumer Manager Consumer Accounts TBA 3 Manager Consolidated Manager Finance Employee Funds Asst. Manager Statutory Accounts Asst. Manager OFAMS Asst. Manager Islamic Banking Accounts Manager Finance – Central Accounts & Payments Senior Manager Finance SBP Reporting Manager Central Payments

Manager MIS & Budgeting Manager-HO Budgeting, BOD Reports & Bench Manager CAPEX

Manager – MIS- Agri & Micro

Credit

Manager-SBP Returns/Unclaimed

Deposits

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 46

3.2.

M

L

A

A

I

:

I worked as an internee in the United Bank Limited Regional Credit Administration Department-Commercial Banking (RCAD-CB), Corporate Centre Branch, M.M.Alam Road, Gulberg II, Lahore.

3.3.

F

&

A

O

:

Every branch has its own Accounts Department which is responsible to record and process each & every business transaction taking place during the working day. This Department consolidates the position of the branch at the day end in the shape of Assets, Liabilities, Revenues and Expenses.

This position is daily sent to the Finance Department of Head Office which consolidates all these Statement of Affairs bank wise. This position is sent to the State Bank of Pakistan (SBP) and SBP publishes on weekly basis overall consolidated Statement of banks in business news papers like Business Recorder (BR).

The main function of Finance Department of Head Office is to maintain smooth liquidity of bank by arranging funds from SBP and other banks if required. This Department is also responsible for making physical investment on behalf of bank into government securities and other corporate securities.

3.4.

T

R

F

M

:

FINANCIAL MANAGER:

“The person which manages the financial resources of a business is called financial manager.”

EXPLANATION:

The emergence of financial management as a distinct management discipline is relatively recent and linked to changes in business and socio-economic scenario, brought about by

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 47 the advancements in computer and information technology, emergence of multi-product and multi-division corporations with complex and dynamic organizational set-ups, increasing global competition etc.

Finance, no doubt, is the sine qua non of business operations, and traditionally the role of financial manager (known as an accountant or accounts manager) was limited to managing business finance or ‘counting the beans.’ However, the emerging discipline of financial management varies considerably from its traditional functions and extends to more inclusive functions of ‘growing the beans.’

Almost every firm, government agency, and other type of organization has one or more financial managers who oversee the preparation of financial reports, direct investment activities, and implement cash management strategies. Because computers are increasingly used to record and organize data, many financial managers are spending more time developing strategies and implementing the long-term goals of their organization.

ROLE &DUTIES OF FINANCIAL MANAGER:

The duties of financial managers vary with their specific titles, which include controller, treasurer or finance officer, credit manager, cash manager, and risk and insurance manager. Controllers direct the preparation of financial reports that summarize and forecast the organization’s financial position, such as income statements, balance sheets, and analyses of future earnings or expenses. Controllers also are in charge of preparing special reports required by regulatory authorities. Often, controllers oversee the accounting, audit, and budget departments. Treasurers and finance officers direct the organization’s financial goals, objectives, and budgets. They oversee the investment of funds, manage associated risks, supervise cash management activities, execute capital-raising strategies to support a firm’s expansion, and deal with mergers and acquisitions. Credit managers oversee the firm’s issuance of credit, establishing credit-rating criteria, determining credit ceilings, and monitoring the collections of past-due accounts. Managers specializing in international finance develop financial and accounting systems

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 48 for the banking transactions of multinational organizations.

Cash Managers: monitor and control the flow of cash receipts and disbursements to meet the business and investment needs of the firm. For example, cash flow projections are needed to determine whether loans must be obtained to meet cash requirements or whether surplus cash should be invested in interest-bearing instruments. Risk and insurance managers oversee programs to minimize risks and losses that might arise from financial transactions and business operations undertaken by the institution. They also manage the organization’s insurance budget.

Financial Institutions: such as commercial banks, savings and loan associations, credit unions, and mortgage and finance companies, employ additional financial managers who oversee various functions, such as lending, trusts, mortgages, and investments, or programs, including sales, operations, or electronic financial services. These managers may be required to solicit business, authorize loans, and direct the investment of funds, always adhering to Federal and State laws and regulations.

Branch Managers: of financial institutions administer and manage all of the functions of a branch office, which may include hiring personnel, approving loans and lines of credit, establishing a rapport with the community to attract business, and assisting customers with account problems. The trend is for branch mangers to become more oriented toward sales and marketing. It is important that they have substantial knowledge about all types of products that the bank sells. Financial managers who work for financial institutions must keep abreast of the rapidly growing array of financial services and products.

3.4.1.ACCOUNTS MANAGEMENT:

Being the Manager of the branch it is the duty of the Branch Manager to properly manage the accounts that are deposited in the respective branch. Main duties of Branch Manager regarding accounts management are:

To ensure that the Accounts Officer is maintaining proper books of accounts including basic accounting controls like daily verification of cash in hand, daily

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 49 entry of cash & bank vouchers, Bank Reconciliation statements, accounting of Receipts / Payments correctly.

To supervise and maintain the Assets Records of branch including obsolescence / Sale through auction or otherwise, conducting physical verification of assets annually and reporting variations, if any, to HQs & BEC.

To prepare the Annual Programme and Budget (APB) and Annual Report of the Branch with the help of the Accountant/Statistical Assistant and concerned unit heads, supported by the volunteers.

There is system used in the UBL called UNI Bank for the accounts management. The reports generated on this system should review on daily basis by Branch Manager under his signatures and also by the Area Manager and a complete record of these reports in date order should be filed.

3.4.2.CASH MANAGEMENT:

The key person in banking is the Branch Manager who is not only responsible for mobilization of deposits for the bank but also to generate foreign exchange and other business for the bank. He is also taking care that customers of bank are properly served & their problems are immediately solved. He is also responsible for cash management & credit management.

In every city there is a Main Branch (Feeding Branch) of a bank (UBL) which is custodian of cash. All excess cash in the branch is deposited with this branch & whenever any branch needs cash to pay off to the depositors, the Branch Manager is required to make requisition to this Main Branch & the Main Branch provides the required cash accordingly.

3.4.3.CREDIT MANAGEMENT:

As regarding credit management there is a department in the bank called Credit Administration Department (CAD). Deposits are the liabilities of bank while advances are the assets of the bank. To balance these two sides, bank attracts the current as well as

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 50 prospective customers to deposit their savings by offering high rate of interest/ profit, while in order to increase its assets, bank attracts its customers by Corporate Banking Group (CBG) & Commercial Banking Group (CB).

When the credit facilities are approved then work of credit administration department starts. It performs two functions:

Pre-dispersal function (before advancing facility)

Post-dispersal Function (after credit facility is dispersed) It keeps three sections named as:

Processing Section
Documentation Section

MIS (Management Information System) Section

Relationship managers (RM’s) bring cases from customers and present to RCAD. RM’s have direct contact with customers. Case first comes to Processing Officer who checks the necessary prudential requirements if so then case is forwarded to Risk Management Department (RMD) otherwise send back to ( RM) to fulfill necessary requirements. Risk Management Department (RMD) verifies attached documents and send back documents after risk analysis and mention how much loan is to issue (under SBP limitations). Documentation Officer verifies the originality of documents attached and finally DAC (disbursement authorization certificate) is issued to customer. MIS keeps record of the customer in computer. And customer account is opened in the UNI bank (it is also software which keeps record that how much loan the customer has availed). Under mentioned process flow diagram present the right picture.

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 51

P

F

D

L

D

:

If Verified R ej ec te d If approved R ej ec te d Rejected If approved Customer Relationship Manager Processing Section CA Package Preparation CRM Documentation Section DAC Issued Customer Receives Loan

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 52

3.5.

U

E

D

I

D

M

:

In today’s banking new devices have been introduced for efficient & courteous service to the client. Like Online Banking, Net Banking, Mobile Banking, Auto Teller Machines (ATM’s) & Electronic Cashiers.

In UBL most of the decisions are made after getting approval from authority using electronic data. Now a days Statements of Accounts are not dispatched to the account holders. Instead they have been given option to get their Statements printed while using Net Banking. UBL has its own network of 336 ATMs in 83 cities.

Moreover customers can gave all types of instructions in respect of their transactions through E-mails, Net & Mobile Banking. So we can say that electronic data is very widely used in today’s banking.

In branches UBL is using their personal software called UNI Bank 2000. To maintain and exercise and better controls on operations, UNI Bank 2000 provides controls in the shape of daily override/exceptions reports to the branch manager & respective staff. The exceptions include the following:

Transaction by un-issued/loose cheques.
Transactions over debit limit of user.
Transactions on limit expired accounts.

Transactions of excess over limit in Party accounts.
Back dated transaction in the accounts.

Transaction in restricted accounts.
Reversal entries.

Change in customer name, address or other details. etc.

These reports are reviewed by the Manger of the branch and also by the Area Manager which helps them in decision making. This system also provides the following Statements/Reports:

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 53

(A)N

-A

&

A

S

F

H

:

DAILY:

UNIDD032 Contra.

UNIPD052 Hub generated customer transactions.
UNIDD110 Sub ledger.

Statement of condition.
List of new accounts.

Customer accounts/status maintenance.
Unidd040 (ATM transactions).

MONTHLY:

Consolidated income/expenditure.
Incidental charges.

Customer ledger dormant/active.

QUARTERLY:

Unclaimed deposits.
Size wise deposits.

Debit to deposit accounts.

Classification of deposit accounts.

HALF YEARLY:

Customer transactions ledger.
Account amendment report
Profit posting report.

YEARLY:

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD 54
Zakat deduction report.

(B)

A

S

O

A

D

B

:

UniRemote transaction (Inward/outward).
Daily override.

Teller cash report.
Utility scroll/vouchers.
Clearing schedules.
Remittances vouchers.

MOBILE COMPUTING DEVICE:

Mobile computing device is provided only to authorize UBL employees in order to perform business activities with special business requirements.

LAPTOPS:

According to ITG (Information Technology Group-UBL) Policy this type of equipment must be used for official purposes only. Laptops are provided to the persons with the designation having SVP (Senior Vice President) or higher.

PDA :(PERSONAL DIGITAL ASSISTANT)

The intended use for the PDA is to facilitate UBL employees for the following business objectives:

24x7 Access to UBL corporate Emails.
Updated contact list.

List of tasks.

Access to GAL (Global Address List).