REPORT

ON

PRESENTED TO

BY

ID # MB-0085
Habib Bank Ltd
The power to lead

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PLANNING
Planning is the process of coping with uncertainty by formulating future course of action
to achieve specified results. Planning enables humans to achieve great things by
providing a pathway from concepts to reality. The greater the mission, longer and more
challenging the pathway.

 PLANS

What, when, and how things should be accomplished in view of the organization’s
capabilities and environmental uncertainties.

 PLANNING
Sets the stages for all other management functions by establishing purposes and
directions.

 Organizing
Designing flexible authority and responsibility network

 Staffing
Filling jobs with appropriately skilled people.

 Communicating
Making sure individuals to understand and carry out their organizational roles.

 Motivating & Leading

Getting individuals to pursue collective objectives through satisfying needs and
expectations, job redesign, participation, and influence process.

 Controlling
Comparing actual performance with prior plans and taking necessary corrective
action.

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 HABIB BANK LTD
Leading Locally Growing Globally

Setting up the organization include the involvement of certain planned rules or principles
which are termed as management functions, some of which are planning, organizing,
staffing, directing and controlling which have been classified into generally four basic
once such as Planning, Organizing, Leading and Controlling. We are explaining how
theses four function are implemented in Habib Bank Ltd.

Breif about HBL

Habib Bank limited established in Bombay on 25th August, 1941 with a paid up capital of
Rs.2.5 million, by Habib brothers, Mr. Ahmed Habib, Mr.Dawood Habib, Mr.
Muhammad Ali Habib and Mr. Ghulam Ali Habib.

The Habib family migrated to Pakistan in 1942 at the behest of Quaid-e-Azam

Muhammad Ali Jinnah shifted its Head office from Bombay to KarachiQuaid-e-Azam
demonstrated his faith and confidence in Habib Bank limited by opening his personal
account in Bombay Branch in the year 1946.

Habib Bank was the first Bank to introduced new design in architectural construction in
Pakistan by putting up 23-story tallest building of the country, known as Habib Bank
Plaza (a pride of nation). It was adjudged the best building of the country and awarded
“Gold shield” by Karachi Development Authority.

With passage of time Habib Bank become the most popular Bank and symbol financial
entity of a new nation Pakistan.

Habib Bank expanded its domestic and overseas network and to meet the need of time
took lead in modernization and automation by introducing computerized banking
services.

The Habib Bank Limited has always been in the forefront in broadening the base of the
national economics growth. It was Habib Bank that introduced products such as Credit
Cards, ATMs, Travelers Cheques, etc to the Pakistani markets, today Habib Bank is truly
the bank of the people providing its customers convenience and satisfaction all over the
world within 26 countries across five continents, beside 1,700 branches domestically,
with a revamped customer oriented philosophy, pursuing new avenues of leadership
through innovation, gear up to face the challenges of the new millennium.

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 MISSION STATEMENT

“To be recognized as the leading financial institution of Pakistan and a dynamic

international bank in the emerging markets, providing our customers with a premium set
of innovative products and services, and granting superior value to our stakeholders,
shareholders, customers and employees”

Objectives

 Improve customer clientele

 Launching differentiated products in the target market

 Advancement of information technology

 Improved critical success factors, namely sales promotion skills.

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 VALUES

HBL is firmly grounded with a corporate philosophy that incorporates five solid values
which each individual associated with the bank abides by.

• Humility
To encourage a culture of mutual respect and treat both team members and customers
with humility and care.

• Integrity
Integrity means a synergic approach towards abiding core values. United with the
force of shared values and integrity, to form a network of a well-integrated team.

• Meritocracy
At every level, from selection to advancement, designed a consistent system of
human resource practices, based on objective criteria throughout all the layers of the
organization, therefore, able to achieve a specific level of performance at every layer
of the organization.

• Teamwork
Strives to become a cohesive and unified force, to offer the customer, a level of
service beyond their expectations. This force is derived from participative and
collective endeavors, a common set of goals and a spirit to share the glory and the
strength to face failures together.

• Culture of Innovation
Aim to be proactively responsive to new ideas, and to respect and reward the agents,
leaders and creators of change.

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 PLANNING IN HBL
Presently Bank is experiencing intense competition in the trade finance sector in the
middle market and HBL has historically dominated this business has seen a progressive
loss of its market share in recent year mainly to local private sector banks. Previous
organization structure with its many layers leads to long delays while HBL service levels
also lag those of the private sector Banks, so management has decided to reorganize the
bank structure. This structure is a result of an in-depth review by task force within Senior
Management. Regional Chief who are banks front line managers are largely engaged in
operational and administrative duties which does not allow them to focus sufficiently on
business development and on customer.

To address these issues, Bank reorganizes the structure and divides the Bank in following
four groups to make effective control.

 Corporate and investment Banking Group (CIBG)

Cash & Management Division
Assets Remedial Management (ARM-Corporate)

 Retail Banking Group (RBG)

Commercial Banking Group

 International & Overseas Banking Group

Including overseas joint ventures

 Human Resources group

 Corporate Planning & Organizational Development

 Credit Policy & Corporate Affairs Division

 Information Technology Division

Including System Development Department &
Computer Division
 Financial Control Division

 Consumer Assets & Marketing

 Audit Division including BRR (Branch Risk Revue) Department

 Treasury Operations Division

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Strategic goals are defined by the Management Executive Committee and approved by
the Board of Directors. They have divided HBL into three major groups, Corporate &
Investment Banking Group, Retail Banking Group, Commercial Banking & International
Overseas Banking Group.

CORPORATE & INVESTMENT BANKING GROUP

Corporate Investment Banking Group (CIBG) serves large institutional and corporate
customers in Pakistan through 12 dedicated corporate banking centers in all major cities.
The CIBG portfolio consists of most of the largest names in the market and represents all
major industry groups, including textiles, large scale manufacturing, telecommunications,
petrochemicals, fertilizer, airlines, transportation and services. It offers its clients a
comprehensive range of banking services via a one-window interface through designated
relationshipmanagers.

CIBG is recognized as a market leader due to its unique ability to meet the entire
spectrum of a customer’s banking requirements. Our large equity base allows us to meet
the financing needs of the largest corporates and our large network and specialized teams
are able to deliver and provide customized solutions. The Group has increasingly focused
on providing value addition services to our customers, e.g. payroll and cash management
services. The Bank has become a leader in cash management services by leveraging its
large domestic branch network and now provides such services to a range of large and
medium sized corporations, including the Pakistani units of some Fortune 500
companies.

The Group also strives to stay ahead of the market by anticipating customer requirements.
In January 2002, HBL introduced a new product, Foreign Currency Financing, to
exporters. This has been extremely successful as it lowered the financing costs to this
customer segment when it was under pressure from appreciation of the Pak Rupee and a
slowdown in the market.

We strongly believe in relationship banking, which is essential for us to remain

responsive to our customers. We also remain focused on improving productivity and
ensuring the quality of our risk management.

In 2002, CIBG continued to expand the scale of its activities, with a substantial increase
in new customers, revenue and profitability.

The Group’s immediate priority is to increase fee-based income.

An Investment Banking Unit has been established which will focus on loan syndications,

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development of local currency corporate bonds (TFCs) and advisory services. With this
Investment Banking Unit, CIBG now has a fully integrated corporate and investment
banking capability.

Retail Banking Group

The Retail Banking network, with 1425 branches, is the core strength of Habib Bank. Its
extensive reach in all geographic locations – urban and rural – throughout the country
provides access to over 5 Million customers across all sectors of the economy. The
network provides HBL with the largest diversified low cost deposit base of any bank in
Pakistan, and forms the basis for many of our other business lines: corporate and
investment banking and treasury activities.

Retail Banking Group (RBG) has two principal areas of activity; the retail network for
deposit mobilization and the consumer-banking group. Deposits mobilization, the
traditional strength, continued to perform strongly in 2002 with deposits growing by
12%.

HBL is the only major bank to have a very dedicated group to serve the Small & Medium
Enterprises (SME) sector. We believe the SME sector can be an engine of growth for the
economy and represents an area of opportunity for the Bank.

CBG was therefore established in late 2000 to provide banking services and credit on a
structured and systemized basis. It now covers 25 branches in the six major industrial
cities of Pakistan. The Group now works closely with its customers, which cover all
segments of the economy including the textile sector, vendors and suppliers to structure
the finances and improve their capabilities. We have been very encouraged by the
outcome that reaffirms our belief in the potential of this sector.

There is a growing propensity for consumer spending to uplift living standards.

Recognizing that consumer demand can be a major driver of investment and economic
growth, the Government has also moved towards an enabling regulatory framework and
has also taken initiatives to create an appropriate legal regulatory framework to enable
the development of a housing finance market.

With its extensive branch network and large customer base, we believe HBL has an
important role to play in the development of this sector of the economy in which we
expect substantial growth in the next five years. HBL has moved aggressively and has
already introduced three major products; Personal Loans, Car Financing and Consumer
Durable Financing, in association with major suppliers of consumer products. These have
been well received and volumes have been building up steadily. It is our intention to be a
leader in consumer financing. Plans are also underway to develop mortgage financing for
the housing sector.

Agriculture is the most important contributor to Pakistan’s economy. HBL, which has
been a leader in agriculture financing, plans to increase further its credit to this sector

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with a particular focus on providing a wider range of products to small and medium size
farmers. In this regard, to provide flexibility, the Haryali scheme for farmers was
introduced which is a 3-year revolving facility rather than the traditional short term
seasonal financing. Our specialized agricultural finance department helps farmers in
modernizing their farming techniques. The Government has also provided a regulatory
framework to encourage corporate farming and as this develops our participation in this
sector will grow evenfurther.

While we continue to develop our products, we recognize that quality of customer service
will become an even greater differentiating factor in the market. We have taken a number
of initiatives in this area; investing in technology, training and upgrading of our branches.
Extended banking hours and better facilities for utility bill payments have been made
available.

In 2002, we launched real time inter-city banking, internet banking for 500,000
customers and PC banking for our corporate and commercial banking customers. Our
ATM network has expanded and its usage is also growing rapidly.

A Debit Card program has also been introduced which will be available in over 1,000
point of sale terminals within the country.

Inward remittances from overseas Pakistanis provide an immeasurable support to the

economy. Owing to our unique combination of the largest domestic and international
networks, we process the highest volume of overseas remittances into Pakistan. We
recognize that speed and efficient processing is the requirement of remitters and to meet
these needs, we have put in place our FAST Transfer service and our fully automated
processing center in Karachi ensures that all remittances are delivered within 24 hours in
urban areas and 48 hours in rural areas.
In our Retail network, we have an unmatched distribution network, which provides us
many opportunities for growth, and we plan to use this to soon provide additional
services, including wealth management services.

Commercial Banking
Enterprises operating in the middle market contribute significantly to the economy of a
country. Traditionally, this sector was the stronghold of HBL’s business. During the early
90s, with the liberalization of the financial sector in Pakistan, competition in the industry
stiffened due to the emergence of new banks in the private sector. The senior
management at most of these banks comprised personnel from HBL. They not only knew
the market but were also familiar with the shortcomings of HBL. Under the new set-up,
they were able to address these shortcomings and began to target HBL’s customer base.
With the inception of an alternative, HBL customers started migrating to the newly
established banks this causing the erosion of HBL’s market share.During FY-2000
HBL’s management decided to address this issue. Hence forth, Commercial Banking was
created to focus on the business needs of the middle market customers. On November 1,
2000 Commercial Banking came into being, at the time of inception twenty-one HBL

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branches were converted into Commercial Centers and Sub-Centers. They are located in
Karachi, Lahore, Sialkot, and Faisalabad. Subsequently six more branches have been
added to Commercial Banking bringing the total to 27.

Objectives
The objective of setting-up Commercial Banking was two-fold:

 First to stop the erosion of market share in the middle market;

 Second, to regain the lost market share

The strategy adopted to achieve the above objective was to position Commercial Banking
segment as the “Trade Finance Bank” for its customers. The rationale behind this
strategic decision was to capitalize on the existing marketing knowledge & strong
contacts with the middle market customers, who were loyal to the HBL brand.

Following initiatives were taken to address the above issues:

Functionalization of branches into two key areas:

• Marketing; and
• Operations

Implementation of a standard organization at Centers & sub-centers where by there were

two key areas within operations:

Impact of the steps

The decision to setup Commercial Banking has been fruitful. This is evident from the
following results:

• Enhanced customer interaction by the branch management has now become

possible after segregation of marketing and operations at the branch level.
• Decentralization of Credit Authority and streamlining of the processes have
resulted in reduced turn around time. Currently decision making in this area is
perhaps most efficient in the market place.
• Our strategy has allowed us to achieve our first objective; the trend of erosion in
our market share has been reversed. We now would be looking at regaining our
market share.

Commercial Banking is making headway with improvement not only in terms of the
business figures but also in its ambiance. Renovation of is being carried out in order to
give a professional look to all the Commercial Banking Centers.

Units dedicated to service small and medium sized business are located at Karachi,
Lahore, Faisalabad, Gujranwalla and Sialkot. Each unit has Relationship managers with
in-depth knowledge of the market. These relationship managers assist existing and
potential customers with their financial needs.

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Export Finance:

o Finance Against Packing Credit: for pre-shipment requirements.

o Finance Against Foreign Bills: for post-shipment requirements.
o Foreign Currency Export Finance: Dollar financing for pre &post
shipment requirements.
o Foreign Bills Purchase: For financing of export bills
• Import Finance:
o Finance Against Trust Receipt: For financing imported goods.
o Finance against Imported Merchandise: For financing imported goods
o Foreign Currency Import Finance: Dollar financing for import
requirements

Letter of Credit: For importing inventory & capital goods Finance for Capital
Investment:

• Demand Finance: Medium term loans for capital expenditure.

Leasing: for financing capital expenditure. General Products:

• Letter of Guarantee
• Bid & Performance Bonds

Mobilization Advance Guarantees Other Products and services:

• Commercial Day to day banking: There are a wide range of accounts and
services to help you manage your money. We offer:
o Current Accounts: Non-interest bearing account for your daily banking
needs
o Cash Management Services : Giving you the convenience of cash
handling
o Habib Bank Easy Access: Real time “online banking” at commercial
centers for customers online transfer/deposit of payments
o HBL E-Banking: Habib Bank Limited has launched a product “HBL e-
bank” which allows 24 hour access to accounts through internet banking,
and PC banking.
o Auto Finance: convenient car financing

Flexi loan facilities: a personal loans product ATM: Now, adding more convenience, the
customers can also use the ATMs of other partner banks INVESTMENT ASSISTANT
(IA):

IA has been created specifically to assist expatriate Pakistanis who are interested in
investing in Pakistan. Using Commercial Banking as a platform, we will be providing
information of legislative, regulatory and financial nature to prospective investors to help
them setup their businesses in Pakistan.

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INTERNATIONAL & OVERSEAS BANKING GROUP’S
HBL’s InternationaL banking amongst the most extensive of emerging market banks with
a presence in 25 countries through 120 offices of the Group and its affiliates. The
network spans the principal financial centers of USA and Europe, and the developed and
emerging markets in Asia, the Middle East and Africa. The Bank’s 50-year history in the
international market provides it a well-established network of both commercial customers
and correspondent banking relationships.

International & Overseas Banking Group’s (IOBG) principal line of business is trade
finance. HBL’s strong presence in all areas of the domestic market combined with the
extensive international network has provided the Bank a unique ability to capture a large
volume of trade flows relating to Pakistan. In our international units we are also active in
financing local third country trade in niche segments, particularly by leveraging our
network. IOBG units have a well-established customer franchise in the South Asian
origin communities. Activity with other customer segments has also been growing
particularly in emerging markets and now forms an important part of our business.

An additional strength of IOBG is that all international units are entirely self funded
through stable well diversified local customer deposits or capital which enables us to
develop local commercial and, in specific markets, consumer businesses while
minimizing the inherent cross border exposures.

The year 2002 was the first full year of operations of Habib Allied International Bank -
HBL’s UK based subsidiary - which has greatly enhanced our capabilities to serve our
UK and international customers.

African operations remained buoyant largely due to HBL's established franchise,

utilization of extensive branch network of Habib Bank Limited and Habib Nigeria Bank
(HNB), which is one of the most successful banks in Nigeria with a country wide retail
network of 55 branches and a growing presence in the corporate sector. HBL has a
sizable market share in the region, which has resulted from focused marketing efforts.

Gulf region generated improved earnings, due to participation in large syndications,

enabling utilization of liquidity in viable business transactions. The turnaround efforts in
the past few years have now been completed with balance sheet clean up and cost
structure rationalization.

In summary, 2002 saw a significant improvement in all areas of international operations.

Going forward, IOBG will continue to grow by focusing on its core strengths and further

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developing synergies with our domestic businesses and within the international network.

TREASURY
The role of our Treasury is reviewing, streamlining and controlling the Bank's domestic
and international money and foreign exchange markets related operations for the
maximization of returns on assets and equity, aiming to transform treasury related risks
into safe revenues on a continuing basis.

In the past year, GTG has gone through some exciting times that witnessed restructuring
and redesigning to take advantage of HBL's size and substantially improve its revenue
generatingcapability.

A customer focused relationship strategy is in place with a view to ensuring that we offer
the best service to our clients along with the best competitive rates they have come to
expect from us. A Treasury Marketing Unit (TMU) has been set up to further improve
customer relationships with our largest customers by offering quality service to our
valued clients and to actively seek out new treasury business.

Risk management and control at HBL is built on the platform of transparency and
accountability. In fact these two precepts are an integral part of HBL's culture and the
basis of the fundamentals of all our businesses. To achieve better risk management and
processing, Treasury Operations activities and dealing rooms are strictly segregated. Our
new system "Treasury Power Pack" was acquired and implemented providing an
integrated system for back office and front operations, online monitoring, risk
management, audit controls, automated deal transfer to back office, MIS reports and
inputcontrols.

We believe in offering innovative services with streamlined processes. Our treasury

professionals, with practical experience in the largest financial institutions of the world,
are well placed to deliver the same.

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 S W O T ANALYSIS
STRENGTHS

 Habib Bank has a real advantage for the Bank as compare to its
competitors.
 The Bank has extensive domestic and international network having 1705
(domestic) and 55 (overseas) branches.
 Door step service through its big logistic, creates its image and loyalty in
the eyes of customers, as family bank.
 Effective marketing skill leads in innovation of products is also a big part
of its goodwill.
 High portfolio of customers in every sector of the economy, from retail to
small enterprises, middle market to the largest corporate customers.
 Strong Deposit portfolio.
 Effective Career Planning.

WEAKNESSES

 High transaction time.

 Ineffective Pay for Performance.
 Appointment on political grounds.
 Slow pace of technological advancement.
 Defective Promotion criteria.
 High rate of Non-Performing loans.
 Tension full environment.
 Products are not supported after sale.
 Eight Presidents has been changed in last 15 years, average less than 2
years for each President.

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OPPORTUNITIES

 The present initiative of launching IT Policy and Action Plan by the

Ministry of Science and Technology has revived serious interest in developing the
IT industry in Pakistan.
 To promote e-commerce in Pakistan, the State Bank of Pakistan (SBP)
has agreed to allow the opening of Internet Merchant Accounts within Pakistan
 Permission of private banks.
 Adverse economic conditions of Pakistan.

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The performance of HBL during the last two years is as under which shows the growth
in all segments.

FINANCIAL HIGHLIGHTS
%age
2002 2001
growth
Balance Sheet
1 Total Deposits 328,182 283,445 16%
2 Total Assets 403,013 333,751 21%
3 Advances 167,523 167,225 0%
4 Liquid Assets 147,822 85,228 73%
5 Shareholder' Equity & Revaluation Surplus 19,498 12,611 55%
6 Capital Adequacy Ratio 10.02% 8.86% 13%
7 Liquid Assets % Deposits from Customer & Bills Payable 47.36% 30.61% 55%

Profit & Loss

8 Total Net Income 18,564 16,788 11%
9 Total Expenditure 11,748 11,810 -1%
10 Provision for Non-performing Loans & other 2,512 2,637 -5%
11 Pre-Tax Profit 4,088 2,224 84%
12 Profit after Taxation 2.034 1,112 83%
13 Earning Per Share (Rs/ Share) 1.68 0.92 83%

Others
14 Home Remittances 38,229 22,267 72%
15 Exports / Imports 214,590 175,500 22%
16 Number of Branches 1,473 1,516 -3%
17 Number of Staff 19,005 19,352 -2%

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 ORGANIZING

Habib Bank Ltd governed by the Board of Directors. The President is also the Chief
Executive Officer of the Bank. Members of the Board are from the Public & and the
private Sector. Present Board of Directors consist of

Mr.Zakir Mehmood President & CEO

Mr.Ebrahim Sidat Director

Mr.Sajid Zahid Director

Mr.Ansar Hussain Shamsi Director

Mr.Sikander Mustafa Khan Director

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Members of the Management Committee are the Group Executives of the bank, who are
representing their groups.

MEMBERS OF MANAGEMENT COMMITTEE

Mr.Zakir Mahmood President and Chief Executive Officer

Mr.Altaf Hussain SEVP & Group Executive Audit,

BRR & Investigation

Mr.Atif R. Bokhari SEVP & Group Executive

Corporate & Investment Banking

Mr.Ayaz Ahmed SEVP & Group Executive

Financial Control & Corporate Planning

Mr.Hanif Akhai SEVP & Group Executive

Global Treasury

Mr.Jamil A. Khan SEVP & Group Executive

Retail Banking

Mr.Jamil Iqbal SEVP & Group Executive

Global Operations

Mr.Khaleeq Kayani SEVP & Group Executive International

Mr.Khayyam Mahmood Butt SEVP & Group Executive

Information Technology

Mr.Naeem Iqbal SEVP & Group Executive

Asset Remedial Management

Mr.Sohail Malik SEVP & Group Executive

Credit Policy

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HBL network consist of 1425 in Retail Banking ,12 Corporate Centre in CIBG & 120
0ffices in 25 countries in all over the world.

CORPORATE & RETIAL BANKING INTERNATIONAL

INVESTMENT BANKING GROUP & OVERSEAS
GROUP BANKING GROUP

12 Corporate Centre 1425 Branches RBG 76 Branches& 3

Subsidiaries
Karachi 5 2 Affiliates
23 Commercial Banking 1 Representative
Multan 1 Centres
Lahore 1 Office
Sialkot 1 USA
Karachi 9 France
Rawlpindi 1 Lahore 6
Islamabad 1 Belgium
Sialkot 5 The Netherland
Peshawar 1 Faisalabad 2 Sudan
Gujranwala 1 Kenya
Turkey
Oman
UAE Bahrain
Bangladesh
Singapore
Srilanka
Hongkong
Sychelles
Mauritus
Fiji Island
Australia

LEADING

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HBL is an organization that provides opportunities for its staff to have a challenging and
rewarding long-term career. The management encourages and motivates its employees to
excel in the responsibility they have in the organization. We believe that creativity and
innovation comes from talent, knowledge and experience and it is our endeavor to
provide and maintain an environment which not only nourishes these strengths but also
provides opportunities for the staff to have a career which has multidimensional growth
opportunities.

Management has been restructuring and redesigning the overall structure of the
organization, which includes rationalization, cutting down the decision layers,
improvement in staff training, and hiring of professionals and MBAs at entry level
management.

Presently in Habib Bank there are more then 19,000 employees working at Domestic and
oversea operations including at Head office Karachi.

In 1998 Mr. Shaukat Tarin (Former President) introduced “Pay for performance” to
motivate the employees, to achieve the desired goals and to bring a culture of meritocracy
in Bank, for that purpose a plan named “Performance Appraisal and Development Plan”
was implemented for all matters of promotions, salary raises, career planning and
development through out the bank.

The whole performance appraisal process has been divided into two parts as under: -

 Appraisal by objectives (ABO) and

 Appraisal by ability (ABA).
There are performance categories like A, B, C & D and every individual is to be placed in
each category depending upon his performance and achievements of targets given at the
beginning of each year.

The above performance appraisal system has been endorsed and continued by the present
management of Mr. Zakir Mahmood (Present President)

Besides the above performance appraisal system Management is keen to impart training
and skill development of the employees at various levels. HBL has its own Management
Development Institutes (MDI) at Karachi, Lahore and Islamabad.

Last year some 15000 employees were given opportunity to enhance their skill at these
institutes. Management is also sponsoring those officers who are doing their MBAs at
various Universities.

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 STAFF RETIREMENT BENEFITS
The HBL operates the following schemes for its employees: -

 OLD SCHEME

For employees who did not opt for the new scheme of the bank operates.

1. Approved, Funded gratuity scheme.

2. Approved, contributory provident fund.

 NEW SCHEME

For new employees and for those who opted for the new scheme introduced in
May 1977, the bank operates

1. Approved funded pension scheme.

2. Non-Contributory Provident fund.

Trustees administer these funds contributions are made to the gratuity and Pension
schemes by the bank based on actuarial advice. Contributions at the rate of 8.33% per
annum and 20% per annum of the basic salaries are made for gratuity and pension
schemes respectively.

 BENEVOLENT FUND
The bank also has benevolent fund scheme and group insurance scheme for their
employees.

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 CONTROLLNG

Control is the regulatory process that directs the activities an organization conducts to
achieve anticipated goals and standards. To control and monitor the branches and
Controlling Offices internal audit has been conduct once or twice in a year. External audit
also conduct by the Chartered Accountant firms approved by the Board of Directors. The
Audit Division consist of Seven Regional Audit Offices & CIBG Deptt and headed by
the Group Executive of Audit & Investigation .
Group Executive
Audit & Investigation
CIBG Audit Deptt
HOK

Commercial ,Corporate & Overseas

& Other Big Size Branches

RAO RAO RAO RAO RAO RAO RAO

Karachi Hyderabad Multan Faisalabad Lahore Rawalpindi Azad Kashmir

Karachi Ineterior Lower South Lahore, Rawalpindi Azad

Branches Sindh Punjab Punjab Sialkot Peshawar Kashmir
Branches Branches Branches

CIBG Deptt conducting audit of big branches of all over Pakistan as well as Overseas
Branches. The Regional Audit Offices conducting audit of branches of their Region.
Their main focus is to y monitored

The management Audit also conducted for controlling office to monitor that the powers
and authorities conferred to them by Head Office are utilized as per rules and regulations
of the Bank

The Bussiness Risk Review (BRR Deptt) is conducting on risk point of view,They assess
the health of the assets and the procedure implementation of Credit Policy of the Bank.

The Internal Control Division is under the Global Operations Division , they monitor the
implementation of Procedure and instruction given by the Head Office time to time
through Circulars which has been implemented or followed by the branches. In some of

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big branches which have the large volume of transaction permanent ICD Officer is posted
to monitor the working of the branch on daily basis.

In Group level i.e.CIBG, RBG, IOBG, Commercial Banking Complinace offices are
established to check & monitor the branches that the violations pointed out by the
Auditors are now been rectified and now the correct procedures are followed by the
branches.

24
 SUMMARY
Habib Bank is comprises of huge network of branches at home as well as over-seas to
cater the needs of their customers. Management has been succeeding to bring the bank in
to profit.

Management has decided to abolish 48 Zones and 9 Regional Headquarters through out
Pakistan i.e. November 01,2000. Instead of which they have decided to introduce 23
regions located at main cities of Pakistan to cater customers’ need. By this act
management layer has been eliminated and the branch managers have to directly contact
with authorized at regional levels. It will help to reduce administrative cost. Besides this
management has also decided to introduce COMMERCIAL and RETAIL BANKING
GROUP. Commercial Banking Group started functioning from November 01 2000 with
23 designated branches.

Marketing Department was successfully launched different schemes / product like

Crorepati Deposit Certificate, Muhafiz Rupee Traveler Cheques, etc. to target its each
segment. This scheme generated huge deposit for the bank, which also helps the bank to
raise its liquidity position.

The sale force of bank is contributing considerably increasing revenue, through sale of
their products. The bank at present is targeting every segment and not giving room to
other institutions and it enjoys a leadership role in banking industry. With the slogan
“The Power to lead.”

The staff is well interacted with each other and timely decisions are taken to capture the
market opportunities. The resources generated are timely mobilized for the uplift of
economy by way of financing in big projects as well as looking after working capital
requirement of the customer.

The bank’s weaknesses are being corrected by way of imparting training to the
employees and adopting the latest technology like, SWIFT, e-mails & INTERNET.

Habib Bank enjoys a leadership role in the Banking Industry of Pakistan because of
having its wide network and large sale force as compared to other banks.

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BIBLIOGRAPHY

1. www.habibbankltd.com
2. Annual report-2002 of Habib Bank Limited
3. Procedural & Accounting Manual of Habib Bank Ltd
4. Credit Policy of Habib Bank Ltd
5. Circulars of Habib Bank Limited

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