ALLIED BANK LIMITED
TABLE OF CONTENTS TOPIC
PAGE NO.
CHAPTER 1
1
INTRODUCTION
1
Definition of Banking
1
Origin Origi n of Banking
1
Banking in Pakistan
3
Organization of Banking in Pakistan
4
Historical Histori cal background backgr ound of ABL
6
Socio-Economic Socio-Economic Objectives of ABL
8
CHAPTER-2
12
The Business of ABL
12
Functions of ABL
12
Management by Employees
17
Serving the Community
18
Departmentation
18
CHAPTER-3
27
HUMAN RESOURCE MANAGEMENT MANAGEMENT
27
Classification of ABL
27
Recruitment
28
Selection and Hiring Process
29
Probation and confirmation confir mation
30
Training
30
Promotion
30
Salary Administration
31
Performance Appraisal
31
Transfer
32
Retirement
32
1
Resignation
32
Termination of Services
32
Discharge
33
Disciplinary Rules
33
Penalties
34
Appeal
34
Leave
34
Allowances
35
Fringe Benefits
36
Compensation
36
ABL saver¶s schemes
37
CHAPTER-4
Critical Critica l Analysis Analys is of ABL CHAPTER-5
Recommendations & Conclusions
48 48
53 53
2
CHAPTER ² 1
INTRODUCTON
j
DEFINITION OF BANKING
The best definition of a bank is in terms of its functions. ³A banker is a dealer in credit, he borrows from the public or people, and lends to merchants or manufacturers. He borrows by accepting deposits, and lends by way of advances against goods or securities or by discounting bills.´ Collins English Dictionary defines band as ³ an institution offering certain financial services, such as the safe keeping of money, conversion of domestic into and from foreign currencies lending of money at interest.´ A band is an organization or a business house, which deals with money, credit and other financial transactions. In general banks attract surplus money from the people who are not using it at the time and lend to those who are in a position to use for productive purposes. Thus people who have spare money they deposit the same in the band where it can earn profit. On the one hand bank receives deposits from the people and pays profit at a specified rate and on the other hand it advances loans to the people in need at the specified interest rate of mark-up. j
ORIGIN OF BANKING
The word ³Bank´ itself is derived from the words ³Banco´ ³Bancus´ or ³Banque´ which means a bench. The early bankers, the Jews to Lambardy, transacted the business of money exchange on benches in the market. Banking is an ancient institution. It is in fact as primitive as human society. Modern banks have developed from very old system of banking. It has been growing side by side with the human civilization. Historians are of the opinion that perhaps they were the Babylonians who developed banking system as early as 2000 BC There is evidence to show that the temples t emples of Babylon were used as bands.
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This was all because of the prevailing respect and confidence in the Clergy. King Hammurabi (1728 ± 1686 BC) the founder of the Babylonian Empire drew up a code where in he laid down standard rules of procedure for banking operations. In Greece, such temples are those of Ephesus and Delphi, were the most powerful and biggest band of their time where the people deposited their money and other callable for safety and security. The private bankers of Greece brought banking to a high state of safety and security. The private bankers of Greece brought banking to a high state of development thorough lending. Banking became so popular in the business life of Athens that a special body of law was developed covering all financial transactions. The Romans organized and regulated the conduct of private banks in such a way that utmost confidence was created in them. They were familiar with the use of cheques and bills of exchange. The Sub-continent society was also quite familiar with banking system right from the beginning. Borrowing and lending of money existed in this area between 2000 and 1400 BC and the banking institution existed in one form or the other. G. Crowther in his book ³An out-line of Money´ suggests that bankers has three ancestors. Firstly; Gold Smiths, Secondly; S econdly; merchants and thirdly; moneylenders. In Europe, Eastern Bankers were moneychangers. At that time, these people took an advantage of the process and started keeping deposits of valuables and jewelries on the basis of their sound financial position in the community. The origin of banking, which started in the 12th century after the fall of Roman Empire subsequently, developed with the development of trade. The Jewish merchants of Lombard developed baking system. Many of these Lombard (Merchants) migrated to th
England in the 14 century, were the pioneers of Banking. Ba nking. The ³Bank of Venice´ established in the year 1157 or 1171 AD is perhaps among the first public banking institutions. Other bands such as Back of Barcelona in Spain was founded in 1401, the Bank of Geneva (Italy) in 1407, the bank of Amsterdam in Holland was established in 1609.In England development of bank took
4
place in the days of Elizabeth-1. In 1640 public banking started. The Bank of England was established in 1694. In 1935, Reserve bank of India was established. Quaid-eAzam Mohammad Ali Jinnah inaugurated the State Bank of Pakistan on 1 st July 1948. j
BANKING IN PAKISTAN
At the time of independence, the areas, which now constitute Pakistan, were producing only food grains and agricultural raw material for Indo-Pakistan SubContinent. There were practically no industries, and whatever raw material was produced was being exported from Pakistan. However Commercial banking facilities were provided fairly well here. There were 487 offices of scheduled banks in the territories now constituting Pakistan. Therefore, in accordance with the provision of Indian Independence. Act of 1947 an Export Committee was appointed to study the issue. The Committee recommended that the Reserve Bank of Indian should continue to function in Pakistan until 30th Sep. 1948, so that the problems of time and demand liability, coinage, currencies, exchange etc. are settled between I ndia and Pakistan. j
Organization of Banking in Pakistan
At present the banking structure in Pakistan comprises of the following:
State Bank of Pakistan
Operates as the controller of money market. It is the Central Bank of the Country with its offices at Karachi, Lahore, Peshawar, D.I.Khan, Sialkot, Sukkur, Hyderabad, Gujranwala, Multan, Quetta, Faisalabad, and Rawalpindi/Islamabad.
Commercial Banks
Commercial Banks have been the most effective mobilizes of savings and have been providing working capital to trade commerce and industry. Presently these banks are operating in the nationalized and private sectors, after implementation of various amendments in the Bank¶s Nationalization Act 1974 in 1991.Upto Dec. 31, 1973 there
5
were 14 Pakistani Commercial Banks, which were functioning all over the country and in some foreign countries through the network of branches. These were joint-stock banking companies incorporated under the Banking companies Act. However, all these banks were nationalized with effect from January 1, 1974. According to the provision of the Bank¶s Nationalization Act, 1974, all the commercial banks were reorganized reorganiz ed and merged into t he following five banks. i.
Habib Bank Limited
ii.
United Bank Limited
iii.
National Bank of Pakistan
iv.
Muslim Commercial Commercial Bank Limited
v.
Allied Bank of Pakistan Limited However, keeping in lime with the policy of liberalization of economy,
Government of Pakistan intends to disinvest and denationalized these banks in various phases. So far Muslim Commercial Bank and Allied Bank of Pakistan already been disinvested while efforts are underway to disinvest the United Bank Limited, Habib Bank Limited and National Bank of Pa kistan too.
Exchange Banks
Foreign banks other than Indian banks have been commonly known as µExchange Bank¶ due to the fact that prior to Independence foreign banks in the IndoPakistan Sub-continent were engaged primarily in finance of foreign trade and exchange business. At present more than twenty-four foreign banks and European, American, Middle Eastern, African and other countries are operating there more than 83 branches in the port and main commercial towns in Pakistan.
Cooperative Banks
6
Cooperative banks are an integral part of the cooperative movement which aims at the promotion of thrift self-help and mutual aid amongst agriculturist and others with common economic needs so as to bring about betters living, better business and better methods of production etc. Generally, there is a three- tier system of cooperative banks in Pakistan; and this system consists of Primary Cooperative Societies at the base; Central Banks and Banking Unions in the middle; and Provincial Banks at the top a s µApex Banks¶. There are 4 provincial or Apex Cooperative Banks, one each in Punjab, Sindh, N.W.F.P., and Balochistan; Fifty-two Central Cooperative Banks and Banking Unions and above 28000 Primary Agricultural and Credit Societies.
Cooperative Credit Societies
These are the societies, which have been formed to promote thrift, and self help among its members belonging to groups of agriculturists, artisans and persons of limited means. With the promulgation of Federal Bank for cooperative Act 1977, these societies are no more affiliated with provincial cooperative banks and cannot use the word ³Bank´ in the names.
Saving Banks
There is only one Saving Bank in Pakistan i.e., Post office Saving Bank and it is controlled wholly by the Government of Pakistan. It accepts deposits from public and invests them in various government projects. Its operations, therefore, is very limited.
Specialized Credit Institutions
These institutions are generally government sponsored corporations that provide medium and long-term finance to various sectors. Most of these institutions are players in the capital market in Pakistan.
7
HISTORICAL BACKGROUND OF ABL
Allied Bank of Pakistan Limited is the first commercial bank established on Pakistani soil. It has emerged as an Australasia Bank on Dec. 3, 1942 at Lahore with paid up share capital of RS. 0.12 million in a motor garage under the chairmanship of Khwaja Bashir Bux with a staff of three. Initially, it was little more than an agency for the collection of rents from the family estate. Then, the tenants began to open accounts and the bank to make advances against gold, insurance policies, and merchandise. The Bank had attracted deposits, equivalent to RS. 0.431 million in its first eighteen months of business. Total assets then amounted to RS. 0.572 million. Today, Allied Bank¶s Authorized Capital is RS. 5000 million, Paid up Capital & Reserves amount to RS. 3012 million, Deposits come to RS. 93107 million and total assets equal to RS. 106926 million (as on Dec. 31, 1999). The Allied Bank¶s story is one of dedication, commitment to professionalism, adaptation to changing environment challenges resulting into an all round growth and stability, envied and aspired by many. Later in 1973, Government of Pakistan decided to nationalize all banks of the country and in the process, three smaller banks namely Sarhad Bank (Frontier Based), Lahore Commercial Bank and Pakistan Bank were merged with a relatively bigger and stronger Australasia Bank. A joint force with fresh zeal and enthusiasm was emerged, named as Allied Bank of Pakistan Limited. Being a National Bank, ABL kept moving forward steadily, contributing towards economic growth of country. As time passed, our nation entered into the phase of denationalization and privatization. During 1991, the Government of Pakistan decided to privatize Allied Bank of Pakistan Limited. Prime Minister Mian Muhammad Nawaz Sharif during his first regime handed over management of the bank to its own employees, as a unique phenomenon in the country. At present the employees are acquiring 51% shares where as the rest of 49% are held by Federal Government apart from holding 49% bank¶s shares the Government has also representation of 3 Directors in the total strength of 7 member of Board of Directors of the bank ba nk who are fully and actively involved in the bank¶s affairs such as policy making and other financial matters.
8
Post privatization era proved a blessing for ABL and it has shown tremendous progress in all fields of banking. ABL has a network of over 900 branches in Pakistan, whereas 150 branches are working in N.W.F.P.
SOCIO-ECONOMIC OBJECTIVES
The Socio-Economic Socio-Economic targets and goals of ABL are:
To participate in the economic development of the country.
To ensure greater satisfaction of its customers by providing better quality services.
To ensure more utilization of public money.
To provide loan on easy terms to the unorganized sector of the economy so as to reduce the income disparities and to help raise the standard of living of the poor. Beside these corporate and socioeconomic objectives, profit is the primary
objective of all financial organizations, and all different activities are aimed towards its achievement. The ABL is also a business organization and its main objective is to maximize its profit. The ABL can achieve a chieve its objective of profit maximization by two wa ys:
INCREASE IN DEPOSITS
Competition in banking is intense and every bank, whether foreign or Pakistani tries to increase t heir field deposits by providing better facilities to its customers. There are eighteen foreign banks and five nationalized Pakistani banks and all of them try to attract attra ct more and more customers customer s in order to increase their deposits. depos its. The bank can ca n extend greater amount of loans by increasing deposits, and hence profit. It can extend greater amount of loans and hence pr ofit maximization will be achieved.
9
The bank always tried to attract customers to open current accounts because on current account, no interest is paid, although facilities are provided. Infect companies are not allowed to invest their money in saving or other deposits because of nature of saving accounts which will be discussed later. ABL and all other banks are to report to the State Bank of Pakistan. The only difference is increase in the profit through few of the following factors: i. ii.
Providing better product with attractive interest rates. Improving its services.
iii.
Courtesy.
iv.
Professional Customers Services Officers.
Better Product with Attractive Rates:
Providing such products, this can attract people from other competitors.
Improving its Services:
Services like prompt payment of cheques, TT¶s drafts etc. provided by the ABL make it different from other Pakistani Banks which are nationalized and most cannot provide such efficient services.
Courtesy:
Courtesy is an essential part of business and by being courteous one can attract more and more customers. All the staff of Grindlays is required to undertake a compulsory training which is intended to make them learn to be polite with the customers.
Professional Professional Customer Customer Officers:
Providing Professional Customer Services Officers who can deal with the customers professionally and can satisfy them eas ily.
Extension of Loans:
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The profitability of a bank depends on the amount given to the people as loan and the type of people to whom credit is given i.e., the credit worthiness of the borrows. Deposits are collected from people and invested in different projects. It is the duty of the bank staff to determine the viability and profitability of the projects. It is also the duty of the bank staff to attract people, who are reliable and worthy of being given loans by the bank. The bank charges mark up on the credit it extends and the mark up charged on credit is the biggest source of income for the bank. Thus a bank¶s profitability will increased in the bank¶s profits.ABL has an extremely well organized investment bank. The staff is educated, trained, well mannered and competent. There are different officers whose job is to look after certain account holders, which are either borrower. Complete financial analysis is made of the loan applicant and different ratios are calculated. The bank specially emphasizes a sound quick ratio because it shows the current assets, which are cashable and can be relied upon to provide cover for the loans.
SERVICE OBJECTIVES
ABL is strongly oriented towards providing banking services to meet the needs of the customers. It offers a wide range of services to its customers in addition to the proper banking functions.
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CHAPTER 2
THE BUSINESS OF ALLIED BANK :
The business of the bank is to satisfy c ustomers who seek assistance and advice in meeting their financial goals. Its primary emphasis is general banking services, namely deposits, loans, payment and collection. Fund management services, merchant banking and leasing, credit for small and large enterprises etc. are also being offered by the bank. It has selectivity entered into new areas that broaden the range of services, logically extend the existing strengths and match and surpass competitor offerings. Pakistan is its principal market. Abroad. It has presence in the United Kingdom, along with a number of representative and correspondent banks around the Globe. It¶s rapidly seeking expansion in the Middle East and Central Asia.
FUNCTIONS OF ALLIED BANK LIMITED
Functions of ABL are summarized below:
Accepting Deposits:
The primary function of the commercial bank is to receive surplus balances of individuals, public houses and institutions and to honor cheques drawn unto them. The funds deposited with Allied Bank are as follows: (a)
Current deposits:
Current deposits are those deposits, which can be withdrawn at any time by drawing a cheque on the bank. ABL does not charge markup on the deposits because they are short-term deposits and are repayable without any notice. (b)
Profit and Loss Sharing Account (Saving):
These deposits are not meant for the purpose of current payment but for payment but for employing savings.
12
The bank undertakes to repay deposits on demand upto certain limit. On such deposits to declare the following PLS profit rates for t he period Types of Deposit PLS Saving Deposits
8.00% per annum
PLS TDRs ± 1 Month
8.40%
2 Month
8.80%
3 Month
9.20%
6 Month
10.40%
1 Year
10.80%
2 Years
11.80%
3 Years
12.70%
4 Years
13.70%
5 Years
15.00%
PLS SNTD 7 Days 30 Days (c)
6.00% 6.80%
Fixed Deposits:
These deposits are repayable only after the expiry of the period for which they are repayable only after the expiry of the period for which they are deposited. The bank allows high rate of interests on them depending on the time period of loan. The shorter the time period of loan, the less will be the interest rate and vice versa.
FINANCING;
The other important function of the ABL is t o provide finances to the individuals and business houses houses against s ecurities at a certain fixed rat e of interest. ABL tried to attract the idle funds of the public and lend them at higher rate of interest then what t hey pay to their customers following four types of financing ta kes place at ABL:
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i.
Demand Finances:
Demand Finances are t hose finances, which are given on demand. It is a single transaction. It can be long, medium and short t erm. Markup is also charged. Here the amount can be withdrawn once at the time of disbursement. ii.
Running Finances:
It is always a short-term loan i.e., one-year. It can be withdrawn at any time and deposited at any time. It is basically ba sically for running day today business operations. iii.
Cash Finances:
Cash finances are for a limited period of time i.e., one year. It is advanced to people to complete the working process. iv.
Fixed Asset Financing:
Fixed asset finances are long term finances. These are provided to projects for purchase of machinery and cost of purchase.
DISCOUNTING BILLS OF EXCHANGE:
The bank utilizes their surplus funds in another important way. They discount the bills of exchange at their market worth, i.e., the pay to the holders of the bill an amount equal to their face value after deducting interest at the current market rate for the period the bill has to mature. The bills of exchange are a very liquid asset for a bank to hold. These bills are usually drawn for three months and are used for financing internal as well as external tra de. In addition to the above main function, ABL performs a number of other services for their clients. These services are as follows:
Agency Services to Customers:
Following are the agency services to ABL.
14
i.
Collection Collecti on of Cheques
ABL acts as an agent to its customers in the collection and payment of cheques, bills and promissory notes. Bank charges 60% commission on collection of cheques. ii.
Collection of Dividends:
The bank provides a very useful service in the collection of dividends or interest earned on stocks and shares held by his customers. The customer is simply to inform the issuer of the securities that the interest on the securities is to be credited to his account in the bank. Bank charges 30% on this collection. iii.
Purchase and Sale of Securities:
ABL is authorized by the customer, purchase or sale securities on his behalf and thus adds another benefits to his portfolio. Banks charges are as follows: 15% upto RS. 10000 10% on amount exceeding RS. 10000 iv.
Execution of Standing Instructions:
The customer may order in writing to his bank to make payments of regularly securing nature to an individual or firm by debiting to his account. The payments will be stopped on written instruction of the customers only. ABL charges RS. 20 per transaction. v.
Transfer of Funds:
ABL also transfer funds of the customers from one bank to another bank. If the transfer is at one station, they don¶t charge any commission and even if they charge, they charge on reduce rate. vi.
Acts as an Agent:
ABL also acts as an agent, correspondent or representative of his customers at home and abroad.
GENERAL UTILITY SERVICES:
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ABL also performs a number of other general utility services to his client, which are as follows: i.
Foreign Exchange Business:
ABL transacts foreign exchange business by discounting foreign bills of exchange and thus provides facilities for financi ng the foreign trade. ii.
Acts as a Referee:
ABL provides a useful service to his customers by acting as a referee for his credit worthiness. The information is supplied in almost secrecy and is based impartially on the respectability and financial standing of the client. iii.
Acceptance of Bills of Exchange:
ABL also undertakes acceptance business in connection with bills of exchange and thus enables its c ustomers to obtain the desired credit. iv.
Issue of Traveler¶s Travel er¶s Cheques:
The bank has introduced the schemes of Rupee Travelers Cheques and issues them for the convenience of travelers and charges a nominal commission. In addition to these bank also performs a number of functions and activities for and on behalf of its clients with the sole purpose of serving them to the best of its capabilities and potentialities. v.
Collection of Utility Bills:
The ABL branches throughout the country accept all sorts of telephone, water, gas and electricity bills from public and even it has set up special booths for utility bills collection in areas where branches of ABL are not available nearby. ABL has got the widest bills collection network throughout the country. vi.
Locker:
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ABL also provides locker facility ro its clients where valuable of people can be kept. Following are the charges of bank:
Small
RS. 300/- per annum
Medium
RS. 500/- per annum
Large
RS. 800/- per annum
Extra Large
RS. 1500/-per 1500/-per annum
MANAGEMENT BY EMPLOYEES:
Almost every employee is a shareholder and owner of the Bank. Bank. Management¶s foremost responsibility responsibility is to keep them fully informed and participate. With the help of about 9000 employee owners the bank maintains a prudent risk profile and a strong credit rating to prot ect shareholders¶ investment.
SERVING THE COMMUNITY:
Local communities expect from bank to consistently discharge its social responsibility as employee-cum-owner corporate organization. It is achieved by serving the public interest and the interests of consumers and local business nationwide. It encourages its business its business partners to participate in community work.
DEPARTMENTATION:
ABL has various departments, which are performing different jobs assigned to them. It has following seven departments. 1.
Cash Department.
2.
Advances Department
3.
Remittance Department
4.
Foreign Exchange Department
5.
Clearing department
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1.
6.
Bills Department
7.
CD Department
Cash Department: Departme nt:
Cash department deals with the cash in the bank. The basic function of cash department is that it receives money from people and makes payment to people. When the bank receives money, it is deposited with the bank and cheque is presented to the customers with the help of which t hey can withdraw money at any a ny time. Payment can be done through cheque and cheque is merely an order on a bank by its client to pay a sum of money to himself or to a third party on demand.
Features / Essentials of Cheque:
a.
It must be in writing.
b.
It must be an unconditional order.
c.
The drawer must sign it.
d.
The banker must be specified on the face of the cheque.
e.
It must be payable on demand.
f.
The cheque must contain sum of money to be paid.
g.
It must be payable to the order or bearer of the cheque.
There are three kinds of cheques:
i.
i.
Bearer Cheque
ii.
Order Cheque
iii.
Cross Cheque Bearer Cheque: Cheque:
Bearer Cheque is that which any person who presents it at the counter can cash from a bank. It requires no endorsement.
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ii.
Order Cheque:
If the word bearer is cut from the cheque and the person who issue the cheque write the name of t he person e.g., pay to Mr. Ahmad, then the payment will be made to the same person which is written on the cheque, it then become an order cheque. Order cheque is a safe form of payment because it cannot be enchased unless a bank ascertains that it is paid to the person. iii.
Crossed cheque:
If the parallel line are drawn across the face of the cheque and the words ³& Co.´ are written between term, it becomes a crossed cheque. This cheque can only be deposited in the payee¶s account, or the payee can endorse it to somebody else¶s account.
Dishonored Cheque:
A cheque is said to be dishonored when it is not paid on presentation by the bank on which it is drawn on account of the following reasons: i.
Cheque is out of date.
ii.
Date is not mentioned.
iii.
Amount written in words and figures does not agree.
iv.
Customer has become insolvent or has no funds at his credit.
v.
When the signature over the cheque differs from specimen signature.
vi.
Drawer has closed his account.
vii. viii.
Cheque is mutilated. When the banker has been served with ³ Garnishee order´ i.e., an order by the court of law ordering the bank not pay or honor any cheque drawn by his customer.
ix.
Lack of full signature on any alteration. alt eration.
x.
When the banker receives the notice about the death of customer.
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xi. xii.
When the amount of the cheque exceeds the funds of the customer. Post-dated cheque presented before date.
xiii.
Cheque is six months old i.e., stale cheque.
xiv.
Spoiled cheques.
xv.
Title of holder is defective.
xvi.
The drawer stops payment.
xvii.
Funds are not received.
xviii.
Payee¶s endorsement is irregular.
xix.
Payee¶s endorsement is not made.
xx.
Pencil written cheque.
xxi.
Cheque bears a rubber stamp signature.
xxii.
When the banker receives a notice of loss of cheque and the cheque is presented for payment. Banks deals with three types of transactions when they receive cheques from
their clients: a.
Clearing:
It deals with transaction tra nsaction or cheques relating with other banks. (a)
Transfer:
It deals with cheque relating with Allied Bank Limited branch. (b)
Cash:
Cash means cash transaction. 1)
Advances Department:
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Advance department deals with all the advances, which are made to the customer. The basic aim of grant is to utilize money and get better returns i.e., profit. Following types of financing takes place at ABL. i.
Demand Finances:
Demand finances are those finances, which are given on demand. It is a single transaction. It can be long term, medium and short term. Markup is also charged. Amount can be withdrawn once at the time of disbursement. ii.
Running Finance:
It is always short-term loan i.e., one year. It can be withdrawn at any time and deposited at any time. It is basically ba sically for running day to day business. business. iii.
Cash Finance:
Cash finance is for a limited period of time i.e., one year. It is advanced to people to complete the working process. iv.
Fixed Asset Financing:
Fixed Assent Financing are long term finances. These are provided to projects for purchase of machinery and cost of purchase. 2)
Remittance Remittance Department:
The bank transfers a large proportion of money from one place to another or from person to person. The department, which deals with transfer of money, is called Remittance Department. Transfer of money takes place through the following bills of exchange. i.
Mail Transfer:
A mail transfer is an order by a bank to its branch agent or correspondent bank in a foreign center. It is an order to pay a specified sum of money to the person named in the instrument. Surface mail or airmail sends it. There is no risk of falling into the
21
hanks of wrong persons, as the bank sends it directly to its agent in the foreign country. The commission charged by the bank is called MT rate. ii.
Telegraphic Telegraphic Transfer:
The order to pay is dent by cable. The buyer of goods or the debtor makes the payment to his banker in the home currency and purchases the telegraphic transfer. It informs its foreign or local correspondent by wire to make payment in the foreign or local currency to a specified person. The bank generally uses a private and secret code to ensure payment to the right person. T.T rate is always higher than M.T rat e. iii.
Demand Draft:
Money could be remitted from a place to a nother by means of demand drafts. A draft is an order drawn by a bank on its branch in a different place requiring the letter to pay on demand the sum of money specified in the draft. A person, who wants to remit money specified in the draft. A person, who wants to remit money by draft pays the money and the commission to the local banker a nd obtains the draft. This is sent t o the other party by posts that will encash it by presenting it to this bank. 3)
Foreign Exchange Department:
Foreign exchange is concerned with exchanging the currency of one country for that of another country. This exchange of currencies necessitates calculating and expressing the ratio of one currency to the other, in other words, determining a rate of exchange. ABL has four sub-departments in the foreign exchange department. i. ii.
Import and Export Department Remittance Department
iii.
Collection and Exchange Department
iv.
Foreign Currency Account Department
1)
Import and Export Department:
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Import and export department deals with import and export transaction. Here letter of credit is an important means of making payment. The letter of credit is not an instrument that is directly used for effecting payments but it is an arrangement by which facilities are offered for settlement of obligations, whether internal or international. 2)
Remittances Department:
It deals with the transfer of money. There are four types of remittances. a)
Outward Remittances
b)
Inward Remittance
c)
Commercial Remittances
d)
Private Remittances
a)
Outward Remittances:
The term ³outward remittance´ means sale of for eign exchange in any form and includes not only remittances by FITs, FMTs, drafts etc., but also sale of traveler cheques, travelers letters of credit, foreign currency note and coins etc. The three types of application form for outward remittance is: Form 1 for Import Form T-1 for Travel and Form M for all other purpose. b)
Inward Remittance:
The term ³ inward remittance´ means purchase of foreign currencies in whatever form and includes not only remittances by MT, T.T, drafts etc. but also purchase of travelers cheques, draft under traveler, letter of credit, bill of exchange, currency note and coins. c)
Commercial Remittances:
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In the context of exchange control regulations, commercial remittance is outward remittances in foreign exchange from Pakistan arising from business needs and obligations to invisible items and therefore excludes excludes remittance for f or imports. d)
Private Remittance:
Private remittance is outward remittances in foreign exchange arising from the personal needs and obligations of residents. 3)
Collection and Exchange Department:
This department deals with the collection and exchange of all foreign cheques and bill etc. )
Foreign Currency Account Department:
Designated branches of ABL may without prior approval of State Bank of Pakistan, open with them foreign currency account of: Pakistan National residing abroad and Pakistan Nationals having dual nationality. 5)
Bills Department:
Bills department is mainly concerned with collection of bills and lodging of bills. There are two main types of bills. a)
Clean Bill
b)
Documentary Bill
a)
Clean Bill:
When an outstation cheque is deposited with the bank that is known as clean bill. b)
Documentary Documentary Bill:
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`Where the bill is supported by documentary proof i.e., R.R. or truck receipt. 6)
CD Department:
The basic purpose of CD department includes following functions such as maintaining records of saving account holders, current acc ount holder, their signatures, their scrutiny etc.
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CHAPTER-3
HUMAN RESOURCE MANAGEMENT
Management of people at work is very important in every organization, because organizational goals and objectives are a chieved by co-ordination co-ordination of people working i n that organization. Human resources office of ABL is an important office of the entire administrative setup. This office manages whole administrative matters relating to personnel right from recruitment to selection, pay, promotion, etc. to retirement matters. The ABL doesn¶t have its human resources department in every branch, rather all its personnel activities, no matter how trivial they are controlled by human resources department at Head Office, Karachi.
CLASSIFICATION OF ABL:
The categories of services in ABL are classified as under:
Category A
Chief Executive President Executive Vice President (EVP) Senior Vice President (SVP) Vice President (VP) Assistant Vice President (AVP)
Category B
Officer Range 6 Officer Range 5
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Officer Range 4 Officer Range 3 Officer Range 2 Officer Range 1
Category C
Clerical Staff
Category D
Drivers Guards Chowkidars Peons Sweepers RECRUITMENT:
Recruitment is the process searching for pr ospective employees employees and stimulating them to apply for jobs in the t he organization. Human Resource Officer is responsible for the recruitment of personnel for almost all the departments of ABL. When any department require personnel it put, its demand before this office along with the job specification. Human Resource Office first tries to locate the desired person from within the various sections of the bank. If it fails to find a desired person than it hires from outside. Appointment to different grades are prescribed by board of directors from time to time selections are made on the basis of merit and merit is determined on the following basis: i.
Educational qualification
ii.
Professional qualification
iii.
Place of resident location of branch where staff is required.
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iv.
Experience in banking.
v.
Experience in the position and job description in the case of specialized position.
vi.
Past achievement in marketing. marketing.
vii.
Marks obtained in the written test.
viii.
Marks secured in final interview. int erview.
SELECTION AND HIRING PROCESS:
After the applications have been received call letters are issued to the candidates. The various steps involved in the selection process are: 1.
Preliminary interview.
2.
Intelligence test.
3.
Interview.
4.
Investigation of background of the candidates.
5.
Merit list.
6.
Preliminary selection.
7.
Approval by competent authority. a uthority.
8.
Physical examination.
9.
Placement.
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PROBATION AND CONFIRMATION:
An employee selected by the Bank may be placed on probation for a period of six months or it may be extended if it so required usually for the officer¶s probation period is six months and for non-clerical staff it is three months. On the satisfactory period or extended period of probation the employees concerned may be confirmed in any grade.
TRAINING:
After the employee has been recruited, selected and inducted they are trained and developed to better fit the job in the organization. No one is perfect fit at the time of hiring and some training an education must take place. Banking industry is backbone of every economy; therefore the need of trained personnel in this typical service industry is much more important. ABL has one training institute in Lahore, suitable training method increase the quantum of learning within a given period of time. The bank provides on the job training facilities to employees through job rotation to in different department as per requirement training more emphasis is in practical. There is a four months off the fob training at the ABL Training Academy Lahore. Which is followed by four months on the job training.
PROMOTION:
Promotion cannot be claimed as a matter of right as on the basis seniority but on the basis of performance. Main criteria for promotion ar e the performance and skills of the individuals though seniority is also taken into consideration but it is of secondary importance. ABL has defined perfect career paths for its employees and the staff gets promotion accordingly in their grades by way of transferring from one position to the other. Normally employee is promoted to the next grade after 3 years but promotion is totally based on 3 years performance of the employee.
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SALARY ADIMINISTRATION:
One of the most difficult functions of personnel management is that of determining those rates of monetary compensation. Not only is this one of the most complex duties but it is one of the most significant to both the organization and the employee. It is important to the organization because wages and salaries often constitute the greatest single cost of doing business. Salary package offered by ABL is quite attractive in the market. An employee draw the pay of the range to which he is appointed from the date of appointment to such grade.
PERFORMANCE APPRAISAL:
As the name indicates, performance appraisal is evaluating the performance of the employees for given period of time. It is a systematic evaluation of the individual with respect to his performance of employees as ABL is appraised on the basis of Annual Confidential Reports. A Performa made by head office is send to immediate superior for filling. There are three different types of appraisal proformas used for evaluating the performance of an a n employee in ABL: 1.
Executive
2.
Officers
3.
Clerical Staff Increments are decided on the basis of these appraisal reports according to the
performance role in t he development and encouragement of the staff. In ABL the performance of the employees are evaluating on the graphic or linear method.
TRANSFER:
ABL takes a lot of its employees so there are very few inter branch transfer. Further different kinds of problems may crop up in transferring an employee from one
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station to another station. Therefore transfers are rarely made and are only on the managerial levels according to the requirements of position. It may also be possible at the request of the employees.
RETIREMENT:
An employee shall retire from service on attaining the age of sixty years, provided that the board in a special cade may allow a llow extension in its desecration. At the time of retirement the worker are given their compensation on the form of provident fund and gratuities.
RESIGNATION:
An employee other than a probationary officer may resign from the services of the bank after providing prior notice in writing or in lieu of notice pay to the bank an amount equivalent to his substantive pay for the period of notice.
TERMINATION OF SERVICES:
The bank may terminate the service of any employee or call upon him to resign from the service of the bank. In either case he will be entitled no notice in writing. Salary in lieu is given for the period as under: 90 days notice Category A t o Category D for confirmed employees. 30 days notice Employees on Probation.
DISCHARGE :
When an employee in the opinion of the management is incapable or has ceased to be capable by reasons of infirmity of mind or body. The competent authority may discharge him on medical ground and pay him such compensation as may be decided by the board.
DISCIPLINARY RULES:
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It is a force that prompts individuals or group to observe rules regulation and procedure, which are deemed to be necessary for the effective function of the organization. Discipline; in ordinary conduct of affairs by the members maintain harmony and peace in organization willingly. 1.
Observance of rules.
2.
Maintenance of secrecy.
3.
Absence from duty.
4.
Misconduct
5.
Direct representation to director
6.
Disobedience with any lawful and reasonable order of the supervisor i.e. transfers.
7.
Fraud and forgeries.
8.
Damage or loss (bank property). pr operty).
9.
Sleeping while on duty.
10.
Collection of money with in the office premises for any purpose not approved by bank.
11.
Striking.
12.
Unauthorized use of bank property. Any violation in these disciplinary rules result in different types of penalties
given below.
PENALTIES:
An employee found guilty under any rule or any offense of misconduct is liable to one or more of the following penalties. 1.
Reprimand.
2.
With holding for a specified period confirmation on promotion or increment.
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3.
Recovery form salary of the whole or part of any particular loss caused to the bank by the employee.
4.
Demotion to any lower grade.
5.
Removal from services.
6.
Termination by way of punishment.
7.
Dismissal from services
8.
Compulsory Compulsory retirement from fr om the service with or without retirement benefits.
APPEAL
An employee who has been awarded penalty shall have right to appeal before the competent authority.
LEAVE
At ABL., following types of leave are granted to employee. j
SICK LEAVE
The annual entitlement is 30-calendar day¶s sick leave. In the event of prolonged illness the competent authority may sanction further sick leave up to a period, not one ending the period of leave that has been lapsed. j
EARNED LEAVE
This leave is over 45 days in a calendar year. Maximum period of ear ned leave, which can be taken at one time by an employee, is 60 days. Under special circumstances at the discretion of chief executive. j
EXTRA ORDINARY LEAVE
Extra ordinary leave can only be granted to an employee when no other leave is available to him. An unauthorized leave at the discretion of the competent authority is
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treated as extra ordinary leave. No pay allowance or any other benefits or increments are given. j
MATERNITY LEAVE
Female staff is entitled to maternity leave for period not exceeding six weeks. Time interval between first leave and last leave should not be less than two months.
ALLOWANCES.
The Grant of special pay or allowance to the holder of any post or to any other employee shall require the sanction to the competent authority kinds of allowances for employees at ABL are: House rent allowance Technical allowance Utility allowance Washing allowing (non-clerical staff)
FRINGE BENEFITS
Medical facility Facilities at residence Leaves fare assistance Grants of incentives for improving qualification every year Increment (annual increase in the basic pay) Cash prizes
COMPENSATION
Allied Bank Limited offers three t hree types of compensation to it¶s workers.
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j
Provident Funds
j
Employees Employees Insurance Insura nce Scheme
j
Gratuity
j
PROVIDENT FUNDS
1
Provident fund scheme is funded by equal contribution from both employer and employee at the rate of 8.50% of basic salary is deducted every month from the salary of employee and is doubled by Bank. It is payable after retirement of the employee. j
EMPLOYEE INSURANCE SCHEME
After confirmation ABL is given life insurance. The amount of insurance is equivalent to 48 basic salaries of the employee. In this way, the worker feels more secure and satisfied while working as ABL employee. j
GRATUITY
Employees who have completed 5 years of service are entitled to Gratuity after retirement. Bank compensates the employees on the basis of one basic salary for every completed year 10.
SAVER¶S SCHEMES
Allied Bank has offered many saving schemes for savers there curative saving schemes are: Young Saver Certificates Overseas Savers Account Allied Mahana Acadani Scheme Super Premium Term Certificates Premium plus Account High Premium Account
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j
ALLIED YOUNG SAVERS CERTIFICATES
The habit of saving has always paid dividends to make savings grow at a faster rate to meet customers future needs. Allied Bank introduces a highly curative scheme Allied Young Savers Certificate. y
Salient features.
Children and individuals of all age groups are the investors of the scheme. There is no age limit. The
children
will
open
and
operate
their
account.
Through
their
parents/guardians, the investors will be provided certificates against t heir investments. investments. The certificates shall be of the following denominations: RS. 1000/-
RS. 10,000/-
RS. 3000/-
RS. 50,000/-
RS. 5000/-
RS. 100,000/100,000/-
2
Maturity period of the certificate will be 10 years. The average expected rate of profit for 10 years would be 15%. j
ALLIED OVERSEAS SAVERS ACCOUNT:
Overseas Pakistani is playing an important role in the economic development of the country. Allied bank is always greatly concerned about the due recognition of these stalwarts for making a singular contribution to the progress and prosperity of the nation. We are always in the lead to offer greater banking facilities to Pakistani working overseas. Most of saving¶s schemes pay special attention to the fact that overseas Pakistani is working there heats out, should get all the facilities possible for not only remitting their earnings home buy also getting better value of this savings.
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The beneficiaries receiving the remittances through Allied bank and investing it through Allied overseas savers Account will not only be able to earn a higher rate for profit buy the remitters will also feel that the money being sent to their kith and kin will remain safe, secure and growing. y
Salient features.
This is the easiest, fastest and safest way of sending remittances home, the amount I saver¶s account will get 3% extra profit in the first ear. Account holder¶s get the entire professional services and facilities offered by ABL. Many saved from domestic expenses not only remains safe but also earns profit continuously. Unlike other saving accounts saver¶s can withdraw as much money a they want from ABL overseas savers account without ginning any advances notice. j
ALLIED MAHANNA AMADANI SCHEME:
y
Salient Features
Minimum investment Rs. 25,000/Maximum investment Rs. 100,000/The maturity period for Mahanna Amadani certificates is 5/10 years. Investment can be done by: Individuals singly of jointly Proprietary/Partnership concerned companies in t heir names. It carries special attraction for Retired civil and armed forces employees Widows and children being brought up by guardians Expatriates looking for permanent monthly inc ome j
ALLIED SUPER PREMIUM TERM CERTIFICATES
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Allied bank has launched yet another saving scheme containing very attractive rates of profit rates of profit the scheme has been names ³ Allied Super Premium Term Certificates ´. y
Salient Features
Allied super premium term certificates are of the following denominations: denominations: Rs. 10,000/10,000/-
100,000/100,000/-
Rs. 500,000/500,000/- 1,000,000/1,000,000/Super premium term certificates have been categorized as A, B and C referring to quarterly, half yearly and yearly profit payment respectively. Super premium term certificate, which bear the names of respective account holders. The maturity period of these certificates in 3 years. y
MODE OF PROFIT PAYMENT.
The valued customers will enjoy the facility to receiving their profit through cash postal money order/Demand Draft/Pay order or by transferring it to their usual current/saving bank Account as per their written instructions and addresses provided by them. j
ALLIED PREMIUM PLUS ACCOUNT
Allied bank keeping up its tradition of introducing innovative banking schemes and pans for the services and benefit of valued clients has developed a new product titled premium plus account (PPA). This scheme with higher rates of profit has been introduced exclusively for the benefit of: 1.
Large corporate Groups
2.
Govt. and semi ± govt. concerns
3.
Multi-National companies
4.
Big companies
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5.
Individuals
y
Salient Features
Investment can be made with a minimum deposit of Rs.10.00 million under two types of accounts. 1.
Premium Plus operational account
2.
Premium Plus term deposit account Following are the estimated rates of profit: ON operational account
10 per annum
ON term Deposit Account
12% per annum
30 days
14% per annum
6 months
14 1/2% per annum
One year
14% per annum
Rates of profit shall be subject to revision/adjustment on half yearly basis. Operational account shall be opened in the style of current account. The minimum balance shall s hall have to be maintained at Rs. 10.00 million. In case the balance droops below Rs. 10.00 million on a day in a month, the account holder will not be entitled for the t he profit of that particular month. Profit shall be paid on half yearly basis t here is no upper limit of investment for maintaining the account. j
Premature Encasement
In case of premature encasement of certificate profit will be paid as per scheme schedule of rates. However, no profit will be paid for broken period e.g. If the customer with draws from. The scheme during the 7 th year, before its completion, he/she will be paid profit with compound effect for six years only. j
ALLIED MAHANNA AMADANI SCHEME
39
y
Rates of Return
The estimated minimum rate of profit will be 1.166-% month. The monthly return on various amounts would be as follows: Rs. 1,00,000/1,00,000/-
Rs. 11,666/11,666/-
Rs. 5,00,000/5,00,000/-
Rs. 5,830/-
Rs. 100,000/100,000/-
Rs. 1,166/-
Rs. 50,000/50,000/-
Rs. 583/-
Rs. 25,000/25,000/-
Rs. 291/-
If the profit declared by the bank is higher additional profit shall be paid to the depositors. y
Mode of Payment
You will enjoy the facility of receiving the profit through payment order/demand draft postal money order every month at your doorsteps. At your discretion you or your authorized representative can also receive the profit through cash/pay order/demand draft. draft. Since the profit shall be payable by the branch where you will open your account under the ³ Allied Gahanna Amadani Scheme´ your profit can also be credited 13
to customers account every month. y
PREMATURE ENCASEMENT
Following rates of profit are to be applied in case of premature encasement. If the certificate is held for less than 90 days no profit. If the certificate is held for 3 Preceding PLS Saving Rates months but less than 3 months but less than 6 months
40
If the certificate is held for 6 PLS IDR Profit Rates Declared for months but less than 1 year the particular period, would be paid If the certificate is held for 1 year but less than 2 year If the certificate is held for 2 year but less than 3 year If the certificate is held for 3 year but less than 4 year If the certificate is held for 4 year but less than 5 year
j
ALLIED SUPER PREMIUM
y
Rates of Profit
Allied super premium term certificates carry the profit at the estimated rate of 151/2 per annum on quarterly payment 16% per annum on half yearly payment 16 ½% per annum on half yearly payment Net payment on an investment of Rs. 100,000/- is being illustrated here under similar pattern will be followed in case of other sums of investments. Principal amount Rs. 100,000/ -
Estimated Profit
Quarterly payment @15 ½% PA
3,875/-
Half yearly payment @16% PA
8,000/-
Yearly payment @16 ½ PA
16,500/16,500/-
j
ALLIED HIGH PREMIUM ACCOUNTS
41
In order to serve the customers with higher returns on their investments as well as to encourage the savings on national level. Allied bank has brought forth a special scheme named Allied High Premium Account. y
Salient Feature
It is PLS saving account It can be opened and operated by anyone with a minimum deposit of Rs. 0.250 million (average monthly balance). There is no upper limit of investment and investors can invest as much as they like. There is no limit on numbers and amount of withdrawals.
ESTIMATED RATE OF PROFIT
Current P/s savings rate provided the required average monthly balance does not fall below the minimum deposit level i.e. Rs. 0.250 million for the particular month. j
Mode of Payment
Profit will be paid Half yearly. All the saving and profit based scheme are liable to Zakat and with holding tax as per rules. However, exemptions on Zakat are available in accordance with the law. Profit payment schedule of Allied Young Saver Certificates On completion of Expected maturity value (In case of Rs. 100/denominations).
01 Years
Rs. 1103.20
02 Years
Rs. 1226.76
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03 Years
Rs. 1375.76
04 Years
Rs. 1555.35
05 Years
Rs. 1773.10
06 Years
Rs. 2039.10
07 Years
Rs. 2371.47
08 Years
Rs. 2786.48
09 Years
Rs. 3315.91
10 Years
Rs. 4028.20
Note: The above pattern of profit calculation will be applicable in case of certificate of
higher denominations.
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GENERAL UTILITY SERVICIES
ABL also performs a number of other general utility services to his client, which are as follows:
Foreign Exchange Business
ABL transacts foreign exchange business by discounting foreign bills of exchange and thus provides facilities fa cilities for financing the foreign trade.
Acts as a referee
ABL provides a useful service to his customer by acting as a referee for his credit worthiness. The information is supplied in almost secrecy and is based impartially on the respectability and financial standing sta nding of the client.
Accepting of bills of exchange
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ABL also undertakes acceptance business in connection with bills of exchange and thus enables its c ustomers to obtain the desired credit.
Issue of Travelers cheque
ABL also issues travelers cheque for the convenience of the travelers and charges 1% of the amount of traveler¶s cheque sold.
Locker
ABL also provides locker facility to its clients where valuable of people can be kept following are the charges of bank:
Small
Rs. 300/- per annum
Medium
Rs. 500/- per annum
Large
Rs. 800/- per annum
Extra Large
Rs. 1500/1500/- per annum
Collection of utility bills
Electricity telephone and other such bills can also be deposited.
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CHAPTER 4
CRITICAL ANALYSIS
In the present era of competition, it is not so simple to attain the reputation of a very good bank even more harder is to maintain and improve the position attain in the competitive world of banking today. In my story stay at ABL, Defense colony branch, I spent almost one week in each department and this short span is not sufficient for having all the information about the organization. Therefore, I have pointed out some of the drawbacks in this organization. j
Recruitment
In ABL, defense colony branch, recruitment is not on the basis of merit but on recommendation. There is an element of favoritism in recruitment. j
Selection
Unsuitable candidates are selected who prove to be a great source of problem for ABL in the future. It cost negative effect on the goodwill of ABL. j
Transfer
Some employees are not transferred and they are continually serving at the same post. They are simply rotated at the same branch. Some of the favorites remain in the same seat. j
Job
Analysis and Wages
As we have learned from out personnel administrator course, that job analysis is very important for any organization. In job analysis we describe the job and specify the person for equitable wage system.
45
In ABL Peshawar, there is no concept of job analysis that is why wages are not according acc ording to the work performed perfor med by the workers e.g. e. g. two workers of the same cadre cadr e and with the same salary are performing different kind of jobs, one with less responsibility and the other performing a complex one. This creates dissatisfaction among the workers. j
Promotion is not done according to rules.
As promotion is concerned it is not according to the rules and regulations. j
Transfer
Transfer means when a person is shifted from one place to another it of the favorite remains in the same seat. j
Lack of Special Training
ABL does not provide the facility of specialized training to its staff. Training is provided on the basis of centralization. j
Undue Promotions
As far as promotion is concerned it is not done according to the rules and regulations. Employee having good term and conditions are more likely to be promoted than the rest. Many of the employees do not get timely promotions. As a result the employees have disliking for some of their senior. j
Retirement
Fixed retirement policy is not adequate. This policy reduces the morale of employee and their interest in work. Fixed retirement age kills the spirit of work in employees. j
Centralized Decision Making
46
In ABL we find centralized decision making process. The president takes all the decision and senior executive committee lower level staffs can not participant in decision making process. j
Decisions are not properly supported
The decision of a manager are not properly supported and backed by the higher level management. j
Change in country
Fiscal and economic changes, which take place in a country also, effect the recovery of loan. j
Political Pressure
The important thing is political pressure on bank. Who ever come in power tried to pressurize bank they try to write off their loans. j
Recovery of loans
One of the problems faced by ABL in the recovery of loan, because sponsors do not show their actual papers which is the r equirement of the bank. j
Sponsors do not show actual cost
At the same time sponsors do not show the actual cost of machinery so then they show them selves bankrupt. j
Written policies are not properly followed
All written policies and procedures for appointing employees are not properly followed. j
Expenses
47
ABL has too much administrative expenses employs a higher level have much more facilities than lower level. j
Improper Appointment
Although we find written policies and procedures for appointing employees to the bank but these policies are not properly followed at ABL. The upper management sometimes recruit and appoint people purely on recommendation not on merit when proper appointments are not made people are discourage and it adds to many social and economic problems. j
Promotion is not done according to rules
As promotion is concerned it is not done according to the rules and a nd regulations. Transfer means when a person is shifted from one place to another it of the favorites remains in the same seat. j
Performance Appraisal
The system of performance appraisal as we learn in our course is some how different because ABL workers are appraised by the management and not by the immediate supervisor. The element of subjectivity is very high as further promotion is very much dependent on this appraisal report, so a manager can run or build the career of any worker by giving his/her own subjectivity judgement. j
Insufficient Staff
There is lack of staff in the branches as a result of which one person has to conduct working in different seats. Heavy work and shortage of staff are two main elements, which do not allow staff to their time. j
Disciplinary Action
Allied Bank Limited has its own disciplinary actions. It is clearly written off and understood but that are not followed strictly by bank staff.
48
j
Lack of proper information
For public dealing, clients come to get some information but they refer them to zonal office. This creates a lot of tension and dissatisfaction in t he mind customer. j
Excessive paper work
There is excessive paper work in the bank because of unavailability of computer.
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CHAPTER 5
RECOMMENDATIONS
It is human nature that one tried to find out the loopholes and drawback is the existing structure and to criticize as well. It is quite easy to recommend solutions along with criticism. Here the rec ommendations ommendations are as follows f ollows.. j
Recruitment Policy on Merit
Recruitment should be strictly based on merit. Favoritism and nepotism should be strictly controlled. Transparent recruitment procedure should be adopted. Employment Employment should be strictly based on merit instead of r eserved quota system. j
Transfer
Transfer policy should be implemented well because in transfer many favorite people are not transferred, they are working one seat for several years and they are not transferred. Transfer is not properly made. j
WAGE STRUCTURE
Wage policy should be implemented well. Dissatisfaction among the workers can be removed by implementation of fair and equitable wage policy. j
Specialized Training
As the worker finishes his/her training, he/she is introduced in a specific field. Since he/she does to have knowledge about the specific job assigned to him, thus he/she faces difficulties in performing the job. It is recommended that both generalized and specialized training should be provided to fresh as well as old workers to maintain the high standard of service. j
Promotion Policy
50
The bank promotion policy should be based on experiences hard work ability of workers. j
Retirement
A flexible retirement policy should be introduced. So that experienced employee who is capable and is wishing to continue service is allowed to continue the service that enhances the moral of employee and bank will get high benefits from these experienced employees. employees. j
Motivation
Such motivation techniques should be adopted which fulfill the belongings, love and self-esteem needs of the employees. Only cash awards do not fulfill the motivation requirement. Giving employees different assignment should create environment of competition. This can be proved to be a great source of motivation. j
Discipline Policy
The Branch manager should be delegated more power to tackle with the problem of discipline in bank. She should be empowered to take immediate and effective action in case of administrative problem without without any fear and favor. j
Management by Objectives (MBO)
MBO or management by objectives needs to be introduced in the bank immediately. It will help to improve the functioning of the bank and will lead to greater participation. Management by objective is in fact program of basing much of managerial planning operation and appraisal of having each manager set objectives in verifiable terms I will the superiors approval and assessing his or her performance against the achievement of these t hese objectives MBO will also also lead to great participation at all levels. j
Decentralization
51
It is one of the problems in Allied Bank limited most of the function is centralized which is adversely effecting the performance of the bank. There is a need of decentralizing some of the functions, and decision making which can improve and unnecessary delay can easily be avoided. j
Flexibility Principle
The authority of ABL should introduce flexibility principle in the bank in smooth functioning of the bank. bank. Here the flexibility principle implies that t he more that flexibility the ability to change direction without under cost embarrassment or friction can be built into plans, the less the danger of losses incurred by unexpected events. j
Forecasting
Forecasting needs to be introduced at Allied Bank Limited before making any decision in planning its activities, its should properly forecast to see that the decision which they are likely to take has any good or bad implications for the bank and for the economy as a whole. It will help in better planning. j
Avoiding Mistakes by Planning
As with the other functions of management establishment of objectives and orderly planning are necessary of good organization. Planning helps determine future personnel needs and attending attendant training programs without knowing what managerial personnel will be needed and what experience to demand an enterprise can not intelligently recruit people and train then. Further more organization planning can disclose weaknesses in the organization and other aspects keeping in view. The importance of planning, it can not be ignored. j
Availability of Information
To avoid the problem of inviolability of information, bank should provide brochures etc and there should be a specific person who should available to clients to provide information to them.
52
j
Required Staff.
Required staff should be provided to branch in order to i mprove the functioning of the branch. Especially a telephone operator and a customers services officer should be immediately appointed. j
Stable Fiscal and Economic Policies
There are changes in the fiscal and economics policies with the change in government government needs to eliminate fiscal and ec onomic onomic policies should be stable and not t o be changed frequently. Such laws should be made that even if there are changes in the government from time to time, there should be no changes in the prevailing fiscal economic and monetary policies. j
Administrative Expenses needs to be reduced
At ABL, there are too many expenses incurred on administration and other things. Their unnecessary expenses need to be reduced to have more funds for other things. j
Computerized Network
There is excessive paper work in the branch. But if computerized network is introduced in the bank, it will reduce the excessive paper work, which in turn will reduce their burden.
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