products and services of commercial banks

AYESHA SEHAR

MB-10-55

Products and Services by Commercial Banks

Presenters

BANKING SECTOR TODAYThe banking business as we know it today is composed of three separate and distinctive principal functions these are:

The acquiring of funds to invest and advancesThe investing of such funds and advances (loans) in bonds The servicing of such funds, such as providing of

checking, saving facilities and the collection of draft, notes and cheques

These functions while deferring in detail of operations follow the same principles established hundreds of year ago by money lenders and exchangers.

Small and Medium Enterprise (SME) means an entity, ideally not a public limited company, which does not employ more than 250 persons (if it is manufacturing / service concern) and 50 persons (if it is trading concern)

(a)A trading / service concern with total assets at cost excluding land and building up to Rs 50 million.

(b) A manufacturing concern with total assets at cost excluding land and building up to Rs 100 million.

(c) Any concern (trading, service or manufacturing) with net sales not exceeding Rs 300 million as per latest financial statements.

Corporation

An incorporated entity is a separate legal entity that has been incorporated through a legislative or registration process established through legislation. Incorporated entities have legal rights and liabilities that are distinct from its shareholders, and may conduct business for either profit-seeking business or not for profit purposes.

Brief History and Background of HBL

• HBL was the first commercial bank to be established in Pakistan in 1947

• 1,425 branches in Pakistan and 55 braches across the country

• The Government of Pakistan privatized HBL in 2004• HBL is majority owned (51%) by the Aga Khan Fund for

Economic Development, 42.5% of the shareholding is retained by the Government of Pakistan (GOP), whilst 7.5% is owned by the general public

• HBL offer products and services to Retail and Consumer Banking.

• HBL has the largest Corporate Banking portfolio in the country with an active Investment Banking arm. SME and Agriculture lending programs and banking services are offered in urban and rural centers

BRIEF HISTORY AND BACKGROUND OF BANK ALFALAH

• Incorporated on June 21st, 1997 as a public limited company under the Companies Ordinance 1984

• Its banking operations commenced from November 1997

• Belongs to Abu Dhabi Group• One of the Leading Banks in Pakistan

BRIEF HISTORY AND BACKGROUND OF MEEZAN BANK

• Meezan Bank Limited, a publicly listed company, was incorporated on January 27, 1997.

• Meezan Bank has clearly established itself as the largest Islamic Bank in Pakistan with the largest Islamic Banking branch network in the country.

• Meezan Bank was granted the nation’s first full-fledged commercial banking license as a dedicated Islamic Bank, by the State Bank of Pakistan.

MEHMOOD KHAN

Individual CustomersProducts and Services:1. HBL Car Loan2. HBL Credit Card3. HBL Debit Card4. HBL Home Loan5. HBL Personal Loan6. HBL Deposit Accounts7. HBL ATM8. HBL Phone Banking9. HBL Internet Banking10. HBL Mobile Banking11. HBL Bancassurance Products12. Safety Deposit Lockers

Business Customers

1. Corporate BankingHBL provides the following services to meet their requirements:• Working Capital Finance• Export Financing• Import Financing • Receivable Discounting • Islamic Banking facilities• Trade Services including Letter of Credit, Letter of

Guarantee, etc.

Business Customers (Contd.)

2. Commercial BankingHBL offers financing for the following:• Working Capital • Procurement of Inventory • Receivables • Procurement of Machinery • Expansion of production facilities • Import of raw materials • Exports • Guarantees

Business Customers (Contd.)

3. SME Banking• HBL Freedom Account• HBL Easy Loan• HBL Small Business Finance• HBL Trade Power• Value Added Services

Business Customers (Contd.)

4. HBL Zarai Banking

• Crop Inputs• Farm Implements & machinery• Tractors/Agricultural Vehicles • Livestock• Poultry• Fish Farming• Joint finance facility for a group of farmers

HBL Islamic Banking

1. Deposit Accounts• HBL Basic Banking Account (BBA)• HBL Current Account• HBL PLS Account• HBL Al-Samarat Account• HBL Al-Mukhtar Account• HBL Al-Irtafa Account

HBL Islamic Banking (contd.)

2. Financing Products• HBL Murabaha• HBL Ijarah• HBL Diminishing Musharaka

HBL Islamic Banking ( contd.)

3. Trade Services• Letter of Credit Facility• Collection of Foreign Bills• Collection of Local Bills• Letter of Guarantees4. Value Added Services• ATM/Debit Card Facility• Foreign Remittances• Utility Bills Collection• HBL Internet Banking• HBL Phone Banking

FARHAT SULTANA

MB-10-32

Product & Services

• Checking acconts Basic Banking account Account can be open by Rs 5000/- and

customer does recieve an ATM card. This account is targeted is towards the salaried individuals , students or any other individual that may want to open an account with a small amount of money.

Cont,….• Current account This account does not provide any profit on it and

neither zakat is deducted. The major segments of this account are sole proprietors, partnerships, companies (both private& public) and any other individuals.

• PLS account In this account interest is paid annually and zakat

is also deducted from it .The main segment of this account are people who want to save money include household etc.

Cont,……• Kamyab karobar account It is a loan account and suitable for small business

owners.• Royal profit Account It is a saving account and required minimum

balance of Rs 5oooo/. Profit is provide quaterly and zakat is also deducted

• Fix account It is a term account and profit is paid annually.

Lockers Bank Alfalah provides safe deposit locker

facility to its customers for safe keeping of their valuables like documents, securities and jewellery etc. Various sizes to choose from small, medium & large.

Car financingCar Financing is one of the major renowned product of Bank Al-Falah and can be utilized in terms of Financing of Used Vehicles, Loan against Car and it is has lowest mark up,lower Insurance,quick processing and lower down Payment

Rupee travelers cheques Rupee Travelers Cheques are as good as cash and

are accepted at the major shops, travel agents, hotels business establishments and all over the country and abroad.

Online banking It provide fully automated on-line telephone

banking facilities to its customers enabling them to carry out banking transactions

Credit card Bank Al-Falah Visa Card is everywhere

and globally accepted and welcomed at locations displaying the VISA logo. There are 3 major types of Al-Falah credit cards.

Al falah platinum Titanium card Gold & silver card Debit card Bank Al Falah Limited presents Al Falah

Hilal Card

Funded & Unfunded Loans• Funded capitals are mainly short term; it can be a

long term facility too. It is also categorized in to running finance and term finance.

• Unfunded capital facility comes in the form of either Letter of Credit (LC), a facility that is used for import and export facility and Letter of Guarantee (LG), a facility used in tenders filled for a specific job.

Automated teller machine(ATM) The bank offers 24 hours self service banking

facilities to it customers on country wide basis through deployment of Automated Teller Machine.

Home financing It has been bifurcated in terms of “Home Buyer,

Home Construct, Home Improver, Home Balance Transfer Facility”.

Financing Limit : uptoRs. 10,000,000/- Tenure : upto 20YearsEquity Participation : 30% Borrower /

70% Bank

A separate division is a recently initiated, which

operates as separate branch. Islamic Banking has launched following products.

• Al-Falah Masharaka Homes• Murabaha Finance• Aflalah Car Ijarah

Islamic

Banking

Iqra SamadMB-10-

60

Meezan Bank

• Meezan bank is an Islamic bank licensed by state bank of Pakistan.

• Meezan Bank Ltd. is a publicly listed company with a paid-up capital of Rs. 9 billion.

• The JCR-VIS Credit rating company has short term rating at A-1+ and long term rating at AA-

• Meezan bank has 280 branches in 88 cities.

PRODUCTS AND SERVICES OF MEEZAN BANK

• Meezan Bank Personal Banking.• Non Residential Pakistani Banking.• Corporate & Commercial Banking.• Investment Banking.• Asset Management.

• Islamic Financial Advisory Services.

Meezan Bank Personal Banking

Current And Saving Account Rupee current account(riba free) Rupee saving account(monthly profit payment) Dollar saving account(foreign currency based

investment opportunity) Meezan bachat bank(high expected rate of return) Karobari munafa account (For large Corporate

Entities) Labbaik saving aasaan Meezan business plus

Term Certificate Certificate of Islamic investment. Meezan aamdan certificate. Meezan providence certificate. Monthly mudarbah certificate. Dollar mudarbah certificate.

• Consumer Finance• Car Ijarah (Auto Financing)• Easy home (housing finance)• 24/7 Banking• Visa Debit Card• 24/7 Debit Card (No Longer Issued)• Internet Banking• ATM Network• SMS Alert• 24/7 Call Center

Special Banking 8 to 8 Banking (8 am - 8 pm banking) Ladies Banking

Non Residential Pakistani Banking

Meezan Home Remittance

Corporate & Commercial Banking

Corporate Banking Commercial Banking SME Banking

Investment Banking

Syndications & Structured Finance Project Financing Financial Advisory Services

Asset Management Al Meezan Mutual Fund Limited (AMMF) Meezan Islamic Fund (MIF) Meezan Balanced Fund (MBF) Meezan Islamic Income Fund (MIIF) Meezan Tahaffuz Pension Fund (MTPF)

Meezan Capital Protected Fund-I (MCPF-I) Meezan Mahana Kharch Account (MMKA) Meezan Cash Fund (MCF) Meezan Sovereign Fund (MSF)

Islamic Financial Advisory Services Product Development and Product Refinement Islamic Capital Market Advisory Services Establishing and Managing Islamic Market Indices Advisory Services to Start-up Firms Shariah-Compliant Corporate Restructuring Internal and External Training Sessions Shariah Audit, Compliance & Strengthening Internal Controls

Moshin Aslam

Qureshi

MB-10-17

SWOT ANALYSIS

STRENGTHS

COMPASSIONATE CUSTOMER SERVICE GOODWILL & TRUST LOCATION WIDE BRANCH NETWORK THE COMPUTERIZED SYSTEM

Perfection is only the claim of Allah Almighty. No other being living or dead can say this for itself. Similarly, Bank Al-Falah also has some shortcomings that need to be mentioned:

ADVERTISEMENT PROBLEMS OF EMPLOYEES

Bank Al-Falah has grown up its business with a very high pace and it has got tremendous popularity, even with in a very short span of time. There are many opportunities for the bank and by availing that it can stand amongst the top foreign banks.

INFORMATION TECHNOLOGY EXTENSION OF BRANCH NETWORK GROWTH IN DEPOSITS

ECONOMIC CONDITIONS COMPETITORS

The SWOT analysis of the bank signifies that its strengths overcome its weaknesses and its opportunities are more than its threats. This is a positive sign for any organization.

HBL enjoys the following strengths:• HABIB BANK is a well established bank enjoying

long history of over 65 years of experience and profitable operation.

• People trust ratio is very high.• It has the largest branch network among private

banks of Pakistan.

Weaknesses

HBL has the following weaknesses :

• Lack of communication.

• Lack of managerial training.

• Assets less than NBP.

Opportunities

• E-Banking• Low mark up rates• ONLINE BANKING• AUTOMATIC TELLER MACHINE (ATM)• Rate of Return

In the context of HBL’s external environment, the following potential threats exist:

• Other private commercial bank with sound profitability is also a threat to HBL e.g. UBL, Alfalah, MCB etc

• The Rupee Travelers Cheque (RTC) sales volumes may be affected on account of regulatory restriction imposed by SBP on issuance of large value denominations.

• Pioneer in Islamic Banking

• The largest Islamic Bank in Pakistan with a network of over 201 branches in 54 cities.

• The members of the Shariah Supervisory Board.

• Lack of Training Programe

• The decision-making is carried out the upper management level and the subordinates are not included in this process.

• House financing sector can be targeted to maximize the profit.

• Growing demand of Islamic financial product and services.

• Venturing into Islamic groups out side the countries as opportunity to expand business in UAE and Golf states. I-e financial institutions.

• Competitors

• Economic conditions

Hafiz Muzamil Hussain

MB-10-41

Conclusion

During the last few years the banking sector has witnessed phenomenal growth propelled primarily by a multi pronged process , deregulation and privatization.

New managers have been responsible for its lethargy to one which is highly competitive and agile.

Cont’d…

The sector has achieved unprecedented profitability coupled with large untapped market, is seen as an attractive investment option by both local and overseas investor.

Increased competitiveness has resulted in aggressive marketing of new and innovative consumer centric products which has created a buyer's market.

Cont’d…. Lack of consumer education and inadequate knowledge has been cause of subsequent distress for consumers

SBP has regularly issued guidelines to educate the market to raise consumer awareness.

Banks are now seen to be taking steps to explain product intricacies to customers.

Cont’d….

An issue has been faced by the borrowers is rising rate environment.

Rates have almost been doubled in the last couple of years.

Different loans have different rates and are thus subject to frequent rate revision.

Compelling case for banks is to design fixed rate consumer products so that consumer may plan accordingly.

Cont’d… The govt should establish a long term debt market

aimed at deepening the financial market capacity so that fixed rate medium to long tenure assets can be introduced in the market.

The model that should be applied is the Malaysian cagamas model.

Malaysian cagmas model primarily created to make mortgages more accessible and affordable, since it has added bank credit liabilities to product suite.