Internship report on First Women Bank Ltd.

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Uploaded By Maria Riaz

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Internship Report On First Woman Bank Ltd.

Aziz Shaheed Road, Sialkot Branch

An Internship report submitted in partial satisfaction of the requirement for the degreee of

Master Of Commerce ( Finance )

By

Maria Riaz

University Of Sargodha

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Preface

Prerequisite of M.com study is to undergo internship. I got the opportunity to join the First

Woman Bank Ltd. Aziz Shaheed Road Sialkot for the said purpose for a period of 6 weeks.

Practical involvement was a great experience as interactions both with the experienced

executives and clients cemented the base of knowledge I have been acquiring in the

classroom. This internship report includes the material about FWBL and different

departments along with their working procedure.

For the completion of this project I met the various persons of these organizations. As far as

my knowledge and hard work is concerned this report will provide a good in sight of FWBL.I

have special thanks for following persons who have encouraged & guide me lot. I learned

very much under their guidance.

Ms. Rizwana Branch Manager.

Ms. Nasreen Operation Manager

Ms. Sehrish Cash Officer

Ms. Kiran Credit Officer

Ms. Snober Cashier

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Dedicated To My

Loving Parents and Respected Teachers

Whose love, affection and Prayers have been a source of inspiration and encouragement for me

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Table of Contents

Chapter No: Chapter Name Page No.Executive SummaryInternship Letter

1 Introduction to the Banking in PakistanHistory Of Banking In PakistanYears of Establishment of main banks in PakistanThe role of banking in Economic development of Pakistan

2 The First Woman Bank LimitedHistoryUnique CharacterCredit PolicyVision & MissionBoard of DirectorsAwards & AchievementsFuture Plans

3 Services & Products of the First Woman Bank LimitedServicesLiability ProductsAssets Products

4 The First Woman Bank Limited, Sialkot BranchBasic InformationHierarchyIntroduction of the BranchFinancial Highlights- FWBL Sialkot BranchRange of Financial Products & ServicesWork performed at FWBL Sialkot Branch

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Financial Statement AnalysisSWOT AnalysisConclusionRecommendationsAppendix

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Executive Summary

By the grace of almighty ALLAH. I have successfully completed my 6 weeks internship as per

requirement of M.Com study. I feel myself lucky to have worked with such a cooperative,

dedicated, result oriented team. They all helped me in every possible way they can. I was

happened to work with all three departments i.e. Computer Department Cash Department, &

Accounts Department, Credit Department, Foreign Exchange Department

In Computer Department I worked with the Computer operator. I was assigned to the

issuance of token and entering the token number and cheque number of customers on the

registers and was also happened to watch and operate the computer software LINUX that

how they debit and credit the amount of account holders; there I was happened to meet with

the people of different business areas. In Cash Department I was happened to work with

cashier, who was basically responsible for the withdrawal and deposit of cash from the

customers and also entering the amount deposited or withdrawn from the bank in the Bank’s

transfer sheets. I also learned from the cashier how to check the fake currency notes and that

was an interesting work. In the Accounts department I worked with the accountant for the

preparation of DD, TT, Issuance of Rupee Travelers Cheques, Preparation of Debit and

Credit vouchers, Demand Drafts of Different companies Like Shell and PSO,Pehchan Mall

etc. I was also introduced with the preparation of transfer sheets and utility bills scroll sheets.

In the Credit Department I learned how they issue credit, how they pass the credit entries and

on which conditions the bank issues the credit. In foreign Exchange Department I learned

how to exchange for different currencies in PAK rupee.

At the end I would conclude that the internship had helped me a lot in different areas of

banking and other concern areas of my study. I also learned how to work in tough situations

which would help me in a long way. And it wouldn’t be possible without the assistance of the

team with whom I had spent 6 weeks.

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Chapter 1

INTRODUCTION TO THE BANKIG IN PAKISTAN

At the end I would conclude that the internship had helped me a lot in different areas of

banking and other concern areas of my study. I also learned how to work in tough situations

which would help me in a long way. And it wouldn’t be possible without the assistance of the

team with whom I had spent 6 weeks.

Banking In fact is primitive as human society, for ever since man came to realize the

importance of money as a medium of exchange the necessity of controlling or regulating

agency or institution was naturally felt. Perhaps that was the Babylonians who develop

banking system as 2000 BC. It is evident that the temples of Babylon were used as “Banks”

because of the prevalent respect and confidence in the clergy.

“Banks do business of money. Rather banks do business of lending and borrowing

loans.”

(Professor Reynolds)

History of Banking in Pakistan

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At the time of independence, there were 631 offices of scheduled banks in Pakistan, of which

487 were located in West Pakistan alone. As a new country without resources it was very

difficult for Pakistan to run its own banking system immediately. Consequently, the expert

committee recommended that the Reserve Bank of India should continue to function in

Pakistan until 30th September 1948, so that problems of time and demand liability, coinage

currencies, exchange etc. may be settled between India and Pakistan. The non-Muslims

started transferring their funds and accounts to India. By the end of June 1948 the number of

officers of scheduled banks in Pakistan declined from 631 to 225. There were 19 foreign

banks with the status of small branch offices that were engaged solely in export of crop from

Pakistan, while there were only two Pakistani institutions, Habib Bank of Pakistan and the

Australian Bank. The customers of the bank are not satisfied with the uncertain condition of

banking. Similarly the Reserve Bank of India was not in the favor of Govt. of Pakistan. The

Govt. of Pakistan decided to establish a full-fledge central bank.

As a result the Governor-general of Pakistan Quaid-e-Azam inaugurated the State Bank of

Pakistan on July 1, 1948. Thus a landmark was made in the history of banking when the state

bank of Pakistan assumed full control of banking and currency in Pakistan. The banking

structure in Pakistan comprises of the following types:

State Bank of Pakistan

Commercial Bank of Pakistan

Saving banks.

Cooperative banks

Specialized credit institutions

Commercial banks have been the most effective mobilizes of savings and have been

providing short-term requirements of working capitals to trade, commerce and industry.

Up to December 31, 1973, there were 14 Pakistan commercial banks that functioned all over

the country and in some foreign countries through a network of branches. All these

commercial banks were nationalized in January 1, 1974.

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The Government of Pakistan in the late 90‟s introducing the need for the privatization of state

owned banks and companies. The private sector has accepted the challenge and most of the

banks are privatized today. The State Bank of Pakistan issues the shares of these

periodically. Bank employees and other common peoples can also purchase these shares

and earn profit. Throughout the period of banking history the banks have been expanding

rapidly and achieved the desired goal of progress.

Years of Establishment of Main Banks in Pakistan

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The Role of Banking in Economic Development of Pakistan

Banking system plays very important role for the progress of economy of every country. With

the progress of science and technology, the banking system has also been changed. As

every aspect of our material life is directly related with Economy, Industry, Agriculture and

Politics. Business is not out of the effects of modern banking system now. A sound and

organized banking system provide bright and strong base to national and international

economic system. The health of the economy is closely related to the soundness of its

banking system. Though bank creates no new wealth but its borrowing, lending and related

activities facilitate the process of production, distribution, exchange and consumption of

wealth.

In other words, we may say that bank becomes very effective pipeline in the process of the

economic development of the country. Bank is just like a heart in the economic structure and

the capital provided by it is just like blood in it. If there would be no bank, then a big portion of

a country‟s capital would remain the idle. The loan facilities provided to the producer by the

banks work as an incentive to increase the production.

Bank plays a vital role to encourage the masses to deposit their funds with the bank. In the

developing economy where the formation of capital is a difficult problem, they play very

important role to tell government securities or bonds to manage capital for the government to

keep up their operation for the benefits of the nation.

Sr.

No. Name of the Bank Year of Establishment

1 Habib Bank limited 1941

2 Allied Bank Limited 1942

3 Muslim Commercial Bank 1947

4 National Bank of Pakistan 1949

5 United Bank Limited 1959

6 The First Women Bank Limited 1989

7 The Bank of Punjab 1989

8 Askari Bank Limited 1991

9 Bank Alfalah Limited 1992

10 Standard Chartered Bank Limited 2006

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Bank also solves many difficulties in the international payments and the volume of the

transactions has been increased. Now banks not only extend short term loans to the farmers,

traders, industrialists etc. but also invest in a wide variety of long term earning assets.

Chapter 02

THE FIRST WOMEN BANK LIMITED

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“Let the women’s bank be a pioneer in the

Helping Muslim women secure economic

Independence and career satisfaction with

in the Cultural ambiance and social values

of an Islamic society.”

Mohtarma Benazir Bhutto (Shaheed) P.M. of Islamic Republic of Pakistan, Islamabad,

December 3, 1989

2.1 History

First Women Bank Ltd. is a unique financial institution, a Scheduled Commercial Bank and a

development financial institution for the socio-economic empowerment of women. The Bank

was set up in 1989 by the Islamic world‟s first woman Prime Minister Benazir Bhutto

(Shaheed), who wanted a bank that would meet the banking needs of women entrepreneurs.

Currently, the Bank is headed by Mrs. Shafqat Sultana, who took over as President in May

2009. FWBL was incorporated as a Scheduled Commercial Bank in the Public Sector as a

Public Ltd. Company on 21st November, 1989 under the Companies Ordinance, 1984.

The Bank commenced its business on 2nd December, 1989 with a paid up capital of Rs. 100

Million; 90% of which was contributed in varying proportions by five leading Public sector

banks of the country. They were:

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National Bank of Pakistan, Habib Bank Limited, Muslim Commercial bank Limited,

United Bank limited and Allied bank Limited

10% of the remaining capital came from the Federal government

The FWBL model caters to women at all levels of economic activity – micro, small, medium

and corporate. Most importantly, the Bank provides women with the support services required

to navigates the obstacles to the development of business. By doing so, FWBL is helping

them emerge as key players in the national and global economy.

The Bank has always looked at its micro-finance borrowers as potential SME and Corporate

clients. The Bank’s unique credit policies promote asset ownership for women by Financing

to business entity if one of the following fulfills:

Where woman have 50% shareholding

Where a woman is a managing director

Where woman employees are 50% or more

In 1992, an ILO Geneva Study recognized First Women Bank Ltd. as a major innovation in

Pakistan, along with Edhi Trust and Lahore University of Management Sciences (LUMS). In

1994, Euro money awarded FWBL the Best Bank in Pakistan for its low administrative cost.

FWBL was the first Commercial Bank to launch Micro Credit in Pakistan. In 2001, Women’s

World Banking in its Global Directory profiled FWBL for Banking Innovation in Microfinance,

and acknowledged that FWBL features among the world’s micro finance leaders.

To combat child labor in the carpet weaving industry, FWBL collaborated with ILO and

directly financed women micro-borrowers in rural areas. The Bank disbursed micro-credit to

2921 women living below the poverty line in 162 villages, with 100% recovery rate. Under this

project 5842 children were weaned out from child labor and educated through non-formal

educational centers.

Asian Banking Award 2005 awarded First Women Bank Limited, FWBL / ILO – IPEC Micro

Credit Program as Runners-Up in its Micro-Finance Program category. Under this project,

one of the borrowers received the Global Micro Entrepreneurship Award (Runners-up)

organized by the UN Capital Development Fund in collaboration with CITI Group Foundation,

Harvard Business School and Pakistan Poverty Alleviation Fund.

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In Pakistan, when compared with other countries of the world, female entrepreneurship is

amongst the lowest in the world. With very low female participation in the economy of the

country, the percentage of female employers is even less than one percent. The issues stems

from the statistical invisibility of women. There’s very little research on the market itself,

primarily because women are just not considered a market worth tapping into on their own.

Even at the macro level, there are very few people working to empower women as a special

interest group. This is mainly because no extensive research or study has been done so far

on women’s economic role. Realizing the importance of research, FWBL commissioned

SPDC to conduct a Market Assessment Study for First Women Bank. The study gave

surprising results and revealed that Credit demand of women in five big cities of the country

ranged between Rs. 261 Billion to Rs. 285 Billion.

Since inception, FWBL has contributed substantially in raising a sizeable body of women

entrepreneurs and banking professionals in the country. For example, the total proportion of

women bankers in the commercial banks is around 6% of the total bankers, which was less

than 1% around twenty years ago.

To date, FWBL has disbursed Rs. 22,917 Million with outreach to 46,959 borrowers of which,

Rs. 15,580 Million has been disbursed to women which comprised 68% financing to women.

FWBL achieved another milestone by introducing ATM & Online Banking. FWBL customers

can now withdraw cash from any ATM carrying the MNET sign across Pakistan. The bank is

also live on SWIFT to transfer funds internationally. At present, the Bank has a network of 38

branches in 23 districts of Pakistan.

FWBL was formed with shareholdings from all the large public sectors banks. Over time,

these banks were privatized; however, their shares in FWBL were not transferred to the

public sector.

A majority of the shares of FWBL are currently with the private sector banks – HBL, MCB,

ABL etc. Only National Bank of Pakistan and the Ministry of Women Development are the

public sector shareholder of the Bank.

Recently, the Government of Pakistan has decided to keep First Women Bank Ltd. (FWBL) in

the public sector by purchasing the shares of private shareholder banks i.e. MCB, HBL, ABL

and UBL through State Bank of Pakistan.

Today, FWBL‟s mission for empowering women remains unmatched:

“To transform the status of women from passive beneficiaries of social services to dynamic

agents of change”

2.2 Unique Character

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“Undertaking the conduct of all forms of business of Banking Company in a manner designed

to meet the special needs of women and to encourage and assist them in promotion and

running of trade and industry and practice of profession.”

Credit Policy

First Women Bank Ltd. a commercial bank and a DFI, caters to women at all levels of

economic activities – Micro, SME and Corporate, thereby enabling them to transcend their

status from passive beneficiaries to dynamic agents of change.

The Bank has always looked at its micro-finance borrowers as potential SME and Corporate

clients. The Bank’s unique credit policies promote asset ownership for women by financing to

business entity, if one of the following fulfills:

Where woman have 50% shareholding

Where a woman is a managing director


Vision & Mission

Following are the visions and missions of the FWBL:

Vision

To be the lead Bank for Women: Dynamic, adaptive and responsive to their special economic

needs, offering the best financial services and the best banking practices.

Mission

Our mission is to be a financially sustainable bank with a specialized focus on promoting

economic prosperity and self-reliance in women of urban and rural areas by:

Transforming the status of women form passive beneficiaries of social services to

dynamic agents of change

Promoting assets ownership, through its unique credit policies

Promoting entrepreneurs through Computer Literacy and Business Centers for skill

enhancement, product development and business management

Facilitating their access to financial services by providing support through its financial

Services desk on Corporate Affairs, Credit management and Trade finance activities

and advice on legal, Taxation and Marketing issues

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Providing extensive banking training through FWBL’s Training Institute and

collaboration with other Banking Institute of repute

Board of Directors

1) Ms Shafqat Sultna (President/Chairperson FWBL)

2) Mr. Qamar Hussain (Chairman NBP)

3) Ms. Batool Qureshi (Secretary Min of Women Development, Govt. of Pak)

4) Mr. Atif R. Bukhari (Pesident UBL)

5) Mr. M. Usman Ali (President MCB)

6) Mr. Zakir Mehmood (President HBL)

7) Mr. Khalid A. Sherwani (President ABL)

Awards & Achievements

1. ILO Geneva Study 1992

2. Euro money Excellence Award 1994

3. Leader in Micro-Finance 2001

4. Asian Banking Award 2005

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5. Global Micro Entrepreneurship Award 2005

6. Citi PPAF Micro-Entrepreneurship Award 2008

Future Plans

In 1989, the world’s only bank for women was established. Since then, chapter by chapter,

year by year, against all challenges FWBL has strived to rewrite the lives of Pakistani women

in words of aspiration, achievement and empowerment & after 20 years we believe our story

has no meaning but only hopeful beginnings.

Chapter 03

SERVICES & PRODUCTS OF

THE FIRST WOMEN BANK LIMITED

“Transforming the status of women from passive beneficiaries to dynamic agents of change”

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Services

Following services are provided by the FWBL:

1. Online Banking

FWBL offers Online Banking Facility to its customers

at branches all over Pakistan. Cash may be

accepted at a branch for crediting accounts at

another branch. Cheques can be paid by a branch

by debiting the customer’s account at another

branch.

Payments of Cheques

Cash receipts

Transfer of funds through cheques or cash between branches

ATM (Automatic Teller Machine)

With First Women Bank Ltd. ATM Card customers can access their Savings and Current

account through all ATM’s in Pakistan.

Remittances

FWBL offers Funds Transfers in Pak Rupees (Inland Local Remittances) or in Foreign

Currencies, (Foreign Remittances) on request of customer.

Various Types of Remittance Facilities are available:

Payment Order

Demand Draft

Mail Transfer

Telegraphic Transfer

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Locker Facility

Locker facility is available at all branches of the First Women Bank Ltd.

Utility Bills Collection

FWBL is equally participating in making utility service available to the entire public.

Liability Products

Following liability products are provided by the FWBL:

PLS Account

PLS Saving Accounts are opened for individuals, (single or joint) Charitable institution,

Provident and other funds of benevolent nature of local bodies, autonomous corporations,

companies, associations, educational institutions, firms etc.

Current Account

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3.Current accounts are opened, for individuals, (Single or Joint)firms, Joint stock

companies, local bodies, autonomous bodies, associations, educational institutions

etc, and all other cases where the accounts are to be opened under the order of a

competent Court of Law.

No profit is paid on the balances of current account.

Hyper Profit Running Account

It is for business entities. Profit is paid on daily product basis.

Basic Banking Account

In compliance with the directives of State bank of Pakistan via BDP circular No.30

issued on November 29,2005, the Basic Banking Account was launched.

This product has been introduced to facilitate the low income group as well as the

existing account holders who wish to convert their regular savings or current account

into basic Banking Account.

The Basic Banking Account is a current account and can be open with a minimum

initial deposit of Rs. 1000. Account holders will be allowed 2 deposit transactions

(either cash or through clearing) and 2 withdrawals (cash or clearing ) each month.

There will be no minimum balance maintenance requirement, and hence no monthly account

maintenance charges will apply.

“In cases where balance in BBA remains „zero‟ for…” a continuous 6 month period, the

account will be closed automatically, without any notice to the account holder.

Foreign Currency

Foreign currency accounts are opened, on proper introduction and submission of

required documents along with an initial deposit prescribed from time to time.

Rate of return on Foreign currency Deposits are subject to fluctuation as determined in

accordance with State bank of Pakistan directives.

Term Deposit

The PLS term deposits are accepted for a period of minimum 7 days above

The profit on PLS term deposits determined by the bank at the end of each year

Assets Products

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Following assets products are provided by the FWBL:

Micro Finance

FWBL is amongst the pioneers in micro-finance. In 2001 Women World Banking

acknowledged the FWBL as leader in micro-finance for its innovative products and services.

The three-pronged strategy of FWBL micro-finance model is:

Extending Micro-credit to the Urban and Rural women

Offering wide ranging support services

Research , Documentation and compilation of women centric data

The Micro-Finance product we offer:

Ranges from Rs. 5000 to highest credit amount in the industry, of Rs. 100,000.

Mark-up rates are amongst the lowest.

Thus retaining and elevating micro borrowers to higher micro-credit ceilings.

SME Finance

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) and also fulfills the following criteria of either „a‟ and „c‟ or

„b‟ and „c‟ as relevant:

A trading/services concern with the total assets at cost excluding land and building up-

to Rs.50 Million.

A manufacturing concern with the total assets at cost excluding land and building up-to

Rs.100 Million.

Any concern ( trading , services or manufacturing ) with net sales not exceeding Rs.

300 Million as per latest financial statements.

An Individual, if he or she meets the above criteria, can also be categorized as an SME. The

Bank offers SME loans at highly competitive rates. The model of First Women Bank Ltd is the

way forward, which believes that a “micro borrower” of today is a potential “SME” and a

“Corporate Client” of the future.

Corporate Finance

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The Bank’s unique credit policies promote asset ownership for women:

Annual sales turnover is million and over.

Has a successful business trade record for a minimum period of 3 years , backed by

audited financial.

Financing to business activity.

Where women have 50% shareholding

Where a woman is the Managing Director


Business loans for Women

Provides financing to women entrepreneurs for establishment of new business or

development of existing business and for working capital

Woman can get loans ranging from Rs. 0.1 Million to Rs. 2.00 Million

The Financial Services Desk of the bank assists the applicants of the loan on the

following criteria:

Pakistani National

Between the age bracket of 25-55 years

Possess 50% equity sharing capacity

Personal Loans

Providing you just that extra spending power around the house no matter what your needs

might be! Get greater spending power with personal loans for women.

Education Loans

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Often women are deprived of their right to pursue higher education mainly because of

the financial constraints many families face. The society also does not realize that well-

educated and enlightened women help by rearing an equally enlightened future

generation.

First Women Bank Ltd. offers Education loans at an attractive rate, with special bonus for the bright students who meet the bank’s merit criteria.

First Car

First Car is designed to assist women from all walks of life to conveniently avail car loan

facility from the bank. The scheme is specially designed for working women who often face

problems in commuting to their workplaces.

Women falling under these classes can apply for loan:

Salaried

Self employees (proprietor )

Professional

Business women

FWBL offers Financing up to Rs. 1.0 Million for new car and Rs. 0.5 Million for secondhand /

used cars (not over 3 years old model) for a maximum period of 5 years.

Special Features of the Car Scheme

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Competitive financing rates

Low down payment

Flexible repayment option

Quick processing

Insurance coverage from reputable companies

First Home

First Women Bank Ltd. offers home loans under the brand “First Home”. Women can

get a loan up to Rs. 7.5 Million from the bank.

These loans are offered to all classes of working women i.e. salaried, self-employed

(proprietor), professionals in business.

Another great advantage that only FWBL offers is that these Home Loans can be

availed singly or jointly i.e. with spouse or a male earning member of the family.

Loan against Salary

FWBL offers loan against salary up to Rs. 500,000 for employees of Government

organizations, autonomous & semi autonomous bodies, Public Limited Companies, Private

Limited companies

having paid up capital of Rs. 10 Million and above, Corporations having a service contract

valid for 18 months at the time of applying for limit and has been in service for the past 3

years. Having Take Home salary equivalent to 50% of the gross pay this scheme can be

availed on the following basis:

A Pakistan resident

The salary account should be maintained with FWBL and at least one month’s salary

must be credited in the account prior to application for the facility.

The retirement age of the borrower should be 6 months after the maturity of the facility.

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Chapter 04

THE FIRST WOMEN BANK LIMITED, SIALKOT BRANCH

Basic Info

Branch Manager Ms. Rizwana Shafique

Branch Code 0022

Branch Address Aziz Shaheed road Branch,

Sialkot Cantt.

Hierarchy

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Introduction of the Branch

We started our branch operations in year 1995. Our branch is situated at Main university road

& on a very ideal position as it covers all the main areas. We have captured a large portion of

the market with our attractive services & saving plans. We are also providing financing

facilities to micro borrowers, SMEs & Corporate sector where

Where women have 50% shareholding

Where a woman is the Managing Director


We are not providing finance facility to any entity which does not cover any of these three

points as the mission of our bank is Women Empowerment by focusing on promoting

economic prosperity and self reliance in women of urban and rural areas.

Financial Highlights – FWBL Sialkot Branch

Branch Manager

Assistant Manager

Accountant

Officers

Cashier

Massenger

Guard

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Key Financial

Indicators

(PKR In Millions)

2007 2008 2009 2010 2011 2012

Total Assets 8985 7304 10258 12703 16128 22491

Share holder’s Equity 1088 1103 1093 1106 1720 2077

Advances(Gross) 3129 3410 3482 6535 7901 8573

NPLs 85 174 331 430 523 613

Deposits 7569 5939 8757 10195 13815 19193

Investment & Lending

to Financial Institutions

4405 2615 5233 4356 6336 11484

Profit before tax 238 190 (86) 55 400 88

Net Assets value –

PKR/Share

38 39 39 39 16 14

Earnings Per Share –

PKR/Share

5.57 3.74 (2.82) 0.30 3.11 0.33

Capital Adequacy ratio-

%

29.52% 22.12% 32.39% 27.24% 35.45% 24.70%

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Range of financial products and services

Presently, our branch is providing the following financial products and services to our

customers

Running Finance

Demand finance

Small loans

Business Loans for Women

Personal Loans

Information Technology Finance

Asiash Scheme

Loan for Salaried Women

Micro Finance

SME Finance

Corporate Finance

Education loans for women

First Car

First Home

Work Performed at FWBL Sialkot Branch

Account Opening

The general banking performs various functions among them the first and most important

function is opening of an account. The process of opening an account is very simple and

anybody who would like to open his account could do it easily without any difficulty. An

account opening form is provided to the customer.

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The customer after filling the form submits it to the bank along with his/her introduction and

CNIC copy. If an account is opened on the behalf of a company then a letter head is also

demanded which indicates the company is either registered or not.

The manager records the necessary details into this register and allots an account number

from this account opening register. This register is maintained for each type of account and

the account numbers are allotted serially.

After opening a saving and current account every applicant’s data is entered into the

computer to maintain a safe record and application form is properly filled so that it can be

available when necessary. Cheque book is issued to the customer when the bank accepts

the A/C opening application form.

Types of Account Recommended to customers

There are three types of accounts

i. Saving

ii. Current

iii. Hyper Profit Account

As H.P account provides the profit on daily basis so, it is not recommended to the business

entities rather Current account is recommended. While normal Individuals have less number

of transactions so they are recommended to have a saving or H.P account.

Types of Customers

i. Individual

Only one person can operate this account.

ii. Joint

In case of joint account, applicant mentions that how much person will operate the account.

iii. Company Account

For company accounts following documents are required

Private registration

Resolution of board of directors

Commencement of business

Memorandum and Articles of association

Balance sheet

Closing of an Account

There are number of reasons of closing an account. Some are listed below:

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If customer desires to close his account

In case of death of one account holder

Bankruptcy of the account holder

If an account contain nil balance or not up to the requirement of rules.

Before closing any account, bank send letter to the account hold for informing him that his

account is going to be closed 3 times after regular intervals. There is need an approval form

higher authority to close any account.

Types of Cheques

i. Open Cheque

Open Cheque has following properties:

The word bearer is not crossed

Cross stamp is not there

Cheque is not of limited companies

Self or name should be written on the cheque

ii. Crossed cheque

When the cheque does not fulfil the requirement of open cheque then it is known as crossed

cheque. The counter payment is not made for such type of cheques

iii. Order Cheque

When cheque is signed for someone by his/her name. The counter payment is made only to

that person by name the cheque is signed.

Dishonour Cheque

The cheque which is not cashed on the maturity date is called dishonour. This is also called

out dated cheque.

Token to the Cheque

A token is given on open cheques when presented to bank for payment. In this case payment

is made at the spot to the cheque holder. First of all cheque is presented to bank for payment.

The name of holder, no of cheque and amount is written on the register by the bank

employee & token is given to cheque holder.

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Then Cheque reaches the computer department. There it is again feed in computer & it is

stamped after checking that the account holder has enough amounts in his account or not.

After feeding in computer, the cheque reaches the cash department where the holder can

receives his cash by giving token to the cashier provided that he has enough amounts in his

account.

Cash Deposit (Pay-In-Slip)

Here it is very necessary to have knowledge about Pay-In-Slip. It is used for two purposes

Whenever we want to deposit cash in our account then pay-in-slip is used by writing

amount on it and depositing it to cashier along with money.

Whenever we have cheque from any party to be collected in our account we fill pay-in-

slip. One part is attached with cheque and another is given to cheque-holder as a

receipt.

Scrolling of the Bills

The utility bills that FWBL collects are scrolled down and the copy of it is send to the

concerned department i.e. GEPCO, SNGP, PTCL and a copy is kept for bank record.

Remittances

i. Demand Draft (DD)

DD is made in order to have an amount as a security on demand of any organization. DD is

made to transfer the money between the cities. A specified amount is charged on the making

of the DD. First the application slip is filled and the CNIC copy is attached with it and the

desired cash (of which DD is required) is deposited on the counter. And then remittance

officer makes the DD.

ii. Mail Transfer (MT)

If bank wants to Transfer money after collecting the money for a department the MT is used

e.g. Utility Bills transfer.

iii. Telegraphically Transfer

It is used for transferring the individual’s money.

33

Online Banking

Online Banking makes easy to transfer the money from one FWBL branch to any other FWBL

branch.

ATM

In order to enhance the online banking the FWBL has provided the facility of the ATM card.

This on the same side can be used as the Debit Card. The ATM card holder in Sargodha can

use all 1 link, M-net machines. The account holder of FWBL can get it free of cost after

fulfilling the prescribed procedure by the bank. This is done in collaboration with MCB.

For the ATM user money withdrawal is one way of using the online Banking. Transfer of

money with FWBL is yet restricted.

Recording the Daily Post

The post that are daily received by the bank from various banks, departments, other FWBL

branches and head office are recorded in a register having the same serial number on post

and register.

Loan Process

Step 1

To apply for any kind of loan to FWBL, the applicant must have an account with the

bank.

If not, new current account has to be opened with an amount of Rs.1000

The applicant submits loan application with following documents.

Attested copy of NIC

Original Business Plan

Bank statement for past 6 months

Financial statement for the past 3 years

Borrower’s Basic Fact Sheet

Stock reports

Credit Report

If property is offered as collateral following additional documents are required:

Sale deed/ Title deed/ Transfer letter

Non Encumbrance Certificate

Fard Milkiyat

P.T I Form from Property Tax Department

34

Against cash collateral, required documents are:

Defense Saving Certificate (DSC) along with letter of pledge

Special Saving Certificate (SSC) along with letter of pledge

National Saving Certificate (NSC) along with letter of pledge.

However, the specific scheme may require other documents to be submitted to the bank

which have already been mentioned while discussing various schemes

Step 2

The processing fee charged for different services vary from Rs. 2000 to Rs. 3000

The applicant fills the application form along with the Browser’s Basic Fact Sheet.

The applicant has to attach the required documents according to the loan scheme she

is applying for.

The applicant must be very careful in this regard as the required documents vary from

scheme to scheme.

Step 3

After the loan application is received, the credit department goes through the

application.

Two branch officers visit the business sight of the applicant to check the project

viability and verify the sight as well.

Step 4

After the branch verification, the credit department carries out the evaluation and

appraisal of the loan request.

The bank obtains legal opinion certificate from the lawyer for the clearance of the title

of applicant’s property in case of property offered as collateral and gets it evaluated

from professional evaluator of its own choice.

If all this turns out to be positive , the case is forwarded to the approval authority.

Step 5

35

The regional office approves the loan up to Rs. 50000000/- against cash collateral and

Rs. 3000000/- against property while head office approves loan above Rs.5000000/-

against cash or above Rs. 3000000/- against property.

Legal documents are prepared and executed

The collateral is mortgaged in bank’s favor

If necessary, the bank takes lien on salary of borrower/guarantor

The business assets/stocks/immovable assets may be hypothecated or

pledged as required by the bank.

The loan is disbursed to the borrower.

Financial Statements Analysis

FIRST WOMAN BANK LIMITED

BALANCE SHEET

For the period ended 2008-2012

[In millions of Pak. Rupees Except for per share items]

Assts 2012 2011 2010 2009 2008Cash and balances 567888 726003 705703 809657 574929Balances with other

banks215845 295110 301056 384792 400761

Lending to financial institution

3263159 1313119 1431628 1245000 350849

Investment-net 3684852 5378387 3137533 3159640 2264088Advances-net 1649124 2462098 3066249 3063507 3304330

Operating Fixed assets

170038 79955 153060 148686 174833

Deferred tax assets 81621 16840 4536 - 56630Other assets 14015 231772 189637 174294 176301

Total Assets 9646542 10503234 18989402 8989402 7303721LiabilitiesBills payable 71573 67406 62057 193321 101993Borrowings 213150 846150 931520 21543 27140

Deposits & other a/c 8689749 8716185 6965378 7569059 5939308

Subordinated loan - - - - -

36

Deferred tax liability - - - 11000 -Other liabilities 81880 146804 95815 102409 132247

Owner EquityShare capital 283650 283650 283650 283650 283650

Reserves 115857 228540 175759 207336 228540Inappropriate profit 168883 546128 409070 537130 623610

568390 702281 868479 1028116 1135800Add: Surplus on

revaluation of assets

21800 24408 66153 60128 (32767)

Net owner equity

590190 726689 934632 1088244 1103033


BALANCE SHEET

Horizontal Analysis



Assts 2012 2011 2010 2009 2008Cash and balances 100 127.84 124.27 142.57 101.42Balances with other

banks100 136.72 139.48 178.27 185.67


100 40.24 43.87 38.15 10.75

Investment-net 100 145.96 85.15 85.75 61.44Advances-net 100 149.30 185.93 185.77 200.37

Operating Fixed assets 100 47.02 90.02 87.44 102.82

Deferred tax assets 100 20.63 5.56 0.00 69.38Other assets 100 1653.39 1353.10 1243.62 1257.95

Total Assets 100 108.88 93.19 93.15 75.71LiabilitiesBills payable 100 94.18 86.70 270.10 142.50Borrowings 100 396.97 437.03 10.11 12.73

Deposits & other a/c 100 100.30 80.16 87.10 68.35

Subordinated loan

Deferred tax liability 0.00Other liabilities 100 179.29 117.02 125.07 161.51

Owner EquityShare capital 100 100 100 100 100

37

Reserves 100 123.06 151.70 178.96 197.26Inappropriate profit 100 163.46 242.22 318.05 369.26

100 123.56 152.80 180.88 199.83Add: Surplus on

revaluation of assets100 111.96 303.45 275.82 -150.31

Net owner equity 100 123.13 158.36 184.39 186.89


BALANCE SHEET

Vertical Analysis



Assts 2012 2011 2010 2009 2008Cash and balances 5.89 6.91 7.85 9.01 7.89Balances with other

banks2.24 2.81 3.35 4.28 5.49


33.83 12.50 15.93 1.39 4.80

Investment-net 38.20 51.21 34.90 35.16 31.00Advances-net 17.10 23.44 34.11 34.09 45.24

Operating Fixed assets 1.76 0.76 1.70 1.65 2.39

Deferred tax assets 0.85 0.16 0.05 0.00 0.78Other assets 0.15 2.21 2.11 1.94 2.41

Total Assets 100 100 100 100 100LiabilitiesBills payable 0.79 0.69 0.77 2.45 1.64Borrowings 2.35 8.65 11.56 0.27 0.44

Deposits & other a/c 95.95 89.15 86.48 95.84 95.78

Subordinated loan 0.00 0.00 0.00 0.00 0.00Deferred tax liability 0.00 0.00 0.00 0.14 0.00

Other liabilities 0.90 1.50 1.19 1.30 2.13

Owner EquityShare capital 2.94 2.70 3.16 3.16 3.88

Reserves 1.20 1.36 1.96 2.13 3.13Inappropriate profit 1.75 2.63 4.55 5.98 8.54

38

5.89 6.69 9.66 11.44 15.55Add: Surplus on

revaluation of assets0.23 0.23 0.74 0.67 -0.45

Net owner equity 6.12 6.92 10.40 12.11 15.10

Comments on the Balance sheet:

Horizontal Analysis

The horizontal analysis trend showing bad position of FWBL because as compared to 2008

and now in 2012 there in continuous decrease in the assets of the company. Assets

increased in 2009 but after that continuously decreasing. This is due to the low lending to

other financial institutions as compared to 2008. There is very much increase in the liabilities

of the FWBL from 2008 to 2012 called to be 62% increase as compared to 2008. Owner

equity is increased to 82% during that period. This trend showing low business activities as

the life of bank growing.

Vertical Analysis

Trend in the balance sheet is similar. As we have stated before that total assets level

decrease up to 28%. But contribution of all factors within a year is same not so much

fluctuation. Mainly investment level of the bank is decreased that’s showing great fluctuation

but that is also continuous change. But in the net owner equity level has increased with rate

to net assets its contribution is increased.

39


Profit & Loss Account



Assts 2012 2011 2010 2009 2008Mark up/interest earned 460229 654579 722410 685346 736103Less: Mark up/interest

exp112466 217744 237905 171694 212601

Net markup/interest income

347763 436835 484505 513652 523502

Provision for diminution in value of investment

3585 - - - 10716

Provision against advances-net

- 12590 5583 18065 39437

Add: Bad debts written off directly

28 43 - - -

3613 12633 5583 18065 50153Net Markup/interest

income after provision344150 424202 478922 495587 473349

Non Markup/Interest income

Fee, commission 32609 28061 35391 31672 24511Dividend income 669 4721 5784 9375 9088

Income from dealing in foreign currencies

1765 1695 4073 4406 31902

Gain on sale of sec - 129 3306 24115 7250Other income 53793 19719 13320 12917 17592

Total Non-markup/ Interest income

88836 54325 61874 82485 90343

432986 478527 540796 578072 563692Total

Non-Markup/Interest Exp

Admin Exp220166 255676 284219 332517 367798

Provision against other assets

314 744 - -313 -

Other charges 1797 1487 93 7446 5451Total

Non-Markup/Interest Exp

222277 257907 284312 339650 373249

Extraordinary item 0 0 0 - -Profit before taxation 210709 220620 256484 238422 190443

Taxation 86385 87601 90574 80535 84423Profit after Tax 124324 133019 165910 157887 106020

40



Horizontal Analysis



Assts 2012 2011 2010 2009 2008Mark up/interest earned 100 142.23 156.97 148.91 159.94

Less: Mark up/interest exp 100 193.61 211.54 152.66 189.04Net markup/interest income 100 125.61 139.32 147.70 150.53Provision for diminution in

value of investment100 0.00 0.00 0.00 298.91


- - - - -


100 153.57 0.00 0.00 0.00

100 349.65 154.53 500.00 1388.13Net Markup/interest income

after provision100 123.26 139.16 144.00 137.54


Fee, commission 100 86.05 108.53 97.13 75.17Dividend income 100 705.68 864.57 1401.35 1358.45


100 96.03 230.76 249.63 1807.48

Gain on sale of sec - - - - -Other income 100 36.66 24.76 24.01 32.70


100 61.15 69.65 92.85 101.70

100 110.52 124.90 133.51 130.19Total Non-Markup/Interest

ExpAdmin Exp 100 116.13 129.09 151.03 167.05


100 236.94 0.00 -99.68 0.00

Other charges 100 82.75 5.18 414.36 303.34Total Non-Markup/Interest

Exp100 116.03 127.91 152.80 167.92

Extraordinary item - - - - -Profit before taxation 100 104.70 121.72 113.15 90.38

Taxation 100 101.41 104.85 93.23 97.73Profit after Tax 100 106.99 133.45 127.00 85.28

41



Vertical Analysis



Assts 2012 2011 2010 2009 2008Mark up/interest earned 100 100 100 100 100

Less: Mark up/interest exp 24.44 33.26 32.93 25.05 28.88Net markup/interest income 75.56 66.74 67.07 74.95 71.12Provision for diminution in

value of investment0.78 0.00 0.00 0.00 1.46


0.00 1.92 0.77 2.64 5.36


0.01 0.01 0.00 0.00 0.00

0.79 1.93 0.77 2.64 6.81Net Markup/interest income

after provision74.78 64.81 66.30 72.31 64.30


Fee, commission 7.09 4.29 4.90 4.62 3.33Dividend income 0.15 0.72 0.80 1.37 1.23


0.38 0.26 0.56 0.64 4.33

Gain on sale of sec 0.00 0.02 0.46 3.52 0.98Other income 11.69 3.01 1.84 1.88 2.39


19.30 8.30 8.56 12.04 12.27

94.08 73.10 74.86 84.35 76.58Total Non-Markup/Interest

ExpAdmin Exp 47.84 39.06 39.34 48.52 49.97


0.07 0.11 0.00 -0.05 0.00

Other charges 0.39 0.23 0.01 1.09 0.74Total Non-Markup/Interest

Exp48.30 39.40 39.36 49.56 50.71

Extraordinary item - - - - -Profit before taxation 45.78 33.70 35.50 34.79 25.87

Taxation 18.77 13.38 12.54 11.75 11.47Profit after Tax 27.01 20.32 22.97 23.04 14.40

Comments on Profit & Loss A/C:

Horizontal Analysis

42

The horizontal analysis trend showing a very unimaginable position of FWBL because as

compared to 2008 and now in 2012 there in continuous increase in the markup of the

company. There is 60% increase in the markup of the company. Markup is increased in 2009

and after that continuously increasing. But there expenses level is increased much more net

markup level is 50%.

There is very much increase in the markup of the FWBL from 2008 to 2012 called to be 50%

increase as compared to 2008. But their profit as compared to 2008 is decreased to 78%.

Interest earned in increased to 50% and profit is decreased by 23%. This trend showing more

business activities as the life of bank growing but their overall profit margin is decreasing.

Their expenses are increasing at a larger rate. Overall business is increasing but as business

grows their expenses are decreased to a larger extent.

Vertical Analysis

Trend in the profit & loss a/c is similar. As we have stated before that expenses are increased

up to 28% from 24%. But contribution of all factors within a year is same but our overall

expenses are increasing to a larger extent. Mainly profit margin of the bank is decreased

that’s showing great fluctuation but that is also continuous change. Total markup income is

decreased but expenses level is increased to a larger extent. That’s why in presence of large

income our profit margin is still decreased.

43


Ratio Analysis



Ratios 2012 2011 2010 2009 2008

Account receivable turnover

0.125 0.430 0.161 0.151 0.172

Days markup in receivable

1812.44 1697.86 2272.57 2134.45 3895.85

A/R turnover in days 1696.61 6174.71 2272.57 2455.90 2455.90

Working Capital 847577 979585 13182 13007557 499010

Current ratio 7.560 5.560 1.010 1.120 2.740

Acid test ratio 7.560 5.560 1.010 1.120 2.740

Cash ratio 7.560 5.560 1.010 1.120 2.740

Sales to working capital ratio

0.630 1.631 11.966 18.645 1.845

Debt ratio 0.850 1.000 0.900 0.920 1.110

Debt Equity ratio 5.620 7.260 8.620 13.440 15.340

G.P Margin 0.710 0.750 0.670 0.660 0.660

Sales to fixed assets 4.550 4.540 6.200 4.280 4.280

Net profit margin 0.140 0.230 0.355 0.462 0.420

Total assets T.O 0.100 0.080 0.070 5.480 5.480

Return on assets 0.525 0.426 0.411 0.211 0.223

Operating Income margin

0.730 0.350 0.360 0.310 0.310

Operating assets T.O

0.024 0.021 0.018 0.017 0.017

Return on operating assets

0.017 0.007 0.007 0.005 0.005

44

COMMENTS ON RATIO ANALYSIS:

These all ratios showing an inconsistent trend of first women bank limited. In Days markup in

receivables in 2004 there is excess percentage then2008 which shows the markup on their

receivables per day is more than current situation. Means due to increasing competition their

percentages are decreasing. That would not be a favorable condition for FWBL .Account

receivable turnover is fluctuating every year. In 2007 it is maximum that shows their good

position that in how many days they are recovering their receivables. In 2008 that also

decreases. FWBL current assets are more than their liabilities

that’s showing their

good capital structure. And these are more in 2007 and 2008. With respect to working capital

2007 is also a favorable year. Their Asset to liabilities ratio is much greater in 2008 than any

other year this shows a great increase in their Assets in last few years. As current ratio

increase Acid-test and cash ratio also increases to same amount. As their working capital is

increasing their assets are increasing but their return or sale is not increasing with respect to

their working capital. Their debt ratio showing a slight increase in the current year that results

a better standing in last year. With respect to their common stock or owner equity their ratios

are decreasing. And least is in year 2008.Gross profit margin is increasing year by year

maximum in 2007 and a slight decrease in 2008 shows good profit margin. Sales with respect

to fixed assets are consistent through the company life.Net profit margin is reduced in

the last year. That’s shows profit with respect to revenue.

Decrease in DuPont analysis showing per unit decrease and also turnover on assets. Means

turnover and profit margin are decreasing both at a consistent rate.

Return on operating assets is increasing means their operating incomes increasing from their

operating assets. Overall, results shows that company per unit profit and profit ratios are

decreasing with consistent rate. Means due to stiff competition company has to lose its

per unit income.

That’s decrease is due to the increase in their assts. above ratios are

showing increase in the assets of the company. So, concluding all remarks I will say that

company assets are increasing but their profit margin is not increasing with that rate.

45

SWOT Analysis

Strengths

Women friendly

Co-operative staff

Flexibility in Collateral requirement & installment

No hidden charges

Attractive rate of return

Women Empowerment & focus on women development

Good reputation in the market

Good quality of services & minimum process time

Promoting asset ownership

ATM free

Lockers

Online funds transfers

Leading Brand reputation of FWBL – World’s only bank for women

weaknesses

Focuses to women’s mainly

Small network

Shortage of staff

Lack of advertisement

Small percentage of Micro financing

No specialized branches for SME & Micro credit

Bank’s own training centre

Opportunities

Expand branch network

Hiring of specialized staff

Extensive advertisement

Specialized branches for SME &

Micro financing

Develop & design financial products particularly catering the demand existing

for credit amongst professionally skilled working women

Bank’s own training center

46

Women empowerment projects should be started with specific focus on socio

economic development of women

Threats

Political instability as FWBL is a government owned bank

Energy crises

Global Recession

Security Problems

Increased competition in the market

Prices of products offered by competitive banks

Changing & New Technologies

Conclusion

Due to revolution of IT and new investment opportunities globally, it is evident from this report

and the financial statements of FWBL that it is making progress by leaps and bounds. Due

trend in last few years in consumer banking and corporate and SME sector new investment

ways, the profits of FWBL have grown considerably during the last few years and this trend is

expected to continue into the future.

So, we conclude that FWBL has a prosperous present and future, which assures wealth

maximization. Side by side we think that if bank would be able to cover and control on the

above mentioned recommendations then it would be in such a situation that will really lead it

towards the road of prosperity, development and integrity. With the above mentioned

sentences we think there is too fault of the customers and in order to make the proper

working of the bank the customers should also cooperate with the bank which will be really

ambitious and diligent condition for the bank. And then bank will be in such a situation and

position to compete its competitors in the country as well as on international level.

47

Recommendations

From the Quantum of the SOWT analysis and its financial data it can be easily judged

that FWBL is performing well. Its deposits are growing day by day and so its

profitability. The controlling body is responsible for the productive performance of the

Bank.

Following are my observation and suggestion to improve the efficiency for the

development of the bank.

There is a criticism on the banking management that the salaries of the employees are

decreasing in every succeeding year. And I think this will shake the confidence and

working habit of the employees.

There is another recommendation about the bank that there is no proper timing of the

bank and there is made an unnecessary delay in the banking transactions, which

might not be a good sign for the bank from future prosperity point of view.

Staff turnover particularly of trained staff result in financial and other losses. The

amount spent by the bank on employment, induction and training of outgoing officers

constitutes to beat till another officer should ready prove this work. The exodus of bank

officer in the past has worsened the situation.

Most of the bank employees, are sticking to one seat only with the result that they

become master of one particular job and lose their grip on other banking operation. In

my opinion all the employees should have regular job experience all out-look towards

banking. The promotion policy should be adjusted.

48

References

The major sources of information and help were:

Articles and Reports

“Banking sector grows by 21.8%”, Daily Times

FWBL Annual Report 2012

FWBL Half Yearly Report 2013

http://www.fwbl.com.pk

http://www.google.com

http://www.thebankers.com

http://www.finance.gov.pk.

http://www.sbp.com.pk

49

Appendix

MCB Muslim Commercial Bank

ATM Automatic Teller Machine

PLS Profit and Loss A/C

HR Human Resource

CV Curriculum Vitae

MIS Management Information System

IT Information Technology

CDR Call Deposit Receipts

RTC Rupee Travel Cheques

AOF Account Opening Form

MO Main Office

HO Head Office

DD Demand draft

Internship report on First Women Bank Ltd.

Business

credit department

accounts department

different areas of banking

internship report

weeks internship

foreign exchange department

credit vouchers

credit entries