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Allied Bank Account Opening

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Work Done by Me

6

In the Allied Bank of Pakistan Limited, I really enjoyed to work with the staff of Main Branch, Ghala Mandi, Toba Tek Singh from 2nd of July to 31st August, 2002 and have a wish to be employee of Allied Bank of Pakistan Limited. I feel honour to think for my contribution to computerize the branch, because at that time, the branch was being computerized. Initially I started of my training by entering the data in the computer. It was almost impossible to work in all the departments within that limited time. But on my request, they staff of the branch provided me the opportunity to work in the different departments for the sake of practical knowledge. I feel highly indebted to work in the Saddar Bazar Branch on the request of the manager of that branch sir Munir Sahib, because I learnt a lot in that branch. During my internship training in the Allied Bank of Pakistan as I early mentioned that I have worked in different departments & seats and learnt the followings.

OPENING

OF

NEW ACCOUNT
Account opening and closing is the function of accounts departments. Bank’s customers may be individuals (Single or Joint), firms (partnership/proprietorship), Autonomous corporations, Limited Companies, Charitable Institutions, Associations Educational Institutions or Local Bodies. ABL normally opens following types of accounts. 1. Current account 2. Saving account Brief explanation of these accounts is as follows:

CURRENT Current A/c is basically used to meet the daily transactions. Current ACC account provides safety to the customer’s money, gives the advantage for Hailey College of Commerce, University of the Punjab

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OUN paying debts by the convenient and safe means of sending cheques TS through the post thus avoiding the trouble and loss. SAVING In case of saving accounts, account holder gets profit. In Allied Bank of Pakistan Ltd. saving a/c is operated just like a current a/c and ACCOUNT there is no main difference between current & saving account except profit.

BASICS

TO OPEN AN ACCOUNT

During the span of mine internship in Allied Bank I learned and observed a lot of about the opening of an account. Basically I think that the opening of an account is the establishment of a contractual relationship between the banker and the customer. By opening an account at a bank a person becomes a ‘customer’ of a bank. Further I am going to express the basic requirements and steps involved in the opening of an account. Introduction and Before opening an account Allied Bank of Pakistan as like the other banks preliminary in Pakistan ascertain whether or not the person who is going to open the Investigation account is a desirable customer or not. Then Allied Bank of Pakistan determine the prospective customer’s integrity, respectability, occupation and the nature of business by the introductory references given at the time of account opening. Negligence in this informal preliminary investigation may result in serious consequences not only for the banker concerned directly but also for other bankers and the general public who may be affected indirectly. In Ladbroke & Co. V Todd (1914), the banker did not obtain introduction at the time of opening the account, and it was construed a negligence within Section 82 of the Bills of Exchange Act 1882. In order to further strengthen and streamline this process, the Federal Ombudsman of Pakistan, vide his ruling on complaint No. II/31/5186, has directed the banks to retain with the account opening form a Photostat copy each of the National Identity Cards of the person desiring to open an account as well as that of the introducer. As per these directions, the concerned Branch Managers are required to obtain the original National Identity Cards along with their Photostat copies and then return the original after attesting the authenticity of the retained copy. Preliminary investigation is necessary because of the following reasons: Avoid Frauds: In this regard I learned that If a banker does not make the Hailey College of Commerce, University of the Punjab

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necessary inquiries mentioned above he may enable dishonest persons to possess cheque books for fraudulent purposes. If any such person happens to be an undercharged bankrupt, the banker might be placed in an awkward position for having allowed such a person to open and open a bank account. Safeguard against unintended overdrafts: Sometimes due to a mistake an account may be given an overdraft, For instance, the ledger keeper, misreading the balance of an account honors a cheque for an amount larger than the balance. Similarly a credit entry belonging to a customer may be made by mistake in another customer’s account. In such situations the excess amount withdrawn by the customer can only be realized if the customer is a respectable person. Negligence: In Allied Bank of Pakistan I also observed, When a banker does not make the necessary investigation, he may be deprived of the statutory protection provided to a clearing banker under section 131 of the Negligence Instrument Act 1881. This is because I such a case the banker will be deemed to have acted negligently. Inquiries about clients: Being a banker I think Allied Bank of Pakistan has a business obligation to respond to inquiries from other banks etc. about his customer’s financial position. Though the banker gives only a general ideal about the financial standing of his customer, it should nevertheless have the necessary information available with him. Specimen When an account is opened with Allied Bank of Pakistan customer Signature provides to the bank a specimen of the form of signature which would appear on all his cheques to express his authority for the payment of cheques drawn on his banker. This specimen is taken generally on a card specially designed for this purpose, and rule for the customers, full name, and account number are entered on it. If the bank has reasons to doubt the genuineness of a signature, he should either get it confirmed for his satisfaction or return the cheque with the remark ‘Signature differs’. If the signature of the customer is forged the banker cannot escape his liability because he has actually acted on his customer’s mandate. Signature other If a customer signs in a language other than English or Urdu, he is than in English requested to fill a Vernacular Form. This is a type of indemnity whereby the customer relieves the bank of any responsibility in case there is any mis-verification of signatures by the bank and the cheque is paid. The vernacular Form is obtained because the bank officers are not used to verification of signatures other than in English or Urdu; hence there is Hailey College of Commerce, University of the Punjab

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likelihood of misverification. Illiterate Person A person is not disqualified to become a customer of the bank merely because of his illiteracy. The extra precautions to be taken in this case are as under: Banker must obtain 2 or 3 passport size photographs of the prospective customer. One copy is pasted on the account opening form, the other copy is pasted on the specimen signatures card, and the third copy of photograph is pasted with the cheque book. Instead of specimen signature, the left hand thumb impression from male, and right hand thumb impression from female account holders is taken on the cards as well as on the account opening form. An illiterate customer must come personally to operate his account, because he must put his thumb impression on the cheque in the presence of the bank officer attesting his thumb impression. An illiterate account hold should be advised not to issue cheques payable to other persons either for cash payment or for collection and clearing. Married Women Marriage does not disqualify a woman from becoming a customer of a bank, because a married woman is capable of holding and disposing any property, and is also capable of rendering herself liable in respect of any contract. She can open and operate a bank account with cash or a cheque like any other account holder. In case a married woman requests for a loan, adequate securities belonging to her should be taken into consideration, because a banker has remedy only against her own property, separate from that of her husband. Likewise, a husband does not incur any liability for his wife’s debt unless it is established that she contracted as his Agent on his behalf or the husband undertook to be responsible by guarantee or otherwise for certain debts. Pardanashin A household woman, whether observing Pardah (Veil) or not, is known as Women Pardanashin woman. These ladies are competent to open a bank account in their own names. If such a lady is literate and can sign her name, there is no difficulty in opening an account; but in case of an illiterate woman, it is difficult due to the problem of verification of her thumb impression. Therefore, the bankers generally avoid opening such an account, and suggest the opening of a joint account as an alternative.

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Minor’s Account According to Pakistani law, a person is regarded as a ‘minor’ until he has attained the age of 18 years. Under Section 3 of Majority Act 1875, if a competent court of law appoints a guardian of his person or property before his eighteenth year, the majority extends to the age of 21 years. Section 11 of the Contract Act has declared a minor incompetent to enter into contract therefore, any contract with a minor is void in Pakistan. However, in 1925 the Bombay High Court opined that if a competent person has made a contract for the benefit of a minor, it is valid contract; and the minor can enforce it. Section 68 of the Contract lays down that if a loan is given for the necessities of the life of a minor, it can be recovered from his property, but he is not liable personally. Allied Bank of Pakistan has allowed the opening of minors account only with the idea of inculcating in them the habit of saving. These accounts are opened in the name of the minor on the request of his guardian who signs the account opening form himself, and gives his own specimen signature for the operation of the account, but the title of account remains in the name of both the minor and guardian such as ‘X’ (minor) ‘Y’ (guardian). The banker should, however, make it clear in writing on the account opening form itself that the account will continue to be operated by the guardian even after the minor attains the age of majority. Bankers can allow the opening and operation of an account to a minor also when he is physically grown up enough not to appear as a minor and can sign in a firm handwriting. But these are Savings or Fixed Deposit accounts only, where no over-drafts could be lowed. The Madras High Court decided in 1938 (24 R. R., 307) that “Section 30 of the Partnership Act 1932, has authorized the admission of minor into the benefits of partnership with the consent of all the partners. However, he cannot be held liable for any debts of the partnership incurred before he attains majority; but unless he expressly withdraws form the contract of partnership within six months of his attaining majority, he will be regarded as having ratified the agreement, and will become liable as a full partner for all debts incurred by the partnership”.

HOW

TO

OPEN

AN

ACCOUNT (GENERAL) Before opening an account in Allied Bank of Pakistan I observed that the following points must be considered in this regard.
1. Another account holder of the bank should properly introduce the new customer. Hailey College of Commerce, University of the Punjab

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2. The account holder should sign the account opening form in the presence of bank officer and the signature is duly verified. 3. A copy of identity Card is required by Bank. 4. Against submission of the Bank’s prescribed application form, duly introduced in the manner provided and on supplying such document, as may be required and account may be opened. The Bank reserves to itself the right to refuse to open and account without assigning any reason. 5. Each account shall be allotted a distinct number that is to be quoted in all correspondence with the bank relation to the account. 6. Minimum amount for opening and continued maintenance of various types of accounts is as follows: Rs. Saving Current Term Deposit 100 500 1000

7. The bank reserves the right to change the above mentioned minimum balance requirement at any time without any notice. Procedure to According to my practice in Allied Bank of Pakistan, When a customer Open an wants to open an account, the bank officer gives him an application form. Account All information, which is necessary to be known by the bank, are requirements of the application form. Form also requires the essential documents to be attached by the customer. Basically following information is required to open an account with Allied Bank of Pakistan. 1. Title of Account 2. Full Name of Applicant 3. Occupation 4. Address 5. Telephone No. 6. Currency of account 7. Nature of Business 8. Introducer’s Name, Address & Signatures

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9. Special instruction regarding the account 10. Initial Amount of the Deposit 11. Signature of the applicant

DOCUMENTS

TO BE

ATTACHED
Further I learned that if you wanted to open an account with Allied Bank of Pakistan then you should Attach the following documents with your application form which are different for different categories.

SOLE In order to open an account with Allied Bank of Pakistan Limited Sole PROPRIETOR’S Proprietors have to submit their business registration certificate number. ACCOUNT PRIVATE / For individual or private or joint accounts National Identity Card is JOINT required. ACCOUTS JOINT STOCK Before an account of a Public Limited Company is opened Allied Bank of COMPANY Pakistan Limited must ask the person authorized to do so to submit the certified copies or the following documents: • • Certified true copy of the Memorandum and Articles of Association of the company. Certified true copy of the resolution of the board of directors / managing committee / governing body regarding conduct of the account. Certified list containing names and signatures of the directors / office bearers. Certified true copy of the certificate of incorporation or registration. Certified true copy of the certificate of commencement of business (in case of public limited companies). Balance Sheet I.D. Card copy of each director Original is also enclosed for inspection and return Hailey College of Commerce, University of the Punjab

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• •

List of persons authorized to operate the account. Power of Attorney in favor of the person opening account.

We will now discuss briefly these documents. A. Resolution of the Board of Directors The Companies Managing and Election of Directors Order, 1972 prescribed that the minimum number of Company is 7. When a banker is asked to pen and account of the Company, he should see whether all the Directors of the Company have been authorized to open the Account with his bank. This authorization should be in the form of a resolution specifying the following: • The name of the banker. • The names of the persons authorized to operate upon the account and also their specified authority. • An undertaking that as and when the resolution will b revoked or the Directors be changed, the bank would be informed immediately. This resolution should be signed by the Chairman of the meeting, in which the resolution was passed, and it should be countersigned by the Secretary or any other Director authorized under the articles of association. B. Memorandum and Articles of Association The Memorandum of association is the most important document is the charter of the company. It sets out the objectives for which a Joint Stock company is formed. It governs a company with regard to its dealings with the outside world and defines the scope of its activities. It states the name of company with the word regard to its dealings with the outside world and defines the scope of its activities. It states the name of the company ‘Limited’ affixed to the last word in its name; the objects of the company, and the amounts of capital and its distribution into shares of fixed amount, declaring the fact that the liability of the members is limited. The Articles of Association contain rules and regulations for the internal management of the company. Generally they contain: 1. Genera power of the company vested in the directors. 2. Election, rotation relationship. and retirement of Directors, including their

3. Procedure for the calling of the meetings and passing of resolutions. 4. Method and principles of declaration of dividends. Hailey College of Commerce, University of the Punjab

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5. Assessment of profit and loss account etc. C. Certificate of Incorporation From the point of view of a banker this is a very important document, as under companies ordinance, 1984 it is a conclusive evidence that all the requirement of the law in regard to the formation and registration of the Company have been duly complied with. This certificate is issued by the Registrar of Joint Stock Companies after the necessary requirements for registration, including the payment of stamp duty have been met. D. Certificate of Commencement of Business When the Registrar of Joint Stock Companies is satisfied that the company has fulfilled all the requirements for the commencement of business with regard to the subscription of shares by the public as well as the Directors, submission of statutory declaration, and the prospectus as set out in the Companies ordinance 1984, the Registrar issued the Certificate of commencement of Business. Before the issuance of this certificate any contract made by the company is provisional, and not binding on the company. E. Balance Sheet It is statement of the financial affairs of the financial affairs of the company and the banker can draw his own conclusions about the company from the study of the latest balance sheet compared with previous ones. However, a balance sheet can be submitted by only such companies which have been operating long enough to compile one. Powers to Borrow Every trading company has an implied power to borrow money for the purpose of its business; and the Memorandum and Articles of Association specify the borrowing powers of a Limited Company. If the company borrows beyond its powers, the borrowing is ultra vires and void. Therefore, the banker must examine the provisions on the borrowing powers very carefully and should not allow advances beyond the powers within the specified limitations. Every time the company borrows, the banker must take a separate resolution because such a resolution will often help getting over the difficulty which may arise where delegation by the directors is permitted to committees or some of the members of the Board. The prudent banker must take personal guarantee from the Directors to cover the over-exercised power, because this guarantee makes the Directors personally liable for the debts. Operation on the Account

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The account of the company is opened on the resolution of the Board of Directors which nominates the persons authorized to operate upon the account. The banker must take the specimen signatures of the authorized persons and allow the operations on the account under those signatures as long as the authority is not terminated. When a banker receives a notice of death, retirement or dismissal of the authorized person, he should stop the operation on the account and wait for a fresh resolution authorizing another person for operations. However, the cheques signed by the authorized person before his death, retirement or dismissal, should be honoured by the banker because they were valid instruments before the termination of his authority. Any doubt or suspicion should be referred back to the company. The banker may open the account of a newly floated Public Limited Company without the Certificate of Commencement of Business in order to receive the amount of issued capital from the prospective shareholders; but he should not allow any withdrawal from the account till the certified copy of the Certificate of Commencement of Business is submitted to him. Failure to obtain this certificate necessitates the refund of the amount to the prospective shareholders by the promoters. Winding up of the Business A company terminates its career by being wound up. Winding up may be in the following three ways: 1. Compulsory winding up by the court under companies Ordinance 1984. it may be due to the company’s inability to pay its debts and observance of its statutory responsibilities. 2. Voluntary winding which includes the merger of the company. 3. Winding up under supervision of the court in accordance with Companies Ordinance 1984. In whatever way a company may be wound up, the banker should stop operation on the account immediately on receipt of winding up information through a reliable source. The banker must arrange to adjust all the outstanding loans and advances etc. by disposing of the securities lying with him and should lodge claim for the remaining balance against the liquidator. PARTNERSHIP Information which is required to be submitted to Allied Bank of Pakistan FIRM ACCOUNT Limited by a partnership firm in this case are as follows: • Full Names

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• • • • SOCIETIES / CLUBS AND ASSOCIATIONS ACCOUNT

Address Specimen of signatures of the partners Certified true copy of partnership deed Registration No. if the Partnership is registered

Allied Bank of Pakistan Limited is authorized to open the accounts of the societies/clubs and associations, These are non-trading organizations, formed for the promotion of culture, science, education, recreational activities and charitable purposes etc. some of these institution are registered under the Societies Registration Act, 1866, and are issued a certificate of registration after they have been found fit for registration. The affairs of these institutions are administered by a body known as ‘Governing Body’ or ‘Managing / Executive Committee which draws its authority from the rules and regulations or bye laws of the institution. Opening of Account: When the account of such institutions is to be opened with the Allied Bank of Pakistan Limited, Being the student and internee I observed that the Allied Bank of Pakistan asks the societies/ clubs and societies to submit the following documents: 1. The resolution of the Governing Body/Managing Committee authorizing the opening of the account with the bank. The resolution should name the person authorized to operate upon the account, clearly specifying the powers of authorized person. The resolution should be signed by the Chairman of the meeting at which the resolution was passed and countersigned by the Secretary of the Governing Body/Executive Committee. 2. Certified copy of the bye laws or rules and regulations, clearly showing the limitations of the Managing Committee or the Governing Body. 3. The account opening form duly signed by the authorized person(s) who would operate on the account. 4. An undertaking signed by all the authorized persons on behalf of the institution, expressly mentioning that as and when any change takes place in the persons authorized to operate on the account, the banker will be informed immediately. Operation on the Account: Generally, these institutions are not registered under the registration laws and have no legal entity as such they have no contracting powers. They can neither be used nor are the individual members sign the cheques in Hailey College of Commerce, University of the Punjab

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their representative capacity and not in their individual capacity. Only registered institutions are legal entities and are competent to enter into a valid contract.

RULES, TERMS

AND

CONDITIONS

FOR

ACCOUNTS

Bank maintains the various accounts; each account is different in nature. rules, terms and conditions different account are as under.

Rules Governing 1. PLS Term Deposits are accepted by the bank with sums of not less PLS Term than Rs. 1,000/- from individuals (single and joint), firms Deposit (Proprietorship/Partnership) Ltd. Companies, autonomous corporation, charitable institutions, association educational institutions, local bodies, etc. against the issuance of non-transferable receipts in acknowledgement of the PLS deposits received. 2. The PLS Terms Deposits are accepted for period of 6 month and above. Weightage on the rate of return will be given to deposits of longer maturity. On expiry of the deposit period, the deposit will cease to be eligible for sharing in the profit and loss at the term deposit rate. It will be transferred to overdue PLS Term Deposit Account and the depositor will be advised accordingly. Provided, however, if within a period of one month after the expiry date, the depositor requests for renewal, the PLS term deposit will be renewed for the desired period from the date immediately following the expiry date. In case, the depositor fails to give renewal instructions within the said period the overdue deposit will be eligible for payment of profit at PLS Savings Account rate. 3. PLS Term Deposit Account can be opened either by depositing cash or conversion of an existing interest bearing fixed deposit in which Case the prescribed in the existing rules for encashment of F.D.R. before maturity will not be imposed. 4. The PLS Term Deposit would be eligible for sharing profit/loss with the bank at the rate to be determined by the bank in its sole discretion and the bank's decision in this behalf will be final and binding on the depositors. 5. The PLS Term Deposits will be eligible for participation of profit and loss on the condition that they will not be withdrawn from the bank within a period of less than 6 months. In the event any depositor wishes to withdraw the money earlier than 6 months, he will forfeit his Hailey College of Commerce, University of the Punjab

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right to share profit and be absolved of his obligation to share loss on his deposit for the period the deposit remained with the Bank. PLS term deposit withdrawn after completion of 6 months but before maturity will be eligible for sharing of profit, if any, at the rate determined for PLS Savings Accounts. 6. On the maturity of a PLS Terms Deposit the depositor shall have the option either to withdraw the deposit and the amount of his share of profit, if any, or renew the deposits, with or without the amount of accumulated profit in multiples of Rs. 1,000/-. The depositor will have the option of contributing additional funds in order to make it a round figure, in the multiple of Rs. 1000/7. The bank shall be within its right to invest the funds received in the PLS term deposit account, at if sole discretion, and to make use of the funds to the best of its judgment in any non-interest bearing business it deems fit. 8. Profit and Loss will be distributed on half-yearly basis. Profit and Loss for the Period beyond the closing of the half-year will hot be outright settled at the time of encashment of a term deposit on maturity and the depositor will be asked to leave his/her instructions for the receipt/payment of profit/loss pertaining to the unaccounted for period which will be settled after the closing of the relevant half year. 9. The profit on PLS term deposits as determined by the bank at the end of each half year on the basis of its net working result, shall bedisbursed to the depositors through bank's pay slips/payment order which shall be dispatched to the depositor at his postal address within a reasonable time from the date of close of half yearly book of accounts. 10. The depositor shall be liable to reimburse the bank with the amount of claim, if any, in respect of any losses incurred on the basis of half yearly closing of the books of accounts of the bank. 11. Any change in the address of the depositor should be immediately communicated to the Bank. The Post Office and other agents for delivery shall be considered to be the agents of the constituents for all deliveries of letters, remittances, etc., and no responsibility can be accepted by the bank for delay, non-delivery etc., thereof. 12. The holders of the term deposits must keep the receipt under lock and key. Any loss of receipts must be notified immediately to the issuing branch. In the event of each loss, the Bank would not accept any responsibility for encashment of the receipt if proper intimation of the loss is not communicated to the bank immediately or where it is found Hailey College of Commerce, University of the Punjab

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that no proper safeguard were exercised by the depositor for safe keeping/security of the PLS deposit receipts. 13. The bank reserves the right of refusing to accept from any person deposit in PLS term deposit account without assigning any reason. 14. The bank reserves to itself the right to add or alter any or all of the rules governing PLS term deposit after advertisement in a newspaper or otherwise and such altered or additional rules shall immediately thereafter be deemed to be binding on all the depositors.

Profit and Loss 1. Savings Accounts may be opened on proper introduction with sums not Sharing Saving less than Rs. 100/-such declaration the expiry of minority will be Account Rules calculated and noted in the Pass Book as well as in the ledger. (a) For individuals (Single or joint) (b) For charitable Institutions (c) For provident and other funds of benevolent nature of the local bodies, autonomous corporations, companies, associations, educational institutions, firms etc., and in all other cases where the accounts are to be opened under the orders of a competent Court of Law. No account may be opened in the name of Companies, corporation Associations and firms; The bank does not recognize Trust. (d) Not more than one account may be opened in any one name, but this does not prevent a person from opening more than one account in his or her name for more than one child. (e) For a minor by a guardian. A minor means a person who has not completed the age of 18 years. A natural guardian means a father or if the father be dead a guardian of the minor appointed by will or deed or by a Court competent to appoint guardians under the guardians and ward Act in force in Pakistan. When opening an account on behalf of a minor the depositor would give a declaration as to the correct date of birth of the minor. On receipt of 2. In the absence of a contract to the contrary the credit balance in any account, in the names of two or more persons will be payable to: (a) Both or all of them, the survivor or the survivors of them. OR (b) Either or any one or more of them or the survivors of them. An account so opened will, in the event of death of anyone or more of the account holders, become payable to the survivor or survivors without refHailey College of Commerce, University of the Punjab

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erence to the heirs of the deceased person or persons. In the case of (a) if payments from an account are at anytime forbidden by anyone or more account holders, the amount will only be payable on the discharge of all the account holders or the survivor or survivors of them. 3. The Savings Account is not to be used for purpose of keeping a Current Account and the Bank is empowered to close an account should it have reason to believe that the account holder has used the Saving Account for a purpose for which it was not intended. 4. Any person opening an account will be deemed to have read or to have understood and accepted the PLS Saving Account Rules. 5. Each account will be given a number and account holder/depositor should always quote this number when writing to the Bank regarding their account or when making deposits or withdrawals. All sums to the credit of an account should be accompanied by Pay-in-slip showing the name and number of account to be credited. The entry of the transactions will be verified by the initials of cashier and signatures of an official of the bank, on counterfoil of the pay-in-slip. The depositor should satisfy himself that the transaction is so verified from the counter-foil of the Pay-in-slip. SIGNATURE OF ACCOUNT-HOLDER 6. Every account-holder will be required to give a specimen of his signature for record. Should there be the slightest doubt as to the genuiness of the signature; the Bank is entitled to refuse payment of cheque drawn by the account-holder. ELIGIBILITY FOR SHARING PROFIT/LOSS OF THE BANK 7. PLS Saving Account having a running minimum credit balance of Rs. 100/- would be eligible for sharing profit/loss of the bank the proportion of the profit or loss on PLS Savings Account shall be determined by the bank in its sole discretion and the bank's decision shall be final and binding on the PLS Account-Holder. 8. The bank shall be within its rights to make investment of credit balances/deposits in PLS Savings Accounts in any manner at its sole discretion and to make use of the funds to the best of its judgment in the banking business under the PLS system. 9. PLS Saving Account-holder would undertake to reimburse the bank Hailey College of Commerce, University of the Punjab

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with any claims in respect of losses/ charges on the basis of halfyearly/yearly, closing of the bank's books of account. The bank shall be within its rights to debit the PLS Savings Account for the amounts) of such claims/charges in settlement of business accounts of the bank. WITHDRAWALS 10. Account-holder can only withdraw sums from his account by means of cheques supplied to him by the bank for that particular account. 11. Cheques should be signed as per specimen signature supplied to the bank and any alteration(s) there on must be authenticated by the drawer's full signature. 12. Post-dated and stale cheques shall not be paid. 13. Where the account-holder withdraws the money under 7 days notice, the profit/loss earning products will be computed on monthly minimum balance. However, where such withdrawals are not made even after expiry of the notice period, the profit/loss earning character of the account holder's credit balance shall remain unaffected and the profit/loss would continue to accrue on minimum monthly balance(s) as per the rules. STATEMENTS IMPORTANCE OF ACCOUNT OR PASS BOOK AND ITS

14. Statements of Accounts will be supplied to account holder at periodical intervals where the accounts are mechanized/computerized. Otherwise Pass Book will be issued when accounts are opened. The Pass Book or statements of account will be filled in by the bank and the balance authenticated under initials of an authorized officer. The account holder is requested not to make any entries or marks in the Pass Book or statement of account The Pass Book should be sent to the bank periodically, say once in month, for entries to be made therein. Any discrepancy detected should at once be brought to the notice of the bank. 15. If a Pass Book is lost or spoilt, a charge will be made on account of cost of the fresh Pass Book which will be issued beginning with entries from the date of the last closing. DRAWER'S INSTRUCTION FOR STOP PAYMENTS 16. The bank will register instructions from the drawers, of a cheque to stop its payment, but it can accept no responsibility in case such instructions are inadvertatly over looked. CHEQUES AND OTHER INSTRUMENTS PRESENTED FOR

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COLLECTION AND FOR CREDIT OF ACCOUNTS 17. The bank may accept for collection only cheques and other instruments payable to the account-holder himself at his risk. All cheques and other instruments should be crossed before they are paid in for credit of accounts. Uncleared item though credited in the account Pass Book shall not be drawn against. Even if such items are credited and/ or allowed to be drawn against, the bank shall have a right to debit the customer's account, if these are not realized. 18. The bank will take care to see that the credit and debit entries are correctly recorded in the accounts of the account holders but in case of any error, the bank shall be within its rights to make the correct adjusting entries without notice and recover any amount due from the accountholders. The bank shall not be liable for damage, loss etc., and consequent upon such errors. CHANGE IN ADDRESS 19. Any change in address of the account-holder should be immediately communicated to the bank. The post office and agents for delivery shall be considered agents of the account holders for all deliveries of letters, remittances etc., and no responsibility can be accepted by the book for delay, non-delivery, etc. DISBURSEMENT OF PROFIT/LOSS EARNED/INCURRED ON PLS SAVINGS ACCOUNT 20. The profit/loss earned incurred on PLS Saving Account will be credited/debited as determined by the bank at its sole discretion on the basis of its net working results at the end of each half-year/year, within a reasonable time from the date of the close of half-yearly/yearly books of accounts of the bank under intimation to the account-holders. Calculation of products of PLS Saving Account will be made for each calendar month on the lowest credit balance of an account between the close of business on the 6th day and last day of the month. If, however, the balance is less than Rs. 100/- the product will be "NIL". TRANSFER OF THE ACCOUNT 21. Account may be transferred from one branch to another branch of the bank free of charge without affecting the Profit/Loss accruing position of the account, as the concerning accumulated products on credit balances in such PLS Accounts for unaccounted period would also be transferred to the recipient branch along with the credit balance on the date of transfer. Hailey College of Commerce, University of the Punjab

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CLOSING AN ACCOUNT 22. The account holder wishing to close the account must present the Pass Book and unused cheques to the bank in order to draw the balance amount, in case of account holder wishing to close the account within a period of six months from the date of its opening, a charge of Rs. 5/- on account of cost of Pass Book will be made. ADDITION OR ALTERATION OF ANY OR ALL OF THE RULES 23. The bank reserves to itself the right to add or alter any or all of these rules after advertisement in a newspaper or otherwise and such altered or additional rules shall immediately thereafter be deemed to be binding on all account holders. CREDIT FACILITY 24. No credit facilities will be allowed against the balances in PLS Saving Accounts. THE BANK'S RIGHT TO CLOSE ANY ACCOUNT 25. The bank reserves to itself the right to close, without previous notice, any account which in its opinion is not satisfactory operated upon, or for any other reason whatsoever which it shall not be incumbent on the bank to disclose the account holder. OTHER FORMALITIES The majority of the new customers are introduced either by an existing customer or by bank staff. When the concerned officer is satisfied then he opens the account and gives an account number that will be used in all communications with the bank in regard to the account and when making deposits and withdrawal. Bank has a right not to open an account without assigning any reason to such refusal. The bank can close the account at any time if it is not operated in a satisfactory manner. ISSUANCE OF CHEQUE BOOK When a customer opens an account with the bank, he is provided with cheque book for withdrawals from account. However, the first cheque book is given to the customer only when all the required documents are checked. A cheque book contains ten, twenty five, fifty or hundred leaves. The cheque book also carries a requisition slip for the issuance of the new cheque book. This slip is duly filled and singed by the customer. The signature of the customer is verified by the bank and new cheque book is Hailey College of Commerce, University of the Punjab

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issued to the customer and serial numbers of the cheque are duly entered in the book of the bank. Along with the signature, person should also write his full name & address. Usually only one cheque book is issued at a time, however big concerns who need a number of cheque books at a time, may ask the bank to stock as number of cheque books in their name and to point their name on these cheque books. Bank debits the client’s account for excise duty of Rs.2.50/- per cheque and keeps the cheque book ready for the customer, as on his advice. The officer keeps and maintains the cheque book register Cheque book inventory and cheque books issued are recorded in this register. The account number for which the cheque book is issued and the number of leaves are also recorded in this register when the cheque book issued an entry is passed in the cheque book issue register. In case of loss of cheque book or requisition slip on cheque book the customer has to fill the Form No. 216-B to obtain a new cheque book. THE REQUISITES OF A CHEQUE There is no prescribed form of words or design of a cheque but in order to fulfill the requirements the cheque must have the following: A. It must be in writing B. It must contain an order to pay and addressed a specified bank. C. The order must be unconditional D. The order must direct to pay on demand E. The sum ordered to be paid must be certain. F. The payment should be ordered to be paid to a certain person or to his order or the bearer.

PAYMENT

OF

CHEQUES
In the Allied Bank of Pakistan Limited I learnt how to make payment of a cheque. in fact I done the duty of token clerk mostly but I also worked and participated the procedure followed for the payment of cheques. Actually the customer is required to withdraw its deposits through the cheques out of cheque book issued to him drawn on the branch were he is maintaining the account. The cheques are paid in one of the following ways:A. By cash payment over the counter Hailey College of Commerce, University of the Punjab

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B. By transfer (from one account to an other) C. By collection/clearing Tokens / Before commencement of business, the cashier incharge shall hand over Handling / the stock of tokens (supplied by C. O. K) to the token issuing official Issuance against acknowledgement in the token issue (hand over) Register R-84, indicating therein the number of tokens received. Token issuing official shall count the tokens received, arrange them in serial order in a poker ready for issuance. At the close of the business, all un-issued tokens shall be received back by the cahier incharge, against his initials in the register from the token issuing official. He shall tally the total with the number of tokens issued in the morning by adding the number of tokens received back by him (from customers) and number of tokens pending with the customer (if any). When the quantity of tokens physically held by him agrees with the number of tokens issued in the morning, these shall be placed in the cash safe along with the closing cash of the day. The loss of any token need not to be circulated amount the branches and be treated as local issue to be dealt by branch at its own. The paying cashier will keep a list of numbers of the tokens which have been lost. On presentation of cheque instrument for cash payment a token shall be issued by the token issuing official after scrutinizing its following aspects:1. The cheque/instrument presented relates to the branch and is not crossed. 2. The cheque/instrument is bearer or order, in case it is an order one the payee is known to the branch. 3. The date on the cheque/instrument is in order. The instrument is not undated or post-dated or stale. A cheque is stale or out of date, which is more than six months old on the date of presentation. 4. Amount in words and figures agrees and is absolutely certain. 5. It has been duly signed by drawer i. e. the account holder/issuing branch and is also signed by the payee/bearer. 6. There is no alteration/cutting/over-writing. 7. The cheque/instrument is not mutilated, torn or cancelled. 8. All cancellations and alterations on the cheque instruments have been authenticated by the drawer under his full signature. 9. Crossed cheques/instrument presented by a bank for payment at the Hailey College of Commerce, University of the Punjab

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counter is accompanied by its memo dully signed by authorized person (s) of the presenting bank. 10. In case of telegraphic transfers the payee has signed revenue stamps of adequate value affixed on the receipt, and his signatures have been verified. 11. Cash Payment voucher has been signed: a) By manager and accountant/authorized officer of the branch. b) By the payee on the reverse. 12. In case of demand draft/pay order payee has been identified and has signed on the back of the instrument.
ALLIED BANK OF PAKISTAN LTD. ………………………………...…..Branch Token No…………………………...…….. Date ……………………………...………. Time Token Issued…………………...…... Initial …………………………………...... Time of Payment …………………...……. Cashier’s Initial …………...………...……

After verifying the above points and satisfying that cheque/instrument is apparently in order the token issuing official will affix the rubber stamp on the reverse of the cheque/instrument as per specimen given below. He shall give token No. of the token being issued by him against the cheque, record the date and time of issuance and shall put his initials at the relevant column. At the time of payment, cashier making the payment shall note down the time of payment under his initial:After recording token No., date and time on the back of the cheque, token issuing official shall state in the relevant column. Token No. and Nature of Account, Name of Account through bearer or self and amount on the payment side of the cash book. In case of telegraphic transfer demand draft, pay order and cash payment vouchers relevant head of account, amount and other particulars shall be noted by him. The token made of brass, engraved with bank and branch name and serial number shall be delivered to the bearer of cheque and other instruments ensuring that it is being delivered to the presenter only and in case of any doubt fresh signature of the presenter shall be taken before delivering the taken. Hailey College of Commerce, University of the Punjab

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Scrutiny of the Cheque by Ledger Keeper before its Posting in the Ledger or Account Card.

On completion of formalities referred above the cheque is handed over to the ledger keeper and other instruments to the concerned departments. Ledger keeper will again scrutinize check and verify the points as given below:1. The account on which cheque is drawn is neither closed nor dormant or inoperative. 2. It bears token stamp on the reverse. 3. The cheque is of our bank and the branch. 4. The cheque is out of the cheque book(s) issued. 5. The signature of drawer is there. 6. The account number, title of account is there. 7. Is not un-dated, post-dated, stale or out of date. 8. Payment of the cheque has not been stopped by the drawer. 9. There is no legal bar for the payment of cheque account is not attached, under lien or the account holder is deceased. 10. The funds are available/sufficient to honour the cheque i.e. the amount does not exceed the credit balance of the account (or the un-drawn portion of the sanctioned drawing power in case of cash finance account or current account) having approved running finance facility. 11. Amount in words and figures tallies. 12. No. previous entry in the ledger is un-authenticated. 13. In case it is drawn on account marked as similar account, it should be ensured that the cheque is being posted to the correct account. 14. Endorsement made thereon is prima facie in order. 15. Alternations/mutilations/cuttings/over-writings, (if any) is confirmed by the drawer under his full signatures. 16. In case cheque is presented in transfer delivery, “Transfer Delivery” stamp is affixed. 17. The collecting bank’s discharge is in order. 18. Crossings of other bank (if any) are properly cancelled. 19. Where the cheque has been presented through clearing, it bears crossing and clearing stamps of the same bank with date.

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Posting of Cheques/Other Instruments and Fixation of Stamp as per Nature of Payment

After proper scrutiny the cheque is posted in the ledger/card folio number/sheet number of the account is entered on the top left corner of the cheque and “Pay Cash” or “TRANSFER” stamp as the case may be is affixed on the face of the cheque. The ledger keeper shall sign on the cheque with the narration “Entered” to signify that it has been posted after proper checking and is in order. In case cheques as per given, is “P A S S E D” Manager Accountant transfer another stamp specimen affixed:

Debits to an account against uncleared cheque are not allowed without the authority of the branch manager. The credit slips on local banks shall be retained till receipt of proceeds from them. The credits to the accounts in respect of cheque in clearing shall be posted in the evening on receipt of advices from the main branch (clearing) and withdrawal against such credits will be allowed on the next morning. If payment of a cheque creates an authorized or unauthorized finance or a debit balance is within or excess of the authorized drawing power, then all such cheques be entered in the payment Authority Register (R-No. 65) with full particulars of the cheque, the balance of the account against which they are drawn and the amount of the authorized drawing power and /or uncleared cheques (if any) be presented in register to the manager, who shall write “Pay” or “Return” in the register under his initials. In case of “Return” he shall add the objection under which it is to be dishounoured. The officer incharge Deposits must see by reference to this register that no such cheque is paid without the sanction of the manager. When cheques are retuned for insufficient funds the relative memos must be initialed by the manager / accountant The Officer Incharge Deposits/Accountants/Manager shall again scrutinize the cheque and after satisfying himself that the cheque is in order in all respects he will pass it in the ledger or in the account card for payment under his full signatures. The cheques shall be cancelled in red ink in such a way that signatures of authorized officer cross out the signatures of the drawer. Cheques shall be passed by authorized officers singly or jointly in accordance with the signing/passing powers delegated. The Cheque cancelled/passed for cash payment shall be forwarded to the paying cashier for payment. Hailey College of Commerce, University of the Punjab

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How to Close an The account can be closed by the customer at any point in time. The Account customer is required to submit and application for closing the account. Then the account is closed out and his balance is paid to him. Cheque book is returned back to bank and the officer cancel and the remaining cheques in cheque book.

DORMANT

AND

INOPERATIVE ACCOUNTS
During my internship training in the Allied Bank of Pakistan Limited I found that the accounts are classified into two categories in regard with operation, which are explained as under: The current account in which there has been no operations for the last six months and the savings account which has not been operated for a period of one year are classified as dormant accounts. Identification of such accounts will be done by the Manager himself in June and December each year. A stamp “CARE ACCOUNT DORMANT FROM …………… (DATE)” Be affixed at the prominent place on the respective folio of the account as a precaution. The accounts so identified shall continue to be maintained in the same ledger(s). The operation in the accounts, classified as “Dormant Accounts” or of an account having symptom of a dormant account. Should be supervised by two officers (even for small amounts) and one of them must be Manager of the Branch. If a cheque drawn on a current account not operated for six months or a saving bank account not operated for one year is presented before the account has been classified/branched as dormant in June/December; the cheque should be given the same treatment as if it were drawn on a dormant account and all precautions detailed above shall be taken before its payment. Current accounts which have not been operated for two years and savings accounts for three years shall be classified as inoperative accounts. All these accounts shall be closed in their existing ledgers and transferred to separate current/savings account inoperative ledgers by means of usual “Debit” and “Credit” vouncers, the account will be closed after the final summation in the ledger and the remarks, “Account transferred to Inoperative Current/Savings Account Ledger.” Folio number should be written in bold letters under the manager’s full signatures. As a precaution, remarks should also be given on the respective specimen signature cards, ledger index/ index register (against the title of the account) and on the

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account opening form. While transacting such account in the now ledger, reference of old ledger folio, should be made and all particulars of the accounts, including special instructions if any must be brought forward under the authentication of the manager/accountant. Inoperative accounts ledgers (current or savings) will remain in the custody of the manager, periodical balancing will be done in a usual manner, interest and profit accrued to the savings accounts will be paid as usual. In case of a dormant account or inoperative account, it is preferable to insist t that the account holder should come personally to encash big amount cheque or to receive fresh cheque book. No loose cheque is to be issued all withdrawals from such accounts should only be allowed under the direct supervision of the manager. Revival of the account to the original ledger should only be done at the customers request after the manager has interviewed the customer personally. During the interview queries should be raised regarding his balance, date and time when the account was opened, name and address of the person who introduced the account, initial deposit, when the account was last operated, reason of non-operation etc. it should be ensured that only pertinent questions are raised in a pleasant manner without hurting the feelings of the customer. The account will be transferred to the respective operative ledger by passing all the relative vouchers which should be jointly signed by the manager the accountant. A return of outstanding for 10 years or more reckoned from the last date of operation in respect of current and saving account and from the date of issue in case of Government and bank drafts, payment order etc., will be submitted every year as on 31st December on the prescribed Performa to Central Office.

PROCEDURE

FOR

ADVANCING LOAN
I also worked in the credit department, where I learnt about credit applications. In this regard the bank adopts the following procedure in order to grant a loan. A customer applies for a loan to the manager, who says him to give details of his property. The details of the proposal and the photocopies of the document to the title of property are sent to the legal advisor of bank. The legal advisor gives his legal opinion upon the documents. The branch manager, in the light of the opinion received from the legal advisor, discusses the proposal with the advancing manager whether to give or not the loan to the applicant. If manager allows Hailey College of Commerce, University of the Punjab

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granting the loan all the documents along with request letter are sent to regional office for approval. In the regional office the proposal is analyzed and if the office is satisfied a consent letter prepared which is signed by the regional controller credit. This letter is sent to the branch manager. After receiving it the manager finance reviews the consent letter, and prepares a DAC (Disbursement Authorization Certificate). DAC can be made only for people who have a bank account. The following documentation is made for loan. 1. An application or request letter for loan by the customer 2. Legal opinion of the legal advisor of the bank (for the title deeds) 3. Consent letter from the regional office 4. Vetting Certificate (includes consent No., Facility whether fund based or no-fund based, addresses etc.) 5. Valuation of property any consultant or any panel of consultants approved by State Bank of Pakistan 6. Original title deed or sale deed 7. Affidavit 8. General power of attorney (made by advocate for the person/owner taking loan for the company) 9. Mortgage deed 10. Mutation document made 11. Verification of the property by the bank from the competent authority 12. Hypothecation of stock certificate (Running is to be given against 75% margin of stock) 13. IB-25R Letter of hypothecation (duly signed by the party) 14. IB-12 , DP Note/Promissory Note (Bank prepared itself, duly signed by the party, revenue stamps of Rs. 100 put on it) 15. IB-6R Agreement of finance mark up (Contract with party for taking mark up on quarterly basis) 16. IB-24 (used for title deed) 17. IB-29 (used for guarantee from party) 18. IB-26 (used for pledge of stock, margin is different for different goods) 19. No. IB-28 (used for lien) etc. After that Loan is sanctioned to the party fulfilling all the terms and Hailey College of Commerce, University of the Punjab

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conditions for the purpose. The procedure given above is for both short and long term loans. The thing which is most important here is that the banks first keeps in mind and analyzes according to the rules prudential regulations of the State Bank of Pakistan.

CHECK LIST

FOR

LOAN
While processing the proposal for advance/loan the following documents should be attached with the proposals:1) In Respect of Applicant i. Sole Proprietorship Concern a) Declaration of Sole Proprietorship b) Bio-data (as per proforma enclosed)

ii. Partnership Concern a) Copy of Partnership Concern b) Copy of Letter of Registration of the Partnership c) Bio-data partners (as per proforma enclosed) iii. Limited Company a) Copy of Memorandum and Article of Association b) Copy of Certificate of Incorporation c) Copy of Certificate of Commencement of Business (not required in case of Private Limited Company) d) Bio-data of the Current Management Officers (Stating Educational Backgrounds, Business Experience, Management Experience, Technical Background & Others Relevant Data) e) Resolution of the Board of Directors Authorizing the Management to obtain loan from the Bank (purpose to be specified) f) Bio-data of Directors (as per proforma enclosed) 2) In Respect of Land of Project i. Copy of Site Plan Hailey College of Commerce, University of the Punjab

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ii. Copy of Lay Out Plan for construction of the project, approved by the competent authority iii. Copy of Documents evidencing Purchase & Value of Land iv. Non-encumbrance Certificate v. Valuation Certificate from an approved Architect or Bank’s Engineer vi. Copy of Tax Receipt for the current year vii. Copy of the purchase Contract/Offer/Sale Agreement viii. Copy of Fard Jamabandi ix. Embarkation Certificate (if required) x. Legal Opinion from Legal Advisor of the Bank xi. In Respect of Building of the Project xii. Copy of Building Plan duly approved by the Competent Authority indicating already constructed and the area to be constructed alongwith item wise area and type of construction. xiii. Valuation Certificate in respect of already constructed area & Certificate of Ownership. xiv. Estimate of cost of construction of the area to be constructed, made/done by approved Architect or Bank’s Engineer showing description of Building, type of construction, rate per square fit./meter and total cost. xv. In case of project is to be located in rented premises, copy of the Lease Agreement covering entire period of loan should be provided. The lease Agreement must explicitly permit establishment of the project in the hired premises. In such a case, copies of the Title Deeds of the property offered as collateral/additional security should also be provided. xvi. In case the building is to be constructed by contractor, Copy of Contract Agreement should be provided. xvii. In Respect of Machinery xviii. List of Existing Machinery & its present value/condition in case of on-going projects. Also valuation certificate from a reputable surveyor, containing, showing Brand, Serial Numbers, Description, and Year & Cost of Acquisition with present book value.

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xix. Evidence of Ownership and Owner’s Certificate that such equipment are not encumbered. xx. At least three competitive quotations as per following patterns, from manufacturer/supplier of repute (international quotations on C & F basis in case of machinery proposed to be imported) indicating specification of machinery, item-wise prices, delivery, period alongwith existing imported machinery, If any, & its book value. xxi. Name of Manufacturer/Supplied & Addresses xxii. Date of Quotation made xxiii. Telephone Numbers xxiv. Mode of payment/Date of delivery (in case of local machinery, 25% as advance, 60% on arrival of machinery at project site and 15% on successful trial runs). xxv. NAME OF MANUFACTURE R 1 xxvi. Machinery Layout Plan xxvii. Process Flow Chart 3) Other Document to be Attached with the Proposal i. Specified Application Form duly filled in, signed and verified (each column should be properly filled in and if any column is not applicable, mention the word N. A.). ii. Credit Reports in respect of each sponsor, their Sister Concerns from their previous Bankers. iii. Credit Reports from other Banks/DFIs in respect of each company/firm, the partners/directors and their sister concerns. iv. Bank Manager’s Report on the creditability/market reputation of the applicants. v. Site visit report by the Bank’s Manager. vi. Form 343 duly filled in and signed. vii. Form XXIX duly attested. Hailey College of Commerce, University of the Punjab DESCRIPTIO N OF MACHINERY 2 NO. OF ITEMS PRIC E PER UNIT 4 TOTAL PRICE

3

5

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viii. Audited Financial Statements for the past three years (Profit & Loss Statement and Balance Sheet together with supporting schedule). This is not applicable for new projects. ix. Audited Financial Statements for the past three years (Profit & Loss Account/Balance Sheet) in respect of sister concern of the applicants’ alongwith other details. x. Provincial Government permission in respect of location of project, if required. xi. Approval of Federal Government/Investment promotion Bureau for industries included in the list of specified industries. xii. Copy of Marketing Agreement, Purchase Order, Sale Contract, etc., if any. xiii. Legal opinion from legal advisor of the Bank confirming that the property can be mortgaged as security against loan and all the documents are in order. xiv. Letter from Wapda Authority in writing availability of power in the area xv. Clearance letter from environment condition. xvi. Statement of Account. xvii. Limit Application Form. xviii. A certificate from manager regarding verification of worth of application. xix. The supporting documents for price of raw material & sales prices. xx. Copy of Feasibility Report as per details given below. xxi. Copies of National Identity Cards of each Partners/Directors, duly attested. xxii. Any other relevant documents required for processing the proposals. concerned authority regarding

PROCESSING

OF THE

LIMIT PROPOSALS

AND COMPLETION OF

FORMALITIES

I would like to mention that a strict audit system is followed by the Allied Bank of Pakistan Limited not only for general banking but also for the credit department. in this regard instruction are issued to the branches for Hailey College of Commerce, University of the Punjab

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good banking and in order to chances of avoid bad debts as the given circular is issued to the braches which starts with the utmost care is being exercised by the branches in processing of the limit proposals either fund based or non fund based. 1) Officials singing the proposals and other attached documents must mention their identifications/names as required vide circular No. p.inst/92/45 dated 29.4.92. 2) Form No, 151 has been obtained and is not held un-dated. 3) Extracts/reports from the inspection reports are attached with the proposals in the cases of renewal of the limits. 4) Signature of the party/borrower on each page of the loan application form No. 151 and small loan application are obtained and verified by the Manager. 5) Letter of pledge in case of LC limit is taken to safeguard the interest of the bank in case of forced FIM. 6) Confidential opinion from the existing/ previous bankers of the party is attached with the fresh cases. 7) The analysis of the Balance Sheet is carried out at branch level and the Balance Sheet is forwarded to the circle office that the same satisfies the requirement of Prudential Regulations or not. In no case, the violation of these regulations is required to be committed. 8) The branch should hold on record the CIB clearance of the party where the exposure of the bank either fund based or non fund based is Rs. 0.500 Million or above. 9) Where the renewal proposals are submitted, the same should be duly supported with valid justifications. 10)In fresh cases, the track record or the previous experience of the dealing with the party is of vital importance which is disclosed. 11)Detail of business given by the party through their own/allied account is mentioned. 12)Stock reports held by the branches are to be dated and fulfill the marginal requirements. 13)Realizable value certificate of the property is to be attached with the proposal. 14)Netting of charge on property is not confirmed in case of collateral security held by way of equitable mortgage.

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15)Where has been held, the copy of authorization/disbursement authorization certificate be attached with the proposal for the renewal of the limits. 16)Where the property is a constructed unit, the attested copy of the site plan should be held with the branch. 17)The copy of the previous sanction in case of the renewal of the limit be attached with each set of the proposal, which should be sent in quadruplicate. 18)No column of the proposal be left blank. 19)In case property is offered as security, the same should be in same occupation in self occupation by the owner to which effect a certificate from the branch manager should accompany. 20)It should be confirmed in the remarks of the manager that up to date stock reports are held in case stocks are hypothecated. 21)It should be confirmed that the insurance of the stock and property is valid. 22)In case the party is availing L/C (DA) facility than in the event of renewal of the limit, a statement showing the detail of adjustment of DA L/Cs is sent. 23)In case of FAFEB limit, the statement of the adjustment of export bills should be accompanied. 24)In case the running finance limit is not adjusted on its expiry the confirmation should always be sent that up to date markup has been recovered from the party. 25)Revised rate of markup on finance is Rs. 17.50% which should be applied. 26)L/C on D/A basis is to be monitored by Zonal Chief, personally. 27) In case of equitable/registered mortgage it is desired that all the legal documents i.e. Mutation, nothing of charge with concerned department, Furd of property, (PTI) of excise and taxation department, be got authenticated/reconfirmed, from the issuing department. 28)Before obtaining DAC it is desired that all loan documents be got vetted by bank’s legal advisors and certificate confirming completion of documents may be obtained from him, which should accompany the DAC.

CASH MANAGEMENT
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The most important department of Allied Bank of Pakistan Limited which deals in money (receiving deposits at lower rates and lend them out at higher rates of interest). This department also called as Chest Department and manager of it is called Cash Manager or Chest Manager. In those branches where this department is not separately existed, the branch manager performs the duties of the Chest Manager. The excess cash (More than its insured limit by the insurance company) of the branches of the region is collected by the main branch. The main branch is also bound to send its excess cash (more than its insured limit) to the State Bank of Pakistan. No branch can have cash its safe more than its insurance at any time at the time of closing cash, if it is so the manager will be responsible (not the insurance company) whether or not he informed to the regional office (exception to the limit which is insured for the day). New Notes and Prize Bonds are also part and parcel of the Cash Management. Keys of the Safe lockers are with the three authorized persons each one of them is responsible for cash as at the time of closing the cash the officers including Cash officer presented and lock the safe after counting and scrutinize the cash. The cash officer maintain its daily cash book with specification of notes (Bonds are also recorded in the books in relation with cash) and other vouchers, after being satisfied the manager authenticates the books and vouchers regarding cash with stamp and signature. at the end I would like to conclude that the cash management is being done in the Allied Bank of Pakistan Limited very effectively.

UTILITY BILLS COLLECTION
I worked in the utility bills collection department as the Allied Bank of Pakistan collects utility bills on behalf of WAPDA, Sui Gas Companies, and Pakistan Telecommunication Corporation Limited by putting the stamp on the utility bills “Paid”, Date of payment, Signature of the officer receiving the utility bills. After receiving utility bills a list is made on the form which is called Bills scroll form. One copy of the scroll is with the bank for evidence whereas the original copy with the receipt of the bills is sent to the billing department of the respective corporation. The bank charge commission on the bills.

Hailey College of Commerce, University of the Punjab

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