50852002 abl-study-final-doc-12-04-2006

Branch OperationsCase Study

Document ID: ABL Branch Study

Proprietary and Confidential Information

Allied Bank LimitedLahore, Pakistan

By

Ibrahim Software

Document & Data Control

1. Project Information

Customer: Allied Bank Limited

Project: Typical Branch Operations Study

2. Document Information

Name: ABL Branch Study

Version: 1.0

Author(s): Sohail Aziz, Ijaz Ajmal, Nauman-ul-Haq

Approver(s): Mujahid Ali

Creation Date: 7th April 2006

3. Revision History

Author Date Version Description

ABL Typical Branch Operations Study

Table of Contents

Overview..............................................................................................................................5

Facilities visited..................................................................................................................5

Organization Structure.....................................................................................................6

1. General banking.....................................................................................................7

1.1 Account Opening Formalities...............................................................................7

1.2 Account Opening & Maintenance Process..........................................................71.2.1 Account Types...................................................................................................................................7

1.2.2 Initial Deposit Limit...........................................................................................................................7

1.2.3 Account Opening Forms (Package)...................................................................................................8

1.3 ATM Card Issuance............................................................................................20

1.4 Cash Deposit.........................................................................................................21

1.5 Cash Withdrawal.................................................................................................231.5.1 Cheque Dishonor..............................................................................................................................24

1.6 Physical Cash Management................................................................................251.6.1 Cash Management at Branch...........................................................................................................25

1.6.2 Cash Transfer...................................................................................................................................26

1.6.3 Cash Management at Main Branch..................................................................................................27

1.6.4 NIFT Operations..............................................................................................................................28

1.7 Bills........................................................................................................................291.7.1 Demand Draft...................................................................................................................................29

1.7.2 Pay Order.........................................................................................................................................33

1.7.3 DAC (Deposit at Call)......................................................................................................................34

1.7.4 Rupees Travelers Cheque (RTC).....................................................................................................35

1.7.5 Telegraphic Transfer (TT) / Mail Transfer (MT).............................................................................35

1.8 Clearing................................................................................................................361.8.1 Local Clearing..................................................................................................................................36

1.8.2 Inter City Clearing...........................................................................................................................39

1.9 Outward / Inward Bills for Collection (OBC/IBC)..........................................40

Ibrahim Fibres Limited 1 of 101


1.9.1 OBC / IBC........................................................................................................................................40

1.10 Transfers...............................................................................................................42

1.11 Online Transactions.............................................................................................42

1.12 Term Deposit........................................................................................................451.12.1 SNDR..........................................................................................................................................45

1.12.2 PLS Based Term Deposit Receipt...............................................................................................46

1.12.3 Premium plus Account................................................................................................................46

1.12.4 Allied Profit Plus.........................................................................................................................48

1.12.5 Premium Term Deposit...............................................................................................................48

1.13 Inter Branch Transactions (Pak Account)........................................................48

1.14 ATM Operations..................................................................................................49

1.15 Locker Operations...............................................................................................51

1.16 Utility Bills............................................................................................................54

1.17 Prize Bonds...........................................................................................................55

1.18 General Accounts.................................................................................................561.18.1 Sundry Account...........................................................................................................................56

1.19 General Processes................................................................................................571.19.1 Daily Vouchers............................................................................................................................57

1.19.2 Advance Deposit and Advance Rent...........................................................................................57

1.19.3 Executive Visits...........................................................................................................................58

1.19.4 Peon Book...................................................................................................................................58

1.19.5 Stamps in Hand...........................................................................................................................58

1.19.6 Inward / Outward Dak.................................................................................................................58

1.19.7 Book of instructions....................................................................................................................59

1.19.8 Online List of Branches and Controlling Offices........................................................................59

1.19.9 Circular’s Index...........................................................................................................................59

1.19.10 Office Orders...............................................................................................................................60

1.19.11 Inter Branch Signature Book (IBS/AS).......................................................................................60

1.19.12 Keys Handling.............................................................................................................................60

1.19.13 Inventory Management...............................................................................................................61

1.19.14 Fixed Assets................................................................................................................................62



1.19.15 Attendance Management.............................................................................................................62

1.19.16 Expenses......................................................................................................................................63

2 Finances................................................................................................................64

2.1 Advances...............................................................................................................65

2.2 Imports..................................................................................................................662.2.1 L.C Opening Process........................................................................................................................66

2.2.2 L.C Processing.................................................................................................................................66

2.3 Exports..................................................................................................................672.3.1 Export Process..................................................................................................................................67

2.4 Credit Application Package................................................................................682.4.1 Exposure Summary..........................................................................................................................69

2.4.2 Facility Summary.............................................................................................................................69

2.4.3 Sanction Advice...............................................................................................................................69

2.4.4 Basic Information Report (BIR)......................................................................................................69

2.5 Credit Approval...................................................................................................742.5.1 Security Type Descriptions..............................................................................................................76

2.6 Credit Administration Department (CAD).......................................................792.6.1 Disbursement Authorization Certificate (DAC) Issuance................................................................79

2.6.2 Security Document Management.....................................................................................................80

2.6.3 MIS Reporting..................................................................................................................................81

2.6.4 Vigilance Officer..............................................................................................................................82

3 Home Remittance Cell (HRC)............................................................................84

3.1 Remittances Processing.......................................................................................84

3.2 MIS Reporting.....................................................................................................85

4 Central Processing...............................................................................................87

4.1 Nostro Account Reconciliation...........................................................................87

4.2 Pak Account Reconciliation................................................................................89

4.3 Allied Bank Rupee Travelers Cheque................................................................89



5 Alternate Delivery Channels...............................................................................90

5.1 ATM Card Generation........................................................................................90

5.2 Call Center...........................................................................................................91

5.3 SWIFT..................................................................................................................92

6 Special Asset Management (SAM).....................................................................94

7 Manual Registers.................................................................................................95



OverviewThis document is based upon the study conducted to analyze the business processes and

practices being followed at a typical branch of Allied Bank. We have taken Allied Bank’s

Kashmir Road Branch as a “model branch” and have tried to cover maximum areas and

functions which exist within daily routine of Branch Operations.

Purpose of this study was to go through the existing business processes to identify the

room for improvements and Business Process re-engineering with the use of Information

Technology and specifically software systems e.g. introduction of workflows, integration

of information and centralization of database

Facilities visiteda. Kashmir Road Branch, Lahore

b. Nappier Road Branch, Lahore

c. CAD Office, Upper Mall, Lahore

d. FI, Cash Management, Trade Tower, Karachi

e. Central Processing (ABRTC, Reconciliation),Trade Tower, Karachi

f. ADC (SWIFT Center, ATM, Call Center),Central Office, Karachi

g. HRC, Saima Trade Tower, Karachi



Organization Structure



1. General banking

1.1 Account Opening Formalities

To open an account, different set of documents is required, depending upon type of

account. For example, individuals and joint accounts require a valid Computerized

National Identity Card (CNIC) or passport to open an account. An introducer is required,

preferably from the same branch / bank to get a new account opened.

1.2 Account Opening & Maintenance Process

1.2.1 Account Types

The main accounts types in ABL are

In Pak Rupee

i. PLS Saving

ii. Current

iii. Premium Plus

iv. Term Account

In Foreign Currency

i. Saving

ii. Current

iii. Term Account

Foreign currency accounts can only be opened in US$, JPY, GBP and Euro.

1.2.2 Initial Deposit Limit

a. Account opening is considered as non-financial information in system; this can be

opened without even a single rupee. There is no initial deposit limit for account

opening.

b. As a matter of general practice, an initial deposit of Rs.500 is required for opening a

new account. However special accounts of Zakat Mustahqeen, widows etc can be

opened with Rs.100.



c. Initial deposit limit for foreign currency account is US $1,000. or equal amount in any

other currency.

Possible Improvements:

a. System should help in enforcement of initial deposit limit at the time of opening the

account, except for the accounts used by branch for its own certain requirements like

collection account etc.

b. Due to lower initial deposit limit, this is an observation of bank staff that those people

approach to get the account opened, who are not entertained by other banks due to

higher initial deposit limit. Mechanism needs to be defined to encourage the higher

initial deposit limit. As an example ABN AMRO does not provide cheque books to

the accounts holders having less then Rs.100,000 as an initial deposit at opening the

account. They encourage using ATM to small account holders.

1.2.3 Account Opening Forms (Package)

The account opening application package contains following forms in it:

a. Application Form (same for all types of accounts)

b. Signature Card(s)

c. ATM Form

d. KYC Form for Personal Accounts

e. KYC Form for Company Accounts

Account opening forms are physically placed in binder containing 50 to 70 forms and are

stored in strong room for the purpose of record, till undefined period. Proper inventory

management is not in place to handle this record.


a. Lot of redundancy of information is there in different forms being used to collect

information. These forms should be made simple and more informative

b. There should be separate forms for Personal and Company Accounts



c. Proper Inventory Management should be introduced for maintaining the record of

account opening forms at branches.

Information in the main application form is as follows:

1.2.3.1 Account Number

a. Account number is mandatory and comprises of following information:

CC-TTT-NNNN-X

Currency-Type-Number-Check Digit

Different currency codes and separate TT for each currency and type of accounts are

defined in UniBank

b. “Account Opening/Closing Register” is used to record all accounts opened and

closed in branch. This register is audited by the auditors to verify the account opening

formalities.

c. “FC Account Opening/Closing Register” is used to record all accounts opened and

closed in branch.

d. System doesn’t provide next available account number, user have to check it

manually so that no number is skipped in between. A list of next 100 account

numbers along with “check digit” is maintained manually to cover this shortcoming

of system. This is applicable to both local and foreign currency accounts.


a. In account numbering it is possible to have same account number for different

branches. It is suggested that account number should be unique within the bank, so

that there should be no issue, even in case if certain branches are merged together.

b. Also needs to devise a mechanism to eliminate multiple accounts of a single customer

of same type in a branch(s).

1.2.3.2 Photograph

a. As per current practice, photograph is required for identification of customer who

can’t sign and use thumb impression or customers whose signatures are simple and

can easily be copied.



b. Photograph is pasted on SS Card and account opening form. SS Card is scanned for

usage.


a. System should have the provision to store photograph for customers / account

holder(s).

b. Biometrics scan of “thumb impression” should also be there so that identification of

client can be made within the centralized customer database. This technology is also

required as photographs of account holders become old dated, because no mechanism

is there to update photographs.

c. Customer should be encouraged to submit photographs. There should be some

mechanism to keep these photographs updated in the system.

1.2.3.3 Account Major Information (Account Title, NIC, Address)

a. Customer Name / Title information is mandatory in the system. There is fixed coding

scheme defined for Occupation or Business (Economic Sector, Line of Business).

Although this information is defined in the system but it is not being followed

properly by branches.


a. Economic Sector, line of business usage should be properly conveyed to the branches.

Its usage can also be made mandatory.

b. Existing system does not have the provision to record more than one NIC number,

phone and address (either for business or home address).

c. System should provide a query to search account holder on the basis of CNIC and

Biometrics.

d. Multiple accounts of same type can be opened with the same CNIC. System should

prompt when same CNIC exists in database.



1.2.3.4 Minor’s information

a. For minor’s information, date of birth is mandatory for account opening. This can be

verified from B-Form, Birth certificate, matriculation certificate, passport or any one

of these documents. Father’s or Mother’s NIC is required for account opening and

can also be fed in the system.

b. When the minor reaches the age of 18, the account is closed for minor and new

account is opened up. The general practice is that branch people mention the maturity

date on signature card. There is no information of minor account in the system.


a. There should be some option in the system to prompt or restrict user from withdrawal

when the minor reaches the age of 18, so that he/she can be asked to operate the

account on his / her own authority and the status of account can be updated

accordingly.

b. System should provide information on the basis of account type.

1.2.3.5 Operating Instructions

a. This information is used to define the operational authority of the account, weather it

can be operated singly, jointly, either or survivor etc. System does not have the

provision to store this information.

b. In general practice, these instructions are written on SS Card (Specimen Signature

Card) so that these can be referred at the time of withdrawal transactions.


a. Operating instructions should be properly parameterized in new system for an online

referral to account details at counters for proper their implementation.

1.2.3.6 Zakat Deductions

a. There are two options for the customer:

i. Allows bank to deduct Zakat

ii. Customer submits an affidavit that he/she will pay Zakat by himself / herself.



b. Zakat deduction and computation feature is available in system for PLS saving

accounts and PPA operational account only. But the return submitted to SBP, routed

through COK is prepared manually.


System should cater computation and deduction of Zakat from all applicable accounts.

Moreover the reporting requirements of SBP (product wise deduction of Zakat) should be

generated through system.

1.2.3.7 Address of Contact Person / Next of Kin Information

a. This information is gathered to ascertain the whereabouts of client. Incase of death of

account holder the claimer can claim up to Rs.30,000 by submitting an affidavit along

with other documents like death certificate. In case amount is above Rs.30,000,

succession certificate is also required along with other requirements.

Possible Improvement:

a. Next of kin information should be available in the system as currently manual form is

used for reference in case of any such requirement.

1.2.3.8 Special Instructions

a. There could be certain instructions from account holder that needs to be followed

while operating an account for example, if the Cheque amount is more then Rs.25,

000, then NIC should be taken from the drawer.

b. This information is hand written on SS Card and scanned for online referral, while

operating account.


a. Special instructions should be properly parameterized in the new system for an online

referral to account details at counters for their proper implementation.

b. Special instructions and operating instructions should be placed in a sequence on

application form.



1.2.3.9 Specimen Signature Card

a. For scanning of signature cards, scanners are available at all branches. Cards are

scanned and made available at the terminals for withdrawal so that teller can verify

the signatures. Multiple cards against one account can be stored.

b. Cash Deposit in-charge is responsible for scanning and record keeping.

c. In addition to the signature following additional information, if required, is written /

pasted on it.

i. Minor’s information

ii. Operating Instructions

iii. Special Instructions

iv. Photograph

e. System provides the facility to change the SS Card on request from client.

1.2.3.10 Introducer

a. Introducer should have minimum one year old active account with the bank.

b. Verification is normally done through the client as he/she is asked to get it verified

from the respective branch of that introducer.

c. Introducer is only responsible for the genuineness of the client identity and address

information. In special cases introducer can be from other bank as well and the person

has to get his signature verified from that branch.


a. System should store information of introducer

b. Account opening date and other information of Introducer (if he/she is from other

branch) should be available from new system for verification on request.

c. Letter of thanks should be automatically printed or emailed from system. System

should keep track of the status of posting of letters.

1.2.3.11 Authorized Personnel Information

a. In case of personal account, this information is duplicated on the form where as for

other accounts directors or authorized personnel information is stored




a. The information regarding the authorized persons should be available in new system.

System should also cater partners, sole proprietor or director’s information.

1.2.3.12 Terms & Conditions


a. System should help to identify / restrict the user to the clause 5 “mentioned on form”

that is “Only one account in a particular type can be opened in the same name within

same branch.

b. This is also important in ref to answer queries from different investigation agencies

e.g. NAB, which is interested to know the accounts opened against a given NIC.

1.2.3.13 Know Your Customer

a. There are two Performa’s available for KYC:

i. For Personal / Individuals Accounts (annexure A)

ii. For Company / Corporate Account (Annexure B)

b. Know Your Customer Form is an interview based Performa. It is mandatory and its

filling is audited by the audit department.

c. KYC form includes information of customer accounts with banks other than ABL.

d. System currently has one flag, which is to be enabled to indicate that all the KYC

information is captured manually


a. This information can be made as part of main form, as most of the information is

already there, while missing fields can be incorporated within main form.

b. Signature should be made required for this, which can help in making information

authentic.

c. KYC information should be fed in the system.

d. KYC form should contain information of customer’s other accounts in other branches

of ABL.



e. In general practice, the form is filled by the bank staff on their own rather than asking

the account holder.

1.2.3.14 Cheque Book Issuance

a. Separate cheque book is issued for each type of account (Pak Rupee/Foreign

currency)

b. In normal procedure, cheque book is not issued at the time of opening of account. It is

provided later and a separate request form is used for this purpose.

c. Entries are made into “Cheque Books Issuance” manual register with

acknowledgement from receiver.

d. There are two options to get the cheque book issued:

i. In manual procedure, a hand written request is launched to COK, mentioning the

account numbers and Title of Account against which cheque book is required.

NIFT send these cheque books directly to branches after completing the

procedure with stationary wing at COK.

ii. The second option introduced recently is to raise the requisition through UniBank.

This requisition is received by Inventory department at COK and the cheque

books are then forwarded to respective branch through NIFT.

e. System maintains the records of last three cheque book series. If a cheque is

presented from a cheque book which is closed, then one active cheque book is closed

and related cheque book is activated by consulting the “cheque book register” from

where start cheque number and number of leaf information are taken.

f. To cancel multiple cheques within one cheque book, there is no range option

available to select multiple cheques; user has to do it one by one leaf.


a. System should provide the track of authorized person responsible for issuance of

cheque book.

b. System should keep track of all received and issued cheque books.

c. The instructions on the requisition slip should be compared with other banks and

should be standardized.



d. All the cheques not presented should be available for withdrawal in new system

1.2.3.15 Profit Calculations

a. In PLS A/C, profit provisioning is done monthly on projected rates, decided at the

start of the periods (starting from Jan & July).

b. Profit is credited to the accounts periodically at the rate decided by the Bank. There

may be a difference between the projected and actual profit rates.

c. Withholding tax (i.e. 10%) is deducted from the profit after it is credited to accounts.

d. For PLS saving accounts profit calculation is made on the minimum balance available

from 7th to end of each month. In case Account is closed before six months then the

client can claim the profit but it is generally not been claimed.


a. System should provide an inquiry on profit provisioned against accounts.

b. Pay order of deducted withholding tax amount should also be generated by system.

Tax chalan of withholding tax should also be auto generated.

1.2.3.16 Dormant and Inactive Accounts

a. If the account is not operative up till six months then it becomes Dormant. If the

account is not operative for 2 years its status is converted to “Inactive”.

b. Transactions in Dormant/Inactive accounts are accepted in system by use of certain

level (authority).

c. Both the statuses can be reverted back to “Active”. For this an application is required

from the account holder to complete the process.


a. System should provide reporting on dormant and inactive accounts.

b. After certain period, Zero balance accounts are automatically closed by UniBank.

Staff at branches is not very much aware of the process followed by the software in

this regard.



c. In general practice, if the account is dormant then the banker does not contact the

client. There should be a mechanism to inform customer in these cases.

1.2.3.17 Account Closing Process

a. To close an A/C, a written application is required along with the deduction / charges

of Rs.250.

b. Un-used leaves of cheque books need to be returned by the account holder. People

usually withdraw the entire amount and do not apply to close the account.

c. Account closing information is also updated in “Account Opening Register”

1.2.3.18 Deduction on Minimum Balance

A monthly deduction of Rs.50 is made from the accounts for maintaining average balance

less then Rs.10,000. This is done through the software and is not applicable on certain

accounts e.g. salaried, widows, pensioners and government employee’s accounts.

Following table shows picture of the data captured on account opening forms (package)

and incorporation of this information in existing system:

Account Opening Application Fields StatusBranch Code Date Account Number Term Deposit Number Type of Accounts Pak. Rupees Account Foreign Currency Account Currency Particulars of AccountsTitle of Account Initial Deposit N.I.C / Passport Number Occupation / Business Business Address Account Opening Application Fields Residence Address National Tax Number Tel (Off.) Fax



Tel (Res.) Mobile E-mail Particulars of Term DepositAmount Tendered for Term Deposit of Period Days Months Years Roll over for same period With / Without Profit Instructions for disbursement of Profit (Monthly, Quarterly, Half Yearly, Yearly, On Maturity)Minor Info Date of Birth of Minor Date of Attaining Maturity Name of Guardian Operating Instructions The Account shall be Operated by Singly / Jointly Either or Survivor / any one singly Zakat Deduction Yes / No Address of Contact Person / Next of Kin Name Address Telephone No. Special Instructions Other Bank Services to be usedOn-line banking Facilities ATM / Debit Card Credit Card Safe Deposit Lockers Bank Account Statement (Monthly, Quarterly etc) IntroducerSignature Account No. Branch Banks Name Address NIC No. Tel (Off.) Tel (Res.)



Mobile number E-mail Nature of Account (Individual, Partner Ship, etc.) Personal Info of Authorized Persons to operate account Name S/O, D/O, W/O NIC / Passport No. Date of Birth Nationality / Resident of Occupation / Business Name of Employer Signature / Thumb Impression Cheque book / Term Deposit Receipt Acknowledgement Received Cheque book Received Term Deposit Receipt No. Date Customer Signature Account Opening Authorized by Signature Name IBS No. Cheque Book Issued Cheque Book No. From Cheque Book No. To Authorized Officer’s Signature Term Deposit Receipt Issued Term Deposit Receipt No. Dated Authorized Officer’s Signature Acknowledgement Name Signature of Bank Official Customer’s Signature Right Thumb Impression Left Thumb Impression Allied Cash +First Name Sur Name Mother’s Maiden Name / Key Word Card #



1.3 ATM Card Issuance

ATM issuance procedure contains following steps:

a. Customer fills in the additional Allied Cash + application Form. Except “mother

name” or “key word” all the information on this form is redundant to main account

opening form.(For ATM Card Generation Process, please refer to topic 4.4)

b. Once the card is received at branch, it is entered in the manual “ATM Issuance

Register”. The PIN information is received separately from card and usually with one

day’s delay

c. Customer approaches Manager Operation’s and acknowledges receipt by signing the

“ATM Issuance Register”.

d. In next step, customer approaches to Chief Manager for PIN Issuance and signs a

separate “ATM Pin Issuance Register”.

e. In last step the customer has to approach Manager Operation’s to get the ATM card

activated in system.


a. System should hold complete ATM particulars of customer.



b. Procedure of ATM issuance should be hassle free like credit card, where customer

does not need to collect ATM card from branch. Phone banking or Internet banking

can be a thought for card activation and PIN Code generation as many banks are

using it now days.

c. Information on ATM form is same like account opening form except sur name and

mother name/key word. Missing information can be part of account opening form to

avoid dual information.

1.4 Cash Deposit

a. Deposit slips for PLS and Current Accounts are different (in color as well). There are

two portions of deposit slip, one portion is given to the depositor with cash received

stamp and the other is kept for bank record. In case of shortage of deposit slips,

photocopies are used.

b. All the cash deposit transactions are first written in manual register “Long Book for

Cash Deposit” and are then entered in to the system. For foreign currency accounts

“FC Long Book” is maintained

c. At the time of posting, a super code for transactions above Rs.10,000 is randomly

generated by the system, which is written on the voucher. This number is required at

the time of supervision of transaction.

d. Posting details are available on instrument while passing it through MICR (Magnetic

Ink Character Recognition) machine.

e. In case of mistake in filling the deposit slip i.e. wrong account number or account

title, bank retains the amount in “Sundry Account”. After that either the customer is

contacted or just waited to claim the amount. Amount is credited to account after

getting an application and a photocopy of counter part of deposit slip.




a. Different deposit slips for Current and PLS Accounts can be made single (this

practice is being followed in other banks).

b. After introducing MICR, there should be no need to emboss stamps on instruments

like deposit slips and cheques.

c. Customer should leave counter when all system entry is done and a printing is made

by MICR, in this way long book can be discontinued.

d. Carbonized paper can be used for deposit slip to avoid double writing on counter

folio.

e. Due to absence of “Automated Token System”, usually a mess is created at teller

windows. Token system can help people to approach counter on their turn. Likewise,

utility bills counter can be different from general operations.

f. Limit of supervision entry can be enhanced.

g. By bringing the deposits related data feeding in real time mode, “Sundry Account

Register” can be discontinued.



h. Seating arrangements at cash counters should be such that document movement can

be made easy till supervision step.

1.5 Cash Withdrawal

a. Cheque is presented at teller window. The instrument is first verified by teller and

then by MICR machine, which helps in identification of fake instruments.

b. Cheque is then verified from the system for “availability of balance”, “signatures”

and operating instructions if any. Instrument is then put in MICR to print posting

details.

c. Transaction is posted in the system. In case amount is equal to or higher than

Rs.10,000, transaction is supervised by another officer.

d. Withholding tax is deducted for amounts above than Rs.25,000, which is calculated

manually at the moment.

e. At the time of cash receipts and payments, denomination details are written on the

back of instrument which is used for the verification of the amount.

f. Transaction is written in the “Cashier Payment Long Book”. For foreign currency

accounts, a separate “FC Long Book” is maintained




a. System should calculate withholding tax charges of cheque amount more than

Rs.25,000 (or any other applicable tax). In case of unavailability of balance in

account, provision to record the transaction should be there in system, so that the

amount should be auto deducted on availability of the balance.

b. In principle cash payments to customer should be made after transaction is supervised

in system.

c. Seating arrangements at cash counters should be such that document movement can

be made easy till supervision step.

1.5.1 Cheque Dishonor

a. In case of cheque dishonor, there is a memorandum of reasons to attach with the

cheque while returning it back to the presenter.

b. To record the returned cheque transaction and to get its acknowledgement from

customer “Cheque Return Register” is maintained. This also helps to record details of



deducted charges against dishonored cheques. Cheque return charges are Rs.200. per

instrument.


System should maintain cheque return details like instrument number, date, amount,

return charges and reason.

1.6 Physical Cash Management

1.6.1 Cash Management at Branch

a. Every branch has certain limit approved for cash in hand which is insured as well.

Excess cash is transferred to main / controlling branch (Napier Road in this case). As

a practice minimum foreign currency is also maintained at branch. In case of any

inward clearing or withdrawals, foreign currency is arranged from main branch.

b. In case of excess cash retained at branch, a letter to regional office or directly to

insurance company for insurance coverage is written.

c. Within branch, both foreign currency and Pak rupee cash is placed in main safe,

located in strong room. Details of the amount taken In and Out are recorded each time

in a manual register “Cash In/Out register” with denomination details. Customer

Service Manager is responsible for cash in / out record and for reconciliation of

physical cash kept in main safe.

d. Daily cash reconciliation record is maintained in “Cashier Memo Book” with

denomination details. For reconciliation of foreign currency “FC Cashier Memo

Book” is maintained with currency and denomination details.

e. “Cashier Memo Book” contains information of cash closed on each day in following

details:

i. Unsorted Cash

ii. Sorted Cash (Issue able cash, Non - Issue able cash)



1.6.2 Cash Transfer

a. Every branch has got a limit approved and insured for retention of cash. In case of

shortage or excess of cash, the main branch is informed on phone to arrange

transportation (send / receive) of cash. during transportation, cash in-transit is also

insured.

b. Cash sent to main branch is categorized in two heads i.e. Sorted and Un-sorted.

Different stamps are used to identify both categories of cash.

c. “Cash in-`Transit” is credited during transfer and debited same day on receiving

advice from controlling branch. Its details are recorded in manual register “Cash in

Transit Register”.


a. System should treat physical cash available within main safe as “inventory”. All In

and out transactions should be recorded in system so that physical cash can be auto

reconciled in proper denominations at end of each day. In this case “Cashier memo

book” and “Cash In/Out Register” can be discontinued



b. During cash transfer, cash in-transit transactions should be recorded and advices

should be generated through the system so that manual advices and “Cash in Transit

Register” can be discontinued.

c. Cash transfer should be made through system request rather to make a phone call or

fax to controlling branch. In this case proper documentation can also be maintained.

1.6.3 Cash Management at Main Branch

Main branch (Napier Road) is “Cash Chest” branch for Lahore and neighboring cities.

This branch is responsible to deliver cash, in case any branch request for cash shortage

and collects cash if any branch have excess cash than approved limit. This branch is also

responsible for transactions with SBP and other banks.

It covers 70 branches for its services. Cash transfer arrangements are made with Phoenix

security agencies. Currently branch has four vehicles, provided by Phoenix to serve all 70

branches.

1.6.3.1 Cash Transfer to Branches

a. Branches use fax or make a telephone call to main branch for cash requirement. If

amount is above than 0.5 million, then a counter signature of regional head is also

required.

b. Request details are maintained in “Intimation Register” with date and time.

c. “Cash Payment/Receipt Register” is maintained for cash transfers.

d. Due to shortage of vehicles Cash Chest Manager makes a route for cash delivery

(normally four routs to cover Lahore). Separate bags are maintained for each branch.

A seal is applied on each bag by Phoenix people and seal number is noted on

shipment document. Shipment document have three copies (one for main branch, one

for phoenix and one for receiving branch)

e. Van can carry maximum 200 million in a trip as per instruction of Phoenix. If more

than 200 million has to be transferred then main branch informs Phoenix and also to

insurance agency.

f. Private vehicle can not be used for cash transfers as per instructions



1.6.3.2 Cash Collection from Branches

a. In case of excess cash, branches make a telephone call to main branch (and security

agency, in certain cases) to send vehicle for cash collection.

b. Shipment document along with cash is received at cash chest and respective branch is

informed telephonically on receiving of cash. Pak account advice is sent to branch

through courier next day.

c. For cash in wallet “Cash Chest Book” is maintained with denomination details.

d. Main branch sorts the cash before submitting it to SBP. 15 cash sorters are dedicated

to this exercise.

e. “Cash Sorters Signature Register” is maintained with denomination details for cash

given and taken from sorters.

1.6.3.3 Cash Transfer to SBP and Reconciliation

a. Transactions related to clearing accounts with other banks, SBP penalties and

government institutions are made through SBP account.

b. “Cash Chest” can have maximum 150 million cash in wallet. Excess cash has to be

transferred to SBP. In case excess cash could not be transferred to SBP, information

has to be passed on to COK and insurance company.

c. “Cash in Transit” account is used during cash transfer to SBP and is credited to SBP

account on receipt of advice from SBP. “State Bank Register” is maintained to record

transactions with SBP.

d. At day end or next day morning account statement is received from SBP and

transactions are reconciled with register.

1.6.4 NIFT Operations

a. Main branch is also responsible for inward and outward clearing operations with

NIFT. An office is maintained at NIFT premises to coordinate the operations.

b. Printed advices are provided by NIFT to coordinating office from where these are

mailed to respective branches.

c. Fund Transfer to other banks is done by main branch through SBP account.




a. Cash Request should be from system in form of email or workflow. In this way

“Intimation register” maintained at main branch can be discontinued.

b. System should handle all accounting entries and advices made during cash transfer. In

this way movement of manual advices can also be eliminated.

c. Seeing the sensitivity of Cash Chest, security can also be enhanced by introducing

CCTV and RFIDs so that movement of irrelevant personnel can be tracked.

d. If cash is sorted by SBP then 35 rupees per packet is charged by SBP. This cost is

higher than sorting it in house. To reduce this cost branches should be advised to sort

cash before sending it to main branch. Cash sorting machines can also be used at

main branch to facilitate this process.

e. ABL should devise a procedure to collect clearing data digitally and upload it into

system as NIFT is providing data electronically to some banks.

1.7 Bills

- Demand draft- Pay Order

- Deposit at Call (DAC)

- AB Rupee Travelers Cheques

- Telegraphic transfer / Mail transfer

1.7.1 Demand Draft

Demand draft is an instrument which is normally used in intercity transfer of funds.

“Foreign Currency Demand Draft” can be issued in any applicable currency, which is

normally used for overseas transfer of funds. Any account holder or non-account holder

can request for DD. This instrument is valid for 6 months from the date of issuance. “DD

Issued Register” is used to record issued instruments. On expiry, instrument’s issue date

can be extended on client request by bank. DD can be cancelled or stopped for payment

(Detail in next section).



1.7.1.1 DD Payable

a. Entry is made in “DD Payable Register” on the receipt of advice and payment date is

written on presentation/payment of Instrument. Pak account is used for transfer of

funds.

b. For account holder Rs.100 or 0.05% (whichever is higher) is charged. For non-

account holder Rs.150 or 0.1% (whichever is higher) is charged.

1.7.1.2 DD Issuance

a. DD request slip is filled by customer and cash is deposited at cash counter. This slip

is forwarded to concerned person to make instrument. In case of cheque, direct

approach is made to relevant person for DD issuance.

b. Three DD formats are used in ABL with different colors.

Demand Draft <= 1000

Demand Draft <= 5000 and >1000

Demand Draft > 5000

There are two methods for instrument issuance:

1.7.1.2.1 Online Advice

a. Online advice for DD is made in two steps,

i. “DD Issue Account” is credited and cash or customer account is debited in

UniBank.

ii. DD payable account of responding branch is credited and DD issuance account of

originating branch is debited.

b. The only deciding factor for the success of online transaction is the health of the link

with drawn-on branch. IBR DD is written on the instrument for the identification of

instrument for online transfer.

c. In case DD advice is not transferred through online, a manual advice is sent to the

branch and reversal entry is made in UniBank to reverse the effect of online

transaction. Instrument is made manually as printing facility is not available in

existing system.



1.7.1.2.2 Manual Advice

a. After handing over the instrument to customer, manual advice is posted in system and

sent to the drawn-on branch.

b. Test Code is applied which is an authentication mechanism used by bank on every

kind of inter-branch advice (debit / credit), having amount equal to or greater than

Rs.100,000.

c. Test code is a sum of two numbers which are derived separately by manager and

accountant by adding up certain parameters. Test code is decoded by the receiving

branch to authenticate the validity of instrument. The detail of parameters/segments

used in test code generation is as follows:

For Accountant For Manager

Amount Amount

Date Fix Number

Variable Number Variable Number

1.7.1.3 Cancellation

For cancellation of instrument, customer submits an application along with original

instrument mentioning the reason of cancellation and release from payee. Postage charges

and Rs.100 are charged from customer as cancellation charges. Pak account of drawn-on

branch is debited.

1.7.1.4 Duplicate

In case of lost of instrument, customer can request the Bank for stop payment against that

DD. In this case bank verifies that the DD is not yet paid by drawn-on branch. Fax or

phone is used for getting confirmation of stop payment. Indemnity bond from the

customer is also required. Duplicate DD is issued with same number after receiving

charges Rs.200. “Duplicate DD” is also mentioned on instrument.



1.7.1.5 Balancing

Purpose of balancing exercise is to identify outstanding instruments against which funds

are received but not paid by the branch. Balancing exercise is conducted monthly for DD

payable at branch. ”Balance Book” is maintained for this purpose.


a. System should have the capabilities to maintain complete particulars, printing of

instruments, online transfer of funds to drawn-on branch and auto reconciliation or

balancing at month end.

b. System should facilitate to verify the status of instrument from drawn-on branch

before duplicate issuance of instrument, using online retrieval of information. At the

moment phone call or fax is used for these verifications.

c. Concept of e- Branch is under discussion among ADC, Cash Management and SBP.

Idea is to introduce DD or banker’s cheque, payable at any branch of bank. In this

case e-Branch has to be used as drawn-on branch and access to this virtual branch is

to be provided at every branch.


Demand Draft Issuance Process

Customer fills in Request Slip

Deposit Cashat Counter

Approach to DD Issuance Officer with Deposit Slip

Verify connectivity with the Drawn on Branch for

online transaction

Online Credit to Pak Account

Prepare AdviceManually

Prepare DD Manually

Dispatch Advice to Drawn on Branch

Handover Instrument to

Customer

YesNo


1.7.2 Pay Order

Pay Order is an instrument which is usually used for same city (local) transfers. Credit

cash/transfer voucher is used as slip for pay order and at some places DD application

form is also used. P.O. validity time is six months, which is extendable by bank

1.7.2.1 PO Issuance

a. A separate program for issuance of pay order is used partially at some branches. In

case of manual issuance of P.O., information is maintained in “PO Register” and

accounting entries are posted in relevant GL accounts of UniBank.

b. In case of system generation, GL accounts are auto updated. Branches are using dot

matrix printers to print P.O. but in most of cases, instruments are made manually, due

to printing problems.

c. Charges of Rs.50 are charged from account holders and Rs.100 from non account

holders.


Customer submits an application along with original instrument mentioning the reason of

cancellation. Cancellation charges are Rs. 100.

1.7.2.3 Duplicate

In case of lost of instrument, customer can request the Bank for stop payment against

that P.O. In this case bank verifies that the P.O. is yet not paid by branch. Indemnity

bond from the customer is also requested, after that Duplicate P.O. with same instrument

number is issued by paying additional charges Duplicate issuance charges are Rs.150


a. There should be a specific P.O. application form where details related to P.O.

particulars including name, address, phone # and NIC can be captured.

b. There should be a printer dedicated for P.O., DD and other instruments printing (due

to adjustment reasons).



1.7.3 DAC (Deposit at Call)

a. DAC is a non transferable and non negotiable instrument valid for life time, which is

usually used for tenders or bids participation. Cash held against DAC is considered as

branch deposit.

b. An application form along with credit voucher is required to be filled by the customer

before issuing DAC. GL entry is made to get an update in branch affairs.

c. The terms and conditions for cancellation and stoppage are much strict as compared

to DD or PO.

d. Charges of Rs.50 are charged from account holders and Rs.100 from non account

holders.


An application along with original instrument and release or letter from concerned

department is required. There are no charges on cancellation of DAC.

1.7.3.2 Duplicate

a. For duplicate issuance of DAC, following documents required from customer:

i. Indemnity bond

ii. Copy of F.I.R.

iii. News paper Advertisement

iv. Authority letter from concern department (N.O.C)

v. Validation from legal advisor

b. Branch is not directly authorized for issuance of duplicate DAC and requires an

approval from controlling office.

c. There are no charges on issuance of duplicate DAC.


a. System should have capability to capture detail of DAC product. Moreover, like all

other instruments, printing facility for DACs should also be there.



1.7.4 Rupees Travelers Cheque (RTC)

a. RTC product is out dated and maximum worth of one RTC is reduced to Rs.10,000.

by SBP.

b. Additional information is required from customer on issuance of RTCs of amount

equal to or greater than Rs.100,000. SBP has imposed certain rules under which

information of the customer is captured and sent to SBP for purchases of RTCs worth

equal to or greater than Rs.500,000

c. This product is not supported by system and like all other instruments it is issued

manually.

d. Charges of Rs.10 per leaf or Rs.50 (which ever is higher) are charged.

e. Customer can get it en-cashed from any authorized branch of the bank. To reimburse

funds concerned branch has to lodge claim to COK (ABRTC wing).

1.7.4.1 Duplicate

Stop payment of RTC is a lengthy process; the information has to be conveyed to all

authorized branches through COK provided it is not already en-cashed. On confirmation

of stop payment, duplicate instrument can be issued. Duplicate issuance charges are

Rs.250 per leaf.

1.7.5 Telegraphic Transfer (TT) / Mail Transfer (MT)

This facility was used when online facility was not available. TT is used when a customer

desires to transfer funds from one branch to another on urgent basis. A manual advice is

sent through fax or courier service to responding branch.

1.8 Clearing

We can divide the clearing subject into two segments:

- Local Clearing

- Inter City



1.8.1 Local Clearing

Clearing of instruments within the city is done through local clearing. There are three

types of local clearing:

- Routine Local Clearing

- Same Day Local Clearing

1.8.1.1 Routine Local Clearing

1.8.1.1.1 Inward

a. Instruments and summary (transfer scroll) are received in sealed bag from NIFT.

Acknowledgement is provided by the bank to the NIFT person who visits branch in

morning.

b. Transfer scroll consists of details of inward instruments and previous day outward

clearing instruments.

c. Detail of inward clearing instruments is recorded in a manual register “Inward

Clearing Register” and is matched with transfer scroll sent by NIFT. Each instrument

is then posted in the relevant account in the system in clearing mode, which decides

the fate of these instruments.

d. For realized instruments, branch credits PAK account of main branch (in this case,

Napier road) and debits concerned payee account accordingly

e. An advice is made mentioning the total amount of realized instruments and handed

over to the NIFT person along with unrealized instruments. Advice is sent to main

branch through NIFT.

f. Unrealized instrument are also recorded in “Cheque Return Register”

g. Main branch transfers funds to other banks through SBP accounts, while for ABL

branches, funds are transferred through PAK account.

h. In case of any mistake resulting in wrong realization of instruments, branch sends

debit note to for getting funds back from the collecting branch. If the payment has not

been made then the concerned branch returns the funds in form of pay order. If the

cash is with-drawn then it is very difficult for bank to get it back.

i. There are no charges on inward clearing but for unrealized instruments bank charge

Rs.200 per instrument.



1.8.1.1.2 Outward

a. On receipt of instruments these are grouped into local, intercity and same day clearing

types.

b. Entry in “out ward clearing register” is made from the pay-in slip.

c. At receiving of instruments special crossing and clearing stamps are stamped on the

instrument and endorsement is done on the back of instrument to avoid its misuse, in

case of misplacement.

d. Entry is made in system in clearing mode to provide a float credit in respective

account. This float credit is not available for withdrawal till the instrument is realized

and finally credited to the account. System does maintain this information to keep

track of outward clearing transactions. This also helps in verification of account title

and status before sending instruments for outward clearing

e. Summary (transfer scroll) is made manually from instruments where as register entry

is made from pay-in slip. It is intentionally done to verify the difference in pay-in slip

and instruments, if any.



f. Branch hands over the instruments and summary in a sealed bag to the NIFT person

who collects it in afternoon. In case of any delay, instruments can be delivered by

sending a person to NIFT office

g. After two days (in general practice), NIFT person delivers the fate of instruments

along with an advice and unrealized instruments in a sealed bag.

h. After getting fate of the instruments, credit is provided in UniBank through pay-in

slip. Bank deducts the charges against unrealized instruments.

1.8.1.2 Same Day Local Clearing

a. Same day clearing is opted on client’s requirement and is valid for instruments worth

Rs.500,000 and above. Only nominated branches are authorized for same day

clearing.

b. Incase of same day outward clearing, NIFT person collects instruments in morning. In

case of any delay, instruments can be delivered to NIFT office before 10:00 am. After

processing at NIFT, instruments are sent to destination branch till 12:00 pm.

c. On receipt of same day inward clearing, fate of instruments is decided at that very

moment. An advice is prepared and handed over to NIFT person along with

unrealized instruments



d. Separate register is not maintained for same day inward clearing where as information

of same day outward clearing is maintained in “Outward Clearing Register” using a

separate portion.

e. To identify same day clearing transactions from routine clearing transactions, same

day clearing transactions are posted using “Transfer Mode”

f. Rest of the same day clearing process is same as of routine clearing process.

g. There are flat charges of Rs. 150 per instrument for same day out ward clearing.

1.8.2 Inter City Clearing

1.8.2.1 Inward (Intercity)

a. Inter city mode of clearing operates only in those cities where NIFT is available. At

the moment NIFT services are available in 10 major cities of Pakistan.

b. Instruments and summary (transfer scroll) from the local NIFT are received city wise

in separate packets at the branch by 11:30 am. Intercity clearing advice along with

unrealized instruments has to be returned at the same time

c. There is no separate register maintained for intercity inward clearing. This

information is directly entered in to the system in transfer mode.

d. The rest of the process is same as for same day inward clearing.

e. Charges for intercity outward clearing are 0.2 % and NIFT Charges areRs100 per

instrument. These are deducted by the sending branch (collecting bank). Intercity

register is maintained to record transactions of charges.

1.8.2.2 Outward (Intercity)

The process is same as of local outward clearing, except that the instruments are sent in

separate packet for each city. System does not maintain information for inter city outward

clearing.

Possible Improvements (over all clearing process):

a. After posting the inward and outward transactions in system, summary (transfer

scroll) / advice should be generated from the system.



b. Bank and branch codes should be same as used in NIFT. At the moment system is not

maintaining bank/branch code information. Due to these limitations, clearing system

is being used in few branches whereas most of the branches are following manual

process.

c. In outward clearing, where data for instruments is already fed, interface should be

made user friendly to supervise realized instruments to credit funds in respective

accounts. System should help to mark unrealized instruments while others should be

auto credited to the respective accounts.

d. There should be separate sub modes available in system for different types of clearing

i.e. same day and inter city.

e. System should generate reports to facilitate clearing related inquiries so that manual

registers maintained for this purpose should be discontinued.

f. System should help in calculation and deduction of all applicable clearing charges.

g. In case of any urgent requirement system should facilitate exceptional outward

clearing of instruments which are entered as a batch against one date.

h. ABL should devise a procedure to collect clearing data digitally and upload it into

system as NIFT is providing data to some banks.

1.9 Outward / Inward Bills for Collection (OBC/IBC)

1.9.1 OBC / IBC

a. Instruments like PO, DD and cheque are operated through clean collection where the

facility of NIFT is not available and online transaction for that city is not possible.

b. In each city / region, one of the branches is nominated as main branch. Within the

bank instruments are sent directly to branch and in case of other bank these are sent to

main branch of ABL in that city / region.

c. Before sending these instruments for collection, special crossing and OBC stamps are

stamped on the instrument and endorsement is done on the back of instrument.

d. In case of within bank transactions, branch credits outward bill for collection and

debits outward bills for receiving. An entry is also recorded in “OBC Register”. On

receiving advice the collecting branch will reverse the contra liabilities and credit the



customer account by responding IBCA. On receipt of OBC, the responding branch

provides the credit to originating branch through PAK account and debits the

customer account. An IBCA is also sent to originating branch through courier. On

amount equal to or greater than Rs.100,000, test code has also to be applied on IBCA.

e. For other banks, instruments are sent to the main branch in that region or city. Main

branch launches the instrument in local clearing or arrange collection of funds

through PO, DD or in person. On realization of instrument, main branch sends IBCA

to originating branch. Unrealized instruments are returned back to originating branch

along with “cheque return memorandum”. In case of unavailability of branch in that

region, OBCs can also be sent directly to the branch of other bank. In that case DD is

used to transfer the funds back to originating branch.

f. Minimum Rs.50 or 0.20% of the amount and maximum Rs.5,000 is charged on these

bills.

a. Balancing for OBCs is done on monthly basis.


a. System should maintain complete information of IBC/OBC. In ideal case online

facility should be guaranteed in all branches, which is the best path for these inter-

branch transactions. Further, the proposed online inter-bank transactions can also

helps to facilitate customers and to avoid the lengthy process of transactions through

IBC / OBC.

b. Collection time for OBC is 72 hours. System should generate alerts to both branches

for the outstanding OBCs / IBCs

c. System should maintain floating credit in case of OBCs in a similar way it is

available in outward clearing.

d. System should provide online credit to concerned branch of realized clearing IBC.



1.10 Transfers

Transfers are used where the branch needs to give credit to one or more account(s)

debiting other account against an instrument, advice or an instruction. For example salary

transfer of SUI Gas employees against an instruction System support is available


a. While transferring funds, present limit of 8 entries in one batch should be improved.

Ideally there should be higher or no limits on the transactions in one batch.

b. Facility of e-banking should be introduced so that customers can directly upload the

request for transfer of funds. Further, facility for printing of instruments can also be

extended using standard BAI II format used by banks world wide

1.11 Online Transactions

Following types of transactions are handled through online facility:

i. Cash Deposit

ii. Cheque Encashment

iii. Funds Transfers

iv. Balance Inquiry

v. Account Statement

a. In online mode, account holder can withdraw up to Rs.500,000 per instrument by

him/her self and the limit is Rs.25,000 for person other then the account holder.

Where as in case of cash deposit it is Rs.5,000,000 per transaction.

b. Online slip is filled by the customer mentioning the transaction type listed above. Slip

is deposited along with the cash/instrument to the cashier for further processing.

c. In case of cheque, system usually takes a minute to load signature card to verify

signatures. After data entry each transaction needs to be supervised on the same

terminal where the transaction is posted.

d. Cash deposit transaction is done in three steps

i. System entry and supervision

ii. Generation of advice number of originating branch



iii. Generation of document number of responding branch

e. In case of online cash deposit, supervision of transactions must be made by the

responding branch to make funds available for withdrawal through ATM or online.

f. In some cases entry is through from originating branch and the document numbers are

generated for both branches but the transaction is still not available at responding

branch. If the customer does not inquire (of the balance) in the above mentioned case

then branch comes to know of this problem during reconciliation (done twice during

the month), in this case manual advice is called from responding branch

g. Inquiry against advice number is available in system to confirm transactions, if link is

available.

h. Entry can be reversed in UniBank until system generates document number of

responding branch; otherwise system has to reverse entries through online.

i. Online register is maintained for online transactions, purpose of this register is to

keep track of charges against online transactions. That also helps in MIS reporting.

j. Online charges are waived-off for account holder maintaining average balance of

Rs.500,000. System provides the average balance of each account during online

transactions.

k. Bank has started accepting clearing instruments in the branches through online

processing facility. A procedure has been devised to credit collection account (non

checking current account specially opened for this purpose) on realization of

instrument. After that funds are transferred in to the customer’s account through

online by debiting the collection account.

l. In case of online banking state bank doesn’t permit to debit the limit account.




a. Online slip requires improvements in its contents and layout, as it is quite

complicated due to its support of multiple transaction types. Carbonized slips can be

used to avoid duplicate writing on counter folio.

b. System should allow supervision of online transactions on a separate terminal.

Currently it can only be done from the terminal where the transaction is posted.

System should allow the user to supervise transactions in a batch format rather than

doing it one by one.

c. There should be a two way commit or roll back in case of link failure so that data

consistency and integrity can be ensured at both sending and receiving ends.

d. Backup links or multiple sites should be available so that if one site goes down, data

can be sent or received from other site. Perhaps in new core banking system we could

have multiple backup links

e. The responding branch should have notification or alert generated at their end to

know that there are transactions available for supervision.

f. In case of account statement through online it is only available for current half year.

Account statement should be available at least for current and previous half year.

1.12 Term Deposit

Term deposits are profit & loss sharing based fixed deposit accounts and these deposits

are accepted in multiple of Rs.1,000. There are two categories of term deposit:

- Short Notice Deposit Receipt (SNDR)

i. Seven Days (from 7 to 29 days)

ii. Thirty Days (from 30 days onwards)

- Term Deposit Receipt (TDR)

1.12.1 SNDR

a. It is a non transferable, non negotiable and non accumulative account. Account

opening form is same as for all other types of accounts.



b. On opening of SNDR account, SNDR receipt is issued to the customer mentioning

the period (either 7 or 30 days).

c. The rate of SNDR is dependant upon the amount and days of deposit.

d. The profit is calculated according to the terms of SNDR which is usually paid on

projected rates at maturity.

e. For each SNDR instrument an account is opened in system. If customer needs

multiple instruments then he/she will have to open equal number of accounts

1.12.2 PLS Based Term Deposit Receipt

Period for this type of deposit is one month to 10 year. TDR has a separate register “TDR

Register”. There are total 10 terms and each term has a separate”TT” in UniBank. Profit

provisioning for these accounts is made on monthly basis and profit is paid on half yearly

basis or as per instruction of customer. The rate of TDR is dependant upon the amount

and period of deposit.


a. System should handle SNDR profit provisioning and its payments.

b. System should maintain all particulars of SNDR.

c. System should have option to issue multiple instruments against single account.

1.12.3 Premium plus Account

Premium Plus Account (PPA) is further divided in to two types:

i. PPA Operational account

ii. PPA Term deposit account

1.12.3.1 PPA Operational Account

a. These are operated like current accounts having profit facility. Zakat deduction is also

applicable on these accounts. Profit is calculated on daily product basis as per slabs /

rates (detail of slabs and rate is available in a circular)



b. System provides a separate utility to calculate the daily product with single rate

applicable for the period/month. If the rate changes during the month, break up has to

be calculated manually. Profit provisioning and its distribution is done manually in

the system

c. In case of wapda they have multiple accounts (and even in one or more branches of

the Bank), these accounts should be treated as group/project accounts for profit

calculation and other inquires. Information of total exposure is usually gathered by

making telephone calls to other branches having the group accounts.


a. System should help in profit provisioning and its distribution to accounts. System

should also cater the rate change during the month and application of different slabs

during the month.

b. System should help in determination of profit after summing up or accumulating the

deposit available in all those accounts which belongs to a group customer. Customer

centricity can help to meet all these requirements in new system.

1.12.3.2 PPA Term deposit

a. PPA Term Deposit was launched to attract large deposits of corporate clients. At

present, the minimum amount for term deposit is 50 million and the period is 30 days

and 90 days. The same TDR instrument is used for PPA term deposit.

b. An account is opened for each term deposit in system. As general practice, that

account number is written on instrument to identify the account. A manual register

“PPA Term Deposit Register” is also used to maintain record of the instruments.

c. Profit provisioning is done on month end and is recorded in “PPA Term deposit

Register”. Profit is paid at encashment or maturity of the instruments


a. System should maintain the record of PPA term deposit instruments. Further, profit

provisioning and its payment at the time of maturity or encashment should be handled

by the system.



b. System should have option to issue multiple instruments against single account.

1.12.4 Allied Profit Plus

a. To attract deposits, bank has recently launched a product “Allied Profit Plus Deposit

Account” having different slabs and rates.

b. The average balance for each month is used for the purpose of profit eligibility of

rates / slabs and profit is paid on monthly basis.


a. System should help in profit provisioning and its distribution to accounts.

b. System should also cater the rate change during the month and application of

different slabs during the months.

1.12.5 Premium Term Deposit

a. This product was introduced to expand customer base. It is a similar product to PPA

Term Deposit, having different slabs of amount and period (i.e. available on circular).

The same TDR instrument is used for Premium Term Deposit.

b. An account is opened for each term deposit in system. As general practice, that

account number is written on instrument to identify the account. A manual register

“Premium Term Deposit Register” is also used to maintain record of the instruments.

c. Profit provisioning is done on month end and is recorded in “Premium Term Deposit

Register”. Profit is paid at encashment or maturity of the instruments.


a. System should maintain the record of these instruments. Further, profit provisioning

and its payment at the time of maturity or encashment should be handled by the

system.

b. System should have option to issue multiple instruments against single account.



1.13 Inter Branch Transactions (Pak Account)

a. Each branch and controlling office is working as an independent accounting unit. All

transactions among these units are routed through Pak Account.

b. All the manually originated and responded Pak account entries have to be supervised

for preparation of daily “Pak Account Extract” before day end processing. This is not

applicable on online transactions.

c. Auto generated entries of Pak account, fed through clearing mode have to be

separately added up for finalization of Pak account extract, as the particulars (branch

code, transaction code and control number) of these entries are not being fed at the

time of auto generation.

d. Pak Account is reconciled after every 15 days. A statement is sent by COK to every

branch (accounting unit) mentioning all the un-reconciled entries. Appropriate

remarks are sent against each entry. In case, if an entry is kept un-reconciled for more

than one month, a penalty is imposed by SBP. In case of Lahore region, the

reconciliation process is also handled by a designated person at Napier Road branch.

e. Entries for payment / receipt of interest on Pak Account are posted directly by COK

in respective heads of GL accounts of branches.


a. System should prompt for the supervision of pending PAK account entries before

preparing the “Pak Account Extract” and day end processing.

b. System should provide online credit to concerned branch of realized clearing IBC,

cash in transit etc. so that manual advices can be minimized. In case, where manual

advices are unavoidable due to certain reasons, these should be printed from system.

c. Pak Account inquiry (for recon purpose) should also be available on control number

and date.



1.14 ATM Operations

a. Before cash placement, available cash in machine is recounted and cleared in system

and then new cash is fed into the machine. Information of cash is fed into ATM with

denomination details. An entry is also made in UniBank.

b. A statement is generated from ATM, named as “super”. This report provides details

of available cash in machine. Cash balance slip is generated from ATM with

denomination details. Type wise detail is available in following heads:

i. Cassette

ii. Rejected

iii. Remaining

iv. Dispensed

v. Total

vi. Last cleared (cash)… date for last cash update in machine

Following types of cash is used in ATM machines:

i. Type 1 500

ii. Type 2 1000

c. “ATM Cash Balancing Report” is generated from UniBank system on daily basis

after business hours. This report helps in balancing the actual cash in ATM with

UniBank system. Copies of “super” reports generated by ATM before and after cash

placement are also attached with the balancing report. The “ATM Balancing Report”

is signed by officer and customer services manager. This report provides the detail of:

i. Date

ii. GL ATM cash balance

iii. Status of Balance (B - Balance, U - Unbalance)

iv. Own customer on other ATM

v. Other customer on Own ATM

vi. Actual cash in ATM

d. In case of problem in reconciliation, COK handles its corrections.

e. Only sorted cash can be fed into the machine. Effort is required by the bank staff due

to unavailability of new notes. Some banks are now reversing the maximum limits on

ATM machines due to same problems.



f. All the transactions in ATM are printed on a roll. This roll is taken out daily and

pasted onto a register named as “ATM Scroll” register. This roll helps in keeping

track of all the transactions and their status.

g. Captured card can be returned to the card holder after getting the signatures on the

“ATM Card Return Register”. List of “card captured” is also generated by the

machine.

Possible improvements:

a. The information printed on a roll should be uploaded in a database so that reporting

can be generated without pasting these slips on to a manual register

b. Due to limited availability of new and sorted cash some banks are now reversing the

maximum limits on ATM machines.

1.15 Locker Operations

Fours types of lockers are available for public on rent. This facility is only available to

account holders.

Type (Size) Rent / Annum Key Deposit

Small 1000 3000

Medium 1500 3000

Large 2500 4000

Extra large 4000 4000

a. An application package is signed by the customer, containing following information:

i. Request for locker

ii. SS card

iii. Memorandum of letting of safe

iv. Authority letter for recovery of rent from account

b. Applications forms are filled in a binder. “Locker Register” is maintained to record

all particulars, locker no, key no, rent, security and refund details



c. Rent is recovered in advance or at the commencement of period i.e. quarterly, half

yearly, yearly or as per agreement with customer.

d. Key Deposit is also payable in advance. A receipt is provided to customer against the

security.

e. “Register of visits” is maintained to record the date, time and signatures of visiting

person.

f. In case of loss of key, the customer will be asked to report the loss in writing and

request for breaking the locker and replacing it with new one at his/her own cost.

Breaking charges are recovered as per actual or minimum of Rs.2000 from the

customer.




a. System should maintain information about the lockers and their owners in detail.

b. Locker requirement should be made part of main account opening application / form.

In case someone requires this facility after getting the account opened, this

information should be updated in the system. So that the locker information should be

linked to the particular account.

c. In case locker operating authority is given to any other person by the account holder,

additional SS card (only for the purpose of locker operation) should be scanned and

uploaded in the system against the account.

d. System should report the vacant lockers, due and overdue list for renewals so that

proper correspondence can be made with customers.

e. Instructions are pasted on lockers for overdue payments of rent; these can also be

resolved by provision of prompts or alerts through the system. System should help in

terms of validity of locker for payment of rent at the time of people visiting to operate

the lockers, and prompt for the overdue rent payments.

f. Concept of digital lockers can be looked into with some digital authorization process.



g. By bringing the lockers and visitors information into databases, manual registers can

be discontinued.

1.16 Utility Bills

a. A separate “Long Book” is being maintained for each type of utility bill (i.e.

Electricity, Sui Gas, WASA and Telephone),

b. Utility bill is received from customer at counter. Amount and bill details are entered

in “Long Book” and amount is also written on utility bill by cashier.

c. “Long book” along with utility bill is given to officer, who applies receiving stamp

and do system entry and sends it back to cashier. Counter part of bill is handed over

to customer.

d. In case the bill payment is made through cheque/instrument drawn on same branch,

the instrument has to be separately posted in UniBank and after passing of instrument,

the entries are recorded in long book and system. Counter part of bill is handed over

to customer.

e. In case the bill payment is made through cheque/instrument drawn on other Bank, the

instrument is sent in clearing and after the realization of instrument; the entries are

recorded in long book and system. Counter part of bill is handed over to customer.

f. Entries of long book and the system generated reports are reconciled and manual

credit vouchers for each type of utility bill are posted in UniBank on next working

day and funds are transferred online to respective main collection branch of each

department (SUI GAS, WAPDA, PTCL)

g. The cash safe for utility bill is separate from main safe.

h. Bank charges are Rs.10 per bill from each department except WASA.

i. In case of SUI gas the charges are deducted before transferring funds. For WAPDA

and PTCL, summary of bills collected is sent to regional office by each branch at

month end and after compilation the regional office directs the respective main

collection branch for transferring the commission amount to each branch. Manual

advices of commission are sent to each branch by main collection branch.



j. As module used for utility bills has no integration with UniBank, so staff has to make

dual entries to update it.


a. An integrated module should be available in new system for utility bills collection.

Existing module used for utility bills has no integration with UniBank, so staff has to

make dual entries to update it.

b. Arrangements with departments should be made for payment of bills through online

banking, phone, SMS, credit card, internet or even use of barcode technology can also

be given a thought.

1.17 Prize Bonds

a. “Prize bond Register” is used to record the sale and purchase of prize bonds. Separate

page for each denomination is used in register.

b. Prize bonds are sent along with cash to main branch in routine



c. In system, GL account for national prize bonds is updated. Denomination and serial

numbers of prize bonds are not fed into the system

Possible Improvement

System should provide complete information including denomination and serial number

for prize bonds so that the record of prize bonds falling during shut period can also be

maintained and manual register can be discontinued

1.18 General Accounts

1.18.1 Sundry Account

a. Sundry account is maintained to record the transactions having mistakes, for example

incorrect account number or account title on deposit slip, access cash received,

parking of certain credits temporarily.

b. To reverse the erroneous transactions parked in the sundry account, an application

along with photocopy of the counterpart of the deposit slip is sought from the

depositor. Other credits parked in Sundry Accounts are reversed at appropriate time.

Control on the sundry account reversal entries is more important for audit.

c. ”Sundry Register” is maintained to record the transactions of Sundry account.

d. Balancing exercise is conducted each month and a monthly statement of outstanding

entries in sundry account is prepared manually and is sent to the regional office.


a. System should cater to sundry account handling providing some means of knocking

off entries so the outstanding entries can be identified any time.

b. At the moment commissions receivable against LG are parked in Sundry account.

Separate account should be maintained for L/G commissions recoverable.



1.19 General Processes

1.19.1 Daily Vouchers

a. There are four types of vouchers:

i. Credit Cash

ii. Debit Cash

iii. Credit Transfer

iv. Debit Transfer

b. All vouchers of a day are sorted by voucher and account type. These are sewed in

form of bundle.

c. “Voucher Register” is maintained by mentioning the number of vouchers in each type

in a day.

d. “Voucher Movement Register” is maintained to record the movement of vouchers

from strong room.


a. Detail of daily vouchers should be available from system. At the moment, the batch

entries are considered as single voucher by the system, which is a bottleneck for using

the report for recording and reconciliation purpose. This can help to discontinue the

“Voucher Register”

b. By bringing the Voucher movement information into the system, the “voucher

movement register” can be discontinued.

1.19.2 Advance Deposit and Advance Rent

a. Depending on the contract, advance deposit in terms of security (for building,

telephone, Sui-gas etc) is recorded. In case of advance rent “Advance Rent Register”

is being used at branches to record the detail of rent paid in advance and its

subsequent deduction and balance.

b. Advance deposit receipts are kept in separate file for record of all advance deposits

made to different agencies and are recoverable in future.



1.19.3 Executive Visits

“Executive Visit Book” is maintained for executives wherein they fill the four pages of

information to record different parameters related to branch performance. After that a

report is sent back to the branch for comments and compliance.


Although this practice is discontinued since last two years, but in case of requirement,

there should be a system to record all these details instead of manual book

1.19.4 Peon Book

“Peon Book” is maintained to record and get signatures of receiving person on the Dak

sent to different offices through messengers (peons) by hand.

1.19.5 Stamps in Hand

a. Receipts and Issues of stamps are recorded in the “Stamps in Hand Register”. These

are accounted for in General Ledger at the time of their purchase or sale. A separate

page for each stamp type is used in register.

b. Balancing exercise is conducted on monthly basis and is recorded in “Balance Book”.

Auditors also verify the physical stock with the ledger balance.


Manual record of stamps inventory should be maintained in the system.

1.19.6 Inward / Outward Dak

Inward Dak is recorded in “Inward Dak Register”. Outward Dak is recorded in “Outward

Dak Register”




There can be a system to record inward and outward dak details so that manual registers

can be discontinued.

1.19.7 Book of instructions

a. Book of instruction was printed in March 1997. Volume 1 of this book covers general

banking. The remaining process reference to advances and trade finance were

supposed to be made. Later on the next volumes of manual were not published


a. Some processes have been changed with passage of time but the book is not updated

accordingly. This book should be available online for reference on any subject.

Mechanism to keep this manual up to date should also be there.

b. One idea is that all kind of manuals should be available in SPP

1.19.8 Online List of Branches and Controlling Offices


a. Branch list with telephone and fax numbers should be available online with updated

information of people responsible.

b. Sorting and searching both alphabetic and branch code wise, should also be available.

1.19.9 Circular’s Index

An index of circulars was also made in past. List and numbers of circulars was “grouped

subject” for the convenience of reference.

Possible Improvement:

a. Index and all the circulars should be available online for the ease of reference



b. SPP/”Exchange Server Public Folder” access should be extended to branch managers

in future.

c. Intelligent searching capabilities should also be there to facilitate the user for

searching on any subject.

1.19.10 Office Orders

All office orders are either pasted or written on “Office Order Register” and signatures

from staff members are required on it.


To save time and unnecessary movement of registers, all office orders should be

circulated through email.

1.19.11 Inter Branch Signature Book (IBS/AS)

a. This manual book contains the list and signatures of all authorized personnel (IBS

holders). This book is printed and distributed to all branches and relevant agencies for

the sake of verification of signatories.

b. The changes (additions & deletions) are conveyed by means of circulars. Additions

are pasted manually on the same book and deletions are also marked there.


This book should be available on line. Searching should also be available on name and

IBS number so that manual verification of signatures can be avoided.

1.19.12 Keys Handling

There are different types of keys:

Keys Key Holders

Strong room gate keys Customer service manager

Chief cashier



Main cash safe Chief manager

Customer service manager

Chief cashier

Small safe (for utility bills) Cashier (utility bills)

Utility bills in charge

Test keys Customer service manager

Bills in charge

Locker room gate keys Customer service manager

Chief Manager

Locker keys Customer service manager

a. The responsibility of each key is entered into the “Key Register” and receipt is

acknowledged by the receiving official and finally authenticated by the customer

service manager.

b. In case some person goes on leave, transfer or retirement, key’s responsibility will be

shifted to someone else by entering the keys transfer information in the same register.


System should help in maintaining this record of keys possession and some technology

like digital safe can also be used.

1.19.13 Inventory Management

a. “Security Stationary Register” is used to record inventory receipts and issuance,

balance of security stationary items. Receipt and Issuance is recorded with reference

of serial numbers.



b. “Stock of Stationary in Hand Register” is used to record stock and cost of all

stationary items. This cost is booked in UniBank GL on monthly basis.


Inventory valuation and its transfer to GL should be made by the system without any user

intervention.

1.19.14 Fixed Assets

Types of fixed assets are as follows:

i. Furniture and fixture

ii. Vehicle account

iii. Electrical equipment

iv. Computer and tele equipment

v. Long life computer equipment

a. “SFF – Safe, Fixture, and Furniture Register” is maintained to record all assets in that

particular category. It is mandatory that a separate register should be maintained for

each category of fixed assets.

b. Depreciation is calculated manually on periodical basis and communicated to COK

on yearly basis.


Fixed assets data and its valuation process should be transferred to COK where this

should be handled in a centralized way using Oracle fixed assets

1.19.15 Attendance Management

a. Staff members sign the “Attendance Register” on daily basis. This register is

supervised and signed by chief manager on daily basis.

b. “Leave Record Register” is maintained to keep record leaves of branch staff.




a. Leave record should be maintained with HR Wing. Monthly record of attendance/

leaves should also be sent and updated in HCM.

b. An online inquiry should be available for branch to refer leave balances details.

c. At the moment the leave record for executives is centralized at COK and for rest of

employees leave record is maintained at branches. This can be uploaded in to HCM

1.19.16 Expenses

Branch Expensesa. Budget for each expense type is allocated by COK and communicated through

Regional Controller to each branch.

b. System doesn’t help in enforcement of these budgets.


a. Budget should be available online thru system for each type of expense. System

should also provide a comparison of limit availed and available, on requirement.

b. System should provide a notification on exceeding budget in any head.



2 Finances

Finances can be categorized into two types:

i. Fund based (FB)

ii. Non-fund based (NFB)

Customers can also be grouped into two categories on the basis of availed limit:

i. Corporate Customers (Availing 150 million and above)

ii. Retail Customers (Availing below 150 million)

a. Corporate customers are served by CIBG (Corporate Investment Banking Group)

having four regions in the country. Relationship Managers (RM) are responsible for

customer liaisons and credit application processing.

b. Retail Customers are served by CRBG (Consumer and Retail Banking Group) having

27 regions in the country. Chief Managers (CM) are responsible for marketing and

customer follow-ups.

c. Following is the list of products introduced by the bank from time to time, some of

these have become obsolete but still have overdue:

Serial No. Products

Working Capital Facilities

Fund based

1 Agriculture Finance/Revolving Credit Scheme

2 Running Finance/Temporary Over Draft/Sanction Over Draft

3 Cash Finance

4 Finance against IBP

5 Finance for Govt. Commodity Operations

6 Financed against Dishonored Bills (FADB) under Usance L/C (Inland)

Non Fund Based

7 Customer Liability on Inland L/C

8 Customer Liability for Local Usance Bills Accepted (LUBA)

Import Related Credit Facilities

Fund based

9 Finance against Imported Merchandise (FIM)



10 Finance Against Trust Receipt (FATR)

11 Payment against Documents (PAD) – Sight

12 Finance Against Dishonored Bills (FADB) under Usance L/C

Non Fund Based

13 Customer Liability L/C (Sight)

14 Customer Liability L/C (Usance)

15 Customer Liability for Foreign Usance Bills Accepted (FUBA)

Export Related Credit Facilities

16 Finance Against Packing Credit (FAPC-I, FAPC-II)

17 Finance Against Packing Credit (Own Sources)

18 Finance Against Foreign Export Bills

19 Foreign Bills Negotiated (FBN)

20 Foreign Bills Discounted (FBD)

Long Term Credit Facilities

21 Demand Finance (DF)

22 Fixed loan/Term Finance

23 Bridge Finance

24 Leasing

25 IDA Credit

Program Lending

26 Finance to Small Business

27 Overseas Employment Financing Scheme

28 Housing Finance

29 Self Employment Scheme

30 National Transport Scheme for Taxis

31 Computer Loan Schemes

32 Credit Card Finance

33 Allied Karsaz Financing Scheme

34 Demand Finance to Staff



2.1 Advances

a. An account of customer is opened in UniBank for each type of facility with a specific

TT. This also helps in enforcement of maximum limit as approved in sanction advice.

b. Transactions regarding disbursements and repayments of principal amounts are

recorded in this account.

c. Manual registers are maintained to record disbursements, payment schedules and

principal repayments for each type of facility like “Demand Finance Register”, “Cash

Finance Register” and “Running Finance Register” etc.

d. Single “Markup Receivable Register” for all type of advances is maintained to record

markup rates, markup repayment schedules, accruals and markup repayments.

Information against each facility is maintained on each page. To calculate the

aggregates of due payments or overdue payments manual calculations are made by

staff against each customer.

e. Different MIS reposts are sent to CAD, Regional Office and to COK. These reports

are made manually from these registers by branch staff.

2.2 Imports

We can divide this subject into following categories:

i. L.C (Sight, Usance)

ii. Inland L.C (Sight, Usance)

2.2.1 L.C Opening Process

a. L.C Form with all supporting documents is filled by customer.

b. An account of each customer is opened in UniBank for L.C with a specific TT to

reflect availed totals in general ledger. This also helps in enforcement of L.C limit as

approved in sanction advice.

c. If any customer has availed sub limits like (DOD, FATR etc), system does not

provide the facility to calculate aggregates of these sub limits. As a practice these sub

limits are manually added and are tallied with DAC approved limit for outstanding

amounts.



d. “LC Opening Register” is maintained to record LC number, customer, opening date,

commissions and amount. This information is again entered in “Payment Against

Documents (PAD) Register” with additional details like (Item, HSCode, insurance

and expiry date etc) related to that LC.

2.2.2 L.C Processing

a. On payment against documents “PAD Register” is updated and markup is calculated

manually.

b. “LC Lodgment Register” is updated when PAD occurs. This register is used for SBP

reporting.

c. In case customer fails to get documents released by paying funds in time then LC

sight is transferred to FIM (Finance against Imported Merchandise) or FATR

(Finance against Trust Receipt) if customer has these approved facilities, details are

noted in “FIM register” and in “FATR Register” respectively. If customer does not

have approved FIM facility then a forced FIM is created and details are maintained in

“Force FIM register”.

d. LC Usance is transferred to FUBA (Foreign Usance bills for Acceptance) if customer

fails to get documents released, details are noted in “FUBA Register”. After this a

temporary finance facility name FADB (Finance against Dishonored Bills) is created,

its details are maintained in “FADB Register”.

2.3 Exports

Export subject can be divided into following areas:

i. Export through collection

ii. Export through advance payment

iii. Export through L.C



2.3.1 Export Process

a. E-Form is issued for any type of export. Issuance record with serial number, customer

name and along with signature is maintained in “E-Form Issuance Register”.

b. “FDBC (Foreign Documentary Bills for Collection) Register” is maintained with

complete details when export is made through collection.

c. “Proceed Realization Certificate” register is updated when funds are released by

importer and are available to exporter.

d. “Advance Payment Register” is maintained if export is done on advance payment

basis.

e. “FBN (Foreign Bills Negotiated) Register” is used to record the export details when

is made through Letter of Credit (L.C).

f. Exporter can avail facility of FBD (Foreign Bills discounted) when export is made

through L.C (DA). “FBD Register” is maintained to record the particulars.

g. Foreign Bills Purchased is an approved facility for LC having minimal discrepancy in

documents. “FBP (Foreign Bills Purchased) Register” is maintained to record the

particulars of export when any exporter avails this facility.

h. Finance against Packing Credit (FAPC-I) is an approved facility having fund

arrangement by own source or re-finance facility from SBP. Two different registers

are maintained for this.

i. Finance against Packing Credit (FAPC-II) is also an approved facility. Details are

maintained in “FAPC-II Register”.

Possible Improvements

a. There should be a system to capable of handling all finances related requirements

including Term, Demand and Trade Financing. System should provide mechanism to

define or configure new products on different parameters.

b. System should also cater requirements like multiple loan facilities per customer,

feature to inter-link loans for tracking purpose, markup calculation for multiple loans,

limit controls, loan re-scheduling and customer payment behaviors,

c. System should maintain complete information of L.C, like Performa invoice, products

list, shipment details, opening bank, reimbursing bank, advising bank, negotiating



bank, insurance and expiry details etc. It should also facilitate to convert LC to any

other fund base facility like FIM, FATR, FADB etc. In this way many manual

register can be discontinued.

d. System should generate alerts on expected shipment dates, expiries and on shipment

arrivals so that customer can be contacted in time.

2.4 Credit Application Package

a. Credit Application (CA) is used to avail any type of facility from bank and is also

used to collect customer financial and non financial information. CA package is used

for following:

i. Credit Renewal

ii. Credit Amendment

iii. Credit Extension

iv. Credit Enhancement

b. CA contains following sheets having different set of information:

i. Exposure Summary

ii. Facility Summary

iii. Sanction Advice

iv. Basic Information Report

2.4.1 Exposure Summary

Exposure summary is used to collect information about applicant’s business segment,

control unit, extended unit, obligor’s risk rating, obligor’s stability, tenor profile,

classified exposure and group exposure.

2.4.2 Facility Summary

a. Facility summary contains information of facilities (FB and NFB) availed by

group/company from bank (ABL only).



b. In case security documents are shared by more than one bank then details of other

bank’s facilities are also collected.

2.4.3 Sanction Advice

Sanction advice contains obligor’s existing and proposed facilities, facility purpose,

pricing and terms. It also contains details of security description against existing and

proposed facilities. After the signature from approving authority, this document becomes

a credit approval.

2.4.4 Basic Information Report (BIR)

BIR is used to collect obligor’s information from internal and external sources like

company back ground, main products, production capacity, shareholders, management,

group concerns, bank lines, CIB, market worth, yield and classification history etc.

Separate BIR is maintained for each obligor.

Following table represents information being captured on CA Form, its source and

incorporation status in existing system:

Credit Application Form Source StatusSheet-1 Exposure Summary CA Type CA # Date of Review Date of Last Annual Approval Group / Obligor Customer Extending Unit Relation Ship Manager Business Segment Customer Approval Level Next Expiry Date Group / Obligor Code CIB Control Unit Obligor Relationship Since System Legal Entity Customer Obligor name Customer



ORR (Existing, Proposed) COK Total Existing Limits System Relation Ship Strategy Group Exposure Summary FB Existing System Proposed Net Inc / Dec NFB Existing System Proposed Net Inc / Dec Investment Existing System Proposed Net Inc / Dec Total Existing System Proposed Net Inc / Dec Stability Criteria Prudential Regulations Breach Covenant Violations Security Compliance Certificate (SCC) Not Attached Qualified Auditor's Opinion Customer Change in Auditors Customer Overdues Significant Change in industry outlook Major Risk event impacting the Obligor CIB reflects over due / Default CIB Negative Market Checking Credit Policy Breach Group / Obligor Classification Restructuring History Recommended By Approved By Sheet-2 Facility Summary - Other Group Obligor Group Name Customer Group Code CIB CA # Control Unit Date of Review Next Annual Renewal Date Obligor Name Customer



Obligor Code CIB NTN Customer Extending Unit Customer Industry Type Customer Industry Code Facility # Facility Existing Limits FB System Existing Limits NFB System Tenor Expiry System Pricing Outstanding Regular System Outstanding Classified / Over due Sub Total Group Total Signature Relationship Manager Sheet-3 Sanction Advice Group Name Customer Group Code CIB Control Unit CA # Date of Review Next Expiry Date Obligor Name Customer Obligor Code CIB Extending Unit NTN Customer Industry Type Customer Industry Code Obligor Facility Summary Facility # Facility Existing Limits FB System Existing Limits NFB System Tenor Expiry System Pricing Outstanding Regular System Outstanding Classified / Over due System Total System Facility Terms Fac #



Facility Purpose Price (Exist.) Price (Prop.) Commission Tenor (Exist.) Tenor (Prop.) Expiry System Repayment System Procedural Requirement Manual Sheet-4 Security Description Fac. Cov. Existing Proposed Charge Amount & Ranking Margin (%) Proposed Margin (%) Required as per bank policy/ SBP which ever is higher Collateral Value Last Stock Inspection Date Observations Last Legal Review Date Observations Recommended By Approval Level Additional Comments / Loan Covenants Sheet-5 Basic Information Report Obligor Name System Address System Tel. No. System Date of Establishment Business Segment Legal Entity Borrowing Relationship Since Date of Review Background / Products Customer Shareholders Customer Management Customer Affiliated / Group Concerns Customer Bank Lines CIB / Customer Credit Checking from CIB CIB Market Checking Yield



Classification History


a. New CA format is being used by CIBG. How ever CRBG is still using the old format.

These formats should be accompanied by proper guidelines and defined list of values,

which should be followed by all branches to ensure the standardization.

b. Business segment is an important field on which many SBP and management reports

are dependent. Branches and RM’s should have the pre-defined list of values, so that

at the time of filling CA, proper selection can be made. During scrutiny the validity of

this information should be assured.

c. If CA is initiated by branch where finances of Flagship Company are parked, in that

case branch has to collect finances details of obligor from other branches manually.

Similarly if CA is initiated by other than control unit, the branch has to send CA to

control unit for verification, comments and consent of respective RM. System should

help to generate consolidated report on all facilities availed by group/company from

any branch of bank.

d. Currently branches are compiling data manually to calculate yield, tenor profiles,

classified exposures etc. System should help to calculate all these rather to make it

manually.

e. Existing facilities information is gathered from UniBank system and is manually

written on CA after making certain calculations. System should generate facility

details like tenor, pricing, expiry date, outstanding, overdue and classified exposures

against individual company or at group level.

f. As BIR information is volatile and need to be updated on certain intervals, system

should prompt against each obligor regarding information expiry so that updated data

can be collected.

g. System should provide analysis on management ranking, yield and bank charge rating

on provided data based upon defined parameters. System should also be able to

calculate the security cushion available on existing securities.



h. The role a portfolio management division should be advisory so that they can guide

RMs and CM from marketing point of view. They should conduct comprehensive

R&D on areas like change in industry outlook and areas for investment.

2.5 Credit Approval

After compilation, CA along with supporting documents is forwarded to appropriate

approving authority (CRBG, CIBG). Following is the credit approval structure used in

CRBG and CIBG:

Security Types Descriptions are elaborated in section (2.5.1)

LEVEL-1Credit Approval Authority

Single borrower / Group Exposure Limit

Security

Branch / Chief Manager jointly with the Regional Head(RH) CRBG

Total exposure up to Rs. 1 (M) of which agriculture finance not to exceed Rs.0.5 (M)

Fully secured by Type I

LEVEL-1ICredit Approval Authority


Security

RH,CRBG jointly with Manager, Regional Commercial & Retail Risk (RCRR)

Total exposure up to Rs. 10 (M) of which agriculture finance not to exceed Rs.5 (M)

Type I and type II

LEVEL-1IICredit Approval Authority


Security

Manager RCRR jointly with group head, CRBG

Total exposure up to Rs 25 (M)

All Security Types

LEVEL-1VCredit Approval Authority Group Head, CRBG jointly with Head, Commercial &

Retail Risk (For Borrower in CRBG)




Security

Regional Head CIBG jointly with Head, Corporate & FI Risk (For borrower in CIBG)

Total exposure up to Rs. 75 (M) for a single borrower and Rs. 150 (M) for a group – CRBG

Total exposure up to Rs. 200 (M) for a single borrower and Rs. 400 (M) for a group – CIBG

Term Loan to be sanctioned up to 50 % of credit authority

All Security types

LEVEL-VCredit Approval Authority


Security

Group chief, CRBG / CIBG jointly with group chief, RMG

Total exposure up to Rs. 400 (M) for a single borrower and Rs. 800 (M) for a group

All Security TypesLEVEL-VICredit Approval Authority


Security

Group chief, RMG jointly with President

Total exposure up to Rs. 600 (M) for a single borrower and Rs. 1200 (M) for a group

All Security Types

LEVEL-VIICredit Approval Authority


Security

President jointly with Chairman, Risk Management & Credit Policy Committee

Total exposure exceeding Rs. 600 (M) for a single borrower and Rs. 1200 (M) for a group

All Security Types

2.5.1 Security Type Descriptions

Type I Cash / Near Cash

100% cash Margin



Lien over deposit (LCY / FCY) Receipts / Certificates issued by ABL

Lien over financial guarantees issued by ABL

Lien over deposit certificates / receipts of banks with a minimum rating

‘A’ (by an external rating agency) with in exposure limit allocated by

FI division with formal lien marking by the issuing institution.

Lien over registered DSC’s / SSC’s / government securities issued by

banks, national saving centers or SBP with formal lien marking by the

issuing institution

Pledge / lien over FEBCs / Bearer / Registered US $ bonds subject to

verification & formal lien marking by the issuing bank.

Export documents under irrevocable usance LCs of top 1000 banks

after receipt of authenticated acceptance advice.

Documents under inland LCs of scheduled banks with in the exposure

limits allocated by FI duly accepted by the LC opening bank.

Security for Agriculture Finance

Mortgage of rural property through pledge of Agri Pass Book

Joint registration of vehicles

Mortgage of urban property.

Type II Pledge / Fixed Assets

Pledge of goods imported under Sight LC issued by ABL (excluding

public / custom bonded warehouses).

Pledge of locally procured commodities used in seasonal financing

(Raw Cotton, Cotton Bales, Cotton by-products, rice paddy, rice wheat,

sugar) that is fully adjusted at the end of the season.

1st / 1st PP Mortgage on land and buildings – excluding cultivated rural

land not being used for industrial or commercial purposes (even if held

for secondary collateral)

Lien over deposit certificates / receipts of banks with a rating below

‘A’ (by an external rating agency) with in exposure limit allocated by

FI division with formal lien marking by the issuing institution.

Type III Fixed Assets / Current Assets / Shares / TFCs / Others



1st / 1st PP hypo charge on current assets

1st / 1st PP hypo charge on plant and machinery

Pledge of stocks imported under non ABL LC / finished goods

Pledge of other goods

1st / 1st PP mortgage on land and building (rural areas)

Finance guarantee of top 1000 banks functioning abroad or scheduled

banks in Pakistan with in exposure limit allocated by FI division

Shares / TFCs

Personal guarantee for agricultural finance.

Any other security not specified above will be approved at a minimum

of Level-V


a. To minimize credit approval processing time, work flows should be implemented.

This can also help to track changes made at any level of approval. CA initiation by



CIBG can be handled electronically as they have enough hardware resources

(computers and laptops), while by providing hardware resources to branches, CRBG

people can also do it electronically.

b. System should provide the status tracking of CA so that customer can be informed

when required.

c. All original documents are in the custody of CAD while branches only have copy of

these. Digitization of these documents can make it easier for branches to access these

electronically.

2.6 Credit Administration Department (CAD)

CAD functions starts when a facility is approved by approving authority. There are eight

CAD offices in ABL and their main responsibilities are as following:

- Disbursement Authorization Certificate (DAC) Issuance

- Security Documents Safety/Storage Management

- MIS (CIB, Management and Monitoring)

- Vigilance (hypothecated and pledged stock inspection)

2.6.1 Disbursement Authorization Certificate (DAC) Issuance

DAC empowers customers and employees to avail approved facilities. The process of

DAC issuance is as follows:

a. For new facilities, CAD receives an “Approval Note” from approving authority and a

BFL (Banking Facility Letter) from regional office against approved credit

application. The contents of BFL are compared with “Approval Note”. In case of any

discrepancy CAD informs regional office for its correction.

b. BFL is sent to branch/RM for customer acceptance. As a matter of practice a “Charge

Form” being signed by customer is taken in advance, which is basically an acceptance

from the customer on all terms and conditions and is sent to CAD for review.

c. On customer acceptance, CAD advises branch/RM to collect required documents

from customer and these documents are also vetted by legal advisor, if required.



d. Original documents are delivered to CAD office in person for review. If any shortage

or discrepancy is found in the documents, branch is asked for correction. “Master

file” is maintained to keep security documents in original

e. DAC is issued and sent to branch/RM which empowers branch for the disbursement

of funds against approved facility. “DAC Issuance Register” is maintained to record

the details.

f. Photocopies of all the documents along with approved DAC are sent to Risk

Management Group.

g. For renewal of existing facilities, a SCC (Security Compliance Certificate) is sought

from CAD for verifying the validity of the security documents. After issuance, a copy

of SCC is filled in “Master File” for record purpose.

h. In case of employee finances, DAC is issued to HR and related security documents

are maintained by CAD on separate register.


a. CAD should have a list of standard documents approved against each type of facility.

This list should also be available with branches. This can help in reducing the time

period spent on fulfilling the discrepancies.

b. Proper use of software systems (SPP, Microsoft exchange server etc.) and use of

terminals at each desk can help and facilitate the fast processing of CAD functions

c. Use of technology like SPP, emails and work flows not only can save the time but

also helps to curtail the charges of courier.

d. Role of CAD can be enhanced in terms of collection of documents and also to handle

the legal documentation which branches / RM are doing at the moment. Reason being

it is a specialized back office job and should be dealt by specialized people like CAD

which is more appropriate department to handle this function. This can help in

improving the time required in this process, this can also help branches to become

more productive in their routine banking operations.



2.6.2 Security Document Management

a. Original documents are received from branch in person. Listing and

acknowledgement is provided on DAC document for branch and customer record.

b. These documents are placed in “Master File” and are kept in “SAFE”, available with

CAD by marking reference number on each file.

c. In case any authority or person requests to review these documents, a “Document

Movement Register” is maintained.


a. System should facilitate to define document expiries if required and should give

prompt on due dates so that customer can be contacted for new or updated

documents.

b. System should keep record of insurance expiries of each customer/facility and should

prompt when any insurance policy expires. Similarly, if any insurance company is de-

listed from panel, system should be able to list all cases of that company so that

customers can be contacted for new policies.

c. Document listing should also be available online so that branches can view it when

required and can follow customers regarding missing or incomplete documents.

d. Digitization of these documents can help to view these documents online by any

authority.

e. All the cabinets used at the moment are not fire proof. Safe room should have proper

fire fighting and security system.

2.6.3 MIS Reporting

This wing is responsible to collect different types of reports from branches and passes on

to central CAD office at COK. Some of the reports and their reporting frequencies are as

follows:

Sr.# Report Name Compiled For Frequency

1 Credit Admin Update (11 Statements) COK Monthly



2 Past Due Obligation COK Bi-weekly

3 Financing Against Pledge of Shares COK Weekly

4 Statements of Limits Approved (4 Statements) COK Monthly

5 Share’s Daily Report COK Daily

6 Credit Information Bureau CIB Monthly

7 Electronic Credit information Bureau CIB Monthly

8 Stock Inspection Report COK Monthly

9 Party wise consolidated statement of stock report COK Monthly

On receiving of reports from regions and branches, key punch operators feed this data

into excel files and CIB related data in CIB system. Soft copy of these reports is sent to

COK for further processing.


a. Due to lack of central database, branches manually compile all reports and send to

regional office and CAD. During this process data becomes invalid and this also leads

to omission of information. System should facilitate to generate all types of

monitoring reports on real data so that proper actions can be taken. CAD should have

access on CDB (central database) to meet these requirements.

b. As a practice past due obligation report is called from branches. On the basis of this

information, CAD conducts follow up with branches for recoveries. System should

maintain principal payment schedule and markup schedule so that customer can be

approached well in time and overdue can be eliminated.

2.6.4 Vigilance Officer

Role of vigilance officers is to inspect hypothecated and pledged stocks for allocated

branches. This activity has also been outsourced to different companies. Responsibilities

of vigilance officer are as follows:

a. Vigilance of pledged stocks on quarterly and hypothecated stocks on half yearly

basis.



b. “Report 63” is collected from branch which contains customer details, customer

facilities, hypothecated and pledged stock details and outstanding amounts.

c. Make visit schedules for outsourced agencies, verification of their reports and their

submission.

d. “Stock Inspection Performa” is used during inspection by vigilance officer. Main

contents of this Performa are as follows:

i. Detail of existing limits /amounts outstanding

ii. Detail of stocks hypothecated / pledge inspected

iii. Quality of stock item

iv. Evidence of ownership

v. Adequacy of insurance

vi. Quality of warehouse storage quantity

vii. Adequacy of fire protection arrangements

viii. Adequacy of protection from theft / burglary

ix. General comments / observations

x. Submission of stocks stored at factory premises from client

e. Vigilance officer manage visit schedules of outsourced agencies in such a way that

one company can not do vigilance of a customer consecutively two times.

f. Visit details, visiting agency and visiting personnel record is maintained in

“Hypothecation and Pledge Registers”.

g. In addition to this, visits are made by following authorities:

i. Branch level Monthly Inspection

ii. Audit Department (two in a year)

iii. Vigilance Officers visit (quarterly for pledge / half yearly for Hypothecated)

iv. Out Sourced Companies (Monthly for Pledge / Quarterly for Hypothecated)

h. An outsourced agency charges Rs.1500~2000 per visit and Rs.4 per kilometer and is

claimed from customer.


a. Vigilance officer gets updated data by approaching at branch where facilities of that

customer are parked and then he visits customer’s premises for inspection. This cost



lot of time and traveling. System should facilitate to get updated data of each

customer in CAD using CDB.

b. If the stock is pledged by multiple banks then there should be a mechanism by which

all banks can inspect the stock simultaneously.



3 Home Remittance Cell (HRC)

ABL has arrangement with 21 foreign banks and exchange companies throughout the

world. Home remittance cell located at Saima Trade Tower (Karachi) is responsible to

deliver remittances to the beneficiary. Normally 500 transactions are processed in a day

(250~300 DDs and 250~300 online).Beneficiary need to have a valid account in any bank

to receive remittance.

3.1 Remittances Processing

a. Remittances are delivered through two channels:

i. SWIFT

ii. Tested E-mails Messages

b. SWIFT messages are received at COK and are delivered manually to HRC once in a

day. Email messages are received at ([email protected]). Email messages are tested

and are decoded by HRC staff before further processing.

c. Funds are delivered to beneficiaries by two channels:

i. Online Credits

ii. Demand Draft

d. In case beneficiary has account in ABL, remittances are transferred to beneficiary’s

account using online facility. Funds are transferred to payee branch using PAK

account. In case of unavailability of online facility, an IBCA can also be sent to the

payee branch.

e. In second case if the beneficiary is of other bank, following steps are performed for

issuance of DD:

i. Credit voucher for DD issuance

ii. Entry in DD Issuance Register

iii. Instrument preparation

iv. Covering letter for beneficiary bank

v. Credit advice to payee branch

vi. PAK account transaction


mailto:[email protected]


f. DDs are made manually by branch and are dispatched to beneficiary via courier. “DD

issuance register” is maintained to record the particulars of DD issued.

g. Additional information is required from remitter if remittances are above $10,000.

h. To encourage remittances, government of Pakistan pays a rebate of 25 Riyals per

transaction to remitter. By improving deliveries bank can be in position to capture a

major market share. Depending upon the pricing agreed with bank or agency about

five Riyals are claimed against each remittance transaction.

i. COBOL based software is used to punch all data to generate reports for SBP.

3.2 MIS Reporting

Following is the detail of reports submitted by HRC to different bodies:

Report Name Compiled For Frequency

Returns (Country wise, purpose wise) SBP Monthly



Management Reporting (Account wise, Agent Wise,

Country Wise)

FI division Monthly

ADC Reporting ADC Monthly


a. System should support bulk file uploading of the SWIFT messages so that all data can

be uploaded electronically rather punching every transaction individually.

b. SWIFT department has provided consent on the possibility of downloading these

messages from SWIFT into the required format. This can substantially reduce the

work load and can increase the capacity of processing of HRC.

c. Concept of e- Branch is under discussion among ADC, Cash Management and SBP.

Idea is to make HRC and cash management transactions directly to this branch. Some

banks are using “Bankers Cheque” in place of DD. This instrument is payable at any

branch. ABL is also planning for the implementation of this instrument.

d. Financial Institution Division (FI) is responsible for arrangements and marketing with

foreign banks and agencies. They need to have a strong and well equipped back office

(HRC) capable to process entire transactions from all sources. Analytical view of

transaction should be available to FI. Centralized database for HRC and provision of

analytical dash boards for FI and ADC executives can help in fine tuning the process

and bringing further business

e. By introducing technology, remitter and beneficiary can be informed by providing

“Remittance tracking system” and SMS alerts. In this way services can be improved.

f. HRC is incurring an average expense of Rs.70,000 per month in terms of courier

expenses. This expense can be converted into an investment to improve

communication channels. This can help to cut the recurring cost and to improve the

efficiency of the process.

g. It is thought that if the above mentioned improvements are incorporated, then HRC

can handle twice or thrice the load of existing transactions, In fact FI has a lot of

business available but due to these limitations they are unable to process it.



4 Central Processing

- Nostro account Reconciliation

- Pak Account Reconciliation

- ABRTC

4.1 Nostro Account Reconciliation

a. “Daily Activity Report” for all nostro accounts is received through SWIFT from

corresponding banks and agencies. This report is received from SWIFT in hard copy

format and is punched into COBOL based software.

b. Data of responding branches for contra entries is received on floppy disk from

Treasury, and is uploaded into system.

c. System reconciles the entries of daily activity with contra entries based upon certain

criteria (Account number, amount etc.). Unmatched transactions are reported

separately by system, and reconciliation department follows the transactions until

their reconciliation.

d. In case of FOBC, funds are credited to nostro account on the presentation of

instrument. As per international law if instrument is bounced back then payee bank

can recall its funds within 21 days so FOBC funds are not transferred to beneficiary

account before 21 days. To record FOBC presentation and maturity dates “FOBC

Register” is maintained.

e. If FOBC is of bank having no arrangements with ABL, then instruments are

presented through any other bank or agencies with which ABL has arrangements.

SWIFT and fax messages are being used for follow ups.




a. System should support electronic data transfer from SWIFT and from treasury to

central processing wing, so that manual intervention and delays can be reduced.

b. A script can help to translate SWIFT data into required format (SWIFT department

acknowledged that it is quite possible), rather central processing again punch data

into system. In this way duplicate effort and error margins can be eliminated.

c. There is no auto reconcile facility for nostro accounts. System should auto reconcile

on certain parameters (detail system study is required to explore these parameters).

d. Email communication among HRC and reconciliation departments (Nostro & Pak

Rupee) can help to reduce data transfer and reconciliation overheads.

e. System should be able to maintain maturity dates of FOBC and should prompt on due

dates, so that funds can be transferred to beneficiary on its maturity.



4.2 Pak Account Reconciliation

a. Data from CDB is uploaded to “Pak account reconciliation software”. System

reconciliation is done and unmatched entries are manually reconciled. Reports are

printed and sent to branches for balancing.

b. Transactions of amount 10 million and above are reconciled daily and branches are

intimated in case of any discrepancy.

c. SBP applies penalty on transactions being parked in PAK account more than 30 days.


a. PAK account reconciliation advices are currently sent through courier to branches.

These should be sent through email.

b. If any branch is offline then printed report of PAK account transactions are sent

through courier. Provision to send electronic data to central wing should be there.

4.3 Allied Bank Rupee Travelers Cheque

a. Central processing wing issues RTC Instruments to the branches on their request.

b. Branch en-cash the ABRTC and send these to COK. In case of lost, ABRTC wing

circulates information to nominated branches for stop payments. Encashment

summary is also sent by branch to ABRTC wing.


Advices for sale and encashment of ABRTCs should be automated in the system



5 Alternate Delivery Channels

5.1 ATM Card Generation

a. Separate ATM request form is filled by account holder at branch. Branches dispatch

this form to ATM wing located at COK for card generation.

b. On receiving of form, data is punched in excel sheets for record purposes and form

contents are verified in two steps.

i. In first step account title, CNIC number and address are verified with UniBank

account using CDB. If any information is incorrect then form is sent back to

branch for its correction.

ii. In 2nd step, inter branch signatures are verified using “IBS Book” and in case of

any mismatch, form is sent back to branch.

c. Verified forms are punched in TPS Software (Transaction Processing System,

Microsoft Access based). Pre Production Report is taken from the system for physical

verification with ATM form. After this cards are produced.

d. A report of printed card is sent to PIN code generation department. Pins are generated

using HSM (Host Security Module, Part of TPS). For security reasons, pins are

generated and dispatched one day later than the ATM Card.

e. After this data is provided to IT for upload to Phoenix server.




a. Most of the information which is punched into the system from ATM form is also

available in UniBank, there should be interfacing available in UNI bank so that

branches can enter data from the point of origination.

b. ATM wing should gather the requests for new ATM cards directly from UniBank and

upload it in TPS for card generation. This can help to discontinue dispatch of forms,

data punching in excel, manual verification steps and can make the process fool proof

and efficient.

5.2 Call Center

a. Third party software is used in call centre which is capable of call recording. An

ATM (Phoenix) terminal is also provided to verify the account related information.

b. Technology is sourced by ZRG where as man power is outsourced to Erwin tech



c. Complaints logging is manual and tickets are generated against each complaint where

some corrective action is required, these tickets are forwarded to concern

departments/branches for appropriate action.

d. ATM Card can be cancelled or blocked after verification, if any customer report for

lost.


a. Complaint Management System should be available at call center. Issuance

processing and monitoring of tickets should also be automated

5.3 SWIFT

a. SWIFT stands for Society for World wide Inter-bank Financial Telecommunications.

It is a Belgium based company providing messaging facility to financial institutions.

All the technical support is provided by SWIFT from Belgium. Server is dialed

through ISP (Cyber Net) and Equent reata is their network partner as back up

account. This software is operated on Microsoft windows 2000 server and uses 16 –

bit security algorithm.

b. There are 10 SWIFT centers at ABL which are controlled through COK. Their server

setup is as under:

i. Production Server

ii. Backup Server

iii. Disaster Server

c. There are three types of licenses which are

i. Server License

ii. PC Connect License

iii. LAN Network License

d. Instructions or messages are entered, authorized, verified and uploaded in the system.

e. Terminals dial through external modem to main server at COK which is then

connected to main server of SWIFT. A terminal is automatically disconnected after

60 seconds if remains idle.



f. “Incoming Message Register” is maintained for incoming messages and similarly

“Outgoing Message Register” is maintained for messages that are sent from SWIFT

center to other branches.

g. Messages from branches are dispatched or sent in person to SWIFT office.

h. Incoming messages are stamped, signed and sent through TCS to branches.


Communication of messages with branches can be routed through email. For security of

these messages certain test code or encryption algorithms can be used.



6 Special Asset Management (SAM)

a. Role of SAM is to negotiate with customer having non-performing loans. SAM tries

to regularize, right off or receive back the non-performing loans (NPL).

b. Currently there are 27000 non-performing accounts out of which 500 accounts are

worth more than Rs.10 million each. Out of 27,000 accounts, 780 are agriculture

loans.

c. Risk Management group identifies the NPL to SAM and these classified loans are

transferred to SAM branches from the branch where the loan was originally parked.

There are 20 SAM branches in the country specially setup for this purpose.


a. Most of the time is spent on data collection from SAM branches as no software

support is available. System access can help to overcome this problem.

b. System should be capable to produce reports and analysis on customer’s payments,

directors and company information.

c. There is no system available in SAM to keep record of legal advisors, cases attached

with each advisor, payments and due dates. There should be a system capable of

handling all these requirements.

d. This department is not yet involved in Core Banking study exercise. Perhaps their

participation can give some value.



7 Manual Registers

1. Account opening register

2. Cheque book issue register (for current & saving it is different).

3. Term Deposit ledger.

4. ATM Card Register

5. ATM pin code issuance register.

6. Cash Deposit Long book (Cashier Long Book)

7. Cheque Deposit Long book (Cashier Long Book)

8. Inward Clearing Register

9. Outward Clearing Register

10. Intercity Clearing Register

11. OBC Register

12. Online Register

13. SNDR Register

14. TDR Register

15. Cashier Daily memo book

16. Cash in/out register

17. Suspense register

18. Cash in Transit Register

19. SBP Cash Register

20. Cheque return register

21. DD issue register

22. DD Payable register

23. TT outward

24. Balance book for DD

25. Pay order issue register manual

26. DAC issue registers.

27. Locker Register

28. Register of Visits

29. Keys Register



30. SFF – Safe, Fixture, Furniture Register for Fixed Assets (Category Wise)

31. Attendance Register

32. Leave Record Register

33. Stock of Stationary in Hand register

34. Security Stationary Register

35. Office Order Register

36. Prize Bond Register

37. Advance Rent Register

38. Voucher Register

39. Voucher Movement Register

40. Executives’ Visit Book

41. Peon Book

42. Stamps in Hand

43. Inward Dak Register

44. Outward Dak Register

45. Markup registers

46. BFL Register / Sanction Advice

47. DAC Issuance Register

48. Document Movement Register

49. Safe Keeping Register

50. Hypothecation Register

51. Pledge Register

52. Intimation Register

53. Cash Chest

54. Cashier Memo Book

55. Signature Register (from People to whom cash is given for sorting)

56. Cash In Out Register

57. SBP Register

58. LC Opening Register

59. Payment Against Documents (PAD) Register

60. LC Lodgment Register



61. FIM register

62. FATR Register

63. Force FIM register

64. FUBA Register

65. FADB Register

66. E-Form Issuance Register

67. FDBC (Foreign Documentary Bills for Collection) Register

68. Proceed Realization Certificate Register

69. Advance Payment Register

70. FBN (Foreign Bills Negotiated) Register

71. FBD Register

72. FBP (Foreign Bills Purchased) Register

73. Finance against Packing Credit (FAPC-I) Register

74. Finance against Packing Credit (FAPC-I) Register

75. Finance against Packing Credit (FAPC-II) Register

76. FC Account Opening Register

77. FC Long Book

78. FC Cashier Memo Book

79. FDD Register

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50852002 abl-study-final-doc-12-04-2006

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Transcript of 50852002 abl-study-final-doc-12-04-2006