UNIVERSTY OF KARACHIKARACHI UNIVERSITY BUSINESS

SCHOOL

MBA Banking & Finance 2014

Semester II

ABOUT ASKARI BANKAskari Bank Ltd (formerly Askari Commercial Bank) is a commercial and retail bank in Pakistan It was founded on October 9, 1991, as a Public Limited Company. On June 21, 2013 the bank was acquired by Fauji Group. It is a branch of Army welfare organization. (AWT). The Bank is listed on the Karachi, Lahore & Islamabad Stock Exchanges

ABOUT ASKARI BANKAskari Bank has expanded into a nationwide presence of almost 250 Branches, and an Offshore Banking Unit in Bahrain. A shared network of over 3000 online ATMs covering all major cities in Pakistan supports the delivery channels for customer service. As on December 31, 2013, the Bank had equity of Rs. 9 billion.

The transfer of fund from a branch of bank to the

other bank on which the instrument is drawn,

without involving cash through “state bank’s

clearing house”.

Inward clearing Outward clearing

“Inward clearing means cheques received by

the bank from other bank”

The inward clearing process decreases the deposits of the bank.

The main operational task done by the banks were: Validation of customer account with the “CORE

BANKING SYSTEM”(CBU). Searching the physical instrument or return in. Archival of all the physical instrument.

“Outward clearing means cheques sent for

collection”

“The cheque of other bank, which the

account holder deposit in their account”

Outward clearing increases the deposits of the bank.

LOCAL CHEQUE CLEARING

• (within the same geographical/clearing zone)INTERCITY CHEQUE CLEARING

• (drawn on a bank outside the local clearing zone)FOREIGN CHEQUE CLEARING

• (drawn on a bank/location outside the country of the collecting bank)

When we receive inward clearing we have to

debit our customer account and when we receive

outward clearing we have to send it to relevant

bank for payment.

For example:

A cheque drawn on “HBL” deposited in “MCB” bank is an

outward cheque for “MCB” & is an inward for “HBL”

In inward we are the

paying banks

in outward we are the

collecting banks on behalf

of the customers & will

launch the instrument in

clearing

ChequesDemand draft Pay order Travelers cheques

NIFT - National Institutional Facilitation Technologies

(Pvt.). Ltd. was incorporated in September 1995 as joint

venture between a consortium of six banks and

entrepreneurs from the private sector. All commercial

banks and all of their branches in major cities avail

NIFT's services. As of January 2014, 38

commercial banks and their 8382 branches in 273 major

cities, and towns utilize NIFT's services through

28 Data Centers.

NIFT commenced its ACH(automated clearing house)operations in 1996, after signing an agreement with THE STATE BANK OF PAKISTAN.

ACH is computer based clearing & settlement facility for interchange of electronic debits & credit among Financial Institution.

OVERNTGHT CLEARING

• overnight clearing included return cheques processing (24 hour clearing cycle)

SAME DAY / HIGH VALUE CLEARING

• Same day/high value clearing included return cheque processing(3 hour clearing cycle)

OVERNTGHT CLEARING

• overnight clearing included return cheques processing (24 hour clearing cycle)

SAME DAY / HIGH VALUE CLEARING

• Same day/high value clearing included return cheque processing(3 hour clearing cycle)

MICR (magnetic ink character recognition) is a technology used to verify the legitimacy or originality of paper documents, especially checks. Special ink, which is sensitive to magnetic fields, is used in the printing of certain characters on the original documents.

Crossing stamps Clearing stampsDate(which should be current)Endorsement stamp on back sideAmount in figures & words should be matchedSignature verificationTransfer Stamp

NORMAL CLEARING CYCLE

SAME DAY CLEARING CYCLE

SPECIAL CLEARING CYCLE

INTERCITY CLEARING CYCLE

Central repositorySound management Cuts costShorter cycleSaves employees effortNo loss of cashConvenient

Short cycle Responsive Safety Simplicity