Professional Documents
Culture Documents
Course Objectives
Learn what a Bank is Banker Customer Relationship What different accounts banks offer
What checks are and how they work Learn about electronic banking SBPs Prudential Regulations and SECP Rules Learn about the Financial System
3
Borrowers
(Deficit Unit)
Save
and Expect a Price for Sacrifice
Borrow from
Savers & Pay a Price
Suppliers
Direct Contact
Users
4 4
Banks
Motive Savers to deposit Saving for a Price
Borrowers
(Deficit Unit)
Borrowed
Savers Savings from Bank & Pay a Price to Bank
Save
and Expect a Price for Sacrifice
Suppliers
Custodian
Users
5
2ND OPINION
Word Bank is derived from the German word Bank which means joint stock fund.
EARLY GROWTH
Babylonians developed the banking system as early as 2000 B.C and their temples were used as Banks coz of the prevalent respect & confidence.
King Hammurabi laid down rules & regulations for banking operations. In 687 B.C Gyges (Croesus), King of Lydia invented gold and silver ingots which were used as money. Earliest known public bank is called as Bank of Venice which was established in 1157 A.D Then various other banks during 1336 to 1349 were established in Italy
In 1401, German public bank was formed comprising the operations of discounting ,deposit and transferring of money.
In 1407, Bank of Genoa was formed. In 1587, a state bank under the name of Banco di Rialto was formed in Genoa. In 1609, Bank of Amsterdam was also formed. Finally in 1690, Bank of Hamburg came into existence with the business of accepting deposits of fine silver or foreign moneys and to run accounts on these deposits.
MODERN BANKING
Modern banking originated in the 14th Century in Barcelona. Banking in its modern form started from Britain when King Edward II of Great Britain established the office of Royal Exchanger for changing foreign money at the profit for the benefit of the Crown. Later on this business was taken over by goldsmiths & they introduced strong safes to fulfill their requirement.
They issued notes or receipts to their depositors in respect of the cash or articles left with them and they were called as Goldsmith Notes.
An act passed in 1708, the privilege of issuing notes was withdrawn from Joint Stock Co and confound to private banks with more than six partners.
Later on check currency was introduced and this proved to be very suitable.
In 1946, the Labour Government nationalized the bank of England and transferred the existing stock to the nominee of the British treasury and thus Governors, Dupty Governors and Directors were appointed. In 1955, British Bank made a departure by undertaking hirepurchase finance for companies such as buying industrial plants and machinery but interest on it was very high.
BANK?
BANK
A bank is a commercial or state institution that provides financial services , including issuing money in various forms, receiving deposits of money, lending money and processing transactions and the creating of credit.
A bank is a business. Banks sell services - financial services such as car loans, home mortgage loans, business loans, checking accounts, savings accounts, certificates of deposit, and credit card services. Some people go to the bank in search of a safe place to keep their money. Others go to the bank seeking money for loans to buy houses or cars, start businesses, expand farms, or do any of the other things that require borrowing money.
BANKER
A Person or an Organization doing banking business i.e accepting deposits and granting loans to individuals and to corporate houses.
CUSTOMER
A Person who has some sort of account either current, fixed or saving with the banker.
Account Opening
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Rule #1: The customer is always right. Rule #2: If the customer is wrong, see Rule #1. - Stew Leonard
Rule #3: If you can't remember the rules, ask your customers. They will remind you. - Ron Kaufman
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Customers are not an interruption to our work; they are the purpose of it.
21
ATTITUDE
Words can be refused but a positive attitude that springs from sincere belief cannot
People are persuaded more by attitude than logic because: People are ruled by emotions Emotions are contagious
22
ENTHUSIASM
Enthusiasm lets you do things with excitement and energy Its like an electric current that creates attraction
It invites people to join with you in your belief in what you are selling It shows in your voice, body language and willingness to do whatever you can to provide your customers with the best possible service
23
If attitude is mind, enthusiasm is body, then passion is spirit Its about having love and respect for what you do personally and professionally
24
POSITIVITY
Read something inspiring everyday Find a quote that means something to you and hang it where you can see it Look for new crowd if people around you are angry and bitter
KNOWLEDGE
Business knowledge
Industry knowledge
Company knowledge
Product knowledge
Process knowledge
Policy knowledge
Selling knowledge
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PERSISTANCE
28
3%
5%
Move away
Other friends
9%
14%
Competitive reasons
Product dissatisfaction
Customers Need.
Fulfill the customer's six basic needs Fairness Friendliness Understanding Control Options Information
32
To be taken seriously To be treated with respect To get immediate action To clear up the problem so that it never happens again To be listened to
Customers Want.
To be understood
To be respected
To feel that theyre in control To be treated fairly To be recognized
TIP: Customers are humans! Deal with their human emotions first before you address the problem. 34
Conversation Tips
The person who speaks first, generally sets the tone for the conversation
The person who asks good questions, can generally control the content A good listener can generally control the outcome
37
Speak First
Smile at the Customer Say the Name (if you know it)
Facial Expressions
Body posture & movement
Hand gestures
Touching
Physical Distance
Dress!
39
What they say How they speak (pitch/tone/speed/volume) How they look to us How important do you feel each one is? When we form an opinion about somebody, how much do each of these influence us?
What the person says How they speak % ____ ____
____
100%
If you want small changes, work on your behaviour; if you want quantum-leap changes, work on your paradigm"
Stephen R. Covey.
Body Language
Over 50% of the message Read signals and be aware of your own
Expressing Opposition
Showing Interest
Thinking/ Deciding
Lacking Interest
Don't Say...
1. No 2. That's not my job 3. I don't know 4. Calm down 5. I'm busy right now 6. Call me back 7. You want it when? 8. I have to put you on hold
44
Do Say...
1. This is what I can do for you 2. Here's how I can help you 3. I'll find out 4. I'm sorry 5. I'll be with you shortly 6. I'll call you back 7. I'll try my best 8. Can you hold for a moment?
45
3 Steps to NO
Importance of Customer
most important person in any business pays our salaries is not dependent on us, we are dependent on them is not an interruption of our work, but the purpose of it will go where s/he receives the best service
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48
Duty of Secrecy
49
Maintain Secrecy
Banker must not disclose the condition of his/her customers' account except on reasonable and proper occasion and the obligation to observe secrecy does not end even with closing of the customers' account. In some cases, additional privacy is provided to beneficial owners through the use of numbered bank accounts or otherwise.
51
Obligation of Secrecy, may not be considered essential on the following : 1. Under Compulsion of Law 2. Duty to Public to Disclose
Termination of Relationship
1. Notice by a customer 2. Notice by Banker
Obstinacy of the Customer Death of Customer Customers Insanity Customers Insolvency Order of Court Assignment of Account Unsatisfactory Operation
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58
What is service ?
60
What is service ?
A Service is Intangible, yet it provides satisfaction to the Customer
61
What is Service?
Meeting Customer Expectations
What is Service?
When one meets or exceeds the customers expectations Only promise what you deliver and deliver what was promised
Finding out what Customers want Designing a service to meet customers needs Providing customers with best service Setting Service Standards Measuring Service Performance
64
Basic Rule
The basic rule in providing excellent customer service is to make it as easy, convenient and pleasant as possible for your clients to do business with you .
65
CUSTOMERS
Who is a customer? Why customer is so important to us? Can we succeed without partnering with our customers? How do we develop long term relationships with our Customers? How do you evaluate MCBs services if you are a customer?
Internal
People within the business who need our service(s) to get their job done
Customer understanding
Clarity
Communication
Change Co-ordination Can do
Knowledge
Confidence
ATTITUDE
Words can be refused but a positive attitude that springs from sincere belief cannot
People are persuaded more by attitude than logic because: People are ruled by emotions Emotions are catching
ENTHUSIASM
Enthusiasm lets you do things with excitement and energy
Its like an electric current that creates attraction It invites people to join with you in your belief in what you are selling It shows in your voice, body language and willingness to do whatever you can to provide your customers with the best possible service
If attitude is mind, enthusiasm is body, then passion is spirit Its about having love and respect for what you do personally and professionally
POSITIVITY
Read something inspiring everyday Find a quote that means something to you and hang it where you can see it
Look for new crowd if people around you are angry and bitter
Count your blessings Find attitude mentors
KNOWLEDGE
Business knowledge
Industry knowledge
Company knowledge Product knowledge Process knowledge Policy knowledge Selling knowledge
Service Quality
Good
Expectation
Bad
Expectation
Excellent
Expectation
Importance of Customer
Most important person in any business Pays our salaries Is not dependent on us, we are dependent on them Is not an interruption of our work, but the purpose of it Will go where s/he receives the best service
Importance of Service
If everyone in the chain gives good service, it will eventually pass on to the external customer
It costs 5 times more to get a new customer than to keep an existing one
Customers can spend up to 10% more on the same product with better service.
"Your most unhappy customers are your greatest source of learning. Bill Gates.
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90
CONSTRUCTIVE ATTRIBUTES
Be
UNCONSTRUCTIVE ATTRIBUTES
the first one to greet customer with a smile or acknowledge with a nod If the customer walks in and you are doing work on your computer, leave the screen and acknowledge Listen to the customer Ask questions to identify the actual issues Answer customer queries Guide the customer to the relevant source for answering queries or resolving problems
Do not greet/acknowledge the customer even if the CCR is preoccupied Keep looking at the screen while acknowledging/ talking to the customer Interrupt when the customer is talking Jump to conclusions when talking to customer to simplify matters Pass the customer to another person without assuring that he/she is the relevant source for answering the query
CONSTRUCTIVE ATTRIBUTES
Be empathetic and patient when handling complaints Be transparent in giving information to the customer Answer the phone promptly in 3 rings Close the customer encounter with inquiry Follow-up when assurance has been given Deliver service on time Be at the workstation at sharp 9:00 a.m. to serve the customer Handle multiple tasks/queries
UNCONSTRUCTIVE ATTRIBUTES
Display impatience while handling customer complaints Hide or misrepresent relevant information Do not answer phone in three rings Do not observe proper encounter closure Do not to follow-up even when assurance has been given to the customer Do not observe the committed time frame Not be ready to serve the customer at sharp 9:00 a.m. Not be able to prioritize/manage multiple tasks/queries
CONSTRUCTIVE ATTRIBUTES
If some customer has to be taken to lockers or BMs room etc accompany them to the desired destination or have someone take them. Communicating with the customer using aap regardless of the age of the customer Dont wait for the customer to approach you. You should be the one to approach the customer and show your care. Ensure that the premises is kept clean, comfortable and presentable Ensure clean desk policy all the time
UNCONSTRUCTIVE ATTRIBUTES
If some customer has to be taken to lockers or BMs room etc. direct them by hand where to go Communicating with the customer informally i.e. using tum etc. while addressing the customer Wait for the customer to approach you when you see that he/she is encountering a problem e.g. while filling a deposit slip, cheque etc. Not be concerned about cleanliness and comfort of premises Have a cluttered desk
93
A market is never saturated with a good product, but it is very quickly saturated with a bad one.
Henry Ford
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95
96
any Complaint,
then ?
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Your customers have tried complaining and nothing changed, so they left?
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100
101
102
4. Find out what the customer wants, work out what you can do and do it quickly,
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5. If there are things you cannot do, say so and explain why,
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105
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8. Check that the customer is satisfied, and thank him/her for bringing the problem to your attention,
107
9. Work out what you can learn from the experience and how you can stop it happening again,
108
& 10. Make Contact, if appropriate, with the customer at a later date, to ask about his/her current experience of your service .
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Types of Customers
NATURE OF ACCOUNTS
Personal Accounts
These are non-business accounts of individuals:
Private individuals Lady Customers Minors Joint Accounts
NATURE OF ACCOUNTS
Business Accounts
Sole Proprietorship Partnership Accounts Company Accounts
Private Limited Companies Public Limited Companies
NATURE OF ACCOUNTS
Personal Representatives
Attorneys Accounts Executors and Administrators
NATURE OF ACCOUNTS
Other Accounts
Clubs, Societies, Associations Agents Executors and Administration Trustees Minor
NATURE OF ACCOUNTS
Other Accounts
Illiterate/Disable/Blind Persons/ Photo Government
MCB Employee Salary Accounts Non Residents NGOs
TYPES OF ACCOUNT
Current Account
Saving account Term & Notice time deposit
Types of Accounts
Individual Account
Single Joint
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Joint Account
An account in the name of two or more, other than partners or trustees is called a Joint Account. Operational instructions in the Application for Account Opening must be filled in clearly.
120
Joint Account
When such account is opened, it is necessary that the banker should obtain clear directions as to whether one or more of them shall operate the account.
The following points should be kept in mind regarding the Operations of Joint Account:
Joint Account
Use additional signature card
Zakat Declaration Form is required for both
Joint Accounts of individuals or accounts of Proprietorship and Partnership concerns can also be opened.
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Personal Accounts
Death of the Customer Lunacy of Customer Insolvency of Customer Joint Accounts and Mandate
These
accounts are opened in the name of the minor on the request of his guardian who signs the account opening form himself/herself, and gives his/her own specimen signature for the operation of the account,
In case of death of Natural Guardian, operation in the Account will be stopped. The Minor will be allowed to withdraw after attaining age of majority by producing evidence in this regard and after getting Legal Opinion from concerned offices.
If the Minor is survivor and has not yet reached the age of majority, the balance can be paid on the production of Guardianship Certificate from the competent Court of Law.
An account opened in the name of two or more persons is known as joint account. Joint account is not partnership or trust account.
When such account is opened, it is necessary that the banker should obtain clear directions as to whether one or more of them shall operate upon the account.
It is called a 'mandate for joint account'. However in the absence of such directions the banker should allow the operations under the signatures of all the joint account holders.
Upon the death of one of the holders of a joint account, the balance of which is repayable to the survivors, the account, will, of course, continue but the survivor or survivors should be requested to transfer the balance into a new account in his or their own names, a fresh account opening form, etc, being taken. When the balance is not repayable to the survivors(s), the account must be stopped and the concerned offices addressed in the matter.
Applications
to open accounts in the name of private firms will be made on AOF on which the names of all partners and the specimen signatures of those who intend to operate the account must be obtained.
Attested copy of Partnership Deed duly signed by all partners of the firm must be obtained.
GOVERNMENT ACCOUNTS
ACCOUNTS OF CUSTOMERS
CLUBS, SOCIETIES, & ASSOCIATIONS TRUST AGENTS PRINCIPAL EXECUTOR ADMINISTRATOR LIQUIDATOR
These are non-trading organizations and formed for the promotion of culture, science, education, recreational activities and charitable purposes etc.
Some of these institutions are registered under the Societies Registration Act. 1866, and are issued a Certificate of Registration after they have been found fit for registration.
The affairs of these institutions are administered by a body known as 'Governing Body or 'Managing / Executive Committee which draws its authority from the rules and regulations or bye-laws of the institution.
Types of Accounts
Business Account:
Sole Proprietorship Joint Stock Company (Public/Private) Partnership (Registered/Unregistered) Societies Associations/Club/Trust Autonomous Bodies Govt. Institutions (Federal/Provincial) Resident Non-resident
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163
1. Money Laundering
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167
M 5 Suspicious Transactions
168
Memory Quiz - M1 TO M5
M1 M2 M3 M4 M5
Sno.
Regulation
Your Choice
1 2 3 4 5
169
AML Measures Correspondent Banking Customer Due Diligence Suspicious Transactions Record Retention
M2
M3
Regulation
M4
M5
Your Choice
1 2 3 4 5
170
AML Measures Correspondent Banking Customer Due Diligence Suspicious Transactions Record Retention
M2 M4 M1 M5 M3
Select:
True or
False
SBP regulations relating to CDD / KYC / AML make the 1 new account opening difficult Proper account documentation and following CDD / KYC / 2 AML procedures provide satisfaction and protection to all branch staff against various types of risks
171
Select:
True or
False
SBP regulations relating to CDD / KYC / AML make the new account opening difficult
Proper account documentation and following CDD / KYC / 2 AML procedures provide satisfaction and protection to all branch staff against various types of risks
F T
172
Select:
S. no.
True or
False
True or False
1 2
3 4 5
173
Banks conduct their business allowed under Banking Companies Ordinance 1962 Banks are regulated by countrys central bank State Bank of Pakistan
Overdraft Privileges To Insure That All The Checks You Write Will Be Paid.
Accepting Deposits from public/others (Deposits) Lending money to public (Loans) Transferring money from one place to another (Remittances) Acting as trustees Keeping valuables in safe custody Government business
TYPES OF BANKS
CENTRAL BANKS COMMERCIAL BANKS
SAVING BANKS
MERCHANT BANKS MORTGAGE BANKS CONSUMER BANKS INVESTMENT BANKS DEVELOPMENT BANKS COOPERATIVE BANKS EXIMP BANKS CREDIT UNIONS BROKERAGE FIRMS
Quaid
inaugurated
17 8
CENTRAL BANK
It is the reservoir of credit.
BANKERS BANK
Provide short term credit to Commercial Banks by rediscounting first class bills and other securities. Responsible for the Gold standard to control the stability of exchange Rate.
MISCELLANEOUS FUNCTIONS
Publishes FS Development of banking system
Non Banking Financial Companies Medium and Long term financers Equity Financers Fixed Asset Financers
Others: Fund Management Companies Pakistan Postal Service Govt. agencies
18 2
1.
2.
3. 4.
18 3
Commercial Banks
Foreign Banks
Specialized Banks
Public Sector
Commercial Banks
1. 2. 3. 4.
First Women Bank Limited National Bank of Pakistan The Bank of Khyber The Bank of Punjab
5.
Sindh Bank
Albarak Islamic Bank BSC Allied Bank Limited Askari Bank Limited Bank Al-Falah Limited Bank Al-Habib Limited Bank Islami Pakistan Ltd. Burj Bank Ltd. Dubai Islamic Bank Pakistan Ltd. Faysal Bank Limited Habib Bank Limited Habib Metropolitan Bank Ltd
9. 10. 11.
Foreign Banks
1. 2.
3.
4. 5. 6.
Deutsche Bank AG
HSBC Bank Middle East Ltd. (Pakistan Operation) Oman International Bank SAOG The Bank of Tokyo Mitsubishi Limited
19 2
Specialized Banks
1. 2.
3.
4.
19 3
Islamic Banks
1.
2.
3.
4. 5.
19 4
Microfinance Banks
1.
2. 3. 4. 5. 6.
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4.
5. 6. 7. 8. 9.
China Investment Company Ltd. House Building Finance Corporation National Investment Trust Ltd Pak Brunei Investment Company Ltd Pak Iran Joint Investment Company Pak Kuwait Investment Company Pvt. Limited Pak Libya Holding Company Pvt. Ltd Pak Oman Investment Company Ltd Saudi Pak Industrial & Agricultural Investment Co. Pvt. Ltd.
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Segments
1. 2. 3.
4.
5. 6. 7.
Consumers
Agricultural Micro financing Islamic Banking
19 8
COMMERCIAL BANKS
Commercial banks receive deposits from the general public which are repayable on demand upon written orders of the depositors.
They provide short term finances to trade, commerce & industry. Fees are generally highest, and service is often impersonal. E.g. MCB, HBL, UBL, NIB, ABL, RBS, etc
SAVING BANKS
Saving banks are usually owned by depositors or creditors whose dividends are paid as interest on their accounts. Their Fee Is Lower Than Commercial Banks. Depositors Should Inform Them Before Withdrawing From Checking
Saving banks deposits are paid to depositors only on the submission of:
Pass book Certificate of deposit
MERCHANT BANKS
Finance domestic and international trade in UK These trades were financed by BOE and merchant banks charged commission for their services.
MORTGAGE BANKS
Mainly Deal in Loans for the acquisition or construction of real estate against the security of mortgages. They also deal in Loan association and farm loan association. E.g.
CONSUMER BANKS
Provide finances for purchasing consumption goods for the use of borrowers. Consumer finance companies, sales finance companies and credit unions are some popular forms of consumer banks.
E.g. MCB Bank, HBL, NIB Bank, SCB, ABL, UBL, etc.
INVESTMENT BANKS
Assists business houses and the Govt.al bodies to raise money through the sale of stocks and bonds for long term purposes.
Perform usual function of raising deposits of idle money from public. E.g. IDBP, PLHC, Pak Oman, Kuwait Investment, SPIAICL, etc
DEVELOPMENT BANKS
Provide long term development finances to the trade, commerce and industry. Few development banks in Pakistan are:
Agriculture Development Bank of Pakistan Industrial Development Bank of Pakistan etc.
EXIMP BANKS
Provide finance for the promotion of trade, commerce and industry.
BROKERAGE FIRMS
Offer limited Banking services. They offer low cost or free savings and checking coordinated with investing. They require large minimum balances.
CREDIT UNIONS
Credit Unions are not for profit FI. They are typically formed by the employees of a company, labor union, or a religious group and operated as a cooperative. They offer a full range of Financial services
Pay higher rates on deposits and charges lower rates on loans than commercial banks.
SBPs PRS:
1. 2. 3. 4. 5. PRs for Corporate/Commercial Banking PRs for SMEs PRs for Consumer Financings PRs for Agriculture Finance PRS for MFBs
NBIFs Rules
Free bank Act was passed in 1838,which allowed the opening of a bank by any group of people who could deposit US bonds or Real estate bonds or mortgages with state Controller.
National Bank Act was passed by Congress in 1863, which required each national bank to deposit US bonds =1/3 of its capital.
This provided strength to the Notes issued by National Bank as they held their value.
The banking Act in 1935, laid the foundation for the Federal Reserve System by establishing federal reserve Committee charged with controlling open market operations and buying and selling of Govt securities. Banking system of US has some unique features as it is based on dual Banking and these features are as follows: Unit Banking: bank limited its business in single bank location. Branch Banking: Has no of branches for its operations as well as main office & they are controlled by BODs.
Holding Company: Hold a controlling stock in a group of banks.
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No!
Banks are required to create following reserves from the funds before they lend.
1. 2.
(CRR) (SLR)
For creating reserves, Funds available are divided into two types of liabilities:
1.
CRR:
Cash Reserve is maintained in the form of cash. It is maintained with SBP for clearing and miscellaneous purposes.
SLR:
Revenues of GOP are less than its Expenses. To meet the short fall (deficit) in the revenue, GOP has to borrow. For this purpose, GOP (central & provincial government) issue securities (bonds) of varying terms and amounts.
21 6
SLR
Examples of securities/bonds issued by GOP are Pakistan Investment Bonds, Market Treasury Bills, Defence Saving Certificates, Special Saving Certificates. GOP receive cash when banks and individuals purchase these securities. SBP, on behalf of and at the directions of GOP, requires banks to investment a minimum of 9% of their Demand Liabilities (mainly deposits) in securities issued by central or provincial government or the agencies of these two. This form of borrowing by GOP is as such rightly termed as deficit borrowing.
21 7
Security Deposit Account (Amount deposited by Supplier of Stationery and Furniture etc. as security)
Sundry Deposits Account
22 1
Rs. 20,000
1,000 Rs. 1,800
Rs. 17,200
22 3
Please refer to BSD Circulars Nos. 25 and 26 dated October 17, 2008 on the captioned subject.
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BSD Circular No. 29 of 2008 November 01, 2008 Cash Reserve Requirements
Time Liabilities (including Time Deposits with tenor of 1 year and above) will not require any Cash Reserve.
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BSD Circular No. 29 of 2008 November 01, 2008 Cash Reserve Requirements
It has been decided to reduce Cash Reserve Requirements by 1% as under with immediate effect instead of 15th November 2008 as earlier notified by above referred circulars:
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BSD Circular No. 29 of 2008 November 01, 2008 Cash Reserve Requirements
Weekly average of 5.0% (subject to daily minimum of 4.0%) of total Demand Liabilities (including Time Deposits with tenor of less than 1 year)
227
Reserve Requirement:
i) Weekly average of 6.0% (subject to daily minimum of 5.0%) of total Demand Liabilities (including Time Deposits with tenor of less than 1 year) ii) Time Liabilities (including Time Deposits with tenor of 1 year and above) will not require any Cash Reserve.
Cash Reserve & Statutory Liquidity Requirements b. Effective from 15th November, 2008:
In line with earlier Circular No. 20 of October 8, 2008, it is reiterated that the CRR will be further reduced as under: i) Weekly average of 5.0% (subject to daily minimum of 4.0%) of total Demand Liabilities (including Time Deposits with tenor of less than 1 year)
ii) Time Liabilities (including Time Deposits with tenor of 1 year and above) will not require any Cash Reserve.
Circular Page 3 230
Banking means:
The accepting of deposits of money from the public The purpose of accepting deposits is lending and investment
The deposits are repayable on demand or otherwise, and withdrawable by cheque, draft, order or otherwise
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CHEQUES
Cheques Are The Hubs Of The Banking System Handwritten Notes That Tell Bankers That How Much Money To Pay Out Of Your Account TYPES OF A CHECK
BEARER CHEQUE ORDER CHEQUE CROSSED CHEQUE OPEN CHEQUE
BEARER CHEQUE
Cheque bears the phrase or bearer after the name of the payee. Amount under such cheque is payable to any person who presents it before the banker Cheque does not require endorsement.
ORDER CHEQUE
Phrase Or order is written after the name of payee. Amount is payable only to that person whose name is mentioned in the cheque. Cheque requires endorsement if it I to be cashed by any other person.
CROSSED CHEQUE
Cheque which bears across it bears two parallel transverse lines. B/w these two lines the cheque may also contain the phrase & Co. or Not Negotiable or A/c Payee Only. This cheque is mostly used in business circle. Objective of this cheque is to protect the amount from forgery & fraudulent.
OPEN CHEQUE
It can be presented by payee to the bank and can be cashed a crossed the counter. Open cheque means that the crossings are cancelled and these must be initiated by the drawer.
It is very risky coz if it get lost ,it can be easily cashed by the person who gets it.
Name of a person or company to who can demand the amount of the check
Amount to be paid
Date
Counter Fall
Check Routing #
Depositors Sign
NAME OF A/C HOLDER & A/C NUMBER
A minimum balance is the least amount of money that a bank requires you to keep on deposit to qualify for certain balance like reduce fee or free checking.
Individual
Duly filled Account Opening Application
In case the CNIC does not contain a photograph, the bank in addition to CNIC, should also obtain any other document such as driving license etc. that contains a photograph. However, if the individual does not have any other valid document which bears photograph following documents should be obtained: A copy of the photograph duly attested by gazetted officer or Nazim A copy of CNIC without photograph duly attested by the same person who attested the copy of photograph as per above. (Ensure that the CNIC and the photograph are of the same person whose account is being opened.) A confirmation in writing to the effect that the individual have no other document bearing photograph
250
In case of a salaried person, attested copy of his/her service card/ salary slip or any other acceptable evidence of service, including but not limited to a certificate from the employer. In case of non-salaried/un-employed individual, KYC should be conducted with extra vigilance and source of income/ funds should be validated prudently. In case of illiterate person, a passport size photograph of the new account holder besides taking Left and Right thumb impressions on the account opening application & Specimen Signature Card (SSC). In case of a customer with shaky signatures the account should be opened as Photo Account. All cheque withdrawals are in physical presence of customer. In case the signatures mismatch with CNIC, undertaking as per Annexure to be obtained from him/her.
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Sole Trader/Proprietorship
Sole Trader / Proprietorship declaration
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Partnership
Attested copy of Partnership Deed duly signed by all partners of the firm. Attested copy of Registration Certificate with Registrar of Firms. In case the partnership is unregistered, this fact should be clearly mentioned on the Account Opening Form.
Authority letter in original, in favor of the person authorized to operate the account of the firm duly signed by all partners.
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Copies of CNIC of all the Directors verified through NADRA Online VeriSys and attested by an officer of the bank.
Note : Authorized officer of the bank must see the Original documents and affix the stamp Original Seen along with AS/IBS number under his seal and signature before placing the copies in record
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Board Resolution?
A written document or statement that records a decision or action made by a Board of Directors during a board meeting. The board resolution can be found in the minutes book of the Company. Board resolution can also be referred to Director Resolution, or company board resolution. The Board of Directors of a company is responsible for deciding and making major commercial decisions for and on behalf of the Company. Some decisions passed in the form of Board Resolution are as follows:
A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization. Other names include board of governors, board of managers, board of regents, board of trustees, and board of visitors. It is often simply referred to as "the board".
Board Resolution?
Opening & operation of a bank account (sample of board resolution) Purchase of property for business use Purchase of company's motor vehicle Application of banking facilities with the banks Payment of dividends Election of new members or Appointment of new director Acceptance of the resignation of board members Other business matters
The Memorandum of Association sets out the company's name, where the registered office of the limited company is situated and what it will do
The memorandum of association of a company, often simply called the memorandum (and then often capitalized as an abbreviation for the official name, which is a proper noun and usually includes other words), is the document that governs the relationship between the company and the outside.
The Memorandum and Articles of Association must be carefully read. The Memorandum is the constitution of the company and the Articles define the powers of the directors; when these powers are not clear, the company should be asked to explain what procedure has been adopted to regularize the position. A company cannot do business of a character not included in the Memorandum, but usually these powers are very extensive. The Memorandum will show what are the borrowing powers, etc; and what was the capital of the company at the time of formation.
Memorandum of company limited by shares. In the case of a company limited by shares, (a) the memorandum shall state (i) the name of the company with the word "limited" as the last word of the name in the case of a public limited company, and the parenthesis and words "(Private) Limited" as the last words of the name in the case of a private limited company; (ii) the Province or the part of Pakistan not forming part of a Province, as the case may be, in which the registered office of the company is to be situate; (iii) the objects of the company, and, except in the case of a trading corporation, the territories to which they extend;
Memorandum of company limited by shares. (iv) that the liability of the members is limited; and (v) the amount of share capital with which the company proposes to be registered, and the division thereof into shares of a fixed amount; (b) no subscriber of the memorandum shall take less than one share; and
(c) each subscriber of the memorandum shall write opposite to his name the number of shares he takes.
(a) whether or not the company has a share capital, the memorandum shall state (i) the name of the company with the parenthesis and words "(Guarantee) Limited" as the last words of its name; (ii) the Province or the part of Pakistan not forming part of a Province, as the case may be, in which the registered office of the company is to be situate; (iii) the objects of the company, and, except in the case of a trading corporation, the territories to which they extend;
Memorandum of company limited by guarantee. (v) that each member undertakes to contribute to the assets of the company in the event of its being wound up while he is a member, or within one year afterwards, for payment of the debts and liabilities of the company contracted before he ceases to be a member, and of the costs, charges and expenses of winding up, and for adjustment of the rights of the contributories among themselves, such amount as may be required, not exceeding a specified amount; and
(b) if the company has a share capital, (i) the memorandum shall also state the amount of share capital with which the company proposes to be registered and the division thereof into shares of a fixed amount; (ii) no subscriber of the memorandum shall take less than one share; and (iii) each subscriber shall write opposite to his name the number of shares he takes.
Memorandum of unlimited company. In the case of an unlimited company, (a) whether or not the company has a share capital, the memorandum shall state (i) the name of the company;
(ii) the Province or the part of Pakistan not forming part of a Province, as the case may be, in which the registered office of the company is to be situate; and (iii) the objects of the company, and, except in the case of a trading corporation the territories to which they extend; and
(b) if the company has a share capital, (i) no subscriber of the memorandum shall take less than one share; and
(ii) each subscriber shall write opposite to his name the number of shares he takes.
The Articles of Association set out the rules for the running of the company's internal affairs. Every limited company must register Articles of Association
Form of memorandum and articles. The form of (a) the memorandum of association of a company limited by shares; (b) the memorandum and articles of association of a company limited by guarantee and not having a share capital; (c) the memorandum and articles of association of a company limited by guarantee and having a share capital; (d) the memorandum and articles of association of an unlimited company having a share capital, shall be respectively in accordance with the forms set out in Tables B, C, D and E in the First Schedule or as near thereto as circumstances admit.
WHAT IS A COMPANY?
A company can be defined as an artificial person, with a discrete legal entity, perpetual succession and a common seal. It is not affected by the death, insanity or insolvency of an individual member.
The English word company has its origins in the Late Latin word companio or companion, and the Old French military term compaignie (first recorded in 1150), meaning a body of soldiers". By 1303, the word referred to trade guilds. Usage of company to mean business association was first recorded in 1553 and the abbreviation co. dates from 1769
PUBLIC COMPANIES AND PRIVATE COMPANIES Companies are also sometimes distinguished for legal and regulatory purposes between public companies and private companies.
Public companies are companies whose shares can be publicly traded, often (although not always) on a regulated stock exchange. Private companies do not have publicly traded shares, and often contain restrictions on transfers of shares. In some jurisdictions, private companies have maximum numbers of shareholders.
Company Registration (formation/incorporation) in Pakistan is administered under a single umbrella of Securities Exchange Commission of Pakistan, which acts as the prime regulatory authority for the companies in most cases. Securities Exchange Commission of Pakistan works for company registration (formation/incorporation), periodic monitoring, compliance issues of corporate laws and legislation, before and after company registration for companies of all sizes in Pakistan.
Certificate of incorporation?
A certificate of incorporation is a legal document relating to the formation of a company or corporation. It is a license to form a corporation issued by state government.
A public company has, however, to wait to commence business till a certificate of commencement of business is received from the registrar of the joint stock companies.
The certificate of commencement of business is granted on fulfilling the following a few other requirements:1) Where prospectus has been issued inviting the public on subscribe for shares.
2) Shares payable in cash have been allotted to the amount of minimum subscription. 3) Every director of the company has paid the full amount of the shares payable in cash. 4) There is no money liable to be paid to applicants for shares which have been offered for subscription. 5) A statutory declaration by the chief executive or one of the directors and the security that the aforesaid conditions have been compared with. The registrar on being fully satisfied that: 1- The verified declaration has been filed. 2- All other requirements of the ordinance have been compiled with.
(1) Notwithstanding anything contained in any other law for the time being in force,(a) every single member company shall have at least one director; (b) every other private company shall have not less than two directors; and (c) every public company other than a listed company shall have not less than three directors, appointed and elected in the manner provided in this Ordinance. (2) Every listed company shall have not less than seven directors to be elected in a general meeting in the manner provided in this Ordinance.
Permission of the Registrar of Co-operative Societies for opening of account in the name of society is required under Section 37 (d) of Co-operative Societies Act 1925.
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Agents
Certified copy of Power of Attorney Copy of CNIC of the Agent attested by an officer of the bank. (Authorized officer of the bank must affix the stamp Original Seen along with AS/IBS number under his seal and signature).
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Trust
Certified copy of Registered Instrument of Trust OR Trust Deed by Registrar of Trust. please check purpose, source of funds and dissolution clause of the trust Resolution duly passed by the Trustees regarding opening and operation of Account in the Bank in the name of Trust. It must be ensured that mandate for operation of account given in the resolution is not in violation of the provision of Trust Deed. List of Trustees duly certified at least by two Trustees should be obtained. Certified copies of Letter of Administration/ Instrument of Trust or Trust Deed Branch Manager has to ensure that the opening of Trust Account and subsequent operation in the account is in accordance with the spirit of KYC, Customer Due Diligence (CDD) and other Money Laundering / Combating Financing of terrorism (AML/CFT) safeguards.
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Account/Client must be opened by using the CNIC No. of the Minor which is provided in the Form B
In the Account Opening Application, the particulars of the Guardian will be filled out in the column of Personal Information. Attested photocopy of Form-B of Minor
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Illiterate/Disabled/Blind Persons/Photo
Two passport size attested Photographs. (One photograph shall be pasted on the Account Opening Form and the other one will be pasted on Specimen Signature Card. Left and Right thumb impressions on the account opening application & Specimen Signature Card (SSC). In case of a customer with shaky signatures the account should be opened as Photo Account. All cheque withdrawals are in physical presence of customer.
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Government
It must be ensured that government accounts are not
opened in the personal names of the government official(s). Any such account, which is to be operated
by an officer of the Federal / Provincial / Local Government in his/her official capacity, shall be opened only on production of a special resolution/authority from the concerned administrative department duly endorsed by the Ministry of Finance or Finance Department of the concerned provincial or Local Government.
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Employee
Request email/ letter from the Manager or Unit or Department head
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Non-Resident
Obtain following additional documents along with the documents mentioned for opening an individual account:
i. Copy of Passport 1st 4 pages. ii. Copy of the page of the passport where last-entry into Pakistan was stamped iii. Copy of Valid Visa of Pakistan for foreigners. iv. Copy of Valid Visa of the relevant country for Non-Resident Pakistanis v. Copy of Work Permit or Employer Certificate or Employer Card. vi. Written request to open an account which clearly states that he/she is a foreign national and purposes of account opening.
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For senior citizen having age of 65 years or above Central Bank has allowed banks to open an account on the basis of expired CNIC. This change in the policy is based on the fact that NADRA has provided a relaxation to the senior citizens from renewing their CNICs after attaining the age of 65 years or above.
(Refer SBP circular BPRD/BLRD-09/2009-3857 dated June 09, 2009).
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2.
3. 4. 5. 6. 7. 8. 9.
Mandatory Requirements
1) 2) 3) 4) 5) 6) 7) 8) 9)
Next of kin details required Nature of account & Currency should be clearly mentioned Mother name Address verification Name as per CNIC (Title of Account) Mother CNIC required Admitting officer stamp required on SS card Dr/Cr turnover in KYC form required Customer acknowledge required on AOF with branch Stamp sign
1. JOINT ACCOUNT
2. PROPRIETORSHIP ACCOUNT 3. PARTNERSHIP ACCOUNT
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Minor as a Partner: Minor Attaining Majority: Death of a Partner: Retirement of Partner: Admission of New Partner:
4. TRUST ACCOUNTS
5. COMPANIES REGISTERED UNDER
COMPANIES ORDINANCE 1984
9. MINOR ACCOUNT
10.STUDENT ACCOUNT
14.NON-RESIDENT ACCOUNTS
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Type of Account
Current Accounts
Dormancy
6 Months
Inoperative
2 Years
Un-Claimed (Escheated)
10 Years
Saving Accounts
1 Year
3 Years
10 Years
Financial Instruments
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On 1st of Ramadan every year, Zakat is deducted at source on all categories of PLS saving and other similar Accounts except those fulfilling the exemption criteria as per Zakat & Usher ordinance 1980.
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The current rate of Zakat is 2.5% The 1st day of the Zakat year (i.e. 1st of Ramadan).
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ZAKAT EXEMPTIONS
1. A person who is not a Sahib-e-Nisab. 2. All Non-Muslims & All Non-residents.
3. Customers who died on or before 1st of Ramadan. 4. Federal Government, Provincial Government or a Local Authority.
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5. Any organization which is owned wholly, directly or indirectly, by the Federal or Provincial Government or a Local Authority. 6. Subsidiary of any organization which is owned wholly, directly or indirectly, by the Federal or Provincial Government or a Local Authority. 7. National Investment (Unit) Trust. 8. Investment Corporation of Pakistan & Its Mutual Fund.
12. All registered charitable organizations. 13. A deeni madrassah registered by Zakat Department. 14. A mosque.
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15. A registered orphanage 16. A Workers Participation Fund. 17. Customers who have submitted the certificate/affidavit of Zakat Exemption (CZ-50) before 1st Shabban in their respective Branches.