Cash Management Training Manual

The importance of Cash Department in the branch can hardly be overemphasized. Dealing with cash being most liquid asset
necessarily involves risk to be safeguarded against theft, misappropriation and inadvertent short/excess payment to customers. It calls
for necessary precautions and strict adherence to the laid down procedures. The other equally important and sensitive aspect of the
department has been staff members’ direct interaction with customers. As such staff members assigned the job of cash handling is
expected to render most efficient, personalized and courteous services. As the Cash Department would reflect on the ‘Customer
Services’ of the bank, therefore staff should be well trained, smart and disciplined.

This Manual aims at discussing location & important security measures for the cash department followed by salient features, including
security aspects of currency notes of Rs.500/- Rs.1000/- & Rs.5000/- by way of Chart. Further, compositions of cash - Stationery used
in Cash Department, set-up of cash department, handling and movement of cash are other topics elaborated in the Manual. The
document ends with the discussions on ATM Operations, National Prize Bonds and Prudential Regulation XXV- Schedule of
Penalties on Cash Handling.

Attempt has been made make the document comprehensive and comprehensible covering all pertinent aspects of the cash department
in easily understandable language for the benefit of users. Any errors, shortcomings, amendments observed by readers/users may be
advised for incorporation in the next periodical review.

Cash Department – Location – Security Measures

As per instructions of SBP, Cash operations should be handled in a branch of bank or at a place where ATM is installed therefore
Cash dealings are restricted to:

1. Vault (strong room)

2. In Cash Enclosure (Cash Department) and
3. In ATM cabin.

Since Cash is a precious asset, it should be safeguarded against all possible risks and dangers. The Cash Department is located at a
prominent place in the branch. It is always locked from inside when cash is kept there. Only authorized staff members are allowed to
enter a cash enclosure.
 Cash Officers/Tellers are provided with Till, Cash Box or Drawers to keep cash and other valuables locked up at their counter
positions. The safety of cash while in the custody of each teller/cash officer is ensured by applying necessary precautions and using
common sense.

Without utmost necessity, the Cash Officer/Teller should not leave his counter position, while holding cash. Before leaving cash
enclosure, even for a short duration, he should secure cash & valuables by locking drawers/box/till.

Other security measures of Cash Department and Cash on Hand include:

 Area covered with glasses with small window for handing over and taking cash from the customers.
 Cash department is located separately from other departments and remains locked from inside.
 When not in use, main cash vault and safe custody vault doors should remain closed, even during banking hours.
 Cash holding to be kept at minimum level at counters, if there is any large deposit, extra cash is shifted immediately to vault.
 Overnight cash holdings are kept at the desired level as per ceiling fixed by PO/ZO.
 Closing Cash is required to be physically checked and balanced as soon as Cash Counters are closed.
 Service to customers/visitors is organized in such a manner that waiting period is minimized, especially during rush hours.
 Queue Chains are installed outside the teller area to avoid crowding of teller windows.
 Siren buttons are installed at easily approachable places.
 Fire Extinguishers are installed and are required to be properly maintained so that they are fully operational in case of
emergency.
 Smoke detector and sprinkler are fitted all over the branch.
 Smoking is not allowed within branch premises particularly in cash department.
 Security Guards always keep close watch of the Cash Department. They are advised to keep an eye on the visitors and question
those who appear to overstay or appear suspicious.
 The customers are not allowed to carry arms, ammunition inside the branch premises and cash department.
 Keys of their respective drawers are provided to all Cash Officers/Tellers and they are not to be handed over to any of the
cashiers or unauthorized person, even for short duration.
 Only authorized persons are allowed to enter Cash Department.
 Close Circuit TV cameras are fitted to watch and record the movements and happenings in the cash department. As per
Instruction Circular 020 dated February 23, 2012 following instructions were advised by PO:
i. Branch Managers must review part of previous day’s recording to identify problems, if any.
ii. Any problem(s) noted must be immediately intimated to Security Head and Administration
 Department.
iii. The quality of recording must be of high standard as required by SBP in BPRD Circular No. 10

of September 12, 2011

iv. Request for footage of ATM recording must be routed through focal persons in all Zones.

 Tellers are required to surrender their mobile phones to the Operation Manager who are instructed to keep them in silent mode
or turn them off during business hours. This is done in order to avoid complaint from the person who encases their cheques and his
robbed outside the branch premises and may implicate our cashiers.

Feature of Pakistani Currency Notes:

Our currency Notes are available in the denominations of Rs.10/-, Rs.20/- Rs.50/-, Rs.100/-, Rs.500/-, Rs.1000/- and Rs.5000/- of
different designs and colors.

Common features of our currency notes are given as follows and details of security features of our Rs.500/-, Rs.1000/- and Rs.5000/-
given below.

1. Currency Notes are printed on specially made Security Paper which is of very fine quality and has some security checks e.g.
watermarking etc.
2. On every currency note distinctive numbers are available on both sides.
3. Every currency note has a photograph of Quaid-e-Azam on its face. The coat worn by Quaid-e-Azam has rough lines which
can be experienced by rubbing their finger on the surface of the coat.
4. The photograph of Quaid-e-Azam is also available in water mark in the round shape available on front side of notes.
5. There is a thread inserted in each note at a particular place. (about 40% on right side)
6. Each currency note is issued under the authority of SBP and bears the signature of Governor of State Bank of Pakistan in Urdu.
7. On the back side there is a picture of a monument or a historical place.
8. Individual features of each denomination of currency notes:
Rs.10/- (new issue) is of light green color and has picture of Bab-e-Khyber (Khyber Gate) Peshawar.
 Rs.20/- (new issue) is of orange green color and has picture of Moen Jo Daro

Rs.50/- (new issue) is of purple color and has picture of Karakoram Peak.

Rs.100/- (new issue) is of red color and picture of Quaid-e-Azam Ziarat Residency is printed.

Rs.500/- note (new issue) is of rich deep green color and has picture of Badshahi Mosque Lahore.

Rs.1000/- note (new issue) is of dark blue color and has picture of Islamia College Peshawar.

Rs.5000/- note is of mustard color and has picture of Faisal Mosque, Islamabad on backside.

Note: It may please be noted that old designed bank notes of Rs.1000/-, Rs.500/-, Rs.50/- & Rs.5/- is now discontinued and ceases to
be a legal tender.

Composition of Cash
In branches, Cash is composed of following items:
i. Cash on Hand ( In Currency Notes of Pak. Rupees and Foreign currencies)
ii. Coins on Hand (In Currency Coins of Pak. Rupees and Foreign currencies)
iii. Cash in ATM
iv. National Prize Bonds

Stationery Used In Cash Department:

Following stationery formats are used in Cash Department:

1 Vault Position (Cash-21): It reflects cash holding in vault, denomination-wise and the stock of National
.
Prize Bonds.
2 Issue Slip (Cash 2): It is prepared in duplicate and used for exchange of cash between two cashiers / tellers
.
or for issue of cash from vault to cashier / teller. One copy each is retained by delivering and receiving

cashier / teller.
3 Teller Summary Sheet: It shows closing cash balance of a particular cashier / teller, prepared at end of
.
the day and contains:

Name of cashier / teller

Signature
Date
Paid Stamp
Opening Cash Balance
Receipts
Payments
Closing Cash Balance: denominations of Cash (on front), and denominations of National Prize Bonds and

Foreign Currencies (on backside).

4 Summary Sheet: Prepared by Head Cashier who incorporates cash position of each cashier / teller
.
denomination wise, from Tellers Summary Sheet and from this Summary, Teller’s Daily Cash Record is

ascertained. The record is to be retained in the branches for a period of six months only. All the previous

record is required

to be destroyed. The cycle of destroying cash position / cash summary will be on monthly basis.
5 Teller’s Daily Cash Record: shows final consolidated position of whole cash available in a branch at the end of a working
. day. In addition to cash balance denomination-wise, it also contains balance of each

foreign currency with equivalent Pak Rupees, Stock of Prize Bond and balance of Petty Cash. It also

reflects late payments and late receipts. The comparison of Cash on Hand with total insurance cover

available is also shown.In case of excess cash holding, LONO/fax is sent to Principal Office which arranges

temporary cover and sends cover note to branch. The cover note when received is filed in Insurance File.

The Branch Manager/designated officer checks physical availability of Cash as incorporated in Summary

Sheet with bundles/packets and loose cash.

6 In addition to above stationery items, there are many more items of Stationery used in Cash Department
.
such as vouchers, IBCAs, Cash Payment Voucher etc.

Stamps Used in Cash Department

Every teller /cashier is provided with following stamps:
1. Cash Paid with Date
2. Cash Received / Specialized Printer (Computerized Cash Received)
3. Denomination Stamp
4. Posted
5. Document No./Batch Stamp
6. Signature Verified
7. Sorted Stamp
8. Branch Round Stamp
9. Cancelled
10. Online
11. Faxed Stamp
12. Already Faxed on _________

Avoid Duplication
13. School Fee Collection
14. Late Cash Received

Set up of Cash Department in Big, Medium and Small Branches

In large branches the Cash Department is headed by a Chief Cashier and in medium, small and sub branches where there are two or
more than two tellers / cashiers one of them is designated as the Head Cashier.

During banking- hours individual teller / cashier is personally responsible for security and proper handling of cash in their possession,
under overall supervision of the Chief / Head Cashiers. However, security and responsibility for cash is joint responsibility of Branch
Manager, Resident Manager and Chief / Head Cashier when it is kept for overnight in the vault.

In Big / Medium Size Branches Cash transactions are supervised by chief cashier, who authorizes the entries posted by the other staff
members, which are above their limit. All the cash online entries / utilities are also authorized by the chief cashier. The final
summary / cash position is also looked after by him.

The rest of the staff are doing the job of a teller i.e. receiving of instrument / cash /posting / cancellation / signature verification till the
payment of cheque is taken care of by them.

In a medium size branch the chief cashier, may perform the job of a teller also and in case of a transaction above his posting limit the
authorization is done by the operation manager.
In small branches the head cashier takes care of the department i.e. Balancing and Safe in of cash inside vault. The cashier’s job is
only to make the payment to the customers or receive cash from the customers.

In such branches posting and cancellation of the instruments is taken care of by the deposits / remittance department, who after
performing the required job hand over the instrument to the cashier for payment.

In sub branches authorization is as per the sub branch manual.

Handling of Cash:

Each Cash Officer or Teller (wherever posted) is provided with either a moveable till or a Cash Box with lock, the key to lock is be
held by respective cash officer/teller. Till /Cash Box should always be kept under lock whether inside or outside cash enclosure or in
the vault. The duplicate keys to the till/Cash Box to be held in safe custody of Manager/designated officer of the branch.

In branches, where tellers have been provided with individual portable tills, branch managers may authorize the tellers to retain the
balance of cash in the till overnight, without transferring it to the Head Cashier provided the balance is below a stipulated limit
approved by the Principal Office. In this case each Teller would be required to maintain a daily record of breakdown of the closing
balance by denomination as per the Teller’s Daily Cash Position (Form No. Cash 24).This record will be handed over to Head
Cashier.

The Head Cashier will prepare a batch-wise Consolidated Cash Position (Form Cash:9) to show the total position of cash including
foreign currency cash (and National Prize Bonds) for management information.

Whenever, a Teller, regardless of the reason, fails to report for duty in branches where tellers are allowed to retain cash overnight in
their tills, the cash in a till will be taken over and verified by Head Cashier in the presence of an Officer. To facilitate smooth
functioning, in such branches the Branch Manager may approve an employee designated to perform the duties of a teller in place of
teller not reported for duty. A hand-over of tills between tellers will be preceded by a full cash count by the teller taking over in the
presence of a witness and will be documented on the "Teller’s Daily Cash Position" A detailed cash count will also be performed
prior to a Teller going on leave. Keys Register to be updated.

The Officer Incharge, Cash Department, is required to check the individual tills on a random basis at the end of the day and agree the
details as reflected in the Teller’s Daily Cash Position. He has to sign the form in evidence of this check.
 Each teller should hold only minimum cash that is necessary for smooth functioning through the day. Any additional requirement of
cash foreseen for the day should be requisitioned when required.

In branches where there is no teller system, the cash is with the individual Cash Officer at the end of the day it should be delivered to
the Head Cashier (Form Cash: 2) in duplicate to be prepared. Next day, the Head Cashier will issue adequate cash to individual Cash
Officer prior to commencement of business. Form CASH. 2 to be signed in duplicate, one to be retained by Head Cashier and other to
be retained by Cash Officer.

Direct exchange of Cash between cash officers is not allowed. Any requirement of cash officer for additional cash or in case cash in
excess, with the cash officer will be received/delivered to the chief/head cashier directly by preparing Cash: 2 in duplicate original
will be kept by the Chief/Head Cashier and duplicate by the concerned cash officer.
Cash Holding Limit And Insurance:

Receipts and Payments of cash are very important functions that are to be performed by every branch for which it has to maintain a
level of cash holding.

There are two types of Cash Holding Limits as described below:

1. is assigned by Principal Office and

2. is assigned by SBP.
(1) The Principal Office allocates a limit of cash holding to each branch depending upon its level of deposits and daily
turn over. This limit is fixed on the recommendation of branch manager. In order to hold cash at optimum level, Branch
Managers / Head Cashiers study pattern of deposits and withdrawal over a period of time and review it periodically to
avoid possibility of loss on account of excessive holding and risk of delay in payments due to insufficient funds on a
particular day.

The daily limit of cash notes in ATM is Rs.3, 000,000 (Instruction Circular 011 dated 12-2-2004).

The daily cash insurance limit is determined by adding Cash in Vault, Cash in Till Boxes and Cash in ATM. At any
time if the cash holding exceed the cash insurance limit, the Branch will inform the Administration Department to
provide cover for the same.
(2) The SBP has advised that the branches are required to maintain minimum ONE DAY’S fresh/re-issuable balance which
 should be equal to the average daily cash payment for the last month. (Instruction Circular 025 dated March 11, 2004)

It is important, that the cash holding as fixed by P.O, for a branch should be maintained at optimum level because cash
is expensive to hold. It is an asset, which does not give any income to the branch rather, it incurs costs due to the
following reasons:-

Cost of insurance of cash.

Additional expense on security of cash on the counters, in the safe and in transit.
Pilferage, shortage or accepting bad currency notes including counterfeit money.

The major depositors of the branch are requested to provide advance notice of withdrawal that makes job of cash
holding easy and trouble free.

The cash holding limit of each branch is fully insured. The insurance is arranged by Principal Office and it covers:
(a) Cash in branch premises (on counter,ATM and in vault - both local as well as foreign currency) AND
(b) Cash in Transit - specific amount is mentioned in policy. The Cash in Transit also covers both Pak Rupees and
foreign currencies

For cash in transit, service of an approved security company is utilized. However, in case of non– availability of any security
company, bank’s vehicles and security guards are used, in that case the routes and timings are varied as far as possible.

Excess holding on any particular day is advised immediately to Principal Office which arranges additional coverage. The temporary
cover note when received is filed in Cash Insurance File.

The Principal Office forwards IBDA for insurance charges which are responded as under (Now the following entries are passed
through online):
DR: Prepaid / other D=850-06-01-1000-X
Insurance
CR: M.O. Account P.O.

Periodically amount of prepaid insurance is wiped off as under:

DR: Exp. A/c. Insurance – E=600-01-01-1000-X
 Cash
CR: Prepaid Insurance

(Habib Insurance provides us a minimum cash holding insurance policy for Rs.100 million for each branch in that case branches are
not required to obtain extra cover note if closing cash is upto100 million. However in excess of this amount additional cover to be
obtained by informing Area Office or Zonal Office.)

Receipt of Cash:
Cash is received mostly on following instruments/documents:

1. Multipurpose Carbonized Deposit Slips

2. Fund Transfer Application
3. Credit Voucher
4. Specially designed stationery like, Invoices for deposit of school/college fees, Utility Bills, specially designed deposit slips for
depositing funds in collection accounts of residential societies, other institutions and for cash management account holders.
1. Multipurpose Carbonized Deposit Slip is used for the following purposes.

Cash
Online Cash
Cheques
Online Fund Transfer

The teller / cashier is advised not to prepare deposit slips and not to accept any deposit slip if:-
a) It is incomplete and important details such as Branch name, date, customer’s account number, depositor’s CNIC # (if required),

Title of Account etc. if omitted. Moreover it is ensured that amount in words and figures are identical.
b) It is filled up in such a manner that it facilitates easy insertion of fictitious details or alteration of amount.
c) The details on both original & carbonized copy are not identical in all respects.
d) Depositors have not properly authenticated the alteration/correction on the slip.
e) It doesn’t bear the signature of depositor (invariably).
f) Checking the serial number of the bank copy & customer copy of the deposit slip.
g) Cash should be counted in presence of customer/depositor.
After counting cash denomination mentioned put in Specialized Printer (Computerized Cash Received) for printing a "Cash Received

& other details" on carbonized deposit slip. The amount received is mentioned in red ink. The customer copy is returned to

depositor duly signed.Any error detected after the deposit has been accepted is brought to the notice of officer in-charge for necessary

action. Minor errors are corrected by officer in-charge, for major errors manager contacts the account holder. If error free the amount

is posted to concerned account.

As per INST 092 dated 30 July 2010, it has become obligatory to demand original CNIC from depositor depositing the cash amount to

Rs.2.5 million and verify the person against the face appearing on the CNIC and retain a copy before receiving cash and copy to be

attached with the deposit slip.

A specific rubber stamp for "School Fee Collection" has been distributed to branches by Stationery Department, Administration

Division Principal Office, Karachi. (copy enclosed) for use on School Fee Deposit Slips that cannot be stamped by our printing

machine that prints details of cash deposited forced it to customer accounts, cash payment of utility bills etc.

Confirmation regarding discontinuation of Manual Cash Received Stamps

As per INST 110 dated August 03, 2011 branches and sub branches may continue to use manual cash received stamps under the

supervision of the branch manager in certain condition as mention below and for others not mention specialized printer

(Computerized Cash received printing system) stamp to be used:

 School Fee Deposit Slips containing 3 or more parts
Collection Account Slips
Credit Card Slips
On-line Foreign Currency Cash Deposits
Payment Order Application from customer against Cash Deposits
Utility Bills that are mutilated and cannot be accepted by the printer

Proper Reasoning for use of "Cash Received" Rubber Stamps

POS printers have been made available to branches and sub branches to streamline the process of cash receipts. Therefore, it is advised

that the use of "Cash Received" Rubber Stamps should only be limited to cases mentioned in Instruction Circular No. 110 dated August

03, 2011.

However, where the "Cash Received" Rubber Stamp is used for any other reason than that advised in the aforementioned circular,

concerned staff should mention the proper reason on reverse of the Pay-in-Slip (Bank’s Copy), duly validated by Branch/ Resident

Manager with his full signature.

Auditors on their visit to branches/ sub branches shall ensure that there is no unnecessary use of "Cash Received" Rubber Stamps.

[INST/ 115 dated July 07, 2014].

2. Funds Transfers Application Forms-(Very rarely used for Cash Deposits) for cash deposits it should be ascertained that it is filled in

correctly and completely as regard to:

a) This form is used to process the following:

Payment Order
Demand Draft
 Telegraphic Transfer
PRIMS Transfer (for Rs.10 million and above)
b) Beneficiary Details

Name
Address
Account Number
Bank / Branch name
Amount in word & figures
c) Applicant detail

Name
Telephone Number
Address
Purpose of Remittance
Personal / Business relationship with the beneficiary etc.
d) Signed by account holder or authorized person

After counting cash denomination of currency notes received is recorded then "CASH RECEIVED" stamp is affixed. The amount

received is mentioned in red ink with signature of receiver

3. Credit vouchers can be prepared for various purposes, by any department of the branch and should contain:
a) Full Title and GL number or Account number of the customer to be credited.
b) Date
c) Amounts in words and figures are correctly mentioned.
d) Full narration
e) Signed by authorized officers of the concerned departments and Branch Manager or Operation Manager.
4. Invoice of Schools/ Educational Institutions, Cash Management Accounts and Utilities Bills for Electricity, Gas, Telephone etc.

(Correct contents are ensured).

5. The manually corrected / stamped for installment from the utility company will not be accepted (Sui Southern Gas) effective from

15th Oct, 2011 as SSGC has started system generated installment duplicate bills.
6. Retention Period of Utility Bills Scrolls
i) Utility Bills Stubs (Front & Reverse) must be retained for Three-Months.
ii) Photo-copy of Utility Bill Scrolls must be retained for one-month. Cash Management Unit may be contacted if any information

relating to destroy Utility Bills Scroll is required. (Instruction Circular: INST/057 dated 21st May 2012)
Late Receipt of Cash: (Instruction Circular # INST/ 154 dated Oct. 28, 2011)

The method of recording receipt of late cash was advised to branches on March 10, 1999 through INST Circular # 013.

Since then, printers acknowledging receipt of cash on carbonized deposit slips have been introduced and the procedure for recording

of Late Cash Receipt requires change.

A receipt of Late Cash Deposit Slip that are received after Close on Line detailed below:

Receipt stamps must be affixed on the face of the deposit slip customer’s carbonized copy, and on the reverse of the branch cop

(original). Stationery Department will send these stamps to all Branches (including sub-branches)

Branch Manager (in his absence Operations Manager) and Chief Cashier will sign in the space provided in the rubber stamp.
Specimen Of Stamp
Bank Al Habib Limited

_____________(Branch Name)

Late cash received by:______________

Time: ______________
 Date: ______________

For Credit on Next Working Day

Confirmed & Signed by
Chief Cashier RM/BM/OM
At present the late cash positing limit is assigned to a particular staff (Teller/Cashier), who post the entries in the system and the entries

Simultaneously authorized by an authorizer. The amount posted does not reflect in the customer account of the day.

The amount is auto credited to customer’s account during the next working day SOD process and if any condition e.g. dormant etc.

the transactions will be reflected in "post unposted transaction", the user needs to settle these pending transactions before EOD.

Summary report of late cash deposit is auto generated.

Specimen of Late Cash Received Register
Bank Al Habib Limited

____________________Branch

Late Cash Received Register Date:_______________________

S. No. Account No. Title of Account Slip. No Amount Received Initial

Payment of Cash
Cash is paid on following instruments:

1. Cheques
2. Demand Drafts (DD)/ Payment Orders (P.O)
3. Term Deposit Receipts and Short Term Deposit Receipts
4. Cash Payment Vouchers

Before paying any of the above instruments it is checked about genuineness / correctness and then posted in proper account. The
cheque / instruments are then cancelled and authorized. For posting and authorization every authorized officer is allotted Personal ID
and password which should not be disclosed to anybody in the branch or outside.

The process and function for creating the posting, authorization and cancellation limits is centralized at the IT Division-P.O. On the
request / recommendation of Branch Manager / Resident Manager / Operation Manager, the Area Manager recommends and forwards
the same to Z.O. for approval. After the approval of Zonal Office it is send to Centralized ID Management (CIM) - IT Division for
doing the needful. IT allocates individual receive and payment limit for each cash officer/teller. The teller cannot surpass his posting
and authorization limit and the instruments in excess of his limit to be approved by another officer of higher rank.
1. Cash Payment of Cheques

Cheques may be drawn as bearer, order, open and crossed. Bearer, Open and Order Cheques may be paid by cash while
crossed cheques cannot be paid by cash except to a bank under certain conditions. Normal conditions for payment of a
cheque are as follows:

The cheque is bearer/uncrossed or Order/uncrossed being otherwise in order in respect of apparent tenor. Conditions
e.g. stop payment instructions, deceased account, court order prohibiting payment or Dormant Account etc. is not there.
Availability of clear balance in the account. Check for unrealized effects and Blocked amounts etc.
The credit limit and Drawing Power, if any, on the account not being exceeded.
All instruments of Rs.100,000/- and above must be minutely reviewed under U.V. Lamp. (INST. Circular # 013,
2014, INST Circular # 075, 2014)
The IV market must be used for all cash transaction of Rs.1 million and above. (INST Circular # 086, 2014)

Any payment above the individual limits established will require the Joint approval of appropriate authority as laid in
Approved Authority authorization Limit issued by Principal Office. The Principal Office reviews this limit periodically.

Before making payment of a large amount in cash the Paying Cash Officer/Teller should establish the identity of the person
encashing the cheque and if necessary the drawer of the cheque should be contacted before payment is made or the matter
be referred to Chief Cashier / Deposit Incharge. In case of order cheque, establish payee’s identity through a well known
client or passport/CNIC. Note the number, date and place of issue and agree with the signature thereon and retain
photocopy.

Before making payment of bearer cheque the teller/cash officer should call the presenter and ask the person the amount of
cheque he had tendered. It should match with the cheque amount. Thereafter the cashier is required to take another signature
of presenter and he must see that both signatures should tally exactly with each other. In case of doubt he should refer the
matter to Head Cashier.

The contents of Instruction Circular 025 dated May 05, 2006 are reproduced below:

Quote: ‘It is becoming an increasing practice in the market to obtain copies of the CNICs of bearers who cash cheque over a
certain amount over the counter. This allows identification of the bearer in case of any mishap.

With a view to protect the Bank’s customers it has been decided that the following will come in effect immediately. CNIC
of all bearers of cheques above Rs.50,000/- will be obtained and the number of cards will be recorded on the reverse of the
cheque and photocopy of the CNIC attached to the cheque in question.

Some bearers of cheques are known personally to the tellers and staff, by virtue of regular contact, and in cases the
obtainment of their details may be waived. In such cases the Chief Cashier or Operation Manager must affix their signature
on the reverse of the cheque under the words "Known to me".

Additionally any out of the ordinary withdrawal from a customer’s account should be verified from the customer before
payment is made, and the date and time of conversation with the customer noted on the reverse of the cheque. Any
clarification in this regard may be sought from the Branch Manager’ Unquote

Under Instruction Circular 157 dated December 07, 2009. The Principal Office has advised Branch Managers to instruct
cashiers to ensure that while accepting copies of CNICs to they must adhere to the following points:
i. The person receiving the cash is the same person whose CNIC is presented.
ii. The photograph on CNIC is the same as that of the presenter.
iii. The signature on the reverse of the cheque is the same that appears on the CNIC.
Principal Office may allow a branch to adopt the Teller System for encashment of customers’ cheques, wherein Cash
Officer designated as teller will be authorized to make payment within the authorized limits against "branch cheques". In
 this system the teller will be further responsible for:

Verification of customer’s signature

Examining the cheque to determine that, it is, in order, in all respects
Ensuring there is sufficient available balance in the account or cushion in approved credit limit in favour of drawer
is available.

For this purpose, the tellers are provided with a password for displaying specimen signature on computer screen, and be
able to display the account and post the cheque/vouchers as per authorized limit. After posting POSTED stamp is affixed
and Signed by the respective Teller.

The teller/cashier affixes appropriate stamp (Paid Cash) and cancels cheques/instrument by putting full signature on the face
of instrument in such a manner that the signature(s) of drawer are cancelled.
2. Cash Payment of Photo Account Holders Cheque Online:

Photo account holder visiting other cities and requesting the payment of cheque through on-line can avail the facility in the
host branch by adopting the following procedures:

The photograph of the customer in the AL Habib System must be confirmed to the person calling on the branches.
The maximum limit to be paid Rs.50,000/- per day.
Transaction to be authorized by the Operation Manager irrespective of any amount.
The transaction must be advised to the branch or the operation manager of the native branch and his consent obtain.
The responsibility of the native branch is to ensure that the online limit is not exceeded by the host branch.
Rest of the responsibility that the payment in due course is that of host branch.

Note: Under no circumstances the photo account holder are to avail this facility within their city or intra city transaction
(INST 102-2009).
3. Cash Payment of DD and in rare cases Payment Order (On which the printed crossing has been cancelled by two authorized
officers). Same precautions apply as applied for Order, Open Cheques, if information matches with the record Payment is
authorized by Remittances Department.
4. Cash payment of Term and Special Notice Deposit Receipts and Growth Certificates are processed and authorized by
Deposits Deptt. which also verifies the signature of depositor. For payment of profit a separate Cash Payment Voucher is
 prepared and processed by Deposits Department.
5. Cash Payment Voucher is prepared and processed by any department for payment of Expenses, Advance Payments,
Refunds or payments through Sundry Debtors/Suspense Accounts. It is ascertained by the Cash Officer/Teller that it is
prepared correctly showing the Title of payment Head its Account Number, Code, amounts in words and figures. All Cash
Payment Voucher must bear the signature of manager as approval and attached with the relevant invoices, authority etc.

The paying cash officer/teller should affix ‘denomination stamp’ on backside of cheque/instrument in which manual
recording is made for denominations of notes paid.
6. Payment Order Paid Online: On the request of our valued customer we can make the payment of Payment Order through
Online. The online process of payment can be credited to the beneficiary’s account only. Payment of cash against such
instrument is strictly disallowed. The payment can only be made after the scanned copy of the instrument is sent by Host
Branch and received by the Issuing Branch. The proceeds of the Pay Order are credited through IBCA. The original
instrument will remain with the Host Branch for information and record purpose. The Issuing Branch will print the scanned
copy which will be used as a voucher for posting and stitched with the batch of that day.
7. Cash Payment on Counter (Home Remittances): The branches must ensure compliance of the bank guidelines given as
under while making payment of Home Remittances:

Only beneficiary can collect the funds in cash transactions (Mandatory)

Ask remittance number from beneficiary (Mandatory)
Seen original CNIC & expiry (Mandatory), if the payment is above Rs. 100,000/- Verisys of NADRA is mandatory.
Keep a valid CNIC copy in record (Mandatory)
Ensure the beneficiary signature on cash receipt (Mandatory)
May ask remittance amount as security check (Optional)
May ask remitter name as security check (Optional)
8. Cash Payment on counter (MoneyGram):Before making the payment to the customer, teller will check that the following
are the part of the documents:

Valid photo copy of CNIC/Passport

"Original Seen" Stamp is affixed along with the Home Remittance Officer (HRO) signature on the photocopy of
CNIC / Passport.
Receive Form is signed both by Beneficiary, HRO and Branch/Operations Manager
Agent Copy signed by HRO and Branch/Operations Manager
 Copy of Verisys (NADRA Verification System) if applicable

The Teller will check that:

Amount and Authorization Code on the Agent Copy is the same as appearing in the "Receive Form" and all of the
above documents are handed over by the customer before making the payment.
After all the verification Teller to pay the cash and affix paid stamp alongwith his signature on the Agent Copy. He
will also request the beneficiary to sign on the reverse of the Agent Copy where the signature is mentioned. The signature
should match with the valid CNIC/Passport.
Receive Form, Agent Copy; Copy of CNIC etc. will be filed together in the batch.

Counterfeit Notes:
The currency notes are checked in the presence of customers. The machine for detection of US Dollar fake notes is used invariably
while for other notes it is ascertained that these are genuine &in good order. Any instance of deposit of counterfeit/fake note is
reported to manager/senior officer of the branch and handled cautiously. As per SBP directives, all such cases should be reported to
proper law enforcing authorities for thorough investigation.

Sorting of Cash:

Under instructions of State Bank of Pakistan, branches of all commercial banks are required to sort out the notes received by them
during the day in three categories:

 Re-issuable"
 Non-issuable" (soiled for return to State Bank of Pakistan)
 Defective notes (for return to State Bank of Pakistan, e.g. Torn,(pieces not available) Mismatched, Defaced and Fake or
Counterfeit Notes all such notes are not accepted)

However amount received in heavy tender (Rs.100/- to Rs.1000/= denomination notes need to be sorted immediately by branches
making an average payment of Rs.0.50 to Rs.1.50 Million.

After sorting and re-bundling all currency notes stamp of "Sorted" with the name of branch affixed.
Given below is the Specimen of "Daily Position Sheet" to record the final position of notes on hand which should be prepared on a
daily basis as instructed by SBP.

Cash Position of sorted cash Branch ______________________Date__________________

Sorted (Pieces) Unsorted Coins
Denomination Re-Issuable Soiled Defective

Soiled and defective notes should be sent to the Main Branch of the city, which will deposit these with State Bank of Pakistan for
immediate credit to the Bank’s Account. In cases if there is only one branch in the city, it should deposit such notes either with State
Bank of Pakistan or National Bank of Pakistan as applicable. As discussed earlier branches are required to maintain one day’s
fresh/re-issuable balance which should be equal to the average daily cash payment for the last month.

As per the INST circular no 154 dated September 11, 2014, Machine Fitness Sorting Parameters of Pakistan rupee bank notes is to be
insured. This will lead to standardization in sorting of clean and soiled note in the banking industry.
S.No. Defect Description
1 Repaired/Taped Notes A banknote consisting of parts of notes joined together using adhesive
tape or glue to make a whole.
2 Crumples Folds/creases reducing the length or width of note.
3 De-inked note Complete or partial fading out in coloration.
4 Desecrated portrait Portrait of Quaid-e-Azam desecrated or carrying slogans.
5 Folded Corners/Dog-Ears Folded edge of the note including chipped corners.
6 Stains & Graffiti Stains of any kind, drawing of image(s) or lettering written or marked in
nay manner on a note.
7 Holes Holes/perforation of any kind.
8 Soiling Accumulation of layer of dirt and/or sebum across the note.
9 Limpness Lack of crispness, stiffness and intaglio feel of the note.
10 Tears Cuts on any side of the note.

Non-Stapling of All Banknotes:

SBP has forbidden the use of staples on currency notes as such packet of any denomination of currency notes should not be stapled.
SBP Circular Letter Cy.9029/340 – 2006 dated June 14, 2006 is reproduced:

As per the above circular consequent upon recommendations of the "Task Force" on Currency Management to issue unstapled
Currency Notes in circulation and as a part of our "Clean Notes Policy", SBP BSC Offices have issued new design banknotes in
unstapled form from the very date its launching as the staples ruins the notes and reduce its longevity. We expect that the commercial
banks will prevent stapling of all currency notes and also discourage customers/general public to put staple pins on these banknotes
packets even in re-issuable form.

Please also note that the instructions of un-stapling of the banknotes by the commercial banks shall be monitored by the Offices of
SBP BSC through Cash Monitoring Teams. Any violation in this behalf shall render the banks liable for punitive action under the
existing instructions on the subject.

SBP has already advised all commercial banks to equip themselves with modern currency; handling machines, such as loose note
counters, coin counters, bank notes banding machines, sorting machines etc to avoid any inconvenience to general public and other
stakeholders. (Instruction Circular 025 dated March 11, 2004).

Balancing of Cash and Verification of Cash Balances:

Each Cash Officer incorporates his individual Closing Cash Balance (both currency notes and coins) denomination wise on Teller
Summary Sheet (Cash 3/a) as per proforma enclosed in which opening Cash Balance is taken to this "Total Cash Receipts" are added
and sub total computed. From Sub Total "Total Payment are deducted, this gives figure of Closing Cash Balance. On the backside of
this sheet breakup denomination wise information of National Prize Bond, Foreign Currency notes in US$, GBP, Euro and other
currencies, if any is mentioned.

The Head/Chief Cashier consolidates figures of closing cash on Teller’s Daily Cash Record (Cash 3) with denominations of Local and
Foreign Currencies (Ultimately converted to Pak Rupees). Yesterday’s Cash balance is added with Receipts and Sub total is
computed. From Sub total Payments are deducted that give the Closing Cash Balance, a print out of Cash On Hand Account of GL is
taken out. The closing balance of GL is matched with Cash On Hand Balance of Teller’s Daily Record. In case of any difference that
is sorted out and Cash is closed in Main Safe of Vault.

The Manager/Designated Officer checks the cash at the end of the day and agree that cashier’s cash position recorded on Teller’s
Daily Cash Record (form Cash:3)with physical availability of Cash, Local and FCs, NPBs .
The manager is required to perform surprise cash count once in a month and sign Cash Position prepared on Teller’s Daily Cash
Record (Form # CASH:3). He also agrees balance of the figure reflected for that day in Statement of Affairs (Print Out of balance of
GL Accounts) under his signature. He also certifies by writing, "Physically the cash checked & found correct".

Difference in Cash:
When cash is found in excess of GL balance, thorough search is made by checking denominations recorded on the back of receipt and
paid instruments OR by recounting whole cash OR by applying experience of seniors, if all these efforts fail then manager authorizes
to credit excess amount of cash in SUSPENSE A/c CREDIT – Excess Cash with appropriate narration so that books are balanced and
cash is closed. Excess in cash is reported to Area Office very same day and Area Office to report to Zonal Office within 24 hours.

If any customer lodges claim for refund of excess cash, then he is advised to produce customer copy of pay in slip and after
ascertaining genuineness of that claim, payment is made under dual authorization.

Cash shortages

Cash shortages are investigated promptly. The branch manager deputes an officer independent of Cash Department who investigates
every aspect even the Teller’s/Cashier’s length of service and experience, past service record, previous history of shortages, if any,
whether or not the shortage was incurred at a particularly busy period. He obtains a written statement of teller/cashier. If there is any
shortage, the same reporting process as above to be followed. The report of the Investigation together with Manager’s
comments/recommendations is submitted to Principal Office. A copy is also sent to Audit Department. To balance the books and close
cash ‘SUNDRY DEBTORS – OTHERS – Cash Shortage’ is debited after obtaining authorized officers/executive’s approval.

As per Instruction Circular 90 dated November 14, 2007, Principal Office has advised branches that all items / entries that are over six
months old and have been thoroughly investigated and have not been resolved despite best efforts are to be transferred to "Finance
Division-P.O.", by IBCA along with full particular at the end of June and December each year.

Untraceable Cash Deposits

In cases of untraceable deposits, after thoroughly investigation and not resolved despite best efforts to be transferred to Untraceable
Deposits – Other Individuals Account Type 0093 with base number 999001 detail report of this account to be sent to Zonal Office
through Area Office. A separate register for Untraceable Deposit to be maintained in Excel and details of all such transactions must be
reported to Area and Zonal Office on quarterly basis.

Movement of Cash - within Bank AL Habib Limited

Movement of Cash: (C.I.T Services)

Drawing Cash from Main Branch: At place where Main Branch is available, other branch may acquire cash from Main Branch by
faxing IBCA with narration "Please send cash to us by approved security company)." But now the same is done through online
system.

Following vouchers are passed:

Debit : Cash in Transit
Credit : M.O Account – Main Branch (Originating IBCA in favour of
Main Branch)

On receipt of Cash through approved security company, it is verified that bag containing cash is in tact, its seal number is correct and
Shipment Receipt is in order, the cash is counted and Shipment Receipt is completed, signed and delivered. Following vouchers are
passed;
Debit : Cash – Local / Foreign Currency
Credit : Cash in Transit

The main branch passes following entry.

Debit : M. O. Account – Branch concerned (Responding entry)
Credit : Cash Local / Foreign Currency

Transfer of Surplus Cash by Branches to Main Branch: The branches may transfer surplus cash to Main Branch through designated
security company.
The cash properly placed in bags and duly sealed, is handed over to Security Company after completing Shipment Receipt. Following
entry is passed:
Debit : Cash in Transit Account
Credit : Cash – Local or foreign currency

When IBCA is received from Main Branch entry is passed as under: (now received through online)
Debit : M.O Account – Main Branch (by currency)
Credit : Cash in Transit Account (by currency)

It shall be ensured that the limit laid down by the Principal Office in respect of Cash-in-Transit is not exceeded. If cash is sent by
bank’s own arrangement, it should remain under the dual custody of designated officers and held in terms of the insurance cover.

In case movement of cash by security Co., record of acknowledgement signed for transportation shall be properly filed to verify
monthly bill of the Security Co.

In cities where main branch is not available, the concerned branch has to request our Treasury Department at Principal Office to remit
funds to SBP/NBP whenever cash is required.

The Treasury Department remits funds by T.T. which reaches the destination in minimum time.

Upon agreement of test, the account of BAHL Branch is credited. The branch draws the cash for which following vouchers are passed:
Debit : Balance with SBP/NBP Credit: M.O Account P.O.

When Cash is withdrawn

Debit : Cash in Transit and Credit: Balance with NBP/SBP (When physical Cash is received in
the branch.
Debit : Cash on Hand
Credit : Cash on Transit

The Treasury Department has arranged TT Discounting Facility for above noted branches but same is not yet used.
 Movement of Cash - Withdrawal from SBP/NBP
Withdrawing Cash from State Bank of Pakistan or National Bank of Pakistan by Main Branch:

Occasionally cash is required at Main Branch due to replenish reserve or to meet large withdrawals notice of which might have been
received from customer for payment of government dues, salary/wages etc. The amount of cash is ascertained.

The Treasury Department at Principal Office is advised in writing of amount to be withdrawn.

Upon receipt of confirmation from Treasury Department, the main branch passes following accounting entry:
Debit : Cash in Transit
Credit : Balance with SBP/NBP

A cheque of SBP or NBP is issued for the amount of cash and cash is received through designated security company.

After verifying the details of Shipment Receipt, Seal No. of bag and checking whether bag is in- tact, cash is counted and following
vouchers are passed:
Debit : Cash Local / Foreign Currency
Credit : Cash in Transit

Receipt for cash collected from SBP/NBP is signed by the bank’s designated Cash Officers.

Cash In Transit – Security Measures

While sending cash from branches we must ensure that the security company is listed and the company to provide the list of all
authorized guard who may received the consignments of cash in which the following will be incorporated (INST 063/2010):

 Name of the Guard

 CNIC Number / Company ID Card Number
 Passport size photograph
 Specimen Signature

Further to the above circular. Procedure for transferring cash to security companies following point to be ensured (INST 067-2010):

 Branch / operation manager and chief cashier to handover the cash to the security guard against proper acknowledgement by
the guard in the area where the CCTV camera can record the action clearly.
 Care is taken to ensure that the seal applied is secure .and not loosely applied.

Further Precautionary Measures – Cash In Transit (C.I.T.) Services

As per Instruction Circular 169 dated December 30, 2010, Principal Office has informed that all the four Security Cos. on our C.I.T.
contract agreement:

1. Askari Guards (Pvt.) Ltd.

2. Security 2000 (Pvt) Ltd.
3. G4S Wackenhut Pakistan (Pvt.) Ltd.
4. Phoenix Armour (Pvt.) Ltd.

They all have agreed upon following procedure to be adopted for ‘C.I.T Services’ which has been made part of the Service Agreement
duly signed by both the parties:-

It is the personal responsibility of the branch Resident and operation manager along with cash incharge to see that the procedure as
mentioned in the above circular strictly complied with or followed as under:

 The security companies requested by the branch will collect from the branch sealed shipments containing money, cheques
and / or securities and deliver to a designated consignee branch.
 The staff of the security company will witness the counting of number of currency note packets / bundles by the branch staff
and ensure that the packets / bundles, counting is correct.
 After ensuring the correctness the branch will place the currency note packets / bundles in the bags supplied by Security
Company and sealed by the bank’s authorized cashier with the plastic numbered seal, supply by the security company.
 The responsibility of the security company is restricted only witnessing the counting of rupees / foreign currency notes packets
and bundle but it they will not responsible / liable for any shortages claimed within the packets as well as loose notes.
 The bank staff / cashiers and Security Company staff will have to make sure that the cash bag are having copper eyelets fixed
on the next and a properly seal. The seal number has been correctly mentioned on the shipment form by the bank’s cashier.
 While receiving the consignment by the staff at the branch end must ensure that the cash bag is seal by an authorized seal in
perfect condition which is not tampered / loose / broken in any way.
 The shipment form to be signed by both the bank and Security Company staff.
 Delivering branch must verify the signature of the Security Company staff from the list already provided before handling over
the cash.
 Procedure for Cash Sent by Hub Branch (INST 128, 2012)
 Cash requiring branch fills the cash request form mentioning the currency / denomination quantity and amount and after
getting it signed by the cash incharge and Branch Manager approval (Operation Manager approval is required if the Branch Manager
is on leave) sends the cash request form to the Hub Branch.
 The designated officer at the hub branch after receiving the request form prints and writes down the request receiving date and
sign the request form. After obtaining the approval from cash cell incharge makes the arrangements with the security company for
sending the cash to the requesting branch.
1. Entries of cash received on request from Hub Branch

Pakistan Rupees

Branch Entry

A-012-01-01-1000-X Cash in Transit DEBIT

M-230-01-01-0586-X MO A/c CREDIT

US Dollars:

Branch Entry

A-012-02-01-1000-X Cash in Transit DEBIT

M-230-01-01-0840-X MO A/c CREDIT

 Pound Sterling:

Branch Entry

A-012-02-02-1005-X Cash in Transit DEBIT

M-230-01-01-0826-X MO A/c CREDIT

Euro:

Branch Entry

A-012-02-03-1010-X Cash in Transit DEBIT

M-230-01-01-0156-X MO A/c CREDIT

2. Entries of Cash at Hub Branch

Pakistan Rupees

Hub Branch Entry

M-230-01-01-0586-X MO A/c DEBIT

A-011-01-01-1000-X Cash in Chest CREDIT

US Dollars:

M-230-01-01-0840-X MO A/c DEBIT

A-011-02-01-0840-X Cash in Chest CREDIT

Pound Sterling:
 M-230-01-01-0826-X MO A/c DEBIT

A-011-02-01-0826-X Cash in Chest CREDIT

Euro:

M-230-01-01-0156-X MO A/c DEBIT

A-011-02-01-0156-X Cash in Chest CREDIT

3. After receiving the Cash from the Hub Branch the requesting branch passes the following entries:

Pakistan Rupees:

Branch Entry

A-010-01-01-1000-X Cash on Hand DEBIT

A-012-01-01-1000-X Cash in Transit CREDIT

US Dollars:

Branch Entry

A-010-11-01-1010-X Cash on Hand DEBIT

A-012-02-01-1000-X Cash in Transit CREDIT

Pound Sterling:

Branch Entry

A-010-11-01-1020-X Cash on Hand DEBIT

 A-012-02-02-1005-X Cash in Transit CREDIT

Euro:

Branch Entry

A-010-11-01-1100-X Cash on Hand DEBIT

A-012-02-03-1010-X Cash in Transit CREDIT

4. Procedure for Sending Surplus Cash to Hub Branch:

When cash is surplus at any branch, a request letter for arrangement of security vehicle, which is jointly singed by the chief cashier and Branch M
is sent to hub branch through lotus notes.

On receiving the request letter designated cash officer at the hub branch immediately forward the same to the cash cell incharge who m
arrangement with the security company to collect cash from the requesting branch.

Pakistan Rupees:

Branch Entry

A-012-01-01-1000-X Cash in Transit DEBIT

A-010-01-01-1000-X Cash on Hand CREDIT

US Dollars:

Branch Entry

A-012-02-01-1000-X Cash in Transit DEBIT

 A-010-11-01-1010-X Cash on Hand CREDIT

Pound Sterling:

Branch Entry

A-012-02-02-1005-X Cash in Transit DEBIT

A-010-11-01-1020-X Cash on Hand CREDIT

Euro:

Branch Entry

A-012-02-03-1010-X Cash in Transit DEBIT

A-010-11-01-1100-X Cash on Hand CREDIT

5. After ensuring that the branch has sent the surplus cash to Hub branch the designated cash officer passes the following entries in AL Habib Syste

Pakistan Rupees:

Branch Entry

A-012-01-01-1000-X Cash in Transit DEBIT

M-230-01-01-0586-X MO A/c CREDIT

US Dollars:

A-012-02-01-1000-X Cash in Transit DEBIT

M-230-01-01-0840-X MO A/c CREDIT

 Pound Sterling:

A-012-02-02-1005-X Cash in Transit DEBIT

M-230-01-01-0826-X MO A/c CREDIT

Euro:

A-012-02-03-1010-X Cash in Transit DEBIT

M-230-01-01-0156-X MO A/c CREDIT

6. The IBCA is automatically responded by the branch and following entries are passed:

Pakistan Rupees

Branch Entry

M-230-01-01-0586-X MO A/c DEBIT

A-012-01-01-1000-X Cash in Transit CREDIT

US Dollars:

Branch Entry

M-230-01-01-0840-X MO A/c DEBIT

A-012-02-01-1000-X Cash in Transit CREDIT

Pound Sterling:

Branch Entry
 M-230-01-01-0826-X MO A/c DEBIT

A-012-02-02-1005-X Cash in Transit CREDIT

Euro:

Branch Entry

M-230-01-01-0156-X MO A/c DEBIT

A-012-02-03-1010-X Cash in Transit CREDIT

7. After receiving physical cash at Hub branch the designated cash officer checks the cash and enter the details of cash received.

Pakistan Rupees:

A-011-01-01-1000-X Cash in Chest DEBIT

A-012-01-01-1000-X Cash in Transit CREDIT

US Dollars:

A-011-02-01-0840-X Cash in Chest DEBIT

A-012-02-01-1000-X Cash in Transit CREDIT

Pound Sterling:

A-011-02-01-0826-X Cash in Chest DEBIT

A-012-02-02-1005-X Cash in Transit CREDIT

Euro:
 A-011-02-01-0156-X Cash in Chest DEBIT

A-012-02-03-1010-X Cash in Transit CREDIT

 Remittances of Surplus Cash: At places where more than one branches of BAHL are functioning, one of which is designated
as Main Branch other branch(es) remit surplus cash to main branch through approved security company or own arrangements.
 The main branch remits its surplus cash to Treasury Department, Principal Office, Karachi, through SBP/NBP. In that case
following entries are passed;
 The SBP/NBP remits funds by TT. When advise of remittance is received the branch informs Treasury Department which
sends IBCA to concerned branch. The IBCA is responded as under:
Debit : M.O. Account
Credit : Balance with SBP/NBP

Zero Tolerance
 A new point has now been added through INST 059, dated April 27, 2011, and our management has taken serious view
regarding the normal practice in the branches to make the payment of cheques without customer signature. The penalty for such lapses
will be serious disciplinary action by the Management.

Cash Management & its Scope:

 Broadly speaking, a product or a solution which facilitates a company in streamlining its receivables and payables falls under
the ambit of Cash Management (CM). Cash Management solutions and products are being developed with the objective to help
 corporate / commercial / SE / ME clients in improving their cash flows and bring efficiencies to their day to day operations, and at the
same time generate revenue for the bank.
 Scope of Cash Management is vast. It ranges from structuring a solution (simple and complex both) geared towards expediting
a company’s receivable cycle to an e-banking platform to facilitate a company in efficiently making payments to its vendors &
suppliers etc. It could also include a "procedure" to facilitate a company with its complex reconciliation and MIS related requirements.
 A company, depending on the nature of its business has unique requirements pertaining to its receivables/payables and a
solution tailored to address those requirements is classified as a Cash Management solution.
 Bank AL Habib vis-à-vis Cash Management Services:
 Bank AL Habib currently has a network of branches in major cities of Pakistan which position it quite well to pursue this line
of business. The single most important factor in order to provide Cash Management services is having a diversified branch network.
The more branches (in different cities) a bank has, its position improves to conduct CM business. The rest of the components, such as
development of the products, and synergy between the field force /relationship managers with Cash Management Unit also play a
pivotal role in building CM business.
 Structure and Working of Cash Management Unit:
 Cash Management Unit is responsible to co-ordinate with the field force / relationship mangers and visit clients in order to
understand and assess their cash management related requirements. Product Development/Management team is responsible to develop
new solutions / products / system in co-ordinations with Technology Division after understanding client / market requirements.
Solution Delivery team is responsible for implementing an existing solution / product for a new client. Client Services team is
responsible for handling and resolving client’s day to day queries and issues.
 Procedure:
 Through Cash Management following facilities can be availed:
Utility Bills Dividend Warrants of Staff & UCC Salary Collection Credit Cards Payment
BAHL A/c

 All the transactions carried out through this system needs to be authorized by operation manager / manager. It is actually used
to cut down the volume of work at the branch level.
 The transactions are to be processed on the same day and special deposit slips are used for different customer who is
maintaining an account and wants to utilize the cash management facilities. In case if any instrument is returned then branch
immediately informs cash management unit via lono / call. No deposit to be accepted after 04.00 p.m. Monday to Friday and 01.00
p.m. on Saturday.
 Conclusion:
 Providing Cash Management services to its corporate and commercial clients hold significant business potential for the bank. It
also puts us in the league of those few banks in Pakistan which have dedicated Cash Management Units thus elevating bank’s profile
and bringing diversification to its product/service menu. With putting in the right ingredients, Cash Management solutions and
services can yield substantial financial benefits for the bank / branches and at the same time help the field force / relationship
managers in cementing / expanding their existing relationships, and book new ones as well.

ATM Operations and Monitoring

Vide Instruction Circular 065 dated April 16, 2009 the Principal Office has circulated the requirements laid down by State Bank of
Pakistan in regard to maintaining and operating ATMs:

1. All ATM rooms must have the facility to lock them from inside.
2. There must be CCTV coverage in ATMs Rooms 24/7.
3. List of telephone numbers of Call centre must he pasted in ATM rooms.
4. The drop box in ATM room must have the line ‘Suggestions Welcomed’.
5. Customers must be educated on how to operate the ATMs.
6. Proper maintenance to ATMs must be ensured.
7. Satisfactory uptimes are essential.
8. Daily reconciliation of transactions and balancing of Cash in ATMs must be ensured.
9. Proactive resolution of outstanding ATM transactions where identify and failed transactions are confirmed.
10. Turn-around times in cases where the above does not apply are 7 days for urban areas and 09 to 11 days for rural areas.

SBP plans to impose a penalty structure in case of non-compliance with their instructions and will to carry out inspections of ATM
sites to check compliance. They will also have an independent review of overall ATM infrastructure in banks to ensure an overall
improvement in the industry. Banking Inspection Department of the State Bank of Pakistan will be conducting comprehensive reviews
of ATM Operations of banks during their banking inspections.

Note: Inspection of ATM is to be carried out twice a day by delegated staff member who is well conversant with the ATMs physically
and can trace out any device by the miscreant.
 ATM Cash Custodians:

The branch manager of each branch are instructed to designate two joint Cash Custodian at least one of whom will be a chief cashier
and will also designate a reliever who will perform the duties of ATM Cash Custodian during any one absence (INST-104-2009).

As per instruction circular 025, dated March 12, 2010. It must be ensured that all notes loaded in the ATM have been physically
checked to ensure that they are not:

 Counterfeit
 Soiled or defective
 Have no pins or staples attached
 Have no sticky or adhesive substance on them
 Have no folded corners
 Have no excessive staple holes or missing corners
 Are not crumpled or deformed

Fee for Operation of ATMs

No fee is charged for using ATMs for withdrawal from account holders of Bank AL Habib, However a fee as per schedule of charges
are recovered/charged if ATMs is used by account holders of other banks. The settlement of One Link banks is settled by Royal Bank
of Scotland which recovers amount as agreed for each transaction while "One Link" company’s share is also as per the agreement. per
transaction and remaining is the income of Bank AL Habib.
Retention Period of ATM Rolls

It has been advised by the competent authority that the retention period of ATM roll is 90 days, after that the roll may be destroyed in
presence of Branch and Operation Manager by signing the certificate as confirmation of having destroyed (no disputed transaction roll
is to be destroyed).
National Prize Bonds
All commercial banks in Pakistan are authorized to purchase and sell National Prize Bonds to general public – whether their customers
or not. National Prize Bonds form part of Teller’s Summary Sheet and Tellers Daily Cash Record. A separate head of account in GL is
available for National Prize Bonds as an asset item.

Presently National Prize Bonds of following denominations are available.

Rs.40, 000/-Rs.25, 000/- Rs.15, 000/- Rs.7, 500/- Rs.1, 500/- Rs.750/- Rs.200/- and Rs.100/-

The branches are also required to place list of winning prize bonds in each category for the information of general public. The
tellers/cash officers should also be aware about shut period and dates of draws of each category of National Prize Bonds.

When National Prize Bonds are purchased, following accounting entry is passed:

DR: National Prize Bonds

CR: Cash on Hand (Sellers signatures obtained on the backside)

When National Prize Bonds are sold, following entry is passed:

DR: Cash on Hand

CR: National Prize Bonds.

SBP issues necessary instructions in respect of purchase and sale of Bonds and requests commercial banks to extend full cooperation
to public in this regard. SBP undertakes inquiry on receiving complaint from public regarding refusal of any branch to sale/encash
prize bond and its examination teams monitor cash balances of commercial bank branches. These teams are instructed to conduct the
check on sale/encashment of Prize Bonds, and if any branch found violating the instruction of SBP, it has warned to impose penalty on
such branch.

The denominations and prizes of each are given below:

 Denomination First Prize Second Prize Third Prize
Rs.100 Rs.700,000/- Rs.200,000/- (3 Prizes) Rs.1000/- (1199 Prizes)
Rs.200 Rs.750,000/- Rs.250,000/-(5 Prizes) Rs.1,250/-(2394 Prizes)
Rs.750 Rs.1,500,000/- Rs.500,000/-(3 Prizes) Rs.9,300/- (1696 Prizes)
Rs.1,500 Rs.3,000,000/- Rs.1000,000/-(3 Prizes) Rs.18,500/-(1696 Prizes)
Rs.7,500 Rs.15,000,000/- Rs.5,000,000/-(3 Prizes) Rs.93,000/-(1696 Prizes)
Rs.15,000 Rs.30,000,000/- Rs.10,000,000/-(3 Prizes) Rs.185,000/- (1696 Prizes)
Rs.25,000 Rs.50,000,000/- Rs.15,000,000/-(3 Prizes) Rs.312,000/- (1696 Prizes)
Rs.40,000 Rs.75,000,000/ Rs.25,000,000/-(3 Prizes) Rs.500,000/- (1696 Prizes)

These figures are applicable as from February 15, 2009. SBP Letter # PBD/PMU/NN/276/MISC-2009 dated February 06, 2009.

Note: Government of Pakistan has recently revised the number of prizes for different denominations of Prize Bonds. Above is the
detailed list of the revised number of prizes against their respective denominations along with the draw schedule. These prizes are
valid from February 15, 2009.

Note: In case draw falls on a Public Holiday(s) the draw will be held on the next working day(s).
Levy of With Holding Tax:

Effective July 01, 2013 SBP has levied 15 % W.H.T on Prize Money according to SBP Banking Services Corporations {Bank}
circular PBD /GA / U-1-A /3312 / Misc-Cir / 2013 dated Aug 16, 2013 conveyed to us vide our bank’s circular: INST / 110 dated Aug
26, 2013

Features of New denominated Rs.750.00 National Prize Bonds have been advised by State Bank of Pakistan Service Corporation
Department as under (INST 128 -2011):

 Changes colour of numbering to be green under UV light

 Reverse image of numbers in red colour
 Rainbow printing (Different special inks used side by side)
 Invisible Denomination (printed in the centre of the border)
 Features of New denominated Rs.25,000/= National Prize Bonds have been advised by State Bank of Pakistan Service Corporation
Department as under (INST 010 – Feb. 02, 2012):

Specifications:

Front Side:

 Multi-Color Border In Intaglio Printing ( Different special inks used side-by-side through special printing technique)
 Watermark Paper ( Visible when held up to a light)
 Security Window Thread ( With Government of Pakistan text)
 Linographic Tint Background In Multi Color
 Invisible Denomination (Printed in the centre of the border; Glows under UV light.)
 Prize Bond Size (184 X 95 MM)

Enhanced Security Features:

Front Side:

 White Line Or Reverse Rosette:

1. Printed in Anti-Forgery OVI (Optical Variable Ink)
2. Pattern that displays in two distinct colors (Depending on the angle of light)
 Penetrating Numbering
1. Ink contains Red dye (That penetrates into the fibers of paper)
2. Shifts color of numbering to be green under UV light

Back Side

 Reverse image of numbers in red color

Prudential Regulation - XXV
Schedule of Penalties on Cash Management – Monitoring of (Instruction Circular 025 dated March 11, 2004 issued under SBP
Account Department Circular No.2 dt. March 5, 2004) Under Section 83 of Banking Companies Ordinance 1962, the following scale
of penalties are applicable with effect from July 01, 2004 in respect of various categories of violation of rules and regulations
pertaining to Cash Department.
S.No. Nature of Violation/Area of Irregularities Scale of Penalties
1 Violation of instruction issued vide SBP BSC Rs.5, 000/- per instance plus Rs.500/- per
day during which the default continued.
Circular No. Cy -1537-1579/1(poly) -2002 for not maintaining the
prescribed statement of daily closing of cash balance.
2 Violation of instructions under SBP BSC Circular Cy.1537-1579/1- Rs.5, 000/- per instance plus Rs.500/- per
(Poly)-2002 dated October 02, 2002 as amended vides SBP BSC day during which the default continues..
Circular no. Cy 01/03 dated April 22, 2003 regarding maintenance
of minimum "One Day’s fresh / re-issue able balance in
accordance with the average daily cash payment
requirements."
3 Violation of Instructions under SBP –BSC Rs.5000/= per instance plus Rs.500/= per
Packet on un-sorted/non-issuable
Circular No. Cy- 1537-1579 / 1 (Poly) -2002 dated October 02, currency notes of any denomination, if
2002, for not properly sorting Bank Notes Packets / Bundles into caught being pushed into circulation.
issuable/non-issuable condition over the payment counter.
4 Violations of instructions issued vide SBP BSC Circular No. Rs.5000/= per instance.
Cy/01/03 dated 22-4-2003 for not providing extra effort for on spot
sorting of bank notes over the counter in case where average daily
payment is exceeding Rs. 1.50 million.
5 Violations of instructions issued vide SBP BSC Circular Cy./01/03 Rs.500/- per packet of any denomination
dated 22-4-2003 for not affixing "SORTED" stamp on packets of is caught during on-site examination and
bank notes. Rs.500/- per packet in case any
stakeholder along with evidence of the
same lodges a complaint
6 Violations of instructions issued vide SBP BSC Circular No. Rs.10, 000/- per case with evidence.
Cy./1415/336 -2003 dated June 28, 2003 for not accepting small
denomination bank notes of Rs.5/- and Rs.10/= as well as
cut/soiled/mutilated and defective.
7 Violations of instructions issued vide SBP BSC Circular No. Cy Rs.500/= per packet.
02/03 dated October 27, 2003 for not removing the Staple Pins
from packet of Rs.5/= and Rs.10/= denomination bank notes and
not properly banding them.