DEPOSITS DEPARTMENT

TABLE OF CONTENTS

Deposits Department- Introduction 3

Banker Customer Relationship 4

Types of Customers 6

Account Opening Guidelines 9

Account Opening Checklists for various types of customers.(INST/038/2019). 12

Free Life Insurance Scheme 25

Category of Deposits and Major Rules of Each 26

A) AL Habib Asaan Account 31

B) Asaan Remittance Account 32

Pensioner Account 33

AL Habib Zamanat Account 34

Visually Impaired /Blind Person’s Account 35

Private Foreign Currency Accounts 36

Private Non-Resident Rupee Accounts 37

(AML/CFT/CPF) Regulations 01 to 15 42

Annexure–I 50

Risk Based Approach (RBA) 55

Issuance Of Cheque Books 57

Operational Instructions 59

Standing Instructions 60

Stop Payment of Cheques 61

Court Order (Garnishee Order) 63

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Deceased Accounts – Payment of Credit Balances 64

Dormant Accounts 65

Closing Of Accounts 67

Term Deposit Receipt – Issuance And Payment 69

Negotiable Instruments Act 1881 – Important Sections 71

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DEPOSITS DEPARTMENT

3.1 INTRODUCTION
The growth and progress of a commercial bank depends upon the level of resources available to it and
their proper utilization. Major component of resources available to a bank is its deposits, which are
mobilized for the purpose of lending and investments. The size and volume of operations of a bank
depends upon its level of deposits. Higher the deposits, higher the level of lending / investments. The
earning capacity of any bank depends upon its lending and investments, which are generating
revenues while deposits, are expense based. Since customer deposits are so important for banks they
endeavor not only to maintain level of deposits once mobilized, but also try hard to increase it with the
passage of time, so that the level of revenues keep on increasing. From the revenues so generated,
banks meet their cost of funds and administrative costs resulting in net surplus or pre-tax profits.

The art of prudent banking lies in knowing the:

 Cost of funds which may be Direct in the form of profit payable on certain accounts and Indirect
i.e. expenditures incurred on maintaining customer accounts.
 Achieving a strong base and mix of deposits and maintaining it
 Controlling expenses and avoiding leakages of income
 Bank officer must be aware of the market in which he operates various avenues of deposits and
should know the financial requirements of his customers, with a view to quality lending.
 Knowledge of latest banking operations, procedures and systems, Range of services, and recent
innovations.
 Legal framework in which we operate and adherence to various laws, regulations and guidance
provided by State Bank of Pakistan.

To achieve this goal, a bank officer is also required to have command in following basic aspects:

i) Types of deposits accounts opened and rules/regulations of each

ii) Category of customers and risk related to each type of customer accounts
iii) Precautions, procedural, documentary and legal requirements for opening accounts
iv) Prudential Regulations issued by SBP and guidance provided by Principal Office regarding
CDD (Customer Due Diligence) /Know Your Customer (KYC), Anti Money Laundering
(AML) /Combating Financing of Terrorism (CFT), Suspicious Transactions & FATCA
requirement.
v) Filling of Risk Based Approach (RBA) and Customer Risk Profile (CRP) forms properly.
vi) Undertaking of the customer (Individual / Sole proprietorship concern) at the time of account
opening under the Foreign Account Tax Compliance Act (FATCA) being mandatory is to be
taken as per US legislation aimed at Combating Tax Evasion by US person / nationals.
vii) Proper handling of customer relationship management and customer complaints.
viii) Excels in counter services with a view to handling customers politely, efficiently and providing
personalized and required services to each.
ix) Knowledge of relevant laws and procedures on various aspects of operations on accounts.

Jobs Done in Deposits Department

 Opening of Accounts; Allocation of Account Number, completion of formalities and forwarding AOF
with other documents to Central Processing Unit.
 Delivery of Cheque Books.
 Maintenance of SS Cards and other record.
 Issuance of Term Deposit Receipts and payment of profit on them.
 Issuance of Statement of Accounts on customers’ requests.
 Stop Payment and other instructions – Processing, Recording and Filing Recovering Charges and
Removal of such instructions wherever required.
 Handling of customer’s request for removing dormant condition.
 Recording and carrying out Standing Instructions.
 Recording Change, addition, deletion of Signatures in customers’ accounts.
 Processing, Recording and disposal of instructions regarding change in constitution.

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 Recording, Processing and Filing of Power of Attorneys, Mandates of Customer and deletion thereof.
 Marking Accounts as Deceased and payment of credit balances after completing the formalities.
 Transfer of funds From Collection and other such accounts to PO/Other branches as per Instructions.
 Court Orders – Receipt, Recording, Processing and Filing.
 Providing guidance to customers on various products of Bank AL Habib, Providing balance enquiries
and related information to customers.
 Payment of profit of deposit amount, deduction of With Holding Tax on profit amount, Zakat as per
NISAB amount and other government levies like Federal Excise Duty-FED.
 Periodical review of accounts and reporting suspicious transactions to Compliance Cell.
 Transfer of Accounts to other branches of Bank AL Habib.
 Closing of Accounts.

3.2 BANKER CUSTOMER RELATIONSHIP

Banker: Banker is a person transacting the business of banking and has been defined earliest in Negotiable
Instrument Act 1881 under section 3 (b) as

“Banker means a person or institution transacting

the business of accepting,
for the purpose of lending or investment,
of deposits of money from the public,
repayable on demand or otherwise and
withdrawable by cheque, draft, order or otherwise,
and includes any Post Office Savings Bank”

Almost the same definition has been given in Banking Companies Ordinance, 1962- Section, 5(b)

“Banking means the accepting,

for the purpose of lending or investment,
of deposits of money from the public,
repayable on demand or otherwise,
and withdrawable by cheques, drafts, order or otherwise”

Customer: any person who maintains a regular bank account,

without taking into consideration
the duration and frequency of operation of their accounts.

General Relationship: Debtor and Creditor:

The general relationship between banker and customers is of debtor and creditor. When customer opens an
account and places funds with the bank, the banker becomes debtor and customer creditor. The relationship
is reverse when bank advance money to the customer (in such cases bank becomes creditor and customer
becomes debtor).

As a debtor customer is issued cheque book that should be kept safely under lock and key and must keep
sufficient funds in the account and should not draw any cheque without having sufficient funds in the
account.

As a creditor, it is bankers right to provide loan to the customers of its own choice. The customer is to follow
the rules and regulations and also banker has right to charge mark up or interest.

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 Banker - Customer Relationship as per transactions
S.No. Specific Transaction Banker's Position Customer's Position
1 Customer Opens account and deposits funds
Debtor Creditor
2 Customer takes loan from bank Creditor Debtor
3 When locker is allotted to customer Lessor Lessee
4 When customer deposits items for safe custody Bailee Bailor
5 Purchase of DD by Customer Debtor Creditor
6 Payment of DD by payee Trustee Beneficiary
7 Collection of Cheques/other instruments Agent Principal
8 Goods delivered to bank against pledge Pawnee Pawner
9 Loan taken against Landed property Mortgagee Mortgagor
10 Standing Instructions given by customer Agent Principal
11 Sale or purchase of shares/securities Agent Principal
12 Funds deposited by customer for some specific Trustee Beneficiary
purpose
13 When Bank has lodged complaint with some Plaintiff Defence
court
14 When customer lodges complaint against bank Defence Plaintiff
with some court.
15 When bank issues a Guarantee on behalf of Guarantor Principal
customer

Rights of Customer Duties of Customer

 To draw cheques against available balance in  Customer must present cheques for
the A/C payment/collection within business hours.
 To get account statement; the detail of  Cheques must be presented within
transactions. reasonable time from the date of their
 To sue the bank for cost, loss & Damages issuance.
when his cheque is wrongfully dishonoured.  Draw cheque carefully to avoid alteration.
 To sue the bank if the A/C secrecy is not  He must keep cheque book under lock and
maintained. Key to avoid misuse of it.

Special Features of Relationship

 Bankers Obligation to Honour Cheques: When customer draws a cheque against available credit
balance and cheque is drawn correctly within banking hours then banker has to pay the cheque, if
cheque is returned unpaid then banker has to compensate the customer for wrongful dishonor

 Bankers Right to Lien: The banker has right to possess the goods or securities till the amount
borrowed by the customer is adjusted in full. This right does not confined to certain goods but all the
goods and securities available with bank.

 Bankers Right of Set Off: The right of combing two accounts together, one with debit balance and
other is with credit balance. If both are combined banker's advance is adjusted.

 Bankers Right to Charge For Services: The banker has to charge for services provided to
customer except where some concessions are allowed in advance.

 Bankers Duty of Secrecy: A banker is required to keep the information of his customer very
confidential and not to be disclosed except where legal exceptions are allowed.

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Exceptions to “Banker’s duty of secrecy”.

A- Under compulsion of Law:

 As per Pakistan Criminal Procedure Code Sec.165 a police officer seek information regarding a
customer account or bank record with prior approval from session judge
 As per “Income Tax Ordinance 2001” Sec. 165-A, banks are required to make arrangements
to provide FBR (Federal Board of Revenue) the information about account holders (Only for tax
purposes).

B- Duty to public to disclose.

 Very carefully, in case of national emergencies under very special circumstances.

C- In the interest of the bank.

 Banker sue the customer for recovery of loan/overdraft amount

D- With consent of the customer.

 Customer may give standing instruction to provide certain information for specific purpose like
advisor, auditors
E. Common courtesy to other banks.
 Confidential opinion or credit information

Termination of Relationship

 Notice by Customer: For termination of banker customer relationship the customer has to inform
bank about his intention and banker has to close his account and refund the balance available.

 Notice by Banker: If account is not satisfactorily operated and banker feels chances of fraud or
forgery or any adverse situation , it can close the account of customer and refund the credit balance
available in the account

 Death of Customer: All the agreements and contract forms by the customer in his life time are
terminated by the death of the customer and bank has to pay the credit balance available in
customer's account as per course orders or under the country's laws.

 Insanity of Customer: An insane persons has no power to judge the things like a person with
perfect mind as such law gives various options to bank one of these may be closing of account as per
court order.

 Insolvency of Customer: The financial position of a customer is impaired by the insolvency. All
the rights of the customers are transferred to a competent court as such banker has to follow the
instructions of the Court and transfers funds available to the credit of the account are transferred to
the Court.

3.3 TYPES OF CUSTOMERS

The Persons who become Customers of the Bank are of two types:

A. Natural Persons: A human being (an Individual) or more than one Individual (Joint Account)
B. Juridical Persons: An entity or an organization. i.e. legally created persons.

Major Considerations:
Customer’s Qualification (Natural Person)
 An adult person (above 18-years of age).
 Possess sound mental health.
 Should not be Insolvent
 Not barred for entering into a legal contract from court of law.
 Should be acceptable as “Customer” for the bank.

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Nature / Type of Liability
The bank has to be careful about the nature of liability of its customers to protect the lending of money to
various types of borrowers. Since the money being lent is out of customers deposits therefore the banker has
to be careful about the recovery of advances, Ignorance of which may lead to dreadful consequences.
Therefore, it is the primary duty of bank to exercise all the necessary precautions one of which may be
ascertaining the length of customers liability as per laws enforced.

Limited Liability:
In limited companies, the liability of each share holder is limited to the extent of its invested amount in the
business. If a shareholder is holding 1,000 shares of Rs.10/- each, then its liability is for Rs.10,000/- only.
The shareholder is not liable to compensate the creditors of the company beyond this amount (no more
money from his personal property can be demanded).

In case of private limited company, all the directors have to execute personal guarantee for the whole debt
borrowed. If personal guarantee is not obtained then they are not responsible for payment of debt beyond
their shareholding.

In case of limited company by guarantee, the directors who have executed guarantee are responsible for the
debts of the company.

Unlimited Liability:
The individuals, joint account holders, sole proprietors have unlimited liability for repaying their debts. If
they have no funds, their personal properties and belonging may be attached. The customers with unlimited
liability have to compensate their creditors from their personal assets.

The Joint and Several Liability:

Mostly referred to partnership firms where all the partners have to satisfy whole borrowings individually by
any one or collectively by all the partners.

Example: A partnership firm having four partners sharing the profits equally. If at a certain point of rime,
the outstanding debit in the firm’s account is Rs.400,000/- then one partner cannot free himself from the
total liability by offering Rs.100,000/- being his individual share. i.e. All the partners shall remain liable to
pay till such time when the total liability is paid off. In our Bank, a partnership letter is taken in which all
partners sign in their personal capacities and acknowledge their liability being "Joint and Several".

Rule in Clayton's Case:

The death of a partner dissolves the firm and deceased's personal representatives have no right to act upon
his behalf therefore the operations in account should be stopped to fix the liability on the estate of the
deceased partner. If this is not done the Rule of Clayton's Case will operate i.e. The Fresh Credit will Reduce
the Liability of the Deceased Partner, and Debit Entries will be the Liability of the Surviving Partners

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 Types of Customers – a quick overview
S.No. Type of Customer Nature Precautions Suitable A/C Type
1 Individual (one Person) Natural Person Contractual Capacity & Saving Account
Suitability as per KYC Policy
2 Joint persons (two or more) Natural Person ______do____ Saving Account
of both or all
3 Illiterate Persons or persons Natural Person ______do____ Same as above
With shaky handwriting (Photo A/C is to be opened)
4 Blind / Visually Impaired Natural Person Joint account with literate Saving Account
& other handicapped person or A/C operation in
Persons presence of witness.
5 Minor with Guardian Natural Persons Guardian will operate Young Saver A/C
account, minor is not allowed
to operate A/C.
6 Ladies – Housewives Natural Identify the beneficial owner Saving Account
Persons (if funds not belongs to her)
7 Non- Residents Natural or FCY Account
Juridical
8 Sole Proprietary Concerns Juridical Current Account
/T.Call Account
PLS-TDR
9 Partnership Firms ____do____ Same as above

10 Private Limited Companies ____do____ Same as above

11 Public Limited Companies ____do____ Same as above

Co. Ltd. By Guarantee
12 Holding Companies, Joint ____do____ Same as above
Ventures & Subsidiary Cos.

13 Clubs, Associations, ____do____ Same as above

Societies
14 Trusts/ Foundations/ NGOs ____do____

15 Government Agencies/ ____do____ Same as above

Autonomous Bodies/
Corporations
16 Executors/Administrators Natural or Current Account
Juridical
17 Liquidators. ____do____ Current Account

18 Collection Accounts; Current Account

of utility Bills Juridical
School/College fees,
Relief Funds etc.

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3.4 ACCOUNT OPENING GUIDELINES

Introduction

The opening of a bank account is a contractual agreement between Bank AL-Habib Limited (‘the Bank’) and
the customer, by virtue of which both concerned parties enter into a mutually beneficial relationship,
therefore, following basic points are to be considered.

a) Both the parties should possess capacity to contract: The prospective account holder should possess
capacity to contract. i.e. Major( not minor), Sane- (not insane), Solvent– not insolvent and capable
of entering into any contract, – not debarred under any law or under any Court Orders - Business
entities established suitably and legally.
b) An offer made by the prospective customer which is accepted by the bank and
c) There must be some legal consideration for both the parties in that agreement.

It should be understood that the process of Account Opening is the “first contact” which the prospective
customer establishes with the Bank and vice versa. Therefore, extreme care has to be exercised during the
course of completion of account opening documentation, especially the Account Opening Form (AOF)
which is a basic relationship document. Although account opening is considered to be a simple operational
process, any negligence can often cause a bank to suffer from reputation risk and financial losses. The
account opening documentation should not be viewed as merely a formality but it provides the opportunity
for the concerned Account Opening Officer to tactfully and politely interview the prospective customer for
verification of the credentials being furnished.

Most customers establishing new relationships with, the Bank are usually walk-in-customers who have been
recommended by existing Account Holders. However, the Branch Managers can also authorize any officer
to contact prospective customer for the purpose of opening an account with the bank.

Acceptable Customers
Before entering into a banker-customer relationship, the Account Opening Officer must ensure that only
those customers are accepted for a relationship with the bank who meets the specific criteria for minimum
acceptance. The acceptable customer needs to carry the following characteristics as a minimum:

Compliance with AML/CFT Regulations 1 to Regulation 6.

 The prospective customer’s ability to demonstrate legal right to operate account
 Evidence of physical presence of the prospective customer/ business (in case of corporate accounts)
 Verifiable contact information
 Legally acceptable introduction by a third person who holds a satisfactorily conducted account with
the Bank
 eKYC & CRP completed in respect of all customers.

Preliminary Requirements
The Account Opening Officer shall ask the prospective customer some preliminary questions before issuing
the AOF. Following inquiries are made from the prospective customer:
 Complete Residential Address
 Complete Employment Address/Business Address
 Source of Income
 Purpose of Account
 FATCA Status
The Account Opening Officer shall also arrange for a meeting between the prospective customer and the
Branch Manager

Account Opening Form (AOF)

Following documents are to be provided to the customers who wish to open account with BAHL.
 Account Opening Form (AOF)
 Specimen Signature (SS) Cards (02)
 FATCA form,
 Copy of Rules and Regulations against customer's acknowledgement.

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One form can be used, for upto four account holders (In case of Joint Account). The Branch Manager shall
meet the prospective customer to make a careful assessment as to the genuineness of prospective customer,
source of funds and expected nature of the banking relationship in the future. Once satisfied, Branch
Manager signs on AOF and would forward the complete set of documents to the Account Opening Officer
for further processing and opening of Account in Fast Mode after verification of documents. Page 1of
FATCA form is to be filled & signed by the customer and AOO shall fill its page 2 on the basis of the
information provided by the customer on both forms i.e. FATCA and AOF.

Scrutinizing & Verification of Details on an Account Opening Form (AOF) and other Documents
Duly filled AOF along with the required documentation is to be obtained from the prospective customer.
Account Opening Officer shall scrutinize the AOF to ensure completeness of information and mark all blank
spaces in the AOF and SS card as “Void” to prevent potential misuse/fraud.

The mandatory information/verification required includes:

 Name of applicant
 Name of Father/Husband
 SNIC/CNIC/NICOP/POC will be verified through NADRA Verisys system.
 Passports having valid visa and/or any other proof of legal stay (for foreign individuals only)
 Alien Registration Card (ARC) duly issued &verified from NARA, Ministry of Interior (local
currency account only).
 Nationality
 Current and Permanent mailing addresses.
 Contact information.
 Introducer
 Signature of prospective customer on Terms and Conditions of the AOF.
 In case the customer wishes to authorize any person(s) to act on his/her behalf (mandate holder,
authorized signatory etc.), evidence of mandate/authorization along with attested copy of valid
identity document of the mandate holder/authorized signatory, will be obtained from the customer as
per existing bank practice.
 Unique Mobile No. is mentioned/given on the Personal Information Section in AOF against
registered Mobile Number provided for SMS Alert Subscription. Account Opening Officer shall
verify the mobile number for the existing customer in AL Habib Banking System prior sending these
documents to CPU for their processing purpose for the subsequent services i.e. SMS Alerts,
ATM/Debit Card and Internet Banking requests etc.
 If the mobile no. is not aligned with existing record/information, the same fact shall be mentioned by
the Account Opening Officer (AOO) by giving notation ‘New Mobile Number’ on the Application
Form.

The Account Opening Officer shall cross check the prospective customer’s identity provided in the AOF
against the CNIC and other documents and affix the "ORIGINAL SEEN" rubber stamp under the logo of
NADRA and sign there-against. Verification of the identity documents must be completed before the fast
opening of accounts. Signatures of the customers should be “Admittes” and “Verified” as per the
requirement.

 ‘Account shall only be opened subject to necessary Due Diligence and Bio Metric Verification.
(Note: Accept initial deposit only after all formalities have been completed and account is
activated from CPU. INST/168/2018 Dated: November 13, 2018.)
 No transaction in the account and issuance of cheque book/ ATM/ Debit Cards/ Union Pay
International (UPI) etc. is allowed until completion of verification of identity of the customer.

 Branches shall intimate the verification results to CPU, which shall only open accounts and issue
cheque book on receiving positive verification.

 In case of negative verification, branches will close the accounts and maintain a list of such
accounts/deposits with the help of IT Division. Such cases will be immediately reported to
Compliance Division to maintain a centralized list of these customers and also to FIU if applicable.
Further, all such customers must be informed to visit the branch to receive a refund of their initial

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 deposit.

 Branches/Sub-Branches are advised to check CNICs of all new customers in FIU Watch List Web
Portal before opening any account ( A certificate printed through this portal must be attached with
the set of documents and sent to CPU for processing of account.). If the record of any CNIC is found
as a match in the web portal, it must be immediately reported to F.I.U. and the account not opened.

Account Opening Officer shall ensure that signature of the prospective customer(s) is taken on every place
provided in the AOF for that purpose.

Filling of KYC/CDD Form

The Account Opening Officer shall fill-in KYC /CDD form in the e-KYC Module after allotment of account
number based on the interview conducted by him with the prospective customer as well as other details
obtained during the verification process.
KYC/CDD form must be properly filled in and authorized by Branch Manager/Operations Manager
in the e-KYC Module. For Joint Accounts, the Account Opening Officer shall fill KYC/CDD form in the
e-KYC Module pertaining to all joint account holders along with operational instructions.
Branches are required to take printout of KYC/CCD forms of customers along with other relevant forms, if
any, and then these forms will be sent to CPU, for record keeping.
Branch Manager or Operations Manager is responsible for periodic review of the e-KYC Profiles of the
customer.

Names of all customers must be verified through FIU Watch List Web Portal. In case of any match if found,
it must be immediately reported to FIU and account should not be opened. A certificate printed through this
portal must be attached with the set of documents and sent to CPU for processing of account.

Note:

(a) As per Instructions Circular number INST/006/2012, accounts of individuals with single name should be
opened as

 For male A/C Holder Asad S/O Sattar

 For female A/C Holder Sana D/O Qadir or for a married female Salma W/O Fazal

(b) A separate 17 digits account number is allotted for each account type. IBAN (International Banking
Account Number) consist of 24 digits (Alpha numeric characters) will also be generated by the system
simultaneously with the 17 digits account number. There are distinct digits to identify the branch, type of
account, customer’s base number, running digit and check digit. The account number is structured in the
following way:

“XXXX(1)-XXXX(2)-XXXXXX(3)-XX(4)-X(5)”
(1)Branch Code-(2) Type of Account- (3) Customer Number- (4) Running Digit- (5) Check Digit

The Account Opening Officer shall write the allotted account number and IBAN number on the AOF and SS
card. The Account Opening Officer shall forward the signed and stamped AOF, SS Card, KYC and other
documents to the Branch Manager for approval. The authorized officer shall authorize the account opening
in the system by accessing the Transaction Security section in the AL-Habib Banking System.

Initial Payments and Follow up procedures

The Account Opening Officer shall covey the account number and ask the prospective customer to make an
initial deposit which must cover cheque book and other charges depending on the type of services that the
customer is requesting for.

The customer cannot transact from his/her account prior to the account is activated by CPU.

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3.5 ACCOUNT OPENING CHECKLISTS
(For detail, please read Instruction Circular No. INST/038/2019).
A. General/ Common requirements for all categories of accounts

1. Account opening form is dated and in sequential order without skipping any serial number.
2. All fields on Account Opening Form (AOF) and Specimen Signature Card (S.S. Card) are properly
filled-in.
3. Account Title and Full Name on AOF matches with name on identity document.

NOTE: Single name in account title is not allowed. If an individual with a single name opens an account,
ensure that his/her name suffixed with his/her father’s name/ husband’s name.

4. Identity number mentioned on AOF tallies with the identity document.

5. Account operating instructions are mentioned on AOF & S.S Card and are same.
6. Provide signed Terms & Condition Booklet to the customer and retain a signed “Declaration” along
with AOF, after completing the account opening process. . Declaration on “Rules/Terms &
Conditions” is signed by the Account holder and signature is verified.
7. Complete addresses of the customer are recorded on AOF as per Instruction Circular No. 086, dated
October 30, 2007.
8. Details of previous bank account (if any) are mentioned on AOF.
9. Account Opening Officer Certificate is completed and signed by the Branch Manager and Officer.
10. AOF has been signed by the account holder and signature(s) are duly admitted by Account Opening
Officer/Branch Manager/ Operations Manager.
11. Signature of account holder is verified on S.S. Card.
12. Next of kin column (i.e. Name, address, relation and contact number) is completely filled and signed
by the account holder.
13. AOF sections, which are not applicable, are crossed/marked “VOID”.
14. Category of SBP Code is mentioned on the AOF.
15. In case of hold mail instructions, Hold Mail Indemnity has been obtained and Branch Manager has
satisfied himself about reason for hold mail. (Ref.: Inst. 090 dated June 12, 2015). [As per
INST/206/2019, Statement of Account is not dispatched to customer, however bank will
continue to send other communication to customer’s given address.]
16. Rubber stamps containing personal names of Staff members should not be affixed on AOF and
relevant documents.
17. Mobile numbers are given / mentioned on the personal information section on Account Opening
Form should be same as registered Mobile Number for SMS Alert subscription
18. Vicinity / addresses should be confirmed, where applicable.
19. International Bank Account Number (IBAN) is mentioned on AOF.
20. Customer Risk profiling is conducted as per Risk Based approach vide Instruction Circular # 141
dated November 22, 2017.
21. Zakat Exemption Form / CZ-50 is obtained, where applicable.
22. Accounts of the any North Korean / Democratic People’s Republic of Korea including consular
officer related / accredited to the North Korean/ DPRK.s mission national including will require
prior specific approval of Compliance.
23. Branches/ sub branches must ensure to send/ dispatch Account Opening Form (AOF) along with
complete required documents to CPU/ Hubs on SAME DAY after Fast Account opening for further
processing at their end.
24. Initial Deposit from customer should only be accepted after completion of account opening process
at CPU.
25. KYC/CDD is conducted through e-KYC module as per Instruction Circular No. INST/144 dated
August 24, 2015.

Screening from Debarred Persons and FIU Watch List

1. Check names and CNIC/identity numbers of the customers, Minor, Guardian Directors, Partners,
Trustees, Members and persons authorized to open and operate the account, beneficial owners, Fund
Provider, Mandate from “List of Debarred Persons” & “FIU Watch List” before Fast opening of
account and Maintenance requests (i.e. addition of any signatory, director, trustee, partner, mandate,
beneficial owner etc.

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 2. Affix “Debarred list checked" stamp on AOF duly signed by BM / RM.
3. Print of screen shots of "List of Debarred Persons" by Name and Identity Number where match is
not found are attached with the respective account opening /account maintenance documents.
4. Enclose signed print out of “FIU Watch List” search certificate with account opening/ account
maintenance documents. AOO should ensure Identity Document number on FIU Watch List
matches with the available document.
5. If the customer details are matched with the persons appearing in the “List of Debarred Persons” &
“FIU Watch List”, the account opening/account maintenance request will be put on hold and the
case will be referred to Enquiry Unit at Compliance Division (For “List of Debarred Persons”) and
FIU (For “FIU Watch List”) respectively with a copy to respective Compliance & FIU Heads,
Branch/Resident Manager, Area Manager/Chief and concerned Zonal Head.

Identity Verification

1. A photocopy of any one of the following valid identity document stamped as “original seen with
Branch Name” and signed by officer.

a. Computerized National Identity Card (CNIC) issued by NADRA.

b. Smart National Identity Card (SNIC) issued by NADRA.
c. National Identity Card for Overseas Pakistani (NICOP) issued by NADRA.
d. Pakistan Origin Card (POC) issued by NADRA.
e. Alien Registration Card (ARC) issued by National Aliens Registration Authority (NARA),
Ministry of Interior (local currency account only).
f. Passport having valid visa on it or any other proof of legal stay along with Passport (For Foreign
National individuals only).
g. Smart National Identity Card for Overseas Pakistani (SNICOP) issued by NADRA.
h. Proof of Registration (PoR) Card issued by NADRA to Afghan Refugees as per INST 037/2019.

2. Photocopies of identity documents shall invariably be attested by Gazetted Officer/ Nazim/

Administrator or an officer of bank / DFI after original seen.
3. In case of expired CNIC, account may be opened on the basis of attested receipt/token and expired
CNIC subject to condition that branch shall obtain copy of renewed CNIC of such customer within
03 months of the opening of account.
4. Biometric Verification to be carried out before Fast Opening of an Account in case of Individual,
Joint, Proprietorship, Authorized Signatories (in case of Entities) and Mandate Holder in these
accounts, for those holding CNIC, NICOP, POC, SNIC, PoR. Upon successful verification of the
customer through Biometric process, Branch should take the print out of NADRA response and
attach with AOF. Branches shall affix stamp having the following disclaimer on the booklet of
Terms & Conditions declarations section.

“I/We hereby authorize Bank AL Habib Limited to access/avail Biometric Verification from NADRA
against my/our thumb impression(s) and other details as required by bank from time to time”

5. Bio-Metric verification is not required for (a) Foreign Nationals opening account on the basis of
POC, ARC or Passport. In case of customers whose eligible identity documents are other than
biometrically verifiable documents, re-validation/ verification of identity shall be done based on
documents, data or information obtained from customer and/or from reliable and independent
sources having regard to bank/DFI.s own assessment of materiality and risk.
6. In case of the following technical / customer related issues, account opening/ signature updation
would be subject to verification of identity of customer using NADRA Verisys.

a. NADRA does not have biometric records of prospective customers, the designated officer at
branch will obtain a screen shot of the displayed message from NADRA portal for branch record
purpose and advise customer to rectify the issue from NADRA for biometric verification.
b. NADRA system / data / connectivity or other related technical issues with biometric verification
on temporary basis.
c. Customer’s temporary issue where the biometric impressions cannot be captured due to any
reason e.g. wounded / bandaged hands / mehndi, etc.

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 7. In case of entities, Account can only be opened AFTER obtaining all necessary documents as per
Annexure 1 of AML/CFT Regulation , completing CNIC/ SNIC, NICOP, SNICOP, POC
verification through Verisys/ Biometric and obtaining necessary approvals from Compliance /
Legal / Respective Zone (as applicable).
8. In case customer’s signature on AOF are different from CNIC, undertaking to be obtained on the
prescribed format as per Instruction Circular # 14 of 2010.
9. In case the CNIC does not contain a photograph, bank/DFI shall obtain following:

a. A duly attested copy of either driving license, service card, Nikkah Nama, birth certificate,
Educational degree/certificate, pension book, insurance certificate.
b. A photograph duly attested by gazetted officer/ Nazim/Administrator/bank officer.
c. Copy of CNIC without photograph duly attested by the same person who attested the
photograph.

10. In case of third party mandate, ID documents of Mandate holder to be obtained. Biometric
Verification and Relationship of the third party with the customer should also be ascertained. No
mandate is allowed in Photo and Pensioner Account.
11. In case beneficial owner is other than account holder, ID documents to be obtained and verified.
Details of beneficial ownership must be mentioned in e-KYC portal.
12. In case of an account/ relationship of an entity with abbreviated name or title, the bank/ DFI shall
satisfy itself that the subject name/ title is in accordance with the constituent documents of the
customer entity. Any account/ relationship shall not be allowed in abbreviated name in cases where
entity has its complete name (non-abbreviated) in their constituent document.

Politically Exposed Persons (PEP)

1. Account of the Politically Exposed Persons (PEPs)/related to PEPs or high profile position to be
opened after taking approval from Zonal Head and Compliance Division.
2. PEP close family members include spouse, children and their spouses, parents and siblings. Close
associates include widely and publically known business colleagues, personal advisors and
companies or entities where a PEP is a major shareholder, member of the Board or member of the
senior management.
3. PEP's accounts or PEP linked entities accounts will be marked as High Risk in the system and will
require semi-annual review of KYC information.

a. Determine whether a customer or beneficial owner is a PEP. The same should be marked in the
eKYC Form (available in the eKYC Module).
b. Public sources of information (e.g. websites, print media etc.), if available, to gain a better
understanding of the reputation of the customer and record in the eKYC / CDD form.
c. Ensuring “appropriate and reasonable measures” for establishing source of funds / wealth and
feed the same in relevant section of eKYC module.
d. Obtain Zonal Head's approval for opening of PEP's account.

For detailed guidelines, refer Instruction Circular No. 021/2018

Customer Introduction

1. Introducer of an account will not be acceptable if:

a. Introducer is in the debarred list / FIU Watch List.

b. Introducer has been account holder of our bank for less than 3 months.
c. Introducer account is marked as “Dormant Account”.
d. Introducer account has “NIL balance” with our bank for the last 3 months.

If Customer’s Introducer is a BAHL Account holder of another branch, confirmation should be obtained
from the Branch/ Operations Manager of the Introducer’s branch before fast account opening. Account
Opening Officer will scan the account opening form first page & the page on which introduction has been
provided and send the same to the Branch/ Operations Manager of the introducer’s branch through LONO

14
for introducer’s signature verification and feedback on the conduct of the account maintained by the
introducer with that branch.

2. The introducer’s branch will take the print out of the pages and affixed signature verification stamp,
sign and write the signatory number (if the above conditions are checked. After re-scanning the
pages, introducer’s Branch / Operations Manager shall provide its verification & confirmation
through LONO in the prescribed format (Ref: INST/008 dated January 12, 2017).

3. The Account Opening Officer will not proceed until confirmation through LONO is received from
the Branch / Operations Manager of introducer’s branch.
4. Account Opening Officer will take the print out of LONO along with the pages of AOF where
introducer’s signature is verified by the introducer branch Operation / Branch Manager. These print
outs will be attached with original account opening form / documents for record purpose
5. In case of introduction from other bank, the following care must also be exercised.

 Carefully check the reply of the other Bank / DFI, and

 Exercise more vigilance during the KYC/CDD process.

6. Account introduced by the account holder of another bank / branch, “Introducer feedback form” has
been obtained from that bank / branch. Refer Instruction Circular No. INST 008/2017.

Foreign Accounts Tax Compliance Act (FATCA) - Individuals and Sole Proprietorship

1. FATCA Form check list is filled and signed by the account holder and Guardian (in case of minor
account) /Mandate/Beneficial Owner.
2. Page 1 of the FATCA Form will be filled-in and signed by the customer while page 2 of the form
will be filled-in by the Account Opening Officer (AOO) on the basis of information provided by the
customer, including that in the AOF.
3. Relevant FATCA form W8-BEN (Ref.: INST/016 dated January 30, 2017) or W9, obtained, if
applicable. [Revised W-9 & W-8BEN(Ref.: INST/102 &103 dated June 13, 2019)] {Revised
FATCA Form as per INST/234/2020}
4. Compliance Division will review the account if customer has provided either W-8BEN or W-9.

For detailed guidelines, refer Instruction Circular No. 111 dated July 1, 2014.

Foreign Accounts Tax Compliance Act (FATCA) – Entities

1. FATCA Classification Form on page 3 is filled-in according to the nature of Entity.

2. The Bank will not open accounts for Recalcitrant entities i.e. those entities which refuse to respond
to the questions listed in the FATCA Classification Form OR provide the FATCA documentation
requested by the Bank.
3. The residential address of each of the authorized signatories will need to be obtained to determine if
any authorized signatory has a U.S. address.
4. For any change in existing information of Entities, Request for Account Maintenance (for Entities)
RAM-E will be used.
5. If the entity is a Financial Institution, it should provide its GIIN obtained for FATCA purposes.

However, this is not mandatory, since all FIs have not registered with IRS under FATCA.

Entities Exempt from FATCA Due Diligence Requirements

a) Federal Government, Provincial Government, District Government, Local Government /

Municipality etc.
b) Entities wholly owned or controlled by the Government.
c) Foreign Missions
d) Not for Profit / Non-Profit Organizations
e) Central Bank
f) Financial Institutions

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 g) International Organizations
h) Pension Funds established by the above listed types of entities

For detailed guidelines, refer Instruction Circular No. INST/215 dated December 29, 2014.

Common Reporting Standards (CRS) - Individuals and Sole Proprietorship

1. CRS Self-Certification Forms is obtained from customer duly complete and signed.
2. In the case of joint accounts, each joint account holder is required to provide a separate Self-
Certification Form for himself / herself.
3. The CRS Individual/ Proprietorship Tax Residency Self-Certification Form allow an account holder
to provide details of up to 3 tax residencies.
4. If an account holder does not have a TIN/NTN, and selects Reason B in Part 2 of the Self-
Certification Form for Individuals, he / she must state the reason as “I am not a tax filer”.
5. The information contained in the Self-Certification Form is input in CRS Web Portal only for
customers (Individuals / Proprietorships / Entities) having CRS indicia (i.e. customers related to
country (ies) other than Pakistan & or U.S.A).
6. Compliance Desk will review the contents of the hard copy of the CRS Tax Residency Self-
Certification form filled by the customer if the customer has acknowledged that he / she has a tax
residency in a country other than Pakistan.
7. After ensuring that all discrepancies are rectified (if any), Compliance Desk which will mark
“Reviewed and Approved” in the portal.
8. Mandate Holders are not required to provide a Self Certification Form.
9. For Minor accounts, the guardian is required to provide two Self Certification forms, one for
Himself / herself and the other on behalf of the minor.
10. Account Maintenance requests relating to CRS will be processed in the same manner as new
account opening.

For detailed guidelines, refer Instruction Circular No. 084 dated June 23, 2017

Common Reporting Standards (CRS) - Entities

1. The CRS Entity Tax Residency Self-Certification Form must be enclosed with Account Opening
Form duly filled-in and signed.
2. The Self-Certification Form for an Entity will be signed by the Entity’s Authorized Signatory /
Signatories.

On Self-Certification Form, if the Entity has identified itself as:

i. A Financial Institution that is an Investment Entity located in a Non-Participating Jurisdiction and

managed by another Financial Institution; or ii. A Passive Non-Financial Entity (NFE).

Then the name of the controlling persons together with their shareholding percentage is captured on this
form, and that the CRS Controlling Person Tax Residency Self-Certification Form has been obtained for
each Controlling Person with a shareholding.

3. A Controlling Person of an Entity is a natural person (an individual) who holds a controlling
ownership interest of 20% or more in the Entity.
4. If the Entity account holder is a Passive Non-Financial Entity (NFE), it must also provide the CRS
Tax Residency Self-Certification Form for its Controlling Persons.
5. If the entity is a Financial Institution, it should provide its G.I.I.N. obtained for FATCA purposes.
However, obtaining the G.I.I.N. is not mandatory, since all FIs have not registered with IRS under
6. Any entity (including but not restricted to Trusts, Societies, Associations or Clubs) that classifies
itself as an Active Non-Financial Entity (NFE) is not required to provide details of its Controlling
Persons.
7. Accounts of Trusts, Associations, Clubs, NGOs, etc will be treated as “Active NFEs”, since such
entities are established as Non-Profit Entities.

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In case of Change in Customers Circumstances which results in a change in the CRS status of the Account
Holder (Individual/Sole Proprietorship/Entity), Please refer Instruction Circular No. 024/2018.

For detailed guidelines, refer Instruction Circular No. 183, dated June 23, 2017.

B. In addition to Identity documents/ general/ common requirements mentioned in

Section-A Specific documents/information will be obtained as per the account types:

Individual/Personal Accounts

1. In case of a salaried person, in addition to Identity Document, an attested copy of his service card, or
any other acceptable evidence of service, including, but not limited to a certificate from the
employer will be obtained.
2. Business proof for Self-employed individuals. If a customer is unable to provide documentary
evidence in case of "Self-Employed" status except Agriculturist / Land Lords, and if the branch
manager knows this to be true, should confirm on the KYC Form that the person is self-employed.
3. Branch Manager’s visit report for physical verification and existence of business/ self-employed
professionals.
4. In case of student, copy of valid student proof has been obtained.
5. In case of agricultural/ Landlord, source of wealth/income to be obtained by retaining copies of
documents, which may include but not limited to Passbook of landholding records etc.
6. In case of housewife obtain a self-declaration for source and beneficial ownership of funds; obtain
details of funds provider(s), if any, along with customer’s profile; also verify the identity of funds
provider(s)/ Beneficial Owners, if other than account holder.
7. If expected monthly turnover exceeds the threshold of Rs.10.000m for self-employed/professionals
and Rs.25.000M for sole proprietor, separate account in the name of the business concern to be
opened.
8. For Unemployed Individual, the following due diligence should be performed by the Branch:
 Obtain and Verify source of Income and purpose of account opening.
 Expected transactions should commensurate with provided source of income.
 Details of Funds provider, if other than account holder, should be obtained and verified.
 Provided address and other details on Account Opening Form/ KYC should correlate with stated
occupation and not be linked with business/ commercial activities.

Beside above, level and type of transactions should match with stated occupation.

9. Single Aasan Account is allowed on one CNIC across the Bank in Conventional and Islamic
Banking

Minor / Young Saver Account

1. Attested copy of birth certificate/CRC/ Form-B/ SNIC of minor/Student ID Card.

2. Dully attested copy of Identity Documents of Guardian.
3. Notation stamp “Account will be operated by the Guardian till the minor attains Majority” is affixed
on AOF.
4. Evidence of guardian profession and relationship with Minor is established on AOF.
5. In case guardian is not natural guardian “Guardianship Certificate” issued by Court of Law should
be obtained duly vetted by the Legal Division.
6. “Care - Minor Account” is marked on AOF/S.S. Card.
7. In case guardian is illiterate person all requirements of photo account to be completed.
8. Proper CDD carried out at the time of opening the Accounts.(Ref.: INST/076 - May 22, 2015)
9. FATCA requirements will also be checked separately for Minor.
10. Only one account of one minor with one guardian, subject to the satisfactory customer due diligence
(CDD) of the guardian can be opened. Prescribed undertaking to be obtained from Guardian in this
regard.
11. Undertaking to be obtained from guardian for maintaining single account with a Minor and
submission of FORM-B or Birth Certificate (CRC) issued by relevant Government Authority
12. If guardian is Public Figure, or if the minor/guardian is related to a Public Figure, the Branch
Manager should refer to Zonal Office & Compliance Desk before opening the account.

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AL Habib Asaan Account

1. Asaan Account can be opened by individuals only (either singly or jointly).

2. Asaan Account is meant for resident individuals having Pakistani nationality only and not for non-
resident or foreign national (in any case).
3. Asaan Account is available in local currency (PKR) only.
4. No Introducer requirement on Asaan Accounts, except for illiterate, visually impaired/ blind
persons.
5. One CNIC holder can open only one Asaan Account (either single or joint) and cannot
simultaneously maintain a Basic Banking Account or any other regular account.

AL Habib Asaan Remittance Account

1. All new to bank customers or AL Habib Asaan Account Holders can open AL Habib Asaan
Remittance Account.
2. Existing customers including joint account holders who are already having regular accounts, cannot
open AL Habib Asaan Remittance Account.
3. Politically exposed persons (PEPs) and entities are not eligible to open AL Habib Asaan Remittance
Account
4. In case of joint AL Habib Asaan Remittance Account, any one of the joint account holders having
non-resident status / foreign national is not eligible to open AL Habib Asaan Remittance Account.
5. In case of joint AL Habib Asaan Remittance Account, any one of the joint account holders who are
already maintaining their existing basic banking account would only be eligible to open AL Habib
Asaan Remittance Account after closing of their existing basic banking accounts.
6. In case of joint AL Habib Asaan Remittance Account, any one of the joint account holders who are
already maintaining their existing Asaan Account would only be eligible to open AL Habib Asaan
Remittance Account after closing of their existing basic banking accounts.
7. Identity document of Remitter is obtained.
8. Remitter name and identity number is checked from List of Debarred Person and FIU watch list.

Pensioner’s Account

1. Account to be opened as individual (single and no mandate for operation will be accepted).
2. Indemnity bond will be obtained on applicable value of stamp paper as per prescribed format as
stipulated in Instruction Circular No. 089 dated July 05, 2012.
3. Photocopy of Option form duly signed by the pensioner is submitted to CPU Instruction Circular #
202 of 2014. The Pensioner will submit a Life/ survival certificate on prescribed format duly attested
by the gazette officer.
4. In case of widow/widower, unmarried daughter or sister, a Non-marriage certificate on prescribed
format to be submitted by the pensioner in addition of Life/ survival certificate.
5. The existing Pensioners whose PPOs were issued and who opt for payment of pension by direct
credit in their bank account shall provide Option form for direct credit of pension specifically
mentioned bank name, branch of the bank, branch code, full title of the bank account i.e. specific for
the pension and account number to which pension is to be credited direct by the Account Office.

Pardah Observing Woman Account

1. Account of literate Pardah Observing Women is to be opened whose signature is not shaky subject
to introduction from a well-respected and reputed customer of the bank. The account of Pardah
observing Woman is also to be opened jointly with a literate person who will operate the account or
she has executed Power of Attorney to open and operate the account.

Incase CNIC does not contain a photograph, branch should obtain:-

 A duly attested copy of driving license, service card, nikah nama, birth certificate, educational
degree/certificate, pension book, insurance certificate.
 A photograph duly attested by gazetted officer/Nazim/Administrator/bank officer.
 A copy of CNIC without photograph duly attested by the same person who attested the photograph

18
 2. Account of Pardah Observing Woman who cannot read and write shall not be opened

Photo Account of Literate customers with Shaky Signatures/ Thumb impression

1. In case of thumb impressions both LTI /and RTI to be affixed on AOF & SS Card
2. Latest passport size photograph to be obtained and pasted on AOF & SS card duly Admitted by
account opening officer/ manager.
3. Stamp “thumb impression/Signature affixed in presence of banks. authorized official” to be affixed
on AOF, SS Card
4. Indemnity on stamped paper of Rs. 50/ as per Instruction Circular no.148/2015 to be obtained.
5. If customer having shaky signatures, (Form DEP-30/3 to be obtained as per INST/ 071 dated August
29, 2007) on stamp paper for applicable value as per provincial stamp act.
6. The „photo account holders .are also not permitted to give mandate to anybody for operating their
account.

Visually impaired/ Blind Person Account

In addition to ID documents/ general/ common requirements mentioned in section# A. Guidelines for

providing Banking Services to Visually Impaired/ Blind Persons vide INST/ 074 - May 21, 2015 must be
referred and complied with.

Deaf and Dumb Persons

1. Branches shall not deny opening to account to any deaf & / or dumb person.
2. Clear option shall be provided to a deaf & / or dumb person for opening of an account either singly
or jointly with any other person.
3. There is no restriction on opening of a joint account by deaf & / or dumb person including with
person(s) who is / are also deaf & / or dumb. Further, witness should be physically fit and shall be
same for joint holders.
4. Documentation requirements shall be completed as per Account Opening Operations Manual.
5. All FATCA and KYC/CDD requirements will remain same.
6. In case the customer falls under the illiterate category or has shaky signatures, then he / she should
be asked to provide photos to be affixed on the AOF and Specimen Signature Card. Further, his / her
left & right thumb Impressions shall be taken on the AOF as well as on the Specimen Signature
Card.
7. Branches shall clearly mark the account of all such customer as “Literate Deaf & / or Dumb person
and illiterate Deaf & / or Dumb Person” on SS card and the same shall be marked on system.
8. Illiterate deaf & / or dumb person shall be authorized to open joint account will literate person(s). In
such case, Photograph / thumb impressions of literate person shall not be required rather his / her
signature shall be obtained.
9. Particulars of witness shall be mentioned on (Annexure A) “Witness Details”. An attested
photocopy of valid CNIC / SNIC of witness shall also be obtained and attached with Account
Opening Form.
10. Biometric / Verisys of witness’s CNIC shall also be performed.
11. Witness known to the concerned literate / illiterate deaf & / or dumb person shall make sure to make
the deaf & / or dumb person understand regarding Terms & Conditions governing the operation of
the account in the presence of Branch / Resident / operations Manager. Signatures shall be taken in
case of literate deaf & / or dumb person and Left & Right thumb impressions shall be taken in case
of illiterate deaf & / or dumb person on the acknowledgment (annexure B ) which shall be pasted
with AOF as permanent record. However, the same may not be required in case of Joint account
where one of the account holders if not deaf & / or dumb.
12. Deaf & / or dumb customer. If desires. Shall be allowed to appoint a person as Mandate Holder to
operate his / her bank account on providing duly witnessed (by the person know to deaf & / or dumb
person) undertaking (ANNEXURE_C) by him / her. In case of Joint Account Mandate Holder
should not be more than one. Further, appointment of Mandate holder should be approved through
Zones within 24 hours.

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Zamanat Account:

Customers are required to have/open joint CASA investor and beneficiary (Either or Survivor account
operation) or single CASA (Single account operation) in case of minor being a beneficiary. Furthermore,
following documents are required to be obtained from the customer;

1. Zamanat Application Form with Term & Conditions (specimen enclosed)

2. Insurance Proposal Form (specimen enclosed)
3. Guardianship Certificate (for court assigned guardians only)
4. Valid CNICs / SNICs of Account holders (in case of MINOR Account, obtain guardian ID). For
MINOR Account, B-Form/CRC/Student Card is required

Offsite Digital Account

The Offsite Account Opening is offered for Asaan Account only.

1. Bank authorized permanent representative visits customer premises with password protected
portable device/tablet and required forms / documents.
2. Brief customers regarding Account features.
3. Open "Biometric Verification" Module / link and request customer for Biometric verification for
regulatory compliance from NADRA using portable biometric device attached with tablet
4. Open "Offsite AOF information capturing" module on portable device. Fill account opening
customer information and KYC/CDD with the help of customer including preferred branch for
account opening.
5. Customer reviews all the information on screen
6. After confirmation, customer signature will be obtained on portable device and also on other
required documents (FATCA, CRS) for account opening.
7. A unique code number will be generated as an acknowledgement on submission/uploading of
form(s).
8. AOF copy with unique code number will be provided to customer through options e.g. print-out
using portable printer at customer premises, cheque book/Debit Card delivery.

Gateway to Equity Market (GEM)

All BAHL individual/ Joint (Either or Survivor) customers situated anywhere in Pakistan and across the
Globe, can open their GEM Trading Account by completing and submitting the following forms and
documents:

1. GEM Account Linked Request Form along with Terms & Conditions for opening and operating
GEM Trading Account

a) Photocopy of CNIC / SNIC

b) Signed Terms & Conditions for GEM
c) Zakat Exemption (if applicable)

2. Broker’s standard Account Opening Form (along with required documents) for opening a trading
account with the Broker.

a) Attested copies of CNIC / SNIC of the Account Holder and or Nominee(s) (if any)
b) Attested copies of CNIC / SNIC of the Joint Account Holder(s) and or Authorized person (if
any).
c) Attested copies of CNIC / SNIC of the Account Holder(s) in favor of the person authorized
to trade if other than account holder(s).
d) A list of Transaction fee, commission to be charged by the Broker and other CDC / NCCPL
charges to be levied.

3. CDC Sub-Account Opening Form for the GEM Trading Account, as approved by CDC (along with
required documents)

20
 a) Copies of CNIC / SNIC of the Account Holder and or Nominee(s) (if any)
b) Copies of CNIC / SNIC of the Joint Account Holder(s) and /or Authorized person (if any).

4. In case of Non-Residents, GEM Linked Account will be opened through SCRA as per the procedure
defined in Account Opening Procedure Manual.
5. After completing all the mandatory requirements and obtaining the documents from the customer(s),
officer shall handover the complete set of GEM Linked Account Opening Form to the Approver/
Manager for the final review and signatures on the form.
6. After the Manager/ Approver's signatures the officer shall scan 'first page and second page' of GEM
Linked Account Opening Form and email it to Equity Market Department.
7. All the relevant documents shall be couriered/ sent through rider to Equity Market Department in
Principal Office (PO) for further processing. A copy of GEM Linked Account opening form shall
also be sent to CPU by the branch for record purpose.

Sole Proprietorship account

1. The rubber stamp of the concern is affixed on AOF and SS Card.

2. Request to open account is obtained on letterhead for proprietorship.
3. Branch Manager’s visit report for physical verification and existence of business.
4. Registration certificate for registered concerns.
5. Sales tax registration or NTN, wherever applicable.
6. Certificate or proof of membership of trade bodies etc, wherever applicable.
7. In case where the documents mentioned above in serial no.4, 5 and 6 are not available with
customer, then a declaration regarding unavailability of the same will be obtained on letterhead.
8. In the absence of NTN Certificate Branch will obtain an undertaking (enclosed in circular INST/189
December 27, 2016) from the customer confirming that he/she will provide the NTN Certificate
within 90 Days.
9. For Trade related customers, relevant Trade KYC/ CDD form is obtained.
10. Customer signatures are held within the signature box provided on S.S. Card and also rubber stamps
are affixed within the same box (Ref: INST/052 dated April 8, 2015)

Government Accounts (Federal/ Provincial/ local/autonomous/ semi-autonomous bodies)

Government account shall be opened only on production of: -

1. Letter of authority (in original) or special resolution signed by concerned administrative department
with names of persons authorized to open and operate the account.
2. Letter of authority must be duly endorsed by the Ministry of Finance or Finance Department of the
concerned Government.
3. ID documents of persons authorized to open and operate the account.
4. Account is to be operated by an officer of the Federal/Provincial/Local Government in his/ her
official capacity.
5. No Government accounts shall be opened in the personal names of the government official(s).
6. Approval of Area Manager (INST Cir # 136 dated 12.09.09) to be obtained.
7. Account should be reviewed by Compliance Division.

In case of autonomous entities and Armed Forces including their allied offices

1. Special resolution/authority from the concerned administrative department or highest executive

committee/ management committee with names of persons authorized to open and operate the
account.
2. Authority must be countersigned/ endorsed by their respective unit of finance.
3. ID documents of persons authorized to open and operate the account.
4. The branches must also take into account any rules, regulations or procedures prescribed in the
governing laws of such entities relating to opening and maintaining of their bank accounts.
5. Approval of Area Manager (INST Cir # 136 dated 12.09.09) to be obtained.
6. For Trade related customers, relevant Trade KYC/ CDD form is obtained (Ref.: INST/124-2018).

21
Collection Account

For Utility bills Collection

a. Request letter to be obtained from competent authority.

b. Approval from Zonal Head to be obtained.
For CMU arrangement

Collection Accounts to be opened in accordance with arrangements by Cash Management Division

with the approval of Head of CMU and Group Head.

Partnership Account

1. Request letter to open account signed by all partners on letterhead of firm.

2. AOF to be signed by all the partners.
3. Attested copy of “Partnership Deed” duly signed by all partners of the firm. (Partnership Deed
should be executed on stamp papers of appropriate value according to respective provincial laws)
4. Copy of Partnership deed should be originally notarized.
5. Prescribed Letter of Partnership Dep-33 to be signed by all the partners, on firm’s letterhead in
Individual capacity. (on letterhead for Joint & Several liability of all partners in their personal
capacity).
6. Form Dep-65 duly filled & signed by all partners in personal capacity. Signature of authorized
signatories on lower portion with rubber stamp of firm. (The list of persons who are authorized to
operate the account)
7. Partnership Deed vetted by the Legal Division.
8. Attested copy of Registration Certificate issued by Registrar of Firms in case of registered firm. In
case the partnership is unregistered, this fact shall be clearly mentioned on the Account Opening
Form.
9. Authority letter from all partners, in original, authorizing the person(s) to operate firm’s account.
10. Firm’s name rubber stamp is affixed on AOF and SS Card.
11. For Trade related customers, relevant Trade KYC/ CDD form is obtained (Ref.: INST/124-2018).
NTN is also mandatory if customer is engaged in Foreign Trade activities.
12. Customer signatures are held within the signature box provided on S.S. Card and also rubber stamps
are affixed within the same box (Ref: INST/052 dated April 8, 2015).

NGO/ NPO/ Charities

1. Certified copy of Trust Deed/ Byelaws /Rules & Regulations (which ever applicable) should be
obtained.
2. Account opening request on their letterhead.
3. AOF and other documents should be reviewed and cleared by Compliance Division.
4. Trust Deed has been vetted by on Legal Department.
5. Approval from Zonal Head has been obtained
6. Account Opening Form has been signed by authorized persons as per Resolution.
7. Registration Certificate of the Society/Association/Trust has been obtained. Registered Instrument
of Trust or Trust deed shall also meet the requirement of Certificate of Registration and Certified
copy of Instrument of Trust or Trust deed.
8. DEP 64 is obtained for Resolution of Board of Trustee/Managing Committee as per prescribed
format.
9. Operating instructions of accounts have been obtained as per Trust Deed / Bylaws and the same has
been recorded on AOF / SS Card and Board Resolution.
10. Photocopy of identity document of the authorized person(s) and of the members of Governing
Body/Board of Trustees /Executive Committee, if it is ultimate governing body.
11. Prescribed AOF for Entities has been used for opening of such Accounts.
12. Any other documents as deemed necessary including its annual accounts/ financial statements or
disclosures in any form which may help to ascertain the detail of its activities, sources and usage of
funds to assess the risk profile of prospective customer. (INST/32/2012).

22
 13. An undertaking is obtained on the letterhead as per INST /119 dated August 6, 2018 duly signed by
all the authorized persons on behalf of the institution and should also be obtained when any changes
take place in the person(s) authorized to operate on the account
14. Customer signatures are held within the signature box provided on S.S. Card and also rubber stamps
are affixed within the same box (Ref: INST/052 dated April 8, 2015)

Trust/Association/Society/Club

1. Obtain Photocopy of identity document of the following:

a) Authorized person(s)
b) Members of Governing Body/Board of Trustees /Executive Committee, if it is ultimate
governing body
c) Settlor, the trustee(s), the protector (if any), the beneficiaries or class of beneficiaries

Certified copies of:

a) Certificate of Registration/Instrument of Trust
b) By-laws/Rules & Regulations

2. Names of all trustees/Members/Executive Committee should be mentioned on AOF

3. AOF and other documents should be reviewed and cleared by Compliance Division.
4. Document(s) have been vetted by Legal Department.
5. Approval from Zonal Head has been obtained to open Account
6. Account Opening Form has been signed by authorized persons as per Resolution.
7. Registration Certificate of the Society/Association/Trust has been obtained. Registered Instrument
of Trust or Trust deed shall also meet the requirement of Certificate of Registration and Certified
copy of Instrument of Trust or Trust deed.
8. Resolution of the Governing Body/Board of Trustees/Executive Committee, if it is ultimate
governing body, for opening of account authorizing the person(s) to operate the account is obtained
on prescribed format (DEP-64)
9. Any other documents as deemed necessary including its annual accounts/ financial statements or
disclosures in any form which may help to ascertain the detail of its activities, sources and usage of
funds to assess the risk profile of prospective customer. (INST/32/2012)
10. Operating instructions of accounts have been obtained as per Trust Deed / Bylaws and the same has
been recorded on AOF / SS Card and Board Resolution.
11. Prescribed AOF has been used for opening of Trust / Association /Society accounts.
12. In case of Masjid/ Madressah, Approval from Zonal Head as well as the Group Head is required.
13. An undertaking is obtained on the letterhead as per INST /119 dated August 6, 2018 duly signed by
all the authorized persons on behalf of the institution and should also be obtained when any changes
take place in the person(s) authorized to operate on the account.
14. Customer signatures are held within the signature box provided on S.S. Card and also rubber stamps
are affixed within the same box (Ref: INST/052 dated April 8, 2015)

Limited Company/Corporation Account

1. Certified copies of:

 Resolution of Board of Directors for opening of account specifying the person(s) authorized to open
and operate the account. (Not applicable for Single Member Company); Board Resolution to be
obtained on prescribed format DEP-64.
 Memorandum of Association, duly endorsed by SECP.
 Articles of Association (wherever applicable), duly endorsed by SECP.
 Certificate of Incorporation
 Form A or B (as applicable), duly endorsed by SECP.
 SECP registered declaration for commencement of business as required under Companies Act 2017;
and
 List of Directors to be filed under Companies Act 2017, as applicable, duly endorsing by SECP.
2. Operational instructions are mentioned on AOF and S.S Card.
3. Attested ID copies of all the directors and authorized persons have been obtained.

23
 4. Applicant.s signature on AOF is verified and „Authorized Persons/ Directors signatures are
admitted.
5. Copy of NTN Certificate has been obtained for record / identification purpose
6. For individual (natural person) shareholders holding 20% or above stake (10% or above in case of
EDD) in an entity. Identification and verification of such natural persons. Natural and Legal persons
having shareholding 20% and above their information is also updated in e-KYC Module
7. For legal person holding shares equal to 20% or above in an entity, identification and verification of
individual (natural person) shareholder holding shares equal to 20 % or above of that legal person.
8. Account should be approved by Area Office.
9. Identity documents of Directors of Limited Companies / Corporations is relaxed in case of
Government / Semi-Government entities only, where Banks should obtain photocopies of identity
documents of only those directors and persons who are authorized to open and operate the account.
However Bank/DFIs should validate identity information including CNIC numbers of other
directors from certified copies of 'Form-A/Form-B' and 'Form 29' and verify their particulars
through NADRA Verisys.
10. For Trade related customers, relevant Trade KYC/ CDD form is obtained (Ref.: INST/124-2018).
11. Customer signatures are held within the signature box provided on S.S. Card and also rubber stamps
are affixed within the same box (Ref: INST/052 dated April 8, 2015).

Accounts of Hajj and Umrah Group Organizers:

1. Beside necessary formalities as per AML/ CFT Regulations and complete satisfactory due diligence
as well as after obtaining all necessary documents from the concerned HGO, specific requirements
to be fulfilled for Hajj and Umrah Group Organizers opening accounts for Hajj and Umrah
Remittances.
2. Only PKR Account will be opened in the name of concerned Hajj or Umrah Organizer with suffix
“Hajj” “Umrah” for the purpose of Hajj/ Umrah related remittances to Saudi Arabia.
3. Only one bank account will be maintained for the purpose of effecting remittances to Saudi Arabia
and obtain undertaking from HGO that the similar account is not maintaining with any other branch
or other ADs for this purpose.
4. Details of intending pilgrims should be obtained from the concerned HGOs.
5. For detailed guidelines, refer FE Circular No. 012 dated July 13, 2016 and FE Circular No. 032
dated June 21, 2017.

Accounts of DHA or other similar authorities accounts

1. CNIC copies of all the members of Governing and Executive bodies of DHA or
2. Ask for delegation of power to administrator under Section (7) and (8) of the Pakistan Defence
Housing Authority Order 1980 and accept copy of CNIC of Administrator as well as authorized
signatories for the purpose of opening of account of DHA or similar other authorities subject to
compliance of other requirements.
3. Approval from Zonal Head.
4. Account should be approved by Compliance Division.
5. Customer signatures are held within the signature box provided on S.S. Card and also rubber stamps
are affixed within the same box (Ref: INST/052 dated April 8, 2015)

Branch Office, Liaison Office of Foreign Companies

1. A copy of permission letter from relevant authority i.e. Board of Investment. All the requirements
laid down in Permission letter should also be fulfilled.
2. Photocopies of valid passport of all the signatories of account.
3. List of Directors on Company letterhead or prescribed format under relevant laws/regulations.
4. A letter from Principal Office of the entity authorizing the person(s) to open and operate the
account.
5. Approval from Zonal Head and Compliance Division.
6. The condition of obtaining Board Resolution is not necessary for foreign Companies/entities
belonging to countries where said requirements are not enforced under their law/regulations.
However such foreign companies will have to furnish power of attorney from the competent
authority for opening of bank account to the satisfaction of the bank.

24
 7. Customer signatures are held within the signature box provided on S.S. Card and also rubber stamps
are affixed within the same box (Ref: INST/052 dated April 8, 2015)

Executor and Administrator

1. Attested photocopies of CNIC of Executor/Administrator.

2. Certified copy of Letter of Administration or Probate.
3. Legal vetting & Zonal Office approval has been obtained.
4. Account should be approved by Area Office and Compliance Division.

Customer signatures are held within the signature box provided on S.S. Card and also rubber stamps are
affixed within the same box (Ref: INST/052 dated April 8, 2015)

Agent’s Account

1. Certified copy of “Power of Attorney” or Agency Agreement.

2. Attested photocopy of CNIC of the agent and principal has been obtained.
3. Account should be approved by Area Office and Compliance Division.
4. Legal vetting of documents & Zonal Office approval has been obtained.

Customer signatures are held within the signature box provided on S.S. Card and also rubber stamps are
affixed within the same box (Ref: INST/052 dated April 8, 2015)

3.6 FREE LIFE INSURANCE SCHEME

The Bank offers a unique “Free Life insurance coverage” for PLS SB, MPP, APNA Current, Forex
Current & Asaan* Account holders, in case of death/disability of the customer. The insurance premium is
paid by the Bank.

The Insurance policy has been taken from Commercial Union Life Assurance Company (Pakistan) Limited
covering the following:

 Age Limit – 18 to 60 Years

 New accounts eligible after 90 days of opening of account.
 In case of joint account, any one of the account holders will be covered.
 Claims payable on the basis of 90 days of average balance in customer’s account.
 In case of natural death, payment is made equivalent to average balance in the account for the last 90
days immediately prior to death, subject to a maximum of Rs.1,000,000.
 In case of accidental death payment is made equivalent to double of the average balance in the account
for the last 90 days immediately prior to death, subject to a maximum of Rs.2,000,000.
 In case of permanent total disablement (Accidental) payment is made equivalent to average balance in
the account for the last 90 days immediately prior to occurrence of disability, subject to a maximum of
Rs.1,000,000. This covers the disability which is caused as a result of an accident that caused physical
injury leading to permanent disability as under:
 Loss of both hands or amputation above wrists
 Loss of a hand and a foot
 Double amputation of leg or thigh amputation through leg or thigh on one side and loss of other foot.
 Loss of sight to such an extent as to render the claimant unable to perform any work for which eye-sight
is essential.
 Very severe facial disfigurement
 Absolute deafness.

Note: Accounts of Companies / Societies, Non-Profit Organizations / Trusts / Educational Institutions

/ Hotels / Clubs / Provident & Gratuity Funds are not eligible.

*Maximum Rs.500,000 for Natural Death/Disability & Rs.1million for Accidental Death for Asaan Account.

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 3.7 CATEGORY OF DEPOSITS AND MAJOR RULES OF EACH

Type of Deposits Rate of Profit Major Rules

Current Deposits Nil  Opened mostly for business entities
(CD)  No profit is paid
Account Type 0081  No Zakat Deducted
 OD facility may be allowed after proper approval
 Becomes dormant if not operated for one year
 May be connected with T. Call A/C

AL Habib Apna Nil  No minimum balance

Current Account  Free Life Insurance
Account Type 0095  Free Pay Orders ( Three per calendar month)
With free life  Free Specially branded ATM Card
insurance cover  Free SMS Alerts (on transaction above Rs.25,000)
 Free online banking (for transactions in Apna A/C)
 Free e-statement
 Free internet banking.
 Single or Joint A/C of only Two persons.

AL Habib Current Nil  Free ATM Card / Debit Card & Free Cheque book.
Plus Account  Free Pay orders, Internet Banking & Online
A/c Type 0981 banking.
(INST/ 011/ 2010)  No more requirement to maintain Minimum
Balance during the whole month to avail free
services.

Basic Banking Nil  Minimum initial deposit Rs.1,000/-

Account (BBA)  Non- remunerative account (like CD accounts)
Account Type 0119  No minimum balance required.
 If the balance remains “ZERO” for six months such
Introduced as per account may be closed.
INST/013/2006.  No fee for maintaining the account (charges
By SBP via relating to other services mentioned in the Bank’s
(BPD/30/2005.) Schedule of Charges to be charged).
 Maximum two deposits transactions and two
withdrawals by cheque (cash or clearing) are
allowed free of charge.
 ATM withdrawals from the Bank’s ATMs are
allowed free of charge.
 Withdrawals from other banks on 1-Link or M-net
will attract usual charges.
 Statements of A/C to be sent only once in a year.

PLS Saving Bank 5.50% p.a.  Mostly opened by individuals for saving purpose.
Deposit (Profit is paid 6 monthly basis  Profit is paid at agreed rate on Average Monthly
With free life in January and July) Balances calculated on daily balance existing
insurance cover between the close of business on 1st & last day of
Account Type 0071 the month.
 Zakat is deducted if balance is as per ‘Nisab’ or
over if Declaration for non- deduction of Zakat
(CZ-50) is not filed.
 In the event of bank declaring loss the account
holder shall share the loss pro rata.
 A/C becomes dormant if not operated for one year.
 No Overdraft facility is allowed in these accounts.

26
Enhanced Saving 5.50% p.a.  Introduced vide Instruction Circular 091 dated
Accounts (ESA) (from 5000 to 20,000/- only) November 20, 2007.
Account Type 0075  Initials Deposit should be Rs.5000/= and above.
Above Rs.20,000/- Rate of  Existing PLS SB account may be converted on
Introduced as PLS-SB will Apply. Now customer’s request/maintenance ticket.
developed by PBA such limits are removed.  On AOF, stamp of “ENHANCED SAVINGS
to encourage small ACCOUNT (ESA) to be affixed.
depositors for  Profit to be credited to account on quarterly basis.
savings.  No charges on minimum balance in the account
 WHT to be deducted from profit as per rules.
 Zakat will be applicable as per rules.

 Profit to be paid on Average balance in MPP A/C

PLS Monthly Profit 5.50 % p.a. from 1st to the last day of the month.
Plan Profit is paid on monthly  In the event of bank declaring loss the account
Account Type: 0072 basis on 1st working day of holder shall share the loss pro rata
each month  Relevant rules of PLS SB Accounts will apply on
PLS MPP Accounts

AL Habib Senior 5.75% p.a.  Introduced as from March 29, 2007 vide Instruction
Citizen PLS Saving Expected rate of profit Circular 025 to facilitate banking needs of Senior
Account Citizens
Account Type: 0077  Free online banking facility
 No minimum deposit limit
 Safe Deposit Locker Facility
 90% Financing Facility allowed
 All other conditions pertaining to Saving Bank
 Account to be applied but not covered by Free Life
Insurance
 May be opened as Joint account but not with
minors.
 Senior citizen must be the primary account holder
whose name should appear first. However, In
case of death of primary account holder, profit
rate on the Joint Account will remain the same
(INST/064/2016).
Pensioner's Account. 5.75% p.a.  It must be opened as Individual (Single)
Expected rate of profit  Mandate to operate the account is not allowed.
Account Type:  Life Certificate is to be submitted at the time of
Current A/C - 0117 account opening.
Saving A/C - 0870  In case of widow, unmarried daughter(s), sister(s);
a non marriage certificate is required.
 Above mentioned certificates are to be submitted
twice a year on 10th March & 10th September.
 Account becomes dormant if pension amount is not
withdrawn consecutively for six months.
AL Habib Young 5.75% p.a. upto Rs.500,000/-  Account is basically meant for minors upto 18
Savers A/C 5.50% p.a. amount exceeding years of age.
Account Type: 0070 Rs. 500,000 (Instruction  Minimum initial deposit Rs.5/-.
Circular INST/ 005/2009)  Profit will be paid on six monthly basis.
 No restrictions on withdrawal.*
 It should be opened with guardian (undertaking
required as per INST/187/2015).
 All terms & conditions relating to minor account
shall apply.

27
  The Young Saver can withdraw only Rs.3000/- in a
calendar day (through ATM). No transfer allowed
 Specially design 20 leaves cheque book will be
issued.
 Free internet for Guardian.
 Free Online transactions.
 Debit block is applied before 3-months of attaining
age of majority of young saver. (INST/171/2020)

Monthly Saver 5.60 % p.a.  No Minimum Balance Required

Account (MSA)  Profit Payable Monthly
Account Type: 0078  Free Net Banking & Periodical E-Statement
 Zakat will be applicable as per rules.
 W.H.T to be deducted on Profit

Treasurer’s Call Rate of Profit- 5.50% p.a.

Account  Minimum threshold and all Profit Slabs pertaining
Account Type: 0118 Profit payable on daily to Treasurer’s Call Accounts has now been
product basis on 1st working eliminated. Henceforth, any T - Call customer will
day of each month receive a minimum return as prescribed by SBP
(on PLS SB accounts). Rates offered above this to
any customer, is subject to authorization by the
competent authority.
 Such profit shall be calculated on the aggregate
products of daily closing balance in the account
and credited to the customers account on the first
working day of the following month.
AL Habib Fixed One Month 5.50% p.a  Minimum period of acceptance funds in TDRs is
Term Deposits Three Months 5.50% p.a one month and Rates are offered from one month
Six Months 5.50% p.a to 05- years.
Account Type One Year 6.10% p.a  Profit is paid on maturity. But if TDRs issued is
0010 to 0031 Two Years 6.25%p.a more than one year then profit may be paid on
Three Years 6.50% p.a yearly basis.
Four Years 6.50% p.a  Renewal instructions to be given at the time of
Five Years 6.50% p.a issuance of TDRs which may be Renewal for
Principal amount only OR Renewal with profit.
(These are Rack-Rates)  No instructions. In this case profit will stop on
(Rates on Fixed Term maturity and TDR to be renewed automatically for
Deposits above same period for which the Deposit was originally
Rs. 20,000,000/= will be placed.
quoted by Zonal Office)  Deposit is subject to deduction of Zakat & 10%
W/H/Tax is recovered form profit.
 In case of premature encashment of TDRs, the
profit rate will be calculated as per the rate of
“Last Nearest Completed Tenure” plus profit on
the remaining number of days as per prevailing
saving account profit rate.
 No penalty will be charged for premature
encashment.

7 Days Notice 5.50% p.a.

Deposit (Profit is paid on expiry)
30 days Notice
Deposits
Account Type: 0096
& 0111

28
AL Habib Mahana Period Indicative A/C  Deposit Period 1, 2, 3, 4 & 5 years
Munafa Accounts Rate Type  Min Deposit Rs.25,000/- Inst.073 dt.28.8.2006
------------------------------------  Profit Payment frequency Monthly
Source Account 1 Year- 6.00% p.a 0057  Mode of payment of profit Credit to A/c
required to deposit 2 Years 6.25% p.a 0058  KYC for new Accounts Yes
amounts for 3 Years 6.50 %p.a 0059  Automatic Renewal Yes
placement. 4 Years 6.50 %p.a 0060  Zakat Applicable Yes
5 Years 6.50%p.a 0061
 (if “Exemption” is not claimed through CZ-50)

AL Habib Salana 6.10% p.a. one year fixed  Minimum deposit Rs.25,000/-
Munafa Certificate deposit  Period of deposit, 1 year
Account Type: 1201  Profit to be credit to base account of customer
 If customer premature encashment, profit will be
paid at the prevailing PLS Saving rate.
 KYC formalities for new customer
 Depositor should have a CD or PLS SB account
with issuing branch.
3-Years fixed Deposit
AL Habib Special 1st Year @6.00 p.a.  Minimum deposit Rs.25,000/-
Saver Certificates (1st & 2nd Profit Payment)  Period of deposit, 3 years
Type:0051  Profit payment frequency every 6 months
2nd Year @6.25 p.a.  Mode of payment of profit credit to account
(3rd & 4th Profit Payment)  KYC formalities for new customer
 Depositor must have Current or Savings account
3rd Year @6.50 p.a. with the issuing branch.
(5th & 6th Profit Payment)
AL Habib Asaan  Asaan Accounts can be opened with minimum Rs.
Account Rate of Profit on Saving 5/- only.
Account  No service charges at opening or closure of Asaan
Type 11.50 % p.a. Account.
Current: 0048  No condition for minimum balance in the account.
Saving : 0047  Free ATM/ Debit Card on Current Accounts, while
Savings Account will be charged as per SOC.
 Free life insurance to all Asaan Account customers.
 Free E-Statements and SMS Alerts.
 Cheque book will only be issued upon customer
request.
 No Minimum Balance
AL Habib FOREX NIL  Free Life Insurance
Current Account  Free SMS Alerts (On Transactions Equivalent to
Rs. 25,000 & Above)
Account Type:  Free Cheque Book
USD - 1138  Free Cash Handling
GBP - 1139  Free Collection of Outward Foreign Cheques
EUR - 1140  Free Remittances (Three Per Month)
 Free E-Statements / Internet Banking
 Upto 90% Financing in Pak Rupees
AL Habib Foreign Rate of Profit on Minimum  Profit Payable on Monthly Basis
Currency Saver Monthly Balance:  Free SMS Alerts (on Transactions Equivalent to
Account Below 5000.00 0.10% p.a.  Free Cheque Books
Account Type: 5,001 to 9999.99 0.25% p.a.  Free Cash Handling
USD - 0112 10,001 to 24,999 0.35% p.a.  Free Collection of Outward Foreign Cheques
EUR - 0114 25,001 to 99999 0.50% p.a.  Free Remittance (Two Per Month)
GBP - 0113 100,000 & Above 1.00% p.a.  Free E-statement / Internet Banking
as per INST/066/2020

29
  Upto 90% Financing in Pak Rupees
 All Other conditions of Savings Account Apply.

 Only Bank AL Habib (BAHL) customers can

Call Deposit NIL request for issuance of a CDR
Receipts  Only a single cross cheque (duly drawn on BAHL)
CDR shall be entertained against a customer’s single
request.
 CDR shall have a validity of 3 years and after
expiry of which it will be considered as stale
instrument. (INST/151/2015)
 All Stale CDRs shall be reviewed /revalidated from
the issuing branch, as in the case of DDs/ BCs.
 No request for issuance of CDR shall be entertained
against cash.
 Branches can issue CDR's at their own level
(INST/027/2016).
 CDR shall only be paid at the issuing branch,
through clearing.

The above rates are as per INST/182/2020 and INST/194/2020.

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3.8 (A) AL HABIB ASAAN ACCOUNT

BPRD Circular No. 11 of 2015 Dated: June 22, 2015

Guidelines on Low Risk Bank Accounts with Simplified Due Diligence - Asaan Account

In order to enhance the financial inclusion in Pakistan, SBP has formulated a National Financial Inclusion
Strategy (NFIS) wherein a target of 50% growth in bank accounts by adult population by the year 2020 has
been set out.

To facilitate the banking industry to achieve the aforesaid objective, SBP has decided to simplify account
opening requirements/procedures and introduce a new account category namely “Asaan Account” for low
risk customers.

On desire of Asaan Account holder to avail financial services higher than the specified transaction limits, the
Asaan Account may be converted to regular account subject to completion of Customer Due Diligence as
per ‘AML/CFT Regulations’ and ‘Guidelines on Risk Based Approach’.

To achieve the targets set out in NFIS, banks are required to submit quarterly reports to SBP within seven
days of close of each quarter.

Salient features of ALHabib Asaan Account;

 Asaan Account can be opened by individuals only (either singly or jointly).

 Asaan Account is meant only for resident individuals having Pakistani nationality.
 Asaan Accounts can be opened with minimum Rs. 5/- only.
 Asaan Account shall be opened in type "Current" or "Savings" in PKR only.
 Account type "0047" for Saving Account & "0048" for Current Account.
 No service charges at opening or closure of Asaan Account.
 No condition for minimum balance in the account.
 Free ATM/ Debit Card on Current Accounts, while Savings Account will be charged as per SOC.
 Asaan Account Opening with simplified due diligence and categorized as Low-Risk Bank Account.
 Free life insurance to all Asaan Account customers as per Terms & Conditions of regular CASA
Accounts.
 Free E-Statements and SMS Alerts to all Asaan Account customers.
 Cheque book will only be issued upon customer request.
 Other Value added services including Internet Banking, Mobile Banking etc. will be offered as per
request from customer.
 No Introduction is required for Asaan Accounts, except for illiterate, visually impaired/ blind
persons.
 Asaan Account may be opened for a Minor with guardian.

Control Mechanism;

1. One CNIC holder can open only one Asaan Account (either single or joint) and cannot
simultaneously maintain a Basic Banking Account or any other regular account
2. Initial minimum deposit of Rs. 5/- to be received only at the branch/ sub branch counters.
3. Cross border outward remittances are not allowed. However, in case of Card-based accounts having
international acceptance, the banks may allow international transactions subject to applicable limits.
4. Transaction Limits / Turnover
Total Debit/Withdrawals per Month are restricted to Rs. 500,000/-
Credit Balance Limit restriction is Rs. 500,000/-

Two new account types have been introduced in AL Habib Banking System specifically catering Asaan
Account types i.e. "0047" for Saving Account & "0048" for Current Account.

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3.8 (B) ASAAN REMITTANCE ACCOUNT

Introduction:

With the view to promote use of bank account by Home Remittance recipients (beneficiaries), SBP has
decided vide its BPRD Circular Letter # 32 dated December 06, 2017 that banks may open 'Asaan
Remittance account' of prospective beneficiaries of home remittance on the pattern of Asaan Account
introduced by SBP vide BPRD Circular # 11 dated June 22, 2015.The new product “Asaan Remittance
Account” will facilitate opening of account by low risk customers to receive home remittance through
proper accounts of resorting to traditional cash over the counter transactions. The category is being
introduced in compliance with SBP instructions and guidelines.

Salient Features of AL Habib Asaan Remittance Account

1. AL Habib Asaan Remittance Account will only be open in PKR.

2. The account can be in current/saving category or any other remunerative category of checking
account.
3. For AL Habib Asaan Remittance Saving Account, Rate of profit is 11.50% p.a. (INST/139/2019)
4. Account will be opened without any deposit i.e Zero balance. However, there shall be no minimum
balance requirement for Account. Furthermore, no service charges will be levied at the time of
opening and closing of the account.
5. Cash withdrawal limit will be Rs.50,000/day; an additional fund transfer limit will be Rs.50,000/day.
6. At any time the customer's maximum credit balance in AL Habib Asaan Remittance Account should
not breach the total limit of Rs.2,000,000/-
7. AL Habib Asaan Remittance Account can only be opened by individual (Single or Jointly).
8. No cross border outward remittances are allowed remittance is allowed. However, in case of card-
based accounts having international acceptance, the same may be allowed. However, international
transaction will be subject to applicable limits.
9. This account shall be fed through Home remittance from abroad only and no local credit shall be
allowed in the account. Further, no commercial remittance shall be deposited in the account.
10. Other Value added services i.e. SMS alerts, Internet &Mobile banking and any other available
service will be provided on customer's request.
11. Credit transaction beyond total credit balance limit of Rs. 2,000,000/- in case of outward remittance
in AL Habib Asaan Remittance Account will be returned to the remitter immediately without any
delay, while the reason for returning remittance will also be communicated to remitter.

Eligibility Criteria

1. All new to bank customers/AL Habib Asaan Account Holders can open AL Habib Asaan Remittance
Account.
2. Existing Customers, already having regular accounts, cannot open AL Habib Asaan Remittance
Account.
3. Political Exposed Persons (PEPs) are not eligible to open AL Habib Asaan Remittance Account.
4. Non-Resident Pakistanis are not allowed to open AL Habib Asaan Remittance Account.
5. In case of joint AL Habib Asaan Remittance Account, any one of the joint account holder who are
already maintaining their existing basic banking account would only be eligible to open AL Habib
Asaan Remittance Account after closing their existing basic banking accounts.
6. In case of joint AL Habib Asaan Remittance Account, any one of the joint account holder who are
already maintaining their existing Asaan account would be eligible to open AL Habib Asaan
Remittance Account without closing Asaan Account.
7. In case of joint AL Habib Asaan Remittance Account, any one of the joint account holder having
Non- resident status/foreign national status will not be eligible to open AL Habib Asaan Remittance
Account. In such cases, designated branch staff should guide non-resident or foreign national to
open regular account instead of AL Habib Asaan Remittance Account.

Documents Requirement for Asaan Remittance Account

Fill simplified one pager English &Urdu AOF.

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3.9 PENSIONER ACCOUNT
(Instructions Circular INST/020/2009, INST/087/2009 & INST/171/2010)

Supreme Court of Pakistan ordered to disburse pensions through branches of all scheduled banks. For that
purpose, a task force was formed with representations from banks, pension giving agencies & SBP. So,
banks are required to

 Cooperate with the pensioners whenever they approach for account opening.
 Accounts are to be exempted from levy of service charges.
 Ensure that the pension amount is transferred to the pensioner’s account in a timely manner.
 Provide adequate seating arrangements and clean drinking water to all senior citizens.
 The pensioners should be treated with respect and dignity.
 Violation of above mentioned instructions will attract penalty under the BCO-1962.

Account Opening Procedure And Maintenance

 Select account type for Current A/C 0117 and for Saving A/C 0870.
 The account must be opened as Individual (Single) and third party mandate is not allowed.
 An indemnity bond is to be obtained, for aggregate amount equivalent to Six month’s pension.
 Photocopy of Indemnity Bond must be sent to Area Office for their approval.
 Life Certificate is to be submitted at the time of A/C opening.
 In case of widow, unmarried daughter or sister, a Non-Marriage Certificate is also required.
 After fast opening of A/C, branch shall send all documents to CPU for further processing.
 Photocopies of AOF and other documents will be retained in a separate file by the branch.
 Life certificate and/or Non-Marriage certificate must be submitted every six months, in person or
through representative. Non-submission of the same must be informed to respective Government’s
Accounts Office for further action at their end and treat the account as dormant.
 For re-activation, the required certificate must be submitted in person* by the A/C holder.
 Account is marked as dormant if pension amount is not withdrawn consecutively for 6-months.
 Un-drawn pension amount for 6-month or more shall be debited and a payment order/Demand draft
favouring the pension issuing authority is to be dispatched on same day after routing the amount through
Sundry Creditors Account-Pension Refund.
 The branch will provide account statement to respective Government’s Accounts Office/Treasury on
demand.
 The branch shall send a statement on monthly basis to the respective Government’s Accounts
Office/Treasury showing the pension credited into pensions account-date wise.
 Branch & Government’s Accounts Office shall carry out reconciliation on quarterly basis. Such
statements must be kept as a permanent record. Any discrepancy must be resolved within six weeks.
 As INST/003/2011, obtain “Life Certificate” twice a year on 10th March and 10th September respectively
apart from obtaining the same at the time of A/C Opening. Similarly Non-Marriage Certificate (where
Applicable) is to be obtained with same frequency and on same dates.
 As per INST/207/2014, Cheque Book is issued free of charges to Pensioner’s Accounts.

*Federal Treasury Rule-343: A pensioner of any description, who produces a life certificate signed by
some person exercising the power of Magistrate under the criminal procedure code, or by any registrar or
sub-registrar appointed under registration act.1908, or by any pensioned officer who, before retirement, held
a Gazetted appointment or exercised the power of Magistrate or any Gazetted officer, or by Munsif, or by
member of the central or Provincial Legislature Assemblies, or by Manager of the Bank in cases where the
agent is a Scheduled bank and the pensioner is the resident of Pakistan, is exempted from Personal
Appearance.

33
3.10 AL HABIB ZAMANAT ACCOUNT

The new product is designed for customers as a savings tool that will facilitate in Saving and Depositing
amount at pre-agreed intervals/installments to reach his/her goal. AL Habib Zamanat Account is a non-
checking recurring deposit account linked with a regular joint CASA. It is also offered with a lump-sum
payment option.

Salient Features of AL Habib Zamanat Account

 Product offered to existing & new individual customers
 Non-checking recurring term deposit linked to a regular joint CASA (Joint account opened by
investor with beneficiary, who may be the insured investor’s spouse or any other close blood
relative) and in case where beneficiary is MINOR, single CASA will be opened with investor being
the guardian
 Account type is ‘0110’
 Free of cost investor’s insurance i.e. insurance premium will be borne by the bank
 Guaranteed accumulated profit based on bank’s minimum PLS Savings rate
 Multiple deposit options available i.e. Installments (Monthly, Quarterly, Bi-Annually or Annually)
or Single (Lump-sum)
 Coverage value for investor who has opted for lump-sum / single payment option would be double
of the coverage amount in case of investor’s death before the maturity (Payout will be deposit
amount times three)
 Multiple plans per customer are allowed subject to cumulative underwriting limit of PKR 20 mln
 Non-Medical limit up to PKR 5 mln regardless of age. Where sum assured exceeds PKR 5 mln,
investor is required to undergo medical examination as per the arrangements with Insurance
Company
 Minimum tenure of plan should be One Year and maximum is restricted upto 20 years
 Customers will be given a grace period of Ninety (90) days in which complete overdue payment
should be settled. However, customer will be allowed multiple grace periods through the course of
the tenure
 Uninterrupted protection throughout the plan with no hidden charges on encashment
 Simplified premature encashment option without any penalty
 Fixed installment amounts not changeable during the course of plan tenure
 Value added ADC services e.g. SMS alerts for installment due & paid
 Insurance policy is underwritten by EFU Life Assurance
 This product is offered in Pak Rupees only

Eligibility Criteria
 This product is not offered to Foreign nationals & non-residents account holders. However, dual
nationals having NICOP and Pakistani residents are eligible subject to insurance company’s
approval
 Business entities cannot avail this product
 Minor and disabled person cannot avail this product as per the arrangement with Insurance Company
i.e. he/she cannot be the plan owner / investor. However, investor may nominate them as beneficiary
 Investors between ages 18 and 60 years will be eligible. However, investors once enrolled will
remain covered till investor’s 65th birthday or until completion of the plan, whichever is earlier
 Minimum annual plan amount should not be less than PKR 24,000 (Monthly PKR 2,000)

Documents Requirement for Zamanat Account

 Customers are required to have/open joint CASA investor and beneficiary (Either or Survivor
account operation) or single CASA (Single account operation) in case of minor being a beneficiary.
Furthermore, following documents are required to be obtained from the customer;
 Zamanat Application Form with Term & Conditions.
 Insurance Proposal Form.
 Guardianship Certificate (for court assigned guardians only)
 Valid CNICs / SNICs of Account holders (in case of MINOR Account, obtain guardian ID). For
MINOR Account, B-Form/CRC/Student Card is required.

34
3.11 VISUALLY IMPAIRED /BLIND PERSON’S ACCOUNT
As per Instructions Circular INST/ 074 /2015

Branches are required to render services to visually impaired/blind person without any discrimination.
All possible risks involved in the usage of any product/services are to be clearly explained to them.

While filling a form, deposit slip or a cheque, the staff must read out the questions/ fields in the presence of
witness who is personally known to the customer, if so desired.

Opening of account:

1) Clear option shall be provided to a visually impaired/blind person for opening of an account either
singly or jointly with any other person.
2) There is no restriction on opening of a joint account by visually Impaired / blind person including
with person(s) who is /are also visually impaired/blind. Further, witness shall be same for joint
account holders.
3) In case the customer falls under the illiterate category or has shaky signatures, then he/she should be
asked to provide photos to be affixed on the AOF and Specimen Signature Card. Further, his/her
Left & Right thumb impressions shall be taken on the AOF as well as on the Specimen Signature
Card.
4) Particulars of witness shall be mentioned on (ANNEXURE-A) "Witness Details". An attested
photocopy of valid CNIC/SNIC of witness shall also be obtained and attached with Account
Opening Form.
5) Signatures of literate visually impaired/blind person and Left & Right thumb impressions of
illiterate visually impaired/blind person on the Acknowledgement (ANNEXURE-B) which shall be
pasted with AOF as permanent record. However, the same may not be required in case of Joint
account where one of the account holders is not visually impaired/blind.
6) Visually impaired/blind customer, if desires, shall be allowed to appoint a person as Power of
Attorney or Mandate Holder to operate his / her bank account after obtaining undertaking
(ANNEXURE-C).

Operations of Account (For Literate visually impaired/blind persons)

 Literate visually impaired/blind person shall operate the bank account personally in the presence of a
witness. On the basis of an indemnity (ANNEXURE-D) provided.
 Branch shall adopt the same procedure for use of cheque as is being used for other customers. Also
honor the cheques issued in favor of third party(ies), if otherwise found in order;
 Allow over the counter cash payments in the presence of B.M.
 Allow online transactions (both debit and credit) in the account. This fact shall be recorded on SS
card as "Online Transactions Allowed".
 Allow the ATM/Debit Card facility to literate visually impaired/blind persons.

Operations of Account (For Illiterate visually impaired/blind persons)

Illiterate visually impaired/blind person shall operate the bank account personally in the presence of a
witness.

In case of Single Account of illiterate visually impaired/blind person:

a) Special instructions "Personal Presence Required for Withdrawals" shall be marked on SS Card
b) ATM/ Debit Card shall not to be issued

For Encashment of a cheque, the customer must visit the branch personally along with a witness whose
details are provided to the bank as per Annexure A, produce his / her cheque book and affix his / her thumb
impressions on the cheque in presence of his/her witness and the Branch/Resident Manager or Operation
Manager, who shall verbally verify the amount of cheque with the said visually impaired/ blind person.
Online Transactions (Cash Payment/Funds Transfer) are NOT allowed in the accounts for such customers.

Note: Branches are advised to contact their respective main branch (in Karachi, Lahore, Islamabad
and Peshawar)for Braille scripted Account Opening Form, if required.

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3.12 PRIVATE FOREIGN CURRENCY ACCOUNTS

Authorised Dealers may, without prior approval of the State Bank, open with them foreign currency
accounts of the following: -

 Pakistan Nationals resident in or outside Pakistan, including those having a dual nationality.
 All foreign nationals, whether residing abroad or in Pakistan.
 Joint Account in the names of residents and non-residents.
 All diplomatic missions accredited to Pakistan, and their Diplomatic Officers.
 All International Organizations in Pakistan.
 Firms and companies established/incorporated and functioning in Pakistan
 Charitable Trusts, Foundations etc. which are exempted from income tax.
 Branches of foreign firms and companies in Pakistan.
Opening of FCY accounts is subject to the condition that these are not fed with:

 Any foreign exchange borrowed under any general or specific permission given by the State Bank,
unless otherwise permitted.
 Any payment for goods exported from Pakistan
 Proceeds of securities issued or sold to non-residents
 Any payment received for services rendered in or from Pakistan
 Earnings or profits of the overseas offices or branches of Pakistani firms and companies including
banks,
 Investment of resident Pakistanis abroad
 Any foreign exchange purchased from an Authorised Dealer in Pakistan for any purpose.
 Funds generated from the Kerb market for deposit in accounts of Corporate Bodies/Legal entities

Foreign currency accounts can be fed by

 Remittances received from abroad,

 Travellers cheques issued outside Pakistan (whether in the name of account holder or in the name
of any other person),
 Foreign currency notes and foreign exchange generated by encashment of securities issued by the
Government of Pakistan.
 A foreign currency account of a citizen of Pakistan resident in Pakistan can also be fed with
cash foreign currency only if the account holder is a filer as defined in Income Tax Ordinance,
2001.
These accounts are free from all Foreign Exchange restrictions. In other words, account holders have full
freedom to operate on their accounts to the extent of the balance available in the accounts either for local
payments in Rupees or for remittance to any country and for any purpose or for withdrawals in the shape of
foreign currency notes and travellers cheques.

However, personal foreign currency accounts of any nature should not be used for commercial and business
purposes. Further, in case of any deposit of foreign currency notes of more than USD 10,000 (or equivalent
in other currencies) in a single day, the account holder shall be required to present the original receipt of
acquisition. The Authorized Dealer shall keep on record the copy of such receipt.

Accounts can be maintained and payments (excluding local payments) made in any currency of choice of the
account holder i.e. FCY is inter-convertible.

However, the facility is not available to airlines and shipping companies operating in/through Pakistan or
collecting passage and freight in Pakistan and the investment banks, leasing companies and modaraba
companies including those which have been granted licences to deal in foreign exchange.

Authorized Dealers may open foreign currency accounts and extend trade loans under FE-25 Scheme in US
Dollar (USD), Pound Sterling (GBP), Euro (EUR), Japanese Yen (JPY), Canadian Dollar (CAD), UAE
Dirham (AED), Saudi Riyal (SAR), Chinese Yuan (CNY), Swiss Franc (CHF) and Turkish Lira (TRY).

36
3.13 NON-RESIDENT RUPEE ACCOUNTS

Accounts of individuals, firms or companies resident outside Pakistan are designated as non-resident
accounts. A person shall be treated as non-resident if his/her period of stay in Pakistan during a calendar
year is less than 183 days, in aggregate. SBP sets out the regulations governing non-resident rupee accounts
opened and maintained by the following individuals and entities other than banks:

a) Overseas Pakistanis.
b) Foreign nationals except those who have obtained work visa/permit to work in Pakistan.
c) Firms, companies, etc. which are incorporated/registered outside Pakistan.

Opening and Maintaining of Non-resident Rupee Accounts.

Banks may open and maintain the following two categories of non-resident rupee accounts of the individuals
and entities.

a) Non-resident Rupee Account-Repatriable (NRAR).

b) Non-resident Rupee Account-Non-repatriable (NRAN).

 These accounts may be opened by the banks without prior approval of the State Bank. The overseas
branch, representative office or banking subsidiary of a bank may also collect all documents related
to account opening and forward these documents to the head office/designated branch of the bank in
Pakistan for further processing.

 Banks shall distinctively mark these accounts in their books and maintain them in a separate ledger.
Existing resident PKR accounts of Pakistanis and foreign nationals can be converted into non-
resident rupee account – non-repatriable upon confirmation of their status as non-resident.

 Existing accounts of individuals and entities, as mentioned in Para 1 above, shall be treated as Non-
resident Rupee Accounts- Non-repatriable.

Accounts of United Nations and its Organizations.

The accounts of United Nations and its organizations are free from financial controls, therefore, treat such
accounts as "Resident Accounts".

Joint Accounts of Residents and Non-residents.

There is no bar on non-resident foreign nationals/ non-resident Pakistanis on opening and maintaining non-
resident rupee accounts-repatriable/non-repatriable jointly with residents. These accounts should, however,
be treated as non-resident accounts irrespective of the fact whether the accounts are to be operated
individually or jointly.

Operations on Non-resident Rupee Accounts –Repatriable.

All operations of non-resident rupee accounts-repatriable shall be governed by the regulations set out below:

General Instructions.

 An initial deposit up to Rs. 5,000/- may be made in the account from domestic sources, if required.
 Bank may issue cheque book, ATM/Debit card to the account holder. Further, supplementary
ATM/Debit cards may also be issued in the name of family members of the account holder resident
in Pakistan.
 Banks may allow operations of these accounts through digital banking which may include
internet/mobile banking, etc.

37
Credits to the Non-resident Rupee Accounts - Repatriable

These accounts can be fed with

 Remittances received from abroad through banking channel.

 Funds approved/allowed for remittance abroad either by State Bank or by the Bank.
 Transfer of funds from other non-resident rupee account-repatriable with the same Bank in Pakistan.
 Profit/interest accrued on the amount lying in the non-resident rupee account- repatriable.
 Proceeds of Government of Pakistan’s debt securities, term deposits and profit/interest on such
securities/certificates.
 Refund of amounts debited incorrectly or over-charged.

Debits to the Non-resident Rupee Accounts - Repatriable

Non-resident rupee accounts- repatriable can be debited for the following purposes:

 Any payment in PKR to the persons resident in Pakistan including utility bill payments, education
fee, hospital, insurance premium, hotel bills, travel agent’s payments etc. through any permissible
mode.
 Settlement of import bills by non-resident importer against goods/services exported from Pakistan.
 Transfer of funds to other resident, non-resident rupee accounts- non-repatriable with any bank in
Pakistan.
 Transfer of funds to other non-resident rupee accounts- repatriable with the same Bank in Pakistan.
 Remittances and payments outside Pakistan to the extent of balances available in the account.
 Investments in Governments of Pakistan’s debt securities (T-bills, PIBs, Sukuk and any other
registered debt security), term deposit/remunerative account with the same bank.
 Debits in lieu of applicable government taxes/duties etc. bank charges and reversal of any
incorrect/wrong credit entry.

Operations on Non-resident Rupee Accounts –Non-repatriable.

All operations of non-resident rupee accounts- non-repatriable shall be governed by the regulations set out
below:

 bank may issue cheque book, ATM/Debit card to the account holder. Further, supplementary
ATM/Debit cards may also be issued in the name of family members of the account holder resident
in Pakistan.
 Funds available in these accounts shall be treated as non-repatriable and can only be used for
making payments/withdrawals etc. in Pakistan only.
 banks may allow all legitimate debit and credit transactions in these accounts as are permissible to a
resident PKR accounts. However, the funds available in these accounts cannot be used abroad
through ATM/Debit cards or other Alternative Delivery Channels.
 f) Banks may allow operations of these accounts through digital banking which may include
internet/mobile banking, etc.

Submission of Statements/Returns to State Bank.

Banks are required to submit a consolidated monthly statement showing debit and credit transactions
executed from these accounts through their head/principle office by 7th of the ensuing month for each
reference month to Statistics & Data Warehouse Department of the State Bank on the Annexure-I &
Annexure-II.

Further, Banks are required to ensure proper reporting of the transactions conducted from these accounts in
their monthly foreign exchange returns through ITRS and maintain complete record including underlying
documents for SBP inspection.

38
3.14 KNOW YOUR CUSTOMER / CUSTOMER DUE DILIGENCE POLICY
(Approved by the Board of Directors: November 26, 2007)
(Last Amendment/Review Date: January 30, 2020)

1. Background
The bank has an obligation to know who it is doing business with. This is necessary to ensure that the bank’s
facilities are not used by dishonest persons for illegal purposes, such as Money Laundering and Terrorist
Financing. Basic elements of “Know Your Customer / Customer Due Diligence” are:

a- Establishing and verifying the identity of the customer, mandate holders, directors, authorized signatories,
trustees, beneficial owners and checking their names from “List of Debarred Persons” before opening their
accounts. If there is 100% positive match, banking relationship must not be established.
b- Seeking information about the purpose of account, customer’s business, profession, and source of funds.
c- Obtaining proper introduction to ascertain the customer’s suitability to open and operate an account.
d- Monitoring customer’s AC/transactions to identify any unusual / out of pattern or suspicious activity.

2. Customer Acceptance Criteria:

Bank will not open account and will close an existing account the true identity of the customer and/or the
nature of business is not established.

3. Account Opening

a- Bank-customer relationship commences when an account is opened. The account opening should be done
only by the Branch Manager or by officers nominated by the Branch Manager.
b- Establish the identity of customers by obtaining minimum set of documents listed in Annexure 1.
c- Proper introduction should be obtained to assess the customer’s suitability to open/ operate the account.
d- Customer’s address should be verified by sending a letter of thanks & keep the acknowledgment.
c- The customer’s business or profession should be clearly described in AOF.
f- If the customer gives a mandate to a third party, the mandate form should be signed by both parties.
g- Government accounts should not be opened in the personal names of the Government Official(s).
h- No anonymous or fictitious/ benami or numbered accounts will be opened and maintained.
i- If CDD of an existing customer is found unsatisfactory, the relationship should be treated as High Risk
and reporting of suspicious transaction to FMU may be considered.
j- Customer Due Diligence will be conducted at the following stages:

 while establishing a banking relationship

 while dealing with occasional customers / walk-in customers.
 when the bank feels it is necessary to obtain additional information from the existing customers.
 When bank has doubts about the veracity or adequacy of previously obtained customer identification
data.
 when request is received to activate dormant / inoperative / unclaimed account.

4. Beneficial Owners, Nominees, and Minors

Account opening officer should ascertain the beneficial owners who ultimately own or control the customer
account. Minors’ accounts should not be used by the guardian for their own advantage.

5. Hold-Mail Accounts
Hold-mail accounts should be opened very selectively if the Branch Manager is satisfied as to the reason for
holding mail after obtaining a hold mail indemnity.

6. Non-Resident Accounts
These accounts should be marked on AOF as Non-Resident Accounts and will be rated as “High Risk”.

7. Enhanced Due Diligence

Following types of customers should be included in “High Risk” category and EDD will be conducted:

a- Customers belonging to or having links with off-shore tax havens.

b- Customers in cash-based businesses in high-value items, such as gold, jewellery, antique etc.
c- Politically Exposed Persons (PEPs), their close relatives, & associated entities.

39
e- The customers who have been refused banking facilities by other banks and financial institutions;
f- NGOs/NPOs, clubs, societies, associations and trusts/charities;
g- Hold Mail Accounts;
h- Housewife accounts ( if expected gross monthly credits exceed Rs. 500,000);
i- Landlords and self-employed individuals (if expected gross monthly credits exceed Rs.1,000,000);
j- Proprietorships (if expected gross monthly credits exceed Rs. 2,500,000);
Subject to the above, accounts of Housewives, Proprietorships, Self-employed individuals/professionals and
Landlords should be given minimum risk rating of "Medium”.
Accounts of NGOs, NPOs Charities, Trusts, Societies, Associations, PEPs, and Correspondent Banks, will
be approved by Senior Management of the bank ( Group Heads, General Managers or Zonal Heads, as
appropriate), Whereas, other high risk accounts will be jointly approved by Branch Manager and Operations
Manager.
It is not the bank’s policy to open accounts on-line without face-to-face contact; therefore, no such accounts
should be opened.

8. Dormant Accounts
“Dormant or in-operative account” means “the account in which no transaction has taken place for one
year”. The customer has to visit the branch with valid original identification documents and a written request
to activate the account.
9. Correspondent Bank Accounts
Correspondent relationships should be treated as “High Risk” requiring EDD and approval of Senior
Management. No correspondent banking arrangement is established with a "Shell Bank".

10. Occasional / Walk-In Customers

It is not the bank’s policy to offer the banking services to occasional/walk-in customers, except where
mandated by law or regulation (e.g., accepting share subscription applications or encashment of cheques
drawn on the bank, making payment of Home Remittances, issuing POs/DDs to students for making
payments to educational institutions, etc.).

11. Joint Accounts

In case of joint account, KYC/CDD of all joint account holders shall be conducted separately and it will be
approved as per risk rating of these customers.
12. Risk Assessment of customers
All customers will be rated High, Medium, or Low as required by SBP.
13. Review of Accounts
All accounts and transactions should be reviewed / monitored on an on-going basis by the Mgr-Operations
as first line of defence, whereas independent ongoing monitoring through automated transaction monitoring
system will be done by AML/CFT Unit of Compliance Division.
In addition to the on-going review of accounts/transactions, as above, a six-monthly review of accounts
should be conducted under the supervision of Branch Managers, who should send a confirmation to
Compliance Division as at the end of March and September of each year that the review exercise has been
completed in their branches.

14. Responsibility for Implementation

a- Operations Managers will ensure compliance with KYC/CDD requirements in their respective branches.
b- IT Division will further improve and refine the existing MIS to assist the branches in identifying any
unusual or suspicious transactions.
c- Training & Management Development Division will arrange periodical training course for relevant staff
members to train them in KYC/CDD requirements and to update their knowledge on this subject as per
regulatory requirements.
15. Record Keeping
The records of identification data obtained through CDD process shall be maintained for a minimum period
of ten years after the business relationship is ended. However, records where transactions, customers or

40
accounts involve litigation or are required by the court or other competent authority will be retained for
longer period.

16. Review and Amendments

The Board of Directors will review this policy at least once every year and approve such amendments as
may be considered necessary.

41
3.15 (AML/CFT/CPF) REGULATIONS

The world financial system has been under strict surveillance of international bodies like Financial Action
Task Force ( FATF) Paris, France and office of the Foreign Assets Control ( OFAC) USA for the last so
many years.
The bank, therefore, have to be vigilant during the course of their local and international transactions.
Pakistan experienced some fundamental changes in its financial system in 1990’s. The regulations regarding
public’s right to own and keep foreign exchange were relaxed and licenses to ten new banks were issued.
Therefore in order to put in place a prudent regulatory frame works, Prudential Regulations were
promulgated in 1992.

AML Measures in Prudential Regulations

In addition to having effective safety rules for lending to various business sectors of our country, Prudential
Regulations also contained the regulations M1 to M5 that catered to the Anti Money Laundering needs of
financial institutions. There emerged the concepts of Know Your Customer ( KYC) and Customer Due
Diligence ( CDD).

SBP AML/CFT Regulations (R1 to R6)

In 2012 a new regime of AML/CFT was introduced vide SBP BPRD Circular 02 dated September 13, 2012
and the existing regulations M1 to M5 were replaced by AML/CFT Regulations R1 to R6 which took effect
from 31st Oct 2012. (Latest updation December 30, 2019).
SBP’s AML/ CFT/ CPF REGULATIONS (1 – 15)
For State Bank of Pakistan’s Regulated Entities (SBP-REs) (Updated up to September 30, 2020).

State Bank of Pakistan (SBP) has issued the Anti-Money Laundering, Combating the Financing of Terrorism
& Countering Proliferation Financing (AML/ CFT / CPF) Regulations for SBP’s Regulated Entities (REs)
under powers conferred to it under Section 6A (2) of the Anti-Money Laundering Act, 2010.

Accordingly, any violation of the aforesaid AML/ CFT/ CPF Regulations shall attract penal as well as
administrative actions under the applicable laws/rules/regulations, including the AML/ CFT Sanctions
Rules, 2020.

Regulation–01: Risk Based Approach to AML/ CFT

Regulation–02: Customer Due Diligence (CDD)
Regulation–03: Reliance on Third Party Financial Institutions for CDD Measures
Regulation–04: Targeted Financial Sanctions under UNSC Act, 1948 and ATA, 1997
Regulation–05: Politically Exposed Persons (PEPs)
Regulation–06: NGO/ NPO/ Charity/ Trust Accounts
Regulation–07: Reporting of Transactions (STRs/ CTRs)
Regulation–08: Record Keeping
Regulation–09: Correspondent Banking
Regulation–10: Money Value Transfer Services (MVTS) / Exchange Companies
Regulation–11: Wire Transfer/ Fund Transfer
Regulation–12: New Technologies
Regulation–13: Internal Controls
Regulation–14: Counter Measures For High Risk Jurisdictions
Regulation–15: Regulation and Supervision
Annexure II: List of Information Required For Customer Identity
Annexure II: Minimum Documents to be Obtained for Identification of Customer/ Occasional Customer

42
Regulation – 1: Risk Based Approach to AML/ CFT

In order to document the identified ML/ TF/ PF risks, SBP REs shall ensure an entity level Internal Risk
Assessment Report (IRAR). IRAR shall cover ML/ TF/ PF risks including Transnational TF risks and other
emerging risks to and from SBP REs. IRAR shall identify, assess, and understand ML/ TF/ PF risks at entity
level for customers, products, services, delivery channels, technologies, and their different categories of
employees etc.

IRAR shall take into account results of National Risk Assessment (NRA) shared with SBP REs, major
international/ domestic financial crimes and terrorism incidents that have probability of posing ML/ TF/ PF
risks to the entity itself, to other SBP REs and to the Pakistan’s financial sector. Further, feedback from
SBP, FMU, LEAs, and other related stakeholders should be taken into account while conducting Internal
Risk Assessment.

The IRAR shall be used for evaluating residual ML/ TF/ PF risks about which SBP REs have to take
decisions i.e. on-boarding of customers, allowing execution of financial transactions, provision of financial
service, launching of product, use of technology, and initiating business and operation in particular
geographical location, etc.

SBP REs shall ensure that IRAR is a dynamic and up-to-date document, by periodically updating their IRAR
when circumstances change or relevant new threats emerge. Further, in case the NRA is updated at national
level, SBP REs shall ensure updating their IRAR in light of the updated NRA.

The ultimate responsibility of ensuring effective AML/ CFT/ CPF controls lies on BoD. Therefore, BoD
shall ensure adequate, reliable, periodic management information system, from senior management, for
ensuring effective oversight, monitoring and accountability.

Regulation – 2: Customer Due Diligence (CDD)

SBP REs shall, at minimum, conduct CDD of their customers/ occasional customers in circumstances and
matters set out in section 7A (1) of the Act (AML ACT 2010 updated upto 30-09-2020).

Quote

AML ACT Section 7A (1). Conducting CDD.

Every reporting entity shall conduct CDD in the manner as may be prescribed and in accordance with
provisions of this Act in the following matters, namely:-

a) entering into a business relationship;

b) conducting an occasional transaction above the prescribed threshold;
c) where there is a suspicion of money laundering or terrorist financing; or
d) where there are doubts about the veracity or adequacy of previously obtained data.

(2) Every reporting entity shall—

a) identify the customer and verify the customer’s identity on the basis of documents, data or
information obtained from reliable and independent sources;
b) identify the beneficial owner and take reasonable measures to verify the beneficial owner’s identity
on the basis of documents, data or information obtained from reliable sources and be satisfied that it
knows who the beneficial owner is;
c) understand and, as appropriate, obtain information on the purpose and intended nature of the
business relationship; and
d) monitor the business relationship on an ongoing basis.

43
AML ACT Section 7D. Inability to complete CDD and tipping off.

(1) Where a reporting entity is unable to complete CDD requirements, it—

a) shall not open the account, commence business relations or perform the transaction; or shall
terminate the business relationship if any ; and
b) shall promptly consider filing a Suspicious Transaction Report in relation to the customer.

(2) Where a reporting entity forms a suspicion of money laundering or terrorist financing, and reasonably
believes that performing the CDD process will tip-off the customer, the reporting entity shall not pursue the
CDD process and shall file a STR. Unquote

For identification of customer/ occasional customer, at the minimum, SBP REs shall obtain information
mentioned in Annexure-I.

For purposes of verification of identity of the customer/ occasional customer, at the minimum, SBP REs
shall obtain the documents mentioned in Annexure-II.

Where the customer/ occasional customer is represented by an authorized agent or representative, SBP REs
shall:

 Identify every person who acts on behalf of the customer/ occasional customer,
 Verify the identity of that person using reliable and independent documents, data or information as
set out in Annexure-I and Annexure-II; and

For customers that are legal persons or legal arrangements, SBP REs shall identify the customer and verify
its identity by obtaining the following information in addition to the information required in Annexure-I and
Annexure-II:

 Name, legal form and proof of existence;

 The powers that regulate and bind the legal person or arrangement, as well as the names of the
relevant persons having a senior management position in the legal person or arrangement; and
 The address of the registered office and, if different, a principal place of business.

For customers that are legal persons, SBP REs shall identify and take reasonable measures to verify the
identity of beneficial owners:

 By identifying the natural person(s) who has ultimate effective control of a customer (as defined
under relevant laws) on a legal person; and
 To the extent that there is doubt under (a) as to whether the person(s) with the controlling ownership
interest is the beneficial owner(s) or where no natural person exerts control through ownership
interests, the identity of the natural person(s) (if any) exercising control of the legal person or
arrangement through other means; and
 Where no natural person is identified under (a) or (b) above, the identity of the relevant natural
person who holds the position of senior managing official.

For customers that are legal arrangements, SBP REs shall identify and take following reasonable measures
to verify the identity of beneficial owners:

 For trusts, the identity of the settlor, the trustee(s), the protector (if any), the beneficiaries or class of
beneficiaries, and any other natural person exercising ultimate effective control over the trust
(including through a chain of control/ ownership as ascertained during CDD/ EDD;
 For other types of legal arrangements, the identity of persons in equivalent or similar positions.
 Where any of the persons specified in (a) or (b) is a legal person or arrangement, the identity of the
beneficial owner of that legal person or arrangement shall be identified.

In case of an account/ relationship of an entity with abbreviated name or title, SBP REs shall satisfy
themselves that the subject name/ title is in accordance with the constituent documents of the entity.

44
Account/ relationship shall not be allowed in abbreviated name in cases where entity has its complete non-
abbreviated name in their constituent document.

SBP REs shall apply EDD in the following circumstances, including but not limited to:

 Business relationships and transactions with natural and legal persons when the risks are higher.
 Business relationships and transactions with natural and legal persons from countries mentioned in
Counter Measures for High Risk Jurisdictions Rules, 2020.
 PEPs and their close associates and family members.

In line with their functions and powers prescribed under relevant law, SBP REs may apply EDD measures
which may include but not be limited to one or more of the following measures:

 Obtaining additional information on the customer (e.g. occupation, volume of assets, information
available through public databases, internet, etc.), and updating more regularly the identification
data of customer and beneficial ownership.
 Obtaining additional information on the intended nature of the business relationship/ transactions.
 Obtaining information on the source of funds or source of wealth of the customer.
 Obtaining additional information on the reasons for intended or performed transactions and purpose
of transaction.
 Taking reasonable measures to establish the source of funds and wealth involved in the transaction
or business relationship to be satisfied that they do not constitute the proceeds from/ for crime.
 Obtaining the approval of senior management to commence or continue the business relationship or
execute the high-risk financial transaction by SBP REs.
 Where applicable, conducting enhanced monitoring of the business relationship by reviewing its
nature and frequency of controls applied and selecting patterns of transactions that need further
examination.
 Where available, requiring the first payment to be deposited through an account in the customer’s
name with a bank subject to similar CDD standards.

SBP REs may apply following measures for ongoing monitoring of business relationship:
 SBP REs shall ensure update of Customer Risk Profiling (CRP) of their new and existing customers
on ongoing basis.
 SBP REs shall ensure update of CDD of their existing customer on periodical basis. The adequacy
of information obtained in respect of customers and beneficial owners shall be reviewed periodically
and it shall be ensured that the information is kept up to date, particularly for higher risk categories
of customers. In this regard, SBP REs shall develop a policy with regard to frequency and procedure
of CDD updating in line with CRP.
 If customer’s profile is revised, the underlying reasons for the revision shall be documented and
customer(s) may be contacted for provision of revised/ updated information/ document etc., if
necessary.
 All business relations with customers shall be monitored on an ongoing basis to ensure that the
transactions are consistent with the SBP REs knowledge of the customer, its business and risk
profile and where appropriate, the sources of funds.
 SBP REs shall obtain information and examine, as far as possible the background and purpose of all
complex, unusually large transactions, and all unusual patterns of transactions, which have no
apparent economic or visible lawful purpose. The background and purpose of these transactions
shall be inquired and findings shall be documented with a view to making this information available
to the relevant competent authorities when required.

SBP REs shall block accounts without valid Identity Document (after serving one-month prior notice) for all
debit transactions/ withdrawals, irrespective of mode of payment, until the subject regulatory requirement is
fulfilled. However, debit block from the accounts shall be removed upon submission of valid identity
document and verification of the same.

45
Dormant accounts

SBP REs may apply following measures for activation of dormant account:
 For customers whose accounts are dormant or in-operative, REs may allow credit entries without
changing at their own, the dormancy status of such accounts. Debit transactions/ withdrawals shall
not be allowed until the account is activated on the request of the account holder.
 It may be noted that transactions e.g. debits under the recovery of loans and markup etc. any
permissible bank charges, government duties or levies and instruction issued under any law or from
the court will not be subject to debit or withdrawal restriction.
 REs may use the NADRA Verisys and a formal request (through postal address or email address or
registered mobile number or landline number) for activation of dormant account by customers. They
should retain the NADRA Verisys for record keeping requirements (digitally or hard copy).
 Prohibition of personal accounts for business purposes

REs shall not allow personal accounts to be used for business purposes except proprietorships, small
businesses and professions where constituent documents are not available and the REs are satisfied with
KYC profile of the account holder, purpose of relationship and expected turnover of the account keeping in
view financial status & nature of business of that customer.

Government accounts shall not be opened in the personal names of the Government official(s). Under the
existing statutory and legal framework, no Government Ministry, Division, Department/ Attached
Departments and Subordinate Offices can operate its bank accounts other than the principal account of the
Federal/ Provincial Government residing at the SBP. The list of all such entities falling in the above
mentioned categories is available at the Finance Division’s website.

SBP REs shall open and maintain accounts of autonomous bodies, incorporated under an act of Parliament
or the Companies Act 2017, after obtaining the necessary approval/ resolution from their respective board/
governing bodies.

SBP REs shall open and maintain accounts of autonomous bodies, constituted through a cabinet resolution/
notification of Federal or a Provincial Government, after obtaining a No Objection Certificate (NOC) issued
by the Finance Division or relevant finance departments of the province, as the case may be.
Asset Side/ Trade Finance Customers

SBP REs shall also undertake CDD measures of asset side/ trade finance customers as prescribed in these
Regulations and ensure monitoring of such customers with regard to ML/ TF/ PF risks.

Regulation – 3: Reliance on Third Party Financial Institutions for CDD Measures

SBP REs (except ECs/ ECs-B) are allowed to rely on third party financial institutions for CDD measures.
However, the ultimate responsibility for CDD measures shall remain with Res.

SBP REs shall satisfy themselves that the third party financial institution is regulated, supervised or
monitored for, and has measures in place for compliance with CDD, record-keeping, data security and
privacy requirements as prescribed in these Regulations and other instructions issued by SBP from time to
time.

Regulation – 4: Targeted Financial Sanctions Under UNSC Act, 1948 And Ata, 1997

SBP REs shall undertake TFS obligations under the UNSC Act and ATA, with regard to:
 DPs or PPs
 Entities owned or controlled, directly or indirectly, by them; or
 Individuals and entities acting on their behalf, or at their direction.

SBP REs shall ensure that no funds or other financial assets, economic resources, or financial services, are
made available, directly or indirectly, wholly or jointly, for the benefit of such individuals or entities unless
authorized or otherwise notified in accordance with relevant provisions of the laws.

46
SBP REs shall ensure mechanisms, processes and procedures for real-time screening of customers/
occasional customers.

If any relationship is found with existing or potential customer or occasional customer, SBP REs shall take
the following actions, as applicable:

 Freeze, without delay and without prior notice, the funds or other assets of the identified relationship
and Report any assets frozen or actions taken in compliance with the prohibition requirements,
including attempted transactions or account opening requests, to the FMU and to SBP ( within 48
hours of freezing).

SBP REs shall unfreeze the frozen funds or other assets of individuals and entities:
 Which have been removed from the list of DPs or PPs.
 Who are inadvertently affected by a freezing mechanism (i.e. a false positive), upon verification.

SBP REs shall permit deposits (credits) in frozen accounts without changing status of the accounts.
However, no charges shall be deducted from frozen accounts unless specifically allowed and no frozen
account shall be treated as unclaimed deposit for surrendering to SBP.

SBP REs shall allow withdrawals (debits) from frozen accounts for which specific exemption has been
granted under the relevant provisions of ATA or the UNSC (Freezing and Seizure) Order, 2019.

Regulation – 5: Politically Exposed Persons (PEPs)

Obtain approval from the senior management to establish or continue business relations or want to execute
financial transaction where the customer or a beneficial owner is a PEP or subsequently becomes a PEP, a
close associate or family member of PEP.

Conduct enhanced ongoing monitoring of business relations with the customer or beneficial owner identified
as PEP, close associate and family member of PEP.

Regulation – 6: NGO/ NPO/ Charity/ Trust Accounts

SBP REs shall conduct EDD (including obtaining senior management approval) while establishing
relationship/ execution of financial transaction with NGOs/ NPOs, Charities and Trusts, when the risks are
higher, to ensure that these accounts are used for legitimate purposes and the transactions are commensurate
with the stated objectives and purposes.

In case of advertisements through newspapers or any other medium, especially when bank account number/
permanent customer relationship number is mentioned for donations, SBP REs will ensure that the title of
the customer relationship / account is the same as that of the entity soliciting donations. In case of any
difference, immediate caution shall be marked on such accounts/ customer relationship numbers and the
matter shall be considered for filing STR.

Personal accounts/ customer relationships shall not be allowed to be used for charity purposes/ collection of
donations.

The aforementioned provisions are not applicable for ECs/ ECs-B.

Regulation – 7: Reporting of Transactions (STRs/ CTRs)

SBP REs shall file STRs and CTRs with FMU as required under Section 7 of the Act.

Regulation – 8: Record Keeping

SBP REs shall ensure record keeping, digitally or in hard form for CDD purpose, for a period of ten years.

Where transactions, customers or instruments are involved in litigation or where relevant records are
required by a court of law or other competent authority, SBP REs shall retain such records until the litigation

47
is resolved or until the court of law or competent authority indicates that the records no longer need to be
retained.

Regulation – 9: Correspondent Banking

SBP REs shall assess the suitability of the respondent bank and gather adequate information about the
respondent bank and reputation, as far as practicable.

Obtain approval of senior management, before establishing new correspondent banking relationship; and
SBP REs shall not enter into or continue correspondent banking relations with a shell bank.

Regulation – 10: Money Value Transfer Service (MB) / Exchange Companies

Under Section 3, 3A and 3 AA of FERA, SBP issues authorization/ license to deal in foreign exchange
including foreign currency, foreign currency notes, transfers, coins, postal notes, money orders, bank drafts,
and traveler’s cheques. Chapter-2 of the Exchange Companies Manual elaborates the licensing criteria/
requirements for ECs/ ECs-B. Unauthorized foreign exchange business including unauthorized money
transfers/ payments (illegal MVTS) is a punishable offense under FERA and the Act.

SBP REs providing the money transfer services shall run awareness campaigns against illegal MVTS
business and discourage public from using illegal MVTS (Hundi/ Hawala).

Regulation – 11: Wire Transfers/ Fund Transfers

Responsibility of the Ordering Institution

SBP REs as ordering institutions (whether domestic or cross-border wire transfer) shall Identify and verify
the originator (if it has not already done under Regulation-2); and obtain details of beneficial owner(s) of
funds; and Record adequate details of the wire transfer.

SBP REs shall include the following information in the message or payment instruction which shall
accompany or remain with the wire transfer throughout the payment chain:
 Name of the originator;
 Originator’s account number or unique reference number which permits traceability of the
transaction;
 Originator’s applicable identity document number;
 Name of the beneficiary; and
 Beneficiary’s applicable identity document number.

Responsibility of the Beneficiary Institution

Beneficiary institution shall verify the identity of the beneficiary, if the identity has not been previously
verified, and record this information, as per relevant record keeping requirements.

Regulation – 12: New Technologies

SBP REs shall identify and assess the ML/ TF/ PF risks that may arise in relation to the development of new
products, services and business practices.

Further, wherever required, SBP REs shall use mitigation measures in digital channels against identity theft
such as live picture or video, electronic/ digital signature, two-factor authentication through email and
registered on name mobile number, and biometric verification of customers.

All SBP REs shall implement automated Transaction Monitoring Systems (TMS) capable of producing
meaningful alerts based on pre-defined parameters/ thresholds and customer profile, for analysis and
possible reporting of suspicious transactions.

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Regulation – 13: Internal Controls

SBP REs shall ensure that compliance officers have timely access to all customer records and other relevant
information, which they may require to discharge their functions, as well as any other persons appointed to
assist the compliance officer.

SBP REs shall:

 Include compliance with AML/ CFT/ CPF related responsibilities in Key Performance Indicators
(KPIs) of responsible staff down the line, in order to strengthen the compliance of AML/ CFT/ CPF
function. Moreover, ML/ TF/ PF risks shall be included in KPIs of officer(s) responsible for
Enterprise Risk Management and Operational Risk Management functions.
 SBP REs shall not assign conflicting roles to their employees. Appropriate strategies may be devised
to ensure provision of safe and smooth financial services to the customers.
 SBP REs shall assess working strength of the compliance function and all its sub-divisions on
annual basis and deficiency if any observed, shall be addressed on priority basis.
 Employees of SBP REs shall be strictly prohibited from disclosing the fact to the customer or any
other quarter that an STR or related information is being or has been reported to FMU, except if
required by law. This shall be made part of Code of Ethics to be signed by employees and Directors
of the SBP REs at the time of inductions.
Audit

SBP REs shall maintain an independent audit function in line with the Code of Corporate Governance that is
adequately resourced.

Foreign Branches and Subsidiaries

SBP REs shall pay particular attention to their branches and subsidiaries located in countries, which do not
or insufficiently comply with FATF Recommendations.

Employee Due Diligence

SBP REs shall develop and implement appropriate screening procedures to ensure high standards and
integrity at the time of hiring all employees, whether contractual or permanent or hired through outsourcing.

SBP REs comply with SBP’s Fitness and Proprietary Test (F&PT) Criterion required for sponsor
shareholders & board approval and senior management appointment.

Training

SBP REs shall chalk out and implement suitable Annual Training Program, which is developed after Formal
Training Need Assessment in area of AML/ CFT/ CPF annually. The Annual Training Program shall ensure
training sessions for Sponsor Shareholders, BoD, Senior Management, Line Management, and Field Staff.
Special emphasis shall be given for officials directly/ indirectly responsible for ensuring Governance/
Oversight/ Supervision/ Monitoring of risk mitigation of ML/ TF/ PF risk and ensuring AML/ CFT/ CPF
preventive measures as per the Act and these Regulations including on TFS for TF & PF and STR/ CTR as
per their required need and relevance of job.

SBP REs shall test the capability and knowledge of the relevant staff on periodic basis.

Regulation – 14: Counter Measures for High Risk Jurisdictions

SBP REs shall comply with the obligations imposed in the Counter Measures for High Risk Jurisdictions
Rules, 2020.

Regulation – 15: Regulation and Supervision

SBP REs shall ensure that any person(s) linked to any criminal activities or affiliated with any terrorist
organizations shall not become part of SBP REs.

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 ANNEXURE-I
LIST OF INFORMATION REQUIRED FOR CUSTOMER IDENTITY

A. Basic Identification Information

1. Full name as per identity document
2. Mother Maiden name
3. Date of Birth
4. Place of Birth
5. Permanent Address
6. Identity document number, whichever applicable
7. Date of expiry of applicable identity document

B. Other basic information

8. Father/ spouse name as per identity document
9. Date of issuance of applicable identity document
10. Contact Number: Mobile Number (s)/ Land Line Number
11. Purpose of account/ transaction/ business relation
12. Beneficial ownership/ controlling rights

C. Other relevant Information for natural persons, as applicable

13. Current/ Mailing Address
14. Personal Email Address (as applicable)
15. Nationality – Resident/ Non-Resident Status
16. FATCA/ CRS Declaration, wherever required
17. Profession/ Source of Income/ Funds: Salary, Business, investment income
18. Next of Kin
19. Attested Passport Size Photo (in case of Photo Account instructions)
20. Live Photo (in case of digital onboarding)

D. Information for Legal Persons/ Legal Arrangements

1. Registration/ incorporation number or business registration number (as applicable)
2. Date of incorporation or registration of legal person or arrangement (as applicable)
3. Place of incorporation or registration of legal person or arrangement (as applicable)
4. National Tax Number (NTN)
5. Nature of business, geographies involved and expected type of counter-parties (as applicable)
6. Registered or business address
7. Intended nature of business relations
8. Purpose of account or transaction (where accounts are not maintained and transactions are done by
walk in/ occasional customers)
9. Type of account/ financial transaction/ financial service
10. Expected monthly credit turnover (amount and No. of transactions)
11. Normal or expected modes of transactions/ delivery channels
12. Wherever instructed/ advised, regulatory limits imposed such as: credit and debits/ deposit and
withdrawals/ execution of financial transaction/ types of financial services allowed/ restricted.

E. Additional Information in case of “Trusts”

13. Whether the Trust is a Public Trust or Private Trust including foreign and national trust
14. Trust Deed whereby the Trust has been created;
15. Details of Settlor (this will also be available in the Trust Deed);
16. Objects of the trust (this will also be available in the Trust Deed);
17. Trustee of the trust (whether trustee is associated person of the settlor);
18. Description of each class or type of beneficiary (this information may also be checked from Trust
Deed);
19. Details of any possibility of influence of any other person on trustee regarding management and
control of trust property;
20. In the case of “Private Trust” if the beneficiary of a trust is also the beneficial owner of the trust,
identification and verification of the beneficiary is required otherwise the name and CNIC of each
beneficiary of a trust should be obtained.

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 ANNEXURE-II
MINIMUM DOCUMENTS TO BE OBTAINED FOR
IDENTIFICATION OF CUSTOMER/ OCCASIONAL CUSTOMER

Sr. No Type of Customers Document/Papers to be obtained

01 Individuals 1. Copy of the applicable valid identity document
(including Walk in/
Occasional customers)
02 Joint Account 1. Copy of the applicable valid identity document for each joint
account holder
2. In the case of joint accounts, CDD measures on all of the joint
account holders shall be performed as if each of them is
individual customers of the SBP RE.

03 Sole Proprietorship 1. Copy of the applicable valid identity document;

2. Any one of the following documents:

a. Registration certificate for registered concerns

b. Sales tax registration or NTN certificate, wherever applicable
c. Certificate or proof of membership of trade bodies etc.,
wherever applicable
d. Declaration of sole proprietorship on business letterhead
e. Account opening requisition on business letterhead

04 Small businesses and 1. Copy of the applicable valid identity document of the account
professions including holder/s
freelance 2. Any one of the following documents:
professionals

a. Registration certificate for registered concerns.

b. Sales tax registration or NTN certificate, wherever
applicable.
c. Certificate or proof of membership of trade bodies etc.,
wherever applicable.
d. Proof of source of funds/ income

05 Partnership 1. Copy of the applicable valid identity document of all partners and
authorized signatories
2. All of the following documents:

a. Attested copy of ‘Partnership Deed’ duly signed by all

partners of the firm.
b. Attested copy of Registration Certificate with Registrar of
Firms. In case the partnership is unregistered, this fact shall
be clearly mentioned on the Account Opening Form.
c. Authority letter, in original, signed by all partners for
opening and operating the account.
06 Limited Liability 1. Copy of the applicable valid identity document of all partners and
Partnership (LLP) authorized signatories
2. All of the following documents:
a. Certified Copies of:
i. ‘Limited Liability Partnership Deed/ Agreement’
ii. LLP-Form-III having detail of partners/ designated
partner in case of newly incorporated LLP.
iii. LLP-Form-V regarding change in partners/ designated
partner in case of already incorporated LLP.

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 b. Authority letter signed by all partners, authorizing the
person(s) to operate LLP account.
07 Limited Companies/ 1. Copy of the applicable valid identity document of all directors
Corporations and authorized signatories
2. Certified copies all of the following documents:

a. Resolution of Board of Directors for opening of account

specifying the person(s) authorized to open and operate the
account;
b. Memorandum and Articles of Association;
c. Certified copy of Latest ‘Form-A/Form-B’
d. d) Incorporate Form II in case of newly incorporated
company and Form A/ Form C whichever is applicable; and
Form 29 in already incorporated companies

08 Branch Office or 1. Copy of the applicable valid identity document of senior official
Liaison Office of and/ or authorized signatories
Foreign Companies 2. All of the following documents:

a. Copy of permission letter from relevant authority i.e. Board

of Investment
b. List of directors on company letterhead or prescribed format
under relevant laws/ regulations.
c. Certified copies all of the following documents:

i. Form II about particulars of directors, Principal Officer

etc. in case of newly registered branch or liaison office of
a foreign company
ii. Form III about change in directors, principal officers etc.
in already registered foreign companies branch or liaison
office of a foreign company

d. Letter from Principal Officer of the entity authorizing the

person(s) to open and operate the account.

09 Trust, Clubs, Societies 1. Copy of the applicable valid identity document of:
and Associations etc.

a. all members of Governing Body/ Board of Directors/

Trustees/ Executive Committee, if it is ultimate governing
body,
b. all authorized signatories
c. settlor, the trustee(s), the protector (if any), and the
beneficiaries

2. Declaration from Governing Body/ Board of Trustees/ Executive

Committee/ sponsors on ultimate control, purpose and source of
funds etc.
3. Certified copies all of the following documents:

a. Certificate of Registration/ Instrument of Trust

52
 b. By-laws/ Rules & Regulations
c. Resolution/ Documentation of the Governing Body/ Board of
Trustees/ Executive Committee, if it is ultimate governing
body, authorizing any person(s) to open and operate the
account
10 NGOs/ NPOs/ 1. Photocopy (after original seen) of the applicable identity
Charities documents of all members of Governing Body/ Board of
Directors/ Trustees/ Executive Committee, if it is ultimate
governing body, and authorized signatories.
2. Certified copies all of the following documents:

a. All relevant Registration documents/ Certificate of

Incorporation/ license issued by SECP, as applicable
b. Memorandum & Article of Association
c. Incorporation Form II in case of newly incorporated company
and Form B-29 in case of already incorporated company
d. Resolution of the Governing Body/ Board of Directors/
Trustees/ Executive Committee, if it is ultimate governing
body, for opening of account authorizing the person(s) to
operate the account
3. Annual accounts/ financial statements or disclosures in any form,
which may help to ascertain the detail of its activities, sources
and usage of funds in order to assess the risk profile of the
prospective customer
11 Agents Accounts 1. Copy of the applicable valid identity document of the agent and
principal
2. Certified copy of ‘Power of Attorney’ or ‘Agency Agreement’
3. The relevant documents/ papers from Sr. No. 2 to 10, if agent or
the principal is not a natural person
12 Executors and 1. Copy of the applicable valid identity document of the Executor/
Administrators Administrator
2. Certified copy of Letter of Administration or Probate
13 Minor Accounts 1. Copy of the applicable valid identity document of the minor and
his/ her parent or natural or Court Appointed Guardian
2. Certified copy of order of appointment of Guardian appointed by
Court, if applicable

Note:
1. Requirement for copy of applicable valid identity document can be fulfilled by either:

a. obtaining photocopies of identity documents, invariably attested by Gazetted officer/ Nazim/

Administrator or an officer of the SBP RE after original seen; or
b. retaining copy of NADRA Verisys or Biometric Verification, for (hard or digital as proof of obtaining
identity from customer)

2. In case of an individual with shaky/ immature signatures, in addition to CNIC or any of valid document
mentioned at Sr. No 1, a passport size photograph of the new account holder besides taking his right and left
thumb impression on the specimen signature card will be obtained.

3. In case of expired CNIC, account may be opened or process of permanent customer relationship may be
initiated on the basis of attested copies of NADRA receipt/ token and expired CNIC subject to condition that
SBP RE shall obtain copy of renewed CNIC of such customer within 03 months of the opening of account/
initiating permanent customer relationship. For CNICs which expire during the course of the customer’s
relationship, SBP RE shall design/ update their systems which can generate alerts about the expiry of CNICs
at least 01 month before actual date of expiry and shall continue to take reasonable measures to immediately
obtain copies of renewed CNICs, whenever expired. In this regard, SBP REs are also permitted to utilize

53
 NADRA Verisys reports of renewed CNICs and retain copies in lieu of valid copy of CNICs. However,
where necessary obtaining copy of renewed CNIC as per existing instructions will continue to be permissible.

4. The requirement of obtaining NTN depends upon availability/ issuance of NTN by tax authorities. The
requirement of NTN should not be the reason for refusal of financial services to the customers, especially,
where bank account is a prerequisite for obtaining NTN as per FBR’s criteria. The SBP REs should facilitate
their customers in opening bank accounts and subsequently obtain NTN when issued by the FBR.

5. The condition of obtaining photocopies of identity documents of directors of Limited Companies/

Corporations is relaxed in case of Government/ Semi Government entities, where SBP REs should obtain
photocopies of identity documents of only those directors and persons who are authorized to open and
operate the account. However, SBP REs shall validate identity information including CNIC numbers of other
directors from certified copies of relevant list(s) required to be filed under Companies Act, 2017.

54
3.16 Risk Based Approach (RBA) -- Risk Profiling of Customers
(INST/081/2013 dated 28-06-2013)
Pursuant to BPRD Circular No. 2 dated September 13, 2012 of State Bank of Pakistan (SBP), the Bank has
implemented revised regulations on AML/CFT, vide Instruction Circulars No. 150 and 151 dated October
25, 2012. To align AML/CFT risk assessment procedures of the Bank, with the Guidelines on Risk Based
Approach (RBA) of SBP, the following procedures / approach will be implemented with immediate effect.

1- Risk rating of the customer will be assessed as per Appendix – A, as follows:

(I) At the time of opening of new account of a customer,

(II) Performing periodic review of due diligence of a customer, and
(III) Performing trigger/event based review of due diligence of a customer.

2- Based on the following five "Risk Variables / Determinants", the score of each customer will be
calculated up to a maximum of 100:

a. Type of the customer;

b. Products and Services availed or intended to be availed by the customer;
c. Delivery channels used or intended to be used by the customer;
d. Geographies where the customer is registered and / or operating and
e. (i) Inquiries received about the customer from various agencies like National Accountability
Bureau (NAB), Federal Investigation Agency (FIA), Anti Narcotics Force (ANF), Financial
Monitoring Unit(FMU), State Bank of Pakistan (SBP) and other agencies [except Federal
Board of Revenue (FBR)] (ii) Any person involved in fraud, burglary and dacoity and / or
(iii)Suspicious Transaction Report (STR) about the customer filed with FMU by the Bank.

Further details of the above "Risk Variables / Determinants" are given in Appendix-B of this circular

3-Based on the total score calculated as per the Appendix-A, an overall ‘Customer Risk Profile’ will be
prepared by the Branch Manager, as given in the following Table, which will be sent to CPU along with all
other documents and will be reviewed by the Compliance Division.

Benchmarking Risk Risk Customer Risk Profile Level of Customer

Score Ranges Rating Due Diligence Required
Score up to 40 Low Low Risk Customer Simplified Due Diligence (SDD)
Score from 41 to 70 Medium Medium Risk Customer Simplified Due Diligence (SDD)
Score from 71 to 100 High High Risk Customer Enhanced Due Diligence (EDD)

4-It is important to mention, that there is a ‘Risk Override Principle’, whereby, if (i) the customer type falls
under ‘High Risk Category’ as per Appendix - B, and / or (ii) the customer is from "High Risk Jurisdiction /
Country / Geography" as per Appendix - B, and / or (iii) there has been any inquiry about customer from
agencies like NAB, FIA, ANF, FMU, SBP and other agencies (except FBR), and / or (iv) the customer is
involved in fraud, burglary or dacoity and / or (v) the Bank has filed an STR about the customer, then the
Customer Risk Profile must be marked as ‘High Risk’, even if risk rating category calculated by the Branch
using Customer Risk Profiling (CRP) Form – Score Card, given in Appendix - A, is Medium or Low.

5-Identity of the customer, mandate holders, directors, authorized signatories, trustees, beneficial owners (as
may be applicable) will be established & verified and their names will be cleared from "List of Debarred
Persons" before their accounts are opened. If there is 100% positive match, banking relationship must not be
established or advice / clearance must be obtained from respective Zonal Head or Authorized Person in
Zonal Office AND Compliance Division. This process also applies when there is a change in partners,
mandate holders, directors, authorized signatories, trustees, beneficial owners (as may be applicable) as well
as while performing periodic and trigger / event customer due diligence.

6- Frequencies of due diligence required and approving authorities are as follows:

As per instructions circular INST/063/2014 dated April 29, 2014, the amended information is given below.

55
 Risk Category Due Diligence Frequency of Approving Authority
Required Due Diligence
High Risk Customer Enhanced Due Every Year For opening the accounts of NGO, NPO,
Diligence (EDD) Charity, Trust, Society, Association, PEP,
and Correspondent Banking Account,
approval of Senior Management (i.e.,
General Managers or Zonal Heads &
above) is required.

For opening other High Risk accounts, BM

(Branch Manager) and OM (Operations
Manager) will jointly approve
Medium Risk Customer Simplified Due Every Three Years BM or OM jointly with a Senior Officer of
Diligence (SDD) the branch.
Low Risk Customer Simplified Due Every Five Years BM or OM
Diligence (SDD)

During the periodic review of Customer Due Diligence and / or trigger / event based review of Customer
Due Diligence, if the risk rating of the customer is changed from High Risk to Medium Risk or Low Risk, it
will be approved by the approving authority, as applicable, for High Risk Customers, whereas, if risk rating
of the customer is changed from Medium Risk to Low Risk, it will be approved by the approving authority,
as applicable, for Moderate Risk Customers.

7- During periodic review of Customer Due Diligence, Branch Managers will fill fresh CDD Form (SDD /
EDD Form) for a customer as per frequency defined above, will ensure that all the required documents are
available on the Bank record & customer information is updated and customers are risk rated as Low,
Medium and High using Appendix A.
8- In addition, Branch Managers are also required to perform trigger / event based CDD review of the
customers, even if the periodic review is not due, if:

I. There have been significant / material changes in the profile of the customers e.g. existing customer
becomes PEP or PEP linked,
II. Dormant / inoperative accounts are re-activated,
III. Pattern of transactions varies considerably from the CDD profile of the customer or STR has been
filed with FMU by the Bank,
IV. There is change of ownership of the customer or change in the parent company of the customer or a
change in the legal status & name of the customer, i.e., a private limited company has become public
limited company & vice versa,
V. There is continuous negative news about the customer in the public media, a staff member leaves the
Bank but continues to maintain banking relationship with the Bank etc.

9- Branches are required to obtain prior clearance from Compliance Division before opening new accounts
of Partnerships, Trusts, Non Governmental Organizations (NGOs), Non Profit Organizations (NPOs),
Charities, Clubs, Societies, Associations and Politically Exposed Persons (PEPs).

10- For Joint Accounts of housewife with her husband, father, son, brother etc., where source of funds /
income for these accounts is that of the other joint account holder, then risk rating of the other joint account
holder (who is provider of funds) will be considered while assessing risk rating of these accounts and risk
rating of housewife will be disregarded. However, if (i) only the housewife has mandate to operate the
account(s) and / or (ii) there are also additional sources of funds other than that of the joint account holder,
risk rating of housewife will apply and these accounts will be marked as high risk as per regulatory
requirements.

However in case of other joint accounts, risk rating of the riskier joint account holder will be considered and
applied to the account / relationship.

11- Implement this circular for the new customers and if you experience any problem in understanding &
implementing it, please contact Compliance Division.

56
3.17 ISSUANCE OF CHEQUE BOOKS
Basic Information
1) Cheque Books are issued to customers first time when the account is opened on strength of Cheque
Book Requisition Form and subsequently when the previously issued cheque book is nearly exhausted
or fully consumed, on strength of Cheque Book Requisition Slip attached with all cheque books. In our
Bank cheque books of 10, 20, 50 and 100 leaves are available. (10 leaves chequebook as per
INST/092/2019).
2) Cheques are security stationery and each cheque is to be properly Stred/recorded. Cheque Books must
always remain in the custody of a Designated Officer of the branch.
3) When a new account is Fast Opened in the branch, after completion of Account Opening formalities and
approval of B.M./O.M, the AOF and relative documents are sent to CPU for their processing. On
completion of the job on their part the cheque book is prepared by PSPC and sent to the branch, which in
term is delivered to the customers. Subsequently the customer can request for issuance of a fresh cheque
book on strength of Cheque Book Requisition Slip and the branch will forward this request to CPU
provided the customers account is being operated regularly to the satisfaction of the bank and a large
number of cheques are not remaining unused with the customer, without any justification.
4) Series of cheque numbers issued to customers is to be activated in repectve accounts through computer
system.
5) In case of cheque book issued to a new customer, especially one who had no bank account previously, it
is advisable to ask him to take due care of the cheque book and request him to study the instructions
printed on the inside of the cheque book cover.
6) Cheque books are normally delivered to the customer in person but in case a cheque book is delivered to
a third person, care is to be taken that he is duly authorized in writing by the customer. In case of need
and with the approval of Manager a cheque book may also be sent to the customer by mail or courier.
7) Issuance Of Express Cheque Book:
• Express Cheque Books are issued only in Exceptional Circumstances after being satisfied
that the request is genuine and urgent.
• It is 10-Leaves Book
• These cheques are acceptable at counter and in clearing & transfers but Not acceptable for
On-Line-Transfer
• Branches are required to retain stock of express chequebooks. Treat these cheque as regular
cheques and there is no more requirement to affix a stamp which reads as Not for On-Line-
Use (INST/104 & 161 /2020).
• The customer must be informed that such cheques will not be entertained for online
payment.
• The name and account number of the account holder is not printed on this cheque book
therefore the designated officer should write account number of the account holder on all the
leaves, manually, of the express-cheque-book
• Branch Manager should keep into their personal control all stock of Express Cheque Books.
• BM is to provide one express cheque to the officer concerned for issuance.
• The manager should also affix his initial on all registers i.e. Security-Stationery-Register
&others presently maintained to record the movement of counter and bulk stock of express-
cheque-books along with that of the Designated Officer(s).
• On absence of Branch Manager on leave, the acting manager will perform this duty.
• Charges to be recovered are same as of a regular cheque book.
8) Issuance of Loose Cheque: A loose cheque can be issued to a customer who is not in possession of his
cheque book and needs cash urgently. For this purpose small cheque books containing 10 leaves each are
available in the branches, so that in case of need a Loose Cheque could be issued to the customer,
without any loss of time in getting it from the CPU. Request for issuance of a loose cheque should be
duly approved by the Branch Manager.
9) In case a cheque book has been reported lost, written request from the customer for issuance of a new
cheque book should be obtained. Customer’s signature on this letter should be verified from the S.S.
Card and a new cheque book may be issued after Mangers approval. Special care is to be taken if a new

57
 cheque book is being requested in a Dormant Account. For this purpose the customer may be
interviewed to confirm genuineness of the matter.
Cheque Book Requisition.
First Time: Cheque books are issued at the time of opening the account except where refused by the
customer. However, first time cheque book is issued only when all account opening formalities have been
completed.
Subsequently: Cheque Book Requisition Slip attached with all the cheque books should be signed by the
customer and his signatures duly verified for issuance of cheque book to him. Care is to be taken that cheque
books issued to him previously have been utilized and the account is being operated satisfactorily. In case
there is an unreasonable number of cheques remain with him unutilized, he should be politely asked the
reason of a new cheque book, and in case of doubt, the matter should be referred to the Manager.

Issuance of Cheque Books by CPU:

Presently cheque books are issued through CPU (by the vender). First Time, on receipt of Account Opening
Documents from the branch, after the account has already been Fast Opened in the branch. The cheque book
is issued by CPU only after they have checked and verified all Account Opening Documents for their
correctness and genuineness and assured themselves that all account opening formalities, including
acknowledgement of Letter of Thanks to the Customer and Introducer, have been completed to their
satisfaction.
Subsequently the cheque books are issued by the CPU on the request and recommendation of the branch.
Deliver Cheque Book:
On receipt of cheque books through courier company, the branch will deliver cheque book to the customer or
to a person authorized by him in writing against his acknowledgement.
Computer Records:
The cheque series of the cheque book issued to the customer is to be recorded on the computer by input of
details as contained in "Issue Cheque Book" module of System.

Issuance of Loose Cheques:

1) Following precautions are to be taken for issuance of a loose cheque:
• The customer should personally come to the branch.
• He is well known to the Manager or a senior officer of the branch.
• The amount is required urgently for a reasonable purpose.
2) Loose cheques are to be issued from the small cheque book already available in the branch.
3) Procedures are as follows:
• Receive the request for issue of a loose cheque and Obtain approval of the Manager or a
Senior Officer of the Branch.
• Fill up the loose cheque with date and amount and write "Loose Cheque" on its face. A loose
cheque can be used for emergency cash payment or it can be used for a payment to the Bank
itself e.g. Loan Installment etc. It should be filled up accordingly and it is not to be given to
the customer, to avoid it being presented for payment by another bank through clearing or
other banking channels.
• Make entry in the Cheque Books Issued Register.
• Deliver loose cheque to the customer against his acknowledgement.
• Record issuance of the loose cheque on the computer by following actions as per "Issue
Loose Cheque" Option.

PSPC- Pakistan Security Printing Corporation

 CPU Generates file to send PSPC on daily basis at 4.30 pm

 Courier company takes delivery directly from PSPC for branches
 Acknowledgement by branches via LONO
 Branch must reconcile chequebook received with the “Production Report” received.
 Acknowledgement chequebook on “LONO”

58
PSPC-Security Features:

 Security paper is used which is not available in the market

 Watermark of Bank AL Habib Limited.
 Reactive to 20 chemicals [the chemicals which are available in market used as ink remover to
temper the writing]
 2 colour invisible fibers.
 7 areas are defined as sensitive [which are usually tempered]
 30 digit MICR numbering by hammering process
 Requisition slip is also printed on security paper with security features
 Acknowledgement slip is printed, separately.
 100 leaves option is available
 8-digit serial number.
 Express chequebook is also available through PSPC

3.18 OPERATIONAL INSTRUCTIONS

Sr. Head of A/c Common Operational Instructions

1 PLS SB or CD accounts of individuals “Singly” means the individual whose name is
given in title of account will operate the account
himself.
In certain cases powers to operate the account
are assigned to another person called as
‘mandatee’ who will operate the account under
valid mandate.
2 Photo Account Thumb impression to be affixed before a bank
officer. In case of shaky signatures still called as
photo account
3 Account of a Minor with Guardian Guardian to operate the account even after
attaining age of majority
4 Young Saver Account ------same as above-----
5 Senior Citizen Account Singly or Jointly
6 Blind Person – jointly or singly opened Thumb impression to be affixed before a bank
officer
7 Joint persons account Singly, jointly or either or survivor
8 Account of Club Jointly as per Resolution of Managing
Committee or Governing Committee
9 Account of Association -------same as above---
10 Account of Society -------same as above----
11 Account of Public or Private Limited Co As per Resolution of Board of Directors (BOD)
12 Account of Partnership As per Deed and Partnership Letter
13 Account of Sole Proprietary Concern Singly by owner or mandate
14 Account of Public Sector Corporation As per letter of concern Ministry
15 Account of Trust As per resolution of board of trustee and Trust
Deed
16 Account of NGO As per letter of Ministry of Social Welfare
17 Account of Constituted Attorney As per principal’s letter and as per terms of
POA
18 Collection Account No operations – funds transferred daily to “Cash
Management” PO
19 Account of PF, BF or Gratuity As per resolution of Trustees
20 Educational Institutions As per Resolution of BOG

59
3.19 STANDING INSTRUCTIONS
Basic Information:
1. Instructions given by a customer to the bank, to carry out certain transactions on recurring/
periodical basis are Standing Instructions. Transactions to be carried on should be normal and
acceptable to the bank e.g. periodical transfer of funds or payment of Club Bills, School Fees or
Insurance Premium etc. Standing Instructions can also be given for transfer of funds from one
account to another in the same branch on a periodical basis or when required.
2. Standing Instructions can be of two types:

(a) Auto generated Standing Instructions

These are generally for transfer of funds from one account to another, in the same branch for
example, transfer of funds from a Current Account to Treasurer Call A/c at the close of business
each day and retransfer to Current Account next morning.

(b) Semi-Auto or Executable Standing Instructions

These are the Standing Instructions where something has to be done on specified dates, for
example affecting a remittance or payments of any kind of dues. For this purpose vouchers are to be
prepared and transaction conducted by branch staff on behalf of the customers. Here the computer
works as a Due Date Diary and reminds what is to be done and when.
3. The Standing Instructions should be given to the bank in the form of a letter duly signed by the
customer and containing:
 Details of the transaction, name of the beneficiary and action to be taken e.g. if the Pay Order or
Demand Draft is to be sent on a given address etc.
 Frequency and date/days when the instructions are to be carried out.
 For how long the instructions are to be carried on and when they will expire/terminate.
 Account which is to be debited for the purpose and what is to be done in case of a problem such as
insufficient balance in the account to carry out the instructions or non-availability of the beneficiary
etc.
4. It is necessary for the officer who is responsible for Standing Instructions to check each day
Executable Standing Instructions on the computer.

5. Fee is to be deducted for executing Standing Instructions per transaction plus remittance charges as
per schedule of charges.

PROCEDURE:
Receive the Letter from Customer:
Receive the letter containing Standing Instructions, from the customer, check its contents to find out what is
to be done and when. In case the instructions are troublesome or abnormal, seek advice of the Manager for
its acceptability or otherwise. Get signature of customer verified from Specimen Signature Cards.

In Joint account, all joint account holders to sign on standing instruction letter. (Instruction Circular
022 dated March 20, 2007)
Computer Input:
Key-in details of the Standing Instructions on computer on "Apply Standing Instructions" activity in System,
This action will generate Standing Instruction Number and will apply Auto Executable Standing Instructions
to the account. On completion of the action, take a print-out and attach it with S.I. Letter.
Key-in details of Standing Instruction on Semi Auto S.I. Activity on computer. This action works as Due
Date Diary.

60
Standing Instruction File

This file should contain all original S.I. letters, where action is to be taken on Due Dates. File the letter in
sequential order.

Taking Action on Due Date

Refer Semi-Auto S.I. on computer to find out what action is to be taken and when. This activity will display
Executable Standing Instruction applied on the account with S.I. Number.

On command the computer will automatically debit/credit the accounts as contained in the Auto S.I. The
computer will also debit the customer account with Standing Instructions fee and remittance charges if any.

Take out the Advice for debiting customers account and send it to him, advising him about the action taken
on his Standing Instruction.

Insufficient Funds

If the action, as per Standing Instructions, cannot be taken because of insufficient funds in customer’s
account, immediately inform him about the situation, by means of a letter, and seek his instructions.

In case of any other problem also e.g. beneficiary of a remittance not available, customer should be informed
accordingly.

Cancellation/ Termination of Standing Instructions

(a) The customer can cancel his Standing Instructions, at any time, by means of a letter addressed to the
bank. On receipt of this letter verify customers signature and:

(i) Amend computer records by "Cancel Standing Instruction" activity and

(ii) "Cancel Semi-Auto S.I." activity on the computer.

(b) On expiry of the period, if the Standing Instruction was for a definite period of time proceed to
cancel the Standing Instruction and Semi-Auto Standing Instruction as mentioned in (a) and (b)
above.

3.20 STOP PAYMENT OF CHEQUES

Legal Considerations

SECTION 31 of Negotiable Instruments Act 1881, as reproduced below, describes the liability and
authority of drawee of a cheque:-

“The drawee of a cheque having sufficient funds of the drawer in his hands properly applicable to the
payment of such cheque must pay the cheque when duly required so to do, and, in default of such payment,
must compensate the drawer for any loss or damage caused by such default”

The liability and authority of the drawee bank in respect of payment of cheques, as mentioned above comes
to an end under Section 122-A of Negotiable Instruments Act 1881 which is reproduced as under:

“SECTION 122-A: Revocation of banker’s authority: The duty and authority of a banker to
pay a cheque drawn on him by his customer are determined by:-

1) Countermand of payment
2) Notice of the customer’s death
3) Notice of adjudication of the customer as an insolvent

61
As such drawee of a cheque should not pay the cheque on occurrence of any of the above situation otherwise
he will be held liable for negligence. Procedure of marking stop payment of cheque is detailed below:

1) The Account Holder to advise us through a letter with detail of cheque viz. date of issue, payee’s name,
amount and reason for stop payment.

2) Intimation of stop payment through phone or email

3) Upon receipt of letter from customer its date of receipt and time is recorded and signature(s) of customer
verified then the account is checked about payment or non-payment of cheque.

4) If cheque has been paid already, date of payment and mode are mentioned on the letter with indication
that cheque cannot be stopped as already paid. Acknowledgement of customer is taken on photocopy of
same letter and preserved.

5) In case cheque is not yet paid, Letter is acknowledged by delivering its photocopy to customer.

6) Particulars of cheque are fed through ALHABIB system and print out taken which is attached with the
letter of account holder.

7) An intimation is sent to account holder that stop payment has been marked on desired cheque
(Previously banks were using “Disclaimer” for such cheques. In other words they were not taking any
responsibility in case of payment of stopped cheque due to overwork, rush of work or reason beyond
control. Now SBP vide BPD Circular Letter 22 dated June 14, 2005 advised banks to remove
disclaimer clause from acknowledgement letter. Principal Office Circular 053 dated June 21, 2005. The
Acknowledgement Memo attached to this Circular to be used.)

8) If cheque is presented for payment, it should be returned unpaid under objection “STOP PAYMENT
BY DRAWER” same indication is mentioned on the face of the cheque by affixing stamp if available
otherwise these words are written on the face of the cheque between two oblique parallel lines(crossing)
preferable with red ink.

9) In case stop payment instructions are requested to be removed, the drawer has to inform the Bank in
writing and the instructions are deleted after verification of customer’s signatures.

10) If cheque marked stopped is paid, the bank has to compensate the customer by reversing the wrong
payment’s entry and paying compensation as per court orders.

11) Charges for marking stop payment instructions to be recovered and credited to Income Account – Misc.
Earnings.

12) If a customer has lost his blank cheque books numbered sequentially (i.e. from 567 3823 to 5673850) an
amount levied on one cheque is to be recovered.

13) Penalty for payment of a Stopped cheque:

 Reversal of debit entry

 Compensation of wrongful dishonour of subsequent cheque presented and returned unpaid for want
of funds.

It is imperative to take utmost care for returning the cheques with reason “Funds Insufficient” as it is viewed
seriously by law and wrongful dishonour may put the customer in a difficult position.

Section (20-E) of Financial Institutions (Recovery of Finances) Ordinance, 2001 states that “ dishonestly
issuing a cheque towards settlement of a claim or an obligation which is dishonoured on presentment,
(imprisonment upto one year, or with fine, or both).

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3.21 COURT ORDER (GARNISHEE ORDER)

A Garnishee Order can be defined as a Court’s Order by virtue of which a creditor can get the funds in the
hands of a third party, belonging to the debtor’s attachments. Under Section 60 of the Criminal Procedure
Code, a Court is authorized to issue an order (Garnishee Order) to a Banker for the attachment of an account
of a customer for settlement of his debt obligations.

Usually, the Court Orders are of two types:

A- Garnishee NISI:

If the Order is issued to a Banker usually to hold the operation in customer’s one or more accounts till
further order is termed as Garnishee NISI.

B- Garnishee Absolute:

If the Order is issued with the absolute and clear instructions to settle the debt from the account through
Garnishee Order is defined as Garnishee Absolute.

The Garnishee Order issued to a Banker is authorized to stop from honoring cheques for the entire
balance or a part thereof. If an order does not specify the amount. It is assumed to be applicable to the
entire balanced of the account.

The Garnishee Order is attachable to an account which is due or accruing due at a definite date .The debt
should actually be due and not a claim only that may become due at a future date. In other words, it must
be:

 Current or Saving Deposits.

 Term Deposit Maturing on a fixed date.
 Deposits repayable after lapse of specified time.

The balance in a joint account can not be attached through a Garnishee Order having the attachment
instructions with the title in either of them. However, order issued in joint names is to be attached.

Measures to be Taken by the Bank:

1- Proper receipt (date and time of receipt of order).

2- To confirm the relevant account to be attached.
3- To settle Bank’s debt through right of set off.
4- Blocking the amount attached through G.O.
5- To settle the amount as per attachment instructions.
6- Information to the customer
7- Care to be taken in whole process.

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3.22 DECEASED ACCOUNTS – PAYMENT OF CREDIT BALANCES

1) The account to be marked as “DECEASED” upon receipt of reliable information of the death of a
customer and scanned signatures in the system removed.

2) Cancel Power of Attorney or Mandate given by deceased.

3) All the departments are informed about the death of customer to seek information of deceased’s dealing
with the bank (including third party guarantees, safe deposit locker, securities and outstanding against
deceased in Credit Department.)

4) All payments/withdrawals to be stopped immediately even cheques signed by deceased are not to be
paid unless signature is in official capacity and in that case proper confirmation obtained. Credit may be
given (as per local laws) until the time balance is conveyed to Court for issuance of succession
certificate to heirs of deceased.

 In individual accounts,
 In Joint persons accounts where operational instructions are not given as “Either or Survivor”
 In Minor/Guardian’s account where Guardian has expired

 In Sole Proprietary Account where proprietor has expired Credit balances in these account should
not be paid against any “WILL DEED” left by the Deceased until Court Order or instructions of
Executor/Administrator are received.

 Partnership accounts (Death of one partner dissolves partnership) therefore new account to be
opened after completing all the necessary documentary and procedural formalities and old account
closed. Cheques signed by deceased partner to be paid after obtaining written confirmation on
surviving partners where account of partnership showing Credit balance, however in case of debit
balance, the account should be frozen in order to determine the liability of the partners to prevent
application of the rule in Clayton’s Case.

 Accounts of (private or public) limited companies, Clubs, Associations and Trusts are not blocked.
However, cheques signed are deceased director or authorized signatory to be paid after obtaining
written confirmation from surviving directors/members of Managing Committee/Trustees as the
case may be.

5) For payment of balance from deceased accounts of individuals, following procedure to be adopted.
(Instruction Circular 121 dated December 5, 2005, Instruction Circular 066 dated August 1, 2006,
Instruction Circular 035 dated April 23, 2007 and INST/076/2019)

A- For Claims up to Rs.10,000/-: In order to facilitate the successor, branch may accept the
undertaking on appropriate stamp paper as per provincial requirement from the successor in lieu of
indemnity and Hiership Certificate with the approval of Branch Manager.

B- For Claims Above Rs.10,000/- and upto Rs.50,000/-: In such claims, payment may be made to
legal heir(s) by Branch Manager in the absence of a Succession Certificate on submission of
following documents, if case is genuine

 An original Death Certificate:. It should be seen by Branch Manager and a copy thereof
made and certified by the Branch Manager with the words “Original Seen” under which his
Signature, Name and P.A Number written.

 Photocopies of the CNICs of the heir of deceased. Original CNICs should be checked by
the branch manager to ensure that relationship with the deceased is verified. This can be
done by any of the following details mentioned on the CNIC e.g. Wife of , Son of, Family
Number on CNIC
 Heir ship Certificate issued by Magistrate First Class.
 Sworn affidavit of the heir (s) (Annexure I)
 Letter of Indemnity cum Authority (Annexure II)

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 C- For Claims Above Rs.50,000/- and upto Rs.100,000/-: In such cases, the Branch Manger, if
convinced that the request is genuine, should forward the request of the heir(s) along with all
documents mentioned above to the Zonal Head, subject to the recommendation of Area Manager.
D- For Claims above Rs.100,000/-: In such cases, Succession Certificate and its confirmation to be a
genuine from the concerned court of law is necessary. Balances are to be released after necessary
documentation conforming to the requirements of the law and containing the authority, clearance
and the instruction regarding disposal of funds, contents in locker and other items kept by deceased
in bank’s custody. If necessary legal department of PO or legal counsel’s assistance to be sought.

As per INST/ 022 - Payment against Succession Certificates February 25, 2010
With a view to avoiding wrongful payments to the heirs of deceased account holders under succession
certificates and as a precautionary measure, payment against succession certificates must be made only after
verification thereof from the concerned court.
Branch Managers are, therefore, strictly required to receive original succession certificates along with
covering letter from the heir(s) of the deceased account holder and get the succession certificates duly
verified from the concerned courts before putting the case in process, i.e. obtaining formal approval, etc.
from the respective zone.
Note: Please ensure prior approval must be obtained from respective Zonal Offices by branches.
As per INST/ 122 - Verification of Succession Certificate Dated: October 5, 2010

As per State Bank of Pakistan, BPRD Circular Letter No. 24 dated October 4, 2010 on the above subject.
Branches must ensure that in future letters for verification of Succession Certificates are addressed only to
Assistant Registrar, Execution & Misc. Branch, High Court of (province).
3.23 DORMANT ACCOUNTS & UNCLAIMED DEPOSITS

A- Dormant Accounts

An account becomes dormant if no transaction is made for a period of “ONE Year”. Such accounts are risky
if remain operative, so these accounts are marked as “DORMANT”. When any operation is required to be
done in Dormant Account, the branch manager's approval is required. BM inquires about the genuineness of
the customer & transaction and then allows the operation.
Upon receipt of customer's request to release the dormant condition, she/he is asked to conduct at least one
transaction on same day, in order to keep the account operative.
Effort should be made to convert dormant accounts to regular active accounts because of the fact that if these
accounts remain dormant for ten years then converted to “Unclaimed Balance Accounts” and balances of
such accounts are transferred to State Bank of Pakistan. In case of any claim from the customer, we have to
request SBP for releasing of the funds. Upon receipt of funds from SBP the account holder is paid, it may
require some time which cause inconvenience to the customer.
INST/ 044/ 2016 Issuance of Statement of Account (SOA) on Activation of Dormant Account
Henceforth, branches shall issue Statement of Account (SOA) to the customer(s) for the dormancy period
i.e. Date of account Dormancy to Date of account activation.

Branches shall request the customers to fill-in the prescribed “Bank Statement Request Form” for the
issuance of Statement of Account (SOA) which can only be issued from Native Branch with the approval of
Branch Manager, after completion of account re-activation process. However, dormancy condition can be
removed from the facilitating branches as per existing procedure and the customer should be advised to
contact their Native Branch for the issuance of Statement of Accounts (SOA).

It must be ensured that no charges shall be recovered from the customer’s account in lieu of issuance
Statement of Account (SOA) for the dormancy period.

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 B- Unclaimed Deposits

In terms of provisions contained in section 31 of BCO, 1962 the customers' deposit accounts which are in-
operative for 10 years or more are to be treated as 'Unclaimed Deposits' and these funds are to be transferred
to State Bank of Pakistan.

This Rule is not applied on the accounts in the name of:

 Minors
 Government
 Court of Law

(a)- Unclaimed Deposits means a debt payable in Pakistan currency or any other currency, which owes by a
banking company by reason of a deposit and includes...

-Time, Demand, or any other kind of deposit. OR

-Pay slips / Pay Orders / D.D's / T.T's /M.T's or any other financial Instrument.

(b)- In case of Current or Saving accounts, the 10 years period is to be calculated from;
-Any transaction initiated by the customer.
-No Statement of Account is requested or acknowledged by the customer

(c)- In case of Term Deposits – From the date of maturity of the deposit.

(e)- Banks are required to serve a three-month notice in writing to the creditor or the beneficiary of the
deposit/instrument on their address (last made known to the bank). The notice is to be sent by Registered
Post and records are maintained for further verification (if required).

(f)- All banks are required to submit Branch Wise List of unclaimed deposits / instruments separately for
PKR /FCY on Form-XI through soft copy (Excel Sheets) as well as authenticated hardcopy of the same
within 30-days after the close of each calendar year.

(g)- The amount of unclaimed deposits / instruments are required to be surrendered to SBP during the first
week of April of each calendar year alongwith the list of unclaimed deposits, which have been refunded by
the bank during the period (from date of reporting to the date of surrender of outstanding amount).

(h)- Thereafter these deposits can be claimed back from SBP if the customer approaches the bank to get his
money. The SBP will pay back these funds to the customer on completion of certain formalities and
obtaining the required documents.

(i)- These amounts can be claimed back from SBP upon request of the customer, within 12 months of their
transfer to SBP, after which period they will be transferred to Provincial or Federal Government.

(j)- The banks are required to preserve the AOF & other Documents till such time the written instructions
from SBP are reconceived that that they need not be preserved any longer.

(k)- All matters relating to Unclaimed Deposits (Reporting, Surrendering and Refund) should be made
through Return & Reconciliation Department-CPU, POK.

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3.24 CLOSING OF ACCOUNTS

1. Upon Customer’s Request:

a) Obtain account closure request from the customer with reason clearly mentioned.
b) If reason is unsatisfactory service then try to resolve the issue.
c) If reason is genuine, check the available balance and account statement for last few
weeks/months to assure not to have any unusual activity/transactions.
d) Look for any debit balance in loan account, block amount or outstanding bills for collection.
e) If all is activity is normal, request the customer to draw cheque for available balance.
f) Destroy the unused cheque book.
g) Input in the computer system to close the account.

2. Upon Bank’s Option:

a) Bank can close account of any customer if not maintained satisfactorily which may be due to any
reason including the following:
1) Issuing Cheques repeatedly without maintaining sufficient balance
2) Repeated instructions for stop payment of cheques
3) Attempted to deposit fake currency note every now and then.
4) Attitude and behavior not satisfactory
5) Any other reason which may be detrimental to Bank’s interest.

As per Instruction Circular INST/020/2016, Principal Office issued guidelines for Closure of Unsatisfactory
Accounts: Due to Return of Cheque in Inward Clearing.

 A spool file along with letters (1st & 2nd) will be forwarded to RMMS – Central Processing Unit for
onward dispatch to the customers.
 First Letter will be generated and dispatched to the customers by CPU latest by the first week of each
calendar month where a minimum of 03 instances of cheque returned due to insufficient balance in the
account were observed.
 If the customer continues to issue cheques with insufficient balances in the account, CPU shall dispatch
the Second Letter, where a minimum of 06 instances of cheque returned occurred in the same account
during last TWO consecutive calendar months.
 In case, if the conduct of customer’s account does not attain the satisfactory level, and 10 or more
instances of cheque returned due to insufficient balance occurred in the account during the last THREE
consecutive calendar months, such accounts would be categorized as unsatisfactory accounts.
 A report of such accounts on monthly basis will be sent to the respective Zonal Offices.
 After obtaining Zonal Office approvals, the branches / sub-branches shall close such accounts after
issuance of a Banker’s Cheque by debiting customer’s account, representing the balance and accrued
profit (less charges / commission / taxes & duties, if any) in the name of account holder.
 Thereafter, the branch / sub-branch will dispatchthe third and final letter to the customer on the same
day along with the photo copy of Banker’s Cheque. A copy of the letter along with the courier receipt
should be filed and maintained by the branch concerned for Audit trail.
 When the customer calls for collection of the original Banker’s Cheque, acknowledgement must be
obtained on the counterfoil of Banker’s Cheque. If there is no response from the account holder despite
having acknowledged the receipt of letter, Banker’s Cheque must be kept in safe custody at concerned
branch under dual control.
 All undelivered letters should be filed and maintained for Audit trail at the branch concerned separately.
While closing these types of accounts, "Account Closed due to Unsatisfactory Conduct" should be
mentioned in the account closing reason.
 Zonal Office should report the unsatisfactory conduct of these accounts to FIU to incorporate these into
FIU Watch-list Web Portal.

Other Possibilities
 Conversion of proprietary concern into partnership
 Change of one or more partners in a partnership firm
 Conversion of partnership into private/public limited co.
 Conversion of private limited into public limited co.

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  Merger of two (or more ) business entities
 Acquisition of one entity by another
 Liquidation/bankruptcy
 Retirement of one or more partners
 Case of minor’s account with guardian upon attaining age of majority by minor
 Death (in case of individual/joint account/proprietary concern or death of one or more partners
 Operation of law

Action to be Taken When Change Occurs in customers’ accounts.

S.#. Change Requirement Action

1 Death (Individual, Joint A/c Receive Notice – Block Account and pay or open new
Holder, Proprietor, Partner (s) its confirmation account upon completion of legal
formalities.
2 Attaining Age of Majority by Minor should not Upon Majority, either separate account in
Minor operate account the name of Minor (now Major) to be
opened or Joint Account in the joint names
of minor and guardian to be opened after
completion of all necessary formalities
3 Death (of Manager or Mandatee) Receive Intimation Cancel signatures of deceased - obtain fresh
–Verify signatures with fresh mandate
signature(s)
4 Conversion of Proprietory Receive Intimation Close existing account and open new
Concern into Partnership/Ltd. Co. –Verify account with full documentation
signature(s)
5 Any change in Partnership- Death Receive Intimation Close existing account and open fresh
of one or more partners, –verify account with required documents
Admission of new partner(s), signature(s)
Retirement of partner(s),
Bankruptcy of one or more
partners
6 Conversion of Partnership into Receive Intimation Close existing account and open fresh
Private/Public Ltd. Co. –Certificate of account with appropriate/updated
Change verify documents
signature(s)
7 Conversion of Private Ltd. Receive Intimation Obtained fresh documents and open new
Co. into Public Ltd. Co. with Certificate of account –close old account
Change and Form
A29
8 Change in Board of Directors Receive Intimation Record Changes in Profile – Delete previous
with Resolution + list- File Intimation etc. with Account
Form A 29 Opening Form
9 Changes in Authorized Receive Intimation Cancel old cards – insert new card- Replace
Signatory(ies) with fresh old signatures with new one. File Intimation
Resolution Copy, with AOF
new S.S. Cards
duly verified
10 Liquidation/Bankruptcy Received Court Block account- Follow Court Orders
Orders
11 Mergers/Acquisition Receive Intimation Close old account and open new account
– verify with usual formalities.

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3.25 TERM DEPOSIT RECEIPTS

1. Term Deposit Receipts are issued for a period from one month to Five years.
2. Rate of Return depends upon tenor – More the tenor, higher is the offered rate.
3. TDR may be issued in the name of Individual, in Joint names of two or more Individuals, in the name of
minor (with guardian).
4. TDRs may also be issued in the names of Sole Proprietary concerns, Partnership firms and Limited
Companies, Government Agencies/ Departments, Corporations, Trusts, School Funds, Provident and
other funds of benevolent nature.
5. The customer must have a deposit account (source account) with our bank to issue a TDR.
6. Duly filled in Application for issuance of TDR and a cheque in favour of BAHL is provided by the
customer.
7. Deal is booked tenor wise through computer system in the customer’s term deposit account in the same
base number (Customer Profile number) of source account.
The proper renewal options are entered in the system. i.e. Principal only OR Principal and Profit, as
requested by the customer.
8. Computer generated entry would be
Debit: CD or PLS SB
Credit: PLS- TDR – (Tenor-wise)
9. *TDR is prepared, Protect-o-graphed and signed by two authorized officers.
10. Deliver TDR after getting signature of depositor on the counterfoil. The depositor is advised to keep it at
a safe place.
*As per INST/192/2019 & INST/126/2020, TDR is now printed through AL Habib Banking System.
However, TDR with special rate is prepared manually by using Security Stationery.

Payment of Term Deposit Receipt

TDRs may be repaid to depositor after or before maturity if fund is required urgently for meeting emergent
payments. Upon maturity, duly discharged original TDR is provided by the customer and Deal is reversed.
Principal alongwith profit is credited into customer’s source account from where the TDR was originally
issued. With Holding Tax and Zakat (if applicable) is deducted. Application of TDR is marked as “PAID on
________(date of payment)”. TDR is placed with vouchers after its processing and cancellation.

Rollover of Term Deposit Receipt

If at the maturity date the depositor does not come in for the encashment of his deposit, the deposit shall be
automatically rolled over for an identical tenor as initially deposited for.

In the absence of any instructions from the customer, Only the deposit shall be rolled over automatically by
the system not the profit. The profit shall be retained in the same account and is subject to collection by the
depositor.

Duplicate Issuance of Lost Term Deposit Receipt

Upon receipt of written request of the depositor regarding loss of a TDR, before issuance of duplicate
instrument following steps are taken:

 Obtain an "Indemnity Letter" with appropriate stamp value, signed by the depositor absolving the
Bank from all claims arising from possible malicious intents; and
 The information regarding loss of TDR is circulated through Principal Office
 Remark to the effect, "Duplicate issued in lieu of the original lost" shall be written visibly on the
face of the duplicate receipt.
 A duplicate TDR shall only be issued upon approval of the Zonal Office.

As per INST/192/2019 & INST/126/2020, above procedure is applicable to those TDRs which
are issued with special rates and are prepared manually by using Security Stationery.

===> In case of loss of system generated / printed Receipts reported by the customers, Branches can reprint
the receipt from AHBS and provide the same to the customers upon receipt of written requests signed by all

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account holders, Delivery of receipt(s) to an authorized representative must only be done if an authority
letter authorizing the specific person is received. The representative must produce his Original CNIC.

Premature Encashment of Term Deposits

It has been decided that from August 26th, 2013 Premature Encashment of Term Deposits will be handled
by Branches/Sub-Branches under the following mechanism:

Fixed Term Deposits (TDRs):

In case of premature encashment of TDRs, the profit rate on such TDRs will be calculated as per rate of last
nearest completed tenure plus profit on the remaining number of days deposit held as per savings account
profit rate at the time of booking of the Term Deposit (INST/182 & 194/2020). This mechanism will be
applicable on both existing as well as future deposits mobilized.

No penalty will be charged for premature encashment. For further clarification, please refer following table:

Sr. Tenure Existing If encashed Rate will be applied as per following criteria
No Rate before fixed
tenure
1 One Month 5.50% Before 1 moth Prevailing Saving Account rate will be applied for the
Deposit number of days deposit held.
2 Three Month 5.50% Before 3 moth Rate applicable to 1 month will be applied if encashed
Deposit after 1 month plus profit on the remaining number of
days deposit held as per prevailing savings account rate
3 Six Month 5.50% Before 6 moth Rate applicable to 3 month will be applied if encashed
Deposit after 3 month plus profit on the remaining number of
days deposit held as per prevailing savings account rate
4 One Year 6.10% Before 1 year Rate applicable to 6 month will be applied if encashed
Deposit after 6 month plus profit on the remaining number of
days deposit held as per prevailing savings account rate
5 Two Year 6.30% Before 2 year Rate applicable to 1 Year will be applied if encashed
Deposit after 1 Year plus profit on the remaining number of
days deposit held as per prevailing savings account rate
6 Three Year 6.55% Before 3 year Rate applicable to 2 Years will be applied if encashed
Deposit after 2 Years plus profit on the remaining number of
days deposit held as per prevailing savings account rate
7 Four Year 6.55% Before 4 year Rate applicable to 3 Years will be applied if encashed
Deposit after 3 Years plus profit on the remaining number of
days deposit held as per prevailing savings account rate
8 Five Year 6.55% Before 5 year Rate applicable to 4 Years will be applied if encashed
Deposit after 4 Years plus profit on the remaining number of
days deposit held as per prevailing savings account rate

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3.26 NEGOTIABLE INSTRUMENTS

All the commercial banks in Pakistan deals in negotiable instruments. These instruments are governed under
a Law called “The Negotiable Instruments Act 1881”. These instruments are easily transferable by one
person to another and hence are commonly used by individuals, businessmen, industrialists, government
departments and others.

Negotiable Instruments: Section-13 of Negotiable Instruments Act, 1881.

“A Negotiable Instrument means

a Promissory note, bill of exchange or a cheque
payable either to order or to bearer”

Promissory Note: Section-04 of Negotiable Instruments Act, 1881.

“Promissory Note
is an instrument in writing,
(not being a bank note or a currency note)
containing an unconditional undertaking
signed by the maker,
to pay on demand or at a fixed or determinable future time,
a certain sum of money only,
to, or to the order of a certain person, or to the bearer of the instrument”

In fact Promissory Note is a document of lending and it is made by borrower in favour of lender for the
payment of money on demand or at a future date. Promissory Note requires stamps as per Stamp Act..

Bill of Exchange: Section-05 of Negotiable Instruments Act, 1881.

“Bill of Exchange
is an instrument in writing,
containing an unconditional order
signed by the maker,
directing a certain person
to pay on demand or at a fixed or determinable future time,
a certain sum of money only,
to, or to the order of a certain person, or to the bearer of the instrument”

Bill of Exchange is instrument which is mostly used in trade transaction in which seller orders buyer to pay
him or a third party (may be banker of seller). Bills of Exchange may be drawn in which amount is payable
on demand or amount may be paid on a future date. If Bill of Exchange is drawn payable on demand it is
called as “Sight Bill of Exchange” if it is drawn for payment in future then it is called as “After Sight” or
“Usance Bill of Exchange, which requires ‘acceptance’ of drawee.

Cheque: Section-06 of Negotiable Instruments Act, 1881.

“Cheque is a bill of exchange

drawn on a specified banker
and not expressed
to be payable
otherwise than
on demand.”

Holder: Section-08 of Negotiable Instruments Act, 1881.

“The holder of a Promissory note, bill of exchange or cheque means the payee or indorsee who is in
possession of it or the bearer thereof, but does not include a beneficial owner claiming through a
benamidar.

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Generally, a holder is the person to whom an instrument is payable and has title to it.

Holder in Due Course: Section-09 of Negotiable Instruments Act, 1881.

“Holder in Due Course means any person

who for consideration
becomes the possessor of
a promissory note, bill of exchange or cheque
if payable to bearer, or the payee or indorsee thereof,
if payable to order, before it becomes overdue,
without notice that the title of the person
from whom he derived his own title
was defective”

1- A holder of a Negotiable Instrument is a “Holder holder in due course”

2- However, under certain conditions like “Fraud”, the burden of proof that he is a holder in due
course lie upon him.
3- Holder in due course means any person who for consideration becomes the possessor of a
negotiable instrument.

Payment In Due Course Section-10 of Negotiable Instruments Act, 1881.

“Payment in due course” means payment in accordance with the apparent tenor of the instrument in good
faith and without negligence to any person in possession thereof under circumstances which do not afford a
reasonable ground for believing that he is not entitled to receive payment of the amount therein mentioned.

Section-58 provides that no person is entitled to receive the amount of the instrument for following
reasons:

 A person is a finder of an instrument lost by another

 Has obtained it from the maker, drawer, acceptor or holder thereof by means of an offence
or fraud or for an illegal consideration.

Any person who claims it through such a person who is not entitled to receive its amount.

Since Section-10 describes the bankers obligation towards payment of instruments and should be always be
followed to avoid wrong payments.

The main contents of the Section 10 and explanation are as under:

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 In Accordance with the 1. Intention expressed on the face of the instrument
Apparent Tenor 2. Check for crossings and endorsements
In Good Faith  Honestly (Sincerely if any fact is known about loss of instrument or
regarding the payee’s title, the instrument should not be paid.
Without Negligence  Proper scrutiny to ensure the instrument in complete and regular
 Endorsements on Order instruments are regular in form
 Material alteration or mutilation
 Opening of crossing
To the Possessor of the  Actual possession of original cheque is necessary
Instrument  Importance of second signatures at the time of payment
 Presenter should be in a position to give a valid discharge
 If an instrument is payable to a particular person or order, and is
unendorsed by him, payment to any person in actual possession of
such an instrument will not be payment in due course.
Circumstances should not  Unusual circumstances e.g. unusually large amount or unusual gap in
Arouse any Suspicion cheque series etc.
 Official payees, e.g. Commissioner of Income Tax, or Official
Liquidators etc.
 Information about death of the customer or cheque initially reported
lost by payee

More About Cheques

Cheque is a common instrument of payment from the account. There are three parties in a cheque

i) Drawer who is an account holder of the bank

ii) Drawee which is a bank is required to pay the cheque and
iii) Payee is the beneficiary in whose name cheque is drawn he may receive payment of cheque or he can
transfer cheque to another person called as “Endorsee”.

Main features of a cheque are as under:

 Name of Drawee bank and branch
 Date of the cheque: A cheque is payable within six months from its issue date. After six months, it is
called stale or out of date cheque and cannot be paid unless drawer changes these date with his full
signature. If a cheque is presented before the date which is written on its fact, it is called post dated
cheque in other words a cheque is not payable before the arrival of date which is mentioned on its face
and it is also not payable after expiry of six months.
 Crossed or Open: If a cheque bears any type of crossing over its face it is called crossed cheque, if a
cheque does not bear any crossing on its face, it is called open cheque.
 Payee’s name: A cheque also has name of a person whom payment is to be made. If an account himself
want payment from his account then he can write words “ Self” or “Cash”.
 Bearer or Order; If word bearer is appearing after the name of payee then it is called Bearer cheque. If
word bearer is strike out then it becomes Order cheque.
 Account Number is also available on the face of the cheque.
 Amount in words and figure are also available on a cheque which should tally with each other. In case
these both are different then cheque is not paid.
 Signature of Drawer should tally with the record of the bank otherwise cheque is not paid.
 In case of any overwriting on the cheque the drawer is required to sign fully as authentication.
 Cheques may be paid in three possible ways – By Cash – By Transfer and Clearing.

Banker’s Draft: Section 85-A defines Banker’s Draft as “an order to pay money, drawn by one branch of a
bank upon another branch of same bank for a sum of money payable to order on demand, purports to be
issued by or on behalf issued by or on behalf of the payee, the bank is discharged by payment in due course”

Semi or Quasi Negotiable instruments: Certain documents of title to goods such as Bill of Lading,
Railway Receipts are also transferable by indoresement and delivery by customs and practices of trading
community these instruments are not covered under any Law but these are treated as negotiable instruments
in practice.

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Types of Cheques

A. Bearer Cheques are those in which word “Bearer” is not deleted. Such cheques are payable by cash to
any person without identification, but amount of cheque is heavy, then CNIC copy of presenter of
cheque is taken by paying branch for satisfaction purpose. The person who receives cash is required to
sign on back side of the cheque twice. Specimens of Cheques are given below:

B. Order Cheques are those in which word “Bearer” is deleted (cut down) or word “Order” is printed in
place of word “Bearer”. These cheques are payable by cash after identification of payee. The
identification may be given by another account holder of paying branch or an officer of that branch or
identification may be taken by obtaining CNIC of the payee.

C. Open Cheques these cheques do no have “crossing” on their faces. Crossing means drawing two
transverse (oblique) parallel lines with or without word “& Co” or any other word. Open cheques may
be paid by cash. If it is a bearer open then paid without identification upto a specified amount over that,
identification through CNIC or any other authentic official document is required for payment. If the
cheque is open but drawn as “Order” then identification of payee is required in all the cases.

D. Crossed Cheques are those on which crossing appears. Such cheques are not payable in Cash. These
cheques are credited into Beneficiary’s bank account.

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GOVERNMENT TAXES AND DUTIES

 Various Taxes and Duties are levied by the Central and Provincial Government on certain banking
transactions. These Taxes and Duties can be imposed, withdrawn or changed by the Government at
any time and communicated to all banks by the SBP. Therefore branches should be aware about the
current impositions and the rates applicable in their location / Province.

 Exemptions are allowed to certain organizations such as Govt Agencies and Local Bodies etc in
certain cases.

 Normally, following Taxes and Duties are levied on banking transactions:

Withholding Tax - WHT

This is a kind of Income Tax at source and is recoverable as prescribed in Finance Act. Withholding Tax is
recovered at the time of transaction and subsequently deposited with State Bank of Pakistan within the
prescribed period.

Federal Excise Duty-FED

FED on Fee/Commission charged by the banks on various services provided to the customers. It was
imposed by Federal Government in the Budget 2007-2008. It was revised under terms of the Finance Bill
2009, the recovery of Federal Excise duty to 16% from July 2009 (Instruction Circular No. INST/099/2009).

Stamp Duty

Stamp Duty is imposed on Negotiable Instruments, Receipts and some Legal Documents. Without evidence
of payment of this Duty, the document loses its legal status.

Stamp Duty is levied on many documents used in Credit and Foreign Exchange Departments, the details of
which are available in the Documentation Guide for Credit and Foreign Exchange Circulars.

Revenue Stamps

Revenue Stamps are usually of small denominations and can be purchased from authorized Stamp Vendors
and affixed on cheques and other instruments. This is the most common form of payment of Stamp Duty, not
involving banking procedures.

Stamp Papers

These are papers, especially printed with Govt. Stamp of various denominations and can be purchased
through authorized Stamp Vendors. These papers, of a required value, are used for preparing legal
documents, such as Guarantees, Indemnities etc.

Special Adhesive Stamps

In case a document is already typed or printed on plain paper such as a Letter of pledge or L/C Application
Form etc, which attracts Stamp Duty, then Special Adhesive Stamps, of the required value, can be purchased
and affixed on the document to make it legal.

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ATL - ACTIVE TAXPAYER’S LIST – FILER/NON-FILER
(INST/ 255 /2020 dated September 09, 2020 and INF/ 314/2015 dated August 11, 2015)

Definition of FILER / NON-FILER

A. "Filer" means a taxpayer whose name appears in Active Taxpayer’s List issued by the Board from
time to time or is a holder of a taxpayer’s card.

B. "Non-Filer" means a person who is not a filer.

What is "Active Taxpayer List"?

“Active Taxpayer List (ATL)” means the list instituted by the Board under Section 181A and includes such
list issued by the Azad Jammu and Kashmir Central Board of Revenue or Gilgit-Baltistan Council Board of
Revenue

Active Taxpayer List (ATL) is issued by Federal Board of Revenue (FBR) from time to time where
customer’s name, NTN / CNIC is mentioned who had filed their Tax Returns Online, i.e. Electronically at
the FBR Web Portal.

Those customers who are filing their tax returns manually are not included in Active Taxpayer List.

Timings defined by Federal Board of Revenue to issue Active Taxpayer List (ATL): The Federal Board of
Revenue shall upload Active Taxpayers List on every Sunday at 2400 hours at its website.

The following criteria will be used to check the FILER/NON-FILER status of a customer.

Type Criteria
Individual CNIC
Other than Individual NTN
(e.g. Sole Proprietorship, Partnership, Trust, Company, Association etc.)

In case of company whose tax return in not due to be filed: The company whose incorporation or formation
dates after the 30th day of June relevant to the tax year is included in Active Taxpayer’s List by FBR, if such
company has registered itself with FBR.

Updation of Active Taxpayer List in AHBS

AL Habib Banking System will update customer as “Filer” only if the below mentioned criteria is
incorporated in the profile of customer in AL Habib Banking System.

Type Criteria
Singly or Joint account CNIC No.
Proprietorship account CNIC No. or NTN
Minor account CNIC of Guardian
POC Card Holder POC No. or NTN
Afghan Citizens NTN
Partnership / AOP Partnership/AOP NTN
Company Company NTN

To resolve such queries, branches should incorporate the above criteria in AL Habib Banking System on
timely basis. Further, branch should also check existing customer’s profile at their end whether details are
correctly incorporated according to above criteria.

You can check Active Taxpayer List of FBR by clicking the following link:

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http://192.168.100.134:8014/

The above ATL List does not apply to FATA/PATA, Gilgit Baltistan and Azad Kashmir branches. Azad
Kashmir branches falls under Azad Kashmir Council which provides separate ATL List for their taxpayers.

FINANCE ACT 2020-21

(INST/209/2020 dated July 10, 2020)

Federal Board of Revenue has amended withholding tax rates in Income Tax Ordinance, 2001 via Finance
Act 2020-2021, which are applicable from July 01, 2020. Following are the updated / revised withholding
tax rates.

Section 151 –Profit on Debt

Section Description Filers Non-Filers Remarks (if any)

151 Profit on Debt 15% 30% -

* If the yield or profit paid is Rs. 500,000/- or less and account holder furnish a certificate during the tax
year in this regard, then the rate is 10% for Filers and 20% for Non-Filers.
Note: FBR explanatory circular is awaited in this matter.

Other Sections

Section Description Filers Non-Filers Remarks (if any)

154(1) Export Proceeds 1% 1% -

154(2) Indenting Commission 5% 5% -

Prize on Prize Bonds or Cross-

156(1) 15% 30% -
word puzzle

Exceeding Rs. 50,000 from all

231A Cash Withdrawal - 0.6% bank accounts in a single
day.

Banking Transactions
231AA - 0.6% Exceeding Rs. 25,000 per day
(against cash)

4% of value Applicable on both shariah

Advance tax on private motor
231B(1A) - of motor compliant or conventional
vehicles (leasing)
vehicle leasing.

236B Purchase of Air ticket (Domestic) 5% 5% -

Advance tax on payment of fee

236I - 5% -
to an educational institution

Advance tax on purchase of

236K 1% 2% On fair market value amount
immovable property

Banking Transactions Exceeding Rs. 50,000 per day

236P - 0.6%
(otherwise than cash) from all bank accounts.

Gross amount remitted abroad

236Y through credit, debit or prepaid 1% 2% Advance Tax
cards

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Section 101AA:

A new clause has been inserted in Income Tax Ordinance, 2001, due to which the provisions of following
sections will not apply to a Pak Rupee account to the extent of foreign remittances credited into such
account during that tax year.

 Section 231A (Cash withdrawal)

 Section 231AA (Banking Transactions (against cash)
 Section 236P (Banking Transactions (otherwise than cash))

INST/ 014 / 2015 - Bank Accounts falling under tax free jurisdiction (FATA/PATA)

Branches are informed that in addition to any other procedures, following procedure should be
followed by FATA/PATA branches while operating/opening an account.

1. A customer who is resident of FATA/PATA and wants to open an account in a FATA/PATA

branch, the branch should check CNIC No. and Permanent Residential Address of said customer in
order to confirm customer’s residence status.

2. Such branch, if not satisfied, can also make physical verification of customer's permanent residential
address and after verification, said customer will be treated as resident of FATA/PATA and no
withholding tax will be deducted on such account. In case of non-resident of FATA/PATA,
withholding tax will be deducted as per law.

3. In case of individuals, whose business is established in FATA/PATA area and wants to open
business account in FATA/PATA branch. The branch should verify by visiting such business
address. After such verification, such account will be treated as resident and no withholding tax will
be applicable. If not verified, such account will be treated as non-resident and withholding tax
should be deducted.

INST/ 014 /2020 - Bank Accounts falling under tax free jurisdiction (FATA/PATA)

Code Branch Authority

2014 MINGORA FATA / PATA
2017 TIMERGARA, LOWER DIR FATA / PATA
2018 PARACHINAR, FATA FATA / PATA
2020 DARGAI, MALAKAND AGENCY FATA / PATA
2022 SHAHKAS, KHYBER AGENCY FATA / PATA
2025 SOWARI FATA / PATA
2029 MINGORA ROAD, TOOTKAY FATA / PATA
2030 KHAR, BAJAUR AJENCY FATA / PATA
2031 BATKHELA, MALAKAND FATA / PATA
2034 KALAKOT FATA / PATA
2039 CHITRAL FATA / PATA
2042 SAKHAKOT FATA / PATA
2045 BAMPOKHA FATA / PATA
2047 WARRI, DISTRICT UPPER DIR FATA / PATA
2049 SADDA, KURRAM AGENCY FATA / PATA
3010 LORALAI FATA / PATA
3015 ZHOB FATA / PATA
3016 MUSLIM BAGH, QILLA SAIFULLAH FATA / PATA
3023 RAKHNI, DISTT. BARKHAN FATA / PATA
5533 IB - MINGORA FATA / PATA

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Rules for deduction of Withholding Tax on Cash Withdrawal

A- Cash Withdrawal from FATA / PATA Branches

Account Holder of Resident of Withholding Tax Deduction

FATA / PATA Branches FATA / PATA
Yes Yes No
No Yes Yes
Yes No Yes

B- Cash Withdrawal from Branches Other Than FATA / PATA

Account Holder of Resident of Withholding Tax Deduction

FATA / PATA Branches FATA / PATA
Yes Yes No
No Yes Yes
Yes No Yes

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Recovery of Bank Charges

Bank recover charges from their customers for certain banking services provided to them. The Schedule of
Charges - SOC contains rates of commission/fee recoverable from customers for various International and
Domestic Banking Transactions.

Schedule of Bank Charges is prepared every six months, effective from 1st January or 1st July every year. It
is circulated to the branches by means of instruction circulars and for public on Bank’s website. SOC is also
made available to customers through Branches’ Notice Board and on request by the customer.

These charges differ from bank to bank and the competitive rates coupled with standard of efficiency in
providing the services, is an important element in marketing efforts of a bank.

Some banks charge a half yearly fee for maintaining accounts, if the balance in the account is below a
definite amount and in considered non-remunerative for the bank, termed as Incidental Charges or Ledger
Fee. (We do not recover any such charge from our customers).

Markup charged on Advances is not considered among Bank Charges and thus these are not mentioned in
the Schedule of Charges. These rates are communicated to the branches by Instruction Circulars similar to
the rates of profit payable on PLS Deposit Accounts.

Automatic recovery of Charges

For most of the banking transactions, where a fee or commission is recoverable from the customer, the AL
Habib Computer Software has the facility to calculate the charges and automatically pass the necessary
entries.

Manual recovery/calculation of Charges

In case of need and where bank charges on a particular service are not handled on computer, the charges are
to be manually calculated as per Schedule of Charges of the Bank, for that period.

Advice to Customer

In case of bank charges recovered by debit to customers account he should be advised accordingly. For
many transactions the Debit Advices are produced automatically by the computer. Care is to be taken that
these Advises are invariably dispatched or delivered to the customer promptly.

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GUIDELINES FOR ZAKAT APPLICABILITY, DEDUCTION AND EXEMPTION.

Instructions Circular INST/061/2015 supersedes all instructions issued earlier in the matter of Zakat
deduction, collection, exemption and submission.

Zakat comprises of some percentage of assets which is required to be paid annually under the Islamic Law
for the use of charitable and religious purpose. As per Zakat and Ushr Ordinance, 1980 banks are required to
act as Zakat Collection Agencies (CZA) and responsible to collect/deduct Zakat amount from the assets of
customers maintained with it in the form of accounts, certificate etc.

Zakat deduction is subject to application of “Zakat Collection and Refund Rules, 1981 issued by
Government of Pakistan (GoP). After the constitutional amendments passed under 18th Amendment Bill,
Zakat has been classified as a provincial revenue source.

NISAB is the minimum amount/wealth for a Muslim net worth to be obligated for Zakat. The Secretary of
Zakat Cell, Ministry of Religious Affairs (MORA) Islamabad is responsible to notify the Banks about the
NISAB Amount for the consideration of account holders to be considered for the deduction of Zakat on the
valuation date i.e. 1st Ramadan-Ul-Mubarak.

Zakat is applicable on all PLS Savings Accounts, Term Deposit Savings Accounts and all other similar kinds
of accounts.

Deduction of Zakat is applicable to all accounts of Muslim SAHIB-E-NISAB customers who did not apply
for Zakat exemption and/or not fall under the type of customers (individual/organizations) which are
exempted from compulsory Zakat deduction.

Sr.# Assets Rate and Basis for Computing the Deduction Date
amount to be deducted as Zakat
01 Saving Bank 2.5% of the amount standing to the As notified by the Administrator
Accounts credit of an account at the General for the Zakat year.
commencement of the day on the
Valuation date.
02 Notice Deposit 2.5% of the face value of a receipt or the The date on which the first
Receipts amount standing to the credit of an return is paid or the date of
account. As the case maybe. encashment/withdrawal, which
ever shall be earlier in the Zakat
At the commencement of the day on the year.
Valuation Date, in each Zakat year.
03 Fixed Deposit 2.5% of the face value of a receipt or a The date on which the first
Receipts certificate, or the amount standing to the return is paid, or the date of
credit of an account, as the case may be. encashment/redemption/
withdrawal, whichever shall be
As at the commencement of the day on earlier in the Zakat year.
the Valuation Date, or once at the time of
encashment, whichever shall be earlier in
the Zakat year.

Following types of customer’s account are exempted from Zakat Deduction:

 Non-Muslim Customers:
 Foreign Nationals (Not a Citizen of Pakistan) Customers:
 Companies with less than 50% Shareholding or Beneficial Ownership of Muslim Citizens of
Pakistan:
 Customer claiming exemption on grounds of faith and fiqh (CZ-50):
 Not Sahib-e-Nisab Customers:
 Current Accounts-all types:
 Foreign Currency Account:
 Deceased Customer’s Account:

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Frozen Accounts:
The freezing status of an account is to be established through an attested true copy of the order of the
competent authority for freezing such account. If and when account of the customer de-freezes totally or
partially, it will become subject to the Zakat deduction at source from the date and to the extent of de-
freezing.

Joint Assets/Accounts:
In case of Joint account, if only one party has submitted CZ-50, Zakat exemption will not be applicable on
the account. Therefore, in case of joint account, Zakat Declaration Form i.e. (CZ-50) should be obtained
separately from all joint account holders.

Submission of Zakat
The branches transfer the collected amount of the Zakat to the Multan Main Branch through IBCA for
deposit it into the Central Zakat Account (CZA) along with a return on the Prescribed Format.

Total amount of Zakat deposited to Multan Main Branch is submitted after consolidation to the nominated
office of the State Bank of Pakistan (SBP) under the head “Central Zakat Account No. 8-Central Zakat
Fund”.

All Zakat Accounts are maintained in terms of full ―Rupee. Therefore, the amount of Zakat to be deducted
is rounded off to the nearest rupee. The fraction above fifty paisas shall be charged as next higher rupee and
less than fifty paisa shall not be charged.

Zakat Declaration Certificate (CZ-50):

 It is to ensure that the clear instruction is being given by the customer in respect of deduction of
Zakat on Account Opening Form (AOF).

 If customer wants exemption from compulsory Zakat deduction, on the basis of account holder’s
Faith and/or Fiqah, branches collect/receive the CZ-50 Form on Judicial stamp paper of appropriate
value (in original or photocopy bearing attestation of a Notary Public/Oath Commissioner).

 The CZ-50 Form is obtained from the customer at the time of account opening or after the account
opening but prior to the 1st of Shaban-ul-Muazzam. The Declaration Form must be signed,
witnessed, sworn, and received at least 30 days before the 1st of Ramazan-ul-Mubarak.

 If customer opens their accounts in the month of Shaban-ul-Muazzam, accounts can be exempted
from compulsory deduction of Zakat. However, date of the CZ-50 should be prior to the date 1st of
Shaban-ul-Muazzam of same year.

 In case of Joint account holder, Zakat Declaration Form i.e. CZ-50 should be obtained separately
from all joint account holders.

 In case of Minor Account, Guardian is required to sign on Zakat Declaration Form.

 It would be ensured that the heading of the Zakat Declaration Form is as following:

“Under the provision to sub-section (3) of Section I of the Zakat and Ushr Ordinance, 1980 (XVIII of
1980) and rule 20 of the Zakat (Collection and Refund Rules, 1981 sworn on oath before:”

The designated officer of the Branch will ensure/perform the following:

i. The CZ-50 is either original or photocopy bearing original attestation of a Notary Public/Oath
Commissioner.

ii. All required particulars of Deponent i.e. Name, Father Name, Address etc. are properly given on the
form and aligned with the Bank record.

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 iii. All required details of the witnesses i.e. Name, Father’s Name, Address, Signature etc. are available
on the Form.

iv. Signature available on CZ-50 is aligned with the Bank record (as per AOF)

v. Give acknowledgment on the both i.e. customer copy and backside of original Zakat Declaration
Form i.e. CZ-50

vi. After scrutinizes the form, Branch will send it to the CPU on an urgent basis and mark
acknowledgment through CPU tracking systems in Lotus Notes before dispatching the documents to
the CPU.

vii. The designated officer of Centralized Processing Unit (CPU) shall mark special condition ―Zakat
Exempted‖ on customer’s account in AL Habib Banking System.

viii. Designated Officer of the Branch shall monitor the status of the account in Bank AL Habib System
to ensure that the condition of ―Zakat Exempted‖ has been marked in the system and no
discrepancy identified during processing at CPU.

ix. Designated Officer of the Branch shall allot a serial number to each CZ-50 Form and record the
same in the Zakat Declaration Register.

x. Designated officer shall verify the Deponent signature with pencil on Zakat Declaration Form i.e.
CZ-50.

xi. The allotted number should also be marked at the top right corner of the declaration form CZ-50 for
control purpose.

xii. After marking of Zakat exemption in AL Habib Banking System, Zakat Declaration Form i.e. CZ-50
is scanned and uploaded on the Document Management Tool (DMT) and filed in respective year
wise Branch folder.

xiii. A declaration form i.e. CZ-50, submitted to the Branch in one Zakat year shall continue to be valid
for so long as the Zakat declaration and the assets of the customer, liable to Zakat, remain in the
custody of the Branch.

Chronological Order of Stamp paper should be followed, such as:

 Date of purchase of CZ-50 should be first, it should be 30 days before 1st of Ramazan
 Date of signing of CZ-50 should be after the date of purchase
 Date of attestation by Notary Public should be on or after the date of signing of CZ-50.

Refund of Zakat:

Account Holder/Customer is required to submit an application for review to the Branch, on form CZ-04,
within ninety (90) days of the Deduction date.

The application for the refund can be submitted on a plain paper.

If a person seeking refund on the ground of not being Sahib-e-Nisaab, may file an application for review
within one hundred and five (105) days of the Deduction Date.

The Branch on receipt of application of refund shall enter the relevant details of the same in Zakat Refund
Application Register and proceed to dispose of the Zakat Refund Application on merit, within fifteen (15)
days of the receipt of the application.

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