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Report Title
Car Financing and Cheque Clearance
Submitted to:
Mr.Farhan
Submitted by:
Waleed Aslam (51)
Ali Sufian(55)
Izhar Ahmed (56)
BBA4th Semester
Submission Date: 12-06-2014

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Acknowledgments
I would like to express my gratitude to the department of management sciences
for giving me the opportunity to visit the bank.
I would also like to acknowledge my debts to those officers of Askaribank who
have been extremely helpful for me.
Firstof all I would like to thank my teacher. They havebeen a permanent source
of encouragementand guidance. Their helpful nature did not restrict them to the
promises to the branch but extended to any place and any matter I needed their
supporton. They give me a comprehensivesummarization of the documentary
credit procedure.
I would also acknowledgemy debt to all the staff of Askaribank limited at
Bahawalnagar branch for the knowledgethey provided in a very frank and casual
manner. Due to their gift of wittiness the time of my work that spent with them
was mostinteresting and memorable one for me.

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Dedication:
For Allah, Who gave everything well in life
Including family, teachers and guiding staff of bank

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Askari Bank
Chairman of the Board of Directors
Muhammad Mustafa Khan is the Chairman of the Board of Directors.
History:
Incorporated in Pakistan on October 9, 1991, as a public limited company. It
commenced operation on April 1, 1992, and is principally engaged in the business of
banking, as defined in the Banking Companies Ordinance, 1962. The Bank is listed on
Karachi, Lahore and Islamabad Stock Exchanges.
Work:
Since inception, the bank has concentrated on growth through improving service
quality, investment in technology and people, utilizing its extensive branch network
which includes Islamic and Agricultural banking.
Network:
Askari Bank has expanded into a network of 265 branches, including 31 dedicated
Islamic banking branches, and a wholesale bank branch in Bahrain. A shared
network of 4,173 online ATMs covering all major cities in Pakistan.

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Awards and recognitions
 The Asian Banker awarded twice as “Best Retail Bank in Pakistan” in 2004
and 2005.
 Askari Bank also has been given the “Best Consumer Internet Bank” award
by Global Finance magazine for the years 2002 and 2003
Vision:
To be the bank of firstchoice in the region.
Mission:
To be the leading privatesector bank in Pakistan with an international presence
delivering quality servicethrough innovative technology and effective human
resources managementin a modern and progressiveorganization cultureof
meritocracy, maintaining high ethical and professionalstandards, whileproviding
enhanced value to all our stake-holders, and contributing to society.
Core values:
We are caring aboutcustomer.

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Askari Bank Car Financing:
Car Financing Products:
ASK4Car is Askari bank’s car leasing solution and can be used to finance new and
used cars.
AskariBank car financing is a service for its valued customers as well as to the
customers which are outside the bank or that are not the bank customers. By
availing the car financing service, customer can purchasenew as well as used car
as per his/her requirement. Car finance is required by both private individuals and
businesses. Thebanks chargesome interest rate for car financing and it depends
on certain terms and conditions.
Car financing is a complete subsector of personalfinance with numerous different
products available. These include a straight forward car loan, personalcontract
(car leasing). Thereforecar finance is not limited to vehicle leasing. These
different types of car financing are possiblebecause of the high residual value of
cars and second hand cars market.

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Criteria and Conditions for car financing:
Criteria for car financing include all the standards which are determined by the
bank. Different banks havedifferent criteria for its customers. Askaribank’s
criteria include the following points.
 Customer should have its own business or corporation
 Business or corporation should be registered
 Customer should have bank account
 If customer is job holder then he should earn Rs. 50,000 per month
 Customer should not be involved in bank fraud
 Customer should not be using any other loan
 Pakistan citizenship
 Six months bank account statement
 Fresh copy of utility bills (phone, gas, electricity)
 Customer should not be a criminal
 Salary slip required
 Business ownership documents

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Amount of financed loan:
The amount of financed loan varies from person to person. If the person is
an established businessman then he is eligible for a heavy loan and if the
person is a job holder then he can take small loan for the car. One more
point is that the amount of interest is based on the amount of loan which is
being granted by the bank to the customer, bigger the loan big will be the
interest and vice versa. There is no specified limit for the loan.
Interest rate:
Interest rate is the amount of extra money which the banks charge on
financed loan. Usually the Askari bank charges 14-15 % of the total amount
which is exclusive of all the taxes, by adding all taxes it reaches upto 17 % of
the total amount. The interest rate depends on the amount of the loan and
the time duration for which the loan is being taken by the customer. The
interest rate varies from customer to customer, if customer is outsider then
he will be charged 15% and if customer is bank employee then he will be
charged 5%. Interest rate also depends on the down pavement if the
customer wants to make.
Approval method:
Approvalmethod for the car financing is very simple. Customer should visit
the bank and providethe required documents and then his requestwill be

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entertained by the branch manager and after verification of documents the
request will be forwarded to the regional head who will make final
decision.
Legal documentation:
The legal documents which are required by bank are as follows.
 Police clearance report
 Completely filled signed application form
 Attested photocopy of CNIC of applicant and references
 Attested photographs
 Fresh copy of utility bills
 Specimen signature verified by the bank
 Six months bank statement
 Undertaking form
 Proof of business or Ownership documents
 Wealth statement
 Verified CNIC of guarantor
 Guarantor worth statement
 Salary slip

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Time period to return loan:
Time to return loan is not specified. The customer can return loan in
monthly installments depending upon the amountof loan. Time to return
loan can be 3, 4, 5, 7 or 10 years depending on the customer.
If the customer is bank employee then the installments will be deducted
fromhis salary on monthly basis.
Services given by the bank to car financed customers:
 Easy installments
 Built in insurance
 Built in tracking system
 Valued customers are offered low markups

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What is cheque?
Cheque is an instrument in writing containing an unconditional
order, addressed to a banker, sign by the person who has
deposited money with the banker, requiring him to pay on
demand a certain sum of money only to or to the order of certain
person or to the bearer of instrument
Types of cheque
1. Bearer Cheque
When the words "or bearer" appearing on the face of the cheque are not
cancelled, the cheque is called a bearer cheque. The bearer cheque is payable to
the person specified therein or to any other else who presents it to the bank for
payment. However, such cheques are risky; this is because if such cheques are
lost, the finder of the cheque can collect payment from the bank.
2. Order Cheque
When the word "bearer" appearing on the face of a cheque is cancelled and when
in its place the word "or order" is written on the face of the cheque, the cheque is
called an order cheque. Such a cheque is payable to the person specified therein
as the payee, or to any one else to whom it is endorsed (transferred).

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3. Uncrossed / Open Cheque
When a cheque is not crossed, it is known as an "Open Cheque" or an "Uncrossed
Cheque". The payment of such a cheque can be obtained at the counter of the
bank. An open cheque may be a bearer cheque or an order one.
4. Crossed Cheque
Crossing of cheque means drawing two parallel lines on the face of the cheque
with or without additional words like "& CO." or "Account Payee" or "Not
Negotiable". A crossed cheque cannot be encashed at the cash counter of a bank
but it can only be credited to the payee's account.
5. Anti-Dated Cheque
If a cheque bears a date earlier than the date on which it is presented to the bank,
it is called as "anti-dated cheque". Such a cheque is valid up to three months from
the date of the cheque.

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6. Post-Dated Cheque
If a cheque bears a date which is yet to come (futuredate) then it is known as
post-dated cheque. A postdated cheque cannot be honored earlier than the date
on the cheque.
Cheque Clearing Cycle
Define:
The money is not release until the cheque is verified by the bank in all respect.
Then first exchanged by banks after withdrawing fromcheque issuer's account,
the receiving bank pays the depositor in its account.
This process is call cheque clearing process.
In simple terms if morethan one bank is involved then it has to go thru clearing
house.
In caseof dealing with, out of the country bank it needs to go thru reservebank of
both the countries, besides going thru clearing house.
If you do not get the money after depositing the cheque then it comes back to
you as unclear check with reason, such as no such account or insufficient fund or
signaturecannot be verified or stopped payment initiated by issuer.
Most banks will release the money immediately if you are in good standing

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with them, subjectto clearing of check, if it does not clear you are required to pay
back the money plus the interest on the money for using it, if you do not have an
account with that bank, if you havean account then money is taken fromthat
account and you are notified with unclear check notice.
How long does a cheque take to clear in other banks
and other states?
If the cheque belongs to another bank but belongs to the same city - 2 days (Max)
If the cheque belongs to another bank but belongs to a different city but same
state - 2 to 3 days (Max)
If the cheque belongs to another bank and belongs to a different state - 3 to 5
days (Max)
All the durations above are under the assumption that the cheque issuing account
has cash to pay for it. The bank may not clear the cheque if the account doesn't
have funds for it.
Memorandumof cheque clearance
A document that is used if the cheque is dishonor it is given to the person who is
the holder of that cheque it is signed by the bank manager and that person show
that memo in the court. It is a legal document that has value in the court.

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Reasons for not clearing cheque
 Insufficientbalance.
 Payment stopped by drawer.
 Exceeds arrangement.
 Amount in words and figurediffers.
 Cheque is postdated.
 Crossed chequemust be presented by a bank.
 Drawer’s signaturerequired differs.
 Drawer deceased.
 Cutting requires drawer’s fullsignature.
 Crossing stamps requirecancellation.
 Crossing bank endorsementstamp required.
 Not drawn on us.
Reasons for Cheque bouncing
A check that cannot be processed becausethe writer has insufficient funds. A
bounced check will often be returned to the writer along with a penalty fee for
non-sufficientfunds. "Passing"bad checks is illegal.

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My bank you'd have to pay the bad check fee which at my bank is 35.00 per bad
check, and then the servicefee for covering which is 12.00, plus the amount of
the check!!!