40. KIM Handbook ver01

HAND BOOK – KIM I (Ver. 6.0)BRANCH BANKING OPERATIONS Operations Department Version No. 1 Novemnber 2016

Operations Department, KMBL APPROVAL SHEET – KIM – I HANDBOOK, VERSION 1KIM – I Handbook; Version 1 Page 2 of 43

Operations Department, KMBL DOCUMENT CONTROL SHEET – KIM – I HANDBOOK, VERSION 1Initially Formulated: Version 1 in November, 2016Revisions:S. No. Revision No. Revision Date 1. 2. 3.KIM – I Handbook; Version 1 Page 3 of 43

Operations Department, KMBLCONFIDENTIALITY CLAUSENo part of this handbook may be reproduced in any material form (including photocopying orstoring in any medium by electronic means and whether or not transiently or incidentally tosome other use of this handbook) without the written permission of the copyright holder. Theinformation contained herein is proprietary to KHUSHHALI MICROFINANCE BANK LTD. (formerlyKhushhali Bank Ltd.), and is for internal distribution only.DISCLAIMERThis document is not exhaustive and is just to elaborate the documentary requirements as perSBP and Bank’s governing Manual. Apart from this process manual, Khushhali InstructionsManual (KIM), Regulatory requirements and SBP guidelines should be referred on the relevantsubject.KIM – I Handbook; Version 1 Page 4 of 43

Operations Department, KMBL Table of ContentsS. No. Description Page No.1.2. Introduction ...................................................................................................63.4. Scope .............................................................................................................. 65.6. Responsibilities ..............................................................................................6 6.1. Abbreviations .................................................................................................7 6.2. 6.3. Procedure.......................................................................................................8 6.4. 6.5. Tabular Processes...........................................................................................8 6.6. 6.7. Banker’s Cheques Handling............................................................................8 6.8. 6.9. Call Deposit Receipts (CDRs) Handling.........................................................13 Cheque Book Handling.................................................................................19 Counter Cheques Handling ..........................................................................22 Atm/ Debit Cards Handling ..........................................................................23 Vault and Cash Management.......................................................................26 Cash Management (CMD)............................................................................34 Term Desposits.............................................................................................37 Account Opening Procedure ........................................................................41KIM – I Handbook; Version 1 Page 5 of 43

Operations Department, KMBL1. INTRODUCTION To add further reader-friendliness, conciseness and concreteness in Khushhali Instructions Manual – I (KIM – I, Branch Banking Operations), a hand book has been formulated for major/ frequent processes taking place at branch level. This handbook contains detailed, stepwise, drilled down procedures of various branch banking processes and is aimed to:  Enhance branches’ understanding of operational processes.  Reduce branches’ operational queries and ambiguities.  Bring in clarity of roles and responsibilities of different branch staff in various processes.  Enable staff to proactively gauge inherent process risks and take measures to mitigate them. This handbook is an extension of KIM-I (version 6.0) for branch’s ease and convenience, and does not supersede the existing policies, procedures or instructions issued from time to time.2. SCOPE This document is intended to address the branch level end users who are involved in day-to-day branch operational processes (i.e. BM, OM, CSO and CO). The document contains detailed processes and procedures of the following activities, which are frequently carried out at the branches: 1. Cheque Book 2. ATM Debit Card 3. Vault and Cash Management, including CMD 4. Account Opening 5. Bankers’ Cheques 6. Call Deposit Receipts 7. Term Deposits Processing3. RESPONSIBILITIES Branches would ensure meticulous compliance to the instructions/ procedures mentioned in this hand book and KIM – I (version 6.0). Although all the efforts have been made to make KIM and this hand book comprehensive and concrete, yet in case of any queries and ambiguities regarding any procedural/ operational matter, branches are advised to route the matter to their respective CMOs through ACOs for opinion and guidance.KIM – I Handbook; Version 1 Page 6 of 43

Operations Department, KMBL4. ABBREVIATIONS ACO: Area Manager Operations AOF: Account Opening Form BC: Bankers Cheque BE: Bank Essentials BM: Branch Manager BTU: Business Transactions Unit CAO: Credit Administration Officer CBC: Call Back Confirmation CDD: Customer Due Diligence CDR: Call Deposit Receipt CMD: Cash Management Desk CMO: Cluster Manager Operations CNIC: Computerized National Identity Card CO: Cash Officer CRR: Cash Recovery Receipt CSO: Clients Services Officer DCRS: Daily Cash Receipt Summary EDD: Enhanced Due Diligence HRB: Head Retail Banking KIM: Khushhali Instructions Manual KYC: Know Your Customer LCRR: Late Cash Receipt Register LO: Loan Officer NARA: National Alien Registration Authority Card NDM: National Distribution Manager NICOP: National Identity Card for Overseas Pakistanis NIFT: National Institutional Facilitations Technologies (Pvt.) Limited OM: Operations Manager POC: Pakistan Origin Card SNIC: Smart National Identity Card SSC: Specimen Signature Card TAT: Turn Around Time TD: Term Deposit TDAF: Term Deposit Application FormKIM – I Handbook; Version 1 Page 7 of 43

Operations Department, KMBL5. PROCEDURE Detailed procedures of the processes mentioned in Section 2 above have been chalked out in the section below for branch’s ease and understanding.6. TABULAR PROCESS Tabular processes of all the activities mentioned in section 2 are mentioned below.6.1. BANKER’S CHEQUES HANDLING Banker’s Cheque (BC) is a non-negotiable instrument issued by KMBL on behalf of customers. Banker’s Cheque is a firm commitment of payment upon presentation/demand. BC is part of branch security stationery and should be kept under dual custody and issued in serial wise order. BCs which are outstanding for more than ten (10) years, and if meeting relevant criteria, must be transferred to Unclaimed Balances which will be surrendered to SBP. At branch level, BCs undergo four major processes, namely: Issuance, encashment, revalidation and cancelation. Separate procedures of each of the abovementioned processes are listed below: 6.1.1. BANKER’s CHEQUE RECEIVING AT BRANCHES – CLAUSE 15.3.5 OF KIM-1Steps Description Responsibility 1. Printed banker’s cheques will be received at branch directly from Vendor 2. Vendor. CSO and OM Custodian of BCs at branch will jointly receive and open the packed/ 3. envelope containing Banker’s cheques. OM 4. OM will physically verify received BCs with requisition slips and CSO 5. delivery sheet received from vendor, prior handing over them to CSO and OM CSO. CSO to ensure serial wise printing of BCs. Banker’s Cheques would be kept in dual custody under dual custody, along with other security stationery items. 6.1.2. BANKER’s CHEQUE ISSUANCE – CLAUSE 9.1.1 OF KIM-1 Banker’s Cheque can be issued against Cash, customer account debit or internal account debit (branch GL against vendor payment).Step Description Responsibility Customer visits the branch and requests the issuance of BC, against Customer1. cash or account debit, by filling BC Application (Annexure KIM – 0080).2. CSO would receive the application from customer and verify the CSOKIM – I Handbook; Version 1 Page 8 of 43

Operations Department, KMBL following: CO/ CSO a. Customer Signatures/ Thumb impression from SSC b. Any Cutting/Overwriting on cheque or application has been authorized by customer c. Beneficiary details i.e., name, CNIC/ SNIC #, NTN # (for corporate entities), complete address & contact numbers etc. d. Purpose of requesting BC Issuance e. For walk-in customers (issuance against cash), an original seen copy of CNIC/ SNIC must be retained and attached with BC Application along with applicants name, complete address and contact number. In case of BC issuance against cash, CSO would direct the customer towards the Cash Officer, who would: i. Count cash and verify that all the notes are genuine. Total cash received must be equivalent to BC amount plus bank/ government charges. ii. CO would post necessary transactions in System in line with Annex-KIM0081 in KIM – I Version 6.0, and stamp the BC Application as ‘Cash Received’.3. In case of BC issuance against cheque/ account debit, CSO would verify that: i. The cheque is in favor of KMBL. ii. Cheque is not stale/Post dated. iii. Customer’s thumb impression/ signature are matching with those in SSC. iv. Check the account number and that the account balance is sufficient enough to cover requested BC amount and applicable charges as per SOC. v. Status of account is normal, i.e. account is not dormant/ blocked or closed.4. BC Application would be forwarded to OM for contents checking of OM application and approval to proceed with BC printing.5. After documentary approval, CSO will initiate BC processing in CSO system. If applicable, request of transaction authorization will be forwarded OM6. to OM, who will authorize the transaction in system and instruct CSO for printing of BC. CSO will print BC through system and would recover applicable CSO7. charges and applicable taxes in line with Annex-KIM0081 of KIM-I, version 6.0. CSO will forward the printed BC to OM/BM for quality check. Once OM8. quality and contents are checked, authorized signatories (refer above) will sign printed BC as per mechanism below.9. There are two categories of signatories in branches: Authorized a. Authorized Signatory A Category SignatoriesKIM – I Handbook; Version 1 Page 9 of 43

Operations Department, KMBL b. Authorized Signatory B Category Authorized signatories on the printed BC would be as follows: BC exceeding Rs. 500,000/- will be signed jointly by two “A” category signatories and BC for less than Rs. 500,000 will be signed by one member from “A” and one of “B” category. Customer will be handed over printed and signed BC under proper CSO10. acknowledgement. Signature of customer will be verified by CSO prior delivery of BC.11. Acknowledged BC Application will be filed in Funds Transfer Request CSO File maintained at branch. 6.1.3. BANKER’s CHEQUE ENCASHMENT – CLAUSE 9.1.2 OF KIM-1Encashment of Banker’s Cheque can be through either inward clearing or through internalaccount transfer.Separate processes for both the scenarios are narrated below: 6.1.3.1. ENCASHMENT THROUGH INWARD CLEARINGStep Description Responsibility1. CSO receives inward clearing instruments at KMBL Branch from CSO NIFT/ designated MCB Branch. After segregating different types of instruments, CSO performs the CSO following checks on BC: a. Authenticity of BC instrument by checking inbuilt security feature through under UV lamp/IV markers. A stamp confirming “UV/IV check confirmed” would be affixed2. on reverse of BC for such cases. b. Validity of the instrument i.e. date, signature of authorized signatories, amount in words/ figures match, quality of instrument, Crossing, cutting/over writing, stop payment, etc. c. Beneficiary’s Bank Stamps (clearing, endorsement etc.)3. CSO will post inward clearing transaction into system as per CSO instructions mentioned in KIM-I Version 6.0 Annex-KIM0081.4. If required, transaction would move to OM for authorization, who OM will review the transaction and authorize the same in the system. The status of all cleared/return cheques will be intimated to CSO/ OM5. respective NIFT Office or MCB branch accordingly in line with instructions mentioned in Chapter 10 of KIM-I, Version 6.0, Section 10.1 on page 100. Cleared instruments will be the part of daily transactions vouchers CSO6. whereas uncleared/ returned instruments would be handed over to NIFT/ MCB for further processing at their end.KIM – I Handbook; Version 1 Page 10 of 43

Operations Department, KMBL 6.1.3.2. ENCASHMENT THROUGH ACCOUNT TRANSFERStep Description Responsibility1. Customer/ beneficiary will visit KMBL branch for transfer of BC Customer amount to his/ her deposit account. Customer will fill Deposit Slip, incorporating details of his/ her Customer2. deposit account (local or online), BC number, amount etc. Branch staff may facilitate in filling. Customer will submit the deposit slip along with BC to CSO, who CSO would check the particular of instrument i.e.: a. Authenticity of BC instrument by checking under UV lamp and IV markers (a stamp confirming “UV/IV check3. confirmed” would be affixed on reverse of BC for such cases). b. Validity of the instrument such as date, signature of authorized signatories, amount in words/ figures match, quality of instrument, crossings, cutting/ over writing, stop payment, endorsements etc. CSO acknowledges the receipt of BC by affixing ‘Cheque Received’ CSO4. stamp and signature on deposit slip (both on original and carbon copy).5. Original deposit slip would be kept for branch record while carbon CSO copy would be handed over to the customer as acknowledgement.6. CSO will process the BC encashment – account credit transaction in CSO system as mentioned in KIM-I, Version 6.0, Annex-KIM0081. If required, the transaction would be moved to OM for OM7. authorization, who would review and authorize the transaction into the system.8. All cleared instruments will make a part of daily transactions OM vouchers. 6.1.4. REVALIDATION OF BANKER’s CHEQUE – CLAUSE 9.1.4 OF KIM-1A Banker’s Cheque is payable within six months from the date of its issue. An instrument beingolder than six months, therefore, requires revalidation before payment. Following is theprocedure of revalidation of BC:Step Description Responsibility1. Customer will present the BC at issuing branch for revalidation. Customer2. CSO will verify the customer identity (through original CNIC/ NICOP/ CSO POC/ Passport). CSO will check with Bank’s record/ System to confirm if: CSO3. a. The contents of BC match with those appearing in System. b. The said BC is not reported as lost or has been encashed.4. After positive verification, OM/ BM would advise the customer to OM/ BM/ CSO furnish a BC revalidation request. Branch staff may assist theKIM – I Handbook; Version 1 Page 11 of 43

Operations Department, KMBL customer in writing the request. In case of mismatch in BC contents/ BC reported as lost/ encashed, customer would be informed accordingly. Once approved by OM/ BM after signature verification of the CSO customer from system, CSO would: a. Mark the BC with specific narration “Revalidated on Date5. DD/MM/YYYY”. b. Get it signed by two authorized signatories of the branch along with AS. c. Affix branch stamp on the marking, thereby endorsing the genuineness of the revalidation. CSO archives the BC validation request for branch records and audit CSO6. trail. A copy would also be attached with vouchers in DTL. Voucher would also be marked as revalidated with Date and two authorized signatures. 6.1.5. CANCELATION OF BANKER’s CHEQUE – CLAUSE 9.1.5 OF KIM-1A customer can request cancelation of BC due to: 1. Instrument is lost/ stolen 2. Instrument is damaged 3. Customer has requested cancelation after obtaining due discharge from the beneficiaryThe core process of BC cancelation is the same in all cases, however, documentary requirementof each case differs. Detailed process of BC cancelation is tabled below:Step Description Responsibility1. Customer will visit the issuing branch for BC cancelation. Customer In case of Lost/ Stolen BC: Customer will be required to furnish a Customer copy of Police Daily Diary Report/ copy of FIR indicating the loss of Original KMBL BC instrument (along with instrument number/s) and an indemnity for Lost of BC (as mentioned in Annex-KIM0083 of KIM-I Version 6.0) on Rs. 20 stamp paper, stating the reason of lost/stolen.2. In case of Damaged BC: Customer will have to furnish original BC. Original instrument will be marked as “Cancelled” with red pen by CSO after approval from OM/BM. In case of Cancelation for Refund: Customer would furnish Due Discharge from beneficiary in favor of applicant/ purchaser on the reverse/back of BC instrument. In case of company / institution, a letter in favor of bank clearly mentioning Banker cheque number and issuance date can be accepted for cancelation. After receipt of BC Cancelation request and related documentation, CSO3. CSO will check the documentation for appropriateness and the status of particular BC (Paid/Un-Paid) from system.KIM – I Handbook; Version 1 Page 12 of 43

Operations Department, KMBL If unpaid, the cancellation/ lost marking request will be processed CSO by CSO. Customer would be informed for applicable charges as per4. SOC, which will be automatically deducted by system. In case of BC being already paid, customer will be informed accordingly and BC cancellation request will be rejected. CSO to ensure that there is no endorsement on face/ back of the CSO Banker’s Cheque as the presence of endorsement shows the5. delivery and negotiation of the instrument. If there is some endorsement, it should not be cancelled and customer to be informed accordingly.6. If everything in order, the request and the relevant documentation OM/ BM would be sent to OM/ BM for further approval.7. After necessary checking and approval by OM/BM, CSO will process CSO BC cancellation in system through cancelation menu in BE.8. The processed transaction will be moved to the bucket of OM/BM OM/ BM who will authorize it through system. In case original BC was issued against account debit, amount of BC CSO/ OM after deduction of cancelation charges would be credited back to customer’s account.9. In case of original BC was issued against Cash, CO will pay cash to customer by debiting BC issuance fund parking account (GL). However, OM will ensure to recover applicable Withholding Tax on Cash Withdrawal if the BC amounts to Rs. 50,000 or above (or as applicable)10. The signature of the officers on the cancelled Banker’s Cheque CSO should be torn and the same should be marked “Cancelled”.11. Cancelled BC and relevant documentation would be kept in branch CSO/ OM for records and audit trail. 6.1.6. BANKER’S CHEQUES DAY END BALANCING – CLAUSE 15.3.7 OF KIM-1Being a security stationery item, banker’s cheques, like other security stationery items, requireto be balanced at the end of a business day. Following are the steps of balancing banker’scheques stock at branch:Step Description Responsibility1. Un-issued BC will be kept in the safe overnight as part of security CSO/OM stationery. At day end, CSO/ OM would reconcile the used and unused BC CSO/ OM2. leaves, update the stationery stock register (Annexure KIM-0053) and signoff the same.6.2. CALL DEPOSIT RECEIPTS (CDRS) HANDLINGCall Deposit Receipt (CDR) is a non-negotiable instrument, issued on behalf of customers forguaranteed payment to beneficiaries such as Government/ Semi-Government/ PrivateKIM – I Handbook; Version 1 Page 13 of 43

Operations Department, KMBLOrganizations, etc. CDR should only be issued in the name of institutions and not in name ofindividuals. CDR is a firm commitment of payment upon presentation and is mostly used/required for applying/ awarding of Governmental Tender Processes.Like Banker’s Cheques, CDRs also undergo processes of issuance, encashment, revalidation andcancelation.Separate procedures of each of the abovementioned processes are listed below: 6.2.1. RECEIPT OF CALL DEPOSIT RECEIPTS (CDRs) AT BRANCHES – CLAUSE 15.3.5 OF KIM-1[ Description Responsibility Steps1. Printed CDRs will be received at branch directly from Vendor. Vendor2. Custodian of CDRs at branch will jointly receive and open the CSO and OM containing CDRs. OM will physically verify received CDRs with requisition slips and3. delivery sheet received from vendor, prior handing over them to OM CSO.4. After receipt of the CDRs, CSO will count leaves, check security CSO features and completion of series. Running book/in-use CDR stationary will be kept in Fire-proof5. cabinet over-night under dual custody of OM & CSO, while un- CSO and OM issued CDRs will be kept in safe as part of security stationary. CSO will insure serial wise printing of CDR 6.2.2. CALL DEPOSIT RECEIPTS ISSUANCE – CLAUSE 9.2.1 OF KIM-1CDRs can be issued against customer request ONLY through customer account debit. Followingis the process of issuance of CDRs:Step Description Responsibility Customer visits his/ her parent KMBL branch and requests the Customer1. issuance of CDR, against account debit, by filling CDR Application Form (Annex – KIM0084). CSO would receive the application from customer and verify the CSO following: a. Customer Signatures/ Thumb impression from SSC b. Any cutting/ overwriting on cheque or application has been2. authorized by customer c. Beneficiary details i.e., name, CNIC/ SNIC #, NTN # (for corporate entities), complete address and contact numbers etc. d. Purpose of requesting CDR Issuance While receiving cheque from the customer, CSO would verify that: CSO i. The cheque is in favor of KMBL.3. ii. Cheque is not stale/ postdated. iii. Customer’s thumb impression/ signature are matching with those in SSC. iv. Check the account number and that the account balance isKIM – I Handbook; Version 1 Page 14 of 43

Operations Department, KMBL sufficient enough to cover requested BC amount and applicable charges as per SOC. v. Status of account is normal, i.e. account is not dormant/ blocked or closed.4. CDR Application would be forwarded to OM for contents checking of OM application and approval to proceed with CDR printing.5. After documentary approval, CSO will initiate CDR processing in CSO system. If applicable, request of transaction authorization will be forwarded OM6. to OM, who will authorize the transaction in system and instruct CSO for printing of CDR.7. CSO will print CDR through system and would recover applicable CSO charges as per SOC. CSO will forward the printed CDR to OM/BM for quality check. Once OM8. quality and contents are checked, authorized signatories will sign printed CDR as per mechanism below. There are two categories of signatories in branches: Authorized a. Authorized Signatory A Category (BM, RM, OM Level) Signatories b. Authorized Signatory B Category (CSO, CAO, CO Level)9. Authorized signatories on the printed CDR would be as follows: CDR exceeding Rs. 500,000/- will be signed jointly by two “A” category signatories and CDR for less than Rs. 500,000 will be signed by one member from “A” and one of “B” category. Customer will be handed over printed and signed CDR under proper CSO10. acknowledgement. Signature of customer will be verified by CSO prior delivery of CDR.11. Acknowledged CDR Application will be filed in Funds Transfer CSO Request File maintained at branch. 6.2.3. CALL DEPOSIT RECEIPTS ENCASHMENT – CLAUSE 9.2.2 OF KIM-1Encashment of CDRs can be through either inward clearing or through internal account transfer.Separate processes for both the scenarios are narrated below: 6.2.3.1. ENCASHMENT THROUGH INWARD CLEARINGStep Description Responsibility1 CSO receives inward clearing instruments at KMBL Branch from CSO NIFT/ designated MCB Branch. After segregating different types of instruments, CSO performs the CSO following checks on CDR:2 a. Authenticity/ genuineness of CDR instrument by checking under UV lamp with IV markers. A stamp confirming “UV/IV check confirmed” would be affixed on reverse of CDR for such cases.KIM – I Handbook; Version 1 Page 15 of 43

Operations Department, KMBL b. Validity of the instrument i.e. date, signature of authorized signatories, amount in words/ figures match, quality of instrument, Crossing, cutting/over writing, stop payment, etc. c. Beneficiary’s Bank Stamps (clearing, endorsement etc.)3 CSO will post inward clearing transaction into system as per CSO instructions mentioned in KIM-I Version 6.0 Annex-KIM0085.4 If required, transaction would move to OM for authorization, who OM will review the transaction and authorize the same in the system.5 The status of all cleared/return cheques will be intimated to CSO/ OM respective NIFT Office or MCB branch Cleared instruments will be the part of daily transactions vouchers CSO6 whereas uncleared/ returned instruments would be handed over to NIFT/ MCB for further processing at their end. 6.2.3.2. ENCASHMENT THROUGH ACCOUNT TRANSFERStep Description Responsibility1 Customer/ beneficiary will visit KMBL branch for transfer of CDR Customer amount to his/ her deposit account. Customer will fill Deposit Slip, incorporating details of his/ her Customer2 deposit account (local or online), CDR number, amount etc. Branch staff may facilitate in filling. Customer will submit the deposit slip along with CDR to CO, who CO would check the particular of instrument i.e.: a. Authenticity/ genuineness of CDR instrument by checking under UV lamp and IV markers (a stamp confirming “UV/IV3 check confirmed” would be affixed on reverse of CDR for such cases). b. Validity of the instrument such as date, signature of authorized signatories, amount in words/ figures match, quality of instrument, crossings, cutting/ over writing, stop payment, endorsements etc. CSO acknowledges the receipt of CDR by affixing ‘Cheque Received’ CSO4 stamp and signature on deposit slip (both on original and carbon copy).5 Original deposit slip would be kept for branch record while carbon CSO copy would be handed over to the customer as acknowledgement.6 CSO will process the CDR encashment by ‘Credit to Customer CSO Account ‘ in system. If required, the transaction would be moved to OM for OM7 authorization, who would review and authorize the transaction into the system.8 All cleared instruments will make a part of daily transactions OM vouchers/ pouch.KIM – I Handbook; Version 1 Page 16 of 43

Operations Department, KMBL 6.2.4. REVALIDATION OF CALL DEPOSIT RECEIPTS – CLAUSE 9.2.4 OF KIM-1A Call Deposit Receipt is payable within three years from the date of issuance. An instrumentbeing older than three years, therefore, requires revalidation before payment from the branchof its issuance. Following is the procedure of revalidation of a CDR.Step Description Responsibility1 Customer will present the CDR at issuing branch for revalidation. Customer2 OM/ BM will verify the customer identity (through original CNIC/ OM/ BM NICOP/ POC/ Passport). OM/ BM will check with Bank’s record/ System to confirm if: OM/ BM3 a. The contents of CDR match with those appearing in System. b. The said CDR is not reported as lost or has been encashed. After positive verification, OM/ BM would advise the customer to OM/ BM/ CSO furnish a CDR revalidation request. Branch staff may assist the4 customer in writing the request. In case of mismatch in CDR contents, CDR reported as lost or encashed, customer would be informed accordingly. Once approved by OM/ BM after signature verification of the CSO customer from system, CSO would: i. Mark the CDR on system as revalidated ii. Write on the CDR a specific narration “Revalidated on Date5 DD/MM/YYYY”. iii. Get it signed by two authorized signatories of the branch along with AS. iv. Affix branch stamp on the marking, thereby endorsing the genuineness of the revalidation.6 CSO archives the CDR validation request for branch records and CSO audit trail. 6.2.5. CANCELATION OF CALL DEPOSIT RECEIPTS – CLAUSE 9.2.5 OF KIM-1A customer can request cancelation of CDR due to: 1. Instrument is lost/ stolen 2. Instrument is damaged 3. Customer has requested cancelation after obtaining due discharge from the beneficiaryThe core process of CDR cancelation is the same in all cases. However, documentaryrequirement of each case differs. Detailed process of CDR cancelation is tabled below:Step Description Responsibility1 Customer will visit the issuing branch for CDR cancelation. Customer Customer will furnish a CDR Cancelation Request (Annex-KIM0082), Customer along with:2 In case of Lost/ Stolen CDR: Customer will be required to furnish a copy of Police Daily Diary Report/ copy of FIR indicating the loss of Original KMBL CDR instrument (along with instrument number/s)KIM – I Handbook; Version 1 Page 17 of 43

Operations Department, KMBL and an indemnity for Lost of CDR (as mentioned in Annex-KIM0083 of KIM-I Version 6.0) on Rs. 20 stamp paper, stating the reason of lost/stolen. In case of Damaged CDR: Customer will have to furnish original CDR. Original instrument will be marked as “Cancelled” with red pen by CSO after approval from OM/BM. In case of Cancelation for Refund: Customer would furnish Due Discharge from beneficiary in favor of applicant/ purchaser on the reverse/back of CDR instrument. A release letter from the beneficiary, containing related information for cancellation of CDR can also be accepted for cancelation. Customer will hand over the related documents to CSO for further processing. After receipt of CDR Cancelation request and related CSO3 documentation, CSO will check the documentation for appropriateness and the status of particular CDR (Paid/Un-Paid) from system. If unpaid, the cancellation/ lost marking request will be processed CSO by CSO. Customer would be informed for applicable charges as per4 SOC, which will be automatically deducted by system. In case of CDR being already paid, customer will be informed accordingly and CDR cancellation request will be rejected. CSO to ensure that there is no endorsement on face/ back of the CSO5 CDR as the presence of endorsement shows the delivery and negotiation of the instrument. If there is some endorsement, it should not be cancelled and customer to be informed accordingly.6 If everything in order, the request and the relevant documentation OM/ BM would be sent to OM/ BM for further approval.7 After necessary checking and approval by OM/BM, CSO will process CSO CDR cancellation in system.8 The processed transaction will be moved to the bucket of OM/BM OM/ BM who will authorize it through system.9 Amount of CDR after deduction of cancelation charges would be CSO/ OM credited back to customer’s account.10 The signature of the officers on the cancelled Banker’s Cheque CSO should be torn and the same should be marked “Cancelled”.11 Cancelled CDR and relevant documentation would be kept in branch CSO/ OM for records and audit trail.12 A new CDR can be issued to the customer, in lieu of the cancelled CSO one, as per CDR issuance process above. 6.2.6. CALL DEPOSIT RECEIPTS DAY END BALANCING – CLAUSE 15.3.7 OF KIM-1Like banker’s cheques, CDRs are also security stationery items. Day end balancing of CDRs is alsorequired to be carried out as per security stationery balancing mechanism, as given below:KIM – I Handbook; Version 1 Page 18 of 43

Operations Department, KMBLStep Description Responsibility1. Un-issued CDRs will be kept in the safe overnight as part of security CSO stationery. At day end, CSO/ OM would reconcile the used and unused CDR CSO/ OM2. leaves, update the stationery stock register (Annexure KIM-0053) and signoff the same.6.3. CHEQUE BOOK HANDLINGCheque books are issued to new customers after opening of accounts at branches, or to oldercustomers as per their request. Following are the different phases of cheque book processlifecycle: 6.3.1. CHEQUE BOOK REQUISITION – CLAUSE 7.1 OF KIM-1Customer is required to approach his/her parent branch for issuance of Cheque Book. Priorto issuance of a new Cheque Book, branch should ensure that the account is not dormant/blocked or in-operative.Steps Description Responsibility 1 Customer requests for cheque book issuance in the branch to CSO. Customer Receives cheque book request from customer, affixes Time Stamp on requisition slip and verifies customer signature/ thumb impression. If the request is received by mail, Call Back Confirmation (CBC) will2 be obtained. Call Time, customer’s contact number will be noted on CSO request along with officer’s signed with name and designation. In case of Borrower photo customer, preferably cheque book will not be issued and customer would be facilitated via counter cheque. However, if the customer insists, a Cheque Book may be issued on the approval of BM. CSO would check Customer’s account balance, Status being active, and previous cheque book history (in case of recurring requests) to3 ascertain the need for new cheque book. Customer past record of CSO cheque Return must be taken into consideration before issuance of new cheque book. In case of any suspicion/ doubt (such as cheques frequently4 returned), matter must be referred to Operations Manager for CSO advice/approval.5 OM approves or declines the request. OM In case of decline by OM, customer is advised politely and the reason of rejection may be communicated to customer.6 CSO If approved, CSO checks for date, account number, title of account, Number of leaves required as per customer profile, and enters theKIM – I Handbook; Version 1 Page 19 of 43

Operations Department, KMBL same in Cheque Book Register. (Annex – KIM0068). Customer will be advised to collect his/ her cheque book after five (5) working days. Customer would also be informed about shredding7 of Chequebook if not collected within 60 days. Days for Cheque CSO book shredding will be counted from the day cheque book received at the branch. For approved cases, CSO initiates cheque book requisition in System8 (BE), deducts applicable charges, and forward the requisition to CSO OM/ BM for authorization. OM/ BM will review the contents of request as per above9 mentioned procedure and authorize the same in system. OM/ BM OM/ BM will affix his/ her signature on the request as an evidence of authorization.10 CSO will update the cheque book issuance register accordingly CSO (Annex-KIM0068)11 Chequebook request will be retained at the branch in a separate file CSO along with system report (Personalized CB Chequebook Report). 6.3.2. CHEQUE BOOK RECEIVING AT BRANCH AND ITS CUSTODY – CLAUSE 7.2 OF KIM-1CSO and OM, or their designated backups, are the joint custodians of cheque books received inthe branch by vendor. Cheque books are security stationery items and must be kept under lockand key with strictly balanced reconciliation.Steps Description Responsibility 1. Printed cheque Books will be received at branch directly from Vendor 2. Vendor. CSO and OM 3. Custodian of cheque books at branch will jointly receive and open OM the packed/ envelope containing cheque books. 4. OM will physically verify received cheque books with requisition CSO slips and delivery sheet received from vendor, prior handing over 5. them to CSO. CSO 6. After receipt of the cheque books, CSO will count cheque books’ OM 7. leaves, completion of series, account numbers and account title. CSO 8. CSO and OM For Photo Accounts, ‘Photo Account – Personal Withdrawal Mandatory. CSO would update Cheque book leaves in respective accounts in the System and forward for authorization to OM. OM to authorize the cheque book udpation. Cheque book inventory will also be updated in Cheque book register. (Annex-KIM0068) After reconciliation and scrutiny, cheque books will be placed under dual custody of OM and CSO in Fire Resistant Cabinet (FRC).KIM – I Handbook; Version 1 Page 20 of 43

Operations Department, KMBL 6.3.3. CHEQUE BOOK DELIVERY TO CUSTOMER – CLAUSE 7.3 OF KIM-1Customer (or his/ her representative) is required to approach his/her parent branch for issuanceof Cheque Book.Steps Description Responsibility 1. Customer walks in the branch and requests for delivery of cheque Customer 2. book CSO CSO takes out the respective cheque book from FRC for delivering to CSO 3. the customer. Obtains customer signature/ thumb impression on reverse side of CSO cheque book request, verifies the same, and updates the register accordingly. In case customer sends his/ her representative, CSO verifies customer signature on given authority letter and obtains call back confirmation from customer for authority. Same is noted down on the authority letter along with customer’s contact number, time and date. CNIC copy of customer’s representative is obtained, matched with the original, and stamped as original seen. Same is attached with Authority Letter. This is to be noted that authority not acceptable for photo accounts. After confirmations, Cheque book is handed over to the customer or4. his Authorized representative, and his/ her signature/ thumb CSO impression are obtained as a receipt acknowledgement on the back of cheque book requisition slip.5. Signature/ thumb impressions of the recipient are verified against CSO system/ CNIC6. Cheque book is marked as “Acknowledged” in system (BE). CSO7. CSO/ OM educates the customer for safe Keeping of the Cheque OM/CSO Book CSO generates Cheque Book Acknowledgment Report from system8. and places Cheque Book delivery acknowledgment with same for CSO reconciliation and audit purpose. 6.3.4. CHEQUE BOOK SHREDDING – CLAUSE 7.4 OF KIM-1Cheque books held in branch for more than sixty days will be retrieved by CSO (Joint Custodian)from safe custody at completion of 60th Working day.Steps Description Responsibility 1. Cheque book Shredding Memorandum (Annex-KIM0070) will be CSO 2. prepared. Recommendation by OM and signature from BM will be CSO obtained on the same. Mark the respective cheque books as “Destroyed” in the System.KIM – I Handbook; Version 1 Page 21 of 43

Operations Department, KMBL Cheque books will be shredded in the presence of OM/ BM. Due to3. unavailability of shredders; branches are advised to cut each cheque CSO leave into small pieces ensuring complete destruction of all the leaves.4. Cheque book register will be updated mentioning the status of the CSO Cheque book as shredded and signed by CSO and OM.Customer Cheque Books/ Counter Cheque stock balancing must be conducted on each monthend as well as at random by BM/OM and keep balancing of records and for audit purpose.6.4. COUNTER CHEQUES HANDLINGCounter Cheque is an instrument issued to individual customer as a loose cheque, preferably toKMBL borrowers for encashment of loans. Following are the activities that are carried out atbranches for handling Counter Cheques: 6.4.1. COUNTER CHEQUE STOCK RECEIVING – CLAUSE 6.3.1 OF KIM-1CO and OM (or their designated backups) are the joint custodians of counter cheques. CounterCheque are also KMBL’s security stationery items and must be kept under lock and key withstrictly balanced reconciliation. Following are the steps to be followed by branch after receipt ofCounter Cheques:Steps Description Responsibility 1. OM will forward Stationery request for Counter Cheques (CC) OM required for next quarter to Stationary Desk – Corporate Office 2. through Area Distribution Supervisors. OM & CO 3. Once received at branch from the vendor, Counter Cheques (along OM & CO 4. with other security stationary items) should be opened jointly by OM & CSO 5. Branch Operations Manager (OM) and Cash Officer (CO) or their OM 6. designated backups. OM & CSO Counter Cheque Books should be checked for print quality, serial number and security features by using UV lamp. Records of the stock must be entered in Stationary Stock Register (Annex – KIM0053) and kept under joint custody of OM and CSO, or their designated backups. Single Counter Cheques Booklet (containing 25 leaves) will be marked in system (BE) as “Bulk Receive Stock” for each product/ scheme on need basis, based on transaction volumes. Unissued Counter Cheque Books would be kept under dual custody of OM and CSO in Fire Resistant Cabinet in Vault. 6.4.2. COUNTER CHEQUE ISSUANCE – CLAUSE 6.13.2 OF KIM-1Steps Description Responsibility 1. On-need basis, Counter Cheque Book (preferably in single booklet OM quantity in serial order) will be issued to CSO. The issuance will be recorded in Counter Cheque Stock Register (Annex – KIM0056) andKIM – I Handbook; Version 1 Page 22 of 43

Operations Department, KMBL issued booklet would be marked in system (BE) as “Bulk issuance to Officer”.2. The Counter Cheque should be issued to account holder, upon OM request, in person only. Upon proper identification of the customer by verifying his/ her CSO3. identity and balance, next available/ serial Counter Cheque leaf will be issued to customer in person. Related account number will be properly mentioned on the cheque leaf.4. Single Counter Cheque will be issued in system (BE) as “issue to CSO customer” and will be forwarded to OM/BM for authorization. After due verification, OM/ BM will mark Counter Cheque as OM/BM5. “verified” in system and sign at “Authorized by” column on Counter Cheque.6. Counterfoil of a particular counter cheque would be filled with CSO identical details, for branch records.7. Counter cheque will be marked as “acknowledged” in system and CSO handed over to the customer. Counter Cheque Issuance Charges will be auto-deducted by System CSO8. (BE). CSO/ OM will check to ensure correct deduction in line with SOC.9. All cancelled Counter Cheques should also be reconciled and OM verified at day end and, retained for audit and records. Surprise check should be conducted at random basis (at least once a BM/AM/ACO10. week) to verify the used/ issued/ unissued stock. Used cheques should be reconciled against their respective counterfoil, ensuring compliance and legitimacy of issuance.6.5. ATM/ DEBIT CARDS HANDLINGKMBL offers ATM/ Debit card to its current/saving account holders and loan borrowers. TheATM/Debit Card may be issued at the time of account opening or may be requested bycustomer later-on. 6.5.1. ATM/ DEBIT CARD ISSUANCE – CLAUSE 8.1 OF KIM-1Customer can be issued debit card after opening of their account, establishment of relationshipwith the bank. Following are the steps required to be followed at branches for issuance of debitcards to the customers:Steps Description Responsibility 1. Customer requests for issuance of debit card on ATM/Debit Card Customer 2. Issuance request (Annex-KIM0073). CSO CSO will obtain duly filled and signed from customer. Branch may 3. facilitate the customer in filling the said application. CSO CSO will check the eligibility criteria i.e. Balance in customer’s account for ATM charges deduction, CNIC expiry date as per system and account status.KIM – I Handbook; Version 1 Page 23 of 43

Operations Department, KMBL4. Customer’s signature/ thumb impression will be verified through CSO system. CSO will verify Signature/ Thumb impression and will affix5. “Signature/ Thumb impression Verified” stamp or will note S.V. along CSO with his/ her signatures as a confirmation of signatures/ thumb impression verification. CSO will Capture ATM/ Debit Card issuance request in system (BE), and forward the request to OM/ BM for authorization. While6. capturing debit card request, it will be ensured that maximum CSO characters including spaces for CARD TITLE should not exceeded nineteen (19) alphabets. OM/ BM will verify customer’s details by confirming Title of account, Name of customer (to appear on ATM/ Debit Card), CNIC number7. and account number etc. OM/ BM will authorize the request in OM/BM system and sign the request as an evidence of authorization/approval. ATM Card issuance charges will be auto- posted in the system (BE). Customer will be advised to collect his/her ATM/Debit Card after 5-6 working days of request initiation. Customer will also be advised about shredding of ATM/ Debit Card if not collected within 60 days.8. Days to shred will be counted from the day ATM/ Debit Card is CSO received at Branch. However, for photo accounts, BM/ OM to ensure that the customer is able enough to use debit card/ ATM machine independently.9. CSO will maintain an ATM/ Debit Card Issuance register (Annex – CSO KIM0074).10. CSO will sign the request at “Processed by” while OM/BM will sign CSO the request at “Authorized by”.11. ATM/Debit Card request will be retained at branch and filed CSO separately. CFC desk – Corp. Office will generate system (BE) report for previous12. working day’s lodged ATM requests and will forward the same to UBL CFC ATM Card Operations (Card Production Desk) on daily basis for onwards card production and delivery.The customer should not be charged for any re-issuance of ATM, Debit/Credit cards if the same isrequired due to system/ human error on bank’s (or vendor’s) end. In such cases a new requestmay be posted into the system for ATM Card re-issuance, ensuring ATM Card Issuance chargesare not deducted. 6.5.2. ATM/DEBIT CARD RECEIVING AND CUSTODY AT BRANCH – CLAUSE 8.2 OF KIM-1Once received at branches from the vendor, OM and CSO take the joint custody andresponsibility of debit cards handling and subsequent processes. Following steps are involvedafter receipt of debit cards in branches:KIM – I Handbook; Version 1 Page 24 of 43

Operations Department, KMBL Requested ATM/ Debit Cards would be directly delivered to respective KMBL branch in individual Welcome Packs. As required by vendor and as part of backup plan, in case ATM/ Debit1. Cards are not received at Branch (due to closure, etc.), the package Vendor would be delivered at Area office (or main branch attached to Area Office). Area Manager (AM) would ensure that sealed package is delivered under acknowledgement to respective branch as early as possible.2. The packet/ envelope containing individual Welcome Packs will be OM opened by OM in the presence of CSO OM and CSO will reconcile the received ATM/ Debit Cards with the3. issuance requests and packing list from UBL/vendor. In case of any CSO issue, the matter is referred to CFC – Corporate Office4. OM and CSO will be the custodian of uncollected ATM/ Debit Cards Welcome Packs. All uncollected ATM/ Debit Cards will be retained in fire resistant5. cabinet/ safe under dual custody of OM and CSO until collected by OM the customer/ shredded. 6.5.3. ATM/DEBIT CARD DELIVERY – CLAUSE 8.3 OF KIM-1Upon receipt of debit cards at branch, they are ready to be issued to the respective customers,in the following manner: Customer will be required to visit the branch to collect his/her ATM/1. Debit Card in-person. ATM/Debit Card will not be delivered to Customer representative of a customer. Upon intimation of the customer, CSO would check availability of the2. card and retrieve it from safe custody for further handing over to the CSO customer.3. CSO will obtain customer’s signature/ thumb impression on ATM/ CSO Debit Card issuance register as receipt acknowledgement. CSO would verify signature/ thumb impression or will note S.V. along4. with his/ her signatures/ initials as a confirmation of signatures/ CSO thumb impression verification.5. Customer will be instructed to activate ATM/ Debit Card by calling CSO the KMBL Call Center from his/ her number registered with KMBL. 6.5.4. ATM/DEBIT CARD SHREDDING – CLAUSE 8.4 OF KIM-1ATM/ Debit Card held in branch after completion of sixty days will be shredded, in the followingmanner:Step Description Responsibility1. ATM/ Debit Card held in branch complete sixty days will be retrieved CSOKIM – I Handbook; Version 1 Page 25 of 43

Operations Department, KMBL from safe custody.2. ATM/ Debit Card Shredding Memorandum (Annex-KIM0075) will be CSO prepared for OM and BM’s signature.3. CSO will prepare Excel based MIS and send to Card Facilitation CSO Center (CFC) Desk – Corporate Office for hot marking Cards will be shredded in the presence of OM/ BM by cutting them4. vertically into two pieces from center (ensuring that the black OM carbon strip at the back of the card is destroyed).5. ATM Debit Card Register will be updated by CSO and will be signed CSO/OM by the OM. Following documents for shredded card record will be filed separately for AUDIT purpose.6.  Duly signed ATM/ Debit Card Shredding Memorandum OM (Annex-KIM0075)  Confirmation email from CFC of Hot Marking status of shredded cards.6.6. VAULT AND CASH MANAGEMENTOM and CO (or their designated backups) are the designated joint custodians (DJCs) of cashvault at branches. Cash vault management is an extremely critical and sensitive activity andutmost care and vigilance is must be ensured while accessing and operating cash vaults atbranches. Following procedures are to be followed in different activities of cash vaultoperations. 6.6.1. CASH TRANSFER FROM VAULT– CLAUSE 3.1 OF KIM-1Steps Description Responsibility 1. CO will decode the security code of the vault. Joint Vault Custodians OM & CO will unlock the main door of Vault. Following minimum security measure should adhere while performing vault opening. a. Main Entrance Door and Grill locked. b. Guards alert and positioned in well secured manner. c. Only authorized staff are allow to operate vault.2. Records entry time in the Vault Access Register (Annexure KIM- OM & CO 0003)3. Counts the cash bundles in the vault against the vault position of OM & CO previous day.4. Retrieves required cash as per requirement from Vault OM & CO5. Jointly re-lock the vault and safe OM & CO6. Update the cash in hand/ cash in safe position COIt is to ensure that all vault operations activity must visible in CCTV Cameras.In back up arrangement One Key Custodian should not have two set keys exposure.KIM – I Handbook; Version 1 Page 26 of 43

Operations Department, KMBL 6.6.2. CASH DEPOSIT PROCEDURE – CLAUSE 6.11 OF KIM-1Steps Description Responsibility 1. Customer enters the branch and fills in deposit slip (non-borrower Customer only) for depositing cash with the bank and approaches CO at the 2. cash counter of the branch. CO 3. CO receives duly filled and signed deposit slip/CRR or obtains CO 4. desired information on system generated slip (Copy of CNIC, CO Contact Number and signature). CO to ensure due Care in case of non-provision of deposit slip. Counts cash in front of customer. Tally the physical cash with the amount written on the deposit slip. Check deposit slip in following manner a. Date (should be of current working day) b. Account Number c. Title of account (should match with System) d. Amount in words and Figure should match e. Customer Signature and contact number appear on deposit slip f. Customer would be requested to sign in full in case of any alterations on the deposit slip. For walk-in customer/ non account holders: a. Apart from the abovementioned steps, a copy of CNIC (Original Seen) must be obtained for all online transactions along with contact number. b. A copy of CNIC will be required for local transactions above5. PKR. 20,000. CO For Collection through Cash Recovery Receipt a. Cash Recovery Receipt – CRR (Annex – KIM0052) is part of KMBL’s security stationary, used for collecting loan repayment/ recoveries from field, i.e. from the place of residence or business of borrowers. b. CRRs would only be used for recovery from field in extreme case(s) where customer is not able/ willing to visit KMBL branch. c. Loan Officer (LO) will fill the CRR by inserting deposit amount and loan/ deposit account number of concerned customer; receive cash, sign and handover the white copy to the customer, while the green & blue copy of CRR will be retained for branch processing/ records. d. Mention Proper Denomination Post the Deposit slip in BE system.6. CO/ OM Have the entry supervised by the authorized officer (OM) if amountKIM – I Handbook; Version 1 Page 27 of 43

Operations Department, KMBL is exceeding CO’s posting limit.7. Prints the system generated deposit slip and hands over the original CO to the depositor, while keeps the duplicate for branch record.8. Keeps the cash in counter sorted and aligned CO At day end, sorts the received currency notes in to re-issuable,9. soiled, defective category and prepare the note packets as per SBP CO guidelines.10. Attaches label on each packet, affixes Bank/ Branch Stamp (as per CO category i.e sorted, soiled) and signs off the same.CO will be responsible if a counterfeit/fake note is received/ collected from the customer.* If any counterfeit note/ currency is detected (Use UV lamp to ascertain the same isrecommended), CO must refer the matter to OM for his/ her opinion. OM will recheck the note inpresence of customer, and once it is established that the note is Counterfeit, OM will makenoting on deposit slip and will obtain customer signature on it.* The counterfeit note should be boldly mentioned as “Counterfeit”, and returned to customer.* Under no Circumstances should a Counterfeit note be returned to customer withoutcancelation/ marking. 6.6.3. LATE CASH DEPOSIT – CLAUSE 3.4 OF KIM-1The bank discourages practice of entertaining late cash receipts at all levels. However,exceptions such as Cash received after banking hours e.g., from Loan Officer (LO) or where sameday deposit is not possible, should be documented properly.Step Description Responsibility 1. LO shall inform OM/ CO along with BM regarding expected late cash LO 2. receipt. OM/ CO OM will make necessary arrangements to collect such cash while 3. implementing all controls. OM/ CO will: Vault 4. Custodians 5. i. Collect cash from LO with a Daily Cash Recovery Summary OM/ BM 6. (DCRS) (if required), in line with KIM II – Credit Processing & Vault 7. Collection Procedures, with the date as same working day Custodians 8. and respective Cash Recovery Receipts (CRR). CO Teller/ OM/ ii. Reconcile the cash, CRRs and DCRS. BM CO/ OM Preferably, Late Cash will be placed in Cash Vault. Late Cash Receipt Register (Annexure KIM-006) shall be updated and duly signed by OM/BM. Late Cash details will be recorded in Cash balance Book and will be signed by vault custodians. Annexure KIM-006 shall be placed in a separate file for Late Cash Receipt for record and audit purpose. In case of CIPL breach, insurance coverage will be obtained/ in place by including late Cash/ receiving at premises. On the next business day, this would be ensured that Late Cash received in the previous business day will be the ‘First cash entry ofKIM – I Handbook; Version 1 Page 28 of 43

Operations Department, KMBL the day’.Branch may ask CNIC or any documentary evidence to ascertain the identification of depositor tomeet CDD requirement. 6.6.4. CASH WITHDRAWAL PROCEDURE – CLAUSE 6.13 OF KIM-1Steps Description Responsibility 1. Customer enters the branch for withdrawing cash and approaches Customer 2. CO at branch cash counter. CO CO at branch receives ‘Cash’ Cheque from the customer, requests 3. the customer to sign on the back of the cheque. CO CO would carry out technical verification of the cheque by ensuring that: a. Cheque is not stale/ postdated or the date is not incomplete b. Cheque is not mutilated/ torn off. c. Amount in words and figures match d. Cheque is signed properly e. Cheque is not endorsed in any manner (if yes, cancellation of all the stamps would be required from the respective banks/ branches) f. Cheque is not crossed g. There are no unauthorized alterations In case of Counter cheque, Approval from Area Manager will be required if issued to a non-borrower customer or is used for purposes other than Loan CO Encashment. Check security features for cheque by using UV Lamp and IV marker.4. can be helpful in detecting fraud, scams and counterfeiters, in case CO of any doubt refer matter to OM. OM, after due verification, may approve or decline the payment.5. In case of fake instrument, matter must be referred to Corporate Office through Area Coordinator Operations, Cluster Manager Operations.6. Cash payment to Non-account holder (third party), identification will CO be made as per CDD Guidelines (KYC/ AML/CFT Guidelines). Following would be checked in the System before making cash payment: a. Sufficient funds are available in customer’s account b. There are no special instruction/ restraint marked on the7. c. account. CO Validate the cheque number properly to ensure the cheque is not marked for stop payment. d. Verify customer Signature on the cheque against the ones on system In case of online withdrawal of PKR. 100,000 and above,KIM – I Handbook; Version 1 Page 29 of 43

Operations Department, KMBL confirmation from account maintaining branch on AML compliance including CBC will be required. In case marked for stop payment, the cheque would be referred to OM for review and to attach a return memo with the cheque for returning it to the customer, if required. Same would also be entered in Cheque Return Register (Annexure KIM-0087) In case the Cheque would be posted in System by entering the8. particulars of the cheque in respective fields. This has to be ensured CO that the cheque number and other details are entered properly and accurately. Account is debited for the requested amount. If the amount is over9. teller’s limit, same is sent for authorization to OM, who verifies the CO/ OM transaction duly and approves the same. Once account debited and the cheque is posted in System, notes10. down Transaction Reference Number on the cheque and asks the CO customer for second signature on back of the cheque.11. Payment is made to the customer. Customer is asked to check/ CO count the cash before leaving the counter.12. Denomination wise amount paid is noted down at the back of CO cheque.13. Withholding Tax or any other Government Tax, announced from CO/automatic time to time, is deducted from customer’s account.14. Proper posting and supervision of the cheque is ensure/ rechecked. CO* Copy of CNIC will be required for all local (=>20,000)/online transactions (in case of thirdparty/walk in customer) or take verifiable related particulars in record. 6.6.5. PETTY CASH – CLAUSE 14.3 OF KIM-1Branch would release payments from petty cash float as per Finance Procedure Manual forpetty cash maintenance, and will record transactions in the following manner:Step Description 1. Branch will generate Petty cash by executing the following entry: 2. Debit: Transaction Type 106957 ( GL Petty Cash Float) CO 3. CO 4. Credit: XXXXXX (Cash in Hand) Cash Officer will select transaction type 106958 from Teller Operation – Misc. transaction, and will record the transaction by debiting relevant expense GL and Credit Petty Cash Float, as illustrated below: Debit: Transaction Type 106958 (GL-Relevant Expense ) Credit: Transaction Type 106957 (GL Petty Cash Float) Record of petty cash opening and closing Balance in Cash Balance OM OM Book at day end must be ensured. All the expenses must be duly authorized by BMKIM – I Handbook; Version 1 Page 30 of 43

Operations Department, KMBL5. Balancing of petty cash must be conducted at Month end and records OM must be archived for audit/ reference purpose. 6.6.6. TRANSFER OF CASH TO AND FROM BRANCHES – CLAUSE 6.9 OF KIM-1Steps Description Responsibility In case of cash transportation between KMBL Branches, sender INFO1. branch will contact the Security Agency for Cash Movement, and confirm their coordination via email for record.2. At sender branch, cash would be handed over to security agency CO/OM guard in sealed bags after proper identification3. At receiving branch, CO and OM will jointly receive cash from CO/OM security agency and ensure that the seal of the bag is intact.4. CO and OM counts the cash and acknowledges the receipt on cash CO/ OM shipment slip/ receipt.5. Successful movement of cash is confirmed to the sender branch and CO via email.Cash should be received in dual control in the presence of CO and OM. Shipment receipts to befiled in a Separate file for records and evidence. 6.6.7. CLOSING AND BALANCING OF CASH – CLAUSE 6.5 OF KIM-1Steps Description Responsibility 1. At the close of business, physical cash and cash in vault is tallied CO 2. with the cash position in System. Physical cash and cash appearing is CO 3. system must always match. CO 4. This has to be ensured that the cash received during the day is CO 5. sorted into re-issuable, soiled and defected categories as per SBP CO guidelines on daily basis before end of day. 6. Request of cash for the next working day would be initiated to CMD CO/ OM via email while keeping ACO/ AM and CMO in copy maximum by 7. 3:00 PM. Joint custodian 8. All sorted notes for all denominations should be packed and banded Joint Custodian in the form of packets (100 notes in each packet). Daily balanced Cash in Hand must be appropriately recorded in Bank Cash Book (Annex-KIM0001); and reported to Corporate Office on prescribed format (Annex-KIM0001a) on daily/periodical basis (as advised). CO/ OM to ensure that cash is within permissible insurance limits. If cash is over the limit, branch has must intimate the Insurance Desk- Corporate Office to obtain overnight insurance cover for excess cash over the limit. Joint custodians of the vault carry the cash to vault in secure Box, and place cash in vault, segregated category wise i.e re-Issuable, fresh, soiled and Unsorted. The custodians would place the cash inside the cash safe; check and verify the cash inside the vault with Bank Cash Book (Annex-KIM – I Handbook; Version 1 Page 31 of 43

Operations Department, KMBL KIM0001) and lock the safe.9. Sign the vault access register for Exit. Joint Custodian10. Re-lock the vault/ strong room and activate the security alarm Joint Custodian system. 6.6.8. CASH DIFFERENCE – CASH SURPLUS/CASH SHORTAGE PROCEDURESteps ACTIVITY-Cash Difference-Cash Surplus/Shortage Responsibility 1. In case of any cash difference Overage or Shortage, a thorough OM investigation would be carried out to identify difference by all 2. means (i.e. reconciliation of vouchers, CCTV recording, branch staff OM 3. interview etc.). BM 4. A memo/ email will be initiated by OM, which clearly mentions cash surplus/shortage details, to BM for onwards approval. BM, through ACO/ CMO, would seek approval from NDM to record surplus/ shortage of cash in branch’s books. Once approval is obtained, CO will record following system transaction. The same will be authorized by BM (only). Overage Credit: Teller difference-Cash Surplus Debit: Cash in hand Shortage Debit: Teller Difference-Cash Shortage Credit: Cash in Hand5. Approved memo (email) and account ledgers will be filed in a OM separate file “Teller Difference” for further processing and audit trail. 6.6.8.1. SETTLEMENT OF CASH SURPLUS PROCEDURESteps Description Responsibility 1. BM 2. Branch to use its all resources to identify the difference pertaining Customer 3. BM customer. If successfully identified, BM will contact the customer for 4. OM collection of funds. Customer will visit the branch and furnish a request mentioning the fact. Application will be reviewed in light of investigation report. The amount will be transferred into the customer’s account (or in case of non-account holder, handed over Cash to the customer) with proper acknowledgement on the application/indemnity duly approved by BM. Following entry will be parked for reversal of Teller Difference- Surplus. In case of customer Transfer entry will be executed as follows. Debit: Teller Difference –SurplusKIM – I Handbook; Version 1 Page 32 of 43

Operations Department, KMBL Customer Account Credit: In case of Non-Account holder Debit: Teller Difference-Surplus Credit: Cash in Hand. (Cash Handed Over to Non-account holder with proper OM acknowledgment on application/indemnity duly approved by BM) If customer/Difference not identified, after 10 years the amount will be transferred to unclaimed accounts and surrendered to SBP following unclaimed deposits procedures. At Branch5. Debit: Teller Difference Surplus Credit: Head Office Account At Corporate Office Debit: Head Office Account Credit: Unclaimed Deposit. 6.6.8.2. SETTLEMENT OF CASH SHORTAGESteps Description Responsibility 1. If recovered, the cash will be deposited at branch. CO will reverse CO/OM 2. the transaction by passing accounting entry. Debit: Customer Account Credit: Cash Difference Shortage (01-00-00-20- 00-01-0002) If not recovered within three months, branch will prepare a memo OM/BM OM/BM for submission to Head Operations and Head Retail Banking, recording complete details of the event, to obtain an approval for either Cash Officer to pay the difference amount or for recording of expense. On the recommendations of NDM, Head Operations and Head Retail Banking may approve either of above mentioned actions. In line with approval of settlement following accounting transaction will be passed by Teller.3. Debit: Cash in Hand (OR) Relevant GL Expense as advised by Finance Credit: Teller Difference Shortage (01-00-00-20-00- 01-0002)KIM – I Handbook; Version 1 Page 33 of 43

Operations Department, KMBL 6.6.9. CASH RELATED CONTROL POINTSS. No. Control Point 1. Access to vault is not allowed during public holidays except for in very exceptional cases, with the prior approval of Head of Operations. 2. Staff members, other than CO/ Designated employees by Branch Manager, are not allowed to handle cash transactions with customers and outside cash counters. 3. Branch Manager, on an unspecified date, carries out a surprise checking of Branch 4. Cash Position. 5. Branch vault operation must be conducted by the designated custodians only. 6. Cash/ Gold at premises insurance coverage should be monitored with strict compliance. Late Cash/ Gold received at branch must be covered under the insurance coverage.6.7. CASH MANAGEMENT (CMD) – CLAUSE 6.9 OF KIM-1Cash Management Desk of KMBL operates under the ambit of Operations Department. The deskis responsible to arrange Cash for branches’ use. Under normal practice, MCB Bank Ltd. is theprimary source of Cash management for KMBL, however on need basis, option of cash dealingwith SBP-BSC and other commercial banks can be utilized. Following are the different scenariosunder which Cash Management is carried out: 6.7.1. CASH MANAGEMENT THROUGH MCBBranches would forward request to Cash Management Desk – Corporate Office (CMD) forarrangements of funds from MCB. CMD arranges funds from MCB for respective branch as perAgreement between MCB and KMBL.Steps Description Responsibility Request of cash for the next working day would be initiated to CMD CO/OM via email with copy to relevant ACO/ AM and CMO.1. Branches have to make sure to mention their CIPL Limit and Cash Holding in the requests, invariably. Cut off time for sending request to CMD is 3:00 PM. CMD, as per their internal procedures, arranges funds from MCB CMD2. and generates an X-Pin for branches. The X-Pin is communicated to individual branches (one Pin for each branch) for collection of cash from MCB.3. After obtaining X-Pin from CMD, branch would arrange delivery of OM/ BM Cash at Branch. Physical cash would be obtained by KMBL branch from MCB. Designated officer/OM/BM4. * Cash transportation up to Rs. 500,000/- is allowed through Branch’s Vehicle along with armed Guard (within same city) in urgent need basis, where Cash in transit (CIT)/ Security AgencyKIM – I Handbook; Version 1 Page 34 of 43

Operations Department, KMBL services cannot be arranged.5. Post relevant cash entries at branch. CO6. CMD would be informed regarding successful cash movement and CO/ OM email trails would be kept for Branch records. Deposit of excess Cash to MCB will be at sole discretion of branch OM/BM7. Management keeping in view the smooth Branch Operation and cash projections.Cash should be handed over /Received in dual control in the presence of CO/ OM. Shipmentreceipts must be filed in a Separate file for record and evidence.Designated officer for cash movement should not be staff on contract. 6.7.2. CASH MANAGEMENT THROUGH SBP – BSCBranches may request CMD for arrangement of cash from SBP-BSC (in cities where SBP-BSC haspresence). In such cases, CMD would forward the request to KMBL Treasury Function (stationedin Karachi) through Finance & Accounts (F&A) Department for settlement of funds through RTGSor SBP’s internal Telegraphic Transfer (TT).Steps Description Responsibility 1. Request would be initiated to CMD via email for cash arrangement, Designated with relevant ACO/ AM and CMO in copy. staff/OM Branches have to make sure to mention their CIPL Limit and Cash CO/ OM Holding in the requests, invariably. After obtaining intimation from CMD, relevant branch would arrange delivery of Cash from SBP-BSC.2. CIT Services would be arranged for transfer of Cash from relevant Regional SBP-BSC to KMBL Branch through security agency as per Bank Agreement.3. Physical delivery of cash would be obtained by the branch from SBP- Designated BSC. officer/OM/BM4. Post relevant cash entries at branch. CO5. Deposit of excess Cash to SBP will be at sole discretion of branch OM/BM keeping in view the smooth Branch Operation and cash projections.Cash should be handed over/ received in dual control in the presence of CO/ OM. Shipmentreceipts must be file in a separate file for records and evidence.Designated officer for cash movement should not be staff on contract 6.7.3. CASH MANAGEMENT THROUGH OTHER BANKSThird scenario may also arise where neither MCB, nor SBP-BSC is in a position to facilitate thecash requirement of KMBL, or KMBL may not want to opt for SBP-BSC’s option owing tourgency, cost or time taken in the process.Under proper approvals, other banks in the region are liaised with by KMBL branch foravailability of sufficient cash, as required by the branch. As confirmation from a bank is received,KIM – I Handbook; Version 1 Page 35 of 43

Operations Department, KMBLa formal request letter is written by KMBL Branch (signed by two authorized signatories of thebranch) for provision of cash. The letter would explicitly contain amount of cash required alongwith complete branch details and mode of transaction (i.e. RTGS, SBP Bank Account Transfer orBanker’s Cheque).Steps Description Performed By Request would be initiated to CMD, via email, for arrangement of funds through inter-bank arrangement. Relevant ACO/ AM and1. CMO to be kept in copy. OM Branches have to make sure to mention their CIPL Limit and Cash Holding in the requests, invariably.2. Other banks in the region would be liaised with for availability of OM/ BM sufficient cash, as required by the KMBL branch. Upon confirmation of availability of cash at other bank, a formal request letter would be written to the other bank’s branch,3. mentioning required amount, complete branch details, and mode OM/ BM of transaction (i.e. RTGS, SBP Bank Account Transfer or Banker’s Cheque).4. Other bank, as per its internal procedure, would obtain approval of Other Bank transfer of Cash through above decided method. The Other Bank would provide to KMBL Branch, a written confirmation* on the submitted request letter regarding cash requirement.5. Other Bank * Verbal confirmation can be accepted to proceed with, however, written confirmation must be obtained at the time of cash collection from the other bank.6. OM/ BM would send a scanned copy of the said confirmed request OM/ BM to CMD via email, with a copy to ACO/ AM and CM. On receipt of such letter by the branch, CMD would arrange for7. inter-bank funds transfer as per their internal procedures and CMD would inform the branch for collecting funds from the other bank.8. Upon receipt of email from CMD, CIT Services would be arranged OM/ BM for transfer of Cash from relevant Other Bank to KMBL Branch9. Physical delivery of cash would be obtained by the branch from the Designated Other Bank. Officer/OM/BM10. CMD would be informed regarding successful cash movement via OM/ BM email, with ACO/ AM and CMO in loop.11. Original confirmed request letter would be kept for records along OM/ BM with abovementioned email trails.Cash should be handed over/ received in dual control in the presence of CO/ OM. Shipmentreceipts must be file in a separate file for records and evidence.Designated officer for cash movement should not be staff on contractKIM – I Handbook; Version 1 Page 36 of 43

Operations Department, KMBL 6.8. TERM DESPOSITS – CHAPTER 12 OF KIM-1Deposits held with the bank for a fixed term. At KMBL, following types of Term/ fixed Depositproducts are offered to its deposit holders: Khushhali Amadani Certificate (KAC) Khushhali Izafa Certificate (KIC)Following are the critical phases of a term deposit lifecycle:i. Term Deposits Bookingii. Term Deposits Maturity/ Rolloveriii. Term Deposits Term Deposits Pre-Mature Encashment/ Early Maturityiv. Term Deposits Lien Markingv. Term Deposits Lien RemovalDetailed process of each of the abovementioned phases is given below: 6.8.1. TERM DEPOSITS BOOKING – CLAUSE 12.1 OF KIM-1KMBL offers term deposit products to its account holders only. There is no booking of termdeposits against cash or to walk-in customers, unless a relationship with the bank is establishedprior to term deposits booking. Following are the procedure of term deposits booking:Steps Description Responsibility 1. Customer enters the branch and requests the branch staff/ CSO for Customer 2. TD issuance. CSO CSO, after greeting the customer and verifying his/ her being in a 3. CASA relationship with the bank, briefs the customer about KMBL CSO TD products (i.e. profit rates, profit disbursement options, maturity/ rollover options etc.). Upon customer’s decision for a particular product, CSO presents the customer a Term Deposit Application Form (TDAF, Annexure KIM – 0010). * CSO may facilitate the customer in filling the TDAF. After the form is filled and signed by the customer, CSO will verify4. the signature/ thumb impression of the customer with those CSO registered in system. CSO would check for sufficiently available funds in the account for5. the TD to be booked. In case of insufficiency, customer would be CSO advised to deposit the rest of the funds in his/ her account so that TD may be issued. CSO would check if the transaction amount is in line with customer’s6. KYC/ CDD details registered in the system. In case of any mismatch, OM the case may be referred to OM/ BM for review/ profile updation, if required.KIM – I Handbook; Version 1 Page 37 of 43

Operations Department, KMBL After due verification and checking, CSO would forward the case to OM/ BM for obtaining TD booking approval, from Manager Liability Sales (MLS) at Corporate Office, on TD Approval Matrix (Annexure KIM-0101).7. CSO * Head Retail Banking/ National Distribution Manager shall approve the TD booking in case of MLS’ absence. In case of exceptional rates to be offered to the customer, approval from Head Retail Banking is mandatory.8. OM/ BM would initiate the case for TD booking approval. OM/ BM9. Once approval is obtained, CSO would be advised to further proceed CSO with TD booking process. CSO would forward the earlier filled TDAF to OM/ BM for approval10. and sign-off in line with ASB and authorized signatory categories as CSO mentioned below. There are two categories of signatories in branches: a. Authorized Signatory A Category b. Authorized Signatory B Category11. Authorized signatories on the TDAF would be as follows: CSO TD exceeding Rs. 500,000/- will be signed jointly by two “A” category signatories and TD for less than Rs. 500,000 will be signed by one member from “A” and one of “B” category. Duly approved and signed-off TDAF would be forwarded to Liability12. Processing Desk – BTU, along with approval email and other related CSO documents (Zakat indemnity, if applicable, etc.), for processing via scan/ fax.13. In line with their internal procedures, TD would be booked in the BTU system by BTU within pre-defined TAT of 30-45 minutes. CSO/ OM would check the TD booking in the system after due time,14. and coordinate with the concerned desk at BTU for resolution on CSO/ OM same date. Once booked, CSO would take a print out of the said TD on a pre-15. numbered TD Certificate (TDC, security stationery) provided at CSO branches.16. After obtaining signatures from the authorized signatories on TD CSO certificate, the same would be handed over to the customer.17. Acknowledgement would be obtained from the customer on a copy CSO of TDC, and the same would be filed along with TD issuance request. TDC number and TD’s maturity date would be recorded on the TDAF18. and will be dispatched to BTU (along with related documents/ CSO approvals) in original for archival.KIM – I Handbook; Version 1 Page 38 of 43

Operations Department, KMBL 6.8.2. TERM DEPOSITS MATURITY/ ROLLOVER – CLAUSE 12.2 OF KIM-1At the time of booking of a TD, customer has the following options to choose from when his/her TD matures:The customer may choose to: i. Get the principal TD amount along with profit to be TRANSFERRED to his/ her current/saving account.ii. Re-book the TD for next term (principal amount only) and the profit thereon will be transferred to customer’s current/saving account.iii. Rebook the TD principal amount along with profit for next term (offered in KAC product only)All the above mentioned activities are system driven and take place automatically, as agreed bythe customer and fed into the system at the time of TD booking.Income Tax and Zakat (as applicable) will be deducted by system on maturity/ rollover in linewith applicable laws as mentioned in section 12.6, page 127 of KIM – I Version 6.0. 6.8.3. TERM DEPOSITS EARLY ENCASHMENT/ PRE-MATURE ENCASHMENT – CLAUSE 12.3 OF KIM-1Customer may approach the branch to encash his/ her term deposit before completion ofagreed tenure. In this case, pre-mature encashment of the said TD would be carried out. theprofit rates for early/ pre-maturely encashed term deposit will be shelved down in line withBank’s policy and product features. Below mentioned is the procedure to be followed for pre-mature encashment of TDs.Steps Description Responsibility 1. Customer visits the branch and approaches the branch staff (CSO) Customer 2. for early encashment of TD. CSO CSO would provide the customer with Term Deposit Early 3. Encashment Request (Annexure KIM – 0102). Customer Customer would duly fill and sign-off the request and hand it over to 4. CSO. 5. 6. * CSO may facilitate the customer in filling the request form. CSO 7. Customer would hand over the request to CSO, who would verify customer signature/ thumb impressions from System, and forward OM/ BM the documents to OM/ BM for review and approval. CSO OM/ BM would review the case and would approve early OM/ BM encashment. CSO will execute early/ pre-matured encashment process in the system. The request would be sent for OM/ BM authorization in the system, who would authorize the transaction.KIM – I Handbook; Version 1 Page 39 of 43

Operations Department, KMBL Income Tax and Zakat (as applicable) will be deducted by system in 8. line with applicable laws as mentioned in section 12.6, page 127 of CSO KIM – I Version 6.0. 6.8.4. TERM DEPOSITS LIEN MARKING – CLAUSE 12.4 OF KIM-1Lien is marked on TD that a customer pledges against any loan/ borrowing that they avail fromthe bank. Lien on TDs is marked on KMBL’s TDs as required under KMBL’s Credit Product Suitand Credit Administration Procedures. Following is the procedure for marking lien on such TDs.Steps Description Responsibility 1. Customer visits the branch and approaches the branch staff (CAO/ Customer RM) for lien marking on TD. 2. CAO/ RM would prepare a TD Lien Marking Memo (Annexure KIM- CAO/ RM 0104) and would forward the same to CSO/ OM after obtaining approval from BM. CSO/ OM would check the request to ensure completion and proper approval. CSO/ OM would ensure that roll-over instructions of the said TD are3. either ‘Principal’ or ‘Principal plus Profit’. In case the instructions are CSO/ OM of transferring the principal and profit to account at the time of maturity, same would be updated to either of the former two by obtaining a TD Rollover Instruction Form (Annex KIM – 0103) from the customer. Once the instructions and documents are found to be in order, Lien Marking Request and related documents (rollover instruction etc.)4. would be forwarded (via fax/ email) to Liability Processing Desk – CSO/ OM BTU to mark the said TD as “Lien” in system (BE). Original TD Lien Marking Memo will be filed at branch in a separate file.5. BTU would mark the lien on said TD as mentioned in the Lien BTU Marking Request Form. 6.8.5. TERM DEPOSITS LIEN RELEASING – CLAUSE 12.5 OF KIM-1Once customer’s liability is paid off to the bank, the bank (either at its own or on customer’srequest) would remove lien from the TDs against which loan was obtained. Following is theprocedure for removal of lien from TDs:Steps Description Responsibility 1. At the time of loan pay off or on customer’s request after paying off RM/ LO the loan, respective RM/ LO would forward the borrower ledger 2. (confirming of zero receivable and the loan settlement) to CSO/ OM. CSO CSO will retrieve Lien Marking Memo (Annex-KIM0104) of respective TD and will update the Memo (release related section). Same would be forwarded to OM/ BM for obtaining their approval/ signatures.KIM – I Handbook; Version 1 Page 40 of 43

Operations Department, KMBL After obtaining relevant approvals, CSO would forward the lien3. release request to Liability Processing Desk – BTU for marking lien CSO release in the system.4. BTU would mark the lien on the said TD released as per their BTU internal procedure.5. Once released, original Lien Marking Memo would be separately CSO filed in TD lien release file.6.9. ACCOUNT OPENING PROCEDURE – CLAUSE 4.10 OF KIM-1Steps Description Responsibility 1. Customer walks into the branch and asks to open an account with Customer 2. the bank. CSO 3. Customer will be presented with AOF and One SS Card to fill, and 4. will be advised to furnish required documents as per nature of CSO 5. account. CSO may assist the customer in filling of AOF etc if CSO required. CSO 6. Customer will be enquired regarding the purpose and nature of 7. account as per AML/CFT guidelines CSO/LO/RM Obtain photocopy of CNIC/ SNIC or Passport (in case of Foreign Nationals) and other documents depending nature of account. CSO Verify the photocopy of documents with original and mentioned OM Original Seen with signature and stamp on the photocopy of the documents. Branch staff/ Sales team will facilitate the customer to fill Account Opening Form (Annex-KIM0009) and collection of relevant documentation as advised in account opening documentation requirement guidelines. The case would be forwarded to OM for customer’s identity verification through NADRA/NARA (as applicable). OM would extract NADRA Verisys of the said customer. In case of non-verified CNIC customer may be referred to contact NADRA.8. In certain cases message “further proof of identity & address may be required” appears on Verisys. In such cases, customer will be asked to furnish any other identity document e.g. driving licenses, passport, educational testimonials, domicile, Nikah Nama etc. If the customer does not have any other/such documents, a verification letter (Annex-KIM0010), duly attested by a Gazzetted officer, should be submitted by the customer.9. Customer’s name and CNIC/ SNIC number would be verified/ OM checked in SDN/ OFAC/ NAB/ Black listed file In case the name/ ID is matched in any of the abovementioned lists, OM10. requested banking service (account opening, loan processing, and remittance issuance on cash) would be declined. ComplianceKIM – I Handbook; Version 1 Page 41 of 43

Operations Department, KMBL Department, if required, will be immediately informed for further necessary action. In case(s) customer’s name and ID is clear, OM takes a print of screen shot of as evidence (Name & ID #) attaches the same with AOF as illustrated in Annex-KIM0011 of KIM Version 6.0. The same would be ensured at Business Transaction Unit (BTU) that the respected “not found” screen shot is attached with AOF, LAF. After completion/ filling of AOF, CSO will get customers signatures/ thumb impressions on; a) AOF b) S.S. Cards11. c) Indemnities (if applicable) d) Any mistake, cutting or over-writing (shall be verified by CSO/ OM as well by affixing his/her signatures). e) Other documents where customer’s signature/ thumb impression required. ‘Approved to Process’ stamp will be affixed on the signature card. CSO/OM12. (Customer Signature on SS card must be obtained/ admitted by designated officer or Operations Manager).13. Completion of all required documents and formalities is to be CSO ensured as per account nature.14. AOF along with all relevant set of documents will be forwarded to CSO OM/BM for necessary review and approvals.15. OM/BM being the supervisory role would ensure completion of CSO/OM required CDD and KYC procedures. A quick account will be opened in the system (BE) by filling the CSO relevant fields in the system according to information filled in AOF. The AOF and related documentation would then be forwarded to16. OM/ BM for review/ authorization. (In case non deduction of Zakat for saving account, Valid CZ-50 declaration, or valid exemption Certificate according to Zakat & Usher Ordinance1980 will be required as per applicability)17. Copy of account opening form handed over to customer with due CSO/OM acknowledgment. Duly filled AOF (with no columns left blank), along with allied OM/BM18. documents will be reviewed for customer profile, risk classification, SBP code classification etc. At the end of the day (EOD), AOF along with the set of documents, CSO will be dispatched to BTU. A checklist (Annex – KIM0015) for19. Individual/Joint Accounts and (Annex – KIM0015a) for Business Accounts will be attached with each AOF, carefully marking (√) for each attached document. The same would be reviewed by OM/BM prior to forwarding to BTU.KIM – I Handbook; Version 1 Page 42 of 43

Operations Department, KMBL All AOFs and allied documents with Annexure-KIM0015 and OM/BM20. Annexure-KIM0015a will be finally reviewed and scrutinized for any discrepancies, and sent to BTU. In line with BTU Procedures, in case of any discrepancy/ short- BTU21. coming noted, the AOF would be marked as discrepant, and may be held at BTU for rectification or returned to branch (depending on the nature of discrepancy). Branch would be required to remove the highlighted discrepancy, CSO/OM22. mark rectification on rejection memo and re-send AOF to BTU along with updated checklist for further processing at their end.Account Opening Form’s Critical Stamping at Branch End:OM/ Designated Officer would affix the following stamps on Account Opening Form at branchbefore forwarding the case to BTU:1. For photo accounts, OM will affix stamp (Care Photo A/c) and sign at top left of photo pasted on AOF at page 4.2. OM will affix following stamp and sign at page 8 (last page of Term & Condition) Approved to Process Operations Manager ____________ Branch3. Designated authorized officer, after opening quick account in BE, affix ‘Posted’ stamp and sign at page 8 (last page of Term & Condition) as processor.4. For borrower’s accounts, Address verification stamp and sign at page 3 by LO5. For any cutting/ over writing, customer will affix his/ her complete signature verified by the OM as “s.v.” alongwith OM/BM’s initial (OM stamp is not required)Signature & Stamp on Allied Documents 6. OM will affix his/her sign & stamp (approved to process) on any document as required in KIM (A/c opening request etc) 7. For all photocopies (including CNIC), ‘Original Seen’ stamp would be affixed by OM (by LO in case of Borrower A/c) with initials. For company/entity account photocopies duly attested by entity’s officials would suffice.Signature & Stamp on SS Cards 8. For Photo Account, OM will sign and stamp at the top left of photo ‘Care Photo A/c’ pasted on SS Cards 9. OM will affix sign and stamp ‘Approved to Process’ at Approved By section of SS Card.By affixing his/her signatures as “Approved to Process”, OM will be responsible for and denotes, 1. That he/she has reviewed and scrutinized the documents in detail. 2. That the contents of the documents are valid and appropriate 3. That the documents are appropriate in all aspects and comply with KIM and regulatory requirement; and can be processed. 4. That he/ she has verified customer’s signatures from specimen signatures provided by the customer in person 5. That customer’s signature is admitted for account operations. -Document Ends-KIM – I Handbook; Version 1 Page 43 of 43