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INTERNSHIP

REPORT
On

Bank Alfalah Limited

DEPARTMENT OF BUSINESS ADMINISTRATION


GUJRANWALA CAMPUS

PREFACE

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Internship is the one of the crucial part of the MBA course and this provide the

practice knowledge of what students read about business in their books. Internship

report is prepared to full fledge analysis of an organization. As this is the only field

experience that students before entering practically into the market.

During our internship we had been rotated different departments as accounts,

bills and remittances, cash, credit, foreign exchange & internet banking etc. this

movement and working provide a completely knowledge of their working to us, they

also explained each and every concept to make us clear. This knowledge and practical

experience was the thing which help we have completed the internship report.

Executive Summary

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I have completed my 6 weeks internship at Alfalah Bank of Pakistan. I tried my best to

gain something practically from this opportunity. This report starts from the introduction of

word ‘Banking’, and then History of Alfalah Bank of Pakistan. History of Alfalah Bank

shows that how it helps its Nation and Country in both war & peace.

Bank Mission statement & Vision shows its focus on overall performance of the bank and

quality of services and products.

After restructuring of the bank the objectives of the bank are changed. Now it has

objectives to overcome past mistakes, realize the real importance of customer so now it has

main objective to achieve customization.

Bank also provides facility of L.C to support export and import in the region.

SWOT analysis of Alfalah Bank of Pakistan shows that it has small number of strengths

and lot of weaknesses. The bank should give attention to this drawback. But bank has lot of

opportunities to improve its quality of services, and do efficient banking. Bank should give

proper attention to overcome its threats.

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INTRODUCTION

Following privatization, Bank Alfalah emerged as new identity of Habib Credit and
Exchange Bank with a revived purpose and commitment. Charged with the strength of Abu
Dhabi consortium and under the leadership of his Highness Sheikh Nahayan Mubarak Al
- Nahayan, the bank has already made significant conditions in building and strengthening
both corporate retail banking sector in Pakistan.

Designing the product portfolio of bank response to the customer’s preferences, the product
like Royal Profit, Royal Patriot and Royal Custodial are prime examples of quality and
innovation providing timely banking opportunities to customers of bank.

Assessment of the needs and wants of the customers is an on going process at Bank
Alfalah, which helps to continually develop new products and services. To continuously
offer courteous, professional and advanced banking solutions, the team of bank has
recently been rejuvenated by going though training programs with a focus on information
technology.

To make their banking solutions become accessible to more and more people, they have
embarked upon a rapid expansion program, aiming to provide a networking that makes the
services available to any of their customers in all the major urban centers of Pakistan - with
a view to go international in the future.

With their key indicators of progress already soaring to new heights, the bank is committed
to dedicate all its energies, resources and time to bring higher value and satisfaction to their
customers, employees and shareholders.

The graph of bank is going up and up every year. The ratio of profit is increasing at good
percentage. Thy bank is serving the people at high level of standard by going according to
the whishes of the customers.

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BANKING SECTOR

At the time of independence in 1947, there were 38 scheduled banks with 195 offices in
“Pakistan” but by December 31,1973, there were 14 scheduled Pakistani commercial banks
with 3,233 offices all over Pakistan & 74 offices in foreign countries.

Nationalization of Banks was not done 1st January 1974 under the Nationalization act 1974,
due to certain objectives. But it had negative effects on efficiency of the of the banking
sector afterwards a privatization Commission was set up on January 22, 1991, the
commission transferred many banks to the private sector i.e., MCB & ABL. The
government approved & permitted the establishment of 10 new private banks in 1991;
hence many new private banks have incorporated, since then, BANK ALFALAH in one of
the namely established private scheduled banks in Pakistan.

Commercial banks operating in the country can be divided into four distinct categories,
private banks, foreign banks, privatized banks and nationalized commercial banks (NCB’s).
The number of private banks has remained almost constant ever since they commenced
operations in early nineties, with the exception of Indus Bank that is under liquidation.
However, ownership of a number of private banks has changed over the years. Lately, with
the take over of Prudential Bank and Platinum Bank by the new sponsors their names were
changed to Saudi Pak Commercial Bank and KASB Bank respectively. Earlier, ownership
of Union Bank and Schon Commercial Bank changed. While the new sponsors of Union
Bank preferred to continue with the same name, the buyers of Schon Commercial Bank
changed its name to PICIC Commercial Bank.

Union Bank acquired the operation of Emirates Bank International (EBI) in Pakistan. The
scheme of amalgamation was notified by the central bank on September 03, 2002 and
Union Bank settled the amalgamation price of US$ 37 million on September 09, 2002.
Union Bank had acquired Pakistan operations of Bank of America in year 2000 and
American Express credit card business in Pakistan in year 2001.

In the NCBs category two banks — Habib Bank and National Bank of Pakistan — have
been left after the privatization of United Bank. National Bank of Pakistan has been listed
at local stock exchanges and part of its shares were off loaded. The GoP is actively
pursuing the privatization of Habib Bank, through sale of its 26% shares along with

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transfer of management. The remaining shares of the GoP in Muslim Commercial Bank
and Bank Alfalah were also sold. The GoP sold majority shares of Allied Bank of

Pakistan in early nineties but has not been able to off load its remaining shares in the bank.

United Bank's privatization demands specific mention for two reasons:

1) It was the largest transaction, and

2) A large part of sale proceeds was received in foreign exchange.

The consortium comprising of Abu Dhabi Group and Bestway Group has acquired 51%
shares of the bank along with management control. Since October 2002 the bank has been
working under the new sponsors.

Meezan Bank was created as a result of merger of Al-Meezan Investment Bank and Societe
Generale. The first ever license to operate as a Scheduled Islamic Commercial Bank was
granted to Meezan Bank on January 31, 2002. Pakistan operations of Societe Generale
were amalgamated into Meezan Bank on May 01, 2002. At the end of year 2002 it had six
branches, three in Karachi and one each in Islamabad, Lahore and Faisalabad.

The number of foreign banks operating in Pakistan has been declining constantly since the
GoP decided to freeze foreign currency accounts in May 1998. The total number of foreign
banks in the country has reduced to half since the freezing of foreign currency accounts.
The positive point is that most of the foreign banks were able to sell their Pakistan
operations at attractive prices. Operations of ANZ Grindlays Bank have been fully
amalgamated into Standard Chartered Bank as a result of global merger.

KEY PLAYERS

ASKARI COMMERCIAL BANK has posted Rs 687 million profit after tax for the year
2002 as compared to a profit of Rs 551 million for the previous year. The Board of
Directors also announced 20% dividend and issue of 5% Bonus Shares subject to the
approval of issue of Bonus Shares by the SECP. The bank had distributed 20% dividend
among its shareholders for the year 2002 and also issued 5% Bonus Shares. The Bank
transferred Rs 137 million to statutory reserve and Rs 284 million to revenue reserve.

EPS improved from Rs 5.06 for the year 2001 to Rs 6.32 for the year 2002.

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BANK AL HABIB has posted Rs 290 million profit after tax for the year 2002 as
compared to a profit of Rs 246 million for the previous year but bid not announce any
dividend. The Board of Directors has approved issue of 20% Bonus Shares. The bank had
paid 5% dividend and also issued Bonus Shares at the end of year 2001. Though there was
increase in total income, total expenditure also went up. Total income grew from Rs 1,090
million to Rs 1,383 million. Non-mark-up/interest expenses went up from Rs 539 million to
Rs 763 million. EPS improved from Rs 2.84 for the year 2001 to Rs 3.35 for the year 2002.

BANK OF PUNJAB has posted Rs 284 million profit after tax for the year 2002 as
compared to a profit of Rs 236 million for the previous year. The Board of Directors
approved distribution of 17.5% dividend among the shareholders for the year 2002. The
bank had distributed 15% dividend to its shareholders for the year 2001 and also issued
Bonus Shares amounting to over Rs 24 million last year. The Bank transferred Rs 56.8
million to statutory reserve and Rs 50 million to general reserve. EPS improved from Rs
2.35 for the previous year to Rs 2.83 for the year 2002.

BOLAN BANK has posted Rs 3.7 million profit after tax for the year 2002 as compared to
a profit of Rs 8.7 million for the previous year. EPS declined from Rs 0.17 for the year
2001 to Rs 0.07 for the year 2002. It is worth noting that profit before tax improved from
Rs 10 million for year 2001 to Rs 24.7 for the year 2002. However, due to higher
appropriation for tax for the year 2002, profit after tax declined substantially. Tax
appropriation went up from Rs 1.3 million to slightly more than Rs 21 million.

FAYSAL BANK has posted Rs 656 million profit after tax for the year 2002 as compared
to a profit of Rs 410 million for the previous year and also announced 17.5% dividend. It
had distributed 10% dividend to its shareholders for the year 2001. The improvement in
profit was driven by higher income, going up from Rs 1,489 million to Rs 1,877 million.
There was decrease in fee-based income but increase in dividend income. Fee, commission
and brokerage income went down from Rs 242 million to Rs 205 million. Dividend income
grew from Rs 208 million to Rs 391 million. However, there was increase in non-mark up
expenses, going up from Rs 534 million to Rs 622 million, mainly due to rise in
administrative expenses. EPS improved from Rs 1.55 for the year 2001 to Rs 2.48 for the
year 2002.

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KASB BANK (formally Platinum Commercial Bank) has posted Rs 114 million loss after
tax for the year ending December 31, 2002 as against a loss of Rs 67.5 million for the
previous year. The results pertain to the operations under the previous management as the
new sponsors took over the management in October 2002. The change in name was
brought subsequent to the notification of the central bank dated February 21, 2002. It is
expected that the combination of services which the bank will have access to will be
unique. Once corporate reorganization is complete, the bank will have a majority stake in
KASB Leasing and a 100% stake in Khadim Ali Shah Bukhari & Company (KASB).
Hence, the client base at large will not only have access to commercial and consumer
banking services, but to lease financing, equity and debt securities broking, investment
banking and investment advice.

MEEZAN BANK has posted Rs 223 million profit after tax for the year 2002 as against a
loss of about Rs 54 million for the previous year. However, it must be kept in mind that
2002 was the first year of operations as a full-fledged scheduled commercial bank. The
total financing portfolio of the bank as on December 31, 2002 amounted to Rs 3.53 billion.
As of the balance sheet date the bank did not have any overdue or defaulting accounts. The
bank has introduced Islamic Export Refinance Scheme. This has, for the first time in
Pakistan, enabled exporters to avail financing at concessional rates under a Shariah
compliant scheme,

METROPOLITAN BANK has posted Rs 430 million profit after tax for the year 2002 as
compared to a profit of Rs 335 million for the previous year and also announced 20%
dividend. It did not distribute any dividend to its shareholders for the year 2001 but issued
25% Bonus Shares. The improvement in profit was driven mainly by higher income, going
up from Rs 1,112 million to Rs 1,362 million. There was increase in fee-based income and
dividend income. Fee, commission and brokerage income went up from Rs 168 million to
Rs 235 million. Dividend income grew from Rs 1.7 million to Rs 11.4 million. However,
there was increase in non-mark up expenses, going up from Rs 369 million to Rs 486
million, mainly due to rise in administrative expenses. EPS improved from Rs 3.35 for the
year 2001 to Rs 4.30 for the year 2002.

MUSLIM COMMERCIAL BANK has posted Rs 1,739 million profit after tax for the
year 2002 as compared to a profit of Rs 1,108 million for the previous year. This is the
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first year in the history of MCB and in the banking sector that two interim announcements
were made, 10% Bonus Shares and 25% dividend besides 15% final Bonus Shares.
Another achievement was that the bank did not make provision for diminution in the value
of investment and also against non-performing loans and advances. However bad debts
worth Rs 721 million were written off directly. Deposits went up from Rs 154.5 billion to
Rs 182.7 billion. Advances grew from Rs 76.6 billion to Rs 78.9 billion. Value of
investments went up from 55.4 billion to Rs 89.6 billion.

NATIONAL BANK OF PAKISTAN has posted Rs 6 billion profit before tax for the year
2002, a record profit in the history of banking sector in Pakistan. Profit after tax came to Rs
2.253 billion as against a profit of Rs 1.148 billion for the year 2001. The key factor behind
this increase was no more amortization of deferred cost. The bank has made the final
provision of Rs 2.7 billion against this head in year 2001. The Board of Directors approved
payout of 12.5% dividends and issue of 10% Bonus Shares. The bank had also distributed
12.5% dividend for the year 2001.

PICIC COMMERCIAL BANK has posted Rs 319 million profit after tax for the year
2002 as compared to a profit of Rs 112 million for the previous year. The Board of
Directors approved issue of 30% Bonus. The bank had not distributed any dividend to its
shareholders but issued Bonus Shares amounting to Rs 125 million for the year 2001. The
Bank transferred Rs 63.85 million to statutory reserve. EPS improved from Rs 1.78 for the
year 2001 to Rs 4.30 for the year 2002. The bank opened 22 new branches during the year
2002 and has received permission to open another 22 branches during the year 2003.

PRIME COMMERCIAL BANK has posted Rs 176 million profit after tax for the year
2002 as compared to a profit of Rs 153 million for the previous year and also announced
10% dividend. The bank did not distribute any dividend to its shareholders for the year
2001. Total income went up from 603 million to Rs 822 million. However, there was

increase in non-mark up expenses, going up from Rs 362 million to Rs 516 million, mainly
due to the rise in administrative expenses. The factors contributing to higher profit were
decline in provision against non-performing loans and advances, and increase in
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income/gains from trading in government securities. EPS improved from Rs 1.51 for the
year 2001 to Rs 1.74 for the year 2002.

SAUDI PAK COMMERCIAL BANK achieved substantial growth during the year
ending December 31, 2002. This remarkable performance was due to the enormous
improvement in its corporate image. The bank posted Rs 202 million profit after tax for the
year 2002 as against a loss of Rs 182 million for the previous year. Deposits increased by
156% to Rs 12,340 million and advances by 95% to Rs 9,753 million. The credit deposit
ratio improved from 104% to 79%. Investments including lending to financial institutions
also grew by 166% to Rs 7,410 million. The total asset base doubled, from Rs 9,513
million to Rs 19,617 million. Non-performing advances of Rs 640 million were regularized
during the year. The ratio of performing advances to total advances improved markedly
from 29% in year 2001 to 69% for the year 2002. However, a real concern for the investors
is that the bank still carries accumulated losses of over Rs 811 million.

SONERI BANK has posted Rs 350 million profit after tax for the year 2002 as compared
to a profit of Rs 270 million for the previous year and also announced 10% dividend. It did
not distribute any dividend to its shareholders for the year 2001 but issued 30% Bonus
Shares. The improvement in profit was driven by higher income, going up from Rs 915
million to Rs 1,073 million. There was increase in fee-based income but income from
dealing in foreign currencies decreased. Fee, commission and brokerage income went up
from Rs 111 million to Rs 133 million. Income from dealing in foreign currencies came
down from Rs 348 million to Rs 184 million. Other income grew from Rs 77 million to Rs
175 million. However, there was increase in non-mark up expenses, going up from Rs 364
million to Rs 452 million, mainly due to rise in administrative expenses. EPS went up from
Rs 2.66 for the year 2001 to Rs 3.44 for the year 2002.

UNION BANK has posted Rs 286 million profit before tax for the year 2002 as compared
to a profit of Rs 9 million for the previous year. The bank posted Rs 286 million profit
before tax for the year 2002 but an appropriation of Rs 122.5 million reduced profit after

tax to Rs 163 million. The Board of Directors did not approve distribution of dividend. EPS
improved from Rs 0.43 for the year 2001 to Rs 1.34 for the year 2002. The bank is
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following an aggressive marketing strategy well supported by investment in technology.
This has resulted in heavy administrative expenses, going up from Rs 1,056 million to Rs
1,591 million.

UNITED BANK has posted Rs 1,414 million profit after tax for the year 2002 as
compared to a loss of Rs 7,478 million for the previous year. The loss for year 2001 was
mainly due to an extraordinary item amounting to Rs 7,200 million. The increase in profit
of the bank can be attributed to higher income, lower provision against non-performing
loans and lower appropriation for tax. Total income went up from Rs 6,643 million to Rs
8,173 million. Provision against non-performing advances came down from Rs 1,488
million to Rs 852 million.

BANK ALFALAH has posted Rs 445.7 million profit after tax for the year 2002 as
compared to a profit of Rs 310.6 million for the previous year. EPS improved from Rs 3.65
for year 2001 to Rs 4.46 for the year 2002. The Board of Directors approved distribution of
20% dividend to the shareholders and issue of 33.33% Bonus shares. Net mark-up/interest
income grew from Rs 891 million to Rs 1,463 million. Non mark-up income went up from
Rs 377.9 million to Rs 615.4 million. However, non mark-up/interest expenses also hiked
from Rs 744 million to Rs 1,184 million. Investments went up from Rs 11,396.6 million to
Rs 24,694.4 million. Advance went up from Rs 19,131.5 million to Rs 28,319.4 million.
Deposits went up from Rs 30,207 million to Rs 51,685 million.

STANDARD CHARTERED BANK has released the financial accounts for the year 2002
after amalgamation of ANZ Grind lays Bank into it. The bank has posted Rs 1,408 million
profit after tax for the year 2002 as compared to the combined profit of Rs 396 million for
both the banks for the year 2001. Customer deposits grew from Rs 51,643 million to Rs
55,525 million. Customer advances went up from Rs 38,096 million to Rs 17,653 million.
The most remarkable feature was nearly three-fold increase in investment, going up from
Rs 5,817 million to Rs 17,653 million. As the bank continued to add new products and
further improve the level of customer support, there was increase in administrative
expenses also, going up from Rs 598 million to Rs 1,195 million.

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CITIBANK has posted Rs 1,064 million profit for the year 2002 as compared to a profit of
Rs 847 million for the previous year. Among the foreign banks, Citibank has recorded the
highest capital gains on investments, going up from a meager of Rs 30 million to Rs 364
million. While the bank experienced decline in deposits and advances, there was

Substantial increase in investments. Deposits came down from Rs 41,506 million to Rs


40,838 million. Advances declined from Rs 27,119 million to Rs 25,657 million.
Investments went up from Rs 6,799 million to Rs 11,280 million.

ABN AMRO BANK has improved its profit after tax from Rs 732.5 million for the year
2001 to Rs 1,025.5 million for the year 2001. The investment by the bank in technology
and introduction of new value-added products and services has started yielding results.
There was marginal increase in deposits, going up from Rs 34,192 million to Rs 34,696
million. Advances grew from Rs 23,861 million to Rs 25,141 million. Investments came
down from 9,317 million to Rs 8,935 million.

DEUTSCHE BANK has posted a meager profit of Rs 119 million for the year 2002.
However, it should be looked as an achievement because the bank had posted heavy loss
for the year 2001. The declining trend was witnessed in deposits, advances and
investments. Deposits came down from Rs 3,994 million to Rs 2,701 million. Advances
declined from 3,169 million to Rs 2,293 million. Investments plunged from Rs 571 million
to Rs 304 million.

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INTRODUCTION TO BANK ALFALAH

Bank of Credit & Commerce International (BCCI) was a Pakistan based bank, established
by Mr.Agha Hassan Abdi from UBL, in association with U.A.E and Europe. BCCI has its
branches in 74 different countries of the world. It had its 3 branches in Pakistan. In 1991,
the BCCI was banned, when it was accused by European countries that the bank was
involved in some illegal operations with Gulf countries. The major reason behind European
accusation was that BCCI was of Islamic mode. Therefore, the bank was closed due to
international pressure. Then, its 3 Pakistani branches were taken over by the Government
of Pakistan, which were named as Habib Credit and Exchange Bank (HCEB) and these
were working as subsidiary of Habib Bank Limited.

Following the privatization in July 1997, Habib credit and Exchange Banned assumed the
new identity of Bank Alfalah on February 25, 1998. It is now Abu Dhabi based bank as the
family of Sheikh Nahayan Mubarik Al Nahayan purchased 70% of its shares and 30%
shares remained with Habib Bank on behalf of Government of Pakistan.

The development of various sectors in Pakistan. The bank has already made significant
contribution in building and strengthening both corporate and retail banks sector in
Pakistan. Assessment of the needs and wants of customer is an on going process at Bank
Alfalah, which help to centennially develop new products of services. Designing the
product portfolio in response to royal patriot, royal custodial, Alfalah car finance, Alfalah
rupee traveler cheques, home loans are prime example of quality innovation providing
timely banking opportunities to customer. To continuously offer courteous, professional
and advanced banking solution the team of bank has recently been rejuvenated by going
through training programs with focus to information technology.

With their key indicators of progress a steady soaring to new heights, the bank is
committed to dedicate all its energies, resources and time to bring higher value and
satisfaction to their customers and employers.

The graph of the bank is going up and up every year. The ratio of profit is increasing at a
good percentage. The bank is serving the people at high level of standard by according to
expectation of customers.
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FINANCIAL HIGHLIGHTS

Bank Alfalah has grown 51.84% in its total assets and 101.35% in its equity. The Bank
netted record pre tax profit of Rs. 3.506 billion, a 291.85% increase over the corresponding
period last year (2004), which includes capital gains on Federal Government securities of
Rs. 2.19 billion. The deposits of the Bank rose to Rs. 76.7 billion which is 48.4% higher
than corresponding period last year (2004) and indicative of increasing customers’
confidence in your Bank, because of its superior services and healthy practices.

The Loans and Advances figure stood at Rs. 50.37 billion, an increase of approximately
71% over the last financial year (2004). This portfolio has been supplemented keeping the
Bank’s stringent and prudent policies in view.

BRANCH NETWORK AND CONSUMER BANKING

The Bank is fully aware that the branch network has direct implications on the services that
it provides to its customers. In the year 2005, nine (73) commercial banking branches and
five (5) Islamic banking branches were added to the Bank Alfalah network extending our
coverage to one hundred one (101) branches in twenty-three (23) cities nationwide. We are
confident that a well integrated branch network, offers greater potential for serving a larger
client base through high value products.

Bank Alfalah continually endeavors to develop a wider spectrum of innovative financial


products based on consumer needs. The Alfalah Visa Card has been recognized by the
Visa International as the first credit card in South Asia to have crossed the100,000th mark
in the shortest timeframe.

Alfalah Car Finance is another market leader offering superior value and convenience to
its clients. At the end of 2003, its portfolio crossed Rupee five billion marks.

Consumer durable financing was launched in August 2003. This product too has also met
a considerable success in the market. Similarly, the overwhelming response received to the
Home

Financing scheme launched by the Bank during the last quarter of 2003 offers great
potential of becoming yet another important product of the Bank.
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In the latter half of 2003, Phone Banking was launched with a view to establish a more
direct contact with our clients. This support centre has greatly facilitated the overall sales
efforts of the Bank.
Alfalah has emerged as one of the leading commercial banks in the financial sector of
Pakistan. Charged with strength of Abu Dhabi consortium and under the leadership of his
highness Sheikh Nahayan Mubarak, minister of higher education and scientific research
and prominent member of Royal family. The bank is energized with vision, envisaging.

CREDIT PORTFOLIO

A depressive interest rate environment has spurred the competition for scarce banking
assets in local financial industry. While Bank Alfalah remains a key player in the market,
however, it treads with caution so that the quality of its credit portfolio is not compromised.

The Bank has employed a proactive approach in the form of a well-designed and
transparent credit approval process. This process benefits from an inherent system of
checks and balances at each level.

FOREIGN TRADE, CORRESPONDENT BANKING AND


TREASURY OPERATIONS

Bank Alfalah offers high quality service to its foreign trade clients. Customers are assured
of efficiency and timeliness when dealing with their overseas counterparts. Our clients
enjoy the benefit of our well integrated global correspondent-banking network giving them
greater global reach. This comprises more than 200 financial institutions all over the world
signifying the favorable reputation that Bank Alfalah enjoys globally as a stable and
responsible banking institution.

During the year, the foreign trade volume of the Bank has recorded an impressive growth
and it has reached to the level of 8% of total foreign trade of the country. The imports
figure of Rs. 46.81 billion and exports figure of Rs. 44.27 billion represented an increase of
38% and 34% respectively over the last year figures.

The Bank has also been fairly active in the inter-bank market and enjoyed substantial lines
of credit. The Treasury Division added significant profitability to the Bank through
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Its intuitively priced transactions and proactive strategies for both investment and
realization of capital gains.

CREDIT RATING
Despite the political and economic uncertainties, Bank Alfalah was able to maintain its
impressive credit ratings of AA- and A1+ in the long and short term respectively. These
ratings are indicative of a very high credit quality and low potential for credit risk. These
ratings have been assigned by the PACRA, the leading credit rating agency of Pakistan.
These ratings have been awarded on the basis of a steady improvement in organizational
performance, augmentation in equity base and increased sponsor backing.

HUMAN RESOURCE DEVELOPMENT

Development of professional skills and knowledge of the employees is essential for the
efficient functioning of any organization. At Bank Alfalah appropriately designed policies
and practices have been instituted to achieve this strategic objective.

Our state-of-the-art training centre at Karachi remains indispensable in imparting valuable


training to all our team members. This has become especially important considering the
pace of change that the banking industry is exposed to. Consequently training ensures that
change is successfully navigated to discover potentially beneficial opportunities that can be
transformed into direct gains for the Bank and its customers. This also positively impacts
the confidence levels of our employees translating into better job performance and
satisfaction. During the year 2004-2005 we aim to establish a similar training and
development facility in Lahore, Pakistan.

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Vision

“To be the premier organization operating locally


and internationally that provides the
complete range of financial services to all
segments under one roof.”

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Mission

“To develop and deliver the most innovative


products, manage customer experience, deliver
quality service that contributes to brand
strength, establishes a competitive advantage
and enhance profitability, thus providing value to
the stakeholders of the bank.”

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CORPORATE INFORMATION

Company Secretary
Mr. Hamid Ashraf

Chief Financial Officer


Mr. Zahid Ali H. Jamal

Auditors
Taseer Hadi Khalid & Co.
Chartered Accountants

Head Office
B. A Building
I. I. Chundrigarh Road
P.O. Box 6773
Karachi

Executive Committee

Mr. Mohammad Saleem Akhtar


(Chief Executive Officer)
Mr. Ikram Ul-Majeed Sehgal
Mr. Parvez A. Shahid
Mr. Mohammad Yousuf
Mr. Tanweer A. Khan
Mr. Sirajuddin Aziz
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Mr. Mahmood Ashraf

Branches Network

The network of bank alfalah consist of 101 branches all the country-wide.

Details: -
CITIES No. of Branches

• Karachi 18
• Lahore 13
• Peshawar 2
• Rawalpindi 2
• Faisalabad 2
• Multan 5
• Bhawalpur 1
• Dera Ghazi Khan 1
• Gujranwala 1
• Gujrat 1
• Hyderabad 1
• Islamabad 1
• Jehlum 1
• Mardan 1
• Mianchannu 1
• Mengora (Sawat) 1
• Queeta 1
• Rahim Yar Khan 1
• Sahiwal 1
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• Sargodha 1
• Sheikhupura 1
• Sialkot 1
• Sakhar 1
• Wah Cantt. 1
• D.I.Khan 1
• Gawader 1

FEATURES

Bank Alfalah Limited is an established bank. It has some special features with the help of
those it is growing rapidly.

OUTSTANDING WORK ENVIRONMENT

As the work environment plays a great role in this competition age, so the bank has good
work environment. All the people work with cooperation; managers are so kind that each
problem can be discussed with them.

EFFICIENCY

Employees at Bank Alfalah are quite efficient. They work more than their working hours
and it is all according to their will. It also shows their loyalty, commitment to
organization.

CUSTOMER SERVICES

All the customers are entertained individually. Same kind of behavior and attention is given
to all the customers.

SUGGESTIONS ASKED FROM CUSTOMERS

Getting ideas for improvement from customer side is a new idea and that is working very
well in Bank Alfalah Ltd. All the customers are asked to fill a suggestion form and the
standards of the bank are improved through them.
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EMPLOYEE BENEFITS
Employees are given the benefits like bonus, gratuity funds, loans, increments, house rent,
medical and conveyance allowances.

COMPUTERIZED WORKING ENVIRONMENT

In bank, all the work is done remotely. All the entries are made using the systems which are
internally and externally integrated. This increases efficiency of the bank.

DEPARTMENT HIERARCHY

Bank Alfalah Limited

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Bank Alfalah
Limited

Operation CAD TSD Consumer


Department Credit Marketing
financing
Department
Department

Car Financing

Online
Account Opening
Transaction
Section
Section

Home Financing

Clearing Section IT & Remittances


Section

Branch Level Hierarchy

Chief Manager
(Mr. Sheikh Asif)

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CAD Manager
Manager (Mr.Qazi
Manager
Zubair)
(Mr. M.Saqib) (Mr.Amir)
Credit Card
Branch Manager
Mr. Ehsan ul haq
Qureshi

Operations
Manager
Mr. Faisal Noman

Manager Consumer
Finance
(Mr.Faisal Rana)

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PRODUCTS OF BANK ALFALAH
LIMITED

Foreign currency accounts- new scheme (saving)


Projected Profit rates (per annum)
Currency Profits
(Semi-annually)
US Dollar 1.00%
UK Pound 2.00%
Euro 1.25%

ROYAL PROFIT (PROFIT BEARING CURRENT


ACCOUNT)
Projected profit rates (per annum)
Amount Profit (Yearly)
From Rs. 50,000 to 999,999 2.50%
From Rs. 1000,000 to 9,999,999 3.5%
From Rs. 10,000,000 to 25,000,000 4.00%
From Rs. 25,000,000 to 50,000,000 4.75%
From Rs. 50,000,000 to and above Contact Treasury

CLASSIC PLS DEPOSITS


Projected profit rates (per annum)
Type of deposits Profit
Saving account 2.00%

TERM DEPOSITS
1 Month 3.50%
3 Month 4.00%
6 Month 4.25%
1 Years 4.75%
2 Years 6.00%
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ATM

Bank Alfalah through its commitment to provide superior and improved services to its
valued customers, has unveiled a nationwide network of ATMs. For customer
convenience, customers now have access to instantaneous cash availability, 24 hours a day,
7 days a week.

ATM network is geared up to exploit the latest technology, and is equipped to meet the
highest standards of security and efficiency.

With new ATM card you can now:

Withdraw Cash
Use our convenient, user-friendly fast cash option
Make a Balance Inquiry.
Get an instant printout of your account balances
Get a printout of your last transactions (Mini-statement) on the spot.
Change your PIN (Personal Identification Number).

Bank Alfalah is pleased to introduce 27 state of the art ATMs, deployed at the most
convenient and accessible locations. Bank Alfalah is a founder member of the 1-Link
Switch, thus making a countrywide network of ATMs available.

ONLINE BANKING

Bank Alfalah now offers the facility of on-line banking to its customers through its
countrywide network of branches. Customers can use the ATMs or the banking counters of
any branch for day-to-day banking needs, irrespective of branch where they maintain their
accounts.
For Corporate customers centralized Cash Management facility is also offered through on-
line banking.

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PHONE BANKING

"Alfalah Phone Banking” is available to all customers on a countrywide basis. Customers


can dial 111-225-111 (without any city code/prefix) from their respective cities i.e. 21
cities where Bank Alfalah is present, and get prompt services from the Centralized Phone
Banking Services.

Customers enjoy 24x7 Round the Clock Phone Banking Services.

Bank Alfalah is the first bank in Pakistan to offer Centralized UAN connectivity from 21
cities to its Call Centre with Hunting & ACD facilities.

MONEYGRAM

Bank Alfalah limited, in collaboration with MoneyGram, offers remittance service to


Pakistan. MoneyGram is person to person money transfer service that allows consumers to
receive money in just a few minutes. MoneyGram is available in over 154 countries and in
more than 40,000 locations worldwide.
With MoneyGram your money is transferred immediately and usually arrives at the
receiving end within 10 minutes, other services can take days or weeks. There are no
complicated procedures and you do not need a bank account or a credit card. What’s more,
the receiver is handed the cash immediately.

SECURE AND RELIABLE


An extensive network of quality agents, linked by computer, will transfer your money
safely and ensure that it is handled with care and without delay. Thousands of people
already use the MoneyGram service all over the world. It is trusted for its reliability and
security.

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CONVENIENT AND FAST
MoneyGram is available in over 154 countries and in more than 40,000 locations
worldwide. With Money Gram your money is transferred immediately and usually arrives
at the receiving end within 10 minutes while other services can take days or weeks. There
are no complicated procedures and you do not need a bank account or a credit card.

FREE MESSAGE SERVICE (FOR SENDERS)


There is also an added personal touch-you can receive a 10 word message from the sender
with every transaction at no extra cost.

RUPEE TRAVELLERS CHEQUES

CONVENIENT DENOMINATIONS

Bank Alfalah presents Rs.1,000, 5,000 and 10,000 denominations of travelers cheques,
making it very convenient to carry money while traveling or keeping your emergency cash
safe.

YOU’RE GREAT COMPANION WHILE TRAVELING

Bank Alfalah travelers’ cheques are your best travel companion as


they provide the most benefits that no other travelers’ cheques offer.
Alfalah TCs have matched security features Plus, you don't have to be an account
holder to avail these benefits! Free from the risk and hassle of carrying cash
during travel, Bank Alfalah TC’s ensure safe and smooth travel.

THE MAXIMUM SECURITY FEATURES

Lithographic security features, invisible UV printing, high definition micro-lines, anti-


scanner effect, mould based paper, Alfalah watermark and printing in the UK, are just
some of the security features of our TCs which prevent counterfeiting. Just in case you
are still not convinced, we refund your money in case of loss or theft of your TCs.

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FEATURES

Convenient denominations available

 Rs. 1,000  Rs. 10,000


 Rs. 5,000

Maximum security features

Special embossed intaglio printing in the UK, Alfalah security thread and Alfalah
watermark. Just some of the advanced features that make your TCs secure.

Fully Refundable

You can refund your TCs without any penalty or loss.

Transferable and endorsable

You can transfer and endorse your TCs over to anyone.

Unlimited validity

Bank Alfalah TCs will always remain encashable.

No account needed

You don’t have to be an account holder to get our TCs benefits.

Network of Branches

Bank Alfalah branches all across Pakistan.

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CREDIT CARDS

Bank Alfalah Limited offering credit cards with minimum markup and in wide variety in
the market. Markup rate that is charge is 2.50% after the 51 days of transaction. Bank
Alfalah also does not charge any annual fee and no charges when you avail credit card
facility.

Bank Alfalah offering various varieties of cards:

 Gold Card 150,000 --- 499,000

 Silver Card 25,000---150,000

 Women Exclusive 16,000---499,000

 Classic Blue (professionals) ----------------- (only for panel companies’

members)

FEATURES

Balance transfer facility-Smart settlements


Offering an easy and convenient way to settle unsettled credit card payments on all
existing credit cards in Pakistan. Avail this facility at as low as 1.5%.

Cash advance facility – 75% of your credit limit

Now you can avail cash advance facility up to 75% of your available credit limit. Enjoy
the benefits of this exclusive offer on your Bank Alfalah credit card.
Step by step monthly installment plan – 1.25% p.m. only
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Now you can convert any transaction, amount of Rs. 3000 and above to a step-by-step
monthly installment payment plan. It gives you the flexibility to convert your large
payments into small equal monthly installments.

Free supplementary cards

Offering the facility to acquire free supplementary cards for your family members. Avail
this card without any extra cost.

Fortunes

Offering an amazing rewards program that let you earn points every time you use Alfalah
Visa card. Redeem the earned points anytime for fabulous gifts of your choice.

Discounts

Offering discounts at wide range of outlets, selected especially to much your taste. You
can avail matchless discounts each time you charge your card at these outlets.

Insurance Cover

Offering card members a range of features design to protect you and your family from the
setbacks of life, at very affordable rates.

Petro facility
Offering you the facility that saves you the extra that you pay when you use Alfalah
Credit Card at all patrol pumps in Pakistan.

UNIQUE BENEFITS

Bank Alfalah Auto Debit Service

This facility is specially designed for Bank Alfalah account holders. It gives the option of
making minimum or full payments through Bank Alfalah Savings / Current Pak Rupee
account specified on Alfalah VISA monthly statement.
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Bank Alfalah Credit Cover

Alfalah VISA offers card members a new and powerful protection against the
uncertainties of life. In the unfortunate even of prolonged illness, disability or death,

it’s reassuring to know that with Alfalah Credit Cover you have no cause to worry about
your monthly credit card repayments. Alfalah Credit Cover has a range of features
designed to protect you and your family from the setbacks of life, at rates that are
affordable.

DOCUMENTS REQUIRED

Eligibility Criteria
 Total gross salary / income of Rs. 8,000/- or more per month.
 Aged between 25 to 60 years (60 years at maturity of facility).
 Should be Pakistani National

For Salaried Applicants

 Copy of National Identity Card.


 Current Salary Slip/Salary Letter / Proof of BPS (for Govt. Employees)/ Proof of
Rank for Armed Forces Personnel) .
 Computerized Personal Bank Statement (on bank letterhead in original) for last
six months.

For Self Employed Applicants

 C
 opy of National Identity Card.
 Computerized Personal Bank Statement (on bank letterhead in original) for last
six months.

Additional Requirements

 Partnership deed & personal account statements of partners (if any) for last six
months.
 Bank letters / certificate confirming Proprietorship (in case of Proprietorship).
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 Memorandum / Articles of Association / Form A (in case of private limited
company).
 Recognized professional degree / membership certificate to professional
associations (in case of professionals).

ALFALAH CAR

It’s a scheme that enables one to own his desired car at easily affordable and flexible
installments with a minimum down payment and insurance.

BENEFITS AND FEATURES

 Quickest processing
 No hidden charges
 Minimum down payment
 Complete repayment at any point of time

 Balance transfer facility {BTF} for existing as well as new clients from other
Banks
 Tenor period ranging from 1 to 5 years.
 Financing of all brand new locally assembled vehicles.
 Financing limit ranging b/w Rs. 200,000/- to Rs. 2000,000/-

CORPORATE & INDIVIDUAL CAR LEASING

BAL’s recently introduced car leasing facility for individuals and corporate sector has set
new dimensions for the product. Now you are provided with the option of either to get
the vehicle leased or financed.

INSURANCE

Renowned and reliable Insurance companies are offering the competitive rates of
Insurance. Pay year insurance premium in advance (at the time of down payment) and
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remaining in the subsequent equal monthly installment.

HOW MUCH EXTRA MONEY BEING PAID? {MARK-UP}

Offering lowest rate of markup of 12, 12.5%, {per annum}, BAL has captivated a major
market share and so is the plan for future.

REPAYMENTS

Easily affordable installments on monthly basis in the form of postdated cheques will set
you free of depositing your rental cheques every month.

SECURITY

Hypothecation of vehicle in the name of the Bank Alfalah Limited.

YOU CAN ACT AS A CO BORROWER

Acting as a co borrower, will enables your family members {spouse, children- 18 year
and above} to avail the financing facility and can get the car registered in their names as
well.

ELIGIBILITY CRITERIA
 Yes you get a car loan form bank Alfalah to purchase a brand new car if you are:
Pakistani National Identity Card holder.
 Over 20 years of age (Maximum 60 years in case of salaried and 62 in case of a
business person at the time of maturity of the loan).
 Salaried, Businessman or self employed.

Required documents for car finance facility

1. Application form
2. Copy of national Identity card
3. Copy of Driving License (optional)
4. N.T.N. Certificate
5. Copy of current utilities bill of residence
6. Bank account statement for last six months from the date of application
7. Signature verification fro duly verified by t he banker
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8. An Assets & liabilities statement (where bank‘s financing exceeds Rs. 5 Lac.)
9. CIB report required (where bank‘s financing exceeds Rs. 5 Lac.)
10. Basic Borrower Fact Sheet

Additional requirements for business class individuals

a. Copy of rental/ purchase agreement of business premises.


b. Sole proprietorship letter on relevant business letterhead.
c. Partnership deed (if applicable).
d. NOC from other partners (if applicable)

Additional requirement for self employed professionals

a. Copy of rental/ purchase agreement of business premises


b. Copy of membership of respective institution/ association
c. Must be practicing from last 3 years.

Additional requirements for landlord

a. Fard malkiat/ title deed of land


b. Undertaking fro competent landlord

Additional requirements for salaried individuals


a. Certificate from employer showing permanent employment for the last 2 years
b. Original salary certificate
c. Take home salary three times of proposed installment
d. Income of spouse can also be clubbed

MINIMUM INSTALLMENTS

Monthly Installments for Alfalah Car can be calculated by multiplying Bank’s financing
amount with the following factors:

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Periods Advance installment Deferred installment
For 12 months 0.09072 0.09216
For 24 months 0.04962 0.05041
For 36 months 0.03609 0.30666
For 48 months 0.02944 0.02996
For 60 months 0.02553 0.2594

HOME FINANCING

BAL aims to be provider of mortgages and other financial products, offering our valued
customers excellent service and good value. Bank Alfalah is one of Pakistan’s most
efficient and customer friendly banks, and has a tradition of caring for customers.
Choosing the best mortgage plan for your particular circumstances is very important.
Bank Alfalah tries to make home buying or home construction process as straightforward
as possible with a wide range of home finance plans designed to suit your needs now and
in the future.

You have a plot, and need finance to construct a


home, which excites everyone in your family!
No problem. BAL will provide you up to Rs:
7.50 million, or 70% of the estimated value of
constructed property to enable you to say good-
bye to rent forever! Even if you don't have a plot,
BAL will provide you up to 60% of the value of
the plot that you have selected to purchase. Payment period ranges from 3 to 20
years.

With this facility, you no longer need to just dream


about the home you want for yourself and your
family .BAL will provide you upto Rs: 7.50 million
or 70% of the purchase price of the property (whichever
is less), so that you can realise your dream and
enter the reality of owning a home!.
Payment period ranges from 3 to 20 years.
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Does your existing installment on a home finance leave
you with nothing to spend? You need not worry any
more because BAL has genuinely low rates and
payment options that could leave more funds with
you each month. Transfer up to Rs: 7.50 million or
100 % of the existing finance, whichever is less.
Stretch your repayment period for up to 20 years.

You already own a home, but need extra space for a


growing family. Simply apply for financing of up to
Rs:2.50 million or 30% of the surveyed value of
your home (whichever is less) and get yourself the
extra space!
You can stretch your repayments for up to 7 years

The crown jewel of BAL Home Finance Scheme, the golden opportunity for someone
starting a career to buy an already constructed
housing unit so early in
life! We offer a moratorium of up to 3
years in principal payments, for a
financing of up to 20 years. You service only
the mark-up element initially, and principal
repayment starts after the end of monotorium
period. Home Start is specially designed for young people to own a home of their own.

THE ELIGIBILITY CRITERIA

You may apply for Bank Alfalah Home Finance:

 For acquiring a residential accommodation in Karachi, Lahore,


Islamabad,Rawalpindi, Multan, Peshawar and Faisalabad.
 For building your dream house on your property / land.
 For renovation or extension of your already owned house.

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 For transfer of your existing home finance from another lender.

 If you are a Pakistani National.


 If your age is between 25 and 65 years.
 If you are in continuous employment in a permanent position for 2 years
or more.
 If you have 3 years (or more) of business or professional experience.
 If your gross annual income is Rs: 200,000/ — or more [Your spouse’s
income (upto 50%) can also be combined with yours].
 If you require a financing of at least Rs: 500,000/- or more (maximum
Rs: 7,500,000/-)

 If you have been a Bank Alfalah borrower for past one year with clean
payment record.

You may apply for Bank Alfalah’s Home Finance for minimum period of 3 years and a
maximum period of 20 years (subject to your age).

DOCUMENTS CHECKLIST

The following documents are required to be submitted by an applicant with the


completed application.

For salaried person

 2 passport size photographs.


 Copy of NIC.
 Copies of last Salary / Pay Slip duly attested by the HR department.
 Salary Certificate (original) from the employer, showing the gross salary and
deductions.
 Employment verification form from the employer.

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For self-employed and Businessman

 2 passport size photographs.


 Copy of NIC.
 Certified Copy of last Six Months bank Statement.
 Copy of current professional association membership / trade body membership
certificate (if Applicable).
 Sole partnership deed letter.
 Copy of Latest Form 29 duly attested by the company secretary.
 Letter from company secretary confirming the status and share-holding (where
applicant is director of company).

OPERATIONS DEPARTMENT

Operations department of the Bank Alfalah Limited is responsible for the overall
operations of the bank.

Operation Department has following segments.

a) Cash
b) Clearing
c) Remittance
d) Account opening
e) Accounts department

The detail of those departments that are controlled under operation department is as
under.

a) Account opening
b) Cash department
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c) Clearing
d) Remittances

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ACCOUNT OPENING DEPARTMENT

It is most important department of bank. Ms. Saira deals in this department. Following
procedure is adopted for this purpose.

PROCEDURE OF ACCOUNT OPENING

It is very simple and quick procedure. A person who wants to open an account must has
the introduction of bank’s staff or any already existing account holder of bank. The
customer is required to fill an account opening form. Then signatures of the introduce are
verified from S.S. Card before opening account. AOF is very standard and up to the mark
which contains almost whole information about customers. Customer is guide to fill all
columns of AOF. All formalities and requirements are completed and verified, and all
supportive documents are taken and checked according to the nature of account. If any
formality is incomplete, chequebook is not issued until it is fulfilled.

If a person cannot sign write his / her hand thumb impression is affixed marked, which is
attested by one male or two female witnesses. Thumb impression for female right hand
and for male left hand.
They also have to give identity letter
∗ NIC copies
∗ Passport size photograph

One place on the form other is on SS Card they have non-bearer cheques. On their
cheque book a stamp is affixed on it there is written. Thumb impression should be fixed
in front of an officer of the bank.

The bank does not make payment of a cheque bearing a six months or older date. If an
account is not operated in six months. It is called dormant account.

Following Factors Prior To Opening Of Account Should Be Concider

1. The suitability of the perspective customers


2. Verification of customer credentials.
3. The perspective possibility of profitability of the relationship.
4. The proposed relationship does not violate:

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1. SBP rules & regulation
2. Applicable local laws
3. The bank’s internal policies

Current Account

1. No limitation on frequency or amount of transaction.


2. No profit payable.

Saving Account
1. Profit is payable
2. No of withdraw restricted
3. Large amount of withdraws requires 7 days.

GENERAL PRINCIPLES

1. No account will be opened on fictitious name.


2. All documents necessary required for opening account must be taken after
verification from original
3. No operation of account should be allowed & chequebook must not be issued
until all formalities are confirmed.
4. Genuineness of introduction should be properly ensured
5. All information of AOF should be filled at front of concerned officer.

TYPES OF ACCOUNTS

The bank different types of accounts exist.

1) INDIVIDUAL ACCOUNT

Any individual or proprietor of business can open an individual account at BAF.


PLS (profit and loss sharing) saving accounts can be opened with the minimum balance
Rs. 5000/- with expected profit rate is 9%. Following requirements has to be fulfilled for
this account.

 Signature of customer on back of AOF.


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 Mention next of kin (nominee)

 Name and A/C # of introducer.


 Verified sign of introducer.
 Customer signature admitted by officer.
 N.I.C photocopy attached.
 Letter of thanks.

2) JOINT ACCOUNT

When different people want to or need to share a single account it is called joint account.
The names of persons are written on the title of A/C and on S.S. card.
Joint A/C cannot be opened by single person. Both persons have to sign on cheques.
When two or more person neither partner nor trustee open account in their name is joint
account.

Requirements
 Sign of both customers on back of AOF
 Sign on joint A/C # mandate
 Name and A/C # of introducer
 NIC copies of both members.
 Mode of operation.

3) BUSINESS ACCOUNTS

When the owner of the firm operating singly, open an in his term name.

I) Sole Of Proprietor Account

This account is for that person who has his own business of the business he is one owner
of the firm.

Requirements:

 Companies stamp
 Declaration of proportion companies’ letterhead.
 Sign on AOF.
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 NIC copy
 Verified signature of introducer.
 NIC copy

II) Partnership Account

Account title will be the name of the partnership firm.

Requirements

 Sign of customers on back of AOF.


 NIC copies of partners
 Partnership deed (certified copy) duly attested by notary republic.
 Partnership mandate (prescribed format)
 Companies rubber stamp

The A/C is opened in the firm name and all partners designate one or two persons to act
behalf of the partnership firm all acts of the firm jointly and severely.

III) Limited Company

Limited Co:
1) Private Limited
2) Public Limited

PRIVATE LIMITED

Requirements
 Restrain on companies letterhead dully attested by chairman.
 Sing of all directors on back of AOF.
 NIC copies of all directors.
 List of directors on companies’ letterhead.
 List of memorandum and article of association.
 Copy of board resolution.

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 Latest form 29 (if director is to be changed or in case of his death, this kind of
form is filled, it includes information that a new director has how much number of
shares with him.
 Companies’ rubber stamp.
 Copy of certificate of incorporation should be attested by director, co register an
office stamp should be affix.

PUBLIC LIMITED

1) Certificate of commencement of business


2) Same as home documents.

CLUB / SOCIETY / ASSOCIATION

These concerns are non trading in nature. They have their own rules and regulation and
their affairs are mentioned by the committee called as a governing body or managing
committee.

1) Stamp of directors
2) NIC copies
3) Certified copy of resolution
4) Memorandum and article of association
5) List of heads on companies’ letterhead.
6) Bank account opened in their name with BAL.
7) Name of person to be specified for the operation in account.
8) The manner in which the account shall be operated.
9) Letter of registration.

SPECIAL TYPES OF ACCOUNTS

These types of accounts only can establish after approval of system and operation
division head office: -

o Trust Accounts
o Accounts of executors / administrators
o Accounts of liquidators
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o Accounts of local authorities/ municipals.

CHEQUE BOOK ISSUANCE

When the account is opened, then the customer is given a chequebook to sign upon and
withdraw money. It proceeded as under.

PROCEDURE

All the account opening formalities must be completed before issuance of chequebook.
Particulars of the chequebook requisition should be completed containing title of account,
account number, type of currency, number of leaves and signature to the customer.
Signature of the customer is verified on the requisition.

If customer is unable to collect his chequebook, then he can give authority to the third
person to collect his cheque book on his behalf by signing on the back of the requisition,
in such case, the particulars of the third person are required like name of the person NIC
number and signature of that person on requisition and cheque book issuance register.
Chequebook is taken out from the safe / locker. It is assured that series of the
chequebook. Particulars are entered in the chequebook issuance register. Account number
is stamped on very leave of the chequebook and those leaves are counted. Name of
account holder is written on the cover of the chequebook. And requisition on the
chequebook for further issuance is properly filled, stamped and signed by officer of the
bank.

Chequebook is delivered to the customer and his signature on the chequebook issuance
register. Chequebook serial number entered. In the system (FoxPro), Stock of
chequebook are balanced at the end of each day and kept under safe custody.
Earlier the banks were charging a fee for issuance of chequebook but now whenever a
new account is opened, the account holder issued a chequebook free of charge.

Bank Alfalah issues the following chequebooks.

 Saving account-25 leaves


 Current account 50 leaves.
 Current account – 25 leaves
 Foreign currency $ 10 leaves
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 Foreign currency 10 leaves

CLOSING OF ACCOUNT

When a customer wants to close an account he has to given a hand written application to
the head of the operations department to close his account plus return remaining leaves of
Chequebook.

The manager first verifies the sign of account holder, then closing is done from the
registers on the computer where the account was opened. In the file of the account holder
his account opening form is crossed. For this closing a fee of Rs. 150/- is charge in BAF.

TYPES OF CHEQUES

There are four types of cheques:

In-house cheques / transfers cheques


Inter branch cheques
Inter bank cheques
Outstation cheques OBC

VERIFICATION OF CHEQUES/ INSTRUMENTS

Some important things should be verified and confirmed about the cheques and
instruments:

1. It is not stale/ post-dated or incompletely dated.


2. It is not mutilated.
3. There are no unauthenticated alterations on the cheques/ instruments or the
pay-in-slip
4. The amount in words & figures on the pay-in-slip agrees to the total of the
cheques enclosed.
5. The details on the pay-in-slip & counterfoil do not differ.

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CASH DEPARTMENT

Cash department of Bank Alfalah works under the operation department. This department
is given the complete responsibility of cash, as result of transaction in touch local and
foreign currencies. It is also responsible for the book keeping of these transactions and
the safe custody of cash. Out of five counters of cash department one counter is fix for
senior citizens and females. All counters are dealing at the same time in deposits,
withdraw and online transaction processes.

This department performs the main function.


a) Cash receipts
b) Cash payments

CASH RECEIPTS

In cash department depositors use deposit slip for depositing the amount into their
accounts. The officer checks if the deposit slip is properly filled up containing title of
account, A/C number date and amount in words and figures. Detail on both counter file
and cash receipt voucher should be the same. Cash is received by cash receiving officer,
twice counted and matched with the deposit slip. The cash details are written on the back
of the deposit slip and are also entered in computer software called “bank Smart”. Cash
received stamp is affixed on the face of the deposit slip along with the signature of the
cash receiving officer.

Deposit slip is forward to the officer in the cash department. Again proper scrutiny is
made by the officer cash department both on cash receipt and Bank smart software.
Officer cash department sign the deposit slip and finally approved the transaction on
Bank Smart. Deposit slip is credited and posted in the concerned accounted in the system.
Counter folio is given the deposition as receipt. One consolidated cash debit voucher is
posted in the system to balance the cash.

CASH PAYMENTS OF CHEQUE

All five counters deal with cash payments the process for payment of cheques local and
foreign currency is same. First the cheque is presented by the customer or holder to cash

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payment officer. He confirms’ that it is drawn on the same branch and the particulars of
cheque are properly filled in. one signature of the holder is taken on the back of the

Cheque. Officer checks the date, amount in words and amount in figures, payee’s name,
crossing if any, account number, cheque serial number, any material alterations /
endorsements and signature of the customer. Account is debited in Bank Smart and then
cheque is cancelled by the officer. It is posted in the system and posting stamp and
number is affixed on it. At the end officer hands over cash to client.

CLEARING DEPARTMENT

Mr. Behzad deals this department. Before discussing it is necessary to know what is
“clearing”.

“The process by which cheques exchanged between the collecting and paying bank and
the ensuing financial settlement is called “clearing”.

This facility is provided by the state bank of Pakistan for offsetting of cross obligations
between the different banks. Clearing is of two types:

1) Inward clearing
2) Outward clearing

INWARD CLEARING

When cheques drafts, etc, of our branch presented to us for clearing by the SBP. Cheques
to be honored by bank.

OUTWARD CLEARING

The cheques of other banks which the account holder deposits in their accounts are send
for collection.

CLEARING PROCESS (INWARD/OUTWARD)

Here the local cheques are received that are drawn on BAF. All the cheques are received
on one counter along with the paying slips duly filled in properly containing particulars
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of cheques and account holder. Counter folio of paying slip is handed over to the
customer by putting stamp for cheque received for collection for Bank Alfalah on it duly
signed by officer. These cheques are scrutinized and cheques for local clearing

are separated from OBCs. These are then entered in clearing register and cheques for
collecting are entered in OBC register and handed over the bills department of collection.
Clearing officer checks and verifies title of all the cheques deposited by the customer to
confirm the good title of the cheques. Cheques are scrutinized properly and paying slips
are separated from cheques. Special crossing, endorsement and clearing stamps are
affixed on the cheques. Cheques of each bank are sorted and arranged branch wise. All

the cheques are then entered into the clearing system of bank. Print out of the clearing is
taken and details are attached.

With the cheques of each bank. Details of these banks are then entered into the clearing
schedule containing number of cheques presented and their total amount against the name
of each bank. Then total number of cheques presented to all banks and their total amount
is written on the foot of that schedule, which is tallied with the clearing register.

Next morning, these cheques are delivered to the respective banks in clearing house of
SBP between 9:00 to 9:30 AM. In the same manner, other banks present their clearing
drawn on Bank Alfalah. Total number of cheques and their amount delivered to other
banks are received from them are written on the clearing house schedule and handed over
to the officer clearing house SBP. Cheques / DD received in clearing are given to the
officer cash department of the branch for their repayment. After I proper scrutiny of
cheques, verification of signatures and confirmation of balance in the account, officer
cash department pays these cheque by canceling and posting them in the system.

If any cheque is not passed due to insufficient balance or any other reason, officer cash
department returns the same cheque by attaching a cheque return memo containing
reason for return. This cheque is entered into the cheque returned register and bank
charges are deducted according to the schedule of charges.

Second clearing is called at 2:30 PM to check the fate of the cheques presented to other
banks in the morning. If any cheque is to return, that is delivered to the same bank in
second clearing. In the same manner, if any cheque presented by Bank Alfalah in first
clearing is returned, they receive it and once again give schedule of clearing figure to the

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officer clearing house SBP containing number of cheques and their amount delivered and
received unpaid.

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ACCOUNTS DEPARTMENT

Account department is the most important department of the bank. Because it is


concerned with:

 Revenue
 Expenses
 Assets
 Liabilities

These are the pillars of any business. In this department, all the vouchers that are posted
during one day are sent to the account department next day. These vouchers are already
posted to computer by the concerned department. So computer also sends a report to the
accounts department. The accounts department has to tell that the requirements for
cheques and vouchers are fully checked.

If any kind of renovation or construction or rebuilding is done, all is paid from the
accounts department. Like petrol for the car of EVP or VP, stationery charges, medical
allowance, etc. are all paid by this department.

DAILY CUSTOMER MOVEMENTS LIST

All the changes that are made in accounts of customer are shown in the daily customer
movement list. By using this list, people of accounts department can prepare the
vouchers.

Following activities are performed by account department:

 Voucher preparation
 Preparation of daily, weekly, monthly, and annual statement.
 Budgeting and fixed assets
 Employer’s benefit
 Expenditure approval.

The bank does not make payment of a cheque bearing a six month or older date. If an
account is not operated in six months, it is called dormant account.
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TYPES OF ACCOUNT

 Current account
 Saving account
 Notice deposit
 Term deposit

CURRENT ACCOUNT

There is no interest on these accounts. It is only for transaction purposes. They paid on
demand. Where a banker accepts, paying all checks drawn against him to extend of the
balance in the accounts. As there is no profit paid on this account, it is also called
checking account because cheque can be drawn on it. Current account is mostly opened
for business. The minimum balance requirement for opening the current account is Rs.
1000/- inter bank fund transaction are handled by current account.

SAVING ACCOUNT

The purpose of this account is to introduce the habit of saving individuals in the
neighborhood. The profit on saving accounts is paid on the basis of profit and loss
sharing after every six monthly. The minimum balance requirement for opening the
account is Rs. 500/-.

NOTICE DEPOSITS

Notice deposits are kind of fixed deposits. The minimum balance requirement for
opening the account is Rs. 500/- and payment is drawn on maturity of the specific period.

Notice Deposit Is Of Two Types

 One for which a prior notice of 30 days and is required from the customer before
withdrawing deposited amount and for which rate return is 1.50%.
 Second for which a prior notice of 30 days and above is required from the
customer before withdrawing deposited amount and for which the rate of return is
1.50%.

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TERM DEPOSITS

A term deposit is a deposit that is made of a certain period of time. At the end of specific
period the customer is allowed to with draw the principal amount. The rate of return of
this account varies from 1.50% to 2.25%. The term deposit account varies from one
month to 1 years and the minimum balance requirement is Rs. 500/-.

REMITTANCE DEPARTMENT

The need of remittance is commonly felt in today’s business. A major function of any
bank is to “transfer of funds form one place to another”. Bank Alfalah uses the following
modes of transfer of funds.

 Demand draft (DD)


 Telegraphic Transfer (TT)
 Pay order (PO)
 Call deposit
 Pay slip
 Money gram

DEMAND DRAFT

It is instrument, which is used to transfer amount from one city to another city it can be
made on cash as well as on cheque. If it is made through cheque that it is necessary that
person must be A/c account holder while in case of cash any person can made. It consists
of four copies.

1) Original copy which is given to account holder.


2) DD advice is sent to the central branch.
3) Third copy is for reconciliation.
4) Last copy is sent to head office for reconciliation.

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Procedure

The client who wants to transfer his funds form one city to another fills a form requesting
the bank to prepare a DD. DD application form contains columns requiring information
for the preparations of DD eg.

 Beneficiary name
 Applicant’s name
 Address
 Amount to be sent etc.

Bank deducts some charges against DD. These charges include commission tax
provincial tax etc. Tax is deducted 0.3% while PT charges are 0.50 paisas. If customer is
taxpayer than advance tax is exempt provided that he submit the tax exemption
certificate.

TELEGRAPHIC TRANSFER

It is another mode of transfer of funds. It is quickest mode of transfer of funds from one
city to another. For TT, client has to submit the application on a prescribed form of the
bank. Client can deposit money in to the bank or can request the bank to deduct the
amount against the TT along with the charges against the issuance of TT from his
account. The charges against the issuance of TT charged by Bank Alfalah.

Procedure for Telegraphic Transfer Issuance

Application form is given to the customer to fill. Two signatures are taken on the form
one for request and other for receiving the instrument. All the particulars of application
form are checked and bank commission charges and with holding tax is written on the top
of the applicant form. If the customer is maintaining his account with the branch he can
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give cheque for total amount of instrument plus bank charges. Cheque and application
form is then given to the officer cash department for the payment of the cheque. After
proper scrutiny, officer cash department posts who cheque and signs the application form
to assure that payment is received. If the customer wants to pay cash, it is deposited by
the customer on cash counter. Cash receiving officer receives cash on the application

form along with the bank charges and withholding tax, application form is then given to
the remittances incharge for issuance of the instrument. He enters all the particulars of the
application form in the system (BPG) and computer gives an Auto Control Number to the
T.T message of receiving branch. This message is then sent through telex to the receiving
branch followed by a T.T. advice. The customer is confirmed that T.T. has been sent.

Procedure for T.T. Payable

When TT message is received, tested number on the TT is checked and verified. Tested
number is then written in the register and signed by the holder of test keys for office
record. All the particulars of the TT payable are entered in the system. Payment
instructions on the TT message are followed it if is pay and advice it will be paid through
TTR on the cash counter or through clearing and if it is credit and advice, it will be
transferred in the account mentioned in the TT message. Printouts of vouchers (TT

payable are taken. If TTR is presented for payment, signature of the authorized officers
are verified on TTR is presented for payment, signature of the authorized officers are
verified on TTR and after proper scrutiny, it is posted in the BPG and canceled by the
remittances incharge.

Procedure for Foreign Demand Draft Issuance

Application form is given to the customer to fill the same. Two signatures are taken on
the form, one for request and other for receiving the instrument. All the particulars of
application form are checked and bank commission is charged, which is US$ 5/- for each
amount of FDD. Cheque is received from the customer for total amount of FDD plus
bank commission. Cheque and application form is then given to the officer cash
department for the payment cheque.

After proper scrutiny, officer cash department posts the cheque and signs the application
form, to assure that payment is received. Then cheque and application form is given to
the incharge. Remittances, who will enter all the particulars of the application in the FDD
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issuance register. If the customer wants to pay cash, it is deposited by the customer on
cash counter. Cash receiving officer receives cash on the application form along with the
bank charges. Application form is then given to the remittances incharge for the issuance
of the instrument. A control number is allotted to the instrument form FD register.
Instrument is complete by putting all the particulars in it and signed by two attorney
holders. Instrument is then handed over to the customers. FDD advice is sent to the
responding foreign bank / paying bank where they are maintaining dollar account through
registered mail. Exchange transaction credit advice (ETCA) is sent to eh Head office fore
the reimbursement. Copies of the FDD and ETCA are kept in the record of the bank.

Procedure for Foreign Telegraphic Transfer Issuance

Application form is given to the customer to fill the same. Two signatures are taken on
the form one for request and other for signatures are taken on the form one for request
and other for receiving the instrument. All the particulars of application form are checked
and bank commission is charged, which is US$ 15/- that rate for each amount of each
FTT.

If the cheque is received from the customer, it is taken for total amount of FTP plus bank
commission. Cheque and application form is then given to the officer cash department for

the payment of cheque. After proper scrutiny, officer cash department posts the cheque
and signs the application form to assure that payment is received.

If the customer wants to pay cash, it is deposited by the customer on cash counter; cash
receiving officer receives cash on the application form along with the bank charges.
Application form is then given to the remittances incharge for the issuance of instrument.
He enters all the particulars of the application form in the FTT register and a control
number is allotted to the FTP. TT message is written in the telex containing name of
transferring branch, name of receiving branch, date amount, currency, payee’s name and
account number or identification if any, payer name and payment instructions. A test
number is given to the FTT message for receiving branch. This message is then sent
through telex to the receiving branch. Customer is confirmed that FTT has been made.
Exchange transaction credit advice (ETCA) is sent to the Head Office for the
reimbursement. Copies of advice (ETCA) and FT are kept in the record for the bank.

COLLECTION

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All the cheques under collection are called cheques under collection in Bank Alfalah
Limited. There are two types of bills for collection:

 Outward Bills for Collection


 Inward Bills for Collection

Outwards Bills for Collection

All the cheques are received on one counter along with paying slips duly filled in
properly containing particulars of cheques and account holder. Counter folio of paying
slip is handed over to ht customer by putting stamp for “cheque received for collection
for Bank Alfalah” on it duly signed by officer. These cheques are scrutinized and cheques
for local clearing are separated from OBCs. Cheques for local clearing are entered in
clearing register, whereas cheques for collection are entered in OBC register and handed
over to the bills department for collection. OBC number is allotted to eh cheque from
OBC register. Special crossing and bank endorsement stamps are affixed on the cheque.
OBC schedule is attached with the cheque and dispatched to the main branch of that city
for collection. If they do not have any branch in that city, then cheque will be sent to the
collecting agent of Bank Alfalah for then cheque can be sent directly to the drawing
branch; instructions are given on the OBC schedule for the payment of that cheque.

PAY ORDER

Written order which is issued and received to the save book or drown or payable on save
branch. Application form is given to the customer to fill. Two signatures are taken on the
form one for request and other for receiving the instrument. All the particulars of
application form are checked and bank commission charges and with holding tax is
written on the top of the applicant form. If the customer is maintaining his account with
the branch he can give cheque for total amount of instrument plus bank charges. Cheque
and application form is then given to the officer cash department for the payment post the
cheque and signs the application form in token of payment received. If the customer
wants to pay cash, cash is deposited by the customer on cash counter cash receiving
officer receives, cash on the application form along with the bank charges and
withholding tax.

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Application form is given to the remittances incharge for issuance of instrument. He
enters all the particulars of the application form in the system (BPG) and computer gives
an auto control number to the instrument. Print out a take on the block payment order. It
is then signed by two authorized officers of the branch. Instrument is the protect graphed
and given to the customers.

When the instrument is presented for payment, it is posted in the BPG and canceled by
the remittances incharge after proper scrutiny.

PAY SLIP

It is used when bank itself pay for any type of transaction e.g. purchased of stationary.

MONEY GRAM

Bank Alfalah Limited, in collaboration with money gram offer remittance services to
Pakistan.
“It’s basically a person to person money transfer service that allows consumer to receive
money in just a few minutes.”

Procedure

 Person must have reference no.


 Person must tell reference no. and compute the simple form.
 Person has to show NIC and tell compute introduction after that he can obtain
money.

Vouchers are also posted in the system. When OBC is realized collection bank pays the
amount through IBCA if it is the same bank or through DD if it is another bank. If DD is
received against OBC, it is presented in the clearing for collection. If IBCA is received
the branch for the payment of OBC, certain vouchers are posted in the system.

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FOREIGN EXCHANGE DEPARTMENT

“The transfer of credits to a foreign country to settle debts or accounts between resident
of home country and those of the foreign country” or “the foreign bills currencies etc
used to settle such accounts”.

Foreign exchanged department deals within exports and imports. Mr. Muhammad Yaseen
at BAF supervises it. The bank acts as exporter as well as importer bank for different
parties who are in the business of export and import.

Import

All goods and services brought into a country that were purchased from organization
located in other countries.

Export

All goods and services sent from one country to another country.

EXPORT

DOCUMENT REQUIRED FOR EXPORTER

1) National tax number


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2) Registration with EPB
3) Sales tax registration

DOCUMENTS TO BE ATTACHED FOR EXPORTERS

 Invoice
 Bill of lading
 Packing list

 Total quantity
 Net weight / carton
 Gross weight / carton
 Total net weight / carton
 Total gross weight
 Bill of exchange (original or draft)
 E-form: Initial document on which total export proceeding is based. In this form,
all the conditions are given, which are necessary for exports.
 Letter of credit: It is written agreement between importer and exporter.
 Beneficiary certificate.
 DHL certificate (TCS certificate)
 Form ‘M’
 Certificate of Origin (Form – A)

FORM-E

Government has provided facility to exporter in taking E-Form from any bank and he can
present it to any bank for negotiation. Export precede realization certificate.

SBP gives rebate to exporter against export after realization. It is paid according to
commodity wise and bill wise. Claim period: 1 year.

TRANSPORT DOCUMENT (BILL OF LADING, AIRWAY BILL)

 When insurance is done by importer, C&F (cost and freight) usually used.
 FOB cost (free on board)
 CIF (cost insurance and freight) when insurance is done by exporter, CIF is used.
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 Tenor (At sight) immediate payment by importer after receiving product.
 Partial shipment: Product is sent partially.
 Transshipment: Product is sent via any country.

E-FORM CERTIFICATION

When export is done on C&F basis, so bank issues E-form certification to exporter and he
submits it to the custom officer along with e-form certification to certify e-form.

FORM OF AUTHORIZED DEALER’S CERTIFICATE

State bank permits exporter to issue bill of lading in the favor of e-form bank. But if
requirement of L/C is to issue bill of lading in favor of company then shipping company
issues bill of lading in favor of exporter company. Authorized dealer certificate is filled
for this purpose.

CERTIFICATE OF ORIGIN

This certificate shows that goods are from Pakistan.

COVERING SCHEDULE

If in covering schedule, it is given that “please remit proceed to our Karachi office a/c no.
5740734881 with ABN (Amro Bank New York), USA for onward credit to BAF Multan.

BENEFICIARY CERTIFICATE

If L/C requires some information as proof of anything from exporter then exporter has to
present beneficiary certificate for that proof.

E-FORM

E-form has four copies:

 One for custom officer


 One for exporter
 Triplicate copy for SBP
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 Duplicate copy for bank

Bank reporting or duplicate and triplicate is done by bank. Custom officer (date is given
on the foot form) should clear product.

PAYMENT FROM IMPORTER BANK

It is the choice of importer to open L/C from any bank and the bank from which L/C is
opened can also refer to some other bank for payment. So bill of exchange is sent to
referred bank and other documents are sent to L/C opening bank.

SWIFT (Standard World Wide Inter Bank Financial Transaction)

It is network among all banks. No other institute can get involved in it.

BILL OF LADING

Certificate from shipping company for loading commodities. If requirement of L/C is to


issue bill of lading in favour of L/C opening bank, then authorized dealer certificate will
be provided by bank in favor of L/C opening bank.

BANK KEEP IN RECORD

 Covering schedule
 Invoice
 Packing list
 AWB
 Certificate of origin
 E-form

Normally bank keeps photocopy of all documents in record. Negotiable documents


(original documents).

IMPORTS

L/C is opened by the importer. There are two types of L/C:

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 Revocable L/C
 Irrevocable L/C

NECESSARY REQUIREMENT

If place of issue and port of loading is different on bill of lading, then along with the
stamp of shipment on board, vessel name and port of shipment is written.

1) Issue date of bill of lading – shipment on board.


2) There should not be cutting on bill of lading without authentication.
3) Bill of lading should show capacity of agent. If bill of lading can be taken by
the agent of Importer Company, then his name should be mentioned on bill of
lading.
4) Original GSP should be presented.
5) If TT reimbursement is not acceptable, it means bill of lading is necessary.
When documents are received fro export, do enter into lodgment register.

DOCUMENTS FOR IMPORT

 Performa invoice signed by importer


 Category passbook copy attested by any bank
 L/C opening application filled in by the customer
 Import registration with export promotion bureau
 Annexure
 Verification of signature by S.S. Card
 L/C issued on basis of L/C application form.
 Insurance if covered by buyer.
 Insurance cover note.
 Insurance policy.

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DOCUMENTARY CREDIT

TRADE SERVICS DEPARTMENT

Alfalah Bank has his full fledged trade service department. As a credit instrument and as
a means of making as a payment the documentary credit is an essential instrument for
conducting word trade today. A documentary credit represents a commitment bank to pay
the seller of goods or services a certain amount provided present stipulated documents
evidencing the shipment of the goods with prescribed period of time.

For the cases of imports or exports first the parties have to do upon a sale contract
regarding the term and condition of sale. One mode of payment is by L/C which is
secured and now a days mostly use the business.

Letter of credit is under taking by opening bank (Importers bank the Exporters bank
(Negotiating bank) that it will make payment if documents are as per terms of LC.

Four Parties Are Involved In Letter Of Credit

 Applicant Importer
 Beneficiary Exporter
 Issuing bank bank of importer
 Advising bank bank of importer

According to import policy, no import is valid with out import licence which is issued by
the chief controller of import and export or we can say export promotion bureau (EPB). If
a person desires to take up import trade must get his name, his firm or his limited
company, registered with the EPB. On being granted registration certificate, he will be
eligible to import goods according to import policy. There is no special condition of
eligibility for registration. The only requirement is that he should be a Pakistani and must
be registered with income tax department.

L/C OPENING PROCEDURE

When the importer obtained import license, then the bank will open letter of credit. “A
letter of credit is undertaking by LC opening bank to put an agreed sum of money to
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sellers bank on behalf of the buyer of the goods under clearly defined terms and
conditions”. Pakistani banks open only irrevocable LC. An essential feature of the
irrevocable LC is that it can not be modified, altered, amended, or canceled without the
prior consent of all the parties. Party comes to the bank and fills the form which is
provided on the payment of Rs. 100. This form is filled by the party and is return to the
bank, it includes details like.

 Name of company  Quantity


 Address  Insurance company
 Country of origin  Shipment from
 Branch name  Shipment to

One thing should also be submit which is INDENT. If the foreign party has any agent
they will issue the indent with following details:

 To messers
 Importers, etc

Document Required for “LC” Opening

When the bank opens LC, it requires following documents:

 Valid import license


 Performa invoice
 Importer should be Pakistani
 Letter of under taking form importer
 Insurance cover.

An important point which the bank will consider before opening of LC is that sufficient
funds be available in the LC opener’s accounts. At the time of establishing the LC the
opening bank generally retains a maximum margin to safe guard its own commitment.
The margin may vary from nil to 100% according to the nature of commodities and it
also depend upon the party. At the item of establishing the LC opening bank charges
bank commission, postage and other charges from the LC opener account. Another main
important point is that value of LC should not increase the value of import license. After
all the documents are being checked and signs are verified by the bank. A sanction slip is
attached with each form so that the approval can be gained from the manager of the bank.
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After the approval is made four copies are prepared and the entries are made on the
computer and the printout is taken the margin amount is checked from the importer
account and if the amount is not found then LC is not opened and the party is informed
about the situation. On the deposit of the margin then LC is opened LC limit if set by the
bank are also checked.

After the LC is opened following entries are made:

 LC opening register
 Margin / Liability Account Register.

Payment to Seller

The negotiating bank upon receiving the documents from the seller checks the documents
according to terms and conditions of credit upon satisfying it self of this the negotiating
bank makes payment to the seller if sight credit. It then forwards the documents to the
opening bank and reimburses it self through the opening banks account with itself.

Documents Received By the Opening Bank

Importers bank or opening bank receives the following documents form the exporters’
bank or negotiating bank.

 Bill of exchange
 Invoices
 Bill of lading
 Packing list
 Certificate of origin
 Insurance

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CREDIT DEPARTMENT

Credit means belief or trust. “The quality of being credible or trustworthy”. Another
words we can define credit as “trust in one’s integrity in money matters and ones ability
to meet payment when due”.

The earnings of BAL are chiefly derived from interest charge and discounts. This
department is the revenue generating department. Credit department basically has three
segments.

1) Credit marketing department


2) Credit administration department
3) Trade finance services department

Credit and advance department deals with extending loans (credit facility) to customers.
State Bank of Pakistan (SBP) has prescribed regulations which are called
“PRUDENTIAL REGULATIONS”. Every bank has to follow these regulations. If any
bank violates the regulations it should be liable for penalties under the core spirit of SBP
PR(S).

The Bank Alfalah limited credit is extended on the basis of these rules and regulations.
These regulations tells the term and conditions under which you can extend loans to the
borrower and to what extent.

CREDIT FACILITIES
At BAL there are two types of credit facilities
1) Funded facilities
2) Non funded facilities

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FUNDED FACILITIES

These are the facilities in which there is direct involvement of cash fund. Following are
the funded facilities.

1) Current finance CF
2) Term finance TF
3) Finance against foreign bills “FAFB”
4) Finance against packing and credit “FAPC”
5) Finance against imported merchandise “FIM”
6) Finance against trust receipt “FATR”
7) Payment against document “PAD”

Current Finance CF

The extensively used financing mode at BAL is current finance (CF) current finance is
used to finance both individuals and industries.

Individual take current finance for their personal use while in industries. It is taken for
fulfilling the requirement of working capital.

Term Finance TF

Term finance is for specified time period. Term finance is given for fixed asset financing.

Finance Against Foreign Bills FAFB

In FAFB facility exporter take loan from bank on the behalf of their foreign export bills.
Like exporter sends shipment but at that time he needs fund for the operation of the
business. He may go to the bank and surrenders all the documents including L/C, Bill of
lading etc. bank checks all the documents to be in accordance with terms and conditions.
If they find no discrepancy, they give money to exporter but take some margin on it.

Finance Against Packing And Credit “FAPC”

FAPC is taken for the preparation of consignment. It has two forms.

1) Pre shipment
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2) Post shipment

1) Pre Shipment
Preshipment loans are export related working capital financing.

2) Post Shipment
Post shipment financing is essentially the receivable financing to the exporters till the
period he is out of cash after the shipment.

Finance Against Imported Merchandise FIM

This facility is allowed against the commodities imported from other countries usually
through letter of credit. Some time importer does not have enough amounts for paying the
imported merchandise therefore. He request to the bank to pay all dues to the exporter
against the security of imported merchandise. Bank pays the amount and releases the
goods, when the importer pays off its liability partially / fully.

Finance Against Trust Receipt FATR

Finance is extended upon the trust receipt signed by borrower. Importer have to import
the product. There are three conditions.

1) Pay money and get thing


2) Get fine facility

And third is that if that client is trust worthy for bank believing on him based upon his
past record. He releases the goods against the trust receipt. Trust receipt is given to the
bank by the customer. The customer in turn commits that I will pay on such and such
date. Bank pays all taxes and gets merchandise and then gives it to client. Bank do
charges markup against such financing. FATR is for specific period of time. If client do
not pay with in specified time then bank charges higher per day markup.

Payment Against Document PAD

Payment against document is made by the banks as payment against L/C comes due
payment is made for imported documents. For example when exporter sends all the

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document to importing bank as document reached, importing bank has to make payment
within 24 hrs if the importer does not pays then bank charges markup per day.

NON FUNDED FACILITIES

The facilities where there is no direct involvement of banks fund. Following are the non
funded facilities.

1) Letter of credit L/C


2) Letter of Guarantee L/G

Letter Of Credit

Importer bank issues a document on request stating that it will pay the exporter when
exporter fulfill the terms of letter of credit L/C is off two types:

1) Sight L/C
2) Usance L/C

Sight L/C

Requires the importer / importing bank to pay as soon as it receives the clean documents
from exporter.

Usance L/C

It extends time period (typically 60, 90, 120 days) to importing bank for payement. After
specified time period importer have to pay.

Letter of guarantee “L/G”. Bank gives guarantee in the behalf of person that I will pay in
case of default.

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GUIDE LINE OF CREDIT POLICY

 Total outstanding financing facilities by banking company to single person shall


not at any point of time exceed 30% of bank’s unimpaired capital.
 No banking company shall make loans or advances against the security of its own
shares.
 No banking company shall grant unsecured loans / advances on the guarantee of,
o Any of its directors.
o Family member of director
o Any private company in which banking company is interested.
 In arriving at exposure per person weight age of 50% shall be given to
o Documentary credit opened by bank.
o Guarantees/bonds other than repayment guarantees.
 In arriving at per party exposure 90% of
o Deposit of party with bank under lien.
o Face value of FIBs lodged by the party as collateral.
o Pak rupee equivalent of face value of special US Dollar bonds converted
at official rate, lodged by the party as collateral shall be deducted.
 Aggregate exposure of bank against all its clean facility shall not at any point
exceed the amount of bank’s capital and general reserve.
 Advances given to the employees of bank in accordance with their entitlement.
 While granting any accommodation, bank shall ensure the total accommodation
availed by any borrower from banks / financial institution does not exceed 10
tines of the capital and reserve of the borrower.

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 A borrower who is prepared to inject fresh equity irrespective of the fact that its
equity is negative is eligible to obtain finance from bank to the extent of 10 times
fresh injected equity.
 No banking company allow financing facilities whether fund based / non funded
against the shares of companies which are not in central depository system.

CREDIT CYCLE

Request

Renewal / Revise / Write-off

Processing Information &


CLP
Monitoring

Decision
Disbursement of Loan

Offer

Purification of the
Documen
ts &
Security

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STEP I

Credit cycle start with request letter. When customer gives a request letter to bank that he
want that much amount of credit from bank.

STEP II

When bank receive the request letter from customer. The officer of credit marketing
department make credit line proposal (CCP) of client. It is essential that the proposal
define clearly the purpose of facility, the source of repayment, the agreed repayment.
Schedule, the value of security and customer relationship consideration implicit in credit
division.

The security to be accepted as collateral for the facility and all the documentation

relating to the security of facilities must be in the approved form all approval procedures
and required documentation must be completed all these things all feed in CLP.

CLP is basically a medium to present proposal for seeking approval of credit line in
client. In CLP they feed complete data of the client that include:

 Credit limit
 Legal status of company.
 History of relationship / introduction with bank.
 Line of business
 Background of proprietor / partner / owner.
 Purpose of facility
 Security
 Along with it they include borrower basic fact sheet.
 CCA
 Prudential checklist.

STEP III

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After the processing of information, credit officer decides weather to give credit to that
person or not. They also check weather its security has any market value or not. Decision
is taken by the branch credit committee (BCC). If the proposal is within the discretionary
powers of committee the proposal may approve after evaluation of credit risk.

It CLP is beyond discretionary power of branch credit committee the CLP is sent to credit
division at head office along with supporting documents and recommendation of branch
credit committee.

STEP IV

When decision is made now credit officer offer that we will give you loan uptill that limit
not more than that. Up till now all the process is done by credit marketing officer. After
that credit administration officer’s work start.

Credit Administration department basic function is to fulfill the requirement of


documents as a security for credit. Different types of documents are required for
Pledging, mortgage and hypothecation.

Documents required for C.F. Hypothecation

Legal stamp documents required:

• Promissory note-------------------IB~12A
• Letter of Hypothecation----------IB~25C
• Letter of guarantee------------------IB~29
• Letter of continuity
• Agreement of finance----------------IF-3

Letters without Stamp:

• Letter of arrangement
• Letter of disbursement
• Letter of authority
• SBP regulation undertaking

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Documents required for C.F. Pledge

Legal stamps documents required:

• Agreement of finance
• Promissory note
• Letter of guarantee
• Memorandum of deposit of title deed
• Letter of hypothecation
• Letter of continuity

Letters without Stamp:

• Letter of arrangement
• Letter of disbursement
• Letter of authority
• SBP regulation undertaking

Property Documents for mortgage

• Legal advice about property documents


• Title deeds (original documents of property
• Aux Sajra (location site map)
• NEC (non-encompress certificate)
• PT 1 in favor of borrower
• PT 1 in favor of bank
• MoTD (Mortgage of title deeds)
• Agreement to create mortgage
• Letters submit to ETOS & registrar
• Irrevocable general power of attorney (IGPA)
• Valuation report

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STEP V

Here documents are checked security is properly checked which is checked by the valuer.
Valuer tells the value of security. Here following characteristic of security are checked:

 Market value
 Consistency
 Salable
 Storable
 Transferable
 Transportation

STEP VI

On completion of legal documents and security arrangement and receipt of completion


certificate from recognized legal counsel, the bank according to the approved schedule
prepared by bank after obtaining confirmation of other payments have been funds from
sponsors other source viz, equity fund from sponsors release of fund by other co-
financiers etc. After the valuation of security the loan is disbursed to customer.

STEP VII

Responsibility lies to branch manager to monitor the overall profit and risk aspect of
credit portfolio in accordance with criteria setout in bank’s credit policy. After the
disbursement credit administration officer monitor the performance of customer whether
he is fulfilling the requirement or not. He is paying markup or not for which purpose he
has taken the loan whether he is utilizing loan for that purpose or not.

STEP VIII

After specific time period credit officer see what customer want whether he want to
renew / revise or write off it. If he wants to renew it he said to officer to renew it with
same limit.

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BALANCE SHEET
2004 2003
(In thousands)
ASSETS
Cash and balance with treasury bank 8,423,399 4,540,486
Balances with other Bank 626,917 232,728
Lending to financial institutions 7,437,733 4,634,398
Investments 28,903,596 24,470,314
Advances 49,216,120 28,319,401
Other assets 1,553,108 1,208,930
Operating fixed Assets 2,791,626 1,760,774
Deferred tax assets 0 0
TOTAL ASSETS 98,952,499 65,167,031

LIABILITIES
Bills payable 1,208,671 758,961
Borrowing from financial institutions 13,127,754 6,037,576
Deposits and other accounts 76,698,322 51,684,984
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Sub-ordinated Loans 649,740 650,000
Liabilities against assets subject to finance
lease
Other liabilities 2,686,754 2004 2003
1,196,342
Deferred tax liabilities 323,010(rupees in ' 1,186,501
TOTAL LIABILITIES 94694251 000) 61514364
mark-up/ returned interest earned 4,033,380 4,551,329
mark-up/ returned interest expensed 4,258,2482,028,577
Net Assets 3,112,313
3,652,667
net mark-up interest income 2,004,803 1,439,016
provision against non-performing
Represented By loans and
advances-net
Share capital 2,000,000 -87,091 -57,619
1,000,000
provision in domination in the value of 790,374
Reserves 365,727
Un-appropriatedinvestments
Profit 463,042 0 0
250,050
bad debt written off directly 3253416 -418 -1,447
1615777
-87,509 -55,066
Surplus on revaluation of assets 1,004,832 1,383,95
2,036,890
net mark-up interest income after provisions 4,258,2481,917,294 0
3,652,667

NON-MARK-UP/INTEREST INCOME
Fee, commission and brokerage income 399,383 316,368
Dividend income 112,017 62,077
income from dealing in foreign currencies 106,848 95,165
Other income 2,773,503 220,973
total non mark-up/ interest income 3,391,751 694,583

2,078,53
5,309,045 3

NON-MARKUP/ INTEREST EXPENSES


Administrative expenses 1,799,490 1,182,887
Other provisions/ write offs 2,000 0
Other charges 1,875 993
total non-markup/ interest income 1,803,365 1,183,880
Extraordinary/ unusual items 3,505,680 894,653

PROFIT BEFORE TAXATION 3,505,680 894,653


Taxes 1,382,446 448,974
PROFIT AFTER TAXATION 2,123,234 445,679
RATIO ANALYSIS

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Earning Assets to Total Assets: Earning Assets / Total
Assets

2004 85,557,449 / 98,952,499 = 86.46%


2003 57,424,113 / 65,167,031 = 88.12%

Earning assets to total ratio tells us about the bank management efficiency to utilize the
earning assets to get return. Earning assets include loans, investment securities and
money market assets. The BAL earning assets to total assets is slightly decline as
compare to previous year. But after comparison with last year we can easily find out that
total assets and earning assets are increasing because BAL is going to expand its network.

Return on Earning Asset: Net income / Earning Assets

2004 2,123,234 / 85,557,449 = 2.48%


2003 445,679 / 57,424,113 = 0.78%

Return on earning assets can help us about the measurement of profitability. Better ratio
means good utilization of earning assets by bank management to earn profit. If we
compare this years ratio that is 2.48% as compare to previous year that is 0.78%. The
difference shows incredible change in positive direction. With the help of better
utilization of assets and expansion of its network BAL increase its ratio.

Interest margin on Average Earning Assets

2004 2,004,803 / 85,557,449 = 2.34%


2003 1,439,016 / 57,424,113 = 2.50%

This is a key determinant of bank profitability, for it provides an indication of


management’s ability to control the spread between interest income and interest expense.
The ratio of 2004 is 2.34% as compare to 2003 value that is 2.50%. The ratio is decline,
may be the reason behind is that continues decline in rate of interest by SBP. Government
gives more relaxation for investors to increase their investment in different areas like
SME sector etc.
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Equity Capital to Total Assets: Average Equity / Average
Total Assets

2004 3,253,416 / 98,952,499 = 3.29%


2003 1,615,777 / 65,167,031 = 2.48%

The ratio another name is funds to total assets. This ownership provides the cushion
against the risk of using debt and leverages. The higher the ratio then more cushion is
there and lower cushion with lower ratio. BAL ratio in 2004 is 3.29% as compare to
2.48% in 2003, which show the improvement and recently more shares are floating in the
market that will make this ratio even better than 2004 value.

Deposits times Capital: Average Deposits / Average SHE

2004 76,698,322 / 3,253,416 = 23.54t


2003 51,684,984 / 1,615,777 = 31.98t

The ratio of deposits times’ capital concerns both depositors and stockholders. To some
extent, it is a type of debt/equity ratio, indicating a bank’s debt position. As I define
above, more capital implies a greater margin of safety, while a larger deposit base gives a
prospect of higher return to stockholders, since more money is available for investment
purpose. The overall this ratio is very good in last two years. But this ratio is decrease in
2004 than 2003 from 23.54t to 31.98t respectively. Deposits are increased by 48% so
more deposits are available for investments are there and equity is double approximately.

Loans to Deposits: Average Total Loans / Average


Deposits

2004 49,216,120 / 76,698,322 = 64.17%


2003 28,319,401 / 51,684,984 = 54.79%

Average total loans to average deposits are a type of asset to liability ratio. As we know,
loans make up a large portion of the bank’s assets, and its principal obligations are the
deposits that can be withdraw on request. This ratio is increased from 54.79%in 2003 to
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64.17% in 2004, but it’s not a good sign from debt point of view because it’s indicating
the increase in risk.

ROA: Net Income / Total Assets

2004 2,123,234 / 98,952,499 = 2.14%


2003 445,679 / 65,167,031 = 0.68%

Through that ratio we measure the ability of bank to utilize its assets to create profits by
comparing profits with its assets that generating profits. The BAL ratio is incredibly
improved 3 times as compare to 2003 ratio. In 2004 this ratios is 2.14% as compare to
2003 ratio of only 0.68%. The reason is behind is that BAL income is exceedingly
increased in 2004 as compare to preceding year.

ROE: Net Income / Total Equity

2004 2,123,234 / 3,253,416 = 65.26%


2003 445,679 / 1,615,777 = 27.58%

Return on Equity is informs us about the return for shareholders. That also shows
incredible increase approx. three times. Increase in shareholders couldn’t any effect on
this ratio because the reason is that income is unexceptionally increased. The 2004 ratio
is 65.26% as compare to 2003 value of 27.58%

Profit Before Tax Ratio: PBT / Gross Markup Income

2004 3,505,680 / 4,033,380 = 86.92%


2003 894,653 / 4,551,329 = 19.65%

For banking sector, profit before tax ratio is very much important because large amount is
deducted in shape of taxes. Banks profit before tax ratio is incredibly increased in 2004
that is 86.92% as compare to 2003 value 19.65%.

Basic Earning per Share: Net Income / # of outstanding


shares

2004 2,123,234 / 200,000 = 10.62 Rs.


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2003 445,679 / 200,000 = 2.23 Rs.

This ratio is the most interesting area for stockholders and management too. This ratio
tells that how much rupees you can earn against each outstanding share. Alls ratio
shows astonishing increased because of growth in future perspective and
unbelievable change in income compare to preceding year in 2004. 10.62 Rs. is five
times greater than last year 2003 EPS that was 2.23 Rs. only.

Book Value per Share: SHE / # of outstanding shares

2004 3,253,416 / 200,000 = 16.27 Rs.


2003 1,615,777 / 200,000 = 8.08 Rs.

Book value per share ratio tells us about the original value of shares in books of account.
BAL book value per share ratio increased two times as compare to preceding year. 16.27
in 2004 shows incredible increase as compare to 2003 value that is 8.08.

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SWOT ANALYSIS

During the internship of eight weeks of mine in Bank Alfalah Limited, Main Branch
Multan, I am going for SWOT Analysis.

Strength

 Bank is believe on customer service. In first week of internship, I worked on

customer feedback desk for the purpose of improve the services.

 Customer feedback is collected on daily basis and reported to the Branch manager

to area manager.

 Bank Alfalah providing the credit card facility at minimum rate all over the

Pakistan with other good benefits.

 Phone Banking is offering first time by Bank Alfalah in Pakistan.

 Bank Alfalah modernize its banking by providing the facility of Online Banking,

ATM and money gram

 Bank Alfalah enjoying the large market share in car finance area.

 Home finance and agriculture loans are recently introduce by BAL at competitive

rates.

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 Quematic machine is used to provide facility to customers.

 Branch Manager and Chief Manager having good coordination with staff to make

the environment friendly.

Weakness

 BAL main branch, Multan all time overcrowded.

 Customers are not properly guided to get the benefit of BAL facility.

 Online services are charging compare to other competitive banks.

 BAL main branch Multan still having the shortage of cash and deposits counters.

Opportunities

 Banking industry is one of the most growing sectors in Pakistan. So Bank Alfalah

should be continually expanding its network of branches.

 Muslims are more consciously differentiate the Islamic-base banking from

interest-base banking. That is why there is large caution of expansion.

 Mobile banking should be started to compete in market.

 Establishing foreign branches.

 All products of Consumer Financing that include home financing, car financing,

home appliances products and others should be introduce to all the branches in the

cities of Pakistan.

Threats
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 Banks in Pakistan those having large networks of hundred branches like MCB,

HBL etc. are the great threats for Bank Alfalah Limited. Large networks can play

the important role in banking business. BAL having small network of 95 branches

compare to other key players in industry.

 Many other banks are now involving themselves in consumer financing at

competitive rate. This is one of the biggest threats for BAL consumer financing

products.

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RECOMMENDATIONS

Finally, I am going to gives few recommendations on the basis of my personal experience


of eight weeks of internship in Main Branch, Multan.

 The main and biggest problem which I found that main branch is always

overcrowded. In rushing hours, there is shortage of seating facility not only for

customers but also for the employees of the managers. Number of seats should be

increased on priority basis for employees and customers.

 Reception desk should be worked properly with the help of skilled person for the

purpose of guidance for customers.

 Number of counters should be increased specially in rush hours to reduce the size

of waiting line in rushing hours.

 Account opening forms should be filled properly and try to filled it in client

handwriting and sure that terms and conditions are read by clients.

 Online service charges should be reduced if that is not possible to omit it.

 In the branch, there is proper one section for the TT, DD and ATM card

application, which not only save the time of cash department but also helps the IT

department people to concentrate their original task.

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 All customers dealing desk should be at front door. Customer should not be

approached to each corner of the bank for the purpose of security.Proper customer

feedback should be taken on continues basis through feedback desk.

OBSERVATION & CONCLUSION

I observed the bank Alfalah a financially sound bank. Its profits are increasingly year by
year. Its staff is very good and sincere with the bank. Bank Alfalah under the leadership
of Sheik Nahayan Mabarak Al-Nahayan has made significant progress in building and
strengthening both the corporate and retail banking sectors in Pakistan. The bank attained
number 2 positions in terms of its balance sheet size amongst the private banks.

Bank Alfalah views specialization and service excellence as the cornerstone of its
strategy. The people at bank realize that innovation, creativity, reliability, customized,
services and their execution are they key ingredients for their future growth. Revenues
from these activities have started yielding dividends and they expect significant growth.

They are aware that they have stepped into the 21st century and they must meet its
challenges by acquiring the highest level of the technology. They will thus be
accelerating their technological advance to enable them to distribute their products and
services through most efficient and high tech means. They say that they will continue to
invest in the modern tools and substantial allocation to resources will be made to achieve
this objective during the current year. Phone Banking and credit card have been
introduced in many cities.

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TABLE OF CONTENT
...............................................................................................................................1
PREFACE............................................................................................................1
INTRODUCTION ..........................................................................................................4
INTRODUCTION TO BANK ALFALAH....................................................................................................13
Company Secretary.........................................................................................................................................20
Chief Financial Officer...................................................................................................................................20
Auditors..........................................................................................................................................................20
Head Office.....................................................................................................................................................20
Executive Committee......................................................................................................................................20
Branches Network..........................................................................................................................................21
FEATURES....................................................................................................................................................22
DEPARTMENT HIERARCHY......................................................................23
PRODUCTS OF BANK ALFALAH LIMITED............................................................................................26
Foreign currency accounts- new scheme (saving)..........................................................................................26
Currency Profits.......................................................................................................................................26
ROYAL PROFIT (PROFIT BEARING CURRENT ACCOUNT)................................................................26
Projected profit rates (per annum)..................................................................................................................26
CLASSIC PLS DEPOSITS............................................................................................................................26
TERM DEPOSITS..........................................................................................................................................26
ATM...............................................................................................................................................................27
ONLINE BANKING......................................................................................................................................27
PHONE BANKING........................................................................................................................................28
MONEYGRAM .............................................................................................................................................28
RUPEE TRAVELLERS CHEQUES..............................................................................................................29
CREDIT CARDS............................................................................................................................................31
ALFALAH CAR............................................................................................................................................34
HOME FINANCING......................................................................................................................................37
OPERATIONS DEPARTMENT....................................................................................................................40
ACCOUNT OPENING DEPARTMENT.......................................................................................................42
Saving Account...............................................................................................................................................43
Requirements..................................................................................................................................................44
3) BUSINESS ACCOUNTS...........................................................................................................................44
Requirements:.................................................................................................................................................44
Requirements..................................................................................................................................................45
PRIVATE LIMITED .....................................................................................................................................45
Requirements .................................................................................................................................................45
PUBLIC LIMITED.........................................................................................................................................46
.......................................................................................................................................................................46
CLUB / SOCIETY / ASSOCIATION............................................................................................................46
CHEQUE BOOK ISSUANCE.......................................................................................................................47
PROCEDURE ................................................................................................................................................47
CLOSING OF ACCOUNT ............................................................................................................................48
TYPES OF CHEQUES ..................................................................................................................................48
There are four types of cheques:.....................................................................................................................48
In-house cheques / transfers cheques..............................................................................................................48
Inter branch cheques.......................................................................................................................................48
Inter bank cheques..........................................................................................................................................48
Outstation cheques OBC.................................................................................................................................48
VERIFICATION OF CHEQUES/ INSTRUMENTS.....................................................................................48
Some important things should be verified and confirmed about the cheques and instruments:.....................48
......................................................................................................................................................................48
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CASH DEPARTMENT .................................................................................................................................49
CASH RECEIPTS..........................................................................................................................................49
CASH PAYMENTS OF CHEQUE ...............................................................................................................49
CLEARING DEPARTMENT........................................................................................................................50
ACCOUNTS DEPARTMENT ......................................................................................................................53
DAILY CUSTOMER MOVEMENTS LIST.................................................................................................53
TYPES OF ACCOUNT..................................................................................................................................54
CURRENT ACCOUNT.................................................................................................................................54
SAVING ACCOUNT.....................................................................................................................................54
NOTICE DEPOSITS .....................................................................................................................................54
Notice Deposit Is Of Two Types....................................................................................................................54
TERM DEPOSITS .........................................................................................................................................55
REMITTANCE DEPARTMENT ..................................................................................................................55
DEMAND DRAFT.........................................................................................................................................55
Procedure........................................................................................................................................................56
TELEGRAPHIC TRANSFER........................................................................................................................56
Procedure for Telegraphic Transfer Issuance.................................................................................................56
Procedure for Foreign Demand Draft Issuance..............................................................................................57
Procedure for Foreign Telegraphic Transfer Issuance....................................................................................58
COLLECTION...............................................................................................................................................58
Outwards Bills for Collection.........................................................................................................................59
.......................................................................................................................................................................59
PAY ORDER..................................................................................................................................................59
PAY SLIP ......................................................................................................................................................60
MONEY GRAM ............................................................................................................................................60
Procedure .......................................................................................................................................................60
FOREIGN EXCHANGE DEPARTMENT....................................................................................................61
Import.............................................................................................................................................................61
Export.............................................................................................................................................................61
DOCUMENT REQUIRED FOR EXPORTER .............................................................................................61
DOCUMENTS TO BE ATTACHED FOR EXPORTERS............................................................................62
FORM-E.........................................................................................................................................................62
FORM OF AUTHORIZED DEALER’S CERTIFICATE.............................................................................63
CERTIFICATE OF ORIGIN .........................................................................................................................63
COVERING SCHEDULE..............................................................................................................................63
BENEFICIARY CERTIFICATE ..................................................................................................................63
E-FORM.........................................................................................................................................................63
PAYMENT FROM IMPORTER BANK.......................................................................................................64
SWIFT (Standard World Wide Inter Bank Financial Transaction)................................................................64
BILL OF LADING.........................................................................................................................................64
BANK KEEP IN RECORD............................................................................................................................64
IMPORTS.......................................................................................................................................................64
NECESSARY REQUIREMENT...................................................................................................................65

DOCUMENTS FOR IMPORT.......................................................................................................................65


DOCUMENTARY CREDIT .........................................................................................................................66
TRADE SERVICS DEPARTMENT..............................................................................................................66
Four Parties Are Involved In Letter Of Credit................................................................................................66
L/C OPENING PROCEDURE ......................................................................................................................66
Document Required for “LC” Opening..........................................................................................................67
Payment to Seller............................................................................................................................................68
Documents Received By the Opening Bank..................................................................................................68
CREDIT DEPARTMENT..............................................................................................................................69
CREDIT FACILITIES....................................................................................................................................69
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Internship Report
FUNDED FACILITIES..................................................................................................................................70
Current Finance CF.........................................................................................................................................70
Finance Against Foreign Bills FAFB.............................................................................................................70
Finance Against Packing And Credit “FAPC”...............................................................................................70
Finance Against Imported Merchandise FIM.................................................................................................71
Finance Against Trust Receipt FATR............................................................................................................71
Payment Against Document PAD..................................................................................................................71
NON FUNDED FACILITIES .......................................................................................................................72
Letter Of Credit ..............................................................................................................................................72
Sight L/C.........................................................................................................................................................72
Usance L/C ....................................................................................................................................................72
GUIDE LINE OF CREDIT POLICY.............................................................................................................73
STEP I.............................................................................................................................................................75
STEP II...........................................................................................................................................................75
STEP III..........................................................................................................................................................75
STEP IV..........................................................................................................................................................76
Documents required for C.F. Hypothecation .................................................................................................76
Documents required for C.F. Pledge..............................................................................................................77
STEP V...........................................................................................................................................................78
STEP VI..........................................................................................................................................................78
STEP VII........................................................................................................................................................78
STEP VIII.......................................................................................................................................................78
RATIO ANALYSIS.......................................................................................................................................80
Earning Assets to Total Assets: Earning Assets / Total Assets......................................................................81
Return on Earning Asset: Net income / Earning Assets.................................................................................81
Interest margin on Average Earning Assets...................................................................................................81
Equity Capital to Total Assets: Average Equity / Average Total Assets.......................................................82
Deposits times Capital: Average Deposits / Average SHE............................................................................82
Loans to Deposits: Average Total Loans / Average Deposits........................................................................82
ROA: Net Income / Total Assets ...................................................................................................................83
ROE: Net Income / Total Equity....................................................................................................................83
Profit Before Tax Ratio: PBT / Gross Markup Income..................................................................................83
Basic Earning per Share: Net Income / # of outstanding shares.....................................................................83
Book Value per Share: SHE / # of outstanding shares ..................................................................................84
SWOT ANALYSIS........................................................................................................................................85
RECOMMENDATIONS................................................................................................................................88
OBSERVATION & CONCLUSION ............................................................................................................89

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Sana ullah
MB-04031 (2004-2006)
Internship Report