Professional Documents
Culture Documents
Batch 5th
Acknowledgement
On behalf of the bank I would like to express my serious appreciation to the staff
of Allied commercial bank Ltd LCCHS Lahore Cantt. For their guidance and support
me to under stand the banking environment which gives us the excellent results.
Following are the employees who give us maximum time and knowledge in this
project;
Mr. Rizwan
(In charge General Banking)
Executive Summary
This internship program is very useful for our practical experiences with
theoretical
knowledge as it is very necessary to vision the practical life which can handle
the
various problem and stages and the ability of decision. I tried my best to collect
the
valuable information and its relevant facts and figures. This report is the result
of my
I personally worked there for Eight Weeks as a part of bank and I found that BAL –
TABLE OF CONTANTS
Introduction …….……………………………. 05
Analysis …………………………………………. 31
References ……………………………………..... 33
INTRODUCTION
At the close of the sixth year of operations after its privatization in 1997, Bank
Alfalah Limited has been steadily reaching higher standards of service excellence
and performance despite many challenges.
The year 2002 has seen Bank Alfalah Limited achieving significant success both in
terms of product portfolio and customer service. The unfortunate “9/11” incident
caused economic uncertainty and political turbulence. However, Bank Alfalah
Limited was able to face these challenges valiantly and courageously.
Consequently, the size of the bank’s client base was increased that showed the
favorable reputation Bank Alfalah Limited enjoys in the market.
BRANCH NETWORK:
Over the years, the bank’s emphasis on growth has resulted in a strong entity
capable of offering high quality services to a wide spectrum of clients, in a
highly challenging business environment. Bank Alfalah Limited’s strategy is to
maximize the synergies of branch network through an optimal allocation of
financial, human and other resources in order to meet the dynamic challenges of
present financial environment. In the year 2001, the branch network increased to
32 branches, making the reach to 142 branches 15 branches operate in Islamic
banking and 59 state of art ATM machines. The bank is also operating in Bangladesh
and Afghanistan.
CONSUMER BANKING:
Bank Alfalah Limited continually strives to improve and add to the consumer
banking services. In the endeavor to provide best returns to the clients, an
impressive product portfolio has been designed to provide reasonable returns to
them, coupled with security of their capital.
AUTOMATION AND TECHNOLOGY:
Information technology and its optimum use greatly facilitate work and increase
performance potential. Bank Alfalah Limited is in the forefront of providing
customers online and timely services. For this, automated and technologically
sophisticated work flows and systems are a prerequisite.
Bank Alfalah Limited continually invests in upgrading these systems and similarly
training the human resource. The ultimate aim is to achieve both service and cost
optimization.
The in-house developed software BankSmart has been successfully installed in all
the branches and has been well received.
THE VISION
THE MISSION
MANAGEMENT STRUCTURE
Bank Alfalah is proud of its Human Resource, as almost all the employees have been
hand picked by the management. However, in this section, I would discuss those
people who are responsible for hiring such a bright staff and establishing such a
magnificent bank. They are the higher management of Bank Alfalah Limited.
Umair Hamid
Officer Collection, Remittances,
& Clearing
Rizwan Hameed
Cashier
Majid Anwar
Cashier
Arsalaan Sajid
IT
ISLAMIC BANKING
Islamic banking is basically based on those transactions that are riba (interest)
free. Any return on deposit is not riba , if the return is earned through
investment in Islamic modes then its halal.
In Islam trading profits are allowed because they involve Efforts and Risks. So
any stipulated profit on any debt is riba. Any increase over and above the
principal amount payable in a contractual agreement is Riba if it is not covered
by a corresponding increase in:
Commodity, labor, risk or expertise.
TYPES OF RIBA:
1.RIBA AL FADAL – sale transaction:
Quality premium in exchange of low quality with better quality of goods of same
kind; prohibited e.g. dates for dates or wheat for wheat.
a : Murabaha
b : Salam
c : Istesna
2. IJARA
2. Salam :
3. Istesna :
4. Ijara :
PARTNERSHIP BASED MODES:
MUSHARAKAH:
MUDARBAH:
Aim:
As being the student of M.com (Banking) 3rd semester, from University of Central
Punjab According to me for the internship program, my Aim to get the best
available knowledge and experience from that particular organization (Allied
Commercial Bank Ltd), Pakistan L.C.C.H.S Lahore Cantt. And prove my self as the
best candidate for this particular bank.
Objectives:
• Adopted the best working technique and gather the knowledge by my best
effort.
• Work there as being apart of the organization and always ready to help
others.
• Learn the procedure of the Account opening and Atm cards of the bank.
• To adopted the working condition which is suit able for each employee.
• Learn the basic objects for of all kinds of dealing with their customers.
ACTIVITES:
During my stay into Bank Alfalah Limited-IBD Y Block Defence Lahore, I was rotated
to different departments. When I joined the bank internal audit was completed. And
after that Sharia Audit came and completed their audit in six days. Then after
that in a sequence the external audit came from Karachi, which took a week.
I was rotated into the following departments:
The Account Opening Department
The department that is responsible for opening and closing an account assumes
immense significance and holds a central place in the basic banking operations.
During my stay at this department I got to fill the forms of individuals who
wanted to get their accounts opened at Bank Alfalah Limited, fill the cheques and
deposit slips of customers who were not literate enough or needed instructions,
and I also got the opportunity to give advice to the customers regarding the
requirements of account opening and the benefits of opening an account with Bank
Alfalah Limited.
The incharge of Account Opening department is Miss Durish who is the manager
customer relations. She also provided her full support towards me during my stay
at this department.
The main document in this department is, of course, the Account Opening Form.
2. Current Account:
The current account is the most common account and the most preferred amongst
business concerns. The theoretical explanation for this would be that they can
function more efficiently but since in reality there are no restrictions on any
with drawl the only reason we could think of is that current account facilitates
online banking which saves time (which in this ultra competitive business world
the most precious resource) to a considerable extent. In case of a current account
the client does not earn any profit.
Current account enables the client to do cash transactions in a more efficient
manner. Current account can be opened by all; individuals, joint or by companies.
The minimum balance required for the current account is 10,000 Rs.
LIMITED COMPANY:
Copy of certificate of incorporation
Memorandum of Association
List of Director’s
Copy of board resolution
Certificate of Commencement of Business
Copies of NIC of Director’s
Latest copy of Form-29
PARTNERSHIP:
Partnership deed certified copy
NIC photocopies of all partners.
Partnership mandate for account signed by all the partners
A letter duly signed by all the partners containing the operating
instructions of the account also has to be taken.
SOLE PROPRIETORSHIP / INDIVIDUAL:
NIC/ Passport photocopy
Letter from Proprietor confirming “sole proprietorship”
There are two things that always accompany an account opening form;
Signature Specimen Card.
Cheque Book Requisition.
Signature specimen card basically contains information that is basically a
repertoire of information given in the account opening form, but in this card the
client vividly puts his signatures as a specimen, which are scanned and stored in
an intelligent terminal for future use and reference.
Cheque Book requisition basically serves as an application to issue a Chequebook.
The client also fills it up and submits it along with the account opening form as
a result of which he is issued a Chequebook once his account is approved. As
regards the Chequebook one of the most important entries in a Chequebook
requisition is the series number of Cheques that correspond with the numbers of
the cheques contained in the Chequebook issued to the client.
PROCEDURE OF OPENING AN ACCOUNT
Step III-Introduction:
The introduction of a current account holder is accepted for the opening of either
a current account or a solving account. The introduction of saving bank account is
accepted only for saving bank accounts. The signature of the account-holder
introducing the account is obtained at the place provided for in the account
opening form.
Step IV: Specimen Signature Card (S. S. Card):
The signatures of the client are obtained on a specimen Signature card. These
cards are obtained in duplicate with two signatures on each card from the
customer. Every time a cheque is received for a payment from the client, the
signature on the cheque are verified by comparing them with the S.S. Card.
Step V-Account Number:
When all the formalities are completed then the final approval of account has to
be taken from the Branch Manager. After obtaining approval of the branch manager
an account number is allotted to the customer all the information is entered into
the computer. Then that account number is printed on the Cheque Book, S. S. cards
and account opening form.
Step VI- Issuance Of A Cheque book:
After opening an A/C with the bank, the A/C holder once again makes a request in
the name of bank for the issuance of a cheque book. The A/C holder mentions title
of A/C, A/C number, sign it properly and mentions the no of leaves he requires.
Normally BAL issues a chequebook having at least 25 leaves. Every chequebook also
contains one leaf that is used for another issue of a chequebook.
Step-VII Entry Of A cheque book:
Before issuance of a chequebook, the employee performs certain functions. They
include:
Stamping every leaf with specific A/C number.
Enters it in the chequebook issue register.
Check whether or not a senior officer has verified the signatures, if no
then first he gets them verified.
After entry in the manual register, the employee issues the cheque book to the A/C
holder after his/her signature on the register.
Outward Clearing
When cheques and other negotiable instruments drawn upon other banks like MCB,
ABN-AMRO of the same city (as Lahore) are presented in Bank Alfalah Limited IBD to
deposit them in the respective payee’s accounts, these instruments are lodged in
outward clearing of BAL-IBD.
STAMPS PUT ON THE CHEQUES
When the cheques are presented in BAL to be deposited in their respective payee’s
accounts, different stamps are put on cheques before their lodgment in outward
clearing.
CROSSING THE CHEQUES
Crossing means two parallel transverse lines, drawn across the face of the cheques
with or without words written in between them. Crossing may be general or special.
In clearing, cheques are crossed specially. Cheques are stamped with bank’s name
between two transverse parallel lines to constitute special crossing. After the
cheques have been crossed specially, the holder cannot receive payment except
through the banker named on the cheque. Basic advantage of crossing is to save the
instrument to go it from illegal hands. If, a crossed cheque is lost or stolen,
there is no risk of wrong payment. So it is an effective means of minimizing the
risk of loss or forgery.
CLEARING STAMP
After the cheques have been crossed specially, clearing stamp is put on the
cheques and other instruments, with the following day’s date, as these cheques
would have to be presented in their concerned drawee banks on the subsequent day.
ENDORSEMENT STAMP
The word endorsement is derived from Latin word ‘in dorsum’ that means ‘on the
back’. Ordinarily, it means anything written or printed upon the back of an
instrument. So, at the end, the cheques are endorsed in full (endorsed
specially) by putting the stamp with words describing “Payee’s account Credited in
BAL-IBD Y block defense Lahore.
After putting these three stamps on cheques & other negotiable instruments, they
are sent to NIFT (National Institutional Facilitation Authority) with Add List.
NIFT after segregating the cheques of different banks delivers them to their
concerned banks, which constitute the inward clearing for those (drawee) banks.
INWARD CLEARING
Cheques and other negotiable instruments (PO, DD, PS, CDR etc.) drawn BAL-IBD Y
Lahore, sent by other banks, constitutes the inward clearing of Bank Alfalah
Limited. After having all the stamps and dates of cheques confirmed, the concerned
drawer’s accounts are debited (in Bank Alfalah Limited, IBD y block defense
Lahore) and main branch’s account is credited by the total amount.
RETURN IN INWARD CLEARING
In case of cheques dishonored (returned) due to some deficiencies, the main
branch’s account is debited by the amount of cheques returned.
LIABILITY/DEPOSIT MANAGEMENT IN BAL-IBD.
Customers deposit their cash into Alfalah Islamic bank and receive profit on their
deposits. For the bank these deposits are liabilities while the advances in case
of Murabaha, Musharka or Ijara transactions are the assets, which bring profit to
the bank. The bank justifies this submission of deposits by the customers by using
the Sharia principles.
PROCEDURE:
Many customers come with their deposits and their cash is deposited in a separate
account and Musharka Pool is made. Due to t his Musharka Agreement all customers
become shreek/ partners. Now the percentage of each customer’s cash is maintained,
so that at the end of the tenure the profit is distributed according to the ratio
of their amounts
deposited.
Now another agreement is signed between the bank and the Musharka Pool, which is
Mudarbah Agreement. Here Musharka Pool acts as Rabb-ul-maal and the bank acts as
the
Mudarib.The Rabb-ul-maal is the sleeping partner; it only provides the capital
while bank or Mudarib does the management of funds and does the business. If the
Rabb-ul-maal provides 70% of the capital and the Mudarib invest 30% in the
business then the profit will be divided accordingly, each partner will get the
profit according to the ratio of his investment.i.e. Weighted average profit rates
are calculated.
The bank/ Mudarib utilizes the money in business like Home Musharka, Car Ijara,
Corporate Finance etc. and the profit that it gets through it is divided among all
the partners according to the tenure and ratio of cash deposited by each partner
ANALYSIS
References