Bank Alfalah

Limited

Al-Quran
1

Bank Alfalah
Limited

OH! PROPHET SAY! IF OCEANS ARE

CONVERTED INTO INK TO WRITE
QUALITIES OF MY CREATOR, THEN
WHOLE OCEANS WOULD CONSUME
IN WRITING BEFORE IS QUALITIES
COME TO AN END. AND EVEN IF WE
PRODUCE THE LIKE OF INK WOULD
INSUFFICIENT.

Hadith
ALLAH DOES NOT LOOK AT YOUR
FRAMS AND POSSESIONS BUT HE LOOKS
YOUR HEATS AND DEEDS.

(Muslims)

Bank Alfalah
Limited

Preface
The requirement of education by training for future MBA is met by
professional program by involving a combination of theoretical education
and practical training. It equips student with skill, knowledge and
professional values, sufficient for performing as qualified professional and
to continue to grow in their career through an unending process of learning
to learn.
Our department has therefore been seized with the need for developing
training regulation, which not only cater for the above stated requirements
but would also help in providing experience to trainees to meet the future
needs of the market place.
In this concern I was given an opportunity to having a ten weeks
training in todays well reputed ALFALAH BANK. During my whole time I
was visited through different cells of the bank and was thoroughly briefed
about the procedure and working by cordial senior staff of there. My report
is all based on what I have learnt there. I hope that my report will given you
good overlook of all the banking related matters.

Imtiaz Hussain

Bank Alfalah
Limited

Acknowledgement
All praises are for Allah almighty that has bestowed upon human being
the crown of creation and has endowed him with knowledge and wisdom.
After Allah, is the last prophet Mohammed (SAW) who brought for us
revelation and unlimited knowledge and civilized the barbarian human
being. Although this report base only my name but numerous people were
very important to the development of this report without the support of them
I could never successfully completed the internship as well as the report.
I am highly thanking full to the staff member of bank Alfalah limited.
Who really cooperated with me and provide me their complete guidance. As
banks are very much sensitive about their secrecy, even then after taking an
understanding, they let me handle their delicate operations.
My special thanks to Mr. Tahir Manzoor (Branch manager), MR. Ahmed
Adeel (Operation Manager),Mr Sadd Mehmood ( Accounts officer),
Mr. Iran Siddique (Operation Officer) and Muhammad Naveed Khalid
(Account Opening Officer).
My special thanks to Sir Incharge of internship and placement who arranged
internship and provided me with his kind guidance at each and every step
whenever I felt difficulty and he made me capable of making financial
analysis of financial statement of this organization.

Bank Alfalah
Limited

Imtiaz
Hussain
List of content
S. No

Content

Page No.

History of banking

09

Introduction of BAL

11

Accounts Opening Department

24

Remittances Department

41

IT Department

56

Accounts Department

63

Credit Department

77

Financial Analysis

117

SWOT Analysis

121

10

Suggestion & recommendation

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Bank Alfalah
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Bank Alfalah
Limited

According to our internship program, I completed my Ten weeks internship

at Bankalflah Ltd. Bahawal Nagar Branch Bahawal Nagar. The Bank is
currently operating through 210 branches in 30 cities, with the registered
office at B.A.Building, I.I.Chundrigar, Karachi. The bank ALFALAH is
service oriented organization, which perform numerous functions. In order
to facilitate the working, there are different department. Very skilled and
experienced people are working in bank.
Bank ALFALAH comprises three main departments which are General
Domestic Banking, Advances, and foreign exchange. The function of
general banking is as under.
1. Account opening Department

2. Remittance Department

3. IT Department

4. Accounts Department

5. Credit Department
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Bank Alfalah
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Vision

To be the premier organization operating locally & internationality that

provides the complete range of financial services to all segments under one
roof.

Mission
To develop & deliver the most innovative products.
Manage customer experience & deliver quality service that contributes
the brand strength.
Establish a competitive advantage and enhances profitability, thus
providing value to the stakeholder of the bank.

Bank Alfalah
Limited

Brief History
Bank Alfalfa Limited was incorporated on June 21st, 1997 as a public
limited company under the Companies Ordinance 1984. Its banking
operations commenced from November 1st, 1997. The bank is engaged in
commercial banking and related services as defined in the Banking
companies ordinance, 1962. The Bank is currently operating through 195
branches in 74 cities, with the registered office at B.A.Building,
I.I.Chundrigar, Karachi.Since its inception, as the new identity of H.C.E.B
after the privatization in 1997, the management of the bank has
implemented strategies and policies to carve a distinct position for the bank
in the market place.Strengthened with the banking of the Abu Dhabi Group
and driven by the strategic goals set out by its board of management, the
Bank has invested in revolutionary technology to have an extensive range of
products and services. We perceive the requirements of our customers and
match them with quality products and service solutions. During the past five
years, we have emerged as one of the foremost financial institution in the
region endeavoring to meet the needs of tomorrow today.

Bank Alfalah
Limited

Nature Of the
Organization
Bank Alfalah Limited is a private bank in Pakistan owned by the Abu Dhabi
Group. Bank Alfalah was incorporated on June 21, 1997 as a public limited
company under the Companies Ordinance 1984. Its banking operations
commenced from November 1, 1997. The bank is engaged in commercial
banking and related services as defined in the Banking companies
ordinance, 1962.To develop and deliver the most innovative products,
manage customer experience, deliver quality service that contribute to brand
strength, develop a competitive advantage and enhance profitability, thus
providing value to the stakeholders of the bank. Some of the major functions
of the organiztion are;

Branch banking
o

e.g. Deposits, Remittances, Foreign trade, Lockers.

Consumer banking
o

e.g. Credit Cards, Auto loans, Home loans, Consumer durables,

RTCs.

Electronic Banking
o

e.g. Telephone banking, ATMs, Online banking

Corporate banking
o

e.g. Short/Long Term finance, Trade finance, Structured finance.

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Treasury & Investment

o

e.g. Money market, Forex market, Investments, Government

securities, Correspondent banking.

Business Volume
Bank Alfalah Limited, through its subsidiaries, provides retail and
commercial banking, and corporate finance products and services in
Pakistan, the Asia Pacific, and the Middle East. The companys retail
banking products and services include retail lending and deposits, private
lending and deposits, trust and estates investment advice,
merchant/commercial/corporate cards, and private labels; commercial
banking products and services include project finance, corporate finance,
real estate, export finance, trade finance, factoring, leasing, lending,
guarantees, bills of exchange, and various deposit products; and corporate
finance products and services include services in connection with mergers
and acquisition, underwriting, privatization, securitization, research,
government and high yield debts, equity, syndication, IPO, and secondary
private placements. As of December 31, 2007, it operated a network of 231
branches. Bank Alfalah Ltd. reported earnings results for the first nine
months of 2008. The company's net profit was down by 18% at PKR 2.452
billion or PKR 3.07 per share during the first nine months of fiscal 2008.
This is mainly due to lower non-interest income, which declined by 16%

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coupled with upsurge in operating expenses which stood higher by 25%, due
to the expansion in branch network during fiscal year 2008.

Profile Of Employees

H.E.Sheikh Hamdan Bin Mubarak AlNahayan

Mr. Mohammad Saleem Akhtar (C.E.O))

Mr. Abdulla Khalil Al Mutawa

Mr.Khalid Mana Saeed Al Otaiba

Mr . Abdulla Hawalileel AL-Mansoor

Mr. Ikram Ul-Majeed Sehgal

Mr. Nadeem Iqbal Sheikh

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Bank Alfalah
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Customer Relationship:
Before we discover we must explore
Knowing customer and their needs is the key for the success of a bank;
Alfalah client relationship managers are well equipped and well trained to
provide most efficient and personalized service to each and every customer.
Alfalah products are as diverse as the market segment. Alfalah has
structured and syndicated financing arrangements, working capital,
replacement facilities, financing of international trade, consumer credit, and
small business loans unparalleled investment products for the individual
saver.

Dedicated Professionals:

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Bank Alfalah
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Unusual efforts on the part of the employees who are apparently

ordinary workers is one of the key indicates of the superior enterprise
Staff is the most valuable asset of nay organization. The human resource
philosophy at Alfalah bank focus on multi-talent hiring, professional
grooming, requisite training and meritocracy based reward system. Staff
welfare has been a priority.
Employee productivity enhancement is organized through in-house and
external training programs. Bank continues to offer opportunity for people
to develop their knowledge, skills and personalities, thus ensuring greater
self-fulfillment and progression in the organization.
In short bank Alfalah team comprise of dedicated professionals equipped
with a diverse array of skills and vast experience. The management
concentrates its energies on making informed economic decisions,
translating it into greater returns for our investors and customer. The prudent
attitude has created a synergistic organizational structure leading to
improvements in profitability and a sustainable competitive advantage for
the bank.

Training & Development:

Bank Alfalah is committed to the personal welfare and professional

development of all our team members.
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Bank Alfalah
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Proper training of human resource is essential, not only for the more
productive and satisfied work force but for also homogenous corporate
culture.
The bank continuous to follow its strategy of hiring batches of young and
energetic Management Trainees who are sent to our Training and
Development Center for training in all areas of banking. Our Training and
Development Center is a state of the art facility with an impressive faculty.

Technological innovation:

Modern science is not an option, it is an obligation

Technology is rapidly changing the way we think, act and do business. Is

has played pivotal role in enhancing customer expectation, particularly with
respect to speed and quality of service.
Alfalah bank enjoys a strategic competitive advantage overall
domestic players by virtue of its leadership in technological innovation.
Phone banking service and Internet banking facility allows customer to
enjoy routine banking services from anywhere in the world. 365 days a year,
24 hours a day.

Ethical values:

Professionalism without integrity is like a book without pages

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Bank Alfalah
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Because the right may not always be obvious, we must be guided in our
every action by set of well-defined values, governing our decision. Alfalah
bank understands that its commitment to satisfy customer needs must be
fulfilled within in a professional and ethical framework. The following
primary core values, providing the guiding principles for the corporate
behavior.

Commitment

Integrity

Fairness

Teamwork

Product portfolio:
Not only comprehensive but also customizable to match the needs
and preferences of our customers. These strategic characteristics of
our portfolio have helped us to face challenging economic conditions.
Our product lineup continues to fulfill and satisfy the banking
requirements of not just the conventional consumer, but the
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demanding financial needs of the corporate sector as well. The lineup

includes.

Car financing

Rupee Travelers Cheques

Anmol Saving Certificates

MoneyGram Remittance Services

Monthly Income Plan

Credit Card

ATMs

Home Loans

Online Banking

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Bank Alfalah
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To be the premier organizations operating locally & internationally that

provides the complete range of financial services to all segment under one
roof.

Excellence in service
Quality performance
Product innovation

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Bank Alfalah
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Chief Executive
Officer

Executive
In charge

Credit
Card

Credit

Audit

Internation
al Banking

Finance

Marketing

Branch Setup

Assistant

Credit
Mktg

Credit
Admin

Operations

Consumer
Finance

Business
Develop

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Bank Alfalah
Limited

Help Desk

Trade
Finance
Import

Accounts

Consumer
Banking

IT

Export

CROS

Bkg/Ops/
Cust serv

Cash

Clearing/
Collection

Peons

Guards

Driver

Others

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TYPES OF ACCOUNT OPENING FORM

1) Personal account opening form

2) Business account opening form

1)

Personal Account Opening

OPENING OF AN INDIVIDUAL ACCOUNT

Following are the requirements for opening of an individual account.

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1. A photocopy of National Identity card.

2. Filled Account Opening Form
3. Photographs if the person is not able to sign.
OPENING OF JOINT ACCOUNT
For this account in addition to above said documents national ID
card f all the account opening parties is required. It should be clearly
mentioned that one persons signatures will be enough to get it honored
the check or there should be signatures of all the parties.

2)

Business Account Opening

OPENING OF A PARTNERSHIP ACCOUNT

Along with the other document, partnership deed is also required.
A partnership deed is a document that shows the nature of the business that
will be carried out by the partners, number of the partners, their share. Who
will run the business, what will be the profit and loss sharing ratio, what will
be the initial investment of each partner, who will be the limited partner and
who will maintain the account with the bank. According to bank point of
view the most important thing is the persons name who will maintain the
account with bank. National identity card of the person who will maintain
the account is required.
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Bank Alfalah
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OPENING OF AN ACCOUNT OF A SOLE PROPRIETORSHIP

ACCOUNT
Along with the other documents, sole proprietorship declaration is
also must. In this declaration the proprietor of the concern will declare that
he is the sole proprietor of the concern.

OPENING OF AN ACCOUNT OF A PRIVATE LTD. COMPANY

If someone is interested in opening an account of a private limited
company then in addition to above documents following documents are
required.
RESOLUTION
This is a document that states that the meeting of the directors of the
firm has taken place on the place mentioned and these person have been
selected to open and operate the bank account and they can sign all the
negotiable instruments on the behalf of the company.

The specimen

signatures of the persons are attached. This document is very important

with bank point of view. With the help of this document the bank comes to
know that who will operate the account with the bank.

CERTIFICATE OF INCORPORATION
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Bank Alfalah
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This is a certificate that shows that the company is registered

according to companies act and the nature of the business, which will be
carried out by the company. The number of shares by which the company is
limited is also mentioned on this document.

LIST OF DIRECTORS.
This list contains the names of the directors of the company
MEMORANDUM AND ARTICLES OF ASSOCIATION
This contain the full name of the company, the location of the
registered office, the objectives of the company, information about the
liability of the member that whether it will be limited or unlimited, the
capital of the company, who will be the director and how he will be selected
and what will be the duties and powers of the director.
OPENING OF AN ACCOUNT OF A CLUB OR ASSOCIATION
For opening the account of a club or association articles & memorandum of
that club or association is required. List of directors is also attached with the
account opening form and the identity cards of the directors are also levied
with it.

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Bank Alfalah
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Specimen Signature Card

This card contains account number, title of the account and the specimen
signatures of the account holder. When this form is submitted in bank the
bank officer admits the signatures of the applicant and keeps this specimen
card in record.

Cheque Requisition Slip

This is a request made by the client to the bank to issue him a
checkbook containing number of leaves mentioned. When this slip is
submitted in bank, the bank as per instruction the account of the person is
debited or the client pays the amount in cash.If the account is to be debited
then party debit voucher is prepared which isactuallyintimation to the party
that her account has been debited. But if the amount paid is in cash, then
cash is debited which is actually cashiers stamp. Regardless whether the
account is debited or cash is debited the account heads of Central Excise
duty and Sales Tax are credited.

Custody of cheque books

The cheque books are most sensitive item of the security stationery and due
care should be exercised in their issue process as well as management of
their stock.
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Custody of cheque books:i)

Stock of cheque books must be kept in joint custody of Manager /

Accountant or Second Officer.

ii)

Stock of the cheque books must be placed in the Fire Proof Safe.

Types of account
i)

Current Account

ii)

PLS Savings

iii)

Royal Profit

iv)

Saving Account

v)

Royal Patriot

CURRENT ACCOUNT
i)

That is cheapest account. Minimum limit of money that require for

that account is 10,000.No profit is given on that account.
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ii)

PLS SAVING/ TERM DEPOSIT

In PLS amount is fix for some time period and according to that time
period the profit is given. Minimum range of amount that require for
pls saving is 25000 and above. In Pakistan, PLS account was
introduced in January 1982.

Deposit
PLS Saving Deposit (on balance upto RS.24,999 /=).
PLS 7-29 Days Notice Deposit
PLS 30 Days Notice Deposit
PLS Term Deposit 1 Month
PLS Term Deposit 3 Months
PLS Term Deposit 6 Months
PLS Term Deposit 1 Year
PLS Term Deposit 2 Years
PLS Term Deposit 3 Years
PLS Term Deposit 4 Years
PLS Term Deposit 5 Years
PLS Saving Deposit On Rs.25,000 /=) and above

iii)

Rate (P.A)%
2.00
2:00
2:00
2:00
2.25
2.50
2.75
6.00
6.50
7.00
7.50
2.00

ROYAL PROFIT

Minimum limit of amount is 50,000.

Deposit
From 50,000 to 999,999
From 1,000,000 to 9,999,999
From 10,000,000 to 49,999,999
From 50,000,000 to 149,999,999
From 150,000,000 & Above

Rate (P.A)%
2.75
3.00
3.50
4.00
Contact us

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Bank Alfalah
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iv)

SAVING ACCOUNT

It is expensive than current account. Minimum limit for this account is

5000 and 2%

Profit is given after six month.

v)
Tenure
1 Month
3 Month
6 Month
1 Year
2 Year

ROYAL PATRIOT
25000-999,999
2.00
2.25
2.50
2.75
5.50

1,000,000-4,999,999
2.10
2.35
2.60
2.85
5.58

5,000,000 & Above

2.20
2.45
2.70
2.95
5.95

Phases In Personal Account Opening

For coming customer who wants to open the account will pass through
different phases of account opening.
1) currency of account

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There are five types of currencies in which customer can open an account.
He will select only one currency. Currency like PKR, USD, GBP, DM,
JPY

2) Types of account

i)

Current Account

ii)

PLS Savings

iii)

Royal Profit

iv)

Saving Account

v)

Royal Patriot

3) Title of account

It includes the name of the person who wants to open the account. Name
must be Written in block letters.

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3) Address

It includes the address of the person who is going to open the account.

5) Personal Account
There are two types of personal account.
i)

Individual

ii)

Joint

i)

Individual

The individual account, which is opened only for an individual.

ii)

Joint

Theyre the account of two or more persons who neither partner

nor trustee. When such an account is opened the banker obtains
clear directions to whether one or more of them shall operate upon

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the account. In the absence of such directions the bank allows the
operations under the signature of all the joint account holders.
Both individual and joint provide their personal information like
i)

Name

ii)

Father name

iii)

Occupation

iv)

Nationality

v)

Country of residence

vi)

Telephone number

vii)

N.I.C / Passport number

viii)

Date and Place of issue

6) Nominee / Next of Kin

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That portion is important in case of death or any incident of account holder.

In order to make money more secure the person who wants to open the
account he tell the name of the person who will owner of his or her money
in case of any incident. After death of that
person the bank will contact with that nominee and tell them that now you
are the owner of the money.If account holder leaves blank that portion than
after the death the money will become ownership of bank.
7) Zakat Deduction
8) Details of other bank account
9) Introducer (Introduction of new accounts
As per existing procedure, an introduction is obtained from a
customer of the branch/bank in the account opening form. The
signature of introducer is also verified/ authenticated from banks
record.

Further steps to be taken and additional inquires are to be made as

under:i. Introduction preferably be obtained in person to establish
the authenticity of introduction.
ii. Account of introducer is checked to ensure good conduct
in

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operation. The introducer should be a well-known person

to the bank preferably Banks customer.
iii. A brief enquiry be made to establish relation, business or
otherwise, between introducer and new customer.

iv. Original NIC along with photocopy of the same be

obtained and original be returned after authentication/
certification of photocopy. However, extensive use of
NIC be applied wherever it is applicable.
v. Other official papers document such as passport, Driving
license and Service identity card bearing signature and
photograph of applicant for an account are to be checked,
wherever possible.
vi. Name, address, signature and other particulars mentioned
in Account Opening Form be tailed with that of
appearing in any of the above documents.
vii. Current account is opened on proper introduction
preferably by the Current account holder.
viii. Managers and other holders holding power of Attorney/
IBS /AS May introduce accounts only for those who are
personally known to them and whose credentials are
absolutely clean.

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10)

Applicant signature

11)

Initial Deposit

Initial deposit must be in cash. Cheque may only be accepted, as part of

Initial deposit in the case of undoubted parties and on the personal
responsibility of Manager. In all such cases, the cheque when tendered if
uncrossed should be crossed by the customer before being lodged for
collection. Cheque book should only be issued after the proceeds of crossed
cheque have been actually realized.

2) Phases in Business Account

1) Currency of Account

2) Type of Account

3) Title of Account

4) Business Address

5) Name

6) Father Name/Husband Name

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7) Designation

8) Nationality

9) Country of Residence

10)

Contact Number

11)

NIC number

12)

Type of Organization

i) Sole proprietorship

ii) Partnership

iii) Limited Companies

iv) Club/society
Information of types of organization is mentioned above in business account
opening point.

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Closing of account
It is also the responsibility of account opening department, for this purpose
the account holder for closing of account purpose gives an application. Then
the department closes the accounts and gives all the deposit amount to the
account holder the bank takes the chequebook from the related person and
extracts him from the books.

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Transferring of funds from person to person, and from place to place,

constitute the concept of a remittance. Remittance is very important service
provided by banks to customer as well as non-customer. It is not a free
service hence is a continuous source of income for the bank.

PARTIES TO A REMITTANCE
1) REMITTER
One who make a remittance. He comes to the issuing or originating
branch, ask for a remittance to be made, and deposits the money to be
remitted. The bank charges him for the remittance. He may or not be the
banks customer.
2) REMITEE

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Also sometimes called the beneficiary, or the payee. The person to whom
the remittance is made. The one who receives the payment.
3) ISSUING BANK
The bank that effect the remittances, through the Demand Drafts,
Telegraphic Transfer, or Mail Transfer.
4) PAYING BANK
Also known as the drawee branch. The branch on whom the instrument
is drawn. It has to make the payment. (usually located in a different city
or country)

MODES OF TRANSFERING FUNDS IN

REMITTANCES

1) Demand Draft

2) Telegraphic transfer

3) Mail Transfer
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4) Pay Orders

6)Pay Slip

6) Rupee Traveler Cheque

1) DEMAN DRAFT
Demand draft is a written order , drawn by one branch of a bank upon
another branch of the same bank , or upon another bank under special
arrangements to pay a certain sum of money to or to the order of a
specified person.
Demand draft is a negotiable instrument.
Demand draft is neither issued payable to bearer nor drawn on
branches situated within the same city.
It is to be insured that the purchaser of Demand Draft is able to at
least sign his name.
Thumb impression is not to be accepted on DD. A person unable to sign and
not having an account may be advised to apply for DD through a literate
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person to sign on his behalf . To avoid complications DD are not to be

issued to Minors.
The followings are the parties to a Draft:
Purchases: Is a person, firm, company or local authority.
Issuing or Drawing Branch:

Which issues a draft on another

branch.

Drawee Branch: Is one on which a draft is drawn.

Payee:

Is a person named in the Demand Draft to whom or to

whose order the money is directed to be paid.

PROCEDURE FOR ISSUANCE OF DRAFTS

i) An application on printed form is obtain for issue of demand draft. It

should be properly filled in and signed by the purchaser.

iii)

Before issuing the demand draft it must be seen that the

cheque is in order and sufficient amount is available in the
account of the drawer. If the manager is satisfied with the
creditability of the customer , he may issue a demand draft
on application and subsequently must obtain a cheque.
Application form should be used as a credit voucher , where
as the cheque is to be as a debit voucher. The printed
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number of the cheque in such cases should be reported on

the application form of the customer.

Entry of DD
Entry in BAL bwp branch

Yellow slip
DD Payable

credit
H Off

debit

-------------------------------------------------------------------------------------------------------

Entry in H off Karachi branch

H off

debit
DD

credit

-------------------------------------------------------------------------------------------------------

Issuance Pink Slip

H off

credit
DD

debit

-------------------------------------------------------------------------------------------------------

Entry when customer will draw amount from DD

DD payable

debit

Customer

credit

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-----------------------------------------------------------------------------------------------------------

Precautions For Issuance Of Drafts:

i) Scrutiny Of application Form:

ii) Rate of commission / charges:

i)

Scrutiny Of application Form:

There should be our banks branch at the place where payment is

desired to be made.
Full name of the payee should be mentioned.
Amount in words and figure should not differ.
Purchasers name address and telephone numbers are complete.
ii) Rate of commission / charges
Commission and other charges should be recovered at the rates
mentioned in the banks schedule of charges, as advised from time
to time, withholding tax will also be recovered wherever
applicable.

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2) TELEGRAPHIC TRANSFER
Transfer of funds from one branch to another branch of the same
bank or upon other bank under special arrangements for the
payment to the beneficiary through Telegram / Telex / Fax is
called a Telegraphic Transfer (TT).
Telegraphic Transfer is not negotiable.
Telegraphic Transfer of funds to a branch situated with in same
city should not be effected.
Remittance can be made for credit of the account of the payee /
beneficiary if maintaining account with the drawee branch or may
be paid in cash.If the customer wants to send amount through TT
then he will provide information of the beneficiary like id card
number, name. Then bank will make a credit advice and send it to
branch on which it should be drawn .Now the beneficiary will go
to that branch and show his ID card number and other information
and bank will make TTR and customer will get that amount from
cash department.

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The followings are the parties to a TT

i) Applicant: A person, firm, company, or local authority etc who
desire to remit funds from one branch to another branch.
ii) Remitting or drawing branch: Which remits the funds on another
branch.
iii) Drawee branch:

On which TT is issued.

iv) Beneficiary / payee:

The person named in the TT whom the

money is payable.
Precautions For Issuance Of TT
Full name of payee / beneficiary or account number should be
mentioned in the application form along with his address.
Instruction regarding mode of payment should be obtained i.e
whether the amount of TT is credited to the payees account or
beneficiary should be advised to receive the amount of the TT
from a drawee branch either in cash on proper identification.
Special Request For Enhancement of cheque
Because there is no real time banking so cheque is scanned and fax
that the Head Office.

44

Bank Alfalah
Limited

Entry in Head Off KRC branch

Cheque

debit

H. Off

credit

------------------------------------------------------------------------------------

If cheque is going in KRC main branch then they will make an IBC
and again Send it to BAL Bahawalpur.

Entry of BAL bwp

H. Off

debit

Customer

credit

-----------------------------------------------------------------------------------

3) MAIL TRANSFER

45

Bank Alfalah
Limited

Transfer of funds from one branch to another branch of the same

bank within or outside the city or upon other bank under special
arrangement for the payment to the beneficiary through Mail/
Courier services is called MAIL TRANSFER.

Mail transfer is not negotiable.

The funds remitted by Mail transfer are not payable to bearer.

Like TT , funds can be remitted by MT for the credit of the

payees Account Or the payee / beneficiary can be advised to
receive the amount from the drawee branch either on cash on
proper identification

4) PAY ORDER

46

Bank Alfalah
Limited

Payment order is meant for banks own payments but in

practice these are also issued to our customer for making
payments.
A pay order is written authorization for payment, made in a
receipt form issued and payable by the bank, to the person
named and addressed therein on his giving a proper discharge
thereon.
It is issued by and drawn upon and payable by the same branch
of the bank.
It is neither transferable nor negotiable and as such it is payable
to the payee named therein.
Pay order cannot be issued to a minor. Sometime bank dont
want to give its deposits to customer. So in that case pay order
is given to that customer and he can use it for making
payments. When customer wants to cash the pay order then the
amount of the pay order will be debited from the bank. If pay
order submit to other bank like mcb, abl then the process of
claring will be adopt.
Entry of issuance pay order
Customer

debit
Pay order

credit
47

Bank Alfalah
Limited

--------------------------------------------------------------------------------

Entry when customer get amount from pay order

Pay order

debit

Customer
credit
-------------------------------------------------------------------------------Following are the parties to a pay order:
i) purchaser: Is a person , firm , company or local authority
ii) issuing / paying branch: which issues / pays on presentation.
iii) payee:

is a person named therein.

5) PAY SLIP
Pay slip is for payment of branch expenses.
Entry of pay slip
Expense A/C

debit
48

Bank Alfalah
Limited

Pay slip

credit

-------------------------------------------------------------------------------------------------------

6) RUPEE TAVELER CHEQUE

BAL always provide to its customers different type of services. Which

are safe and quality services. RTC is very popular among the people of
the country. The bank provides RTC in the following categories.

1,000
5,000
10,000

Purchases of RTC
The person who wants to purchase RTC is required to fill a form. The
form contains name, address, amount or denomination and other
necessary information. The purchaser deposits the amount in the bank

49

Bank Alfalah
Limited

and gets a voucher from the cashier. And then RTC is providing to the
purchaser. Before handing over to the purchaser, signature is taken from
him on the RTC and on the copy of form. BAL rupee travelers Cheques
are acceptable in all the branches of BAL in Pakistan.

Features
Following are some features of RTC.
It is acceptable in all the branches of BAL in Pakistan.
In case of lost the purchaser inform to BAL in 24 hours. Then
there is no way of loss of purchaser and his amount is safe.
Available easily in all the branches of BAL Acceptable by major
businesses of Pakistan.

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Bank Alfalah
Limited

General Trouble Shouting

51

Bank Alfalah
Limited

Creating A Client

Day Start / Day End

SS Card Scanning

Creating And Storing Daily Backup

Maintenance Of System

General Trouble Shouting

In general trouble shouting we mainly deal in day to day problems that
appear all at once i.e. any problem with printer or with any system on
network or any thing like this which could create trouble and you have to
resolve that problem applying best of your efforts in
minimum time is part of trouble shouting.
52

Bank Alfalah
Limited

Creating A Client
For creating or making a new system and client we have to install different
software required to make a client and then install most importantly LAN
card driver in it so that it
may detect the whole network. Whole that procedure is known as client
making.

Day Start And Day End Procedure

At the start of every working day before making any transaction we have to
follow few step that are known as day start step or procedure , after that you
are allowed by software to make any transaction are finished we again
follow few step that is known as day end procedure.

SS Card Scanning

In this procedure first of all scan all the SS card and through the bank
software we upload them on server.

Creating And Storing Of Daily Backup

53

Bank Alfalah
Limited

After following the day end procedure the changes which are made final in
system database are stored as backup on system and this backup is kept in
three to four different systems.

Backup Of Data
1) Before End Of The Day Backup
2) After End Of The Day Backup
That backup is store on different places:

a) Hard Disk

b) CD

c) CD-R

d) CD-RW

e) On Work Station

Maintenance Of System

It mean general maintenance i.e. time to time up gradation

54

Bank Alfalah
Limited

55

Bank Alfalah
Limited

Voucher Sorting
Rectification of vouchers (Adjustment of
back date
wrongly posted entries)
Preparation of cash payment voucher
56

Bank Alfalah
Limited

Preparation of profit and loss sheet (on

daily basis)
Monthly budgeting
Payment of outstanding invoices of H/O

57

Bank Alfalah
Limited

Advances department plays a vital role in the functions of a bank. In BAL

its sharing ration in profit is high. The main source of Advances department
is mark up. Their Advances department is working under the trustworthy,
enthusiastic and committed a staff. The efforts of the staff are providing
good services to their customers and getting a good amount for contributing
the overall profit of BAL.The BAL provides loans to customers. These
loans are sanctioned by the head office. There are different types of loans
that are provided to customers. The types are as under.

Current Finance

Term Finance
58

Bank Alfalah
Limited

FATR

FIM

FAPC I & II

FAFB

Current Finance
The bank provides Current Finance for short period less than one year. The
customers Pay markup in current finance on monthly basis. On the expire
date of limit he will just pay principal amount.

Term Finance
Customer utilized the sanction limit or not the markup will be charged on
whole amount. Customer can withdraw whole amount at once.

FATR
There are two types of FATR
Import related type
59

Bank Alfalah
Limited

Export related type

There are two modes of import related type
FIM
FATR

FIM
Loan is provided for import purpose. By using that loan the customer will
import merchandise. The merchandise are pledges with the bank.

FATR
In FATR credit is given against trust receipt . Customer will sign the trust
receipt and import the goods and pledge these goods with the bank. As sales
proceeds the FATR will be liquidate.
There are two modes of export related type.
FAPC I
FAPC II

Different document required for facilities

FACILITY

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Bank Alfalah
Limited

1) CF
1. Demand promissory note
2. Letter of arrangement
3. Letter of continuity
4. Markup agreement
5. Latter of authority of debit markup

2) Term finance
1. Demand promissory note
2. Letter of disbursement
3. Letter of arrangement
4. Markup agreement
5. Latter of authority of debit markup
6. letter of installment

3)FATR
1. Demand promissory note
2. Letter of arrangement
3. Markup agreement
4. Letter of disbursement
5. Trust Receipt
6. Latter of authority of debit markup

61

Bank Alfalah
Limited

4)FIM
1. Demand promissory note
2. Letter of arrangement
3. Mark up agreement
4. Latter of authority of debit markup
5. Letter of authority

5)FAPC I
FAPC II
1. Demand promissory note
2. Letter of authority
3. Letter of disbursement
4. Latter of authority of debit markup
5. Packing credit letter

6)Finance against
Foreign bills
62

Bank Alfalah
Limited

1. Demand promissory note

2. Letter of arrangement
3. Letter of disbursement
4. Latter of authority of debit markup
5. Mark up agreement

Loans to staff members House loan

The house loan is provided to its staff members up to a certain limit. And up
to this limit there is no interest.

Car loan
This is expensive loan and interest is charged on this type of loan.

Motorcycle loan
Mainly this type of loan is provided to clerical staff. But the officers can
also apply for this loan.

Feature of credit department

It provides loans to different organizations, and against these loans
kept securities,
Proper judgment of these securities is also their duty.
Proper judgment of securities is the most crucial event in the process
of lending. Because in the case of default the securities are the only

63

Bank Alfalah
Limited

compensation to the bank. Default mostly is the result of improper

judgment.
In the process of judgment they follow the following principles:

1. SAFETY
character
capacity
capital
2. LIQUIDTY
3. DISPERSAL
4. REMUNERATION
5. SUITABILITY
Now I will discuss these principles in brief

(1)SAFETY
As the funds with BAL are mainly comprised of money borrowed
from depositors. They deposited their funds because they have trust and
confident on them. Therefore they are very much careful while lending, so
that the money goes in safe hands where the risk of loss does not exist. The
elements of character, capacity and capital help them in arriving at a
conclusion regarding the safety of advances.

64

Bank Alfalah
Limited

1. 1 CHARACTER
This is the management ability factor that tells how successful
business has been in the past and what is its future. This factor indicates
whether borrower will be able to pay the interest and principle amount
borrowed through the functions of the business or not.

1.2

CAPACITY

This is the management ability factor that tells how successful business has
been in the past and what is its future.

This factor indicates whether

borrower will be able to pay the interest and principle amount borrowed
through the functions of the business or not.

1.3 CAPITAL
This is the monetary base, because the money invested by the
borrower himself represents his faith in the business and its future. BAL
provide short term capital for commerce and industry, yet some borrowers
insist that bank provide them most of the capital required. So the bank
while lending must consider the amount requested for is reasonable in
relation to borrowers own resources or investment.

2) LIQUIDITY
It means the ability of recovering the advances in emergency,
because all money borrowed is repayable in lump sum on demand. The
BAL has to ensure that the funds being lent are not blocked for an undue

65

Bank Alfalah
Limited

logon period of tie, and borrower is in such a position to pay the entire
amount outstanding against them on a short notice

3) DISPERSAL
The dispersal of the amount of the advances should be broadly based
so that a larger number of borrowing customers may benefited from the
bankers funds. It is also restricted, by the SBP, a bank cannot lend more
than 20% of its capital to one party. Dispersal of loan is very necessary
from the point of security as well, because it reduces the risk of recovery
when something goes wrong in one sector or in one field. For BAL security
is the main concern, so they act on this principle and follow it.

4) REMUNERATION
The BAL needs sufficient earning to meet the following obligations.
Interest payable to the money deposited with him.
Salaries and fringe benefits payable to the staff members.
Overhead expenses and depreciation and maintenance of the fixed
assets of the bank.
An adequate sum to meet possible losses.
Provision for reserve fund to meet unforeseen contingencies.
Profit to be remitted to head office by the operations in Pakistan.

66

Bank Alfalah
Limited

A major portion of BAL earnings comes from the interest charged on

the money borrowed by the customers.
In order to meet his above mentioned expenses BAL runs a great risk;
and he has to think twice that the advances should not become bad or
doubtful and should not lent to borrower with whom the remuneration may
not be much, but also equally risky.

5) SUITABILITY
It means that advances should be allowed not only to the carefully
selected and suitable borrowers; but also in keeping with the overall national
development plans chalked out by the authorities concerned.

Before

accommodating a borrower BAL has to ensure the lending is for a purpose

in conformity with the current national credit policy laid down by the SBP.
Credit control is very efficiently exercised in Pakistan by the SBP, so
BAL should never ignore any of the restrictions issued by it.
Credit facilities are extended by the BAL, to the following borrowing
parties:

1. COMPANY
2. PARTNERSHIP
3. INDIVIDUALS
4. GOVERNMENT

67

Bank Alfalah
Limited

While lending to any of these parties the credit officer of BAL has to
check the following things.

1. COMPANY:
Where a company is a borrower the credit officer must ask and keep
on record following information:
The certificate of incorporation
The memorandum and articles of association
The certificate of commencement of business and
The last annual report containing accounts and balance sheet, to
ensure that the company is legally qualified to do business.
To ensure that the company is currently existing and is in good
standing. Credit officer should check with the registrar of joint stock
companies, and request the borrower to furnish certified List of shareholders (current)
List of directors
With public limited company verify its existence and standing on the
stock
Exchange.
It is important that the borrowing company and its directors should
have requisite authorization and power to borrow which should be
reflected in the memorandum and article of association
68

Bank Alfalah
Limited

Also see corporate resolution to borrow.

2. PARTNERSHIP
Where the borrower is a partnership, the credit officer must ask to see,
following documents;
Original partnership agreement/deed and the original certificate of
registration which will contain the name of the partners and the date
of their joining the partnership.
An individual financial statement from each partner
along these, also obtain the following document:
normal loan documents signed by all partners
continuing guarantee duly signed by all partners
Resolution/authorization to borrow and execute loan documents,
signed by all partners.
A letter signed by all partners, requesting the bank to extend credit
facilities to the firm
Certified copy of the partnership deed and certification of registration.

3. INDIVIDUAL
Lending to an individual the credit officer must ask him to see.
His financial statements for, at least the previous three years.

69

Bank Alfalah
Limited

A continuing guarantee.
The decision of extending credit to an individual borrower is
necessarily a decision for the officer concerned based on the reputation and
credit standing as a client. Depending on the amount advanced, the loan
should be secured by a pledge, hypothecation, or mortgage.

4.

GOVERNMENT
Where the government is a borrower, the credit officer must ensure that

the documents of indebtedness are signed by an officer of the government

who is duly authorized in writing and or by the rules of business. Legal
counsels opinion should be taken in these cases.

70

Bank Alfalah
Limited

Balance Sheet As At December 31,2005 &

December 31,2006
Rupees 000
2006

2005

4,540,486
232728
4634398
24694397

3,885,612
1081208
1698969
11396616

Assets
Cash & balance with Treasury Banks
Balance with other banks
Lending to financial institutions
Investments

71

Bank Alfalah
Limited

Advances
Other assets
Operating fixed assets
Deferred tax assets

28319401
984847
1760774
-

19131494
1180775
1424883
298538

65,167,031

40,098,09

Liabilities
Bills payable
Borrowing from financial institution
Deposits and other accounts
Sub-coordinated loans
Liabilities against asset subject to finance lease
Other liabilities
Deferred tax liabilities

Net Assets
Presented By
Share Capital
Reserves
Unappropriated profit
Surplus on revluation of assets

758,961
6,037,576
51,684,984
650,000
1,196,342
1,186,501

305,658
6,709,054
30,207,324
716,475
-

61,514,364

37,938,411

3,652667

2,159,684

1,000,000
3,65,727
250,050
2,036,890

750,000
361,591
249,701
798,392

3,652,667

2,159,684

Balance Sheet As At December 31,2003 &

December 31,2004
2004

Rupees 000
2003

Assets
Cash
Balance with other banks
Money at call and short notice
Investments
Advances
Operating fixed assets
Other assets

2,044,725
1,798,086
890,000
4,967,542
15,242,317
1,231,161
1,403,328

27,577,159

1,678,256
1,161,434
100,000
4,993,035
10,327,324
1,153,607
1,596,952

21,019,608

Liabilities
72

Bank Alfalah
Limited

Bills payable
Borrowing from other banks, agents
Deposits and other accounts
Other liabilities
Deferred liabilities

106,353
4,639,130
20,481,568
625,312
6,694
25,859,057

120,,868
2,972,240
15,820,473
372,855
6,892
19,923,328

Net Assets

1,718,102

1,726,280

Presented By
Share Capital
Reserves
Unappropriate profit
Shareholders equity

600,000
299,469
1,211
900,680

600,000
286,399
8,931
895,330

Surplus on revluation of investment

(13,528)

surplus on revaluation of fixed assets

887,152
830,950

895,330
830,950

1,718,102

1,726,280

Profit and Loss Account For the

year ended December 31,2006 &
December 31,2005
Mark-up / return / interest earned
Mark-up / return / interest expensed

Rupees 000
2006
2005
4,630,494
3,391,935
3,112,313
2,515,074

Net Mark-up / interest income

1,518,181

876,861

Provision against non-performing loans

(53,169)
and advances net
provision for diminution in the value of investment
bad debts written off directly
(1,447)
(55,066)

13,705

Net Mark-up / interest income after provisions

890,566

1,463,115

13,705

73

Bank Alfalah
Limited

Non Mark-up / interest income

Fee , commission and brokerage income
Dividend income
Income from dealing in foreign currencies
Other income
Total Non Mark-up / interest income

316,368
62,077
95,165
141,808
615,418

147,277
41,910
113,923
74,756
377,866

2,078,533

1,268,432

Administrative Expense
Other provision / write offs
Other charges
Total non-markup / interest expense

1,182,887
993
1,183,880

743,602
666
744,268

Profit Before Taxation

Taxation

894,653
(448,974)

524,164
(213,552)

Profit After Taxation

445,679

310,612

Non Mark-up / interest expense

Unappropriated profit brought forward

249,701
Transfer from general reserve
85,000
Transferred from surplus on revaluation of fixed asset - prior year
38,098
- current year net of tax
20,708
58,806

1,211
-

profit available for appropriation

311,823

839,186

Appropriations
Transfer of statutory reserves
(89,136)
Issue of bonus shares-interim @33.33%(2001:Nil) (250,000)
Cash dividend @ 25%(2001 : Nil)
(250,000)
(589,136)

(62,122)
(62,122)

Unappropriated profit carried forward

250,050

249.701

Basic and diluted earning per share

4.46

3.65

74

Bank Alfalah
Limited

Profit and Loss Account For the

year ended December 31,2003 &
December 31,2004
Mark-up / return / interest earned
Less: Cost/ return on deposits, borrowing etc..

Rupees 000
2004
2003
2,258,527
1,905,808
1,724,041
1,474,343
534,486

431,465

Fee , commission and brokerage income

Profit from investment securities
Dividend income
Other operating income

103,838
19,617
8,951
138,963

58,043
13,792
114,250

Total Non Mark-up

271,369

186,085

805,855

617,550

Operating Expense
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Bank Alfalah
Limited

Administrative Expense
Provision against non-performing advances
Bad debt written off directly
Provision for other losses

503,256
(103,950)
7,619
406,925

402,559
(136,076)
175
266,658

Other Income

398,930
1,420

350,892
3,523

Profit before taxation

400,350

354,415

Taxation current
- Prior
- Deferred

(170,000)
175,000
(190,000)

(220,000)
58,663
(36,554)

(185,000)

(197,891)

profit after taxation

215,350

156,524

Unappropriated profit brought forward

8,931

3,712

profit available for appropriation

224,281

160,236

Appropriations
Transfer of statutory reserves
(43,070)
Transfer from general reserve
30,000
Proposed dividend @RS.3.5 per share(1999 RS 2) (210,000)

(31,305)
(120,000)

(223,070)

(151,305)

1,211

8,931

Unappropriated profit carried forward

76

Bank Alfalah
Limited

INCOME STATEMENT FOR ANAYLISIS FOR

THE YEAR ENDED DEC 31,2005 & 2006

Mark-up Income
Non Mark-up / interest income

Rupees 000
2006
2005
4,630,494
3,391,935
615,418
377,866

Total Income

5,245,912

3,769,801

- Interest Expense

3,112,313

2,515,074

Gross profit

2,133,599

1,254,727

Administrative expense
Other provisions
Other charges
Provision against not performing
Loan & advances
bad debts written off directly

1,182,887
993
53169

743,602
663
13705

Total Expense

1,238,046

757,970

Operating profit

895,553

496,757

- Tax

448,974

213,552

- operating expense

(1,447)

77

Bank Alfalah
Limited

Net Profit

446,579

283,205

INCOME STATEMENT FOR

ANAYLISIS FOR THE YEAR ENDED DEC
31,2003, Dec 31, 2004
Rupees 000

Mark-up Income
Non Mark-up / interest income

2004
2,258,527
271,369

2003
1,905,808
186,085

Total Income

2,529,896

2,091,893

- Interest Expense

1,724,041

1,474,343

oss profit

805,855

617,550

Administrative expense
Provision against not performing
bad debts written off directly
provision for other assets

503,256
(103,950)
7,619

402,559
(136,076)
175
-

Total Expense

406,925

266,658

Operating profit

398,930

350,892

- Tax

185,000

197,891

Net Profit

215,350

160,236

- operating expense

78

Bank Alfalah
Limited

Horizontal analysis of income

statement for the year ended 31,2006
Rupees 000

in amount

% age

Mark-up Income
Non Mark-up / interest income

1238559
237552

36.51
62.86

Total Income

1476111

39.15

- Interest Expense

597239

23.74

Gross profit

878872

47.59

Administrative expense
Other provisions
Other charges
Provision against not performing
Loan & advances
bad debts written off directly

439285
330
39914

59.07
49.77
291.2

Total Expense

480076

63.33

Operating profit

398796

80.27

- Tax

235422

110.2

- operating expense

79

Bank Alfalah
Limited

Net Profit

163374

57.68

Horizontal analysis of Balance Sheet for the year

ended 31,2006
Rupees 000

in amount

% age

Cash & balance with Treasury Banks

Balance with other banks

654874
(848480)

16.853
(78.475)

Lending to financial institutions

Investments
Advances
Other assets
Operating fixed assets
Deferred tax assets

2935429
13297781
9187907
(195928)
335891
-

172.77
116.681
48.025
(16.593)
23.573
-

453303

148.303

Assets

Liabilities
Bills payable

Borrowing from financial institution

(671478)
Deposits and other accounts
21477660
Sub-coordinated loans
Liabilities against asset subject to finance lease Other liabilities
479867
Deferred tax liabilities
-

(10.008)
71.100
66.976
-

Net Assets

23575953
1492983

62.142
69.129

Presented By
Share Capital
Reserves
Unappropriated profit

250000
4136
349

33.333
1.1438
0.1397

Surplus on revaluation of assets

254485
1238498

155.12

1492983

69.129

18.694

80

Bank Alfalah
Limited

Vertical analysis of income statement

for the year ended 31,2006 & Dec 31,2005
2002

2001
%

Mark-up Income
Non Mark-up / interest income

88.26
11.73

89.97
10.02

Total Income

100%

100%

- Interest Expense

59.32

66.71

Gross profit

40.67

33.28

Administrative expense
Other provisions
Other charges

22.54
0.018

19.72
0.017

Provision against not performing

Loan & advances
bad debts written off directly

1.022

0.36

0.275

Total Expense

23.06

20.10

Operating profit
- Tax

17.07
8.558

13.17
5.664

Net Profit

8.51

5.66

- Operating expense

81

Bank Alfalah
Limited

Interpretation of income statement

The markup income decrease in 2006. This shows that banks earn
lesser in markup income as compare to 2005.
Non markup income in 2006 is 11.73% where as in 2005 it is
10.02%. This shows non markup income is increase in 2006.
Interest expense is decrease in 2006 as compare to 2005.
Due to decrease in interest expense the gross profit is increase in
2006.
In the portion of operating expense the Administrative expense
increase in 2006. Other charges are increase in 2006 by 0.001%.
Provision against not performing Loan & advances are also
increase in 2006. Bad debts written off directly is the addition of
new expense in 2006. The total operating expense in 2006 are
23.06% where as 20.01% in 2001. That shows total operating
expenses are increase in 2006.
Operating profit in 2006 is 17.07% and in 2001 is 13.17%. That
shows the operating profit increase in 2006.
Tax deduction from operating expense in 2006 is 8.558% and
in 2005 it was 5.664%. That shows the interest increase in
2006.
Net profit in 2006 is 8.51% and 5.66% was in 2005. So that
shows the net profit is increase.
82

Bank Alfalah
Limited

Vertical analysis of Balance Sheet As At

December 31,2003 & Dec 31, 2004
Assets
Cash & balance with Treasury Banks
Balance with other banks
Lending to financial institutions

2002
%

2001
%

6.96
0.35
0.71

9.69
2.69
4.23
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Bank Alfalah
Limited

Investments
Advances
Other assets
Operating fixed assets
Deferred tax assets

37.89
43.45
1.51
0.27
-

28.4
47.71
2.94
3.55

Liabilities
Bills payable
Borrowing from financial institution
Deposits and other accounts

1.16
9.26
79.31

0.76
16.7
75.33

Sub-coordinated loans
Liabilities against asset subject to finance lease
Other liabilities
Deferred tax liabilities

1.00
1.83
1.82

Net Assets
Presented By
Share Capital
Reserves
Unappropriated profit
Surplus on revluation of assets

1.53
0.56

1.78
-

1.87
0.90
0.38

3.125

0.62
1.99

Interpretation of Balance sheet

Assets

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Bank Alfalah
Limited

a) The liquid assets such as Cash & balance with Treasury Banks
decrease in 2002. It shows that management is investing cash in
high quality and maintains balances with other banks. The balance
with other banks decreases in 2006 i.e. 0.35 %as compare to 2005
which is 2.69%.
b) The portion of investment in total assets is 37.89% in 2006 and
28.4% in 2005. this is not much favorable trend because
management should advance more and invest less.
c) Portion of advances in percentage of total asset is decreased
43.45% as compare to 2005 which was 47.71%.
d) Portion of fixed asset decrease in 2006 as compare to 2005.
e) Lending of Financial Institutions decrease in 2006 that is 0.71% as
compare to 2005 that was 4.23%. This shows that management
trend of giving loan to financial institution is decreases.

A) REGULATORY RATIOS
Advances To Deposit Ratio

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Bank Alfalah
Limited

This ratio is calculated by dividing the amount of advances by

deposits. This ratios shows the relationship of advances to deposits. It
means that what is the percentage of advances to deposit of a bank.
Whether the advances are enough toms pay its liabilities.

Formula
Advances
Deposits

2006

28,319,401
51,684,984

54.7 %

2005
19,131,494
30,207,324

63.33 %

2004

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Bank Alfalah
Limited

15,242,317
20,481,568

74.41 %

2003
10,327,324
15,820,473

65.27 %

Interpretation
This ratio shows the decreasing trend except 2000 where it increase
from 65.27 to 74.41. Overall this ratio shows that management is not
aggressive toward advancing of loan.

Cash To deposit Ratio

The ration is calculating by dividing the cash on hand and cash with
other banks by total deposits of the bank. This ratio shows the
percentage of cash available as compared to deposits . this ratio tells

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Bank Alfalah
Limited

that at any time if cash is needed to meet the liabilities of deposit

liabilities to what percentage it is available.

Formula
Cash on hand and cash with other bank
Total Deposit

2006
1,122,962
51,684,984

2.17%

2005
772,140
30,207,324

2.55%

2004
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Bank Alfalah
Limited

324,503
20,481,568

1.584%

2003
248,251
15,820,473

1.56%

Interpretation
This ratio is on increasing trend which is unfavorable. This shows that
bank is not proper utilizing its deposits.

B) CAPITAL ADEQUACY RATIOS

Equity To Assets
This ratio is calculating by dividing shareholders equity by total
assets.

Formula

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Bank Alfalah
Limited

Shareholders equity
Total Assets

2006
1,615,777
65,167,031

2.47%

2005
1,361,292
40,098,095

3.39%

2004
900,680
27,577,159

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Bank Alfalah
Limited

=
2003

3.26%
895,330
21,019,608

4.25%

Interpretation
This ratio shows continuously decreasing trend. It means that is not
favorable for bank.

Equity To Deposits
This ratio shows the percentage of shareholders equity to total
deposit. This ratio is calculating by shareholders equity by total
deposits of the bank.

Formula
Total Shareholders equity
Total Deposits

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Bank Alfalah
Limited

2006
1,615,777
51,684,984

0.312 x

2005
1,361,292
30,207,324

2004

0.450x

900,680
20,481,568

0.439x
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Bank Alfalah
Limited

2003

895,330
15,820,473

0.56x

Interpretation
This ratio shows decreasing trend except 2001 which increases from 4.39 to
4.50.

C) EFFICIENCY RATIOS
Deposit To Total Liabilities
The deposit is calculating by dividing total deposits by total liabilities.
This ratio shows the percentage of total deposits to total liabilities
which is the major liability of the bank.

Formula
Total Deposits
Total Liabilities

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Bank Alfalah
Limited

2006
51,684,984
61,514,364

84.01%

2005
30207324
37,938,411

79.62%

2004
20,481,568
25,859,057

79.20%

2003
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Bank Alfalah
Limited

15,820,473
19,293,328

81.99%

Interpretation
This ratio increases in 2002 that is positive sign that bank has more
funds to invest. In 2000 and 2001 this ratio becomes down it mean
that management was not properly invest its funds.

Investment To Total Assets

This ratio is calculating by dividing investment by total assets. This ratio shows
the percentage of investment to total assets.

Formula
Investment

Assets
2006
24,694,397
65,167,031

37.89%

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Bank Alfalah
Limited

2005
11,396,616
40,098,095

28.42%

2004
4,967,542
27,577,159

2003

18.01%

4,993,035
21,019,608

23.75%
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Bank Alfalah
Limited

Interpretation
The investment to total asset of bank alfalah indicates

the portion of

investment in banks total assets, in 2002 it is increasing which is not a

favorable trend. This shows that management does not work properly and
efficiently and not utilizing the assets fully by investment. In 2000 when the
ratio decrease from 23.79 to 18.01 it mean management is properly utilizing
the asset fully by investment.

D) PROFITIBILITY RATIOS
Net Profit Margin
This ratio is calculating by dividing profit after tax by total income.
This ratio shows that what is the percentage of net profit to the total
income.

Formula
Profit After Tax

Total Income

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Bank Alfalah
Limited

2006
446579
5245912

8.51%

2005
310,612
3769801

8.23%

2004
215,350
2,529,896

8.51%

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Bank Alfalah
Limited

2003
160,236
2,091,893

7.65%

Interpretation
This ratio shows increasing trend which is favorable this shows
management work efficiently. Management has ability to operate
business with great success.

Operating Profit Margin

This ratio is calculated by dividing the operating profit by total
income. This ratio shows that what is the percentage of operating
profit to the total income.

Formula
Operating Profit

Total Income

2006
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Bank Alfalah
Limited

894653
5245912

17.05%

2005
524,164
3769801

13.90%

2004
398,930
2529896

15.76%

2003
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Bank Alfalah
Limited

350,892
2091893

16.77%

Interpretation
Operating profit ratio shows the profits of a firm that earn on its
income. In 2002 the trend of this ration is 17.05% this is a favorable
trend for the bank..

Gross Profit Margin

This ratio is calculated by dividing the gross profit by total income.
This ratio shows that what is the percentage of gross profit to the total
income.

Formula
Gross Profit

Total Income

2006
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Bank Alfalah
Limited

2133599
5245912

40.67%

2005
1254727
3769801

33.82%

2004
805855
2529896

31.85%

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Bank Alfalah
Limited

2003
617550
2091893

29.52%

Return On Equity
This ratio is calculating by dividing net profit by total equity. This
ratio shows that how much the company is earning on shareholders
equity.

Formula
Net Profit

Total Equity

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Bank Alfalah
Limited

2006
445,679
1,615,777

27.58%

2005
310,612
1,361,292

22.81%

2004
215,350
900,680

23.90%

2003
160,236
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Bank Alfalah
Limited

895,330

17.89%

Interpretation
In 2002 the ratio is increase from 22.81% to 27.58% . This shows that
management is utilizing its equity in good way. So this is favorable
for bank.

Return On Total Assets

This ratio is obtained by dividing net profit by total assets. This ratio shows that
what percentage of earning the company is attaining on total assets.

Formula
Net Profit

Total Assets

2006
446579
65,167,031

0.685%
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Bank Alfalah
Limited

2005
310,612
40,098,095

0.774%

2004
215,350
27,577,159

0.780%

2003
160,236
21,019,608

0.762%

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Bank Alfalah
Limited

Interpretation
This ratio measure bank ability to utilize its assets to create profit by
comparing profit with assets generates profit. This ratio shows
decreasing trend. this mean that management is not properly using its
assets.

Six-Year Financial Summary

2001

2002 2003 2004 2005 2006

Rupees in Million

OPERATIONAL RESULT
Total income
Operating Expense

1,248 181,4 2,096 2,531

3,770

5,246

233

337

403

511

744

1,184

Profit before income tax

81

162

218

304

510

948

Profit before income tax

68

354

400

524

895
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Bank Alfalah
Limited

Profit after taxation

145

157

215

311

446

Shareholders Equity
1,616

713

850

895

901

1,362

Total assets
40,09865,167

10,527 14,321 21,019 28,855

Advances Net of provision

4,850

7,758 10,327 15,242 19,13128,319

Investment Net of provision

11,39724,694

3,349

3,407 4,993 4,875

Deposits and other Accounts

9,019

11,878 15,821 20,482 30,20751,685

Imports
26,65833,676

1,491

4,709 5,909 13,856

Exports

4,313

6,787 10,020 16,756 25,26133,042

BALANCE SHEET

OTHERS

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Bank Alfalah
Limited

STRENGHTS
BAL provides its customers a complete range of banking products
and services including retail banking, corporate and institutional
banking, trade finance and consumer finance.
BAL has planned to institute major improvements in customer
services and internal systems to improve efficiency. It also intends to
launch innovative products. The bank is increasing resource

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Bank Alfalah
Limited

mobilization through regular deposit campaigns and accelerating the

process of recovery of outstanding advances.
The Management of ALFALAH Bank Limited (BAL), in order to
further improve the quality of service.
Bank has very good financial resources.
Bank has good brand name.
Banks have competent human resource.
Automated process and procedure.
The services and Profit rate is competitive in market.
BAL has attracted most of customers in Pakistan. BAL has attractive
and good Buildings.
BAL RTC is market leading.

BAL is Successive and Market oriented. Investment in human

development and social welfare project is high
and Less default customer.
Bank is providing best services according to the requirement of the
customers.

WEAKNESS
Smaller branch network
Age of bank is very low.
Less banking experience.
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Bank Alfalah
Limited

Some management positons needed are not professional.

Customers having accounts with small amounts are not given same
services and dealing given to those with high accounts.

OPPORTUNITIES
Business in market
Branch network
Technology

THREATS
Privatization of HBL & UBL
Growing global technological advancement.
Emerging banks
Innovative services of other banks
Change in economic trend
Change in international banking services
BAL is not using ATM

while other banks or providing this

facility so that is also technological threat for Bal.

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Bank Alfalah
Limited

SUGGESTIONS & RECOMMENDATIONS

The following are the suggestions that I have recommend for the Alfalah
bank limited.
Try to establish effective communication between top-level
management and executive.
Also do marketing through internet
Effective training and qualified, dutiful and vigilant inspection teams
are inducted per force in all the bank.
civil services of the country
The branch should improve his position to attract more customers.

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Bank Alfalah
Limited

The behavior with the customers should be improved.

There is a great need of proper training of employee.
The bank must have to apply the marketing strategies to attract the
customers which are depositors.

LIMITATION
There was only five to sixe person with proper knowledge of banking.
No proper material of banking was provided during my internship.
The branch, where I did my internship is providing very few customer
services but the capture big guns of the market.

113