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1, Issue 1 _____________________________________________________________________________________
Internship Report on Bank Alfalah Limited
Author(s): Muhammad Rashid Badar
E-mail: email@example.com Research Student, Department of Management Sciences, The Islamia University of Bahawalpur, Punjab, Pakistan
© HRMARS, Pakistan
Directory of Management e-Publications August (2011) Vol.1, Issue 1 _____________________________________________________________________________________
Internship is the integral and basic requirement of all the business study programmes in all of the business study institutes as it is necessary and basic requirement of the BBA(Hons) degree of the Department of Management Sciences The Islamia University of Bahawalpur. Because it is the practical implication of the theoretical knowledge which we have taught in our business subjects to gain further knowledge and experience about professional business activities. It equips us with the necessary knowledge, skills and values of business culture which are basic requirement of the business professional and which also helps new graduates to perform professionally as they get first step in their practical professional life. For this reason I was placed at Bank Alfalah Limited Circular Road Branch Bahawalpur where I have done my six weeks internship. During my internship tenure I have gained a lot of knowledge about operations under the supervision and guidance of my Internship Supervisor. During my whole duration I was rotated in all the different departments of the bank and was thoroughly briefed about the procedures of all the banking operations by the concerned staff. My internship report contains all the knowledge which I have learnt there. Dear readers this report is prepared in very simple, easy and understandable way so that common and ordinary readers who do not have banking knowledge can also take benefit from this report. I hope my report will give you easy and deep overlook of all the banking operations to the readers.
Thank you Muhammad Rashid Badar
© HRMARS, Pakistan
Directory of Management e-Publications August (2011) Vol.1, Issue 1 _____________________________________________________________________________________
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, the last Prophet Mohammad (PBUH) Who brought for us revelation and unlimited knowledge and civilized the barbarian human being. I am very thank full to Allah Almighty who gave me the courage to complete this complex task and to my ever caring and loving parents whose prayers helped me to reach this stage of my life. Besides, there are many people who supported me in formulation of this report and without the support of them I could never be able to complete this report successfully. In this respect I am very thank full to Mr.Zeshan Mustafa (Branch Manager), Mr. Zeshan Naqvi (Operations Manager & Incharge Internship) and the qualified staff members of Bank Alfalah Limited Bahawalpur, who cooperated with me with their guidance at each step of my internship. They have provided me a lot of important information and knowledge about the banking operations in a very short period of time. Last but not least, my very special thanks to Mr. Nazik Hussain (Incharge Internship & Placement) who provided me with his guidance and profitable knowledge whenever I need that.
Thank you Muhammad Rashid Badar
© HRMARS, Pakistan
hrmars. Issue 1 _____________________________________________________________________________________ Dedicated to: My ever caring and loving Parents & Respectable Teachers © HRMARS. Pakistan www.com 4 .1.Directory of Management e-Publications August (2011) Vol.
1.hrmars. Pakistan www.com 5 . Vision of Organization Objectives of Organization Corporate. Business and Departmental Level Strategies Organizational Structure Performance of Bank Alfalah Working of Various Divisions/Departments Account Opening Department Car Financing Department Remittances Department Credits Trade Finance Clearing Financial Analysis SWOT Analysis Suggestions and Recommendations Conclusion © HRMARS. Issue 1 _____________________________________________________________________________________ Table of Contents Executive Summary Introduction of Organization Banking History Introduction of Bank Alfalah Limited 06 07 07 08 10 11 15 16 17 20 20 25 27 29 31 32 44 59 60 60 Mission.Directory of Management e-Publications August (2011) Vol.
products and complete overlook on the financial performance of the bank with SWOT analysis of the bank. These products includes Alfalah car financing.Directory of Management e-Publications August (2011) Vol. Bank’s product portfolio includes such type of innovative products according to the needs and preferences of the customers which are providing benefits to customers as well as adding profits to the bank. Bank is engaged in corporate and retail banking. Issue 1 _____________________________________________________________________________________ Executive Summary Bank Alfalah is a private bank providing financial services to the customers under the charge and ownership of Abu-Dahbi group under the leadership of His Highness Sheikh Nahayan Mabarak Al-Nayayan. the strategies. Alfalah credit cards. Alfalah Hilal Cards. some recommendations and suggestions with a full conclusion of the Bank Alfalah’s internship report. Advances credits. online banking and Islamic Banking. © HRMARS.com 6 . By the end of 2009 bank has 321 branches which includes 60 Islamic Banking branches with seven foreign branches out of which five branches are in Bangladesh and two in Afghanistan and one offshore branch in Bahrain.1. who is very energetic and humble towards customers which is beneficial for the bank. positive and continuous trends and its profit percentage is increasing every year. The Bank Alfalah is growing very impressively and making profits which growing higher day by day with the slogan of “The Caring Bank” making the wishes of people come true through the philosophy of transferring concepts to reality. Bank is providing its financial services to customers with the help of his qualified human work force of 9. Money Gram.551. this report almost includes each and every aspect about Bank Alfalah which is very helpful for every reader. Introduction and history of the Bank Alfalah.hrmars. This report includes the introduction of banking. Alfalah Zarie Sahulat. Currently bank continues to strengthen its presence in market by the help of expansion plan. policies which they have implemented. about departments. Pakistan www. Last but not the least. Bank’s growth graph is showing upward. Royal Profits.
Then “Quaid-e-Azam Muhammad Ali Jinnah” (The Governor General of Pakistan) at that time took a step ahead and inaugurated “The State Bank of Pakistan” on July 1st . In ancient times the religious temples were used as the safest place for keeping money and gold by people of that time under the supervision of the priests. Banking In Pakistan: Prior to Independence British banks controlled the banking operation in Pakistan.com 7 . © HRMARS. Because in ancient times the benches were used by the Jews for the purpose of exchanging money. After independence there were no resources so that Pakistanis could start their own banking system in a very short period of time. 1948 which then took control of all the banking operations of Pakistan.1. It was a very big loss for Pakistan at that time as being a new nation with new country having few resources for survival. Today’s modern banking system is the ultimate and step by step achievement of the ancient banking system of accepting deposits from those who have surplus and lending to those who do not have it or have little. Goldsmiths then acted as the financial agents in exchange of gold and valuables which provided the basis of modern banking.Directory of Management e-Publications August (2011) Vol.hrmars. But this was not good for the best interest of Pakistan because British Government at that time distributed the reserves of the “Reserve Bank of India” between India and Pakistan with the share of 70% India and 30% Pakistan. desk or counter. Pakistan www. Issue 1 _____________________________________________________________________________________ Introduction History of Banking: The word “Bank” is derived from the Italian word “Bancus or Banque” which means bench. Then at that time it was decided that “Reserve Bank of India” will control the banking operations in Pakistan.
Issue 1 _____________________________________________________________________________________ Introduction of Bank Alfalah Limited (The Caring Bank): Bank Alfalah Limited was incorporated on June 21st.A. The Bank is currently operating through 195 branches in 74 cities. the Bank has invested in revolutionary technology to have an extensive range of products and services. with the registered office at B. we have emerged as one of the foremost financial institution in the region endeavoring to meet the needs of tomorrow today.Chundrigar. © HRMARS.Building.E. as the new identity of H. 1962.Directory of Management e-Publications August (2011) Vol. Its banking operations commenced from November 1st .1. Pakistan www. Karachi. 1992 as a public limited company under the Companies Ordinance 1984. The bank is engaged in commercial banking and related services as defined in the Banking companies ordinance.I. Strengthened with the banking of the Abu Dhabi Group and driven by the strategic goals set out by its board of management.C.com 8 . Since its inception. I.1997. This facilitates our commitment to a culture of innovation and seeks out synergies with clients and service providers to ensure uninterrupted services to its customers. the management of the bank has implemented strategies and policies to carve a distinct position for the bank in the market place.B after the privatization in 1997. We perceive the requirements of our customers and match them with quality products and service solutions. During the past five years.hrmars.
com 9 .1.Khalid Mana Saeed Al Otaiba Director Mr. Pakistan www. Ikram Ul-Majeed Sehgal Director Mr. Issue 1 _____________________________________________________________________________________ Board of Directors: H.hrmars. Sheikh Hamdan Bin Mubarak Al Nahayan Chairman Mr. Sirajuddin Director & CEO Aziz © HRMARS. Nadeem Iqbal Sheikh Director Mr. Abdull Khalil Al Mutawa Director Mr. Abdulla Nasser Hawalileel Al-Mansoori Director Mr.Directory of Management e-Publications August (2011) Vol.E.
deliver quality services that contributes to brand strength. © HRMARS.Directory of Management e-Publications August (2011) Vol.hrmars.com 10 . Vision To be the premier organization operating locally & internationality that provides the complete range of financial services to all segments under one roof.1. manage customer experience. Issue 1 _____________________________________________________________________________________ Mission To develop & deliver the most innovative products. establishes a competitive advantage and enhances profitability. Pakistan www. thus providing value to the stakeholders of the bank.
Issue 1 _____________________________________________________________________________________ Objectives To create an efficient system of banking in Pakistan. Pakistan www.Directory of Management e-Publications August (2011) Vol. Delivering every service and product under one roof.com 11 . Maintain high profits. Expanding Islamic banking. Human Resource Management: As it’s a universal fact that the success of any organization lies in the hands of their human resource or the employees working for that organization and the human resource is the most valuable asset of any organization.hrmars. In this concern the management of Bank Afalah is well © HRMARS.1.
1. This is essential for every employee to attend these training and development programmes and conferences once in a year. Although the head office of Human Resource Management of Bank Alfalah is in Karachi but every branch is managing its employees on its own with the philosophy of controlling every subordinate by his supervisor because these supervisors are working according to the policies directed by the Head Office. who can perform well best for the Bank with little external and in-house training to increase the efficiency and productivity of the human resource. For this purpose Bank Alfalah is providing training to their employees in following important areas.Directory of Management e-Publications August (2011) Vol. The core ideology of Bank Alfalah in respect of their human resource selection is to hire multi talented and dedicated professionals. knowledge and productivity of human resource. Marketing Credit administration/documentation Consumer banking operations Performance appraisal skills Consumer banking operation.com 12 . knowledge and vast experience of financial world which is required to keep the Bank on the way of modern banking with the objective of gaining high profits. Issue 1 _____________________________________________________________________________________ known for their hard work. their training and development is essential and necessary to keep them up to date about new methods of working and performing operations. Training and Development of the Human Resource: After hiring the human resource. innovative thinking and full dedication to satisfy and retain the clients of the Bank and keep the Bank on front row. In this way they are cooperating with one another and are achieving the goals and standards of the Bank set by the top management. In this respect Bank Alfalah conducts training programmes and conferences with the passage of time and at regular intervals of the year at Head Office Karachi for increasing skills. Trade Finance Time management Products & Services: Debit Card/ Hilal card Car Financing Money Gram Agri Finance Credit Cards © HRMARS.hrmars. Credit marketing and proposals. The employees of Bank Alfalah is well equiped with skills. Pakistan www.
© HRMARS. Agri Finance ( Alfalah Zarie Sahulat): In view of importance of agriculture for the Pakistan economy and keeping in view the small farmers who have little resources for production for them. Online Banking 2. and money is handled by quality agents linked through computers who makes it sure that your money is safely transferred to the desired place and person. Bank Alfalah has designed “Rural Finance Programme” which is named as “Bank Alfalah Zarie Sahulat”This facility is available for short. If you have this facility then there is no need of dealing in physical cash withdrawal. There is no hidden charges Minimum down payment Quickest processing Tenure period 1-5 years 3. 4.1. Credit Cards: Provide farmers an integrated package of credit. With the Visa Network Hilal card is acceptable at more than 1. Debit Card/ Hilal Card: Alfalah debit or Hilal card gives you the immediate and easy access to your current or saving account anywhere and anytime with a simple swipe of your card at millions of ATM’S and retail shops. 5. Money Gram is available in over 180 countries and territories and in more than 190. effectively. supervision and technical know-how. Pakistan www.hrmars.000 locations worldwide. just swipe your card and your transaction will be completed in no time.com 13 . either you get the vehicle leased or financed. Car Financing: Bank Alfalah has introduced Car Financing in which you have two options.2 million ATM’s and 29 Million retail outlets around the world.Directory of Management e-Publications August (2011) Vol. medium and long term durations. Money Gram: Bank Alfalah is providing the facility of Money gram which is the person to person transfer of money that allows consumers to receive money in just few moments. Bank Alfalah has designed this facility to achieve following objectives Provide Help reliable farmers utilize infrastructure funds for efficiently Agri and customers. Issue 1 _____________________________________________________________________________________ 1.
Business and Departmental level Strategies: Bank Alfalah is successfully completing its journey towards progress with the help of its specialized. SMS for card usage. It enables you to pay for shopping. Corporate Level Strategies: At the corporate/top level there is board of directors and executive committee. and in Pakistan also. For this purpose the managerial policies which are adopted by the Bank Alfalah are as under.hrmars. mini statement. 6. As with the passage of time and it is fact that the external business environment is very dynamic in nature so these strategies keep on changing to keep the Bank up to date. Sui Gas.Directory of Management e-Publications August (2011) Vol. travel.com . Online Banking: Bank is providing online banking services to its customers such as balance inquiries statement requests through automated online telephone service and online ATM services anywhere and at every place where bank exists. entertainment. highly qualified and professional management at all levels. etc. who controls such important functions as determining goals and objectives. It is accepted at nearly 29 million locations in more than 200 countries around the world.1. Cash withdrawal at all 1LINK ATMs Special offer on Warid post paid connections. Departmental Level Strategies: 14 © HRMARS. Business Level Strategies: Top management formulates the business level strategies. They define and interpret the objectives and goals and formulate policies to achieve them. formulations of business policies and strategic planning. meals and much more. Pakistan www. payment receipt confirmation. The features which makes Alfalah Credit card as an important product for customers are. No joining/ Annual / Renewal fee (except Platinum Card) Electricity. Corporate philosophy stresses the highest level of security. skilled. reliability and value for its client’s money which is the core strength of the bank. Chief Managers are also the part of this management level who formulates the strategies and technical planning which determines the methods of getting the best and in time completion of jobs from its human resource. Top management formulates the strategies in accordance with the standards formulate to achieve the desired goals and objectives. Corporate. Issue 1 _____________________________________________________________________________________ Alfalah credit card is globally accepted at all those locations which have the logo of VISA. PTCL abd Warid bills payment through 24 hour Call Center and Auto Debit instructions.
Issue 1 _____________________________________________________________________________________ At this level Head of the Departments formulate these strategies. © HRMARS.hrmars.Directory of Management e-Publications August (2011) Vol.1. Pakistan www. For implementation of these policies meeting are called with the presence of Head of the Departments to get the best and efficient and desired goals behind these formulated policies. Each and every branch manager formulates the policies according to the branch setup and at each level of bank environment because he is directly responsible for the management and controlling the activities of the employees.com 15 .
com 16 .Directory of Management e-Publications August (2011) Vol. Pakistan www.hrmars. Issue 1 _____________________________________________________________________________________ Performance of Bank Alfalah: Source: Bank Alfalah Annual Report 2009 © HRMARS.1.
Issue 1 _____________________________________________________________________________________ Source: Bank Alfalah Annual Report 2009 © HRMARS.hrmars. Pakistan www.1.Directory of Management e-Publications August (2011) Vol.com 17 .
Issue 1 _____________________________________________________________________________________ Source: Bank Alfalah Annual Report 2009 © HRMARS.com 18 .hrmars.1.Directory of Management e-Publications August (2011) Vol. Pakistan www.
This account is also called as “Student Account”. The minimum balance requirement for opening this account is Rs. During my whole duration of six months I have done work in the following departments.10. Current Account 2.1.10.000. 1.000 in their accounts because in this account there is no requirement of minimum balance maintenance. Pakistan www. Furthermore there is no restriction of deposition and withdrawal of money from this account at any point of time.com 19 . i). Current Account: It is a non-interest bearing account.Directory of Management e-Publications August (2011) Vol.hrmars.000 salary and for students who cannot maintain minimum balance of Rs. Accounts Opening Car Finance Remittances Credits Trade Finance Clearing Accounts Opening Department Most important and front line department of bank which comes under the retail/ general banking. All the current account holders receive a Hilal Debit Card to get benefit from the ATM service of the bank. They are Basic Banking Account (BBA account) Simple Current Account Alfalah Kamyab Karobar Account Thee detail on each is as under. Saving Account 1. Following are the types of accounts which come under the head of current account.Basic Banking Account (BBA account) This account is introduced for low income people like persons with 25. Following are the types of the accounts. Features: © HRMARS. Issue 1 _____________________________________________________________________________________ Departments Worked During Internship I did my internship at Bank Alfalah Limited Circular Road Bahawalpur.
It has following types of accounts.000 Platinum Category above Rs. 1. Only 4 transactions through cheque are allowed in a month otherwise Rs.000-50.5.000 is required to open this account.000 should be maintained in this account otherwise Rs. Average balance maintenance is according to the type of category in which the customer lies. Pakistan www.58 will be charged per month.Directory of Management e-Publications August (2011) Vol. Alfalah Mahan Amdan Account Alfalah Mahan Amdan Plus(Term Deposit) i).000. Initial deposit of Rs. Average balance of Rs.1.hrmars.5000 is required. No service charges at all.58 will be charged per month to account holder. Saving Account: Saving account is an interest-bearing account. Simple saving account Royal Profit Account Kifayat Account.10. © HRMARS.com 20 .Alfalah Kamyab Karobar Account: This account is especially for businessmen.Simple Saving Account: Initial deposit and average balance maintenance is Rs. ii). Online service is available (on customer demand) No charges for online service.100. The category and average balance maintenance in respective category are Silver Category Rs 5.000 Gold Category Rs.10.Simple Current Account: A minimum initial deposit of Rs. 000 2.50. iii). Issue 1 _____________________________________________________________________________________ Minimum Initial deposit of Rs. 000-100.000. Facility of ATM.
Profit is distributed at rate of 5 % per year but its calculations are done on monthly basis. If you withdraw your money between 9-12 months you will get a profit at 9%. For getting profit there must be above Rs. Maximum amount of deposit in this account is of Rs. If you withdraw your money between 6-9 months you will get a profit at 8%.000 with no upper limit. Only 3 debit transactions are allowed per month. If balance falls from 10.5% on monthly basis.5 million.1.Royal Profit Account: Initial deposit and average balance maintenance is Rs.Directory of Management e-Publications August (2011) Vol. Issue 1 _____________________________________________________________________________________ Profit rate is 5 % Profit is distributed on half yearly basis.hrmars. Free insurance.10. If you withdraw your money within 6 months you will get a profit at 5% .000 is required.000 with an upper limit of Rs 1.50.1 million.Kifayat Account: It is a type of saving account in which minimum initial deposit and average balance maintenance of Rs. In case of withdrawn of your money before maturity date then the profit will be distributed as follows. Pakistan www. iii).50. Profit is paid at the rate of 7% per annum.000 balance in account. ii).50. If there is not maintained a balance of Rs. v).50. Minimum balance of account is Rs. 21 © HRMARS.com .100. Profit is given on Quarterly basis. Profit rate is 10. iv). Minimum balance of account is of Rs.Alfalah Mahan Amdan Account: It’s a term deposit for three years.000 then no profit will be given to account holder.Alfalah Mahan Amdan Plus(Term Deposit): In this account the amount is fixed for one year. Profit rate is 10 % per annum and paid on monthly basis.000 then the account holder will not get any profit.000 for this account.
Directory of Management e-Publications August (2011) Vol.1, Issue 1 _____________________________________________________________________________________
Opening an Account:
For new customers who want to open an account at Bank Alfalah has to fill a “Relationship Contract”, which includes such information as follows 1. Title of Account. 2. Personal information of applicant 3. Next of Kin This portion is important for securing the money of the customer in case of his/her death of or any incident with the account holder. By this thing the account holder specifies and provide the information and data of the person who will be the owner of his/her money after his/her death or any serious incident with him/her. If account holder leaves it blank then bank will be the owner of his/her money. Address for correspondence 4. Type of Entity Individual Joint sole proprietorship Public/Private Ltd Co. Partnership. 5. Nature of Account Current Account PLS Saving Account Royal Profit Account Saving Account Others 6. Currency of Accounts Bank Alfalah deals in five currencies and account holder must have select from them. These are PKR, USD, GBP, Euro, and JPY 7. Zakat Deduction 8. Details of other bank accounts 9. Introduced by
Basic Requisites for Opening an Account for individuals/self employed persons
are as follows CNIC
Company letterhead or authorization (as required) NTN certificate (optional) Source of income (salary slip etc)
© HRMARS, Pakistan www.hrmars.com 22
The basic Requisites to open an account for a partnership:
NTN certificate (optional) Partnership Deed Company Letterhead Partners CNIC Article of Association Directors CNIC Memorandum of Association NTN certificate (optional) Company Letterhead
The basic Requisites to open an account for companies:
Car Financing Department
In the age of today’s modern banking, car financing is one of the most important and selling product of of all the banks including Bank Alfalah. Because it is very easy for the people to save them from paying a huge sum of money that’s why people prefer to have finance their vehicles.
Features of Bank Alfalah’s Car Financing:
Tenure period ranging from 1-5 years Minimum down payment starting from 20 % No hidden charges Insurance facility Premature termination charges should be paid by the customer according to the year in which he/she terminated the contract of payments on the remaining amount which are, 1 5% 2 4% 3 4% 4 3% 5 2%
Year Mark up
Mark up rates of Bank Afalah for all presented vehicles for financing are, 1Yr 17.50% 19.00% 2Yr 17.50% 19.00% 3Yr 18.00% 19.00% 4Yr 18.50% 19.00% 5Yr 18.50% 19.00%
Financing Product Car Loan for Brand New Vehicles Car Loan for Brand New Imported Vehicles Band New Semi Commercial Vehicles (locally manufactured) Second Hand Vehicles
© HRMARS, Pakistan
Source: Bank Alfalah Website
The procedure of financing car starts when a person comes and asks for a vehicle to be financed. First thing which that person have to do is to fill an application form stating the car which he wants to be financed, its color and two references with his complete personal information regarding his profession, source of income, age etc. This is all what is required from the customer. After this bank working starts. Bank verifies all the information provided by the customer along with the verification of two references provided. After completing the verification process Bank generates the Credit Line Proposal (CRP).This proposal then sent to the Area Office for approval. After the approval from the Area office the customer will sing a legal document of this deal with Bank along with the down payment. When this process completes a quotation is sent to the car dealer for a stated car. Registration of car is carried out and Bank insured the car with collaboration of Insurance Company and car handed over to customer. After the completion of finance tenure the Bank issues NOC to customer stating that there is no obligation left to be fulfilled by the customer.
Remittance means the transfer of funds form one account to another or one city to other city. Instruments which are used for transfer of money are, Demand Draft Pay slip Pay order (payment order
i).Demand Draft: It’s a negotiable instrument It’s 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 according to the order by the customer. DD is cannot be issued within the same city.
There are two ways in which a demand draft can be used for transfer of money,
When money is transferred from Bank Alfalah to other city on the demand of the customer it’s known as outward DD. The procedure foe this is that the customer will fill the DD application form and present the cash he wants to transfer through DD. After checking all the provided details the bank officer will make a DD and pass the following entries for this transaction,
© HRMARS, Pakistan www.hrmars.com 24
Head office (Dr) DD payable account (Cr) When the Bank Alfalah’s account holder comes with DD to receive money then following entries are passed DD payable Account (Dr) Customer Account (Cr) When the customer comes with DD who is not the account holder of Bank Alfalah then following entries are passed DD payable Account (Dr) Cash (Cr) Charges for making DD are Rs. This is also called as true banker cheque. used for the payment of the branch expenses.1. Issue 1 _____________________________________________________________________________________ For Cash Sundry Account (Dr) Head Office (Cr) For Cheque: Customer Account (Dr) Head Office (Cr) Inward DD: When the issuing branch of the DD send advice in the form of the copy of the instrument or DD then following entries are passed. ii). The entries for the payments are passed as. © HRMARS.Pay Slip: This is Bank’s cheque book. Pakistan www.hrmars.58 including 16 % federal excise duty.com 25 .Directory of Management e-Publications August (2011) Vol.
com 26 . It is cleared in 5-6 days and it is crossed by default.1. paid and maintained by the same branch. It is issued. ii. The entry for the issuance of pay order is. Bank Alfalah’s credit department works both with Retail and middle market group and corporate groups. These loans are sanctioned by the Head Office at Karachi. i. Funded Credit Line Facility: © HRMARS.Pay order (Payment order): Pay order is the way of transferring money within the same city. Types of Credit line Facilities: Bank Alfalah is providing two types of credit line facilities. When the customer comes to get the money through pay order then following entry is passed by the bank. After paying the charges for making pay order the pay order is issue to the customer. Usually cheque is used for transfer of money through pay order.58 including 16 % federal excise duty (FED). Procedure: The customer fills the application form for pay order along with his details and cash or cheque. It is also called as Banker Cheque or Manager Cheque. Pakistan www. Funded Non-Funded 1. Customer Account (Dr) Pay order Payable (Cr) Charges for making Pay Order are Rs.Directory of Management e-Publications August (2011) Vol. Issue 1 _____________________________________________________________________________________ Expenses Account (Dr) Pay Slip (Cr) iii).hrmars. Pay order Payable (Dr) Customer Account (Cr) Credits Department Credits department advances loans to needy and eligible customers and this department adds a big share of profit to overall profit of the Bank Alfalah.
and 5 years. Actually financing is done for the equipment. Repayment is done in installments. Letter of Credit Letter of Guarantee/Bank Guarantee 27 © HRMARS. 2.Non Funded Credit Line Facility: It’s a commissioned based financing. mark up is charged by the bank on the whole amount of funds either customer utilized the sanction limit or not. This credit facility has two products.Term Finance: Term finance is a long term credit facility of 2. In this credit facility funds are not transferred to the customer directly. Running/Current Finance Cash Finance Term finance Lease Finance i). the ownership is on the name of bank first. It is also known as project financing. iv). after repayment of funds the ownership is transferred to the customer. The important point in this credit facility is. Pakistan www. It is also known as equipment financing. iii).com . Issue 1 _____________________________________________________________________________________ In funded facility the amount of loan is physically dispersed to the customer. Financing is done on the basis of analysis of the business.Running/Current Finance: Current finance is provided to the companies for supporting their operations for a short time period of one year.Cash Financing: Cash financing is also a short term credit facility of one year. In this credit facility.hrmars. This credit facility is very attractive for the companies in managing their working capital because mark up is charged by the bank only on the utilized part of the funds. The products which comes under credit line facility are as follows. Bank provides funds against some securities like mortgage securities.1. 3. ii). And Bank advances funds up to 60% of the given securities.Directory of Management e-Publications August (2011) Vol. This is basically a stock financing for those small businessmen who can run their business very smoothly if they get credit from the bank which they can’t perform well otherwise.Lease Finance: It is also a long term credit facility provided by Bank Alfalah.
Letter of Credit: As it is stated earlier in non funded credit facility in “Credit Department” that Letter of Credit is actually a written undertaking by the issuing bank for the payment of a sum of money during a specified duration of time on the request of applicant (buyer) to the beneficiary (seller). Pakistan www.hrmars. It is actually a written undertaking by the issuing bank for the payment a sum of money during a specified duration of time on the request of applicant (buyer) to the beneficiary (seller).1.Site LC: Site LC is the form of LC in which the bank honors the beneficiary against the documents and the material stated in the LC at the place which is stated by the mutual consent of the applicant and beneficiary. Site LC Usance LC i). pledge of stocks etc.Directory of Management e-Publications August (2011) Vol. It is issued against some securities like mortgage properties. Trade Finance Department This department controls the trade which occurs across the borders from Pakistan to other countries or in short foreign trade which includes imports and exports.Usance LC: 28 © HRMARS.” ii). ii.Letter of Credit: This is used for the purpose of foreign trade.com .Letter of Guarantee/Bank Guarantee: It is a written guarantee by the bank on the behalf of the customer which bank gives to the specific company because it is usually used in bidding and tenders filling. ii). Receiving of shipment and payment occurs at the same time. For this purpose “Letter of Credit” is issued by the issuing bank to facilitate the trade between two traders of the different countries. It will be discussed in detail in department of “Trade Finance. It provides security and safety for the payment of a sum of money involves in trading to the applicant and beneficiary who are doing imports or exports. Issue 1 _____________________________________________________________________________________ i). Types of LC’s: There are two types of LC’s i. It will be discussed in detail in department of “Trade Finance.
vii. i. LC application request Sale Contract/Performa Invoice LC application form Customer Portfolio Beneficiary will provide the following things. Inward Clearing Outward Clearing Inward Clearing: When a customer comes who has his account in Bank Alfalah and he presents a cheque which is also of Bank Alfalah then transferring of funds in this case through cheque from one account to another is termed as inward clearing. vi. Pakistan www. It is the part of the Remittances Department. ix. LC amount Quantity of imports (Weight. v. Payment is done after some time. ii. a credit line proposal is made which is sent to the Area Office. iii. Clearing Department Clearing means the transfer of funds within the same bank or to other banks. Clearing can be done in following ways.1. units) Partail shipment allowed or not allowed Certificate of Origin Bill of Lending Airway Bill Truck Receipts Packing List Performa Invoice After verification of securities and details provided by the application. viii. Issue 1 _____________________________________________________________________________________ In this type of LC payment is made against the acceptance of the items stated in the LC with stated conditions.Directory of Management e-Publications August (2011) Vol.hrmars. i. Outward Clearing: © HRMARS. iv. Documents/Requirements for LC: Applicant will provide the following things for a LC. iv. Clearing is done for cross cheques only. ii. After Area Office approval the LC is issued to the customer.com 29 . iii.
com 30 .Directory of Management e-Publications August (2011) Vol. cheque should be above than Rs.1.hrmars. But there is a condition under which a customer can use the facility of same day clearing and that is. National Institutional Facilitator Technologies (NIFT) is used for this purpose. Pakistan www. © HRMARS. Same day clearing: Clearing of cheques which occurs in one day is called same day clearing. The NIFT employees come daily and take all the cheques from the bank for clearing purpose and deliver them to State Bank. In this way the process of clearing is done by The Bank Alfalah. Usually it takes 4-5 days for clearing a cheque. Presentation and clearing of cheques is carried out in the same day.200. Issue 1 _____________________________________________________________________________________ When a person with his account in Bank Alfalah comes and presents a cheque of the bank other than Bank Alfalah then transferring of funds in this case through cheque from one account of the other bank to another account of Bank Alfalah is termed as outward clearing.000 otherwise a person can’t use the facility of same day clearing. The process of clearing is done in a clearing house of the State Bank.
Pakistan www. Issue 1 _____________________________________________________________________________________ Financial Analysis © HRMARS.com 31 .Directory of Management e-Publications August (2011) Vol.1.hrmars.
Pakistan www.Directory of Management e-Publications August (2011) Vol.hrmars.1. Issue 1 _____________________________________________________________________________________ Balance Sheet As At December 31. 2009 & December 31.com 32 . 2008 © HRMARS.
Issue 1 _____________________________________________________________________________________ Source: Bank Alfalah Limited Annual Report 2009 (with little editing according to requirement) Balance Sheet As At December 31.hrmars. Pakistan www.com 33 . 2007 & December 31.Directory of Management e-Publications August (2011) Vol.1. 2006 Source: Bank Alfalah Limited Annual Report 2007 (with little editing according to requirement) © HRMARS.
Directory of Management e-Publications August (2011) Vol.1.com 34 . Issue 1 _____________________________________________________________________________________ Balance Sheet As At December 31.hrmars. 2005 Source: Bank Alfalah Limited Annual Report 2006 (with little editing according to requirement) © HRMARS. Pakistan www.
hrmars. Issue 1 _____________________________________________________________________________________ Profit and Loss Account For the Year Ended December 31.com . Pakistan www. 2009 & December 31.Directory of Management e-Publications August (2011) Vol. 2008 Source: Bank Alfalah Limited Annual Report 2009 (with little editing according to requirement) 35 © HRMARS.1.
Issue 1 _____________________________________________________________________________________ Profit and Loss Account For the Year Ended December 31.com 36 .hrmars. 2006 Source: Bank Alfalah Limited Annual Report 2007 (with little editing according to requirement) Profit and Loss Account For the Year Ended December 31. 2005 © HRMARS.1. Pakistan www.Directory of Management e-Publications August (2011) Vol. 2007& December 31.
1. Issue 1 _____________________________________________________________________________________ Source: Bank Alfalah Limited Annual Report 2007 (with little editing according to requirement) © HRMARS.hrmars. Pakistan www.Directory of Management e-Publications August (2011) Vol.com 37 .
hrmars. Pakistan www. Issue 1 _____________________________________________________________________________________ Source: Bank Alfalah Limited Annual Report 2009 © HRMARS.Directory of Management e-Publications August (2011) Vol.com 38 .1.
In 2009 it is high at 3.42% Interpretation: This ratio should be high which is better for the business but.1.hrmars.46% 2007 4.46% but is even less of the highest value of 4. Total Assets Turnover: This ratio measures that how much turnover is generated by the total assets of the organization. Bank Alfalah’s total assets turnover showing a mixed trend of increase and decrease in past five years. Issue 1 _____________________________________________________________________________________ Financial Ratios 1. This is calculated by the given formula. © HRMARS. Total Assets Turnover = Annual Sales or Total Income/Average Total Assets Year TAT 2009 3.23% 2005 3.Directory of Management e-Publications August (2011) Vol.24% in 2007.com 39 .24% 2006 3. Pakistan www.88% 2008 3.88% as compare to 2008 at 3.
276% © HRMARS. Return on Investment = Op Profit/Average Operating Assets Year ROI 2009 0.hrmars. Return on Deposits = Net Income After Tax/Total Deposits Year ROD 2009 0.735% 2005 0.14% 2005 1. Issue 1 _____________________________________________________________________________________ 2. Bank Alfalah’s ROI showing a decreasing trend over the past five years with lowest in 2009 that is 0.75% 2006 1.14% 2006 0. 3.Directory of Management e-Publications August (2011) Vol. Pakistan 2008 0.75% in 2007 which is not favorable for the bank.1.com .48% Interpretation: The answer of this ratio should be high or should be shown a positive increasing trend for better and favorable results. Return on Deposits: This ratio measures the return on deposits by the total deposits of the organization obtained by dividing net income after taxes to total deposits as shown by the formula.623% 2007 1. Return on Investment: This ratio is calculated by dividing Op profit by the average of operating assets as shown by the formula.324% and highest as 1.765% 40 www.432% 2007 1.324% 2008 0.
Fixed Assets Turnover = Annual Sales or Total Income/Total Fixed Assets Year FAT 2009 82.92% 2008 85. 4.32% 2007 107.Directory of Management e-Publications August (2011) Vol.276% in 2009 which is not good for the Bank Alfalah.72% Interpretation: © HRMARS. Pakistan www. It is the ratio of annual sales to total fixed assets as given by the formula.1.14% with lowest value as 0.43% 2005 38.56% 2006 24.com 41 .hrmars. Fixed Assets Turnover: This ratio measures the efficiency of using fixed assets in generating income or sales. so it should be high which will be better for the business but it is showing a continuous decreasing trend from 2005 to 2009 except a highest value in 2007 which is 1. Issue 1 _____________________________________________________________________________________ Interpretation: As this ratio shows the total return which business gains from the total deposits.
In this case of Bank Alfalah.hrmars.97 2008 3.42 Interpretation: The current ratio should be in reasonable range. 5. © HRMARS.61 2005 6. It is the ratio of current assets to current liabilities as.Directory of Management e-Publications August (2011) Vol. it is showing a decreasing trend which is not favorable for the business because it may pose difficulty for the bank to fulfill its current obligations.02 2006 4.com 42 . as it was high in 2005 then decreased in 2006 then increases in 2007 to a very high level and onward there is a continuous decreasing trend which is not good for the bank. Current Ratio: Current ratio indicates the liquidity position of the business that whether business can fulfill its obligation or not. Current Ratio = Current Assets/ Current Liabilities Year CR 2009 2. It should not be too high or too low. Pakistan www. both conditions are not favorable.1. It is showing a very ambiguous trend. Issue 1 _____________________________________________________________________________________ The result of this ratio should always be high for favorable business environment because high ratio shows that business is investing more efficiently and effectively in fixed assets for generating sales.35 2007 2.
Debt Equity Ratio = Long Term Debt/ Total Capitalization 43 © HRMARS. It is calculated by dividing long term debt to total capitalization as shown by the given formula. Debt Equity Ratio: This ratio tells about the financial leverage of the organization that what proportion of debt and what proportion of equity is being used by the organization for financing its available assets. Issue 1 _____________________________________________________________________________________ 6.1.com . Dividend Payout Ratio: This ratio tells about the relationship between earnings and dividend that whether earnings are supporting dividend payments or not.hrmars.67% 2008 86.Directory of Management e-Publications August (2011) Vol. It is calculated by dividing dividend per share to earnings per share (EPS) as shown by the given formula. Dividend Payout Ratio = Dividend per share/EPS Year DPR 2009 112. Pakistan www. 7.52% 2007 Nil 2006 Nil 2005 Nil Interpretation: Usually higher dividend payout ratio is favorable and it is high for Bank Alfalah in 2009 which is favorable.
Pakistan www.18% Interpretation: A higher value of debt equity ratio is much favorable for the business as its high value tells about the efficiency of the business to using its available debt for financing. Ratio Analysis Profitability Ratios: These ratios tells about the profitability of the business and is consists of the following ratios from which we can assess the profitability of the business.1.com 44 .02% in 2008 to 25.93% in 2009 but it is still lower as compare to highest level of 33.58% 2005 33.93% 2008 14. Bank Alfalah’s debt equity ratio is showing a decreasing trend over the past five years but as compare to 2008 it is increased in 2009 from 14.Directory of Management e-Publications August (2011) Vol.18% in 2005. Net Profit Margin: © HRMARS. i).09% 2006 29. Issue 1 _____________________________________________________________________________________ Year DER 2009 25.02% 2007 22.hrmars.
It is calculated by the formula.46% Margin Interpretation: It is showing a mixed trend from 2005 to 2007 but onward showing a decreasing trend which is not better for the business. Issue 1 _____________________________________________________________________________________ This ratio is mostly used for the internal comparison. Pakistan www.Directory of Management e-Publications August (2011) Vol.77% 2005 24. It is indicating a greater risk and low margin safety for the business.07% 2007 24. Year 2009 2008 11.40% 2006 20. This ratio shows the percentage of net profit after tax to the total income/revenue. ii). A higher profit margin ratio indicates a higher margin safety and lower risk for the organization and vice versa.1. It is calculated by the following formula © HRMARS.64% Net Profit 7.com 45 .hrmars. Operating Profit Margin: This ratio tells us about the percentage of operating profit to total income.
685% © HRMARS.36% 2006 30. Iii).hrmars.Directory of Management e-Publications August (2011) Vol. Issue 1 _____________________________________________________________________________________ Year Op-margin 2009 8.45% 2008 15. Return on Total Assets (ROTA): This ratio tells about the percentage of net profit/earnings which business is attaining by using its total available assets.1. It is not favorable for the business.24% 2005 37.27% 2007 35.com 46 . Return on Total Assets = Year ROTA 2009 0.639% 2005 0.230% 2008 0.372% Net Profit/Total Assets 2007 0. Pakistan www.951% 2006 0. It is calculated by dividing net profit to total assets as shown by the given formula.10% Interpretation: Its high value is favorable for the business. It is overall showing a decreasing trend from 2005 to 2009 except an increase in 2007 as compare to 2006 which is even then low as compare to 2005 results.
Issue 1 _____________________________________________________________________________________ Interpretation: Higher ROTA is favorable for the business which shows better use of asstes by the business for generating profits.80% © HRMARS.951%. It is calculated by dividing net income after taxes to shareholder’s equity as shown by the given formula.Directory of Management e-Publications August (2011) Vol. Bank Afalah’s ROTA is showing a decreasing trend over past five years except in 2007 with a highest value of 0.1. iv).63% 2007 19. Year ROE 2009 4.com 47 .30% 2006 14.05% 2008 7.hrmars. and measures the efficiency of the organization of generating profits by using shareholder’s equity.Return on Equity: This ratio shows a relationship between net income after taxes and shareholder’s equity. Pakistan www.40% 2005 22.
90% 2006 20. Pakistan www. 2. Bank Alfalah’s ITA is showing a mixed trend of increasing and decreasing over the past five years. Issue 1 _____________________________________________________________________________________ Interpretation: It should be high for favorable results.com 48 .1.76% 2007 26.48% 2008 21. But bank should try to keep it high by making better policies.48% as compare to 2008 at 21. This ratio of Bank Alfalah is showing a decreasing trend except in 2005 and 2007 over past five years.Investment to Total Assets Ratio (ITA): This ratio tells about the percentage of investment to assets calculated by dividing investment to assets as shown by the following formula.76% which is favorable. i).Directory of Management e-Publications August (2011) Vol. Investment to Total Assets Ratio = Investment/Assets Year ITA 2009 25.hrmars. In 2009 it is high at 25. Efficiency Ratios: These ratios tells about the efficient use of the assets and liabilities of the business which is calculated by the following ratios.12% Interpretation: This ratio should be in high figures for favorable results of the business. © HRMARS.5% 2005 23.
91% 2005 92. © HRMARS.Directory of Management e-Publications August (2011) Vol.31% Interpretation: It is showing a mixed trend of increase and decrease over past five years. Deposits to Total Liabilities = Total Deposits/Total Liabilities Year DTL 2009 88. Pakistan www.1.50% 2008 90. As it is decreased in 2009 to 88.6% in 2008 which is not favorable.hrmars.50% from 90. Issue 1 _____________________________________________________________________________________ ii).Deposits to Total Liabilities: It is calculated by dividing total deposits to total liabilities as shown by the given formula.6% 2007 87.com 49 .36% 2006 90.
1. Pakistan www. Equity to deposits ratio = Total Shareholder’s Equity/ Total Deposits Year ED 2009 6.81% 2008 4.35% Interpretation: It is showing an average increasing trend over the past five years which is favorable.Equity to deposits ratio: This is the ratio of total shareholder’s equity to total deposits and is calculated by the following formula.11% 2005 3. © HRMARS.88% 2007 5. Capital Adequacy Ratios: i).hrmars.93% 2006 5. Issue 1 _____________________________________________________________________________________ 3.Directory of Management e-Publications August (2011) Vol.com 50 .
44% 2005 3.Directory of Management e-Publications August (2011) Vol. Issue 1 _____________________________________________________________________________________ ii).88% 2007 4.. Pakistan www. Equity to Assets Ratio = Total Shareholder’s Equity/Total Assets Year ETA 2009 5. © HRMARS.com 51 .hrmars.00% Interpretation: It is showing an increasing trend except in 2008 decreased trend but overall it is increasing which is favorable for the business.69% 2008 4.Equity to Assets Ratio: This is the ratio of total shareholder’s equity to total assets and is calculated by the following formula.1.93% 2006 4.
Regulatory Ratios: i).79% 2008 18.hrmars.Cash to Deposit Ratio: This ratio tells about the percentage of cash available as compare to the deposits.04% 2007 17. © HRMARS.94% 2005 15.52% Interpretation: As this ratio tells about the liquidity status of the bank.Directory of Management e-Publications August (2011) Vol. Issue 1 _____________________________________________________________________________________ 4. It is calculated by dividing cash on hand and with other banks to total deposits as shown by the given formula.com 52 . Cash to Deposit Ratio = Cash on hand and with other Banks/ Total Deposits Year CTD 2009 17. Pakistan www.50% 2006 16.1. It is showing an increasing trend from 2005 to 2008 and in 2009 it becomes lower.
Advances to Deposits Ratio: This is the ratio of advances to deposits which shows the percentage of advances as compare to deposits and is calculated by the given formula. Issue 1 _____________________________________________________________________________________ ii).67% 2006 62.45% Interpretation: This ratio tells about the status and measure of the level for advancing loans.com 53 . It is showing an increasing trend from 2005 t0 2008 but it lowers in 2009 which shows that bank is not advancing loans as much as it was in previous four years from 2005 to 2008.77% 2007 62.Directory of Management e-Publications August (2011) Vol.90% 2008 63.62% 2005 53.hrmars. Pakistan www.1. Advances to Deposits Ratio = Advances/Deposits Year AD 2009 57. SWOT Analysis © HRMARS.
com .hrmars. skilled and professional HR Branch location is very ideal Attractive buildings of bank Less cost of funds as compare to competitors Training schedule of employees is better than other banks Weaknesses: Inexperienced workforce Small age of bank Lack huge foreign network Work overload on employees Less banking experience Lack of professionally trained staff at head quarters Opportunities: Increasing demand of consumer banking Increasing branch network in Pakistan Increasing branch network at International level Growing Islamic Banking branch network Increased rate of interest Threats: Adverse economic conditions Privatization of banks Terrorism Government policies are very much inconsistent Lack of experienced workforce Trend of banks merging.1.Directory of Management e-Publications August (2011) Vol. Pakistan www. Issue 1 _____________________________________________________________________________________ Strengths: Very attractive Brand name Continuous and Phenomenal growth in profitability as its age is increasing The support of the Pakistani Government Workforce is very energetic because most of the workforce consists of the young employees Highly trained. Suggestions and Recommendations: 54 © HRMARS.
1. it actually acts as a financial intermediary which connects persons with surplus money to those who have shortage of money. savings and gold with precious metals as well because the people thought that their money and gold is safe there. Bank should hire some of the skilled marketers who can design creative and attractive advertisements and advertising campaigns by using all possible medias to make every person aware of the bank’s updates about old and new products and services. Employees should not be overloaded with work. Pakistan www. So bank should review its policies of launching new products in short and reasonable time. Till the end of June. But today’s modern banking system is much different from that system.hrmars.1948 the financial operations of Pakistan was governed by the “Reserve © HRMARS. The history of banking in Pakistan is very interesting because at the time of independence there was no bank in Pakistan which could perform the banking operations for this area of the world. Bank is using token system to avoid difficulties for the customers to withdraw or pay deposits. Conclusion The “bank” is actually an institution which accepts or collects the money or deposits from those who have surplus of it and lend it to those who have in need of it or have capital in deficit. that was the time which started the concepts and need of proper system of banks. So there must be a bank employee for the guidance of customers. Goldsmiths of that time started the exchange of money and gold and they acted as bank agents between the people.com 55 . The advertising of bank and bank’s products is not so much good and exposed to people. Training sessions of bank employees of all over the country are conducted by bank at Head Office Karachi which is very expensive for the bank to bear the accommodation and meal charges of the employees. Foreign branch network should be increased in order to capture profits from all over the world. Here are some of the suggestions which I recommend to the Bank Alfalah. In the past times the people used religious temples as a place for keeping their money. Incentives and award system should be introduced for the employees for their motivation. In this process banks earn profit or commission for connecting these people. Bank is somewhat slow in launching new products. Issue 1 _____________________________________________________________________________________ During my internship I found some of the faults and lack of some of the facilities in bank’s operations. The word “bank” originates from the Italian word “ banque or bancus” and no one is sure about its true origin. But uneducated and some of the educated customers do not know that which token should they get from the machine. So.Directory of Management e-Publications August (2011) Vol. this helps in relaxation of employees and will increase job satisfaction of employees which is in best interest of the bank. So bank should expand and establish some more training centers in other cities of the country in order to reduce these expenses. There should be a communication link between executives and top level management.
establishes a competitive advantage and enhances profitability. deliver quality services that contributes to brand strength. In Paksitan there are a number of commercial banks which are accepting deposits and advancing loans to customers with a lot of other facilities of providing financial services and products to customers like car financing. agricultural loans and a lot of other products. © HRMARS. Bank Alfalah is one of the most important. The existing state of bank shows that the bank management is skilled enough because they are providing innovative products to customers and are delivering quality services which has strengthened the brand name of the bank and are getting high profits which is shown by their mission statement. Issue 1 _____________________________________________________________________________________ bank of India” but that casted a loss to Pakistan in a sense that British Government distributed the 70% of reserves to India and Pakistan got just 30%. After this Quaid-e-Azam laid down the foundation of “The State Bank of Pakistan” in July 1st. manage customer experience. Bank Alfalah has aimed to provide the customers all those financial services which is better for them and to become the leading bank of Pakistan. 1948. 1992 and started its banking operations from November 1st . The mission of the bank is complement and to the services which the bank is providing to the customers. Pakistan www. So the bank is on its way to achieve its missions and objectives very enthusiastically and energetically in this age of high and tough business environment with the passage of time.com 56 . home loans. “To develop & deliver the most innovative products. But do not forget about the “Global Economic Crisis 2008” which affected all the banks including all the businesses. although it is very difficult and challenging goal but is realistic for achieving. It was incorporated on June 21st.1.hrmars. This is showing that it is one of the emerging and fast growing banks of Pakistan. thus providing value to the stakeholders of the bank”.1997. debit and credit cards. The mission of the bank is. In its 13 years of age it showed a remarkable performance and improvement with huge profits which is becoming high and high. emerging and profitable bank in Pakistan which is owned by the Abu Dahbi Group and is governed by His Highness Sheikh Nahayan Mabarak AlNayayan. It is very interesting to know that at the time of its inception there were only three branches of Bank Alfalah which faced a number of problems to start with and had no experience at that particular time of its working but now at this time of modern banking Bank Alfalah is operating through 321 branches including 60 Islamic Banking branches with seven foreign branches out of which five branches are in Bangladesh and two in Afghanistan and one offshore branch in Bahrain which is providing its financial services to customers.Directory of Management e-Publications August (2011) Vol. Bank is engaged in such activities which are helpful for the bank to be premier banking institution of the Pakistan.
. Alfalah credit card is globally accepted at all those locations which have the logo of VISA. no joning/ Annual / Renewal fee (except Platinum Card) . Afghanistan and Bahrain. Bank Alfalah has designed this facility to achieve the objectives like Providing reliable infrastructure for Agri customers. 57 © HRMARS. and money is handled by quality agents linked through computers who makes it sure that your money is safely transferred to the desired place and person. Bank is more committed towards achieving the standards which are set by the top management of BAL. and has an expansion plan for spreading its branches all over the globe.000 locations worldwide.Directory of Management e-Publications August (2011) Vol. The features which makes Alfalah Credit card as an important product for customers are. travel. and providing farmers an integrated package of credit. security and reliability to clients and their money. Alfalah debit or Hilal card which gives you the immediate and easy access to your current or saving account anywhere and anytime with a simple swap of your card at millions of ATM’S and retail shops. Bank Alfalah has designed “Rural Finance Programme” which is named as “Bank Alfalah Zarie Sahulat”This facility is available for short. medium and long term durations. meals and much more.1. safety. From the very beginning the BAL has focused on the concept of excellence and precision in providing financial services to customers. mini statement. Despite the fact of Global Finacial Crisis the performance of the bank is very appreciable and remarkable at the end of 2008 but we it affected its growth in 2009 because at the end of 2009 the financial performance was not like that of 2008. It enables you to pay for shopping. payment receipt confirmation.2 million ATM’s and 29 Million retail outlets around the world.electricity. and in Pakistan also. If you have this facility then there is no need of dealing in physical cash withdrawal. Pakistan www.hrmars. PTCL abd Warid bills payment through 24 hour Call Center and Auto Debit instructions. Issue 1 _____________________________________________________________________________________ Strategic planning continuously reviewed by the bank so their policies and planning remains relevant to the diverse business environment. supervision and technical know-how. just swipe your card and your transaction will be completed in no time. The management of BAL is working on the providing highest level of satisfaction. Bank Alfalah is providing the facility of Money gram which is the person to person transfer of money that allows consumers to receive money in just few moments. With the Visa Network Hilal card is acceptable at more than 1.com . etc. Sui Gas.Special offer on Warid post paid connections. value. And this is helpful for the bank for handling the difficult situations.SMS for card usage. helping farmers utilizing funds efficiently and effectively. cash withdrawal at all 1LINK ATMs . Money Gram is available in over 180 countries and territories and in more than 190. It is accepted at nearly 29 million locations in more than 200 countries around the world. In view of importance of agriculture for the Pakistan economy and keeping in view the small farmers who have little resources for production for them. The BAL has the products like. It has grown its branch network a lot not only at national level but also in Bangladesh. entertainment.
Clearing department perform the function of transfer of funds and a part of remittances department. capability. online banking and many more. Remittances department transfer funds from person to person. The accounts opening department have working of opening different accounts according to the need and will of the customer and to maintain them. The staff of BAL is very skilled. competitive. All the departments are working together with cooperation. The marketing staff © HRMARS. Foreign trade department deals in imports. experienced. money gram.hrmars. globalized and changing business environment marketing is very important for attracting targeted customers. business loans. cooperative and is in collaboration with stakeholders for better bank and customer relationship development by using the ethical business practices. Hilal cards. Similarly BAL has its own marketing department at Head Office Karachi as well as at branch levels which is responsible for making people aware of the products of the bank and creating demand for that. The staff members are also very satisfied and feel proud as a part of the BAL the fastest growing banks in Pakistan. BAL has developed the product portfolio according to the needs of the customers. letter of credits and letter of guarantees. For meeting these standards and business environment every bank has a marketing department now. Pakistan www. credit cards department and agri finance department.com 58 . skills and power for the required jobs. The product portfolio of BAL consists of agricultural loans. His verification along with two referrals is necessary for opening an account. remittances department. BAL’s products are meeting the diverse demands of customers. so it is not enough to develop products unless there exists a proper marketing plan for this. foreign trade department. exports. energetic and enthusiastic which is very friendly towards the customers which is in a sense a competitive edge for the BAL. Similarly the human resource department of the BAL is very skilled and experienced who is recruiting only those candidates who have the ability. accounts department. The departments of BAL includes accounts opening department. either to communicate with the account holder in any situation or which account has to close or not.1. The BAL’s culture is very strong.Directory of Management e-Publications August (2011) Vol. The members of the staff are very committed to their jobs and have developed the sense of ownership amongst the employees which is very helful for the motivation of the employees. Car financing department advances vehicle loans while credits department advances loans for businesses while agri finance department advances loans for agricultural purposes. As BAL has developed innovative products for their valued customers. car financing department. clearing department. Royal profit and Royal Pariot are the examples of the innovative products of the bank. Issue 1 _____________________________________________________________________________________ There are numerous departments in BAL which is performing their jobs according to the policies implanted by the top management. credits department. A number of documents are required for opening an account with two authenticated referrals which introduced the customer. As in today’s age of diverse. home loans.A customer has to sing a “relationship contract” which includes the complete detail of the customer who is willing to open an account in BAL. Bank Alfalah deals in five types of the currencies and a person can open his account only in those currencies. After analysis and careful examination.
Man power or human resource is a very important part for any organization whether it is banking organization. Although the head office of Human Resource Management of Bank Alfalah is in Karachi but every branch is managing its employees on its own with the philosophy of controlling every subordinate by his supervisor because these supervisors are working according to the policies directed by the Head Office. The employees of Bank Alfalah is well equipped with skills. innovative thinking and full dedication to satisfy and retain the clients of the Bank and keep the Bank on front row.com 59 . Just swap your card through merchant machine and have complete your transaction. education organization or any production company. Issue 1 _____________________________________________________________________________________ personally meets customers and if required make calls to customers and solve their problems and queries and tell them about bank’s products and their benefits as compare to the other banks. Pakistan www. And bank is acting as a technological leader in the market because it is engaged in adopting new technologies and implementing them in business to meet the challenges of the diverse business environment. The products which are launched by Islamic banking of Bank Alfalah are according to the “SHARIA”. Online banking of Bank Alfalah is meeting the demand and needs of the customers all over the branch setups and availability.hrmars. Bank Alfalah also deals in Islamic banking. In this concern the management of Bank Afalah is well known for their hard work. knowledge and vast experience of financial world which is required to keep the Bank on the way of modern banking with the objective of gaining high profits. In today’s age of modern banking and business environment no one can deny the importance of technology and it is almost impossible to control the banking operations without modern technology thats why Bank Alfalah gave much importance to the use of technology in their banking operations. merchant machines are available and there is now no need to go bank and have withdraw your money through cheque and then make payment to a shopkeeper or a business trader.1. Funds are automatically transferd to the shopkeeper’s or business trader’s account through online facility. No one can © HRMARS. As it’s a universal fact that the success of any organization lies in the hands of their human resource or the employees working for that organization and the human resource is the most valuable asset of any organization.Directory of Management e-Publications August (2011) Vol. ATM’s are available. By using online facility you can transfer your money to other cities and countries in no time. In this way they are cooperating with one another and are achieving the goals and standards of the Bank set by the top management. who can perform well best for the Bank with little external and in-house training to increase the efficiency and productivity of the human resource. There is no need to have physical cash in your pocket. Bank Alfalah’s Islamic banking policies are made according to the “SHARIA”. Its branches are located at many cities of Pakistan. The core ideology of Bank Alfalah in respect of their human resource selection is to hire multi talented and dedicated professionals.
about competitors and many more. “To be the premier organization operating locally & internationality that provides the complete range of financial services to all segments under one roof”. skilled . Top management formulates the strategies in accordance with the standards formulate to achieve the desired goals and objectives. business and departmental level strategies which helps the bank perform well. They define and interpret the objectives and goals and formulate policies to achieve them Department strategies are formulated at the department level and are formulated by the Head of the Department. but to meet the changing needs and requirements of the business environment the training of human resource is very important and essential. Bank Alfalah is the fastest growing and expanding bank in Pakistan. The bank’s primary and foremost priority is to find and support clients’ financial needs. Pakistan www. Human resource department hires 30 fresh post graduates as MTO’s (management training officers) who train staff of the bank. who controls such important functions as determining goals and objectives. It is establishing its branches all over the Pakistan not just in urban areas but also near some rural areas so that every person can have access to the bank. As mentioned earlier that human resource power of the Bank Alfalah is very skilled and experience as its human resource department.. Top management formulates the business level strategies. they are going towards professional development.hrmars. highly qualified and professional management at all levels. Simelarly bank is aimed to expand at international level to serve the customers as its vision statement shows. At the corporate/top level there is board of directors and executive committee. Corporate philosophy stresses the highest level of security. Chief Managers are also the part of this management level who formulates the strategies and technical planning which determines the methods of getting the best and in time completion of jobs from its human resource. For implementation of these policies meeting are called with the presence of Head of the Departments to get the best and efficient and desired goals behind these formulated policies. As with the passage of time and it is fact that the external business environment is very dynamic in nature so these strategies keep on changing to keep the Bank up to date. new ways of working and dealing customers. © HRMARS.Directory of Management e-Publications August (2011) Vol. advanced banking solutions and information technology.1. To meet these requirements the bank has a training department at Head Office which arranges seminars and workshops at time to times and train existing staff members about the new business dealing behaviors.com 60 . For this purpose bank adopted corporate. Each and every branch manager formulates the policies according to the branch setup and at each level of bank environment because he is directly responsible for the management and controlling the activities of the employees. formulations of business policies and strategic planning. reliability and value for its client’s money which is the core strength of the bank. At Bank Alfalah all is ensured through constant restraining regimes. Issue 1 _____________________________________________________________________________________ underestimate the importance of human resource. Bank Alfalah is successfully completing its journey towards progress with the help of its specialized.
Bank has great strengths which its competitors do not have as it has a vaery attractive brand name with a slogan of “The Caring Bank” which is somewhat emotional touchy for the persons who seeks for care. The success of every business depends upon the good clientele.Directory of Management e-Publications August (2011) Vol. The HR of the bank are very trained. The bank has developed a system for internal control and monitoring for measuring risks which can be arise from the consumer banking and developed automated. The workforce of the bank is very young and energetic and working is being © HRMARS. Bank ALfalah’s culture is service excellence oriented. even then the performance of the bank over the years remained very good and progressing. and each service is developed for the satisfaction and fulfillment of the customer needs as best as possible. Bank Alfalah is aimed at maintaining quality banking. Despite the fact that the economic condition n of the country as well as of the world is not favorable. Pakistan www. strong. The key mission is the emphasis on innovation and quality both in products and services as well as the quality of human resource.com 61 . Bank Alfalah is very good at its policy of selecting clients which will retain for a long time and will provide profits to the bank. specifically tailored to suit discerning needs and preferences of highly valued customers. The bank checks all the particular and required things and references about the clients before final selection.hrmars. electronic and computerized environment to control this. And this is the result of the highly prioritized product portfolio. Like car financing and debit and credits cards. Issue 1 _____________________________________________________________________________________ For the satisfaction of the valued customers and the shareholders the management of bank implemented some of the new and modern ways of doing work and policies which aimed at consolidated the bank’s financial position and creating a very big. profit performance and reliable customer service and these things will make it a responsible corporate citizen. The marketing department of the bank works on the philosophy that the customer is the central focus of the bank’s business because without customer there is no existence of tha bank. consisten and diversified business base. Bank confirms and verifies all the provided detail and referrals before final selection of the client and having a relationship with the customer. professional and skilled which is contributing towards the profits of the bank and bank in this way going towards attaining continuous profits.1. Bank is working on the enrichment and development of the quality services which will distinguish it from other banks and provides it a competitive advantage by developing new areas of activities. This bank’s policy helps and protects the integrity of the bank and a long term relationship with the customer. Products are launched by placing the customer at the centre of the business. Bank Alfalah has made a remarkable progress in the areas of consumer banking as a niche area for the bank and earned a lot of profit from it. At this time bank has maintained its positions as a quality financial institution.
bad economic conditions and political condition of the bank. Because bank is using the continuous process of assessing the needs and preferences of the customers which is very helpful in making new products and for providing the desired services to the customers. Issue 1 _____________________________________________________________________________________ done on standard basis.1.Directory of Management e-Publications August (2011) Vol.hrmars. Bank Alfalah has all the capabilities for coping with the changing business environment. The graph of the bank’s performance is going in upward position which is a very good sign for the bank. © HRMARS. Pkiatan government is supporting the bank because it is the foreign investment bank which is acting as FDI for Pakistan. terrorism and changing government policies affecting the performance of the bank very badly. As in the portion of financial analysis I have calculated a number of financial ratios for BAL for past five years which are clearly showing that the performance of the bank is very good with little variations in the profit but realistically the growth has fallen in 2009 because of the affects of Global Financial Crisis of 2008 which affected not only the performance of BAL but also of the other businesses as well. In 2009 the bank was able to attained 2nd position in respect of the size of the balance sheet. Last but not the least.com 62 . Similarly the economic and political condition of the Pakistan is not very good for the bank because changing political situations. In that year bank maintained the capital adequacy ratio of over 13 %. If the bank will keep on moving on its way like this with the help of their unique business policies then the time is near when The Bank Alfalah The Caring Bank will be at the top of all the banks. It was possible for the bank because the bank has given a lot of importance and attention to its customers and made the product portfolio according to the needs and wants of the customers. Pakistan www.
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