The last two years have witnessed a gradual and noticeable improvement in the economy. The upsurge in inward remittances, proactive policy initiatives on country debt reduction, implementation of IMF program and negligible trade gap have led to a progressive strengthening of the external account. These factors have led to a healthy buildup of reserves and improved the investment outlook of Pakistan. At the domestic level from the financial industry’s perspective, the emphasis on monetary policy initiated in 2001 to reflate the economy continued resulting in surplus liquidity in the banking sector and further lowering of interest rates. Despite the foregoing positive catalysts to re-invigorate the economy, the real sector continues to be plagued with subdued economic activity and an increase in unemployment levels. There are multiple causative factors for the current situation as far as the real sector is concerned. The large scale-manufacturing sector suffers from excess supply as a result of heavy investments in the nineties. Discernable investment in recent times has been in selective areas primarily oil and gas and textile exporting units. Domestic investment by small and medium industries seems to be hostage to investor anxiety perhaps stemming from geo-political and domestic political risk. Fiscal measures to compliment the expansionist monetary policy need to be crystallized and implemented to re-spark economic growth. The development of appropriate fiscal measures, coupled with social and development spending program of GOP and sustenance of good governance by the new government will be important for the future economic revival. Emanating from the operating environment and the monetary policy, the banking system continues to reflect hefty investments in Treasury bills etc well in excess of the SLR requirements. In response there is a marked change in the efforts of the financial fraternity to explore new avenues to lend; consumer financing seems to be the flavor of the day. Factors like skill, technology to originate and manage consumer loans in a cost effective manner, development of a borrowing culture in individuals and evolving cost-effective legal and collection framework and lastly job creation in the economy are needed for volumetric growth in consumer financing. The impact of this on advances will however, be felt in the 1

longer term and in the interim low margins from the existing borrowing segments will continue to pressure banks profitability.

The word “bank” is derived from “Bancus” or “Banque”. History of banking is traced to 2000 B.C in Greece. Priest and Goldsmiths acted as financial agents by keeping money and valuables of people in temples in strong safes. Thus, the first stage in the development of modern banking was accepting of deposits of cash from those who had surplus money with them. The Goldsmiths issued receipts for the money deposited with them, which began to pass from hand to hand in settlement of transaction as people had confidence in the integrity and solvency of goldsmiths. The receipts were drawn on a way that it entitled the holder to claim that specified amount of money from goldsmiths. These receipts were the earlier bank notes. Thus the second stage in the development of banking was the issues of bank notes. The goldsmiths discovered all the people who had deposited money did not come to withdraw their finds in cash, only a few people presented the receipts for encashment during a given period of time and they also found that most of the money deposited with them was lying idle. They also found they were being constantly requested for loan on good security. They thus thought it profitable to lend at least some of the money with them to needy persons. This proved profitable for them. Instead of charging interest from deposits, they began to give them interest on money deposited with them. This was the third stage in the development of banking. Through experience, banks came to know that they could keep a small proportion of total deposits for meeting demands of customers for cash and could easily lend the rest. They allowed deposits to draw over and above than the money standing to their credit. They thus allowed the overdraft facility to their deposits and this was the fourth stage in the development of banking. Every bank issued receipts and most allowed


overdraft facility and this caused too much confusion the systems. In order to earn profits, banks did not keep adequate reserves to meet demands of customers for cash. This failure on the part of bankers to return money caused widespread distress among people.

In order to create confidence among the people, steps were taken to regulate the banking. A conference was held in Nuremberg in 1548 where it was decided that a bank should be set up by the state, which would streamline the banking organization and technique. The first central bank was thus formed in Geneva in 1694. The responsibility of issuing notes is now entrusted to a central bank in each country. With passage of time, activities of commercial bank increased. They dealt with large number of issues such as obtaining funds, advancing loans to business, farmers, households, making investment in stocks, discounting bills of exchange etc. commercial banks are now multi-service organizations and play a very important role in financial markets.



The history of banking system in Pakistan dates back to independence of Pakistan in August 1947 when various banks transferred their Head Quarters and funds to areas likely to fall in India. This trend emerged due to dominant role of Hindus in pre-partitioned Indian banking system. According to various books there were 3496 branches of Indian scheduled banks in the undivided sub-continent as on 1st March 1947 out of which only 487 branches were located in areas presently constituting Pakistan. However the number of scheduled banks drastically declined to 195 from 487 immediately after partition. At the time of partition there were only two banks having the honor to be first commercial bank of Pakistan namely Habib Bank Ltd., which was set up in 1941 with its Head Office in India and the Australasia Bank Ltd., which was established in 1944 with its Head Office in Pakistan. By following the partition, an expert committee was set up and this committee recommended that the Reserve Bank of India being the Central Bank of the undivided India should continue to function as Central Bank of Pakistan and the Indian currency notes would continue to be legal tender in Pakistan till 30th September 1948. Subsequently it was decided to have separate Central Banks and the State Bank of Pakistan was set up and started functioning from 1st July 1948. Thus the history of Banking system in Pakistan started with the establishment of the State Bank of Pakistan which was inaugurated by Quaid-e-Azam Mohammad Ali Jinah on 1st July, 1948. Consequently three banks were established which include Muslim Commercial Bank Ltd. formed in September 1948. Bank of Bhawalpur in October 1948 and National Bank of Pakistan in 1949. Habib Bank also transferred its Head Office from Bombay to Karachi due to partition in August 1947 and it was assisted by the State Bank to finance domestic trade of the country.



Bank Alfalah Limited was incorporated in 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 45 branches in 21 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. This facilitates their commitment to a culture of innovation and seeks out synergies with clients and service providers to ensure uninterrupted services to its customers. The bank perceived the requirements and of customers and matches solutions.

them with quality products service During the past five years, bank has emerged as one of the foremost financial institution in the region endeavoring to meet the needs of tomorrow as well as today. To continually


upgrade the quality of service to the customers, training of team members in all the integral aspects of banking, customer service and IT was specially focused. The portfolio concentrates on all aspects of conventional banking as well as the financial needs of corporate sector. Dynamic and high value product includes Car Financing, Home Financing, Rupee Travellers Cheques, Credits Cards, Debit Cards, On line Banking, ATM and consumer Durables. In addition to this, Islamic Banking Division is a recent initiative, which operates as separate branch. It offers Shariah Compliant products through a network of five branches, which will increase to 50 by the year 2007. The bank is committed to combine all it s energies and resources to bring high value, security and satisfaction to its customers, employees and shareholder. The Bank has invested in revolutionary technology to have an extensive range of products and services. This facilitates commitment to a culture of innovation and seeks out synergies with client and service providers to ensure uninterrupted services to it customers.



“To be the premier organizations operating locally and internationally that provided the complete range of financial services to all segments under one roof”


“To develop and deliver the most innovative products, manage customers experience, deliver quality service that contributes to brand strength, establishes a competitive advantage and enhances profitability, thus providing value to the stakeholders of the bank



H.E. Sheikh Hamdan Bin Mubarak Al Nahayan Chairman

Mr. Mohammad Saleem Akhtar Chief Executive Officer

Mr. Abdulla Nasser Hawalileel Al-Mansoori

Mr. Abdulla Khalil Al Mutawa

Mr. Ikram Ul-Majeed Sehgal

Mr.Khalid Mana Saeed Al Otaiba

Mr. Nadeem Iqbal Sheikh


Chief Executive Officer Executive Incharge Strategic Planning & Global Marketing Executive Incharge Human Resources Division Executive Incharge Credit Division Executive Incharge Establishment & Administratration Executive Incharge Business Development Division S.A.M./ Car Finance/ Leasing Executive Incharge Audit & Inspection Division Executive Incharge Corporate Banking, SME Financing & Home Loans Executive Incharge New Products & Service Quality Division Executive Incharge International &Treasury Division Executive Incharge IT Division Executive Incharge System & Operation Division. Executive Incharge Credit Monitoring Division Executive Incharge Legal Affairs Division. Executive Incharge Finance Division Executive Incharge Islamic Banking Division Executive Incharge Cards Division




The detail of Bank Alfalah Network in over Pakistan is as under: Sr. No. Branch KARACHI 1. Main Branch 111-777-786 Phone Number

B.A. Building, I.I Chundrigar Road, Karachi 021-2414030-9 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. Clifton Branch, Karachi Korangi Industrial Area Branch, Karachi Muhammad Ali Jinnah Branch, Karachi Sharah-e-Faisal Branch, Karachi Defence Branch, Karachi Gulshan-e-Iqbal, Karach Cloth Market Brach, Karachi Jodiah Bazar Branch, Karachi North Karachi Branch, Karachi KESC Branch, Karachi Paper Market Branch, Karachi North Napier Road, Branch, Karachi S.I.T.E Branch, Karachi PECHS Branch, Karachi Timber Market Branch, Karachi Bahadurabad Branch, Karachi LAHORE 18. 19. LDA Plaza Branch, Lahore Defence Branch, Lahore 042-6306201-10 042-5729772-6 021-583778-2 021-5065701-2 021-7750627-30 021-4313536-8 021-5374330-5 021-4984937 021-2401621-26 021-7532482-84 021-698760 021-2417515-9 021-2211353-8 021-7540067-68 021-2582114-16 021-4535861-2 021-7750635-9 021-4128578-81


Sr. No. 20. 21.

Branch Township Branch, Lahore Gulberg Branch, Lahore

Phone Number 042-5114722-23 042-5877800-8 042-5757791-2

22. 23. 24. 25. 26. 27.

Circular Road Branch, Lahore Badami Bagh Branch, Lahore Allama Iqbal Brach, Lahore Shah Alam Branch, Lahore Shadman Branch, Lahore Mall Road, Brnach, Lahore RAWALPINDI

042-7638256-8 042-7708291-5 042-5432961-3 042-7673401-6 042-7538116-8 042-7350033-35


Main Branch, The Mall, Rwp.

051-5582288 051-566084-6


Satellite Town, Branch, Rwp ISLAMABAD



Blue Area Branch, Islamabad

051-2275286 051-2270193 051-206986-7

Branches in Other Cities 31. 32. 33. 34. 35. 36. Liaqat Road Branch, Sargodha Sarwar Road Branch, Sahiwal College Road Branch, D.I Khan Saidu Sharif Road Branch, Mangora Saddar Branch, Hyderabad Islamia Road Branch, Peshawar 0451-724138-9 0931-73631-2 0961-711730-3 0936-726745-6 0221-786020-2 091-287051-5


Sr. No. 37. 38. 39. 40. 41. 42. 43. 44. 45. 46. 47. 48. 49. 50. 51.

Branch Cantt Branch, Peshawar Hospital Road, Nawabshah Liaquat Bazar, DG Khan Circular Road, Gujrat Bank Road Branch, Mardan The Mall Branch, Wah Cantt. Circular Road Branch, Bahulpur Cantt. Branch Jhelum Abdali Road Branch, Multan Paris Road, Branch, Sialkot Liaquat Road Branch, Faisalabad G.T Road Branch, Gujranwala Frefre Road Branch, Sukkur Shahi Road Branch, Rahim Yar Khan M.A Jinnah Road Branch, Quetta

Phone Number 091-287051-5 0214-62127-9 0641-468201-4 0433-530219 0931-73631-2 0596-539426-8 0621-889922-5 0541-610022 061-546792-6 0342-591741-43-44 041-617436-39 0431-255556-16 071-28173-75 0731-84771-73-79 081-827567

ISLAMIC BANKING BRANCH NETWORK 1. Islamic Banking Main Branch 66, Main Boulevard, Gulberg, Lahore 2. Islamic Banking Y-Block Branch 93-Y, Phase-3-C, DHA, Lahore Cantt 3. Islamic Banking Katchery Branch Kutchyery Bazar, Faisalabad 4. Islamic Banking Jinnah Avenue Branch REDCO Plaza, 8-E, Blue Area, Islamabad 051-2879589 041-603021-25 042-5746191-95 042-5715241-5


Sr. No. 5.

Branch Islamic Banking Uni Tower Branch UNI Tower, I.I Chundriger Road, Karachi

Phone Number 021-2472001


Islamic Banking McLeod Road, Branch Plot No. 13, McLeod Road, Lahore



Islamic Banking Faisal Arcade, Branch G.T Road, Gujranwala



Islamic Banking Murree Road Branch Near Ministry of Defence



Senior Executive Vice President

Executive Vice President

Senior Vice President

Vice President

Assistant Vice President

Officers Grade I, II, III


Clerical Staff

Non-Clerical Staff


Typist Clerks & Assistants





Goals and objectives are factors through which the company’s devotion and commitment to the job can be seen. If the goals are realistic and achievable, than surely that organization is doing it’s job. Bank Alfalah also has certain goals and objectives which it is trying to achieve, through it’s various strategies and operations. The goals and objectives are mentioned below: 1. To create a sound base, and through efficient systems achieve modern banking through out Pakistan. 2. By the end of every accounting year there is an increase in deposits. As the deposit rate of during 2002 was approx 52 Million and the same has been increased in 2003 by 77 Million. 3. To create unit banking network in all the branches of Bank Alfalah, the end of the year. This means that all the operations of the bank, i.e. deposits to advances, imports, exports, L/C Opening, foreign currency and many more aspects under one roof, so that the customer can be facilitate in one visit. 4. Islamic Banking is one of the goals of Bank Alfalah though it has been initiated in the last fiscal year and it is very acceptable for general public. However, there is lot of work to do for successful implementation of the Islamic Banking Plan. In this regard the Bank is opening specific Islamic Banking Branch under the supervision of its Islamic Banking Division.



Bank Alfalah has formulated certain sets of strategies to enable it to achieve its goals and objectives. These strategies are mentioned below: 1. In order to achieve it’s goals of creating a sound base and presence of efficient

modern banking system, Bank Alfalah has started operation of Automated Teller Machines in all the major areas like Karachi, Lahore, Islamabad and other cities of Pakistan. 2. Bank Alfalah is committed to building long-lasting relationships through an

assertion to service excellence and providing innovative products to meet the changing needs of our valued customers. Although still in its infancy, compared to the exalted banking standards, Bank Alfalah, backed by a strong Abu Dhabi Group and inspired by the vision of its Board and Management, has built up a strong customer base. The Bank provides a full range of banking services to corporate clients, while applying leading technologies. Today the Bank is well-positioned to provide appropriate banking services to customers. 3. The main focus is building relationships and being known by the way they do

business. Management recognizes that a banking relationship requires compatibility, communication, and cooperation and that each customer deserves nothing less than full attention and available resources to meet their financial objectives. 4. Core value and corporate culture is based on the belief that superior personalized

service is the most important product. Bank is in the process of getting to know customers by name and understand their business and personal financial needs. This one-


on-one, personalized service quality has served as Bank Alfalah's unique signature since inception and continues to separate it from other financial institutions. 5. The Bank Alfalah team comprises of some of the most highly skilled and

professional financial experts in banking industry. Managers, lenders and trust advisors offer the unique perspective of knowing and understanding in the local economy. The Management focuses its attention on making informed and feasible economic decisions, bringing better returns and more profitability for investors and customers. 6. Keeping in view the unrest among the Islamic Community on the Interest Bearing

Banking the Alfalah is in the process of target marketing and gives its full attention to this segment of a large population over the world. 7. To acquire the reputation and status of bank which operates on international

standard, Alfalah Bank was to get the credit rating of Pakistan Credit Rating Agency, which gave it the AA- and A1+ in the long term and short term respectively.



Bank Alfalah is a scheduled commercial bank and is principally engaged in the business of bak as defined in the Banking Companies Ordinance, 1962.

Basis of Presentation In accordance with the directive of the Federal Government regarding the shifting of the Banking system to Islamic modes, the State Bank of Pakistan has issued various circulars from time to time. On permissible form of trade related mode of financing comprises of purchase of goods by the banks from their customers and resale to them at appropriate mark-up in price on deferred payments basis. The purchase and slaes arising under these arrangements are not reflected in these accounts as such but are restricted to the amount of facilities actually utilized and the appropriate portion of mark-up thereon.

Accounting Conversion These accounts have been prepared using the historical cost convention in conformity wit the accepted practice of banking institution in Pakistan.

Fixed Assets Owned: Fixed assets are stated at cost less accumulated depreciation. Depreciation

is computed over the estimated useful lives of the related assets at varying rates and methods depending on the nature of the assets.

The cost of the assets is depreciated on the diminishing balance method, except for vehicles, carpets and renovation costs of leased premises, which are depreciated on a


straight-line basis. Depreciation is charged for the full month on purchase/acquisition of assets while no depreciation is charged in the month of disposal of an assets. Maintenance and normal repairs are charged to income as and when incurred. Major renewal and improvements are capitalized. Gains and losses on disposal of fixed assets are taken to the profit and loss account. Leased: Assets held under finance lease are accounted or by recording the assets

and the related liabilities at the amounts determined on the basis of lower of fair value of the assets and present value of minimum lease payments. Finance charge is allocated to accounting periods in a manner so as to provide a constant periodic rate of charge on the outstanding liability. Depreciation is charged on leased assets on the basis similar to that of owned assets. Investment Investments are stated at cost, net off provisions made for diminution in value. Profits and losses on sale of investment are dealt with through the profit and loss account in the year in which they arise. Advances Advances are stated net off provisions for bad and doubtful debts. Specific and general provisions for bad and doubtful debts are determined by the management kepping in view the requirements of the Prudential Regulations issued by the State Bank of Pakistan. Foreign Currencies Assets and liabilities in foreign currencies have been translated into Pak Rupees at the rates of exchange approximating those ruling at the Balance Sheet date except those covered by forward exchange contracts which are converted at contracted rates. Exchange gains and losses are included in income currently. Taxation Provision for tax is based on applicable rates of tax after taking into account tax credit available, if any.


The Bank accounts for deferred tax, if any, taking into account major timing differences, using the liability method. However, deferred tax is not provided it can be established with reasonable probability that the timing differences will not reverse in the foreseeable future.

Revenue Recognition Income is recognized on accrual basis.


COMPREHENSIVE AND DIVERSIFIED PRODUCT PORTFOLIO With the mission to provide all-encompassing banking services to the customers, Bank Alfalah has a uniquely defined menu of financial products. Currently it is one of the most comprehensive portfolios of personalized financial solutions that are customtailored to serve the requirements not only of conventional customers but also fulfill the needs of the corporate sector:  Car Financing  Rupee Travellers Cheques  Online Banking  Credit Cards  ATMs  Home Financing  Islamic Banking  Corporate and Structured Financing

Car Financing Car Financing is one of the major renowned product of Bank Alfalah and can be utilized in terms of Financing of Used Vehicles, Loan against Car, Balance Transfer Facility, Refinancing Facility (only for Alfalah Customers) and it is characterized in terms of:  Lowest Mark up  Lower Insurance  Quick Processing  Lower Down Payment 24

Home Financing Major features of Bank Alfalh Home Financing are Lowest Mark-up, Quick Processing, Multiple Repayment Options and Free Valuation. It has been bifurcated in terms of “Home Buyer, Home Construct, Home Improver, Home Balance Transfer Facility”.  Financing Limit  Tenure : : upto Rs. 10,000,000/upto 20Years 30% Borrower / 70% Bank

 Equity Participation :

Rupee Travelers Cheques Rupee Travelers Cheques are as good as cash and are accepted at the major shops, travel agents, hotels business establishments and all over the country and abroad. This service is being offered to facilitate instant fund availability to travelers and business people who used to carry a large sum of money with them.

Credits Cards Bank Alfalah Visa Card is everywhere and globally acce pted and welcomed at locations displaying the VISA logo. It is accepted at nearly 30 million merchants and 870,000 ATMs in more than 150 countries around the globe and over 10,000 establishments in Pakistan. Alfalah VISA pays for shopping, travel, entertainment, meals and much more.

Debit Cards 25

Bank Alfalah Limited presents Alfalah HilalCard, the first Visa Electron International Debit Card which gives an unlimited access to current / savings account with a simple swipe, at millions of retail shops and ATMs, worldwide. The Alfalah Hilal Card comes with a host of conveniences and benefits combined with the wide reach of Visa Network enabling it to be accepted at more than 840,000 ATMs and 13 million retail outlets around the world, making it the most acceptable Debit Card available in Pakistan.

On Line Banking To provide enhanced and value added products to customer bank is constantly striving for additional facilities. Bank provide fully automated on-line telephone banking facilities to its customers enabling them to carry out banking transactions like balance inquiries, statement requests, product information and exchange rate.

Automated Teller Machine (ATM) The bank offers 24 hours self service banking facilities to it customers on country wide basis through deployment of Automated Teller Machine. This system allows the banking facilities such as cash withdrawls, cash deposits, funds transfer, balance inquiries, account statements. Electronic cash dispensing facilities are available in major cities of Pakistan. All ATMs are linked through a state-of-the-art Satellite Based Communication System which offers 24 hours real time service. Islamic Banking A separate division is a recently initiated, which operates as separate branch. It offers Shariah Compliant products through a network of five branches, which will


increase to 50 by the year 2007. Islamic Banking has launched following products with the perception that these are in accordance with the Sharia Principles. a. b. c. Alfalah Masharaka Homes Murabaha Finance Aflalah Car Ijarah

Corporate and Structured Financing The portfolio concentrates on all aspects of conventional banking as well as the financial needs of corporate sector including dynamic and high value product.  Loaning against securities  Letter of Credit  Letter of Guarantee  Demand Finance  Cash Finance





LOW Islamic Banking ATM Debit Card

Car Financing Home Financing Online Banking


Deposits Investments Credit Cards

Rupee Travelers Cheques


Any environment which interacts with the functions and operations of a company, should be properly studied and evaluated so that the environment only benefits the company rather than affecting it negatively. Like other institutions, Bank Alfalah also has an environmental effect on its functions. Basically two types of environment effect the bank operations, policies and strategies.

Micro Environment Microenvironment is in fact the internal environment, which ahs an effect on the functions of the bank. Micro environment of Bank of Alflah consiss of:

1. 2. 3.

Deposits Advances Competitors


Deposits Depositors are the main source of profit generation for

the bank. Alflah offers depositors number of incentive by virtue of which they too care make same money. Alflah relies on depositors & workers to increase their volume every year. This is evident from the fact that the growth rate increased 48.40% during 2002-03, as this growth rate is satisfactory it is a must that this environment of deposit growth should not decline.




Advances are basically what Alflah give to people asking for money. If there shall be more people depositing money. There will be more asking for advances as well. Banks tend to make profit by giving advances at a rate higher than what they owe to the depositors. The difference is the banks profit. If the environment is healthy then more & more people will be asking for advances for business and other options. It is also evident from the fact that during the year 2002-03 the advances growth rate is 71.12%.


Competitors Competitors should always be studied with great care, because competitors, can

greatly influence an organization position. Bank Alfalah has a lot of competitors because in a short span of 5 year it has achieved what not many banks had achieved. This leads to competitions. Similarly Bank Alfalah should keep a tag on the competitors move or any other new technology it is introducing, because to sustain in the micro environment, a competitor has to be viewed with a lot of care.

Macro Environment Every organization is subject to general trends prevailing in the environment. For the success of the organization these trends are of significant importance and must be thoroughly studies. Bank Alfalah faces the following factors in connection with its macro environment: 1. 2. 3. 4. 5. Demographic Sector Economic Sector Technological Sector Social Sector Political Sector



Human Resource Planning At Bank Alfalah Limited, Human Resource Planning involves a decision making in three areas of combined activites: Step-I The bank identifies its organizational needs and then acquires a right king of human resource accordingly. Step-II Bank motivates them to achieve excellent performance by giving them different sorts of targets according to their job requirements. Step-III It also creates an interactive link between the employee goals and the organizational goals. Job Description It is descriptive in nature and constitutes a record of existing and additional job facts. The order of job description is as follows: • • • • Job identification Job summary Duties performed Supervision given and received

Recruitment and Selection Bank Alfalah Limited recruits three kinds of employees: 1. 2. 3. Top Level Management Trainee Officers Contractual Basis Employees 31

Training and Development In Bank Alfalah Ltd. the process of Training and Development consists of various other activities like: a. Training: i. The appraisal form of an employee indicates the areas in which the employee should be trained and developed. It also elaborates the abilities of an employee. ii. Management and Organization Development Division of each region timely reviews the employees and recommends them for training during the operations it they note any discrepancy between the desired and actual performance. This review is performed after every quarter. iii. Upon the request of GM (Operation), indicates which sort of training is needed in a particular region regarding the Operation Support and Service b. Development: i. ii. Management Skill Training, Special Training for Foreign Transferred Employees,

Performance Appraisal: It is a structured discussion between employee and supervisor. It provides an opportunity for the supervisor to recognize an employee’s achievement, offer suggestions for improvement when needed, discuss job responsibilities, define objectives, counsel for career advancement, and justify a pay adjustment. Regarding the performance appraisal, bank adopts both type of approaches.



Traditional Approach: The traditional approach is primarily concerned with the overall organization and its past performance. In Bank Alfalah, overall performance is reviews at branch level. Each branch is liable to show its performance in a positive direction according to set goals.


Development Approach: This approach viewed the employees as individuals and has been forward looking through the use of goal setting. All the employees in the each of the branches are given a performa. Every employee working in the bank is assigned targets, usually their target are in the form of amount. The performances of all the branches are reviewed in the end of December. Till yet Bank Alfalah, has no computerized system to assess the performance of employees

Performance Appraisal Process: The performance appraisal process in the Bank Alfalah Ltd. consists of four interrelated steps: i. Establish a common understanding between the manager (evaluator) and employee (evaluate) regarding work expectations, mainly the work to be accomplished and how those work are to be evaluated. ii. Establish ongoing assessment of performance and the progress against work expectation. iii. Formal documentation of performance through the completion of a performance and development appraisal form appropriate to the job family.



The formal performance and development appraisal discussion, based on the completed appraisal form and ending in the construction of a development plan.

Reward Management Reward Management elaborates how people are rewarded in accordance with their value to an organization. It is concerned with both financial and non-financial rewards. A reward system of an organization consist of integrated policies, processes and practices for rewarding its employees in accordance with contribution, skill and competence and their market worth. In Bank Alfalah the elements of reward management system are consists of Basic Pay; the fixed salary or wage which constitutes the rates for the job. This rate is varied in a skill based or competence based system according to the individual’s skill or competence. The rates are fixed by managerial judgement of what is required to recruit and retain the employee. In Bank Alfalah there is no any concept of individual performance related pay except to the Business Development Officer. Business Development Officers are those who are hired at contractual basis. They are assigned different targets. If they exceed to the targets they can enjoy the individual performance related pay otherwise they are fied. There is no concept of bonuses, commission or over time related pay. The official timing of bank is 09.00 AM to 06.00 PM but almost all of the employees have to work till near 08.00 PM. However, for this additional work they are not getting any additional bonuses / over time.




STRENGTHS Since, inception of Bank Alfalah, it has moved rapidly in expanding branch network and deposit base, along with making profitable advances and increasing the range of products and services bank have made a break-through in providing premier services at an affordable cost to our customers. Bank Alfalah has been awarded an AA- (double A minus) and an A1+ (A one plus) in the long and short term respectively by the PACRA. These rating denote very high credit quality and very low expectation of credit risk.

The main source of a financial institution is public savings in this regard public confidence plays a vital role. So, the confidence of customers are the main strength of Bank Alfalah. In order to maintain an effective communication of information regarding the need of valued clients bank has designed its website to be as user-friendly as possible. This facilitates to pursue the path of excellence and customer satisfaction through delivering higher quality of services, thereby adding synergy to our existing management expertise, financial strength and profitability. Hence, it’s a channel of communication for the delivery of quality products and services that enhance value to our stakeholders. WEAKNESSES As per Bank policy, advertising and publicity is not extensively emphasized. Through advertisement customers could be kept abreast with the products and services. The main focus of Bank is major cities of Pakistan. It is direly needed to extend its network and people should be educated about the functioning of bank. Since, Bank Alfalah has strong set up in UAE and Middle East, therefore, specifically those areas of


Pakistan should be targeted where large number of people are working abroad. Hence, bank could avail an excellent deposit rate by using its annual budget specified for network extension.

OPPORTUNITIES The life cycle of an organization is comprised of threats as well as opportunities. If we say, today the rates of challenges are too high but simultaneously the rate of opportunities is also high. It is mandatory to try to make progress with consistency as well as to adapt changes with the needs of time, in order to cope up with both conditions. In the prevailing scenario, Bank Alfalah could penetrate further and could capture various corporate customers in addition to the retail customers by expanding their network. In addition to the excellent routine banking, it has earned a good name by offering special products like car financing, home financing and credit card. So, the penetration of these products could enhance the market share. In the rapidly growing industry of Pakistan, launching of another SBU, Alwarid Mobile will be an excellent addition towards the credibility as well as enhancement of Bank Alfalah’s market share. Bank Alfalah has launched another division known as Islamic Banking. This new aspect will also attract a large number of people, who don’t want to deal with interest bearing banking. Hence, it’s a new opportunity where competitors are limited.

THREATS While doing business, threats are part of the game. Especially, in this era, most of the financial institutions are working as Private Limited Company and facing or have a fear of threat from their competitor as well as new entrants.


In order to maintain as well as to enhance the market share, banks always try to introduce new schemes / packages. Hence, the environment is very much innovative and adaptive to the needs of customers. Though Bank Alfalah has a strong footing and maintain a good number of loyal customer, still bank has threats in various sectors: a. In Car Financing MCB & UBL are threats however, the expected car financing of ABN Ambro could also be a threat for Bank Alfalah. b. In Home Financing Union Bank or to some extent NBP are threats. c. In credit cards, Bank Alfalah captured the market share of Citi Bank and Standard Chartered Bank. Till yet the bank has no prominent threat. But, the launch of Askari Bank Master Card and Union Bank Card might be threat after some time.


MANAGERIAL PRACTICES Aggressive Banking Bank alfalah expanding their network of Islamic Banking. Bank Al Baraka has been serving the Islamic banking sector since 10 years and they have only 5 braches in Pakistan. On the other hand bank Alfalah has established 20 branches in a year. Motivation Bank Alfalah motivating their employees by giving them comprehensive benefits and professional environment within the organization, which enhances the performance of the employees. Bank motivates their employees by giving 3 bonuses in a year. BENEFITS Monitory Benefits Monitory benefits are given to the employees on the basis of their performance like salary rise, cash prize. Grade Promotion Bank also provides benefit to their employees in the form of grade promotion. Grade promotion motivates the employee to do their work efficiently and effectively. Abroad Posting Bank benefit their employees by sending them on overseas posting where they can enhance their professional skills and get handsome financial benefits in terms of salary or fridge benefits.

Controlling Bank has proper setup of controlling the day to day transactions and operational affairs. Bank controls the operations through a proper check and balance system and properly monitor the daily work.


Internal Control Unit Bank has an Internal Control Unit that monitors the daily transactions within the organization and keeps informing the management about the rules and policies violation. Internal control unit has a proper check and balance on operations and other bank departments.

Internal Audit Internal audit is a tool to have a proper check on daily working in a bank. Internal auditor has to point out the discrepancies found during audit. Internal auditors hand over the audit report to the audit chief and he hand over that to the management. Management overlook all the discrepancies and try to reduce the violation and also took the necessary actions. Internal audit conducted in a bank twice a year. External Audit External auditors are the representatives of state bank of Pakistan. State bank assigned them to audit the banks the find out the lapses or discrepancies according to the rules and regulations of state bank of Pakistan. State bank imposed penalty on bank if they found any discrepancies related to banking practices or procedures. External auditor hand over the audit report to state bank of Pakistan and SBP handover the report to the management along with the debit advice in form of penalty and management overlook the discrepancies and take necessary actions. External audit conducted once in a year. Bank Al Falah has a Chartered Accountant Company on his panel who prepare and overview the financial reports of the bank Taseer Hadi & Co. is a chartered firm which is on the panel of Bank Alfalah.


0 CUSTOMERS PROBLEMS It seems that the priority is given to the corporate customers in Bank Al Falah as the individuals from middle class have to remind the management of certain branch to do the needful for them. Customer is the king and customer always right. Bank is earning profit from the customers. Bank should have a proper relationship with corporate as well as individual customers. It is recommended that the management should stress on having satisfactory relationship with individual customers because they can also provide the revenue in term of profit.

EMPLOYEES PROBLEMS 1 Insufficient Employees To compete in the banking industry Bank Al Falah should have enough employees to facilitate the customers, and divide the workload of the existing employees by hiring new people, because the bank cannot use the alternative to reduce the number of customers and loosing the market share. 2 Working Hours Bank Al Falah although providing the customer service in better way but there is a lot of work to do in a routine banking to the employees due to which they work for long time. Management should gave relaxation to the employees by hiring new professionals and reduce the working hours.


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