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Bank Alfalah

Bank Alfalah

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Published by Faizan Khan

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Published by: Faizan Khan on Dec 16, 2010
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Bank Alfalah Limited came into existence on 21st June 1997 as a public limited company under the Companies Ordinance 1984 however; its banking operations started off from 1st November 1997. Since then the bank has been engaged in commercial banking and related services. Currently, the Bank is operating through 195 branches in 74 cities, with the registered office in Karachi. So far, the management of the bank has been successful in implementing strategies and policies to carve a distinct position for the bank in the market place. The Bank has invested a lot in technology to have an extensive range of products and services, with a backing and banking of the Abu Dhabi Group. Over the years, through sheer commitment to a culture of innovation, Bank Alfalah has provided uninterrupted services to its customers who has in return, gained them synergies with clients and service providers. They have ensured that their customers get quality products and service solutions. This report gives an explanation about how Bank Alfalah is affected by the general economic environment of Pakistan and how it is coping to with the overall situation.

In order to compile this report, we used several sources including books, websites, articles and newspaper reports, which included websites such as; yahoo, Google and tutor2u; books such; as A level business by Peter Stimpson, A level Business by Dave Hall and Introductory Economics by Stanlake and articles from The News business column. All these sources helped us a lot to analyze and evaluate the different concepts mentioned latter in this report.

Bank Afalah: The caring Bank


and guide decision-making. there were a lot of confidentiality issues which hindered our overall analysis due to non availability of some core documents. thus providing value to the stakeholders of the bank.Since the organization under question was a Bank. establishes a competitive advantage and enhances profitability. The mission statement should guide the actions of the organization.” A mission statement is a formal short written statement about the purpose of a company or organization. manage customer experience. Nonetheless. spell out its overall goal. deliver quality services that contributes to brand strength. provide a sense of direction. MISSION “To develop & deliver the most innovative products. values and highlight the objectives of the chosen organization VISION “To be a premier organization operating locally & internationality that provides the complete range of financial services to all segments under one roof. the bank personnel and management were very generous in helping us in any possible way Explain mission. It provides "the framework or context within which the company’s strategies are formulated A mission should: Bank Afalah: The caring Bank 4 .” Vision is a shared look at the future and the future is filled with hope and promise to achieve the desired goals and objectives or being able to see where you are going and what are your desired goals and objectives. The above mentioned Vision of Bank Alfalah states the same thing in a bit different and attractive way that is to be a premier and leading bank in the market operating locally and internationally in order to provide all the financial services to all the customers of all segments.

an acceptable return on investment. creditworthiness. objectives are further needed for each key area of an organization. Date Accessed 15/10/2009) It is important for a business to have well defined objectives. The objectives of any organization are set by the stakeholders of the business and those stakeholders which have great influence on the business are the ones who direct and set the objectives. 3.” (Answers. 4. These objectives signal commitment to such outcomes as good cash flow. Some of the main key areas for which an organization has objectives are as follows: 1. 2.1. 5. Define what the company is Define what the company aspires to be Limited to exclude some ventures Broad enough to allow for creative growth Distinguish the company from all others Serve as framework to evaluate current activities Stated clearly so that it is understood by all OBJECTIVES “An objective is a personal or organizational desired end point in development. 7. earnings growth. Range of objectives generally for an organization: Mainly there are two types of Objectives: • Long term objectives • Short term Objectives Long term objectives are concerned with futuristic planning whereas short term objectives are set to achieve the long term objectives by dividing the timeline to achieve the desired goals. and stock price appreciation etc. Apart from this. dividend growth. Financial Objectives Financial objectives of the business refer to the objectives that involve or contribute to earning of profit and also other objectives that are necessary to be pursued to achieve the profit objective. It is usually endeavored to be reached in finite time by setting deadlines. 6. They help the business to be clear about what it wants to achieve. 2. Strategic Market Objectives Bank Afalah: The caring Bank 5 .

Operational objectives: Operational objectives concentrates on administering vital company’s sub divisions(plants.Strategic market objectives emphasize on the organization determination to keep up and enhance the company’s long term market stance and competitive capabilities by creating customer value. shipping. Innovative and Learning Objectives These objectives concentrate on the proceeding that helps to make firm base for the organization. Small Business Unit (SBU) Objectives These objectives focus on each level of management. distribution centers) and other vital functional assignments(materials purchasing. 3. Internal Operational Objectives Internal operational objectives concentrate on keeping up organization’s core competencies and also emphasizes on business functions which carries importance in making clients satisfaction and worth. 7. as in each manager should have objectives and be responsible for achieving them. sales districts. which in future will be helpful for them in competing any sort of challenge and to gain competitive edge over its competitors. advertising campaigns) along with business. A priority based process aligns aims and plan of actions of the organization as well as it integrates the internal efforts of the company with the selected strategic plan. customer service. distribution. inventory control. 4. human resources. Bank Afalah: The caring Bank 6 . Strategic market objectives emphasizes on providing innovative standard product and services with less cost comparing to competitors to gain market share and international recognition. production. Objective setting needs to be based on priorities in order to guide lower-level managers and organizational units towards outcomes that support the achievement of overall business and company objectives. 5. maintenance. 6. finance. Management objectives: Management objectives concentrates on carrying out vital operational proceedings like research and development. marketing.

(My Strategic Plan. being the mission of the company. deliver quality services that contributes to brand strength. establishes a competitive advantage and enhances profitability. Bank Alfalah starts with a vision and moves forward to making a mission. Date Accessed 04/05/2008) • • • • Innovation Quality service Profitability Providing value to the stakeholders The above mentioned terms are the core basic objectives and values of the bank. manage customer experience.” (Bank Alfalah. They define their purpose of existence as: “To be the premier organization operating locally & internationality that provides the complete range of financial services to all segments under one roof. Date Accessed 18/10/2009) Moreover their vision gives birth to their main objective. critically analyzing the short comings in detail OBJECTIVES OF BANK ALFALAH As the objectives are steps to meet the mission and the vision of the organization. So just like any other organization. For them their customers are everything. as its slogan says “The Caring Bank”. their most important objective is to ensure customer satisfaction. In Addition the main strategic objective of the bank is the carrying out of a set of managerial. Bank Alfalah stands firm for one value. Defined as: “To develop & deliver the most innovative products. HR. Date Accessed 17/10/2009) Review and evaluate the current mission statement and objectives of the chosen organization. thus providing value to the stakeholders of the bank.” (Bank Alfalah. technological and technical Bank Afalah: The caring Bank 7 .

starting from national level. Bank’s Key Objectives: To gradually reach the international standards in all sectors of the banks functions. Apart from this they have a range of other objectives covering all the aspects of an organization from strategic. • To concentrate on targeted market segments and to develop a market oriented organizational set up. • To introduce a program for the quantitative calculation of the quality of provided services. • To develop an inspirational set up for the practice of HR policies in order to retain the experience and skilled work force. • To establish a supportive advance communication set up across all the segments of the bank. • To regulate the functions. functional. • To keep close control over lowering costs for operations. • To promote appropriate corporate culture and professional training in order to enhance the standard of the banks human resources. They have both long term and short term objectives. • To construct vast. financially rewarding credit and investment portfolios which should take in to the consideration the most important concerns of the large nonstate industrial enterprises.changes to ensure conditions for the successful development of the bank as a stable financial institution capable of taking a strong position in the Pakistan banking system. • To carry out extensive research into the demand and requirements of the target sections of the consumers portfolio. • Now moving onto their segmented objectives: Bank Afalah: The caring Bank 8 . • To make sure the participation of the organization’s work force in the process of systematic up gradation of the banking functions. • To increase the quality of the bank’s management by introducing a systematic approach to all areas of the bank’s operations. then branch level. financial and internal operations. products and assistance. • To upgrade the method of administration of the banks regional setup. • To widen the origins of income and capabilities. team level and individual level objectives.

• To create a good working environment for employees Objectives: • To provide the work force with a healthy and safe environment. • To improve the bank's rate policy taking regional markets into account. • To improve the bank's client-oriented approach. • To enter international financial markets. • To introduce a statistical and analytical system. • To create an effective system for the bank’s management Objectives: To improve and maintain the bank's organizational structure. • To focus on developing innovative products and services. • To improve the HR development system. 9 Bank Afalah: The caring Bank . • To develop and practice a unique and compatible marketing strategy. • To establish a bank with its branches spread throughout all the regional and national markets and having the capability to compete in this dynamic set up properly. Objectives: To develop a corporate business primarily in priority branch segments and target groups.To create a business diversified in area and structure. • To optimize the bank's management and risk control systems. • To develop the client and resource base Objectives: To adapt such policies that can enhance the stance of the bank in the market for its share holders and clients. • To improve the bank’s image.

Bank Afalah: The caring Bank 10 .• • To build a work environment where every employee feels highly engaged to apply their individual talents to deliver sustainable business performance. To set up a system in order to have a close look on the balance between banks functions in the segment of information technologies and international quality standards. To obtain an international credit rating. To establish an effective and up to date system for the administration of the bank. To create a workplace that encourages employees to achieve their full potential. or can be affected by the company's actions. To devise and practice effective programs for technical and technological improvements. Identify the stakeholders of an organization and demonstrate the influence of stakeholders STAKEHOLDERS A corporate stakeholder is a party/person who affects. To create a technologically advanced bank Objectives: • • • • • To adopt new technology to the possible extent.

provide market competitive services.Examples of common stakeholders Stakeholders Owners Private/sharehold ers Government Employees Trade Unions Customers Creditors Local Community Example of Interests Profit. Customers. VAT. Customer Care Credit Score. Rates of Pay. direct the major decision making of the business. ensure employee satisfaction. Job Security Working Conditions. Performance. Minimum wage Value. 3. Objectives of Abu Dhabi Group of Companies: • • • • • To To To To To earn profit. ensure good working conditions. The Community. 4. increase their own power and status from business growth. Owners: Abu Dhabi Group of Companies. Shares (Source: Wikipedia. Liquidity Jobs. Objectives of employees: • • • • To To To To receive fair wages. Legislation Performance. Environmental issues. Objectives of Customers: Bank Afalah: The caring Bank 11 . 2. Targets. Quality. secure their jobs. Involvement. Employees. Direction Taxation. new contracts. Date Accessed 20/10/2009) STAKEHOLDERS OF BANK ALFALAH 1. feed their self esteem by good performance and promotion.

receive after sales service. As far as the customers are concerned. RESPONSIBILITIES OF ORGANIZATION GENERALLY As there has been an increase in the awareness of environmental and ethical issues. Yearly 30% raise in the salary.62%. appraisal bonuses. the society expects something in return for its welfare. so. are highlighted in the media. improper treatment of workers. the profits also clearly shows that because of the quality services people are preferring Bank Alfalah and because of its caring nature. as mentioned in the responsibilities and objectives of the owners. Issues like environmental damage. 625 million the previous year.2.4. Since business operates in a society by utilizing its scarce resources. The earning per share in 2006 was RS. This increase in profits shows that the objectives of the owners are being satisfied greatly. it’s RS. ensure that their finance is in secure hands.82. No Bank Afalah: The caring Bank 12 . which clearly shows that the profit has been almost doubled. As the financial statement of the bank shows that the profits of 2007 are almost double than the 2006 profits. registering an increase of 111. quick promotions.• • • • To To To To obtain good value for their money. where as in 2007.6906.91. To what extent are their objectives achieved? If we analyze the financial performance of the bank.419 million compared to RS. yearly trainings and other incentives clearly shows that the bank cares a lot for its employees and of course because of so many rewards the employees are satisfied and this satisfaction is what helps them achieve their objectives easily. receive high levels of customer service. their status and power is increasing. Then moving towards the employees. In 2007 the bank’s profit before provision of taxes stood at RS. and the image of the company and the brand is improving day by day. we would come to the conclusion that the objectives of the stakeholders are satisfied to quite a great extent.3263. and faulty production leading to customers inconvenience or danger. customers are getting good value for their money. the social responsibility of the organizations has been increased to quite a great extent. Their profits are increasing. employee satisfaction is very important to them.

Contribution to the general welfare of society. marketing or finance department and then the responsibility of each individual working to contribute in achieving the organizational goals. To reduce disparities among nations. Creation of employment. Bank Afalah: The caring Bank 13 . To contribute to the revenue of the country. for example. Provision of welfare amenities. socially and environmentally sustainable way. so the society expects something in return for its welfare. Protection of the environment in which it operates. And to contribute in the development of the society and the country. RESPONSIBILITIES OF BANK ALFALAH AND THE STRATEGIES IN RESPONSE Corporate Social Responsibility: The bank as a responsible corporate citizen has some social corporate responsibilities because it operates in a society by utilizing its scarce resources. HR . Social corporate responsibility of a business includes: • • • • • • • • • • Production and supply of quality goods and services. the responsibilities assigned to the different departments. Adoption of fair trade practices. Apart from the social corporate responsibilities. If business activities lead to socially harmful effects. which includes the overall management responsibilities of the managers. These trends have contributed to the pressure on companies to operate in an economically. To raise general standard of living. an organization has internal operational responsibilities as well. In fact some consumers have become increasingly sensitive to the CSR performance of the companies from which they buy their goods and services. there is bound to be public reaction against the business sooner or later. Therefore it puts on a huge responsibility on the organization as they have to invest for the betterment of the society as well as have to increase their revenues.activity of the business should be aimed at giving any kind of trouble to the society.

every branch has to show at least 10 to 15% increase in their loan sanctions per year. • Financial Responsibilities: Some of their financial responsibilities are as follows: 1. Furthermore. Moreover as its tag line says “CARE makes us Bank Alfalah”.The bank endeavors to fulfill its social corporate obligations through effective contribution towards well being of society as a whole. They have to show an increase in loan sanctions. they sponsor different events which also adds up to the CARE that Alfalah has for its customers and for the society. For example. Some of the internal operational responsibilities are as follows: Bank Afalah: The caring Bank 14 . • Managerial & Departmental Responsibilities: Their internal operations are bound to different types of responsibilities for departments and then for the organization as the whole. For example. Every year a branch is suppose to make an increase of 1. donations of RS. They have “Alfalah Education” scheme which provides contingency provision for depositor’s child’s tuition fee in the unfortunate event of death of the main breadwinner. 2. For example.5 billion in their deposits. now in 2008 they are suppose to deposit round about 5 Billion RS. they ensure customer satisfaction and care for their customers. For example in 2007 the branch under study had to deposit 4 billion RS. So. 36.173 million have been made during the year 2007. mainly to the education and health services organization. Internal Operational Responsibilities: Following are the main responsibilities of Bank Alfalah at Branch Level. they have sponsored several cricket series in Pakistan in 2006 and 2007.

Moreover as the branch is being affected from decentralization so HR department has been given the responsibility to centralize it so that work can be done quickly and easily. R & D Responsibilities: Their research and development department has been given the responsibility to create new innovative products that can compete well in the market. Recently they have been given the responsibility to do quality promotion of Priority Banking. For example if in Sadar they have one branch so in the rest of the area in Sadar they have Sales and Service Centers. 2. For example. which are open 24 hours a day and provide services to the customers. They have also been given a responsibility to introduce the new employee scheme. so hiring and firing for Bank Afalah: The caring Bank 15 . which is a new service of Bank Alfalah and which they are trying to launch before June. further more it focuses on employee satisfaction. In Addition. Furthermore they have to introduce new jobs such as HR RM (Human Resource Relationship Manager). a 30% increase in the salaries and for performance appraisal bonuses every year. 2008. They are responsible for carrying out job evaluation every year. HR department conduct two to three trainings every year for the employees to improve their working skills and to ensure their constant learning. which are most likely to be four for each deserving employee. Then there is redundancy of work and no proper span of control so the HR department is given the responsibility to do proper distribution of work and to make sure that there is no over supply of employees. in 2007 they were given the responsibility to come up with a plan by which they can get more penetration in the market and can serve better to their customers. Marketing Responsibilities: Their marketing department has to ensure quality promotion and advertising of their services. which would have loan facility and employees would be offered low rates such as 3 or 5%. For example as Peshawar comes under their region NORTH-2. It is responsible for quality recruitment and selection of employees. HR Responsibilities: HRM Department plays a vital role in achieving the objectives of the organization.1. By introducing and starting this new concept they would be managing hiring and firing on regional level for all the offices under its supervision. Where as. The R&D department suggested opening Sales and Service Centers at the locations where the bank doesn’t have any branch. generally the bank does not offer personal loans to the customers.

Firstly he observes different factors like. manager operations and the mentor is responsible. with writing proper comments. QA measurements etc and then rate them from 0 to 5 or 10. the bank has held the quality assurance officer responsible for it. Lastly he works on the area where there is a need for improvement or calls on a meeting to solve the problems. For example the account holder’s statement is not provided to anyone but the account holder itself (except for a signatured request by the account holder). Moreover the credit card transactions are handled with a lot of care. to ensure the quality of the bank’s environment and customer services. for which the branch manager. the RMD department checks the CIB (Centralized inter banking data) reports to ensure that there is no risk involved in the loan sanction. In this way they maintain a good working environment. internal environment. Every branch has a mentor. Bank Afalah: The caring Bank 16 . bank’s external environment. customer feedback. The officer has to assure the quality of bank’s environment and customer services for which he gives proper instructions to the management and frequently observes everything. Security of Personal Information: The security of their customer’s personal information and their online credit card sessions is of the utmost important responsibility of the bank. Moreover. market risk. who conducts monthly meetings of the labor force and the other officers to know their problems and to work out for its solutions. For example.Peshawar and all the cities of NORTH-2 would be on regional level and would be centralized. It has been structured to address risk involved in the business. The credit card holder is suppose to activate the card for a specific period of time and has to give bank the details of his transaction. Quality Assurance: The new addition to their responsibilities is to improve the branch environment. So in compliance with the requirements of state bank of Pakistan. if a customer comes to get some loan from the bank. for this they maintain strict security standards and procedures to prevent unauthorized access to their information. Risk Management: The minimization of risk involved in a business is a great responsibility on the bank’s management. A risk management division (RMD) has been created with the Head RMD reporting directly to the chief executive officer. Alfalah has in place an approved integrated risk management framework for managing credit risk. the bank take cares of secure transaction and deactivates the card after the requested time has been used. liquidity risk and operation risk.

Individual Responsibilities: Every individual is responsible for contributing to the organization. dust or magnetic card reading problem. The document is titled “10 steps at cash counter”. the bank has a Complaint Management Unit (CMU). Forecasting: Forecasting is very important for any business to succeed. And as per their policy. half yearly and full year bases. in this they are instructed to deal politely with the customers. However if the problem requires more time to redress the issue. The complaints received at the website. For ensuring good employee behavior. The complainant is contacted by the complaint officer within 48 hours to acknowledge the receipt of his complaint and to for a brief inquiry regarding the complaint. Bank Alfalah properly does forecasting. For example. Every branch has to send their financial statistics and other information to help the head office conduct accurate analysis which would result in good forecasting. for which the head office is responsible. to make proper eye contact and to ensure that they don’t leave the bank with any kind of dissatisfaction or any unanswered query etc. In order to deal with this responsibility. Bank Afalah: The caring Bank 17 . His behavior towards his work is what makes the difference. Complaint Handling Responsibility: To ensure customer satisfaction. Forecasting is done on monthly. They blower the ATMs every evening to make sure that it works well throughout the day. they ensure that the process does not take more than 45 working days. an interim response is sent to the complainant indicating the reason for the delay and expected date for final response. quarterly.Performance of ATMs: The performance of ATM machines is supposed to be kept at 95%. the employees are given trainings and meetings are held to make them learn how to deal with their customers. it is very important to give them 24 hours assistance on any complain and issue related to the services. telephone or offices are handled by the CMU. CMU then forwards the complaint to the concerned branch or division with one working day for resolution of the problem. The complainant is then informed about the resolution or redressed by the CMU normally with in ten working days. For this purpose they daily check the ATM machine to make sure that it isn’t out of cash and that there isn’t any cash jam. they provide the cashiers with a document having ten clear points on how to deal with the customers.

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