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INTERNSHIP REPORT OF 2010

Internship
Report
Allied Bank Limited
Name Sumera Sarwar

Student ID mc080401636

Session Fall 2008

Date 27 September 2010

Virtual University of Pakistan Lahore

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Letter of Undertaking

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Internship Certificate

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Dedication
I would like to dedicate
This internship report
To my honorable vu teachers
And my specials regards to my
Most respectful affectionate loving parents,
Who always,
Prayed for my success and betterment.

Acknowledgement
In the name of ALMIGHTY ALLAH, the most Gracious, Merciful and Compassionate, the
creator of the universe, who enabled us to complete this internship, report work successfully
I would also like to thank Branch Manager GHAZANFER HAYAT, and branch staff and
helping and guiding me through out my learning period.
I am thank full specially my parents who help me in every step.
Last but not least I would love to thank all my friends for their undying support, help and for
being there when ever I need them.

Executive Summary
This document provided details of my achievements in term of practical implementation and
understanding of working environment in banks. I had started my internship from Allied Bank
Limited PAF Branch. From 15th may to 30th June. During the internship I have learnt basic
banking work and a lot of practical work which I had not acknowledged before. I worked in
different departments and learnt basic operations of the departments that departments are.
Account opening department, Clearing department, Remittance department Calling and sorting
department etc. I have spent most of my time in Account opening department and hence I learnt
what professional attitude to adopt while dealing with external as well as internal customers. I
have filled out the different vouchers and slips such as Current Account slip, PLS Saving Account
deposit slip, clearing vouchers; online inter branch transaction slip etc.
And this document provided aspect of Allied bank limited and one of it’s branch PAF Base.
This report is composed of the ABL History, ABL introduction, organizational structure, finance
structure, it’s different Analysis such as critical analysis and swot analysis and recommendation
etc. e.g. ABL is the one of the leading bank that is first Muslim bank incorporated in the soil of
Pakistan in 1942.in Lahore as Australasia bank.
ABL organizational and financial structure is very trustworthy.
ABL has some weakness but by using its strength ABL can over come the weakness as ABL is
the strong and leading bank, But It also has faces many threats but it has many opportunity to
overcome the threats.
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Table of Contents:
Pg#
Chapter -1 7-14

1. Introduction ----------------------------------------------------------------------- 7
1.2 Overview of the ABL Bank ---------------------------------------------------- 10

• History
• Nature of the Organization
• Business Volume
• Product Line
• Competitors
Chapter -2 15-22

Organization Structure ---------------------------------------------------------- 15 -22

• Organization Hierarchy Chart


• Number of Employees
• Main Offices
• Comments on the Organization Structure
Chapter - 3
Plan of your Internship Program --------------------------------------------- 23
• Introduction of the Bank
• Starting & Ending date of Internship
• Department in which you got Training

Training Program -------------------------------------------------------------- 24 - 42

• Introduction of all Department


• Description of the Department I am work in

Chapter - 4 43- 45
Structure of the Finance Department --------------------------------------
• Department Hierarchy
• Number of employees working in Finance Department
• Finance & Accounting Operations

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Page #

Functions of the Finance Department------------------------------------------


• Accounting system of the Organization
• Finance system of the Organization
• Use of electronic data in decision making
• Mobilizations of funds
• Generation of funds
• Sources of funds
• Allocation of funds
Chapter - 5 46-84
Critical Analysis -------------------------------------------------------------------

• Financial Analysis

(i) Ratio Analysis


(ii) Horizontal
(iii) Vertical Analysis for the last three years

• Future prospect of the ABL Bank


Chapter – 6 85-89

SWOT Analysis of the ABL Bank ----------------------------------------------- 85

Conclusion & Recommendation -------------------------------------------------- 87

References & Sources Used ------------------------------------------------------- 88

Annexes ------------------------------------------------------------------------------ 89

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CHAPTER- 1
INTRODUCTON…..
OVERVIEW…

1. INTRODUCTION:

What is Bank?
“A system of trading in money which involved safeguarding deposit and making funds
available for borrowers”
Or simply,
A bank is an institution which Accept deposits and give advances.

Definition of Bank:
An organization usually a corporation
♦ Chartered by a state or federal government, which does most or all of the following:
♦ Receives demands and deposits,
♦ Honor instruments drawn on them,
♦ And pays interest on them; Discounts notes makes loans, and invest in securities;
collects checks, drafts, and notes; certifies depositor’s checks; and issue draft, and
chasier.

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About Allied Bank:

Allied Bank Limited is the first bank incorporated on the soil of Pakistan. It was incorporated in
Lahore before independence in 1942 as Australasia Bank and was renamed as Allied Bank of
Pakistan Limited in 1974 and Allied Bank Limited in 2005.
In August 2004 as a result of capital reconstruction, the Bank’s ownership was transferred to a
consortium comprising of Ibrahim Leasing Limited and Ibrahim Group.
Allied Bank Limited is the one of the top and renowned bank it has excellent reputation. In the
wake of its success one of the most important factors, apart from its energetic management and
prudent approach, is the QUALITY of its SERVICES, which gives it a great periphery over its
competitors ABL is providing the most modern and technologically advanced services to it’s
customers according to the customers need and demands, and hence the ABL is meeting the
customers expectation very finely. BANK has always strived to facilitate its customers by
introducing various high quality hi-tech services.
Today the Bank stands on a solid foundation of over 66 years of it’s existence having a strong
equity, assets and deposits base offering universal banking services with higher focus on retail
banking. The Bank has the largest network of on-line branches in Pakistan and offers various
technology based products and services to its diversified clients through its network of 779
branches in over 300 cities and towns. The bank has in place the largest ATM network in the
country with more than 502 ATMs in more than 145 cities and towns across Pakistan

Main Sector of the Organization:


Main sector of the ABL are the:
♦ Credit department (Advances department)
♦ Foreign currency department (Deposit department)
♦ Customer management services
The credit department and the foreign currency departments are basically the main departments in
which the organization is dealing at a large scale and dealing is set in motion in customer
management services department. These departments are playing a vital role in banking sector.
These departments give the bank a real business.

Credit Department:
The main function of the credit department is to lend money to the borrowers
on the interest and hence bank earns a lot .ABL is serving the customers by giving the short term,
medium term, long term, farm and non firm credits. The bank lends money against some
guarantee or pledges or some property. ABL the is giving the clean advances against promissory
notes, giving secured advances against tangibles and marketable securities and now also lending
money against life policies and immoveable property.
Foreign currency department:
The ABL is also giving the facilities of foreign currency account as
well as Pak rupee account. Foreign currency department is also playing a vital role in the banking
and it becomes immense source of earning. In the allied bank the foreign currency account can be
opened in many currencies but the four main currencies are:
• US Dollar (USD)
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• Euro (EUR)
• Japanese yen (JPY)
• Sterling Pond
Foreign currency account can be opened in many accounts such as:
• Current account
• Saving account
• Term deposit account

Customer management services:


This is the department which is dealing with customers and
convinced them towards to open the accounts and persuading them to indulging in many other
activities of bank, these departments serving the customers in the various ways.
The above two departments activities are actually starting from here it can be say that customer
service department is composed of the foreign currency departments and credit departments.

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OVER VIEW
OF
THE
ORGANIZATION

VISION

 To become a dynamic and efficient bank providing integrated solutions and the first
choice of bank for all customers.

MISSOIN

 To provide value-added services to our customers


 To provide high-tech innovative solutions to meet customer requirements
 To create sustainable value through growth, efficiency and diversity for all stakeholders
 To provide a challenging work environment, and reward dedicated team members
 To play a proactive role in contributing towards the society

VALUES

 Integrity
 Excellence in Service
 High Performance
 ·Innovation and Growth

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History of Allied Bank Limited:

Allied bank is the First Muslim bank that was established in December 3, 1942 in Lahore as
Australasia Bank, and then renamed as Allied Bank Pakistan Limited in 1942, and then Allied
Bank Limited in 2005.
In 1942 the chairman of Australasia Bank was Khawaja Bashir bux. Equity at the begging of this
bank was Rs. 0.12 million. And at the end of the first year the equity raised by .5 million. Initial
total assets at this time was the Rs. 0.572 million.
By the end of 30th June 1947 capital of the Australia bank increased to Rs 0.673 million and
deposits raised to Rs. 7.728 million. On 14th August, 1947 the Australasia Bank was only the
totally operational Muslim bank in Pakistan. At this time all Australasia branches in India were
closed down due to attack of rioters. And hence the bank faces a big loss of capital and deposits.
Luckily, very soon new branches were come into existence in different areas of Pakistan such as
in Rawalpindi, Peshawar, Karachi, and Sialkot, Sargodha etc In spite of very sensitive and
difficult condition; during 1947 to 1948 the Australasia bank earned a profit of Rs. 50,000.
Australasia bank was the first Pakistani bank that negotiated and opens L.C in August 1948.and
it made links with UK India and USA
In 1950’s Chairman was replaced with his own brother Kh. Sharif Baksh.
Progress remained continue, and at the end of 1970 it had 101 branches but unfortunately it had
lost 51 branches at the time of separation of East Pakistan.
Yet the development remain continue and it did well deposits and had 186 branches in 1973.
1974, the Board of Directors of Australasia Bank was dissolved and the bank was renamed as
Allied Bank. In the first year the profit is increased by 10 million, deposits rose by over 50
percent and approached Rs 1460 million. Investments rose by 72 percent and advances exceeded
Rs 1080 million for the first time in bank history. 116 new branches were opened during 1974
and the Bank started participation in the spot procurement agriculture program of the
Government.
Branches increased from 353 in 1974 to 748 in 1991. Deposits rose from Rs 1.46 billion, and
Advances and investments from Rs 1.34 billion to Rs 22 billion during this period. It also opened
three branches in the UK. For better running of enterprise the ownership of an enterprise is
transferred to its employees under the philosophy of ESOP
on September 10, 1991 bank became the country’s 1st bank to be reconstituted as an institution
jointly owned by its employees through the unique concept of Employees Stock Ownership plan
[ESOP] developed by the Allied
Management Group lead by Mr. Khalid Latif enabled the bank staff to react creatively to the
privatization challenge. More that 7500 staff members acquired a share in the bank
As a result of privatization in September 1991, Allied Bank entered in a new phase of its history,
as the world’s first bank to be owned and managed by its employees.
In 1993 the First Allied Bank Modaraba (FABM) was floated. After privatization, Allied Bank
registered an unparalleled growth to become one of the foremost financial institutions of Pakistan.
Allied Bank’s capital and reserves were Rs.
1.525 (Billion) and assets amounted to Rs. 87.536 (Billion) and deposits were Rs.
76.038(Billion). In August 2004 as a result of capital reconstruction, the Bank’s ownership was
transferred to Ibrahim Leasing Limited and Ibrahim Group. In May 2005 Ibrahim Leasing
Limited was merged by transfer to and vested in with and into Allied Bank Limited.

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ABL was formally listed and trading of the shares of the Bank commenced the following dates.

 Islamabad Stock Exchange - 8th August 2005


 Lahore Stock Exchange - 10th August 2005
 Karachi Stock Exchange - 17th August 2005
Mohammad Aftab Manzoor has taken charge as CEO and President of the Bank on August 13
2007. He is an ex-president of MCB Bank Ltd. The Bank also has the largest network of over 700
online branches in Pakistan and offers various technology-based products and services to its
varied clients. Today the Bank stands on a solid foundation of over 63 years of its existence
having strong equity, assets and deposits base offering universal banking services with higher
focus on retail banking.
In the journey of bank it shows that it greatly committed to its stability and huge growth by
responding to the changing environment with great leading.

Nature of the Organization:

Allied Bank Limited is Scheduled Bank.


Allied Bank Limited (Allied Bank) provides retail, commercial and corporate banking services.
The bank is listed on all stock exchanges in Pakistan
ABL is a Private Bank.

2009 2008 2007 Business


Total Assets 418,374,331 366,695,669 320,109,723 volume:
investments 94,789,492 82,646,595 83,958,463
Advances 237,344,038 212,972,008 168,407,280
Interest earned 41,121,503 30,570,540 21,201,422
Share capital 7,110,008 6,463,644 5,386,370
EPS 10.02 5.85 5.73
Imports Exports 196,211 194,186 150,698
Other information:
No. of Employees 8,713 8,325 8,181
No. of branches 779 766 757

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Product line:

 1 Link Network:

 M. Network
 Masters Cards
 Allied Bank Rupee Travelers Checks
 Home Remittances
 Utility Bills

Different schemes:
 Allied Umrah Aasan
 Allied Tahafuz Deposit Scheme
 Allied Karzas Scheme
 Allied Bachat scheme

Finance Facility:
 Cash Finance
 Demand Finance
 Running Finance etc
 Agricultural Finances etc

Accounts facility:
 Current Account
 Saving account
 Other Accounts

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Banking provides:
 Internet Banking
 Allied basic Banking
 Foreign currency banking

Deposits:
 Allied profit plus term deposit
 Allied profit deposit
 Allied monthly income scheme etc
Large
ATM Network:
24/7 availability

Competitors:

These are the some competitors.


 Habib bank limited
 Soneri bank
 Alfalah bank
 United Bank Limited
 The bank of Punjab
 Soneri Bank Limited
 Bank Al-Habib Limited
 Bank Al-Falah Limited

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CHAPTER- 2
ORGANIZATIONAL

STRUCTURE
And……..

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Hierarchy chart

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PRESIDENT
cc

SENIOR EXECUTIVE
VICE PRESIDENT

PRESIDENT

EXECUTIVE VICE
PRESIDENT

PRESIDENT

SENIOR VICE
PRESIDENT

VICE PRESIDENT

ASSISTANCE VICE
PRESIDENT

OFFICERS GRADE
I II III

ASSISTANTS

PRESIDENT
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CASHER

PEONS

Comments:

The organizational hierarchy represents the different designations in organization. And every
lower level position officer/employee is responsible for the upper level designation person. And
Assistants play a very vital role in the organizational structure.
Assistants assist their officer and make the work/job easy and quick. And every one is responsible
for his work for their officer. Hence it creates a good control in overall structure and thus the
overall ABL structure full filling the overall requirement of the organization.

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Organizational structure of PAF Branch:

Branch Manager

Operation Manager

Department Incharge

Officers

Teller

Cashier

Comments:
The successful management depends on these factors:
• Fully and hearted contribution of all the members/employees.
Successful organizational/management structure usually depends upon the fully and active
contribution of the each member of the organization:
Such as contribution of:
 President
 Board of directors
 Supervisors

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 All employees etc.


And the organization/management structure also depend upon the
• The manner of doing the work at each level is also very important
PAF branch have above both factors, every employee is responsible for senior officer in the
branch and work with fully attention and devotion,
And the overall branch is under the control of board of directors and president etc. and hence
overall working of the branch is best.
As the branch is under the control of:
Presidents and board of directors,
Every junior employee of the branch is under the control of his senior officer/employee and it
creates the dual control on the branch and hence branch is working with full awareness and with
intimation and hence the PAF branch structure is fully fulfilling the requirement of the
organization.
Main Offices:

Central Office:
Bath Island, Khayaban-e-Iqbal,
Main Clifton Road,
Karachi – 75600
UAN: (92 21) 111-110-110

Head Office/Registered Office:


8- Kashmir/Egerton Road
Lahore
UAN: (92 42) 111-110-110
Lahore ABL branches networks are divided into two regions;
♦ City region Head Office at Samana bad
♦ Gulberg Region Head Office at Wahadat Road
Main branches:
♦ Napier Road
♦ Wapda House
♦ Wahadat Road

ISLAMABAD Blue Area


Gujranwala G.T Road

Websites @ Email:
www.abl.com
E-mail: info@abl.com
Toll Free Number:
0800-22522

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Head Quarters:
There are Four Provincial Headquarters of Allied Bank Limited situated at Lahore (Punjab),
Karachi (Sindh), Peshawar (NWFP & Azad Kashmir) and Quetta (Baluchistan)

PUNJAB:

7E/3, Main Boulevard, Gulberg, Lahore

SINDH:

Jubilee Insurance House, I.I. Chundrigar Road, Karachi

NWFP:

1st floor, State Life Building, The Mall,


AZAD KASHMIR:
Peshawar Cantt.

BALUCHISTAN:

C.C. & I Building, Zarghoon Road, Quetta.

Number of employees:
Total number of employees in PAF branch is 14.
In over all Allied Bank numbers of employees are:
2009 2008 2007
Number of 8713 8325 8181
employees

Departments:

 Customer service Department


 Cash department
 Advances Department
 Foreign currency Department
 Clearing Department
 Foreign currency Department
 Remittance Department
OBC
Intercity
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Introduction of all departments:

Customer Service Department:


This is the main department of the PAF branch.
And this department is dealing with customer and provides them services of giving the
information about the Bank’s products and Services.
And also help the customer in different ways, also response to the complaint.
Cash Department:
This is also the very important and main Department of PAF ABL
branch as this department is dealing in cash which come in the bank or goes from the
bank. Cash is in different form of currency. Its basic function is dealing with Receipts
and Payments.
For example,
Accept deposits in terms of cash
Give advances in terms of cash
Collect utility bills etc
Other sources
Advances Department:
This Department is also play a vital role in banking this department
give advances to the customers etc
To accept deposits and lend or give advances is the basic and primary
Function of this bank.
The bank lends money in the form of:
Advances, against promissory notes
Secured advances against tangible and marketable securities.
Etc.

Foreign Currency Department


The function and role of foreign currency department is
very important and pivotal in the banking sector. It became the big source of a earning in bank.
As it is dealing in the foreign currency. The foreign currency account can also be open in many
accounts same like as Pak rupee account, such as,
 Saving account
 Current account
 Term deposit account.
The bank deal in three type of foreign currency account
 US Dollar (USD)
 Euro (EUR)
 Japanese yen (JPY)
 Sterling Pond

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Clearing Department:
This department is used for clearing for example clearance of
cheque and the work of this department is very sensitive and time taking.
The clearance is dealing with those activates when bank receive or pay the amounts or
cheque of the other banks for instance the receiving or sending amount to Mezan bank
Habib Bank Limited, National Bank of Pakistan, Soneri bank.
Intercity and OBC actually the part of the clearing department with little bit difference
functioning.
Remittance Department:
The main task of the Remittance department is:
Transfer funds from one bank to another on demand
And the collection takes place in this department.
Remittances include:
 Demand draft (DD)
 Cash order or credit order
 Online inter branch transaction

CHAPTER- 3

INTERSHIP
PLAN
AND
PROGRAMM

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PLAN OF INTERNSHIP PROGRAME:


Brief Introduction of My Branch:

I have done my internship form allied bank limited PAF base branch Lahore. It is located
on Sarfraz Rafiqui Road PAF Market base Lahore. This branch has almost a 14
employees. PAF branch code is 0534 and GHAZANFER HAYAT is the Branch Manager
GHAZANFER HAYAT of this branch.
it is a very diligence branch and it is situated from 36 years It is dealing in various Tasks.
It is situated in the commercial area as there is many schools are located near PAF branch
and many rich people’s buildings are located near the ABL PAF Base branch LHR and
also the Pakistan Air Force office and units are located near the PAF branch and hence it
attract so many people on daily basis.
As, many teachers comes many a times for opening different types of accounts, joint
accounts, single accounts and for different other activities and also they deposit huge
amounts, and many PAF servants also comes daily in this bank for availing banking
services and also many rich people indulging with banks activities and hence the PAF
Base ABL branch doing a very good business. Thus, It has serving the all those customers
in various aspects from 36 years with a high quality of products and services. It’s mode of
dealing is very attractive as, It gives advances and also performing the job of deposits at
very attractable and reasonable rates. It is providing and introducing the new and
innovative products in the PAF area .It has a very good progress and earns high
profitability. And has a good reputation.

STARTINNG ENDING DATE OF INTERSHIP:


Starting date: 15 May
Ending date: 30th June

NAME OF DEPARTMENT AND DURATION:


Account opening : 15 May to 21st May
Remittance : 24 May to 28 May
Clearing : 1st June to 8 June
Calling and sorting: 9 June to 15 June
OBC : 16 June to 23 June
Intercity : 24 June to 30th June

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TRAINING
PROGRAM
AND
TASK
ASSIGN
TO ME

Training program:
Detailed description of the Activities performed by the departments:
I have done my internship from ABL PAF branch. The job performed by these departments is
different and this division is useful for accurate performance and well managed functioning of
each departments.

I have work in these departments:


♦ Account opening
♦ Remittance
♦ Clearing
♦ Calling and sorting
♦ OBC
♦ Intercity
Details Description of the department’s activities:
All these departments are performing different particular activities detail of which is as follows:
Account opening department:
The function of this department is to open the account. And this department plays vital
role in banking as this is hold the back bone position in banking. The higher the persons
come for Open the Account, the banking proceeds in the same proportion.
The ABL serving the large number of persons/clients by providing them the facility of opening
the different types of Account, such as the following accounts

o Types of Account:
The account opening section deals in the opening of following types of accounts.
1. Individual/ Joint Account
2. Sole Proprietorship/ Partnership/ Joint Stock
3. BBA(Basic Banking Account)
1. Individual/ Joint Account
In it they may open the following accounts
♦ Current
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♦ Saving
♦ ASDA
Document required for opening the account are
♦ Original ID
♦ Letter Head (in case of businessman)
♦ In case of illiterate person photograph of the person.

2. Sole Proprietorship/ Partnership/ Joint Stock


In it they may open the following accounts
♦ Current
♦ Saving
♦ ASDA
Document required for opening the account are

For Sole Proprietorship


♦ Copy of NIC (see original NIC)
♦ Letter Head of business
♦ NTN

For Partnership
♦ Copy of NIC (see original NIC)
♦ Attested copy of “Partnership Deed” duly signed by all partners of the firm.
♦ Attested copy of Registration Certificate with Registrar of Firms. In case the partnership is
unregistered, this fact should be clearly mentioned on the Account Opening form.
♦ Authority letter, in original, in favor of the person authorized to operate on the account of
the firm.
♦ Copy of registration certificate( if registered)
♦ Company Letter Head
♦ Two references

For Joint Stock

♦ Certified copies of:


♦ Resolution of Board of Directors for opening of account specifying the person(s)
authorized to operate the company account.
♦ Memorandum and Article of Association
♦ Certificate of Incorporation.
♦ Certificate of Commencement of Business.
♦ Copy of NIC (see original NIC)

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3. BBA (Basic Banking Account)


This account is open by salary persons and also for students. For
opening the account following documents are required:
♦ Copy of NIC (see original NIC)
♦ Salary Letter or bonfire letter for students
♦ Initial deposit Rs.1000

The major activities/functions performed by this department are:


Activities are:
♦ Account opening.
♦ Issuing of Cheque book
♦ Issuing of ATM card.

The process of the account opening is as follows:

The first set of steps in the process of account opening is the verification of the
applicant/account opener who wants to open the account:
The steps that are used in verification are:

FIRST STEP:
To Obtain Attested Copy of Valid CNIC:
The first and for most step is to obtain the identification card from the applicant and check
it carefully and then obtain the attested copy of the identification card and carefully see
expiry date of the date of the identification card. If the date of the identification card is
expired then the account cannot be opened mean this national identification card is not
valid. This is the basic requirement for opening the account.
If identification date is not expired mean valid CNIC, then proceed further. And the
account holder must know the identity card number of his Next of kin.
Next of kin may be his mother/father, wife/husband; sister/brother etc blood relation is
must with next of kin.
SECOND STEP:
To Obtain Attested Copy of Service Card, Salary Certificate of Employee
Certificate:
The second step is to obtain the Service certification letter.
Where the applicant is doing the job. This is the necessary document.
In case of unemployed (having no job) the
THIRD STEP:
The third step is to obtaining of different documents for verification of the person. These
include the document according to the Types of Accounts.

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Every type of account contain different document. But attested copy of Valid CNIC and
attested copy of service card are the basic documents are that is necessary for opening
every type (such as personal, business, sole proprietor) of account.
After receiving the necessary required documents the next step is the Filling of the
Account Opening Form.
The Account Opening Form of Allied bank includes this form/ sheets as follows with
attachment arrangement:
 Specimen Signature Card: it is being filled at the last but it is attach at the front of
the Account opening form.
 Checklist of detail document
 Account Opening From Account Detail
 Customer profile:
 CDD/ KYC form
 Allied cash + shop visa Debit/ATM Card Application Form

Specimen Signature Card (SSC):


When whole the form of Account opening is fill then it is fill (usually). This card is
attached at the front in Account opening form/document it contains following data:
• Title of Account
• Account number
• Operating instructions
• Special instructions
• Name
• Signature
It should be remember that all signature should be same and matched with the signature of
valid identity card.
Title of Account consists of the name of the account holder.
Account number is given from computer and note on the account opening register it is
done at the last of the process and then fill account # in every require place.
Checklist of detail document:
It contains the different items of the document that is obtain form the customer under
Prudential Regulation.
And it is attached with the customer profile in account opening form.
It should be checked carefully.
Check those items of document that is obtaining from the customer/account holder.
Fro example:
These items are usually checked:
• Attested copy of valid CNIC
• Photograph/ CNIC of the account holder(s) by Gazetted officer/City Nazim
• Attested copy of Service Card, Salary certificate or employee certificate
• Etc

Account Opening Form Detail:


Account opening form contains these data:
a) Account Detail
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• The type of account which any person want to be open, he has to select that.
• Nature of the Account,
• Currency (in which want to operate).

b) Additional information (in case of Personal Account)


c) Additional information (in case of Business Account)
d) Other instructions
e) Declaration (it contains signature of applicant)
f) For bank use only (it contains Account number, Marketing etc)
g) Terms and Conditions
h) Acknowledgement
Customer profile:
It contains the personal information about the customer. The applicant can be fill the
applicant himself.
It usually includes:
• Currency (in which want to operate).
• Particular of deposits. (Period for operation).
• Complete address.
• Telephone number
• Name.
• Date of birth.
• Nationality etc.
• Then signatures of the account holders and the bankers and manager.
• Signature of the introducer, his account number and address etc.
CDD/ KYC form:
It contains:
Title of account
Different verifications
Sources of income
Risk profile
CDD/KYC category
Account number
Allied cash + shop visa Debit/ATM Card Application Form:
It contains the information about visa Debit card ATM card and account type information
etc.
Completion of Account Opening Form:
It is checked carefully that account opening form is complete in all respects and signed by the
account holder and introducer.

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Stamps in Required in Account opening forms:


There are three stamps put on the Account opening form.
• Attested stamp
• Signature verify stamp
• Foto admitted if Foto account
Issuance of check book and ATM card:
After the completion of filling of Account opening form the check book is issued and ATM cards
if applicant want ATM card (issuance of ATM card taking more time than check book
issuance).The issuance of check book and issuance of ATM card is in account opening
department. The cheque book is issued after 2 or 3 days from opening process of the account. The
Account No. is stamped by the rubber stamp on each Cheque. Then it is given to the
applicant/account holder.
When all Cheque books are issued to the customers then these are recorded in the CD
Book or PLS saving book. All Cheque books are recorded with their a/c number and name of the
account holder.
These all work or activities is done in the Account opening Department.

REMITTANCE:

“Transferring of funds from one place to another place through instruments”


A central Account named as “Pak account” is used by all branches of ABL for dealing with each
other.
All remittances made by the different branches is controlled by the Pak Account.
Pak Account:
Pak account is minted all the accounts of the branches that’s dealing with each other. And every
branch that is listed in the Pak account is given a specific code through which every branch
entered in Pak account and dealing with other branches.
Usually two types of remittance are used:
• Outward remittance
• Inward Remittance

Remittance outward:
Suppose, Mr. A comes to the PAF ABL branch and ask to make Demand draft of the amount of
Rs. 75,000/- on the name of beneficiary whose Bank is the ABL Islamabad branch.
Now PAF branch (my branch) receives the amount from Mr. A, and prepare the Demand draft of
RS. 75,000/- and then send it to the ABL Islamabad branch. And PAF branch will inform to the
Central Office that it has sent a Demand Draft of amount Rs. 75,000/- to the ABL Islamabad
branch.
PAF ABL branch (sender of DD) will be debited with the amount of Rs. 75,000
And
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Islamabad branch (receiver of DD) will be credited with the amount of Rs.75, 000 in Pak account
This is the procedure of Remittances Outward in Pak account

Inward Remittance:
When the PAF branch receives the Demand draft from the ABL Islamabad Branch then this is
called the inward Remittance.
Then the sender branch that is ABL Islamabad branch will be debited in the Pak account.
And the receiver branch will be credited in pak account...

The remittance can be made through the following mode of transference.


The remittance can be made through the following mode of transference.
• Demand Draft
• Pay order
• Inter branch transaction or online banking transaction

Demand Draft or DD:


Demand draft is the type of the cheque or written order which is drawn on the customer demand.
It s drawn by a branch of a bank upon the branch of same bank or other banks it is the order to
pay certain sum of money or to the order of specified person.
In BL bank. Demand draft is issued by the ABL other branches of the ABL, or other banks on the
demand of customer. Before issuing the DD, it must be carefully check that demand is in order.
Parties Involved in DD
o Purchaser
o Issuing Branch
o Drawee Branch
o Payee
Procedure for making/ issuance Demand Draft:
First of all a form called “Fund Transfer Form” has to be filled. It is compulsory to fill the
entire mandatory places, such as currency of instrument, type of remittance
Particulars of applicant, applicant signature, beneficiary details etc.
And at the last the authorized officer puts his/her signature on DD form and three stamps are
pasted on it;
o Transfer stamp
o Signature verified stamp
o Crossing check stamp ( in case if half payment is made through cash form, then a check is
fill up for this and attached with the DD form).
And at the last the operational manager scrutinizes on this and then for keeping it in bank record
all the records are transferred into the computer

Charges for issuance DDs,


 Rs.150/- is charged for account holder through his account or 0.10% Min
 Rs 500/- through cash ( A/c holder and walk-in-customer) or 0.20% Min
Cancellation charges:
Rs 300/- (flat)
Issuance of Duplicate DD charges:
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Rs 250/- charged for account holder through his account


Rs 500/- through cash (A/c holder and walk-in-customer)
Filling/ issuance of Pay order:
Pay order is used to transfer money within city. It is very safe and convenient method to sending
money from one place to another place.

Pay order:
“Pay order is used to transfer money within city”
Pay order and DD are the same instrument but the difference is that the DD is used for
transferring the fund to out of the city while the pay order is used to transferring of fund within
the city,
The PAF branch also issue the Pay order that is written authorization for payment.
Pay Order involves the following parties:
 Purchaser May be a person, firm, company or local authority.
 Issuing/paying branch is one which issues/pays on presentation.
 Payee is a person named there in.

Procedure:
First of all the Application form is given to the customer to fill. And then two signatures are
taken on the form one for request and other for receiving the instrument. All the particulars of
application form are checked and bank commission charges and withholding tax is written on the
top of the application form. PO can be made through Check and Cash
Payment received through Cheque:
The customer can give cheque for total amount of instrument plus bank charges if the he is
maintained his account with the branch. Cheque and application form is then given to the officer
of Cash Department for the payment of cheque. After proper inspection, Officer of Cash
Department posts the cheque and signs the application form in token of payment received.
Payment received in the form of Cash:
If the customer wants to pay cash, then cash is deposited by the customer along with the bank
charges and withholding tax.
Application form is then given to the Remittances Incharge for issuance of instrument. He writes
all the particulars of the application form in the system and allots a number to the instrument.
Two authorized officers of the branch sign it. Instrument is then given to the customer. When
instrument is presented for payment, canceled by the Remittances Incharge after proper inquiry.
In case of PO, remitter account is credited and PO A/C of branch is debited. At presentation,
Beneficiary is debited and PO A/C of branch is credited
Charges for issuance of pay order:
 Rs.75/- is charged for account holder through his account
 Rs 500/- through cash ( A/c holder and walk-in-customer)
Cancellation charges:
Rs 150/- charged for account holder through his account
Rs 500/- through cash (A/c holder and walk-in-customer)
Issuance of Duplicate DD charges:
Rs 200/- charged for account holder through his account
Rs 500/- through cash (A/c holder and walk-in-customer)

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After completion the issuance of DD/PO these are recorded in the registers:
Demand Draft/PO Issue Register:
After filling and making of DD/PO , for keeping manual record these are recorded in the DD/PO
issue register and this register contains the following details:
 Date
 Draft Number
 Name of purchaser
 Favoring
 Amount
 Amount of Exchange

Demand Draft/PO Payable Register:


When a DD/PO is paid and received then an entry is made in the Demand draft payable register.
This register has the following particulars.
 Date on which it is received
 Draft number and its date
 Favoring
 Amount
 Paid on

CLEARING DEPARTMENT:

Clearing:
The word clearing is derived from the word “CLEAR” and it can be defined as:
“ A system by which banks exchange Cheques and other Negotiable instruments drawn on each
other within a specified area and thereby secure payments through the Clearing House at a
specified time in a efficient way”
Or in short:
Any bank is doing clearing that makes the uses of the central clearing house located in a certain
specific location for the transfer of credits and cheques between banks
Clearing House:
An Office where different banks exchanges cheque and settle accounts.

There are two banks involved in clearing process, one is the collector bank and other one is the
payee bank. And a body called NIFT is also involved.
Collector Bank:
Collects or receives the cheque of the other bank given to their customer
Payee Bank:
Receives the cheques and pays it after having all necessary requirements
NIFT:
National institute of Facilitation Technologies (Pvt.).Ltd

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An institution called NIFT is the bridge between both the bank and all transactions between two
banks are done through the help of NIFT.
It modernize the payment system and it’s process in Pakistan started with the implementation of
first Automed Clearing house (ACH) in Karachi in 1996.

Stamps Required:
♦ Clearing stamp of next date on front of bill
♦ Crossing stamps( bank name stamp)
♦ Clearing stamp on front of deposit slip

Types of Clearing:
There are two types of clearing which are:
 Out word Clearing
 Inward Clearing

Out Award Clearing:


When the ABL give the payment to the other bank through clearing this is called outward
clearing for ABL bank. And this is recorded in the When through clearing payment is given to the
other bank than this entry will be recorded in outward clearing register.
Outward clearing registers:
When through clearing payment is given to the other bank than this entry will be recorded in
outward clearing register.
The register contains the following information:
• From whom it is received
• Drawer
• Drawee
• Cheque number
• Account number
• Amount
INWARD CLEARING:
When through clearing payment is given to the other bank than this entry will be recorded in
outward clearing register. This is out ward clearing register.
Inward Clearing Register:
When payment is received from the other bank than entry is recorded in inward clearing register.
The register contain following information:
• Serial number
• Date
• Amount
• Remarks

Process of Clearing (Inward / Outward):

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If the cheque receives or sends by one bank to the other bank then the process of clearing is start.
For example if account holder of ABL receives the cheque of other bank like City Bank, UBL etc,
and he submits it in ABL branch to be cashed. At the same time the clearing process starts.
Here the local cheques that are drawn on ABL are received on a counter along with paying slips
which should be properly and dully filled. Then counter folio putting stamps for cheques number
received for collection for ABL. And it is duly signed by officer.
These cheques are scrutinized and cheques for local clearing are separated from OBC. These are
then entered in clearing register and cheques for collection are entered in OBC register and
handed over the Bills Department for collection.
Clearing officer checks and verifies title of all the cheques, date, signature and then every
particulars of the cheque. Hence these, Cheques are scrutinized properly and paying slips are
separated from cheques. Cheques of each bank are sorted and arranged branch wise. and then
Debit and credit vouchers are made for clearance purpose. And these vouchers are attached with
every cheque after filling the amount, Cheque #, and Name of bank of that cheque that is going
to being cleared. And at the Top the Today date and Our Branch name (PAFABL) is written
by clearance officer. And then three stamps are affixed on the cheque these stamps are:
 Today Date stamp front of the cheque
 Crossing stamp (bank name stamp of clearing) on the front of the Cheque
 Payee account credit stamp on the back
Pass these cheques along with vouchers/advices, all the cheques are entered into the clearing
system of the bank. Then Print out of the clearing is taken and details are attached with the
cheques of each bank. Details of these banks are then entered into the clearing schedule
containing number of cheques presented and their total amount against the name of each bank.
Then total number of cheques presented to all banks and their total amount is written on the foot
of that schedule, which is tallied with the clearing register.

First clearing sent:


Next morning, these cheques along with voucher are delivered to the respective banks in clearing
house of NIFT between 9:00 to 9:30AM. In the same manner, other banks present their clearing
drawn on ABL. Total number of cheques and their amount delivered to other banks and received
from them are written on the Clearing House schedule branch for their payment. After proper
scrutiny of cheques, verification of signatures and confirmation of balance in the account, the
Officer Cash Department pays these cheques by canceling and posting them in the system.
Some important concepts should keep in mind while doing the job of clearing of cheque:

♦ Date: Cheques should not be post dated or out of date.


♦ Figures: Amount in words and figures should match.
♦ Signature: Drawers signature must be clear.
♦ Payee’s Name: Payee’s name should be written, and endorsement should be as per the
beneficiary of the cheques
♦ Intercity: Cheques must not be of other cities. Intercity clearing cheques for consumer
departments are not entertained
♦ There should be no over writing, every thing is written clearly.
Cheque Return:
Cheque can be returned and it cannot be passed due to these reasons:
 Fund insufficient/Insufficient balance
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 Mismatching figures
 Signature differ
 Filling incomplete
 Similar many other reasons may be.

If any cheque is not passed due to insufficient balance, mismatching figures, filling incomplete or
any other reason, Officer Cash Department returns the same cheques by attaching cheques return
memo containing reason for return. This cheque is entered into the cheques returned register and
bank charges are deducted according to the schedule of charges.
Second Clearing:
Second clearing in ABL is at 2:30PM to check the destiny of the cheques presented to other banks
in the morning. If any cheque is to return, that is delivered to the same bank in second clearing.
In the same manner, if any cheques presented by ABL Bank in first clearing are returned, they
receive it and once again give schedule of clearing figure to the Officer Clearing House NIFT
containing number of cheques and their amount delivered and received unpaid.

Intercity:
It is the same as clearing but the difference is that the branch transfer or receives the cheque etc to
or by the other city branch or banks. And this includes that branches that are of local station for
that bank (sender and receiver bank).

For ABL these are the local cities that’s used in intercity.
• Islamabad
• Karachi
• Pindi
• Peshawar
• Multan
Process of intercity Clearing:
Almost the intercity Process is the same as clearing with little bit difference. E.g. for Intercity
Clearing a stamp of intercity instead of clearing posted on face of bill, then amount, account
number and city name is entered in a separate register and deposit slip is attached in a specific
file. And a stamp is posted on back of bill. A separate slip is filled for every city given by NIFT.
In the specified envelope is used for every city given by NIFT with printed name of city.
One advice is made for him. Three copies are prepared for each advice. One advice goes to CSO
for record. One goes for cashier and one goes to the clearing department for entry in the
computer.
When we release the intercity/clearing then we will Debited the advice and cheque will credited.
And when we lodge the intercity/clearing then advice will be credited and cheque will be debited.

OBC (out ward bill for collection):


It is the same as clearing and intercity but the difference is that the branch transfer or receives the
cheque of the banks that are out of station.
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The out of station cities for the ABL are:


• Okara branch of askari bank
• MCB changa manga branch
• MCB bransh thata
• Ubl shadi wall branch gujrat
OBC COLLECTION PROCEDURE:

It is mention on the cheque that the person To Whom It May Concern can cash it from the certain
branch of the bank in favor of which it’s drawn. The customer presents the cheque to his branch,
which sends a document called “OBC” to the bank that has to make the payment. The clearing
department of the receiving bank follows a prescribed
Procedure and credits the amount to sending bank through a central account maintained by each
bank with SBP. ABL sends the cheque to its own branch if available for collection from the
payer’s banks otherwise the OBC is directly sent to other bank.
MAINTAINING REGISTER for OBC’S:

We have a register in which we have the serial no for OBC with other details like amount, date,
sending and receiving branches’ codes. Every OBC is entered in the register on daily basis. If
OBC is not cleared due to what ever fault, we take it back as a return but after that we call the
concerned person and we also write name of person.
OBC are of two types:
IBC or inter bank collection:
When the cheque received by the bank for clearing this is calls IBC.

OBC or outward bank collection:


When the cheque is send by Allied bank limited to the other bank for clearance this is OBC for
Allied bank limited.

Calling and sorting Department:

In this department the work of calling is done and then sorting is done. Calling is related with
customer dealing. Bankers call those persons who open the various accounts with ABL and
bankers confirm from those that they will open the account or not. The bankers call it’s trust
worthy and regular customers and telling them about the new products and services and tend
them to towards the purchases of new services. And also call the customers when the sensitive
issues are being deal.
For Example:
For example, MR. A is the customer of the ABL, and ABL has to allot the pin number of the
ATMs card of MR. A then the banker calls MR. A and get every information about its
account. After proper and complete verification the ABL will allot the pin number. If ABL
finds any kind of fraud then bank will never allot the number, and then start the verification
again.

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Calling also includes the process in which bankers tell the customer that their ATM’s card are
prepare please take your ATM’s cards from Banks. Thus calling is the process of giving
information to the customer particularly information about the new products and services.
Sorting:
“Sorting is process of arrangement”
Calling and sorting is basically related to the matching or teling of whole day work at the end
of the working day”
Process:
Sorting is the process of arrangements of account slips/cheque etc are arrange in the
increasing order. All vouchers are collected first, and then sort them according to the accounts
for example the current account voucher, PLS saving Account vouchers, staff members
vouchers etc they all are separate first and then all vouchers of each category are arrange
according to the increasing order of their account numbers.
Calling and Sorting also includes the checking of Bank history, Customers Credit History,
study of loan and financing that are given to the creditors. It can be say that calling and
sorting is the revision process and complete observation process.

Work done by me during internship:

I have done six weeks internship form allied bank PAF Branch. And during my internship I was
work in different departments and I had been assigning with different tasks according to the
departments.
During my internship I have learn many things which I found very interesting.
One the first week, the branch Manager told me about the employees of the Bank and handover
me to the Madam Mubashra and this madam tell me some basic information about the bank and
the first week, I did work in the Account Opening Department.
Account Opening is the function is to opens the accounts.

First day Madam Mubashra Supervisor of the bank gave me some basic information about the
bank. She told me about the departments of the bank and some other basic information about the
bank, cheque, records, deposits slips, current slip etc.
Second day she told me that now I have to start work in the different departments. I started my
internship from account opening department.
Account Opening Department:
I have started my internship from Account Opening department. Second day of my internship the
Customer service officer Madam Maira informed me and taught me that how to open the
accounts.
She told me about the different Accounts, such as Current Account, Saving Account, joint
Account, Business Account.
Third day I have assigned the work of Opening the Accounts, and I enjoyed this work a lot. I had
opened the different accounts but I observed during my 6 one week in Account Opening
Departments that the most clients come to open the personal account and most of them are PAF

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servants. The most of the working is conducted in this department and this department having a
lot of burden of work.

Tasks Assigned to me in Account Opening Department:


♦ To open the Account
♦ Filling of Account opening Form
♦ Filling of check list
♦ Filling of KYC form
♦ Taken sign on Specimen Signature card
♦ Allot the Account number
♦ Enter the Account number into the relevant Account Opening Register
♦ Calling the clients/customers if any omission or mistake found in the Account
♦ Issuance of Cheque book.
♦ Calling them after receiving the ATM card of the customers/issuance of ATM card
♦ Telling them the remaining balance and other account information of the account
♦ Filling of different slips
♦ Closing the Account

Process Detail:
How to Open the Account?
When persons came for opening the Account I had verified the person first and I have received
copy of identity card after seeing the original identity card and job/service certificates in case of
servant, student identity card in case of student, property certificate, and then I was starting the
filling of Account opening form, I had filled the Account opening form specifications such as,
 The type of account which any person want to be open, he has to select that.
 Nature of account whether individual or proprietorship or other.
 Currency (in which want to operate).
 Particular of deposits. (Period for operation).
 Complete address of the person who want to open the account (applicant)
 Complete address of the next of kin of the applicant
 Telephone number of the applicant and next of kin number
 Nature of business etc.
 Detail of other accounts.
 Complete Personal information. which is required for Account opening form such
as;
 Name of the applicant, his father/husband, mother/wife name, and name of his
next of kin
 Date of birth.
 Nationality etc.
 Then signatures of the account holders and the bankers and manager.

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 Signature of the introducer, his account number and addressed


KYC form:
After filling the form of account opening I had filled the KYC form (known your customer).
.
Taking sign on Specimen Signature Card:
When this form is filled then signature of the person who want to open the account are to be taken
on the Specimen Signature Card. And I had checked the signature carefully; this signature must
be matched with the identity card signature. Then it is recorded in the computer.
Specimen Signature Card is available in Annexes.

Allot the Account number :


After filling of all required documents I had allot the Account number to the new opened account
which is being processed till now.
Enter the Account number into the relevant Account Opening Register:
After allotting the account #, I put it in all the spaces of account opening form, SSC card etc and
then enter this account # in the relevant Account opening register, for example the account # of
joint account will be enter in the joint Account Opening Register.

Calling the clients/customers if any omission or mistake found in the Account:


I did all the work of opening account very carefully, but if there found any mistake or signature
differ problem or any type of mistake or omission then I had called those customers and rectify
the errors.
Issuance of Cheque book:
After the completion of all the formalities of Account opening form the customer receives the
letter of thanks. Then. He will get the cheque book within a week and my job was to receiving the
cheque book and I had to verify the customer signature and I had to issue the cheque book
manually.
There is a requisition slip with every cheque book for the purpose of re issuance of cheque book
when all the leaves of first cheque book are being used. The following information is printed on
the front of cheque book.
 Title of Account
 Account number of customer
 The stamp of ABL
And it also contains the signature of the authorized person and this all information is printed
on every page of cheque book.

Calling them after receiving the ATM card of the customers/ issuance of ATM:
After some days of opening account the ATMs are issued by the bank. My job was to receive the
ATMs card of applicants and then calling them.
I had called all the ATMs clients and told them to bring their ATMs card it is issued.
I had issued the ATMs card and received the sign on the ATM record register and sign of those
customers who had received their ATMs card by me.

Telling them the remaining balance and other account information of the account:
Here I was assigned the work of telling the remaining balance, payments etc I used to tell to the
customer about their receipts, payments, charges and remaining balance etc and I told these

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Account information only those persons who are the real account holder of that account I never
told these information to any other persons who asking these even to his relative one.
I had asked the account number and then after opening the account on pc I used to ask the title of
the account and after proper verification I used to tell the Account information to the real account
holder. After telling I also record it on the book that I opened and told this account information to
its account holder.
Filling of different Slips:
Here I had assigned the work of filling of different slips of the customers who didn’t know how to
fill the slip.
I had filled different slips but I mostly I had filled these slips that’s are
 Current Account Slip
 PLS Saving Account deposit Slip
How to fill the Current Account Slip:
This slip is used for current account only for withdrawing the money from current account. It is
very easy to fill; I had filled the following information in this slip
 Title of Account (name of Account holder) in two spaces
 Phone # of the Account holder
 Account # in two places
 Amount in figures as well as in digits in two places which the Account holder wanted to
take out.
 And word “Cash” in the particulars.
 And then getting the sign of the Account holder.

PLS Saving Account deposit Slip:


I also had used to fill these slips and PLS saving account slips are used incase of saving Account
and it is used for depositing the cash or cheque etc. this slip is just like a current account slip
with the same filling only with the difference in the particulars filling and it include the stamp
when I had received the cheque for depositing then I had entered the cheque # of the bank that
and name of those bank from which the amount is being transferring/ adding into the ABL
account of the account holder..
(Available in annexes)

Remittance:
“Transfer of fund from one place to the other within the city or out of the city”
It is the one of the major function of banking sector.
I worked in this department four days i.e. form 24th May to 28th May.
Tasks Assigned to me in Remittance Department:
Madam Mubashra is the officer of this department. During four days I have worked in two
Assignments in this department.
 Issuance of Demand Draft (DD)
 Demand Draft Issue Register
 Demand Draft Issue Payable Register:
 Filling/ issuance of Pay order
 Online inter branch transaction
 Keep record of all issued and paid pay order
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Process:
Demand draft (DD): The first and the most popular way of remittance is Demand Draft.
The DD has the following information which I had filled during issuing the DD:
A bank Demand draft has following particulars:
 Payee’s name
 Date of issue
 Amount in words and figures
 Drawee Branch’s name and code
 Address
 Serial number
(Note: Complete procedure is given above.)

Demand Draft Issue Register:


After filling and making of DD I had to record this on the DD issue register and this register have
the following details:
 Date
 Draft Number
 Name of purchaser
 Favoring
 Amount
 Amount of Exchange

Demand Draft Issue Payable Register:


When a DD is paid and received then an entry is made in the Demand draft payable register. This
register has the following particulars.
 Date on which it is received
 Draft number and its date
 Favoring
 Amount
 Paid on
Filling/ issuance of Pay order:
Pay order is used to transfer money within city. It is very safe and convenient method to sending
money from one place to another place.

Pay Order involves the following parties:


 Purchaser May be a person, firm, company or local authority.
 Issuing/paying branch is one which issues/pays on presentation.
 Payee is a person named there in.
Process:
I issue the pay order by making the pay order on the receipt and this receipt is Issue and payable
by other bank. Here I had to make the record of all issued and paid pay orders.
As pay order is in the written form thus certain document filled by the client/customer and by
me..
Detail of the procedure is already described above (In department’s activities/operation)

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VIRTUAL UNIVERSITY OF PAKISTAN
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Online inter branch transaction:


“Online Transferring of funds from one place to another place “
This is also the very fast, convenient and popular way of transferring of funds from one place to
another place.
In this department I mostly issue/prepare the online inter branch slip.

Online inter branch transaction Slip:


This slip is used to transfer fund from one place to other far place. I also filled these slips as well
as above slips. And this slip contains the following information:
 Applicant name,
 Applicant’s NIC No., address and Tel No.
 Remote Branch name and code,
 Remote Account title, A/C No,
 Amount in Rs as well as in words
 Signature of the Applicant etc
And after filling, I received the identity card copy and attach it with the online slip. And put a
stamp on it.

Clearing Department:
Clearance means to clear the cheque of other branches:
Tasks Assigned to me in Clearing Department:
In this department I had done these works.
 Sorting of cheques
 Made vouchers
 Stamping on Cheques
 Recorded all inward clearing cheques/vouchers Inward Clearing Register
 Recorded all outward cheques/vouchers in clearing outward Clearing Register
 Returned cheque record
 Recorded the reason of returning and attached the reason Slip with cheque
Process:
Firstly I had to sort out all the cheques branch wise and then I used to scrutinize the each cheque
the cheque should be free of error that’s are going into clearing, all particulars should filled
properly, the sign should be matched the amounts in figures and words should be matched, and
stamp of clearing of other bank should be put on all cheques if there is any mistake exist in the
cheques then those cheque will be returned. And I had filled the returning reason slip and then
attached this slip with the Cheque and then I had to record this in the clearing returned register.
And those cheque that’s free from errors I had selected them and then made their vouchers and
advices and stamped them and then recorded all the vouchers and advices in their respective
register. i.e. inward clearing in inward clearing register and out ward clearing cheques in out ward
clearing register.
(Note: This is the Short process its detail Process is given above)

Intercity:

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VIRTUAL UNIVERSITY OF PAKISTAN
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Intercity is the same as of Clearing but the difference is that clearing is dealing those cheques of
other branches that’s are come from with in the city and intercity is used for out side city cheques
but local cheques (NIFT having)
Tasks Assigned to me in Clearing Department:
In this department I had done these works.
 Sorting of cheques
 Made vouchers
 Stamping on Cheques
 Recorded all inward intercity cheques/vouchers Inward Intercity Register
 Recorded all outward intercity cheques/vouchers in clearing outward Intercity Register
 Returned cheque record
 Recorded the reason of returning and attached the reason Slip with cheque
Process of intercity:
The detail process is given above.
OBC Department:
I had also worked in this department and the detail is given above.
Calling And Sorting Department:
Detail of this department is given above.

CHAPTER- 4
STRUCTURE
AND
FUNCTION
OF
FINANCE
DEPARTMENT

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VIRTUAL UNIVERSITY OF PAKISTAN
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Structure of the finance department:


Departmental Hierarchy

Finance director

Account officer

Assistance Account officer

Number of Employees in finance department:


There are 3 (three) prudent and efficient employees work in the finance department in the PAF
branch.
Finance and Accounting operations:
The bank finance operations are usually done by the finance group along with the help of
subordinated employees. And the main operations that are done by finance group are:
Planning and MIS:
In this head the following operations are takes into place:
♦ Planning (finance related)
♦ Translation of operational and financial data into strategic information. For an effective
and efficient decision making (MIS).
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VIRTUAL UNIVERSITY OF PAKISTAN
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Financial and Regulatory Reporting:


Finance Group provides timely, relevant and reliable information to the shareholders, regulators
and other stakeholders while following the statutory requirements and international best practices.
Taxation:
Taxation management is also the main operation in the finance and accounting departments.
Finance Group manages the Bank wide tax matters and activities to bring tax efficiency while
complying with the tax laws.

Accounting Process:
ABL uses the Appropriate Accounting policies to performing the Accounting Operations. And
these accounting policies have been consistently applied in preparation of financial statements.
Accounting estimates are based on reasonable and prudent judgment and International
Accounting Standards have been followed in preparation of financial statements and any
departure therefrom ahs been adequately disclosed in the Annual Accounts.

Function of Finance Department:


Accounting System of the organization:
 Fully computer base accounting system
 Double entry system is used which is very reliable
 Generation of funds:
 Lending the loans to the customer
 Lending to financial institution.

Finance System of the organization:


The finance system of the organization is based on two main factors that are:

 Borrowing
 Lending

Use of Electronic data:


The bank is using the Uni bank software for entering data;
That is very reliable.

Sources of funds:
The sources of the branch where I have done the internship are mainly through:
 Depositing
 Receiving interest on lending money

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 Borrowing from state bank of Pakistan


 Advances from other financial institutions
 General Banking income.

Allocation of funds:
Banks allocates the fund usually to these parties:
 Lending to financial institution
 Lending to people such as loan,

CHAPTER- 5

CRITICAL
ANALYSIS

FINANCIAL ANALYASIS
AND
FUTURE ASPECT

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VIRTUAL UNIVERSITY OF PAKISTAN
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RATIO ANALYSIS

LIQUIDITY RATIOS:

Current Ratio
Acid Test Ratio
Sales to Working Capital
Working capital
LEVERAGE RATIOS:
Time Interest Earned
Debt Ratio
Equity or proprietary ratio
Debt / Equity Ratio
Debt to Tangible Net worth Ratio
Total Capitalization Ratio
Fixed Asset Ratio / Equity Ratio
Long term Assets versus Long term Debt
PROFITIBILITY RATIOS:
Net Profit Margin
Return on Assets
DuPont Return on Assets
Operating Income Margin
Operating Assets Turnover
Return on Operating Assets
Sales to Fixed Assets
Return on Investment (ROI)
Return on Total Equity
Return on equity Capital
Gross Profit Margin
MARKET RATIOS:
Earning per Share
Dividend yield
Book value per share
Dividend Yield
Book Value per Share
ACTIVITY RATIOS:
Total Asset turn
Advances to deposit ratio

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VIRTUAL UNIVERSITY OF PAKISTAN
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LIQUIDITY
RATIOS

CURRENT RATIO:
CURRENT RATIO = CURRENT ASSETS/CURRENT LIABILITIES
Rupee in ‘000’

2009 2008 2007

CURRENT ASSETS
337770949 319968482 292264845
CURRENT
LIABILITIES 239473764 221043121 210262478

C.A/C.L 1.41 1.45 1.39

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VIRTUAL UNIVERSITY OF PAKISTAN
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1.46

1.44

1.42
RATE
1.4
C.A/C.L
1.38

1.36
2009 2008 2007
YEARS

I
Interpretation and Trend:
This ratios is indicates the Liquidity (ability of a bank to meet short tern obligation) of the
business by comparing the current assets to current liabilities. The higher current ratio indicates
the better liquid position.
As, the current ratio of 2008 and 2009 is become higher as compare to 2007 it’s a good sign of
liquidity it’s mean the bank become the more liquid, and more able to meet the short term
obligations yet the ratio of 2009 is little bit less as compare to 2008 but the difference is not so
larger it’s a small difference so, it’s not an alarming situation because yet the ratio is greater than
1, which is a good sign and standard current ration is 2:1.

ACID TEST RATIO:


=LIQUID ASSETS/CURRENT LIABILITIES
Rupee in ‘000’

2009 2008 2007

LIQUID ASSETS
56222856 42957569 33641996
CURRENT
LIABILITIES
239473764 221043121 210262478

L.A/C.L 0.23 0.19 0.16

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0.25
0.2

0.15
RATE
0.1
L.A/C.L
0.05
0
2009 2008 2007
YEARS

Interpretation and Trend:


This ratio also measures the liquidity position of the business. This ratio indicates the relation
ship between the liquid Assets to current liabilities.
The higher the ratio the better it is as the ratio increases from 2007 to 2009 so it indicates the
good liquid position.

SALES TO WORKING CAPITAL RATIO:

=TOTAL SALES/WORKING CAPITAL


Rupee in ‘000’

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VIRTUAL UNIVERSITY OF PAKISTAN
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2009 2008 2007

SALES
41121503 30570540 21,201,422

WORKING
CAPITAL 98297185 98925361 82002367

SALES/W.C 0.42 0.30 0.26

0.45
0.4
0.35
0.3
0.25
RATE 0.2
0.15 sales/W.c
0.1
0.05
0
2009 2008 2007

YEARS

Interpretation and Trend:


This ratio indicates the relationship between the sales to working capital.
This ratio is increasing it is a good sign for the business as the sale is increasing with increasing
this ratios

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VIRTUAL UNIVERSITY OF PAKISTAN
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WORKING CAPITAL:
=CURRENT ASSETS – CURRENT LIABILITIES

Rupee in ‘000’

2009 2008 2007

CURRENT ASSETS
337770949 319968482 292264845
CURRENT
LIABILITIES 239473764 221043121 210262478

CA-CL 98297185 98925361 82002367

100000000

80000000

60000000
RATE
40000000
CA-CL
20000000

0
2009 2008 2007
YEARS

INTERPRETATION:
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VIRTUAL UNIVERSITY OF PAKISTAN
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WORKING CAPITAL compares the current assets with the current liabilities it indicates that
either the firm/bank is in a condition that it can pay it’s liabilities when due. Higher and
appropriate working capital is used to face and get over the contingencies and uncertainties.
As, the working capital is increasing it is a good for bank.

LEVERAGE
RATIOS:

Time interest earned Ratio:


=EBIT/Total Interest expense

Rupee in ‘000

2009 2008 2007

EBIT 10,536,120 6,120,940 5,956,029


Total interest Expense
22,421,694 17,272,724 10,086,420

0.47 0.35 0.59

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VIRTUAL UNIVERSITY OF PAKISTAN
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Time Interest Earned Ratio

0.6
0.5
0.4
RATE 0.3
0.2 tim e interest earne d
0.1
0
2009 2008 2007
YEARS

INTERPRETATION:

This ratio serves as one measure of the firm’s ability to meet its interest payments and thus avoid
bankruptcy. In general, higher the ratio, the greater the likelihood that the company could cover
its interest payments without difficulty. In 2007 the bank Time interest earned Ratio is 0.59 times
in 2008 the ratios decreases and reaches it 0.35 times and 2009 ratios increases

DEBT RATIO:

=Total Debt/total assets

2009 2008 2007

Total Debt 388,414,353 344,340,055 299,726,393

Total Assets 418,374,331 366,695,669 319,606,554

0.93 0.94 0.93

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VIRTUAL UNIVERSITY OF PAKISTAN
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Debt Ratio

0.94
0.938
0.936
0.934
RATE 0.932
0.93 debt ratio
0.928
0.926
0.924
2009 2008 2007
YEARS

Interpretation and Trend:

It indicates percentage of total assets financed by debt. The ratio under 1 means a majority
of assets are financed through equity and the ratios is above 1 indicates the assets are financed
through debt. A bank ratio in 2007 is 0.93 and in 2008 is 0.94 and in 2009 is 0.93 which shows
that the assets are financed through equity rather then debt.

PROPRIETORY OR EQUITY RATIO:

=SHARE HOLDER FUND / TOTAL ASSET

Rupee in ‘000’

2009 2008 2007

SHARE HOLDER 29,959,978 22,355,614 19,880,161


FUND

T.ASSET 418,374,331 366,695,669 319,606,554

SHARE HOLDER 0.072 or 7.2% 0.061 or 6.09% 0.063 or 6.3%


FUND / T.ASSET
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VIRTUAL UNIVERSITY OF PAKISTAN
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Proprietory Of Equity Ratio

7.20%
7.00%
6.80%
6.60%
6.40%
RATE
6.20%
6.00% propriet equity
5.80%
5.60%
5.40%
2009 2008 2007
YEARS

Interpretation and Trend:

This ratio indicates that how much total assets are being financed by shareholders fund... Higher
the ratio, better it is, because the low equity ratio reveals the extensive use of leverage
(borrowing) that is not good for firm/bank. Here the ratio is increasing from 6.3% to 7.2% which
is the good for investor point of view as financing of total assets by shareholders are increasing.

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VIRTUAL UNIVERSITY OF PAKISTAN
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DEBT TO EQUITY RATIO:


=Total Debt to Equity Ratio:
Rupee in ‘000’

2009 2008 2007

Total Debt 388,414,353 344,340,055 300,231,481

Equity
25,891,278 20,805,117 18,408,391

Total Debt/ Total


15 16.6 16.3
Equity

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VIRTUAL UNIVERSITY OF PAKISTAN
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Total Debt To Equity Ratio

17
16.5
16
RATE 15.5
15 total debt to equity
14.5
14
2009 2008 2007
YEARS

Interpretation and Trend:

Creditors would generally like this ratio to be low. The lower the ratio, the higher the level of
firm’s that is being provided by shareholders. This ratio also tells as about capital structure, what
portion of debt in the bank overall capital. In 2007 this ratio is 16.3 and in 2008 the ratio is 16.6
and in 2009 this ratios decreases which is 15 it is good for bank.

DEBT TO TANGIBLE NET WORTH RATIO:


=DEBT/TANGIBLE NET WORTH
Where, TANGIBLE NET WORTH= Total assets-liabilities-intangible assets.

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VIRTUAL UNIVERSITY OF PAKISTAN
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2009 2008 2007

Total Debt 388,414,353 344,340,055 300,231,481

TANGIBLE NET 29,804,437 22,248,708 19,840,234


WORTH
Total Debt/
T.N.WORTH 13 15.4 15.1

DEBT TO TANGIBLE NET WORTH

15.5
15
14.5
14
RATE 13.5
13 DEBT/T.TANGIBLE NETWORTH
12.5
12
11.5
2009 2008 2007
YEARS

Interpretation and Trend:

The tangible net worth in 2009 is 15.1 in 2008 15.4 and in 2009 it decrease to 13. it is a good sign
as Total debt decreasing as compare to Total tangible Net worth. Which shows the better
condition.

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VIRTUAL UNIVERSITY OF PAKISTAN
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TOTAL CAPITALIZATION RATIO:


=LONG TERM DEBT/ (LONG TERM DEBT+SHARE HOLDERS EQUITY)

2009 2008 2007

LONG TERM DEBT 148,940,589 123,296,934 119,126,113

LONG TERM (148,940,589+ (123,296,934+ (119,126,113+


DEBT+SHARE 25,891,278) 20,805,117) 18,408,391)
HOLDERS EQUITY =174,831,867 =144,102,051 =137,534,504

0.85 0.86 0.87

TOTAL CAPATILAZATION RATIO

0.87
0.865
0.86
RATE 0.855
L.TERM DEBT/(LTERM
0.85
DEBT+SHAREHOLDERS EQUITY)
0.845
0.84
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VIRTUAL UNIVERSITY OF2009
PAKISTAN
2008 2007
YEARS
INTERNSHIP REPORT OF 2010

Interpretation and Trend:

This ratio represents the proportional importance of long term debt to long tern financing. Where,
the total capitalization represents all long term debt and shareholders equity. The above ratio
shows that the ratio is suitable for financing

FIXED ASSET / EQUITY RATIO:

2009 2008 2007

Fixed Asset 12,446,748 11,134,436 7,548,628

Equity 29,959,978 22,355,614 19,878,615


Fixed assets
ratio/equity ratio 0.42 .5 0.38

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VIRTUAL UNIVERSITY OF PAKISTAN
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fixed assets/equity

0.5

0.4

0.3
RATE
0.2
fixed asset/equity
0.1

0
2009 2008 2007
YEARS

Interpretation and Trend:

This ratio shows the relation ship between fixed Assets and Equity. This ratio indicates the part of
total fixed assets financed by equity. As the ratio increases in 2009 as compare to 2007 so, it’s a
good point from investment point of view.

LONG TERM ASSETS VERSUS LONG TERM DEBT


=LONG TERM ASSETS/LONG TERM DEBT

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VIRTUAL UNIVERSITY OF PAKISTAN
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2009 2008 2007

LONG TERM ASSETS TO LONG TERM DEBT


LONG TERM ASSETS 124,356,381 95,554,930 89,344,584
0.84
0.82
LONG TERM DEBT 148,940,589 123,296,934 119,126,113
0.8
L.TASSETS/L.T.DEBT
RATE
0.78
0.76 0.83 0.77 0.75
L.TASSETS/L.T.DEBT
0.74
0.72
0.7
2009 2008 2007
YEARS

Interpretation and Trend:

This ratio provides the insight into the ability to pay long term debt from the long term assets.
it is increasing form 2007 to 2009 it indicates the fine sign. And it indicates that the long term
Assets are utilizing very well.

PROFITIBILITY
RATIOS:

NET PROFIT MARGIN:


=NET PROFIT /NETSALES*100
Rupee in ‘000
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2009 2008 2007

NET PROFIT 7,122,167 4,156,686 4,078,077

NETSALES 41,121,503 30,570,540 21,201,422


NET PROFIT 17.32 % 13.60 % 19.3%
/NETSALES*100

NET PROFIT MARGIN

20.00%

15.00%

RATE 10.00%
NET PROFIT/NETSALES*100
5.00%

0.00%
2009 2008 2007
YEARS

Interpretation and Trend:

This ratios shows the efficiency of the bank, how bank efficiently uses its assets and generating
profits, the percentage of net profit based on sales, the bank net profit ratio in 2007 is 19.3% it
decreases in 2008 which is 13.60% and in 2009 bank net profit ration increases which good which
is 17.32%.
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VIRTUAL UNIVERSITY OF PAKISTAN
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RETURN ON ASSET Ratio:


=NET INCOME / TOTAL ASSET * 100

Rupee in ‘000’

2009 2008 2007

NET INCOME 7,122,167 4,156,686 4,076,158

T.ASSET 418,374,331 366,695,669 320,109,723

NET INCOME / 1.70 % 1.14 % 1.27%


TOTAL ASSET *
100

RETURN ON ASSETS

1.80%
1.60%
1.40%
1.20%
1.00%
RATE
0.80%
0.60% RETURN ON ASSETS
0.40%
0.20%
0.00%
2009 2008 2007
YEARS

Interpretation and Trend:

Return on Assets is the most comprehensive measure of the bank’s earning capacity. In other
words, the calculations show the efficiency of management to improve its earning capacity. This
is why ROA is of significant importance among all other ratios. In 2007 the bank ROA is 1.27%,
in 2008 it is 1.14% and in 2009 it is an increase which is 1.70%.

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VIRTUAL UNIVERSITY OF PAKISTAN
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RETURN ON ASSETS (AVERAGE) Ratio:


= [NET INCOME / (OPENING ASSETS+CLOSING ASSETS)/2] * 100
e.g. opening assets for 2009 is the closing assets/ inventory of 2008 and closing balance is ending
balance of year 2009.

2009 2008 2007

NET 7,122,167 4,156,686 4,076,158


INCOME

T.ASSET (366,695,669+418,374,331)/ (320,109,723+366,695,669)/ (4.48*1010+320,109,723)/2


2 2
NINCOME
/ T.ASSET 1.81% 1.21% 1..42%
* 100

DU PONT RETURN ON ASSESTS:

=NET PROFTI MARGIN*TOTAL ASSETS TURN OVER

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VIRTUAL UNIVERSITY OF PAKISTAN
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2009 2008 2007

NET PROFTI 17.32 % 13.60 % 19.3 %


MARGIN

TOTAL ASSETS 0.10 0.09 0.07


TURN OVER

173.2 151.12 275.71

Du Pont Retun ON Assets

0.1

0.08

0.06
RATE
0.04
total assets turn over
0.02

0
2009 2008 2007
YEARS

Interpretation and Trend:

Return on Assets Du Pont is a financial ratio that shows how the return on assets depends
on both asset turnover and profit margin. The Du Pont method breaks out these two
components from the return on assets ratio in order to determine the impact of each on the
profitability of the company. This ratio helps to highlight the impact of changes in asset
turnover and profit margin.

OPRATING INCOME MARGIN Ratio:

=OPERTATING INCOME / NET SALES


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VIRTUAL UNIVERSITY OF PAKISTAN
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Rupee in ‘000’

2009 2008 2007

OPERTATING 10,536,120 6,120,940 5,956,029


INCOME
NET SALES
41,121,503 30,570,540 21,201,422

OPERTATING 0.26 or 26 % 0.20 or 20% 0.28 or 28%


INCOME / NET
SALES

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VIRTUAL UNIVERSITY OF PAKISTAN
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operating income margin ratio

30.00%
25.00%
20.00%
RATE 15.00%

10.00% operating incom e/netsales


5.00%
0.00%
2009 2008 2007
YEARS

Interpretation and Trend:

This ratio basically tell us percentage operating profit based on sales, so the bank
operating income margin ratio in 2007 is 28% of sales and in 2008 it decreases which is 20% and
in 2009 operating ratios increases which is 26%.

RETURN ON OPERATING ASSETS:


=SALES / OPERATING ASSET
Rupee in ‘000’

2009 2008 2007

SALES
41,121,503 30,570,540 21,201,422

OPERATING 12,446,748 11,134,436 7,548,628


ASSET

SALES /
OPERATING 3.3 2.8 2.8
ASSET

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VIRTUAL UNIVERSITY OF PAKISTAN
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Return on operating Assets

330.00%
320.00%
310.00%
300.00%
RATE 290.00%
280.00%
270.00%
260.00%
250.00%
2009 2008 2007
YEARS

Interpretation and Trend:

Calculation of Rerun on operating Assets shows the efficiency of management to improve its
earning capacity. In 2007 the bank return on operating assets is 2.8, in 2008 it is same and in 2009
it is an increase which is 3.3. This is better.

SALES TO FIXED ASSETS RATIO:


=TOTAL SALES/FIXED ASSETS

Rupee in ‘000’

2009 2008 2007

NET SALES 41,121,503 30,570,540 21,201,422


Fixed assets
12,446,748 11,134,436 7,548,628
TOTAL 3.30 2.75 2.80
SALES/FIXED
ASSETS

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VIRTUAL UNIVERSITY OF PAKISTAN
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340.00%
320.00%
300.00%
RATE
280.00%
Total Sales/foxed Assets
260.00%
240.00%
2009 2008 2007
YEARS

RETURN ON INVESTMENT ROI:


=NET PROFIT / TOTAL INVESTMENT
Rupee in ‘000’

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VIRTUAL UNIVERSITY OF PAKISTAN
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2009 2008 2007

NET PROFIT 7,122,167 4,156,686 4,076,158

TOTAL 94,789,492 82,646,595 83,958,463


INVESTMENT
NET PROFIT /
TOTAL 0.075 0.05 0.05
INVESTMENT

return on investment ratio

8.00%
7.00%
6.00%
5.00%
RATE 4.00%
3.00%
return on investment
2.00%
1.00%
0.00%
2009 2008 2007
YEARS

Interpretation and Trend:

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VIRTUAL UNIVERSITY OF PAKISTAN
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Return on Investment (ROI) analysis is one of several approaches to building a financial business
case. The term means that decision makers evaluate the investment by comparing the magnitude
and timing of expected gains to the investment costs.

RETURN ON TOTAL EQUITY (ROE):


=NET PROFIT/TOTAL EQUITY*100
ON AVERAGER BASES=[NET PROFIT/(OPENING+CLOSING EQUITY)/2*100

Rupee in ‘000’

2009 2008 2007

NET INCOME 7,122,167 4,156,686 4,076,158

T.EQUITY 25,891,278 20,805,117 18,408,391

NET INCOME / 27.5% on 20% 22.1%


TOTAL EQUITY * average basis On average On average basis
30.50% basis 23.54%
100

RETURN ON EQUITY

30.00%
25.00%
20.00%
RATE 15.00%
10.00% RETURN ON EQUITY
5.00%
0.00%
2009 2008 2007
YEARS

Interpretation and Trend:


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VIRTUAL UNIVERSITY OF PAKISTAN
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This ratio is the measure of the firms overall performance. This ratio reveals that how much
shareholders earn on their investment. The ABL ROI is increasing as in 2007 it was 22.1% now
in 2009 it is 27.5% which is the good sign for the investors for investing in ABL. The higher the
ratio the more accepted investment it is for investor.

RETURN ON EQUITY CAPITAL:


=NET PROFIT/TOTAL EQUITY CAPITAL *100
ON AVERAGER BASES=[NET PROFIT/(OPENING+CLOSING EQUITY
CAPITAL)/2*100
Rupee in ‘000’

2009 2008 2007

NET INCOME 7,122,167 4,156,686 4,076,158

T.EQUITY CAPITAL 29,959,978 22,3535,614 19,878,242

NET INCOME / 23.8% 18.6% 20.50%


TOTAL EQUITY *
100

Retrun on Total Equity

25.00%

20.00%

15.00%
RATE
10.00%
Return on Total Equity
5.00%

0.00%
2009 2008 2007
YEARS

GROSS PROFIT MARGIN RATIO:


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=Gross Profit/net sales*100


Rs in “000”

2009 2008 2007

GROSS INCOME 18,699,809 13,297,816 11,108,412

T.ASSET 418,374,331 366,695,669 320,109,723

GROSS INCOME / 4.5% 3.6% 3.4%%


TOTAL ASSET *
100

GROSS PROFIT MARGIN RATIO Interpretation


and Trend:
4.50%
4.00% This ratios shows the
3.50%
percentage of gross
3.00%
2.50% profit based on sales,
RATE
2.00% the bank gross profit
1.50% G.INCOME/TOTAL ASSETS ratio in 2007 is 3.4%
1.00%
0.50%
0.00%
2009 2008 2007
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it increases in 2008 which is 3.6% and in 2009 bank gross profit ration increases which good
which is 4.5%

MARKETING
RATIOS:

EARNING PER SHARE (EPS):


=NET PROFIT /NO. OF SHARE
RUPEE IN ‘000’

2009 2008 2007

3,122,145
NET PROFIT 7,122,167 4,156,686
NO. OF SHARE 5,346,522
7,110,008 6,463,644
NET PROFIT /NO.
OF SHARE 10.02 6.43 5.8

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Earning Per Share Ratio

12.00%
10.00%
8.00%
RATE 6.00%
4.00% earning per share
2.00%
0.00%
2009 2008 2007
YEARS

Interpretation and Trend:

Companies with record of rapid growth have P/E ratio of 20 to 1 or even higher. The P/E gives
you an idea of what the market is willing to pay for the company’s earnings. The higher the P/E
the more the market is willing to pay for the company’s earnings. Some investors read a high P/E
as an overpriced stock and that may be the case, however it can also indicate the market has high
hopes for this stock’s

DIVIDEND YIELD:

=DIVIDEND PER SHARE / MARKET PRICE PER SHARE *100


Rupee in ‘000’

2009 2008 2007

DIVIDEND PER
SHARE 4 2.50 3

MARKET PRICE
PER SHARE 58.7 31.1 130.2

DIV.PER SHARE / 6.8 % 8% 2.3 %


MARKET PRICE 78
PER SHARE
VIRTUAL UNIVERSITY *100
OF PAKISTAN
INTERNSHIP REPORT OF 2010

Dividend Yield Ratio

8.00%
7.00%
6.00%
5.00%
RATE 4.00%
3.00% dividend yield
2.00%
1.00%
0.00%
2009 2008 2007
YEARS

Interpretation and Trend:

This ratio shows the Dividend per share divided by the market price per share. It's often expressed
as a percentage. It represents the regular cash income. Higher the ratio, better it is. In 2008 it is
the highest and best for investment point of view.

BOOK VALUE PER SHARE:

=SHARE HOLDERS EQUITY /NO. OF SHARES

2009 2008 2007 Rupee in


‘000’
SHARE HOLDERS
EQUITY 29,959,978 22,355,614 19,880,161

NO. OF SHARES 7,110,008 6,463,644 5,386,370

79
SHARE
VIRTUAL HOLDERS 42.1
UNIVERSITY OF PAKISTAN 34.6 36.9
EQUITY /NO. OF
SHARES
INTERNSHIP REPORT OF 2010

Book Value Per Share Ratio

45.00%
40.00%
35.00%
30.00%
25.00%
RATE
20.00%
15.00% book value per share
10.00%
5.00%
0.00%
2009 2008 2007
YEARS

Interpretation and Trend:

For Some extent it is similar to the earnings per share, but it relates the shareholder's equity to the
number of shares outstanding, giving the shares a raw value. In 2007 the bank book value per
share is 36.9 and it decreases in 2008 which is 34.6 and in 2009 this ratio increases which is 42.1.

ACTIVITY
RATIOS:

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TOTAL ASSET TURNOVER:


=SALES / TOTAL ASSET
Rupee in ‘000’

2009 2008 2007

SALES
41,121,503 30,570,540 21,201,422

T.ASSET 418,374,331 366,695,669 319,606,554

SALES / T.ASSET .10 0.09 0.07

Total Assets Turn over

0.10%

0.08%

0.06%
RATE
0.04%
Sales/Total Asset
0.02%

0.00%
2009 2008 2007
YEARS

Interpretation and Trend:

This ratio is useful to determine the amount of sales that are generated from each rupee of assets.
With low profit margins tend to have high asset turnover, those with high profit margins have low
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asset turnover. The bank total assets turnover ratios increases, in 2007 the ratio is 0.07 and in
2008 is 0.09 and in 2009 it is .10.

ADVANCES TO DEPOSIT RATIO:


=ADVANCES / DEPOSIT (NET) *100
Rs. In ‘000’

2009 2008 2007

ADVANCES
237,344,038 212,972,008 168,407,280
DEPOSIT
328,875,037 297,475,321 263,469,594
72 % 72 % 64%
ADVANCES / NET
DEPOSIT *100

Advances To Deposit Ratio

72.00%
70.00%
68.00%
RATE 66.00%
64.00% advances to de posit
62.00%
60.00%
2009 2008 2007
YEARS

Interpretation and Trend:

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This ratio depicts the relationship between advances and deposits and it reveals how productively
the deposits are being utilized. Here is an increase in loan to deposit ratio, from year 2007 to
2009, from 64% to 72%.
This condition is favorable as advances increases with increase in deposits. If deposits increase by
higher rate than an increase in advances then bank has to face difficulty, it’s mean that bank is not
utilizing it’s deposits very well.

Vertical Analysis:
In vertical Analysis each item in a financial Statement is the %age of total. This approach
is also called Component percentage, Product Common -size financial statement.
Vertical analysis helps in scrutinizing the actual increase or decreases in various items
with regard to a specific total.
Formula:
The formula for Vertical Analysis is:
Individual item of financial statement/total *100

Horizontal Analysis:
Horizontal Analysis Also Called Trend Analysis, The horizontal analysis of any organization
shows the general trend of different items placed in the financial statements. For the purpose of
Horizontal analysis of financial statement use Base Year Method. It means that for the purpose of
comparison year here the base is 2007 for horizontal Analysis of years 2008 and 2009.

Formula:-

The formula, which is used in computing the percentages of various items on the basis of the
figures of year 2007, is given below:

= Current year x 100


Base year

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Vertical analysis of balance sheet:


ASSETS RUPEE IN ‘Million”
2009 2008 2007
Rs. %age Rs. %age Rs. %age
Cash and balances 26,435 6.6 % 23,653 7 29,739 9.5
with treasury and
other banks

Lending to financial 28,122 6.7 % 15,793 4.3 18,419 5.8


institutions

Investments 94,789 22.7 % 82,647 22.4 83,9584 26.2


Advances - net 237,344 56.75 % 212,972 58.1 168,407 52.6
Operating Fixed 12,447 3% 11,134 3 7,549 2.4
assets
Other assets 17,955 4.3 % 17,369 5 10,705 3.5
Total assets 418,374 100 % 366,696 100% 320,110 1005

LIABILITIES AND EQUATIES:

Customer deposits 328,875 78.6% 297,475 81.1% 263,972 82.3%

Inter bank 39,819 9.5 27,778 7.6 22,934 7.2


borrowings

Bills payable 3,162 0.8 2,952 0.8 3,494 1.1

Other liabilities 11,061 2.6 13,636 3.7 7,332 2.3


Sub-ordinated loans
5,497 1.3 2,498 0.7 2,499 0.8

Total Liabilities 288,414 92.8% 344,340 93.9% 300,231 93.7%

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Share capital 7,110 1.7% 6,463 1.8 5,386% 1.7%

Reserves 6,582 1.6 5,804 1.6 6,050 1.9

Un-appropriated 12,198 2.9 8,537 2.3 6,971 2.2


profit

Surplus on 4,068 1 1,550 0.4 1,469 0.5


revaluation of assets

Total Equity 29,960 7.2 6.1 6.3


Total liabilities + 418,374 100% 366,696 100% 320,110 100%
Total Equities

Horizontal analysis of Balance sheet:


ASSETS RUPEE IN ‘Million’
2009 2008 2007
Rs. %age Rs. %age Rs. %age
Cash and balances 26,435 90% 23,653 79.5% 29,739 100%
with treasury and
other banks

Lending to financial 28,123 152.7 15,793 85.7 18,419 100


institutions

Investments 94,789 112.9 82,647 98.4 83,958 100


Advances - 237,344 140.9 212,972 126.5 168,407 100
net
Operating 12,447 164.9 11,134436 147.5 7,548 100
Fixed assets
Other assets 17,955 167.7 17,369 162.3 10,705 100
Total assets 418,374 130.6% 366,696 114.5% 320,110 100%

LIABILITIES AND EQUATIES:


LIABILITIES:

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Customer deposits 328,875 124% 297,475 112% 263,972 100%

Inter bank 39,819 173.6 27,778 121.1 22,933 100


borrowings

Bills payable 3,162 90.5 2,952 84.5 3,494 100

Other liabilities 11,059 150.8 13,636 186.3 7,332 100


Sub-ordinated loans
5,497 220.0 2,498 100.0 2,499 100

Total Liabilities 388,414 129.4% 344,340 114.7% 300,231 100%

Share capital 7,110 132.% 6,463 1.8% 5,386 100%

Reserves 6,582 108 5,804 95.9 6,050 100

Un-appropriated 12,198 175 8,536 122.5 6,971 100


profit

Surplus on 4,068 276.9 1,550 105.5 1,469 100


revaluation of assets

Total Equity 29,959 150.7% 22,356 112.5% 19,878 100%


Total liabilities + 418,374 130.6% 366,696 114.5% 320,110 100%
Total Equities

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Vertical analysis of Profit and Loss a/c:


Rs. In Millions
Interest/Return/ Non Interest Income Earned:

Rs. % Rs. % Rs. %


2009 2009 2008 2008 2007 2007
Mark- 41,122 87.4% 30,571 86.2% 21,201 84.4%
up/Return/Interest
earned
Fee, commission 3,470 7.4% 3,266 9.2% 2,258 9.0%
and brokerage
income
Capital gain and 2,452 5.2% 1,571 4.4% 1,585 6.3%
Dividend income
Other income 36 0.08% 59 .0.17% 77 0.3%

Total 47,080 100% 35,467 100% 25,121 100%

Interest/ return/non interest expense:

RS. % Rs. % RS. %


2009 2009 2008 2008 2007 2007
Mark- 22,422 47.8% 17,273 48.9% 10,093 40.2%
up/Return/Interest
Expense
Operating 9,609 20.4% 8,431 23.9% 6,174 24.6%
expense
Provisions 4,416 9.4% 3,561 10% 2,874 11.5%

Taxation 3,414 7.2% 1,969 .5.5% 1,877 7.5%

Total Expense- 39,861 84.8% 31,234 88.3% 21,018 83.3%


%of total
income

Profit/Los after 7,122 15.2% 4,157 11.8% 4,076 16.2%


taxation
Total 46,983 100% 35,391 100% 25,094 100%

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Horizontal Analysis of Profit and Loss account:


Rs. In Millions

Interest/ Return/Non Income Interest Earned:

Rs. % Rs. % Rs. %


2009 2009 2008 2008 2007 2007
Mark- 41,122 194.4% 30,571 144.2% 21,201 100%
up/Return/Interest
earned

Fee, commission 3,470 153.7% 3,266 144.6% 2,258 100%


and brokerage
income

Capital gain and 2,452 154.7% 1,571 99.2% 1,585 100%


Dividend income
Other income 36 46.8% 59 76.7% 77 100%

Total 47,080 187.4% 35,467 141.2% 25,121 100%

Interest /Return/ Non Interest Expense:


Rs % Rs % Rs %
2009 2009 2008 2008 2007 2007
Mark- 22,422 222.1% 17,273 171.1% 10,093 100%
up/Return/Interest
Expense
Operating 9,609 155.7% 8,431 136.6% 6,174 100%
expense
Provisions 4,416 153.7% 3,561 123.6% 2,874 100%

Taxation 3,414 182% 1,969 .104.9% 1,877 100%

Total Expense- 39,861 189.6% 31,234 148.6% 21,018 100%


%of total
income

Profit/Los after 7,122 174.7% 4,157 102% 4,076 100%


taxation
Total 46,983 187.2% 35,391 141% 25,094 100%

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Future Out Look:


To increase it’s profit, Expansion in volume, increase in number of share holders is the future
planning of the ABL. ABL can get this by a enhance it’s effort. It’s history is very well.
The global financial crisis has its effects trickling down to the banking system. The financial
sector is facing its lows but still on its comparative basis its better than other neighboring
countries owing to regulations and role of SBP to take timely corrective measures. Measures
include relaxation of CRR and SLR in phases.

The banking sector’s spread continues its rising trends after witnessing. Profits shows that long
term investment in Pakistani banking system will be lucrative, as the asset quality is quite
satisfactory.

Challenges faced by the economy in general and banking sector in particular, include restrained
liquidity, slowdown of economic activities and high inflation. Despite of these issues, ABL has
been able to maintain its profitability and equipped to face challenges with its dynamic
management and trained workforce.

CHAPTER- 6
SWOT ANALYSIS…….

,,..ANNEXES

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Swot analysis:
SWOT Analysis is the abbreviation of
S: Strength
W: Weakness
O: Opportunity
T: Threats
And Strength and weakness represent the internal environment of the organization
And weakness and Opportunity represent the external environment of the organization
Hence, SWOT analysis is the critical and complete but comprehensive study of the organization.
Strength of the ALLIED Bank LiIMITED and PAF branch:

 The First Muslim bank and that is established first time in the soil the of Pakistan is not
the other bank, it is the Allied Bank Limited. And hence it has earned a great reputation.
 Allied Bank has a well-engineered structure and a timely execution and hence having a
successful transaction.
 ABL financially a strong bank and having a tested and effective strategy that’s why the
ABL not effected by the financial crisis and bad condition of economy, and continuous
toward growth and getting competitive growth.
 Solid foundation as by PARCA long-term term rating of “AA” and short term rating of
“A1+”.
 It has a very large impressive network of branches i.e. 779 in over 300 cities and towns.
 It has local branched as well as international branches.
 Having the strength of more than 502 ATMs in more than 145 cities and towns.
 Brand name is the greatest strength of this bank.
 Salaries are very reasonable, so the employees are not financially fearful.
 The PAF ABL branch is situated in the Commercial Area which enhances the
strength of this branch and hence this branch increases and attracts the number of
customers and expends its volume.
 The branch has 2 telephone connection and one fax machine this increases connectivity
which makes communication easier with different branches.
 The branch is linked through an Online Network of Branches, it enables them to serve
customer in better way
 ABL has the large network of ATM and they expend their branches.

Weakness of the ALLIED Bank LiIMITED and PAF branch

 It is observed that employees have mostly sluggish and hard attitude towards the
customers.
 There is a high part of favoritism, and mostly employees are hiring on the basis of
nepotism and references.
 ATM and online facility is yet provided by branch but it’s functioning is not very
appropriate. Often the ATM machine and online system is not working and hence many a

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times the customers get disappointed by the services of the branch and they go another
bank for transferring the online transactions
 ABL has not yet providing the car financing and house financing, which is a very large
weakness.
 Instead of presence of technology many jobs are done manually, which can be done easily
by using the computerized system.
 There is lack of efficient and proper Research development activities which is very
essential for collecting the essential data which is used for future planning and strategy.
Such as;
• Macro Environmental data
• Micro environmental data
 The organizational members are not fully cooperative.
 There is a lack of commitment and professionalism on part of the employees. The staff
usually tries to avoid do full working and trying to do modest work (escape from
additional work) and they usually delay their work.
 Delays were observed because the prescribed procedures are not followed.
 The filing system is not up-to-date. Much time is wasted while searching for
even a week old data and documents.
 There is less emphasized on the long term relation with customers those have low
deposited (less protocol)
 Branch has less furniture than requirement, and less sitting arrangements.
 The job distribution is not proper.

Opportunity:

 ABL is not yet giving the facilities of car financing and house financing to their
customers. It is a big opportunity for ABL to expending it’s business at a more large scale
by starting the business of car and house financing.
 PAF branch has the deficiency of honest and hard work employees PAF branch can
increases it’s progress by availing the more technical, professional and hard work
employees.
 ABL bank is giving the facility of collection of utility bills and also giving the facilities of
giving the payments to the PAF servants which are very large number of servants, ABL
PAF branch can attract those customers to open their accounts and to depositing activities
etc. hence it is a big opportunity for the PAF branch for expending business.
 ATM and online facility is yet provided by branch but it’s functioning is not very
appropriate. Often the ATM machine and online system is not working and hence many a
times the customers get disappointed by the services of the branch and they go another
bank for transferring fund by online transactions etc. If they overcome these weaknesses
then they have and opportunity to attract and retain the large customers. As, there are
coming large numbers of customers daily for ATM and online transaction.
 The branch is located in a commercial area hence it’s location is the big opportunity for
the bank to attracting the customers at a large scale.
 The branch has the opportunity to availing the new schemes such as HAJJ SERVICES,
HUNDI and WESTERN UNION etc.
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 The bank has the facility of internet it is a big opportunity the bank can expand it self by
increasing it’s use in more appropriate way. The bank has a large network all over the
world it can cover the major market of the Pakistan if it will make it possible to fast
delivery of funds.

THREATS:
 The allied bank is one of the strong and leading banks so, it has many competitors. The
HBL is located in front of PAF branch that is a big threat for ABL PAF branch.
 Pakistan is facing a very critical situation it is suffering from continuous downfall of the
economy since last few years it is the biggest threat for all banks. If this situation will not
be stopped than it is a big threat for Pakistan’s banks for achieving the bank’s objectives.
 Dissatisfied customers is the one of the biggest threat to the PAF branch, As discussed
above (in opportunities) ATM and online services is yet provided by branch but it’s
functioning is not very appropriate. Often the ATM machine and online system is not
working and ATM machine some times is not filled by the funds from the main branch of
ABL, and hence many a times the customers get disappointed by the services of the
branch and they go another bank for getting the online transactions. If this draw back will
not be sort out early, the customers will terminate towards other bank such as towards its
neighbor bank HBL.
 Many private banks are providing the better competitive services than ABL that is the
very sensitive threat for ABL.
 ABL as compare to other top banks is yet not providing many services such as car
financing, house financing services and many other new services. Hence it can loose it’s
reputation

Conclusion:
Although the country is suffering from the financial crises, slow economic growth, and lack of
political stability, however, still the ABL continues to fulfill its commitment by contributing in a
structured manner, by focusing on Agriculture sector and SME, strengthening cooperate and
commercial relationships, product innovation, creativity , technological advancement, and
continuous focus on service quality. Due to its strong foundation and well-built strategy.
Customer is the focus of every thing for ABL and ABL is working tirelessly to enhance
relationship with customers by understanding them and then offering relevant products and
services all the times and ABL tirelessly continues to working very hard to strengthen the
relationship with customers and number of initiatives has been taken by ABL to strengthen its
overall function.

During three years analysis of ABL such as form 2007 to 2009, I observed that ABL has
impressive profit growth as form 2007 to 2009 its profit after tax rose by Rs. 4,076 million to Rs.
7,122 million. And it resulted in increase in increase in ROA and ROE by 1.42% to 1.81%, and
ROE by 23.545 to 30.50% by average.

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Thus I have concluded that the ABL is a financially strong bank and having the long term rating
of “AA” and short term rating of “A1+ by pacra.and serving and continuously attracting the large
number of customers by offering them the innovative, reliable and better competitive products
and services and capture a great part of the market in the country by having a large number of
depositors and customer. PAF base also a very progressive branch and it expanding it’s business
very rapidly and serve the customers very efficiently from 36 years.

Recommendations:
During my internship training of 6 weeks in ABL PAF branch, I have analyzed some problem in
the Bank. Keeping in view those problems followings are my recommendations:

Change in Behavior of employees:


The customers are the very important and essential part of the business they are the real strength
of the business and having the worth of back bone for the business so, they should be behaved,
benevolence, and served in a better way. So, I will recommend for the P.A.F branch ABL that
they should be stopped the carelessness and the sluggish behavior towards the customers and they
should realize that customer is the focus of every thing.
Elimination of favoritism:
There is a great part of favoritism it should be eliminated immediately and enhance the
performance by benevolent the opportunities to the fresh, well educated and able people.
Sitting Arrangement:
There is no proper sitting arrangement; the branch should be focus on proper sitting arrangement
and should furnish the branch hence the branch will be able to manage customers in a well
manner.
Job Training Programs
The bank should place emphasis to held an arrange the effective training and development
programs for its new as well as existing employees this will definitely increase their performance
and efficiency level
Equalize the load of work:
I have found the inequality of work division in the Branch I will recommend that all the
departments should be given the equal load of work; it will result in high performance and create
high outcome and it also create a friendly environment in the bank.
Team based Management:
The higher authorities should form the team based management rather than centralized
management it will enhance the management skills and decision making power of the employees
and elevating the morale of the employee and this would also be a factor of motivation for all
employees and they will be involved in all banking operations and overall effectiveness of the
bank will be boost.
Expansion in business:
The ABL should strongly focus on providing new services to meet its customer’s expectation and
for expansion financing, etc.. e.g. the ABL should focus on the business of personal loaning such
as House financing, car

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REFERENCE AND SOURCES:


• www.abl.com
• Annual report of ABL
• www.google.com
• Brushers of ABL
• Book of Money, Banking and Finance of B.Com and MBA (V.U)
• Some from ABL bank

ANNEXES:

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THANKS
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