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BANK ALFALAH LIMITED
Submitted By: Muhammad Ali Haider Roll #
Section: “D” Evening BBA (Hons)
The evolution of Bank Alfalah signifies a movement from concept to reality; a reality to bring about a change in the banking industries of Pakistan; offering an alternative way of banking; providing people an opportunity to practice beliefs in their financial matters. Following privatization, Bank Alfalah emerged as new identity of Habib Credit and Exchange Bank with a revived purpose and commitment. Charged with the strength of Abu Dhabi consortium and under the leadership of His Highness Sheikh Nahayan Mabarak Al-Nayayan, the bank has already made significant contributions in building and strengthening both corporate and retail banking sector in Pakistan. At present the bank has expanded its operations across Pakistan in 74 cities with 189 operational branches. However, it has total 195 branches that include 23 Islamic Banking branches, five overseas branches three in Bangladesh and two in Afghanistan and one offshore banking unit in Bahrain. It is pertinent to note that all of its branches commenced their operations in “Real Time Online Mode”. Today Bank Alfalah is the fifth largest Banking operation in Pakistan. Since its inception, it has registered the fastest growth rate ever witnessed by any Banking operation in Pakistan. Bank Alfalah continues to grow in a robust manner amidst considerable volatility in the banking industry. The bank is striving to prosper in terns of financial returns and the value it continues to provide its shareholders especially when tighter spreads are exercised and margin are compressed due to high interest rates as a tool to curb inflationary pressures. The profit before provisions and taxation of your bank for the year 2008 stood at Rs. 3.264 billion which was 10% higher than that of last year. The deposit 2
grew by 7.7% and stood at a figure of Rs. 239.509 billion while advance portfolio grew by 26% and showed a figure of Rs. 149.999 billion. . The most valuable asset of any financial institution is its human resource. Bank Alfalah has at present a dedicated and commendable workforce of around 6,543 staff members other than outsourced. The training and development centre remains at the helm of imparting training and related skills, not to only fresh recruits but also to existing employees. Bank Alfalah has in place the state-of-the-art Training and Development Center both in Lahore and Karachi for equipping the personnel of Bank Alfalah with tools that help carve a brighter future. Its philosophy in this regard is that training is indispensable in not only enhancing organizational effectiveness but also individual job satisfaction. Bank Alfalah has lined up a number of innovative products. These include Alfalah credit cards, Alfalah Hilal cards, Bank Alfalah Car finance and Leasing, Alfalah Milkiat finance, Alfalah Karobar finance, Bank Alfalah Home finance, Alfalah Zarie sahulat, Money gram, Alfalah Phone banking and online baking. Designing the product portfolio of bank in response to the customer’s preferences, the product like Royal Profit, Alfalah kifayat scheme, are prime examples of quality and innovation providing timely banking opportunities to the customers of bank. Being an active player in banking sector in Pakistan, they are confident that with the commitment of their team they will be able to gain the reputation of the fastest paced financial institution. To make their banking solutions become accessible to more and more people, they have embarked upon a rapid expansion program, aiming to provide a networking that makes the services available to any of their customers in all the major urban centers of Pakistan- with a view to go international in the near future.
the bank is committed to dedicate all its energies. The bank is serving the people at high level of standard by going according to the whishes of the customers. The ratio of profit is increasing at good percentage.With their key indicators of progress already soaring to new heights. resources and time to bring higher value and satisfaction to their customers. employees and shareholders. The graph of bank is going up and up every year. 4 .
Firstly the purpose of internship period is to become familiar with the practical world that what is actually happening in different national and multinational companies and how different activities are performed over there.Internship is the basic requirement of all business programs in nearly all of the business institutes and especially in Bahria University. I gained a lot from this internship tenor under the kind supervision and guidance of my internship supervisor. Secondly. to cope the theoretical knowledge with the practical side that what is to be taught us in business institutes and how it is implemented in different enterprises? I have done my internship in Bank Alfalah Limited (F-8 Markaz Branch Islamabad) since 16th of July 2009 to 15th of September. My report is all based on what I have learnt there. During my whole time I was visited through different cells of the bank and was thoroughly briefed about the procedure and working by cordial senior staff of there. I hope that my report will given you good overlook of all the banking related matters. It is actually the basic requirement of the course of BBA (Honors). 5 .
even then after taking an understanding.All praises. I offer thanks to the Holy PROPHET (PBUH) WHO is the beacon of enlightment and the greatest benefactor the mankind ever had. Miss. the ALMIGHTY ALLAH Who has bestowed upon human being the crown of creation and has endowed him with knowledge and wisdom. As banks are very much sensitive about their secrecy. Nadir (operations manager). My special thanks to Mr. thanks and acknowledgements are for CREATOR. they let me handle their delicate operations. Miss ammara (accounts department). I would like to present a token of thanks for the staff members of Bank Alfalah Limited Garden Town Branch. Lahore. Who brought for us revelation and unlimited knowledge and civilized the barbarian human being. Abid shah (loan department). Nida (account opening) who gave me a horde of useful information and treated me extraordinarily at each step of my learning over there. Mr. 6 . Mr. who were cooperative to me in the completion of this report and provide me their complete guidance. Irfan Butt (branch manager).
I would like to dedicate this accomplishment offline to my beloved and caring parents. and to my teachers with the support of whom I am standing at this step of my life stairs. 7 .
.101 Ratio Analysis………………………………………………………………….11 Mission Statement…………………………………………………………….36 Work Done by Me……………………………………………………………..103 Marketing Mix of BAL…………………………………………………………......…………….….....148 Recommendations…………………………………………………………….…..17 Company Management Systems…………………………………………………..25 Administrative/Management Styles……………………………………………..41 Financial Highlights…………………………………………………………….…..……9 History & Present Status of BAL……………….……..183 8 .…………………………………….Table of Contents Introduction to Bank Alfalah Ltd…………………………………….20 Organization’s Structure……………………………………………………..181 Conclusions……………………………………………………………………….….....…………………..23 Fields and Activities……………………………………………………………..16 Vision Statement……………………………..
1997. the Bank has invested in revolutionary technology to have an extensive range of products and services. Companies commercial banking and related services as defined in Ordinance. The bank perceives the requirements of its customers and matches them with quality products and service solutions. This facilitates their commitment to a culture of innovation and seeks out synergies with clients and service providers to ensure uninterrupted services to its customers. with the registered office at B. It has been successful in making a significant contribution to both corporate and retail banking in Pakistan.INTRODUCTION TO BANK ALFALAH Bank Alfalah Limited was incorporated on June 21st.I. The bank is engaged the in Islamic Banking banking. 1997 as a public limited company.A. under the Companies Ordinance 1984. its emphasis on growth has resulted in a strong entity capable of offering high quality services to a wide spectrum of clients. 1962. During the past ten years. Management of Bank Alfalah accepted the challenge to transform this bank into a highly professional. I. Over the years. Karachi.Chundrigar. most efficient & service oriented institution. we have emerged as one 9 . Its strategy is to maximize the synergies of branch network through an optimal allocation of financial resources in the face of dynamic challenges of present financial environment. Its banking operations commenced from November 1st. The management has been successful in fulfilling the undertaken challenge. in a highly challenging business environment.Building. Strengthened with the banking of the Abu Dhabi Group and driven by the strategic goals set out by its board of management. The Bank is currently operating through 195 branches in 74 cities.
The Bank Alfalah Limited team comprises of dedicated professionals equipped with a diverse array of skills. The product lineup continues to fulfill and satisfy the banking requirements 10 . The management concentrates its energies on making informed economic decisions. The bank aims to further enhance performance standards through implementation of innovations in both products as well as customer care. by discovering newer avenues of client benefit. These achievements have been preceded by concerted effort to provide highest levels of service and value to our customers. These characteristics of the portfolio have helped Bank Alfalah Limited to face challenging economic conditions. Strengthened by the backing of the Abu Dhabi Group and driven by strategic goals set out by its Board and management. With strategic mergers and acquisition. This customer-focused strategy has enabled Bank Alfalah Limited to evolve as a single source financial service provider of corporate and retail banking services. This prudent attitude has created a synergistic organizational structure leading to improvements in profitability and a sustainable competitive advantage for the bank. Bank Alfalah Limited has continued its upward climb in pursuit of excellence. Bank Alfalah Limited increasingly inspires trust and confidence of all its clients. Bank Alfalah has become a leading player in the global banking arena. A Highly Responsive Product Portfolio is not only comprehensive but also customizable to match the needs and preferences of the customers. vast experience and pro customer attitudes. translating it into greater returns for our investors and customers. Within a short span of time the bank has carved a significant niche for itself in the banking industry. Bank Alfalah reputation has been built on its tradition of high quality and the expertise of its extremely motivated and qualified staff.of the foremost financial institution in the region endeavoring to meet the needs of tomorrow today.
established by Mr. as the new identity of H. the BCCI was banned. but the demanding financial needs of the corporate sector as well. Since its inception. Following the privatization in July 1997. which were named as Habib Credit and Exchange Bank (HCEB) and these were working as subsidiary of Habib Bank Limited. The bank offers an extensive range of financial services specifically designed to cater to the needs of its successful associations with the Government and Private Sector.E. its 3 Pakistani branches were taken over by the Government of Pakistan. Then.C. E. HISTORY AND PRESENT STATUS OF BANK ALFALAH Bank of Credit & Commerce International (BCCI) was a Pakistan based bank. Agha Hassan Abdi from UBL. when was accused by European countries that the bank was involved in some illegal operations with Gulf countries.A. Sheikh Hamdan Bin Mabarak Al-Nahayan purchased 70% of its shares and 30% shares remained with Habib Bank on behalf of Government of Pakistan. as Pakistan moves into the 21st century with its ambitious expansion and development programs. the management of the bank has implemented strategies and policies to carve a distinct position for the bank in the market place.B after the privatization in 1997. Habib credit and Exchange Bank assumed the new identity of Bank Alfalah on February 25. in association with U.E and Europe. In 1991. the bank has made great strides towards growth and profitability. the bank was closed due to international pressure. Therefore. Today.of not just the conventional consumer. BCCI has its branches in 74 different countries of the world. Bank Alfalah is here to join the efforts to help the country meet its growth objectives. The deposit base 11 . It had its 3 branches in Pakistan. Since 1997. 1998. BAL network has expanded from 3 in 1997 to 195 as on March 2009. It is now Abu Dhabi based bank as the family of H. The major reason behind European accusation was that BCCI was of Islamic mode.
Minister of Higher Education and Scientific Research. Being a bank that is focused on financing of foreign trade. Therefore in accordance with the provision of India independence Act of 1947. It was also stipulated that Pakistan would take over the management of public debt and exchange control “Reserve bank of India” on 1st April 1948. envisaging the development of various sectors in Pakistan. Government of Abu Dhabi. on the other hand . bank operation methods and procedures. and under the leadership of His Highness Sheikh Nahayan Mabarak Al-Nahayan.9 billion to over Rs. The committee recommended that the “Reserve bank of India” should continue to function in Pakistan until 30th September 1948. the bank is energized with the vision. the number of offices of scheduled banks in Pakistan decline from 487 to 195.C. have undergone a constant process of evaluation because of economic growth. volume of foreign trade business has grown from Rs. advance from 5. Commercial Banking Scenario in Pakistan The function of commercial banking and application of the fundamental principle of the depositor bank relationship have remind essentially the same since about 500 B. There were 487 offices of scheduled banks in the territories now constituting Pakistan. the mounting volume of transaction and greater use of banking feasibilities. and a prominent member of Royal Family. and expert committee was appointed to study the issue.8 billion to over Rs. 5.moved from less than Rs. At the time of independence there were practically no industries and resources so it was very difficult of Pakistan to run its own banking system immediately. By 30th June 1948. Then Indian notes would continue to be legal ender in Pakistan till 30th September1948. Charged with the strength of Abu Dhabi consortium. 190 billion as on December 2008.8 billion to 109 billion. 227 billion. In order to 12 .
But it had negative effects on efficiency of the banking sector afterwards a privatization Commission was set up on January 22. At the time of independence in 1947. As the result of these contributing factors methods and practices necessary to handle the increase volume of detail work have been developed while an other and quicker method have been adopted in order to cope with the increase volume . Nationalization of Banks was not done 1st January 1974 under the Nationalization act 1974. there were 38 scheduled banks with 195 offices in “Pakistan” but by December 31. 1973. due to certain objectives.establish a full-fledged control bank the Governor General of Pakistan Quaid-E-Azam Muhammad Ali Jinnah. much in which has been accomplished without unduly increasing cost of doing business. BANK ALFALAH in one of the namely established private scheduled banks in Pakistan. During to last 20 years we have experience a constant transaction from the old to the new from manual to mechanical method and procedure. The government approved & permitted the establishment of 10 new private banks in 1991. inaugurated the state bank of Pakistan on July1st. 1948. MCB & ABL.233 offices all over Pakistan & 74 offices in foreign countries. hence many new private banks have incorporated. 1991.. The fact show that the commercial banking has made tremendous progress and achieve a phenomenal growth since independent and that commercial bank have duly played a vital role as mobilize of people saving to constitute the most important source of financing in country economy. there were 14 scheduled Pakistani commercial banks with 3. 13 . the commission transferred many banks to the private sector i. since then.e. from old establish practices to current techniques and to a more scientific approach to the solution of the problems brought about day to day changes in business practices.
privatized banks and nationalized commercial banks (NCB’s). The GOP is actively pursuing the privatization of Habib Bank. Earlier. 2002. In the NCBs category two banks — Habib Bank and National Bank of Pakistan — have been left after the privatization of United Bank. Lately. The remaining shares of the GOP in Muslim Commercial Bank and Bank Alfalah were also sold. Since October 2002 the bank has been working under the new sponsors. and A large part of sale proceeds was received in foreign exchange. Union Bank acquired the operation of Emirates Bank International (EBI) in Pakistan. Union Bank had acquired Pakistan operations of Bank of America in year 2000 and American Express credit card business in Pakistan in year 2001. However.Commercial banks operating in the country can be divided into four distinct categories. the buyers of Schon Commercial Bank changed its name to PICIC Commercial Bank. with the take over of Prudential Bank and Platinum Bank by the new sponsors their names were changed to Saudi Pak Commercial Bank and KASB Bank respectively. ownership of Union Bank and Schon Commercial Bank changed. foreign banks. The scheme of amalgamation was notified by the central bank on September 03. through sale of its 26% shares along with transfer of management. National Bank of Pakistan has been listed at local stock exchanges and parts of its shares were off loaded. While the new sponsors of Union Bank preferred to continue with the same name. United Bank's privatization demands specific mention for two reasons: 1) 2) It was the largest transaction. private banks. 2002 and Union Bank settled the amalgamation price of US$ 37 million on September 09. ownership of a number of private banks has changed over the years. The number of private banks has remained almost constant ever since they commenced operations in early nineties. The GOP sold majority shares of Allied Bank of Pakistan in early nineties but has not been able to off load its remaining shares in the bank. The consortium comprising of Abu Dhabi Group and Bestway Group has acquired 51% shares of the bank along with management control. 14 .
Meezan Bank was created as a result of merger of Al-Meezan Investment Bank and Societe Generale. 15 . The first ever license to operate as a Scheduled Islamic Commercial Bank was granted to Meezan Bank on January 31. The total number of foreign banks in the country has reduced to half since the freezing of foreign currency accounts. The number of foreign banks operating in Pakistan has been declining constantly since the GOP decided to freeze foreign currency accounts in May 1998. 2002. The positive point is that most of the foreign banks were able to sell their Pakistan operations at attractive prices. 2002. Pakistan operations of Societe Generale were amalgamated into Meezan Bank on May 01.
establishes a competitive advantage and enhances profitability.To develop & deliver customer the most innovative deliver products. quality services that contributes to brand strength. manage experience. thus providing value to the stakeholders of the bank“ 16 .
“To be the premier organizations operating locally and internationally that provides the complete range of financial Services to all segments under one roof.” 17 .
Home Loans and other areas of product development to provide higher levels of services and value to the clients. creativity and flexibility. SME. they believe in placing the client at the center of business and all of the products and services. • • To reinforce a corporate culture that fosters learning. 18 .OBJECTIVES OF BANK ALFALAH The objectives of Bank Alfalah are as follows: • To please their customers by fulfilling the financial needs as best as possible. For this the management has adopted the strategy of • • • • “Caring for you… Our Customers” To get maximum share of the market To price the products optimally To expand more the network of branches in several other cities of Pakistan as well as in the other countries of the world. To invest further in banking innovations which include Islamic banking.
The-state-of the-art technology we plan to put in place will be complemented and supported by the personal touch which we are committed to add all spheres of our customer related services. E. E. and most efficient and service oriented institution. you all will make the best use of this web site. H. H. different banking related subjects. We hope. the challenge to transform this bank into a highly professional. My greetings and best wishes to you all.Message From. Therefore necessity of improving the quality of our human resource will remain on top of our priorities for all times to come. which will provide a medium for you to express your views on. Sheikh Hamdan Bin Mabarak Al-Nahayan 19 . Sheikh Hamdan Bin Mabarak Al-Nahayan Chairman & Board of Director Dear Colleagues Bank Alfalah was launched on 25th February 1997 and with that we launched for ourselves.
20 . Board of Directors. i-e. The Top Management: The top management involves the branch managers and the chief managers of the bank including the operations managers as well. all the decisions and the strategies are being proposed and implemented under the instructions and the supervision of the board of directors or the executives. and the group of middle managers. So. The Board of Directors are responsible for the first phase of the management process. the management is pretty strong and there is lot centralization in the whole network of the bank. The Board of Directors: The upper most part of the management is the Board of Directors or the Executives. At Bank Alfalah. All the decision and strategies are been proposed and evaluated the management of the organization. The major responsibilities include the strategy formulating for the bank and supervising the whole staff at the branch. supervisors and the employees. planning. i-e. the Top management.COMPANY MANAGEMENT SYSTEM Management means the administration and the governing body that is concerning the whole organization. The management at Bank Alfalah has been divided into 3 major parts. Also the policies and the overall objectives of the Bank are being proposed at this level of the organization. They define and interpret the objectives and vision and then formulate policies for their completion.
Tahir 21 . the employees whose activities are monitored and controlled according to the desired objectives.Director THE CORE GROUP Board Advisory Committee Mr.Director . Abdullah Khalil Al-Mutawa Mr. Mohammad Saleem Akhtar Mr. Abdullah Khalil Al Mutawa Mr. They are directly responsible for planning and controlling the activities of officers.Director .Director .Chairman . THE OVERALL MANAGEMENT BOARD OF DIRECTORS H.Chief Executive Officer . E. Ikram Ul-Majeed Sehgal . Nadeem Iqbal Sheikh Mr. Sheikh Hamdan Bin Mabarak Al-Nahayan Mr. Ganpat Singhvi Mr. Finally. Abdullah Naseer Hawaileel Al-Mansoori Mr. Bashir A. Al-Askari Mr. Omar Z.The middle management. supervisors and the employees: Departmental heads constitute this level of management at Bank Alfalah.Director . Khalid Mana Saeed Al Otaiba Mr.
Company Secretary . Box 6773. I. www. Bakhtiar Khawaja Mr. Pervaiz A. Ijaz Farooq Mr. P.bankalfalah. Mohammad Yousaf Mr. Shakeel Sadiq Mr. (Chartered Accountants) B A Building. Arfa Waheed Maklik Mr. Nadeemul Haq (Chairman) Corporate Information Mr. Shahid M. Karachi.com .Chief Financial Officer . O. Sirrajuddin Aziz Mr. Shahid Mr. Zahid Ali H. Adil Rasheed Mr. Mohammad Saleem Akhtar Mr. I. Murtaza Mr.Head Office 22 .Central Management Committee Mr. Adnan Anwar Khan Mr. Hamid Ashraf Mr. Jamal Taseer Hadi Khalid & Co.Auditors . Chundrigar Road.
Chief Executive Officer Executive In charge Credit Card Credit Audit Internation al Banking Marketing Finance 23 .
Branch Setup Assistant Credit Marketing Credit Admin Operations Mng.Ops Consumer Finance Agri Finance Help Desk CD Accounts Consumer Banking IT Accounts CRO’S Bkg/Ops/ Cash Cust serv Clearing/ Collection 24 .
The Group is organized in three divisions i. Technological innovation: 25 . Human Resource Division and the Credit Division. mainly responsible for development of systems and procedures. This Division. SYSTEMS and OPERATIONS DIVISION This Division has been instrumental in developments of procedures and manuals for various operating requirements of the Bank. The Division has a special Assets Management team. Bank’s Head Office Credit Committee (H. CREDIT DIVISION Providing extensive support to branches for credit administration. which is responsible for ensuring low ratio of bad debts. The Division is active in providing equipment procurement support and development of new branches. After careful mapping of existing process flow. Systems and Operations Division.C. process-re-engineering. effective monitoring of delinquent advances and close follow-up for recoveries. automaton and credit management. the Division recommends automation and re-engineering requirements to improve transaction efficiencies.C) reviews the credit quality and pricing on regular basis not only to ensure healthy credit growth but also the management of Bank’s risk assets in a most prudent and profitable manner. as a direct function also manages the protection of fixed assets of Bank.e. control and monitoring.O. Most of the loans are for short-term trade financing on a secure and self-liquidating basis.Peons Guards Driver Others FIELDS AND ACTIVITIES A support functions Group. the Division has played a pivotal role in helping the Bank achieve a remarkable loan growth of with well-diversified risk exposure.
365 days a year.2% in the corresponding period over last year. This Division operates on a future oriented strategy focusing on employee’s personal and professional growth. including recruitment. 24 hours a day. perhaps the most important Division at the Head Office is responsible for human resource management. candidates are selected through well defined & systematic selection procedure. staff training and evaluation. Alfalah laid great emphasis on the employee honesty and integrity besides technical competence and. Is has played pivotal role in enhancing customer expectation. Alfalah bank enjoys a strategic competitive advantage overall domestic players by virtue of its leadership in technological innovation. and conceptual and specialization skills to enable them to understand the cause-and-effect relationships and to think logically.959 merchants by 31 st December 2008 posting a growth of 16.“Modern science is not an option. Under our Human Resource management policy. whom bank feel deserve nothing less. This division is also handles matters relating top administration. it is an obligation” Technology is rapidly changing the way we think. HUMAN RESOURCE DIVISION Strategically. interpersonal. The hiring philosophy is based upon meritocracy and selecting the right person for the right job. we have signed over 15. Bank Alfalah has launched various unique credit card schemes to cater to numerous segments. act and do business. Phone banking service and Internet banking facility allows customer to enjoy routine banking services from anywhere in the world. In acquiring business. particularly with respect to speed and quality of service. Staff development activities are reared to enhance their capabilities for applying the knowledge and fats towards development of practical solutions. CREDIT CARD DIVISION The Bank’s product portfolio is designed to remain flexible and adapt itself to changing customer needs. The Bank Alfalah Credit Card success story has made the institution proud. Alfalah develops and grooms the management personnel for position of greater responsibility analytical. Bank endeavor in this regard is to actively explore newer avenues of offering higher value to our clients. 26 .
Employee productivity enhancement is organized through in-house and external training programs. Proper training of human resource is essential. Staff welfare has been a priority. In short bank Alfalah team comprise of dedicated professionals equipped with a diverse array of skills and vast experience. not only for the more productive and satisfied work force but for also homogenous corporate culture. requisite training and meritocracy based reward system. governing our decision. The bank continuous to follow its strategy of hiring batches of young and energetic Management Trainees who are sent to our Training and Development Center for training in all areas of banking. skills and personalities. Alfalah bank understands that 27 . Ethical values: “Professionalism without integrity is like a book without pages” Because the right may not always be obvious. professional grooming. The prudent attitude has created a synergistic organizational structure leading to improvements in profitability and a sustainable competitive advantage for the bank. The management concentrates its energies on making informed economic decisions. Bank continues to offer opportunity for people to develop their knowledge. we must be guided in our every action by set of well-defined values. Our Training and Development Center is a state of the art facility with an impressive faculty. The human resource philosophy at Alfalah bank focus on multi-talent hiring. Training & Development: Bank Alfalah is committed to the personal welfare and professional development of all our team members. thus ensuring greater self-fulfillment and progression in the organization. translating it into greater returns for our investors and customer.Dedicated Professionals: “Unusual efforts on the part of the employees who are apparently ordinary workers is one of the key indicates of the superior enterprise” Staff is the most valuable asset of any organization.
which reports directly to the President And Chief Executive of the Bank’s. Financial Division works as the backbone for Bank’s operations. but also guiding and assisting branches in improving their operations.finding. consolidation of Bank’s budgets. Through the dedicated efforts of staff at this division. AUDIT DIVISION The Audit Division reports directly to the Board through the Executive Committeewhich are also the Audit Committee.the budgetary performances are constantly reviewed and trough a sophisticated “Monthly Performance Report” (MPR) which is a computer based program. has been instrumental in preparation of Bank’s business plans and future stratigies. FINANCE DIVISION Finance Division is responsible for bookkeeping and accounts. the Bank has been winning various awards for the Best Presentation of its Annual Accounts and also the management has been able to monitor and review the Bank’s performance in procreative manner. This Division is the head office and manages all financial returns and the MIS through its Management Reporting Wing. monitoring and constant review of various financial indicators.its commitment to satisfy customer needs must be fulfilled within in a professional and ethical framework. The Division is actively involved in preparing market comparative analysis. the Division provides feedback to the senior management on strategic issues like reasons for budgetary variances and methods to arrest negative performance factors. their role is not intended to be just that of fault. POLICY FORMULATION AND PROCESS MEETINGS 28 . as also the Prudential Regulations and other directives of the SBP. The Audit Division acts completely independent of the management and is responsible for checking and reporting on the Management’s compliance with the Board’s policies and directives. The Division. Preparing the Bank’s Annual Accounts and coordinating external audits is a direct function of the Finance Division. However.
efficiency. Policies for any organization constitute a major part in the overall long term functioning of the bank. The top management is been suggested to make the policies implemented keeping in view the long-term objectives of the organization. along with making profitable advances and increasing its range of products and services. the bank has moved rapidly in expanding its branch network and deposit base. and profitability following its increased involvement in trade finance.At Bank Alfalah. are been formulated at the Executive level of the organization. Bank Alfalah has made notable progress in business volume. Then these policies are transformed into the hands of the top-level management. the management initiated the process of realization of the Bank's vision by consolidating its financial position and creating a large and diversified business base. Major policies hat have been made and implemented at Bank Alfalah are: Consumer Banking Policy 29 . POLICIES OVERVIEW AT BANK Since the inception of Bank Alfalah Limited in 1997. Managerial policies followed by the bank have a direct contribution in its success. In short we can say that policies and the objectives are the lifeblood of the organization in long run. commercial lending. Though policy formulation is in the prescribed hands yet the policies formulated by the top level have been very successful as indicated by the success pattern of the bank so far. by the grace of almighty. The Board and Management of the Bank have implemented strategies and policies to carve a distinct position for the Bank in the market place. For these very purpose meetings arte held almost weekly at the branches level and also in case of any contingent dispute resolving the meeting scan be called at any time during the branch timings. policies as mentioned earlier. and foreign exchange and money market operation. In a bid to satisfy Bank Alfalah’s shareholders and valued clients. It has made a breakthrough in providing premier services at an affordable cost to our customers. Also the views from the middle managers and employees are encouraged as well for the purpose of removing flaws form the system.
Credit Facility In this service the loans are provided to the customers by the bank to meet revenue shortfalls. Lending Policy Bank Alfalah pursues a conservative yet dynamic credit policy. Likewise. It is planning to introduce new consumer products like credit cards. This policy helps in protecting the integrity of the bank. For this very purpose Bank Alfalah has got an effective credit line proposals system to be sanctioned to the clients on demand. Bank prefers to finance exporters because of less risk involved. All of the references are carefully checked to learn about a potential client before establishing a relationship. e-banking etc. Some of those policies are discussed below: i. market risk and other operational risks very efficiently. Stop Payment Instructions 30 . liquidity risk. Bank Alfalah has created a niche for itself in the marketplace.Alfalah’s policy regarding consumer-banking policies includes the development through the electronic consumer banking operations. Bank Alfalah manages the credit risk. It ensures good relationship with the clients. This strategy has enabled the bank to have a high quality risk portfolio. ii. Services and Product Polices Bank Alfalah provides a vast variety of services to its clients. References are excellent sources of new accounts as they give an opportunity to learn about a potential client before establishing a relationship. Selection of Clients Management is very selective of clients.
It is one of the most important services provided by the bank to its clients. Drafts. iii. to the people who do not maintain an account with the bank. that is. Pay Orders These are the facilities that the bank offers its customers and. a. In case the account holder has lost his/her cheque he can issue the stop payment instructions to the bank. Telephonic Transfers. 31 . The Trade finance department has efficiently done management of the changing trade policies by the central bank over there. c. Deposits The bank offers different types of Deposits to its account holders. ordinary people. Trade Department Policy Bank Alfalah’s focus is on “Foreign Trade” as its primary market of business. For offering these services the bank charges commission besides the government taxes and duties. The bank till further instructions will not honor the cheque. b. It maintains high emphasis on enlarging its Correspondent Banking network besides aiming to enhance the scope and level of cooperation with existing correspondents. at times. Alfalah Musharakah Saving Account Current Account Musharakah Time Deposits On PLS Basis iv.
It uses television advertisements. for the publicity of its new products/services. Accounting Policies Bank Alfalah has adopted almost the same accounting procedures that other financial institutions are adopting at this time. Bank’s policy is to hire suitable candidates. direct hiring and promotion from lower levels. The Bank sponsors a number of sporting and community development initiatives to play its part as a responsible corporate citizen Promotion and Incentives Bank hires officers in range 1. The process flow and the usage of the policies in the day wise routine are mandatory for all the employees working in the specified departments at the branch.e. Also with the expansion of the branch network growth in the current era. more and more opportunities have been provoked not only for the young generation but also for the employees of the bank. Bank’s policy is to give cash rewards and salary increments for increasing the employees’ satisfaction. Then depending upon their job performance they are promoted to next range. newspaper as well as various promotional schemes to attract customers. the GAAP.Marketing Policy Bank Alfalah inverts heavily for the marketing policies and orientation. Recruitment Policy Hiring is mainly of two types i. More facilities and increments are given along with promotion. The bank gives a car facility to the officers of range 5. These accounting procedures or Accounting policies are made according to Generally Accepted Accounting Principles. By suitable candidates bank refers to 32 .
Successful candidates then receive comprehensive training in essential areas of branch banking at the Bank’s state-of-the-art training facility at Lahore and Karachi. Bank is reluctant in making direct appointment of senior executives. To impart technical skills to its staff “Training and Development Center” offers programs in several skill areas.candidates having proper educational qualification. A separate quality assurance department is to be established as well very soon for the removal of little flaws 33 . reputable external training providers are invited to fill the gap Quality assurance services Service excellence is one of the priorities of Bank Alfalah. Alfalah also offers various computer-training courses to its employees. prior to their posting at various branch locations. Board of Directors is representative of sponsors. the Off-job training and the On-job Training. Strong personal character.Com from reputable Pakistani or foreign institutions with GPA of 3 plus. MA Economics or M. Every year Bank Alfalah opens its doors for about 30 fresh post-graduates to join the prestigious ranks of Management Trainee officers with the Bank. Training and Development Policy Bank Alfalah’s policy is to take special interest in recruitment and training. or equivalent. i-e. EVPs are promoted from lower levels. experience and background. in which short-listed applicants appear in a written test followed by a panel interview. as well as communication and interpersonal skills are essential pre-requisites to succeed as an MTO. Preferred educational background for entry into the MTO scheme includes an MBA degree. This training is been given in two instances. Wherever the Training Department is unable to provide focused training for certain groups of staff. It is obligatory for each staff member of the bank to attend a minimum number of training courses during the course of a year. The MTO scheme is a highly competitive and sought after induction scheme. It is the policy of the bank that “President” of the bank will be the representative of major stakeholders/owners. Its employees attend seminars and courses offered by “Institute of Bankers”.
In addition all the employees are satisfied with the working ambiance. human and other resources to compete in the marketplace. During my internship program. job satisfaction is the key factor as well like that of growth and development in the monetary terms. If necessary it can be easily converted into cash. Liquidity Policy Bank Alfalah maintains positive and healthy liquidity. Bank’s policy is to maximize the synergies of branch network through optimal allocation of financial. Investments Policies Bank Alfalah investment policies are based on federal and provincial securities. I observed being in touch with most of the employees over there. and participation term certificates treasury bills and blue chip share of joint stock companies. with 34 . that all the employees are working with devotion that is the basis for job satisfaction. Growth Policy Bank Alfalah emphasizes on growth along with providing best quality customer service. debentures. To evaluate an organization’s strength and repute in the industry. Job Satisfaction Job satisfaction is the major important factor to be considered while evaluating any organization. Bank’s policy is to keep surplus liquidity in fixed income securities issued by the Federal Government of Pakistan. The focus of the bank is to develop new areas of activities along with traditional banking activities of resource mobilization and credit disbursement.that are still prevailing at some of the branches regarding facilities for the consumers.
The bank gives a car facility to the officers of range 5.the salaries and with the increments and promotions. so in due response. Some of the employees are over burdened with the work. Bank takes much care of its employees because they are precious assets of it. Bank’s policy is to give cash rewards and salary increments for increasing the employees’ satisfaction. Also with the expansion of the branch network growth in the current era. Bank celebrates birthdays of all employees. More facilities and increments are given along with promotion. At Bank Alfalah the employees are very much satisfied with the job and the overall working conditions of the bank. Then depending upon their job performance they are promoted to next range. arrange trips and give them opportunity for recreation and enjoyment. more and more opportunities have been provoked not only for the young generation but also for the employees of the bank. 35 . the bank is enjoying high efficiency in managing the time delays in reporting and working operations. Bank hires officers in range 1. But that does not impact the overall job satisfaction of the organization. Only thing to be mentioned out over here is the workload and the employee timings for their job.
36 . The way managers treat the employees and an operative is outstanding at bank Alfalah. This is the reason why each and every employee is pretty much satisfied with the job. As far as the management style at Bank Alfalah Limited Township Branch is concerned. As far as the management styles at Alfalah Bank are concerned. MANAGEMENT STYLES Management must have to adopt some administrative style to get all the activities to be done effectively and efficiently. is very much keen towards maintaining the decorum of the cooperative culture within the organization and also with the clients of the bank. there is centralization to a certain extent and decentralization in some other areas. there is both centralization and decentralization to some extent.ADMINISTRATIVE/MANAGEMENT STYLES Management at Bank Alfalah Ltd. Management must adopt some administrative style to get all the activities done effectively and efficiently.
that are planning. 37 . In his absence. unity of command was the requirement of the time. So at this level employees are very much contended to their work. so management at this level is concerned to the decisions of the department heads level. It is a process by which certain basic functions. There is a sign of good delegation of authority for decision-making in Alfalah Bank at this level.Management refers to the universal process of effectively and efficiently getting activities completed with and through other people. For the implementation of strategies and getting all the activities to be done properly with an organized environment. as employees are satisfied to the work assigned and authority structure. • Staff level At the staff level. leading and controlling. His authoritative style is the requirement of administration. are performed to achieve the desired objectives of the organization. I observed the environment of uncertainty and deregulation in the bank to a little extent. Department managers always ask his subordinates before referring the solution to a problem to the Branch Manager. These functions are being performed at three levels in Bank Alfalah. organizing. • Department Head level Department heads are responsible for the overall operations of the department assigned. • Managerial level Administrative style of Branch Manager is authoritative.
and employees are motivated in order to enhance their performance and achieve the derived goals. The management styles adopted by the bank affect greatly. Motivation can be defined as a willingness to expend energy to achieve a goal or a reward. The employees are happy and are also productive workers. and thus exhibit high productivity. which can arise due to strong authoritative actions by the management. Job attitudes and morale are quite positive for two reasons. The following important aspects need consideration. • Motivation The term motive implies action to satisfy a need. This is due to the fact that employees have been given equal importance as been given to high level operatives. Firstly employees gain 38 .IMPACT OF MANAGEMENT STYLE ON EMPLOYEES Management styles have a great impact on the overall working of an organization. these issues have never been provoked till now. • Morale and Productivity The employees of the bank possess high morale. The key issues. can be of the following nature: o Absenteeism o Irresponsible behavior o Coordination o Reporting time delays o Turnover But at Bank Alfalah Ltd.
social satisfaction from interactions at the work place. Working conditions and supervision are good. In other words we can say that management should put its eggs in the basket that creates a high-motivated work force. THE STRATEGICAL HIERARCHY The Strategic management model provides a conceptual basis for applying strategic management. secondly high morale results from high motivation to produce. so in due response. At Bank Alfalah the employees are very much satisfied with the job and the overall working conditions of the bank. the bank is enjoying high efficiency in managing the time delays in reporting and working operations. • Job efficiency and satisfaction Consequently the overall impact of the well-equipped management styled organization is the job efficiency and job satisfaction. Alternate strategies that an enterprise could pursue can be categorized into 4 actions: • • • • Integration Strategies Intensive Strategies Diversification Strategies Defensive Strategies 39 .
40 . backward integration. Vertical integration strategies allow a firm to gain control over distributors.Integration Strategies: Forward integration. horizontal and conglomerate are some of the strategies. market development. Defensive Strategies: Another way to pursue strategies is through the defensive way. Diversification Strategies: Concentric. and product development are sometimes referred to as “intensive strategies” because they require intensive efforts to improve a firm’s competitive position with existing products. divestiture and liquidation strategies. which are inculcated under the head of diversification strategies. Overall. Intensive Strategies: Market penetration. which includes joint venture. retrenchment. and horizontal integration are sometimes collectively referred to as vertical integration strategies. suppliers. and/or competitors. diversification strategies are becoming less and less popular as organizations are finding it more and more difficult to manage diverse business activities.
WORK DONE BY ME
I was been assigned by our department, Bank Alfalah Ltd, Garden Town Branch, Lahore as my internship organization. There I worked for about eight weeks. I worked in three departments. I started up with account opening (operations), where I worked for about three weeks and learned about different types of accounts, and how to open a new account, etc. I was working under the supervision of the Manager Operations, Mr. Raheel Yaqoob at my internship in that department. After working in Operations, I was moved to Credits, where I learned that how finance is advanced to the clients and different types of facilities the bank is providing to its customers. There I worked for about two weeks with Mr. Ateeq-ur-Rehman Sidu officer of CAD Department Mr. Ahmed Moin Lodhi officer of car Finance Department and under supervision and training of the employees working as the finance officers as well.
Garden Town Branch has got a wide range of excellent services departments been supervised under the best ambiance and a very well educated staff. The following list is showing the main departments at Garden Town Branch • • • • • • Operations Department Agri Finance Department Car Finance Department Accounts Department IT Department The Credit Administration Department
Now, I am going to discuss the six departments with which I was in touch during my internship program. That is, the Account Opening department, the Remittance department the car finance department, the Accounts department and the Credits department.
THE ACCOUNT OPENING DEPARTMENT
Borrowing funds from different sources has become an essential feature of today’s business enterprises. But in the case of bank borrowing funds from outside parties is more vital because the borrowed capital of a bank is much greater their own capital. Banks borrowing is mostly in the form of deposits. These deposits are lent out to different parties such deposit creation is done through open an account in the bank. The department that is responsible for opening and closing an account assumes immense significance and holds a central place in the basic banking operations. The Account opening department was the very first experience of my practical life being working with a bank, during my internship with Bank Alfalah Ltd. This department is the best way to start with the banking career or training. This is because the ways you deal with the customers give a lot exposure to you for the coming
days in banking because the bankers are always in contact with customers as customers are the biggest source of assets for the bank. I really enjoyed my stay at this department as I got to interact with the customers directly for the first time. I was given under the supervision of Mr. Naveed Khalid, who is the Incharge of Accounts Opening. During my stay at this department I got to fill the forms of individuals who wanted to get their accounts opened at Bank Alfalah Limited, fill the cheque and deposit slips of customers who were not literate enough or needed instructions, and I also got the opportunity to give advice to the customers regarding the requirements of account opening and the benefits of opening an account with Bank Alfalah Limited. Working with the Accounts opening department gave me a lot of courage as it taught me the way that you should deal with the customers of the bank. Now coming towards the documentations, stuff requirement at this department for the accounts opening process.
Types of Account
♦ Current Account. ♦ Saving Account. ♦ Notice Deposit. ♦ Term Deposit.
• Current Account
The current account is the most common account and the most preferred amongst business concerns. The theoretical explanation for this would be that they can function more efficiently but since in reality there are no restrictions on any withdrawal. The only reason we can think of is that current account facilitates online banking which saves time to a considerable extent. No interest is being credited to the customer’s accounts that are
There is no interest on these accounts. Non interest bearing checking account. The minimum balance requirement for opening the current account is Rs. • The PLS Savings Account: The purpose of this account is to introduce the habit of saving individuals in the neighborhood. Current account is mostly opened for business.maintaining the current accounts with the bank. The PLS savings Account is meant for those people who have got an aptitude towards earning some profit on their amount deposited for sometime with the bank. 1. It is only for transaction purposes. As there is no profit paid on this account. Individuals who wish to earn profit/interest on their investment normally maintain the profit and loss sharing account but in order to earn interest the client is required to keep 44 . The minimum balance requirement for opening the account is Rs. • BASIC BANKING ACCOUNT: • • • • • Initial deposit for account opening is Rs. Maximum 2 deposits & 2 withdrawals through cheque are allowed. They paid on demand. paying all checks drawn against him to extend of the balance in the accounts.000 with no minimum balance requirement.5000. Where a banker accepts.000. No restriction on ATM withdrawal. The profit on saving accounts is paid on the basis of profit and loss sharing at 2 % per month. Free debit card can be used to withdraw cash and make purchases at thousands of outlets across Pakistan which provides access to funds 24 hours a day. 10. Current account enables the client to do cash transactions in a more efficient manner. it is also called checking account because cheque can be drawn on it.
25 % to 6.000. The interest/profit is paid half yearly.50 %. The minimum balance requirement for opening the account is Rs. ♦ One for which a prior notice of 30 days and is required from the customer before withdrawing deposited amount and for which rate return is 4. ♦ Second for which a prior notice of 30 days and above is required from the customer before withdrawing deposited amount and for which the rate of return is 4. 5000 and payment is drawn on maturity of the specific period.50 %. • TERM DEPOSIT A term deposit is a deposit that is made of a certain period of time. At the end of specific period the customer is allowed to with draw the principal amount. • NOTICE DEPOSITS Notice Deposits are kind of fixed deposits.his/her deposits with the bank for some time. there are some restrictions on withdrawal of money from a Profit and Loss sharing account but in general banking practice there is no restriction on any with drawl from a Profit and Loss sharing account.00%. NOTICE DEPOSIT IS OF TWO TYPES. For this purpose. 50. The rate of return of this account varies from 3. The term deposit account varies from one month to 3 years and the minimum balance requirement is Rs. PROFIT CALCULATION METHODS DAILY PRODUCT BASIS Deposited Amount × Rate of return 45 .
893 billion Current Accounts.. Rs78.234 billion Others……………………………………………Rs.851 billion Saving Deposits……………………………….. ⇒ is specified as mailing address. 3.365 (No. of days in a year) AVERAGE MONTH BALANCE Sum of daily end Balance × Rate of return No. ………………………………Rs58. Rs. The amount of profit is given to deposits in three ways: ⇒ Cash payment (only in case of term Deposits). Or as per customer By sending bank draft to depositor’s home address or officers or whichever The depositor’s account is credited at maturity. of days in month MINIMUM MONTH BALANCE Any minimum balance during the month is taken for calculating profit SAVING A/C (05 DAYS _ MINIMUM MONTHLY BALANCE). Less balance is calculated for profit. ⇒ Amount of Deposits & Other Accounts in 2008 Fixed Deposits………………………………….616 billion Financial institutions 46 . Minimum Balance of first 5 days is compared to the minimum balance of the minimum balance of remaining 25 days. requirement.88.
of course. 24. The currencies include o Pakistani rupee. Particulars at the Account Opening Form: In the account opening form the client is required to provide the following information. 9.509 billion The main document in this department is. 0.892 billion Non-Remunerative Deposits……………………..685 billion Total Deposits………………………………… Rs.021 billion Particulars of Deposits & Other Accounts In Local Currency………………………………… Rs. 214.S. Rs. o U.Rs.Remunerative Deposits…………………………. The first part establishes the currency in which the account is to be maintained / operated. dollar o Pound sterling o Euro The second part then establishes the preference regarding the type of account to be maintained. the Account Opening Form. 239. Rs.824 billion In Foreign Currencies……………………………. The various choices offered are 47 .
there are different types of account holders are required for all these types of account holders. during my internship at the Account Opening department at Bank Alfalah Ltd. The operation/procedure requirement that is needed for “Individual Account” differs greatly from the “Joint Accounts” proprietorship A/C. Title of the account is to be written in block letters. The client is supposed to provide the information whether the account would be maintained singly (only one person operates the account) or jointly (two or more than two persons maintain the account). o Royal profit For the chequing account. Occupation of the prospective account holder. Garden Town Branch. 48 . The name of the person who intends to operate the account.o Savings account o Current account. I found out the following documentation and writings are required in order to open an account with us: The first thing mentioned at the account opening form is the Title of the account. Private Limited Company A/C and Public Limited Company A/C. Now. Partnership A/C. Provision of either Father’s or the Husband’s name is also a pre-requisite. By title of an account we mean the name (either of the individual or of the business concern) with which the account is to be opened and operated.
Passport number. if the prospective client has got one. address and relationship of any one of his/her close relatives in order to facilitate the communication problem. if some peculiar circumstances arise. The name and address of a close relative is only recorded in order to undertake necessary communication when needed. get the profit out of his account but this is not the case. The national identity card. The prospective client also has to provide the name. Nationality of the Account opener Country of residence is to be specified. Contact numbers both the cellular and the landline numbers are to be provided in addition to the segregation of the residential and the office phone as well. The name and complete address of the employer. of course is an integral part of the account opening application. In case of a business concern there are two more things that are to be provided by the business. The clients often have a misconception that there next of kin might. Type of organization The various types of organization which are present in Pakistan at present are: 49 . Another requirement is the date and place of issue of the national identity card.
The introducer is a person who already has an account in the same branch. or other banks are also to be given. date of incorporation. It can also be a person from the staff of the branch as well. and account number of the introducer is a very essential prerequisite in order to facilitate the opening of an account. This introduction is the mandatory requirement in order to open an account in order to trace out the defaulter in case of defaults. signatures. brief description of the business. 50 . The choice of either the deduction or non-deduction of zakat also needs to be highlighted. The name.. national tax number. and place of incorporation. telephone number and fax number. Details of other accounts maintained with other branches of Bank Alfalah Ltd. Zakat is deducted out of a Musharakah savings account and not in the case f the current accounts. Public Limited Company Private Limited Company Partnership Association/Club/Society Sole-Proprietorship Some special documentation is also required like the certifications regarding the incorporation and commencement of business and the Form 29. The business concerns also have to give their full name..
‘jointly’ or ‘any one of us’. After this three signatures of the client are needed and if it is an account of a business concern then the rubber stamp of the company/organization is also needed below the three signatures. card. Customer signature admitted by officer. Then the client also has to put forth the instructions regarding as to whether the account would be maintained on the basis of ‘either or survivor’.C photocopy attached.S. 51 . Mention next of kin (nominee) Name and A/C # of introducer. 25. If the mandate is given to a person all join account holders must sign as an evidence of their approval. 5000/. In case of a joint account all the persons unanimously might give the right to operate the account to one person. Signature of customer on back of AOF. INDIVIDUAL ACCOUNT Any individual or proprietor of business can open an individual account at BAL. N. Following requirements has to be fulfilled for this account. This right is also termed as mandate for joint account. PLS (profit and loss sharing) saving accounts can be opened with the minimum balance Rs.with expected profit rate is 2% on Rs. The names of persons are written on the title of A/C and on S.I. Verified sign of introducer. Letter of thanks.000 or above.
Mode of operation. The names of persons are written on the title of A/C and on S. The details of these documents are given below. card.S. In case of account opened by a business concern there are some documents that are needed to be attached with the account opening form. REQUIREMENTS Sign of both customers on back of AOF Sign on joint A/C # mandate Name and A/C # of introducer NIC copies of both members. Limited Company: Copy of certificate of incorporation Memorandum and Articles of Association List of Director’s Copy of the board resolution Certificate of Commencement of Business Copies of CNICs of Director’s Latest copy of Form-29 52 . Joint A/C cannot be opened by single person. When two or more person neither partner nor trustee open account in their name is joint account. Both persons have to sign on cheque.JOINT ACCOUNT When different people want to or need to share a single account it is called joint account.
Club/Society/Association: Copy of rules/ by-laws Copy of registration (if applicable) List of Executive member management committee/management board etc Certified copy of Resolution NIC of all members of the management body Sole Proprietorship / Individual: NIC/ Passport photocopy Letter from Proprietor confirming “sole proprietorship” Term and Conditions Governing the Account Account (I) Each Account will be allotted a distinctive number.Partnership: Partnership deed certified copy NIC photocopies of all partners. Partnership mandate for account signed by all the partners A letter duly signed by all the partners containing the operating instructions of the account also has to be taken. 53 . which should be quoted in all correspondence with the bank relating to the account.
Minimum Balance Subject to the regulations of State Bank of Pakistan. (IV) In receiving cheque/instruments the bank acts only a collective agent of the customer & assumes no responsibility for the realization of such cheques/instruments. customer do so for account and the sole risk of the customer. (V) The bank shall recover return cheque charges at the rate fixed by the bank by dividing the account on every cheque deposited for collection and return unpaid. (II) If the amount indicated on the deposit slip differs from that “later cash account” the banks count shall be final and conclusive. (VI) The bank is realizes the services of other bank. The customer shall not draw against unclear cheques/instruments though credited. Deposits (I) All deposits in the account should be accompanied by pay in slip showing the correct title & account number to be credited. the customer should maintain a minimum credit balance in the account as may be prescribed by Bank from time to time. The bank assumes no liability should the instruction is transmits is not carried by such banks. (III) Proceeds of a cheque deposited in the account for collection will be value dated after receipt of the proceeds thereof.(II) The account should be subject to the applicable laws of Pakistan and prevailing rules. The bank reserves the right to close the account after giving 14 days notice if the customer fails to maintain the required minimum balance in the account. 54 . The bank may refuse to accept such cheques/instruments drawn in favor of third party. regulations and directives of the State Bank of Pakistan.
In case of loss or theft of the chequebook or any cheque leaf. The bank reserves the right to withdraw cheque book facility without notice if in the opinion of the bank the account is not being maintained or operated in accordance with these terms and conditions or for any other reason. neglect. irrespective of whether the minor account holder continues to be a minor or not unless the bank receives written instructions from the guardian or a notice to the contrary from an appropriate authority. and failure of any correspondent bank. default.(VII) The bank shall not be responsible for the delay or loss in transit of any cheque not for any act. the bank shall be entitled to act on the instructions received from the guardian name on the account opening form. omission. agent or sub agent or for any reason beyond the control of the bank. Minor’s Account In respect of an account opened in the name of a minor. the customer will inform the bank. Statement of Account 55 . (II) The customer shall exercise care when drawing cheques and agree that cheques will not be drawn in a manner which may enable a cheque to be altered in a manner which is not readily detectable. Withdrawals (I) Withdrawals from the account shall only be made by using cheque books supplied by the bank at the request of the customer. (III) The customer shall ensure safe keeping of the cheque book and shall not allow access to the cheque book to any unauthorized person. if he will not then he will be himself responsible for any loss.
Death of a Customer In case of death of individual customer.The bank shall quarterly or at such other interval as it may deem fit send to the customer statement of account and the customer shall check the entries made therein. the bank will permit no withdrawal from that account after receiving notice of customer’s death. Now. Hold Mail Facility Upon written request of the customer. except on production of a succession certificate or other court order from a court of competent jurisdiction. provided the necessary details of the lost/stolen cheque given by the customer. the customer will notify the bank within 14 days of receipt of the statement. The customer accepts all risks and responsibilities in this regard. The customer hereby waives his right to question any detail appearing in the hold mail communication or statement of account irrespective of their actual receipt. 56 . Stop Payment Instructions The bank may. there are some documents that are always there with the account opening forms. accept stop payment instructions from customer if a cheque is reported lost or stolen. in its absolute discretion. These things need to be filled in by the customers efficiently and carefully. In case of any discrepancy or error in the statement of account. Cheque Book Requisition. the bank may in its sole discretion provide a hold mail facility. These are: Signature Specimen Card.
occupation. Completion of The Form: The name. which are scanned and stored in an intelligent terminal for future use and reference. The officer says that first fill up a prescribed application form. The client also fills it up and submits it along with the account opening form as a result of which he is issued a Chequebook once his account is approved. If he/she wants to open a PLS A/C. and makes a request for opening of an A/C. One signature of the person is taken on the face of the form and one is taken on the backside. The Cheque Book requisition basically serves as an application to issue a Chequebook. These signatures should be usual signatures and he would operate the account with them future.The Signature specimen card basically contains information that is basically a repertoire of information given in the account opening form. Introduction: 57 . then he/she has to fill a form according to the account. and complete address of the person opening the account are written in the columns are provided in the form. but in this card the client vividly puts his signatures as a specimen. As regards the Chequebook one of the most important entries in a Chequebook requisition is the series number of Cheques that correspond with the numbers of the cheques contained in the Chequebook issued to the client Procedure of Opening an Account The Account Opening Form: When a client comes to the bank.
Account Number: As now a days Bank Alfalah has acquired centralized banking system where all the branches are directly connected to Head office. In case of more than two joint account holders more than one SS card are required.The introduction of a current account holder is accepted for the opening of either a current account or a solving account.S Card. The account numbers of various accounts start with the following series Account title Current account Saving account Royal profit account Term deposit account Account number 01 02 029 03 58 . When this procedure is completed. Due to this system the process of account opening becomes fast and also there is no chance of any mistake. S. this information is entered into centralized data base. the system automatically generated the account number of that customer. The signature of the account-holder introducing the account is obtained at the place provided for in the account opening form. In case of joint account two applicants can sign on one SS card. Specimen Signature Card (S. Every time a cheque is presented for payment. the signature on the cheque is verified by comparing it with S. When customers give all the information about him. The introduction of saving bank account is accepted only for saving bank accounts. Card): It is card on which specimen of applicant’s signature are taken for future reference.
Normally BAL issues a chequebook having at least 25 leaves. sign it properly and mentions the no of leaves he requires.25 leaves o Foreign currency $ .25 leaves o Current account . The A/C holder mentions title of A/C.Car finance account Agri finance account 0191 0141 Issuance Of Cheque book: After opening an A/C with the bank. They include: o Stamping every leaf with specific A/C number. o Enters it in the chequebook issue register. Entry Of cheque book: Before issuance of a chequebook. 59 . the employee performs certain functions.50 leaves o Current account .10 leaves o Foreign currency £ . Every chequebook also contains one leaf that is used for another issue of a Chequebook Bank Alfalah issues the following chequebooks. A/C number.10 leaves Loose cheques are also issued in some cases. the A/C holder once again makes a request in the name of bank for the issuance of a chequebook. o Saving account .
o Check whether or not a senior officer has verified the signatures. separate files are maintained in which the forms are pasted or punched in numerical order and kept under lock and key in fireproof steel or safe. The client who wishes to close an account first has to give an application. Record of all the transactions regarding the account of a customer is kept updated in the computer. This is because these forms are the basic documents of the contract with the customer. duly signed on the pre-printed application of the bank. if no then first he gets them verified. the following steps will be followed. Filling Of Account Opening Forms: For current and saving account. Currently. Procedure Followed In Order To Close An Account: Now. Maintaining the Computer Record: After opening of account. o If the check book is of photo account then be sure that each and every leaf of cheque book should carry photo account stamp After entry in the manual register. coming towards the procedure for the closing of an account at Bank Alfalah. the employee issues the chequebook to the A/C holder after his/her signature on the register. The client has to attach this 60 . all information regarding the account is entered into the computer. a program named Bank Smart is being used for this purpose.
61 . Along with the application to close the account client’s Chequebook is also received from him and then it is destroyed in order to prevent any misuse in the future. The client can also give an application on a plain paper. so at the time of closing the balance should be Rs. A liability form is filled and sent to the Credit Department in order to Cheque that the customer does not owe the bank a single penny in any regard.150. One thing has to be taken into immediate consideration that the account number allotted to the client (who has closed his account). If a client wishes to close a current account then the bank charges Rs. after closure of the account becomes useless and is not allotted to any one in the future. After approval of the liability form. Then it has to be made sure that if the account to be closed is a saving or Royal Profit then the account balance before closing should be zero.application with the liability form (explained below). A debit voucher and a credit voucher are also attached to the liability form. but correct signatures are very necessary. When the Credit department approves that the customer does not owe any money to the bank and the form is returned to the account opening department then the original account opening form pasted in the ledger when the account was opened is marked ‘account closed’ along with the date on which it is so marked.150. In case of these two types of accounts the bank does not take any closing charges. it is sent to the Cash Department so that the officer who scanned it in the first place could return the specimen signature card to the account-opening department.
the client’s application along with the specimen signature card is pasted in the ledger right along side the original account opening form. In the computer as well all the entries and records related to that particular account is permanently deleted by using the ‘close account’ option. after filling in the name and account number of the client forwards this form to the credit department and the trade finance department who upon receipt of such liability form make required scrutiny so as to check whether or not the customer owes some money to the bank or not. The client gets this Performa from the account-opening department and then. Vernacular Form This form basically functions as a thank you letter (and also as a request) on behalf of the customer if he wants to operate his account by doing signatures in a language other than that of English. Card is received back from the concerned official then the liability form. after filling it up. In this particular form the client gives his 62 . Important Documents Used In the Account Opening Department Liability Form This particular form is used when an account is to be closed. The staff of account opening department. Once the S. gives it to the computer section that gives the statement to the client in printed form. The form has to be pasted with the original account opening form even if the account was opened a decade ago. Account Statement Request Form This small form is used to request for the account statement for the desired period. S.
They write the type and quantity of the stationary they need. Application To Close The Account This is a pre printed application of the bank in which the client fills in the account number. 63 . get it signed by the Manager Operations. statements and other necessary document which the bank might send through mail depending upon the circumstances. the title of the account and the type of account and requests the branch manager to close his account with the Bank. stationary) they need. Application To Change The Address This is again a pre printed request form in which the client fills in his name.g. give it to the person in-charge of issuance of stationary who on receipt of this requisition (duly signed) issues the stationary. telephone number/s and the new address so that he could communicate with the bank and receives all the notices. Issuance Requisition This requisition is used by the staff to order for any thing (e. The debit voucher shows as to how much amount has to be taken from the client’s account and the credit voucher shows as to how much amount has to be credited as Bank’s income. in order to facilitate the account closing process.assurance in writing that he would indemnify the branch against any loss that may be caused by reason of his signing in a language other than that of English. Debit And Credit Vouchers These two vouchers are basically used when an account has to be closed. account number.
Zakat Deduction Authorization 13. NIC / Passport 10. Telephone Number 8. I was being supervised by sir Naveed at that critical time who was a very ebullient person and make me lighten up to a greater extant. Alternate Mailing Address 7. university fellow and admirer of Hailey College of Commerce. This was the first ever experience of my life regarding working in any professional environment with practical people working around. Signature on Bank’s Terms and Conditions 24. Mr.Account Type My experiences during internship in Accounts Opening Department: During my internship at Bank Alfalah Ltd. Account opening Approval 3. Specimen Signature Card 19. Currency of Account 11. Naveed Khalid (Incharge of Account Opening) was very much keen in telling me all the details of all the workings of that accounts opening department. he went very supportive to me. Related Account Information 12. Garden Town Branch. Nationality 9. Hold Mail 14.Discrepancies: If there is fond any discrepancy in any of the following particulars then the form will not be entertained: 1. Thirty Party Mandate 18. Customer Name 4. Being a former PU student. Segment Code mentioned 23. Check Book Ordered 20. Joint Name (in case of joint account) 5. my experience was very good while working in the said department that is the Accounts Opening Department. Proof of Guardianship in case of Minor’s Account 17. Date of account opening 2. He was also very 64 . Next of Kin Information 16.Either or Survivor Instructions 15. Introducer’s Signature Verification 22. Introducer’s Name and Account number 21. Mailing Address 6.
to me. which have to be incorporated in the account opening form. He comes to the issuing or originating branch. Remittance Department Remittance department comes under the category of the ‘Domestic Banking’. I did mistakes as well while opening of accounts regarding stamping at the correct place and writing account titles. This is the thing. PARTIES TO A REMITTANCE • REMITTER One who make a remittance. which I observed that employees at Bank Alfalah are very cooperative and supportive. • REMITEE 65 . During my stay at the accounts opening department.hardworking and supportive type of a colleague to me. By remittance we mean transfer of money from one city to another. This is the reason why the customer satisfactions provoking all along in the branches of the bank. He told all the stamps. Hence this department deals with the transfer of money using different mode from one place to another. But he never ever said a word to me regarding that. Naveed Khalid. Whenever he was busy in doing a work regarding the accounts opening things he never forgot to tell me what he is doing and what is the purpose of doing that thing. I got a chance to open some accounts after the approval and due verification from my supervisor Mr. He may or not be the bank’s customer. ask for a remittance to be made. He taught me each and every thing that can happen in the accounts opening department also direct me about the procedures of other banks dealings. and deposits the money to be remitted. The bank charges him for the remittance.
Usually located in a different city or country. 66 . • PAYING BANK Also known as the drawee branch (The branch on which the instrument is drawn. or Mail Transfer.Also sometimes called the beneficiary. or the payee (the person to whom the remittance is made/ the one who receives the payment. PRINCIPAL DUTIES: - The principal duties this department is performing are as follows 1. It consists of four copies. It is an instrument in writing signed by the banker containing an unconditional order to pay certain amount to or to the order of certain person for payment on demand or otherwise as future determinant time.) • ISSUING BANK The bank that affect the remittances. It has to make the payment). Pay Slips 2. Pay orders 3. If it is made through cheque than it is necessary that person must be account holder while in case of cash any person can make. through the Demand Drafts. Money Gram DEMAND DRAFTS Demand Drafts (DD) are a bill of exchange. Demand Drafts (DD) 4. Rupee Travelers Cheque (RTC) 5. Telegraphic Transfer.
1) 2) 3) 4) Original copy which is given to account holder. Last copy is sent to head office for reconciliation. (which is entered after the computer entry) 67 . CHEQUE COLLECTION (ALL BRANCHES IN PAKISTAN) ETC. RECORD No manual record of the demand draft is kept.E. PURPOSE: AS THE NAME SUBJECTS DD IS CITY. Third copy is for reconciliation. TRANSFER. MADE ON THE REQUEST OF THE CUSTOMER (WHICH MAY OR MAY NOT BE THE ACCOUNTHOLDER OF THE BANK) IN FAVOR OF ANOTHER CUSTOMER OR PARTY IN SOME OTHER THUS IT IS A MODE OF PAYMENT USED BY ONE CUSTOMER TO PAY ANOTHER WHO MUST BE RESIDING IN SOME OTHER CITY. PAYMENT PAYMENT OF DD CAN BE MADE THROUGH ALL MODES I. DD advice is sent to the central branch. DD APPLICATION SLIP On the DD application slip enter the Date Branch name draft no. only the record is saved in the computer at the time of making the demand draft. CASH.
In favor of (the name of the person or party) Drawn on (the city name and the branch code of BAL ) Amount in words as well as in figures Commission charged is entered Signatures of the applicant are taken Then it is signed by the in charge remittance and the customer deposits the money against this slip. Full name of the payee should be mentioned. Amount in words and figure should not differ. Scrutiny Of application Form: There should be our bank’s branch at the place where payment is desired to be made. COMPUTER ENTRY In the system enter into the ‘DD’ section then enter the • • • • • • • Name of the person who is being favored Branch code at which draft will be drawn Bank code of that branch Name of the person to whom the draft is being issued The account no of the issues (if he/she has an account with our branch) The total amount of the demand draft is entered The commission charged is entered (computer usually perform this job automatically) 68 . The DD slip is available with the attached forms. Purchaser’s name address and telephone numbers are complete.
Entry of DD: Entry in BAL GTN branch Yellow slip DD Payable credit H.off debit DD credit --------------------------------------------------------------------------------------------------- Issuance Pink Slip H.off credit DD debit ------------------------------------------------------------------------------------------------------- Entry when customer will draw amount from DD 69 .off debit --------------------------------------------------------------------------------------------------- Entry in H.off Karachi branch H.
PAY ORDER Pay order is also a bank instrument a bill of exchange. When the computer record has been saved now the advices are made in the favor of the bank on which DD will be drawn. There is a separate slip for the pay order application. Now press yes for the print of DD. The advices for BAL branches are sent directly to that branch through mail. parts both are given to the customer. which is in two. The pay orders issued from one branch of bank can only be drawn at the same branch.DD payable debit Customer credit ----------------------------------------------------------------------------------------------------------- The DD number appears at the end which is entered on the ‘demand draft application form for record purpose. All the procedures for the pay orders are similar to the demand drafts except the charges and the record keeping which are given below 70 . The pay orders are usually used for the payment within the city. that’s why it is generally referred to as Banker’s cheque.
The computer record keeping system is similar to that of the demand drafts.RECORD KEEPING: The record of the pay orders is kept in both the computers and manually in registers. to whom the pay order is being issued. Where as in register you enter the • • • • • Date on which the pay order is issued. Payee. Amount of pay order is entered then the officer signs it. Date of the payment and the remarks are taken. Entry of issuance “pay order” Customer debit Pay order credit ------------------------------------------------------------------------------ Entry when customer get amount from “pay order” 71 . Pay order number.
company or local authority ii)Issuing / paying branch: this issues / pays on presentation.Pay order debit Customer credit --------------------------------------------------------------------------------- Following are the parties to a pay order: i) Purchaser: Is a person. 72 . The pay slips can only be drawn on the same branch of the bank. On the pay slip Enter the name of the party as ‘Messrs’ The reasons of payment i. Only the record of the counter file of the slip is maintained as a record at the bank of which two signatures of the beneficiary are taken. There are no charges for the pay slips. repair. PAY SLIPS The bank for the settlement of its own payment uses this instrument. firm. They are used to meet the miscellaneous expenses of the bank. releases of security etc are written as ‘on account of’.e. No manual or computer record of the pay slips is kept. iii) Payee: is a person named therein.
5. 73 . On the slip the signatures of two authorized bank officials are must. cheque. According to the government policies only the RTC’s of rupees 10.000 or in multiples of 5. RUPEE TRAVELERS CHEQUES These are the banks instruments issued to only major account holders of the bank. 10. ISSUING BRANCH The branch that is issuing the TC will take the signs of the customer on upper part of the cheque.The amount in the RTC (the application for rupee travelers cheque) is entered in multiples of 10000 as per request of the customer but separate cheque are issued against it each of RS. The payment mode used for the traveler’s cheque can be cash.000 are being offered to the customers . The yellow copy is for the record and the blue one is for the head office. and cash. the president of the bank and it already signs cheque is also signed by an authorized person at the bank. remains with the customer with the agreement at the back of it. TC’s are issued to the facilities the customers during the travel. Transfer. authority letters. The payment of the pay slips can be made through any of clearing.000. This copy is must to be shown lost for the reimbursment. transfer (same city branches).Signs and stamp of the beneficiary are taken. There are the three copies of the travels cheque application.000 & 5. collection (all branches in Pakistan). The white copy. Collection (all branches within Pakistan) the pay slips can issue to both minors and majors. All the travelers’ cheque is credited by the head office ‘HO’ accounts.000 as per request of the customer but separate cheque are issued against it each of RS. which is also known as ‘agreement’.
NIC. phone no. name etc into the system. Person has to show NIC and tell compute introduction after that he can obtain money. and compute the simple form. Another words we can define credit as “trust in one’s integrity in money matters and ones ability to meet payment when due”. 74 .” PROCEDURE • • • • Person must have reference no. Person must tell reference no. “The quality of being credible or trustworthy”.e. in collaboration with money gram offer remittance services to Pakistan.no. Credit means belief or trust. PAYING BRANCH: On the next date when the cheque is presented in the paying branch (any BAL branch in PK) same signatures on the lower part of the cheque are taken and the bank officer cheque whether they match or not. MONEY GRAM Bank Alfalah Limited.The issuing bank send one copy of RTC application to head office and keeps other with it after entering all the account opening conditions i.no. “It’s basically a person to person money transfer service that allows consumer to receive money in just a few minutes. address. THE CREDITS DEPARTMENT The sum of money that a bank makes available to client in excess of any deposit. NTC.
Risks involved in Lending Though lending is main source of earnings for any bank but it is risky as well. On the other hand bank lends the deposits to borrowers and charges interest on the lending. It attracts corporate accounts. Performance of all other departments is dependent upon “Credits”. Whenever money is advanced to any customer there is always a risk involved of default.” Importance of Credits CREDITS are the most important department of a bank. as a company prefers to do import and export business from the banks from where it is availing limit (credit) facilities. To minimize the risk involved BAL gives loans to credible customers. This function is performed by CREDITS in any bank Credit philosophy at BAL “Banking is an art of striking between risk and revenue” “The extension of a credit facility should add value to the bank’s assets. because: • • A bank receives (borrows) deposits. It pays cost on these deposits. Sub Division of Credits CREDITS are further sub divided into two sections: 75 .Purpose of Credits Earnings of a bank are dependent on CREDITS.
They must have complete information of trends in the industry. always prefers to give loans to credible customers. Bank Alfalah Ltd. integrity and willingness to pay? Capacity How is the business managed? What are its strength weaknesses? What is the business capacity to generate the funds to repay? Capital How solid are its financial and human resources? Are financial resources matched with adequate human resources? 76 . However several precautions are followed to give loans to only credible customers. as the aim of bank is to recover the money at time and through earnings of the client and through liquidation of securities. For this BAL requires information about: Basic “Cs” of a Credit: Character Who is the borrower (company)? What is its reputation for honesty.• • Credits Marketing Credits Administration The above-mentioned two sections perform the overall activities of credits. Role of each section is discussed below: Credits Marketing: Marketing personnel is responsible for attracting customers to bank for advancement of loan facilities.
etc. professional standards and tools are not exercised. disbursing and monitoring of the credit. what value will be realized at liquidation? Carelessness While evaluating. Complacence When the information and data base on which decisions are to be made. credit recovery and bilateral relationship with borrower.financial benefits at the cost of the lender Credit Line Proposal: 77 . Concealment When certain important facts are deliberately and willfully conceal from the management which could have undermined security. are not accounted for which tacit understanding of favoring the client. debt servicing. financial position. Collusion When a bank officer and borrower willfully join their hands for achieving some ulterior motives Corruption When official matters are dealt with for financial and non. are accepted without any critical evaluation Connivance While certain adverse aspects observed in the operating performance.Conditions What is the condition of company within the economic cycle? Will the economic and business conditions impact the borrower’s ability to repay? Collateral What is the real liquidation value of the collateral? If the creditor is forced to use thee collateral as payment.
A CLP is prepared on the basis of above facts. It is a highly responsible task because in case of default liquidation of securities is an important source for bank for recovery of loan amount. • • After fulfilling the entire formalities loan is advanced. Other important functions such as adjustment of loans are also handled by administration section. If HO is satisfied then it gives a “CREDIT ADVICE”. It is forwarded to HEAD OFFICE. securities. After the approval of CREDIT LINE PROPOSAL. This letter gives a detail of the terms and conditions such as duration of facility. Offer Letter: On the basis of credit advice the branch prepares an “offer letter”. After the disbursement of loan marketing personnel keeps track of every activity of the party. mark up etc. It performs very important functions for the bank. Detail of credit line proposal prepared by marketing personnel is given below: Credit Administration It is the second section of CREDITS. Nature of the Risk Exposed To a Bank • • • Credibility of the sponsors Financial standing Professional capability 78 . it comes to Administration section. They continuously observe the financial statements of the customer. The Administration decides the terms and conditions regarding securities offered against the facility given to a client.
data and information Reliability of the basis assumptions underlying business and financial projections misappropriation Unauthorized advances to sister concern. cost of production. evaluators. affiliates undertaking Agent transactions Product obsoleteness. waning market and threatening market environment Inconsistent and ineffective marketing plans and business strategies Obsolescence of the technology and lack of adaptability High interest rates Liquidity risk Inconsistent government tariff policies and their impact on the selling price. Willful management Credibility of credentials.• • • • • • • • • • • • • • • • • . profitability etc International environment and inter-country business risk Currency exchange rates deterioration Credibility and poor performance of Muccadams Credibility of surveyors. pre-delivery inspectors Over capitalization Credibility of the auditing firms Types of borrowers Individuals Existing account holders staff members Close relatives of staff members Business sponsored by staff members Employees of other banks 79 .
to ensure that the company is legally qualified to do business. To ensure that the company is currently existing and is in good standing. and request the borrower to furnish certified80 . storage and warehousing Property dealers Manufacturers While lending to any of these parties the credit officer of BAL has to check the following things. COMPANY: Where a company is a borrower the credit officer must ask and keep on record following information: The certificate of incorporation The memorandum and articles of association The certificate of commencement of business and The last annual report containing accounts and balance sheet. 1. Credit officer should check with the registrar of joint stock companies. Joint accounts Businesses Entities Sole proprietorship Partnership Limited liabilities Company Joint venture Group account\s Others Clubs and associates Government bodies Traders Contractors Transport.
A letter signed by all partners. the credit officer must ask to see. 3. signed by all partners. Original partnership agreement/deed and the original certificate of registration which will contain the name of the partners and the date of their joining the partnership. requesting the bank to extend credit facilities to the firm Certified copy of the partnership deed and certification of registration. It is important that the borrowing company and its directors should have requisite authorization and power to borrow which should be reflected in the memorandum and article of association Also see “corporate resolution to borrow”. List of shareholders (current) List of directors With public limited company verify its existence and standing on the stock Exchange. also obtain the following document: normal loan documents signed by all partners continuing guarantee duly signed by all partners Resolution/authorization to borrow and execute loan documents. His financial statements for. An individual financial statement from each partner along these. PARTNERSHIP Where the borrower is a partnership. INDIVIDUAL Lending to an individual the credit officer must ask him to see. at least the previous three years. 81 . following documents. 2.
GOVERNMENT Where the government is a borrower. Legal counsel’s opinion should be taken in these cases. Credit Line Proposal (CLP): A CLP contains and takes into consideration following information: • Types of Proposal: o New o Renewal o Revision o Single transaction • • • • • • Names of owners and their shareholding Nature of business Existing and proposed limit for funded and non-funded facility Group Exposure for both funded and non-funded facility Purpose of each facility and Repayment Security both existing and proposed 82 . or mortgage. Depending on the amount advanced. hypothecation. the credit officer must ensure that the documents of indebtedness are signed by an officer of the government who is duly authorized in writing and or by the rules of business. The decision of extending credit to an individual borrower is necessarily a decision for the officer concerned based on the reputation and credit standing as a client. A continuing guarantee. 4. the loan should be secured by a pledge.
Customer Profile: • LEGAL STATUS: It specifies legal status such as: o Individual o Proprietor o Partnership o Limited liability company • • • • • Date if Incorporation Date of Account opening and Account Number History of Relationships with Bank History of Borrowing Relationship Information of whether account opening formalities are complete or not Line of Business/Main Products: Following information is required in this regard Sales break-up in various cities Market share Competitive brands Industry Profile and Market Position Summary of key Financials: It includes following ratios: 83 .
Reserves. Sales/Revenue. Performance during Last One Year: Following questions are considered: Are acceptance paid on due date Are all the instruments of TFs paid as per schedule Audit exceptions related to credit matters only Are checks returned due to lack of funds 84 . Days Inventory Details of Allied Accounts Background of Directors Management Central Risk (as reported by CIB) Liability Details: It includes liabilities with Allied Concerns and with other banks both funded and non-funded. Net Worth ROE. Current Ratio Paid-up Capital. Liabilities Working Capital. Days Payables. Debt-to-Equity Ratio Days Receivables. Net Profit Total Assets.
Account Statistics for the previous year: It shows: Maximum balance Minimum balance Date of latest adjustment of CF Branch Comments and Recommendations: Based on all of the above facts and information branch gives its comments and recommends different suitable facilities. credit division gives its comments and recommends different facilities. Prudential Regulations Compliance Checklist pertaining to Credit: Following matters are to be checked: Limit of bank’s exposure to a single person Limit of bank’s exposure against clean facilities Linkage between a borrower’s equity and total borrowing from bank Maintenance of debt-to-equity ratio 85 . Credit Division Comments and Recommendations: Based on all of the above facts and information.
Minimum information of the borrower: For this purpose bank asks for BASIC FACT SHEET.Opening of Account: It’s required that every reasonable effort is to be made for determining the true character of every would-be account holder. Industry Overview 86 . Financial Summary It contains: • • • Balance Sheet Income Statement Cash Flow Statement Security Analysis Sheet It contains analysis of the security offered for availing the facility. Latest report is obtained from CIB of SBP for funds and non-fund facility provided. Weight age to Credit Report: Due weight age is to be given to the credit report relating to the borrower and his group.
finished goods. It is a revolving limit. In this facility a 87 . WIP. • Cash Finance/Running Finance Cash Finance/Running Finance: It is a short-term facility given to companies for working capital requirements (raw material. Activity Ratios.It provides an overview of the industry in which a company is operating. Leverage Ratios and Liquidity Ratios are calculated. Financial Analysis Sales & Profitability ratios. receivables). More over utilization of the plant capacity over the years is also calculated TYPES OF FACILITIES These facilities are either: • • Fund Based Non-Fund Based Various types of funded and non-funded facilities are given below: Fund Based Facilities: Funded facility is that facility in which the bank funds are physically involved.
Parties involved: Three parties are involved: • • • Principal: to whom bank is giving guarantee on beneficiary’s behalf. Beneficiary: in whose favor guarantee is given. In this facility bank guarantees the payment of loan amount if the beneficiary fails to perform his or her duty at the settled time.specific limit is given to the customer. He is given withdrawing right up to that limit. 88 . If not then there is something wrong and the facility availed is being misused. Mark-up is charged on the outstanding amount. However a non-funded facility can become funded at any time. Guarantor: it is the bank that is giving the guarantee. He can avail the facility by playing within that limit. Marketing personnel keeps a check that whether or not a party is adjusting the limit and then withdrawing the amount or not. Non fund based facilities: It is a facility in which funds of bank are not involved. • Letter of guarantee Letter of Guarantee: It is a non-fund based facility hence no funds from the bank side are involved in it.
the bank Possession is with the bank. Bank always prefers a security that is marketable as well as sustains its value (not perishable).SECURITIES: Lending is very risky for any bank. Two parties are involved: Pledger i. Bank keeps the goods in its go downs. Borrower is entitled to get back the goods after the repayment of loan.e. Pledge: It is the bailment of delivery of goods from one person to another for some specific purpose. In case of non-payment bank has the right to sell the goods. Bank covers the risk involved in lending by keeping a suitable security. which can be tangible as well as intangible. Types of Securities: Following are various types of securities Pledge Hypothecation Mortgage 1. 89 . Surplus on sale is paid back to the pledger. Mucaddams are responsible for the security of the pledged goods.e. the borrower/customer Pledgee i.
Documents required for C.In case of deficit after the sale.F. bank always has the recourse to the court of law to recover the deficit. Pledge Legal stamps documents required: • • • • • • Agreement of finance Promissory note Letter of guarantee Memorandum of deposit of title deed Letter of hypothecation Letter of continuity Letters without Stamp: • • • • Letter of arrangement Letter of disbursement Letter of authority SBP regulation undertaking 90 .
91 . Banker must take store the pledged commodity in proper go downs under suitable conditions Banker must take precautions in valuing the commodity. Price should not fluctuate. Hypothecation: It is an agreement to give charge on goods or documents of title to these goods without conferring possession to the lender. It should be marketable. The commodity should not be over valued because it will lead to difficulty in the recovery of loan amount at the time of liquidation. Precautions: Following are some of the precautions. There are approved valuers for this purpose. which are taken by the bank: Banker looks closely at the NATURE OF COMMODITY. The margin differs from case to case depending upon several other factors.Margin: Bank keeps a margin or cushion for every facility advanced. 2. Banker should have complete knowledge about the market value of the commodity pledged. The commodity should not be perishable.
Documents required for C. 92 . • Security is created through a letter of hypothecation. which contains information such as description of goods.Lender neither has possession nor ownership. and value of goods. Stop Orders: The bank can issue “stop orders” against the trading of hypothecated stock.F. Hypothecation Legal stamp documents required: • • • • • Promissory note Letter of Hypothecation Letter of guarantee Letter of continuity Agreement of finance Letters without Stamp: • • • • Letter of arrangement Letter of disbursement Letter of authority SBP regulation undertaking Periodical Stock Reports: Bank requires periodical stock reports from the borrower.
He can get back the specific rights after the repayment of loan. which signifies that stock has been hypothecated. It can be confirmed from the registrar. fire etc. 3. Parties: Mortgager: Who transfers specific rights to the mortgagee. Mortgage: It is the transfer of specific right in an immovable property for securing a payment of money advanced or to be advanced as a loan or for the performance of an agreement or settling a future liability. Before lending bank should make sure that stocks have not been already hypothecated with any other bank. Lender should put the nameplate.e. Stock should be insured against all possible risks such as theft.Precautions: Lender/bank should go for surprise visits to check stocks. bank. Mortgage Deed: Mortgage deed is that document through which the mortgage is executed Property Documents for mortgage • Legal advice about property documents 93 . Mortgagee: He is the lender i.
which is signed by the mortgager and 2 witnesses. After the payment of loan. It is mentioned in the mortgage deed that legal title will be transferred to the mortgager. legal title is transferred back to the mortgager It is executed by the “mortgage deed”. Legal Mortgage: Title is legally transferred to mortgagee. i.• • • • • • • • • • Title deeds (original documents of property Aux Sajra (location site map) NEC (non-encompress certificate) PT 1 in favor of borrower PT 1 in favor of bank MoTD (Mortgage of title deeds) Agreement to create mortgage Letters submit to registrar Irrevocable general power of attorney (IGPA) Valuation report Transfer of Legal Title: According to this there can be two types of mortgage. 94 .100. This mortgage deed is registered with the revenue officer. Mortgage is to be registered in case the loan amount is greater than Rs.
o Guarantees/bonds other than repayment guarantees. In arriving at exposure per person weight age of 50% shall be given to o Documentary credit opened by bank. No banking company shall grant unsecured loans / advances on the guarantee of. GUIDE LINE OF CREDIT POLICY Total outstanding financing facilities by banking company to single person shall not at any point of time exceed 30% of bank’s unimpaired capital. o Family member of director o Any private company in which banking company is interested. No banking company shall make loans or advances against the security of its own shares. In arriving at per party exposure 90% of o Deposit of party with bank under lien. o Any of its directors.ii. Equitable Mortgage The original deeds are submitted with the mortgagee with an intention of creating its equitable interest in that property. Mortgager cannot sell the property without the consent of the mortgagee. It is to be registered with the Registrar of Joint Stock Companies within 21 days of the mortgage agreement. Process: The original title deeds are submitted with the bank with the covering letter stating that these documents are submitted with the bank for the purpose of creating an equitable mortgage. 95 .
this will give a little stress to your mind either to sanction the financing or not? Credits involve very technological procedures and also a lot of exciting activities because each case varies from the other one. lodged by the party as collateral shall be deducted.o Face value of FIBs lodged by the party as collateral. o Pak rupee equivalent of face value of special US Dollar bonds converted at official rate. bank shall ensure the total accommodation availed by any borrower from banks / financial institution does not exceed 10 tines of the capital and reserve of the borrower. 96 . the decision-making skills of a person are explored. A borrower who is prepared to inject fresh equity irrespective of the fact that its equity is negative is eligible to obtain finance from bank to the extent of 10 time’s fresh injected equity. You never become unenthusiastic because you get an opportunity to walk around new bits and pieces every time. in my opinion. Aggregate exposure of bank against all its clean facility shall not at any point exceed the amount of bank’s capital and general reserve. When you need to make a decision regarding the credit proposal after due verification. My experience at the Credit Department: Corporate credits was the second last department in which I was been rotated. is also true due to some reasons. While granting any accommodation. This is. The most important department in any bank is considered to be the Credits department. No banking company allow financing facilities whether fund based / non funded against the shares of companies which are not in central depository system. Firstly the reason being that in credits department. Advances given to the employees of bank in accordance with their entitlement.
Ateeq-ur-Rehman Sidu (Credits Officer). Advantages of clearing: 1) Systematic arrangement for the collection and clearance of cheque. In the nutshell. pay orders and drafts payable through State Bank of Pakistan and National Bank of Pakistan. CLEARING DEPARTMENT: Clearing is the arrangement to which collection of cheque. instruments and cheque. bills and other instruments payable or deliverable at or through the offices of the members of the clearinghouses for credit of the customer’s account for speedy and economic collections. 97 . the credits department contributed a lot towards my decision-making and learning skills. The clearinghouse members are authorized to send their cheque and instruments in the clearinghouse established in the State Bank of Pakistan.In this department I worked under the supervision of Mr. Clearing house is the gathering of all the members of different banks and institutions where they deliver or receive the instruments drawn on them for their clearances through their branches in the city. 4) The collection and clearance of government bills. 5) The collection of government revenue through cheque. 3) Clearance of cheque and other instruments of different branches of different banks in a systematic way without any flow or mistake. 2) Speedy and economic collection and clearance of cheque. He taught me the credit line proposal from the first step till the end of its filling process. He was also very supportive to me.
It would have been more cumbersome and time consuming if they had been dealing from branch to branch.6) It avoids the difficulties and cumbrances faced by the branches if they collect the instruments directly from branch to branch. 7) Confidence among the clearing members is produced. All the payments and receipts are settled to these accounts without any difficulty. The State Bank of Pakistan chalks out clearing house timings and its procedures. Where State Bank of Pakistan office is not available the clearinghouse functions in the National bank of Pakistan branch. • • • State Bank of Pakistan maintains the statuary reserve of different banks in their accounts and all the clearances are made by the debit and credit of these accounts. The State Bank of Pakistan provides the facility to member banks for clearances of their cheque drawn on different branches of banks in different parts of their cities. it deals in a parental attitude and provides space staff and technique to clear the bills and cheque of the member bank. Role of State Bank of Pakistan in clearing: • State Bank of Pakistan gives the license end enlist them as clearing house members authorizing to submit their clearance cheque and instruments through the clearing house established as the office of State Bank Of Pakistan in particular city. CLEARING OUTWARD 98 . However the procedure is the same. • • • The clearinghouse advantages are given in the big cities where the State Bank office is available. • State Bank of Pakistan is a banker’s bank.
Clearing summary is produced and computer also generates bank wise schedules. PROCEDURE: • • • • • • Cheque are receives duly entered on pay-in-slip. Endorsement and pay-in-slip are signed by an officer. • • • • • • • • All the instruments ate entered in clearing register. Crossing stamp is fixed on the Cheque is fixed on cheque and pay-in-slip. All cheques along with bank wise summary are sent to main branch where a revised summary is prepared. The representative of the bank takes all the cheque of all the branches to the branches to the clearinghouse at State Bank of Pakistan. Total of bank wise schedule will tally with total in clearing register and clearing summary. Endorsement stamp is fixed on the reverse of the instruments. CLEARING HOUSE 99 . we send the cheque in outward clearing. Clearing register is generated by the computer system. The officer concerned will enter the cheque in computer system. The cheque is sorted bank wise and respective schedule id attached with these cheque. Counter foils are returned to customer after signature. Depositor’s account number shall be mentioned on the reverse of the instruments for the future reference. Clearing stamp with next date is fixed on the cheque and pay-in-slip.When the customer deposits cheque & other instruments of other banks for collection.
Computer entries are made for (-) credits for returns and debits to Main office A/C. the main branch sends IBCA for net amounts to the branches. Amounts are settled through SBP accounts. The total of schedule received tally with the total of summary. IBCA for net amount is sent to main branch. In the 2nd house clearing cheque are returned and exchange by the representatives of the banks. Some cheque is returned unpaid with the reasons mentioned in the cheque return memo. Clearing cheques received from other banks are sent to branches. After cheque is returned. which will clear the cheque and instruments to the respective accounts. 100 . A summary is prepared for cheque received and delivered and net position is ascertained.In the clearinghouse the representatives of all the banks gather and exchange their instruments. They enter the total amount of cheque delivered and received in their summary sheets.
which is 10% higher than that of last year . Bank continues to make significant in-roads into the Agri-rural finance.88 million under an agreement dated November 1.2.S. 2004. The entire undertaking of the Bangladesh operations including all the properties.263.C.FINANCIAL HIGHLIGHTS For the year ended the Bank’s profit before provision and taxation stood at Rs. SME.635 million as compared to Rs. assets and liabilities and all the right and obligations were taken over. With expanding network of branches. bank is ideally poised and positioned to carry forward the success. corporate and investment banking sectors of the economy.965. Bangladesh operations for US$ 17. It acquired the operations of Shamil Bank of Bahrain’s B. It has also successfully obtained license to establish 101 . This increase in profit is primarily attributable to overall increase in business volume. The Bank has successfully carved in the market an enviable niche for its consumer products.588 million for the previous comparable period. Bank is indisputably market leader in some of these initiatives. Auto Finance. 3. Credit Cards and Home Loans have significantly contributed to the profit and growth in addition to contributions made by the core banking activities during the period under review.
Accordingly the Board would like to thank its valued clients and Correspondents and also to acknowledge the support of the State Bank of Pakistan. Further. a premier rating agency of the country. professionalism and sincere efforts of the senior management. 2009. This was achieved primarily due to its long-standing and stable customer base. The Board would also like to place on record its appreciation for the hard work. bank has a nationwide network of 195 branches that includes 23 Islamic Banking branches and five overseas branches 3 in Bangladesh. which has greatly facilitated its work. strong capacity for timely payment of financial commitments in the long term and by highest capacity for timely repayment in the short term. dedication. market risk. Afghanistan. In compliance with the requirement of State Bank of Pakistan. It continues to strengthen its presence in the market place and as of June 30. These ratings denote a very low expectation of credit risk. the unsecured subordinated debt (Term Finance Certificates) of the Bank has been awarded a credit rating of AA. as of June 30. focused strategies and positioning. Entity Rating for Long Term and A1+ for the Short Term. Bank has in place an approved integrated risk management framework for managing risk. In summary. coupled with the Management’s well-defined. Bank had successful half-year results.banking operations in Kabul. Bank’s plan is to add more branches to the network during the 2nd half of 2007. 2 in Afghanistan and one offshore banking unit in Bahrain. 2007. respectively. market and operational risk and a team of suitable person has been hired. liquidity risk and operational risk as evidence by its Board approved” Risk Management and Internal Control” manual and a dedicated Risk Management Division (RMD) has been created with the Head RMD reporting directly to the Chief Executive Officer. Risk management Division has been structured to address credit. PACRA. Ministry of Finance and other regulatory authorities for their invaluable support. officers and staff of the Bank. has rated the Bank ‘AA’ (double A). 102 .(double a minus).
RATIO ANALYSIS Ratio analysis includes calculating different ratios for the organization of the figures taken from its financial statements. remain competitive in the market and increase or decrease in market funds. “Profitability reflects not only the quantity and trend in earning but also the factors that may affect the 103 . Good earning performance enables a bank to fund its operations. The ratios may be: • • • Balance Sheet ratios Income Statement ratios Mixed ratios PROFITABILITY RATIOS The continued viability of any bank depends on its ability to earn an appropriate return on its assets and capital. The basic purpose of ratio analysis is that absolute figures often give misleading image so comparison with other figures is necessary which can be done through ratio analysis.
58% Significance: o It is a more specific measure of sales profit ability. the firm shall not be able to achieve a satisfactory return on its investment.sustainability earnings. low demand etc. capacity to face adverse economic conditions such as price competitions. o Higher is better is the profitability.25% x 2008 3506737 x 100 25816457 = 13. o The ratio is very useful as if the net profit is not sufficient. It is used to measure over all profit ability and hence it is very useful to proprietors. o It also indicates firms. 104 .” or quality of NET PROFIT RATIO Net Profit after Tax X 100 Net markup/interest income after provisions 2007 1325389 100 21194254 = 6.
It is necessary to cut down these expenses especially when interest rates on advances are declining leaving a narrower margin for payment of such expense. Operating expenses are those expenses which are incurred indirectly for the generation of revenue.58% in 2008 the increase is significant. A large portion of these expenses is the administrative expenses which are incurred on management of the organization. 7 OPERATING EXPENSE RATIO Non Mark Expense Gross Income X 100 2007 15235688 100 3290623 = 436% x 2008 16645178 x 100 6142240 = 271% Significance This ratio shows how well the organization is managing its operating cost. So Lower it is better it is. to 13. 105 . So it is a healthy sign for bank.Analysis: The above ratio indicates that the proportion of profit has seen increase over the years from 6.25% in 2007.
00% 2007 2008 2007 2008 ADMIN EXPENSE TO TOTAL DEPOSITS Administrative expenses Total deposit 2007 5952637 100 239480772 = 2.00% 0.00% 300.00% 200.49% = 3.Analysis Operating expenses for the bank decreased in 2008 from 436% in 2007 to 271%in 2008 and which is a good sign as it shows decreased costs of the banks and hence increased net income. 500.00% 100.00% 400.07%% x 2008 8383322 x 100 273172088 X 100 Significance 106 .
00% 0.96% x 2008 25816457x 100 330679872 = 7.00% 2007 2008 2007 2008 TOTAL ASSET TURN OVER Interest.e. Analysis In 2007 bank’s administrative expenses were 2. 3.50% 3.49% and in 2008 they are on rising side i. Bank 3.50% 1.return earned Total Assets 2007 21194254 100 275511483 = 7.81%% Significance This ratio indicates the efficiency with which total assets have been utilized to generate net interest income. Total deposits have been used as base as they are main business activity of bank. If a bank has ROA on a 107 . A declining trend is desirable.00% 1.50% 2.This ratio measures bank’s ability to cover administrative expenses by spreading over large number of depositors.50% 0.07% should try to control its expenses.markup. it’s not good for the bank.00% 2.
81% in 2008. It means bank is not able to utilize its assets efficiently in generating its main stream income. Analysis It is decreasing which is unfavorable.00% 7.85% 7.69% Significance ROA is the most comprehensive measure of bank’s earning capacity. 7.higher side but the relation of net interest income to total assets is not very significant. 8.75% 7.90% 7.80% 7. this may translate into the fact that bank is relying on sources of income other than interest income which is not a healthy sign. Net profit margin ignores ‘efficiency concept’ while total asset x 100 2008 5004600x 100 330679872 =1. It was 7.95% 7.70% 2007 2008 2007 2008 RETURN ON ASSETS Net profit after tax Total assets 2007 1906672 275511483 = 0.51% x 100 108 .96% in 2007.
14%% .20% 1. An increasing trend of this ratio signifies increased efficiency of management of a bank to improve upon its earnings capacity. That’s why it is most widely used indicator for representing the earnings of bank over time period.40% 1.80% 0. 1.20% 0. Higher it is better it is.151% to 0.60% 1.turn over ignores earning perspectives.00% 2007 2008 2007 2008 RETURN ON EQUITY Net profit after tax x 100 Share Holder’s Equity 2007 1325389x 100 11827209 = 11.40% 0.00% 0.21% Significance 109 2008 3506737x 100 17414154 = 20. But still it is not very good. so bank should try to improve it.69%.60% 0. Analysis As this ratio explains how much you are utilizing your assets. In year 2008 it is improved from 1. ROA takes both perspectives into account.
In year 2007 the return on equity of BAL was 11.00% 5.00% 15.14%.21 % and in year 2008 it was 20. Return of equity of BAL is showing a good situation in year 2008 as compare to year 2007. Thus ordinary shareholders are more interested in the profitability of the company.25. 110 . Analysis In real sense ordinary shareholders are the real owners of the company (preference shareholders have a preference over ordinary shareholders in the payment of dividend as well as capital. higher the ratio better it is.The rate of dividend very with the availability of profit in case of ordinary share only.00% measure of overall performance of bank. this increase shows that company is utilizing its funds properly relating to its previous year. Preference shareholders get a fixed rate of dividend irrespective of the quantum of Profit Company). As the ratio reveals how well the resources of a firm are being used. This 2007 2008 ratio is of great importance to the present and prospective shareholders as well as the management of the company.00% This is another0.00% 20.00% 2007 2008 10.
brokerage. While analyzing this ratio the trend of non interest income to total assets should be considered.19% 2008 6142240x 100 330679872 = 1.NON INTEREST INCOME TOTAL ASSETS Non interest income Total assets x 100 2007 3290623x 100 275511483 = 1. An emphasis on fee income is another global trend along with the growth of capital and rising ROA's. and other income and extra ordinary or unusual items if they represent income. high non interest income can also represent a positive point for a bank. Over all non markup income is increasing for the Bank. Whether the bank has maintained this ratio at a reasonable level or are there any significant changes over time? If this ratio increases significantly. But on the other hand. This income represents a diversification from earnings generated from the taking and placement of money. then there is a problem with the bank in generating revenue from its mainstream activities. Non interest income is also an important source of banks earnings. commission.86% Significance Non interest income represents fees. which is subject to interest rate and credit risk. Analysis This ratio is increasing in the year 2008 but shows decreasing in year 2007. It is a positive sign. 111 .
00% 0.00% Significance 2008 2007 2008 Non interest expenses represent operating expenses such as administrative expenses.50% 0.93% 2554019x 100 275511483 1.37% 4535382x 100 330679872 2007 0.50% 1. Lower this ratio better it is for the bank. If the level of non interest expense to total 112 .50% 1.00% 2008 = 1.50% 0. staff salaries and other charges plus extra ordinary and unusual items if they represent expense.2.00% 2007 2008 2007 2008 NON INTEREST EXPENSE TO TOTAL ASSETS Non markup expense Total assets x 100 2007 = 0.00% 1.
RISK ASSET TURN OVER RATIO Net mark up after provision Risk assets 2007 3296623x 100 149942717 = 2.00% 3.00% 0. Non interest expense is a very critical number.00% 1. This is a good sign. So it is necessary that bank earns sufficient value of income on its investment of risk assets. So a steadily rising trend is desirable.assets is high this will also distort the ROA of the bank.19% Significance 2008 6142240x 100 171031183 = 3.50% Analysis 2007 2008 2007 2008 In year 2008 it is higher than 2007.00% 2. This ratio is higher in year 2008.59% Advances are the main use of bank’s assets. Analysis This ratio is good when it is low. It shows non mark up expense in increasing and it should be controlled. 4.00% 113 .50% 1. 0.50% 2.50% 3.
” CURRENT RATIO Current Assets Current Liabilities 2007 259122914x 100 254203477 = 1.03 Current ratio may be defined as the relationship between current asset and current liabilities. This ratio is also known as working capital ratio. “Liquidity reflects the adequacy of the institution’s current and prospective sources of liquidity and funds management practices.LIQUIDITY RATIOS Liquidity represents the ability of a bank to efficiently and economically accommodate deposits withdrawal as well as fund increase in assets. Illiquidity is a primary factor leading to a bank’s failure whereas high liquidity helps otherwise weak institutions to remain funded during the period of difficulty.02 Significance 2008 311886135x 100 302091341 = 1. A bank has a liquidity potential when it has the ability to obtain sufficient funds in a timely manner at a reasonable cost. It is a measure of general liquidity and is most widely used to make the analysis for a short-term financial position or liquidity of a 114 .
A relatively high current ratio is an indication that the bank is liquid and has the ability to pay its current obligations in time as and when they become due. current assets double the current liabilities. a relatively low current ratio represents that the liquidity position of the bank is not good and the bank shall not be able to pay its current liabilities in time without facing difficulties. i. An increase in the current ratio represents improvement in the liquidity position of bank while a decrease in the current ratio indicates that there has been deterioration in the liquidity position of the bank.bank.e. The idea of having doubled the current assets as compared to current liabilities is to provide for the delays and losses in the realization of current assets. is considered to be satisfactory. because banks having less than 2 : 1 ratio may be having a better liquidity than even banks having more than 2 : 1 ratio. In 2007 and 2008 there is increment in ratio which shows it have current assets to pay current liabilities. However. the rule of 2 : 1 should not be blindly followed while making interpretation of the ratio. This is so because the current ratio measures only the quantity of current asset and not the quality of current assets. If a bank’s current assets include debtor which are not recoverable. the current ratio may be high but it does not represent a good liquidity position.. A ratio equal or near to 2: 1. It is also an index of the strength of working capital. Analysis: BAL has maintained its liquidity position over the years. On the other hand. 115 . It is an index of the bank’s financial stability. It represents the margin of safety or cushion available to the creditors.
02% 1.02% 1.1.03% 1.03% 1.61% 100 2008 1171031183x 273172088 =62.48% 116 2007 2008 .02% 1.62% 62.02% 1.61% 2007 2008 Significance 62.01% 2007 2008 ADVANCES TO TOTAL DEPOSITS Advances 2007 2008 x 100 Deposits 2007 149942717x 100 239480772 = 62.03% 1.74% 62.02% 1.
Analysis We can see that for every one rupee deposit loan is given with the ratio 62.This is perhaps the most important ratio as far as financial analysis of a bank is concerned. Deposits represent source of banks funds and advances are use of funds. If the bank wants to increase return. Although the bank wants to maximize its earnings. but it can never lend the entire amount received through deposits. it will go towards more lending thereby enhancing risk and if the bank focuses on liquidity. The bank should decide upon the mix of its sources and uses after taking into consideration the CRR and SLR requirements and demographics of its depositors. So there is a trade off between risk and return. it will have to forego return. It signifies that how much deposits the bank has mobilized from general public and to what extent has made use of these deposits. Credit risk is the most recognizable risk associated with banking and granting credit is the primary activity of a bank but at the same time interest earned on advances is the major source of banks earnings. A bank is there to accept deposits and lend to general public. The bank should strive to attract current accounts to increase this ratio. Both these items represent core activities of a bank. It has to keep a certain proportion of its deposits in cash form with it as well as with SBP to meet the day to day requirements of its customers. Advances represents lending to general public and deposits represent amount borrowed from general public. 117 . Current accounts to are the lowest cost source of funds. It is good but it needs to be improved as increasing loans is always good source of earning for a bank. so as to control its interest expense. This ratio compares the major source of a bank's funds with the major use of it.
92% Analysis This ratio explains how much deposits are in percentage and trend shows a decrease from 2007 to 2008. 2008 273172088x 100 330679872 =82.50% 79.DEPOITS TO TOTAL ASSETS = deposits / total asset 2007 239480772x 100 275511483 = 86.10% 81.69% 83.90% 2007 2008 2007 2008 118 .61% 87.29% 84.89% 86.
99% 6. 119 .20% 1.60% 0. Interest expense is main expense of bank just like cost of goods sold. So higher the ratio better is the ability of bank to pay this compulsory obligation and hence better is the liquidity potential of bank.39% 4.00% Significance 2008 2007 2008 This ratio measures bank’s ability to pay financial charges.INTEREST COVERAGE RATIO Earning before interest and tax Financial charges 2007 15235688 1906672 = 7.99 2008 5004600 16645178 =3.79% 2007 3.32 7. Analysis We observe a decreasing trend which is not favorable.
PORTFOLIO MANAGEMENT RATIOS
Portfolio refers to the assets held by an investor taken as a group. From banking point of view it means how the bank is maintaining its advances, investments and lending to financial institutions with respect to its total assets. The portfolio of the bank should be so that it contribute to overall profitability of the bank “Portfolio management deals with managing Advances, investments and lending to financial Institutions with respect to the total assets of the Bank”.
ADVANCES TO TOTAL ASSET RATIO
Advances x 100 Total Assets 2007 149942717 *100 275511483 = 54.42% 2008 171031183 330679872 =51.72%
This ratio indicates proportion of advance to total assets. This is main earning assets of bank. It has two distinct features. It is most risky earning asset and highest return getting asset. As we know, a proper balance should be maintained between risk and return so bank should 120
attain such level of advances. However a rising trend is desirable. It indicates banks ability to compete in the market and generate sufficient subsequent deposits. Analysis Over the last two years bank is showing decrease in ratio i.e.54.42%, 51.72%. It is not good sign as it shows decrease in advances and hence earnings of the bank decrease but risk is also decreasing as there is inverse relationship between risk and return.
55.93% 54.33% 52.73% 51.14% 49.54% 2007 2008
These ratios measure the extent to which bank’s resources have been geared by debt i.e. financed by debt in relation to share holder’s equity. It takes into account total debt, capital employed, shareholder’s funds and total assets and then on the basis of all these the proportion of debt is compared and it helps in understanding that what proportion of needs should be met by debt and how much through equity.
“These ratios measure the extent to which banks
Resources have been geared by debt i.e. financed By debt in relation to share holder’s equity”.
Following ratios have been calculated: 1. Debt to equity ratio 2. Debt to capital employed ratio 3. Debt to total assets ratio
DEBT TO EQUITY RATIO
Long term debt x 100 Shareholders founds 2006 263684274 *100 11827209 = 22.29% 2008 313265718 17414154 =17.98%
22.37% 20.77% 19.18% 17.58% 15.98% 14.38% 12.78% 11.19% 9.59% 7.99% 6.39% 4.79% 3.20% 1.60% 0.00%
DEBT TO TOTAL ASSET Total debt x 100 `Total assets 2007 263684274 *100 275511483 = 95. In case of manufacturing concern. In a banking concern this ratio could be 3:1 Analysis Debt equity ratio of BAL is showing decreasing trend. acceptable ratio is 40:60.Significance It shows amount of long term debt per rupee of equity. This ratio high lights composition of capital employed of bank. It means that company is trying to rely on its own resources and increasing its Capital.73% 123 .7% 2008 313265718*100 330679872 =94.
28% 2007 2008 SIGNIFICANCE 92. SHAREHOLDER’S EQUITY TO TOTAL ASSET = Shareholder’s equity/ Total assets 124 .88% 94.95. Analysis This ratio for bank is same over years and 94% assets are financed through debt. In manufacturing concerns 50% is a desirable proportion of assets financed by debt. ratio up to 90% is acceptable as whole structure of banking is based on funds provided by the depositors. However a banking concern.68% 2007 2008 This ratio indicates the extent to which assets have been financed by debt. This ratio has a direct bearing on financial risk of bank.
29% 2008 17414154*100 330679872 =5.O.29% to 5.T ANALYSIS2008 BANK ALFALAH LTD. In year 2008 it is improved from 4.00% 2007 2008 THE S.27% Analysis This ratio shows that how much bank’s assets are financed by internal resources.79% 3. 6.2007 11827209 *100 275511483 = 4. OF 2007 ISLAMIC BANKING: Key External Forces: External forces can be divided into four broad categories: 125 .39% 4.60% 0. which is not bad but bank should focus to improve this ratio.20% 1.27%.W.
and Competitive forces While performing an external audit. 1) Extension of Local Branch Network One of the biggest opportunities for bank Alfalah Limited is to extend its branch network in Pakistan. and legal forces Economic forces Technological forces. political. and technological forces as well. Opportunities The opportunities on which bank Alfalah can capitalize upon are delineated as under. cultural. managerial expertise are available. demographic. but now for those business organizations that want to survive and thrive globalization has become the order 126 . governmental. and last but not the least any bank with ‘Bank Alfalah Limited written in blue at its front is accepted in the market’. 2) Establishing Foreign Branch Network Going global could have been termed as a fad a few years ago. Social. The essential pre-requisites for a vast branch network are all there. economic. demographic. our company gathered the competitive intelligence and information about social. The overall motive was to consider and evaluate the Opportunities and Threats for the company Following can be some of the key opportunities and threats for Bank Alfalah. cultural. and environmental Forces Political. sponsors have the money.
Bank Alfalah Limited still is an unattractive bank for big multi nationals functioning in Pakistan. If the management is able to develop a strong relationship with such MNC’s then it would open doors of huge and unimaginable opportunities for Bank Alfalah Limited. 5) Customers are more willing Muslims are more consciously differentiate the Islamic-base banking from interestbase banking. If Bank Alfalah Limited’s senior management and the IT division make a concerted effort to make best possible use of this miracle of human mind it would enable Bank Alfalah Limited to harness unexplored benefits of immense magnitude. it would make a world of difference to Bank Alfalah Limited. But the senior management would start implementing this course of action once they feel that they have got a strong hold in Pakistan. In order to increase the bottom line figure.of the day.e. it deposits its revenue with Bank Alfalah Limited. 3) Capitalizing On Information Technology The information revolution has certainly made its inroads in almost all human functions. pays its salaries through Bank Alfalah Limited. THREATS 127 . and avails credit facilities offered by Bank Alfalah Limited. If even a single MNC becomes a corporate client of Bank Alfalah Limited i. 4) Unexplored Market of Multinational Corporations Unfortunately in spite of unprecedented image building efforts. That is why there is large caution of expansion. it really is crucial. does trade dealings through Bank Alfalah Limited.
This is an intangible asset for Pakistani banks. 2) New Trade Polices Introduction of new trade policies and laws are also been a source of threats to the organization due to the imposition of new rules and terrifies. Prime Commercial Bank. Union Bank. Pakistani banks (private banks in general and state owned banks in particular) are spread all over Pakistan. Faysal Bank Limited. foreign branch network. Citi Bank) but is also having a neck to neck race with other privatized banks such as Askari Commercial Bank Limited.The predominant threats Bank Alfalah is facing at the moment are discussed in the following lines. Standard Chartered. 1) Private Sector Banks Bank Alfalah Limited is at present facing really tough competition from not only the first line international banks (ABN AMRO. better and personalized service. unless 128 . desirable interest rates. All the new schemes launched by these banks and their plans to expand branch networks are a real threat for Bank Alfalah Limited. 3) Network Expansion By Foreign Banks Foreign banks have a lot of plus points as compared to Pakistani banks (state owned and private). But if any of the foreign banks expands it network. backed by their traditional powerful service. they have better products. Literary no foreign bank has been able to expand its network to far-fetched places of Pakistan. but they definitely lack in local branch network (in Pakistan). Bank Al-Habib Ltd etc. then it might prove to be the start of downfall for Bank Alfalah Limited. previous maintained regulations have to be amended.
but as far as our image in the international community is concerned there is still a considerable room for improvement. the trade finance business would really be hampered. 6) Inconsistency in Government Policies 129 . Backed By Huge Network Improve the Service They Give And Their Employee Skill Set State owned banks like National Bank of Pakistan and Habib Bank Limited have huge networks. So. they have the experience. and one of the major earning avenues for Bank Alfalah Limited will loose its footings. This fact poses a real threat to the sanctity of Bank Alfalah Limited. If this situation further aggravates rather than improving. were also hampered by that terrorist attack on 11th of September i.and until Bank Alfalah Limited raises its level of service and product feasibility to the international standards. Bank Alfalah Limited should endeavor to expand their branch network as efficiently as possible and as soon as possible. the magnitude of orders the exporters were receiving decreased by a great deal.e. and the managerial policy is revitalized. 4) If Pakistani Banks (Especially State Owned Banks). 5) Terrorist Image of the Country After the 9 / 11 incident every kind of transaction that uses to take place with the outside world has assumed a different mode. enabling them to improve upon the service they give and enabling them to convert their work force into human capital then such financial institutions backed up by their huge networks pose a potential threat to Bank Alfalah Limited. but the only set back they have is below par service and lack of motivation amongst the employees. The trade finance transactions are the bread and butter for the commercial bank. If their corporate strategy is altered.
AlNahayan Family --. specifically if we are talking about a service industry and this is precisely the management policy Bank Alfalah Limited follows. which could hurt Pakistan’s image could also shake the investor confidence and also could lead to a decrease in the repute of the entire banking sector of Pakistan.This is a phenomenon that could hamper smooth functioning of any organization working in a particular country.are really committed to invest more and more in the country but still any drastic change in either the economic policies like increase in taxation rates. The modern management techniques have discarded the bureaucratic style of management in which employees were treated as servants if not as slaves. The humility of the management serves as a big morale booster and encouragement catalyst for all employees in general and new inductees in particular. In the contemporary business world employees are said to be the biggest and the most crucial assets of a business concern. Although the sponsors of Bank Alfalah Limited --. 2) Strength And Commitment Of Sponsors Bank Alfalah Limited is a project of Al-Nahayan family. Their humility is an integral part of the organizational culture of the bank. or any change in the foreign policy. which is a renowned Abu Dhabi based investor family. The first project of this particular family was Bank of Credit and Commerce International (which later on became on of the most renowned 130 . STRENGTHS The predominant strengths of Bank Alfalah Limited are 1) Humble Management The senior management of Bank Alfalah Limited is considerably humble.
The “Al-Nahayan” family is a royal family and this fact further adds to the bank’s inherent strength. 4) Phenomenal Growth In Profitability. and perseverance to transform Bank Alfalah Limited into one of the strongest financial houses of Pakistan. This fact proves the thesis that there has been continuous value addition. When we compare the image of Habib Credit and Exchange Bank with that of Bank Alfalah Limited we find a world of difference. Branch Network And Deposit Portfolio 131 . In a very short time span the management of Bank Alfalah Limited has been able to develop its image in a very effective and efficient manner. and flourishing financial institution.E. service oriented. The bank functioned under this particular name for six years and then Al-Nahayan family bought 70% of its shares from Habib Bank Limited and renamed the institute as Bank Alfalah Limited. 3) ‘Kaizan’ Kaizan is a process of continuous improvement in production and every aspect of value added (Japanese). and when we compare the image of Bank Alfalah Limited at its inception with its present image we find an even greater difference.C. This reinvestment shows the investor’s trust. commitment. The number of individuals and corporate entities that feel comfortable while dealing with Bank Alfalah Limited is increasing on a daily basis. Through the laborious efforts of the top management and the employees.B). Thus in real terms the same family reinvested in their lost project and tried to rejuvenate their brainchild.banks of the Muslim world). BCCI was acquired by Habib Bank Limited (a nationalized bank) and as a result BCCI became Habib Credit and Exchange Bank (H. the entire organization as a whole has been able to continuously add its prestige as a reliable.
7 billion.7% and stood at a figure of Rs. This was done in order to achieve quite a few objectives. Bank Alfalah Limited 132 .999 billion. 5) Vastly Experienced Management The people who occupy the top positions in Bank Alfalah’s management hierarchy are certainly no mugs at what they do.B was transformed into Bank Alfalah Limited. 149. Their superior management skills certainly do create a synergistic effect when coupled with the enormous amount of trust sponsors have put in the management.C. 14 billion. One of the most evident proofs of above average management expertise are the deposit portfolio growth. 3. management of BAL had incorporated---and it still is incorporating---in the organization. The deposit grew by 7. when H. 239. profitability growth.509 billion while advance portfolio grew by 26% and showed a figure of Rs. Transformation Of Work Force Into Human Capital One of the most significant catalysts. was induction of young and energetic business graduates.In the very first year of its inception Bank Alfalah Limited closed its operations at a deposit portfolio of Rs. at the end of the second year the deposit portfolio had risen to Rs. and branch network growth figures shown under the previous heading. The profit before provisions and taxation of your bank for the year 2006 stood at Rs.264 billion which was 10% higher than that of last year. 6) Highly Trained Human Resource Department. Rather they are as capable and as competent as they come. When Bank Alfalah Limited started its operations it only had three branches and in a short time span the branch network has expanded to 195. one was to raise the overall skill level of the work force so that service provision could be improved and the second objective was to reduce the average age of Bank Alfalah Limited’s employees so that an overall sense of change is trickled down to the grass root level of the organization. Thus Bank Alfalah Limited is growing at a multiplier rate of 50%.E.
has an excellent selection / recruitment and training program which are undertaken at its Training and Development Center, Human Resource Division Karachi. 7) Superior Consumer Finance In contemporary banking consumer finance has assumed immense significance, as it is that department of a commercial bank whose personnel directly and extensively deal with the client body. One of the most predominant sub departments of consumer finance is Alfalah Car Finance. The customer interface is greater in the consumer finance department, and the diligent staff of Bank Alfalah limited enriched with its superior service and relationship skills attracts / persuades these clients to develop relationship with Bank Alfalah Limited in the arena of corporate banking as well. Thus a strong consumer finance department really helps the bank to expand its corporate banking business. 8) Crucial Location Of Branches All the forty five branches of Bank Alfalah Limited are located at extremely crucial and vital locations, which is indeed a very significant factor towards earning more profit. Moreover all of the branches are very well furnished which is an integral characteristic of a good bank in this age of consumerism. 9) Image Building Activities Activities such as building of Alfalah Square at Liberty Lahore, the China Khan at the Alfalah Square, Alfalah Mini Golf Course, and Shahdin Manzil (proposed main branch, Lahore at The Mall, under construction) have really contributed a lot towards the image building process of Bank Alfalah Limited. Such activities also make people aware of the rejuvenation process of Bank Alfalah Limited. Such activities are classified as
strength because they involve people in the change process that contributes a lot towards building customer loyalty. WEAKNESSES The chief weaknesses are enlisted as under 1) Small Size Bank Alfalah Limited is small in size; there is no doubt about this fact. Although, as I mentioned in the strengths section, the branch network is expanding at a phenomenal rate but still the size is not big enough as compared to some of the big banks present in the market. Bank Alfalah limited has 189 branches in the whole of Pakistan. A huge branch network is always an invaluable asset for any bank. Customers simply love it when they could see another branch of their own bank at every turn they take. Extensive branch network might reduce per branch profit but it is very likely to raise the overall profit figure for the entire organization as a whole.
2) Lack of Research Cell
There should be a research cell in the bank, which should be engaged in gathering the information about the present actions of its competitors
3) Uneven treatment with customers
Customers having accounts with small amounts are not given same services and dealing given to those with high accounts. 4) Skill Set Of Employees Is Not Up To The Mark As There Is No Job Rotation
The contemporary banking all over the world has taken a unique turn i.e. they have made job rotation an integral part of their management philosophy. Job rotation adds value to every single employee, as he is able to perform a variety of jobs related to banking profession. Moreover job rotation increases the human capital pool of the organization as every one is trained in more than one sphere of banking. Bank Alfalah Limited completely lacks this. 5) Foreign Banks Still Are A Little More Prestigious Although Bank Alfalah Limited is continuously adding to its prestige, but still it can not be rated as a bank with the same repute as International Banks functioning in Pakistan, for instance ABN AMRO Bank, Citi Bank and Standard Chartered Grindlays. Banks function as custodian of people’s possessions, act as their agents, represent clients in trade dealings outside the country, and give different types of guarantees and in all of these transactions repute plays a central role. And when it comes to repute foreign banks have a little more of it as compared to Bank Alfalah Limited. 6) Bank Alfalah Limited Does Not Possess Foreign Network Foreign banks and some local banks having international network have this edge over Bank Alfalah Limited. Banking transactions regarding trade finance constitute a very important part of contemporary banking and moreover they are said to be the bread and butter for the commercial bank. Bank Alfalah Limited, for such transactions has to rely on its correspondents and agents in other countries, and naturally has to pay them some remuneration --- an expense banks having foreign network do not have to incur.
7) No Advertising in Electronic Media
The resultant score of 2. Some other commercial banks are really capitalizing on the power of this media. Garden Town Branch so assessing the opportunities and threats for Bank Alfalah Limited did not pose any serious difficulties. which is said to be the strongest of all Medias. I found it considerably enlightening because of its two dimensional approach towards assessing an organization i. Muslim commercial bank. Habib Bank Limited etc. But since I was also suppose to weight and rate the opportunities and threats I had to go to the bank in order to get some views from the members of the organization as to what do they think about the relative importance of the factors and what is their view point regarding their organization’s response to these opportunities and threats. this particular matrix not only considers the relative importance of the opportunities and threats by assigning them weights but it also allots the factors rates on a one to four scale depending upon the kind response the organization is giving to the opportunities and threats.Bank Alfalah does embark upon occasional sales promotion activities. examples are Askari commercial bank. In the summer break I did my internship at Bank Alfalah Limited. but it has never flashed an advertisement on the television screen.e. it also gives advertisements in the print media. INDUSTRY ANALYSIS: 1) External Factor Evaluation (EFE) Matrix External factor evaluation matrix is a very useful tool towards assessing as to what are the factors that constitute the set of the most significant opportunities and threats. 136 .23 shows an average External position of the bank.
OPPORTUNITIES Extension Of Local Branch Network Establishing Foreign Branch Network Capitalizing On Information Technology Unexplored Market Of MNC’s More customers are willing THREATS Private Sector Banks New Trade Policies Network Expansion By Foreign Banks Pakistani Banks Improve Their Services Terrorist Image Of The Country Inconsistency In Government Policies TOTAL
0.15 0.10 0.10 0.10 0.05 WEIGHT 0.10 0.05 0.10 0.05 0.10 0.10 1.00
RATING 3 1 3 3 1 RATING 3 1 3 3 2 3
WEIGHTED SCORE 0.45 0.10 0.30 0.30 0.05 WEIGHTED SCORE 0.03 0.05 0.30 0.15 0.20 0.30 2.23
2) Internal Factor Evaluation (IFE) Matrix
The IFE matrix is constructed as a summary step to performing the Internal Audit / Assessment. Its basic purpose is to list down the major Strengths and Weaknesses of an organization. Other than these factors, its construction is more or less similar to that of the EFE Matrix. As I have mentioned before, I did my internship at Bank Alfalah Limited, Garden Town Branch. Therefore I have taken the Strengths and Weaknesses of Bank Alfalah Limited to construct this matrix. The resultant score of 3.15 shows the strong position of the bank internally.
STRENGTHS Humble Management Commitment Of Sponsors ‘Kaizan’ Phenomenal Growth In Profitability Vastly Experienced Management Highly Trained HR Superior Consumer Finance Crucial Location Of Branches Image Building Activities WEAKNESSES Small Size Lack of research cell Uneven treatment with customers Skill Set Of Employees Is Not Up To The Mark Foreign Banks Still Are A Little More Prestigious Bank Does Not Possess Foreign Network No Advertising In Electronic Media TOTAL
0.06 0.08 0.10 0.05 0.02 0.05 0.10 0.02 0.02 WEIGHT 0.15 0.05 0.05 0.15 0.04 0.02 0.04 1.00
RATING WEIGHTED SCORE 3 0.18 3 0.24 4 0.4 4 0.2 2 0.04 3 0.15 3 0.3 4 0.08 1 0.02 WEIGHTED RATING SCORE 3 0.45 4 0.2 2 0.1 3 4 1 4 0.45 0.16 0.02 0.16 3.15
3) Competitive Profile Matrix
The Competitive Profile Matrix identifies a firm’s major competitors and their particular strengths and weaknesses in relation to a sample firm’s strategic position. First of all the critical success factors are determined and examined. Rates and weights are assigned to each factor. Rate are company based which means the significance and importance of such factors with in a firm whereas weights are industry based which means their relative importance in an industry. So weights from 0.0 to 1.0 are assigned to each critical success factor and the total of such weights should not exceed 1. On the other hand rates are assigned from 1 to 4, 1 being the minimum and 4, the maximum. Each factors weight is multiplied by the factors rate and hence the weighted score is observed.
Here advertising, turnover, organizational culture, market share etc are considered to be the various critical success factors. For comparison with Bank Alfalah Limited, I have chosen Askari Commercial Bank and Muslim Commercial Bank. The reason for such a choice is simple. As Bank Alfalah Limited is a local bank; its primary competitors are the other local private banks. Other than Bank Alfalah Limited, these two banks are providing the best services to the general public. BANK ASKARI ALFALAH COMMERCIAL MCB BANK WEIGHT LIMITED Wt. Wt. Wt. Rating Rating Rating Score Score Score Market Share 0.03 2 0.06 2 0.06 3 0.09 Price Competitiveness 0.02 3 0.06 2 0.04 2 0.04 Advertising 0.15 3 0.45 3 0.45 3 0.45 Financial Position 0.03 4 0.12 4 0.12 3 0.09 Variety 0.02 4 0.08 2 0.04 3 0.06 Of Products Online Banking 0.05 0 0 3 0.15 4 0.2 Location 0.15 3 0.45 1 0.15 1 0.15 Domestic Networking 0.1 4 0.4 2 0.2 2 0.2 International Network 0.05 0 0 4 0.2 4 0.2 Customer Loyalty 0.1 4 0.4 3 0.3 3 0.3 Environment 0.05 3 0.15 4 0.2 3 0.15 & Decor Customer 0.15 4 0.6 3 0.45 2 0.3 Relationship Efficiency 0.05 3 0.15 3 0.15 3 0.15 of Staff Brand Recognition 0.05 2 0.1 2 0.1 3 0.15 TOTAL 1 3.02 2.61 2.53
CRITICAL Sr. SUCCESS No. FACTORS 1 2 3 4 5 6 7 8 9 10 11 12 13 14
4. Disproportionate Presence Of Old Staff ‘Kaizan’ 4. Information Technology 4. Product development foreign banks 3. No Advertising In Crucial Location Of Electronic Media Branches Image Building Activities SO STRATEGIES WO STRATEGIES Expansion of branch network to increase 1. Lack of research cell Humble Management Commitment Of Sponsors 3. 9. 5. Increase Branch profitability Communications Capturing the market Network currently held by the 2. Expansion to foreign More investment in the countries to facilitate projects of Multi National Expatriates in transmitting companies money More Advertisement to 4. 1. opportunities and threats of an organization. weaknesses. Training of the existing promote the employees to increase their increasing branch network efficiency and effectiveness ST STRATEGIES WT STRATEGIES 140 . Skill Set Of Employees Is Phenomenal Growth In Not Up To The Mark Profitability 5. Establishing Foreign 2. 7. More customers are willing THREATS 1. Capitalizing On 3. Foreign Banks Still Are A Vastly Experienced Little More Prestigious Management 6. 8. Extension Of Local Branch Network 2. 6. Branch Network 3. 2. 5. Unexplored Market Of MNC’s 4. Bank Does Not Possess Highly Trained HR Foreign Network Superior Consumer Finance 7. STRENGTHS WEAKNESSES 1. Through proper and keen observation. the following factors are been initialized for the SWOT analysis of Bank Alfalah Ltd. OPPORTUNITIES 1. 3.4) The Strengths-Weaknesses-Opportunities-Threats SWOT matrix: SWOT matrix is formulated by considering and evaluating the strengths. Small Size 2.
High customer loyalty 1. Increase the marketing to and experience can be the customers to meet the use to avoid disasters and competitors claims breakdown in service 2.5) Strategic Position and Action Evaluation (SPACE) Matrix This four-quadrant framework indicates whether aggressive. Pakistani Banks Improve Their Services 5. Terrorist Image Of The Country 6. New trade policies 3. this matrix is been drawn using the following critical success factors 1. or competitive strategies are most appropriate for an organization. Network Expansion By Foreign Banks 4. Inconsistency In Government Policies 1. Decrease the number of 2. The axes of the SPACE matrix represent two internal dimensions (financial strength [FS] and competitive advantage [CA]) and two external dimensions environmental stability [ES] and industry strength [IS]). Increased profits to be retention through the used to open new introduction of attractive branches to compete with pay and benefits competitors 4. These four factors are the most important determinants of an organization’s overall strategic position. Opening new branches in business related hubs 141 . For Bank Alfalah Ltd. More effective leadership personnel to avoid the to increase competitive threat of takeovers and relative advantage 3. Increasing employee 3. conservative. defensive. Private Sector Banks 2.
Ratings Average Financial Strength (FS) Bank’s revenue increased by 74 % Bank’s profits increased by 43.33) = 0.5 % Return on assets have also increased showing effectiveness of bank in proper utilization of its assets Return on equity has increased indicating that the bank has become more attractive for its investors Industry Strength (IS) Growth and Profit potential Deregulation provides geographic & product freedom & increases competition in banking industry Environmental Stability (ES) High inflation and Technological changes Political instability Competitive pressure and Demand variability Competitive Advantage (CA) Becoming increasingly Competitive Bank’s customer base is expanding and strong Customer loyalty Providing services all over Pakistan 4 3 3.83 Y .50 + (.17 142 .50 3 -4 -3 -3 -3.3.50 + (-2.67 DIRECTIONAL VECTOR COORDINATES X .50 4 4 3 3.67) = 0.axis: Industry Strength + Competitive Advantage 3.33 -2 -3 -3 -2.axis: Financial Strength + Environmental Stability 3.
5 Conservative 4 3 2 1 Aggressive -4 -3 -2 -1 0 1 2 3 4 -1 -2 -3 Defensive -4 -5 Competitive From the examination and evaluation of the above mentioned SPACE matrix for Bank Alfalah Ltd. 6) Boston Consulting Group (BCG) Matrix 143 . which shows the banks is in an excellent position to use its internal strengths to take advantage of external opportunities overcome internal weaknesses and avoid external threats.it can be represented that the bank is currently been falling into the region of being AGGRESSIVE..
5 Limited Question Marks I Cash Cows III Dogs IV Low 0. It states that a firm’s divisions may compete in different industries requiring separate strategy.5 Low 0.0 144 .This matrix enhances multidivisional firms’ efforts to formulate strategies.0 Industry Sales Growth Rate Stars II Bank Alfalah Medium 0.0 Medium 0. It stresses that autonomous divisions (or profit centers) constitute the business portfolio. This matrix • Graphically portrays differences among divisions • Focuses on market share position and industry growth rate • Manages business portfolio through relative market share position and industry growth rate Relative market share position is defined as “Ratio of a division’s own market share in a particular industry to the market share held by the largest rival firm in that industry” Relative Market Share Position High 1.0 High 1.
7) Internal – External Matrix This matrix is a continuation and an advanced form of the Boston Consulting Group (BCG) Matrix.23)THE EFE TOTAL WEIGHTED SCORES 4.0 2.0 to 2.0 Bank Alfalah 145 .99 (2.0 to 2.99 2. The same interpretation goes for this matrix as well.0 Medium 2.0 to 1.99 1.0 to 4. The non-availability of the department wise data limits me to construct only a rough sketch of the matrix. THE IFE TOTAL WEIGHTED SCORES (3.0 3.15) Strong Average 3.0 VII VIII IX IV V VI I 3.0 III Weak 1.0 Low 1.0 II 2.0 to 4.99 1.0 High 3.0 to 1.
Forward integration 5. Product development 4. based on the observation. Liquidation Quadrant IV 1. Concentric diversification 3. Retrenchment 2. Horizontal diversification 3. Concentric diversification STRONG COMPETITIVE POSITION 5. Market development 2. Backward integration 6. Concentric diversification 2. Quadrant II 1. Conglomerate diversification 4. Conglomerate diversification 4. Horizontal integration 7. Product development 4 Horizontal integration WEAK COMPETITIVE POSITION Quadrant I 1.8) The Grand Strategy Matrix: The upcoming details and evaluation will show a grand strategy matrix for Bank Alfalah Ltd. Market penetration 3. Liquidation Quadrant III 1. Diversification 6. Divestiture 5. Market penetration 3.Market development 2. Joint Venture RAPID MARKET GROWTH 146 .
Also Bank Alfalah Ltd. So for this purpose.It have experienced and evaluated that my bank lies in the first quadrant of the Grand Strategy Matrix. market penetration and product development are appropriate strategies. So market development. Quadrant I.i-e.SLOW MARKET GROWTH According to my observation while working with Bank Alfalah Ltd. can afford to take risks and advantages of external opportunities in many areas. So continued concentration on current markets and products are appropriate strategies. This is because Bank Alfalah is enjoying a moderate rapid growth in the market and the competitive strategy position as well in the industry. this is the reason that now Bank Alfalah Ltd. 147 . has started the ISLAMIC banking in the countries like Afghanistan and Bangladesh. we can say that Bank Alfalah is in an excellent strategic position..
Bank Alfalah has now achieved a competitive 148 . Marketing mix of Bank Alfalah will be focusing the following major aspects: Product Price Place Promotion PRODUCT Due to trend setting and innovative banking. which can be compared with any foreign. The acceptability of these products is very much effective to the customers. Alfalah provides a wide range of products/ services to its customers. Bank Alfalah has a strong marketing mix structure for its branches growth.MARKETING MIX OF BANK ALFALAH LTD. Thus marketing mix of any organization is very much important in order to ascertain the overall functioning of the organization. Marketing mix is a set of tools you need for establishing your detailed marketing plans and forecasting your sales to pursue the marketing objectives in the target markets. Bank Alfalah presents a range of quality products with revolutionary perks and convenience. or national bank in terms of quality and reliability.
Bank Alfalah has formulated a number of accounts for the deposits of customers. and NGOs are eligible to open current account. companies. 149 . Nature of Accounts Offered No doubt in saying that the basic function around which the banks operations circulate constitute the opening of accounts and ultimately enhancing the deposit base for the branch. clubs.advantage over other banking institutions by offering a complete range of banking solution for its valued customers. Accounts offered by the banks for the deposits of customers constitute the basis of their operations and develop the basic relationship between a banker and customer. These are: • Current Accounts This account offers unlimited deposit and withdrawal facility to facilitate business transactions. Deposit Products Likewise. with unique features. Term Deposit account can be opened by providing a copy of national identity card only. Here is an overview of different products and services formulated by Bank Alfalah. There is absolutely no limit on number of transactions deposits and withdrawals. customers are required to provide proof of their identity and a satisfactory introduction to open any Bank Account. associations. Individuals. As per current laws and State Bank of Pakistan’s regulations. societies. partnerships.
• PLS SAVINGS Accounts Saving account is the most common account for individuals. 150 . • • • No restriction on ATM withdrawal. Saving accounts are designed to mobilize savings primarily from a large number of individuals and households. Maximum 2 deposits & 2 withdrawals through cheque are allowed. • Non interest bearing checking account. Any one or more individuals or partners can open a PLS saving account with the bank.000 with no minimum balance requirement. • • BASIC BANKING ACCOUNT: Initial deposit for account opening is Rs. 1. • ROYAL PROFIT: Royal profit is a highly yield rupee account intended to provide higher rates of profit to high net worth customers and greater flexibility and convenience in terms of transactions. Free debit card can be used to withdraw cash and make purchases at thousands of outlets across Pakistan which provides access to funds 24 hours a day.
it creates a contingency provision for our school going youth’s education in the hapless event of the death of any major breadwinner.• Alfalah Education: Alfalah Education is a Term Deposit product with No Additional Cost (NAC) education insurance cover for account holders with school going children. illness or natural causes) of the main breadwinner (account holder) parent. offers tuition fee reimbursement of children for 15 years of schooling or up to their 20th birthday. • Alfalah Mahana Amdan: Alfalah Mahana Amdan is a 3 year TDR with expected rate of profit of 10% p. in the unfortunate event of the death (either through accident.a. Alfalah Education Account . This term deposit will provide an opportunity to individual/joint customers to enjoy higher returns that will automatically be credited to his/her current/PLS/RP/BBA account on 1st working day of each month. • Alfalah Kifayat :( more than a saving account) Features: 151 . This facility is not available for business and corporate customers. The product seems rewarding in the current scenario of increasing number of children of school going age and the general public interest in quality education of their off springs. beside offering competitive return on TERM DEPOSIT . Alfalah Education offers a competitive return on term deposit and secondly.
The bank will issue the first cheque book of 25 leaves and a Debit card free of cost. This account is for individual/joint customers only. Other customers like companies. No profit shall be payable for a particular month.with a maximum of Rs Card/POS machine. Only one account per customer will be allowed across all branches of Bank Alfalah.000/Three debit transactions are allowed in a month either through cheques or Debit • • All service charges are as per the prevailing ‘Schedule of Charges’.29 days 30 days & above 4. There is no restriction on deposit transactions.50% • TERM DEPOSITS Term deposit is a fixed PLS account where the profit rates increase with the amount as: 152 .• Any Pakistani resident over the age of 18 can open this account. corporate etc are not eligible for opening of this account • • • • • Minimum balance requirement for opening this account is Rs. Profit rates for these deposits are: 07 .000/-. Profit will be calculated on monthly minimum balance basis and will be credited in the account on quarterly basis. if the minimum balance for any particular day of said month falls below the amount of Rs. 1. • NOTICE DEPOSITS These are the short-term deposits of customers where the notice is to be given to the bank prior to the withdrawal. 10.00% 4. 10.000/. 000.
00% 4.Tenures 1 Month 3 Months 6 Months 1 Year 2 Years 5 Years Rates of profit 3.75% 6.6.50% Salient features: • • • • Short to long term deposits Choice of term 1.50% 4.25% 4.12. 50. all leading commercial banks have been offering foreign currency accounts to their customers. • ON-LINE SERVICE 153 . BAL offers US Dollar & UK Pound accounts and profit is being paid on half yearly basis.3.00% 6. Bank Alfalah has done it by facilitating its customers to have their foreign currency accounts in the bank.26 & 36 Minimum balance required Rs.000/Profit paid on maturity of respective term profit rates increase with tenure and amount • FOREIGN CURRENCY ACCOUNTS Due to the increasing globalize business. At present.
that is related to the trade concerns and not the interest based financing or mark up thing. OTHER CONSUMER PRODUCTS Besides the accounts variety that has been mentioned in the previous sections. meals and much more.000 Bank Alfalah’s establishments in Pakistan. Card members are facilitated through a number of promotions from time to time. entertainment. Alfalah VISA lets you pay for shopping. there are a number of strategic business partnerships with leading local and international brands for purchase of home appliances at exciting Step-BY-Step (SBS) monthly installment plan with free home delivery at lowest interest rates. this service facilitates the customers to deposit and transfer their amounts from one branch to another of BAL. In addition. It is accepted at nearly 30 million locations in more than 150 countries around the globe and over 18.Bank Alfalah provides on-line services to its customers. • ALFALAH VISA CARDS (FREE forever) Your Bank Alfalah Credit Card is your partner everywhere and is globally accepted and welcomed at locations displaying the VISA logo. It is being planned to launch a universal account to update this facility and make it more extensive. • ALFALAH HILAL CARD (Debit Card) 154 . Bank Alfalah Islamic Banking provides a wide range of products that are purely Islamic based. travel. At present. Maharajah based financing. These products fall in the category of Musharakah.
The bank is just receiving the rentals from the customers. The customer is able to finance their vehicle(s) the smart way with us. worldwide. one swipe and your transaction is complete. the first Visa Electron International Debit Card which gives you an unlimited access to your current / savings account with a simple swipe. Corporate Employees. • CAR FINANCE Financing a car at Alfalah Bank is very easy with the due favor of no collateral requirement. No more hassle of remembering your PIN for retail transactions and no need to go to the ATM for cash withdrawal.In our endeavor to give you versatile banking options to fulfill your financial needs. The Alfalah HilalCard is globally accepted welcomed at all locations displaying the VISA/ ELECTRON/PLUS logos with self-printing POS terminals. Your card is accepted at nearly 13 million physical locations in more than 130 countries round the globe with above 14. What's more. Ownership of the vehicle(s) is transferred to the client upon 155 .000 major establishments in Pakistan. All businessmen. Bank will purchase the vehicles(s) of the customer’s choice and later rent to the client at a pre agreed rental amount. Alfalah Car is a consumer-financing scheme that enables a customer to own his desired car at easily affordable and flexible installation with minimum down payment and insurance. it is easy to operate and can be used on any electronic self-printing POS machine where VISA is accepted. All maintenance and insurance expenses are borne by the bank because of the reason that the ownership of the car is still with the bank even after the signing of the contract. locally and internationally. at millions of retail shops and ATMs. Bank Alfalah Limited presents you the Alfalah Hilal Card. Salaried and self-employed professionals having net take home income in excess of three times the monthly installment are eligible to take the advantage of this scheme.
storage. quicker TAT and low processing charges. etc. • ALFALAH AGRI FINANCE Bank Alfalah Ltd. therefore.0M. 65 branches are designated to deal with AKF business in the entire country. making it quite exhaustive and comprehensive. storage. silos.50M to Rs 10. harvesting.) c) At Bank Alfalah. transportation. working capital and fixed investment financing of agri non crop activities. BAL model is in letter and spirit based on SBP instruction. The products have been. agri development.satisfactory payment of all the rentals by the time the customer’s security deposits period expires. (Our Edge = Better pricing. (BAL) agri finance program has been named as "Bank Alfalah Zarie Sahulat”. 156 . Bank is extending this service to the clients on a competitive markup rate. The scheme now covers financing of a multitude of activities related to crop production. processing. designed keeping in mind objectivity of practical applicability in market scenario and to cater to the most commonly demanded items of agricultural financing by farmers • Alfalah Karobar finance a) AKF is a Running Finance facility between Rs 0. packing. export. b) Tailor-made product for SMEs for their working capital financing based on the cash flow methodology. marketing.
There are no complicated procedures and you do not need a bank account or a credit card. offers remittance service to Pakistan. Money Gram is person to person money transfer service that allows consumers to receive money in just a few minutes. SOME SERVICES OF BANK ALFALAH LTD. With Money Gram your money is transferred immediately and usually arrives at the receiving end within 10 minutes. other services can take days or weeks. Rupee traveler cheques are been issued at different denominations at Bank Alfalah.000 locations worldwide. MONEYGRAM Bank Alfalah limited. 157 . we are engaged in providing some extraordinary facility services to our customers as well. in collaboration with Money Gram.d) The purpose of the AKF is financing procurement of raw material. What’s more. In addition to the above mentioned products offerings by the bank. The details are as under: • Bank Alfalah Rupee Traveler Cheques Rupee traveler’s cheques are being pioneered by MCB Bank limited initially but these days many banks are engaged in providing this service to the clients. Money Gram is available in over 156 countries and in more than 40. finished goods and receivables of SME businesses. the receiver is handed the cash immediately.
In doing so. A customer can operate his account from any branch in the country. THE BANK ALFALAH’s ON-LINE BANKING is a competitive edge for them. and the prize bonds tucked in the bottom drawer make you feel tense. • Bank Alfalah Lockers Before disclosing the details of lockers facility by the bank. or through its 24-hour ATMs. securities and jewellery etc. Because of the reasons that the bank is providing extraordinary services for the easy lockers. • The online Banking Contrary to other banking organizations. Bank Alfalah is the best Trustee amongst all. a quote needs to be mentioned. For the snatching of the peace of mind.” Bank Alfalah provides safe deposit locker facility to its customers for safe keeping of their valuables like documents. because in this service they provide a facility to their customer that they can operate transfer their amount 158 . Bank Alfalah is constantly engaged in finding new ways to facilitate its customers and to increase its customer net. it tries to develop and build upon relationships that are based on mutual trust and confidence: the very essence of what they call "Relationship Banking". it's time to discover peace of mind. The Bank prides itself on recognizing and fulfilling the varied financial needs of its customers. “If your jewellery has been giving you sleepless nights.• Relationship Banking Relationship banking is basically a term been used for the purpose of the banking 365 days all along and 24 hours a day.
” 159 . • Automated Teller Machines (ATMs) The ATM’s are provoking new ways to attract the customers through facilitating transactions. Its ATMs allow the customers an access to their money 24 hours a day. PIN generation and other services. 7 days a week. outstation and foreign bills o Import export facilitation PRICE The term pricing refers to: “The key to pricing is to Build value into the product and price it accordingly. Miscellaneous Services: o Issuance of Pay Order o Issuance of Demand Draft o Collection of Local.on a phone call! All the requirements for inquiries. suggestions and complaints are handled over the phone. The Auto Teller Machines at Bank Alfalah are continuously running and delivering instant cash facilities to the customers any time in the day. giving you flexibility to bank at your convenience. transactions. • Phone Banking 24 hours UAN connectivity with unmatched ease and convenience servers our customers efficiently through interactive Voice Response delivering cards.
and issued by the bank periodically (generally after six months). which have been discussed in previous section.The price charged for all the products and all the services is given in complete detail in the schedule of bank charges for Islamic banking are as follows: PLACE Pricing refers to the following methodologies taken by an organization: “Various activities the company undertakes to make the product accessible and available to the target customers” Also.Bank Alfalah has to face the ever-increasing competition in the fabric industry. “Its can be viewed as set of interdependent organization involved in the process of making a product or service available for use or consumption” 160 . Pricing of products means the commission to be paid by the customer in return of services provided by the bank. As the number of competitors are increasing day by day but still Bank Alfalah enjoys a reasonable market share with the facts of providing excellent services amongst the competitors. These charges and commissions are prescribed on Schedule of Bank Charges (SOC) that keeps on changing time-to-time. BAL provides different products and services to its customers. The price paid for the services mainly include: • • • Mark up Bank charges Fees and bank commission etc.
The detail description of its branches is as follows: No. Bank plans to add more branches to his growing network in the ensuing years. Kutchery Road. This includes the actual place it is purchased (the shop. to cater for increased business demands. Simply place refers how you will sell your product to your customers. Abbottabad PABX 6 FAX No 0992-344723. Main Mansehra Road. 13 161 . 1 Branch Name Abbottabad Address 191. the telephone. the warehouse) as well as the actual route of distribution. . Supply Bazar. Zain Palace. spread all over Pakistan covering major business centers and principle cities.0992-344728 1 Ahmedpur East Branch Plot#188. Head Office of Bank Alfalah is situated in Karachi. the web page. Bank Alfalah has opened all its branches at commercial and business areas or near to commercial areas so that the customers or clients face no problem in reaching the bank. The objective of Bank Alfalah’s has always been to expand its branch network to meet clients’ needs as has been mentioned clearly in the mission statement of the bank. At present. Bank Alfalah has 195 branches. 0457-835711. Ahmedpur East (062) 2275504-8 (062) 2275503 1 Arifwala Branch 47/D.0457-835717 Qaboola Road. from its existing potential clientele. Block XI.Place refers to the means by which our customer acquires your product. Bank is well positioned and geographically poised.
Rawalpindi Road. Kutchery 58 1 Bahawalnagar Shop # 6.062-2889874 25 1 Bhalwal Branch Burewala Liaqat Shaheed Road.No. Bldg.057-2700248 Building. AL-Aziz Market. Balochistan 0826-613440 0826-613488 1 Karachi Main Branch B.No. Bahawalnagar 2272005-8 (063) 2277437 1 Bahawalpur Branch Ground Floor. Bahawalpur 062-2889922. Burewala 048-6642647 048-6643709 1 067-3771901. Building I. Bahawalpur 062-2889922. Chaman. Bldg. College Road.021-2417006 39 162 . Attock City 057-2701557.Arifwala 1 Attock Branch Zila Council Chowk.V/912. Bhalwal 95-C. A. Circular Road.062-2889874 25 1 Bahawalpur Branch Ground Floor. Tehsil Chowk. Circular Road.Chundrigar 021-2414030. Ghallah (063) Mandi.I.V/912.0543-555220 218 1 Chakwal City trade Centre. Chakwal 1 Chaman Branch Trunch Road.067-3771905 04 0543-555206.
Clifton. Sector 12-B. Shahrahe-Faisal. Block 5. Karachi Clifton Branch Fl-10. Khayaban-eRoomi.A.Jinnah Road Branch Plot No.021. Karachi 8 8 SITE Branch Siemens 021-2582114. (Habib Bank Bldg. Mohammad Shah Street.021-5050653 387 7 M.A.021-2401627 26 021-5833779 .021-5879175 82 3 4 Shahrah-e-Faisal Branch Progressive Square..021-4313539 38 5 Jodia Bazar Branch Gulzar Manzil.021-2582113 163 . Road / Abdullah Haroon Road.Road. Karachi 021-7532482.)M.Jinnah. Karachi 021-2401621.23/1. NP/12/49-50.2750 629 Place. Korangi. Karachi 021-4313536.021-2401627 84 6 Korangi Branch Plot No ST 4/2. KDA Scheme 5. Karachi 021-5050964. Industrial Area. Zelin 021-2750627. PECHS. Karachi 2 Cloth Market Branch Luximidas Street. Block 6. Aiwan-e-Sanat. Jodia Bazar.
Building.R. Industriail Area. Gulshan-eIqbal.A26/5).7/23. Karachi 021-4984937 021-4984971 12 Stock Exchange Branch 18-20. Sumera Apartments.Chaurangi. 021-2544021. Karachi 10 Paper Market Branch Plot No. Karachi 9 116 021-6950805.I.No.35 / Sheet. Campbell Street.No.E. S. KDA Scheme No 24.S.021-6986051 06 North Karachi Branch Plot No SA-1 (ST 1/1/) Sector 12-B. Plot SB-15. Gabol Town.NP-10 (Old Surv. Karachi 021-241751519 13 North Napier Road Branch Ground Floor.T. Paper Market. Karachi Stock Exchange. North Karachi. Block 13B. Karachi 021-2211353. Building at Surv.021-2211243 58 11 Gulshan-e-Iqbal Branch Ground Floor. No.021-254006 24 164 . Stock Exchange Road.
A. 021-4128577. Bahadurabad. Phase V. Karachi 81 15 Timber Market Siddiq Wahab Road. Jinnah Road.021-2412082 40 165 .6344700 021-6803043 18 19 Eidgah Branch.021-4129676 Bahadur Shah Zafar Road. Karachi 14 Bahadurabad Branch 1-3. Near Light House. Karachi 021-4538423.021-7733463 9 021-5304167 16 Defence.021-2217244 4 021-4398457.Napier Quarters. Tipu Sultan Road. Karachi Plot No 40 & 42.112. Prime Arcade.021-4398456 9 20 Tipu Sultan Road 21 Marriot Road Murad Khan Road. PECHS. Federal B Area. Karachi 021-7750635. M. Karachi C-28. Marriot Road. Karachi 021-2414138. Block 13. Old Haji Camp. Defense Housing Authority. 26th Commercial street. Block 2. Karachi 17 PECHS Federal B Area 154-S. Karachi Z-111. Karachi 021-2217290.021-4314221 24 021. Adamjee Nagar. Karachi 166.
021-2585005 4 021-5034451. D.22 Hyderi Al-Burhan Circle. Karachi 28 Tariq Road Branch 29 Malir Cantt Branch Old Malir Cantonment Library. H. Main Hawksbay Road.C. Karachi 021-2585001.021-5887574 73 021-2355873 25 Hawksbay Road 26 Shershah Branch D-283. Block E North Nazimabad. Malir Cantt. Sctor 36-E. Karachi 021-5887571. Landhi Township. Main Shershah Road. Haji Ishaq Market. Karachi 124/A.S. Cantt Bazar.E. A. Karachi Area 5-D.021-4815924 7 24 Korangi bypass (D. Tariq Road. Karachi 021-6626066 23 Gulistan-e-Jauhar 30-31. P. Karachi 021. 9th East Street. SITE. Karachi KB-28.4904601 021-4904602 166 . Main. Karachi 021-4815926. Saima Classic. H.021-5030875 3 (021) 4386052-5 (021) 4386056 27 Landhi Branch. Phase I. Rashid Minhas Road. Block 2. A. Phase I) 114.H.
Plot # 2. 021-5364095.021-5371259 Block 3. Karachi 1 L.0426301193. 2238717.0425. Block-III. Near Ismailia Jamat Khana. SubBlock “E”. 10th Commercial Street. 194/2/1. Bazar Area 021-5868991. Karachi Plot No. Karachi 021-4988695 021-4985729 31 Garden East Branch.30 Gulshan Chowrangi Branch Sani Arcade. 2238605 021-2225941 32 DHA Phase IV. A. Karachi 021-5312832. Gulshane-Iqbal. Karachi 021-2238704. Britto Road. Silver Jubilee Karachi Apartment. Garden East. Defence Housing Authority. Nazimabad. 80. Phase IV. 042-630 5614-18 6307836. Scheme 5. 2238722. Clifton. Block 3.0426368905 167 .021-5312837 35 33 Gizri Sea View K-4/3. Plaza Branch Kashmir Road Lahore 042-630 6201. Karachi 34 35 Nazimabad "Al-Kausar Homes.021-5867149 Clifton. Karachi 93 97 (021) 6708980-83 (021) 6708978 Sahil Promenade. D.
Shah Alam Market. College Block. Township. Lahore 042-7538116. Lahore Cantt.042-6688374 Lahore Cantt Lahore Stock Exchange 19 68 Basement Level 2. Commercial Area. ICCHS (Defence).2 Gulberg.GulbergIII. Badami Bagh. 88. Lahore Branch Defence Lahore Branch 125/E-1. Shadman . Lahore 042-5877800. Akber Chowk. B/1.042-5113716 6 042-7704961 042-7728074 5 6 Badami Bagh Branch 29-30. Branch Township Branch Circular Road. Lahore G-9. Lahore 042-763825658 042-5152831.1.042-5432960 Allama Iqbal Town.042-5729727 26 3 4 Circular Road. Lahore 5 042-7673401. Lahore 7 Allama Iqbal Town Branch 36. Block 10.042-5754900 5 042-5729723. Lahore Hilal-e-Ahmar Complex.042-6307469 11 168 .PECO Road. Tufail Road. Lahore Cantt Lahore Stock Exchange 50/3. Phase-I. Lahore 47. 042-6307461.042-7673409 6 8 Shah Alam Market 9 Shadman Branch Bunglow No. 042-543 2961. 042-6689016.042-7538119 18 10 Tufail Road.
042-7643860 54 19 Shadbagh 37. Akbar Block. Wassanpura.New Garden Town Awami Complex. Lahore 042-5846374. Lahore Raiwind Road. Lahore Thoker Niaz Beg Shahdin Manzil Liberty Market 15 16 042-601 2000 042-6012081 17 10-C. Lahore 12 IBD. Liberty Market. Gulberg III.042-6844010 9 042-7708661. Block 1.042-5846386 81 13 Baghbanpura. Baghbanpura. 19. Commercial 042-5789431.570 0301-9 042-570 0311 169 .T. Lahore Faysal Chowk. Lahore 042-6844006. G. Ravi Road. Lahore 34 18 Azam Cloth Market Rehman Centre.042-6260295 56 20 Defence Extension Divine Centre. Lahore 042-7643851.Umer Din Road. Lahore 13. Near Bhatta 042. Road.042-7708660 5 14 Ravi Road. New Garden Town. Lahore 268. Lahore 042-7616252.Building. Azam Cloth Market. Khayaban-e-Iqbal.042-5755226 Area.
Phase II. Brandreth Road. Lahore Cantt 21 Urdu Bazar Shahdara Branch Urdu Bazar. Ghari Shahu. Lahore 47 042-5884670.7210644 042. Lahore 13 Bank Square. Lahore (042) 6602334-8 (042) 6687391 24 Brandreth Road Branch 91-A. Lahore 65 CCA.042-6610536 32. Officers Housing Scheme. Allama Iqbal (042) 6310973 (042) 6360962 Road.042-5884675 72 27 Model Town. Lahore Main G. Shahdara Chowk. Cavalry Ground Lahore 042-6610531. Lahore 042-7674115.7210647 22 (042) 7900290 (042) 7900291 23 Walton Road Branch E-28/A.042-7671633 18 25 Ghari Shahu Branch 99-A.Chawk. Lahore Central Commercial Market. Main Walton Road.042-5748849 DHA. 28 Cavalry Ground. Model Town. Lahore 042. Lahore 35 Main Boulevard. Near Australia Building.T Road. 042-5748846. 6610534 170 . Lahore 26 DHA Phase II Branch. New Airport Road.
Rewaz Garden.29 Chuburji 24.051-2854932 3 051-7151673. Islamabad 8 F-8 Markaz. 042-5786955.265 3941-49 051-2809 703. 34. Islamabad 4-D. Islamabad 5-A. Blue Area. Markaz 4-A. Mauve Area. Chuburji. Lahore (042)7356640.051-2809 702 711 051-280 4102.(042)7222236 42 30 Main Market Gulberg 32-E-Main Market. Markaz. 051-2260270 051-265 3940 3 4 5 Islamabad Stock Exchange 101.I-10 Markaz. Islamabad 7 G-9 Markaz. F-10 Markaz. F-7. Urfi Centre. G-9 Markaz. F-8 2854615 171 . Islamabad 6 I-8 Markaz. Markaz. Islamabad 39. Islamabad F-7. Waqas Plaza.051-4862567 6 051-2253002. Markaz F-10. Islamabad Plot No. Blue Area. W. Islamabad Shop # 2 & 3 AlMarkaz.042-5786964 Gulberg II. Jinnah Avenue.051-4435807 6 051. I-8 Markaz. Niaz View Scheme.051-280 4106 104 051-4862563. Islamabad 051-2873345. Lahore 59 Islamabad Branch Awan Arcade.051-2279897 8 1 2 I-10. Islamabad 051-4435804. Islamabad Babar Center.
Rawalpindi 3 Jinnah Road . Murree. Building. 5 1 Peshawar Branch Peshawar City Branch 6-B. Lalazar. 091-5287051. Rawalpindi (051)5781484.(051)5781483 Airport Link Road. 400/2.1 The Mall . Rawalpindi 8 Airport Road 7.0515566084. Peshawar Road. 4 6 Lalazar Branch Tulsa Road. Rawalpindi 051-5700038.051-5766005 Commercial Area.05140. Road. 2 172 . Rawalpindi Rawalpindi 051-5775325.091-5287058 Peshawar Cantt. 8 The Mall.0515700037 2 Satellite Town Branch B/20 North Star Plaza. Jinnah Road. 7 091-251794-6 091-251380 Park-in Hotel Building. Satellite Town. Branch Chaklala Scheme III. Rawalpindi B. Rawalpindi 051-5522904. Saddar Road.Fazal Town.051-5527814 5 051-5468401. Rawalpindi College Road A-351. Gammon House. Shah Plaza.A.051-5468403 02 7 Peshawar Road Branch Plot No.0515700029.0515566086 051-442408085 5700042. Rawalpindi 051-5766003.051-5775324 28 051-5762 0008 051-5762 007 4 5 Chaklala Scheme III 59.
1. Peshawar 091-5822903. G. Quetta 081-2827567 081-2460520 081-2827562 081-2460519 2 3 Cut Piece Cloth Market Shahra-e-Iqbal. 907 4 G. Double Road. Railway Road.T.6337704. Chichawatni 040-5487802.Hashtnagri. Jinnah Road. Balochistan Arbab Plaza.C.Peshawar City 3 Hayatabad Hayatabad. Opp: Sarhad Chamber of Commerce.040-5487807 5 047.047. (0943) 412988 1 Chiniot Chitral Branch 1-A. Jamrud Road. Quetta Truck Stand. T. Road 10451046.6337706 05 (0943) 414367.2593003 091-2593001 1 Quetta Branch Hazar Gunji M. Office Road.091-5822908 Karkhano Market. Shahrah-eQuaid-e-Azam D. Quetta 081-2834425 081-2827270 4 Double Road (081) 2441961-62. 2441662 (081) 2441665 1 Chichawatni Rai House. Hazar Gunji. Peshawar 091. A.Road. Quetta. Opposite 1 173 .
Susan Road. Dera Ismail Khan 1 1 Dera Ghazi Khan Branch B. D-Ground.2468104 1 Faisalabad Branch 041-2617436. Taluka & Town Daharki 0723-641255 0723-644040 1 Daska Dera Ismail Khan Gujranwala Road. Attalique Bazar. Chitral 1 414396 Daharki Branch 1285-1287. Deara Ghazi Khan Ground Floor.6619650 Daska 5 0966-720606. Faisalabad 041-8556 673. Liaqat Road. Kashmir Chowk. Madina Town. Jampur Road. State Life Bldg. Daharki. 052. Faisalabad 064 2468201-6 064 . Zafar Bazaar.6616834.052. Rail Bazar. Faisalabad P-81. Faisalabad 041-8722636.0966-720612 610 3666-B.041-8556679 5 041-2540801. Building. North Circular Road.A.041-2617432 9 2 Peoples Colony 237-B. 39 3 Susan Road 25-Z-101. Peoples Colony No 1.Mountain Inn Hotel.041-8722184 Commercial Area.041-2540806 3 4 Rail Bazar. Faisalabad 174 .
Block III.051-3515703 707 1 Gujar Khan 58-D & 59-C.055-3856471 175 .041-2540759 Golden Market. 1 Shahrah-e-Quaid. Millat Chowk. Minerva Road. Gawadar Address e-Azam. New Grain Market.05811-51903 1 Gojra P-86. Gujar Khan 1 Gujranwala Branch B XII-7S-145.5 Yarn Market Branch P-229. Road. Radio Station. Gojra 046-3517876.046-3517878 77 051-3515704. Near. Gilgit 0864-211783 PABX 07 FAX No No. Faisalabad 041-2621486 041-2621487 6 Minerva Road Branch Shop No. 055-3859931. Bohar Wali Gali. 2. Jutial. Tikka Gali No. G. Faisalabad P-352-A. Gulistan 041-8582141. Sheikhupura Road.05811-51904. 16 & 17. Akbar Kiani Shopping Mall.T. Bazar.041-8582147 Colony II. Faisalabad 3 1 Gawadar Branch Name Gilgit Branch Airport Road. Montgomery. Faisalabad 5 7 Sheikhupura Road. 041-2540763.
G.Krishan Nagar. Tehsil Kharian. Gujranwala 1 33 Gujrat Branch Kotla Branch G. Road. Gujrat (053) 7404844-46 0547-540801 (053) 7404840 1 Hafizabad Branch Hangu Railway Road. Haroonabad 063-2256458 PROMOTION 176 .2256457 (0995) 627831 1 Haroonabad Branch 15/16-C. Dinga.S Chowk. Gujrat 053-3530069 0537-586892 053-3530319 0537-586337 2 3 Dinga Thana Road. Road.T. Opp: DCO 43 1 Haripur Main Shahrah-eHazara. Hafizabad Saif ur Rehman Bunglow.T. Road. Gujrat Bhimber Road.0925-624644 Market. Hangu 0547-540804 1 0925-624641. G. G. Main Bazar. Kotla Arab Ali Khan.T.T. Distt. Kohat Road. Haripur (0995) 627451-2 063. Dist. Ghalla Mandi.
Numerous organizations are providing financial services to the customer. Same is the case with banking companies. It not only provides a source of recreation to the people but it serves as a major source of marketing for the bank. Bank Alfalah has adopted different approaches for the accomplishment of this purpose. There is large number of foreign and local banks working in the country and it has been noticed that they are emphasizing much on their marketing strategies. billboards etc are major sources through which the promotion scheme can be implemented. So advertisement. In this scenario. In this world of growing competition. the key for a bank to succeed and attract its customers is adequate promotion of its products &services. in the market place is the proper marketing and promotion of its products. For example. The bank can attract and retain its customers through: Sales Promotion Advertisement Direct Marketing Public Relations The most prominent and important way to attract a large number of customers is the advertisement of bank and its products/services. formation of Alfalah Mini Golf near Gulberg is a major step taken by BAL. These days every one is facing pressure of competitors. This is an age of competition. sales force. for an organization.Promotion is a term that refers to the following statement: “Steps taken by the company to enhance its sales by focusing the target markets” Thus we can say that promotion can be categorized into different categories based on the above mentioned marketing perspective definition of promotion. Due to 177 . the only way to survive and grow.
Some brochures and promotional material has been printed but it is distributed mainly through the clients who visit the branch for their day-to-day business or through the customers who come to get information about new schemes launched by the bank. 178 . BAL Square. which serves as a dynamic source of marketing. even more than other commercial banks. the bank is providing personal services to its clients with maximum security as other banks provide. However. Union Bank Limited has started large media campaign. Bank also encourages the public relation policy of marketing. Also. Bank Alfalah issued its own rupee travellers cheques with highest denomination during the course of my internship. it is named as Bank Alfalah Square. one drawback or shortcoming is that. Banl Alfalah has formalized a lot of products and services for its customers. Since. Along with the advertisement. It would not serve just as a main branch only. I have seen some colored advertisements of RTC’s in some well-known magazines like Herald. but any advertisement on electronic media has not been seen. Bank Alfalahs major competitor. so keeping in view these threats. some fascinating advertisements have been printed on Daewoo City Busses. Bank Alfalah is emphasizing more on its advertisement. Construction of Shaahdin Manzil as main branch Lahore is going to be the revolutionary step for Bank Alfalah.Bank Alfalah’s assistance for the construction of fountain in Liberty Market Square. but it would also be a great source of ever growing marking and promotion of bank. for being situated in such a business and commercial area has its unusual importance and has resulted into bank’s promotion.
I suggest that such an internship program highly integrative for the students of commerce education so that the students should be enquired with the knowledge of practice world .I 179 .RECOMMENDATIONS It was an interested experience to do internship in Bank Alfalah Limited. The staff was highly cooperated and due to their help I learned big deal about modern banking.
System and operations should be more defined and organized. 180 .do summarize that it would be a great help to me in selection of job or future field of work. In this way their efficiency is affected and hiring more employees can reduce their work. The bank’s management should give more incentives and pay scale of officers should be revised & improved. Rather there should be an Audit Department in the branch to make audit on daily basis. so that more customers will be attracted. This can become as helpful as different banks are having this department of their own. Here I am putting some suggestions. IT draw backs should be improved. The employees should be signed jobs for specific period and than they should shifted to other department so that they gain knowledge of other jobs. Audit should be held internally. t is observed that the employees were overburdened so they have to stay I at branch till late at night. Bank Alfalah Limited should properly advertise and Communicate to public about the services provided by it. which will enable the bank to compete with other banks more effectively & efficiently. Administration drawbacks should be improved by the strict control of general issues.
which are very high. ATM. Lockers. Expenditures must be control. all these facilities should be provided to attract more customers. CONCLUSIONS If I have to express my experience of internship in Bank Alfalah Limited Garden Town Branch Lahore I would briefly say: 181 .
Employees at Bank Alfalah are quite efficient. This increases efficiency of the bank. Prioritizing its product portfolio in line with its corporate and consumer needs and wants the bank is committed to develop products that give more value to its customers in both the sectors. loans. Employees are given the benefits like bonus. Overall working environment is comfortable. As Garden Town Branch is a new one. Management of branch cares a lot of its employees and considers them as the Asset of bank. its employees have to bring their bank among the list of good banks. All the customers are entertained individually. 182 . However management is very demanding about the targets but good reward at the achievement of assigned targets is awarded. In bank. Same kind of behavior and attention is given to all the customers. commitment to organization. they work more than their working hours and it is all according to their will.Bank Alfalah is a good Organization in the way that anybody can join it for his/ her longterm career. Balance is fed into the computer. gratuity funds. During my internship training I gathered information regarding how a successful bank operational aspect decorticated with the practical. It also shows their loyalty. and medical. Behavior of senior executive of bank is very polite and they are caring about the individual’s career and their growth. all the work is done on computers. Therefore. All the entries are made in computer. Getting ideas for improvement from customer side is a new idea and that is working very well in Bank Alfalah Ltd. increments. All the customers are asked to fill a suggestion form and the standards of the bank are improved through them.
I found my internship training at Bank Alfalah Limited Garden Town Branch Lahore to be a very rewarding experience. The training was beneficial because it helpful me to aware a real life working environment. Their good attitude gave me more confidence to learn more and to ask if I have any query in my mind. I feel pleasure that I have really gained a lot during 8 weeks & enjoyed working with experienced cooperative & intelligent staff. They helped me to understand the activities of a bank to possible extent. Besides their ever going activities they never get irritant by my questioning. 183 . So far my learning is concerned. all the employees at branch were quite cooperative. I had made an honest efferent to present the working & operation of Bank Alfalah Limited Garden Town Branch Lahore in simplest way.
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