Internship Report on Allied Bank Limited

INTERNSHIP REPORT ON 201
INITERNSHIP REPORT ON
ALLIED BANK LIMITED
SUBMITTED BY:
SUBMITTED TO :
SAHER YASEEN
PROF HASSAN MOBEEN
ALAM BC11-034
HAILEY COLLEGE OF COMMERCE

UNERSITY OF PUNJAB, QUAID-E-AZAM CAMPUS,
LAHORE
B.COM (HONS) 4 YEARS
SESSION: 2011-2015
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LETTER OF TRANSMITTAL
Supervisor,
Prof. ABDUL JABAR KHAN
Hailey College of Commerce,
University of Punjab,
Lahore.
Respected Sir,
It is a great honor for me to present you the internship report as required for the
completion of B.Com (Honors) degree program.
I spent six weeks at ALLIED BANK LIMITED (Sabzazar Branch, Lahore) as
internee. The working environment was very supportive and the staff has been
very cooperative with me in providing information regarding the procedures and
processes in practice. Due to certain legal formalities, I have not been able to
gather all the facts and figures about the organization. In this report I have
covered the history, mission, vision, field of activities, and ratio analysis of
company, my work experience, my observation and my recommendations.
A major theme of this internship report is awareness of organizational structure,
management, administration and public dealing.
Regards;
Saher Yaseen
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Roll No. BC11-034
AREAS COVERED BY REPORT

Followings areas are covered during my internship criteria:
i. Accounts Opening Department
ii. Accounts Department
iii. Deposit Department
iv. Clearing Department
v. Cash Department
vi. Customer service Department
vii. Remittance Department
viii. Credit Department
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ACKNOWLEDGEMENT
“To him belongs the dimension of the heavens and the earth, it is who gives
life and death and he has power over all things” (AL- QURAN)
In the name of Allah who is merciful and beneficent who gives me skills to
complete this report successfully.
I would like to thank my honorable lecturer ABDUL JABAR KHAN, who guided
me in the best possible way.
I would like to acknowledge extremely valuable assistance provided by all
officers at ABL for their great cooperation. They provide paper guidance and
support time to time which helps me a lot to work in such competitive
environment and treated me extra Ordinary at the step of my learning over there.
I submit my thanks to the BDM (Branch Development Manager) Mr. Imran
Bukhari, Operations manager Mr. Waseem Shahid and Clearing Manager Mr.
Mugheez.
Appreciation and thanks goes to the Accounts Opening Officer Miss Sana
Zahra. They give me every information about every department. She provides
me practical knowledge about the function and operations of the bank and also
helps me throughout my internship.
On completing of my internship, Mr. Mugheez has taken charge as the new
Operations Manager of ABL Sabzazar Scheme Branch (0941).
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Table of contents
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EXECUTIVE SUMMARY
I have done my internship in ABL Plot No.112, Civic Centre, Liaquat Chowk,
Sabzazar Branch, Lahore. In this report I have discussed the background of the
organization, the background of the branch, the vision and mission of the
organization. I have also discussed the structure of the organization, structure of
the branch, board of director, executive committee, strength, and weaknesses,
opportunities and threats. In this report I have also performed the analysis of
ratios of financial statements. This report contains complete information of my
activities during internship, duties and accomplishments as internee. I worked
with Account opening officer Miss Sana Zahra in accounts opening department.
She told me about how we fill the cash deposit slips and how we open new
account, she also taught me the method of issuance of Cheque book & ATMs,
Locker operating process and many other banking services., also worked in
clearing department, (customer care department, online facility provide
department, advance and credit department), utility bill paid departmentthe most
important work which I have done is to inform the essential information about the
account which will be operated. The staff made me learns the basics of different
departments in this way. I faced a lot of difficulties during the span of learning but
I got full attention and support from the staff, and they really made me learn a lot.
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During the internship I kept on consulting my internship advisor every week. At
the end of internship the manager gave me the internship letter.
INTRODUCTION & HISTORICAL OVERVIEW

The function of commercial banking and application of the fundamental principles of the
depositor bank relationship have remained essentially the same since about 500 B.C.
Bank operation methods and procedures, on the other hand, have undergone a
constant process of evolution because of economic growth, the mounting volume of
transactions and greater use of banking facilities.
As a result of these contributing factors, methods and practices necessary to handle the
increased volume of detail work have been developed while another and quicker
methods have been adopted in order to cope with the increased volume, much of which
has been accomplished without unduly increasing the cost of doing business.
During the last twenty years we have experienced a constant transition from the old to
the new - from manual to mechanical methods and procedures - from old established
practices to current techniques and to a more scientific approach to the solution of
problems brought about by day to day changes in business practices.
OUR BANKING SYSTEM TODAY

The Banking Business as we know it today is composed of three separate and distinct
principal functions.
1- The acquiring of funds to invest and loan.
2- The investing of such funds in loans and bonds.
3- The servicing of such funds, such as providing of checking/saving facilities, and
the collection of draft, notes and checks.
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These functions, while differing in detail of operation, follow the same principles
established hundreds of years go by money-lenders and exchangers.
Bank Definition
"Banks are institution that enjoys the public money doing nothing for the public".
According the banking ordinance 1962 sec (6),

"Banks mean the acceptance of deposit for the purpose the lending or the investment of
deposit of money from the public repayable on demand or otherwise withdraw able by
cheques, drafts, orders, and otherwise"
BANKER
Banker includes a body of persons whether incorporated or not who carry on business
of banking.
CUSTOMER
Customer is defined as one who has account with the bank. The word customer
signifies a relationship in which duration is not of the essence. All the city branches
accounts are computerized.
HISTORY & BACKGROUND OF ALLIED BANK LIMITED

OVERVIEW
ABL is the first Muslim Bank established on territory that later on became Pakistan. It
was established on December 3, 1942 as Australasia Bank at Lahore with capital of
0.12 million. At that time the chairman was Kh. Bashir Baksh. ABL’s story was one of
the dedications, commitment to professionalism and adaptation to changing
environmental changes.
The bank's history is divided into many phases. During 25 years of united Pakistan the
bank advanced forward in all areas of its activities. 1970’s were a difficult decade for all
Banks of Pakistan. In 1971 East Pakistan was separated and Australasia Bank lost its
50 branches and a lot of capital as well. Nevertheless the growth remained steady.
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In 1974 all the Banks were nationalized including Australasia Bank. The small
provincial Banks were merged into Australasia Bank. On 1st July 1974 the new entity
was renamed as ABL of Pakistan Limited. Then it started its operations as Public sector
financial institution.
DIFFERENT PHASES OF THE BANK
 The Pre Independence Period (1942-47)

Australasia Bank had the unique distinction of being closely identified with some of the
country’s most Prominent leaders of the freedom moment. Such as Mian Mumtaz
Daultana (Board of directors), Mian Iftikhar Hussain and Maulana Zafar Ali Khan.
The bank originally started its operation in the garage of Khawaja Bashir Baksh’s
bungalow (who was the chairman) near the Lahore Railway Station. But the success of
Bank enforced the directors to open its another branch in Anarkali on 1st March 1944.
Kh. Bashir was first chief executive. He was the person who was really working in its
development. His sincerity of purpose can be judged from his great moments.
Another branch was opened at Amaratsar in 1945. In June 1946, the bank earned the
status of scheduled bank. During 1946-47 many other branches were opened at
Mcleod Road Lahore, Jallandhar, Ludhiana, Agra and Delhi.
At independence the industrial and commercial sectors were underdeveloped but ABL
contributed a lot in the development of these sectors.
 Australasia Bank In Private Sector (1947-74)

It was the only full functional Muslim Bank on the land of Pakistan. On August 14, 1947
bank was identified with Pakistan moment. Many of its Board of Directors were
prominent Muslim League leaders. Jallandhar and Ludhiana branches were attacked
by rioters because of Muslim staff appointed in these branches of bank. But when the
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Pakistan flags were hoisted on the branches then all the banks in India were closed
down. With this, the bank lost a lot of capital and its deposits and almost 6 branches.
During 1948 new branches were opened at Karachi, Rawalpindi, Peshawar, Sialkot,
Sargodha, Jhang, Gujranwala and Kasur. But later on its branches were spread to
Multan and Quetta. At that time bank n trade financed in cloth and food grains and thus
maintained consumer’s supplies during the riot effected early months of 1948.
Australasia Bank made a profit of 50,000/= in 1947-48.
In August 1948, Australasia Bank became the first Pakistani Bank to successfully
negotiate and open L/C for a Sialkot based importer of books. So it also made
correspondence relations with Midland (UK), Chase Manhattan (USA) and Lloyds
(India).
During the treasury functions of Federal Govt. of Pakistan and it also acted as Banker to
several local Govt. Bodies and to the Punjab University during this period. Treasury
functions were taken by National Bank of Pakistan in 1949. In 1950-51, Chairman was
replaced with his own brother Kh. Sharif Baksh.
During 1955-56, Mr. Naseer A. Sh. became the Chairman of Board and close working
relationship was forged between the new Chairman and Managing Director. This
partnership proved in modernizing its operations and consolidating its financial position.
In 1963, Bank had 29 branches in various cities. And deposits were 89 million and
advances were 66 million. Bank was mainly concerned with general banking and trade
financing (including foreign exchange transactions). It helped a lot in development of
small and medium sized business houses. These were Nishat, Crescent, Pak Cement,
Haroon traders, Takht Bhai Sugar, Insaf, Punjab soap, Pak fruit and Saboor Oil Mills etc.
In 1964, 13 new branches were opened including 3 in East Pakistan. In 1965, 17 new
branches were opened and over 83 % of gross profit for the year was earmarked for
development expenditure in connection with opening of new branches.
In 1966 bank opened 26 new branches and doubled its reserved funds. For the first
time in history, its advances were increased to Rs. 160 million and deposits raised by
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almost 58 % exceeding Rs. 232 million. In 1966, Central Office was built in Karachi but
Head Office remaining at Shah Chiragh Building, Lahore.
16 new branches were opened in 1967 and 20 in 1968. Respectively their funds were
increased gradually. 21 new branches were opened in 1971. But separation time the
51 branches were lost by the bank which was a big loss.
 Allied Bank: Public Sector Years (1974-91)

Under the Nationalization Act of 1974, 14 scheduled banks were taken over by the
Government. Australasia Bank’s Board of Directors was dissolved and the bank was
renamed as Allied Bank of Pakistan Limited. Sarhad Bank, Lahore Commercial Bank
and Pakistan Bank Limited were merged into Australasia Bank. At time of merge, ABL
was second highest among all the banks Nationalized in 1974.
Allied Bank’s first Executive Board was constituted of Mr. Iqbal A. Rizvi as President,
Mr. Ajmal Khalil as Joint President and Mr. Khadim Hussain Siddique as member. In
1974 Mr. I.D. Junejo and Mr. Safdar Abbas Zaidi joined the Board later. 116 new
branches were opened in 1974 and it started participation in commodity Operation
program of Government.
In 1970’s Bank played an important part of agricultural area loans and other loans. In
1976 Mr. Ajmal replaced Mr. Rizvi as Chief Executive and President. During 1974-77,
361 new branches were opened and 230 of these were located in villages and small
towns. It also opened its foreign branch in London, near the Bank of England. In 1980
the Bank of England granted Allied Bank recognition as a full fledge Bank under the
U.K. Banking Act.
In 1981, President was changed. In 1984, again new president was come to know. He
tries to increase the international business. It also initiated a major counter program. In
1985, mainframe computer was installed and effective management system was
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developed. During this period profitability was increased. New President Mr. Maqbool
introduced different schemes in 1987-88. In 1989, new 13 branches were installed.
Over 1991, 745 branches were there in all over the Pakistan.
 A New Beginning
In November/ December 1990, the Government announced its commitments to the
rapid privatization of the Banking sector. Allied Bank’s management under the
leadership of Mr. Khalid Latif decided to react positively to this challenge. In September
1991, ABL entered in a new era of its history as world’s first bank to be owned and
managed by its employees. The 850 executives and 7200 staff members spread over
800 branches throughout the Pakistan established a high degree of cooperation and
family feelings.
 Allied Bank (1991-2004)
As a result of privatization in September 1991, Allied Bank entered a new phase, and
became theworld’s first bank to be owned and managed by its employees. In 1993 the
“First Allied Bank Modaraba” (FABM) was floated. After privatization, Allied Bank
became one of the premier financial institutions of Pakistan. Allied Bank’s capital and
reserves were Rs. 1.525 billion; its assets amounted to Rs. 87.536 billion and deposits
to Rs. 76.038 billion. Allied Bank enjoyed an enviable position in Pakistan’s financial
sector and was recognized as one of the best amongst the major banks of the country.
In August 2004, as a result of capital reconstruction, the Bank’s ownership was
transferred to a consortium comprising Ibrahim Leasing Limited and Ibrahim Group.
Today, the Bank stands on a solid foundation built over 63 years of hard work and
dedication, giving it a strong equity, an asset and deposit base and the ability to offer
customers universal banking services with more focus on retail banking. The Bank has
the largest network of online
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branches in Pakistan and offers various technology-based products and services to its
diverse clientele through its network of more than 700 branches.
 Allied Bank (2005 To Date)

In May 2005, Ibrahim Leasing Limited dissolved and the company was vested into Allied
Bank Limited. ALL the shareholders were issued ABL shares instead of the all shares
held by them. An application for the listing of ABL shares in all the Stock Exchange
Companies of Pakistan was made.
ABL was formally listed and the Bank’s share trading began on the following dates i.e.
 Islamabad Stock Exchange August 8, 2005,
 Lahore Stock Exchange August 10, 2005 and
 Karachi Stock Exchange August 17, 2005.
Today, all Allied Bank Limited shareholders can trade in the Bank’s shares at their will
and the Bank stands on a solid foundation of over 63 years of its existence having a
strong equity, assets and deposits base offering universal banking services with higher
focus on retail banking.
 Year 2007
Mohammad Aftab Manzoor has taken charge as CEO and President of the Bank on
August 13 2007. He is an ex-president of MCB Bank Ltd.
 Today
Today, with its existence of over 60 years, the Bank has built itself a foundation with a
strong equity, assets and deposit base. It offers universal banking services, while
placing major emphasis on retail banking. The Bank also has the largest network of
over 700 online branches in Pakistan and offers various technology-based products and
services to its diverse clientele.
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MISSION, VISION STATEMENT & OBJECTIVES
VISION
The Vision of Allied bank is:
“To become a dynamic and efficient bank providing integrated solutions in order to be
the first choice bank for the customers”.
MISSION
The Mission of Allied bank is:
 To provide value added services to our customers
 To provide high tech innovative solutions to meet customers’ requirements
 To create sustainable value through growth, efficiency and diversity for all
stakeholders
 To provide a challenging work environment and reward dedicated team members
according to their abilities and performance
 To play a proactive role in contributing towards the society.
CORE VALUES
The core values of Allied Bank are these:
 Integrity
 Excellence in Service
 High Performance
 Innovation and Growth
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OBJECTIVES
Allied Bank has following objectives:

 Prime focus to earn profit by providing values to its customers
 To provide superior services to its customers
 To provide assistance in the development of the commerce and trade industry
 Focus on blending skills and experience towards creating an enabling
 environment
 Core focus is to inculcate a culture of collaboration intended to deliver world
class customer service.
 Enhancing brand image and creating shareholders’ value through sustainable
performance, while optimizing return against acceptable risk appetite.
 Augmenting financial inclusion of unbanked population through innovative and
diversified technologies, building customers’ confidence through convenient
delivery channels and product designs.
 Continuous re-engineering of policies, procedures, SOPs, SLAs and TATs,
ensuring operational efficiencies through effective management of key resources.
 Instilling a culture of ethics and responsibility among human resource and
becoming an ‘Employer of Choice’ for the Top Professionals.
ORGANIZATIONAL STRUCTURE OF ABL
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BOARD OF DEPUTY GENERAL CLERICAL STAFF

DIRECTORS MANAGERS MEMBERS
CHIEF EXECUTIVE ASSISTANT GENERAL NON-CREICAL STAFF

OFFICER MANAGER MEMBERS
CHIEF OPERATING
PRINCIPLE OFFICERS
OFFICER
GENERAL
SENIOR OFFICERS
MANAGERS
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BOARD OF DIRECTORS
President/CEO
Board of Directors
Committees of
Board
“The people who draw the picture of the organization on the broader canvas of
strategy and planning, the pioneers of prosperity and world of wisdom that paves
the path to long term success”
Mohammad Naeem Mukhtar

Chairman / Non Executive Sponsor Director
Sheikh Mukhtar Ahmad
Non-Executive Sponsor Director
Muhammad Waseem Mukhtar
Non-Executive Sponsor Director
Abdul Aziz Khan
Independent Director
Pervaiz Iqbal Butt
Mubashir A. Akhtar
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A. Akbar Sharifzada
Government Nominee Director
Tariq Mahmood
Chief Executive Officer
Sheikh Jalees Ahmed
Executive Director
MANAGEMENT
“The brilliants whose passion is dedicated to discover newer ways to make the
organization goals reality”
Tariq Mahmood… Chief Executive Officer
Sheikh Jalees Ahmed…Executive Director
Khawaja Muhammad Almas…Chief, Commercial & Retail Banking
Muhammad Jawaid Iqbal…Chief Corporate & Investment Banking
Ahmad Faheem Khan…Chief Treasury
Abdul Hafeez Butt…Chief Islamic Banking
Muhammad Shahzad Sadiq…Chief Risk Management
Tahir Hassan Qureshi…Chief Financial Officer
Zia Ijaz…Chief Banking Services
Fareed Vardag…Chief Compliance
Saif ul Islam…Chief Special Assets Management
Muhammad Mohsin…Chief Audit & Risk Review
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Afzal H. Bukhari…Chief General Services
Muhammad Raffat…Company Secretary
• MANAGEMENT HIERARCHY
President
Senior Vice President
Vice President
Senior Executive Vice President

[rosodmemtPresident
Executive Vice President
Regional General Manager

Managerxecutive Vice President
Branch Manager
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Branch
Manager
BOM BDM
CD Credit
BSO BDO RM CSO
Incharge Officer
Tellers
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BRANCH HIERARCHY
BOM Branch Operational Manager
BDM Branch Development Manager
BSO Branch Service Officer
RM Relationship Manager
CSO Customer Service Officer
BOARD COMMITTEES
Different board committees operational in Allied Bank are:
Audit Committee of the Board
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 Mubashir A. Akhtar…Chairman
 Pervaiz Iqbal Butt
 Akbar Sharifzada
Responsibilities
Primary responsibilities of the Audit Committee of the Board (ACOB) are:
 To determine appropriateness of measures taken by the Management to
safeguard Bank’s assets.
 Ensure consistency of accounting policies, review financial statements and
recommend appointment of the external auditors and close coordination
with them to fulfill statutory and Code of Corporate Governance
requirements
 To ascertain the effectiveness of the Internal Control System including
financial and operational controls, ensuring adequate and effective
accounting and reporting structure and monitoring compliance with the
best practices of the corporate governance.
 To assurance that an independent and effective internal audit function is in
place.
Board Risk Management Committee
 Sheikh Mukhtar Ahmad…Chairman

 Muhammad Waseem Mukhtar
 Abdul Aziz Khan
 Tariq Mahmood
Responsibilities
The primary functions of Board Risk Management Committee (BRMC) are:
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 to monitoring of Management’s adherence to prudent and sound risk
policies, assessing the ever changing risk profile and providing risk
appetite to the business units.
 to also ensures development of risk management principles to build
stakeholders confidence, safeguard and enhance reputation.
 to approve risk limits for credit, market and operational risks, credit
approval grid and proposals regarding write-offs above certain limits.
E-Vision Committee
 Mohammad Naeem Mukhtar…Chairman
 Mubashir A. Akhtar
 Tariq Mahmood
Responsibilities
The key missions of the e-Vision Committee is :
 To provide strategic direction for e-banking and adoption of evolving
technologies.
 To review of strategic plans to improve it infrastructure and automation of
processes and systems including alternate delivery channels are also
within the scope of the responsibilities of the e-vision committee.
 To provides assistance to the board with insights regarding international
development in the field of e-banking adoption keeping in view the bank’s
requirements. It also oversees performance of information technology
Group.
Strategic Planning & Monitoring Committee
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Muhammad Waseem Mukhtar…Chairman
Sheikh Jalees Ahmed
Abdul Aziz Khan
Tariq Mahmood
Responsibilities
The Strategic Planning and Monitoring Committee (SPMC) is responsible to
review in rolling long term strategic plans, operational plan and budget of the
Bank before their consideration by the Board. The Committee also monitors
progress against above referred plans and budget. Committee assists the Board
on corporate development activities and new initiatives including, but not limited
to acquisitions, mergers, alliances, joint ventures and divestitures etc.
Human Resource & Remuneration Committee
Members of committee are:

 Abdul Aziz Khan (Chairman)
 Pervaiz Iqbal Butt
 Tariq Mahmood
Responsibilities
 To define the organizational structure and functional responsibilities of
organizational levels
 To approve staff strength ,special allowances /facilities not admissible
under normal rules
 To recommend the board regarding selection, evolution, compensation of
the key management positions.
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Company secretary
Muhammad Raffat
Legal Advisor
Haider mota & company (barrister at law counselors)
Auditor
 Ernst &young ford Rhodes sidat haider (chartered accountant)
 KPMG (hadi taseer & company)
Shares Registrar
Technology trade pvt.ltd
Central office
Bath island khyban-e-iqbal
Main Clifton road .Karachi -7600
Registered head office

3 tipu Block Main Boulevard
New Garden Town
Phone no. 042-35880043
Postal code 54000
ALLIED BANK PRODUCT AND SERVICES
Deposit Accounts
 Current Accounts
 PLS Saving Accounts
 Term Deposits
 Short Term Deposits
 Special Notice Deposits
 Call Deposit Receipts
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Money Transfer Services
 Bank Drafts (DD)

 Mail Transfers (MT)
 Allied Express Money Transfers
 Letter of Authority to Encash Cheques
Collections
 Cheques
 Bills
 Drafts / Pay Orders And Other Instruments
Dealing in Foreign Exchange
 Foreign Currency Accounts

 Foreign Remittances
 Trade Finance
 Guarantees
 Sale & Purchase of FC Notes / TCs.
 Foreign Currency Loans
 Correspondent Banking
Government Receipts / Payments
 Tax Collection
 Pension Payment
Safe custody & sage deposit services
 Safe Custody And Safe Deposits of Securities & Valuables

 Safe Deposit Lockers
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Currency Chest Transaction
Utility Services
 Collection of Utility Bills
Hajj Services
 Hajj Applications
DEPARTMENTAL DETAIL
The departments working at ‘ABL --- Civic Centre, The Liaquat Chowk, Sabzazar
Branch (0941) are:
OPERATIONS DEPARTMENT
This is one of the major departments of Allied Bank Limited. It consists of
following sub department:
ix. Accounts Opening Department
x. Accounts Department
xi. Deposit Department
xii. Clearing Department
xiii. Cash Department
xiv. Customer service Department
xv. Remittance Department
xvi. Lockers
Accounts Opening Department
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Accounts are assumed to hold immense importance in the basic banking
operations of all the Commercial Banks. The reason being of this significance
importance is that it serves as a first step in establishing customer bank
relationship. The main objective of any bank is to attract as many accounts and
deposits as possible. In regard of generating new accounts and attracting huge
deposits for the bank the branch development officers (BDOs) play a vital role as
well. The basic function of this department is to understand the basic customer
requirements and guide them accordingly in scenarios i.e.
 Opening of Accounts
 Closing of Accounts
Opening of New Accounts

Account opening is a deal between bank and customer. In this contract the bank
plays the role of agent for its customer. Opening of a new account is formal
procedure that starts off from application form and completes with allotment of an
account number to the customer. The requirements or particulars needed for
opening a new account varies on the basis of nature of accounts i.e.
1) For Individual Account

 Application from customer on specialized printed form obtained from
ABL
 Person should be major i.e. he/she has obtained the age of 18 years
 National Identity Card
 He/she must be able to sign otherwise three passport sized
photographs of the individual are required
 Minimum opening balance limit is 500 or 1000
2) For Joint Account
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 Application from customer on specialized printed form obtained from
ABL (the request must be made by individuals who have a blood
relation i.e. brother-sister, father-son etc.)
 National Identity Card of all members
 Operating instructions are signed
3) For Sole Proprietor Account
 Written application on letter head of business
 Stamp of business
 Date of start of business
 Office or locality of business
 National Identity Card
 National Taxation Number (NTN) issued by Federal Board of Revenue
(FBR)
4) For Company
 Written request to branch manager on letter head of company (with
signatures of all the directors)
 National Taxation Number (NTN)
 Memorandum of Association
 Article of Association
 List of directors
 Board resolution
 Seal/stamp of company
 Operating instructions signed by members of the company
Forms to be Filled
Following three types of forms are filled at the time of opening a new account i.e.
 Account Opening Form

 Know Your Customer Form (KYC form)
 Customer Profile Form (CP)
Closing of Accounts
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There are two types of closing of account i.e
 By request from the customer

 By the bank itself
If the customer does not operate its account for six months then the account is
declared to be dormant. A letter in such a scenario is sent to the customer and
he/she is asked to come along with his/her CNIC in order to operate his/her
account. But if there is no response from the customer then the deposits in such
an account are considered to be unclaimed and handed over to State Bank of
Pakistan (SBP).
ACCOUNTS DEPARTMENT
Account department maintain the income and expense accounts of the bank.
There are many heads of Income and expense accounts such as:
1) Heads of Income Account:
 Online Commission
 OBC Commission
 L.C Commission Etc…
2) Heads of Expense Account:
 Electricity Bill
 Gas Bill
 Telephone Bill
 Branch expenses
 Entertainment of customer
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 Generator expenses Etc…
3) Vouching
Vouching means to record transactions for future and to balance the book and
system.
There are four types of vouchers.

1. Debit cash Voucher (Pink)
2. Credit cash Voucher (Green)
3. Debit Account Voucher (White)
4. Credit Account Voucher (Yellow)
Process of vouching:
Date
Account No/Head
Amount in Words
Amount in Digit
Narration
Posting
Supervision
PAK Account
Pak account is the main account of any bank. This account use to transfer
money online between banks. This account can be debit or credit by transfer
online or by advice of Pak account by other bank.
Account department maintain the PAK account’s transactions.
CLEARING DEPARTMENT
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A system by which the banks exchange cheques and other negotiable
instruments drawn on each other within a specific area and thereby secure
payment for their clients through the clearing house at a specified time and in an
efficient way.
Now the question arises that how these cheques & other negotiable instruments
drawn on the branches of some other bank of the same city or of the different
city, are being processed?
Clearing House --- NIFT (National Institute of Facilitation Technologies)
The Clearing House facilitates different banks to get their cheques drawn upon
other banks to be cleared. Clearing house can be defined as;
Clearing house is that department of central bank where the representatives o
member bank and financial institutions gather to clear their accounts.
In other words, clearing house is a place at the central bank or any other leading
bank of the locality where the representatives of the member banks come at a
fixed time and exchange cheques or draft drawn on each other and settle the
resulting balances through entries in the books of the bank acting as clearing
house. In Pakistan, nowadays the function of clearing house is performed
through National Institutional Facilitation Technologies Pvt. Limited (NIFT).
In order to regulate the functioning of clearing of cheques Allied Bank Limited has
a clearing department. The aim of the Clearing Department is to set the rules for
the clearing, to ensure the accomplishment of such rules and to supervise that
the clients and members, fulfill their obligations.
Types of Clearing
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There are two main types of clearing i.e.
 Inward Clearing
 Outward Clearing
Inward Clearing – cheques and other instruments drawn on ABL and presented
by other banks. In inward clearing branch acts as paying banker. After realization
of inward clearing, bank’s deposits are decreased as bank makes payment to
other banks from the balances held by the branch.
Suppose a person deposits a cheque in Habib Bank Multan Cant branch, drawn
on any ABL Sabzazar branch; let it be the ABL main branch. The representative
of HBL will exchange this cheque with the ABL’s representative in the first
clearing in Clearing House. If the cheque is honored by the ABL main branch
then SBP will debit and credit the respective accounts. This is called Inward
Clearing.
Outward Clearing – cheques and other negotiable instruments drawn upon
other banks, say NBP’s cheque is presented in ABL to deposit them in the
respective payee’s accounts. After realization of outward clearing the bank’s
deposits increase as bank accepts payment from other banks.
Suppose a customer deposits cheque in ABL SABZAZAR BRANCH, drawn on
Habib Bank Multan Cant branch. Then the representative of ABL SABZAZAR
BRANCH will take this cheque to the Clearing house in SBP, where
representatives of all banks gather daily. Now in first clearing this cheque will be
exchanged with the representative of Habib Bank Multan Cant branch. In the
second clearing, if the cheque is honored, he will tell it to the ABL representative
and so the SBP credits the account of ABL SABZAZAR BRANCH and debits the
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Habib Bank Multan Cant branch through the clearing account. This is called
Outward Clearing
Other types are of clearing are; Inter-City Clearing & Same Day Clearing.
Inter-City Clearing --- when two banks/branches of two cities are involved.
However in case if NIFT is not operational in that specific city then the instrument
is sent via courier service and this is called Outward Bills Collection (OBC)
OBC stand for outward bill for collection.

This type of clearing sent to other cities through mail where STATE BANK did not
exist Like smal town and cities Okara, Sahiwal, Toba Tak Singh, Jhang, Jhelum
etc…
Procedure of OBC:
1. Stamp of OBC
2. Stamp of Payee’s Account will be credited
3. Schedule of OBC
4. Signature of clearing officer
5. Posting
6. Vouching
OBC debit and OBR credit in the vouchers at the time of OBC sending.
OBR debit and OBC credit if OBC realized.
If OBC returns then it will be dishonored
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OBC takes 5 days to return.
Charges of OBC
Fedral excise Duty 17%
Postage charges Rs. 75
OBC commission 100
Same-Day-Clearing --- when the cheques are cleared on the same day then it is
referred to as same day clearing. It is the service in favour of the customer.
In case of local clearing (inward/outward) it takes one day however in case of
intercity clearing the minimum time might be three days.
Procedure for Clearing (within city)
When cheques are sent to clearance to branches within city than after checking
the date on the cheque following three stamps are put on it:
 Crossing Stamp on Front
 Clearing Stamp on Front (with next day’s date)
 Payee’s Account Credited at the back of cheque
CASH DEPARTMENT
Cash Department is regarded as the most sensitive department of any bank. All
dealings of cash whether inflows or outflows are handles by this department. The
cashiers are called tellers. The functions performed by cash department are
discussed below:
 Deposits (Cash Inflows)
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An individual who has an account in any bank can deposit money in his account.
For the deposit of cash the individual has to fill the deposit slip properly. This slip
contains following details; title of account, account number, date and amount in
word and figures.The cashiers of banks are also required to prepare a list of bills’
serial numbers as a copy of this is to be sent to the corresponding organization.
 Payments (Cash Outflows)
It is a banker’s primary contract to repay money in customer’s account usually by
honoring his cheque. First the cheque is presented by the customer or holder to
the cashier. The cashier verifies the date, amount in words and amount in
figures, payee’s name crossing if any, account number, cheque serial number,
any material alterations, endorsements and signature of the customer. The
cashier also verifies that whether the amount demanded by the cheque holder is
available in his/her account or not. If the system gives a green signal then the
account is debited and then the officer cancels cheque. Cash paid stamp is
affixed on the face of the cheque. And the account of that particular customer is
updated.
 Cash Book Balance
At the end of the working day cashier is responsible to maintain the cash balance
book. The consolidated figure of receipt and payment of cash is entered in the
cash book and the closing balance of cash is drawn from that. The closing
balance of today will be the opening balance of tomorrow. (Opening Balance of
Cash + Receipts - Payments = Balance)
 Management of Cash
It is necessary for every branch to maintain a specific amount of cash with it at
any time, so that when a customer comes to get cash, he may get it promptly.
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ABL has put an appropriate limit on its branches that they should keep that
minimum level of cash with them at any time. This limit is different for main
branch and other sub-branches.
Cash department deals in cash by deposit of cash and withdraw of cash. This
department also control and manage the ATM machines.
One Window Operation
In one window operation a single person deal the customers who come to
withdraw the amount less than 25000. This single person
Checking of Cheques before Payments:
The cheque may contain the signature of account holder.

There should be same amount in words and amount in digit.
There should be no cutting or over writing on the cheque.
The date should be written.
A cheque is not useful after six months
Online Transactions
All online transactions like fund transfer, online money receiving online clearing of
cheque receiving of online commission also done in the cash department.
Requirements for online transaction
Slip of online deposit

A copy of CNIC in case of Walk-In Customer
A cheque in case of account holder
ATM Machines
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ATM machines are the cash machines the cash can be withdraw from ATM debit
card. The maintenance and cash fill up of ATM machine is the duty of operation
department.
DEPOSIT DEPARTMENT
The function of deposit department is to collect deposits from customers.

Following type of deposits are offered by Allied Bank.
1) Current deposit
2) Saving bank deposit
3) Profit and loss saving account
4) Fixed deposit
5) Call deposit
6) Short notice term deposit
7) Foreign currency deposit
8) Cumulative deposit certificate (other)
1. Current Deposits
In the type of account the client is allowed to deposit or withdraw money as and
when he likes. He may, thus, deposit or with draw several times in the day if he
likes. Usually the bank allows this and service chargers are deducted by the bank
and current deposit account.
2. Saving Bank Deposits
This type of account is for those persons who want to make small savings. This
type of account is opened with Rs. 100. In this case deposits can be made only
up to a costing amount and with drawls are allowed twice a week. If the
depositors wants to withdraw more than Rs. 15000 a seven days notices is
required before the withdrawal.
3. Profit and Loss sharing Deposits
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These types of accounts are one step towards the Islamisation of Banking
system in the Pakistan. Under such types of accounts the bank allows no interest
to the customers. The executive board of the bank declares profit or loss every
year. PLS saving account having a running minimum credit balance of Rs. 100
would be eligible for sharing profit/loss of the bank. The rater of profit or loss on
PLS saving accounts shall be determined by the bank at the close of each half
year, in its sole discretion and the banks decisions shall be final and binding on
the PLS account holder.
4. Fixed Deposits
In the type of account a certain amount is deposited for a certain, period such as
six-month, two years or longer. A fix deposit receipts is issued in the same of the
depositor. The officer in charge and the bank manager sign the receipt. A notice
is given to the depositor requesting the depositor to withdraw his money or to
renew this deposit. The interest allowed on fixed varies with the period for which
the deposits are made.
5. Call Deposits
Call deposits are the sorts of deposits, which are deposited with the banker
against any tender. This is without interest deposits, this may be with interest
provided the depositor has agreed to keep its amount with the banker for some
fixed period.
6. Short Notice Term Deposits (S.N.T.D)
This kind of deposit is for a short period. The depositor may withdraw his deposit
at any time by giving seven days’ notice to the banker. In this type of deposit
facility the trader is allowed to withdraw his amount with interest of the deposited
period.
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REMITTANCE DEPARTMENT
Remittance is transfer of funds from one place/person to another. A remittance is
an important service provided by banks to its customers and non-customers as
well. It is not a free service therefore acts as a source of income for the bank.
The parties involved in the procedure of remittance are:
 Remitter --- one who initiates/makes request for transfer of funds. The
remitter comes to the bank, asks for remittance to be made and deposits
the funds to be transferred. The bank charges him a fee for this service. He
might or might not be the customer of the bank.
 Remittee --- one who receives the funds or on whose name the remittance
is made is the remittee or payee.
 Issuing Bank --- bank that sends the remittance through demand drafts,
telegraphic transfer or mail transfer.
 Paying Branch --- also known drawee bank. The bank on which the
instrument is drawn. It is the one now responsible to make payment to the
remittee.
Mode of Remittance
At Allied Bank Limited the remittance can be made through following mode of
transference:
1) Demand Drafts (DDs)
Demand draft is a popular banking instrument in the trade circles to transfer
funds from one place to another. Allied Bank offers speedy issuance and
payment of drafts at the branches. The different heads mentioned on demand
draft are:
 Amount to be sent
 The name of the person to whom it is to be sent
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For the issuance of DD a particular form is filled which contains the particulars of
the beneficiary and sender. The sender deposits the amount of DD plus
commission on the bank’s counter. DD is payable at any branch of issuing bank.
2) Pay Order (PO)

Pay Order is a banking instrument issued by a bank in Pakistan Rupee at the
request of the customer. The customers can walk-in to any Allied Bank branch
and ask for the issuance of a pay order in order to transact payment to a named
payee. POs are payable at issuing branch only.
3) Call Deposit Receipt (CDR)
It is an instrument like cheque issued by the bank on account of a customer and
in favour of another person to pay the specified amount. CDRs are mostly issued
to make payments especially when a company goes for some tenders or
purchase of govt. securities. CDR also like POs are payable at issuing branch
only.
4) Telegraphic Transfer (TT)
TT is another fastest mode to transfer of money. The sender is required to apply
through a form in which he will give all the necessary details about the sender
and beneficiary. The sender deposits the money along with bank charges at the
cash counter. On TT no excise charges are applies only bank charges and
telegram charges are added.
CREDIT DEPARTMENT
The basic function of a bank is to receive deposits at low rate of return and to
lend money at high rate of return. So, the lending constitutes a vital part in the
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operations of a bank. This department is the major source of income and
earnings for the bank. These earnings are the result of numerous borrowings
made by the customers of the bank.
Important Terms of Loan
Following term are used frequently at the time of advancing loans:
1. Lien
Under Lien the bank holds the right on the property of the borrower until the claim
on the property is paid. It is a form of protection in favour of the bank against loss
or overdraft or any other credit facility. In ordinary lien the borrower remains the
owner of the property, but the actual or constructive possession remains with the
bank, though the owner (borrower) has no right to sell the property.
2. Pledge
Pledge is a contract between the borrower and the bank whereby the goods are
transferred into the banker's possession while the ownership remains in the
possession of the borrower. This possession remains with the bank until the
payment of loan is dully made. In case of default, the bank can sale the goods
after giving the notice.
3. Mortgage
Mortgage is a written agreement between the borrower and the lender for
obtaining loan against immoveable property (i.e. land, building etc.) In this type of
security the borrower provides assurance to the creditor (bank) of legal right in
property as security for the discharge of debts. In this case the legal rights
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(documents) are transferred to the bank and the property remains under the
possession of the borrower.
4. Hypothecation
Hypothecation is a term where goods are charged for the purpose of security
without transferring them to the lender (bank). It means the possession and
ownership of goods remain with the borrower. In case of non-payment the bank
approaches the court of law to receive full rights of selling the hypothecated
property.
Types of Loans/Financing Provided by the Allied Bank Limited
1) Fund Based Financing

2) Non Fund Based Financing
Fund Based Financing

Allied Bank Limited is providing following set of fund based financing to its
customers:
1) Short Term Finance --- given for a period one year or less. The mark-up
on this type of loan is recovered on daily basis.
2) Medium Term Finance --- it is also called term loan and the duration for
this type of loan is one to three years. Such type of loan is granted for the
expansion of business or for the purchase of new equipment.
3) Long Term Finance --- the duration for this type of financing is more than
five years. Long term finance is given for the compilation of big projects for
example, for the construction of new buildings or for the purchase of
machineries.
Other types are:
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1) Running Finance
Various modes of bank financing, credit lines afforded to customers under the
above head (running finance) are most commonly used. Withdraws on the
current account are allowed in excess of the credit balance, which the customer
has maintained, thereby creating running finance.
In this type of financial accommodation the burrower is required to adjust the
finance provided by the bank with the stipulated expiry period.
2) Cash Finance
Finance is provided on markup basis on reducing balance system as stated

earlier. It is provided either against pledge or hypothecation of goods, produce or
merchandise.
3) Demand Finance
A fixed amount financing accommodation is allowed 10 borrowers for a fixed

period under the above classified, repayable either in periodic installments or in
lump sum at a fixed future date. This accommodation is extended in lump sum
for the mutually agreed period and the borrower has to pay the entire amount of
finance, together with markup the agreed rate.
4) Payment against documents
The importer has to enter into an agreement with the bank to meet his obligation
to purchase the import documents at marked up price in the non interest based
system. The documents as per mark up agreement would be purchased by the
bank and sold to the importer at marked up price when as import bill is received
and lodged two types of transactions shall be deemed to have taken place i.e.
purchase and sale of import documents.
5) Finance Against imported merchandise
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Financing against import is established through letters of credit on the basis on
markup for a short period. According to its facilities are available not exceeding
from sixty days.
6) Export finance
Export refinance facility is available to banks from State Bank of Pakistan under
the export refinance scheme at low rate of markup. The government’s policy is
low markup rate in order to boost the country’s exports.
Procedure for Granting Loan

Any customer who applies for loan should have an account (usually current
account) with Allied Bank Limited concerning branch. The respective members of
this department after carefully analyzing the credit worthiness of the customers
and business financial ratios send request of the loan to the head office of ABL
and if all the members are satisfied the head office approves the application of
loan and grants loan to the customer.
Non Fund Based Financing

The bank is also responsible for providing Non Fund Based Financing in which
the funds of the bank are not involved that includes letter of credit and letter of
guarantee. These are special services that a bank provides to its credit worthy
customers only on their behalf.
1) Letter of Guarantee (LG)/Guarantee
Definition
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‘A type of contract issued by a bank on behalf of a customer who has entered a
contract to purchase goods from a supplier and promises to meet any financial
obligations to the supplier in the event of default.’
Basically a Letter of Guarantee (LG) is a written undertaking issued by the
guarantor (the bank) at the request of the applicant (account holder of ABL) to
the beneficiary (the other party or supplier), guaranteeing the fulfillment of certain
economic obligations under the deal or the contract signed between the applicant
and the beneficiary.
Moreover there are two types of guarantees that ABL provides on behalf of the
customer i.e.
 Local Guarantee --- without permission of State Bank of Pakistan (SBP)
 Foreign Guarantee --- with permission of State Bank of Pakistan (SBP)
as foreign currency is involved
2) Letter of Credit (LC)
Definition
‘Letter of credit means an engagement of bank or other person made at the
request of the customer that the issuer will honor drafts or other demands of
payment upon compliance with the condition specified in the credit.’
Basically Letter of Credit (LC) is a financial document often used in international
transactions and issued by a bank guaranteeing that a buyer's payment to a
seller will be received on time and for the correct amount.
Normally, the letter of credit contains a brief description of the goods, documents
required, a shipping date, and an expiration date after which payment will no
longer be made. Also the bank (local bank) ensures that the supplier will not be
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paid until the bank receives a confirmation from the foreign bank that the goods
have been shipped.
Foreign Exchange Department
Foreign exchange business arises primarily from trading and trade related
transactions, although investment monies, dividends and royalty payments as
well as gifts, legacies, loans and interest payments, gives rise to very substantial
how of funds moving from one currency to another. For each international trading
transaction either the importer or the exporter and sometimes, both, will be
involved in a foreign exchange operation, unless one or both maintains a foreign
currency account.
WORK DONE BY ME
Activities during My Internship at ABL
With great pleasure, I would like to say that I have done my internship at Allied
Bank Limited, Sabzazar Scheme Branch, Lahore, (0941).The duration of my
internship was of six weeks starting from 17th July 2014 to 28th august 2014. I
have done work almost in all departments that are in Shadman Branch except in
Cash department because according to the ABL rules and policies, an internee is
not allowed to work in cash department but my observance was there like how
they work. I was also assigned with some responsibilities of the minor level. In
the beginning it was very difficult for me to interact and work with such formal
people in such a formal/professional environment but with the passage of time
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that I really leant to work with them and talk to them and now I think I will not find
any difficulty in at least understanding the environment of organizations and
offices when I will start my job in nearby future. Throughout the six weeks I learnt
about following:
WEEK ONE & TWO

In my first week at ABL I came across history and background of Allied Bank
Limited and the various products and services that the bank is offering to its
customers. During this first week I was assigned in the Accounts Opening
Department under supervision of Miss, Sana Zahra. She introduced me to
different accounts that are being offered by ABL. My supervisor explained me
about the types of accounts and the benefits provided to the account holders in
each account category.
In the second week, I was told about different documents which are required for
opening a new account and the particulars that are to be attached while opening
a new account by different people (salaried person, housewife, student, company
whether public or private, minor, etc.). Moreover I was also told about the
procedure for closing of accounts.
The requests for issuance of ATMs and cheque books are also entertained by
this department. Under the supervision I used to take signatures on the register
of the customers who came to collect their ATMs or cheque books as record and
write date of issuance. I also learnt there the Locker operating process.
Whenever a customer came for operating his locker my work was to maintain the
locker operating register.
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WEEK THREE
In the Third week, I learnt about receipts and payments of cash/cheques.
However an intern is not allowed to enter in the cash department but Miss Sana
told me about the working in the Cash Department. This department is
responsible for collection of utility bills. I also learnt about the entry of input into
the system.
WEEK FOUR
In the Fourth week, I was appointed in the Clearing Department under the
supervision of Mr. Mugheez Yousaf.
He taught me the following points:
 Types of Clearing
 Role of Clearing House (NIFT)
 Procedure for clearing
Under his supervision I also learnt the entry of input for clearing in the system. In
this department I have done filing daily. I have also done the work of the
maintaining inward, outward register daily. All manual work of passing the entries
I have done in this department.
WEEK FIVE
In the fifth week of my internship at ABL, I was appointed under supervision of
Customer Service Officer (CSO), Mr. Hassan Shah. He taught me the
following tasks:
 How to fill the deposit slips if anyone wants to transfer cash in his/her
account?
 How to fill the funds transfer form for online funds transfer?
 How to entertain the walk in customers and solve their queries?
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WEEK SIX
In the last week BSM (Branch Services Manager) told me about fund based and
non-based financing. Moreover both of these departments (credit department
and trade department) work in co-ordination when entertaining requests of the
credit worthy clients regarding credits.
During my internship, I undertook some assignments that helped me apply the
learnt techniques. I faced some problems during this course, but I got full
attention from the concerned persons and they always encouraged me for asking
any kind of question that rose during the course of my work during my six week.
FINANCIAL RATIO ANALYSIS AND

INTERPRETATION
Ratio Analysis
Ratio analysis is a widely used tool of financial analysis to interpret the financial
statements so that the strength and weaknesses of a firm as well as its historical
performance and current financial condition can be determined.
The financial ratios can be divided into five basic categories. These are:
 Liquidity
 Activity
 Debt
 Profitability &
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 Market Ratios
The following section analyzes the financial ratios of Allied Bank Limited for the
year 2013 and 2014 are.
 LIQUIDITY RATIO
The Liquidity Ratios are the ratios that measure the ability of a company to meet
its short term debt obligations. These ratios measure the ability of a company to
pay off its short-term liabilities when they fall due.
1) Current Ratio
The current ratio measures the extent to which the claims of short-term creditors
are covered by assets that can be quickly converted into cash. The formula for
current ratio is:
Current Ratio = Current Assets / Current Liabilities
RATIO 2014 2013
Current Assets Rs 42,128,469 Rs 45,775,366
Current Rs 70,928,273
Rs 37,831,000
Liabilities
Current Ratio 0.59 1.20
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Current Ratio
1.4
1.2
0.8
0.6
0.4
0.2
0
2014 2013
INTERPRETATION
Generally higher the current ratio the more liquid the firm is considered to be.
The ideal current ratio depends on the industry and particular circumstances. If it
is less than 1:1, this usually means that the firm is finding it hard to pay bills. A
current ratio of 2.0 is considered to be ideal, but the current ratio of ABL is below
2 from last two year 2013 & 2014. Due to increase in current liabilities the current
ratio in 2014 falls to 0.59 which was 1.2 in 2013. This fall show that liquidity of the
ABL is low.
2) Quick Ratio
Quick Ratio = Current Assets - Advances / Current Liabilities
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RATIO 2014 2013
Rs Rs
Quick Assets
35,235,755 37,730,392
Current Rs Rs
Liabilities 70,928,273 37,831,000
Quick Ratio 0.49 0.99
Quick Ratio
1.2
1
0.8
0.6
0.4
0.2
0
2014 2013
INTERPRETATION
The Quick ratio also known as Acid-Test Ratio is a modified current ratio that
takes into account the fact that advances may be a relatively difficult current
asset to convert into cash so, ABL seems to be less liquid (0.49) as compared to
last year 2013.
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3) Working Capital
The working capital shows how much of assets are available after deducting
liabilities. The formula for working capital is:
Working Capital = Current Assets – Current Liabilities
RATIO 2014 2013
Rs Rs
Current Assets 42,128,46 45,775,36
9 6
Rs Rs
Current Liabilities 70,928,27 37,831,00
3 0
Rs-
Rs
Working Capital 28,799,80
7,944,366
4
Working capital
50,000,000
0
-50,000,000 2014 2013
-100,000,000
-150,000,000
-200,000,000
-250,000,000
-300,000,000
-350,000,000
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INTERPRETATION
Basically the working capital shows that whether the company has sufficient
current assets to meet their day to day operations or not. The worst-case
scenario is bankruptcy. A declining working capital ratio over a longer time period
could also be a red flag that warrants further analysis. The working capital of ABL
has declined tremendously which is alarming for the bank’s position. In 2013 it
was in good position but in recent year working capital results negative figure due
to huge increase in liabilities.
4) Advances to total assets

The formula for Advances to total assets is:
Advances to total assets = Advances / Total assets
RATIO 2014 2013
Advances net of Rs Rs
provision 306,014,402 267,001,028
Rs Rs
Total assets
842,269,127 734,195,946
Advances to Total 36.3% 36.3%

Assets
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Advances to total assets

40
35
30
25
20
15
10
5
0
2014 2013
INTERPRETATION
This ratio expresses the relationship of advances to total assets. This ratio is
useful for banks and DFIs. In both last years 2013 and 2014, ABL advances to
total assets is approximately 36.3% which is good or the Bank in future.
 Activity Ratios
The activity ratios measures the speed with various accounts are converted into
sales or cash inflows or outflows. Some of these ratios calculated for Allied Bank
Limited are:
1) Total Asset Turnover

The total asset turnover indicates the efficiency with which the firm uses it assets
to generate sales. The formula is:
Total Asset Turnover = (Interest Earned / Total Assets) * 100
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2014 2013
RATIO
Rs Rs
Total income
earned 67,001,497 54,221,577
Rs Rs
Total Assets
842,269,127 734,761,815
Total Asset 7.9% 7.3%

Turnover
Total Asset Turnover

8
7.9
7.8
7.7
7.6
7.5
7.4
7.3
7.2
7.1
7
2014 2013
INTERPRETATION
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Generally higher the total asset turnover, the more efficiently the firm’s assets
have been used. The total asset turnover of ABL in 2014 (7.9%) indicating that
the assets have been used efficiently and effectively in 2014 as compared 2013.
In 2013 it was 7.3%
2) Fixed Asset Turnover

The fixed asset turnover is used to measure the bank’s ability to utilize its fixed
assets to generate sales. The formula for fixed asset turnover is:
Fixed Asset Turnover = (Interest Earned / Fixed Assets)
RATIO 2014 2013
Rs Rs
Interest Earned
39,312,602 30,708,491
Rs Rs
Fixed Assets
27,250,482 22,083,612
Fixed Asset 1.44

1.39
Turnover
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Fixed Asset Ratio

1.45
1.44
1.43
1.42
1.41
1.4
1.39
1.38
1.37
1.36
2014 2013
INTERPRETATION
A higher fixed-asset turnover ratio shows that the company has been more
effective in using the investment in fixed assets to generate revenues. This ratio
has risen for ABL which means efficiency in utilization of fixed assets for the year
2014.
3) Return on Total Assets
Return on Assets (ROA) is a financial ratio that shows the percentage of profit
that a company earns in relation to its overall resources (total assets). Return on
assets ratio gives an idea of how efficient management is at using its assets to
generate profits. The formula for ROA is:
Return on Total Assets = EBIT / Total Assets
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RATIO 2014 2013
Rs Rs
EBIT
39,312,602 30,708,491
Rs Rs
Total assets
842,269,127 734,761,815
Return on assets 4.6%

4.1%
ratio
Return on asset Ratio

4.7
4.6
4.5
4.4
4.3
4.2
4.1
4
3.9
3.8
2014 2013
INTERPRETATION
Return on assets ratio gives an idea of how efficient management is at using its
assets to generate profit. There is a increase in value of return on assets of ABL
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5
for the year 2014 indicating that the firm is utilizing its assets effectively and that
the management needs to be more alert and careful in future.
4) Return on Equity
The return on equity measures the return earned on the common shareholders'
investments in the firm. The formula is:
Return on Equity = Earnings Available to Common Shareholders / Common

Stock Equity
RATIO 2014 2013
Rs Rs
Net income
15,015,092 14,643,360
Rs Rs
Total equity
62,053,785 53,703,486
Return on Equity
Ratio 24.1% 27.2%
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5
27.5
27
26.5
26
25.5
25
24.5
24
23.5
23
22.5
2014 2013
INTERPRETATION
Return on equity is an important measure of the profitability of a company. Higher

values are generally favorable meaning that the company is efficient in
generating income on new investment. The decreasing ratio in 2014 shows the
decrease in the efficiency of management in utilizing its equity base and the good
return to its investors. In 2013 it was 27.2% and in 2014 it is 24.1%.
 Debt Ratios
The Debt Ratios measures the debt position of an organization. It shows the
amount of other peoples’ money being used to generate profits. The more debt a
firm has, the greater is risk of being unable to meet its contractual debt
payments. The following ratios are used to determine the debt position of a firm.
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1) Debt Ratio
The debt ratio measures the proportion of total assets finance by the firm's
creditors. The formula for debt ratio is:
Debt Ratio = Total Liabilities / Total Assets
RATIO 2014 2013
Rs Rs
Total Liabilities 761,378,80 667,997,92
2 3
Rs Rs
Total Assets 842,269,12 734,195,94
7 6
Debt Ratio 0.90 0.90
Debt Ratio
1
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
2014 2013
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INTERPRETATION
The banks with higher debt ratio are considered to be more risky because they
have more liabilities and less equity.
The debt ratio of ABL same in both years 2013 & 2014 2012; , there is a no
difference between the ratios of these two years. In the both years out of 100% of
assets 90% were financed by creditors. The percentage of 50%+ is considered
ideal and safe for most businesses and ABL does not falls in this range in both
the years. This indicates an increase in the degree of indebtedness of ABL.
2) Times Interest Earned Ratio

The times interest earned ratio measures the firm's ability to make contractual
interest payments. The formula for times interest earned ratio is:
Times Interest Earned Ratio = Earnings before Interest & Tax (EBIT) /
Interest
RATIO 2014 2013
Rs Rs
EBIT
39,312,602 30,708,491
Rs Rs
Interest Expenses
38,815,342 32,551,922
Time interest Earned 1.01

0.95
Ratio
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Time Interset Earned Ratio

1.02
1.01
1
0.99
0.98
0.97
0.96
0.95
0.94
0.93
0.92
2014 2013
INTERPRETATION
Higher value of times interest earned ratio is favorable meaning greater ability of
a business to repay its interest and debt. A ratio of 1.00 means that income
before interest and tax of the business is just enough to pay off its interest
expense. That is why times interest earned ratio is of special importance to
creditors. The times interest earned ratio of ABL has increased slightly in the year
2014(1.01) indicating a rise in the ability to repay interest and debt. It was 0.95 in
2013.
3) Debt Equity Ratio
Debt-to-equity ratio indicates the capital structure of a firm, that is, the proportion
in which a firm raises funds from debt and equity in order to finance its operations
and assets. The formula for calculating debt to equity ratio is:
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5
Debt to Equity Ratio = Total Debt/Total Equity
RATIO 2014 2013
Rs Rs
Total debt
761,378,802 667,997,923
Total shareholder Rs Rs
equity 62,053,785 53,703,486
Debt to Equity 12.2

12.4
Ratio
Debt To Equity Ratio

12.45
12.4
12.35
12.3
12.25
12.2
12.15
12.1
12.05
2014 2013
INTERPRETATION
Lower values of debt-to-equity ratio are favorable indicating less risk. Higher
debt-to-equity ratio is unfavorable because it means that the business rely more
on external lenders thus it is at higher risk, especially at higher interest rates.
The debt to equity ratio of ABL has fall down slightly in the year 2014 which is
good. The fall in debt-to-equity ratio in 2014 is a good sign which means ABL
relying less on external lenders as compared to results of 2013.
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 Profitability Ratios
Profitability ratios show a company's overall efficiency and performance. Some

of the profitability ratios calculated for Allied Bank Limited are:
1) Gross Profit Margin
Gross profit margin is one of the profitability ratios. It is the ratio of gross profit to
the net sales. The formula for gross profit margin is:
Gross Profit Margin = (Gross Profit / Total income earned) * 100
RATIO 2014 2013
Rs Rs
Gross Profit
28,186,155 21,669,655
Total income Rs Rs
earned 67,001,497 54,221,577
Gross Profit 42%

40.0%
Margin
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5
Gross Profit Margin

42.5
42
41.5
41
40.5
40
39.5
39
2014 2013
INTERPRETATION
The gross profit margin of ABL has increased indicating net sales are sufficient to
pay off the operating expenses including administration, financing and taxes etc.
The aim of management is to achieve gross profit margin as high as possible.
The higher the gross profit margin; the better it is for ABL in 2014.
2) Net Profit Margin
The net profit margin shows the amount of each sale rupee left over after all
expenses have been paid. The formula for net profit margin is:
Net Profit Margin = (Net Profit / Total income earned) * 100
RATIO 2014 2013
Rs Rs
Net Profit
15,015,092 14,643,360
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Total income Rs Rs
earned 67,001,497
54,221,577
Net Profit Margin 22.4% 27%
Net Profit Margin

30
25
20
15
10
0
2014 2013
INTERPRETATION
The net profit indicates how effective a bank is and how well it controls its costs.
The higher the ratio the more well it is for the bank. The net profit margin has
declined to 22.4% in the year 2014 indicating the bank is in a less satisfactory
position as compared to 2013.
3) Operating Profit Margin
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Operating profit margin is a profitability ratio showing operating income of a
business to its sales. Whereas, operating income results from ordinary business
operations and excludes other revenue or losses, extraordinary items, interest on
long term liabilities and income taxes. The formula is:
Operating Profit Margin = (Operating Income or EBIT / Interest Earned) *

100
RATIO 2014 2013
Operating Profit 39,312,602 30,708,491
Total income Rs Rs
earned 67,001,497
54,221,577
Operating Profit 58.6%

56.6%
Margin
Operating Profit Margin

59
58.5
58
57.5
57
56.5
56
55.5
2014 2013
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INTERPRETATION
An increase in operating margin ratio of ABL is seen in the year 2014 which
means that the profitability of the bank has improved relative to year 2013.
Market Ratios
1. Price Earnings Ratio
Formula:
Market Price per Share/ EPS
RATIO 2014 2013
Market Price per Rs 112.4

Rs 90.04
Share
EPS 13.11 Rs 12.79
8.58
Price Earnings 6.39
Ratio
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5
Price Earning Ratio

10
9
8
7
6
5
4
3
2
1
0
2014 2013
INTERPRETATION
Price Earnings Ratio shows that, greater the profits the more they would be
willing to pay. ABL has 8.58 Price Earnings Ratio which is satisfactory as
compared to the previous year 2013. There are, however, many other factors that
play a part in determining the market price per share, e.g. ABL performance
relative to other banks in the market.
2. Earning Yield
Formula:
EPS/Market Price per Share*100
RATIO 2014 2013
EPS Rs 13.11 Rs 12.79
Market Price per Rs 112.4

Rs 90.04
Share
11.66% 14.20%
Earning Yield
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5
Ratio
Earning yield
16
14
12
10
8
6
4
2
0
2014 2013
INTERPRETATION
Earning yield of ABL is slightly lower in 2014 as compared to 2013 which means
ABL is earning less good price in the market on each share as compared to it
was earning in 2013.
3. Dividend Payout Ratio
Formula:
Cash dividend/ EPS*100
RATIO 2014 2013
Cash dividend Rs 6.5 Rs 5.25
EPS 13.11 12.79
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5
49.5%
Dividend Payout 41 %
Ratio
Dividend payout Ratio

60
50
40
30
20
10
0
2014 2013
INTERPRETATION
Dividend payout ratio calculates the percentage of the earnings belonging to

the ordinary shareholder that are actually distributed to the ordinary shareholder.
ABL is efficient in dividend payout ratios in 2014 because they have captured the
market. In 2013 ABL Dividend payout ratio was less than as compared to 2014.
ABL is efficient in market ratios in 2014.
4. Dividend Yield
Formula:
Cash dividend/ MPS*100
RATIO 2014 2013
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Cash dividend 6.5 Rs 5.25
MPS 112.4 Rs 90.04
5.79% 5.83%
Dividend Yield
Dividend yield
5.84
5.83
5.82
5.81
5.8
5.79
5.78
5.77
2014 2013
INTERPRETATION
Dividend yield calculates the dividends as a percentage of each share invested.

ABL has higher ratio in 2013 but in 2014 it drops down slightly to 5.79%. A high
dividend yield may be as a result of either a relatively high payout or a share
price that is very low perhaps indicating market sentiment that Bank has a limited
future.
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SWOT ANALYSIS
An overall evaluation of the company’s strengths (S), weaknesses (W),
opportunities (O) and threats (T) is called SWOT analysis. Strengths and
Weaknesses are internal factors whereas Opportunities and Threats are external
factors.
Strengths Weaknesses
Opportunitie
s Threats
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STRENGTHS
The different strengths that Allied Bank Limited are:
 First Muslim Bank of the World
ABL is the first Muslim Bank of the world, which is owned and managed by its
ownemploys. This is the biggest strength of the Bank. A feeling of ownership is
present in every employ, which not only helps in increasing the productivity of
employs but also creates sincerity with the Bank in them.
 High Level of Motivation of Employees
The employees of Allied Bank Limited are highly motivated because they know
that what so ever they do, it will be for their own benefit. Also they are of the view
that the profit that they will earn will be distributed among them. Hence they work
with high motivation and concentration.
 Customers Treated as Assets of Bank
ABL regards its customers as the most venerable asset of the bank. Hence the
bank has formulated strict rules and regulations regarding customer’s complaints.
The bank offers a secure, warm and friendly environment to its customers.
 Wide Network throughout Pakistan
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Allied Bank Limited has one of the largest networks within the country with over
900 branches, connected to an online network. The bank is also installed
approximately 1000 ATM’s at various locations within the country.
WEAKNESSES
Some of the weaknesses of Allied Bank Limited are:
 Employees’ Attitude
It is observed that employees mostly have sluggish and hard attitude towards the
customers. There is a high part of favoritism, and mostly employees are hired on
the basis of nepotism and references. There is a lack of commitment and
professionalism on part of the employees. The staff usually tries to avoid do full
working and trying to do modest work (escape from additional work) and they
usually delay their work.
 Centralized Decision Making
Decision making powers are concentrated in few hands at upper level. This
approach has some negative effects as employees cannot make their own
decisions and are not allowed to take part in decision making process, hence
might be dissatisfied. Also through this approach promptness, quality and
efficiency of services is also affected.
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 Lack of Efficient and Effective Research Activities
There is lack of efficient and effective research development activities which is

very essential for collecting the essential data which is used for future planning
and strategy.
 Unfair Promotion System
Employees are dissatisfied with the poor procedures of promotion. Against the
prescribed procedures employees are promoted after a long period.
OPPORTUNITIES
Some of the opportunities that Allied Bank Limited can avail are:
 Consumer Banking
Consumer banking is making great revolution in the banking sector, however ABL
is still serving corporate sector and is missing a big share of consumer banking.
But if bank overcomes this limitation and improves itself in consumer banking it
can earn huge amount of profits and might emerge as the top bank in our
country.
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 Car Financing
Many people nowadays buy cars through car financing via banks but ABL is not
giving this facility to its customers. If it starts car financing scheme then it will
definitely attract many people and will be able to earn a lot of as well in this way.
 Diversification towards Islamic Banking Services
Allied Bank Limited like, Muslim Commercial Bank and United Bank Limited can
diversify its services by offering diversification in Islamic Banking to its privileged
customers in Pakistan. In this way the market standing of bank will surely
improve.
 Government Policies
The new policies by the government in order to uplift the economy and pursue
financial sector reforms are expected to yield positive results in the banking
industry of the country. Different steps are taken by the Government in order to
attract small borrowers. Therefore, ABL also has an opportunity to attract new
customers by giving them attractive schemes and offers so that they can start
their small businesses.
THREATS
Allied Bank Limited faces following threats:
 Increased Competition
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Allied Bank Limited faces major threat from its rivals i.e. Bank Al-Falah, Muslim
Commercial Bank, Habib Bank Limited. Also the low barriers to entry provide
opportunity to other foreign banks to come into action and increase the level of
competition. Moreover, the new private banks enter into the industry with highly
innovative technologies and huge investments hence the image of already
established banks is affected.
 Economic Instability
Pakistan is facing a very critical situation it is suffering from continuous downfall

of the economy since last few years. It is the biggest threat for all banks as if the
situation is not improved then the banks will fail to achieve their objectives. Tight
monetary policies and high rate of inflation has also added fuel to the pathetic
economic situation hence overall the banking sector is feeling the threat.
 Political Influence
The three board of directors of the bank are government officials hence the bank
always feel the pressure of being highly influenced by their decisions
CONCLUSION
My internship experience at ABL Sabzazar Scheme Branch (0941) has given
me a realistic preview of practical life. Now I feel that I am better prepared to
enter the world of professional work. I have come to know and been appreciated
by a number of professionals who are lending their services to the banking sector
for more than a decade. I feel honored that I have worked with such experienced
professionals.
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This internship report is a reflection of my experience when I was an internee in
Allied Bank Limited – Sabzazar Scheme Branch Lahore. I must admit that such
interaction in this respectable professional community will help me in seeking out
good job opportunities in the near future. Each task I performed was a different
experience in itself. By the end of it, I must say I realize my potentials, I have
realized that practical life is not so easy after all; it takes a lot of hard work and
devotion, and not to forget time. And I now know that if I want I can make things
possible, and I also know how good it feels to having accomplished something
and being appreciated for it. I definitely have learnt things, which will impact my
career and my character.
The overall experience of my internship was very good; I have learnt the sense of
responsibility in its literal meaning. I am now capable of dealing with different sort
of customers, and how to be patient while doing so. Besides this I also gained
knowledge about banking which I previously lacked and many more products
being offered by the bank. So in a nutshell, this internship gave me the
experience, which would no doubt boost my confidence to work in future.
PROBLEMS & RECOMMENDATIONS

Allied Bank Limited is the one of the largest and prominent bank of Pakistan. The
Bank is providing its customers with value, quality and distinctive level of services
and high ethical standards in all dealings with them. But there is always need for
improvement and need to identify any lacking if they are present.
Some of the problems identified along with the recommendations are:
 Availability of Staff
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The existing staff in The Sabzazar Scheme Branch (0941) is overburdened due
to the non-availability of more staff. Staff in the branch must be in proportion to
the customer as to expedite the workflow, avoid overloading of staff and remove
the customer’s grievances arising mainly due to delay in workflow.
Hence more technically trained staff should be added to the existing staff in order
to facilitate customers at the best level.
 Commitment of Employees
The decreasing commitment of employees due to lack of staff and over

burdensome can be increased by introducing an effective performance appraisal
system, which can reward and recognize the achievements and services of
employees for the Bank.
 Marketing Concept
The concept of marketing should be followed in every aspect of the organization.

Generally, the bank’s staff considers that marketing is to go to customers, beg
them for opening an account with the Bank and to abide by his every just and
unjust action. They should be taught that marketing is not only to go to customers
only. A customer can also be attracted by provided customer oriented services,
showing empathy to your customers and attending him personally.
 Customer Oriented Approach
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Deposits are the main source of funds for commercial banks. Therefore, the
priority of every bank is to increase the number and amount of deposits. The key
to successful business does not lie in simply attracting new customers. The real
success is to maintain in the ‘old customers and attract new customers at the
same time’ because retaining a customer is more difficult than attracting new
customers.
Also the attitude of the staff should be friendly to all the customers. The
customers should be taken to the concerned person or guided friendly if the
concerned person is not available. The attitude of that’s not my job should not
exist.
 Human Resource Development

There is a desperate need for Human Resource Development by hiring
professionals and competent persons and training the existing force. It will
contribute a lot more in progress of bank. All these three segments should be run
separately by the competent persons to enhance performance and quality of
work.
SKILLS ACQUIRED DURING INTERNSHIP REPORT
I learned many skills during the internship period which can help me how, can I will work
in the any company and the organization. Here are some of the skills that employers
consider as most important when recruiting and hiring employees and internship period.
Analytical
Employees need to be able to figure things out, so you will need to have some analytic
skills to succeed in the workplace. The skills you need and the level of skills required
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will vary depending on the job and the industry. In conjunction with being able to
analyze, employees are expected to be able to organize, plan and prioritize effectively.
Communication
The ability to communicate effectively, both verbally and in writing, is essential, no

matter what job you have or industry you work in. You will need to be able to
communicate effectively with employees, managers, and customers in-person, online, in
writing and/or on the phone.
Interpersonal
Interpersonal skills, also known as people skills, are the skills you use to interact and
engage with people. I just heard about someone who was hired because of his ability to
connect with people. That trumped the other skills the employer was seeking, so be
sure yours are up to par. Your interpersonal skills will be evaluated during your
internship period so it's important to prepare for the interview so you are as comfortable
and confident as possible when interviewing.
Leadership
When companies hire for leadership roles they seek employees who can successfully
interact with employees, colleagues, clients and others. Even if you're not applying for
management jobs, leadership is a valuable skill to bring to the employer.
Positive Attitude
Attitude might not be everything, but it’s extremely valuable. Employers want employees
who are positive, even in stressful and challenging circumstances. They want to hire
applicants with a “can do” attitude, who are flexible, dedicated and who are willing to
contribute extra, if necessary, to get the job done.
Teamwork
Regardless of the job, employers want to hire people who are team players who are
cooperative and work well with others. They don’t want employees who are difficult to
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work with. When you are interviewing be sure to share examples of how you worked
well on a team.
Technical
The technical skills you need will vary, of course, depending on the job. However, most
positions require at least some technical skills.
APPENDIX
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5
LETTER OF AUTHORIZATION
87
5
88
5
LATEST ANNUAL FINANCIAL STATEMENTS BALANCE
SHEET
89
5
INCOME STATEMENT/PROFIT & LOSS ACCOUNT
90
5
91
5
STATEMENT OF COMPREHENSIVE INCOME
92
5
CASH FLOW STATEMENT
93
5
STATEMENT OF CHANGES IN EQUITY
94
5
STATEMENT OF CHANGES IN EQUITY (CONT’D)
95
5
96

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INTERNSHIP REPORT ON 201

HAILEY COLLEGE OF COMMERCE

AREAS COVERED BY REPORT

viii. Credit Department

INTRODUCTION & HISTORICAL OVERVIEW

OUR BANKING SYSTEM TODAY

According the banking ordinance 1962 sec (6),

HISTORY & BACKGROUND OF ALLIED BANK LIMITED

DIFFERENT PHASES OF THE BANK

 The Pre Independence Period (1942-47)

 Australasia Bank In Private Sector (1947-74)

 Allied Bank: Public Sector Years (1974-91)

 Allied Bank (2005 To Date)

MISSION, VISION STATEMENT & OBJECTIVES

Allied Bank has following objectives:

ORGANIZATIONAL STRUCTURE OF ABL

BOARD OF DEPUTY GENERAL CLERICAL STAFF

CHIEF EXECUTIVE ASSISTANT GENERAL NON-CREICAL STAFF

Mohammad Naeem Mukhtar

Senior Vice President

Senior Executive Vice President

Executive Vice President

Regional General Manager

BOM Branch Operational Manager

BDM Branch Development Manager

BSO Branch Service Officer

CSO Customer Service Officer

 Sheikh Mukhtar Ahmad…Chairman

Human Resource & Remuneration Committee

Members of committee are:

Registered head office

ALLIED BANK PRODUCT AND SERVICES

Money Transfer Services

 Bank Drafts (DD)

Dealing in Foreign Exchange

 Foreign Currency Accounts

Government Receipts / Payments

Safe custody & sage deposit services

 Safe Custody And Safe Deposits of Securities & Valuables

Currency Chest Transaction

 Collection of Utility Bills

Accounts Opening Department

Opening of New Accounts

1) For Individual Account

 Account Opening Form

 By request from the customer

1) Heads of Income Account:

2) Heads of Expense Account:

There are four types of vouchers.

Account department maintain the PAK account’s transactions.

OBC stand for outward bill for collection.

 Deposits (Cash Inflows)

One Window Operation

Checking of Cheques before Payments:

The cheque may contain the signature of account holder.

Requirements for online transaction

Slip of online deposit

The function of deposit department is to collect deposits from customers.

2. Saving Bank Deposits

3. Profit and Loss sharing Deposits

6. Short Notice Term Deposits (S.N.T.D)

2) Pay Order (PO)