Internship Report

INTERNSHIP REPORT ON

Chowk Shaheedan Branch Multan.

Submitted to: Mr. Mohsin Ali Khan

Submitted by: Jhon Abbas ; Roll # 10557 MBA Marketing (morning) Session Jan 2009 to Dec 2010

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Internship Report

DEPARTMENT OF MANAGEMENT SCIENCE

National University of Modern Languages, (Multan Campus)

PREFACE:
Banking sector owes a pivotal importance in the economy of any country though it’s vibrant functions. This is the deep-seated motivator that geared up me to join any bank for internship.

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Internship Report

Moreover, the practice and familiarity learned during this tenure would also attest very helpful and alleviating in the awaiting proficient life. Making analysis of financial statements is an important part of our MBA program. It is a comprehensive, practical and extremely accessible presentation about Bank Alfalah Limited. I have tried my best to present this report with full description. Every effort is made to expose all the relevant concepts in this report. There is a balance of clarity. My objective in making analysis this report is to provide a fundamental knowledge about the company. I hope, it serves a stock of knowledge about the Bank Alfalah Limited. It is the requirement of the MBA course that all the students of MBA have to spend six weeks in any organization to get practical exposure and get familiarized with the ways to live in the organizational environment which is dramatically different from the educational enjoinment. That period is called ‘’Internship Period” If spends properly and sincerely, enables the students to be more confident, more knowledgeable, more responsible and more committed to its work in the practical field. I have also assigned to do internship of six weeks period in Bank Alfalah Limited it has enabled me to understand the practical scenario and sharpen our decision making power and utilizing the resources in an effective manner. So that our resources could generate maximum profit. In preparation of this report. I have putted all my best efforts and tried my level best to give maximum knowledge. Despite of my all coherent efforts. I do believe that there will be a room for improvements in the efforts of learner like me.

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Mr. I also acknowledge with thanks to Mr. By the grace of ALLAH Almighty I have accomplished this report. Sohaib. Salman and Mr. I am very grateful to my entire well-wisher for this support. Almaas who provided me every kind of help during internship and in preparing this report. Offer my thanks from the depth of my soul to the last messenger Hazrat Muhammad (PBUH). Mr. love & sincerity. I have also completed a report based on familiarity with my past studies in order to get a bit familiar with practical experiences in the organization. May ALLAH give them reward in kind of His bless and love! 4 . Mohsin Ali Khan who give me opportunity to do internship and make an internship report. Naqaash. who is forever a torch of guidance and knowledge of entire humanity. Mr. Syed Arif Raza Zaidi (Branch Manger) and his team especially to Mr. Mr. I am very thankful to Mr. Adnan. the creator who is the entire source of knowledge & wisdom endowed to mankind. Ishaq.Internship Report ACKNOWLEDGEMENTS: All praise & thanks go to Almighty ALLAH.

& DEAR FRIENDS 5 .Internship Report MY LOVING PARENTS. RESPECTED TEACHERS.

and Bahrain. did not inherent a strong banking industry and since then a number of events in the industry.Internship Report EXECUTIVE SUMMARY: Pakistan after getting independence. which increase of 15% from the past year was. venture capital companies. micro finance banks and Islamic banks. The increase in 6 .642. Afghanistan. The Abu Dhabi Group bought the majority shares of the bank and so got the right to control the bank's operations. Today Bank Alfalah Limited is operating in more then 95 cities of Pakistan and operating its foreign branches in Bangladesh. mainly because of consistent policies implemented by the government of Pakistan. foreign incorporated commercial banks. Bank Alfalah has implemented different policies to make it one of the best bank in Pakistan. The total employees of Bank Alfalah in 2009 were 7. development financial institutions. discount & guarantee houses. Since the privatization of the bank. Bank Alfalah Limited also introducing new products and services and increase its operations by opening new branches in Pakistan. Bank Alfalah Ltd was incorporated in 1997 and was later privatized by the government of Pakistan. like the nationalization of banks in the 1970. investment banks. including local incorporated commercial banks. housing finance companies. However today the banking industry of Pakistan has been growing over the past few years. Also the state bank of Pakistan monetary policy has been very friendly toward banking sector. There are number of different banks established in Pakistan.

by creating some edge in the industry. The financial statistic of Bank Alfalah are also as Impressive as their human resources. that all wants to become the leading bank of Pakistan. technology has played an important role in the industry as banks are continuously trying to improve its products and services by introducing innovative products.301 (000) and its total assets for 2008 amounted to Rs 348. It also promotes itself by sponsoring different events. Bank Alfalah Limited promotes its products and services through print and electronic media. Te stock prices and earning per share of the bank have also increased over the years but it is before the year 2009.41 that reduce in 2009 earning per share is 0.71.Internship Report the number of employees joining Bank Alfalah shows that people feel confident in Bank Alfalah as a prospect employer. Behavior of increase the number of customer every day. This figure shows improvement as compared to previous years but in 2009 the earning after tax reduces to Rs 897. pose close competition and are mainly large nationally incorporated banks and a few international banks.The earning per share in 2008 is 1. The profit after taxation for Bank Alfalah in 2008 amounted to Rs 1. it has to compete in an industry that has grown in 2009 in overall assets The major 5 competitors of Bank Alfalah. employees with customer also helps to 7 . To create this edge.035(000). For Bank Alfalah Limited.990.301.764 (000). The reduction in earning is due to the financial crises in all over the economy.

Internship Report TABLE OF CONTENTS Topics Introduction Industry History and Background History of Organization Information about the organization Vision & Mission statement Products and Services Organizational structure and Department Structure Board of Directors Board Audit committee 8 page # 9 9 11 12 12 13 16 16 17 18 .

Some authors opine that this word is derived from the words ‘Bancus’ or Banque’. It is therefore. the necessity of a controlling or regulating agency or institution was naturally felt. Banking in fact is primitive as human society. for no record is available to ascertain the validity of any of the opinions.Internship Report Departments Internship Experience Internship Experience Working Experience Duties and responsibilities Accomplishment Problems during Internship Strategies Marketing Strategy Competitive Strategy Financial analysis Balance sheet Profit &loss Account Horizontal & Vertical Analysis Ratio analysis SWOT analysis PEST Analysis Conclusion Recommendation Certificate References 19 38 38 39 39 40 40 41 41 43 44 44 45 46 48 55 58 61 62 63 64 Industry Introduction and Background: It has not so far been decided as to how the word ‘Bank’ originated. Other authorities hold the opinion that the word ‘Bank’ is derived from the German word ‘Back’. Perhaps it was the Babylonians who developed 9 . not possible to decide as to which of the opinion is correct. for ever since man came to realize the importance of money as a medium of exchange. which mean a bench. which means ‘joint stock fund’.

10 . are settled between India and Pakistan. of Pakistan decided to establish a full-fledge central bank. The banking structure in Pakistan comprises of the following types. There were 19 foreign banks with the status of small branch offices that were engaged solely in export of crop from Pakistan. IT is evident that the temples of Babylon were used as ‘Banks’ because of the prevalent respect and confidence in the clergy. At the time of independence. By the end of June 1948 the number of officers of Scheduled banks in Pakistan declined from 631 to 225. there were 631 offices of scheduled banks in Pakistan. the expert committee recommended that the Reserve Bank of India should continue to function in Pakistan until 30th September 1948. Commercial banks have been the most effective mobilizes of savings and have been providing short-term requirements of working capitals to trade. As a new country without resources it was very difficult for Pakistan to run its own banking system immediately.Internship Report banking system as early as 2000 BC. so that problems of time and demand liability. Thus a landmark was made in the history of banking when the state bank of Pakistan assumed full control of banking and currency in Pakistan. of which 487 were located in West Pakistan alone. The non-Muslims started transferring their funds and accounts to India. of Pakistan. Habib Bank of Pakistan and the Australian Bank. Therefore. coinage currencies. The Govt. while there were only two Pakistani institutions. Similarly the Reserve Bank of India was not in the favor of Govt. The customers of the bank are not satisfied with the uncertain condition of banking.  State Bank of Pakistan  Commercial Bank of Pakistan  Saving banks. commerce and industry.  Cooperative banks  Specialized credit institutions. Consequently the Governor-general of Pakistan Quaid-e-Azam inaugurated the State Bank of Pakistan on July 1. exchange etc. 1948.

1974. The numbers of branches have increased appreciably and there is now on branch of bank for every 3000 heads of population approximately. 1948. Besides this growth. 11 . 1973. The network of bank branches now covers a very large segment of national economy. there were 14 Pakistan commercial banks that functioned all over the country and in some foreign countries through a network of branches. There is done reasonable growth in deposits from the establishment of Pakistan.Internship Report Up to December 31. and were recognized and merged  National Bank of Pakistan  MCB Bank Limited  Habib Bank Limited  United Bank Limited  Allied Bank Limited The state bank of Pakistan is the Central bank of the country and was established on July 1. specialized credit and financial institutions have also developed over the years. into the following five banks: All these commercial banks were nationalized in January 1. The Government of Pakistan in the late 90’s introducing the need for the privatization of state owned banks and companies. The separation of East Pakistan and its repercussion in the form of economic depression has caused a lot of difficulties to the banking system in Pakistan.

1997.I.Internship Report Historical Overview of BAL Bank Alfalah has gone through different phases over the years. Credit Rating: PACRA. with the registered office at B. Its name had been changed in the following sequence. Entity Rating for long term and A1+ (A one plus) for the short term. The bank is listed on the Karachi and Lahore Stock Exchange with a ticker name of “BAFL”.The bank is engaged in commercial banking and related services as defined in the Banking companies ordinance. as the new identity of Habib Credit Exchange Bank (HCEB) after the privatization in 1997. The Bank has invested in revolutionary technology to have an extensive range of products and services. we have emerged as one of the foremost financial institution in the region endeavoring to meet the needs of tomorrow and today. Building. the management of the bank has implemented strategies and policies to carve a distinct position for the bank in the market place. Karachi. Chundrigar Road. Since its inception. 1997 as a public limited company under the Companies Ordinance 1984. respectively. a premier rating agency of the country. These ratings denote a very low expectation of credit risk. 12 . has rated the bank ‘AA’ (double A). The Bank is currently operating through above 301 branches in 95 cities. We perceive the requirements of our customers and match them with quality products and service solutions. I. strong capacity for timely payment of financial commitments in the long term and by highest capacity for timely repayment in the short term. 1962. Bank of Credit and Commerce International (BCCI)—1972 Habib Credit and Exchange Bank—1992 Bank Alfalah—1997 Bank Alfalah Limited was incorporated on June 21st.A. This facilitates commitment to a culture of innovation and seeks out synergies with client and service providers to ensure uninterrupted services to it customers. This facilitates our commitment culture of innovation and seeks out synergies with clients and service providers to ensure uninterrupted services to its customers. During the past five years. Its banking operations commenced from November 1st.

13 . excellence in customer service and our commitment to being a responsible corporate citizen. deliver quality services that contributes to brand strength. caring for you …. manage customer experience. Mission: "To develop & deliver the most innovative products.  To reinforce a corporate culture that fosters learning. transparency in customer dealings. For this the management has adopted the strategy of.Internship Report The ratings of first and second and third unsecured listed and subordinated TFC issues of PKR 650 million. PKR 1.1. establishes a competitive advantage and enhances profitability.. creativity and flexibility. product innovation.325 million have been maintained at AA(Double A minus). they believe in placing the client at the center of business and all of the products and service. thus providing value to the stakeholders of the bank".250 million and Rs.Our customer" The objective of Bank Alfalah is as follows:  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 countries of the world. Information about the organization: Vision: "To be the premier organization operating locally & internationality that provides the complete range of financial services to all segments under one roof". Values: The values of Bank Alfalah Limited are philosophy of honesty. Objectives To please their customers by fulfilling the financial needs as best as possible.

 To create maximum economic values for share holders through a constant relationship focuses on financial services.Internship Report  To invest further in banking innovations which include Islamic banking. Bank Al-Falah has a uniquely defined menu of financial products. Product and Services: With the mission to provide all-encompassing banking services to the customers. SME  Home loans and other areas of product development to provide higher levels of services and values to the clients. Currently it is one of the most comprehensive portfolios of personalized financial solutions that are custom-tailored to serve the requirements not only of conventional customers but also fulfill the needs of the corporate sector:  Money Gram  Agriculture loans  Swift  Car Financing  Rupee Travelers Cheque  Online Banking  Credit Cards  ATMs  Home Financing  Corporate and Structured Financing Money Gram 14 .

hotels business establishments and all over the country and abroad. The charges is deducted from the person who sends the money. by connecting on-line with the world wide interbank Financial Telecommunication Network (SWIFT). Balance Transfer Facility. It is the easy and safe way to send money to the relatives. This service is 15 . L/C opening etc. Agriculture loans The bank also offered agriculture loan this loan is used various purposes for the development of agriculture sector. Loan against Car.. Car Financing Car Financing is one of the major renowned products of Bank Al-Falah and can be utilized in terms of Financing of Used Vehicles. Refinancing Facility (only for Al-Falah Customers) and it is characterized in terms of:  Lowest Mark up  Lower Insurance  Quick Processing  Lower Down Payment Rupee Travelers Cheque Rupees Travelers Cheque are as good as cash and are accepted at the major shops. travel agents.Internship Report Money Gram provides the faster transfer of money from one country to other. It provide loan for cultivation of land and equipment for the development of this sector SWIFT The bank has also started replacing conventional telex messaging system for fund transfer.

10.Internship Report being offered to facilitate instant fund availability to travelers and business people who used to carry a large sum of money with them. It has been bifurcated in terms of “Home Buyer. balance inquiries. It is accepted at nearly 30 million merchants and 870. Financing Limit Tenure : : up to Rs. Quick Processing. Automated Teller Machine (ATMs) The bank offers 24 hours self service banking facilities to it customers on country wide basis through deployment of Automated Teller Machine.000 establishments in Pakistan. Multiple Repayment Options and Free Valuation. and funds transfer.000. Credit Cards Bank Al-Falah Visa Card is everywhere and globally accepted and welcomed at locations displaying the VISA logo. Home Improver. statement requests. Online Banking To provide enhanced and value added products to customer bank is constantly striving for additional facilities. account statements. meals and much more. Home Financing Major features of Bank Alfalah Home Financing are Lowest Mark-up. cash deposits. All ATMs are linked through a state-of-the-art Satellite Based Communication System which offers 24 hours real time service. and Home Balance Transfer Facility”. Bank provide fully automated on-line telephone banking facilities to its customers enabling them to carry out banking transactions like balance inquiries.000/up to 20Years 16 . entertainment. travel. product information and exchange rate. AlFalah VISA pays for shopping.000 ATMs in more than 150 countries around the globe and over 10. There are 3 major types of Al-Falah credit cards. Home Construct. This system allows the banking facilities such as cash with drawls.

Internship Report Equity Participation : 30% Borrower / 70% Bank Organizational Structure & Departments: 17 .

Board of Directors 18 . After group heads in the hierarchy. regions and areas. Co-chairman is providing supervision to group heads that are responsible for controlling the affairs of different groups. Bank’s management is divided into different groups. there are regional. hub and area managers who are managing and guiding the working of different branches of bank.Internship Report Chief Executive Officer Co-Chairman Central Management Committee Group Heads Regional Managers Area Managers Hub Managers Branch Managers It’s a general hierarchy of bank which is showing about the main authorities of Bank Alfalah Limited who are controlling its management in Pakistan.

Ikram Ul-Majeed Sehgal Mr.Internship Report The board of directors has the authority in guiding Bank affairs and in making general policies. Nadeem Iqbal Sheikh Mr. Abdull Khalil Al Mutawa Mr.Director Director Director Director Director Director & CEO Mansoori Mr. Sirajuddin Aziz 19 .E. Some directors are the personnel of the Bank Alfalah Limited follows H.Khalid Mana Saeed Al Otaiba Mr. Sheikh Hamdan Bin Mubarak Al Chairman Nahayan Mr. Abdullah Nasser Hawalileel Al.

Chandigar Road Karachi.I Ferguson & co Chartered accountant Chief Operating Officer Mr.Nadeem Iqbal Sheikh Mr.Internship Report Board Audit committee The board audit committee is guiding in the affairs and in checking the policies made by board of Directors. Khalid Mana Saeed Al ofaiba Mr.Director Auditor A. Hamid Ashraf Registered Office B. Some auditors are the personnel of Bank Alfalah Limited. Yasar Rashid Director Director Sectary Al. 20 .Building I. Shakeel Sadiq Company Sectary Mr.I. Abdullah Nasser Hawalileel Mansoori Mr. Mr.A.

Some of the major deposit accounts opened by Bank Alfalah are as follows: 21 . This department maintains all formalities of the accounts and account holders like it account name. account holder’s name. Different debit and credit voucher come from different department like clearing. Foreign exchange and advances posted against some of the major deposit accounts opened Accounts opening department is one of the departments that come under the retail/general banking facilities provided by Bank Alfalah. Remittances. code number and full address. Cash.Internship Report Departments of BAL:  Account opening Department  Accounts Department  Trade Finance Department  Agriculture Department  Clearing Department  Cash Department  Credit Administration Department  Human Resource Department Accounts opening Department Account opening department is one of the departments that come under the general banking facilities provided by Bank Alfalah Limited.

50% 22 .000. No zakat is deducted on the accounts balance. The profit paid to account holders is as follows: Profits paid on Royal Profit Account Amount From Rs.000 to 999. however can be jointly opened by individuals. There are no restrictions on the number of deposits and withdrawal made to and from the account and all account holders receive a Hilal debit card as well. however initial deposit must be Rs 1000.000. 5. Profits are paid at 2% on all account balances. Profit& Loss Saving Account Profit& Loss saving accounts can be opened with a minimum balance requirement of Rs. as profit is credited on a monthly basis.Internship Report Major Deposit Account Products: Current Account Current Accounts are non interest bearing accounts that have a minimum account opening requirement of Rs. Royal Profit Account Royal profit accounts are opened with a minimum balance requirement of Rs 50. 2. Basic Banking Account (BBA) Basic Banking Account was introduced by banks on an order by the State Bank of Pakistan and is current in nature. There is no minimum balance requirement for BBA.999 Profit pa. while there is no restriction on ATM withdrawals. The basic aim of this account is that the higher the balance the higher the return. 10.50.000 and profit is credited on a half yearly basis. Maximum two withdrawals and deposits are allowed by Cheque. Profit and loss saving account cannot be opened by a business corporation. Furthermore all current account holders receive a Hilal debit card and there are no restriction on the number of withdraws or deposits made to and from the account.

paid at maturity and gives an additional advantage of giving monthly school fee of the children’s if the breadwinner of the family dies. Profits are paid at 10% pa.000.999 Rs. after the expiry of original period.1. Mahana Amdan Account Mahana Amdan account is Term Deposit Receipt (TDR) for three years that can be opened with a minimum balance requirement of Rs 100.C  Photocopy of passport.000 and above 3.000. This TDR pays 7%.Internship Report From Rs. Bank Alfalah pays 7% pa interest on Kifayat Account.000. with a maximum of 3 years. while it is credited on quarterly basis. if computerized N.C not available  Introduction( Existing Account Holder of Bank Alfalah)  Account opening form duly signed and completed by all concerned parties 23 .000. Requirement of Account opening: Standard Requirements  Photocopy of computerized N. A person can purchase a unit for Rs 100.000 to 4. with a maximum limit of Rs 1 million.5.I. Alfalah Education Alfalah education is a one year TDR that can be purchased by people having school going children’s. Profit is calculated on a monthly basis.000.50% Negotiable Kifayat Account Kifayat account is another saving account product that can be opened with a minimum balance requirement of Rs 10. credited on a monthly basis.I.999. Other features of this account include free personal accident insurance and automatic renewal for another 3 years. with a maximum limit of Rs 15 million.

letter from the proprietor confirming proprietorship 2) Company Accounts 24 .N certificate of the individual  A letterhead along with a rubber stamp for proof of business or any other acceptable evidence for verifiable source  For sole proprietorship. Salaried individual 2.Internship Report  Vermicular form if signature are not in English  Any photo ID if computerized N. Self Employed Salaried Individuals  Employment certificate by the employer acknowledging the individual as employee along with his salary. designation and period of employment on the letter head and signed under rubber stamp of company  Attested copy of service card.T.I.C is not carrying a photo  Two passport size photographs with thumb impression for illiterate The requirements of these accounts are as follows  Individual account  Company account  Partnership account  Clubs / Association accounts  Trusts 1) Individual Accounts There are two types of individual accounts 1. or any other acceptable evidence of service Self Employed  Copy of N.

 An undertaking by all the authorized person on the behalf of the institution mentioning that any change will be informed to the bank immediately 5) Trusts  Attested copy of certificate of registration account authorized the person to operate the account and attested copy of computerized N.I.I.Internship Report  In this case the following documents are required  Copies of NIC of Directors of the company  Certificate of incorporation of business  Certificate of commencement of business(in case of Public Limited Company)  Article and Memorandum of Association  Latest copy of Form-29  List of Directors  Copy of Board Resolution 3) Partnership  Attested copy of partnership deed duly certified by notary public and signed by all parties of the firm  Attested copy of computerized N.C of all partners  Rubber stamp of all partners  Partnership mandate on the firm’s letterhead to operate the account  Attested copy of registration Certificate  Attested copy of N.T.C 25 .N certificate 4) Clubs / Associations / Societies  Certified copies of rules / By laws  Certified copies of certificate of Registration  Resolution of the Governing body / Executive committee for opening of of that authorized persons.

signature of customer and signature of introducer and attach a photocopy of national identity card. the signature on the Cheque is verified by comparing it with S. 3) Requisition slip A requisition slip for Cheque book is also given to the customer. The customer fills it and gives it to the account opener.I. Account Opening Procedure: The procedure of opening the account is as follows. 1) Introduction: The signature and account number of the account holder introducing the account to the new person is obtained on the account opening form. name.S Card). the customer fills the account opening form (AOF).Internship Report  Attested copies of Computerized N.C of all trustees  Certified copy of instrument of trust  Board Resolution resolving to open and operate the account  Certified copy of By. Account Opening Form: First of all. 2) Specimen Signature Card: The signature of the client is obtained on a specimen signature card (S. Filling of account opening form includes type of account. The card is obtained with two signatures from the customer.laws. Every time a Cheque is received for payment from the client. address. currency of account. 4) Know Your Customer Form 26 .S Card. He also signs an undertaking that he will follow the rules and regulations of the bank.

This process takes a day because the Cheque books comes from Karachi head office. The basic purpose of this form is to get some 5) Account Number: When all the formalities are completed. the account holder makes a request in the name of the bank for the issuance of a Cheque book. 8) Entry of Cheque Book: Before issuance of a Cheque book the bank stamp every leaf with the account number of the customer. 6) Depositing of amount in account: The client deposit cash in the account. 10) Letter of Thanks 27 .S Card and account opening form. BAL issues Cheque books of at least 25 leaves. Such a request is known as Requisition Slip. The minimum initial deposit is fixed for each account according to the nature of account. Then that account number is written on S. 7) Issuance of a Cheque Book: After opening an account with the bank. For example for PLS / saving account the minimum requirement is Rs.Internship Report Every account holder fills this form. For this purpose cash pay-in-slip is used. 9) Filing of AOF: Account opening forms are basic documents of the contract therefore these are filed in numerical order and kept for reference.000 only. When he used this book completely then he can apply for another. enter it in the Cheque book register and computer and issues the Cheque book to the customer after his signature on the register.5. an account number is allotted to the customer and all the information is entered into the computer and register. information about the customer.

One copy is send to the customer and the other copy is kept in the record along with other documents. whenever required by the customers. Amendments in Accounts: BAL provides the facility of amendments in accounts.  Vernacular Form 28 . then he fills this form and this form is send to credit department. These amendments can be made by filling certain application forms.Internship Report A letter of thanks is prepared. These forms are as follows:  Change of Address Form To change the address of the account holder  Change of signature form To change the signatures of the customer. Account holder gives an application along with necessary documents to the bank. When the credit department declares him free from any debt obligations then his account is closed. Then the amendments are made in the account of the depositor. One letter is for the customer and one for the introducer.  Liability / Inquiry Form This form is used if some person has acquired loan from the bank and he wants to close his current account.

If he is cleared from all the liabilities then further proceeds are taken.  Permission is granted by the authorized person (the manager).  He withdraws all his money from his account but in case of current account Rs.  Mandate to the third party to operate the account This form is used to enable any third party operate the account.  His signatures are verified.Internship Report This form is used when some person wants to sign in any language other than English. Closing of accounts The procedure of closing of account is as follows. Since all vouchers from different departments are forwarded to current department so this department tallies all such transactions with current department after maintaining the ledger of each department.  Hic specimen signature card is attached with the account opening form and marked closed.  Account is closed in the computer system. 150 is deducted as a charge of closing the account.  First of all the customer gives the request to close the account.  A liability form is send to the credit department if he has taken a loan from the bank. Following are different functions performed by this department:  Budgeting  Reports  Funds management  Activity checking 29 . Accounts Department Every transaction which takes place recorded in the computer so all transactions in different departments are forwarded to account department.

and revenues. The cost of generating these revenues is also estimated. After the modification and approval the budget for a specific branch is being set by the head office. Investment in securities.Internship Report  Reconciliation  Foreign exchange. Borrowing from other banks. This is one important task on the basis of which funds are allocated to various branches and also the targets are determined. whereas forecasting is based on past performance. Fiscal year of the bank starts from January to December. Other things which are undertaken into account while formulating the budget are:  Income. Advances. placement in interbank markets. The targets determined Deposits. Expenses. Then budget of each branch is submitted to head office for modifications and for approval. The main sources of the bank are the follows:  Deposits. Before the preparation of budget the bank reviews its sources and funds it has and the uses of those sources. Monthly budget meeting is held to analyze the monthly 30 . Every branch prepares its own budget for the fiscal year and then budgets of all the branches across the country are consolidated at the head office in Karachi. Accounting department starts preparing the budget from October for the next year. Capital. old Account Contracts  Maintenance of fixed assets and calculation of their depreciation  Test Keys Budgeting The main task performed by the accounting department is the preparation of the budget. etc. Budget is based on forecasting and their own inspiration for future. In this way a consolidated budget is also prepared. The revenue target is fixed keeping in view the past performance. etc The main uses of a bank are the follows:  Advances.

These are generated from the main frame and are used for proper analysis. Reports In Bank Alfalah many types of reports are being prepared. general ledger accounts and their balances. monthly.  Royal Profit Report: It includes the details of the deposit of royal profit account.  Sub 66 Report: It contains income. which are being prepared with the help of the above reports: 31 .  Income and Expenditure report: It includes all the details regarding to both the heads of income and expenditure in detail.  New Fcy report: This report includes the information regarding only the new foreign currency accounts. The old foreign currency accounts are those. These are daily. The following reports are generated daily from the main frame which are being used by the accounts department for the preparation of their own reports:  Statement of affairs: It includes information about assets.  Subsidiary Statement: This is a detailed report which includes all the information regarding the statement of affairs. which were at the time of nuclear explosions in Pakistan and were being freezed by the Nawaz Sharif government. Daily position of deposit and advances are also calculated in this report.Internship Report performance by all the branch mangers with head office. weekly. Now following are the reports. The actual performance is compared with the estimated and variance is calculated. liabilities and their balance. semiannual and annual reports. expenditure.  Currency wise report (ccy): It provides the details of all the deposits currency wise.

Two copies of this report are made daily. The report specifies every vouchering. The accounts department calculates the depreciation the assets by using straight line method. All the vouchers are checked that whether they are properly posted or is there any transaction left to be posted.  Monthly Budget Review Report: This report is made to review the performance of the month by calculating the variance. Statement of Affairs also prepared at the weekend for the whole week as well as at the end of a month. Activity Checking Activity checking is the process of the entire banking. which has taken place. positive actions are taken and reasons will also be mentioned in the report. Department prepares Asset purchase report and Asset sale report after every six months. A report known as activity report is prepared on daily basis.  Statement of affairs: This report includes assets and liabilities.5% 32 . Depreciation is the allocation of cost of the asset over the useful life. which has taken place. This checking makes the working of the bank more efficient and avoids any loopholes. Depreciation is accrued on monthly basis and charged at year-end. one is sent to the area office and one to the head office for analysis but the format is different for both of them.Internship Report  Daily position of advances and deposits: This report is being sent to the head office daily in which the detail is given regarding the new accounts of deposits and advances. Sorting is made according to the mainframe-generated report. Maintenance of Fixed Assets and Calculation of their Depreciation Account department maintains the record of fixed assets. And then if the variance is in negative. Depreciation is charged at the following rates: Building 2.

This test key is also different for inward and outward TT. Citibank N. When the TT is received at the other end. which contains codes. etc.Internship Report Furniture Carpets & curtains Equipment 10% 25% 20% Test Keys Test is a coding system used to authenticate money transactions between banks.Y. Whenever money is transferred through TT. When this arrangement is carried out a test key is provided to the concerned bank. The test is applied to the message. Banks have arrangement with other banks with which they have quite a large volume of business and it is beneficial to have a direct arrangement with these banks. the concerned officer requests the accounting department to apply test to the message. This test arrangement can be with banks within country and outside country. One goes to the test key department. three copies of this message are prepared. This test key is different for every bank. this test is verified. The transaction will be carried out if and only if the test matches with their own test.Y. 33 . American express N. For example BAL has test arrangements with ABN Amro N. one to the Telex/fax operator and the third one goes to the department record.Y.

the exporter involves his bank (the Advising Bank) in the transaction. When trade is taking place between the representatives of two countries (exporter and importer). as he wants to feel secure regarding timely payment of his goods in the required currency. This department provides protection to the rights of importer and exporter. land or air.” Requirement for the Importer These requirement / document must be fulfilled from importer before doing the import: NTN (National Tax Number) certificate 34 . Trade Finance Department handles two activities: Import  Export IMPORTS Import Department of BAL deals with the import of merchandise.Internship Report Trade Finance Department Trade Finance involves the import and export activities. The function of this department is to serve as a bridge between the importer and exporter in order to settle a transaction. Import can be defined as: “The bringing of commodities into Pakistan from outside by sea.

Internship Report  Sale Registration Certificate  Membership from Chamber Of Commerce  Questionnaire duly filled in  NIC (attested copy) EXPORTS Exports are major sources of earning foreign exchange and play an important role in the economic development of the country.  Form E ( export form) dully filled in  Sale Registration Certificate 35 . Requirement for the Exporter These requirement / document must be fulfilled from exporter before doing the export: Account holder of Bank Alfalah Limited  Must be a Pakistani  Membership from Chamber Of Commerce  NTN (National Tax Number) certificate  The person must have the Sales Tax Registration Certificate. “Exports mean selling goods to another country.” Exports of all eligible commodities through authorized banking channels are admissible under exchange control regulation. It helps to utilize excess resources of the country.

A copy of the L/C is sent along with the letter. On the E-form sent by the commercial bank following things are mentioned  Description of the commodity  Quantity of the commodity exported  Amount realized  Foreign bank charges  Country of the importer 36 . A bank that receives the L/C is called an advising bank because after receiving the L/C. Then importer’s bank will be called as issuing bank. his next job is to get an E-form from an authorized Bank. ISSUANCE OF E-FORMS Government has provided facility to exporter in taking E-Form from any bank and is a part of the exchange control mechanism of the State Bank of Pakistan. A cover letter is prepared and is sent to the beneficiary of the L/C. if the stipulated terms and conditions are complied with. The issuing bank sends the L/C to Bank Alfalah Limited. it performs the L/C advising function.Internship Report Methods of Doing International Trade  Letter of Credit  Contract LETTER OF CREDIT (L / C): LETTER Of Credit (L / C) ADVISING Letter of Credit (LC) is a written and conditional undertaking by a bank on the behalf of applicant to the beneficiary to pay a certain amount at a certain date. advising him his L/C has reached Bank Alfalah Limited and he should collect it immediately. When an exporter receives an L/C. The process of International Trade starts with asking of importer to its bank for L/C.

Internship Report

CERTIFICATION OF THE E-FORM After filling in the complete information about the goods to be exported, the exporter brings the E-form to the bank for verification. Bank issues E-form certification to exporter and he submits it to the custom officer along with E-form certification to certify E-form.

Documents After getting the E-form verified the exporter starts preparing his shipment. Banks only deal in documents. In order to receive payment from his goods the exporter has to send certain documents to the issuing bank via his negotiating bank. These documents are. Bill of exchange A bill of exchange is an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person or the bearer of the instrument. It is drawn by the exporter (drawer) and orders the importer or the importer’s bank (Drawee) to pay to the order of Bank Alfalah Limited (payee) a specific amount. If the draft is drawn at sight, the importer must make the payment on receipt of the documents. If it is time draft, the payment must be made within the specified time limit. Commercial Invoice The exporter prepares it. Its amount must tally with that of the L/C. It shows the name and address of the importer as well as the invoice number. This number is very significant as it is used in all the correspondence between the exporter and his bank. It also contains all the specifications of the commodity being exported. The standard definition of commercial invoice is that it is an itemized list of goods shipped to a buyer, stating quantities, prices, and shipping charges. Bill Of Lading The shipping company or the airline that has been assigned the task of transporting the goods issues these. The shipper must ensure that the goods are shipped and handed over the right person when documents are presented to him. The standard definition of a bill of lading is contract between the seller of the goods and the carrier. The following are types of bill of lading:

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Internship Report

 OCEAN Bill Of Lading  Air Waybill  Inland Bill Of Lading

Packing List / Weight List The exporter prepares these lists in order to show that the consignment is according to the order of the buyer. It gives a detailed account of the manner in which the goods have been packed and the number of cartons they have been packed in. Certificate of Origin This document certifies the origin of the exported goods. In the case of exports from Pakistan, the certificate of origin shows that the country of origin of the goods is Pakistan. The certificate of origin is a document in which the exporter certifies to the place of origin of the goods to be exported. E-Form It is a necessity for all exports out of Pakistan. All commercial banks always issue the Eform in quadruplicate.  Original: is sent to the custom officer  Duplicate: Bank receive the duplicate  Triplicate: is sent to the State Bank Of Pakistan

Export Visa This document is required when the destination of consignment is Canada, America, and U.K. Different countries fix quota for different commodities and restrict imports of those goods with in a specific limit. There fore visa is required which is in fact a permission to export goods to the specified countries.

Payment by importer

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Internship Report

Exporters bank sends all the documents negotiated in LC to importers bank. Once the shipment arrives in importing country, documents are kept with the bank until the importer makes full payment to bank.

COLLECTION / NEGOTIATION: When the exporter comes to the bank with the documents, he has two options.  Send them for collection  Get Them negotiated

Collection The bank sends the documents on behalf of the exporter to the importer’s bank for payment. The payment is made in Pak Rupees and the exchange rate is the Buying rate of the day normally called the T.T. Clean Buying Rate. When the reimbursing bank is to pay Bank Alfalah Limited it credits its nostro account maintained with it (the reimbursing bank), and afterwards bank debits the exporter’s account with the local equivalent of the export proceeds calculated at the TT clean buying rate.

Negotiation The bank purchases the documents from the exporter i.e. the exporter gets them discounted before their maturity. For example, the drafts are at 90 days from B/L date. In simple words, the payment for the exports would be received after three months. The exporter might not want to block his funds for such a long time. He can get his documents negotiated the day he presents them to the bank. The exchange rate he will get will however be lower than the TT clean buying rate because the bank is paying him an amount that it is going to receive after three months itself. Contracts are not negotiated however in any case. This is because they are unsafe documents and the bank does not take the risk.

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the contract is an unsafe document. it is titled FDBP that is the abbreviation of Foreign Documentary Bills Purchased. There are two types of contracts. In such a case. Therefore.e. Foreign Documents Sent For Collection. Usually they are:  Manually signed commercial invoice  Bills of lading  Packing list in quadruplicate  Bill of exchange Filing A separate file is maintained in each case and if the documents have been negotiated. 40 . there is no surety to the exporter that the importer will make the payment.Internship Report Dispatch The documents brought by the exporter are in the form of sets containing an original and a number of copies. The importer might reject the goods on receipt and deny and payment to the exporter. a file in the similar fashion is kept but it is labeled FDBC i. CONTRACT The exporter might export the goods based on a CONTRACT with the importer. The number of each document required by the importer is mentioned on the credit. If the documents have been sent for collection.

Credit Facilities At BAL there are two types of credit facilities 41 . Credit marketing department deals with extending loans (credit facility) to customers before sanction advice. Every bank has to follow these regulations. The Bank Alfalah limited credit is extended on the basis of these rules and regulations. State Bank of Pakistan (SBP) has prescribed regulations which are called “PRUDENTIAL REGULATIONS”. If any bank violates the regulations it should be liable for penalties. Another words we can define credit as “trust in one’s integrity in money matters and ones ability to meet payment when due”.Internship Report Credit Administration department (CAD) Credit means belief or trust. “The quality of being credible or trustworthy”. These regulations tells the term and conditions under which you can extend loans to the borrower and to what extent.

Internship Report  Funded facilities  Non funded facilities Funded facilities These are the facilities in which there is direct involvement of cash fund. This function of clearing its customers’ Cheque by a bank is performed for settling payments through the clearing houses in the State Bank of Pakistan. the clearing is than supervised by National Bank of Pakistan. which are as follows: Letter of Credit (LC) Letter of Guarantee (LG) Clearing Department Banks collect Cheque for their customers that are drawn on other banks. There are two types of unfunded credit line facility. Following are the funded facilities. BAL also provides a facility of clearing. Current finance “CF” Term finance “TF” Finance against foreign bills “FAFB” Finance against packing and credit “FAPC” Finance against imported merchandise “FIM” Finance against trust receipt “FATR” Non Funded facilities The facilities where there is no direct involvement of banks fund. Types of Clearing are follows  Inward Clearing 42 . In cities with no SBP coverage.

withdraw and online transaction processes.Internship Report  Outward Clearing Cash Department Cash department of Bank Alfalah works under the operations department. This department performs the main function. It is also responsible for the book keeping of these transactions and the safe custody of cash. This department is given the complete responsibility of cash.  Cash receipts  Cash payments 43 . as result of transaction in touch local and foreign currencies. Out of five counters of cash department one counter is fixing for senior citizens and females. All counters are dealing at the same time in deposits.

In this department I learned about customers behaviour. Security system is very strict. I learned how to fill current and saving deposit slips. I have learned all the transactions in different departments are forwarded to account department. and for why he is opening A/C. Stock of Cheque books are balanced at the end of each day and kept under safe custody. What types of account Bank Alfalah is offering to the customers. I reported to the manger of the branch who gave me brief introduction about the management and working of the branch. After verifies the signature the account will be close. what are the requirements of account opening what type of document are required. I also learned the procedure of issuance of Cheque book. Then he introduced me with employees. I learned about KYC ( knowing your customer). Naqaash in Account Department. Branch environment is very good. he also check my knowledge about banking by taking a short interview. Sohaib-us-Sabah. KYC (know your customers) forms. 1st I worked with Mr. How to update accounts on daily basis.150. 2nd I worked in account opening Department with Mr. how to fill account opening form. Total twenty employees are working with one manger.Internship Report Internship experience I did my internship at Bank Alfalah. 44 . 3rd I worked with account officer Mr. I have learnt the procedure that an account opening officer has to follow in order to open and maintain an account. Rameez & Mr. When the Cheque book is issued then the signature of customer is taken on the Cheque book issuance register. Salman. The Charges fee is Rs. chowk Shaheedan Multan branch for a total duration of six weeks and the departments that I have worked during that time are as follows:  Account Opening  Operations  Accounts  Credit First day. hidden cameras are there. If customer wants to close the account then he has to given written application to head of the Operation Department.

5% 10% 25% 20% Working Experience Impact on career My internship experience has given me a realistic preview of my field of education. Then it is checked with physical vouchers and if there is any problem. I have learned how to make the budget which depends on the forecasting of person. Account department maintains the record of fixed assets. I am now capable of dealing with different sort of customers. Quarterly. Daily. The overall experience of my internship was very good.Internship Report Since all vouchers from different departments are forwarded to current department so this department tallies all such transactions with current department after maintaining the ledger of each department. annually reports are made that describes the proper analysis of branch. Besides this I also gain knowledge about banking which I previously lacked and many more products being offered by the bank. I feel honored that I have worked such experienced professionals. and how to be patient while doing so. Semi annually. The accounts department calculates the depreciation the assets by using straight line method Depreciation is charged at the following rates: Building Furniture Carpets & curtains Equipment 2. All the debit and credit entries of the main office account are recorded in the statement. I learned the sense of responsibility in its literal meaning. I have come to know and have been appreciated by a number of professionals who are lending their services to the banking sector for more then a decade. Duties and Responsibilities 45 . BAL prepares its reconciliation statements. weekly. they reconcile it. Now I feel that I m better prepared to enter the world of professional work. which would boos my confidence to work in future. No doubt this internship gave me the experience.

 The other thing is dressing.  Equally deal all the type of people belonging to any type any gender. Usually the period of internship is short but we can learn a lot from this period.  Create a good and effective learning environment in the bank.  Maintain the secret information of customer accounts. religion etc. to go in time and to off in time.  I learnt from this short period of job is punctuality. Problems 46 . that I learn how to do the work in team and group of people.  To help the senior staff during working hours to reduce his work load.  Whenever a customer comes to open their account. professional dressing matters a lot. race.  I learnt how to implement my MBA knowledge on this job. I learnt what the practical implementation of the book knowledge is  It was first time in my life to work whole day in the company with full responsibility. First time in my life when I was doing some reasonable practical tasks. Accomplishment The main purpose of internship is to get a practical experience in the market and to get some practical knowledge. By seeing my senior and colleagues I start to copy them in dressing. As part of my duty I had to fill these forms and then use the appropriate bank stamps to complete these forms.  It was a big achievement for me.Internship Report My duties and responsibilities are as follows:  Maintain a good relationship with the bank senior staff. they have to fill a relationship with the bank. Working in team should be learnt.

In this scenario.  Operate different type of computer program especially in software. it advertises its product through: 47 . in the market place is the proper marketing and promotion of its products. These days everyone is facing pressure of competitors.  Lack of skill with dealing with different type of customers  Difficult to perform work in excel because major work is done on excel. Strategies: Marketing Strategy This is an age of competition.  Lack of Knowledge how to face problems encountered. In this world of growing competition. the key for a bank to succeed and attract its customers is adequate promotion of its products &services.Internship Report For any job skills and abilities are acquired to perform the job but in case to perform professional task then man should perfect and have a lot of skills to perform any type of task. the only way to survive and grow. 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. But during the internship I faced some problems  There is no proper way to give proper training to internee. BAFL for the promotion of its new and existing products invest heavily. Numerous organizations are providing financial services to the customer. for an organization.  Acquired the skill of communication & other professional skill. Same is the case with banking companies.

Another major way in which Bank Alfalah advertises its products electronically is through its website. newspaper Billboards Business magazines Website Sponsorship Electronic media The major way in which today’s organizations promote its products and services is through television. 48 . television Print media i. The messages of these advertisements are mainly of new financial services that the bank may introduce over time. Television ads for Bank Alfalah mainly try to emphasis the ‘The Caring Bank’. an advertisement showed how Bank Alfalah Credit Cards helped a couple when they had no cash left during a shopping trip or how a father happily shows his family a new car that he had financed from Bank Alfalah. by showing how its services can help you with the different financial problems that you face in your every day life. so that visitors can effectively know about the different services that the bank provides. Print media Print advertisements are another major way in which Bank Alfalah advertises its product to the masses. For example. not only because it’s economical but also because the visual and audio aids help in promoting its product.e.e.Internship Report • • • • • • Electronic media i. message in its advertisements. Print media advertisements are mainly printed in major English and Urdu newspapers across Pakistan. which is designed in an effective manner with detailed information.

Some of the tournaments that Bank Alfalah has sponsored over the year are as follows: Series Sponsored By Bank Alfalah Series Pakistan Vs England Pakistan Vs West Indies Pakistan VS South Africa Year 2005 2006 2007 Now days. The successful expansion program proved their 49 . BAFL is sponsoring the cricket rankings updates on Ten Sports. Bank Alfalah has been sponsoring different sporting tournament. But due to terrorism no series is held in Pakistan from previous three years. Competitive Strategy Despite notable economic uncertainties. the financial strength of Bank Alfalah Limited has greatly enhanced during the previous years. Now the BAL focuses on the domestic series sponsorship.Internship Report Sponsorships Bank Alfalah also gives a significant consideration not only to its product publicity but also to the creation of public relations. Bank has proves its public goodwill by contributing money and time to public service and activities. especially cricket which is the most popular sports activity of Pakistanis and is watched by millions whenever there is a tournament featuring the Pakistani cricket team and is thus a great way to advertise their products.

The Banking structure in Pakistan comprises of:  Central Bank  Commercial Banks  Investment Banks  Development finance Institutions (DFIs)  Specialized Banks  Foreign Banks  Bank Alfalah is a private commercial bank so the major competitors of Bank Alfalah are the following:  Muslim Commercial Bank  Union Bank Ltd  Soneri Bank Ltd  Prime Commercial bank  The bank of Punjab  Bolan Bank Ltd  Bank Al-Habib Ltd  ABL  Faysal Bank Ltd  Platinum Bank Ltd 50 .Internship Report capability and commitment in comparison with the competition in the financial sector.

Internship Report Financial Analysis: Balance Sheet 51 .

Internship Report Profit and Loss Account: 52 .

Internship Report Horizontal and Vertical Analysis: 53 .

563 3.420 380.492.587.653.367 13.194 380.990.043 3.75 2 7.687.766.76 4 3.144 20.133.160 22.921 324.452.056 3.291.851 366.02 5 7.216 17.380 14.05 5 3.363.070.759.222 300.012 22.169 11.280 208.335 21.447.491.571.85 8 2.006.570.166.16 9 9.044.869.973.63 5 13.436.773.467 2.159.76 4 2009 35.649.690.995.739 348.000 3.732.238 192.500 75.042.946.728 2.947.05 5 Horizontal 2008 2009 100% 100% 100% 100% 100% 100% 100% 107% 105% 451% 131% 98% 148% 105% Vertical 2008 2009 9% 6% 1% 22% 55% 3% 4% 9% 6% 4% 26% 49% 4% 4% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 109% 109% 151% 108% 294% 89% 86% 111% 169% 113% 78% 97% 130% 109% 100% 1% 4% 86% 1% 3% 0% 95% 2% 1% 1% 1% 5% 100% 100% 1% 5% 85% 2% 3% 0% 97% 4% 1% 1% 1% 6% 100% 54 .435 99.722.786 179.031 13.293 348.181 10.990.315.969 2.690.639 14.056.Internship Report BALANCE SHEET ASSETS Cash and balances with treasury banks Balances with other banks Lending to financial institutions Investments Advances Other assets Operating fixed assets Deferred tax asset TOTAL ASSETS LIABILITIES & EQUITY Bills payable Borrowings from financial institutions Deposits and other accounts Subordinated loans Liabilities against assets finance lease Other liabilities Deferred tax liabilities TOTAL LIABILITIES REPRESENTED BY Share capital Reserves Inappropriate profit Surplus on revaluation of assets Total EQUITY Total Liabilities and Equity 2008 32.957 188.581.671.070.43 8 14.465 331.936.

790 28.613 10. Commission and brokerage income Dividend income Income from dealing in Foreign currency Gain on sale of securities Unrealized (loss) /gain Investments Other income Total Non mark-up/ Interest income 2008 10.928.818 300.301 -179.004 248.016.217 1.062 28.849 1.017.694.628 4.822.732 688.913.582 122.730.546 317.527 6.472.54 2 1.720 1.Internship Report INCOME STATEMENT Mark-up/return/interest income Provision against loan and advances Provision for diminution in value of investment Bad Debts written off directly Net Mark-Up / intreset income after provision NON MARK-UP /INTEREST INCOME Fee.071.85 0 1.835.247.016.066.28 3 2.50 7 -1.019.261 -181.116.924 2.182.845 424.571 1.001.758 9.035.794.164 59.253 12.907.805.298 3.543.051 -85.605 Vertical 2008 2009 Horizontal 2008 2009 100% 100% 100% 104% 19% 14% 0% 34% 66% 34% 3% 0% 37% 63% 100% 181% 100% 21% 100% 0% 100% 115% 100% 99% 2.720 1.479.130 1.309.316 1.13 2 3.454 11.85 8 20% 3% 9% 4% -2% 12% 46% 112% 18% 2% 9% 6% 0% 12% 48% 100% 100% 100% 100% 100% 100% 100% 90% 82% 111% 162% -2% 105% 107% 110% 100% 102% NON MARK-UP/ INTEREST EXPENSES Administrative expenses Other Provisions/Write Offs Other charges Total non mark-up/ Interest expenses Extraordinary / Unusual items Profit Before Tax (PBT) Taxation -Current -Prior years 9.926 2009 10.674 94% 0% 1% 95% 17% 17% 17% -1% 100% 100% 111% 0% 100% -5% 1% 100% 65% 101% 100% 110% 9% 100% 57% 9% 10% -2% 100% 57% 100% 62% 100% 210% 55 .527 5.923.943 914.419 79.316 1.794.817 4.751.997 1.924 11.957.357 6.

other companies. the market price of the shares is used in certain financial ratios. Ratios are calculated from current year numbers and are then compared to previous years.  These help in investment decision in case of investor and lending decision in case of Bankers etc 56 . there are many standard ratios used to try to evaluate the overall financial condition of a corporation or other organization.035 -11% 5% 12% -7% 1% 8% 100% 100% 100% 67% 24% 69% Ratio Analysis Ratio Analysis is a most common tool used by individuals to conduct a quantitative analysis of information in a company’s financial statements. Financial ratios may be used by managers within a firm. If shares in a company are traded in a financial market. A financial ratio is a relative magnitude of two selected numerical values taken from an enterprise's financial statements. Security analysts use financial ratios to compare the strengths and weaknesses in various companies.301. the industry. Often used in accounting.301 -767. by current and potential shareholders (owners) of a firm. or even the economy to judge the performance of the company. The ratios highlight the factors associated with successful and unsuccessful firms.346 119. Ratios are important and helpful in the reference that:  These simplify the comprehension of financial statement and tell the whole story of changes in the financial conditions of the business. also reveal strong and weak firms. and by a firm's creditors.281 897.  These provide data for inter-firm comparison.151.019 493.419 1.Internship Report -Deferred Profit After Tax (PAT) -1. Ratio analysis is an important and age-old technique of financial analysis.

CURRENT RATIO Formula and Calculation: Rs.Internship Report 1.(000) Current assets Current Liabilities 2009 57778651 24420065 2.17 57 .37 2008 54268378 17142253 3.

Cash balance is increasing in 2009 as compare to 2008. 2. Formula: Cash Ratio = Cash Equivalent / Current Liabilities b.Internship Report Graphical Representation: Interpretation Financial position of BAL is strong in 2008 as compare to 2009. This ratio tells us about short term solvency of the organization Current ratio is showing better trend in 2008. Answers: 58 . CASH RATIO a.

335 17142253 1.Internship Report Rs. Graphical Representation: d. DEBT RATIO 59 .(000) Cash Equivalent Current Liabilities 2009 35.687. Interpretation: Cash ratio describes the declining condition for the bank. It shows the financial condition of the bank.43% 2008 32.056.012 24420065 1. If the cash ratio increases it is better for the bank.9% c. 3.

Answers: Rs.(000) Total Liabilities Total Assets 2009 366936635 389070055 0.95% c.Internship Report a. Graphical Representation: 60 . Formula Debt Ratio = Total Liabilities / Total Assets b.94% 2008 331946025 348990764 0.

Interpretation: Debt Ratio describes the firm’s debt position as well as its liabilities.065 = 33.358. 4.125 c. Formula: Working Capital = Current assets – current liabilities b. The ratio is decrease slightly but it is not good for bank overall. Answers: 2009 = 57778651 - 24. Graphical Representation: 61 . If the ratio is high then it is negative sign for bank. WORKING CAPITAL a.420.586 2008 = 54268378 - 17142253 = 37.Internship Report d. it also describe the level of financial risk.126.

(000) N.A.P.P.T X 100 Share holder equity 2009 897035 X 100 19442692 4. Formula: Return on Equity = (N. RETURN ON EQUITY a.6% 2008 1301301X100 1359727 9.A. Answers: Rs.Internship Report d.6% 62 .T / Share holders equity) X 100 b. 5. Interpretation: Calculation shows that the working capital has been decreased in 2009 as compare to the previous fiscal year 2008.

6. Interpretation: Return on equity describes the shareholder earned on their investment in any firm. Graphical Representation: d. NET PROFIT MARGIN a.Internship Report c. Return on equity in 2009 reaches in lowest position as compared to previous year. Formula: 63 . it also describe the profitability of the company.

A. Graphical Representation: 64 .28% 2008 1301301x100 31046583 0.T X 100 Sales 2009 897035 x 100 35554930 0.A.Internship Report Net Profit margin = N.P. Answers: Rs.P.T x 100 / Sales b.(000) N.43% c.

opportunities and threats.  BAL is providing the facility of Money Gram to its entire people who are its customer or not and through this service it has got the leadership in Money Gram because any other bank is not offering this service. SWOT analysis is a careful evaluation of an organization’s internal strengths and weaknesses as well as its environmental opportunities and threats. Interpretation: Profit margin tells how much profit a company makes.Internship Report d.  Main source of profit for any financial institution is public saving which only comes from public confidence and BAL is getting this confidence which is one of the main strengths of bank  Bank Alfalah is also getting fame in the market due to its name “ALFALAH” which is leaving the Islamic and favorable impact on the minds of public. weaknesses. this ratio shows the decline in profit margin in 2009 as compared to fiscal year 2008. In SWOT analysis the best strategies accomplish an organization’s mission by exploiting an organization’s opportunities and strengths while neutralizing its threats and avoiding its weakness. SWOT Analysis: SWOT stands for strengths. 65 .  Bank has AA (Double A) and A1+ (A one plus) Credit Rating for long term and short term loans respectively. During my internship I also observe these factors of bank and made a conclusion which is as follows Strengths  Being the private organization its main aim is not to earn profit but also to satisfy its customers and slogan of BAL is also the representative of this purpose as Bank Alfalah “The Caring Bank”.

Opportunities 66 .  Personnel of Alfalah are well trained and highly skilled.  BAL’s lending procedure is quite complicated that some people hesitate to come as they are requiring a huge file of documents. It is the point where they feel difficulty while competing with the other banks.  Majority of the workforce consists of young professional.  It was observed that at present the motivation level of the employees is not very much. Weaknesses Beside all these strengths I also noted some weaknesses in the operations of bank Alfalah which are described below:  Bank Alfalah is charging online charges for transfer of money but some other banks not charge online transfer charges. they lack in their experience.  No job rotation for employees.Internship Report  With in very short period it has got a superb accomplishment which shows the competency of top management.. And sometimes lack of experience becomes a hurdle while serving to the customers.  Bank Alfalah is not offering any credit facility for students.

Standard Charted etc also having strong banking policies and there’s a chance that people might move toward these financial institutions to secure their investments. mainly because of low incentives as compared to the other banks. Threats Threats are the negative trends in external environmental factors. Bank Alfalah also has to face this situation. in order to cope up with both conditions. BAL has the advantage of having Islamic Banking network and the growth in this particular field can be very fruitful for the bank.  In addition to excellent routine banking. bank has an opportunity to introduce new products and services in Islamic banking.  The conventional banks those having high growth rate and high market share are always being a threat  There is an average not low turnover rate. As on one side environment provides opportunities to one organization.  Bank Alfalah is spreading its network outside the boundaries of Pakistan and it has more opportunities to extend this network as State Bank of Pakistan has prescribed new policies in the prudential regulations.  There is a very good growth trend in the Islamic banking in the country and in the world as well.Internship Report It is mandatory to try to make progress with consistency as well as to adopt changes with needs of time. mainly because of excessive amount of documentation  Other foreign financial institutions like City Bank.  Large business parties have fewer attractions in being a client of BAL-IBD. transactions and related services. it has earned a good name by offering special products like car. some threats. on the other hand it also has to face 67 . home and credit cards facility. So the penetration of these products could enhance market shares.

Internship Report PEST Analysis A broad view of market is important when management is interested in introducing better services for customers. see the shifting requirements of the buyers. Rapid technological change. Identification of external and macro factors that influence buyers and thus change the size and composition of market overtime involves initially building customer profiles. global competition and the diversity of buyers preferences in many markets require the constant attention of the market vouchers to identify promises business opportunities. evaluate changes in competitors positioning and guide the choice of which buyers to target and classify them according to respective segments. These influences include:  Political environment  Economic Indicators 68 .

balance of payment. the Lal Masjid debacle. militancy in FATA and NWFP and its impact on other parts of the country. This not the end of the story after this Pakistan’ economy face lot of problems like bomb attacks in 69 . Economic Indicators The economy of any country directly influences any financial organization. Due the wrong policies of the government. soaring inflation hitting a 24% mark. the talibanization also develop in Pakistan and become the international issue in Pakistan and badly affected the Pakistan repute in the world and promote the uncertain conditions for the business in the Pakistan. The steep rise in oil prices to U$ 147 a barrel. Economic indicators include Gross Domestic Product (GDP). Due to this the investors are not interested in the Pakistan.Internship Report  Socio cultural environment  Technological factors Political Environment The events in the last couple of years. huge fiscal deficits and balance of payments issues coupled with plummeting forex reserves added to the economy’s move to an unstable growth trajectory. including the lawyers’ movement. ever since the sacking of Chief Justice Iftikhar Choudhary. The present state of the government in Pakistan is directly affecting the policies of banks. the strong fundamentals were compromised to prevailing global crises that’s shacked the confidence of global investors and FDI flowing in the country. debt of the government. However. violence in Karachi. the return of Benazir Bhutto and her subsequent assassination. Pakistan’s economy has witnessed the most challenging period after posting six consecutive years of healthy economic growth. and current ongoing military operation in Swat– all the above events indubitably made a huge impact on the economy. Organizations need time to adjust to one regime and then work with it towards economic enhancement. Pakistan has faced crisis after crisis. inflation. Stability and law and order situation under the political regime is very important for the economy as a whole. Continuous political changes have disrupted the policies and objectives as each regime brings with it its own agenda. Also the load shading is another factor that affects the Pakistan economy badly.

visa. MasterCard. 70 . provide response times. turnaround time compliance by centralizing outward remittances. smart cards. the bank also achieved remarkable progress in business process re-engineering. it is now that these products and services are gaining faster acceptance in Pakistan. However. Also culture is dedicated by the religion. and. Socio cultural environment A low saving culture has offset the huge population advantage this is enjoyed by Pakistan. internet banking and now mobile banking are common IT investment in the developed world.Internship Report Pakistan no electricity and the unstable government. BAFL is always willing to introduce new computer systems for keeping its staff up to date. In BAFL technology has great effect on the working environment. in today world. Thus. ATM and POS (point of sale) networks. telebanking. which differentiate their products. enhance accessibility and improve customer satisfaction. With the successful implementation of new centralized database system. Though investing in state-of-the-art host banking solution. the lifestyle and expectations of the customers from the service provider is increasing day by day. About 70% of Pakistan’s population is based on rural areas and literacy rate of the country is very much low. thus making it harder for banks to mobilize their deposits within these regions. the customers are becoming more intelligent and through media they keep themselves up to date. due to this the investor are not invest in the Pakistan and the existing business men are loosing their business unit due to the loss. and in Pakistan a significant segment of the population is reluctant to accept interest for their deposits due to the negative religious implications of such an act. Technological Factors Banks in the developed world have been turning to heavy IT investments. account opening and credit administration.

71 .Internship Report Conclusion and Recommendations Conclusion At present there is no such organization in the world that is free from problem and challenges. Every concern has to strive and struggle a lot to be more profitable and to get more competitive edge.

The services that Bank Alfalah provides have a great market penetration not only because of their features but also the profit and markup rates that they charge. It is continuing to make efforts to refine its products and operations to make them more compatible. The bank has seen phenomenal growth in the past few years by opening more branches in the country. and since its establishment it has aimed to become the leading bank of Pakistan by that provides outstanding services to its customers. while also increasing the assets and profits of the bank. increasing the deposit base. The management of BAFL is taking strategic steps to enable the bank to emerge as a strong and progressive institution. BAL continues to develop the new products like it has been doing in past. Recommendations 72 . New deposit schemes have been introduced and an action plan to maintain revenue growth in future. As the business and economic conditions remain uncertain.Internship Report It has been eighteen years since the establishment of Bank Alfalah.

some people are over burdened with the work. it should also starting providing the service of other money transfer lines like Western Union.  There are no incentive schemes for employees of Bank Alfalah like scholarship schemes for employees that want to pursue higher education. So I suggest that there should be fair distribution of work in all the departments.  Bank Alfalah although gives a number of incentives to its employees. there is misdistribution of work. after the have finished their studies.  Bank Alfalah Ltd should continuous to expand its business.  In Bank Alfalah.  Bank Alfalah Limited needs to use more marketing channels such as radio to make the public aware of its products and services.  BAL should provide loan to students at low mark up rate and easy terms & conditions.  Bank should prefer to promote worker on the basis of their talent and avoid going for personal like and dislikes. It can be harmful for the organization in the long run. like personal loans at nominal markup but they are only provided to employees that are in higher ranks.  Education fees are also returned by Bank Alfalah to its employees. I would like to give some recommendations to count over some problems.Internship Report After doing internship of six weeks in Bank Alfalah Limited. by increasing its deposit portfolio through aggressive market penetration strategies. 73 . In the presence of intense competition Bank Alfalah Limited has to realize the importance of marketing.  Bank Alfalah is only dealing in Money Gram.

Internship Report Internship Certificate: 74 .

Bank Alfalah Limited. Levi Bank Alfalah Limited. Alfalah Karobar Finance [Brochure].bankalfalah. (2009). (2009). Alfalah Milkiat Finance [Brochure].com) Wikipedia (www. Bank Alfalah Limited. 75 .Internship Report References: Web Resources Bank Alfalah (www.wikipedia.com) State Bank of Pakistan (www. (2009).pk) Reports & Papers Annual Report Bank Alfalah 2009 Issues in Pakistan’s Economy by S.org. (2009). Bank Alfalah Limited. Alfalah Mahana Amdan Plus [Brochure].sbp. Akbar Zaidi International Finance by Maurice D. Alfalah Quick Finance [Brochure].

Internship Report 76 .

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