CHAPTER 01

BANKS AND SCOPE OF BANKING

1.1MEANING OF BANKING
The Banking companies’ Ordinance, 1962 defines Banking as “Banking means accepting
for the purpose of lending or investment, of deposits of money from public, repayable on
demand or otherwise and withdrawal by checks, drafts, order, etc.
A bank is an institution for the custody, loan or exchange of money for sanctioning
credit, for transferring funds by domestic and foreign bills of exchange. It is a way
through which currency moves in to and out of circulation.
So it is clear from the definition of banking, the main activity or function of banking is
borrowing and lending of money with a margin of gain. However, as far as the present
day banking is concerned, there are a number of different banks, set up under specific
different objectives, performing various functions.

1.2 IMPORTANCE OF BANKING

For centuries we have known that even the most primitive economy needs a medium of
exchange. In a largely rural economy, with only a small manufacturing sector, the
demands for financial intermediation via banks and others for financing mechanisms are
modest. But as economies grow and diversify, their agricultural and manufacturing
sectors expand, and their services sectors develop and grow, their banking sectors need to
keep up. Decisions as to which activities to finance and which not are crucial for rapid
growth. Growing economic complexity is, of course, an inevitable consequence of
growth. It means that the benefits of efficient credit allocation rise—that efficient credit
allocation is financing investments where the payoff is highest. But it also means that the
challenges for those assessing alternative loan applicants mount. They must develop
means of allocating credit among competing needs. They must learn to assess business
plans and identify and manage risk.
The industrial revolution of the eighteenth and nineteenth centuries, and the rapid rise in
economic and financial complexity seen in Western Europe and the United States, was a
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valuable learning experience. Successive banking crises in the 19 th and 20th century
served to underline the need for a well-functioning financial sector. Financial crises
interrupt growth, or at least result in growth rates below potential. And governments and
banks learned the importance of financial stability, and sound risk management. As
Western economies developed, so, too, have their financial systems.

1.3 Challenges Faced In Modern Age

Banks play a vital role in the economic development of a country. They accumulate the
idle savings of the people and make them available for investment. They also create new
demand deposits in the process of granting loans and purchasing investment securities.
They facilitate trade both inside and outside the country by accepting and discounting of
bills of exchange. Banks also increase the mobility of capital. They provide a variety of
facilities for remitting a large amount of money from one place to another by the transfer
of a small slip of a paper.
In a country like Pakistan, which is still in the initial stages of economic development, a
well-organized banking system is the need of the day. There is acute shortage of capital
in Pakistan. The banks have to play an important role in promoting capital formation, in
controlling speculation in maintaining a balance between requirements and availability
and in directing physical resources in to desired channels. In advanced countries of the
world like America, Japan, Germany, the rate of capital formation ranges from 12% to
25% of their Gross Allied product. Where as in Pakistan the rate of saving has varied
from 5% to 8% only. In order to accelerate the rate of economic development the
Government has been acquiring foreign capital. The banks by launching a vigorous
campaign in both the villages and cities can mobilize the idle savings and can increase
the rate of investment. The country thus becomes independent of foreign capital, which in
fact has let us down on almost all the crucial happenings in the country.
This deficiency of capital accumulation is due to so many reasons like, lower per capita
income, disparity of wealth, un-organized banking system, ineffective fiscal measures
etc. One reason of this capital deficiency is the non-adoption of modern marketing tools,
such as market research, sales organization, sales training, sales management, advertising

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etc. for attracting deposits. Therefore, these are the new challenges for banks, which are
to be achieved for the betterment of the economy.

1.4 History of Allied Bank Limited

1.4.1 Historical Overview
Allied Bank was the first Muslim bank to have been established in Pakistan. Established
in December 1942 as the Australasia Bank in Lahore with a paid-up share capital of Rs.
0.12 million under the Chairmanship of Khawaja Bashir Bux, the Bank attracted deposits
equivalent to Rs. 0.431 million in its first eighteen months of business. At the time, the
Bank’s total assets amounted to Rs. 0.572 million. Today, Allied Bank's paid up Capital
& Reserves amount to Rs. 10.5 billion, deposits exceed Rs. 143 billion and total assets
equal Rs. 170 billion. The Bank’s journey has been about dedication, commitment,
professionalism and adapting to environmental changes, leading to its immense growth
and stability.
1.4.2 The Pre Independence History (1942 to 1947)
In the early 1940s, the Muslim community was beginning to realize the need for its active
participation in the fields of trade and industry. Since the late 1880s, Hindus had
established a commanding presence in the areas of industry, trade and commerce and
were especially dominating in the Sub-continent area. Banking, in particular, was the
exclusive forte of Hindus and it was popularly and wrongly believed that Muslims were
temperamentally unsuited for this profession.
 It was particularly upsetting for Khawaja Bashir Bux to hear that “Muslims could not be
successful bankers”. He decided to step-up to that challenge and take the lead in
establishing this first Muslim bank by the name Australasia Bank Limited in Punjab,
which was to become Pakistan in December 1942. The initial equity of the Bank
amounted to Rs 0.12 million, which was raised to Rs. 0.5 million by the end of the first
year of operation, and by the end of 30th June 1947 capital increased to Rs. 0.673 million
and deposits raised to Rs 7.728 million.

 
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1.4.3 Allied Bank (1991 to 2004)
As a result of privatization in September 1991, Allied Bank entered a new phase, and
became the world’s first bank to be owned and managed by its employees. In 1993 the
“First Allied Bank Modaraba” (FABM) was floated. After privatization, Allied Bank
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 branches in Pakistan and offers various technology-based
products and services to its diverse clientele through its network of more than 700
branches.
1.4.4 (2005 To 2012)
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.

1.5 Decentralization of Allied Bank Limited

This bank has decentralized Allied in 1992. Its deposits as on June 1992 are Rs. 25
billion, capital Rs. 5 billion, profit before tax Rs. 100 million. It has 748 branches. This
bank has been sold to its 7500 workers, under the recently introduced Employees Stock
Ownership Programmed (ESOP).

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1.6 Allied Bank Limited Today
Allied Bank Limited was the first bank to be established in Pakistan. It started out in
Lahore by the name Australasia Bank before independence in 1942; was renamed Allied
Bank of Pakistan Limited in 1974 and then Allied Bank Limited in 2005.In August 2004,
because of capital reconstruction, the Bank’s ownership was transferred to a consortium
comprising Ibrahim Leasing Limited and Ibrahim Group. 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.
Allied Bank Limited operates by the following Vision, Mission & Values:
1.6.1 Vision
To become a dynamic and efficient bank providing integrated solutions and the first
choice of bank for all customers.
1.6.2 Mission
 To provide value-added services to our customers
 To provide high-tech innovative solutions to meet customer requirements
 To create sustainable value through growth, efficiency and diversity for all
stakeholders
 To provide a challenging work environment, and reward dedicated team
members
 To play a proactive role in contributing towards the society
1.6.3 Values
 Integrity
 Excellence in Service
 High Performance
 Innovation and Growth

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1.7 Board of Directors
Pervaiz Iqbal Butt Mohammad Waseem Mukhtar
(Director) (Director)
Farrakh Qayyum Sheikh Mukhtar Ahmed
(Director) (Director)
Abdul Aziz Khan Tasneem M. Noorani
(Director) (Director)
Sheikh Jalees Ahmed Nazrat Bashir
(Director) (Director)
Mohammad Aftab Manzoor Mubashir A. Akhtar
(CEO) (Director)
Mohammad Naeem Mukhtar
(Chairman)
1.8 Management
Asim Tufail Fareed Vardag
(Group Chief, Consumer & Personal Banking) (Chief Risk Officer)
Iqbal Zaidi Mohammad Abbas Sheikh
(Group Chief, Compliance) (Group Chief, Special Assets Management)
Mohammad Aftab Manzoor Muhammad Jawaid Iqbal
(Chief Executive Officer) (Group Chief, Corporate & Investment Banking)
Muhammad Yaseen Mujahid Ali
(Group Chief, Treasury) (Group Chief, Information Technology)
Shafique Ahmed Uqaili Syed Shahid Raza

Source: www.abl.com.pk

6
 CHAPTER 02
OPERATIONS OF THE ORGANIZATION

The Commercial & Retail Banking Group (CRBG) offers a variety of asset and liability-
based retail products to its customers. The Group’s main focus has been on introducing
various financing and investment products for its valuable clientele, and contributing to
the steady growth of the financial industry. CRBG consists of 4 geographic groups and is
further divided across 27 regions in Pakistan. Each region is responsible for providing a
quality service to its own customer-base. In recent years, the Group has been working to
find alternate ways to bank for customers, and has installed more ATMs to its already
strong and largest ATM network.
During 2009, CRBG also saw a phenomenal growth of 28 percent in liabilities. The
Group launched effective campaigns and showed 13 percent growth in Current Accounts
& Saving Accounts (CASA). Besides an addition of senior level resources to the team,
more Management Trainee Officers were also hired into the Group to bring in more
quality and skill. CRBG is consistent in lifting the Bank’s brand image by emphasizing
on good customer services and developing commercial assets and a cost effective deposit
base.
2.1 Deposit Account 2.6 Unclaimed Deposits
2.2 Agriculture Finance 2.8 Credit Cards
2.3 Small And Medium Enterprises 2.9 Profit Rates 
2.4 Internet Banking 2.10 Other Services
2.5 Online Banking 2.11 Investment Banking
2.6 Corporate Leasing  

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2.1 Deposit Account 
 PLS Account
 Current Account
 Allied Basic Banking Account
 Foreign Currency Deposit
 Allied Advance Profit Scheme
 Behtar Munfafa Term Deposit
 Allied Munafa Account
 Mahana Amadani Package
 Allied Bachat Scheme
 Allied e-Savers Accounts
 Allied Business Account

2.2 Agriculture Finance

The Bank, under the Agricultural Financing Scheme, as decided by the State Bank Of
Pakistan, extends short, medium and long term, farm and non-farm credits. The farm
credits are extended for production (inputs) and development purposes. Non-farm credits
are allowed for livestock (goats, sheep, cattle), poultry and factories including social
forestry and fisheries (inland and marine, excluding deep sea fishing). Details are as
follows:
2.2.1 Production Loan
 Inputs like seeds, fertilizers, pesticides, weedicides, herbicides, labor charges,
water charges, vegetables, floriculture, etc.
 Working capital finance to meet various farming expenses.
2.2.2 Development Loan
 Improvement of agricultural land, orchards, etc.
 Construction of Godowns
 Tractors, Machinery & other equipments
 Tube wells

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  Farm Tran
2.2.3 Other Agriculture Loan Schemes
 Agriculture Revolving Credit Scheme
 Development Loans/Finances (Term Loans)

2.3 Small And Medium Enterprises (SME)

The Commercial and Retail Banking Group (CRBG) caters to the needs of commercial
entities and small and medium enterprises. A dedicated team of Relationship Managers
first identifies the specific needs of each customer segment, then designs and delivers a
facility package, which is in conjunction with those needs, and provides customers the
full support and opportunity to take advantage of the various business prospects available
in the market.
Following are the main credit facilities we offer
 Refinance Facility/Credit Facility: These are short-term credit facilities
(maturity of up to one year) lent to customers to meet their day-to-day
business/working capital requirements and finance their inventories, receivables,
etc. Generally, in addition to collateral security, these facilities also entail security
in the form of hypothecation of stocks and receivable/pledge of stocks.
 Export Refinance Facility: This is mainly the same as RF/CF, but as per the
Terms and Conditions set by SBP, is meant exclusively for exporters.
 Foreign Bill Purchase/Bill Discounting Facility: This loan/facility is provided
to exporters against their export under letter of credit and a contract to facilitate
their cash flow, while they are waiting receipt of their payments.
 Demand Finance Facility: This is a medium/long term credit facility available to
establish new projects for BMR and capacity expansion with a repayment term of
more than one year, which can be paid back in installments. This facility meets
clients’ long term needs such as, financing factory constructions or machinery
expenses.

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  Letter of Guarantee (LG): On behalf of the customers, the Bank issues a
guarantee in favor of the beneficiary, against the performance of a particular
job/contract, within a particular time.

 Import Export: Allied Bank provides highly efficient trade finance services for
import/export businesses through a large number of authorized branches where
trained and motivated staff is available to handle the business on the customer’s
behalf.

2.4 Internet Banking

 Banking is now at your fingertips! Allied Direct Internet Banking offers you the
convenience to manage and control your banking and finances - when you want, where
you want! It's Simple, Convenient, Secure and Faster. So, just get clicking!
Some of the advantages of Allied Direct Internet Banking are:
2.4.1 Simple and Convenient
Easier navigation and help provided at every step so you can make full use of this
service. With Allied Direct convenience is just a click away.
2.4.2 Secure and Faster
Encrypted with latest tools and technologies, Allied Direct is the choice for secure and
fast Internet Banking.
2.5 Online Banking
Allied Online Banking is a unique service being offering from Allied Bank. Through this
service, your account in Allied Bank is available to you from any of our branches
countrywide. No matter where you are in the country and whichever branch your account
is maintained at, you can have your cheque cashed at any of our 757 online branches
located in 250 cities. You can also use the service, from any branch, to deposit cash for
instant credit into your account or any other account in Allied Bank. Similarly, the
account-to-account Funds Transfer facility is also available for instant remittance.
Your cheque drawn from a remote branch for credit into a beneficiary’s account or
encashment of a specified amount can also be presented by a third person at any branch.

10
What’s more, making a Balance Inquiry and getting an Account Statement are additional
services available to Account holders from remote branches. Allied Online provides a
secure, efficient and convenient facility for making payments to beneficiary accounts
from any of our branches countrywide. Corporate customers requiring fund collection or
a disbursement facility can use it for cash management services

2.6 Corporate Leasing

Allied Bank started lease operations when it integrated with Ibrahim Leasing Limited.
Facilities include leases for machinery, commercial vehicles and equipments. The Bank
provides lease facilities to corporate and commercial clients in all industrial enterprises
for balancing, modernization, replacement and expansion schemes. Leasing is a popular
mode of financing because of its distinctive features like tax shield, preserve working
capital, easy documentation and less processing time.

2.7 Unclaimed Deposits

All unclaimed deposits are surrendered to the State Bank of Pakistan. The customers’
may access relevant information from the following addresses:
2.7.1 Unclaimed Deposits/Instruments
In accordance with the Banking Companies Ordinance, 1962, Section 31, the Bank is
liable to surrender to Stat Bank Pakistan (SBP), all unclaimed deposits and instruments
which have not been operated/collected by the account holders/beneficiaries for last 10
years.
All such customers/beneficiaries are requested to contact the concerned branch to re-
activate their accounts/collect the instruments, failing which, the bank will be compelled
to classify the same "UNCLAIMED" and surrender to SBP.
State bank revised instruction on unclaimed deposits (Public Notice As per Section 31 of
Banking Companies Ordinance 1962)
A debt in Pakistan Rupee is owing by a banking company by reason of a deposit, not
being a deposit in the name of a minor or a government or a court of law, at a branch of
the banking company in Pakistan in respect of which no transaction has taken place and
no statement of account has been requested or acknowledged by the creditor during the
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last ten years period are considered as unclaimed deposits. These include demand deposit,
time deposit, pay order, demand draft, etc.
As per instructions of the State Bank of Pakistan, all un-claimed deposits are surrendered
to the SBP. The customers’ may access this information at the following addresses:
 Allied Bank website (http://www.abl.com.pk), respective branches of the Bank
and Finance Group, Central Office, Karachi.
 Website of State Bank of Pakistan (http://www.sbp.org.pk)
 Field Offices of SBP Banking Services Corporation in Karachi, Lahore,
Peshawar, Quetta, Islamabad, Rawalpindi, Faisalabad, Multan, Sialkot,
Bahawalpur, Gujranwala, Hyderabad, Sukkur, D.I.Khan and Muzaffarabad.
All the claimants can apply for refund in the bank branch where deposit/instrument
account was opened/payable. In cases where such branches have been closed /shifted, the
nearest branch of the same bank should be contacted. It may please be noted that after
completion of one-year from the date of making the list public, all unclaimed
deposits/instruments will cease to be claimable and will be transferred to the government.

2.8 Credit Cards

No Annual or Joining Fee is applicable on the Card for the first year. After that, a fee of
Rs. 1000 per year is charged for a local card and Rs. 1,500 per year for an inter Allied
card. Supplementary cards are free for life.
2.8.1 ATM CARD
Allied Cash+ Shop Visa Debit Card offers you the privilege of using over 2,000 ATMs
across Pakistan - including our largest ATM network nationwide. Your Card will also
allow you to experience Cash-free shopping at thousands of merchant locations.

2.9   Profit Rates

Profit Rates On Foreign Currency Deposits
The applicable profit rates on Foreign Currency Deposits with effect from July 01, 2006
are as follows:

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 APPLICABLE
SAVING BANK ACCOUNT
RATES
US DOLLAR
 Up to $100,000 0.50%
 Above $100,000 & Up to $1,000,000 0.75%
 Above $1,000,000 1.25%
GBP STERLING
 Up to £100,000 1.00%
 Above £100,000 & Up to £1,000,000 2.00%
 Above £1,000,000 2.75%
EURO
 Up to 100,000 0.80%
 Above 100,000 & Up to 1,000,000 0.80%
 Above 1,000,000 0.80%
 TERM DEPOSITS:
US DOLLAR
 1 Month 0.60%
 3 Months 0.75%
 6 Months 1.50%
GBP (POUND STERLING)
 1 Month 1.15%
 3 Months 2.00%
 6 Months 3.00%
EURO
 1 Month 0.80%
 3 Months 0.80%
 6 Months 0.80%
(Source:ww.abl.com.pk)

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(Branches, particularly those authorized to deal in Foreign Exchange/Maintain Foreign
Currency Accounts, are advised to make a careful note of the above instructions for their
meticulous compliance.) The above rates of profit will remain unchanged till further
notice.
 Projected Rates of Profit On PLS Deposits
Following are the projected rates on all categories of PLS Deposits applicable from
January 01, 2009 and will be reviewed as and when required;
  
PROFIT PER
PLS SAVINGS DEPOSITS
ANNUM
 Up to Rs. 100,000 0.10%
 Rs. 100,000 & above 1.00%
PPA OPERATIONAL ACCOUNTS
 Less than Rs. 100,000 0.10%
 Rs. 100,000 to less than Rs. 1,000,000 2.00%
 Rs. 1,000,000 to less than Rs. 10,000,000 3.00%
 Rs. 10,000,000 to less than Rs. 50,000,000 5.00%
 Rs. 50,000,000 to less than Rs. 100,000,000 6.00%
 Rs. 100,000,000 to less than Rs. 250,000,000 7.50%
 Rs. 250,000,000 to less than Rs. 500,000,000 8.00%
 Rs. 500,000,000 & above 8.50%
PPA TERM DEPOSIT ACCOUNTS
 Rs. 50,000,000 to less than Rs. 500 000,000 1.25%
 Rs. 500,000,000 & above 1.50%
 Rs. 50,000,000 to less than Rs. 500,000,000 2.00%
 Rs. 500,000,000 & above 2.50%
ALLIED PROFIT PLUS DEPOSIT ACCOUNT
 Rs. 500,000 to less than Rs. 1,000,000 5.00%
 Rs. 1,000,000 to less than Rs. 5,000,000 6.00%
 Rs. 5,000,000 to less than Rs. 10,000,000 6.50%

14
 Rs. 10,000,000 to less than Rs. 25,000,000 7.50%
 Rs. 25,000,000 and up to Rs. 50,000,000 8.00%
PPA OPERATIONAL ACCOUNTS
 Less than Rs 100,000 0.10%
 Rs.100,000 to less than Rs. 1,000,000 2.00%
 Rs. 1,000,000 to less than Rs. 10,000,000 3.00%
 Rs. 10,000,000 to less than Rs. 50,000,000 5.00%
 Rs. 50,000,000 to less than Rs. 100,000,000 6.00%
 Rs. 100,000,000 to less than 7.50%
 Rs. 250,000,000 8.00%
 Rs. 250,000,000 to less than Rs. 500,000,000 8.50%
 Rs. 500,000,000 & above  
 ALLIED PROFIT PLUS TERM DEPOSIT ACCOUNT
1 Month
 Rs. 500,000 to less than Rs. 5,000,000 6.50%
 Rs. 5,000,000 to less than Rs. 10,000,000 6.75%
 Rs. 10,000,000 to less than Rs.15,000,000 7.00%
 Rs. 15,000,000 to less than Rs. 20,000,000 7.50%
 Rs. 20,000,000 & above 8.00%
3 Month
 Rs. 500,000 to less than Rs. 5,000,000 7.00%
 Rs. 5,000,000 to less than Rs. 10,000,000 7.25%
 Rs. 10,000,000 to less than Rs. 15,000,000 7.50%
 Rs. 15,000,000 to less than Rs. 20,000,000 8.00%
 Rs. 20,000,000 & above 8.50%
6 Month
 Rs. 500,000 to less than Rs. 5,000,000 7.50%
 Rs. 5,000,000 to less than Rs. 10,000,000 7.75%
 Rs. 10,000,000 to less than Rs.15,000,000 8.00%
 Rs. 15,000,000 to less than Rs. 20,000,000 8.50%

15
 Rs. 20,000,000 & above 9.00%
12 Month
 Rs. 500,000 to less than Rs. 5,000,000 8.00%
 Rs. 5,000,000 to less than Rs. 10,000,000 8.25%
 Rs. 10,000,000 to less than Rs. 15,000,000 8.50%
 Rs. 15,000,000 to less than Rs. 20,000,000 9.00%
 Rs. 20,000,000 & above 9.50%
 PLS SPECIAL NOTICE DEPOSITS
7 to 29 days
 Less than Rs. 10,000,000 0.50%
 Rs. 10,000,000 & above 3.00%
30 days & above
 Less than Rs. 10,000,000 1.00%
 Rs. 10,000,000 & above 4.00%
ALLIED MONTHLY INCOME SCHEME
 ALLIED MONTHLY INCOME SCHEME 10.20%
ALLIED BACHAT SCHEME
 ALLIED BACHAT SCHEME Upto 13.33% *
 *For Calculation, refer to Circular No.P/INST-2006/214 dated
28.11.2006.
(Source:www.abl.com.pk)

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2.10 Other Services
Other services includes following services
2.10.1 Utility Bill
Customers can pay their utility bills (e.g. electricity, gas, telephone) at any of the Bank’s
branches. For further convenience, bills are collected on all working days during normal
banking hours and also at certain times during the evening. Bills can be paid with cash or
cheque, plus customers can even drop-crossed cheques in drop-boxes available at all
branches.
 Furthermore, customers can also pay their bills using any of the Bank’s ATMs or via
Internet Banking for bills.
2.10.2 Lockers
Allied Bank Lockers are available, at an annual fee, in four different sizes - small,
medium, large and extra large. Locker holders are not required to have an account with
the Bank.

Annual Locker Rent Maximum Loss

S. # Locker Size
(Current) Coverage / Limit

1. Small Rs.1,500/- Rs.500,000/-

2. Medium Rs.2,000/- Rs.1,000,000/-

3. Large Rs.4,000/- Rs.1,500,000/-

4. Extra Large Rs.5,000/- Rs.2,000,000/-

(source:www.abl.com.pk)
2.10.3 Hajj Services
The Hajj Service is available to all pilgrims. The forms and other related services are
provided by the Bank. Hajj applications are available with all branches during Hajj
season, immediately after the Hajj policy is announced by the Government of Pakistan.

17
2.11 Investment Banking
ABL – IBG was established in 2005 and focuses on the Investment Banking market. It
has the highest number of Successful Arrangement and Participation in Key Privatization
& Acquisition Financing Transactions achieved by any Investment Banking Group in
Pakistan. It has already penetrated the investment banking market by taking the lead in a
number of major transactions and arranging funding of more than US$ 6 billion to date. 
2.11.1 Financial Institutions
ABL’s Financial Institutions team shows a strong commitment to product and business
development. Our client portfolio includes top domestic names, important regional
players, top global financial institutions, covers banks, leasing companies, modarabas,
microfinance, the insurance sector and specialist money transfer companies. ABL's
dedicated team of Financial Institution professionals brings a wealth of local and inter
Allied expertise to all facets of this complex industry, and can serve as your single point
of contact for a comprehensive set of products and services, including:
 Inbound trade services
 Inter Allied remittances with immediate processing capability
 Payment and collection solutions
 Confirmation
 Advising
 Negotiation
 Guarantees 
As our institutional customers face continuing challenges, they look to ABL for
comprehensive transactional banking solutions, greater operational efficiency and broad
geographic coverage. 
2.11.2 Cash Management
ABL’s cash management team offers a full range of transactional banking services, from
collections to cross-border payments, from customized services to comprehensive
industry expertise.  Having the largest real-time online branch network in Pakistan,
combined with a host of value-added services, ABL is uniquely positioned to meet the
demanding requirements of global corporate, public sector enterprises and top-tier

18
domestic companies. With its collaborative approach to building and implementing
solutions, ABL is committed to giving its customers the best service possible. For more
information about our services, please contact us at your convenience.  We look forward
to hearing from you.  
2.11.3 Home Remittances
Allied Bank has rolled out its state-of-the-art ‘e-Remittance’ services to facilitate inter
Allied remittances sent to Pakistan by overseas Pakistanis. ABL has been significantly
important in originating home remittances to Pakistan, and is continuously working to
develop innovative ideas for maximizing its reach to all Pakistanis living abroad.

2.12 Product and Services

 In line with the Bank’s aim to provide a host of products and services to its customers,
substantial ground work has been done to establish a strong consumer banking business.
Furthermore, to achieve this objective, professionals from across the industry have been
recruited into areas of product development, sales, credit policy, research, consumer
analytics, call centers and service quality departments. The consumer portfolio,
comprising the debit card, credit cards, auto loans, personal loans and mortgages will be
established phase by phase. However, we are confident that our strengths, together with
our largest network of online branches, a superior technology platform, a big customer
base and the Consumer Personal Banking Group (CPBG), will take the Bank’s
profitability to new heights.

2.12.1 Allied Visa Credit Card

Welcome to the world of privileges, benefits and savings with your Allied Visa Credit
Card. In order to cater to your growing financial needs we are proud to introduce Allied
Visa Credit Card with The Lowest Service Charge ever! So now you can save money
where it counts and spend lavishly at your favorite places with greater flexibility,
convenience and most important-Affordability!
With your Allied Visa Credit Card you can enjoy a variety of state-of-the-art features and
unmatched value by spending at over 49,000 merchants across Pakistan and 27 million

19
merchant outlets worldwide! And what more, you can also use your credit card at over 1
million ATMs inter Alliedly.

2.12.2 Allied Visa Gold Credit Card

With your Allied Visa Gold Credit Card every Pakistani can now enjoy the benefits of a
Gold Card inter Alliedly with unmatched savings greater flexibility, convenience and
security.
 Features
 Buy Now, Pay Later
 Flexible Repayment
 Cash Advance Facility
 Allied Easy Installments (AEI)
 Supplementary Cards
 Balance Transfer Facility
 Credit Protection Plus
 With Credit Protection Plus, your Allied Visa Gold Credit Card provides payment
cover against:
 Zero Loss Liability
 24-Hour Allied Phone Banking
 Free CIP Lounge Access
2.12.2 Visa Platinum Credit Card
With your Allied Visa Platinum Credit Card you can enjoy exceptional benefits and a
host of local and inter Allied benefits like never before!
Features
 Visa Platinum Golf
 Platinum Life Platinum
 Visa Platinum Club
 Visa Platinum Dining
 Visa Experiential Travel
 Priority Pass Airport Lounge Program
20
 CHAPTER 03

ORGANIZATION AND INDUSTRY ANANLYSIS

3.1 Strategic change in organizations Creative and Innovation

Strategic ABL

The factor of change is one of the most certain factors in an organizational life. The

certainty of change gives birth to the need of its appropriate management. Academics

presented various models of the change management like McKinsey 7-S Model, Kotter's

Eight Step Change Model, etc. In this section of the paper we will evaluate the changing

environment of Abbey National in the current economy by employing three models of

change i.e. 5 P's Model of Pryor, McKinsey 7-S Model, and “Lewin's Change

Management” Model in detail.

3.2 “5 P's Model of Pryor ABL”

3.2.1 Introduction

The 5P model is a joint presentation of Mildred Golden Pryor, J. Chris White, Leslie A.

Toombs and John H. Humphreys. It is a model of strategic management to obtain

organizational success through 5 variables: “Purpose, Principles, Processes, People, and

Performance”.

3.2.2 Key Points of the Model

The points mentioned below explain the model:

Purpose is a variable that includes the objectives, goals, mission, strategies, feedback, and

vision, and all other factors that show the intensions of the organization. Leaders of the

organizations should clearly deliver the strategies and tactics to the staff in order to obtain

21
the organizational goals. The other variables like principle and processes must be aligned

with the purpose.

Principles are the next P after Purpose. They encompass all organizational attitudes,

assumptions and philosophies that indicate how to conduct the business. They also

include ethics and other integrity elements to which employees need to make the

commitment at the time of hiring. They are extremely important for the successful

execution of organizational activities.

Principles should be aligned with processes that involve all those infrastructure, systems,

procedures and structure which are employed by organization for the production of goods

and for performing services.

People are a group of individuals that achieve the organizational purposes by following

principles of the organization.

Performance is comprised of all the metrics, results and measurements that are used as a

standard for decision making process of the organization. The establishment of

measurement and feedback is an important task of leader for the long run survival and

profitability of the organization.

All above stated 5P’s must be aligned with each other if the organizational leaders want

to achieve a maximum efficiency and output.

3.2.3 Relevance of 5 P's Model to Abbey National in the current

economy

The 5P model is of relevance to Abbey National in the current economy, especially when

it is undergoing a big change of its history. This is so because the 5P’s model is a best

suit for strategic, quality, organizational, and change management. As Abbey National is

22
overtaken by Group Santander, which is an international banking group so the new leader

has to realize the current economic conditions of the UK in order to make this investment

worthwhile.

Along with this the new leader should communicate the organizational purpose and

principles clearly to the people. The processes should also be made clear from the leaders

in order to remove any ambiguity. Lastly, leaders need to set up processes appropriately

to reward the success of people. Thus by following the 5P model the occurrence of

change in Abbey National can be managed very well by keeping in view the current

economy of UK.

3.3 Lewin's Change Management Model ABL

3.3.1 Introduction

In the 1950's, idea of change management was presented by Kurt Lewin in a form of

three steps model. For over 40 years his model ruled in the area of change management.

3.3.2 Core points of the Model

His model is explained in below stated points:

In order to implement a change effort Lewin purposed three step process to managers and

that is Unfreeze-Change-Freeze (Burne, 2004).

Unfreeze is a stage in which those employees are motivated who either do not accept

change or are not accustomed to the change occurred in the processes and duties (Burne,

2004). Lewin is of view that for the successful adoption of new behavior, the old

behavior needs to be discarded. Schein (1996, p.27) explains that three factors i.e. status

quo disconfirmation regarding its validity, anxiety for survival and creation of

psychological safety are essential for the attainment of unfreezing stage.

23
The second stage is the phase in which the change is implemented and adjusted. This

stage is a transitional period in which people are unfrozen and started moving towards a

new way (Burne, 2004).

The last phase is freezing or refreezing in which the organization is strengthened and

people or employees are allowed to refreeze (Burne, 2004).

3.3.3 Relevance of Lewin's Change Management Model to Abbey

National in the current economy

This model can be relevant to Abbey National in the current economy because it defines

ways for change management by keeping in view the psychological behaviour against the

element of change. The employees of Abbey National would not accept the change if

they are not treated by new leaders according to their mind. As the change has been

occurred at Abbey National so by employing unfreezing strategies they will be able to

successfully cover the transitional phase in order to refreeze towards the new directions.

If new leaders do not reduce the anxiety of people by providing them safety the change

cannot be implemented successfully. Lewin rightly acknowledged that change is not

merely a step but a journey that needs persistent and strong efforts.

3.4 HR Practices ABL

3.4.1 Compensation

Compensation is a systematic approach to providing monetary value to employees in

exchange for work performed. Compensation may achieve several purposes assisting in

recruitment, job performance, and job satisfaction.

24
Compensation is a tool used by management for a variety of purposes to further the

existence of the company. Compensation may be adjusted according the business needs,

goals, and available resources.

 Compensation may be used to: 

 Recruit and retain qualified employees.

 Increase or maintain morale/satisfaction.

 Reward and encourage peak performance.

 Achieve internal and external equity.

 Reduce turnover and encourage company loyalty.

 Modify (through negotiations) practices of unions.

Recruitment and retention of qualified employees is a common goal shared by many

employers. To some extent, the availability and cost of qualified applicants for open

positions is determined by market factors beyond the control of the employer. While an

employer may set compensation levels for new hires and advertize those salary ranges, it

does so in the context of other employers seeking to hire from the same applicant pool.

 Morale and job satisfaction are affected by compensation. Often there is a balance

(equity) that must be reached between the monetary value the employer is willing to pay

and the sentiments of worth felt be the employee. In an attempt to save money, employers

may opt to freeze salaries or salary levels at the expense of satisfaction and morale.

Conversely, an employer wishing to reduce employee turnover may seek to increase

salaries and salary levels.

 Compensation may also be used as a reward for exceptional job performance. Examples

of such plans include: bonuses, commissions, stock, and profit sharing, gain sharing.

25
Compensation will be perceived by employees as fair if based on systematic components.

Various compensation systems have developed to determine the value of positions. 

These systems utilize many similar components including job descriptions, salary

ranges/structures, and written procedures. 

The components of a compensation system include: 

 Job Descriptions A critical component of both compensation and selection

systems, job descriptions define in writing the responsibilities, requirements,

functions, duties, location, environment, conditions, and other aspects of jobs.

Descriptions may be developed for jobs individually or for entire job families.

 Job Analysis  The process of analyzing jobs from which job descriptions are

developed. Job analysis techniques include the use of interviews, questionnaires,

and observation.

 Job Evaluation  A system for comparing jobs for the purpose of determining

appropriate compensation levels for individual jobs or job elements. There are

four main techniques: Ranking , Classification , Factor Comparison , and Point

Method .

 Pay Structures Useful for standardizing compensation practices. Most pay

structures include several grades with each grade containing a minimum

salary/wage and either step increments or grade range. Step increments are

common with union positions where the pay for each job is pre-determined

through collective bargaining.

 Salary Surveys Collections of salary and market data. May include average

salaries, inflation indicators, cost of living indicators, salary budget averages.

26
 Companies may purchase results of surveys conducted by survey vendors or may

conduct their own salary surveys. When purchasing the results of salary surveys

conducted by other vendors, note that surveys may be conducted within a specific

industry or across industries as well as within one geographical region or across

different geographical regions. Know which industry or geographic location the

salary results pertain to before comparing the results to your company.

3.4.2 Policies and Regulations

Different types of compensation include: 

 Base Pay

 Commissions

 Overtime Pay

 Bonuses, Profit Sharing, Merit Pay

 Stock Options

 Travel/Meal/Housing Allowance

 Benefits including: dental, insurance, medical, vacation, leaves, retirement,

taxes...

3.4.3 Performance appraisal

Performance appraisal, also known as employee appraisal, is a method by which the job

performance  of an employee  is evaluated. Performance appraisal is a part of career

development .

Performance appraisals are regular reviews of employee performance

within organizations. Generally, the aims of a performance appraisal are to:

 Give feedback on performance to employees.

27
  Identify employee training  needs.

 Document  criteria used to allocate organizational rewards .

 Form a basis for personnel decisions:  salary   increases,  promotions

, disciplinary actions , etc.

 Provide the opportunity for organizational diagnosis and development.

 Facilitate communication between employee and administration

 Validate selection techniques and human resource policies to meet federal Equal

Employment Opportunity  requirements.

A common approach to assessing performance is to use a numerical or scalar  rating

system whereby managers are asked to score an individual against a number

of objectives /attributes. In some companies, employees receive assessments from

their manager , peers, subordinates and customers  while also performing a self

assessment. This is known as 360° appraisal forms good communication patterns.

The most popular methods that are being used as performance appraisal process are:

 Management by objectives 

 360 degree appraisal 

 Behavioral Observation Scale 

 Behaviorally Anchored Rating Scale 

28
3.5 Succession planning ABL

Succession planning is a process for identifying and developing internal people with the

potential to fill key business leadership positions in the company. Succession planning

increases the availability of experienced and capable employees that are prepared to

assume these roles as they become available. Taken narrowly, "replacement planning" for

key roles is the heart of succession planning. Effective succession or talent-

pool management concerns itself with building a series of feeder groups up and down the

entire leadership pipeline or progression. In contrast, replacement planning is focused

narrowly on identifying specific back-up candidates for given senior management

positions. For the most part position-driven replacement planning is a forecast, which

research indicates does not have substantial impact on outcomes.

Fundamental to the succession-management process is an underlying philosophy that

argues that top talent in the corporation must be managed for the greater good of the

enterprise. Merck and other companies argue that a "talent mindset" must be part of the

leadership culture for these practices to be effective.

Succession planning is a process whereby an organization ensures that employees are

recruited and developed to fill each key role within the company. Through your

succession planning process, you recruit superior employees, develop their knowledge,

skills, and abilities, and prepare them for advancement or promotion into ever more

challenging roles. Actively pursuing succession planning ensures that employees are

constantly developed to fill each needed role. As your organization expands, loses key

29
employees, provides promotional opportunities, and increases sales, your succession

planning guarantees that you have employees on hand ready and waiting to fill new roles.

According to a 2006 Canadian Federation of Independent Business survey, slightly more

than one third of independent business owners plan to exit their business within the next

5 years and within the next 10 years two-thirds of owners plan to exit their business. The

survey also found that small and medium sized enterprises are not adequately prepared

for their business succession: only 10% of owners have a formal, written succession plan;

38% have an informal, unwritten plan; and the remaining 52% do not have any

succession plan at all. The results are backed by a 2004 CIBC survey which suggests that

succession planning is increasingly becoming a critical issue. By 2010, CIBC estimates

that $1.2 trillion in business assets are poised to change hands.

3.6 Process and practices ABL

Companies devise elaborate models to characterize their succession and development

practices. Most reflect a cyclical series of activities that include these fundamentals:

 Identify key roles for succession or replacement planning

 Define the competencies and motivational profile required to undertake those

roles

 Assess people against these criteria - with a future orientation

 Identify pools of talent that could potentially fill and perform highly in key roles

 Develop employees to be ready for advancement into key roles - primarily

through the right set of experiences.

In many companies, over the past several years, the emphasis has shifted from planning

job assignments to development, with much greater focus on managing key experiences

30
that are critical to growing global business leaders. North American companies tend to be

more active in this regard, followed by European and Latin American countries.

PepsiCo, IBM and Nike are current examples of the so-called "game planning" approach

to succession and talent management. In these and other companies annual reviews are

supplemented with an ongoing series of discussions among senior leaders about who is

ready to assume larger roles. Vacancies are anticipated and slates of names are prepared

based on highest potential and readiness for job moves. Organization realignments are

viewed as critical windows of opportunity to create development moves that will serve

the greater good of the enterprise.

Assessment is a key practice in effective succession planning. There is no widely

accepted formula for evaluating the future potential of leaders, but there are many tools

and approaches that continue to be used today, ranging from personality and cognitive

testing to team-based interviewing and simulations and other assessment center

methods. Elliott Jaques and others have argued for the importance of focusing

assessments narrowly on critical differentiators of future performance. Jaques developed

a persuasive case for measuring candidates' ability to manage complexity, formulating a

robust operational definition of business intelligence. The Cognitive Process Profile

(CPP) psychometric is an example of a tool used in succession planning to measure

candidates' ability to manage complexity according to Jaques' definition.

Companies struggle to find practices that are effective and practical. It is clear leaders

who rely on instinct and gut to make promotion decisions are often not effective.

Research indicates that the most valid practices for assessment are those that involve

multiple methods and especially multiple raters “Calibration meetings," composed of

31
senior leaders can be quite effective judging a slate of potential senior leaders with the

right tools and facilitation.

With organizations facing increasing complexity and uncertainty in their operating

environments some suggest a move away from competence based approaches. In a future

that is increasingly hard to predict leaders will need to see opportunity in volatility, spot

patterns in complexity, find creative solutions to problems, keep in mind long term

strategic goals for the organization and wider society, and hold onto uncertainty until the

optimum time to make a decision.

Professionals in the field, including academics, consultants and corporate practitioners,

have many strongly held views on the topic. Best practice is a slippery concept in this

field. There are many thought pieces on the subject that readers may find valuable such as

"Debunking 10 Top Talent Management Myths", Talent Management Magazine, Doris

Sims, and December 2009. Research-based writing is more difficult to find. The

Corporate Leadership Council, The Best Practice Institute (BPI) and the Center for

Creative Leadership, as well as the Human Resources Planning Society are sources of

some effective research-based materials.

Over the years, organizations have changed their approach to succession planning. What

used to be a rigid, confidential process of hand-picking executives to be company

successors is now becoming a more fluid, transparent practice that identifies high-

potential leaders and incorporates development programs preparing them for top

positions. Today, corporations consider succession planning a part of a holistic strategy

called “talent management”. According to the company PEMCO, “talent management is

defined as the activities and processes throughout the employee life cycle: recruiting and

32
hiring, on boarding, training, professional development, performance

management, workforce planning, leadership development, career development, cross-

functional work assignments, succession planning, and the employee exit process”. When

managing internal talent, companies must “know whether the right people, are moving at

the right pace into the right jobs at the right time”. An effective succession planning

strategy, coupled with solid career development programs, will help paint a more

promising future for employees.

3.7 Strengths & Weakness of Human Resource Aggregate Planning

ABL

Aggregate planning is a mid-range planning process where companies develop strategies

for the next few months, typically ending in 12 to 18 months. Certain industries use

aggregate planning more than others do, such as manufacturing, production and

construction. These industries rely on these plans to allocate resources among several

different jobs or projects. Human resources is responsible for supplying one of three

major economic resources: labor. Aggregate planning offers distinct strengths and

weaknesses for companies in the business environment.

3.7.1 Limit Expenses

For most companies, payroll is their largest business expense. Aggregate planning helps

companies plan the specific number of employees for each project and the wage for each

individual or group of employees. Companies often use a mix of skilled and unskilled

labor. Using skilled labor---which is typically more expensive---to complete basic tasks

can increase operating costs and create ineffective operations. Aggregate planning seeks

to avoid this through adequately determining the needs for labor.

33
3.7.2 Accomplish Goals

Aggregate planning helps companies set well-defined goals and objectives for completing

projects. Business owners and managers can also break down large business projects into

a smaller set of tasks. Each task follows a sequential completion process that works to

advance the company's overall mission. The human resource department may use

temporary labor to accomplish short-term goals to avoid hiring long-term employees who

will remain with the company after accomplishing goals.

3.7.3 Turnover

The constant use of aggregate planning in business can lead to high employee turnover,

whether using temporary labor or laying off workers after project completion. Not only

does this create more paperwork for the human resource department, but it can also lower

employee morale. Employees are typically uncomfortable when working in an

organization that has a high employee turnover. Individuals may think they are next in

line for dismissal, shifting their focus from productivity to finding ways to keep their

jobs.

3.7.4 Inflexible

Short-term aggregate planning can create some level of inflexibility in a company's

operations. Human resources may be unable to adequately staff the company, if it does

not meet the requirements for accomplishing goals. Changes in the business environment

or economic market can also affect the company's aggregate planning process. A sudden

34
loss of business credit or tight monetary and fiscal policies can make it difficult for the

human resource department to respond to these changes.

3.8 Porter’s Five Forces Model

This approach is widely used for competitive analysis. It is because of the high intensity
of competition among companies there five main competitive forces.
3.8.1 Rivalry Among Competitive Firms
It is a very powerful force among the competitive forces the strategies pursued by one
firm can be successful only to extent that they provide competitive advantages over the
competitor. These competitive strategies may be lowering prices, best quality series. The
ABL offering very low charges an demand draft, telegraphy transfer, mail transfer and
give other additional services to the customers and to the Nation.

3.8.2 Potential Entry of New Competitors

Whenever new firms can easily enters a particular industry, the competition increases.
The gout restriction, tariffs, patents etc can stop new firm to enter into the business as per
Banking industry is concerned this market is already very situated in Pakistan and there
are banks with quality services and low charges. So there is no threat to ABL from
potential entry.
3.8.3 Potential Development of Substitute Products
This is the third factor affecting the competitions. There may be some other product can
be substitute the product of that industry. For example banks offering sawing schemes in
Pakistan and these schemes are also offered by GPOs in Pakistan so they must compete
them in this field. If they offer low rates than GPOs so people will go to deposit in GPOs.
People concentration high rates so that’s why sawing PLS accounts are more then current
accounts. The next examples will ATM, which substitute presenting cheques at counter
and encash it. Luckily ABL is stronger in this field. It must further improve in this field
to compete the competitors.
3.8.4 Bargaining Power of Suppliers

35
The bargaining power of supplier affects the intensity of competition, especially when
there are a large number of suppliers. In case of banks the suppliers are customers they
supply the money to banks. Now they must offer good services, quality, safety and Low
charges etc to customers. In this field Habib Bank Limited is very good as it offers good
quality services to customers. They charge low charges on remittances. So that’s it is a
competition to other banks.
3.8.5 Bargaining Power of Consumers
When customers are concentrated or large, or buy in volume, their bargaining power
represents a major force affecting intensity of competition. Now the number customers in
Pakistan for banks are very high. Banks offering variety of products and services to their
customers. ABL have a large number of customs. Now it must offer good services and
products to their customers to attract them to come to ABL.

36
 CHAPTER 04
MY PERSONAL EXPERIENCE

First day when I went in bank everything was new to me in Allied Bank limited though I

have a good Bookish knowledge but truthfully speaking it was totally different from the

practical knowledge of the banking. But with the grace of Allah Almighty who make me

able to learn some sections of the bank.

4.1 Departments of Organization in which I have worked

I have worked in some departments of ABL .

 Deposit Section

 Clearing Section

 Remittances Section

4.2 Deposit Section

There are two types of deposits i.e. current deposits and saving deposits.

Current deposits are those deposits on which no Interest is given to depositor. The main

benefit of currents deposits is saving. Bank only take or charge service charges on

current account while on the other hand Interest is given by bank on saving account.

Depositors open saving account for profit earning on their savings. A customer or a firm

can open Individual, Joint or business account.

37
4.3 Clearing Section

Every Bank performs the paying and receiving functions. Cheques are collected which

are drawn up to Banks for customers. Similarly the cheques drawn on different Banks

and deposited by Banks own customers for collection within the city are known as

clearing. The functions of receiving andpaying are mostly done through the clearing

house. A clearing house can be defined as "A place where that representatives of all Bank

get together to settle the receipts and payment of cheques drawn on each other" Clearing

House provides the facility which can hardly be dispensed with especially in case of

crossed cheques. There are two main types of clearing.

 Outward clearing Inward clearing.

4.4 Outward Clearing

It includes those cheques and other instruments which are sent by the Bank to the Banks

for payment on behalf of its own clients. Cheques are sent to clearing house through local

main branch.

4.5 Inward Clearing

The cheques drawn are called inward clearing drawn on Habib Bank through its

representatives. On the Bank presented by other Banks for payment it includes those

cheques and other instruments of Pakistan branches which other Banks present at the

clearing house.

4.6 Remittance Section

Remittance means transfer of money from one place to another place. It is of two kinds.

38
 Inland remittance.

 Home remittance.

4.7 Inland remittances

An inland remittance means a transfer of money payable at a certain place within the

country. Inland remittances can be classified as under:-

 Within locality.

 Outside locality.

4.7.1 Within locality

When a branch situated in Kotli is required to send drafts to any other branch situated in

the same city the process is known as within locality. For example ABL main branch

Amjid Mahmood sends any draft to ABL Nar Branch Kotli Branch.

4.7.2 Outside Locality

Outside locality is an important type of inland remittances, which means the transfer of

money payable outside the city. For example ABL main branch Mr. Ehsan sends any

draft to a branch situated at Lahore. It is commonly done through the following means.

4.7.3 Demand Draft (D.D)

Demand draft is a written order by a branch of a specified Bank drawn on another branch

of the same Bank to pay a certain sum of money only to or to the order of the Payee.

Demand drafts are purchased by the clients and after receipt of money Bank issues and

delivers the D.D. to the purchaser who himself sends it to the payee. In D.D. the Banks

do not recover postal charges as it is payable by the purchaser. The Bank, after deliver of

D.D. to the purchaser also sends its own advice called IBCO (Inter Branch Credit Order)

39
to the drawer branch mentioning therein all details of issued draft. Now bankercheque is

payable anywhere in Pakistan.

4.8 Account Section

Every Business organization deals in money matters. Bank also deals in money and more

over since the money belongs to the depositors therefore it is of utmost importance to

keep systematic and correct record.

Further-more the Banks are commercial institutions and its main objective is to earn

profit therefore then record of all incomes and expenditures are kept correctly and

systematically. In ABL the responsibility for maintaining necessary accounting data and

to keep up to date records in a systematic manner has been assigned to the Accounts

Department. The Branches of Bank perform their daily routine work and deal in money

that belongs to depositors. Here account department hold great importance in banking

because it keeps all the accounting records properly. The account department maintains

all the accounting records properly there are certain accounting terms which are defined

as following.

4.9Account

A summary of all debit and credit transaction pertaining to a similar nature or to an

individual or body of persons is called an account.

4,10 Vouchers

Written evidence recorded on a piece of paper in respect of money transaction is called

voucher.

40
4.11 Problems Encountered

During my four weeks stay in (ABL Nar Branch KotliA.K) I found various problems

which I think should be resolved for the better functioning of the Bank. Some of these

problems are of such nature that their solution will help the Bank and its workers in

cooping in this complex world of globalization.

4.12 Problems

Some of problems which I encountered during my Internship are following.

 There is a lack of on-line information in the Bank about the changes taking place

in the world of Banking.

 A customer cannot find any kind of journal or newspaper there.

 In early days of month there is a great rush of customers which cause

inconvenience for the officer concerned and cashier as well.

 A separate counter for ladies is not maintained there.

 Attitude of bankers with all their customers is not same they pay more attention

and good service to some of their customers. Some customers have approach to

officials due to which they get work done before others.

4.12 New Knowledge Acquired

The most important things which I have learnt during my internship are

 Customer dealing

 Clerical work

41
During my Internship period I have learned how to deal with customers. As most of the

people are uneducated in Kotli so it is a bit difficult to deal with such type of customers

to make them understand about your products and services. Sometimes customers get

rude or angry for variety of reasons then such customers should be dealt in a polite

manner. How you respond can make difference between customers who feel satisfied

with your answer or not.

4.13Clerical work

4.13.1 Account opening section

I spent the 1st three days in account opening section. As the area where I did my

internship, the people are not well educated that is why whenever a person will come for

opening an account than the manager referred that man towards me. Then I guide that

man and the form of opening an account will be filled by me and the entire legal

requirement is completed by me. In past the Habib Bank use old type of forms but now

they are using new forms of opening an account. There were five sign required on old

type of form but now the new form require only one sign.To open an account following

Information required

Name of person

Father name

Type of account

Postal address

Contact number

Two copies of CNIC card

Signature of Applicant
42
Amount deposited

If a person cannot do signature two passport size photos are required with thumb

impression.

4.14 Clearing Section

I have also worked in clearing section. During my work I have learned how to collect the

different cheques of different banks. Then I learnt how cheques of different banks

mutually transfer. For mutual transfer everyday a meeting held in NBP mani branch

Kotli. The representatives of UBL, ABL , Bank of Khyber, Bank Alfalah and ABL

participate and thus mutual transfer of cheques held.

New Method: Now days this activity is done through NIFT.

4.15Remittances Section

I also worked in remittances section. In remittances section I learned how to transfer

money from one place to another place. In this section I learned

 Demand draft: A financial payable on demand.

 Online transfer: Electronic transfer of money from one bank account to another

without direct intervention of bank staff.

On each transaction there is commission charged to the sender.

The commission of demand draft from 1 to 1lack is Rs: 160.

The charges are on the demand draft up to 1lack is calculated in percentage.

The commission of online transfer is Rs 350.

Working for four weeks in ABL Nar Branch KotliA.K as an Internee was very

informative experience for me. During my Internship period I have learnt many new
43
things which are surely going to help me in my professional career. It was a good

experience for me to observe and to be the part of practical work of an organization like

ABL . During my internship period I got a chance to understand general consumer’s

behavior and their needs and wants related to banking services and products.

44
 CHAPTER 05
CONCLUSION, PROBLEMS AND RECOMMENDATIONS

In the current scenario of globalization, perfect competition in banking sector and slump
in the word’s economy, when we study the performance of ABL, it is considered that on
the whole the bank is contributing a lot towards the industrial development and capital
formation in the country. As it is exhibited from the data regarding the bank’s financial
performance as shown in this report that the bank is sharing major banking business of
the country. Further, the polices and schemes as are introduced and carried on by the
bank are of great source of half in industrial and trading growth. All these things reflect
the great and valuable efforts on the part of executive command of the bank. But as it is
said that nothing is perfect in this world, this might true in the case of ABL too.

So far as my own observations are concerned, I have concluded a major drawback in the
inner current banking system. In addition to that I have also learnt some disciplinary
wrong practices; I discuss these one by one.
5.1 Conclusion
Allied Bank of Pakistan, no doubt, doing well in the field of banking and it is aimed to
provide better services to its customers. It is specially performing its activities in the
customer advances.
It has a lot of potential to progress in future. The bank can do the good job of opening
branches in the rural areas that will, not only boost saving but also help the people to
raise their standard of living through these savings.
The staff in the bank is found to be very cooperative towards subordinates. I wish that the
bank may progress by leaps and bound, and keep on providing internship to students with
the same dedication.
Summing, I pay my deep gratitude to the bank for providing me with the opportunity of
having internship with it.

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5.2 Problems
5.2.1 Improper Guidance
There are so many customers both literate and illiterate who even do not know to fill
cheques, pay in slips, application forms, etc. They fritter a lot of precious time of the
bank staff.

5.2.2 Lengthy Procedure

The book keeping system and filing system of the bank is so lengthy, ring and time
consuming that its output is adversely affected. There is an element of sluggishness
associated with it too.

5.2.3 No Equality in Attitude

The behavior of almost all the bankers with all of their customers is not the same; they
pay more attention and good services to some of the customers and neglect a major
portion of them. Some of the customers approach to the bank officials and get their work
done before others. It is definitely not good practice.

5.2.4 Favoritism

No doubt that bank enhances credit and finance facilities to persons and parties seeking
such financial assistance for the establishment of industries or trading units, or for
enhancement, of already existing projects. But the bank provides who may also ensure
the prepayment of amount advanced by providing securities arrangements to comer the
risk of non-repayment. Exactly, the bank should do so because later on the when
question of repayment of debt arises the condition of being financially sound providing
securities only can satisfy this question.

Sometimes, some person or group of person’s chalks out a very useful, sound and
successful plan, goes to the bank and request to advance them credit facility. But the pray
being not financially sound and having no arrangement of securities. So the bank rejects
application of such pray. In this way, such talented persons of country discouraged. This
happens usually due to favoritism, nepotism and red tapism.

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5.2.5 Delays in Loan Advancement
It has been observed that there is delays in sanctioning of cases form the head office,
which results in customer dissatisfaction.
5.2.6 Lack of appreciation
Another very important thing which is ignored in the bank is appreciation if the employee
on their good performance. If hard work and performance of employees is not recognized
and appreciated they become dishearten which results in decline in performance.

5.3 Recommendation

5.3.1 Effective Advertisement

The bank really lacks a sound advertisement, which could attract more and more people,
and should not rest upon existing customers. The bank should launch luring advertising
campaigns thought out the year to promote habit of saving in the people and to attract
new deposits and sustain.

5.3.2 Proper Planning

Bank should make a plan to accelerate its recover efforts on war footing and re-organize
the recovery function on global basis. In addition to this, bank should tighten up control
on expenditures, curtail extra lavishness and costs. Risky schemes should avoid in which
return is uncertain. Right people for right job must be appointed.

5.3.3 Division of Labor

If bank wants to get specialized in every walk of banking field then there must be
division of labor to eliminate extra and un-necessary burden on the employee of the bank.
Working conditions must be improved resulting in enhancement of efficiency of
employee.

5.3.4 Concentration on Current Deposits

More and more stress should be laid on acquiring current deposits and sustain existing
ones in order to reduce cost (interest) on deposits. Deposits must be taken at a lower cost
and given at higher interest rates to earn more profit.
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5.3.5 Check on Expenditures

Un-necessary and non-productive expenditures must be controlled and cut-down.

Lavishness and extra-ordinary protocol for the entertainment of executives should be
curtailed and abolished.

5.3.6 Proper Guidance

Bank should adopt such an induction plan that when a customer opens his account with
the bank he should be supplied with a booklet written in simple language which enables
him to know the procedure of filling the cheques, pay in-slips, etc. It will save a lot of the
bank‘s staff precious time during the conduct of banking business and also ease the
customers.

5.3.7 Recruitment Procedure

There should be an open invitation to competitive and qualified professional degree

holders and young energetic blood purely on merit basis to get the efficient and
hardworking employee. Political pressures, influential approaches should be
accommodated.

5.3.8 Qualitative Advancing /Financing

The bank should avoid as much as possible to give loans to the politicians, ministers and
corrupt people or groups because recovery of loan is almost impossible form them.

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 References

 Doug, C and Jenni, G. (2003). Clients Forever (1st Ed.). Chicago: McGraw Hill
 Eddyston, C. (1991). Managing Banks Effectively (1st Ed.), Canada: John Wiley
and Sons

 James, A. And Mona, J. (2004). Banking and Financial Management (4th Ed.).
Boston USA: McGraw Hill / Irwin

 Melanie, K. (2006). Banking in a Changing World. USA: Channel View

Publications

 Roger, L. (2002). Money, Banking and Financial Markets (4th Ed.). USA: Wiley

Online Reference

 www.abl.com.pk

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