Bank Alfalah Limited Internship Report PDF

DEPARTMENT OF BUSINESS
ADMINISTRATION, BZU, SUB-CAMUS,

SAHIWAL
INTERNSHIP REPORT
FATIMA
MBA-12-05 (MORNING)
Bahauddin Zakariya University,

Department of Business Administration,
Sub Campus, Sahiwal.
Masters of Business Administration, 5th Semester

Internship Report,
By
Fatima
MBA-12-05 (Morning)
DEPARTMENT OF BUSINESS ADMINISTRATION, BZU, SUB-CAMUS, SAHIWAL | Internship Report
Preface
A practical training is an integral part of MBA study. Every student has to pass his/her
minimum six weeks in any organization of Pakistan. For internship I was selected
through the strict recruitment process of BAL HR department Lahore and appointed to
work in BAL, Sarwer Shaheed Road, Sahiwal. It was a six weeks training period in which
I tried my best to get complete knowledge and training in different sections of the Branch.
Banking sector itself playing an importance role in the economy of any country through
its vibrant functions. This is the basic motivation that stressed me to join a corporate
bank for internship training. Moreover, the experiences and practices learned during this
period also prove very helpful and facilitating in the forthcoming professional life. This
report contains the necessary information about the sections and function of branch.
This report is prepared in simple and understandable format so, that ordinary person
can also take benefit from this report. I am really very thankful to the Mr. Imran (Manager)
and the entire staff members of this branch for their friendly and cooperative behaviour
during internship.
Acknowledgement
No one can say that I am perfect, everyone should admit that without the help of ALLAH
and His people a man cant get anything so I bow my head before almighty Allah with
gratitude. I am also very much thankful and presents. I salute to many individuals who
have helped me in shaping this report .I am also very much thankful to lot of former
fellows and contemporary colleagues who took the time and trouble during the last few
days to speak to me about the way this text could be further improved. I have no wards
to express my gratitude to my coordinator Dr. Waris Ali for his intellectual guidance
without which it could have been rather difficult for me to complete this report. I am
eternally thankful to the whole staff of RHQ BAL Sahiwal, BAL HR department Lahore,
BAL head office Karachi and BAL Sarwer Shaheed Road, Sahiwal who made to
complete my manual work of report and enhancing my practical knowledge and
experience.
Table ofContents
Executive Summary ...................................................................................................................... 6
Evolution of Banking ..................................................................................................................... 7
Banking Sector in Pakistan ............................................................................................................ 7
Introduction to Bank Alfalah Limited ....................................................................................... 9
Product and Services Portfolio............................................................................................... 11
Conventional Banking by Bank Alfalah Limited ................................................................... 18
SWOT Analysis Bank Alfalah Limited ................................................................................... 30
Competitors Analysis ............................................................................................................... 31
Financial Analysis .................................................................................................................... 33
Ratio Analysis ........................................................................................................................... 39
Future prospect of the Bank Alfalah Limited ........................................................................ 45
Conclusion ................................................................................................................................ 46
Recommendation and Suggestions: ..................................................................................... 47
Application of Classroom Learning in BAL........................................................................... 48
If I was the manager of Bank Alfalah Limited ...................................................................... 49
Annexure ................................................................................................................................... 50
Executive Summary
In Masters of Business Administration, Internship Program is an important part to give
students an opportunity to have experience of practical field. The purpose of this
program is to acquaint the students with practical applications of theoretical concepts
taught to them during conduct of their MBA program. This internship report is on my six
weeks practical training at Bank Alfalah Limited, Sarwer Shaheed Road,Sahiwal. All the
efforts on the way are summarized in shape of this Internship Report. In the introductory
part of the report I have discuss the general banking history and the banking history in
Pakistan in different periods. Then I have discussed general functions of banking sector
that are performed by all the banks.
In the body of the report I have discuss all the departments and learning that I have get
from them along with the Complete Products and Services Portfolio of Bank Alfalah
Limited. During this internship I got a chance to get an idea about the practical working
of all the departments. In account opening department learn about the different types
of accounts such as Current accounts, saving accounts, term accounts and foreign
currency accounts and account opening procedure. In credit department I learned types
of loan that BAL offered contains Commercial Financing and Consumer Financing and
modes of securing loan such as pledge mortgage and guarantee. In clearing department
I get the knowledge about three types of clearing that is inward clearing, outward clearing
and online clearing. In remittance department I learned about three types of remittance:
Local funds transfer (LFT) intercity, local foreign funds transfer intercity and foreign
funds transfer and modes of remittance including bankers check and foreign demand
draft. In cash department I learned different types of function that cash department
performing including Cash receipt, Cash payment, Online funds transfer, dealing with
foreign currency (FC). . Remaining part of the report consists of financial analysis for
five years from 2008-2012. In ratios analysis I have calculated liquidity ratios, leverage
ratios, profitability ratios and activity ratio and shows BAL financial position in graphical
presentation. After that I discuss the SWOT analysis of HBL.
In the last part of the report I apply the class room learning in bank which shows the
application of bookish concept in particle work. I have also identified the problems that
are faced by the high street branch. Then I have given some new ideas and suggestions
as a manager to overcome those problems. In the last I have given some suggestion
and recommendations to improve the overall working of the bank.
Evolution of Banking
The word bank was derived from the word BANCUS or BANQUE, which simply means
a bench. The Jews in LOMBARDI transacted the business of money exchange on
benches in the market places and when their business failed or they failed to honor the
customers, the BANCUS was destroyed by the people. Some argue that the bank is
derived from the Germen word BACK, which means joint stock fund. Later on when
Germen occupied major part of Italy, the word was Italianized into bank.Some people
says that Goldsmith were the early bankers who used to keep strong safe for storing
money and valuables so they were the first stage of evolution of Banking system.
Banking Sector in Pakistan

A brief look at the history of banking in Pakistan reveals that the banking sector has
made impressive achievements but still has a long way to go.
Humble Beginnings (1947 1970): Our financial sector evolved very differently
from banks in the developed world. For nearly a year after partition, Pakistan had no
central bank. Habib Bank established in 1941 filled this gap initially, until the State
Bank of Pakistan (SBP) was set up in 1948 under quasi-government ownership. The
role of domestic banks was particularly limited at the time, accounting for only 25 of the
total 195 bank branches in the country. Therefore, the SBP was initially mandated to
develop commercial banking channels, and maintain monetary stability so trade and
commerce could flourish in the newly-created state. Subsequently, Habib Bank, Allied
Bank and National Bank were amongst the first to start operations with strong support
from the central bank.
A Legacy of Public Control (1970 1980): Commercial banking grew favourably

in Pakistan until 1974. Under the nationalization policy implemented by Zulfikar Ali
Bhuttos government, thirteen banks were brought under full government control, and
consolidated into six nationalized banks. The Pakistan Banking Council was set up to
monitor nationalized banks, marginalizing the SBPs role as a regulator. These
measures were meant to improve lending to prioritized industries. However, while
directed lending was viewed favourably at the time, little can be said of the long-term
gains that have been achieved.
Business as Usual (1980-1990): Over time, the financial sector grew to serve
primarily large corporate business, politicians and the government. Board of Directors
and CEOs were not independently appointed. Lending decisions were not always
commercially motivated, and many billions of rupees were unsurprisingly funnelled out
of the financial system as bad loans. Banks were essentially not in control of their
destinies during this period.
Privatization (1990 1997): By 1991, the Bank Nationalization Act was amended,
and 23 banks were established of which ten were domestically licensed. Muslim
Commercial Bank was privatized in 1991 and the majority ownership of Allied Bank was
transferred to its management by 1993. By 1997, there were still four major state-owned
banks, but they now faced competition from 21 domestic banks and 27 foreign banks.
More importantly, administered interest rates were streamlined, bank-wise credit ceilings
removed and a system of auctioning government securities was established, forcing the
government to borrow at market determined rates.
Ushering in the Reforms (1997 2006): After privatization, transformational

reforms were pushed through. The central banks regulatory powers were restored via
amendments to the Banking Companies Ordinance (1962) and the State Bank of
Pakistan Act (1956). Subsequently, corporate governance, internal controls and bank
supervision was strengthened substantially. Legal impediments and delays in recovery
of bad loans were streamlined in 2001. Furthermore, the scope of prudential framework
set up in 1989 was enhanced, allowing banks to venture into hitherto untapped business
segments. Lending to small and medium enterprise had previously been neglected,
whereas consumer and mortgage finance had not developed prior to reforms.
The Post-Reform Era 2006 Present: Buoyed by the spirit of liberalization, the
sectors landscape has changed significantly. By 2010, there were five public
commercial banks, twenty five domestic private banks, six foreign banks and four
specialized banks. There are now 9,348 bank branches spread throughout the country,
catering to the needs of some 28 million deposit account-holders.
Banking In Pakistan The Long Journey Ahead: Much still remains to be

accomplished. In the absence of sustainable economic growth, banks will remain
vulnerable to business cycle fluctuations. As recently as 2008, non-performing loans
increased sharply in response to the preceding years of easy credit and risky consumer
lending practices. Moreover, strong regulation will continue to be required so as to
maintain the delicate balance between industry concentration and competition.
Presently, the top five banks account for about 50% of the sector, measured in terms of
total advances
Introduction to Bank Alfalah Limited
Bank Alfalah Limited was incorporated as a public limited company on June 21, 1992
under the Companies Ordinance 1984.Its banking operations commenced from
November1, 1997. The bank is owned and operated by the Abu Dhabi Group and is the
sixth largest bank in Pakistan.
Bank Alfalah conducts business through a network of 574 branches across 196 cities in
Pakistan with international presence in Afghanistan, Bangladesh and Bahrain and the
representative offices in UAE. The provides Financial Solutions to customers,
corporations, institutions and government through broad spectrum of product and
services ,including corporate and investment banking, consumer banking and credit,
securities brokerage ,commercial ,SME, agri-finances, Islamic and asset financing.
About Bank Alfalah Limited

Vision: To be a premier financial services organization, operating both locally and
globally, offering a complete range of financial products and services to diverse
segments under one umbrella.
Mission: To develop & deliver the most innovative products and deliver exceptional
service quality which contribute to strengthening brand equity strength and maximize
value for the stakeholders of the Bank.
Slogan: Taking Service Excellence to new heights, helping you realize your dreams
The Caring Bank
Objectives:
To please customers by fulfilling the financial needs as best as possible, Bank
Alfalah Limited believes in placing the client at the center of business and all of the
products and services. For this the management has adopted the strategy of Caring
for you Our Customers
To get maximum share of the market

To price the products optimally
To expand more the network of branches in several other cities of Pakistan as well
as in the other countries of the world.
To reinforce a corporate culture that fosters learning, creativity and flexibility.
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Associated Companies of the Group:

Alfalah Securities
www.alfalahsec.com
Alfalah GHP Investment Management Limited
www.alfalahghp.com
Alfalah Insurance Company Limited
www.alfalahinsurance.com
Warid Telecom (Pvt) Limited
www.waridtel.com
Wateen Telecom Limited
www.wateen.com
Credit Rating: PACRA, a premier rating agency of the country, has rated the bank
AA (double A), Entity Rating for long term and A1+ (A one plus) for the short term.
These ratings denote a very low expectation of credit risk, strong capacity for timely
payment of financial commitments in the long term and by highest capacity for timely
repayment in the short term, respectively. The ratings of first and second and third
unsecured listed and subordinated TFC issues of PKR 650 million, PKR 1,250 million
and Rs.1,325 million have been maintained at AA- (Double A minus).
Corporate Citizenship: Responsible Finance and Sustainability through a Beyond

Philanthropy approach are key agenda priorities for Bank Alfalah as well as for the Abu
Dhabi Group. The Bank is committed to growing in alignment with the principle of
responsible finance. We aim to work with community partners and improve peoples
lives by going beyond philanthropy and converting simple ideas into opportunities the
eventual aim is to serve our role as responsible corporate citizens and give back to the
communities where we live and operate.
The Banks two-pronged social governance approach incorporates financial investment
towards meaningful community causes coupled with employee volunteer programs in
order to create measurable, sustainable impact in our communities. We support both
infrastructural development as well as capacity building endeavours in alignment with
the motto of giving back to our communities.
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Product and Services Portfolio
Product and Services portfolio of Bank Alfalah Limited is spread over:

1) Personal Banking
2) Corporate and Investment Banking
3) Treasury and Institutional Banking
4) Business Banking
5) Branchless Banking
6) Self Service Banking
7) Islamic Banking
1. Personal Banking
o Deposits: Bank Alfalah Limited deposit suite has been designed keeping the
diverse needs of its customers. From basic banking accounts, term deposits,
foreign currency to structured savings products, choose the option that best suits
customers needs and start enjoying daily banking services through BAL vast
branch network and self-service banking solutions.
Current Account is an interest free instrument. It has following types of accounts,
Basic Banking Account (BBA account)

Simple Current Account
Alfalah Kamyab Karobar Account
Saving account is an interest-bearing account. It has following types of accounts,
Simple saving account

Royal Profit Account
Kifayat Account.
Alfalah Mahan Amdan Account
Alfalah Mahan Amdan Plus(Term Deposit)
To manage foreign currency transactions with security, ease and convenience,
BAL facilitates its customers with
Foreign Currency Current Account

Foreign Currency Savings Account
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o Loans: Bank Alafalah Limited has designed loan products keeping its customers
individual needs in mind. With affordable tailor-made financing options that offer
the flexibility to choose repayment plans, BAL helps customer to stay in control of
his finances and make the most of lifes opportunities today.
o Credit Cards: Bank Alfalah chip based credit cards open up a world of lifestyle
privileges and financial freedom that allow you to enjoy living life today just the
way you want to! The chip based credit card offers customers enhanced security
features to protect their information from fraudulent acts. The chip generates
dynamic values for each transaction, providing greater security every time client
swipes.
o Bancassurance: Bank Alfalah Limited Bancassurance solutions are specially

designed to help customers to protect and secure a stable future with their loved
ones. Partnering with leading insurance companies in the country, BAL offers a
diverse range of insurance plans, customized to meet savings, education,
marriage and retirement needs at every stage in life.
o Home Remittances: Bank Alfalah Limited offers unmatched services for overseas
Pakistanis to send money home fast and free across BAL large network of over
470 branches in more than 160 cities across Pakistan. Enjoy the convenience of
sending home remittances to your loved one through our International Send
Agents in any of the following modes:
Cash over Counter: Remittance can be collected in cash of up to Rs. 500,000

from any of BAL branches across Pakistan.
Cash over Account: Money can be sent to Pakistan through hassle free account
credit in a Bank Alfalah maintained account or in an account in any RTGS (real
time gross settlement) member bank.
Pay Order/ Demand Draft: If an account is maintained with a non-RTGS

member bank, money can be sent conveniently through Pay Order or Demand
Draft facility.
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2. Corporate and investment Banking:

o Working Capital Finance:
Successful businesses often experience considerable pressure on the available
finances due to timing difference of cash inflows and outflows, up-gradation of
existing facilities and business expansion.
Bank Alfalahs dedicated team of relationship managers can structure tailormade credit solutions to meet your specific short-term or long-term funding
requirements. The loans are provided at competitive rates and are structured to
enhance customers profitability by scheduling the repayment to match the cash
flow available to repay the debt.
Bank Alfalah offers working capital finance by way of overdraft or working capital
loans suitably structured to customers needs and risk profile. These products
are designed to ease the liquidity position of our clients.
o Trade Finance: Bank Alfalah Limited offers a wide range of trade services
designed to meet a range of its corporate clients needs. It has Industry specialists
who are professional and seasoned to make sure that all corporate clients trade
finance requirements are taken care of with precision and skill. The team is
strongly supported by a wide and effective correspondents network spread
worldwide.
BAL team of specialists goes the extra mile to ensure that customers` experience
with the below mentioned services is nothing but exceptional.
Letter of Credit
Import Finance
Export Finance
Bank Guarantee
o Capital Market Operations: Bank Alfalah Limited provides capital market
services
to
various
companies
including
its
existing
customers.
The following services are part of Capital Market Operations;
Bankers to the Issue for Initial Public Offerings (IPOS)

Offer for Sale of Shares (OFS)
Right Share Issues
Dividend Redemption
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The Bank also provides the requisite MIS of all the banker to the issue/dividend
transactions on the prescribed format as and when required by the customer.
o Investment Banking: Our seasoned Investment Banking team is fully equipped

to help you in the following areas:
Leveraged and Structured Finance

Project and Infrastructure Financing (Recourse & Non-recourse based)
Debt Syndication (Conventional and Islamic both)
Capital Market Issues (Listing and private placement of corporate bonds,
sukuks, commercial papers, preference shares, right shares in addition to
initial and secondary public offering of ordinary shares)
Secondary Market Trading of tradable instruments

3. Treasury and Institutional Banking
o Global treasury: Bank Alfalah has a state-of-the-art treasury set up and is one of
the most active participants in the foreign exchange and fixed income markets. This
enables us to offer our customers the most competitive rates in all market
conditions.
In addition to Pakistan, BAL also have offices in Afghanistan, Bahrain, and
Bangladesh.
o Foreign Exchange: BAL FX desk is one of the most active participants in the
interbank market dealing in ready, spot, forward and swap transactions for all major
currencies. Its sizable FX Book allows us to be a market maker in the interbank
markets of Pakistan, Afghanistan and Bangladesh. This enables BAL to offer its
corporate and individual customers the most competitive rates in all market
conditions.
o Fixed Income: BAL dedicated fixed income trading desk is one of the most active
participants in all segments of the domestic money and bond markets.
Primary Dealer of Government Securities: BAL has been appointed by State

Bank of Pakistan (SBP) as a Primary Dealer of government securities which
allows us to purchase Treasury bills and Pakistan Investment Bonds from the
government directly through auction. Having a large Islamic banking setup also
allows us to participate in auctions of Shariah-compliant government bonds
called GOP Ijarah Sukuk.
o Derivatives and Structured Products

BAL offer advisory support to our customers on foreign exchange and interest rate
hedging solutions.
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Financial institutions: BAL offers the following services to various financial
institutions.
a. Fund Based Relationships

b. Trade Relationships
c. Operational support
Via
i.
Corporate banking
ii.
Home remittances
4. Business banking
o
Alfalah SME toolkit: Bank Alfalah is proud to be the first bank in Pakistan to
introduce an SME toolkit in partnership with International Finance Corporation
(IFC). It is an online business management tool dedicated to help small and
medium enterprises to develop sustained growth through implementation of
business practices based on information, communication and technology.
Alfalah SME Toolkit is a free of charge online portal which provides value
added resources including business advice, local and global best practices and
various interactive tools to help both existing and potential SMEs grow and
develop.
o Business accounts: BAL Business Banking team is committed to working in

conjunction with our SME clients as trusted partners in their progress and success.
Whether your operations include sole trading, manufacturing or exporter, we aim
to understand your evolving business requirements needs and offer you a broad
range of customized financial solutions and services to help you achieve your
goals.
Offering a complete product menu including Business Accounts, Loans, Working
Capital Finance, Trade Finance, Transaction Banking and Financial Advisory
Services, we work to enhance your business growth, access and convenience
o Business Loans: At times, businesses can experience challenges with an

unavailability of finances as a result of the difference in timings of cash inflows and
outflows, up-gradation of existing facilities and business expansion.Our dedicated
team of relationship managers can provide you with a range of business loans and
solutions to meet your specific short-term or long-term funding and business
expansion requirements.
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o Personal Saving and Bancassurance products: In order to not simply grow
clients savings and protect future, BAL offers a diverse range of Savings and
Bancassurance solutions:
Alfalah Savings Account

Alfalah Kifayat Monthly Savings Account
Alfalah Mahana Amdan Term Deposit
Alfalah Bancassurance Solutions
o Agri Loans: Bank Alfalah Limited realizes the strong contribution of agriculture
in our countrys economy and the growing financial needs of our farmers. BAL
Rural Finance Program Alfalah Zarie Sahulat offers finance facilities covering
an entire spectrum of farming and non-farming needs with a wide range of
products on flexible short, medium and long term repayment tenures at
affordable mark-up rates.
5. Branchless Banking
o Mobile Paisa:Bank Alfalah has joined hands with Warid Telecom to launch
Mobile Paisa; a branchless banking service which aims to provide innovative,
technology based financial solutions to customers. Mobile Paisa currently offers
customers with Over the Counter (OTC) facilities for making utility bill payments
as well as Person to Person (P2P) funds transfer services via 2000 plus agent
locations across Pakistan.
With the launch of Mobile Paisa, the Bank aims to support the creation of a
branchless banking and alternate payments ecosystem which is likely to augment
financial inclusion in the country, thereby reducing the gap between the banked
and the yet-to-be-banked. In addition, Mobile Paisa will also provide bespoke
products and services to Pakistans existing banking population, including
solutions for SME, agri & payroll segments.
The ultimate objective is
multipronged; firstly, to enable individuals to conduct transactions through a wider

array of products and distribution channels and secondly, to eventually enhance
access to financial services by broadening the banking population ambit a critical
gap which needs to be addressed in Pakistan.
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6. Self Service Banking

o Alfalah VISA Debit/ATM Card: The Bank Alfalah VISA Debit/ATM Card saves
customers from the hassle of carrying cash or writing checks along with the
freedom of making electronic payments anywhere in the world. It carries the Visa
logo ensuring worldwide acceptability at more than 30 million establishments and
1.5 million ATMs.
o SMS alert service: With BAL SMS Alerts Service, customers can keep track of
their transactions 24/7. By subscribing to the service, they can receive real-time
SMS updates for transactions conducted on their Debit Card. It also helps
customer keep track of all their POS, ATM, in-branch and supplementary Card
transactions as and when they are conducted.
o E-Statements: With Bank Alfalahs e-statement service, customer can receive

monthly, quarterly or half-yearly account statements directly via email. This
facility is offered to you at no extra cost, all you need is a personal e-mail
address to which your e-statements will be sent.
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Conventional Banking by Bank Alfalah Limited

Conventional banking Bank Alfalah Limited has been divided in two main sections
Branch Banking:
Operations
Account opening
Accounts
Clearing
Remittance
Sales
Credits
Imports /Exports
o Consumer Banking:
Credit cards
Car Finance
Home Financing
During my Six-weeks of internship, I was gives access to Operations and Credits only
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1. Account Opening Department:

Contractual Relationship: There is a contractual relationship between a Bank
and a Client and opening of an account with the bank is the first step of this
contract. BAL chooses its clients very carefully as it believes that good clientele
is at the heart of good business.
Functions of Account Opening Department:

Following are the functions of the department:
Account Opening
Department
Filling of Account
Opening Form
Verification And
Stamping
Providing Account
Numbers
Issuance of Cheque
Book
Recording Of
Alteration
Closing Of
Account
Customer Service
Procedure of Account Opening:
For opening all types of account the procedure:
One customer relationship form (CRC).

Two signature specimen card (SSC).
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One cheque book requisition form.
There is one undertaking form that is signed by the customer that his or her
account will be blocked at the time until cheque book is not received.
One form signed by the customer for all online facilities. (This form is not for
photo account).
One form signed by the customer that his or her sign are shaky and the
customer is responsible if any other person copy his or her sign.
One form signed by the customer that his or her sign is other than English.
If customer is different from CNIC then one form is signed for undertaking that
his or her sign is different from CNIC.
One ssc is send to the head office. And one is scanned by the branch when
customer sign on any document then first of all it is verified by the branch.
Complete form is send to the head office if there is any mistake the head office show
discrepancy in through mail. The bank Alfalah has centralized system. Thats why it is
also show to the area manager and also to the branch manager. If all the documents
are correctly then firstly the letter of thanks is send at customers address and then after
the six days the cheque book is received by the branch and the customer come with the
letter of thanks and take his or her check book. The bank takes sign at the first page of
check for record.
Requirements for Opening Partnership Account:
Following are the requirements of Partnership Deed.
Identity cards photocopies of all partners.

Partnership mandate for operation of Account signed by all the partners.
Requirements for Opening of Corporate Account:
Following are the requirements of opening corporate account
Copy of Certificate of Incorporation

Memorandum and Articles of Association
List of Directors
Certificate of commencement of business (if required). It is required only in
the case of public companies and not for private companies.
Copies of N.I.C of Directors

Latest copy of Form-29
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Requirements for Opening an Account for A Club/Society/Association:
Copy of rules/by-Laws
Copy of registration (if applicable)
List of executive member Management committee/Management board etc.
(whichever is applicable)
Certified copy of resolution

N.I.C of all members of the Management body
Verification of Documents and Issuance of Account Number: The documents
provided by the account opener are verified by the department head. In Bank Alfalah
this verification is done by the cash and deposit department head. The signatures are
also verified and a signature card is maintained for the purpose of future verification if
required. The account is then entered into the bank's system and processed for getting
the account number and the customer number. This system number comprises of
following components
Issuance of Cheque Book: After opening of account a letter of thanks is sent by head
office at customers address. This letter of thanks customer brings at bank and hand
over to account opening in charge and cheque book issued to customer.
Recording of Alterations and Additions: In case of any alteration the account opening
officer is required to update the customers account. The updating is required in the
following cases
Change of address
Addition of signatories and attorneys
Change in signatures
Changes in any required documents
Account Closing: It is the second function of this department. For closing an account
the customer is required to
Submit a signed account closure request

Surrender the cheque book with the bank
Pay a statutory fee of Rs. 100 to the bank
The account opening officer gets an annexure (given on next page) approved by all the
departments and then closes the account. This is a sort of clearance from all the
departments. The cheque book is then destroyed. Account closed log file is printed in
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order to complete the process of closing an account. In the end the account opening
form is filed in the closed accounts file.
Customer Service: It is the third very important function performed by Account Opening
Department. It is the customer service provided by the bank which ensures loyalty of
customers and new accounts and deposits. Any service that a customer requires should
be provided in order not only to satisfy him but also delight him. The following services
are provided by the Account Opening Department
Balance confirmation
The account opening officer is responsible to provide answer to inquiries about
Balance on telephone as well as personal visits of the customers.
Check clearing inquiries

Account number confirmation
Issuance of statements
The bank provides statements of accounts on the requirement and instruction of the
customers. Normally the bank sends the statement of account after every six months
but if desired by the customer the statement can be sent on quarterly basis monthly
basis or even weekly basis.
2. Cash Department
Cash department of Bank Alfalah works under the operation department. This
department is given the complete responsibility of cash, as result of transaction in touch
local and foreign currencies. It is also responsible for the book keeping of these
transactions and the safe custody of cash. Out of three counters of cash department
one counter is fix for senior citizens and females. All counters are dealing at the same
time in deposits, withdraw and online transaction processes.
This department performs the main function.
Cash receipts
Cash payments
Cash Receipts: In cash department depositors use deposit slip for depositing the
amount into their accounts. The officer checks if the deposit slip is properly filled up
containing title of account, A/C number date and amount in words and figures. Detail on
both counter file and cash receipt voucher should be the same. Cash is received by cash
receiving officer, twice counted and matched with the deposit slip. The cash details are
written on the deposit slip and are also entered in computer software called Temenos.
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Cash received stamp is affixed on the face of the deposit slip along with the signature
of the cash receiving officer.
Deposit slip is forward to the officer in the cash department. Again proper scrutiny is
made by the officer cash department both on cash receipt and Temenos software.
Officer cash department sign the deposit slip and finally approved the transaction on
Temenos. Deposit slip is credited and posted in the concerned accounted in the system.
Counter folio is given the deposition as receipt. One consolidated cash debit voucher is
posted in the system to balance the cash.
Cash Payments of Cheque: All three counters deal with cash payments the process
for payment of cheques local and foreign currency is same. First the cheque is presented
by the customer or holder to cash payment officer. He confirms that it is drawn on the
same branch and the particulars of cheque are properly filled in. Two signatures of the
holder are taken on the back of the cheque. Officer checks the date, amount in words
and amount in figures, payees name, crossing if any, account number, cheque serial
number, any material alterations / endorsements and signature of the customer. Account
is debited in Temenos and then cheque is cancelled by the officer. It is posted in the
system and posting stamp and number is affixed on it. At the end officer hands over
cash to client.
Cash Carrying Companies: Cash is transferred through cash carrying/security
companies when cash is transferred in inter bank accounts or inter branch accounts.
Alfalah deals with
PHEONIX
WACKENHUT
3. Accounts Department
It is the most important department of a bank. One can have a complete view of the
functions and performance of bank from the accounts.The department is responsible for
Keeping record of each and every transaction.

Maintenance accounts.
Preparation of several daily, weekly, monthly, half yearly, and yearly reports.
Analysis of the reports.
Efficient management of funds.
Giving recommendations for improvement in the functions and methods.
24
4. Remittance Department
Remittance means transfer of money from one place to other place.
Remittances Department deals with:
DD (demand draft)
Pay order
CDR (call deposit receipt)
RTC (rupee traveler check)
TT (telegraphic transfer)
Money gram
DD (Demand Draft): A Demand Draft (DD) is an instrument, which is drawn by one
bank upon another bank for a specific sum of money payable on demand. The bank,
given DD to the purchaser against cash or cheque, makes it. Parties involved in DD
Purchaser
Issuing branch
Drawee branch
Payee
DD (Demand Draft) open on customer demand, when someone wants to pay another
person in the city or out of city but there must be Bank Alfalah Branch where DD can be
drawn. Branch is liable to pay where it is drawn. It is transferable to other persons. Bank
charges service charges. Generally concept about DD is that if we want to pay out of
city, but it is not true there may be within the city payment through DD but there must be
more than one branch in a city.
Pay Order: Pay Order is non-transferable. Pay order is used to pay someone as DD
but it clears from same branch that is mention on pay order. General concept about Pay
order is that it is used when pay within the city, but may be out of city but in a specific
branch.
CDR (Call Deposit Receipt): Call Deposit Receipt is instrument made by the Bank, that
is guarantee of customer specific amount that customer has in his account.
When Government or firm ask to participate in Bids of different tenders or contracts and
submit the CDR of some part or percentage of total amount of tender or contract. Usually
2% or 3% is required for CDR. Customer asks Bank Alfalah to make CDR on a company
that requires CDR for bid. If customer fails in the bid the Bank cancel the Call Deposit
Receipt. It is non-transferable instrument.
25
RTC (Rupee Traveller Cheque): Bank Alfalah finished the Rupee traveller Cheque
facility in many Branches. It is like rupee and can easily converted into money. Customer
uses this facility usually due to the threat of theft of money during traveling.
TT (Telegraphic Transfer): When the Bank debit or credit the customers account in
response of customer fax or email for transaction it is called Telegraphic Transfer. If
customer has sufficient balance in the account and ask bank to pay someone then Bank
debited Head office account and credited the Customers account.
Money Gram: Money gram is an international organization of transfer of money. It opens
its franchises in different banks and places. Bank Alfalah Limited has taken the franchise
of money gram. Money gram facility is available in 156 countries and at more than 40000
locations worldwide. The feature of money gram is transfer amount individually from one
country to another within second. Money gram generates the code which provides
money to customer.
Online Transfer: When we talk about the Online Transfer of money by the Bank Alfalah,
only Bank Alfalah branches involve in this kind of transfer. No any other Bank branch
involves, for example if we want to transfer money online from Sahiwal to Okara then
Alfalah Sahiwal branch involve and Alfalah Okara branch should be and not any other
branch of any Bank of Okara. Through the Online transfer funds can be transfer within
seconds from branch to branch of Bank Alfalah. Bankers credit the amount to branch
where we have to transfer the funds, but in response the head office perform this transfer
of funds through software.
5. Clearing and Collection Department

1. Clearing: Clearing were my third rotation under the supervision of Ms. Tuba Hussain
Anwar. She taught me about clearing. She tells me that it is the procedure for
payment and collection of instruments through State Bank of Pakistan. It is transfer
of funds from one branch of bank to the other branch of the same bank or the other
bank on which instrument is drawn without involving cash through State bank
clearing house. The procedure of clearing is facilitated by NIFT (national institution
of facilitation technologies). Clearing procedure require 2 days for completion.
NIFT: It is an institute which performs activities for clearing and collections. This is
institute is created by the government. The branch of NIFT is situating at high street
Sahiwal.
26
Types of Clearing: There are two types of clearing which are following
Inward clearing
Outward clearing
Inward Clearing: All the instruments which are originated by Bank Alfalah Limited,
Sahiwal and are presented in other banks these are collected to NIFT by other banks
and then NIFT send these instruments to Bank Alfalah Limited, Sahiwal.
Types of Inward Clearing: There are three types of inward clearing which are following:
Regular Inward Clearing: Inward clearing that is within the city is called regular
inward clearing
Intercity Inward Clearing: Inward clearing that is outside the city is called
intercity inward clearing.
Same Day Inward Clearing: The instruments that are cleared in the same day
on which they are presented and funds transfer to the customer account on the
same day.
Outward Clearing: All the instruments which are originated by some other banks and
are presented to the Bank Alfalah Limited, Sahiwal, these are sent to other banks by
Bank Alfalah Limited, Sahiwal through NIFT.
Types of Outward Clearing: There are three types of outward clearing which are
following:
Regular Outward Clearing: Outward clearing that is within the city is called
regular outward clearing
Intercity Outward Clearing: Outward clearing that is outside the city is called
intercity outward clearing.
Same Day Outward Clearing: The instruments that are cleared in the same day
on which they are presented and send to other banks and funds transfer to the
customer account on the same day.
2. Collection: There are two types of collection which are following:
Outward bills for collection-OBC

Inward bills for collection-IBC
Outward Bills for Collection-OBC: It is a facility given to customers for collection of
their outstation checks. The cheque undergoes a process of clearing. Collection involves
All of the outstation cheques become a part of outward bill for collection
These cheques are given OBC numbers from OBC Register
27
Information related to the checks is entered in the register such as date, cheque
no. bank on which check is drawn and amount of cheque etc.
These cheques along with OBC Forward Schedule are sent to the cities where
the banks are located on which these cheques are drawn.
After it the cheque is realized and a credit advice is mailed to the concerned
branch, which serves it as debit voucher.
Inward Bills for Collection-IBC: All of the cheques that are received from other cities
become a part of inward bills for collection
Each cheque is given IBC Number from IBC Register

Information of a cheque received is entered in the register
6. Credit Department
Credit means belief or trust. The quality of being credible or trustworthy. Another words
we can define credit as trust in ones integrity in money matters and ones ability to meet
payment when due.
The earnings of BAL are chiefly derived from interest charge and discounts. This
department is the revenue generating department. Credit and advance department
deals with extending loans (credit facility) to customers. State Bank of Pakistan (SBP)
has prescribed regulations which are called PRUDENTIAL REGULATIONS. Every
bank has to follow these regulations. If any bank violates the regulations it should be
liable for penalties under the core spirit of SBP PR(S).The Bank Alfalah limited credit is
extended on the basis of these rules and regulations. These regulations tells the term
and conditions under which you can extend loans to the borrower and to what extent.
Credit Facilities: At BAL there are two types of credit facilities
Funded facilities
Non funded facilities
o Funded Facilities: These are the facilities in which there is direct involvement of
cash fund. Following are the funded facilities.
Current finance CF
Term finance TF
Finance against foreign bills FAFB
Finance against packing and credit FAPC
28
Finance against imported merchandise FIM
Finance against trust receipt FATR
Payment against document PAD
Current Finance CF: The extensively used financing mode at BAL is current finance
(CF) current finance is used to finance both individuals and industries. Individual take
current finance for their personal use while in industries. It is taken for fulfilling the
requirement of working capital.
Term Finance TF: Term finance is for specified time period. Term finance is given for
fixed asset financing.
Finance against Foreign Bills FAFB: In FAFB facility exporter take loan from bank on
the behalf of their foreign export bills. Like exporter sends shipment but at that time he
needs fund for the operation of the business. He may go to the bank and surrenders all
the documents including L/C, Bill of lading etc. bank checks all the documents to be in
accordance with terms and conditions. If they find no discrepancy, they give money to
exporter but take some margin on it.
Finance against Packing and Credit FAPC: FAPC is taken for the preparation of
consignment. It has two forms.
Pre-shipment loans are export related working capital financing

Post shipment financing is essentially the receivable financing to the exporters
till the period he is out of cash after the shipment.
Finance against Imported Merchandise FIM: This facility is allowed against the
commodities imported from other countries usually through letter of credit. Sometimes
importer does not have enough amounts for paying the imported merchandise therefore.
He request to the bank to pay all dues to the exporter against the security of imported
merchandise. Bank pays the amount and releases the goods, when the importer pays
off its liability partially / fully.
Finance against Trust Receipt FATR: Finance is extended upon the trust receipt
signed by borrower. Importer have to import the product. There are three conditions.
Pay money and get thing

Get fine facility
If that client is trust worthy for bank believing on him based upon his past record.
He releases the goods against the trust receipt. Trust receipt is given to the bank
by the customer. The customer in turn commits that I will pay on such and such
date. Bank pay all taxes and get merchandise and then give it to client. Bank do
29
charges mark-up against such financing. FATR is for specific period of time. If
client do not pay with in specified time then bank charges higher per day markup.
Payment against Document PAD: Payment against document is made by the banks
as payment against L/C comes due payment is made for imported documents. For
example when exporter sends all the document to importing bank as document reached,
importing bank has to make payment within 24 hrs if the importer does not pays then
bank charges mark-up per day.
o Non Funded Facilities

The facilities where there is no direct involvement of banks fund. Following are the nonfunded facilities.
Letter of credit L/C

Letter of Guarantee L/G
Letter Of Credit : Importer bank issues a document on request stating that it will pay
the exporter when exporter fulfil the terms of letter of credit L/C is off two types:
Sight L/C requires the importer / importing bank to pay as soon as it receives the
clean documents from exporter.
Usance L/C extends time period (typically 60, 90, 120 days) to importing bank
for payment. After specified time period importer have to pay. Letter of guarantee
L/G. Bank give guarantee in the behalf of person that I will pay in case of
default.
30
SWOT Analysis Bank Alfalah Limited

Strengths: Capital, knowledge, skill, or other advantage that a firm has or can
acquire over its competitors in meeting the needs of its customers is called strength.
Core strength is providing Hilal banking services. Hilal is Arabic term for
permissible. Hilal banking follows traditional Muslim laws with strong market in
Middle Eastern company.
Public confidence
Sound financial strength
Highest profitability
There is professional and committed workforce.
Low cost then other banks
Free Online Banking
Weaknesses: Flaw that increases the risk of a failure is called weakness or a
company's weaknesses are the things it does not do well or that others do better.
Bank Alfalah adherence to Hilal standers may be strength in some market but
weakness in the west that make it out of the home.
This bank has no advanced technology as compared to its competitors. That is

a strong weakness of bank Alfalah limited.
Less advertisement
Slow in introducing a new product.
Opportunities: Ongoing opportunity to generate income as an independent
representative of a network marketing company is called opportunity.
Growth of Islam is the main opportunity of bank Alfalah limited Bank Alfalah has
the main opportunity to expand its business beyond the Middle East. And into
markets in the USA and Europe in order to offer hilal banking.
The market growth is very low as compared to the bank growth.

This bank can fully avail the facilities of E- banking
Extension of international network of branches
31
Threats: Negative event that can cause a risk to become a loss, expressed as
an aggregate of risk, consequences of risk, and the likelihood of the occurrence of the
event is called threats
BAL has main threat from western bank that are able to engage in less restrictive
source of revenue generating they admit that they do not offer full product of
continental western bank.
Establishment of new private financial institutions & expansion

Govt. sponsored schemes
Political pressure
Reducing branch network
Uncertain economic conditions
Action taken by competitors
Competitors Analysis
All the private banks are the competitor of bank Alfalah limited. But the main competitor
of this bank is united bank limited because it is also sister company of the Alfalah.
Strength of UBL:
But both of the banks are lie in the same category of its profitability.
Strength of united bank limited:
United bank is a largest bank of Pakistan in term of deposits.
2ndlargest Privatized Bank of Pakistan.
UBL offering Customized Products and services aggressively better than its
competitors.
Improved operational efficiency as to its past.

Courteous Customer service and fast delivery of online and offline services.
Marvelous Image and Reputation of the bank in the eyes of its customers.
Extensive Branch network.
UBL Product positioning is very effective.
UBL target the segment like salaried person, business people and self-employed
person.
32
Weakness of UBL:
No standardization in terms of branches some of the branches are very attractive
and most of the branches are not very good like other branches.
In some regions, urban areas of Pakistan service of UBL is not good as

compared to other privatized banks
The application time is also quite lengthy.

UBL is a step behind in using new technology as compared to other banks
All branches need orientation for customer dealing
Threat of UBL:
Large and increasing competition.
High operating costs
Opportunities of UBL:
Proper orientation of employees in all branches can help them to cope up with
foreign banks
By bringing new technology and modern business processes will bring the
change and increase their profitability
Call centre services should be improved to enhance their network

Objective of UBL: Its objective to satisfy the customer needs and also become the
premier organization in the world.
33
Financial Analysis
Financial analysis (also referred to as financial statement analysis or accounting
analysis or Analysis of finance) refers to an assessment of the viability, stability and
profitability of a business, sub-business or project.
Financial analysts often assess the following elements of a firm:
Profitability - its ability to earn income and sustain growth in both the shortand long-term. A company's degree of profitability is usually based on the income
statement, which reports on the company's results of operations;
Solvency - its ability to pay its obligation to creditors and other third parties in
the long-term;
Liquidity - its ability to maintain positive cash flow, while satisfying immediate
obligations;
Both 2 and 3 are based on the company's balance sheet, which indicates the financial
condition of a business as of a given point in time.
Stability - the firm's ability to remain in business in the long run, without having
to sustain significant losses in the conduct of its business. Assessing a
company's stability requires the use of both the income statement and the
balance sheet, as well as other financial and non-financial indicators. Etc.
I have used different tools of financial analysis in this section. Financial statements of
Bank Alfalah are analyzed in following ways:
Horizontal Analysis.
Vertical Analysis.
Ratio Analysis.
Horizontal Analysis
A procedure of fundamental analysis in which an analyst compares ratios or line items
in a company's financial statements over a certain period of time. The analyst will use
his or her discretion when choosing a particular timeline; however, the decision is often
based on the investing time horizon under consideration.
34
Bank Alfalah Limited

Horizontal Analysis of Summarized Balance Sheet
From The Year 2008-2012
Year
2012
2011
2010
2009
2008
Balance with treasury banks
77.5735%
55.6648%
26.0361%
7.2465%
100%
Balance with other banks
23.8170%
-19.2602%
-25.0302%
5.2898%
100%
-73.5524%
134.2153%
95.9751%
350.8350%
100%
Investment
149.4125%
119.1979%
49.2971%
30.5196%
100%
Advances
21.4159%
3.0089%
7.5161%
-2.4024%
100%
Fixed assets
-0.1871%
-2.7924%
3.1311%
5.2195%
100%
other assets
47.6500%
47.8494%
42.6851%
62.9667%
100%
Total assets
53.7195%
34.1508%
17.9068%
11.4843%
100%
Bills payable
144.2304%
56.5297%
30.9818%
9.0994%
100%
Borrowings
55.0584%
32.7150%
0.0723%
50.8662%
100%
52.0016%
33.4234%
17.7175%
7.9894%
100%
128.4853%
178.0328%
194.3094%
194.4256%
100%
-44.3940%
-13.7260%
100%
Assets
Lending to financial
institution
Deferred tax assets
Liabilities
Deposits and other

accounts
Subordinated loans
Defferd tax liabilities
other liabilities
20.1554%
-7.6477%
-18.0056%
-11.3760%
100%
Total liabilities
52.5005%
33.2737%
17.2414%
10.5411%
100%
Net Assets
77.4589%
51.2316%
30.8647%
29.8548%
100%
Share capital
68.7500%
68.7500%
68.7500%
68.7500%
100%
Reserves
78.0306%
29.5070%
20.6275%
13.3261%
100%
Un appropriate profit
90.3319%
52.2294%
-29.9236%
-21.9506%
100%
75.8545%
56.3463%
35.0346%
35.3337%
100%
87.0796%
20.5621%
5.8604%
-2.9987%
100%
77.4589%
51.2316%
30.8647%
1197.3705%
100%
-0.3945%
40.2333%
34.3787%
21.7245%
100%
Equity
Surplus on revaluation of
assets net of tax
depreciation expense
35
Bank Alfalah Ltd.

Horizontal Analysis of Summarized Income Statement
2012
2011
2010
2009
2008
Mark up earned
48.81%
43.05%
21.20%
14.84%
100%
Mark up expensed
34.18%
25.34%
16.40%
20.30%
100%
Net mark-up income
77.42%
77.71%
30.58%
4.15%
100%
Provisions against loans &
-9.21%
-8.42%
10.20%
81.46%
100%
15.53%
66.27%
34.63%
-78.56%
100%
-95.89%
-79.87%
-9.87%
111.38%
100%
0.43%
22.19%
20.24%
14.91%
100%
116.79%
106.11%
35.87%
-1.35%
100%
19.84%
1.48%
-6.16%
-9.63%
100%
Dividend income
15.99%
-36.30%
-32.07%
-17.52%
100%
Income from dealing in foreign
43.16%
21.92%
23.91%
11.47%
100%
213.01%
-66.98%
-81.71%
62.38%
100%
-93.91%
100%
101.82%
101.57%
Year
advances
Provision diminution in investment
value
Bad debts written off directly
Net mark up income after

provisions
Non mark up interest income
Fee, commission and brokerage
income
currencies
Gain on sale of securities
Gain/loss on revaluation of
investment
100.83%
Other income
40.77%
42.94%
4.42%
4.96%
100%
Total non mark-up interest income
50.97%
11.30%
-2.38%
7.45%
100%
89.78%
67.20%
20.17%
2.26%
100%
55.05%
41.06%
28.27%
11.49%
100%
-99.94%
-176.9%
-78.81%
-104.9%
100%
other charges
68.57%
62.87%
-37.55%
-35.28%
100%
Total non mark-up interest expense
55.86%
42.76%
28.09%
10.49%
100%
277.95%
202.76%
-23.73%
-43.37%
100%
Non mark-up interest expense

Administrative expense
Provisions against balance sheet
obligation
Provisions against other assets
Profit before taxation
36
Taxation
Current
81.61%
88.62%
-51.32%
-38.37%
100%
Deferred
-34.42%
19.69%
-67.78%
-33.33%
100%
Prior year
86.89%
1034.24
109.87%
100%
152.56%
351.36%
291.27%
-18.87%
-75.83%
100%
250.12%
169.20%
-25.58%
-31.07%
100%
8.17%
-50.21%
-44.54%
-28.95%
100%
20.78%
20.78%
20.78%
0.45%
100%
59.18%
-3.71%
-40.29%
-29.27%
100%
Profit after taxation

Un appropriated profit brought
forward
Surplus on revaluation of fixed
assets
Profit available for appropriation
37
Vertical Analysis
A method of financial statement analysis in which each entry for each of the three major
categories of accounts (assets, liabilities and equities) in a balance sheet is represented
as a proportion of the total account.
Bank Alfalah Ltd.

Vertical Analysis of Summarized Balance Sheet
Years
2012
2011
2010
2009
2008
Balance with treasury banks
10.8197%
10.8683%
10.0120%
9.0102%
9.3662%
Balance with other banks
4.9809%
3.7218%
3.9319%
5.8402%
6.1838%
Lending to financial institution
0.1635%
1.6587%
1.5791%
3.8418%
0.9500%
Investment
35.3213%
35.5705%
27.5651% 25.4864% 21.7694%
Advances
43.6063%
42.3921%
50.3428% 48.3313% 55.2081%
Fixed assets
2.5626%
2.8598%
3.4520%
3.7248%
3.9466%
Defferd tax assets
0.0717%
0.0901%
other assets
2.4741%
2.8388%
3.1171%
3.7652%
2.5758%
Total assets
100%
100%
100%
100%
100%
Bills payable
1.6655%
1.2214%
1.1618%
1.0264%
1.0399%
Borrowings
4.1934%
4.1069%
3.5203%
5.6287%
4.1242%
Deposits and other accounts
90.3005%
90.6986%
90.9648% 88.5057% 90.5969%
Subordinated loans
1.1605%
1.6159%
1.9444%
2.0631%
0.7746%
0.0298%
0.0490%
0.0628%
Assets
Liabilities
Deferred tax liabilities

other liabilities
2.6801%
2.3571%
2.3789%
2.7271%
3.4015%
Total liabilities
100%
100%
100%
100%
100%
Share capital
44.6040%
52.3395%
60.4852%
6.1011%
46.9060%
Reserves
18.6348%
15.9067%
17.1219%
1.6225%
18.5750%
21.6932%
20.3594%
10.8308%
1.2168%
20.2260%
15.0679%
11.3945%
11.5621%
1.0687%
14.2931%
100%
100%
100%
100%
100%
Net Assets
Equity
assets net of tax
38
Bank Alfalah Ltd.
Vertical Analysis of Summarized Income Statement
2012
2011
2010
2009
2008
Mark up earned
100.00%
100.00%
100.00%
100.00%
100.00%
Mark up expensed
59.6790%
57.9877% 63.5632% 69.3287%
66.1820%
Net mark-up income
40.3210%
42.0123% 36.4368% 30.6713%
33.8180%
4.0116%
4.2090%
5.9783%
10.3892%
6.5748%
3.7084%
5.5517%
5.3056%
0.8919%
4.7763%
0.0025%
0.0129%
0.0680%
0.1682%
0.0914%
7.7225%
9.7735%
11.3519% 11.4493%
11.4425%
32.5984%
32.2388% 25.0849% 19.2220%
22.3755%
5.5050%
4.8495%
5.2930%
5.3795%
6.8358%
0.7575%
0.4328%
0.5447%
0.6980%
0.9718%
2.8422%
2.5180%
3.0203%
2.8675%
2.9543%
2.8819%
0.3163%
0.2068%
1.9373%
1.3701%
0.0033%
-0.0250%
0.0088%
0.0080%
-0.5863%
3.8115%
4.0257%
3.4714%
3.6824%
4.0289%
15.8015%
12.1172% 12.5450% 14.5727%
15.5746%
48.4000%
44.3560% 37.6299% 33.7948%
37.9500%
32.9954%
31.2250% 33.5145% 30.7427%
31.6657%
0.0000%
-0.0497%
0.0923%
Provisions against loans

& advances
Provision diminution in
investment value
Bad debts written off
directly
Net mark up income

after provisions
Non mark up interest
income
Fee, commission and
brokerage income
Dividend income
Income from dealing in
foreign currencies
Gain on sale of securities
Gain/loss on revaluation
of investment
Other income
Total non-mark-up
interest income
Non mark-up interest

expense
Provisions against
balance sheet obligation
0.0161%
-0.0040%
39
Provisions against other
0.2832%
0.4135%
0.2479%
0.4491%
0.4513%
0.2043%
0.2234%
0.3964%
33.6795%
32.0898% 33.9828% 30.9368%
32.1544%
14.7205%
12.2662%
3.6470%
2.8579%
5.7957%
Current
6.8184%
7.3666%
2.2441%
2.9985%
5.5868%
Deferred
-1.6381%
-3.1100%
-0.9882%
-2.1578%
-3.7170%
Prior year
-0.3472%
0.1016%
-2.5874%
-0.5053%
-0.2765%
4.8331%
4.3582%
1.0666%
0.3354%
1.5934%
9.8874%
7.9081%
2.5805%
2.5225%
4.2023%
11.3890%
5.4536%
7.1695%
9.6944%
15.6680%
0.0644%
0.0670%
0.0791%
0.0694%
0.0794%
21.3409%
13.4287%
9.8291%
12.2864%
19.9496%
assets
other charges
Total non mark-up
interest expense
Taxation

Un appropriated profit
brought forward
fixed assets
Profit available for
appropriation
Ratio Analysis
It can be defined as a tool used by individuals to conduct a quantitative analysis
of information in a company's financial statements. Ratios are calculated from current
year numbers and are then compared to previous years, other companies, the industry,
or even the economy to judge the performance of the company. Ratio analysis is
predominately used by proponents of fundamental analysis. I have calculated and
analyze different ratios for the purpose of financial analysis.
40
Profitability/ Efficiency Ratio:

A class of financial metrics that are used to assess a business's ability to generate
earnings as compared to its expenses and other relevant costs incurred during a specific
period of time. For most of these ratios, having a higher value relative to a competitor's
ratio or the same ratio from a previous period is indicative that the company is doing
well. I have calculated profitability ratios for Bank Alfalah which are explained below:
Year
2008
2009
2010
2011
2012
Spread Ratio
0.34
0.31
0.36
0.42
0.4
Net interest Margin Ratio
0.03
0.03
0.03
0.04
0.03
0.0023
0.01
0.01
0.04
0.14
0.15
Profitability/ Efficiency Ratio
Return on Assets
0.00273 0.00371
Return on Equity
0.08
Graphical Explanation:
Profitability Ratio
0.5
0.4
Spread Ratio
0.3
Net interest
Margin Ratio
0.2
0.1
Return on
Assets
0
2008
2009
2010
2011
2012
Interpretation:
As it is clear from above explanation that profitability ratios are increasing with the
passage of time. This factor shows that
margin of profitability increases and profit
of the bank is increasing which is a good sign for bank.
41
Profitability/ Efficiency Ratio:

Some other profitability/efficiency ratios measured and interpret here.
2008
2009
2010
2011
2012
Non-interest income to Total Assets
0.01
0.01
0.01
0.01
0.01
Interest Ratio
0.66
0.69
0.64
0.58
0.6
Admin. Exp. To Profit before tax
5.46
10.76
9.19
2.55
2.24
Admin Exp. To non-Interest income
2.03
2.11
2.67
2.58
2.09
Return on Revenue (ROR)
0.04
0.03
0.03
0.08
0.1
Year
Profitability/ Efficiency Ratio
Efficiency ratio
12
10
8
6
4
2
0
2008
2009
2010
2011
2012
Non-interest income to
Total Assets
Interest Ratio
Admin. exp. to Profit

before tax
Admini Exp. to non
Interest income
Return on Revenue
(ROR)
Return on Revenue
(ROR)
Interpretation: During two consecutive years 2009 and 2010 its ratio of administrative
expenses to profit was high which is not a positive sign but now it is decreased even
below the ratio of 2008.This point show the efficiency of organization to cater its financial
problem. Its ROR is increasing it means bank is going to earn more profit.
42
Liquidity Ratio:
A class of financial metrics that is used to determine a company's ability to pay off its
short-terms debts obligations. Generally, the higher the value of the ratio, the larger the
margin of safety that the company possesses to cover short-term debts.
Year
2008
2009
2010
2011
2012
3.4
3.0
3.5
3.2
2.9
0.16
0.15
0.14
0.15
0.16
Investment to Total Assets
0.22
0.25
0.28
0.36
0.35
Advances to Total Assets
0.55
0.48
0.5
0.42
0.44
Total liabilities to Total assets
0.95
0.94
0.95
0.94
0.94
Liquidity Ratio
Current ratio
Cash and balance with bank to
total assets
Graphical Explanation
Liquidity Ratio
4.0
3.5
Current ratio
Cash and balance with

bank to total assets
3.0
2.5
Investment to Total
Assets
2.0
1.5
Advances to Total
Assets
1.0
0.5
0.0
2008
2009
2010
2011
2012
Total liabilities to Total

assets
Interpretation: Current ratio of the bank is satisfactory. This ratio which is subject to
seasonal fluctuations is used to measure the ability of an enterprise to meet its current
liability out of its current asset. This ratio is decreased in 2009 and 2012 and highest in
2010. It shows that the bank has high liquidity in 2010 and less power to meet its short
term obligation in 2007.Other financial ratios have shown a consistent manner. Bank is
not trying to minimize its TL to TA ratio which is almost same throughout the period. It
should be minimizing so TL not exceed TA.Which shows organizations excellent
position of liquidity.
43
Leverage Ratio:
Leverage ratio used to calculate the financial leverage of a company to get an idea of
the company's methods of financing or to measure its ability to meet financial
obligations. There are several different ratios, but the main factors looked at include
debt, equity, assets and interest expenses.
Year
2008
2009
2010
2011
2012
Capital Ratio
0.05
0.57
0.05
0.06
0.06
Deposit to Equity Ratio
17.64
14.7
15.87
15.57
15.11
EPS
1.14
0.71
0.72
2.6
3.38
Leverage Ratio
Leverage Ratio
20
15
Capital Ratio
10
Deposit to Equity Ratio
EPS
2008
2009
2010
2011
2012
Interpretation:
Leverage ratios of bank Alfalah shows that its financial value is enhancing. As we see
its EPS is increasing and from 2008 to 2012 the change in EPS is noticeable.
44
Cash flow Ratio:
This section of the financial ratio looks at cash flow indicators, which focus on the cash
being generated in terms of how much is being generated and the safety net that it
provides to the company. These ratios can give users another look at the financial health
and performance of a company
Year
2008
2009
2010
2011
2012
Cash flow to Profit after Tax
10.76
15.49
18.7
22.24
1.92
Cash flow to Current Liabilities
1.65
2.3
0.99
0.82
0.15
Cash Flow Ratio
Cash Flow Ratio

25
20
Cash flow to Profit after

Tax
15
10
Cash flow to Current

Liabilities
5
0
2008
2009
2010
2011
2012
Interpretation:
Cash flows are basically the cash inflows and out flows from the business many factors
involved in cash inflows as well as cash out flows. Cash flow to profit after tax ratio tel
us that whether we have availed all the opportunities for making profit or not.Cash flow
to current liabilities ratio is decreasing with the passage of time.
45
Future prospect of the Bank Alfalah Limited

The Bank Alfalah and Abu Dhabi Group are not looking to exit Pakistan through
divestment
or
sell
off
and
they
will
very
much
stay
in
Pakistan.
The CEO said, "The Bank is forcefully looking for growth opportunities in Pakistan, which
is evident from the growth of its branch network across the country." the detailed
overview of the Bank`s operations and future expansion plans, which started operations
in 1997 with just three branches and virtually no banking infrastructure is today the 6th
largest bank in Pakistan with 386 branches in 150 towns, over 400 billion rupees (48
billion
US
dollars)
in
assets
and
is
still
growing
rapidly.
The bank is planning to open 24 more branches and looking for opportunities to expand
foreign operations in Hong Kong & Beijing in addition to Bangladesh, Afghanistan, UAE,
and Bahrain.
The Bank also has the distinction of having the second largest Islamic Banking
operations in Pakistan. Commenting on the perception of higher interest rates being
changed by the banks in Pakistan, the CEO said that this issue requires more subjective
analysis because while the old and more established banks have low cost assets, new
comers of young banks such as Bank Alfalah have a much higher costs of deposits.
BALs reliable track record of strong performance in Pakistans competitive banking
sector has made it stand out as one of Pakistans most important banks and the flagship
investment of the Abu Dhabi Group in Pakistan. Bank Alfalah famous itself through the
introduction of inventive financial products including car financing which it introduced for
the first time in Pakistan.
46
Conclusion
Bank Alfalah (BAL) has made significant in building of strengthening both the corporate
and retail banking sectors in Pakistan.Bank Alfalah views specialization and service
excellence as the foundation of its strategy. The people of bank innovation, reliability,
creativity, customized services and their implementation are the key ingredients for their
future growth. Based on this approach, their Treasury Division and the Structured
Finance Unit have been geared to provide specialized services to the business
customers. Revenues from these activities have started yielding dividends and they
expect important growth in these areas in the coming years. While building on their in
depth awareness with their customers needs and expected developments in the
banking industry, the Retail and corporate areas of their processes will carry on to
provide a strong and stable base to the business of the Bank.
They are conscious that they have stepped into the 21st century and they must meet its
challenges by acquiring the highest levels of Technology. They will thus be accelerating
their enable them deal out their products and services through most competent and
modern resources. They say that they will invest in the modern tools and considerable
allocation of resources will be made to attain this objective during the current year.
Their program to commence real time on line Banking Services and introduction of ATMs
at strategic positions have been firmed up and it will be fully operational during the year
2001.Their focus would be to continually seek out development opportunities through
increased quality assets and by contribution a wider range of products and services to
their esteemed customers. There are significant growth opportunities for Bank Alfalah
and they are positive in their ability to grab them. They are committed to attract the
shareholders value and look forward with greater hopefulness to an affluent future for
Bank Alfalah Limited.
47
Recommendation and Suggestions:

After doing my summer internship at Bank Alfalah Limited, I would like to give some
recommendations to count over some problems.
Bank Alfalah should adopt appropriate strategies for promoting organization

citizenship behavior among its employees.
In Bank Alfalah, there is misdistribution of work; some people are over burdened
with the work. So I suggest that there should be fair distribution of work in all the
departments.
Bank Alfalah is only dealing in Money Gram; it should also starting providing the
service of other money transfer lines like Western Union.
In the presence of intense competition Bank Alfalah Limited has to realize the
importance of marketing.
The top management should immediately start thinking in terms of rotating the
employees in various departments, as this transforms work force into human
capital, if a particular individual keeps on employing his\her efforts in one sphere
of banking it would not only create a sense of monotony, but also not help
improving the skills of Bank Alfalah Limited employees.
Bank Alfalah has equipped its branches with all major IT tools being used in the
industry like ATM, fax machines, photocopiers, printers, latest computers and a
good connectivity architecture, however it has been observed that when its time
to work, there are many failures seen in the different devices used by
Bank Alfalah, especially its connectivity architecture and remains offline with the
main server, that creates problems for the customers.
As we all know concept of part time jobs offered to students is in practice in big
cities of Pakistan but it is experienced in Sahiwal. Bank Alfalah can give
competitive edge by promoting such practices.
New and innovative products should be brought in by Bank Alfalah, like other
banks develops for their customer. For this purpose, special teams should be
developed that include professional from all departments of the banks to come
with ideas.
48
Application of Classroom Learning in BAL

I have do the six weeks internship in BAL Sarwer Shaheed branch during these six
weeks I have learned many new things and also see the applicability of the bookish
concept and terminology in the bank. I have seen how the class room learning can be
applied to the particle work.
In accounting department I see the applicability in the promotion of balance sheet

income statement and profit and loss account.
Business communication helps in dealing with the customers to satisfy them and
heading their complaints.
Psychology helps to understand the mentality and the behavior of the customers.
Sociology also helps to create the affliction with the customers.
Time value of money and amortization table in financial management helps in
the credit department to calculate the amount of the loans.
Fundamentals of marketing and marketing management help to understand how

to promote the banking activates and to create the good will in the mind of the
customers.
Subject of management help me to learn about the culture of the bank

management style and decision making rules.
Subject of money and banking helps me to learn a lot of things about the bank
such as types of cheques, bouncing of cheques, types of customer and form of
money.
Economics helps me to learn about the interest rate and government regulations
about the banks.
Subject of ethics helps to see the organizational ethics and how to behave with
the employees and customers in ethical manner.
49
If I was the manager of Bank Alfalah Limited

If I was the manager of the BAL, Sahiwal then I will take few steps to improve the overall
working of the branch. These steps help to increase the reputation of the branch in the
eyes of the customers and employees as well.
The steps are as follows:
The sitting area of the customers should be enhancing so that they can find the
proper place to sit when they enter in the bank.
I will arrange the proper common room for the employees.

Employees should be going for the on job training to match their abilities with the
new and innovative technology.
Work should be properly divided in all the employees and the employees are
worked in their specialized area.
Decision making should not be centralized but the low level employees should
also take part in the decisions so that they also feel the proper members of the
branch.
Working of the bank requires too much mental work and the duration of the
working hours are also very long. so to refresh the employees mind there should
be some dinner party every six months or at least once in a year.
Schedule should be arranged for the internees in whom they know about their
working and the requirement.
Installation of good quality air conditioner.
50
Annexure
Bank Alfalah Ltd.
Summarized Income Statement
From the year 2008-2012
2012
2011
2010
46,079,918
44,298,178
37,530,256 35,561,312 30,966,638
27,500,056
25,687,485
23,855,448 24,654,180 20,494,355
18,579,862
18,610,693
13,674,808 10,907,132 10,472,283
1,848,535
18,64,510
2,243,687
3,694,546
2,035,997
1,708,833
24,59,294
1,991,192
317,164
1,479,062
1164
5696
25,504
59,817
28,298
3,558,532
4,329,500
4,260,383
4,071,527
3,543,357
15,021,330
14,281,193
94,14,425
683,56,05
6,928,926
2,536,717
2148239
1,986,470
1,913,004
2,116,818
Dividend income
349,061
191,708
204,425
248,217
300,943
Income from dealing in
1,309,703
111,541,7
1,133,544
1,019,732
914,845
1,328,000
140,093
77,609
688,924
424,261
1,511
-11,053
3,300
2,849
-181,571
Mark-up/ return/interest
2009
2008
earned
Mark-up/ return/interest
expensed
Net mark-up/interest
income
Provisions against
loans and advances
Provisions for
diminution in value of
investment
Bad debts written off
directly
Net mark-up /interest

income after provisions
Non mark up interest
income
Fee, commission and
brokerage income
foreign currencies
Gain on sale of
securities
Unrealized gain(loss)
on revaluation of
investment
51
other income
1,756,348
1,783,309
1,302,813
1,309,527
1,247,628
Total non mark-up
7,281,340
53,6771,3
47,08,161
5,182,253
4,822,924
22,302,670
19,648,906
14,122,586 12,017,858 11,751,850
15,204,236
13,832,096
12,578,080 10,932,507 9,805,790
(22005)
60,56
-1,419
28,582
130,504
183,161
93,040
__
_______
other charges
206,933
199,931
7,666,5
79,454
122,758
Total non mark-up
15,519,468
14,215,188
12,753,841 11,001,542 9,957,130
6,783,202
5433718
1,368,745
1,016,316
1,794,720
Current
3,141,909
3,263,249
842,232
1,066,301
1,730,051
Deffered
(754,828)
(1,377,661) (370,883)
(767,346)
(1,151,019)
Prior year
(160,000)
45,000
(971,056)
(179,674)
(85,613)
2,227,081
1,930,588
400,293
119,281
493,419
4,556,121
3,503,130
968,452
897,035
1,301,301
Un appropriated profit
5,248,059
241,586,0
2,690,728
3,447,457
4,851,840
29,695
296,95
29,695
24,696
24,586
9,833,875
5,948,685
3,688,875
4,369,198
6,177,727
interest income
Non mark-up interest

expense
Provisions against if
balance sheet
18.3
obligation
Provisions against
other assets
interest expense
Taxation
brought forward
Transferred from
surplus on revaluation
of fixed assets
Profit available for
appropriation
52
Bank Alfalah Ltd.
Summarized Balance Sheet
From the year 2008-2012
2012
2011
2010
2009
2008
58,044,054
50,882,662
41,197,841
35,056,012
32,687,335
26,720,993
17,424,487
16,179,255
22,722,639
21,581,043
876,870
7,765,407
6,497,556
14,947,435
3,315,500
Investment
189,486,762
166,531,768
113,425,861
99,159,957
75,973,238
Advances
233,933,358
198,468,512
207,152,546
188,042,438
192,671,169
Fixed assets
13,747,520
13,388,683
14,204,555
14,492,194
13,773,293
Defferd tax assets
384,601
421,825
_________
______
______
other assets
13,272,536
13,290,458
12,826,225
14,649,380
8,989,186
Total assets
536,466,694
468,173,802
411,483,839
389,070,055
348,990,764
Bills payable
8,430,910
5,403,453
4,521,533
3,766,144
3,452,031
Borrowings
21,227,834
18,168,978
13,700,124
20,653,921
13,690,222
Deposits and other
457,118,723
401,247,886
354,015,311
324,759,752
300,732,858
Subordinated loans
5,874,742
7,148,693
7,567,192
7,570,181
2,571,169
Liabilities against assets
________
________
______
______
_______
Defferd tax liabilities
________
________
115,919
179,851
208,465
other liabilities
13,567,087
10,427,754
9,258,216
10,006,786
11,291,280
Total liabilities
506,219,292
442,396,764
389,178,295
366,936,635
331,946,025
Net Assets
30,247,402
25,777,038
22,305,544
22,133,420
17,044,739
Share capital
13,491,563
13,491,563
13,491,563
13,491,563
7,995,000
Reserves
5,636,549
4,100,264
3,819,133
3,587,969
3,166,056
6,561,628
5,248,059
2,415,860
2,690,728
3,447,467
25,689,740
22,839,886
19,726,556
19,770,260
14,608,523
4,557,662
29,371,52
2,578,988
2,363,160
2,436,216
30,247,402
25,777,038
22,305,544
221,133,420
17,044,739
1,201,068
1,690,968
1,620,372
1,467,784
1,205,825
Assets
cash and balance with
treasury banks
Balance with other
banks
Lending to financial
institution
Liabilities
accounts
subject to finance lease
Equity
assets net of tax
depreciation expense

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DEPARTMENT OF BUSINESS

ADMINISTRATION, BZU, SUB-CAMUS,

Bahauddin Zakariya University,

Masters of Business Administration, 5th Semester

DEPARTMENT OF BUSINESS ADMINISTRATION, BZU, SUB-CAMUS, SAHIWAL | Internship Report

DEPARTMENT OF BUSINESS ADMINISTRATION, BZU, SUB-CAMUS, SAHIWAL | Internship Report

DEPARTMENT OF BUSINESS ADMINISTRATION, BZU, SUB-CAMUS, SAHIWAL | Internship Report

DEPARTMENT OF BUSINESS ADMINISTRATION, BZU, SUB-CAMUS, SAHIWAL | Internship Report

DEPARTMENT OF BUSINESS ADMINISTRATION, BZU, SUB-CAMUS, SAHIWAL | Internship Report

DEPARTMENT OF BUSINESS ADMINISTRATION, BZU, SUB-CAMUS, SAHIWAL | Internship Report

Banking Sector in Pakistan

A Legacy of Public Control (1970 1980): Commercial banking grew favourably

DEPARTMENT OF BUSINESS ADMINISTRATION, BZU, SUB-CAMUS, SAHIWAL | Internship Report

Ushering in the Reforms (1997 2006): After privatization, transformational

Banking In Pakistan The Long Journey Ahead: Much still remains to be

DEPARTMENT OF BUSINESS ADMINISTRATION, BZU, SUB-CAMUS, SAHIWAL | Internship Report

Introduction to Bank Alfalah Limited

About Bank Alfalah Limited

To get maximum share of the market

To reinforce a corporate culture that fosters learning, creativity and flexibility.

DEPARTMENT OF BUSINESS ADMINISTRATION, BZU, SUB-CAMUS, SAHIWAL | Internship Report

Associated Companies of the Group:

Corporate Citizenship: Responsible Finance and Sustainability through a Beyond

DEPARTMENT OF BUSINESS ADMINISTRATION, BZU, SUB-CAMUS, SAHIWAL | Internship Report

Product and Services Portfolio

Product and Services portfolio of Bank Alfalah Limited is spread over:

Basic Banking Account (BBA account)

Simple saving account

Foreign Currency Current Account

DEPARTMENT OF BUSINESS ADMINISTRATION, BZU, SUB-CAMUS, SAHIWAL | Internship Report

o Bancassurance: Bank Alfalah Limited Bancassurance solutions are specially

Cash over Counter: Remittance can be collected in cash of up to Rs. 500,000

Pay Order/ Demand Draft: If an account is maintained with a non-RTGS

DEPARTMENT OF BUSINESS ADMINISTRATION, BZU, SUB-CAMUS, SAHIWAL | Internship Report

2. Corporate and investment Banking:

The following services are part of Capital Market Operations;

Bankers to the Issue for Initial Public Offerings (IPOS)

DEPARTMENT OF BUSINESS ADMINISTRATION, BZU, SUB-CAMUS, SAHIWAL | Internship Report

o Investment Banking: Our seasoned Investment Banking team is fully equipped

Leveraged and Structured Finance

Secondary Market Trading of tradable instruments

Primary Dealer of Government Securities: BAL has been appointed by State

o Derivatives and Structured Products

DEPARTMENT OF BUSINESS ADMINISTRATION, BZU, SUB-CAMUS, SAHIWAL | Internship Report

a. Fund Based Relationships

o Business accounts: BAL Business Banking team is committed to working in

o Business Loans: At times, businesses can experience challenges with an

DEPARTMENT OF BUSINESS ADMINISTRATION, BZU, SUB-CAMUS, SAHIWAL | Internship Report

Alfalah Savings Account

The ultimate objective is

multipronged; firstly, to enable individuals to conduct transactions through a wider

DEPARTMENT OF BUSINESS ADMINISTRATION, BZU, SUB-CAMUS, SAHIWAL | Internship Report

6. Self Service Banking

o E-Statements: With Bank Alfalahs e-statement service, customer can receive

DEPARTMENT OF BUSINESS ADMINISTRATION, BZU, SUB-CAMUS, SAHIWAL | Internship Report

Conventional Banking by Bank Alfalah Limited

DEPARTMENT OF BUSINESS ADMINISTRATION, BZU, SUB-CAMUS, SAHIWAL | Internship Report

1. Account Opening Department:

Functions of Account Opening Department:

One customer relationship form (CRC).

DEPARTMENT OF BUSINESS ADMINISTRATION, BZU, SUB-CAMUS, SAHIWAL | Internship Report

Identity cards photocopies of all partners.