Internship Report on Bank Alfalah ltd.

2011

Submitted to:

Muhammad Shahzad Ghafoor

Lecturer
Department of Management Sciences
COMSATS Institute of Information Technology, Lahore
email: shahzadghafoor@ciitlahore.edu.pk
phone: 042 111 001 007

Submitted by:
Syed Junaid Ahmad Shah
FA10-MBA-092
01-10-2011

COMSATS Institute of Information Technology

M. A. Jinnah Building Defence Road, Off Raiwind Road, Lahore
E-Mail: pro@ciitlahore.edu.pk
Tel: +92 (42) 111-001-007
Fax: +92 (42) 99203100

Preface

I nternship is an integral part of MBA programme. For the sake of internship the
most initial thing is to have a practical experience. This effort may get a student
to get a practical experience if right organization is selected. During the
internship, a student comes to particle knowledge. He/she learns what he has
studied so far. As an MBA student I have also done my internship at Bank
Alfalah Limited main branch Lodhran. Here I come to know a different and very
interesting experience of learning and working with people. First of all I will tell
you about Bank then operations of different department.
Acknowledgement

I
am grateful to almighty Allah, the most Gracious, and the most merciful for enabling me to
accomplish this task successfully. I feel much obliged to my parents, whose prayers and good
wishes have enabled me to reach this stage. I am thankful to my teachers, for his help, advice,
and guidance during studies. I would also like to say thanks to the staff and management of
Alfalah bank ltd for their cooperation and help. I am also thankful to all other people who
contributed their time & efforts in this regard.
Regards,
SYED JUNAID AHMAD
Dedication
To my loving Parents

Table of Contents
Executive summary. 7
Chapter 1
Evolution of banking8
Banking in Pakistan..10
Introduction to bank Alfalah.12
Management..14
The vision15
The mission15
The philosophy..16
Branch network.18
The board21
Features.22
Chapter 2
Alfalah car..24
Account opening25
Cash department..36
Clearing department37
Remittance department...39
Accounts department43
Chapter 3
Swot analysis45
Recommendations..46

Marketing practices.47
Conclusions.48
Financial analysis50
Executive Summary
This is the detailed report about Bank Alfalah where I did my internship for six weeks. In this
report there is complete history of banking as well as bank Alfalah ltd. Bank Alfalah is a
company backed by Abu Dhabi, it was formed in 1998. Now a days bank Alfalah is counted in
Pakistans top 5 banks. It has also won brand of the year award in 2008. It has two types of
banking conventional and Islamic banking. It has almost every department like cash, remittance,
accounts, finance, agri finance, account opening, human resource, and car finance. In this report I
have added swot analysis, recommendations, conclusions, and details of the departments which
are present at that branch where I did internship.

Evolution of Banking
It has not so far been decided as to how the word Bank originated. The explanation of this
origin is attributed to the fact that the Jews in Lombardy transacted the business of money
exchange on branches in the market place and when the business failed, the people destroyed the
Bank. Incidentally, the word bankrupt is said to have been evolved from this practice. The
opponents of this opinion argue that it was so, then how is that the Italian moneychangers were
never called Banchierei in the Middle Ages?
Other authorities hold the opinion that the word Bank is derived from the German word back
which means joined stock fund. Then Back was Italianize into Bank.

Early Growth
Banking in fact is as primitive as human society for ever since man came to realize the
importance of money as a medium of exchange. Perhaps it was the Babylonians who developed
banking system as early as 2000 B.C. It is evident that the Temples of Babylon were used as
Banks because of the prevalent respect and confidence in the clergy.
King Hamurabi (1728 1686 B.C), the founder of the Babylonian empire, drew up accede
wherein he laid down standard rules of procedure for banking operations by temples and great
landlords. He got his code inscribed on the block of diorite about 8 feet tall, containing about 150
paragraphs which deals with nearly all aspects of loans, interest, pledges, guarantees, natural
accidents, loss, theft etc. Later on Sumerians, Babylonians, Hittites and Assyrians standardized
the values of the goods in silver, copper and bronze.
In 1401 a German public bank was framed comprising the operations of discounting and
transferring of money. By the 16th century, some more public banks were

Formed in Venice, Milan, Amsterdam, Hamburg and Nuremburg. In order to streamline Banking
organizations and techniques, conferences were held in Nuremburg from 1548 to 1551 and it was
agreed that the commercial interest of the time needed a bank with facilities of growth and
transfer but it should not be a bank run by private individuals. Ultimately in 1587, a State Bank
under the name of banco DI rialto was formed in Genoa. Later the bank of Amsterdam was also
formed in 1609. This Bank had a guarantee by the State and rendered valuable services to the
Netherlands traders up to the year 1795.
Similarly in 1690, the Bank of Hamburg came into existence in Hamburg with the business of
accepting deposits of fine silver or of foreign money and to run accounts on these deposits. This
Bank rendered great service to the merchants as well as countries it dealt with until 1873, when it
was merged with the Reich bank. By the year 1700, the bank of England was not only issuing
notes but also conducting accounts for customers. Its directors were conducting the business like
that of limited companies. The bank had the monopoly of issuing banking notes. Upto 1813 or
there about in England, the main profit of bank was derived from the circulation of notes.

Development of Modern Banking

In 1918 came into being eleven clearing banks of today. The effect of this historical development
of banking in England has been fairly wide. First, emergence of a small number of large banks
with wide network of branches. Second, increase in the popularity of bank accounts and a largescale use of cheques.

In 1946, the labor government nationalized the bank of England and transferred the
existing stock to the nominee of British treasury. In 1955, the British Banks made a
departure from traditional banking by undertaking hire-purchase finance for companies
buying industrial plants and machinery and took interest on hire-purchase finance.

Banking in Pakistan
At the time of independence, there were 631 offices of scheduled banks in Pakistan, of which
487 were located in West Pakistan alone. As a new country without resources it was very
difficult for Pakistan to run its own banking system immediately. Therefore, the expert
committee recommended that the Reserve Bank of India should continue to function in Pakistan
until 30th September 1948, so that problems of time and demand liability, coinage currencies,
exchange etc. be settled between India and Pakistan. The non-Muslims started transferring their
funds and accounts to India. By the end of June 1948 the number of officers of scheduled banks
in Pakistan declined from 631 to 225. There were 19 foreign banks with the status of small
branch offices that were engaged solely in export of crop from Pakistan, while there were only
two Pakistani institutions, Habib Bank of Pakistan and the Australasia Bank. The customers of
the bank are not satisfied with the uncertain condition of banking. Similarly the Reserve Bank of
India was not in the favour of Govt. of Pakistan. The Govt. of Pakistan decided to establish a
full-fledge central bank. Consequently the Governor-general of Pakistan Quaid-E-Azam
inaugurated the State Bank of Pakistan on July 1, 1948. Thus a landmark was made in the history

of banking when the state bank of Pakistan assumed full control of banking and currency in
Pakistan.
The banking structure in Pakistan comprises of the following types.
1)

State Bank of Pakistan.

2)

Commercial Bank of Pakistan.

3)

Saving banks.

4)

Co-operative banks

5)

Specialized credit institutions.

Up to December 31, 1973, there were 14 Pakistan commercial banks that functioned all over the
country and in some foreign countries through a network of branches. All these commercial
banks were nationalized in January 1, 1974, and were recognized and merged into the following
five banks:
1)

National Bank of Pakistan

2)

Muslim commercial bank limited

3)

Habib Bank Limited

4)

United Bank Limited

5)

Allied Bank of Pakistan

The state bank of Pakistan is the Central bank of the country and was established on July 1,
1948. The separation of East Pakistan and its repercussion in the form of economic depression
has caused a lot of difficulties to the banking system in Pakistan. The network of bank branches
now covers a very large segment of national economy. The numbers of branches have increased
appreciably and there is now on branch of bank for every 3000 heads of population
approximately. There is done reasonable growth in deposits from the establishment of Pakistan.
Besides this growth, specialized credit and financial institutions have also developed over the
years.
The Government of Pakistan in the late 90s introducing the need for the privatization of state
owned banks and companies. The private sector has accepted the challenge and most of the
banks are privatized today. The State Bank of Pakistan issues the shares of these periodically.
Bank employees and other common peoples can also purchase these shares and earn profit.
Introduction to Bank Alfalah Ltd

Bank of Credit & Commerce International (BCCI) was a Pakistan based bank, established by Mr.
Agha Hassan Abdi from UBL, in association with U.A.E and Europe. BCCI has its branches in
74 different countries of the world. It had its 3 branches in Pakistan. In 1991, the BCCI was
banned, when was accused by European countries that the bank was involved in some illegal
operations with Gulf countries. The major reason behind European accusation was that BCCI
was of Islamic mode. Therefore, the bank was closed due to international pressure. Then, its 3
Pakistani branches were taken over by the Government of Pakistan, which were named as Habib
Credit and Exchange Bank (HCEB) and these were working as subsidiary of Habib Bank
Limited.
Following the privatization in July 1997, Habib credit and Exchange Band assumed the new
identity of Bank Alfalah on February 25, 1998. It is now Abu Dhabi based bank as the family of
Sheikh Nahayan Mubarik Al-Nahayan purchased 70% of its shares and 30% shares remained
with Habib Bank on behalf of Government of Pakistan.
Charged with the strength of Abu Dhabi consortium, and under the leadership of His Highness
Sheikh Nahayan Mubarik Al-Nahayan, Minister of Higher Education and Scientific Research,
Government of Abu Dhabi, and a prominent member of Royal Family, the bank is energized with
the vision, envisaging the development of various sectors in Pakistan.
Since the inception of Bank Alfalah, by the grace of the Almighty, we have moved rapidly in
expanding our branch network and deposit base, along with making profitable advances and
increasing the range of products and services. We have made a break-through in providing
premier services at an affordable cost to our customers.
Keeping in view our valued clients and the need for constant and effective communication of
information, we have designed this website to be as user-friendly as possible.
As we pursue the path of excellence, customer satisfaction remains our priority. It is only when
we know our customers better, can we deliver a higher quality of services, thereby adding
synergy to our existing management expertise, financial strength and profitability.
This is yet another channel of communication for the delivery of quality products and services
that enhance value to our stakeholders.
H.E.Sheikh Hamdan Bin Mubarak Al Nahayan

Management

Mr.Mohammad Saleem Akhtar

Chief Executive Officer

Mr. Parvez A. Shahid

Executive Incharge
Strategic Planning & Global
Marketing
Mr. Bakhtiar Khawaja
Executive Incharge
Human Resources Division
Mr. Mohammad Yousuf
Executive Incharge
Credit Division

Mr. Ather Shehab

Executive Incharge
Establishment &
Administratration
Mr. Shahid M. Murtaza
Executive Incharge
Business Development
Division
S.A.M./ Car Finance/ Leasing
Mr. Mohammad Iqbal
Saifee
Executive Incharge
Audit & Inspection Division
Mr. Adil Rashid
Executive Incharge
Cards Division

Mr. Sirajuddin Aziz

Executive Incharge
International &Treasury
Division
Mr. Asad Jamil
Executive Incharge
IT Division
Mr. Shakeel Sadiq
Executive Incharge
Corporate Banking &
Home Finance.
Mr.Mahmood Ashraf
Executive Incharge
Credit Monitoring
Division
Mr. Hamid Ashraf
Executive Incharge
Legal Affairs Division.

Mr. Zahid Ali H.

Jamall
Executive Incharge
Finance Division
Mr. Ijaz Farooq
Executive Incharge
Islamic Banking
Division

The Vision
Our vision is to be a leading financial institution, with a niche in areas where we have a
competitive advantage with complete banking solutions. Our focus is on improving performance
in each of our businesses to achieve consistent and superior returns for kour highly valued clients
and stakeholders.

The Mission
Our mission is to maintain a competitive edge in quality banking, customer service and profit
performance. Our activities are geared towards making Bank Alfalah a responsible corporate
citizen. The emphasis on Quality & Innovation will remain our key mission statement. We will
continue to strengthen our position as the leading provider of quality financial services in
Pakistan.

The Philosophy
Excellence in service

Quality performance
Product innovations

Bank Alfalahs Slogan

Lets Look Ahead Towards A Brighter Future Together.
Bank Believes

Every door leads to our customers.

The legacy of leadership stands as our guiding light.

The strength of chain relies on the strength of each link.

A keen ear is a key to understanding. Achievement is nothing without target.

Time is our most valuable asset.

Performance is nothing without the ability to measure it.

Every drop counts.

Present Status:

Despite adverse economic conditions of country, the year 2000 was a milestone for the bank,
both in terms of growth and profitability. The banks pretax profit for the year grew by 12.96% to
Pak Rupees 20.48 billion, an increase of 29.50 %, with a balance sheet footing of Pak Rupees
27.57 billion compared to previous years figure of Pak Rupees 21.02 billion.

After doing successful business in year 2000 to 2003, Bank Alfalah is now looking forward
positively towards the future and its management is confident to build on the
gains realized during 2003. Currently bank is emphasizing on expanding its operations to meet
clients needs and for this purpose management has plans to add more branches to existing
network in the coming years. Bank has already started its working to go internationally and its
future target markets include UAE, Bahrain, Bangladesh and Sri Lanka.
Technological developments are opening up new vistas of solutions for distributing traditional
financial products. Concurrently, rapid change in customer preferences has resulted in a major
shift from manual to automated services. Information Technology today, is all pervading in the
corporate world. Bank Alfalah made heavy investments towards enhancing its capabilities in the
area of automation and information technology. Information Technology department of bank has
successfully developed an advanced computer program named BANK SMART.
Another success of bank is in the area of foreign trade. Bank has developed excellent business
and correspondent relations with renowned banks of the world whose support in terms of lines of
credit has enabled it to handle ever-growing trade volumes.
From above stated facts it is very clear that bank has made remarkable achievements within a
short period of time despite being in the nascent stage. With its key indicators of progress already
soaring to new heights, the bank is committed to put all its energies, resources and time to bring
higher value and satisfaction of its customers, employees and shareholders.

Competitors
Despite notable economic uncertainties, the financial strength of Bank Alfalah Limited has
greatly enhanced during the previous years. The successful expansion program proved their
capability and commitment in comparison with the competition in the financial sector. The
Banking structure in Pakistan comprises of:
v Central Bank
v Commercial Banks
v Investment Banks
v Development finance Institutions (DFIs)
v Specialized Banks
v Foreign Banks

Bank Alfalah is a private commercial bank so the major competitors of Bank Alfalah are the
following:
v Muslim Commercial Bank
v Standard chartered
v Soneri Bank Ltd
v Prime Commercial bank
v The bank of Punjab
v Bank Al-Habib Ltd
v ABL
v Faysal Bank Ltd
v NIB
v Arif Habib Rupali Bank Ltd.
Branch Network
Bank Alfalah has near about 210 branches in Pakistan. Detail is as under:

Karachi

Main branch, B.A. Building, I.I. Chundrigar Road

Cloth market branch

Karachi Stock Exchange Branch

Clifton branch

Shahrah-e-Faisal Branch

P.E.C.H.S Branch

Timber Market Branch

Defense Housing Authority Branch

Gulshan-e-Iqbal Branch

Jodia Bazar branch

Korangi industrial area branch

M.A. Jinah Road Branch

North Napier Road Branch

S.I.T.E Branch

Paper market branch

North Karachi branch

Lahore

Gulberg branch
Defense branch

Circular road branch

Township branch

LDA Plaza branch

Badami bagh branch

Allama Iqbal Town Branch

Shah Alam Market Branch

Rawalpindi

Mall road branch

Satellite town branch

Peshawar City Branch

Peshawar
Peshawar Branch

Multan

Main Branch Abdali Road

Hussain Agahi Branch

Vehari Road Brach

Chowk Shaheedan Branch

Other Branches
Other branches are in:

Hyderabad
Sukhar

Rahim Yar Khan

Sialkot

Islamabad

Jehlum

Quetta

Mingora, Swat

Mian Channu

Faisalabad

Gujranwala

Sargodha

Bahawalpur

Dera Ghazi Khan

Gujrat

Sahiwal 0404456855

Sadiqabad branch

Mardan

Lodhran

Now, Bank Alfalah is going to establish its branches in some foreign countries.
The Board
The list of Board of Directors of Bank Alfalah Limited is as under:

H.E.Sheikh Hamdan Bin Mubarak Al Nahayan

Mr. Abdullah Khalil Al-Mutawa.

Mr. Omar Z. Al-Askari.

Mr. Naeem Iqbal Sheikh.

Mr. Ikram-ul-Majeed Sehgal.

Mr. Muhammad Saleem Akhtar.

The Core Group

In the core group, there are 2 committees, i.e,

Board Advisory Committee.

Executive Committee.

Board Advisory Committee

Mr. Omar Z. Al-Askari.

Mr. Abdullah K. Al Mutawa.

Mr. Ganpat Singhvi.

Mr. Bashir A. Tahir.

Executive Committee

Mr. Mohammad Saleem Akhtar.

Mr. Ikram-ul-Majeed Sehgal.

Mr. Parvez A. Shahid.

Mr. Tanveer A. Khan.

Mr. Mohammad Yousaf.

Mr. M. Waqas Mohsin.

Auditors

A.F. Ferguson & Co.

Chartered Accountants.
Features

Bank Alfalah Limited is well established bank. It has some special features with the help of those
it is growing rapidly.

Good Work Environment

As the work environment plays a great role in this competition age, so the bank has good work
environment. All the people work with cooperation; managers are so kind that each problem can
be discussed with them.
Efficiency
Employees at Bank Al-Falah are quite efficient. As Lodhran branch is a new one, its
employees have to bring their bank among the list of good banks. Therefore, they work
more than their working hours and it is all according to their will. It also shows their
loyalty, commitment to organization.
Customer Services
All the customers are entertained individually. Same kind of behavior and attention is given to all
the customers.
Suggestions Asked From Customers
Getting ideas for improvement from customer side is a new idea and that is working very well in
Bank Alfalah Ltd. All the customers are asked to fill a suggestion form and the standards of the
bank are improved through them.
Employee Benefits
Employees are given the benefits like bonus, gratuity funds, loans, increments, house rent,
medical and conveyance.

Computerized Working Environment

In bank, all the work is done on computers. All the entries are made in computer. Balance are fed
into the computer. This increases efficiency of the bank. All the branches are centrally controlled
through LAN settings. It helps them to co-ordinate more easily for making efficient and fastest
consumer services.
Alfalah Car

Its a scheme that enables one to own his desired car at easily affordable and flexible installments
with a minimum down payment and insurance.
Salient Features

Lowest Financing cost available in the market

Tenure of 1 to 5 years as per individual requirement

Quickest processing

Minimum processing charges: Rs. 3000 payable once

Down Payment requirement of 25%

Repayment through monthly installments

Lowest Insurance rates available from banks approved insurance companies

Account Opening Department

Borrowing funds from different sources has become an essential feature of todays business
enterprises. But in the case of bank borrowing funds from outside parties is more vital because
the borrowed capital of a bank is much greater their own capital. Banks borrowing is mostly in
the form of deposits. These deposits are lent out to different parties such deposit creation is done
through open an account in the bank.
The Bank does not make payment of a cheques bearing a six-month or older date. If an account
is not operated in six months, it is called Dormant Account.
Types of Account

Current Account.

Saving Account.

Royal profit Account

Alfalah Kifayat Account

Alfalah Mahana Amdan plus

Basic Bank Account (BBA)

Alfalah Kamyab Karobar

Procedure of opening Account

The procedure of opening the account is as given under:
1. Account Opening Form:
First of all, the customer fills the account opening form (AOF). Filling of account opening form
includes type of account, currency of account, name, and address, signature of customer and
signature of introducer and attach a photocopy of national identity card. He also signs an
undertaking that he will follow the rules and regulations of the bank.
2. Introduction:
The signature and account number of the account holder introducing the account to the new
person is obtained on the account opening form.
3. Specimen Signature Card:
The signature of the client is obtained on a specimen signature card (S.S Card). The card is
obtained with two signatures from the customer. Every time a cheque is received for payment
from the client, the signature on the cheque is verified by comparing it with S.S Card.
4. Requisition slip
A requisition slip for Cheque book is also given to the customer. The
gives it to the account opening Officer.
1. 5.

customer fills it and

Know Your Customer Form

Every account holder fills this form. The basic purpose of this form is to get some basic
information about the customers business and source of incomes.
6. Account Number:
When all the formalities are completed, an account number is allotted to the customer and all the
information is entered into the computer and register. Then that account number is written on S.S
Card and account opening form.
7. Depositing of amount in account:
The client deposit cash in the account. For this purpose cash pay-in-slip is used. The minimum
initial deposit is fixed for each account according to the nature of account. For example for PLS /
saving account the minimum requirement is Rs.100 only.

8. Issuance of a Cheques Book:

After opening an account with the bank, the account holder makes a request in the name of the
bank for the issuance of a Cheque book. Such a request is known as Requisition Slip. BAL issues
Cheque books from 10 leaves to 50 leaves. When he used this book completely then he can apply
for another known as subsequent Cheque Book. This process takes a day because the Cheque
books come from the Karachi head office.
9. Entry of Cheques Book:
Before issuance of a Cheque book the bank stamp every leaf with the account number of the
customer, enter it in the cheque book register and computer and issues the cheque book to the
customer after his signature on the register.
10. Letter of Thanks:
A letter of thanks is prepared. One letter is for the customer and one for the introducer. One copy
is send to the customer and the other copy is kept in the record along with other documents.
Amendments/Changes in Accounts:
BAL provides the facility of amendments in accounts, whenever required by the customers.
Account holder gives an application along with necessary documents to the bank. Then the
amendments are made in the account of the depositor. These amendments can be made by filling
certain application forms. These forms are as follows:
v Change of Address Form
To change the address of the account holder
v Change of signature form
To change the signatures of the customer.
v Liability / Inquiry Form
This form is used if some person has acquired loan from the bank and he wants to close his
current account, then he fills this form and this form is send to credit department. When the
credit department declares him free from any debt obligations then his account is closed.
v Vernacular Form
This form is used when some person wants to sign in any language other than English.
v Mandate To The Third Party To Operate The Account

This form is used to enable any third party to operate the account.

Closing of Accounts
The procedure of closing of account is as follows.

First of all the customer gives the request to close the account.
His signatures are verified.

He withdraws all his money from his account but in case of current account Rs. 150 is
deducted as a charge of closing the account.

A liability form is send to the credit department if he has taken a loan from the bank. If
he is cleared from all the liabilities then further proceeds are taken.

Permission is granted by the authorized person (the manager).

Account is closed in the computer system.

His specimen signature card is attached with the account opening form and marked
closed.

Types of accounts

Current Account
There is no interest on these accounts. It is only for transaction purposes. They paid on demand.
Where a banker accepts, paying all checks drawn against him to extend of the balance in the
accounts. As there is no profit paid on this account, it is also called checking account because
cheque can be drawn on it. Current account is mostly opened for business. The minimum balance
requirement for opening the current account is Rs. 5000.
PLS Saving Account
The purpose of this account is to introduce the habit of saving individuals in the neighborhood.
The profit on saving accounts is paid on the basis of profit and loss sharing at 5 % p.a. The
minimum balance requirement for opening the account is Rs.100.
Term Deposit
A term deposit is a deposit that is made of a certain period of time. At the end of specific period
the customer is allowed to with draw the principal amount. The rate of return of this account
varies from 8 % to 13 %. The term deposit account varies from one month to 5 years and the
minimum balance requirement is Rs. 5000.

Profit Calculation Methods

Daily Product Basis
Deposited Amount Rate of return/.
365 (No. of days in a year)
Average Balance
Sum of daily end Balance
Rate of return
No. of days in month
Account Opening Procedure
For opening of an account, there are different types of account holders are required for all these
types. The operation/procedure requirement that is needed for Individual Account differs
greatly from the Joint Accounts proprietorship A/C, Partnership A/C, Private Limited
Company A/C and Public Limited Company A/C.
Individuals Account
When a single man or woman opens an account in his or her own name and has the right to
operate, it is called individual A/C.
Documentation

Copy of National Identity Card.

Proof of Income

Proper Identification (Introduction).

Operations

The person place in the type of account and type of operation required in the account
opening form.

He/she fills in part 1 of the form, a fix his/her either two of four similar signature ( or
thumb expression in the signature space ) and get it introduced and signed by a person
who already has an account with the bank and write his account number in the specific
rows in a specific space.

The person fills his or her father, mother, husband/wife or any other relatives name,
his/her address, phone number, his or her sign to certify this requirement. This
requirement is needed because in his/her absence bank can have correspondence with a
specific person.

The person deposits the initial amount for opening account onto the cash counter. The
person put his signature on form on two places in authorized Signature and fills in the
Title of Account space by writing his name.

If the person put his signature in Urdu or any other language other than English, he
signed a Vernacular Form.

If the person has changed its signature then he must have to sign the signature change
undertaking.

The next step is entering in compute r because the centralized account opening structure
and generation of account number.

Joint Account
When two or more persons neither partners nor, trustees, open an account in their name is joint
account.
Documentation

Copy of N.I.C card.

Income proof of both account holders

Identification (Introduction).

Operations

The person checks the type of account and type of operation required in the respective
box on the form.

The person fills the Part-1 and Part-II

Signature of box or all persons are obtained on the formed in the area specified for
signature.

In the title of account space names of all persons maintained.

Account holders specified in the form that they will operate the form singly or jointly.

Proprietorship Account

When the owner of the firm operates singly, account is opened in his firm name.
Documentation

Copy of N.I.C.
Status of the firm.

Copy of Sole Proprietorship Declaration.

NTN certificate

Proof of Business

Operations
All operation remains the same, except that the firm name is written in title of account area and
Signature of the proprietor in the specified area.
Partnership Account
The account is opened in the firm name and all partners designate one or two persons to act
behalf of the partnership firm all acts of the firm jointly and severely.
Documentation

Copy of N.I.C of all partners.

Status of the firm ( In case of registered firm ).

The attested copy of Partnership Deed (in case of registered firm ).

Operation of the A/C (as per deed).

Partnership mandate

Letter showing the authority of one or more partners to act on.

Form C for the registered firms

Next of kin is not allowable in that type of accounts.

Operations
All other requirements are same except that all partners dully sign the form, cards are signed by
all of those partners who will act on behalf of the firm.
Operating instruction is very important for the described case that who will be operating the
account.

Private Limited Company Account Documentation

N.I.C of all partners.

Certificate of incorporation

Certificate of commencement of business

Articles and Memorandum of association.

List of directors.

Corporate mandate duly signed by the directors

Copy of NTN certificate

Form (A) showing the changes in share capital and share holders

Account opening Request on letter head of the organization

Resolution of Board of directors

Power of attorney if any.

Certificate of Incorporation Form 29 (B) (Lasted Copy).

Companys letter head

Embossed seal

Company secretary will certify all these copies.

Operations

The person authorized in the resolution of the board of directors put their signature on the
S.S Card.

Next of Kin requirement is not need in a case of Private Limited Company. Other
procedure is same.

After completing each and every formalities are signed by all partners who will act on
behalf of the firm.

Public Limited Company Account Documentation

Copy of N.I.C of all partners.

Articles and Memorandum of association.

List of directors.

Resolution of Board of Directors.

Certificate of commencement of Business.

Operations
Operation is same as Private Limited Company

Alfalah Kamyab Karobar

This account is mainly used for business purposes. It is just like current account the difference is
if average balance is maintained at Rs. 25000 then remittance, online, and all next cheque books
are free.
Cheque Book Issuance
When the account is opened then within one week you will receive letter of thanks from bank
after this you will go to the bank and they will issue a cheque book. Without letter of thanks bank
will never issue you cheque book.
Bank Alfalah Issues the Following Cheque book Denominations:

10 leaves

25 leaves

50 leaves

.
Cash Department
Mr. Shahzad helped me in learning about Cash Department. Cash Department performs two
main functions and other subsidiary functions:

Cash Deposits

Cash Payments

Online Cash Receipts & Payments

Cash Deposits
Cash receiving officer receives cash along with pay-in slip from the customer. He checks if the
deposit slip is properly filled up containing title of account, account number, date and amount in
word and figures. He also verifies signature. Detail on both counter file and cash receipt voucher

should be the same. Cash is received by the cash receiving officer, twice counted and matched
with the deposit slip. The cash details are written on the back of the deposit slip and are also
entered in cash receiving register. Cash received stamp is affixed on the face of the deposit slip
along with the signature of the cash receiving officer.
Deposit slip and cash receiving register is given to the officer in cash department. Again proper
scrutiny is made by the officer cash department both on cash receipt and cash receiving register.
Officer cash department signs both the deposit slip and register; Deposit slip is credited and
posted in the concerned account in the system.
Payment of Cheques
The process for payment of cheques for local and foreign currency is same. First the customer
presents the Cheque or holder to branch and the particulars of cheques are properly filled in.
Signature of the holder is taken on the back of the cheques. Cheque handed over to the officer
cash department for scrutiny where 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 and then the officer
cancels cheque. It is posted in the system and posting stamp and number is affixed on it. Cheque
is handed over to the cash payment officer for payment. One more signature on the back of the
cheque is taken from the holder to match with the first one, and then cash is paid to the payee.
Cash detail is written on the back of the cheque. Cash paid stamp is affixed on the face of the
cheque. Entry is passed in the cash payment register.
If the payment is of Rs. 50000 the cashier can make it on its own. If the amount is greater than
Rs. 50000 the cashier and cash deposit Incharge will verify the check and will sing it. Then the
payment will be made. Otherwise the payment will not be made.
Clearing Department
In clearing, Mr. Tahir proved so helpful. The clearing process majority involves receiving the
cheques and making payments. This process can be inward or outward.
Clearing Process (Inward/Outward)
Here the local Cheques are received that are drawn on BAF. All the cheques are received on one
counter along with the paying slips duly filled in properly containing particulars of cheques and
account harder. Counter folio of paying slip is handed over to the customer by putting stamp for
#cheque received for collection for Bank Alfalah on it duly signed by officer. These Cheques are
scrutinized and cheques for local clearing are separated from OBC. These are then entered in
clearing register and cheques for collection, are entered in OBC register and handed over the
Bills Department for collection.
Clearing officer checks and verifies title of all the cheques deposited by the customers to confirm
the good title of the cheques. Cheques are scrutinized properly and paying slips are separated
from cheques. Special crossing, endorsement and clearing stamps are affixed on the cheques.

Cheques of each bank are sorted and arranged branch wise. All the cheques are then entered into
the clearing system of the bank. Print out of the clearing is taken and details are attached with the
cheques of each bank. Details of these banks are then entered into the clearing schedule
containing number of cheques presented and their total amount against the name of each bank.
Then total number of cheques presented to all banks and their total amount is written on the foot
of that schedule, which is tallied with the clearing register.
Next morning, these cheques are delivered to the respective banks through NIFT in clearing
house of State Bank of Pakistan between 9:00 to 9:30AM. In the same manner, other banks
present their clearing drawn on Bank Alfalah. Total number of cheques and their amount
delivered to other banks and received from them are written on the Clearing House schedule
branch for their payment. After proper scrutiny of cheques, verification of signatures and
confirmation of balance in the account, the Officer Cash Department pays these cheques by
canceling and posting them in the system.
If any cheque is not passed due to insufficient balance or any other reason, Officer clearing
Department returns the same cheque by attaching a cheque return memo containing reason for
return. This cheque is entered into the cheque returned register and bank charges are deducted
according to the schedule of charges.
Second clearing is called at 2:30PM to check the fate of the cheques presented to other banks in
the morning. If any cheque is to return, that is delivered to the same bank in second clearing. In
the same manner, if any cheque presented by Bank Alfalah in first clearing is returned, they
receive it and once again give schedule of clearing figure to the Officer Clearing House SBP
containing number of cheques and their amount delivered and received unpaid.
Remittances Department
The need of remittances is commonly felt in todays business. The main function of remittance
department in a bank is the transfer of funds.
Mr. Tahir in Bank Alfalah is the officer for Remittances Department. In remittances, following
banking instruments are used:

Pay order
Demand draft

Online transfer

Call deposit receipts

Traveling cheque

The procedure for dealing with all these under local as well as foreign currency in BAL is as
under.
Pay Order

A pay order is a written order issued by a bank, drawn upon & payable by itself, to pay a
specified sum of money to or to the order of a specified person.
Procedure for Pay Order
Application form is given to the customer to fill. Two signatures are taken on the form one for
request and other for receiving the instrument. All the particulars of application form are checked
and bank commission charges and withholding tax is written on the top of the application form.
If the customer is maintaining his account with the branch, he can give cheque for total amount
of instrument plus bank charges. Cheque and application from is then given to the officer Cash
Department for the payment of cheque. After proper scrutiny, Officer Cash Department posts the
cheque and signs the application form in token of payment received. If the customer wants to
pay cash, then cash is deposited by the customer along with the bank charges and withholding
tax.
Application form is then given to the Remittances In charge for issuance of instrument. He
enters all the particulars of the application form in the system and computer gives an Auto
Control Number to the instrument. Printout is taken on the block of payment Order. Two
authorized officers of the branch then sign it. Instrument is then protecting graphed, and given to
the customer.
When instrument is presented for payment, it is posted in the system and canceled by the
Remittances In charge after proper scrutiny.
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. It is made by the bank, given to the purchaser against
cash or cheque.
Parties Involved In DD:

Purchaser

Issuing Branch

Drawee Branch

Payee

Procedure for Issuing DD

Issuance procedure of Demand Draft is same as of pay Order.
Procedure for Demand Draft Payable

When DD advice is received, signatures of both signatory on the DD are verified. All the
particulars of the DD payable are entered in the system. Prints out of vouchers (DD payable) are
taken. When instrument is presented for payment, signatures of the attorneys are verified on DD
and after proper scrutiny; it is posted in the system and canceled by the Remittances Incharge.
Online Transfer
Sometimes, when the remittance is urgently required by the remitter, online Transfer is made.
Collection
All the cheques under collection are called cheques under Collection in Bank Alfalah Limited.
There are two types of bills for collection:

Outward Bills for Collection

Inward Bills for collection

Outwards Bills for Collection

Al the cheques are received on one counter along with the paying slips duly filled in properly
containing particulars of cheques and account holder. Counter folio of paying slip is handed over
to the customer by putting stamp for cheque received for collection for Bank Alfalah on it duly
signed by officer. These cheques are scrutinized and cheques for local clearing are separated
from OBCs. Cheques for local clearing are entered in Clearing Register, whereas cheques for
collection are entered in OBC register and handed over to the Bills Department for collection.
OBC number is allotted to the cheque from OBC register. Special crossing and bank
endorsement stamps are affixed on the cheque.
OBC schedule is attached with the cheque and dispatched to the main branch of that city for
collection. If they do not have any branch in that city, then cheque will be sent to the Collecting
Agent of Bank Alfalah for that city, and if they do not have any collecting agent even, then
cheque can be sent directly to the drawing branch. Instructions are given on the OBC schedule
for the payment of that cheque. Contra-liability vouchers are also posted in the system. When
OBC is realized, collection bank pays the amount through IBCA if it is the same bank or through
DD if it is another bank. If DD is received against OBC, it is presented in the clearing for
collection. If IBCA is received from the branch for the payment of OBC, certain vouchers are
posted in the system.
Inward Bills for Collection
If any other bank sends a cheque of Bank Alfalah Limited, it is Inward Bill for Collection. Bank
Alfalah remits money after checking the balance of the customer account.
The process of collection starts when the cheques of Bank Alfalah Ltd. are received from other
banks. Then these cheques are sent to the Head Office Karachi, which sends the cheques to SBP

for clearing and get the confirmation of cheque and credit advice. Main activity of clearing is
performed by Head Office, which contacts other banks through SBP.
Accounts Department
Most important department of bank as it is concerned with:

Revenue
Expenses

Assets

Liabilities

These are the pillars of any business. This department is supervised by Mr. Muhammad Asif in
this department; all the vouchers that are posted during one day are sent to the Account
Department next day. These vouchers are already posted to computer by the concerned
department. So computer also sends a report to the Accounts Department. The accounts
Department have to tell that all the vouchers are posted under the right head. Amount, date,
stamps, signatures all the requirements for cheques and vouchers are fully checked.
If any kind of renovation or construction or rebuilding is done, all is paid from the Accounts
Department. Like petrol for the car of EVP and VP, stationery charges, medical allowance, etc.
are all paid by this department.
Daily Customer Movement List
All the changes that are made in accounts of customer are shown in the daily customer
movement list. By using this list, people of Accounts Department can prepare the vouchers.
Following activities are performed by Account Department:

Voucher preparation
Preparation of daily, weekly, monthly, and annual statement.

Budgeting and fixed assets

Employers benefit

Expenditure approval.

SWOT Analysis
Strengths

Bank has a belief in customer service

Backed by strong Abu Dhabi Consortium

Customer give suggestion for the improvement of bank and these

listened carefully.

Manager& EVP Mr. Najam-ul-Hassan Qazi has good coordination with staff members.

Environment is friendly.

Products are excellent

Expansion is consistent

Modernized banking (online + Internet)

Fully computerized, each department has to own PC.

suggestions are

Weaknesses:

Mixed Culture
New Setup

Staff is lesser.

Electronic funds transfer is only available from Alfalah to Alfalah only

Opportunities:

Information Technology.
Internet and mobile banking

Establishing Foreign Branches

Local Setup Expand

Threats:

Competition by the settled bank like MCB and others

There is a possibility that in future the customers are too many to be handled by the so
small number of the employees.

Governmental policies may pose unpleasant role

Global issues like America Iran war and terrorism

Recommendations

Finally, there are some suggestions for Bank Alfalah Limited. These suggestions are based on
experience with the bank.

This is a routine practice that in order to give personalized services to the customer, bank
staff tries to fill all the columns of AOF with their own handwriting, which is wrong.
AOF must be filled in by the customers. Bankers should avoid filling in the AOF
because it can create problem if the address, title of account or any other information
provided by the customer has not been written properly. Customer may be affected or he
may claim that this information was not provided by him, but if AOF is filled by the
customer then banker cannot be held responsible for any incorrect information provided
by the customer.

Under no circumstances cheque book should be given to the customer if the account
formalities are incomplete.

Audit should be held internally. Rather there should be an Audit Department in the
branch to make audit on daily basis. This can become as helpful as different banks are
having this department of their own.
Marketing Practices Adopted By Bank

Nowadays marketing of products is of prime importance for any organization. In this dynamic
environment, every organization has its own Marketing Department, which is responsible for
creating the demand of its goods and services.
Nowadays banks also have their marketing departments, which are responsible for creating
demand of their products, i.e., their deposit schemes and increasing the deposit of the bank.
Bank Alfalah has its own full marketing Department at the Head Office, Karachi. This
department prepares different deposit schemes for its customers, time to time, in order to
increase the business of the bank. At branch level, the Operations Department follows marketing
practices. At each branch of bank, officers are available to provide marketing activities of their
products.
They make customer calls and personally visit the potential customer to convince them to invest.
They make phone calls to customers and inform them about their schemes, profit rates.
Conclusion
BANK ALFALAH ( BAL ) under the leadership of Sheikh Nahayan Mabarak Al-Nahayan 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 cornerstone of its strategy.
The people of bank innovation, creativity, reliability, customized services and their execution 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 Corporate
customers. Revenues from these activities have started yielding dividends and they expect
significant growth in these areas in the coming years. While building on their in-depth familiarity
with their customers needs and anticipated developments in the banking industry, the Retail and
Corporate areas of their operations will continue to provide a strong and stable base to the
business of the Bank.
They are aware 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
distribute their products and services through most efficient and high-tech means. They say that
they will invest in the modern tools and substantial allocation of resources will be made to
achieve this objective during the current year. Their programme to launch real time on line
Banking Services and introduction of ATMs at strategic locations have been firmed up and it will
be fully operational during the year 2001.
Their focus would be to constantly seek out growth opportunities through increased quality
assets and by offering a wider range of products and services to their esteemed customers. There
are significant growth opportunities for BANK ALFALAH and they are confident in their ability
to grasp them. They are committed to enhancing the shareholders value and look forward with
greater optimism to a prosperous future for BANK ALFALAH
Based on the profit of Rs.354 million, the Board has proposed that a cash dividend at a rate of
Rs. 2.00 per share i.e. 20% of share capital be distributed among the shareholders.

FINANCIAL ANALYSIS

BANK ALFALAH LIMITED

BALANCE SHEET HORIZONTAL ANALYSIS
AS ON DEC 31, 2010 (RS. In 000)
Particulars
Assets
Cash and balances with treasury
Balances with other banks
Investments Net
Lending to FI,s

2010

2009

CHANE

Advances- net
Other assets
Fixed assets
Deferred tax Assets
Total Assets
Liabilities
Bills payable
Borrowing from other banks, agents etc.
Deposits & other accounts
Sub-ordinated loans
Liabilities against assets Lease
Other liabilities
Deferred tax liabilities
Total Liabilities
Net Assets
Presented by
Share capital
Reserve fund, other reserves
Unappropriated profit
Surplus/(deficit) on
Revaluation of assets Net of Tax

41,197,841
16,179,255
113,425,861
6,497,556
207,152,546
12,826,225
14,204,555

411,483,839

4,521,533
13,700,124

354,015,311
7,567,192

9,258,216
115,919
389,178,295
22,305,544
13,491,563
3,819,133
2,415,860

19,726,556
2,578,988

35,056,012
22,722,639
99,159,957
14,947,435
188,042,438
14,649,380
14,492,197

389,070,055

3,766,144
20,653,921
324,759,752
7,570,181

10,006,786
179,851
366,936,635
22,133,420

13,491,563
3,587,969
2,690,728
19,770,260
2,363,160

6,141,829
2557040

6599600
39715280
1673851
1488878

55882035
1025000
(403924)
53016569
1249740
38590

(37176)
54878799
503236
500000
218398
397258
(112420)
BANK ALFALAH LIMITED
PROFIT AND LOSS ACCOUNT HORIZONTAL ANALYSIS
AS ON DEC 31, 2010 (RS. In 000)
Particulars
Mark-up/return/interest earned
Mark-up/return/interest expensed
Net mark-up internets income
Provision against loans and advances-net
Provision for diminution in value of investments
Bad debts written off directly
Net mark-up/interest income after provision
NONMARK-UP/INTEREST INCOME
Fee, commission and brokerage income
Dividend income
Income from dealing in foreign currencies
Gain onSaleof Securities Net

2010

2009

2010

Unrealized Gain on Revaluation of Invst

Other income
Total non-mark up/interest income
NON MAR-UP/INTEREST EXPENSES
Administrative expenses
Provision against off-balance sheet obligations
Provision against other assets
Other charges
Total non-mark up/interest expenses
Extraordinary/unusual items
PROFIT BEFORE TAXATION
Taxation
-Current
-Deferred
Prior Years

PROFIT AFTER TAXATION

Unappropriated profit brought forward
Transfer from surplus on revaluation of fixed assets-net of tax
Profit available for appropriation

37,530,256
23,855,448

13,674,808

2,243,687
1,991,192
25,504
9,414,425
1,986,470
204,425
1,133,544
77,609
3,300
1,302,813
4,708,161
14,122,586

12,578,080

6,056
93,040
76,665
12,753,841
1,368,745

1,368,745
842,232
(370,883)
(71,056)
400,293
968,452
2,690,728
29,695
3,688,875

35,561,312
24,654,180
10,907,132

3,694,546
317,164
59,817
6,835,605
1,913,004
248,217
1,019,732
688,924
2,849

1,309,527
5,182,253
12,017,858

10,923,507

(1,419)

79,454
11,001,542
1,016,316

1,016,316
1,066,301
(767,346)
(179,674)
119,281
897,035
3,447,467
24,696
4,369,198

37,530,256

23,855,448
13,674,808

2,243,687
1,991,192
25,504
9,414,425
1,986,470
204,425
1,133,544
77,609
3,300
1,302,813
4,708,161
14,122,586

12,578,080

6,056
93,040
76,665
12,753,841
1,368,745


1,368,745
842,232
(370,883)
(71,056)
400,293
968,452
2,690,728
29,695
3,688,875

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