Allied Bank Internship Report

Internship Report 2009
Table of Contents PREFACE 2 ACKNOWLEDGMENT 3 BANKING SYSTEM TODAY 4 CHAPTER 1 THE ORGANIZATION 5 HISTORY AND BACKGROUND: 6 GENERAL PROFILE OF THE ALLIED BANK LIMITED: 10 PRODUCTS: 15 ORGANOGRAM OF ALLIED BANK: 36 BRANCH NETWORK: 39 CREDIT RATING: 40 VARIOUS BANK DEPARTMENTS: 43 APPRAISALS AND PROBLEMS AT ABL: 56 CHAPTER 2 ANALYSIS 57 SWOT ANALYSIS 58 FINANCIAL ANALYSIS: 61 FUTURE OUTLOOK: 64 CHAPTER 3 INTERNSHIP ACTIVITIES 65 WEEKLY ACTIVITIES: 66 MANAGEMENT STYLE 101 WORKING ENVIRONMENT: 101 CHAPTER 4 SUMMARY & RECOMMENDATIONS 102 OVERALL SUMMARY: 103 RECOMMENDATION FOR THE ORGANIZATION: 104 RECOMMENDATION FOR THE IBIT: 105 ANNEXURE: 106 Annexure: Institute of Business & Information Technology
PREFACE The report is specially meant for the students ofMBIT. It is concerned to a brie f study of operations, functions, tasks and services of Allied Bank of Pakistan. Banking play very important role in the commerceand economic development of a co untry. Now-adays banks are using different modern technologies, which influence the managerialactivities, that s why I decided to do my internshiptraining in the bank. In preparation of this report I have tried my best toprovide all possible inform ation about the operations, functions, tasks and the corporateinformation of Allied Bank of Paki stan in brief and comprehensive form. Then internship report ends with some recommendation after identification of problemsthat I observed during the course of my internshiptraining. Institute of Business & Information Technology
Acknowledgment To Him belongs the dimension of the Heavens and the Earth, it is He who gives life and death and He has power over all things. (Al-Quran) All acclamations are to Allah, the most Merciful and Compassionate, who has empowered and enabled me to accomplish this task successfully. After that I submit my earnest thank to my affectionate parents, who pray for my success and always been a source of encouragement for me. Secondly, I am grateful to my prestigious institute that made this learning opportunity a part of my education, especially I would like to thank my Professors as the knowledge imparted by them enable me to gain knowledge and learning exposure of the organization in the best way. Also I express my appreciation to all staff members of Allied Bank of Pakistan who are very cooperative guided me a lot and also I express my greatest gratitude to my kindhearted supervisor Mr. Asif Incharge of reporting fraud, forgery and dacoity, Miss Syeda Ana Mehdi Credit Analyst and the wing head Mr. Syed Mujtaba Gillani. Institute of Business & Information Technology
BANKING SYSTEM TODAY The banking business as we know it today is composed of three separate and distinctive principal functions these are: The acquiring of funds to invest and advances The investing of such funds and advances (loans) in bonds The servicing of such funds, such as providingof checking, saving facilities and the collectionof draft, notes and cheques These functions while deferring in detail of operations follow the same principles established hundreds of year ago by money lenders and exchangers. Institute of Business & Information Technology
Chapter 1 the Organization Institute of Business & Information Technology
HISTORY AND BACKGROUND: Allied Bank was the first Muslim bank that has been established in Pakistan in D ecember 1942 as the Australasia Bank in Lahore with a paid-up share capital of Rs. 0.12 million under the Chairmanship of Khawaja Bashir Bux, the Bank attracted deposits equivalent to Rs . 0.431 million in its first eighteen months of business. At the time, the Bank s total assets amounted to Rs. 0.572 million. Today, Allied Bank's paid up Capital & Reserves amount to Rs. 10.5 billion, deposits exceed Rs. 143 billion a nd total assets equal Rs. 170 billion. The Bank s journey has been about dedication, commitment, professionalism and adapting to environmental changes, leading to its immense growth and stability. A view of Khawaja Bashir Bux's Residence that was the first branch of Australasia Bank came into existence. It is these factors that have made it a Bank the rest look up to. THE PRE-INDIPENDENCE HISTORY (1942-1947): In the early 1940s, the Muslim community was beginning to realize the need for i ts active participation in the fields of trade and industry. Since the late 1880s, Hindus had established a commanding presence in the areas of industry, trade and commerce and were especi ally dominating in the Sub-continent area. Banking, in particular, was the exclusive forte of Hindus and it was popularly and wrongly believed that Muslims were temperamentally unsuited for this profession. It was particularly upsetting for Khawaja Bashir Bux to hear that: Muslims could not be successful bankers . He decided to step-up to that challenge and took the lead in establishing this f irst Muslim bank by the name Australasia Bank Limited in Punjab, which was to become Pakistan in Dec ember 1942. The initial equity of the Bank amounted to Rs 0.12 million, which was raised to Rs. 0.5 million by the end of the first year of operation, and by the end of 30th June 1947 capital increased to Rs. 0.673 million and deposits raised to Rs 7.728 million. Institute of Business & Information Technology
AUSTRALASIA BANK (1947-1974): A view of the building in Lahore that once housed the Australasia Bank branch, Australasia Bank was the only fully operational Muslim bank in Pakistan on August 14th, 1947. However, it was severely hit by the riots in East Punjab. The Bank was identified with the Pakistan Movement. At the time of independence all the branches in India, (Amritsar, Batala, Jalandhar, Ludhiana, Delhi and Ang ra (Agra)) were closed down. New branches were opened in Karachi, Rawalpindi, Peshawar, Sialkot, Sargodha, Jhang, Gujranwala and Kasur. Later, the network spread to Multan and Quetta as w ell. The Bank financed trade in cloth and food grains thus, played an important role in maintaining consumer supplies during the early months of 1948 affected by riots. Despite the difficult conditions prevailing and the substantial set back in the Bank s business in India , Australasia Bank made a profit of Rs. 50,000 during 1947-48. By the end of 1970 it had 101 branches. Unfortunately, it lost 51 branches in th e separation of East Pakistan. But the Bank did well despite losing a lot of its assets and by the en d of 1973 had 186 branches in West Pakistan. ALLIED BANK (1974-1991): In 1974, the Board of Directors of Australasia Bank was dissolved and was rename d Allied Bank after the amalgamation of four banks. The first year was highly successful; prof it exceeded Rs. 10 million, deposits rose by over 50 percent and approached Rs. 1460 million. Inves tments rose by 72 percent and advances exceeded Rs. 1080 million for the first time in the banking history. 116 new branches were opened during 1974 and the Bank started participating in the Gover nment s spot procurement agriculture program. Those seventeen years saw a rapid growth for th e Bank. Branches increased from 353 in 1974 to 748 in 1991. Deposits rose from Rs. 1.46 billion, and Advances & Investments from Rs. 1.34 billion to Rs. 22 billion during this perio d. It also opened three branches in the U.K. ALLIED BANK-A New Beginning: In November/December 1990, the government announced its commitments to the rapid privatization of the banking sector. Allied Bank s management under the leadership
of Mr. Khalid Latif decided to react positively to the challenge. In September 1991, Allied Ba nk Limited entered in the new era of its history a world s first bank to be owned and managed by its employees. The 850 executives and 7200 staff members spread over 800 branches throughout the Pa kistan established in high degree of cooperation and family feelings. Institute of Business & Information Technology
ALLIED BANK (1991-2004): As a result of privatization in September 1991, Allied Bank entered a new phase, and became the world s first bank to be owned and managed by its employees. In 1993 the First Alli ed Bank Modaraba (FABM) was floated. After privatization, Allied Bank became one of the p remier financial institutions of Pakistan. Allied Bank s capital and reserves were Rs. 1.525 billion; its assets amounted to Rs. 87.536 billion and deposits to Rs. 76.038 billion. Allied Bank enjoyed an enviable position in Pakistan s financial sector and was recognized as one of the best amongst the major banks of the coun try. In August 2004, as a result of capital reconstruction, the Bank s ownership was tr ansferred to a consortium comprising Ibrahim Leasing Limited and Ibrahim Group. Today, the Bank stands on a solid foundation built over 63 years of hard work an d dedication, giving it a strong equity, an asset and deposit base and the ability to offer cu stomers universal banking services with more focus on retail banking. The Bank has the largest net work of online branches in Pakistan and offers various technology-based products and services t o its diverse clientele through its network of more than 700 branches. ALLIED BANK (2005 to date): In May 2005, Ibrahim Leasing Limited dissolved and the company was vested into A llied Bank Limited. ALL the shareholders were issued ABL shares instead of the all shares h eld by them. An application for the listing of ABL shares in all the Stock Exchange Companies of Pakistan was made; ABL was formally listed and the Bank s share trading began on the following dates i.e. Islamabad Stock Exchange August 8, 2005, Lahore Stock Exchange August 10, 2005 a nd Karachi Stock Exchange August 17, 2005. Today, all Allied Bank Limited shareholders can trade in the Bank s shares at thei r will and the Bank stands on a solid foundation of over 63 years of its existence having a str ong equity, assets and deposits base offering universal banking services with higher focus on retai l banking. Institute of Business & Information Technology
IBRAHUM GROUP ASSUMES CONTROL OF ABL: Ibrahim Group, through its different companies and sponsors owns more than 75% o f Allied Bank. The Group apart from interest in financial sector is engaged in manufacturing of yarn and polyester staple fiber, trading and power generation. The consortium of Ibrahim Leasing Limited And Ibrahim Group, which has injected Rs. 14.2 billion into capital of Allied Bank of Pakistan for acquiring its 325 million ad ditional shares, today assumed the control of the bank. The Governor, State Bank Of Pakistan, Dr. Ishra t Hussain handed over the relevant documents to Mr. Mohummad Naeem Mukhtar, Authorized Attorney o f the consortium at a simple ceremony held at SBP, Karachi. Among those who present at the ceremony were Deputy Governor, Mr. Tawfiq A. Hussain and senior officials of the State Ba nk of Pakistan, representatives of the Allied Bank and the consortium. Speaking on the occasion, the State Bank Governor has termed the successful reconstruction of ABL as beneficial both for the organization as well as for banking industry. He expressed the hope that the transfer of the management of ABL to a strategic investor will turnaround the bank and usher in a new era of growt h and stability in the banking sector. He stressed upon the new Board of the Bank to run it professiona lly, prudently and with the highest standards of corporate governance. It may be recalled that the auction of 325 million additional shares as a part of reconstruction of Allied Bank of Pakistan was held under the chairmanship of the deputy Governor, State Bank of Pakistan, Mr. Tawfiq A. Hussa in at Islamabad on 23rd July, 2004. In the auction, the consortium of Ibrahim Leasing Limited An d Ibrahim Group were the successful bidder as they offered the highest bid of Rs. 14.2 billion f or acquiring these additional shares, which constitutes 75.35% of the revised capital of ABL. The F ederal Government approved the scheme for reconstruction of ABL, under section 47 of th e Banking Companies Ordinance 1962 on July 24, 2004. After the approval of scheme by the Federal Government, the State Bank issued th e Letter of Acceptance (LOA) to the consortium of Ibrahim Leasing Limited And Ibrahim Group on July 26, 2004 in terms of which the full payment of Rs. 14.2 billion was made on August 1 9, 2004. On receipt of full payment by the Allied Bank of Pakistan Limited and verification of the sources of funds by the State Bank of Pakistan, the control of the Bank was handed over to
consortium of Ibrahim Leasing Limited And Ibrahim Group. Institute of Business & Information Technology
General Profile of the Allied Bank Limited: Allied Bank Limited operates by the following Vision, Mission & Values: VISION: To become a dynamic and efficient bank providing integrated solutions and the first choice of bank for all customers. MISSION: To provide value-added services to our customers To provide high-tech innovative solutions to meet customer requirements To create sustainable value through growth, efficiency and diversity for all stakeholders To provide a challenging work environment, and reward dedicated team members To play a proactive role in contributing towards the society CORE VALUES: The core values of Allied Bank are these: Integrity Excellence in Service High Performance Innovation and Growth Institute of Business & Information Technology
OBJECTIVES: Allied Bank has following objectives: Prime focus to earn profit by providing values to its customers To provide superior services to its customers To provide assistance in the development of the commerce and trade industry Focus on blending skills and experience towards creating an enabling environment Core focus is to inculcate a culture of collaboration intended to deliver world class customer service Institute of Business & Information Technology
BOARD OF DIRECTORS: The people who draw the picture of the organization on the broader canvas of strategy and planning, the pioneers of prosperity and world of wisdom that paves the path to long term success Mr. Mohammad Naeem Mukhtar Chairman Mr. Mohammad Aftab Manzoor (CEO) Mr. Khalid A. Sherwani President & (CEO) Mr. Pervaiz Iqbal Butt Director Mr. Mohammad Waseem Mukhtar Director Mr. Farrakh Qayyum Director Mr. Sheikh Mukhtar Ahmed Director Mr. Abdul Aziz Khan Director Mr. Tasneem M. Noorani Director Mr. Sheikh Jalees Ahmed Director Mrs. Nazrat Bashir Director Mr. Mubashir A. Akhtar Director Institute of Business & Information Technology
EXECUTIVE COMMITTEE: Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Khalid A. Sherwani President & (CEO) M. Naveed Masud Senior Executive Vice President Akhter Ali Khan Head Credit Tahir Saeed Effendi Head I.T & Financial Officer Mohammad Yaqoob Head Islamic Banking & Planning Div Masud A. Sidique Head Human Resource Anwar Zaki Head Treasury Khalid Mehboob Head Business Promotion Sayed Mujtaba Gillani Head Special Vigilance Unit
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THE MANAGEMENT: The brilliants whose passion is dedicated to discover newer ways to make the organization goals reality Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Asim Tufail (Group Chief, Consumer & Personal Banking) Fareed Vardag (Chief Risk Officer) Iqbal Zaidi (Group Chief, Compliance) Mohammad Abbas Sheikh (Group Chief, Special Assets Management) Mohammad Aftab Manzoor (Chief Executive Officer) Muhammad Jawaid Iqbal (Group Chief, Corporate & Investment Banking) Muhammad Yaseen (Group Chief, Treasury) Mujahid Ali (Group Chief, Information Technology) Shafique Ahmed Uqaili (Group Chief, Human Resources) Khawaja Mohammad Almas (Head, Core Banking Projects) Tahir Hassan Qureshi (Chief Financial Officer) Tariq Mehmood (Group Chief, Operations) Waheed ur Rehman (Company Secretary) Zia Ijaz (Group Chief, Commercial & Retail Banking)
PRODUCTS: In line with the Bank s omers, substantial ground work iness. Furthermore, to achieve ave been recruited into areas of sumer analytics, call centers Phone Banking: Allied Bank is focused on delivering exceptional services to its customers that would strengthen the relationship and build Loyalty. To make bank ing experience quick, efficient, secure and easy, Allied Bank of Pakistan now offer its customers 24/7 Phone Banking Services. Allied Phone Banking provides its customers immense comfort! In addition, Allied customers can also avail a host of services through automate d Allied Phone Banking (IVR/Self Service Banking) that lets them use their telephone keyp ad to inquire about their financial balance/transactions. Allied Phone Banking Services: Dial - 0800-22522 to get absolute Banking freedom Branch Banking: 1. Inquiry A/C balance Statement details Product information 2. Transactions Cheque book request TPIN issuance & re-issuance ATM PIN issuance & re-issuance PO/DD & Bank certificate Funds transfer Institute of Business & Information Technology aim to provide a host of products and services to its cust has been done to establish a strong consumer banking bus this objective, professionals from across the industry h product development, sales, credit policy, research, con and service quality departments.
Credit Cards: 1. Inquiry Card balance Statement details Product information Application status 1. Transactions Card activation Card lost/stolen Card replacement Credit Card bill payment Insurances Internet Banking: Banking at your fingertips Allied Direct Internet Banking offers convenience to its customers to manage and control their banking and finances - when they want to, where they want to! So, just get clicking. Allied Direct Internet Banking is; Simple and Convenient Secure and Faster 24X7 Account Access Online Banking:
Allied Online Banking is a unique service being offering from Allied Bank. Through this service, account in Allied Bank is available to custom ers from any of abl branches countrywide. No matter where customers are in the country and whichever branch their account is maintained at, customer can have their cheque cashed at any of abl 757 online br anches located in 250 cities. Institute of Business & Information Technology
Customers can also use the service, from any branch, to deposit cash for instant credit into their account or any other account in Allied Bank. Similarly, the account-to-acc ount Funds Transfer facility is also available for instant remittance. Customers cheque drawn from a remote branch for credit into a beneficiary s account or encashment of a specified amount can also be presented by a third person at any branch. What s more, making a Balance Inquiry and getting an Account Statement are additio nal services available to Account holders from remote branches. Allied Online provides a secure, efficient and convenient facility for making pa yments to beneficiary accounts from any of abl branches countrywide. Corporate customers r equiring fund collection or a disbursement facility can use it for cash management servic es. Allied ATM Networks: Allied Bank has a vast network of over 460 ATMs installed in over 130 cities, which continues to grow at a rapid pace. 1 Link Network: Additionally, Allied Bank is a member of the 1-LINK ATM sharing switch
comprising of over 2,000 ATMs nationwide, therefore, giving its Allied Cash+Shop Visa Debit Card holders access to even more ATMs across the country. The "1-Link Switch" has the following Bank members: ABN Amro Bank KASB Bank Standard Chartered Bank Pakistan Limited Limited Al Baraka Islamic Bank Bankislami Pakistan Limited Meezan Bank Limited Allied Bank Limited National Bank of Pakistan Askari Commercial Bank Limited NIB Bank Limited Atlas Bank Limited PICIC Commercial Bank Limited Bank AL Habib Limited Soneri Bank Limited Bank Alfalah Limited Union Bank Limited Crescent Commercial Bank Limited
United Bank Limited Dubai Islamic Bank Pakistan Limited MyBank Limited Emirates Global Islamic Bank Limited Tameer Micro Finance Bank Limited Faysal Bank Limited Habib Bank Limited First Dawood Islamic Bank Limited Institute of Business & Information Technology
All ATMs connected with the"1Link Switch" will show its Logo. Bank: City: Branch: Address: Muslim Commercial Bank Select City Select Branch M NET Network: The Allied Cash+Shop Visa Debit Card can also be used at M Net ATMs, for cash withdrawal. The "M Net Switch" has the following Bank members: JS Bank (American Express Bank) Bank of Khyber Bank of Punjab Citibank First Women Bank Limited Habib Metropolitan Bank HSBC Bank Muslim Commercial Bank Saudi Pak Commercial Bank Prime Commercial Bank ORIX POS Network: City: Merchandiser: Address: KARACHI Institute of Business & Information Technology
Corporate Leasing: Allied Bank started lease operations when it integrated with Ibrahim Leasing Limited. Facilities include leases for machinery, commercial vehicles and equipments. The Bank provides lease facilities to corporate and commercial clients in all industrial enterprises for balancing, modernization, replacement and expansion schemes. Leasing is a popular mode of financing because of its distinctive features like tax shield, preserve working capital, easy documentation and less processing time. Lease applications are processed at all Bank branches in Pakistan. Unclaimed Deposits: If the account is dormant or not operated for 5 years then these are called uncl aimed deposits and all unclaimed deposits are surrendered to the State Bank of Pakista n. In accordance with the Banking Companies Ordinance, 1962, Section 31, the Bank is liable to surrender to S.B.P, all unclaimed deposits and instruments which have not been operated/collected by the account holders/beneficiaries for last 10 years. All such customers/beneficiaries are requested to contact the concerned branch t o reactivate their accounts/collect the instruments, failing which, the bank will be compelled to classify the same "UNCLAIMED" and surrender to SBP. Deposit Accounts: Allied Bank of Pakistan provides different nature of deposit accounts to its customers. PLS Account Current Account Allied Basic Banking Account Foreign Currency Deposit Monthly Profit Plus Rewarding Term Deposit Behtar Munafa Account Behtar Munafa Term Deposit Allied Munafa Account Allied Bachat Scheme Allied e-Savers Accounts Allied Business Account Institute of Business & Information Technology
PLS Account: Allied Bank offers the PLS Savings Account facility to its customers with the following attractive features: Attractive return of up to 5.00% per annum Free Online Transactions, DD/TT/PO for depositors maintaining an average monthly balance of Rs. 2.500 (M) & above. Free issuance of cheaque book at the time of account opening Current Account: Allied Bank offers the Current Account facility for individuals as well as for institutions and commercial customers. There are free Online Transactions, DD/TT/PO for depositors maintaining an average monthly balance of Rs. 0.5 (M) & above. Free issuance of cheaque book at the time of account opening Allied Basic Banking Account: In order to provide basic banking facilities to its lower-middle class customers , Allied Bank has introduced the Allied Basic Banking Account (ABBA). Account can be opened with an initial deposit of Rs 1,000/= It is a non-remunerative account with a no minimum balance requirement. The Statement of Account is issued on a yearly basis. The account will be closed automatically if the balance remains year. zero for one
No service charges on the account for a maximum of 2-withdrawals and 2deposits during a calendar month. Additional transactions will be subject to a service charge as per the Bank s Schedule of Charges for every withdrawal/deposit. Unlimited withdrawals from ATMs. Institute of Business & Information Technology
Foreign Currency Deposits: Allied Bank offers the facility of opening Current, Savings and Term deposit Accounts. Foreign Currency accounts can be opened in US Dollar, Pound Sterling, Euro, and Japanese Yen at designated branches. Monthly Profit Plus: Saving has now become all the more appealing with our Monthly Profit plus Scheme , which earns you monthly profits on investments. The scheme is designed for a per iod of 1 Year Tenure 1 Year with the Profit Rate 10.00% p.a. following Profit Payment Rs.833 * per month profit rates: Approximate monthly returns calculated on the investment of Rs.100, 000 * Withholding tax, Zakat or other Government Levies are applicable separately Salient Features: Account Type: Term Deposit Term Period: 1 year Profit: Payable on monthly basis Minimum Deposit Amount: Rs.25,000 Eligibility: Individuals & Institutions (other than financial institutions) Additional Benefits: Cheaquing Account for monthly profit credit 24 hour phone banking service Free internet banking facility SMS transaction alerts Allied Cash + Shop Visa Debit Card
Rewarding Term Deposit: A term deposit scheme which gives a high rate of return and the flexibility of various tenure. Investment can be made with the minimum of PKR 25,000 only. Institute of Business & Information Technology
Rate of Profit: D 13612 Rs. 7.0 9.0 9.5 10. 25, 0%0% 0% 50 th % 00 Salient Features: th th 0 sss & Account Type: Term Deposit Term Period: 1-12 months Ab ov Investment: Rs. 25,000 & above Profit: Payable on maturity e Eligibility: Individuals & Institutions Allied Advance Profit scheme: In keeping with our objective to bring you new and innovative services and banki ng products, we now introduce Allied Advance Profit Scheme that gives the entire pr ofit upfront. Product Specifications: Minimum Investment Required Investment Terms: 18 months Auto roll-over (optional) Profit Payment: Profit of Rs.13, 500* will be immediately credited in the customer s current accou nt. *on an investment of Rs.100, 000 Tax/Zakat will be applicable as per rules Additional Features & Benefits Current account for regular banking needs Allied Cash+Shop Visa Debit Card Financing facility of upto 80% on investment Free internet banking facility 24-hour phone banking service Institute of Business & Information Technology Rs.25, 000
Behtar Munafa Account: If customer wants a chequing account that earns it attractive returns, paid on m onthly Upto Rs.5,000,000 5.00% Rs.5,000,001 to Rs.25,000,000 6.00% Rs.25,000,001 to Rs.50,000,000 7.00% Rs.50,000,001 to Rs.100,000,000 8.50% Rs.100,000,001 to Rs.250,000,000 9.25% Rs.250,000,001 to Rs.500,000,000 10.00% Rs.500,000,001 & above 10.50% basis, then this is the account for such customer. Rate of Profit: Salient Features: Account Type: Chequing Account Investment: Up to Rs.5,000,000 & above Profit: Payable on monthly basis Highest Profit: Up to 10.50% p.a Eligibility: Individuals, and institutions Behtar Munafe Term Deposit: If customer wants to fix its money now to secure the future, this is the product for customer. BEHTAR MUNAFA TERM 1 3 6 Months 1 Year DEPOSITS (3739): Upto Rs. 5,000,000 Rs.5,000,001 to Rs.25,000,000 Rs.25,000,001 to Rs.50,000,000 Rs. 50,000,001to Rs. Month 6.00% 6.50% 7.00% 7.50% Months 8.00% 8.50% 9.00% 9.50% 8.50% 9.00% 9.50% 10.00% 9.50% 10.00% 10.50% 10.75%
100,000,000 Rs.100,000,001& Above 8.00% 10.00% 10.50% 11.00% Rate of Profit: Institute of Business & Information Technology
Rate of Profit: Account Type: Fixed Term Deposit Investment: Up to Rs.5,000,000 & above Profit: Payable on maturity Highest Profit: Up to 11% p.a. Eligibility: Individuals, and institutions Allied Munafa Account (AMA): Salient Features: The applicable profit rate will be based on the amount maintained in the account on an average monthly basis and the return will also be credited to the account on a monthly basis. Individuals, Firms, Companies, Schools, Hospitals, Charitable Organizations, etc., are welcome to open their account in this scheme. Allied Bachat Scheme: Allied Bachat Scheme is a PLS Term Deposit Scheme based deposit scheme whereby customer can double your investment in just 7.5 years. Maturity Period: 7.5 years Minimum Deposit: Rs. 50,000/- with multiples of Rs. 10,000/ Expected rate of Profit: The deposit amount will be doubled in 7.5 Eligibility: All individuals and institutions Free Internet Banking facility Allied e-Savers Accounts: Saving has never been so flexible! The Allied e-Savers Account is a unique savings plan where customer can earn returns as high as 7.5% with the convenience of 4 withdrawals a month! Institute of Business & Information Technology
Salient Features: Investment: Rs. 10,000 to Rs. 500,000 Profit: payable on Half Yearly basis. Expected Profit Rate: Up to 7.50% p.a. Eligibility: Individuals Allied Business Account: Allied Bank offers banking experience beyond expectations! Allied Business Account is a non-profit current account with countless benefits and services. If customers are a businessman, trader or an individual, Allied Busine ss Account is an ideal proposition for such customers. Features & Benefits Online/ManualFree Remittances Free Rs. 500,000/- andOutward Chequeabove Return Free Issuance of DD/TT/PO/OBC/Expression Collection Institute of Business & Information Technology
SME: The Commercial and Retail Banking Group (CRBG) caters to the needs of commercial entities and small and medium enterprises. A dedicated team of Relationship Mana gers first identifies the specific needs of each customer segment, then designs and deliver s a facility package, which is in conjunction with those needs, and provides customers the fu ll support and opportunity to take advantage of the various business prospects available in the market. Following are the main credit facilities ABL offer: RF/CF: These are short term credit facilities (maturity of up to one year) lent to cust omers to meet their day-to-day business/working capital requirements and finance their invento ries, receivables, etc. Generally, in addition to collateral security, these facilities also entail secu rity in the form of hypothecation of stocks and receivable/pledge of stocks. Export Refinance Facility: This is mainly the same as RF/CF, but as per the Terms and Conditions set by SBP , is meant exclusively for exporters. Under the Export Refinance Part I Scheme, both pre-sh ipment and post-shipment financing facility is available. Foreign Bill Purchase/Bill Discounting Facility: This loan/facility is provided to exporters against their export bills under LC and a contract to facilitate their cash flow, while they are waiting receipt of their payments. LC (Sight /Usance): This facility allows importers to import goods and machinery. FIM/FATR: These facilities allow customers to finance imported goods against Pledge & Trus t Receipts, backed by collaterals. Demand Finance Facility: This is a medium/long term credit facility available to establish new projects f or BMR and capacity expansion with a repayment term of more than one year, which can be pai d back in
installments. This facility meets clients ory constructions or machinery expenses.
long term needs such as, financing fact
Demand Finance Long Term Loans: The demand finance long term loan is approved for a period of 3-5 years. The loa n is specifically for fixed asset financing with maximum grace period of upto 12 mont hs from first draw-down. Inland LC (Sight/Usance): This facility allows customers to purchase commodities within the country. Institute of Business & Information Technology
Letter of Guarantee (LG): On behalf of the customers, the Bank issues a guarantee in favor of the benefici ary, against the performance of a particular job/contract, within a particular time. Import Export: Allied Bank provides highly efficient trade finance services for import/export b usinesses through a large number of authorized branches where trained and motivated staff is available to handle the business on the customer s behalf. Cash/ Liquid Financing: The product is aimed at providing prompt financial services (fund based and non fund based) to SME sectors. The cash/liquid collateral financing program is aimed to be the cheapest source of funds available to the SME sector. Vendor Financing: The product is aimed at vendors of large corporate entities whereby the corporat e entity has an agreement with the vendor to provide specific quantities of certain goods in a specific period of time. ABL whould finance such vendors in order to promote their produc tion capabilities. Agriculture Finance: The Bank, under the Agricultural Financing Scheme, as decided by the State Bank Of Pakistan, extends short, medium and long term, farm and non-farm credits. The fa rm credits are extended for production (inputs) and development purposes. Non-farm credits are allowed for livestock (goats, sheep, cattle), poultry and factories including social for estry and fisheries (inland and marine, excluding deep sea fishing). Details are as follows: Farm Loans: Production Loans: 1. Inputs like seeds, fertilizers, pesticides, weedicides, herbicides, labour ch arges, water charges, vegetables, floriculture, etc. 2. Working capital finance to meet various farming expenses. Development Loans 1. Improvement of agricultural land, orchards, etc. 2. Construction of Godowns 3. Tractors, Machinery & other equipments 4. Tube wells 5. Farm Transportation, etc
Non-Farm Loans 1. Livestock 2. Poultry 3. Fisheries 4. Forestry Agriculture Revolving Credit Scheme 1. Loan Tenure: 3 Years (Clean up once a year) 2. One time documentation for 3 years 3. Loan limit will be based on the Indicative per Acre limit prescribed by SBP Development Loans/Finances (Term Loans) 1. Loan Tenure: up to 5 years 2. Repayment: Monthly/Quarterly/Bi-Annual 3. Criteria Selection: a) Should be a Pakistani & have a CNIC. b) Preferably is an account holder with ABL. c) Have a permanent residence and be a self-cultivator. d) Not be a defaulter of any other Financial Institution/Clear ECIB. e) Be reputable in the business f) Have Repayment Capacity g) Be able to produce proper securities Amount of Finance a) Value of agricultural land/Pass Book b) 80% of PIU or 50% of last 3 years average Sale Price or Market Value c) 50% of Residential/Commercial property in municipal limit. d) 90% of DSCs/SSCs/TDR/SNDR Insurance Insurance facility is available for all Farm and Non Farm Loans except orchards. Insurance premium amount of subsistence holding farmers availing loans for following 5 maj or crops will be reimbursed by the Government of Pakistan. Institute of Business & Information Technology
1) Wheat 2) Rice / Paddy 3) Cotton 4) Sugar Cane 5) Maize Utility Bill: Customers can of the Bank s branches. For g normal banking hours th cash or cheaque, plus all branches. pay their utility bills (e.g. electricity, gas, telephone) at any further convenience, bills are collected on all working days durin and also at certain times during the evening. Bills can be paid wi customers can even drop crossed cheaque in drop-boxes available at
Furthermore, customers can also pay their bills using any of the Bank s ATMs or vi a Internet Banking for SSGC and SNGP bills. LOCKERS: Allied Bank Lockers are available, at an annual fee, in four different sizes - s mall, medium, large and extra large. Locker holders are not required to have an accoun t with the Bank. S. # 1. 2. 3. 4. Hajj Services: Locker Size Small Medium Large Extra Large Annual Locker Rent (Current) Rs.1,500/Rs. 2,000/Rs.
4,000/Rs. 5,000/ Maximum Loss Coverage / Limit Rs.500,000/Rs. 1,000,000/Rs. 1,500,000/Rs. 2,000,000/ The Hajj Service is available to all pilgrims. The forms and other related servi ces are provided by the Bank. Hajj applications are available with all branches during H ajj season, immediately after the Hajj policy is announced by the Government of Pakistan. Institute of Business & Information Technology
Allied Visa Credit Card: In order to cater to growing financial needs of customers ABL is proud to introd uce Allied Visa Credit Card with the Lowest Service Charge ever! So now customers can save money where it counts and spend lavishly at favorite places with greater flexibility, convenience and most important-Affordability! With Allied Visa Credit Card customer can enjoy a variety of state-of-the-art fe atures and unmatched value by spending at over 49,000 merchants across Pakistan and 27 mill ion merchant outlets worldwide! And what more, customer can also use your credit car d at over 1 million ATMs internationally! Allied Visa Gold Credit Card: With Allied Visa Gold Credit Card every Pakistani can now enjoy the benefits of a Gold Card internationally with unmatched savings greater flexibility, convenience and security. Features: Buy Now, Pay Later: With Allied Visa Gold Credit Card, free credit period allows customers to pay fo r purchases up to 50 days after the date of purchase. Flexible Repayment: When paying credit card bill, Allied Visa Gold Credit Card gives the option to e ither pay the entire amount according to the statement or a minimum of 5% of total outstanding balance. Cash Advance Facility: As an Allied Visa Gold Credit Card member, customers are entitled up to 75% of a vailable credit limit in cash. Allied Easy Installments (AEI): The Allied Easy Installments (AEI) plan provides customers with the facility to pay outstanding card balance in equal and affordable monthly installments spread ove r 3, 6, 12, 18, 24, 30 or 36 months. Institute of Business & Information Technology
Supplementary Cards: Want to share the benefits of Allied Visa Gold Credit Card with others? Now cust omer can! Treat up to two people with supplementary credit cards and pass on the many priv ileges of Allied Visa Gold Credit Card to the chosen friends and family members. Balance Transfer Facility: In case customers have outstanding balances on other cards, consolidate these on to the Allied Visa Gold Credit Card with the lowest BTF rate and save more on the outstanding payments than ever before. Credit Protection Plus: With Credit Protection Plus, Allied Visa Gold Credit Card provides payment cover against: 1. Death, due to accident or sickness 2. Permanent and Total Disability, due to sickness or accident 3. Temporary Total Disability, due to sickness or accident 4. Terminal Illness Zero Loss Liability: The Allied Visa Gold Credit Card s Zero Loss Liability feature protects its custom ers from paying for any unauthorized transactions on their Card in the event that it is l ost or stolen. Free CIP Lounge Access: As an Allied Visa Gold Credit Cardholder, its customers are eligible to avail th e free lounge facility at Quaid-e-Azam International Airport, Karachi and enjoy a variety of complimentary features. Also feel free to plug in your laptop and mobile phone into the charging facilit ies provided or browse the internet or send and receive faxes while you wait. Visa Platinum Credit Card: With Allied Visa Platinum Credit Card customer can enjoy exceptional benefits an d a host of local and international benefits like never before! Institute of Business & Information Technology
Features: With Allied Visa Platinum Credit Card, customers can enjoy these facilities: Visa Platinum Golf Visa Platinum Dining Visa Experiential Travel Priority Pass Airport Lounge Program Platinum Life Platinum Life is a unique platform that showcases exclusive programs and events specially designed for Visa Platinum Credit Cardholders. With Allied Visa Platinum Credit Card, cus tomers are eligible to join this exclusive platform and avail many exciting services like P latinum Club, Platinum Dining, Platinum Golf, Experiential Travel and much more. Visa Platinum Club As a member of the Visa Platinum Club, you are part of an internationally repute d rewards program that provides an unmatched quality of services and customized luxuries t o all Allied Visa Platinum Credit Cardholders. Visa Platinum Websites The Visa Platinum websites have been designed to ensure that Visa Platinum Cardh olders around the Asia-Pacific region are up-to-date with the latest product offerings and benefits. The sites also include additional features like: The latest information on Visa Platinum regional programs, such as the Visa Platinum Club, Visa Platinum Dining, Visa Platinum Golf, Holidays and Visa Platinum Experiential Travel Facilities. The latest information on local country promotions and events. Online applications such as Concierge Online. A directory of toll-free numbers for reaching the VPCC from all key global destinations. Allied Cash+Shop Visa Debit Card : Features: Get Cash: Life is always on the move, now your bank account is too. Institute of Business & Information Technology
By using Allied Cash+Shop Visa Debit Card to withdraw cash directly from bank ac count from over 3,500 ATMs in Pakistan -including Allied Bank's largest network of ATM s -and over 1 million ATMs worldwide Stay Alert Now, be more secure and keep better track of spending. With Allied Cash+Shop Vis a Debit Card,customers can get SMS alerts when they make transactions on their Card. Shop Anywhere Use the Visa power of your Allied Cash+Shop Visa Debit Card to shop at over 49,0 00 retailers in Pakistan and over 27 million retailers internationally. Dine Out Enjoy Traveling Get Groceries Have Fun Fuel Up Cash Management: ABL s cash management team offers a full range of transactional banking services, from collections to cross-border payments, from customized services to comprehensive industry expertise. Having the largest real-time online branch network in Pakistan, combi ned with a host of value-added services, ABL is uniquely positioned to meet the demanding requirements of global corporate, public sector enterprises and top-tier domesti c companies. With its collaborative approach to building and implementing solutions, ABL is c ommitted to giving its customers the best service possible. Home Remittances: Allied Bank has rolled out its state-of-the-art e-Remittance services to facilitat e international remittances sent to Pakistan by overseas Pakistanis. ABL has been significantly important in originating home remittances to Pakistan , and is continuously working to develop innovative ideas for maximizing its reach to all Pakistanis living abroad. We have identified several strategic partners in the main oversea s markets, and will be providing a fully automated, end-to-end solution for non-resident Pakist anis. Institute of Business & Information Technology
ABL s real-time online branch network one of the largest networks in Pakistan, con sists of over 760 branches in 350 cities, and provides domestic distribution of remittanc es to customers receiving money in Pakistan. A host of top international banks, exchange houses and funds transfer companies from across the world, including the Middle East, Europe, Asia-Pacific and North America, ha ve been involved to make this a quality service. By implementing a fully automated, stra ight-through processing facility, we are in a position to activate an innovative set of remit tance products. A host of options is available to non-resident Pakistanis under this service, in cluding direct credit to account, cash payment over the counter and issuance of the Allied Expr ess cheque, a payment instrument that can be honored across the entire ABL network of branches . CIBG (Corporate Investment Banking Group) Corporate Banking Investment Banking Financial Institution -Project Finance-Project Finance-Cash Management-Long Term Financing-Syndication -Home Remittances -Short Term Financing-Advisory -Trade Finance Institute of Business & Information Technology
Organogram of Allied Bank: Central Departmentalization CreditSection Group Corporate BankingGroup Credit Administration Group ForeignTrade Group HumanResource Group AccountsGroup FinanceGroup Branches OperationsGroup Investment & TreasuryGroup Information Technology Group Internal Division Group Audit & InspectionGroup Administration Group Agricultural Group SpecialAsset Management Group Institute of Business & Information Technology
Organogram of SVU Institute of Business & Information Technology
Organogram of RMG Hierarchy of Authorities of Allied Bank Limited Institute of Business & Information Technology
BRANCH NETWORK: Allied Bank has 885 nationwide branches of which approximately 67% i.e. 573 are located in large metropolitan area, namely Karachi, Islamabad, Faisalabad, Lahore, Multan, Peshawar and Hyderabad. The network of 855 branches enables the bank to generate a substantial and stable deposit base, provide a wide range of banking products and other financial services and diversify lending risks geographically, as well as on the basis of credit and customer type. Allied Bank divided into four Centers i.e. North, Central-I, Central-II and South. These Centers have the regions and the regions further have the sub branches of Allied Bank Limited. The detail is given there: Institute of Business & Information Technology
CREDIT RATING: Allied Bank s credit rating has been maintained to AA for long term, by the Pakistan Credit Rating Agency (PACRA), the leading credit rating agency in the country and AA donates a very low expectation of credit risk, indicates very strong capacity for timely payment of financial commitments and not significantly vulnerable to foreseeable events. The short term rating was also maintained at A1+ , which is the uppermost possible rating under this category and represents highest capacity for timely repayment. CORPORATE GOVERNANCE RATING: Corporate Governance Rating (CGR) is meant to indicate the relative level to whi ch an organization accepts and follows the codes and guidelines of corporate governanc e practices. In this context, JCR-VIS Credit Rating Company Limited had assigned a corporate governance rating of CGR-8 to your bank during the last year, which denotes high le vel of corporate governance and is only two notches away from the highest level of CGR. CGR is arrived at after evaluating key governance elements of the rated enterpri se, which include regulatory compliance, ownership structure, composition and operations o f the board of directors and executive management, self-regulation, financial transparency a nd relationship with stakeholders. Rating for the current year is under process. Term Finance Certificate (TFC) -1st issue: In July 2008, JCR-VIS Credit Rating Company upgraded the rating assigned to Alli ed Bank s TFC to AA- from A+ earlier, with stable outlook. Institute of Business & Information Technology
The Deal of the Year Award 2008 by Banker UK:
The
Allied Bank has been awarded the Deal of Year Award 2008 for Pakistan by The Banker magazine -United Kingdom. This was awarded in recognition of Balance Sheet Restructuring & Debt Reprofiling of Maple Leaf Cement Factory Limited for Rs.13 billion which was the largest ever financing extended to cement company in Pakistan. As the sole financial advisor and lead arranger, Allied Bank was involved in a well-engineered structure and a timely execution that made the transaction a success. Allied Bank has been declared BANK OF THE YEAR 2006: Allied Bank has been declared BANK OF THE YEAR 2006 by UK renowned financial magazine The Banker published by Financial Times Business Limited. This is consi dered to be the most prestigious award in the world of finance. The award is given by the The Banker annually to one high performer Bank in each country based on key performance ind icators. The Bank of the Year 2006 Award was presented to Mr. Khalid A. Sherwani, Preside nt of the Bank during a ceremony held at London, UK on November 30, 2006. Corporate Finance House of the Year 2007: It feels pleased to apprise that Allied Bank of Pakistan has been awarded Corpora te Finance House of the Year (Banks) for the second consecutive year. CFA Association of Pak istan, a member society of CFA Institute USA, conferred the award on Allied Bank based on the highest value and number of corporate finance concluded during July 2006 December 2007. Corporate Report Award & Certificate: During the year, Annual Report of Allied Bank of Pakistan for the year 2007 won the first prize for the Best Corporate Report for the financial sector category, awarded joi ntly by the Institute of the Chartered Accountants of Pakistan and Institute of Cost and Man agement Accountants of Pakistan. The Annual Report for the year 2007 was also awarded Cer tificate of Merit by the South Asian Federation Accountants (SAFA), an apex body of the SA ARC countries.
Top 1000 Banks of the World
Ranking:
Allied Bank of Pakistan has been ranked among the top 1000 banks of the world by UK s The Banker , published by Financial Times London. The categories and ranking are as follows: Rank Categories Rank Performance based Profit on average capital (ROE) Return on assets (ROA) Real profit growth 31st 130th 206th Soundness based Capital assets ratio 517th Size based Assets 846th Overall world ranking 969th Institute of Business & Information Technology
VARIOUS BANK DEPARTMENTS: Allied Bank of Pakistan distributed its functions into various groups these are as follows: Audit & Inspection Group: Vision: To transform internal audit function of Allied Bank Limited in to an IT enabled risk based audit and management consultancy function providing value added services and man agement consultancy to the board and senior management. Mission: Our mission is to provide an independent, objective assurance and consulting ser vices to management designed to add value and improve operations of the bank, dedicated t o providing assistance to the management in effectively and efficiently accomplish ing its objectives by bringing a systematic, disciplined approach to evaluate and improv e the effectiveness of risk management, control, and governance processes. Terms of Reference: One of the prime responsibilities is the satisfactory implementation of the inte rnal control over financial reporting. The committee also determines appropriate measures to safeguard bank s assets, ensures consistency of accounting policies, reviews financial state ments and recommends appointment of and coordinates with external auditors. The committee is also responsible to ascertain the internal control system inclu ding financial and operational controls, ensuring adequate and effective accounting and reporti ng structure, determining and monitoring compliance with the best practices of the corporate g overnance. Implementation of the management testing plan, assessing the testing results and advising appropriate corrective action is also a major responsibility of Audit Committee. Institute of Business & Information Technology
Risk Management Group: Goals: The goals of RMG are to understand the risk profile of each business area, to pr opose risk policies, risk measurement methodologies, and risk limits in order to aggregate and control credit, market and operational risks across the Bank. In pursuance of these goal s, RMG has taken up the challenge of building an effective Risk Architecture. Terms of Reference: The primary functions of Risk Management Committee (RMC) is the monitoring of management s adherence to prudent and sound risk policies, assessing the ever chan ging risk profile and providing risk appetite to the business units. It also ensures development of risk management principles to build stakeholders confidence, safeguard and enhance reputation. The committee approves risk limits for Credit, market and operational risks, Credit approval grid and proposals regarding rescheduling/wri te-offs and filling of recovery suits. Overseeing of certain management committees and group s is also undertaken by the RMC. The Committee also monitors the initiatives and expenses pertaining to Basel II and up gradation of Risk Management Systems. Structure of RMG: Risk management functions have been segregated by business specialization i.e. C redit Risk, Operational Risk, Market Risk, Credit Administration, Risk Architecture and Risk Analytics. Risk Analytics: Risk Analytics is an integral part of the credit process. The objective of Risk Analytics is to limit portfolio concentrations, reduce volatility, achieve optimum earnings and create shareholder value. It also incorporates portfolio strategy and planning. The Ris k Analytics is a relatively new concept in Pakistan, and the function at ABL has started managi ng portfolio risk through launch and usage of risk rating model, design and launch of a new C redit Application Package, that ensures a risk-based approach to credit presentations and allows pursuing systematic data gathering with a view to migrating to advanced approach
es. Institute of Business & Information Technology
Credit Administration: Credit Administration s role is to minimize losses that could arise due to securit y and documentation deficiencies. The Credit Administration unit constantly monitors t he security and documentation risks inherent in the exiting credit portfolio. This function operates through eight regional departments located all over the country. All these functions are operating in tandem to improve and maintain the health o f the lending portfolio and keeping aggregate risk within the Bank s overall risk taking capacit y. Credit Risk: Credit Risk Management at ABL is divided in to two branches; 1. Corporate & Financial Institutions Risk 2. Commercial & Retail Risk This function ensures that the risk exposures undertaken match the risk appetite of the Bank, and that proper credit approval procedure are adhered to. Identification and Mon itoring of problematic exposures and to take proactive measures to minimize the financial l oss to the bank is also a responsibility of this function. Market Risk: Market Risk is defined as any fluctuation in value of the portfolio resulting fr om changes in market price and market parameters, such as interest rates, exchange rates and s hare prices. The Bank intends to build an effective Market Risk Management unit to independen tly identify measure, monitor and control the potential losses that may arise from t he Bank s activities in financial market. Operational Risk: It includes risks that primarily arise from internal processes of the Bank. Oper ational Risk Management unit is developing an effective system for identification of critical risk areas, and developing processes/controls to mitigate these risks. Institute of Business & Information Technology
Commercial & Retail Banking Group: All the regional heads of Allied Bank reports the Commercial and Retail Banking Groups, The hierarchy of the Allied Bank is as follows: ONE GROUP CHIEF OF CRBG FOUR GROUP HEAD (Central-I, Central-II, South and North)
TWENTY REGIONAL HEAD
BRANCH MANAGERS Institute of Business & Information Technology
Operation Group: Operations Group, apart from re-engineering the existing procedures to ensure sa fe and smooth conduct of Banks operational activities also focuses on supporting the fi eld offices in pursuit of their business objectives and goals while maintaining adequate contro ls from a risk perspective. Group also assisted in launching of a variety of value added services facilitati ng bank s account holders/customers by offering them a wider product range and efficient d elivery. Operations Group is divided into the following five areas. 1. Alternative Delivery Channels provides innovative and value added I.T. based sol utions to the Bank s clients. 2. Branch Operations supports the field functionaries through procedural manuals, b ranches rationalization, fully automated inter branch & nostro accounts reconciliations. It also provides support Hajj & Zakat matters. During 2005, it has developed a number of new procedural manuals including ATM, Allied Online, Remittances, and Cash & Teller etc. 3. Treasury Operations supports Treasury front office in settlement of its trading/ investment activities in Foreign Exchange, Money Market and Stock Market besides providing operational support in cash management to the branches and other business areas of the Bank. 4. Establishment caters to the Bank s requirements for printed stationary, operating and fixed assets, insurance and security arrangements at the central office level. 5. Engineering is responsible for the purchase of new properties and construction/r enovation of the existing/newly hired premises. Information Technology Group: The Allied Bank Ltd has a separate Group for Information Technology which looks after the entire bank s automation. The bank s major achievement in automation is that 100% branches are computerized and inter-connected and these branches offer the custo mers full range of online banking services. The bank also offers most of the currently sou ght after technology based products including Internet Banking.
The IT Group is presently structured in three areas namely 1. Core Banking T24 2. Software Services 3. Office Automation / Technical Services 4. Operations Institute of Business & Information Technology
But with the launch of the Core Banking project driven from Head Office at Lahor e, the IT Group will be re-structured very shortly. A complete revamping of the IT Group is underway to cater to the expansion of ac tivities within the IT Group and to create capacity for the Core Banking Project. Moreove r, the IT Group will extend its support to the newly created Regional Offices as well. The new IT Organization is expected to grow both vertically and horizontally and a substant ial number of new hiring will take place to fill the gaps within the new organization chart. Human Capital Group: The group defines the organizational structure and functional responsibilities o f each group. It approves staff strength, key appointments, salary revisions, bonuses and any special allowances. It nominates the management personnel on the boards of other compani es / subsidiaries. It also recommends amendments in Human Resources Policy to the Boa rd. Besides monitoring performance of Human Resources Group, the committee also over sees certain H.R. related management committees. Corporate & investment Banking Group: The Corporate Investment Banking Group (CIBG) holds the Bank s loan portfolio and enjoys a leading position in corporate lending in the country. It offers a wide range o f financial services to medium and large sized public and private sector entities. These ser vices include, providing and arranging tenured financing, corporate advisory, underwriting, cas h management, trade products, corporate finance products and customer services on all bank related matters. ABL C&IBG was established in 2005 and focuses on the Investment Banking market. It has the highest number of Successful Arrangement and Participation in Key Pri vatization & Acquisition Financing Transactions achieved by any Investment Banking Group in Pakistan. C&IBG Ranges of Services:
Finance Group: Finance Group plays a central role in strategic decision making, transparent fin ancial reporting and enhancing the economic value of the Bank. It also provides support to the business groups in performance analysis and launching new products and initiativ es. Finance Group has three major areas: -Planning and MIS arm of the Finance Group translates financial and operational data into strategic information for an efficient and effective decision making. -Financial and Regulatory Reporting arm of the Finance Group provides timely, relevant and reliable information to the shareholders, regulators and other stakeholders while following the statutory requirements and international best practices. -Taxation wing of the Finance Group manages the Bank wide tax matters and endeavors to bring tax efficiency while complying with the tax laws. Corporate Affair Group: Corporate Affairs Group is responsible for compliance of all legal and statutory corporate requirements under Corporate and Banking laws and Regulations. Besides arranging Board of Directors and Shareholders meetings, it co-ordinates meetings of the Strategic Pl anning & Monitoring Committee of the Board,and Management Committee. The corporate group has two wings: CORPORATE AFFAIRS WING: 1. To deal corporate matters with Security and Exchange Commission of Pakistan, Company Registration Office Lahore, Stock Exchanges and State Bank of Pakistan. 2. To arrange meetings of the Board of Directors and preparation of the Agenda for such meetings. 3. To assist Company Secretary in all Corporate and Board Affairs. 4. To assist Company Secretary in implementation of the decision of the Board. 5. To obtain approvals through circulation on emergent proposals from the Directors . Institute of Business & Information Technology
6. To obtain approvals through circulation on the cases from the Board of Directors , Strategic Planning & Monitoring Committee. 7. To maintain record of Board of Directors, S. P. & M. C. Other Committees along w ith former Executive Board. 8. To arrange meetings of the Management Committee and prepare agenda for such meetings. 9. To affix company seal on Powers of Attorney, Shares and other documents as & whe n required and keeping its record. 10. To keep liaison with Govt. nominee and non-employee Directors of the Bank. 11. To assist Group Chief in carrying out different assignments entrusted by the President. 12. To provide information to Credit Rating Agency and co-ordinate with them in the process of Entity Rating. 13. To co-ordinate with Share Wing and Finance Group for arranging AGM/Extra Ordinary General meetings. 14. To provide information s to external Auditors and SBP Auditors. SHARES WING: Shares Wing a part of Corporate Affairs manages shareholders matters and co-ordin ates with the Shares Registrar for the transfer and issue of Bank s shares. 1. To supervise Government Compensation Bonds. 2. To make correspondence relating to ABL Shares with Employees / Legal Wing / Registrar / shareholders. 3. To make arrangements for floatation of shares & TFCs and payment of dividend on behalf of public limited companies. Institute of Business & Information Technology
SAM Group: The Special Asset Management Group further grouped into three wings namely: 1. Legal Affairs Wing 2. Special Vigilance Wing 3. Corporate & Commercial Wing LEGAL AFFAIRS: The personnel engage with Legal Affairs is responsible for monitoring of all leg al matters pertaining to the bank, covering functions of rendering opinions of applicable l aws, to deal with special tasks and assignments , advice on legal issues relating to operatio nal matters, legal compliances and to ensure remedial and litigation management. This diligently provide counseling on all legal matters including suits filed, e xecutions of decrees & criminal complaints etc;. It coordinates with the advocates on Bank s pa nel; ascertain their enlistment and selection of appropriate lawyers in complicated l egal cases which is one of its core responsibilities. Through its law officers, following objectives are achieved. FUNCTIONAL RESPONSIBILITIES 1. To render legal advices and guidance sought by the branches in matters of legal significance and involvement. 2. To provide assistance to the branches/offices in filing of suits, Execution appl ication and in other Legal matters. 3. Follow-up of all the pending Suits, Decreed cases and Executions. 4. To impart legal opinion on documents viz. Succession Certificates, Bond of Indemnity, Staff & Executives H.B. Finance cases etc. 5. To prepare and submit all statements in respect of Suits Decreed and Executions filed by or against the Bank for submission to concerned quarters as per proforma A to I attached. 6. To attend all legal matters and provide assistance to the Group at Central Offic e, Karachi. 7.
To process proposals for enlistment of Advocates on Bank s panel, duly recommended by the Field Offices. 8. To maintain record pertaining to under Suit /Decreed/Execution Cases and submiss ion of returns to SBP on fortnightly/monthly/half yearly/yearly basis.. 9. To scrutinize documents and to impart legal opinion on various property/charge, documents, agreement.. 10. Examination of Lease Agreement, Bank Guarantee and Bid Bonds. Institute of Business & Information Technology
CORPORATE & COMMERCIAL WING OF SAM: In order to pursue the strategic goals, following five units are instrumental wh ich perform various functions to achieve tactical and operational goals. PROCESSING UNIT: Each Area Manager of Processing Unit will attend the cases of NPL A/Cs of respec tive area in line with Bank s approved strategy. The Area Manager will process the proposals of settlements, rescheduling / restr ucturing, with or without financial relief in shape of waiver/write-off received through S AM Branches of respective area and put up the proposals with proper Analysis keeping in view the prudential regulations, financial aspects of defaulting borrowers and others fac ts about the proposal. The Area Manager will handle the proposals in respect of incentives to the staff on account of Cash Recovery in terms of Bank s Policy and put up the proposals with their Analys is. The Area Manager examines the proposals received from SAM Branches for grant of permission of publications, approval for sale/disposal of mortgaged/pledged asse ts, deployment of security guards and formation of sale Committee where-ever require d, and submits office notes for approval of valuation and legal and misc. expenses. The Area Managers will closely monitor and make follow up with Field Offices /SA M Branches asking for implementation in respect of cases settled/approved by compe tent authority The Area Manager will prepare the cases in respect willful defaulters to be subm itted to SBP for issuance of 7 days notice to the borrowers/guarantors/mortgagors by the Gove rnor, SBP, under NAB ordinance 199. The Area Managers will co-ordinate with Risk Management Group with regard to implementation of BASLE II accord as per SBP directives. The Area Manager has to make liaison with the Risk Management Group with regard to classification of accounts and to deal with the matters relating to placement/de letion of names of defaulters on Exit Control List (ECL), and correspondence thereon with SBP/Mi nistry of
Interior, Islamabad. Institute of Business & Information Technology
DATA PROCESSING / MIS & SBP REPORTING UNIT: The Area Manager of this Unit collects data from SAM Branches; consolidate the s ame for onward submission to SBP and Management for its review as part of Management Information system. The other functions of this Unit comprise of: 1. Maintenance of data of the Classified NPL accounts. 2. Consolidation of fortnightly Performance of Recovery Position of all SAM Branche s for perusal of line authority. 3. Preparation of periodical Recovery Position for submission to SBP through Financ e Group. 4. Preparation of Information memorandum related to NPLs as desired by line authori ty. NAB AFFAIRS UNIT: The Area Manager of this Unit handles with all the matters relating to, NAB in c onnection with Non Performing Loans. The other functions of this unit are summarized as fo llows:
Collection, consolidation and submission of information under section 19 of NAB Ordinance to NAB Islamabad, NAB Cell at SBP and NAB offices in Provincial Headquarters, and maintenance of record thereof. WRITE-OFFS & PROVISIONS UNIT: The Area Manager of this Unit maintains the provisions held against classified a ccounts in close co-ordination with RMG & Finance Group. The other functions of the unit ar e summarized as follows: 1. To process the request of SAM Branches for issuance credit advice against the approved write-off loans. 2. Maintenance of proper record of all the written-off /waiver cases of the bank. 3. Providing record/files of write-off/waiver proposals approved at different level s, for external as well as internal auditor and coordinate with them and participate in meeting with regard to disagreed cases of write-off/waiver with BID, SBP. 4. Submission of periodical consolidated statements of write-off/waiver to SBP, Fin
ance Group as well as to Risk Management Group. 5. Preparation of Information Memorandum for line authority in respect of written off/waiver cases for their review. 6. Provide necessary data to Finance Group in respect of borrowers where write off implemented for publications in the annual reports. Institute of Business & Information Technology
BUDGET & ADMIN UNIT: The Area Manager of this unit deals with operating expenses budget of 05 SAM Bra nches as well as SAM Group. The Units further deals with HR related activities of employees posted in SAM Br anches as well as in SAM Group. Special Vigilance Wing: Operational Risk is gaining importance in the banking industry in the wake of in creasing complexity of operations and the risks involved therein. The incidents of intern al and external frauds and forgeries are included in list of the operational risk events that ha ve the potential to result in substantial losses. Keeping in view the size, sophistication, natur e and complexity of operations of bank, Allied Bank of Pakistan opened a separate wing for it. In view of the importance of frauds prevention/mitigation strategy in overall op erational risk framework and to improve the mechanism for active supervisory response, the Alli ed bank has formulated the revised reporting requirement on frauds/forgeries/dacoities c ases, which is submitted to State Bank of Pakistan on quarterly bases. Creation of Special Vigilance Unit (SVU) at Strategic Asset Management Group The competent authority has approved and created Special Vigilance Unit (SVU) previously known as Control Unit to monitor the Operational Loss cases of Frauds, Forgeries and Dacoities set up at Strategic Asset Management Group SAM Group, Ce ntral Office Karachi in January 01, 2008 in the light of decision of audit committee t aken in its 43rd meeting held on October 10, 2007, to make pursuance of the cases of Frauds, Forgeries and Dacoities. Transfer of Special Vigilance Unit (SVU) from Karachi to Lahore: Audit committee again decided in its 46th meeting held on July 04, 2008 that the function of reporting of frauds, forgeries and dacoity presently being done by the Audit and Credit Risk Review Group (ACCRG) may be transferred to Strategic Asset Management Group SAMG effective from August 01, 2008, excepting the functions of investigations which will remain with Audit and Inspection Group (AIG). With the approval of competent authority, the Special Vigilance Unit (SVU) now l ocated at
Strategic Asset Management Group (SAMG), Lahore. Institute of Business & Information Technology
Scope of the unit, its TOR, Organogram, Staff requirements and Reporting structu re was approved by the competent authorities. Scope of the Unit: 1. The unit will monitor all the cases of Frauds committed by the staff exclusively o r in collusion with other where bank sustain operational losses. 2. To monitor all the cases of Dacoities occurred at the branches/offices, carrying l oss of cash and other valuable of banks. 3. To pursue with law enforcing agencies for expeditious disposal of the cases of Frauds/Docoities against the culprits. 4. To settle the claims with insurance co. in respect of operational losses on acco unt of frauds and dacoities. 5. Frauds and Forgeries reporting to the management or State Bank of Pakistan. Term of Reference: On receipt of initial reports about the incidents of Frauds, Forgeries and Dacoi ties, Special Vigilance Unit (SVU) will undertake the following actions: 1. To liaison with Audit and Inspection Group (AIG) to ascertain the modus operandi/quantum of loss and tentative names of responsible persons. 2. To visit the branch/office where incident took place, for personal verification of the facts. 3. To make efforts for the catch hold of the culprits and to ensure that the losses are made good by recovering the cash/valuables from them. 4. In case of no instant recovery to keep lien on the assets held by the culprits a nd their associates and to execute the agreements etc. 5. To acquire the services of suitable lawyers and to coordinate for lodgment of FI R and taking other legal steps. 6. To obtain and provide details about incident/loss and arrange lodgment of proper claims with concerned insurance co. in case of Allied Bank Limited it is EFU. 7. To refer the cases of delinquent staff to Human Resource Group (HRG), recommending suitable actions in accordance with rules and regulations.
8. To liaison with agencies like Police/FIA/NAB for recovery of accounts, finalizat ion of cases and submission of challans at concerned courts and pursue the cases. 9. Submission of Quarterly statement of Frauds/Forgeries/Dacoities on the prescribe d format to the Operational Risk Unit, Banking Surveillance Department of State Ba nk of Pakistan within 15 days of close of quarter. 10. Maintenance of database of operational losses of frauds, forgeries and dacoi ties and its reporting to the Operational Risk- RMG. Institute of Business & Information Technology
11. Appraisals and Problems at ABL: Employees at ABL facing these problems i.e.: Fewer Incentives: In back offices as compared to the branches the incentives are very less given t o the employees and this arises the dissatisfaction among them. Work Burden: In back offices the staff is very few as compared to the work load so the few em ployees bearing the more work burden and this create discomfort in them. No Job Rotation: Most of the employees stick to the one job for long periods and having no grip o n all the operations. Still Manual Work: In the some offices and wings of ABL the employees still depend on manual work w hich causes slow performance. Favoritism: The most discouraging thing in ABL is that the promotions of employees are very late and mostly based on favoritism. Institute of Business & Information Technology
Chapter 2 Analysis Institute of Business & Information Technology
SWOT Analysis Institute of Business & Information Technology
Strengths: 1. Brand name: earned a reputation for extending quality services. 2. Allied Bank Limited was the first Muslim bank to be established in Pakistan. 3. Allied Bank Limited proudly extends its ovation over the nationwide or internationally by opening new and more branches to facilitate the customers and having more than 850 branches in Pakistan. 4. Allied Bank has become the first bank to participate in the Sustainability Finan ce Facility of the IFC s Global Trade Finance Programme. IFC is a member of the World Bank Group. 5. The bank is passionate about high performance, innovation and delivering value t o its customers. 6. With a vision to make ABL one of the most technologically advanced organization in the country with ability to provide real time services to its client the BOD emb arked to implement state of the art Core Banking Solution TEMENOS at ABL, that is working in more than 500 locations worldwide. 7. ABL has opened the Management Development Center MDC that caters to the growing needs of ABL staff through computerized training workshops and seminars. 8. Training needs analysis to be conducted on annual bases to identify training gap s. 9. ABL has the large network of ATM throughout the nation. 10. ABL do the time to time monitoring over its different wings and groups to in crease efficiency. 11. The Bank has the most experienced and the least experienced staff, which is a good combination of experienced heads and exuberance of youth. 12. Successfully launching new Product Lines. 13. With the objective of achieving decentralization and cutting down expenses, the decision making has been reduced from two to four tiers. 68 controlling offices, comprising of 4 provincial, 18 circle and 46 zonal offices have been consolidate d into 16 regional offices. 14. A centralized Special Asset Management Division has been established for expeditious recovery and settlement of non-performing loans. 15. ABL offers the privilege of using thousands of ATMs of all banks without the extra
charge of Rs 15 to its customers. 16. At ABL the customers who have more than one account can have the facility of the same account number only the suffix is changed for the easy remembrance. 17. For employees entertainment and relaxation, ABL gives the facility that the employees may get the 36 medical leaves and 1-month vacation in one year with th eir pay. Institute of Business & Information Technology
Weaknesses: 1. ABL did not introduce any Islamic product. 2. The controls of Heads are not effective. 3. In spite of the presence of technology many jobs are done manually. 4. ABL is not enhancing the new obligors. 5. Fewer incentives in back office as compared to the branches. 6. ABL credit group do not sanction the loan to the lawyers, politicians and the fe male having no blood relative. 7. In back offices the employees are less so it creates more work burden on the exi sting one. Opportunities: 1. The policies of the new government to uplift the economy and pursue financial se ctor reforms are expected to yield positive results in the banking industry of the co untry. The ABL is well praised to avail promising opportunities. 2. As a result of different steps taken by the government regarding the betterment of the economy, small borrowers are attracted to get the financing and start business. So, the ABL has an opportunity to attract the customers by giving them more attracted schemes. 3. They have wide area network in all over the Pakistan, if ABL can made it possibl e the fast delivery of funds from abroad through online banking, it can cover the majo r market of Pakistan which still is capturing by Hundi . Threats: 1. The biggest threat in the banking sector is the continuous downfall of the count ry economy since the last few years. 2. Other treat which ABL faces is the policies of the Government; tax charged on th e income of banking co. is much than the income of other companies. 3. Sudden rise and fall in the trade and industry conditions and stock exchange bus iness of the country also adversely affect the growth of banking sector.
4. As the situation of Frontier Province of Pakistan is not sound and ratio of daco ity cases in branches is high so it is the big threat to the Bank. 5. The default ratio of customers who are availing the credit facilities from the A BL is very high due to the economic recession in Pakistan. 6. Also the threat of new entrants exists there. Institute of Business & Information Technology
Financial Analysis: Institute of Business & Information Technology
Vertical & Horizontal Analysis: Vertical Analysis 2004 2005 2006 2007 9.5% 5.8% 26.2% 52.6% 2.4% 3.6% 100.0% 2008 7.0% 4.3% 22.5% 58.1% 3.0% 5.0% 100.0% 9.5% 13.1% 34.7% 34.6% 2.2% 5.9% 100.0% 8.0% 10.4% 37.0% 38.4% 1.6% 4.6% 100.0% 9.4% 3.0% 23.3% 57.7% 2.5% 4.1% 100.0% 9.8% 7.6% 18.6% 57.2% 2.6% 4.3% 100.0%
December 31 Assets Cash and balances with treasury and other banksLending to financial institutions Investments -net Advances -net Operating Fixed assetsOther assets Total assets -net of provisions2003 Liabilities Institute of Business & Information Technology
Customer depositsInter bank borrowingsBills payableOther liabilities Sub-ordinate loans Total Liabilities Share capitalReserves Un -appropriated profit / (loss) Equity -Tier ISurplus on revaluation of assets Total Equity 97.2% 2.3% 1.5% 2.4% 0.0% 103.4% 0.9% 7.3% -5.5% -4.1% 0.8% -3.4% 81.6% 8.1% 1.6% 2.1% 0.0% 93.4% 2.8% 3.0% -4.1% 6.1% 0.5% 6.6% 83.8% 5.0% 1.3% 2.3% 0.0% 92.4% 2.3% 2.4% 1.4% 6.7% 0.8% 7.6% 81.7% 7.3% 0.9% 2.0% 1.0% 93.0% 1.8%
1.9% 2.2% 6.4% 0.6% 7.0% 82.5% 7.2% 1.1% 2.3% 0.8% 93.8% 1.7% 1.6% 2.2% 5.8% 0.5% 6.2% Institute of Business & Information Technology
81.1% 7.6% 0.8% 3.7% 0.7% 93.9% 1.8% 1.6% 2.3% 5.7% 0.4% 6.1% 283.4% 608.0% 1040.5% 131.5% 427.3% 173.3% 562.5% Horizontal Analysis Assets Cash and balances with treasury and other banksLending to financial institutions Investments -net Advances -net Operating Fixed assetsOther assets Total assets -net of provisionsLiabilities Customer depositsInter bank borrowingsBills payableOther liabilities Sub-ordinated loans Total Liabilities Share capitalReserves Un -appropriated profit / (loss) Equity -Tier ISurplus on revaluation of assets Total Equity 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 110.0% 105.3% 140.7% 146.3% 98.3%
101.6% 131.8% 160.9% 37.6% 110.3% 273.5% 181.8% 113.6% 163.9% 220.8% 124.0% 115.3% 354.2% 248.3% 155.2% Institute of Business & Information Technology
214.5% 271.4% 119.9% 206.1% 414.2% 290.8% 163.3% 272.4% 229.8% 102.8% 202.9% 523.8% 428.9% 264.4% 312.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 110.7% 470.5% 143.0% 113.1% 119.1% 414.3% 2035.7% -97.3% 194.0% 90.3% 258.0% 141.3% 363.8% 138.1% 157.7% 146.5% 422.2% 1020.6% 42.1% 265.2% 182.8% 366.1% 180.4% 690.9% 128.5% 180.6% 192.9% 422.2% 1099.4%
86.4% 333.3% 163.0% 445.0% 231.1% 260.4% 860.7% 1042.5% 197.1% 166.6% 258.6% 480.5% 247.1% 506.6% 1084.6% 107.4% 378.1% 164.3% 500.1% Institute of Business & Information Technology
Financial Ratios: 2004 Rs. in Millions 2007 2008 December 31 CASH FLOW STATEMENT -SUMMARY Cash Flow from Operating ActivitiesCash Flow from Investing ActivitiesCash Flow from Financing ActivitiesCash & Cash equivalent at the Beginning of the YearEffe ct of Exchange Rate changes on Cash & Cash equivalentCash & Cash equivalent at t he End of the Year FINANCIAL RATIOS Return on equity (ROE) Return on assets (ROA) Profit before tax ratio (Profit before tax / Gross Income) Gross spread ratioReturn on capital employed (ROCE) Advances to deposits ratio (ADR) -GrossAdvances to deposits ratio (ADR) -NetInco me to expense ratioCost to revenue ratio Growth in gross incomeGrowth in net profit after taxTotal assets to shareholders funds Intermediation cost ratio NPL ratio Net infection ratio Weighted average cost of debtCapital adequacy ratio (CAR)* SHARE INFORMATION Cash dividend per share Proposed bonus issue per share Dividend yield (based on cash dividend) Dividend payout ratio (Total payout) Earnings Per Share (EPS) ** Price earnings ratio *** (PE x) Market value per share -highest / lowest during the year Book value per share OTHER INFORMATION Non -performing loans (NPLs) Imports and Exports businessNumber of employeesNumber of branches 2003 Restated 2006 8,253 (8,512)
(12) 10,803 58 10,590 4,523 (17,183) 14,176 10,483 109 12,107 (5,893) 11,664 12,129 (21) 17,877 9,328 (4,241) 1,403 17,753 124 Institute of Business & Information Technology
24,368 46,350 (38,461) (1,904) 24,303 65 30,353 564 (3,544) (1,755) 29,842 511 25,618 %%%%%% % Times %% % Times %%%% % 0.34% 16% 77% 44% 36% 1.4 69.5% 14% 136% (24.1) 3.8% 35.7% 20.93% 3.54% -12.33% 8% 0.14% 8% 85% 8% 55% 47% 1.5 66.5%
4% -50% 16.4 3.4% 22.0% 8.28% 2.45% 16.64% 28% 1.78% 49% 80% 28% 74% 69% 2.30 43.5% Institute of Business & Information Technology
58% 1511% 14.9 3.0% 10.6% 3.64% 6.78% 12.17% 30% 1.98% 52% 61% 26% 74% 70% 2.43 41.1% 31% 42% 15.5 2.9% 6.91% 1.96% 9.09% 12.80% 24% 1.42% 40% 52% 21% 68% 64% 2.43 41.1% 17% -7% 17.4 2.6% 6.36% 0.74% 9.96% 10.26% 21% 1.21% 34% 46% 19% 75% 72% 2.16 46.2% 21% 2% 17.6 3.0%
6.16% 1.46% 11.50% 10.90% Rs. Rs. % % Rs. Times Rs. Rs. 1.27 Institute of Business & Information Technology
(37.4) ---0.43 -23.3 2.50 2.9% 36% 4.78 12.6 86.5 32.4 2.50 2.00 2.7% 46% 6.80 9.5 93.5 39.4 3.00 2.50 2.00 1.00 2.3% 8.0% 66% 54% 6.31 6.43 17.2 4.9 130.2 31.3 36.9 34.6 Rs. in millions Rs. in millions Nos. Nos. 17,833
56,868 6,859 752 15,383 72,765 6,768 735 12,699 96,072 6,909 741 10,479 113,571 7,139 742 11,355 13,772 150,698 194,186 8, 181 8,325 757 766 2005 Future Outlook: Institute of Business & Information Technology
The global financial crisis has its effects trickling down to the banking system . The financial sector is facing its lows but still on its comparative basis its bette r than other neighboring countries owing to regulations and role of SBP to take timely correc tive measures. Measures include relaxation of CRR and SLR in phases. The banking sector s spread continues its rising trends after witnessing a dip to the level of 6.78% in June 2008 that has been taken as an after effect of minimum profit p ayment of 5% on saving accounts. The profits shows that long term investment in Pakista ni banking system will be lucrative, as the asset quality is quite satisfactory. Challenges faced by the economy in general and banking sector in particular, inc lude restrained liquidity, slowdown of economic activities and high inflation. Despit e of these issues, ABL has been able to maintain its profitability and equipped to face cha llenges with its dynamic management and trained workforce. Institute of Business & Information Technology
Chapter 3 Internship Activities Institute of Business & Information Technology
Weekly Activities: First week: In the first week of my internship training I have worked on the process flow ch art of fraud, forgery and dacoity. I have learnt how the reporting procedure of frauds, forger ies and dacoities has done? The process flow chart of reporting of any incident about fr auds and dacoits in Allied Bank of Pakistan is here: a. Cases of frauds/forgery and gross negligence in CRBG or CIBG branches: Detection of incident Immediate intimation to GCA and CRRG by the line management compulsorily within 1 working day from the occurrence /detection of the incident
Finalization of detailed audit report on the incident by Audit and CRRG
Audit Report/findings to be sent to the legal cell of SAMG by A&CRRG
Legal Cell of SAMG to draft the Charge Sheet, to be vetted by the lawyer and sent it to the respective Regional Head CRBG with three working days The alleged employee shall have seven days to respond to the Charge Sheet Institute of Business & Information Technology
Reply received from alleged employee on Charge Sheet, to be forwarded by the Regional Head CRBG directly to the enquiry committee within two working days with copies to SAMG
Enquiry committee to conduct an enquiry within 1 week of the receipt of charge sheet from alleged employee through the Regional Head CRBG The Central Administration Action Committee to meet on the First and Third Wednesday of each month, review the case, takes the decision within 2 weeks of report enquiry
Punishment is communicated & verdict implemented within 1 working day of the decision of The Central Administration Action Committee Institute of Business & Information Technology
2nd week: Reporting Structure Of Fraud, Forgery & Dacoity: . Whenever an incident of fraud forgery and dacoity takes place the concerned Regi onal Head/ Head Branch Operations or Group Head or Regional Operation Manager will immediat ely give such information to the Head of Special Vigilance Unit (SVU) . . After getting the documented information SVU makes the Office Note of the whole in cident and mail one copy to the SP&MC, Group Chief SAM, Group Chief CBRG, regional head and the branch as well. During the first week of my internship training I have write 7 O ffice Notes after reviewing the audit report and the document that send the concerned branch. One of the Office Notes that I made is scanned here and also attached in annexure. OFFICE NOTE: Institute of Business & Information Technology
. Also SVU immediately issue the emergency report of the incident to Management an d State Bank of Pakistan SBP in specific terms and conditions within the duration of 72 hours otherwise State Bank of Pakistan will Charge the Penalty to the bank. . The concerned Regional Head/ Head Branch Operations or Group Head or Regional Op eration Manager after that submit the FIR to the SVU. . Audit and Inspection Group (AIG) will immediately be contacted to depute a team to make a thorough probe and to submit the investigation to SVU. . SVU immediately report the Insurance Co. i.e. EFU for the claim. Institute of Business & Information Technology
. Insurance co. (EFU) then appoints a surveyors and report it to SVU. Surveyors sh ould submit the survey report with policy documents within period of 60 days. . The following documents are required for the survey to the surveyors: 1. Log Book (one month record) 2. Cashier s daily memo book 3. Cashier s daily cash position 4. Copy of all cheques/credit slips/withdrawal of log book 5. Detailed statement of happening by the branch manager 6. Attested copy of FIR. 7. Policy Progress Report 8. Claim from duly filled in, signed and stamped . After the survey report of surveyor Chief Manager of the concerned branch submit s the Police Progress Report to the surveyor so that insurance claim will be finalize. . During this process of Final Police Progress report SVU requested to release 80% of insurance claim under banker s blanket insurance policy and 20% after the submission of Fina l Police Progress Report to the surveyor. Insurance co. (EFU) deducts the charges of insu rance policy i.e. Rs.50, 000 and bank transfer this loss or write off this amount to the Expense Ac count to balance the figure of Suspense Account . Claim Lodged Rs. 8,001,200 Less: Policy Deductible 50,000 Net Loss 7,951,200 Less: 80% received & reimbursed to bank 6,360,960 Balance 20% receivable 1,590,240 . Then enclose the Final Police Report and request to insurance co. (EFU) to disbu rsement of insurance claim under banker s blanket insurance policy that is remaining 20%. . SVU issued Legal Letter of Subrogation to insurance co. and granting permission th at all rights title and interests transferred to the insurance co. in the said cash that it sh all now the property of insurance co. and bank have no right on it that police did not recover and has n ot found yet. The scanned copy of Legal Letter of Subrogation is here also attached in the annexure.
. In the case if no amount is recovered under the banker s blanket insurance policy then at Allied Bank certain powers are defined who have rights to write off the lost/unrecovere d amount involved in cases related to inter branch, other assets, fraud and forgeries, lo oting/theft of cash. These powers are delegated to the followings: Institute of Business & Information Technology
Approving Authority Powers Group Chief Operations, Group Chief Risk Management Rs. 500,000 Group Chief, Operations with the President Rs. 1,500,000 Strategic Planning and Monitoring Committee (SP&MC) Rs. 5,000,000 Commercial Retail Banking Group (CRBG) Rs. 300,000 Board of Directors (BOD) Rs. 500,000 . Such report will immediately be put up before senior Management in order to proc eeds with suggested actions. . SVU will liaison with the concerned branch/office controlling tiers and the exte rnal agencies, for lodgment of proper repots/complaints as per law and to effectively monitor the l egal action as well as the task of recovery and to submit the progress report. Institute of Business & Information Technology
3rd Week: All banks/DFIs are advised to submit a quarterly statement of frauds/forgeries/d acoities on the revised format, within 15 days of the close of each calendar quarter along with a soft c opy to the Banking Supervision Department. The quarterly report includes all actual as well as attempted fraud cases even if the bank may not have sustained any monetary loss. Therefore, cases where bank recovers the entire amo unt involved and does not suffer any loss must also be reported to SBP. Furthermore, banks/DFIs l separately report to this Department all material inci dents of frauds/forgeries/dacoities etc. of Rs. one million and above on urgent basis as under: a) Preliminary report within 2 working days of the occurrence of such incident b y mentioning the date of the incident and other information about the case as available at the time of su ch reporting; and b) Detailed report within 15 days of the occurrence of such incident on the form at. I prepared the quarterly report of Fraud, Forgeries and Dacoites of Allied Bank of Pakistan that submitted to the State Bank of Pakistan for the 2nd Quarter of 2009 that is ended at June 30, 2009. The report was submitted on July 17, 2009 to the State Bank of Pakistan. Institute of Business & Information Technology
ANNEXURE
(FORM-I)
ANNEXURE "A" (Form-I) ALLIED BANK LIMITED, Special Vigilance Unit, SAM Group HEAD OFFICE, LAHORE SUMMARY POSITION OF CASES OF FRAUDS /FORGERIES /DACOITIES FOR THE QUARTER ENDED3 0.06.2009 1 Cases Detected prior to thequarter under report whichwere still outstanding at thebeginning of this quarter ( including those closed duringthe quarter) 1) Seriousfrauds cases 10 (M) andabove* 2. Medium severitycases 110( M)* 3) Lowseverity cases below 1( M)* All No progresscases ** Total (1+2+3) a No of cases 11 23 28 23 62 b Total amount originally involved 795.906 84.285 11.363 758.488 891.554 c Adjustment to amount involved during the quarter*** 0.000 0.000 0.000 0.000 d Total recoveries prior to thequarter under report from old cases 58.574 25.218 4.438 2.032 88.230 e Recoveries made during this quarter from casesoutstanding prior to the quarter Insurance 0.000 2.507 0.312 2.819 2.819 Other sources 0.000 0.350 0.435 0.785 0.785 f Progressive Total Recovery (1d+1e) 58.574 28.075 5.185 5.636 91.834 g Total amount still recoverable (1b+1c-1f) 737.332 56.210 6.178 752.852 799.720 h Provision held against (1g) above 400.427 43.113 5.334 446.388 448.874 i Provision held against (1g) above during the quarter 0.000 10.546 0.321 10.986 10.867
0 Expected Recovery from Insurance 302.423 39.345 3.903 317.758 345.671 Other sources 415.959 19.722 3.022 438.698 438.703 Institute of Business & Information Technology
2 All Cases Detected during the quarterunder report (Whether detected and closedin the same quarter) 1) Serious frauds cases (10M andabove* 2. Medium severitycases 1-10 (M)* 3) Lowseverity cases below 1 (M)* All No progresscases ** Total (1+2+3) a No of cases 0 0 7 0 7 b Total amount originally involved 0.000 0.000 1.210 0 1.210 c Total Recoveries made, from any sourceagainst the cases detected during the quarter under report Insurance 0.000 0.000 0.000 0.000 0.000 Other sources 21.382 0.000 1.210 0.000 22.592 d Total amount still recoverable ( 2b-2c) -21.382 0.000 0.000 0.000 -21.382 e Provision made against (2d) above 0.000 0.000 0.000 0.000 -0.000 f Expected recovery from: Insurance 0.000 0.000 0.000 0 0.000 Other sources 18.950 0.000 0.000 0.000 18.950 SUMMARY POSITION OF CASES OF FRAUDS /FORGERIES /DACOITIES FOR THE QUARTER ENDED3 0.06.2009 ANNEXURE A (FORM-I)
ANNEXURE
(FORM-I)
3 All cases closed during quarter under report 1) Serious frauds cases (10M and above)* 2) Mediumseveritycases 1-10 (M)* 3) Lowseverity cases (below 1M)* All No progresscases ** Total (1+2+3) a No of cases 0 5 9 14 14 b Total amount originally involved ( afterall adjustments to original amounts) 0.0 00 11.400 1.929 12.613 13.329 c Total recoveries prior to the current quarter 0.000 9.713 0.719 10.33 10.432 d Recovery during the current quarter from: Insurance 0.000 0.937 0.000 0.573 0.937 Other sources 0.000 0.750 1.210 1.71 1.960 e Total recoveries (3c+3d) 0.000 11.400 1.929 12.613 13.329 f Total amount recoverable before closure of cases ( 3b-3e) 0.000 0.000 0.000 0.000 0.000 g Write off against provision 0.000 0.000 0.000 0.000 0.000 h Direct write off 0.000 0.000 0.000 0 0.000 4 Cases outstanding at the end of quarterunder report 1) Serious frauds cases 10(M) andabove)* 2. Medium severitycases 1-10 (M)* 3) Lowseverity cases below 1 (M)* All No progresscases ** Total (1+2+3)
a No of cases (1a+2a-3a) 1 11 18 26 9 55 b Total amount originally involved ( 1b+1c+2b3b) 795.906 72.885 10.644 745.875 879.435 c Total cumulative recoveries including this quarter recoveries (1f+2c-3e) 79.956 16.675 4.466 -6.977 101.097 d Total amount recoverable (4b-4c) 715.950 56.210 6.178 752.852 778.338 e Provision held against 4d above (1h+1i+2e-3g) 4 400.427 53.659 5.655 446.388 4 59.741 f Expected recovery from: Insurance 302.423 39.345 3.903 317.758 345.671 Other sources 434.909 19.722 3.022 438.698 457.653 Institute of Business & Information Technology
Annexure
(Form II)
DETAILS OF ACTUAL/ATTEMPTED FRAUD, FORGERY AND DACOITY CASES OUTSTANDING DURING THE QUARTER ENDED 31.03.2009 Fraud classification (Enter Code) S # Fraud Identificatio n Number Name of Branch & Provinc e Natur e Individu al Involved Amoun t Involve d Is it an Emergenc yReportedFraud Case Date of Commitme nt of Fraud Date of Detectio n 1 2 3 4 6 7 8 9 10 1 0501430100 1 Khori Garden Branch mergedwith Jodia Bazar Branch, Karachi Sindh 03' 02' 01' Old case 19.09.01 to 25.09.01 25.10.01 2 0501300000 1
KaghziBazar Branch mergedwith Bomba y BazarBranch, Karachi / Sindh 09' 03' 01' Old case 2000 to 2002 26.09.02 Total Institute of Business & Information Technology
S pecial Vigilance Unit Annexure A (Form II)
DETAILS OF ACTUAL/ATTEMPTED FRAUD, FORGERY AND DACOITY CASES OUTSTANDINGDURING T HE QUARTER ENDED 31.03.2009 Recovery from other sources (customer/Staff/Services provider) Date of Completion of Investigati on Date of Reporti ng toSBP Original Amoun t Involve d Adjustment before Current Quarter Adjustment duringCurrent Quarter Total Amoun t Involve d Previous Recover y Current Recover y Recover y fromInsuran ce (Total) A(1) A(2) A(3) A=A1+ R1 R2 R3 A2+A3 11 12 13 14 15 16 17 18 19 25.10.01 30.06.02 12.353 0.000 0.000 12.353 0.647 0.000 9.365 23.04.03 30.06.04 19.530 0.000 0.000 19.530 0.000 0.000 0.000 TOTAL 31.883 0.000 0.000 31.883 0.647 0.000 9.365 Institute of Business & Information Technology
Vigilance Unit Group, Lahore Special Allied Bank SAM Ph:0 425941270 Annexure A (Form II)
DETAILS OF ACTUAL/ATTEMPTED FRAUD, FORGERY AND DACOITY CASES OUTSTANDING DURING THE QUARTER ENDED 31.03.2009 Rs. IN MILLION Progressive Total Recov ery Direct Writeoff Writeoff again st Provi sion Total Write-off amount Net Amount Outstan ding ExpectedRecoverythroughInsurance ExpectedRecoverythroughother sources Provisio n before Current Quarter Provisi on duringCurrent Quarter Net Amou nt R=R1+ (W1) (W2) W=W1+ W2 O=A-RW (X) (Y) W(
X+Y) R2+R3 20 22 23 24 25 26 27 28 29 30 10.012 0.000 0.000 0.000 2.341 0.000 2.341 0.000 0.000 0.000 0.000 0.000 0.000 0.000 19.530 Case pending inthe Court of Law. RegionalSettlemen t Committe e has deferred the case till Court's decision. 19.530 0.000 0.000 0.000 10.012 0.000 0.000 0.000 21.871 0.000 21.871 0.000 0.000 0.000 Institute of Business & Information Technology
Spec SA Allied Bank Ph:0425941270 ial Vigilance Unit M Group, Lahore Institute of Business & Information Technology
Annexure
(Form III)
PROGRESS OF OUTSTANDING FRAUDS, FORGERIES & DACOITIES CASES DETECTED / REPORTED IN PRIOR QUARTERS (Serious ( 10 M & above), Medium Severity Cases (1 M & above) Fraud Identification No 05027906001 Status Pending withCourt /Police. NAB Insurance Claim Lodged M/s. Adamjee Insurance company Ltd., declined the bank claim. However, negotiation with officials of Adamjee Insurance Company is under way for reconsideration of bank claim. Action against thestaff if any. Mr. Muhammad Shoaib, Cashier, dismissed from bank's services. Mrs. Saira Ali OG-III, dismissed from bank's services. Mr. Atta ur Rehman, OG-III, dismissed from bank's services. Mr. Faisal Riaz OG-II, dismissed from bank's services. Mr. Munir Ahmed Awan OG-II, dismissed from bank's services. Mr. Yasir Mehmood OG-II, letter of reprimand issued. Is there any progress on casein the quarter, if no, then why. Yes there is progr ess. If progress was made thenpresent position of the case. Negotiations with the top management of M/s Adamjee Insurance Company are under way for reconsideration of bank insurance claim. The bank has taken up the matter with NAB for declaring the culprit as proclaimed offender. Claim of the few claimants has been settled. Institute of Business & Information Technology
FIELD Detail of staff at fault (Name & NIC) Modus Operandi of case Reason for the time lag, if any, i.e. not reported the case in the quarter in which case was detected & reasons if the investigation not completed within 30 days of detection Pending with Court / Steps taken to avoid such incidents in future Points for consideration of SBP, if any. ALLIED BANK LIMITED Police Stat Insurance Claim us lodged Action against the staff if any Any other Institute of Business & Information Technology DETAILS OF ACTUAL /ATTEMPTED FRAUDS / FORGERIES/ DACOITIES CASES SERIOUS & MEDIUM SEVERITY CASES DETECTED /REPORTED DURING THE CURRENT QUARTER Fraud Identification Code. 05024909001 DESCRIPTION Ms. Seher Rana (MG-11 Holder of master Key of Locker) found negligence. CNIC #36302-8410863-8 Mr. Syed Haider Chiragh Kazmi maintaining PLS/B visited thebranch on 26-04-09 op erated the locker #245 and reportedlyplaced gold ornaments there in. On 18-04-09 Mr. MuradKazmi S/o Syed Haider Chiragh Kazmi (additional authority) operated locker # 245 Mrs Seher Rana, Officer arrangedoperation of locker. After operating it, he left the branchwithout informing to the staff. Later on, he came back with his father. Both disclosed that the
gold ornaments weighing about 45 tolas amounting toRs.1.100(M) were not availabl e in their locker #245. Thelocker was got operated again in the presence of Mana ger/ Locker In-charge and found empty. In time reporting to SBP Insurance claim lodged. Under process. All the concerned staff of the branch has been advised to ensure enforcement of the Bank s laid down system/procedures in letter and sprit regarding operation of lockers under their jurisdiction in order to avoid recurrence of such instance in future.
Internship Report 2009 Annexure A (Form IV)
Annexure A Form V Special Vigilance Unit SAM Group, Lahore DETAILS OF ACTUAL/ATTEMPTED FRAUDS/FORGERIES/DACOITIES CASES DETECTED/REPORTED DURING THE CURRENT QUARTER ENDED 30.06.2009 (LOW SEVERITY CASES BELOW RS.1.000 (M) Fraud Classification (Enter Code) Date of Commitment Date of Detection Reason for the time tag if any i.e. not reporting the case in the quarter in which it was detected Modus Operandi Staff Involved (Name & CNIC) Nature & Branc h Busines s Line Individu al Involved Amount Involve d (1) (2) (3) (4) (5) (6) (7) (8) (9) 01 & Shers hah, Karac hi. B-05 01 03 00-03-2009 07-04-2009 In time reporting to SBP Pocketing in
Utility bills collection by Tousif Khan/Teller Tousif Khan/Tell er Institute of Business & Information Technology
Annexure A Form V Special Vigilance Unit SAM Group, Lahore DETAILS OF ACTUAL/ATTEMPTED FRAUDS/FORGERIES/DACOITIES CASES DETECTED/REPORTED DURING THE CURRENT QUARTER ENDED 30.06.2009 (LOW SEVERITY CASES BELOW RS.1.000 (M) Amount Involve d Pendin g withCourt / Police Insuran ce claim lodged Action againststaff if any From Insuranc e Co. From other sourc es Amount outstandi ng Prov ision mad e Net Amou nt Steps taken toavoid such incidents in future (10) (11) (12) (13) (14) (15) (16) (17) (18) (19) 0.429 (M) ---Enquiry against the delinquent staff is under process. ---0.429
(M) ------All branches have been advised to ensure bank s laid down procedure / systems for the collection of utility bills. Institute of Business & Information Technology
STAFF DATA Annexure A (Form VI) (Convicted or Acquitted During the Current Quarter Under Report) Fraud Identification Number: 05016108001 Field. Description. Name of Branch. Hyderi Market Branch, Karachi Amount Originally Involved. Rs.86.691(M) Name of Staff. Mr. Muhammad Aslam Khan Father's Name. Muhammad Ibrahim Khan CNIC No. 42101-9396910-5 Designation/Grade. MG-08/Manager Nature of appointment. (Permanent/Contract etc.) Permanent Period of Service. 26 Years Action taken along-with thedate to take effect from. Dismissed from bank s service vide letter No.CO/HRG/CAAC/09/ 1868dated 31.01.2009 Institute of Business & Information Technology
5th Week: During the 5th week of my internship training in Allied Bank of Pakistan, the ta sk of maintain complete and comprehensive database of all the pending and withdrawal cases of f rauds, forgeries and dacoity since 2005 to till date is assigned to me and I have compl eted that project within one week successfully. 6th Week: During the 6th week of my internship training I have prepared the report of deta iled insurance claim lodged how much rejected from them, overall position of insurance claims a nd the detail of the settled claims some of them is mentioned there. ALLIED BANK LIMITED SPECIAL VIGILANCE UNIT, SAM GROUP, LAHORE DETAIL OF INSURANCE CLAIMS WHICH HAVE BEEN REJECTED BY ADAMJEE INSURANCE CO DURI NG THE YEAR 2009. Sr No Branch Name Amount Involved Amount of Claim Declined Loss No Reasons 1 Napier Road, Lahore 45.000 45.000 05/C/367/002643/12/2003 Gross negligence at the partof branch does not cover any clause of the insurance policy. However, insurance company offered to pay Rs. 22.500 (M) to Group Chief SAM during the meeting dated 24.05.2006held at Adamjee House, Karachi, which was declined by the then Bank s Management as theydemanded 100% claim of loss amount. 2 The Mall, Murree 56.869 56.869 05/C/367/002860/06/2006 The claim rejected due to violation of bank staff s rotation policy. Gross negligence at the part of CRBG, Islamabad by instructing Mr. Yasir
Mahmood, the new Manager to take charge and issue a relieving letter to the culprit Manager, Mr. Muneer AhmedAwan without verifying the records despite the lapse of two weeks. Total 102.486 102.486 Institute of Business & Information Technology
OVERALL POSITION OF INSURANCE CLAIMS UP TO 31-07-2009 SETTLED CLAIMS WITH M/S EFU GENERAL INSURANCE COMPANY Rs. in Million. Natu No. Amou re of of nt incid Settl Invol ent ed ved Clai ms 12 3 Dacoi 22.94 15 ty 2 Fraud & 03 4.576 Forge ry Total 27.51 18 :8 Cash Recove ry (Culpr its) 4 1.200 0.000 1.200 Amou nt Receiv ed from
Insura nce Co. up to 311208 5 15.011 1.560 16.571 Amou nt Recei ved from Ins. Co. 01-0109 to 31-0709 6 4.981 2.416 7.397 100% Claim Amou nt Receiv ed from Insura nce Co. 7 19.992 3.976 23.968 O/S Amount to be Written -off as Policy Deducti
ble. 8 0.650 0.600 1.250 Policy Total Deducti (4+7+8 ble +9) Amoun t Alread y Writte n-off 9 10 1.100 22.942 0.000 4.576 1.100 27.518 OUTSTANDING INSURANCE CLAIMS WITH M/S EFU GENERAL INSRUANCE COMPANY Nature of Incident Dacoity Fraud & Forgery Total:Rs. In Million No. of Claims Claim Amount 02 2.695 14 350.322 16 353.017 Institute of Business & Information Technology
DECLINED CLAIMS BY M/S EFU GENERAL INSURANCE COMPANY Nature of Incident Looting cases in Kohat/ Mingora Branches under Terrorism/Operation Fraud & Forgery Cases: Total: No. of Claims Loss Amount 06 70.821 06 14.318 12 85.139 LONG OUTSTANDING CLAIMS WITH M/S ADAMJEE INSURANCE COMPANY Nature of Incident No. of Claims Dacoity 01 Fraud & Forgery Cases: 08 Total:-09 Claim Amount 0.466 73.679 74.145 DECLINED CLAIMS BY M/S ADAMJEE INSURANCE COMPANY Nature of Incident No. of Claims Dacoity 00 Fraud & Forgery Cases: 03 Total:-03 Claim Amount 0.000 102.486
102.486 Institute of Business & Information Technology
Special Vigilance Unit, SAM Group, Lahore DETAIL OF 100% SETTLEMENT OF INSURANCE CLAIMS DURING THE YEAR 2009 WITH M/S EFU GENERAL INSURANCE COMPANY IN RESPECT OF DACOITY CASES Sr . N o Name of Branch. Date of claim lodged Amount involve d in Dacoity/ ClaimLodged Cash Recover y(Culprits) Amount receive d from M/sEFU Upto 31122008 Amount Receive d from M/s EFUfrom 01012009 to 31-072009 100% Claim Amount Receive d from M/s EFU O/SAmount to be written off as PolicyDeductibl e Amount AlreadyWrittenoff as PolicyDeductibl e 1 Metrovill, Karachi 02.08.200 7 3.343 0.000 2.654 0.664
3.318 0.000 0.025 2 Hassan Abdal 06.09.200 7 1.471 0.000 1.157 3 Azizabad, Karachi 22.09.200 7 2.543 0.000 1.980 4 Kashmir Road, Lahore 11.12.200 7 0.600 0.000 0.460 0.115 0.575 0.000 0.025 5 Nazimabad, Karachi 16.11.200 7 1.698 0.000 1.339 6 Pattoki 26.11.200 7 2.050 0.600 1.120 7 Khadimaba d, Mir Pur, (A.K) 31.12.200 7 0.658 0.000 0.507 0.126 0.633 0.000 0.025 8 Public School, Haydrabad 31.03.200 8 1.048 0.000 0.638 0.160 0.798 0.000 0.250 9 Survey Centre, Karachi 10.04.200 8 1.882 0.000 1.306 0.326 1.632 0.000 0.250 10 Hafizabad Road, Gujranwala 13.06.200 8
0.289 1.446 0.025 0.000
0.538 2.518 0.025 0.000
0.334 1.673 0.000 0.025 0.280 1.400 0.050 0
2.912 0.600 1.650 0.412 2.062 0.000 0.250 11 D.C. Road Gujranwala 20.06.200 8 2.067 0.000 1.454 0.363 1.817 0.000 0.250 12 Regency Apartment, Karachi 25.06.200 8 0.445 0.000 0.156 0.039 0.195 0.250 0.000 13 Sanda Road, Lahore 25.07.200 8 0.427 0.000 0.000 0.177 0.177 0.250 0.000 14 15 Kotri Baba-eUrdu, Karachi 16.09.200 8 04.11.200 8 0.762 1.036 0.000 0.000 0.590 0.000 0.147 1.011 0.737 1.011 0.025 0.025 0.000 0.000 Total:22.942 1.200 15.011 4.981 19.992 0.650 1.100 Institute of Business & Information Technology
7th & 8th Week: The last two weeks of my internship training I have worked in Regional Commercia l & Retail Risk Group as a Credit Analyst. During these days I have learnt how to an alyze the credit proposal and on what ground the credit lines and loan sanction to an obli gor. What are the criteria and documents necessary and how these are analyzed. The process of sanctioning a loan in Allied Bank Limited is as follows: Concerned Branch Initiate Credit Application (CA) Send it to Regional Head of the Concerned Branch According to the Exposure Limit Send to the 5 levels of CRR
Levels Analyze the Queries & Approve for the Sanction Send Copies to Issue Sanction Regional Head Credit Administration Dept Concerned Branch BFL Send to CAD Issue DAC (Bank Facility Letter) Customer/Obligor Institute of Business & Information Technology
Credit Approval Matrix: The credit approval matrix detailed herein is devided into two sections. 1. Approval Grid- defines the maximum approval authority assigned to six levels of authority in the bank on a per party and group basis. 1. Per Party Limit- further divided into inner limits for lending against Agri Fina nce, Security Types S1, S2, S3. 1. Approval Parameters-illustrate various terms and conditions applicable on differ ent lending products. Credit Approvable Process Workflow: Approval Grid Leve ls Members Security Type AgriFinanc e Per Part y Grou p S1 S2 S3 I BM/CM +RH RCRR 10 0 0 0.5 10 10 II RH CRBG+ Manager RCRR 25 10 0 5 25 25 III Manager RCRR+Head AssetMarketing 100 50 50 50 100 100 IV Group Head CRBG 200 100 100 100 200 200 V GC CIBG 100 0 100 0 100 0 1000 1000 3000 VI President All amounts exceeding level V as perPrudential Regulations Institute of Business & Information Technology
Credit Approval Parameter Process Workflow: Approval Parameter A. Term Loan & Agriculture Finance Level I Level II Level III Level IV Level V Level VI Term Loan (Exceeding One Year) 0 100% AgainstSecurity TypeS1 Allowed Allowe d Allowe d Allowe d Maximum Tenor for Term Loan 0 2Yr 3yr 5yr 8yr Any Maximum Tenor for Agri Finance 3yr 3yr 5yr 5yr 8yr Any B. Watch List & NPLs Approval of watch listwith or without Rescheduling/Restructuring 50 >50 >50 Approval of NPLswithout Rescheduling/Restructuring 10 Allowe d Allowe d Approval of NPLs withRescheduling/Restructuring Please refer to the policy C. Guarantees Guarantees 100% Cash Margin/li en on ABL Deposits a) upto Rs25M against100% Cash Margin/lien onABL Depositsb) upto Rs10M against25% Casah Margin on ABLDeposits andbalances againstsecurity type Allowed Allowe d Allowe d
Allowe d Institute of Business & Information Technology
S1 or Parri passuMortgage onLand & Bld. Maximum Tenor for Guarantees 3yr 3yr 5yr 5yr 8yr Any Financial Guarantees Allowe d Allowe d Allowe d Back to Back Guarantees against Exposure Allowed Allowe d Allowe d Allowe d ContinuingGuarantees 100% Cash Margin Agains t Securi tyTypeS1 Agains t Securi tyTypeS1 Agains t Securit y TypeS1,S2, S3 D. Letter of Credits Letter of Credits 100% Cash Margin/li en on ABL Deposits Usance LC: a) upto Rs 25M against100% Cash Margin b) upto Rs 10 M against 25% cash Marginon ABL Deposits & balances againstsecurity typeS1 or Parri Passu
Mortgage on Allowed Allowe d Allowe d Allowe d Institute of Business & Information Technology
land & Bld LC for import ofnew machinary & Perishable items 100% AgainstSecurity TypeS1 Allowed Allowe d Allowe d Allowe d E. Leasing Leasing Allowed Allowe d Allowe d Allowe d Min Cash MarginAgainst Leasing 15% 10% 5% 5% Max LeasingTenor for Vehicles 3yr 5yr 5yr >5yr Max LeasingTenor for Machinery 5yr 5yr >5yr F. Others New Customer exposure Allowed Allowed Allowed Allowe d Allowe d Allowe d Startup Venture Securitytype S1 Security typeS2 Securitytype S3 Allowe d Allowe d Allowe d UnderwrittingCommitments Allowe d Allowe d Interbank Treasury Lines To be approved by the Treasury jointly with level VI Investment in TFCs Allowe d Allowe d
Lending AgainstShares Allowe d Allowe d Allowe d Clean Lending Allowe d Security Description: Cash/Near Cash S1 1 100% Cash Margin 2 Lien over Deposit 3 Lien over Registered Govt Securities Institute of Business & Information Technology
4 Pledge /Lien over FEBCs/Bearer/Registered US $ Bonds issuedby Govt of Pakistan 5 Mortgage of Rural Property through pledge of agri pass book 6 7 1 joint registration of vehicles Mortgage of urban Property Pledge/Fixed Assets Pledge of goods imported under Sight LC issued by Abl S2 2 Pledge of locally produced agricultural commodities 3 4 Parri Passu Mortgage on Land And Building Lien over Deposit with a minimum rating of B 1 2 Fixed Assets/Current Assets/Shares/TFCs Parri passu charge on current assets Parri passu hypo charge on plan & machinery S3 3 pledge of stocks imported under non ABL LC/finished goods 4 5 6 7 Parri Passu Mortgage on Land & Building Shares & Closed Ended Mutual Funds Term Finance Certificates Pledge on locally produced goods Borrowers Evaluation (Pre-Sanction Stage): 1. Objectives of Analyzing the Information: To determine the strong points To reveal the weaknesses To learn about operations peculiarities of the business firms To determine crucial/vital factors for the continuing success of borrower s business To determine as to whether the prospective borrower can timely repay the requested finance from the stated sources of funds without financial/operational difficulties Institute of Business & Information Technology
Getting complete information about a tentative borrower is possible through rand om collection of information from different resources and clubbing them together to understand their business position on the following points. Financial position Method of operation Management policies Future plans Product quality As a credit analyst the following documents are essentially analyzed or to keep in view for sanctioning the credit: 1. Credit Application I. Exposure Summary: The exposure summary contains the following information about obligor: 1. Credit Application (CA) type- it may be annual, interim, initial & classified. 2. Credit Application (CA) No. 3. Date of Review 4. Obligor Name 5. Extending Unit 6. Control Unit 7. Signature and Stamp of Concerned BM/CM/RM/GRM 8. Information about exposure limit- how much the obligor is already requiring and also his proposed limit with increment or decrement 9. Exposure summary whether it is Fund Base: or Non Fund Base 10. Obligor risk rating internal or external Institute of Business & Information Technology
11. Obligor classified exposure if it is in Watch List- the amount is overdue more than 30 days , Substandard- the amount is overdue more than 90 days, Doubtful- the amount is overdue more than 180days & Loss- the amount is overdue more than 365days 1. Stability criteria whether the obligor previously breach or violate any essentia l requirement e.g. Prudential regulation breach, Covenant violation 2. TER Temporary Extension Request 3. Approved by the Manager RCRR and recommended by RH-CRBG I. Sanction Advice: The Sanction Advice contains the following information about obligor: 1. National Tax No. of obligor 2. Industry type 3. Industry Code 4. Business Segment- whether SME, Commercial 5. Legal entity i.e. Sole Proprietor, Partnership, Co. 6. Total Asset of Obligor and the Turnover 7. Type of Credit Facility, the Obligor is obtaining previously and extending as we ll 8. Pricing according to SBP and Bank Policies-Floor Pricing i.e. KIBOR three month average +Spreads fixed by SBP 9. Margins 10. Personal Guarantees 11. Securities detail whether same or changed 12. Charge on Securities, Margin on Securities, Collaterals and its For Sale Val ue & Market Value 13. Covenants I. Group Facility Summary: If the Obligor is not individual then Group Facility Summary is required. II. Basic Information Report (BIR): The Basic Information Report (BIR) contains the following information about obligor: 1. Obligor Name, Address & Tel. No. 2.
Date of establishment of business 3. Background of obligor s business and product details Institute of Business & Information Technology
Shareholding Status-Business directors name, Shareholding whether 100% or not and Net Worth Management-Name, Position, Tel. Nos. Remark (Age, Experience, Qualification, and Association with the Co.) Bank Lines- from which the obligor obtaining the credit lines. Credit Checking from CIB- Status whether clean, overdue, default Market Checking-At least 3 checking from the market ( from Buyers/Suppliers/Competitors) should be made Classification History External Rating- ( Long term/Short term) I. Credit Memorandum: The Credit Memorandum contains the following information about obligor: 1. Purpose- describe the purpose of the proposed facility 2. Special Approvals-Provide comments for each Stability Criterion Exceptions checked off on the front page of CA 3. Ways Out Analysis- Indicate for each facility, the primary, secondary way out. 4. Three year exposure Trend 5. Industry Analysis 6. Management Analysis- Provide an assessment of the integrity of the borrowers 7. Financial Analysis-Balance Sheet, P&L Account, Statement of Sources (Fund Flow Statement), Notes on Accounts and Auditor Certificate 8. Risk Factors-Business Risk, Financial Risk, Management Risk, Security Risk, Account Performance Risk, Environmental & Social Risk and Disaster Risk 9. Relationship Strategy-In view of the risks discussed above provide a relationshi p strategy (Grow, Maintain, Reduce, Exit) for the obligor. 1. Borrower s Basic Fact Sheet (BBFC) on approved pattern/ specimen duly filled in al l respect, duly signed & stamped by the obligor & BM 2. Form 151- Loan Application Form 3. Security Compliance Certificate SCC-confirming the security/ documentation statu s for the existing approved facilities. 4. Copy of DAC in case of previous sanction
5. Latest Balance Sheet duly signed by obligor i.e. proprietor/Counter signed by CA / duly audited as per requirements along with cash flow statements 6. Spread Sheet in case of exposure exceeding Rs. 10 M-to inculcate the practice of determining the Short term working capital requirement and long term repayment capacity through financial projection and cash flow analysis Institute of Business & Information Technology
7. Projected Balance Sheet 8. Previous/ Other Bank Report from whom the credit lines availed 9. Occupancy status of collateral security i.e. self occupied/ rental/ state commer cial/ residential/industrial 10. Mark up payment history 11. Extracts from inspection & compliance 12. Ensure compliance of convent imposed in last year approval 13. Copy of Last Sanction 14. Ensure all columns of CA are filled in completely and correctly on proper pr escribed formats of the bank. All pages of CA must be signed/ initialed by the BM. 15. Ensure Principal/collateral securities meet marginal requirements. 16. Forced Sale Vale Certificate signed by RH showing occupancy status of property/location/i.e. industrial/commercial/residential as well as approved map held or not. Ensure that Forced Sale Vale Certificate should not later than 3 years 17. Ensure stock report held and outstanding reported therein tally with stateme nt of A/C and meet marginal requirements. 18. Statement of Account for last one year and ensure satisfactory turnover. 19. Ensure personal guarantees are recommended of all concerned i.e. proprietor/partner/directors/owner of the properties/holder of liquid securities etc. 20. Photocopies of Title Documents i.e. Title Deeds, NEC, Valuation Report, Legal opinion, Revenue Record, Excise & Taxation record in case of fresh proposals. 21. Ensure that valuation of properties is made from the short listed panel of PBA (Pakistan Banking Association) Evaluators in case of limits exceeding Rs.5 (M). 22. Date of Valuation-Ensure that valuation of Properties should not later than 3 years. 23. Prudential Compliance Check list must be compliance for SME, LC, Agri R8 and for corporate R3 24. In case party is also dealing with other banks ensure copies of other banks ensure copies of Other Bank Sanctions/Statement of A/C 25. Copy of account opening form in case of fresh proposals 26. Net Worth statements of obligor/partners/directors 27. EE Statement for borrowing in case of exporters, issued by SBP on yearly bas es and this statement reports all exports of the particular obligor was carried out thr ough which bank. 28. Confirm age of obligor is not more than 65 years in case of SME 29. Fresh Search Report in case of limited companies 30. Ensure the registration of charge over the Current/Fixed Assets of the Limit ed Co. Call copy of Form No. 10 or 16 i.e. Registration of Charge over the Current/Fixe
d Assets of the Limited Co. 31. Account Profitability Report when the limit is > 10 M- issued by the branch shows the previous credit lines avail by the obligor, the outstanding behavior and calcula ted yield. 32. Performa invoice in case of import Institute of Business & Information Technology
33. Form 29 i.e. Board resolution of limited co. 34. PDO Post Due Obligation of the obligor 35. Undertaking or confirmation for proper utilization of loan from obligor 36. Form 20 i.e. List of Directors of private limited co. 37. Clean up of facilities-an important element of credit initiation is proper s tructuring of credit facilities so as to minimize the risk associated with lending. This st ructuring of facilities in terms of amount, tenor and underlying security requires a thoro ugh analysis of obligor s WCR and an understanding of CCC of Co. firm. A clean up is considered to have taken up place when the outstanding finance has been fully adjusted repaid for a period of min 2 consecutive working days. Credit Analysis for Sanctioning Loan to Agriculture Sector: Furthermore the documents for sanctioning the loan for agriculture required are: 1. Zarai Pass Book- Evidence of Title 2. Latest copy of Khasara Gardawri( to check applicant is self cultivator or not ) 3. Fard Jama Bandi 4. Total cultivated land (owned+ rented) 5. Lease Agreements Limit of Agri Credit Initiation to Obligor: Loan Entitlement 1. Valuation: Market Value of cultivated land *50%----------------------Maximum Limit 2. Production Unit (PIU): Production Unit *Per Unit Price------------------------------Minimum Limit 3. Owned & Leased Land: Total Area Cultivated * As Per Circular Production Crop Price/Acre Institute of Business & Information Technology
Financial Analysis for Sanctioning Loan: 1. Equity of the Business of obligor 2. Past year Sales And Turnover 3. Current Ratio 4. Quick Ratio 5. Leverage Ratios 6. Cash Conversion Cycle 7. Work Capital Requirement = (Cost of Sales/365)*CCC 8. Already available WCR = Current Asset-Current Liabilities (if it is more than th e WCR then may be more enhancement is rejected) 9. Cash Flow Statement 10. Entitlement = 4* Equity Collateral Acceptable by ABL: Generally the following are the types of collateral acceptable by ABL are: 1. Mortgage of Land & Building: Credit facilities against mortgage of land & building may be granted as per the margins specified by the bank, on the forced sale value of the property determined by PBA approved valuation firm, subject to the following condition: 1. Max tenor of up to 7 year 2. Max grace period of up to 12 months from the date of first drawn- down. 3. The collateral must be easily realizable and must have an independent approach and right of way. 2. Hypothecation of Stocks, Plant & Machinery: Credit facilities against hypothecation of stock may be granted as per the margins specified by the bank subject to the following condition: 1. Max tenor of 1 years 2. No grace period is allowed 3. Asset coverage to be monitored via monthly stock report by the borrower showing the position of stock on month end. 4. Hypothecation to be provided on present and future stock.
5. Semiannual stock inspection is conducted 6. Annual clean up requirement may be imposed where deemed necessary Institute of Business & Information Technology
Credit facilities against hypothecation of Plant & Machinery may be granted as per the margins specified by the bank subject to the following condition: 1. Max tenor of up to 7 year 2. Max grace period of up to 12 months from the date of first drawn- down. 3. Hypothecation to be provided on present and future Plant & Machinery. 3. Pledge of Stocks, Raw Material & Finished Goods: Credit facilities against pledge of readily marketable stocks, raw material and finished goods may be granted as per margin requirements specified by the bank subject to the following condition: 1. Max tenor of 6 to 11 months depending upon the asset conversion of the borrower. 2. PBA approved macadam to take charge of the pledged stock and keep it under lock & key. 3. Macadam to submit monthly stock position report. 4. clean up requirement may be imposed where deemed necessary Institute of Business & Information Technology
Management Style: In Allied Bank of Pakistan, the Managers are promoting the Open Door Banking . They
used to interact with their subordinates and workers on time to time basis this is the main reason the managers at ABL know the problems that their employees are facing and this time to time interaction has created a healthy environment among the staff and their managers and this monitoring increase the efficiency at ABL. In ABL the managers having the control over the staff members and employees and having the check over the tasks of employees that they are performing even on daily bas is. Although the environment is very learning but also in some wings and groups of A BL the management approach towards their employees is still bureaucratic. Some most exp erienced managers are hesitant to adopt the learning and open door banking. Working Environment: Allied Bank boasts of a work culture, which displays respect for all walks of li fe and different ways of thinking. Everyone at Allied Bank has a common corporate vision and values. However, all e mployees are encouraged to grow as individuals and collaborate in teams. Increments, bonuses and promotions are based solely on individual skills, qualit ies, abilities and attitude. It is our aim to provide innumerable opportunities for all those e mployees who show aptitude and the will to keep learning. Training programmes, both local and foreign, are also considered important for e mployee growth. Institute of Business & Information Technology
Chapter 4 Summary & Recommendations Institute of Business & Information Technology
Overall Summary: At present there is no such organization in the world that is free from problems and challenges. Every concern has to strive and struggle a lot to be more profitable and to get more competitive edge. The management of ABL is taking strategic steps to enable the bank to emerge as a strong and progressive institution. It is continuing to make efforts to refine its prod ucts and operations to make them more compatible. New deposit schemes have been introduce d and an action plan to maintain revenue growth in future. During my internship I have learned many new things in spite of the knowledge ga ined at university and also came to conclusion that education alone is not enough, pract ical training in every field is crucial to become a successful manager. The bank has great image due to the trust but it needs to use it effectively to increase market share. Also the flaws in branch operations such as misallocation of resources sh ould be rectified. As the business and economic conditions remain uncertain, ABL continues to devel op the new products like it has been doing in past. Institute of Business & Information Technology
Recommendation for the Organization: While doing my internship training of 8 weeks in Allied Bank of Pakistan, I have analyzed some problem in the Bank. Keeping in views those problems followings ar e my recommendations: 1. The bank has a lot of financing schemes but there are little advertisements of t hese schemes so ABL should more advertise its schemes. 2. Most of the bank employees are stick to one seat only, which result that they be come master of one particular job and lose their grip on other banking operations. So all employees should have regular job rotation. 3. Some of the talented employees should be sent to other countries for their advan ce trainings. 4. In back offices the employees are still depend on manual work which causes slow performance. It should convert their system to an automated one. 5. ABL should promote the paperless banking. 6. In some groups or wings, approach towards employees is still bureaucratic, late promotion, favoritism in appraisals and lack of sufficient incentives are some problems arising dissatisfaction so the employees should be promoted on fair pol icies to increase more satisfaction among them. 7. ABL should introduce the Islamic products because it has the potential market. Institute of Business & Information Technology
Recommendation for the IBIT: While studying in IBIT, I have analyzed some problem. Keeping in views those pro blems followings are my recommendations: 1. The management of this prestigious institute should introduce the training programmes among the departments i.e. IAS & IBA same as the UMT does with the IBA for the promotion of students. 2. This institute also should organize the seminars with the cooperation of industr ies like with Chamber of Commerce and Supply Chain Group of Pakistan that assist its students and the market will knows its students. 3. The institute also should arrange the field tours for its students to enhance an d give the market exposures. Institute of Business & Information Technology
Annexure: Institute of Business & Information Technology

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Chapter 1 the Organization Institute of Business & Information Technology

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Internship Report 2009

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Internship Report 2009

Internship Report 2009

installments. This facility meets clients ory constructions or machinery expenses.

long term needs such as, financing fact

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Internship Report 2009

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Organogram of SVU Institute of Business & Information Technology

Internship Report 2009

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The Deal of the Year Award 2008 by Banker UK:

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Internship Report 2009

Top 1000 Banks of the World

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es. Institute of Business & Information Technology