final internship report usama[1]

8/4/2019 Final Internship Report Usama[1]

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ACKNOWLEDGEMENT

I would like to thank Allah Almighty for blessing me with his divine

support throughout the course of my internship. My deep sense of

gratitude to my supervisor, Ms. Shaista Iqbal, for all her support,

encouragement and kind guidance during my internship. I am

very thankful to Mr. Saleem Ahmad for teaching me the procedure

of account opening. I also like to express my gratitude to Mr.

Sabir Habib who has given me great help and guidance in

Clearing department. I would like to extend my thanks to my

fellows for constructive criticism and valuable suggestions.

Finally I like to convey my thanks to my family for their

moral, unconditional and selfless support throughout the course of

intership.


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About Allied BankAllied Bank Limited was the first bank to be established inPakistan. It started out in Lahore by the name Australasia Bankbefore independence in 1942; was renamed Allied Bank ofPakistan Limited in 1974 and then Allied Bank Limited in 2005.

In August 2004, because of capital reconstruction, the Banksownership was transferred to a consortium comprising Ibrahim

Leasing Limited and Ibrahim Group.

Today, with its existence of over 60 years, the Bank has built itselfa foundation with a strong equity, assets and deposit base. Itoffers universal banking services, while placing major emphasison retail banking. The Bank also has the largest network of over800 online branches in Pakistan and offers various technology-based products and services to its diverse clientele.

VISIONTo become a dynamic and efficient bank providing integratedsolutions in order to be the first choice bank for the customers.

MISSION

To provide value added services to our customers


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To provide high tech innovative solutions to meet customers'

requirements

To create sustainable value through growth, efficiency and

diversity for all stakeholders

To provide a challenging work environment and reward

dedicated team members according to their abilities and

performance

To play a proactive role in contributing towards the society

CORE VALUES

Integrity

Excellence in Service

High Performance

Innovation and Growth

ORGANIZATIONAL STRUCTURE

Commercial & Retail Banking Group

The Commercial & Retail Banking Group is the core business arm

of the bank generating a major share in income. It caters to the

needs of the customers from almost every segment of life

including Individuals like salaried persons, students, senior

citizens, house wives and Businesses from small shops and

cottage industries to middle / large size organized businesses.

CRBG offers full range of Deposit and Advances products from

general to specific & tailor-made solutions to meet the customer

needs. This includes various deposit products, Commercial & SME

Loans, Agriculture Loan, and Trade Facilities, Banc assurance,

online banking including instant transfer of funds within the entire


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banking network. The Group is driven by the ambition to continue

contributing as the leading Business, serving our 2.5 million

longstanding customers with candid and reliable banking services.

The Commercial & Retail Banking group is organized under fourgeographical territories consisting of 28 regions and over 800

branches (100% online) spread across the country for providing

quality banking services to the customers.

CRBG has always been focusing to establish Allied Bank as market

leader by proactively identifying needs of its customers and

satisfying those needs in true spirit. Accordingly innovative and

unique business products were offered from the platform of CRBG

including Allied Advance Profit Scheme, Allied Business Account,Allied Business Finance and Agriculture Finance Products & Banc

assurance products which significantly contributed to our

customer convenience. As a matter of fact Allied Advance Profit

Scheme was first of its kind in the banking history of Pakistan. In

terms of commercial assets, focus was laid on various sectors of

economy and large number of customers was brought to the fold

of the bank from different sectors, such as, Rice, Cotton,

Pesticide, Wheat, traders and exporters.

CRBG at ABL continued with its commitment to facilitate existing

customers and expanding its reach with a comprehensive plan for

branches & ATM network expansion.

Consumer

In line with the Banks aim to provide a host of products andservices to its customers, substantial ground work has been done

to establish a strong consumer banking business. Furthermore, to

achieve this objective, professionals from across the industry

have been recruited into areas of product development, sales,


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credit policy, research, consumer analytics, call centers and

service quality departments.

The consumer portfolio, comprising the debit card, credit cards,

auto loans, personal loans and mortgages will be establishedphase by phase. However, we are confident that our strengths,

together with our largest network of online branches, a superior

technology platform and a big customer base, will take the Banks

profitability to new heights.

Corporate

The Corporate Investment Banking Group (CIBG) holds the Banks

loan portfolio and enjoys a leading position in corporate lending inthe country. It offers a wide range of financial services to medium

and large sized public and private sector entities. These services

include, providing and arranging tenured financing, corporate

advisory, underwriting, cash management, trade products,

corporate finance products and customer services on all bank

related matters.

The Bank has played a key role in the countrys economic growth

by providing a vast amount of funds to large industrial andcorporate sectors of the economy. And because it has played a

big part in major investment and corporate banking transactions,

Allied Bank is considered one of the top investment banks in the

country today.

Branches & ATMs

Online Banking facilities are available to customers maintaining

accounts at all online branches across the country. The following

facilities are available:

Cash Deposit for immediate credit to a remote branch.

Remote Cheque Encashment from any online branch.


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Instant Funds Transfer between any 2 online branches.

Remote Balance Inquiry and Statement of Account.

Fields of Activities

Account Opening

Receiving of deposits is the primary function of any commercial

bank. Deposits are regarded as the oil for bank operations. Allied

Bank Ltd has offered numerous Accounts at competitive interest

rates to bring the deposits.

Types of accounts offered

The Accounts offered by Allied Bank Ltd are as follows:

1. Current Account

2. PLS deposit

3. Monthly Income

4. Foreign Currency

Nature of accounts

Individual account

In individual Accounts, single person operates Account. This type

of Account is usually opened by salaried class. Just copy of

national card is sufficient to open individual Account.

Joint account

As evident from the name these accounts can be

jointly opened by any number of persons. The minimum


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number of persons required to open a joint account is two

but there is no maximum limit.

All of them have to sign the application form and

specimen signature cards

Mandate for joint Account is also got signed by all

the Account holders so that in case of death of any of the

member the other person can operate the account.

The options available to operate the account are

1. Either or Survivor.

2. Jointly3. Any one of us

Account of partnership firm

The partnership firm can open Account of any type offered by

Allied Bank Ltd. The documents required are

1. Partnership Deed, Certified Copy (Form C)

2. Registration Certificate3. Photocopies of National ID card of all partners

4. Partnership Mandate (Prescribe Format)

Accounts of limited Companies

A lot of documentation is required in case of these Accounts. The

following documents are required

1. Copy of Certificate of Incorporation

2. Certificate of Commencement of Business

3. Memorandum of Association

4. Article of Association

5. Copy of Resolution of the Board (Prescribed Format)


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6. List of Directors (Form 29, Latest Copy)

7. Stamp of Company, which is to be affixed on the

account opening form.

8. NIC copies of Directors

All Documents must be verified by the Chief Executive of

the company.


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Account of illiterate

These accounts can be opened individually or

jointly

For men right hand impression is taken on account

opening form

For women left hand impression is taken on

account opening form

The customer has to come to the Bank himself in

order to withdraw any amount of cash.

The following documents are required

1. Photocopy of NIC of Account holder

2. A Passport size photograph

Account of Minor

The name of guardian is written in title

of account

The account can be opened in any one

of the schemes

Signatures of guardian are always used

to perform any transaction

The following documents are required

1. Birth certificate of minor

2. Photocopy of NIC of guardian

Procedure of account opening


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Step 1

First of all after inquiring from the customer about what type of

account he wants to open, the account opening form is got filled

from the customer and is also got signed. The accounts opening

form contains the following information

1. Currency in which the account is to be opened

2. Type of account

3. Title of account

4. Address

5. Individual/joint account

6. General information about the customer

7. Name of applicant

8. Fathers/husbands name

9. Occupation

10. Nationality

11. Country of residence12. NIC number

13. Passport number

14. Date and place of issue (it is required for account of non

resident)

15. Next of Kin (this is required so that in case of death of

account holder nominee gets the authority to operate Account)

16. Type of organisation (this option is filled in case a

corporate Account is opened, in order to have information

whether business is a limited company, partnership, club/society

or a sole proprietorship)


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17. References

Step 2

After the necessary verifications laid down in Allied Bank policies

and basic precautions, CRO takes two signatures on SS (signature

specimen) card and get it scanned in computer for future

reference.

Step 3

Afterwards, CRO gets the signature of Introducer on application

form. This is very important part of account opening procedure,

without this account cannot be opened. The main purpose of

introduction is to ensure that the client is a suitable person to be

entrusted with cheque books, which are not issued before all

formalities are filled.

Introducer can be

Anyone from the staff members

A well reputed customer of the bank

Another bank of good repute, which can

be consulted about the business practice of the

client.

Customers employer if he is of good

repute

Step 4

Afterwards, a requisition slip is also got signed by the customer so

that the cheque can be issued to the customer. Two signatures


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are taken from the customer on this slip. Cheque book is issued

after two days of receiving the requisition slip.

After giving the account number to the customer, a deposit slip of

the amount with which the customer wants to open the account is

filled and got signed by customer and is deposited at cash

counter.

Step 5

After the account is opened A letter of thanks is send (the very

same day the account is opened) to the customer in order to

thank him for opening the account and ensuring that all the

information about his account will be kept confidential. After

issuing Letter of Thanks entry is made in Dispatch Register

which has the following columns

1. Date

2. Serial number

3. Address4. Destination

5. Subject (letter of thanks)

6. Initials

ClearingA process by which the counter-claims of bankers are offset and

balances are settled or cleared through the entries in the books of

the bank acting as clearing house.


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Clearing is done for within city transfers. The Clearing System is

very advantageous both for banks and customers at large. In fact,

it is an essential adjutant of a developed banking system.

In Pakistan, State Bank of Pakistan acts as Clearing House and

where there is no branch of this bank the Clearing House Function

is performed by the National Bank of Pakistan. All member banks

(only scheduled banks can be full-fledged members of the

Clearing House) have their accounts with the State Bank.

National Institutional Facilitation Technology

Clearing House of SBP has shifted a tiresome part of its work to a

private institution named National Institutional Facilitation

Technologies (Pvt) Ltd. NIFT collects cheques, demand drafts, pay

orders, traveller cheques,etc from all the branches of different

banks within city through its carriers and send them to the

branches on which these are drawn for clearing. After branches

approve the instruments drawn on them, NIFT prepares a sheet

for each branch showing the number of instruments and amount

in its favour and drawn on it and sends it to each branch. A similar

sheet for each bank is also sent to Clearing House of SBP where

accounts of banks are settled in the manner described in above

example.

The cheques deposited by the customers may be local oroutstation cheques. The local cheques are sent for the local

clearing but the outstation cheques are sent for collection.


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Internally, in banks following two processes of clearing are done:

1. Outward Clearing

2. Inward Clearing

Outward Clearing

In outward clearing, cheques , demand drafts, pay orders, etc.,

received by parties ( account holders) are processed at bank for

clearing i.e. bank collects their proceeds on the behalf of theircustomers.

The following steps are taken by the officer.

The customer deposits local cheque, PO etc alongwith deposit

slip. The officer makes the following verifications.

1. Whether cheque is post date or stale

2. Whether cheque is local or outstation

3. Tally amount in both figures and words

4. Signature

Inward Clearing

In inward clearing, bank receives the cheque drawn on it. A carrier

of NIFT brings these cheques along with the summary showing the

details of cheques, Pay Order, Demand Draft.

The following steps are taken by the officer

The officer makes the following verifications

1. Three stamps on cheques


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2. Whether cheque is post date or stale

3. Whether cheque is local or outstation

4. Tally amount in both figures and words

5. signature

6. Sufficient balance in Account.

Demand Draft

A Demand Draft is an instrument in writing drawn by one branch

of a bank on another branch of the same bank for a certain sum of

money; payable on demand to the order of the payee mentioned

therein.

Issuance of Demand Draft against cheque The following steps are taken to issue Demand Draft against

cheque.

Step 1

The customer deposits cheque along with Demand Draft

application form The application form contains the following

information

1) Date of issue of Demand Draft

2) Demand Draft number

3) In favour of i.e the person in whose favour

Demand Draft is issued

4) The amount of Demand Draft5) Name and address of applicant

6) Instrument against whom Demand Draft

issued


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7) Charges received against issue of Demand

Draft

8) Signature of applicant

Step 2


1) Whether cheque is not post dated or stale

2) Amount in both figures and word tally

3) signature

Step 3

After making verifications the officer makes entries in computer

"Smart Program"

Dr Customer Account

Cr Demand Draft Account

(to deduct amount from Customer Account )

Dr Customer Account

Cr commission on remittance Account

(to deduct charges)

at the end of the day the following entry is made

Dr Demand Draft Account

Cr Head Office Account

Step 4 The officer prints 3 copies of Demand Draft. Original copy is

handed over to customer, 2nd copy is retained for record and 3rd

copy is send to head office for reconciliation.


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Issuance of Demand Draft against Cash

Step1

The customer deposits cash along with Demand Draft application

form to cash department.

Step 2

The cash department makes the following entry

Dr Cash in hand Account

Cr sundry creditor Account

Step 3

Afterwards cash department officer affix cash stamp on Demand

Draft form and forwards to remittance department.

Step 4

The officer in remittance department makes the following entry

in computer "Smart Program"

Dr sundry creditor Account

Cr Demand Draft Account

Cr commission on remittances Account

Pay Order

A Pay Order is an instrument in writing issued by bank for a

certain sum of money; payable on demand to the order of the

payee mentioned therein.

Issuance of Pay Order against cheque


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Step 1

The customer deposits cheque along with pay order application

form The application form contains the following information

1) Date of issue of Pay Order

2) Pay Order number

3) In favour of i.e the person in whose favour

Pay Order is issued

4) The amount of Pay Order

5) Name and address of applicant

6) Instrument against whom Pay Order issued

7) Charges received against issue of Pay Order

8) Signature of applicant

9) Signature of cahier and two authorised

officers

Step 2


1) Whether cheque is not post dated or stale

2) Amount in both figures and word tally

3) Signature

Step 3

After making verifications the officer makes entries in computer

"Smart Program"

Dr Customer Account

Cr Pay Order Account


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(to deduct amount from Customer Account )

Dr Customer Account


Step 4

After making entries, officer post the transaction in Pay Order

register

The Pay Order register contains the following columns

1) Date of issuing of Pay Order

2) Number of Pay Order it going on sequence

wise

3) Payee i.e the person in whom favour Pay

Order is issued

4) Amount of Pay Order

Issuance of Pay Order against Cash

Step 1

The customer pay cash along with Pay Order application form to

cash department.

Step 2

The cash department makes the following entry in computer with

the amount of Pay Order plus charges

Dr cash in hand Account

Cr sundry creditor Account

The cash department after affixing cash stamp on the Pay Order

application form forwards it to local remittance department.

Step 3


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The officer in local remittance department makes the following

entry in computer

Dr sundry creditor Account

Cr Pay Order Account


Letter of Credit

Letter of credit abbreviated as LC stands at the centre of

international commercial transaction, issued by the bank at the

request by the importer. Letter of credit states that the bank will

pay a specified sense of money to a beneficiary, normally the

exporter on presentation of particular, specified document.

The importer applies to the bank, say, the allied bank limited

for the issuance of letter of credit. The Allied bank then

undertakes a credit cheque of the reporter if the bank is satisfied

with credit worthiness. It will issue a letter of credit However, thebank might require a cash deposit or some other form of collateral

from the customer in addition the bank charges the importer a fee

for the service typically this amount to between 5 percent and 2

percent of the value of letter of credit, Depending upon the

importers creditworthiness and the size of transaction.

Assume the Allied bank is satisfied with importers credit

worthiness and agree issue a letter of credit the letter stated that

the Allied bank will pay the Bangkok exporter for the

merchandizing as long as it is shipped in accordance with

specified instruction and conditions at this point the letter of

credit becomes a financial contract between the Allied bank

limited and The Bangkok exporter bank. The Allied bank then

sends the letter of credit to the Bangkok exporter bank, say, the


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Citibank tells the exporter that it has received letter of credit that

he can ship the merchandizes. After the exporter has shipped the

merchandisers, he draws a draft against Allied bank limited in

accordance with the term of letter of credit, attaches the required

document and presents the draft to his own bank, Citibank, forpayment. The Citibank then forwards the letter of credit and

associated document to the Allied bank limited. If all the terms

and conditions in the letter of credit have been complied with, the

Allied bank limited honor then draft and will send payment to the

Citibank. When the Citibank receives the funds, it will pay the

Bangkok exporter.

As for the Allied bank limited, Once it has transferred the

funds to the Citibank in Bangkok, it will collect payment from the

importer. Alternatively, Allied bank limited may allow the importer

sometime to resell the merchandisers before requiring payment.

The Allied bank limited will treat such an extension of the

payment as a loan to the importer and will charge an appropriate

rate of interest.

Bill of Exchange/Draft:

Bill of Exchange is the instrument normally used in international

commerce to affect payment. A draft is simply an order written by

an exporter instructing an importer, or an importers agent to pay

a specified amount of money at specified time. The person or

business initiating the draft is known as the maker. The party to

whom the draft is presented is known as Drawee.

Bill of Lading:

The third key document for financing international trade is the Bill

of lading. The bill of lading is issued to the exporter by the


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common carrier transporting the merchandise. It serves three

purposes: it is a receipt, a contract and a document of title. As a

receipt, the bill of lading indicates that carrier has received the

merchandise described on the face of the document. As a

contract, it specifies that the carrier is obliged to provide atransportation service in return for a certain charge. As a

document of title, it can be used to obtain payment or a written

promise of payment. Before the merchandise is released to the

importer.

Partys involved

1. Importer

2. Issuing bank

3. Exporter

4. Advising bank

Process of opening letter of credit

Mutual agreement:

First of all importer and exporter enter into a mutual agreement.

The importer who is in need of some commodities approaches an

appropriate exporter and asks for samples, price list and

quotation. When both the parties come into an agreement then

the importer places an order to exporter for the supply of certain

goods.

Performa Invoices:

Exporter then prepares an important document known as

Performa invoices. In performa invoice details about the contract

regarding name of product, its type, quality, brand, quantity, size,

color, price are stated specifically. Exporter sent it importer.


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Contacting the bank:

Importer contacts the bank and requests for opening L/C in favor

of exporter.

Filling formal application:

The bank examines the documents and asks the importer to file a

formal application for the L/C, which is prescribed printed form

Margin Requirements:

If the goods to be imported are subject to margin requirements

the importer will be asked to deposit the amount of the same. The

margin requirement is fixed by the State Bank and generally it isfrom 10 to 20 % of the total amount for which the L/C is opened. It

is a refundable amount.

Writing the L/C:

After complete processing of the application the bank opens the

L/C in the favor of exporter. The L/C is also a standardized printed

form. It contains almost all the details and conditions mentioned

in the application. Four copies are prepared (for its own use, forimporter, for exporter, for advising bank).

Dispatch of L/C:

Having completed the required copies of the L/C, the opening

bank dispatches it to exporter, usually through advising bank.

Shipment of goods and obtaining the documents:

After receiving L/C the exporter will arrange with a shipping

company for the goods to be carried to the port of importer

country. After the goods have been shipped the exporter will

obtain the Bill of Lading from the Shipping Company and will

obtain and prepare all documents specified in the L/C.


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Submission of draft and documents:

Exporter will submit draft and documents and pay the draft and

get it negotiated to itself.

Forwarding documents:

The negotiate bank will negotiate the draft (endorse in favor of)

the opening bank. The negotiating bank will forward it to the

opening bank.

Receipt of documents and advice to opener:

After receiving draft and documents the opening bank examines

them with care. The opening advice to the importer about the

arrival of the documents.

Obtaining of the documents:

The importer goes to bank and after paying the draft and other

documents obtains the Bill of lading and other documents.

Clearance of the goods:

Now importer can get the goods cleared through the clearing

agent.

Some of the Documents Called for under a LC

Financial Documents

Bill of exchange, Co- accepted Draft

Commercial Documents

Invoice, packing list


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Shipping Documents

Transport Document, Insurance Certificates, Commercial, Official

or Legal Documents

Official Documents

License, Embassy legalization, Origin Certificate, Inspection

Certificate

Transport Documents

Bill of Lading (ocean or multi-modal or charter party), Airway Bill,

Lorry/truck receipt, railway receipt, CMC other than Mate Receipt,

Forwarder Cargo Receipt, Deliver Challan..etc

Insurance Documents

Insurance policy, or certificates but not a cover note

The Letter of credit Application

The following information should be addressed when establishing

a letter of credit

1. Beneficiary

The seller should provide to the buyer its full corporate name

and correct address. A simple mistake here may translate to

inconsistent or improper documentation at the other end.

2. Amount

The seller should state the actual amount of the letter of credit.

One can request a maximum amount when there is doubt as

the actual count or quantity of the goods. Another option is to


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use words like approximate, circa, or about to indicate an

acceptable 10% plus or minus from the stated amount, For

consistency, if you use this wording you will need to use it also

in connection with quantity.

3. Validity

The seller will need time to ship and to prepare all the

necessary documentation. Therefore, the seller should ensure

that the validity and period for documentation presentation

after the shipment of the goods is long enough.

4. Sellers Bank

The seller should list its advising bank as well as a reimbursingbank if applicable. The reimbursing bank is the local bank

appointed by the issuing bank as the disturbing bank.

5. Type of payment availability

The buyer and seller may agree to use sights drafts, time

drafts, or some sort of deferred payment mechanism.

6. Desired Documents

The buyer specifies the necessary documents. Buyers can list,

for example, a bill of lading, a commercial invoice, a certificate

of origin, certificates of analysis, etc. the seller must agree to

all documentary requirements or suggest an amendment to the

letter of credit.

7. Notify Address

This is the address to notify upon the imminent arrival of goodsat the port or airport of destination. A notification listing

damaged goods is also sent to this address, if applicable.

8. Description of Goods


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The seller should provide a short and precise description of the

goods as well as the quantity involved. Note the comment in

step # 2 above concerning approximate amounts.

9. Confirmation OrderWith international arrangements, the seller may wish to

confirm the letter of credit with a bank in its country.

Some Types of LC:

Documentary Revocable Letter of Credit

Documentary Irrevocable Letter of Credit

Standby Letter of Credit

Special Letter of Credit

Back-to-Back Letter of Credit

Deferred payment (Usance) Letter of credit

Red Clause Letter of Credit

Revolving Letter of Credit


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