internship report on alfalah bank with setting

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Table of ContentsExecutive Summary 03

Preface

05

Acknowledgement 07

Dedication 09

Overview 11

History 13

Achievements 15

Vision and Mission Statements 18

Slogan 19

Board of Directors 20

Corporate Information 21

Executive Committee 22

Branch Network 23

Features 25

Department Hierarchy 27

Branch Level History 28

Products 29

Operation Department 42

Account Opening Department 43

Type of Accounts 46

Cheque book Issuance 50

Cash Department 53

Clearing Department 55

Accounts Department 58

Remittance Department 61

Credit Department 68

Credit Cycle 75

Financial Analysis 81

Balance Sheet 83

Income Statement 85

Ratio Analysis 86

Financial Summary 94

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SWOT Analysis 95

Recommendation 101

Observation And Conclusion 103

Annexture 104

EXECUTIVE SUMMARY

This report is about my internship program with Bank Alfalah Ltd. In this comprehensive report, I

have discussed about every major aspect of the bank, which I observed and perceived during my internship

program. In this report you will find the detail about the bank right from its incorporation to the current

position. Along with it, the processes, policies and procedures of the bank are also discussed in detail.

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During my internship program, I mainly worked with four departments:

Credits,Agriculture,Car financing and foreign trade. These departments have been

discussed in detail and all the policies and procedures have been described thoroughly.

As the main purpose of internship is to learn by working in practical environment

and to apply the knowledge acquired during the studies in a real world scenario in order

to tackle the problems using the knowledge and skill learned during the academic process,

In this report the detailed analysis of the organization has been done and all the financial,

technical, managerial and strategic aspects have been evaluated to analyze the current

position of the organization. Along with it, the background analysis, the prevailing

competition analysis, the business process analysis, and the internal environment and

external environment of the organization have been discussed and the recommendations

for the improvement have been made wherever required.

In the end the learning and experiences section consists of all the policies,

processes, practices and procedures which I have undergone through and learned during

my internship program. This report also contains my perceptions about the employees

satisfaction, motivation level and the working environment of the organization.

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Preface

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The internship is an essential part of M.Com degree program because through this training

students come to know the real difference between theory and practice and they are

also introduced to the outside business world. An important requirement of this

training program is to compile a report about the activities of that organization in

which the student has done the internship.

I have done internship in Bank Alfalah Limited, Ghalla Mandi Branch Haroonabad. The

internship provided me great opportunity to equip myself with knowledge, techniques,

application and tools used in an organization.

The report covers various features of knowledge. It starts with the brief history of Bank,

covers current status, performance, products and services. Another major portion of this

report explains the management of Bank Alfalah.

Division of departments and their activities highlights the working of Bank Alfalah and my

learning experience elaborates how much this internship was useful for me. Financial

analysis represents the true picture of the performance of Bank. Concluding the report there

are certain recommendations and suggestions for the bank in order to have improvements.

The source of information for the preparation of report includes the written notes extracts

from banking literature, verbal discussion with bank officials and Annual report of the

bank.

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I hope this report will help in understanding various aspects and features of Bank Alfalah

Ltd. and will be equally important for commerce students and persons making future

banking.

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Acknowledgement

All praises are for Allah almighty that has bestowed upon human being the crown of

creation and has endowed him with knowledge and wisdom. After Allah, is the last prophet

Mohammed (SAW) who brought for us revelation and unlimited knowledge and civilized

the barbarian human being.

Although this report base only my name but numerous people were very important to the

development of this report without the support of them I could never successfully

completed the internship as well as the report.

I am highly thanking full to the staff member of Bank Alfalah Limited. Who really

cooperated with me and provide me their complete guidance.In Branch, I Observe the

friendly environment between the employees and they also give me the friendly

environment to learn about the bank as well as branch. As banks are very much sensitive

about their secrecy, even then after taking an understanding, they let me handle their

delicate operations.

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OVERVIEWOVERVIEW

Following privatization, Bank Alfalah emerged as new identity of Habib Credit

and Exchange Bank with a revived purpose and commitment. Charged with the strength of

Abu Dhabi consortium and under the leadership of his Highness Sheikh Nahayan

Mubarak Al - Nahayan, the bank has already made significant conditions in building and

strengthening both corporate retail banking sector in Pakistan.

Designing the product portfolio of bank response to the customers preferences, the product

like Royal Profit, Royal Patriot and Royal Custodial are prime examples of quality and

innovation providing timely banking opportunities to customers of bank.

Assessment of the needs and wants of the customers is an on going process at Bank

Alfalah, which helps to continually develop new products and services. To continuously

offer courteous, professional and advanced banking solutions, the team of bank has

recently been rejuvenated by going though training programs with a focus on information

technology.

To make their banking solutions become accessible to more and more people, they have

embarked upon a rapid expansion program, aiming to provide a networking that makes the

services available to any of their customers in all the major urban centers of Pakistan - with

a view to go international in the future.

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With their key indicators of progress already soaring to new heights, the bank is committed

to dedicate all its energies, resources and time to bring higher value and satisfaction to their

customers, employees and shareholders.

The graph of bank is going up and up every year. The ratio of profit is increasing at good

percentage. Thy bank is serving the people at high level of standard by going according to

the whishes of the customers.

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HISTORYHISTORY

Bank of Credit & Commerce International (BCCI) was a Pakistan based bank,

established by Mr.Agha Hassan Abdi from UBL, in association with U.A.E and Europe.

BCCI has its branches in 74 different countries of the world. It had its 3 branches in

Pakistan. In 1991, the BCCI was banned, when it was accused by European countries that

the bank was involved in some illegal operations with Gulf countries. The major reason

behind European accusation was that BCCI was of Islamic mode. Therefore, the bank was

closed due to international pressure. Then, its 3 Pakistani branches were taken over by the

Government of Pakistan, which were named as Habib Credit and Exchange Bank (HCEB)

and these were working as subsidiary of Habib Bank Limited.

Following the privatization in July 1997, Habib credit and Exchange Banned assumed the

new identity of Bank Alfalah on February 25, 1998. It is now Abu Dhabi based bank as the

family of Sheikh Nahayan Mubarik Al Nahayan purchased 70% of its shares and 30%

shares remained with Habib Bank on behalf of Government of Pakistan.

The development of various sectors in Pakistan. The bank has already made significant

contribution in building and strengthening both corporate and retail banks sector in

Pakistan. Assessment of the needs and wants of customer is an on going process at Bank

Alfalah, which help to certennially develop new products of services. Designing the

product portfolio in response to royal patriot, royal custodial, Alfalah car finance, Alfalah

rupee traveler cheques, home loans are prime example of quality innovation providing

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timely banking opportunities to customer. To continuously offer courteous, professional

and advanced banking solution the team of bank has recently been rejuvenated by going

through training programs with focus to information technology.

With their key indicators of progress a steady soaring to new heights, the bank is

committed to dedicate all its energies, resources and time to bring higher value and

satisfaction to their customers and employers.

The graph of the bank is going up and up every year. The ratio of profit is increasing at a

good percentage. The bank is serving the people at high level of standard by according to

expectation of customers.

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ACHIEVEMENTS

The Bank is fully aware that the branch network has direct implications on the

services that are it provides to its customers. In the year 2007, the Bank Alfalah network

extending our coverage to Two Hundred and Fifteen(215). We are confident that a well

integrated branch network, offers greater potential for serving a larger client base through

high value products.

Bank Alfalah continually endeavors to develop a wider spectrum of innovative

financial products based on consumer needs. TheAlfalah Visa Cardhas been recognized

by the Visa International as the first credit card in South Asia to have crossed the100,000th

mark in the shortest timeframe.

Alfalah Car Finance is another market leader offering superior value and convenience to

its clients. .

Consumer durable financing was launched in August 2003. This product too has also met a considerable

success in the market. Similarly, the overwhelming response received to the Home Financing scheme

launched by the Bank during the last quarter of 2003 offers great potential of becoming yet another important

product of the Bank. In the latter half of 2003, Phone Bankingwas launched with a view to

establish a more direct contact with our clients. This support centre has greatly facilitated

the overall sales efforts of the Bank.

Alfalah has emerged as one of the leading commercial banks in the financial sector

of Pakistan. Charged with strength of Abu Dhabi consortium and under the leadership of

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his highness Sheikh Nahayan Mubarak, minister of higher education and scientific research

and prominent member of Royal family. The bank is energized with vision, envisaging.

CREDIT PORTFOLIO

A depressive interest rate environment has spurred the competition for scarce

banking assets in local financial industry. While Bank Alfalah remains a key player in the

market, however, it treads with caution so that the quality of its credit portfolio is not

compromised. The Bank has employed a proactive approach in the form of a well-designed

and transparent credit approval process. This process benefits from an inherent system of

checks and balances at each level.

CREDITRATING

Despite the political and economic uncertainties, Bank Alfalah was able to maintain

its impressive credit ratings of AA- and A1+ in the long and short term respectively. These

ratings are indicative of a very high credit quality and low potential for credit risk. These

ratings have been assigned by the PACRA, the leading credit rating agency of Pakistan.

These ratings have been awarded on the basis of a steady improvement in organizational

performance, augmentation in equity base and increased sponsor backing.

HUMAN RESOURCE DEVELOPMENT

Development of professional skills and knowledge of the employees is essential for the

efficient functioning of any organization. At Bank Alfalah appropriately designed policies

and practices have been instituted to achieve this strategic objective.

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Our state-of-the-art training centre at Karachi remains indispensable in imparting

valuable training to all our team members. This has become especially important

considering the pace of change that the banking industry is exposed to. Consequently

training ensures that change is successfully navigated to discover potentially beneficial

opportunities that can be transformed into direct gains for the Bank and its customers. This

also positively impacts the confidence levels of our employees translating into better job

performance and satisfaction. Now Bank also Offer Training Facilities in Lahore Pakistan.

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Vision Statement

To be the premier organizations operating locally and internationally that provides the complete range of

financial services to all segments under one roof

Mission Statement

To develop and deliver the most innovative products, manage customer experience,

deliver quality service that contributes to brand strength, establishes a competitive

advantage and enhances profitability, thus providing value to the stakeholders of the

bank.

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Slogan

Taking Service Excellence To New Heights

Helping you realize your dreams

The Caring Bank

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CORPORATE INFORMATION

Company Secretary

Mr. Hamid Ashraf

Chief Financial Officer

Mr. Zahid Ali H. Jamal

Auditors

Taseer Hadi Khalid & Co.

Chartered Accountants

Head Office

B. A Building

I. I. Chundrigarh Road

P.O. Box 6773

Karachi

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Executive Committee

Mr. Mohammad Saleem Akhtar

(Chief Executive Officer)

Mr. Ikram Ul-Majeed Sehgal

Mr. Parvez A. Shahid

Mr. Mohammad Yousuf

Mr. Tanweer A. Khan

Mr. Sirajuddin Aziz

Mr. Mahmood Ashraf

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Branches Network

The network of bank alfalah consist of 215 branches all the country-wide.

Details: -

CITIES No. of Branches

Karachi 18

Lahore 13

Peshawar 2

Rawalpindi 2

Faisalabad 2

Multan

Bahawalnagar 5

Bhawalpur 1

Dera Ghazi Khan 1

Gujranwala 1

Gujrat

haroonabad 1

Hyderabad 1

Islamabad 1

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Jehlum 1

Mardan 1

Mianchannu 1

Mengora (Sawat) 1

Queeta 1

Rahim Yar Khan 1

Sahiwal 1

Sargodha 1

Sheikhupura 1

Sialkot 1

Sakhar 1

Wah Cantt. 1

D.I.Khan 1

Gawader 1

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FEATURES

Bank Alfalah Limited is an established bank. It has some special features with the help of

those it is growing rapidly.

OUTSTANDING WORK ENVIRONMENT

As the work environment plays a great role in this competition age, so the bank has

good work environment. All the people work with cooperation; managers are so kind that

each problem can be discussed with them.

EFFICIENCY

Employees at Bank Alfalah are quite efficient. They work more than their working hours

and it is all according to their will. It also shows their loyalty, commitment to

organization.

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CUSTOMER SERVICES

All the customers are entertained individually. Same kind of behavior and attention is given

to all the customers.

SUGGESTIONS ASKED FROM CUSTOMERS

Getting ideas for improvement from customer side is a new idea and that is working very

well in Bank Alfalah Ltd. All the customers are asked to fill a suggestion form and the

standards of the bank are improved through them.

EMPLOYEE BENEFITS

Employees are given the benefits like bonus, gratuity funds, loans, increments, house rent,

medical and conveyance allowances.

COMPUTERIZED WORKING ENVIRONMENT

In bank, all the work is done remotely. All the entries are made using the systems which are

internally and externally integrated. This increases efficiency of the bank.

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DEPARTMENT HIERARCHY

Bank Alfalah Limited

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Branch Level Hierarchy

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Bank AlfalahLimited

OperationDepartment

Credit MarketingDepartment

CAD TSD Consumer financing

Department

Account Opening

Section

Online

TransactionSection

Clearing Section IT & RemittancesSection

Car Financing

Home Financing

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Branch ManagerMr. Muhammad Ijaz

OperationsManager

Mr. Anees-ur-Rehman Akhtar

Manager ConsumerFinance

(Mr.Faisal Rana)

Manager ConsumerFinance

(Mr.Faisal Rana)

Incharge Credits(Mr.Sanaullah)

Trade&ServiceManager

(Mr.Amir)


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PRODUCTS OF BANK ALFALAH LIMITED

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Foreign currency accounts- new scheme (saving)

Projected Profit rates (per annum)

Currency Profits

(Semi-annually)

US Dollar 1.00%

UK Pound 2.00%

Euro 1.25%

ROYAL PROFIT (PROFIT BEARING CURRENT ACCOUNT)

Projected profit rates (per annum)

Amount Profit (Yearly)

From Rs. 50,000 to 999,999 2.50%

From Rs. 1000,000 to 9,999,999 3.5%

From Rs. 10,000,000 to 25,000,000 4.00%

From Rs. 25,000,000 to 50,000,000 4.75%

From Rs. 50,000,000 to and above Contact Treasury

CLASSIC PLS DEPOSITS

Projected profit rates (per annum)

Type of deposits Profit

Saving account 2.00%

TERM DEPOSITS

1 Month 3.50%

3 Month 4.00%

6 Month 4.25%

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1 Years 4.75%

2 Years 6.00%

3 Years 6.50%

ATM

Bank Alfalah through its commitment to provide superior and improved services to its

valued customers, has unveiled a nationwide network ofATMs. For customer

convenience, customers now have access to instantaneous cash availability, 24 hours a day,

7 days a week. ATMnetwork is geared up to exploit the latest technology, and is equipped

to meet the highest standards of security and efficiency.

With new ATM card you can now:

Withdraw Cash

Use our convenient, user-friendly fast cash option

Make a Balance Inquiry.

Get an instant printout of your account balances

Get a printout of your last transactions (Mini-statement) on the spot.

Change your PIN (Personal Identification Number).

Bank Alfalah is pleased to introduce 27 state of the art ATMs, deployed at the most

convenient and accessible locations. Bank Alfalah is a founder member of the 1-Link

Switch, thus making a countrywide network of ATMs available.

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ONLINE BANKING

Bank Alfalah now offers the facility of on-line banking to its customers through its

countrywide network of branches. Customers can use the ATMs or the banking counters of

any branch for day-to-day banking needs, irrespective of branch where they maintain their

accounts. For Corporate customers centralized Cash Management facility is also offered

through on-line banking.

PHONE BANKING

"Alfalah Phone Banking is available to all customers on a countrywide basis. Customers

can dial 111-225-111 (without any city code/prefix) from their respective cities i.e. 21

cities where Bank Alfalah is present, and get prompt services from the Centralized Phone

Banking Services. Customers enjoy 24x7 Round the Clock Phone Banking Services.

Bank Alfalah is the first bank in Pakistan to offer Centralized UAN connectivity from 21

cities to its Call Centre with Hunting & ACD facilities.

MONEYGRAM

Bank Alfalah limited, in collaboration with MoneyGram, offers remittance service to

Pakistan. MoneyGram is person to person money transfer service that allows consumers to

receive money in just a few minutes. MoneyGram is available in over 154 countries and in

more than 40,000 locations worldwide. With MoneyGram your money is transferred

immediately and usually arrives at the receiving end within 10 minutes, other services can

take days or weeks. There are no complicated procedures and you do not need a bank

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account or a credit card. Whats more, the receiver is handed the cash immediately.

SECURE AND RELIABLE

An extensive network of quality agents, linked by computer, will transfer your money

safely and ensure that it is handled with care and without delay. Thousands of people

already use the MoneyGram service all over the world. It is trusted for its reliability and

security.

CONVENIENT AND FAST

MoneyGram is available in over 154 countries and in more than 40,000 locations

worldwide. With MoneyGram your money is transferred immediately and usually arrives at

the receiving end within 10 minutes while other services can take days or weeks. There are

no complicated procedures and you do not need a bank account or a credit card.

RUPEE TRAVELLERS CHEQUES

CONVENIENT DENOMINATIONS

Bank Alfalah presents Rs.1,000, 5,000 and 10,000 denominations of traveler cheques,

making it very convenient to carry money while traveling or keeping your emergency cash

safe.

YOURE GREAT COMPANION WHILE TRAVELING

Bank Alfalah travelers cheques are your best travel companion as

they provide the most benefits that no other travelers cheques offer. Alfalah TCs have

matched security features Plus, you don't have to be an account holder to avail these

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benefits! Free from the risk and hassle of carrying cash during travel, Bank Alfalah

TCs ensure safe and smooth travel.

THE MAXIMUM SECURITY FEATURES

Lithographic security features, invisible UV printing, high definition micro-lines, anti-

scanner effect, mould based paper, Alfalah watermark and printing in the UK, are just

some of the security features of our TCs which prevent counterfeiting. Just in case you

are still not convinced, we refund your money in case of loss or theft of your TCs.

FEATURES

Convenient denominations available

Rs. 1,000

Rs. 5,000

Rs. 10,000

Maximum security features

Special embossed intaglio printing in the UK, Alfalah security thread and Alfalah

watermark. Just some of the advanced features that make your TCs secure.

Fully refundable

you can refund your TCs without any penalty or loss.

Transferable and endorsable

you can transfer and endorse your TCs over to anyone.

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Unlimited validity

Bank Alfalah TCs will always remain encashable.

No account needed

You dont have to be an account holder to get our TCs benefits.

Network of Branches

Bank Alfalah branches all across Pakistan.

CREDIT CARDS

Bank Alfalah Limited offering credit cards with minimum markup and in wide variety in

the market. Markup rate that is charge is 2.50% after the 51 days of transaction. Bank

Alfalah also does not charge any annual fee and no charges when you avail credit card

facility.

Bank Alfalah offering various varieties of cards:

Gold Card 150,000 --- 499,000

Silver Card 25,000---150,000

Women Exclusive 16,000---499,000

Classic Blue (professionals) -----------(only for panel companies members)

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FEATURES

Balance transfer facility-Smart settlements

Offering an easy and convenient way to settle or unsettled credit card payments on all

existing credit cards in Pakistan. Avail this facility at as low as 1.5%.

Cash advance facility 75% of your credit limit

Now you can avail cash advance facility up to 75% of your available credit limit. Enjoy the benefits of this

exclusive offer on your Bank Alfalah credit card. Step by step monthly installment plan 1.25% p.m. only

Now you can convert any transaction, amount of Rs. 3000 and above to a step-by-step

monthly installment payment plan. It gives you the flexibility to convert your large

payments into small equal monthly installments.

Free supplementary cards

Offering the facility to acquire free supplementary cards for your family members. Avail

this card without any extra cost.

Fortunes

Offering an amazing rewards program that let you earn points every time you use Alfalah

Visa card. Redeem the earned points anytime for fabulous gifts of your choice.

Discounts

Offering discounts at wide range of outlets, selected especially to much your taste. You

can avail matchless discounts each time you charge your card at these outlets.

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Insurance Cover

Offering card members a range of features design to protect you and your family from the

set backs of life, at very affordable rates.

Petrol facility

Offering you the facility that saves you extra that you pay when you are use Alfalah

Credit Card at all patrol pumps in Pakistan.

UNIQUE BENEFITS

Bank Alfalah Auto Debit Service

This facility is specially designed for Bank Alfalah account holders. It gives the option of

making minimum or full payments through Bank Alfalah Savings / Current Pak Rupee

account specified on Alfalah VISA monthly statement.

Bank Alfalah Credit Cover

Alfalah VISA offers card members a new and powerful protection against the uncertainties of life. In the

unfortunate even of prolonged illness, disability or death, its reassuring to know that with Alfalah Credit

Cover you have no cause to worry about your monthly credit card repayments. Alfalah Credit Cover has a

range of features designed to protect you and your family from the setbacks of life, at rates that are

affordable.

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DOCUMENTS REQUIRED

Eligibility Criteria

Total gross salary / income of Rs. 8,000/- or more per month.

Aged between 25 to 60 years (60 years at maturity of facility).

Should be Pakistani National

For Salaried Applicants

Copy of National Identity Card.

Current Salary Slip/Salary Letter / Proof of BPS (for Govt. Employees)/ Proof of

Rank for Armed Forces Personnel) .

Computerized Personal Bank Statement (on bank letterhead in original) for last

six months.

For Self Employed Applicants

Copy of National Identity Card.

Computerized Personal Bank Statement (on bank letterhead in original) for last

six months.

Additional Requirements

Partnership deed & personal account statements of partners (if any) for last six

months.

Bank letters / certificate confirming Proprietorship (in case of Proprietorship).

Memorandum / Articles of Association / Form A (in case of private limited

company).

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Recognized professional degree / membership certificate to professional

associations (in case of professionals).

ALFALAH CAR

Its a scheme that enables one to own his desired car at easily affordable and flexible

installments with a minimum down payment and insurance.

BENEFITS AND FEATURES

Quickest processing

No hidden charges

Minimum down payment

Complete repayment at any point of time

Balance transfer facility {BTF} for existing as well as new clients from other

Banks

Tenor period ranging from 1 to 5 years.

Financing of all brand new locally assembled vehicle, also second hand.

Financing limit ranging b/w Rs. 200,000/- to Rs. 2000,000/-

CORPORATE & INDIVIDUAL CAR LEASING

BALs recently introduced car leasing facility for individuals and corporate sector has set

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new dimensions for the product. Now you are provided with the option of either to get

the vehicle leased or financed.

INSURANCE

Renowned and reliable Insurance companies are offering the competitive rates of

Insurance. Pay year insurance premium in advance (at the time of down payment) and

remaining in the subsequent equal monthly installment.

HOW MUCH EXTRA MONEY BEING PAID? {MARK-UP}

Offering lowest rate of markup of 12, 12.5%, {per annum}, BAL has captivated a major

market share and so is the plan for future.

REPAYMENTS

Easily affordable installments on monthly basis in the form of postdated cheques will set

you free of depositing your rental cheques every month.

Hypothecation of vehicle in the name of the Bank Alfalah Limited.

YOU CAN ACT AS A CO BORROWER

Acting as a co borrower, will enables your family members {spouse, children- 18 year

and above} to avail the financing facility and can get the car registered in their names as

well.

ELIGIBILITY CRITERIA

Yes you get a car loan form bank Alfalah to purchase a brand new car if you are:

Pakistani National Identity Card holder.

Over 20 years of age (Maximum 60 years in case of salaried and 62 in case of a

business person at the time of maturity of the loan).

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Salaried, Businessman or self employed.

Required documents for car finance facility

1. Application form

2. Copy of national Identity card

3. Copy of Driving License (optional)

4. N.T.N. Certificate

5. Copy of current utilities bill of residence

6. Bank account statement for last six months from the date of application

7. Signature verification fro duly verified by t he banker

8. An Assets & liabilities statement (where banks financing exceeds Rs. 5 Lac.)

9. CIB report required (where banks financing exceeds Rs. 5 Lac.)

10. Basic Borrower Fact Sheet

Additional requirements forbusiness class individuals

a. Copy of rental/ purchase agreement of business premises.

b. Sole proprietorship letter on relevant business letterhead.

c. Partnership deed (if applicable).

d. NOC from other partners (if applicable)

Additional requirement forself employed professionals

a. Copy of rental/ purchase agreement of business premises

b. Copy of membership of respective institution/ association

c. Must be practicing from last 3 years.

Additional requirements forlandlord

a. Fard malkiat/ title deed of land

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b. Undertaking fro competent landlord

OPERATION DEPARTMENTOPERATION DEPARTMENT

Operations department of the Bank Alfalah Limited is responsible for the overall

operations of the bank.

Operation Department has following segments.

a) Cash

b) Clearing

c) Remittance

d) Account opening

e) Accounts department

The detail of those departments that are controlled under operation department is as

under.

a) Account opening

b) Cash department

c) Clearing

d) Remittances

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ACCOUNT OPENING DEPARTMENT

It is most important department of bank. Mr.Ahmed Kamal Pasha deal in this department.

Following procedure is adopted for this purpose.

PROCEDURE OF ACCOUNT OPENING

It is very simple and quick procedure. A person who wants to open an account must have

the introduction of banks staff or any already existing account holder of bank. The

customer is required to fill an account opening form. Then signatures of the introducer

are verified from S.S. Card before opening account. AOF is very standard and up to the

mark which contains almost whole information about customers. Customer is guide to fill

all columns of AOF. All formalities and requirements are completed and verified, and all

supportive documents are taken and checked according to the nature of account. If any

formality is incomplete, chequebook is not issued until it is fulfilled.

If a person cannot sign write his / her hand thumb impression is affixed marked, which is

attested by one male or two female witnesses. Thumb impression for female right hand

and for male left hand.

They also have to give identity letter

NIC copies

Passport size photograph

One place on the form other is on SS Card they have non-bearer cheques. On their

cheque book a stamp is affixed on it there is written. Thumb impression should be fixed

in front of an officer of the bank. The bank does not make payment of a cheque bearing a

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six months or older date. If any account is not operated in six months. It is called dormant

account.

Following Factors Prior To Opening of Account Should Be Consider

1. The suitability of the perspective customers

2. Verification of customer credentials.

3. The perspective possibility of profitability of the relationship.

4. The proposed relationship does not violate:

Current Account

1. No limitation on frequency or amount of transaction.

2. No profit payable.

Saving Account

Profit is payable

1. No of withdraw restricted

2. Large amount of withdraws requires 7 days.

GENERAL PRINCIPLES

1. No account will be opened on fictitious name.

2. All documents necessary required for opening account must be taken after

verification from original

3. No operation of account should be allowed & chequebook must not be issued

until all formalities are confirmed.

4. Genuineness of introduction should be properly ensured

5. All information of AOF should be filled at front of concerned officer.

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TYPES OF ACCOUNTS

The bank different types of accounts exist.

1) INDIVIDUAL ACCOUNT

Any individual or proprietor of business can open an individual account at BAL.

PLS (profit and loss sharing) saving accounts can be opened with the minimum balance

Rs. 5000/- with expected profit rate is 9%. Following requirements has to be fulfilled for

this account.

Signature of customer on back of AOF.

Mention next of kin (nominee)

Name and A/C # of introducer.

Verified sign of introducer.

Customer signature admitted by officer.

N.I.C photocopy attached.

Letter of thanks.

2) JOINT ACCOUNT

When different people want to or need to share a single account it is called joint account.

The names of persons are written on the title of A/C and on S.S. card.

Joint A/C cannot be opened by single person. Both persons have to sign on cheques.

When two or more person neither partner nor trustee open account in their name is joint

account.

Requirements

Sign of both customers on back of AOF

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Sign on joint A/C # mandate

Name and A/C # of introducer

NIC copies of both members.

Mode of operation.

3) BUSINESS ACCOUNTS

When the owner of the firm is operating singly, open an in his term name.

I) Sole Of Proprietor Account

This account is for that person who has his own business of the business he is one owner

of the firm.

Requirements:

Companies stamp

Declaration of proportion companies letterhead.

Sign on AOF.

NIC copy

Verified signature of introducer.

Sole proprietorship declaration

II) Partnership Account

Account title will be the name of the partnership firm.

Requirements

Sign of customers on back of AOF.

NIC copies of partners

Partnership deed (certified copy) duly attested by notary republic.

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Partnership mandate (prescribed format)

Companies rubber stamp

The A/C is opened in the firm name and all partners designate one or two persons to act

behalf of the partnership firm all acts of the firm jointly and severely.

III) Limited Company

Limited Co:

1) Private Limited

2) Public Limited

PRIVATE LIMITED

Requirements

Restrain on companies letterhead dully attested by chairman.

Sing of all directors on back of AOF.

NIC copies of all directors.

List of directors on companies letterhead.

List of memorandum and article of association.

Copy of board resolution.

Latest form 29 (if director is to be changed or in case of his death, this kind of

form is filled, it includes information that a new director has how much number of

shares with him.

Companies rubber stamp.

Copy of certificate of incorporation should be attested by director, co register an

office stamp should be affix.

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PUBLIC LIMITED

1) Certificate of commencement of business

2) Same as home documents.

CLUB / SOCIETY / ASSOCIATION

These concerns are non-trading in nature. They have their own rules and regulation and

their affairs are mentioned by the committee called as a governing body or managing

committee.

1) Stamp of directors

2) NIC copies

3) Certified copy of resolution

4) Memorandum and article of association

5) List of heads on companies letterhead.

6) Bank account opened in their name with BAL.

7) Name of person to be specified for the operation in account.

8) The manner in which the account shall be operated.

9) Letter of registration.

SPECIAL TYPES OF ACCOUNTS

These types of accounts only can establish after approval of system and operation

division head office: -

o Trust Accounts

o Accounts of executors / administrators

o Accounts of liquidators

o Accounts of local authorities/ municipals.

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CHEQUE BOOK ISSUANCE

When the account is opened, then the customer is given a chequebook to sign upon and

withdraw money. It proceeded as under.

PROCEDURE

All the account opening formalities must be completed before issuance of chequebook.

Particulars of the chequebook requisition should be completed containing title of account,

account number, type of currency, number of leaves and signature to the customer.

Signature of the customer is verified on the requisition.

If customer is unable to collect his chequebook, then he can give authority to the third

person to collect his cheque book on his behalf by signing on the back of the requisition,

in such case, the particulars of the third person are required like name of the person NIC

number and signature of that person on requisition and cheque book issuance register.

Chequebook is taken out from the safe / locker. It is assured that series of the

chequebook. Particulars are entered in the chequebook issuance register. Account number

is stamped on very leave of the chequebook and those leaves are counted. Name of

account holder is written on the cover of the chequebook. And requisition on the

chequebook for further issuance is properly filled, stamped and signed by officer of the

bank. Chequebook is delivered to the customer and his signature on the chequebook

issuance register. Chequebook serial number entered. In the system (FoxPro), Stock of

chequebook are balanced at the end of each day and kept under safe custody. Earlier the

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banks were charging a fee for issuance of chequebook but now whenever a new account

is opened, the account holder issued a chequebook free of charge.

Bank Alfalah issues the following cheque books.

Cheque Book 10 leaves



CLOSING OF ACCOUNT

When a customer wants to close an account he has to given a hand written application to

the head of the operations department to close his account plus return remaining leaves of

Cheque book. The manager first verifies the sign of account holder, then closing is done

from the registers on the computer where the account was opened. In the file of the

account holder his account opening form is crossed. For this closing a fee of Rs. 150/- is

charge in BAF.

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TYPES OF CHEQUES

There are four types of cheques:

In-house cheques / transfers cheques

Inter branch cheques

Inter bank cheques

Outstation cheques OBC

VERIFICATION OF CHEQUES/ INSTRUMENTS

Some important things should be verified and confirmed about the cheques and

instruments:

1. It is not stale/ post-dated or incompletely dated.

2. It is not mutilated.

3. There are no unauthenticated alterations on the cheques/ instruments or the

pay-in-slip

4. The amount in words & figures on the pay-in-slip agrees to the total of the

cheques enclosed.

5. The details on the pay-in-slip & counterfoil do not differ.

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CASH DEPARTMENT

Cash department of Bank Alfalah is work under the operation department. This

department is given the complete responsibility of cash, as result of transaction in touch

local and foreign currencies. It is also responsible for the book keeping of these

transactions and the safe custody of cash. Out of five counters of cash department one

counter is fixing for senior citizens and females. All counters are dealing at the same time

in deposits, withdraw and online transaction processes.

This department performs the main function.

a) Cash receipts

b) Cash payments

CASH RECEIPTS

In cash department depositors are use deposit slips for depositing the amount into their

accounts. The officer checks if the deposit slip is properly filled up containing title of

account, A/C number date and amount in words and figures. Detail on both counter file

and cash receipt voucher should be the same. Cash is received by cash receiving officer,

twice counted and matched with the deposit slip. The cash details are written on the back

of the deposit slip and are also entered in computer software called bank Smart. Cash

received stamp is affixed on the face of the deposit slip along with the signature of the

cash receiving officer.

Deposit slip is forward to the officer in the cash department. Again proper scrutiny is

made by the officer cash department both on cash receipt and Bank smart software.

Officer cash department sign the deposit slip and finally approved the transaction on

Bank Smart. Deposit slip is credited and posted in the concerned accounted in the system.

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Counter folio is given the deposition as receipt. One consolidated cash debit voucher is

posted in the system to balance the cash.

CASH PAYMENTS OF CHEQUE

All five counters deal with cash payments the process for payment of cheques local and

foreign currency is same. First the cheque is presented by the customer or holder to cash

payment officer. He confirms that it is drawn on the same branch and the particulars of

cheque are properly filled in. one signature of the holder is taken on the back of the

Cheques. Officer checks the date, amount in words and amount in figures, payees name,

crossing if any, account number, cheque serial number, any material

alterations/endorsements and signature of the customer. Account is debited in Bank

Smart and then cheque is cancelled by the officer. It is posted in the system and posting

stamp and number is affixed on it. At the end officer hands over cash to client.

CLEARING DEPARTMENT

Before discussing it is necessary to know what is clearing.

The process by which cheques exchanged between the collecting and paying bank and

the ensuing financial settlement is called clearing.

This facility is provided by the state bank of Pakistan for offsetting of cross obligations

between the different banks. Clearing is of two types:

1) Inward clearing

2) Outward clearing

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INWARD CLEARING

When cheques drafts, etc, of our branch presented to us for clearing by the SBP. Cheques

to be honored by bank.

OUTWARD CLEARING

The cheques of other banks which the account holder deposits in their accounts are send

for collection.

CLEARING PROCESS (INWARD/OUTWARD)

Here the local cheques are received that are drawn on BAF. All the cheques are received

on one counter along with the paying slips duly filled in properly containing particulars

of cheques and account holder. Counter folio of paying slip is handed over to the

customer by putting stamp for cheque received for collection for Bank Alfalah on it duly

signed by officer. These cheques are scrutinized and cheques for local clearing are

separated from OBCs. These are then entered in clearing register and cheques for

collecting are entered in OBC register and handed over the bills department of collection.

Clearing officer checks and verifies title of all the cheques deposited by the customer to

confirm the good title of the cheques. Cheques are scrutinized properly and paying slips

are separated from cheques. Special crossing, endorsement and clearing stamps are

affixed on the cheques. Cheques of each bank are sorted and arranged branch wise.

All the cheques are then entered into the clearing system of bank. Print out of the clearing

is taken and details are attached. With the cheques of each bank. Details of these banks

are then entered into the clearing schedule containing number of cheques presented and

their total amount against the name of each bank. Then total number of cheques presented

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to all banks and their total amount is written on the foot of that schedule, which is tallied

with the clearing register.

Next morning, these cheques are delivered to the respective banks in clearing house of

SBP between 9:00 to 9:30 AM. In the same manner, other banks present their clearing

drawn on Bank Alfalah. Total number of cheques and their amount delivered to other

banks are received from them are written on the clearing house schedule and handed over

to the officer clearing house SBP. Cheques / DD received in clearing are given to the

officer cash department of the branch for their repayment. After I proper scrutiny of

cheques, verification of signatures and confirmation of balance in the account, officer

cash department pays these cheque by canceling and posting them in the system.

If any cheque is not passed due to insufficient balance or any other reason, officer cash

department returns the same cheque by attaching a cheque return memo containing

reason for return. This cheque is entered into the cheque returned register and bank

charges are deducted according to the schedule of charges.

Second clearing is called at 2:30 PM to check the fate of the cheques presented to other

banks in the morning. If any cheque is to return, that is delivered to the same bank in

second clearing. In the same manner, if any cheque presented by Bank Alfalah in first

clearing is returned, they receive it and once again give schedule of clearing figure to the

officer clearing house SBP containing number of cheques and their amount delivered and

received unpaid.

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ACCOUNTS DEPARTMENT

Account department is the most important department of the bank. Because it is

concerned with:

Revenue

Expenses

Assets

Liabilities

These are the pillars of any business. In this department, all the vouchers that are posted

during one day are sent to the account department next day. These vouchers are already

posted to computer by the concerned department. So computer also sends a report to the

accounts department. The accounts department has to tell that the requirements for

cheques and vouchers are fully checked. If any kind of renovation or construction or

rebuilding is done, all is paid from the accounts department. Like petrol for the car of

EVP or VP, stationery charges, medical allowance, etc. are all paid by this department.

DAILY CUSTOMER MOVEMENTS LIST

All the changes that are made in accounts of customer are shown in the daily customer

movement list. By using this list, people of accounts department can prepare the

vouchers.

Following activities are performed by account department:

Voucher preparation

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

Budgeting and fixed assets

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Employers benefit

Expenditure approval.

The bank does not make payment of a cheque bearing a six month or older date. If an

account is not operated in six months, it is called dormant account.

TYPES OF ACCOUNT

Current account

Saving account

Notice deposit

Term deposit

CURRENT ACCOUNT

There is no interest on these accounts. It is only for transaction purposes. They paid on

demand. Where a banker accepts, paying all checks drawn against him to extend of the

balance in the accounts. As there is no profit paid on this account, it is also called

checking account because cheque can be drawn on it. Current account is mostly opened

for business. The minimum balance requirement for opening the current account is Rs.

10000/- inter bank fund transaction are handled by current account.

SAVING ACCOUNT

The purpose of this account is to introduce the habit of saving individuals in the

neighborhood. The profit on saving accounts is paid on the basis of profit and loss

sharing after every six monthly. The minimum balance requirement for opening the

account is Rs. 5000/-.

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NOTICE DEPOSITS

Notice deposits are kind of fixed deposits. The minimum balance requirement for

opening the account is Rs. 500/- and payment is drawn on maturity of the specific

perio

Notice Deposits is ofTwo Types:

One for which a prior notice of 30 days and is required from the customer before

withdrawing deposited amount and for which rate return is 1.50%.

Second for which a prior notice of 30 days and above is required from the

customer before withdrawing deposited amount and for which the rate of return is

1.50%.

TERM DEPOSITS

A term deposit is a deposit that is made of a certain period of time. At the end of specific

period the customer is allowed to with draw the principal amount. The rate of return of

this account varies from 1.50% to 2.25%. The term deposit account varies from one

month to 1 years and the minimum balance requirement is Rs. 500/-.

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REMITTANCE DEPARTMENT

The need of remittance is commonly felt in todays business. A major function of any

bank is to transfer of funds form one place to another. Bank Alfalah uses the following

modes of transfer of funds.

Demand draft (DD)

Pay order (PO)

Call deposit

Pay slip

Money gram

Rupee Travel Cheque

DEMAND DRAFT

It is instrument, which is used to transfer amount from one city to another city it can be

made on cash as well as on cheque. If it is made through cheque that it is necessary that

person must be A/c account holder while in case of cash any person can made. It consists

of four copies.

1) Original copy which is given to account holder.

2) DD advice is sent to the central branch.

3) Third copy is for reconciliation.

4) Last copy is sent to head office for reconciliation.

Procedure

The client who wants to transfer his funds form one city to another fills a form requesting

the bank to prepare a DD. DD application form contains columns requiring information

for the preparations of DD e.g.

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Beneficiary name

Applicants name

Address

Amount to be sent etc.

Bank deducts some charges against DD. These charges include commission tax

provincial tax etc. Tax is deducted 0.3% while PT charges are 0.50 paisas. If customer is

taxpayer than advance tax is exempt provided that he submit the tax exemption

certificate.

Procedure for Foreign Demand Draft Issuance

Application form is given to the customer to fill the same. Two signatures are taken on

the form, one for request and other for receiving the instrument. All the particulars of

application form are checked and bank commission is charged, which is US$ 5/- for each

amount of FDD. Cheque is received from the customer for total amount of FDD plus

bank commission. Cheque and application form is then given to the officer cash

department for the payment cheque.

After proper scrutiny, officer cash department posts the cheque and signs the application

form, to assure that payment is received. Then cheque and application form is given to

the incharge. Remittances, who will enter all the particulars of the application in the FDD

issuance register. If the customer wants to pay cash, it is deposited by the customer on

cash counter. Cash receiving officer receives cash on the application form along with the

bank charges. Application form is then given to the remittances incharge for the issuance

of the instrument. A control number is allotted to the instrument form FD register.

Instrument is complete by putting all the particulars in it and signed by two attorney

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holders. Instrument is then handed over to the customers. FDD advice is sent to the

responding foreign bank / paying bank where they are maintaining dollar account through

registered mail. Exchange transaction credit advice (ETCA) is sent to eh Head office fore

the reimbursement. Copies of the FDD and ETCA are kept in the record of the bank.

Reimbursement, Copies of advice (ETCA) and FT are kept in the record for the bank.

COLLECTION

All the cheques under collection are called cheques under collection in Bank Alfalah

Limited. There are two types of bills for collection:

Outward Bills for Collection

Inward Bills for Collection

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Outwards Bills for Collection

All the cheques are received on one counter along with paying slips duly filled in

properly containing particulars of cheques and account holder. Counter folio of

paying slip is handed over to ht customer by putting stamp for cheque received for

collection for Bank Alfalah on it duly signed by officer. These cheques are

scrutinized and cheques for local clearing are separated from OBCs. Cheques for

local clearing are entered in clearing register, whereas cheques for collection are

entered in OBC register and handed over to the bills department for collection. OBC

number is allotted to eh cheque from OBC register. Special crossing and bank

endorsement stamps are affixed on the cheque. OBC schedule is attached with the

cheque and dispatched to the main branch of that city for collection. If they do not

have any branch in that city, then cheque will be sent to the collecting agent of Bank

Alfalah for then cheque can be sent directly to the drawing branch; instructions are

given on the OBC schedule for the payment of that cheque.

PAY ORDER

Written order which is issued and received to the save book or drown or payable on save

branch. Application form is given to the customer to fill. Two signatures are taken on the

form one for request and other for receiving the instrument. All the particulars of

application form are checked and bank commission charges and with holding tax is

written on the top of the applicant form. If the customer is maintaining his account with

the branch he can give cheque for total amount of instrument plus bank charges. Cheque

and application form is then given to the officer cash department for the payment post the

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cheque and signs the application form in token of payment received. If the customer

wants to pay cash, cash is deposited by the customer on cash counter cash receiving

officer receives, cash on the application form along with the bank charges and

withholding tax.

Application form is given to the remittances incharge for issuance of instrument. He

enters all the particulars of the application form in the system (BPG) and computer gives

an auto control number to the instrument. Print out a take on the block payment order. It

is then signed by two authorized officers of the branch. Instrument is protecting graphed

and given to the customers. When the instrument is presented for payment, it is posted in

the BPG and canceled by the remittances incharge after proper scrutiny.

PAY SLIP

It is used when bank itself pay for any type of transaction e.g. purchased of stationary.

MONEY GRAM

Bank Alfalah Limited, in collaboration with money gram offer remittance services to

Pakistan.

Its basically a person to person money transfer service that allows consumer to receive

money in just a few minutes.

Procedure

Person must have reference no.

Person must tell reference no. and compute the simple form.

Person has to show NIC and tell compute introduction after that he can obtain

money.

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Vouchers are also posted in the system. When OBC is realized collection bank pays the

amount through IBCA if it is the same bank or through DD if it is another bank. If DD is

received against OBC, it is presented in the clearing for collection. If IBCA is received

the branch for the payment of OBC, certain vouchers are posted in the system.

RUPEE TRAVEL CHEQUE

BAL always provide to its customers different type of services. Which are safe and

quality services RTC is very popular among the people of the country. The bank provides

RTC in the following categories.

Purchases of RTC

The person who wants to purchase RTC is required to fill a form. The form contains

name, address, amount or denomination and other necessary information. The

purchaser deposits the amount in the bank and gets a voucher from the cashier. And

then RTC is providing to thepurchaser. Before handing over to the purchaser,

signature is taken from him on the RTC and on the copy of form. BAL rupee

travelers Cheques are acceptable in all the branches of BAL in Pakistan.

Features

Following are some features of RTC.

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It is acceptable in all the branches of BAL in Pakistan.

In case of lost the purchaser inform to BAL in 24 hours. Then there is no way of

loss of purchaser and his amount is safe.

Available easily in all the branches of BAL Acceptable by major businesses of Pakistan.

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CREDIT DEPARTMENTCREDIT DEPARTMENT

Credit means belief or trust. The quality of being credible or trustworthy. Another

words we can define credit as trust in ones integrity in money matters and ones ability

to meet payment when due. The earnings of BAL are chiefly derived from interest

charge and discounts. This department is the revenue generating department. Credit

department basically has three segments.

1) Credit marketing department

2) Credit administration department

3) Trade finance services department

Credit and advance department deals with extending loans (credit facility) to customers.

State Bank of Pakistan (SBP) has prescribed regulations which are called

PRUDENTIAL REGULATIONS. Every bank has to follow these regulations. If any

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bank violates the regulations it should be liable for penalties under the core spirit of SBP

PR(S).

The Bank Alfalah limited credit is extended on the basis of these rules and regulations.

These regulations tells the term and conditions under which you can extend loans to the

borrower and to what extent.

CREDIT FACILITIES

At BAL there are two types of credit facilities

1) Funded facilities

2) Non funded facilities

FUNDED FACILITIES

These are the facilities in which there is direct involvement of cash fund. Following are

the funded facilities.

1) Current finance CF

2) Term finance TF

3) Finance against foreign bills FAFB

4) Finance against packing and credit FAPC

5) Finance against imported merchandise FIM

6) Finance against trust receipt FATR

7) Payment against document PAD

Current Finance CF

The extensively used financing mode at BAL is current finance (CF) current finance is

used to finance both individuals and industries. Individual take current finance for their

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personal use while in industries. It is taken for fulfilling the requirement of working

capital.

Term Finance TF

Term finance is for specified time period. Term finance is given for fixed asset financing.

Finance Against Foreign Bills FAFB

In FAFB facility exporter take loan from bank on the behalf of their foreign export bills.

Like exporter sends shipment but at that time he needs fund for the operation of the

business. He may go to the bank and surrenders all the documents including L/C, Bill of

lading etc. bank checks all the documents to be in accordance with terms and conditions.

If they find no discrepancy, they give money to exporter but take some margin on it.

Finance Against Packing And Credit FAPC

FAPC is taken for the preparation of consignment. It has two forms.

1) Pre shipment

2) Post shipment

1) Pre Shipment

Preshipment loans are export related working capital financing.

2) Post Shipment

Post shipment financing is essentially the receivable financing to the exporters till the

period he is out of cash after the shipment.

Finance Against Imported Merchandise FIM

This facility is allowed against the commodities imported from other countries usually

through letter of credit. Some time importer does not have enough amounts for paying the

imported merchandise therefore. He request to the bank to pay all dues to the exporter

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against the security of imported merchandise. Bank pays the amount and releases the

goods, when the importer pays off its liability partially / fully.

Finance Against Trust Receipt FATR

Finance is extended upon the trust receipt signed by borrower. Importer have to import

the product. There are three conditions.

1) Pay money and get thing

2) Get fine facility

And third is that if that client is trust worthy for bank believing on him based upon his

past record. He releases the goods against the trust receipt. Trust receipt is given to the

bank by the customer. The customer in turn commits that I will pay on such and such

date. Bank pays all taxes and gets merchandise and then gives it to client. Bank do

charges markup against such financing. FATR is for specific period of time. If client do

not pay with in specified time then bank charges higher per day markup.

Payment Against Document PAD

Payment against document is made by the banks as payment against L/C comes due

payment is made for imported documents. For example when exporter sends all the

document to importing bank as document reached, importing bank has to make payment

within 24 hrs if the importer does not pays then bank charges markup per day.

NON FUNDED FACILITIES

The facilities where there is no direct involvement of banks fund. Following are the non

funded facilities.

1) Letter of credit L/C

2) Letter of Guarantee L/G

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Letter Of Credit

Importer bank issues a document on request stating that it will pay the exporter when

exporter fulfill the terms of letter of credit L/C is off two types:

1) Sight L/C

2) Usance L/C

Sight L/C

Requires the importer / importing bank to pay as soon as it receives the clean documents

from exporter.

Usance L/C

It extends time period (typically 60, 90, 120 days) to importing bank for payement. After

specified time period importer have to pay.

Letter of guarantee L/G. Bank gives guarantee in the behalf of person that I will pay in

case of default.

GUIDE LINE OF CREDIT POLICY

Total outstanding financing facilities by banking company to single person shall

not at any point of time exceed 30% of banks unimpaired capital.

No banking company shall make loans or advances against the security of its own

shares.

No banking company shall grant unsecured loans / advances on the guarantee of,

o Any of its directors.

o Family member of director

o Any private company in which banking company is interested.

In arriving at exposure per person weight age of 50% shall be given to

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o Documentary credit opened by bank.

o Guarantees/bonds other than repayment guarantees.

In arriving at per party exposure 90% of

o Deposit of party with bank under lien.

o Face value of FIBs lodged by the party as collateral.

o Pak rupee equivalent of face value of special US Dollar bonds converted

at official rate, lodged by the party as collateral shall be deducted.

Aggregate exposure of bank against all its clean facility shall not at any point

exceed the amount of banks capital and general reserve.

Advances given to the employees of bank in accordance with their entitlement.

While granting any accommodation, bank shall ensure the total accommodation

availed by any borrower from banks / financial institution does not exceed 10

tines of the capital and reserve of the borrower.

A borrower who is prepared to inject fresh equity irrespective of the fact that its

equity is negative is eligible to obtain finance from bank to the extent of 10 times

fresh injected equity.

No banking company allow financing facilities whether fund based / non funded

against the shares of companies which are not in central depository system.

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CREDIT CYCLE

STEP I

Credit cycle start with request letter. When customer gives a request letter to bank that he

want that much amount of credit from bank.

STEP II

When bank receive the request letter from customer. The officer of credit marketing

department make credit line proposal (CCP) of client. It is essential that the proposal

define clearly the purpose of facility, the source of repayment, the agreed repayment.

Schedule, the value of security and customer relationship consideration implicit in credit

division. The security to be accepted as collateral for the facility and all the

documentation relating to the security of facilities must be in the approved form all

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Request

Processing Information & CLP

Decision

Offer

Purification of the Documents

& Security

Disbursement of Loan

Monitoring

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approval procedures and required documentation must be completed all these things all

feed in CLP. CLP is basically a medium to present proposal for seeking approval of

credit line in client. In CLP they feed complete data of the client that include:

Credit limit

Legal status of company.

History of relationship / introduction with bank.

Line of business

Background of proprietor / partner / owner.

Purpose of facility

Security

Along with it they include borrower basic fact sheet.

CCA

Prudential checklist.

STEP III

After the processing of information, credit officer decides weather to give credit to that

person or not. They also check weather its security has any market value or not. Decision

is taken by the branch credit committee (BCC). If the proposal is within the discretionary

powers of committee the proposal may approve after evaluation of credit risk. It CLP is

beyond discretionary power of branch credit committee the CLP is sent to credit division

at head office along with supporting documents and recommendation of branch credit

committee.

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STEP IV

When decision is made now credit officer offer that we will give you loan uptill that limit

not more than that. Up till now all the process is done by credit marketing officer. After

that credit administration officers work start.

Credit Administration department basic function is to fulfill the requirement of

documents as a security for credit. Different types of documents are required for

Pledging, mortgage and hypothecation.

Documents required for C.F. Hypothecation

Legal stamp documents required:

Promissory note-------------------IB~12A

Letter of Hypothecation----------IB~25C

Letter of guarantee------------------IB~29

Letter of continuity

Agreement of finance----------------IF-3

Letters without Stamp:

Letter of arrangement

Letter of disbursement

Letter of authority

SBP regulation undertaking

Documents required for C.F. Pledge

Legal stamps documents required:

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Agreement of finance

Promissory note

Letter of guarantee

Memorandum of deposit of title deed

Letter of hypothecation

Letter of continuity

Letters without Stamp:

Letter of arrangement

Letter of disbursement

Letter of authority

SBP regulation undertaking

Property Documents for mortgage

Legal advice about property documents

Title deeds (original documents of property

Aux Sajra (location site map)

NEC (non-encompress certificate)

PT 1 in favor of borrower

PT 1 in favor of bank

MoTD (Mortgage of title deeds)

Agreement to create mortgage

Letters submit to ETOS & registrar

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Irrevocable general power of attorney (IGPA)

Valuation report

STEP V

Here documents are checked security is properly checked which is checked by the valuer.

Valuer tells the value of security. Here following characteristic of security are checked:

Market value

Consistency

Salable

Storable

Transferable

Transportation

STEP VI

On completion of legal documents and security arrangement and receipt of completion

certificate from recognized legal counsel, the bank according to the approved schedule

prepared by bank after obtaining confirmation of other payments have been funds from

sponsors other source viz, equity fund from sponsors release of fund by other co-

financiers etc. After the valuation of security the loan is disbursed to customer.

STEP VII

Responsibility lies to branch manager to monitor the overall profit and risk aspect of

credit portfolio in accordance with criteria setout in banks credit policy. After the

disbursement credit administration officer monitor the performance of customer whether

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he is fulfilling the requirement or not. He is paying markup or not for which purpose he

has taken the loan whether he is utilizing loan for that purpose or not.

STEP VIII

After specific time period credit officer see what customer want whether he want to

renew / revise or write off it. If he wants to renew it he said to officer to renew it with

same limit.

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BANK ALFALAH LTD.

BALANCE SHEET

AS ON DECEMBER 31st, 2006

(Rupees in '000)

2009 2008 2007 2006 2005

ASSETS

Cash & Balance with Treasury Bank 27859360 24788625 19708518 8423399 4540486

Balance with other banks 12731952 9713369 3183957 626917 232728Lending to Financial Institutions 12456653 27050493 _ 7437733 4634398

Investments

56502210

57425700 35503196 28903596

2447031

4

Advances

14999932

5

11886401

0 88931400 49216120

2831940

1

Other Assets 5633051 3851529 3226959 1553108 1208930

Operating Fixed Assets 10502990 6620067 4280504 2791626 1760774

Deferred Tax Assets -- _ _ _ _

TOTAL ASSETS

27568554

1

24831379

3

15483453

4 98952499

6516703

1

LIABILITIES

Bills Payable 3091135 3733124 2233671 1208671 758961

Borrowing from Financial Institution 8394130 5844389 12723830 13127754 6037576

Deposits & other accounts

23950939

1

22234506

7

12971489

1 76698322

5168498

4

Subordinated loans 3222106 3223355 1899480 649740 650000

Liabilities againt assets to finnace lease -- _ _ _ _

Other liabilities 7305496 5219666 2725344 2186754 1196342

Deffered Tax Liabilities 1921338 484066 275834 323010 1186501

TOTAL LIABILITIES

26344359

6

24084966

7

14957305

0 94194251

6151436

4

NET ASSETS 12241945 746126 5261484 4758248 3652667

REPRESENTED BY

Shared Capital 5000000 3000000 2500000 2000000 1000000

Reserves 2749533 2351218 1008772 790374 365727

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Unappropriated profit 2823072 1386845 860300 963042 25005010572605 6738063 4369072 3753416 1615777

Surplus on Reveluation of Assets 1669340 726063 892412 1004832 2036890

SHAREHOLDERS EQUITY 12241945 746126 5261484 4758248 3652667

INCOME STATEMENT

FOR THE YEAR ENDED DECEMBER 31st, 2006

(Rupees in 000)

2009 2008 2007 2006 200

Mark-up / Return / Interest earned 21191470 1224681

1 5620203 4033380 463049

Less Mark-up / Return / interest expensed 15232886 7204992 2434459 2028577 311231

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Net Mark-up / Interest income 5958584 5041819 3185744 2004803 151818

Provision against loans & advances -697690 -402298 -370208 -87091 -5361

Gain/(loss) on remeasurement of held - 23163 -2185 _ _

Bad debts written off directly -1537 -512 -315 -418 -144-699227 -379647 -372724 -87509 -5506

Net mark-up/ interest income after provision 5259357 4662172 2813020 1917294 146311

Non Markup/ Interest Income

Fee, Commission and Brokerage income 1804998 1158747 675860 399383 31636

Dividend Income 37393 52014 52589 112017 6207

Income from dealing in foreign currencies 386997 290091 218820 106848 9516

Other income 842099 744518 572822 2773503 14180

Total non-markup/ interest income 3224639 2245370 1520049 3391751 61541

Total Mark-up and Non Mark-up Interest Income 8483996 6907542 4333053 5309045 207853

Non Markup/Interest Expenses

Administrative expenses 5874745 4313023 2677635 1799490 118288

Other provisions/ write-offs - 10125 _ 2000 _

Other charges 43306 21104 1700 1875 99

Total non-markup/interest expenses 5918051 4344252 2679385 1803365 1183882565945 2563290 1653734 3505680

Extraordinary/unusual items - _ _ _ _

Profit Before Taxation 2565945 2563290 1653734 3505680 89465

Taxation

For the year - Current 476226 592635 586159 1364723 _

Deferred 427902 267524 -3663 -5164 _

For prior years - Current -100874 -7000 -30000 22887 _

Deferred 8037 9249 _ _803254 861196 561745 1382446 -44897

Profit After Taxation 1762691 1702094 1091989 2123234 44567

Unappropriated profit brought forward 1886845 860300 963042 250050 24970

Transferred from general reserve - _ _ _ 8500

Transferred from surplus revaluation off. assets 26074 24870 23667 14405 5880

Profit available for appropriation 3675610 2587264 2078698 2387689 83918

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SIX YEAR FINANCIAL SUMMARY

(Rupees in '000)

2004 2005 2006 2007 2008 2009

OPERATIONAL RESULTS

Total Income 3700 5246 7425 7140 14492 24416

Operating Expenses 744 1184 1803 2679 43445918

Profit before Income Tax & Provision 510 948 3593 2026 2942 3264

Profit before Income Tax 524 895 3506 1654 2563 2566

Profit after Taxation 311 446 2123 1092 1702 1763

BALANCE SHEET

Shareholder's Equity 1362 1616 3753 4369 6738 10573

Total Assets 40098 65167 98952

15483

5 248314

27568

6

Advances -- net of provision 19131 28319 49216 88931 118864

14999

9

Investments -- net of provision 11397 24470 28904 35503 57426 56502

Deposits & other accounts 30207 51685 76698

12971

5 222345

23950

9

OTHERS

Imports 26658 33879 46807 78472 116210

11993

7

Exports 25261 33057 44273 57317 71847 70844

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SWOT ANALYSISSWOT ANALYSIS

What is a SWOT?

SWOT analysis is a process to identify where we are strong and where we are vulnerable,

where we should defend and where we should attack. It tells us our strengths, our

weaknesses, the opportunities which prevail in the market and the threats which we may

face from our competitors and other from other potential factors.

This analysis can be performed on a product, on a service, a company or even on an

individual.

SWOT Analysis of Bank Alfalah

Here we have applied this very useful technique to identify the strengths, weaknesses,

opportunities and threats of Bank Alfalah.

Strength

Strong Financial Position

As we can see in the financial statements of the bank, the financial position of the

organization is very sound and its profitability is in increasing. The Earning per share has

been increased on a rate of about 50%, which is a very positive sign.

Highly Qualified Employees

The bank has highly qualified and skilled workforce and it has succeeded to attract the

best banking professionals from across the country due to its growing pace and sound

reputation.

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Conducive Environment

The management of the bank is very much concerned with the development of and

improvement of the working environment. The bank has state of the art and purpose built

branches where all the modern technologies are provided to get the effi