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Table of Contents

Executive Summary Preface 05 Acknowledgement Dedication Overview History Achievements Vision and Mission Statements Slogan Board of Directors Corporate Information Executive Committee Branch Network Features Department Hierarchy Branch Level History Products 03

07 09 11 13 15 18 19 20 21 22 23 25 27 28 29

Operation Department Account Opening Department Type of Accounts Cheque book Issuance Cash Department Clearing Department Accounts Department Remittance Department Credit Department Credit Cycle Financial Analysis Balance Sheet Income Statement Ratio Analysis Financial Summary

42 43 46 50 53 55 58 61 68 75 81 83 85 86 94

Internship Report

SWOT Analysis Recommendation Observation And Conclusion Annexture

95 101 103 104

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.

Internship Report

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.

Internship Report

Preface

Internship Report

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.

Internship Report

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.

Internship Report

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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OVERVIEW
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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HISTORY
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. The Alfalah Visa Card has 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 Banking was 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.

CREDIT RATING
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 Lahore Peshawar Rawalpindi Faisalabad Multan Bahawalnagar Bhawalpur Dera Ghazi Khan Gujranwala Gujrat haroonabad Hyderabad Islamabad

18 13 2 2 2

5 1 1 1

1 1 1

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Jehlum Mardan Mianchannu Mengora (Sawat) Queeta Rahim Yar Khan Sahiwal Sargodha Sheikhupura Sialkot Sakhar Wah Cantt. D.I.Khan Gawader

1 1 1 1 1 1 1 1 1 1 1 1 1 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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Bank Alfalah Limited

Operation Department

Credit Marketing Department

CAD

TSD

Consumer financing Department

Car Financing Account Opening Section Online Transaction Section Home Financing

Credit Card Clearing Section IT & Remittances Section

Branch Level Hierarchy

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Branch Manager Mr. Muhammad Ijaz

Operations Manager Mr. Anees-urRehman Akhtar

Incharge Credits (Mr.Sanaullah)

Trade&Service Manager (Mr.Amir) Manager Consumer Finance (Mr.Faisal Rana)

Manager Consumer Finance (Mr.Faisal Rana)

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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 UK Pound Euro 1.00% 2.00% 1.25%

ROYAL PROFIT (PROFIT BEARING CURRENT ACCOUNT)


Projected profit rates (per annum) Amount From Rs. From Rs. From Rs. From Rs. From Rs. 50,000 1000,000 10,000,000 25,000,000 50,000,000 to to to to to 999,999 9,999,999 25,000,000 50,000,000 and above Profit (Yearly) 2.50% 3.5% 4.00% 4.75% Contact Treasury

CLASSIC PLS DEPOSITS


Projected profit rates (per annum) Type of deposits Saving account Profit 2.00%

TERM DEPOSITS
1 Month 3 Month 6 Month 3.50% 4.00% 4.25%

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1 Years 2 Years 3 Years 6.00%

4.75%

6.50%

ATM
Bank Alfalah through its commitment to provide superior and improved services to its valued customers, has unveiled a nationwide network of ATMs. For customer convenience, customers now have access to instantaneous cash availability, 24 hours a day, 7 days a week. ATM network 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, antiscanner 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 Silver Card Women Exclusive 150,000 --- 499,000 25,000---150,000 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. 2. 3. 4. 5. 6. 7. 8. 9. 10. Application form Copy of national Identity card Copy of Driving License (optional) N.T.N. Certificate Copy of current utilities bill of residence Bank account statement for last six months from the date of application Signature verification fro duly verified by t he banker An Assets & liabilities statement (where banks financing exceeds Rs. 5 Lac.) CIB report required (where banks financing exceeds Rs. 5 Lac.) Basic Borrower Fact Sheet

Additional requirements for business class individuals a. b. c. d. Copy of rental/ purchase agreement of business premises. Sole proprietorship letter on relevant business letterhead. Partnership deed (if applicable). NOC from other partners (if applicable)

Additional requirement for self employed professionals a. b. c. Copy of rental/ purchase agreement of business premises Copy of membership of respective institution/ association Must be practicing from last 3 years.

Additional requirements for landlord a. Fard malkiat/ title deed of land

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b.

Undertaking fro competent landlord

OPERATION DEPARTMENT

Operations department of the Bank Alfalah Limited is responsible for the overall operations of the bank. Operation Department has following segments. a) b) c) d) e) Cash Clearing Remittance Account opening Accounts department

The detail of those departments that are controlled under operation department is as under. a) b) c) d) Account opening Cash department Clearing 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. 2. 3. 4. The suitability of the perspective customers Verification of customer credentials. The perspective possibility of profitability of the relationship. 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. 2. No account will be opened on fictitious name. 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. 5. Genuineness of introduction should be properly ensured 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: II) Companies stamp Declaration of proportion companies letterhead. Sign on AOF. NIC copy Verified signature of introducer. Sole proprietorship declaration 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) 2) Private Limited 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) 2) Certificate of commencement of business 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) 2) 3) 4) 5) 6) 7) 8) 9) Stamp of directors NIC copies Certified copy of resolution Memorandum and article of association List of heads on companies letterhead. Bank account opened in their name with BAL. Name of person to be specified for the operation in account. The manner in which the account shall be operated. 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 Cheque Book 25 leaves Cheque Book 50 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. 2. 3. It is not stale/ post-dated or incompletely dated. It is not mutilated. 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) b) Cash receipts 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) 2) Inward clearing 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 Internship Report

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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 of Two 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) 2) 3) 4) Original copy which is given to account holder. DD advice is sent to the central branch. Third copy is for reconciliation. 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. Internship Report

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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 the purchaser. 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. Internship Report

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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 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) 2) 3) Credit marketing department Credit administration department 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) 2) 3) 4) 5) 6) 7) Current finance CF Term finance TF Finance against foreign bills FAFB Finance against packing and credit FAPC Finance against imported merchandise FIM Finance against trust receipt FATR Payment against document PAD

Current Finance CF
The extensively used financing mode at BAL is current finance (CF) current finance is used to finance both individuals and industries. Individual take current finance for their

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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) 2) 1) Pre shipment Post shipment 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) 2) Pay money and get thing 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) 2) Letter of credit L/C 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) 2) 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. Sight L/C Usance L/C

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
Renewal / Revise / Write-off

Request

Monitoring

Processing Information & CLP

Disbursement of Loan

Decision

Offer Purification of the Documents & Security

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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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 cofinanciers 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 ASSETS Cash & Balance with Treasury Bank Balance with other banks Lending to Financial Institutions Investments 14999932 Advances Other Assets Operating Fixed Assets Deferred Tax Assets TOTAL ASSETS LIABILITIES Bills Payable Borrowing from Financial Institution Deposits & other accounts Subordinated loans Liabilities againt assets to finnace lease Other liabilities Deffered Tax Liabilities TOTAL LIABILITIES NET ASSETS REPRESENTED BY Shared Capital Reserves 5 5633051 10502990 -27568554 1 2008 2007 2006 2005

27859360 12731952 12456653 56502210

24788625 9713369 27050493 57425700 11886401 0 3851529 6620067 _ 24831379 3

19708518 3183957 _ 35503196 88931400 3226959 4280504 _ 15483453 4

8423399 626917 7437733 28903596 49216120 1553108 2791626 _ 98952499

4540486 232728 4634398 2447031 4 2831940 1 1208930 1760774 _ 6516703 1

3091135 8394130 23950939 1 3222106 -7305496 1921338 26344359 6 12241945

3733124 5844389 22234506 7 3223355 _ 5219666 484066 24084966 7 746126

2233671 12723830 12971489 1 1899480 _ 2725344 275834 14957305 0 5261484

1208671 13127754 76698322 649740 _ 2186754 323010 94194251 4758248

758961 6037576 5168498 4 650000 _ 1196342 1186501 6151436 4 3652667

5000000 2749533

3000000 2351218

2500000 1008772

2000000 790374

1000000 365727

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Unappropriated profit Surplus on Reveluation of Assets SHAREHOLDERS EQUITY

2823072 10572605 1669340 12241945

1386845 6738063 726063 746126

860300 4369072 892412 5261484

963042 3753416 1004832 4758248

250050 1615777 2036890 3652667

INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31st, 2006 (Rupees in 000)
2009 2008 2007 2006 2005

Mark-up / Return / Interest earned Less Mark-up / Return / interest expensed

21191470 15232886

1224681 1 7204992 5620203 2434459 4033380 2028577 4630494 3112313

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Net Mark-up / Interest income Provision against loans & advances Gain/(loss) on remeasurement of held Bad debts written off directly Net mark-up/ interest income after provision Non Markup/ Interest Income Fee, Commission and Brokerage income Dividend Income Income from dealing in foreign currencies Other income Total non-markup/ interest income Total Mark-up and Non Mark-up Interest Income Non Markup/Interest Expenses Administrative expenses

5958584 -697690 -1537 -699227 5259357

5041819 -402298 23163 -512 -379647 4662172

3185744 -370208 -2185 -315 -372724 2813020

2004803 -87091 _ -418 -87509 1917294

1518181 -53619 _ -1447 -55066 1463115

1804998 37393 386997 842099 3224639 8483996

1158747 52014 290091 744518 2245370 6907542

675860 52589 218820 572822 1520049 4333053

399383 112017 106848 2773503 3391751 5309045

316368 62077 95165 141808 615418 2078533

5874745

4313023

2677635

1799490

1182887

Other provisions/ write-offs Other charges Total non-markup/interest expenses Extraordinary/unusual items Profit Before Taxation Taxation For the year - Current Deferred For prior years - Current Deferred Profit After Taxation Unappropriated profit brought forward Transferred from general reserve Transferred from surplus revaluation off. assets Profit available for appropriation

43306 5918051 2565945 2565945 476226 427902 -100874 803254 1762691 1886845 26074 3675610

10125 21104 4344252 2563290 _ 2563290 592635 267524 -7000 8037 861196 1702094 860300 _ 24870 2587264

_ 1700 2679385 1653734 _ 1653734 586159 -3663 -30000 9249 561745 1091989 963042 _ 23667 2078698

2000 1875 1803365 3505680 _ 3505680 1364723 -5164 22887 _ 1382446 2123234 250050 _ 14405 2387689

_ 993 1183880 _ 894653 _ _ _ _ -448974 445679 249701 85000 58806 839186

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SIX YEAR FINANCIAL SUMMARY


(Rupees in '000) 2004 OPERATIONAL RESULTS Total Income Operating Expenses Profit before Income Tax & Provision Profit before Income Tax Profit after Taxation BALANCE SHEET Shareholder's Equity Total Assets Advances -- net of provision Investments -- net of provision Deposits & other accounts OTHERS Imports Exports 2005 2006 2007 2008 2009

3700 744 510 524 311 1362 40098 19131 11397 30207

5246 1184 948 895 446 1616 65167 28319 24470 51685

7425 1803 3593 3506 2123 3753 98952 49216 28904 76698

7140 2679 2026 1654 1092 4369 15483 5 88931 35503 12971 5

14492 4344 2942 2563 1702 6738 248314 118864 57426 222345

24416 5918 3264 2566 1763 10573 27568 6 14999 9 56502 23950 9 11993

26658 25261

33879 33057

46807 44273

78472 57317

116210 71847

7 70844

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SWOT 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 efficiency of the workforce and the customer satisfaction.
Govt. Support and Encouragement

As the owners of the bank belong to UAE and the type of their investment in Pakistan is a foreign investment, the govt. is fully supporting the bank management due to its policy to maximize the foreign investment in the country, to get the economic prosperity.
Fastest Growing Financial Institution

Due to its successful business policies and the strong financial position the bank has achieved the reputation of fastest growing financial institution in the country. It has greatly increased the customers confidence in the bank
Young and Energetic Workforce

As the bank is a newer one in the country, the bank has an advantage over its competitors because the majority of its workforce is young and not very much over aged. Thus the bank is get maximum out put from its young and energetic workforce by spending comparatively less on their remunerations.
Islamic Banking Division

The bank is one of the pioneers of the commercial banks who have started the Islamic Banking along with their conventional banking. The bank has a separate network of its Islamic Banking Division which has 16 branches across the country and this network is also expanding at a very good pace.

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Weakness

Customers are not properly guided to get the benefit of BAL facility. Online services are charging compare to other competitive banks. Smaller branch network Age of bank is very low. Less banking experience. Some management positions needed are not professional. Customers having accounts with small amounts are not given same services and dealing given to those with high accounts.

Opportunities
Rapidly Growing Economy

At present the Pakistans Economy is growing on a very fast pace. The rapid growth of economy has resulted in the increase in the growth rate of all economic sectors especially in the banking sector which is growing at a fastest speed than ever and in future the growth is expected to increase even a higher rate.
Increased Interest Rates

The SBP has revised the interest policy and the interest rates have been linked with the KIBOR rates. Due to which the banks interest rate has been substantially increased which will greatly increase the banks profitability.
Mega Projects Financing

As the increase in overall business activity in the country, the investors are launching various types of Mega Projects especially in housing and textile the bank has a great opportunity to finance these projects at very profitable term. Internship Report

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Huge Demand for Consumer Financing

The increase in per capita income and overall economy has resulted into a great demand for the consumer financing especially for home finance and car financing and it is said that this trend will increase more in future. The bank can earn a lot by focusing on its consumer financing sections.
Merger with UBL

After the privatization of United Bank Limited, the management of the BAL has purchased the majority shares of the UBL, and it is planning to merge these two banks. As UBL is the second largest bank in the country, this merger can make the bank the largest bank of the country.
Growing Trend of Islamic Banking

There is a very good growth trend in the Islamic banking in the country and in the world as well. BAL has the advantage of having full fledged Islamic Banking network and the growth in this particular field can be very fruitful for the bank.
Spending Practices of Mass

As the Pakistanis are known for their extravagant practices, and to fulfill their funds requirements they dont hesitate from getting loans from banks. Thus there is a very good scope for the bank to run successful business in such circumstances.

Threats
Uncertainty of Economy

Although the economy is growing at a good pace, but there are many factors which results in the uncertain position of the economy. Such as political uncertainty, WTO,

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increase in poverty etc. etc. As a result there are permanent threats of future risks and losses for the bank.
High Rate of Inflation

The inflation rate of the country has gone above the 10%. This can result into an unfavorable situation for the bank. And especially when the ownership of the bank is UAE based, the net spread for they can substantially decrease.
Trend of Mergers

There is a trend of mergers among the banks to become prominent in the market and to get the maximum market share. This trend can result into the union of some leading banks which can give tough time to the bank and it will become difficult for the bank to compete with them.
Privatization of Banks

Due to its privatization policy, the govt. is privatizing the state owned banks. The change in management may result in the increase in the efficiency and productivity of the banks. Thus it can become a threat for the bank.
Risk of Defaults

As discussed earlier that there is a trend of launching mega projects in the country. And every one is involved in this trend without taking any measure for the successfulness of these projects. This can result into the failure of this project which can make it difficult for the banks to recover their funds from these defaulters.

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RECOMMENDATIONS

Based on Financial Statement Analysis


By analyzing the financial statements of the organization, we found that the decreasing rate of profit is mainly because of the unbalance between the nonmarkup income earned and the non-markup expenses. In the current year nonmarkup income has been decreased by 55%, but on the other hand the nonmarkup expenses have been increased by 48%. This is very alarming situation. We recommend to creating balance between these two items either by increasing the non-markup profit or by decreasing the non-markup expenses in order to increase the profit. The administrating expenses have been increased by 49%. On the other hand the net profit after taxation has been decreased by the same rate. It shows the poor level of management. The administrating expenses should be justified in accordance with the earnings of the organization. The management has revalued its fixed assets in order to fill the gap of profit short fall. The management should focus on its business operations and such nonoperating tactics should be avoided. The earning per share (EPS) has been declined by almost 50% which can result into the shattering the confidence of share holders. The concrete steps should be taken in order to increase the EPS of the organization.

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Based on SWOT Analysis


The experience employees should be hired from the other financial institutions and necessary measure should be taken to attract the professionals and experts of banking. The no. of employees should be increased and the allocation of work activities should be made in such a way that the work load over the employees decrease. There should be a serious effort for the increase in the motivation level of employees. They should be given financial and non-financial incentives and the salary increments should be made purely on merit basis. The bank should take serious steps in order to avoid the political and economical risk prevailing in the country and serious hedging effort should be made. All the requirements should be met and all the policies should be considered before issuing any kind of credit facility especially in cash of funded facilities. Each and every step should be taken to avoid the defaults and to assure the recovery of the original debt and the interest amount.

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OBSERVATION & CONCLUSION


I observed the bank Alfalah a financially sound bank. Its profits are increasingly year by year. Its staff is very good and sincere with the bank. Bank Alfalah under the leadership of Sheik Nahayan Mabarak Al-Nahayan has made significant progress in building and strengthening both the corporate and retail banking sectors in Pakistan. The bank attained a good position in terms of its balance sheet size amongst the private banks. Bank Alfalah views specialization and service excellence as the cornerstone of its strategy. The people at bank realize that innovation, creativity, reliability, customized, services and their execution are they key ingredients for their future growth. Revenues from these activities have started yielding dividends and they expect significant growth. They are aware that they have stepped into the 21st century and they must meet its challenges by acquiring the highest level of the technology. They will thus be accelerating their technological advance to enable them to distribute their products and services through most efficient and high tech means. They say that they will continue to invest in the modern tools and substantial allocation to resources will be made to achieve this objective during the current year. Phone Banking and credit card have been introduced in many cities.

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