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Bank Alfalah Ltd.

EXECUTIVE SUMMARY
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 Mabarak Al-Nayayan, the bank
has already made significant contributions in building and strengthening
both corporate and retail banking sector in Pakistan.

Designing the product portfolio of bank in response to the customer’s


preferences, the product like Royal Profit, Royal Patriot and Royal Custodial
are prime examples of quality and innovation providing timely banking
opportunities to the customers of bank.

Assessment of the needs and wants of the customers is an ongoing


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 near future.

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Bank Alfalah Ltd.

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. The bank is serving the people at high level
of standard by going according to the whishes of the customers.

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Bank Alfalah Ltd.

COMMERCIAL BANKING
SCENARIO IN PAKISTAN

At the time of independence in 1947, there were 38 scheduled banks


with 195 offices in “Pakistan” but by December 31, 1973, there were 14
scheduled Pakistani commercial banks with 3,233 offices all over Pakistan
& 74 offices in foreign countries.

Nationalization of Banks was not done 1st January 1974 under the
Nationalization act 1974, due to certain objectives. But it had negative
effects on efficiency of the banking sector afterwards a privatization
Commission was set up on January 22, 1991, the commission transferred
many banks to the private sector i.e., MCB & ABL. The government
approved & permitted the establishment of 10 new private banks in
1991;hence many new private banks have incorporated, since then, BANK
ALFALAH in one of the namely established private scheduled banks in
Pakistan.

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Bank Alfalah Ltd.

INTRODUCTION TO BANK
ALFALAH

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 is 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. Therefor, the
bank was closed due to international pressure. Then, its 3 Pakistani branches
were taken over by the Government of Pakistan, which were named as
Habib Credit and Exchange Bank (HCEB) and these were working as
subsidiary of Habib Bank Limited.

Following the privatization in July 1997, Habib credit and Exchange


Band assumed the new identity of Bank Alfalah on February 25, 1998. It is
now Abu Dhabi based bank as the family of Sheikh Nahayan Mubarik Al-
Nahayan purchased 70% of its shares and 30% shares remained with Habib
Bank on behalf of Government of Pakistan.

It has its 18 branches in 8 cities of Pakistan. The Multan branch has


recently been opened in May 1999. It is not listed on any stock exchange of
Pakistan.

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Bank Alfalah Ltd.

Charged with the strength of Abu Dhabi consortium, and under the
leadership of His Highness Sheikh Nahayan Mabarak Al-Nahayan, Minister
of Higher Education and Scientific Research, Government of Abu Dhabi,
and a prominent member of Royal Family, the bank is energized with the
vision, envisaging the development of various sectors in Pakistan.

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Bank Alfalah Ltd.

MISSION/OBJECTIVES

• Edge on competitors.
• High profits.
• Expansion of strong structure.
• Variety of Products.
• A good banking standard.

BANK ALFALAH’S SLOGAN


Let’s Look Ahead Towards a Brighter Future. Together.

BANK BELIEVES

• Every door leads to our customers.


• The legacy of leadership stands as our guiding light.
• The strength of chain relies on the strength of each link.
• A keen ear is a key to understanding. Achievement is nothing
without target.
• Time is our most valuable asset.
• Performance is nothing without the ability to measure it.
• Every drop counts.

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Bank Alfalah Ltd.

BRANCHES NETWORK

Bank Alfalah has its 18 branches in 8 cities of Pakistan. Detail is as under:

KARACHI
• Main branch, B.A. Building, I.I. Chundrigar Road.
• Cloth Market Branch.
• Clifton Branch.
• Shahrah-e-Faisal Branch.
• Karachi (new Branch).

LAHORE
• Kashmir Road Branch.
• Gulberg Branch.
• Defense Branch

RAWALPINDI
• Mall Road Branch.

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Bank Alfalah Ltd.

OTHER BRANCHES
Other Branches are in:
• Sialkot.
• Islamabad.
• Peshawar.
• Multan.
• Faisalabad.
• Quetta.
• Sukkur.
• Hyderabad.
• Gujranwala.

Now, Bank Alfalah is going to establish its branches in some foreign


countries. Hopefully, in Dhaka (Bangladesh) and Bahrain, its branches will
be opened in the year 2001. Some branches will also be opened in European
countries.

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Bank Alfalah Ltd.

THE BOARD

The list of Board of Directors of Bank Alfalah Limited is as under:

• H.H. Sheikh Nahayan Mabarak Al-Nahayan.


• Mr. Abdulla Naseer Hawalled Al-Mansoori.
• Mr. Abdulla Khalil Al-Mutawa.
• Mr. Omar Z. Al-Askari.
• Mr. Naeem Iqbal Sheikh.
• Mr. Ikram-ul-Majeed Sehgal.
• Mr. Muhammad Saleem Akhtar.

B o a r d o f D i r e c t o r s

C h a i r m a n

S e c r e t a r y o f t h e
B o a r d

D i r e c t oD r i r e c t oD r i r e c t oC r E OD B i r e c t oD r i r e c t o r
( m e m ( Gb e o r v ) t . ( NG o o mv t .i n N a ot e m

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Bank Alfalah Ltd.

THE CORE GROUP

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


• Board Advisory Committee.
• Executive Committee.

BOARD ADVISORY COMMITTEE


• Mr. Omar Z. Al-Askari.
• Mr. Abdulla K. Al Mutawa.
• Mr. Ganpat Singhvi.
• Mr. Bashir A. Tahir.

EXECUTIVE COMMITTEE
• Mr. Mohammad Saleem Akhtar.
• Mr. Ikram-ul-Majeed Sehgal.
• Mr. Parvez A. Shahid.
• Mr. Tanveer A. Khan.
• Mr. Mohammad Yousaf.
• Mr. M. Waqas Mohsin.

AUDITORS
• A.F. Ferguson & Co.

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Bank Alfalah Ltd.

Chartered Accountants.
ORGANIZATIONAL CHARTS
C O U N T R Y W I D E H I E R A R C H Y

P r e s i d e n t

C h i e f O p e r a t i n g
o f f i c e r

H e a d o f C oC u o n u t nr y t r y R iE s kx e c u t i v e E x e c u t i v e C h a r a c t e r
O p e r a t i o n sM a n a g e Vr i c e P r e s Vi d i ec en t P r e s i dA e c nc to u n t a n t

I n f o r m a t i o Cn o r p o r a t e B r a n c h B r a n c h
D e p a r t m e n Ht e a d s M a n a g e r s M a n a g e r s

o r g a n o g r a m o f A l f a l a h L t d .
A b d a l i R o a d , M u l t a n .

E x e c u t i v e V i c e P r e s i d e n t
A s i f A . S h e i k h .

A . E . V . P .
M r . Y a s i r G a r d e z i

O p e r a t i o n s FM o a r ne ai g g n e rE x Cc h r ea dn i g t s e & A d vA a c n c c o e u s t n t s
M r . A l i G a M r d r . e Mz i o h a m m a Md r S . y a a l es ie r m M r . M a s o o d A h m a

R e m a i n t t a n c e s
M r . H a s s a n

C l e a r i n g
M r . A n e e s

C a s h
M r . A q e e l , M r . J a w a d

A / C O p e n i n g
M r . S h o a l b R i z w a n

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Bank Alfalah Ltd.

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

GOOD WORK ENVIRONMENT

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


the bank has good work environment. All the people work with cooperation;
managers are so kind that each problem can be discussed with them.

EFFICIENCY

Employees at Bank Al-Falah are quite efficient. As Multan branch is a


new one, its employees have to bring their bank among the list of good
banks. Therefore, they work more than their working hours and it is all
according to their will. It also shows their loyalty, commitment to
organization.

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Bank Alfalah Ltd.

CUSTOMER SERVICES

All the customers are entertained individually. Same kind of behavior


and attention is given to all the customers.

SUGGESTIONS ASKED FROM CUSTOMERS

Getting ideas for improvement from customer side is a new idea and
that is working very well in Bank Alfalah Ltd. All the customers are asked
to fill a suggestion form and the standards of the bank are improved through
them.

EMPLOYEE BENEFITS

Employees are given the benefits like bonus, gratuity funds, loans,
increments, house rent, medical and conveyance.

Computerized Working Environment


In bank, all the work is done on computers. All the entries are made in
computer. Balance are fed into the computer. This increases efficiency of the
bank.

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Bank Alfalah Ltd.

SHARE CAPITAL

The authorized capital of Bank Alfalah is of Rs. 1000 Million


(100,000, 000) Paid-up capital is of Rs 600 Million (600,000,000) ordinary
shares of Rs.10 each issued for cash.

PRODUCTS

Prioritizing its product portfolio in line with its corporate and


consumer needs and wants the bank is committed to develop products that
give more value to its customers in both the sectors.
Following their trend of bringing value added products and services to
their customers the bank has present Royal Group, Royal Profit and Royal
Patriot.

ROYAL GROUP
Royal Group is a joint investment plan that allows individuals to invest
money collectively and earn higher rate of profit.

Deposit Amount Rate


100,000-999,999 9.50 %
1,000,000-9,999,999 9.70 %
10,000,000 and above 10.00 %

ROYAL PROFIT

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Bank Alfalah Ltd.

It is the profit obtained by individuals on their deposited amount.

Deposit Amount Rate


50,000 to 999,999 9.00 %
1,000,000 to 9,999,999 9.50 %
10,000,000 & Above 10.50 %

ROYAL PATRIOT
It is similar to term deposit. In term deposit one get no benefit of profit when
he withdraws his money before maturity date. But in case of Royal Patriot if
one withdraw his money before the maturity date, he can get the benefit of
profit. The profit rates for different periods are following:

Duration 1Month 3Months 6Months 12Months 2Years


Amount Rate Rate Rate Rate Rate
25,000-999,999 8.00 % 10.00 % 10.50 % 11.00 % 11.00 %
1,000,000-4,999,999 8.10 % 10.10 % 10.60 % 11.10 % 11.25 %
5,000,000 & Above 8.20 % 10.25 % 10.70 % 11.20 % 11.50 %

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Bank Alfalah Ltd.

FINANCE POLICY

Bank Alfalah finance on short term basis only against current assets to
its customers in both corporate and consumer sectors. They don’t invest too
much in fixed assets. Maximum credit for short term is Rs. 50 Millions for
one party, they don’t go beyond five years financing.

FINANCING SCHEMES

The bank has introduced many financing Schemes such as Term


Finance & Royal Personal Finance. The bank has recently introduced a Car
Finance Scheme.
Royal Personal Finance
This is the facility for individuals to finance their domestic requirements
such as purchase of household equipments, computers, funding of education,
marriage, planning a holiday, payments of credit card bills, other liabilities
or any other personal requirement.

• Facility Range Minimum Rs. 50,000 Maximum Rs. 500,000


• Tenure From 1 to 3 years.

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Bank Alfalah Ltd.

Maximum Loan Entitlement (Approximately)

Tenure 1 year 2 years 3 years


Factors 0.09168 0.04993 0.03615

ALFALAH CAR

It’s a scheme that enables one to own his desired car at easily
affordable and flexible installments with a minimum down payment and
insurance.

SALIENT FEATURES

• Lowest Financing cost available in the market


• Tenure of 1 to 5 years as per individual requirement
• Quickest processing
• Minimum processing charges: Rs. 3000 payable once
• Down Payment requirement of 25%
• Repayment through monthly installments
• Lowest Insurance rates available from bank’s approved insurance
companies

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Bank Alfalah Ltd.

MONTHLY INSTALLMENTS

Monthly Installments for Alfalah Car can be calculated by multiplying


Bank’s financing amount with the following factors:

Periods Factors
For 12 months 0.09072
For 24 months 0.04962
For 36 months 0.03609
For 48 months 0.02944
For 60 months 0.02553

ELIGIBILITY CRITERIA

All Businessmen, Corporate Employees, and other salaried or self-


employed professionals having net take home income in excess of three
times the monthly installment.

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Bank Alfalah Ltd.

ACCOUNT OPENING
DEPARTMENT

Borrowing funds from different sources has become an essential


feature of today’s business enterprises. But in the case of bank borrowing
funds from outside parties is more vital because the borrowed capital of a
bank is much greater their own capital. Banks borrowing is mostly in the
form of deposits. These deposits are lent out to different parties such deposit
creation is done through open an account in the bank.

The Bank does not make payment of a 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.

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Bank Alfalah Ltd.

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. 1000.

SAVING ACCOUNT

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


individuals in the neighborhood. The profit on saving accounts is paid on the
basis of profit and loss sharing at 9 % six monthly. The minimum balance
requirement for opening the account is Rs.5000.

NOTICE DEPOSITS

Notice Deposits are kind of fixed deposits. The minimum balance


requirement for opening the account is Rs. 5000 and payment is drawn on
maturity of the specific period.

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Bank Alfalah Ltd.

NOTICE DEPOSIT 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 6.10%.

♦ 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 7.50 %.

TERM DEPOSIT

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


the end of specific period the customer is allowed to with draw the principal
amount. The rate of return of this account varies from 8 % to 13 %. The term
deposit account varies from one month to 5 years and the minimum balance
requirement is Rs. 5000.

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Bank Alfalah Ltd.

PROFIT CALCULATION METHODS


DAILY PRODUCT BASIS
Deposited Amount × Rate of return.
365 (No. of days in a year)
AVERAGE MONTH BALANCE.

Sum of daily end Balance


× Rate of return
No. of days in month

MINIMUM MONTH BALANCE

Any minimum balance during the month is taken for calculating profit
SAVING A/C (05 DAYS _ MINIMUM MONTHLY
BALANCE).

Minimum Balance of first 5 days is compared to the minimum balance of


the minimum balance of remaining 25 days. Less balance is calculated
for profit.

The amount of profit is given to deposits in three ways:

⇒ Cash payment ( only in case of term Deposits ). Or as per


customer requirement.

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Bank Alfalah Ltd.

⇒ By sending bank draft to depositors home address or officers or


whichever is specified as mailing address.

⇒ The depositor’s account is credited at maturity.

Amount of Deposits & Other Accounts in 1999.

Fixed Deposits Rs. 4,038,133,000.


Saving Deposits Rs. 8,734,265,000.
Current Accounts Rs. 1,499,657,000.
Margin, Call & Sundry Deposits Rs. 158,708,000.
Deposits of Federal Government Rs. 1,389,710,000.
Particulars of Deposits & Other Accounts

In Local Currency Rs. 8,829,008,000.


In Foreign Currencies Rs. 6,991,465,000.

Total Deposits Rs. 15,820,473,000.

ACCOUNT OPENING PROCEDURE

For the chequing account, there are different types of account holders are
required for all these types of account holders. The operation/procedure
requirement that is needed for “Individual Account” differs greatly from

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Bank Alfalah Ltd.

the “Joint Accounts” proprietorship A/C, Partnership A/C, Private


Limited company A/C and Public Limited Company A/C.

INDIVIDUAL’S ACCOUNT

When a single man or woman opens an account in his or her own


name and has the right to operate, it is called individual A/C.

DOCUMENTATION

• Copy of National Identity Card.


• Proper Identification ( Introduction ).

OPERATION

• The person place in the type of account and type of operation


required in the account opening form.

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

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Bank Alfalah Ltd.

• The person fills his or her father, mother, husband/wife or any


other relative’s name, his/her address, phone number, his or her sign
to certify this requirement. This requirement is needed because in
his/her absence bank can have correspondence with a specific person.

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

• If the person put his signature in Urdu or any other language


other than English, he signed a “Vernacular Form”.

• The next day is opening of account

JOINT ACCOUNT

When two or more persons neither partners nor, trustees, open an


account in their name is joint account.

DOCUMENTATION

• copy of N.I.C card.

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Bank Alfalah Ltd.

• Identification ( Introduction ).

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

• The person fills the Part-1 and Part-II

• Signature of box or all persons are obtained on the formed in


the area specified for signature.

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

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

PROPRIETORSHIP ACCOUNT

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

DOCUMENTATION

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Bank Alfalah Ltd.

• Copy of N.I.C.
• Status of the firm.
• Copy of Sole Proprietorship Declaration.

OPERATION

All operation remains the same, except that the firm name is written in
“title of account” area and Signature of the proprietor in the specified
area.

PARTNERSHIP ACCOUNT

The account is opened in the firm name and all partners designate one or
two persons to act behalf of the partnership firm all acts of the firm
jointly and serverly.

DOCUMENTATION
• Copy of N.I.C of all partners.
• Status of the firm ( In case of registered firm ).
• The attested copy of Partnership Deed (in case of registered
firm ).
• Operation of the A/C (as per deed).

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Bank Alfalah Ltd.

• Third party Mandate.


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

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Bank Alfalah Ltd.

OPERATION

All other requirements are same except that all partners dully sign the
form, cards are signed by all of those partners who will act on behalf of
the firm.

PRIVATE LIMITED COMPANY ACCOUNT

DOCUMENTATION

• N.I.C of all partners.


• Articles and Memorandum of association.
• List of directors.
• Resolution of Board of directors.
• Certificate of Incorporation Form 29 (B) (Lasted Copy).

Company secretary will certify all these copies.

OPERATION

• The person authorized in the resolution of the board of directors


put their signature on the S.S Card.

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Bank Alfalah Ltd.

• Next of Kin requirement is not need in a case of Private


Limited Company. Other procedure is same.

• After completing each and every formalities are signed by all


partners who will act on behalf of the firm.

PUBIC LIMITED COMPANY ACCOUNT

DOCUMENTATION
• Copy of N.I.C of all partners.
• Articles and Memorandum of association.
• List of directors.
• Resolution of Board of Directors.
• Certificate of commencement of Business.

OPERATION
Operation is same as Private Limited Company
.

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Bank Alfalah Ltd.

RESPONSIBILITIES OF ACCOUNT
OPENING DEPARTMENT

• Documentation Intact.
• Proper Introduction.
• ChequeBook Issuing.
• Receiving Inward cheques.
• Account Closing.
• Every Day Posting.

ACCOUNT CLOSING
When a customer wants to close his account because of any reason, he
has to give a hand written application to the head of the Operations
Department to close his account, plus remaining leaves of the chequebook.
The Operations Manager first verifies the signatures of account holder, then
closing is done from the registers on the computer where the account was
opened. In the file of account holder, his account opening form is also
crossed.

For this closing, a fee of Rs. 150 is charged in Bank Alfalah.

CHEQUE BOOK ISSUANCE


When the account is opened, then, the customer is given a cheque
book to sign upon and en cash money. It is proceeded as under.

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Bank Alfalah Ltd.

PROCEDURE
All the account opening formalities must be completed before, issuance
of cheque book. Particulars of the chequebook requisition should be
completed containing title of account, account number, type of currency,
number of leaves and signature of the customer. Signature of, the customer
are 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 chequebook issuance register.

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


of the chequebook is in order. Particulars are entered in the cheque book
issuance register. Account number is stamped on every leaf of the cheque
book and those leaves are counted. Name of the account holder is written on
the cover of the cheque book 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 is taken on


the cheque book issuance register, cheque serial number is entered in the
system (Bank Excel).

Stock of Cheque books are balanced at the end of each day and kept
under safe custody.

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Bank Alfalah Ltd.

Earlier in the banks were charging a fee for issuance of cheque book,
but now whenever a new account is opened, the account holder is issued a
cheque book free of charge.

Bank Alfalah issues the following chequebooks.


♦ Saving account - 25 leaves
♦ Current account - 50 leaves
♦ Current account - 25 leaves
♦ Foreign currency $ - 10 leaves
♦ Foreign currency £ - 10 leaves
Loose cheques are also issued in some cases.

RECEIVING INWARD CHEQUES

Another responsibility &function of Account Opening Department is


to receive Inward cheques for collection of other banks. These cheques
are sent to clearing official who clears these cheques at SBP from other
banks.

EVERY DAY POSTING

At the end of each day, Posting of cheque books is performed. The


account opening department makes credit vouchers of excise duty and
provincial tax on chequebook leaves, and posts it in the company.

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Bank Alfalah Ltd.

CASH DEPARTMENT

Mr. Aqeel and Mr. Jawad helped us in learning about Cash


Department. Cash Department performs two main functions:
♦ Cash Deposits
♦ Cash Payments

CASH DEPOSITS
Cash receiving officer receives cash along with pay-in slip from the
customer. He checks if the deposit slip is properly filled up containing title
of account, account number, date and amount in word and figures. He also
verifies signature. Detail on both counter file and cash receipt voucher
should be the same. Cash is received by the cash receiving officer, twice
counted and matched with the deposit slip. The cash details are written on
the back of the deposit slip and are also entered in cash receiving register.
Cash received stamp is affixed on the face of the deposit slip along with the
signature of the cash receiving officer.

Deposit slip and cash receiving register is given to the officer in cash
department. Again proper scrutiny is made by the officer cash department
both on cash receipt and cash receiving register. Officer cash department
signs both the deposit slip and register; Deposit slip is credited and posted in
the concerned account in the system.

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Bank Alfalah Ltd.

Counter folio is given to the depositor as receipt. One consolidated


cash debit voucher is posted in the system to balance the cash.

PAYMENT OF CHEQUES
The process for payment of cheques for local and foreign currency is
same. First the customer presents the cheque or holder to branch and the
particulars of cheque are properly filled in. Signature of the holder is taken
on the back of the cheque. Cheque handed over to the officer cash
department for scrutiny where officer checks the date, amount in words and
amount in figures, payee's name crossing if any, account number, cheque
serial number, any material alterations, endorsements and signature of the
customer. Account is debited and then the officer cancels cheque. It is
posted in the system and posting stamp and number is affixed on it. Cheque
is handed over to the cash payment officer for payment. One more signature
on the back of the cheque is taken from the holder to match with the first
one, and then cash is paid to the payee. Cash detail is written on the back of
the cheque. Cash paid stamp is affixed on the face of the cheque. Entry is
passed in the cash payment register.

If the payment is of Rs. 50000 the cashier can make it on its own. If
the amount is greater than Rs. 50000 to Rs. 100,000 the cashier and cash
deposit Incharge will verify the check and will sing it. Then the payment
will be made. But, if the amount is greater than Rs. 100000 to Rs. 1000,000
the manager operation will also verify the check and sign it so that the

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Bank Alfalah Ltd.

payment can be made. If the amount is greater than Rs. 1000,000 the Branch
Manager

Will also verify the check and sign it. Otherwise the payment will not
be made.

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Bank Alfalah Ltd.

CLEARING DEPARTMENT
In clearing, Mr. Anees remained so helpful. The clearing process
majority involves receiving the cheques and making payments. This process
can be inward or outward.

CLEARING PROCESS (INWARD/OUTWARD)


Here t he local cheques are received that are drawn on BAF. All the
cheques are received on one counter alongwith the paying slips duly filled in
properly containing particulars of cheques and account harder. Counter folio
of paying slip is handed over to the customer by putting stamp for #cheque
received for collection for Bank Alfalah' on it duly signed by officer. . These
cheques are scrutinized and cheques for local clearing are separated from
OBC. These are then entered in clearing register and cheques for collection,
are entered in OBC register and handed over the Bills Department for
collection.

Clearing officer checks and verifies title of all the cheques deposited
by the customers to confirm the good title of the cheques. Cheques are
scrutinized properly and paying slips are separated from cheques. Special
crossing, endorsement and clearing stamps are affixed on the cheques.
Cheques of each bank are sorted and arranged branch wise. All the cheques
are then entered into the clearing system of the bank. Print out of the
clearing is taken and details are attached with the cheques of each bank.
Details of these banks are then entered into the clearing schedule containing
number of cheques presented and their total amount against the name of

Business Institutions 37
Bank Alfalah Ltd.

each bank. Then total number of cheques presented to all banks and their
total amount is written on the foot of that schedule, which is tallied with the
clearing register.

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


clearing house of State Bank of Pakistan between 9:00 to 9:30AM. In the
same manner, other banks present their clearing drawn on Bank Alfalah.
Total number of cheques and their amount delivered to other banks and
received from them are written on the Clearing House schedule branch for
their payment. After proper scrutiny of cheques, verification of signatures
and confirmation of balance in the account, the Officer Cash Department
pays these cheques by canceling and posting them in the system.

If any cheque is not passed due to insufficient balance or any other


reason, Officer 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 2:30PM to check the fate of the cheques


presented to other banks in the morning. If any cheque is to return, that is
delivered to the same bank in second clearing. In the same manner, if any
cheque presented by Bank Alfalah in first clearing is returned, they receive it
and once again give schedule of clearing figure to the Officer Clearing
House SBP containing number of cheques and their amount delivered and
received unpaid.

Business Institutions 38
Bank Alfalah Ltd.

REMITTANCES DEPARTMENT

The need of remittances is commonly felt in today’s business. The


main function of remittance department in a bank is the transfer of funds.

Mr. Hassan in Bank Alfalah is the officer for Remittances Department.


In remittances, following banking instruments are used:
• Pay order
• Demand draft
• Telegraphic transfer

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

PAY ORDER
A pay order is a written order issued by a bank, drawn upon &
payable by itself, to pay a specified sum of money to or to the order of a
specified person.

PROCEDURE FOR PAY ORDER


Application form is given to the customer to fill. Two signatures are
taken on the form one for request and other for receiving the instrument. All
the particulars of application form are checked and bank commission
charges and withholding tax is written on the top of the application form. If
the customer is maintaining his account with the branch, he can give cheque

Business Institutions 39
Bank Alfalah Ltd.

for total amount of instrument plus bank charges. Cheque and application
from is then given to the officer Cash Department for the payment of
cheque. After proper scrutiny, Officer Cash Department posts the cheque
and signs the application form in token of payment received. If the customer
wants to pay cash, then cash is deposited by the customer along with the
bank charges and withholding tax.

Application form is then given to the Remittances Incharge for


issuance of instrument. He enters all the particulars of the application form
in the system and computer gives an Auto Control Number to the
instrument. Printout is taken on the block of payment Order. Two
authorized officers of the branch then sign it. Instrument is then
protectographed, and given to the customer.
When instrument is presented for payment, it is posted in the system and
canceled by the Remittances Incharge after proper scrutiny.

DEMAND DRAFT
A Demand Draft (DD) is an instrument, which is drawn by one bank
upon another bank for a specific sum of money payable on demand. It is
made by the bank, given to the purchaser against cash or cheque.

Parties Involved in DD:


♦ Purchaser
♦ Issuing Branch
♦ Drawee Branch
♦ Payee

Business Institutions 40
Bank Alfalah Ltd.

PROCEDURE FOR ISSUING DD


Issuance procedure of Demand Draft is same as of pay Order.

PROCEDURE FOR DEMAND DRAFT PAYABLE


When DD advice is received, signatures of both signatory on the DD
are verified. All the particulars of the DD payable are entered in the system.
Prints out of vouchers (DD payable) are taken. When instrument is
presented for payment, signatures of the attorneys are verified on DD and
after proper scrutiny, it is posted in the system and canceled by the
Remittances Incharge.

TELEGRAPHIC TRANSFER
Sometimes, when the remittance is urgently required by the remitter,
Telegraphic Transfer (TT) is issued . TT may be issued to general public on
their written request and against the value received.

PROCEDURE FOR ISSUING TELEGRAPHIC TRANSFER


Application form is given to the customer to fill. Two signatures are
taken on the form one for request and other for receiving the instrument. All
the particulars of application form are checked and bank commission
charges and withholding tax is calculated and written on the top of the
application form (if customer is tax payer, he can give tax exemption
certificate). If the customer is maintaining his account with the branch, he
can give cheque and application form is then given to the officer for the
payment of cheque. After proper scrutiny, Officer Cash Department posts

Business Institutions 41
Bank Alfalah Ltd.

the cheque. After proper scrutiny, Officer Cash Department posts the
cheque and signs the application form, to assure that payment is received. If
the customer wants to pay cash, it is deposited by the customer on cash
counter. Cash Receiving Officer receives cash n the application form along
with the bank charges and withholding tax. Application form is then given
to the Remittances Incharge for issuance of the instrument. He enters all the
particulars of the application form in the system (BPG) and computer gives
an Auto Control Number to the T. T.

Telegraphic Transfer message is written in the telex containing name


of transferring branch, name of receiving branch, date, amount, currency,
payee’s name and account number or identification if any, payer name and
payment advice. A test number is given to the T. T. message for receiving
branch. This message is then sent through telex to the receiving branch
followed by a T.T. advice. The customer is confirmed that T.T. has been
sent.

PROCEDURE FOR T. T. PAYABLE


When T.T. message is received, tested number on the T.T. is checked
and verified. Tested number is then written in the register and signed by the
holder of test keys for officer record. All the particulars of the T.T. payable
are entered in the system. Payment instruction on the T.T. message are
followed if it is pay and advice it will be paid through TTR on the cash
counter or through clearing and if it is credit and advice, it will be
transferred in the account mentioned in the T.T. message. Printouts of
vouchers (T.T. payable) are taken. If TTR is presented for payment,

Business Institutions 42
Bank Alfalah Ltd.

signatures of the authorized officers are verified on TTR and after proper
scrutiny, it is posted in the BPG and canceled by the remittances Incharge.
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 Office Cash
Department for the payment of 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 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 from FDD Register. Instrument is completed by putting all the
particulars in it and signed by two attorney holders. Instrument is then
handed over to the customer. 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 the
Head Office for the reimbursement. Copies of the FDD and ETCA are kept
in the record of the bank.

Business Institutions 43
Bank Alfalah Ltd.

PROCEDURE FOR FOREIGN TELEGRAPHIC TRANSFER


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
commissin is charged, which is US$ 15/- (flat rate) for each amount of FTT.
If cheque is received from the customer, it is taken for total amount of FTT
plus bank commission. Cheque and application form is then given to the
Officer Cash Department for the payment of cheque. After proper scrutiny,
Officer Cash Department posts the cheque and signs the application form to
assure that payment is received.

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 instrument. He enters all the
particulars of the application form in the FTT Register and a Control
Number is allotted to the FTT. TT message is written in the telex containing
name of transferring branch, name of receiving branch, date, amount,
currency, payee’s name and account number or identification if any, payer
name and payment instructions. A test number is given to the FTT message
for receiving branch. This message is then sent through telex to the
receiving branch. Customer is confirmed that FTT has been made.
Exchange Transaction Credit Advice (ETCA) is sent to the Head Officer for
the reimbursement. Copies of the FTT and ETCA are kept in the record of
the bank.

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Bank Alfalah Ltd.

COLLECTION
All the cheques under collection are called cheques under Collection in
Bank Alfalah Limited. There are two types of bills for collection:
• Outward Bills for Collection
• Inward Bills for collection

OUTWARDS BILLS FOR COLLECTION


Al the cheques are received on one counter along with the paying slips
duly filled in properly containing particulars of cheques and account holder.
Counter folio of paying slip is handed over to the customer by putting stamp
for “cheque received for collection for Bank Alfalah” on it duly signed by
officer. These cheques are scrutinized and cheques for local clearing are
separated from OBCs. Cheques for local clearing are entered in Clearing
Register, whereas cheques for collection are entered in OBC register and
handed over to the Bills Department for collection. OBC number is allotted
to the cheque from OBC register. Special crossing and bank endorsement
stamps are affixed on the cheque.

OBC schedule is attached with the cheque and dispatched to the main
branch of that city for collection. If they do not have any branch in that city,
then cheque will be sent to the Collecting Agent of Bank Alfalah for that
city, and if they do not have any collecting agent even, then cheque can be
sent directly to the drawing branch. Instructions are given on the OBC
schedule for the payment of that cheque. Contra-liability vouchers are also
posted in the system. When OBC is realized, collection bank pays the
amount through IBCA if it is the same bank or through DD if it is another

Business Institutions 45
Bank Alfalah Ltd.

bank. If DD is received against OBC, it is presented in the clearing for


collection. If IBCA is received from the branch for the payment of OBC,
certain vouchers are posted in the system.

INWARD BILLS FOR COLLECTION


If any other bank sends a cheque of Bank Alfalah Limited, it is Inward
Bill for Collection. Bank Alfalah remits money after checking the balance of
the customer account.

The process of collection starts when the cheques of Bank Alfalah


Ltd. Are received from other banks. Then these cheques are sent to the
Head Office Karachi, which sends the cheques to SBP for clearing and get
the confirmation of cheque and credit advice. Main activity of clearing is
performed by Head Office, which contacts other banks through SBP.

BILLS FOR COLLECTION IN 1999


Payable In Pakistan Rs. 22,092,000
Payable Outside Pakistan Rs. 1,964,738,000

Total Rs. 1,986,830,000

Business Institutions 46
Bank Alfalah Ltd.

CREDIT AND ADVANCE


DEPARTMENT
Credit and Advances Department deals with the provision of loans
(credit facility) to the customers. At BAF, credit is given on the basis of a
policy made by Board of Directors and is called Credit Policy. This policy
statement sets out the underlying principles from which the BOD will
determine the commercial credit activity of Bank Alfalah Ltd. The
committee to approve direct and review commercial lending of Bank and to
ensure that credit policies are adhered to and the credit operation is
conducted in an efficient and effective manner.

Purpose of this policy is to set out the credit policies for the boar, which
will be implemented by the Credit Committee. The policies are described
under the following readings:
• Credit principles
• Portfolio limits
• Approval
• Administration
• Monitoring and review

1. CREDIT PRINCIPLES
It includes principles to be adopted for lending authority, approval,
monitoring and control on a basis consistent with Bank Alfalah Ltd.
The operational objectives and business strategies regarding objectives,
structure, performance and administration are also included.

Business Institutions 47
Bank Alfalah Ltd.

2. CREDIT PORTFOLIO
These are the guidelines set down by Credit Committee regarding:
• Total facilities
• Term facilities

3. CREDIT APPROVAL
When the terms and conditions are set and both parties are agreed, the
Credit committee makes approval for the credit.

4. CREDIT ADMINISTRATION
The credit application when handed over to Credit Administration,
then they critically examine securities given by client to bank against credit
facilities. Credit Administration keeps liaison with lawyers, surveyors,
valuators and other corporate bodies.

5. CREDIT MONITORING
The client can present his own account insurance policy as security
for credit. When he presents his own account as security, his account is
blocked for the same amount, which the bank is granting him. When the
facility is adjusted at that time, the blocking is released from the account.
Clients can also use third party’s account for getting credit. Shares can also
be kept as security in this case these are verified and duly signed. These are
kept separate to avoid theft. The company whose shares are used is informed
that its shares are in the custody of the bank.

Business Institutions 48
Bank Alfalah Ltd.

ADVANCES
Bank Alfalah Limited, Abdali Road Multan, provides the following
facilities in Advances Department:
• Funded facilities
• Non-funded facilities

FUNDED FACILITIES
These are the facilities in which funds like cash fund are included.

LPO
Goods purchased on behalf of bank and provided to customers.

PRE-SHIPMENT
It provides to prepare consignment. Maximum tenor is about 150
days. Profit may be 16% per annum. The repayment is generally from sale
proceeds. This is for preparation of consignment.

POST – SHIPMENT
During export process, funds are required for preparation of next
consignment that is provided by post-shipment facility. Maximum tenure is
150 days. Profit rate is about 15% per annum.

Business Institutions 49
Bank Alfalah Ltd.

NON – FUNDED FACILITIES


These facilities are on:
• Letter of Credit
• Letter of Guarantee

L/C is of two types:


• Sight L/C for 90 days
• Usance L/C for 120 days

CREDIT CARDS
Bank Alfalah has no credit card facility but, Inshallah, in March the
credit cards will be issued by bank.

ADVANCES IN 1999
Rs. 10,327,324,000 All in Local Currency

Business Institutions 50
Bank Alfalah Ltd.

FOREIGN EXCHANGE
DEPARTMENT
Foreign Exchanged Department deals within exports and imports. Mr.
Saleem at BAF supervises it. The bank acts as exporter as well as importer
bank for different parties who are in the business of export and import.

EXPORTS

EXPORTER
When the bank becomes the exporter bank for a party then the market
stability, reputation, financial position of the exporter is first of all checked.

DOCUMENTS TO BE ATTACHED FOR EXPORTS


• Invoice
• Bill of lading
• Packing list
(a) Total quantity
(b) Net weight/carton
(c) Gross weight/carton
(d) Total net weight/carton
(e) Total gross weight
• Bill of exchange (original or draft)

Business Institutions 51
Bank Alfalah Ltd.

• E-form: Initial document on which total export proceeding is


based. In this form , all the conditions are given, which are necessary
for exports.
• Letter of credit: It is written agreement between importer and
exporter.
• Beneficiary certificate
• DHL certificate (TCS certificate)
• Form ‘M’
• Certificate of Origin (Form –A)

FORM – E
Government has provided facility to exporter in taking E-Form from
any bank and he can present it to any bank for negotiation.
Export Proceed Realization Certificate

SBP gives rebate to exporter against export after realization. It is paid


according to commodity wise and bill wise.
Claim period: 1 year.

TRANSPORT DOCUMENT (BILL OF LADING, AIRWAY BILL)


• When insurance is done by importer, C&F (cost and freight)
usually used.
• FOB cost (free on board)
• CIF (cost insurance and freight) when insurance is done by
exporter, CIF is used.

Business Institutions 52
Bank Alfalah Ltd.

• Tenor (At sight) immediate payment by importer after receiving


product.
• Partial shipment: Product is sent partially.
• Transshipment: Product is sent via any country
E-FORM CERTIFICATION
When export is done on C&F basis, so bank issues E-form
certification to exporter and he submits it to the custom officer along with E-
form certification to certify E-form.

FORM OF AUTHORIZED DEALER’S CERTIFICATE


State Bank permits exporter to issue Bill of Lading in the favor of E-
form bank. But if requirement of L/C is to issue Bill of Lading in favor of
company then shipping company issues bill of lading in favor of Exporter
Company. Authorized Dealer Certificate is filled for this purpose.

CERTIFICATE OF ORIGIN
This certificate shows that goods are from Pakistan.

COVERING SCHEDULE
If in covering schedule, it is given that “please remit proceed to our
Karachi Office A/C no. 5740734881 with ABN (Amro Bank New York),
USA for onward credit to BAF Multan.”

BENEFICIARY CERTIFICATE
If L/C requires some information as proof of anything from exporter
then exporter has to present beneficiary certificate for that proof.

Business Institutions 53
Bank Alfalah Ltd.

Business Institutions 54
Bank Alfalah Ltd.

E-FORM
E-form has four copies:
• One for custom officer
• One for exporter
• Triplicate copy for SBP
• Duplicate copy for bank

Bank reporting or duplicate and triplicate is done by bank. Custom


Officer (date is given on the foot of form) should clear product.

PAYMENT FROM IMPORTER BANK


It is the choice of importer to open L/C from any bank and the bank
from which L/C is opened can also refer to some other bank for payment.
So bill of exchange is sent to referred bank and other documents are sent to
L/C opening bank.

SWIFT
It is network among all banks. No other institute can get involved in it.

BILL OF LADING
Certificate from shipping company for loading documents. If
requirement of L/C is to issue Bill of Lading in favour of L/C opening bank,
then authorized dealer certificate will be provided by bank in favor of L/C
opening bank.

Business Institutions 55
Bank Alfalah Ltd.

BANK KEEP IN RECORD


• Covering schedule
• Invoice
• Packing list
• AWB
• Certificate of Origin
• E-form
Normally bank keeps photocopy of all documents in record.
Negotiable documents (original documents).

IMPORTS
L/C is opened by the importer. There are two types of L/C.
• Revocable
• Irrevocable.

NECESSARY REQUIREMENT
If place of issue and port of loading is different on Bill of Lading, then
along with the stamp of shipment on board, vessel name and port of
shipment is written.
1) Issue date of Bill of Lading – shipment on board.
2) There should not be cutting on bill of lading without authentication.
3) Bill of lading should show capacity of agent. If bill of lading can be
taken by the agent of Importer Company, then his name should be
mentioned on bill of lading.

Business Institutions 56
Bank Alfalah Ltd.

4) Original GSP should be presented.


5) If TT reimbursement is not acceptable, it means bill of lading is
necessary.

When documents are received for export, do enter into lodgment


register.

DOCUMENTS FOR IMPORT


• Performa Invoice signed by importer
• Category passbook copy attested by any bank
• L/C opening application filled in by the customer
• Import registration with export Promotion Bureau
• Annexure
• Verification of signature by S. S. Card
• L/C issued on basis of L/C application form.
• Insurance if covered by buyer.
• Insurance cover note.
• Insurance policy.

Business Institutions 57
Bank Alfalah Ltd.

ACCOUNT DEPARTMENT
Most important department of bank as it is concerned with:
• Revenue
• Expenses
• Assets
• Liabilities

These are the pillars of any business. This department is supervised by


Mr. Masood Ahmad. 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 all the vouchers are posted under the right head.
Amount, date, stamps, signatures all the requirements for cheques and
vouchers are fully checked.

If any kind of renovation or construction or rebuilding is done, all is paid


from the Accounts Department. Like petrol for the car of EVP and VP,
stationery charges, medical allowance, etc. are all paid by this department.

DAILY CUSTOMER MOVEMENT LIST


All the changes that are made in accounts of customer are shown in
the daily customer movement list. By using this list, people of Accounts
Department can prepare the vouchers.

Business Institutions 58
Bank Alfalah Ltd.

Following activities are performed by Account Department:


• Voucher preparation
• Preparation of daily, weekly, monthly, and annual statement.
• Budgeting and fixed assets
• Employer’s benefit
• Expenditure approval.

Business Institutions 59
Bank Alfalah Ltd.

SWOT ANALYSIS

STRENGTHS

• Bank has a belief in customer service


• Backed by strong Abu Dhabi Consortium
• Customer give suggestion for the improvement of bank and
these suggestions are listened carefully.
• Manager & EVP Mr. Asif A. Sheikh has good coordination
with staff members.
• Environment is friendly.
• Products are excellent
• Expansion is consistent
• Modernized banking (online + Internet)
• Fully computerized, each department has to own PC.

WEAKNESSES

• BCCI Image.
• Mixed Culture
• New Setup
• No ATM facility is provided
• No traveler cheques are issued.

Business Institutions 60
Bank Alfalah Ltd.

• Tokens are not issued to customer so the chances of doubling


are present.
• No credit card facility is available.
• Personal Lockers are not available.
• No internal audit is held.
• Staff is lesser.

OPPORTUNITIES
• Information Technology.
• Credit Card Facility
• Internet Banking
• Establishing Foreign Branches
• Local Setup Expand

THREATS
• Competition
• Legal Reputation

Business Institutions 61
Bank Alfalah Ltd.

RECOMMENDATIONS
Finally, We are giving some suggestions for Bank Alfalah Limited.
These suggestions are based on our experience with bank.

• This is a routine practice that in order to give personalized services to the


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

• Under no circumstances chequebook should be given to the customer if


the account formalities are incomplete.

• There are two officers involved in cash deposit process, which is time
consuming. Cashier should be given certain powers to receive cash of
US$, DM and L to provide prompt services.

• Similarly, there are two officers involved in cheque payment process,


which is time consuming. Cashier should be given certain powers to pay
cheques up to Rs. 25,000/- to provide prompt services.

Business Institutions 62
Bank Alfalah Ltd.

• Cheques, which are drawn on Bank Alfalah Branch and returned unpaid
in clearing, are not reflected in the Statement of Account of the
customers. These cheques must be reflected in the accounts so that
credibility of the customers may be assessed.

• Tokens should be issued to avoid doubling.

• Lockers, ATM, credit card, traveler cheques all these facilities should be
provided to attract more customers.

• Audit should be held internally. Rather there should be an Audit


Department in the branch to make audit on daily basis. This can become
so helpful as different banks are having this department of their own.

Business Institutions 63
Bank Alfalah Ltd.

MARKETING PRACTICES
ADOPTED BY BANK
Nowadays marketing of products is of prime importance for any
organization. In this dynamic environment, every organization has its own
Marketing Department, which is responsible for creating the demand of its
goods and services.

Nowadays banks also have their marketing departments, which are


responsible for creating demand of their products, i.e., their deposit schemes
and increasing the deposit of the bank.

Bank Alfalah has its own full marketing Department at the Head
Office, Karachi. This department prepares different deposit schemes for its
customers, time to time, in order to increase the business of the bank. At
branch level, the Operations Department follows marketing practices. At
each branch of bank, officers are available to provide marketing activities of
their products.

They make customer calls and personally visit the potential customer
to convince them to invest in AFB. They make phone calls to customers and
inform them about their schemes, profit rates.

Business Institutions 64
Bank Alfalah Ltd.

CONCLUSION
BANK ALFALAH ( BAF ) under the leadership of Sheikh Nahayan
Mabarak Al-Nahayan has made significant in building of strengthening both
the corporate and retail banking sectors in Pakistan.

The Bank attained Number two (2) position in terms of its Balance
Sheet size amongst the private banks in Pakistan in 1999. The significant
improvements in terms of its results in comparison to the corresponding
period for the year 1998 have been much above the market expectations.
Balance Sheet footing of the Bank reached the level of Rs.21 Billion-an
increase of more than 46% over the previous year. Customer Deposits rose
by 33% on a year-to-year basis and stood at Rs.15.82 Billion. Bank
maintained a Capital adequacy ratio of over 13%, which is significantly
above the Basle guidelines and international requirement of 8%. The pre-tax
profit of the Bank also increased more than five (5) times as compared to the
previous year and stood at Rs.354 million for the year 1999. Bank’s
investment in the Financial Sector was based on the confidence of bank in
the country as a whole and it has been amply demonstrated by the growth
plans of bank though ambitious in nature but prudent and in line with the
potentials of the market place. Although the financial sector in general
witnessed some shrinkage, both in terms of downsizing and closure of
certain locations, the bank, however, continued with its expansion
programme and added five (5) new Branches in their network, one each in
Islamabad, Peshawar, Multan, Faisalabad and Lahore.

Business Institutions 65
Bank Alfalah Ltd.

BANK ALFALAH views specialization and service excellence as the


cornerstone of its strategy. The people of bank innovation, creativity,
reliability, customized services and their execution are the key ingredients
for their future growth. Based on this approach, their Treasury Division and
the Structured Finance Unit have been geared to provide specialized services
to the Corporate customers. Revenues from these activities have started
yielding dividends and they expect significant growth in these areas in the
coming years. While building on their in-depth familiarity with their
customers’ needs and anticipated developments in the banking industry, the
Retail and Corporate areas of their operations will continue to provide a
strong and stable base to the business of the Bank.

They are aware that they have stepped into the 21st century and they
must meet its challenges by acquiring the highest levels of Technology.
They will thus be accelerating their enable them distribute their products and
services through most efficient and high-tech means. They say that they will
invest in the modern tools and substantial allocation of resources will be
made to achieve this objective during the current year. Their programme to
launch real time – on line Banking Services and introduction of ATMs at
strategic locations have been firmed up and it will be fully operational
during the year 2001.

Their focus would be to constantly seek out growth opportunities


through increased quality assets and by offering a wider range of products
and services to their esteemed customers. There are significant growth
opportunities for BANK ALFALAH and they are confident in their ability to
grasp them. They are committed to enhancing the shareholder’s value and

Business Institutions 66
Bank Alfalah Ltd.

look forward with greater optimism to a prosperous future for BANK


ALFALAH

Based on the profit of Rs.354 million, the Board has proposed that a
cash dividend at a rate of Rs. 2.00 per share i.e. 20% of share capital be
distributed among the shareholders.

Business Institutions 67