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REG# 2013-DCC-108
SEASON 2015-17
CELL NO 0342-8829966





01 Executive Summary 03
02 Organization History and Introduction 04
03 Commercial Banking Scenario in Pakistan 06
04 Vision of Bank Alfalah 08

05 Mission of Bank Alfalah 08

06 Company Management System 09
07 Head of Board of Directors 09

08 Senior Management 10
09 Management Committee 11
10 Sketch of Board of Director 12
11 Best Awards won by Bank Al-Falah 2017 13
12 System and Operation Division 14
13 Credit Card Division 14
14 Human Resource Division 16
15 Audit Division 16
16 Policy Formulation and process meeting 17
17 Administration / Management Styles 22
18 Impact of Management styles on Employee 23
19 The Strategical Hierarchy 25
20 The Account Opening Department 26
21 Types of Accounts 27
22 Procedure to close an Account 40
23 Remittance Department 41
24 Financial Analysis 49
25 2017 Highlights 49
26 Six Year Summary 53
27 Review of Six Year Performance 55
28 Statement of Value Added 59
29 Share Price Sensitivity Analysis 60
30 Balance Sheet of Bank Al-Falah 61
31 Profit and Loss Account 62
32 Cash Flow Statement 63
33 SWOT Analysis of Bank Al-Falah 64
34 Recommendation 73
35 Conclusion 74


In Master of Commerce (M.Com), Internship program is an important

part to give students an opportunity to have experience of practical field. The Purpose of

this program is to acquaint the students with practical application of theoretical concepts

taught to them during conduct of their M.Com program. It equips us with the necessary

knowledge, skills and values of business culture which helps us to perform professionally

as we get first step in our practical life.

I was lucky enough to avail this chance of doing an internship at Bank Alfalah

limited Kutchery Road Branch. This report discuss the overview of my internship

organization. It illustrates the history of Bank Alfalah, detailed information about the

bank’s accounts, clearing department, remittances etc. It contains the information that I

was able to gather and understand regarding the activities of the bank.

I have discussed all the departments and learning that I have got there. During

this internship I got a chance to get an idea about the practical working of different

departments. In account opening department, I have learnt about the different types of

accounts as well as account opening procedure. In clearing department I got the

knowledge about different types of clearing. In remittance department I learned about

different types of remittance.

The report is prepared in simple and understandable format so, that ordinary

person can also take benefit from this report. This report will provide a better and brief

learning about Bank Alfalah Limited.

Organization History and Introduction

Bank Alfalah is the fifth largest private Bank in Pakistan with a network of over 600

branches in more than 200 cities across Pakistan with an international presence in

Afghanistan, Bangladesh, Bahrain and a representative office in the UAE. The Bank is

owned and operated by the Abu Dhabi Group. The International Finance Corporation

(IFC) of the World Bank partnered with the Bank in 2014, and holds a 15 percent stake in

Bank Alfalah

Incorporated as a public limited company on 21st June, 1992, under the

Companies Ordinance, 1984, Bank Alfalah commenced banking operations from 1st

November, 1997.

The Bank provides financial solutions to consumers, corporations, institutions and

governments through a broad spectrum of products and services, including corporate

and investment banking, consumer banking and credit, securities brokerage,

commercial, SME, agri-finance, Islamic and asset financing.

The Bank has 97.91 percent shareholding in Alfalah Securities (Private) Limited,

which is engaged in the business of stock brokerage, investment counseling and fund

placements. The Bank has 40.22 percent shareholding in Alfalah GHP Investment

Management Limited, which is registered as an Asset Management Company and

Investment Advisor under the Non-Banking Finance Companies (Establishment and

Regulation) Rule.

This is an interesting attribute of bank Alfalah which is its Islamic banking

branches throughout the country. Thus in addition to that conventional banking practices

it offers Islamic banking branches to its customers. Hence, Bank Alfalah has two types of

branches in Pakistan

1. Conventional Banking Branches in Pakistan

2. Islamic Branches

The Bank Alfalah Limited team comprises of dedicated professionals equipped

with a diverse array of skills, vast experience and pro customer attitudes. The

management concentrates its energies on making informed economic decisions,

translating it into greater returns for our investors and customers. This prudent attitude

has created a synergistic organizational structure leading to improvements in profitability

and a sustainable competitive advantage for the bank.

A Highly Responsive Product Portfolio is not only comprehensive but also

customizable to match the needs and preferences of the customers. These

characteristics of the portfolio have helped Bank Alfalah Limited to face challenging

economic conditions. The product lineup continues to fulfill and satisfy the banking

requirements of not just the conventional consumer, but the demanding financial needs

of the corporate sector as well. Today, as Pakistan moves into the 21st century with its

ambitious expansion and development programs, Bank Alfalah is here to join the efforts

to help the country meet its growth objectives. The bank offers an extensive range of

financial services specifically designed to cater to the needs of its successful

associations with the Government and Private Sector.

Commercial Banking Scenario in Pakistan

The function of commercial banking and application of the fundamental principle

of the depositor bank relationship have remind essentially the same since about 500 B.C.
bank operation methods and procedures, on the other hand , have undergone a constant
process of evaluation because of economic growth, the mounting volume of transaction
and greater use of banking feasibilities.

At the time of independence there were practically no industries and resources so

it was very difficult of Pakistan to run its own banking system immediately. There were
487 offices of scheduled banks in the territories now constituting Pakistan. Therefore in
accordance with the provision of India independence Act of 1947, and expert committee
was appointed to study the issue. The committee recommended that the “Reserve bank
of India” should continue to function in Pakistan until 30 th September 1948.

It was also stipulated that Pakistan would take over the management of public
debt and exchange control “Reserve bank of India” on 1 st April 1948. Then Indian notes
would continue to be legal ender in Pakistan till 30 th September1948. By 30th June 1948,
the number of offices of scheduled banks in Pakistan decline from 487 to 195. In order to
establish a full-fledged control bank the Governor General of Pakistan Quaid-E-Azam
Muhammad Ali Jinnah, inaugurated the state bank of Pakistan on July1st, 1948. 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 1 st 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.

The fact show that the commercial banking has made tremendous progress and
achieve a phenomenal growth since independent and that commercial bank have duly
played a vital role as mobilize of people saving to constitute the most important source of
financing in country economy.

As the result of these contributing factors methods and practices necessary to

handle the increased volume of detail work have been developed while another and
quicker method have been adopted in order to cope with the increase volume , much in
which has been accomplished without unduly increasing cost of doing business.
During to last 20 years we have experience a constant transaction from the old to
the new from manual to mechanical method and procedure, from old establish practices
to current techniques and to a more scientific approach to the solution of the problems
brought about day to day changes in business practices.

Commercial banks operating in the country can be divided into four distinct
categories, private banks, foreign banks, privatized banks and nationalized commercial
banks (NCB’s). The number of private banks has remained almost constant ever since
they commenced operations in early nineties. However, ownership of a number of private
banks has changed over the years. Lately, with the takeover of Prudential Bank and
Platinum Bank by the new sponsors their names were changed to Saudi Pak
Commercial Bank and KASB Bank respectively. Earlier, ownership of Union Bank and
Schon Commercial Bank changed. While the new sponsors of Union Bank preferred to
continue with the same name, the buyers of Schon Commercial Bank changed its name
to PICIC Commercial Bank.
Union Bank acquired the operation of Emirates Bank International (EBI) in
Pakistan. The scheme of amalgamation was notified by the central bank on September
03, 2002 and Union Bank settled the amalgamation price of US$ 37 million on
September 09, 2002. Union Bank had acquired Pakistan operations of Bank of America
in year 2000 and American Express credit card business in Pakistan in year 2001.
In the NCBs category two banks — Habib Bank and National Bank of Pakistan —
have been left after the privatization of United Bank. National Bank of Pakistan has been
listed at local stock exchanges and parts of its shares were off loaded. The GOP is
actively pursuing the privatization of Habib Bank, through sale of its 26% shares along

with transfer of management. The remaining shares of the GOP in Muslim Commercial
Bank and Bank Alfalah were also sold. The GOP sold majority shares of Allied Bank of
Pakistan in early nineties but has not been able to off load its remaining shares in
the bank.

United Bank's privatization demands specific mention for two reasons:

1) It was the largest transaction, and
2) A large part of sale proceeds was received in foreign exchange.
The consortium comprising of Abu Dhabi Group and Best way Group has acquired
51% shares of the bank along with management control. Since October 2002 the bank
has been working under the new sponsors.
Meezan Bank was created as a result of merger of Al-Meezan Investment Bank
and Societe Generale. The first ever license to operate as a Scheduled Islamic
Commercial Bank was granted to Meezan Bank on January 31, 2002. Pakistan
operations of Societe Generale were amalgamated into Meezan Bank on May 01, 2002.
The number of foreign banks operating in Pakistan has been declining constantly
since the GOP decided to freeze foreign currency accounts in May 1998. The total
number of foreign banks in the country has reduced to half since the freezing of foreign
currency accounts. The positive point is that most of the foreign banks were able to sell
their Pakistan operations at attractive prices.

The Mission
”To develop & deliver the most innovative products, manage customer
experience, deliver quality services that contributes to brand strength, establishes
a competitive advantage and enhances profitability, thus providing value to the
stakeholders of the bank“

The Vision
“To be the premier organizations operating locally and internationally that
provides the complete range of financial Services to all segments under one roof.”


Management means the administration and the governing body that is concerning
the whole organization. All the decision and strategies are been proposed and evaluated
the management of the organization. At Bank Alfalah, the management is pretty strong
and there is lot centralization in the whole network of the bank. The management at Bank
Alfalah has been divided into 3 major parts. i-e, Board of Directors, the Top management,
and the group of middle managers, supervisors and the employees.

The Board of Directors:

The upper most part of the management is the Board of Directors or the
Executives. The Board of Directors are responsible for the first phase of the
management process, i-e, planning. So, all the decisions and the strategies are being
proposed and implemented under the instructions and the supervision of the board of
directors or the executives. Also the policies and the overall objectives of the Bank are
being proposed at this level of the organization.
The Top Management:
The top management involves the branch managers and the chief managers of
the bank including the operations managers as well. The major responsibilities include
the strategy formulating for the bank and supervising the whole staff at the branch. They
define and interpret the objectives and vision and then formulate policies for their



H. E. Sheikh Hamdan Bin Mabarak Al-Nahayan……… Chairman

Mr. Nouman Ansari……………………..…………………CEO & Director
Mr. Abdullah Khalil Al-Mutawa……………………………Director
Mr. Abdullah Naseer Hawaileel Al-Mansoor…………… Director
Mr. Khalid Mana Saeed Al Otaiba……………………… Director
Mr. Kamran Y. Mirza……………………………………… Director
Mr. Takis Arapoglou………………………………………. Brief Bio

Senior Management
Nauman Ansari
-- Director & CEO

Suhail Yaqoob Khan

-- Chief Risk Officer

Mohib Hasan Khan

-- Chief Information Officer

Rizwan Ata
-- Group Head, Islamic Banking

Mehreen Ahmed
-- Group Head, Retail Banking

Bashir Ahmed Sheikh

-- Group Head, Special Assets Management

Tahir Khurshid
-- General Manager, Audit & Inspection

Syed Ali Sultan

-- Group Head Treasury, Capital Markets & Financial Institutions

Mian Ejaz Ahmed

-- Company Secretary and Group Head Legal & Corporate Affairs.

Riaz Hamdani
-- Chief Compliance Officer

Khawaja Muhammad Ahmad

-- Group Head Operations & Corporate Services

Aasim Wajid Jawad

-- Head, Strategy

Muhammad Maqsood Ali Usmani

-- General Manager Corporate Services

Anjum Hai
-- Chief Financial Officer

Hafsa Abbasy
-- Head of Human Resources & Learning

Bilal Asghar
-- Group Head Corporate, Investment Banking & International Business.

Management Committees
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Central Management Committee Controls and Compliance Committee
Nauman Ansari - Chairman Nauman Ansari - Chairman
Suhail Yaqoob Khan Suhail Yaqoob Khan
Anjum Hai Anjum Hai
Hafsa Abbasy Hafsa Abbasy
Mehreen Ahmed Mehreen Ahmed
Rizwan Ata Rizwan Ata
Bilal Asghar Bilal Asghar
Syed Ali Sultan Khawaja Mohammad Ahmad
Aasim Wajid Jawad Mohib Hasan Khan
Khawaja Mohammad Ahmad Haroon Khalid
Mohib Hasan Khan Muhammad Ayyaz Ashraf
Mian Ejaz Aamir Patel
Haroon Khalid Faisal Ahmed – Secretary
Muhammad Yahya Khan
Zahra Anwar Furniturewalla - Secretary Asset and Liability Committee
Central Credit Committee Nauman Ansari - Chairman
Syed Ali Sultan
Nauman Ansari - Chairman Suhail Yaqoob Khan
Suhail Yaqoob Khan Anjum Hai
Mehreen Ahmed Mehreen Ahmed
Rizwan Ata Rizwan Ata
Syed Ali Sultan Bilal Asghar
Javed Iqbal Hasan Ahmed Khan - Secretary
Najam uz Zaman
Beena Fawad - Secretary Information Technology Steering
Investment Committee
Nauman Ansari - Chairman
Nauman Ansari - Chairman Suhail Yaqoob Khan
Suhail Yaqoob Khan Anjum Hai
Anjum Hai Mehreen Ahmed
Bilal Asghar Rizwan Ata
Syed Ali Sultan Khawaja Mohammad Ahmad
Kamran Khowaja - Secretary Mohib Hassan Khan
Kamran Mehmood
Process Improvement Committee Razi Ahmed Farooqui
Jerome Andrades - Secretary
Khawaja Mohammad Ahmad - Chairman
Riaz Hamdani
Expenditure Approval Committee
Haroon Khalid
Imran Mahmood Anjum Hai - Chairman
Farhan Ali Khawaja Muhammad Ahmad
Afsheen Jalal - Secretary Mohammed Maqsood Ali Usmani
Amin Sukhiani
Muhammad Ashraf
Syed Adeel Ehtesham - Member and Secretary

Board of Director
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Board Audit Board Human Resources, Board Strategy Board Risk Management Board Compensation
Committee Remuneration and and Finance Committee Committee
nomination Committee Committee

President and Chief

Executive officer
Audit and
CEO’s Secretariat

Human Resource Special Assets Credit and Risk

and Learning Management Management

Compliance and Corporate, Finance

Control Investment banking

Strategy Retail Banking Information


Digital Banking
Islamic Banking Operation and
corporate service

Legal and Corporate Treasury, Capital

affairs Market and Financial

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This Division has been instrumental in developments of procedures and manuals

for various operating requirements of the Bank. After careful mapping of existing
process flow, the Division recommends automation and re-engineering requirements
to improve transaction efficiencies. The Division is active in providing equipment
procurement support and development of new branches. This Division, as a direct
function also manages the protection of fixed assets of Bank.

Technological innovation:

“Modern science is not an option, it is an obligation”

Technology is rapidly changing the way we think, act and do business. Is has
played pivotal role in enhancing customer expectation, particularly with respect to
speed and quality of service.
Alfalah bank enjoys a strategic competitive advantage overall domestic players by
virtue of its leadership in technological innovation. Phone banking service and
Internet banking facility allows customer to enjoy routine banking services from
anywhere in the world. 365 days a year, 24 hours a day.


The Bank’s product portfolio is designed to remain flexible and adapt itself to
changing customer needs. Bank endeavor in this regard is to actively explore newer
avenues of offering higher value to our clients, whom bank feel deserve nothing less.
The Bank Alfalah Credit Card success story has made the institution proud. In
acquiring business, we have signed over 15,959 merchants by 31st December 2008
posting a growth of 16.2% in the corresponding period over last year. Bank Alfalah
has launched various unique credit card schemes to cater to numerous segments.


Strategically, perhaps the most important Division at the Head Office is

responsible for human resource management, including recruitment, staff training and
evaluation. This division is also handles matters relating top administration.
This Division operates on a future oriented strategy focusing on employee’s personal
and professional growth.

Staff development activities are reared to enhance their capabilities for applying the
knowledge and fats towards development of practical solutions. Under our Human
Resource management policy, Alfalah develops and grooms the management
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personnel for position of greater responsibility analytical, interpersonal, and
conceptual and specialization skills to enable them to understand the cause-and-
effect relationships and to think logically.

The hiring philosophy is based upon meritocracy and selecting the right person for
the right job. Alfalah laid great emphasis on the employee honesty and integrity
besides technical competence and, candidates are selected through well defined &
systematic selection procedure.

Dedicated Professionals:

“Unusual efforts on the part of the employees who are apparently ordinary workers
is one of the key indicates of the superior enterprise”

Staff is the most valuable asset of any organization. The human resource
philosophy at Alfalah bank focus on multi-talent hiring, professional grooming,
requisite training and meritocracy based reward system. Staff welfare has been a
Employee productivity enhancement is organized through in-house and external
training programs. Bank continues to offer opportunity for people to develop their
knowledge, skills and personalities, thus ensuring greater self-fulfillment and
progression in the organization.
In short bank Alfalah team comprise of dedicated professionals equipped with a
diverse array of skills and vast experience. The management concentrates its
energies on making informed economic decisions, translating it into greater returns
for our investors and customer. The prudent attitude has created a synergistic
organizational structure leading to improvements in profitability and a sustainable
competitive advantage for the bank.

Training & Development:

Bank Alfalah is committed to the personal welfare and professional development of all
our team members. Proper training of human resource is essential, not only for the
more productive and satisfied work force but for also homogenous corporate culture.
The bank continuous to follow its strategy of hiring batches of young and energetic
Management Trainees who are sent to our Training and Development Center for
training in all areas of banking. Our Training and Development Center is a state of the
art facility with an impressive faculty.

Ethical values:
“Professionalism without integrity is like a book without pages”

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Because the right may not always be obvious, we must be guided in our every
action by set of well -defined values, governing our decision. Alfalah bank
understands that its commitment to satisfy customer needs must be fulfilled within in
a professional and ethical framework.


Finance Division is responsible for bookkeeping and accounts. This Division is the
head office and manages all financial returns and the MIS through its Management
Reporting Wing. The Division is actively involved in preparing market comparative
analysis, consolidation of Bank’s budgets, monitoring and constant review of various
financial indicators.
Financial Division works as the backbone for Bank’s operations. The Division, which
reports directly to the President And Chief Executive of the Bank’s, has been
instrumental in preparation of Bank’s business plans and future stratigies.the
budgetary performances are constantly reviewed and trough a sophisticated “Monthly
Performance Report” (MPR) which is a computer based program, the Division
provides feedback to the senior management on strategic issues like reasons for
budgetary variances and methods to arrest negative performance factors.
Preparing the Bank’s Annual Accounts and coordinating external audits is a direct
function of the Finance Division. Through the dedicated efforts of staff at this division,
the Bank has been winning various awards for the Best Presentation of its Annual
Accounts and also the management has been able to monitor and review the Bank’s
performance in procreative manner.


The Audit Division reports directly to the Board through the Executive Committee-
which are also the Audit Committee.
The Audit Division acts completely independent of the management and is
responsible for checking and reporting on the Management’s compliance with the
Board’s policies and directives, as also the Prudential Regulations and other
directives of the SBP. However, their role is not intended to be just that of fault-
finding; but also guiding and assisting branches in improving their operations.


At Bank Alfalah, policies as mentioned earlier, are been formulated at the
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Executive level of the organization. Policies for any organization constitute a major
part in the overall long term functioning of the bank. In short we can say that policies
and the objectives are the lifeblood of the organization in long run. Though policy
formulation is in the prescribed hands yet the policies formulated by the top level
have been very successful as indicated by the success pattern of the bank so far.
Then these policies are transformed into the hands of the top-level management. The
top management is been suggested to make the policies implemented keeping in
view the long-term objectives of the organization. Also the views from the middle
managers and employees are encouraged as well for the purpose of removing flaws
form the system. For these very purpose meetings are held almost weekly at the
branches level and also in case of any contingent dispute resolving the meeting scan
be called at any time during the branch timings.


Since the inception of Bank Alfalah Limited in 1997, by the grace of almighty, the
bank has moved rapidly in expanding its branch network and deposit base, along with
making profitable advances and increasing its range of products and services. It has
made a break-through in providing premier services at an affordable cost to our
Managerial policies followed by the bank have a direct contribution in its success. The
Board and Management of the Bank have implemented strategies and policies to
carve a distinct position for the Bank in the market place. In a bid to satisfy Bank
Alfalah’s shareholders and valued clients, the management initiated the process of
realization of the Bank's vision by consolidating its financial position and creating a
large and diversified business base. Bank Alfalah has made notable progress in
business volume, efficiency, and profitability following its increased involvement in
trade finance, commercial lending, and foreign exchange and money market
Major policies have been made and implemented at Bank Alfalah are: Consumer
Banking Policy

Alfalah policy regarding consumer-banking policies includes the development

through the electronic consumer banking operations. Likewise, Bank Alfalah has
created a niche for itself in the marketplace. It is planning to introduce new consumer
products like credit cards, e-banking etc.

Lending Policy

Bank Alfalah pursues a conservative yet dynamic credit policy. This strategy has
enabled the bank to have a high quality risk portfolio. Bank prefers to finance
exporters because of less risk involved. Bank Alfalah manages the credit risk, liquidity
risk, market risk and other operational risks very efficiently. For this very purpose
Bank Alfalah has got an effective credit line proposals system to be sanctioned to the
clients on demand.

Selection of Clients

Management is very selective of clients. All of the references are carefully

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checked to learn about a potential client before establishing a relationship.
References are excellent sources of new accounts as they give an opportunity to
learn about a potential client before establishing a relationship. This policy helps in
protecting the integrity of the bank. It ensures good relationship with the clients.
Services and Product Polices

Bank Alfalah provides a vast variety of services to its clients. Some of those policies
are discussed below:

i. Credit Facility
In this service the loans are provided to the customers by the bank to meet revenue
ii. Stop Payment Instructions
It is one of the most important services provided by the bank to its clients. In case the
account holder has lost his/her cheque he can issue the stop payment instructions to
the bank. The bank till further instructions will not honor the cheque.
iii. Deposits

The bank offers different types of Deposits to its account holders.

a. Alfalah Musharakah Saving Account

b. Current Account
c. Musharakah Time Deposits On PLS Basis

iv. Drafts, Telephonic Transfers, Pay Orders

These are the facilities that the bank offers its customers and, at times, to the
people who do not maintain an account with the bank, that is, ordinary people.

For offering these services the bank charges commission besides the government
taxes and duties.

Trade Department Policy

Bank Alfalah’s focus is on “Foreign Trade” as its primary market of business. It

maintains high emphasis on enlarging its Correspondent Banking network besides
aiming to enhance the scope and level of cooperation with existing correspondents.
The Trade finance department has efficiently done management of the changing
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trade policies by the central bank over there.

Marketing Policy

Bank Alfalah inverts heavily for the marketing policies and orientation, for the publicity of
its new products/services. It uses television advertisements, newspaper as well as
various promotional schemes to attract customers. The Bank sponsors a number of
sporting and community development initiatives to play its part as a responsible
corporate citizen

Promotion and Incentives

Bank hires officers in range 1. Then depending upon their job performance they
are promoted to next range. More facilities and increments are given along with
promotion. The bank gives a car facility to the officers of range 5. Bank’s policy is to give
cash rewards and salary increments for increasing the employees’ satisfaction. Also with
the expansion of the branch network growth in the current era, more and more
opportunities have been provoked not only for the young generation but also for the
employees of the bank.

Accounting Policies

Bank Alfalah has adopted almost the same accounting procedures that other
financial institutions are adopting at this time. These accounting procedures or
Accounting policies are made according to Generally Accepted Accounting Principles,
the GAAP. The process flow and the usage of the policies in the day wise routine are
mandatory for all the employees working in the specified departments at the branch.

Recruitment Policy

Hiring is mainly of two types i.e. direct hiring and promotion from lower levels.
Bank’s policy is to hire suitable candidates. By suitable candidates bank refers to
candidates having proper educational qualification, experience and background. It is the
policy of the bank that “President” of the bank will be the representative of major
stakeholders/owners. Board of Directors is representative of sponsors. Bank is reluctant
in making direct appointment of senior executives. EVPs are promoted from lower levels.

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Every year Bank Alfalah opens its doors for about 30 fresh post-graduates to join the
prestigious ranks of Management Trainee officers with the Bank. The MTO scheme is a
highly competitive and sought after induction scheme, in which short-listed applicants
appear in a written test followed by a panel interview. Successful candidates then receive
comprehensive training in essential areas of branch banking at the Bank’s state-of-the-
art training facility at Lahore and Karachi, prior to their posting at various branch
locations. Preferred educational background for entry into the MTO scheme includes an
MBA degree, MA Economics or M.Com from reputable Pakistani or foreign institutions
with GPA of 3 plus, or equivalent. Strong personal character, as well as communication
and interpersonal skills are essential pre-requisites to succeed as an MTO.

Training and Development Policy

Bank Alfalah’s policy is to take special interest in recruitment and training. This
training is been given in two instances, i-e, the Off-job training and the On-job Training.
To impart technical skills to its staff “Training and Development Center” offers programs
in several skill areas. Its employees attend seminars and courses offered by “Institute of
Bankers”. Alfalah also offers various computer-training courses to its employees. It is
obligatory for each staff member of the bank to attend a minimum number of training
courses during the course of a year. Wherever the Training Department is unable to
provide focused training for certain groups of staff, reputable external training providers
are invited to fill the gap

Quality assurance services

Service excellence is one of the priorities of Bank Alfalah. A separate quality
assurance department is to be established as well very soon for the removal of little flaws
that are still prevailing at some of the branches regarding facilities for the consumers.
The focus of the bank is to develop new areas of activities along with traditional banking
activities of resource mobilization and credit disbursement

Growth Policy
Bank Alfalah emphasizes on growth along with providing best quality customer
service. Bank’s policy is to maximize the synergies of branch network through optimal
allocation of financial, human and other resources to compete in the marketplace.

Liquidity Policy

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Bank Alfalah maintains positive and healthy liquidity. Bank’s policy is to keep
surplus liquidity in fixed income securities issued by the Federal Government of Pakistan.

If necessary it can be easily converted into cash .

Investments Policies

Bank Alfalah investment policies are based on federal and provincial securities,
debentures, and participation term certificates treasury bills and blue chip share of joint
stock companies.

Job Satisfaction

Job satisfaction is the major important factor to be considered while evaluating

any organization. To evaluate an organization’s strength and repute in the industry, job
satisfaction is the key factor as well like that of growth and development in the monetary
During my internship program, I observed being in touch with most of the
employees over there, that all the employees are working with devotion that is the basis
for job satisfaction. In addition all the employees are satisfied with the working ambiance,
with the salaries and with the increments and promotions. Only thing to be mentioned out
over here is the workload and the employee timings for their job. Some of the employees
are over burdened with the work. But that does not impact the overall job satisfaction of
the organization. Bank takes much care of its employees because they are precious
assets of it. Bank celebrates birthdays of all employees, arrange trips and give them
opportunity for recreation and enjoyment.

Bank hires officers in range 1. Then depending upon their job performance they
are promoted to next range. More facilities and increments are given along with
promotion. The bank gives a car facility to the officers of range 5. Bank’s policy is to give
cash rewards and salary increments for increasing the employees’ satisfaction. Also with
the expansion of the branch network growth in the current era, more and more
opportunities have been provoked not only for the young generation but also for the
employees of the bank. At Bank Alfalah the employees are very much satisfied with the
job and the overall working conditions of the bank, so in due response, the bank is
enjoying high efficiency in managing the time delays in reporting and working operations.

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Management at Bank Alfalah Ltd. is very much keen towards maintaining the
decorum of the cooperative culture within the organization and also with the clients of the
bank. The way managers treat the employees and an operative is outstanding at bank
Alfalah. This is the reason why each and every employee is pretty much satisfied with
the job.


Management must have to adopt some administrative style to get all the activities
to be done effectively and efficiently. As far as the management styles at Alfalah Bank
are concerned, there is both centralization and decentralization to some extent.
Management must adopt some administrative style to get all the activities done
effectively and efficiently. As far as the management style at Bank Alfalah Limited
Township Branch is concerned, there is centralization to a certain extent and
decentralization in some other areas.

Management refers to the universal process of effectively and efficiently getting

activities completed with and through other people. It is a process by which certain basic
functions, that are planning, organizing, leading and controlling, are performed to
achieve the desired objectives of the organization. These functions are being performed
at three levels in Bank Alfalah.

· Managerial level

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Administrative style of Branch Manager is authoritative. His authoritative style is the
requirement of administration. For the implementation of strategies and getting all the
activities to be done properly with an organized environment, unity of command was the
requirement of the time. In his absence, I observed the environment of uncertainty and
deregulation in the bank to a little extent.

· Department Head level

Department heads are responsible for the overall operations of the department assigned.
There is a sign of good delegation of authority for decision-making in Alfalah Bank at this
level. Department managers always ask his subordinates before referring the solution to
a problem to the Branch Manager. So at this level employees are very much contended
to their work.

· Staff level

At the staff level, as employees are satisfied to the work assigned and authority structure, so

management at this level is concerned to the decisions of the department heads level.


Management styles have a great impact on the overall working of an organization.

The key issues, which can arise due to strong authoritative actions by the management,
can be of the following nature:

· Absenteeism
· Irresponsible behavior
· Coordination
· Reporting time delays
· Turnover

But at Bank Alfalah Ltd. these issues have never been provoked till now. This is due to
the fact that employees have been given equal importance as been given to high level
operatives. The following important aspects need consideration.
23 | P a g e
The term motive implies action to satisfy a need. Motivation can be defined as a
willingness to expend energy to achieve a goal or a reward. The management styles
adopted by the bank affect greatly, and employees are motivated in order to enhance
their performance and achieve the derived goals.

Morale and Productivity

The employees of the bank possess high morale, and thus exhibit high
productivity. The employees are happy and are also productive workers. Job attitudes
and morale are quite positive for two reasons. Firstly employees gain social satisfaction
from interactions at the work place. Working conditions and supervision are good;
secondly high morale results from high motivation to produce. In other words we can say
that management should put its eggs in the basket that creates a high-motivated work

· Job efficiency and satisfaction

Consequently the overall impact of the well-equipped management styled

organization is the job efficiency and job satisfaction. At Bank Alfalah the employees are
very much satisfied with the job and the overall working conditions of the bank, so in due
response, the bank is enjoying high efficiency in managing the time delays in reporting
and working operations.


The Strategic management model provides a conceptual basis for applying

strategic management. Alternate strategies that an enterprise could pursue can be
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categorized into 4 actions:

Integration Strategies
Intensive Strategies
Diversification Strategies

Defensive Strategies

Integration Strategies:

Forward integration, backward integration, and horizontal integration are

sometimes collectively referred to as vertical integration strategies. Vertical integration
strategies allow a firm to gain control over distributors, suppliers, and/or competitors.

Intensive Strategies:

Market penetration, market development, and product development are

sometimes referred to as “intensive strategies” because they require intensive efforts to
improve a firm’s competitive position with existing products.

Diversification Strategies:
Concentric, horizontal and conglomerate are some of the strategies, which
are inculcated under the head of diversification strategies. Overall, diversification
strategies are becoming less and less popular as organizations are finding it more and
more difficult to manage diverse business activities.

Defensive Strategies:

Another way to pursue strategies is through the defensive way, which includes
joint venture, retrenchment, divestiture and liquidation strategies.


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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 department that is responsible for opening and closing an account assumes
immense significance and holds a central place in the basic banking operations. The
Account opening department was the very first experience of my practical life being
working with a bank, during my internship with Bank Alfalah Ltd.

This department is the best way to start with the banking career or training. This is
because the ways you deal with the customers give a lot exposure to you for the coming
days in banking because the bankers are always in contact with customers as customers
are the biggest source of assets for the bank. I really enjoyed my stay at this department
as I got to interact with the customers directly for the first time. I was given under the
supervision of Mr. Muhammad Ali, who is the Incharge of Accounts Opening.

During my stay at this department I got to fill the forms of individuals who wanted
to get their accounts opened at Bank Alfalah Limited, fill the cheque and deposit slips of
customers who were not literate enough or needed instructions, and I also got the
opportunity to give advice to the customers regarding the requirements of account
opening and the benefits of opening an account with Bank Alfalah Limited.

Working with the Accounts opening department gave me a lot of courage as it

taught me the way that you should deal with the customers of the bank. Now coming
towards the documentations, stuff requirement at this department for the accounts
opening process.

Types of Account
¨ Current Account.
¨ Saving Account.
¨ Notice Deposit.
¨ Term Deposit.

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Current Account

The current account is the most common account and the most preferred amongst
business concerns. The theoretical explanation for this would be that they can function
more efficiently but since in reality there are no restrictions on any withdrawal. The only
reason we can think of is that current account facilitates online banking which saves time
to a considerable extent. No interest is being credited to the customer’s accounts that
are maintaining the current accounts with the bank. Current account enables the client to
do cash transactions in a more efficient manner.
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. 10,000.


· Initial deposit for account opening is Rs. 1,000 with no minimum balance
· Non-interest bearing checking account.
· Maximum 2 deposits & 2 withdrawals through cheque are allowed.
· Free debit card can be used to withdraw cash and make purchases at thousands
of outlets across Pakistan which provides access to funds 24 hours a day.
· No restriction on ATM withdrawal.

The PLS Savings 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 2 % per month. The minimum balance requirement for opening the account is

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The PLS savings Account is meant for those people who have got an aptitude
towards earning some profit on their amount deposited for sometime with the bank.
Individuals who wish to earn profit/interest on their investment normally maintain the
profit and loss sharing account but in order to earn interest the client is required to keep
his/her deposits with the bank for some time. For this purpose, there are some
restrictions on withdrawal of money from a Profit and Loss sharing account but in general
banking practice there is no restriction on any with drawl from a Profit and Loss sharing
account. The interest/profit is paid half yearly.


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.


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 4.00%.

¨ 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 4.50 %.


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 3.25 % to 6.50 %. The term deposit account varies
from one month to 3 years and the minimum balance requirement is Rs. 50,000.



Deposited Amount × Rate of return
365 (No. of days in a year)
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Sum of daily end Balance × Rate of return

No. of days in month


Any minimum balance during the month is taken for calculating profit


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:

Þ Cash payment (only in case of term Deposits). Or as per customer requirement.

Þ By sending bank draft to depositor’s home address or officers or whichever is
specified as mailing address.
Þ The depositor’s account is credited at maturity.

The main document in this department is, of course, the Account Opening Form.

Particulars at the Account Opening Form:

In the account opening form the client is required to provide the following information.
The first part establishes the currency in which the account is to be maintained /
operated. The currencies include

o Pakistani rupee.
o U.S. dollar
o Pound sterling
o Euro

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The second part then establishes the preference regarding the type of account to be
maintained. The various choices offered are

o Savings account
o Current account.
o Royal profit

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 the “Joint Accounts” proprietorship A/C,
Partnership A/C, Private Limited Company A/C and Public Limited Company A/C.

Now, during my internship at the Account Opening department at Bank Alfalah Ltd.
Garden Town Branch, I found out the following documentation and writings are required
in order to open an account with us:

The first thing mentioned at the account opening form is the Title of the
account. Title of the account is to be written in block letters. By title of an
account we mean the name (either of the individual or of the business
concern) with which the account is to be opened and operated.

The client is supposed to provide the information whether the account would
be maintained singly (only one person operates the account) or jointly (two or
more than two persons maintain the account).

The name of the person who intends to operate the account.

Provision of either Father’s or the Husband’s name is also a pre-

requisite. Occupation of the prospective account holder.

The name and complete address of the employer.

Nationality of the Account opener

Country of residence is to be specified.

Contact numbers both the cellular and the landline numbers are to be provided
in addition to the segregation of the residential and the office phone as well.

The national identity card, of course is an integral part of the account opening

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Passport number, if the prospective client has got one.

Another requirement is the date and place of issue of the national identity card.

The prospective client also has to provide the name, address and relationship
of any one of his/her close relatives in order to facilitate the communication
problem. The clients often have a misconception that there next of kin might, if
some peculiar circumstances arise, get the profit out of his account but this is
not the case. The name and address of a close relative is only recorded in
order to undertake necessary communication when needed.

In case of a business concern there are two more things that are to be
provided by the business.

Type of organization

The various types of organization which are present in Pakistan at present are:

Public Limited Company

Private Limited
Company Partnership


Some special documentation is also required like the certifications regarding

the incorporation and commencement of business and the Form 29. The
business concerns also have to give their full name, brief description of the
business, date of incorporation, and place of incorporation, national tax
number, telephone number and fax number.

The choice of either the deduction or non-deduction of zakat also needs to be

highlighted. Zakat is deducted out of a Musharakah savings account and not in
the case f the current accounts...

Details of other accounts maintained with other branches of Bank Alfalah Ltd.
or other banks are also to be given.

The name, signatures, and account number of the introducer is a very

essential prerequisite in order to facilitate the opening of an account. The
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introducer is a person who already has an account in the same branch. It can
also be a person from the staff of the branch as well. This introduction is the
mandatory requirement in order to open an account in order to trace out the
defaulter in case of defaults.

Then the client also has to put forth the instructions regarding as to whether
the account would be maintained on the basis of ‘either or survivor’, ‘jointly’
or ‘any one of us’.

After this three signatures of the client are needed and if it is an account of a
business concern then the rubber stamp of the company/organization is also
needed below the three signatures.

In case of a joint account all the persons unanimously might give the right to
operate the account to one person. This right is also termed as mandate for
joint account. If the mandate is given to a person all join account holders
must sign as an evidence of their approval. The names of persons are written
on the title of A/C and on S.S. card.


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 2% on Rs. 25,000 or above. 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.


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


Sign of both customers on back of AOF

Sign on joint A/C # mandate
Name and A/C # of introducer
NIC copies of both members.
Mode of operation.

In case of account opened by a business concern there are some documents that are
needed to be attached with the account opening form. The details of these documents
are given below.

Limited Company:

Copy of certificate of incorporation

Memorandum and Articles of Association
List of Director’s
Copy of the board resolution
Certificate of Commencement of
Business Copies of CNICs of Director’s
Latest copy of Form-29


Partnership deed certified copy

NIC photocopies of all partners.
Partnership mandate for account signed by all the partners
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A letter duly signed by all the partners containing the operating instructions of the
account also has to be taken.


Copy of rules/ by-laws

Copy of registration (if applicable)
List of Executive member management committee/management board
etc Certified copy of Resolution
NIC of all members of the management body

Sole Proprietorship / Individual:

NIC/ Passport photocopy

Letter from Proprietor confirming “sole proprietorship”

Term and Conditions Governing the Account


(I) Each Account will be allotted a distinctive number, which should be quoted in all
correspondence with the bank relating to the account.
(II) The account should be subject to the applicable laws of Pakistan and prevailing
rules, regulations and directives of the State Bank of Pakistan.

Minimum Balance
34 | P a g e
Subject to the regulations of State Bank of Pakistan, the customer should maintain a
minimum credit balance in the account as may be prescribed by Bank from time to time.
The bank reserves the right to close the account after giving 14 days’ notice if the
customer fails to maintain the required minimum balance in the account.


(I) All deposits in the account should be accompanied by pay in slip showing the correct
title & account number to be credited.
(II) If the amount indicated on the deposit slip differs from that “later cash account” the
banks count shall be final and conclusive.
(III) Proceeds of a cheque deposited in the account for collection will be value dated after
receipt of the proceeds thereof.
(IV) In receiving cheque/instruments the bank acts only a collective agent of the
customer & assumes no responsibility for the realization of such cheques/instruments.
The bank may refuse to accept such cheques/instruments drawn in favor of third party.
The customer shall not draw against unclear cheques/instruments though credited.
(V) The bank shall recover return cheque charges at the rate fixed by the bank by
dividing the account on every cheque deposited for collection and return unpaid.
(VI) The bank is realizes the services of other bank, customer do so for account and the
sole risk of the customer. The bank assumes no liability should the instruction is
transmits is not carried by such banks.
(VII) The bank shall not be responsible for the delay or loss in transit of any cheque not
for any act, omission, neglect, default, and failure of any correspondent bank, agent or
sub agent or for any reason beyond the control of the bank.


(I) Withdrawals from the account shall only be made by using cheque books supplied
by the bank at the request of the customer. The bank reserves the right to withdraw
cheque book facility without notice if in the opinion of the bank the account is not being
maintained or operated in accordance with these terms and conditions or for any other

35 | P a g e
(II) The customer shall exercise care when drawing cheques and agree that cheques
will not be drawn in a manner which may enable a cheque to be altered in a manner
which is not readily detectable.
(III) The customer shall ensure safe keeping of the cheque book and shall not allow
access to the cheque book to any unauthorized person. In case of loss or theft of the
chequebook or any cheque leaf, the customer will inform the bank, if he will not then he
will be himself responsible for any loss.

Minor’s Account

In respect of an account opened in the name of a minor, the bank shall be entitled to act
on the instructions received from the guardian name on the account opening form,
irrespective of whether the minor account holder continues to be a minor or not unless
the bank receives written instructions from the guardian or a notice to the contrary from
an appropriate authority.

Statement of Account

The bank shall quarterly or at such other interval as it may deem fit send to the
customer statement of account and the customer shall check the entries made therein. In
case of any discrepancy or error in the statement of account, the customer will notify the
bank within 14 days of receipt of the statement.

Hold Mail Facility

Upon written request of the customer, the bank may in its sole discretion provide a hold
mail facility. The customer hereby waives his right to question any detail appearing in the
hold mail communication or statement of account irrespective of their actual receipt. The
customer accepts all risks and responsibilities in this regard.

Stop Payment Instructions

The bank may, in its absolute discretion, accept stop payment instructions from customer
if a cheque is reported lost or stolen, provided the necessary details of the lost/stolen
cheque given by the customer.

36 | P a g e
Death of a Customer

In case of death of individual customer, the bank will permit no withdrawal from that
account after receiving notice of customer’s death, except on production of a succession
certificate or other court order from a court of competent jurisdiction.

Now, there are some documents that are always there with the account opening forms.
These things need to be filled in by the customers efficiently and carefully. These are:

Signature Specimen Card.

Cheque Book Requisition.

The Signature specimen card basically contains information that is basically a repertoire
of information given in the account opening form, but in this card the client vividly puts his
signatures as a specimen, which are scanned and stored in an intelligent terminal for
future use and reference.

The Cheque Book requisition basically serves as an application to issue a Chequebook.

The client also fills it up and submits it along with the account opening form as a result of
which he is issued a Chequebook once his account is approved. As regards the
Chequebook one of the most important entries in a Chequebook requisition is the series
number of Cheques that correspond with the numbers of the cheques contained in the
Chequebook issued to the client

Procedure of Opening an Account

The Account Opening Form:

When a client comes to the bank, and makes a request for opening of an A/C. The officer
says that first fill up a prescribed application form. If he/she wants to open a PLS

37 | P a g e
A/C, then he/she has to fill a form according to the account.

Completion of The Form:

The name, occupation, and complete address of the person opening the account are
written in the columns are provided in the form. One signature of the person is taken on
the face of the form and one is taken on the backside. These signatures should be usual
signatures and he would operate the account with them future.


The introduction of a current account holder is accepted for the opening of either a
current account or a solving account. The introduction of saving bank account is
accepted only for saving bank accounts. The signature of the account-holder introducing
the account is obtained at the place provided for in the account opening form.

Specimen Signature Card (S. S. Card):

It is card on which specimen of applicant’s signature are taken for future

reference. Every time a cheque is presented for payment, the signature on the cheque is
verified by comparing it with S.S Card. In case of joint account two applicants can sign
on one SS card. In case of more than two joint account holders more than one SS card
are required.

Account Number:

As now a days Bank Alfalah has acquired centralized banking system where all
the branches are directly connected to Head office. When customers give all the
information about him, this information is entered into centralized data base. When this
procedure is completed, the system automatically generated the account number of that
customer. Due to this system the process of account opening becomes fast and also
there is no chance of any mistake.
The account numbers of various accounts start with the following series

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Account title Account number
Current account 01
Saving account 02
Royal profit account 029
Term deposit account 03
Car finance account 0191
Agri finance account 0141

Issuance Of Cheque book:

After opening an A/C with the bank, the A/C holder once again makes a request in
the name of bank for the issuance of a chequebook. The A/C holder mentions title of A/C,
A/C number, sign it properly and mentions the no of leaves he requires. Normally BAL
issues a chequebook having at least 25 leaves. Every chequebook also contains one
leaf that is used for another issue of a Chequebook

Bank Alfalah issues the following chequebooks

o Saving account - 25 leaves o

Current account - 50 leaves o
Current account - 25 leaves o
Foreign currency $ - 10 leaves o
Foreign currency £ - 10 leaves
Loose cheque are also issued in some cases.

Entry Of cheque book:

Before issuance of a chequebook, the employee performs certain functions. They


o Stamping every leaf with specific A/C number.

o Enters it in the chequebook issue register.
39 | P a g e
o Check whether or not a senior officer has verified the signatures, if no then first
he gets them verified.
o If the check book is of photo account then be sure that each and every leaf of
cheque book should carry photo account stamp

After entry in the manual register, the employee issues the chequebook to the A/C
holder after his/her signature on the register.

Filling Of Account Opening Forms:

For current and saving account, separate files are maintained in which the forms
are pasted or punched in numerical order and kept under lock and key in fireproof
steel or safe. This is because these forms are the basic documents of the contract
with the customer.

Maintaining the Computer Record:

o After opening of account, all information regarding the account is entered into
the computer. Currently, a program named Bank Smart is being used for this
purpose. Record of all the transactions regarding the account of a customer is
kept updated in the computer.

Procedure Followed In Order To Close An Account:

Now, coming towards the procedure for the closing of an account at Bank Alfalah, the
following steps will be followed.

The client who wishes to close an account first has to give an application, duly
signed on the pre-printed application of the bank. The client has to attach this
application with the liability form (explained below). The client can also give an
application on a plain paper, but correct signatures are very necessary.
40 | P a g e
Then it has to be made sure that if the account to be closed is a saving or
Royal Profit then the account balance before closing should be zero. In case of
these two types of accounts the bank does not take any closing charges. If a
client wishes to close a current account then the bank charges Rs.150, so at
the time of closing the balance should be Rs.150.

Along with the application to close the account client’s Chequebook is also
received from him and then it is destroyed in order to prevent any misuse in
the future.

A liability form is filled and sent to the Credit Department in order to Cheque
that the customer does not owe the bank a single penny in any regard. A debit
voucher and a credit voucher are also attached to the liability form.

When the Credit department approves that the customer does not owe any
money to the bank and the form is returned to the account opening department
then the original account opening form pasted in the ledger when the account
was opened is marked ‘account closed’ along with the date on which it is so
marked. One thing has to be taken into immediate consideration that the
account number allotted to the client (who has closed his account), after
closure of the account becomes useless and is not allotted to anyone in the

After approval of the liability form, it is sent to the Cash Department so that the
officer who scanned it in the first place could return the specimen signature
card to the account-opening department.
Once the S. S. Card is received back from the concerned official then the
liability form, the client’s application along with the specimen signature card is
pasted in the ledger right along side the original account opening form. The
form has to be pasted with the original account opening form even if the
account was opened a decade ago. In the computer as well all the entries and
records related to that particular account is permanently deleted by using the
‘close account’ option.

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Remittance Department
Remittance department comes under the category of the ‘Domestic Banking’. By
remittance we mean transfer of money from one city to another. Hence this department
deals with the transfer of money using different mode from one place to another.


One who make a remittance. He comes to the issuing or originating branch, ask for a
remittance to be made, and deposits the money to be remitted. The bank charges him for
the remittance. He may or not be the bank’s customer.

Also sometimes called the beneficiary, or the payee (the person to whom the
remittance is made/ the one who receives the payment.)

The bank that affect the remittances, through the Demand Drafts, Telegraphic
Transfer, or Mail Transfer.

Also known as the drawee branch (The branch on which the instrument is drawn. It
has to make the payment). Usually located in a different city or country.


The principal duties this department is performing are as follows

Pay Slips
Pay orders
Demand Drafts (DD)
Rupee Travelers Cheque (RTC)
42 | P a g e
Money Gram


Demand Drafts (DD) are a bill of exchange. It is an instrument in writing signed by the
banker containing an unconditional order to pay certain amount to or to the order of
certain person for payment on demand or otherwise as future determinant time. If it is
made through cheque than it is necessary that person must be account holder while in
case of cash any person can make. It consists of four copies.

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.


As the name subjects DD is made on the request of the customer (which may or may not
be the accountholder of the Bank) in favor of another customer or party in some
other city. Thus it is a mode of payment used by one customer to pay another who
must be residing in some other city.


Payment of DD can be made through all modes i.e. transfer, cash, cheque collection (all
branches in Pakistan) etc.


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No manual record of the demand draft is kept; only the record is saved in the computer
at the time of making the demand draft.


On the DD application slip enter the

Branch name draft no. (which is entered after the computer entry)
In favor of (the name of the person or party)
Drawn on (the city name and the branch code of BAL )
Amount in words as well as in figures
Commission charged is entered
Signatures of the applicant are taken
Then it is signed by the in charge remittance and the customer deposits the money
against this slip.
The DD slip is available with the attached forms.

Scrutiny Of application Form:

There should be our bank’s branch at the place where payment is desired to be
Full name of the payee should be mentioned.
Amount in words and figure should not differ.
Purchaser’s name address and telephone numbers are complete.


In the system enter into the ‘DD’ section then enter the
· Name of the person who is being favored

44 | P a g e
· Branch code at which draft will be drawn
· Bank code of that branch
· Name of the person to whom the draft is being issued
· The account no of the issues (if he/she has an account with our branch)
· The total amount of the demand draft is entered
· The commission charged is entered (computer usually perform this job

Entry of DD:

Entry in BAL GTN branch

Yellow slip

DD Payable credit

H.off debit

Entry in H.off Karachi branch

H.off debit

DD credit

Issuance Pink Slip

H.off credit

45 | P a g e
DD debit

Entry when customer will draw amount from DD

DD payable debit

Customer credit


The DD number appears at the end which is entered on the ‘demand draft application
form for record purpose.

Now press yes for the print of DD, which is in two, parts both are given to the customer.
When the computer record has been saved now the advices are made in the favor of the
bank on which DD will be drawn. The advices for BAL branches are sent directly to that
branch through mail.


Pay order is also a bank instrument a bill of exchange. The pay orders are usually used
for the payment within the city. The pay orders issued from one branch of bank can only
be drawn at the same branch, that’s why it is generally referred to as Banker’s cheque.

There is a separate slip for the pay order application. All the procedures for the pay
orders are similar to the demand drafts except the charges and the record keeping which
are given below

46 | P a g e

The record of the pay orders is kept in both the computers and manually in registers. The
computer record keeping system is similar to that of the demand drafts. Where as in
register you enter the

· Date on which the pay order is issued.

· Pay order number.
· Payee, to whom the pay order is being issued.
· Amount of pay order is entered then the officer signs it.
· Date of the payment and the remarks are taken.

Entry of issuance “pay order”

Customer debit

Pay order credit


Entry when customer get amount from “pay order”

Pay order debit

Customer credit
47 | P a g e
Following are the parties to a pay order:

i) Purchaser: Is a person, firm, company or local authority

ii) Issuing / paying branch: this issues / pays on presentation.

iii) Payee:is a person named therein.

The bank for the settlement of its own payment uses this instrument.

There are no charges for the pay slips. They are used to meet the miscellaneous
expenses of the bank. The pay slips can only be drawn on the same branch of the bank.
No manual or computer record of the pay slips is kept. Only the record of the counter file
of the slip is maintained as a record at the bank of which two signatures of the
beneficiary are taken.

On the pay slip

Enter the name of the party as ‘Messrs’
The reasons of payment i.e. repair, releases of security etc are written as ‘on account
Signs and stamp of the beneficiary are taken.

The payment of the pay slips can be made through any of clearing, transfer (same city
branches), cheque, and cash. Collection (all branches within Pakistan) the pay slips can
issue to both minors and majors. On the slip the signatures of two authorized bank
officials are must.

48 | P a g e

2017 Highlights

Profit Before Tax (Rupees in Billion)

2017 14.0

2016 13.0

2015 12.6

14.0 Bn
Profit After Tax (Rupees in Billion)
2016 8.4

2015 7.9

8.4 Bn

Capital Adequacy Ratio %

2016 13.74

2015 13.17


49 | P a g e
15.5% 0.9% Rs. 5.21

50 | P a g e
Total Assets (Rupees in Billion)
988.8 Bn 917.5


Net Advances (Rupees in Billion)


400.7 Bn 378.7

Deposits (Rupees in Billion)



653.4 Bn
Dividend per Share Price: Long-term: AA+*
share: Rs. 1.5 Rs. 42.50 Short-term: A1+*
As at 31st Dec, 2017 Upgraded in 2017
*Credit ratings by PACRA and JCR VIS
The highlights of the financial results for 2017 are as follows:

2017 2016
Financial Position Rupees in Millions
Shareholders’ Equity (before surplus) 58,545 49,185
Total Deposits* 653,406 640,944
Total Assets 988,829 917,457
Advances – net* 400,655 378,720
Investments – net* 400,733 389,093

*Current year figures do not include one overseas set up (held for sale) whereas prior year figures include the same.

2016 2017

Financial Performance Rupees in Millions

Net Interest Income and Non-markup Income 39,175 37,899

Non-markup Expenses 25,389 23,692
Profit Before Taxation 14,045 13,023
Profit After Taxation 8,367 7,900
Basic Earnings per Share – Rupees 5.21 4.93

2017 2016 2015 2014 2013 2012

Mark-up / return / interest earned Rs. Mn 56,919 57,144 61,458 55,378 43,961 46,080
Mark-up / return / interest expensed Rs. Mn 27,639 28,153 32,811 33,505 27,066 27,500
Non-Fund based income Rs. Mn 9,894 8,907 8,841 8,876 8,279 7,281
Total Income Rs. Mn 39,174 37,898 37,488 30,749 25,174 25,861
Operating Expenses Rs. Mn 25,389 23,692 22,598 20,702 17,313 15,519
Rs. Mn 13,785 14,206 14,891 10,048 7,861 10,342
Provisions / write-offs Rs. Mn (260) 1,183 2,287 1,534 1,054 3,559
Rs. Mn 14,045 13,023 12,604 8,514 6,807 6,783
Rs. Mn 8,367 7,900 7,523 5,641 4,676 4,556
Statement of Financial Position

Authorised Capital Rs. Mn 23,000 23,000 23,000 23,000 23,000 23,000

Paid up Capital Rs. Mn 16,076 15,952 15,898 15,872 13,492 13,492
Reserves Rs. Mn 18,157 15,896 14,164 12,338 7,274 5,636
Rs. Mn 24,312 17,337 12,363 9,614 7,500 6,374
Shareholders' equity Rs. Mn 58,545 49,185 42,425 37,824 28,266 25,502
Surplus on revaluation of assets - net of tax Rs. Mn 7,255 10,940 10,928 6,995 3,636 4,558
Net Assets Rs. Mn 65,800 60,124 53,353 44,819 31,902 30,060
Total Assets Rs. Mn 988,829 917,456 902,608 743,128 611,427 536,569
Earning Assets Rs. Mn 873,197 818,135 809,511 664,925 523,420 465,870
Gross Advances Rs. Mn 417,182 395,863 350,351 311,507 276,039 252,173
Advances - net of Provision Rs. Mn 400,655 378,720 334,159 297,256 262,992 237,760
Non Performing Loans Rs. Mn 17,579 19,019 18,455 19,412 17,947 22,182
Investments - at Cost Rs. Mn 398,189 381,458 419,329 324,336 225,035 193,473
Investments - Net Rs. Mn 400,733 389,093 423,100 324,319 219,690 189,487
Total Liabilities Rs. Mn 923,029 857,332 849,254 698,309 579,526 506,509
Deposits & Other Accounts Rs. Mn 653,406 640,944 640,189 605,963 525,526 457,044
Borrowings Rs. Mn 206,224 178,311 172,393 55,233 23,115 21,228
% 24.68 22.79 20.51 15.37 15.48 14.72

Gross Yield on Average Earning Assets % 6.73 7.02 8.34 9.32 8.89 10.62
Gross Spread % 51.44 50.73 46.61 39.50 38.43 40.32
Non Interest income to total income % 14.81 13.49 12.58 13.81 15.85 13.65
Return on equity (ROE) % 15.46 17.35 19.14 18.86 18.04 19.46
Return on average assets (ROA) % 0.88 0.89 0.95 0.85 0.83 0.92
Cost to income ratio % 64.81 62.51 60.28 67.32 68.77 60.01
Investment Ratios:

Earnings per share Rs 5.21 4.93 4.73 4.09 3.41 3.38

Diluted Earnings per share Rs 5.19 4.93 4.73 4.09 3.41 3.38
Breakup value per share (excl. surplus on rev. of assets) Rs 36.42 30.83 26.69 23.83 20.95 18.90
Net assets per share Rs 40.93 37.69 33.56 28.24 23.65 22.28
Market Ratios

Cash Dividend % 15 - 10 20 20 20
Dividend Yield ratio ( based on cash dividend) % 3.53 - 3.47 5.73 7.40 11.89
Dividend Payout ratio % - - 21.14 48.90 58.65 59.17
Price to book value ratio Times 1.00 1.01 0.86 1.24 1.14 0.76
Price to earning ratio Times 7.00 7.65 6.09 8.53 7.93 4.98
Dividend cover ratio Times - - 4.73 2.05 1.71 1.69
Share Information

Market value per share - Dec 31 (Closing Rate) Rs. 42.50 37.96 28.82 34.88 27.04 16.82
High - during the year Rs. 47.24 38.15 35.05 35.10 28.39 19.12
Low - during the year Rs. 36.03 23.70 23.82 24.91 14.75 11.14
Market Capitalisation Rs. Mn 68,323 60,554 45,818 55,362 36,482 22,693
No. of Shares outstanding 1,608 1,595 1,590 1,587 1,349 1,349
Assets Quality and Liquidity Ratios 2017 2016 2015 2014 2013 2012

Gross Advances to Deposits ratio % 63.85 61.76 54.73 51.41 52.53 55.17
Net Advances to Deposits ratio % 61.32 59.09 52.20 49.06 50.04 52.02
Net Investments to Deposits ratio % 61.33 60.71 66.09 53.52 41.80 41.46
Weighted Average Cost of Deposits % 2.59 2.91 3.76 4.91 4.64 5.43
NPLs to Gross Advances ratio % 4.21 4.80 5.27 6.23 6.50 8.80
% 89.22 86.06 83.73 70.07 69.32 62.54
Earnings assets to total assets ratio % 88.31 89.17 89.69 89.48 85.61 86.82
Deposits to shareholders equity Times 11.16 13.03 15.09 16.02 18.59 17.92
Assets to Equity Times 16.89 18.65 21.28 19.65 21.63 21.04
Capital Adequacy

Tier 1 Capital Rs. Mn 53,260 42,550 36,850 33,399 25,251 23,813

Total Eligible Capital Rs. Mn 65,350 56,902 50,957 44,490 36,085 35,499
Risk Weighted Assets (RWA) Rs. Mn 475,713 431,628 384,122 348,833 299,297 281,662
Tier 1 to RWA % 11.20 9.86 9.59 9.57 8.44 8.45
RWA to Total Assets % 48.11 47.05 42.56 46.94 48.95 52.49
Capital Adequacy Ratio % 13.74 13.17 13.27 12.75 12.06 12.60
Cash Flow Summary

Cash and cash equivalents at the beginning of

the year Rs. Mn 88,751 93,596 65,880 97,880 85,556 69,927
Rs. Mn 32,032 (29,355) 103,243 51,772 44,162 46,194
Rs. Mn (22,993) 27,665 (72,611) (87,293) (30,172) (31,306)
Exchange difference on translation of the net Rs. Mn (3,137) (3,166) (3,127) 3,925 (2,368) 115

investment in foreign branches Rs. Mn 493 11 211 (404) 702 625

Increase in cash and cash equivalents Rs. Mn 6,395 (4,845) 27,716 (32,000) 12,324 15,629
Cash and cash equivalents at the end of the year Rs. Mn 95,146 88,751 93,596 65,880 97,880 85,556
DuPont Analysis

Net Operating Margin % 12.52 11.96 10.70 8.78 8.95 8.54

Asset Utilization % 7.05 7.43 8.88 9.69 9.20 10.77
Return on Assets % 0.88 0.89 0.95 0.85 0.83 0.92
Leverage Ratio / Equity Multiplier Times 17.51 19.51 20.15 22.19 21.73 21.15
Return on Equity % 15.46 17.35 19.14 18.86 18.04 19.46

Imports - Volume Rs. Mn 509,036 415,187 400,879 374,901 370,556 322,633

Exports - Volume Rs. Mn 194,993 199,230 211,785 202,369 212,871 192,132

No of Branches 638 639 653 648 574 471

No of Permanent Employees 7,698 7,615 7,565 7,509 6,853 6,666
Review of Six Years’ Performance

Statement of Financial Position last six years, the investment base (at cost) of
Total Assets the Bank has grown from Rs. 193.473 billion in
The asset base of the Bank has grown 2012 to Rs. 398.189 billion at end 2017. Post
remarkably over the last 6 years, from Rs. 2012, no significant impairment charge has
536.568 billion at December 2012 to Rs. been considered against investment, which is
988.829 billion at December 2017 – a CAGR of indicative of the quality of our investment book.
13.01 percent. Key contributions to the increase Deposits
have been through investments and advances, The deposit base of the Bank has continued to
which are detailed below. Our strategy over the grow over the last six years, which has
years has been to manage the asset mix in a supported the balance sheet growth indicated
way that maximises returns to stakeholders. above. Total Deposits have increased from
Rs.457.044 billion in 2012 to Rs.653.406 billion
Advances in 2017. The Bank’s CASA percentage at
The Bank’s ADR ratio continues to remain one of December 2017 stands at 77.1 percent. Over the
the highest in the industry. At December 2017, years, the Bank’s high cost deposits have
the Bank’s Gross ADR stands at 63.8 percent, strategically been tapered off, which along with
the reduction in minimum rates resulted in the
and has been consistently above the industry
Bank’s cost of deposits coming down from 5.43
average over the last six years. Over the period, percent in 2012 to 2.60 percent in 2017. The
the Bank’s Gross Advances grew at a CAGR of Bank enjoys a diversified product suite, with
10.59 percent. The Bank has continued to products catered to meet varying customer
strengthen its risk management framework over needs. Our focus remains on maintaining service
the years and with full automation under the belt, excellence, and providing adequate returns to
the credit approval processes have been refined our depositors together with transactional
to make decision-making effective and client- convenience through our Digital Banking and
centric. Alternate Delivery Channels.
62.54 percent in 2012 to 89.22 percent in
Non-performing Loans
2017. Investments
Owing to our branch-led model and robust credit
underwriting criteria, the Bank has consistently had Our investments portfolio has grown over the
one of the lowest infection ratios amongst top-tier years. In line with the overall industry trend that
banks, while our growth trajectory in advances has prevailed over the last few years, investments
been maintained. Our infection ratio has witnessed
were made predominantly in high yielding
a significant drop, from 8.8 percent in 2012 to 4.2
percent in 2017 - a testimony to our focus on Government Securities. With a CAGR of 15.53
maintaining asset quality. The Bank’s dedicated percent over the
Special Assets Management Group has been able
to facilitate significant recoveries over the years.
As a result, our NPLs have been reduced from a
peak level of Rs. 22.182 billion in 2012 to Rs.
17.579 billion at end 2017. Most importantly, the
Bank’s coverage ratio stands significantly improved
The paid-up capital of the Bank has grown from
Rs. 13.492 billion in 2012 to Rs. 16.076 billion in
2017. In 2014, IFC acquired a stake of 15
percent in the Bank, which represented a key
strategic alliance in the Bank’s history. This
alliance has continued to bring in synergies in
technology, human resource and trade
Furthermore, the Bank’s first-ever Employee
Stock Option scheme successfully ran from 2014
to 2016, in which options were granted to certain
key executives and employees as approved by
the Board Compensation Committee. Under the
scheme, selected employees granted with
options are eligible to exercise the same over the
defined exercise periods, and subscribe for new
shares (without rights) at an agreed discount. Till
December 2017, 20.329 million additional shares
have been subscribed by the employees who
have exercised their options, and the final vesting
period under the scheme shall end in 2019.
Following the Bank’s fifth, Quoted, Unsecured,
Rated and Listed TFC issue in the year 2013,
the Bank is in process of issuing its first ever
additional Tier-1 Capital in the form of listed,
perpetual, unsecured, subordinated, non-
to our technology platform, cross-sell initiatives,
and contingent convertible debt instruments,
branch transformation programmes, have helped
subject to all regulatory approvals. The Pre-IPO
the Bank deliver further transactional
of Rs. 6.3 billion of the proposed issue has been
successfully closed in January 2018. The convenience to its customers, and have
proceeds from the issue will contribute towards facilitated contribution from non-fund based
the bank’s additional Tier-1 capital and are income.
intended to be utilised towards enhancement of Operating Expenses
the bank’s business operations. Over the years, the Bank has seen a significant
Dividends transformation. More than 150 branches have
Over the years, the Bank has had a consistent been opened over the period from 2012 to 2017.
dividend payout stream, however, for 2015 and The overall growth in administrative costs has
2016, profit retention was also focused to increase primarily been on account of costs attributable to
the Bank’s risk absorption capacity, and in turn additional branches under the Bank’s expansion
facilitate greater returns over the medium to long plan, rising rentals and utility costs, and
term. The Bank’s Capital Adequacy Ratio is significant IT costs relating to infrastructural
currently above the requirement (including capital improvements to the core banking system and
conservation buffer). The Board has the overall technological platform. However, the
recommended a payout of 15 percent as final Bank has kept a check on these factors, and
Dividend for the year 2017. strict cost discipline measures were introduced
Profit and Loss Account with a focus on improving the cost to income
Income ratio. Centralisation of various expenses and
The composition of markup income saw a shift in regular revisits to expenditure approval
recent years on the back of concentration shift in authorities were undertaken to keep costs in
the Bank’s earning asset base, as referred to check. Non-recurring items continue to be
above. The contribution from markup income tracked separately.
earned on advances has reduced from 54.3 The year 2017 witnessed certain restructuring
percent in 2012 to 49.7 percent in 2017 while costs due to organisational changes. Going
markup income from investments has increased forward, the management intends to further
to 45.6 percent (2012: 42.6 percent). A bring in cost savings through cost
consistently low interest rate regime, and rationalisation measures and a greater
regulatory revisions covering minimum deposit discipline over spending.
rates has kept the sectors net interest margins Bank’s Significant
under pressure. The Bank’s Balance Sheet Resources Deposits
growth has been managed in a way to
Deposits remain the core resource for any
compensate for declining yields through
commercial banking unit. Core Deposits
volumetric growth, with a view to maximise
comprise of current accounts and savings
accounts (CASA). Deposits, like any other
Contributions from non-fund income during the source, have an attached cost - which include
last six years have supported bottom line competitive returns to depositors, remuneration
profitability. Core fee, commission income, for deposit gathering teams and additional
foreign exchange income, have all indicated services to facilitate the customers. The Banks
CASA mix remains healthy, and the behavioural
growth, while capital gains on both capital and
maturity profiling appears adequate.
money market fronts have supplemented the
NFI. Over the course of the years, key changes
of technology into the banking sector has
Capital Employed
witnessed significant breakthroughs like
Shareholders’ Equity represents capital paperless operations, branchless banking
commitments of shareholders and investors. through digital channels and on the go ‘single-
Such funding constitutes of diversified sources platform but multi-purpose solutions’. Bank
and types, each entitling investors with unique Alfalah’s vision to be the only ‘Real Digital Bank
in Pakistan’ has seen us deploy cutting-edge
income distribution, liquidation and voting
technology to equip our customers with end to
privileges. Several regulatory ratios and
end solutions.
requirements such as CAR are based on the
Capital Structure and Ratios
shareholder’s capital. Equity capital, being an
The capital structure is a key driver of exposure
expensive source is raised in case of strategic
limits available to the entity under applicable
decisions like expansion, acquisitions and Prudential Regulations. Bank Alfalah’s planned
mergers, and in some cases to restore the capital structure is designed to meet regulatory
capital position of an entity. On the Debt side, and market expectations. Our targeted capital
the principal component consists of Long-Term structure enables us to invest in and grow our
business, satisfy our customers' financial needs
Debt. Typical debt instruments include Term
in varying environments, access markets, and
Finance Certificates repayable over a defined maintain flexibility to return capital to our
term. The Bank has successfully issued five shareholders. Our targeted capital structure
Term Finance Certificates, of which fourth issues also considers capital levels sufficient to exceed
have matured. Basel III capital requirements.

The Bank is in process of issuing additional Tier- Capital targets are subject to change based on
various factors, including changes to the
1 Capital in the form of listed, perpetual,
regulatory capital framework and expectations
unsecured, subordinated, non-cumulative and
for large banks promulgated by bank regulatory
contingent convertible debt instruments, subject
agencies, planned capital actions, changes in
to regulatory approvals. The Pre-IPO of Rs. 6.3
our risk profile and other factors.
billion has been successfully closed in January
Quality of the capital is evident from the Bank’s
2018. Common Equity Tier- 1 (CET1) to total risk
Human Capital weighted assets ratio which, at 11.20 percent at
2017 end, is in excess of the requirement of 6
Bank Alfalah’s emphasis has always been on
percent. The Bank has an ample cushion in its
the quality of our human capital. Our strength capital base to meet the Capital Conservation
lies in our people. We have a sound and Buffer (CCB) of 2.5 percent of the total RWA, to
seasoned management team, capable of be maintained in the form of Capital Equity Tier 1
by the year end 2019.
delivering results, by inspiring our employees to
do things the right way. Learning objectives at
the organisation are clearly defined to nurture
and retain the best talent pool, and to reward
the best talent.
The Bank sees technological advancements as
vital in terms of attaining long-term growth and
sustainability. The integration

2017 2016
Value Added Rs in Mns Rs in Mns

Net Interest Income 29,281 28,991

Non Interest Income 9,894 8,907
Operating Expenses exluding Staff costs (12,718) (12,007)
depreciation, amortization and WWF
Provision against advances, Investments & Others 280 (1,073)

Value added available for distribution 26,737 24,819

Distribution of Value Added % %

To Employees

10,157 38% 9,603 39%

To Government

Worker Welfare Fund 259 1% 113 0%

Income Tax 5,678 21% 5,123 21%
To providers of capital 5,937 22% 5,236 21%

Cash dividends to shareholders - 0% - 0%

Bonus Shares - 0% - 0%
To Society - 0% - 0%

Donations 10 0.04% 32 0.13%

To Expansion and growth

Depreciation 1,820 7% 1,691 7%

Amortization 446 2% 357 1%
Retained Earnings 8,367 31% 7,900 32%
10,633 40% 9,948 40%

26,737 100% 24,819 100%

Share Price Sensitivity Analysis
Below is a list of some key factors that can influence the share price of Bank
Alfalah Limited. The list is not exhaustive by any means and intends to cover the
major areas:
Regulatory/Policy Changes
Any regulatory or policy changes that directly impact the banking landscape and cost
and/or revenue drivers are likely to exert the biggest influence on the Bank’s stock
price. For example, a change in the discount rate which directly impacts yields on
government securities and advances, and to a certain extent on funding costs can
materially impact profitability and hence the share price as well.
Similarly any regulatory changes such as a change in the minimum rate of deposit
payable on certain types of deposits can have a significant impact on the cost of
funds, profitability and most likely the stock price.
Investor and Market Sentiment
While difficult to quantify in numeric terms, but a change in sentiments regarding the
investment climate in general or the stock market in particular can have an impact on
the Bank’s stock price, even if there is no fundamental development or change in the
Bank’s investment or business case.
Change in Macro Environment
Any changes in the macro environment, such as political, law and order, inflation and/or
currency pressures could see the stock price of the Bank move alongside as the market
preempts the developments and extrapolates the impact of these developments on
policy/regulatory changes in the Bank’s share price. Hence, there could be a situation
where the stock price of the Bank moves well in advance of the regulatory/policy change
actually happening.
Share Price Information
High Price Rs. 47.24
Low Price Rs. 36.03
Average Volume 2,029,379
No. of Trading Days 248
Days Traded 248
% of Days Traded 100%


The bank is operating through 152 Islamic banking branches as at December 31, 2017 (December 31, 2016: 153 branches).

BALANCE SHEET Note 2017 2016

ASSETS (Rupees in '000)

Cash and balances with treasury banks 10,165,273 10,191,942

Balances with and due from nancial institutions 372,714 1,672,323
Lendings to nancial institutions 30,891,460 27,997,227
Investments - net 37,914,191 38,670,241
Islamic Financing and Related Assets A-II.1 & A-II.2 55,605,166 56,720,714
Fixed assets 2,075,079 2,128,031
Other assets 2,350,828 2,317,048
LIABILITIES 139,374,711 139,697,526

Bills payable 2,686,172 1,862,656

Borrowings 3,793,802 3,833,240
Deposits and other accounts
- Current Accounts 45,508,163 43,990,411
- Saving Accounts 51,057,687 53,988,674
- Term Deposits 16,452,472 18,038,671
- Others 840,741 428,262
Deposits from Financial Institutions - Remunerative deposits 743,414 1,113,125
Deposits from Financial Institutions - Non-remunerative deposits 70,000 1,867
Other liabilities 6,072,680 6,302,957
NET ASSETS 127,225,131 129,559,863
12,149,580 10,137,663

Islamic banking fund 1,800,000 1,800,000

Exchange equalisation reserve - 878
Unappropriated / Unremitted pro t (Head Of ce Current Account) 9,165,580 6,626,936
10,965,580 8,427,814
Surplus on revaluation of assets - net of tax 1,184,000 1,709,849
12,149,580 10,137,663
Remuneration to Shariah Advisor / Board 6,720 6,720


Opening balance 148,314 176,557

Additions during the year
Received from customers on delayed payments & others 19,463 40,182
Non-shariah compliant income 15,551 9,524
Pro t on charity saving account 3,428 6,958
Distribution of charity 38,442 56,664

Welfare Works (78,655) (38,357)

Health (15,816) (38,850)
Education (38,032) (7,700)
Payments / Utilization during the year (132,503) (84,907)
Closing balance 54,253 148,314



(Rupees in '000)
Income / return earned 7,815,773 7,332,961

Income / return expensed 3,166,568 3,455,881

Net income / return earned after depreciation 4,649,205 3,877,080
Provisions against loans and advances - net
87,597 216,554
(Reversal) / provision for diminution in value of investments - net (11,175) 2,114
Bad debts written off directly - -
Net income / return earned after provisions 76,422 218,668
4,572,783 3,658,412
Other income

Fee, commission and brokerage income 539,028 382,356

Dividend income - 45,320
Income from dealing in foreign currencies 171,509 137,361
Gain on sale of securities - net 207,477 2,054
Unrealised gain / (loss) on revaluation of investment classi ed as held for trading - -
Other income 37,974 29,849
Total other income 955,988 596,940
Other expenses 5,528,771 4,255,352

Administrative expenses 2,936,278 3,091,472

Provision against off-balance sheet obligations - 304
Provision against other assets 1,251
Other charges 1,109 1,088
Total other expenses 2,938,638 3,092,864
Pro t before taxation
2,590,133 1,162,488



Pro t before taxation 2,590,133 1,162,488

Less: Dividend income - (45,320)
Adjustments 2,590,133 1,117,168

Depreciation 233,816 246,052

Amortization 972 939
Reversal of provision against loans and advances - net 87,597 216,554
(Reversal) / provision for diminution in value of investments - net (11, 175) 2,114
Provision against off-balance sheet obligations - 304
Provision against other assets 1,251 -
Loss / (gain) on sale of xed assets - net 9,044 (5,084)
321,505 460,879
(Increase) / decrease in operating assets 2,911,638 1,578,047

Held for trading securities - -

Lendings to nancial institutions (2,894,233) (15,386,776)
Islamic nancing and related assets 1,027,951 (14,881,119)
Others assets (10,186) 339,560
Increase/ (decrease) in operating liabilities (1,876,468) (29,928,335)

Bills payable 823,516 433,936

Borrowings (39,438) (6,151,397)
Deposits and other accounts (2,888,533) 12,153,728
Other liabilities (230,277) (520)
(2,334,732) 6,435,747
(1,299,562) (21,914,541)
Taxes paid (81,117) 7,955
Net cash ows generated from operating activities (1,380,679) (21,906,586)

Net investments in available for sale securities 246,696 (5,032,551)

Net investment in held to maturity securities (250,537) 26,386,063
Disposal of investment in associated company 250,000 -
Dividend received - 45,320
Net investments in xed assets (181,836) (89,116)
Proceeds from sale of xed assets (9,044) 5,084
Net cash ows used in investing activities 55,279 21,314,800
Adjustment of Exchange translation reserve (878) 934

Decrease in cash and cash equivalents (1,326,278) (590,852)

Cash and cash equivalents at beginning of the period 11,864,265 12,455,117
Cash and cash equivalents at end of the period 10,537,987 11,864,265

Key External Forces:

External forces can be divided into four broad categories:

Social, cultural, demographic, and

environmental Forces
Political, governmental, and legal forces
Economic forces
Technological forces, and

Competitive forces

While performing an external audit, our company gathered the competitive

intelligence and information about social, cultural, demographic, economic, political,
and technological forces as well. The overall motive was to consider and evaluate
the Opportunities and Threats for the company
Following can be some of the key opportunities and threats for Bank Alfalah.


The opportunities on which bank Alfalah can capitalize upon are delineated as under.

1) Extension of Local Branch Network

One of the biggest opportunities for bank Alfalah Limited is to extend its branch
network in Pakistan. The essential pre-requisites for a vast branch network are all
there; sponsors have the money, managerial expertise are available, and last but not
the least any bank with ‘Bank Alfalah Limited written in blue at its front is accepted in
the market’.
2) Establishing Foreign Branch Network

Going global could have been termed as a fad a few years ago, but now for those
business organizations that want to survive and thrive globalization has become the
order of the day. In order to increase the bottom line figure, it really is crucial. But the
senior management would start implementing this course of action once they feel
that they have got a strong hold in Pakistan.

3) Capitalizing On Information Technology

The information revolution has certainly made its inroads in almost all human
functions. If Bank Alfalah Limited’s senior management and the IT division make a
concerted effort to make best possible use of this miracle of human mind it would
enable Bank Alfalah Limited to harness unexplored benefits of immense magnitude.

4) Unexplored Market of Multinational Corporations

Unfortunately in spite of unprecedented image building efforts, Bank Alfalah

Limited still is an unattractive bank for big multi nationals functioning in Pakistan. If
the management is able to develop a strong relationship with such MNC’s then it
would open doors of huge and unimaginable opportunities for Bank Alfalah Limited. If
even a single MNC becomes a corporate client of Bank Alfalah Limited i.e. it deposits
its revenue with Bank Alfalah Limited, pays its salaries through Bank Alfalah Limited,
does trade dealings through Bank Alfalah Limited, and avails credit facilities offered
by Bank Alfalah Limited, it would make a world of difference to Bank Alfalah Limited.

5) Customers are more willing

Muslims are more consciously differentiate the Islamic-base banking from

interest-base banking. That is why there is large caution of expansion.


The predominant threats Bank Alfalah is facing at the moment are discussed in
the following lines.
1) Private Sector Banks

Bank Alfalah Limited is at present facing really tough competition from not only
the first line international banks (ABN AMRO, Standard Chartered, Citi Bank) but is
also having a neck to neck race with other privatized banks such as Askari
Commercial Bank Limited, Union Bank, Prime Commercial Bank, Faysal Bank
Limited, Bank Al-Habib Ltd etc. All the new schemes launched by these banks and
their plans to expand branch networks are a real threat for Bank Alfalah Limited.

2) New Trade Polices

Introduction of new trade policies and laws are also been a source of threats to
the organization due to the imposition of new rules and terrifies, previous maintained
regulations have to be amended.

3) Network Expansion By Foreign Banks

Foreign banks have a lot of plus points as compared to Pakistani banks (state
owned and private); they have better products, better and personalized service,
desirable interest rates, foreign branch network, but they definitely lack in local
branch network (in Pakistan). Literary no foreign bank has been able to expand its
network to far-fetched places of Pakistan. Pakistani banks (private banks in general
and state owned banks in particular) are spread all over Pakistan. This is an
intangible asset for Pakistani banks. But if any of the foreign banks expands it
network, backed by their traditional powerful service, then it might prove to be the
start of downfall for Bank Alfalah Limited, unless and until Bank Alfalah Limited raises
its level of service and product feasibility to the international standards.

4) If Pakistani Banks (Especially State Owned Banks), Backed By Huge

Network Improve the Service They Give And Their Employee Skill Set

State owned banks like National Bank of Pakistan and Habib Bank Limited have
huge networks, they have the experience, but the only set back they have is below
par service and lack of motivation amongst the employees. If their corporate strategy
is altered, and the managerial policy is revitalized, enabling them to improve upon
the service they give and enabling them to convert their work force into human
capital then such financial institutions backed up by their huge networks pose a
potential threat to Bank Alfalah Limited. So, Bank Alfalah Limited should endeavor to
expand their branch network as efficiently as possible and as soon as possible.

5) Terrorist Image of the Country

After the 9 / 11 incident every kind of transaction that uses to take place with the
outside world has assumed a different mode. The trade finance transactions are the
bread and butter for the commercial bank, were also hampered by that terrorist
attack on 11th of September i.e. the magnitude of orders the exporters were
receiving decreased by a great deal, but as far as our image in the international
community is concerned there is still a considerable room for improvement. If this
situation further aggravates rather than improving, the trade finance business would
really be hampered, and one of the major earning avenues for Bank Alfalah Limited
will loose its footings. This fact poses a real threat to the sanctity of Bank Alfalah

6) Inconsistency in Government Policies

This is a phenomenon that could hamper smooth functioning of any organization

working in a particular country. Although the sponsors of Bank Alfalah Limited --- Al-
Nahayan Family --- are really committed to invest more and more in the country but
still any drastic change in either the economic policies like increase in taxation rates,
or any change in the foreign policy, which could hurt Pakistan’s image could also
shake the investor confidence and also could lead to a decrease in the repute of the
entire banking sector of Pakistan.


The predominant strengths of Bank Alfalah Limited are

1) Humble Management

The senior management of Bank Alfalah Limited is considerably humble. Their

humility is an integral part of the organizational culture of the bank. The modern
management techniques have discarded the bureaucratic style of management in
which employees were treated as servants if not as slaves. In the contemporary
business world employees are said to be the biggest and the most crucial assets of a
business concern, specifically if we are talking about a service industry and this is
precisely the management policy Bank Alfalah Limited follows. The humility of the
management serves as a big morale booster and encouragement catalyst for all
employees in general and new inductees in particular.

2) Strength And Commitment Of Sponsors

Bank Alfalah Limited is a project of Al-Nahayan family, which is a renowned

Abu Dhabi based investor family. The first project of this particular family was Bank
of Credit and Commerce International (which later on became on of the most
renowned banks of the Muslim world). BCCI was acquired by Habib Bank Limited (a
nationalized bank) and as a result BCCI became Habib Credit and Exchange Bank
(H.C.E.B). The bank functioned under this particular name for six years and then Al-
Nahayan family bought 70% of its shares from Habib Bank Limited and renamed the
institute as Bank Alfalah Limited. Thus in real terms the same family reinvested in
their lost project and tried to rejuvenate their brainchild. This reinvestment shows the
investor’s trust, commitment, and perseverance to transform Bank Alfalah Limited
into one of the strongest financial houses of Pakistan. The “Al-Nahayan” family is a
royal family and this fact further adds to the bank’s inherent strength.

3) ‘Kaizan’

Kaizan is a process of continuous improvement in production and every aspect of

value added (Japanese). In a very short time span the management of Bank Alfalah
Limited has been able to develop its image in a very effective and efficient manner.
Through the laborious efforts of the top management and the employees, the entire
organization as a whole has been able to continuously add its prestige as a reliable,
service oriented, and flourishing financial institution. When we compare the image of
Habib Credit and Exchange Bank with that of Bank Alfalah Limited we find a world of
difference, and when we compare the image of Bank Alfalah Limited at its inception
with its present image we find an even greater difference. This fact proves the thesis
that there has been continuous value addition. The number of individuals and
corporate entities that feel comfortable while dealing with Bank Alfalah Limited is
increasing on a daily basis.

4) Vastly Experienced Management

The people who occupy the top positions in Bank Alfalah’s management
hierarchy are certainly no mugs at what they do. Rather they are as capable and as
competent as they come. Their superior management skills certainly do create a
synergistic effect when coupled with the enormous amount of trust sponsors have
put in the management. One of the most evident proofs of above average
management expertise are the deposit portfolio growth, profitability growth, and
branch network growth figures shown under the previous heading.

5) Highly Trained Human Resource Department; Transformation Of

Work Force Into Human Capital

One of the most significant catalysts, management of BAL had incorporated---

and it still is incorporating---in the organization, when H.C.E.B was transformed into
Bank Alfalah Limited, was induction of young and energetic business graduates. This
was done in order to achieve quite a few objectives; one was to raise the overall skill
level of the work force so that service provision could be improved and the second
objective was to reduce the average age of Bank Alfalah Limited’s employees so that
an overall sense of change is trickled down to the grass root level of the
organization. Bank Alfalah Limited has an excellent selection / recruitment and
training program which are undertaken at its Training and Development Center,
Human Resource Division Karachi.

6) Superior Consumer Finance

In contemporary banking consumer finance has assumed immense

significance, as it is that department of a commercial bank whose personnel directly
and extensively deal with the client body. One of the most predominant sub
departments of consumer finance is Alfalah Car Finance. The customer interface is
greater in the consumer finance department, and the diligent staff of Bank Alfalah
limited enriched with its superior service and relationship skills attracts / persuades
these clients to develop relationship with Bank Alfalah Limited in the arena of
corporate banking as well. Thus a strong consumer finance department really helps
the bank to expand its corporate banking business.

7) Crucial Location Of Branches

All the forty five branches of Bank Alfalah Limited are located at extremely
crucial and vital locations, which is indeed a very significant factor towards earning
more profit. Moreover all of the branches are very well furnished which is an integral
characteristic of a good bank in this age of consumerism.

8) Image Building Activities

Activities such as building of Alfalah Square at Liberty Lahore, the China Khan
at the Alfalah Square, Alfalah Mini Golf Course, and Shahdin Manzil (proposed main
branch, Lahore at The Mall, under construction) have really contributed a lot towards
the image building process of Bank Alfalah Limited. Such activities also make people
aware of the rejuvenation process of Bank Alfalah Limited. Such activities are
classified as strength because they involve people in the change process that
contributes a lot towards building customer loyalty.


The chief weaknesses are enlisted as under

1) Small Size

Bank Alfalah Limited is small in size; there is no doubt about this fact. Although, as I
mentioned in the strengths section, the branch network is expanding at a
phenomenal rate but still the size is not big enough as compared to some of the big
banks present in the market. Bank Alfalah limited has 189 branches in the whole of
Pakistan. A huge branch network is always an invaluable asset for any bank.
Customers simply love it when they could see another branch of their own bank at
every turn they take. Extensive branch network might reduce per branch profit but it
is very likely to raise the overall profit figure for the entire organization as a whole.

2) Lack of Research Cell

There should be a research cell in the bank, which should be engaged in

gathering the information about the present actions of its competitors

3) Uneven treatment with customers

Customers having accounts with small amounts are not given same services and
dealing given to those with high accounts.
4) Skill Set Of Employees Is Not Up To The Mark As There Is No Job

The contemporary banking all over the world has taken a unique turn i.e. they
have made job rotation an integral part of their management philosophy. Job rotation
adds value to every single employee, as he is able to perform a variety of jobs
related to banking profession. Moreover job rotation increases the human capital
pool of the organization as every one is trained in more than one sphere of banking.
Bank Alfalah Limited completely lacks this.

5) Foreign Banks Still Are A Little More Prestigious

Although Bank Alfalah Limited is continuously adding to its prestige, but still it can
not be rated as a bank with the same repute as International Banks functioning in
Pakistan, for instance ABN AMRO Bank, Citi Bank and Standard Chartered
Grindlays. Banks function as custodian of people’s possessions, act as their agents,
represent clients in trade dealings outside the country, and give different types of
guarantees and in all of these transactions repute plays a central role. And when it
comes to repute foreign banks have a little more of it as compared to Bank Alfalah

6) Bank Alfalah Limited Does Not Possess Foreign Network

Foreign banks and some local banks having international network have this edge
over Bank Alfalah Limited. Banking transactions regarding trade finance constitute a
very important part of contemporary banking and moreover they are said to be the
bread and butter for the commercial bank. Bank Alfalah Limited, for such
transactions has to rely on its correspondents and agents in other countries, and
naturally has to pay them some remuneration --- an expense banks having foreign
network do not have to incur.

7) No Advertising in Electronic Media

Bank Alfalah does embark upon occasional sales promotion activities, it also
gives advertisements in the print media, but it has never flashed an advertisement
on the television screen, which is said to be the strongest of all Medias. Some other
commercial banks are really capitalizing on the power of this media; examples are
Askari commercial bank, Muslim commercial bank, Habib Bank Limited etc.

SWOT matrix is formulated by considering and evaluating the strengths,

weaknesses, opportunities and threats of an organization. Through proper and keen
observation, the following factors are been initialized for the SWOT analysis of Bank
Alfalah Ltd.

1. Small Size

1. Humble Management 2. Lack of research cell

2. Commitment Of Sponsors 3. Disproportionate Presence Of
SWOT ANALYSIS 3. ‘Kaizan’ 4. Old Staff
Skill Set Of Employees Is Not Up

4. Phenomenal Growth In To The Mark

5. Vastly Experienced Management 5. Foreign Banks Still Are A Little
6. Highly Trained HR More Prestigious
6. Bank Does Not Possess Foreign
7. Superior Consumer Finance
8. Crucial Location Of Branches
7. No Advertising In Electronic
9. Image Building Activities


1. Expansion of branch network to 1. Increase Branch
1. Extension Of Local Branch increase profitability Communications
Network 2. Capturing the market currently Network
2. Establishing Foreign Branch held by the foreign banks 2. Product development
Network 3. More investment in the 3. Expansion to foreign countries to
projects of Multi National facilitate Expatriates in
3. Capitalizing On Information companies transmitting money
1. Private Sector Banks
2. Technology
New trade policies
1. High customer loyal y and
4. More Advertisement to promote 4
exp erience can be use to
1. Increase the marketing to the
Training of the existin
custom ers me et the

4. Unexplored Mark t Of MNC’s the employ es to increase their

3. Network Expansion By
5. More customers are willing
avoid disasters nd
increasing branch etwork
competitors claims
efficiency and effectiveness

Foreign Banks breakdown in service 2. Decrease the number of

4. Pakistani Banks Improve 2. More effective leadership to personnel to avoid the threat
Their Services increase competitive and of takeovers
5. Terrorist Image Of The relative advantage 3. Increasing employee retention
Country THREATS 3. Increased profits to be used to through the introduction of
6. Inconsistency In Government open new branches to attractive pay and benefits
Policies compete with competitors
4. Opening new branches in
business related hubs


It was an interested experience to do internship in Bank Alfalah Limited. The staff

was highly cooperated and due to their help I learned big deal about modern

I suggest that such an internship program highly integrative for the students of
commerce education so that the students should be enquired with the knowledge of
practice world .I do summarize that it would be a great help to me in selection of job
or future field of work.

Here I am putting some suggestions, which will enable the bank to compete with
other banks more effectively & efficiently.

1. It is observed that the employees were overburdened so they have to stay at

branch till late at night. In this way their efficiency is affected and hiring more
employees can reduce their work.
2. The employees should be signed jobs for specific period and then they should
shifted to other department so that they gain knowledge of other jobs.

3. Bank Alfalah Limited should properly advertise and Communicate to public

about the services provided by it, so that more customers will be attracted.The
bank’s management should give more incentives and pay scale of officers
should be revised & improved. System and operations should be more
defined and organized.IT draw backs should be improved. Administration
drawbacks should be improved by the strict control of general issues.

4. Audit should be held internally. Rather there should be an Audit Department in

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

5. Lockers, ATM, all these facilities should be provided to attract more


6. Expenditures must be control, which are very high.


If I have to express my experience of internship in Bank Alfalah IBG/ Ketchary Road

DG Khan I would briefly say:

Bank Alfalah is a good Organization in the way that anybody can join it for his/ her
long-term career. Overall working environment is comfortable. Management of
branch cares a lot of its employees and considers them as the Asset of bank.
Behavior of senior executive of bank is very polite and they are caring about the
individual’s career and their growth.

However management is very demanding about the targets but good reward at the
achievement of assigned targets is awarded.

Employees at Bank Alfalah are quite efficient. As Ketchary Road 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.

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

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

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.

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

During my internship training I gathered information regarding how a successful

bank operational aspect decorticated with the practical.

I found my internship training at Bank Alfalah Limited Ketchary Road Branch DG

Khan to be a very rewarding experience. The training was beneficial because it
helpful me to aware a real life working environment.

So far my learning is concerned; all the employees at branch were quite cooperative.
They helped me to understand the activities of a bank to possible extent. Their good
attitude gave me more confidence to learn more and to ask if I have any query in my
mind. Besides their ever going activities they never get irritant by my questioning. I
had made an honest efferent to present the working & operation of Bank Alfalah
Limited Garden Town Branch Lahore in simplest way.

I feel pleasure that I have really gained a lot during 8 weeks & enjoyed working with
experienced cooperative & intelligent staff.
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