Bal Rop

Int e rns hip Re p o rt
Chapter # 1
INTRODUCTION
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1. INTRODUCTION
Bank Alfalah Limited was incorporated on June 21st, 1997 as a public limited company
under the Companies Ordinance 1984. Its banking operations commenced from
November 1st, 1997. The bank is engaged in commercial banking and related services as
defined in the Banking companies ordinance, 1962. Since its inception as the new
identity of H.C.E.B, the management of Bank has implemented strategies and policies to
carve a distinct position for the bank in the market place.
Strengthened with the banking of the Abu Dhabi Group, and under the leadership of
Highness Sheikh Nahayan Mabarak Al-Nahayan, Minister of Education, Government of
Abu Dhabi, and a prominent member of Royal Family – the bank is energized with the
vision, envisaging the development of consumer sector in Pakistan. Driven by the
strategic goals set out by its board of management, the Bank has invested in revolutionary
technology to have an extensive range of products and services.
This facilitates BAL commitment to a culture of innovation and seeks out synergies with
clients and service providers to ensure uninterrupted services to its customers. BAL
perceives the requirements of customers and matches them with quality products and
service solutions. During the past five years, we have emerged as one of the foremost
financial institution in the region endeavoring to meet the needs of tomorrow today.
Prioritizing its product portfolio in line with consumer needs and wants the bank is
committed to develop products that give more value to its customer – be it a simple bank
account or complex financing of a major project. To make banking solutions become
accessible to more and more people, BAL has embarked upon a rapid expansion
program, aiming to provide a networking that makes its services available to any of its
Customers. With its key indicators of progress already soaring to new heights, the bank is
committed to put all its energies, resources and time to bring higher value and satisfaction
of its customers, employees and shareholders.
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1.1. HISTORY OF BANKING

It has not so far been decided as to how the word ‘Bank’ originated. Some author’s
opinion that this word is derived from the words ‘Bancus’ or Banque’ which mean a
bench. Other authorities hold the opinion that the word ‘Bank’ is derived from the
German word ‘Back’, which means ‘joint stock fund’ . It is therefore, not possible to
decide as to which of the opinion is correct, for no record is available to ascertain the
validity of any of the opinions. Banking in fact is primitive as human society, for ever
since man came to realize the importance of money as a medium of exchange; the
necessity of a controlling or regulating agency or institution was naturally felt. Perhaps it
was the Babylonians who developed banking system as early as 2000 BC. IT is evident
that the temples of Babylon were used as ‘Banks’ because of the prevalent respect and
confidence, in the clergy.
At the time of independence, there were 631 offices of scheduled banks in Pakistan, of
which 487 were located in West Pakistan alone. As a new country without resources it
was very difficult for Pakistan to run its own banking system immediately. Therefore, the
expert committee recommended that the Reserve Bank of India should continue to
function in Pakistan until 30th September 1948, so that problems of time and demand
liability. Coinage currencies, exchange etc. are settled between India and Pakistan. The
non-Muslims started transferring their funds and accounts to India. By the end of June
1948 the number of officers of scheduled banks in Pakistan declined from 631 to 225.
There were 19 foreign banks with the status of small branch offices that were engaged
solely in export of crop from Pakistan, while there were only two Pakistan institutions,
Habib Bank of Pakistan and the Australian Bank.
The customers of the bank are not satisfied with the uncertain condition of banking.
Similarly the Reserve Bank of India was not in the favor of Govt. of Pakistan. The Govt.
of Pakistan decided to establish a full-fledge central bank. Consequently the Governor-
general of Pakistan Quaid-I-Azam inaugurated the State Bank of Pakistan on 1st July
1948. Thus a landmark was made in the history of banking when the state bank of
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Pakistan assumed full control of banking and currency in Pakistan. The banking structure
in Pakistan comprises of the following types.
• State Bank of Pakistan

• Commercial Bank of Pakistan
• Saving Banks
• Cooperative Banks
• Specialized credit institutions.
Commercial banks have been the most effective immobilizers of savings and have been
providing short-term requirements of working capitals to trade, commerce and industry.
Up to 31st December 1973, there were 14 Pakistan commercial banks that functioned all
over the country and in some foreign countries through a network of branches. All these
commercial banks were nationalized in 1st January 1974, and were recognized and
merged into the following five banks:
• National Bank of Pakistan

• Allied Bank of Pakistan
• Muslim commercial bank limited
• United Bank Limited
• Habib Bank Limited
The State Bank of Pakistan is the Central bank of the country and was established on 1 st
July, 1948. The separation of East Pakistan and its repercussion in the form of economic
depression has caused a lot of difficulties to the banking system in Pakistan. The network
of bank branches now covers a very large segment of national economy. The numbers of
branches have increased appreciably. There is done reasonable growth in deposits from
the establishment of Pakistan. Besides this growth, specialized credit and financial
institutions have also developed over the years.
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The Government of Pakistan in the late 90’s introducing the need for the privatization of
state owned banks and companies. The private sector has accepted the challenge and
most of the banks are privatized today. The State Bank of Pakistan issues the shares of
these periodically. Bank employees and other common the people can also purchase these
shares and earn profit. Through out the period of banking history the banks have been
expanding rapidly and achieved the desired goal of progress.
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1.2. HISTORY OF BAL

Bank of Credit & Commerce International (BCCI) was incorporated in Luxembourg on
21st September 1972 and was in the ownership of Agha Hassan Abidi. But on July 1991
it was banned in the case of money laundering and its management was compelled to stop
its operation. At that time BCCI was operating in almost 69 countries of the world
including Pakistan. After the debacle of BCCI, the Ministry of Finance (Govt. of
Pakistan) acquired its three branches and Habib Credit & Exchange Bank (HCEB) was
incorporated on June 21, 1992 as a public limited company under the Companies
Ordinance, 1984 and commenced banking operations from November 1, 1992. After
some time period HCEB privatized on July 1997 and assumed the new identity of Bank
Alfalah Limited (BAL).
Since its inception, as the new identity of H.C.E.B after the privatization in 1997, the
management of the bank has implemented strategies and policies to carve a distinct
position for the bank in the market place.
Strengthened with the banking of the Abu Dhabi Group and driven by the strategic
goals set out by its board of management, the Bank has invested in
revolutionary technology to have an extensive range of products and services.
This facilitates our commitment to a culture of innovation and seeks out synergies
with clients and service providers to ensure uninterrupted services to its customers. We
perceive the requirements of our customers and match them with quality products and
service solutions. During the past five years, we have emerged as one of the foremost
financial institution in the region endeavoring to meet the needs of tomorrow today.
Bank Alfalah Limited was incorporated on June 21, 1992 as a public limited Companies
Ordinance 1984 and commenced banking operation from Nov 1, 1992. The bank is
growing rapidly in its equity & asset base due to strategic managerial policies and
assistance of Abu Dhabi Group.
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1.3. CORPORATE INFORMATION
COMPANY SECRETARY
Hamid Ashraf
CHIEF FINANCIAL OFFICER

Zahid Ali H. Jamall
AUDITORS
A. F. Ferguson & Co.
REGISTERED / HEAD OFFICE

B. A. Building,
I.I. Chundrigar Road,
Karachi, Pakistan.
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1.4. VISION AND MISSION STATMENT
V ision
To be the premier organization operating locally

and internationally that provides the complete
range of financial services to all segments
under one roof.
M ission
To develop and deliver the most innovative

products, manage customer experience, deliver
quality service that contributes to brand
strength, establishes a competitive advantage
and enhances profitability, thus providing value
to stakeholders of the bank.
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1.5. ORGANIZATIONAL STRUCTURE OF BAL
Chief Executive Officer
Co- Chairman
Group Heads
Regional Managers
Area Managers
Branch Managers
It’s a general hierarchy of bank which is showing about the main authorities of Bank
Alfalah Limited who are controlling its management in Pakistan. Bank’s management is
divided into different groups, regions and areas. Co-chairman is providing supervision to
group heads that are responsible for controlling the affairs of different groups. After
group heads in the hierarchy regional and area managers are working who are managing
and guiding the working of different branches of bank.
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1.6. BOARD OF DIRECTOR

The board of directors has the authority in guiding Bank affairs and in making general
policies. Some directors are the personnel of the Bank Alfalah Limited follows.
HE. Sheikh Hamdan Bin Mubarak Al Nahayan

Chairman
Mr. Abdullah Naseer Al Mr. Abdullah Khalil
Mansoori Al Mutawa
Director Director
Mr. Khalid Mana Saeed Al Mr. Ikram Ul-Majeed

Otiba Sehgal
Director Director
Mr. Nadeem Iqbal Sheikh Sirajuddin Aziz

Director Director
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Chapter # 2
PRODUCT & SERVICES
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2. PRODUCTS & SERVICES

2.1. PRODUCTS
2.1.1. CREDIT CARDS
There are two types of credit cards which are offered by bank.
• VISA CARD
• MASTER CARD
VISA CARD
This card further divided into different categories
• Platinum
• Gold/Silver
• Young Professional
• Women Exclusive
• Student Card
• Supplementary Card
• Visa Mini
Features:
• No Joining Fee
• No Annual/Renewal Fee
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• Balance Transfer Facility

• Global Acceptability
• Cash Advance Facility
• Revolving Credit
• Free Supplementary Cards
• Card Expiry Period
• 24-Hours Phone Banking Service
• Zero Loss Liability
• All Billing in Pak Rupees
• Comprehensive Travel Protection
• Statement of Account
• Fortunes
• Acceptance at 1Link ATMs
• Instant SBS Monthly Installment Plan
• Utility bill Payments
• Call and Pay Facility
• Prepaid Mobiles Top ups
• Alfalah Credit on Phone
• Credit Card bill Payment through Hilal Card
• Special Offer on Warid post paid connection
• Step By Step Plan
• Non Alfalah Card members
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2.1.2. Debit Card
Alfalah Hilal Card is the revolutionary, new-age form of cash that provides you greater
freedom, security and convenience, combined with the wide reach of Visa Network.
This single card brings just about everything within your reach. Now, you can use your
Alfalah Hilal Card for all your financial needs around the world, round the clock,
wherever Visa cards are accepted, locally and internationally.
The Alfalah Hilal Card is an International Visa Debit Card which gives you an unlimited
access to your current / savings account with a simple swipe, at millions of retail shops
and ATMs, worldwide
Features:
• No Interest
• No Minimum Income Requirement - all you need to do is open an account in any
branch of Bank Alfalah Limited
• No PIN required for Retail Transactions
• Accepted at more than 1 Million ATMs and 29 Million retail outlets around the
world
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2.2. SERVICES
2.2.1. ACCOUNTS OPENING
Account opening is one of the basic services provided by banks. Bank Alfalah brings
innovation in this field and offering variety of account options for customers. Details of
these accounts are given below.
Current Account:
• Non interest bearing checking account.
• Minimum account opening requirement of Rs. 10,000 only.
• 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 number of withdrawals and on number of deposits.
PLS Savings Account:

• Profit & Loss Sharing Saving Bank Account.
• Minimum account opening requirement of Rs. 5,000 only.
• No restriction on number of withdrawals and number of deposits.
• Profit on saving accounts is credited to the customer account on half-yearly basis.
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Royal Profit:
• Minimum Deposit requirement of Rs. 50,000 only.
• Higher returns on higher balances.
• No restriction on number of withdrawals and on number of deposits.
• Profit is credited to the customer account on monthly basis.
Basic Banking Account (BBA):

• Initial deposit for account opening is Rs. 1,000 with no minimum balance
requirement.
• Non interest bearing checking account.
• Maximum 2 deposits & 2 withdrawals through cheque is allowed.
• No restriction on ATM withdrawal.
Alfalah Kifayat:
• Any Pakistani resident over the age of 18 can open this account. This account is
for individual/joint customers only. Other customers like companies, corporate etc
are not eligible for opening of this account.
• Minimum balance requirement for opening this account is Rs. 10,000/- with a
maximum of Rs.1, 000,000/- Three debit transactions are allowed in a month
either through cheques or Debit Card/POS machine.
• Three debit transactions are allowed in a month either through cheques or Debit
Card/POS machine.
• There is no restriction on deposit transactions.
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• The bank will issue the first cheque book of 25 leaves and a Debit card.
• Profit will be calculated on monthly minimum balance basis and will be credited
in the account on quarterly basis. No profit shall be payable for a particular
month, if the minimum balance for any particular day of said month falls below
the amount of Rs. 10,000/-.
• Only one account per customer will be allowed across all branches of Bank
Alfalah.
• Account statement will be generated on half yearly basis.
Alfalah Mahana Amdan:

Alfalah Mahana Amdan is a 3 year TDR with expected rate of profit of 10% p.a. This
term deposit will provide an opportunity to individual/joint customers to enjoy higher
returns that will automatically be credited to his/her current/PLS/RP/BBA account on 1st
working day of each month.
1. Minimum placement limit is Rs. 100,000/- and maximum placement limit is
Rs.15,000,000/-
2. Expected Rate of profit is 10% Per annum (as per PLS governing rules)
3. Profit will be automatically credited on the 1st working day of each month into
customers Current/PLS/RP/BBA account
4. Free Personal Accident Insurance coverage up to the deposit amount or Rs.
1,500,000/- whichever is lower.
5. Customer can avail financing facility up to 90% of the deposit(as per banks
policy)
6. Any Pakistani resident over the age of 18 can open this account
7. Alfalah Mahana Amdan term deposit can be maintained only at any one BAL
branch with a maximum cap of Rs. 15 Million. An undertaking shall be obtained
from the customer certifying that he/she is not availing Alfalah Mahana Amdan
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Term Deposit Receipt facility from any other BAL branch.(included in AOF)
8. Alfalah Mahana Amdan TDR will be issued for three years tenure with auto
renewal facility of principal amount i.e. the facility will be renewed automatically
on maturity (i.e. 3 years)
9. Alfalah Mahana Amdan TDR will be subject to Zakat, Withholding Tax as well
as any other applicable taxes
Alfalah Education:
Alfalah Education is a Term Deposit product with No Additional Cost (NAC) education
insurance cover for account holders with school going children. Alfalah Education
Account , beside offering competitive return on TERM DEPOSIT , offers tuition fee
reimbursement of children for 15 years of schooling or up to their 20th birthday, in the
unfortunate event of the death (either through accident, illness or natural causes) of the
main breadwinner (account holder) parent.
Alfalah Education offers a competitive return on term deposit and secondly, it creates a
contingency provision for our school going youth’s education in the hapless event of the
death of any major breadwinner. The product seems rewarding in the current scenario of
increasing number of children of school going age and the general public interest in
quality education of their off springs.
Features
• Deposits can be placed in multiple of 100,000 units with maximum 3 units

allowed per depositor, i.e. a maximum deposit per customer of Rs. 300,000 across
all BAL branches.
• All 3 units can be purchased for 1 child or each for up to 3 children.
• No evidence of insurability (medical examination/health decoration) is required.
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• Maximum entry point age is 55 years (renewable up to 64th birthday)

• Benefit payment increases with age/class of the child.
• The product will be offered as a 1 year term deposit at upto 7 % profit to be paid
at maturity
• Premium cost for each deposit unit of Rs. 100,000 would be Rs. 85 per month and
borne by the bank.
• Regular Zakat and WHT would apply on the deposit.
• Monthly payments set forth will be paid directly to the mother/guardian,
regardless of the actual school fee.
• In case of joint account holders, only main breadwinner account holder would be
covered under the policy.
• Premium will be paid to ALICO by BAL on monthly basis.
Benefit Schedule
Benefit Payable: for 15 years or up to the child age 20
Monthly Premium: Rs. 85
Deposit: Rs. 100,000
Child Benefit Payable Monthly

Age* for no. of years Payment (Rs.)
5 15 2600
6 14 2800
7 13 3000
8 12 3200
9 11 3300
10 10 3600
11 9 3900
12 8 4300
13 7 4800
14 6 5400
15 5 6300
16 4 7600
17 3 10000
18 2 14600
19 1 28300
• Child age at the time of Breadwinner’s death.
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Alfalah Kamyab Karobar
• Online Current Account

• Bank Alfalah presents Alfalah Kamyab Karobar (KK) - a structured, branded,
tier-based current account that caters to your banking needs & aspirations. This
product will provide you the opportunity to enjoy free services alongside state of
the art banking facilities, linked directly to the deposit balances in your KK
account.
• Alfalah KK Account can be opened with minimum deposit requirement of Rs
25,000, while the degree of free services will be dependent on the minimum
thresholds of respective tier.
• Its will give you the power to choose from different tiers and avail banking
facility from any of the Alfalah branches – PAN Pakistan.
KK Accounts have strategically been tailored into 3 different tiers, allowing you to
choose the allotted free service to your benefit. The three tiers are as following:
• Silver
• Gold
• Platinum
The unique tier based structure ensures that you can avail smooth & cost efficient
facilities based on your current level of deposits i.e. Higher the deposit, higher the
number of free services.
Some of the Salient features include (tier-based):
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• Free Online Transactions

• Free SMS Debit Alert (Subject to availability)
• Free PO/DD
• Free Accidental Cover( Valid for up to two People)
• Free cash deposit across Pakistan
• Gold VISA debit/ATM Card with every account
Credit (SME)
BAL’s Credit Department divided into three portions,
• Corporate
• Commercial
• SME
Under SME bank deals with those customer who requires financing up to 75 Million. In
Commercial portion bank handle customer needs greater than 75 Million but not exceed
than 150 million. Corporate team deals with the customer who requires financing greater
than 150 million.
Small and Medium Enterprise (SME):

Small and Medium Enterprise (SME) means an entity, ideally not a public limited
company, which does not employ more than 250 persons (if it is manufacturing / service
concern) and 50 persons (if it is trading concern) and also fulfills the following criteria:
(a) A trading / service concern with total assets at cost excluding land and building up to
Rs 50 million.
(b) A manufacturing concern with total assets at cost excluding land and building up to
Rs 100 million.
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(c) Any concern (trading, service or manufacturing) with net sales not exceeding Rs 300
million as per latest financial statements.
Realizing its corporate social responsibility and carrying forward the image of "The
Caring Bank", Bank Alfalah started a separate department at the Head Office level in
early 2004. The SME Department was established with a mandate to foster SME finance
at BAL, explore opportunities for developing structured product programs for SMEs
BAL’s Products for SMEs:

Bank Alfalah offering following product to SME
Alfalah Karobar Finance (AKF):

Alfalah Karobar Finance is a running finance facility based on projected cash flows.
Under AKF, bank offer working capital finance to SME’s at highly competitive rates.
Bank has a team of professional credit officers who provide expert financial advice along
with customized packages to a diverse range of business clientele.
Features:
These are the some salient features of AKF:
 AKF is a running finance facility between Rs 0.50M to Rs 10.0M.
 The purpose of the AKF is financing procurement of raw material, finished goods
and receivables of SME businesses.
 Validity of the AKF shall be initially for a period of one year.
 Quarterly mark-up shall be serviceable within 15 days of its becoming due.
 Turn-around-time for the approval of AKF would be 20 working days from the
date of receipt of complete LAF along with its attachment.
 At least 25% of the AKF approved limit shall be required to be cleaned-up for
two days in six months.
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Eligibility Criteria for AKF:

SME Customers with following acceptable criteria are entertained in this product:
 Resident Pakistanis
 Individuals/ sole proprietors aged up to 60 years.
 In the same business for the last three years
 Could offer mortgage urban residential/commercial/ industrial properties (third
party collateral also allowed)
 Overall debt burden not to exceed 40% of the projected cash flows over the period
of financing.
AKF - Rates & Charges:
Loan Processing Charges under AKF

Processing fee (Up-front with LAF) Rs.2,000/-
Documentation charges Actual cost of revenue and special adhesive

stamps
Legal charges Actual & approved charges of lawyers on the
Bank’s approved panel.
Valuation charges Actual & approved charge of valuators on the
Business & Financial Appraisal Rs. 4,000/-(approx)
charges
Bank Alfalah 86 branches are designated to deal with AKF business in the entire country.
BAL claims that better pricing, quicker TAT and low processing charges are its edge.
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Alfalah Milkiat Finance (AMF):

Bank Alfalah took another step towards addressing the needs of the industry by
introducing Alfalah Milkiat Finance. AMF is aimed at strengthening the Small and
Medium Enterprises in their business premises. Alfalah Milkiat Finance (AMF) is a
unique long term financing facility offers comprehensive and flexible financing packages
from Rs. 0.5M up to Rs. 20 million for the purchase, renovation and expansion of
business premises. It is being offered keeping in mind requirements of the small business
owner who needs to take his/her business to the next level.
Features:
These are the some salient features of AMF:
 AMF 1, 2 & 3 shall be repayable in 2-12 years whereas AMF-4 shall be repaid in
2-4 years.
 Mark up shall be (SBP discount rate + 4%)
 Monthly installments will be hassle free through post dated cheques.
 AMF shall be disbursed approximately within one month after completion of
documentary requirements by you.
 The property being financed shall be mortgaged in favor of the bank.
Eligibility Criteria for AMF:

The prospective customer should meet the following acceptance criteria:
 They should be resident Pakistani(s).
 Their constitution can be individuals, sole proprietorships, partnerships, private
limited companies & public limited companies.
 Age of the prospective customer (individuals/proprietor) should not exceed 65
years at the maturity of loan.
 Customers should be operating the existing business at least for the last 3 years.
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 The security against Alfalah Milkiat Finance should be mortgage of urban

commercial/industrial property .
 Minimum equity participation of the SME shall be 30% under AMF 1 & AMF 3.
No equity participation required for AMF 2 & AMF 4.
AMF - Rates & Charges:
Loan Processing Charges under AMF

Processing fee (Up-front with Minimum of Rs.5,000/- or 0.1% of the loan amount,
LAF) whichever is higher.
Documentation charges Actual cost of revenue and special adhesive stamps.
Legal charges Actual & approved charges of lawyers on the Bank’s

approved panel.
Valuation charges Actual & approved charges of valuators on the
Business & Financial Appraisal Approx. Rs. 5,000/-
charges
2.2.2. Lease Finance

In modern days leasing has now become an economic and financial reality of primary
importance. It is the originality of the leasing techniques and its economical advantages,
which has enabled it to enter the world of industrial investment in Pakistan and on the
international scene.
Lease finance provides a significant source of funds for companies to acquire or use
assets. Leasing provides additional earning opportunities to acquire assets and to get the
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inflows simultaneously out of the operations of the same assets. The ownership of the
asset is vested with the Bank (lesser) and in return for rental payments; the client (lessee)
has full use of the asset. Being a medium to long term mode of financing, it allows the
lessee to use the funds for other profitable purposes which otherwise would have been
tied up in case of immediate payment for purchase of the asset.
Bank Alfalah recognizes the importance of leasing so it’s providing different Lease
Finance facilities to customer. BAL works closely with its existing and prospective
business partners to deliver most comprehensive and tailored leasing solutions to meet all
asset needs. BAL offers the most competitive and flexible terms & conditions for lease
concerning choice of assets, repayment, pricing, and tenor which range between 3 to 5
years commensuration with the specific requirement of the lessee, useful life of the assets
and client’s ability to repay the lease rentals.
The lease finance facilities are available for a variety of assets (imported/local)
conforming but not limited to the following categories:
 Vehicles (Private & Commercial)

 Plant, Machinery and equipment
 CNG Equipment
 Generators(Industrial & Commercial)
Eligible for Lease Facility:

Following customer can avail the lease finance facility of BAL:
 Sole Proprietors
 Partnership Firms (Registered / Un-registered)
 Private Limited Companies
 Public Limited Companies (Listed / Unlisted)
 Govt./ Semi – Govt. Organizations/ Autonomous Bodies
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Accounts
Accounts department work mainly divided into two portions.
 Daily Activity Checking
 MIS Reporting
Daily Activity Checking:

Accounts department deals and checks the entire work of the branch. All the vouchers
that have been posted by different departments check in accounts department next day to
rectify errors. In order to facilitate double-checking of all the transactions done, all
departments passes vouchers to account department. Vouchers sorted out head wise and
then match with “Activity Report” i.e. computer print of all postings of different
departments. If any mistake found then take corrective actions. Accounts department is
also responsible for proper handling and maintenance of vouchers of all departments.
MIS Reporting:
The accounts department, in the form of reports, clubs the details of various departments
together. These reports prepare daily, weekly, monthly and annually basis according to
bank requirements.
Accounts department prepares many reports, of which the most common are:
• Statement of Affairs
• Income & Expenditure
• Foreign Currency Report
• Royal Profit Report
• Outstand Receipt Report
• Subsidiary Statement
• Currency Wise Deposits Report
• Reconciliation Statements
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The accounts department also performs some other miscellaneous functions like
 Checking and distribution of all system reports
 Preparation of monthly, quarterly, semiannually, and yearly balance sheet of the

branch.
 Calculations of profits and markups on different investment schemes
 Calculation of taxes deducted on deposits, services and supply of goods.
 To calculate expense of the branch and to check that expenses should be within the
estimated budget.
 Preparing different types of reports for SBP.
 Preparing the statement of accounts as per the requirement of our head office and
SBP.
2.2.3. Home Finance
Home Finance lies under the head of Consumer Finance. Home finance department
provide loan for residential purpose to all types of customers.
These are some types of facilities provided by BAL’s Home Finance department
 Alfalah Home Purchase

 Alfalah Home Construction
 Alfalah Home Renovation
 Alfalah Home Start
 Balance Transfer Facility
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Alfalah Home Purchase:

Under this facility BAL will provide you up to 80% of the purchase price of the property,
it can be already constructed housing unit or residential plot. Payment period ranges from
3 to 20 years. With this facility, you no longer need to just dream about the home you
want for yourself and your family
Alfalah Home Construction:

You own a plot but need financing to construct a home. BAL will provide up to 100% of
the construction cost. Even if you don't have a plot, bank will provide up to 60% of the
value of the plot that you have selected to purchase. This facility payment period also
ranges from 3 to 20 years.
Alfalah Home Renovation:
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Alfalah Home Renovation facility provides you loan for maintenance and repair of your
home. Customer can apply for financing of up to Rs. 3.50 million or 40% of the surveyed
value of your home and can stretch payments for up to 10 years.
Alfalah Home Start:

The crown jewel of BAL Home Finance scheme is Home Start. Home Start is specially
designed for young professionals to own a quality asset. It provides golden opportunity
for professionals, starting career to buy an already constructed housing unit early in life.
Bank offer a moratorium of up to 3 years in principal payments, for a financing of up to
20 years. Customers service only the mark-up element initially, and principal repayment
starts after the end of moratorium period.
Bank Transfer Facility (BTF):

BTF provide an opportunity for customer to change their creditor bank. If customer takes
home loan from another bank, Alfalah has a facility to pay off the outstanding balance on
behalf of borrower to first bank and transfer his remaining outstanding balance to
Alfalah. Now customer becomes the client of BAL and is liable to pay his installments to
the bank. Under this facility customer can transfer up to 100 % of the existing finance
and stretch repayment period up to 20 years once again.
Mark-Up Rate Options:
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BAL also provided flexibility to choose mark up rates. Two options are available:
1. Variable Rate Options
2. Fixed Rate Options
1. Variable Rate Options:

1 Year KIBOR + 2% for salaried person.
1 Year KIBOR + 3% for Business People / Self-employed and Overseas Pakistani.
2. Fixed Rate Options:

14.00% per annum for salaried person.
For Self-employed Professionals & Businessmen and Overseas Pakistani (both
salaried and self-employed) 15.00% Per Annum.
Eligibility Criteria of Home Finance:

You may apply for Bank Alfalah Home Finance.
 If Customer are a Pakistani National.
 If Customer age is between 23 and 60 years at the time of application. (Subject to
maximum age of 65 at the time of maturity).
 If Customer are in continuous employment in a permanent position for the last 2
years or more.
 If Customer have existing 3 years (or more) of business or professional
experience.
 If Customer gross annual income is Rs: 240,000/ — or more [Your spouse’s
income (up to 50%) can also be combined with yours].
 If Customer require a financing requirement starting from at least Rs: 500,000/-
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 If Customer have been a Bank Alfalah borrower for past one year with clean
payment record.
Trade Finance
Bank Alfalah in a position to provide extensive Trade Finance services to its customers
due to its healthy correspondent relations with over 400 banks. BAL persistence during
the past four years allowed it to make significant inroads into the arena of correspondent
banking. Large international banks, after critically evaluating bank, agreed to enter into
relationship. BAL geographical coverage now extends to over 100 countries, which is
adequately compatible with trade flows.
BAL’s correspondents, during the year extended unqualified support, which enabled it to
undertake a healthy quantum of foreign trade business. There are many challenges ahead
for the bank, in the coming year, bank will not only continue to review its efforts on
existing correspondents to make the relationship more beneficial, but will also add more
correspondents to establish a comprehensive international networking to facilitate our
customer’s transaction as well as the Bank’s proprietary needs. Bank would like to
emphasize that correspondent arrangements do not necessarily imply the existence of
account relationship. BAL shall continue to open new accounts in various currencies
based on our trade flows and business requirements.
Trade Finance department divided into two portions
 Import
 Export
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Import:
Import section provided services to costumers who want to import raw material,
machinery and equipment to run their business. For this purpose bank offer a facility of
Letter of Credit L/C.
Letter of Credit:
A letter of credit consist of an undertaking by a bank authorized the seller to draw in
accordance with certain terms and stipulating legal forms, that all such bill will be
honored.
A letter of credit thus is a
i. Written undertaking by an importer’s bank to exporter’s bank.
ii. That it will pay or accept draft drawn upon it up to a stated amount with a
specified time.
iii. The payment will only be made to the exporter if he compliers with the terms of
credit.
Banker is issues the letter of credit normally in the response of the Performa/ Commercial
Invoice. The seller sends this invoice to the buyer and it contains seller name, product
quality, and rate, mode of shipment, and other terms and conditions.
Export:
Export portion provided three types of services/ facilities
1) Foreign Bills Purchase (FBP):

If term of payments is L/C for exported goods, then BAL provides financing against
foreign bills under FBP.
2) Foreign Documentary Bill for Collection (FDBC):
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BAL also provides services for the collection of foreign bills. In this case bank not
provides any sort of financing facility but it just plays an intermediary role in collection.
3) Refinancing:
Under this option bank provide financing facility to exporters at low mark up rate. This
facility offers on the basis of last year performance of exporter and it also available for
Indirect Exporter.
2.2.4. Foreign Currency Accounts

Foreign Currency Accounts (FCA) department not deals with foreign accounts opening
but it deals with foreign remittances. FCA operations mention below:
I. Foreign Demand Draft

II. Foreign Telegraphic Transfer
III. Credit Card Payments
IV. Money Gram
V. Collection of Foreign Currency Cheques
Foreign Demand Draft (FDD):

Simple Demand Draft is a written order drawn by one branch of a bank upon the other
branch of the same bank or upon another bank to pay certain sum of money to specified
person. FDD is same like DD but it involves foreign currency and country. BAL has
arrangements with specific banks for payment of FDD. BAL’s LDA plaza branch only
deals with outward FDD.
Requirements:
These are the some requirements to make Foreign Demand Draft (FDD)
 Customer should have foreign currency account in the branch
 Customer should present a cheque in favor of bank to FDD
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 Requisition for DD issuance

Foreign Telegraphic Transfer:
In Telegraphic Transfer funds are transferred through telephone or fax. This is a fast
mode of transferring funds. Banks deals with both Inward and Outward telegraphic
transfer.
Information Required
 Name of Beneficiary
 A/C number of Beneficiary
 Branch and Bank name of Beneficiary
 SWIFT code of Beneficiary Bank
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Chapter # 3
Departments
36
3. DEPARTMENTS
As far as Bank Alfalah Ltd is concerned, it is one of the top in all-domestic commercial
banks in Pakistan. The rapid increase in branch network shows the Bank’s performance
within seven years, which is worth considerable.
However, this branch is a small branch as compared to other branches which are in big
cities but it performs all basic banking operations which are normally performed by every
commercial bank. It has basically following departments under which it operates all
functions of bank diligently. These are mainly:
1. Account Opening Department
2. Remittances Department
3. Accounts Department
4. Cash Department
5. Car Financing Department
6. Credits Department
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3.1. ACCOUNTS OPENING DEPARTMENTS

This department is responsible for the opening and closing of accounts. In consideration
of Bank Alfalah Limited, opening and/or continuing to maintain any account, the
Account Holder/Depositor or Investor would be bound by the terms and conditions
written on the account opening form.
The first part establishes the preference regarding the type of account to be
maintained. The various choices offered in this regard are:
• Current Account
• Saving / PLS Account
• Royal Profit Account
• Term Deposit Account
• Basic Banking Account
• Alfalah Mahana Amdan Account
• Alfalah Kifayat Account
• Alfalah Education Account
• Alfalah Kamyab Karobar
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.
Completion of The Form:-
The name, occupation, and complete address of the person opening the account are
written in the columns that are provided in the form. Signatures are obtained from the
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customer where it is required. These signatures should be usual signatures and he would
operate the account with them.
Introduction:-
The introduction of a current account holder is accepted for the opening of either a
current account or a saving account. The introducer should be Account Holder. The
signature of the account-holder introducing the account is obtained at the place provided
for in the account opening form.
Specimen Signature Card, Cheques Book Requisition, Online Form:-
The signatures of the client are obtained on a specimen Signature card Cheque book
requisition and online form. These specimen signature cards are obtained in duplicate
with two signatures on each card from the customer. Every time a Cheque is received for
a payment from the client, the signature on the Cheque are verified by comparing them
with the Specimen Signature Card.
Signature Difference Form:-
The signatures of the client are obtained on a signature difference form if his / her
signatures differ from the computerized National Identity Card.
Vernacular Form:-
The signature of the customer is also obtained on the vernacular form if he / she signs in a
language other than English.
Account Number:-
When all the formalities are completed then the final approval of account has to be taken
from the Branch Manager. After obtaining approval of the branch manager an account
number is allotted to the customer all the information is entered into the computer. Then
that account number is written on the Cheques Book, Specimen Signature cards and
account opening form.
Send the form to Head Office:-
After fulfill the entire requirement and verify the form from operation manager the form
send to Head Office Karachi and make request to issue the printed Cheque book.
Issuance Of A Cheques book:-
After opening an A/C with the bank, the A/C holder receive a letter of thanks from Head
Office Karachi then after receiving this letter client come to bank and makes a request in
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the name of bank for the issuance of a Cheque book. The A/C holder mentions title of
A/C, A/C number, signs it properly. Normally BAL issues a Cheque book having 25
leaves for Saving Account and 50 leaves Cheque Book to Current Account Holder. Every
Cheque book also contains one leaf that is used for another issue of a Cheque book.
TYPES OF ACCOUNT
Accounts Of General Customers
 Minor Account
 Illiterate Person Account
 Joint Account
Accounts Of Special Customers
 Individual Account
 Proprietorship Account
 Partnership Account
 Limited Company’s Account
 Account of Club Societies and Association
 Agents Account
 Trust Account
Minor Account
The natural guardian who signs both Account Opening Form and Specimen Signature
Card can open account in the name of minor.
Title of Account:-
The title of account should clearly indicate both the names of minor as well as guardian
in the following manner:-
e.g. Imran Rafique ( minor) Muhammad Rafique (Guardian)
Special Instructions:-
The guardian will continue to operate the account even if minor attains the age of
majority.
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Documents:-
 Computerized National Identity Card of Guardian
 Form “B” of minor
 In case guardian is appointed by the court of law then attested copy of
guardianship certificate be obtained and placed on record.
Illiterate Person Account

Before opening such account the illiterate person should be informed that he / she cannot
issue Cheques in favor of any other person.
Title of Account:-
Name of account holder should be written in block form.
Personal Withdrawal
Documents:-
 Copy of Computerized National Identity Card
 Two attested photographs to be obtained for pasting on AOF and other on Specimen
Signature Card.
 Thumb Impressions
Male -------- Left Hand Thumb Impression
Female ------Right Hand Thumb Impression
Joint Account
These are the account of two or more persons who are neither partners nor trustees.
Account Opening Procedure:-
Title of Account:-
Title of account holder should mention the names of all the joint account holders.
Special Instruction:-
At the time of opening the account clear and specific instructions should be obtained
regarding operation of the account and payment of the balance at the death of one or
more joint account holders in the following manner:-
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• The account shall be operated by any joint account holders singly.

• By either or survivor singly
• By any two or more joint account holders or by any two or more survivors jointly.
• By all the joint account holders jointly
• By all the survivors jointly.
These instructions as far as possible should be obtained in handwriting of the parties
concerned, under the signature of all the joint account holders.
Documents:-
 Computerized national Identity Card of all the joint account holders.
Mode of Signature:-
 All joint account holders are required to sign as applicant and in the column of
special instructions.
 Specimen Signature of only those joint account holders are required who are
authorized to operate the account.
Individual Account
When a single man or woman opens an account in his or her own name and has the right
to operate, it is called individual A/C.
[
Title of Account:-
[
Title of Account should mention the name of the person who operates the account.
At the time of opening the account clear and specific instructions should be obtained
regarding the nominee of the account holder means after the death of the account holder
who will operate the account.
Documents:-
[
 Computerized national Identity Card.

 Proof of Income if he / she is a salaried person then the pay slip or salary
certificate of that person.

Proprietorship Account
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When the owner of the firm operating singly, open an account in his firm name.
Title of Account:-
Title of account must be in the name of the proprietorship concern.
In case of proprietorship concern, the special instruction should cover the style of the
account and the name of the person who will operate the account as sole proprietor. For
example, if the account to open is in the name of “Islamabad Cloth Store”, the person
who is the sole proprietor should declare as such.
Documents:-
 Computerized National Identity Card (CNIC) of proprietor.
 Declaration for proprietorship concern.
 Proprietorship Stamp
 Letter of request to open the account on the letterhead of proprietorship.
 Third party Mandate, in case any other person has been authorized by the
proprietor to operate the account.
 National Tax Number (NTN) but it is optional.
Partnership Account
“Partnership” is a relationship between persons who have agreed to share profits of a
business carried on by all or any of them acting for all.
Title of Account:-
Title of account must be in the name of the firm as declared by the partners.
Operational Instructions:-
 Operations on the account must be allowed strictly in accordance with the
instructions given in partnership mandate and Declaration (Part III) in terms of
section 25 of Partnership Act 1932.
 According to Partnership deed, if given.
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Documents:-
 Copy of Computerized National Identity Card of all the partners.
 Copy of registration Certificate (if a registered firm)
 Letter of request to open the account on the letterhead of partnership.
 Partnership Stamp
 Partnership Deed
 Third Party Mandate, if third party is authorized to operate the account.
 NTN (optional)
Limited Companies Account

Section 2 of the Companies Act, 1913, defines companies as:-
“An association of individuals for the purpose of profit, possessing a common capital
contributed by the members constituting it, such capital being commonly divided into
shares, of which each possess one or more and which are transferable by the owners.”
Title of Account:-
Title of account should be exactly in the same name and style as mentioned
on the memorandum and article of association.
All the special instructions should be given to the bank in the form of
Resolution of Board of Director.
Documents:-
 Computerized National Identity Card (CNIC) the entire Director
attested by company CEO.
 Resolution of Board of Director passed under Company’s seal to
open account.
 Memorandum and Article of Association
 Certificate of Incorporation Form 29 (B) (Lasted Copy). Company
secretary will certify all these copies.
 List of Directors and authorized signatories.
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 Certificate of Commencement of Business (for Public limited company’s only)
Trust Account
According to section 3 of Trust Act, 1882:
“A trust is an obligation annexed to the ownership of property and arising out of a
confidence proposed in and accepted by him for the benefit of another, or of another or
owner.”
Title of Account:-
The account should be opened in the name of the trust. However, if the account is opened
in the name of the trustees, the account should not be treated as a joint account, rather it
should be treated as a trust account.
The Banker should examine the trust deed very carefully. Particular attention should be
paid to the borrowing powers, status of account in case of death of any trustee or
signatory, and provisions for the appointment of new trustees.
Documents:-
 Attested photocopy of Computerized National Identity Cards (CNIC) of all the
trustees.
 Attested copy of Certificate of Registration.
 Certified copy of Instrument of Trust / Trust Deed
Mode of Signature:-
All the trustee are required to sign the account opening form, Specimen Signature Card,
and Cheque book requisition slip in their official capacity.
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Clubs, Societies and Associations Account

These are non- trading / non- profit organization and are formed for the promotion of
culture, education, recreational activities and charitable purpose etc.
Title of Account:-
Account must be opened in the name of organization in the following manner:-
e.g. Islamabad Cricket Association
Operational Instructions:-
 All the parties must be in accordance with the clauses of the resolution.
 In case of death of office bearer, account should be blocked until new resolution
is received.
Documents:-
 Copy of bye- laws / regulations.
 List of members of managing / executive Committee.
 Copy of certificate of Registration (if registered)
 Copies of CNICs of the members of Executive Committee.
 List of names of officials authorized to sign on behalf of the organization along
with the Specimen Signature under the signature of the Secretary of the club/society.
Agent Account
Title of Account:-
Account must be opened in the name of agent.
 Manager should ensure compliance of contract between principle and agent.
 Agent cannot delegate powers to third party.
 Transfer between principle and agent account should be in accordance to
agreement.
 In case of death / insolvency / insanity of principle agency transactions are
automatically terminated.
Documents:-
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 Attested photocopy of Computerized National Identity Card (CNIC) of the agent.

 Certified copy of Power of Attorney.
3.2. REMITTENCE DEPARTMENT

“Remittance is transfer of funds from one place to another or from one
person to another.”
A Remittance is an important service provided by banks to customers as well as non-

customers. Since it is not a free service it is a source of income for the bank.
Parties involve in remittances
Four parties involved in remittance:-
 Remitter
 Remittee
 Issuing Bank
 Paying Bank
Remitter:-
One who initiates, or requests for a remittance. The remitter comes to the issuing or
originating branch, asks for a remittance to be made, and deposits the money to be
remitted. The bank charges him a commission for this service. He may or may not be the
branch’s customer.
Remittee:-
A Remittee is also called the beneficiary, or the payee. The person in whose name the
remittance is made. A Remittee is also the one who receive the payment.
Issuing Bank:-
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The bank that sends or affects the remittance, through demand drafts, telegraphic
transfers, or Mail Transfers.
Paying Bank:-
Paying Bank also knows as the drawee branch. The branch on which the instrument is
drawn. It has to make the payment (usually located in a different city country).
Kind of remittances
 Transfer within the branch
 Transfer from one branch to another
 Transfer from one bank to another bank in the same city
 Transfers from one bank to another bank in two cities.
Instruments used in remittances
 Demand Draft (DD)
 Pay Order (PO)
 Pay Slip
 Call Deposit Receipt (CDR)
 Telegraph Transfer
 Rupees Traveler Cheque (RTC)
 Cancellation of PO, DD & CDR
 Advance Tax against Remittances
Clearing House
It is a place where representatives of all banks sit together and interchange their claims
against each other with the help of controlling staff of NIFT. It is one of the services
provided by NIFT to other commercial banks. NIFT acts as a clearinghouse. Different
banks are the members of the clearinghouse. A representative of each bank represents his
bank in the clearing house. Each bank has collected cheques as behalf of their customer
but these cheques are not drawn on their own bank so in the clearinghouse, they hand
over these cheques to respective banks on which these cheques are drawn. Similarly each
bank receives cheques from other banks if any.
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Instrument to be presented
 Cheques
 Demand Drafts
 Pay Orders
There are four types of clearing:-

1. Inward Clearing
2. Outward Clearing
3. Intercity Clearing
4. Same Day Clearing
1. Inward Clearing
Those Cheques and other negotiable instruments which are drawn on BAL Urdu Bazar
Branch Lahore, sent by other banks, constitute the inward clearing of Bank Alfalah
Limited. After having all the stamps and dates of Cheques confirmed, the concerned
drawer’s accounts are debited in BAL Kachahri Road Branch M.B.DIN.
Inward Return:-
• Presentation Flaw e.g. Clearing stamp not affixed or wrong discharge given by
collecting banker.
• Defect in the Cheques i.e. Post dated Cheques, unauthorized cutting.
• Insufficient Balance
2. Outward Clearing
When Cheques and other negotiable instruments drawn upon other banks like City Bank,
MCB, ABN-AMRO or Askari Bank of the same city (M.B.Din) are presented in BAL
Branch to deposit them in the respective payee’s accounts, these instruments are lodged
in outward clearing of BAL Branch.
Outward Return:-
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 Cheques return will be treated as inward Cheques.

 In case the Cheques is returned because of wrong presentation e.g. clearing stamp
not affixed or wrong discharge given on the cheques etc. it should be relodged in the
next day clearing after rectification of the mistake.
 Enter the cheques in cheques return register, mentioning the reason as appearing
on the cheques return memo received from the paying bank.
 Advice the customer about fate.
 Return the cheques to the customer after getting sign on the register.
 Collect the cheques return charges as per S.O.C (Schedule of charges).
3. Inter City Clearing

The cheques that are presented in inter city clearing are of another city and received by
air. In this type of clearing the bank confirm at that time that the cheques are clear or not
and give to the rider.
Same Day Clearing
The cheques that are presented in same day clearing are the local cheques and these
cheques are clear in same day. Basically it is the benefit that is provided to customer.
3.3. ACCOUNTS DEPARTMENT

This department is responsible to keep the record of each and every transaction and
prepare reports about the amount of deposits and advances and sent to Head office or
State Bank of Pakistan on monthly, quarterly and yearly basis.
Activities
The accounts department deals with various routine activities for the bank. The main
activities performed by it are:-
• Budgeting
• Reporting
• Maintenance & depreciation of fixed assets
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• Miscellaneous functions
Budgeting
Accounts department of a bank, for a year makes budget of every branch. Fiscal year of
bank starts from January 01 and ends on December 31. The accounts department starts
preparing budget from October for the next year.
Reporting
The accounts department, in the form of reports, clubs the details of various departments
together. Each and every minute detail is provided in weekly, monthly and annual
reports. The reports are submitted to head office, SBP and to the government. The
accounts department prepares many reports, of which the most common are:-
• Statement Of Affairs
• Income & Expenditure
• Business Report
• SBP Report
• Outstand Receipt Report
• Currency Wise Deposits Report
Maintaining of Fixed Assets & Their Depreciation

Accounts department maintains the record of all the assets and charges depreciation on
them. The bank normally uses the straight-line method to compute the depreciation.
It is calculated on monthly basis and charged yearly. Bank not only depreciates the
existing assets but also the assets but also the assets transferred in and transferred out.
Miscellaneous Functions
The accounts department also performs some other miscellaneous functions like
i. Closing Entries
ii. Daily activity checking
iii. Report Generation
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iv. Minor expense recording
3.4. CASH DEPARTMENT

The cash department is the most important department of the bank. It receives cash from
customers and then deposits it into the accounts of the customers and maintained their
balances.
The officers in this department are called teller and there were four tellers at the
counter. This department involves in two activates:-
Deposit Cash In Customer’s Account:-

When the customer want to deposit amount in his account at opening of account or after
that then he has to fill a deposit slip that shows the amount and the account in which the
cash will be deposited. Then teller will receive amount and credit the customer’s account
that shows increase in customer’s bank account.
Make Payments From Customer’s Account:-

When the customer draws a cheque on the bank to pay a certain amount then teller will
debit the customer’s account that shows reduction in his account balance.
There are two main types of cheques that are
• Open Cheques
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• Crossed Cheques
Open Cheques:-
Open Cheques are those cheques, which are paid across the counter of the bank. Open
cheques may be
• Bearer Cheques
• Order Cheques.
Crossed Cheque:-
The amount of this cheque is not paid at counter. The amount of this cheque is
transferred to the person’s account whose name is specified on the cheque. Two
parallel transverse lines are drawn across the face of the cheque.
Cheque Encashment Procedure
Receiving Of Cheques:-
The cash is paid against the cheques of the client. The following points are important.
1. Cheque is drawn on BAL
2. Cheque is not post dated.
3. Amount in words and figure are same.
4. It should be bearer cheques so the word bearer should not cross.
Verification Of Signature:-
After receiving the cheques the cheques the officer verify the signature of the account
holder and the signature on the cheques. If the signature is not same it is returned
back otherwise forward to computer terminal.
Computer Terminal Process:-
The cheque is received in computer terminal, where the computer operator checks the
balance of the account holder. The operator also sees the stop payment instructions
are received from account holder or not. After considering these points computer
operator post the cheque in account holder ledger and returned back to the officer.
Payment Of Cash:-
53
After posting the cheque the officer cancelled the cheque and returned back to
cashier. The cashier enters the cheque in cash paid registered and pay against the
second signature of receiver on the back of the cheque.
If the payment is of Rs. 50000 the cashier can make it on its own. If the amount is greater
than Rs. 50000 to Rs. 100,000 the cashier and cash deposit Incharge will verify the check
and will sing it. Then the payment will be made. But, if the amount is greater than Rs.
100000 to Rs. 1000,000 the manager operation will also verify the check and sign it so
that the payment can be made. If the amount is greater than Rs. 1000,000 the Branch
Manager will also verify the check and sign it. Otherwise the payment will not be made.
3.5. CAR FINANCE DEPARTMENT
Car finance
Quickest processing
No hidden charges
Minimum down payment
Complete repayment at any point of time
Balance transfer facility {BTF} for existing as well as new clients from other Banks
Tenure period ranging from 1 to 5 years.
Financing of all brand new locally assembled vehicles and used cars.
Financing limit ranging b/w Rs. 200,000/- to Rs. 2000,000/- for brand new cars
Corporate and individual car leasing

BAL’s recently introduced car leasing facility for individuals and corporate sector has set
new dimensions for the product. Now you are provided with the option of either to get
the vehicle leased or financed.
Insurance
Renowned and reliable Insurance companies are offering the competitive rates of
Insurance. Pay year insurance premium in advance {at the time of down payment} and
remaining in the subsequent equal monthly installment.
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Mark-up
Bank Alfalah's mark-up rates are as follows:
New Vehicle 18.50 %

Imported Vehicle 19.00 %
Commercial Vehicle 20.00 %
Second Hand Vehicle 21.00 %
Repayment
Easily affordable installments on monthly basis in the form of postdated cheques will set
you free of depositing your rental cheques every month.
Security
Hypothecation of vehicle in the name of the Bank Alfalah Limited
Documents required
Two passport size photographs.
Copy of NIC.
Bank statement for the last six months.
Salary certificate {for salaried individual}.
Business proof {for a business person}.
N.T.N Certificate.
Co borrower’s NIC copy {if the car is to be in the name of the co-borrower}.
Eligibility
Yes you get a car loan form bank Alfalah to purchase a brand new car if you are:
Pakistani National Identity Card holder.
Over 20 years of age (Maximum 60 years in case of salaried and 62 in case of a
business person at the time of maturity of the loan).
Salaried, Businessman or self employ
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3.6. CREDIT DEPARTMENT

A good financial support when officials of this department invest money of depositors into
feasible projects by lending loans to various business concerns. As the core activity of
Commercial bank is to provide short-term finance, which is mostly for working capital
requirements. As business concerns have money to complete the one production cycle, but it
is not necessary that amount would be received just after sale, but credit sales are also made.
So to finance next production cycle they obtain loans from commercial banks on short-term
basis, for continuity in operations.
Evaluation of client
This is the first requisite for team of credit department, to evaluate the client's position
regarding the financial and business performance concern. As for as, credit policy of Bank
Alfalah Ltd. is concerned, it doesn't given loan to individuals & business concerns.
i. Financial Statement Analysis:
This is the main source to evaluate the client of business concern, Annual Reports of last 2
to 3 years are obtained from enterprise, which is requesting for credit/loan. These are
examined by various techniques like; Horizontal Analysis, trend, ratio analysis are
conducted to get true and fair view of the final statements of that concern.
ii. Nature of Business to be Considered:
Secondly, nature of business should be considered because if business concern to which we
are giving loan related with that industry which is not growing and declining and we
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sanction loan to that concern would lead to definite bad debts. So if we examine the nature
of business properly and make sure about its growing trend, then loans can be sanctioned to
that concern.
iii. Bank References:
By correspondence BAL makes confirm to send letters to various banks in order to know
about client's record/dealing with them. If they give proper information about client then
decision made for loan becomes more strong and healthy.
iv. Plant Visit:

This is another source of evaluating client. In this technique credit department team visit the
plant of concern to assure that plant is actually in a position to get market value as which
mentioned in Balance Sheet. To get real picture of that business is obtained through personal
visit.
v. Credit Rating:
From various credit rating agencies reports are obtained which show the past record of that
firm regarding the paying capacity and dealing to discharge liabilities. If credit rating is
good enough then that symptom will also lead to sanction loan.
vi. Report From SBP:
From State Bank of Pakistan, report is required regarding that client. SBP has record of
every client past and present scenario. So it is essential to examine that report.
However, some other techniques are also used to evaluate the performance of business like,
credit vetting and information from peer concerns. After this appropriate examination, credit
department makes credit appraisal report and sends to head office corporate division (Credit
Division) for sanctioning that amount to concern.
Processing of a credit line proposal form

When client fills the credit line proposal form for getting loan. Then credit officer conducts
financial statements analysis and with his own views statement refer to head office for
sanctioning credit limit. Businessmen make arrangement with banks for credit line, which is
57
used for future needs. They pay some commission on that fixed credit line. In this way, they
secure their money for future working capital requirements.
Creation of charges
When an asset/property is identified as a security against facility in an agreement or
document creating a borrowing relationship, a charge is said to have been created. This
charge can either be registered formally or remain unregistered. A registered charge
obviously provides a higher degree of security.
A charge can be further classified according to its ranking, in the event of default or
liquidation. Thus it can be a First Charge, in case a lender's right of appropriation of the
property or its rates proceeds, in the event of default/liquidation, is prior to any other lender's
right. Similarly there can be second or subsequent charge-holder would be entitled to
recover his dues only after the first charge-holder's dues are settled.
Monitoring/renewal of credit facility

When credit team sanctions some loans to different clients then it becomes essential for it to
monitor the affairs of credit given to them, any during such period if customer wants to
extend his loan by accepting some other conditions from credit team, then role of credit
officer is very important to monitor such affairs. However, this team looks after the
condition of his business as the repayment with markup amount can be assured to get. If this
feels that such concern is not doing well from certain period, then it would take some
measures to get loan back with markup immediately and restrict to sanction loan further.
Personal visits are also made by credit team as to know the actual worth of property asset
mentioned or deposited for security.
Application of Mark-up
Markup is like interest rate, but it describes some what different from interest rate. Entire
interest rate was received by borrower either loosing or gaining but in markup bank
purchases goods from borrower by lending money on the terms of repurchase the goods by
banks from customer. In this way, bank gains some amount on sold goods and makes sure to
its receipts.
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From following calculation of mark up we can understand the application of mark up.
Mark up = PxRxD
365
Principle of lending
Before describing principles of lending basic considerations in primary evaluation of credit
proposal is necessary to be mentioned here.
i. Purpose of Facility:
- Should be Legally/Morally Valid/Legitimate.
- Should conform to the Bank's Credit Policy guidelines.
- Should conform to the guidelines provided by the State Bank of Pakistan.
- Should be geared towards meeting national economic priorities.
ii. Amount of Facility:
- Should be within the actual requirements of the borrower.
- Should be such that the principle of maintaining a diversified portfolio is not
sacrificed, without any extra ordinary considerations.
- Customer should not be working on borrowed capital only, there should be
substantial own stake of the customer.
iii. Period of Facility:
- Should match the availability of resources.
- Should conform to the bank's policies/guidelines.
- Should conform to the actual requirements of the customer.
iv. Repayment:
- Period of repayment should be specific and should match the cash flow of
customer's business.
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- Primary and secondary sources of repayment should be specifically identified.

v. Security:
- The facility should be fully secured, in light of security and margin requirements
determined by the bank and the SBP.
vi. Market Reputation:
- The customer should have good market reputation & standing.
Now we will discuss on the principles of lending. Based on the aforementioned

considerations, following principles of lending have been evolved:
1) SAFETY
Covering the elements of character, capacity, capital and security offered/held. Security
should be identifiable, enforceable, realizable and valuable, in order to ensure safety of the
facilities committed.
i. The borrower should have impeccable character market standing and reputation. He
should be reliable and dependable for meeting his commitments and the terms of the
facility.
ii. The capacity or capability of the borrower to manage his business and generate enough
profits and cash flows to meet his commitments for repayments and debt servicing is of
pivotal importance.
iii. By capital is meant the monetary worth of the customer and his own resource base.
2) LIQUIDITY
i. Covering the element of capability to liquidate or repay on maturity and also prior to
maturity, in case of need, Ask how "Liquid a loan is, not just how good".
ii. Does he have an identified primary liquid source of repayment? This will determine his
ability to repay the bank's facilities.
60
iii. It is also important to determine the amount that can be lent as a one time transaction or as
a continuing credit line, depending upon customer's requirements, capacity to repay, trade
cycle, business turnover, cash flows and the regulatory guidelines.
The five C’s of Credit

I. Capital:
The capital & resources of the borrower his capital structure and the gearing ratios either
borrower Under-capitalized? Does the borrower have its own resources to fall back on, in
case of need?
II. Capacity:
Capacity or the capability of the borrower to manage his business profitably and the
capacity to repay the advances and service the facilities according to agreed terms. Is the
borrower in a capacity to borrow? Or is there any legal complication?
III. Collateral:
The security provided against the facilities. Is the security provided: Adequate, Realizable,
Marketable, Valuable, Storable, Non-perishable, Durable, and Transferable/with clear Title.
IV. Character:
Are the borrower's personal character, market standing and reputation impeccable? Has he
met his part commitments? Does he have good bank reference?
V. Conditions:
Have the conditions of lending been drawn up taking into account all possibilities Is the
sector/industry in decline, is growing or it has reached at plateau? Is there a market for the
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products and the market size to justify production plans and sales forecasts? Are the
economic conditions feasible generally and for the business, in particular?
Documents Required
Documents we mean those papers which are essential to provide facility. In this connection,
following are the documents in case three types of business concerns:
In case of sole proprietorship
i) Security/lien paper
ii) Collateral
iii) Demand promissory note.
iv) Letter of continuity.
v) I.D card
In case of partnership
i) Security/lien paper
ii) Collateral
iii) Demand promissory note.
iv) Letter of continuity.
v) Partnership deed.
In case of cooperation (private limited)
i) Personal Guarantee (Director)
ii) Charge Registration form (form 10).
iii) Memorandum & Articles of Association etc.
62
Chapter # 4
FINANCIAL
&
SWOT
63
ANALYSIS
4. FINANCIAL STATEMENTS
64
65
66
67
68
69
70
71
4.1. RATIO ANALYSES
Ratio simply means one number expressed in terms of another. A ration is a

statistical yardstick by means of which relationship between two or various
figures can be compared or measured. It is defined as a systematic use of ration
to interpret the financial statements so that the strengths and weaknesses of a
firm, as well as historical performance and current financial condition, can be
determined.
Ratios can assist management, in its basic functions of forecasting, planning, co-
ordination control and communications. The ratios are helpful in deciding about
their efficiency or otherwise in the part and likely performance in the future. The
basis of ratio analyses is to compare the performance of there companies and
with the industry.
Purpose:
The purpose of ratio analysis depends upon the event for which the analysis is
made. The following paragraph briefly explains the purpose of ratio analysis.
“Management” would like to know about the operational efficiency and would
think of such ratios as return on investment, turnover of fixed assets, and net
profit to sales etc. While “Creditors” would like to know the ability of the
company to meet its current obligations and therefore, would think of current and
liquid ratios, turnover of receivables, coverage of interest by the level of
earnings, etc. and on the other side, “Investors” will be interested in such ratios
as earnings per share, book value per share and dividends per share etc.
72
BANK RATIOS
Earning Asset to Total Asset:

This ratio shows how well bank management puts bank assets to work. High-
performance banks have a high ratio.
Formula
Total Earning Assets / Total Assets *100
80.00%
79.00%
78.00%
Earning Asset 77.00%
to 76.00%
75.00%
Series1
Year Total Asset 74.00%
73.00%
2008 77.81% 72.00%
71.00%
2007 79.85% 70.00%
2008 2007
Years
Interpretation
The analysis shows that the ratio is decreased. It means that bank management
has not efficiently used its assets as compared to the previous year.
73
Equity Capital to Total Assets:

This ratio, also called Funds to Total Assets, measures the extent of equity
ownership in the bank. This ownership provides the cushion against the risk of
using debt and leverage.
Formula
Total Equity / Total Assets *100
4.60%
4.50%
Equity Capital
4.40%
to 4.30%
Year Assets 4.20% Series1
200 4.10%
8 4.15% 4.00%
200 3.90%
2008 2007
7 4.52% Years
Interpretation
This ratio also shows the decreasing trend which means that the extent of equity
ownership is decreased. So the risk of using debt and leverage is also increased.
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Deposits Times Capital

The ratio of Deposits Times Capital concerns both depositors and stockholders.
To some extent, it is a type of Debt / Equity Ratio, indicating a bank’s debt
position.
Formula
Total Deposits / Total Stockholder Equity
21
20.5
20
Deposits Times 19.5

19
Year Capital 18.5
Series1
2008 20.73 18
17.5
2007 18.29 17
2008 2007
Years
Interpretation
Analysis has shown that debt or deposits are increased with greater proportion of
equity.
75
Loan to Deposits:
It is a type of asset to liability ratio. Loans make up a large portion of the bank’s
assets and its principal obligations are the deposits that can be withdrawn on
request-within time limitations. This is a type of debt coverage ratio, and it
measures the position of the bank with regard or taking risks.
Formula
Total Loans / Total Deposits *100
1.3
1.25
Loan 1.2
To 1.15
Series1
Year Deposits 1.1
2008 1.10% 1.05
2007 1.26% 1
2008 2007
Years
Interpretation
The decreasing trend of the ratio has shown that the position of the bank to take
risks is weakened by increase in deposits and decrease in loans as compared to
last year.
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A. REGULATORY RATIOS
a. Advances To Deposit Ratio
This ratio is calculated by dividing the amount of advances by deposits. This
ratio shows the relationship of advances to deposits. It means that what is the
percentage of advances to deposit of bank. Whether the advances are enough to
pay its liabilities.
Formula
Advances / Deposits
64.5
64
Advances 63.5
to Deposit 63
Year Ratio Series1
62.5
2008 64.07% 62
2007 62.67% 61.5
2008 2007
Years
Interpretation
The increasing trend of ratio is showing that the advances are increased.
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b. Cash To Deposit Ratio

The ration is calculating by dividing the cash on hand and cash with other banks
by total deposit of the bank. This ratio shows the percentage of cash available as
compared to deposits. This ratio tells that at any time if cash is needed to meet
the liabilities of deposit liabilities to what percentage it is available.
Formula
Cash in hand and cash with other bank / Total Deposit
11
10.95
10.9
Cash 10.85
10.8
10.75
Series1
10.7
Year 10.65
to Deposit 10.6
10.55
10.5
2008 2007
Ratio Years
2008 10.87
2007 10.78
Interpretation
The ratio shows a small increase from last year which means that working
regarding maintains of deposits and cash remains the almost same.
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B. CAPITAL ADEQUACY RATIOS

a. Equity To Assets
This ratio shows that how much equity is used to get the assets of the bank.
The ratio is calculating by dividing shareholder’s equity by total assets.
Formula
Shareholder’s Equity / Total Assets
5
4.8
4.6
4.4
4.2
Equity to 4
Series1
3.8
Years Assets 3.6
2008 4.02% 3.4
3.2
2007 4.52% 3
2008 2007
Years
Interpretation
There is a small change in the ratio which shows that the equity regarding the
assets remains almost same.
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DEBT RATIO:
Debt ratios tell us about the firm’s overall debt position and as well as it mixes of equity
and debt. These ratios will also give general idea about the level of financial risk faced
by firm.
Formula
Total Liabilities / Total Assets
97.0%
96.5%
96.0%
95.5%
DEBT 95.0%
94.5%
Year RATIO 94.0%
Series1
2008 95.2% 93.5%
93.0%
2007 94.7% 92.5%
92.0%
2008 2007
Years
Interpretation
This ratio measures the portion of total assets financed by the firm’s creditors. Higher this
ratio, the greater the amount of other people’s money being used in an attempt to generate
profits. Even though debt ratio is in increasing trend but this ratio is very high. Higher
this ratio means higher the financial risk so it’s a negative sign for bank.
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PROFITABILITY RATIOS:
Profitability ratios relate profit to sales and investments. These ratios indicate the firm’s
overall effectiveness of operations and give us idea how well firm utilized its resources in
generating profit and shareholder value.
1. OPERATING PROFIT MARGIN

Formula
(Operating Profit / (Sales))*100
26.5
26
25.5
25
Operating Profit 24.5
Year Ratios 24
23.5
Series1
2008 23.18% 23
22.5
2007 26.31% 22
21.5
2008 2007
Years
Interpretation
Operating profit margin measures the percentage of sales revenue remaining after all cost
and expenses other than interest and taxes are deducted. Operating profits measures only
the profit earned on operations and ignore any financial and government charges.
Operating profit margin is showing decline.
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NET PROFIT MARGIN

Formula (Net Profit after Tax / (Sales))*100
14
Net Profit 12
Year Margin 10
2008 0.008% 8
Series1
6
2007 13.583% 4
2
0
2008 2007
Yea rs
Interpretation
Net profit margin measures the percentage of sales revenue remaining after all cost and
expenses, including interest and taxes have been deducted. Net profit margin shows
negative trend in 2008.
2. RETURN ON EQUITY (ROE)

Formula (Net Profit after Tax / Shareholder’s Equity)*100
25
20
Return On
15
Year Equity Series1
10
2008 0.019%
5
2007 23.44%
0
2008 2007
Years
Interpretation
ROE measures the shareholder’s return earned on their investment in the firm. This ratio
indicates how profitable a company is by comparing its net income to its average
shareholder’s equity.
3. GROSS SPREAD RATIO
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Formula Net Mark up Income / Gross Mark up Income
35.6
35.4
Gross 35.2
35
Year Spread Ratio 34.8
2008 34.47% 34.6 Series1
34.4
2007 35.53% 34.2
34
33.8
2008 2007
Years
Interpretation
Gross Spread ratio shows decreasing trend which is not a good indication for the bank.
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Summary of Ratio Analysis
Ratios 2008 2007

Earning Asset to Total Asset 77.81% 79.85%
Equity Capital to Assets 4.15% 4.52%

Deposits Times Capital 20.73% 18.29%
Loan to Deposits 1.10% 1.26%
Advances to Deposit Ratio 64.07% 62.67%
10.87% 10.78%
Cash to Deposit Ratio
Equity to Assets 4.02% 4.52%
Debt Ratio 95.2% 94.7%
Operating Profit Margin 23.18% 26.31%
Net Profit Margin 0.008% 13.583%
Return on Equity (ROE) 0.019% 23.44%
Gross spread Ratio 34.47% 35.53%
4.2. COMMON-SIZE ANALYSIS
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4.2.1. Vertical Analysis
BALANCE SHEET
Vertical Analysis
For the period ended 31 Dec 2008
ASSETS 2008 2007

Cash and valances with treasury banks 9.36% 8.90%
Balances with other banks 6.18% 5.56%
Lendings to financial institutions 0.95% 1.04%
Investments 21.76% 27.09%
Advances 55.10% 51.72%
Fixed assets 3.96% 3.62%
Other assets 2.68% 2.06%
*By taking Total Assets as Base
LIABILITIES
Bills payable 1.04% 1.32%
Borrowings 4.23% 6.88%
Deposits and other accounts 90.47% 87.20%
Sub-ordinated loans 0.77% 1.03%
Liabilities against assets subjects to finance lease 0.01% 0.00%
Deferred tax liabilities 0.06% 0.44%
Other liabilities 3.41% 3.13%
*By taking Total Liabilities as Base
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CONSOLIDATED PROFIT & LOSS ACCOUNT

Vertical Analysis
2
Non mark-up / interest expenses 008 2007
Administrative expenses 84.54 % 26.23%
Proviseon against off-balance sheet obligations 0.23 % 0.02%
Other provisions 2.16 % 0.01%
Other charges 0.98 % 0.03%
Total non-mark-up / interest expenses 87.91 % 26.29%
4.2.2. Horizontal Analysis
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Balance Sheet
Horizontal Analysis
ASSETS
Cash and valances with treasury banks 111.04%
Balances with other banks 117.38%
Lendings to financial institutions 96.04%
Investments 84.86%
Advances 112.52%
Fixed assets 115.52%
Other assets 137.71%
105.62%
LIABILITIES
Bills payable 83.42%
Borrowings 65.30%
Deposits and other accounts 110.09%
Sub-ordinated loans 79.83%
Liabilities against assets subjects to finance lease 154.46%
Deferred tax liabilities 15.09%
Other liabilities 115.84%
106.11%
NET ASSETS 96.95%
REPRESENTED BY
Share capital 123.00%
Reserves 131.11%
Share in share premium of associate 100.00%
Unappropriated profit 39.23%
97.12%
Minority interest 0.00%
96.95%
Surplus on revaluation of assets-net of tax 96.98%
96.95%
*By taking 2007 as base year.
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Horizontal Analysis
Items 2008
Mark-up / return / interest earned 120.5%

Mark-up / return / interest expensed 122.4%
Net mark-up / interest income 116.9%
Provision against loans and advances 85.9%
Bad debts written off directly 484.2%
Total provisions & bad debts 51.6%
Net mark-up / interest income after provisions 106.1%
Non mark-up / interest income
Fee, commission and brokerage income 103.1%
Dividend income 546.4%
Income from dealing in foreign currencies 192.8%
Gain on sale of securities 20.7%
Unrealized loss on revaluation of investments classified as held for
trading 827.0%
Other income 121.2%
Total non-mark-up / interest income 86.7%
96.9%
Non mark-up / interest expenses
Administrative expenses 126.5%
Provision against off-balance sheet obligations 410.7%
Other provisions 16598.8%
Other charges 1283.4%
Total non-mark-up / interest expenses 131.2%
33.4%
Share of (loss) / profit of associates 277.9%
Profit before taxation 4.2%
Taxation
- Current 99.9%
- Prior years 61607.5%
4.3. SWOT ANALYSIS
- Deferred 315.9%
Share of tax of associates 391.5%
13.9%
Profit after taxation 0.1%
Profit / (loss) attributable to:

Equity holders of the parent 0.8%
Minority interests 2504.4%
0.1%
*By taking 2007 as base year.
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SWOT is an acronym that stands for strengths, weaknesses, opportunities and threats.
SWOT analysis is a careful evaluation of an organization’s internal strengths and
weaknesses as well as it environmental opportunities and threats. In SWOT analysis the
best strategies accomplish an organization’s mission by exploiting an organization’s
opportunities and strengths while neutralizing its threats and avoiding its weakness.
During my internship I also observe these factors of bank and made a conclusion which is
as follows:
4.3.1. Strengths:
Main strengths of bank are describe follows due to which bank is becoming successful
day by day and now is on the fifth largest and successful bank in Pakistan in the bank’s
ranking after NBP, MCB, UBL and HBL.
 Being the private organization its main aim is not to earn profit but also to satisfy its
customers and slogan of BAL is also the representative of this purpose as Bank Alfalah “The
Caring Bank”.
 Bank has AA (Double A) and A1+ (A one plus) Credit Rating for long term and short
term loans respectively.
 Main source of profit for any financial institution is public saving which only comes from
public confidence and BAL is getting this confidence which is one of the main strengths of
bank.
 Bank Alfalah is also getting fame in the market due to its name “ALFALAH” which is
leaving the Islamic and favorable impact on the minds of public.
 Consumer survey has selected Alfalah credit cards as the best product in the market with
the attribute of Affordability.
 BAL is providing the facility of Money Gram to its entire people who are its customer or
not and through this service it has got the leadership in Money Gram because any other bank
is not offering this service.
 With in very short period it has got a superb accomplishment which shows the
competency of top management.
4.3.2. Weaknesses:
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Beside all these strengths I also noted some weaknesses in the operations of bank Alfalah
which are described below:
 BAL is that it is not offering the loan facility to newly established businesses
because it’s the BAL policy that it will loan only to that people who are running their
businesses from 3 years.
 BAL’s lending procedure is quite complicated that some people hesitate to come
as they are requiring a huge file of documents.
 Bank Alfalah is not offering any credit facility for students.
 BAL is not offering the online facility to account holders having photo account.
 Bank Alfalah is charging online charges for transfer of money but some other
banks not charge online transfer charges.
4.3.3. Opportunities:
It is mandatory to try to make progress with consistency as well as to adopt changes with
needs of time, in order to cope up with both conditions.
 Bank Alfalah is spreading its network outside the boundaries of Pakistan and it
has more opportunities to extend this network as State Bank of Pakistan has
prescribed new policies in the prudential regulations.
 In addition to excellent routine banking, it has earned a good name by offering
special products like car, home and credit cards facility. So the penetration of these
products could enhance market shares.
 As BAL is providing the facility of Islamic banking through its separate branches,
there’s a great chance to enhance its market share
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4.3.4. Threats:
Threats are the negative trends in external environmental factors. As on one side
environment provides opportunities to one organization, on the other hand it also has to
face some threats. Bank Alfalah also has to face this situation.
 Other foreign financial institutions like RBS, HSBC etc also having strong
banking policies and there’s a chance that people might move toward these financial
institutions to secure their investments, transactions and related services.
 For last seven year there is political stability in Pakistan but now again a new
layer of political instability arises which effects almost all industries including Banks.
 Due to economic instability like currency depreciation and inflation, the bank is
constantly facing a threat.e.g in case of inflation the people have low disposal income
which means lower deposits in banks.
 Other investment opportunities like investment in property is giving people more
return as compare to banks, it can decrease the deposits of bank.
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Chapter # 5
EXPERIENCE
AS
INTERNEE
92
5. LEARNING AS AN INTRENEE
I did my internship in Bank Alfalah PAKPATTAN Branch. This internship consists of
six months. It is not a very big branch. It starts working at 20th August 2005.
First day, I reported to the manager of the branch Mr. Khan Aaeed Ahmad Khan who
gave me brief introduction about the management and working of the branch, he also
check my knowledge about banking by taking a little test and interview. He has also
taken a Computer Test from me. Then he introduced me to the other employees and
referred me to manage operations.
Manager Operations:
In Bank Alfalah Manager Operations means the person how is fully responsible for all
the operations of the bank. So Alfalah management is very careful regarding the selection
of the person for this post. Mr. Syed Zafar Mahmood Bukhari is such a person how
best suits for this job. He is a man of his own decisions. He is such a neat person I have
never seen before. There is symmetry in all of his workings. He got good communication
and administrative skills. He gave me the concept of general banking and asked me to
meet H.R incharge.
After the introduction with Manager Operations, the internship incharge Miss Munaza
Noreen gave me a printed page which contained the sequence of department vise
internship duration. According to that format I have to start my internship from Account
Opening Department.
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From A/c Opening Department

This Branch is having about approximately 4000 accounts but there was only one officer,
Mr. Muhammad Jamil to handle this tough work. He has to deal different people. He
was a very talented and hard working person who was also the backup of Accounts,
Remittance and Operations. It is honor for me to pass 1 week with such person.
My experience in this department was really very good. I learnt how to handle different
customers, how to fill Account Opening Form, what are the required documents that
should be with you in order to open an account, what types of account Bank Alfalah is
offering to the customers, what are the facilities that an account Holder can enjoy and
what are the profit rates Bank Alfalah is giving to its customers.
I have learnt the procedure that an Account Opening Officer has to follow in order to
open and maintain an Account.
Form Remittance Department

There was also one person to deal with remittance. Mr. Hamad Zahoor Incharge
Remittance was alone controlling this department. He has a very charming personality,
good sense of hummer. He briefed me all the work in a very good manner.
From this department I have learnt how to make: Demand Draft (DD), Pay Order (PO),
Pay Slip, Call Deposit Receipt (CDR), Telegraph Transfer, Rupees Traveler Cheque
(RTC) and Cancellation of PO, DD & CDR.
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From Accounts Department

One person handling this department was Miss Munaza Noreen. She was also the H.R.
incharge of the branch. She got good communication and problem handling skills. I was
very inspired from her when I have seen her to face any of the H.R. problems in a very
polite manner.
I used to help her in Daily Activity checking, sorting and counting of vouchers and how
to calculate the deprecations of all fixed assets. I learnt from her the items of the Balance
Sheet of Bank and saw the format of different reports. She helped me to understand her
work. She told me about the reports that he has to prepare & the purpose of those reports.
It was one of those Departments in which Customer interaction is not involve rather
paper interaction is important.
From the Car Finance Department

Two officers in this department were Mr. Muhammad Ahmad Raza incharge Car
Finance, Haider Ali recovery officer. Mr. Raza was very caring and virtue nature person.
He got the sound marketing skills and high level of intelligence to screen the validity of
the customers. The way he deals with clients was very impressive.
Although the Pakpattan Branch was small but still the demand for financed cars through
Bank Alfalah lead this department to prosperity. This department handles a large number
of customers daily and, without overstatement; this department is the third “busiest”
department after the Account Opening Department. It requires constant customer
interaction and requires high level of intelligence to screen the validity of the customers.
Where as sound marketing skills are required to actually force the walk-in customer to
select Alfalah Car Financing, still stronger skills are needed to scan the incoming
customer for validity. I learnt how to face the customers conveniently, how roper files
should be maintained, how to apply for a car, what are requirement to apply for this
Product, what is that maximum limit, what is the procedure to this department.
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Form Cash and Credits Department

The persons working in cash department were Asghar Shah Chief Teller, Badar Din
Cash Officer and Muhammad Irfan Cash Officer. I have seen the dealing, working and
procedures.
Muhammad Abid Waseem Credit Manager and Muhammad Shahzad Hasan Credit
Officer were the persons in the credit department.
In credits, I saw large number of customers in this department. I learnt what the debt to
equity ratio of credits department, how to calculate installment, what are the documents
required to get loan, what the eligible criterion, and what is the procedure and activities
of this department. What are requirement to apply for this Finance, what is that maximum
limit.
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BRANCH STAFF
NAME DESIGNATION
Khan Aaeed Ahmad Khan Branch Manger
Syed Zafar Mahmood Bukhari Operation Manager
Muhammad Abid Waseem Credit Manager
Syed Dilawar Hussain Shah Rural Finance Officer
Ali Qayyum Shah Rural Finance Officer
Munaza Noreen Accounts Officer
Hamad Zahoor Incharge Remittance
Muhammad Jamil Officer Operations
Muhammad Shahzad Hasan Credit Officer
Asghar Shah Chief Teller
Badar Din Cash Officer / Teller
Muhammad Irfan Cash Officer / Teller
Muhammad Ahmad Raza Incharge Car Finance
Haider Ali Recovery Officer
Khalida Majeed NLI / Dispatcher
Saima Jahangir NLI / Operator
Tanveer Qadir Shah NLI / Rider
Michal Parvaiz NLI / Sweeper
5.1. Recommendations
After doing internship of six weeks in Bank Alfalah Limited, I would like to give some
recommendations to count over some problems.
 Bank should prefer to hire worker on the basis of their talent and avoid going
for reference based hiring. It can be harmful for the organization in the long run.
97
 In Bank Alfalah, there is misdistribution of work; some people are over

burdened with the work. So I suggest that there should be fair distribution of work in
all the departments.
 Management should not only hire new employees for relaxing other workers
but they also should decrease working hours and should encourage late sitting of
employees in bank.
 Bank Alfalah is only dealing in Money Gram; it should also starting providing
the service of other money transfer lines like Western Union.
 BAL should provide loan to students at low mark up rate and easy terms &
conditions.
 Bank Alfalah should use electronic media to increase awareness of its
products in general public.
6. RFERENCES
Web References:
 www.bankalfalah.com.pk
 www.wekipedia.com
98
Book References:
Lawrence J. Gitman Principal of Financial Management (9th Edition)
James C. Van Horne Fundamentals of Financial Management (11th Edition)
Persons References:
 Bank Employees

Vertical Analysis
2008
Computation of Base
Mark-up / return / interest earned 31,097,697
Non mark-up / interest income 5,327,876
Total Earnings 36,425,573
ITEMS
99
Mark-up / return / interest expensed 55.95 %

Net mark-up / interest income 29.42 %
Provision against loans and advances 5.59 %
Provision for diminution in value of investments 3.96 %
Bad debts written off directly 0.08 %
Total provisions & bad debts 9.63 %
Net mark-up / interest income after provisions 19.80 %
Non mark-up / interest income
Fee, commission and brokerage income 7.24 %
Dividend income 0.79 %
Income from dealing in foreign currencies 2.51 %
Gain on sale of securities 1.17 %
Unrealized loss on revaluation of investments classified as held
0.50 %
for trading
Other income 3.42 %
Total non-mark-up / interest income 14.63 %
34.42 %
Non mark-up / interest expenses
Administrative expenses 29.10 %
Provision against off-balance sheet obligations 0.08 %
Other provisions 0.74 %
Other charges 0.34 %
Total non-mark-up / interest expenses 30.26 %
4.16 %
Share of (loss) / profit of associates 3.58 %
Profit before taxation 0.58 %
Taxation
- Current 4.78 %
- Prior years 0.61 %
- Deferred 2.79 %
Share of tax of associates 0.81 %
0.57 %
Profit after taxation 0.01 %
Profit / (loss) attributable to:

Equity holders of the parent 0.08 %
Minority interests 0.07 %
0.01 %
100

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Int e rns hip Re p o rt

1.1. HISTORY OF BANKING

• State Bank of Pakistan

• National Bank of Pakistan

1.2. HISTORY OF BAL

1.3. CORPORATE INFORMATION

CHIEF FINANCIAL OFFICER

REGISTERED / HEAD OFFICE

1.4. VISION AND MISSION STATMENT

To be the premier organization operating locally

To develop and deliver the most innovative

1.5. ORGANIZATIONAL STRUCTURE OF BAL

Chief Executive Officer

1.6. BOARD OF DIRECTOR

HE. Sheikh Hamdan Bin Mubarak Al Nahayan

Mr. Khalid Mana Saeed Al Mr. Ikram Ul-Majeed

Mr. Nadeem Iqbal Sheikh Sirajuddin Aziz

PRODUCT & SERVICES

2. PRODUCTS & SERVICES

2.1.1. CREDIT CARDS

• Balance Transfer Facility

2.1.2. Debit Card

PLS Savings Account:

Basic Banking Account (BBA):

Alfalah Mahana Amdan:

• Deposits can be placed in multiple of 100,000 units with maximum 3 units

• Maximum entry point age is 55 years (renewable up to 64th birthday)

Child Benefit Payable Monthly

• Child age at the time of Breadwinner’s death.

Alfalah Kamyab Karobar

• Online Current Account

• Free Online Transactions

Small and Medium Enterprise (SME):

BAL’s Products for SMEs:

Alfalah Karobar Finance (AKF):

Eligibility Criteria for AKF:

AKF - Rates & Charges:

Loan Processing Charges under AKF

Documentation charges Actual cost of revenue and special adhesive

Alfalah Milkiat Finance (AMF):

Eligibility Criteria for AMF:

 The security against Alfalah Milkiat Finance should be mortgage of urban

AMF - Rates & Charges:

Loan Processing Charges under AMF

Legal charges Actual & approved charges of lawyers on the Bank’s

2.2.2. Lease Finance

 Vehicles (Private & Commercial)

Eligible for Lease Facility:

Daily Activity Checking:

 Checking and distribution of all system reports

 Preparation of monthly, quarterly, semiannually, and yearly balance sheet of the

 Calculations of profits and markups on different investment schemes

 Calculation of taxes deducted on deposits, services and supply of goods.

 Preparing different types of reports for SBP.

2.2.3. Home Finance

 Alfalah Home Purchase

Alfalah Home Purchase:

Alfalah Home Construction:

Alfalah Home Renovation:

Alfalah Home Start:

Bank Transfer Facility (BTF):

Mark-Up Rate Options: