In The Name Of ALLAH, the Most Merciful, the Most

Beneficent

ACKNOWLEDGMENT

All praises are for Allah almighty that has bestowed upon human being the crown of creation and has endowed him with knowledge and wisdom. After Allah, is the last prophet Mohammed (S.A.W) who brought for us revelation and unlimited knowledge

and civilized the barbarian human being. First of all this report owes it originated to the valuable assistance of our learned & honorable teacher Madam Mehreen Khalil whose

able guidance and encouraging attitude throughout has been a source of inspirations for us. Without his kind attitude patronage, we would have never accomplished this task.

I am also thankful to the staff of Bank AlFalah Main Branch Abdali road Multan, especially to Mr Mohsin ALI (Branch Manager) .Mr. Asim Shabir ( Head of

Credit Department ), Mr Fahad Asghar ( Operation Manager), Mr. Khurram, Mr Farhan , Mr. Yousaf, Ms Saima Rani, and Ms Bushra Riaz. My special thanks to all my teachers and seniors who provided me with their kind guidance at each and every step whenever

I felt difficulty.

Fatima Arshad BB-09-82

Dedication

We dedicate this report to the Shuhda of Siachin Giari sector who scarified

their today for our tomorrow.

“The martyred of Pak Army we can’t pay you back.”

EXECUTIVE SUMMARY

B a nkA lf a la h w a s inc or por a t e d in 1997a nd w a s pr iva t ize d by the Gove r nme nt of Pakistan. The Abu Dhabi Group bought the majority shares of the bank and so got the rights to control the bank’s operations. Since the privatization of the bank, Bank Alfalah has implement different policies to make it one of the best banks of Pakistan, which included introducing new products and services and increase its operations by opening new branches in Pakistan. Today Bank Alfalah is operating in more than 95 cities of Pakistan and operating its foreign branches in Bangladesh, Afghanistan and Bahrain. The total employees of Bank A lf a la h in 2008 w e r e 7,584. The r e a r e only 2% increase in employees this year as c ompa r e d to pr e vious ye a r s be c a us e of t he c ondit ions of P a kis t a n’ s e c onomy. The financial statistics of Bank Alfalah are quite good as their human resource. The profit after taxation for Bank Alfalah in 2008 amounted to Rs.1, 301 million and its total assets for 2008 amounted to Rs.348, 990 million. The overall performance of BAL is decreased in 2008.Bank Alfalah promotes its products and services through print and electronic media. Bank Alfalah also promotes itself by sponsoring different events. A lf a la h is e xpa nding it s ne tw or k a ll ove r t he P a kis t a n ye t t he r e a r e ma ny untapped areas. The competitors of BAFL are also in aggressive position. The Economic and Political conditions of the country are very disturbing; the high inflation and law and order situation affects every business including Alfalah. Social and technological issues a r e of s e c onda r y impor t a nc e but t he y a ls o c a nnot be ne gle c t e d. B A FL is f oc us ing positively regarding technological issues but it should also keep its eye on the social cultural factors also. Some of the recommendations include promotion on the basis of merit, loans to students and scholarship programs for its employees.

INTRODUCTION OF ORGANIZATION

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

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

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

In 1991,the BC C I was banned , when it was accused by European countr ie s

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

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

bank was closed due to internat iona l pressure. Then, its 3 Pakistani branches were

taken over by the Government of Pakistan, which were named as Habib Credit and

Exchange Bank (HCEB) and these were working as subsidiary of Habib Bank Limited.

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

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

o f S he ikh N ahayan Mubarik Al N ahayan purchased 70% o f its sha res and

30%shares remained with Habib Bank on behalf of Government of Pakistan. The

development of various sectors in Pakistan the bank has already made signif icant

contribution in build ing and s trengthe n ing bo th co rpo ra te and re ta il

banks sec to r in Pakistan. Assessment of the needs and wants of customer is an

ongoing process at Bank Alfa la h, which he lp to centennia l ly deve lop new

p roduc ts o f se rvices . Des ign ing the product portfolio in response to royal patriot,

royal custodial, Alfalah car finance, Alfalah rupee traveler cheques, home loans are prime

example of quality innovation providing timely banking opportunit ies to customer.

To continuous ly offer courteous, professiona l and advanced banking solution the

team of bank has recently been rejuvenated by going through training programs with

focus to information technology.

Today, Bank Alfalah is the 5th Largest bank of Pakistan. BAL operating banking activities in

more than 95 cities of Pakistan and having more than 400 branches in

BOARD OF DIRECTORS

H.H. Sheikh Hamdan Bin

Mubarak Al Nahayan

Chairman

Mr. Abdulla Nasser Hawalileel

Al-Mansoori

Director

Mr. Abdulla Khalil Al Mutawa

Director

Mr.Khalid Mana Saeed Al

Otaiba

Director

Mr. Ikram Ul-Majeed Sehgal

Director

Mr. Nadeem Iqbal Sheikh

Director

Mr. Atif Bajwa

Director & CEO

MANAGEMENT

Mr. Atif Bajwa Chief Executive Officer

Mr. Bahauddin Khan Chief O perating O fficer

Mr. Mohammad Yousuf Chief Risk O fficer

Mr. Shakil Sadiq Group Head SME

Mr. Adnan Anwar Khan Group Head Retail & Middle Market, Central

Mr. Ijaz Farooq Group Head Islamic Banking

Mr. Nadeem Ul Haq Group Head Admin, Technology, System &

Operations

Mr. Shahab Bin Shahid Group Head Retail & Middle Market, South

Mr. Faisal Farooq Khan Group Head HR & Learning

Mr. Saad Ur Rehman Khan Group Head Corporate & Investment Banking

Ms. Mehreen Ahmed Group Head Consumer Business & New Initiative

Mr. Yasar Rashid Group Head Audit & Inspection

Mr. Bashir Ahmed Sheikh Group Head Special Assets Management

Mr. A. Wahid Dada Group Head Operations

Mr. Syed Ali Sultan Group Head T reasury & Financial Institutions

Mr. Anwer Umed Ali Chief Information Officer

Mr. Mian Ejaz Ahmed General Manager Legal & Company Secretary

Mr. Zafar Baig Chief Financial Officer

Mr. Riaz Hussain Hamdani Chief Compliance O fficer

Mr. Sajan Hamid Malik General Manager Credit Division

Mr. Haroon Khalid General Manager Risk Management

CHAIRMAN’s MESSAGE

"Our core philosophy of honesty, transparency in customer dealings, product innovation, excellence in customer service and

our commitment to being a responsible corporate citizen pervades this website”

H.H.Sheikh Hamdan Bin Mubarak Al Nahayan

To be the premier organization operating locally & internationality that provides the complete range of financial services to all segments under one roof.

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

deliver quality services that contributes to brand strength, establishes a competitive advantage and enhances profitability, thus providing value to the stakeholders of

the bank.

CORE OBJECTIVES OF BANK ALFALAH LIMITED Objectives can be defined as specific results that an organizat ion seeks to achieve

in pursuing its basic mission. Objectives are essential for organizational success becauset he y s t a t e d ir e c t io n ; a id in e va lua t io n ; c r e a t e s yne r gy ; r e ve al p r io r i t ie s ; fo c us coordina t ion; and provide a basis for effective planning,

organizing, motivat ing, and controlling activities. Bank Alfalah Limited objectives are as follows:-

To c rea te maximum economic va lue fo r sha re ho lde rs through a

cons tant relationship focuses on financial services.

Leveraging BAL Investments in the IT field.

Ongoing assessment of opportunit ies for customers, leading to the constant

development of new products and services.

Promote industr ia l, agricultura l and socio economic processes through the active participation of private and public sector in the country

Division of Bank Alfalah: Bank Alfalah has two divisions:

1. Islamic Banking Division

2. Conventional banking division

FINANCIAL HIGHLIGHTS Bank Alfalah has grown 51.84% in its total assets and 101.35% in its equity. The

Bank netted record pretax profit of Rs. 3.506 billion, a 291.85% increase over the corresponding years to 2004, which includes capital gains on Federal Government securitie s of Rs. 2.19 billion. The deposits of the Bank rose to Rs. 76.7 billion which is 48.4%

higher than co rrespond ing pe r iod la s t yea r (2004 ) and ind ica t ive o f inc reasing cus tomers’confidence in your Bank, because of its superior services and healthy

practices. The Loans and Advances figure stood at Rs. 50.37 billion, an increase of approximate ly71% over the last financial year (2004)

The profit after taxation for Bank Alfalah in 2008 amounted to Rs.1, 301 million and its total assets for 2008 amounted to Rs.348, 990 million. The overall performance of BAL is decreased

in 2008.This Portfolio has been supplemented keeping the Bank’s stringent and prudent policies in view.

BRANCH NETWORK OF BANK ALFALAH LIMITED

The Bank is fully aware that the branch network has direct implications on the services that it provides to its customers. In the year 2005, nine (73) commercial banking branches and five (5) Islamic banking branches were added to the Bank Alfalah network extending

our coverage to one hundred one (101) branches in twenty-three (23) cities nation wide.

But, today the bank is operating through more than 400 branches domestically and an international presence in Afghanistan, Bangladesh and Bahrain, with the registered office at B.A.Building, I.I.Chundrigar, Karachi. Some of the main branches are located in all of the major

cities including: Chakwal, Hyderabad, Lahore, Kasur, Islamabad, Gawadar, Peshawar, Faisalabad, Que

tta, D.I.Khan, Rawalpindi,Sargodha, Sheikhupura, Sukkur, Sialkot, Multan, Murree, Attock District, Gujranwala, Pirmahal, Mirpur KhasLodhranD.G.Khan ,etc

CREDIT PORTFOLIO

A depressive interest rate environment has spurred the competit ion for scarce banking assets in local financial industry. While Bank Alfalah remains a key player in the

market, however, it treads with caution so that the quality of its credit portfolio is not compromised.T he B a nk ha s e mp lo ye d a p r o a c t ive a p p r o a c h in t he fo r m

o f a w e ll - d e s i g ne d a nd transparen t c red it app rova l p rocess . This p rocess benefits from an inherent sys tem o f checks and balances at each level.

FOREIGN TRADE, CORPORATE BANKING AND TREASURY OPERATIONS

Bank Alfalah offers high quality service to its foreign trade clients. Customers are assured of

effic iency and timeliness when dealing with their overseas counterparts. Our clients enjoy the benefit of our well integrated global correspondent-banking network giving them greater global reach. This comprises more than 200 financial institutions all over the world

s ignify i ng the favo rab le reputa t ion tha t Bank Alfa la h enjoys globa lly a s suitab le and responsible banking institution. During previous years, the foreign trade

volume of the Bank has recorded an impressive growth and it had reached to the leve l o f 8% o f to ta l fo re ign trade o f the country. The imports figure of Rs. 46.81 billion and exports figure of Rs. 44.27 billion represented an increase of 38% and 34%

respectively over the last years. The Bank has also been fairly active in the inter-bank market and enjoyed substantial lines of credit.

HUMAN RESOURCE DEVELOPMENT

Development of professiona l skills and knowledge of the employees is essential for

the efficient functioning of any organization. At Bank Alfalah appropriately designed policies and practices have been instituted to achieve this strategic objective. Our state-of-the-art training

centre at Karachi remains indispensable in imparting valuable training to all our team members. This has become especially important considering the pace of change that the

banking industry is exposed to. Consequently training ensures that change is successfully navigated to discover potentially beneficial opportunities that can be transformed into direct

gains for the Bank and its customers. This also positive ly impactsthe confidenc e leve ls o f our emp loyees t rans la t ing into be t te r job pe rfo rmance andsa t is fac t io n. During the yea r 2004 -

2005 we a im to e s tab lish a s imila r t ra ining and development facility in Lahore, Pakistan.

OUTSTANDING WORK ENVIRONMENT

As the work environment plays a great role in this competition age, so the bank has goodwork environment. All the people work with cooperation; managers are so kind

that each problem can be discussed with them. EFFICIENCY

Employees at Bank Alfalah are quite effic ient. They work more than their working hours and it is all according to their will. It also shows their loyalty, commitment to

organization. EMPLOYEE BENEFITS

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

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

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

ORGANIZATION HIERARCHY

OP ERATIONS DEP ARTMENT O pera t ions depar tment o f the Bank Alfa la h Limited is re spons ib le fo r the

overa ll operations of the bank. Operation Department has following segments. a. Cash b. Clearing

c. Remittance d. Account Opening

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

a. Account Opening

b. Cash Department c. Clearing Department d. Remittances

ACCOUNT OPENNING DEPARTMENT

It is most important department of bank. Ms. Bushra deals in this department.

Following procedure is adopted for this purpose

PROCEDURE OF ACCOUNT OPENING

The procedure of opening the account is as given under:

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

has the introduc t io n o f bank ’s s ta ff o r any a lready exis t ing account ho lde r

of bank

Account Opening Form:

First of all, the customer fills the account opening form (AOF). Filling of account opening form includes

type of account, currency of account, name, and address, signature of customer and signature of

introducer and attach a photocopy of national identity card. He also signs an undertaking that he will

follow the rules and regulations of the bank.

Introduction:

The signature and account number of the account holder introducing the account to the new person is

obtained on the account opening form.

Specimen Signature Card:

The signature of the client is obtained on a specimen signature card (S.S Card). The card is obtained with

two signatures from the customer. Every time a cheque is received for payment from the client, the

signature on the cheque is verified by comparing it with S.S Card.

Requisition slip

A requisition slip for Cheque book is also given to the customer. The customer fills it and gives it to the

account opening Officer.

Know Your Customer Form

Every account holder fills this form. The basic purpose of this form is to get some basic information

about the customer’s business and source of incomes.

Account Number:

When all the formalities are completed, an account number is allotted to the customer and all the

information is entered into the computer and register. Then that account number is written on S.S Card

and account opening form.

Depositing of amount in account:

The client deposit cash in the account. For this purpose cash pay-in-slip is used. The minimum initial

deposit is fixed for each account according to the nature of account. For example for PLS / saving account

the minimum requirement is Rs.100 only.

Issuance of a Cheques Book:

After opening an account with the bank, the account holder makes a request in the name of the bank for

the issuance of a Cheque book. Such a request is known as Requisition Slip. BAL issues Cheque books

from 10 leaves to 50 leaves. When he used this book completely then he can apply for another known as

subsequent Cheque Book. This process takes a day because the Cheque books come from the Karachi

head office.

GENERAL PRINCIPLES

No account will be opened on fictitious name.

A ll d o c ume n t s ne c e s s a r y r e q u ir e d fo r o p e n ing a c c o un t mus t b e

t a k e n a f t e r verification from original

N o o p e r a t io n o f a c c o un t s ho u ld b e a l lo w e d & c he q ue

b o o k mus t no t b e is s ue d until all formalities are confirmed.

G e n u i n e n e s s o f i n t r o d u c t i o n s h o u l d b e p r o p e r l y e n s u r e d

No cheques-book is required.

Time period varies from 3 months, 6 months to 1 year & up to 5 years. The profitrate varies according to the time period for which it is deposited.

In case of any premature encashment upon customer request, prevailing premium rate (i.e. Rs. 140/- per deposit of Rs. 100,000/-) shall be recovered from the customer for the current year and will be deducted from the principal amount.

The TDR will be auto renewed for the next term at the prevailing rate of profit. In case, the customer is willing to Ancash the funds at the time of maturity, he/she will furnish the request at least 3 working days prior to its maturity date in writing to the branch to Ancash his/her TDR and credit the principal amount to his/her account (as mentioned in application form)

If a deposit receipt is lo s t o r s to len a dup lica te rece ip t is is sued a fte r

ob ta ining an indemnit y. I t is necessary to obtain a duplicate receipt if origina l is lost because it is so worded that banker undertakes to repay the amount on

the presentation of duly discharged receipt.

Depos its on jo int names a re payab le to cond it io ns agreed a t the t ime

o f the ir acceptance. On expiry the depositor presents the deposit receipt (advice) dully stamped and gets the money in cash or transfer to his account. It

is legally, a depositor cannot demand the payment of his fixed deposit before the expiry of the stipulated period but generally to oblige the customer, banker

allows them to withdraw their fixed deposit before maturity. In these cases customer are asked to forgo interest. Deposit receipts issued is called fixed deposit receipts

TYPES OF ACCOUNTS

The bank different types of accounts exist:

Indivisual Account

Any individual or proprietor of business can open an individual account at BAF.PLS (profit

and loss sharing) saving accounts can be opened with the minimum balanceRs. 5000/- with expected profit rate is 9%.

Following requirements has to be fulfilled for this account.

Signature of customer on back of AOF Mention next of kin (nominee)

Name and A/C # of introducer.

Verified sign of introducer.

Customer signature admitted by officer.

N.I.C photocopy attached. Letter of thanks.

JOINT ACCOUNT

When different people want to or need to share a single account it is called joint account.The names of persons are written on the title of A/C and on S.S. card.Jo int A/C canno t be

opened by s ingle pe rson. Bo th pe rsons have to s ign on cheques . When two or more person neither partner nor trustee open account in their name is jointaccount.

Requirements

Sign of both customers on back of AOF

Sign on joint A/C # mandate

Name and A/C # of introducer

NIC copies of both members.

Mode of operation.

BUSINESS ACCOUNT

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

Sole Of Proprietor Account

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

firm.

Requirement Companies stamp

Declaration of proportion companies’ letterhead.

Sign on account opening form

NIC copy

Verified signature of introducer.

NIC copy

Partnership Account Account title will be the name of the partnership firm.

Requirements

Sign of c

Customers on back of AOF.

NIC copies of partners

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

Partnership mandate (prescribed format)

Companies rubber stampThe A/C is opened in the firm name and all partners designate one

or two persons to act behalf of the partnership firm all acts of the firm jointly and severely.

a) Limited Company Private Limited Company

Public Limited Company

Requirements Restrain on companies letterhead dully attested by chairman.

Sing of all directors on back of AOF.

NIC copies of all directors.

List of directors on companies’ letterhead.

List of memorandum and article of association. Copy of board resolution.

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

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

Companies’ rubber stamp.

Copy of certificate of incorporation should be attested by director, co register anoffice stamp should be affix.

PUBLIC LIMITED

C e r t i f i c a t e o f c o m m e n c e m e n t o f b u s i n e s s S a m e a s h o m e d o c u m e n t s .

CLUB / SOCIETY / ASSOCIATION

These concerns are non trading in nature. They have their own rules and regulat ion and their affairs are mentioned by the committee called as a governing body or

managing committee.

SPECIAL TYPES OF ACCOUNTS

These types o f accounts only can es tab lish a fte r app rova l o f sys tem and opera t iondivision head office: -

o Trust Accounts

o Accounts of executors / administrators

o Accounts of liquidators

o Accounts of local authorities/ municipals.

Major Deposit Account Products

CURRENT ACCOUNT:

Non interest bearing checking account.

Minimum account opening requirement of Rs. 5,000 only.

Free Online Banking

VISA Debit/ATM card can be used at over 30 Million outlets and at 1.5 Million ATMs across the world

No restriction on number of withdrawals and on number of deposits

Profit& Loss Saving Account

Profit & Loss Sharing Saving Bank Account.

Minimum account opening requirement of Rs. 100 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.

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.

Profit and loss saving account cannot be opened by a businesscorporation, however can be

jointly opened by individua ls

Basic Banking Account (BBA) Basic Bank ing Account was introduced by banks on an o rde r by the S ta te

Bank o f Pakistan and is current in nature. Basically it is facility for students or for those people who has less earnings.

Initial deposit for account opening is Rse.. 1,000 with no minimum balance requirement.

Non interest bearing checking account.

Maximum 2 deposits & 2 withdrawals through cheque is allowed while there is no restricyion on ATM withdrawls

Debit card can be used to withdraw cash and make purchases at thousands of outlets across Pakistan which provides access to f unds 24

hours a day.

Term / Fixed Deposit

When customer places money with a banker for a fixed period a deposit is termed as fixed/term/time deposit.Some important features that I have done in practice is that:

No cheques-book is required.

Time period varies from 3 months, 6 months to 1 year & up to 5 years. The profitrate varies according to the time period for which it is deposited.

In case of any premature encashment upon customer request, prevailing premium rate (i.e. Rs. 140/- per deposit of Rs. 100,000/-) shall be recovered from the customer for the current year and will be deducted from the principal amount.

The TDR will be auto renewed for the next term at the prevailing rate of profit. In case, the customer is willing to encash the funds at the time of maturity, he/she will furnish the request at least 3 working days prior to its maturity date in writing to the branch to encash his/her TDR and credit the principal amount to his/her account (as mentioned in application form)

Royal Profit Account

Minimum Deposit requirement of Rs. 50,000 only.

Higher returns on higher balances.

No restriction on number of withdrawals and on number of deposits.

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.

Profit is credited to the customer account on monthly basis.

Kifayat Account

No restriction on ATM withdrawal Any Pakistani resident 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/- and no maximum

limit

Customers can withdraw funds whenever they like. There is no restriction on number of withdrawals.

There is no restriction on deposit transactions. Cheque book and VISA Debit/ATM card will be issued to customers. Profit will be calculated on monthly minimum balance basis and will be credited in the

account on monthly basis.

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.

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):

Free Online Transactions

Free PO/DD Free cash deposit across Pakistan

SMS alerts on VISA Debit/ATM Card Gold VISA Debit/ATM Card with every account

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.

This facility is not available for business and corporate customers.

CASH DEPARTMENT Cash department of Bank Alfalah works under the operation department. This department is

given the complete responsibility of cash, as result of transaction in touch local and foreign currencies. It is also responsible for the book keeping of these transactions

and the safe custody of cash. Out of five counters of cash department one counter is fix for senio r c it izens and females . All counte rs a re dea ling a t the same t ime in depos its , withdraw and online transaction processes. This department

performs the main function. o Cash Receipts

o Cash Repayments

CASH RECEIPTS

In cash depar tment depos ito rs use depos it s lip fo r depos it ing the amount into the ir accounts. The officer checks if the deposit slip is properly filled up

containing title of account, A/C number date and amount in words and figures. Detail on both counter file and cash receipt voucher should be the same. Cash is received by cash receiving officer, twice counted and matched with the deposit slip. The cash details are

written on the back of the deposit slip and are also entered in computer software called “bank Smart”. Cash received stamp is affixed on the face of the deposit slip along

with the signature of the cash receiving officer. Deposit slip is forward to the officer in the cash department. Again proper scrutiny is made by the o ffice r cash depar tment bo th on cash rece ip t and Bank smart so ftware . Officer cash

department sign the deposit slip and finally approved the transaction on Bank Smart. Deposit slip is credited and posted in the concerned accounted in the system. Counter folio is

given the deposition as receipt. One consolidated cash debit voucher is posted in the system to balance the cash.

CASH PAYMENTS OF CHEQUE

All five counters deal with cash payments the process for payment of cheques local andforeign currency is same. First the cheque is presented by the customer or holder to cash payment officer. He confirms’ that it is drawn on the same branch and the particulars of cheque

are properly filled in. one signature of the holder is taken on the back of theCheque. Officer checks the date, amount in words and amount in figures, payee’s

name,c ross ing if any, account number , cheq ue se r ia l number , any mate r ia l a lte ra t ions /endorsements and signature of the customer. Account is debited in Bank Smart

and thencheque is cance lled by the o ffice r . I t is pos ted in the sys tem and pos t ing s tamp and number is affixed on it. At the end officer hands over cash to client.

CLEARING DEPARTMENT Mr Yosuf deals this department. Before discussing it is necessary to know what is“clearing”.

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

ensuing financial settlement is called “clearing”. This facility is provided by the state bank of Pakistan for offsetting of cross obligations between

the different banks. Clearing is of two types:

INWARD CLEARING When cheques drafts, etc, of our branch presented to us for clearing by the SBP. Chequesto be

honored by bank.

OUTWARD CLEARING

The cheques of other banks which the account holder deposits in their accounts are sendfor collection.

CLEARING PROCESS (INWARD/OUTWARD)

Here the local cheques are received that are drawn on BAL. All the cheques are received on one counter along with the paying slips duly filled in properly containing particulars

o f cheques and account ho lde r . C ounte r fo lio o f paying s lip is handed over to thecustomer by putting stamp for cheque received for collection for Bank Alfalah on

it dulysigned by officer. These cheques are scrutinized and cheques for local clearingare separated from OBCs. These are then entered in clearing register and cheques for collecting are entered in OBC register and handed over the bills department of

collection.Clearing officer checks and verifies title of all the cheques deposited by the customer to confirm the good

REMITTANCES

Meanings of Remittances “

Remittance is transfer of fundsfrom one place to another or fromone person to another.”A Remittance is an important service provided by banks tocustomers

as well as non-customers. Since it is not a freeservice 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 c o me s t o t h e is s u in g o r o r ig in a t in g b r a n c h , a s k s f o r ar e mit t a n c e t o b e ma d e , a n d d e p o s it s t h e mo n e y t o b e r e mit t e

d . T h e b a n k c h a r g e s h im a c o mmis s io n f o r t h is service. He may or may not be the branch’s customer.

Remittee:-

A Remittee is also called the beneficiary, or the payee. Theperson in whose name the remittance is made. A remittee isalso the one who receive the payment

Issuing Bank:-

The b ank that s end s o r affec ts the remittanc e, thro ughdemand drafts,

telegraphic transfers, or Mail Transfers.

Paying Bank:- Paying Bank also knows as the drawee branch. The

brancho n w h i c h t h e i n s t r u m e n t i s d r a w n . I t h a s t o m a k e t h e payment (usually located in a different city country).

o Kind of remittances

Transfer within the branch Transfer from one branch to another

Transfer from one bank to another bank in the samecity T r a n s f e r s f r o m o n e b a n k t o a n o t h e r b a n k in t wo 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

Demand draft Demand Draft is a negotiable instrument, which is drawn byone branch to another branch of the same bank. In case of agency arrangement Demand Draft can also be issued byone

branch of the bank payable to other branch of the other bank e.g. DD issued by the BAL payable by UBL.

Explanation: I f a ny p e r s o n w a n t s t o ma k e p a yme n t f r o m o ne c i t y t o another city then he can make payment through demanddraft. Bank charges a commiss ion for

performing this kindof service according to bank rate schedule, which is revisedafter 6 months. Demand draft may be issued or paid. Thereare two ways to issue

Demand Draft:- Issue o f DD aga ins t cash payment2 . Iss ue o f DD aga ins t Deb it o f the accountThe current rate schedule of DD is as follows:-Up to Rs. 10,000 0.25% or Rs.25Which ever is higher Rs.10,001 to Rs. 100,000 0.20%or Rs.40Which ever is

higher Rs. 100,001 to Rs. 10,00,000 0.10%or Rs.200Which ever is higher Rs. 10,00,001 to Rs. 20,00,000 0.75%or Rs.1000

Which ever is higher Above Rs. 20,00,000 0.06%or Rs. 2000Which ever is higher

Process of the issuance of DD:- When a customer requests BAL M.B.DIN Branch to providehim a DD made on his account or against cash payment for a particular city like Islamabad. Then, after having the

totalamount inc lud i ng commiss io n demand d ra ft is is sued infavo r o f the spec ified pe rson in tha t c ity and is d rawn

onB A L , I s la ma b a d B r a nc h . S o , w he n p a ye e in a ny b a nk p r e s e n t s t hi s d e m a n d d r a f t , i t c o n s t i t u t e s t h e i n w a r d clearing of Bank Al-Falah Limited, Islamabad Branch.

Pay order Pay order is a negotiable instrument made by the bank, onaccount of a customer, to pay on order the specified amountto the directed person (payee).

Use of Pay Order:-

Pay orders are used to make payment or to transfer money,with in the same city. Pay order is always drawn on thebank that has issued it. The main advantage of pay order isthat it cannot be

dishonored by the bank. Pay order can beendorsed if it is not crossed. The payee may present payOrder for payment either over the counter for cash paymentor the payee may transfer credit

to his account The current rate schedule of Pay Order is asfollows:

Issuance of Pay Order Rs. 50/- for a/cholder Rs. 500/- for non-a/cholder'

Cancellation Rs. 100/- for a/cholder

Rs. 100/- for non-a/cholder \

Duplicate Issuance Rs.100/- for a/cholder

Rs. 100/- for non-a/cholder

Pay slip “It is a negotiable instrument l i k e c h e q u e i s s u e d b y t h e b a nk o n i t s o w n

a c c o un t t o pay a specified amount to thedirected person.”

Issuance of pay sli Bank issue a pay slip in favor of person, to whompayment is made.

Affixes payee’s Account only stamp. Revenue stamp pasted on it.

Call Deposit Receipt (CDR) B a n k A l - F a l a h L i m i t e d a l s o i s s u e s C a l l D e p o s i t Receipts (CDR).

“It is an instrument like Cheque is sued by the bank on account o f a

c u s t o m e r & i n f a v o r o f a p e r s o n , t o p a y t h e s p e c i f i e d amount”. CDR’s are issued to make payments, especially when a companygoes for some tenders or for purchase of government securities.The bank enjoys the benefit of keeping funds

deposited until the payment is not made.

Rupee Traveling Cheque It is just a shape of Demand Draft. The difference is that it is notdrawn on the

specified branch. It can be drawn on any branch of the same bank.The paying bank has to verify the signatures and after verification payment is made.

ACCOUNTS DEPATMENT

This department is responsible to keep the record of eacha n d e v e r y t r a n s a c t i o n a n d p r e p a r e r e p o r t s a b o u t t h e a

mount of deposits and advances and sent to Head officeor State Bank of Pakistan on monthly, quarterly and yearlybasis.

Activities Budgeting

Accounts department of a bank, for a year makes budget of every branch. Fiscal year of bank starts from January 01and ends on December 31. The accounts department startspreparing budget from October for the next year.

Reporting

The accounts department, in the form of reports, clubs thedetai ls of various departments together. Each and everymi nute de ta i l i s p rovi ded i n week ly, monthly and annua lreport

s. The reports are submitted to head office, SBP andto the gove rnment. The accounts department p repa resmany 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 assetsand charges depreciation on

them. The bank normally usesthe straight-line method to compute the depreciation.It is calculated on monthly basis and charged yearly. Banknot only depreciates the existing assets but also the assetsbut also the assets transferred in and transferred out.

Miscellaneous Functions The accounts department also performs some other miscellaneous functions likei . C l o s i n g E n t r i e s i i . D a i l y a c t i v i t y

c h e c k i n g i i i . R e p o r t G e n e r a t i o n i v . M i n o r e x p e n s e r e c o r d i n g

Closing Entries:- Accounts department also passes the closing entries onmonthly, 6 monthly and yearly

bases to calculate the profitand analyze the overall performance for a certain period.

Daily Activity Checking:- All the opera t ions pe rfo rmed in va r ious depar tments o f Bank Al-

F a lah Limited M.B.DIN a re compute r ized . The functions are performed through the customized software.In order to facilita te double-checking of all

the transactionsdone, every concerned offic ia l also passes vouchers and cheques manually. At the day end all the vouchers passedby va r ious o ffice rs work ing in d iffe ren t depar tments a reg i v e n t o A

c c o u n t s D e p a r t m e n t . F u r t h e r m o r e t h e I . T . d e p a r t m e n t a l s o p ri n t s a v e r y b u l k y r e p o r t o f a l l t h e t r a n s a c t i o n s / e n t r i e s w

h i c h h a v e b e e n f e d i n t o t h e compute r sys tem o f the b ranch tha t day. When bo th o f t he s e t h ings a r e a t t he d e s k o f c o nc e r ne d o ff ic e r , he performs the job of tallying the daily activity report with allthe

corresponding vouchers and cheques, in order to trackdown any discrepancy.

Report Generation:- The reports generated by the accounts department on adaily, weekly, monthly, bi-yearly and yearly are written in aproper format. It is neither necessary nor possible to getacquainted by all of these

reports in a short period of time.Some of the common reports are:-

D a i l y A d v a n c e a n d D e p o s i t Position:- Daily Exchange Position

Daily Fund Managemen

Closing Reports:- o Monthly Assets & Liabilities

o Monthly Budget Review Report

o Monthly Monitory Statement

o Monthly Performance Review Report

Monthly fixed investmentFrom these statements, five reports carry extremeimportance. The five reports are:-

o Daily position of advances and deposits

o Statement of affairs o Daily exchange position report

o Fixed assets statement

o Monthly review of performance.

-Minor Expense Recording:- The account department of BALM.B.DIN Branch has torecord even the minor expenses of the

branch like

CREDIT DEPARTMENT

The basic function of a bank is to receive deposits (at low rate of return) and tolend money (at a

high rate of return). So, the lending operations of a bank constitute a vital part of its business. This department is the source of income and earnings for the bank.Bank’s funds comprises mainly of money borrowed from numerous customers on various accounts such as saving

accounts, current accounts, fixed deposits etc. Whereasthe major part of total income of a bank is generated through the utilization of these funds.The credit department is further divided into two

departments that are as follows: o Credit Marketing

o Credit Administration

There are two types of cerdit which Bank Alfalah offers:

o Commmecial Credit

o Consumer Finance

COMMERCIAL CREDIT:

Commercial credit involves lending to the various types of borrowers for the purpose of meeting

various business capital requirements. Further, from time to time Alfalah also offers the

specialized products which based on different useful facilities which having special features and

terms that are designed to facilitate more type of borrower or business requirement.

The commercial credit facilities of the bank may be divided into two types:

Funded facilities

Non Funded facilities

CLASSIFICATION OF FACILITIES:

Funded Facilities

Funded facility is that facility in which the bank funds are physically involved. The funded

facilities may be divided into the following based on the tenure.

Short term/Working Capital Facilities

Long term/Capital Expenditure Facilities

Short term/Working Capital Facilities

These are the facilities which are designed to meet the short term or working capital needs of the

customer i.e. for financing of various current assets. The tenure is usually less than one year and

the customer may roll over the liability several times within the approved limit during that

period, depending upon their cash conversion cycle.

BAL offers the following short term facilities:

o Current Finance

o Cash Finance

o Short-term Term Finance o FAPC I

o FAPC II o FAFB

o FIM o FATR

Current Finance (CF-Hypo):

This is the most common form of bank lending. In over draft facility, a customer is allowed to withdraw on his account in excess of the balance that the borrowingcustomer has in credit. So

when a customer withdraws in excess of his balance, an overdraft occurs (balance becomes debit. The facility is revolving advance i.e., is the customer may borrow, repay and borrow again, funds up to any amount according to their working capital needs.

This facility can be availed for a certain limit called OD limit and is used to meet the seasonal requirements of cash. In current finance mark up is charged on daily basis on the outstanding amount at each day end, and is recovered on quarterly basis.

Cash Finance (CF-Pledge):

This is also a very common form of borrowing by commercial and industrial concerns, and is made available either against pledge or hypothecation of goods. This is also known as running finance. It is utilized for the creation of current assets and to meet the permanent working capital

requirements. Under this type of facility, funds are disbursed against pledge of an approved commodity. An amount net off a certain margin is disbursed in the account of customer. Funds

can be released against pledge of commodities or liquid securities (share, etc). Some seasonal

commodities on which BAL do pledge are phutti, cotton, cottonseed, oilcake, yarn, cloth, wheat, rice, sugar, leather, etc

o Term finance Term finance is for a fixed period of time, all the amount is transferred to

the borrowers account right in the beginning and interest is charged. The mark-up is

receivedin the end on semi annually basis. Term finance has to be paid within a limit and once itis paid the client cannot take it back.

o FAPC I (Finance against packing credit): Bank provides this facility against LC or sale contract (in favor of exporter). Bank takes 100% security against this type of financing. This

facility is also called Preshipment finance. Afterwards bank receives the payment of exports and adjusts theexporters account.This loan is disbursed by the bank for the preparation of goods once the L/C is received

o FAPC II (Finance against Packing credit): This loan is also known as performance-

based financing. This type of financing isagainst last performance of the exporter. According to SBP exporter can have finance upto the half of amount of previous year export but then the exporter should ensure that theexports he makes are equal to double amount of the loan

for one year. The mark-up ischarged for the period the exporter has used the facility and not for the whole limit.

o FAFB (Finance against foreign bills): This facility is also known as post shipment finance.

This facility is availed by theexporter after he has shipped the goods and sent his documents

for collection. The bank purchases the documents from the exporter and gives him this facility. He will take loanagainst these documents and pays fixed mark-up rate on this facility.

o FIM (Finance against imported merchandise): Finance against Imported Merchandise

(FIM) is a credit facility provided to thecustomer, in L/C transaction. In FIM, bank itself makes the payment to the exporter andthe goods are kept in the possession of bank. Delivery order (DO) is issued by the bank for every time, when the importer makes the payment,

goods are transferred in the possession of importer .

o FATR (Finance against Trust Receipt): The bank also offers credit facility FATR, against sight L/C’s, like FIM. Contraryto FIM, goods are given in the possession of importer. This facility is provided to thecustomer having a credit

o NON FUNDED FACILITIES

The facilities where there is no direct involvement of banks fund. There are two types of unfunded credit line facility, which are as follows:18

o Letter of Credit (LC)

o Letter of Guarantee (LG)

o Letter of Credits

A letter of credit is a written undertaking by a bank (issuing bank) given at the request and accordance of a buyer (the applicant) to the seller (the beneficiary) to a fact

payment up to a stated amount of money within prescribed time limit provided that the terms and conditions are complied with. Letter of Credits issued in the international trade business. There are two types of Letter of Credits:

o Usance LC

o Sight LC

o Letter of Guarantees

Letter of guarantees is a guarantee that the bank gives to an organization on behalf of

the bank. Letter of Guarantee’s are mainly used when a tender for a specific job is filled by acustomer. There are three main types of LG’s

Securities for Advances The advancing of credit involves a great risk for the bank. Therefore, to cover risk, the bank

keeps different tangible and non-tangible securities, before sanctioning the credit facility to a customer. The bankers prefer those securities that carry less risk of depreciation due to market fluctuations and are easily saleable, even under changing market conditions.The securities used

in disbursing advances are as follows:

Pledge Mortgage Hypothecation

Charge Lien on Documents

Guarantees

Pledge:

Pledge is the actual delivery of the movable and tangible property to the lender, as a security for a credit. In pledge, the possession of movable assets is with bank but the ownership remains with

the client. Pledge is considered to be the best security for the bank. The commodities which are being pledged are normally raw material, consumables, finished goods and in certain cases work in process (WIP).

Margin:

For every credit, the bank needs security with margin or cushion. The margin requirements are different for every case. IF, there is 25% margin requirement then to obtain loan of Rs 1 million, the security that is to be pledged should be have worth of Rs.1.25 million. The possession of the

goods is with the bank, so bank keeps these goods in goodowns under the custody of Muccadam. People who look after the pledged goods are called Muccadam. If rice is to be pledged with the

bank, it doesn’t mean that this rice will be kept in bank; such type of goods is kept in the

goodowns of the company. So to make these goods secure bank appoints its own men called Muccadam to take care of the stock and also bank has a board of its own name on the goodown.

Mortgage: In mortgage, immovable assets are offered as security. Mortgage means, to surrender the

proprietary rights of the property. The transferor of property is called mortgagor and the transferee (bank) is called a mortgagee. Usually two types of Mortgages are being created in the

bank for the purpose of collateral. Equitable Mortgage

Registered Mortgage

Token Registered Mortgage

Equitable Mortgage (E/M):

When a mortgage deed is attached with the title documents only and is deposited in the bank, it is known as “Equitable Mortgage” or “Mortgage by deposit of title deed”.It is the most common

form of the mortgage created in bank.

Registered Mortgage (R/M):

When the mortgage deed is between the bank and the client is registered, it becomes a registered mortgage. Mortgage deed is registered with the Registrar of theCompanies. It is an expensive

mortgage and is created when the title documents are weak or the client is not much trustworthy. Token Registered Mortgage

In TRM except of mark leiun on whole property, leiun is marked on some part of property. Red Most of the cudtomers like this type og mortagage because they are not supposed to be

registered the whole property and reduce their cost in order to pay fee for the registeration of whole property.

Hypothecation: When an immovable property is offered for security against credit but both theownership and

possession is left with the borrower, the goods are said to be“Hypothecated”. Securities like machinery, stock etc. are offered for hypothecation. The banker, for his protection, may ask the

borrower to insure. The banker mayhimself do so and recover the expenses from the borrower.The banker may ask the borrower to maintain a balance of goods sufficient to fulfill themargin requirements.For the creation of hypothecation, the bank gets the letter of

hypothecation signed by the client. This deed is got registered in case of both public and private

Lien on Documents: Like charge, bank creates its lien on the documents in its possession, as security.For example, in

case of import transaction under L/C, bank creates lien on importdocuments. o Guarantees:

Along with other securities, bank may rely on other guarantees like other bank guarantees, to protect himself against the advances.

CONSUMER FINANCE

o CREDIT CARD

Bank Alfalah Credit Card is your partner everywhere and is globally accepted and welcomed at

locations displaying the VISA logo. It is accepted at nearly 30 million locations in more than 200 countries around the globe and over 27,000 Bank Alfalah’s establishments in Pakistan.

Alfalah VISA lets you pay for shopping, travel, entertainment, meals and much more. Card members are facilitated through a number of promotions from time to time. In addition, there are

a number of strategic business partnerships with leading local and international brands for purchase of home appliances at exciting Step-BY-Step (SBS) monthly installment plan with free home delivery at lowest interest rates. Salient features are:

Electricity, Sui Gas, PTCL and Warid bills payment through 24 hour Call Center and Auto Debit instructions

SMS for card usage, mini statement, payment receipt confirmation, etc. Cash withdrawal at all 1LINK ATMs Special offer on Warid post paid connections

Rush now to avail matchless features offered by Alfalah VISA.

Platinum Card

It is accepted at nearly 30 million locations in more than 200 countries around the globe

and at over 27,000 establishments in Pakistan.

Titanium

Titanium MasterCard is your partner everywhere and is globally accepted and welcomed

at locations displaying the MasterCard logo.

Gold / Classic

A perfect card combination for all segments of salaried & professional individuals.

Supplementary Cards

Now you can give Supplementary Cards to anyone you care for

CAR FINANCE

Benefits and Features

Quickest processing

No hidden charges

Minimum down payment

Complete repayment at any point of time Balance transfer facility {BTF}

for existing as well as new clients from other Banks

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

o 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. how much extra mony being paid? {mark-up}

Bank Al-Falah's mark-up rates are as follows :

Pak Suzuki Cars 11.9 %

All other local assembled

Cars 12.9 %

Imported Cars 12.9 %

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 Al-Falah Limited.

YOU CAN ACT AS A CO BORROWER

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

18 year and above} to avail the financing facility and can get the car registered

in their names as well.

Documents required

Two passport size photographs.

Copy of National ID card.

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 Al-Falah 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 employed .

Home finance

With this facility, you no longer need to just dream about the home you want

for yourself and your family .We will provide you up to Rs. 10.00 million or

70% of the purchase price of the property (whichever is less), so that you can

realize your dream and enter the reality of owning a home!.

Payment period ranges from 3 to 20 years.

You already own a home, but need extra space for a growing family. Simply

apply for financing of up to Rs. 3.50 million or 40% of the surveyed value of

your home (whichever is less) and get yourself the extra space!

You can stretch payments for up to 10 years

You have a plot and need finance to construct a home, which excites

everyone in your family! No problem. We will provide you up to Rs.10.00

million, or 70% of the estimated value of constructed property to enable you to

say good-bye to rent forever! Even if you don't have a plot, we will provide you

up to 60% of the value of the plot that you have selected to purchase! Do we

excite your imagination?

Payment period ranges from 3 to 20 years.

Does your existing installment on a home finance leave you with nothing to

spend? You need not worry any more because we have genuinely low rates

and payment options that could leave more funds with you each month. With

our BTF, repaying your home finance will not make you break into a sweet!

Transfer up to Rs. 10.00 million or 100 % of the existing finance, whichever is

less.

Stretch your repayment period for up to 20 years again !

The crown jewel of our Home Finance Scheme, the golden opportunity for

someone starting a career to buy an already constructed housing unit so early

in life! We offer a moratorium of up to 3 years in principal payments, for a

financing of upto 20 years. You service only the mark-up element initially, and

principal repayment starts after the end of moratorium period. Home Start is

specially designed for young people to own a home of their own.

TTRRAADDEE FFIINNAANNCCEE DDEEPPAARRTTMMEENNTT

In this era of globalization progress of any country cannot be imagined without considering the

significant role of its imports and exports. Whenever goods are sent or received from other

countries, this is known as trade or international trade . Now day’s banks are playing very

important role in trade and affect our foreign reserves and overall economy as well.

In bank Alfalah trade department is a very well performing and responsible for all foreign

transaction done through their bank. Mr. Ibrahim is in charge of department. The bank acts on

behalf of exporter as well as importer for different parties who are busy in foreign trade.

Trade Finance Department handles two activities:-

Import

Export

Import

Import Department of BAL deals with the import of merchandise. Import can be defined as:

“The bringing of commodities into Pakistan from outside by sea, land or air.”

In other words all goods and services brought into a country that were purchased from

organization located in other countries.

Export

Exports are major sources of earning foreign exchange and play an important role in the

economic development of the country. It helps to utilize excess resources of the country.

“Exports mean selling goods to another country.”

Exports of all eligible commodities through authorized banking channels are admissible under exchange control regulation.

When the bank becomes the exporter bank for a party then the market stability, reputation,

financial position of the exporter is important factor to be considered by bank.

SWIFT

Swift stands for society for worldwide interbank financial telecommunication. It is network

among all banks. World widely all trade transactions are done through this network in banks.

Swift message is among one of the most authenticated message received in trade department.

SWIFT is a secure way to transmit trade related messages worldwide

Increased authenticity of message

Cost effective and speedy way of sending the transaction

NOSTRO ACCOUNTS

NOSTRO account is the account maintained by BAL in different banks of world at places where

BAL doesn’t have its own branch to facilitate its customers. e.g. for dollar transaction BAL has

its accounts in standard chartered bank and CITI bank.

VOSTRO ACCOUNTS

VOSTRO account is the accounts of foreign banks in BAL to facilitate their customers. All the

transactions and sending or receiving of messages among banks is through SWIFT.

FUNCTIONS OF TRADE DEPARTMENT

Trade department performs all the function related to the foreign dealings which includes

Intermediary/source of international payments, Correspondent of exporter or importer and

dealing foreign remittances etc.

1. FOREIGN REMITTANCE HANDLING

One of the most important function bank plays is a source of international payment. Whenever

people e.g. student or any other want to make payment or transfer to any foreign university or

organization bank plays a source of intermediary and handle this remittance.

2. CORRESPONDENT BANK

Bank act as a correspondent between importer and exporter. It can be on exporter side and on

importer side. With the presence of bank the foreign trade becomes more secured for importer

and exporter.

DUTY AS AN IMPORTERS CORRESPONDENT

When the banks on the importer means the buying party side it have to play role of a guarantor.

To be a guarantor of any party the customer (importer), the bank has some demands from its

customer

1. Customer should have account in bank Alfalah.

2. Customer should have a clean account means no default.

3. Customer should have good repute in market.

On the behalf of importer, bank provide his/her customer two types of facilities in favor of

customer

1. LC (Letter of credit)

2. LG (Letter of guarantee)

LETTER OF CREDIT

LC is a written and conditional undertaking by a bank on behalf of the applicant (importer) to

the beneficiary to pay a certain amount at a certain date if the stipulated terms and conditions

are compiled with.

For trade purchase purpose always LC is issued.LC is opened by the importer bank.

Reasons for opening LC

Following are the reasons for opening the LC

Helps importer to make goods available on credit.

A sort of guarantee to exporter regarding payment.

Due to presence of banks it becomes a more secured way of international trade.

Types of LC

LC is divided in two ways

Type Features

1.Sight LC Payment immediately after

shipment

2.Usance LC Payment is done as on agreed

time

Procedure of opening LC

LC is a kind of credit document. In order to open LC the importer comes to BAL. For opening

LC first of all the person should have an account with the bank and have good contractual

relationships with it. . Party comes to the credit department and fills the form which is provided

on the payment of Rs. 100. This form is filled by the party and is return to the bank, it includes

details like.

Name of company

Address

Country of origin

Branch name

Quantity

Insurance company

Shipment from

Shipment to

The credit department makes a credit line approval and sends it to head office for opening of LC.

When approval comes the work of trade department starts.

Documents/Requirements for LC:

The trade department will ask for following documents for opening LC.

LC application request

LC Application Form

Valid import license

Performa invoice / Sale Contract

Letter of under taking form importer

Insurance cover

Customer Portfolio

After verification of securities and details provided by the application, a credit line proposal is

made which is sent to the Area Office. After Area Office approval the LC is issued to the

customer.

Points to Be Considered While Opening LC

Availability of sufficient funds in LC customer account.

Margin of funds availability may vary as per bank requirements.

Value of LC should not increase the value of import license.

After all the documents are being checked and signatures are verified by the bank. A

sanction slip is attached with each form so that the approval can be gained from the manager of

the bank. After the approval is made four copies are prepared and the entries are made on the

computer and the printout is taken the margin amount is checked from the importer account and

if the amount is not found then LC is not opened and the party is informed about the situation.

Working after opening LC

Function of trade department doesn’t ends on the opening of LC. After this bank

sends the LC to the correspondent bank of importer. Exporter collects his LC and procedure of

shipment starts. After shipment the exporter prepares shipment documents and through his

correspondent bank send to importer bank. Importers bank or opening bank receives the

following documents from the exporter’s bank or negotiating bank.

Bill of exchange

Invoices

Bill of lading

Packing list

Insurance

And then as per mutually agreed settlement the payment is done and LC is retired.

LETTER OF GUARANTEE

A letter of guarantee is a sort of LC but it is inland means it is for trade within the Pakistan. It is

usually issued for the pesticide dealings.

It can be

1. Negotiable

Transfer of rights from one person to another.

2. Non negotiable

No transfer of rights can be done.

WORKING OF LG

A person wants to purchase pesticides but he is lacking of funds. But his

account has a very good repute with bank. As a result buyer of fertilizer will go to bank and ask

to issue an LG suppose of 1 million on name of seller. Bank after taking some documents and

issue the LG to buyer on the name of seller and the delivery of goods to seller is done. Now the

time frame of payment of LG is after 1 year but seller needs money now as a result he ‘ll go to

his correspondent bank or to which he has good reputation and ask them to buy LG from him.

Bank will discount that LG to buyer after deducting some charges e.g. at 950000/-. Now the

seller’s bank will send LG to buyer’s bank for marking lien that LG is real and now it is under

this bank. Now the transaction will occur between buyers and sellers bank. As the tenure of LG

will be completed the bank will make payment to seller’s bank.

BANKS AS AN EXPORTERS CORRESPONDENT

When the bank becomes the exporter bank for a party then the market stability,

reputation, financial position of the exporter is first of all checked.

Export Documents

Financial documents

Commercial documents

Transportation documents

Other Documents

Financial documents;

These are instruments used for obtaining payments e.g. cheques, bills of exchange.

Commercial documents

Other than financial documents e.g. commercial invoice, packing lists, bill of lading etc.

Transportation documents

It includes Bill of lading, truck receipt, Railway receipt and airways bills.

Export Facilities

1. FDBC

FDBC stands for foreign documents bills for collection. When the importer and exporter deals

have been done and LC received by the exporter’s bank then the process of FDBC starts. For this

purpose the exporter is informed by the bank that his LC is received and he should start

preparing the shipping documents.

2. Finance against Foreign Bills “FAFB”

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

exporter sends shipment but at that time he needs fund for the operation of the business. He may go to the bank and surrenders all the documents including L/C, Bill of lading etc. bank checks all

the documents to be in accordance with terms and conditions. If they find no discrepancy, they give money to exporter but take some margin on it.

Finance against Packing and Credit “FAPC”

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

Pre shipment

Post shipment

1) Pre Shipment

Pre shipment loans are export related working capital financing.

2) Post Shipment

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

is out of cash after the shipment.

Finance against Trust Receipt “FATR”

Finance is extended upon the trust receipt signed by borrower

Trust receipt is given to the bank by the customer. The customer in turn commits that I will pay on such and such date. Banks pays all taxes and gets merchandise and then gives it to client.

Bank do charges markup against such financing. FATR is for specific period of time. If client does not pay with in specified time then bank will charge higher per day markup

FINANCIAL ANALYSIS

HORIZONTAL AND VERTICAL ANALYSIS

Vertical analysis of Balance sheet

2011 2011 2010 2010 2009 2009 2008 2008

ASSETS Rs .M % Rs . M % Rs .M % Rs .M %

Cash and balances with treasury banks 50882 0 41197 10.0119 35056 9.010273 32687 9.36719

Balances with other banks 17424 3.722 16179 3.9319 22722 5.840125 21581 6.18452

Lendings to financial institutions 7765 1.659 6497 1.57893 14947 3.841755 3315 0.94999

Investments-net 166531 35.57 113425 27.5651 99159 25.48636 75937 21.7614

Advances- net 198468 42.39 207152 50.3432 188042 48.33152 191790 0

Fixed assets 13388 2.86 14204 3.45193 14492 3.724808 13773 3.94696

Deffered tax assets 421 0.09 - - -

Other assets 13290 2.839 12826 3.11704 14649 3.765161 9869 2.82818

Total Assets 5E+05 100 411480 100 4E+05 100 348952 100

LIABILITIES & EQUITIES

Bill payable 5403 1.154 4521 1.09872 3766 0.967957 3452 0.98925

Borrowings 18168 3.881 13700 3.32944 20653 5.30834 13690 3.92318

Deposits and other accounts 401247 85.71 354015 86.0346 324759 83.47123 300732 86.1815

Sub-oriented loans 7148 1.527 7567 1.83897 7570 1.94568 2571 0.73678 Liabilities against assets subject to finance lease - - - -

Deferred and tax liabilities - 115 0.02795 179 0.046007 208 0.05961

Other liabilities 10427 2.227 9258 2.24993 10006 2.571794 0 3.23569

Total Liabilities 4E+05 94.5 389176 94.58 4E+05 94.311 331944 0

Shared Capital 13491 2.882 13491 3.27865 13491 3.467526 7995 2.29115

Reserves 4100 0.876 3819 0.92811 3587 0.921949 3166 0.90729

Unappropriate profit 5248 1.121 2415 0.58691 2690 0.691398 3447 0.98781

Surplus on revolution of asset-net of tax 2937 0.627 2578 0.62652 2363 0.60735 2436 0.69809

Total Equity 25776 5.51 22303 5.4202 22131 5.6882 17044 4.884

HORIZONTAL ANALYSIS OF PROFIT AND LOSS ACCOUNT

2011

11 vs

10 2010 10 vs 09 2009 09 vs 08 2008

ASSETS Rs .M % Rs . M % %

Cash and balances with treasury banks 50882 23.51 41197 17.5177 35056 7.24753 32687

Balances with other banks 17424 7.695 16179 -28.7959 22722 5.287058 21581

Lendings to financial institutions 7765 19.52 6497 -56.5331 14947 350.8899 3315

Investments-net 166531 46.82 113425 14.387 99159 30.58061 75937

Advances- net 198468 -4.19 207152 10.1626 188042 -1.95422 191790

Fixed assets 13388 -5.74 14204 -1.9873 14492 5.220359 13773

Deffered tax assets 421 - - -

Other assets 13290 3.618 12826 -12.4445 14649 48.43449 9869

Total Assets 468169 13.78 411480 5.7607 389067 11.49585 348952

LIABILITIES & EQUITIES

Bill payable 5403 19.51 4521 20.0478 3766 9.096176 3452

Borrowings 18168 32.61 13700 -33.6658 20653 50.86194 13690

Deposits and other accounts 401247 13.34 354015 9.00853 324759 7.989506 300732

Sub-oriented loans 7148 -5.54 7567 -0.03963 7570 194.438 2571

Liabilities against assets subject to finance

lease - - - -

Deferred and tax liabilities - -1 115 -35.7542 179 -13.9423 208

Other liabilities 10427 12.63 9258 -7.47551 10006 -11.3807 11291

Total Liabilities 442393 13.67 389176 6.06187 366933 10.54063 331944

Shared Capital 13491 0 13491 0 13491 68.74296 7995

Reserves 4100 7.358 3819 6.4678 3587 13.29754 3166

Unappropriate profit 5248 117.3 2415 -10.223 2690 -21.9611 3447

Surplus on revolution of asset-net of tax 2937 13.93 2578 9.0986 2363 -2.99672 2436

Total Equity 25776 15.57 22303 0.77719 22131 29.84628 17044

VERTICAL ANALYSIS OF PROFIT AND LOSS ACCOUNT

PROFIT and LOSS ACCOUNT

2011 2011 2010 2010 2009 2009 2008 2008

Interest/Return/Non-interest- INCOME ERANED Rs .M % Rs . M % Rs .M % Rs .M %

Mark up/Return interest earned 1428

1 72.6

9 9414 66.676

1 6835 56.7219

9 6928 58.971

7

Fee, commission and brokerage income 2148 10.9

3 1986 14.066

2 1913 15.8755

2 2116 18.011

6

Dividend income 191 0.97

2 204 1.4448

6 284 2.35684

6 300 2.5536

3

Income in dealing with foreign currencies 1115 5.67

5 1133 8.0246

5 1019 8.45643

2 914 7.7800

5

Gain on sale of securities-net 140 0.71

3 77 0.5453

6 688 5.70954

4 424 3.6091

2

Unrealized (loss)/gain on investments classifies as held for trading -11 -0.06 3

0.02125 2

0.016598 -181

-1.5407

Other income 1783 9.07

5 1302 9.2216

2 1309 10.8630

7 1247 10.614

6

Total non-markup interest income 5366 27.3 4705 33.324 5215 43.278 4820 41.03

Total 1964

7 100 14119 100 1205

0 100 11748 100

Mark up/Return/Non-interest Expenses

Non mark up/Return interest expense - -

Administrative expenses 1383

2 70.4 12578 89.085

6 1092

3 90.6473 9805 83.461

Provision against off-balance sheet obligations - 6 0.0425 -1 -0.0083 28 0.2383

4

Provision against other assets 183 0.93

1 93 0.6586

9 - -

Other charges 199 1.01

3 76 0.5382

8 79 0.65560

2 122 1.0384

7

Total Expense 1421

4 72.3 12753 90.325 1100

1 91.295 9955 84.74

Profit before taxation 5433 27.7 1366 9.6749 1049 8.7054 1793 15.26

Total Taxation 1930 9.82 400 2.8331 119 0.9876 493 4.196

Profit after taxation 3503 17.8 966 6.8418 897 7.444 1301 11.07

Other comprehensive Income

Exchange differences on translation of net investment in foreign branches -419 -2.13 37

0.26206 242

2.008299 490

4.17092

Comprehensive income -transferred to statement of changes in equity 3083

15.69 1005

7.11807 - -

Components of comprehensive incoe not reflected in equity

Surplus/Deficit on revalution for sale securities-net of tax 387 1.97 -437

-3.0951

2 - -

Total comprehensive income 3471 17.7 568 4.0229 1139 9.4523 1792 15.25

HORIZONTAL ANALYSIS OF PROFIT AND LOSS ACCOUNT

PROFIT and LOSS ACCOUNT

2011 11 vs 10 2010 10 vs 09 2009 09 vs 08 2008

Interest/Return/Non-interest- INCOME ERANED Rs .M % Rs . M % %

Mark up/Return interest earned 1428

1 51.7 9414 37.7322

6 6835 -

1.34238 6928

Fee, commission and brokerage income 2148 8.15

7 1986 3.81599

6 1913 -

9.59357 2116

Dividend income 191

-6.37

3 204 -28.169 284 -

5.33333 300

Income in dealing with froeign currencies 1115

-1.58

9 1133 11.1874

4 1019 11.4879

6 914

Gain on sale of securities-net 140 81.8

2 77 -

88.8081 688 62.2641

5 424

Unrealised (loss)/gain on revolution of investments classifies as held for trading -11

-466.

7 3 50 2 -

101.105 -181

Other income 1783 36.9

4 1302 -

0.53476 1309 4.97193

3 1247

Total non-markup interest income 5366 14.0

5 4705 -

9.77948 5215 8.19502

1 4820

Total Income 1964

7 39.1

5 14119 17.1701

2 1205

0 2.57065 1174

8

Mark up/Return/Non-interest Expenses

Non mark up/Return interest expense - -

Administerative expenses 1383

2 9.97 12578 15.1515

2 1092

3 11.4023

5 9805

Provision against off-balance sheet obligations - -1 6 -700 -1 -

103.571 28

Provision against other assets 183 96.7

7 93 - -

Other charges 199 161.

8 76 -

3.79747 79 -

35.2459 122

Total 1421

4 11.4

6 12753 15.9258

2 1100

1 10.5072

8 9955

Profit before taxation 5433 297.

7 1366 30.2192

6 1049 -

41.4947 1793

Total Taxation 1930 382.

5 400 236.134

5 119 -

75.8621 493

Profit after taxation 3503 262.

6 966 7.69230

8 897 -31.053 1301

Other comprehensive Income Exchange differences on translation of net investment in foreign branches -419

-1232 37

-84.7107 242

-50.6122 490

Comprehensive income -transferred to statement of changes in equity 3083

206.8 1005 - -

Comprehensive income not reflected in equity

Surplus/Deficit on revalution for sale securities-net of tax 387

-188.

6 -437 - -

Total comprehensive income 3471 511.

1 568 -

50.1317 1139 -

36.4397 1792

RATIO ANALYSIS

2011 2010 2009 2008 2007 2006 2005 2004

SWOT ANALYSIS SWOT is stands for strengths, weaknesses, opportunities and threats. SWOT analysis is a careful evaluat ion of an organizat ion’s interna l strengths and weaknesses as well as

its environmental opportunities and threats. In SWOT analysis the best strategies accomplish an organiza t ion’s mission by exploit ing an organizat ion’s opportunit ie s and strengths

while neutraliz ing its threats and avoiding its weakness. During my internship I also observe these factors of bank Alfalah and made a conclusion which is as follows:

Strengths:

Main strengths of bank Alfalah 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 satisfyits

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.

The management of the bank is very much concerned with the development and improve me nt o f the work ing environme n t. The bank has s ta te o f the

a r t and purpose built branches where all the modern technologies are provided to get the efficiency of the workforce and the customer satisfaction.

The bank is one of the pioneers of the commercial banks who have started the

Islamic Banking along with their conventional banking. The bank has a separate

network of its Islamic Banking Division which has 16 branches across the country and this network is also expanding at a very good pace.

Weaknesses:

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 give loan only to that people who are

running their businesses from 3 years. It means BAL does not courage the people who want to start their new ventures.

Majo rity o f the work fo rce cons is ts o f young p ro fess iona l, they lack in

the ir experience. And sometimes lack of experience becomes a hurdle while serving the ir

customers. It is the point where they feel difficulty while competing with the other banks.

It was observed that at present the motivat ion level of the employees is not very much high.

The increased workload has resulted in the reduced effic iency of the employees.

Because now the time required for completing the tasks for a single customer has been increased. As a result the environment of the branch has become very messy..

Miss management of time is another drawback in Bank Alfalah branches, The bank official timing for closing is 6 pm but due to miss management employees leave there desk at 8 pm.

Opportunities:

It is mandatory to try to make progress with consistency as well as to adopt changes withneeds 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 oppo rtunit ie s to extend this ne twork as S ta te Bank o f

P ak is tan has prescribed new policies in the prudential regulations.Now BAL has its branches in Kabul, Afghanistan.

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. There is a very good growth trend in the Islamic banking in the country and in the world as

well. BAL has the advantage of having Islamic Banking network and the growth in this pa r t icula r fie ld can be ve ry fruit fu l fo r the ban k , bank has an opportunity

to introduce new products and services in Islamic banking.

Bank Alfalah is surrounding by many competitors it has an opportunity to aggressive marketing and increase its business.

The SBP has revised the interest policy and the interest rates have been linked with

the KIBOR rates. Due to which the banks interest rate has been substantially

increased which will greatly increase the banks’ profitability.

Threats:

Threa ts a re the nega tive trends in exte rna l environme nt a l fac to rs . As on one s ide environment provides opportunit ies to one organiza t ion, on the other

hand it also has to face some threats. Bank Alfalah also has to face this situation.

Other foreign financial institutions like City Bank, HSBC etc also having strong bank ing

po lic ie s and the re ’s a chance tha t peop le might move toward these financial institutions to secure their investments, transactions and related services.

For last seven year there is politica l stability in Pakistan but now again a new layer of politica l instability arises which effects almost all industr ies includ ing Banks.

Due to economic instability like currency depreciation and inflat ion, the bank is

constantly facing a threat e.g. in case of infla t ion the people have low disposal income which means lower deposits in banks.

Other investment opportunit ies like investment in property and gold are giving people more return as compare to banks; it can decrease the deposits of bank.

Due to its privatization policy, the govt. is privatizing the state owned banks. The change in management may result in the increase in the efficiency and productivity

of the banks. Thus it can become a threat for the bank.

PEST ANALYSIS

A broad view of market is important when management is interested in introducing better services for customers. Rapid technological change, global competition and the diversity o f buyers p re fe rences in many marke ts require the cons tant a t tent ion o f

the marke t vouchers to identify promises business opportunities, see the shifting requirements of the buyers, evaluate changes in competitors positioning and guide the choice of which buyers

to target and classify them according to respective segments. Identification of external and macro factors that influence buyers and thus change the size and composition of market overtime involves initially building customer profiles. These influences include:

Political environment

Economic Indicators

Socio cultural environment

Technological factors

Political Environment The events in the last couple of years; ever since the sacking of Chief Justice

Iftikhar Choudhary, Pakistan has faced crisis after crisis, includ ing the lawyers’ movement, violence in Karachi, the Lal Masjid debacle, militancy in FATA and NWFP, Drone attacks, corruption of politicians, mil it a r y opera t ion in S wat and o the r po lit ica l

events - a ll these indubitably made a huge impact on the economy. Stability and law and order situation under the political regime is very important for the economy as a whole. The

present state of the government in Pakistan is directly affecting the po lic ie s o f banks . C ontinuo us po lit ica l changes have d is rup ted the po lic ie s and objectives as each regime brings with it its own agenda. Organizations need time to adjust to one

regime and then work with it towards economic enhancement. Due the

wrong policies of the government, the talibanizat ion also develop in Pakistan and become the internat iona l issue in Pakistan and badly affected the Pakistan repute in

the world and p romote the uncer ta in cond it ions fo r the bus iness in the fo r the bus iness in the P ak is tan. Due to this the investors are not interested in the

Pakistan. .

ECONOMIC INDICATORS The economy of any country directly influences any financ ia l organizat ion.

Economic indicators include Gross Domestic Product (GDP), inflation, balance of payment, debt of the government.

P a k is t a n ’ s e c o no my ha s w it ne s s e d t he mo s t c ha l le n g i n g p e r io d a f t e r p o s t ing s ix consecutive years of healthy economic growth. However, the

strong fundamenta ls were compromised to prevailing global crises that’s shacked the confidence of global investors and FDI flowing in the country. The steep rise in oil prices, soaring inflation, huge fiscal deficits and balance of payments issues coupled with

plummeting for reserves added to the economy’s move to an unstable growth trajectory. Also the load shading is another factor that affects the Pakistan economy badly. This not

the end of the story after this Pakistan’ economy face lot of problems

SOCIO CULTURAL ENVIRONMENT A low saving culture has o ffse t the huge popula t io n advantage this is enjoyed by Pakistan. Also culture is dedicated by

the religion, and in Pakistan a significant segment of the population is reluctant to accept interest for their deposits due to the negative religious implicat ions of such an act. About 70% of Pakistan’s population is based on rural areas and literacy rate of the

country is very much low, thus making it harder for banks to mobilize their deposits within these regions .However , in today world , the cus tomers a re becoming

more inte l l ige n t and through med ia they keep themse lves up t o da te . Thus , the life s t y le and expec ta t ions o f the customers from the service provider is increasing day by day.

TECHNOLOGICAL FACTORS B a nk s in t he d e ve lo p e d w o r ld ha ve b e e n t u r n in g t o he a vy I T inve s t me n t s , w h ic h d iffe rentiate their products, provide response times, enhance

accessibility and improve customer satisfact ion. Though invest ing in state -of-the-art host banking solution,

ATMand P O S (po int o f sa le ) ne tworks , visa , Mas te rC ard , and , smart ca rd s , te lebank in g, inte rne t banking and now mobile banking are common IT

investment in the developed world, it is now that these products and services are gaining faster acceptance in Pakistan. In BAF L techno logy has grea t e ffec t on the

work ing environme nt. BAF L is a lways willing to introduce new computer systems for keeping its staff up to date. With the successful implementat ion of

new centralized database system, the bank also achieved remarkable progress in business process re-engineering, turnaround time compliance by centralizing outward

remittances, account opening and credit administration.

COMPETITOR ANALYSIS

Major Competitors

The growth in the banking industry of Pakistan has led to an increase in the number of banks

both domestic and international to be established and create a competitive industry. For Bank

Alfalah its competitors come in the form of both domestic and international commercial banks

established in Pakistan

However Bank Alfalah feels that its major competitors are as follows:

o United Bank Limited (UBL)

o HBL

o MCB Bank

o Citibank

o Askari Bank

As far as UBL is concerned, Bank Alfalah feels that it is a competitor because UBL itself is a

sister company of Bank Alfalah as the Abu Dhabi Group has stake in UBL and so there is

always a comparison between them.

Furthermore, Askari Bank is a competitor because of the fact that the product and

services that it offers is fairly similar to that of Bank Alfalah and its markup rates are similar

as well. MCB, after being privatized has also introduced a wide variety of services and

with its large number of account holders, it is also a big competitor.

Citibank is a foreign bank that has been established in Pakistan for a long period of time and has

introduced a number of first class services and as Bank Alfalah is also competing in the services

industry, it needs to benchmark its product and services to a bank with a stature to that of

Citibank.

Banks Deposits(in

thousands)

Overall Market Shares

Domestic Banks Market

Shares

Foreign Banks Market Shares

Bank Alfalah 239509391 7% 8%

Askari Bank 131839283 4% 4%

MCB Bank 257461838 8% 8%

United Bank

Limited

335077873 10% 11%

Citi Bank 63103884 2% 42%

Total Market Shares

31% 31% 42%

Total Deposits

(in millions)

3200332

Total Deposits

of Domestic

Banks (in

millions)

3050239

Total Deposits

of Foreign

Banks (in mill)

150093

Their Market Shares

According to a publication of the State Bank of Pakistan, ‘The Banking Statistics of Pakistan

2006’, the total deposits for banks over all were Rs. 3,200,332 (million) and market shares of

the competitor banks in term of deposits and other accounts are as follows:

Table 8: Market Shares in terms of Deposits

As deposits in a bank are an indicator of its performance, in terms of gaining confidence of the people, so this

indicator of measuring market shares in terms of deposits show that bank Alfalah has a very close competition

in terms of deposits.

Another measure to calculate market shares of Bank Alfalah competitors is through their net profit after tax

and the table below shows the market shares.

Table 9: Market Shares in terms of Profit after Taxes

Banks Profits after

taxes Overall Market Shares

Domestic Banks Market

Shares7

Foreign Banks Market

Shares8 Bank Alfalah 1762691000 2% 2%

Askari Bank 2249974000 3% 3% MCB Bank 12142398000 14% 15%

United Bank Limited

9468232000 11% 12%

Citi Bank 2575161000 3% 60% Total Market Shares

33% 32% 60%

Total Profits 84176000000

7 Incorporated in Pakistan

8 Incorporated Outside Pakistan

B ank Alfalah Limite d (B AL) is Pakistan’s fifth largest bank in terms of assets as well as

deposits. It has been the fastest growth story in the industry. BAL has shown excellent asset quality,

sufficient capital levels and good profitability.

RECOMMANDATION Finally, I am going to gives few recommendations on the basis of my personal experience of eight weeks of internship in Main Branch, Multan.

T he ma in a nd b igge s t p r o b le m w h ic h I fo und t ha t ma in b r a nc

h is a lw a ys overcrowded. In rushing hours, there is shortage of seating facility not only for customers but also for the employees of the managers. Number of seats should be increased on priority basis for employees and customers.

Reception desk should be worked properly with the help of skilled person for the purpose

of guidance for customers.

Number of counters should be increased specially in rush hours to reduce the size of

waiting line in rushing hours.

I n t he b r a nc h , t he r e is p r o p e r o ne s e c t io n fo r t he T T , D D a nd A T M c a r d application, which not only save

the time of cash department but also helps the IT department people to concentrate their original task.

Bank Alfalah is only dealing in Money Gram; it should also starting providing theservice

of other money transfer lines like Western Union.

BAL should p rovide loan to s tudents a t low mark up ra te and easy

te rms &conditions.

Bank Alfa la h Limited needs to use more marke ting channe ls such as

rad io to make the public aware of its products and services. In the presence of intense competition Bank Alfalah Limited has to realize the importance of

marketing.

Bank Alfalah has equipped its branches with all major IT tools being used in the industry

like ATM’s, fax machines, photocopiers, printers, latest computers and good connectivity architecture, however it has been observed that when its time to work, there are many

failures seen in the different devices used by Bank Alfalah, especially its connectivity architecture and remains offline with the main server, that creates problems for the

customers

P art ic ipa t ive manageme n t concep t should be adop ted , where ideas fr

om theemployees should also be taken, not only for developing products but also on service, efficiency, employee morale etc. in order to improve them.

OBSERVATION AND CONCLUSION

I observed the bank Alfalah a financially sound bank. Its profits are increasingly year by year. Its staff is very good and sincere with the bank. Bank Alfalah under the leadership of Sheik

Nahayan Mabarak Al-Nahayan has made significant progress in build ing and strengthening both the corporate and retail banking sectors in Pakistan. The bank attained number 2 positions in terms of its balance sheet size amongst the private

banks.Bank Alfa la h views spec ia liza t io n and se rvice exce llenc e a s the co rne rs tone o f its strategy. The people at bank realize that innovation, creativity,

reliability, customized, services and their execution are they key ingredients for their future growth. Revenues from these activities have started yielding dividends and they expect significant growth. They a re aware tha t they have s tepped into the 21 st

C entury and they must mee t its c ha l le n ge s b y a c q u ir i n g t he h ighe s t le ve l o f t he t e c hno lo g y . T he y w il l t hus b e accelerating their

technologica l advance to enable them to distribute their products and services through most efficient and high tech means. They say that they will continue to invest in the modern tools and substantial allocation to resources will be made to achieve h is o b j e c t ive d u r ing

t he c u r r e n t ye a r . P ho ne B a nk in g a nd c r e d it c a r d ha ve b e e n introduced in many cities