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INTERNSHIP REPORT Allied Bank of Pakistan MBA (Banking & Finance)

ABL Internship Report

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Page 1: ABL Internship Report

INTERNSHIP REPORT

Allied Bank of Pakistan

MBA (Banking & Finance)

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAB

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In the Name of

Most Merciful and Compassionate the Most Gracious and Beneficent whose help and guidance

I always Solicit at every step, at every moment.

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PREFACE

This Report is specially meant for the student of MBA. It is concerned to a brief study of the operation, Function, tasks and services of Allied Bank of Pakistan.

Banking play very important role in the commerce and economic development of a country. Now-a-days banks are using different modern technologies, which influence the managerial activities, that’s why I decided to do my internship Training in the bank.

In preparation of this Report is have tried my best to provide all Possible information about the operation, function and tasks of ABL in brief and comprehensive form. It also includes a brief department worked during internship. I have also tried my best to use simple and easy words and language.

Then internship report ends with some recommendation after identification of some problems observed during the course of internship.

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ACKNOWLEDGEMENT

All praise to Almighty Allah, the most merciful and compassionate, who give me skills and abilities to complete this report successfully

I am grateful to my parents who are always been a source of encouragement for me throughout my life and from start to the end of this report

I am thankful to all my staff members so Allied Bank Of Pakistan Limited G - 9 Branch Islamabad.

I found every one very co-operative and helpful for providing me the Theoretical as well as practical knowledge about the function and operation of the bank.

I express my greatest gratitude to my kindhearted Supervisor Mr. Asad Ullah Makhdoom who was the Person who made me able to write this report, His enthusiasm shows the way forward to me to achieve this success and who kept me in high spirit through his appreciation. He helped me a lot each time I went up to him.

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EXECUTIVE SUMMARY

ABL is one of he most dynamic and progressive bank in the banking industry of Pakistan. This is due to its impressive growth and development. It has 756 branches through out the country. It also provides facilities online banking and ATM. Allied Online Banking is a unique service being offering from Allied Bank.

I did my internship of six weeks in ABL G - 9 Branch (0681) from 15-09-09 to 31-10-09. It is one of the small branches of ABL, which is yet to be renovated. I selected this branch because of two reasons. First, I was of the view that one can find more learning opportunities in a small branch as compare to a big one. Secondly it is situated near to my residence.

My report contains all the things which I learned during my internship in ABL G-9 Branch. The report contains overview of ABL, organizational structure of ABL, functions of accounts and finance department of ABL, critical analysis of theoretical concepts, financial analysis of ABL, weaknesses of the ABL, conclusion and recommendations as required.

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TABLE OF CONTENTS

S.No. Topic Page No.

1 Objectives of Studying the Organization 1

2 Overview of the Organization

2.1 History Of ABL2.2 Nature Of The Organization2.3 Business Volume2.4 Number of Employees2.5 Product Lines & Services of ABL

1

15677

3 Organizational Structure

3.1 Overall Organizational Structure3.2 Organizational Structure of ABL G-9 Branch3.3 Various Departments of ABL

14

141616

4 Structure of Finance/Accounts Department

4.1 Structure of Finance/Accounts Department4.2 Finance & Accounting Operations4.3 Role of Financial Manager4.4 Technical Methods (Use of Electronic data)4.5 Funds Management

31

3132333450

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5 Theoretical and Practical Concepts

5.1 Daily Schedule For Evaluate A Bank’s Money Position5.2 Account Opening Procedure5.3 Customer Privacy

53

535353

S.No. Topic Page No.

6 Financial Analysis

6.1 Balance Sheet 6.2 Income Statement6.3 Ratio Analysis6.4 Horizontal Analysis of Balance Sheet6.5 Horizontal Analysis of Income Statement6.6 Vertical Analysis of Balance Sheet6.7 Vertical Analysis of Income Statement6.8 Organizational Analysis6.9 Future Prospects of ABL

54

545555697173757778

7 Weaknesses of ABL 80

8 Conclusion 84

9 Finding and Recommendations 85

10 References 92

11 Annexes

10.1 Annexure I10.2 Annexure II10.3 Annexure III

93

939495

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1. OBJECTIVES OF STUDYING THE ORGANIZATION

Objective of studying the organization is to analyze the performance of the organization

and to know the all possible information about the operation, function and tasks of ABL

in brief and comprehensive form. Relate theoretical concepts with practical concepts and

seek knowledge. Learn with practical experiences and analyze to what changes occur in

banking industry. Another objective is to learn the financial analysis by computing

different ratios that must be imperative for any business. Other objectives are:

To get acquaintance to the banking operations.

To know what sort of changes it brings in managerial activities.

To see the application of our Professional studies especially.

To objectively observe the operations of Allied Bank of Ltd in general and the

operations of ABL, in specific.

To make recommendations or implementation plans for the improvement of the

operations of ABL, in the light of professional studies.

2. OVERVIEW OF THE ORGANIZATION

ABL is one of the largest banks in Pakistan, serving the Country for over 60 years in all

spheres at banking and financial Services.

2.1 HISTORY OF ABL

Established in December 1942 as the Australasia Bank at Lahore with a paid-up share

capital of PKR 0.12 million under the Chairmanship of Khawaja Bashir Bux, and his

business associates, including Abdul Rahman Malik who was amongst the original Board

of Directors, the bank had attracted deposits, equivalent to PKR 0.431 million in its first

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eighteen months of business. Total assets then amounted to PKR 0.572 million. Today

Allied Bank's paid up Capital & Reserves amount to Rs. 10.5 billion, deposit exceeded

Rs. 143 billion and total assets equal Rs. 170 billion. The Allied Bank's story is one of

dedication, commitment to professionalism, adaptation to changing environmental

challenges resulting into all round growth and stability, envied and aspired by many.

2.1.1 1942 - 1947: Pre Independence

In the early 1940s the Muslim community was beginning to realize the need for the active

participation in the field of trade and industry. The Hindus had since the late 1880s

established a commanding presence in these areas and industry, trade and commerce in

the undivided Sub-continent was completely dominated by them. Banking, in particular,

was an exclusive enclave of the Hindus and it was widely believed, and wrongly so, that

Muslims were temperamentally unsuited for this profession.

It was particularly galling for Khawaja Bashir Bux and Abdul Rahman Malik to hear the

gibe that Muslims could not be successful bankers. They decided to respond to the

challenge and took lead in establishing this first Muslim bank on the soil of Punjab that

was to become Pakistan in December 1942; by the name of Australasia Bank Limited.

The initial equity of the Bank amounted to Rs 0.12 million, which was raised to Rs 0.5

million by the end of first full year of operation, and by the end of 30th June 1947 capital

increased to Rs. 0.673 million and deposits raised to Rs 7.728 million.

2.1.2 1947 to 1974: Australasia Bank

Australasia Bank was the only fully functional Muslim Bank on Pakistan territory on

August the 14th, 1947.

It had been severely hit by the riots in East Punjab. The bank was identified with the

Pakistan Movement. At the time of independence all the branches in India, (Amritsar,

Batala, Jalandhar, Ludhaina, Delhi and Angra (Agra)) were closed down. New Branches

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were opened in Karachi, Rawalpindi, ISLAMABAD, Sialkot, Sargodha, Jhang,

Gujranwala and Kasur. Later it network spread to Multan & Quetta. The Bank financed

trade in cloth and food grains and thus played an important role in maintaining consumer

supplies during riot affected early months of 1948. Despite the difficult conditions

prevailing and the substantial set back in the Bank’s business in India, Australasia Bank

made a profit of Rs 50,000 during 1947-48.

By the end of 1970 it had 101 branches. Unfortunately it lost 51 branches in the

separation of East Pakistan which became Bengladesh. The bank did well in despite

losing lot of its assets. By the end of 1973 the bank had 186 branches in West Pakistan.

2.1.3 1974 to 1991: Allied Bank

In 1974, the Board of Directors of Australasia Bank was dissolved and the bank was

renamed as Allied Bank. The first year was highly successful one: profit exceeded the Rs

10 million mark; deposits rose by over 50 percent and approached Rs 1460 million.

Investments rose by 72 percent and advances exceeded Rs 1080 million for the first time

in bank history. 116 new branches were opened during 1974 and the Bank started

participation in the spot procurement agriculture program of the Government. Those

seventeen years of the Bank saw a rapid growth. Branches increased from 353 in 1974 to

748 in 1991. Deposits rose from Rs 1.46 billion, and Advances and investments from Rs

1.34 billion to Rs 22 billion during this period. It also opened three branches in the UK.

2.1.4 ESOP Revolution (Employee stock ownership plan)

Under the philosophy of ESOP ownership of an enterprise is transferred to its employees

who are in an advantageous position in running the enterprise. The added advantage of

ESOP that it strengthens the workers stake in the free enterprise system, in job securities,

better profitability & unique corporate culture symbolizing family feelings & professional

fraternity.

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September 10,1991 is the historical date as on this date the bank became the country’s 1st

bank to be reconstituted as an institution jointly owned by its employees through the

unique concept of Employees Stock Ownership plan (ESOP) developed by the Allied

Management Group headed by Mr. Khalid Latif enabled the bank staff to react creatively

to the privatization challenge. More that 7500 staff members acquired a share in the bank.

The articulation of the ESOP is a landmark in the financial history of Pakistan-indeed of

the entire world .It is a practical step ensuring an increase in workers participation and in

productivity a means for enhancing an equitable redistribution of financial assets & an

effective strategy for achieving the cherished goal of national self-reliance.

2.1.5 1991 to 2004: Privatization

As a result of privatization in September 1991, Allied Bank entered in a new phase of its

history, as the world’s first bank to be owned and managed by its employees. In 1993 the

First Allied Bank Modaraba (FABM) was floated.

After privatization, Allied Bank registered an unprecedented growth to become one of the

premier financial institutions of Pakistan. Allied Bank’s capital and reserves were Rs.

1.525 (Billion) and assets amounted to Rs. 87.536 (Billion) and deposits were Rs. 76.038

(Billion). Allied Bank enjoyed an enviable position in the financial sector of Pakistan and

was recognized as one of the best amongst the major banks of the country.

In August 2004 as a result of capital reconstruction, the Bank’s ownership was

transferred to a consortium comprising Ibrahim Leasing Limited and Ibrahim Group.

Today the Bank stands on a solid foundation of over 63 years of its existence having a

strong equity, assets and deposits base offering universal banking services with higher

focus on retail banking. The bank has the largest network of on-line branches in Pakistan

and offers various technology based products and services to its diversified clientele

through its network of more than 700 branches.

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2.1.6 2005

In May 2005 Ibrahim Leasing Limited was amalgamated by transfer to and vested in with

and into Allied Bank Limited. ILL shareholders were issued ABL shares in lieu of the

ILL shares held by them. Application for the listing of ABL shares in all the Stock

Exchange Companies of Pakistan was made. ABL was formally listed and trading of the

shares of the Bank commenced w.e.f. the following dates.

Islamabad Stock Exchange - 8th August 2005

Lahore Stock Exchange - 10th August 2005

Karachi Stock Exchange - 17th August 2005

2.1.7 2007

Mohammad Aftab Manzoor has taken charge as CEO and President of the Bank on

August 13 2007. He is an ex-president of MCB Bank Ltd.

2.1.8 Today

Today, with its existence of over 60 years, the Bank has built itself a foundation with a

strong equity, assets and deposit base. It offers universal banking services, while placing

major emphasis on retail banking. The Bank also has the largest network of over 756

online branches in Pakistan and offers various technology-based products and services to

its diverse clientele.

2.2 NATURE OF THE ORGANIZATION

The main objective of the bank is to accept deposits and provide loans to its customers

and also to be more efficient in providing services. The bank maintained its commitment

to most efficient and personalized services to its customers. Allied Bank of Pakistan

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introduced many remunerative schemes for its depositors and introduced computer

services for the first time in the banking history of Pakistan. Allied bank gives advances

to small, medium and big industries, commercial establishment, agriculture, construction

companies and other needy persons. Allied bank collects electricity gas and telephone

bills from public and over hundred branches of Allied Bank Ltd. deal in foreign exchange

were facilities are given to financial and commercial so its ultimate objective is to receive

funds from the depositors and provides loans/credit facilities to different sector including

trade, industry and agriculture in its most branches.

2.3 BUSINESS VOLUME

Description (in

Millions) 2005 2006 2007 2008 2009

Revenue 13,176 41,423

32,5

37

40,1

49

52,

864

Investments 57,657 45,269

47,1

56

84,1

51

84

,587

Deposits 126,392 161,140 206,031

263,

972 297,475

Advances 69,949 119,866 151,705

178,

524

2

23,640

Source: Annual Report of ABL 2009

Volume of revenue has been increased since 2004 due to increase in interest income

earned. Volume of investments has been increased since 2007 because of increase in

long-term investments by ABL. Volume of deposits has also increased due to increase in

consumer deposits in past three years after great increase in inflation. Volume of

advances in 2009 is also showing a great increase.

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2.4 NUMBER OF EMPLOYEES

Following is the total number of employees working in 756 branches of ABL:

Management Employees 2,945

Support Staff 3,802

Total Number of Employees of ABL 6,747

Following is the total number of employees working in the G-9 Branch of ABL:

Management Employees 2

Support Staff 13

Total Number of Employees in ABL G-9 Branch 15

2.5 PRODUCT LINES & SERVICES OF ALLIED BANK LTD

Following are the various product lines and services offered by ABL:

2.5.1 All-Time Banking (ATM)

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Allied Bank has introduced the Allied Cash last year also referred to as ATM card. The

customer will now have the convenience of withdrawing cash from any of ABL’s ATMs

(Auto Taller Machine) conveniently located in major cities at any time of the day or night

even on closed days/holidays. Other services include customer being able to inquire

about the balance of his/her account or printing an abbreviated (mini) statement showing

the most recent eight transactions up to the previous working day.

In order to obtain Allied Cash+ Card, the customers simply have to fill out prescribed

Application form available at selected Allied Bank Branches in Karachi and Lahore. The

dully-filled form should be handed over the Manager of the Branch where the customer is

maintaining his account. Non-account holders would first have to open an account with

Allied Bank to have access to this facility. The Customer can feel absolutely safe his

Allied Cash + Card because it can only be used with the Personal identification Number

(PIN), which is given to him by the bank. Graphical representations have been employed,

where appropriate, for ease of understanding.

2.5.2 Allied Umrah Aasan

This unique scheme facilities those persons, who cannot afford to incur the lump sum

expenses for Umrah. It allows the intending pilgrims (Aazmeen) to make payment of

Umrah charges in monthly installments. Its salient features are:

It is free of interest and markup.

Using this scheme family, relatives and household servants can be sent for

Umrah.

Around 2500 Aazmeen are to be sent for Umrah every month.

Lucky winners of the draw are duly informed by their respective branches.

Total package for Aazmeen from Karachi is being Rs. 45,000. Aazmeen from

Lahore and Islamabad will have to pay an extra Rs. 3,000/- for Airline fare.

Umrah packages are of 10 days duration. The charges include Airline return

ticket.

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Fee Visa, family accommodation and traveling within Saudi Arabia (Jeddah to

Makka, Makka to Madina and Median to Jeddah).

Application for whole Family/Group can be filed through a single Application

Form. All applicants of a family/group are sent for Umrah even if only one

member of that family/group is declared successful in the draw.

Due to any reason if Umrah Applicant needs to withdraw his/her application,

he/she will given a refund of all money deposited through installments till that

time.

At the time of submitting the application Aazmeen has to deposit Rs. 2,000 per

person as first installment. Rest of the money is to be deposited through monthly

installments of Rs. 2,000/- person on every 5th day of the month.

If an Applicant wins in the draw he/she is required to pay the balance amount

through monthly installments on returning from Umrah.

Aazmeen have to submit a copy of their NI Cards and Passports with the

application.

Applicants have to deposit the monthly installment using deposit slips still 5th of

every month. Defaulters will not be included in the draw.

2.5.3 Master Cards

The customer can now become the holder of a true Credit Card here in Pakistan. Allied

Bank under license from Master Card International, U.S.A. issues its Master Card to

anyone meeting the eligibility criteria. With the Allied Bank Master Card the customer is

assured of a service meeting the highest international standards maintained by Master

Card.

The Allied Bank Master Card helps the customer pay without the complications of cash

or checks. It doesn’t cost the customer anything if he pays in full within the due date, but

if he decides to spread the payments over several months a service charge @ 2.50% per

month is charged. Allied Bank – Master Card is safer than cash and simpler than checks.

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The customer has been an account holder with the Allied Bank to apply for the Allied

Bank – Master Card that is available to the customer for an initial fee of Rs. 2,000/- (Rs.

500/- membership fee + Rs. 1,500/- annual fee). Once the customer obtains his card, he

simply presents it at Shops, Supermarkets, Hotels, Pharmacies, Nursing Homes,

restaurants, Petrol Pumps and hundreds of other establishments which display the

familiar Master Card sign throughout Pakistan and abroad.

Once purchases are made, the customer signs a voucher and that’s it he is not required to

take extra troubles. Every month the customer receives a statement showing details of

transactions, outstanding and the minimum amount due. The statements also give the last

date for payment so the customer can avoid paying service charges.

In order to avoid disruption in use of the card, it is essential that a least minimum payable

amount of the bill be paid regularly. In case the required payment is not received the

operation of the Master Card is automatically, suspended by the system. In such case, the

card is activated after receipt of overdue payment only.

2.5.4 Allied Tahafuz Deposit Scheme

Brings the customer unparalleled life insurance covers along with attractive monthly

profit. Minimum Deposit amount – Rs. 50,000/- or multiples thereof. Insurance cover up

to - Rs. 5,000,000/. As Competitive rate profit. The features of this scheme are:

Prospective client who will maintain a return free deposit for at least 3 months

shall eligible to avail interest free/mark-up free finance.

Payment of profit on monthly basis, automatic renewal on face value.

Life insurance up to 5 times of the customer’s deposit amount with no extra cost.

Premium shall be paid by the bank.

Full payment of claim in case of – Death – Permanent total Disability.

Eligibility Age – 18 to 64 years.

No medical examination for:

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- Deposit up to Rs. 500,000/- and age up to 60.

2.5.5 Allied Karzas Scheme (No Interest/Markup)

Allied Bank moves a step forwards by introducing interest free banking through Allied

Karzas Scheme. The aim of this scheme is to provide an opportunity to the depositors to

take advantage of a real Riba Free economic environment and avail following:

Prospective client will maintain a return free deposit for at least 3 months shall be

eligible to avail interest free/mark-up free finance.

Deposit amount Rs. 100,000/- and multiples thereof.

Minimum deposit period, 3 months with automatic rollover facility.

Premature encashment allowed, without any penalty/charge.

Minimum deposit period for eligibility of finance, 3 months.

Maximum period of finance, 6 months.

Maximum period to avail finance, 12 months from the maturity of deposit.

Every month (30 days) completed by the deposit shall be taken into account for

calculation of entitlement of finance.

Finance proposal processing fee Rs. 100/- (non-refundable) plus documentation

cost on actual basis.

In case of default/delay in repayment @ 0.055% per day (20.075% p.a._ to be

placed in charity A/C.

Formula for calculation of entitlement of finance.

- Same amount of finance for half the period of deposit or

- Same period of finance for half the amount of deposit.

2.5.6 Other Products

Home Remittances

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The Bank having a network of 755 branches all over Pakistan, undertakes to

provide safe and instant payment of remittance from expatriates, routed through

designated foreign exchange companies and correspondent banks with whom

special arrangements have been made in this regard. Through the Allied Express

Services, ABL ensures that beneficiaries’ Accounts in ABL branches are credited

with in 48 hours of receiving home remittance information from overseas.

Hajj Services

The Bank serves the intending pilgrims by helping them in performing this

religious obligation. The Hajj forms and other related services are provided by the

bank. However, the terms and conditions for accepting the Hajj forms from

intending pilgrims are in accordance with the Hajj Policy announced by the

government, each year. Hajj applications are available with all branches during

Hajj season, immediately after the Hajj policy is announced by the Government of

Pakistan.

Utility Bills

All branches of the Bank collect utility bills of electricity, gas and telephones.

For convenience of the customers, Utility Bills are collected by the branches

during banking hours and also in he evening banking on all working days. Bills

can be paid through cash or checks. Consumers may drop bills with crossed

checks into a drop box available at the branches under “Checks Drop-in” system.

Agricultural Finances

Bank under Agricultural Financing Schemes envisaged by he State Bank of

Pakistan extend short, medium and long term, farm and non-farm credits. The

farm credits are extended for production (inputs) and development purposes. Non-

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farm credits are allowed for livestock (goats, sheep and cattle), poultry, factory

including social forestry and fisheries (inland and marine excluding deep sea

fishing).

Lockers

Allied Bank Lockers are available in three different sizes Small, Medium and

Large on a yearly fee. Locker holders need not have an account in the Bank.

Import Export Business/Trade Finance

ABL Provides highly efficient trade finance services for import/export business

for our clients/customers through large number of authorized branches where

trained and motivated staff is available to handle the business on behalf of

customer.

Allied Bank Rupee Travelers Checks

Carrying cash to strange alien location can prove to be risky as a single incident

can render one without monetary backup of any sort. Hence banks introduce

traveler’s checks in order to protect against any contingency.

Seasonal Finance

Running Finance is a short-term loan allowed by the bank for a

period of one year. The running finance account can be operated and

daily sale proceeds can be deposited into the account. The markup is

recovered on the products of daily outstanding balance. The running

finance is suitable for meeting day-to-day financial needs of the

business.

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Cash Finance is allowed against pledge of goods. The delivery of

goods is made against payment.

Demand Finance is disbursed in lump sum or in accordance with the

agreed disbursements schedule and it is repayable as per the agreed

installments, which could be monthly, quarterly, biannual or annual.

3. ORGANIZATONAL STRUCTURE OF ABL

Organizational Chart of ABL

Note: Organogram of ABL is given in Annexure I.

3.1 OVERALL ORGANIZATIONAL STRUCTURE OF ABL

The day-to-day affairs of ABL are managed by Management of ABL who has to report to

Board of Directors of ABL.

Their reporting lines are given as follows:

Head Office

Regional Offices

Zonal Offices

Branches

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Management of ABL is given as follows:

Asim Tufail (Group Chief, Consumer & Personal Banking)

Fareed Vardag (Chief Risk Officer)

Iqbal Zaidi (Group Chief, Compliance)

Mohammad Abbas Sheikh (Group Chief, Special Assets Management)

Mohammad Aftab Manzoor (Chief Executive Officer)

Muhammad Jawaid Iqbal (Group Chief, Corporate & Investment Banking)

President

Senior Vice President

Vice President

Executive Vice President

Senior Executive Vice President [rosodmemtPresident

Regional Head Managerxecutive Vice

President

Branch Manager

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Muhammad Shahzad Sadiq (Group Chief, Audit & CRR)

Muhammad Yaseen (Group Chief, Treasury)

Mujahid Ali (Group Chief, Information Technology)

Shafique Ahmed Uqaili (Group Chief, Human Resources)

Khawaja Mohammad Almas (Head, Core Banking Projects)

Tahir Hassan Qureshi (Chief Financial Officer)

Tariq Mehmood (Group Chief, Operations)

Waheed ur Rehman (Company Secretary)

Zia Ijaz (Group Chief, Commercial & Retail Banking)

3.2 ORGANIZATIONAL STRUCTURE OF ABL G - 9 Branch

In ABL G-9 Branch, main authority lays with the Branch manager, Mr. Muhammad

Tanvir who has to report to Regional Head Officer. Mr. Tariq Abassi is the Customers

Service Manager who reports to the Branch manager. Customers Service Manager

furthers looks at the various departments or desks of the branch and rest of the staff has to

report to him.

Note: Organogram of ABL G-9 Branch is attached in Annexure II.

3.3 VARIOUS DEPARTMENTS OF ABL

In the same branch different departments of ABL are working. So I got the opportunity to

know briefly about every department.

3.3.1 IT Department

In ABL, IT department performs several duties that are as under:

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I. Daily Transactions

To record all the transactions in case of deposits made by the people and also to

record all the withdrawals made by the people or customers. Each transaction has to

be recorded in its appropriate head of account with the help of prescribed codes.

II. Vouchers

To record all the vouchers made by the remittance department. Remittance

department have to prepare debit and credit vouchers for about every transaction

recorded in their department. Then these vouchers are sent to computer operator to

record those in computer.

III. Advices

To record all advices received from other branches. Most of the-inter branch or intra

branch- remittances are subject to ultimate receipt of advices from the corresponding

branch to materialize the transactions. These advices also have to be recorded in

computer.

IV. Statements (End Of Day report)

To close the daily record a number of statements have to be printed out, like:

Day’s transactions (sequence)

Overdrawn facilitated a/c statement

Markup sheet

Inter branch transactions

Detail of PLS and Current a/c

• Day’s transactions (a/c wise)

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• Operative, Dormant, Inoperative and Unclaimed a/c

All ATM transactions

Detail of GL entries (official & non customer transactions)

Summary of all a/c (debits, credits & balances)

Profit due, transferred, disbursed, etc.

3.3.2 Deposits Department

Accounts Department of ABL deals with deposits of ABL. Bank borrowing funds from

outside parties is more important because the entire banking system is based on it.

Receiving of deposits is a basic function of all commercial banks. Commercial banks do

not receive these deposited for safekeeping purpose only. When the bank receives the

amount of deposited as a depositor, it becomes the owner of it. The bank may therefore

use these deposits, as it deems appropriate. But there is an implicit agreement that the

amount owned by the bank will be paid back to the depositors on demand or after a

specified period of time.

The borrowed capital of the bank is more than the bank’s own capital. Bank’s borrowing

is mostly in the form of deposits. These deposits are lend-out to different parties. Larger

the difference between the rate at which these deposits are borrowed and the rate at which

they lend-out the greater will be the profit margin of the bank. Larger the funds lend-out

the greater will be the return earned on them and greater the amount of return on these

deposits earned greater will be the profit for the bank. It is because of this interrelated

relationship. Deposits are referred to as the “life blood small” for any banking sector.

There are numbers of account that ABL offers to its customer keeping in mind their

needs and dealing as follows:

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I. Saving Bank Account P & Loss Account

In Pakistan the saving Bank accounts are know as profit and profit and loss sharing

accounts (PLS A/C) fowling the illumination of bank. The owners of such account are

not allowed to withdraw money more than once are twice a week. In case of

withdrawal of large sum, the depositor is required to give to prior notices a week or

two. Thus the bankers are not required is always available to bank for giving to loans

to their customers. Thus these deposits also serves as source of credit certain by the

commercial banks.

The rate or profit on this type of account varies from time to time. All the commercial

banks declare the rate of profit every year that is paid on these accounts on the basis

of their monthly credit balance. The bank will determine the proportion of profit & its

decision will be final. Profit will be determined on daily product basis while it will be

paid on monthly basis & will be paid on the minimum balance between the first day

& last day of the month. Zakat will be deducted on the exceeding amount as

exempted from the Zakat deduction. Taxes will be imposed according to the rules &

regulation. In Pakistan post offices & national saving centers also maintain this

savings bank account to encourage saving habits among the people.

At the time of opening this account, a minimum amount of Rs.1000 is to be

deposited. Subsequently the account is opened & account number is located. The

depositor is given a chequebook.

The depositors who are wishing to close his account are required to present his

cheques to the bank in order to draw the credit balance and to close the account.

And this type of account a customer can open joint account also, which can be

operated by anyone.

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II. Current Account

There is no limit of withdraw of money from these accounts. In practice the bankers

do not allow any profit to such deposits in Pakistan. The customers are required

maintaining the minimum credit balance in their account in case of failing incidental

charges are recovered from defaulters. This is because the depositors may withdraw

current deposits at any time and as such the bank is not entirely free to employ such

deposits. In general, the bank allows the overdraft facilities to current account holders

& the prevailing rate of markup is charged from these customers.

In ABL the minimum amount required to open the current account is

Rs. 1000. No profit is paid to account beside this that the account holder has the

facility to taking s much money as he wants.

Individual account is opened in the name of the single personal one person on whose

name it is opened only conduct it. While two opens joint account and partnership

account are more person and the bank fallow their instructions for the conduct of the

account. Similarly limited companies can also open their current account.

III. Fixed Deposit Account/Term Deposits

These deposits are also called as time deposits because these deposits are based on the

fixed duration. The period for which these deposits are kept with bank are ranged

from seven days to ten years in light of the agreement between the customer and the

banker. The profit allowed on these account depend on the duration longer the

duration of the deposits the higher will be the rate of profit.

The operation of fixed account is different from saving & current accounts. Every

time money is deposited with the bank an application from filled and the bank issue a

fixed deposit receipt for amount deposited along with specific period. Fixed deposit

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receipt is given to the depositor and the bank retains the counterfoil of the same

receipt.

Fixed term deposits may be in the joint names of two or more person. The payment to

one of those people will not discharge by the bank without the authority of others.

Opening and Operation Of Bank Account

As discuss earlier there is a prescribed procedure for opening different types

of account. Following steps are followed while opening a new account.

a. Application from for Opening of Accounting

A person who wishes to open a bank account is required to complete this from

the personal information is to be furnished. The application signs the

declaration to effect that he has understood the rules and regulation of the

bank.

b. Introduction

As required by the banking law the new customer needs to be introduced by

the account holder of the same branch where the account is being opened. The

manager or any other bank officer may introduce the new customer if they

know them personally.

c. Signature card

At the time of opening an account a specimen signature card containing two

signature of the customer is required which the manager of the branch attaches

with application form. During the operation of account the signature is

verified when the cheque is presented for payment.

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d. Cheque Book

After completing formalities for opening saving and current a cheque book is

issued to the customer for withdrawing cash from his or her account at the

time of need. The cheque contains minimum 25 pages & maximum 50 pages.

The bank also charges excise duty on cheque book.

3.4.3 Advances & Credit Department

The basis function of the bank is to accept deposit and lend money to the borrowers

against a spread so to be able to give some profit to the depositors as well as to earn profit

for the bank.

While lending the money to the borrowers the bank should observe the following lending

principals:

I. Safety Principle

It means that the lended money will come back along with interest or service charges

etc. The borrower should not invest the money borrowed in unproductive or speculative

business.

II. Liquidity Principle

The money which has been lended to the borrower should be returned to the bank on

demand or as per repayment schedule provided by the client. The sources of repayment

should be clear and definite

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III. Purpose Principle

The purpose of the advances should be legitimate and productive. It should be ensured

that the banks, funds are not being utilized for speculative business. The credit

restrictions by the central bank should not be violated & it should also be ensured. It is

always beneficial for the bank to finance for short-term requirements.

IV. Profitability Principle

The end result of every business activity should be to earn some profit. Similarly the

bank must get some profit out of the activity of lending so that the depositors could get

their shares as well as the shareholders could earn something for their investments.

V. Security Principle

The proposal should be dealt on its merit not on security. The security should be

considered a safety for the bank only in case of unexpected emergencies. All the

relevant documents of securities must be obtained & got valuation of the property or

any other security should be assessed correctly.

VI. Spreading of Risk Principle

It is always safe for the bank to spread the risk in large number of borrowers instead of

loaning huge amount to few big shots, it is better to obtain different types of securities

instead of concentrating on one security.

VII. National Interest and Suitability Principle

It is Bank’s moral as well as legal obligation to ensure that no loaning is running

counter to national interest. It is also bank’s duty to ensure that their lending policies

are not against the social conditions or bindings.

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VIII. Lien

Lien is the bank right to with hold property until the claim on the property is paid. The

bank looks at their lien as a protection against loss or overdraft or any other credit

facility. In ordinary lien the borrower remains the owner of the property, but the actual

or constructive possession remains with the creditor or bank though the borrower has

no right to sell it.

IX. By Cash Credit

In this the bank lends money to the borrower against tangible security. The total amount

of the loan is not paid in one installment. The borrower has to pay markup on the

amount borrowed. Cash credit is favorite loan for large commercial & industrial

concern.

X. By Overdraft

This the most common type of bank lending. When a borrower requires temporary

accommodation, ABL allows its customer to withdraw an excess of the balance form

their account, which the borrowing customers have in credit and thus called overdraft.

This facility is given to regular reliable & well-established customer. When it is against

collateral securities, it is called “Secured Overdraft” & when borrowing customer

cannot offer any collateral security except his personal security then the

accommodation is called “Clean Overdraft”.

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Types of finance

I. Short Term Finance

Allied Bank Ltd. receives the saving of the people and lends it for short term to its

customers. Short-term finance is generally given for a period of one year or less in

duration.

II. Medium Term Finance

The duration range of the intermediate term finance is from one year to three years. It is

also called term loan. Intermediate term finance is usually given for the expansion of an

existing business or for the purchase of new equipments.

III. Long Term Finance

This type of finance is required for the period of more than five years. Long-term

finance is generally given for the compilation of big projects, for the construction of

building and for the purchase of machineries.

IV. Producer of Applying for Loan

Any customer who applies for loan should have an account (usually current account)

with ABL branch concerned. That account must be in running position. When approval

from head office is given, branch gives tern & condition to the party. Bank does not

advance 100% loan against a security, rather the profit margin is different in different

type of loan.

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3.4.4 Remittances Department

Another important department in ABL is Remittances Department. The remittances

department transfers the funds from one bank to other bank and from one place to another

place.

In remittances department the collection take place. The ABL made payment of only

open cheques on the counter and prohibits the payment of crossed cheques. ABL

transfers money from one place to another by the following means:

I. Mail Transfer

When a customer requests the bank to transfer his money from this bank to any other

bank or the branch of some other bank, the first thing he has to do is to fill an

application form. In which he states that he/she wants to transfer the money from this

bank to that bank by mail. If the customer is the account holder of the bank, operating

personal will proceed further with steps like:

Writing a debit voucher for a/c holder’s a/c

Preparing an advice in favor of stated bank/branch

Writing credit voucher for GL

Mail the advice

If the customer is not the account holder of this bank, then firstly, he has to deposit the

money and than above procedure will be adopted to transfer his money.

II. Telegraphic Transfer

With the changing requirements of the customer, ABL has introduced the fastest

transfer of money. The sender is required to apply through a form in which he will give

all the necessary details about the sender and beneficiary. The sender deposits the

money to be transferred plus bank charges at the bank counter. The remittances

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officials send a telegram to concerned branch with specified code words and the

receiving branch makes payment to the beneficiary. Vouchers are sent by ordinary mail

to keep the record. On TT, no excise duty is charged only commission and telegram

charges are charged.

III. Pay Order

Pay order is the most convenient simple and secure way of transfer of money. It is

issued by, drawn upon and payable by the same branch of the bank. It is neither

transferable nor negotiable and as such it is payable to the payee named there in. The

following are the parties to a pay order.

Purchaser is a person, firm, company or local authority.

Issuing/paying branch is one which issues/pays on presentation.

Payee is a person named there in.

IV. Demand Draft

Demand Draft is another way of transfer of money from one bank to another bank.

Unlike pay order, a form is required to be filled for the issuance of the demand draft in

which necessary particulars about the beneficiary and sender are given. The sender

deposits the amount of DD plus commission and other charges on the bank counter,

from where he is given a receipt and in accordance with this receipt he is issued.

The following are the main essential of draft:

a) It is a Negotiable Instrument.

b) Filling a form and depositing the amount written on it prepare 2} Draft.

c) It is a written order to its branches or to another bank to pay the stated amount on

draft.

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3.4.5 Cash Department

This is the most important and critical department in a Bank. There are two basic

functions performed by the cash department. These are

I. Receipts

An individual who has account in the Bank can deposit money in his account. For

deposit of the money the individual has to fill the deposit slip in which the account

holder writes his name, Account number, amount of the money both in figures and in

words.

After filling the deposit slip the Cash amount along with the deposit slip is submitted

with the cashier. The cashier collects the cash and counts it and after verification the

cashier stamps the deposit slip. One part of the deposit slip is given back to the

customer and the other part of the deposit slip remains with the bank for the record

purposes.

The cashier also record the deposits made by the customers in credit sheets daily. The

deposits of all customers of the bank are controlled by mean of ledger account. Every

customer has its own ledger account and has separate ledger cards in which his / her

total record is kept.

Bill collection is also one of the main functions of bank. Cashier has to prepare a list of

bills’ serial number, a copy of which is to be sent to the corresponding organization.

II. Payments

The procedure of clearance of a cheque or payments is as following. First of all the

customer presents his cheque to the cashier. The cashier records the account number

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and the amount, which is to be drawn. Then the cashier check the cheque number in the

computer for the verification whether the account holder has such amount in his

account which he is demanding or not. If the computer passes the cheque, the Passing

officer signs the cheque and sent it to the cash counter then cashier pays the written

amount to the customer and then in the end cashier records the amount paid in

computer.

3.4.6 Foreign Currency Department

Like Pak rupees account the foreign currency has many accounts like

Saving account

Current account

Term deposit account.

The bank deal in three type of foreign currency account:

1. Dollar

2. Euro

3. Pound

The account is open with 500 dollar if it is less 5-dollar per month is deducted. For

opening the account NIC & introduction is required of the same bank. If any person

wants to import goods from foreign, an account is required and for international trading

the FC is needed. ABL provide foreign currency on Pak rupee at booking rate and the

central office sent Rates

In foreign currency department the remittance is sent through Foreign Telegraphic

Transfer. The account holder can sent the amount in foreign bank account. If any

transaction is made the daily report is given to the central office Karachi daily.

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Different accounts can b open like joint account or company account. The thankful letter

is sent for opening the foreign currency account to account holder and introducer. When

any transaction is made the bank inform stock exchange daily. The foreign currency note

is counted and recorded in the cash memo book. The people in the foreign country sent

the amount through S.W.I.F.T. Weekly and monthly report of all the transaction is given

to the stock exchange.

Cheque book is also issued to the account holder & the foreign currency Account number

is given to him. In this FBC & FBR is done. Debit Credit Voucher is used. The charges

are deducted while closing the foreign currency account. And the cheque book is return

while closing the account.

The branch sent excess foreign currency to its main branch. If any branch needs foreign

exchange they sent to this branch.

3.4.7 Clearing Department

In clearing process, if the account holder of ABL receives the cheque of other bank like

City Bank, Habib Bank Limited etc, and he submits it in ABL branch to be cashed. At the

same time the clearing process starts. First the bank name. Cheque number and the

amount are written in the register. After this three kind of stamps are required first bank

name stamp, secondly clearing stamp of next date and If the cheque is not local then the

inter city clearing stamp is required.

Some cheques are local and some are outstation. The institution N.I.F.T. provides the

services in clearing the cheque. They send the different cheque to different banks. The

N.I.F.T service is only in few cities. The cheque of inter city is send through N.I.F.T. And

where, the N.I.F.T service is not available so the cheque is sent through T.C.S.

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The clearance of cheque is informed through advice. Some cheque is not passed so they

should return so Rs. 200 is deducted and if the cheque is inter city then the postage

charges is deducted. For this purpose the Debit & Credit voucher is used. When the

cheque is cleared the today stamp is required. Some cheque is drawn on ABL. This is

called outward clearing. These cheques will be entered in the outward clearing register.

And the advice is sent for the clearance of cheques. The account holder account is

credited.

OBC means the cheque of other banks. When they sent OBC the OBC is credit & OBR is

debited and the advice is made on that time, one copy is remain in the bank and the other

copy is sent to the related branch. When they realized the opposite entry is made. It is

entered in the OBC register. The income A\c commission is credited, and postage.

4. STRUCTURE AND FUNCTIONS OF FINANCE

DEPARTMENT OF ABL

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4.1 STRUCTURE OF FINANCE/ACCOUNTS DEPARTMENT

ABL has separate departments for accounts and finance. Both of these departments are

controlled by CFO. Accounts Department has further Accounting and Operation

Department, Accounting & Audit Department and Control Department whose officers

report to CFO. Finance Department has further Portfolio Management Department and

Investment and Finance Planning Department whose officers also report to CFO.

Portfolio Department has further sub-department of lending who report to Portfolio

Officer. Investment and Finance Planning Department has further sub-department of

Funds Raising who report to Financial Planning Officer.

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Note: Organogram of Finance and Accounts Department of ABL is attached in Annexure

III.

4.2 FINANCE & ACCOUNTING OPERATIONS

4.2.1 Generation of Accounting Information

Finance and accounting policies and procedures are strictly followed. With them come

new departments and divisions to help management more effectively focus and control

the bank’s resources e.g. fund raising and fund management division, funds allocation

department, portfolio management department, personal financial services division,

investment and funding group etc. These new departments and divisions require the

appointment of bank management and staff that can devote more time to surveying

customer surveys, and modifying old service offerings to reflect changing customer

needs. The technology of financial services production and delivery has shifted more and

more in recent days towards computer-based system and electronic service delivery.

Automated bookkeeping has reduced the time managers spend in routine operations, thus

allowing greater opportunity for planning new services and new operations.

4.2.2 Recording of Accounting Information

Accounting information handle by preparing journal, ledger and trial balance and

information recorded electronically. The preparation of financial statements in

conformity with approved accounting standards requires the use of certain critical

accounting estimates, judgments and assumptions that affect the reported amounts of

assets and liabilities and income and expenses. It also requires management to exercise its

judgment in the process of applying the accounting policies. Estimates and judgments are

continually evaluated and are based on historic experience and other factors, including

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expectations of future events that are believed to be reasonable under the circumstances.

Revisions to accounting estimates are recognized in the period in which the estimate is

revised and in any future periods affected.

4.2.3 Uses of Accounting Information

In the process of applying the Bank’s and its subsidiary’s accounting policies,

management has made the following estimates and judgments which are significant to the

financial statements:

Classification of investments

Valuation of derivatives

Impairment

Recognition of taxation and deferred tax

Provisions

Accounting for post employment benefits

Calculation of depreciation, amortization and revaluation of operating fixed assets

4.3 ROLE OF FINANCIAL MANAGER

Financial manager mainly emphasize on maximize shareholder’s wealth. All important

decisions related to finance and investment that must improve the success of the

organization. Financial manager also perform several tasks as follows:

Advice institutions on high net worth individual customer on investing funds,

managing assets, reorganizations, raising capital.

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Purchase short term assets (mainly accounts receivable) from business in

exchange for supplying temporary financing.

Purchase short term credit to improve commercial use.

Offer saving deposit plans and housing related credit predominantly to

individual.

Execute customer buy and sell orders for marketable securities and exchange

traded financial futures and option contracts and provide other full service

brokerage functions.

Control of the composition of a bank’s assets to provide adequate liquidity

and earnings.

Control over a bank’s liabilities, usually through changes in interest rates

offered to provide the bank with adequate liquidity.

Invest in corporate stock to help finance the start of new branches to support

the expansion of existing business.

4.4 TECHNICAL METHODS (USE OF ELECTRONIC DATA)

Any new technology in banking sector has its own effects because new technology

indicates the improved operation and performance of the sector. Introduction of new

technology has an extensive effect on customers. So the quick adopters of new

technologies have an edge over others in the industry. Allied bank use Linux and UNI

BANK. Allied bank uses new technology in different department, which improved the

quality of services of that department.

4.4.1 Cash Department

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Cash department involves receipts and payments process manually. But now ATM is

used which has affected the cash department in some extent.

Before

Before ATM and online technology ABL was able to provide only 8 hours

services for payment.

Customers were enforced to wait in huge lines for getting payments.

To check the total amount of account customer had to give application to the bank

Needs number of cashier and clerks

Everything took a long time.

After

Now ABL can provide 24 hour banking to its customers so that customers can

withdraw money at any time.

Now customers have no need to wait for the payment in long queues.

When customer withdrawal the money and mini statement of his account is shown

to the customer.

ATM technology reduces the extra burden on the cashier, and now bank don’t

need extra cashier and clerks

4.4.2 Remittances Department

The remittances department transfers the funds from one bank to other bank and from one

place to another place. ATM and online banking has also effected the remittances

department and increased its efficiency.

Before

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Before ATM if customer wanted to transfer his fund to other bank account or

other branch account, then he had to submitted a cheque which takes a lot of time

for clearance process

Before online banking to transfer the funds to other braches or to other banks

bankers had to use demand draft, telephonic transfer pay order and mail transfer

etc.

After

Now customer can transfer money from his account to any other account at any

time any where in Pakistan, without waiting for the clearance process.

Through online banking bankers has no need to send cheque or money through

demand draft or telephonic transfer etc. the banker can access any branch and

transfers funds to it with in no time.

In online transaction the account holder has account in another bank. The account

holder sent the amount to his account. Online transaction is made only ABL to

ABL. So they can transfer the amount, they can cash the amount they can find the

balance & receive the statement of his account in another branch. In this type of

transactions the application is filling for this purpose.

Date

Name

Remote

Account number

Amount

4.4.3 Online Banking

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Allied Online Banking is a unique service being offering from Allied Bank. Through this

service, account in Allied Bank is available to from any of branches countrywide. ABL is

the first bank in the history of Pakistan which connects with each branch of it through

online banking. These branches can offer the facilities of remote cheque encashment,

cash deposit, funds transfer, balance enquiry and statement of account printing to

customers of other online branches besides issuance of ATM cards to their own account

holders.

Rules

With the introduction of online banking services in branches, the computerized

operations of the banking system in branches has become even more sensitive

that’s why the top management has set some rules and given some guidelines to

each and every branch to be followed:

1. Only authorized persons should be allowed access to the computer system of the

branch. Physical access to the branch server machine should especially control.

All maintenance activity, whether by IT Centre personnel for trouble-shooting or

by authorized service providers for hardware / communication support should be

documented. For this purpose, a separate register should be maintained in the

branch where in the name / identity of the person concerned along with the date

and time of such activity should be recorded.

2. Personnel of the branch who have been authorized to use the system to enter

transaction or carry out end of day processing should not divulge their password

to anyone under any circumstances, in case, it is felt by the password holder that

his password has become known to someone else, it should be changed

immediately.

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3. It is the responsibility of the branch to take back-ups on daily basis and to ensure

that these are sent to the IT Center as per laid down procedure, Taking of backup

or restoring of backup of the branch based system should never be allowed to be

carried out by and outsider, Under no circumstances, should a backup be carried

out of the branch by and unauthorized person, The dispatch of backup of IT

Center/Division should only be handled by designated couriers in sealed

envelopes.

4. Use of PC workstations having removable drives and/or modem is not allowed,

Internet access / Internet mail I not permitted on any workstation of the branch

system. Strict compliance of this must be ensured.

5. In case of any problems related to end-of-day processing or in respect of

hardware/ software, the matter should invariably b referred to the IT Centre.

Attempts to the fix problems without the knowledge of IT Centre staff must b

avoided.

Transaction Amount Limits

1. Cash Withdrawals: As per standing instruction the online transactions are

restricted to a maximum of Rs. 500,000/- per instance for Cash Withdrawals.

2. Third Party Cheques Encasement: The customers can encash third party

cheques of an account holder of Allied Bank subject to a maximum of Rs.

25,000/- per instance.

3. Funds Transfer: The maximum amount is restricted to Rs. 500,000/- for funds

transfer except when the customer is transferring funds from the branch where

his account is maintained, to any other account in any ABL branch.

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4. Deposit of Third Party Cheques for Instant Credit: The account holders can

deposit third party cheques, either drawn in his favor or bearer, at the branch

where he holds an account for instant credit.

The maximum value of each third party cheque, which is being deposited, should

not exceed Rs. 500,000/- and utmost precautions must be undertaken to ensure

authenticity and genuineness of the third party cheques.

Physical Presence Of Account Holder

It is essential for the account holder to present a cheque in person at the remote

branch for encashment from his account at the parent branch, The presence of

customer is necessary in case of Funds Transfer transactions, however customer

presence is not necessary for cash deposit or third party encashment of cheques

up to Rs 25,000/- .

Fund Transfer

The customers will be allowed to transfer funds from an account in the local

branch to an account in the remote branch and vice versa. In this case the “from”

account must b Customer’s own account whether in the local branch or the

destination branch and a cheque for the transfer would be required to be

presented.

Supervision Of Transactions

All cash and Fund Transfer transactions require immediate online supervision at

the local branch before being transmitted to the remote branch for acceptance;

Supervision requires re-entry of all transactions particulars by the Supervisor,

Transactions relating to Balance Enquiries and Display of statements of account

do not require and supervision

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KYC / Customer Due Diligence

The banks are required to perform KYC / customer Due Diligence as per

Prudential Regulation issued by State Bank of Pakistan, Accordingly, all

abnormally high / suspicious transactions particularly cash transactions, are

required to be examined and reported to the concerned departments,

4.4.4 Automated Teller Machine (ATM)

Allied Bank has a vast network of over 460 ATMs installed in over 130 cities, which

continues to grow at a rapid pace.

The ABL Automated Teller Machine (ATM) launched in 1995 is a means of providing

customers with 24 hour cash convenience. Over the years its success has encouraged the

bank to expand its network to major cities. In the past six years, ABL installed this

convenience in Karachi, Lahore, Hyderabad, Islamabad / Rawalpindi, Faisalabad,

Multan, Gujranwala, Quetta, Sialkot and ISLAMABAD. Further expansion plans to other

cities are on the way.

Debit Card Facilities

1. Funds transfer on ATM

A cardholder can transfer funds on the ATM from his account to any other

account in any branch of Allied Bank up to a maximum of Rs. 100,000 per day.

2. ATM Daily Withdrawal Limit

Previously the card holders were allowed to withdraw Rs 25, 000 per day, which

has now been enhanced as follows:

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ATM Cash Withdrawal Limit:

Per transaction limit Daily limit

Rs. 25,000 Rs 100,000

3. Debit Card on POS

The debit transactions on POS were previously up to a maximum limit of Rs

50,000 per day which has not been enhanced to Rs 100,000 per day.

4. Other Enhancements

For the convenience of the Cardholders the following enhancements have also

been incorporated:

Screens have now become bilingual and the card holder has the option to

operate the ATM in English or Urdu language.

Fast cash maximum amount, which was previously Rs. 10,000, has now been

enhanced to Rs. 25,000.

Guide Lines for Standardization of ATM Operations.

1. Cash Balancing Procedure

The actual cash in ATM is to be balanced with ATM Journal Roll, in order to

identify the suspect transaction

Following steps must be taken before end of day

Put the ATM in Supervisory mode.

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Obtain ATM Cash position on ATM Journal Roll

The physical Cash in ATM must b equal to the amount appearing in the ATM

Receipt. Under no circumstances the physical Cash should be placed shot

in ATM while checking the cash in ATM, cash in the Reject Bin should also be

checked and taken into account and the print in ATM journal for Reject Cash

should also be verified.

In case the physical / actual cash in AT M is more than the cash appearing in the

journal then it means that customer’s account has been debited without cash

disbursement, now the individual suspected transactions are to be identified on

the basis of the verification from ATM Journal Roll, Branches should

immediately complete process of “Automatic Credit” as per procedure and time

frame mentioned below.

2. Procedure And Timelines For Automatic Credit

Same Bank-Same Branch:

Branch to credit customer account on next business day.

Same Bank-Different Branch (within same city)

ATM acquiring branch after verification of the transaction from their ATM

Journal Roll, must issue Credit Advice to the card issuing branch (the branch from

where the card was issued / account of the card holder is maintained) on next

business day.

Same Bank – Different branch (different cities)

ATM acquiring branch after verification of the transaction from their ATM

Journal, Roll, must issue Credit Advice to the card issuing branch (the branch

from where the card was issued / account of the card holder is maintained) on

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next business day. This whole process should be completed within maximum 4

business days.

ABL ATM Branch and Other Banks / Switches.

On verification by ABL ATM Branch (acquiring branch) from the PAN/ Card

number, if it appears that the cash has been retracted against the ATM card of a

bank other than ABL (First six digits of the ATM card represent the bank, in case

of ABL IMD/ Bank no, is 589430) the ABL ATM branch, after verification from

the ATM Journal Roll will issue a credit advice of the suspected transaction in

favor of Bath Island Branch, Karachi (0949) and A list containing identification

number of the different banks (IMD) is enclosed as annexure

They will send the Credit Advice through TCS to ATM Wing COK along with a

copy o the ATM Journal Roll as an evidence, ATM Wing upon receipt of the

credit advice from the ATM branch will credit the same in settlement account and

will issue a Debit.

Authority to the respective switch/bank authorizing them to Debit ABL’s Nostro

account against the suspected transaction for credit to the other bank’s ATM card

holder account.

3. ATM Cash Replenishment

ATM cash replenishment is done on daily basis, which is joint operation.

The locking / opening of ATMs for replenishment is under dual control of the

officers assigned by the customer services manger.

Following steps are performed before ATM cash replenishment:

a. Putting ATM in supervisory Mode.

b. Part of ATM Journal Roll for same date shall be taken out and signed by

bother officers.

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c. Logging in as Supervisor on UNIBANK running Option “06” for

calculation of cash replenishment position which shall b signed by both

officers and attached with vouchers.

All remaining physical cash in ATM shall be taken out and counted.

Fresh currency notes shall be fed in to ATM according to assigned branch limit.

4. Working of ATM

It is a high speed mode of transporting data from one branch or bank to another.

With ATM, a customer able to transmit data in small data packets over a single

network. It can carry traffic at speeds up to 622 Mbps. Data is transmitted in fixed

length cells, which gives it advantages over other methods of data transfer. ATM

is a cell switching network which takes data and breaks it into 48 bytes. These

bytes are then affixed to a 5 byte header which will contain the source and

destination information. The use of cell switching and multiplexing is employed

and the information is routed in a calculated manner. This method makes it so that

transmission is constant and has a guaranteed capacity.

Following diagrams will better help in understanding the working of ATMs:

Use cases: A use case describes a sequence of actions that provide something of

measurable value to an actor and is drawn as a horizontal ellipse.

In above diagram four main use cases has been drawn

1. System startup

2. System shut down

3. Session

4. Transaction (Transaction is an abstract generalization. Each specific concrete

type of transaction implements certain operations in the appropriate way. The

flow of events given here describes the behavior common to all types of

transaction. The flows of events for the individual types of transaction

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<withdrawal, deposit, transfer, inquiry> give the features that are specific to

that type of transaction)

Actors: An actor is a person, organization, or external system that plays a role in

one or more interactions with system.

In above diagram there are 3 Actors

1. Operator

2. Customer

3. Allied Bank

Allied bank

Card insertion

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Associations: Associations between actors and use cases are indicated in use case

diagrams by solid lines. An association exists whenever an actor is involved

with an interaction described by a use case.

I. System Startup: The system is started up when the operator turns the

operator switch to the "on" position. The operator will be asked to enter

the amount of money currently in the cash dispenser, and a connection to

the bank will be established. Then the servicing of customers can begin.

II. System Shutdown: The system is shut down when the operator makes

sure that no customer is using the machine, and then turns the operator

switch to the "off" position. The connection to the bank will be shut down.

Then the operator is free to remove deposited envelopes, replenish cash

and paper, etc.

III. System Session: A session is started when a customer inserts an ATM

card into the card reader slot of the machine. The ATM pulls the card into

the machine and reads it. (If the reader cannot read the card due to

improper insertion or a damaged stripe, the card is ejected, an error screen

is displayed, and the session is aborted.) The customer is asked to enter

his/her PIN, and is then allowed to perform one or more transactions,

choosing from a menu of possible types of transaction in each case. After

each transaction, the customer is asked whether he/she would like to

perform another. When the customer is through performing transactions,

the card is ejected from the machine and the session ends. If a transaction

is aborted due to too many invalid PIN entries, the session is also aborted,

with the card being retained in the machine.

The customer may abort the session by pressing the Cancel key when

entering a PIN or choosing a transaction type.

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IV. System Transaction: A transaction is started within a session when the

customer chooses a transaction type from a menu of options. The customer

will be asked to furnish appropriate details (e.g. account(s) involved,

amount). The transaction will then be sent to the bank, along with

information from the customer's card and the PIN the customer entered.

If the bank approves the transaction, any steps needed to complete the

transaction (e.g. dispensing cash or accepting an envelope) will be

performed, and then a receipt will be printed. Then the customer will be

asked whether he/she wishes to do another transaction.

If the bank reports that the customer's PIN is invalid, the Invalid PIN

extension will be performed and then an attempt will be made to continue

the transaction. If the customer's card is retained due to three invalid PINs,

the transaction will be aborted, and the customer will not be offered the

option of doing another.

If a transaction is cancelled by the customer, or fails for any reason other

than repeated entries of an invalid PIN, a screen will be displayed

informing the customer of the reason for the failure of the transaction, and

then the customer will be offered the opportunity to do another.

The customer may cancel a transaction by pressing the Cancel key as

described for each individual type of transaction below.

All messages to the bank and responses back are recorded in the ATM's

log.

V. Event Trace Diagrams

To represent objects & events in a scenario

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Objects in transition drawn as vertical lines

Events drawn as horizontal arrow from the sending object to receiving

object

Event timing sequence shown - timing proceeds vertically

An object can send simultaneous events to other objects

VI. Event Flow Diagram

An Event Flow diagram consists of interconnected objects and explains

the flow of data among those objects. Complex Event relationships and

Synthetic Events are also represented in an Event Flow diagram.

Object is drawn as rectangle

Arrow sign show the association between objects and flow of data

between objects.

In below 2 diagrams objects are.

User

ATM

Consortium (An association of banks for some definite purpose)

Bank

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Event Trace Diagram for the Normal ATM Scenario

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Event Flow Diagram for the ATM System

4.5 FUNDS MANAGEMENT

Funds management deals with following aspects;

Sources of funds

Generation of funds

Allocation of funds

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4.5.1 Sources of Funds

Following are the sources of funds of ABL and their figures for last 5 years:

Description (in

millions)

2005 2006 2007 2008 2009

Share Capital 10,256 14,550 17,688 19,878 22,356

Reserves 10,640 4,316 4,316 3,419 2,341

Customer Deposits 126,392 161,410 206,031 263,972 297,475

Inter bank

borrowings

12,538 9,694 18,410 22,934 27,778

Source: Annual Report of ABL 2008

Bank’s major source of funding is individuals who deposit their funds. Bank also have

other sources e.g. borrow from other banks and financial situation and in time of need it

also approach state bank of Pakistan for extra funds and state bank provide funds after

fulfilling basic requirements according to prudential regulations.

4.5.2 Generation of Funds

Following figures shows the generation of funds in last 5 years of ABL:

Description (in

millions)

2005 2006 2007 2008 2009

Interest Earned 5,245 9,892 17,216 21,201 30,571

Fee, Commission,

Brokerage Income

1,520 1,471 1,636 2,258 2,522

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Capital Gain &

Dividend Income

65 196 540 1,585 1,571

Non-interest Income 1,740 1,940 2,449 3,920 4,152

Source: Annual Report of ABL 2008

Funds are mostly generated from the interest income earned by banks. Other places from

where funds are generated include commission earned, capital gain and dividend income

and non-interest income earned by bank.

4.5.3 Allocation of Funds

Following are the places where funds are allocated and their figures for last five years:

Description (in

millions)

2005 2006 2007 2008 2009

Interest Expensed 794 2,025 6,793 10,093 16,560

Operating Expenses 4,115 4,264 5,289 6,174 8,399

Donations - 15 9 28 82

Taxation 290 1,744 2,264 1,877 1,964

Source: Annual Report of ABL 2008

The main place where banks allocate its funds is in interest expenses. Other main place of

allocation of funds is the operating expenses. Banks are heavily taxed which is a major

portion of allocation of bank’s funds.

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5. THEORETICAL AND PRACTICAL CONCEPTS

During internship I relate theoretical concepts relating to practical experiences. More

opportunities expand my practical knowledge and understanding. I under go an internship

program of six to eight weeks in bank to get exposure to the real time business

environment and to know what sort of changes Information Technology brings in

management activities. The real purpose of this internship program is to provide an

opportunity to the students to see the practical applications of their background

professional studies.

5.1 Daily Schedule For Evaluate A Bank’s Money Position

In this schedule I studied that bank manager trying to keep and record track of the many

transactions each day. The bank name as day of end report consist of all record of

vouchers, cheques, deposits, online transfers.

5.2 Account Opening Procedure

Account opening procedure is a procedure when a customer applies to open new account.

A document consist of a form called account opening form for basic introduction of the

customer and other details e.g. residence source of income and for security purpose

specimen signature card, on this card customer signature three times to operate the

account.

5.3 Customer Privacy

Bank protect the personal information that customer supply to manager so that customers

are not damaged by the release of their private data to outside parties. Manager strictly

follows privacy policy. Moreover, at least once a year the customer must be reminded

about the content of those privacy policies.

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6. FINANCIAL ANALYSIS OF ABL

6.1 BALANCE SHEET (2005-2009)

(figures in millions)

December 31 2005 2006 2007 2008 2009 Assets Cash and balances with treasury and other banks 18,035 24,745 30,408 25,751 27,716Lending to financial institutions 5,777 19,050 18,419 15,793 28,123Investments- Gross 45,269 47,156 84,151 84,602 96,975Advances - Gross 119,866 151,705 78,524 223,640 249,887Operating Fixed assets 4,721 6,445 7,549 11,134 12,447Other assets 7,908 10,800 11,368 18,399 17,955Total assets - Gross 201,575 259,902 330,419 379,319 433,103Provisions against non-performing advances (8,659) (7,672) (10,117) (10,668) (12,543)Provisions against diminution in value of investment (342) (203) (192) (1,956) (2,186)Total assets - net of provision 192,574 252,027 320,110 366,696 418,374

Liabilities & EquityCustomer deposits 161,410 206,031 263,972 297,475 328,875Inter bank borrowings 9,694 18,410 22,934 27,778 39,819Bills payable 2,449 2,278 3,494 2,952 3,162Other liabilities 4,472 5,119 7,332 13,636 11,061Sub-ordinated loans - 2,500 2,499 2,498 5,497Total Liabilities 178,025 234,339 300,231 344,340 388,414Net Assets / Liabilities 14,550 17,688 19,878 22,356 29,960Share capital 4,489 4,489 5,386 6,464 7,110Share premium 4,316 4,316 3,419 2,341 1,695Reserves 1,377 1,817 2,632 3,463 4,888Un - appropriated profit / (loss) 2,732 5,608 6,971 8,537 12,198Equity - Tier I 12,914 16,230 18,408 20,805 25,891Surplus on revaluation of assets 1,636 1,458 1,470 1,550 4,069

14,550 17,688 19,878 22,356 29,960

Source: Annual Report ABL 2009

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6.2 INCOME STATEMENT (2005-2009)

December 31 2005 2006 2007 2008 2009PROFITABILITY Markup / Rerurn / Interest earned 9,892 17,216 21,201 30,571 41,122Markup / Rerurn / Interest expensed 2,025 6,793 10,093 17,273 22,422Net Markup / Interest income 7,867 10,423 11,108 13,298 18,700Fee, Commission, Brokerage and Exchange income 1,471 1,636 2,258 3,266 3,470Capital gain & Dividend income 196 540 1,585 1,571 2,452Other income 273 273 77 59 36Non interest income 1,940 2,449 3,920 4,897 5,958Gross income 9,807 12,872 15,029 18,195 24,658Operating expenses 4,264 5,289 6,174 8,431 9,609Profit before provisions 5,543 7,583 8,855 9,764 15,049Donations 15 9 28 82 97Provisions - (charge) / reversal (694) (913) (2,874) (3,561) (4,416)Profit before taxation 4,834 6,661 5,953 6,121 10,536Taxation (1,744) (2,264) (1,877) (1,964) (3,414)Profit / (Loss) after taxation 3,090 4,397 4,076 4,157 7,122

Source: Annual Report ABL 2009

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6.3 RATIO ANALYSIS:

Five years ratio analysis of bank consists of profitability ratios, liquidity ratios, market

ratios and solvency ratios.

6.3.1. Debt Ratio

Debt Ratio= Total Debt / Total Assets

2005 144671/154926 =0.933

2006 178025/192574 =0.924

2007 234339/252027 =0.930

2008 300231/320110 =0.938

2009 344325/366680 =0.939

Debt ratio increase first and then decreases in year 2007 the reason being this increasing

trend of both total debt and the total assets till 2006 and in the year 2007 the increase in

total debt is greater whereas the increase in total assets is comparatively less.

6.3.2. Return on assets (ROA)

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Return on assets (ROA) = Earnings After Tax / Total Assets

2005 192 / 154926 = 0.001

2006 3090 / 192574 = 0.016

2007 4397 / 252027 =0.017

2008 4076 / 320110 =0.013

2009 4157 / 366680 =0.011

Return on assets increases till 2007 after that it shows downward trend, reason behind

this increase in income is less then the increase in total assets.

6.3.3. Gross Profit Margin

Gross Profit Margin = Gross Income / Total Operating Revenue * 100

2005 6191 / 5245 * 100 = 118.04

2006 9807 / 9892 * 100 = 99.14

2007 12872 / 17216 * 100 = 74.77

0.001

0.016 0.017

0.0130.011

0

0.005

0.01

0.015

0.02

2003 2004 2005 2006 2007 2008 2009

Years

RO

A

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2008 15029 / 21201 * 100 = 70.89

2009 18163 / 30571 * 100 = 59.42

Gross profit margin shows downward trend because increase in gross income is less

whereas increase in total revenues is greater.

6.3.4. Return on Equity (ROE)

Return on Equity (ROE) = Earnings After Tax / Total Equity

2005 192/10250 =0.19

2006 3090/14550 =0.21

2007 4397/17688 =0.25

2008 4076/19878 =0.21

2009 4157/22355 =0.19

Going year 2004 to 2008 return on equity first increases till 2006 and after that is starts

falling.

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6.3.5. Debt to Equity Ratio (D/E)

Debt to Equity Ratio (D/E) = Total Debt / Total Equity

2005 144671/10250 =14.11

2006 178025/14550 =12.24

2007 234339/17688 =13.25

2008 300231/19878 =15.10

2009 344326/22355 =15.40

Debt to equity ratio shows downward trend till 2005 after that it show upward trend

reason behind this increase in total debt increases.

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6.3.6. Operating Efficiency Ratio

Operating Efficiency Ratio = Total Operating Expenses/ Total Operating Revenues

2005 4115 / 5245=0.79

2006 4264/9892=0.43

2007 5289/17216 =0.31

2008 6174/21201=0.29

2009 8399/30571 =0.28

Operating efficiency ratio decreases from 2004 to 2008 because increase in operating

expenses is less whereas increase in total revenues in comparatively greater.

6.3.7. Plow Back Ratio

Plow Back Ratio = (Earnings After Tax-Dividends) / Earnings After Tax

2005 192-65/192 =0.66

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2006 3090-196/3090=0.94

2007 4397-540/4397=0.88

2008 4076-1585/4076=0.61

2009 4157-1571/4157=0.62

Plow back ratio increases till 2006 after that it stars falling and in year 2009 it again

increases because in 2009 difference of earnings and dividends is greater as compare to

increase in earnings.

6.3.8. Absolute Ratio

Absolute Ratio = (Cash+Marketable Securities)/ Current Liabilities

2005 12320/141464=0.087

2006 18035/173553=0.104

2007 24745/226719=0.109

2008 30408/290400=0.105

2009 25751/328205=0.079

Going through the years from 2005 to 2009 absolute ratio increases till 2007 after that it

decreases reason behind this increase in current liabilities is comparatively high.

0.66

0.940.88

0.61 0.62

00.10.20.30.40.50.60.70.80.9

1

2003 2004 2005 2006 2007 2008 2009

Years

Plo

wb

ac

k r

ati

o

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6.3.9. Time Interest Earned Ratio

Time Interest Earned Ratio= EBIT/ Interest Expense

2005 482/794=0.61

2006 4834/2025=2.39

2007 6661/6793=0.98

2008 5953/10093=0.59

2009 6121/16650=0.37

0.61

2.39

0.98

0.590.37

0

0.5

1

1.5

2

2.5

3

2003 2004 2005 2006 2007 2008 2009

Years

tim

e in

tre

st

rati

o

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Time Interest Earned Ratio increases in year 2005 and 2006 and decreases till 2009. This

value in year 2005 is very small the reason being very small amount of earning before

interest and taxes. And this amount in the coming years is very large. The value again in

2009 is also very small.

6.3.10. Net Non Interest Margin

Net Non Interest Margin = (Non Interest Revenue – Non Interest Expenses)/ Total Assets

2005 1740-3321 / 154926 = -0.01

2006 1940-2239 / 192574 = -0.001

2007 2449-(-1504) / 252027 =0.01

2008 3920-(-3919) /320110=0.02

2009 4152-(-8161) /366680 =0.03

Going through the years from 2005 to 2009 the trend of the net non interest margin is

increasing in first two years it was negative because in these two years the net interest

revenue was less than the net interest expenses. Then in the last three years revenue

becomes greater which was mainly in the form of interest. Also the amount of total assets

is increasing along the years.

-0.01

-0.001

0.01

0.02

0.03

-0.015-0.01

-0.0050

0.0050.01

0.0150.02

0.0250.03

0.035

2003 2004 2005 2006 2007 2008 2009

years

Ne

t N

on

Inte

res

t M

arg

in

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6.3.11. Net Bank Operating Margin

Net Bank Operating Margin = (Total Operating Revenue – Total Operating Expenses) /

Total Assets

2005 5245- 4115 / 154926 =0.007

2006 9892-4264 /192574 =0.03

2007 17216-5289 / 252027 =0.04

2008 21201-6174 / 320110 =0.04

2009 30571- 8399 / 366680 =0.06

Net bank operating margin is first of all decreasing and it became constant in year 2006

and 2007 and then it increases. This trend is due to the smaller difference in the total

operating revenue and the total operating expenses in the beginning years and this

difference goes on up side which makes the ratio first increasing then constant and then

decreasing and the total assets were increasing with the years.

6.3.12. Net Interest Margin

Net Interest Margin = (Interest Income – Interest Expense) / Total Assets

0.007

0.030.04 0.04

0.06

00.010.020.030.040.050.060.07

2003 2004 2005 2006 2007 2008 2009

years

Net

Ba

nk

Op

erat

ing

M

arg

in

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2005 5245-794 / 154926 = 0.028

2006 9892-2025 / 192574 = 0.040

2007 17216-6793 / 252027 =0.041

2008 21201-10093 / 320110 =0.034

2009 30571-16560 / 366680 =0.038

The net interest margin first increases from 2005 to 2007 and then it decreases from 2008

and 2009. The reason behind this increase and decrease is the greater increase in interest

income and the smaller increase in interest expense with the passing years.

6.3.13. Bank’s Equity Multiplier

Bank’s Equity Multiplier = Total Assets / Total Equity Capital

2005 154926 / 10250 =15.11

2006 192574 / 14550 =13.24

2007 252027 /17688 =14.25

2008 320110 /19878 =16.1

2009 366680 /22355 =16.4

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Bank’s equity multiplier decrease first and then increases in year 2006 the reason being

the increasing trend of both total assets and the equity capital till 2005 and in the year

2006 the increase in total assets is greater whereas the increase in capital is comparatively

less.

6.3.14. Assets Utilization Ratio

Assets Utilization Ratio = Total Operating Revenue / Total Assets

2005 5245 / 154926 = 0.033

2006 9892 / 192574 = 0.051

2007 17216 / 252027 =0.068

2008 21201 / 320110 =0.066

2009 30571 / 366680 =0.083

0.033

0.051

0.068 0.066

0.083

0

0.02

0.04

0.06

0.08

0.1

2003 2004 2005 2006 2007 2008 2009

years

As

se

ts u

tili

zati

on

Ra

tio

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Assets utilization ratio shows increasing trend the reason behind the increase in both total

operating revenue and the total assets.

6.3.15. Earning Spread

Earning Spread = (Total Interest Income / Total Assets) – (Total Interest Expense /Total

Interest bearing bank liability)

2005 0.033 -0.005 = 0.028

2006 0.051-0.011= 0.04

2007 0.068-0.028= 0.04

2008 0.066-0.033= 0.033

2009 0.083-0.048= 0.035

The trend in earning spread is first increasing till 2007 and then it shows decreasing

trend. And it shows positive values.

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6.3.16. Net Profit Margin

Net Profit Margin = Earnings after Taxes / Total Operating Revenue * 100

2005 192 / 5245 * 100 = 3.66

2006 3090 / 9892 * 100 = 31.23

2007 4397 / 17216 * 100 = 25.54

2008 4076 / 21201 * 100 = 19.22

2009 4157 / 30571 * 100 =13.59

Net profit margin increases in year 2005 and 2009 and decreases till 2009. This value in

year 2005 is very small the reason being very small amount of earning after taxes. And

this amount in the coming years is very large. Therefore NPM in year 2005 is very less.

3.66

31.23

25.54

19.22

13.59

0

5

10

15

20

25

30

35

2003 2004 2005 2006 2007 2008 2009

years

Ne

t P

rofi

t M

arg

in

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6.4 HORIZONTAL ANALYSIS OF BALANCE SHEET

2005 2006 2007 2008 2009ASSETS Cash and balances with treasury and other banks 100% 200.8% 246.8% 209.% 225.%Lending to financial institutions 100% 117.8% 113.9% 97.6% 173.9%Investments - net 100% 81.8% 146.% 146.7% 168.2%Advances - net 100% 216.9% 255.2% 319.7% 357.2%Operating Fixed assets 100% 252.5% 295.8% 436.3% 487.7%Other assets 100% 152.7% 160.7% 260.1% 253.9%Total assets 100% 156.8% 199.4% 228.9% 261.3%

LIABILITIES & EQUITY

Customer deposits 100% 163.% 208.9% 235.4% 260.2%Inter bank borrowings 100% 146.8% 182.9% 221.5% 317.6%Bills payable 100% 89.9% 137.9% 116.5% 124.8%Other liabilities 100% 159.7% 228.7% 425.3% 345.%Sub-ordinated loans 100% 100.% 99.6% 99.9% 219.9%Total Liabilities 100% 162.% 207.5% 238.% 268.5%Share capital 100% 101.9% 122.3% 146.7% 161.4%Reserves 100% 40.6% 32.1% 22.% 15.9%Un - appropriated profit / (loss) 100% 188.8% 210.4% 235.2% 293.2%Equity - Tier I 100% 171.8% 194.8% 220.2% 274.1%Surplus on revaluation of assets 100% 180.4% 181.9% 191.8% 503.4%Total Equity 100% 172.5% 193.8% 218.% 292.1%

Total Assets have greatly increased in 2009 on terms of increase in cash, net investments,

advances and operating fixed assets. Liabilities have also increased due to a very great

increase in inter bank borrowings. Total equity has also increased due to a great increase

in reserves of ABL. These analysis shows that ABL is going through a growth phase due

to which it is incurring great increases in various items of balance sheet.

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Horizontal Analysis of Balance Sheet also shows that ABL is in good financial health and

is following proper strategies for expanding its business. Comparing the asset

composition in the two years the advances of the ABL have increased considerably, and

also the amount of the total assets has been increased. The increase in the advances shows

that customers have trust over the banks money and they are getting more and more

money from their bank and also the collection policy is fair and successful.

This deposit growth has enabled to increase market share of ABL by 40 BPs in only one

year’s time to reach 7.8%. In end of year 2009 loan portfolio of bank grew by 25.3% to

Rs.223.62 billions represented by 72% corporate loan book and 19% SME loan. Bank’s

managing portfolio while remaining vigilant of change economic environment. Bank has

managed to increase its market share by 40BPs to 7.1% to end of year 2009.

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6.5 HORIZONTAL ANALYSIS OF INCOME STATEMENT

2005 2006 2007 2008 2009Interest / Return / Non Interest Income earned Markup / Return / Interest earned 100.% 328.2% 404.2% 582.9% 784.1%Fee, Commission, Brokerage and Exchange income 100.% 107.6% 148.5% 214.8% 228.2%

Capital gain & Dividend income 100.% 830.6% 2,438.9%2,417.8

%3,772.8

%Other income 100.% 176.5% 50.1% 38.2% 23.3%Total 100.% 281.5% 359.7% 507.8% 674.%

Interest / Return / Non Interest ExpenseMarkup / Return / Interest expensed 100.% 855.4% 1,271.%

2,175.1%

2,823.5%

Operating expenses 100.% 128.7% 150.7% 206.9% 235.8%Provisions 100.% 57.3% 180.3% 223.4% 277.%

Taxation 100.% 780.8% 647.4% 677.5%1,177.5

%

Total expense 100.% 224.8% 309.8% 460.9% 588.2%

Profit / (Loss) after taxation 100.% 2,292.7% 2,125.4%2,167.4

% 3,714.%Total 100.% 281.5% 359.7% 507.8% 674.%

Profit and loss after taxation of ABL has greatly increased in the past three years due to

the following factors:

Fee, Commission, brokerage income was increased in the past four years.

Gross Income was increased.

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Interest Income of ABL was increased on account of consumer deposits.

Operating expenses proportionally didn’t increase that much.

Non-interest Income has also increased in the past two years due to increase in income

dealings in foreign currencies. Operating profit is increasing from 2005 to 2009 but

initially the increase was small but from the year 2005 the increase is greater and this

value is largest in year 2009 with a greater increase of more than 500% as compared to

value in 2009. And profit after taxation is also increasing from 2005 to 2009. Mark-up /

interest income of the Bank grew by 44% to reach Rs.30.6 billion led by earning assets

growth coupled with the re-pricing of assets at higher interest rates. With the quality of

growth given priority, average earning assets rose by 21%. Further, the management was

able to structure its assets to ensure that assets are re-priced adequately in the rising

interest rate scenario. As a result, the yield on average earning assets rose by 2%. Mark-

up / interest expense rose to Rs.16.6 billion depicting a rise of 64.1%.

The bank’s operating expenses rose to Rs.8.4 billion or 36% over last year. Increased

loan book and deposits volumes, that too amid overwhelming challenges on deposits

retention front, planned expansion and renovation of branch network complemented by

the high inflation were the primary reasons for such an increase. Further, various

branches were relocated to strategic locations, incurring higher costs, to support business

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growth. Various expenses tend to have a long term impact on improving bank’s image

and in turn, on business retention as well as growth.

6.6 VERTICAL ANALYSIS OF BALANCE SHEET

2005 2006 2007 2008 2009ASSETS Cash and balances with treasury and other banks 9.4% 9.8% 9.5% 7.% 6.6%Lending to financial institutions 3.% 7.6% 5.8% 4.3% 6.7%Investments - net 23.3% 18.6% 26.2% 22.4% 22.7%Advances - net 57.7% 57.1% 52.6% 58.1% 56.7%Operating fixed assets 2.5% 2.6% 2.4% 3.% 3.%Other assets 4.1% 4.3% 3.5% 5.% 4.3%Total assets 100.% 100.% 100.% 100.% 100.%

LIABILITIES & EQUITY Customer deposits 83.9% 81.8% 82.3% 81.1% 78.6%Inter bank borrowings 5.% 7.3% 7.2% 7.6% 9.5%Bills payable 1.3% .9% 1.1% .8% .8%

Other liabilities 2.3% 2.% 2.3% 3.7% 2.6%Sub-ordinated loans 0.0 1.% .8% .7% 1.3%Total Liabilities 92.4% 93.% 93.7% 93.9% 92.8%Share capital 2.3% 1.8% 1.7% 1.8% 1.7%Reserves 3.% 2.4% 1.9% 1.6% 1.6%Un - appropriated profit / (loss) 1.4% 2.2% 2.2% 2.3% 2.9%Equity - Tier I 6.7% 6.4% 5.8% 5.7% 6.2%Surplus on revaluation of assets .8% .6% .5% .4% 1.%

Customer deposits hold a portion of 80 to 98 percent of the total liabilities and equity this

shows how much customer deposits ABL has. Total Equity holds only 6 to 7 percent of

the total liabilities and equity which shows that ABL mainly generates its funds from

customer deposits rather than equity financing.

Advances hold the most portion in total assets of ABL. In the year 2009 banks suffer

major crises in which heavy withdrawals from the accounts observed, during this period,

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bank wanted to maximize their profit by advancing, that’s why in 2009 liquidity its cash

balance lined with other banks as result 52.6% to 58.1%.

5.5% amount brings interest that is income of bank. In previous years, bank profited from

foreign investments. Banks use to survive very tough situation decline, a lot of mergers

observed, many banks lost their name. But, ABL survived with little decline on deposits

time.

Some time bank use to increase interbank borrowing advises adverse situation equity was

increase. As 2007 base year, equity decrease in appropriated profit increase 2.2% to

2.3%.

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The total deposits of the bank have been increased by 16 % and over all trend in the

deposit is increasing which shows that the customers are putting more and more money

into the bank and they trust that their money is safe in ABL.

6.7 VERTICAL ANALYSIS OF INCOME STATEMENT

2005 2006 2007 2008 2009Interest / Return / Non Interest Income earned Markup / Return / Interest earned 83.6% 87.5% 84.4% 86.2% 87.3%Fee, Commission, Brokerage and Exchange income 12.4% 8.3% 9.% 9.2% 7.4%Capital gain & Dividend income 1.7% 2.7% 6.3% 4.4% 5.2%Other income 2.3% 1.5% .3% .2% .1%Total 100.% 100.% 100.% 100.% 100.%

Interest / Return / Non Interest ExpenseMarkup / Return / Interest expensed 17.1% 34.5% 40.2% 48.7% 47.6%Operating expenses 36.2% 26.9% 24.7% 24.% 20.6%Provisions 5.9% 4.7% 11.4% 10.% 9.4%Taxation 14.7% 11.5% 7.5% 5.6% 7.3%Total expense - percentage of total income 73.9% 77.6% 83.8% 88.3% 84.9%Profit / (Loss) after taxation 26.1% 22.4% 16.2% 11.7% 15.1%Total 100.% 100.% 100.% 100.% 100.%

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From the vertical analysis, it is clear that ABL like any other banks earns its most income

from interest income earned on giving out consumer and business loans. They hold

almost 80 to 170 percentage of the gross income. Interest expenses also incur to a great

deal on account of giving out deposits to consumers and businesses. Operating expenses

also hold a considerable portion in income statement that is up to 40 to 70 percent of the

gross income.

Markup interest income of the bank grew by 45% to reach Rs.30.6 billions to which the

quality of the growth priority. Average earning asset rose by 21%. Markup interest

expense grew to 16.6 billion the banking industry experienced shrinking liquidity this

year, which therefore led to pressure on to banking industry and liquidity issues.

Non mark-up income grew by 5.9% to Rs.4.2 billion, contributing 23% to gross income.

The core fee, commission and brokerage income grew by over 19% to Rs.1.98 billion.

Amidst global recession and weakening economy, the bank was still able to grow its

investment banking fee income remarkably by 24% to Rs.299 million. Account

maintenance charges fell by 23% to Rs.314 million primarily

ABL has performed well. Despite various challenges faced by country (Pakistan) in

domestic front and led by global reflationary trend as the bank has posted and operating

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profit of Rs.9.8 billions, which is by 10% over 8.8 billions registered during 2009 profit

after tax 6.12 billions. The growth has been achieved in spite of a good portion of

impairment losses. This growth has been achieved in spite of expected losses.

6.8 ORGANIZATIONAL ANALYSIS

Although ABL is in an industry where it has many competitors but it is being compared

as following two biggest competitors which are MCB and HBL:

Description (in

millions)

ABL MCB HBL

Assets 366,680 443,615 717,302

Liabilities 344,325 385,179 652,257

Profitability 4,157 20,526 10,001

If ABL is compared with MCB and HBL, it is observe that HBL is a big banking group

as compare to ABL and MCB. Deposit wise HBL is in front of both ABL and MCB.

Although ABL is in good position as compare to MCB in deposit situation. It shows

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customer’s trust on both banks. HBL again ahead in case of advances portfolio as

compare to ABL and MCB. Here health portfolio of advances places the ABL in second

position which is a good indicator. But profit wise MCB is in front of both HBL and ABL

in year 2008. Branches of HBL are greater than ABL and MCB. There is a less difference

between ABL and MCB in number of branches. MCB has greater number of employees

as compared to ABL and HBL.

These figures show that HBL and MCB are in much better position than ABL. After the

privatization business of ABL is taking high growth. The Bank's long term rating is AA

+, which denotes good credit quality. Protection factors are strong. Risk is modest but

may vary slightly from time to time because of economic conditions. The short-term

rating is A-1+, which denotes the highest certainty of timely payment. Short-term

liquidity, including internal operating factors and / or access to alternative sources of

funds, is outstanding and safety is just below risk free Government of Pakistan's short-

term obligations.

The bank is increasing resource mobilization through regular deposit campaigns and

accelerating the process of recovery of outstanding advances and non-performing assets.

The Bank is making every effort to meet the up-coming challenges through strategic

planning and making the best use of the resources at its command. These financial figures

and improving condition of the bank shows that ABL is among the leading commercial

banks of Pakistan.

6.9 FUTURE PROSPECTS OF ABL

ABL aims to offer products that will change the industry norms by providing innovations,

options and flexibility unmatched so far by any other bank due to the investment made in

the state-of-the-art systems at ABL. ABL plans to expand the market by its vast

distribution network. ABL’s products & services are being developed keeping in view the

increased level of consumer awareness due to increased accessibility of information, and

hence the demand for better products and services with options.

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Management believes that their business process reengineering initiative supported by

their customized core banking technology platform will also help them to compete more

effectively in the changing landscape of the Pakistani banking sector. Bank’s Credit Risk

Environmental and Monitoring system which is in its final stages of implementation is

expected to assist them in more effective post disbursement monitoring. They expect

their efforts in this area to show positive results in the coming months.

Macro economic and political instability, going forward, will continue to impact growth

and profitability of the banking sector. Management believes that political reconciliation

will result in renewed attention to economic management and hence improvement in the

operating environment.

Management is focusing on converting the manual branches into online branching system

and also to expend their branch network domestically and internationally. Management is

also keen to increase the ATM network in future and plans have prepared for it.

Management believes the bank is well positioned to take advantage of the next economic

upturn.

ABL is expected to fulfill following demands in future:

Achieve high performance

To provide high-tech innovative solutions to meet customer requirements

To provide value-added services to our customers

Innovation and Growth.

To create sustainable value through growth, efficiency and diversity for all

stakeholders

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To provide a challenging work environment, and reward dedicated team members

To play a proactive role in contributing towards the society

Integrity

Provide excellence in Service.

More technical methods.

ABL has emerged as one of the foremost-privatized financial institutions in Pakistan

endeavoring to gear up its operations to meet the demands of the future. It has the

following opportunities which it can meet in future:

The biggest opportunity for the ABL, Islamabad is the greater number of non

Muslim customers who get their payments through ABL, Bank. These customers

can be easily convinced to open their accounts with ABL.

A considerable portion of the labor force of the area is serving overseas. Their

families can be encouraged to use ABL as channel for remittances.

The Internet facility in the area provides an opportunity to ABL to get Online.

The Bank has the basic infrastructure, which can facilitate the online process.

The location of the ABL, G - 9 branch itself provides an opportunity to ABL to

get more and less cost deposits.

The group from its survey and analysis of IT companies has found out that there

are many companies which are not satisfied with its current bank, so Khyber

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branch with its superior service quality and long working hours can capture those

customers.

7. WEAKNESSES OF ABL

Following are the weak areas of ABL stressing on financial aspects which needs

management’s attention:

The Branch has a good staff combination on the basis of experience, but their

training capabilities are not up to the requirements of the fast changing banking

environment.

The customer’s Long-term contacts are not maintained with customers.

The technical training of the staff is negligible e.g. in case of the absence of

computer there is no alternate trained personal who can record the daily

transactions.

The organization is very much mechanistic and provides no flexibility to

encourage creativity.

The lower staff is non cooperative as compared the lower staff of other branches.

The control of manager is not effective.

The discretionary powers of manger are very low to offer more incentives and

value added services to its customers.

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There is a lack of commitment and professionalism on part of the employees. The

staff is always in a hurry to leave the bank as soon as possible. They were also

observed to starting their operations comparatively late.

The organizational culture is not cooperative.

Nepotism was observed on part of the manger as well as the top management

towards some staff members.

The branch has no industrial accounts.

The level of technology management in the branch is very low. The technology

available is not maintained well mainly because of the lack of technically trained

staff. For instance the scanner, in spite of its availability has not been used for

scanning the specimen signature cares.

In spite of the presence of technology many jobs are done manually such as the

letters, drafts for fax messages and other calculations, which could be easily, done

in MS Word and Ms Excel.

The branch lacks some physical facilities such as clean washrooms which can

affect employee’s performance

The layout of the branch is such that it is hindering the flow of work on one hand

and the documents are lying exposed which can be easily taken away by any

person entering the branch.

The job distribution is not up to the mark. The immediate result of this immediate

result of which is:

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The filing system is not up-to-date. Much time is wasted while searching for

even a week old document.

The staff spent ore time in collections than required.

Delays were observed because the prescribed procedures are not followed.

Though ABL in the area it lack specialized counters or facilities such as:

Investment advisory counters;

Leasing or leasing arrangements;

Credit services.

The four branches of Allied bank in Islamabad are closely located where most of

the services offered are not at all differentiated.

No efforts are made to recover the outstanding debts.

There is no facility for receiving and satisfying complaints and inviting

suggestions.

Foreign currency accounts are not entertained. The main reason for these negative

responses that the staff is not trained in dealing foreign currency accounts.

Customers’ coming to the Bank for TTs TCs etc. are not received with open

hearts and thus deprives the bank of revenues.

Some shortcomings on part of Allied Bank of Pakistan, which affects the

operations of the bank:

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There is a lack of functional and proper research and development, which

could scan the micro and macro environmental data for future planning and

strategy.

Financial audits are conducted but operational audits have not received proper

attention as much as it should get.

There is no procedure, which could encourage the middle and lower level

management to initiate creativity.

The biggest threat to the operational success of the branch is the better

competitor’s services. Many private sector banks are offering higher rates of

return to customers than Allied Bank of Pakistan.

Cannibalization of profits is yet another threat to the success of Bank. The

branches of Allied Bank are located very close to the each other. All these

branches are taking away each other’s customers.

One of the biggest to the ABL is the increasing rate of dissatisfies customers.

Most of these customers were observed to be dissatisfied with the delays in their

servicing.

The greatest threats to the performance of ABL, are the decreasing morale of

employees. They feel that they are not provided with bonuses. They are not given

proper attention to have a say in the annual meetings. The proxy forms are signed

on their behalf without letting them know.

High-pressure interest groups are developing which poses a constant threat to

Allied Bank.

8. CONCLUSION

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ABL offering a growth menu of services through multiple ways. for providing better

services it has increase the departments and divisions. Moreover the skills bank need to

function efficiently are changing rapidly with new technology and increasing

competition. There is growing emphasis on services marketing, corporate planning,

electronic banking and efficient services delivery and improved management information

system that link the computer more closely with both management and customer service

need.

Banks use to survive very tough situation decline, a lot of mergers observed, many banks

lost their name. But, ABL survived with little decline on deposits time. Not only survive

also captured profits in perplex situation. Financial position espouses due to the quality of

its management and the economic conditions in the banking industry are appearing to be

for more important to success.

Bank has maintained a relationship among bank operations, profitability and efficient

service delivery. It performed well in serving customers and in providing acceptable

returns to their customer. Increasingly bank mangers are being forced by both

competition and regulatory pressure to asses that bank’s performance over time and

relative to the other banks.

9. FINDINGS AND RECOMMENDATIONS

The critical analysis ABL in the previous section is the representation of its past, mirror

of its present, and an insight into its future. The past data of ABL G - 9 branch enabled

me to study the organization in a historical perspective and understand the nuisances in

the banking operations. Study of he present of ABL helped me evaluate the organization

in comparison to its future and competitors. The data obtained from the analysis of its

present and future in combination with my professional studies resulted in some

suggestions and implementation plans, which can help to increase the profitability and

operational success of the ABL.

Some of the major findings suggestions are discussed as below:

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9.1 Physical Facilities

The physical facilities or the layout are the most fundamental features in an organization,

which the customers observe in forming an opinion, perception or idea about the

organization. Therefore, every organization tries to make a good first impression on

customers through the presentation of its physical facilities or layout. The physical

facilities in the branch are not up to the mark, which requires timely changes to provide

good environment to customers. The suggested changes and corrective actions are gives

below:

The lighting system must be improved and all the out of use lights must be

replaced.

There is always a stinking smell in the Bank due to the out of order condition of

washroom. Therefore the washroom must be brought into order to remover this

unpleasant smell.

Generators should be made available to the branch to minimize the disruptions

due to power failure.

Newspaper should be provided to the customers to avoid the pain of waiting long.

A cash counting machine can help reduce the time spent in counting cash.

9.2 Availability of Staff

The existing staff in the Bank is overburdened due to the non-availability of more staff.

Staff in the branch must be in proportion to the customer has so as to expedite the

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workflow, avoid overloading of staff and remove the customer’s grievances arising

mainly due to delay in workflow.

The additional staff required is in the fallowing categories:

More technically trained staff should be added to the existing staff

strength.

One staff assistant or grade 2 officers properly trained in computer and

sufficiently trained in foreign currency accounts.

One employee of grade 4 should be hire on daily wages or contract, to maintain

filing.

9.3 Commitment of Employees

The decreasing commitment of employees can be increased by introducing an effective

performance appraisal system, which can reward and recognize the achievements and

services of employees for the Bank.

The appraisal system must have the following features:

Feed Back: Periodically provided to employees and recognizing their efforts

through reward (bonuses) and publicly appreciation.

Uniform: The appraisal system must be uniform in evaluating all the employees

without any discrimination.

Objectivity: The appraisal system must be based on facts and figures and

objective evaluation of the facts on grounds.

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9.4 Simplification of Advances

The biggest source of the bank revenue is advances. The advances of ABL, G - 9 branch

are on him decreasing trend, causing a decrease in the revenue for the bank. The bank

should make the advance procedure simple and quick to meet the customer’s

requirements. The following steps are suggested for simplifying the advance procedure.

Increasing the discretion of manager for the amount of advance to Rs. 100,000.

Speeding up the process of investigation and verification.

Expanding its customer base.

9.5 Marketing Concept

The concept of marketing should be followed in every aspect of the organization.

Generally, the bank’s staff considers that marketing is to go to customers, beg them for

opening an account with the Bank and to abide by his every just and unjust action

They should be taught that marketing is not only to go to customers only. A customer can

also be attracted by provided customer oriented services, showing empathy to customers

and attending him personally.

9.6 Customer Orientation

Deposits are the main source of funds for commercial banks. Therefore, the priority of

every bank is to increase the number and amount of deposits. The key to successful

business does not lie in simply attracting new customers. The real success is to maintain

in the old customers and attract new customers at the same time because retaining a

customer is more difficult than attracting new customers.

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Every depositor should be given equal importance and there should be no

differentiation between customers so that every customer feels himself as much

important as the other customer.

The attitude of the staff should be friendly to all the customers. The customers

should be taken to the concerned person or guided friendly if the concerned

person is not available. The attitude of “that’s not my job” should not exist

anymore.

9.7 Mobilization of Less Cost Deposits

The analysis of expenses shows that 43% of expenses of the bank are the payments on

fixed deposits, which is a very high proportion. Apart from this the interest earned on

advances Rs. 0.265 million is smaller than the interest paid on different deposits Rs. 4.1

millions

The bank should launch a campaign to get less cost deposits much as high amount

current account as well as low cost PLS saving accounts.

9.8 Information Access

The Bank should provide information to all the present and potential customers relating

to the new products, services, some service’s fee structure and other matters, which are

likely to affect the customers. It should be made sure that all the customers have access

to this information. Conveying information is of no use, unless, there is some feedback

from the customers. The following measures are suggested to implement this suggestion.

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Brochures, hand outs, pamphlets and other printed reports must be provided to

customers, which should provide all the information necessary to attract and retain

customers and to satisfy the customer’s need for more information.

Personal contacts with the customers can help in providing information to

customers. All the customers must be provided a chance to get the desired

information by personal contact with the Bank staff.

Complaint and suggestion box should be maintained at the door of the Bank where

the customers can point out drawbacks in the customer’s services and put forward

their suggestions on his improvement of the services quality of the Bank.

9.9 Performance Audit

The financial audit of the bank is conducted on regular basis both as a surprise and

routine audit. However, the performance and system audits are completely ignored

which, other wise, should have been a compulsory part of the auditing services of the

Bank. The immediate outcome of ignoring performance outcome is shortcoming in the

non-financial aspects of this organization such as customer relations, lack of necessary

facilities, motivation of employees, and the control of manager.

In the light of the above facts it is suggested that the performance audit of the bank must

be carried out on both regular and surprise basis to keep the Bank competitive in the run

of for more customers, more deposits and high profitability.

9.10 Campaign for Increasing the Deposits

The numbers of account holders in a bank make a significant contribution to the deposits

of the Bank and determine its business volume, profits and size of a bank. Therefore,

ABL, G - 9 branch must a clear plan for increasing the number of accounts. The details of

plan for increasing the number of accounts are given in the implementation plan.

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9.11 Increases in Business Share

Along with concentrating on increasing the customer base, the Bank must also

emphasize on securing the highest market share in other banking services such as

issuance of letter of credit, foreign exchange, remittances, bills identification of

productive secure and easily realizable advances etc. to achieve this strategy the Bank

should have a clear plans with the consent of the higher management. The plan must be

divided into different periods – weekly, monthly, semiannual and annual. Every stage of

the plan must be monitored and controlled on regular basis.

9.12 ATM Network Problem

I have found some problems with ATM network. Many customers have complaints that

their requests placed on ATMs don’t carry out. It is mainly because of bad PTCL lines.

Distortion in lines of PTCL restricts the execution of requests placed on ATM machines

by customers. Although there is a network of dedicated lines for ATM machines, a

request may not be successfully carried out because of complicated request processing. A

successful execution of a request needs to be approved from three places:

The branch (online) with which the customer (placing the request) have the account

Main branch of that area (city)

The head office (in Karachi)

So connecting to all of these three places simultaneously and getting the request approved

is a complicated process. However management claims that there is nothing wrong with

processing. The only problem lies with PCL lines. So to solve this problem the bank

should hire technicians who can work during public holidays to make the ATM useable

while it shows any distortion.

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9.13 Cash Deposits Using ATM

Now-a-days in foreign countries ATM machines are also used for deposits of money and

utility bills can b paid up through ATM. But in Pakistan these services have not been

utilized yet. So if ABL upgrades its ATM technology so definitely it will get the

competitive advantage over other banks.

9.14 Networking among Banks

In allied bank the networking is only done with in the bank, means the customer can’t

transfer his funds to other bank through online. The account holder who has the debit

card can transfer his money to other bank account through ATM. But the customer who

doesn’t have account but some one gave him a Habib bank cheque to transfer it online

through near situated Allied bank. So the allied bank can’t transfer it to Habib bank via

online. So I recommend an idea that there should be a networking among different banks

so that they can transfer funds via online.

9.15 Manual Vouchers System

As all the ledger system and vouchers are made manually which is a much time

consuming job and it also requires much more efforts most importantly human error

chances are there that’s why if the organization implement “SAP FINANCE MODULE”

in their current saving department that will help them creating automatic vouchers and

ledger if any transaction is made by customer because SAP has the capability to keep all

the records of a an individual at just one place and it has the capacity to store much data.

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9.16 Online Loans

I have found that there is no online facility to apply for a loan. Where as, in other banks

especially in foreign banks the customer who has an account in the same bank, can apply

for a loan through Internet. So that he can save his time from going physically to the

bank.

10. REFERENCES

1. Muhammad Tanveer. Grade-1 officer. Branch manager, ABL G.9 Islamabad.

2. Muhammad Tariq Abbasi. Customer Services Manager, ABL G-9 Islamabad.

3. Asad Ullah Makhdoom. MTO, ABL I-8 Islamabad.

4. Yousaf Shah. Grade-1 officer. ATM coordinator Zonal office Islamabad.

5. Allied Bank Ltd Annual report (2007), Karachi.

6. Allied Bank Ltd Annual report (2008), Karachi.

7. Head office of Islamabad performance report (2007)

8. Head office of Islamabad performance report (2008)

9. http://www.abl.com.pk

11. ANNEXES

11.1 ANNEXURE I

President and CEO

Board of Director

Head of Departments

Regional General Manager Controllers of Operation

Branch Manager

Office G-I, II and other lower Staff

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Organogram of ABL

11.2 ANNEXURE II Customer Service Manager (M.Tariq Abbasi)

Remittance Deptt(Ms. Farida Saeed)

CD Deptt(Nabeel Ashraf)

Branch Manager (M. Tanveer)

Clearing Deptt(Shahid Hassan)

Payment/receipts(M.Irfan)

U.Bills(M.Saleem)

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Organogram of ABL G-9 Branch

11.3 ANNEXURE III

CFO

Finance Department

Accounts Department

Investment/Financing

Planning Deptt

Portfolio

Management Deptt

Accounting & Operation

Deptt

Fund Raising Deptt

Commercial Loan Officer

Lending Deptt

Accounting & Audit

Deptt

Consumer Loan

Officer

Control Deptt

Asset Liability Management

Deptt

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Organogram of Finance Department of ABL

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