Internship Report:

BANK ALFALAH LIMITED

Submitted By:

The evolution of Bank Alfalah signifies a movement from concept to reality; a reality to bring about a change in the banking industries of Pakistan; offering an alternative way of banking; providing people an opportunity to practice beliefs in their financial matters.

Following privatization, Bank Alfalah emerged as new identity of Habib Credit and Exchange Bank with a revived purpose and commitment. Charged with the strength of Abu Dhabi consortium and under the leadership of His Highness Sheikh Nahayan Mabarak Al-Nayayan, the bank has already made significant contributions in building and strengthening both corporate and retail banking sector in Pakistan.

At present the bank has expanded its operations across Pakistan in 74 cities with 189 operational branches. However, it has total 195 branches that include 23 Islamic Banking branches, five overseas branches three in Bangladesh and two in Afghanistan and one offshore banking unit in Bahrain. It is pertinent to note that all of its branches commenced their operations in Real Time Online Mode. Today Bank Alfalah is the fifth largest Banking operation in Pakistan. Since its inception, it has registered the fastest growth rate ever witnessed by any Banking operation in Pakistan.

Bank Alfalah continues to grow in a robust manner amidst considerable volatility in the banking industry. The bank is striving to prosper in terns of financial returns and the value it continues to provide its shareholders especially when tighter spreads are exercised and margin are compressed due to high interest rates as a tool to curb inflationary pressures. The profit before provisions and taxation of your bank for the year 2008 stood at Rs. 3.264 billion which was 10% higher than that of last year. The deposit grew by 7.7% and stood at a figure of Rs. 239.509 billion while advance portfolio grew by 26% and showed a figure of Rs. 149.999 billion.

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The most valuable asset of any financial institution is its human resource. Bank Alfalah has at present a dedicated and commendable workforce of around 6,543 staff members other than outsourced. The training and development centre remains at the helm of imparting training and related skills, not to only fresh recruits but also to existing employees. Bank Alfalah has in place the state-of-the-art Training and Development Center both in Lahore and Karachi for equipping the personnel of Bank Alfalah with tools that help carve a brighter future. Its philosophy in this regard is that training is indispensable in not only enhancing organizational effectiveness but also individual job satisfaction.

Bank Alfalah has lined up a number of innovative products. These include Alfalah credit cards, Alfalah Hilal cards, Bank Alfalah Car finance and Leasing, Alfalah Milkiat finance, Alfalah Karobar finance, Bank Alfalah Home finance, Alfalah Zarie sahulat, Money gram, Alfalah Phone banking and online baking. Designing the product portfolio of bank in response to the customers preferences, the product like Royal Profit, Alfalah kifayat scheme, are prime examples of quality and innovation providing timely banking opportunities to the customers of bank. Being an active player in banking sector in Pakistan, they are confident that with the commitment of their team they will be able to gain the reputation of the fastest paced financial institution.To make their banking solutions become accessible to more and more people, they have embarked upon a rapid expansion program, aiming to provide a networking that makes the services available to any of their customers in all the major urban centers of Pakistan- with a view to go international in the near future.

With their key indicators of progress already soaring to new heights, the bank is committed to dedicate all its energies, resources and time to bring higher value and satisfaction to their customers, employees and shareholders.

The graph of bank is going up and up every year. The ratio of profit is increasing at good percentage. The bank is serving the people at high level of standard by going according to the whishes of the customers.

Internship is the basic requirement of all business programs in nearly all of the business institutes and especially in Hailey College of Commerce, University of the Punjab, Lahore. It is actually the basic requirement of the course of B-Com (Honors). Firstly the purpose of internship period is to become familiar with the practical world that what is actually happening in different national and multinational companies and how different activities are performed over there. Secondly, to cope the theoretical knowledge with the practical side that what is to be taught us in business institutes and how it is implemented in different enterprises? I have done my internship in Bank Alfalah Limited (Garden Town Branch, Lahore) since 16th of July 2009 to 15th of September, 2009. I gained a lot from this internship tenor under the kind supervision and guidance of my internship supervisor. During my whole time I was visited through different cells of the bank and was thoroughly briefed about the procedure and working by cordial senior staff of there. My report is all based on what I have learnt there. I hope that my report will given you good overlook of all the banking related matters.

All praises, thanks and acknowledgements are for CREATOR; the ALMIGHTY ALLAH Who has bestowed upon human being the crown of creation and has endowed him with knowledge and wisdom. I offer thanks to the Holy PROPHET (PBUH) WHO is the beacon of enlightment and the greatest benefactor the mankind ever had. Who brought for us revelation and unlimited knowledge and civilized the barbarian human being.

I would like to present a token of thanks for the staff members of Bank Alfalah Limited Garden Town Branch, Lahore, who were cooperative to me in the completion of this report and provide me their complete guidance. As banks are very much sensitive about their secrecy, even then after taking an understanding, they let me handle their delicate operations.

My special thanks to Mr. Gohar Irfan (branch manager), Mr. Raheel Yaqoob (operations manager), Miss. Sara Dawood (HR manager), Mr. Ateeq-ur-Rehman Sidu (credit manager), Mr. Saad Mahmood (Accounts officer), Mr. Ahmed Moin (officer consumer finance), Mr. Naveed Khalid (Account opening officer), Mr. Irfan Siddique (incharge of Remmittance department) Mr. Muhammad Hamid Bashir, Mr. Numan Akram and Mr. Majid Sharif who gave me a horde of useful information and treated me extraordinarily at each step of my learning over there.

Maidah Masood

I would like to dedicate this accomplishment offline to my beloved and caring parents, and to my teachers with the support of whom I am standing at this step of my life stairs.

Table of Contents

Introduction to Bank Alfalah Ltd....9

History & Present Status of BAL....11

Mission Statement....16

Vision Statement...17

Company Management Systems.20

Organizations Structure.....23

Fields and Activities.....25

Administrative/Management Styles...36

Work Done by Me....41

Financial Highlights...101

Ratio Analysis.....103

Marketing Mix of BAL..148

Recommendations..181Conclusions.183INTRODUCTION TO BANK ALFALAH

Bank Alfalah Limited wasincorporatedonJune 21st, 1997 as a public limited company, under the Companies Ordinance 1984. Its bankingoperations commenced fromNovember 1st, 1997. The bank is engaged inIslamic banking, commercialbankingandrelated services asdefinedin the Banking Companies Ordinance, 1962. The Bank is currently operating through 195 branches in 74 cities, with the registered office at B.A.Building, I.I.Chundrigar, Karachi.

Management of Bank Alfalah accepted the challenge to transform this bank into a highly professional, most efficient & service oriented institution. The management has been successful in fulfilling the undertaken challenge. It has been successful in making a significant contribution to both corporate and retail banking in Pakistan. Over the years, its emphasis on growth has resulted in a strong entity capable of offering high quality services to a wide spectrum of clients, in a highly challenging business environment. Its strategy is to maximize the synergies of branch network through an optimal allocation of financial resources in the face of dynamic challenges of present financial environment.

Strengthened with the banking of the Abu Dhabi Group and driven by the strategic goals set out by its board of management, the Bank has invested in revolutionary technology to have an extensive range of products and services. Thisfacilitatestheir commitment to acultureofinnovationandseeksout synergies with clients and service providers to ensureuninterruptedservices to its customers. The bank perceives the requirements of its customers andmatches them with quality products and service solutions. During the past ten years, we have emergedas one ofthe foremost financial institution in the region endeavoring to meet the needs of tomorrow today.

Bank Alfalah Limited has continued its upward climb in pursuit of excellence. Strengthened by the backing of the Abu Dhabi Group and driven by strategic goals set out by its Board and management, Bank Alfalah Limited increasingly inspires trust and confidence of all its clients. Within a short span of time the bank has carved a significant niche for itself in the banking industry.

These achievements have been preceded by concerted effort to provide highest levels of service and value to our customers. The bank aims to further enhance performance standards through implementation of innovations in both products as well as customer care, by discovering newer avenues of client benefit. This customer-focused strategy has enabled Bank Alfalah Limited to evolve as a single source financial service provider of corporate and retail banking services. Bank Alfalah reputation has been built on its tradition of high quality and the expertise of its extremely motivated and qualified staff. With strategic mergers and acquisition, Bank Alfalah has become a leading player in the global banking arena. The Bank Alfalah Limited team comprises of dedicated professionals equipped with a diverse array of skills, vast experience and pro customer attitudes. The management concentrates its energies on making informed economic decisions, translating it into greater returns for our investors and customers. This prudent attitude has created a synergistic organizational structure leading to improvements in profitability and a sustainable competitive advantage for the bank. A Highly Responsive Product Portfolio is not only comprehensive but also customizable to match the needs and preferences of the customers. These characteristics of the portfolio have helped Bank Alfalah Limited to face challenging economic conditions. The product lineup continues to fulfill and satisfy the banking requirements of not just the conventional consumer, but the demanding financial needs of the corporate sector as well. Today, as Pakistan moves into the 21st century with its ambitious expansion and development programs, Bank Alfalah is here to join the efforts to help the country meet its growth objectives. The bank offers an extensive range of financial services specifically designed to cater to the needs of its successful associations with the Government and Private Sector.HISTORY AND PRESENT STATUS OF BANK

ALFALAH

Bank of Credit & Commerce International (BCCI) was a Pakistan based bank, established by Mr. Agha Hassan Abdi from UBL, in association with U.A.E and Europe. BCCI has its branches in 74 different countries of the world. It had its 3 branches in Pakistan. In 1991, the BCCI was banned, when was accused by European countries that the bank was involved in some illegal operations with Gulf countries. The major reason behind European accusation was that BCCI was of Islamic mode. Therefore, the bank was closed due to international pressure. Then, its 3 Pakistani branches were taken over by the Government of Pakistan, which were named as Habib Credit and Exchange Bank (HCEB) and these were working as subsidiary of Habib Bank Limited.

Following the privatization in July 1997, Habib credit and Exchange Bank assumed the new identity of Bank Alfalah on February 25, 1998. It is now Abu Dhabi based bank as the family of H. E. Sheikh Hamdan Bin Mabarak Al-Nahayan purchased 70% of its shares and 30% shares remained with Habib Bank on behalf of Government of Pakistan. Since its inception, as the new identity of H.C.E.B after the privatization in 1997, the management of the bank has implemented strategies and policies to carve a distinct position for the bank in the market place.Since 1997, the bank has made great strides towards growth and profitability. BAL network has expanded from 3 in 1997 to 195 as on March 2009. The deposit base moved from less than Rs.9 billion to over Rs. 227 billion, advance from 5.8 billion to 109 billion. Being a bank that is focused on financing of foreign trade, volume of foreign trade business has grown from Rs. 5.8 billion to over Rs. 190 billion as on December 2008.Charged with the strength of Abu Dhabi consortium, and under the leadership of His Highness Sheikh Nahayan Mabarak Al-Nahayan, Minister of Higher Education and Scientific Research, Government of Abu Dhabi, and a prominent member of Royal Family, the bank is energized with the vision, envisaging the development of various sectors in Pakistan.Commercial Banking Scenario in Pakistan

The function of commercial banking and application of the fundamental principle of the depositor bank relationship have remind essentially the same since about 500 B.C. bank operation methods and procedures, on the other hand , have undergone a constant process of evaluation because of economic growth, the mounting volume of transaction and greater use of banking feasibilities.At the time of independence there were practically no industries and resources so it was very difficult of Pakistan to run its own banking system immediately. There were 487 offices of scheduled banks in the territories now constituting Pakistan. Therefore in accordance with the provision of India independence Act of 1947, and expert committee was appointed to study the issue. The committee recommended that the Reserve bank of India should continue to function in Pakistan until 30th September 1948. It was also stipulated that Pakistan would take over the management of public debt and exchange control Reserve bank of India on 1st April 1948. Then Indian notes would continue to be legal ender in Pakistan till 30th September1948. By 30th June 1948, the number of offices of scheduled banks in Pakistan decline from 487 to 195. In order to establish a full-fledged control bank the Governor General of Pakistan Quaid-E-Azam Muhammad Ali Jinnah, inaugurated the state bank of Pakistan on July1st, 1948. At the time of independence in 1947, there were 38 scheduled banks with 195 offices in Pakistan but by December 31, 1973, there were 14 scheduled Pakistani commercial banks with 3,233 offices all over Pakistan & 74 offices in foreign countries.

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

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

As the result of these contributing factors methods and practices necessary to handle the increase volume of detail work have been developed while an other and quicker method have been adopted in order to cope with the increase volume , much in which has been accomplished without unduly increasing cost of doing business.

During to last 20 years we have experience a constant transaction from the old to the new from manual to mechanical method and procedure, from old establish practices to current techniques and to a more scientific approach to the solution of the problems brought about day to day changes in business practices.

Commercial banks operating in the country can be divided into four distinct categories, private banks, foreign banks, privatized banks and nationalized commercial banks (NCBs). The number of private banks has remained almost constant ever since they commenced operations in early nineties. However, ownership of a number of private banks has changed over the years. Lately, with the take over of Prudential Bank and Platinum Bank by the new sponsors their names were changed to Saudi Pak Commercial Bank and KASB Bank respectively. Earlier, ownership of Union Bank and Schon Commercial Bank changed. While the new sponsors of Union Bank preferred to continue with the same name, the buyers of Schon Commercial Bank changed its name to PICIC Commercial Bank.Union Bank acquired the operation of Emirates Bank International (EBI) in Pakistan. The scheme of amalgamation was notified by the central bank on September 03, 2002 and Union Bank settled the amalgamation price of US$ 37 million on September 09, 2002. Union Bank had acquired Pakistan operations of Bank of America in year 2000 and American Express credit card business in Pakistan in year 2001.

In the NCBs category two banks Habib Bank and National Bank of Pakistan have been left after the privatization of United Bank. National Bank of Pakistan has been listed at local stock exchanges and parts of its shares were off loaded. The GOP is actively pursuing the privatization of Habib Bank, through sale of its 26% shares along with transfer of management. The remaining shares of the GOP in Muslim Commercial Bank and Bank Alfalah were also sold. The GOP sold majority shares of Allied Bank of

Pakistan in early nineties but has not been able to off load its remaining shares in the bank.

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

1) It was the largest transaction, and

2) A large part of sale proceeds was received in foreign exchange.

The consortium comprising of Abu Dhabi Group and Bestway Group has acquired 51% shares of the bank along with management control. Since October 2002 the bank has been working under the new sponsors.

Meezan Bank was created as a result of merger of Al-Meezan Investment Bank and Societe Generale. The first ever license to operate as a Scheduled Islamic Commercial Bank was granted to Meezan Bank on January 31, 2002. Pakistan operations of Societe Generale were amalgamated into Meezan Bank on May 01, 2002.

The number of foreign banks operating in Pakistan has been declining constantly since the GOP decided to freeze foreign currency accounts in May 1998. The total number of foreign banks in the country has reduced to half since the freezing of foreign currency accounts. The positive point is that most of the foreign banks were able to sell their Pakistan operations at attractive prices.

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

To be the premier organizations operating locally and internationally that provides the complete range of financial Services to all segments under one roof. OBJECTIVES OF BANK ALFALAHThe objectives of Bank Alfalah are as follows:

To please their customers by fulfilling the financial needs as best as possible, they believe in placing the client at the center of business and all of the products and services. For this the management has adopted the strategy of

Caring for you Our Customers

To get maximum share of the market

To price the products optimally

To expand more the network of branches in several other cities of Pakistan as well as in the other countries of the world.

To reinforce a corporate culture that fosters learning, creativity and flexibility.

To invest further in banking innovations which include Islamic banking, SME, Home Loans and other areas of product development to provide higher levels of services and value to the clients.

Message From, H. E. Sheikh Hamdan Bin Mabarak Al-NahayanChairman & Board of Director Dear Colleagues

Bank Alfalah was launched on 25th February 1997 and with that we launched for ourselves, the challenge to transform this bank into a highly professional, and most efficient and service oriented institution. The-state-of the-art technology we plan to put in place will be complemented and supported by the personal touch which we are committed to add all spheres of our customer related services. Therefore necessity of improving the quality of our human resource will remain on top of our priorities for all times to come. We hope, you all will make the best use of this web site, which will provide a medium for you to express your views on, different banking related subjects. My greetings and best wishes to you all.

H. E. Sheikh Hamdan Bin Mabarak Al-Nahayan

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

The Board of Directors:

The upper most part of the management is the Board of Directors or the Executives. The Board of Directors are responsible for the first phase of the management process, i-e, planning. So, all the decisions and the strategies are being proposed and implemented under the instructions and the supervision of the board of directors or the executives. Also the policies and the overall objectives of the Bank are being proposed at this level of the organization.

The Top Management:

The top management involves the branch managers and the chief managers of the bank including the operations managers as well. The major responsibilities include the strategy formulating for the bank and supervising the whole staff at the branch. They define and interpret the objectives and vision and then formulate policies for their completion.

The middle management, supervisors and the employees:

Departmental heads constitute this level of management at Bank Alfalah. They are directly responsible for planning and controlling the activities of officers. Finally, the employees whose activities are monitored and controlled according to the desired objectives.

THE OVERALL MANAGEMENT

BOARD OF DIRECTORS

H. E. Sheikh Hamdan Bin Mabarak Al-Nahayan

- ChairmanMr. Mohammad Saleem Akhtar

- Chief Executive OfficerMr. Abdullah Khalil Al-Mutawa

- DirectorMr. Omar Z. Al-Askari

- DirectorMr. Abdullah Naseer Hawaileel Al-Mansoori

- DirectorMr. Nadeem Iqbal Sheikh

- DirectorMr. Ikram Ul-Majeed Sehgal

- Director

THE CORE GROUP

Board Advisory Committee

Mr. Abdullah Khalil Al Mutawa

Mr. Khalid Mana Saeed Al Otaiba

Mr. Ganpat Singhvi

Mr. Bashir A. Tahir

Central Management Committee

Mr. Mohammad Saleem Akhtar

(Chairman)

Mr. Pervaiz A. Shahid

Mr. Sirrajuddin Aziz

Mr. Mohammad Yousaf

Mr. Ijaz Farooq

Mr. Bakhtiar Khawaja

Mr. Arfa Waheed Maklik

Mr. Adil Rasheed

Mr. Shakeel Sadiq

Mr. Adnan Anwar Khan

Mr. Shahid M. Murtaza

Mr. Nadeemul Haq

Corporate Information

Mr. Hamid Ashraf

- Company Secretary

Mr. Zahid Ali H. Jamal

- Chief Financial Officer

Taseer Hadi Khalid & Co. (Chartered Accountants)

- Auditors

B A Building,

- Head Office

I. I. Chundrigar Road,

P. O. Box 6773, Karachi.

www.bankalfalah.com

Branch Setup

FIELDS AND ACTIVITIESA support functions Group, mainly responsible for development of systems and procedures, process-re-engineering, automaton and credit management. The Group is organized in three divisions i.e. Systems and Operations Division, Human Resource Division and the Credit Division.

CREDIT DIVISION

Providing extensive support to branches for credit administration, control and monitoring, the Division has played a pivotal role in helping the Bank achieve a remarkable loan growth of with well-diversified risk exposure. Most of the loans are for short-term trade financing on a secure and self-liquidating basis. The Division has a special Assets Management team, which is responsible for ensuring low ratio of bad debts, effective monitoring of delinquent advances and close follow-up for recoveries. Banks Head Office Credit Committee (H.O.C.C) reviews the credit quality and pricing on regular basis not only to ensure healthy credit growth but also the management of Banks risk assets in a most prudent and profitable manner.

SYSTEMS and OPERATIONS DIVISION

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

Technological innovation:

Modern science is not an option, it is an obligationTechnology is rapidly changing the way we think, act and do business. Is has played pivotal role in enhancing customer expectation, particularly with respect to speed and quality of service.

Alfalah bank enjoys a strategic competitive advantage overall domestic players by virtue of its leadership in technological innovation. Phone banking service and Internet banking facility allows customer to enjoy routine banking services from anywhere in the world. 365 days a year, 24 hours a day.

CREDIT CARD DIVISION

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

HUMAN RESOURCE DIVISION

Strategically, perhaps the most important Division at the Head Office is responsible for human resource management, including recruitment, staff training and evaluation. This division is also handles matters relating top administration.

This Division operates on a future oriented strategy focusing on employees personal and professional growth.

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

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

Dedicated Professionals:

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

Staff is the most valuable asset of any organization. The human resource philosophy at Alfalah bank focus on multi-talent hiring, professional grooming, requisite training and meritocracy based reward system. Staff welfare has been a priority.

Employee productivity enhancement is organized through in-house and external training programs. Bank continues to offer opportunity for people to develop their knowledge, skills and personalities, thus ensuring greater self-fulfillment and progression in the organization.

In short bank Alfalah team comprise of dedicated professionals equipped with a diverse array of skills and vast experience. The management concentrates its energies on making informed economic decisions, translating it into greater returns for our investors and customer. The prudent attitude has created a synergistic organizational structure leading to improvements in profitability and a sustainable competitive advantage for the bank.Training & Development:Bank Alfalah is committed to the personal welfare and professional development of all our team members. Proper training of human resource is essential, not only for the more productive and satisfied work force but for also homogenous corporate culture.

The bank continuous to follow its strategy of hiring batches of young and energetic Management Trainees who are sent to our Training and Development Center for training in all areas of banking. Our Training and Development Center is a state of the art facility with an impressive faculty. Ethical values: Professionalism without integrity is like a book without pagesBecause the right may not always be obvious, we must be guided in our every action by set of well-defined values, governing our decision. Alfalah bank understands that its commitment to satisfy customer needs must be fulfilled within in a professional and ethical framework. FINANCE DIVISION

Finance Division is responsible for bookkeeping and accounts. This Division is the head office and manages all financial returns and the MIS through its Management Reporting Wing. The Division is actively involved in preparing market comparative analysis, consolidation of Banks budgets, monitoring and constant review of various financial indicators.

Financial Division works as the backbone for Banks operations. The Division, which reports directly to the President And Chief Executive of the Banks, has been instrumental in preparation of Banks business plans and future stratigies.the budgetary performances are constantly reviewed and trough a sophisticated Monthly Performance Report (MPR) which is a computer based program, the Division provides feedback to the senior management on strategic issues like reasons for budgetary variances and methods to arrest negative performance factors.

Preparing the Banks Annual Accounts and coordinating external audits is a direct function of the Finance Division. Through the dedicated efforts of staff at this division, the Bank has been winning various awards for the Best Presentation of its Annual Accounts and also the management has been able to monitor and review the Banks performance in procreative manner.

AUDIT DIVISION

The Audit Division reports directly to the Board through the Executive Committee-which are also the Audit Committee.

The Audit Division acts completely independent of the management and is responsible for checking and reporting on the Managements compliance with the Boards policies and directives, as also the Prudential Regulations and other directives of the SBP. However, their role is not intended to be just that of fault- finding; but also guiding and assisting branches in improving their operations.

POLICY FORMULATION AND PROCESS MEETINGS

At Bank Alfalah, policies as mentioned earlier, are been formulated at the Executive level of the organization. Policies for any organization constitute a major part in the overall long term functioning of the bank. In short we can say that policies and the objectives are the lifeblood of the organization in long run. Though policy formulation is in the prescribed hands yet the policies formulated by the top level have been very successful as indicated by the success pattern of the bank so far.

Then these policies are transformed into the hands of the top-level management. The top management is been suggested to make the policies implemented keeping in view the long-term objectives of the organization. Also the views from the middle managers and employees are encouraged as well for the purpose of removing flaws form the system. For these very purpose meetings arte held almost weekly at the branches level and also in case of any contingent dispute resolving the meeting scan be called at any time during the branch timings.

POLICIES OVERVIEW AT BANK

Since the inception of Bank Alfalah Limited in 1997, by the grace of almighty, the bank has moved rapidly in expanding its branch network and deposit base, along with making profitable advances and increasing its range of products and services. It has made a break-through in providing premier services at an affordable cost to our customers.

Managerial policies followed by the bank have a direct contribution in its success. The Board and Management of the Bank have implemented strategies and policies to carve a distinct position for the Bank in the market place. In a bid to satisfy Bank Alfalahs shareholders and valued clients, the management initiated the process of realization of the Bank's vision by consolidating its financial position and creating a large and diversified business base. Bank Alfalah has made notable progress in business volume, efficiency, and profitability following its increased involvement in trade finance, commercial lending, and foreign exchange and money market operation.

Major policies hat have been made and implemented at Bank Alfalah are: Consumer Banking Policy

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

Lending Policy

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

Selection of Clients

Management is very selective of clients. All of the references are carefully checked to learn about a potential client before establishing a relationship. References are excellent sources of new accounts as they give an opportunity to learn about a potential client before establishing a relationship. This policy helps in protecting the integrity of the bank. It ensures good relationship with the clients.

Services and Product Polices

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

i. Credit FacilityIn this service the loans are provided to the customers by the bank to meet revenue shortfalls.

ii. Stop Payment InstructionsIt is one of the most important services provided by the bank to its clients. In case the account holder has lost his/her cheque he can issue the stop payment instructions to the bank. The bank till further instructions will not honor the cheque.iii. Deposits

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

a. Alfalah Musharakah Saving Account

b. Current Account

c. Musharakah Time Deposits On PLS Basis

iv. Drafts, Telephonic Transfers, Pay OrdersThese are the facilities that the bank offers its customers and, at times, to the people who do not maintain an account with the bank, that is, ordinary people.

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

Bank Alfalahs focus is on Foreign Trade as its primary market of business. It maintains high emphasis on enlarging its Correspondent Banking network besides aiming to enhance the scope and level of cooperation with existing correspondents. The Trade finance department has efficiently done management of the changing trade policies by the central bank over there.

Marketing Policy

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

Promotion and Incentives

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

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

Hiring is mainly of two types i.e. direct hiring and promotion from lower levels. Banks policy is to hire suitable candidates. By suitable candidates bank refers to candidates having proper educational qualification, experience and background. It is the policy of the bank that President of the bank will be the representative of major stakeholders/owners. Board of Directors is representative of sponsors. Bank is reluctant in making direct appointment of senior executives. EVPs are promoted from lower levels. Every year Bank Alfalah opens its doors for about 30 fresh post-graduates to join the prestigious ranks of Management Trainee officers with the Bank. The MTO scheme is a highly competitive and sought after induction scheme, in which short-listed applicants appear in a written test followed by a panel interview. Successful candidates then receive comprehensive training in essential areas of branch banking at the Banks state-of-the-art training facility at Lahore and Karachi, prior to their posting at various branch locations. Preferred educational background for entry into the MTO scheme includes an MBA degree, MA Economics or M.Com from reputable Pakistani or foreign institutions with GPA of 3 plus, or equivalent. Strong personal character, as well as communication and interpersonal skills are essential pre-requisites to succeed as an MTO.Training and Development Policy

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

Quality assurance services

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

Growth Policy

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

Liquidity Policy

Bank Alfalah maintains positive and healthy liquidity. Banks policy is to keep surplus liquidity in fixed income securities issued by the Federal Government of Pakistan. If necessary it can be easily converted into cash.

Investments Policies

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

Job Satisfaction

Job satisfaction is the major important factor to be considered while evaluating any organization. To evaluate an organizations strength and repute in the industry, job satisfaction is the key factor as well like that of growth and development in the monetary terms.

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

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

Management at Bank Alfalah Ltd. is very much keen towards maintaining the decorum of the cooperative culture within the organization and also with the clients of the bank. The way managers treat the employees and an operative is outstanding at bank Alfalah. This is the reason why each and every employee is pretty much satisfied with the job.MANAGEMENT STYLESManagement must have to adopt some administrative style to get all the activities to be done effectively and efficiently. As far as the management styles at Alfalah Bank are concerned, there is both centralization and decentralization to some extent. Management must adopt some administrative style to get all the activities done effectively and efficiently. As far as the management style at Bank Alfalah Limited Township Branch is concerned, there is centralization to a certain extent and decentralization in some other areas.

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

Managerial level

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

Department Head level

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

Staff level

At the staff level, as employees are satisfied to the work assigned and authority structure, so management at this level is concerned to the decisions of the department heads level.

IMPACT OF MANAGEMENT STYLE ON EMPLOYEES

Management styles have a great impact on the overall working of an organization. The key issues, which can arise due to strong authoritative actions by the management, can be of the following nature:

Absenteeism

Irresponsible behavior

Coordination

Reporting time delays

Turnover

But at Bank Alfalah Ltd. these issues have never been provoked till now. This is due to the fact that employees have been given equal importance as been given to high level operatives. The following important aspects need consideration.

Motivation

The term motive implies action to satisfy a need. Motivation can be defined as a willingness to expend energy to achieve a goal or a reward. The management styles adopted by the bank affect greatly, and employees are motivated in order to enhance their performance and achieve the derived goals.

Morale and Productivity

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

Job efficiency and satisfaction

Consequently the overall impact of the well-equipped management styled organization is the job efficiency and job satisfaction. At Bank Alfalah the employees are very much satisfied with the job and the overall working conditions of the bank, so in due response, the bank is enjoying high efficiency in managing the time delays in reporting and working operations.THE STRATEGICAL HIERARCHYThe Strategic management model provides a conceptual basis for applying strategic management. Alternate strategies that an enterprise could pursue can be categorized into 4 actions:

Integration Strategies

Intensive Strategies

Diversification Strategies

Defensive Strategies

Integration Strategies:

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

Intensive Strategies:

Market penetration, market development, and product development are sometimes referred to as intensive strategies because they require intensive efforts to improve a firms competitive position with existing products.

Diversification Strategies:

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

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

WORK DONE BY MEI was been assigned by our department, Bank Alfalah Ltd, Garden Town Branch, Lahore as my internship organization. There I worked for about eight weeks. I worked in three departments. I started up with account opening (operations), where I worked for about three weeks and learned about different types of accounts, and how to open a new account, etc. I was working under the supervision of the Manager Operations, Mr. Raheel Yaqoob at my internship in that department.

After working in Operations, I was moved to Credits, where I learned that how finance is advanced to the clients and different types of facilities the bank is providing to its customers. There I worked for about two weeks with Mr. Ateeq-ur-Rehman Sidu officer of CAD Department Mr. Ahmed Moin Lodhi officer of car Finance Department and under supervision and training of the employees working as the finance officers as well.

Garden Town Branch has got a wide range of excellent services departments been supervised under the best ambiance and a very well educated staff. The following list is showing the main departments at Garden Town Branch Operations Department

Agri Finance Department Car Finance Department Accounts Department

IT Department

The Credit Administration DepartmentNow, I am going to discuss the six departments with which I was in touch during my internship program. That is, the Account Opening department, the Remittance department the car finance department, the Accounts department and the Credits department. THE ACCOUNT OPENING DEPARTMENT Borrowing funds from different sources has become an essential feature of todays business enterprises. But in the case of bank borrowing funds from outside parties is more vital because the borrowed capital of a bank is much greater their own capital. Banks borrowing is mostly in the form of deposits. These deposits are lent out to different parties such deposit creation is done through open an account in the bank.

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

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

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

Working with the Accounts opening department gave me a lot of courage as it taught me the way that you should deal with the customers of the bank. Now coming towards the documentations, stuff requirement at this department for the accounts opening process.Types of Account

Current Account.

Saving Account.

Notice Deposit.

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

There is no interest on these accounts. It is only for transaction purposes. They paid on demand. Where a banker accepts, paying all checks drawn against him to extend of the balance in the accounts. As there is no profit paid on this account, it is also called checking account because cheque can be drawn on it. Current account is mostly opened for business. The minimum balance requirement for opening the current account is Rs. 10,000.

BASIC BANKING ACCOUNT: Initial deposit for account opening is Rs. 1,000 with no minimum balance requirement.

Non interest bearing checking account.

Maximum 2 deposits & 2 withdrawals through cheque are allowed.

Free debit card can be used to withdraw cash and make purchases at thousands of outlets across Pakistan which provides access to funds 24 hours a day.

No restriction on ATM withdrawal.

The PLS Savings Account:

The purpose of this account is to introduce the habit of saving individuals in the neighborhood. The profit on saving accounts is paid on the basis of profit and loss sharing at 2 % per month. The minimum balance requirement for opening the account is Rs.5000.The PLS savings Account is meant for those people who have got an aptitude towards earning some profit on their amount deposited for sometime with the bank. Individuals who wish to earn profit/interest on their investment normally maintain the profit and loss sharing account but in order to earn interest the client is required to keep his/her deposits with the bank for some time. For this purpose, there are some restrictions on withdrawal of money from a Profit and Loss sharing account but in general banking practice there is no restriction on any with drawl from a Profit and Loss sharing account. The interest/profit is paid half yearly.

Notice Deposits

Notice Deposits are kind of fixed deposits. The minimum balance requirement for opening the account is Rs. 5000 and payment is drawn on maturity of the specific period. Notice deposit is of two types. One for which a prior notice of 30 days and is required from the customer before withdrawing deposited amount and for which rate return is 4.00%.

Second for which a prior notice of 30 days and above is required from the customer before withdrawing deposited amount and for which the rate of return is 4.50 %.

Term Deposit

A term deposit is a deposit that is made of a certain period of time. At the end of specific period the customer is allowed to with draw the principal amount. The rate of return of this account varies from 3.25 % to 6.50 %. The term deposit account varies from one month to 3 years and the minimum balance requirement is Rs. 50,000.

Profit Calculation Methods

Daily Product Basis

Deposited Amount Rate of return365 (No. of days in a year)

AVERAGE MONTH Balance

Sum of daily end Balance Rate of return No. of days in month

Minimum Month Balance

Any minimum balance during the month is taken for calculating profit

Saving A/C (05 days _ Minimum Monthly Balance).

Minimum Balance of first 5 days is compared to the minimum balance of the minimum balance of remaining 25 days. Less balance is calculated for profit.

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

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

By sending bank draft to depositors home address or officers or whichever is specified as mailing address.

The depositors account is credited at maturity.

Amount of Deposits & Other Accounts in 2008Fixed Deposits. Rs.88.851 billionSaving Deposits... Rs78.893 billionCurrent Accounts. Rs58.234 billion

OthersRs. 3.616 billion

Financial institutionsRemunerative Deposits. Rs. 9.892 billionNon-Remunerative Deposits..Rs. 0.021 billionParticulars of Deposits & Other Accounts

In Local Currency Rs. 214.824 billionIn Foreign Currencies. Rs. 24.685 billion

Total Deposits Rs. 239.509 billionThe main document in this department is, of course, the Account Opening Form.

Particulars at the Account Opening Form:

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

Pakistani rupee.

U.S. dollar

Pound sterling

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

Savings account

Current account.

Royal profit

For the chequing account, there are different types of account holders are required for all these types of account holders. The operation/procedure requirement that is needed for Individual Account differs greatly from the Joint Accounts proprietorship A/C, Partnership A/C, Private Limited Company A/C and Public Limited Company A/C.

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

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

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

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

Provision of either Fathers or the Husbands name is also a pre-requisite. Occupation of the prospective account holder.

The name and complete address of the employer.

Nationality of the Account opener

Country of residence is to be specified.

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

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

Passport number, if the prospective client has got one.

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

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

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

Type of organization

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

Public Limited Company Private Limited Company Partnership Association/Club/Society Sole-Proprietorship Some special documentation is also required like the certifications regarding the incorporation and commencement of business and the Form 29. The business concerns also have to give their full name, brief description of the business, date of incorporation, and place of incorporation, national tax number, telephone number and fax number.

The choice of either the deduction or non-deduction of zakat also needs to be highlighted. Zakat is deducted out of a Musharakah savings account and not in the case f the current accounts...

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

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

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

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

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

INDIVIDUAL ACCOUNT

Any individual or proprietor of business can open an individual account at BAL.

PLS (profit and loss sharing) saving accounts can be opened with the minimum balance Rs. 5000/- with expected profit rate is 2% on Rs. 25,000 or above. Following requirements has to be fulfilled for this account.

Signature of customer on back of AOF.

Mention next of kin (nominee)

Name and A/C # of introducer.

Verified sign of introducer.

Customer signature admitted by officer.

N.I.C photocopy attached.

Letter of thanks.

JOINT ACCOUNT

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

Joint A/C cannot be opened by single person. Both persons have to sign on cheque. When two or more person neither partner nor trustee open account in their name is joint account.

Requirements

Sign of both customers on back of AOF

Sign on joint A/C # mandate

Name and A/C # of introducer

NIC copies of both members.

Mode of operation.

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

Limited Company:

Copy of certificate of incorporation Memorandum and Articles of Association

List of Directors

Copy of the board resolution

Certificate of Commencement of Business

Copies of CNICs of Directors

Latest copy of Form-29

Partnership:

Partnership deed certified copy

NIC photocopies of all partners.

Partnership mandate for account signed by all the partners

A letter duly signed by all the partners containing the operating instructions of the account also has to be taken.

Club/Society/Association:

Copy of rules/ by-laws

Copy of registration (if applicable)

List of Executive member management committee/management board etc

Certified copy of Resolution

NIC of all members of the management body

Sole Proprietorship / Individual:

NIC/ Passport photocopy

Letter from Proprietor confirming sole proprietorshipTerm and Conditions Governing the Account

Account

(I) Each Account will be allotted a distinctive number, which should be quoted in all correspondence with the bank relating to the account.

(II) The account should be subject to the applicable laws of Pakistan and prevailing rules, regulations and directives of the State Bank of Pakistan.

Minimum Balance

Subject to the regulations of State Bank of Pakistan, the customer should maintain a minimum credit balance in the account as may be prescribed by Bank from time to time. The bank reserves the right to close the account after giving 14 days notice if the customer fails to maintain the required minimum balance in the account.Deposits (I) All deposits in the account should be accompanied by pay in slip showing the correct title & account number to be credited.

(II) If the amount indicated on the deposit slip differs from that later cash account the banks count shall be final and conclusive.

(III) Proceeds of a cheque deposited in the account for collection will be value dated after receipt of the proceeds thereof.

(IV) In receiving cheque/instruments the bank acts only a collective agent of the customer & assumes no responsibility for the realization of such cheques/instruments.

The bank may refuse to accept such cheques/instruments drawn in favor of third party. The customer shall not draw against unclear cheques/instruments though credited.

(V) The bank shall recover return cheque charges at the rate fixed by the bank by dividing the account on every cheque deposited for collection and return unpaid.

(VI) The bank is realizes the services of other bank, customer do so for account and the sole risk of the customer. The bank assumes no liability should the instruction is transmits is not carried by such banks.

(VII) The bank shall not be responsible for the delay or loss in transit of any cheque not for any act, omission, neglect, default, and failure of any correspondent bank, agent or sub agent or for any reason beyond the control of the bank.

Withdrawals

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

(II) The customer shall exercise care when drawing cheques and agree that cheques will not be drawn in a manner which may enable a cheque to be altered in a manner which is not readily detectable.

(III) The customer shall ensure safe keeping of the cheque book and shall not allow access to the cheque book to any unauthorized person. In case of loss or theft of the chequebook or any cheque leaf, the customer will inform the bank, if he will not then he will be himself responsible for any loss.

Minors Account

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

Statement of Account

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

Hold Mail Facility

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

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

Death of a Customer

In case of death of individual customer, the bank will permit no withdrawal from that account after receiving notice of customers death, except on production of a succession certificate or other court order from a court of competent jurisdiction.Now, there are some documents that are always there with the account opening forms. These things need to be filled in by the customers efficiently and carefully. These are: Signature Specimen Card.

Cheque Book Requisition.

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

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

Procedure of Opening an Account The Account Opening Form:

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

Completion of The Form:

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

Introduction:

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

Specimen Signature Card (S. S. Card):

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

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

The account numbers of various accounts start with the following series

Account titleAccount number

Current account01

Saving account02

Royal profit account029

Term deposit account03

Car finance account0191

Agri finance account0141

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

Bank Alfalah issues the following chequebooks.

Saving account - 25 leaves

Current account - 50 leaves

Current account - 25 leaves

Foreign currency $ - 10 leaves

Foreign currency - 10 leaves

Loose cheques are also issued in some cases.

Entry Of cheque book:

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

Stamping every leaf with specific A/C number.

Enters it in the chequebook issue register.

Check whether or not a senior officer has verified the signatures, if no then first he gets them verified. If the check book is of photo account then be sure that each and every leaf of cheque book should carry photo account stampAfter entry in the manual register, the employee issues the chequebook to the A/C holder after his/her signature on the register.

Filling Of Account Opening Forms:

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

Maintaining the Computer Record:

After opening of account, all information regarding the account is entered into the computer. Currently, a program named Bank Smart is being used for this purpose. Record of all the transactions regarding the account of a customer is kept updated in the computer.Procedure Followed In Order To Close An Account:

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

The client who wishes to close an account first has to give an application, duly signed on the pre-printed application of the bank. The client has to attach this application with the liability form (explained below). The client can also give an application on a plain paper, but correct signatures are very necessary.

Then it has to be made sure that if the account to be closed is a saving or Royal Profit then the account balance before closing should be zero. In case of these two types of accounts the bank does not take any closing charges. If a client wishes to close a current account then the bank charges Rs.150, so at the time of closing the balance should be Rs.150.

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

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

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

After approval of the liability form, it is sent to the Cash Department so that the officer who scanned it in the first place could return the specimen signature card to the account-opening department.

Once the S. S. Card is received back from the concerned official then the liability form, the clients application along with the specimen signature card is pasted in the ledger right along side the original account opening form. The form has to be pasted with the original account opening form even if the account was opened a decade ago. In the computer as well all the entries and records related to that particular account is permanently deleted by using the close account option. Important Documents Used In the Account Opening Department

Liability Form

This particular form is used when an account is to be closed. The staff of account opening department, after filling in the name and account number of the client forwards this form to the credit department and the trade finance department who upon receipt of such liability form make required scrutiny so as to check whether or not the customer owes some money to the bank or not.

Account Statement Request Form

This small form is used to request for the account statement for the desired period. The client gets this Performa from the account-opening department and then, after filling it up, gives it to the computer section that gives the statement to the client in printed form.

Vernacular Form

This form basically functions as a thank you letter (and also as a request) on behalf of the customer if he wants to operate his account by doing signatures in a language other than that of English. In this particular form the client gives his assurance in writing that he would indemnify the branch against any loss that may be caused by reason of his signing in a language other than that of English.

Issuance Requisition

This requisition is used by the staff to order for any thing (e.g. stationary) they need. They write the type and quantity of the stationary they need, get it signed by the Manager Operations, give it to the person in-charge of issuance of stationary who on receipt of this requisition (duly signed) issues the stationary.

Debit And Credit Vouchers

These two vouchers are basically used when an account has to be closed. The debit voucher shows as to how much amount has to be taken from the clients account and the credit voucher shows as to how much amount has to be credited as Banks income, in order to facilitate the account closing process.

Application To Close The Account

This is a pre printed application of the bank in which the client fills in the account number, the title of the account and the type of account and requests the branch manager to close his account with the Bank. Application To Change The Address

This is again a pre printed request form in which the client fills in his name, account number, telephone number/s and the new address so that he could communicate with the bank and receives all the notices, statements and other necessary document which the bank might send through mail depending upon the circumstances.

Discrepancies:

If there is fond any discrepancy in any of the following particulars then the form will not be entertained:

1. Date of account opening 13. Hold Mail

2. Account opening Approval14.Either or Survivor Instructions

3. Customer Name15. Next of Kin Information

4. Joint Name (in case of joint account)16. Proof of Guardianship in case of Minors Account

5. Mailing Address17. Thirty Party Mandate

6. Alternate Mailing Address18. Specimen Signature Card

7. Telephone Number19. Check Book Ordered

8. Nationality20. Introducers Name and Account number

9. NIC / Passport21. Introducers Signature Verification

10. Currency of Account22. Segment Code mentioned

11. Related Account Information23. Signature on Banks Terms and Conditions

12.Zakat Deduction Authorization24.Account Type

My experiences during internship in Accounts Opening Department:

During my internship at Bank Alfalah Ltd, Garden Town Branch, my experience was very good while working in the said department that is the Accounts Opening Department. This was the first ever experience of my life regarding working in any professional environment with practical people working around.

Mr. Naveed Khalid (Incharge of Account Opening) was very much keen in telling me all the details of all the workings of that accounts opening department. I was being supervised by sir Naveed at that critical time who was a very ebullient person and make me lighten up to a greater extant. Being a former PU student, university fellow and admirer of Hailey College of Commerce, he went very supportive to me. He was also very hardworking and supportive type of a colleague to me. He taught me each and every thing that can happen in the accounts opening department also direct me about the procedures of other banks dealings. Whenever he was busy in doing a work regarding the accounts opening things he never forgot to tell me what he is doing and what is the purpose of doing that thing.

During my stay at the accounts opening department, I got a chance to open some accounts after the approval and due verification from my supervisor Mr. Naveed Khalid. He told all the stamps, which have to be incorporated in the account opening form, to me. I did mistakes as well while opening of accounts regarding stamping at the correct place and writing account titles. But he never ever said a word to me regarding that. This is the thing, which I observed that employees at Bank Alfalah are very cooperative and supportive. This is the reason why the customer satisfactions provoking all along in the branches of the bank.Remittance DepartmentRemittance department comes under the category of the Domestic Banking. By remittance we mean transfer of money from one city to another. Hence this department deals with the transfer of money using different mode from one place to another.

PARTIES TO A REMITTANCE REMITTER

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

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

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

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

The principal duties this department is performing are as follows

1. Pay Slips

2. Pay orders

3. Demand Drafts (DD)

4. Rupee Travelers Cheque (RTC)

5. Money Gram

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

1) Original copy which is given to account holder.

2) DD advice is sent to the central branch.

3) Third copy is for reconciliation.

4) Last copy is sent to head office for reconciliation.

PURPOSE: -

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

PAYMENT

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

RECORD

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

DD APPLICATION SLIP

On the DD application slip enter the

Date

Branch name draft no. (which is entered after the computer entry)

In favor of (the name of the person or party)

Drawn on (the city name and the branch code of BAL )

Amount in words as well as in figures

Commission charged is entered

Signatures of the applicant are taken

Then it is signed by the in charge remittance and the customer deposits the money against this slip.

The DD slip is available with the attached forms.

Scrutiny Of application Form:

There should be our banks branch at the place where payment is desired to be made.

Full name of the payee should be mentioned.

Amount in words and figure should not differ.

Purchasers name address and telephone numbers are complete.COMPUTER ENTRY

In the system enter into the DD section then enter the

Name of the person who is being favored

Branch code at which draft will be drawn

Bank code of that branch

Name of the person to whom the draft is being issued

The account no of the issues (if he/she has an account with our branch)

The total amount of the demand draft is entered

The commission charged is entered (computer usually perform this job automatically)

Entry of DD:Entry in BAL GTN branch

Yellow slipDD Payable

credit

H.off

debit---------------------------------------------------------------------------------------------------

Entry in H.off Karachi branch

H.off

debit

DD

credit---------------------------------------------------------------------------------------------------

Issuance Pink Slip

H.off

credit

DD

debit-------------------------------------------------------------------------------------------------------

Entry when customer will draw amount from DD

DD payable

debit

Customer credit------------------------------------------------------------------------------------------------------------

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

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

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

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

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

Date on which the pay order is issued.

Pay order number.

Payee, to whom the pay order is being issued.

Amount of pay order is entered then the officer signs it.

Date of the payment and the remarks are taken.

Entry of issuance pay order

Customer

debit

Pay order

credit

------------------------------------------------------------------------------

Entry when customer get amount from pay order

Pay order

debit

Customer

credit

---------------------------------------------------------------------------------

Following are the parties to a pay order:

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

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

iii)Payee:is a person named therein.PAY SLIPSThe bank for the settlement of its own payment uses this instrument.