ACKNOWLEDGMENT

In The Name of Allah, the Most Beneficent, the Most Merciful

With all our hearts, we are very obliged to the Almighty Allah, by the

Grace of Whom we have able to present this informative and useful report.

First, we would like to thank our respected teacher M. Usman Haider, for

his encouragement, motivation and guidance for completing this report. We

sincerely acknowledge his kind efforts, without which this report could not

have been compiled. His expert comments and advices deserve special

credit and recognition, which would also be a source of inspiration for us in

future.

We also thank to all our friends and classmates who helped us throughout this report and

for their valuable suggestions

Bank Alfalah

History of Bank Alfalah

Story of Bank Alfalah starts from Bank of Credit and Commercial International “BCCI”.

BCCI was incorporated in Luxembourg on 21st September 1972 with the paid up capital

of US $ 2.5 million. By early 1973 BCCI has established its first four branches in three

countries.

Luxembourg

UAE

UK

With the passage of time the branch network of the bank expanded rapidly bin different

regions of the world i.e. Far East, Middle East, Africa, Europe and Western and Latin

America.

Its founders were an influential and professional team possessing an intimate knowledge

of East Asian and Middle East countries, particularly those with oil resources and

expertise for sophisticated of three most important elements in the early formation of

organization, e.g.

Investors from the oil producing countries of Middle East

A business connection in expanding markets

A well developed and fully equipped management structure

Branches of BCCI in Pakistan

There were three branches of BCCI in Pakistan. These were

Karachi

Lahore

Rawalpindi

The Lahore branch was opened on 15th December 1978. This branch was opened at that

time when some other international banks like Citi Bank, Bank of America and American

Express etc. were already working. But within a few years this branch crossed mostly all

other banks in case of deposits, advances, imports and exports dealing, guarantees,

traveler’s cheques, sales etc.

Liquidation of BCCI (Bank of Credit

Commercial International)

This bank was going successfully but an international conspiracy compelled its

management to stop its operations. BCCI was liquidated on July 5, 1991. At that time

bank was operating in almost 69 countries of the world. Branches of BCCI in Pakistan at

that time were taken over by Ministry of Finance and SBP.

Habib Credit and Exchange Bank

Banks started its operations with HBL with the name of Habib Credit and Exchange Bank

“HCEB” after valuation of its assets for 15 million Dollars.

Habib Credit and Exchange Bank Limited were incorporated on June 21st, 1992 as a

public limited company under the Companies Ordinance, 1984 and it’s commenced

banking operations from November 1, 1992.

HCEB was privatized on July 7, 1997. Management was taken over by Abu Dubai based

consortium. The bank was sold for Rs. 1.7 billion and government sold its 70 % share.

Bank Alfalah

Following the privatization in July 1997, Bank Alfalah Limited emerged as the new

identity of Habib Credit & Exchange Bank with a revived purpose and commitment on

February 25, 1998.

Charged with the strength of Abu Dhabi consortium and under the leadership of His

Highness Sheikh Mubarak Al-Nahayan, the bank has already made significant

contribution in building and strengthening both the corporate and retail banking in

Pakistan.

Present Status:

Despite adverse economic conditions of country, the year 2009 was a milestone for the

bank, both in terms of growth and profitability. The bank’s pretax profit for the year grew

to Pak Rupees 40.01 billion, an increase, with a balance sheet footing of Pak Rupees 46.6

billion compared to previous year’s figure of Pak Rupees 21.02 billion.

After doing successful business in year 2007 to 2008, Bank Alfalah is now looking

forward positively towards the future and its management is confident to build on the

gains realized during 2008. Currently bank is emphasizing on expanding its operations to

meet client’s needs and for this purpose management has plans to add more branches to

existing network in the coming years. Bank has already started its working to go

internationally and its future target markets include UAE, Bahrain, Bangladesh and Sri

Lanka.

Technological developments are opening up new vistas of solutions for distributing

traditional financial products. Concurrently, rapid change in customer preferences has

resulted in a major shift from manual to automated services. Information Technology

today, is all pervading in the corporate world. Bank Alfalah made heavy investments

towards enhancing its capabilities in the area of automation and information technology.

Information Technology department of bank has successfully developed an advanced

computer program named BANK SMART. Their current investments of this year

75,973,238 millions.

Another success of bank is in the area of foreign trade. Bank has developed excellent

business and correspondent relations with renowned banks of the world whose support in

terms of lines of credit has enabled it to handle ever-growing trade volumes.

From above stated facts it is very clear that bank has made remarkable achievements

within a short period of time despite being in the nascent stage. With its key indicators of

progress already soaring to new heights, the bank is committed to put all its energies,

resources and time to bring higher value and satisfaction of its customers, employees and

shareholders.

Mission & Objective

.

Bank Alfalah provides stability and growth of a financial institution along with the care

and attention the customers receive from a neighborhood bank.

They ensure consistent quality service with the continuous innovation of their teams.

They are committed to put all their energies, resources and time to bring higher value and

satisfaction to their customers, employees and shareholders.

The introduction and development of innovative financial instruments will be another

major objective of Bank Alfalah Limited.

Branch Network

Bank Alfalah’s objective has been to expand its branch network to meet clients’ needs.

They have embarked upon a rapid expansion program to make sure that their services

reach more and more people. The bank is well positioned and geographically poised, to

cater for increased business demands. During the year they have opened many new

branches, which spread all over Pakistan covering major business centers and principal

cities. They plan to add more branches to their growing network in the ensuing years.

They are headed towards an ideal network reaching all major urban centers and will soon

go international.

Their head office is in Karachi, but presently they are having many braches working in

other big cities of the country.

In total there are about 52 branches of Bank Alfalah countrywide.

Management

 

Mr. Sirajuddin AzizChief  Executive Officer

Mr. Parvez A. ShahidCo-Chairman Central Management Committee

Mr. Shakil SadiqChief Operating Officer

Mr. Arfa waheed

Group HeadCorporate & Investment Banking

Mr. Ijaz FarooqGroup HeadIslamic Banking

Mr. Adil RashidGroup HeadConsumer Finance

 

Mr. Nadeem Ul HaqGroup HeadOperations

Mr. Mohammad YousufGroup HeadCredit & Collections

 

Mr. Bakhtiar KhawajaGroup HeadTraining & Development

Mr. A. Wahid DadaGroup HeadCommercial Banking

 

Mr. Hamid AshrafGeneral ManagerLegal Affairs & Company Secretary

Mr. Zahid Ali H. JamallChief Financial Officer

 

Mr. Mohammad Iqbal SaifeeGroup HeadAudit & Inspection

Mr. Talib RizviGroup HeadPriority Banking & Wealth Management

 

Mr. Tariq MirGeneral ManagerInternational Business

 

Mr. Ather ShehabExecutive InchargeEstablishment & Administration

 

Mr. Mahmood AshrafGeneral ManagerCredit Monitoring

 

Mr. Falak SherChief Compliance Officer

Mr. Imtiaz Ahmad SheikhGeneral ManagerInformation Technology

 

Mr. M. Mudassar AqilGeneral ManagerHuman Resource & Quality Assurance

 

Mr. Haroon KhalidGeneral ManagerRisk Management

Bank’s original structure

ALFALAH BANK

MARKETINGLoans Commercial Industrial Financial Personal Mortgage

FINANCEInvestments SecuritiesReal estate

OPERATIONS Teller schedulingCheck clearingCash collectionTransaction processingFacilities (design,layout)Vault operationsMaintenance Security

Products & Services

The bank’s primary objective is to provide a wide range of financial products and

services to individuals and various other entities in the country.

They are continuously formulating new products and services for the growing and

diversified needs of their ever-expanding client base.

Trust department

Accounting

Auditing

Bank Alfalah has launched Credit Cards, ATM Cards, and plans to further expand its

online facilities.

Following are the major products of Bank Alfalah Limited, which are prime examples of

quality innovation, providing timely banking opportunities to their customers:

Deposits

i. Saving Deposits

ii. Notice Deposits

iii. Royal Profit

iv. Royal Patriot

v. Royal Group

vi. Term Deposit

Advances

i. Funded

ii. Non-Funded

Alfalah Car Financing

RTC/TT/DD/FDD/FTT

Credit Cards

ATM

Home Financing

Agri Loan

Karobar Financing

Operational flow chart for account opening (regular process)

Working and processing of old account opening process

The whole regular process takes time of 2weeks because of so many steps involved in it.

If someone wanted to open his/her account, first of all customer had to fill lot of forms

and give information sometimes irrelevant with this. Most of the customers specially in

Account opening form

Introduction

SS Card

Requisition Form

Assigning acc Number

Deposit a mount

Letter of Thanks

Customer verify to Bank

Requisition Form for cheque book

Requisition Form sent to NIFT

Issue cheque book to the customer

Operations of Account Opening

Letter sent to the customer

our country which are illiterate cant get all of the steps and get confused and make

mistakes. the main reason behind all this was old legacy processing systems with slow

information handling with allot of data redundancy chances in it.

But if they involve some new system developments in it by some automation of

business process or reengineering of all the steps then the whole process will take less

than a week by merging some processes or redesign them. It will give some competitive

advantage to that organization due to their new system development and give their

customers more quality service in short time span.

Bank information management system (enterprise wide management system)

DATABASE

Assigning account number & letter of thanks

Account opening formIntroduction form info included in it

SS card also included

Account Requisition Form

Assigning acc Number

Deposit amount

Letter of ThanksSend it by email or

any other fast means

Customer verify the credibility to the bank

Bank immediately sends the information to NIFT

Bank issue cheque book to the customers

Account opening form

SS card also included

Introduction form info included in it

Alfalah bank must introduce a database to cut off its initial account opening steps and to make their process effective. Use of database will reduce the time consume for account opening(both of customer and bank). It will also reduce the cost of bank i.e is the cost of employees engaged in initial steps of account opening.

Funds ManagementEvery bank in Pakistan has an account with State bank of Pakistan and has to

maintain 5% of the total deposit in the account with the State bank. Funds

management is done only through the main branch. If the bank has so many branches

in a single city then only the main branch is responsible for the funds management.

Daily a report was prepared and reported to State bank.

The important factors that affect the report are as follows:

Total Deposit (of all branches in a single city)

Opening Balance (closing balance of the previous day)

Inward Clearing

Outward clearing

Cheques issued by State Bank

Cheques Deposited

After all the calculations, a result is obtained which signifies the cash in hand of the respective day. If the cash in hand is sufficient to fulfill the needs of the State Bank, well and good other wise if the cash is not sufficient then the other options are considered.

BANK DATABASE

NIFTDATABASE

In case of shortage of funds, the main branch has the following options, which it can

adopt.

1. TT from Head Office:

2. Cover from Head Office

3. Funds from Other banks

1.TT from Head Office:

One solution of the problem is to contact and inform head office about our respective

position and demand for funds. However the most frequent reason, why this practice

is not followed is that State bank has allowed only one TT free of cost for all the

branches in Pakistan.

Therefore we first have to confirm head office that whether or not it is sending TT to

another branch of bank Alfalah. If the head office sends us the TT then it cannot send

any other TT to another branch of Bank Alfalah without charges. The charges are also

not negligible for example the charges of TT for an amount of one hundred million is

above 60,000. For this specific reason the TT is not encouraged.

2.Cover from Head Office:

The most frequent option used is to inform Head office about the shortage and ask for

cover. The head office then maintains extra amount in its account with State bank.

The extra amount will be the shortage of main branch reported. The main branch will

then pay interest to the head office on a rate of 11.5% per day. The head office is paid

on monthly basis.

3.Funds from Other banks:

In case of funds shortage another bank is contacted with whom the bank has

settlement for instance Emirates bank. If this option is taken the head office is

informed and the head office then pays to the Karachi branch of the respective bank

from which funds are taken.

Regular loan process New proposed loan procedure

Account form

Credibility check on banks own behalf

Report to loan section of bank

Credibility check by loan department

CLP report

Capital managementRepayment schedule CIB report from SBPLoan sanction to customer

Credibility

CLP (credit line proposal)

Capital

Repayment

CIB report from SBPSanction loan to the customer

BANK’s management LOAN section