HISTORY

History 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,

UAE

UK

With the passage of time the branch network of the bank expanded rapidly in

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

There were three branches of BCCI in Pakistan. These were in,

Karachi

Lahore

Rawalpindi

Bank Alfalah Limited was incorporated on June 21st, 1997 as a public limited

company under the Companies Ordinance 1984. Its banking operations

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commenced from November 1st, 1997. The bank is engaged in commercial

banking and related services as defined in the Banking companies ordinance,

1962. The Bank is currently operating through 274 branches, with the registered

office at B.A.Building, I.I.Chundrigar, Karachi.

Since its inception, as the new identity of H.C.E.B after the privatization in 1997,

the management of the bank has implemented strategies and policies to carve a

distinct position for the bank in the market place.

Strengthened with the banking of the Abu Dhabi Group and driven by the

strategic goals set out by its board of management, the Bank has invested in

revolutionary technology to have an extensive range of products and services.

This facilitates our commitment to a culture of innovation and seeks out

synergies with clients and service providers to ensure uninterrupted services to

its customers. We perceive the requirements of our customers and match them

with quality products and service solutions. During the past five years, we have

emerged as one of the foremost financial institution in the region endeavoring to

meet the needs of tomorrow today.

Bank Alfalah has continued its upward climb in pursuit of excellence.

Strengthened by the banking of the Abu Dhabi Group and driven by strategic

goals set out by its Board and Management, Bank Alfalah increasingly inspires

trust and confidence of all its clients. With in a short span of time the bank has

carved a significant niches for it self in the banking industry. The team of the

bank comprise of dedicated professional equipped with a divers array of skills,

vast experience and pro-customers attitudes.

Bank Alfalah aspires to evolve as the premier banking institution in the country

the bank Alfalah adequately prepares the organization to cope with unexpected

challenges to deliver products and services more efficiently. Customer

satisfaction will always remain the number one benchmark as they forward

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towards attaining their goals .The be employ and retain an unparalleled work

force of highly motivated, energetic, well trained and productive employees. The

bank Alfalah offers an inspiring work environment, competitive salaries, excellent

benefits and caring leadership. Bank Alfalah promote strong and ethical business

practices in the industry of focusing more on the effective collaboration with their

stakeholders team members remain aware of the organization’s commitment to

them as well. They strive to achieve the superior financial performance to be

considered a leading bank in Pakistan by reputation and performance, and to be

a good corporate of the communities they serve. The bank cultivates a sense of

ownership amongst the employees, with the overall business plan and the

direction in which their organization is headed. Their corporate strategy focuses

on striking the optimum balance in organizational work flows and process .The

dynamic environment in which the bank operate implies to them to remain poised

for the unexpected as the competitive pressures mount. Consequently business

process reengineering and branch marking remain notable guidelines for strategy

development.

Board Of Directors

H.E. Sheikh Hamdan Bin Mubarak Al Nahayan Chairman

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Mr. Abdulla Nasser Hawalileel Al-Mansoori Director

Mr. Abdull Khalil Al Mutada Director

Mr.Khalid Mana Saeed Al Otaiba Director

Mr. Ikram Ul-Majeed Sehgal Director

Mr. Nadeem Iqbal Sheikh Director

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Mr. Sirajuddin Azi Director & CEO

Vision

To be the premier organization operating locally & internationality that provides

the complete range of financial services to all segments under one roof.

MissionTo 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.

Branch Network

Bank Alfalah has total 274 branches operating in Pakistan and overseas, some

Detail is as under:-

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Karachi

Main branch, B.A. Building, I.I. Chundrigar Road

Cloth market branch

Karachi Stock Exchange Branch

Clifton branch

Shah rah-e-Faisal Branch

P.E.C.H.S Branch

Timber Market Branch

Defense Housing Authority Branch

Gulshan-e-Iqbal Branch

Jodia Bazar branch

Korangi industrial area branch

M.A. Jinah Road Branch

North Napier Road Branch

S.I.T.E Branch

Paper market branch

North Karachi branch

Lahore

Gulberg branch

Defense branch

Circular road branch

Township branch

LDA Plaza branch

Badami bagh branch

Allama Iqbal Town Branch

Shah Alam Market Branch

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Rawalpindi

Mall road branch

Satellite town branch

Peshawar

Peshawar Branch

Peshawar City Branch

OTHER BRANCHES

Other branches are in:

Hyderabad

Sukhar

Rahim Yar Khan

Multan

Sialkot

Islamabad

Jehlum

Quetta

Mingora, Swat

Faisalabad

Gujranwala

Sargodha

Bahawalpur

Dera Ghazi Khan

Gujrat

Sahiwal

Mardan

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Overseas Branches

Chittagong, Bangladesh

Dhaka,Bangladesh

Bahrain

Kabul

Manama

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. Bank Alfalah has launched

Credit Cards, ATM Cards,

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. PLS Saving Account

ii. Royal Profit

iii. Basic Banking Account

iv. Alfalah Kifayat

v. Alfalah Mahana Amdan

vi. Alfalah Education

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vii. Current Account

Advances

i. Funded

ii. Non-Funded

Trade Finance

Lease Finance

Credit Cards

Home Loans

Auto/Vehicle Loans

Lockers

Debit Card

ATM

Agri Loan

Money Gram

Alfalah Online Banking

Alfalah ATM Facilities

DEPARTMENTSFunctioning of BAL is dived into following departments.

1) Operation Department

2) Foreign Exchange Department

3) Credit Department

4) Accounts Department

OPERATIONS DEPARTMENTS

Operation Department has following segments.

a) Cash

b) Clearing

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c) Remittance

d) Account opening

e) Accounts department

OPERATION DEPARTMENTS

Operations department of the Bank Alfalah Limited is responsible for the overall

operations of the bank.

a) Account opening

b) Cash department

c) Clearing

d) Remittances

e) Online Transactions

ACCOUNT OPENING DEPARTMENT

It is most important department of bank and its major source of income for bank.

Following procedure is adopted for this purpose.

Procedure of Account Opening

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

must have the introduction of bank’s staff or any already existing account holder

of bank. The customer is required to fill an account opening form. Then

signatures of the introduce are verified from S.S. Card before opening account.

AOF (Account Opening Form)

is very standard and up to the mark which contains almost whole information

about customers. Customer is guide to fill all columns of AOF. All formalities and

requirements are completed and verified, and all supportive documents are taken

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and checked according to the nature of account. If any formality is incomplete,

cheque book is not issued until it is fulfilled.

If a person cannot sign his / her hand thumb impression is affixed marked, which

is attested by one male or two female witnesses. Thumb impression for female

right hand and for male left hand.

They also have to give identity letter

1) NIC copies

2) Passport size photograph

One place on the form other is on SS Card they have non-bearer cheques. On

their cheque book a stamp is affixed on it there is written. Thumb impression

should be fixed in front of an officer of the bank.

The bank does not make payment of a cheque bearing a six months or older

date. If an account is not operated in six months. It is called dormant account.

TYPES OF ACCOUNTS

The bank different types of accounts exist.

1) INDIVIDUAL ACCOUNT

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

PLS (profit and loss sharing) saving accounts can be opened with the minimum

balance Rs. 1000/-. 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.

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Letter of thanks.

2) JOINT ACCOUNT

When more than one person open 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

cheques. 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 catrodiecer

NIC copies of both members.

Mode of operation.

3) BUSINESS ACCOUNTS

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

Three types of Accounts are here for Business Accounts:

a) Sole Proprietor Account

b) Partnership Account

c) Limited Company

I) SOLE OF PROPRIETOR ACCOUNT

This account is for those people who have his own business of the business he is

one owner of the firm.

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Requirements

Companies stamp

Declaration of proportion companies’ letter head.

Sign on AOF (Account Opening Form)

NIC copy

Verified signature of introducer.

Sole proprietorship declaration

II) PARTNERSHIP ACCOUNT

Account title will be the name of the partnership firm.

Requirements

Sign of customers on back of AOF.

NIC copies of partners

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

Partnership mandate (prescribed format)

Companies rubber stamp

The A/C is opened in the firm name and all partners designate one or two

persons to act behalf of the partnership firm all acts of the firm jointly and

severely.

III) LIMITED COMPANY

Limited co:

1) Private Limited

2) Public Limited

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PRIVATE LIMITED

Requirements

Restrain on companies letterhead dully attested by chairman.

Sing of all directors on back of AOF.

NIC copies of all directors.

List of directors on company’s letterhead.

List of memorandum and article of association.

Copy of board resolution.

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

kind of form is filled, it includes information that a new director has how

much number of shares with him.

Companies’ rubber stamp.

Copy of certificate of incorporation should be attested by Director, co

register an office stamp should be affix.

Code Of Accounts

Saving account 02

Current account 01

Royal profit 029

Royal group 05

FSB 028

FCP 018

EURO 0287

PUBLIC LIMITED

1) Certificate of commencement of business

2) Same as home documents.

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Club / Society / Association

These concerns are non-trading in nature. They have their own rules and

regulation and their affairs are mentioned by the committee called as a governing

body or managing committee.

1) Stamp of directors

2) NIC copies

3) Certified copy of resolution

4) Memorandum and article of association

5) List of heads on companies’ letter head.

6) Bank account opened in their name with BAL.

7) Name of person to be specified for the operation in account.

8) The manner in which the account shall be operated.

9) Letter of registration.

Trust

1) Certified Copy of Trust Deed

2) Certified copy Of Buy Laws

3) List Of Trustees

4) Board of resolution resolving to open an account with BAL along with

the signing instructions of the authorized signatures to operate the

account. This resolution must bear the trust stamp and at the same

time must be attested by the company secretary.

5) NICs of all the trustees

CHEQUE BOOK ISSUANCE

When the account is opened, then the customer is given a chequebook to sign

upon and enact money. It proceeded as under.

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PROCEDURE

All the account opening formalities must be completed before issuance of

chequebook. Particulars of the chequebook requisition should be completed

containing title of account, account number, type of currency, number of leaves

and signature to the customer. Signature of the customer is verified on the

requisition.

If customer is unable to collect his cheque book, then he can give authority to the

third person to collect his cheque book on his behalf by signing on the back of

the requisition, in such case, the particulars of the third person are required like

name of the person NIC number and signature of that person on requisition and

cheque book issuance register.

Chequebook is taken out from the safe / locker. It is assured that series of the

chequebook. Particulars are entered in the chequebook issuance register.

Account number is stamped on very leave of the chequebook and those leaves

are counted. Name of account holder is written on the cover of the chequebook.

And requisition on the chequebook for further issuance is properly filled, stamped

and signed by officer of the bank.

Chequebook is delivered to the customer and his signature on the chequebook

issuance register. Chequebook serial number entered. In the system (Bank

Smart)

Stock of chequebook are balanced at the end of each day and kept under safe

custody.

Earlier the banks were charging a fee for issuance of cheque book but now

whenever a new account is opened, the account holder issued a cheque book

free of charge.

Bank Alfalah issues the following chequebooks.

Saving account-25 leaves

Current account 50 leaves.

Current account – 25 leaves

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Foreign currency $ 10 leaves

Foreign currency 10 leaves

Loose cheques are also issued in some cases.

Closing of Account

When a customer wants to close an account he has to given a hand written

application to the head of the operations department to close his account plus

remaining leaves of cheque book.

The manager first verifies the sign of account holder, then closing is done from

the registers on the computer where the account was opened. In the file of the

account holder his account opening form is crossed. For this closing a fee of Rs.

150/- is charge in BAF.

CASH DEPARTMENT

Cash department of Bank Alfalah works under the operation department. this

department is given the complete responsibility of cash, as result of transaction in

touch local and foreign currencies. It is also responsible for the book keeping of

these transactions and the safe custody of cash.

This department performs the main function.

a) Cash receipts

b) Cash payments

CASH RECEIPTS

In cash department depositors use deposit slip for depositing the amount into

their accounts. The officer checks if the deposit slip is properly filled up

containing title of account. A/C number date and amount in words and figures.

Detail on both counter file and cash receipt voucher should be the same. Cash is

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received by cash receiving officer, twice counted and matched with the deposit

slip. The cash details are written on the back of the deposit slip and are also

entered in cash receiving register. Cash received stamp is affixed on the face of

the deposit slip along with the signature of the cash receiving officer.

Deposit slip and cash receiving register is given to the officer in the cash

department. The officer cash department both on cash receipt and cash receiving

register makes again proper scrutiny. Officer cash department signs both the

deposit slip and register. Deposit slip is credited and posted in the concerned

accounted in the system. Counter folio is given the deposition as receipt. One

consolidated cash debit voucher is posted in the system to balance the cash.

CASH PAYMENTS OF CHEQUE

cash payments process for payment of cheques local and foreign currency is

same. First the cheque is presented by the customer or holder to cash payment

officer. He confirms’ that it is drawn on the same branch and the particulars of

cheque are properly filled in. one signature of the holder is taken on the back of

the cheque. Cheque is handed over to the officer cash department for scrutiny

where officer checks the date, amount in words and amount in figures, payee’s

name, crossing if any, account number, cheque serial number, any material

alterations / endorsements and signature of the customer. Account is debited and

then cheque is cancelled by the officer. It is posted in the system and posting

stamp and number is affixed on it. Cheque is handed over to the cash payment

officer for payment. One more signature on that back of the cheque is taken from

the holder to match with the first one, and then cash is paid to the cash detail is

written on the back of the cheque. Cash paid stamp is affixed on the face of the

cheque. Entry is passed in the cash payment register.

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CLEARING DEPARTMENT

“Exchange of Cheques and balance of accounts”

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

bank and the ensuing financial settlement is called “clearing”. This facility is

provided by the state bank of Pakistan for offsetting of cross obligations between

the different banks. Clearing is of two types.

1) Inward clearing

2) Outward clearing

Inward Clearing

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

Cheques to be honored by bank.

Outward Clearing

The cheques of other banks that the account holder deposits in their accounts

are send for collection.

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Clearing process (Inward/Outward)

Here the local cheques are received that are drawn on BAF. All the cheques are

received on one counter along with the paying slips duly filled in properly

containing particulars of cheques and account holder. Counter folio of paying slip

is handed over to the customer by putting stamp for cheque received for

collection for Bank Alfalah on it duly signed by officer. These cheques are

scrutinized and cheques for local clearing are separated from OBCs. These are

then entered in clearing register and cheques for collecting are entered in OBC

register and handed over the bills department of collection. Clearing officer

checks and verifies title of all the cheques deposited by the customer to confirm

the good title of the cheques. Cheques are scrutinized properly and paying slips

are separated from cheques. Special crossing, endorsement and clearing stamps

are affixed on the cheques. Cheques of each bank are sorted and arranged

branch wise. All the cheques are then entered into the clearing system of bank.

Print out of the clearing is taken and details are attached.

With the cheques of each bank. Details of these banks are then entered into the

clearing schedule containing number of cheques presented and their total

amount against the name of each bank. Then total number of cheques presented

to all banks and their total amount is written on the foot of that schedule, which is

tallied with the clearing register.

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Next morning, these cheques are delivered to the respective banks in

clearinghouse of SBP between 9:00 to 9:30 AM. In the same manner, other

banks present their clearing drawn on Bank Alfalah. Total number of cheques

and their amount delivered to other banks are received from them are written on

the clearinghouse schedule and handed over to the officer clearing house SBP.

Cheques / DD received in clearing are given to the officer cash department of the

branch for their repayment. After I proper scrutiny of cheques, verification of

signatures and confirmation of balance in the account, officer cash department

pays these cheque by canceling and posting them in the system.

If any cheque is not passed due to insufficient balance or any other reason,

officer cash department returns the same cheque by attaching a cheque return

memo containing reason for return. This cheque is entered into the cheque

returned register and bank charges are deducted according to the schedule of

charges.

Second clearing is called at 2:30 PM to check the fate of the cheques presented

to other banks in the morning. If any cheque is to return, that is delivered to the

same bank in second clearing. In the same manner, if any cheque presented by

Bank Alfalah in first clearing is returned, they receive it and once again give

schedule of clearing figure to the officer-clearing house SBP containing number

of cheques and their amount delivered and received unpaid.

REMITTANCE DEPARTMENT

Remittance is transfer of funds from one city to another city or within the city. For

this purpose, most commonly used instruments are

1) Demand Draft

2) Pay Order

3) Telegraphic Transfer

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4) Online Transaction

1. Demand Draft:

A demand draft is an instrument in writing drawn by one branch of a bank on

another branch of the same bank for a certain sum of money; payable on

demand to the order of the payee mention therein the draft.

Issuance of Demand Draft:

The customer makes a request to the banker for a demand draft. The banker

gives him/her an application form to fill and ask him to deposit the amount for

which he needs draft. The client mentioned the name of payee in the favor of

which it is to be paid, the name of branch on which it is drawn and amount of

draft on the form and puts his signature on it. Afterwards, he deposits the amount

in cash with the bank. In case he is Account Holder of the same bank, he can

give cheques instead of cash upon which the banker transfers the amount from

his account. When all these formalities are fulfilled, banker issues him a demand

draft. Bank takes charges for demand draft that are different in different banks

according to their schedules of charges. In bank Alfalah, these charges vary with

amount and are as follows:

Internal Process:

After issuing demand draft, bank sends a credit advice to the bank on which it is

drawn. Drawee bank after receiving credit advice gives credit to DD payable

Account. When DD is presented on the cash counter, bank pays cash against it

after checking N.I.C of payee and debits DD payable account. If DD is crossed

amount is transferred into payees account. Posting is also made in the computer

terminals for the purpose of record of the bank.

Issuance of Duplicate DD:

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Bank can issue duplicate of demand draft on clients request after taking charges.

The charges are Rs 100.

Cancellation of DD:

In case, client wants to cancel the draft he has to make an application with his

signature. Banker checks the signature. Amount of draft is returned to client after

deducting cancellation charges. The cancellation charges are Rs 100.

2. Pay Order:

A pay order is an instrument in writing issued by bank for a certain sum of money

payable on demand to the order of the payee mention within the city, where as

pay slip is used for bank’s internal use.

Issuance of Pay Order:

The client makes a request to the banker for issuance of a pay order. The banker

gives him an application form to fill and ask him to deposit the amount for which

he requires the pay order. The client deposits the amount in cash with bank. If he

is account holder of the same bank, he can give cheque upon which amount is

transferred from his account. After the fulfillment of all these requirements banker

issue the pay order to the customer. Bank takes charges for issuance of pay

order which varies from bank to bank. Bank Alfalah takes the following flat

charges.

Internal procedure:

After issuing Pay order, banker gives credit Sundry creditors account. Posting is

made in the computer terminal. When Pay order is presented on cash counter

bank makes payment against it after checking N.I.C of payee and Sundry

creditors account is debited. If it is crossed, the amount is transferred into the

payees account.

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Cancellation and Duplicate issue:

The procedure for cancellation and duplicate issue of pay order is same as that

of demand draft and the charges are also same. The charges for both the

services are Rs.100.

3. Telegraphic Transfer:

Telegraphic Transfer is bank to bank, and branch to branch. The bank has

settlement with other banks according to which the banks can make the

payments to the customer’s account mentioned by the other bank in the

TELEX. In this case proper authentication is must for this purpose.

Process:

Customer obtain a requisition slip and fills it properly

After filling the application from the concerning officer fills the TT form.

This Telegram is send to he required bank.

After receiving the telegram bank immediately makes the payment to the

customer and the vouchers sent to the issuing bank by ordinary mail.

Bank debits the account of the customer or receives cash including

charges of the bank.

TT is made through codes. Bank sent telegrams with codes and in

banking language using the words test.

4. Online Transaction:

For branch-to-branch transfer of funds on the same day, previously TT was

used. But now banks have adopted a new system known as Online Transfer.

In online transactions cheques of different branches can be paid, fro instance

if a client has taken Online Transaction facility and presents Islamabad’s

cheque to Bank Alfalah Lahore, he/she can have payment from Lahore. If the

cheque has been cleared from Islamabad Bank Alfalah, a copy of cheque is

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made and is faxed to appropriate branch; the branch then checks the client’s

balance, date of cheque and signature of client. If the cheque is given

clearance from the respective branch then payment is made to client, the

branch is then debited and the branch that has made payment is credited.

Accounts Department

In any Bank the accounts department plays a major role. In Bank Alfalah the

burden of the accounts department is largely reduced because of

computerization. The use of the computer system increases the efficiency and

pace of the bank’s work.

Following activities are carried out in the accounts department:

Budgeting

Reports

Funds management

Activity checking

Reconciliation

Foreign exchange, old Account Contracts

Maintenance of fixed assets and calculation of their depreciation

Test Keys

Budgeting

The main task performed by the accounting department is the preparation of the

budget. Budget is based on forecasting and their own inspiration for future,

whereas forecasting is based on past performance. This is one important task on

the basis of which funds are allocated to various branches and also the targets

are determined. The targets determined Deposits, Advances, and revenues.

Every branch prepares its own budget for the fiscal year and then budgets of all

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the branches across the country are consolidated at the head office in Karachi. In

this way a consolidated budget is also prepared.

Fiscal year of the bank starts from January to December. Accounting department

starts preparing the budget from October for the next year.

Before the preparation of budget the bank reviews its sources and funds it has

and the uses of those sources.

The main sources of the bank are the follows:

Deposits, Capital, Borrowing from other banks, etc

The main uses of a bank are the follows:

Advances, Investment in securities, placement in interbank markets,

Other things which are undertaken into account while formulating the

budget are:

Income, Expenses, etc.

The revenue target is fixed keeping in view the past performance. The cost of

generating these revenues is also estimated. Then budget of each branch is

submitted to head office for modifications and for approval. After the modification

and approval the budget for a specific branch is being set by the head office.

Monthly budget meeting is held to analyze the monthly performance by all the

branch mangers with head office. The actual performance is compared with the

estimated and variance is calculated. Variance can be negative as well as

positive. If there is a negative variance, this shows management’s inefficiency in

controlling its expenses or incompetence in achieving the desired revenue

targets. Proper adjustments are made in the next month’s target according to the

previous month’s performance because sometimes the goals which are set by

the head office are unrealistic and unachievable.

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Reports

In Bank Alfalah many types of reports are being prepared. These are daily,

weekly, monthly, semiannual and annual reports. These are generated from the

main frame and are used for proper analysis. The following reports are generated

daily from the main frame which are being used by the accounts department for

the preparation of their own reports:

Statement of affairs:

It includes information about assets, liabilities and their balance. Daily position

of deposit and advances are also calculated in this report.

Subsidiary Statement:

This is a detailed report which includes all the information regarding the

statement of affairs.

Income and Expenditure report:

It includes all the details regarding to both the heads of income and

expenditure in detail.

Royal Profit Report:

It includes the details of the deposit of royal profit account.

Currency wise report (ccy):

It provides the details of all the deposits currency wise.

New Fcy report:

This report includes the information regarding only the new foreign currency

accounts. The old foreign currency accounts are those, which were at the

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time of nuclear explosions in Pakistan and were being freeze by the Nawaz

Sheriff government.

Sub 66 Report:

It contains income, expenditure, general ledger accounts and their balances.

Now following are the reports, which are being prepared with the help of the

above reports:

Daily position of advances and deposits:

This report is being sent to the head office daily in which the detail is given

regarding the new accounts of deposits and advances.

Statement of affairs:

This report includes assets and liabilities. Two copies of this report are made

daily, one is sent to the area office and one to the head office for analysis but

the format is different for both of them. Statement of Affairs also prepared at

the weekend for the whole week as well as at the end of a month.

Monthly Budget Review Report:

This report is made to review the performance of the month by calculating the

variance. And then if the variance is in negative, positive actions are taken

and reasons will also be mentioned in the report.

Funds Management

Every 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:

o Total Deposit (of all branches in a single city)

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o Opening Balance (closing balance of the previous day)

o Inward Clearing

o Outward clearing

o Cheques issued by State Bank

o 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.

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.

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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.

Activity Checking

Activity checking is the process of the entire banking, which has taken place.

A report known as activity report is prepared on daily basis. The report

specifies every vouchering, which has taken place. Sorting is made according

to the mainframe-generated report. All the vouchers are checked that whether

they are properly posted or is there any transaction left to be posted. This

checking makes the working of the bank more efficient and avoids any

loopholes.

Reconciliation

BAL prepares its reconciliation statements with

Head Office

State Bank of Pakistan

Head Office Reconciliation:

All the debit and credit entries of the main office account are recorded in the

statement. Then it is checked with physical vouchers and if there is any

problem, they reconcile it. Head office extract are statements sent by

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branches to the head office. They check the outstanding entries, if there is

any entry posted by branch but not by head office they will send their query to

the branch and branch will respond to that query by sending the required

document. Head office reconciliation is carried out in the head office;

accounts department handles inquiries.

State Bank of Pakistan:

SBP maintains the account of every scheduled bank including bank Alfalah.

The statement of account reconciliation shows the entries that are passed

during the month in both banks. Bank Alfalah compares the statement with

the ledger card of State bank of Pakistan in which all entries are recorded

done with SBP. If any amount debited by SBP and Bank Alfalah does not

credit that amount, it is added in the balance of the reconcile statement

provided by the SBP to BAL.

Maintenance of Fixed Assets and Calculation of their Depreciation

Account department maintains the record of fixed assets. The accounts

department calculates the depreciation the assets by using straight line

method. Depreciation is the allocation of cost of the asset over the useful life.

Depreciation is accrued on monthly basis and charged at year-end.

Department prepares Asset purchase report and Asset sale report after every

six months.

Depreciation is charged at the following rates:

Building 2.5%

Furniture 10%

Carpets & curtains 25%

Equipment 20%

Vehicles 25%

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Test Keys

Test is a coding system used to authenticate money transactions between

banks. Whenever money is transferred through TT, the concerned officer

requests the accounting department to apply test to the message. The test is

applied to the message; three copies of this message are prepared. One

goes to the test key department, one to the Telex/fax operator and the third

one goes to the department record. When the TT is received at the other end,

this test is verified. The transaction will be carried out if and only if the test

matches with their own test.

Banks have arrangement with other banks with which they have quite a large

volume of business and it is beneficial to have a direct arrangement with

these banks. This test arrangement can be with banks within country and

outside country. For example BAL has test arrangements with ABN Amro

N.Y, American express N.Y, Citibank N.Y, etc. When this arrangement is

carried out a test key is provided to the concerned bank, which contains

codes. This test key is different for every bank. This test key is also different

for inward and outward TT.

In local transfer double coding is used and in foreign transfer single coding is

used. Test key tables are to arrive at the code. Separate key table are used

for different banks. Twelve branches of BAL have arrangement for local

transfer and three branches are authorized for foreign transfer. Four things

should be carefully checked because code is based on four things:

Branch name

Currency

Date

Amount

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Test can be applied on nil amounts. The purpose is to just secure the

transaction. Another important significance of test is agency arrangement, which

bank built with other banks. Inquiries originated by any bank regarding the delay

of any message are also solved by the bank. They will check the message and

will respond to the query.

CREDIT DEPARTMENT

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

lend money (at a high rate of return). So, the lending operations of a bank

constitute a vital part of its business. This department is the source of income

and earnings for the bank.

Bank’s funds comprises mainly of money borrowed from numerous customers on

various accounts such as saving accounts, current accounts, fixed deposits etc.

Whereas the major part of total income of a bank is generated through the

utilization of these funds.

The credit department is further divided into two departments, which are as

follows:

o Credit Marketing

o Credit Administration

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Credit facilities in BAL

Bank provides two types of credit facilities to its customers. Following are those

credit facilities:

1. Funded

2. Non-Funded

1. Funded:

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

It is further divided into following types:

Current Finance (OD)

Cash Finance (Pledge)

Term Finance

FAPC I

FAPC II

FAFB

LBP

FIM

FATR

Cash Finance (pledge):

This is also a very common form of borrowing by commercial and industrial

concerns, and is made available either against pledge or hypothecation of

goods. This is also known as running finance. It is utilized for the creation of

current assets and to meet the permanent working capital requirements. In

this facility, the borrower is allowed to borrow money from the bank up to a

certain limit, either at once or as required. The borrower prefers this form of

lending due to the facility of paying mark-up charges only on the amount he

actually utilizes not the whole limit amount.

Term Finance:

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

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

is received in the end on semi annually basis. Term finance has to be paid

within a limit and once it is paid it cannot be taken back by the client.

FAPC I(Finance against packing credit):

Bank provides this facility against LC or sale contract (in favor of exporter).

Bank takes 100% security against this type of financing. This facility is also

called Pre shipment finance. Afterwards bank receives the payment of

exports and adjusts the exporters account. This loan is disbursed by the bank

for the preparation of goods once the L/C is received.

FAPC II (Finance against Packing credit):

This loan is also known as performance-based financing. This type of

financing is against last performance of the exporter. According to SBP

exporter can have finance up to the half of amount of previous year export but

then the exporter should ensure that the exports he makes are equal to

double amount of the loan for one year. The mark-up is charged for the period

the exporter has used the facility and not for the whole limit.

FAFB (Finance against foreign bills):

This facility is also known as post shipment finance. This facility is availed by

the exporter after he has shipped the goods and sent his documents for

collection. The bank purchases the documents form the exporter and give him

this facility. He will take loan against these documents and pays fixed mark-

up rate on this facility.

LBP (Local bills purchase):

Local bill purchase documentary is used for inland import export transaction.

Other wise it is same as finance against foreign bill purchased. This is also

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availed by the exporter after the shipment of goods and the bank purchases

the documents.

FIM (Finance against imported merchandise):

Finance against Imported Merchandise (FIM) is a credit facility provided to the

customer, in L/C transaction. In FIM, bank itself makes the payment to the

exporter and the goods are kept in the possession of bank. Delivery order

(DO) is issued by the bank for every time, when the importer makes the

payment, goods are transferred in the possession of importer.

FATR (Finance against Trust Receipt):

The bank also offer credit facility FATR, against sight L/C’s, like FIM. Contrary

to FIM, goods are given in the possession of importer. This facility is provided

to the customer having a credit rating A+.

2. Non-Funded:

Non-funded facility is that facility in which the bank’s funds are not physically

involved. A non-funded facility can any time become a funded one. It can

further divided into the following:

L/C

LG

However in Burewala Branch only L/G is issued

L/C (Letter of Credit):

Letter of Credit, whether sight or usance is a non-fund based facility provided

to the customer. L/C can further divided into sight L/C and Usance L/C.

L/G (Letter of guarantee):

Letter of Guarantee is also a non-fund based facility. Letter of guarantee

involves three parties namely buyer, the seller and the guarantor. The letter of

guarantee is basically bank’s guarantee that the respective person will

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perform his/her duties/services within the appropriate time other wise the

bank will pay the loan amount. When the bank takes the guarantee of the

client, a commission is charged from the customer.

Types of L/G:

Bid Bond

Performance Bond

Security Deposit

Repayment Guarantee

Mobilization Advance

Back to Back Guarantee

Securities for Advances

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

risk, the bank keeps different tangible and non-tangible securities, before

sanctioning the credit facility to a customer. The bankers prefer those securities

that carry less risk of depreciation due to market fluctuations and are easily

saleable, even under changing market conditions.

The securities used in advances are as follows:

1. Pledge

2. Mortgage

3. Hypothecation

4. Charge

5. Lien on Documents

6. Guarantees

1. Pledge:

Pledge is the actual delivery of the movable and tangible property to the

lender, as a security for a credit. In pledge, the possession of movable assets

is with bank but the ownership remains with the client. Pledge is considered

to be the best security for the bank. The commodities which are being

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pledged are normally raw material, consumables, finished goods and in

certain cases work in process (WIP).

Margin:

For every credit, the bank needs security with margin or cushion. The margin

requirements are different for every case. IF, there is 25% margin requirement

then to obtain loan of Rs 1 million, the security that is to be pledged should be

have worth of Rs. 1.25 million.

The possession of the goods is with the bank, so bank keeps these goods in

godowns under the custody of Mucaddams.

People who look after the pledged goods are called Mucaddams. If rice is to be

pledged with the bank, it doesn’t mean that this cotton will be kept in bank, such

type of goods is kept in the godowns of the company. So to make these goods

secure bank appoints its own men called Mucaddams to take care of the stock

and also bank has a board of its own name on the godown.

Precautions:

1. Nature of Commodity:

The banker must be aware of the nature of the property i.e. whether the

commodity is a perishable item. Also the commodity being pledged should

be easily saleable, so that in case of default of client, bank can easily sell

it in the market.

2. Client:

In case of pledge, godowns are in the premises of the clients under the

custody of Macadam’s, whose honesty can be brought at any time.

Therefore greater risk is imposed by the client. So the bank must be

satisfied with the honesty and credibility of the client.

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3. Market Awareness:

A banker must have market awareness e.g. fluctuation in prices. Such

commodities should not be pledged that might have low demand in market

and have many risks attached to it.

4. Suitability of Godown:

Suitability of godown depends upon the nature of the commodity. Banker

must be fully satisfied with the appropriation of the Godown.

5. Proper Valuation:

Whenever goods are pledged, the banker should be aware of the true cost

of the product as the client always overvalues his product. Sales taxes,

excise duties are also paid on the finished goods.

6. Insurance:

The goods offered for security must be properly insured. Banker must

analyze all the associated risks of the goods. So, to cover these risks

banker should decide about the insurance of the commodity.

2. Mortgage:

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

surrender the proprietary rights of the property. The transferor of property is

called a mortgagor and the transferee (bank) is called a mortgagee.

Usually two types of Mortgages are being created in the bank for the purpose

of collateral.

1. Equitable Mortgage

2. Registered Mortgage

1. Equitable Mortgage (E/M):

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When a mortgage deed is attached with the title documents only and is

deposited in the bank, it is known as “Equitable Mortgage” or “Mortgage

by deposit of title deed”. It is the most common form of the mortgage

created in bank.

2. Registered Mortgage (R/M):

When the mortgage deed is between the bank and the client is registered,

it becomes a registered mortgage. Mortgage deed is registered with the

Registrar of the Companies. It is an expensive mortgage and is created

when the title documents are weak or the client is not much trustworthy.

Precautions:

1. Nature and value of the property:

The banker satisfy themselves that whether the property is suitable for

security purposes and in case of sale the bank will not suffer any loss. For

this purpose, the bankers inspect the property and properly visit report is

prepared. Also the bankers hire the services of different valuators to

assess the right value of the property.

2. Investigation of Title:

The banker must be satisfied that his borrower has a good title to the

property. The bankers, therefore, conduct a proper investigation into the

borrower’s title to the property, through their own legal advisors.

3. Search for Prior Charges:

A search is made (with registrar of companies), to ensure that there exists

no prior charge on the property. If the title deeds of the property are in the

name of more than one person, search should be directed against the

name of each person through whom the title is made. For this purpose,

the bank also gets fresh NEC i.e. Non-Encumbrance Certificate, issued by

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the registrar indicating that no lien or charge has been created on property

being mortgaged, upto a specific date.

After a banker is satisfied with the property offered for security, mortgage

against his property is created through “Mortgage Deed”. For this purpose,

the original title documents are deposited in the bank with the mortgage

deed. Along with the title documents of property, the bank requires:

Memorandum of Deposit of the Title Deed

Agreement to create Mortgage

General Power of Attorney (Registered)

3. Hypothecation:

When an immovable property is offered for security against credit but both

the ownership and possession is left with the borrower, the goods are said

to be “Hypothecated”. Securities like machinery, stock etc. are offered for

hypothecation. Lending against hypothecation of goods is very risky. The

control of bank is weak so greater risk is involved in hypothecation.

In case of hypothecation

a) The banker reserves the right to inspect the goods hypothecated to

him and can ask for periodic stock reports, where necessary.

b) The banker, for his protection, may ask the borrower to insure. The

banker may himself do so and recover the expenses from the

borrower.

c) The banker may ask the borrower to maintain a balance of goods

sufficient to fulfill the margin requirements.

For the creation of hypothecation, the bank gets the letter of hypothecation

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

private limited companies, with the Registrar of Companies (SECP).

4. Charge:

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Charge means the legal right on the assets of the person (company). In

case of limited companies, banks generally create their charge on the

assets of the company, as security. The charge is registered with the

Registrar of the companies (SECP).

Charge is of many types:

a. First Charge

b. Second Charge

c. Pari Passu Charge

a) First Charge:

The bank who has the first charge means that it has the first right on the

assets of the company in case of liquidation. If other banks also have

charge against that asset then they have second charge after the first one.

b) Second Charge:

Second charge means that the bank has the second right on the assets of

the company, and then afterwards third charge, fourth charge and so on

have the right.

c) Pari Passu Charge

Pari Passu charge means that all the banks who have involved in the Pari

Passu charge have the equal rights. Pari Passu charge can be created for

the first charge, or for the second or so.

5. Lien on Documents:

Like charge, bank creates its lien on the documents in its possession, as

security. For example, in case of import transaction under L/C, bank

creates lien on import documents.

6. Guarantees:

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Along with other securities, bank may rely on other guarantees like other

bank guarantees, to protect himself against the advances.

Processing of Loan

The banker must be very careful and ensure that his depositor’s money is

advanced to safe hands where risk of loss does not exist. When a

customer requests his banker to facilitate him with different credit facilities,

the banker first assess the credibility of customer and the market

conditions.

The elements of credibility, integrity, repayment, and market conditions

help a banker in arriving at a conclusion regarding the safety of advances.

Credibility:

It is the most important factor in determining the safety of advances, for there

is no substitute for integrity, honesty and trustworthiness. A borrower’s

character can indicate his intention to repay the advance, since his honesty

and integrity is of primary importance. If the past record of the borrower

shows that his integrity has been questionable then the banker usually tries to

avoid such a customer.

Repayment:

This is the management ability factor, which tells how successful a business

has been in the past, and what are the future possibilities are. Before

advancing loan a banker must be satisfied with the sources of the repayment

of the funds.

Capital:

The bankers also check the capital of the borrower. This can be kept as a

security of a loan. In other words, if the businessman financial Position is

sound, only then he can be lended.

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CIB Report:

Bank cannot sanction any loan to a customer, until and unless it gets credit

report form CIB (Credit Information Bureau, SBP). Before making any

decision about the client, bank needs a CIB report. Therefore, first of all the

bankers requests CIB to provide the credit report of the client. This report

indicates all the credit facilities outstanding (availed) by the client.

Credit Line Proposal (CLP):

After being satisfied with the credibility and integrity of the applicant, the

processing of loan application starts with the preparation of Credit Line

Proposal (CLP). It has the vital and most important task assigned to the credit

officers in BAL.

In a CLP, every information regarding the client and his business is stipulated

as follows:

Total existing facilities (limit), their outstanding value and the securities

that were provided against these facilities.

Total proposed limit of credit and the securities provided against it. The

credit officer does the analysis and verification of these securities.

Regular Credit Limit:

But if the client wants to route a regular business with the bank, then he requests

for regular credit limit of credit facilities for a specific period. Following things

should be undertaken while preparing a CLP and also being mentioned in the

CLP.

Customer’s background, his relationship with the bank (if he is an existing

customer), his relationships with other banks.

Purpose of facility and terms and conditions regarding the client.

Nature of his business and what are the market conditions and

opportunities fro the business.

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Reciprocal business is also stipulated on the proposal, which means

expected business that would be routed through the bank for these

facilities. Bank calculates his profitability on the basis of this business.

FOREIGN EXCHANGE

DEPARTMENT“The transfer of credits to a foreign country to settle debts or accounts between

resident of home country and those of the foreign country” or “the foreign bills

currencies etc used to settle such accounts”.

Foreign exchanged department deals within exports and imports. The bank acts

as exporter as well as importer bank for different parties who are in the business

of export and import.

Import

All goods and services brought into a country that were purchased from

organization located in other countries.

Export

All goods and services sent from one country to another country.

DOCUMENT REQUIRED FOR EXPORTER

1) National tax number

2) Registration with EPB

3) Sales tax registration

DOCUMENTS TO BE ATTACHED FOR EXPORTERS

Invoice

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Bill of lading

Packing list

Total quantity

Net weight / carton

Gross weight / carton

Total net weight / carton

Total gross weight

Bill of exchange (original or draft)

E-form: Initial document on which total export proceeding is based. In this

form, all the conditions are given, which are necessary for exports.

Letter of credit: It is written agreement between importer and exporter.

Beneficiary certificate.

DHL certificate (TCS certificate)

Form ‘M’

Certificate of Origin (Form – A)

FORM-E

Government has provided facility to exporter in taking E-Form from any bank and

he can present it to any bank for negotiation. Export precede realization

certificate.

SBP gives rebate to exporter against export after realization. It is paid according

to commodity wise and bill wise. Claim period: 1 year.

TRANSPORT DOCUMENT (BILL OF LADING, AIRWAY BILL)

When insurance is done by importer, C&F (cost and freight) usually used.

FOB cost (free on board)

CIF (cost insurance and freight) when insurance is done by exporter, CIF

is used.

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Tenor (At sight) immediate payment by importer after receiving product.

Partial shipment: Product is sent partially.

Transshipment: Product is sent via any country.

E-FORM CERTIFICATION

When export is done on C&F basis, so bank issues E-form certification to

exporter and he submits it to the custom officer along with e-form certification to

certify e-form.

FORM OF AUTHORIZED DEALER’S CERTIFICATE

State bank permits exporter to issue bill of lading in the favor of e-form bank. But

if requirement of L/C is to issue bill of lading in favor of company then shipping

company issues bill of lading in favor of Exporter Company. Authorized dealer

certificate is filled for this purpose.

CERTIFICATE OF ORIGIN

This certificate shows that goods are from Pakistan.

COVERING SCHEDULE

If in covering schedule, it is given that “please remit proceed to our Karachi office

a/c no. 5740734881 with ABN (Amro Bank New York), USA for onward credit to

BAF Islamabad.

BENEFICIARY CERTIFICATE

If L/C requires some information as proof of anything from exporter then exporter

has to present beneficiary certificate for that proof.

E-FORM

E-form has four copies:

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One for custom officer

One for exporter

Triplicate copy for SBP

Duplicate copy for bank

Bank reporting or duplicate and triplicate is done by bank. Custom officer (date is

given on the foot form) should clear product.

PAYMENT FROM IMPORTER BANK

It is the choice of importer to open L/C from any bank and the bank from which

L/C is opened can also refer to some other bank for payment. So bill of exchange

is sent to refer bank and other documents are sent to L/C opening bank.

SWIFT (Standard World Wide Inter Bank Financial Transaction)

It is network among all banks. No other institute can get involved in it.

BILL OF LADING

Certificate from shipping company for loading commodities. If requirement of L/C

is to issue bill of lading in favor of L/C opening bank, then authorized dealer

certificate will be provided by bank in favor of L/C opening bank.

BANK KEEP IN RECORD

Covering schedule

Invoice

Packing list

AWB

Certificate of origin

E-form

Normally bank keeps photocopy of all documents in record. Negotiable

documents (original documents).

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IMPORTS

L/C is opened by the importer. There are two types of L/C

Revocable L/C

Irrevocable L/C

NECESSARY REQUIREMENT

If place of issue and port of loading is different on bill of lading, then along with

the stamp of shipment on board, vessel name and port of shipment is written.

1) Issue date of bill of lading – shipment on board.

2) There should not be cutting on bill of lading without authentication.

3) Bill of lading should show capacity of agent. If the agent of Importer

Company can take bill of lading, then his name should be mentioned

on bill of lading.

4) Original GSP should be presented.

5) If TT reimbursement is not acceptable, it means bill of lading is

necessary.

When documents are received fro export, do enter into lodgment

register.

DOCUMENTS FOR IMPORT

o Performa invoice signed by importer

o Category passbook copy attested by any bank

o L/C opening application filled in by the customer

o Import registration with export promotion bureau

o Annexure

o Verification of signature by S.S. Card

o L/C issued on basis of L/C application form.

o Insurance if covered by buyer.

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o Insurance cover note.

o Insurance policy.

DOCUMENTARY CREDIT

DC Department

Alfalah Bank has his full-fledged documentary credit department.

As a credit instrument and as a means of making as a payment the documentary

credit is an essential instrument for conducting word trade today. A documentary

credit represents a commitment bank to pay the seller of goods or services a

certain amount provided present stipulated documents evidencing the shipment

of the goods with prescribed period of time.

For the cases of imports or exports first the parties have to do upon a sale

contract regarding the term and condition of sale. One mode of payment is by

L/C, which is secured, and now a day mostly uses the business.

Letter of credit is under taking by opening bank (Importers bank the Exporters

bank (Negotiating bank) that it will make payment if documents are as per terms

of LC.

Four Parties Are Involved In Letter Of Credit

Applicant Importer

Beneficiary Exporter

Issuing bank bank of importer

Advising bank bank of importer

According to import policy, no import is valid with out import license, which is

issued by the chief controller of import, and export or we can say export

promotion bureau (EPB). If a person desires to take up import trade must get his

name, his firm or his limited company, registered with the EPB. On being granted

registration certificate, he will be eligible to import goods according to import

policy. There is no special condition of eligibility for registration. The only

50

requirement is that he should be a Pakistani and must be registered with income

tax department.

L/C OPENING PROCEDURE

When the importer obtained import license, then the bank will open letter of

credit. “A letter of credit is undertaking by LC opening bank to put an agreed sum

of money to sellers bank on behalf of the buyer of the goods under clearly

defined terms and conditions”. Pakistani banks open only irrevocable LC. An

essential feature of the irrevocable LC is that it cannot be modified, altered,

amended, or canceled without the prior consent of all the parties. Party comes to

the bank and fills the form, which is provided on the payment of Rs. 100. This

form is filled by the party and is return to the bank, it includes details like.

Name of company

Address

Country of origin

Branch name

Quantity

Insurance company

Shipment from

Shipment to

One thing should also be submitted which is INDENT. If the foreign party has any

agent they will issue the indent with following details.

To masers

Importers, etc

Document Required for “LC” Opening

When the bank opens LC, it requires following documents.

Valid import license

Performa invoice

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Importer should be Pakistani

Letter of under taking form importer

Insurance cover.

An important point, which the bank will consider before opening of LC, is that

sufficient funds be available in the LC openers accounts. At the time of

establishing the LC the opening bank generally retains a maximum margin to

safe guard its own commitment. The margin may vary from nil to 100% according

to the nature of commodities and it also depends upon the party. At the item of

establishing the LC opening bank charges bank commission, postage and other

charges from the LC opener account. Another main important point is that value

of LC should not increase the value of import license. After all the documents are

the bank verifies being checked and signs. A sanction slip is attached with each

form so that the approval can be gained from the manager of the bank.

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

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

importer account and if the amount is not found then LC is not opened and the

party is informed about the situation. On the deposit of the margin then LC is

opened LC limit if set by the bank is also checked.

After the LC is opened following entries are made.

LC opening register

Margin / Liability Account Register.

Payment To Seller

The negotiating bank upon receiving the documents from the seller checks the

documents according to terms and conditions of credit upon satisfying it self of

this the negotiating bank makes payment to the seller if sight credit. It then

forwards the documents to the opening bank and reimburses it self through the

opening banks account with itself.

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Documents Received By the Opening Bank

Importers bank or opening bank receives the following documents form the

exporter’s bank or negotiating bank.

o Bill of exchange

o Invoices

o Bill of lading

o Packing list

o Certificate of origin

o Insurance

Competitors

Despite notable economic uncertainties, the financial strength of Bank Alfalah

Limited has greatly enhanced during the previous years. The successful

expansion program proved their capability and commitment in comparison with

the competition in the financial sector. The Banking structure in Pakistan

comprises of:

Central Bank

Commercial Banks

Investment Banks

Development finance Institutions

Specialized Banks

Foreign Banks

Bank Alfalah is a private commercial bank so the major competitors of Bank

Alfalah are the following:

HBL

UBL

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Askri Bank

Standard Charted

RBS

Muslim Commercial Bank

The bank of Punjab

My Bank Ltd

Bank Al-Habib Ltd

ABL

The departments, I worked

When I started my internship at bank Alflah limited in main branch blue area

Islamabad, at that time BHARA KAHU branch is under construction, and I

worked one week in Account Opening Department and two days in clearing

department After one week when I learned Account opening well my supervisor

Mr.Jawad the branch Manager of Bhara kahu Branch and Mr.Majid zubair

Operation manager said, from now we are going to open an accounts for Bhara

Kahu branch so that at branch opening we have some Deposit, because am a

local boy and know many peoples and individuals who are doing solepropritor

ship business. We visit different shops, Schools, Colleges and meet with

individuals and complete theirs AOF and opened many accounts, and also work

for outdoor advertisement and displayed banners in different areas, and by

personal selling to inspire peoples to open and maintain an account with BAL.

SWOT ANALYSIS

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BAL is one of the fastest growing banks in Pakistan. In the light of these

situations we can make an analysis.

Strengths:

Bank is in its growing stages so there is good financial position.

Professional and Committed workforce

Good customer service

Increasing the number of branches in the country

Online Banking

Well experienced and quality staff

Fully computerized Network

Each department in the bank is fully allowed to take adequate decisions of

its own, saving the time and help in achieving the objectives

Weaknesses:

Although the bank is growing fastly but it has some weaknesses which it should

remove to make itself further strong.

The staff is not satisfied with the salary structure

Gives its staff less benefits

Opportunities:

Extension of International network of the branches

Introduction of innovative products

Growing market

Threats:

Uncertain economic conditions

Action taken by competitors

Political Instability

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Findings and Analysis

The findings and analysis of Bank Alfalah Limited is as follows:

Good Image:

Bank Alfalah has the benefit of having better reputation and image because of

having the strength of Abu Dhabi consortium and under the leadership of His

Highness Sheikh Nayan Mabarak Al-Nahayan. People feel lesser risk for

investing their money with the bank.

Good Customer Services:

The bank is providing its customers world class and excellent services. This is

the main reason for the growth of the bank.

Coordination:

Meetings are held very frequently which keeps the head-office well informed

about the performance of its branches and also provides officials with the

opportunity to communicate, discuss and deals with different situations as

they arise.

Employee Behavior:

The employees of Bank Alfalah Limited are very committed to their work.

They are very hard working and punctual but some of them have problems

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with he environment of the bank and they feel that the branch environment is

not very encouraging.

Behavior with Internees

I observed during internship period and met with other Internees, all were not

satisfied, they said the behavior of employees with internees, is not satisfactory

and they take too much work from internees so due to that internees not take

too much interest in their work.

I observed the bank Alfalah a financially sound bank. Its profits are increasingly

year-by-year. Its staff is very good and sincere with the bank. Bank Alfalah under

the leadership of Sheik Nahayan has made significant progress in building and

strengthening both the corporate and retail banking sectors in Pakistan.

Bank Alfalah views specialization and service excellence as the cornerstone of

its strategy. The people at bank realize that innovation; creativity, reliability,

customized, services and their execution are they key ingredients for their future

growth.

Recommendations

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For internees:

I recommend that the staff should behave well with internees and share their

experience with them, create interest and encourage them so that internees can

learn easily.

Misdistribution of work:

In Bank Alfalah, there is misdistribution of work; some people are over burdened

with the work and they are not happy with that. So I suggest that there should be

fair distribution of work in all the departments and use job rotation technique for

better performance of the employees.

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