Internship Report

Internship Report

On

Bank Alfalah Limited

Bahawalnagar Campus

DEPARTMENT OF MANAGEMENT SCIENCES

Session: 2008- 2010

An attempt by:

Irfan ur Rahman

MBA (Marketing)

Roll No. (15)

Group Morning

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Internship Report

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Internship Report

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Internship Report

PREFACE

There is a pivotal importance of experience between knowledge and work

practically in professional. We seek knowledge from books and want to owe

on it practically but working lifestyle is obviously different from the bookish

knowledge. This is the deep-seated motivator who geared up me to join my

six-week internship program in Banking Sector which provides me an

opportunity to apply my knowledge practically. Mostly student applying

concept differently whom they have learned but they should be faces the new

methodology in the business field. Owing to these new methodologies,

students face various problems in different field of professionalism but with

the laps of time they adopt these squabbles with the office environment and

learn the management behaviors, attitude and premise of work.

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ACKNOWLEDGMENT

I owe commencing my empathy and thanks to my Almighty Allah to enabled

me to liberation seek out an arduous responsibility with appropriate care and

caution in rime interest of myself and to the great credit of my worth teachers ,

parents and especially elder brother Mr. Furqan ur Rahman. Various people

being very important for me to widen my report devoid of their support I

might never flourish to complete this report. The planning and preparation of

this report is not just my efforts owing to the co-operation of Mr. Tahir Malik

“Accountant Bank Alfalah Limited” and my friends Muhammad Farhan Hanif

who helped me to compile my efforts in the shape of this report.

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Dedicated

To my parents Bastion

Of patience and grace Owing their

Prayers, the world I could face up to the Tyranny,

Unawareness and coercion those murmur prayers as my best

Possession ‘O’ Lord of Heavens, The Kindness is

The best dwelling, we ever knew the

Spur For all that we do.

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Table of ContentsExecutive Summary...............................................................................................................................8

History of Banking.................................................................................................................................9

Banking in Pakistan............................................................................................................................9

Types of Banks.....................................................................................................................................11

CLASSIFICATION OF BANKS..................................................................................................................12

INTRODUCTION TO BANK ALFALAH.....................................................................................................15

ORGANIZATION CHART........................................................................................................................16

Board of Directors...........................................................................................................................17

VISION.............................................................................................................................................18

MISSION...........................................................................................................................................18

Philosophy.......................................................................................................................................18

Bank Alfalah khanewal Branch............................................................................................................21

DEPARTMENTS................................................................................................................................22

PEST Analysis.......................................................................................................................................48

Ratio Analysis.......................................................................................................................................49

Balance sheet and profit and loss account 64

CRITICAL ANALYSIS 65

SWOT ANALYSIS...................................................................................................................................66

SUGGESTIONS & RECOMMENDATIONS...............................................................................................68

Conclusion...........................................................................................................................................69

BIBLOGRAPHY..................................................................................................................................70

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Executive Summary

Internship experience is very important and helpful before anyone goes

looking for a job. Employers want people who have experience. Internship

gives students the opportunity to grow, academically and personally. When

anyone initially starts out he is going to be doing the basic repetitive task that

every new person had to do. However this is not necessarily negative as it

teaches the person responsibility at the smallest level.

Bank Alfalah Limited (BAL) has 238 branches at different places in Pakistan

and main objective is to provide its customers with safe, secure and reliable

service through wide range of products. The report covers the product

information provided by the bank. Profile of banking industry, profile of

company, company business process, and departmental functions of company,

SWOT analysis of industry and company, Problems and recommendations. I

believe that this report will provide important information regarding my

departments A detailed ratio analysis of Bank Alfalah Limited has been

included as a core part of this report

To analyze the company from various aspects of marketing, SWOT Analysis

has been carried out with devoted efforts. The strengths, weaknesses,

opportunities and threats depict the future of Bank Alfalah Limited.

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History of Banking

Bank is derived from Bancus or Banque it is Italian word. History of Banking is traced to

2000 B.C in Greece. Priests and goldsmiths acted as financial agents by keeping money and

valuables of people in temples in strong safes. Thus the first stage in the development of

modern banking thus was accepting of deposits of cash from those who had surplus money

with them.

BANK can be defined as:

“Institution for receiving, lending, and safeguarding money. It may receive money on deposit,

cash checks or bills of exchange make loans, discount commercial paper, and issue bank

notes (promissory notes payable to bearer).”

Banking in Pakistan

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.

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Pakistan has a well-developed banking system, which consists of a wide variety of

institutions ranging from a central bank to commercial banks and to specialized agencies to

accommodate for special requirements of specific sectors. The country started without any

worthwhile banking network in 1947 but witnessed phenomenal growth in the first two

decades. By 1970, it had acquired a flourishing banking sector. From 1974, which was the

year of privatization, and 1977 the size of the bank deposits were doubled, however this pace

of growth became stagnant during 1977-80. The next five year from 1980 to '85 showed

some improvement but again suffered a slow growth rate from 1985 to 1988.

It was in 1990 when the wheel of banking sector started in reverse direction when

Nawaz Sharif government privatized public sector banks. First of them was Muslim

Commercial Bank (MCB) which was handed over to Mian Mansha.

The other bank privatized by Nawaz Sharif government was the Allied Bank, United Bank

Limited and the Habib Bank Limited has been privatized.

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Types of Banks

Central bank: The bank in a state which is responsible for issuing the state's currency,

regulating the quantity of its money in circulation, maintaining currency reserves, and

acting as a lender of last resort e.g. State Bank Of Pakistan.

Commercial bank: A business firm that maintains custody of money deposited by its

customers and pays on drafts written by its customers. It earns its profits by investing

the money it has on deposit for examples Bank Alfalah, UBL, ABL, HBL, MCB, Prime

Commercial bank etc.

Confirming bank: A bank that makes an independent promise to pay, accept, or

negotiate a letter of credit issued by another bank when the documents named in the

credit are delivered to it.

Development bank: Bank which provides funds for the promotion of the economy of an

area, country, region, or the world for example Asian Development Bank.

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CLASSIFICATION OF BANKS

Public Sector Banks

National Bank of Pakistan NBP

First Women Bank Limited FWP

The Bank of Khyber KB

The Bank of Punjab BOP

SPECIALIZED BANKS

Industrial Development Bank of Pakistan

SME Bank Limited

The Punjab Provincial Cooperative Bank Ltd

Zarai Taraqiati Bank Limited

PRIVATE BANKS

Allied Bank Limited

Arif Habib Bank Limited

Askari Bank Limited

Atlas Bank Limited

Bank Alfalah Limited

Bank Al Habib Limited

Faysal Bank Limited

Habib Bank Limited

Habib Metropolitan Bank Limited

JS Bank Limited

KASB Bank Limited

MCB Bank Limited

Mybank Limited

NIB Bank Limited

SAMBA Bank Limited

Saudi Pak Commercial Bank Limited

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Soneri Bank Limited

Standard Chartered Bank (Pakistan) Limited

The Royal Bank of Scotland Limited

United Bank Limited

ISLAMIC BANKS

Bank Islami Pakistan Limited

Dawood Islamic Bank Limited

Dubai Islamic Bank Pakistan Limited

Emirates Global Islamic Bank Limited

Meezan Bank Limited

FOREIGN BANKS

Albaraka Islamic Bank B.S.C. (E.C.),

Barclays Bank PLC

Citibank N.A. - Pakistan Operations

Deutsche Bank AG - Pakistan Operations

HSBC Bank Middle East Limited - Pakistan Operations

Oman International Bank S.A.O.G -

Pakistan Operations

The Bank of Tokyo-Mitsubishi UFJ Limited - Pakistan Operations

DEVELOPMENT FINANCE INSTITUTIONS

House Building Finance Corporation Limited

Pak Brunei investment Company Limited

Pak-China Investment Company Limited

Pak Iran Joint Investment Company Limited

Pakistan Kuwait Investment Company Limited

Pak Libya Holding Company Limited

Pak Oman Investment Company Limited

Saudi Pak Industrial & Agricultural Investment Company Limited

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MICRO FINANCE BANKS / INSTITUTIONS

KASHF Microfinance Bank Limited

Khushhali Bank Limited

Network Microfinance Bank Limited

Pak Oman Microfinance Bank Limited

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INTRODUCTION TO BANK ALFALAH

Bank Alfalah Limited (BAL) is a banking company incorporated in Pakistan on June 21st,

1992 as a public limited company under the Companies Ordinance 1984. Its banking

operations commenced from November 1st 1992. The bank is engaged in commercial

banking and related services as defined in the Banking companies ordinance 1962. The Bank

is currently operating through 238 branches in 75 cities, with the registered office at

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

Since its inception, the management of the bank has implemented strategies and

policies to shape 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 seventeen years, we have emerged as one of the foremost financial

institution in the region endeavoring to meet the needs of tomorrow today.

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ORGANIZATION CHART

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Board of Directors

H.E. Sheikh Hamden Bin Mubarak Al NahayanChairman

Mr. Abdullah Nasser Hawalileel Al-MansooriDirector

Mr. Abdull Khalil Al MutawaDirector

Mr.Khalid Mana Saeed Al OtaibaDirector

Mr. Ikram Ul-Majeed SehgalDirector

Mr. Nadeem Iqbal SheikhDirector

Mr. Sirajuddin AzizDirector & CEO

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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.

Philosophy Excellence in service

Quality performance

Product innovation

Customer Relationship

“Before we discover we must explore”

Knowing customer and their needs is the key for the success of a bank; Alfalah client

relationship managers are well equipped and well trained to provide most efficient and

personalized service to each and every customer. Alfalah products are as diverse as the

market segment. Alfalah has structured and syndicated financing arrangements, working

capital, replacement facilities, financing of international trade, consumer credit, and small

business loans unparalleled investment products for the individual saver.

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.

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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.

Technological innovation

“Modern science is not an option, it is an obligation”

Technology is rapidly changing the way we think, act and do business. It 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.

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Ethical values

“Professionalism without integrity is like a book without pages”

Because 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. The

following primary core values, providing the guiding principles for the corporate behavior.

Commitment

Integrity

Fairness

Teamwork

Product portfolio

Not only comprehensive but also customizable to match the needs and preferences of our

customers. These strategic characteristics of our portfolio have helped us to face challenging

economic conditions. Our 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.

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Bank Alfalah Khanewal Branch

Bank Alfalah branch Khanewal was established in September 2006. It is located near to city

police station at Iram hotal.This branch is under the name of Bank Alfalah 89/10-R Khanewal

Branch.

Mfd

Officers

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Manager

Operation Manager

Officers

CashAccount

Agri Credit Clearing MIS

Security Guards Driver Tea Boy Others

Internship Report

TRAINING PROGRAM

During internship-training program of Department of Business Administration I worked in

Bank Alfalah for six weeks. I had the advantage of working in friendly atmosphere at branch

of Bank Alfalah. Here I had the chance to learn a great deal.

During the training I worked in different departments of the bank. I was able to get a good

idea of the working of a bank. It was a knowledgeable experience.

In the following pages I have explained the working of various departments in which I

worked during the period of training. I am very grateful to the officers of Bank Alfalah who

helped me during the training in understanding various aspects of bank as well as after

training in the preparation of Internship Report.

DEPARTMENTS Accounts opening

Bills / Remittances

Accounts Department

Credits Department

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A). ACCOUNTS OPENING DEPARTMENT:

Business process of this department is as follows:

1. Accounts Opening:

Types of accounts

CURRENT A/C PLS SAVING A/C Foreign currency A/C

JOINT A/C Sole Proprietor A/C Partnership A/C

Individual A/C

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1.) Types of Accounts:

There are three types of accounts and are as follows:

A (Current Account:

Individuals Partners, companies associations, Clubs, Societies, and NGOs are eligible to

open current account. Salient features are as follows:

Requirements:

Minimum initial deposit Rs.10, 000/-

Minimum average balance Rs.10, 000/-

There is no restriction on number of transaction.

There is no limitation on amount of withdrawal.

Low balance penalty of Rs.50 per month is charged.

Business or job must be required for opening all type of Accounts.

Introduction is necessary.

Identity card’s copy is required. Original must be seen.

B) Foreign Currency Account:s

Both resident and non-resident Pakistanis as well as foreigners can open foreign

currency accounts.

Foreign currency accounts can be opened either as savings accounts or current accounts.

C) PLS Saving Account:

Saving account are designed to mobilizing savings primarily from a large number of

individuals and household.

Any one or more individuals or partners can open a PLS saving account with the Bank.

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Requirements:

Minimum initial deposit is Rs.5, 000/-

A smaller initial deposit can be accepted at the discretion of branch management if

average deposit is expected to remain above RS. 5, 000/-

Profit on PLS saving account is calculated on minimum monthly balance basis.

Profit rates are announced and paid biannually in January and July respectively.

Profit rate for the period ending is 5% per annum. However profit rates are subject to

charge in response to change in the return earned by the Bank on deployment of

funds.

There are four sub types of each account which are as follows:

A.)Individual Account:

This type of account is for the customers who are interested in personal/individual

account and such customers can be a salaried person, a sole proprietor who does not want to

open their account on the name of company, a housewife.

B.)Sole Proprietor Account:

This type of account is only for the customers who want to operate an account on

the name of their company.

C.)Joint Account:

This type of account is for the customers who want to operate joint account and this

type of customer can be a house wife, a salaried person, a sole proprietor and a student as

well.

D.)Partnership Account:

This type of account is limited only for the partners of one business and maximum limit of

partners for an account is three.

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Required Documents:

Documents required under opening an account are as follows:

Documents for Individual Accounts:

a. Original CNIC,

b. One copy of any family member CNIC for next of kin,

c. In case of business, business proof (letter head of company or visiting card),

d. In case of job, job certificate,

e. Introduction of any account holder of BAL(account holders who are operating

photo account can not introduce any one),

f. Deposit.

Documents for Sole Proprietor Account:

a. Original CNIC,

b. One copy of any family member CNIC for next of kin,

c. Business proof (letter head of business and visiting card),

d. Stamp,

Name of company

Proprietor

e. Introduction of any account holder of BAL,

f. Deposit,

g. National Tax Number.

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Documents for Joint Account:

a. Original CNIC of all members,

b. One copy of any ones family member CNIC for next of kin,

c. In case of business, business proof (letter head of business and visiting card),

d. In case of job, job certificate,

e. In case of student, student proof,

f. Introduction of any account holder of BAL,

g. Deposit,

Documents for Partnership Account:

a. Original CNIC of all members,

b. Partnership deed,

c. If instructions for operating account are not given on partnership deed then

instructions are required on letter head of company,

d. Stamp,

Name of company

Proprietor

e. Introduction of any account holder of BAL,

f. Deposit,

g. National Tax Number.

Three passport size photo graphs are also required but only in case customer is unable to

signature or as well as due to shaky signatures.

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D) ROYAL PROFIT ACCOUNT:-

It is a special product of BAL. It can be treated both as a current account and saving account.

It can be treated as a current account only in case of businessmen as they cannot open saving

account. But by opening royal profit account they can earn profit on the money deposited. In

this account minimum average balance should be Rs.50, 000. Every month profit is

transferred to the account of client. The method of calculation of the profit is the Average

Balance Method- (i.e. average balance of one month) and is paid monthly and calculated

daily basis. High returns on higher balances.

E) ALFALAH MAHANA AMDAN

Alfalah Mahana Amdan is a 3 year TDR with expected rate of profit of 10.5% p.a. This term

deposit will provide an opportunity to individual/joint customers to enjoy higher returns that

will automatically be credited to his/her account on 1st working day of each month, but it

depend upon customer when he want to take profit at monthly basis or yearly it is mentioned

at form.

Some salient features

1. Minimum placement limit is Rs. 100,000/- and maximum placement limit is

Rs.15,000,000/-

2. Expected Rate of profit is 10.5% Per annum (as per PLS governing rules)

3. Profit will be automatically credited on the 1st working day of each month into

customers account.

4. Free Personal Accident Insurance coverage up to the deposit amount or Rs.

1,500,000/- whichever is lower.

5. Customer can avail financing facility up to 90% of the deposit(as per banks policy)

6. Any Pakistani resident over the age of 18 can open this account

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7. Alfalah Mahana Amdan term deposit can be maintained only at any one BAL branch

with a maximum capacity of Rs 15 Million. An undertaking shall be obtained from

the customer certifying that he/she is not availing Alfalah Mahana Amdan Term

Deposit Receipt facility from any other BAL branch. Alfalah Mahana Amdan TDR

will be issued for three years tenure with auto renewal facility of principal amount i.e.

the facility will be renewed automatically on maturity.

Alfalah Mahana Amdan TDR will be subject to Zakat, Withholding Tax as well as any other

applicable taxes.

1. Who can avail this facility?

Any Pakistani resident over the age of 18 years can avail this facility. This facility is

offered only to individual/joint customers. Other customers like companies,

corporate etc are not eligible to avail this facility.

2. Is the customer required to have a checking account with BAL?

Yes. The Customer must be maintaining a Pak Rupees checking account with BAL

and TDR facility shall be availed from the same branch.

 

3. What is the minimum & maximum placement limit for availing this facility?

Minimum placement limit is Rs. 100,000 and maximum placement limit is Rs.

15,000,000.

4. What is the tenure of this TDR?

The Alfalah Mahana Amdan Term Deposit Receipt will be issued for three years

tenure with auto renewal facility.

5. When will the profit be credited in the account?

Profit will be credited on 1st working day of each month to the customer’s account

after deducting applicable WHT, etc. 

6. Is there any detailed medical examination required before the facility can be

availed?

No medical examination/health declaration is required. 

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7. How insurance benefit will be given in case of joint account?

In case of a joint account the amount of insurance cover will be proportionately

divided (equally) among the joint account holders. 

8. Is premature encashment allowed?

Yes, premature encashment is allowed. However, in such cases system will

calculate profit amount at the prevailing rate of normal TDR depending upon the

nearest period bracket completed. For example, if premature encashment is made

after 1 year & 11 months, the 1 year prevailing profit rate of normal TDR will be

applied on number of days funds remain placed with the bank. Rate differential on

already paid profit will be adjusted from the principal amount. 

9. How many Alfalah Mahana Amdan TDR facilities can be availed by one customer?

Customer can maintain Alfalah Mahana Amdan Term Deposit only at any one BAL

branch, with a maximum capacity of Rs. 15 million. An undertaking shall be

obtained from the customer certifying that he/she is not availing Alfalah Mahana

Amdan TDR facility at any other branch.

10. What shall be the procedure if a customer is found maintaining more than one

Alfalah Mahana Amdan TDR facility at any other BAL Branch?

In case a customer is found maintaining placement at more than one branch than all

subsequent Alfalah Mahana Amdan Term Deposit Receipts availed at any other

branch shall be treated as normal TDR and profit shall be paid as per prevailing

normal TDR rates. Rate differential on already paid profit will be adjusted from the

principal amount.

ACCOUNT OPENING FORM

The first step is to fill an “account opening form” by the applicant. Following information is

to be given:

CURRENCY OF ACCOUNT:

One of the following choices is to be ticked:

1) Rs. 2) US$ 3) Pound 4) J Yen

TYPE OF ACCOUNT:

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The account opened can be PLS/saving, current, royal profit account. And BBA

account.

TITLE OF ACCOUNT:

It shows the name of the person in whose name account is to be opened. Once an

account is opened in a specific name, it can never be changed.

PERSONAL ACCOUNT:

The account can be opened as individual or joint account.

JOINT ACCOUNT:

In case of joint account more than one person can operate the account. However

instructions are to be concerning the operation of the account i.e.:

Jointly:

In this case account cannot be operated if signature of anyone of the account

holder is missing.

Either or survivor:

In this case if anyone of the account holder of the joint account passes away the

survivor cannot operate the account without getting the succession certificate.

Anyone of us:

Under this instruction account can be operated with the signatures of any of the

joint account holders.

Following information is also given on the account opening form:

Name in block letters

In case of joint account the names of both account holders are to be mentioned.

Father’s/husband’s name

Occupation:

The applicant must give exact description of occupation e.g. instead of writing

businessman, the nature of business is to be written.

Name and address of employer

Nationality

Country of residence

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Telephone number

N.I.C Number

Passport number (if any)

Date and place of issue

Required in case of N.I.D as well as Passport.

NEXT OF KIN:

The name, address and relation are to be specified. This information is required to get

information concerning account holder in case he cannot be contacted. The form is

not accepted if this information is missing.

TYPE OF ORGANIZATION:

One of the following choices is to be ticked:

Limited company

Public

Private

Partnership

Club/society/association

Sole proprietorship

Others

The documents required in each case are different which have been mentioned above. In case

of corporate account it is necessary to give following information:

Name in block letters

Brief description of business

Date of incorporation

Place of incorporation

NTN #

Telephone and Fax number

ZAKAT DEDUCTION:

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Instruction of zakat deduction is to be given. However zakat deduction is compulsory in case

of PLS/SAVING ACCOUNTS. But if someone, before the Ramzan submit the Affidavit

form then Zakat could not be deducted in the A/C.

DETAILS OF OTHER ACCOUNTS:

Details involve the account number, Bank, and address. However the form is acceptable

without this information.

INTRODUCER:

An applicant has to be introduced by someone. The introducer can only be a person who is an

existing account holder of BAL or an Officer of BAL. The applicant has to provider

following information concerning the introducer:

Name

Signature: The signatures are to be verified by an officer.

Account number

Branch

HOLD MAIL ACCOUNT:

In case the account holder does not want to receive any correspondence for any reason the

account is marked as “hold mail account”

SIGNATURE SPECIMEN CARD:

It is card on which specimen of applicant’s 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.

CHEQUE BOOK REQUISITION:

Cheque book is issued to the applicant after filling the cheque book requisition. It contains

the account number issued to the new account holder, serial numbers (range) of cheques in

the book.

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CHECKING THE FORM:

After the applicant fills the application form it is checked for any missing

information.

After checking the form it is stamped. Round stamp is used in case of any

mistakes.

Signatures of the applicant are admitted and that of introducer are verified by

using the “admitted stamp” and “verified stamp” respectively.

GETTING APPROVAL:

The next step is to get the form approved by at least three higher authorities.

ALLOCATING THE ACCOUNT NUMBER:

After the form is approved the account number is allocated to the applicant and

account is opened in the system. Record is maintained in the register as well. The

allocated account number is written on the application form as well as SSC.

INITIAL DEPOSIT:

The applicant is asked to deposit initial amount in the account. The amount is deposited

after filling the pay in slip. The initial deposit amount requirement varies with the nature

of account.

FILLING THE CHEQUE BOOK REQUISITION:

After depositing the amount the requisition slip is filled. Against this requisition slip the

cheque book is issued after verifying the signature of the applicant. Every cheque of the

booklet is stamped with the account holder’s name. The cheque book issued contains a

requisition slip for future use. Record of cheque books issued is maintained in “CHEQUE

BOOK ISSUE REGISTER”.

SCANNING OF SS CARD:

The SS cards are scanned by the Cash Department and entered into the system for future

reference.

LETTER OF THANKS:

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After opening the account two letters of thanks are typed on letterhead of BAL. One is

mailed to the account holder and the second one is sent to the introducer. “This is done

to keep a check on fake introduction”

RECORDS OF APPLICATION FORMS:

All the application forms are kept in record in numerical order.

PHOTO ACCOUNT:

In case the signatures of applicant are shaky or in Urdu or he/she uses thumb impression

a “Photo Account” is opened. In this case a passport size photograph is posted on the SS

card as well as form. All the cheques are to be signed in the presence of a BAL official.

FORM B:

In case of misplacement of cheque book “Form B” is filled. The signatures are verified. A

new cheque book is issued after canceling the old one. A fee of Rs.100 per booklet is

charged. In case of foreign currency account no fee is charged.

CHANGE OF ADDRESS OR TELEPHONE NUMBER:

If the account holder has to change the address or telephone number he can do so on

giving an application on the printed form. The application is filed after making the

changes.

CHANGE OF SIGNATURES OR SIGNATORIES:

The account holder gives an application. A new SS card is issued and after getting the

new signatures of the account holder it is attached to the old one and kept in record. In

case of partnership or company a request signed by all partners or board resolution is

required.

MANDATE FOR THE OPERATION OF THE ACCOUNT:

In case a person wants to authorize another person to operate his account he has to sign a

mandate. By signing this mandate he authorizes that person to sign cheques on his behalf.

The signatures of that person are admitted in the system just like the signatures of any

account holder are admitted i.e. by taking a specimen on “SS CARD”.

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CLOSING OF AN ACCOUNT:

For closing an account balance must be nil for foreign currency, saving and Royal Profit

Accounts and current accounts too.

An account is automatically closed by the system if it remains dormant for 6 months.

Before closing an account a liability form is filled and approved by credit department.

Then if the account holder is not liable to pay any sum to BAL, his account is closed in

the system. Record is entered in the register as well.

STEPS FOR OPENING ACCOUNTS:

After receiving above mentioned documents from customers, steps for opening

accounts are:

a. Account opening form: is filled up (this form contains all the detailed

information about the customer).

b. Specimen signature card: is filled up and required signatures are taken.

c. For issuing cheque book signatures are taken on cheque book requisition slip.

d. In case of change signature from NIC, undertaking perform is assigned by

customer.

e. Online transaction Performa: is filled up.

Maintaining minimum average balance of Rs.100, 000.

No transaction is to be made for greater than Rs.25, 000.

For any transaction of greater amount .02% will be charged.

f. If account holder is unable to signature his/her photo account is opened, thumb

impressions are taken instead of signatures in the Performa of picture account

and pasted his/her two passport size photos in specimen signature card and

account opening form.

g. In case of partnership account filled up a Performa of partnership

account.

h. In case of corporate account filled up a Performa of corporate account.

i. All the documents are attached with account opening form.

j. All the details of customer is entered in computer (and as well as a scanned

copy of specimen signature card is also saved.)

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k. While opening a new account a KYC (Know Your Customer) form is filled up

for each customer. This is a form which contains all the detail of customer and

is filled up to keep record of customer in one page.

l. Account number is given.

(At the end of the week all account opening forms and documents are arranged and attached

account number wise and are bind in a folder.)

BANK ALFALAH ISSUES THE FOLLOWING CHEQUEBOOKS

a. Saving account - 25 leaves

b. Current account - 50 leaves

c. Current account - 25 leaves

d. Foreign currency $ - 10 leaves

e. Foreign currency £ - 10 leaves

f. If account holder does not come to receive his/her cheque book and send any

one else on their own behalf, a photo copy of NIC of that receiver is taken

and issued him/her cheque book and then a letter by TCS is sent to account

holder that this very person have received your cheque book on your behalf.

Customers have to come to receive their first cheque book by their own self,

no one else can receive a first cheque book on the behalf of customer.

INDEMNITY:

In case cheque book has been replaced a Performa is filled up by customer of

indemnity, which is a request for the issuance of new cheque book and as well as

informed bank that “You will be fully indemnified, safe and harmless from any

liability, claim or loss that may arises by the misplacement of my cheque book”.

ATM CARDS:

Procedure is:

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a. ATM cards form and Hillal card Performa are filled up and assigned by

customers, (one copy of original CNIC with clear signatures and picture is

required from customers).

b. Then signatures of customers are verified by officers.

c. After signature’s verification submission summary of ATM cards is prepared.

d. ATM forms, Hillal Performa and submission summary are then sent to area

office.

e. ATM cards are prepared and TCS to customers within a month.

BANK’S STATEMENT:

If customer wants to take his/her bank’s statement (record of customer’s

activities in his/her account) he/she is filled up a Performa for the issuance of bank

statement.

Remittances Department

Transferring of funds from person to person, and from place to place, constitute

the concept of a remittance. Remittance is very important service provided by

banks to customer as well as non-customer. It is not a free service hence is a

continuous source of income for the bank.

PARTIES TO A REMITTANCE

1) 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 bank’s customer.

2) REMITEE

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Also sometimes called the beneficiary, or the payee. The person to whom the remittance

is made. The one who receives the payment.

3) ISSUING BANK

The bank that effect the remittances, through the Demand Drafts, Telegraphic Transfer, or

Mail Transfer.

4) 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)

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MODES OF TRANSFERING FUNDS IN REMITTANCES

1) Demand Draft

2) Telegraphic transfer

3) Mail Transfer

4) Pay Orders

5) Pay Slip

6) Rupee Traveler Cheque

1) DEMAN DRAFT

Demand draft is a written order, drawn by one branch of a bank upon another branch

of the same bank, or upon another bank under special arrangements to pay a certain

sum of money to or to the order of a specified person.

Demand draft is a negotiable instrument.

Demand draft is neither issued payable to bearer nor drawn on branches situated

within the same city.

It is to be insured that the purchaser of Demand Draft is able to at least sign his name.

Thumb impression is not to be accepted on DD. A person unable to sign and not

having an account may be advised to apply for DD through a literate person to sign on

his behalf. To avoid complications DD are not to be issued to Minors.

The followings are the parties to a Draft:

Purchases: Is a person, firm, company or local authority.

Issuing or Drawing Branch: This issues a draft on another branch.

Drawee Branch: Is one on which a draft is drawn.

Payee: Is a person named in the Demand Draft to whom or to whose order the money

is directed to be paid.

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PROCEDURE FOR ISSUANCE OF DRAFTS

i) An application on printed form is obtain for issue of demand draft. It should

be properly filled in and signed by the purchaser.

Before issuing the demand draft it must be seen that the cheque is in order and

sufficient amount is available in the account of the drawer. If the manager is

satisfied with the creditability of the customer, he may issue a demand draft on

application and subsequently must obtain a cheque. Application form should be

used as a credit voucher, where as the cheque is to be as a debit voucher. The

printed number of the cheque in such cases should be reported on the application

form of the customer.

Precautions for Issuance of Drafts:

i) Scrutiny Of application Form:

ii) Rate of commission / charges:

i) Scrutiny Of application Form:

There should be our bank’s 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.

Purchaser’s name address and telephone numbers are complete.

ii) Rate of commission / chargesCommission and other charges should be recovered at the rates mentioned in the

bank’s schedule of charges, as advised from time to time; withholding tax will also be

recovered wherever applicable.

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2) TELEGRAPHIC TRANSFER

Transfer of funds from one branch to another branch of the same bank or upon

other bank under special arrangements for the payment to the beneficiary through

Telegram / Telex / Fax is called a Telegraphic Transfer (TT).

Telegraphic Transfer is not negotiable.

Telegraphic Transfer of funds to a branch situated with in same city should not be

affected.

Remittance can be made for credit of the account of the payee / beneficiary if

maintaining account with the drawee branch or may be paid in cash. If the

customer wants to send amount through TT then he will provide information of

the beneficiary like id card number, name. Then bank will make a credit advice

and send it to branch on which it should be drawn .Now the beneficiary will go to

that branch and show his ID card number and other information and bank will

make TTR and customer will get that amount from cash department.

The followings are the parties to a TT

i) Applicant: A person, firm, company, or local authority etc who

desire to remit funds from one branch to another branch.

ii) Remitting or drawing branch: Which remits the funds on another branch.

iii) Drawee branch: On which TT is issued.

iv) Beneficiary: The person named in the TT whom the money is payable.

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Precautions for Issuance of TT

Full name of payee / beneficiary or account number should be mentioned in the

application form along with his address.

Instruction regarding mode of payment should be obtained i.e. whether the

amount of TT is credited to the payees account or beneficiary should be advised to

receive the amount of the TT from a drawee branch either in cash on proper

identification.

Special Request for Enhancement of cheque

Because there is no real time banking so cheque is scanned and fax that the Head

Office.

3) MAIL TRANSFER

Transfer of funds from one branch to another branch of the same bank within

or outside the city or upon other bank under special arrangement for the payment to

the beneficiary through Mail/ Courier services is called MAIL TRANSFER.

Mail transfer is not negotiable.

The funds remitted by Mail transfer are not payable to bearer.

Like TT , funds can be remitted by MT for the credit of the payee’s Account Or

the payee / beneficiary can be advised to receive the amount from the drawee

branch either on cash on proper identification

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4) PAY ORDER

Payment order is meant for bank’s own payments but in practice these are also

issued to our customer for making payments.

A pay order is written authorization for payment, made in a receipt form

issued and payable by the bank, to the person named and addressed therein on

his giving a proper discharge thereon.

It is issued by and drawn upon and payable by the same branch of the bank.

It is neither transferable nor negotiable and as such it is payable to the payee

named therein.

Pay order cannot be issued to a minor. Sometime bank don’t want to give its

deposits to customer. So in that case pay order is given to that customer and he

can use it for making payments. When customer wants to cash the pay order

then the amount of the pay order will be debited from the bank. If pay order

submit to other bank like MCB then the process of clearing will be adopt.

Following are the parties to a pay order:

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

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

iii) Payee: is a person named therein.

5) PAY SLIP

Pay slip is for payment of branch expenses.

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6) RUPEE TAVELER CHEQUE

BAL always provide to its customer’s different type of services. Which are safe and

quality services. RTC is very popular among the people of the country. The bank provides

RTC in the following categories

1,000

5,000

10,000

Purchases of RTC

The person who wants to purchase RTC is required to fill a form. The form contains

name, address, amount or denomination and other necessary information. The purchaser

deposits the amount in the bank and gets a voucher from the cashier. And then RTC is

providing to the purchaser. Before handing over to the purchaser, signature is taken from

him on the RTC and on the copy of form. BAL rupee traveler’s Cheques are acceptable in

all the branches of BAL in Pakistan.

Features

Following are some features of RTC.

It is acceptable in all the branches of BAL in Pakistan.

In case of lost the purchaser inform to BAL in 24 hours. Then there is no way of

loss of purchaser and his amount is safe.

Available easily in all the branches of BAL Acceptable by major businesses of

Pakistan.

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CLEARING:

It is the procedure for payment and collection of instruments lodged inward or outward

through “State Bank of Pakistan. It is the transfer of funds from one branch of bank to the

other branch of the same bank or the other bank on which the instrument is drawn, without

involving cash through State banks clearing house. The procedure of clearing is facilitated by

NBP (NATIONAL BANK OF PAKISTAN) on the behalf of State Bank of Pakistan The

clearing procedure requires 2 days for completion if it is outward.

CLEARING can be of two types:

1) OUTWARD CLEARING:

All the instruments (i.e. cheques, pay orders, travelers cheques, demand drafts), which are

originated by some other banks, and are presented to the BAL are included in outward

clearing.

2) INWARD CLEARING:

All the instruments, which are originated by BAL and are presented for payment to the bank

by NBP, are part of inward clearing.

STAMPS ON CHEQUES MEANT FOR CLEARING:

CROSSING STAMP:

It is used on all types of cheques. It shows the Branch name of the Bank.

CLEARING STAMP:

It is used on the front side of the cheque and it indicates the presenting date of the

cheques. If the cheques is dishonored and deposited again for clearing, the clearing stamp is

used again with new date of presenting. A cheque cannot be presented without clearing

stamp.

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ENDORSEMENT:

It shows that cheque is meant for outward clearing “Payee’s account only” is to be

credited.

Credit Department

Advances department plays a vital role in the functions of a bank. In BAL its sharing ration in

profit is high. The main source of Advances department is mark up. Their Advances

department is working under the trustworthy, enthusiastic and committed a staff. The efforts

of the staff are providing good services to their customers and getting a good amount for

contributing the overall profit of BAL. The BAL provides loans to customers. These loans are

sanctioned by the head office. There are different types of loans that are provided to

customers. The types are as under.

Current Finance

The bank provides Current Finance for short period less than one year. The customers Pay

markup in current finance on monthly basis. On the expire date of limit he will just pay

principal amount.

Term Finance

Customer utilized the sanction limit or not the markup will be charged on whole amount.

Customer can withdraw whole amount at once.

Different document required for facilities

1) Current Finance

1. Demand promissory note

2. Letter of arrangement

3. Letter of continuity

4. Markup agreement

5. Latter of authority of debit markup

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2) Term finance

1. Demand promissory note

2. Letter of disbursement

3. Letter of arrangement

4. Markup agreement

5. Letter of authority of debit markup

6. letter of installment

Loans to staff members House loan

The house loan is provided to its staff members up to a certain

limit. And up to this limit there is no interest.

Car loan

This is expensive loan and interest is charged on this type of

loan.

Motorcycle loan

Mainly this type of loan is provided to clerical staff. But the

officers can also apply for this loan.

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PEST Analysis Political factors

How to government intervene in the economy specifically, political factors include areas such

as tax policy, labor law, environmental law, trade restrictions, tariffs, and political stability.

Overall economy is suffering form political instability banking sector also face some

problems such as government impose tax on deposits as well as on withdrawal of money .

Economic factors

Include economic growth, interest rates, exchange rates and the inflation rate. These factors

have major impacts on how businesses operate and make decisions. Exchange rates affect the

costs of exporting goods and the supply and price of imported goods in an economy.

The major source of bank’s income is credit and this sector is badly affected due to increasing

mark up on lending due this people hesitate to take loan from banks and this activity become

cause of cut down business which badly affected economy.

Social factors

Include the cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. Trends in social factors affect the demand for a company's products and how that company operates.

Companies may change various management strategies to adapt to these social trends, with

the passage of time and due to social factors banks are more conscious about employees.

They are the assets of a firm they care their heath and provide safety and different assistance

Technological factors

Factors include technological and environmental aspects, such as R&D activity, automation,

technology incentives and the rate of technological change. Technological shifts can affect

costs, quality, and lead to innovation. Banking sector take fully advantage from technology

such as ATM ,online transferring of money now any one can transfer money any where just

on a click.

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\

Ratio Analysis

A) REGULATORY RATIOS

Advances to Deposit Ratio

This ratio is calculated by dividing the amount of advances by deposits. This ratio

shows the relationship of advances to deposits. It means that what is the percentage of

advances to deposit of a bank. Whether the advances are enough to pay its liabilities.

Formula

Advances

Deposits

2009 196,802,164

324,743,389

= 60.60%

2008 192,671,169

300,732,858

= 64.07 %

2007 171,198,992

273,173,841

=62.67 %

Interpretation

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This ratio shows the increasing trend in advancing. Advances should be in compliance with

deposits and in case of excess deposits idol cash becomes a non earning asset which is non

productive.

Cash to deposit Ratio

The ration is calculating by dividing the cash on hand and cash with other banks by

total deposits of the bank. This ratio shows the percentage of cash available as

compared to deposits. This ratio tells that at any time if cash is needed to meet the

liabilities of deposit liabilities to what percentage it is available.

Formula

Cash on hand and cash with other bank

Total Deposit

2009 57,778,651

324,743,389

= 17.79%

2008 54,268,378

300,732,858

= 18%

2007 47,817,116

273,173,841

= 18%

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Interpretation

This ratio is on increasing trend which is unfavorable. This shows that bank is not

proper utilizing its deposits. On the other hand it is safety cushions depositors and investors.

B) CAPITAL ADEQUACY RATIOS

Equity to Assets

This ratio is calculating by dividing shareholder’s equity by total assets.

Formula Shareholder’s equity

Total Assets

2009 19,770,260

389,070,055

=5.08%

2008 14,608,523

348,990,764

= 4.19%

2007 13,766,673

273,173,841

= 5.04%

Interpretation

This ratio shows continuously increasing trend. Increasing equity to assets ratio means that

company’s debt is decreasing and it is getting self sufficient.

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Equity to Deposits

This ratio shows the percentage of shareholder’s equity to total deposit. This ratio is

calculating by shareholder’s equity by total deposits of the bank.

Formula Total Shareholder’s equity

Total Deposits

2009 19,770,260

324,743,389

= 6.09 %

2008 14,608,523

300,732,858

=4.86%

2007 13,766,673

273,173,841

=5.04%

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Interpretation

This ratio shows increasing trend but decrease in 2008 which decrease from 5.04 to 4.86.

This ratio is getting better and better because of the enhanced repaying ability of the bank but

on the other hand if your deposits are more as compared to your equity it shows your

customers’ trust in your organization.

C) EFFICIENCY RATIOS

Deposit to Total Liabilities

The ratio is calculating by dividing total deposits by total liabilities. This ratio shows

the percentage of total deposits to total liabilities which is the major liability of the

bank.

Formula Total Deposits

Total Liabilities

2009 324,743,389

366,936,635

=88.50%

2008 300,732,858

331,946,025

=90.60%

2007 273,173,841

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312,675,308

=87.37%

Interpretation

This ratio increases in 2008 than 2007 and than decrease in 2009 that is negative sign

that bank has less funds to invest. Bank is in sound position to pay liabilities.

Investment to Total Assets

This ratio is calculating by dividing investment by total assets. This ratio shows the

percentage of investment to total assets.

Formula Investment Assets

2009 99,159,957

389,070,055

=25.49%

2008 75,973,238

348,990,764

= 21.77%

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2007 88,491,564

328,895,152

= 26.91%

Interpretation

The investment to total asset indicates the portion of investment in bank’s total assets; in

2008 it is decreasing which is not a favorable trend. This shows that management does not

work properly and efficiently and not utilizing the assets fully by investment. In 2009 when

the ratio increase from 21.77 to 25.49 it mean management is utilizing the asset by

investment.

Leverage Ratio

Debt Ratio

It shows the percentage of total funds obtained from creditors. The debt ratio compares total liabilities to total assets.

Formula Total liabilities

Total assets

2009 366,936,635

389,070,055

= 94.31%

2008 331,946,025

348,990,764

=95.12%

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2007

312,675,308

328,895,152

=95.07%

Interpretation

This ratio shows decreasing trend which is favorable for bank. Creditor would rather

see a low debt ratio because there is greater cushion for creditor losses if the firm goes

to bankrupt.

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Debt equity ratio

Debt equity ratio is important to measure of solvency since a high degree of debt in capital structure to make it difficult for the company to meet interest charges and principal payments at maturity.

Formula Total liabilities

Share holders equity

2009 366,936,635

19,770,260

=18.56

2008 331,946,025

14,608,523

=22.72

2007 312,675,308

13,766,673

=22.71

Interpretation

This ratio shows decreasing trend which is favorable for bank.

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Time interest earned

The time interest earned ratio reflects the number of times before tax earning cover interest expense. It shows how much of a decline in earnings a company can absorb.

Formula earning before interest& taxes Interest expense

2009 24,654,180

20,331,194

=1.21times

2008 1,794,720

20,331,194

=9 times

2007 4,535,552

16,620,963

=27 times

Interpretation

EBIT tells about how many time a company is able to pay its interest .in 2007it was

27times but decrease in 2008 from 27o 09imes but it much poor in 2009that is just

1.21times.

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D) PROFITIBILITY RATIOS

Net Profit Margin

This ratio is calculating by dividing profit after tax by total income. This ratio shows that

what is the percentage of net profit to the total income.

Formula Profit after Tax

Total Income

2009 897,035

40,757,163

=2.20%

2008 1,301,301

36,292,010

=3.59%

2007 3,130,229

31,822,337

=9.84%

Interpretation

This ratio shows decreasing trend which is not favorable this shows management

work inefficiently. Management should make strategy to increase profit ratio to

operate business with great success.

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Operating Profit Margin

This ratio is calculated by dividing the operating profit by total income. This ratio

shows that what is the percentage of operating profit to the total income.

Formula Operating Profit Total Income

2009 1,016,316

40,757,163

= 2.49%

2008 1,794,720

36,292,010

= 4.95%

2007 4,535,552

31,822,337

=14.25%

Interpretation

Operating profit ratio shows the profits of a firm that earn on its income. It is is in

decreasing trend which is alarming situation for management.

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Gross Profit Margin

This ratio is calculated by dividing the gross profit by total income. This ratio shows

that what is the percentage of gross profit to the total income.

Formula Gross Profit Total Income

2009 10,845,052

40,757,163

= 26.61%

2008 15,960,816

36,292,010

= 43.98%

2007 15,201,374

31,822,337

= 47.77%

Interpretation

Gross profit ratio shows the profits of a firm that earn on its income. It is is in

decreasing trend as compared to 2008 which is not good for management.

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Return on Equity

This ratio is calculating by dividing net profit by total equity. This ratio shows that

how much the company is earning on shareholder’s equity.

Formula Net Profit Total Equity

2009 897,035

19,770,260

= 4.54%

2008 1,301,301

14,187,598

= 9.17%

2007 3,130,229

10,252,368

= 30.5%

Interpretation

In 2009 the ratio is 4.54% while it was 9.17% in 2008. This shows that management

is not utilizing its equity in good way. So this is not favorable for bank.

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Return on Total Assets

This ratio is obtained by dividing net profit by total assets. This ratio shows that what

percentage of earning the company is attaining on total assets.

Formula Net Profit Total Assets

2009 897,035

389,070,055

=0.23 %

2008 1,301,301

348,990,764

= 0.37%

2007 3,130,229

328,895,152

=0.95 %

Interpretation

This ratio measure bank ability to utilize its assets to create profit by comparing profit

with assets generates profit. This ratio shows decreasing trend this mean that

management is not properly using its assets

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Price /Earnings Ratio

A measure used in the financial world to illustrate the quantity of something for one share of

a company's stock. Such measures are used in the analysis and valuation of a company. 

Formula Market Price per Share

Earnings per share 2009 10

0.71 =14.08

2008 10

1.41

= 7.09

2007 10

3.92

= 2.55

Interpretation

A valuation ratio of a company's current share price compared to its per-share

earnings.Earnning per share is in increasing trend which shows the company worth.

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BalancsheetDec31,2009 ASSETS

Cash and balances with treasure banks 35,056,012 Balances with other banks 22,722,639Lending to financial institutions 14,947,435Investments 99,159,957Advances 188,042,438Fixed assets 14,492,194Other assets 14,649,380Total 389,070,055

Liabilities

Bills payable 3,766,144 Borrowing 20,653,921 Deposits and other accounts 324,759,752 Sub-ordinate loans 7,570,181 Deferred tax liabilities 179,851 Other liabilities 10,006,786 liabilities against assets 22,133,420

Total 389,070,055

Profit and loss account Dec 31,2009Interest earned 35,561,312Interest expenses (24,654,180)

Provision and bad debts (4,071,527)

Interest income 6,835,605

Other income 5,182,253

Total interest income 12,017,858

Interest expenses (11,001,542)

Profit before tax 1,016,316

Taxation (119,281)

Profit after tax 897,035

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Critical Analysis

Mark up and money come from other general banking and by giving services to customer is

the source income of bank. We can analyze by the above mentioned analysis that income is

decreasing gradually by each year. On the other hand mark up / interest expenses and other

non mark up expenses increased by each year, the increasing trend in non mark up expenses

is much higher in2009 than the previous year’s .The ratio of the expenses of the organization

is more than income. That is why company is losing its profit. The management is required

serious attention to reduce their expenses. There are number of employees who do not

contribute in the productivity of the organization. So these employees may be fired by

providing golden shake hand or retirement benefits. So by this way the salary expenditures

can be reduced. The firm can reduce expenses of refreshment the electricity expenses can

also be reduce by use of fine instead of air conditions which are blowing all the working

time. So that the organization may go to profit side instead of bearing loss.

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SWOT ANALYSISSTRENGHTS

BAL provides its customers a complete range of banking products and services

including retail banking, corporate and institutional banking, trade finance and

consumer finance.

BAL has planned to institute major improvements in customer services and internal

systems to improve efficiency. It also intends to launch innovative products. The bank

is increasing resource mobilization through regular deposit campaigns and

accelerating the process of recovery of outstanding advances.

The Management of ALFALAH Bank Limited (BAL), in order to further improve the

quality of service.

Bank has very good financial resources.

Bank has good brand name.

Banks have competent human resource.

Automated process and procedure.

The services rate is competitive in market.

BAL has attracted most of customers in Pakistan. BAL has attractive and good

Buildings.

Bank is providing best services according to the requirement of the customers

WEAKNESS

Smaller branch network

Some management positions needed are not professional.

Customers having accounts with small amounts are not given same services and

dealing given to those with high accounts.

Swift facility is not available in all the branches.

Human resource and marketing department is not available in all the branches.

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OPPORTUNITIES

Business in market

Branch network

Technology

Better and convenient services to employees and business class.

THREATS

Growing global technological advancement.

Emerging banks

Innovative services of other banks

Change in economic trend

Change in international banking services

PROBLEMS IN BANK ALFALAH

Bank is facing a high tax rate, which affects its profitability and attractiveness for

new entrants.

Middle class and low income group have limited access to bank credit.

Weak internal controls, non-merit based recruitments and high administrative

costs affected the performance of bank.

No proper material of banking was provided during my internship.

The branch, where I did my internship is providing very few customer services.

.

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SUGGESTIONS & RECOMMENDATIONS

The following are the suggestions that I have recommend for the Alfalah bank limited.

The behavior with the customers should be improved.

There is a great need of proper training of employee.

The branch should improve his position to attract more customers.

Also do marketing through internet

Try to establish effective communication between top-level management and

executive.

Effective training and qualified, dutiful and vigilant inspection teams are inducted per

force in the entire bank.

The bank must have to apply the marketing strategies to attract the customers which

are depositors.

Management should distribute work equally among different employees. Some of the

employees are overburdened while some sections are overstaffed.

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Conclusion

The overall analysis indicating that the bank progress has mainly attained through

dedication of employees. We have to compare the ratios analysis which shows overall

performance of the Bank Alfalah Limited ,bank earned higher total income in 2009 as

compared to previous 2 years but net income decrease while deposits also increase the

cause of decrease in net income is higher operating expenses.

The overall profitability position of Bank Alfalah Limited in 2009 is not satisfactory.

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BIBLOGRAPHY

www.bankalfalah.com

www.investopedia.com

www.google.com

www.findfast.com

www.pakistaneconomist.com

www.pakistanbanks.org

www.dawn.com

www.nation.com.pk

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