Intership Final 1

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IslamicBanking Pakistan Limited

FormerlyEmirates global Islamicbank limited


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ACKNOWLEDGMENT

All praises and thanks to Almighty Allah. The Lord and Creator of this universe by

whose power and glory all good things are accomplished. He is also the most merciful, who best

owed on me the potential, ability and an opportunity to work with Islamic Bank.

I would like to present a token of thanks for the staff members of alBaraka Islamic Bank

Pakistan Limited 12-Kaswar Gardazi Road Branch, Multan, who were cooperative to me in the

completion of this report and provide me their complete guidance. As banks are very much

sensitive about their secrecy, even then after taking an understanding, they let me handle their

delicate operations.

I'm also really grateful to Mr. Bari Mahfouz(area manager of bank) who really help me in

each and every step of learning. Without his kind co-operation it will difficult to learn smoothly

and effectively. In clarification of my concepts I specifically thankful to Miss. Tahira Iqbal(Account

opening officer), Harron Malik(Remittance Officer), Hameed(Teller), Miss Sobia(Relationship

manager). Whatever I learnt from them will definitely help me in my professional life ahead.

Thank you so much for being so co-operative and so helpful every time.

In the end, I am thankful to all my teachers and have a lot of prayers for them who give

me the knowledge and make me able to complete my masters degree. Here I have special thanks

for Miss. Faiza whose supervision guided me to complete my internship.


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DEDICATION

I would like to dedicate this accomplishment offline to my beloved and caring

parents, and to my teachers with the support of whom I am standing at this step of

my life stairs.


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Executive Summary

The evolution of AlBaraka Islamic bank Pakistan limited signifies a movement from

concept to reality; a reality to bring about a change in the banking industries of Pakistan; offering

an alternative way of banking; providing people an opportunity to practice beliefs in their

financial matters.

Following privatization, Bank AlBaraka emerged as new identity of Emirates and Albarka

Bank with a revived purpose and commitment. Charged with the strength of Bahrain consortium

the bank has already made significant contributions in building and strengthening both corporate

and retail banking sector in Pakistan.At present the bank has expanded its operations across Pakistan in 74 cities with 89

operational branches. All are Islamic Banking branches. It is pertinent to note that all of its

branches commenced their operations in Real Time Online Mode. Today BankAlBaraka is the

fifth largest Banking operation in Pakistan. Since its inception, it has registered the fastest growth

rate ever witnessed by any Banking operation in Pakistan.

AlBaraka bank continues to grow in a robust manner amidst considerable

volatility in the banking industry. The bank is striving to prosper in terms of financial

returns and the value it continues to provide its shareholders especially when tighter

spreads are exercised and margin are compressed due to high interest rates as a tool to

curb inflationary pressures. The most valuable asset of any financial institution is its

human resource. The training and development centre remains at the helm of impartingtraining and related skills, not to only fresh recruits but also to existing employees. Bank

AlBaraka has in place the state-of-the-art Training and Development Center both in

Lahore and Karachi for equipping the personnel of AlBaraka bank with tools that help


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carve a brighter future. Its philosophy in this regard is that training is indispensable in

not only enhancing organizational effectiveness but also individual job satisfaction.Bank AlBaraka has lined up a number of innovative products. These include AlBaraka Debit cards,

AlBaraka Car Ijarah, Housing Musharakah, AlBaraka, AlBaraka Agri Financing, AlBaraka Phone

banking and online baking. Being an active player in banking sector in Pakistan, they are

confident that with the commitment of their team they will be able to gain the reputation of the

fastest paced financial institution.

To make their banking solutions become accessible to more and more people, they have

embarked upon a rapid expansion program, aiming to provide a networking that makes the

services available to any of their customers in all the major urban centers of Pakistan- with a view

to go international in the near future. With their key indicators of progress already soaring to new

heights, the bank is committed to dedicate all its energies, resources and time to bring higher

value and satisfaction to their customers, employees and shareholders.

The graph of bank is going up and up every year. The ratio of profit is increasing at good

percentage. The bank is serving the people at high level of standard by going according to the

wishes of the customers.

Preface

Internship was my first step in practical life, through which I learned a lot and it has aided me in

being well prepared with valuable experiences that would help me once I entered the

professional life after the completion of my studies.

During the month of 10th March 23rd April 2011, I worked in AlBaraka Islamic bank Pakistan

limited Multan Pakistan. I spend two weeks in each department under hardworking employees of

bank. It was a great experience for me and it helped me in realizing where my potential lies. What

I learned at Bank AlBaraka Pakistan over the weeks was how to maintain the client profile,

account opening, how to make pay orders, receiving of cheques, issue of cheques, how to deal


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customers, how to maintain customer files, handling cash, how credit operations worked under

Islamic banking. This internship has also prepared me for my future career in Financing andmanagement, so this internship has helped me a great deal. The experience has taught me

responsibility, teamwork and I learned a lot regarding the team work. I got to see what practical

life is. This internship overall has been a great experience.

Last part of the report consists of some references and source from where I get information to

complete my report. I think AlBaraka is overall updated due to which I didnt give any kind of

suggestion. Overall I found that AlBaraka is full updated and its overall departments including my

department performance is very well which in short term dont need any kind of improvement.

Finally I want to conclude that AlBaraka is a place where someone dreams comes true using

Islamic modes, and I hope that my overall internship work & experience would be helpful for me

in the near future.


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Table of Contents

Introduction6

History7

Center of management and development.9

Industry Matrix..9

CMD Profile10

Products and Services.11

CMD Team...14

Organizational Structure.15

Major Department.17

Our client..17

Learning and internship experience............................................................................18

Recommendations.19

Bibliography.20


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Introduction

With a vision for unrivalled services, dedication to Islamic principles of banking, increasing

network points, and innovative product line, Al Baraka Bank (Pakistan) Limited is committed to

the Banking Industry in Pakistan.

Al Baraka Bank (Pakistan) Limited (ABPL) is the result of a merger between Al Baraka Islamic

Bank Pakistan (AIBP), the branch operations of Al Baraka Islamic Bank (AIB) Bahrain, a

subsidiary of Al Baraka Banking Group (ABG) Bahrain, and Emirates Global Islamic Bank

(Pakistan). The merged entity commenced operations on November 1st 2010. The merger, a first

in the Islamic Banking sector in Pakistan, positions ABPL to play an important role in further

growing an industry which has witnessed tremendous growth over the last 5 years.

With assets in excess of Rs. 50 billion; a workforce of 1400 professionals and a network of 89

branches in 36 cities and towns pan Pakistan, Al Baraka Bank (Pakistan) Limited is devoted in

providing our customers with a range of Shariah compliant and highly competitive products to

suit their banking needs.

Faced with growing challenges in this rapidly developing market, ABPL strongly relies on itsability to be an effective and efficient market player through renewed focus on superior customer

service, development of Islamic alternatives to conventional financing facilities, and strict

adherence to Shariah rulings and principles.

Al Baraka Bank (Pakistan) Limited, offers a wide array of Islamic financing products such as

Murabaha, Ijarah, Musharakah and Islamic Export Refinance etc., catering to a diverse cross-

section of the economy including the Corporate, SME and Consumer sectors. Moreover, various

Shariah compliant deposit schemes are also available for customers to invest their funds in, along

with a variety of other ancillary services such as online branch banking, ATM/debit card, SMS

banking, and electronic statement of accounts, safe deposit lockers and utility bill payments.

The Pakistan Credit Rating Agency (PACRA) has assigned long-term and short-term rating entity

A, and A2 respectively. These ratings denote a lower expectation of credit risk emanating from a

strong capacity for timely payments of financial commitments. The ratings reflect a strong


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association with the Sponsor group Al Baraka Banking Group that projects a unified corporate

identityOne VisionOne IdentityOne Group.

ABPL is a subsidiary of Al Baraka Banking Group (ABG), a Bahrain Joint Stock Company, listed on

Bahrain and NASDAQ Dubai stock exchanges. It is a leading International Islamic bank with

Standard & Poors long and short-term credit ratings of BBB- and A-3 respectively and offers

retail, corporate and investment banking, and treasury services strictly in accordance with the

principles of Islamic Shariah. The authorized capital of ABG is US$1.5 billion; asset base of

US$15billion and total equity of US$ 1.8 billion. The group has Banking units in 11 countries and

representative office in 2 countries spanning from Europe to MENA and Asia. Presently the focusis to expand into Malaysia, Indonesia and France. The total number of branches of the Al Baraka

Banking Group, including Pakistan, is over 300 branches and growing.

It is a part of our commitment, to put our customers values foremost, hence providing them with

a banking solution that is in line with their beliefs.

History:

Al Baraka Bank (Pakistan) Limited has the honor of being the pioneer of Islamic banking in

Pakistan and has been operating in the country as branches of Al Baraka Islamic Bank Bahrain

since 1991. Over the years, the bank has successfully developed and maintained its identity as

one of the leading providers of a host of banking products and services in strict compliance with

Shariah principles.

Currently operating with 29 branches in 17 major cities of the country, Al Baraka Bank (Pakistan)

Limited offers a wide array of Islamic financing products such as Murabaha, Ijarah, Musharakah

and Islamic Export Refinance, etc., catering to a diverse cross-section of the economy, includingthe Corporate, SME and Consumer sectors. Moreover, various Shariah compliant deposit schemes

are available for customers to invest their funds in, along with a variety of other ancillary services

such as online banking, ATM/debit card, safe deposit lockers and utility bill payments etc.

Al Baraka Bank (Pakistan) Limited is a member of Al Baraka Banking Group (ABG) which is a

Bahraini Joint Stock Company listed on Bahrain and Dubai stock exchanges and one of the well-


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known leading international Islamic banks. Al Baraka Banking Group is committed to expanding

its presence in Pakistan, which is evident from the rapid growth being undertaken by Al Baraka

Bank (Pakistan) Limited in the country and its plans to have its Pakistan operations localized as a

Bank registered in Pakistan, over the next few weeks. Building on the expertise and experience of

its workforce and the growing awareness of Shariah-compliant banking solutions among the

masses, Al Baraka Bank (Pakistan) Limited has successfully developed itself as a major unit of Al

Baraka Banking Group operating in the region, capitalizing on the Group's geographical presence

and high quality research and development in Islamic financial products for its business

expansion in the country. Faced with growing challenges in this rapidly developing market, Al

Baraka Bank (Pakistan) Limited strongly relies on its ability to be an effective and efficientmarket player through renewed focus on superior customer service, development of Islamic

alternatives to conventional financing facilities, and strict adherence to Shariah rulings and

principles.

Al Baraka Banking Group is the biggest Islamic banking group listed on the Bahrain Stock

Exchange in terms of capitalization. It has been rated by Standard & Poor's as BBB- with a short-

term rating of A-3. Al Baraka Banking Group offers retail, corporate and investment banking and

treasury services strictly in accordance with the principles of the Shariah. The authorized capital

of Al Baraka Banking Group is US$1.5 billion, while the total equity amounts to about US$ 1.59

billion. With assets of US$11.2 billion, the Group has a wide geographical presence in the form of

subsidiary banking Units in 12 countries, which in turn provide their services through more than

250 branches. These banking Units are Jordan Islamic Bank/ Jordan, Al Baraka Islamic Bank/

Bahrain, Al Baraka Bank (Pakistan) Limited/ Pakistan, Banque Al Baraka D'Algerie/ Algeria, Al

Baraka Bank Sudan/Sudan, Al Baraka Bank Ltd/ South Africa, Al Baraka Bank Lebanon/Lebanon

,Bank Et-Tamweel Al- Tunisi Al Saudi/ Tunisia, The Egyptian Saudi Finance Bank/Egypt, Al

Baraka Turk Participation Bank/Turkey, Al Baraka Bank Syria (under establishment), and

representative office, Indonesia.


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Our Core Values:

PARTNERSHIP - Our shared beliefs create strong bonds that form the basis of long termrelationships with customers and staff.

DRIVEN - We have the energy and perservance it will take to make an impact in ourcustomers lives and for the greater good of the society.

NEIGHBOURLY - We value and respect the communities we serve. Our doors are alwaysopen; our customers always experience a warm-hearted, hospitable welcome and

accommodating service.

PEACE OF MIND - Our customers are rest assured that their financial interests are beingmanaged by us to the highest ethical standards.

COMPANY MANAGEMENT SYSTEM

Management means the administration and the governing body that is concerning the whole

organization. All the decision and strategies are been proposed and evaluated the management of

the organization. At Bank Alfalah, the management is pretty strong and there is lot centralization

in the whole network of the bank. The management at Bank Alfalah has been divided into 3 major

parts. i-e, Board of Directors, the Top management, and the group of middle managers,

supervisors and the employees.

Board of Directors:

Mr. Adnan Ahmed Yousif, Chairman Representing Al Baraka Islamic Bank B.S.C.(c)

Mr. Tariq Mahmood Kazim, Deputy Chairman Representing Al Baraka Islamic Bank B.S.C.(c)

Mr. Shafqaat Ahmed, Chief Executive OfficerRepresenting Al Baraka Bank (Pakistan)

Limited

Mr. Abdulrahman Shehab, Director Representing Al Baraka Islamic Bank B.S.C.(c)

Mr. Nadeem Amjad Khan, Director Representing Al Baraka Islamic Bank B.S.C.(c)

Mr. Syed Tariq Hussain, Director Representing Emirates Financial Holding LLC


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Products and services

Striving to develop and an integrated Islamic Financial System. Compliance with the rules and

principles of Islamic Shariah is the core of the banking and financial activities of the Bank. To this

end, AlBaraka has successfully sought the advice and expertise of Islamic scholars acclaimed for

their knowledge and piety from all over the Islamic world to guide its path and monitor its

performance. The Banks activities and operations are regularly scrutinized by its Shariah

Advisory Board.

Al-Baraka Islamic Bank in Pakistan offers a comprehensive range of banking

products and services. They are:

Savings and Current Accounts Term Deposit Accounts Khazana Accounts Incentive Accounts Murabaha Investment Accounts Housing Musharakah Demand Drafts Letters of Credit (L/C) Letter of Guarantee Travelers Cheque Pay order Foreign Remittance Islamic Export Financing Foreign Currency Accounts (FCAs) ATM Network Lockers Utility Bills


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lump sum or may be based on a percentage. Uses of Murabaha Murabaha can be used in

following conditions:Short / Medium / Long Term Finance for:

Raw material Inventory Equipment Asset financing Import financing Export financing (Pre shipment) Consumer goods financing House financing Vehicle financing Land financing Shop financing PC financing

Ijarah

"Ijarah" is a term of Islamic Fiqh. Lexically, it means 'to give something on rent'. In the Islamic

jurisprudence, the term 'Ijarah' is used for two different situations. In the first place, it means 'to

employ the services of a person on wages given to him as a consideration for his hired services."

The employer is called 'mustajir' while the employee is called 'ajir'. Therefore, if A has employed

B in his office as a manager or as a clerk on a monthly salary, A is mustajir, and B is an ajir.

Similarly, if A has hired the services of a porter to carry his baggage to the airport, A is a mustajir

while the

porter is an ajir, and in both cases the transaction between the parties is termed as Ijarah. This

type of Ijarah includes every transaction where the services of a person are hired by someone

else.


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Departmentalization

The Al-Baraka Islamic Bank has number of interrelated departments that works together t o

a c h i e v e t h e s p e c i f i c g o a l s a n d o b j e c t i v e s o f t h e o r g a n i z a t i o n . T h e A I B h a s

b u i l t a hierarchical system that includes the sub departments. The AIBs exiting system includes

following departments.

1. Cash department

2. Clearing /Remittance department

3. Advances department(Credits)

All these departments come under the operations, which is headed/ controlled by

th e Manager Operations.

1. Cash Department:Basically this department is the pillar of the whole banking system. This is the

department which initiates the relationship between the customer and the bank. Here it the

responsibility of the officer that there is no element of fraud by the customer. For this purpose the

bank fulfills the KYC (Know Your Customer) policy related regulations issued by SBP.

In this department issuances of cheque books and lockers operations are also part of operation.

These are the faster ways to transfer money. The following procedures are fulfilled in thisregard:-

Check the test numbers at the arrival Verify the signatures of the bank official.


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d) HypothecationWhen property in the shape of goods is charged as security for a loan form

t he b an k t h e o w n e r s h i p a n d p o s s e s s i o n i s l e f t w i t h t h e b o r r o w e r , t h e

goods are said to be Hypothecated The essence of hypothecation is that neither

th e pro pe rt y in the go od s not the possession of them are possession is left with the

borrower, the goods are said to be Hy pot hec ate d the e sse nce of hyp oth eca tion is tha t

n e i t h e r t h e pr ope r t y i n t h e goods n ot t h e posse ss i on of t h e m a r e posse sse d

by the len der , but the sec uri ty is granted by means of letter of hypothecation,

which usually provides for a bankers charge on the hypothecation goods.

e) PledgeI n a p l e d g e t h e o w n e r s h i p r e m a i n s w i t h p l e d g e , b u t t h e p l e d g e h a s

t h e e x c l u s i v e possession of property until the advance is repaid in full. While in case of the

default the pledge has the power of sale after giving due notice.

f) Promissory NoteSometimes promissory note is also accepted as a security, "A promissory note is an

instruments in writing containing an unconditional undertaking signed by the maker, to pay on

demand or at a fixed or determinable future time a certain sum of money only, to or to the order

of certain persons, or to the bearer or the instrument." A promissory note is incomplete until has

been delivered to payee or the bearer. Moreover, the sum promised in a promissory note may be

made by two or more makers who may be liable there on jointly and severally.

3.3.7.2 Consumer Finance Schemes

Following are the modes used for consumer finance.

g) Car IjarahAlB provide the facilities of car Ijarah/leasing to his customer. AlB provided fund up to

4 million to his customer for the period of 2 to 5 year. No interest concept is involved; therefore

profit margin is not announced before transaction .finance on the concept of asset based

financing. Therefore no chance of default for bank.


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Learning / Internship Experience

Experience at AlBaraka Bank

When I was first joined AlBaraka, I was much clear about my duties. This was because my

terms of reference are cleared very much. Everything is pre scheduled. I work with under every

department head that help in clearing my concepts relating to bank. I learn many things over

there.

Responsibilities at AlBaraka Bank:

During my six weeks of internship, I performed some responsibilities which added to my

experience and learning. All the tasks that I executed gave me a sense of responsibility.

Following responsibilities were delegated to me during my internship:

Account opening Account closing Issuance of cheque book Maintainece of lockers Handling of cash Remittance/Clearing Credit operations Marketing


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Account Opening:

First duty that I was performing in AlBaraka is opening of account. It includes the customer

request for opening account, filling account opening form with all required documents.

Required documents are different for different entities. For example individual, sole proprietor,

partnership, public limited, private limited. In account opening KYC (know your customer)

form is very important. This form helps in judging the customer. Either customer is the right

person or it involves in any type of criminal activities. When account is opened, Business

relation number (BR) allocated for that particular customer in system. This BR number

becomes the identity of customer in system and documents. After branch manager approval,

these documents send RSD (Retail Service Department) by scanning. RSD check all documents

and advice the account number to customer & request him/her to make initial deposit at cash

counter.

When account has been opened all documents send to RSD through courier with one SS Card

other one for branch record. RSD Prepare Thank you letter for customer and introducer and

mail these through courier. File copy of these letters & courier slip along with account opening

from. File the account opening from in the "Customer Account Filing Cabinet" with all

documents in box file/paste file in serial order. Send specimen signature card for scanning to

operations department.

Account Closing:

If customer wants to close his account, he will fill the form of account closing and tell the

reason of it. Customer returns the cheque book and ATM card.

Verify Customer signature affix date time receive stamp approve by MO, BM and Deduct

charges by passing transfer entry in system. Get the charges transaction supervised. Inquire customer

about the final balance. Provide a single cheque leave & request customer to withdraw the final

amount from cash counter. In case customer wants PO to be issued, request him to fill a PO

issuance application form & tell him about the additional changes for PO. Forward the PO issuance

request to remittance department for issuance. Issue PO for net amount less charges. Handover the

PO to customer after taking his acknowledgment then scan account closure request mail to RSD (check

customer account should be Zero Balance). Retrieve Specimen Signature Card from cabinet/ Vault.

Affix Account Closed stamp on signature specimen card . Write the date & initials. RSD Check


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Requirements:

New issuance:

After verification period from NADRA for NIC verification for opening a new

account, done by head office... Then the customer is called for cheque book. Requisition slip is

signed by the customer. Signatures are verified. Then made a request for new Cheque on Bank

Format and send to Head Office.

If third person comes for the cheque book of the customer bearing an account. His signatures

must be attested by the bearer of the account. When he comes, his name & CNIC number is

written on the requisition & also take Authority letter from customer when the cheque book is

given to him, signatures are taken from him in the receivers space on the Cheque BookRegister.

Maintainece of lockers:

There are three types of lockers.

Small size

Medium size

Large size

Customer can take any type of locker if he has his account in bank.

Small size locker is available with 1500 rent plus key purchase fee (2000) that is not refundable.

If customer maintains his account with average balance of 150,000 then without rent locker canbe used.

In medium, he must maintain his account with average balance of 200,000/- for acquiring lockerfree.

In large, the average balance is 250,000/- needed.


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passes its two copies, one to the main branch of that bank & other to that branch where

cheque was presented, specifying that the cheque was realized or returned. If it is realizedthen the funds are transferred to the NASTRO of the main branch & the branch where it

was presented deducts the main branchs NASTRO & sends an intimation mail.

Stamping atfront and backside is necessary part of clearing.

OutwardAccept cheques deposit slip along with the cheques from the customer. Check that

the amount in words & figure are not same, date nor to be post dated. Cheques are drawn

on same city. Deposit slip is of the same date or not etc. affix banks crossing & clearing

stamps on the cheque & the deposit slip. Hand over the customer copy. Post each cheque

singly & match the amount with the deposit slip. If the limit is over then supervise it by

the MO. At the end of the day generate a clearing list from the system & match the

vouchers with the list and clearing suspense account. Prepare NIFT bundle & a summery

sheet of total clearing cheques & ensure that total matches with the systems clearing

outward figure. Place the bundle in the NIFT bag & seal it with the special plastic. The next

day the cheques having no objections will be cleared & funds will be transferred in the

accounts. If some cheque is returned then return is marked in the system & details are

entered in the return register & a net clearing amount is arrived after the processing of

return & this amount is matched with the net amount of clearing report delivered by

NIFT. The clearing suspense account should be zero at the end of the day.

Inward

Receive clearing bag from NIFT rider & ensure the seal is not tampered. Open the

bag & check that numbers of cheques are equal to the number of cheques mentioned in

the summery report. Separate the cheques & pay orders. Post the cheques in IB system

clearing module & pay order through LR module reversal option. Authorize the posting

which is over limit. Prepare return memo for instruments with insufficient balances for

some other reason & post the entry in the system. Enter the details of return in the cheque


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The AlBaraka follows an unsound advertising strategy. The advertising budget shouldbe increased, and it would be better if an advertising department is opened, instead of

paying big amounts to the advertising agency. They are only focus on their current clients; they do not consider the new

clients/companies, so they must focus on the new companies. Departmental interaction is very important in any organization. They must focus on this

area.

Bibliography:

AlBaraka.comwww.Albaraka.com.pk

CMD Lahore Pakistanwww.cmd.org.pk
http://www.albaraka.com.pk/http://www.albaraka.com.pk/http://www.cmd.org.pk/http://www.cmd.org.pk/http://www.cmd.org.pk/http://www.albaraka.com.pk/

Intership Final 1

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