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Bank Alfalah Limited Table of Contents Executive summary………………………………………………….04 1. Introduction……………………………………………………….05 1.1. Company background (history)…………………………..06 1.2. Objective…………………………………………………..07 1.3. Organizational structure…………………………………..08 1.4. product/services offers……………………………………10 1.4.1. product/services details (A) ……………………..11 1.4.2. product/service details (B)……………………… 12 1.4.2. product/service details (C)……………………… 14 2. Learning & experience…………………………………………….15 2.1. Internship duration & rationale for selection ……………...16 2.2. Details of training department wise/task performed……..17 2.2.1. Task performed (a)………………………………17 2.2.2 Task performed (b)……………………………….22 2.2.3 Task performed ©………………………………...26 2.3. SWOT Analysis of organization………………………….27 2.4. Recommendations………………………………………....29 Conclusion……………………………………………………………...30 References……………………………………………………………..31 Appendix………………………………………………………………32 Acknowledgements …………………………………………………...33 Personal resume………………………………..34 FA10-MBA-130 Page 1

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a) Everyday Accounts opening of new customers b) Dealing with Remittances. c) Making vouchers and balance sheets on daily basis. d) Re-opening dormant accounts and contacting customers. e) Managing the problems and queries of everyday customers as a Customer Relationship Officer. f) Dealing with Credits, Clearings and Collections

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Page 1: Nehl abbasi internship report 2012

Bank Alfalah Limited

Table of Contents

Executive summary………………………………………………….04

1. Introduction……………………………………………………….051.1. Company background (history)…………………………..061.2. Objective…………………………………………………..071.3. Organizational structure…………………………………..081.4. product/services offers……………………………………10

1.4.1. product/services details (A) ……………………..111.4.2. product/service details (B)………………………121.4.2. product/service details (C)………………………14

2. Learning & experience…………………………………………….152.1. Internship duration & rationale for selection……………...162.2. Details of training department wise/task performed……..17

2.2.1. Task performed (a)………………………………172.2.2 Task performed (b)……………………………….222.2.3 Task performed ©………………………………...26

2.3. SWOT Analysis of organization………………………….272.4. Recommendations………………………………………....29

Conclusion……………………………………………………………...30References……………………………………………………………..31Appendix………………………………………………………………32Acknowledgements…………………………………………………...33

Personal resume………………………………..34

INTRODUCTION

FA10-MBA-130 Page 1

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Bank Alfalah Limited

BANK ALFALAH LIMITED (BAL)

Brief History:

Bank Alfalah Limited as its name suggests is a banking organization that provides banking services to the customer and slogan of Bank Alfalah Limited is “The Caring Bank”.Bank Alfalah Limited was incorporated on June 21st, 1992 as a public limited company under the Companies Ordinance 1984. Its banking operations commenced since November 1st, 1997. The bank is engaged in commercial banking and related services as defined in the Banking companies ordinance, 1962. The Bank is currently operating through various branches in Pakistan, Bahrain, Bangladesh & Afghanistan, with the registered office at B.A.Building, I.I.Chundrigar road, Karachi.Since its inception, as the new identity of H.C.E.B after the privatization in 1997, the management of the bank has implemented strategies and policies to carve a distinct position for the bank in the market place.Strengthened with the banking of the Abu Dhabi Group and driven by the

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

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

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

synergies with clients and service providers to ensure uninterrupted services

to its customers. It perceives the requirements of the customers and match

them with quality products and service solutions. During the past five years, it

has emerged as one of the foremost financial institution in the region

endeavoring to meet the needs of tomorrow today. The said group has

invested in Pakistan industry and Abu Dubai group is represented by the

following groups in Pakistan:

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Bank Alfalah Limited

2.2 Vision

To be the premier organization operating locally & internationality that

provides the complete range of financial services to all segments under one

roof.

2.3 Mission

To develop & deliver the most innovative products, manage customer

experience, deliver quality services that contributes to brand strength,

establishes a competitive advantage and enhances profitability, thus providing

value to the stakeholders of the bank.

Goals & Objectives:

In Bank Alfalah limited, while certain initiatives are nearing completion, new

initiatives have been launched thus depicting BAL’s continuous desire to

improve the ways of doing business. The most prominent being the

information technology initiative which is aimed to improve quality offerings.

BAL is fully aware of the developments taking place in the world, as well as

the changes occurring in the economic and social condition within the country.

The bank is determined to meet new challenges by redefining its goals and

strategy as well as by the adjustment of its operational policies.

The bank planning to institute major improvements, especially in customer

service launch innovative products to ensure that the bank continues to play a

dynamic role in the development of the country.

2.7 Branches of Bank Alfalah Limited

The Bank is fully aware that the branch network has direct implications on the

services that it provides to its customers. We offer services through a network

of 386 branches and 350 state of the art ATMs.

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Bank Alfalah Limited

Conventional braches

Islamic banking braches

Overseas branches

ATM machines

Products & Services offer:

Bank Alfalah limited is offering different types of products and services to fulfill

the needs of different segments of their target market. Operations with

products & services can be described by the following chart.

FA10-MBA-130 Page 4

Operations and Products

General Banking Financial Services

Treasury & Intl. Islamic Banking

Deposit Accounts

Landing and Deposit Rates

Lockers

Remittance

Hilal/Debit Cards

Consumer Finance

Structured Finance

Trade Finance

Lease Finance

SME

Agriculture Finance

Credit Cards

Home loans

Auto/Vehicles loans

Prepaid Cards

Debit Card

Money Market

Forex Market

Correspondent Banking

Nestro Account

Home Remittance

Money Gram

Personal Banking

Corporate Banking

Consumer Banking

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Bank Alfalah Limited

Figure 2.

2.8 Organizational Structure:

Bank Alfalah is managed by board of directors who are commanded by

chairman. Afterward, CEO and COO controlled bank operations through

group heads and general mangers of different division. BAL organizational

structure could be described by following chart.

FA10-MBA-130 Page 5

Chairman

Board of Directors

Chief Executive Officer

Chief Operating Officer

Group Heads Chief Compliance Officer

Credit

Islamic Banking

Retail & Middle Market, North

Retail & Middle Market, South

Corporate & Investment Banking

Consumer Finance

Audit and Inspection

Technology & Operations

Chief Financial Officer

Operations

Learning

GM (HR & QA)

GM (Strategic Planning)

GM (Legal & Company Secretary)

GM (Risk Management)

GM (Information Technology)

Retail & Middle Market, Central GM (Establishment & Administration)

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Bank Alfalah Limited

Jhelum Branch

Bank Alfalah Limited I-8 Branch has been established in I-8 Markaz,

Islamabad. It is one the most profitable bank in Islamabad. It was incorporated

on 16th September 2002 and currently located at 67- Kazim Kamal road,

Jhelum Cantt.

Branch Code 0070

Area Office: The Mall Rawalpindi

Area Manager: Talib Rizvi

Branch Manager: Mr. Raja Muhammad Bilal

Manager Operations: Mr. Muhammad Imran Khan

Manager Credits: Mr. Ali Arslan

Contact Number: 0544-610162, 0544-610020

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Bank Alfalah Limited

2.12 SWOT ANALYSIS

SWOT analysis describe the strengths, weakness, opportunities, and threats

of any organization. In SWOT analysis the strength and weakness is related

to the internal environment of the company and the opportunity and threads

are influenced by external environment of the company like industry.

Exploiting an organizations opportunities and strength

Neutralizing it threats

Avoiding or correcting its weakness

SWOT analysis is the key step in design better business strategy in the light

of organization mission, vision, goals & objectives. Managers assess internal

strengths distinctive competencies and weakness and external opportunities

and threats. The goal is to then develop good strategies and exploit

opportunities and strengths neutralize threats and avoid weaknesses. Here I

have applied this very useful technique to identify the strengths, weaknesses,

opportunities and threats of Bank Alfalah.

2.12.1 Strengths of Bank Alfalah Limited

Bank Alfalah Limited has certain strengths which are different from the other

Banks.

1. BAL is the first Muslim Bank of the World

BAL is the first Muslim Bank of the world, which is owned and managed by

its own employees. This is the biggest strength of the Bank. A feeling of

ownership is present in every employee, which not only helps in increasing

the productivity of employees but also creates sincerity with the Bank in

them.

2. High Motivation of Employees

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Bank Alfalah Limited

Strength is the high motivation of employees to their work because they

know that what so ever they do, it will be in their own benefit. They know

that the profit, which they will earn, will be distributed among all the

employees. So they work with high motivation and concentration.

3. Good salary package

Salaries are very reasonable, so the employees are not financially

disturbed and they devote their selves fully to their work.

4. Huge network of branches

They have wide area network in all over the Pakistan, so that they cover a

lot of portion of cash transactions and make customer satisfied.

5. Customer Oriented Bank

The Bank has very strict rules and regulations about the customer’s

complaints. The customers are treated as very special persons in the

Bank.

6. Strong Financial Position

As we can see in the financial statements of the bank, the financial

position of the organization is very sound and its profitability is increasing.

The Earning per share has been increased on a rate of about 50%, which

is a very positive sign.

7. Highly Qualified Employees

The bank has highly qualified and skilled workforce and it has succeeded

to attract the best banking professionals from across the country due to its

growing pace and sound reputation.

8. Conducive Environment

The management of the bank is very much concerned with the

development and improvement of the working environment. The bank has

state of the art and purpose built branches where all the modern

technologies are provided to get the efficiency of the workforce and the

customer satisfaction.

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Bank Alfalah Limited

9. Govt. Support and Encouragement

As the owners of the bank belong to UAE and the type of their investment in

Pakistan is a foreign investment, the govt. is fully supporting the bank

management due to its policy to maximize the foreign investment in the

country, to get the economic prosperity.

10. Fastest Growing Financial Institution

Due to its successful business policies and the strong financial position the

bank has achieved the reputation of fastest growing financial institution in the

country. It has greatly increased the customer’s confidence in the bank.

11. Huge Expansion Plan

Due to its strong financial position the bank has undergone a huge expansion

plan to compete with the existing banks all over the country and with the

passage of time the branch network is expanding at a very good pace.

12. Young and Energetic Workforce

As the bank is a newer one in the country, the bank has an advantage over its

competitors because the majority of its workforce is young and not very much

over aged. Thus the bank is getting maximum output from its young and

energetic workforce by spending comparatively less on their remunerations.

13. Islamic Banking Division

The bank is one of the pioneers of the commercial banks who have started

the Islamic Banking along with their conventional banking. The bank has a

separate network of its Islamic Banking Division which has many branches

across the country and this network is also expanding at a very good pace.

2.12.2 Weaknesses of Bank Alfalah Limited

1. Lack of Entertainment Facilities

No entertainment facilities are available in the Bank when customer goes to

the Bank and wait for a longer time. These facilities can be the newspaper,

magazines, etc.

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Bank Alfalah Limited

2. Advertisement Is Not So Attractive

Advertisement of BAL is not such goods as of other banks.

3. Outlets are Unattractive

Outlook of the some BAL branches is not attractive to the people.

4. All Branches Are Not Fully Centralized

As compare to other private commercial banks the limited branches of BAL

are computerized and centralized.

5. Inexperienced Workforce

As the majority of the workforce consists of young professional, they lack in

their experience. And sometimes lack of experience becomes a hurdle while

serving to the customers. It is the point where they feel difficulty while

competing the other bank, which have a very experienced workforce.

6. Over Work Load On Employees

It was observed in the branch that as compared to huge business the bank is

dealing in, the no. of employees is lesser and thus there is an increased

workload on the employees. Due to this the efficiency of the employees is

reduced.

7. Employees Are Not Very Much Motivated

As discussed before, the workload is high and the employees, especially the

credit department, have to do late sittings to complete their tasks. On the

other hand the bank has revised its salary increments policy to decrease the

increment rate, as a result a decreased motivation level of employees is

observed.

8. Lack Of Self Marketing Department

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Bank Alfalah Limited

In today’s fast growing world, media is an important source for marketing your

products. BAL lacks a self marketing department for advertising its new

product benefits to customers on a large scale.

2.12.3 Opportunities for Bank Alfalah Limited

1. Financial Sector Reforms

The policies of the new government to uplift the economy and pursue financial

sector reforms are expected to yield positive results in the banking industry of

the country. The BAL is very well praised to avail promising opportunities.

2. Attraction for Small Borrowers

As a result of the different steps taken by the Government regarding the

betterment of the economy, small borrowers are attracted to get the financing

and start small businesses. So, the BAL has an opportunity to attract the

customers by giving them attractive schemes.

3. Remittances From Abroad

They have wide area network in all over the Pakistan, if BAL can make it

possible the fast delivery of fund from abroad through online banking, it can

cover the major market of Pakistan which still is capturing by ‘Hundi’.

4. Rapidly Growing Economy

At present the Pakistan’s Economy is growing on a very fast pace. The rapid

growth of economy has resulted in the increase in the growth rate of all

economic sectors especially in the banking sector which is growing at a

fastest speed than ever and in future the growth is expected to increase even

a higher rate.

5. Increased Interest Rates

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Bank Alfalah Limited

The SBP has revised the interest policy and the interest rates have been

linked with the KIBOR rates. Due to which the banks interest rate has been

substantially increased which will greatly increase the banks’ profitability.

6. Mega Projects Financing

As the increase in overall business activity in the country, the investors are

launching various types of Mega Projects especially in housing and textile the

bank has a great opportunity to finance these projects at very profitable term.

7. Huge Demand for Consumer Financing

The increase in per capita income and overall economy has resulted into a

great demand for the consumer financing especially for home finance and car

financing and it is said that this trend will increase more in future. The bank

can earn a lot by focusing on its consumer financing sections.

8. Growing Trend of Islamic Banking

There is a very good growth trend in the Islamic banking in the country and in

the world as well. BAL has the advantage of having full-fledged Islamic

Banking network and the growth in this particular field can be very fruitful for

the bank.

9. Spending Practices of Mass

As the Pakistani’s are known for their extravagant practices, and to fulfill their

funds requirements they don’t hesitate from getting loans from banks. Thus

there is a very good scope for the bank to run successful business in such

circumstances.

2.12.4 Threats for Bank Alfalah Limited

1. Political Influence

First threat is that of political influence. Three boards of directors are of

government. So that they can influence on the decisions of the BAL.

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Bank Alfalah Limited

2. The Continuous Downfall in the Economy

The biggest threat in the banking sector is the continuous downfall of the

country economy since the last few years. If this downfall remains for more

few years then it may be the great hindrance in achieving the Bank’s

objectives.

3. Uncertainty of Economy

Although the economy is growing at a good pace, but there are many

factors which results in the uncertain position of the economy. Such as

political uncertainty, increase in poverty etc. As a result there are

permanent threats of future risks and losses for the bank.

4. High Rate of Inflation

The inflation rate of the country has gone above the 10%. This can result into

an unfavorable situation for the bank. And especially when the ownership of

the bank is UAE based, the net spread for them can substantially decrease.

5. Trend of Mergers

There is a trend of mergers among the banks to become prominent in the

market and to get the maximum market share. This trend can result into the

union of some leading banks which can give tough time to the bank and it will

become difficult for the bank to compete with them.

6. Privatization of Banks

Due to its privatization policy, the govt. is privatizing the state owned banks.

The change in management may result in the increase in the efficiency and

productivity of the banks. Thus it can become a threat for the bank.

7. Risk of Defaults

As discussed earlier that there is a trend of launching mega projects in the

country. And every one is involved in this trend without taking any measure for

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Bank Alfalah Limited

the successfulness of these projects. This can result into the failure of this

project which can make it difficult for the banks to recover their funds from

these defaulters.

8. New Private Banks are being Opened

New Privates Bank coped with emerging new Technology of IT.

2.19.1 Branch Organization Structure

FA10-MBA-130 Page 14

MANAGER OPERATIONS

HUB BRANCH MANAGER

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Bank Alfalah Limited

Chapter 03

LEARNING AS A STUDENT INTERN

FA10-MBA-130 Page 15

CREDIT DEPARTMENT REMITTANCES

OPERATIONS(CLEARING)

CONSUMER DEPARTMENT

CASH DEPARTMENT

CREDIT OFFICER TELLER

OFFICER OPERATIONS

OFFICER OPERATIONS

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Bank Alfalah Limited

3 INTERNSHIP EXPERIENCE:

I have done internship at the Bank Alfalah limited Main Branch Jhelum. My

internship was for the short span of time i.e. six weeks (July 04, 2011 To

August 13, 2011). The tasks performed in the bank are as under:

Names of Departments Where I Got Training

During my stay at Bank Alfalah main branch I worked in the following

departments:

Operations (clearing)

Customer Services

Account opening

Accounts

Car finance

Credits

Their details are as follows:

3.1 INTERNSHIP EXPERIENCE

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Bank Alfalah Limited

3.1.1 Clearing department

It is one of the most important department for

any Bank that not only pays but also collects

cheques from the customers .In BAL main

branch this department is run by Miss Anum

Asif, who performs her duties with more

concentration and devotion as a minor mistake

can cause a big loss to the bank .All the work is

performed through a “clearing house”

3.1.1.1 Clearing House

A place where all the reprensentives of all banks of a city get together to

settle the arrangements of cheque receipts and payments. The advantages of

clearing house are manifold. It prevents the cost and waste involved in

collection each and every cheque and claim which a banker holds against

another across the counter with all the danger of loss in the transit incumbent

upon it.

But now the task is performed by NIFT. (National Institutional Facilitation

Technologies). NIFT is a joint venture between a consortium of six major

banks and private sector. It is responsible for the establishment and

management of automated clearinghouse facilities in Pakistan. NIFT is

proactively involved in the modernization of payment systems in Pakistan.

NIFT offers three types of services namely;

Local Clearing

Same Day Clearing

Intercity Clearing

There are two types of clearing i.e.

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Bank Alfalah Limited

Inward Clearing

Outward Clearing

Many types of clearing stamps are used in the clearing department. Each

stamp has its own significance. Mostly four clearing stamps are used. These

are:

The Clearing Stamp

Stamp For Special Crossing

Stamp For Payee’s Account Credited

Stamp For Endorsement

NIFT delivers Local Inward Cheques early in the morning usually within half

an hour after opening of bank. After receiving the mail, the next step is to post

them and debit the customer’s account. These are actually the cheques of the

same cheque book that was issued by our branch. After it the clearing

process starts.

The process in which reserves or funds are transferred among banks to settle

the accounts of cheques written on one account and deposited into another is

called clearing process. Cheque clearing is the heart and sole of daily banking

activity and the final step in the use of chequeable deposits as the medium of

exchange for conducting transactions in the economy.

NIFT also delivers local as well as intercity cheques for clearing process. The

above mentioned same process is repeated after receiving NIFT inward

intercity cheques. After posting these cheques, Signature Verified stamp is

used to verify the customer’s signature.

3.1.1.2 Inward Return

If all formal requirement of the instruments(cheques, demand draft etc.) are

fulfilled then bank debit the customer account in case of inward clearing but if

anything is missing or not according to the prescribed procedures, the bank

may return the instrument. This is known as Inward Return. There are number

of reason for inward return e.g.

Insufficient Funds

Signature Differ

Post Dated Cheque

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Bank Alfalah Limited

Amount In Words And In Figure Differs

Incorrect Date of Clearing Stamp etc.

3.1.1.3 Inward Bills for Collection

IBC means Inward Bills for Collection. IBC comes into existence due to OBC

means Outward Bills for Collection.

3.1.1.4 Outward Clearing

In outward clearing we collect cheques from the customers and fill the cheque

deposit slips. Then we handover the customer copy of the slip to the

customer. If we receive cheque through mail then in such cases we destroy

customer copy. Our outward clearing contains instruments that can be cleared

via any of the following mode:

Local Clearing

Same Day Clearing

Intercity Clearing

Outward bills for collection

In outward clearing we deliver instruments (e.g. cheques, demand drafts etc.)

through NIFT to the other banks after doing proper stamping on these

instruments. Most commonly used stamps are the following:

The Clearing Stamp

Stamp For Special Crossing

Stamp For Payee’s Account Credited

Stamp For Endorsement

As NIFT is responsible for the establishment and management of automated

clearinghouse facilities in Pakistan. NIFT offers three types of services

namely;

Local Clearing

Same Day Clearing

Intercity Clearing

We use Local Clearing if the instrument is of the same city or specific area

e.g. since our branch is in Jhelum so the area that comes under Local

Clearance is:

Jhelum

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Bank Alfalah Limited

Dina

Saraialamgir

Mandibahuddin Etc.

We use instrument of other banks in local clearing if a bank offers online

clearing such as NIB, Silk bank, Standard Chartered, Faysal Bank etc.

Same Day Clearing can be entertained only by those branches that are

member are same day clearing service.

And in the last Intercity Clearing is the most attractive offer of the NIFT. We

use intercity clearing service if the instrument is of outside the city and the

respective bank does not offer online clearing e.g. HBL, MCB, and NBP etc.

If cheque is clear then we take charges from customer account and recover

Federal Excise Duty as well. If the cheque is not cleared for any reason then

we mark it as return before the day end.

3.1.1.5 Outward Return

In outward return the cheque is returned because of wrong presentation e.g.

clearing stamp not affixed or wrong discharge given on the cheque etc. If the

cheque is retuned for any other reason, then we inform the customer and

deduct the cheque return charges. Most commonly reasons associated with

outward return are as:

Insufficient Funds

Signature Differ

Post Dated Cheque

Mutilation not confirmed

Affects not cleared.

Amount In Words And In Figure Differs

Incorrect Date of Clearing Stamp etc.

As there are two types of Bills for Collection i.e.

IBC (Inward Bills For Collection)

OBC (Outward Bills For Collection)

We use OBC if the following conditions fulfill:

The payee branch is not member of NIFT intercity service

When there is heavy amount of instrument and bank wants to generate

income

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Bank Alfalah Limited

It should be remembered that bank sends bills for collection solely at:

Risk and cost of beneficiaries

Are not liable if bills is dishonored

But are liable to either return the Dishonored Bills to the beneficiaries

or pay them the proceeds.

3.1.1.6 Functions of Clearing Department

To transfer, deliver, collect, clear the cheques received from customers

of the branch.

After clearance of cheques post that amount in to the customer’s

account.

Arranges the payment of cheques: arrange the payment of cheque drawn on

the branch and given for collection to any other branch of Alfalah or any other

members or sub members of the local clearing house.

Cheques drawn on collecting bank branch. It is sorted A/C wise,

particulars, dates, and amount. Balance, check signatures, verified &

passed on counter for posting in relevant A/C.

Cheques drawn on other banks. Crossed check by banks crossing

stamps are sorted & dealt with through useful crossing process

Cheques drawn on collecting bank branches in the towns. As soon as

cheque received, these are crossed with bank crossing stamp, sorted

out branch wise & sent to concerned branch.

Clearing of securities

Clearing of dividends

Clearing of payments

Process of depositing and clearing cheques: When a customer comes

and want to deposit the cheque a pay in slip is filled for him consist of

all relevant information about account title, account number, amount of

cheque, signatures of customer etc. The smaller portion of the pay in

slip is handed over to the Depositor and the portion becomes the

regular portion of a credit voucher.

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Bank Alfalah Limited

3.1.2 Customer services

Reception is one the place in bank where one can deal directly with

customers. I spent the almost one week on reception under the supervision

Sir Mujeeb on the reception. Sir Mujeeb is incharge of reception and DBMS

(data base management system).during my stay this position, I learnt how to

fill the different slips, mostly they were cash deposit slips, online slips, slips for

credit card payments and for cheque deposit etc. Each type of slips has its

own core requirements.

I was also assigned the task of receiving mails and record them into the mail

receiving register. As our Jhelum branch is a liability branch (a liability branch

is one whose liability side of the balance sheet is heavy, because it mainly

depend on receiving deposits, as a lot of customers relatives lives in foreign

countries and they remit money from abroad) so lot of customers came for

cash deposit.

Apart from reception I was assigned a job which is computer oriented. In this

job I have to scan daily vouchers of the bank (which include both cash as well

as transfer vouchers).After scanning these vouchers, account number and slip

number are given as input to the computer so that computer sorts them out.

Reception is a place where sometimes lot of customers came immediately

and sometime we remained free. So I learnt how to deal with customers

during busy hours.

3.1.3 Account Opening

3.1.3.1 Account Opening

Account opening is the most important department of any Bank .It plays an

important part in overall banking; it is the fundamental department for any

bank that reflects the competence of any bank. Here in Account Opening

Department I also spent one week under supervision of Miss Maria Pervaiz,

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Bank Alfalah Limited

she is CRO (Customer Relation Officer) and her co-worker Miss Hira

Shahid.Firstly Miss Maria told me types of accounts that are opened in Bank

Alfalah. These are as follows:

Current Account, Saving Account, Royal Profit, And Alfalah Kamyab Karobar.

All these accounts have different amount to open up each type of account and

each account has different level of minimum balance to maintain such

accounts.

First of all I learnt how to fill up AOF (Account Opening Form). I filled up some

AOF and listen to the customers. Every customer brought some new problem

and Miss gave them suitable suggestions. This was very useful for me. in

account opening department duties and responsibilities of the officers were as

follows:

To activate dormant account

To deliver ATM Card to customers

To issue new cheque books

To receive orders for new cheque books

To prepare daily AML (Anti-Money Laundering) report

To prepare daily KYC(Know Your Customer) report

3.1.3.2 Why accounts get Dormanted?

If a customer does not withdraw cash from his/her account through cheque,

ATM Card or any other way means if there is no debit transaction for period of

over 6 months, his/her account get dormanted.

3.13.3 AML (Anti-Money Laundering) Report

It is a system generated report. Anti-money laundering (AML) software is a

type of computer program used by financial institutions to analyze customer

data and detect suspicious transactions. Customers having transaction of

Rs.1000000/- or above either debit or credit, are considered in this report,

because at any time SBP can ask the BANKS that from where your customer

has arranged this huge money or where he disposed off such money.

3.1.3.4 KYC (Know Your Customer)

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KYC (Know Your Customer).Up to great extent it is similar to AML report,

besides other things like personal information e.g. source of earning etc. are

determined in KYC.

3.1.3.5 Purpose of Account Opening

The main purpose behind account opening for a bank is to increase the

deposits of a branch .The more the deposits a bank gets, the more it has the

opportunity to invest its money in long term and short term investments .So

every bank tries to maximize its deposits

3.1.3.6 Documents Required

The following documents are submitted:

Account opening form: (provided by bank) includes the

information about: type of account, nature of account, currency,

client number, ownership. interest details, postal address,

personal account ( saving / joint ) , personal information ,

business account , details of other banking relationships ,

account opening instructions ,smart card information , next of kin

,two signatures of customers are required .

Customer CNIC copy( provided by customer )

NIC authorization form ---by bank NADRA authorized

Business proof or photo copy of passport --- if you are salaried

person then provide salaried slip ,appointment latter ,dealership,

certificate form ,letter pad, visiting card

Signature card

Check book issuance slip

ATM issuance form ( optional )

Letter of thanks ( by bank) ---- delivered to customer’s home

address along with bank stamp ,thanking him for opening

account in branch

KYC ( know your customer) form ( by bank ) ---consist of

information about risk rating sheet , related to individuals in

Pakistan , FAQs , account type ,status , personal information ,

purpose of account .

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3.1.3.7 TYPES OF ACCOUNTS

BAL offers the following type of accounts to its customers:

Current Account

PLS Savings

Royal Profit

Basic Banking

Alfalah Mahana Aamdan

Alfalah Kamyab Karobar

Term Deposit

3.1.3.8 Customer Service Office

In Bank Alfalah the functions of CRO are also performed by the account

opening department and it is controlled by Miss Maria & Miss Hira .Who also

performs the duties of CRO.

3.1.3.9 Responsibilities of CRO

The CRO of the main branch of Bank Alfalah Performs the following duties:

Filling of account opening form

Different amendments in accounts

Balance checking

Issuance of bank statements

Filling of deposit slip

Cheque filling

Issuing / reissuing of ATM card

Attending of customer calls

Locker

Cheque Books

3.1.4 Remittance and Foreign Remittance

Remittance is the transfer of funds from one

account to another .In Bank Alfalah this

department is controlled by Sir. Adeel who

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performs his duties with attention, hard work

and full devotion.

3.1.4.1 Functions Performed By Remittance Department

Remittance department of BAL branch performs the following functions:

3.1.4.1.1 Pay Order

A banker’s cheque (Pay Order) is another payment instrument which is used

by the banks to settle payment obligations on behalf of their customers. This

instrument is guaranteed by the bank for its full value and is similar to a

demand draft. In practice, these instruments are payable at the branch of

issue and are used for payment within the local clearing jurisdiction.

3.1.4.1.2 Demand Draft

A demand draft is a pre paid negotiable instrument, wherein the drawee bank

undertakes to make payment in full when the instrument is presented by the

payee for payment. The demand draft is made payable at a specified branch

of a bank at a specified centre. In order to obtain payment, the beneficiary has

to either present the instrument directly to the branch concerned or have it

collected by his bank through the clearing mechanism.

3.1.4.1.3 Clearance of DD

An officer must write his P.A No. while putting his signature on DD/ pay order.

When DD is made, an advice of the same DD is sent to the branch at which

DD is drawn, after receiving the advice the drawee branch credit the customer

account on presentation of original DD. The drawee branch matches the

signature and P.A No. by comparing it with the book in which specimen of

signature along with their attorney number is given book.

3.1.4.2 Foreign Remittance

Foreign remittance from abroad come in our bank through money gram. In

money gram customers come with some reference code along with their

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original CNIC. After the screening of all the facts, the process of posting

begins which completes after the signature of a senior officer operation. So in

this way the process completes, and then customer can withdraw his cash

from the counter. Miss also told me about demand draft and pay orders. DD is

made when payment is to be made to a person who is outside the city, while

pay order are made for payment within the city.

3.1.5 Credit / Advances

Credit / advance department is the most

important department of BAL as is also an

important source of earnings for the bank in the

form of interest income. Credit department

deals with providing different types of loans to

the customers and business entities. By

providing loan the bank requires some security

or mortgage after assessing the

creditworthiness of a customer. The loan can

only be granted if the customer fulfills all the

bank requirements. There are mainly three types

of loans:

Personal loans

Loans to SME’s

Agricultural loans

The five Principals of Credit are used for ascertaining the financial position of

a person/entity .These is called the 5 C’s Of Credit

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3.1.5.1 The Five C's of Credit

Their details are as follows:

Money lenders are always looking for the best clients to lend their money to.

But what sorts of things do they look for in a company? This is where the 5

C's of Credit comes in - character, capacity, capital, conditions, and collateral.

Character

The character is the client's reputation and reliability.

Capacity

Is your company able to repay the amount borrowed? Your company's cash

flow will be reviewed, and how you intend to repay the loan is established.

Payment history and records on other credit relations will be looked at and

considered. These include both personal and commercial.

Capital

how much money have you invested into your business? The amount of your

own money put into the company portrays a message of confidence and trust.

Conditions

How well is your business currently faring? What will the loan be used for? Is

it for equipment, expansion, or just for financial security? Things such as the

economy, competition, and customer base are noted.

Collateral

If for some reason you cannot provide repayment, collateral will be a

secondary source of repayment. Collateral can include things such as

inventory, equipment, real estate, stocks, accounts receivable, etc. Usually a

signed contract is needed as a guarantee. All these are ascertained before

giving loan to any party.

3.1.5.2 Procedure for Loan

First of all an offer is made to customer. If customer gives acceptance then

BBF (Borrower Basic Facts) sheet is maintained. After obtaining all the

required data, CLP (Credit Line Proposal) is made. These loans are disbursed

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against some security. After fulfilling all the requirements, the case is then

forwarded to the Area Office for final approval. In addition to the primary

security collateral security is also pledged. A Collateral Security is defined as’

When the Lender feels, the security provided by the Borrower is not sufficient

or it may be difficult to recover the dues smoothly, the Lender may ask for

additional security to be provided by the Borrower himself or other on behalf

of the Borrower. In case if any dispute or failure to discharge the loan by the

Borrower, the collateral securities will come in hand to service and recover the

loan/debt.

Personal Loan

Personal loan can be enjoyed by offering Fixed Deposit or Defense Saving

Certificate as security. The bank pledge these security and give credit to the

customer account up to 90% of the market value of such security.

Agricultural Loan

These loans are given against cultivated land.

Loan to SME

Loan to SME is the most complicated task as it requires lot of documentation

and to update stock report, and ratio analysis of the borrower’s business

income statement and balance sheet etc.

3.1.6 Car Finance

Mr. Rashid Zubair is Credit Officer. He deals in Car Financing and Corporate

Finance. The procedure of leasing a car is similar to that of advances. Here

the concept of 5 C’s also applied.

Car finance is a simple Hire Purchase Agreement. It contains the complete

schedule of payments to be made by customer of car leasing. These

installments include the Principal Amount and the Amount of Mark Up and

Registration Charges etc. to be paid by customer. Bank Alfalah usually offers

two standard plans for car leasing; i.e.

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3 year plan

5 year plan

However the customers may ask for customized plan.

The customers have to pay minimum 20% down payment and rest in

installments with mark up.

3.1.6.1 Procedure of Car Finance

Since it is a type of loan so the same criteria is used to test the credibility of

customers i.e. 5 C’s.

After the accomplishment of this basic information about customer, the case is

referred to Area Office, then if the Area Office givers Approval then legal

documents are prepared by the respective officer. The purpose of maintaining

these legal documents is that if the customers at any time intentionally or

unintentionally do not pay installments in time, the bank can enforce the

customer by law and can repossess the asset.

Mr. Fawad who also deals in car leasing told me some issues pertaining to

the clearance of the Car Leasing Process. After the clearance of all the

installments, mark up and late payment charges, penalty if any etc. then NOC

is issued from Lahore branch and it is to be delivered to customer. Having

received the NOC the customer become the real owner of the car and after

this bank has no more right to repossess the car. So in this way the whole

process of car leasing takes place.

3.2 LEARNING AS A STUDENT INTERN

3.2.1 Duties and Accomplishment:

My duties at the bank were of different types. I was rotated in different

departments in different weeks, so that I could get the exposure of

different tasks in a bank. But my duties were always supervised by the

employees of BAL so that I do not make any major mistake, as I was an

internee and didn’t go through the training of three months, as all the

employees of BAL get before joining the bank. But still I had to deal with

all the matters of the bank under their supervision. My duties are

mentioned as follows.

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Customer Services

Account opening

Car finance

Operations (clearing)

Accounts

Credits

3.2.2 New Knowledge Acquired

It was really a great experience for me to work in the practical scenario

because before this internship training I was not aware at all that how the

work is actually done in the organizations. The bank in which I have done

internship is basically a consumer bank providing facilities of consumer and

business loans. They are not dealing with imports and exports. The working

environment of bank was very friendly and cooperative all the seniors really

helped me whenever I asked about anything. In the beginning I assigned the

job of filling different types of slips which include slips for cash deposit,

cheque deposit, slips for online transfer of money, credit card payment slips

etc.  In addition to this I learnt the process of granting loan to the customer

which really requires huge documentation and procedure of car financing. The

most important of all is clearance of cheques; I leant about different types of

cheques and stamps. Every stamp has a unique purpose. I also learnt how to

open an account and the requirement of opening an account along with other

things such as KYC Report and AML Report.

3.2.3 How Experience Impacts My Career

By doing internship for six weeks in Bank Alfalah limited I have gained a

lot of practical experience of doing work, which was really different from

the experience of student life. By doing internship I really gained the

knowledge of banking sector, which I didn’t found so easy, I have learnt

the meaning of responsibility, time management, and professionalism.

Because of this experience now I can decide well that should I opt to join

banking field or should go for another one.

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The real thing which I gained by doing this internship was the confidence

and knowledge, the confidence and knowledge which we gain from our

student life is far more different from this one, because whenever I used

to talk or deal with those bankers who are in banking sector from more

than a decade they used to give me a lot of knowledge to deal with daily

routine matters of banking sector.

Whenever I used to interact with such highly professional bankers, I used

to hesitate in the beginning but with the passage of time I also gained that

much confidence and a little knowledge that I could interact with them

more sense ably.

In the beginning really it was very difficult for me to interact and work with

such formal people in such a formal environment but as I said that I really

leant to work with them and talk to them with the passage of time and now

I think I will not find any difficulty in at least understanding the

environment of organizations and offices when I will start my job in nearby

future. I also feel that I have also understood the basic culture and

environment of professional life which is very important to understand for

doing any kind of job.

Now I really feel that the knowledge which I got by working n BAL for six

weeks will be really helpful to me in future, as I have got the experience of

General banking during my student life in my vacations from university.

This experience will also help me in getting a good job in near future

because now at least I have some experience of work.

3.2.4 Problems Encountered

During my internship at Bank Alfalah I faced some problems. First of all in the

beginning the bank staff did not trust in me, because I was a stranger for

them. Every bank has its own secrets so they do not allow internes to see

highly confidential documents. Secondly some of their valuable customers

used to make feel internees and some junior staff that you are just internes

and bank staff so they did not respect us. Thirdly some of the bank officers

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used to give internees the work of office boys instead of giving some technical

work related to our studies.

Chapter 4

FINDINGS, RECOMMENDATIONS AND CONCLUSION

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4 FINDINGS, RECOMMENDATIONS AND CONCLUSION

In the current scenario of globalization, perfect competition in banking sector

and slump in the word’s economy, when we study the performance of BAL, it

is considered that on the whole the bank is contributing a lot towards the

industrial development and capital formation in the country. All these reflect

the great and valuable efforts on the part of executive command of the bank.

But as it is said that nothing is perfect in this world, this might true in the case

of BAL too.

So far as my own observations are concerned, I have concluded major

drawbacks in the inner current banking system. In addition to that I have also

learnt some disciplinary wrong practices; I discuss these one by one.

4.1 Findings

1. No proper guidance

There are so many customers both literate and illiterate who even do not

know to fill cheque, pay in slips, application forms, etc. They fritter a lot of

precious time of the bank staff.

2. Lengthy Procedure

The book keeping system and filing system of the bank is so lengthy, ring and

time consuming that its output is adversely affected. There is an element of

sluggishness associated with it too.

3. No Equality in Attitude

The behavior of almost all the bankers with all of their customers is not the

same; they pay more attention and good services to some of the customers

and neglect a major portion of them. Some of the customers approach to the

bank officials and get their work done before others. It is definitely not good

practice.

4. Favoritism

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No doubt that bank enhances credit and finance facilities to persons and

parties seeking such financial assistance for the establishment of industries or

trading units, or for enhancement, of already existing projects. But the bank

provides who may also ensure the prepayment of amount advanced by

providing securities arrangements to comer the risk of non-repayment.

Exactly, the bank should do so because later on when the question of

repayment of debt arise the condition of being financially sound providing

securities only can satisfy this question.

Sometimes, some person or group of persons chalk out a very useful, sound

and successful plan goes to the bank and request to advance them credit

facility but are not financially being sound and having no arrangement of

securities. So the bank rejects application of such people. In this way, such

talented persons of country discouraged. This happens usually due to

favoritism, nepotism and red–tapism.

4.2 Recommendations

1. Effective Advertisement

The bank really lacks a sound advertisement, which could attract more and

more people, and should not rest upon existing customers. The bank should

launch luring advertising campaigns throughout the year to promote habit of

saving in the people and to attract and sustain new deposits.

2. Proper Planning

Bank should make a plan to accelerate its recover efforts on war footing and

re-organize the recovery function on global basis. In addition to this, bank

should tighten up control on expenditures, curtail extra lavishness and costs.

Risky schemes should avoid in which return is uncertain. Right people for

right job must be appointed.

3. Division of Labor

If bank wants to get specialized in every walk of banking field then there must

be division of labor to eliminate extra and un-necessary burden on the

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employee of the bank. Working conditions must be improved resulting in

enhancement of efficiency of employee.

4. Check On Expenditures

Un-necessary and non-productive expenditures must be controlled and cut-

down. Lavishness and extra-ordinary protocol for the entertainment of

executives should be curtailed and abolished.

5. Proper Guidance

Bank should adopt such an induction plan that when a customer opens his

account with the bank he should be supplied with a booklet written in simple

language which enables him to know the procedure of filling the cheques, pay

in-slips, etc. It will save a lot of the bank‘s staff precious time during the

conduct of banking business and also ease the customers.

6. Recruitment Procedure

There should be an open invitation to competitive and qualified professional

degree holders and young energetic blood purely on merit basis to get the

efficient and hardworking employee. Political pressures, influential

approaches should be accommodated.

7. Qualitative Advancing /Financing

The bank should avoid as much as possible to give loans to the politicians,

ministers and corrupt people or groups because recovery of loan is almost

impossible for them. The honest and deserving industrialist will always repay

the loan before time to maintain his reputation and credit standing in the eyes

of bank.

8. Job Rotation

Most of the bank employees are sticking to one seat only, with the result that

they become master of one particular job and loose their grip on other

banking operations. In my opinion all the employees should have regular job

experience through job rotation. The promotion policy should be adjusted.

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4.3 Conclusion

Bank Alfalah limited, no doubt, doing well in the field of banking and it is

aimed to provide better services to its customers. It is specially performing its

activities in the customer advances. It has a lot of potential to progress in

future. The bank can do the good job of opening branches in the rural areas

that will not only boost saving but also help the people to raise their standard

of living through these savings. The staff in the bank is found to be very

cooperative towards subordinates. I wish that the bank may progress by leaps

and bound, and keep on providing internship to students with the same

dedication. This internship will help me a lot for my future career plan as I got

a lot of experience and knowledge in the relevant field.

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Bibliography

http://www.bankalfalah.com

Interviews with Bank Staff, particularly with Ms.Anum Asif (Officer

Operations) and Mr.Adil Shazad (Credit Officer).

Annual Report of Bank Alfalah 2010

Bank Alfalah Limited Notes

http://knol.google.com/k/marketing-strategy-differentiating-and-

positioning-the-market-offering#

http://www.easy-marketing-strategies.com/definition-marketing-

strategy.html

http://bankalfalah.com/about/download/BALAnnualReport2010.pdf

http://bankalfalah.com/download/SOC_Jul-Dec2011.pdf

http://in.answers.yahoo.com/question/index?

qid=20100309102056AAB7ZQk

http://www.debtcs.com/articles/credit-analysis.html

http://www.nift.com.pk/

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