Bank Alfalah

Internship Report
On

Bank Alfalah Private Limited

For The Consideration Of,

Prof. jam javed

Incharge Internship Program

Department of information technology
University of Central Punjab Bahawalpur.

Attempt by,
Humayun Khalid
Roll No. 31
Msc iT

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Bank Alfalah

PREFACE

Internship, a practical training, is an integral part of BBA study.

For internship I was sent to Bank Alfalah Limited, Circular Road
Branch, Bahawalpur. It is a six weeks training period in which I tried
my best to get complete knowledge and training in different sections
of the branch. This report contains the necessary information about
the sections and functions ofBank Alfalah. This report is prepared in
simple and understandable format so that ordinary person can also
take benefit from this report.g

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Bank Alfalah

ACKNOWLEDGEMENT

With the name of Allah who is the most beneficial & merciful. I am very
thankful to Allah for his unlimited blessings for me. I have completed this task
with the help of my Allah, my parents & my teachers especially …………I am
very thankful to the staff members of Bank AlfalahCircular Road branch
Bahawalpur for their cooperation & kindness.
They provide me a lot of information & knowledge of foreign exchange with in
very short period of time. I cannot forget their cooperation & kindness, many
regards to them.
I have gain practical knowledge of banking functions & their processes
during my internship. I have tries to get more & more information &
knowledge about banking from senior & experienced employers of Bank
Alfalahduring my internship period.

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Bank Alfalah

Dedication

To my Parents, Siblings, Teachers & Friends. I

cannot forget their cooperation and sacrifices.

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Bank Alfalah

Table of contents
Sr. No. Contents

Executive Summary 6

Introduction of Banking

History of Banking in Pakistan

Board of Directors

MISSION

VISION

Branch Network

Future Outlook

Departments

Products

Information Required to Open an Account:

Clearing

Remittances

Trade Finance Department

Financing

Credit Marketing

Agri-Finance department

Financial Reports

Basic Data & Market Positioning

Balance Sheet Snapshot

Profit & Loss Statement

Key Ratios

SWOT Analysis

Departmental Analysis

Conclusion & Recommendations

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Bank Alfalah

Executive Summary
It’s better to say this report is all about our 1st practical learning (internship program)
with Bank Alfalah Ltd. In all-inclusive report we have discussed every aspect relevant
to bank, which we observed during our internship program. In this report you will find
details about the bank right from its incorporation to current position. Along with it,
the processes, policies and procedures of the bank are also discussed in detail.
During our internship we mainly work in three departments’ credit, auto financing and
general banking. But I discussed all departments’ procedures and policies in detail
here.
The main purpose of internship is to work in practical environment and apply what
you have learned during your studies, these help us to tackle the problem in the real
world scenario using knowledge and skills which we have learned during academic
progress, in this report detailed analysis of the organization has been done and all the
financial, managerial, technical, and strategic aspects has been evaluated to analyze
the current position of organization.
At the end SWOT analysis we done from both organizational point of view as well we
also emphasis this analysis from each departmental point of view also. The conclusion
and recommendation section include the conclusion of overall report in
recommendation we give it from organization as well as branch point of view.

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Bank Alfalah

Introduction of Banking
Origin of Banking

It has not so far been decided as to how the word 'Bank' originated. Some authors
opine that this word is derived from the words 'Bancus' or 'Banque’ that mean a bench.
The explanation of this origin is attributed to the tact that the Jews in Lombardy
transacted the business of money exchange on benches in the market place; and when
the business failed, the ‘Banco’ was destroyed by the people. Incidentally the word
'Bankrupt' is said to have been evolved from this practice.
Other authorities hold the opinion that the word 'Bank’ is derived from the German
word 'Back' which means joint stock fund. Later on, when the Germans occupied
major part of Italy, the word 'Back' was Italianized into 'Bank’.
It is, therefore, not possible to decide as to which of the opinions is correct, for no
record is available to ascertain the validity of any of the opinions.

History of Banking in Pakistan

At the Time of Independence

At the time of independence there were only 487 branches of scheduled banks in
Pakistan. It was impossible for Pakistan to establish a “Central Bank” due to scarcity
of resources and lack of specialized people. So “Reserve Bank of India” continued to
function as the central bank of Pakistan. “State Bank of Pakistan” was established
almost one year after independence that is on July 01, 1948.

Some Important Facts

By June 1948, the number of branches in Pakistan declined from 487 to only 195 due
to huge transfer of assets and deposits across the border. The number of non-Indian
banks were 19 all having small branches in large cities. Their main function was to
enable Pakistani exporters to send out their crops for export to different countries. At
that time there were only two Muslim banks, namely.

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Bank Alfalah

1. Habib Bank Limited

2. Australasia Bank
In 1947 act ordinance, the banking company’s ordinance was passed to safeguard the
interest of customers and bankers. One Indian bank the Imperial Bank of India that
was the representative of the Reserve Bank of India in Pakistan was asked to close its
branches because it was involved in activities against the state and a huge amount (70
corers) was withhold by Indian government.

State Bank of Pakistan

State Bank of Pakistan was promulgated on May 12, 1948 and on July 1948 the State
Bank of Pakistan was actually inaugurated. The first Pakistani note was issued in
October 1948. The State bank of Pakistan had to concentrate on creating a banking
system in the country so that Pakistan can come out of the financial crisis as early as
possible. To achieve this goal another bank i.e. National Bank of Pakistan was
established in 1949. This was a commercial bank and an agent of State Bank of
Pakistan.

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Bank Alfalah

History of Bank Alfalah Ltd:

Bank Alfalah Limited (BAFL) was
Incorporated on June 21st, 1997 as a public limited
company under The Companies Ordinance 1984. Its
banking operations commenced From November 1st,
1997. The bank is engaged in commercial banking and
related services as defined in the Banking companies
ordinance, 1962. The Bank is currently operating through 648 branches in 171 cities,
with the registered office at B.A.Building, I.I.Chundrigar, Karachi. Since its inception,
as the new identity of H.C.E.B after the privatization in 1997, the management of the
bank has implemented strategies and policies to carve a distinct position for the bank
in the market place.
Strengthened with the banking of the Abu Dhabi Group and driven by the strategic
goals set out by its board of management, the Bank has invested in revolutionary
technology to have an extensive range of products and services.
This facilitates their 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 their customers and matches 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 year 2002 has seen BAFL achieving significant success both in terms of portfolio
and customer service. The unfortunate “September 11” incident caused economic
uncertainty and political trouble, however by the grace of almighty ALLAH it has
seen a sizeable increase in the banks client base reflecting the favorable reputation that
bank enjoys in the market place.

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Bank Alfalah

Board of Directors
● H.H. Sheikh Hamdan Bin Mubarak Al Nahayan – Chairman
● Abdulla Nasser Huwaileel Al-Mansoori – Director
● Abdulla Khalil Al Mutawa – Director
● Khalid Mana Saeed Al Otaiba – Director
● Mr. Kamran Y. Mirza – Director
● AtifBajwa – Director & CEO
● Mr. Eftratios Georgios Arapoglou – Director
● Mr. Khalid Qurashi – Director

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Bank Alfalah

VISION
To Inspire and Empower People to do
Things Differently and Shape Their Own
Path in Life and Business.

MISSION
We Look at the Market with Fresh Eyes to
Find New Opportunities, and Seek New
Ways of Enabling our Customers to
Succeed and Advance the World of
Finance.

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Bank Alfalah

Branch Network
An efficient branch network is essential for achieving its target. BAFL has 648
branches in 171 cities to serve the customers at their door front. Bank follows a
strategy of optimum financial and quality human resource location in order to enhance
the performance potential of all its branches.
● Conventional Branches (480 Branches)
● Islamic Banking Branches (157 Branches)
● Overseas Branches (11 Branches)

Future Outlook
The economic future for the country seems brighter with many key indicators moving
in a favorable direction. Investor’s confidence is recovering and entrepreneurial
activity has gained momentum. They will continue to follow strategy based on
business and deposit enhancement and network expansion.

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Bank Alfalah

DEPARTMENTS AT BANK ALFALAH LIMITED, BAHAWALPUR

Given below is the list of departments in Bank Alfalah Limited Bahawalpur, which
was the branch under study:

Departments
● Operations Department
● Remittance Department
● Trade Finance Department (FOREX)
● Credit Cards Department
● Accounts Department
● Home Finance Department
● Car Finance Department
● Agri Finance Department
● Credit Marketing Department
● Credit Administration Department

Products
● Car Finance
● Agri Finance
● Credit Card
● Other Financing Schemes
● Royal Profit
● Royal Group
● Trade Finance

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Bank Alfalah

Major Functional Areas Where the Internship Was Carried Out

Since there exists a number of department in the bank, but as per requirement and
need of the degree and nature of education, following is the list of departments where
I was rotated.
● Operations Department (front office)
● Accounts Department
● Car Finance & Leasing Department
● Credit Administration Department

Operations Department
Operation Department has following segments.
● Account Opening
● Clearing
● Remittance
● Cash
Operations department of the Bank Alfalah Limited is responsible for the overall
operations of the bank.

Accounts Opening

Most important front line department of bank. As an account in charge you should
know the banks products, profit rates, incoming and existing products. Account
department is also sensitive in term of data or personal information of clients does not
logout. If they do soothe the customer will annoyed and will loss the confidence. So
accounts department play its role to secure the customer information.

Basic Types of Account

1. Personal Account
2. Business Account

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Bank Alfalah

Phases in Personal Account Opening

For coming customer who wants to open the account will pass through different
phases of account opening.

Currency of account

There are five types of currencies PKR, USD, GBP, EURO, JPY in which customer
can open an account. He will select only one currency.

TYPES OF ACCOUNTS

There are following types of accounts;

● AlfalahKamyabKarobar
● AlfalahKifayat Monthly Savings Account
● AlfalahMahanaAmdan Term Deposits
● Alfalah Current Account
● Alfalah Savings Account
● Alfalah Royal Profit Account
● Alfalah Basic Banking Account
● Alfalah Foreign Currency Accounts
● Alfalah Care Senior Citizen’s Savings Account

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Bank Alfalah

AlfalahKamyabKarobar
Enjoy unmatched accessibility to funds anywhere in Pakistan with a host of free
services. With AlfalahKamyabKarobar Account, you grow your business while we
take care of your banking needs.

Features & Benefits

● Free online funds transfer through any Bank Alfalah branches

● Free cheque book, pay orders and demand drafts
● Free online cash withdrawal and deposit transactions
● SMS alerts on every transaction
● Up to 90% financing facility on deposited amount
● Debit/ATM Card VISA accepted at over 30 million outlets and more than 2
million ATMs worldwide

AlfalahKifayat Monthly Savings Account

If you are looking at earn monthly profits while enjoying ease and access to your
growing savings at all times? AlfalahKifayat Savings Account is what you are looking
for!

Features

● Earn profit of up to 7%* per annum

● Profit is calculated on monthly average balance and paid every month
● Unlimited facility for cash deposit and withdrawal
● Minimum monthly balance requirement of Rs. 10,000 only
● Free monthly e-statements
● SMS alerts for every transaction

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Bank Alfalah

● Convenience of online banking across all Bank Alfalah branches nationwide,

with no charges within city
● VISA ATM/Debit Card accepted at more than 4500 1-Link network ATMs and
over 30 million outlets and more than 2 million ATMs worldwide.

AlfalahMahanaAmdan Term Deposits

If you looking to earn high rate of returns on your fixed deposits with the benefit of
monthly profits, then AlfalahMahanaAmdan is best suited for you.

Features and Benefits

● Invest with a minimum deposit of Rs. 50,000 for1 year term deposit &Rs.
100,000 for 3 years term deposit
● Attractive rate of 8.5%* on 1 year term deposit & 9%* on 3 year term deposit
● Profit paid every month
● Financing facility up to 90% of the deposited amount
● Visa ATM/Debit Card accepted at more than 4500 1-Link network ATMs in
Pakistan and over 30 million outlets and over 2 million ATMs worldwide

Alfalah Current Account

Enjoy your everyday banking needs with absolute ease through our non-interest
bearing Current Account, giving you instant access to your cash from any branch
across our growing network.

Features & Benefits

● Minimum monthly balance requirement of Rs. 5,000 only.

● No restriction on number of monthly deposit or withdrawal transactions.
● Easy access to funds through cheque book and VISA Debit/ATM Card that can
be used globally at over 30 million outlets and at more than 2 million ATMs.
● Free online banking across Bank Alfalah branches nationwide

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Bank Alfalah

Alfalah Savings Account

Enjoy your basic banking needs with complete ease while you also start earning
profits on your savings for a more protected tomorrow.

Features & Benefits

● Open with an initial deposit of Rs 100 only

● No monthly minimum balance requirement
● Profit is calculated on the average balance
● Profit if paid semi-annually
● No restriction on number of monthly deposit or withdrawal transactions
● Easy access to funds through cheque book and VISA Debit/ATM Card that can
be used globally at over 30 million outlets and at more than 2 million ATMs
● Convenience of online banking across all Bank Alfalah branches nationwide

Alfalah Royal Profit Account

If you have a business that deals with large transaction volumes, then our Royal Profit
Account is the best choice to meet your daily financial requirements. It encompasses
the flexible features of a current account whilst also giving you the benefits of a
savings account.

Features & Benefits

● Minimum monthly balance requirement of Rs. 50,000 only

● Profit is calculated on average balance and paid on a monthly basis.
● Higher returns on higher balances
● Unlimited monthly deposit and withdrawal transactions.
● Easy access to funds through your cheque book and VISA Debit/ATM Card
which can be used globally at over 30 million outlets and at more than 1.5
million ATM’s

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Bank Alfalah

● Convenience of online banking across all Bank Alfalah branches nation wide

Alfalah Basic Banking Account

If your basic banking requirements do not require multiple monthly cheque
transactions, then our non-interest bearing Basic Banking account may fulfill your day
to day banking needs with no minimum balance requirement or restrictions on ATM
withdrawals.

Features Benefits

● Open with an initial deposit of Rs. 1,000 only

● No monthly minimum balance requirement
● 2 free deposits and 2 free withdrawal transactions every month through cheque
● VISA Debit/ATM Card accepted at over 30 million outlets and more than 1.5
million ATMs worldwide.

Alfalah Foreign Currency Accounts

To manage your foreign currency transactions with security, ease and convenience,
you can place your funds in our Foreign Currency Current and Savings Accounts.

Foreign Currency Current Account

● Non-profit bearing checking account

● Account can be opened in US Dollar, Pound Sterling, Euro or Japanese Yen
● Minimum balance equivalent to 100 (USD, GBP, EUR) or 5,000 Yen
● No restriction on number of monthly deposit or withdrawal transactions.
Foreign Currency Savings Account

● Account can be opened in US Dollar, Pound Sterling, Euro or Japanese Yen

● Minimum balance equivalent to 250 (USD, GBP, EUR) or 10,000 Yen
● Profit is calculated on the daily balance and paid on a semi- annual basis
● No restriction on number of monthly deposit or withdrawal transactions.

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Bank Alfalah

Alfalah Care Senior Citizen’s Savings

Account
With the Bank Alfalah Care Senior Citizen Savings Account, you can rest assured that
all your basic banking needs will be met, while you enjoy high returns every month on
your savings with the flexibility of withdrawing your profits at any time. With the
added benefit of health insurance plans, you save a lot more than just money.

Features

● Enjoy a high rate of return on your savings

● Enjoy monthly profits, calculated on daily balance basis, paid out monthly in
your account
● Open with an initial deposit of just Rs. 1,000, with no service charges
● No restriction on the number of monthly deposits or withdrawals

Accessibility and Convenience

● Convenience of online banking across all Bank Alfalah branches nationwide,

with no charges for within city transactions
● SMS alerts and free e-statements
● Locker facility at special discounted rates*
● Easy access to funds through Cheque Book and Debit Card (Visa) accepted at
more than 30 million outlets and 1.9 million ATMs worldwide
Health Insurance Benefits

As our special Alfalah Care Senior Citizen Account customer, you can choose Health
Insurance plans at premium rates against a range of surgeries and illnesses.

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Bank Alfalah

Debit Card

With Bank Alfalah Debit Card* you don’t need to carry cash where ever you go.
● Fuel up, dine, shop or travel easily with the globally accepted Bank Alfalah
Debit Card (Visa).
● Get SMS alerts on every transaction
● Avail up to 20% discount at selected restaurants and retails stores in Karachi,
Lahore and Islamabad.

Information Required to Open an Account:

Title of account

It includes the name of the person who wants to open the account. Name must be
written in block letters.

Address

It includes the address of the person who is going to open the account.

Personal Account

There are two types of personal account.

● Individual
● Joint
o Individual: If only single person wants to open the account then he will
tick only on Individual box.
o Joint: When more than one person wants to open the account then he will
tick on Joint box. Both individual and joint provide their personal
information like
i) Name
ii) Father name
iii) `Country of residence
iv) Telephone number

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Bank Alfalah

v) N.I.C / Passport number

vi) Date and Place of issue

Nominee / Next of Kin

That portion is important. In case of death or any incident like accident etc. In
order to make money more secure the person who wants to open the account he
tell the name of the person who will owner of his or her money in case of any
incident. After death of that person the bank will contact with that nominee and tell
them that now you are the owner of the money the person who wants to open the
account leave blank that portion than after the death the money will become
ownership of bank.

ZAKAT DEDUCTION

If the person wants that bank deduct the Zakat in his account then he tick on Yes
box. And if he wants “no”, then submit attested copy of affidavit or Declaration.

Introducer (Introduction of new accounts)

As per existing procedure, an introduction is obtained from a customer of the

branch/bank in the account opening form. The signature of introducer is also
verified/ authenticated from bank’s record.

Further steps to be taken and additional inquiries are to be made as under

i. Introduction preferably be obtained in person to establish the authenticity

of introduce otherwise, between introducer and new customer.
ii. Original NIC along with photocopy of the same be obtained and original be
returned after authentication/ certificate photocopy. However, extensive use of
NIC be applied wherever it is applicable.
iii. Other official papers document such as passport, Driving license and Service
identity card bearing signature and photograph of applicant for an account are to
be checked, wherever possible.

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Bank Alfalah

iv. Name, address, signature and other particulars mentioned in Account

Opening Form are tailed with that of appearing in any of the above
documents.
v. Current account is opened on proper introduction preferably by the
Current account holder.
vi. Managers and other holders holding power of Attorney/ IBS /AS May
introduce accounts only for those who are personally known to them and
whose credentials are absolutely clean.

Applicant Signature

Initial Deposit

Initial deposit must be in cash. Cheque may only be accepted, as part of Initial deposit
in the case of undoubted parties and on the personal responsibility of Manager. In all
such cases, the cheque when tendered if uncrossed should be crossed by customer
before being lodged for collection. Cheque should only be issued after the proceeds of
crossed cheque have been actually realized.

Phases in Business Account

1) Currency of Account
2) Type of Account
3) Title of Account
4) Business Address
5) Name
6) Father Name/Husband Name
7) Designation
8) Nationality
9) Country of Residence
10) Contact Number
11) NIC number
12) Type of Organization

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Bank Alfalah

1. Sole proprietorship
2. Partnership
3. Limited Companies
4. Club / society
13) Detail of Other Bank Account
14) Introducer

Custody of cheque books

The cheque books are most sensitive item of the security stationery and due care
should be exercised in their issue process as well as management of their stock.
i) Stock of cheque books must be kept in joint custody of Manager /
Accountant or Second Officer.
ii) Stock of the cheque books must be placed in the Fire Proof Safe.
iii) Cheque book for New Accounts
Cheque book for Existing Accounts Apart from new / fresh Accounts, all subsequent
cheque books shall be issued against the Cheque Book Requisition Slip extracted from
previous cheque book issued to the account holder.

DOCUMENTS REQIURED

● National Identity Card.

● Introducer.
● Business and residential telephone numbers and addresses.
● Required limit of the amount.

Clearing
The process, by which Cheque are exchanged between the collecting and the paying
bank, and the financial settlement, is called “clearing”. In these section two types of
clearing takes place.

● Outward clearing
● Inward clearing

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Bank Alfalah

Inward Clearing
Cheque drew by BAFL customer in favor of non-BAFL customer. If dishonored the
cheque will be treated as return. Following steps are taken for inward clearing

1. The clearing dept. officer along with the NIFT/Clearing Schedules attached
receives Cheque from NIFT.

2. Cheque are sent separately to the concerned dept.

3. The designated officer verifies all particulars from the instruments and the
system for sufficient balance etc. if any technical faults are found; the officer
sends back the instrument with a memorandum stating the reason for return.

4. A copy of the memo is retained as record.

5. If no discrepancy or technical fault is found, the officer at the system posts the
Cheque into the system.

6. Accounts are adjusted accordingly.

7. Cheque returned data is entered into the “O/W return of Inward Clearing”
register.

This register reflects particulars such as:

● Date

● Account no.

● Cheque/bill no.

● Drawn on

● Amount &

● Reason

Returned cheque is given back to NIFT/Clearing Rep. from where they are delivered

back to the original source.

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Bank Alfalah

Outward Clearing
Cheque drawn by non-BAFL customers in favor of BAFL customer and deposited at
one of our branch.If cheque dishonored it will be treated as return. Following steps are
taken for outward clearing.

1. Customer approaches the counter with the instrument and fills in the pay-in-
slip at the counter.

2. Cheques and pay-in-slips bear handed over by the customer to the designated
officer at the counter. After verification officer affixes crossing clearing stamp
on the instrument.

3. The counter slip is handed over to the customer, for record and reference.

4. The officer feeds the data into system. The posting no (OBC #) thus assigned is
written at the back of the cheque and pay in slips.

5. The instruments are received back by the clearing dept. after approval, where
they are arranged in bundles of 100 each. A ticket of NIFT is filled with the
total amount of the bundle is also attached with the same. The bundle is also
handed over to NIFT.

Other Services
● Product information
● Deposit interest rates
● Car Financing
● Consumer Durable Financing
● Account Opening procedure
● Lockers

Online Banking
Bank Alfalah also offers the facility of on-line banking to its customers through its
countrywide network of branches. Customers can use the ATMs or the banking
counters of any branch for day-to-day banking needs, irrespective of branch where
they maintain their accounts.

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Bank Alfalah

ATM
Bank Alfalah through its commitment to provide superior and improved services to its
valued customers has a nationwide network of ATMs. For customer’s convenience,
they now have access to instantaneous cash availability, 24 hours a day, 7 days a
week. Its ATM network is geared up to exploit the latest technology, and is equipped
to meet the highest standards of security and efficiency.
● With new ATM card customer can now:
● Withdraw Cash
● Use their convenient, user-friendly fast cash option
● Make a Balance Inquiry.
● Get an instant printout of account balances
● Get a printout of last transactions (Mini-statement) on the spot.
● Change your PIN (Personal Identification Number).

Remittances
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
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 charged him
for the remittance. He may or may not be the bank’s customer.

REMITEE

Also sometimes called the beneficiary, or the payee.The person to whom the
remittance is made.The one who receives the payment.

ISSUING BANK

The bank that affect the remittances, through the Demand Drafts, Telegraphic
Transfer, or Mail Transfer.

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Bank Alfalah

PAYING BANK

Also known as the drawee branch. The branch on whom the instrument is drawn. It
has to make the payment. (Usually located in a different city or country)

Remittances are fund transfer either in local or foreign currency which can be affected
by way of a TT (telegraphic transfer) and DD (demand draft) etc.
TYPES OF INSTRUMENTS

There are three types of the instruments that are used in funds transfer these are:
● Payment order (PO)
● Demand draft (DD)
● Telegraphic transfer (TT)

Payment Order
It is use within the city. Payment order is meant for bank’s own payments but in
practice these are also issued to our customer for making payments. Following are the
parties to a pay order:
● Purchaser:Is a person, firm, company or local authority
● Issuing / paying branch:which issues / pays on presentation?

● Payee:Is a person named therein.

Demand 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.
● Legal provision as to crossing, endorsement, collection and payment in due
course are similar to those as for Cheque and other negotiable instruments.
● 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

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Bank Alfalah

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 Which issues a draft on another branch?
● Drawee Branch Is one on which a draft is drawn.
● Payees A person named in the Demand Draft to whom or to whose order the
money is directed to be paid.

Telegraphic Transfer
It is also for outstation mean outside the city. The more advantage of TT is it has a fast
speed as compared to DD and obviously the charges of TT are high as compared to
TT.
● 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).

The followings are the parties to a TT

● Applicant A person, firm, company, or local authority etc who desire to remit

funds from one branch to another branch.

● Remitting or drawing branch which remits the funds on another branch.

● Drawee branch on which TT is issued.

● Beneficiary / payee the person named in the TT whom the money is payable.

Accounts Department
One of the most important departments in Bank Alfalah is the accounts department.
Every documents end point is the accounts department to make it safe.

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Bank Alfalah

Any charges / expenses occurring anywhere within the branch are paid through this
department and the payments are sent to the respective payees by debit and credit
vouchers. The credit voucher includes total amount received by bills and a debit
voucher contains information of the tax deductibles and then final credit voucher is
prepared that contain total payable amount. This credit voucher is signed by in charge
accounts and manager operations or manger consumer banking.
One of the main tasks of the accounts department is to sort out the Cheque, deposit
slips, debit/credit computer vouchers and then match the hard with the soft copies.
The hard copy are all those vouchers which were given to accounts department by the
cashiers and those cashiers made an entry of cash deposit or withdrawal the sheet of
these entries are given to the accounts department as well.
All the entries done by the cashiers are entered into the database of the bank and then
prints out of one-day transactions are given to the accounts department and they then
consult it and match the records. They check the dates, amounts, account numbers,
account titles, stale, outdated, expired and postdated Cheque. After they have tackled
it they make bunches of those hard copies and store them. They keep it for 2 months
in their cupboards and they shift it date wise in their storeroom in the form of bunches.

The department works in four levels.

● Data Retrieving
● Data Controlling
● Data Monitoring
● Reports Generation

Data retrieving

Basically, the data retrieving is a function of the accounts department in which they
are to retrieve data as per requirement quickly. They store the data and information i.e.
hard copies and soft copies of vouchers, reports and Cheque etc. after they have done
all the processing required. They are also liable to retrieve and provide that data and
information to the other departments and to the management as required.

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Bank Alfalah

Data controlling

Controlling in a sense that they control the errors and flaws in the data and the
procedures conducted in other departments especially at the cash counters, where the
money is deposited and withdrawn. The department is provided with the Cheques,
credit vouchers and debit vouchers etc. and a soft copy of the computer generated
report. Against all the transaction, the cashiers are supposed to make a computer entry.
The report is prepared by those entries and then sent to the department. It is then
checked and verified, reported and stored by the accounts department.

Data monitoring

Forecasting and budgeting of expenses and profits is the task of the accounts
department and this activity is performed twice a year. The area manager or the chief
manager requires this information only.

Reporting

A hefty important and very basic task accounts department has to perform is reporting.
Reporting is done on daily, weekly, monthly, quarterly, semiannually, and annual
basis.
Some of these reports are required in the branch only, some are required in area office
only and some are to send to the head office Lahore or Karachi. Different types of
reports are prepared on daily basis, weekly and so on.

Trade Finance Department

Trade finance department is also called as the Trade Service Unit. The transfer of
credits to a foreign country to settle debts or accounts between resident of home
country and those of the foreign country or the foreign bills currencies etc. used to
settle such accounts.
Foreign exchange department deals within exports and imports. The bank acts as
exporter as well as importer bank for different parties who are in the business of
export and import. The basic dealings of the department is under three heads:
● Imports
● Exports

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Bank Alfalah

● Financing

Imports
All goods and services brought into a country that were purchased from organization
located in other countries. Financing of the imports is done at
● Post Shipment
● Own Source
Post shipment means when the goods are received. The goods are at the port and now
the customer could not pay to receive those goods. Bank take the mortgage documents
and then if eligible collects those goods and place them in Godowns Customers
gradually and slowly keep on paying the relevant amount and equal to the paid
amount bank handed him over the equivalent goods quantity.
At own source the bank will provide loan to the importers. This loan could be in local
currency where there will be a markup depending upon the bank. It could be 10% to
14% or it could be in foreign currency. The interest rate charged on foreign currency
will be applied under LIBOR (London Inter Bank Offered Rate) rate.

Exports
All goods and services sent from one country to another country. Financing of exports
could be done in three ways:
● Pre Shipment
o Own Source
o ERF (Export Refinance)
● Post Shipment
o Own Source
o ERF (Export Refinance)
● FE-25
Loan is given before the goods are shipped.
Own source means the bank will provide the loan to the customers and the markup
will be charged depending upon the management and rates defined by the bank. It
may be 13 to 14% more or less.

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Bank Alfalah

ERF (Export Refinance) is provided by the SBP, it is another option for the customers
who need loans, SBP proved an opportunity to the customers to take loan less than the
markup offered by the bank for example 14% was offered by the bank, then SBP will
offer ERF @ 9%, 1.5% of which will be the income for the bank and the rest of 7.5 %
will be the part of SBP.
Post shipment means when the goods are received. The goods are at the port and now
the customer could not pay to receive those goods. Bank take the mortgage documents
and then if eligible collects those goods and place them in godowns. Customers
gradually and slowly keep on paying the relevant amount and equal to the paid
amount bank handed him over the equivalent goods quantity.
At own source the bank will provide loan to the importers. This loan could be in local
currency where there will be a markup depending upon the bank. It could be 10% to
14% or it could be in foreign currency. The interest rate charged on foreign currency
will be applied under LIBOR (London Inter Bank Offered Rate) rate.
For the exports E-forms are used. Any exporter for exporting the goods should have to
fill the E-form. This is a legal way to export goods. Banks take part in this activity
between exporters and importers as the State need to keep the record of what is going
out and what is coming in. These E-forms have four parts named as:
● Original
● Duplicate
● Triplicate
● Quad-duplicate
Carbon paper E-form is filled by the customer (exporter) whose original copy is
submitted to the Custom office. Duplicate and the triplicate copies of the form are
submitted to the bank. And the quad-duplicate portion of the form is kept by the
customer himself. After the procedure from the customer side is complete the
triplicate copy is sent to the SBP and then the custom and SBP compare the document
for validity and checking.

Financing
Financing is done for the industries and companies doing imports and exports. Both
types of financing is provided by the bank to its customers whether they are exporting

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Bank Alfalah

or importing in any local location or abroad. The account may be in local or foreign
currency. Nostro and Wostro accounts are used on banks level to perform this task.

L / C (Letter of Credit)
Another document involved in trading. ICC (International Chamber of Commerce) is
a platform to deal with imports and exports. S.W.I.F.T (Society for Worldwide Inter
Financial Transaction/ Telecommunication). It is another platform which defines
certain rules and regulations and codes related to ICC. Normally, every L/C contains
information required for trading under certain head codes. L / C’s types are as follows:
● Revocable and Irrevocable
● Transferable
● Confirmed and Unconfirmed
● Assignment of Proceeds
● Revolving
● Standby

Revocable and Irrevocable

A revocable letter of credit can be cancelled or amended by the issuing bank without
any notification to or the consent of the beneficiary. This type of letter of credit is
rarely used because it offers no real assurance to the beneficiary that the letter will, in
fact, be honored.
Irrevocable letters of credit may not be changed in any way. The letter guarantees the
beneficiary that, as long as he conforms to all of terms of the letter for receiving funds,
the bank will issue the funds.

Transferable

A transferable letter of credit is used to transfer the rights and obligations of the
beneficiary to a third party. For instance, a vendor who is unable, for some reason, to
purchase merchandise from the manufacturer and carry out the sale, may name the
manufacturer the beneficiary of a letter of credit. The vendor, in effect, uses the
buyer's letter of credit to guarantee the manufacturer that he will be paid.

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Bank Alfalah

Confirmed and Unconfirmed

An unconfirmed letter of credit is issued, usually by a foreign bank, with no

verification by a bank in the beneficiary's country. Like the revocable letter of credit,
this type of letter offers the beneficiary no real protection if the foreign buyer's bank
fails to honor the buyer's commitment.

Unlike the unconfirmed letter, a confirmed letter adds protection for the seller because
the foreign bank is verified and the funds covered by the letter of credit are guaranteed
by a bank in the beneficiary's own country.
Assignment of Proceeds

Like a transferable letter of credit, an assignment of proceeds is a letter of credit that

allows a third party to be paid in whole or in part. The assignment of proceeds does
not, however, transfer any goods, rights or titles to the third party.

Revolving

A revolving letter of credit is recyclable. The letter may be used several times, for
several identical transactions occurring at different times. If a vendor buys a product
every month from the same seller, purchasing the same amount of product at the same
price, a revolving letter of credit means that a new letter for each transaction is not
needed.

Standby

A standby letter of credit is a form of backup funding.

If the beneficiary is not paid by the buyer, he may withdraw the necessary funds from
the buyer's bank using the standby letter of credit.
The bank is obligated to pay even if the beneficiary and the buyer are involved in a
dispute over the transaction.
More or less than 5 banks are involved in any transaction in which L/ C is used.
● Issuing Bank
● Correspondent Bank
● Beneficiary Bank
● Advisory Bank
● Reimbursing Bank

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Bank Alfalah

Car Finance & leasing department

The major functions of this Car Finance department has to perform in the bank are the
processing and completion of documents for car finance shall be based on the
respective branch. Upon approval of the car finance facility the borrower shall contact
the concerned car finance department for down payment and submission of postdated
Cheques.
The car finance department shall obtain all securities and finance documents from the
customer and ensure its completion. The physical control and safe custody of
securities and documents is vested in car finance department at the respective branch.
Car finance department shall arrange vetting of documents and completion of all legal
formalities in respect of car to be financed.
Car finance department shall ensure that the bank’s approved surveyor and insurance
company surveyor completes valuation of the second hand car and the original
comprehensive valuation reports are obtained. The customer shall obtain
comprehensive insurance policy with all required clauses from the insurance company
on the bank’s approved list for the market value of the car.

Purpose of the car finance department is to facilitate the individual borrowers to

purchase:
● New Cars
● Second Hand Cars
● Facilitate Balance Transfer from Other Banks and Within BAF

Bank does not finance the Cars and other vehicles rather it also lease these products
for the better services and convenience of the customers. A lease is a contract whereby
the owner of an asset (the lesser) grants to another party (the lessee) the exclusive
right to use the asset, usually for an agreed period of time, in exchange for a periodic
fee called rental.

Types of leasing
● Finance Lease

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Bank Alfalah

o Direct Lease
o Sale & Lease Back
● Operating Lease
● Ijara (Islamic mode)

Direct lease

In order to secure a lease following are strictly followed:

● Payment should directly be made in the name of the manufacturer
● The invoice should be raised in the name of the BAF by the manufacturer
● The asset should directly be registered in the name of BAF only

Sale & lease back

Sale and lease back transaction can compensate the following limitations:
● Payment only to manufacturers
● Leasing restriction up to invoice value of Rs.1.0 M Sale and lease back
transaction can compensate the following limitations:
o Payment can be made in the name of the supplier/seller/customer.
o No deduction of WHT (with holding tax) if the payment is made to the
client.

Car Finance
It is not a new product in the market. It has gained importance because of increasing
inflation and increase in the price of motor vehicle. The purchasing power of
consumers is continuously declining; most of the banks are offering car financing. It
helps especially for those borrowers who are able to pay smaller amount by way of
monthly installments of total cost of the motor vehicle. The risk of losses for the bank
is also minimized due to comprehensive insurance cover. Bank allows the vehicles to
be registered in the borrower’s name.

BENEFITS AND FEATURES

● Quickest processing

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Bank Alfalah

● No hidden charges
● Minimum down payment
● Complete repayment at any point of time
● Balance transfer facility (BTF) for existing as well as new clients from other
Banks
● Tenor period ranging from 1 to 5 years.
● Financing of all brand new locally assembled vehicles.
● Financing limit ranging b/w Rs.200,000/- to Rs.2000,000/-

CORPORATE & INDIVIDUAL CAR

LEASING
BAF’s recently introduced car-leasing facility for individuals and corporate sector has
set new dimensions for the product. Now they are provided with the option of either to
get the vehicle leased or financed.

INSURANCE
Renowned and reliable Insurance companies are offering the competitive rates of
Insurance. Pay year insurance premium in advance (at the time of down payment) and
remaining in the subsequent equal monthly installment.

MARKUP
BAFL offering seven years installment for the brand new vehicles. Offering markup
of 17.50% for two years for car loan on brand new vehicles, 18.00% second year and
18.50% for the next three years, (per annum), BAFL offering five years installment
for the brand new imported vehicles. Offering markup of 19.00% for all five years,
(per annum), BAFL offering five years installment for the Brand New Semi
Commercial Vehicles (Local Make).Offering markup of 20.00% for all five years,
(per annum), BAFL offering five years installment for the Second Hand Vehicles.

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Bank Alfalah

Offering markup of 21.00% for all five years, (per annum), BAFL has captivated a
major market share and so is the plan for future.

REPAYMENTS
Easily affordable installments on monthly basis in the form of postdated Cheques will
set free of depositing rental Cheques every month.

SECURITY
Hypothecation of vehicle in the name of the Bank Alfalah Limited.

CO-BORROWER
Acting as a co borrower, will enables family members (spouse, children- 18 year and
above) to avail the financing facility and can get the car registered in their names as
well.

DOCUMENTS REQUIRED
● Copy of NIC
● Last six months bank statement
● Salary certificate (in case of salaried individual)
● Business proof (in case of self-employed)
● Copy of utility bill
● Co borrower NIC copy (if it is a co-borrower case)

WORKING
Following steps are taken by the bank for providing the loan.
● The customers fill the forms.
● After completing the documents bank branch verify all these documents.
● The data provided by the borrower verify (physically) through visits by the
verification officer.
● Then proposal is to be made.
● All the data goes to credit committee for the approval.

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Bank Alfalah

● Documents send to the head office Karachi for checking that either he is a
defaulter of any other bank or not.
● After stamping of data check clear bank call customer for down payment and
signature etc.
● After completing all the documentation letter fax to the insurer and he insure
the car.
● Bank get keys and original documents and sends the delivery order to the
showroom.
● The documents send to ETO (Excise and Taxation Office for registration).
● Car and the registration copy hand over to the customer and the remaining
documents remain in the custody of the customer.
● NOC gives to the customer after completing all the installments.

ELIGIBILITY
A customer is eligible to apply for a car loan if:
● He is between 21_55 years.
● The income should be in excess of three times the monthly installment of the
borrower.
● In case where spouse also working, the income of both of them may be
combined but the loan burden should not exceed 33% of the income.

Credit Administration Department

Credit means belief or trust. “The quality of being credible or trustworthy”. Another
words we can define credit as “trust in one’s integrity in money matters and one’s
ability to meet payment when due”.
The earning of BAFL is chiefly derived from interest charge and discounts. This
department is the revenue generating department. Credit department basically has
three segments.
● Credit marketing department
● Credit administration department
● Trade finance services department

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Bank Alfalah

Credit and advance department deals with extending loans (credit facility) to
customers. State Bank of Pakistan (SBP) has prescribed regulations which are called
“PRUDENTIAL REGULATIONS”. Every bank has to follow these regulations. If
any bank violates the regulations it should be liable for penalties under the core spirit
of SBP PR(S).
The Bank Alfalah limited credit is extended on the basis of these rules and
regulations. These regulations tells the term and conditions under which you can
extend loans to the borrower and to what extent.

CREDIT FACILITIES
At BAL there are two types of credit facilities
● Funded facilities
● Non funded facilities

Funded Facilities

These are the facilities in which there is direct involvement of cash fund. Following
are the funded facilities.
● Current Finance CF
● Term Finance TF
● Finance Against Foreign Bills “FAFB”
● Finance Against Packing and Credit “FAPC”
● Finance Against Imported Merchandise “FIM”
● Finance Against Trust Receipt “FATR”
● Payment Against Document “PAD”

CURRENT FINANCE (CF)

The extensively used financing mode at BAFL is current finance (CF). Current
finance is used to finance both individuals and industries.
Individual take current finance for their personal use while in industries. It is taken for
fulfilling the requirement of working capital.

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Bank Alfalah

TERM FINANCE (TF)

Term finance is for specified time period. Term finance is given for fixed asset
financing.

FINANCE AGAINST FOREIGN BILLS (FAFB)

In FAFB facility exporter take loan from bank on the behalf of their foreign export
bills. Like exporter sends shipment but at that time he needs fund for the operation of
the business. He may go to the bank and surrenders all the documents including L/C,
Bill of lading etc.

FINANCE AGAINST PACKING AND CREDIT (FAPC)

FAPC is taken for the preparation of consignment. It has two forms.
● Pre shipment
● Post shipment

PRE SHIPMENT
Pre-shipment loans are export related working capital financing.

POST SHIPMENT
Post shipment financing is essentially the receivable financing to the exporters till the period
he is out of cash after the shipment.

FINANCE AGAINST IMPORTED MERCHANDISE (FIM)

This facility is allowed against the commodities imported from other countries usually
through letter of credit. Sometime importer does not have enough amounts for paying
the imported merchandise therefore. He request to the bank to pay all dues to the
exporter against the security of imported merchandise. Bank pays the amount and
releases the goods, when the importer pays off its liability partially / fully.

FINANCE AGAINST TRUST RECEIPT (FATR)

Finance is extended upon the trust receipt signed by borrower. Importer has to import
the product. There are three conditions.
● Pay money and get thing
● Get fine facility

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Bank Alfalah

And third is that if that client is trust worthy for bank believing on him based upon his
past record. He releases the goods against the trust receipt. Trust receipt is given to
the bank by the customer. The customer in turn commits that I will pay on such and
such date. Banks pays all taxes and get merchandise and then give it to client. Bank do
charges markup against such financing. FATR is for specific period of time. If client
do not pay with in specified time then bank charges higher per day markup.

PAYMENT AGAINST DOCUMENT (PAD)

Payment against document is made by the banks as payment against L/C comes due
payment is made for imported documents. For example when exporter sends all the
document to importing bank as document reached, importing bank has to make
payment within 24 hour if the importer does not pays then bank charges markup per
day.

Non Funded Facilities

The facilities when there is no direct involvement of banks fund. Following are the
non-funded facilities.
● Letter of credit L/C
● Letter of Guarantee L/G

LETTER OF CREDIT
Importer bank issues a document on request stating that it will pay the exporter when
exporter fulfill the terms of letter of credit L/C is off two types.
● Sight L/C
● Usance L/C

SIGHT L/C
Requires the importer / importing bank to pay as soon as it receives the clean
documents from exporter.

USANCE L/C
It extends time period (typically 60, 90, 120 days) to importing bank for payment.
After specified time period importer have to pay.

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Bank Alfalah

Letter of guarantee “L/G”. Bank gives guarantee in the behalf of person that I will pay
in case of default.
Taking cognizance of the sustained progression of the bank’s business and inherent
risk factors attached to the expansion, the management felt a need for setting up an
independent Credit Administration Department in the branches. Its main purpose is to
stream line the working of CAD to moderate the chances of losses arising from
incomplete security and documents covering advances.
It is suggested that CAD, headed by a manager is to be set up in branches meeting the
following criteria: aggregate funds and non-fund based credit port-folio of Rs.500 M
and above and the minimum number of borrowing customers being twenty five. The
personnel of CAD are further advised to keep themselves abreast of the latest
instructions/regulations issued from time to time by the head office, SBP and other
regulation bodies.
The overall objective of the department is to provide independent assurance to branch
management and head office credit monitoring divisions that lending activities are
properly controlled and monitored.
Job purpose of a credit administration officer is to ensure that legally enforceable
facilities and security documentation have been obtained and placed under lock and
key monitor credit portfolio through system generated reports and identify and report
exceptions to the monitoring division and ensure approval conditions are met.
In order to minimize the risks involved with the different types of securities covering
advances, certain policy guidelines in this respect have been conveyed through the
means of various circulars and manuals. Some of the significant aspects pertaining to
higher risk securities are elucidated.

Credit Marketing
In this department I have not practiced during my internship. Anyhow this is the most
valuable and important part of the bank. Credit marketing department is basically the
department to deal with the business and the business on the corporate level. They are
not supposed to deal with the individuals. For example if some other organization
want to give credit cards facility to their employees and that organization want to get
the credit cards from the Bank Alfalah then they must have to contact with the credit

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Bank Alfalah

marketing department of Bank Alfalah in this context. This department is called credit
marketing due to the reason that the personnel working over here in this department of
the bank mostly do the field work in searching for the big organization to buy their
products and they introduce to those organizations the new products and services bank
can offer to them.
The focus of this department is how to sell the products. In fact there is only one item
for one individual customer but there is a bulk of items for an organizational entity. So
the bank teams are more curious in finding the potential borrowers from the market
and usually those are the big business entities.
This department deals in enterprise banking. Meaning that they have to deal basically
with the organizations. Now according to the nature and type of organization the rules
and policies are varying. Business organizations are:
● Sales
● Partnership
● Corporation
There are different policies and business rules for the different type of organizations.
To these types of organizations the bank offers the lease, project finance, credit cards,
or finance. The corporate level lending / borrowing / financing money markups are
low as compared to that of the SME’s.
The major sections of the Credit Marketing Department are:
● SME (Small and Medium Enterprises)
● Corporate Banking
● Lease Finance
SME’s are those organizations that have financial turnover of less than Rs.300,
000,000 as per State Bank of Pakistan rules, and the other assumption of the SME’s
are that they have less than 50 employees working in the organization etc.
And the organizations having annual turnover more than Rs.300, 000,000 and having
more than 50 employees working, are supposed to be the corporate business entities
are per decided under the rules presented by the State Bank of Pakistan.

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Bank Alfalah

Agri-Finance department
This department as the name implies is to facilitate the landlords and farmers of our
country. They need money for their crops development and many other purposes
related to agriculture. This department of the Bank Alfalah provides finance to those
needy people so that their crops should be cultivated properly.
The style and procedure of financing the landlords or farmers is the same as that of the
car financing and other financing schemes of the bank except that here there is need to
survey the land (Arazi) of the person who need finance. If the team feels him eligible
for the said loan they after basic requirements and processing the loan to the party /
customer otherwise the applicant are refused.
This department is no more stick to finance money to the landlords or farmers rather
they have started a new scheme of financing for the tractors, for the units that produce
good quality seed, for the irrigation items, for the wells, for the solar energy plants and
for plantation farms as well. This has given the bank more cutting advantage over the
other commercial banks and financial institution of the town. The very basic types of
financing they offer to their customers are:
● Financing for the crops
● Short and long term finance
● Non crop financing
In crop financing simply the finance is provided for the prosperity and well production
of the crops. In short and long term financing, the finance is provided for the irrigation
tools, for the wells digging, for the spray machines, for the tractors and other tools and
machines used in cultivation process. While in non-crop financing, finance is provided
for the animals farms (their artificial reproduction centers, and fist aid centers etc), for
the fishermen.

Important Documents Required For the Loan

● NIC copy of the applicant

● Fresh Photograph of the applicant
● Pass Book Issued From the Food Office
● Two Witness with NIC Copies

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Bank Alfalah

● Two References with Telephone Numbers and NIC Copies

Other Services Provided by Bank

Alfalah Limited
Credit Cards

It is plastic money that is used instead of cash.

It is accepted in more than 130 countries around the globe.
It provides ease to the customers.

FEATURES OF CREDIT CARDS

Following are the characteristics of BAFL VISA Credit Card:
● No joining fee
● No annual fee/renewal fee
● Lowest markup rate
● Cash withdrawal
● Global acceptability
● Revolving credit
● Balance transfer facility
● Free supplementary cards
● 24 hour customer service
● All billing in Pakistani rupees
● Reward points

No Joining FeeIt’s an advantage for the customers that they enjoy free facility of BAFL
VISA Credit Card.
No Annual /Renewal Feeithas a competitive advantage upon all other credit cards in
Pakistan that it has no annual/renewal fee.
Lowest Markup RateIt has a lowest markup rate of 2.25% per month.
Cash WithdrawalCustomer is allowed to withdraw 75% of the assign credit limit from the
BAFL credit card. With drawl charges are 3% or 300 whichever is greater.

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Bank Alfalah

Global AcceptabilityBAFL VISA credit card is almost acceptable in more than 130
countries so it’s a globally accepted.
Revolving CreditRevolving credit means a customer must pay minimum 5% or Rs. 500/-
of the outstanding balance and the remaining amount will be transferred to next
month. If the customer pays partially or minimum then only markup is to be hit and he
will not pay late charges (Late Charges are Rs. 300). Late charges will hit if customer
is not paying any thing.
Balance Transfer FacilityBalance Transfer Facility (BTF) means you can transfer an
amount from any other credit card to BAFL VISA credit card and only 1.5% markup
is to be hit on that amount for the initial one year. Balance transfer amount should not
exceed the limit of the credit card.
Free Supplementary CardsOnlyAlfalah VISA card provides you 6 free supplementary cards
for your spouse, children, siblings and parents who are more than 18 years. It is just
like a joint account. Supplementary always shares with the basic cardholder. Basic
cardholder has a choice to specify the limit for supplementary and the most important
thing is that bill always be paid by basic cardholder in case of supplementary.
24-Hour Customer ServiceOur 24-hour service helps you and assists you in activating a
card; answering your queries and reporting have stolen cards.
All Billing in Pakistani Rupees whether you make transactions in dollars or whatever for the
convenience of customers always paid bills in Pakistani rupees.
FortunesAlfalah visa offers you fortunes, a reward point that allows you to earn points
on every rupee you spends on your card. You can accumulate and exchange the
fortune points earned for gifts of your choice from a deliver range of item to match
your lifestyle.

PROCESS FOR CREDIT CARDS

Following is the procedure that is to be followed:
The sales executive must ensure that the application meets the criteria as per BANK.

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 Bank Alfalah

Financial Reports

Basic Data & Market Positioning

Commencement of operations 1997
Head Quarters Karachi
Major Sponsors Dhabi Group
Credit Rating (Long Term/ Short Term) AA / A1+
Branches 648 (including 157 Islamic Branches)
Cities Covered 222 cities in Pakistan, 7 cities overseas
International Presence 11 International Branches in 3 countries
Market Share 6.6% of deposits (6th Largest by size)
Assets PKR 786 Bn / US$ 7.7 Bn
Deposits PKR 605 Bn / US$ 5.9 Bn
Net Advances PKR 304 Bn / US$ 3.0 Bn
Staff Strength 7,732

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 Bank Alfalah

Balance Sheet Snapshot

Amount PKR
Jun-14 Dec-14 Jun-15 YoY YTD
Mn
Cash 56,005 50,516 52,408 -6% 4%
Bal with Bank 20,843 12,332 12,349 -41% 0%

Lending to FI 14,687 18,313 32,052 118% 75%

Advances (Net) 275,892 290,597 303,822 10% 5%

Investment
264,034 324,319 340,691 29% 5%
(Net)
Fixed & Others 41,071 47,051 44,477 8% -5%

Total Assets 672,532 743,128 785,799 17% 6%

Deposits 555,667 605,963 604,751 9% 0%

Sub Loans 9,989 9,987 9,985 0% 0%

Borrowings 48,658 55,233 94,900 95% 72%

Other Liabilities 26,513 27,126 28,208 6% 4%

Total Liabilities 640,827 698,309 737,845 15% 6%

Paid up Capitals 13,492 15,872 15,898 18% 0%

Reserve 14,249 21,951 22,600 59% 3%

Revel Surplus 3,964 6,995 9,456 139% 35%

Total Equity 31,706 44,419 47,955 51% 7%

Interpretations:
● Balance sheet size increased by 22% YoY to PKR743bn.
● Other asset increased due to accrued markup on investments and Islamic
Advances reported as part of other assets.
● Investment book grew by 48% YoY. Investment mix shifted towards PIBs.
Gross advances improved by 11.3% YoY.
● Deposits increased 15% YoY, outpacing the industry growth of 11%.

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Bank Alfalah

● Equity base increased subsequent to IFC shares and increase in surplus. This
augmented CAR to 12.8%.

Profit & Loss Statement

Amount PKR Mn 3Q14 4Q14 QoQ 2013 2014 YoY
Interest Income 14,796 15,545 5% 43,961 55,378 26%

Interest Expense 8,892 9,143 3% 27,066 33,505 24%

Net Int Income 5,904 6,401 8% 16,895 21,873 29%

NPL Provisions 509 736 45% 959 1,448 51%

Inv. Impairment -5 66 N/A 95 86 -9%

Post Provision Int 5,400 5,599 4% 15,841 20,340 28%

Non Int Income 2,069 2,593 25% 8,279 9,036 9%

Op. Income 5,317 5,807 9% 17,313 20,863 21%

Profit Before Tax 2,151 2,385 11% 6,807 8,514 25%

Taxation 747 758 2% 2,131 2,873 35%

Profit After Tax 1,405 1,626 16% 4,676 5,641 21%

EPS(Rs) 1.02 1.18 15% 3.41 4.09 20%

Interpretations:
● Net Interest Income (NII) increased 29% YoY, backed by volumetric growth
and NIMs expansion due to asset mix shifting towards PIBs.
● Provision charge takes into account the impact of FSV expiries.
● Non-interest income increased 9% YoY on higher fee and Fx income.
Excluding capital gains, non-interest income grew 19% YoY.
● Adjusting for branch expansion and one-offs, operating expenses grew 11%
YoY.

Key Ratios
4Q13 1Q14 2Q14 3Q14 4Q14
Yield on
9.9% 10.2% 10.1% 10.2% 10.4%
advances
Yield on 9.0% 9.0% 10.0% 10.5% 10.3%

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 Bank Alfalah

investment
Costs of
5.0% 5.1% 5.0% 5.3% 5.2%
deposits
NIM 3.3% 3.3% 3.9% 4.1% 4.2%

ROA 0.9% 0.7% 0.9% 0.8% 0.9%

ROE 19.7% 16.6% 22.0% 19.6% 19.3%
exc.surplus
Admin cost:
71.1% 68.2% 67.2% 66.0% 61.9%
income
Gross ADR 52.1% 53.5% 52. 0% 50.8% 50.3%

CASA 71.1% 73.2% 71.0% 69.3% 69.1%

Net Loans 11.5% 9.6% 17.6% 15.4% 11.4%
(YoY)
Deposits (YoY) 15.0% 11.3% 15.9% 14.3% 15.3%
NPL Ratio 6.6% 6.8% 6.2% 6.5% 6.4%

Coverage 69.3% 68.2% 70.3% 69.9% 70.1%

CAR 12.1% 11.4% 11.0% 11.5% 12.8%

Interpretations:
● NIMs improved due to shift in investment mix and re-profiling of Islamic
Banking Balance Sheet.
● Cost to income ratio improved despite the bank absorbing the full impact of
103 branches opened last year.
● Overall CASA ratio of 69.1% takes into account one off opportunistic increase
in fixed deposits.
● NPL ratio improved slightly to 6.4% from 6.6% in the last year.
● Capital Adequacy Ratio improved to 12.8% with injection of IFC capital.

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Bank Alfalah

SWOT Analysis

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Bank Alfalah

STRENGTHS
● Study leave provisions are made
● Experienced management
● Proper internal audit based at head office in accordance with SBP requirements
● BAL audit policy is duly approved by board of directors of SBP
● MIS with respect to audit reporting in place

WEAKNESSES
● Poor reward system
● Lack of delegation of authority
● Lack of proper job rotation
● Lack of organizational loyalty among employees
● Lack of effective motivation
● Lack of team work
● Generally fewer right men for the right job
● Promotions generally on seniority basis
● Secretive management
● Attitude of senior managers at head office has to change towards junior staff
● Delegation of authority and responsibility specially in international division
needed
● Lack of professionally trained staff at head quarters
● Lack of adequately trained CA’s
● Competent staff unwilling to serve in the audit due to an absence of firm
rotation policy
● Audit staff has a tendency to be overconfident leading to attitude problems due
to the absence of firm rotation policy
● Professional training of audit staff lacking

OPPORTUNITIES
● Globalization, i.e., barriers will be removed and good uses can be made from it.

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Bank Alfalah

● Free staff training facilities offered by foreign correspondents should be taken

up
● Greater profitability can be achieved through strong internal control
● Elimination of risk of fraud through professional training
● Reduction of communication gap between audit and banking staff through
rotation policy
● Improvement of overall quality of audit through incentives. E.g. mandatory
audit service in career planning process.

THREATS
● There is a threat of brain drain
● Restructuring of privatized banks
● Tough competition by foreign nationalized and privatized banks in foreign
trade business
● Government policies
● Adverse economic conditions
● Further outward flux of competent staff from audit due to absence of firm
rotation policy
● Lack of professional training of audit staff may result in weakening of internal
control mechanisms of the bank.

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Departmental Analysis

CREDITS
Strengths

● Strong capital adequacy ratio

● Self-liquidating short term advances
● Blend of experienced and young qualified staff
● Strong technological based support system
Weaknesses

● Lack of proper credit risk management system

● Lack of credit marketing
● Improper loan recovery plan. Tendency towards rescheduling and restructuring
● No loan to area specific business, like cotton, ginning in Bahawalpur
● Excessive centralization and concentration of authority
● Credit policy is extremely conservative
● Credit portfolio not well diversified
● Lack of coordination between credit division and international division
regarding exports and imports financing
● Inflexible credit policies
● High ratio of non-performing loans
● Staff loans are centralized and delayed processing
● No sectoral studies or guidelines about lending to priority sectors provided to
branches.
● Low credit rating
Opportunities

● Consortium financing area offers a lot of opportunities

● Shift in Govt. policy towards SME financing
● Loans to women entrepreneurs prove to be less risky and this can be attracted
● Consumer financing is very lucrative

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Bank Alfalah

● With the rescheduling of loans by IMF/World bank, economy is expected to

pick up which will result in increased demand for credit
Threats

● Credit portfolio expansion in BAL is very slow which could result in

opportunity loss to other competitors
● Government’s inconsistent policies
● Pressures on lending rates as competitors are reducing their lending rates
● Aggressive banking by private and nationalized banks
● Default culture in the country
● Poor legal system and flaws in recovery laws

Operations & Customer Services

Strengths

● Availability of staff with a blend of experience and young staff members

● IT capability
● The internal décor of the branch reflects a modern and progressive image
● Market reputation and financial standing
● Strategic location of branches in the hub of commercial activity
● Availability of required office equipment and IT system
Weakness

● Lack of uniformity in procedures across the branches

● Updated operational manuals not available
● Slow response time
● Front line employees not groomed to handle difficult customers under stress
conditions
● Delay in information with respect to change in internal/ external policy
● Lack of employee knowledge about banks products /services/systems
● Interdepartmental work flow problems and delays
● Absence of efficiency and quality standards
● Information flow and circulation to staff members not properly/ timely
available
● Specific and uniform job descriptions not available
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Bank Alfalah

● Low motivation of staff

● Non availability of timely information to the customers
● Lack of customer advisory services
Opportunities

● More ATM’s to attract deposits/ to minimize load on the counters

● With the improvement of quality of service growth in corporate customers can
be improved
● BAL has good name that can be exploited for business growth with increased
number of branches
● Further enhancement of IT capabilities and its application for becoming a
modern technology bank to move ahead of competitors
● Poor customer service by nationalized banks in small cities like Sialkot, Rahim
Yar Khan Etc, it offers opportunities to expand its services.
Threats

● Increasing competition posed by other banks,

● New banking product gimmicks introduced by banks are wading off customers
● Customers have to become more educated and demanding
● Larger banks are reorganizing their systems focusing on better customer
services
● Increasing inflationary tendencies making it difficult to incur appropriate costs
towards maintenance branches/ training, promoting requisite service delivery
systems

Online Systems
Strengths

● Edge in banking technology

● Internet transaction system
● Satellite/radio frequency network
● File transfers
● Fax emails

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Weakness

● Voice / video conferencing facility not available

● No proper publicity of online facility
Opportunities

● Proper publicity of online banking

Threats

● Security risk is involved as bank provides financial services

Conclusion & Recommendations

CONCLUSION:
BANK ALFALAH has continued its upward climb in pursuit of excellence.
Strengthened by the backing of the Abu Dhabi Group and driven by strategic goals
set out by its Board and Management, Bank Alfalah increasingly inspires trust and
confidence of all its clients. Within a short span of time the bank has carved a
significant niche for itself in the banking industry.
These achievements have been preceded by the concerted efforts to provide highest
levels of service and value to their customers. The bank aims to further enhance
performance standards through implementation of innovations in both products as
well as customer care, by discovering newer avenues of client benefit. This customer-
focused strategy has enabled Bank Alfalah to evolve as a single source financial
service provider of corporate and retail banking services.

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The present political structure of the government is determined in adopting the

policies and reforms introduced by the last regime especially in privatization and
deregulation of the government controlled sectors. Continuation of these policies
would guarantee the measure in foreign investment and result in restoration of
investor’s confidence (both local and foreign) in government plans and their
continuity.

In spite of unsettled economic condition at home and globally during 2002, bank has
shown an impressive performance and the financial strength has greatly enhanced.
Confronted with a more open financial market but tougher competition, bank with its
professional outlook and commitment, maintained steady growth in resource
mobilization and financing of foreign trade. The bank has increased its branch
network from 467 to 500 from last no of years. The expansion program is in line with
strategic business plan.

Bank Alfalah aspires to evolve as the premier banking institution in the country. The
path towards this goal is challenging but realistic. Strategic alternatives are continually
evaluated so that their corporate strategy remains relevant to emerging trends in the
market. This adequately prepares the organization to cope with unexpected challenges
to deliver products and services more efficiently.

Customer satisfaction should always remain the number one benchmark as they move
forward towards attaining their goals. They employ and retain an unparalleled
workforce of highly motivated, energetic, well-trained and productive employees.
They offer an inspiring work environment, competitive salaries, excellent benefits and
caring leadership.

They try to achieve superior financial performance, to be considered a lending bank in

Pakistan by reputation and performance, and to be a good corporate citizen of the
communities they serve.

They promote strong and ethical business practices in the industry by focusing more
on effective collaboration with their stakeholders. Team members remain aware of the
organization’s commitment to them as well. They cultivate a sense of ownership,

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Bank Alfalah

amongst the employees, with the overall business plan and the direction in which their
organization is headed.

Their corporate strategy focuses on the striking the optimum balance in organizational
workflow and processes. The dynamic environment in which they operate impels
them to remain poised for the unexpected as competitive pressures mount.
Consequently business process reengineering and benchmarking remain notable
guidelines for strategy development. This requires flexibility in operations, as well as
management thinking. Also quality control in all facets of operations remains an area
of focus. Information technology remains an indispensable tool to empower more
effective decision making and stream line workflow.

Basically its mission is to maintain a strong grip in market for professional banking,
customer service and profit performance. And for their challenging trek towards
realization of their goals, Service Quality and Innovation will be their preferred tools.
Its core objective is to offer both traditional and innovative products, and to deliver
unparalleled personalized service to their customers. Its primary focus is on taking
service excellence to new heights.

At the end of this report there are some recommendations, it is hoped that the
successful implementation of these guidelines will be of mutual benefit to
organization.

RECOMMENDATIONS:
BAFL is an international banking organization that has its operations spread all over
the globe. All the practices and procedures implemented in the bank have been
adopted after careful thought by very experienced financial experts from around the
world. Considering this, it might sound somewhat strange to give in suggestions to
BAFL regarding its business, especially when the recommendations come from
student level. It should, however be noted that the exhortations that follow are not
about the technical aspects of BAFL operations, but are merely about some of the
routines observed daily that, if improved, could enhance the work efficiency at the
Islamabad branch.

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Workshops

The bank should examine the possibility of designing a structured series of workshops
offered at regular intervals that lead to a certificate or diploma. To date, workshops
offered at the conference have been dependent upon conference proposals from the
membership; the bank should work to re-evaluate the system. The bank should
strongly consider taking a more active role in workshop development and consider the
survey respondents comments and suggestions. The bank should examine the
possibility of offering workshops in alternate locations and co-sponsoring workshops
with other organizations.

Scholarship Program

The scholarship program has strong support for employees who want further studies to
become a qualified and professional employee.

Individual Career Counseling

Individual career counseling should be provided to each employee. It is recommended

that bank must develop an individual development plan for each employee and should
receive reports periodically during the year. A written summary report should be
receive from the employee that will help the bank to circulate that summary to other
employees that will extend the value of training without additional cost. So it is a
posttest in the form of summary report and it is necessary that the bank must take a
posttest of employees.

No Discrimination

There should be no discrimination between the contractual and the permanent

employees for training and promotion purposes. Even discrimination should not take
place in anywhere. So training not only given to the front-end employees but also to
backend employees so that at the time of job rotation they are equally compatible.

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Innovative Products

The products are mostly copied of other products. It should try to introduce innovative
products that give more profits to them because customers are more attract towards
these products.

Proper Emphasis on Human Resources Policies

Trained staff is the most valuable asset in an organization particularly in the services
sector. Improper human resource policy can lead to deficiency of this valuable asset
resulting in high staff turnover causing financial and other loses. De-motivated staff is
the most dangerous threat to a service oriented organization like bank. BAFL should
try to restore the confidence of its staff in management by altering its human resources
policy in such a way that employee motivation is achieved.

Information Technology

Although Bank Alfalah is giving enormous emphasis on information technology yet

there is a lot of potential for further developments in this sector. In this century those
people will be won by those who are well prepared for it in terms of advancement in
the information technology and computerization of their operations. The development
of effective computerized and technically advanced information system will ensure
BAFL’s success.

Incentives

Motivated employees are the biggest assets of an organization. The incentive policies
can greatly alter the motivational level of employees within an organization. BAL by
effective utilization of motivational techniques and restructuring of its employee
award policy can increase productivity considerably.

Proper Marketing

Marketing is the key factors, which plays an important role in achieving its goals
efficiently and effectively. Bank should emphasis on the marketing policies and it

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Bank Alfalah

hires a specialized market force at all levels. It should provide higher commission to
them so that they attracted towards them.

Proper Communication

There should be a proper communication between the boss and employee and even
between employee and customer. Bank should adopt such a culture in which
employees don’t hesitate to interact with each other. If this style of communication is
adopted then there is no communication gap between the employees and they achieve
their goals easily.
The above suggestions have been formulated after careful observation of the processes
and conditions prevailing in BAFL. If they are implemented, the bank will surely
benefit from them, both in terms of efficiency as well as output.

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Branch Suggestions
● For promotion of employees on the basis of professional justice.
● Political influences on the banking operations should be eliminated
● Bank should increase the number of branches in the country
● There should be a proper training system for internees.
● Establish effective relationship between top-level management and executives.
● HRD of BAL should be improved.
● Recruitment system should be improved by decreasing personal biases.
● HRD should introduce new ways to gain employee commitment.

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