Beruflich Dokumente
Kultur Dokumente
Report:
BANK
ALFALAH LIMITED
Submitted By:
2008 stood at Rs. 3.264 billion which was 10% higher than that of last year. The deposit
grew by 7.7% and stood at a figure of Rs. 239.509 billion while advance portfolio grew
by 26% and showed a figure of Rs. 149.999 billion.
.
The most valuable asset of any financial institution is its human resource. Bank
Alfalah has at present a dedicated and commendable workforce of around 6,543 staff
members other than outsourced. The training and development centre remains at the helm
of imparting training and related skills, not to only fresh recruits but also to existing
employees. Bank Alfalah has in place the state-of-the-art Training and Development
Center both in Lahore and Karachi for equipping the personnel of Bank Alfalah with
tools that help carve a brighter future. Its philosophy in this regard is that training is
indispensable in not only enhancing organizational effectiveness but also individual job
satisfaction.
Bank Alfalah has lined up a number of innovative products. These include Alfalah
credit cards, Alfalah Hilal cards, Bank Alfalah Car finance and Leasing, Alfalah Milkiat
finance, Alfalah Karobar finance, Bank Alfalah Home finance, Alfalah Zarie sahulat,
Money gram, Alfalah Phone banking and online baking. Designing the product portfolio
of bank in response to the customers preferences, the product like Royal Profit, Alfalah
kifayat scheme, are prime examples of quality and innovation providing timely banking
opportunities to the customers of bank. Being an active player in banking sector in
Pakistan, they are confident that with the commitment of their team they will be able to
gain the reputation of the fastest paced financial institution.
To make their banking solutions become accessible to more and more people, they
have embarked upon a rapid expansion program, aiming to provide a networking that
makes the services available to any of their customers in all the major urban centers of
Pakistan- with a view to go international in the near future.
With their key indicators of progress already soaring to new heights, the bank is
committed to dedicate all its energies, resources and time to bring higher value and
satisfaction to their customers, employees and shareholders.
The graph of bank is going up and up every year. The ratio of profit is increasing
at good percentage. The bank is serving the people at high level of standard by going
according to the whishes of the customers.
Internship is the basic requirement of all business programs in nearly all of the
business institutes and especially in Hailey College of Commerce, University of the
Punjab, Lahore. It is actually the basic requirement of the course of B-Com (Honors).
Firstly the purpose of internship period is to become familiar with the practical world that
what is actually happening in different national and multinational companies and how
different activities are performed over there. Secondly, to cope the theoretical knowledge
with the practical side that what is to be taught us in business institutes and how it is
implemented in different enterprises?
All praises, thanks and acknowledgements are for CREATOR; the ALMIGHTY
ALLAH Who has bestowed upon human being the crown of creation and has endowed
him with knowledge and wisdom. I offer thanks to the Holy PROPHET (PBUH) WHO
is the beacon of enlightment and the greatest benefactor the mankind ever had. Who
brought for us revelation and unlimited knowledge and civilized the barbarian human
being.
I would like to present a token of thanks for the staff members of Bank Alfalah
Limited Garden Town Branch, Lahore, who were cooperative to me in the completion of
this report and provide me their complete guidance. As banks are very much sensitive
about their secrecy, even then after taking an understanding, they let me handle their
delicate operations.
My special thanks to Mr. Gohar Irfan (branch manager), Mr. Raheel Yaqoob
(operations manager), Miss. Sara Dawood (HR manager), Mr. Ateeq-ur-Rehman Sidu
(credit manager), Mr. Saad Mahmood (Accounts officer), Mr. Ahmed Moin (officer
consumer finance), Mr. Naveed Khalid (Account opening officer), Mr. Irfan Siddique
(incharge of Remmittance department)
Akram and Mr. Majid Sharif who gave me a horde of useful information and treated me
extraordinarily at each step of my learning over there.
Maidah Masood
Table of Contents
Introduction to Bank Alfalah Ltd....9
History & Present Status of BAL....11
Mission Statement....16
Vision Statement...17
Company Management Systems.20
Organizations Structure.....23
Fields and Activities.....25
Administrative/Management Styles...36
Work Done by Me....41
Financial Highlights...101
Ratio Analysis.....103
Marketing Mix of BAL..148
Recommendations..181
Conclusions.183
1st,
1997.
The
bank
services
is
engaged
as defined in
the
in Islamic
Banking
banking,
Companies
Ordinance, 1962. The Bank is currently operating through 195 branches in 74 cities, with
the registered office at B.A.Building, I.I.Chundrigar, Karachi.
Management of Bank Alfalah accepted the challenge to transform this bank into a
highly professional, most efficient & service oriented institution. The management has
been successful in fulfilling the undertaken challenge. It has been successful in making a
significant contribution to both corporate and retail banking in Pakistan.
Over the years, its emphasis on growth has resulted in a strong entity capable of
offering high quality services to a wide spectrum of clients, in a highly challenging
business environment. Its strategy is to maximize the synergies of branch network
through an optimal allocation of financial resources in the face of dynamic challenges of
present financial environment.
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
products and service solutions. During the past ten years, we have emerged as one
of the foremost financial institution in the region endeavoring to meet the needs of
tomorrow today.
Bank Alfalah Limited 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 Limited 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 concerted effort to provide highest
levels of service and value to our 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 Limited to evolve as a single source financial service
provider of corporate and retail banking services. Bank Alfalah reputation has been built
on its tradition of high quality and the expertise of its extremely motivated and qualified
staff. With strategic mergers and acquisition, Bank Alfalah has become a leading player
in the global banking arena.
The Bank Alfalah Limited team comprises of dedicated professionals equipped
with a diverse array of skills, vast experience and pro customer attitudes. The
management concentrates its energies on making informed economic decisions,
translating it into greater returns for our investors and customers. This prudent attitude
has created a synergistic organizational structure leading to improvements in profitability
and a sustainable competitive advantage for the bank.
A Highly Responsive Product Portfolio is not only comprehensive but also
customizable to match the needs and preferences of the customers. These characteristics
of the portfolio have helped Bank Alfalah Limited to face challenging economic
10
conditions. The product lineup continues to fulfill and satisfy the banking requirements
of not just the conventional consumer, but the demanding financial needs of the corporate
sector as well. Today, as Pakistan moves into the 21st century with its ambitious
expansion and development programs, Bank Alfalah is here to join the efforts to help the
country meet its growth objectives. The bank offers an extensive range of financial
services specifically designed to cater to the needs of its successful associations with the
Government and Private Sector.
11
Since 1997, the bank has made great strides towards growth and profitability.
BAL network has expanded from 3 in 1997 to 195 as on March 2009. The deposit base
moved from less than Rs.9 billion to over Rs. 227 billion, advance from 5.8 billion to 109
billion. Being a bank that is focused on financing of foreign trade, volume of foreign
trade business has grown from Rs. 5.8 billion to over Rs. 190 billion as on December
2008.
Charged with the strength of Abu Dhabi consortium, and under the leadership of
His Highness Sheikh Nahayan Mabarak Al-Nahayan, Minister of Higher Education and
Scientific Research, Government of Abu Dhabi, and a prominent member of Royal
Family, the bank is energized with the vision, envisaging the development of various
sectors in Pakistan.
12
It was also stipulated that Pakistan would take over the management of public
debt and exchange control Reserve bank of India on 1 st April 1948. Then Indian notes
would continue to be legal ender in Pakistan till 30th September1948. By 30th June 1948,
the number of offices of scheduled banks in Pakistan decline from 487 to 195. In order to
establish a full-fledged control bank the Governor General of Pakistan Quaid-E-Azam
Muhammad Ali Jinnah, inaugurated the state bank of Pakistan on July1st, 1948. At the
time of independence in 1947, there were 38 scheduled banks with 195 offices in
Pakistan but by December 31, 1973, there were 14 scheduled Pakistani commercial
banks with 3,233 offices all over Pakistan & 74 offices in foreign countries.
Nationalization of Banks was not done 1st January 1974 under the Nationalization
act 1974, due to certain objectives. But it had negative effects on efficiency of the
banking sector afterwards a privatization Commission was set up on January 22, 1991,
the commission transferred many banks to the private sector i.e., MCB & ABL. The
government approved & permitted the establishment of 10 new private banks in 1991;
hence many new private banks have incorporated, since then, BANK ALFALAH in one
of the namely established private scheduled banks in Pakistan.
The fact show that the commercial banking has made tremendous progress and
achieve a phenomenal growth since independent and that commercial bank have duly
played a vital role as mobilize of people saving to constitute the most important source of
financing in country economy.
As the result of these contributing factors methods and practices necessary to
handle the increase volume of detail work have been developed while an other and
quicker method have been adopted in order to cope with the increase volume , much in
which has been accomplished without unduly increasing cost of doing business.
During to last 20 years we have experience a constant transaction from the old to
the new from manual to mechanical method and procedure, from old establish practices
13
to current techniques and to a more scientific approach to the solution of the problems
brought about day to day changes in business practices.
Commercial banks operating in the country can be divided into four distinct
categories, private banks, foreign banks, privatized banks and nationalized commercial
banks (NCBs). The number of private banks has remained almost constant ever since
they commenced operations in early nineties. However, ownership of a number of private
banks has changed over the years. Lately, with the take over of Prudential Bank and
Platinum Bank by the new sponsors their names were changed to Saudi Pak Commercial
Bank and KASB Bank respectively. Earlier, ownership of Union Bank and Schon
Commercial Bank changed. While the new sponsors of Union Bank preferred to continue
with the same name, the buyers of Schon Commercial Bank changed its name to PICIC
Commercial Bank.
Union Bank acquired the operation of Emirates Bank International (EBI) in
Pakistan. The scheme of amalgamation was notified by the central bank on September 03,
2002 and Union Bank settled the amalgamation price of US$ 37 million on September
09, 2002. Union Bank had acquired Pakistan operations of Bank of America in year 2000
and American Express credit card business in Pakistan in year 2001.
In the NCBs category two banks Habib Bank and National Bank of Pakistan
have been left after the privatization of United Bank. National Bank of Pakistan has
been listed at local stock exchanges and parts of its shares were off loaded. The GOP is
actively pursuing the privatization of Habib Bank, through sale of its 26% shares along
with transfer of management. The remaining shares of the GOP in Muslim Commercial
Bank and Bank Alfalah were also sold. The GOP sold majority shares of Allied Bank of
Pakistan in early nineties but has not been able to off load its remaining shares in
the bank.
United Bank's privatization demands specific mention for two reasons:
1)
2)
14
The consortium comprising of Abu Dhabi Group and Bestway Group has
acquired 51% shares of the bank along with management control. Since October 2002 the
bank has been working under the new sponsors.
Meezan Bank was created as a result of merger of Al-Meezan Investment Bank
and Societe Generale. The first ever license to operate as a Scheduled Islamic
Commercial Bank was granted to Meezan Bank on January 31, 2002. Pakistan operations
of Societe Generale were amalgamated into Meezan Bank on May 01, 2002.
The number of foreign banks operating in Pakistan has been declining constantly
since the GOP decided to freeze foreign currency accounts in May 1998. The total
number of foreign banks in the country has reduced to half since the freezing of foreign
currency accounts. The positive point is that most of the foreign banks were able to sell
their Pakistan operations at attractive prices.
15
To develop
products,
& deliver
manage
the most
customer
innovative
experience,
deliver
16
17
To please their customers by fulfilling the financial needs as best as possible, they
believe in placing the client at the center of business and all of the products and
services. For this the management has adopted the strategy of
To expand more the network of branches in several other cities of Pakistan as well
as in the other countries of the world.
18
Message From,
H. E. Sheikh Hamdan Bin Mabarak Al-Nahayan
Chairman & Board of Director
Dear Colleagues
Bank Alfalah was launched on 25th February 1997 and with that we launched for
ourselves, the challenge to transform this bank into a highly professional, and most
efficient and service oriented institution. The-state-of the-art technology we plan to put in
place will be complemented and supported by the personal touch which we are
committed to add all spheres of our customer related services. Therefore necessity of
improving the quality of our human resource will remain on top of our priorities for all
times to come. We hope, you all will make the best use of this web site, which will
provide a medium for you to express your views on, different banking related subjects.
My greetings and best wishes to you all.
H. E. Sheikh Hamdan Bin Mabarak Al-Nahayan
19
The upper most part of the management is the Board of Directors or the Executives. The
Board of Directors are responsible for the first phase of the management process, i-e,
planning. So, all the decisions and the strategies are being proposed and implemented
under the instructions and the supervision of the board of directors or the executives. Also
the policies and the overall objectives of the Bank are being proposed at this level of the
organization.
The top management involves the branch managers and the chief managers of the bank
including the operations managers as well. The major responsibilities include the strategy
formulating for the bank and supervising the whole staff at the branch. They define and
interpret the objectives and vision and then formulate policies for their completion.
Departmental heads constitute this level of management at Bank Alfalah. They are
directly responsible for planning and controlling the activities of officers. Finally, the
employees whose activities are monitored and controlled according to the desired
objectives.
- Chairman
- Director
- Director
- Director
- Director
- Director
21
(Chairman)
Corporate Information
Mr. Hamid Ashraf
- Company Secretary
- Auditors
22
B A Building,
- Head Office
I. I. Chundrigar Road,
P. O. Box 6773, Karachi.
www.bankalfalah.com
Chief Executive
Officer
Executive
In charge
Credit
Card
Credit
Audit
Internation
al Banking
Finance
Marketing
23
Branch Setup
Assistant
Credit
Marketing
Operations
Mng.Ops
Credit
Admin
Consumer
Finance
Agri
Finance
Help Desk
CD
Accounts
Accounts
CROS
Consumer
Banking
IT
Bkg/Ops/
24
Cash
Cust serv
Clearing/
Collection
Peons
Guards
Driver
Others
CREDIT DIVISION
Providing extensive support to branches for credit administration, control and
monitoring, the Division has played a pivotal role in helping the Bank achieve a
remarkable loan growth of with well-diversified risk exposure. Most of the loans are
for short-term trade financing on a secure and self-liquidating basis. The Division has
a special Assets Management team, which is responsible for ensuring low ratio of bad
debts, effective monitoring of delinquent advances and close follow-up for recoveries.
Banks Head Office Credit Committee (H.O.C.C) reviews the credit quality and
pricing on regular basis not only to ensure healthy credit growth but also the
management of Banks risk assets in a most prudent and profitable manner.
Technological innovation:
Modern science is not an option, it is an obligation
Technology is rapidly changing the way we think, act and do business. Is has played
pivotal role in enhancing customer expectation, particularly with respect to speed and
quality of service.
Alfalah bank enjoys a strategic competitive advantage overall domestic players by
virtue of its leadership in technological innovation. Phone banking service and
Internet banking facility allows customer to enjoy routine banking services from
anywhere in the world. 365 days a year, 24 hours a day.
26
Dedicated Professionals:
Unusual efforts on the part of the employees who are apparently ordinary
workers is one of the key indicates of the superior enterprise
Staff is the most valuable asset of any organization. The human resource philosophy
at Alfalah bank focus on multi-talent hiring, professional grooming, requisite training
and meritocracy based reward system. Staff welfare has been a priority.
Employee productivity enhancement is organized through in-house and external
training programs. Bank continues to offer opportunity for people to develop their
knowledge, skills and personalities, thus ensuring greater self-fulfillment and
progression in the organization.
In short bank Alfalah team comprise of dedicated professionals equipped with a
diverse array of skills and vast experience. The management concentrates its energies
on making informed economic decisions, translating it into greater returns for our
investors and customer. The prudent attitude has created a synergistic organizational
structure leading to improvements in profitability and a sustainable competitive
advantage for the bank.
27
Ethical values:
Professionalism without integrity is like a book without pages
Because the right may not always be obvious, we must be guided in our every action
by set of well-defined values, governing our decision. Alfalah bank understands that
its commitment to satisfy customer needs must be fulfilled within in a professional
and ethical framework.
FINANCE DIVISION
Finance Division is responsible for bookkeeping and accounts. This Division is the
head office and manages all financial returns and the MIS through its Management
Reporting Wing. The Division is actively involved in preparing market comparative
analysis, consolidation of Banks budgets, monitoring and constant review of various
financial indicators.
Financial Division works as the backbone for Banks operations. The Division, which
reports directly to the President And Chief Executive of the Banks, has been
instrumental in preparation of Banks business plans and future stratigies.the
budgetary performances are constantly reviewed and trough a sophisticated Monthly
Performance Report (MPR) which is a computer based program, the Division
provides feedback to the senior management on strategic issues like reasons for
budgetary variances and methods to arrest negative performance factors.
Preparing the Banks Annual Accounts and coordinating external audits is a direct
function of the Finance Division. Through the dedicated efforts of staff at this
division, the Bank has been winning various awards for the Best Presentation of its
Annual Accounts and also the management has been able to monitor and review the
Banks performance in procreative manner.
AUDIT DIVISION
The Audit Division reports directly to the Board through the Executive Committeewhich are also the Audit Committee.
The Audit Division acts completely independent of the management and is
responsible for checking and reporting on the Managements compliance with the
Boards policies and directives, as also the Prudential Regulations and other directives
of the SBP. However, their role is not intended to be just that of fault- finding; but
also guiding and assisting branches in improving their operations.
28
29
volume, efficiency, and profitability following its increased involvement in trade finance,
commercial lending, and foreign exchange and money market operation.
Major policies hat have been made and implemented at Bank Alfalah are: Consumer Banking Policy
Lending Policy
Bank Alfalah pursues a conservative yet dynamic credit policy. This strategy has
enabled the bank to have a high quality risk portfolio. Bank prefers to finance exporters
because of less risk involved. Bank Alfalah manages the credit risk, liquidity risk, market
risk and other operational risks very efficiently. For this very purpose Bank Alfalah has
got an effective credit line proposals system to be sanctioned to the clients on demand.
Selection of Clients
Management is very selective of clients. All of the references are carefully
checked to learn about a potential client before establishing a relationship. References are
excellent sources of new accounts as they give an opportunity to learn about a potential
client before establishing a relationship. This policy helps in protecting the integrity of
the bank. It ensures good relationship with the clients.
Credit Facility
In this service the loans are provided to the customers by the bank to meet revenue
shortfalls.
30
ii.
Stop Payment Instructions
It is one of the most important services provided by the bank to its clients. In case the
account holder has lost his/her cheque he can issue the stop payment instructions to
the bank. The bank till further instructions will not honor the cheque.
iii.
Deposits
iv.
For offering these services the bank charges commission besides the government
taxes and duties.
31
Marketing Policy
Bank Alfalah inverts heavily for the marketing policies and orientation, for the publicity
of its new products/services. It uses television advertisements, newspaper as well as
various promotional schemes to attract customers. The Bank sponsors a number of
sporting and community development initiatives to play its part as a responsible corporate
citizen
Accounting Policies
Bank Alfalah has adopted almost the same accounting procedures that other financial
institutions are adopting at this time. These accounting procedures or Accounting
policies are made according to Generally Accepted Accounting Principles, the GAAP.
The process flow and the usage of the policies in the day wise routine are mandatory
for all the employees working in the specified departments at the branch.
Recruitment Policy
Hiring is mainly of two types i.e. direct hiring and promotion from lower levels.
Banks policy is to hire suitable candidates. By suitable candidates bank refers to
candidates having proper educational qualification, experience and background. It is the
policy of the bank that President of the bank will be the representative of major
32
33
focus of the bank is to develop new areas of activities along with traditional banking
activities of resource mobilization and credit disbursement.
Growth Policy
Bank Alfalah emphasizes on growth along with providing best quality customer
service. Banks policy is to maximize the synergies of branch network through optimal
allocation of financial, human and other resources to compete in the marketplace.
Liquidity Policy
Bank Alfalah maintains positive and healthy liquidity. Banks policy is to keep
surplus liquidity in fixed income securities issued by the Federal Government of
Pakistan. If necessary it can be easily converted into cash.
Investments Policies
Bank Alfalah investment policies are based on federal and provincial securities,
debentures, and participation term certificates treasury bills and blue chip share of joint
stock companies.
Job Satisfaction
Job satisfaction is the major important factor to be considered while evaluating any
organization. To evaluate an organizations strength and repute in the industry, job
satisfaction is the key factor as well like that of growth and development in the monetary
terms.
During my internship program, I observed being in touch with most of the employees
over there, that all the employees are working with devotion that is the basis for job
satisfaction. In addition all the employees are satisfied with the working ambiance, with
the salaries and with the increments and promotions. Only thing to be mentioned out over
34
here is the workload and the employee timings for their job. Some of the employees are
over burdened with the work. But that does not impact the overall job satisfaction of the
organization. Bank takes much care of its employees because they are precious assets of
it. Bank celebrates birthdays of all employees, arrange trips and give them opportunity
for recreation and enjoyment.
Bank hires officers in range 1. Then depending upon their job performance they
are promoted to next range. More facilities and increments are given along with
promotion. The bank gives a car facility to the officers of range 5. Banks policy is to
give cash rewards and salary increments for increasing the employees satisfaction. Also
with the expansion of the branch network growth in the current era, more and more
opportunities have been provoked not only for the young generation but also for the
employees of the bank. At Bank Alfalah the employees are very much satisfied with the
job and the overall working conditions of the bank, so in due response, the bank is
enjoying high efficiency in managing the time delays in reporting and working
operations.
35
ADMINISTRATIVE/MANAGEMENT STYLES
Management at Bank Alfalah Ltd. is very much keen towards maintaining the
decorum of the cooperative culture within the organization and also with the clients of the
bank. The way managers treat the employees and an operative is outstanding at bank
Alfalah. This is the reason why each and every employee is pretty much satisfied with the
job.
MANAGEMENT STYLES
Management must have to adopt some administrative style to get all the activities
to be done effectively and efficiently. As far as the management styles at Alfalah Bank are
concerned, there is both centralization and decentralization to some extent. Management
must adopt some administrative style to get all the activities done effectively and
efficiently. As far as the management style at Bank Alfalah Limited Township Branch is
concerned, there is centralization to a certain extent and decentralization in some other
areas.
36
Managerial level
Administrative style of Branch Manager is authoritative. His authoritative style is
the requirement of administration. For the implementation of strategies and
getting all the activities to be done properly with an organized environment, unity
of command was the requirement of the time. In his absence, I observed the
environment of uncertainty and deregulation in the bank to a little extent.
Department heads are responsible for the overall operations of the department
assigned. There is a sign of good delegation of authority for decision-making in
Alfalah Bank at this level. Department managers always ask his subordinates
before referring the solution to a problem to the Branch Manager. So at this level
employees are very much contended to their work.
Staff level
At the staff level, as employees are satisfied to the work assigned and authority
structure, so management at this level is concerned to the decisions of the
department heads level.
37
Motivation
The term motive implies action to satisfy a need. Motivation can be
defined as a willingness to expend energy to achieve a goal or a reward. The
management styles adopted by the bank affect greatly, and employees are
motivated in order to enhance their performance and achieve the derived goals.
38
social satisfaction from interactions at the work place. Working conditions and
supervision are good; secondly high morale results from high motivation to
produce. In other words we can say that management should put its eggs in the
basket that creates a high-motivated work force.
Integration Strategies
Intensive Strategies
Diversification Strategies
Defensive Strategies
39
Integration Strategies:
Forward integration, backward integration, and horizontal integration are
sometimes collectively referred to as vertical integration strategies. Vertical integration
strategies allow a firm to gain control over distributors, suppliers, and/or competitors.
Intensive Strategies:
Market penetration, market development, and product development are sometimes
referred to as intensive strategies because they require intensive efforts to improve a
firms competitive position with existing products.
Diversification Strategies:
Concentric, horizontal and conglomerate are some of the strategies, which are
inculcated under the head of diversification strategies. Overall, diversification strategies
are becoming less and less popular as organizations are finding it more and more difficult
to manage diverse business activities.
Defensive Strategies:
Another way to pursue strategies is through the defensive way, which includes
joint venture, retrenchment, divestiture and liquidation strategies.
40
WORK DONE BY ME
I was been assigned by our department, Bank Alfalah Ltd, Garden Town Branch,
Lahore as my internship organization. There I worked for about eight weeks.
I worked in three departments. I started up with account opening (operations),
where I worked for about three weeks and learned about different types of accounts, and
how to open a new account, etc. I was working under the supervision of the Manager
Operations, Mr. Raheel Yaqoob at my internship in that department.
After working in Operations, I was moved to Credits, where I learned that how
finance is advanced to the clients and different types of facilities the bank is providing to
its customers. There I worked for about two weeks with Mr. Ateeq-ur-Rehman Sidu
officer of CAD Department Mr. Ahmed Moin Lodhi officer of car Finance Department
and under supervision and training of the employees working as the finance officers as
well.
41
Garden Town Branch has got a wide range of excellent services departments been
supervised under the best ambiance and a very well educated staff. The following list is
showing the main departments at Garden Town Branch
Operations Department
Accounts Department
IT Department
Now, I am going to discuss the six departments with which I was in touch during my
internship program. That is, the Account Opening department, the Remittance department
the car finance department, the Accounts department and the Credits department.
days in banking because the bankers are always in contact with customers as customers
are the biggest source of assets for the bank. I really enjoyed my stay at this department
as I got to interact with the customers directly for the first time. I was given under the
supervision of Mr. Naveed Khalid, who is the Incharge of Accounts Opening.
During my stay at this department I got to fill the forms of individuals who
wanted to get their accounts opened at Bank Alfalah Limited, fill the cheque and deposit
slips of customers who were not literate enough or needed instructions, and I also got the
opportunity to give advice to the customers regarding the requirements of account
opening and the benefits of opening an account with Bank Alfalah Limited.
Working with the Accounts opening department gave me a lot of courage as it
taught me the way that you should deal with the customers of the bank. Now coming
towards the documentations, stuff requirement at this department for the accounts
opening process.
Types of Account
Current Account.
Saving Account.
Notice Deposit.
Term Deposit.
Current Account
The current account is the most common account and the most preferred amongst
business concerns. The theoretical explanation for this would be that they can function
more efficiently but since in reality there are no restrictions on any withdrawal. The only
reason we can think of is that current account facilitates online banking which saves time
to a considerable extent. No interest is being credited to the customers accounts that are
43
maintaining the current accounts with the bank. Current account enables the client to do
cash transactions in a more efficient manner.
There is no interest on these accounts. It is only for transaction purposes. They paid on
demand. Where a banker accepts, paying all checks drawn against him to extend of the
balance in the accounts. As there is no profit paid on this account, it is also called
checking account because cheque can be drawn on it. Current account is mostly opened
for business. The minimum balance requirement for opening the current account is Rs.
10,000.
Initial deposit for account opening is Rs. 1,000 with no minimum balance
requirement.
Free debit card can be used to withdraw cash and make purchases at thousands of
outlets across Pakistan which provides access to funds 24 hours a day.
The PLS savings Account is meant for those people who have got an aptitude
towards earning some profit on their amount deposited for sometime with the bank.
Individuals who wish to earn profit/interest on their investment normally maintain the
44
profit and loss sharing account but in order to earn interest the client is required to keep
his/her deposits with the bank for some time. For this purpose, there are some restrictions
on withdrawal of money from a Profit and Loss sharing account but in general banking
practice there is no restriction on any with drawl from a Profit and Loss sharing account.
The interest/profit is paid half yearly.
NOTICE DEPOSITS
Notice Deposits are kind of fixed deposits. The minimum balance requirement for
opening the account is Rs. 5000 and payment is drawn on maturity of the specific period.
NOTICE DEPOSIT IS OF TWO TYPES.
One for which a prior notice of 30 days and is required from the customer before
withdrawing deposited amount and for which rate return is 4.00%.
Second for which a prior notice of 30 days and above is required from the customer
before withdrawing deposited amount and for which the rate of return is 4.50 %.
TERM DEPOSIT
A term deposit is a deposit that is made of a certain period of time. At the end of
specific period the customer is allowed to with draw the principal amount. The rate of
return of this account varies from 3.25 % to 6.50 %. The term deposit account varies from
one month to 3 years and the minimum balance requirement is Rs. 50,000.
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Any minimum balance during the month is taken for calculating profit
46
Total Deposits
The main document in this department is, of course, the Account Opening Form.
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The second part then establishes the preference regarding the type of account to be
maintained. The various choices offered are
o
Savings account
o Current account.
o Royal profit
For the chequing account, there are different types of account holders are required for all
these types of account holders. The operation/procedure requirement that is needed for
Individual Account differs greatly from the Joint Accounts proprietorship A/C,
Partnership A/C, Private Limited Company A/C and Public Limited Company A/C.
Now, during my internship at the Account Opening department at Bank Alfalah Ltd.
Garden Town Branch, I found out the following documentation and writings are required
in order to open an account with us:
The first thing mentioned at the account opening form is the Title of the
account. Title of the account is to be written in block letters. By title of an
account we mean the name (either of the individual or of the business
concern) with which the account is to be opened and operated.
The client is supposed to provide the information whether the account would
be maintained singly (only one person operates the account) or jointly (two or
more than two persons maintain the account).
The name of the person who intends to operate the account.
Provision of either Fathers or the Husbands name is also a pre-requisite.
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49
Type of organization
The various types of organization which are present in Pakistan at present are:
Partnership
Association/Club/Society
Sole-Proprietorship
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Letter of thanks.
JOINT ACCOUNT
When different people want to or need to share a single account it is called joint account.
The names of persons are written on the title of A/C and on S.S. card.
Joint A/C cannot be opened by single person. Both persons have to sign on cheque. When
two or more person neither partner nor trustee open account in their name is joint
account.
REQUIREMENTS
Sign of both customers on back of AOF
Sign on joint A/C # mandate
Name and A/C # of introducer
NIC copies of both members.
Mode of operation.
In case of account opened by a business concern there are some documents that are
needed to be attached with the account opening form. The details of these documents are
given below.
Limited Company:
Copy of certificate of incorporation
Memorandum and Articles of Association
List of Directors
Copy of the board resolution
Certificate of Commencement of Business
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(I) Each Account will be allotted a distinctive number, which should be quoted in all
correspondence with the bank relating to the account.
(II) The account should be subject to the applicable laws of Pakistan and prevailing
rules, regulations and directives of the State Bank of Pakistan.
Minimum Balance
Subject to the regulations of State Bank of Pakistan, the customer should maintain a
minimum credit balance in the account as may be prescribed by Bank from time to time.
The bank reserves the right to close the account after giving 14 days notice if the
customer fails to maintain the required minimum balance in the account.
Deposits
(I) All deposits in the account should be accompanied by pay in slip showing the correct
title & account number to be credited.
(II) If the amount indicated on the deposit slip differs from that later cash account the
banks count shall be final and conclusive.
(III) Proceeds of a cheque deposited in the account for collection will be value dated after
receipt of the proceeds thereof.
(IV) In receiving cheque/instruments the bank acts only a collective agent of the
customer & assumes no responsibility for the realization of such cheques/instruments.
The bank may refuse to accept such cheques/instruments drawn in favor of third party.
The customer shall not draw against unclear cheques/instruments though credited.
(V) The bank shall recover return cheque charges at the rate fixed by the bank by
dividing the account on every cheque deposited for collection and return unpaid.
(VI) The bank is realizes the services of other bank, customer do so for account and the
sole risk of the customer. The bank assumes no liability should the instruction is transmits
is not carried by such banks.
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(VII) The bank shall not be responsible for the delay or loss in transit of any cheque not
for any act, omission, neglect, default, and failure of any correspondent bank, agent or
sub agent or for any reason beyond the control of the bank.
Withdrawals
(I) Withdrawals from the account shall only be made by using cheque books supplied
by the bank at the request of the customer. The bank reserves the right to withdraw
cheque book facility without notice if in the opinion of the bank the account is not being
maintained or operated in accordance with these terms and conditions or for any other
reason.
(II) The customer shall exercise care when drawing cheques and agree that cheques
will not be drawn in a manner which may enable a cheque to be altered in a manner
which is not readily detectable.
(III) The customer shall ensure safe keeping of the cheque book and shall not allow
access to the cheque book to any unauthorized person. In case of loss or theft of the
chequebook or any cheque leaf, the customer will inform the bank, if he will not then he
will be himself responsible for any loss.
Minors Account
In respect of an account opened in the name of a minor, the bank shall be entitled to act
on the instructions received from the guardian name on the account opening form,
irrespective of whether the minor account holder continues to be a minor or not unless the
bank receives written instructions from the guardian or a notice to the contrary from an
appropriate authority.
Statement of Account
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The bank shall quarterly or at such other interval as it may deem fit send to the
customer statement of account and the customer shall check the entries made therein. In
case of any discrepancy or error in the statement of account, the customer will notify the
bank within 14 days of receipt of the statement.
Death of a Customer
In case of death of individual customer, the bank will permit no withdrawal from that
account after receiving notice of customers death, except on production of a succession
certificate or other court order from a court of competent jurisdiction.
Now, there are some documents that are always there with the account opening
forms. These things need to be filled in by the customers efficiently and carefully. These
are:
Signature Specimen Card.
Cheque Book Requisition.
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The introduction of a current account holder is accepted for the opening of either
a current account or a solving account. The introduction of saving bank account is
accepted only for saving bank accounts. The signature of the account-holder
introducing the account is obtained at the place provided for in the account
opening form.
Specimen Signature Card (S. S. Card):
It is card on which specimen of applicants signature are taken for future
reference. Every time a cheque is presented for payment, the signature on the
cheque is verified by comparing it with S.S Card. In case of joint account two
applicants can sign on one SS card. In case of more than two joint account holders
more than one SS card are required.
Account Number:
As now a days Bank Alfalah has acquired centralized banking system where all
the branches are directly connected to Head office. When customers give all the
information about him, this information is entered into centralized data base.
When this procedure is completed, the system automatically generated the
account number of that customer. Due to this system the process of account
opening becomes fast and also there is no chance of any mistake.
The account numbers of various accounts start with the following series
Ac c o u n t t i t l e
Ac c o u n t n u m b e r
Current account
Saving account
Ro y a l p r o fi t a c c o u n t
Te r m d e p o s i t a c c o u n t
01
02
029
03
58
C a r fi n a n c e a c c o u n t
A g r i fi n a n c e a c c o u n t
0191
0141
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o Check whether or not a senior officer has verified the signatures, if no then
first he gets them verified.
o If the check book is of photo account then be sure that each and every leaf of
cheque book should carry photo account stamp
After entry in the manual register, the employee issues the chequebook to the A/C
holder after his/her signature on the register.
application with the liability form (explained below). The client can also give
an application on a plain paper, but correct signatures are very necessary.
Then it has to be made sure that if the account to be closed is a saving or
Royal Profit then the account balance before closing should be zero. In case of
these two types of accounts the bank does not take any closing charges. If a
client wishes to close a current account then the bank charges Rs.150, so at the
time of closing the balance should be Rs.150.
Along with the application to close the account clients Chequebook is also
received from him and then it is destroyed in order to prevent any misuse in
the future.
A liability form is filled and sent to the Credit Department in order to Cheque
that the customer does not owe the bank a single penny in any regard. A debit
voucher and a credit voucher are also attached to the liability form.
When the Credit department approves that the customer does not owe any
money to the bank and the form is returned to the account opening department
then the original account opening form pasted in the ledger when the account
was opened is marked account closed along with the date on which it is so
marked. One thing has to be taken into immediate consideration that the
account number allotted to the client (who has closed his account), after
closure of the account becomes useless and is not allotted to any one in the
future.
After approval of the liability form, it is sent to the Cash Department so that
the officer who scanned it in the first place could return the specimen
signature card to the account-opening department.
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Once the S. S. Card is received back from the concerned official then the
liability form, the clients application along with the specimen signature card
is pasted in the ledger right along side the original account opening form. The
form has to be pasted with the original account opening form even if the
account was opened a decade ago. In the computer as well all the entries and
records related to that particular account is permanently deleted by using the
close account option.
assurance in writing that he would indemnify the branch against any loss that may
be caused by reason of his signing in a language other than that of English.
Issuance Requisition
This requisition is used by the staff to order for any thing (e.g. stationary) they
need. They write the type and quantity of the stationary they need, get it signed by
the Manager Operations, give it to the person in-charge of issuance of stationary
who on receipt of this requisition (duly signed) issues the stationary.
Debit And Credit Vouchers
These two vouchers are basically used when an account has to be closed. The
debit voucher shows as to how much amount has to be taken from the clients
account and the credit voucher shows as to how much amount has to be credited
as Banks income, in order to facilitate the account closing process.
Application To Close The Account
This is a pre printed application of the bank in which the client fills in the account
number, the title of the account and the type of account and requests the branch
manager to close his account with the Bank.
Application To Change The Address
This is again a pre printed request form in which the client fills in his name,
account number, telephone number/s and the new address so that he could
communicate with the bank and receives all the notices, statements and other
necessary document which the bank might send through mail depending upon the
circumstances.
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Discrepancies:
If there is fond any discrepancy in any of the following particulars then the form will not
be entertained:
1. Date of account opening
2. Account opening Approval
3. Customer Name
4. Joint Name (in case of joint account)
5. Mailing Address
6. Alternate Mailing Address
7. Telephone Number
8. Nationality
9. NIC / Passport
10. Currency of Account
11. Related Account Information
12.Zakat Deduction Authorization
Account
number
21. Introducers Signature Verification
22. Segment Code mentioned
23. Signature on Banks Terms and
Conditions
24.Account Type
very hardworking and supportive type of a colleague to me. He taught me each and every
thing that can happen in the accounts opening department also direct me about the
procedures of other banks dealings. Whenever he was busy in doing a work regarding the
accounts opening things he never forgot to tell me what he is doing and what is the
purpose of doing that thing.
During my stay at the accounts opening department, I got a chance to open some
accounts after the approval and due verification from my supervisor Mr. Naveed Khalid.
He told all the stamps, which have to be incorporated in the account opening form, to me.
I did mistakes as well while opening of accounts regarding stamping at the correct place
and writing account titles. But he never ever said a word to me regarding that. This is the
thing, which I observed that employees at Bank Alfalah are very cooperative and
supportive. This is the reason why the customer satisfactions provoking all along in the
branches of the bank.
Remittance Department
Remittance department comes under the category of the Domestic Banking. By
remittance we mean transfer of money from one city to another. Hence this department
deals with the transfer of money using different mode from one place to another.
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 charges
him for the remittance. He may or not be the banks customer.
REMITEE
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Also sometimes called the beneficiary, or the payee (the person to whom the
remittance is made/ the one who receives the payment.)
ISSUING BANK
The bank that affect the remittances, through the Demand Drafts, Telegraphic
Transfer, or Mail Transfer.
PAYING BANK
Also known as the drawee branch (The branch on which the instrument is drawn. It
has to make the payment). Usually located in a different city or country.
PRINCIPAL DUTIES: -
1. Pay Slips
2. Pay orders
3. Demand Drafts (DD)
4. Rupee Travelers Cheque (RTC)
5. Money Gram
DEMAND DRAFTS
Demand Drafts (DD) are a bill of exchange. It is an instrument in writing signed by the
banker containing an unconditional order to pay certain amount to or to the order of
certain person for payment on demand or otherwise as future determinant time. If it is
made through cheque than it is necessary that person must be account holder while in
case of cash any person can make. It consists of four copies.
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1)
2)
3)
4)
PURPOSE: AS
DD
BANK)
IN FAVOR OF ANOTHER
ONE CUSTOMER TO PAY ANOTHER WHO MUST BE RESIDING IN SOME OTHER CITY.
PAYMENT
PAYMENT
OF
DD
PAKISTAN) ETC.
RECORD
No manual record of the demand draft is kept; only the record is saved in the computer at
the time of making the demand draft.
DD APPLICATION SLIP
COMPUTER ENTRY
In the system enter into the DD section then enter the
The account no of the issues (if he/she has an account with our branch)
Entry of DD:
Yellow slip
DD Payable
credit
H.off
debit
---------------------------------------------------------------------------------------------------
debit
DD
credit
---------------------------------------------------------------------------------------------------
credit
DD
debit
-------------------------------------------------------------------------------------------------------
DD payable
debit
Customer
credit
-----------------------------------------------------------------------------------------------------------
The DD number appears at the end which is entered on the demand draft application
form for record purpose.
Now press yes for the print of DD, which is in two, parts both are given to the customer.
When the computer record has been saved now the advices are made in the favor of the
bank on which DD will be drawn. The advices for BAL branches are sent directly to that
branch through mail.
PAY ORDER
Pay order is also a bank instrument a bill of exchange. The pay orders are usually used
for the payment within the city. The pay orders issued from one branch of bank can only
be drawn at the same branch, thats why it is generally referred to as Bankers cheque.
There is a separate slip for the pay order application. All the procedures for the pay orders
are similar to the demand drafts except the charges and the record keeping which are
given below
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RECORD KEEPING:
The record of the pay orders is kept in both the computers and manually in registers. The
computer record keeping system is similar to that of the demand drafts. Where as in
register you enter the
Customer
debit
Pay order
credit
-----------------------------------------------------------------------------
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Pay order
debit
Customer
credit
---------------------------------------------------------------------------------
i) Purchaser:
iii) Payee:
PAY SLIPS
The bank for the settlement of its own payment uses this instrument.
There are no charges for the pay slips. They are used to meet the miscellaneous expenses of the bank. The
pay slips can only be drawn on the same branch of the bank. No manual or computer record of the pay slips
is kept. Only the record of the counter file of the slip is maintained as a record at the bank of which two
signatures of the beneficiary are taken.
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The reasons of payment i.e. repair, releases of security etc are written as on account
of.
Signs and stamp of the beneficiary are taken.
The payment of the pay slips can be made through any of clearing, transfer (same city branches), cheque,
and cash. Collection (all branches within Pakistan) the pay slips can issue to both minors and majors. On
the slip the signatures of two authorized bank officials are must.
All the travelers cheque is credited by the head office HO accounts. The payment mode
used for the travelers cheque can be cash. Transfer, authority letters, collection (all
branches in Pakistan), the president of the bank and it already signs cheque is also signed
by an authorized person at the bank.
ISSUING BRANCH
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The branch that is issuing the TC will take the signs of the customer on upper part of the
cheque.
The issuing bank send one copy of RTC application to head office and keeps other with it
after entering all the account opening conditions i.e. NIC.no, NTC.no, address, phone no,
name etc into the system.
PAYING BRANCH: On the next date when the cheque is presented in the paying branch (any BAL branch in
PK) same signatures on the lower part of the cheque are taken and the bank officer
cheque whether they match or not.
MONEY GRAM
Bank Alfalah Limited, in collaboration with money gram offer remittance services to
Pakistan.
Its basically a person to person money transfer service that allows consumer to receive
money in just a few minutes.
PROCEDURE
Person must tell reference no. and compute the simple form.
Person has to show NIC and tell compute introduction after that he can obtain
money.
can define credit as trust in ones integrity in money matters and ones ability to meet
payment when due.
Purpose of Credits
Earnings of a bank are dependent on CREDITS, because:
On the other hand bank lends the deposits to borrowers and charges interest on the
lending. This function is performed by CREDITS in any bank
Importance of Credits
CREDITS are the most important department of a bank. Performance of all other
departments is dependent upon Credits. It attracts corporate accounts, as a company
prefers to do import and export business from the banks from where it is availing limit
(credit) facilities.
Risks involved in Lending
Though lending is main source of earnings for any bank but it is risky as
well. Whenever money is advanced to any customer there is always a risk
involved of default. To minimize the risk involved BAL gives loans to credible
customers.
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Credits Marketing
Credits Administration
The above-mentioned two sections perform the overall activities of credits. Role of each
section is discussed below:
Credits Marketing:
Marketing personnel is responsible for attracting customers to bank for advancement
of loan facilities. They must have complete information of trends in the industry.
However several precautions are followed to give loans to only credible customers, as
the aim of bank is to recover the money at time and through earnings of the client and
through liquidation of securities.
Bank Alfalah Ltd. always prefers to give loans to credible customers. For this BAL
requires information about:
Basic Cs of a Credit:
Character
Who is the borrower (company)? What is its reputation for honesty, integrity and
willingness to pay?
Capacity
How is the business managed? What are its strength weaknesses? What is the business
capacity to generate the funds to repay?
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Capital
How solid are its financial and human resources? Are financial resources matched with
adequate human resources?
Conditions
What is the condition of company within the economic cycle? Will the economic and
business conditions impact the borrowers ability to repay?
Collateral
What is the real liquidation value of the collateral? If the creditor is forced to use thee
collateral as payment, what value will be realized at liquidation?
Carelessness
While evaluating, disbursing and monitoring of the credit, professional standards and
tools are not exercised.
Complacence
When the information and data base on which decisions are to be made, are accepted
without any critical evaluation
Connivance
While certain adverse aspects observed in the operating performance, financial position,
debt servicing, etc. are not accounted for which tacit understanding of favoring the client.
Concealment
When certain important facts are deliberately and willfully conceal from the management
which could have undermined security, credit recovery and bilateral relationship with
borrower.
Collusion
When a bank officer and borrower willfully join their hands for achieving some ulterior
motives
Corruption
When official matters are dealt with for financial and non- financial benefits at the cost
of the lender
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Offer Letter:
On the basis of credit advice the branch prepares an offer letter. This letter gives
a detail of the terms and conditions such as duration of facility, securities, mark up etc.
After the disbursement of loan marketing personnel keeps track of every activity
of the party. They continuously observe the financial statements of the customer.
Credit Administration
It is the second section of CREDITS. It performs very important functions for the
bank. After the approval of CREDIT LINE PROPOSAL, it comes to Administration
section. The Administration decides the terms and conditions regarding securities offered
against the facility given to a client. It is a highly responsible task because in case of
default liquidation of securities is an important source for bank for recovery of loan
amount. Other important functions such as adjustment of loans are also handled by
administration section.
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Financial standing
Professional capability
Willful management
Agent transactions
Liquidity risk
Inconsistent government tariff policies and their impact on the selling price, cost
of production, profitability etc
Over capitalization
Types of borrowers
Individuals
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Businesses Entities
Sole proprietorship
Partnership
Limited liabilities Company
Joint venture
Group account\s
Others
Clubs and associates
Government bodies
Traders
Contractors
Transport, storage and warehousing
Property dealers
Manufacturers
While lending to any of these parties the credit officer of BAL has to check the
following things.
1. COMPANY:
Where a company is a borrower the credit officer must ask and keep on
record following information:
The certificate of incorporation
The memorandum and articles of association
The certificate of commencement of business and
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The last annual report containing accounts and balance sheet, to ensure that the
company is legally qualified to do business.
To ensure that the company is currently existing and is in good standing.
Credit officer should check with the registrar of joint stock companies, and
request the borrower to furnish certified List of shareholders (current)
List of directors
With public limited company verify its existence and standing on the stock
Exchange.
It is important that the borrowing company and its directors should have requisite
authorization and power to borrow which should be reflected in the memorandum
and article of association
Also see corporate resolution to borrow.
2. PARTNERSHIP
Where the borrower is a partnership, the credit officer must ask to see,
following documents;
Original partnership agreement/deed and the original certificate of registration
which will contain the name of the partners and the date of their joining the
partnership.
An individual financial statement from each partner
along these, also obtain the following document:
normal loan documents signed by all partners
continuing guarantee duly signed by all partners
Resolution/authorization to borrow and execute loan documents, signed by all
partners.
A letter signed by all partners, requesting the bank to extend credit facilities to
the firm
Certified copy of the partnership deed and certification of registration.
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3. INDIVIDUAL
Lending to an individual the credit officer must ask him to see.
His financial statements for, at least the previous three years.
A continuing guarantee.
The decision of extending credit to an individual borrower is necessarily a
decision for the officer concerned based on the reputation and credit standing as a
client. Depending on the amount advanced, the loan should be secured by a
pledge, hypothecation, or mortgage.
4. GOVERNMENT
Where the government is a borrower, the credit officer must ensure that the
documents of indebtedness are signed by an officer of the government who is duly
authorized in writing and or by the rules of business. Legal counsels opinion should be
taken in these cases.
Types of Proposal:
o New
o Renewal
o Revision
o Single transaction
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Nature of business
Customer Profile:
Date if Incorporation
Market share
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Competitive brands
Liability Details:
It includes liabilities with Allied Concerns and with other banks both funded and
non-funded.
Performance during Last One Year:
Following questions are considered:
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Maximum balance
Minimum balance
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Opening of Account:
Its required that every reasonable effort is to be made for determining the true
character of every would-be account holder.
Due weight age is to be given to the credit report relating to the borrower and his
group. Latest report is obtained from CIB of SBP for funds and non-fund facility
provided.
Financial Summary
It contains:
Balance Sheet
Income Statement
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Industry Overview
It provides an overview of the industry in which a company is operating.
Financial Analysis
Sales & Profitability ratios, Activity Ratios, Leverage Ratios and Liquidity Ratios
are calculated. More over utilization of the plant capacity over the years is also
calculated
TYPES OF FACILITIES
Fund Based
Non-Fund Based
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Letter of guarantee
Letter of Guarantee:
It is a non-fund based facility hence no funds from the bank side are
involved in it.
Parties involved:
Three parties are involved:
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SECURITIES:
Lending is very risky for any bank. Bank covers the risk involved in lending by keeping a
suitable security, which can be tangible as well as intangible. Bank always prefers a
security that is marketable as well as sustains its value (not perishable).
Types of Securities:
Following are various types of securities
Pledge
Hypothecation
Mortgage
1. Pledge:
It is the bailment of delivery of goods from one person to another for some
specific purpose. Two parties are involved:
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Possession is with the bank. Bank keeps the goods in its go downs. Mucaddams
are responsible for the security of the pledged goods.
Borrower is entitled to get back the goods after the repayment of loan.
In case of non-payment bank has the right to sell the goods.
Surplus on sale is paid back to the pledger.
In case of deficit after the sale, bank always has the recourse to the court of law to
recover the deficit.
Agreement of finance
Promissory note
Letter of guarantee
Letter of hypothecation
Letter of continuity
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Letter of arrangement
Letter of disbursement
Letter of authority
Margin:
Bank keeps a margin or cushion for every facility advanced. The margin differs
from case to case depending upon several other factors.
Precautions:
Following are some of the precautions, which are taken by the bank:
Banker should have complete knowledge about the market value of the
commodity pledged. Price should not fluctuate.
Banker must take store the pledged commodity in proper go downs under
suitable conditions
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2. Hypothecation:
It is an agreement to give charge on goods or documents of title to these goods
without conferring possession to the lender.
Promissory note
Letter of Hypothecation
Letter of guarantee
Letter of continuity
Agreement of finance
Letter of arrangement
Letter of disbursement
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Letter of authority
Precautions:
Lender/bank should go for surprise visits to check stocks.
Stock should be insured against all possible risks such as theft, fire etc.
Lender should put the nameplate, which signifies that stock has been
hypothecated.
Before lending bank should make sure that stocks have not been already
hypothecated with any other bank. It can be confirmed from the registrar.
3. Mortgage:
It is the transfer of specific right in an immovable property for securing a
payment of money advanced or to be advanced as a loan or for the performance of an
agreement or settling a future liability.
Parties:
Mortgager:
Who transfers specific rights to the mortgagee. He can get back the specific rights
after the repayment of loan.
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Mortgagee:
He is the lender i.e. bank.
Mortgage Deed:
Mortgage deed is that document through which the mortgage is executed
PT 1 in favor of borrower
PT 1 in favor of bank
Valuation report
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i.
Legal Mortgage:
Title is legally transferred to mortgagee.
Mortgage is to be registered in case the loan amount is greater than
Rs.100.
After the payment of loan, legal title is transferred back to the mortgager
It is executed by the mortgage deed, which is signed by the mortgager
and 2 witnesses. This mortgage deed is registered with the revenue officer.
It is mentioned in the mortgage deed that legal title will be transferred to
the mortgager.
Process:
The original title deeds are submitted with the bank with the covering letter
stating that these documents are submitted with the bank for the purpose of creating an
equitable mortgage.
It is to be registered with the Registrar of Joint Stock Companies within 21 days of the
mortgage agreement.
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No banking company shall make loans or advances against the security of its own
shares.
No banking company shall grant unsecured loans / advances on the guarantee of,
o Any of its directors.
o Family member of director
o Any private company in which banking company is interested.
In arriving at exposure per person weight age of 50% shall be given to
o Documentary credit opened by bank.
o Guarantees/bonds other than repayment guarantees.
In arriving at per party exposure 90% of
o Deposit of party with bank under lien.
o Face value of FIBs lodged by the party as collateral.
o Pak rupee equivalent of face value of special US Dollar bonds converted
at official rate, lodged by the party as collateral shall be deducted.
Aggregate exposure of bank against all its clean facility shall not at any point
exceed the amount of banks capital and general reserve.
Advances given to the employees of bank in accordance with their entitlement.
While granting any accommodation, bank shall ensure the total accommodation
availed by any borrower from banks / financial institution does not exceed 10
tines of the capital and reserve of the borrower.
A borrower who is prepared to inject fresh equity irrespective of the fact that its
equity is negative is eligible to obtain finance from bank to the extent of 10 times
fresh injected equity.
No banking company allow financing facilities whether fund based / non funded
against the shares of companies which are not in central depository system.
Corporate credits was the second last department in which I was been rotated. The most
important department in any bank is considered to be the Credits department. This is, in
my opinion, is also true due to some reasons. Firstly the reason being that in credits
department, the decision-making skills of a person are explored. When you need to make
a decision regarding the credit proposal after due verification, this will give a little stress
to your mind either to sanction the financing or not?
Credits involve very technological procedures and also a lot of exciting activities
because each case varies from the other one. You never become unenthusiastic because
you get an opportunity to walk around new bits and pieces every time.
In this department I worked under the supervision of Mr. Ateeq-ur-Rehman Sidu
(Credits Officer). He was also very supportive to me. He taught me the credit line
proposal from the first step till the end of its filling process. In the nutshell, the credits
department contributed a lot towards my decision-making and learning skills.
CLEARING DEPARTMENT:
Clearing is the arrangement to which collection of cheque, bills and other
instruments payable or deliverable at or through the offices of the members of the
clearinghouses for credit of the customers account for speedy and economic collections.
The clearinghouse members are authorized to send their cheque and instruments in the
clearinghouse established in the State Bank of Pakistan.
Clearing house is the gathering of all the members of different banks and institutions
where they deliver or receive the instruments drawn on them for their clearances through
their branches in the city.
97
Advantages of clearing:
1) Systematic arrangement for the collection and clearance of cheque.
2) Speedy and economic collection and clearance of cheque.
3) Clearance of cheque and other instruments of different branches of
different banks in a systematic way without any flow or mistake.
4) The collection and clearance of government bills, instruments and cheque.
5) The collection of government revenue through cheque, pay orders and
drafts payable through State Bank of Pakistan and National Bank of
Pakistan.
6) It avoids the difficulties and cumbrances faced by the branches if they
collect the instruments directly from branch to branch.
7) Confidence among the clearing members is produced.
Role of State Bank of Pakistan in clearing:
State Bank of Pakistan gives the license end enlist them as clearing house
members authorizing to submit their clearance cheque and instruments through
the clearing house established as the office of State Bank Of Pakistan in
particular city.
The clearinghouse advantages are given in the big cities where the State Bank
office is available.
Where State Bank of Pakistan office is not available the clearinghouse functions
in the National bank of Pakistan branch. However the procedure is the same.
The State Bank of Pakistan provides the facility to member banks for clearances
of their cheque drawn on different branches of banks in different parts of their
cities. It would have been more cumbersome and time consuming if they had
been dealing from branch to branch.
98
State Bank of Pakistan maintains the statuary reserve of different banks in their
accounts and all the clearances are made by the debit and credit of these
accounts.
All the payments and receipts are settled to these accounts without any difficulty.
The State Bank of Pakistan chalks out clearing house timings and its procedures.
CLEARING OUTWARD
When the customer deposits cheque & other instruments of other banks for
collection, we send the cheque in outward clearing.
PROCEDURE:
Clearing stamp with next date is fixed on the cheque and pay-in-slip.
99
The cheque is sorted bank wise and respective schedule id attached with
these cheque.
Total of bank wise schedule will tally with total in clearing register and
clearing summary.
All cheques along with bank wise summary are sent to main branch where a
revised summary is prepared.
The representative of the bank takes all the cheque of all the branches to the
branches to the clearinghouse at State Bank of Pakistan.
CLEARING HOUSE
In the clearinghouse the representatives of all the banks gather and exchange their
instruments. They enter the total amount of cheque delivered and received in their
summary sheets. The total of schedule received tally with the total of summary.
Clearing cheques received from other banks are sent to branches, which will clear the
cheque and instruments to the respective accounts. Some cheque is returned unpaid
with the reasons mentioned in the cheque return memo. IBCA for net amount is sent
to main branch.
In the 2nd house clearing cheque are returned and exchange by the representatives of
the banks. A summary is prepared for cheque received and delivered and net position
is ascertained. Amounts are settled through SBP accounts.
After cheque is returned, the main branch sends IBCA for net amounts to the
branches. Computer entries are made for (-) credits for returns and debits to Main
office A/C.
100
FINANCIAL HIGHLIGHTS
For the year ended the Banks profit before provision and taxation stood at Rs.
3,263.635 million as compared to Rs.2,965.588 million for the previous comparable
period, which is 10% higher than that of last year . This increase in profit is primarily
attributable to overall increase in business volume.
101
The Bank has successfully carved in the market an enviable niche for its
consumer products. Auto Finance, Credit Cards and Home Loans have significantly
contributed to the profit and growth in addition to contributions made by the core banking
activities during the period under review. Bank is indisputably market leader in some of
these initiatives.
Bank continues to make significant in-roads into the Agri-rural finance, SME,
corporate and investment banking sectors of the economy. With expanding network of
branches, bank is ideally poised and positioned to carry forward the success. It acquired
the operations of Shamil Bank of Bahrains B.S.C, Bangladesh operations for US$ 17.88
million under an agreement dated November 1, 2004. The entire undertaking of the
Bangladesh operations including all the properties, assets and liabilities and all the right
and obligations were taken over. It has also successfully obtained license to establish
banking operations in Kabul, Afghanistan. It continues to strengthen its presence in the
market place and as of June 30, 2007, bank has a nationwide network of 195 branches
that includes 23 Islamic Banking branches and five overseas branches 3 in Bangladesh, 2
in Afghanistan and one offshore banking unit in Bahrain. Banks plan is to add more
branches to the network during the 2nd half of 2007.
PACRA, a premier rating agency of the country, has rated the Bank AA (double
A), Entity Rating for Long Term and A1+ for the Short Term. These ratings denote a very
low expectation of credit risk, strong capacity for timely payment of financial
commitments in the long term and by highest capacity for timely repayment in the short
term, respectively. Further, the unsecured subordinated debt (Term Finance Certificates)
of the Bank has been awarded a credit rating of AA- (double a minus).
In compliance with the requirement of State Bank of Pakistan, Bank has in place
an approved integrated risk management framework for managing risk, market risk,
liquidity risk and operational risk as evidence by its Board approved Risk Management
and Internal Control manual and a dedicated Risk Management Division (RMD) has
102
been created with the Head RMD reporting directly to the Chief Executive Officer, Risk
management Division has been structured to address credit, market and operational risk
and a team of suitable person has been hired.
In summary, Bank had successful half-year results, as of June 30, 2009. This was
achieved primarily due to its long-standing and stable customer base, coupled with the
Managements well-defined, focused strategies and positioning. Accordingly the Board
would like to thank its valued clients and Correspondents and also to acknowledge the
support of the State Bank of Pakistan, Ministry of Finance and other regulatory
authorities for their invaluable support, which has greatly facilitated its work. The Board
would also like to place on record its appreciation for the hard work, dedication,
professionalism and sincere efforts of the senior management, officers and staff of the
Bank.
RATIO ANALYSIS
Ratio analysis includes calculating different ratios for the
organization of the figures taken from its financial statements. The
basic purpose of ratio analysis is that absolute figures often give
103
Mixed ratios
PROFITABILITY RATIOS
The continued viability of any bank depends on its ability to earn an
appropriate return on its assets and capital. Good earning performance
enables a bank to fund its operations, remain competitive in the
market and increase or decrease in market funds.
Profitability reflects not only the
quantity and trend in earning but
also the factors that may affect the
sustainability
or
quality
of
earnings.
2007
2008
104
1325389
100
3506737 x 100
25816457
21194254
= 6.25%
= 13.58%
Significance:
o It is a more specific measure of sales profit ability. It is used to
measure over all profit ability and hence it is very useful to
proprietors.
o The ratio is very useful as if the net profit is not sufficient, the
firm shall not be able to achieve a satisfactory return on its
investment.
o It also indicates firms, capacity to face adverse economic
conditions such as price competitions, low demand etc.
o Higher is better is the profitability.
Analysis:
The above ratio indicates that the proportion of profit has seen
increase over the years from 6.25% in 2007; to 13.58% in 2008 the
increase is significant. So it is a healthy sign for bank.
7
X 100
Gross Income
105
2007
15235688
100
2008
x
16645178 x 100
6142240
3290623
= 436%
= 271%
Significance
This ratio shows how well the organization is managing its
operating cost. Operating expenses are those expenses which are
incurred indirectly for the generation of revenue. A large portion of
these expenses is the administrative expenses which are incurred on
management of the organization. It is necessary to cut down these
expenses especially when interest rates on advances are declining
leaving a narrower margin for payment of such expense. So Lower it is
better it is.
Analysis
Operating expenses for the bank decreased in 2008 from 436%
in 2007 to 271%in 2008 and which is a good sign as it shows
decreased costs of the banks and hence increased net income.
106
X 100
Total deposit
2007
5952637
100
2008
x
8383322 x 100
273172088
239480772
= 2.49%
= 3.07%%
Significance
This ratio measures banks ability to cover administrative expenses by spreading over
large number of depositors. Total deposits have been used as base as they are main
business activity of bank. A declining trend is desirable.
107
Analysis
In 2007 banks administrative expenses were 2.49% and in 2008
they are on rising side i.e. 3.07%
2008
x
25816457x 100
100
330679872
275511483
= 7.96%
= 7.81%%
Significance
This ratio indicates the efficiency with which total assets have
been utilized to generate net interest income. If a bank has ROA on a
higher side but the relation of net interest income to total assets is not
very significant, this may translate into the fact that bank is relying on
108
Analysis
It is decreasing which is unfavorable. It means bank is not able to
utilize its assets efficiently in generating its main stream income. It was
7.96% in 2007, 7.81% in 2008.
RETURN ON ASSETS
Net profit after tax
x 100
Total assets
2007
1906672
275511483
= 0.69%
2008
x 100
5004600x 100
330679872
=1.51%
Significance
ROA is the most comprehensive measure of banks earning
capacity. Net profit margin ignores efficiency concept while total asset
turn over ignores earning perspectives. ROA takes both perspectives
into account. Thats why it is most widely used indicator for
109
RETURN ON EQUITY
Net profit after tax
x 100
2008
1325389x 100
3506737x 100
11827209
17414154
= 11.21%
= 20.14%%
Significance
110
is
of
great
importance
to
the
present
and
prospective
111
x 100
Total assets
2007
2008
3290623x 100
6142240x 100
275511483
= 1.19%
330679872
= 1.86%
Significance
112
This ratio is increasing in the year 2008 but shows decreasing in year
2007. Over all non markup income is increasing for the Bank. It is a
positive sign.
x 100
Total assets
2007
2008
= 0.93%
2554019x 100
= 1.37%
4535382x 100
275511483
330679872
Significance
113
2007
2008
3296623x 100
6142240x 100
149942717
= 2.19%
171031183
= 3.59%
Significance
Advances are the main use of banks assets. So it is necessary that bank
earns sufficient value of income on its investment of risk assets. So a steadily rising
trend is desirable.
114
Analysis
In year 2008 it is higher than 2007. This is a good sign.
LIQUIDITY RATIOS
Liquidity represents the ability of a bank to efficiently and economically
accommodate deposits withdrawal as well as fund increase in assets. A
bank has a liquidity potential when it has the ability to obtain sufficient
funds in a timely manner at a reasonable cost. Illiquidity is a primary
factor leading to a banks failure whereas high liquidity helps otherwise
weak institutions to remain funded during the period of difficulty.
Liquidity reflects the adequacy of
the
institutions
current
and
115
CURRENT RATIO
Current Assets
Current Liabilities
2007
2008
259122914x 100
311886135x 100
254203477
= 1.02
302091341
= 1.03
Significance
difficulties.
An
increase
in
the
current
ratio
represents
116
100
Deposits
2007
2008
117
149942717x 100
1171031183x
239480772
100
= 62.61%
273172088
=62.62%
62.74%
Significance
2007
62.61%
2008
This
is
the
62.48%
perhaps
most
important
2007
2008
ratio as far
as financial
118
of its deposits in cash form with it as well as with SBP to meet the day
to day requirements of its customers. So there is a trade off between
risk and return. If the bank wants to increase return, it will go towards
more lending thereby enhancing risk and if the bank focuses on
liquidity, it will have to forego return. Current accounts to are the
lowest cost source of funds. The bank should strive to attract current
accounts to increase this ratio, so as to control its interest expense.
The bank should decide upon the mix of its sources and uses after
taking
into
consideration
the
CRR
and
SLR
requirements
and
2008
239480772x 100
273172088x 100
275511483
= 86.92%
330679872
=82.61%
Analysis
This ratio explains how much deposits are in percentage and trend
shows a decrease from 2007 to 2008.
119
120
2007
2008
15235688
5004600
1906672
= 7.99
16645178
=3.32
Significance
This ratio measures banks ability to pay financial charges. Interest expense is
main expense of bank just like cost of goods sold. So higher the ratio better is the
ability of bank to pay this compulsory obligation and hence better is the liquidity
potential of bank.
Analysis
We observe a decreasing trend which is not favorable.
121
2008
149942717 *100
171031183
275511483
= 54.42%
330679872
=51.72%
Significance
This ratio indicates proportion of advance to total assets. This is
main earning assets of bank. It has two distinct features. It is most
risky earning asset and highest return getting asset. As we know, a
proper balance should be maintained between risk and return so bank
122
GEARING RATIOS
These ratios measure the extent to which banks resources have
been geared by debt i.e. financed by debt in relation to share holders
equity. It takes into account total debt, capital employed, shareholders
funds and total assets and then on the basis of all these the proportion
of debt is compared and it helps in understanding that what proportion
of needs should be met by debt and how much through equity.
123
2008
263684274 *100
313265718
11827209
= 22.29%
17414154
=17.98%
124
Significance
It shows amount of long term debt per rupee of equity. In case of
manufacturing concern, acceptable ratio is 40:60. This ratio high lights
composition of capital employed of bank. In a banking concern this
ratio could be 3:1
Analysis
Debt equity ratio of BAL is showing decreasing trend. It means that
company is trying to rely on its own resources and increasing its
Capital.
2007
2008
263684274 *100
313265718*100
275511483
= 95.7%
330679872
=94.73%
125
SIGNIFICANCE
This ratio indicates the extent to which assets have been
financed by debt. This ratio has a direct bearing on financial risk of
bank. In manufacturing concerns 50% is a desirable proportion of
assets financed by debt. However a banking concern, ratio up to 90%
is acceptable as whole structure of banking is based on funds provided
by the depositors.
Analysis
This ratio for bank is same over years and 94% assets are financed
through debt.
126
2007
2008
11827209 *100
17414154*100
275511483
= 4.29%
330679872
=5.27%
Analysis
This ratio shows that how much banks assets are financed by internal
resources. In year 2008 it is improved from 4.29% to 5.27%, which is
not bad but bank should focus to improve this ratio.
127
Economic forces
Competitive forces
Opportunities
The opportunities on which bank Alfalah can capitalize upon are delineated as under.
128
Going global could have been termed as a fad a few years ago, but now for those
business organizations that want to survive and thrive globalization has become the order
of the day. In order to increase the bottom line figure, it really is crucial. But the senior
management would start implementing this course of action once they feel that they have
got a strong hold in Pakistan.
THREATS
The predominant threats Bank Alfalah is facing at the moment are discussed in the
following lines.
1) Private Sector Banks
Bank Alfalah Limited is at present facing really tough competition from not only the
first line international banks (ABN AMRO, Standard Chartered, Citi Bank) but is also
having a neck to neck race with other privatized banks such as Askari Commercial Bank
Limited, Union Bank, Prime Commercial Bank, Faysal Bank Limited, Bank Al-Habib
Ltd etc. All the new schemes launched by these banks and their plans to expand branch
networks are a real threat for Bank Alfalah Limited.
service, then it might prove to be the start of downfall for Bank Alfalah Limited, unless
and until Bank Alfalah Limited raises its level of service and product feasibility to the
international standards.
4) If Pakistani Banks (Especially State Owned Banks), Backed By Huge
Network Improve the Service They Give And Their Employee Skill Set
State owned banks like National Bank of Pakistan and Habib Bank Limited have
huge networks, they have the experience, but the only set back they have is below par
service and lack of motivation amongst the employees. If their corporate strategy is
altered, and the managerial policy is revitalized, enabling them to improve upon the
service they give and enabling them to convert their work force into human capital then
such financial institutions backed up by their huge networks pose a potential threat to
Bank Alfalah Limited. So, Bank Alfalah Limited should endeavor to expand their branch
network as efficiently as possible and as soon as possible.
5) Terrorist Image of the Country
After the 9 / 11 incident every kind of transaction that uses to take place with the
outside world has assumed a different mode. The trade finance transactions are the bread
and butter for the commercial bank, were also hampered by that terrorist attack on 11th of
September i.e. the magnitude of orders the exporters were receiving decreased by a great
deal, but as far as our image in the international community is concerned there is still a
considerable room for improvement. If this situation further aggravates rather than
improving, the trade finance business would really be hampered, and one of the major
earning avenues for Bank Alfalah Limited will loose its footings. This fact poses a real
threat to the sanctity of Bank Alfalah Limited.
6) Inconsistency in Government Policies
131
STRENGTHS
The predominant strengths of Bank Alfalah Limited are
1) Humble Management
The senior management of Bank Alfalah Limited is considerably humble. Their
humility is an integral part of the organizational culture of the bank. The modern
management techniques have discarded the bureaucratic style of management in which
employees were treated as servants if not as slaves. In the contemporary business world
employees are said to be the biggest and the most crucial assets of a business concern,
specifically if we are talking about a service industry and this is precisely the
management policy Bank Alfalah Limited follows. The humility of the management
serves as a big morale booster and encouragement catalyst for all employees in general
and new inductees in particular.
132
the Muslim world). BCCI was acquired by Habib Bank Limited (a nationalized bank) and
as a result BCCI became Habib Credit and Exchange Bank (H.C.E.B). The bank
functioned under this particular name for six years and then Al-Nahayan family bought
70% of its shares from Habib Bank Limited and renamed the institute as Bank Alfalah
Limited. Thus in real terms the same family reinvested in their lost project and tried to
rejuvenate their brainchild. This reinvestment shows the investors trust, commitment,
and perseverance to transform Bank Alfalah Limited into one of the strongest financial
houses of Pakistan. The Al-Nahayan family is a royal family and this fact further adds
to the banks inherent strength.
3) Kaizan
Kaizan is a process of continuous improvement in production and every aspect of
value added (Japanese). In a very short time span the management of Bank Alfalah
Limited has been able to develop its image in a very effective and efficient manner.
Through the laborious efforts of the top management and the employees, the entire
organization as a whole has been able to continuously add its prestige as a reliable,
service oriented, and flourishing financial institution. When we compare the image of
Habib Credit and Exchange Bank with that of Bank Alfalah Limited we find a world of
difference, and when we compare the image of Bank Alfalah Limited at its inception with
its present image we find an even greater difference. This fact proves the thesis that there
has been continuous value addition. The number of individuals and corporate entities that
feel comfortable while dealing with Bank Alfalah Limited is increasing on a daily basis.
133
In the very first year of its inception Bank Alfalah Limited closed its operations at
a deposit portfolio of Rs. 7 billion, at the end of the second year the deposit portfolio had
risen to Rs. 14 billion. Thus Bank Alfalah Limited is growing at a multiplier rate of 50%.
The profit before provisions and taxation of your bank for the year 2006 stood at Rs.
3.264 billion which was 10% higher than that of last year. The deposit grew by 7.7% and
stood at a figure of Rs. 239.509 billion while advance portfolio grew by 26% and showed
a figure of Rs. 149.999 billion. When Bank Alfalah Limited started its operations it only
had three branches and in a short time span the branch network has expanded to 195.
5) Vastly Experienced Management
The people who occupy the top positions in Bank Alfalahs management
hierarchy are certainly no mugs at what they do. Rather they are as capable and as
competent as they come. Their superior management skills certainly do create a
synergistic effect when coupled with the enormous amount of trust sponsors have put in
the management. One of the most evident proofs of above average management expertise
are the deposit portfolio growth, profitability growth, and branch network growth figures
shown under the previous heading.
6) Highly Trained Human Resource Department; Transformation Of Work
Force Into Human Capital
One of the most significant catalysts, management of BAL had incorporated---and
it still is incorporating---in the organization, when H.C.E.B was transformed into Bank
Alfalah Limited, was induction of young and energetic business graduates. This was done
in order to achieve quite a few objectives; one was to raise the overall skill level of the
work force so that service provision could be improved and the second objective was to
reduce the average age of Bank Alfalah Limiteds employees so that an overall sense of
change is trickled down to the grass root level of the organization. Bank Alfalah Limited
134
has an excellent selection / recruitment and training program which are undertaken at its
Training and Development Center, Human Resource Division Karachi.
7) Superior Consumer Finance
In contemporary banking consumer finance has assumed immense significance, as
it is that department of a commercial bank whose personnel directly and extensively deal
with the client body. One of the most predominant sub departments of consumer finance
is Alfalah Car Finance. The customer interface is greater in the consumer finance
department, and the diligent staff of Bank Alfalah limited enriched with its superior
service and relationship skills attracts / persuades these clients to develop relationship
with Bank Alfalah Limited in the arena of corporate banking as well. Thus a strong
consumer finance department really helps the bank to expand its corporate banking
business.
8) Crucial Location Of Branches
All the forty five branches of Bank Alfalah Limited are located at extremely
crucial and vital locations, which is indeed a very significant factor towards earning more
profit. Moreover all of the branches are very well furnished which is an integral
characteristic of a good bank in this age of consumerism.
9) Image Building Activities
Activities such as building of Alfalah Square at Liberty Lahore, the China Khan at
the Alfalah Square, Alfalah Mini Golf Course, and Shahdin Manzil (proposed main
branch, Lahore at The Mall, under construction) have really contributed a lot towards the
image building process of Bank Alfalah Limited. Such activities also make people aware
of the rejuvenation process of Bank Alfalah Limited. Such activities are classified as
135
strength because they involve people in the change process that contributes a lot towards
building customer loyalty.
WEAKNESSES
The chief weaknesses are enlisted as under
1) Small Size
Bank Alfalah Limited is small in size; there is no doubt about this fact. Although, as I
mentioned in the strengths section, the branch network is expanding at a phenomenal rate
but still the size is not big enough as compared to some of the big banks present in the
market. Bank Alfalah limited has 189 branches in the whole of Pakistan. A huge branch
network is always an invaluable asset for any bank. Customers simply love it when they
could see another branch of their own bank at every turn they take. Extensive branch
network might reduce per branch profit but it is very likely to raise the overall profit
figure for the entire organization as a whole.
136
The contemporary banking all over the world has taken a unique turn i.e. they have
made job rotation an integral part of their management philosophy. Job rotation adds
value to every single employee, as he is able to perform a variety of jobs related to
banking profession. Moreover job rotation increases the human capital pool of the
organization as every one is trained in more than one sphere of banking. Bank Alfalah
Limited completely lacks this.
5) Foreign Banks Still Are A Little More Prestigious
Although Bank Alfalah Limited is continuously adding to its prestige, but still it can
not be rated as a bank with the same repute as International Banks functioning in
Pakistan, for instance ABN AMRO Bank, Citi Bank and Standard Chartered Grindlays.
Banks function as custodian of peoples possessions, act as their agents, represent clients
in trade dealings outside the country, and give different types of guarantees and in all of
these transactions repute plays a central role. And when it comes to repute foreign banks
have a little more of it as compared to Bank Alfalah Limited.
6) Bank Alfalah Limited Does Not Possess Foreign Network
Foreign banks and some local banks having international network have this edge over
Bank Alfalah Limited. Banking transactions regarding trade finance constitute a very
important part of contemporary banking and moreover they are said to be the bread and
butter for the commercial bank. Bank Alfalah Limited, for such transactions has to rely
on its correspondents and agents in other countries, and naturally has to pay them some
remuneration --- an expense banks having foreign network do not have to incur.
137
Bank Alfalah does embark upon occasional sales promotion activities, it also gives
advertisements in the print media, but it has never flashed an advertisement on the
television screen, which is said to be the strongest of all Medias. Some other commercial
banks are really capitalizing on the power of this media; examples are Askari commercial
bank, Muslim commercial bank, Habib Bank Limited etc.
INDUSTRY ANALYSIS:
1) External Factor Evaluation (EFE) Matrix
External factor evaluation matrix is a very useful tool towards assessing as to what
are the factors that constitute the set of the most significant opportunities and threats. I
found it considerably enlightening because of its two dimensional approach towards
assessing an organization i.e. this particular matrix not only considers the relative
importance of the opportunities and threats by assigning them weights but it also allots
the factors rates on a one to four scale depending upon the kind response the organization
is giving to the opportunities and threats.
In the summer break I did my internship at Bank Alfalah Limited, Garden Town
Branch so assessing the opportunities and threats for Bank Alfalah Limited did not pose
any serious difficulties. But since I was also suppose to weight and rate the opportunities
and threats I had to go to the bank in order to get some views from the members of the
organization as to what do they think about the relative importance of the factors and
what is their view point regarding their organizations response to these opportunities and
threats.
The resultant score of 2.23 shows an average External position of the bank.
138
OPPORTUNITIES
Extension Of Local Branch Network
Establishing Foreign Branch Network
Capitalizing On Information Technology
Unexplored Market Of MNCs
More customers are willing
THREATS
Private Sector Banks
New Trade Policies
Network Expansion By Foreign Banks
Pakistani Banks Improve Their Services
Terrorist Image Of The Country
Inconsistency In Government Policies
TOTAL
WEIGHT
RATING
0.15
0.10
0.10
0.10
0.05
3
1
3
3
1
WEIGHT
RATING
0.10
0.05
0.10
0.05
0.10
0.10
3
1
3
3
2
3
WEIGHTED
SCORE
0.45
0.10
0.30
0.30
0.05
WEIGHTED
SCORE
0.03
0.05
0.30
0.15
0.20
0.30
1.00
2.23
139
STRENGTHS
Humble Management
Commitment Of Sponsors
Kaizan
Phenomenal Growth In Profitability
Vastly Experienced Management
Highly Trained HR
Superior Consumer Finance
Crucial Location Of Branches
Image Building Activities
WEAKNESSES
Small Size
Lack of research cell
Uneven treatment with customers
Skill Set Of Employees Is Not Up To The
Mark
Foreign Banks Still Are A Little More
Prestigious
Bank Does Not Possess Foreign Network
No Advertising In Electronic Media
TOTAL
WEIGHT
0.06
0.08
0.10
0.05
0.02
0.05
0.10
0.02
0.02
WEIGHT
RATING WEIGHTED
SCORE
3
0.18
0.24
0.4
0.2
0.04
0.15
0.3
0.08
0.02
WEIGHTED
RATING
SCORE
3
4
4
2
3
3
4
1
0.15
0.45
0.05
0.05
4
2
0.2
0.1
0.15
0.45
0.04
0.16
0.02
0.04
1.00
1
4
0.02
0.16
3.15
140
Each factors weight is multiplied by the factors rate and hence the weighted score is
observed. Here advertising, turnover, organizational culture, market share etc are
considered to be the various critical success factors.
For comparison with Bank Alfalah Limited, I have chosen Askari Commercial Bank
and Muslim Commercial Bank. The reason for such a choice is simple. As Bank Alfalah
Limited is a local bank; its primary competitors are the other local private banks. Other
than Bank Alfalah Limited, these two banks are providing the best services to the general
public.
BANK
ASKARI
ALFALAH COMMERCIAL
MCB
CRITICAL
Sr.
BANK
SUCCESS
WEIGHT LIMITED
No.
FACTORS
Wt.
Wt.
Wt.
Rating
Rating
Rating
Score
Score
Score
1 Market Share
0.03
2
0.06
2
0.06
3
0.09
2 Price Competitiveness 0.02
3
0.06
2
0.04
2
0.04
3 Advertising
0.15
3
0.45
3
0.45
3
0.45
4 Financial Position
0.03
4
0.12
4
0.12
3
0.09
Variety
0.02
4
0.08
2
0.04
3
0.06
5
Of Products
6 Online Banking
0.05
0
0
3
0.15
4
0.2
7 Location
0.15
3
0.45
1
0.15
1
0.15
8 Domestic Networking
0.1
4
0.4
2
0.2
2
0.2
9 International Network
0.05
0
0
4
0.2
4
0.2
10 Customer Loyalty
0.1
4
0.4
3
0.3
3
0.3
Environment
0.05
3
0.15
4
0.2
3
0.15
11
& Decor
Customer
0.15
4
0.6
3
0.45
2
0.3
12
Relationship
Efficiency
0.05
3
0.15
3
0.15
3
0.15
13
of Staff
14 Brand Recognition
0.05
2
0.1
2
0.1
3
0.15
TOTAL
1
3.02
2.61
2.53
141
1.
2.
3.
4.
5.
6.
7.
8.
9.
OPPORTUNITIES
1.
1. Extension Of Local Branch
Network
2. Establishing Foreign
2.
Branch Network
3. Capitalizing On
3.
Information Technology
4. Unexplored Market Of
MNCs
4.
5. More customers are willing
THREATS
WEAKNESSES
1. Small Size
2. Lack of research cell
Humble Management
Commitment Of Sponsors 3. Disproportionate Presence
Of Old Staff
Kaizan
4. Skill Set Of Employees Is
Phenomenal Growth In
Not Up To The Mark
Profitability
5. Foreign Banks Still Are A
Vastly Experienced
Little More Prestigious
Management
6. Bank Does Not Possess
Highly Trained HR
Foreign Network
Superior Consumer Finance 7. No Advertising In
Crucial Location Of
Electronic Media
Branches
Image Building Activities
SO STRATEGIES
WO STRATEGIES
Expansion of branch
network to increase
1. Increase Branch
profitability
Communications
Capturing the market
Network
currently held by the
2. Product development
foreign banks
3. Expansion to foreign
More investment in the
countries to facilitate
projects of Multi National
Expatriates in transmitting
companies
money
More Advertisement to
4. Training of the existing
promote the
employees to increase their
increasing branch network
efficiency and effectiveness
ST STRATEGIES
WT STRATEGIES
142
143
Return on equity has increased indicating that the bank has become more
attractive for its investors
3.50
144
Political instability
Competitive pressure and Demand variability
Competitive Advantage (CA)
Becoming increasingly Competitive
Banks customer base is expanding and strong Customer loyalty
Providing services all over Pakistan
3.50
-4
-3
-3.33
-3
-2
-3
-3
145
-2.67
Conservative
Aggressive
3
2
1
-4
-3
-2
-1
-1
-2
-3
Defensive
-4
Competitive
-5
From the examination and evaluation of the above mentioned SPACE matrix for Bank
Alfalah Ltd.,it can be represented that the bank is currently been falling into the region of
being AGGRESSIVE, which shows the banks is in an excellent position to use its internal
strengths to take advantage of external opportunities overcome internal weaknesses and
avoid external threats.
146
Manages business portfolio through relative market share position and industry
growth rate
Medium 0.5
Low 0.0
High 1.0
Stars
II
Question Marks
I
Bank
Medium 0.5
Alfalah
Limited
Cash Cows
III
Dogs
IV
Low 0.0
147
Strong
3.0 to
4.0
4.0
High
3.0 to 4.0
Average
2.0 to
2.99
3.0
Weak
1.0 to 1.99
2.0
1.0
II
III
IV
VI
3.0
Medium
2.0 to 2.99
Bank Alfalah
2.0
Low
1.0 to 1.99
VII
VIII
IX
1.0
148
Quadrant II
Quadrant I
1. Market development
1.Market development
2. Market penetration
2. Market penetration
3. Product
development
4 Horizontal
integration
WEAK
COMPETITIVE
POSITION
3. Product development
4. Forward integration
5. Backward integration
6. Horizontal integration
STRONG
6. Liquidation
7. Concentric
diversification
COMPETITIVE
Quadrant III
Quadrant IV
1. Retrenchment
1. Concentric
5. Diversification
POSITION
149
2. Concentric
diversification
3. Conglomerate
diversification
diversification
2. Horizontal
diversification
4. Divestiture
3. Conglomerate
diversification
5. Liquidation
4. Joint Venture
150
151
PRODUCT
Due to trend setting and innovative banking, Bank Alfalah presents a range of
quality products with revolutionary perks and convenience. Alfalah provides a wide range
of products/ services to its customers, which can be compared with any foreign, or
national bank in terms of quality and reliability. The acceptability of these products is
very much effective to the customers. Bank Alfalah has now achieved a competitive
advantage over other banking institutions by offering a complete range of banking
solution for its valued customers.
As per current laws and State Bank of Pakistans regulations, customers are
required to provide proof of their identity and a satisfactory introduction to open any
Bank Account. Term Deposit account can be opened by providing a copy of national
identity card only.
Here is an overview of different products and services formulated by Bank Alfalah.
Deposit Products
Likewise, Bank Alfalah has formulated a number of accounts for the deposits of
customers, with unique features. These are:
152
Current Accounts
This account offers unlimited deposit and withdrawal facility to facilitate business
transactions. There is absolutely no limit on number of transactions deposits and
withdrawals. Individuals, partnerships, companies, associations, clubs, societies, and
NGOs are eligible to open current account.
Saving account is the most common account for individuals. Saving accounts are
designed to mobilize savings primarily from a large number of individuals and
households. Any one or more individuals or partners can open a PLS saving account with
the bank.
ROYAL PROFIT:
Royal profit is a highly yield rupee account intended to provide higher rates of
profit to high net worth customers and greater flexibility and convenience in terms of
transactions.
153
Initial deposit for account opening is Rs. 1,000 with no minimum balance
requirement.
Free debit card can be used to withdraw cash and make purchases at thousands of
outlets across Pakistan which provides access to funds 24 hours a day.
Alfalah Education:
Alfalah Education is a Term Deposit product with No Additional Cost (NAC)
education insurance cover for account holders with school going children. Alfalah
Education Account , beside offering competitive return on TERM DEPOSIT , offers
tuition fee reimbursement of children for 15 years of schooling or up to their 20th
birthday, in the unfortunate event of the death (either through accident, illness or natural
causes) of the main breadwinner (account holder) parent.
Alfalah Education offers a competitive return on term deposit and secondly, it creates a
contingency provision for our school going youths education in the hapless event of the
death of any major breadwinner. The product seems rewarding in the current scenario of
increasing number of children of school going age and the general public interest in
quality education of their off springs.
154
Alfalah Mahana Amdan is a 3 year TDR with expected rate of profit of 10% p.a.
This term deposit will provide an opportunity to individual/joint customers to enjoy
higher returns that will automatically be credited to his/her current/PLS/RP/BBA account
on 1st working day of each month.
This facility is not available for business and corporate customers.
Any Pakistani resident over the age of 18 can open this account. This account is
for individual/joint customers only. Other customers like companies, corporate etc
are not eligible for opening of this account
Minimum balance requirement for opening this account is Rs. 10,000/- with a
maximum of Rs
1, 000,000/-
Three debit transactions are allowed in a month either through cheques or Debit
Card/POS machine.
The bank will issue the first cheque book of 25 leaves and a Debit card free of
cost.
Profit will be calculated on monthly minimum balance basis and will be credited
in the account on quarterly basis. No profit shall be payable for a particular
month, if the minimum balance for any particular day of said month falls below
the amount of Rs. 10,000/-.
Only one account per customer will be allowed across all branches of Bank
Alfalah.
NOTICE DEPOSITS
155
These are the short-term deposits of customers where the notice is to be given to the
bank prior to the withdrawal. Profit rates for these deposits are:
07 - 29 days
4.00%
4.50%
TERM DEPOSITS
Term deposit is a fixed PLS account where the profit rates increase with the amount as:
Tenures
Rates of profit
1 Month
3.50%
3 Months
4.00%
6 Months
4.25%
1 Year
4.75%
2 Years
6.00%
5 Years
6.50%
Salient features:
Profit paid on maturity of respective term profit rates increase with tenure and
amount
156
ON-LINE SERVICE
Bank Alfalah provides on-line services to its customers. At present, this service
facilitates the customers to deposit and transfer their amounts from one branch to another
of BAL. It is being planned to launch a universal account to update this facility and make
it more extensive.
Your Bank Alfalah Credit Card is your partner everywhere and is globally accepted and
welcomed at locations displaying the VISA logo. It is accepted at nearly 30 million
157
locations in more than 150 countries around the globe and over 18,000 Bank Alfalahs
establishments in Pakistan.
Alfalah VISA lets you pay for shopping, travel, entertainment, meals and much more.
Card members are facilitated through a number of promotions from time to time. In
addition, there are a number of strategic business partnerships with leading local and
international brands for purchase of home appliances at exciting Step-BY-Step (SBS)
monthly installment plan with free home delivery at lowest interest rates.
CAR FINANCE
Financing a car at Alfalah Bank is very easy with the due favor of no collateral
requirement. Alfalah Car is a consumer-financing scheme that enables a customer to own
158
his desired car at easily affordable and flexible installation with minimum down payment
and insurance. All maintenance and insurance expenses are borne by the bank because of
the reason that the ownership of the car is still with the bank even after the signing of the
contract. The bank is just receiving the rentals from the customers. All businessmen,
Corporate Employees, Salaried and self-employed professionals having net take home
income in excess of three times the monthly installment are eligible to take the advantage
of this scheme.
The customer is able to finance their vehicle(s) the smart way with us. Bank will
purchase the vehicles(s) of the customers choice and later rent to the client at a pre
agreed rental amount. Ownership of the vehicle(s) is transferred to the client upon
satisfactory payment of all the rentals by the time the customers security deposits period
expires.
159
c) At Bank Alfalah, 65 branches are designated to deal with AKF business in the
entire country.
d) The purpose of the AKF is financing procurement of raw material, finished goods
and receivables of SME businesses.
MONEYGRAM
Bank Alfalah limited, in collaboration with Money Gram, offers remittance service
to Pakistan. Money Gram is person to person money transfer service that allows
consumers to receive money in just a few minutes. Money Gram is available in over 156
countries and in more than 40,000 locations worldwide.
With Money Gram your money is transferred immediately and usually arrives at the
receiving end within 10 minutes, other services can take days or weeks. There are no
complicated procedures and you do not need a bank account or a credit card. Whats
more, the receiver is handed the cash immediately.
160
In addition to the above mentioned products offerings by the bank, we are engaged in
providing some extraordinary facility services to our customers as well. The details are as
under:
Rupee travelers cheques are being pioneered by MCB Bank limited initially but
these days many banks are engaged in providing this service to the clients. Rupee traveler
cheques are been issued at different denominations at Bank Alfalah.
Relationship Banking
Relationship banking is basically a term been used for the purpose of the banking 365
days all along and 24 hours a day. The Bank prides itself on recognizing and fulfilling the
varied financial needs of its customers. In doing so, it tries to develop and build upon
relationships that are based on mutual trust and confidence: the very essence of what they
call "Relationship Banking". A customer can operate his account from any branch in
the country, or through its 24-hour ATMs.
161
peace of mind, Bank Alfalah is the best Trustee amongst all. Because of the reasons that
the bank is providing extraordinary services for the easy lockers.
Phone Banking
24 hours UAN connectivity with unmatched ease and convenience servers our
customers efficiently through interactive Voice Response delivering cards, PIN
generation and other services.
Miscellaneous Services:
o Issuance of Pay Order
162
PRICE
The term pricing refers to:
The key to pricing is to Build value into the product and price it accordingly.
Bank Alfalah has to face the ever-increasing competition in the fabric industry. As the
number of competitors are increasing day by day but still Bank Alfalah enjoys a
reasonable market share with the facts of providing excellent services amongst the
competitors.
BAL provides different products and services to its customers, which have been
discussed in previous section. Pricing of products means the commission to be paid by
the customer in return of services provided by the bank. The price paid for the services
mainly include:
Mark up
Bank charges
These charges and commissions are prescribed on Schedule of Bank Charges (SOC)
that keeps on changing time-to-time, and issued by the bank periodically (generally after
six months).The price charged for all the products and all the services is given in
complete detail in the schedule of bank charges for Islamic banking are as follows:
PLACE
163
Place refers to the means by which our customer acquires your product. This includes the
actual place it is purchased (the shop, the telephone, the web page, the warehouse) as well
as the actual route of distribution. Simply place refers how you will sell your product to
your customers.
The objective of Bank Alfalahs has always been to expand its branch network to
meet clients needs as has been mentioned clearly in the mission statement of the bank. .
Bank is well positioned and geographically poised, to cater for increased business
demands, from its existing potential clientele. Bank Alfalah has 195 branches, spread all
over Pakistan covering major business centers and principle cities. Bank plans to add
more branches to his growing network in the ensuing years.
At present, Bank Alfalah has opened all its branches at commercial and business areas or
near to commercial areas so that the customers or clients face no problem in reaching the
bank. Head Office of Bank Alfalah is situated in Karachi. The detail description of its
branches is as follows:
164
No.
Branch Name
Address
PABX
FAX No
165
Abbottabad
191, Supply
0992-344723- 0992-344728
Bazar, Main
Mansehra Road,
Abbottabad
1
Ahmedpur East
Plot#188, Block
(062)
(062)
Branch
XI, Kutchery
2275504-8
2275503
Road, Ahmedpur
East
1
Arifwala Branch
0457-835717
13
Arifwala
1
Attock Branch
Zila Council
057-2701557- 057-2700248
Building, Kutchery 58
Chowk, Attock City
1
Bahawalnagar
(063)
Mandi,
2277437
2272005-8
Bahawalnagar
1
Bahawalpur Branch
Ground Floor,
062-2889922- 062-2889874
Bldg.No.V/912,
25
Circular Road,
Bahawalpur
1
Bahawalpur Branch
Ground Floor,
062-2889922- 062-2889874
Bldg.No.V/912,
25
Circular Road,
Bahawalpur
1
Bhalwal Branch
Liaqat Shaheed
048-6642647
048-6643709
Road, Bhalwal
1
Burewala
95-C, AL-Aziz
067-3771901- 067-3771905
Market, College
04
Road, Burewala
166
Chakwal
0543-555206- 0543-555220
Tehsil Chowk,
218
Rawalpindi Road,
Chakwal
1
Chaman Branch
Trunch Road,
0826-613440
0826-613488
Chaman,
Balochistan
1
021-2414030- 021-2417006
39
Road, Karachi
2
Clifton Branch
021-2401621- 021-2401627
Karachi
26
Fl-10, Block 5,
021-5833779 - 021-5879175
KDA Scheme 5,
82
Khayaban-eRoomi, Clifton,
Karachi
4
Shahrah-e-Faisal
Progressive
021-4313536- 021-4313539
Branch
Square, Block 6,
38
Gulzar Manzil,
021-7532482- 021-2401627
Jodia Bazar,
84
NP/12/49-50,
Mohammad Shah
Street, Karachi
6
Korangi Branch
Plot No ST 4/2,
021-5050964,- 021-5050653
Sector 12-B,
387
Aiwan-e-Sanat,
Korangi, Industrial
167
Area, Karachi
7
M.A.Jinnah Road
Branch
Place, (Habib
629
Siemens
021-2582114-
021-2582113
Chaurangi,
116
Bank
Bldg.)M.A.Jinnah,
Road / Abdullah
Haroon Road,
Karachi
8
SITE Branch
S.I.T.E. Karachi
9
North Karachi
021-6950805- 021-6986051
Branch
06
Paper Market
Plot No.S.R.7/23,
021-2211353-
Branch
Campbell Street,
58
021-2211243
Paper Market,
Karachi
11
Gulshan-e-Iqbal
Ground Floor,
Branch
Sumera
021-4984937
021-4984971
Apartments, Plot
SB-15, Block 13B, KDA Scheme
No 24, Gulshan-eIqbal, Karachi
12
Stock Exchange
18-20, Karachi
021-2417515-
Branch
Stock Exchange,
19
Building, Stock
168
Exchange Road,
Karachi
13
Ground Floor,
021-2544021- 021-254006
Branch
Building at
24
Surv.No.35 /
Sheet, No.NP-10
(Old
Surv.No.A26/5),
Napier Quarters,
Karachi
14
Bahadurabad
Branch
Bahadur Shah
81
Zafar Road,
Bahadurabad,
Karachi
15
Timber Market
Siddiq Wahab
021-7750635- 021-7733463
Camp, Karachi
16
Defence, Karachi
021-5304167
26th Commercial
street, Defense
Housing Authority,
Phase V, Karachi
17
18
PECHS
Federal B Area
154-S, Block 2,
021-4538423- 021-4314221
PECHS, Karachi
24
021- 6344700
021-6803043
Federal B Area,
Karachi
19
Eidgah Branch,
021-2217290- 021-2217244
Karachi
169
House, Karachi
20
Z-111,112,
021-4398457- 021-4398456
Adamjee Nagar,
Marriot Road
Murad Khan
021-2414138- 021-2412082
Road, Marriot
40
Road, Karachi
22
Hyderi
Al-Burhan Circle,
021-6626066
Block E North
Nazimabad,
Karachi
23
Gulistan-e-Jauhar
30-31, Saima
021-4815926- 021-4815924
Classic, Rashid
Minhas Road,
Karachi
24
021-5887571- 021-5887574
H. A. Phase I)
Street, D. H. A.
73
Phase I, Karachi
25
Hawksbay Road
021-2355873
Market, Main
Hawksbay Road,
Karachi
26
Shershah Branch
D-283, Main
021-2585001- 021-2585005
Shershah Road,
SITE, Karachi
27
Landhi Branch,
021-5034451- 021-5030875
Karachi
36-E, Landhi
Township, Karachi
28
124/A, Block 2,
(021)
(021)
170
P.E.C.H.S, Main,
4386052-5
4386056
021- 4904601
021-4904602
021-4988695
021-4985729
021-2238704,
021-2225941
Karachi
Apartment,
2238717,
194/2/1, Britto
2238722,
Road, Near
2238605
Tariq Road,
Karachi
29
Old Malir
Cantonment
Library, Cantt
Bazar, Malir Cantt,
Karachi
30
Gulshan Chowrangi
Sani Arcade,
Branch
31
Ismailia Jamat
Khana, Garden
East, Karachi
32
021-5312832- 021-5312837
Karachi
Commercial
35
Gizri
34
Sea View
93
97
5, Clifton, Karachi
35
Nazimabad
"Al-Kausar
(021)
(021)
Homes, Plot # 2,
6708980-83
6708978
171
Block-III, SubBlock E,
Nazimabad,
Karachi
1
L. D. A. Plaza
Kashmir Road
Branch
Lahore
5, 042-630
6307836,042-
5614-18
6301193,0426368905
Gulberg, Lahore
125/E-1,Gulberg-
042-5877800- 042-5754900
Branch
III, Lahore
Defence Lahore
G-9, Commercial
042-5729723- 042-5729727
Branch
Area, Phase-I,
26
ICCHS (Defence),
Lahore Cantt.
Lahore
4
Circular Road,
Circular Road,
042-7638256-
Branch
Lahore
58
Township Branch
042-5152831- 042-5113716
Akber Chowk,
Township, Lahore
6
Badami Bagh
29-30,PECO
Branch
Road, Badami
042-7704961
042-7728074
Bagh, Lahore
7
Branch
Allama Iqbal
Town, Lahore
8
Hilal-e-Ahmar
042-7673401- 042-7673409
Complex, Shah
Alam Market,
Lahore
172
Shadman Branch
042-7538116-
Shadman - 1,
18
042-7538119
Lahore
10
11
042-6689016- 042-6688374
Cantt
Lahore Cantt
19
Lahore Stock
Exchange
Lahore Stock
68
Exchange
Building, 19,
Khayaban-e-Iqbal,
Lahore
12
Awami Complex,
042-5846374- 042-5846386
Town
Block 1, New
81
Garden Town,
Lahore
13
Baghbanpura,
042-6844006- 042-6844010
Lahore
Baghbanpura,
Lahore
14
15
042-7708661- 042-7708660
Lahore
Raiwind Road,
Lahore
16
Shahdin Manzil
Faysal Chowk,
042-601 2000
042-6012081
Lahore
17
Liberty Market
34
Market, Gulberg
III, Lahore
18
Rehman Centre,
042-7643851- 042-7643860
Akbar Block,
54
173
Azam Cloth
Market, Lahore
19
Shadbagh
37,Umer Din
042-7616252- 042-6260295
Road,
56
Wassanpura,
Lahore
20
Defence Extension
Divine Centre,
042- 570
Near Bhatta
0301-9
042-570 0311
Chawk, New
Airport Road,
Lahore Cantt
21
Urdu Bazar
Urdu Bazar,
042- 7210644
042- 7210647
Lahore
22
Shahdara Branch
Shahdara Chowk,
7900291
Lahore
23
(042)
(042)
6602334-8
6687391
042-7671633
Lahore
24
Brandreth Road
91-A, Brandreth
042-7674115-
Branch
Road, Near
18
Australia Building,
Lahore
25
6360962
Shahu, Lahore
26
27
DHA Phase II
Branch, Lahore
DHA, Lahore
47
042-5884670- 042-5884675
72
174
Commercial
Market, Model
Town, Lahore
28
Cavalry Ground,
35 Main
042-6610531- 042-6610536
Lahore
Boulevard,
32, 6610534
Officers Housing
Scheme, Cavalry
Ground Lahore
29
Chuburji
(042)7356640- (042)7222236
Scheme, Rewaz
42
Garden, Chuburji,
Lahore
30
Islamabad Branch
Awan Arcade,
051-2873345- 051-2279897
Jinnah Avenue,
Blue Area,
Islamabad
2
I-10, Markaz,
4-A,I-10 Markaz,
051-4435804- 051-4435807
Islamabad
Islamabad
F-7, Markaz
051- 265
Islamabad
3941-49
F-10 Markaz,
711
F-10, Markaz
051-265 3940
Islamabad
5
Islamabad Stock
101, W. Waqas
Exchange
104
Islamabad
6
I-8 Markaz,
051-4862563- 051-4862567
Islamabad
Markaz,
175
Islamabad
7
G-9 Markaz,
051-2253002- 051-2854932
Islamabad
Mauve Area,
Islamabad
8
F-8 Markaz,
051-7151673,
Islamabad
051-2260270
Markaz,
Islamabad
1
The Mall ,
B.A. Building, 8
051-5700038- 051-
Rawalpindi
The Mall,
40,051-
5700042,051-
Rawalpindi
5566084,051-
5700029,051-
5566086
5700037
Satellite Town
051-4424080-
Branch
Plaza, Murree,
85
Road, Satellite
Town, Rawalpindi
3
Jinnah Road ,
A-351, Jinnah
051-5775325- 051-5775324
Rawalpindi
Road, Rawalpindi
28
College Road
Rawalpindi
051-5762
051-5762 007
0008
5
051-5766003- 051-5766005
Branch
Commercial Area, 4
Chaklala Scheme
III, Rawalpindi
Lalazar Branch
Tulsa Road,
051-5522904- 051-5527814
Lalazar,
Rawalpindi
7
Peshawar Road
051-5468401- 051-5468403
Branch
Gammon House,
02
Peshawar Road,
176
Rawalpindi
8
Airport Road
7- Fazal Town,
(051)5781484- (051)5781483
Peshawar Branch
Peshawar City
Park-in Hotel
091-251794-6 091-251380
Branch
Building,
Peshawar City
Hayatabad
Hayatabad,
091-5822903- 091-5822908
G. T. Road
1045-
091- 2593003
091-2593001
081-2827567
081-2827562
081-2460520
081-2460519
081-2834425
081-2827270
Arbab Plaza,
(081)
(081)
Double Road,
2441961-62,
2441665
1046,Hashtnagri,
Opp: Sarhad
Chamber of
Commerce,
G.T.Road,
Peshawar
1
Quetta Branch
M. A. Jinnah
Road, Quetta
Hazar Gunji
Truck Stand,
Hazar Gunji,
Quetta
Shahra-e-Iqbal,
Market
Quetta,
Balochistan
Double Road
177
Chichawatni
Quetta
2441662
Rai House, 1,
040-5487802- 040-5487807
Railway Road,
Chichawatni
1
Chiniot
Chitral Branch
1-A, Shahrah-e-
Quaid-e-Azam
05
(0943)
(0943)
Opposite
414367,
412988
Mountain Inn
414396
Hotel, Attalique
Bazar, Chitral
1
Daharki Branch
1285-1287, Zafar
0723-641255
0723-644040
Bazaar, Daharki,
Taluka & Town
Daharki
1
Daska
3666-B, Kashmir
0966-720606- 0966-720612
Chowk, North
610
Circular Road,
Dera Ismail Khan
1
B.A. Building,
064 -
064 -
Branch
Jampur Road,
2468201-6
2468104
Faisalabad Branch
Ground Floor,
041-2617436- 041-2617432
Liaqat Road,
Faisalabad
2
Peoples Colony
237-B,
041-8722636- 041-8722184
Commercial Area, 39
178
D-Ground,
Peoples Colony
No 1, Faisalabad
3
Susan Road
25-Z-101, Susan
Road, Madina
Town, Faisalabad
4
Rail Bazar,
041-2540801- 041-2540806
Faisalabad
Faisalabad
041-2621486
041-2621487
No. 2,
Montgomery,
Bazar, Faisalabad
6
Minerva Road
Branch
Golden Market,
Sheikhupura Road,
Faisalabad
Chowk,
Sheikhupura
Road, Faisalabad
1
Gawadar
Airport Road,
0864-211783
Gawadar
No.
Branch Name
Address
Gilgit Branch
PABX
FAX No
05811-51903
07
Radio Station,
Jutial, Gilgit
1
Gojra
046-3517876- 046-3517878
179
77
Gojra
1
Gujar Khan
051-3515704- 051-3515703
Akbar Kiani
707
Shopping Mall,
G.T. Road, Gujar
Khan
1
Gujranwala Branch
B XII-7S-145,
055-3859931- 055-3856471
Krishan Nagar,
33
G.T. Road,
Gujranwala
1
Gujrat Branch
053-3530319
Road, Gujrat
2
Kotla Branch
Bhimber Road,
0537-586892
0537-586337
Thana Road,
(053)
(053)
Dinga, Distt.
7404844-46
7404840
0547-540801
0547-540804
Dinga
Gujrat
1
Hafizabad Branch
Railway Road,
Hafizabad
Hangu
Saif ur Rehman
0925-624641- 0925-624644
Haripur
Main Shahrah-e-
(0995)
(0995)
Hazara, G.T.
627451-2
627831
180
Road, Haripur
1
063- 2256457
063-2256458
Mandi,
Haroonabad
PROMOTION
Promotion is a term that refers to the following statement:
Steps taken by the company to enhance its sales by focusing the target markets
Thus we can say that promotion can be categorized into different categories based on the
above mentioned marketing perspective definition of promotion. So advertisement, sales
force, billboards etc are major sources through which the promotion scheme can be
implemented.
This is an age of competition. Numerous organizations are providing financial
services to the customer. These days every one is facing pressure of competitors. In this
world of growing competition, the only way to survive and grow, for an organization, in
the market place is the proper marketing and promotion of its products. Same is the case
with banking companies. There is large number of foreign and local banks working in the
country and it has been noticed that they are emphasizing much on their marketing
strategies. In this scenario, the key for a bank to succeed and attract its customers is
adequate promotion of its products &services. The bank can attract and retain its
customers through:
Sales Promotion
Advertisement
Direct Marketing
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Public Relations
The most prominent and important way to attract a large number of customers is
the advertisement of bank and its products/services. Bank Alfalah has adopted different
approaches for the accomplishment of this purpose. For example, formation of Alfalah
Mini Golf near Gulberg is a major step taken by BAL. It not only provides a source of
recreation to the people but it serves as a major source of marketing for the bank. Due to
Bank Alfalahs assistance for the construction of fountain in Liberty Market Square, it is
named as Bank Alfalah Square. BAL Square, for being situated in such a business and
commercial area has its unusual importance and has resulted into banks promotion.
Construction of Shaahdin Manzil as main branch Lahore is going to be the
revolutionary step for Bank Alfalah. It would not serve just as a main branch only, but it
would also be a great source of ever growing marking and promotion of bank.
Bank Alfalah issued its own rupee travellers cheques with highest denomination
during the course of my internship. I have seen some colored advertisements of RTCs in
some well-known magazines like Herald. Also, some fascinating advertisements have
been printed on Daewoo City Busses, which serves as a dynamic source of marketing.
However, one drawback or shortcoming is that, Banl Alfalah has formalized a lot
of products and services for its customers, even more than other commercial banks, but
any advertisement on electronic media has not been seen. Since, Bank Alfalahs major
competitor, Union Bank Limited has started large media campaign, so keeping in view
these threats; Bank Alfalah is emphasizing more on its advertisement.
Along with the advertisement, the bank is providing personal services to its
clients with maximum security as other banks provide. Bank also encourages the public
relation policy of marketing.
182
Some brochures and promotional material has been printed but it is distributed
mainly through the clients who visit the branch for their day-to-day business or through
the customers who come to get information about new schemes launched by the bank.
183
RECOMMENDATIONS
It was an interested experience to do internship in Bank Alfalah Limited. The staff was
highly cooperated and due to their help I learned big deal about modern banking.
I suggest that such an internship program highly integrative for the students of commerce
education so that the students should be enquired with the knowledge of practice world .I
do summarize that it would be a great help to me in selection of job or future field of
work.
Here I am putting some suggestions, which will enable the bank to compete with other
banks more effectively & efficiently.
It is observed that the employees were overburdened so they have to
stay at branch till late at night. In this way their efficiency is affected and
hiring more employees can reduce their work.
The employees should be signed jobs for specific period and than they
should shifted to other department so that they gain knowledge of other
jobs.
Bank
184
185
CONCLUSIONS
If I have to express my experience of internship in Bank Alfalah Limited Garden Town
Branch Lahore I would briefly say:
Bank Alfalah is a good Organization in the way that anybody can join it for his/ her longterm career. Overall working environment is comfortable. Management of branch cares a
lot of its employees and considers them as the Asset of bank. Behavior of senior
executive of bank is very polite and they are caring about the individuals career and their
growth.
However management is very demanding about the targets but good reward at the
achievement of assigned targets is awarded.
Employees at Bank Alfalah are quite efficient. As Garden Town Branch is a new one, its
employees have to bring their bank among the list of good banks. Therefore, they work
more than their working hours and it is all according to their will. It also shows their
loyalty, commitment to organization.
Employees are given the benefits like bonus, gratuity funds, loans, increments, and
medical.
All the customers are entertained individually. Same kind of behavior and attention is
given to all the customers. Getting ideas for improvement from customer side is a new
idea and that is working very well in Bank Alfalah Ltd. All the customers are asked to fill
a suggestion form and the standards of the bank are improved through them.
Prioritizing its product portfolio in line with its corporate and consumer needs and wants
the bank is committed to develop products that give more value to its customers in both
the sectors.
186
In bank, all the work is done on computers. All the entries are made in computer. Balance
is fed into the computer. This increases efficiency of the bank.
During my internship training I gathered information regarding how a successful bank
operational aspect decorticated with the practical.
I found my internship training at Bank Alfalah Limited Garden Town Branch Lahore to
be a very rewarding experience. The training was beneficial because it helpful me to
aware a real life working environment.
So far my learning is concerned; all the employees at branch were quite cooperative.
They helped me to understand the activities of a bank to possible extent. Their good
attitude gave me more confidence to learn more and to ask if I have any query in my
mind. Besides their ever going activities they never get irritant by my questioning. I had
made an honest efferent to present the working & operation of Bank Alfalah Limited
Garden Town Branch Lahore in simplest way.
I feel pleasure that I have really gained a lot during 8 weeks & enjoyed working with
experienced cooperative & intelligent staff.
187