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Table of Contents
PREFACE 2
ACKNOWLEDGMENT 3
CHAPTER 2 ANALYSIS 57
SWOT ANALYSIS 58
FINANCIAL ANALYSIS: 61
FUTURE OUTLOOK: 64
WEEKLY ACTIVITIES: 66
MANAGEMENT STYLE 101
WORKING ENVIRONMENT: 101
ANNEXURE: 106
Annexure:
PREFACE
Acknowledgment
“To Him belongs the dimension of the Heavens and the Earth, it is He who
gives life and death and He has power over all things.”
(Al-Quran)
All acclamations are to Allah, the most Merciful and Compassionate, who has
empowered and enabled me to accomplish this task successfully.
After that I submit my earnest thank to my affectionate parents, who pray for
my success and always been a source of encouragement for me. Secondly, I am
grateful to my prestigious institute that made this learning opportunity a part
of my education, especially I would like to thank my Professors as the
knowledge imparted by them enable me to gain knowledge and learning
exposure of the organization in the best way.
At the time, the Bank’s total assets amounted to Rs. 0.572 million. Today, Allied Bank's paid up
Capital & Reserves amount to Rs. 10.5 billion, deposits exceed Rs. 143 billion and total assets
equal Rs. 170 billion.
The Bank’s journey has been about dedication, commitment,
professionalism and adapting to environmental changes, leading to its
immense growth and stability.
A view of Khawaja Bashir Bux's Residence that was the first branch of
Australasia Bank came into existence. It is these factors that have made it
a Bank the rest look up to.
In the early 1940s, the Muslim community was beginning to realize the need for its active
participation in the fields of trade and industry. Since the late 1880s, Hindus had established a
commanding presence in the areas of industry, trade and commerce and were especially
dominating in the Sub-continent area. Banking, in particular, was the exclusive forte of Hindus and
it was popularly and wrongly believed that Muslims were temperamentally unsuited for this
profession.
He decided to step-up to that challenge and took the lead in establishing this first Muslim bank by
the name Australasia Bank Limited in Punjab, which was to become Pakistan in December 1942.
The initial equity of the Bank amounted to Rs 0.12 million, which was raised to Rs. 0.5 million by
the end of the first year of operation, and by the end of 30th June 1947 capital increased to Rs.
0.673 million and deposits raised to Rs 7.728 million.
However, it was severely hit by the riots in East Punjab. The Bank was
identified with the Pakistan Movement. At the time of independence
all the branches in India, (Amritsar, Batala, Jalandhar, Ludhiana, Delhi and Angra (Agra)) were
closed down. New branches were opened in Karachi, Rawalpindi, Peshawar, Sialkot, Sargodha,
Jhang, Gujranwala and Kasur. Later, the network spread to Multan and Quetta as well.
The Bank financed trade in cloth and food grains thus, played an important role in maintaining
consumer supplies during the early months of 1948 affected by riots. Despite the difficult
conditions prevailing and the substantial set back in the Bank’s business in India, Australasia Bank
made a profit of Rs. 50,000 during 1947-48.
By the end of 1970 it had 101 branches. Unfortunately, it lost 51 branches in the separation of East
Pakistan. But the Bank did well despite losing a lot of its assets and by the end of 1973 had 186
branches in West Pakistan.
In 1974, the Board of Directors of Australasia Bank was dissolved and was renamed Allied Bank
after the amalgamation of four banks. The first year was highly successful; profit exceeded Rs. 10
million, deposits rose by over 50 percent and approached Rs. 1460 million. Investments rose by 72
percent and advances exceeded Rs. 1080 million for the first time in the banking history. 116 new
branches were opened during 1974 and the Bank started participating in the Government’s spot
procurement agriculture program. Those seventeen years saw a rapid growth for the Bank.
Branches increased from 353 in 1974 to 748 in 1991. Deposits rose from Rs. 1.46 billion, and
Advances & Investments from Rs. 1.34 billion to Rs. 22 billion during this period. It also opened
three branches in the U.K.
As a result of privatization in September 1991, Allied Bank entered a new phase, and became the
world’s first bank to be owned and managed by its employees. In 1993 the “First Allied Bank
Modaraba” (FABM) was floated. After privatization, Allied Bank became one of the premier
financial institutions of Pakistan.
Allied Bank’s capital and reserves were Rs. 1.525 billion; its assets amounted to Rs. 87.536 billion
and deposits to Rs. 76.038 billion. Allied Bank enjoyed an enviable position in Pakistan’s financial
sector and was recognized as one of the best amongst the major banks of the country.
In August 2004, as a result of capital reconstruction, the Bank’s ownership was transferred to a
consortium comprising Ibrahim Leasing Limited and Ibrahim Group.
Today, the Bank stands on a solid foundation built over 63 years of hard work and dedication,
giving it a strong equity, an asset and deposit base and the ability to offer customers universal
banking services with more focus on retail banking. The Bank has the largest network of online
branches in Pakistan and offers various technology-based products and services to its diverse
clientele through its network of more than 700 branches.
In May 2005, Ibrahim Leasing Limited dissolved and the company was vested into Allied Bank
Limited. ALL the shareholders were issued ABL shares instead of the all shares held by them. An
application for the listing of ABL shares in all the Stock Exchange Companies of Pakistan was
made; ABL was formally listed and the Bank’s share trading began on the following dates i.e.
Islamabad Stock Exchange August 8, 2005, Lahore Stock Exchange August 10, 2005 and Karachi
Stock Exchange August 17, 2005.
Today, all Allied Bank Limited shareholders can trade in the Bank’s shares at their will and the
Bank stands on a solid foundation of over 63 years of its existence having a strong equity, assets
and deposits base offering universal banking services with higher focus on retail banking.
Ibrahim Group, through its different companies and sponsors owns more than 75% of Allied Bank.
The Group apart from interest in financial sector is engaged in manufacturing of yarn and polyester
staple fiber, trading and power generation.
The consortium of Ibrahim Leasing Limited And Ibrahim Group, which has injected Rs. 14.2
billion into capital of Allied Bank of Pakistan for acquiring its 325 million additional shares, today
assumed the control of the bank. The Governor, State Bank Of Pakistan, Dr. Ishrat Hussain handed
over the relevant documents to Mr. Mohummad Naeem Mukhtar, Authorized Attorney of the
consortium at a simple ceremony held at SBP, Karachi. Among those who present at the ceremony
were Deputy Governor, Mr. Tawfiq A. Hussain and senior officials of the State Bank of Pakistan,
representatives of the Allied Bank and the consortium. Speaking on the occasion, the State Bank
Governor has termed the successful reconstruction of ABL as beneficial both for the organization
as well as for banking industry. He expressed the hope that the transfer of the management of ABL
to a strategic investor will turnaround the bank and usher in a new era of growth and stability in the
banking sector. He stressed upon the new Board of the Bank to run it professionally, prudently and
with the highest standards of corporate governance. It may be recalled that the auction of 325
million additional shares as a part of reconstruction of Allied Bank of Pakistan was held under the
chairmanship of the deputy Governor, State Bank of Pakistan, Mr. Tawfiq A. Hussain at Islamabad
on 23rd July, 2004. In the auction, the consortium of Ibrahim Leasing Limited And Ibrahim Group
were the successful bidder as they offered the highest bid of Rs. 14.2 billion for acquiring these
additional shares, which constitutes 75.35% of the revised capital of ABL. The Federal
Government approved the scheme for reconstruction of ABL, under section 47 of the Banking
Companies Ordinance 1962 on July 24, 2004.
After the approval of scheme by the Federal Government, the State Bank issued the Letter of
Acceptance (LOA) to the consortium of Ibrahim Leasing Limited And Ibrahim Group on July 26,
2004 in terms of which the full payment of Rs. 14.2 billion was made on August 19, 2004. On
receipt of full payment by the Allied Bank of Pakistan Limited and verification of the sources of
funds by the State Bank of Pakistan, the control of the Bank was handed over to consortium of
Ibrahim Leasing Limited And Ibrahim Group.
VISION:
MISSION:
• To create sustainable value through growth, efficiency and diversity for all
stakeholders
CORE VALUES:
• Integrity
• Excellence in Service
• High Performance
• Innovation and Growth
OBJECTIVES:
BOARD OF DIRECTORS:
“The people who draw the picture of the organization on the broader canvas of
strategy and planning, the pioneers of prosperity and world of wisdom that paves
the path to long term success”
EXECUTIVE COMMITTEE:
THE MANAGEMENT:
Mr. Muhammad Jawaid Iqbal (Group Chief, Corporate & Investment Banking)
PRODUCTS:
In line with the Bank’s aim to provide a host of products and services to its customers,
substantial ground work has been done to establish a strong consumer banking business.
Furthermore, to achieve this objective, professionals from across the industry have been
recruited into areas of product development, sales, credit policy, research, consumer
analytics, call centers and service quality departments.
Phone Banking:
Allied Bank is focused on delivering exceptional services to its
customers that would strengthen the relationship and build Loyalty. To make banking
experience quick, efficient, secure and easy, Allied Bank of Pakistan now offer its customers
24/7 Phone Banking Services.
In addition, Allied customers can also avail a host of services through automated Allied
Phone Banking (IVR/Self Service Banking) that lets them use their telephone keypad to
inquire about their financial balance/transactions.
Branch Banking:
1. Inquiry
• A/C balance
• Statement details
• Product information
2. Transactions
Credit Cards:
1. Inquiry
• Card balance
• Statement details
• Product information
• Application status
1. Transactions
• Card activation
• Card lost/stolen
• Card replacement
• Credit Card bill payment
• Insurances
Internet Banking:
Allied Direct Internet Banking offers convenience to its customers to manage and control
their banking and finances - when they want to, where they want to! So, just get clicking.
Online Banking:
No matter where customers are in the country and whichever branch their account is
maintained at, customer can have their cheque cashed at any of abl 757 online branches
located in 250 cities.
Customers can also use the service, from any branch, to deposit cash for instant credit into
their account or any other account in Allied Bank. Similarly, the account-to-account Funds
Transfer facility is also available for instant remittance.
Customers’ cheque drawn from a remote branch for credit into a beneficiary’s account or
encashment of a specified amount can also be presented by a third person at any branch.
What’s more, making a Balance Inquiry and getting an Account Statement are additional
services available to Account holders from remote branches.
Allied Online provides a secure, efficient and convenient facility for making payments to
beneficiary accounts from any of abl branches countrywide. Corporate customers requiring
fund collection or a disbursement facility can use it for cash management services.
1 Link Network:
Additionally, Allied Bank is a member of the ‘1-LINK ATM sharing switch’
comprising of over 2,000 ATMs nationwide, therefore, giving its Allied
Cash+Shop Visa Debit Card holders access to even more ATMs across the
country.
All ATMs
connected Bank: Muslim Commercial Bank
with the"1-
City: Select City
Link Switch"
will show its Branch: Select Branch
Logo.
Address:
M NET Network:
Merchandiser:
Address:
Corporate Leasing:
Leasing is a popular mode of financing because of its distinctive features like tax
shield, preserve working capital, easy documentation and less processing time.
Unclaimed Deposits:
If the account is dormant or not operated for 5 years then these are called unclaimed
deposits and all unclaimed deposits are surrendered to the State Bank of Pakistan. In
accordance with the Banking Companies Ordinance, 1962, Section 31, the Bank is
liable to surrender to S.B.P, all unclaimed deposits and instruments which have not
been operated/collected by the account holders/beneficiaries for last 10 years.
All such customers/beneficiaries are requested to contact the concerned branch to re-
activate their accounts/collect the instruments, failing which, the bank will be
compelled to classify the same "UNCLAIMED" and surrender to SBP.
Deposit Accounts:
• PLS Account
• Current Account
• Allied Basic Banking Account
• Foreign Currency Deposit
• Monthly Profit Plus
• Rewarding Term Deposit
• Behtar Munafa Account
• Behtar Munafa Term Deposit
• Allied Munafa Account
• Allied Bachat Scheme
• Allied e-Savers Accounts
• Allied Business Account
PLS Account:
Allied Bank offers the PLS Savings Account facility to its customers with the
following attractive features:
Current Account:
• Allied Bank offers the Current Account facility for individuals as well as for
institutions and commercial customers.
Salient Features:
• Account Type: Term Deposit
• Term Period: 1 year
• Profit: Payable on monthly basis
• Minimum Deposit Amount: Rs.25,000
• Eligibility: Individuals & Institutions (other than financial institutions)
Additional Benefits:
• Cheaquing Account for monthly profit credit
• 24 hour phone banking service
• Free internet banking facility
• SMS transaction alerts
• Allied Cash + Shop Visa Debit Card
Rate of Profit:
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• Eligibility: Individuals & Institutions
Profit Payment:
Profit of Rs.13, 500* will be immediately credited in the customer’s current account.
Salient Features:
• Account Type: Chequing Account
If customer wants to fix its money now to secure the future, this is the product for
customer.
BEHTAR MUNAFA TERM 1 3 6 Months 1 Year
DEPOSITS (3739): Month Months
Upto Rs. 5,000,000 6.00% 8.00% 8.50% 9.50%
Rs.5,000,001 to Rs.25,000,000 6.50% 8.50% 9.00% 10.00%
Rs.25,000,001 to 7.00% 9.00% 9.50% 10.50%
Rs.50,000,000
Rs. 50,000,001to Rs. 7.50% 9.50% 10.00% 10.75%
100,000,000
Rs.100,000,001& Above 8.00% 10.00% 10.50% 11.00%
Rate of Profit:
Rate of Profit:
• Account Type: Fixed Term Deposit
• Investment: Up to Rs.5,000,000 & above
• Profit: Payable on maturity
• Highest Profit: Up to 11% p.a.
• Eligibility: Individuals, and institutions
• The applicable profit rate will be based on the amount maintained in the
account on an average monthly basis and the return will also be credited to the
account on a monthly basis.
The Allied e-Savers Account is a unique savings plan where customer can earn
returns as high as 7.5% with the convenience of 4 withdrawals a month!
Salient Features:
Allied Business Account is a non-profit current account with countless benefits and
services. If customers are a businessman, trader or an individual, Allied Business
Account is an ideal proposition for such customers.
SME:
The Commercial and Retail Banking Group (CRBG) caters to the needs of commercial
entities and small and medium enterprises. A dedicated team of Relationship Managers first
identifies the specific needs of each customer segment, then designs and delivers a facility
package, which is in conjunction with those needs, and provides customers the full support
and opportunity to take advantage of the various business prospects available in the market.
RF/CF:
These are short term credit facilities (maturity of up to one year) lent to customers to meet
their day-to-day business/working capital requirements and finance their inventories,
receivables, etc.
Generally, in addition to collateral security, these facilities also entail security in the form of
hypothecation of stocks and receivable/pledge of stocks.
Export Refinance Facility:
This is mainly the same as RF/CF, but as per the Terms and Conditions set by SBP, is meant
exclusively for exporters. Under the Export Refinance Part I Scheme, both pre-shipment and
post-shipment financing facility is available.
Foreign Bill Purchase/Bill Discounting Facility:
This loan/facility is provided to exporters against their export bills under LC and a contract to
facilitate their cash flow, while they are waiting receipt of their payments.
LC (Sight /Usance):
This facility allows importers to import goods and machinery.
FIM/FATR:
These facilities allow customers to finance imported goods against Pledge & Trust Receipts,
backed by collaterals.
Demand Finance Facility:
This is a medium/long term credit facility available to establish new projects for BMR and
capacity expansion with a repayment term of more than one year, which can be paid back in
installments. This facility meets clients’ long term needs such as, financing factory
constructions or machinery expenses.
Demand Finance Long Term Loans:
The demand finance long term loan is approved for a period of 3-5 years. The loan is
specifically for fixed asset financing with maximum grace period of upto 12 months from
first draw-down.
Inland LC (Sight/Usance):
This facility allows customers to purchase commodities within the country.
Import Export:
Allied Bank provides highly efficient trade finance services for import/export businesses
through a large number of authorized branches where trained and motivated staff is available
to handle the business on the customer’s behalf.
Vendor Financing:
The product is aimed at vendors of large corporate entities whereby the corporate entity has
an agreement with the vendor to provide specific quantities of certain goods in a specific
period of time. ABL whould finance such vendors in order to promote their production
capabilities.
Agriculture Finance:
The Bank, under the Agricultural Financing Scheme, as decided by the State Bank Of
Pakistan, extends short, medium and long term, farm and non-farm credits. The farm credits
are extended for production (inputs) and development purposes. Non-farm credits are allowed
for livestock (goats, sheep, cattle), poultry and factories including social forestry and fisheries
(inland and marine, excluding deep sea fishing). Details are as follows:
Farm Loans:
• Production Loans:
1. Inputs like seeds, fertilizers, pesticides, weedicides, herbicides, labour charges, water
charges, vegetables, floriculture, etc.
2. Working capital finance to meet various farming expenses.
• Development Loans
• Non-Farm Loans
1. Livestock
2. Poultry
3. Fisheries
4. Forestry
• Amount of Finance
• Insurance
Insurance facility is available for all Farm and Non Farm Loans except orchards. Insurance
premium amount of subsistence holding farmers availing loans for following 5 major crops
will be reimbursed by the Government of Pakistan.
1) Wheat
2) Rice / Paddy
3) Cotton
4) Sugar Cane
5) Maize
Utility Bill:
Customers can pay their utility bills (e.g. electricity, gas, telephone) at any of the Bank’s
branches. For further convenience, bills are collected on all working days during normal
banking hours and also at certain times during the evening. Bills can be paid with cash or
cheaque, plus customers can even drop crossed cheaque in drop-boxes available at all
branches.
Furthermore, customers can also pay their bills using any of the Bank’s ATMs or via Internet
Banking for SSGC and SNGP bills.
LOCKERS:
Allied Bank Lockers are available, at an annual fee, in four different sizes - small,
medium, large and extra large. Locker holders are not required to have an account with the
Bank.
Hajj Services:
The Hajj Service is available to all pilgrims. The forms and other related services are
provided by the Bank. Hajj applications are available with all branches during Hajj season,
immediately after the Hajj policy is announced by the Government of Pakistan.
With Allied Visa Credit Card customer can enjoy a variety of state-of-the-art features and
unmatched value by spending at over 49,000 merchants across Pakistan and 27 million
merchant outlets worldwide! And what more, customer can also use your credit card at over
1 million ATMs internationally!
Features:
• Buy Now, Pay Later:
With Allied Visa Gold Credit Card, free credit period allows customers to pay for purchases
up to 50 days after the date of purchase.
• Flexible Repayment:
When paying credit card bill, Allied Visa Gold Credit Card gives the option to either pay the
entire amount according to the statement or a minimum of 5% of total outstanding balance.
• Cash Advance Facility:
As an Allied Visa Gold Credit Card member, customers are entitled up to 75% of available
credit limit in cash.
• Allied Easy Installments (AEI):
The Allied Easy Installments (AEI) plan provides customers with the facility to pay
outstanding card balance in equal and affordable monthly installments spread over 3, 6, 12,
18, 24, 30 or 36 months.
• Supplementary Cards:
Want to share the benefits of Allied Visa Gold Credit Card with others? Now customer can!
Treat up to two people with supplementary credit cards and pass on the many privileges of
Allied Visa Gold Credit Card to the chosen friends and family members.
• Balance Transfer Facility:
In case customers have outstanding balances on other cards, consolidate these onto the Allied
Visa Gold Credit Card with the lowest BTF rate and save more on the outstanding payments
than ever before.
With Credit Protection Plus, Allied Visa Gold Credit Card provides payment cover against:
1. Death, due to accident or sickness
2. Permanent and Total Disability, due to sickness or accident
3. Temporary Total Disability, due to sickness or accident
4. Terminal Illness
• Zero Loss Liability:
The Allied Visa Gold Credit Card’s Zero Loss Liability feature protects its customers from
paying for any unauthorized transactions on their Card in the event that it is lost or stolen.
As an Allied Visa Gold Credit Cardholder, its customers are eligible to avail the free lounge
facility at Quaid-e-Azam International Airport, Karachi and enjoy a variety of
complimentary features.
Also feel free to plug in your laptop and mobile phone into the charging facilities provided or
browse the internet or send and receive faxes while you wait.
Features:
With Allied Visa Platinum Credit Card, customers can enjoy these facilities:
• The latest information on Visa Platinum regional programs, such as the Visa
Platinum Club, Visa Platinum Dining, Visa Platinum Golf, Holidays and Visa
Platinum Experiential Travel Facilities.
• The latest information on local country promotions and events.
• Online applications such as Concierge Online.
• A directory of toll-free numbers for reaching the VPCC from all key global
destinations.
Features:
• Get Cash:
By using Allied Cash+Shop Visa Debit Card to withdraw cash directly from bank account
from over 3,500 ATMs in Pakistan - including Allied Bank's largest network of ATMs - and
over 1 million ATMs worldwide
• Stay Alert
Now, be more secure and keep better track of spending. With Allied Cash+Shop Visa Debit
Card,customers can get SMS alerts when they make transactions on their Card.
• Shop Anywhere
Use the Visa power of your Allied Cash+Shop Visa Debit Card to shop at over 49,000
retailers in Pakistan and over 27 million retailers internationally.
• Dine Out
• Enjoy Traveling
• Get Groceries
• Have Fun
• Fuel Up
Cash Management:
ABL’s cash management team offers a full range of transactional banking services, from
collections to cross-border payments, from customized services to comprehensive industry
expertise. Having the largest real-time online branch network in Pakistan, combined with a
host of value-added services, ABL is uniquely positioned to meet the demanding
requirements of global corporate, public sector enterprises and top-tier domestic companies.
With its collaborative approach to building and implementing solutions, ABL is committed to
giving its customers the best service possible.
Home Remittances:
Allied Bank has rolled out its state-of-the-art ‘e-Remittance’ services to facilitate
international remittances sent to Pakistan by overseas Pakistanis.
ABL has been significantly important in originating home remittances to Pakistan, and is
continuously working to develop innovative ideas for maximizing its reach to all Pakistanis
living abroad. We have identified several strategic partners in the main overseas markets, and
will be providing a fully automated, end-to-end solution for non-resident Pakistanis.
ABL’s real-time online branch network – one of the largest networks in Pakistan, consists of
over 760 branches in 350 cities, and provides domestic distribution of remittances to
customers receiving money in Pakistan.
A host of top international banks, exchange houses and funds transfer companies from across
the world, including the Middle East, Europe, Asia-Pacific and North America, have been
involved to make this a quality service. By implementing a fully automated, straight-through
processing facility, we are in a position to activate an innovative set of remittance products.
A host of options is available to non-resident Pakistanis under this service, including direct
credit to account, cash payment over the counter and issuance of the Allied Express cheque, a
payment instrument that can be honored across the entire ABL network of branches.
CIBG
(Corporate Investment Banking Group)
Corporate Banking Investment Banking Financial Institution
Central Departmentalization
Credit Section
Group
Corporate
Banking Group
Credit
Administration
Foreign Trade Group
Group
Human Resource
Group
Accounts Group
Investment &
Treasury Group
Information
Technology
Group
Internal Division
Group
Audit &
Inspection Group
Administration
Group
Agricultural
Group
Special Asset
Management
Group
Organogram of SVU
Organogram of RMG
BRANCH NETWORK:
Allied Bank has 885 nationwide branches of
which approximately 67% i.e. 573 are located in
large metropolitan area, namely Karachi,
Islamabad, Faisalabad, Lahore, Multan,
Peshawar and Hyderabad. The network of 855
branches enables the bank to generate a
substantial and stable deposit base, provide a
wide range of banking products and other
financial services and diversify lending risks
geographically, as well as on the basis of credit
and customer type.
CREDIT RATING:
Allied Bank’s credit rating has been maintained to ‘AA’ for
long term, by the Pakistan Credit Rating Agency
(PACRA), the leading credit rating agency in the country
and AA donates a very low expectation of credit risk,
indicates very strong capacity for timely payment of financial
commitments and not significantly vulnerable to foreseeable
events.
The short term rating was also maintained at ‘A1+’, which is the uppermost possible rating
under this category and represents highest capacity for timely repayment.
Corporate Governance Rating (CGR) is meant to indicate the relative level to which an
organization accepts and follows the codes and guidelines of corporate governance practices.
In this context, JCR-VIS Credit Rating Company Limited had assigned a corporate
governance rating of ‘CGR-8’ to your bank during the last year, which denotes ‘high level of
corporate governance’ and is only two notches away from the highest level of CGR.
CGR is arrived at after evaluating key governance elements of the rated enterprise, which
include regulatory compliance, ownership structure, composition and operations of the board
of directors and executive management, self-regulation, financial transparency and
relationship with stakeholders. Rating for the current year is under process.
In July 2008, JCR-VIS Credit Rating Company upgraded the rating assigned to Allied
Bank’s TFC to ‘AA-’ from ‘A+’ earlier, with stable outlook.
Allied Bank has been declared BANK OF THE YEAR 2006 by UK renowned financial
magazine The Banker published by Financial Times Business Limited. This is considered to
be the most prestigious award in the world of finance. The award is given by the The Banker
annually to one high performer Bank in each country based on key performance indicators.
The Bank of the Year 2006 Award was presented to Mr. Khalid A. Sherwani, President of the
Bank during a ceremony held at London, UK on November 30, 2006.
It feels pleased to apprise that Allied Bank of Pakistan has been awarded ‘Corporate Finance
House of the Year (Banks)’ for the second consecutive year. CFA Association of Pakistan, a
member society of CFA Institute – USA, conferred the award on Allied Bank based on the
highest value and number of corporate finance concluded during July 2006 –December 2007.
During the year, Annual Report of Allied Bank of Pakistan for the year 2007 won the first
prize for “the Best Corporate Report” for the financial sector category, awarded jointly by the
Institute of the Chartered Accountants of Pakistan and Institute of Cost and Management
Accountants of Pakistan. The Annual Report for the year 2007 was also awarded ‘Certificate
of Merit’ by the South Asian Federation Accountants (SAFA), an apex body of the SAARC
countries.
Allied Bank of Pakistan has been ranked among the top 1000 banks of the world by UK’s
‘The Banker’, published by Financial Times London. The categories and ranking are as
follows:
Performance based
Soundness based
Size based
Assets 846th
Vision:
To transform internal audit function of Allied Bank Limited in to an IT enabled risk based
audit and management consultancy function providing value added services and management
consultancy to the board and senior management.
Mission:
Terms of Reference:
One of the prime responsibilities is the satisfactory implementation of the internal control
over financial reporting. The committee also determines appropriate measures to safeguard
bank’s assets, ensures consistency of accounting policies, reviews financial statements and
recommends appointment of and coordinates with external auditors.
The committee is also responsible to ascertain the internal control system including financial
and operational controls, ensuring adequate and effective accounting and reporting structure,
determining and monitoring compliance with the best practices of the corporate governance.
Implementation of the management testing plan, assessing the testing results and advising
appropriate corrective action is also a major responsibility of Audit Committee.
Goals:
The goals of RMG are to understand the risk profile of each business area, to propose risk
policies, risk measurement methodologies, and risk limits in order to aggregate and control
credit, market and operational risks across the Bank. In pursuance of these goals, RMG has
taken up the challenge of building an effective Risk Architecture.
Terms of Reference:
The primary functions of Risk Management Committee (RMC) is the monitoring of
management’s adherence to prudent and sound risk policies, assessing the ever changing risk
profile and providing risk appetite to the business units.
The Committee also monitors the initiatives and expenses pertaining to Basel II and up
gradation of Risk Management Systems.
Structure of RMG:
Risk management functions have been segregated by business specialization i.e. Credit Risk,
Operational Risk, Market Risk, Credit Administration, Risk Architecture and Risk Analytics.
Risk Analytics:
Risk Analytics is an integral part of the credit process. The objective of Risk Analytics is to
limit portfolio concentrations, reduce volatility, achieve optimum earnings and create
shareholder value. It also incorporates portfolio strategy and planning. The Risk Analytics is
a relatively new concept in Pakistan, and the function at ABL has started managing portfolio
risk through launch and usage of risk rating model, design and launch of a new Credit
Application Package, that ensures a risk-based approach to credit presentations and allows
pursuing systematic data gathering with a view to migrating to advanced approaches.
Credit Administration:
Credit Administration’s role is to minimize losses that could arise due to security and
documentation deficiencies. The Credit Administration unit constantly monitors the security
and documentation risks inherent in the exiting credit portfolio. This function operates
through eight regional departments located all over the country.
All these functions are operating in tandem to improve and maintain the health of the lending
portfolio and keeping aggregate risk within the Bank’s overall risk taking capacity.
Credit Risk:
Credit Risk Management at ABL is divided in to two branches;
1. Corporate & Financial Institutions Risk
2. Commercial & Retail Risk
This function ensures that the risk exposures undertaken match the risk appetite of the Bank,
and that proper credit approval procedure are adhered to. Identification and Monitoring of
problematic exposures and to take proactive measures to minimize the financial loss to the
bank is also a responsibility of this function.
Market Risk:
Market Risk is defined as any fluctuation in value of the portfolio resulting from changes in
market price and market parameters, such as interest rates, exchange rates and share prices.
The Bank intends to build an effective Market Risk Management unit to independently
identify measure, monitor and control the potential losses that may arise from the Bank’s
activities in financial market.
Operational Risk:
It includes risks that primarily arise from internal processes of the Bank. Operational Risk
Management unit is developing an effective system for identification of critical risk areas,
and developing processes/controls to mitigate these risks.
All the regional heads of Allied Bank reports the Commercial and Retail Banking Groups,
The hierarchy of the Allied Bank is as follows:
BRANCH MANAGERS
Operation Group:
Operations Group, apart from re-engineering the existing procedures to ensure safe and
smooth conduct of Banks operational activities also focuses on supporting the field offices in
pursuit of their business objectives and goals while maintaining adequate controls from a risk
perspective.
Group also assisted in launching of a variety of value added services facilitating bank’s
account holders/customers by offering them a wider product range and efficient delivery.
1. Alternative Delivery Channels provides innovative and value added I.T. based solutions
to the Bank’s clients.
2. Branch Operations supports the field functionaries through procedural manuals, branches
rationalization, fully automated inter branch & nostro accounts reconciliations. It also
provides support Hajj & Zakat matters. During 2005, it has developed a number of new
procedural manuals including ATM, Allied Online, Remittances, and Cash & Teller etc.
4. Establishment caters to the Bank’s requirements for printed stationary, operating and
fixed assets, insurance and security arrangements at the central office level.
The Allied Bank Ltd has a separate Group for Information Technology which looks after the
entire bank’s automation. The bank’s major achievement in automation is that 100%
branches are computerized and inter-connected and these branches offer the customers full
range of online banking services. The bank also offers most of the currently sought after
technology based products including Internet Banking.
The IT Group is presently structured in three areas namely
But with the launch of the Core Banking project driven from Head Office at Lahore, the IT
Group will be re-structured very shortly.
The group defines the organizational structure and functional responsibilities of each group.
It approves staff strength, key appointments, salary revisions, bonuses and any special
allowances. It nominates the management personnel on the boards of other companies /
subsidiaries. It also recommends amendments in Human Resources Policy to the Board.
Besides monitoring performance of Human Resources Group, the committee also oversees
certain H.R. related management committees.
The Corporate Investment Banking Group (CIBG) holds the Bank’s loan portfolio and enjoys
a leading position in corporate lending in the country. It offers a wide range of financial
services to medium and large sized public and private sector entities. These services include,
providing and arranging tenured financing, corporate advisory, underwriting, cash
management, trade products, corporate finance products and customer services on all bank
related matters.
ABL – C&IBG was established in 2005 and focuses on the Investment Banking market.
It has the highest number of Successful Arrangement and Participation in Key Privatization
& Acquisition Financing Transactions achieved by any Investment Banking Group in
Pakistan.
Finance Group:
Finance Group plays a central role in strategic decision making, transparent financial
reporting and enhancing the economic value of the Bank. It also provides support to the
business groups in performance analysis and launching new products and initiatives.
Corporate Affairs Group is responsible for compliance of all legal and statutory corporate
requirements under Corporate and Banking laws and Regulations. Besides arranging Board of
Directors and Shareholders’ meetings, it co-ordinates meetings of the Strategic Planning &
Monitoring Committee of the Board,and Management Committee.
The corporate group has two wings:
CORPORATE AFFAIRS WING:
1. To deal corporate matters with Security and Exchange Commission of Pakistan,
Company Registration Office Lahore, Stock Exchanges and State Bank of Pakistan.
2. To arrange meetings of the Board of Directors and preparation of the Agenda for such
meetings.
6. To obtain approvals through circulation on the cases from the Board of Directors,
Strategic Planning & Monitoring Committee.
8. To arrange meetings of the Management Committee and prepare agenda for such
meetings.
9. To affix company seal on Powers of Attorney, Shares and other documents as & when
required and keeping its record.
10. To keep liaison with Govt. nominee and non-employee Directors of the Bank.
11. To assist Group Chief in carrying out different assignments entrusted by the
President.
12. To provide information to Credit Rating Agency and co-ordinate with them in the
process of Entity Rating.
13. To co-ordinate with Share Wing and Finance Group for arranging AGM/Extra
Ordinary General meetings.
3. To make arrangements for floatation of shares & TFCs and payment of dividend on
behalf of public limited companies.
SAM Group:
The Special Asset Management Group further grouped into three wings namely:
LEGAL AFFAIRS:
The personnel engage with Legal Affairs is responsible for monitoring of all legal matters
pertaining to the bank, covering functions of rendering opinions of applicable laws, to deal
with special tasks and assignments , advice on legal issues relating to operational matters,
legal compliances and to ensure remedial and litigation management.
This diligently provide counseling on all legal matters including suits filed, executions of
decrees & criminal complaints etc;. It coordinates with the advocates on Bank’s panel;
ascertain their enlistment and selection of appropriate lawyers in complicated legal cases
which is one of its core responsibilities.
PROCESSING UNIT:
Each Area Manager of Processing Unit will attend the cases of NPL A/Cs of respective area
in line with Bank’s approved strategy.
The Area Manager will process the proposals of settlements, rescheduling / restructuring,
with or without financial relief in shape of waiver/write-off received through SAM Branches
of respective area and put up the proposals with proper Analysis keeping in view the
prudential regulations, financial aspects of defaulting borrowers and others facts about the
proposal.
The Area Manager will handle the proposals in respect of incentives to the staff on account of
Cash Recovery in terms of Bank’s Policy and put up the proposals with their Analysis.
The Area Manager examines the proposals received from SAM Branches for grant of
permission of publications, approval for sale/disposal of mortgaged/pledged assets,
deployment of security guards and formation of sale Committee where-ever required, and
submits office notes for approval of valuation and legal and misc. expenses.
The Area Managers will closely monitor and make follow up with Field Offices /SAM
Branches asking for implementation in respect of cases settled/approved by competent
authority
The Area Manager will prepare the cases in respect willful defaulters to be submitted to SBP
for issuance of 7 days notice to the borrowers/guarantors/mortgagors by the Governor, SBP,
under NAB ordinance 199.
The Area Managers will co-ordinate with Risk Management Group with regard to
implementation of BASLE II accord as per SBP directives.
The Area Manager has to make liaison with the Risk Management Group with regard to
classification of accounts and to deal with the matters relating to placement/deletion of names
of defaulters on Exit Control List (ECL), and correspondence thereon with SBP/Ministry of
Interior, Islamabad.
1. To process the request of SAM Branches for issuance credit advice against the
approved write-off loans.
2. Maintenance of proper record of all the written-off /waiver cases of the bank.
3. Providing record/files of write-off/waiver proposals approved at different levels, for
external as well as internal auditor and coordinate with them and participate in
meeting with regard to disagreed cases of write-off/waiver with BID, SBP.
4. Submission of periodical consolidated statements of write-off/waiver to SBP, Finance
Group as well as to Risk Management Group.
5. Preparation of Information Memorandum for line authority in respect of written
off/waiver cases for their review.
6. Provide necessary data to Finance Group in respect of borrowers where write – off
implemented for publications in the annual reports.
The Units further deals with HR related activities of employees posted in SAM Branches as
well as in SAM Group.
Special Vigilance Wing:
Operational Risk is gaining importance in the banking industry in the wake of increasing
complexity of operations and the risks involved therein. The incidents of internal and external
frauds and forgeries are included in list of the operational risk events that have the potential
to result in substantial losses. Keeping in view the size, sophistication, nature and complexity
of operations of bank, Allied Bank of Pakistan opened a separate wing for it.
The competent authority has approved and created “Special Vigilance Unit (SVU)”
previously known as “Control Unit” to monitor the Operational Loss cases of Frauds,
Forgeries and Dacoities set up at Strategic Asset Management Group SAM Group, Central
Office Karachi in January 01, 2008 in the light of decision of audit committee taken in its
43rd meeting held on October 10, 2007, to make pursuance of the cases of Frauds, Forgeries
and Dacoities.
Audit committee again decided in its 46th meeting held on July 04, 2008 that the function of
reporting of frauds, forgeries and dacoity presently being done by the Audit and Credit Risk
Review Group (ACCRG) may be transferred to Strategic Asset Management Group SAMG
effective from August 01, 2008, excepting the functions of investigations which will remain
with Audit and Inspection Group (AIG).
With the approval of competent authority, the Special Vigilance Unit (SVU) now located at
Strategic Asset Management Group (SAMG), Lahore.
Scope of the unit, its TOR, Organogram, Staff requirements and Reporting structure was
approved by the competent authorities.
1. The unit will monitor all the cases of ‘Frauds’ committed by the staff exclusively or in
collusion with other where bank sustain operational losses.
2. To monitor all the cases of ‘Dacoities’ occurred at the branches/offices, carrying loss
of cash and other valuable of banks.
3. To pursue with law enforcing agencies for expeditious disposal of the cases of
Frauds/Docoities against the culprits.
4. To settle the claims with insurance co. in respect of operational losses on account of
frauds and dacoities.
5. Frauds and Forgeries reporting to the management or State Bank of Pakistan.
Term of Reference:
On receipt of initial reports about the incidents of Frauds, Forgeries and Dacoities, “Special
Vigilance Unit (SVU)” will undertake the following actions:
1. To liaison with Audit and Inspection Group (AIG) to ascertain the modus
operandi/quantum of loss and tentative names of responsible persons.
2. To visit the branch/office where incident took place, for personal verification of the
facts.
3. To make efforts for the catch hold of the culprits and to ensure that the losses are
made good by recovering the cash/valuables from them.
4. In case of no instant recovery to keep lien on the assets held by the culprits and their
associates and to execute the agreements etc.
5. To acquire the services of suitable lawyers and to coordinate for lodgment of FIR and
taking other legal steps.
6. To obtain and provide details about incident/loss and arrange lodgment of proper
claims with concerned insurance co. in case of Allied Bank Limited it is EFU.
7. To refer the cases of delinquent staff to Human Resource Group (HRG),
recommending suitable actions in accordance with rules and regulations.
8. To liaison with agencies like Police/FIA/NAB for recovery of accounts, finalization
of cases and submission of challans at concerned courts and pursue the cases.
9. Submission of Quarterly statement of Frauds/Forgeries/Dacoities on the prescribed
format to the Operational Risk Unit, Banking Surveillance Department of State Bank
of Pakistan within 15 days of close of quarter.
10. Maintenance of database of operational losses of frauds, forgeries and dacoities and
its reporting to the Operational Risk- RMG.
11.
Fewer Incentives:
In back offices as compared to the branches the incentives are very less given to the
employees and this arises the dissatisfaction among them.
Work Burden:
In back offices the staff is very few as compared to the work load so the few employees
bearing the more work burden and this create discomfort in them.
No Job Rotation:
Most of the employees stick to the one job for long periods and having no grip on all the
operations.
In the some offices and wings of ABL the employees still depend on manual work which
causes slow performance.
Favoritism:
The most discouraging thing in ABL is that the promotions of employees are very late and
mostly based on favoritism.
Chapter 2 Analysis
SWOT Analysis
Strengths:
Weaknesses:
Opportunities:
1. The policies of the new government to uplift the economy and pursue financial sector
reforms are expected to yield positive results in the banking industry of the country.
The ABL is well praised to avail promising opportunities.
2. As a result of different steps taken by the government regarding the betterment of the
economy, small borrowers are attracted to get the financing and start business. So, the
ABL has an opportunity to attract the customers by giving them more attracted
schemes.
3. They have wide area network in all over the Pakistan, if ABL can made it possible the
fast delivery of funds from abroad through online banking, it can cover the major
market of Pakistan which still is capturing by “Hundi”.
Threats:
1. The biggest threat in the banking sector is the continuous downfall of the country
economy since the last few years.
2. Other treat which ABL faces is the policies of the Government; tax charged on the
income of banking co. is much than the income of other companies.
3. Sudden rise and fall in the trade and industry conditions and stock exchange business
of the country also adversely affect the growth of banking sector.
4. As the situation of Frontier Province of Pakistan is not sound and ratio of dacoity
cases in branches is high so it is the big threat to the Bank.
5. The default ratio of customers who are availing the credit facilities from the ABL is
very high due to the economic recession in Pakistan.
6. Also the threat of new entrants exists there.
Financial
Analysis:
Vertical Analysis
2004
2005
2006
2007
9.5%
5.8%
26.2%
52.6%
2.4%
3.6%
100.0%
2008
7.0%
4.3%
22.5%
58.1%
3.0%
5.0%
100.0%
9.5%
13.1%
34.7%
34.6%
2.2%
5.9%
100.0%
8.0%
10.4%
37.0%
38.4%
1.6%
4.6%
100.0%
9.4%
3.0%
23.3%
57.7%
2.5%
4.1%
100.0%
9.8%
7.6%
18.6%
57.2%
2.6%
4.3%
100.0%
December 31
Assets
Cash and balances with treasury and other banks
Lending to financial institutions
Investments - net
Advances - net
Operating Fixed assets
Other assets
Total assets - net of provisions
2003
Liabilities
Customer deposits
Inter bank borrowings
Bills payable
Other liabilities
Sub-ordinate loans
Total Liabilities
Share capital
Reserves
Un - appropriated profit / (loss)
Equity - Tier I
Surplus on revaluation of assets
Total Equity
97.2%
2.3%
1.5%
2.4%
0.0%
103.4%
0.9%
7.3%
-5.5%
-4.1%
0.8%
-3.4%
81.6%
8.1%
1.6%
2.1%
0.0%
93.4%
2.8%
3.0%
-4.1%
6.1%
0.5%
6.6%
83.8%
5.0%
1.3%
2.3%
0.0%
92.4%
2.3%
2.4%
1.4%
6.7%
0.8%
7.6%
81.7%
7.3%
0.9%
2.0%
1.0%
93.0%
1.8%
1.9%
2.2%
6.4%
0.6%
7.0%
82.5%
7.2%
1.1%
2.3%
0.8%
93.8%
1.7%
1.6%
2.2%
5.8%
0.5%
6.2%
81.1%
7.6%
0.8%
3.7%
0.7%
93.9%
1.8%
1.6%
2.3%
5.7%
0.4%
6.1%
283.4%
608.0%
1040.5%
131.5%
427.3%
173.3%
562.5%
Horizontal Analysis
Assets
Cash and balances with treasury and other banks
Lending to financial institutions
Investments - net
Advances - net
Operating Fixed assets
Other assets
Total assets - net of provisions
Liabilities
Customer deposits
Inter bank borrowings
Bills payable
Other liabilities
Sub-ordinated loans
Total Liabilities
Share capital
Reserves
Un - appropriated profit / (loss)
Equity - Tier I
Surplus on revaluation of assets
Total Equity
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
110.0%
105.3%
140.7%
146.3%
98.3%
101.6%
131.8%
160.9%
37.6%
110.3%
273.5%
181.8%
113.6%
163.9%
220.8%
124.0%
115.3%
354.2%
248.3%
155.2%
214.5%
271.4%
119.9%
206.1%
414.2%
290.8%
163.3%
272.4%
229.8%
102.8%
202.9%
523.8%
428.9%
264.4%
312.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
110.7%
470.5%
143.0%
113.1%
119.1%
414.3%
2035.7%
-97.3%
194.0%
90.3%
258.0%
141.3%
363.8%
138.1%
157.7%
146.5%
422.2%
1020.6%
42.1%
265.2%
182.8%
366.1%
180.4%
690.9%
128.5%
180.6%
192.9%
422.2%
1099.4%
86.4%
333.3%
163.0%
445.0%
231.1% 260.4%
860.7% 1042.5%
197.1% 166.6%
258.6% 480.5%
247.1%
506.6%
1084.6%
107.4%
378.1%
164.3%
500.1%
Financial Ratios:
2004
Rs. in Millions
2007 2008
December 31
CASH FLOW STATEMENT - SUMMARY
Cash Flow from Operating Activities
Cash Flow from Investing Activities
Cash Flow from Financing Activities
Cash & Cash equivalent at the Beginning of the Year
Effect of Exchange Rate changes on Cash & Cash equivalent
Cash & Cash equivalent at the End of the Year
FINANCIAL RATIOS
Return on equity (ROE)
Return on assets (ROA)
Profit before tax ratio (Profit before tax / Gross Income)
Gross spread ratio
Return on capital employed (ROCE)
Advances to deposits ratio (ADR) - Gross
Advances to deposits ratio (ADR) - Net
Income to expense ratio
Cost to revenue ratio
Growth in gross income
Growth in net profit after tax
Total assets to shareholders’ funds
Intermediation cost ratio
NPL ratio
Net infection ratio
Weighted average cost of debt
Capital adequacy ratio (CAR)*
SHARE INFORMATION
Cash dividend per share
Proposed bonus issue per share
Dividend yield (based on cash dividend)
Dividend payout ratio (Total payout)
Earnings Per Share (EPS) **
Price earnings ratio *** (PE x)
Market value per share - highest / lowest during the year
Book value per share
OTHER INFORMATION
Non - performing loans (NPLs)
Imports and Exports business
Number of employees
Number of branches
2003
Restated
2006
8,253
(8,512)
(12)
10,803
58
10,590
4,523
(17,183)
14,176
10,483
109
12,107
(5,893)
11,664
-
12,129
(21)
17,877
9,328
(4,241)
1,403
17,753
124
Institute of Business & Information Technology
Internship Report 2009
24,368
46,350
(38,461)
(1,904)
24,303
65
30,353
564
(3,544)
(1,755)
29,842
511
25,618
%
%
%
%
%
%
%
Times
%
%
%
Times
%
%
%
%
%
-
0.34%
16%
77%
-
44%
36%
1.4
69.5%
14%
136%
(24.1)
3.8%
35.7%
20.93%
3.54%
-12.33%
8%
0.14%
8%
85%
8%
55%
47%
1.5
66.5%
4%
-50%
16.4
3.4%
22.0%
8.28%
2.45%
16.64%
28%
1.78%
49%
80%
28%
74%
69%
2.30
43.5%
58%
1511%
14.9
3.0%
10.6%
3.64%
6.78%
12.17%
30%
1.98%
52%
61%
26%
74%
70%
2.43
41.1%
31%
42%
15.5
2.9%
6.91%
1.96%
9.09%
12.80%
24%
1.42%
40%
52%
21%
68%
64%
2.43
41.1%
17%
-7%
17.4
2.6%
6.36%
0.74%
9.96%
10.26%
21%
1.21%
34%
46%
19%
75%
72%
2.16
46.2%
21%
2%
17.6
3.0%
6.16%
1.46%
11.50%
10.90%
Rs.
Rs.
%
%
Rs.
Times
Rs.
Rs.
-
-
-
-
1.27
-
-
(37.4)
-
-
-
-
0.43
-
-
23.3
2.50
-
2.9%
36%
4.78
12.6
86.5
32.4
2.50
2.00
2.7%
46%
6.80
9.5
93.5
39.4
3.00 2.50
2.00 1.00
2.3% 8.0%
66% 54%
6.31 6.43
17.2 4.9
130.2 31.3
36.9 34.6
Rs. in millions
Rs. in millions
Nos.
Nos.
17,833
56,868
6,859
752
15,383
72,765
6,768
735
12,699
96,072
6,909
741
10,479
113,571
7,139
742
11,355 13,772
150,698 194,186
8, 181 8,325
757 766
2005
Future Outlook:
Institute of Business & Information Technology
Internship Report 2009
The global financial crisis has its effects trickling down to the banking system. The
financial sector is facing its lows but still on its comparative basis its better than other
neighboring countries owing to regulations and role of SBP to take timely corrective
measures. Measures include relaxation of CRR and SLR in phases.
The banking sector’s spread continues its rising trends after witnessing a dip to the level
of 6.78% in June 2008 that has been taken as an after effect of minimum profit payment
of 5% on saving accounts. The profits shows that long term investment in Pakistani
banking system will be lucrative, as the asset quality is quite satisfactory.
Challenges faced by the economy in general and banking sector in particular, include
restrained liquidity, slowdown of economic activities and high inflation. Despite of these
issues, ABL has been able to maintain its profitability and equipped to face challenges
with its dynamic management and trained workforce.
Weekly Activities:
First week:
In the first week of my internship training I have worked on the process flow chart of fraud,
forgery and dacoity. I have learnt how the reporting procedure of frauds, forgeries and
dacoities has done? The process flow chart of reporting of any incident about frauds and
dacoits in Allied Bank of Pakistan is here:
Detection of incident
2nd week:
➢ Whenever an incident of fraud forgery and dacoity takes place the concerned Regional Head/
Head Branch Operations or Group Head or Regional Operation Manager will immediately give
such information to the Head of “Special Vigilance Unit (SVU)”.
➢ After getting the documented information SVU makes the “Office Note” of the whole incident
and mail one copy to the SP&MC, Group Chief SAM, Group Chief CBRG, regional head and the
branch as well. During the first week of my internship training I have write 7 Office Notes after
reviewing the audit report and the document that send the concerned branch. One of the Office
Notes that I made is scanned here and also attached in annexure.
OFFICE NOTE:
➢ Also SVU immediately issue the emergency report of the incident to Management and State
Bank of Pakistan SBP in specific terms and conditions within the duration of 72 hours otherwise
State Bank of Pakistan will Charge the Penalty to the bank.
➢ The concerned Regional Head/ Head Branch Operations or Group Head or Regional Operation
Manager after that submit the FIR to the SVU.
➢ Audit and Inspection Group (AIG) will immediately be contacted to depute a team to make a
thorough probe and to submit the investigation to SVU.
➢ SVU immediately report the Insurance Co. i.e. EFU for the claim.
➢ Insurance co. (EFU) then appoints a surveyors and report it to SVU. Surveyors should submit the
survey report with policy documents within period of 60 days.
➢ The following documents are required for the survey to the surveyors:
➢ After the survey report of surveyor Chief Manager of the concerned branch submits the Police
Progress Report to the surveyor so that insurance claim will be finalize.
➢ During this process of Final Police Progress report SVU requested to release 80% of insurance
claim under banker’s blanket insurance policy and 20% after the submission of Final Police
Progress Report to the surveyor. Insurance co. (EFU) deducts the charges of insurance policy i.e.
Rs.50, 000 and bank transfer this loss or write off this amount to the “Expense Account” to
balance the figure of “Suspense Account”.
➢ Then enclose the Final Police Report and request to insurance co. (EFU) to disbursement of
insurance claim under banker’s blanket insurance policy that is remaining 20%.
➢ SVU issued “Legal Letter of Subrogation” to insurance co. and granting permission that all rights
title and interests transferred to the insurance co. in the said cash that it shall now the property of
insurance co. and bank have no right on it that police did not recover and has not found yet. The
scanned copy of “Legal Letter of Subrogation” is here also attached in the annexure.
➢ In the case if no amount is recovered under the banker’s blanket insurance policy then at Allied
Bank certain powers are defined who have rights to write off the lost/unrecovered amount
involved in cases related to inter branch, other assets, fraud and forgeries, looting/theft of cash.
These powers are delegated to the followings:
➢ Such report will immediately be put up before senior Management in order to proceeds with
suggested actions.
➢ SVU will liaison with the concerned branch/office controlling tiers and the external agencies, for
lodgment of proper repots/complaints as per law and to effectively monitor the legal action as
well as the task of recovery and to submit the progress report.
3rd Week:
All banks/DFIs are advised to submit a quarterly statement of frauds/forgeries/dacoities on the revised
format, within 15 days of the close of each calendar quarter along with a soft copy to the Banking
Supervision Department.
The quarterly report includes all actual as well as attempted fraud cases even if the bank may not have
sustained any monetary loss. Therefore, cases where bank recovers the entire amount involved and does
not suffer any loss must also be reported to SBP.
a) Preliminary report within 2 working days of the occurrence of such incident by mentioning the date of
the incident and other information about the case as available at the time of such reporting; and
b) Detailed report within 15 days of the occurrence of such incident on the format.
I prepared the quarterly report of Fraud, Forgeries and Dacoites of Allied Bank of Pakistan that submitted
to the State Bank of Pakistan for the 2nd Quarter of 2009 that is ended at June 30, 2009. The report was
submitted on July 17, 2009 to the State Bank of Pakistan.
SUMMARY POSITION OF CASES OF FRAUDS /FORGERIES /DACOITIES FOR THE QUARTER ENDED
30.06.2009
a No of cases 11 23 28 23 62
Total amount originally
b
involved 795.906 84.285 11.363 758.488 891.554
Adjustment to amount
c
involved during the quarter*** 0.000 0.000 0.000 0.000 -
Total recoveries prior to the
d quarter under report from old
cases 58.574 25.218 4.438 2.032 88.230
e Recoveries made during this
quarter from cases
outstanding prior to the
quarter
Insurance 0.000 2.507 0.312 2.819 2.819
Other sources 0.000 0.350 0.435 0.785 0.785
f Progressive Total Recovery 91.834
(1d+1e) 58.574 28.075 5.185 5.636
g Total amount still recoverable 799.720
(1b+1c-1f) 737.332 56.210 6.178 752.852
h Provision held against (1g) 448.874
above 400.427 43.113 5.334 446.388
i Provision held against (1g) 0.000 10.546 0.321 10.986 10.867
above during the quarter
0 Expected Recovery from
Insurance 302.423 39.345 3.903 317.758 345.671
Other sources 415.959 19.722 3.022 438.698 438.703
2 1)
3) Low
Serious 2. Medium
All Cases Detected during the quarter severity All No
frauds severity Total
under report (Whether detected and closed cases progress
cases cases 1-10 (1+2+3)
in the same quarter) below 1 cases **
(10M and (M)*
(M)*
above*
a No of cases 0 0 7 0 7
b Total amount originally involved 0.000 0.000 1.210 0 1.210
c Total Recoveries made, from any source
against the cases detected during the
quarter under report
Insurance 0.000 0.000 0.000 0.000 0.000
Other sources 21.382 0.000 1.210 0.000 22.592
d Total amount still recoverable ( 2b-2c) -21.382 0.000 0.000 0.000 -21.382
e Provision made against (2d) above 0.000 0.000 ANNEXURE
0.000 "A" (Form-I)
0.000 0.000
f Expected recovery from: ALLIED BANK LIMITED,
Special Vigilance Unit, SAM Group
Insurance 0.000 0.000 0.000 0 0.000
HEAD OFFICE, LAHORE
Other sources 18.950 0.000 0.000 0.000 18.950
SUMMARY POSITION OF CASES OF FRAUDS /FORGERIES /DACOITIES FOR THE QUARTER ENDED
30.06.2009
1)
3) Low
Serious 2) Medium
severity All No
All cases closed during quarter under frauds severity Total
cases progress
report cases (10 cases 1-10 (1+2+3)
(below 1 cases **
M and (M)*
M)*
above)*
a No of cases 0 5 9 14 14
Total amount originally involved ( after
b all adjustments to original amounts) 0.000 11.400 1.929 12.613 13.329
Total recoveries prior to the current
3 c quarter 0.000 9.713 0.719 10.33 10.432
d Recovery during the current quarter from:
Insurance 0.000 0.937 0.000 0.573 0.937
Other sources 0.000 0.750 1.210 1.71 1.960
e Total recoveries (3c+3d) 0.000 11.400 1.929 12.613 13.329
Total amount recoverable before closure
f of cases ( 3b-3e) 0.000 0.000 0.000 0.000 0.000
g Write off against provision 0.000 0.000 0.000 0.000 0.000
h Direct write off 0.000 0.000 0.000 0 0.000
1)
3) Low
Serious 2. Medium
severity All No
Cases outstanding at the end of quarter frauds severity Total
cases progress
under report cases cases 1-10 (1+2+3)
below 1 cases **
10(M) and (M)*
(M)*
above)*
a No of cases (1a+2a-3a) 1 11 18 26 9 55
Total amount originally involved ( 1b+1c+2b-
4 b 3b)² 795.906 72.885 10.644 745.875 879.435
Name Is it an
of Emergenc
Branch Amoun y
Fraud & Individu t Reported Date of Date of
S Identificatio Provinc Natur al Involve Fraud Commitme Detectio
# n Number e e Involved d Case nt of Fraud n
1 2 3 4 6 7 8 9 10
Khori
Garden
Branch
merged
with
Jodia
Bazar
Branch,
0501430100 Karachi 19.09.01 to
1 1 Sindh 03' 02' 01' Old case 25.09.01 25.10.01
Kaghzi
Bazar
Branch
merged
with
Bomba
y Bazar
Branch,
0501300000 Karachi 2000 to
2 1 / Sindh 09' 03' 01' Old case 2002 26.09.02
Total
S
pecial Vigilance Unit
Origina
Date of l Total Recover
Completio Date of Amoun Adjustme Adjustme Amoun y from
n of Reporti t nt before nt during t Previous Current Insuran
Investigati ng to Involve Current Current Involve Recover Recover ce
on SBP d Quarter Quarter d y y (Total)
Special
Vigilance Unit
Allied Bank SAM
Group, Lahore
Ph:0
425941270
Rs. IN MILLION
Write-
Progr off Expected Provisi
essive again Net Expected Recovery Provisio on
Total Direct st Total Amount Recovery through n before during Net
Recov Write- Provi Write-off Outstan through other Current Current Amou
ery off sion amount ding Insurance sources Quarter Quarter nt
W=W1+ O=A-R- W-
R=R1+ (W1) (W2) W2 W (X) (Y) (X+Y)
R2+R3
20 22 23 24 25 26 27 28 29 30
10.012 0.000 0.000 0.000 2.341 0.000 2.341 0.000 0.000 0.000
Case
pending in
the Court
of Law.
Regional
Settlemen
t
Committe
e has
deferred
the case
till Court's
0.000 0.000 0.000 0.000 19.530 decision. 19.530 0.000 0.000 0.000
10.012 0.000 0.000 0.000 21.871 0.000 21.871 0.000 0.000 0.000
Spec
ial Vigilance Unit
SA
M Group, Lahore
Allied Bank
Ph:0425941270
Status
Mr. Muhammad Shoaib, Cashier, dismissed from bank's services.
Mrs. Saira Ali OG-III, dismissed from bank's services.
Mr. Atta ur Rehman, OG-III, dismissed from bank's services.
Mr. Faisal Riaz OG-II, dismissed from bank's services.
Mr. Munir Ahmed Awan OG-II, dismissed from bank's services.
Mr. Yasir Mehmood OG-II, letter of reprimand issued.
Action against the
staff if any.
All the concerned staff of the branch has been advised to ensure enforcement
Steps taken to avoid such of the Bank’s laid down system/procedures in letter and sprit regarding
incidents in future operation of lockers under their jurisdiction in order to avoid recurrence of
such instance in future.
Reason
Fraud Classification (Enter Code) for the
time tag if
any i.e.
not Staff
Date of Date of reporting Modus Involved
Nature
Individu Amount Commitment Detection the case Operandi (Name &
& Busines
al Involve in the CNIC)
Branc s Line
Involved d quarter in
h
which it
was
detected
(1) (2) (3) (4) (5) (6) (7) (8) (9)
Field. Description.
Name of Branch. Hyderi Market Branch, Karachi
42101-9396910-5
CNIC No.
MG-08/Manager
Designation/Grade.
5th Week:
During the 5th week of my internship training in Allied Bank of Pakistan, the task of maintain
complete and comprehensive database of all the pending and withdrawal cases of frauds,
forgeries and dacoity since 2005 to till date is assigned to me and I have completed that
project within one week successfully.
6th Week:
During the 6th week of my internship training I have prepared the report of detailed insurance
claim lodged how much rejected from them, overall position of insurance claims and the
detail of the settled claims some of them is mentioned there.
Amount of
Sr Branch Amount Claim
No Name Involved Declined Loss No Reasons
Rs. in Million.
Natu No. Amou Cash Amou Amou 100% O/S Policy Total
re of of nt Recove nt nt Claim Amount Deducti (4+7+8
incid Settl Invol ry Receiv Recei Amou to be ble +9)
ent ed ved (Culpr ed ved nt Written Amoun
Clai its) from from Receiv -off as t
ms Insura Ins. ed Policy Alread
nce Co. from Deducti y
Co. up 01-01- Insura ble. Writte
to 31- 09 nce n-off
12-08 to Co.
31-07-
09
1 2 3 4 5 6 7 8 9 10
Dacoi 22.94
15 1.200 15.011 4.981 19.992 0.650 1.100 22.942
ty 2
Fraud
&
03 4.576 0.000 1.560 2.416 3.976 0.600 0.000 4.576
Forge
ry
Total 27.51
18 1.200 16.571 7.397 23.968 1.250 1.100 27.518
:- 8
Rs. In Million
Nature of Incident No. of Claims Claim
Amount
Dacoity 02 2.695
Fraud & Forgery 14 350.322
Total:- 16 353.017
Amount O/S
Amount Amount
Amount Receive 100% Amount
Cash receive Already
Sr involve d from Claim to be
Date of Recover d from Written-
. Name of d in M/s EFU Amount written
claim y M/s off as
N Branch. Dacoity from 01- Receive off as
lodged (Culprits EFU Up Policy
o / Claim 01-2009 d from Policy
) to 31- Deductibl
Lodged to 31-07- M/s EFU Deductibl
12-2008 e
2009 e
Send it to
Send Copies to
Issue
The credit approval matrix detailed herein is devided into two sections.
1. Approval Grid- defines the maximum approval authority assigned to six levels of
authority in the bank on a per party and group basis.
1. Per Party Limit- further divided into inner limits for lending against Agri Finance,
Security Types S1, S2, S3.
1. Approval Parameters-illustrate various terms and conditions applicable on different
lending products.
Approval Grid
Agri Per
Leve Financ Part Grou
ls Members Security Type e y p
S1 S2 S3
I BM/CM +RH RCRR 10 0 0 0.5 10 10
II RH CRBG+ Manager RCRR 25 10 0 5 25 25
Manager RCRR+Head Asset
III Marketing 100 50 50 50 100 100
IV Group Head CRBG 200 100 100 100 200 200
100 100 100
V GC CIBG 0 0 0 1000 1000 3000
All amounts exceeding level V as per
VI President Prudential Regulations
Approval Parameter
A. Term Loan & Level Level Level Level
Agriculture Finance Level I Level II III IV V VI
100% Against
Term Loan Security Type Allowe Allowe Allowe
(Exceeding One Year) 0 S1 Allowed d d d
Maximum Tenor for
Term Loan 0 2Yr 3yr 5yr 8yr Any
Maximum Tenor for
Agri Finance 3yr 3yr 5yr 5yr 8yr Any
B. Watch List &
NPLs
Approval of watch list
with or without
Rescheduling/Restruc
turing 50 >50 >50
Approval of NPLs
without
Rescheduling/Restruc Allowe Allowe
turing 10 d d
Approval of NPLs with
Rescheduling/Restruc Please refer to the
turing policy
C. Guarantees
Guarantees 100% a) upto Rs Allowed Allowe Allowe Allowe
Cash 25M against d d d
Margin/li 100% Cash
en on Margin/lien on
ABL ABL Deposits
Deposits b) upto Rs
10M against
25% Casah
Margin on ABL
Deposits and
balances
against
security type
Institute of Business & Information Technology
Internship Report 2009
S1 or Parri
passu
Mortgage on
Land & Bld.
Back to Back
Guarantees Allowe Allowe Allowe
against Exposure Allowed d d d
Agains Agains Agains
t t t
Securi Securi Securit
100% ty ty y Type
Continuing Cash Type Type S1,S2,
Guarantees Margin S1 S1 S3
D. Letter of
Credits
Letter of Credits 100% Usance LC: Allowed Allowe Allowe Allowe
Cash a) upto Rs 25 d d d
Margin/li M against
en on 100% Cash
ABL Margin b) upto
Deposits Rs 10 M
against 25%
cash Margin
on ABL
Deposits &
balances
against
security type
S1 or Parri
Passu
Mortgage on
Institute of Business & Information Technology
Internship Report 2009
Security Description:
Cash/Near Cash
S1 1 100% Cash Margin
2 Lien over Deposit
3 Lien over Registered Govt Securities
Institute of Business & Information Technology
Internship Report 2009
• Financial position
• Method of operation
• Management policies
• Future plans
• Product quality
As a credit analyst the following documents are essentially analyzed or to keep in view for
sanctioning the credit:
1. Credit Application
I. Exposure Summary:
1. Stability criteria whether the obligor previously breach or violate any essential
requirement e.g. Prudential regulation breach, Covenant violation
2. TER Temporary Extension Request
3. Approved by the Manager RCRR and recommended by RH-CRBG
I. Sanction Advice:
The Basic Information Report (BIR) contains the following information about
obligor:
1. Obligor Name, Address & Tel. No.
2. Date of establishment of business
3. Background of obligor’s business and product details
I. Credit Memorandum:
1. Borrower’s Basic Fact Sheet (BBFC) on approved pattern/ specimen duly filled in all
respect, duly signed & stamped by the obligor & BM
2. Form 151- Loan Application Form
3. Security Compliance Certificate SCC- confirming the security/ documentation status
for the existing approved facilities.
4. Copy of DAC in case of previous sanction
5. Latest Balance Sheet duly signed by obligor i.e. proprietor/Counter signed by CA/
duly audited as per requirements along with cash flow statements
6. Spread Sheet in case of exposure exceeding Rs. 10 M- to inculcate the practice of
determining the Short term working capital requirement and long term repayment
capacity through financial projection and cash flow analysis
Furthermore the documents for sanctioning the loan for agriculture required are:
1. Zarai Pass Book- Evidence of Title
2. Latest copy of Khasara Gardawri( to check applicant is self cultivator or not)
3. Fard Jama Bandi
4. Total cultivated land (owned+ rented)
5. Lease Agreements
Loan Entitlement
1. Valuation:
Generally the following are the types of collateral acceptable by ABL are:
Credit facilities against mortgage of land & building may be granted as per the
margins specified by the bank, on the forced sale value of the property
determined by PBA approved valuation firm, subject to the following
condition:
Credit facilities against pledge of readily marketable stocks, raw material and
finished goods may be granted as per margin requirements specified by the
bank subject to the following condition:
Management Style:
In Allied Bank of Pakistan, the Managers are promoting the “Open Door Banking”. They
used to interact with their subordinates and workers on time to time basis this is the main
reason the managers at ABL know the problems that their employees are facing and this time
to time interaction has created a healthy environment among the staff and their managers and
this monitoring increase the efficiency at ABL.
In ABL the managers having the control over the staff members and employees and having
the check over the tasks of employees that they are performing even on daily basis.
Although the environment is very learning but also in some wings and groups of ABL the
management approach towards their employees is still bureaucratic. Some most experienced
managers are hesitant to adopt the learning and open door banking.
Working Environment:
Allied Bank boasts of a work culture, which displays respect for all walks of life and different
ways of thinking.
Everyone at Allied Bank has a common corporate vision and values. However, all employees
are encouraged to grow as individuals and collaborate in teams.
Increments, bonuses and promotions are based solely on individual skills, qualities, abilities
and attitude. It is our aim to provide innumerable opportunities for all those employees who
show aptitude and the will to keep learning.
Training programmes, both local and foreign, are also considered important for employee
growth.
Overall Summary:
At present there is no such organization in the world that is free from problems and
challenges. Every concern has to strive and struggle a lot to be more profitable and to get
more competitive edge.
The management of ABL is taking strategic steps to enable the bank to emerge as a strong
and progressive institution. It is continuing to make efforts to refine its products and
operations to make them more compatible. New deposit schemes have been introduced and
an action plan to maintain revenue growth in future.
During my internship I have learned many new things in spite of the knowledge gained at
university and also came to conclusion that education alone is not enough, practical training
in every field is crucial to become a successful manager.
The bank has great image due to the trust but it needs to use it effectively to increase market
share. Also the flaws in branch operations such as misallocation of resources should be
rectified.
As the business and economic conditions remain uncertain, ABL continues to develop the
new products like it has been doing in past.
analyzed some problem in the Bank. Keeping in views those problems followings are my
recommendations:
1. The bank has a lot of financing schemes but there are little advertisements of these
2. Most of the bank employees are stick to one seat only, which result that they become
master of one particular job and lose their grip on other banking operations. So all
3. Some of the talented employees should be sent to other countries for their advance
trainings.
4. In back offices the employees are still depend on manual work which causes slow
7. ABL should introduce the Islamic products because it has the potential market.
While studying in IBIT, I have analyzed some problem. Keeping in views those problems
programmes among the departments i.e. IAS & IBA same as the UMT does with the
2. This institute also should organize the seminars with the cooperation of industries like
with Chamber of Commerce and Supply Chain Group of Pakistan that assist its
3. The institute also should arrange the field tours for its students to enhance and give
Annexure: