ALLIED BANK LIMITED

TABLE OF CONTENTS

TOPIC PAGE NO.

CHAPTER 1 1

INTRODUCTION 1

Definition of Banking 1

Origin of Banking 1

Banking in Pakistan 3

Organization of Banking in Pakistan 4

Historical background of ABL 6

Socio-Economic Objectives of ABL 8

CHAPTER-2 12

The Business of ABL 12

Functions of ABL 12

Management by Employees 17

Serving the Community 18

Departmentation 18

CHAPTER-3 27

HUMAN RESOURCE MANAGEMENT 27

Classification of ABL 27

Recruitment 28

Selection and Hiring Process 29

Probation and confirmation 30

Training 30

Promotion 30

Salary Administration 31

Performance Appraisal 31

Transfer 32

Retirement 32

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Resignation 32

Termination of Services 32

Discharge 33

Disciplinary Rules 33

Penalties 34

Appeal 34

Leave 34

Allowances 35

Fringe Benefits 36

Compensation 36

ABL saver’s schemes 37

CHAPTER-4 48

Critical Analysis of ABL 48

CHAPTER-5 53

Recommendations & Conclusions 53

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CHAPTER – 1

INTRODUCTON

DEFINITION OF BANKING

The best definition of a bank is in terms of its functions. “A banker is a dealer

in credit, he borrows from the public or people, and lends to merchants or

manufacturers. He borrows by accepting deposits, and lends by way of advances

against goods or securities or by discounting bills.”

Collins English Dictionary defines band as “ an institution offering certain

financial services, such as the safe keeping of money, conversion of domestic into and

from foreign currencies lending of money at interest.”

A band is an organization or a business house, which deals with money, credit

and other financial transactions. In general banks attract surplus money from the

people who are not using it at the time and lend to those who are in a position to use

for productive purposes. Thus people who have spare money they deposit the same in

the band where it can earn profit. On the one hand bank receives deposits from the

people and pays profit at a specified rate and on the other hand it advances loans to the

people in need at the specified interest rate of mark-up.

ORIGIN OF BANKING

The word “Bank” itself is derived from the words “Banco” “Bancus” or

“Banque” which means a bench. The early bankers, the Jews to Lambardy, transacted

the business of money exchange on benches in the market.

Banking is an ancient institution. It is in fact as primitive as human society.

Modern banks have developed from very old system of banking. It has been growing

side by side with the human civilization. Historians are of the opinion that perhaps they

were the Babylonians who developed banking system as early as 2000 BC There is

evidence to show that the temples of Babylon were used as bands.

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This was all because of the prevailing respect and confidence in the Clergy.

King Hammurabi (1728 – 1686 BC) the founder of the Babylonian Empire drew up a

code where in he laid down standard rules of procedure for banking operations.

In Greece, such temples are those of Ephesus and Delphi, were the most

powerful and biggest band of their time where the people deposited their money and

other callable for safety and security. The private bankers of Greece brought banking

to a high state of safety and security. The private bankers of Greece brought banking to

a high state of development thorough lending. Banking became so popular in the

business life of Athens that a special body of law was developed covering all financial

transactions.

The Romans organized and regulated the conduct of private banks in such a

way that utmost confidence was created in them. They were familiar with the use of

cheques and bills of exchange.

The Sub-continent society was also quite familiar with banking system right

from the beginning. Borrowing and lending of money existed in this area between

2000 and 1400 BC and the banking institution existed in one form or the other. G.

Crowther in his book “An out-line of Money” suggests that bankers has three

ancestors. Firstly; Gold Smiths, Secondly; merchants and thirdly; moneylenders.

In Europe, Eastern Bankers were moneychangers. At that time, these people

took an advantage of the process and started keeping deposits of valuables and

jewelries on the basis of their sound financial position in the community. The origin of

banking, which started in the 12th century after the fall of Roman Empire

subsequently, developed with the development of trade. The Jewish merchants of

Lombard developed baking system. Many of these Lombard (Merchants) migrated to

England in the 14th century, were the pioneers of Banking.

The “Bank of Venice” established in the year 1157 or 1171 AD is perhaps

among the first public banking institutions. Other bands such as Back of Barcelona in

Spain was founded in 1401, the Bank of Geneva (Italy) in 1407, the bank of

Amsterdam in Holland was established in 1609.In England development of bank took

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place in the days of Elizabeth-1. In 1640 public banking started. The Bank of England

was established in 1694. In 1935, Reserve bank of India was established. Quaid-e-

Azam Mohammad Ali Jinnah inaugurated the State Bank of Pakistan on 1st July 1948.

BANKING IN PAKISTAN

At the time of independence, the areas, which now constitute Pakistan, were

producing only food grains and agricultural raw material for Indo-Pakistan Sub-

Continent. There were practically no industries, and whatever raw material was

produced was being exported from Pakistan. However Commercial banking facilities

were provided fairly well here. There were 487 offices of scheduled banks in the

territories now constituting Pakistan.

Therefore, in accordance with the provision of Indian Independence. Act of

1947 an Export Committee was appointed to study the issue. The Committee

recommended that the Reserve Bank of Indian should continue to function in Pakistan

until 30th Sep. 1948, so that the problems of time and demand liability, coinage,

currencies, exchange etc. are settled between India and Pakistan.

Organization of Banking in Pakistan

At present the banking structure in Pakistan comprises of the following:

State Bank of Pakistan

Operates as the controller of money market. It is the Central Bank of the

Country with its offices at Karachi, Lahore, Peshawar, D.I.Khan, Sialkot, Sukkur,

Hyderabad, Gujranwala, Multan, Quetta, Faisalabad, and Rawalpindi/Islamabad.

Commercial Banks

Commercial Banks have been the most effective mobilizes of savings and have

been providing working capital to trade commerce and industry. Presently these banks

are operating in the nationalized and private sectors, after implementation of various

amendments in the Bank’s Nationalization Act 1974 in 1991.Upto Dec. 31, 1973 there

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were 14 Pakistani Commercial Banks, which were functioning all over the country and

in some foreign countries through the network of branches.

These were joint-stock banking companies incorporated under the Banking

companies Act. However, all these banks were nationalized with effect from January 1,

1974. According to the provision of the Bank’s Nationalization Act, 1974, all the

commercial banks were reorganized and merged into the following five banks.

i. Habib Bank Limited

ii. United Bank Limited

iii. National Bank of Pakistan

iv. Muslim Commercial Bank Limited

v. Allied Bank of Pakistan Limited

However, keeping in lime with the policy of liberalization of economy,

Government of Pakistan intends to disinvest and denationalized these banks in various

phases. So far Muslim Commercial Bank and Allied Bank of Pakistan already been

disinvested while efforts are underway to disinvest the United Bank Limited, Habib

Bank Limited and National Bank of Pakistan too.

Exchange Banks

Foreign banks other than Indian banks have been commonly known as

‘Exchange Bank’ due to the fact that prior to Independence foreign banks in the Indo-

Pakistan Sub-continent were engaged primarily in finance of foreign trade and

exchange business.

At present more than twenty-four foreign banks and European, American,

Middle Eastern, African and other countries are operating there more than 83 branches

in the port and main commercial towns in Pakistan.

Cooperative Banks

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Cooperative banks are an integral part of the cooperative movement which

aims at the promotion of thrift self-help and mutual aid amongst agriculturist and

others with common economic needs so as to bring about betters living, better business

and better methods of production etc. Generally, there is a three- tier system of

cooperative banks in Pakistan; and this system consists of Primary Cooperative

Societies at the base; Central Banks and Banking Unions in the middle; and Provincial

Banks at the top as ‘Apex Banks’.

There are 4 provincial or Apex Cooperative Banks, one each in Punjab, Sindh,

N.W.F.P., and Balochistan; Fifty-two Central Cooperative Banks and Banking Unions

and above 28000 Primary Agricultural and Credit Societies.

Cooperative Credit Societies

These are the societies, which have been formed to promote thrift, and self help

among its members belonging to groups of agriculturists, artisans and persons of

limited means. With the promulgation of Federal Bank for cooperative Act 1977, these

societies are no more affiliated with provincial cooperative banks and cannot use the

word “Bank” in the names.

Saving Banks

There is only one Saving Bank in Pakistan i.e., Post office Saving Bank and it

is controlled wholly by the Government of Pakistan. It accepts deposits from public

and invests them in various government projects. Its operations, therefore, is very

limited.

Specialized Credit Institutions

These institutions are generally government sponsored corporations that

provide medium and long-term finance to various sectors. Most of these institutions

are players in the capital market in Pakistan.

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HISTORICAL BACKGROUND OF ABL

Allied Bank of Pakistan Limited is the first commercial bank established on

Pakistani soil. It has emerged as an Australasia Bank on Dec. 3, 1942 at Lahore with

paid up share capital of RS. 0.12 million in a motor garage under the chairmanship of

Khwaja Bashir Bux with a staff of three. Initially, it was little more than an agency for

the collection of rents from the family estate.

Then, the tenants began to open accounts and the bank to make advances

against gold, insurance policies, and merchandise. The Bank had attracted deposits,

equivalent to RS. 0.431 million in its first eighteen months of business. Total assets

then amounted to RS. 0.572 million. Today, Allied Bank’s Authorized Capital is RS.

5000 million, Paid up Capital & Reserves amount to RS. 3012 million, Deposits come

to RS. 93107 million and total assets equal to RS. 106926 million (as on Dec. 31,

1999). The Allied Bank’s story is one of dedication, commitment to professionalism,

adaptation to changing environment challenges resulting into an all round growth and

stability, envied and aspired by many.

Later in 1973, Government of Pakistan decided to nationalize all banks of the

country and in the process, three smaller banks namely Sarhad Bank (Frontier Based),

Lahore Commercial Bank and Pakistan Bank were merged with a relatively bigger and

stronger Australasia Bank. A joint force with fresh zeal and enthusiasm was emerged,

named as Allied Bank of Pakistan Limited. Being a National Bank, ABL kept moving

forward steadily, contributing towards economic growth of country. As time passed,

our nation entered into the phase of denationalization and privatization. During 1991,

the Government of Pakistan decided to privatize Allied Bank of Pakistan Limited.

Prime Minister Mian Muhammad Nawaz Sharif during his first regime handed over

management of the bank to its own employees, as a unique phenomenon in the

country. At present the employees are acquiring 51% shares where as the rest of 49%

are held by Federal Government apart from holding 49% bank’s shares the

Government has also representation of 3 Directors in the total strength of 7 member of

Board of Directors of the bank who are fully and actively involved in the bank’s affairs

such as policy making and other financial matters.

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Post privatization era proved a blessing for ABL and it has shown tremendous

progress in all fields of banking.

ABL has a network of over 900 branches in Pakistan, whereas 150 branches are

working in N.W.F.P.

SOCIO-ECONOMIC OBJECTIVES

The Socio-Economic targets and goals of ABL are:

● To participate in the economic development of the country.

● To ensure greater satisfaction of its customers by providing better quality services.

● To ensure more utilization of public money.

● To provide loan on easy terms to the unorganized sector of the economy so as to

reduce the income disparities and to help raise the standard of living of the

poor.

Beside these corporate and socioeconomic objectives, profit is the primary

objective of all financial organizations, and all different activities are aimed towards its

achievement.

The ABL is also a business organization and its main objective is to maximize

its profit. The ABL can achieve its objective of profit maximization by two ways:

INCREASE IN DEPOSITS

Competition in banking is intense and every bank, whether foreign or Pakistani

tries to increase their field deposits by providing better facilities to its customers. There

are eighteen foreign banks and five nationalized Pakistani banks and all of them try to

attract more and more customers in order to increase their deposits. The bank can

extend greater amount of loans by increasing deposits, and hence profit. It can extend

greater amount of loans and hence profit maximization will be achieved.

The bank always tried to attract customers to open current accounts because on

current account, no interest is paid, although facilities are provided. Infect companies

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are not allowed to invest their money in saving or other deposits because of nature of

saving accounts which will be discussed later.

ABL and all other banks are to report to the State Bank of Pakistan. The only

difference is increase in the profit through few of the following factors:

i. Providing better product with attractive interest rates.

ii. Improving its services.

iii. Courtesy.

iv. Professional Customers Services Officers.

Better Product with Attractive Rates:

Providing such products, this can attract people from other competitors.

Improving its Services:

Services like prompt payment of cheques, TT’s drafts etc. provided by the ABL

make it different from other Pakistani Banks which are nationalized and most cannot

provide such efficient services.

Courtesy:

Courtesy is an essential part of business and by being courteous one can attract

more and more customers. All the staff of Grindlays is required to undertake a

compulsory training which is intended to make them learn to be polite with the

customers.

Professional Customer Officers:

Providing Professional Customer Services Officers who can deal with the

customers professionally and can satisfy them easily.

Extension of Loans:

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The profitability of a bank depends on the amount given to the people as loan

and the type of people to whom credit is given i.e., the credit worthiness of the

borrows. Deposits are collected from people and invested in different projects.

It is the duty of the bank staff to determine the viability and profitability of the

projects. It is also the duty of the bank staff to attract people, who are reliable and

worthy of being given loans by the bank. The bank charges mark up on the credit it

extends and the mark up charged on credit is the biggest source of income for the bank.

Thus a bank’s profitability will increased in the bank’s profits.ABL has an extremely

well organized investment bank. The staff is educated, trained, well mannered and

competent.

There are different officers whose job is to look after certain account holders,

which are either borrower. Complete financial analysis is made of the loan applicant

and different ratios are calculated. The bank specially emphasizes a sound quick ratio

because it shows the current assets, which are cashable and can be relied upon to

provide cover for the loans.

SERVICE OBJECTIVES

ABL is strongly oriented towards providing banking services to meet the needs

of the customers. It offers a wide range of services to its customers in addition to the

proper banking functions.

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CHAPTER 2

THE BUSINESS OF ALLIED BANK:

The business of the bank is to satisfy customers who seek assistance and advice

in meeting their financial goals. Its primary emphasis is general banking services,

namely deposits, loans, payment and collection. Fund management services, merchant

banking and leasing, credit for small and large enterprises etc. are also being offered

by the bank. It has selectivity entered into new areas that broaden the range of services,

logically extend the existing strengths and match and surpass competitor offerings.

Pakistan is its principal market. Abroad. It has presence in the United Kingdom, along

with a number of representative and correspondent banks around the Globe. It’s

rapidly seeking expansion in the Middle East and Central Asia.

FUNCTIONS OF ALLIED BANK LIMITED

Functions of ABL are summarized below:

Accepting Deposits:

The primary function of the commercial bank is to receive surplus balances of

individuals, public houses and institutions and to honor cheques drawn unto them. The

funds deposited with Allied Bank are as follows:

(a) Current deposits:

Current deposits are those deposits, which can be withdrawn at any time by

drawing a cheque on the bank. ABL does not charge markup on the deposits because

they are short-term deposits and are repayable without any notice.

(b) Profit and Loss Sharing Account (Saving):

These deposits are not meant for the purpose of current payment but for

payment but for employing savings.

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The bank undertakes to repay deposits on demand upto certain limit. On such

deposits to declare the following PLS profit rates for the period

Types of Deposit

PLS Saving Deposits 8.00% per annum

PLS TDRs – 1 Month 8.40%

2 Month 8.80%

3 Month 9.20%

6 Month 10.40%

1 Year 10.80%

2 Years 11.80%

3 Years 12.70%

4 Years 13.70%

5 Years 15.00%

PLS SNTD 7 Days 6.00%

30 Days 6.80%

(c) Fixed Deposits:

These deposits are repayable only after the expiry of the period for which they

are repayable only after the expiry of the period for which they are deposited. The

bank allows high rate of interests on them depending on the time period of loan. The

shorter the time period of loan, the less will be the interest rate and vice versa.

FINANCING;

The other important function of the ABL is to provide finances to the

individuals and business houses against securities at a certain fixed rate of interest.

ABL tried to attract the idle funds of the public and lend them at higher rate of interest

then what they pay to their customers following four types of financing takes place at

ABL:

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i. Demand Finances:

Demand Finances are those finances, which are given on demand. It is a single

transaction. It can be long, medium and short term. Markup is also charged. Here the

amount can be withdrawn once at the time of disbursement.

ii. Running Finances:

It is always a short-term loan i.e., one-year. It can be withdrawn at any time and

deposited at any time. It is basically for running day today business operations.

iii. Cash Finances:

Cash finances are for a limited period of time i.e., one year. It is advanced to

people to complete the working process.

iv. Fixed Asset Financing:

Fixed asset finances are long term finances. These are provided to projects for

purchase of machinery and cost of purchase.

DISCOUNTING BILLS OF EXCHANGE:

The bank utilizes their surplus funds in another important way. They discount

the bills of exchange at their market worth, i.e., the pay to the holders of the bill an

amount equal to their face value after deducting interest at the current market rate for

the period the bill has to mature. The bills of exchange are a very liquid asset for a

bank to hold. These bills are usually drawn for three months and are used for financing

internal as well as external trade.

In addition to the above main function, ABL performs a number of other

services for their clients. These services are as follows:

Agency Services to Customers:

Following are the agency services to ABL.

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i. Collection of Cheques

ABL acts as an agent to its customers in the collection and payment of cheques,

bills and promissory notes. Bank charges 60% commission on collection of cheques.

ii. Collection of Dividends:

The bank provides a very useful service in the collection of dividends or

interest earned on stocks and shares held by his customers. The customer is simply to

inform the issuer of the securities that the interest on the securities is to be credited to

his account in the bank. Bank charges 30% on this collection.

iii. Purchase and Sale of Securities:

ABL is authorized by the customer, purchase or sale securities on his behalf

and thus adds another benefits to his portfolio. Banks charges are as follows:

15% upto RS. 10000

10% on amount exceeding RS. 10000

iv. Execution of Standing Instructions:

The customer may order in writing to his bank to make payments of regularly

securing nature to an individual or firm by debiting to his account. The payments will

be stopped on written instruction of the customers only. ABL charges RS. 20 per

transaction.

v. Transfer of Funds:

ABL also transfer funds of the customers from one bank to another bank. If the

transfer is at one station, they don’t charge any commission and even if they charge,

they charge on reduce rate.

vi. Acts as an Agent:

ABL also acts as an agent, correspondent or representative of his customers at

home and abroad.

GENERAL UTILITY SERVICES:

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ABL also performs a number of other general utility services to his client,

which are as follows:

i. Foreign Exchange Business:

ABL transacts foreign exchange business by discounting foreign bills of

exchange and thus provides facilities for financing the foreign trade.

ii. Acts as a Referee:

ABL provides a useful service to his customers by acting as a referee for his

credit worthiness. The information is supplied in almost secrecy and is based

impartially on the respectability and financial standing of the client.

iii. Acceptance of Bills of Exchange:

ABL also undertakes acceptance business in connection with bills of exchange

and thus enables its customers to obtain the desired credit.

iv. Issue of Traveler’s Cheques:

The bank has introduced the schemes of Rupee Travelers Cheques and issues

them for the convenience of travelers and charges a nominal commission. In addition

to these bank also performs a number of functions and activities for and on behalf of

its clients with the sole purpose of serving them to the best of its capabilities and

potentialities.

v. Collection of Utility Bills:

The ABL branches throughout the country accept all sorts of telephone, water,

gas and electricity bills from public and even it has set up special booths for utility

bills collection in areas where branches of ABL are not available nearby. ABL has got

the widest bills collection network throughout the country.

vi. Locker:

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ABL also provides locker facility ro its clients where valuable of people can be

kept. Following are the charges of bank:

Small RS. 300/- per annum

Medium RS. 500/- per annum

Large RS. 800/- per annum

Extra Large RS. 1500/-per annum

MANAGEMENT BY EMPLOYEES:

Almost every employee is a shareholder and owner of the Bank. Management’s

foremost responsibility is to keep them fully informed and participate. With the help of

about 9000 employee owners the bank maintains a prudent risk profile and a strong

credit rating to protect shareholders’ investment.

SERVING THE COMMUNITY:

Local communities expect from bank to consistently discharge its social

responsibility as employee-cum-owner corporate organization. It is achieved by

serving the public interest and the interests of consumers and local business

nationwide. It encourages its business its business partners to participate in community

work.

DEPARTMENTATION:

ABL has various departments, which are performing different jobs assigned to

them. It has following seven departments.

1. Cash Department.

2. Advances Department

3. Remittance Department

4. Foreign Exchange Department

5. Clearing department

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6. Bills Department

7. CD Department

1. Cash Department:

Cash department deals with the cash in the bank. The basic function of cash

department is that it receives money from people and makes payment to people. When

the bank receives money, it is deposited with the bank and cheque is presented to the

customers with the help of which they can withdraw money at any time.

Payment can be done through cheque and cheque is merely an order on a bank

by its client to pay a sum of money to himself or to a third party on demand.

Features / Essentials of Cheque:

a. It must be in writing.

b. It must be an unconditional order.

c. The drawer must sign it.

d. The banker must be specified on the face of the cheque.

e. It must be payable on demand.

f. The cheque must contain sum of money to be paid.

g. It must be payable to the order or bearer of the cheque.

There are three kinds of cheques:

i. Bearer Cheque

ii. Order Cheque

iii. Cross Cheque

i. Bearer Cheque:

Bearer Cheque is that which any person who presents it at the counter can cash

from a bank. It requires no endorsement.

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ii. Order Cheque:

If the word bearer is cut from the cheque and the person who issue the cheque

write the name of the person e.g., pay to Mr. Ahmad, then the payment will be made to

the same person which is written on the cheque, it then become an order cheque. Order

cheque is a safe form of payment because it cannot be enchased unless a bank

ascertains that it is paid to the person.

iii. Crossed cheque:

If the parallel line are drawn across the face of the cheque and the words “&

Co.” are written between term, it becomes a crossed cheque. This cheque can only be

deposited in the payee’s account, or the payee can endorse it to somebody else’s

account.

Dishonored Cheque:

A cheque is said to be dishonored when it is not paid on presentation by the

bank on which it is drawn on account of the following reasons:

i. Cheque is out of date.

ii. Date is not mentioned.

iii. Amount written in words and figures does not agree.

iv. Customer has become insolvent or has no funds at his credit.

v. When the signature over the cheque differs from specimen signature.

vi. Drawer has closed his account.

vii. Cheque is mutilated.

viii. When the banker has been served with “ Garnishee order” i.e., an order by the

court of law ordering the bank not pay or honor any cheque drawn by his

customer.

ix. Lack of full signature on any alteration.

x. When the banker receives the notice about the death of customer.

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xi. When the amount of the cheque exceeds the funds of the customer.

xii. Post-dated cheque presented before date.

xiii. Cheque is six months old i.e., stale cheque.

xiv. Spoiled cheques.

xv. Title of holder is defective.

xvi. The drawer stops payment.

xvii. Funds are not received.

xviii. Payee’s endorsement is irregular.

xix. Payee’s endorsement is not made.

xx. Pencil written cheque.

xxi. Cheque bears a rubber stamp signature.

xxii. When the banker receives a notice of loss of cheque and the cheque is

presented for payment.

Banks deals with three types of transactions when they receive cheques from

their clients:

a. Clearing:

It deals with transaction or cheques relating with other banks.

(a) Transfer:

It deals with cheque relating with Allied Bank Limited branch.

(b) Cash:

Cash means cash transaction.

1) Advances Department:

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Advance department deals with all the advances, which are made to the

customer. The basic aim of grant is to utilize money and get better returns i.e., profit.

Following types of financing takes place at ABL.

i. Demand Finances:

Demand finances are those finances, which are given on demand. It is a single

transaction. It can be long term, medium and short term. Markup is also charged.

Amount can be withdrawn once at the time of disbursement.

ii. Running Finance:

It is always short-term loan i.e., one year. It can be withdrawn at any time and

deposited at any time. It is basically for running day to day business.

iii. Cash Finance:

Cash finance is for a limited period of time i.e., one year. It is advanced to

people to complete the working process.

iv. Fixed Asset Financing:

Fixed Assent Financing are long term finances. These are provided to projects

for purchase of machinery and cost of purchase.

2) Remittance Department:

The bank transfers a large proportion of money from one place to another or

from person to person. The department, which deals with transfer of money, is called

Remittance Department. Transfer of money takes place through the following bills of

exchange.

i. Mail Transfer:

A mail transfer is an order by a bank to its branch agent or correspondent bank

in a foreign center. It is an order to pay a specified sum of money to the person named

in the instrument. Surface mail or airmail sends it. There is no risk of falling into the

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hanks of wrong persons, as the bank sends it directly to its agent in the foreign country.

The commission charged by the bank is called MT rate.

ii. Telegraphic Transfer:

The order to pay is dent by cable. The buyer of goods or the debtor makes the

payment to his banker in the home currency and purchases the telegraphic transfer. It

informs its foreign or local correspondent by wire to make payment in the foreign or

local currency to a specified person. The bank generally uses a private and secret code

to ensure payment to the right person. T.T rate is always higher than M.T rate.

iii. Demand Draft:

Money could be remitted from a place to another by means of demand drafts. A

draft is an order drawn by a bank on its branch in a different place requiring the letter

to pay on demand the sum of money specified in the draft. A person, who wants to

remit money specified in the draft. A person, who wants to remit money by draft pays

the money and the commission to the local banker and obtains the draft. This is sent to

the other party by posts that will encash it by presenting it to this bank.

3) Foreign Exchange Department:

Foreign exchange is concerned with exchanging the currency of one country

for that of another country. This exchange of currencies necessitates calculating and

expressing the ratio of one currency to the other, in other words, determining a rate of

exchange.

ABL has four sub-departments in the foreign exchange department.

i. Import and Export Department

ii. Remittance Department

iii. Collection and Exchange Department

iv. Foreign Currency Account Department

1) Import and Export Department:

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Import and export department deals with import and export transaction. Here

letter of credit is an important means of making payment. The letter of credit is not an

instrument that is directly used for effecting payments but it is an arrangement by

which facilities are offered for settlement of obligations, whether internal or

international.

2) Remittances Department:

It deals with the transfer of money. There are four types of remittances.

a) Outward Remittances

b) Inward Remittance

c) Commercial Remittances

d) Private Remittances

a) Outward Remittances:

The term “outward remittance” means sale of foreign exchange in any form

and includes not only remittances by FITs, FMTs, drafts etc., but also sale of traveler

cheques, travelers letters of credit, foreign currency note and coins etc. The three types

of application form for outward remittance is:

Form 1 for Import

Form T-1 for Travel and

Form M for all other purpose.

b) Inward Remittance:

The term “ inward remittance” means purchase of foreign currencies in

whatever form and includes not only remittances by MT, T.T, drafts etc. but also

purchase of travelers cheques, draft under traveler, letter of credit, bill of exchange,

currency note and coins.

c) Commercial Remittances:

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In the context of exchange control regulations, commercial remittance is

outward remittances in foreign exchange from Pakistan arising from business needs

and obligations to invisible items and therefore excludes remittance for imports.

d) Private Remittance:

Private remittance is outward remittances in foreign exchange arising from the

personal needs and obligations of residents.

3) Collection and Exchange Department:

This department deals with the collection and exchange of all foreign cheques

and bill etc.

4) Foreign Currency Account Department:

Designated branches of ABL may without prior approval of State Bank of

Pakistan, open with them foreign currency account of:

Pakistan National residing abroad and

Pakistan Nationals having dual nationality.

5) Bills Department:

Bills department is mainly concerned with collection of bills and lodging of

bills. There are two main types of bills.

a) Clean Bill

b) Documentary Bill

a) Clean Bill:

When an outstation cheque is deposited with the bank that is known as clean

bill.

b) Documentary Bill:

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`Where the bill is supported by documentary proof i.e., R.R. or truck receipt.

6) CD Department:

The basic purpose of CD department includes following functions such as

maintaining records of saving account holders, current account holder, their signatures,

their scrutiny etc.

CHAPTER-3

HUMAN RESOURCE MANAGEMENT

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Management of people at work is very important in every organization,

because organizational goals and objectives are achieved by co-ordination of people

working in that organization.

Human resources office of ABL is an important office of the entire

administrative setup. This office manages whole administrative matters relating to

personnel right from recruitment to selection, pay, promotion, etc. to retirement

matters.

The ABL doesn’t have its human resources department in every branch, rather

all its personnel activities, no matter how trivial they are controlled by human

resources department at Head Office, Karachi.

CLASSIFICATION OF ABL:

The categories of services in ABL are classified as under:

Category A

Chief Executive

President

Executive Vice President (EVP)

Senior Vice President (SVP)

Vice President (VP)

Assistant Vice President (AVP)

Category B

Officer Range 6

Officer Range 5

Officer Range 4

Officer Range 3

Officer Range 2

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Officer Range 1

Category C

Clerical Staff

Category D

Drivers

Guards

Chowkidars

Peons

Sweepers

RECRUITMENT:

Recruitment is the process searching for prospective employees and stimulating

them to apply for jobs in the organization.

Human Resource Officer is responsible for the recruitment of personnel for

almost all the departments of ABL. When any department require personnel it put, its

demand before this office along with the job specification. Human Resource Office

first tries to locate the desired person from within the various sections of the bank. If it

fails to find a desired person than it hires from outside. Appointment to different

grades are prescribed by board of directors from time to time selections are made on

the basis of merit and merit is determined on the following basis:

i. Educational qualification

ii. Professional qualification

iii. Place of resident location of branch where staff is required.

iv. Experience in banking.

v. Experience in the position and job description in the case of specialized

position.

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vi. Past achievement in marketing.

vii. Marks obtained in the written test.

viii. Marks secured in final interview.

SELECTION AND HIRING PROCESS:

After the applications have been received call letters are issued to the

candidates.

The various steps involved in the selection process are:

1. Preliminary interview.

2. Intelligence test.

3. Interview.

4. Investigation of background of the candidates.

5. Merit list.

6. Preliminary selection.

7. Approval by competent authority.

8. Physical examination.

9. Placement.

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PROBATION AND CONFIRMATION:

An employee selected by the Bank may be placed on probation for a period of

six months or it may be extended if it so required usually for the officer’s probation

period is six months and for non-clerical staff it is three months.

On the satisfactory period or extended period of probation the employees

concerned may be confirmed in any grade.

TRAINING:

After the employee has been recruited, selected and inducted they are trained

and developed to better fit the job in the organization. No one is perfect fit at the time

of hiring and some training an education must take place. Banking industry is

backbone of every economy; therefore the need of trained personnel in this typical

service industry is much more important. ABL has one training institute in Lahore,

suitable training method increase the quantum of learning within a given period of

time.

The bank provides on the job training facilities to employees through job

rotation to in different department as per requirement training more emphasis is in

practical.

There is a four months off the fob training at the ABL Training Academy

Lahore. Which is followed by four months on the job training.

PROMOTION:

Promotion cannot be claimed as a matter of right as on the basis seniority but

on the basis of performance. Main criteria for promotion are the performance and skills

of the individuals though seniority is also taken into consideration but it is of

secondary importance. ABL has defined perfect career paths for its employees and the

staff gets promotion accordingly in their grades by way of transferring from one

position to the other. Normally employee is promoted to the next grade after 3 years

but promotion is totally based on 3 years performance of the employee.

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SALARY ADIMINISTRATION:

One of the most difficult functions of personnel management is that of

determining those rates of monetary compensation. Not only is this one of the most

complex duties but it is one of the most significant to both the organization and the

employee. It is important to the organization because wages and salaries often

constitute the greatest single cost of doing business. Salary package offered by ABL is

quite attractive in the market.

An employee draw the pay of the range to which he is appointed from the date

of appointment to such grade.

PERFORMANCE APPRAISAL:

As the name indicates, performance appraisal is evaluating the performance of

the employees for given period of time. It is a systematic evaluation of the individual

with respect to his performance of employees as ABL is appraised on the basis of

Annual Confidential Reports. A Performa made by head office is send to immediate

superior for filling. There are three different types of appraisal proformas used for

evaluating the performance of an employee in ABL:

1. Executive

2. Officers

3. Clerical Staff

Increments are decided on the basis of these appraisal reports according to the

performance role in the development and encouragement of the staff.

In ABL the performance of the employees are evaluating on the graphic or

linear method.

TRANSFER:

ABL takes a lot of its employees so there are very few inter branch transfer.

Further different kinds of problems may crop up in transferring an employee from one

30

station to another station. Therefore transfers are rarely made and are only on the

managerial levels according to the requirements of position. It may also be possible at

the request of the employees.

RETIREMENT:

An employee shall retire from service on attaining the age of sixty years,

provided that the board in a special cade may allow extension in its desecration. At the

time of retirement the worker are given their compensation on the form of provident

fund and gratuities.

RESIGNATION:

An employee other than a probationary officer may resign from the services of

the bank after providing prior notice in writing or in lieu of notice pay to the bank an

amount equivalent to his substantive pay for the period of notice.

TERMINATION OF SERVICES:

The bank may terminate the service of any employee or call upon him to resign

from the service of the bank. In either case he will be entitled no notice in writing.

Salary in lieu is given for the period as under:

90 days notice Category A to Category D for confirmed employees.

30 days notice Employees on Probation.

DISCHARGE:

When an employee in the opinion of the management is incapable or has

ceased to be capable by reasons of infirmity of mind or body.

The competent authority may discharge him on medical ground and pay him

such compensation as may be decided by the board.

DISCIPLINARY RULES:

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It is a force that prompts individuals or group to observe rules regulation and

procedure, which are deemed to be necessary for the effective function of the

organization. Discipline; in ordinary conduct of affairs by the members maintain

harmony and peace in organization willingly.

1. Observance of rules.

2. Maintenance of secrecy.

3. Absence from duty.

4. Misconduct

5. Direct representation to director

6. Disobedience with any lawful and reasonable order of the supervisor i.e.

transfers.

7. Fraud and forgeries.

8. Damage or loss (bank property).

9. Sleeping while on duty.

10. Collection of money with in the office premises for any purpose not approved

by bank.

11. Striking.

12. Unauthorized use of bank property.

Any violation in these disciplinary rules result in different types of penalties

given below.

PENALTIES:

An employee found guilty under any rule or any offense of misconduct is liable

to one or more of the following penalties.

1. Reprimand.

2. With holding for a specified period confirmation on promotion or increment.

32

3. Recovery form salary of the whole or part of any particular loss caused to the bank

by the employee.

4. Demotion to any lower grade.

5. Removal from services.

6. Termination by way of punishment.

7. Dismissal from services

8. Compulsory retirement from the service with or without retirement benefits.

APPEAL

An employee who has been awarded penalty shall have right to appeal before

the competent authority.

LEAVE

At ABL., following types of leave are granted to employee.

SICK LEAVE

The annual entitlement is 30-calendar day’s sick leave. In the event of

prolonged illness the competent authority may sanction further sick leave up to a

period, not one ending the period of leave that has been lapsed.

EARNED LEAVE

This leave is over 45 days in a calendar year. Maximum period of earned leave,

which can be taken at one time by an employee, is 60 days. Under special

circumstances at the discretion of chief executive.

EXTRA ORDINARY LEAVE

Extra ordinary leave can only be granted to an employee when no other leave is

available to him. An unauthorized leave at the discretion of the competent authority is

treated as extra ordinary leave. No pay allowance or any other benefits or increments

are given.

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MATERNITY LEAVE

Female staff is entitled to maternity leave for period not exceeding six weeks.

Time interval between first leave and last leave should not be less than two months.

ALLOWANCES.

The Grant of special pay or allowance to the holder of any post or to any other

employee shall require the sanction to the competent authority kinds of allowances for

employees at ABL are:

House rent allowance

Technical allowance

Utility allowance

Washing allowing (non-clerical staff)

FRINGE BENEFITS

Medical facility

Facilities at residence

Leaves fare assistance

Grants of incentives for improving qualification every year

Increment (annual increase in the basic pay)

Cash prizes

COMPENSATION

Allied Bank Limited offers three types of compensation to it’s workers.

Provident Funds

Employees Insurance Scheme1

Gratuity

1

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PROVIDENT FUNDS

Provident fund scheme is funded by equal contribution from both employer and

employee at the rate of 8.50% of basic salary is deducted every month from the salary

of employee and is doubled by Bank. It is payable after retirement of the employee.

EMPLOYEE INSURANCE SCHEME

After confirmation ABL is given life insurance. The amount of insurance is equivalent

to 48 basic salaries of the employee. In this way, the worker feels more secure and

satisfied while working as ABL employee.

GRATUITY

Employees who have completed 5 years of service are entitled to Gratuity after

retirement. Bank compensates the employees on the basis of one basic salary for every

completed year 10.

SAVER’S SCHEMES

Allied Bank has offered many saving schemes for savers there curative saving

schemes are:

Young Saver Certificates

Overseas Savers Account

Allied Mahana Acadani Scheme

Super Premium Term Certificates

Premium plus Account

High Premium Account

ALLIED YOUNG SAVERS CERTIFICATES

The habit of saving has always paid dividends to make savings grow at a faster

rate to meet customers future needs. Allied Bank introduces a highly curative scheme

Allied Young Savers Certificate.

35

Salient features.

Children and individuals of all age groups are the investors of the scheme.

There is no age limit.

The children will open and operate their account. Through their

parents/guardians, the investors will be provided certificates against their investments.

The certificates shall be of the following denominations:

RS. 1000/- RS. 10,000/-

RS. 3000/- RS. 50,000/-

RS. 5000/- RS. 100,000/- 2

Maturity period of the certificate will be 10 years. The average expected rate of

profit for 10 years would be 15%.

ALLIED OVERSEAS SAVERS ACCOUNT:

Overseas Pakistani is playing an important role in the economic development

of the country. Allied bank is always greatly concerned about the due recognition of

these stalwarts for making a singular contribution to the progress and prosperity of the

nation. We are always in the lead to offer greater banking facilities to Pakistani

working overseas. Most of saving’s schemes pay special attention to the fact that

overseas Pakistani is working there heats out, should get all the facilities possible for

not only remitting their earnings home buy also getting better value of this savings.

The beneficiaries receiving the remittances through Allied bank and investing it

through Allied overseas savers Account will not only be able to earn a higher rate for

profit buy the remitters will also feel that the money being sent to their kith and kin

will remain safe, secure and growing.

Salient features.

2

36

This is the easiest, fastest and safest way of sending remittances home, the

amount I saver’s account will get 3% extra profit in the first ear. Account holder’s get

the entire professional services and facilities offered by ABL. Many saved from

domestic expenses not only remains safe but also earns profit continuously.

Unlike other saving accounts saver’s can withdraw as much money a they want

from ABL overseas savers account without ginning any advances notice.

ALLIED MAHANNA AMADANI SCHEME:

Salient Features

Minimum investment Rs. 25,000/-

Maximum investment Rs. 100,000/-

The maturity period for Mahanna Amadani certificates is 5/10 years.

Investment can be done by:

Individuals singly of jointly

Proprietary/Partnership concerned companies in their names.

It carries special attraction for

Retired civil and armed forces employees

Widows and children being brought up by guardians

Expatriates looking for permanent monthly income

ALLIED SUPER PREMIUM

TERM CERTIFICATES

Allied bank has launched yet another saving scheme containing very attractive

rates of profit rates of profit the scheme has been names “ Allied Super Premium Term

Certificates ”.

Salient Features

37

Allied super premium term certificates are of the following denominations:

Rs. 10,000/- 100,000/-

Rs. 500,000/- 1,000,000/-

Super premium term certificates have been categorized as A, B and C referring

to quarterly, half yearly and yearly profit payment respectively.

Super premium term certificate, which bear the names of respective account

holders. The maturity period of these certificates in 3 years.

MODE OF PROFIT PAYMENT.

The valued customers will enjoy the facility to receiving their profit through

cash postal money order/Demand Draft/Pay order or by transferring it to their usual

current/saving bank Account as per their written instructions and addresses provided

by them.

ALLIED PREMIUM PLUS ACCOUNT

Allied bank keeping up its tradition of introducing innovative banking schemes

and pans for the services and benefit of valued clients has developed a new product

titled premium plus account (PPA). This scheme with higher rates of profit has been

introduced exclusively for the benefit of:

1. Large corporate Groups

2. Govt. and semi – govt. concerns

3. Multi-National companies

4. Big companies

5. Individuals

Salient Features

Investment can be made with a minimum deposit of Rs.10.00 million under

two types of accounts.

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1. Premium Plus operational account

2. Premium Plus term deposit account

Following are the estimated rates of profit:

ON operational account 10 per annum

ON term Deposit Account 12% per annum

30 days 14% per annum

6 months 14 1/2% per annum

One year 14% per annum

Rates of profit shall be subject to revision/adjustment on half yearly basis.

Operational account shall be opened in the style of current account.

The minimum balance shall have to be maintained at Rs. 10.00 million. In case

the balance droops below Rs. 10.00 million on a day in a month, the account holder

will not be entitled for the profit of that particular month.

Profit shall be paid on half yearly basis there is no upper limit of investment for

maintaining the account.

Premature Encasement

In case of premature encasement of certificate profit will be paid as per scheme

schedule of rates. However, no profit will be paid for broken period e.g. If the

customer with draws from. The scheme during the 7th year, before its completion,

he/she will be paid profit with compound effect for six years only.

ALLIED MAHANNA AMADANI SCHEME

Rates of Return

The estimated minimum rate of profit will be 1.166-% month. The monthly

return on various amounts would be as follows:

Rs. 1,00,000/- Rs. 11,666/-

39

Rs. 5,00,000/- Rs. 5,830/-

Rs. 100,000/- Rs. 1,166/-

Rs. 50,000/- Rs. 583/-

Rs. 25,000/- Rs. 291/-

If the profit declared by the bank is higher additional profit shall be paid to the

depositors.

Mode of Payment

You will enjoy the facility of receiving the profit through payment

order/demand draft postal money order every month at your doorsteps.

At your discretion you or your authorized representative can also receive the

profit through cash/pay order/demand draft.

Since the profit shall be payable by the branch where you will open your

account under the “ Allied Gahanna Amadani Scheme” your profit can also be credited

to customers account every month.13

PREMATURE ENCASEMENT

Following rates of profit are to be applied in case of premature

encasement. If the certificate is held for less than 90 days no profit.

If the certificate is held for 3 months but less than 3 months but less than 6 months

Preceding PLS Saving Rates

If the certificate is held for 6 months but less than 1 year

If the certificate is held for 1 year but less than 2 year

If the certificate is held for 2 year but less than 3 year

PLS IDR Profit Rates Declared for the particular period, would be paid

1

40

If the certificate is held for 3 year but less than 4 year

If the certificate is held for 4 year but less than 5 year

ALLIED SUPER PREMIUM

Rates of Profit

Allied super premium term certificates carry the profit at the estimated rate of 151/2

per annum on quarterly payment

16% per annum on half yearly payment

16 ½% per annum on half yearly payment

Net payment on an investment of Rs. 100,000/- is being illustrated here under similar

pattern will be followed in case of other sums of investments.

Principal amount Rs. 100,000/- Estimated Profit

Quarterly payment @15 ½% PA 3,875/-

Half yearly payment @16% PA 8,000/-

Yearly payment @16 ½ PA 16,500/-

ALLIED HIGH PREMIUM ACCOUNTS

In order to serve the customers with higher returns on their investments as well

as to encourage the savings on national level. Allied bank has brought forth a special

scheme named Allied High Premium Account.

Salient Feature

It is PLS saving account

41

It can be opened and operated by anyone with a minimum deposit of Rs. 0.250

million (average monthly balance).

There is no upper limit of investment and investors can invest as much as they

like.

There is no limit on numbers and amount of withdrawals.

ESTIMATED RATE OF PROFIT

Current P/s savings rate provided the required average monthly balance does

not fall below the minimum deposit level i.e. Rs. 0.250 million for the particular

month.

Mode of Payment

Profit will be paid Half yearly.

All the saving and profit based scheme are liable to Zakat and with holding tax

as per rules. However, exemptions on Zakat are available in accordance with the law.

Profit payment schedule of Allied Young Saver Certificates

On completion of Expected maturity value

(In case of Rs. 100/denominations).

01 Years Rs. 1103.20

02 Years Rs. 1226.76

03 Years Rs. 1375.76

04 Years Rs. 1555.35

05 Years Rs. 1773.10

06 Years Rs. 2039.10

07 Years Rs. 2371.47

08 Years Rs. 2786.48

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09 Years Rs. 3315.91

10 Years Rs. 4028.20

Note: The above pattern of profit calculation will be applicable in case of certificate of

higher denominations. 15

GENERAL UTILITY SERVICIES

ABL also performs a number of other general utility services to his client,

which are as follows:

Foreign Exchange Business

ABL transacts foreign exchange business by discounting foreign bills of

exchange and thus provides facilities for financing the foreign trade.

Acts as a referee

ABL provides a useful service to his customer by acting as a referee for his credit

worthiness. The information is supplied in almost secrecy and is based impartially on

the respectability and financial standing of the client.

Accepting of bills of exchange

ABL also undertakes acceptance business in connection with bills of exchange

and thus enables its customers to obtain the desired credit.

Issue of Travelers cheque

ABL also issues travelers cheque for the convenience of the travelers and

charges 1% of the amount of traveler’s cheque sold.

Locker

1

43

ABL also provides locker facility to its clients where valuable of people can be

kept following are the charges of bank:

Small Rs. 300/- per annum

Medium Rs. 500/- per annum

Large Rs. 800/- per annum

Extra Large Rs. 1500/- per annum

Collection of utility bills

Electricity telephone and other such bills can also be deposited.

44

CHAPTER 4

CRITICAL ANALYSIS

In the present era of competition, it is not so simple to attain the reputation of a

very good bank even more harder is to maintain and improve the position attain in the

competitive world of banking today.

In my story stay at ABL, Defense colony branch, I spent almost one week in

each department and this short span is not sufficient for having all the information

about the organization. Therefore, I have pointed out some of the drawbacks in this

organization.

Recruitment

In ABL, defense colony branch, recruitment is not on the basis of merit but on

recommendation. There is an element of favoritism in recruitment.

Selection

Unsuitable candidates are selected who prove to be a great source of problem

for ABL in the future. It cost negative effect on the goodwill of ABL.

Transfer

Some employees are not transferred and they are continually serving at the

same post. They are simply rotated at the same branch. Some of the favorites remain in

the same seat.

Job Analysis and Wages

As we have learned from out personnel administrator course, that job analysis

is very important for any organization. In job analysis we describe the job and specify

the person for equitable wage system.

45

In ABL Peshawar, there is no concept of job analysis that is why wages are not

according to the work performed by the workers e.g. two workers of the same cadre

and with the same salary are performing different kind of jobs, one with less

responsibility and the other performing a complex one. This creates dissatisfaction

among the workers.

Promotion is not done according to rules.

As promotion is concerned it is not according to the rules and regulations.

Transfer

Transfer means when a person is shifted from one place to another it of the

favorite remains in the same seat.

Lack of Special Training

ABL does not provide the facility of specialized training to its staff. Training is

provided on the basis of centralization.

Undue Promotions

As far as promotion is concerned it is not done according to the rules and

regulations. Employee having good term and conditions are more likely to be

promoted than the rest. Many of the employees do not get timely promotions. As a

result the employees have disliking for some of their senior.

Retirement

Fixed retirement policy is not adequate. This policy reduces the morale of

employee and their interest in work. Fixed retirement age kills the spirit of work in

employees.

Centralized Decision Making

46

In ABL we find centralized decision making process. The president takes all

the decision and senior executive committee lower level staffs can not participant in

decision making process.

Decisions are not properly supported

The decision of a manager are not properly supported and backed by the higher

level management.

Change in country

Fiscal and economic changes, which take place in a country also, effect the

recovery of loan.

Political Pressure

The important thing is political pressure on bank. Who ever come in power

tried to pressurize bank they try to write off their loans.

Recovery of loans

One of the problems faced by ABL in the recovery of loan, because sponsors

do not show their actual papers which is the requirement of the bank.

Sponsors do not show actual cost

At the same time sponsors do not show the actual cost of machinery so then

they show them selves bankrupt.

Written policies are not properly followed

All written policies and procedures for appointing employees are not properly

followed.

Expenses

ABL has too much administrative expenses employs a higher level have much

more facilities than lower level.

47

Improper Appointment

Although we find written policies and procedures for appointing employees to

the bank but these policies are not properly followed at ABL. The upper management

sometimes recruit and appoint people purely on recommendation not on merit when

proper appointments are not made people are discourage and it adds to many social

and economic problems.

Promotion is not done according to rules

As promotion is concerned it is not done according to the rules and regulations.

Transfer means when a person is shifted from one place to another it of the favorites

remains in the same seat.

Performance Appraisal

The system of performance appraisal as we learn in our course is some how

different because ABL workers are appraised by the management and not by the

immediate supervisor. The element of subjectivity is very high as further promotion is

very much dependent on this appraisal report, so a manager can run or build the career

of any worker by giving his/her own subjectivity judgement.

Insufficient Staff

There is lack of staff in the branches as a result of which one person has to

conduct working in different seats. Heavy work and shortage of staff are two main

elements, which do not allow staff to their time.

Disciplinary Action

Allied Bank Limited has its own disciplinary actions. It is clearly written off

and understood but that are not followed strictly by bank staff.

Lack of proper information

48

For public dealing, clients come to get some information but they refer them to

zonal office. This creates a lot of tension and dissatisfaction in the mind customer.

Excessive paper work

There is excessive paper work in the bank because of unavailability of

computer.

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CHAPTER 5

RECOMMENDATIONS

It is human nature that one tried to find out the loopholes and drawback is the

existing structure and to criticize as well. It is quite easy to recommend solutions along

with criticism. Here the recommendations are as follows.

Recruitment Policy on Merit

Recruitment should be strictly based on merit. Favoritism and nepotism should

be strictly controlled. Transparent recruitment procedure should be adopted.

Employment should be strictly based on merit instead of reserved quota system.

Transfer

Transfer policy should be implemented well because in transfer many favorite

people are not transferred, they are working one seat for several years and they are not

transferred. Transfer is not properly made.

WAGE STRUCTURE

Wage policy should be implemented well. Dissatisfaction among the workers

can be removed by implementation of fair and equitable wage policy.

Specialized Training

As the worker finishes his/her training, he/she is introduced in a specific field.

Since he/she does to have knowledge about the specific job assigned to him, thus

he/she faces difficulties in performing the job.

It is recommended that both generalized and specialized training should be

provided to fresh as well as old workers to maintain the high standard of service.

Promotion Policy

50

The bank promotion policy should be based on experiences hard work ability

of workers.

Retirement

A flexible retirement policy should be introduced. So that experienced

employee who is capable and is wishing to continue service is allowed to continue the

service that enhances the moral of employee and bank will get high benefits from these

experienced employees.

Motivation

Such motivation techniques should be adopted which fulfill the belongings,

love and self-esteem needs of the employees. Only cash awards do not fulfill the

motivation requirement. Giving employees different assignment should create

environment of competition. This can be proved to be a great source of motivation.

Discipline Policy

The Branch manager should be delegated more power to tackle with the

problem of discipline in bank. She should be empowered to take immediate and

effective action in case of administrative problem without any fear and favor.

Management by Objectives (MBO)

MBO or management by objectives needs to be introduced in the bank

immediately. It will help to improve the functioning of the bank and will lead to

greater participation. Management by objective is in fact program of basing much of

managerial planning operation and appraisal of having each manager set objectives in

verifiable terms I will the superiors approval and assessing his or her performance

against the achievement of these objectives MBO will also lead to great participation at

all levels.

Decentralization

51

It is one of the problems in Allied Bank limited most of the function is

centralized which is adversely effecting the performance of the bank. There is a need

of decentralizing some of the functions, and decision making which can improve and

unnecessary delay can easily be avoided.

Flexibility Principle

The authority of ABL should introduce flexibility principle in the bank in

smooth functioning of the bank. Here the flexibility principle implies that the more that

flexibility the ability to change direction without under cost embarrassment or friction

can be built into plans, the less the danger of losses incurred by unexpected events.

Forecasting

Forecasting needs to be introduced at Allied Bank Limited before making any

decision in planning its activities, its should properly forecast to see that the decision

which they are likely to take has any good or bad implications for the bank and for the

economy as a whole. It will help in better planning.

Avoiding Mistakes by Planning

As with the other functions of management establishment of objectives and

orderly planning are necessary of good organization. Planning helps determine future

personnel needs and attending attendant training programs without knowing what

managerial personnel will be needed and what experience to demand an enterprise can

not intelligently recruit people and train then. Further more organization planning can

disclose weaknesses in the organization and other aspects keeping in view. The

importance of planning, it can not be ignored.

Availability of Information

To avoid the problem of inviolability of information, bank should provide

brochures etc and there should be a specific person who should available to clients to

provide information to them.

52

Required Staff.

Required staff should be provided to branch in order to improve the functioning

of the branch. Especially a telephone operator and a customers services officer should

be immediately appointed.

Stable Fiscal and Economic Policies

There are changes in the fiscal and economics policies with the change in

government needs to eliminate fiscal and economic policies should be stable and not to

be changed frequently.

Such laws should be made that even if there are changes in the government from time

to time, there should be no changes in the prevailing fiscal economic and monetary

policies.

Administrative Expenses needs to be reduced

At ABL, there are too many expenses incurred on administration and other

things. Their unnecessary expenses need to be reduced to have more funds for other

things.

Computerized Network

There is excessive paper work in the branch. But if computerized network is

introduced in the bank, it will reduce the excessive paper work, which in turn will

reduce their burden.

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