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Table of ContentsExecutive Summary 03
Preface
05
Acknowledgement 07
Dedication 09
Overview 11
History 13
Achievements 15
Vision and Mission Statements 18
Slogan 19
Board of Directors 20
Corporate Information 21
Executive Committee 22
Branch Network 23
Features 25
Department Hierarchy 27
Branch Level History 28
Products 29
Operation Department 42
Account Opening Department 43
Type of Accounts 46
Cheque book Issuance 50
Cash Department 53
Clearing Department 55
Accounts Department 58
Remittance Department 61
Credit Department 68
Credit Cycle 75
Financial Analysis 81
Balance Sheet 83
Income Statement 85
Ratio Analysis 86
Financial Summary 94
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SWOT Analysis 95
Recommendation 101
Observation And Conclusion 103
Annexture 104
EXECUTIVE SUMMARY
This report is about my internship program with Bank Alfalah Ltd. In this comprehensive report, I
have discussed about every major aspect of the bank, which I observed and perceived during my internship
program. In this report you will find the detail about the bank right from its incorporation to the current
position. Along with it, the processes, policies and procedures of the bank are also discussed in detail.
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During my internship program, I mainly worked with four departments:
Credits,Agriculture,Car financing and foreign trade. These departments have been
discussed in detail and all the policies and procedures have been described thoroughly.
As the main purpose of internship is to learn by working in practical environment
and to apply the knowledge acquired during the studies in a real world scenario in order
to tackle the problems using the knowledge and skill learned during the academic process,
In this report the detailed analysis of the organization has been done and all the financial,
technical, managerial and strategic aspects have been evaluated to analyze the current
position of the organization. Along with it, the background analysis, the prevailing
competition analysis, the business process analysis, and the internal environment and
external environment of the organization have been discussed and the recommendations
for the improvement have been made wherever required.
In the end the learning and experiences section consists of all the policies,
processes, practices and procedures which I have undergone through and learned during
my internship program. This report also contains my perceptions about the employees
satisfaction, motivation level and the working environment of the organization.
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Preface
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The internship is an essential part of M.Com degree program because through this training
students come to know the real difference between theory and practice and they are
also introduced to the outside business world. An important requirement of this
training program is to compile a report about the activities of that organization in
which the student has done the internship.
I have done internship in Bank Alfalah Limited, Ghalla Mandi Branch Haroonabad. The
internship provided me great opportunity to equip myself with knowledge, techniques,
application and tools used in an organization.
The report covers various features of knowledge. It starts with the brief history of Bank,
covers current status, performance, products and services. Another major portion of this
report explains the management of Bank Alfalah.
Division of departments and their activities highlights the working of Bank Alfalah and my
learning experience elaborates how much this internship was useful for me. Financial
analysis represents the true picture of the performance of Bank. Concluding the report there
are certain recommendations and suggestions for the bank in order to have improvements.
The source of information for the preparation of report includes the written notes extracts
from banking literature, verbal discussion with bank officials and Annual report of the
bank.
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I hope this report will help in understanding various aspects and features of Bank Alfalah
Ltd. and will be equally important for commerce students and persons making future
banking.
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Acknowledgement
All praises are for Allah almighty that has bestowed upon human being the crown of
creation and has endowed him with knowledge and wisdom. After Allah, is the last prophet
Mohammed (SAW) who brought for us revelation and unlimited knowledge and civilized
the barbarian human being.
Although this report base only my name but numerous people were very important to the
development of this report without the support of them I could never successfully
completed the internship as well as the report.
I am highly thanking full to the staff member of Bank Alfalah Limited. Who really
cooperated with me and provide me their complete guidance.In Branch, I Observe the
friendly environment between the employees and they also give me the friendly
environment to learn about the bank as well as branch. As banks are very much sensitive
about their secrecy, even then after taking an understanding, they let me handle their
delicate operations.
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OVERVIEWOVERVIEW
Following privatization, Bank Alfalah emerged as new identity of Habib Credit
and Exchange Bank with a revived purpose and commitment. Charged with the strength of
Abu Dhabi consortium and under the leadership of his Highness Sheikh Nahayan
Mubarak Al - Nahayan, the bank has already made significant conditions in building and
strengthening both corporate retail banking sector in Pakistan.
Designing the product portfolio of bank response to the customers preferences, the product
like Royal Profit, Royal Patriot and Royal Custodial are prime examples of quality and
innovation providing timely banking opportunities to customers of bank.
Assessment of the needs and wants of the customers is an on going process at Bank
Alfalah, which helps to continually develop new products and services. To continuously
offer courteous, professional and advanced banking solutions, the team of bank has
recently been rejuvenated by going though training programs with a focus on information
technology.
To make their banking solutions become accessible to more and more people, they have
embarked upon a rapid expansion program, aiming to provide a networking that makes the
services available to any of their customers in all the major urban centers of Pakistan - with
a view to go international in the future.
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With their key indicators of progress already soaring to new heights, the bank is committed
to dedicate all its energies, resources and time to bring higher value and satisfaction to their
customers, employees and shareholders.
The graph of bank is going up and up every year. The ratio of profit is increasing at good
percentage. Thy bank is serving the people at high level of standard by going according to
the whishes of the customers.
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HISTORYHISTORY
Bank of Credit & Commerce International (BCCI) was a Pakistan based bank,
established by Mr.Agha Hassan Abdi from UBL, in association with U.A.E and Europe.
BCCI has its branches in 74 different countries of the world. It had its 3 branches in
Pakistan. In 1991, the BCCI was banned, when it was accused by European countries that
the bank was involved in some illegal operations with Gulf countries. The major reason
behind European accusation was that BCCI was of Islamic mode. Therefore, the bank was
closed due to international pressure. Then, its 3 Pakistani branches were taken over by the
Government of Pakistan, which were named as Habib Credit and Exchange Bank (HCEB)
and these were working as subsidiary of Habib Bank Limited.
Following the privatization in July 1997, Habib credit and Exchange Banned assumed the
new identity of Bank Alfalah on February 25, 1998. It is now Abu Dhabi based bank as the
family of Sheikh Nahayan Mubarik Al Nahayan purchased 70% of its shares and 30%
shares remained with Habib Bank on behalf of Government of Pakistan.
The development of various sectors in Pakistan. The bank has already made significant
contribution in building and strengthening both corporate and retail banks sector in
Pakistan. Assessment of the needs and wants of customer is an on going process at Bank
Alfalah, which help to certennially develop new products of services. Designing the
product portfolio in response to royal patriot, royal custodial, Alfalah car finance, Alfalah
rupee traveler cheques, home loans are prime example of quality innovation providing
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timely banking opportunities to customer. To continuously offer courteous, professional
and advanced banking solution the team of bank has recently been rejuvenated by going
through training programs with focus to information technology.
With their key indicators of progress a steady soaring to new heights, the bank is
committed to dedicate all its energies, resources and time to bring higher value and
satisfaction to their customers and employers.
The graph of the bank is going up and up every year. The ratio of profit is increasing at a
good percentage. The bank is serving the people at high level of standard by according to
expectation of customers.
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ACHIEVEMENTS
The Bank is fully aware that the branch network has direct implications on the
services that are it provides to its customers. In the year 2007, the Bank Alfalah network
extending our coverage to Two Hundred and Fifteen(215). We are confident that a well
integrated branch network, offers greater potential for serving a larger client base through
high value products.
Bank Alfalah continually endeavors to develop a wider spectrum of innovative
financial products based on consumer needs. TheAlfalah Visa Cardhas been recognized
by the Visa International as the first credit card in South Asia to have crossed the100,000th
mark in the shortest timeframe.
Alfalah Car Finance is another market leader offering superior value and convenience to
its clients. .
Consumer durable financing was launched in August 2003. This product too has also met a considerable
success in the market. Similarly, the overwhelming response received to the Home Financing scheme
launched by the Bank during the last quarter of 2003 offers great potential of becoming yet another important
product of the Bank. In the latter half of 2003, Phone Bankingwas launched with a view to
establish a more direct contact with our clients. This support centre has greatly facilitated
the overall sales efforts of the Bank.
Alfalah has emerged as one of the leading commercial banks in the financial sector
of Pakistan. Charged with strength of Abu Dhabi consortium and under the leadership of
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his highness Sheikh Nahayan Mubarak, minister of higher education and scientific research
and prominent member of Royal family. The bank is energized with vision, envisaging.
CREDIT PORTFOLIO
A depressive interest rate environment has spurred the competition for scarce
banking assets in local financial industry. While Bank Alfalah remains a key player in the
market, however, it treads with caution so that the quality of its credit portfolio is not
compromised. The Bank has employed a proactive approach in the form of a well-designed
and transparent credit approval process. This process benefits from an inherent system of
checks and balances at each level.
CREDITRATING
Despite the political and economic uncertainties, Bank Alfalah was able to maintain
its impressive credit ratings of AA- and A1+ in the long and short term respectively. These
ratings are indicative of a very high credit quality and low potential for credit risk. These
ratings have been assigned by the PACRA, the leading credit rating agency of Pakistan.
These ratings have been awarded on the basis of a steady improvement in organizational
performance, augmentation in equity base and increased sponsor backing.
HUMAN RESOURCE DEVELOPMENT
Development of professional skills and knowledge of the employees is essential for the
efficient functioning of any organization. At Bank Alfalah appropriately designed policies
and practices have been instituted to achieve this strategic objective.
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Our state-of-the-art training centre at Karachi remains indispensable in imparting
valuable training to all our team members. This has become especially important
considering the pace of change that the banking industry is exposed to. Consequently
training ensures that change is successfully navigated to discover potentially beneficial
opportunities that can be transformed into direct gains for the Bank and its customers. This
also positively impacts the confidence levels of our employees translating into better job
performance and satisfaction. Now Bank also Offer Training Facilities in Lahore Pakistan.
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Vision Statement
To be the premier organizations operating locally and internationally that provides the complete range of
financial services to all segments under one roof
Mission Statement
To develop and deliver the most innovative products, manage customer experience,
deliver quality service that contributes to brand strength, establishes a competitive
advantage and enhances profitability, thus providing value to the stakeholders of the
bank.
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Slogan
Taking Service Excellence To New Heights
Helping you realize your dreams
The Caring Bank
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CORPORATE INFORMATION
Company Secretary
Mr. Hamid Ashraf
Chief Financial Officer
Mr. Zahid Ali H. Jamal
Auditors
Taseer Hadi Khalid & Co.
Chartered Accountants
Head Office
B. A Building
I. I. Chundrigarh Road
P.O. Box 6773
Karachi
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Executive Committee
Mr. Mohammad Saleem Akhtar
(Chief Executive Officer)
Mr. Ikram Ul-Majeed Sehgal
Mr. Parvez A. Shahid
Mr. Mohammad Yousuf
Mr. Tanweer A. Khan
Mr. Sirajuddin Aziz
Mr. Mahmood Ashraf
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Branches Network
The network of bank alfalah consist of 215 branches all the country-wide.
Details: -
CITIES No. of Branches
Karachi 18
Lahore 13
Peshawar 2
Rawalpindi 2
Faisalabad 2
Multan
Bahawalnagar 5
Bhawalpur 1
Dera Ghazi Khan 1
Gujranwala 1
Gujrat
haroonabad 1
Hyderabad 1
Islamabad 1
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Jehlum 1
Mardan 1
Mianchannu 1
Mengora (Sawat) 1
Queeta 1
Rahim Yar Khan 1
Sahiwal 1
Sargodha 1
Sheikhupura 1
Sialkot 1
Sakhar 1
Wah Cantt. 1
D.I.Khan 1
Gawader 1
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FEATURES
Bank Alfalah Limited is an established bank. It has some special features with the help of
those it is growing rapidly.
OUTSTANDING WORK ENVIRONMENT
As the work environment plays a great role in this competition age, so the bank has
good work environment. All the people work with cooperation; managers are so kind that
each problem can be discussed with them.
EFFICIENCY
Employees at Bank Alfalah are quite efficient. They work more than their working hours
and it is all according to their will. It also shows their loyalty, commitment to
organization.
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CUSTOMER SERVICES
All the customers are entertained individually. Same kind of behavior and attention is given
to all the customers.
SUGGESTIONS ASKED FROM CUSTOMERS
Getting ideas for improvement from customer side is a new idea and that is working very
well in Bank Alfalah Ltd. All the customers are asked to fill a suggestion form and the
standards of the bank are improved through them.
EMPLOYEE BENEFITS
Employees are given the benefits like bonus, gratuity funds, loans, increments, house rent,
medical and conveyance allowances.
COMPUTERIZED WORKING ENVIRONMENT
In bank, all the work is done remotely. All the entries are made using the systems which are
internally and externally integrated. This increases efficiency of the bank.
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DEPARTMENT HIERARCHY
Bank Alfalah Limited
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Branch Level Hierarchy
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Bank AlfalahLimited
OperationDepartment
Credit MarketingDepartment
CAD TSD Consumer financing
Department
Account Opening
Section
Online
TransactionSection
Clearing Section IT & RemittancesSection
Car Financing
Home Financing
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Branch ManagerMr. Muhammad Ijaz
OperationsManager
Mr. Anees-ur-Rehman Akhtar
Manager ConsumerFinance
(Mr.Faisal Rana)
Manager ConsumerFinance
(Mr.Faisal Rana)
Incharge Credits(Mr.Sanaullah)
Trade&ServiceManager
(Mr.Amir)
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PRODUCTS OF BANK ALFALAH LIMITED
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Foreign currency accounts- new scheme (saving)
Projected Profit rates (per annum)
Currency Profits
(Semi-annually)
US Dollar 1.00%
UK Pound 2.00%
Euro 1.25%
ROYAL PROFIT (PROFIT BEARING CURRENT ACCOUNT)
Projected profit rates (per annum)
Amount Profit (Yearly)
From Rs. 50,000 to 999,999 2.50%
From Rs. 1000,000 to 9,999,999 3.5%
From Rs. 10,000,000 to 25,000,000 4.00%
From Rs. 25,000,000 to 50,000,000 4.75%
From Rs. 50,000,000 to and above Contact Treasury
CLASSIC PLS DEPOSITS
Projected profit rates (per annum)
Type of deposits Profit
Saving account 2.00%
TERM DEPOSITS
1 Month 3.50%
3 Month 4.00%
6 Month 4.25%
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1 Years 4.75%
2 Years 6.00%
3 Years 6.50%
ATM
Bank Alfalah through its commitment to provide superior and improved services to its
valued customers, has unveiled a nationwide network ofATMs. For customer
convenience, customers now have access to instantaneous cash availability, 24 hours a day,
7 days a week. ATMnetwork is geared up to exploit the latest technology, and is equipped
to meet the highest standards of security and efficiency.
With new ATM card you can now:
Withdraw Cash
Use our convenient, user-friendly fast cash option
Make a Balance Inquiry.
Get an instant printout of your account balances
Get a printout of your last transactions (Mini-statement) on the spot.
Change your PIN (Personal Identification Number).
Bank Alfalah is pleased to introduce 27 state of the art ATMs, deployed at the most
convenient and accessible locations. Bank Alfalah is a founder member of the 1-Link
Switch, thus making a countrywide network of ATMs available.
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ONLINE BANKING
Bank Alfalah now offers the facility of on-line banking to its customers through its
countrywide network of branches. Customers can use the ATMs or the banking counters of
any branch for day-to-day banking needs, irrespective of branch where they maintain their
accounts. For Corporate customers centralized Cash Management facility is also offered
through on-line banking.
PHONE BANKING
"Alfalah Phone Banking is available to all customers on a countrywide basis. Customers
can dial 111-225-111 (without any city code/prefix) from their respective cities i.e. 21
cities where Bank Alfalah is present, and get prompt services from the Centralized Phone
Banking Services. Customers enjoy 24x7 Round the Clock Phone Banking Services.
Bank Alfalah is the first bank in Pakistan to offer Centralized UAN connectivity from 21
cities to its Call Centre with Hunting & ACD facilities.
MONEYGRAM
Bank Alfalah limited, in collaboration with MoneyGram, offers remittance service to
Pakistan. MoneyGram is person to person money transfer service that allows consumers to
receive money in just a few minutes. MoneyGram is available in over 154 countries and in
more than 40,000 locations worldwide. With MoneyGram your money is transferred
immediately and usually arrives at the receiving end within 10 minutes, other services can
take days or weeks. There are no complicated procedures and you do not need a bank
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account or a credit card. Whats more, the receiver is handed the cash immediately.
SECURE AND RELIABLE
An extensive network of quality agents, linked by computer, will transfer your money
safely and ensure that it is handled with care and without delay. Thousands of people
already use the MoneyGram service all over the world. It is trusted for its reliability and
security.
CONVENIENT AND FAST
MoneyGram is available in over 154 countries and in more than 40,000 locations
worldwide. With MoneyGram your money is transferred immediately and usually arrives at
the receiving end within 10 minutes while other services can take days or weeks. There are
no complicated procedures and you do not need a bank account or a credit card.
RUPEE TRAVELLERS CHEQUES
CONVENIENT DENOMINATIONS
Bank Alfalah presents Rs.1,000, 5,000 and 10,000 denominations of traveler cheques,
making it very convenient to carry money while traveling or keeping your emergency cash
safe.
YOURE GREAT COMPANION WHILE TRAVELING
Bank Alfalah travelers cheques are your best travel companion as
they provide the most benefits that no other travelers cheques offer. Alfalah TCs have
matched security features Plus, you don't have to be an account holder to avail these
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benefits! Free from the risk and hassle of carrying cash during travel, Bank Alfalah
TCs ensure safe and smooth travel.
THE MAXIMUM SECURITY FEATURES
Lithographic security features, invisible UV printing, high definition micro-lines, anti-
scanner effect, mould based paper, Alfalah watermark and printing in the UK, are just
some of the security features of our TCs which prevent counterfeiting. Just in case you
are still not convinced, we refund your money in case of loss or theft of your TCs.
FEATURES
Convenient denominations available
Rs. 1,000
Rs. 5,000
Rs. 10,000
Maximum security features
Special embossed intaglio printing in the UK, Alfalah security thread and Alfalah
watermark. Just some of the advanced features that make your TCs secure.
Fully refundable
you can refund your TCs without any penalty or loss.
Transferable and endorsable
you can transfer and endorse your TCs over to anyone.
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Unlimited validity
Bank Alfalah TCs will always remain encashable.
No account needed
You dont have to be an account holder to get our TCs benefits.
Network of Branches
Bank Alfalah branches all across Pakistan.
CREDIT CARDS
Bank Alfalah Limited offering credit cards with minimum markup and in wide variety in
the market. Markup rate that is charge is 2.50% after the 51 days of transaction. Bank
Alfalah also does not charge any annual fee and no charges when you avail credit card
facility.
Bank Alfalah offering various varieties of cards:
Gold Card 150,000 --- 499,000
Silver Card 25,000---150,000
Women Exclusive 16,000---499,000
Classic Blue (professionals) -----------(only for panel companies members)
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FEATURES
Balance transfer facility-Smart settlements
Offering an easy and convenient way to settle or unsettled credit card payments on all
existing credit cards in Pakistan. Avail this facility at as low as 1.5%.
Cash advance facility 75% of your credit limit
Now you can avail cash advance facility up to 75% of your available credit limit. Enjoy the benefits of this
exclusive offer on your Bank Alfalah credit card. Step by step monthly installment plan 1.25% p.m. only
Now you can convert any transaction, amount of Rs. 3000 and above to a step-by-step
monthly installment payment plan. It gives you the flexibility to convert your large
payments into small equal monthly installments.
Free supplementary cards
Offering the facility to acquire free supplementary cards for your family members. Avail
this card without any extra cost.
Fortunes
Offering an amazing rewards program that let you earn points every time you use Alfalah
Visa card. Redeem the earned points anytime for fabulous gifts of your choice.
Discounts
Offering discounts at wide range of outlets, selected especially to much your taste. You
can avail matchless discounts each time you charge your card at these outlets.
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Insurance Cover
Offering card members a range of features design to protect you and your family from the
set backs of life, at very affordable rates.
Petrol facility
Offering you the facility that saves you extra that you pay when you are use Alfalah
Credit Card at all patrol pumps in Pakistan.
UNIQUE BENEFITS
Bank Alfalah Auto Debit Service
This facility is specially designed for Bank Alfalah account holders. It gives the option of
making minimum or full payments through Bank Alfalah Savings / Current Pak Rupee
account specified on Alfalah VISA monthly statement.
Bank Alfalah Credit Cover
Alfalah VISA offers card members a new and powerful protection against the uncertainties of life. In the
unfortunate even of prolonged illness, disability or death, its reassuring to know that with Alfalah Credit
Cover you have no cause to worry about your monthly credit card repayments. Alfalah Credit Cover has a
range of features designed to protect you and your family from the setbacks of life, at rates that are
affordable.
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DOCUMENTS REQUIRED
Eligibility Criteria
Total gross salary / income of Rs. 8,000/- or more per month.
Aged between 25 to 60 years (60 years at maturity of facility).
Should be Pakistani National
For Salaried Applicants
Copy of National Identity Card.
Current Salary Slip/Salary Letter / Proof of BPS (for Govt. Employees)/ Proof of
Rank for Armed Forces Personnel) .
Computerized Personal Bank Statement (on bank letterhead in original) for last
six months.
For Self Employed Applicants
Copy of National Identity Card.
Computerized Personal Bank Statement (on bank letterhead in original) for last
six months.
Additional Requirements
Partnership deed & personal account statements of partners (if any) for last six
months.
Bank letters / certificate confirming Proprietorship (in case of Proprietorship).
Memorandum / Articles of Association / Form A (in case of private limited
company).
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Recognized professional degree / membership certificate to professional
associations (in case of professionals).
ALFALAH CAR
Its a scheme that enables one to own his desired car at easily affordable and flexible
installments with a minimum down payment and insurance.
BENEFITS AND FEATURES
Quickest processing
No hidden charges
Minimum down payment
Complete repayment at any point of time
Balance transfer facility {BTF} for existing as well as new clients from other
Banks
Tenor period ranging from 1 to 5 years.
Financing of all brand new locally assembled vehicle, also second hand.
Financing limit ranging b/w Rs. 200,000/- to Rs. 2000,000/-
CORPORATE & INDIVIDUAL CAR LEASING
BALs recently introduced car leasing facility for individuals and corporate sector has set
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new dimensions for the product. Now you are provided with the option of either to get
the vehicle leased or financed.
INSURANCE
Renowned and reliable Insurance companies are offering the competitive rates of
Insurance. Pay year insurance premium in advance (at the time of down payment) and
remaining in the subsequent equal monthly installment.
HOW MUCH EXTRA MONEY BEING PAID? {MARK-UP}
Offering lowest rate of markup of 12, 12.5%, {per annum}, BAL has captivated a major
market share and so is the plan for future.
REPAYMENTS
Easily affordable installments on monthly basis in the form of postdated cheques will set
you free of depositing your rental cheques every month.
Hypothecation of vehicle in the name of the Bank Alfalah Limited.
YOU CAN ACT AS A CO BORROWER
Acting as a co borrower, will enables your family members {spouse, children- 18 year
and above} to avail the financing facility and can get the car registered in their names as
well.
ELIGIBILITY CRITERIA
Yes you get a car loan form bank Alfalah to purchase a brand new car if you are:
Pakistani National Identity Card holder.
Over 20 years of age (Maximum 60 years in case of salaried and 62 in case of a
business person at the time of maturity of the loan).
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Salaried, Businessman or self employed.
Required documents for car finance facility
1. Application form
2. Copy of national Identity card
3. Copy of Driving License (optional)
4. N.T.N. Certificate
5. Copy of current utilities bill of residence
6. Bank account statement for last six months from the date of application
7. Signature verification fro duly verified by t he banker
8. An Assets & liabilities statement (where banks financing exceeds Rs. 5 Lac.)
9. CIB report required (where banks financing exceeds Rs. 5 Lac.)
10. Basic Borrower Fact Sheet
Additional requirements forbusiness class individuals
a. Copy of rental/ purchase agreement of business premises.
b. Sole proprietorship letter on relevant business letterhead.
c. Partnership deed (if applicable).
d. NOC from other partners (if applicable)
Additional requirement forself employed professionals
a. Copy of rental/ purchase agreement of business premises
b. Copy of membership of respective institution/ association
c. Must be practicing from last 3 years.
Additional requirements forlandlord
a. Fard malkiat/ title deed of land
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b. Undertaking fro competent landlord
OPERATION DEPARTMENTOPERATION DEPARTMENT
Operations department of the Bank Alfalah Limited is responsible for the overall
operations of the bank.
Operation Department has following segments.
a) Cash
b) Clearing
c) Remittance
d) Account opening
e) Accounts department
The detail of those departments that are controlled under operation department is as
under.
a) Account opening
b) Cash department
c) Clearing
d) Remittances
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ACCOUNT OPENING DEPARTMENT
It is most important department of bank. Mr.Ahmed Kamal Pasha deal in this department.
Following procedure is adopted for this purpose.
PROCEDURE OF ACCOUNT OPENING
It is very simple and quick procedure. A person who wants to open an account must have
the introduction of banks staff or any already existing account holder of bank. The
customer is required to fill an account opening form. Then signatures of the introducer
are verified from S.S. Card before opening account. AOF is very standard and up to the
mark which contains almost whole information about customers. Customer is guide to fill
all columns of AOF. All formalities and requirements are completed and verified, and all
supportive documents are taken and checked according to the nature of account. If any
formality is incomplete, chequebook is not issued until it is fulfilled.
If a person cannot sign write his / her hand thumb impression is affixed marked, which is
attested by one male or two female witnesses. Thumb impression for female right hand
and for male left hand.
They also have to give identity letter
NIC copies
Passport size photograph
One place on the form other is on SS Card they have non-bearer cheques. On their
cheque book a stamp is affixed on it there is written. Thumb impression should be fixed
in front of an officer of the bank. The bank does not make payment of a cheque bearing a
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six months or older date. If any account is not operated in six months. It is called dormant
account.
Following Factors Prior To Opening of Account Should Be Consider
1. The suitability of the perspective customers
2. Verification of customer credentials.
3. The perspective possibility of profitability of the relationship.
4. The proposed relationship does not violate:
Current Account
1. No limitation on frequency or amount of transaction.
2. No profit payable.
Saving Account
Profit is payable
1. No of withdraw restricted
2. Large amount of withdraws requires 7 days.
GENERAL PRINCIPLES
1. No account will be opened on fictitious name.
2. All documents necessary required for opening account must be taken after
verification from original
3. No operation of account should be allowed & chequebook must not be issued
until all formalities are confirmed.
4. Genuineness of introduction should be properly ensured
5. All information of AOF should be filled at front of concerned officer.
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TYPES OF ACCOUNTS
The bank different types of accounts exist.
1) INDIVIDUAL ACCOUNT
Any individual or proprietor of business can open an individual account at BAL.
PLS (profit and loss sharing) saving accounts can be opened with the minimum balance
Rs. 5000/- with expected profit rate is 9%. Following requirements has to be fulfilled for
this account.
Signature of customer on back of AOF.
Mention next of kin (nominee)
Name and A/C # of introducer.
Verified sign of introducer.
Customer signature admitted by officer.
N.I.C photocopy attached.
Letter of thanks.
2) JOINT ACCOUNT
When different people want to or need to share a single account it is called joint account.
The names of persons are written on the title of A/C and on S.S. card.
Joint A/C cannot be opened by single person. Both persons have to sign on cheques.
When two or more person neither partner nor trustee open account in their name is joint
account.
Requirements
Sign of both customers on back of AOF
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Sign on joint A/C # mandate
Name and A/C # of introducer
NIC copies of both members.
Mode of operation.
3) BUSINESS ACCOUNTS
When the owner of the firm is operating singly, open an in his term name.
I) Sole Of Proprietor Account
This account is for that person who has his own business of the business he is one owner
of the firm.
Requirements:
Companies stamp
Declaration of proportion companies letterhead.
Sign on AOF.
NIC copy
Verified signature of introducer.
Sole proprietorship declaration
II) Partnership Account
Account title will be the name of the partnership firm.
Requirements
Sign of customers on back of AOF.
NIC copies of partners
Partnership deed (certified copy) duly attested by notary republic.
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Partnership mandate (prescribed format)
Companies rubber stamp
The A/C is opened in the firm name and all partners designate one or two persons to act
behalf of the partnership firm all acts of the firm jointly and severely.
III) Limited Company
Limited Co:
1) Private Limited
2) Public Limited
PRIVATE LIMITED
Requirements
Restrain on companies letterhead dully attested by chairman.
Sing of all directors on back of AOF.
NIC copies of all directors.
List of directors on companies letterhead.
List of memorandum and article of association.
Copy of board resolution.
Latest form 29 (if director is to be changed or in case of his death, this kind of
form is filled, it includes information that a new director has how much number of
shares with him.
Companies rubber stamp.
Copy of certificate of incorporation should be attested by director, co register an
office stamp should be affix.
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PUBLIC LIMITED
1) Certificate of commencement of business
2) Same as home documents.
CLUB / SOCIETY / ASSOCIATION
These concerns are non-trading in nature. They have their own rules and regulation and
their affairs are mentioned by the committee called as a governing body or managing
committee.
1) Stamp of directors
2) NIC copies
3) Certified copy of resolution
4) Memorandum and article of association
5) List of heads on companies letterhead.
6) Bank account opened in their name with BAL.
7) Name of person to be specified for the operation in account.
8) The manner in which the account shall be operated.
9) Letter of registration.
SPECIAL TYPES OF ACCOUNTS
These types of accounts only can establish after approval of system and operation
division head office: -
o Trust Accounts
o Accounts of executors / administrators
o Accounts of liquidators
o Accounts of local authorities/ municipals.
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CHEQUE BOOK ISSUANCE
When the account is opened, then the customer is given a chequebook to sign upon and
withdraw money. It proceeded as under.
PROCEDURE
All the account opening formalities must be completed before issuance of chequebook.
Particulars of the chequebook requisition should be completed containing title of account,
account number, type of currency, number of leaves and signature to the customer.
Signature of the customer is verified on the requisition.
If customer is unable to collect his chequebook, then he can give authority to the third
person to collect his cheque book on his behalf by signing on the back of the requisition,
in such case, the particulars of the third person are required like name of the person NIC
number and signature of that person on requisition and cheque book issuance register.
Chequebook is taken out from the safe / locker. It is assured that series of the
chequebook. Particulars are entered in the chequebook issuance register. Account number
is stamped on very leave of the chequebook and those leaves are counted. Name of
account holder is written on the cover of the chequebook. And requisition on the
chequebook for further issuance is properly filled, stamped and signed by officer of the
bank. Chequebook is delivered to the customer and his signature on the chequebook
issuance register. Chequebook serial number entered. In the system (FoxPro), Stock of
chequebook are balanced at the end of each day and kept under safe custody. Earlier the
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banks were charging a fee for issuance of chequebook but now whenever a new account
is opened, the account holder issued a chequebook free of charge.
Bank Alfalah issues the following cheque books.
Cheque Book 10 leaves
Cheque Book 25 leaves
Cheque Book 50 leaves
CLOSING OF ACCOUNT
When a customer wants to close an account he has to given a hand written application to
the head of the operations department to close his account plus return remaining leaves of
Cheque book. The manager first verifies the sign of account holder, then closing is done
from the registers on the computer where the account was opened. In the file of the
account holder his account opening form is crossed. For this closing a fee of Rs. 150/- is
charge in BAF.
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TYPES OF CHEQUES
There are four types of cheques:
In-house cheques / transfers cheques
Inter branch cheques
Inter bank cheques
Outstation cheques OBC
VERIFICATION OF CHEQUES/ INSTRUMENTS
Some important things should be verified and confirmed about the cheques and
instruments:
1. It is not stale/ post-dated or incompletely dated.
2. It is not mutilated.
3. There are no unauthenticated alterations on the cheques/ instruments or the
pay-in-slip
4. The amount in words & figures on the pay-in-slip agrees to the total of the
cheques enclosed.
5. The details on the pay-in-slip & counterfoil do not differ.
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CASH DEPARTMENT
Cash department of Bank Alfalah is work under the operation department. This
department is given the complete responsibility of cash, as result of transaction in touch
local and foreign currencies. It is also responsible for the book keeping of these
transactions and the safe custody of cash. Out of five counters of cash department one
counter is fixing for senior citizens and females. All counters are dealing at the same time
in deposits, withdraw and online transaction processes.
This department performs the main function.
a) Cash receipts
b) Cash payments
CASH RECEIPTS
In cash department depositors are use deposit slips for depositing the amount into their
accounts. The officer checks if the deposit slip is properly filled up containing title of
account, A/C number date and amount in words and figures. Detail on both counter file
and cash receipt voucher should be the same. Cash is received by cash receiving officer,
twice counted and matched with the deposit slip. The cash details are written on the back
of the deposit slip and are also entered in computer software called bank Smart. Cash
received stamp is affixed on the face of the deposit slip along with the signature of the
cash receiving officer.
Deposit slip is forward to the officer in the cash department. Again proper scrutiny is
made by the officer cash department both on cash receipt and Bank smart software.
Officer cash department sign the deposit slip and finally approved the transaction on
Bank Smart. Deposit slip is credited and posted in the concerned accounted in the system.
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Counter folio is given the deposition as receipt. One consolidated cash debit voucher is
posted in the system to balance the cash.
CASH PAYMENTS OF CHEQUE
All five counters deal with cash payments the process for payment of cheques local and
foreign currency is same. First the cheque is presented by the customer or holder to cash
payment officer. He confirms that it is drawn on the same branch and the particulars of
cheque are properly filled in. one signature of the holder is taken on the back of the
Cheques. Officer checks the date, amount in words and amount in figures, payees name,
crossing if any, account number, cheque serial number, any material
alterations/endorsements and signature of the customer. Account is debited in Bank
Smart and then cheque is cancelled by the officer. It is posted in the system and posting
stamp and number is affixed on it. At the end officer hands over cash to client.
CLEARING DEPARTMENT
Before discussing it is necessary to know what is clearing.
The process by which cheques exchanged between the collecting and paying bank and
the ensuing financial settlement is called clearing.
This facility is provided by the state bank of Pakistan for offsetting of cross obligations
between the different banks. Clearing is of two types:
1) Inward clearing
2) Outward clearing
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INWARD CLEARING
When cheques drafts, etc, of our branch presented to us for clearing by the SBP. Cheques
to be honored by bank.
OUTWARD CLEARING
The cheques of other banks which the account holder deposits in their accounts are send
for collection.
CLEARING PROCESS (INWARD/OUTWARD)
Here the local cheques are received that are drawn on BAF. All the cheques are received
on one counter along with the paying slips duly filled in properly containing particulars
of cheques and account holder. Counter folio of paying slip is handed over to the
customer by putting stamp for cheque received for collection for Bank Alfalah on it duly
signed by officer. These cheques are scrutinized and cheques for local clearing are
separated from OBCs. These are then entered in clearing register and cheques for
collecting are entered in OBC register and handed over the bills department of collection.
Clearing officer checks and verifies title of all the cheques deposited by the customer to
confirm the good title of the cheques. Cheques are scrutinized properly and paying slips
are separated from cheques. Special crossing, endorsement and clearing stamps are
affixed on the cheques. Cheques of each bank are sorted and arranged branch wise.
All the cheques are then entered into the clearing system of bank. Print out of the clearing
is taken and details are attached. With the cheques of each bank. Details of these banks
are then entered into the clearing schedule containing number of cheques presented and
their total amount against the name of each bank. Then total number of cheques presented
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to all banks and their total amount is written on the foot of that schedule, which is tallied
with the clearing register.
Next morning, these cheques are delivered to the respective banks in clearing house of
SBP between 9:00 to 9:30 AM. In the same manner, other banks present their clearing
drawn on Bank Alfalah. Total number of cheques and their amount delivered to other
banks are received from them are written on the clearing house schedule and handed over
to the officer clearing house SBP. Cheques / DD received in clearing are given to the
officer cash department of the branch for their repayment. After I proper scrutiny of
cheques, verification of signatures and confirmation of balance in the account, officer
cash department pays these cheque by canceling and posting them in the system.
If any cheque is not passed due to insufficient balance or any other reason, officer cash
department returns the same cheque by attaching a cheque return memo containing
reason for return. This cheque is entered into the cheque returned register and bank
charges are deducted according to the schedule of charges.
Second clearing is called at 2:30 PM to check the fate of the cheques presented to other
banks in the morning. If any cheque is to return, that is delivered to the same bank in
second clearing. In the same manner, if any cheque presented by Bank Alfalah in first
clearing is returned, they receive it and once again give schedule of clearing figure to the
officer clearing house SBP containing number of cheques and their amount delivered and
received unpaid.
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ACCOUNTS DEPARTMENT
Account department is the most important department of the bank. Because it is
concerned with:
Revenue
Expenses
Assets
Liabilities
These are the pillars of any business. In this department, all the vouchers that are posted
during one day are sent to the account department next day. These vouchers are already
posted to computer by the concerned department. So computer also sends a report to the
accounts department. The accounts department has to tell that the requirements for
cheques and vouchers are fully checked. If any kind of renovation or construction or
rebuilding is done, all is paid from the accounts department. Like petrol for the car of
EVP or VP, stationery charges, medical allowance, etc. are all paid by this department.
DAILY CUSTOMER MOVEMENTS LIST
All the changes that are made in accounts of customer are shown in the daily customer
movement list. By using this list, people of accounts department can prepare the
vouchers.
Following activities are performed by account department:
Voucher preparation
Preparation of daily, weekly, monthly, and annual statement.
Budgeting and fixed assets
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Employers benefit
Expenditure approval.
The bank does not make payment of a cheque bearing a six month or older date. If an
account is not operated in six months, it is called dormant account.
TYPES OF ACCOUNT
Current account
Saving account
Notice deposit
Term deposit
CURRENT ACCOUNT
There is no interest on these accounts. It is only for transaction purposes. They paid on
demand. Where a banker accepts, paying all checks drawn against him to extend of the
balance in the accounts. As there is no profit paid on this account, it is also called
checking account because cheque can be drawn on it. Current account is mostly opened
for business. The minimum balance requirement for opening the current account is Rs.
10000/- inter bank fund transaction are handled by current account.
SAVING ACCOUNT
The purpose of this account is to introduce the habit of saving individuals in the
neighborhood. The profit on saving accounts is paid on the basis of profit and loss
sharing after every six monthly. The minimum balance requirement for opening the
account is Rs. 5000/-.
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NOTICE DEPOSITS
Notice deposits are kind of fixed deposits. The minimum balance requirement for
opening the account is Rs. 500/- and payment is drawn on maturity of the specific
perio
Notice Deposits is ofTwo Types:
One for which a prior notice of 30 days and is required from the customer before
withdrawing deposited amount and for which rate return is 1.50%.
Second for which a prior notice of 30 days and above is required from the
customer before withdrawing deposited amount and for which the rate of return is
1.50%.
TERM DEPOSITS
A term deposit is a deposit that is made of a certain period of time. At the end of specific
period the customer is allowed to with draw the principal amount. The rate of return of
this account varies from 1.50% to 2.25%. The term deposit account varies from one
month to 1 years and the minimum balance requirement is Rs. 500/-.
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REMITTANCE DEPARTMENT
The need of remittance is commonly felt in todays business. A major function of any
bank is to transfer of funds form one place to another. Bank Alfalah uses the following
modes of transfer of funds.
Demand draft (DD)
Pay order (PO)
Call deposit
Pay slip
Money gram
Rupee Travel Cheque
DEMAND DRAFT
It is instrument, which is used to transfer amount from one city to another city it can be
made on cash as well as on cheque. If it is made through cheque that it is necessary that
person must be A/c account holder while in case of cash any person can made. It consists
of four copies.
1) Original copy which is given to account holder.
2) DD advice is sent to the central branch.
3) Third copy is for reconciliation.
4) Last copy is sent to head office for reconciliation.
Procedure
The client who wants to transfer his funds form one city to another fills a form requesting
the bank to prepare a DD. DD application form contains columns requiring information
for the preparations of DD e.g.
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Beneficiary name
Applicants name
Address
Amount to be sent etc.
Bank deducts some charges against DD. These charges include commission tax
provincial tax etc. Tax is deducted 0.3% while PT charges are 0.50 paisas. If customer is
taxpayer than advance tax is exempt provided that he submit the tax exemption
certificate.
Procedure for Foreign Demand Draft Issuance
Application form is given to the customer to fill the same. Two signatures are taken on
the form, one for request and other for receiving the instrument. All the particulars of
application form are checked and bank commission is charged, which is US$ 5/- for each
amount of FDD. Cheque is received from the customer for total amount of FDD plus
bank commission. Cheque and application form is then given to the officer cash
department for the payment cheque.
After proper scrutiny, officer cash department posts the cheque and signs the application
form, to assure that payment is received. Then cheque and application form is given to
the incharge. Remittances, who will enter all the particulars of the application in the FDD
issuance register. If the customer wants to pay cash, it is deposited by the customer on
cash counter. Cash receiving officer receives cash on the application form along with the
bank charges. Application form is then given to the remittances incharge for the issuance
of the instrument. A control number is allotted to the instrument form FD register.
Instrument is complete by putting all the particulars in it and signed by two attorney
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holders. Instrument is then handed over to the customers. FDD advice is sent to the
responding foreign bank / paying bank where they are maintaining dollar account through
registered mail. Exchange transaction credit advice (ETCA) is sent to eh Head office fore
the reimbursement. Copies of the FDD and ETCA are kept in the record of the bank.
Reimbursement, Copies of advice (ETCA) and FT are kept in the record for the bank.
COLLECTION
All the cheques under collection are called cheques under collection in Bank Alfalah
Limited. There are two types of bills for collection:
Outward Bills for Collection
Inward Bills for Collection
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Outwards Bills for Collection
All the cheques are received on one counter along with paying slips duly filled in
properly containing particulars of cheques and account holder. Counter folio of
paying slip is handed over to ht customer by putting stamp for cheque received for
collection for Bank Alfalah on it duly signed by officer. These cheques are
scrutinized and cheques for local clearing are separated from OBCs. Cheques for
local clearing are entered in clearing register, whereas cheques for collection are
entered in OBC register and handed over to the bills department for collection. OBC
number is allotted to eh cheque from OBC register. Special crossing and bank
endorsement stamps are affixed on the cheque. OBC schedule is attached with the
cheque and dispatched to the main branch of that city for collection. If they do not
have any branch in that city, then cheque will be sent to the collecting agent of Bank
Alfalah for then cheque can be sent directly to the drawing branch; instructions are
given on the OBC schedule for the payment of that cheque.
PAY ORDER
Written order which is issued and received to the save book or drown or payable on save
branch. Application form is given to the customer to fill. Two signatures are taken on the
form one for request and other for receiving the instrument. All the particulars of
application form are checked and bank commission charges and with holding tax is
written on the top of the applicant form. If the customer is maintaining his account with
the branch he can give cheque for total amount of instrument plus bank charges. Cheque
and application form is then given to the officer cash department for the payment post the
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cheque and signs the application form in token of payment received. If the customer
wants to pay cash, cash is deposited by the customer on cash counter cash receiving
officer receives, cash on the application form along with the bank charges and
withholding tax.
Application form is given to the remittances incharge for issuance of instrument. He
enters all the particulars of the application form in the system (BPG) and computer gives
an auto control number to the instrument. Print out a take on the block payment order. It
is then signed by two authorized officers of the branch. Instrument is protecting graphed
and given to the customers. When the instrument is presented for payment, it is posted in
the BPG and canceled by the remittances incharge after proper scrutiny.
PAY SLIP
It is used when bank itself pay for any type of transaction e.g. purchased of stationary.
MONEY GRAM
Bank Alfalah Limited, in collaboration with money gram offer remittance services to
Pakistan.
Its basically a person to person money transfer service that allows consumer to receive
money in just a few minutes.
Procedure
Person must have reference no.
Person must tell reference no. and compute the simple form.
Person has to show NIC and tell compute introduction after that he can obtain
money.
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Vouchers are also posted in the system. When OBC is realized collection bank pays the
amount through IBCA if it is the same bank or through DD if it is another bank. If DD is
received against OBC, it is presented in the clearing for collection. If IBCA is received
the branch for the payment of OBC, certain vouchers are posted in the system.
RUPEE TRAVEL CHEQUE
BAL always provide to its customers different type of services. Which are safe and
quality services RTC is very popular among the people of the country. The bank provides
RTC in the following categories.
Purchases of RTC
The person who wants to purchase RTC is required to fill a form. The form contains
name, address, amount or denomination and other necessary information. The
purchaser deposits the amount in the bank and gets a voucher from the cashier. And
then RTC is providing to thepurchaser. Before handing over to the purchaser,
signature is taken from him on the RTC and on the copy of form. BAL rupee
travelers Cheques are acceptable in all the branches of BAL in Pakistan.
Features
Following are some features of RTC.
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It is acceptable in all the branches of BAL in Pakistan.
In case of lost the purchaser inform to BAL in 24 hours. Then there is no way of
loss of purchaser and his amount is safe.
Available easily in all the branches of BAL Acceptable by major businesses of Pakistan.
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CREDIT DEPARTMENTCREDIT DEPARTMENT
Credit means belief or trust. The quality of being credible or trustworthy. Another
words we can define credit as trust in ones integrity in money matters and ones ability
to meet payment when due. The earnings of BAL are chiefly derived from interest
charge and discounts. This department is the revenue generating department. Credit
department basically has three segments.
1) Credit marketing department
2) Credit administration department
3) Trade finance services department
Credit and advance department deals with extending loans (credit facility) to customers.
State Bank of Pakistan (SBP) has prescribed regulations which are called
PRUDENTIAL REGULATIONS. Every bank has to follow these regulations. If any
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bank violates the regulations it should be liable for penalties under the core spirit of SBP
PR(S).
The Bank Alfalah limited credit is extended on the basis of these rules and regulations.
These regulations tells the term and conditions under which you can extend loans to the
borrower and to what extent.
CREDIT FACILITIES
At BAL there are two types of credit facilities
1) Funded facilities
2) Non funded facilities
FUNDED FACILITIES
These are the facilities in which there is direct involvement of cash fund. Following are
the funded facilities.
1) Current finance CF
2) Term finance TF
3) Finance against foreign bills FAFB
4) Finance against packing and credit FAPC
5) Finance against imported merchandise FIM
6) Finance against trust receipt FATR
7) Payment against document PAD
Current Finance CF
The extensively used financing mode at BAL is current finance (CF) current finance is
used to finance both individuals and industries. Individual take current finance for their
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personal use while in industries. It is taken for fulfilling the requirement of working
capital.
Term Finance TF
Term finance is for specified time period. Term finance is given for fixed asset financing.
Finance Against Foreign Bills FAFB
In FAFB facility exporter take loan from bank on the behalf of their foreign export bills.
Like exporter sends shipment but at that time he needs fund for the operation of the
business. He may go to the bank and surrenders all the documents including L/C, Bill of
lading etc. bank checks all the documents to be in accordance with terms and conditions.
If they find no discrepancy, they give money to exporter but take some margin on it.
Finance Against Packing And Credit FAPC
FAPC is taken for the preparation of consignment. It has two forms.
1) Pre shipment
2) Post shipment
1) Pre Shipment
Preshipment loans are export related working capital financing.
2) Post Shipment
Post shipment financing is essentially the receivable financing to the exporters till the
period he is out of cash after the shipment.
Finance Against Imported Merchandise FIM
This facility is allowed against the commodities imported from other countries usually
through letter of credit. Some time importer does not have enough amounts for paying the
imported merchandise therefore. He request to the bank to pay all dues to the exporter
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against the security of imported merchandise. Bank pays the amount and releases the
goods, when the importer pays off its liability partially / fully.
Finance Against Trust Receipt FATR
Finance is extended upon the trust receipt signed by borrower. Importer have to import
the product. There are three conditions.
1) Pay money and get thing
2) Get fine facility
And third is that if that client is trust worthy for bank believing on him based upon his
past record. He releases the goods against the trust receipt. Trust receipt is given to the
bank by the customer. The customer in turn commits that I will pay on such and such
date. Bank pays all taxes and gets merchandise and then gives it to client. Bank do
charges markup against such financing. FATR is for specific period of time. If client do
not pay with in specified time then bank charges higher per day markup.
Payment Against Document PAD
Payment against document is made by the banks as payment against L/C comes due
payment is made for imported documents. For example when exporter sends all the
document to importing bank as document reached, importing bank has to make payment
within 24 hrs if the importer does not pays then bank charges markup per day.
NON FUNDED FACILITIES
The facilities where there is no direct involvement of banks fund. Following are the non
funded facilities.
1) Letter of credit L/C
2) Letter of Guarantee L/G
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Letter Of Credit
Importer bank issues a document on request stating that it will pay the exporter when
exporter fulfill the terms of letter of credit L/C is off two types:
1) Sight L/C
2) Usance L/C
Sight L/C
Requires the importer / importing bank to pay as soon as it receives the clean documents
from exporter.
Usance L/C
It extends time period (typically 60, 90, 120 days) to importing bank for payement. After
specified time period importer have to pay.
Letter of guarantee L/G. Bank gives guarantee in the behalf of person that I will pay in
case of default.
GUIDE LINE OF CREDIT POLICY
Total outstanding financing facilities by banking company to single person shall
not at any point of time exceed 30% of banks unimpaired capital.
No banking company shall make loans or advances against the security of its own
shares.
No banking company shall grant unsecured loans / advances on the guarantee of,
o Any of its directors.
o Family member of director
o Any private company in which banking company is interested.
In arriving at exposure per person weight age of 50% shall be given to
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o Documentary credit opened by bank.
o Guarantees/bonds other than repayment guarantees.
In arriving at per party exposure 90% of
o Deposit of party with bank under lien.
o Face value of FIBs lodged by the party as collateral.
o Pak rupee equivalent of face value of special US Dollar bonds converted
at official rate, lodged by the party as collateral shall be deducted.
Aggregate exposure of bank against all its clean facility shall not at any point
exceed the amount of banks capital and general reserve.
Advances given to the employees of bank in accordance with their entitlement.
While granting any accommodation, bank shall ensure the total accommodation
availed by any borrower from banks / financial institution does not exceed 10
tines of the capital and reserve of the borrower.
A borrower who is prepared to inject fresh equity irrespective of the fact that its
equity is negative is eligible to obtain finance from bank to the extent of 10 times
fresh injected equity.
No banking company allow financing facilities whether fund based / non funded
against the shares of companies which are not in central depository system.
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CREDIT CYCLE
STEP I
Credit cycle start with request letter. When customer gives a request letter to bank that he
want that much amount of credit from bank.
STEP II
When bank receive the request letter from customer. The officer of credit marketing
department make credit line proposal (CCP) of client. It is essential that the proposal
define clearly the purpose of facility, the source of repayment, the agreed repayment.
Schedule, the value of security and customer relationship consideration implicit in credit
division. The security to be accepted as collateral for the facility and all the
documentation relating to the security of facilities must be in the approved form all
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Request
Processing Information & CLP
Decision
Offer
Purification of the Documents
& Security
Disbursement of Loan
Monitoring
Renewal / Revise / Write-off
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approval procedures and required documentation must be completed all these things all
feed in CLP. CLP is basically a medium to present proposal for seeking approval of
credit line in client. In CLP they feed complete data of the client that include:
Credit limit
Legal status of company.
History of relationship / introduction with bank.
Line of business
Background of proprietor / partner / owner.
Purpose of facility
Security
Along with it they include borrower basic fact sheet.
CCA
Prudential checklist.
STEP III
After the processing of information, credit officer decides weather to give credit to that
person or not. They also check weather its security has any market value or not. Decision
is taken by the branch credit committee (BCC). If the proposal is within the discretionary
powers of committee the proposal may approve after evaluation of credit risk. It CLP is
beyond discretionary power of branch credit committee the CLP is sent to credit division
at head office along with supporting documents and recommendation of branch credit
committee.
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STEP IV
When decision is made now credit officer offer that we will give you loan uptill that limit
not more than that. Up till now all the process is done by credit marketing officer. After
that credit administration officers work start.
Credit Administration department basic function is to fulfill the requirement of
documents as a security for credit. Different types of documents are required for
Pledging, mortgage and hypothecation.
Documents required for C.F. Hypothecation
Legal stamp documents required:
Promissory note-------------------IB~12A
Letter of Hypothecation----------IB~25C
Letter of guarantee------------------IB~29
Letter of continuity
Agreement of finance----------------IF-3
Letters without Stamp:
Letter of arrangement
Letter of disbursement
Letter of authority
SBP regulation undertaking
Documents required for C.F. Pledge
Legal stamps documents required:
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Agreement of finance
Promissory note
Letter of guarantee
Memorandum of deposit of title deed
Letter of hypothecation
Letter of continuity
Letters without Stamp:
Letter of arrangement
Letter of disbursement
Letter of authority
SBP regulation undertaking
Property Documents for mortgage
Legal advice about property documents
Title deeds (original documents of property
Aux Sajra (location site map)
NEC (non-encompress certificate)
PT 1 in favor of borrower
PT 1 in favor of bank
MoTD (Mortgage of title deeds)
Agreement to create mortgage
Letters submit to ETOS & registrar
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Irrevocable general power of attorney (IGPA)
Valuation report
STEP V
Here documents are checked security is properly checked which is checked by the valuer.
Valuer tells the value of security. Here following characteristic of security are checked:
Market value
Consistency
Salable
Storable
Transferable
Transportation
STEP VI
On completion of legal documents and security arrangement and receipt of completion
certificate from recognized legal counsel, the bank according to the approved schedule
prepared by bank after obtaining confirmation of other payments have been funds from
sponsors other source viz, equity fund from sponsors release of fund by other co-
financiers etc. After the valuation of security the loan is disbursed to customer.
STEP VII
Responsibility lies to branch manager to monitor the overall profit and risk aspect of
credit portfolio in accordance with criteria setout in banks credit policy. After the
disbursement credit administration officer monitor the performance of customer whether
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he is fulfilling the requirement or not. He is paying markup or not for which purpose he
has taken the loan whether he is utilizing loan for that purpose or not.
STEP VIII
After specific time period credit officer see what customer want whether he want to
renew / revise or write off it. If he wants to renew it he said to officer to renew it with
same limit.
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BANK ALFALAH LTD.
BALANCE SHEET
AS ON DECEMBER 31st, 2006
(Rupees in '000)
2009 2008 2007 2006 2005
ASSETS
Cash & Balance with Treasury Bank 27859360 24788625 19708518 8423399 4540486
Balance with other banks 12731952 9713369 3183957 626917 232728Lending to Financial Institutions 12456653 27050493 _ 7437733 4634398
Investments
56502210
57425700 35503196 28903596
2447031
4
Advances
14999932
5
11886401
0 88931400 49216120
2831940
1
Other Assets 5633051 3851529 3226959 1553108 1208930
Operating Fixed Assets 10502990 6620067 4280504 2791626 1760774
Deferred Tax Assets -- _ _ _ _
TOTAL ASSETS
27568554
1
24831379
3
15483453
4 98952499
6516703
1
LIABILITIES
Bills Payable 3091135 3733124 2233671 1208671 758961
Borrowing from Financial Institution 8394130 5844389 12723830 13127754 6037576
Deposits & other accounts
23950939
1
22234506
7
12971489
1 76698322
5168498
4
Subordinated loans 3222106 3223355 1899480 649740 650000
Liabilities againt assets to finnace lease -- _ _ _ _
Other liabilities 7305496 5219666 2725344 2186754 1196342
Deffered Tax Liabilities 1921338 484066 275834 323010 1186501
TOTAL LIABILITIES
26344359
6
24084966
7
14957305
0 94194251
6151436
4
NET ASSETS 12241945 746126 5261484 4758248 3652667
REPRESENTED BY
Shared Capital 5000000 3000000 2500000 2000000 1000000
Reserves 2749533 2351218 1008772 790374 365727
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Unappropriated profit 2823072 1386845 860300 963042 25005010572605 6738063 4369072 3753416 1615777
Surplus on Reveluation of Assets 1669340 726063 892412 1004832 2036890
SHAREHOLDERS EQUITY 12241945 746126 5261484 4758248 3652667
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31st, 2006
(Rupees in 000)
2009 2008 2007 2006 200
Mark-up / Return / Interest earned 21191470 1224681
1 5620203 4033380 463049
Less Mark-up / Return / interest expensed 15232886 7204992 2434459 2028577 311231
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Net Mark-up / Interest income 5958584 5041819 3185744 2004803 151818
Provision against loans & advances -697690 -402298 -370208 -87091 -5361
Gain/(loss) on remeasurement of held - 23163 -2185 _ _
Bad debts written off directly -1537 -512 -315 -418 -144-699227 -379647 -372724 -87509 -5506
Net mark-up/ interest income after provision 5259357 4662172 2813020 1917294 146311
Non Markup/ Interest Income
Fee, Commission and Brokerage income 1804998 1158747 675860 399383 31636
Dividend Income 37393 52014 52589 112017 6207
Income from dealing in foreign currencies 386997 290091 218820 106848 9516
Other income 842099 744518 572822 2773503 14180
Total non-markup/ interest income 3224639 2245370 1520049 3391751 61541
Total Mark-up and Non Mark-up Interest Income 8483996 6907542 4333053 5309045 207853
Non Markup/Interest Expenses
Administrative expenses 5874745 4313023 2677635 1799490 118288
Other provisions/ write-offs - 10125 _ 2000 _
Other charges 43306 21104 1700 1875 99
Total non-markup/interest expenses 5918051 4344252 2679385 1803365 1183882565945 2563290 1653734 3505680
Extraordinary/unusual items - _ _ _ _
Profit Before Taxation 2565945 2563290 1653734 3505680 89465
Taxation
For the year - Current 476226 592635 586159 1364723 _
Deferred 427902 267524 -3663 -5164 _
For prior years - Current -100874 -7000 -30000 22887 _
Deferred 8037 9249 _ _803254 861196 561745 1382446 -44897
Profit After Taxation 1762691 1702094 1091989 2123234 44567
Unappropriated profit brought forward 1886845 860300 963042 250050 24970
Transferred from general reserve - _ _ _ 8500
Transferred from surplus revaluation off. assets 26074 24870 23667 14405 5880
Profit available for appropriation 3675610 2587264 2078698 2387689 83918
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SIX YEAR FINANCIAL SUMMARY
(Rupees in '000)
2004 2005 2006 2007 2008 2009
OPERATIONAL RESULTS
Total Income 3700 5246 7425 7140 14492 24416
Operating Expenses 744 1184 1803 2679 43445918
Profit before Income Tax & Provision 510 948 3593 2026 2942 3264
Profit before Income Tax 524 895 3506 1654 2563 2566
Profit after Taxation 311 446 2123 1092 1702 1763
BALANCE SHEET
Shareholder's Equity 1362 1616 3753 4369 6738 10573
Total Assets 40098 65167 98952
15483
5 248314
27568
6
Advances -- net of provision 19131 28319 49216 88931 118864
14999
9
Investments -- net of provision 11397 24470 28904 35503 57426 56502
Deposits & other accounts 30207 51685 76698
12971
5 222345
23950
9
OTHERS
Imports 26658 33879 46807 78472 116210
11993
7
Exports 25261 33057 44273 57317 71847 70844
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SWOT ANALYSISSWOT ANALYSIS
What is a SWOT?
SWOT analysis is a process to identify where we are strong and where we are vulnerable,
where we should defend and where we should attack. It tells us our strengths, our
weaknesses, the opportunities which prevail in the market and the threats which we may
face from our competitors and other from other potential factors.
This analysis can be performed on a product, on a service, a company or even on an
individual.
SWOT Analysis of Bank Alfalah
Here we have applied this very useful technique to identify the strengths, weaknesses,
opportunities and threats of Bank Alfalah.
Strength
Strong Financial Position
As we can see in the financial statements of the bank, the financial position of the
organization is very sound and its profitability is in increasing. The Earning per share has
been increased on a rate of about 50%, which is a very positive sign.
Highly Qualified Employees
The bank has highly qualified and skilled workforce and it has succeeded to attract the
best banking professionals from across the country due to its growing pace and sound
reputation.
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Conducive Environment
The management of the bank is very much concerned with the development of and
improvement of the working environment. The bank has state of the art and purpose built
branches where all the modern technologies are provided to get the effi