Internship Report on Bank Alflah

7/31/2019 Internship Report on Bank Alflah

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Internship Report on Bank Alflah

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SUBMITTED TO

Honorable

Sir Mudassar AwanLecturer COMSATS Institute of

Information Technology,

Lahore.

SUBMITTED BY

Najam-Ul-Hassan

CIIT/Spo5-MBA-126/LHR

September 05, 2006

Lahore Campus

Defence Road off Raiwind Road, Lahore

Ph No. 5321090, 9203101 Ext. 215
http://www.addthis.com/bookmark.php?v=250&username=samipmlhttp://www.addthis.com/bookmark.php?v=250&username=samipml


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In

THE NAMEOF ALLAH,

THE BENEFICENT,

THE MERCIFUL


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DEDICATED

TO My PARENTS

WHO ALWAYS

LOVED ME& all those who have a soft

corner for me in their hearts

acknowledgement


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All gratitude and thanks to almighty ALLAH the gracious, the most mercifuland beneficent who gave me courage to undertake and complete this task. I amvery much obliged to my ever caring and loving parents whose prayers haveenabled to reach this stage.

I am grateful to almighty ALLAH who made me able to complete the workpresented in this report. It is due to HIS unending mercy that this work movedtowards success.

I am highly indebted to my course instructor Mr. Mudassar Awan for providing mean opportunity to learn about the Banking system of Bank Al-Falah" which is vitalingredient of MBA program. I am very great full to my teacher Mr. Mudassar

Awan for providing me guideline for the completion of this report.

I feel great pride and pleasure on the accomplishment of this report.

NajamUl-

Hassa

CIIT/S

5-MBA126/L

R


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preface

Banking sector owes a pivotal importance in the economy of any countrythrough its vibrant functions. This is the deep seated motivator thatgeared up me to join any bank for internship. Moreover, the practice andfamiliarity learned during this tenure would also attest very helpful andalleviating in the awaiting proficient life.

This report is an upshot of my six weeks internship in Bank Al-Falah,

Urdu Bazar Branch, Main Kabir Street, Urdu Bazar, Lahore Pakistan.Bank Al-Falah posses an imperative importance in the banking sector ofPakistan. It always remains the center of hustles in business activities. Italways endows with great covenant of rally round in terms of funds andservices at all epochs of its dynamism.


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Although, a derisory period of six weeks is not enough to learn thecomplex operations of Bank Al-Falah Limited yet I made industriousefforts to converse them comprehensively in this report. Particularly, Ihave remunerated more accents on study of distinguishing features andservices of Bank Al-Falah Limited. I have made maximum venture toelaborate this report with the material read, listened and observed.

I have strong belief that this report will guide and ease the readers tounderstand the operations of banking system and more prominently havegood knowledge about Bank Al-Falah Limited, one of the most trusty andleading banks in Pakistan.

Dear readers, I hope that you will appreciate my report and sense thatreading my report is not like to waste the time in any respect.

NajamUl-

HassaCIIT/S5-MBA126/L

R


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Table of contents

acknowledgement 4

preface 5

Table of contents 6

EXECUTIVE SUMMARY 8

what is BANK? 11

types of BANKs 13

List of BANKs in pakistan 15

history of BANKing in pakistan 16

state BANK of pakistan 18

nift - national institutional facilitation technologies 23

islamic BANKing in pakistan 25

the bank Al-Falah limited 26

Title, Logo and slogan 28

vision and mission statement 29

head office at glance 30

boardof directors 31

chairmans messege 32

management of bank Al-Falah 33

Bank Al-Falah branch network 34
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departments of Bank Al-Falah 35

account opening department 36

remittances department 50

clearing department 62

accounts department 70

cash department 73

finance/credit department 76

credit card department 91

trade finance departments 95

swot analysis 102

learning and experience 109

conclusion 113

EXECUTIVE SUMMARY

The banking structure in Pakistan comprises of the following types, StateBank of Pakistan, Commercial Bank of Pakistan; Exchange Banks,Saving banks, Cooperative banks, specialized credit institutions. Thestate bank of Pakistan is the Central bank of the country and wasestablished on July 01, 1948. The network of bank branches now coversa very large segment of national economy. The State Bank of Pakistanissues the shares of these periodically. Bank employees and othercommon peoples can also purchase these shares and earn profit.

To open an account the customer has to meet the general bankingmanager with an introducer. The procedure begins with the punching ofaccount opening form to the customer file i.e. customers master file.Before closing any account, bank send letter to the account hold forinforming him that his account is going to be closed. There is need anapproval form higher authority to close any account. Current deposits arethose which are payable to bank whenever demanded by the customer.
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Bank does not pay any profit on current deposits. The following are thefinancial products/services of PLS Account, Saving Account, Termdeposit and Foreign currency accounts.

In remittance department like any other BANK AL-FALAH also have

instruments for transferring of money, Telegraphic Transfer, MailTransfer. In cash department both deposits and withdrawals go side byside. This department works under the CD In charge and deals with cashdeposits and payments. This department maintains the following sheets,books, and ledger of account cash received voucher sheet.

Cash paid voucher sheet, Paying-in-slip, Cheque Book, Cash balancebook. The clearing in Karachi at BANK AL-FALAH or other banks is beingdone through NIFT (National Institute of Facilitation Technology).

Bank provides this facility to the people who need advance money tomeet their requirement. Party dealing with other banks financial conditionof borrower business and as a first step credit proposal is being made.BANK AL-FALAH provides advances, which are two types. Secured

Advances, Unsecured Advances. BANK AL-FALAH usually classifiedadvances in to following types Commercial Advances, Corporate/SMEs

Advances, Agricultural Advances. Commercial Advances are of followingtypes Demand Finance, Cash Finance, Export Refinance Part I (PreShipment) & others. Banks Agriculture division deals with the agricultureadvances. Bank provides the Agriculture Advances in order to enhanceand support the agriculture sector of the country. Farm Credit & NonFarm Credit.

In foreign exchange, BANK AL-FALAH is dealing Foreign CurrencyAccounts, Foreign Remittances, and Foreign Bills for Collection, Imports& Exports

Foreign currency accounts & the foreign currency department deals withthe following types of accounts, Current account, Saving bank account,Term deposit. Foreign accounts are convertible on floating rate availableto the bank. Letter Of Credit facility is being provided by BANK AL-FALAHin foreign exchange.

what is BANK?

It has not so far been decided as to how the word Bank originated.Some authors opine that this word is derived from the words Bancus or


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Banque which mean a bench. Other authorities hold the opinion that theword Bank is derived from the German word Back, which means jointstock fund. It is therefore, not possible to decide as to which of theopinion is correct, for no record is available to ascertain the validity of anyof the opinions

The term bank is being used for a long time yet it has no precisedefinition. The basic reason is that the banks perform not just one butmany types of functions originally the banks were supposed to makeshort term loans to the traders only. The banks now not only make shortterm loans to the formers, traders , industrialist etc. But also invest in awide variety of long term earning assets.

The commercial banks also undertake and execute trust, deal in stock,shares and debentures, issue guaranties and indemnities underwrite and

sell new securities, and deal in foreign exchange etc.

Banking industry acts as life-blood of modern trade and commerce acting

as a bridge to provide a major source of financial intermediation.

However some of the definitions of bank from different authors are asfollows.

Depository financial institution: a financial institution that accepts depositsand channels the money into lending activities; "he cashed a check at thebank"; "that bank holds the mortgage on my home"


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According to Dr. Hart

Banker or bank is a person

or company carrying on business of

receiving money and collecting drafts for the

customers subject to the obligation of honouring cheques

drawn upon them from time to time by

customers to the extends of

the amounts available

on their currents

accounts

In the words of G W Gilbert

A banker is a dealer in capital

or more properly a dealer in money.

He is an intermediate party between the borrower and lender.

He borrows one party and

lends to the

another


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types of BANKs

Central bank or state bank.

Commercial bank.

Exchange bank.

Industrial bank.

Agriculture bank.

Investment bank.

Saving bank.

CENTRAL BANK

Every country has its central bank or state bank. Its major function is tocarry out a countrys monetary policy with an aim to safeguard itsfinancial and economic stability. It has the monopoly of note issue. It isalso the custodian of money market. State bank is the Banks bank andlender to the government.

COMMERCIAL BANK

Commercial banks are profit earning concerns. They receive depositsand advance loans to the borrows. They greatly help in financing for

internal and external trade of the country.

EXCHANGE BANK

The main function of the exchange bank is to finance the foreign trade bythe purchase and sale of foreign currencies in the form of drafts, bills ofexchange, telegraphic transfers. They also perform the function ofcommercial bank. Receiving deposits and advancing loans.


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INDUSTRIAL BANKS

Commercial bank cannot afford to block their funds in long terminvestments. The industrial banks receive long term deposits and financethe industries by providing them long term credits. In Pakistan the

Industrial bank named as Industrial Development Bank of Pakistan(I.D.B.P) was established in 1961 for this purpose.

AGRICULTURAL BANK

Agricultural bank provides short and long period loans for financingagriculture. The agriculturists need short and long term loans for meetingtheir day to day and long term requirements for making permanentimprovement in the land. In Pakistan Agricultural Bank is named as

Agricultural Development bank of Pakistan (A.D.B.P) and it wasestablished in 1961

INVESTMENT BANK

The main function of investment bank the merchandising of shares andother securities, managing and distributing the issue of shares and othersecurities.

SAVING BANKS

These are the institutions which are sponsored by the government forhaving facilities to the people and small means. These bank collect smallsaving of people and allow them to withdraw in small amounts. Also

another institution i.e. National Savings is working in the same capacity.

List of BANKs in pakistan

The market for banks is diverse in Pakistan comprising nationalizedcommercial banks (NCBs), Private Banks and foreign banks. In 1993,


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Habib Bank (Overseas) Limited

United Bank Limited

Muslim Commercial Bank Limited

Commerce Bank Limited

Australia Bank Limited

Standard Bank Limited

Bank of Bahawalpur Limited

Premier Bank Limited

Pak Bank Limited

Lahore Commercial Bank Limited

Sarhad Bank Limited

Punjab Provincial Co-operative Bank Limited

The Pakistan Banking Council prepared banks amalgamation schemes in1974 for amalgamation of smaller banks with the five bigger banks of thecountry. These five banks are as under:

National Bank of Pakistan

Habib Bank Limited

United Bank Limited

Muslim Commercial Bank Limited

Allied Bank Limited

So, through the Nationalization of Bank Act 1974, the State Bank ofPakistan, all the commercial banks incorporated in Pakistan and carryingon business in or outside the country were brought under the governmentownership with effect from Jan. 1, 1974. The ownership, management,


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and control of all banks in Pakistan stood transferred to and vested in theFederal Government. The Finance Minister announced plans to startIslamic Banking system in Pakistan in the budget speech on June 26,1980, but it could not be possible till August, 2003.

state BANK of pakistan

The State Bank of Pakistan is the central bank of the country. Usually thestarting point for a central bank is a banking system that is already inplace - the banking system necessitates the presence of a central bank.But the State Bank of Pakistan (SBP) is unique in the sense that it startedits function in a newly born country, where it also had to shoulderresponsibilities of developing and rehabilitating a banking system and theeconomy, in addition to the traditional central banking functions.

Performance of the Bank since its inception in 1948, as reviewed insubsequent pages, shows that it has faced all the challenges with a greatzeal and commitment. The founders of the Bank set a multi-dimensionaltarget before it that included not only regulation of the monetary andcredit system but also the growth of this system. The vision of itsfounders was a stable monetary system in Pakistan with fuller utilizationof the countrys productive resources (SBP Act, 1956).

In order to achieve the goals set before it, the State Bank of Pakistanperformed all the traditional and non-traditional functions. The traditional

functions, which are generally performed by central banks all over theworld, are classified into two groups;

the primary functions including issue of notes,regulation of the financial system, lender of the lastresort, and conduct of monetary policy,


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the secondary functions including management ofpublic debt, management of foreign exchange,advising the Government on policy matters, anchoringpayments system, and maintaining close relationshipswith international financial institutions.

In the subsequent page, all these functions are shown in a flow chart

Vision and Mission ofSBP

Our VisionTo transform SBP into a modern

and dynamic central bank, highly

professional and efficient, fully

equipped to play a meaningful role,

on sustainable basis, in the economic


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and social development of Pakistan

Our MissionTo promote monetary and

financial stability and foster a

sound and dynamic financial

system, so as to achieve sustained

and equitable economic growth

and prosperity in Pakistan.

Governors of the SBP

nift-national institutional facilitation technologies

NIFT-National Institutional Facilitation Technologies (Pvt.). Ltd. wasincorporated in September 1995 as joint venture between a consortium ofsix banks and entrepreneurs from the private sector. All commercialbanks and all of branches in major cities avail NIFTs services. As of June2005, 43 commercial banks and their 3000 branches in 9 major citiesutilize NIFTs services.

NIFT has setup elaborate data centers geared to provide automatedservices for document processing particularly in the payment arena.Modern image based facilities have been established at Karachi, Lahore,Islamabad, Peshawar, Rawalpindi, Hyderabad, Multan, Faisalabad andQuetta. The services include cheques clearing, collection & delivery,reconciliation, return (unpaid) cheques processing, same day clearing(express 2 hrs. clearing service), intercity clearing and inter branch &


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inter bank settlement. Services are provided at individual branch level toover 3000 branches in nine major cities and 30 smaller cities.

NIFT also provides exclusive item processing services to financialinstitutions and turnkey clearing preparation support to selected banks.

a division of NIFT is a Certification Authority ofPakistan. This division has establishes facilities to provide PKI (public keyinfrastructure) based security solutions for e-business, e-commerce, e-banking and e-government as an affiliate of VERISIGN Inc USA and

WORLDeTRUST, Geneva.

ISM - NIFT has incorporated an wholly owned subsidiary Image SystemsMarketing (Pvt.) Ltd. (ISM) to offer image archiving and datawarehousing services to large corporations. For this purpose reselleragreements have been signed with corporations in USA and Europe tooffer services in Pakistan, Bangladesh, Gulf and Middle East.

MissionWe will draw from the respect we have earned as Trusted Third Party

Processor and will become a distinctive organization known for innovativeuse of technology to continually improve products and services for the

benefit of our customers and their customers and keep them abreast withtimes to compete in the global society.

VisionWe focus on our customers as an active component in growth process.We continue to offer services that expand their access to excellent andaffordable technologies. Our qualified and experienced workforce mustwork closely with our customers to continually enhance their confidence

and trust in us.


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islamic BANKing in pakistan

Islamic banking has been defined as banking in consonance with theethos and value system of Islam and governed, in addition to theconventional good governance and risk management rules, by theprinciples laid down by Islamic Shariah. Interest free banking is a narrowconcept denoting a number of banking instruments or operations, which

avoid interest. Islamic banking, the more general term is expected notonly to avoid interest-based transactions, prohibited in the IslamicShariah, but also to avoid unethical practices and participate actively inachieving the goals and objectives of an Islamic economy.

Steps for Islamization of banking and financial system of Pakistan werestarted in 1977-78. Pakistan was among the three countries in the worldthat had been trying to implement interest free banking atcomprehensive/national level. But as it was a mammoth task, theswitchover plan was implemented in phases. The Islamization measures

included the elimination of interest from the operations of specializedfinancial institutions including HBFC, ICP and NIT in July 1979 and that ofthe commercial banks during January 1981 to June 1985. The legalframework of Pakistan's financial and corporate system was amended onJune 26, 1980 to permit issuance of a new interest-free instrument ofcorporate financing named Participation Term Certificate (PTC). AnOrdinance was promulgated to allow the establishment of Mudaraba


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companies and floatation of Mudaraba certificates for raising risk basedcapital. Amendments were also made in the Banking CompaniesOrdinance, 1962 (The BCO, 1962) and related laws to include provisionof bank finance through PLS, mark-up in prices, leasing and hirepurchase.

Modes of Islamic Banking in Pakistan

Murabaha

Ijarah

Ijarah-wal-iqtina

Musawamah

ISTISNA A

MUDARABAH

MUSHARAKAH

the bank Al-Falah limited

Bank Al-Falah Limited was incorporated on June 21st, 1997 as a public

limited company under the Companies Ordinance 1984.Its banking operations commenced from November 1st, 1997. The bankis engaged in commercial banking and related services as defined in theBanking companies ordinance, 1962. The Bank is currently operatingthrough 104 branches in 36 cities, with the registered office atB.A.Building, I.I.Chundrigar, Karachi.

Since its inception, as the new identity of H.C.E.B after the privatization in1997, the management of the bankhas implemented strategies and policies to carve a distinct position for

the bank in the market place.

Strengthened with the banking of the Abu Dhabi Group and driven bythe strategic goals set out by its board of management, the Bankhas invested in revolutionary technology to have an extensive rangeof products and services.This facilitates our commitment to a culture of innovation and seeks


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out synergies with clients and service providers to ensure uninterruptedservices to its customers. We perceive the requirements of ourcustomers and match them with quality products and service solutions.During the past five years, we have emerged as one of the foremostfinancial institution in the region endeavoring to meet the needs oftomorrow today.

Bank Al-Falah limited was incorporated on June 21, 1992 as a publiclimited Companies Ordinance 1984 and commenced banking operationfrom Nov 1, 1992. The bank is growing rapidly in its equity & asset basedue to strategic managerial policies and assistance of Abu Dhabi Group.

The strength and standing of Abu Dhabi Group, principal owners of BALhave helped Bank Al-Falah Limited launch high quality consumer andcorporate banking operation in Pakistan. Bank Al-Falah Ltd has

embarked upon a rapid expansion program to make sure that ourservices reach more and more peoples. We are headed towards anoptimum sized network reaching major urban centers in Pakistan andsoon to go International.

ATM machines locations have been increased inmost of the branches butstill need to expand their network in every branch and collaboration withother commercial banks in ATM services. It is also introducing a new;more advanced and latest funds settlement computerized SWIFTprogram in late 2002. Which is a strong point of BAL that makes it asophisticated and highly technological oriented bank?

Regarding the investment and deposits portfolios BAL is playing dynamicstrategies to diversity their funds in more productive assets like;investment in T. Bills and export related concerns, which are producinghealthy profits. But all this goes to the staff of Bank Al-Falah Ltd bank thatis more proficient and good risk managers.

BAL has numerous opportunities in future to increase the volume ofbusiness because it has options to tap the market of its own peer units(Al-Falah Car Financing, Al-Falah Visa, & also Al-Falah Home Financeetc) beside BAL has strong assets base, it can diversify its funds in morelending & investment opportunities live; Petroleum concerns, financialderivatives business through treasury.

In nutshell, BAL has been performing very well since its birth. All financialinstitutions of Pakistan regarding commercial banking concerns give Bank


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Al-Falah Ltd as a leading bank in domestic sector title. Through SWOTanalysis we have found that BAL has competitive edge over other peerbanks and it wants to tap the prospects of foreign banks to achieve long-term objectives of the bank it ought to have astute, well-designed,comprehensive and dynamic frame of undertaking which might beestablished after diagnosing the conditions of country and drawbacks dueto which it lags behind.

Title, Logo and slogan

Title of Bank Al-Falah

Logo of Bank Al-Falah

Slogan of Bank Al-Falah

vision and mission statement

Vision

Mission Statement

head office at glanceHead Office of Bank Al-Falah

Bank Name: Bank Al-Falah

URL: http://www.bankAl-Falah.com/

Email [email protected]

STREET B.A. Building, I.I. Chundrigar Road

CITY Karachi
http://www.bankalfalah.com/mailto:[email protected]://www.bankalfalah.com/mailto:[email protected]


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STATE Sindh

COUNTRY Pakistan

PHONE 021-2414030

FAX 021-2417006

TELEX 29823 FALAH-PK

BANK TYPE Commercial Bank

DATE UPDATE Aug. 15, 2001

INTERNET BANKING Yes

Chundriger Road of Karachi has same importance in Pakistans economyas of the Wall Street in world economy. The divisions working under Bank

Al-Falah Limited Head office are as follows:

Administration

Credit Management

Investment Banking

Human Resource

Information Technology

Corporate Planning & Budgeting

Finance & Treasury

International Division

Inspection & Audit

Law Division

Marketing & Development

Trustee Division

Under the President an Executive Committee and a Credit Committeeworks. All the matter of the bank join to the board of director arepresented to the executive committee which is responsible for dailyoperation of the bank .The request for credit exceeding the GeneralManager power is approved by the Credit Committee. Under the area


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H.E. Sheikh Hamdan bin Mubarak Al-Nahayan

Bank Al-Falah branch network

The Bank is fully aware that the branch network has direct implications onthe services that it provides to its customers. We offer services through anetwork of160 branches and 60 state of the artATM machines.

Conventional Branches

Islamic Banking Branches

Overseas Branches

ATM Machines
http://www.bankalfalah.com/brall.asphttp://www.bankalfalah.com/atmbr.asphttp://www.bankalfalah.com/brall.asphttp://www.bankalfalah.com/atmbr.asp


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departments of Bank Al-Falah

As far as Bank Al-Falah Ltd is concerned, it is one of the top in all-domestic commercial banks in Pakistan. The rapid increase in branchnetwork shows the Banks performance within seven years, which isworth considerable.

However, this branch works with mostly all banking operations, which arenormally performed by every commercial bank. It has basically followingdepartments under which it operates all functions of bank diligently.These are mainly:

1. Account opening department

2. Remittances department

3. Clearing department

4. Accounts department

5. Warid telecom department

6. Cash department

7. Car financing department

8. Credit department

9. Credit card department

10. Trade financing department


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account opening department

This department is responsible for the opening and closing of accounts.In consideration of Bank Al-Falah Limited, opening and/or continuing tomaintain any account, the Account Holder/Depositor or Investor would bebound by the terms and conditions written on the account opening form.

The first part establishes the preference regarding the type of account tobe maintained. The various choices offered in this regard are:

Current Account

Saving/ PLS Account

Royal Profit Account

Term Deposit Account

Basic Banking Account

Current Account

The current account is the most common account and the most preferredamongst business concerns. There is no restriction on the amount ofwithdrawal. Current account enables the client to do cash transactions ina more efficient manner.

Features:-


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Current Accounts can be opened in the BAL with the sumnot less than Rs.10,00/-

No Profit

No deduction of Zakat

Account close

Date post:	04-Apr-2018
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Internship Report on Bank Alflah

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