Escolar Documentos
Profissional Documentos
Cultura Documentos
INTERNSHIP REPORT ON
SUBMITTED TO:
SUBMITTED BY:
NAUMAN AHMAD
CIIT/FA09-MBA-114/LHR
SUBMISSION DATE:
06-10-2010.
Preface:
Banking sector owes a pivotal importance in the economy of any country though it’s
vibrant functions. This is the deep-seated motivator that geared up me to join any
bank for internship. Moreover, the practice and familiarity learned during this tenure
would also attest very helpful and alleviating in the awaiting proficient life. Making
analysis of financial statements is an important part of our MBA program. It is a
comprehensive, practical and extremely accessible presentation bout Bank Alflah
Limited. I have tried my best to present this report with full description.
Every effort is made to expose all the relevant concepts in this report. There is a
balance of clarity. My objective in making analysis this repot is to provide a
fundamental knowledge about the company. I hope, it serves a stock of knowledge
about the Bank Alflah Limited.
It is the requirement of the MBA course that al the student s of MBA have to spend
six or eight weeks in any organization to get practical exposure and get familiarized
wit the ways to live in the organizational environment which is dramatically different
from the educational enjoinment. That period is called ‘’Internship Period”
If spends properly and sincerely, enables the students to be more confident, more
knowledgeable, more responsible and more committed to its work in the practical
field. I have also assigned to do internship of six weeks period in Bank Alflah Limited
it has enabled me to understand the practical scenario and sharpen our decision
making power and utilizing the resources in an effective manner. So that our
resources could generate maximum profit.
In preparation of this report. I have putted all my best efforts and tried my level best
to give maximum knowledge. Despite of my all coherent efforts. I do believe that
there will be a room for improvements in the efforts of learner like me.
MY LOVING PARENTS,
RESPECTED TEACHERS,
&
DEAR FRIENDS
ACKNOWLEDGEMENTS
All praise & thanks go to Almighty ALLAH, the creator who is the entire source of
knowledge & wisdom endowed to mankind. Offer my thanks from the depth of my
soul to the last messenger Hazrat Muhammad (PBUH) , who is forever a torch of
guidance and knowledge of entire humanity.
I have also completed a report based on familiarity with my past studies in order to
get a bit familiar with practical experiences in the organization. By the grace of
ALLAH Almighty I have accomplished this report.
I am very thank to the Mr. Raheel Yaqub (Branch Manger) and his team especially
to Mr. Ahsan officer who provided me every kind of help during internship and in
preparing this report.
I am very grateful to my entire well – wisher for this support, love & sincerity. May
ALLAH give them reward in kind of His bless and love!
Table of content
Executive Summary 6
Introduction 8
Industry History and Background 10
History of Organization 12
Information about organization 13
Products and Services 14
Organizational structure & Department 18
Internship Experience 44
Internship Experience 44
Working Experience 45
Duties & Responsibilities 46
Accomplishment 46
Problems during Internship 47
Internal & External analysis 48
SWOT Analysis 48
Marketing Strategy 51
Competitive Strategy 53
Financial Analysis 54
Conclusion and Recommendation 57
Appendix 59
References 60
Executive Summary
For Bank Alfalah Limited, it has to compete in an industry that has grown in 2009 in
overall assets The major 5 competitors of Bank Alflah, pose close competition and
are mainly large nationally incorporated banks and a few international banks, that all
wants to become the leading bank of Pakistan, by creating some edge in the
industry. To create this edge, technology has played an important role in the industry
as banks are continuously trying to improve its products and services by introducing
innovative products.
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 Banque’, which mean a
bench. Other authorities hold the opinion that the word ‘Bank’ is derived from the
German word ‘Back’, which means ‘joint stock fund’. It is therefore, not possible to
decide as to which of the opinion is correct, for no record is available to ascertain the
validity of any of the opinions.
Banking in fact is primitive as human society, for ever since man came to realize the
importance of money as a medium of exchange; the necessity of a controlling or
regulating agency or institution was naturally felt. Perhaps it was the Babylonians
who developed banking system as early as 2000 BC. IT is evident that the temples
of Babylon were used as ‘Banks’ because of the prevalent respect and confidence in
the clergy.
At the time of independence, there were 631 offices of scheduled banks in Pakistan,
of which 487 were located in West Pakistan alone. As a new country without
resources it was very difficult for Pakistan to run its own banking system
immediately. Therefore, the expert committee recommended that the Reserve Bank
of India should continue to function in Pakistan until 30th September 1948, so that
problems of time and demand liability, coinage currencies, exchange etc. are settled
between India and Pakistan. The non-Muslims started transferring their funds and
accounts to India. By the end of June 1948 the number of officers of
Scheduled banks in Pakistan declined from 631 to 225. There were 19 foreign
banks with the status of small branch offices that were engaged solely in export of
crop from Pakistan, while there were only two Pakistani institutions, Habib Bank of
Pakistan and the Australian Bank. The customers of the bank are not satisfied with
the uncertain condition of banking. Similarly the Reserve Bank of India was not in the
favor of Govt. of Pakistan. The Govt. of Pakistan decided to establish a full-fledge
central bank. Consequently the Governor-general of Pakistan Quaid-e-Azam
inaugurated the State Bank of Pakistan on July 1, 1948. Thus a landmark was made
in the history of banking when the state bank of Pakistan assumed full control of
banking and currency in Pakistan. The banking structure in Pakistan comprises of
the following types,
Commercial banks have been the most effective mobilizes of savings and have been
providing short-term requirements of working capitals to trade, commerce and
industry.
Up to December 31, 1973, there were 14 Pakistan commercial banks that functioned
all over the country and in some foreign countries through a network of branches. All
these commercial banks were nationalized in January 1, 1974, and were recognized
and merged into the following five banks:
Bank Alfalah 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 bank is engaged in
commercial banking and related services as defined in the Banking companies
ordinance, 1962. The Bank is currently operating through above 301 branches in 95
cities, with the registered office at B.A. Building, I.I. Chundrigar Road, Karachi. Since
its inception, as the new identity of Habib Credit Exchange Bank (HCEB) after the
privatization in 1997, the management of the bank has implemented strategies
and policies to carve a distinct position for the bank in the market place.
The Bank has invested in revolutionary technology to have an extensive range of
products and services. This facilitates commitment to a culture of innovation and
seeks out synergies with client and service providers to ensure uninterrupted
services to it customers.
This facilitates our commitment culture of innovation and seeks out synergies with
clients and service providers to ensure uninterrupted services to its customers. We
perceive the requirements of our customers and match them with quality products
and service solutions. During the past five years, we have emerged as one of the
foremost financial institution in the region endeavoring to meet the needs of
tomorrow and today. The bank is listed on the Karachi and Lahore Stock Exchange
with a ticker name of “BAFL”.
Credit Rating
PACRA, a premier rating agency of the country, has rated the bank ‘AA’ (double A),
Entity Rating for long term and A1+ (A one plus) for the short term. These ratings
denote a very low expectation of credit risk, strong capacity for timely payment of
financial commitments in the long term and by highest capacity for timely repayment
in the short term, respectively. The ratings of first and second and third unsecured
listed and subordinated TFC issues of PKR 650 million, PKR 1,250 million and
Rs.1,325 million have been maintained at AA- (Double A minus).
Vision
The vision o Bank Alflah is to be the premier organization operating locally &
internationality that provides the complete range of financial services to all segments
under one roof.
Mission
The mission of the Bank Alflah is to develop & deliver the most innovative products,
manage customer experience, deliver quality services that contributes to brand
strength, establishes a competitive advantage and enhances profitability, thus
providing value to the stakeholders of the bank.
Values
Objectives
To please their customers by fulfilling the financial needs as best as possible, they
believe in placing the client at the center of business and all of the products and
service. For this the management has adopted the strategy of, caring for you …..Our
customer"
The objective of Bank Alflah is as follows:
To get maximum share of the market
To price the products optimally
To expand more the network of branches in several other cities of
Pakistan as well as in the countries of the world.
To reinforce a corporate culture that fosters learning, creativity and
flexibility.
Current Account
This account offers unlimited deposit and withdrawal facility to facilitate business
transactions. There is absolutely no limit on number of transactions, deposits, and
withdrawal.
Mudarbah Financing
Under this product the client and the Bank enter into a sale contract. The required
goods are first purchased by the bank and then sold to the customer for a specific
period and at an agreed Mudarbah price.
Money Gram
Money Gram provides the faster transfer of money from one country to other. It is the
easy and safe way to send money to the relatives. The charges is deducted from the
person who is sends the money.
Agriculture loans
The bank also offered agriculture loan this loan is used various purposes for the
development of agriculture sector. It provide loan for cultivation of land and
equipment for the development of this sector
SWIFT
The bank has also started replacing conventional telex messaging system for fund
transfer, L/C opening etc., by connecting on-line with the world wide interbank
Financial Telecommunication Network (SWIFT).
Car Financing
Rupees Travelers Cheque are as good as cash and are accepted at the major
shops, travel agents, hotels business establishments and all over the country and
abroad. This service is being offered to facilitate instant fund availability to travelers
and business people who used to carry a large sum of money with them.
Online Banking
Credit Cards
Bank Al-Falah Visa Card is everywhere and globally accepted and welcomed at
locations displaying the VISA logo. It is accepted at nearly 30 million merchants and
870,000 ATMs in more than 150 countries around the globe and over 10,000
establishments in Pakistan. Al-Falah VISA pays for shopping, travel, entertainment,
meals and much more. There are 3 major types of Al-Falah credit cards.
The bank offers 24 hours self service banking facilities to it customers on country
wide basis through deployment of Automated Teller Machine. This system allows the
banking facilities such as cash with drawls, cash deposits, and funds transfer,
balance inquiries, account statements. All ATMs are linked through a state-of-the-art
Satellite Based Communication System which offers 24 hours real time service.
Home Financing
Major features of Bank Alfalah Home Financing are Lowest Mark-up, Quick
Processing, Multiple Repayment Options and Free Valuation. It has been bifurcated
in terms of “Home Buyer, Home Construct, Home Improver, and Home Balance
Transfer Facility”.
Financing Limit : up to Rs. 10,000,000/-
Tenure : up to 20Years
Equity Participation : 30% Borrower / 70% Bank
Group Heads
Regional Managers
Area Managers
Hub Managers
Branch Managers
It’s a general hierarchy of bank which is showing about the main authorities of Bank
Alfalah Limited who are controlling its management in Pakistan. Bank’s management
is divided into different groups, regions and areas. Co-chairman is providing
supervision to group heads that are responsible for controlling the affairs of different
groups. After group heads in the hierarchy, there are regional, hub and area
managers who are managing and guiding the working of different branches of bank.
Board of Directors
The board of directors has the authority in guiding Bank affairs and in making
general policies. Some directors are the personnel of the Bank Alfalah Limited
follows.
The board audit committee is guiding in the affairs and in checking the policies made
by board of Directors. Some auditors are the personnel of Bank Alflah Limited.
Mr. Abdullah Nasser Hawalileel Al- Director
Mansoori
Mr. Khalid Mana Saeed Al ofaiba Director
Mr.Nadeem Iqbal Sheikh Director
Mr. Yasar Rashid Sectary
Department of BAL:
Agriculture Department
Clearing Department
Cash Department
Credit Administration Department
Human Resource Department
Profit& Loss saving accounts can be opened with a minimum balance requirement of
Rs. 5,000 and profit is credited on a half yearly basis. There are no restrictions on
the number of deposits and withdrawal made to and from the account and all
account holders receive a Hilal debit card as well. Profit and loss saving account
Basic Banking Account was introduced by banks on an order by the State Bank of
Pakistan and is current in nature. There is no minimum balance requirement for
BBA, however initial deposit must be Rs 1000. Maximum two withdrawals and
deposits are allowed by Cheque, while there is no restriction on ATM withdrawals.
Royal profit accounts are opened with a minimum balance requirement of Rs 50,000.
The basic aim of this account is that the higher the balance the higher the return, as
profit is credited on a monthly basis. The profit paid to account holders is as follows:
Profits paid on Royal Profit Account
Kifayat Account
Kifayat account is another saving account product that can be opened with a
minimum balance requirement of Rs 10,000, with a maximum limit of Rs 1 million.
Profit is calculated on a monthly basis, while it is credited on quarterly basis. Bank
Alfalah pays 7% pa interest on Kifayat Account.
Mahana Amdan account is Term Deposit Receipt (TDR) for three years that can be
opened with a minimum balance requirement of Rs 100,000, with a maximum limit of
Rs 15 million. Profits are paid at 10% pa, credited on a monthly basis. Other features
of this account include free personal accident insurance and automatic renewal for
another 3 years, after the expiry of original period.
Alfalah Education
Alfalah education is a one year TDR that can be purchased by people having school
going children’s. A person can purchase a unit for Rs 100.000, with a maximum of 3
years. This TDR pays 7%, paid at maturity and gives an additional advantage of
giving monthly school fee of the children’s if the breadwinner of the family dies.
Salaried Individuals
Self Employed
Copy of N.T.N certificate of the individual
A letterhead along with a rubber stamp for proof of business or any other
acceptable evidence for verifiable source
For sole proprietorship, letter from the proprietor confirming proprietorship
2) Company Accounts
In this case the following documents are required
Copies of NIC of Directors of the company
Certificate of incorporation of business
Certificate of commencement of business(in case of Public Limited Company)
Article and Memorandum of Association
Latest copy of Form-29
List of Directors
Copy of Board Resolution
3) Partnership
Attested copy of partnership deed duly certified by notary public and signed
by all parties of the firm
Attested copy of computerized N.I.C of all partners
Rubber stamp of all partners
Partnership mandate on the firm’s letterhead to operate the account
Attested copy of registration Certificate
Attested copy of N.T.N certificate
5) Trusts
1) Introduction:
The signature and account number of the account holder introducing the account to
the new person is obtained on the account opening form.
received for payment from the client, the signature on the Cheque is verified by
comparing it with S.S Card.
3) Requisition slip
A requisition slip for Cheque book is also given to the customer. The customer fills it
and gives it to the account opener.
5) Account Number:
When all the formalities are completed, an account number is allotted to the
customer and all the information is entered into the computer and register. Then that
account number is written on S.S Card and account opening form.
6) Depositing of amount in account:
The client deposit cash in the account. For this purpose cash pay-in-slip is used. The
minimum initial deposit is fixed for each account according to the nature of account.
For example for PLS / saving account the minimum requirement is Rs.5,000 only.
7) Issuance of a Cheque Book:
After opening an account with the bank, the account holder makes a request in the
name of the bank for the issuance of a Cheque book. Such a request is known as
Requisition Slip. BAL issues Cheque books of at least 25 leaves. When he used this
book completely then he can apply for another. This process takes a day because
the Cheque books comes from Karachi head office.
9) Filing of AOF:
Account opening forms are basic documents of the contract therefore these are filed
in numerical order and kept for reference.
Vernacular Form
This form is used when some person wants to sign in any language other than
English.
Closing of accounts
The procedure of closing of account is as follows.
First of all the customer gives the request to close the account.
Accounts Department
Every transaction which takes place recorded in the computer so all transactions
in different departments are forwarded to account department. Since all vouchers
from different departments are forwarded to current department so this department
tallies all such transactions with current department after maintaining the ledger of
each department. Following are different functions performed by this department:
Budgeting
Reports
Funds management
Activity checking
Reconciliation
Foreign exchange, old Account Contracts
Maintenance of fixed assets and calculation of their depreciation
Test Keys
Budgeting
The main task performed by the accounting department is the preparation of the
budget. Budget is based on forecasting and their own inspiration for future, whereas
forecasting is based on past performance. This is one important task on the basis of
which funds are allocated to various branches and also the targets are determined.
The targets determined Deposits, Advances, and revenues. Every branch prepares
its own budget for the fiscal year and then budgets of all the branches across the
country are consolidated at the head office in Karachi. In this way a consolidated
budget is also prepared.
Fiscal year of the bank starts from January to December. Accounting department
starts preparing the budget from October for the next year.
Before the preparation of budget the bank reviews its sources and funds it has and
the uses of those sources.
The revenue target is fixed keeping in view the past performance. The cost of
generating these revenues is also estimated. Then budget of each branch is
submitted to head office for modifications and for approval. After the modification and
approval the budget for a specific branch is being set by the head office. Monthly
budget meeting is held to analyze the monthly performance by all the branch
mangers with head office. The actual performance is compared with the estimated
and variance is calculated.
Reports
In Bank Alfalah many types of reports are being prepared. These are daily, weekly,
monthly, semiannual and annual reports. These are generated from the main frame
and are used for proper analysis. The following reports are generated daily from the
main frame which are being used by the accounts department for the preparation of
their own reports:
Statement of affairs:
It includes information about assets, liabilities and their balance. Daily position of
deposit and advances are also calculated in this report.
Subsidiary Statement:
This is a detailed report which includes all the information regarding the statement of
affairs.
Now following are the reports, which are being prepared with the help of the above
reports:
Statement of affairs:
This report includes assets and liabilities. Two copies of this report are made daily,
one is sent to the area office and one to the head office for analysis but the format is
different for both of them. Statement of Affairs also prepared at the weekend for the
whole week as well as at the end of a month.
Funds Management
Every bank in Pakistan has an account with State bank of Pakistan and has to
maintain 5% of the total deposit in the account with the State bank. Funds
management is done only through the main branch. If the bank has so many
branches in a single city then only the main branch is responsible for the funds
management. Daily a report was prepared and reported to State bank.
The important factors that affect the report are as follows:
Total Deposit (of all branches in a single city)
Opening Balance (closing balance of the previous day)
Inward Clearing
Outward clearing
Cheque issued by State Bank
Cheque Deposited
After all the calculations, a result is obtained which signifies the cash in hand of the
respective day. If the cash in hand is sufficient to fulfill the needs of the State Bank,
well and good other wise if the cash is not sufficient then the other options are
considered.
In case of shortage of funds, the main branch has the following options, which it can
adopt.
Therefore we first have to confirm head office that whether or not it is sending TT to
another branch of bank Alfalah. If the head office sends us the TT then it cannot
send any other TT to another branch of Bank Alfalah without charges. The charges
are also not negligible for example the charges of TT for an amount of one hundred
million is above 60,000. For this specific reason the TT is not encouraged.
Activity Checking
Activity checking is the process of the entire banking, which has taken place. A
report known as activity report is prepared on daily basis. The report specifies every
vouchering, which has taken place. Sorting is made according to the mainframe-
generated report. All the vouchers are checked that whether they are properly
posted or is there any transaction left to be posted. This checking makes the working
of the bank more efficient and avoids any loopholes.
Reconciliation
BAL prepares its reconciliation statements with
Head Office
State Bank of Pakistan
Building 2.5%
Furniture 10%
Carpets & curtains 25%
Equipment 20%
Test Keys
Test is a coding system used to authenticate money transactions between banks.
Whenever money is transferred through TT, the concerned officer requests the
accounting department to apply test to the message. The test is applied to the
message; three copies of this message are prepared. One goes to the test key
department, one to the Telex/fax operator and the third one goes to the department
record. When the TT is received at the other end, this test is verified. The transaction
will be carried out if and only if the test matches with their own test.
Banks have arrangement with other banks with which they have quite a large volume
of business and it is beneficial to have a direct arrangement with these banks. This
test arrangement can be with banks within country and outside country. For example
BAL has test arrangements with ABN Amro N.Y, American express N.Y, Citibank
N.Y, etc. When this arrangement is carried out a test key is provided to the
concerned bank, which contains codes. This test key is different for every bank. This
test key is also different for inward and outward TT.
In local transfer double coding is used and in foreign transfer single coding is used.
Test key tables are to arrive at the code. Separate key table are used for different
banks. Twelve branches of BAL have arrangement for local transfer and three
branches are authorized for foreign transfer. Four things should be carefully checked
because code is based on four things:
Branch name
Currency
Date
Amount
Test can be applied on nil amounts. The purpose is to just secure the transaction.
Another important significance of test is agency arrangement, which bank built with
other banks. Inquiries originated by any bank regarding the delay of any message
are also solved by the bank. They will check the message and will respond to the
query.
IMPORT
Import Department of BAL deals with the import of merchandise. Import can be
defined as:
“The bringing of commodities into Pakistan from outside by sea, land or air.”
Requirement for the Importer
These requirement / document must be fulfilled from importer before doing the
import:-
NTN (National Tax Number) certificate
Sale Registration Certificate
Membership from Chamber Of Commerce
Questionnaire duly filled in
NIC (attested copy)
Exports
Exports are major sources of earning foreign exchange and play an important role in
the economic development of the country. It helps to utilize excess resources of the
country.
“Exports mean selling goods to another country.”
These requirement / document must be fulfilled from exporter before doing the
export:-
to Bank Alfalah Limited. A bank that receives the L/C is called an advising bank
because after receiving the L/C, it performs the L/C advising function. A cover letter
is prepared and is sent to the beneficiary of the L/C, advising him his L/C has
reached Bank Alfalah Limited and he should collect it immediately. A copy of the L/C
is sent along with the letter.
ISSUANCE OF E-FORMS
Government has provided facility to exporter in taking E-Form from any bank and is
a part of the exchange control mechanism of the State Bank of Pakistan. When an
exporter receives an L/C, his next job is to get an E-form from an authorized Bank.
On the E-form sent by the commercial bank following things are mentioned
Description of the commodity
Quantity of the commodity exported
Amount realized
Foreign bank charges
Country of the importer
After filling in the complete information about the goods to be exported, the exporter
brings the E-form to the bank for verification. Bank issues E-form certification to
exporter and he submits it to the custom officer along with E-form certification to
certify E-form.
Documents
After getting the E-form verified the exporter starts preparing his shipment. Banks
only deal in documents. In order to receive payment from his goods the exporter has
to send certain documents to the issuing bank via his negotiating bank. These
documents are.
Bill of exchange
Commercial Invoice
The exporter prepares it. Its amount must tally with that of the L/C. It shows the
name and address of the importer as well as the invoice number. This number is
very significant as it is used in all the correspondence between the exporter and his
bank. It also contains all the specifications of the commodity being exported. The
standard definition of commercial invoice is that it is an itemized list of goods shipped
to a buyer, stating quantities, prices, and shipping charges.
Bill Of Lading
The shipping company or the airline that has been assigned the task of transporting
the goods issues these. The shipper must ensure that the goods are shipped and
handed over the right person when documents are presented to him. The standard
definition of a bill of lading is contract between the seller of the goods and the carrier.
The exporter prepares these lists in order to show that the consignment is according
to the order of the buyer. It gives a detailed account of the manner in which the
goods have been packed and the number of cartons they have been packed in.
Certificate of Origin
This document certifies the origin of the exported goods. In the case of exports from
Pakistan, the certificate of origin shows that the country of origin of the goods is
Pakistan. The certificate of origin is a document in which the exporter certifies to the
place of origin of the goods to be exported.
E-Form
It is a necessity for all exports out of Pakistan. All commercial banks always issue
the E-form in quadruplicate.
Original: is sent to the custom officer
Duplicate: Bank receive the duplicate
Triplicate: is sent to the State Bank Of Pakistan
Export Visa
Exporters bank sends all the documents negotiated in LC to importers bank. Once
the shipment arrives in importing country, documents are kept with the bank until the
importer makes full payment to bank.
COLLECTION / NEGOTIATION:
When the exporter comes to the bank with the documents, he has two options.
Send them for collection
Get Them negotiated
Collection
The bank sends the documents on behalf of the exporter to the importer’s bank for
payment. The payment is made in Pak Rupees and the exchange rate is the Buying
rate of the day normally called the T.T. Clean Buying Rate. When the reimbursing
bank is to pay Bank Alfalah Limited it credits its nostro account maintained with it
(the reimbursing bank), and afterwards bank debits the exporter’s account with the
local equivalent of the export proceeds calculated at the TT clean buying rate.
Negotiation
The bank purchases the documents from the exporter i.e. the exporter gets them
discounted before their maturity. For example, the drafts are at 90 days from B/L
date. In simple words, the payment for the exports would be received after three
months. The exporter might not want to block his funds for such a long time. He can
get his documents negotiated the day he presents them to the bank. The exchange
rate he will get will however be lower than the TT clean buying rate because the
bank is paying him an amount that it is going to receive after three months itself.
Contracts are not negotiated however in any case. This is because they are unsafe
documents and the bank does not take the risk.
Dispatch
The documents brought by the exporter are in the form of sets containing an original
and a number of copies. The number of each document required by the importer is
mentioned on the credit. Usually they are:
Filing
A separate file is maintained in each case and if the documents have been
negotiated, it is titled FDBP that is the abbreviation of Foreign Documentary Bills
Purchased. If the documents have been sent for collection, a file in the similar
fashion is kept but it is labeled FDBC i.e. Foreign Documents Sent For Collection.
CONTRACT
The exporter might export the goods based on a CONTRACT with the importer. In
such a case, there is no surety to the exporter that the importer will make the
payment. The importer might reject the goods on receipt and deny and payment to
the exporter. Therefore, the contract is an unsafe document. There are two types of
contracts.
The documents are sent to the issuing bank. The issuing bank informs the importer
that his documents have arrived. The importer deposits the amount of the contract
with the bank and takes possession of his documents have arrived. The issuing bank
then makes the payment to the exporter’s bank.
DA (Documents Acceptance):
Drawee takes documents and possession from the issuing bank and signs a bill of
exchange in return giving his acceptance for payment on a specific maturity date.
Now, if he does not make the payment to the issuing bank no payment is made to
the exporter and there is no liability on either bank.
Clearing Department
Banks collect Cheque for their customers that are drawn on other banks. This
function of clearing its customers’ Cheque by a bank is performed for settling
payments through the clearing houses in the State Bank of Pakistan. In cities with no
SBP coverage, the clearing is than supervised by National Bank of Pakistan. BAL
also provides a facility of clearing.
Types of Clearing are follows
Inward Clearing
Outward Clearing
Cash Department
Cash department of Bank Alfalah works under the operations 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.
Cash receipts
Cash payments
Funded facilities
These are the facilities in which there is direct involvement of cash fund. Following
are the funded facilities.
Current finance “CF”
Term finance “TF”
Finance against foreign bills “FAFB”
Finance against packing and credit “FAPC”
Finance against imported merchandise “FIM”
Finance against trust receipt “FATR”
Non Funded facilities
The facilities where there is no direct involvement of banks fund. There are two types
of unfunded credit line facility, which are as follows:
Letter of Credit (LC)
Letter of Guarantee (LG)
Internship experience
I did my internship at Bank Alflah, New garden town Lahore branch for a total
duration of seven weeks and the departments that I have worked during that time are
as follows:
Customer Service
Clearing and remittances
Accounts and finance
Account opening
First day, I reported to the manger of the branch who gave me brief introduction
about the management and working of the branch, he also check my knowledge
about banking by taking a short interview. Then he introduced me with employees.
Total ten employees are working with one manger. Security system is very strict,
hidden cameras are there. Branch environment is very good.
1st I worked with Madam Sadia. I learned about KYC ( knowing your customer). In
this department I learned about customers behaviour, and for why he is opening A/C.
2nd I worked in account opening Department with Ahsan Ali. I learned how to fill
current and saving deposit slips, how to fill account opening form, KYC (know your
customers) forms, How to update accounts on daily basis, what are the requirements
of account opening what type of document are required. What types of account Bank
Alflah is offering to the customers. I have learnt the procedure that an account
opening officer has to follow in order to open and maintain an account. Some of the
major deposit account opened by bank Alflah was as follows
Alflah Education
Profit & loss saving Account
Basic Banking Account
Royal Profit Account
Kifayat Account
Mahana Amdan Account
Current Account
If customer wants to close the account then he has to given written application to
head of the Operation Department. After verifies the signature the account will be
close. The Charges fee is Rs.150.
I also learned the procedure of issuance of Cheque book. When the Cheque book is
issued then the signature of customer is taken on the Cheque book issuance
register. Stock of Cheque books are balanced at the end of each day and kept under
safe custody.
3rd I worked with account officer Mr. Nosheen in Account Department. I have learned
all the transactions in different departments are forwarded to account department.
Since all vouchers from different departments are forwarded to current department
so this department tallies all such transactions with current department after
maintaining the ledger of each department. I have learned how to make the budget
which depends on the forecasting of person. Daily, weekly, Quarterly, Semi annually,
annually reports are made that describes the proper analysis of branch. BAL
prepares its reconciliation statements. All the debit and credit entries of the main
office account are recorded in the statement. Then it is checked with physical
vouchers and if there is any problem, they reconcile it.
Account department maintains the record of fixed assets. The accounts department
calculates the depreciation the assets by using straight line method
Depreciation is charged at the following rates:
Building 2.5%
Furniture 10%
Carpets & curtains 25%
Equipment 20%
Accomplishment
The main purpose of internship is to get a practical experience in the market and to
get some practical knowledge. Usually the period of internship is short but we can
learn a lot from this period. First time in my life when I was doing some reasonable
practical tasks.
I learnt how to implement my MBA knowledge on this job. I learnt what the
practical implementation of the book knowledge is
It was first time in my life to work whole day in the company with full
responsibility, to go in time and to off in time.
I learnt from this short period of job is punctuality.
The other thing is dressing, professional dressing matters a lot. By seeing my
senior and collogues I start to copy them in dressing.
It was a big achievement for me, that I learn how to do the work in team and
group of people. Working in team should be learnt.
Problems
For any job skills and abilities are acquired to perform the job but in case to perform
professional task then man should perfect and have a lot of skills to perform any type
of task. But during the internship I faced some problems
There is no proper way to give proper training to internee.
Lack of skill with dealing with different type of customers
Difficult to perform work in excel because major work is done on excel.
Operate different type of computer program especially in software.
Acquired the skill of communication & other professional skill.
Lack of Knowledge how to face problems encountered.
SWOT Analysis
SWOT is stands for strengths, weaknesses, opportunities and threats. SWOT
analysis is a careful evaluation of an organization’s internal strengths and
weaknesses as well as its environmental opportunities and threats. In SWOT
analysis the best strategies accomplish an organization’s mission by exploiting an
organization’s opportunities and strengths while neutralizing its threats and avoiding
its weakness. During my internship I also observe these factors of bank and made a
conclusion which is as follows
Strengths
Being the private organization its main aim is not to earn profit but also to
satisfy its customers and slogan of BAL is also the representative of this
purpose as Bank Alfalah “The Caring Bank”.
Bank has AA (Double A) and A1+ (A one plus) Credit Rating for long term and
short term loans respectively.
Main source of profit for any financial institution is public saving which only
comes from public confidence and BAL is getting this confidence which is one
of the main strengths of bank
Bank Alfalah is also getting fame in the market due to its name “ALFALAH”
which is leaving the Islamic and favorable impact on the minds of public.
BAL is providing the facility of Money Gram to its entire people who are its
customer or not and through this service it has got the leadership in Money
Gram because any other bank is not offering this service.
With in very short period it has got a superb accomplishment which shows the
competency of top management.
Personnel of Alfalah are well trained and highly skilled.
Weaknesses
Beside all these strengths I also noted some weaknesses in the operations of bank
Alfalah which are described below:
Bank Alfalah is charging online charges for transfer of money but some other
banks not charge online transfer charges.
Majority of the workforce consists of young professional, they lack in their
experience. And sometimes lack of experience becomes a hurdle while
serving to the customers. It is the point where they feel difficulty while
competing with the other banks.
It was observed that at present the motivation level of the employees is not
very much.
No job rotation for employees..
BAL’s lending procedure is quite complicated that some people hesitate to
come as they are requiring a huge file of documents.
Bank Alfalah is not offering any credit facility for students.
Opportunities
Threats
Threats are the negative trends in external environmental factors. As on one side
environment provides opportunities to one organization, on the other hand it also has
to face some threats. Bank Alfalah also has to face this situation.
The conventional banks those having high growth rate and high market share
are always being a threat
There is an average not low turnover rate, mainly because of low incentives
as compared to the other banks.
Large business parties have fewer attractions in being a client of BAL-IBD,
mainly because of excessive amount of documentation
Other foreign financial institutions like City Bank, Standard Charted etc also
having strong banking policies and there’s a chance that people might move
toward these financial institutions to secure their investments, transactions
and related services.
Marketing Strategy
Electronic media
The major way in which today’s organizations promote its products and services is
through television, not only because it’s economical but also because the visual and
audio aids help in promoting its product.
Television ads for Bank Alfalah mainly try to emphasis the ‘The Caring Bank’,
message in its advertisements, by showing how its services can help you with the
different financial problems that you face in your every day life. For example, an
advertisement showed how Bank Alfalah Credit Cards helped a couple when they
had no cash left during a shopping trip or how a father happily shows his family a
new car that he had financed from Bank Alfalah.
Another major way in which Bank Alfalah advertises its products electronically is
through its website, which is designed in an effective manner with detailed
information, so that visitors can effectively know about the different services that the
bank provides.
Print media
Print advertisements are another major way in which Bank Alfalah advertises its
product to the masses. Print media advertisements are mainly printed in major
English and Urdu newspapers across Pakistan.
The messages of these advertisements are mainly of new financial services that the
bank may introduce over time.
Sponsorships
Bank Alfalah also gives a significant consideration not only to its product publicity but
also to the creation of public relations. Bank has proves its public goodwill by
contributing money and time to public service and activities. Bank Alfalah has been
sponsoring different sporting tournament, especially cricket which is the most
popular sports activity of Pakistanis and is watched by millions whenever there is a
tournament featuring the Pakistani cricket team and is thus a great way to advertise
their products. Some of the tournaments that Bank Alfalah has sponsored over the
year are as follows:
Now days, BAFL is sponsoring the cricket rankings updates on Ten Sports.
But due to terrorism no series is held in Pakistan from previous three years. Now the
BAL focuses on the domestic series sponsorship.
Competitive Strategy
Despite notable economic uncertainties, the financial strength of Bank Alfalah
Limited has greatly enhanced during the previous years. The successful expansion
program proved their capability and commitment in comparison with the competition
in the financial sector. The Banking structure in Pakistan comprises of:
Central Bank
Commercial Banks
Investment Banks
Development finance Institutions (DFIs)
Specialized Banks
Foreign Banks
Bank Alfalah is a private commercial bank so the major competitors of Bank Alfalah
are the following:
Muslim Commercial Bank
Union Bank Ltd
Soneri Bank Ltd
Prime Commercial bank
The bank of Punjab
Bolan Bank Ltd
Bank Al-Habib Ltd
ABL
Faysal Bank Ltd
Platinum Bank Ltd
Ratio Analysis
Ratio analysis is an important and age-old technique of financial analysis. Ratios are
important and helpful in the reference that:
These simplify the comprehension of financial statement and tell the whole
story of changes in the financial conditions of the business.
These provide data for inter-firm comparison. The ratios highlight the factors
associated with successful and unsuccessful firms, also reveal strong and
weak firms.
These help in investment decision in case of investor and lending decision in
case of Bankers etc.
1. CURRENT RATIO
Rs.(000)
Rs.(000) 2009 2008
Current assets 57778651 39115635
Financial position of BAL is strong in 2009 as compare to 2008. This ratio tells us
about short term solvency of the organization
Current ratio is showing better trend in 2009. Cash balance is increasing in 2009 as
compare to 2008.
2. CASH RATIO
Rs.(000
Cash ratio also describes the better condition for the bank. If the cash ratio increases
it is better for the bank. It shows the financial condition of the bank.
3. DEBT RATIO
Debt Ratio describes the firm’s debt position as well as its liabilities. it also describe
the level of financial risk. If the ratio is high then it is negative sign for bank. The ratio
is decrease slightly but it is not good for bank overall.
4. WORKING CAPITAL
Rs. (000)
= Current assets – current liabilities
5. RETURN ON EQUITY
Rs.(000)
Rs.(000) 2009 2008
N.P.A.T X 100 897035 X 100 1301301X100
Return on equity describes the shareholder earned on their investment in any firm. it
also describe the profitability of the company. Return on equity in 2009 reaches in
lowest position as compared to previous year.
Conclusion
At present there is no such organization in the world that is free from problem and
challenges. Every concern has to strive and struggle a lot to be more profitable and
to get more competitive edge.
It has been eighteen years since the establishment of Bank Alfalah, and since its
establishment it has aimed to become the leading bank of Pakistan by that provides
outstanding services to its customers. The bank has seen phenomenal growth in the
past few years by opening more branches in the country, increasing the deposit
base, while also increasing the assets and profits of the bank. The services that
Bank Alfalah provides have a great market penetration not only because of their
features but also the profit and markup rates that they charge. The management of
BAFL is taking strategic steps to enable the bank to emerge as a strong and
progressive institution. It is continuing to make efforts to refine its products and
operations to make them more compatible. New deposit schemes have been
introduced and an action plan to maintain revenue growth in future. As the business
and economic conditions remain uncertain, BAL continues to develop the new
products like it has been doing in past.
Recommendations
After doing internship of six weeks in Bank Alfalah Limited, I would like to give some
recommendations to count over some problems.
Bank should prefer to promote worker on the basis of their talent and avoid
going for personal like and dislikes. It can be harmful for the organization in
the long run.
In Bank Alfalah, there is misdistribution of work; some people are over
burdened with the work. So I suggest that there should be fair distribution of
work in all the departments.
Bank Alfalah is only dealing in Money Gram; it should also starting providing
the service of other money transfer lines like Western Union.
BAL should provide loan to students at low mark up rate and easy terms &
conditions.
Bank Alfalah Limited needs to use more marketing channels such as radio to
make the public aware of its products and services. In the presence of intense
competition Bank Alfalah Limited has to realize the importance of marketing.
There are no incentive schemes for employees of Bank Alfalah like
scholarship schemes for employees that want to pursue higher education.
Bank Alfalah although gives a number of incentives to its employees, like
personal loans at nominal markup but they are only provided to employees
that are in higher ranks.
Education fees are also returned by Bank Alfalah to its employees, after the
have finished their studies.
Bank Alfalah Ltd should continuous to expand its business, by increasing its
deposit portfolio through aggressive market penetration strategies.
APPENDIX
References:
www.bankalfalah.com
www.world313.com/pakistan_bank_alfalah.html
www.google.com