ISLAMABAD

Department of Administrative sciences

Brought to you by:

Touqeer Ahmed Shahzad

Tas_alpha@yahoo.com

Implementaion Of Management Functions 1

 HISTORY OF BANK

The word 'Bank' is said to have been derived from the words Bancus or Banque or Bank.
This history of banking is traced to as early as 2000 B.C. The priests in Greece used to
keep money and valuables of the people in temples. These priests thus acted as financial
agents. The origin of banking is also traced to early goldsmiths. They used to keep strong
safes for storing the money and valuables of the people. The persons who had surplus
money found it safe and convenient of deposit their valuables with them. The first stage
in the development of modern banking, thus, was the accepting of deposits of cash from
those persons who had surplus money with them.

The goldsmiths used to issue receipts for the money deposited with them. These receipts
began to pass from hand to hand in settlement of transactions because people had
confidence in the integrity and solvency of goldsmiths. When it was found that these
receipts were fully accepted in payment of debts; then the receipts were drawn in such a
way that it entitled any holder to claim the specified amount of money from goldsmiths.
A depositor who is to make the payments may now get the money in cash from
goldsmiths or pay over the receipt to the creditor. These receipts were the earlier bank
notes. The second stage in the development of banking thus was the issue of bank notes.

The goldsmiths soon discovered that all the people who had deposited money with them
do not come to withdraw their funds

in cash. They found that only a few persons presented the receipts for encashment during
a given period of time. They also found that most of the money deposited with them was
lying idle. At the same time; they found that they were being constantly requested for
loan on good security. They thought it profitable to lend at least some of the money
deposited with them to the needy persons. This proved quite a profitable business for the_
goldsmiths. They instead of charging safe keeping charges from the depositors began to
give them interest on the money deposited with them. This was the third stage in the
development of banking.

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 WHAT IS BANK

• “Banker means a person transacting the business of accepting, for the purpose of
lending or investment, of deposits from the public, and withdrawal by cheques,
drafts, order of otherwise, and include any post office saving banks”.

• “Bank is a dealer of debt, his own and of other people.”

• “Commercial banks provide certain services for customers and in return receive
payments from them.”

• “A bank is a dealer in capital or dealer in money. He is an intermediary party

between the borrowers and lenders.”

Banks are of different types. The term “Commercial Banking” is a throwback of

commercial loan theory. The theory holds that the bank assets (except for cash) should
consist exclusively of commercial loans that are short-term loan to businesses to
financing the production and transportation of goods.
Among the services provided by the commercial banks, two services are very important;

• Accepting deposit
• Lending loans

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 HISTORY OF BANK ALFALAH

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 Company’s ordinance, 1962. The Bank is currently operating
through 104 branches in 36 cities, with the registered office at B.A.Building,
I.I.Chundrigar, Karachi. Since its inception, as the new identity of H.C.E.B 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. Strengthened with
the banking of the Abu Dhabi Group and driven by the strategic goals set out by its board
of management, the Bank has invested in revolutionary technology to have an extensive
range of products and services. This facilitates our commitment to a culture of
innovation and seeks out synergies with clients and service providers to ensure
uninterrupted services to its customers. They perceive the requirements of customers and
match them with quality products and service solutions. During the past five years, they
have emerged as one of the foremost financial institution in the region endeavoring to
meet the needs of tomorrow today
Since the inception of Bank Alfalah, by the grace of the Almighty, They have moved
rapidly in expanding their branch network and deposit base, along with making profitable
advances and increasing the range of products and services. They have made a break-
through in providing premier services at an affordable cost to our customers. Keeping in
view valued clients and the need for constant and effective communication of
information, As They pursues the path of excellence, and customer satisfaction remains
their priority. It is only when we know our customers better, can we deliver a higher
quality of services, thereby adding synergy to existing management expertise, financial
strength and profitability. This is yet another channel of communication for the delivery
of quality products and services that enhance value to bank’s stakeholders.

Implementaion Of Management Functions 4

 BRANCH NETWORK OF ALFALAH

The Bank is fully aware that the branch

network has direct implications on the
services that it provides to its customers.
They offer services through a network of
149 branches and 59 state of the art
ATM machines.

 Conventional Branches

 Islamic Banking Branches

 Overseas Branches

 ATM Machines

Implementaion Of Management Functions 5

 BOARD OF DIRECTORS

H.E. Sheikh Hamdan Bin Mubarak Al Nahayan

Chairman

Mr. Mohammad Saleem Akhtar Mr. Abdulla Nasser Hawalileel Al-Mansoori

Chief Executive Officer

Mr.Abdulla Khalil
Al Mutawa Mr. Ikram Ul-Majeed Sehgal

Mr.KhalidMana
Saeed Al Otaiba Mr. Nadeem Iqbal Sheikh

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 Vision

“To be the premier organization operating

locally and internationally that
provides the complete range of
financial services to all segments
under one roof.”

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 Mission

“To develop and deliver the most innovative

products, manage customer experience,
deliver quality service that contributes to
brand strength, establishes a competitive
advantage and enhance profitability, thus
providing value to the stakeholders of the
bank.”

Implementaion Of Management Functions 8

 SWOT ANALYSIS

Internal Factors
Strengths

• Strengths BAL-IBD is that Pakistan Credit Rating Agency Bank has been
awarded an AA-an A1+ (A one plus) in the long and short term respectively.
• Strength is shown from its ratios in most of the ratios it is better than others.
• Strength is that assets are increasing and the major asset cash and lending to
financial institutions are increasing which shows the strength.
• Earning to total assets is also improving from previous year and it is somewhat
different from others.
• BAL-IBD has strong online network system.
• The bank’s objectives and policies are well defined and are communicated to all
the concerned employees.
• BAL-IBD has a progressive and nurturing culture ensuring growth and
development of its employees
• One of the greatest strength of BAL-IBD is perhaps its employees who are very
hard working and leave no stone unturned in meeting deadlines or targets.
• BAL-IBD is showing progressive growth at a very fast pace.

Weaknesses
• As I have thoroughly study the Bank’s management and financial there is no such
major weak point but one point is that there liabilities are increasing from year to
year and in 2005 it become very high as compared to the previous year.
• Another is Bank is decreasing which in my opinion is a weak point.
• Equity to total assets is decreasing from previous year.
• Customers have to follow long lengthy procedure for opening of account as well
applying for debt, they use to ask most personalized details of a person which the

Implementaion Of Management Functions 9

 customer hesitate to give specially when the question is about their income
details.
• Many employees feel favoritism and nepotism prevalent in the Bank.
• Employees feel lack of transparency and effectiveness in the appraisal procedure.
External Factors
Opportunities
• As far as opportunities are concerned BAL-IBD is growing day by day and its
profits are increasing it has an opportunity to develop more branches to expand
the business.
• And there is acceptance of its services so Bank has to increase its services to meet
its customer’s needs.
• A comprehensive training program may be developed to up grade the core
banking skills of the existing staff as well as integrated high quality hiring.
Threats
• There is an increase in the debts of Bank so this can be a threat for the Bank and
they should look upon this.
• Another is that debt ratios are increasing due to increase in debts and other Major
threats BAL-IBD facing is from its competitor especially from denationalized
commercial banks, in which Faysal Bank and Askari Bank are at the top of the
list.

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 PRODUCTS & SERVICES

Alfalah-Islamic Banking has a dedicated team of banking professionals with a thorough

knowledge of Islamic Banking products and markets. Their aim is to contribute positively
to the development of Islamic Banking and Islamic Capital Markets by capitalizing on
Bank Alfalah’ S expertise in product innovation and customer service.
Alfalah Islamic Banking offers the largest product range available with any Islamic
Banking institution in Pakistan including, but is not limited to, Ijarah, Murabaha, Salam,
Istisnaa and Musharakah. All these
Products have been approved by the Bank’s Management and cleared by Centre for
Islamic Economics (CIE). Their best selling products are:

CORPORATE BANKING

• Letter of Guarantee.
• Murabaha.
• Corporate Ijarah.
• Consumer administration department.

Consumer Banking

• PLS Account
• Riba free Saving Accounts
• Riba free Term Certificates
• Saving Deposit Lockers

Implementaion Of Management Functions 11

Consumer Finance

• Current Account (Pak Rupees)

• Corporate Ijarah

• Home Musharakah

• Foreign Currency Account

E-BANKING

• Online Banking

• Phone Banking

• Internet Banking

• Training & Development

Implementaion Of Management Functions 12

 DEPARTMENTS OF BANK ALFALAH

Following departments operates in Bank Alfalah- IBD

• Account Opening Department.

• Cash Dealing Department.

• Clearing Department.

• Alfalah Murabaha Finance Department.

• Accounts Department.

• Alfalah Car Ijarah.

• Alfalah Home Musharakah Department.

• Trade Finance Department.

• Marketing Department

• MIS DEPARTMENT

Implementaion Of Management Functions 13

 Operation Department

Operation
Department

Customer service

Accounting
Remittances
Opening
Account Cash

SUPERVISING

Implementaion Of Management Functions 14

 ACCOUNT OPENING DEPARTMENT

The department that is responsible for opening and closing an account assumes immense
significance and holds a central place in the basic banking operations.

Type of account
• On the basis of nature of account
• On the basis of functionality
• On basis of currency

On the basis of nature

These accounts are further divided into two main categories, which are as follows:
• Saving accounts
• Current account

SAVING ACCOUNT
Saving accounts are those accounts in which the bank gives the customers profit on their
deposits. Bank also deducts Zakat on this account. For opening the saving account the
customer’s initial deposit must not be less than Rs. 5000.

CURRENT ACCOUNT
Current accounts are those accounts in which we give no profit to customer on their
deposits. Bank also deducts no Zakat on this account. For appending the current account
the customer’s initial deposit must not less then Rs.10, 000.

Implementaion Of Management Functions 15

On the basis of function
This account is also divided into three categories. These are as follows.

• Business Account
• Personal Account
• Club Society Account
Let us Explain them

• Business account

This account is related to the business community. This account is also further subdivided
into three categories.
• Sole proprietor account

• Partnership account
• Limited Company account

These have been been explained one by one

Sole Proprietorship / Individual

• NIC/ Passport photocopy

• Letter from Proprietor confirming “sole proprietorship”

• Partnership

• Partnership deed certified copy

• NIC photocopies of all partners.
• Partnership mandate for account signed by all the partners
• A letter duly signed by all the partners containing the operating
instructions of the account also has to be taken.

Limited Company

Copy of certificate of incorporation

• Memorandum of Association
• List of Director’s
• Copy of board resolution

Implementaion Of Management Functions 16

 • Certificate of Commencement of Business
• Copies of NIC of Director’s
• Latest copy of Form-29

• Personal Account
The accounts related to persons other than companied and partnership firms are called
personal accounts. These are further subdivided into three categories:
• Personal account
• Joint account

• Personal Account
Personal account is own by only one person and not more then this. This account can be
current or saving depending upon the will of the customer.
The documents required are
• Introduction of nay account holder of BAL or any other bank
• Copy of NIC

o Joint account
Joint accounts are those accounts that are owned by 2 or more persons. This account may
also be either saving or current depending on the customer’s will.
Documents required are
• Introduction of account holder of BAL or any other bank

• Copy of NIC of all the member of joint account.

Club/Society/Association

• Copy of rules/ by-laws

• Copy of registration (if applicable)
• List of Executive member management committee/management board etc
• Certified copy of Resolution.

Implementaion Of Management Functions 17

 Cash Dealing Department

This department of bank is mainly responsible for the handling of cash deposits
and encashment of cheques issued by the account holders. The following are the sections
of the cash dealing department

• Receipts of cash
• Encashment of cheques
• Cash receipt section

The depositor uses depositor slip/vouchers for depositing the amount. Client fills these
vouchers, fulfilling all requirements.

Encashment of cheques

Cheques encashment is made in four steps

• Receiving of cheques
• Verification of signatures
• Computer terminal process
• Payment of cash

Implementaion Of Management Functions 18

 CLEARING DEPARTMENT

One of the basic economic functions of banks is to receive deposits and to honor
cheques drawn upon them. So, cheques are a most commonly used instrument for making
payments by account holders.
Now the question arises that how these cheques & other negotiable instruments drawn on
one bank are deposited in other banks and money is transferred from one bank to another.
Clearing House has provided this facility. Clearing house facilitates different banks to get
their cheques drawn upon other banks to be cleared.
Cheques lodged in clearing constitute two types of clearing:

• Outward Clearing
• Inward Clearing

Outward Clearing
When cheques and other negotiable instruments drawn upon other banks like MCB, NBP
of the same city (as Gujranwala) are presented in Bank Alfalah Limited to deposit them
in the respective payee’s accounts, these instruments are lodged in outward clearing of
Bank Alfalah limited.
When the cheques are presented in BAL to be deposited in their respective payee’s
accounts, different stamps are put on cheques before their lodgment in outward clearing.

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 Accounts Department

It is probably the only department in the entire bank where there is almost no direct
customer dealing. Two types of accounts are there which are as follows:

Inter-Branch Accounts

Like other banks, Bank Alfalah Limited-IBD has a network of branches all over the
country. These branches in different cities are interlinked with each other through their
correspondent accounts in other branches.

So, all payments from one branch to another branch (in the same city or another) are
made by debiting and crediting these inter-branch accounts.

Inter-Bank Accounts

Like inter-branch accounts of a bank, different banks have correspondent accounts with
each other. Main branches of banks in a city maintain these inter-bank accounts.
So, money is transferred from one branch of a bank to another bank’s branch
through these inter-bank and inter-branch accounts.

The accounts department deals with various routine activities for the bank. The main
activities performed by it are:

• Budgeting
• Reporting
• Maintenance & depreciation of fixed assets
• Miscellaneous functions

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IMPLEMENTATION OF MANAGEMENT FUNCTIONS
 ALFALAH MURABAHA FINANCE DEPARTMENT

Murabaha finance is particular kind of sale where the seller (i.e. Bank) expressly
mentions the cost of the commodity it has incurred, and sells it to another person (i.e.
Customer) by adding some profit thereon. Thus Murabaha finance is not a loan given on
interest, it is a sale of commodity for cash/deferred price.
Under Murabaha finance facility, upon specific request of the customer, the BAL IBD
shall make available certain/requested amount of funds from pre approved
Limit for a specific period of time to time, up to the specific limit, according to the
business needs.
Presently, Murabaha finance is predominantly used mode of financing in the Islamic
banks having been approved by the State Bank of Pakistan and Sharia experts.
Murabaha finance transaction can either be a cash sale (Spot Murabaha) or a credit sale
(deferred payment Murabaha) or a combination of both; being essentially a sale and not a
loan, Murabaha should fulfill all the basic rules /principles necessary for a valid sale.
Basic rules / principles of Murabaha finance

The seller (Bank) must own the commodity before it sells it to the buyer (customer). The
commodity must come into the seller’s possession, whether physical or constructive, in
the sense that the commodity must be in seller’s risk (though for a short period).

Murabaha cannot be used as a mode of loaning expect where the customer needs funds to
actually purchase some tangible goods / commodities. This means that funds are needed
for other purposes, like paying the price of commodities already purchased by the
customer, or bills of electricity or other utilities, or for paying the salaries / wages,
Murabaha cannot be used.
Murabaha must be conditional. A conditional sale / Murabaha are invalid, unless the
condition is recognized as a part of the transaction according to the usage of trade. Once
the price is fixed in Murabaha, it cannot be decreased or increased later.
A Murabaha transaction must conform to all the rules / principles summarized below,
which should be strictly followed, while conducting Murabaha transactions.
• The subject of sale must exist at the time of sale. Thus any thing may not exist at
the time of sale cannot be sold and its non existence makes the contract void.
• The subject matter should be in the ownership of seller at the time of sale. If seller
sells something that is not acquired by it then the sale becomes void.
• The subject of sale must be in physical or constructive possession of seller when
sells it to a person. Constructive possession means a situation where the
possessors has not taken the physical delivery of the commodity yet it has come
into its control and all rights and liabilities of the commodity are passed on to the
seller including the risk of its destruction.

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IMPLEMENTATION OF MANAGEMENT FUNCTIONS
 • The must be instant and absolute. Thus a sale attributed to a future date or a sale
contingent on a future event is void.
• The subject matter should be a property having value. Thus a commodity having
no value cannot be sold or purchased.
• The subject should not be a thing / commodity used for an un Islamic purpose.
• The subject of sale must be specifically known and identified to the buyer.
• The delivery of the sold commodity to the buyer must be certain and should not
depend on a contingency or chance.
• The certainty of price is necessary condition for the validity of sale. If the price is
uncertain, the sale is void.
• Murabaha can only be affected on tangible goods / commodities; it cannot be used
for paying utility bills, wages, overhead expenses, etc.
• Sales price in Murabaha can never be increased or decreased, once the Murabaha
agreement is signed.

Credits department at developed branches of Bank Alfalah Limited-IBD is usually

segregated into
• Credit marketing
• Credit administration

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IMPLEMENTATION OF MANAGEMENT FUNCTIONS
 MANAGEMANT INFORMATION SYSTEM DEPARTMENT

A management information system is "A process that provides the information necessary
to manage an organization effectively. Management Information System (MIS) and the
information it generates are generally considered essential components of prudent and
reasonable business decisions." Management information systems comprise many
subsystems and are influenced by the organization's structure, activities, risk profile, and
technological capabilities.

MIS Department of Bank Alfalah facilitates the networking of the Bank at branch level as
well as at Head Office level. It provides help in managing IT Operations which the Bank
offers to its customers.

These IT Operations include are as follows:

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.

Electronic Bill Presentment & Payment (EBPP)

Electronic Bill Presentment & Payment (EBPP) is a form of electronic billing where a
company bills its customers and receives payment electronically over the Internet. As the
name also denotes, it addresses not only Bill Presentment, but also when applicable the
process model for consumer payments to business.

Mobile banking

Mobile banking (also known as M-Banking, SMS Banking etc.) is a term used for
performing balance checks, account transactions, payments etc. via a mobile device such
as a mobile phone. Mobile banking today is most often performed via SMS or the Mobile
Internet but can also use special programs called clients downloaded to the mobile
device.
SMS Alert is provided to the customer after the transaction is completed.

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IMPLEMENTATION OF MANAGEMENT FUNCTIONS
Telephone 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.

Mail
Mail is part of the postal system which itself is a system wherein written documents
typically enclosed in envelopes, and also small packages containing other matter, are
delivered to destinations around thecountry by the Bank Alfalah . This can be used to
deposit cheques and to send orders to the bank to pay money to third parties. Banks also
normally use mail to deliver periodic account statements to customers.

Automated teller machine (ATM)

Bank Alfalah through its commitment to provide superior and improved services to its
valued customers, has unveiled a nationwide network of ATMs. For customer
convenience, customers now have access to instantaneous cash availability, 24 hours a
day, 7 days a week.
ATM network of BAL is geared up to exploit the latest technology, and is equipped to
meet the highest standards of security and efficiency.
With new Hilal Card customers can now:
 Withdraw Cash Use our convenient, user-friendly fast cash option
 Make a Balance Inquiry
 Get an instant printout of account balances
 Get a printout of last transactions (Mini-statement) on the spot.
 Change PIN (Personal Identification Number).

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IMPLEMENTATION OF MANAGEMENT FUNCTIONS
Bank Alfalah is pleased to introduce 55 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.

Trade finance
Inspired by a challenging spirit and an unyielding desire to create a sound and reliable
networking of correspondent relationships, the bank has placed great emphasis towards it
growth. Accomplishing something for the first time requires a special focus. It demands
foreseeing possibilities. To do so, BANK ALFALAH successfully surmounted problems
and difficulties arising out of issues relating to weak economic conditions of the economy
and a continuous deteriorating status of country risk.
The incertitude and skepticism of the international banking community towards financial
institutions from emerging markets remained intact. BANK ALFALAH persistence
during the past four years allowed us to make significant inroads into the arena of
correspondent banking. Large international banks, after critically evaluating us, agreed to
enter into relationship.
During 2002 they added 81 banks to their network of correspondents, bringing the total
number over 170. Of these relationships, there are now several banks that rank amongst,
the top financial institutions in the world. Geographical coverage of BANK ALFALAH
now extends to over 100 countries, which is adequately compatible with trade flows.

TELEGRAPHIC TRANSFER

It is another mode of transfer of funds. It is quickest mode of transfer of funds from one
city to another. For TT, client has to submit the application on a prescribed form of the
bank. Client can deposit money in to the bank or can request the bank to deduct the
amount against the TT along with the charges against the issuance of TT from his
account. The charges against the issuance of TT charged by Bank Alfalah.

Call Center

Recently Bank Alfalah launched Call Center which is working at Karachi. Customers can
use toll free numbers to register any complain or any suggestion in the call center.
Statement about the account balance, online transactions etc are sent to the customers
through E-Mail.

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IMPLEMENTATION OF MANAGEMENT FUNCTIONS
Internet Banking
Online banking and other sources of internet banking are included in it.

Money Gram
Bank Alfalah limited, in collaboration with Money Gram, offers remittance service to
Pakistan. Money Gram is person-to-person money transfer service that allows consumers
to receive money in just a few minutes.

Security

Protection through single password authentication, is not considered secure enough for
personal online banking applications in some countries. Basically there exist two
different security methods for online banking.
The PIN/TAN system where the PIN represents a password, used for the login and TANs
representing one-time passwords to authenticate transactions. TANs can be distributed in
different ways, the most popular one is to send a list of TANs to the online banking user
by postal letter. The most secure way of using TANs is to generate them by need using a
security token. These token generated TANs depend on the time and a unique secret,
stored in the security token (this is called two-factor authentication or 2FA). Usually
online banking with PIN/TAN is done via a web browser using SSL secured connections,
so that there is no additional encryption needed.
Signature based online banking where all transactions are signed and encrypted digitally.
The Keys for the signature generation and encryption can be stored on smartcards or any
memory medium, depending on the concrete implementation.

Data Bases

A database is a structured collection of records or data that is stored in a computer

system. The structure is achieved by organizing the data according to a database model.
The model in most common use today is the relational model. Other models such as the
hierarchical model and the network model use a more explicit representation of
relationships

Bank Alfalah has distributed database. Distributed in the sense is that every branch has its
own data base server but overall domain is controlled by regional office that will be
separate for every domain (like Karachi, Lahore or Islamabad). It means every domain
region will have its separate data base from the other domain region and it will control
the data base at branch level as well. That’s why Bank Alfalah has distributed data base.

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IMPLEMENTATION OF MANAGEMENT FUNCTIONS
SQL Server is used for the data bases on backend operations while for the front-end
operations Bank Smart (Banking Information System) is used.

BANK SMART

The software which is used for the working of MIS Department is Bank Smart.
Bank Smart is basically Banking Information System. Its front end is made up using VB
(Visual Basic).
Bank Smart comprises of different modules. These modules include:

• Credit Module
• TDR Module (Term Deposit Receipts)
• HO Module (Head Office)
• Report Module
• Front Office
• Online Module
• Remittances

Front Office:
Front office module manages the transactions of cash, clearing and general transfer of
accounts in the branches.

Online Module:

Online Module manages the online cash and transfer transactions.

Remittances:

It manages the pay order, DD (Demand Draft) and TT (Telegraphic Transfer)

Credit Module:

Credit Module is used for managing the limits of loans and feeding of loans.

HO Module:

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IMPLEMENTATION OF MANAGEMENT FUNCTIONS
HO Module which is called as Head Office Module is used for managing the head office
operations and overall activities of head office.

Report Module:

Report Module manages the MIS report generation which is necessary for the system to
perform effectively and efficiently.

NETWORK ARCHITECTURE

Inside the branch office the network which is used is Local Area Network (LAN).
To connect the computers in LAN of Branch office, Switches of CISCO are being used.
And for remote connectivity, 2600 series Routers of CISCO company is being used
inside the network of bank. CISCO is an AMERICAN company which is manufacturing
the switches and routers.
Encrypter is used for security of data and to avoid data hacking between branch office
and regional office.

Network Specification
• In Bank Alfalah the network topology which is used is STAR TOPOLOGY.
• Telecommunication media which is used for networking is COAXIAL CABLE in
Bank Alfalah.
• Bank Alfalah is using DXX for remote connectivity as a primary source of
connectivity. And for the backup Bank uses BRI Line. The purpose of using BRI
Line is that whenever DXX network shut down due to any fault then all the load
transfers to BRI Line to ensure 24 Hours connectivity.

Bank Alfalah has BCP that if network fails (DXX) then the bank can use BRI Line and in
case there is a mishap of building then the bank can take a room of hotel on rent to
continue its transactions.

Operating Systems

For the networking, Bank Alfalah uses Windows 2000 Server where as at client end
Windows XP is being used. At central office in Karachi, updated version of windows
server 2003 is being used.
To increase the customer satisfaction, Bank Alfalah is planning to change its existing
software with a newer one called “Teminos Network Software”.

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 29
IMPLEMENTATION OF MANAGEMENT FUNCTIONS
 MANUAL VS ONLINE BANKING

Before online banking, the Bank worked manually with the help of IBCA which is the
abbreviation of Inter Branch Credit Advice. It is a paper work based network that works
through fax.

In manual system, when a transaction is done 4 entries through IBCA is passed i.e. 4
copies of IBCA is generated. 1 copy is kept at the branch office, 1 is sent to regional
office through fax and 2 copies are sent to the bank branch to which that transaction is
occurred. The bank branch which got 2 copies of IBCA, firstly complete the transaction
then kept 1 copy to its branch record and sent 1 copy to the regional office where these
two copies are getting tally and matched and after that the transaction is recorder in the
regional office record. It can be seen that it is a quite lengthy process.
In case of networking or online banking only 1 entry is done through the networking all
across the Pakistan.
The main advantage of online banking is that It reduces the time consumption of
completing 1 transaction. Definitely when time will reduce then customer will get more
satisfaction and will be happy with the services offered by the Bank.

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 CUSTOMER RELATIONSHIP MANAGEMENT

Bank Alfalah has lots of concern with its customers. The bank wants to satisfy its
customers and want to establish a long lasting relationship with its customers. For this
reason, Bank Alfalah has the following Customer Relationship Services.

• Complaint Management System

• Customer Experience Teams
• Performance Management System
• Key Performance Indicator (KPI)

Complaint Management System:

This system works with the help of call centers. Customers register their complaints
about services or any difficulty they are facing using the call center. Then call center
resolves the problem of the customer within 3 days.

Customer Experience Teams:

In this system, teams call the branch office employees as the customers of the Bank and
ask about certain services just to evaluate whether the employees know about the
products and services of the bank or not.

Performance Management System:

In this type of system CRO (Customer Relationship Officer) evaluates the performance of
the employees and implement certain changes within the branch office to improve the
customer relationship.

Key Performance Indicator (KPI):

It is a pre-designed MIS that checks online performance of employees and branch on the
basis of rating. Employees have to achieve 100% rating otherwise appraisal is necessary.

SME (Small Medium Enterprise)

In SME the main function is to provide the loan to the running businesses for corporate &
SME Clients.

It further includes the function of Equity Unlock.

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Equity Unlock:

Just as SME Equity Unlock provides the loans to the customers. The difference between
SME and Equity Unlock is that SME includes loans to the corporate & SME Clients
whereas in Equity Unlock loans are given to the consumers means it is lower level of
loans. Consumer loan department offer loans to the consumers on mortgage. These loans
include the loans other than SME.

Equity Unlock includes the following functions.

• Sales Assets
• Verification Department
• Backend Processors

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 CONCLUSION

We observed the bank Alfalah a financially sound bank. Its profits are increasingly year
by year. Its staff is very good and sincere with the bank. Bank Alfalah under the
leadership of Sheik Nahayan Mabarak Al-Nahayan has made significant progress in
building and strengthening both the corporate and retail banking sectors in Pakistan. The
bank attained number 2 positions in terms of its balance sheet size amongst the private
banks.

Bank Alfalah views specialization and service excellence as the cornerstone of its
strategy. The people at bank realize that innovation, creativity, reliability, customized,
services and their execution are they key ingredients for their future growth. Revenues
from these activities have started yielding dividends and they expect significant growth.

They are aware that they have stepped into the 21st century and they must meet its
challenges by acquiring the highest level of the technology. They will thus be
accelerating their technological advance to enable them to distribute their products and
services through most efficient and high tech means. They say that they will continue to
invest in the modern tools and substantial allocation to resources will be made to achieve
this objective during the current year. Phone Banking and credit card have been
introduced in many cities.

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 RECOMMENDATIONS/SUGGESTION

Bank Alfalah Limited is a well-known and successful financial institution in

the banking sector, it is said, nothing is perfect in the world, and there is
always space for deficiencies.

 Although the bank has a vast network of nationwide branches but it

should spread its branch network throughout the world especially in the
countries involved in international trade with Pakistan.

 In order to compete with the other banks. ATM services should be

excellent as we can see the growing competition among the banks.

 The bank should acquire the services of the highly qualified people
accompanied by lucrative incentives to promote its status as desirable in
the next millennium.

 In order to market its products it should accentuate to give

advertisements on both print and electronic media.

 The quality of human resource lies at the center of every

organization’s success and no doubt Bank Alfalah Limited is fully aware of
the importance of a satisfied and well-trained work force that gives
completive advantage but the problem which I have observed is that
employees of Daska Branch don’t have enough knowledge about their
products. So the policy of the bank should be to continually encourage its
employees for their knowledge enhancement about their products. The state

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of the art training and development center at Bank Alfalah should arrange
workshops and seminars for employees at every level to empower them
professionally.

 Bank Alfalah Limited operates as progressive and adaptive

organization maintaining dynamism and flexibility in all facets of its
operations but in this era of stiff competition it should consider to launch
new products to attract the customers.

 Their aim should remain to provide customers with value pricing and
to ensure that quality of their portfolio is never compromised despite
market pressures.

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