Final MBA Project On Alfalah Bank

FINAL PROJECT ON
BANK ALFALAH LIMITED
Submitted By:
RAJA FAHEEM ANWAR

Department of Business
Administration
College of Information Technology,

Lahore
2003-2006
FINAL PROJECT ON
BANK AL-FALAH
By
Faheem Janjua
A Project submitted in partial fulfillment of the
requirements for the Degree Program
BBA(Hons) (Bachelor in Business Administration)
AL-KHAIR
University of Azad Jammu & Kashmir
Affiliated Campus C.I.T.5/68 Usman Block New Garden Town Lahore
2003-2006
Approved by
Mr. Javed Warraich

Principle College Of Information
Technology
ACKNOWLEDGMENT
I HAVE NO WORDS TO EXPRESS OUR DEEPEST SOURCE OF GRATITUDE TO
ALMIGHTY, COMPASSIONATE, SUPREME ALLAH, WHO ENABLE ME TO
COMPLETE THIS PROJECT WORK. I FIRMLY BELIEVE THAT GOD NEVER
SPOILS ANY EFFORT. EVERY PIECE OF WORK IS REWARDED ACCORDING TO
THE NATURE AND DEGREE OF DEVOTION FOR IT. I OFFER MY HUMBLEST
WORDS OF THANKS TO HIS HOLY PROPHET (PEACE BE UPON HIM) WHO IS
FOREVER SOURCE OF GRATITUDE.
ORDINARY WORDS OF GRATITUDE ARE NOT ENOUGH TO ACKNOWLEDGE
THE LOVE AND GUIDANCE PROVIDED BY MY FAMILY MEMBERS,
ESPECIALLY BY MY PARENTS. THEIR LOVE AND PRAYERS ENABLE ME TO
COMPLETE OUR WORK.
I ALSO EXPRESS MY GRATITUDE TO MRS. BINA SAAD (PROJECT DIRECTOR),
MISS KANWAL FAYAZ (HEAD OF EXAMINATION DEPARTMENT), AND
ESPECIALLY MY BEST FRIEND MR. IMRAN KHURSHID FOR THEIR GREAT
COOPERATION FOR COMPLETION OF WORK AND PROJECT REPORT.
I AM VERY THANKFUL TO PROFESSOR MR. JAVED WARRAICH (PRINCIPLE
C.I.T LAHORE).WHO HELPED ME THROUGHOUT IN DEVELOPMENT AND
ADVICE ME IN EVERY PORTION OF THE PROJECT.
I WISH TO ACKNOWLEDGE THE ADVICE, HELP AND ENCOURAGEMENT
GIVEN TO ME BY MR. RAJA TAHIR MAHMOOD (EXECUTIVE DIRECTOR LINE
CRAFT, LAHORE, MISS SADIA NOREEN ANWAR (FIELD EXECUTIVE AC
NIELSEN PAKISTAN), MR. ASAD IMRAN JANJUA (FINANCE DEPARTMENT
BEACONHOUSE SCHOOL SYSTEM), AND MR. FAISAL HAYAT ADVOCATE
(BANDIAL & ASSOCIATES).
I AM GRATEFUL TO MY I.T. FACULTY FOR PROVIDING A NICE CHANCE TO
WORK IN SUCH KIND OF ENVIRONMENT AND FOR HIS GUIDANCE AND
HELP FOR ME.
I AM AGAIN VERY THANKFUL TO MR. JAVED WARRAICH (PRINCIPLE CIT
LAHORE) FOR HIS GREAT HELP AND VALUABLE TIME HE SPENT WITH ME.
REST PRAISE IS AGAIN TO ALMIGHTY ALLAH, BLESSINGS AND AFFECTIONS
OF WHOM THIS WORK IS FINISHED. WE ARE PRAYERFUL TO MY PARENTS,
TEACHERS, BROTHERS, SISTERS FOR THEIR LONG LIFE. WE ARE
PRAYERFUL TO ALL MY FRIENDS FOR THEIR SUCCESSFUL FUTURE WITH
HOPE THAT WE WILL NOT FORGET EACH OTHER.
_______________________
Group Members
may not spare them to
Scope of Study
The scope of study at of the motion is limited only to the
preparation of the final project about Al-Falah. But by
searching on net and books and benevolent help of my
colleagues and staff of Bank Al-Falah Pakistan. I am able to
complete this project and most of all by visiting various web
sites, banking policies and by comparing bank Al-Falah with
other institutes. I am able to make this project well and these
methods are helpful for me.
College of Information Technology
Al-Khair University
5
/68 Usman Block New Garden Town
IN THE NAME OF ALLAH THE

MOST GRACIOUS AND MOST
MERCIFUL
Faheem Janjua
To
All mighty Allah
IN THE NAME OF ALLAH SUBHANAHU,

THE MOST GRACIOUS THE MOST
MERCIFUL
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TABLE OF CONTENTS
..................................................................................................................................................................... 7
IN THE NAME OF ALLAH SUBHANAHU, THE MOST GRACIOUS THE MOST MERCIFUL 7
TABLE OF CONTENTS...........................................................................................................................7
SECTION ONE.........................................................................................................................................7
INTRODUCTION.....................................................................................................................................7
CHAPTER ONE: INTRODUCTION TO THE REPORT.....................................................................................7
CHAPTER TWO: THE BANK......................................................................................................................7
CHAPTER THREE: THE BRANCH...............................................................................................................7
CHAPTER FOUR: AN INSIGHT INTO BANKING..........................................................................................7
SECTION TWO........................................................................................................................................7
CORE PHILOSOPHIES..........................................................................................................................7
AT...............................................................................................................................................................7
BANK ALFALAH LIMITED...................................................................................................................7
INTRODUCTION.....................................................................................................................................7
THE VISION.............................................................................................................................................7
THE MISSION..........................................................................................................................................7
SECTION THREE....................................................................................................................................7
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MANAGEMENT STRUCTURE OF.......................................................................................................7

CHAPTER ONE: INTRODUCTION................................................................................................................7
CHAPTER TWO: TOP MANAGEMENT HIERARCHY....................................................................................7
CHAPTER FOUR: MANAGEMENT LEVELS.................................................................................................7
CHAPTER FIVE: SIGNIFICANT MANAGEMENT POLICIES...........................................................................7
CHAPTER ONE: THE ACCOUNTS DEPARTMENT.........................................................................................7
CHAPTER TWO: THE ACCOUNT OPENING DEPARTMENT..........................................................................7
CHAPTER FIVE: THE CLEARING DEPARTMENT.........................................................................................7
OUTWARD CLEARING..........................................................................................................................7
INWARD CLEARING..............................................................................................................................7
CHAPTER SIX: ONLINE TRANSACTIONS....................................................................................................7
CHAPTER SEVEN: ALFALAH CAR FINANCING...........................................................................................7
CHAPTER EIGHT: CREDITS DEPARTMENT.................................................................................................7
SECTION FOUR.......................................................................................................................................7
FINANCIAL ANALYSIS..........................................................................................................................7
OF............................................................................................................................................................... 7
A) FINANCIAL STATEMENTS.....................................................................................................................7
B) RATIOS.................................................................................................................................................7
1998 - 2002..................................................................................................................................................7
C) FINANCIAL RATIOS ANALYSIS.....................................................................................................7
1998 - 2002..................................................................................................................................................7
ACCOUNTING POLICIES.....................................................................................................................7
SECTION FIVE........................................................................................................................................7
MARKETING MIX..................................................................................................................................7
OF............................................................................................................................................................... 7
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MARKETING MIX.....................................................................................................................................7
PRODUCTS & SERVICES......................................................................................................................7
PRICE........................................................................................................................................................7
PROMOTION...........................................................................................................................................7
PLACE.......................................................................................................................................................7
SECTION SIX...........................................................................................................................................7
SWOT ANALYSIS & RECOMMENDATIONS.....................................................................................7
CHAPTER ONE: SWOT ANALYSIS............................................................................................................7
CHAPTER TWO: RECOMMENDATIONS.......................................................................................................7
ANNEXURES............................................................................................................................................7
ANNEXURE ONE: BORROWERS BASIC FACT SHEET-FOR CORPORATE....................................................7
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SECTION ONE
INTRODUCTION
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CHAPTER ONE: INTRODUCTION TO

THE REPORT
The basic purpose behind the preparation of an internship report is to make the
student jot down the experiences of the internship and discuss the understanding of
the operations of the organization.
The following pages discuss my experiences at Bank Alfalah Limited, Township
Branch, Lahore. Nevertheless, before I proceed, I would like to mention that the
experience of working in a small, newly established branch was in itself a treat. All
the employees were extremely cooperative and accommodating. It was for the
first time that the branch had the experience of interns and as much as I was
learning, all the employees under whom I worked were learning from the experience
as well.
This internship report is based on the format that the first section discusses the
bank and its history, its current status and its future outlook.
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CHAPTER TWO: THE BANK

B A N K A L FA L A H L I M I T E D
Bank Alfalah Limited was incorporated on June 21, 1997 as a Public Limited
Company
under
the
Companies
Ordinance
1984.
Its banking operations
commenced from November 1, 1997. The bank is engaged in commercial banking

and related services as defined in the Banking Companies Ordinance, 1962.
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 backing of the Abu Dhabi Group and driven by the
strategic goals set out by its board of management, the
Bank
has
invested
in
innovative technology to have an extensive range of products and services.

Currently Bank Alfalah Limited has thirty-five branches (45 branches covering 21
cities in 2003) spread all over Pakistan. In the coming years, the bank plans to open
a number of new branches to ensure that its customers get the benefit in the form
of extended branch network and comprehensive products and services.
P U R S U I T O F E XC E L L E N C E
Bank Alfalah Limited has continued its upward climb in pursuit of excellence.
Strengthened by the backing of the Abu Dhabi Group and driven by strategic goals
set out by its Board and management, Bank Alfalah Limited increasingly inspires
trust and confidence of all its clients. Within a short span of time the bank has
carved a significant niche for itself in the banking industry.
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These achievements have been preceded by concerted effort

to provide highest levels of service and value to our
customers. The bank aims to further enhance performance
standards through implementation of innovations in both
products as well as customer care, by discovering newer
avenues of client benefit. This customer focused strategy has
enabled Bank Alfalah Limited to evolve as a single source
financial service provider of corporate and retail banking
services.
D E D I C AT E D P R O F E SS I O N A L S
The Bank Alfalah Limited team comprises of dedicated
professionals equipped with a diverse array of skills, vast
experience and pro customer attitudes. The management
concentrates its energies on making informed economic
decisions, translating it into greater returns for our investors
and
customers.
This
prudent
attitude
has
created
synergistic organizational structure leading to improvements

in profitability and a sustainable competitive advantage for
the bank.
H I G H LY
RESPONSIVE
PRODUCT
P O RT F O L I O
Not only comprehensive but also customizable to match the
needs and preferences of the customers. These strategic
characteristics of the portfolio have helped Bank Alfalah
Limited to face challenging economic conditions. The product
lineup
continues
to
fulfill
and
satisfy
the
banking
requirements of not just the conventional consumer, but the

demanding financial needs of the corporate sector as well.
The lineup includes:
Car Financing
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Rupee Travelers Cheques
Anmol Saving Certificates
Home Loans
OnLine Banking
MoneyGram Remittance Services
Monthly Income Plan
Credit Cards
ATMs
AN OVERVIEW OF THE INDUSTRY

Bank Alfalah Limited is in the initial stages of growth. It has to face intense
competition from the well-established banks like Prime, Union, Askari, Muslim
Commercial Bank, PICIC, Bank Al-Habib etc. General trend in the market is that the
private banks are increasing there paid-up capital. Banks are expanding their
branch network.
A brief detail of some leading banks is given below:
B A N K A L FA L A H
During FY 2001 Alfalah has shown a positive trend of growth. Its deposits increased
by 48% and advances increased by 25%. The profit for the year has also risen.
Banks success in a few years of operations is appreciable. In spite of the intense
competition performance of bank is remarkable.
PRIME COMMERCIAL BANK

It was a profitable year for Prime Commercial Bank. Its profit before tax went up to
Rs. 241 million from Rs. 158 million of the last year. Instead of announcing the
dividend management opted to increase the banks reserves, which will have a
good effect on the profitability in the long run.
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UNION BANK
It is one of the major competitors of Bank Alfalah. FY 2001 was not a very profitable
year for the Union Bank. Profit before tax was very low. Major causes of low profit
were sky-high administrative expenses. Provisions against non-performing loans
were very high.
The above comparison reveals that in spite of being new
bank, Bank Alfalahs performance has been much better
than its competitors.
Following tables will reveal the position of Bank Alfalah as compared to its
competitors.
DEPOSITS (RS. IN MILLION)

Banks
2001
2000
Bank Alfalah
Union
30,207
20,721
20,482
17,171
Prime
10,367
8,264
A D VA N C E S ( R S . I N M I L L I O N )
Banks
Bank Alfalah
2001
19,131
2000
15,242
Union
Prime
13,689
6,853
13,346
6,794
An overview of industry shows that Bank Alfalah is among the top banks of the
country. In fact Bank Alfalah can be ranked second after Askari Commercial Bank.
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CHAPTER THREE: THE BRANCH

TOWNSHIP BRANCH LAHORE
The Township Branch is strategically located at the intersection of three big towns of
the city. It is located adjacent to Akbar Chock, which forms the junction of Township,
Faisal Town and Johar Town. It is spread over an area of more than 4 canals. It has
ample of parking space and due to the attention and interest of the branch
manager, Mr. Rizwan; the exterior of the branch has been delightfully decorated
with flowerbeds, grass and trees.
At the time of my internship, the branch was passing through the initial one year of
its existence and therefore had a small number of staff members. It has a total of 24
employees, ranging from the Bank Manager to the Tellers.
Other than these
officers, there were about eight workers ranging from the Security Guard to the
Cleaning Boys to the Incharge of the kitchen etc.
The main reason of the banks existence is the acceptance of peoples money to
keep safe until they need it back and extending money on interest to those who
need it for investment purposes. At the first day of my internship, the Township
Branch had crossed the Rs. 398 million mark for deposits but had extended credit of
only Rs. 34 million. Out of the total deposits, foreign currency deposits were around
Rs. 35 million whereas the local currency deposits were around Rs. 362 million.
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CHAPTER SIX: THE FUTURE OF BANK ALFALAH LIMITED
OUR CORE PHILOSOPHY OF HONESTY,

T R A N S PA R E N C Y I N C U S T O M E R D E A L I N G S , P R O D U C T
I N N OVAT I O N , E XC E L L E N C E I N C U S T O M E R S E R V I C E ,
AND OUR COMMITMENT TO BEING A RESPONSIBLE
C O R P O R AT E C I T I Z E N P E R VA D E S T H I S B A N K
These are the words that the Chairman His Highness Sheikh Nahayan Mabarak
Al-Nahayan uttered for the commitment of the bank towards providing satisfaction
to its customers. Confronted with a more open financial market but tougher
competition, Bank Alfalah Limited, with its professional outlook and commitment,
maintained healthy growth in resource mobilization and financing of foreign trade.
The management at the bank feels that in the coming years, the bank would
expand more to provide their customers an easy to use network of branches in all
major cities of the country. The chairman of the bank feels the bank has managed to
establish a name for it self in the financial markets and will continue to institute a
strong foothold in the minds of the customers as well.
Here I would like to mention that after the privatization of United Bank Limited (UBL)
by the Privatization Commission Of Pakistan and the takeover by the consortium of
Best Way Group and Abu-Dhabi Group, the Chairman of Bank Alfalah Limited H. H.
Sheikh Nahayan Mabarak Al-Nahayan has been given the charge to run UBL
as its chairman, while his younger brother, H.E. Sheikh Hamdan Bin Mabarak
Al-Nahayan has been appointed as the New Chairman of Bank Alfalah Limited.
Here I would like to cite some portions of the new chairmans review in order to
make clear the future targets of Bank Alfalah Limited under his leadership.
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At the close of the sixth year of operations after its privatization in 1997, Bank
Alfalah Limited has been steadily reaching higher standards of service excellence
and performance despite many challenges.
The year 2002 has seen Bank Alfalah Limited achieving significant success both in
terms of product portfolio and customer service. The unfortunate 9/11 incident
caused economic uncertainty and political turbulence. However, Bank Alfalah
Limited was able to face these challenges valiantly and courageously. Consequently,
the size of the banks client base was increased that showed the favorable
reputation Bank Alfalah Limited enjoys in the market.
THE POLITICAL AND ECONOMIC LANDSCAPE:

President
Musharrafs
government
fulfilled
its
promise
and
democratic
government was instituted in the country. The new government has presented a
very favorable agenda for the country, both in terms of economic and social
reforms. The State Bank of Pakistan revised down the interest rates in order to spur
economic development and investment activity in the country. This, coupled with an
impressive increase in foreign reserves of over $ 10 Billion, augurs well for the
countrys economic revival. The government is also committed to the concepts of
deregulation and privatization, which is a positive sign for the economy.
FINANCIAL HIGHLIGHTS:
The operating results show an impressive improvement compared to the last
financial year.
The bank earned a pretax profit of Rs. 894.65 Million, a significant growth of
70.68 % over the last year.
The improving Return on Assets (ROA) suggests the increasing operational

and administrative efficiency.
The Return on Equity (ROE) indicates that returns to investors have

continually improved signifying the overall enhancement in the banks
performance.
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Deposit mobilization remained an area of key focus and the deposit base
stood at Rs. 51.68 Billion at the close of December 2002, which signifies an
increase of 71.10 %.
This improvement is, along with other factors, attributed to the banks
high customer value product offerings in the form of branded deposit
schemes and certificates.
The loan and advances portfolio too has increased by 45.59 % to Rs. 29.43
Billion.
The strategy in this arena has been one of revenue maximization coupled
with well-managed and quality credit expansion.
BRANCH NETWORK:
Over the years, the banks emphasis on growth has resulted in a strong entity
capable of offering high quality services to a wide spectrum of clients, in a highly
challenging business environment. Bank Alfalah Limiteds strategy is to maximize
the synergies of branch network through an optimal allocation of financial, human
and other resources in order to meet the dynamic challenges of present financial
environment. In the year 2001, the branch network increased to 32 branches,
making the reach to customers in 17 cities. Currently, the bank has successfully
opened 45 branches in 22 cities nation-wide.
C R E D I T P O RT F O L I O :
To capture good quality risk assets there is intense competition within the financial
industry, given the declining interest rate regime. Despite that, Bank Alfalah Limited
still follows a policy of prudent lending being mindful of the fact, that is not only a
custodian of its customers and well-wishers money, but also their trust.
It is a matter of great gratification that Bank Alfalah Limiteds non-performing
portfolio has decreased considerably since July 1997. While risks cannot be
mitigated entirely, formal credit approval process along with inbuilt system of
checks and balances has been put in place to achieve highest quality in the Loan
and Advances portfolio.
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CONSUMER BANKING:
Bank Alfalah Limited continually strives to improve and add to the consumer
banking services. In the endeavor to provide best returns to the clients, an
impressive product portfolio has been designed to provide reasonable returns to
them, coupled with security of their capital.
AU T O M AT I O N A N D T E C H N O LO G Y:
Information technology and its optimum use greatly facilitate work and increase
performance potential. Bank Alfalah Limited is in the forefront of providing
customers online and timely services. For this, automated and technologically
sophisticated work flows and systems are a prerequisite.
Bank Alfalah Limited continually invests in upgrading these systems and similarly
training the human resource. The ultimate aim is to achieve both service and cost
optimization.
The in-house developed software BankSmart has been successfully installed in all
the branches and has been well received. Plans are underway for the installation of
ATMs and joining a Switch Group of other prominent banks.
FOREIGN TRADE AND CORRESPONDENT BANKING:

Bank Alfalah is a trade focused Bank. It places special emphasis on maintaining a
synergistic correspondent banking network, with a view to give customers, greater
global access. Bank Alfalah Limited works closely with its correspondents in the
areas of mutual interest and benefit. Today it enjoys mutually beneficial relationship
with over 170 correspondents reflecting favorably not only on its reputation
domestically but also globally. This network has facilitated in handling a trade
volume of RS. 66.93 billion in the year.
C R E D I T R AT I N G :
Pakistan Credit Rating Agency-the leading credit agency in the country-has rated
Bank Alfalah Limited very favorably. The bank has been awarded an AA- (double a
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minus) and an A1+ (A one plus) in the long and short term respectively. These
ratings denote very high credit quality and very low expectation of credit risk.
The bank also issued Term Finance Certificates in the year 2002. These were very
well received in the market and were oversubscribed by 6 times. PACRA award an
A+ (A plus) rating to these certificates.
T R A I N I N G A N D D E V E LO P M E N T:
Bank Alfalah Limited is committed to the personal welfare and professional
development of all its team members. It realizes that proper training of human
resource is essential, not only for a more productive and satisfied work force but
also for a homogeneous corporate culture.
The bank continues to follow its strategy of hiring batches of young and energetic
management trainees who are sent to a Training and Development Center for
training in all areas of banking. The Training and Development Center is a state of
the art facility with an impressive faculty. At the same time short courses are
continually conducted for other team members to only enhance their skill levels but
also increase their performance potential.
F U T U R E O U T LO O K :
The economic future for the country seems brighter with many key indicators
moving
in
entrepreneurial
favorable
activity
direction.
has
Investors
gained
confidence
momentum.
is
Amidst
recovering
these
and
positive
developments, Bank Alfalah Limited will continue to follow a strategy based on

business and deposit enhancement and network expansion.
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CHAPTER FOUR: AN INSIGHT INTO

BANKING
BANK
There are various viewpoints about the origin of the word Bank. One point of view
is that it is derived from the word Banc us which means a bench. The other
viewpoint is that it has originated from the German word bank which is called ban
co in Italian language. It is a German word and means a joint stock fund.
COMMERCIAL BANK
A bank or banker is a dealer in credit or more properly a dealer in money. It is an
intermediate party between the borrower and the lender. It borrows from one party
and lends to another. The difference between the term on which it borrows and that
on which it lends forms the source of his profit. The bank therefore, can be called a
financial intermediary that operates for profit motive.
CLASSIFICATION OF BANKS
The commercial banks are classified into various types on the basis of their spheres
of activities, ownership, domicile etc. The main types of banks are: -
Classification on the basis of functions
Classification on the basis of ownership
C L A SS I F I C AT I O N O N T H E B A S I S O F F U N C T I O N S
Central Bank
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Commercial Banks
Exchange Banks
Saving Banks
Agricultural Banks
Industrial Banks
C L A SS I F I C AT I O N O N T H E B A S I S O F O W N E R S H I P
Public sector banks
Private sector banks
Cooperative banks
C L A SS I F I C AT I O N O N T H E B A S I S O F D O M I C I L E
Domestic Banks
Foreign Banks
FUNCTIONS OF COMMERCIAL BANKS

The functions of commercial banks are classified as:
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FUNCTIONS
P R I M A RY O R B A S I C
FUNCTIONS
Accepting Deposits
S E C O N D A RY O R S U B S I D I A RY
FUNCTIONS
Making Loans &
Agency Functions &
Advances
Services
Fixed or time
Purchasing and
deposits
discounting of bills
Collection of
Execution of
standing Orders,
payment of Orders,
payment of
Act as referee
Purchase and sale
Issuance of
of securities
travelers checks
Current deposits
Cash credits
Loans
Transfer of funds
Acting as trustee
OF
business
interest etc
Drafts
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checks, bills,
Saving deposits
Utility Functions
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Export promotion
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SECTION TWO
CORE PHILOSOPHIES
AT
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INTRODUCTION
To succeed in todays volatile, interconnected and ultra-competitive markets, banks
need rapid access to timely information, flexible financial solutions and their alert
execution. Bank Alfalah follows the core philosophy of satisfying its customers
through effective branch network, efficient human resource and economical
products.
Over the years, the management has succeeded in establishing an ideological base
for the employees to build the bank upon: customer loyalty, service with dedication
and development of a wide range of products for the customers to choose from.
Some of the Fundamental Philosophies followed at the bank are:
Excellence in Service
Quality Performance
Product Innovations
SPOTLIGHT ON THE CUSTOMER

The customers include small depositors to corporations who are at various stages of
development - from start-ups to multinationals working in Pakistan.
coverage
and
service
structures
preserve
and
build
on
strong
The client
customer
relationships.
As the bank continues to develop, internal processes and support system are being
upgraded and integrated to create seamless and efficient service for each
customer, regardless of how many different businesses; client subsidiaries or
locations are involved.
THE KNOW YOUR CUSTOMER DRIVE

Know Your Customer (KYC) is very well known tern for its effectiveness in
marketing of financial services. It is also essential for prudent banking. The KYC
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program is international in origin. Under KYC, at the inception of relationship with a

bank, a comprehensive identification of the customer is required and thereafter
transactions in the customers account are monitored. Anyone who does not provide
identification will not be allowed access to banking services. Its purpose is to
prevent and detect relationship with unscrupulous elements including prevention of
money laundering. For the purpose of keeping a database of the customer, special
forms have been distributed amongst the branches. The forms serve as a checklist
and allow the interviewer an opportunity to tactfully document all required
information from the customer regarding his source of funds.
B R OA D P RO D U C T C A PA BI L I TI ES
As the bank works with the clients to help them achieve their goals, it can offer all
the products and services they need to obtain appropriate liquidity, diversification
of funding sources, reduced capital costs and stronger balance sheets. Bank Alfalah
Limited is able to execute transactions of almost any size, of every level of
complexity and in multiple currencies. Products ranging from: The Royal Profit
Account to Car Financing, from Savings Certificates to Credit Cards, from On Line
Banking to a wide network of ATMs, and from Remittance Services to Monthly
Income Plans, Bank Alfalah has it all available under one roof.
CREATION OF A BRIGHT FUTURE

Bank Alfalah Limited works for the attainment of the contentment of the society
through the satisfaction of its customers. It places high priority to the attainment of
the financial and social growth of the nation. Through this vision, the bank sees a
bright future for the nation and itself.
GROWTH STRATEGY
Bank Alfalah Limiteds objective has been to expand its own branch network to
meet clients needs so that it may better preserve its organizational culture,
efficiency, quality and image. The bank is well positioned and geographically
poised, to cater for increasing business demands, from its existing and potential
clientele. Presently the branches are spread all over Pakistan and they cover major
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business centers and principle cities. Bank Alfalah Limited plans to add more
branches to its growing network in the ensuing years.
COMMUNICATION
AMONGST
THE
EMPLOYEES
A good deal of verbal interchange takes place in bank each day. It is a two-way
thoroughfare. The officers discuss rather than direct, listen as well as interact. The
bank makes the communication channel more effective by staff meetings that are
an extension of the conversational or discussion technique but embraces a larger
segment of the bank. Such meetings are regular features of the bank and take a
wide variety of forms, ranging from daily or weekly officers meetings to annual
weekend conferences.
The major portion of communication necessary for the day-to-day operations of a
bank consists of simple person-to-person conversation more complex ideas,
however, gain clarity if they are put in writing. Thus the bank is talented in the
ability to write clearly which is an invaluable management talent that needs
constant practice and development.
MENTORING PROGRAM
A mentoring program has been implemented through out the bank. The initiative is
aimed at helping freshly inducted staff members in the bank to integrate and settle
down in their respective assignments as happy and productive employees. For this
purpose, 10 commandments of Mentoring have been laid down. They are:
Induction and orientation of the new employees
Coaching in basic workplace manners
Job description and career orientation
Identifying training and development needs
Sponsorship, projection and recognition
Explaining the appraisal process
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Culture building and socialization
Guiding and coaching
Counseling
Systematic interaction with new joiners
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THE VISION
Our vision is to be a leading

fi nancial institution, with a niche in
areas where we have a competitive
advantage with complete banking
solutions. Our focus is on
improving performance in each of
our businesses to achieve
consistent and superior returns for
our highly valued clients and
shareholders.
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THE MISSION
Our mission is to maintain a

competitive edge in quality
banking, customer service and
profi t performance. Our activities
are geared towards making Bank
Alfalah a responsible Corporate
Citizen. The emphasis on Quality
and Innovation will remain our key
mission statement. We will
continue to strengthen our position
as the leading provider of quality
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SECTION THREE
MANAGEMENT STRUCTURE
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CHAPTER ONE: INTRODUCTION

Bank Alfalah is proud of its Human Resource, as almost all the employees have been
hand picked by the management. However, in this section, I would discuss those
people who are responsible for hiring such a bright staff and establishing such a
magnificent bank. They are the higher management of Bank Alfalah Limited.
THE CHAIRMAN (OUTGOING)
H. H. Sheikh Nahayan Mabarak Al-Nahayan

H. H. Sheikh Nahayan Mabarak Al-Nahayan is an important and prominent member
of the ruling family of Abu Dhabi. After the culmination of his studies at Oxford, he
returned to shoulder important responsibilities in the state administration. In 1988,
he was appointed the President of the higher colleges of Technology comprising of
eight colleges throughout the UAE a responsibility he fulfilled with distinction. In
1990, he was appointed Minister of Higher Education and Scientific Research.
Presently he also holds the presidency of the Society of the Natural History and
National Heritage. In 1992, he became the Chairman of the Union National Bank and
has since remained involved in strategic management of the institution.
THE CHAIRMAN (NEW)
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H. E. Sheikh Hamdan Bin Mabarak Al-Nahayan
THE BOARD OF DIRECTORS

H. H. Sheikh Nahayan Mabarak Al-Nahayan
- Outgoing Chairman
H. E. Sheikh Hamdan Bin Mabarak Al-Nahayan
- New Chairman
Mr. Mohammad Saleem Akhtar
- Chief Executive Officer
Mr. Abdullah Khalil Al-Mutawa
- Director
Mr. Omar Z. Al-Askari
- Director
Mr. Abdullah Naseer Hawaileel Al-Mansoori
- Director
Mr. Nadeem Iqbal Sheikh
- Director
Mr. Ikram Ul-Majeed Sehgal
- Director
BOARD ADVISORY COMMITTEE

Mr. Omar Z. Al-Askari
Mr. Abdullah Khalil Al-Mutawa
Mr. Ganpat Singhvi
Mr. Bashir A. Tahir
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EXECUTIVE COMMITTEE
Mr. Mohammad Saleem Akhtar
- Chairman
Mr. Pervaiz A. Shahid

Mr. Ikram Ul-Majeed Sehgal
Mr. Mohammad Yousaf
Mr. Tanveer A. Khan
Mr. Sirajuddin Aziz
Mr. Mahmood Ashraf
CORPORATE INFORMATION
Mr. Hamid Ashraf
- Company Secretary
A. F. Ferguson & Co. (Chartered Accountants)
- Auditors
B A Building,
- Head Office
I. I. Chundrigar Road,
P. O. Box 6773, Karachi.
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CHAPTER TWO: TOP MANAGEMENT

HIERARCHY
C h a ir m a n
B o a r d o f D ir e c to r s
C h i e f E x e c u t i v e O ffi c e r
E x e c u tiv e C o m m itte e
E x e c u tiv e I n c h a r g e s
A rea M an ager
N o r th
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CHAPTER FOUR: MANAGEMENT

LEVELS
Management must adopt some administrative style to get all the activities done
effectively and efficiently. As far as the management style at Bank Alfalah Limited
Township Branch is concerned, there is centralization to a certain extent and
decentralization in some other areas.
Administrative style of the Township Branch Manager Mr. Rizwan Ul-Haq was not at
all authoritative. His non-authoritative style was the requirement of the new branch.
For the implementation of strategies and getting all the activities to be done
properly with an organized environment, cooperation was the requirement of the
time. He used to take all important decisions after consulting the Manager
Operations Mr. Farooq Shehzad and the Manager Corporate Banking Mr. Osman
Latif.
Management refers to the universal process of effectively and efficiently getting
activities completed with and through other people. It is a process by which certain
basic functions, that are planning, organizing, leading and controlling, are
performed to achieve the desired objectives of the organization. These functions are
being performed at three levels in Bank Alfalah.
BOARD OF DIRECTORS
At the top of the human resource hierarchy sits the Board of Directors and The
Executive Committee. The most important task of this level of management is
strategic planning, determining the goals and objectives and to formulate the
policies.
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TOP MANAGEMENT
Top
management
mostly
involves
strategy
formulation,
technical
planning,
determining how to best get the job done and control. Chief Managers and Branch
Managers are included in this level. They define and interpret the objectives and
vision and then formulate policies for their completion.
MIDDLE
MANAGEMENT,
SUPERVISORS
AND EMPLOYEES
Departmental heads constitute this level of management at Bank Alfalah. They are
directly responsible for planning and controlling the activities of officers. Finally, the
employees activities are monitored and controlled according to the desired
objectives.
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CHAPTER FIVE: SIGNIFICANT

MANAGEMENT POLICIES
POLICY FORMULATION PROCESS
At Bank Alfalah Limited, polices are formulated at the top level. Board of Directors
and Executive Committee of the bank formulates policies keeping in view the
mission and the objectives of the bank. So far the policies formulated by the top
level have been very successful as indicated by the success pattern of the bank.
These policies are then implemented according to the guideline of top level of
hierarchy. Top management and middle management are given powers to carry out
the operations for the achievement of long-term objectives. They encourage the
views and suggestions of bank officers as well. It helps in the effective
implementation of the formulated strategies.
Meetings are regularly held weekly at the branch level. However in case of some
urgent problem or issue meeting is called as well. For the solution of a problem
suggestions are always welcomed. It has a healthy impact on the morale of
employees.
INDUCTION
The human resource is the most expensive asset of any organization. This factor
can change the future outlook of any organization within months. The human
resource can either lift the organization through its hard work or destroy the image
of the organization through sluggishness and lethargy. The top management of bank
Alfalah Limited is very much aware of this fact and therefore has started an MTO
induction program. The Management Trainee Officers are chosen from amongst
the best management students from the countrys best institutions. The Human
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Resource department conducts a test every year to choose this batch of around 35
students.
TRAINING
The batch of MTOs selected every year has to go through a 6-month thorough
training period at the purpose built Training Institute at the banks Head Office in
Karachi. Bank Alfalahs training academy is equipped with the latest audio-visual
training aids, which facilitate in the dissemination of knowledge and skills. This is
done to give an orientation to the employees about the bank and its working.
Another purpose of this training program is to upgrade the knowledge base of these
already bright students and to polish their abilities as good bankers so as to bring
their skills at par with those of international banks in developed countries.
PROMOTION
Each year, the superior officer prepares a review of each employee and then,
instead of sending it directly to the Head Office, it is first discussed with the
employee. This is done to incorporate a sense of confidence between the senior and
junior employees. It is also done to give the employee a chance to know his
weaknesses so that he may work hard to improve his abilities and skills the next
year. On the basis of this report, the promotions are made and bonuses are given.
Sometimes other factors are considered such as length of service, education,
training courses completed, previous work history and the like.
S A L A RY ( P AY S C A L E S )
The principal criteria for a well-considered and reasonable salary policy are
First, the relationship of the banks salary scale to salaries paid for
comparable jobs in the community and the industry and,
Second, the relationship of the salary paid to one person to that paid to
others for jobs of comparable difficulty within the bank.
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The salary management of Bank Alfalah Limited is reasonable as many factors

contribute towards the working conditions - job security, prestige and opportunity
for advancement - all enter into the competitive package.
Bank provides fringe benefits to or better than those offered in other industries.
Hospitalization and group life insurance are the rules prevailing in the bank. A more
effective incentive is well-designed bonuses plan with benefits that varies from year
to year and employee to employee in direct proportion to the financial success of
the banks operations.
MOTIVATION LEVEL
Job design for motivation is another personnel approach that has been increasingly
emphasized in recent years. Job contents, methods and relationships are structured
not only to satisfy technological and organizational requirements but also to
accommodate human needs for meaningful and self-fulfilling work. Jobs are being
designed to fit the people who hold them in the hope that greater employee
motivation (which is essential to higher productivity) will result.
GROWTH OPPORTUNITIES
Bank Alfalah Limited provides growth opportunities to its employees and officers.
The bank has a huge number of clients of business class and allows certain relief
and incentives to its employees thus making job more efficient and effective.
J O B S AT I S FA C T I O N
During my internship program, I worked with different employees in different
departments. I observed their working and also their level of satisfaction regarding
their jobs and reward system.
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Almost all the employees were satisfied with their jobs, as far as the quality of work
and rewards were concerned. All the employees were highly motivated and sincere
with their jobs. However, one common complaint was the quantity of work. Much
were overloaded with the huge work and even had to work till 9 or 10 pm.
I MPA C T
OF
MANAGEMENT
STYLES
ON
EMPLOYEES
Motivation: The term motive implies action to satisfy a need. Motivation can
be defined as a willingness to expend energy to achieve a goal or a reward.
The management styles adopted by the bank affect greatly, and employees
are motivated in order to enhance their performance and achieve the derived
goals.
Morale and Productivity: The employees of the bank possess high morale,
and thus exhibit high productivity. The employees are happy and are also
productive workers. Job attitudes and morale are quite positive for two
reasons. Firstly employees gain social satisfaction from interactions at the
work place. Working conditions and supervision are good; secondly high
morale results from high motivation to produce. In other words we can say,
that management should put its eggs in the basket that creates a highmotivated work force.
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CHAPTER ONE: THE ACCOUNTS

DEPARTMENT
I started my endeavors from the Accounts Department at the Township Branch of
Bank Alfalah Limited. It is probably the only department in the entire bank where
there is almost no direct customer dealing. This department was composed of two
personnel
Manager Accounts - Mr. Tauseef Ahmed, and
Officer Accounts - Mr. Abdul Latif.
INTER-BRANCH ACCOUNTS
Like other commercial banks, Bank Alfalah Limited 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.
In case, there are more than one braches of a bank in a city, the main branch deals
with other city branches through their correspondent accounts. The Head Office
Karachi has this responsibility. Similarly, in one city, all branches of a bank have
their corresponding accounts with each other. 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 banks
branch through these inter-bank and inter-branch accounts.
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ACTIVITIES
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
BUDGETING
Accounts department of a bank, for a year makes budget of every branch. Fiscal
year of bank starts from January 01 and ends on December 31. The accounts
department starts preparing budget from October for the next year.
Procedure
The budget is based on forecasting through past performance
First of all, the bank reviews what are its sources of funds and where it
can utilize these funds?
The main sources of the bank are deposits, securities issued by the bank,
borrowing from other banks, borrowing from SBP, banks paid-up capital,
its reserve fund, profit generated by the bank.
The bank may employ these funds in lending to others at a high rate of
mark-up. Investment in securities, placement in inter-bank markets etc.
It also takes into account the income from other sources, cost of funds,
administrative expenses, and utilities expenses.
Then the budget is submitted to the head office for recommendation and
modification.
Monthly budget meeting is held by branch managers to analyze the

monthly performance. Budget and actual performances are employed
and variance is computed for analysis.
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Variance can be negative or positive. Variance does not mean that it will
have positive effect on the overall profitability e.g. positive increase in
deposits is not always coupled with positive increase in advances.
The management will then drive the reasons for the variance and take
remedial measures to achieve the targets.
R E P O RT I N G
The accounts department, in the form of reports, clubs the details of various
departments together. Each and every minute detail is provided in weekly, monthly
and annual reports. The reports are submitted to head office, SBP and to the
government.
The accounts department prepares many reports, of which the most common are
Statement Of Affairs
Income & Expenditure
Foreign Currency Report
Royal Profit Report
Outstand Receipt Report
Subsidiary Statement
Currency Wise Deposits Report
Following are the reports that are prepared on the basis of reports granted from
mainframe. These are very important for proper analysis and feedback.
M A I N TA I N I N G O F F I X E D A SS E T S & T H E I R D E P R E C I AT I O N
Accounts department maintains the record of all the assets and charges
depreciation on them. The bank normally uses the straight-line method to compute
the depreciation.
The accounts department prepares asset purchase report and asset sale report after
every 6 months that helps in changing the depreciation. It is calculated on monthly
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basis and charged yearly. Bank not only depreciates the existing assets but also the
assets but also the assets transferred in and transferred out.
MISCELLANEOUS FUNCTIONS
The accounts department also performs some other miscellaneous functions like
Reconciliation Statements
Test Keys
Closing Entries
Foreign Exchange Forward Transaction
Reconciliation statements
The bank prepares reconciliation statement with head office and SBP.
Head Office
Reconciliation with head office is done in reconciliation department. The

branches send their reports to the head office. They check the posting of all
the entries if outstanding, which has not been posted by branch or head office.
The reconciliation is carried out in the head office and accounts department
handles quarries.
State Bank of Pakistan
The SBP keeps the record of every scheduled bank. The bank statements and
statements of SBP are reconciled on daily basis. Reconciliation is basically
setting of outstanding entries. The reconciliation statement contains two sides.
One contains entries originated from bank but not responded by SBP and on
the other side entries originated by SBP but not responded by bank.
Test Keys
Test keys are used to authenticate and secure the transaction. These keys are used
for both inward and outward transactions. In local transfer double coding is used
while in foreign transaction single coding is used. Each bank to arrive at the code
uses separate test keys. The basic purpose of test is to secure the transaction. Four
things must be carefully checked because code is based these four items
Branch name
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Date
Currency
Amount
Closing Entries
Accounts department also passes the closing entries on monthly, 6 monthly and
yearly bases to calculate the profit and analyze the overall performance for a
certain period.
Foreign Exchange Forward Transaction
In the past, the banks had to keep their foreign exchange with SBP on the
agreement that SBP will purchase the foreign exchange on book rate and charge a
fee for covering the risk. This whole transaction was known as foreign transaction.
Now this facility is not available.
Now banks can avail it by renewing their limit on old accounts with SBP.
Bank carries out this transaction through Treasury has two options but it is up to
treasury where to invest foreign exchange.
They can invest foreign exchange in the international market but they will
have to pay high-risk fee.
They can also deposit with SBP that will offer 3.15% on these new foreign
currency accounts. The bank offers 2.25% to its customers; net saving by
the bank is almost 0.9%.
STATEMENTS
The predominant functions performed by the accounts department can be
categorized into two broad categories.
Daily Activity Checking
Report Generation
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D A I LY A C T I V I T Y C H E C K I N G
All the operations performed in various departments of Bank Alfalah Limited
Township branch are computerized. The functions are performed through the
customized software of the bank called Bank Smart. In order to facilitate doublechecking of all the transactions done, every concerned official also passes vouchers
manually. At the day end all the vouchers passed by various officers working in
different departments are given to Mr. Abdul Latif in the Accounts Department.
Furthermore the I.T. department also gives a very bulky report to Mr. Latif which
constitutes of the computer print outs of all the transactions / entries which have
been fed into the computer system of the branch that day. When both of these
things are at the desk of Mr. Latif, he performs the job of tallying the daily activity
report with all the corresponding vouchers, in order to track down any discrepancy.
R E P O RT G E N E R AT I O N
The exact number of reports generated by the accounts department on a daily,
weekly, monthly, bi-yearly and yearly basis is somewhere in the bracket of 500. It is
neither necessary nor possible to get acquainted by all of these reports in a short
period of time. Some of the common reports are
Daily Advance And Deposit Position
Daily Exchange Position
Daily Fund Management

Closing Reports
Monthly Assets & Liabilities
Monthly Budget Review Report
Monthly Monitory Statement
Monthly Performance Review Report
Schedule Of Maturity Distribution
From these statements, five reports carry extreme importance. Mr. Tauseef Ahmed
helped me understand the purpose and method of preparation of these reports. The
five reports are
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Daily position of advances and deposits
Statement of affairs
Daily exchange position report
Fixed assets statement
Month review of performance.
Now I shall explain each of these reports separately.

D A I LY P O S I T I O N O F A D VA N C E S A N D D E P O S I T S :
This particular report gives put forth a detailed break up of the Advances and
Deposits on a daily basis. The report covers all the heads of advances and deposits
so that the reader must be able to ascertain as to increase or decrease in which
head(s) has caused the over all increase or decrease.
The various heads of deposits covered by this particular report are as under
Foreign currency deposits old accounts.
Foreign currency deposits new accounts.
Local currency deposits.
The various heads of advances covered by this repot are as under
Foreign bills purchased
Export refinance
Export related advances
Import related advances
Alfalah car finance
Foreign currency advances
Other advances
Staff finances
An enlisting of the columns against these heads would give the reader a fair idea of
the amount of information generated by this report on a daily basis. The various
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columns included in this particular report are position at the end of previous year,
expected at the end of month, yesterdays position, present days position, and the
variance in the yesterdays and present days position. The basic purpose of
generating this report is to manage the available funds in a proper
manner and also to maintain a healthy liquidity position.
All commercial banks are supposed to maintain 5% of their time and demand
liabilities with SBP. When all the branches of Bank Alfalah Limited send this report to
the head office head office consolidates the reports of all the branches and sends
the consolidated report to SBP. SBP, after analyzing the deposit position of the bank
checks whether the amount deposited with it is sufficient to meet the 5%
requirement or not. Head office after sending the report to SBP also calculates the
5% requirement amount for every branch separately; if a branch is contributing an
amount which is in excess of what is required of that branch the head office gives
an interest to that branch on the excess amount, and if a branch is short of the its
required amount then that branch has to pay interest on the shortage to the head
office. The second predominant purpose of this report is to have a birds
eye view of the advances position on a daily basis.
STATEMENT OF AFFAIRS:
Statement of affairs is basically the balance sheet of BAL, Township Branch that is
generated by the accounts department on a daily basis. But when we take into
consideration the standard contents of a balance sheet we have to make an
exception in connection with this statement as their no head such as EQUITY in this
statement. Apart from this, the statement gives the complete detail of all the
assets and liabilities on a daily basis. When head office gets this statement
from all the branches it consolidates these statements in order to have a picture of
assets and liabilities of the bank on a daily basis and this is precisely the purpose
this report fulfills.
D A I LY E XC H A N G E P O S I T I O N :
This particular statement is basically aimed towards ascertaining as to how much do
we own in terms of foreign currency and how much do we owe in terms of foreign
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currency at a particular date. In simple terms, this statement gives us an overview

of the fact as to what are our assets and liabilities in terms of foreign currencies at
a particular point in time. Moreover this statement also gives us the local
equivalents of the assets and liabilities.
F I X E D A SS E T S S TAT E M E N T:
This particular statement is generated on periodic basis and contains information
regarding the following items
Furniture
Equipment
Vehicles
Real estate
Moreover this statement also contains information regarding the nature of fixed
assets, particulars of items purchased during the period, date of purchase, the
purchasing price, and name of the supplier. The total amount of fixed assets
purchased must tally with the total amount reported in the Statement of Affairs.
M O N T H LY R E V I E W O F P E R F O R M A N C E S TAT E M E N T:
This particular six-page statement is generated on a monthly basis. The statement
includes a detailed overview of assets and liabilities of the branch. In order to
facilitate comparison for complete understanding of events and affairs, this
statement also includes the figures for the previous month.
The basic utility / purpose of this statement is that it provides us with the cost of
deposits (the average total interest Township Branch is paying on its deposits), and
administrative cost as a percentage of deposits. When we add the cost of
deposits and the administrative cost we get the cost of funds.
Another predominant utility of this statement is that it provides the reader with the
percentage return on funds that Township Branch is receiving either from the head
office or from its clients. At this point it is relevant to mention that return on funds is
only for the fund-based facilities, the return on non-fund based facilities is
separately calculated and then is added into the return on fund-based facilities in
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order to arrive at the total return on funds. If we subtract the cost of funds from
the total return on funds we get the monthly profit generated by Township Branch
as a percentage of deposits.
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CHAPTER TWO: THE 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. The
Account opening department was the second department that I was rotated to
during my internship at Bank Alfalah Limited, Township Branch Lahore.
I really enjoyed my stay at this department as I got to interact with the customers
directly for the first time. I was given a desk on the ground floor next to the desk of
Ms. Sadia Kalsoom, who was a Customer Services Officer (CSO) and Officer
Accounts Opening. During my stay at this department I got to fill the forms of
individuals who wanted to get their accounts opened at Bank Alfalah Limited, fill the
cheques and deposit slips of customers who were not literate enough or needed
instructions, and I also got the opportunity to give advice to the customers
regarding the requirements of account opening and the benefits of opening an
account with Bank Alfalah Limited.
The incharge of Account Opening department was Mr. Ammar Raza, who was a
Business Development Officer (BDO). He also provided his full support towards me
during my stay at this department.
The main document in this department is, of course, the Account Opening Form.
DETAILS
OF
THE
ACCOUNT
OPENING
FORM
In the account opening form the client is required to provide the following
information. The first part establishes the currency in which the account is to be
maintained/operated. The currencies include
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Pakistani rupee.
U.S. dollar
Pound sterling
Euro
The second part then establishes the preference regarding the type of account to be
maintained. The various choices offered are
Profit and loss sharing/Savings account
Current account
Royal profit account. (Own product of Bank Alfalah.)
DISTINCTIVE
FEATURES
OF
THE
VARIOUS TYPES OF ACCOUNTS

Individuals who wish to earn profit/interest on their investment normally maintain
the profit and loss sharing account but in order to earn interest the client is required
to keep his/her deposits with the bank for some time. In theory there are some
restrictions on withdrawal of money from a Profit and Loss Sharing account but in
general banking practice there is no restriction on any with drawl from a Profit and
Loss Sharing account. The interest/profit is paid half yearly.
The current account is the most common account and the most preferred amongst
business concerns. The theoretical explanation for this would be that they can
function more efficiently but since in reality there are no restrictions on any with
drawl the only reason we could think of is that current account facilitates online
banking which saves time (which in this ultra competitive business world the most
precious resource) to a considerable extent. In case of a current account the client
does not earn any interest. Current account enables the client to do cash
transactions in a more efficient manner.
Royal profit is an original product of Bank Alfalah. The minimum amount to be
maintained in a Royal Profit account is Rs.50,000. Various types of Royal profit
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accounts and available. The slab rates offered at the opening of such an account
are:
R OYA L P R O F I T ( P R O F I T B E A R I N G C U R R E N T A C C O U N T )
Projected profit rates (per annum)
(For the period from 1st May 2002 to 30th June 2002)
Profit*
Amount
From Rs.50, 000 to 999, 999
6.00%
From Rs.1, 000, 000 to 9, 999, 999
6.50%
From Rs.10, 000, 000 to 49, 999, 999
6.75%
From Rs.50, 000, 0000 to 149, 999,999
7.50%
From Rs.150, 000,000 & above
To be quoted by treasury
* Profit is paid monthly.
R OYA L PAT R I O T ( S P E C I A L T E R M D E P O S I T )
Projected profit rates (per annum)
(For the period from 1st Feb 2002 to 30th June 2002)
Tenure
Amount (Rs.)
25,000 999,999
10000004999,9999
5,000,000
&
1Month
6.00%
6.10%
6.20%
3 Month
7.00%
7.10%
7.20%
6 Month
7.50%
7.60%
7.70%
12 Month
8.00%
8.10%
8.20%
24 Months
8.00%
8.25%
8.50%
above
The information to be provided in the account opening form is as follows
Title of the account is to be written in block letters. By title of an account we

mean the name (either of the individual or of the business concern) with
which the account is to be opened and operated.
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The client is supposed to provide the information whether the account would
be maintained singly (only one person operates the account) or jointly (two or
more than two persons maintain the account).
Name of the person who intends to operate the account is to be provided.
Provision of either Fathers or the Husbands name is also a pre-requisite.
Occupation of the prospective account holder is also to be written.
Name and complete address of the employer is to be written.
Nationality is to be provided.
Country of residence is to be specified.
Telephone number is must.
The national identity card, of course is an integral part of the account

opening application.
Passport number, if the prospective client has got one.
Another requirement is the date and place of issue of the national identity
card.
The prospective client also has to provide the name, address and relationship
of any one of his/her close relatives in order to facilitate the communication

problem. The clients often have a misconception that there next of kin might,
if some peculiar circumstances arise, get the profit out of his account but this
is not the case. The name and address of a close relative is only recorded in
order to undertake necessary communication when needed.
In case of a business concern there are two more things that are to be
provided by the business.

Type of organization. The various types of organization which are present in
Pakistan at present are
Limited company
Public
Private
Partnership
Association/Club/Society
Sole-Proprietorship
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The business concerns also have to give their full name, brief description of
the business, date of incorporation, place of incorporation, national tax

number, telephone number and fax number.
The choice of either the deduction or non-deduction of zakat also needs to be
highlighted. Zakat is deducted out of a Profit and Loss Sharing account and a
Royal Profit account maintained in Pak Rupee and not out of any account
maintained in any other currency. Moreover exemption from zakat would only
be granted if proper proof of exemption under a law presently enforced in
Pakistan is provided.
Details of other account/s maintained with other branches of BAL or other
banks are also to be given.

The name, signatures, and account number of the introducer is a very
essential prerequisite in order to facilitate the opening of an account. The

introducer is a person who already has an account in the same branch. It can
also be a person from the staff of the branch as well.
Then the client also has to put forth the instructions regarding as to whether
the account would be maintained on the basis of either or survivor, jointly

or any one of us.
After this three signatures of the client are needed and if it is an account of a
business concern then the rubber stamp of the company/organization is also

needed below the three signatures.
In case of a joint account all the persons unanimously might give the right to
operate the account to one person. This right is also termed as mandate for
joint account. If the mandate is given to a person all join account holders
must sign as an evidence of their approval.
In case of account opened by a business concern there are some documents that
are needed to be attached with the account opening form. The details of these
documents are given below.
L I M I T E D C O M PA N Y:
Copy of certificate of incorporation
Memorandum of Association
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List of Directors
Copy of board resolution
Certificate of Commencement of Business
Copies of NIC of Directors
Latest copy of Form-29
PA RT N E R S H I P :
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.
C LU B / S O C I E T Y / A SS O C I AT I O N :
Copy of rules/ by-laws
Copy of registration (if applicable)
List of Executive member management committee/management board

etc
Certified copy of Resolution
NIC of all members of the management body
S O L E P R O P R I E T O R S H I P / I N D I V I D UA L :
NIC/ Passport photocopy
Letter from Proprietor confirming sole proprietorship
There are two things that always accompany an account opening form;
Signature Specimen Card.
Cheque Book Requisition.
Signature specimen card basically contains information that is basically a repertoire

of information given in the account opening form, but in this card the client vividly
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puts his signatures as a specimen, which are scanned and stored in an intelligent
terminal for future use and reference.
Cheque Book requisition basically serves as an application to issue a Cheque book.
The client also fills it up and submits it along with the account opening form as a
result of which he is issued a Cheque book once his account is approved. As regards
the Cheque book one of the most important entries in a Cheque book requisition is
the series number of Cheques that correspond with the numbers of the cheques
contained in the Cheque book issued to the client.
PROCEDURE OF OPENING AN ACCOUNT
Step 1-The Account Opening Form:
When a client comes to the bank, and makes a request for opening of an A/C. The
officer says that first fill up a prescribed application form. If he/she wants to open a
PLS A/C, then he/she has to fill a form according to the account.
Step II-Completion of The Form:
The name, occupation, and complete address of the person opening the account are
written in the columns are provided in the form. One signature of the person is
taken on the face of the form and one is taken on the backside. These signatures
should be usual signatures and he would operate the account with them future.
Step III-Introduction:
The introduction of a current account holder is accepted for the opening of either a
current account or a solving account. The introduction of saving bank account is
accepted only for saving bank accounts. The signature of the account-holder
introducing the account is obtained at the place provided for in the account opening
form.
Step IV: Specimen Signature Card (S. S. Card):
The signatures of the client are obtained on a specimen Signature card. These cards
are obtained in duplicate with two signatures on each card from the customer. Every
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time a cheque is received for a payment from the client, the signature on the
cheque are verified by comparing them with the S.S. Card.
Step V-Account Number:
When all the formalities are completed then the final approval of account has to be
taken from the Branch Manager. After obtaining approval of the branch manager an
account number is allotted to the customer all the information is entered into the
computer. Then that account number is printed on the Cheque Book, S. S. cards and
account opening form.
Step VI- Issuance Of A Cheque book:
After opening an A/C with the bank, the A/C holder once again makes a request in
the name of bank for the issuance of a cheque book. The A/C holder mentions title
of A/C, A/C number, sign it properly and mentions the no of leaves he requires.
Normally BAL issues a cheque book having at least 25 leaves. Every cheque book
also contains one leaf that is used for another issue of a cheque book.
Step-VII Entry Of A cheque book:
Before issuance of a cheque book, the employee performs certain functions. They
include:
Stamping every leaf with specific A/C number.
Enters it in the cheque book issue register.
Check whether or not a senior officer has verified the signatures, if no

then first he gets them verified.
After entry in the manual register, the employee issues the cheque book to the A/C
holder after his/her signature on the register.
Step-VIII Filling Of Account Opening Forms:
For current and saving account, separate files are maintained in which the forms are
pasted or punched in numerical order and kept under lock and key in fireproof steel
or safe. This is because these forms are the basic documents of the contract with
the customer.
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Step-IX Maintaining the Computer Record:
After opening of account, all information regarding the account is entered into the
computer. Currently, a program named Bank Smart is being used for this purpose.
Record of all the transactions regarding the account of a customer is kept updated
in the computer.
PROCEDURE
FOLLOWED
IN
ORDER
TO
CLOSE AN ACCOUNT
The procedure followed for the purpose of closure of an account is described in the
following steps
The client who wishes to close an account first has to give an application,
duly signed on the pre-printed application of the bank. The client has to
attach this application with the liability form (explained below). The client can
also give an application on a plain paper, but correct signatures are very
necessary.
Then it has to be made sure that if the account to be closed is a Saving, Royal
Profit, or Foreign Currency Account then the account balance before closing
should be zero. In case of these three types of accounts the bank does not
take any closing charges. If a client wishes to close a current account then
the bank charges Rs.150, so at the time of closing the balance should be
Rs.150.
Along with the application to close the account clients Cheque book is also
received from him and then it is destroyed in order to prevent any misuse in
the future.
A liability form is filled and sent to the Trade Finance Department and Credit
Department in order to Cheque that the customer does not owe the bank a
single penny in any regard. A debit voucher and a credit voucher are also
attached to the liability form.
When both of these departments approve that the customer does not owe
any money to the bank and the form is returned to the account opening
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department then the original account opening form pasted in the ledger
when the account was opened is marked account closed along with the date
on which it is so marked. One thing has to be taken into immediate
consideration that the account number allotted to the client (who has closed
his account), after closure of the account becomes useless and is not allotted
to any one in the future.
After approval of the liability form, it is sent to either the Foreign Currency
Accounts Departments or the Cash Department, as the case may be so that
the officer who scanned it in the first place could return the specimen
signature card to the account-opening department.
Once the S. S. Card is received back from the concerned official then the
liability form, the clients application along with the specimen signature card
is pasted in the ledger right along side the original account opening form. The
form has to be pasted with the original account opening form even if the
account was opened a decade ago. In the computer as well all the entries and
records related to that particular account are permanently deleted by using
the close account option.
VARIOUS
TRIBULATIONS
THAT
M AY
ARISE
If clients signatures are not mature enough
In this particular case in order to facilitate proper recognition of the client a picture
account is opened and two pictures of the client are taken; one is affixed on the top
left of the account opening form and the other is affixed on the Specimen Signature
card. The stamping of such an account opening form is also somewhat different. On
every picture a round stamp of Bank Alfalah Limited is affixed. The stamp is put in
such a manner that it covers both the picture and the account opening form or the
specimen signature card whatever may be the case. Another stamp is put on the
account opening form that says all cheques to be signed in the presence of the
bank officer.
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If a client wants to change his/her signatures
In this specific situation the staff of the account opening form has to ask the client
to give an application requesting a change in the operating signatures. This
application should contain the old signatures which function as a proof that this is
the very client and no one else is changing the signatures on his behalf. The
application should also contain the new signatures with which the account would be
operated in the future. The staff after verifying the old signatures from the
computer gets a new Specimen Signature card signed by the client (the client puts
his new signatures on the S. S. Card). The new signatures are approved, admitted,
scanned and properly stored for future reference.
The account of a minor.
In case a minor wants to open an account with the bank then a relatively different
procedure is followed, reason being that the minors do not possess their National
Identity Card. So, the staff of account opening department requires the national
identity card of the father / guardian. Along with the national identity card of the
minor the bank staff will also require the minors form-B. The guardian would sign
the account opening form, he would also give his signatures in the specimen
signature card, and he would also sign the Cheque book requisition i.e. the bank
would first admit and later on verify the signatures of the guardian and not the
minor. The cheques would be cashed with the signatures of the guardian. In the title
of the account first the name of the minor would be written and then the name of
the guardian will follow. Thus practically the account would be run / maintained by
the guardian. But there is a provision that when the minor becomes a major and
gets hold of his N.I.C. then, upon his application the account could be transferred in
his name.
Issuance of a cheque book.
Cheque book issuance is of considerable significance as it is through cheques that

the withdrawal of money becomes possible. When a prospective client is handed
over the account opening form, he is also given the cheque book requisition. A
Cheque book requisition basically serves as a request performa, in which the client
asks for the issuance of a new Cheque book, writes the account title, gives the
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account number and also specifies as to whether he requires a Cheque book

consisting of twenty five, fifty, or hundred leaves.
File update.
All the entries, which the staff of the account-opening department makes in the
computer system, are corresponded to them the next day in printed form by the
computer department. The entries, which the staff of the account-opening
department makes, are namely
Entries related to opening of a new account.
Entries related to issuance of a Cheque book.
Entries necessary to record any alterations which may take place in the
clients data.
This feedback is given to the account-opening department so that they could

scrutinize the data fed by them for any possible mistake. For example the there
could be some mistakes in the spellings or there could be some mistakes in the
addresses of the clients or the telephone number might be missing etc. If the print
outs show any mistake that is corrected and if every thing is satisfactory then these
print outs are filed for future records and reference.
OTHER TYPES OF ACCOUNTS

TERM DEPOSIT ACCOUNTS:
Term deposit account is essentially a fixed deposit account. It is opened if a
customer is willing to deposit his funds with the bank for a period within which he
cannot withdraw his money. In case a customer withdraws his amount then he is
given no interest at all on the principal. Normally people tend to fix their deposits
with the bank for a relatively longer period of time (3 years, 5 years etc.) although
the facility of opening a term deposit account is also offered for short tenors like 7
days, 30 days etc. reason being that as there is a positive relationship between the
tenor and the rate of interest i.e. longer the tenor higher would be the rate of
interest. Customers benefit by opening a fixed/term deposit account as they earn a
higher rate of interest which cannot be earned if you are operating, say for example
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a savings account. At this point one thing must be taken into immediate
consideration that only those people will fix their money that do not face any
problem regarding liquidity, people having one would feel contend with a lower rate
of interest but would certainly go for some other account like royal profit or savings
account. Banks benefit by opening a term deposit account as funds are placed with
them for a longer period of time and the bank can earn a lot by advancing these
funds more than once, specifically if the advancing is short or medium term.
At Bank Alfalah Limited, fix deposit accounts can be categorized into two types;
Classic PLS deposits.
Royal Patriot (Special Term Deposits).
The nature of both of these accounts is similar i.e. both are fixed deposit accounts,
but the only difference is regarding the rate of interest. In case of Classic PLS
deposit accounts the rate of interest that is offered is not related to the magnitude
of the amount that is being deposited rate of interest is only correlated with the
tenor for which the amount is being deposited.
C A L L D E P O S I T R E C E I P T:
Issuance of call deposit receipts is basically a free of cost facility offered by Bank
Alfalah Limited not only to its own customers but also to walk in clients. When
government organizations, or for that matter non government organizations float
tenders for execution of a particular task, they require that the organizations who
are participating in that tender i.e. organizations who have applied for the tender
should, along with other documents, also submit a monetary guarantee certifying
that they will definitely perform the required task upon acceptance of their offer.
This requirement is basically put forth in order to safeguard the government
organization from facing a situation in which the participants show inability or
inadequacy to perform the required task after acceptance is granted in their favor.
Such a situation generally is not desirable as the government organizations have to
under go the procedural steps of floating and accepting the offers and in the
process they have to incur additional costs. For this purpose the call deposit
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receipts is issued which is a monetary guarantee that if the organization

does
not
work
as
per
the
tender
requirements
the
government
organization can en-cash the call deposit receipt and recover its losses.
SOME
IMPORTANT
DOCUMENTS
USED
IN
T H E A C CO U N T O P EN I N G D EPA RTME N T
Liability Form
This particular form is used when an account is to be closed. The staff of account
opening department, after filling in the name and account number of the client
forwards this form to the credit department and the trade finance department who
upon receipt of such liability form make required scrutiny so as to check whether or
not the customer owes some money to the bank or not.
Account Statement Request Form
This small form is used to request for the account statement for the desired period.
The client gets this Performa from the account-opening department and then, after
filling it up, gives it to the computer section that gives the statement to the client in
printed form.
Vernacular Form
This form basically functions as a thank you letter (and also as a request) on behalf
of the customer if he wants to operate his account by doing signatures in a
language other than that of English. In this particular form the client gives his
assurance in writing that he would indemnify the branch against any loss that may
be caused by reason of his signing in a language other than that of English.
Issuance Requisition
This requisition is used by the staff to order for any thing (e.g. stationary) they
need. They write the type and quantity of the stationary they need, get it signed by
the Manager Operations, give it to the person in-charge of issuance of stationary
who on receipt of this requisition (duly signed) issues the stationary.
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Debit And Credit Vouchers
These two vouchers are basically used when an account has to be closed. The debit
voucher shows as to how much amount has to be taken from the clients account
and the credit voucher shows as to hoe much amount has to be credited as Banks
income, in order to facilitate the account closing process.
Application To Close The Account
This is a pre printed application of the bank in which the client fills in the account
number, the title of the account and the type of account and requests the branch
manager to close his account with the Bank.
Application To Change The Address
This is again a pre printed request form in which the client fills in his name, account
number, telephone number/s and the new address so that he could communicate
with the bank and receive all the notices, statements and other necessary
document which the bank might send through mail depending upon the
circumstances.
Mandate Form Used By An Individual To Enable A Third Party To Operate The

Account
An individual to enable another individual to operate hi/her account without

changing the title of the account uses this form. In this form the account holder
certifies that the person to whom he is giving the mandate shall be fully authorized
to embark upon all possible transactions with regard to this account unless and until
otherwise specified. The original account holder writes his account number, the title
of the account, and puts his signatures. The signature specimen card to be filled by
the person who is being given the mandate is attached with this form. That
individual fills it up and his signatures are also scanned and entered into the
computer system for future reference in similar fashion as the signatures of a new
client are scanned and entered into the computer system.
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CHAPTER
FOUR:
THE
COLLECTIONS
DEPARTMENT
When cheques and other negotiable instruments drawn upon other banks outside
the city (Lahore) are presented in Bank Alfalah Limited, Township Branch, Lahore to
deposit in payees accounts, then instead of clearing, these instruments are lodged
in collection and constitute outward bills for collection.
Cheques of cities, where Bank Alfalah Limited branch exists (e.g. Islamabad,
Faisalabad etc.) are sent to that branch where these cheques are lodged in outward
clearing. Otherwise, they are directly sent to the drawee bank. Postage & other
charges are deducted on account of payee according to Schedule of Charges.
As Bank Alfalah Limited, Township Branch, Lahore did not have enough workload,
Mr. Mersab Ahmed was given the task of accepting the outward bills for collection.
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CHAPTER FIVE: THE CLEARING

DEPARTMENT
One of the basic economic function of commercial banks is to receive deposits and
to honor cheques drawn upon them. So, cheque is a most commonly used
instrument for making payments by account holders. Along with the cheques, there
are some other negotiable instruments that are used for making payments and are
drawn upon a bank. But cheque holds prime importance in banking.
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
OUT WARD CLEARING

When cheques and other negotiable instruments drawn upon other banks like MCB,
ABN-AMRO of the same city (as Lahore) are presented in Bank Alfalah Limited to
deposit them in the respective payees accounts, these instruments are lodged in
outward clearing of Bank Alfalah limited.
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STAMPS PUT ON THE CHEQUES

When the cheques are presented in BAL to be deposited in their respective payees
accounts, different stamps are put on cheques before their lodgment in outward
clearing.
C R O SS I N G T H E C H E Q U E S
Crossing means two parallel transverse lines, drawn across the face of the cheques
with or without words written in between them. Crossing may be general or special.
In clearing, cheques are crossed specially. Cheques are stamped with banks name
between two transverse parallel lines to constitute special crossing. After the
cheques have been crossed specially, the holder cannot receive payment except
through the banker named on the cheque. Basic advantage of crossing is to save
the instrument to go it from illegal hands. If, a crossed cheque is lost or stolen,
there is no risk of wrong payment. So it is an effective means of minimizing the risk
of loss or forgery.
C L E A R I N G S TA M P
After the cheques have been crossed specially, clearing stamp is put on the
cheques and other instruments, with the following days date, as these cheques
would have to be presented in their concerned drawee banks on the subsequent
day.
E N D O R S E M E N T S TA M P
The word endorsement is derived from Latin word indorsum that means on the
back. Ordinarily, it means anything written or printed upon the back of an
instrument. So, at the end, the cheques are endorsed in full (endorsed specially) by
putting the stamp with words describing Payees account Credited in Bank Alfalah
Limited, Township Branch, Lahore.
After putting these three stamps on cheques & other negotiable instruments, they
are sent to NIFT (National Institutional Facilitation Authority) with Add List.
NIFT after segregating the cheques of different banks delivers them to their
concerned banks, which constitute the inward clearing for those (drawee) banks.
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I N WAR D C LEAR I NG
Cheques and other negotiable instruments (PO, DD, PS, CDR etc.) drawn Bank
Alfalah Limited, Township Branch, Lahore, sent by other banks, constitutes the
inward clearing of Bank Alfalah Limited. After having all the stamps and dates of
cheques confirmed, the concerned drawers accounts are debited (in Bank Alfalah
Limited, Township Branch, Lahore) and main branchs account is credited by the
total amount.
RETURN IN INWARD CLEARING

In case of cheques dishonored (returned) due to some deficiencies, the main
branchs account is debited by the amount of cheques returned.
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CHAPTER SIX: ONLINE

TRANSACTIONS
During my rotation to the Remittances department, I used to spend some time in
the evening with Mr. Muhammad Jahangzeb, who was the incharge of the online
transactions. He was an M. Com. graduate of Hailey College of The University of the
Punjab and, as we were University fellows, helped me understand the functioning of
the Online Transactions between branches of Bank Alfalah Limited.
Online transaction is a facility which is being provided to those account holders of
Bank Alfalah Limited who maintain a current account with he bank and also
maintain a minimum balance of Rs.100,000 at all times. If a person fulfills these two
conditions then he has to fill up a request form in which he requests that his name
should be added in the list of clients to whom this facility is presently being
extended. He also gives his account number, and the branch or branches with which
they want to initiate online transaction. With the help of online facility it is possible
for clients that they can get cash from their account in e.g. Islamabad while
standing at the counter of Lahore Branch or they can deposit money in a persons
account in Main Branch Karachi to whom they have to make a payment, while
standing at the counter of Multan Branch. All this has been possible due to the use
of centralized MIS system and Bank Smart Software, along with a network of highly
sophisticated servers at all branches through out the country.
The very first thing the concerned official does, when he receives a request by the
customer, is that he verifies the clients signature by comparing them with the
signatures which are there in the banks records. If there is nothing wrong with the
signatures then the case has to be approved by the manager. After his approval the
officer writes a letter addressing the branch (supposing that the person wanted
online facility with only one branch), requesting the branch to add that person in
their online clients list. In this letter we would mention the persons name and
account number. Suppose the branch with which the client wanted to have online
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transactions was Bank Alfalah Limited, Multan Branch. Now if some person (who has
his account in Multan Branch) has to make a payment to our client who has his
account in Bank Alfalah Limited, Township Branch, Lahore, he would present the
Cheque at Multan Branch and direct them to deposit it in account # ____ at
Township Branch, Lahore through online transaction.
Multan Branch would inform Township Branch, Lahore through an I.B.C.A. (Inter
Branch Credit Advice) that would be faxed to Township Branch, Lahore.
Before I go any further it would be pertinent to mention here that the amount with
which online transaction is being done should be greater than Rs.50,000 in order to
make the transaction cost free. If the amount is less than Rs.50,000 then Rs.100
would be deducted as charges from the account which is being credited as a
consequence of the online transaction. Moreover another pre requisite of online
transaction is that all the cheques involved in an online transaction have to be cash
cheques.
Now suppose the Cheque is of Township Branch, Lahore and the person wants to get
it en-cashed at Faisalabad Branch. He would hand over the cheque to the concerned
official at Faisalabad Branch and direct him that he wants the cash through an
online transaction. The concerned official would fill a request form the contents of
which are; date on which the request form is being filled, date which is written on
the Cheque handed over to him, the title of the account, the account number and
the Cheque number. After filling in the online transaction request form they would
paste the Cheque at the request form and fax it to Township Branch, Lahore. The
concerned official upon receipt of this fax would first of all verify the persons
signatures on the Cheque (as his account is with Township Branch, Lahore).
When the official does this, the computer system would generate an IBCA that will
be faxed to the Faisalabad Branch. Faisalabad Branch would make sure that the
dates; the amount and the Cheque number are the same as in the request form and
Cheque faxed by them. Two officers holding power of attorney would also sign the
IBCA sent by Lahore Branch. Faisalabad Branch would verify the signatures of the
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two officers by comparing them with the signatures in Bank Alfalahs Specimen
Signature Book.
After crediting the partys account the concerned official would again debit that
account and would hand over cash to the person who initiated the online
transaction (i.e. he would credit cash).
At day end the online personnel of every branch has to make two separate lists of
all the debits and all the credits which were executed as a result of various online
transactions. Both of these statements are faxed to the reconciliation department of
Head Office that very evening or the next morning. The contents of these lists are;
serial number, IBCA number, city with which online transaction was done, amount,
date, and whether the branch was the Originating Branch or the Responding
Branch.
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CHAPTER SEVEN: ALFAL AH CAR

FINANCING
After the remittances department, Mr. Farooq Shehzad handed me over to Mr.
Osman Latif, who was the Manager Credits of the Township Branch. Mr. Osman, after
consultation with me, decided to let me spend some time in the Car Finance
Department. Two officers of this department, namely Mr. Abdul Khaliq and Mr.
Farrukh Naeem sat on the first floor of the branch building.
Although the Township Branch was a small and emerging branch, still the demand
for financed cars through Bank Alfalah lead this department to prosper a lot. This
department handles a large number of customers daily and, without overstatement;
this department is the second busiest department after the Account Opening
Department. It requires constant customer interaction and requires high level of
intelligence to screen the validity of the customers.
Where as sound marketing skills are required to actually force the walk-in customer
to select Alfalah Car Financing, still stronger skills are needed to scan the incoming
customer for validity and long-term liquidity. This is because the client has to pay
only 20 % of the actual price of the car (minimum) where as the bank has to put in
the rest 80 %. He rate charged by Bank Alfalah for the car financing is 17% (this
rate was one of the lowest in June August 2002, where as most recently the rate
has been reduced steadily to 8.9 % and 9.5 % for Pak- Suzuki manufactured cars
and for all other brand cars respectively). Another thing to note here is that Bank
Alfalah Limited only finances brand-new cars. It does not finance second hand
cars because of the concern of exploitation or improper ownership at the time of
sale.
I spent only 2 3 days in this department. This time period was quite enough to get
the knowledge of the working of this department. Although there are some points
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where my knowledge is limited, in most of the instances I have tried to give an allinclusive outlook of the department.
The procedure followed to finance a car is briefly discussed in the following lines:
STEP
ONE:
THE
CLIENT
SUBMITS
A P P L I C AT I O N
AND
REQUIRED DOCUMENTS
The very first thing the client has to do is that he has to give an application
requesting the bank for financing of a car. Along with the application the client is
suppose to attach some documents which are
Copy of N.I.C
Copy of Utility Bill(s)
Bank Statement for last six months (from the date of application)
Signature Verification Form
Proof of Proprietorship/Partnership
The application form along with the personal data also contains the home address,
the address of the place of business (if the client is a business man), and two
references. These three things are of immense significance for the verification
officers. Moreover in the application form the client has to mention how much down
payment he is going to make. It is a policy matter of Bank Alfalah that the minimum
percentage of down payment is 20 % i.e. the client must at least pay 20 % of the
sale price as the down payment. If a client feels like paying a higher percentage as
down payment than there is no higher limit; he can pay as much he wants to,
provided that after he pays his down payment the amount to be financed by the
bank does not go below Rs.200,000. The down payment apart from 20% (minimum)
of sale price also includes
Processing charges
Advance first months installment (this is not included if the client opts for
deferred installment)
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First years insurance premium
Registration charges
The I.R.R. (internal rate of return) Bank Alfalah offers is one of the minimum in the
market at this point in time i.e. 17%. A list of IRRs offered by various banks is as
under;
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O R G A N I Z AT I O N
MARKUP
( J U N E AU G U S T 2 0 0 2 )
City Bank
18%--19%
Askari Bank
18%--19%
Standard Chartered Bank
18%
Faysal Bank
16%--18%
Union Bank
17%
Another important thing that is relevant to mention is that Bank Alfalah provides the
facility to the clients that they can get a package of loan repayment period of any
thing in between one year and five years.
S T E P T W O : V E R I F I C AT I O N P R O C E SS BY T H E V E R I F I C AT I O N
OFFICERS
This step embodies immense significance as the results of this very step reveal
whether the client is genuine and trustworthy and whether all the details provided
by him are true or not. What the verification officers do is that they first visit the
house of the client and certify that the client has provided the bank with the correct
residential address. Then they inquire about the conduct, character, behavior,
occupation, and other activities of the client from at least two of his/her neighbors.
After being satisfied the verification officers visit the place of business (if the client
is a business man). There they first make sure that the said business actually exists
and the factory/organization/company actually is situated at the said place. The
verification officer also makes sure of the following things
A satisfactory number of workers are there at the place of business
A satisfactory number of machines are there in working condition
The covered area is in logical compliance with the nature of business
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Then the verification officers either visit or call any one or both of the references
given by the client in the application form. Questions of similar nature are put forth
to these individuals. When all aspects of the verification process are complete then
what the verification officers do is that they prepare four reports namely
Business office verification report
Residence verification report
Reference verification report
Telephone verification report
These reports are than filed in the proposal file and these constitute an integral part
of the proposal.
S T E P T H R E E : P R E PA R AT I O N O F T H E P R O P O S A L F I L E
Once
the
customers
credibility
is
verified
then
the
file
is
prepared
for
acceptance/approval by the branch Credit Committee and subsequently by the

Head Office. This preparation calls for attachment of certain documents apart from
those that were provided by the client along with the application. These documents
are
Borrowers Basic Fact Sheet
The Proposal Sheet
A Check List
Credit Information Bureau Report
Verification Reports
Printed Statement of Customer Inquiry Generated by the System
STEP FOUR: EXECUTION OF LEGAL DOCUMENTS

After the approval stage the client is called to the branch and the process of legal
documentation is under taken. For this purpose the operations personnel gets the
signatures of the client on all the legal documents including the offer letter which is
of prime importance. The list of legal documents the client has to sign is as follows;
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The account opening form as a result of which the client (if he wants a
current or PLS account with Bank Alfalah) could give the post-dated cheques
for payment of installments
The letter in which the client acknowledges the Finance Limit that has been
provided to him by the bank
The agreement for financing the motor vehicle on Morabaha Basis
The schedule to Morabaha agreement
Letter of hypothecation of motor vehicle
Irrecoverable power of attorney
Letter of authorization to take possession of motor vehicle
Bill of exchange without recourse to the drawer
Delivery acceptance form
Transfer letter
Promissory note
Letter of hypothecation of movables
Apart from these legal documents one of the most important documents is the
offer letter. The offer letter basically consists of a brief description of the
following;
Amount Of Finance Facility
Mode Of Financing
Period Of Finance Facility
Purchase Price Payable
Markup / Pricing
Payment Schedule Of Purchase Price
Insurance Premium
Prepayment
Documentation
Down Payment
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Administration Fee / Processing Fee
Availability
Cancellation
Purchase Of Motor Vehicle
Disbursement Of Purchase Price
S T E P F I V E : R E C E I P T O F D O W N PAY M E N T A N D P O S T D AT E D
CHEQUES
When all the legal documents are properly signed then the customer is asked that
his share of financing (the down payment) is required. As I mentioned above that
the down payment apart from 20% of the sale price also includes the processing
charges, the registration fee, the insurance premium of first year, and Advance first
months installment (if the client opts for advance installment). The customer
comes to the bank deposits this amount and also gives the bank post dated
cheques, duly signed. These cheques are of the amount of installment due to the
customer on monthly basis.
STEP SIX: GETTING THE CAR INSURED

Now comes the step to insure the car for which the financing is done. The bank has
to get the car insured, as it is a part of the car financing agreement that the car has
to be fully insured. What the bank does is that it issues a letter addressing the
insurance company specifying all the details of the car to be insured and also
communicates this to the insurance company as to which show room the insurance
inspector will have to go to locate the said car. The inspector goes to that particular
show room and, after duly inspecting the car makes an inspection report. The
preparation of inspection report serves as an informal guarantee of the preparation
of the insurance policy. After two or three days of the preparation of the inspection
report the representative of the insurance company comes and hands over the
insurance policy to the bank. This insurance policy is in the name of the respective
client, but care of Bank Alfalah Limited is vividly marked.
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S T E P S E V E N : E S TA B L I S H M E N T O F D E L I V E RY O R D E R A N D
DEMAND
DRAFT
(IN
THE
NAME
OF
THE
M A N U FA C T U R E R )
When bank has got physical possession of the insurance policy the car dealer is
suppose to send the bank a quotation of the car being sold, on his official letter
head. On the basis of that quotation we make the delivery order, which contains the
instructions for the dealer that now he, should hand over that car to the customer.
The bank will not pay to the dealer the bank would make a Demand Draft in the
name of the manufacturer and hand it over to the dealer and the dealer would give
it to the manufacturer. Now the question arises as to why the bank not makes a
demand draft in the name of the dealer. If we are issuing a demand draft in the
name of the manufacturer it serves as a guarantee that we are buying a new zero
meter car of 2002 model as manufacturers have no car with them other than the
latest version. Moreover it is a policy matter of the bank that no demand draft of car
financing department would be issued to a person/organization other than the
manufacturer.
S T E P E I G H T: G E T T I N G T H E V E H I C L E R E G I S T E R E D
When the manufacturer gets the payment against the demand draft then he sends
the Invoice to the bank. This invoice contains all the details of the vehicle namely;
price, customer name, bank name, color of the vehicle, mode of payment etc. If the
car is completely ready for the delivery this invoice will also contain the engine
number and the chassis number, but if the car is not ready for delivery i.e. it is in
the booking process than the invoice will not contain these two items. The bank
gets the vehicle registered with the help of its private agents on the basis of this
invoice. The agents get Rs.1100 per car they get registered.
S T E P N I N E : R E C E I P T O F M O N T H LY I N S TA L L M E N T
Now when the car is with the customer and he is fully enjoying it what the staff of
car financing has to do is that it has to present the pre-signed post dated cheques
on monthly basis, and if a Cheque bounces the recovery staff has to get the money
from the customer. If three cheques of a particular client bounce on a trot and the
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client also does not bother to make payment through cash or via issuance of
Cheque of another account then Bank Alfalah, as per the signed legal documents
has the right to repossess the car, which it does.
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CHAPTER EIGHT: CREDITS

DEPARTMENT
Credits Department is one of the most important departments of any commercial
bank. Credits Department is the department where the top-notch officers perform
their duties in every bank.
The last part of my internship rotated me to the Credits Department, where I spent
almost three weeks. It constituted of only one officer in the beginning but, as the
branch was expanding at a very healthy rate, the branch manager requested the
appointment of a Manager Credits. Thus Mr. Osman Latif was appointed as
Manager Credits (Corporate and Consumer) to help out Mr. Zubair Baig (Officer
Corporate & Consumer Banking). Mr. Zubair was working in the branch from its
initial days and had seen the branch go through good and bad days.
Every fresh inductee of any commercial bank dreams of starting his career as a
credit officer. Certainly, the effectiveness and efficiency of credit officers also
directly impacts the income generating capacity of a commercial bank. This is
because these individuals earn the income for the bank. The deposits that a bank
receives are its liabilities and on that it has to pay a certain amount of profit as
return. Whereas, the advances that a bank makes through the credit department
are its assets and it receives certain return on them. This is the main income of any
commercial bank. The bank receives money on lower rates and advances them on
considerably higher rates, thus keeping the spread for itself as its income.
CREDIT POLICY OF THE BANK

The credit policy of any banking institution is the combination of certain globally
and locally accepted time standards and other dynamic factors dictated by realities
in ever-challenging market and industry.
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The extension of a credit facility should add value to the banks assets should be
borne by the bankers. For this purpose the bank takes special care for judging the
Ability to repay
Willingness to pay
Ability to pay
The ability of a client to repay can be judged by the financial statements of the
customers company. To avoid the danger of fake statements the SBP has put on
some regulations on all the banks, which are called as prudential regulations. Every
financial institution is bound to follow these rules in advancing loans, e.g. all the
credit institutions is bound to lend the customers having current ratio of their assets
equal to minimum 1:1.
Willingness to repay
The willingness to repay can be determined by verbal discussion with him or CIB
(Credit Information Bureau) report.
BASIC
PHILOSOPHY
OF
BANK
A L FA L A H
LIMITED
The basic philosophy followed by the Credits Department at Bank Alfalah Limited is
THE EXTENSION OF A CREDIT FACILITY SHOULD

ADD VALUE TO THE BANKS ASSETS
Defining items like
Extending credit facilities for trade finance and construction / contractor

financing for short term to medium term and on self liquidating basis,
supported by cash flows and acceptable collateral
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Providing finance for working capital in the fields of manufacturing, assembly

and processing of goods and commodities for domestic and / or export
markets, provided it is adequately secured
Well established traders dealing in particular products range with established

market presence, experience and track record
Highly valued Multi-National Companies and local Corporate Group
Joint ventures of established local groups and reputed foreign companies
During the time of my internship (June August 2002), Bank Alfalah Limited was
only indulged in Corporate Credits and did not provide Consumer Financing.
Recently, Bank Alfalah Limited has started Consumer Financing as well. It is
providing financing for items like
Televisions
Music Systems
VCD Players
DVD Players
Monitors
Refrigerators
Deep Freezers
Microwave Owens
Washing Machines
Ceiling Fans
Pedestal Fans
Room Coolers, etc.
The consumer financing facility is available for products of companies like
Philips
Haier
Super Asia, etc
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D EPA RTME N TA L I Z ATI O N

Credits department at developed branches of Bank Alfalah Limited is usually
segregated into
Credit marketing
Credit administration
CREDIT MARKETING
The principal responsibility of credit marketing is to attract good customers to avail
credit facility from Bank Alfalah limited. The people who constitute the creditmarketing segment of the credits department are termed as the credit officers.
Credit Officers are supposed to be really good at assessing and determining the
financial soundness of a company or an individual.
C R E D I T A D M I N I S T R AT I O N
The major responsibility of the people working in the credit administration is to
issue Guarantees, monitor the periodic disbursement of Pledged Commodities, and
perform the job of providing finance against Imported Merchandise and finance
against Trust Receipt.
Due to the small amount of work of the Township Branch as compared to the
established branches in Lahore like the LDA Plaza Branch and the Gulberg Branch,
no distinction was made between the officers for Credit Marketing or Credit
Administration.
TYPES OF BORROWERS
Before a bank starts lending, it has to classify its target customers in to groups of
similar ones in order to simplify the provision of credit to them. Bank Alfalah Limited
has divided its clients into the following heads
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Individuals
Existing account holders
Staff members
Close relatives of staff members
Business sponsored by staff members
Employees of other banks
Joint accounts
Business entities
Sole proprietorship
Partnership
Limited liability company
Joint venture
Group accounts
Others
Clubs and associations
Federal, provincial and local government bodies
Traders
Contractors / construction companies
Transport, storage and warehousing
Property dealers
Manufactures
KINDS
OF
CREDIT
GENERAL
OVERVIEW
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Now I shall discuss the basic kinds of credit offered at commercial banks. Bankers
do not decide about the time span for which he amount is going to outstand. The
time span is related to the purpose for which the loan is taken for, and the rate of
interest charged is in turn related to the time span. The three basic kinds of credit
have been transformed in to various credit facilities/products by commercial banks.
The main kinds of credits are
S H O RT T E R M C R E D I T
Short-term credit is that type of credit that is to be repaid with in a time span of
one year. Short-term credit requirement is usually seasonal in nature. There are
four predominant purposes for which short term credit is availed. These purposes
are
Creation of current assets
Meeting of working capital requirement
Purchase of raw material
Repayment of current liabilities
Short-term credit secured by 100% cash margin is considered to be the ideal way to
extend this type of credit.
MEDIUM TERM CREDIT

In this age of contemporary banking, it really is very difficult to separate medium
term credit from long term credit when we talk with respect from the view point of
the purposes these two kinds of credits fulfill. Medium term credit is a credit facility
that is usually extended for a time span of some where between one to three
years. Business concerns normally utilize this type of credit for the purposes of
purchase of furniture, fixtures, and small-scale machinery.
LO N G T E R M C R E D I T
Long term credit, theoretically speaking, is a type of credit that is extended for a
relatively long time (which may extend to ten years), but practically speaking long-
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term credit facility is extended for a time span of not more than five years. The
purposes for which long term credit is availed are
Capital Expenditure / Expansion of plant
Balancing, Modernization, and Replacement (BMR)
Purchase of Fixed Assets
KINDS
OF
CREDIT
OFFERED
BY
BANK
A L FA L A H L I M I T E D
OV E R D R A F T ( O D )
Over Draft is a credit facility which functions with the help of the debit and credit
mechanism of the respective customers account. A particular customer on the
basis of his individual track record is assigned a particular limit, which is termed as
an Over Draft limit. Now by virtue of sanction of OD limit the customer can with
draw a particular amount from his account even in excess of the credit
balance in his account. This excess with-drawl allowed is the real facility. But the
extent of excess with-drawl cannot exceed the amount of the OD Limit approved. As
long as the excess amount remains in the debit balance (i.e. as long as customer
utilizes that amount), interest is charged on the outstanding amount on daily
product basis. When the amount is returned charge of interest is ceased. If over
draft credit is a guaranteed one than interest is charged on the entire amount
approved as OD limit, whether utilized or not.
CASH FINANCE (CF)

Cash finance is a very popular form of short-term credit. The predominant purpose
for this kind of a credit, as has been discussed above, is fulfillment of the
working capital requirement. Preferably bankers love to extend this kind of
credit facility if secured against hundred percent cash margin. But this fact certainly
does not mean that cash finance is not extended against pledge of goods or
hypothecation of machinery etc. It all depends on the credibility of the customer. In
case of cash finance a certain limit is approved and the customer is allowed
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to avail the amount whether all at once or as and when needed. One basic
reason for the popularity of cash finance is that interest is charged only on he
utilized amount not on the entire amount which has been approved for use.
LETTER OF CREDIT (L/C)

Letter of credit is a short-term non-fund based finance facility. LC is a banks
written undertaking given to the exporter for payment of a certain sum of
money on behalf of the importer, provided the exporter tenders to the bank,
or its overseas agents, the specified documents within a specified period in
accordance with the terms of the undertaking.
L E T T E R O F G UA R A N T E E ( L / G )
Apart from letter of credit Bank Alfalah Limited also extends another non-fund based
credit facility for its customers i.e. Letter of Guarantee or more commonly known as
Guarantees. The basic difference between a letter of credit and a letter of
guarantee is that in case of L/G the liability has to be retired four or five days before
the actual date of maturity, but in case of L/C the customer can retire his liability
after maturity after paying some amount as interest. The various types of
guarantees given are Bid Bonds, Performance Bonds, and Shipping Guarantee etc.
F I N A N C E A G A I N S T I M P O RT E D M E R C H A N D I S E ( F I M )
In case of finance against imported merchandise, the importer gives the imported
goods into the effective pledge of the bank and avails the credit facility against the
pledged goods. There is a slight technical difference between pledge and effective
pledge. In case of pledge the imported goods come under the banks ownership
when they reach the desired godown that is under the supervision of the
Muqadams, appointed by the bank. But on the other hand in case of effective
pledge the goods are under the ownership of the bank even when they are being
transported from the port to the godown. So, in case of effective pledge the bank
must make sure that the goods are comprehensively insured.
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FINANCE AGAINST TRUST RECEIPT (F A T R)

The mechanism with which Finance Against Trust Receipt works is identical to that
of Hypothecation. The logical rationale behind FATR is that all the imported goods
cannot, by nature, be given to the effective pledge of the bank; imported goods
could be of perishable nature or they could be of central importance for the
operations of the business concern. In such a case the goods are hypothecated and
finance is extended.
LO C A L B I L L S P U R C H A S E D - - - D O C U M E N TA RY ( L B P D )
This particular type of credit is again aimed toward helping out business concerns
with their working capital requirement. Suppose company A sells goods to company
B on a credit of 90 days. Now the remuneration for these goods is going to be
received after a time span of 90 days, and during these 90 days company A needs
money for its working capital. What company A does is that it draws a bill on
company B negotiates that bill with the bank i.e. Bank Alfalah Limited purchases
that bill and receives the amount, after 90 days from the company B. This kind of a
credit facility is LBP D for company A.
CREDIT PROPOSAL
In order to avail any of the credit facilities a proposal (case) has to be made, and
also approved, by the Branch Credit Committee and then subsequently by the
Credit Division at the Head Office. The credit proposal can be categorized in to two
types
CREDIT LINE PROPOSAL (C L P)

A credit line proposal is made for those clients whose credit limit has been approved
by the banks credit department.
ONE TIME TRANSACTION (O T T)

An OTT is prepared for a client who has no approved credit limit, but the bank is
doing business with that client on a one-time basis.
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LENDING PRINCIPLES
PRINCIPLES
The principles laid down by the Credit Division at the Head Office are as under
Know your customer
Know the purpose of the facility
Know the profitability of the applicant
Know the source of repayment
Asses the securities
Tenor of facility
S B P R E G U L AT I O N S
The state bank of Pakistan has laid down some principles in regards the lending of
credit to customers. Prudential regulations form the backbone of such regulations.
Prudential regulations forbid the banks to take up exposure to a single borrower or a
group of related borrowers in excess of 30 % of the banks equity base of which
Fund Based (Cash Finance or Term Finance) should not exceed 20 % of the
banks equity
Non Fund Based (e.g. Letters of Credit, guarantees) can be allowed to any
extent within the parameter of 30 %.
ATTRIBUTES
OF
GOOD
TANGIBLE
SECURITY
I would like to put forth a detailed analysis of the major kind securities as follows
that are kept while extending loans i.e. bankers lien, pledge, hypothecation,
and mortgage. A good banking security should have most, if not all of the
following attributes
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Transferability
Ascertain ability of value
Stability of value
Marketability
Liability
Storability
Durability
Transportability
Superior yield
S E C U R I T Y A N A LY S E S
Sound bank lending is based on the understanding that the borrower is willing and
able to repay the advance within a reasonable time from trading receipts and profits
or from other sources. Nevertheless, because the bank is lending its depositors
funds, prudence demands that security should be taken so that the bank may
realize them to liquidate the advance in case through unforeseen difficulties,
repayment from normal sources is not forthcoming. There are several methods by
which a charge may be created on an asset by the borrower in favor of a lender,
both formal and informal.
BANKERS LIEN
Lien is the right of a creditor, who is in actual or constructive possession of his
debtors property, to retain such property until the debt due to him has been repaid.
The borrower is still the owner of the property, but the lender has possession of the
property.
A lien may be either
A particular lien, which arises from the particular transaction, connected with
property subject to lien e.g. a carriers lien for his charges on goods carried.
General lien, which arises out of general dealings between the two parties
e.g., banks lien.
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A bankers lien is a general lien on all goods and securities that come in to his
possession as a banker, unless there is an express or implied contract inconsistent
with a lien. To be subject to lien the property must come in to the hands of the
banker to be dealt with in his ordinary course of business as a banker. Securities
deposited with a banker for safe custody are not subject to lien. Where the holder of
a bill has a lien on it he is deemed to be a holder for value to the extent of the sum
which he has lien, and in such circumstances the banker could sue on the bill in his
own name A banker has lien on all bills, cheques and notes sent to him by a
customer for collection, where the customer is indebted to the banker. A bankers
lien has been defined as an implied pledge, whereas ordinary lien does not imply a
power of sale, a pledge does. Accordingly a banker has a power of sale over such
securities on which he has a lien, subject to reasonable notice to his customer.
PROCESSING OF LOAN APPLICATION

Whatever money the banker holds is that of his customers who have entrusted the
bank only because they have full confidence in the expert handling of money by
their banker. Therefore, the banker must be very careful and ensure that his
depositors money is advanced to safe hands where the risk of loss does not exist.
So, when a customer requests his banker to facilitate him with different credit
facilities. The banker, first, assess the credibility of customer and the market
conditions. The elements of character, capacity, capital and market conditions help
a banker in arriving at a conclusion regarding the safety of advances.
Character
It is the most important factor in determining the safety of advances, for there
is no substitute for character. A borrowers character can indicate his intention
to repay the advance, since his honesty and integrity is of primary importance.
If the past record of the borrower shows that his integrity has been
questionable then the bakers usually try to avoid such a customer.
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Capacity
This is the management ability factor, which tells how successful a business
has been in the past, and what are the future possibilities are. Before
advancing loan a banker must be satisfied with the sources of the repayment
of the funds.
Capital
The bankers also check the property capital of the borrower. This property can
be kept as a security of loan. In other words if the businessmans financial
condition is sound then can be given certain amount of credit, otherwise not.
CIB Report
Bank cannot sanction any credit to a customer, unless it gets Credit report
from CIB (Credit Information Bureau, SBP). Before making any decision about
the client, bank needs a CIB report. Therefore, first of all, the banker requests
CIB to provide him the credit report of client. This report indicates all the credit
facilities (outstanding) availed by the client. It is to be obtained compulsarily
whenever the amount of loan exceeds Rs. 500,000.
STEP ONE: IDENTIFICATION OF RISKS

The first and foremost procedural step in the loan processing process is
identification of various kinds of risks. The essential responsibility of a Credit Officer
is Safe Placement Of Funds and in order to serve this purpose all sorts of risks
are to be first identified, which by no means a easy job to do, and then after
identification if not all majority of these risks should be minimized to such a level
that banks basic purpose is fulfilled i.e. timely repayment of the entire principle
amount along with the interest.
For risk analyses I would like to include in my internship report an extract from a
article written by Mr. Ahmed Nauman (Course Coordinator, Staff College, MCBPublished in the Journal of Institute of Bankers Pakistan, April 2002), which was
circulated by Bank Alfalahs Head Office in the Credit Department of all of its
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branches at the time I was in the Credits Department at Township Branch, bank
Alfalah limited, Lahore.
The General Risk Equation Encompasses The Combination Of One

Or All Of The Following Risks
Business Risk
Organizational Risk
Financial Risk
Collateral Risk
Documentation Risk
One dominant risk factor may disturb the overall credit risk management matrix
and in the assessment of the general risk, each factor requires an in depth analysis.
B U S I N E SS R I S K
This essentially translates into industry risk, market risk and supplier risk.
Industry Risk
Concentration of sales on any one industry enhances risk.
Product life cycle the shorter it is, the higher is the risk.
Existing and anticipated Government Policies / restrictions may increase

or reduce risks in a given sector.
Current levels of competition can result in reduction of existing profit

margins.
Planning of any big international or national player may change the whole
scene.
Market Risk
Concentration of sales on a single geographical area.
Single buyer focused sales.
Reputation of buyers.
Suppliers Risk
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Calculation of real costs from each supplier includes freight and handling
charges, length of time in transit, working capital and space tied up in
inventory because of large minimum order required to obtain a good
quotation or time to assure delivery on recorders and all other carrying
charges, ought to be considered in comparing suppliers.
Are there any discounts for cash? What is firms policy on issue?
Concentration of purchases from single geographic location.
Concentration of purchase from a single supplier. A breakdown or strike in

a suppliers plant could force to major operational disturbance.
Single currency exposure in respect of purchase.
Reputation of key supplier (s).
Ranking of suppliers in competition.
Seasonality of products.
Volume of sales wholesaler / retailer details.
Borrowers market share.
Borrowers marketing strategies of products.
Details of distribution channels.
O R G A N I Z AT I O N A L R I S K
Management
The quality of management and shareholders
Is the management professionally sound
Is the management academically qualified enough to identify and handle

problems.
Attitude of the management, is it conservation, aggressive or speculative.
Previous experience of the management in the same business, if any.
HRM analysis of the firm. Sometimes, due to one-man show, the most
performing individual may leave the organization that may adversely
affect the repayment capacity of the borrower.
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Are directors resident, a non-resident director may easily walk away from
commitment?
Shareholders commitment to fund expansion of business. A continuous

high dividend policy is a danger signal.
Relationship with the Bank
Their track record indifferent lines of business.
Any default history? With the bank/other banks?
Length of relationship with the bank?
Major historical changes or problems?
Product acceptability/demand in the market?
The experience of other banks with the client sister concerns?
Evaluate existence of any un-due reliance on key individuals. Would

succession
management be easy?
Key questions include: is the
organization a one-man show? Or does a team of profession run it?
The existence and quality of internal control system.
Poor control systems re reflected in over stocking invoicing which can

lead to both errors and frauds.
FINANCIAL RISK
What will be the initial costs for plant & equipment, materials & supplies,
insurance, fees, tax depots, installation costs, organization expenses etc.
investment Vs future income forecasting, scale of operations are also to be
looked upon.
Who will bear the cost/taxes of imported equipment? Component of FCY/LCY

in imported machinery?
How much additional cash or credit will be required to carry the business until
cash receipt equal or exceed cash outlays? This involves both an amount and
a time calculation of working capital flowing thought the following sequences:
a) Material, wages, operating supplies and expenses (b) work in process, (c)
finished product (d) sales (e) collections, which return cash to be placed back
into the system.
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In addition, contractual payments on mortgage or any other loan and on
equipment purchases coupled with such things as contingent liabilities have

to be calculated. There may be drain on cash until collections equal outlays.
Interest and exchange rate sensitivity analysis to both assets and liabilities.
Balance sheet and capital structure. Examine closely gearing i.e. debt equity
ratio. Is the borrower seeking to borrow all for the operational needs of the
business OR only a portion.
The firms should be supported by substantial capital to bear any external
shocks. Insufficient capital to absorb marker shocks may be a negative signal

as in case of any adverse change the firm may collapse.
In relation to industry standards, following ratios need to be analyzed.
Stock turnover
Debtors turnover
Current ratio
Liquidity ratio
Profitability ratios
Quality of fixed assets and their ageing status
Contingent liabilities
Analyze quality of the financial data. Quality may be assessed by a number of
variables such as rating of the auditors firm examining accounting standards
and practices and availability.
Purpose of finance: Matching principle? Working capital fund put to LT assets

buying use? Many a times, due to mere mismatching of assets and liabilities,
firm goes bankrupt. Long terms assets should preferably be financed by long
term liabilities and short term financing needs should be met only through
creation of short term liabilities.
Financial discipline standards within the company to ensure maximum

judicious use of funds employed.
Is the firm in the process or plans of acquiring any international rating or

standards like ISO-9000 certification?
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Does the company possess any room for contingencies. Some analysis argue
additional allowance for at least one major blunder during first two years of
operations of a newly established firm.
Tax Policy: is the firm paying taxes regularly or concealing. Taxes? If
concealing To what an extent?

Failure to control budget expenditures. Does any planning or forecasting,
(even rough estimates) exist? In absence of strategic planning, there are

increased risks of financing mismanagement and frequent (EOL) excess over
limits requests.
C O L L AT E R A L R I S K
Owing to a multiple dimensional problems of suitable foreclosure laws, it is
imperative to identify collateral risk to its fullest extent. Following queries will
assist the credit manager.
Way-out analysis: Would the borrower be able to meet payment schedule
Primary Security: Hypothecator/pledge of stocks
Real ownership to be ascertained.
Stock turnover to be assessed.
Inventory control management system to be closely reviewed. Are there

any inventory control system is place? If yes compare with the prevailing
market standards?
Marketability of the pledged stocks? Who is the customer, what are the
profit margins? The credit manger to avoid a significant loss, in case of
forced sale negotiating the transaction, may also ascertain competition,
outlets available, distributors margin etc.
Collateral security
Clear title is to be ascertained.
Title to be preferably in the name of the borrower.
Value reasonable to cover our exposure.
Locality of the security to be preferably urban.
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D O C U M E N TAT I O N R I S K
Blank documents invite trouble.
Incomplete or wrongly filled documents have no legal remedy.
Documents not properly witnessed are considered complete.
Documents not legally vetted by the internal/external legal counsel/auditor

may carry some flaws.
Check whether borrowing powers are in order and in accordance with
comp[any laws.
Any condition(s) of security mentioned by the approving authority at the time
of last approval has bee met fully.
S T E P T W O : E A R LY W A R N I N G S I G N A L S
Second most important phase of credit risk management begins after the
disbursement of finance. For convenience of monitoring at the branch levels,
monitoring may be segmented further into five distinct sections enabling the credit
manager to continuously monitor the health of the asset portfolio. They include
Internally colleted account status signal
Externally received business status signals
Security review
Stock review
Monitoring of behavior vis--vis branch and the client. Do they extent

favor beyond the established norms and defined boundaries?
Like speed breakers, continuous monitoring provides us some red signals to stop
further lending and review the entire relationship with the client. Following addition
swings may further augment credit mangers resolve to monitor the loan account
prudently. Another exhaustive list is list is also followed identifying the deficiencies
commonly observed at the branch level resulting into classification of finances.
Cash Position Of The Company
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A downward cyclical trend in cash position may be considered OK but a sudden

fall may be a harbinger of severe cash flow problem. The sponsor, in order to
meet cash requirements elsewhere, will default on payments of due principal
and markup.
Receivable Collection Period

If cash collected against receivable is slow, the loan repayment is going to get
slow. The sponsor may justify this trend by showing them in his assets but
some of the accounts receivable may never recover.
Inventory Turnover
A slowdown in inventory turn over is a cause for serious concern. It reflects
poorly on management of the company and its operations. It may also imply
too much concentration of funds being stuck in the obsolete inventory.
Non Current Assets

A sudden jump in the amount of non-current assets, such as notes receivable,
machinery and equipment, land, advances to subsidiaries, etc, should be
noticed as this is going to lead to cash problems in near future.
Current Liabilities
Credit Manager should be alert to sudden jumps in current debts and notice if
these debts are financing non-current assets. It also holds true in spirits of
matching principle whereby short-term lending needs are met by short-term
assets.
Worsening Ratios
Debt/Equity ratio, current ratio, gross profit margin ratio, various inventory
ratios etc indicate the financial health of the firm.
Uneven Patterns Of Borrowing

This situation specially applies to working capital finance. A player in the
beverage industry seeking loan in winter may be utilizing it for some other
purpose other than meeting his short term financing needs. Similarly, an
agricultural loan requested in off-season may be skeptical.
Some Other Key Warning Signs

In addition, there are certain non-financial symptoms of a problem project.
Credit officers should keep their eyes open for the following additional signals.
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Evidence of any legal action and income tax enquiry
Information of utility bills default, deferred payments
Deteriorating relationship with trade suppliers
Sudden rise in request for NOCs
Notice of insurance cancellation or failure to pay premiums on time
Turnover of key performing employees
Inability to obtain financial statements timely
Personal/family problems of directors/sponsors
Failure to furnish the requested information
Changes in communication habits (telephone and letters)
STEP
THREE:
P R EPA R ATIO N
OF
THE
CREDIT PROPOSAL
Credit proposals can be classified into two categories
Credit line proposal (CLP)
One Time Transaction (OTT)
A Credit Line Proposal is made for those customers for whom the bank has approved
a regular credit line, and OTT is made for those customers with whom the bank is
doing business on a one-time basis and they have no regular credit line approved
with the bank.
CREDIT LINE PROPOSAL (CLP)

In a CLP, all information regarding the client and his business is stipulated as:
Total existing facilities (limit), their outstanding value and the securities
that were provided against these facilities
Total proposed limit of credit and the securities provided against it. The
credit officer does the analysis and verification of these securities
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Documents (reports) attached with proposal
For having the complete information regarding the client, his business and the
securities offered for advances, different documents are prepared by the Credit
Officers. All these documents are attached with the proposal to get approval. These
documents are as follows:
GRADE APPROVAL SHEET
Grade Approval Sheet forms an integral part of a Credit Line Proposal (CLP). Its
purposes are to segment bank loans by way of their risk profile, to bring to
attention of credit officers & senior management specific accounts in which
adverse features or deviations from established standards (industry trend)
have been noted so as to propose remedial measures, and to report in
aggregate the resulting amount and degree of risk in banks existing portfolio.
Accounts may be categorized in 5 different grades assigned on the basis of net
worth (from 1A to 1E on the basis of decreasing net worth). Accounts that do
not have audited financials are placed in Grade 2 and those with irregularities
in the past (like over dues, etc) are placed in Grade 3.
BASIC FACT SHEET
Basic fact sheet is a document that is aimed towards listing down all the fact
regarding the customer, his business, his corporate status, his taxation
number and every thing that is there to be known about the person and the
business. The format of basic fact sheet, which is given to all the commercial
banks by State Bank of Pakistan, gives a clear-cut idea as to what other
information is there to be recorded in the Basic Fact Sheet. The format in given
in annexure one of this report.
VALUATION SURVEY REPORT
This report contains the fact about the judgment of the credit officer after the
property / an independent valuator has valued security.
PROPERTY VISIT REPORT
Every credit officer writes this report after he visits the clients residence and /
or place of business.
SECURITY ANALYSIS REPORT
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Security analysis report views the security structure (offered by the client)
against which the limits are collateralized, after applying SBP margins, like in
case of cash (near cash) security this margin is 25%. PS analyzes the overall
profitability from the transaction; this includes return from average facility
utilization, reciprocal business (like imports, LGs, etc), spread on cash
securities (if any), etc.
RISK INDEX LEVEL (RIL)
BAL Risk Index is based on a scale of 1 to 10, where 1 represents a lower and
10 a higher percentage of observed Business Failures. Ownership structure,
position in the industry, experience, liquidity & profitability ratios, account
history, etc contribute to the points, where an account can have a maximum of
100 points and a minimum of 10 points; accordingly RIL is awarded.
PRUDENTIAL REGULATIONS CHECKLIST (PRC)
Bank Alfalah Limiteds PRC comprises of various SBPs prudential regulation.

Where SBP prudential regulations are quite detailed, Bank Alfalah Limiteds
credit
PRC
includes
lending
related
regulations
whose
compliance
is
compulsory. These regulations include financial ratios requirements, limit of

Bank Alfalah Limiteds exposure on clients on the basis on Bank Alfalah
Limiteds net worth & clients net worth, etc.
STATEMENT OF ACCOUNTS
This refers to clients past bank account statements.
FINANCIAL STATEMENTS
This refers to audited financial statement of the corporate entity.

When all of these documents are attached to the credit line proposal / OTT the file is
presented to the Branch Credit Committee of Bank Alfalah Limited, Township
Branch, Lahore. This committee consists of the Branch Manager, Manager
Operations, Manager Credits Department, and the Manager of the Accounts
Department. When the branch Credit Committee approves the proposal the
proposal is sent to the credit division functioning in the Head Office. When they
approve the proposal the customer is made to sign the offer letter and
disbursement is made.
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OTHER
FUNCTIONS
PERFORMED
BY
THE
C R ED I TS D EPA RTMEN T
The predominant functions performed are
Extension of Finance Against Imported Merchandise
Extension of Finance Against Trust Receipt
Purchase of Local Bills Documentary
Issuance of Guarantees on behalf of customers
F I N A N C E A G A I N S T I M P O RT E D M E R C H A N D I S E
When the imported goods come to the importers country (Pakistan) he might no be
in a position to provide the required amount of money to his bank so that his bank
could pay to the exporter. Under these circumstances the importer might give the
imported goods into effective pledge of the bank, and then the importers bank
pays to the advising bank or the reimbursing bank on behalf of the importer, but the
importer is suppose to get the goods released and pay his bank (Bank Alfalah
Limited) the required amount along with the interest as the banks funds have been
involved for a specific time span. This kind of a facility is basically a post L/C
financing for meeting working capital requirement.
When the goods reach the godown the Muqadams are suppose to send Bank Alfalah
Limited a stock report the predominant contents of this stock report are
The description of commodity
Quantity of that commodity received
The date on which the Muqadam received the consignment.
The name of the premises at which the goods were received
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Once the goods come under the effective pledge of the bank, the customer is
suppose to get the goods released after making the due payment in the specified
time period. FIM is normally extended for a time span of 30, 60, 90, or 120 days.
The mechanism through which the goods are released
At this point it is pertinent to give an overview of the mechanism through which the
goods are released. When the facility of FIM is extended the concerned official at
Bank Alfalah Limited, Township Branch gives a certain quantity of Delivery Orders to
the client. These delivery orders are used to get the goods released. Delivery order
basically is a performa that contains the following information
Date
Description of goods
Quantity which is to be released
The per unit rate of the commodity and also the total value
The L/C number under which the transaction is done
The FIM number
Accounting transactions regarding the entire FIM transaction
Lodgment of FIM
Debit:
Finance Against Imported Merchandise Account
Credit: Payment Against Documents Account
When customer (importer) repays the amount.

Debit:
Importers Account
Credit: Finance Against Imported Merchandise Account
For receiving interest payment following entry is passed

Debit:
Importers Account.
Credit: Interest Earnings on Finance Against Imported

Merchandise Account.
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SECTION FOUR
F I N A N C I A L A N A LY S I S
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A) FINANCIAL STATEMENTS
B
A L A N C E
H E E T
A SS E T S
1998
1999
2000
2001
2002
3,885,612
4,540,486
10,930,33
20,463,56
Liquid Assets
Cash in hand / Cash at Banks
721,285
1,687,256
2,044,825
Government securities (net)
3,224,044
4,759,913
4,578,080
Marketable securities (net)
34,970
32,512
219,680
441,836
1,524,990
Balances with other banks
386,211
1,161,434
1,797,986
1,081,208
232,728
Lending to financial institutions
248,000
100,000
2,260,315
1,698,969
4,634,398
4,641,510
7,741,115
10,900,88
18,037,96
31,396,17
841,748
2,460,626
1,680,100
14,400,56
16,870,86
26,639,30
10, 327,
15,242,31
19,131,49
28,319,40
324
71,215
18,720
12,475
5, 725
5, 725
5,725
Total liquid assets
Financing / Advances
Government /Public
747,089
Private
9,580,235
Total Advances-Net of Provisions
7,767,708
Other Securities
Term Finance Certificates-Unquoted
147, 500
200,610
Other Investments (Shares of

Pakistan Export finance)
Total other securities
Operating Fixed Assets
Other Assets
Total Assets
147,500
200,610
76,940
24, 445
18,200
263,760
1,153,607
1,287,355
1,424,883
17,607,74
1,537,629
1,596,652
1,347,134
1,436,991
9,848,47
14,321,10
21,019,60
28,854,63
40, 098,
65,167,03
095
LIABILITIES AND EQUITY

Deposits
10,392,62
13,735,56
22,472,08
40,601,05
4,349,548
5,427,849
6,746,000
7,735,240
11,878,22
15,820,47
20,481,
30,207,32
Demand Deposits
7,528,673
Time Deposits
Total Deposits
Borrowings from Financial
OLLEGE
OF
11,083,92
7
51,684,98
568
1,348,313
2,972,240
5,916,603
6,709,054
60,375,76
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Institutions
Bills Payable
Other Liabilities
Total Liabilities
Net Assets
51,737
120,868
106,353
305,558
758,961
184,030
379,747
632,006
716,475
11,963,42
13,462,30
19,293,32
27,136,53
37,938,41
61,514,36
858,806
1,726,280
1,718,102
2,159,684
36,526,67
Represented By
Share Capital
600,000
600,000
600,000
750,000
1,000,000
Reserves
255,094
286,399
299,469
361,591
365,727
Unappropriated Profit
3,712
8,931
1,211
249,701
250,050
Share Holders Equity
858,806
895,330
900,680
1,361,292
16,157,77
830,950
817,422
798,392
2,036,890
858,806
1,726, 280
1,718,102
2,159,684
3,652,667
Surplus/(Deficit) On Revaluation of
Assets
Total
Contingencies and Commitments

Contingencies
1,302,022
2,711,578
Commitments
3,770,381
2,199,482
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14,570,72
8,108,694
7,126,536
10,532,12
15,976,73
15,548,67
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INCOME STATEMENT
1998
1999
2000
2001
2002
Mark up / return / Interest earned
1628697
1905908
2261828
3391935
4630494
Mark up / return / Interest expensed
1313564
1474343
1724041
2515074
3112313
Net Mark up/ Interest income
315133
431565
537787
872303
Provision against non performing loans
(94756)
136076
103950
13705
(53619)
Provision For diminution in the value of

Investment
(175)
(1447)
(94756)
143870
103950
13705
(55066)
220377
567466
641737
890566
1463115
39438
58043
103838
147277
316368
8951
41910
62077
121754
77925
69195
113923
95165
23614
53540
87504
74756
141808
Total Non Mark-up Income
184806
189508
269488
377866
615418
Total
405183
477103
911225
1268432
2078533
337447
402559
503028
743602
1182887
Other provisions/ written offs
7619
Other charges
228
666
993
337447
402559
510875
744268
Profit Before Taxation
67736
354415
400350
524164
894653
Taxation Expense
(77629)
(197891
(185000
(213552)
(448974)
Profit After Tax
145365
156524
215350
310612
445679
Bad Debts written off directly

Net Mark up / Interest income after
provision
151818
1
Non mark-up interest income

Fee, Commission, Brokerage Income
Dividend Income
Income from dealing in foreign currency
Other Income
Non Mark-up / Interest expense

Administrative Expenses
Total Non Mark-up / Interest expense

Extra ordinary unusual items
Unappropriated Profit brought forward
118388
0
2420
3712
8931
1211
249701
147785
160236
224281
311823
839186
Transfer to statutory reserve
(29073)
(31305)
(43070)
(62122)
(89136)
Transfer from revenue reserve
(115000
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Profit available for appropriation

Appropriations
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Issue of Bonus Shares Interim @ 33.33 %
(In 2002)
Dividend (@ 25 % In 2002)
(120000
(210000
(250000)
(250000)
Unappropriated Profit Carried Forward
3712
8931
1211
249701
250050
Basic & Diluted EPS
2.42
2.61
3.59
3.65
4.46
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B) RATIOS
1998 - 2002
SR.
R AT I O S
1998
1999
2000
2001
2002
16.9%
9.1%
12%
14%
12.21%
Net Income/Capital
Net Income/Total Assets
1.0%
0.7%
0.7%
0.8%
0.68%
Net Income/Risk Assets
1.87%
1.52%
1.41%
1.62%
1.57%
Operating Expenses/Revenue
20.72
21.12
22.59
21.97
Quick Assets/Total Deposit
38.85
48.93
53.22
59.71
Total Financing/(Deposits
Borrowed Funds)
%
60.53
%
55.49
%
63.88
%
56.43
Total Financing/Total Deposits
67.40
65.91
85.46
68.96
Due To Banks/Total Deposits
%
11.35
%
18.79
%
28.89
%
22.21
Borrowed Funds/Total Financing
16.84
28.50
33.80
32.21
0.43%
6%
%
14.06
47.03
42.44
68.59
41.43
5.99%
8.21%
5.95%
5.39%
11.07
16.72
11.27
11.29
%
10.73
%
16.56
%
10.38
63.38
65.69
67.06
74.39
%
36.62
%
34.30
%
32.94
%
25.61
10
Due From Banks/Total Assets
11
Due From Banks/Due To Banks
12
Capital Funds/Total Assets
13
Capital Funds/Risk Assets
14
Capital Funds/Total Financing
15
Demand Deposit/Total Deposits
16
Time Deposit/Total Deposits
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25.57%
??? %
57.10%
63.76%
11.68%
18.32%
7.47%
80.61%
5.61%
12.90%
11.08%
78.55%
21.44%
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12.48
17
Cost Of Funds
18
Return On Investments
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10.19
%
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10%
8.87%
8.82%
7.44%
8.08%
6.92%
7.00%
6.26%
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C) FINANCIAL RATIOS ANALYSIS

1998 - 2002
NET INCOME/CAPITAL
This ratio shows the relationship between income earned
and the owners capital that is how much the bank has
earned by using its own resources.
It is the return earned on owners investment.
T h e r a t i o s i g n i fi e s a s t o h o w e ffi c i e n t l y a r e w e u s i n g o u r
capital to earn net income.
By looking at the ratios calculated for the years 1998 to - 2002 it is clear that the
ratio has had a normal growth over the years from 1999 to 2001, while it declined in
2002 to 12.21 %.
One of the reasons for the decline in the ratio in the year 2002 was that although
there is an increase in the net income but the increase is less in terms of the total
capital used when compared to the previous year i.e. this year Bank Alfalah Limited
used comparatively more capital to earn comparatively less income, although there
is a increase in net income in absolute terms.
Another reason of the decline in Net Income/Capital in the year 2002 was instable
situation of the whole country. The shift towards democracy has had an immediate
effect on the countrys financial sector.
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A gradual increase in the ratio would show that Bank Alfalah Limited is efficient in
use of its capital for the generation of net income. A downward trend would show
otherwise.
NET INCOME/TOTAL ASSETS

This ratio shows the relationship between income earned
and the total assets.
T h i s r a t i o p o r t r ay s n e t i n c o m e a s a p e r c e n t a g e o f t o t a l
assets.
For the calculation of this ratio total assets figure is taken which includes all of the
resources.
The ratios calculated for the year 1998-2002 show a handsomely positive trend. It is
a healthy sign and shows how effectively bank is utilizing its assets. Bank has
employed all of its assets in an appropriate way. These assets are contributing to
the profitability of the bank.
There is a direct relationship between the net income and the total assets. In case
of a bank the total assets figure is greater than the capital figure as most of the
assets created are by using the borrowed finance (mostly deposits). Even though
bank recently started its operations after privatization but still it is able to increase
this ratio. This shows the efficiency of the new management of the bank.
Slight fluctuations in this ratio (e.g. from 0.8 % in 2001 to .068 %) do not show that
the bank has performed badly because it is not the matter of thousands but millions
and for a bank, slight changes do not matter much.
NET INCOME/RISK ASSETS
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This ratio shows how well the bank is using its risk assets.
For the calculation of the risk assets, all the advances given to private sector are
included and banks and government sector is excluded.
A banks risk assets are its advances; the money it has lent to various classes of
borrowers. This ratio can be understood from two dimensions.
The first dimension is that this ratio portrays as to how efficient is the lending
mechanism in connection to generation of net income.
The second dimension is as to what extent the spread contributing to net

income. Here by spread I mean the difference between the cost of funds (the
rate of interest the bank has to pay to the depositors) and the interest rate
the bank is charging to the lenders.
If this ratio is improving this means that the banks management is using the
advances mechanism very efficiently as regards generation of net income, which in
turn means that the percentage of spread in the net income is improving.
Alfalah started its operations in the year 1997 and during the initial stage of its
business it had to face unstable economic situations. Banking Companies suffered
the most due to Nuclear Tests in May 1997. The economic activity in the country
slowed down as a result the interest on lending was also lowered. Another
contributor to the less efficient utilization of risk assets was the non-performing
loans, which Alfalah took over along with other things at the time of privatization. As
a result of high provisioning income of the bank fell. However the new management
made efforts to recover the loans and to put the bank on the right track. It had been
successful in its efforts. Their non-performing loans have decreased to 8% in the
year 2001 from 23% as at the time of privatization. As a result of following
conservative credit policy the ratio has improved in year 2002 to 1.57%.
OPERATING EXPENSES/REVENUE
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This ratio gives the percentage of the total revenue spent

on operating expenses.
This ratio basically is geared towards assessing the
e ff e c t i v e n e s s o f t h e c o s t c o n t r o l m e c h a n i s m o f B a n k A l f a l a h
Limited
These operating expenses include both administration costs such as salaries, rent,
stationery etc and Selling and Marketing costs. This ratio depicts the operating
expenses as a percentage of the total revenue.
By looking at the trend of this ratio over the last five years we find that percentage
of operating costs to revenues has been increasing with the exception in the year
1999 especially in the year 2002, it has increased tremendously to 25.57 %. But still
the trends portrayed by this ratio can be termed as satisfactory to a marked extent
The increase in this ratio in year 1998 is understandable as the increase was
expected because of initial period of privatization. Huge costs were incurred as
administration expenses which around 20.72% of the earned mark-up.
However the decrease in this ratio by 6.27% in the year 1999 shows the efficiency
of the new management. Bank was able to control its costs in the third year of its
operations. Another reason of the improvement in this ratio is the increase in the
profit in the year 1999.
The ratio showed an upward trend during the years 2000 to 2002 and was 22.59%,
21.97% and 25.57 % respectively. This increase was due to the expansion programs
of the bank. Its branch network increased to 44 branches by the end of year 2002.
Due to the increase in the branch network the increase in operating costs was
unavoidable.
T h e c o s t s i n c u r r e d t o d ay w i l l c o n t r i b u t e t o w a r d s l o n g - t e r m
p r o fi t a b i l i t y o f t h e b a n k .
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QUICK
ASSETS/TOTAL
DEPOSITS ??????
This ratio shows the liquidity position of the bank. It shows how well bank can meet
its liquidity requirements and fulfills the cash demands of its customers.
This ratio shows what percentage of total deposits the bank keeps as liquid assets.
Alfalahs Quick asset/total deposit ratio has showed a positive trend over the years.
It was 38.85% in the year 1998 and 59.71% in the year 2001. The high percentage
of total deposits kept as liquid assets for the year 2001 is justifiable for the reason
that out of the total deposits about 74% are demand deposits. These depositors can
ask for their money at any point of time without giving any notice to the bank. To
avoid risk and maintain a satisfactory liquidity level bank has opted to maintain
59.71% as liquid assets. According to prudential regulations at least 20% of the
total deposits should be in the form of quick assets. The bank has followed this in
the last 4 years. However to increase profitability bank can lend some percentage of
the liquid assets as 30 to 35% of deposits invested in liquid assets is satisfactory for
any bank.
TOTAL
FINANCING/(DEPOSITS
&
BORROWED FUNDS)
T h i s r a t i o s h o w s t h e t o t a l fi n a n c i n g a s t h e p e r c e n t a g e o f
d e p o s i t s a n d b o r r o w e d f u n d s . T h i s r a t i o s i g n i fi e s h o w w e l l a
bank is utilizing its available funds. Therefore this ratio
should have a positive trend over the years.
Deposits plus the borrowed funds are the total pool of funds at the disposal of
a commercial bank.
Borrowed funds primarily consist of borrowings from financial institutions.
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Total financing depicts that amount, which we have lent out of our total pool
of funds.
For the past four years the government has been trying to give a real boast to the
economy, but the economy has not responded with the desirable results. As a
consequence total loans advanced by banking sector have been increasing at a
decreasing rate, as people are not investing with great deal of zeal.
On the other hand as savings are increasing the deposit portfolio is increasing at a
decreasing rate. This is the reason a considerable magnitude of funds is being
directed toward liquid securities / investments rather than hard-core lending to
clients.
For Alfalah there have been ups and downs in this ratio. It fell in the year 1999 from
60.53% to 55.49%. Many factors were responsible for this decrease. Bank was in the
establishment stage. Management was new and was trying to control the situation.
Along with other difficulties faced by the management, bank had to survive under
the unstable economic situation.
Banks were severely hit by the incident of Atomic tests of May 1998. After these
tests Government froze the foreign currency accounts and public lost confidence in
banks. There was a depression in the economy. Due to slow business activity the
overall demand for advances declined.
Moreover new management followed a conservative credit policy as it already had
huge non-performing loans portfolios, which were, inherited, by the bank after
privatization. As a result although the advances are increasing over the years but
the percentage increase in advances/financing is less than the percentage increase
in total deposits and borrowed funds.
In the year 2000 the ratio improved. One of the reasons for rise was the
improvement in the economic situation in the country. Because of take over of
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Government by President Musharraf public was hopeful and there was a positive
impact on the economic activity.
By the end of year 2001 the ratio again declined, as expectations of business sector
were not met and no major changes took place.
The decline in this ratio is not a healthy sign as it reduces
t h e p r o fi t a b i l i t y o f t h e b a n k a s i t i n d i c a t e s i n e ff e c t i v e u s e
of the available funds.
But in the presence of unstable political and economic situation and increased
competition among the banks it is a little difficult for the bank to improve this ratio.
Currently, in the year 2002, the ratio has shown an improvement as it has increased
from the past year to 57.10 %. It is hoped that the bank will be able to maintain this
increasing trend as the economy and the management has settled down.
TOTAL FINANCING/TOTAL DEPOSITS

T h i s r a t i o i n d i c a t e s t h e t o t a l fi n a n c i n g a s t h e p e r c e n t a g e o f
t o t a l d e p o s i t s . I t s h o w s t h e e ff e c t i v e n e s s o f b a n k i n u s i n g
its available deposits.
Through this ratio we are able to analyze the fact as to how
e ffi c i e n t l y i s B a n k A l f a l a h L i m i t e d i s l e n d i n g t h e f u n d s i t
receives directly from its clients apart from the funds it
r e c e i v e s f r o m fi n a n c i a l i n s t i t u t i o n s .
The trend of this ratio over the years has been similar to that of the total
deposits/deposits and borrowed funds. Advances have shown a slow positive trend
over the years. This increase in advances has contributed to the total revenue of the
bank. However the percentage increase in advances has been less than the
percentage increase in total deposits.
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The ratio has had more of a steady tour so far. Other that the year 2000, when it
increased considerably, it has had a steady course so far till the year 2002.
DUE TO BANKS/TOTAL DEPOSITS

This ratio shows due to banks as the percentage of the
total deposits.
Due to banks represent the borrowings from the financial institutions. Preferably due
to banks should be less than total deposits.
It is preferred that this ratio should decrease or should be
consistent.
When it comes to the total pool of funds for commercial banks there are two
predominant constituents
Deposits
Money market
Money market is the place where banks lend to each other, and in this market the
bank that is in need of funds is assessed as a credit client by the bank that is to
advance a particular sum of amount.
In this regard the foreign banks functioning in Pakistan are reckoned as A+ credit
clients. Bank Alfalah Limiteds credit rating in the money market was, naturally not
that established at its inception but, as time passed, Bank Alfalah Limiteds massive
growth made the Corporate sector realize the fact that this particular bank could be
dealt with as a trust worthy credit client. This fact as been evidently shown by this
ratio, as it has been quite consistent over the past five years
BORROWED FUNDS/TOTAL FINANCING
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This particular ratio is basically geared towards assessing

t h e f a c t a s t o h o w e ffi c i e n t l y B a n k A l f a l a h L i m i t e d i s
advancing the funds that it has received from sources other
than its depositors
B y t h i s r a t i o w e c a n fi n d o u t t h e p e r c e n t a g e o f t o t a l
fi n a n c i n g d o n e b y b o r r o w e d f u n d s
An increase in this ratio would depict that Bank Alfalah
L i m i t e d i s q u i t e e ffi c i e n t i n l e n d i n g i t s b o r r o w e d f u n d s a n d
c o v e r i n g t h e i n t e r e s t r a t e i t i s p ay i n g o n t h e b o r r o w e d
funds.
This ratio has a positive trend over the years till the year 2002, when it dropped
considerably. An increase in this ratio is a positive sign because cost of funds
borrowed from other financial institutions is less than the cost paid on the deposits.
The increase in the percentage of borrowed funds used in financing results has
increased the profit of the bank reducing its costs.
For Bank Alfalah Limited, the ratio has dropped to an almost record low. This is
because the borrowed funds have actually declined from the past year whereas the
total financing has increased tremendously. Bank Alfalah Limited has adopted the
policy to utilize its own funds and reserves instead of borrowing from the market.
Bank Alfalah Limited has also issued share in the year and thus has financed the
lending through the equity instead of borrowing from the financial institutions.
DUE FROM BANKS/TOTAL ASSETS

Due from banks represents that amount of money that Bank
Alfalah Limited has lent to other commercial banks.
This ratio shows the percentage of total assets that bank
h a s l e n t t o o t h e r fi n a n c i a l i n s t i t u t i o n s .
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It is a secure advance but it results in the lower rates of returns because lending to
financial institutions is done at lower rates as compared to other advances. Due
from banks includes balances with other banks and lending to financial institutions.
Now the question arises as to whether or not a relatively rising trend in this
ratio is good or not. The answer is yes, as the rise in this ratio represents that
after extending loan to A+ clients Bank Alfalah Limited did not move towards clients
of a lesser degree, rather it directed its funds towards the money market.
Alfalahs position is satisfactory in this case. The bank is maintaining a reasonable
level of lending to other financial institutions. Bank also maintains a large
percentage of total assets as invested in government securities, which is a secured
way of earning returns. The percentage of other advances is much greater than
percentage of due from banks. It has a positive impact on the banks profitability.
DUE FROM BANKS/DUE TO BANKS

This particular ratio is geared towards assessing the fact as
to what
percentage of money is Bank Alfalah Limited
lending to other banks out of the amount it has borrowed

f r o m s o m e o t h e r fi n a n c i a l i n s t i t u t i o n s o r e v e n t h e s a m e
commercial banks
This ratio shows whether the bank has to receive more from the other banks or pay
more to the other banks. Every bank has to maintain a balance between the
numerator and denominator. Increase in due to banks if properly used for
financing increases the profitability by reducing the cost. But again bank has to
maintain a balance between total deposits and borrowings from financial
institutions. Similarly although the amount due from banks is secured but it is less
profitable as the returns on money advanced to financial institution are low.
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There is again no hard and fast rule, as to whether due

from banks should be greater than due to banks or vice
versa. It all depends upon the prevalent circumstances and
the management policies of the commercial bank under
consideration
Alfalah is maintaining a right level of both due to banks and due from banks
although the ratio has reached a very high level. This is because, as explained
earlier, Bank Alfalah Limited has not borrowed much from the financial institutions
but has advanced a big amount to them. The due to banks figure has declined
whereas the due from banks figure has almost doubled depicting that Bank
Alfalah Limited enjoys good credibility in the financial sector as banks prefer to
borrow funds from it.
CAPITAL FUNDS/TOTAL ASSETS

It simply shows the percentage of assets that are equity
fi n a n c e d i . e . t h e p e r c e n t a g e c o n t r i b u t i o n o f e q u i t y i n
creation of total assets
This ratio shows the percentage of owners money used in
the creation of assets.
Usually a commercial banks equity is quite small as compared to its assets figure,
as most of thee assets are created through the deposits (a liability) a commercial
bank generates. So equitys role is predominantly limited to creation of operating
fixed assets. That is why thee values assumed by this ratio are quite small. Although
the percentage fluctuated between 5% and 8% but the increase in the capital in
absolute terms gives a sense of satisfaction to the financial analyst.
CAPITAL FUNDS/RISK ASSETS
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This ratio shows the percentage of owners money invested

in risk assets.
This ratio depicts as to what percentage of advances
consists of equity (owner s money) i.e. what percentage of
equity has been given to credit clients over the years.
Naturally this percentage would assume smaller values, as banking is not about
accumulating money (i.e. creation of huge piles of equity finance); rather it is about
management of money (i.e. getting money from one class of individuals /
companies (depositors) and extending it to the other class (investors) and earning a
margin in between).
Nevertheless the values assumed by this ratio are considerably healthy, especially
when equity is increasing manifold every year. Lending to private entities is risky
therefore bank prefers to lend out of the deposits and borrowing from other financial
institution instead of its own capital. For last four years this ratio has been around
11 13 %.
CAPITAL FUNDS/TOTAL FINANCING

This ratio shows the percentage of capital funds in the total
fi n a n c i n g
This ratio would assume smaller values, the rationale being that the bank would
be least interested in lending out its equity, it would love to lend its deposits, it
would love to lend the amount received from other commercial banks, but it would
expose a very less percentage of its equity to credit clients, and this is adequately
depicted by the values this ratio assumed for the past five years.
The ratios calculated for the last five years from 1998 to 2002 shows that to avoid
risk bank prefers to lend out of the depositors money and borrowing from other
financial institutions. This ratio has been around 10 12 % for Bank Alfalah Limited.
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It is recommended that bank should increase its capital by increasing its reserves. In
this way it will also obtain the trust of its creditors.
DEMAND DEPOSITS /TOTAL DEPOSITS

This ratio shows the percentage of demand deposits in the
total deposits. With the help of this ratio bank determines
t h e r e q u i r e d l e v e l o f l i q u i d i t y. H i g h e r i s t h i s p e r c e n t a g e
more will be the liquidity required.
Demand deposits are those liabilities of a commercial bank which are payable to the
customer / whenever he demands it. On the contrary time liabilities of a commercial
bank mean those deposits which are to be paid back after the lapse of a predecided time period. Now there is no hard and fast rule as to whether time liabilities
should have a greater proportion in the total deposit pool or demand liabilities
should have a greater proportion.
Bank prefers demand deposits because they result in decrease in the cost as no
return is given on current assets and rates of return on saving accounts are less
than that of long-term accounts. Moreover banks prefer to give short-term advances
therefore they prefer demand deposits.
From the year 1998 to the year 2000 there had been a massive increase in the total
deposits, but only a consistent 2% increase in the ratio. This meant that the
contribution of time liabilities towards the build up of the total deposit pool was
greater than the contribution of demand deposits. This was basically a result of
massive expansion and a policy to even welcome high cost deposits.
But in the year 2001 policy was changed, high cost deposits were shred, and as a
consequence the ratio had a great improvement of 7%, specially when there was a
great increase in the deposit pool itself. The year 2002 saw a similar trend when the
ratio improved further to 78.55 %.
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TIME DEPOSITS /TOTAL DEPOSITS

This ratio shows the percentage of time deposits in the
total deposits.
The time deposits are less as compared to the demand deposits. This is because of
the reasons mentioned in the previous ratio. Greater the time deposits more will be
the cost of funds.
COST OF FUNDS
I t s h o w s t h e c o s t t h a t b a n k h a s t o i n c u r o n t h e fi n a n c i n g
from various sources i.e. the depositors money as well as
borrowings from other banks.
It is the over all cost incurred by the bank. The cost of funds has been decreasing
for the last 5 years. This shows the efficiency of the management. Management has
been able to control the cost by recovering the non-performing loans in the year
1999 and 2000. Moreover the rates of return on saving and term accounts have
declined lowering the cost of funds. As a result bank has more leverage available for
lending. The rate has achieved a record low point of 7.44 % in 2002.
RETURN OF INVESTMENT (ROI)

This ratio shows the return earned by the investors
Bank Alfalah Limited has shown a slight decline in the ROI as it decreased from
10.19 % in the year 1998 to 6.26 %in the year 2002. The fall in the ROI is due to
the increase in total liabilities. It should be greater than cost of funds but here it
is less than the cost of funds. It is due to the increase in banks borrowings. This
needs attention of the management.
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ACCOUNTING POLICIES
S TAT U S A N D N AT U R E O F B U S I N E SS
Bank Alfalah limited was incorporated on June 21, 1992 as a public limited company
under the Companies Ordinance, 1984. It commenced banking operations from
November 1, 1992. The bank is operating through 44 branches with the registered
office at B. A. building I. I. Chundrigar Road, Karachi
B A S I S O F P R E S E N TAT I O N
In accordance with the directives of the federal government regarding shifting of the
banking system to Islamic modes, the state bank of Pakistan (SBP) has issued
various circulars from time to time. Permissible forms of trade related modes of
financing include purchase of goods by the banks from their customers and
immediate resale to them at appropriate mark-up in price on deferred payment
basis. The purchase and sale arising under these arrangements are not reflected in
these accounts as such but are restricted to the amount of facility actually utilized
and the appropriate portion of mark-up thereon.
STATEMENT OF COMPLIANCE
The financial accounts have been prepared in accordance with the directives issued
by SBP, the requirements of the banking companies ordinance, 1962 companies
ordinance, 1984 and the accounting standards issued by the international
accounting standards committee (IASC) and interpretations committee of the IASC,
as adopted in Pakistan.
BASIS OF MEASUREMENT
These accounts have been prepared under the historical cost convention, except
that certain investments and fixed assets have been included at revalued amounts
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S U M M A RY O F S I G N I F I C A N T A C C O U N T I N G P O L I C I E S
Cash And Cash Equivalents
For the purposes of the cash flow statement, cash and cash equivalents comprise
balances with less than 90 days maturity including:
Cash and balances with treasury banks
Balances with other banks
Call lending
Revenue Recognition
Mark-up/return on advances and investments are recognized on accrual basis. Fee,

commission and brokerage except income from guarantees are accounted for on
receipt basis.
Advances
These are stated at cost less provision for bad and doubtful debts. The provision for
bad and doubtful debts is made in accordance with the requirements of the
prudential regulations issued by SBP.
Investments
The investments of the bank are classified in to the following three categories:
Securities Held For Trading
These are investments acquired principally for the purpose of generating

profits from short-term fluctuations in price or dealers margin.
Securities Held To Maturity
These are investments with fixed or determinable payments and fixed maturity
and the bank has the positive intent and ability to hold them till maturity.
Available For Sale
These are investments that do not fall under the trading or held to maturity
categories. In accordance with the requirements of SBP quoted securities are
valued at market values and surplus/deficit arising thereon is kept in a
separate account shown in the balance sheet below equity. Unquoted
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securities are stated at cost less provision for impairment. Gains or losses on
disposals during the year are taken to profit and loss account.
Operating Fixed Assets And Depreciation
Capital Work In Progress
Capital work in progress is stated at cost.
Property And Equipment
Office premises are shown at cost/revalued amount less accumulated

depreciation. All other assets are stated at cost less accumulated depreciation.
Depreciation is charged to income applying the straight-line method.
Maintenance and normal repairs are charged to income as and when incurred.
Major renewals and improvements are capitalized. Gains or losses on disposal
of fixed assets are taken to profit and loss account.
Intangible assets
Intangible assets are stated at cost less accumulated amortization. The assets
are amortized using the straight-line method over their useful lives.
Taxation
Taxation charge in the accounts is based on the taxable income at the current rates
of taxation. The bank accounts for deferred taxation on timing differences using the
liability method.
S TA F F R E T I R E M E N T B E N E F I T S
Defined Benefit Plan
The bank operates an approved funded gratuity scheme for officers and executives.
Contributions to the fund are made on the basis if actuarial valuation. Actuarial
valuation of the scheme was carried out as at January 1, 1999 using the projected
unit credit method. The fair values of the funds assets and liabilities as at that date
were Rs. 15.00 million and Rs. 28.88 million respectively. The bank is recognizing
the transitional obligation of Rs. 13.88 million over a period of five years beginning
from 1999 on a straight-line basis. The bank also operates an unapproved unfunded
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gratuity scheme for its clerical staff that have completed the qualifying period of
service under the scheme.
Defined Contribution Plan
The bank operates a recognized provident fund for all its permanent employees to
which equal monthly contributions are made by both the bank and the employees
at the rate of 8.33% of basic salary
FOREIGN CURRENCIES
Assets and liabilities in foreign currencies are translated in to Pak rupee at the rates
of exchange approximating those prevailing at the balance sheet date. Foreign
currency transactions are converted at the rates prevailing on the transaction date.
Forward contracts other than contracts with SBP relating to foreign currency
deposits are valued at forward rates applicable to the respective maturities of the
relevant foreign exchange contract. Forward purchase contracts with SBP relating to
foreign currency deposits are valued at the spot rate prevailing on the balance
sheet date. The forward cover fee payable on such contracts is amortized over the
term of the contracts. Exchange gains and losses are included in income currently.
DEFERRED COSTS
These are amortized over a maximum period of five years commencing from the
year in which these are incurred.
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SECTION FIVE
MARKETING MIX
OF
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MARKETING MIX
Marketing Mix can be defined as the set of marketing tools that the firm uses
to pursue its marketing objectives in the target market.
Two basic pillars of this basic concept are:
Target Market
Bank Alfalah Limiteds target market consists of individual clients as well as a

number of business organizations. Due to different market segments, Bank Alfalah
Limiteds different branches have their target markets. Due to specialized services
provided by Bank Alfalah Limited and its highly competitive foreign exchange rates,
most of the major importers in this area deal with Bank Alfalah Limited.
Consumer Needs
Assessment of the needs and wants of consumers is an on going process at Bank

Alfalah Limited that helps it to continually develop new products and services. At
Bank Alfalah Limited, the philosophy is that the bank should go to all possible limits
to satisfy the customer needs. The officers of the Import Department, for
example, try to get the minimum possible exchange rates for their clients. Those in
Cash Department do not look at the clock while honoring the cheques.
The bank is continuously formulating new products and services for the growing and
diversified needs of its ever-expanding client base. The banks commitment to its
customers is evident from its mission statement:
To provide innovative and high quality products to its customers at

the lowest possible rates. To achieve all set goals regarding service,
performance and goodwill.
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THE FOUR PS OF MARKETING MIX

The major task of marketing management is to utilize the marketing mix
variables properly. These variables are the product that is to be marketed, its
price, the channel of distribution that is to be used to get the product to the
consumer (place) and its communication to the consumer in the form of
promotion. These are called as the four Ps of marketing. These variables represent
the decisions over which the marketing manager can exercise the most control.
Infact these are the controllable marketing variables.
Bank Alfalah Limited recognizes the importance of all of these variables in their
environment and thus has accordingly formulated a number of strategies. Bank
Alfalah Limited believes that training and development, both personal and
professional, are crucial to their organization. They are proud to offer exceptional
training programs, a wide variety of career path options, and a work environment
that emphasizes coaching as a basis for learning and growth. They hire talented
individuals who take pride and ownership in the business by striving to be the best.
They hire the Team members who believe the Companys success is in their hands.
To encourage development, Bank Alfalah Limited has defined the skills, knowledge
and training required for each position and this information is communicated to
each employee through specific and thorough job maps. Every employee has the
opportunity to advance based upon his or her performance and potential. Their
program includes annual performance appraisals designed to let employees know
exactly what the expectations are and what opportunities exist for improving.
They have created a progressive banking career path with career opportunities
designed to enable each employee to achieve his or her personal best. Many of the
Senior Management began their careers as small level officers in BCCI. These
opportunities also include unique developmental assignments in field training,
staffing, marketing, facilities management, and in operations positions at Bank
Alfalah Limited.
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In the rapidly changing world of today, product innovation is necessary. Consumers

needs and wants change rapidly. Technological advancements make product
changes possible. A big factor in forcing the organizations to innovate is the
constant innovations in competitor products, thus making the organization exposed
to the fact of loss of customers. The process of new product development consists
of a number of steps. Bank Alfalah Limited constantly strives to improve its
products, and thus giving its valuable customers value for their money. Bank Alfalah
Limited management has always strived to attain the highest level of satisfaction
amongst its customers. In addition, this property has made them less vulnerable to
sudden changes in consumer trends and tastes.
CORE
PHILOSOPHY
BANKING
ON
CONSUMERS
As Bank Alfalah Limited threads its ropes to be the leader in Consumer Banking in
Pakistan, its operating strategy has been aligned with key consumer need highest
value and expert service. As custodians of financial services, Bank Alfalah Limited
feels duty bound to do more than conventional banking services. As an extra step
towards financial security and freedom for the consumers, Bank Alfalah Limited
constantly devises safety management regimes to maximize returns on hard earned
savings and investments. These values form a prime directive that is evident in its
responsive teams, present at their nationwide branches, ready to provide all the
clients timely assistance.
Cognizant of the continually changing customer need environment, Bank Alfalah
Limited has devised a product portfolio to stay ahead of the emerging consumer
patterns.
MARKETING GUIDELINES
The marketing management has made some core policies for better service and
consumer satisfaction. They can be summarized as
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Identification of consumers wants and needs through marketing research
Development and management of these wants and needs
Promotion of the products developed for the customers
Establishment and maintenance of the meaningful relations with the

customers and special groups
Coordination of the marketing as an integral part of all the banking activities
It is the function of the organization to keep the constant touch with the consumers,
their needs, develop products, that meet their needs and build the aim which
express organization purpose. Thus the customers, employees and investors fall
into the category of banks market. Marketing means making exchange of
goods and services possible. Once a banker identifies its prospective customers,
his marketing strategy becomes easy. The next step to find out the banking
requirements. Bankers also try to locate there past customers for offering the more
facilities to them.
MARKETING
PRINCIPLES
E V O LV E D
BY
For providing marketing services to the clients, Bank Alfalah Limited has formulated
certain principles. Bank Alfalahs target market consists of individual clients as well
as a number of business organizations. Due to different market segments, Bank
Alfalah Limiteds different branches have their target markets. The principles are
We should have full knowledge about the business background, behavior and
the life style of our clients.
We should have full knowledge about our self and about the bank where we
work
Make maximum use of the information provided by the management

information systems and once a contact is established with the client, always
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try to pursue on the call of the client any time, the approach of the marketer
should be friendly rather than a business like.
We should frame a definite program about the areas to be covered.
We should know what is going around us. Who are our competitors, what
product and services they are offering and at what rates
We should have a sound knowledge about our profession, current rates of

interest and market trends.
We should try to work with team spirit
We should not be too internally focused view on unlimited prospects but to

widen our perspective.
We should render quick, efficient, and personalized service to our customers.

Be always ready to react and readjust to a change in the market and
customers attitudes
Assessment of the needs and wants of consumers is an on going process at Bank

Alfalah Limited, which helps it to continually develop new products and services. At
Bank Alfalah Limited, the philosophy is that the bank should go to all possible
limits to satisfy the customer needs.
THE FOUR PS OF MARKETING WITH REGARDS BANKS ARE
Product Products and Services Provided by a Bank
Price - Commission and Bank Charges Received
Promotion - Promotion of products and Services
Place - Placement of Services i.e. Network of branches
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PRODUCTS & SERVICES

A Product or a service creates a bundle of form, possession, time, place,
information and image utilities that have potential need-satisfying capabilities
for individual and organizational customers.
True to its strategy of becoming a highly effective financial supermarket, Bank
Alfalah Limited provides a complete range of products to its customers; the
corporate clients, commercial enterprises and the small consumers. At Bank Alfalah
Limited, the primary commitment is to understand and support its clients business
objectives and financial needs. All this is ensured through constant R & D focus and
training & development of staff. Bank Alfalah Limited provides a wide range of
products/ services to its customers, which can be compared with any foreign, or
national bank in terms of quality and reliability.
The products and services Bank Alfalah Limited is presently offering come under
four main heads i.e. Corporate Banking, Consumer Banking, Consumer
Finance and Electronic Banking. The various items that fall under these four
heads can be summarized as
C O R P O R AT E B A N K I N G
Current Account (Pak Rupees)
Foreign Currency Accounts
Clearing And Fund Transfer
Trade Services
Overdraft Facilities
Term Loans
Project Financing
CONSUMER BANKING
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PLS Account
Royal Profit Account (Pak Rupees)
Royal Patriot Account
Anmol Deposit Certificates
Monthly Income Account
Money Gram
Rupee Traveler Cheques
Saving Deposit Lockers
CONSUMER FINANCE
Car Finance
Personal Loans
Housing Finance
Monthly Income Account
Foreign Currency Account
Money Gram
Rupee Traveler Cheques
E-BANKING
ATMs
Online Banking
Phone Banking
Internet Banking
ACCOUNTS
OFFERED
BY
BANK
A L FA L A H
LIMITED
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One of the basic functions of a commercial bank is to receive deposits and to honor
cheques. Accounts offered by the banks for the deposits of customers constitute the
basis of their operations and develop the basic relationship between a banker and
customer. Bank Alfalah Limited has formulated a number of accounts for the
deposits of customers, with unique features, to facilitate them. These are:
R OYA L G R O U P
Royal Group is a joint investment account that provides a way to the customers to
have their joint accounts directing them towards more benefit. Minimum number of
people required to form a group is just 2. So, in this way, two or more people get
their joint account in the bank and can earn higher rates of return. Profit is
calculated on daily basis and disbursed monthly. It also provides an opportunity to
employees to get their salary disbursed through this account as it provides better
arrangements for secured collection of cash/ checks. The Important Features are
It is a joint investment plan
Minimum group Bank Alfalah Limited balance required is Rs. 100,000.
Minimum number of members required to form a group is 2
Profit is calculated on daily basis
Profit is disbursed on monthly basis
Each member of the group is assigned a PLS savings account
Each member is provided with a separate checkbook
R OYA L P R O F I T
Royal Profit is a profit bearing current account. In Royal Profit account, a customer
enjoys a higher rate of return that increases with savings. Account holder has the
comfort of unlimited transactions and there is no restrictions regarding the
withdrawals, which mean all time accessibility to the account.
It gives two advantages
Access to the funds at all times
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Lucrative profit rates that increase with savings
The Important Features are
Optimum Daily Balance
With Royal Profit you earn optimum profit on your daily balance.
Higher Savings
Incorporating a slab system, Royal Profit gives higher savings.

Convenience Of Current Account
Royal Profit provides the convenience of current account.

Unlimited Transactions
There are no restrictions on the number of transactions and withdrawal

can be made without any notice.
Disbursement Of Profit On Monthly Basis
AMOUNT
R AT E ( P. A . ) %
From 50,000 To 999,999
6.00
From 1,000,000 To 9,999,999
6.50
From
To
6.75
To
7.00
10,000,000
49,999,999
From
50,000,000
149,999,999
From 150,000,000 & Above
Low Min Balance
For availing the above benefits a minimum balance is to be maintained.
Every individual has to maintain balance of Rs. 50,000.
Companies have to maintain a minimum balance of Rs. 250,000.
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R OYA L PAT R I O T
Royal Patriot is a special term deposit account offering attracting profit rates that
improve with tenure and amount. Customer has a choice to deposit his amount for
terms of 1, 3, 6, 9, 12 & 24 months with a minimum Bank Alfalah Limited balance of
Rs. 25,000 only. There is no penalty in case of premature encashment (Profit will be
calculated according to the last tenure completed), & moreover, no prior notice is
required before withdrawals. The Important Features are
It is a special term deposit
Choice of terms 1, 3, 6, 9, 12 and 24
Profit on 1 and 2 year deposits is paid on half yearly basis
No penalty in case of premature encashment
No prior notice is required before withdrawal
Minimum Bank Alfalah Limited balance of only Rs. 25,000 is required
TENURE
25,000-
1,000,000-
5,000,000
1 month
9 9 9 , 96.00
99
4 , 9 9 96.10
,999
ABOVE
6.20
3 months
7.00
7.10
7.20
6 months
7.50
7.60
7.70
1 year
8.00
8.10
8.20
2 year
8.00
8.25
8.50
&
A N M O L D E P O S I T C E RT I F I C AT E S
The Important Features are
These certificates are available in the denominations of Rs. 10,000, Rs.

25,000, Rs. 50,000, Rs. 100,000, and Rs. 500,000.
Profit up to 18 % per annum is offered on these deposit certificates, thus the

amount gets doubled in six years.
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Profit is calculated on daily basis. So in case of encashment, the customer

can get the profit of the number of days the certificate has been held.
The certificates can be en cashed prematurely without any penalty.
These certificates can also be purchased in the name of a minor.
Short-term loans are also granted against these certificates.
O T H E R C L A SS I C P L S D E P O S I T S
Along with the above stated special Royal accounts and Anmol Deposit Certificates,
the bank also have formulized the Classic PLS Deposits. They are
Current Account
Savings Account
Notice Deposit
Term Deposit
Foreign Currency Accounts
PLS Saving Deposits

PLS
7-29
Days
Deposit Rate (P. A)%
Notice
6.50
Deposits
PLS 30 Days Notice Deposits
4.60
PLS Term Deposit 1 Month
6.00
PLS Term Deposit 3 Months
6.00
PLS Term Deposit 6 Months
7.00
PLS Term Deposit One Year
7.50
PLS Term Deposit Two Years
8.00
PLS Term Deposit Three Years
8.50
PLS Term Deposit Four Years
9.00
PLS Term Deposit Five Years
9.25
The key features of these accounts are as under:
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Current Account
No profit is paid on this account.
Amount can be withdrawn at any time without any prior notice.
A very low minimum Bank Alfalah Limited balance is required.
This account can be opened in other currencies also, i.e. in Euro, Pound
Sterling, U.S. Dollar and Euro.
This account can be opened with PKR 10,000.
Savings Account
Minimum Bank Alfalah Limited balance required is Rs. 7000.
Profit is paid on half-yearly basis.
The profit rate offered and paid half-yearly is 8.00 %.
Savings account can be opened in other currencies also, i.e. in Euro,

Pound Sterling, U.S. Dollar and Euro.
Account can be opened with PKR 25,000.
Notice Deposit
These are the short-term deposits of customers.
Interest is paid on daily basis.
Notice has to be given to the bank prior to the withdrawal of the amount.
Term Deposit
It is a fixed PLS account.
Profit Rates are given in the following table
1 Month
7.50 %
3 Months
8.50 %
6 Months
9.00 %
1 Year
9.50 %
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3 Years
10.50 %
5 Years
11.00 %
Foreign Currency Accounts:
Due to the increasing globalization, all leading commercial banks have been offering
foreign currency accounts to their customers. Bank Alfalah Limited has done it by
facilitating its customers to have their foreign currency accounts opened in the
bank. At present, Bank Alfalah Limited offers US Dollar, UK Pound and EURO
accounts.
OTHER
CONSUMER
SERVICES
PRODUCTS
OFFERED
BY
AND
BANK
ON-LINE BANKING
Bank Alfalah provides on-line services to its customers. At
present, this service facilitates the customers to deposit
and transfer their amounts from one branch to another of
Bank Alfalah Limited. It is being planned to launch a
universal account to update this facility and make it more extensive.
A L FA L A H C A R F I N A N C I N G
Alfalah Car is a consumer-financing scheme that enables a customer to own his
desired car at easily affordable and flexible installation with minimum down
payment and insurance. All businessmen, Corporate
Employees, Salaried and self-employed professionals
having net take home income in excess of three times
the
monthly
installment
are
eligible
to
take
the
advantage of this scheme. The salient features of this

scheme are
Lowest Financing cost available in the market
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Tenure of 1 to 5 years as per requirement of customer
Quickest processing
Minimum documentation required
Down payment requirement of 20%
Repayment
through
monthly
installments
Lowest insurance rates available from
banks approved insurance companies

On of the lowest markup in the market i.e. 19 % (this has been reduced to 8.9
% and 9.5 % in 2003 for Suzuki brand cars and other brand cars respectively)
R U P E E T R AV E L E R C H E Q U E S ( RT C s )
Bank Alfalah Limited issued its own rupee travelers Cheques with highest
denominations, during the course of my internship with the bank. Bank Alfalah
Limited TCs have been presented with ultimate combination of features, which
allows the customers the best way to make and accept payments (as it is called
safe cash), or to save in a rewarding way. The salient features are
Features Of Rupee Traveler Cheques
Highest Denominations Available
Bank Alfalah Limited offers Rs. 5000 and Rs. 200,000 RTCs.
Widest Range:
Bank Alfalah Limited offers RTCs following denominations
Rs. 1000
Rs. 5000
Rs. 10,000
Rs. 20, 000
Rs. 50,000
Rs. 100,000
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Rs. 200,000
Rs. 500,000
Rewards
Customers can earn daily points and win great gifts.

Encashment Commission
A commission of 0.15% is given on encashment of RTCs at any branch of

Bank Alfalah Limited.
Security Features
The special embossed printing in UK, Alfalah security thread and Bank
Alfalah Limited watermark are some of the features that make RTCs
secure.
Easily Refundable
RTCs can be refunded without any penalty or loss.

Transferable And Endorsable
They can be transferred and endorsed to anyone.

Unlimited Validity:
Bank Alfalah Limited RTCs will always remain en-cashable.

No Account Needed
One does not have to be an account holder to get the benefit of Bank
Alfalah Limited RTCs.
A L FA L A H LO C K E R S
The client can also avail the facility of rent-free safe deposit lockers for their
valuables. The distinguishing features of these lockers are:
Highly effective security system
Fully refundable security deposit
Convenient locations
Flexible operating hours
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B A N K A L FA L A H L I M I T E D H O M E LOA N S
Alfalah Home Loan is specially designed for those NRIs
in UAE whose families live in Pakistan. Bank Alfalah
Limited provides following types of Home Loans:
To purchase a new house
To renovate the existing house
To construct a house
A N M O L S AV I N G C E RT I F I C AT E S
Anmol saving certificates is a special product of Bank Alfalah Limited. It gives Sky
High Profits from the date of purchase.
Denominations
Rs. 10,000
Rs. 25,000
Rs. 50,000
Rs. 100,000
Rs. 500,000
Encashment
Anmol Certificates can be en-cashed any time without paying any penalty. It means
they can be en-cashed before maturity. Profit is earned till the last day. It gives the
flexibility to save short and long term and the profit continues to grow every day.
Security
ANMOL deposit certificates are fully secured by Bank Alfalah Limited. In case of loss
of certificates Bank Alfalah Limited re-issues them without any cost. The bank also
provides free custodial service.
M O N T H LY I N C O M E A C C O U N T
Bank Alfalah Limiteds Monthly Income Account offers more profit and ensures a
steady stream of monthly income for the customers.
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It gives monthly profit of Rs. 855.
The variable terms are 1, 2, and 3 years.
Profit is directly credited to the customers

account.
A minimum deposit of Rs. 25,000 is required.
Loan facility is also provided on the basis on this account.
M O N T H LY P R O F I T PAY M E N T S
ON RS. 100,000
TENOR OF DEPOSIT
One Year
Rs. 650/- @ 7.80%
Two Years
Rs. 670/- @ 8.04%
Three Years
Rs. 730/- @ 8.76%
MONEY GRAM
Bank
Alfalah
Limited
in
collaboration
with
MONEYGRAM offers remittance service to Pakistan. It
is
a person-to-person money transfer service that allows

consumers to receive money in just a few minutes.
Security
Money Gram service is already being used all over the world because of the secured
and quick transfer of money, which is possible through an extensive network of
quality agents, linked by computer.
Convenience Of Customers
It is available in over 154 countries and in more than 40,000 locations worldwide.
Therefore money is transferred immediately and arrives at the receiving end within
10 minutes. One does not have to be an account holder neither needs a credit card
to avail this facility.
Free Message Service
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A 10 words message can be received from the sender with every transaction
without any extra cost.
LENDING
PRODUCTS
OFFERED
BY
BANK
Bank Alfalah offers many lending products to its customer. They can get running
finance for their working capital requirements as well as trade finance for importing
their merchandise. The complete detail of all of these lending products is given in
the Credits section of this report. Some of the major lending products of Bank
Alfalah Limited are:
Overdraft
Cash Finance
Finance Against Trust Receipt
Finance Against Imported Merchandise
Export Bills Discounting
Letter Of Credit
Local Bills Purchased
CONSUMER
FINANCING
AT
BANK
During the time of my internship (June August 2002), Bank Alfalah Limited was
only indulged in Corporate Credits and did not provide Consumer Financing.
Recently, Bank Alfalah Limited has started Consumer Financing as well. It is
providing financing for items like
Televisions
Music Systems
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VCD Players
DVD Players
Monitors
Refrigerators
Deep Freezers
Microwave Owens
Washing Machines
Ceiling Fans
Pedestal Fans
Room Coolers, etc.
The consumer financing facility is available for products of companies like
Philips
Haier
Super Asia, etc
ELECTRONIC
BANKING
AT
BANK
A L FA L A H AT M s
Bank Alfalah Limited also provides the facility of ATMs to its customers. Using this
facility customer can withdraw cash at any time avoiding the lengthy procedure of
cash withdrawal.
ONLINE BANKING
Bank Alfalah Limited is one of the few banks in Pakistan that offers On-line Banking
facilities. Customers have the convenience of walking into the nearest branch of
Bank Alfalah in any of the 22 cities of Pakistan and operate their accounts.
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PHONE BANKING
Bank Alfalah Limited is planning to introduce Mobile banking facilities to its
customers in near future.
E-BANKING
Bank Alfalah Limited is also going to introduce e-banking to facilitate its valued
customers.
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PRICE
The amount of money the customers pay for the product of a
company.
Bank Alfalah Limited provides different products and services to its customers,
which have been discussed in previous section. Pricing of products means the
commission to be paid by the customer in return of services provided by
the bank. The price paid for the services mainly include:
Mark Up/ Interest
Bank Charges
Fees and Bank Commission etc.
These charges and commissions are prescribed on Schedule of Bank Charges

(SOC) and keep on changing from time-to-time, and are issued by the bank
periodically (generally after six months). The price charged for all the products and
all the services is given in complete detail in the schedule of bank charges that is
given below.
SCHEDULE OF BANK CHARGES

FOR THE PERIOD JAN 01, 2001 TO JUNE 30, 2001
DOMESTIC BANKING
R E M I T TA N C E S ( D O M E S T I C )
Pay Order (A/c Debit)
Pay Order (Against Cash)
Rs. 10 (flat)
Rs. 10 (flat)
Cancellation of Pay Order

Issuance of Duplicate Pay Order
Rs. 100 (flat)

Rs. 100 (flat)
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Issuance of Drafts, MTs, & TTs
0.25% Minimum Rs. 25
Up to Rs. 10,000
From Rs. 10,001 to Rs. 100,000
From Rs. 100,001 to Rs. 1,000,000
0.075%
From Rs. 1,000,001 to Rs. 2,000,000
1000
Over Rs. 2,000,000
0.060%
Minimum
Rs.
Minimum
Rs.
2000
If a Party is Maintaining Average Balance of Rs.
100,000 in Current Account then charges will be
deducted for the issuance of PO and DD, drawn on any
Bank Alfalahs branch.
Rs.
Cancellation of DDs / TTs
100
(flat)
Issuance of Duplicated DD
cancellation
Rs. 100 (flat) per item
Issuance of SBP Cheque (if permissible by SBP)
Rs. 500 per Cheque
per
M I S C E L L A N E O U S C H A R G E S - C O M M U N I C AT I O N
Courier Charges
Rs. 150
Inland
Rs. 1250 or actual
Foreign
whichever is higher
E-mail charges
Internet access charges
Rs. 50 per e-mail

Rs. 50 per hour
Fax charges
Rs. 150 or Actual, which
Inland
ever is higher
Foreign
Rs. 250 or Actual, which

ever is higher
Telex charges
Rs. 200 or Actual
Inland
whichever is higher
Rs. 500 or Actual
Foreign
whichever is higher
Postage Charges
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Inland
Foreign
Rs. 100
Rs. 200
OTHER CHARGES
Rs. 150 (Except PLS.
Account Closing
Saving Account)
Out of pocket Expenses (not covered by Schedule of

Charges)
Standing Instructions
Actual
Rs. 100 per instruction
Online Cash transactions (not maintaining minimum

balance)
Rs. 300
F I N A N C E S / A D VA N C E S
A D VA N C E S
C h a r g e s f o r A d v a n c e s i n A d d i t i o n t o M a r k - u p / P r o fi t o n
Investment
1.00% of project facility
Project examination fee (where applicable)
requested
Rs. 1000 (flat) Where
Interim Review / Processing Fee
applicable
Renewal of facility / New Facility Initiation (where

applicable)
Commercial borrower
Rs. 2,500 (flat)
Individual / non-commercial borrower
Rs. 750 (flat)

0.50% - 1.00% (on sanction/
Commitment Fee / up-front fees (where applicable)

Legal & Administrative fee
Miscellaneous Charges (documents, evaluation of
security, and maintenance there to)
Replacement of securities (interim)
To mark lien on securities not issued by us
renewal)
Actual
Rs. 1000 (flat)
Rs. 250 (Services Charges)
Registration of Charge with Registrar of Joint Stock

Companies
Rs. 500 plus Actual
Charges for Advances Against Pledge/Hypothecation

Godown Rent
Staff Salaries
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a)
Godown Inspection Charges (where applicable)

Within municipality limit or within a radius of 5km
from Branch
Rs. 500 up to Rs.

10M Facility
b)
Rs. 1000 over Rs.

10M Facility
Out side, District limits
Rs. 1000 + Traveling

Expenses (outside
municipality)
Other incidental expenditure, e.g. insurance, legal,

etc
Actual
Collection of coupon (on Government certificates

issued by other bank/saving centers under lien to
Rs. 250 per coupon
us)
Issuance of Delivery Orders against Finance
against Imported Merchandise, Cash Credit and all
Rs. 500
goods under pledge.

Issuance of NOC (customers request) on request
of customers/clients for creating additional / paripassu charge/second charge on their fixed assets
Rs. 5000
for acquiring further project finance from other

Banks/Financial Institutions.
Service Charges on over due amount (where
customer fails to pan obligation on agreed / due
date) including Payment Against Documents /
Finance against Imported Merchandise / F.T.R /
0.50% of overdue amount in

addition to the mark-up
Acceptances & Mark-up Advances
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If a party fails to pass on

committed business in
writing while getting the
credit Line sanctioned in its
favor, the bank reserves the
Business Commitment & Compensatory
right to recover
Commission
compensatory commission
maximum at the rate of
5.00%, to the extent of
shortfall in business so
committed to be routed
through us.
G UA R A N T E E S
Guarantees issued to shipping companies in
lieu of Bills of Lading, Airways Bill and Railway
Rs. 800 (flat)
receipt
Guarantees issued to Collector of Customs in
lieu of payment of Export duty, which remains
valid for 6 months
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Minimum Rs. 1000

0.20% per quarter or part there
Guarantees secured against Cash
0.50% per quarter or part thereof
of Minimum Rs. 500
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Where total value of Guarantee

Other Guarantees:
business of a customer during a

period of limit or calendar year
0.50% per quarter Minimum Rs.
Up to Rs. 3M
750
Above Rs. 3M to Rs. 5M
Above Rs. 100M
Subject to negotiation while

confirming with SBP directives
Issued at Other Banks request in Pakistan
Min Rs. 750

Against Foreign Banks Guarantees
Min US$ 15
Rs. 300 per amendment
Amendments of Guarantees
Increase in amount and or Extension in period
Commission as per item 1.d)

above
Rs. 75 per quarter until the
original guarantee is returned to
Administrative fee (expired guarantees)
the bank (not to be charged if

100% collateral is held)
CONSUMER BANKING
S A L E / P U R C H A S E O F S E C U R I T I E S , S A F E C U S T O DY,
A RT I C L E S I N S A F E D E P O S I T S A N D S A F E D E P O S I T
LO C K E R S
S A F E D E P O S I T LO C K E R
Fee for safe deposit lookers (to be recovered
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Rs. 150
in advance or at commencement of the
Rs. 1250 or actual whichever is
period yearly/half yearly/quarterly as the
higher
case may be)

Small
Rent
Medium
Rs. 1000 per annum.
Large 1
Rs. 1500 per annum.
Large 2
Rs. 2500 per annum.
Extra Large
Rs. 3000 per annum.

Rs. 3500 per annum.
Locker fee will be waived if an interest free

Deposits as mentioned is maintained during
the tenancy of lockers with a minimum
period of one year.
Deposits
Small
Rs. 10000
Medium
Rs. 15000
Large 1
Rs. 25000
Large 2
Rs. 30000
Extra Large
Rs. 35000
Key Deposit (in advance to be refunded on

termination)
Breaking
Rs. 1000 per locker

Rs. 2500 per Locker
Late Fee (Locker Rental)

Small
Rs. 20 per month
Medium
Rs. 30 per month
Large 1
Rs. 50 per month
Large 2
Rs. 60 per month
Extra Large
Rs. 70 per month

At 50% discount on rates & no key
Locker facility for staff of Bank Alfalah Ltd.
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SALE / PURCHASE OF SECURITIES

0.125% on the first Rs. 10,000 of
purchase price or cost thereof.
Sale / Purchase of shares
Minimum Rs. 50 and 0.10% on

amount exceeding Rs. 10,000 or
Minimum Rs.75
Withdrawal fee
Withdrawal fee on shares/securities held in
safe custody (to be recovered at time of
withdrawal)
0.50% on the first Rs.10,000 of the
Withdrawal fee on Govt. securities where

shares and/or securities sold are from
against item 2.a) OR
Withdrawal fee, as shown against item (2b)
paid up value Minimum Rs. 50 and

0.15% on amount exceeding
Rs.10,000 Minimum Rs. 100
Rs. 5 per scrip
(i) and (ii) whichever is higher, will be

charged.
0.5% on the amount of interest/
return/dividend collected/paid
Collection of profit/return and dividend
including deposit certificate Issued

by Government agencies Minimum
Rs. 50
Handling charges for (conversing
Rs. 25 per scrip. Rs. 50 (flat) in
renewal/consideration/subdivision of Govt.
case of Deposit Certificate issued
Securities).
by Government agencies
A RT I C L E S I N S A F E C U S T O DY
Actual charges charged by CDC,
plus 1.0% of share value on the
Share custodial services of Central
first of every month or Ps. 5 per
Depository Company of Pakistan Ltd.
share each month, which ever is

higher (payable up-front, in
advance)
Rs. 1.00 per 100 cube inches or any
Boxes & Packages
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part thereof with a Minimum of

Rs.200
Rs. 0.50 per 25 square inches or
Envelopes
any part thereof with a minimum of

Rs. 100
I SS UA N C E O F C E RT I F I C AT E F O R S A F E I T E M S
Issuance of Duplicate Securities
I N WA R D
OUT
WA R D
Rs. 1000 (flat)
R E M I T TA N C E
AND
CHEQUE
PURCHASE
US$ 15 or equivalent PKR
US$ 15 Plus 0.50% Minimum $ 5 or
Outward T.T. through Debit of Account
equivalent PKR
Against Surrender of Foreign Currency notes

(Also applicable if the Foreign Currency
Account is funded with cash for onward
remittance)
US$ 5 or equivalent PKR
US$ Plus 0.5% Minimum US$ or
Demand Draft through Debit of Account
Against surrender of Foreign Currency notes
equivalent PKR
(Also applicable if the Foreign Currency
Account is funded with cash for onward
remittance)
Rs. 200 plus Actual Fax, Telex and
Issuance of duplicate FDD
Postage charges
Rs. 200 plus Actual Telex and Postage
Cancellation of FDD/FTT/FMT
charges.
Inward:
If proceeds are credited to an account
Nil
maintained with us
Others
US$ 5 or equivalent
Received from abroad or local banks branches
Minimum US $3 Maximum US $6 plus
& where payment is demanded in Foreign
Actual Postage / Telex charges are
Currency
recoverable from collecting bank.

Nil, if proceeds are credited to an
Home Remittance
OLLEGE
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Rs. 10 plus Money order / Telegram
Other
charges
FOREIGN BILLS PURCHASED / COLLECTION

Purchase (Short Tem Receivable)
0.5% Min Rs. 300
Encashment
0.4% Min Rs. 300
Issuance
1%
FCY Cheques / Drafts / TC s sent on collection
0.20% plus postage @ Rs. 50/(correspondent bank charges will be

extra, if any)
Foreign Exchange Permits

Family Maintenance
Rs. 1000 per transaction
Studies Abroad
SBP approvals for capital transfers, dividends,

freight
Other Approvals from SBP

OTHER
Unpaid Items
RS. 200 or US $5
Correspondence Charges
Actual (if any will be recovered
Foreign Currency (cash handling services)

under FE-25 (SBP)
0.5% on cash deposit
Postage
Rs. 150 or Actual, whichever is higher.
Counter Service
Rs. 1250 or Actual, whichever is higher
Long Telex per Swift
Short Telex per Swift
INLAND LETTERS OF CREDIT

First Quarter
Issuance
Subsequent Quarter
Minimum
(or part there of )
(of Part thereof)
Annual Letter of Credit volume up to Rs. 25M.
1000
Annual Letter of Credit volume up to Rs. 50M.
060%
030%
Annual Letter of Credit volume in excess of Rs. 50M
050%
0.25%
040%
0.20%
Amendments
Rs. 400 (flat) per amendment
Amendment involving increase in amount and or

extension in period of dispatch / delivery /
negotiation.
Rs.
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Rs. 400 per amendment plus commission as

per item number. 1a) above
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a) Rs. 500 (flat) per Bill charged at the time of

retirement of bill
Acceptance Commission
b) In addition commission at the rate of

0.1245% per month for any period beyond the
validity of Letter of credit Minimum Rs. 150
0.25% per quarter of part thereof Minimum Rs.
Confirmation
300
Collection
Documentary
Through branches of our bank

Clean (including cheques)

Purchase of Bills other than those drawn against
Letter of Credit
0.35% Minimum Rs. 150 plus Mark up (From

date of purchase to date of realization)
0.25% Minimum Rs. 100 plus Mark Up
(From date of purchase to date of realization)
Purchase of usance Draft under usance

Letter of Credit
0.30% Minimum Rs. 100 plus mark-up

Ps. 51/1000/day
Mark up if retired up to 21st day
Ps. 52/1000/day
Mark up if retired during next 210 days

Dividend Warrants etc.

Minimum Rs. 300
Negotiation at Sight
Collection Charges for Usance Bill

Unpaid
Returning Charges:
Documentary Bills
Rs. 100 per bill
Clean Bills
Rs. 50 per bill
Other charges
Collection agent charges
Actual
Postage
Rs. 100
Telex
Rs. 500 (full)
Storage charges
Rs. 50 per pack per day
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INTERNATIONAL BANKING
I M P O RT S
Registration with EPD
Registration of New import Registration
Rs. 1200 application
Processing of new import Registration
Rs. 500 per application
Renewal of category pass book and

supply
Endorsement on category pass book
Rs. 200 (flat)
(transfer of photocopy) thereof
Rs. 1000 (flat)
NOC/Transfer of pass book to other banks
Rs. 500 per annum
Holding Expired category pass book

Import on Consignment Banks
Handling Charges
0.25% (flat) of value Minimum Rs. 750
OTHER CHARGES
Postage
Rs. 150 or actual whichever is higher
Courier Service
Telex Messages
Full Telex of Letters of Credit
Rs. 1500 or Actual whichever is higher.
Brief Telex of Letters of Credit
Rs. 500 or Actual which ever is higher.
Brie Telex / Fax amendment of LCs
Rs. 500 or actual which ever is higher
Obtaining credit reports on suppler
Rs. 500 per report
Correspondence Charges, if any will be

recovered.
Actual
Service charges against import

transactions i.e. import bill (PAD), Usance
bills under Letter of Credits, collection and
0.10 (flat) Minimum Rs. 300
condiment basis
Handing of discrepant documents
presented under L/C
OLLEGE
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PROMOTION
All activities that a company undertakes to communicate and
promote its products
This is an age of competition. Numerous organizations are providing financial
services to the customer. These days every one is facing pressure of competitors. In
this world of growing competition, the only way to survive and grow, for an
organization, in the market place is the proper marketing and promotion of its
products.
It is the case with Banking Companies. There is large number of foreign and local
banks working in the country and it has been noticed that they are emphasizing
much on their marketing strategies. In this scenario, the key for a bank to succeed
and attract its customers is adequate promotion of its products &services.
The bank can attract and retain its customers through:
Sales Promotion
Advertisement
Direct Marketing
Public Relations
Bank Alfalah Limited does not carry out aggressive marketing for any of its
products. Its promotional tactics are designed for to be beneficial to the bank on the
whole than to any specific section or product of Bank Alfalah Limited. Bank Alfalah
has adopted different approaches for the accomplishment of this purpose. Along
with the advertisement, the bank is providing personal services to its clients with
maximum security as other banks provide. Bank also encourages the public relation
policy of marketing. Some brochures and promotional material has been printed but
it is distributed mainly through the clients who visit the branch for their day-to-day
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business or through the customers who come to get information about new
schemes launched by the bank.
P RO MI N EN T T A C TI C S / C A MPA I G N S
A D V E RT I S E M E N T S I N T H E P R E SS
Once in a while, Bank Alfalah Limited gives advertisements for its products and
services in some of the leading newspapers. Advertisements for Job Opportunities
are also placed in the daily newspapers and magazines.
Also, some fascinating advertisements have been printed on Daewoo City Busses,
which serves as a dynamic source of marketing
Nowadays we see that Bank Alfalah Limited has sponsored a sports news program
on Ten Sports that is aired a few times daily.
B I L L B OA R D S
A large number of billboards have been affixed on the light poles around the city.
According to their promotional policy, billboards are placed in places where they are
most likely to gain attention of potential businesses and customers.
The marketing company of Bank Alfalah Limited after consultation with the officials
has also placed small mopies (signboards) that are light from the inside on the
green belts on roads on different parts of the city.
For example on the way to the New Airport, you can see the signboards of Bank
Alfalah Limited on the light poles.
B A N K A L FA L A H S Q UA R E
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Due to Bank Alfalahs assistance for the construction of fountain in Liberty

Market Square, it is named as Bank Alfalah Square.
Bank Alfalah Square, for being situated in such a business and commercial area and
in the heart of the most posh and frequently visited area of Lahore has its unusual
importance and has resulted in successful promotion of Bank Alfalah Limited.
A L FA L A H M I N I G O L F
Lahories are a fun loving clique. They thrive on good sources of entertainment and
Bank Alfalah Limited has made it possible by formation of Alfalah Mini Golf near
Gulberg. It not only provides a source of recreation to the people but it serves as a
major source of marketing for the bank.
SPONSORSHIP OF EVENTS
Bank Alfalah Limited regularly sponsors various functions and events and
tournaments, which bring much good name to the bank.
Recently Bank Alfalah Limited sponsored Gymkhana Golf Tournament held in
Lahore. Some time ago Bank Alfalah Limited sponsored an International Squash
Tournament held in Lahore.
Bank Alfalah Limited has also on numerous occasions sponsored various fund
raising campaigns and concerts.
WEBSITE
Keeping abreast of the need of the day, Bank Alfalah Limited maintains a very
informative website. The website is updated regularly and provides information on
all aspects of the bank and its products.
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SHAAH DIN MANZIL

Construction of Shaahdin Manzil as the Main Branch Lahore is going to be the
revolutionary step for Bank Alfalah Limited. It would not serve just as a main branch
only, but it would also be a great source of ever growing marking and promotion of
bank. This is because it is located on the Sharah-e-Jinnah (The Mall Road) that is the
hub of business activity in the city.
MINOR DRAWBACKS
One drawback or shortcoming is that, Bank Alfalah Limited has formulized a lot of
products and services for its customers, even more than other commercial banks,
but any advertisement on electronic media has not been seen.
Bank Alfalah Limiteds major competitor Union Bank Limited has started large
media campaign, so keeping in view these threats, Bank Alfalah should emphasize
more on its advertisement.
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PLACE
The activities a bank undertakes to make products and services
easily available or accessible to the customers.
Bank Alfalah Limiteds objective has been to expand its branch network to meet the
clients needs. The bank is well positioned and geographically poised, to cater for
increased business demands, from its existing potential clientele. During last year
under review, Bank Alfalah Limited opened eleven new branches and has thirtyfive branches, spread all over Pakistan covering major business centers and
principle cities. Bank Alfalah Limited plans to add more branches to his growing
network in the subsequent years.
At present, Bank Alfalah Limited has opened all its branches at commercial and
business areas or near to commercial areas so that the customers or clients face no
problem in reaching the bank.
PROPOSED MAIN BRANCH, LAHORE SHAAH DIN

MANZIL
The cities in which Bank Alfalah has penetrated to date is presented in alphabetical
order
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Bahawalpur
D.G. Khan
Fisalabad
Gujranwala
Gujrat
Hyderabad
Islamabad
Jehlum
Karachi
Lahore
Manshria
Mardan
Mingora Sawat
Multan
Peshawar
Quetta
Rawalpindi
Rahim-yar-Khan
Sahiwal
Sialkot
Sargoda
Sukkar
PROMINENT BRANCHES
B A H AWA L P U R
Branch Code
0085
Branch Address
Telephone Number
B-v/912, Circular Road Bahawalpur

0621-889871-2,889922-5
Fax Number
E-mailC O L L E G E
889874
O F bahawalpur@bankalfalah.com
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DERA GHAZI KHAN

Branch Code
Branch Address
0641
Liaquat Road Dera Ghazi Khan
Telephone Number
0641-468105
FA I S A L A B A D
Branch Code
Branch Address
0036
Statelife Building Liaquat Road Faisalabad
Telephone Number 041-617433,617436-9

Fax Number
041-617432
E-mail
fsd@bankalfalah.com
G U J R N WA L A
Branch Code
Branch Address
0053
B-XII-75-145 Karishan Nagar G.T. Road Gujranwala
Telephone Number 0431-255516-255556

Fax Number
0431-255295
E-mail
guj@bankalfalah.com
G U J R AT
Branch Code
Branch Address
0081
15/231, Circular Road Opposite Rampiari Mahal Gujrat
Telephone Number 0433-530068-530072-530219

Fax Number
0433-530319
E-mail
gujrat@bankalfalah.com
HYDERABAD
Branch Code
Branch Address
0045
Near Hotel Faran Saddar, Hyderabad
P. O. Box
10123
Telephone Number 0221-786020-2 & 786881
Fax Number
E-mail
OLLEGE
0221-786023
hyderabad@bankalfalah.com
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ISLAMABAD
Branch Code
Branch Address
0035
1-B, Awan Arcade Jinnah Avenue, Blue Area Islamabad
Telephone Number 051-2206986-2206987

Fax Number
051-279897
E-mail
isb@bankalfalah.com
KARACHI
Cloth Market
Branch Code
Branch Address
0027
Laxmidas Street Cloth Market Karachi
P. O. Box
Telex No
13342
021-29257
Telephone Number
Fax Number
021-2401621-6
021-2401627
E-mail
cloth@bankalfalah.com
Gulshan-E-Iqbal
Branch Code
0011
Plot No. SB-15/I, II, III, Block-13-B Gulshan-E-Iqbal
Branch Address
Karachi
Telephone Number
Fax Number
4984904 & 4984937

4984971
E-mail
gulshan@bakalfalah.com
Jodia Bazar
Branch Code
0026
Gulzar Manzil, NP/12/49-50, Mohammad Shah Street,
Branch Address
Jodia Bazar, Karachi
Telex No
Telephone Number
OLLEGE
021-7532483-4
7532483-4
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Fax Number
E-mail
7532485
jodia@bankalfalah.com
Korangi
Branch Code
0023
Branch Address
P. O. Box
Aiwan-e-Sanat,ST-4/2 Korangi Industrial Area Karachi74900
Telephone Number
Fax Number
021-5065702-5050387-5050968-5050653-505096-4
5050623
E-mail
korangi@bankalfalah.com
M.A. Jinnah
Branch Code
Branch Address
0015
Plot No.23/1, Zelin Palace M.A.Jinnah Road Karachi
Telephone Number
Fax Number
021-7750627-7750628-7750630
7750629
E-mail
maj@bankalfalah.com
I. I. Chundrigar
Branch Code
Branch Address
0005
B. A. Building I. I Chundrigar Road Karachi
P. O. Box
Telex No
6773
29823 FALAH-PK
Telephone Number
Fax Number
021-2414030 to 39
021-2417006
E-mail
Karachi@bankalfalah.com
Main Branch
Branch Code
Branch Address
0005
B. A. Building I. I Chundrigar Road Karachi
P. O. Box
Telex No
6773
29823 FALAH-PK
Telephone Number
Fax Number
021-2414030 to 39
021-2417006
E-mail
Karachi@bankalfalah.com
North Karachi Industrial Area
Branch Code
0009
Plot No. SA-1 (ST 1/1) Sector 12-b, Gabol Town North
Branch Address
OLLEGE
Karachi
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Telex No
Telephone Number
021-6987690
021-6987644 &051
Fax Number
E-mail
021-6986051
nkia@bankalfalah.com
North Napier Road Karachi
Branch Code
0003
Branch Address
Telephone Number
A/26/5, North Napier Road Karachi

(021) 7540065
Fax Number
E-mail
(021) 7540066 & (021) 7540067-68, 7544021-24
Paper Market Branch
Branch Code
0018
Branch Address
Telephone Number
S.R. 7 / 23, Campbell Street Paper Market Karachi.

021-2211357-8,2211242-2211242-3,2211353
Fax Number
E-mail
2626891
papermarket@bankalfalah.com
S. I. T. E. Karachi
Branch Code
0019
Telephone Number
D-38, Habib Oil Mills Compound Near Siemens

Chowrangi S.I.T.E. Karachi
021-2582114-to 16 &2582990-2
Fax Number
E-mail
2582113
sitebranch@bankalfalah.com
Branch Address
Shahrah-E-Faisal
Branch Code
0030
43-11 A, P. E. C. H. S. Block-6 Main Shahrah-e-Faisal
Branch Address
Telex No
Karachi
021-4313536-8 & 021-4522460-4
Telephone Number
Fax Number
021-4313536 7
021-4313539
E-mail
faisal@bankalfalah.com
Stock Exchange
Branch Code
OLLEGE
0012
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LAHORE
Allama Iqbal Town
Branch Code
Branch Address
0042
36 College Block Allama Iqbal Town
Telephone Number
Fax Number
042-5432961
5432960
E-mail
Badami Bagh Lahore
Branch Code
Branch Address
0041
110- Grain Market, Peco Road Badami Bagh Lahore
E-mail
Manager
badamibagh@bankalfalah.com
Name
Tele Phone Number
Mr.Sardar Ahmed
042-7722274
Circular Road
Branch Code
0037
Telephone Number
43-A Main Circular Road UPP:Mazar Hazrat Snan

Manammad Ghous Lahore
042-7638256-8
Fax Number
E-mail
042-7653384
circular@bankalfalah.com
Manager
Name
Mr.Malik Riazul Haque
Tele Phone Number
042-7656744
Branch Address
Defence Branch
Branch Code
0033
9-G, Commercial Area LCCHS, Phase-I Lahore Cantt
Branch Address
Lahore
Telephone Number
Fax Number
042-5729722-6
042-5729727
E-mail
Manager
defence@bankalfalah.com
Name
Tele Phone Number
Mr.Saleem Javed Mirza

042-5729722/26
Gulberg Branch
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Branch Code
Branch Address
0028
125-E/5, Gulberg-III Main Boulevard Lahore
P. O. Box
Telephone Number
10123
042-5877800-6 & 5757793-95
Fax Number
E-mail
5754900
gulberg@bankalfalah.com
Manager
Name
Mr. Arfa Waheed Malik
Tele Phone Number
042-5764856
LDA Plaza Branch
Branch Code
Branch Address
0006
Ground Floor Kashmir Road Lahore
Telephone Number
Fax Number
042-6306201-5
042-6368905
E-mail
Manager
lahore@bankalfalah.com and lda@bankalfalah.com
Name
Tele Phone Number
Mr. A. Zaheer Piracha

042-6303716
Township Branch
Branch Code
0039
Branch Address
Telephone Number
47-B-1, Block-10 Akbar Chowk, Township Lahore

042-5114722-5114733 & 5152831-5152833
Fax Number
E-mail
042-5113716
township@bankalfalah.com
Manager
Name
Mr. RizwanUl-Haq
Tele Phone Number
042-5114733
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SECTION SIX
SWO T A N A LY S I S &
RECOMMENDATIONS
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CHAPTER ONE: SWOT ANALYSIS

Bank Alfalah Limited is one of the most thriving commercial banks at present in
Pakistan. The organization is in the process of building itself into a force to consider.
The bank is doing all sorts of new things in order to accumulate a set of distinctive
competencies that could later on be transformed into a competitive advantage of
considerable value. In this process of developing, striving, facing minor set backs
and striving with even more zeal, the bank enjoys some strengths, needs to improve
upon some weaknesses, can exploit some opportunities and is hampered by few
threats.
This SWOT analysis of Bank Alfalah Limited takes into consideration the external as
well as the internal environmental structure of the bank.
STRENGTHS
The predominant strengths of Bank Alfalah Limited are
Humble Management
Strength And Commitment Of Sponsors
Efficiency
Phenomenal Growth
Vastly Experienced Management
Highly Professional Human Resource Department
Crucial Location Of Branches
Image Building Activities
Bank is financially strong and has a huge deposit reserve
Its cost of funds is less as compared to many of its competitors
Personnel of Alfalah are well trained and highly skilled. Majority of employees
has many years of experience in banking sector and are an asset for the bank
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Bank Alfalah has a wide network of branches at the ideal locations, catering
the financial needs of its clients
Foreign Trade is the focus of bank. It has become an ideal bank for the
importers and exporters
WEAKNESSES
The chief weaknesses are
Small Size
Less Efficient Computer And I. T. System
Disproportionate Presence Of Old Staff In The Upper Management Hierarchy
Skill Set Of Employees Is Not Up to The Mark As There Is No Job Rotation
Foreign Banks Still Are A Little More Prestigious
Bank Alfalah Limited Does Not Possess Foreign Network
No Advertising In Electronic Media
It is a step behind in using new technology as compared to other banks
Most of the employees are overloaded with work. There is uneven distribution
of work and promotions are not very timely
It is slow in the introduction of new services
OPPORTUNITIES
The opportunities on which bank Alfalah can capitalize upon are
Extension of local branch network
Establishing foreign branch network
Capitalizing on information technology
Unexplored market of multinational corporations
Growth in textile sector
Adopt E-banking
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THREATS
The predominant threats Bank Alfalah is facing at the moment are discussed in the
following lines.
Private sector banks
Heavy reliability on only one market segment i.e. Textile.
Network expansion by foreign banks
If Pakistani banks (especially state owned banks), backed by huge network

improve the service they give and their employee skill set
Terrorist image of the country
Inconsistency in government policies
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CHAPTER TWO: RECOMMENDATIONS

In the light of above given SWOT analysis, in the following lines I shall put forth
some of the measures Bank Alfalah Limited should necessarily take in the near
future. The following recommendations include short term as well as long-term
issues.
Bank Alfalah Limited should continue to expand its business, by increasing its
deposit portfolio through aggressive market penetration strategies.
Bank Alfalah Limited needs to use more marketing channels 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.
Bank Alfalah Limited should immediately improve its Information Technology

System. The soft wares currently in use should be made error free, online
banking should be launched as soon as possible, as it is the need of the hour,
and integrated data interchange should be inculcated to enable top
management to monitor all activities going about in all branches through
generation of special purpose reports.
Management should distribute work equally among different employees.

Some of the employees are overburdened while some sections are
overstaffed.
There are a disproportionate number of seasoned bankers in the top

management who have the responsibility of making strategic decisions. This
think tank should also include a reasonable proportion of young bankers
whose mindsets teem with new creative ideas, which might prove to be
invaluable for Bank Alfalah Limited.
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The top management should immediately start thinking in terms of rotating

the employees in various departments, as this transforms work force into
human capital. If a particular individual keeps on employing his / her efforts in
one sphere of banking it would not only create a sense of monotony and
boredom, but also not help improving the skill set of Bank Alfalah Limited
employees.
Bank Alfalah Limited should embark upon an even more aggressive

management strategy of expansion of branch network not only in the local
market (Pakistan), but also in foreign markets because that is a huge
untapped opportunity for Bank Alfalah Limited.
Bank Alfalah Limited needs to introduce new products like credit cards for its
customers. It should also avail the facilities of E-Banking.
One of the most pressing needs of the time is to advertise Bank Alfalah
Limited in the electronic media. Bank Alfalah Limited has not, till date,
employed advertisement in electronic media as a full fledge marketing tool. I
think it is high time that BAL does this.
Bank Alfalah Limited needs to improve its website. More information relating
to financial performance of the bank should be available on the website.
Bank Alfalah Limited should evolve a very serious management policy to

attract multi national corporations as its clients. This action, if actualized,
would not only prove to be highly profit generating, but it would also
contribute a lot towards Bank Alfalah Limiteds image building.
The number of women hired by Bank Alfalah Limited is very less. Bank Alfalah
Limited should employ more women. Moreover it should also recruit women
for working in Credits
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Presently, like most of the commercial banks working in Pakistan, a high

percentage of Bank Alfalahs credit client hail from two or three industrial
sectors. In the near future the management of Bank Alfalah Limited should
try its level best to diversify as regards the mix of its advances; reason being
over reliability on one sector of the economy could hurt the financial
soundness of the bank if any adverse change in the external environment
takes place.
Bank Alfalah should make makes work teams in Credits like other banks such
as ABN AMRO and City Bank. It will have a positive impact on the morale of
employees. Their performance will improve as a result of distribution of work
and responsibility. And it will also enable the bank to hire talented women in
the Credits as well.
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ANNEXURES
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ANNEXURE ONE: BORROWERS

BASIC FACT SHEET-FOR
CORPORATE
Date of Request_______________
(TO BE COMPLETED IN CAPITAL LETTERS OR TYPE WRITTEN)
1 BORROWERS PROFILE:
Name
Address
Phone #
Office
Res.
National Identity Card #
Fax #
E-mail Address
National Tax #
Sales Tax #
Import
Registration #
Date of:
Export
Registration #
Establishment
Opening of A/c
2. DETAILS OF DIRECTORS/OWNER/PARTNERS:
Name
Address
Phone #
Office
Res.
Fax #
E-mail Address
Share holding
% of Shareholding
National Tax #
Amount
Name
Address
Phone #
Office
Res.
Fax #
Share holding
% of Shareholding
E-mail Address
National Tax #
Amount
Name
Address
Phone #
Fax #
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Office
Res.
National Tax #
Share holding
% of Shareholding
Amount
Name
Address
Phone #
Office
Res.
Fax #
Share holding
% of Shareholding
E-mail Address
National Tax #
Amount
3. MANAGEMENT:
A) EXECUTIVE DIRECTORS/PARTNERS
Name
Address
NIC #
1
2
B) NON-EXECUTIVE DIRECTORS/PARTNERS
Name
Address
NIC #
1
2
4. CORPORATE STATUS:
Sole Proprietorship
Phone #
Phone #
Partnership
5. NATURE OF BUSINESS
Industrial
Commercial
Public/Private
Company
Agricultural
Services
Limited
Any Other
6. REQUESTED LIMITS
Amount
Tenor
Fund Based
Non-Fund Based
7. BUSINESS HANDLED/EFFECTED WITH ALL FINANCIAL INSTITUTIONS DURING THE
LAST ACCOUNTING YEAR:
Imports
Exports
Remittances
effected
(if
any)
8. EXISTING LIMITS AND STATUS:
Amount
Expiry Date
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Fund Based
Non-Fund
Based
9. ANY WRITE-OFF, RESCHEDULING/RESTRUCTURING AVAILED DURING THE LAST
THREE YEARS:
Name of Amount During 1st Amount During 1st Amount During 1st Year
Financial
Year
Year
Institution Write-off Reschedul Write-off Reschedul WriteRescheduled/
ed/Restru
ed/Restru off
Restructured
ctured
ctured
10. DETAILS OF PRIME SECURITIES MORTGAGED/PLEDGED:

A) AGAINST EXISTING FACILITIES
Name
of Nature
of Total Amount Rank
of Net
Financial
Security
Charge
Value
Institution
Realizable
B) AGAINST REQUESTED/FRESH/ADDITIONAL FACILITIES

Name
of Nature
of Total Amount Net Realizable Value
Financial
Security
Institution
11. DETAILS OF SECONDARY COLLATERAL MORTGAGED/PLEDGED:

A) AGAINST EXISTING FACILITIES
Name
of Nature
of Total Amount Rank
of Net
Financial
Security
Charge
Value
Institution
Realizable
B) AGAINST REQUESTED/FRESH/ADDITIONAL FACILITIES

Name
of Nature
of Total Amount Net Realizable Value
Financial
Security
Institution
12. CREDIT RATING (WHERE APPLICABLE)

Name of Rating Agency
Rating
13. DETAILS OF ASSOCIATED CONCERNS (AS DEFINED IN COMPANIES ORDINANCE,
1984):
Name of Concern
Name
of Shareholding
% of Total Share
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Directors
Capital
14. FACILITIES TO ASSOCIATED CONCERNS BY THE CONCERNED FI:

Name
of Nature
& Outstandin Nature
& Over dues
Defaults
Concern
Amount of g as on Value
of
Limit
_________
Securities
15. DETAILS OF PERSONAL GUARANTEES

ETC TO SECURE CREDIT:
Name of Institutions/
Amount
the
persons
to of
Guaranto whom
Guarante
rs
Guarantee given e
PROVIDED BY THE DIRECTORS/PARTNERS

Validit
y
Period
NIC #
NTN
Net-worth
16. DIVIDEND DECLARED (AMOUNT) DURING THE LAST THREE YEARS:

During 1st Year
During 2nd Year
During 3rd Year
17. SHARE PRICES OF THE BORROWING ENTITY:
Listed Company
Break-up Value of the Shares in
case of (Pvt.) Limited Company
Current Price
Preceding 12 Month
Average
18. NET WORTH PARTICULARS OF ASSETS OWNED IN THEIR OWN NAMES BY THE
DIRECTORS/PARTNERS/PROPRIETORS):
Owners Name
Particulars
of Market Value
Particulars
of
Assets
Liabilities
19. DETAILS OF ALL OVER DUES (IF OVER 90 DAYS):

Name of Financial Institution
Amount
20. Details of payment schedule if term loan sought.
21. Latest Audited Financial Statements as per requirements of Prudential
Regulation-IV/NBFIs Rule 7 to be submitted with the Loan application form
22. Memorandum and Articles of Association, by laws etc, to be submitted by the
borrower along with the request.
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I certify and undertake that the information furnished above is true to the best of
my knowledge
COUNTERSIGNED BY:
____________________________________
CHIEF EXECUTIVES/BORROWERS
SIGNATURE & STAMP
___________________________________________
AUTHORIZED SIGNATURE & STAMP
(BANK/NBFI OFFICER)
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BIBLIOGRAPHY
BOOKS
Principles of marketing by Kotlar Armstrong 9 th Edition
Chapter 2nd.
Strategic Management by Fred R David
Principles of Marketing by Bober 9th Edition Chapter 2nd.
Research Methodology Eztel Walker Stanton 11 th edition
chapter no 3.
REPORTS
Consumer and Market Trend Report by Bank Al-Falah.
Data integration reports by Bank Al-Falah.
Bank Al-Falah Home scans Asia Pacific.
INTERNET
http://www.bal.com/home
http://www. bal .com/history
http://www.bal .com/products
http://www.bal/services
http://www.bal.com/branches
www.cfdccariboo.com/stretegies.htm
www.crfonline.org/orc/swot/m.html
abacus.bates.edu/admin/offices/career/webx/field_def.html
www.ump.kiev.ua/eng/gloss.html
www.indiainfoline.com/bisc/jmfm.html
www.marketconscious.com/dict3.htm
www.en.wikipedia.org/wiki/Qualitative_marketing_research
www.en.wikipedia.org/wiki/Quantitative_marketing_research
http://www.research.com
http://www.thenews.com/articles
http://www.articles.com/marketingforces.html
http://www.worldaffairs.com/conceptandcases.html
http://www.smeda.com/casestudies/marketingresearch.html
http://www.smeda.com/casestudies/markettrends.pdf
PDF RESEARCH FILES

2003_privatelable by Bank Al-Falah
2005_june_ap_insight by Bank Al-Falah
2005_q2_ci_trendwatch by Bank Al-Falah
2005_q3_ci_000 Bank Al-Falah
VISITS
Visit personally Bank Al-Falah at Shahdin Manzil The Mall
Lahore Lahore.
Visit at Bank Al-Falah at barket market main boulevard
Lahore.
Visit for collecting information about market research of
Bank Al-Falah and compare with other banks.
THE INSTITUTES AS BELOW
MCB Bank Lahore.
Askari Bank at Barkat Market Lahore market main
boulevard Lahore.
Bank Al-Habib at Barkat Market Lahore.
BRUSHERS
Collecting brushers from Bank Al-Falah.
Collecting brushers about products and history from

Bank Al-Falah.
Collecting products information from Bank Al-Falah

Barkat Market.
Collecting banking information from MCB Bank.
1,5,7,8,9,10,1
1,15,19,34,35
,144,145,147,
148,149,169,
170

Final MBA Project On Alfalah Bank

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FINAL PROJECT ON

BANK ALFALAH LIMITED

RAJA FAHEEM ANWAR

College of Information Technology,

Mr. Javed Warraich

may not spare them to

College of Information Technology

IN THE NAME OF ALLAH THE

IN THE NAME OF ALLAH SUBHANAHU,

MANAGEMENT STRUCTURE OF.......................................................................................................7

CHAPTER ONE: INTRODUCTION TO

CHAPTER TWO: THE BANK

Its banking operations

commenced from November 1, 1997. The bank is engaged in commercial banking

innovative technology to have an extensive range of products and services.

These achievements have been preceded by concerted effort

synergistic organizational structure leading to improvements

requirements of not just the conventional consumer, but the

Rupee Travelers Cheques

Anmol Saving Certificates

MoneyGram Remittance Services

Monthly Income Plan

AN OVERVIEW OF THE INDUSTRY

PRIME COMMERCIAL BANK

DEPOSITS (RS. IN MILLION)

CHAPTER THREE: THE BRANCH

Other than these

CHAPTER SIX: THE FUTURE OF BANK ALFALAH LIMITED

OUR CORE PHILOSOPHY OF HONESTY,

THE POLITICAL AND ECONOMIC LANDSCAPE:

The improving Return on Assets (ROA) suggests the increasing operational

The Return on Equity (ROE) indicates that returns to investors have

FOREIGN TRADE AND CORRESPONDENT BANKING:

developments, Bank Alfalah Limited will continue to follow a strategy based on

CHAPTER FOUR: AN INSIGHT INTO

Classification on the basis of functions

Classification on the basis of ownership

Public sector banks

Private sector banks

FUNCTIONS OF COMMERCIAL BANKS

Making Loans &

Agency Functions &

Purchase and sale

SPOTLIGHT ON THE CUSTOMER

THE KNOW YOUR CUSTOMER DRIVE

program is international in origin. Under KYC, at the inception of relationship with a

CREATION OF A BRIGHT FUTURE

Induction and orientation of the new employees

Coaching in basic workplace manners

Job description and career orientation

Identifying training and development needs

Sponsorship, projection and recognition

Explaining the appraisal process

Culture building and socialization

Guiding and coaching

Systematic interaction with new joiners

Our vision is to be a leading

Our mission is to maintain a

CHAPTER ONE: INTRODUCTION

THE CHAIRMAN (OUTGOING)

H. H. Sheikh Nahayan Mabarak Al-Nahayan

THE CHAIRMAN (NEW)

H. E. Sheikh Hamdan Bin Mabarak Al-Nahayan