Escolar Documentos
Profissional Documentos
Cultura Documentos
LETTER OF UNDERTAKING
INTERNSHIP CERTIFICATE
DEDICATION
I would like to dedicate the effort & struggle which I have made in the last 2 years since
getting admission in VU to my beloved parents & my family, especially to my mother. It was
looking impossible for me to complete this degree but with her sincere prayers and moral
support today with the blessing of Allah I am submitting my internship report. I am thankful
to Allah Almighty from the depths of my heart.
ACKNOWLEDGEMENT
This was looking like an uphill task but with the endless blessings of Allah and the vital
support from my parents I have reached this far. I am thankful to all the staff at Bank Alfalah
for being so cooperative and kind. I would specially like to thank the very kind Branch
Manager Mr. *** who was so supportive throughout my training. It has been a difficult
period of my entire life but with the blessing of Allah and the cooperation of all the people
around me I have managed to hang in there. I wish I had the words to express my feelings
here. I would humbly thank Allah Almighty for what he has blessed me with. I would extend
this special thanks to all the people who supported and helped me during the internship
program. Thank you.
Executive Summary
I was lucky enough to avail this chance of doing an internship at Bank Alfalah Ltd. ***
Branch. This duration of internship was six weeks. During the training I was introduced to
the functioning of all the departments operating in the branch. My report starts by discussing
the brief history of banking in the human history. Some types of banks that are operational in
the practical world are discussed briefly. History of banking industry in Pakistan follows that.
Then the report discusses the overview of my internship organization. It illustrates the history
of Bank Alfalah, its chairman & board of directors. Detail information about the bank's
branch network comes next. The financial performance of Bank Alfalah from the year 2010 is
presented. List of bank's products and services is also mentioned in detail followed by a brief
introduction to its various departments. Detail of my internship learning experience comes
after that. It contains the information that I was able to gather and understand regarding the
activities of the bank. Risks which the bank is facing are also discussed & after that in the last
portion of the report I have presented the conclusions which are followed by my humble
recommendations for the improvements.
Table of Contents
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Board of Directors
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Training Program
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Critical Analysis
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Following are the types of banks that are generally present in a country.
State Bank
Every country has its state bank. Its name may be different in different countries for example
in Pakistan it is known as the State Bank of Pakistan where as in the US it is called as the
Federal Reserve Bank. The functions of the state bank regardless of its name are the same in
every country. The most important function of the State Bank is to make an effective
monetary policy of a country with the help of which economic stability prevails in the
economy. It is responsible for printing of currency notes and gives loans to the government as
well. It also makes rules and regulations for all the banks working in the country. It monitors
their performance, audits & inspects them. If any bank is found involved in illegal banking
practices then it has the authority to penalize the bank.
Commercial Banks
These banks are interested in making profit. They give loans to people in the business sector
and earn profit on that. The business community of a country is an important customer and
asset of such banks.
Agricultural Banks
Agricultural banks provide loans to the farmers depending upon their needs and
requirements. In a country like Pakistan these banks have special importance as our country
heavily depends upon agriculture. Satisfying and fulfilling the needs of the farmer is very
important for the growth of our economy.
Saving Banks
Mostly these banks are state owned financial institutions which cater the needs of the savers.
These banks offer various saving schemes to the people with the help of which they can earn
a profit on their savings. National Saving Scheme is am example of such banks working in
Pakistan.
more than 100 cities all across Pakistan. In addition to that it has branches in Bahrain,
Bangladesh and Afghanistan. The registered office is at B.A. Building I.I Chandrigar Road
Karachi. Since 1997 the management of the bank has implemented new strategies and
policies to give the bank a distinct position in the market place.
Bank Alfalah is owned by the Abu Dhabi Group. The management of the bank has invested a
huge amount of money in new and revolutionary technologies to provide its customers with
an extensive range of excellent products and quality services.
The management of the bank is committed to strengthen its bond of trust with its customers
and provide them with uninterrupted services. The management of the bank strives to serve
its customers with the products and services according to their requirements. During the last
five years Bank Alfalah has emerged as one of the foremost financial institutions in the
country. There is an interesting attribute of bank Alfalah which is its Islamic banking
branches through out the country. Thus in addition to that conventional banking practices if
offers Islamic banking branches to its customers. Hence Bank Alfalah has two types of
branches in Pakistan:
1-
2-
Islamic Branches
H.H Sheikh Hamdan Bin Mubarak Al Nahayan is the chairman of Bank Alfalah Limited. He
is the member of UAE's ruling family. Following is presented his unedited message from
Bank Alfalah's official web site.
Since the inception of Bank Alfalah, by the grace of the Almighty, we have moved rapidly in
expanding our branch network and deposit base, along with making profitable advances and
increasing the range of products and services. We have made a break-through in providing
premier services at an affordable cost to our customers.
Keeping in view our valued clients and the need for constant and effective communication of
information, we have designed this website to be as user-friendly as possible.
As we pursue the path of excellence, customer satisfaction remains our priority. It is only
when we know our customers better, can we deliver a higher quality of services, thereby
adding synergy to our existing management expertise, financial strength and profitability.
This is yet another channel of communication for the delivery of quality products and
services that enhance value to our stakeholders.
Thank you for visiting our site.
H.E.Sheikh Hamdan Bin Mubarak Al Nahayan
Chairman
Director
Director
Director
Director
Director
To be the premier organization operating locally & internationality that provides the complete
range of financial services to all segments under one roof.
To develop & deliver the most innovative products, manage customer experience, deliver
quality services that contributes to brand strength, establishes a competitive advantage and
enhances profitability, thus providing value to the stakeholders of the bank.
Important to note is that Bank Alfalah has outsourced some of their tasks. These tasks include
receiving the postal mail from the courier service, keeping the record of all incoming and
outgoing mails, maintaining the attendance registers of employees, answering to telephone
calls and all the work of a peon. All of these tasks are non financial. At present Bank Alfalah
has an agreement with a local company and they go by the name of NIL who provide the
bank with people to carry out these tasks. All these people work under the branch manager.
Tags: Alfalah, Allah, Almighty, Area, BANK, Bank, Branch, Branch., CERTIFICATE,
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City
Branch(es)
City
Branch(es)
City
Branch(es)
Karachi
55
Manshehra
Fatehjang
Hyderbad
Bannu
Taxila
Sukkur
Chitral
Wah Cantt
Gawadar
Gojra
Hangu
Jacobabad
Muridke
Multan
MirpurKhas
Jaranwala
Sailkot
Larkana
Bahawalnagar
RY Khan
Lahore
43
Islamabad
14
Gugranwala
Kasur
Rawalpindi
18
Sahiwal
Sarghoda
Jehlumn
Ghotki
Chak 111SB
MianChannu
Haroonabad
Gugrat
Sheikhupura
Hasilpur
Mardan
DI Khan
Kharian
Bahawalpur
Okara
Gilgit
Dina
Phalian
Khanewal
Charsada
Chakwal
Jahanian
Chillas
Bhalwal
MingoraSwat
Pir Mahal
Jampur
Haripur
Depal Pur
Layyah
Dinga
Narowal
Muzzafarabad
Jahurabad
Lora Lai
Nowshehra
Mandi F'bad
Bhakkar
Qaboola
Mianwali
Kamoke
Saidan Shah
Behra
Chinnot
Abbotabad
Tala Gang
Daska
Jhang
Pakpattan
Hafizabad
DG Khan
Muzaffargarh
Burewala
Skardu
Khanpur
Kohat
Turbat
Chichawatni
Sadiqabad
Battagram
Arifwala
MandiB'uddin
Chistian
Chenabnagar
Pishin
Shakargarh
Haveliah
Swabi
Wazirabad
Dharki
Murree
RenalaKhurd
TobaTekSingh
Lala Musa
Sibi
Kotle AJK
Ahmed Pur
Waisa
Yazman
Rawat
Islamic Branches:
City
Branch(es)
City
Branch(es)
City
Branch(es)
Karachi
18
Gugrat
Kot Addu
Lahore
19
Dhudial
Shah Kot
Islamabad
Pindi Ghaip
Sukkar
Rawalpindi
Kamalia
Faisalabad
Mailsee
Sargodha
Mumtazabad
HasanAbdal
Bewal
JalalPurJatta
Gugranwala
Khushab
Vehari
Multan
Sangla Hill
Bahawalpur
Peshawar
SarariAlamgir
Kabirwala
Sialkot
Quetta
Abbotabad
RY Khan
Hyderabad
DI Khan
Description
Permanent
Number of Employees
6,876
695
7,571
Outsourced
2,438
TOTAL
10,009
Now some important data from Bank Alfalah Audited Report of Dec 31st 2010 is
presented as under:
Description
411,483,839
389,178,295
968,452
Description
45,958,506
12,496,250
4,022,704
Sukuk Bonds
20,539,488
395,673
845,772
1.476,653
Un-Listed Companies
129,821
Preference Shares-Unlisted
242,744
Listed TFCs
1,308,932
Unlisted TFCs
19,349,400
Sukuk Bonds
2,349,036
Overseas Bonds
190,512
856,367
4,366,796
417,474
68,990
100,000
353,196
250,000
130,493
76,000
v The initial deposit for account opening is of Rs. 1,000 with no minimum balance
requirement.
v It is a non interest bearing checking account.
v Maximum 2 deposits & 2 withdrawals through cheques are allowed.
v Debit card can be used to withdraw cash and make purchases at thousands of
outlets across Pakistan which provides access to funds 24 hours a day.
v There is no restriction on ATM withdrawal.
(v) - Alfalah Kifayat Account
v Any Pakistani resident can open this account. This account is for individual/joint
customers only. Other customers like companies, corporate etc are not eligible for
opening of this account.
v Cheque books, VISA, Debit Cards are issued to the customers.
v There is no restriction on deposits or withdrawals.
v Minimum account opening balance of Rs. 10,000 only is required.
v Online banking facility is also available.
(vi) - Alfalah Mahana Amdan Account
v This account is signed with a contract of 3 years with the bank.
v Minimum placement limit is Rs. 100,000/- and maximum placement
is Rs.15,000,000/-.
limit
v This account is strategically divided into three tiers which are Silver, Gold and
Platinum. The unique tier based structure ensures that the customers can avail smooth
& cost efficient facilities based on their current level of deposits i.e. Higher the
deposit, higher the number of free services. Some of the services are
Duration
Sr #
From (Dates)
To (Dates)
22/11/2011
28/11/2011
Clearing Department
29/11/2011
5/12/2011
Remittances Department
6/12/2011
12/12/2011
Trade Department
13/12/2011
19/12/2011
Credits Department
20/12/2011
26/12/2012
Accounts Department
27/12/2011
3/1/2012
HRD
4/1/2012
9/1/2012
Training Program
The features of all of these different accounts are listed under the Product Line of
Bank Alfalah of this report. Now the basic requirements for opening an account are as
follow.
The basic requirements for opening an individual account are:
1-CNIC
2-Source of Income
3-National Tax Number (optional)
4-Letter from person's employer
2-Article of Association
3-Memorandum of Association
4-National Tax Number Certificate (optional)
5-Company's Letterhead
This department is responsible for generating the Bank Statements which reveal the
account activity of any account. In order to obtain the bank statement the account
holder has to come and fill a form. Some people call the bank and inquire their
account balances. Normally such queries are not entertained over the phone unless the
bank's representative knows the person calling is the account holder and not some one
else. Such information is not disclosed to any one else except for the account holder.
The bank officer may ask questions like the person's date of birth, his contact
numbers, current residential address and the address mentioned in the account
information to make sure that the person calling is genuine and not some one else
trying to gain the financial information.
If an account holder wants the payments on the cheque he has issued to be stopped
then he has to contact this particular department of the bank. The person can inform
the bank about a particular cheque number on which he desires to stop the payment.
In such way no payment is done against the cheque as soon as the department is
informed. Additionally suppose a person has lost his cheque book then he can inform
the bank to stop the payments on all the cheque numbers from the cheque book that
was issued to him. This also stops the payments on those cheques as soon as the
department is informed.
The next was the clearing department. I was informed about the clearing process of
cheques which the bank receives on daily basis. Important to note is that the process
of clearing takes place through the clearing house of the State Bank Pakistan. National
Institute of Facilitator Technologies (NIFT) is used for the process of clearing by the
State Bank. The inward clearing takes place when Bank Alfalah's account holder
draws a cheque in favour of a non Alfalah customer. The cheque is sent to the cheque
issuer's branch for clearing.
In case of outward clearing the cheques presented are from other banks (other than
Alfalah) that are in favour of Bank Alfalah customer. The events in the outward
clearing are:
1-
2-
3-
The cheque is stamped and sent to the issuer's bank through NIFT.
In case of the online clearing the cheque is collected by the bank. The cheque is drawn
in favour of a bank Alfalah customer. The cheque is then sent through NIFT for
outward clearing. When the cheque gets cleared then the money is transferred via the
online system of computers.
In the remittances department I was introduced to the various instruments that were
being used to transfer funds from the branch to other banks. Pay order is an
instrument which is used to transfer money with in the same city. The customer has to
fill a form giving all the necessary information about the place where the money has
to be transferred, his name, contact details etc. The payment for the pay order can be
done both through cash or by cheque. Demand Draft is an instrument through which
money can be sent outside the city. Outward DD is used to transfer money outside of
the city where as inward DD are presented by customers to collect money from a
branch. Now when the money is sent from outside the country it comes under the
foreign exchange department of remittances. This department of remittances is not
operational at the Shadbagh branch of Alfalah. However the services of sending
money outside the country through money gram are available. Call deposit receipts
(CDR's) are used by people to submit money in favour of a beneficiary when they are
bidding for tenders. If the tenders are approved in the favour of a person then the
money is used by the beneficiary otherwise the CDR's are returned to the issuer who
later deposits them in the bank to get their money. The rupee travellers cheques (RTC)
is another form to carry money safely. Rather than carrying cash people can carry
these RTC which are issued in the form of certificates by Bank Alfalah. These
certificates are accepted at major stores, hotels, travel agents all across Pakistan.
The trade finance department acts as a bridge between the importer and the exporter
in a practical world. The type of financial instrument it issues is helpful in settling the
payment between the two parties. The main activities which this department handles
are the imports and exports. The letter of credit (issued by this department) facilitates
the payment between the importer & exporter and the bank charges its fee on it. Bank
Alfalah has added more than 81 banks around its network since 2001 and thats the
reason the LC issued by Alfalah is acceptable to approximately 100 countries around
the world. The records of all the transactions taking place through the letter of credit
are kept at the State Bank of Pakistan.
The credit department of Bank Alfalah deals with the small and medium scale
businesses. I was informed that the bank has adopted a very aggressive strategy in this
department. They are working closely with the business men that own either small or
medium scale companies. It is discussed in the Introduction of Departments section of
this report about the types of credit facilities Bank Alfalah is providing to its
customer. In the funded credit facility the money is physically given to the borrower
with him signing a contract with the bank according to which he will repay the money
to the bank. Malkiat Fiance & Karobar Fiance come under this category.
1-
AMF is a unique long term financing facility offered to SMEs to purchase, renovate
or expand their business premises. It is being offered keeping in mind requirements of
the small business owner who needs to take his/her business to the next level. The
mandatory requirement is that your business must be 3 years old. The amount of loan
obtained ranges from 0.5 Million to 3.5 Million Pakistani rupees. Money obtained up
to 3 Million can be repaid from 2-15 years but money obtained beyond 3 million must
be repaid between 2-4 years.
2-
AFK is a financing facility between Rs 0.50M to Rs 20.0M. The purpose of the AKF
is financing procurement of raw material, finished goods and receivables of SME
businesses.
Now there are other two types of financing facilities available but that are not for
SME. These two facilities are:
1-
It is a personal loan against National Saving Certificates, Prize Bonds, Alfalah GHP
Principal Protected Fund & PKR/FCY deposit for meeting personal, family and
household needs. It is one year revolving limit with quarterly mark-up payments. The
amount of financing under AQF ranges from Rs. 50,000 to 2.5 Crore.
Critical Analysis
demanded further strengthening of the Bank's internal risk and management controls
through a renewed focus on special asset and portfolio management. In order to be in
a better position to respond to all the challenges faced by the bank and to effectively
monitor and control the resulting shocks the Risk Management Framework was
revitalized through integrated risk management approach for managing credit risk,
market risk, liquidity risk and operational risk. A dedicated Risk Management
Division (RMD) is in place with the General Manager of RMD department reporting
directly to the Chief Executive Officer. Risk Management Division has been
structured to address credit, market, IT and operational risk. This division consists of
highly capable people. Additionally the Board of Directors through its sub-committee
called "Board Risk Management Committee (BRMC)" oversees the overall risks
faced by the bank.
points for metal detections. In addition to that the security guards also check the
people coming in the bank with their metal detector scanners. No parking of vehicle is
allowed in front of the bank for security purpose. The cash department is given special
importance as they have liquidity at all times. The cash department is always behind a
glass wall which protects the staff and the liquidity. Generally a master alarm is also
installed in the bank which is connected to the local law enforcement agencies and it
can be used in case of emergency. Phoenix also provides the services of an armored
car to all the branches of the bank. This vehicle is used to transport cash to the head
offices in an area. The ATM Machines are specially installed in a room which is well
protected. The customers only have access to the user interface of the machines.
Breaking into the ATM machine required breaking the wall which is not possible at
any time since every ATM machine is assigned a security person who guards the
machine at all times. All the branches are well guarded by the security personal at
nights as well.
Employees Integrity
If the employees in the bank are not working according to the code of conduct
specified by the management then the organization will fail to achieve its goals. The
management of bank Alfalah understands this important concept. The competition and
the competitors are tough so it is extremely important that the bank employees adhere
to good moral and ethical principles and perform their roles with honesty. Bank
Alfalah promotes and practices transparent and honest work behaviour for all its
employees. The sense of responsibility inculcated in every member of the
organization demands impeccable and intact work ethic system.
Systematic Risk
As stated earlier that management of Bank Alfalah has made its risk control
framework even stronger because of the financial conditions in Pakistan during the
year 2011. It is true that the systematic risk is often beyond the control due to the
macroeconomic factors such as inflation, interest rates, tax changes etc which change
for the entire market. However at Bank Alfalah now there is a Risk Management
Division (RMD) in place with the General Manager of RMD department reporting
directly to the CEO. Additionally the Board of Directors through its sub-committee
called "Board Risk Management Committee (BRMC)" oversees the overall risks
faced by the bank. As this risk is largely beyond control so the management has to
adopt the reactive approach in order to deal with the situation when the changes will
occur. The conditions will change for every one in the banking business so the
appropriate department after analyzing the situation will make necessary changes in
the bank polices and practices.
Un-systematic Risk
During my internship program and my experience of talking to the employees I was
not able to spot any risks that were unique to that particular branch of the bank or to
the whole organization. The employees looked satisfied and happy with the working
environment and all the facilities which the bank had provided them. So there is no
such risk of a strike or any thing similar. The bank's management makes rules that suit
their employees. Keeping them happy is one way of boosting their productivity and
thus the organization as a whole will prosper.
Conclusion
I would like to conclude by doing the SWOT analysis of Bank Alfalah. During my
internship program at the branch and doing some observations I found the following
strengths of Bank Alfalah.
Strengths:
Bank Alfalah provides its customers with conventional baking facilities and the
Islamic banking option. Products like the Hilal VISA card, loans according to Islamic
laws are gaining popularity among the people. Hence bank is gaining more of the
market share.
Since it is a new bank thus the work force is quite young & energetic. The bank has
placed its branches at strategic locations. That has helped the bank attract more
customers. The branches in Pakistan are located very close to the areas where the
financial activity takes place.
The HR Department is very active & I was told that it provides excellent training
programs for its newly inducted employees. In addition to that refresher courses are
also conducted for the employees.
Weakness:
As the work force is young so there is less banking experience among the employees.
But the major weakness of Bank Alfalah in my opinion is that the employees
complain about their salary salaries. Bank Alfalah sits on number 6 in terms of most
assets according to the report of State bank for the year 2010. But its profits are very
low. The reason is not that Alfalah failed to make any profits in 2010, it certainly
made lots of profit. But most of the money from the profits was used by the
management to cover the losses incurred but the sister companies of Bank Alfalah. So
the benefits were not given to Alfalah employees.
Opportunities:
Seeing the current trend Bank Alfalah can rely on its Islamic Banking system to
increase its market share. The management has realized this and so they have plans to
open new Islamic branches in the year 2012. Bank's management has always used an
aggressive marketing strategy to market its products, with its young work force it can
really excel in the market if all the resources are used effectively and efficiently. The
competition is tough thus the top management has to make sure that they make the
right decisions at the right time in the best interest of the bank.
Threats:
Political situation in Pakistan is not good. Investors and businessmen are shifting their
assets outside Pakistan. Most important of all is that the policies of Pakistani
Government are not consistent. Bank's work force is relatively inexperienced. As
stated earlier in order to avoid any undesired circumstances the bank's management
has to make the right decisions.
bankalfalah.com
Bank Alfalah Annual Audited Report 2010
Bank Alfalah Un-audited Quarterly Report 2011
Annexes
NOTE: My annexes section was NOT according to the way as told by VU. However I
was declared pass in the report with a little note from the instructor that this section
(annexes) is not properly illustrated. My report is concise and to the point thats why
it got the approval from the instructor, my final presentation slides were entirely
based on the points taken from this report (I passed the presentation and viva section
too).
Believe in Allah & yourself. Good luck every one. Warm Regards!
VU Alumni { MBA (Banking)}