Feb 16, 2010

Internship Report on Bank Alfalah

Executive Summary
Following privatization. Bank Alfalah emerged as new identity of Habib Credit & Exchange Bank with a revived purpose and commitment. Charged with the strength of Abu Dhabi consortium and under the leadership of His Highness Sheikh Nahayan Mabrak AI-Nahayan, the bank has already made significant contributions in building and strengthening both corporate and retail banking sector in Pakistan. Designing the product portfolio of bonk in response to tin' customers' preferences, the products like Royal Profit, Royal Patriot and royal Custodial are prime examples of quality and innovation providing timely banking opportunities to the customers of bank. Assessment of the needs and wants' of the customers, is an ongoing process at Bank Alfalah, which helps to continually develop new products and services. To continuously offer courteous,! professional and advanced banking Solutions, the team of bank has recently been rejuvenated by going through training programs with a focus on information technology. To' make banking solutions become accessible to more and more people, bank has embarked upon a rapid expansion program, aiming to provide a networking that makes the services available to any of our customers in all the major urban centers of Pakistan with a view ; to go international in the near future.

Banking Sector In Pakistan

What Is Bank?
In simple words we can say that bank is a pipeline Through vvhich money moves into and out of circulation. Bank accepts deposits and repays cash to its customers on demand. The bank borrows money at a lesser rate of interest and lends it to the borrower at a higher rate.

Banking In Pakistan
Pakistan has indeed unique banking history commencing as were from a scratch at the time of Pakistan of this subcontinent. However it soon comes over its extra ordinary banking problems and by the grace of Allah we have a stable banking sector.

Structure Of Banking History

GTE present structure of banking industry to a great extent Is the reflection of an on going financial sector reforms it is due to the de nationalization and privatization of the industry. Number of Pakistani and foreign banks has increased significantly this Competition and has significant impact on banking industry the view is under, 1- The Pakistani commercial banks now emphasize on universal type of banking by adding more and more functions of merchants as well as (easing while foreign banks were engaged in foreign banking and are now concentrating on retail business

Introduction Of Bank Alfalah

Bank of Credit and Commerce International (BCCI) was a Pakistan based bank, which had its branches in 74 different countries of the world, It had its 3 branches in Pakistan. En 1991, the BCC! was banned. Then 3 branches were taken over by the Government, which were named as Habib Credit & Exchange Bank (HCEB) and these were working as subsidiary to Habib Bank.

Following the privatization In July 1997, Habib Credit and Exchange Bank assumed the new identity of Bank Alfalah February 25, 1998. It is now Abu Dhabi based bank as 70% of shares were bought by Abu Dhabi Government and 30% by Habib Bank on behalf of Pakistani Government. It has its 13 branches in 8 cities of Pakistan. The Multan branch recently been opened in May '1999. lit is not listed on any stock e exchange of Pakistan. Charged with the strength of Abu Dhabi consortium, and under the leadership of His Highness Sheikh Nahayan Mabarak ai-Nahayan, Minister of Higher Education and Scientific Research, Government of Abu Dhabi, and a prominent member of Royal j Family, the bank is energized with the vision, envisaging the development of various sectors In Pakistan.

Mission Statement
Overall Vision
We strive to be a world class multi purpose financial institution providing range of services, our endeavor for excellence continues.

Our Values
The legacy of leadership stands as our guiding light. The strength of chain relies on the strength of each link. Reflecting high standards of integrity, prosperity, good will and team work is our conduct
within the family in the market place.

Maintaining a high reputation for prudence in the financial community. Time is our most valuable asset. Performance is nothing without the ability to measure it. Achievement is nothing without target. Every drop counts

Branch Network
Bank Alfalah has its 21 branches in 11 cities. Detailed is as following.

Karachi
Main branch, B.A. Building 1.1 chundrigar road. Cloth market branch Clifton branh. Shahr-e-faisal Branch Jodia bazar Branch .

 Korangi Industrial area Branch M. A. Jinnah Road Branch Site Branch

Lahore
LDA plaza branch Gulberg branch Defence branch Circular road branch

Other Branches
Multan branch 62-A, abdali road. Hyderaabad branch. Rahim yar khan branch. Sialkot branch Rawalpindi branch Peshawar branch. Faisalabad branch. Gujranwala branch. Dera ghazi khan branch

The Board
List of board of directors of Bank of Alfalah limited is as under.

H. H. Sheikh Nahayan Mabarak Al-Nahayan. Mr. Abdulla Khalil Al Mutawa Mr. Abdulla Naseer Hawalled Al-Mansoori Mr. Omar Z. Al- Askari.

 Mr. Naeem Iqbal Shikh Mr. Ikram ul-Majeed Sehgal. Mr. Muhammad Saleem Akhtar.

The Core Group

In core group, there are 2 committees, i.e.

Board advisory committee. Executive committee.

Board Advisory Committee

Mr. Omar Z. Al- Askari Mr. Abdulla K. Al Mutawa. Mr. Ganpat Singhari Mr. Bashir A. Tahir.

Executive Committee
Mr. Mohammad Saleem Akhtar Mr. Ibraham ul majeed Sehgal Mr. tanveer A. Khan. Mr. Muhammad Yousaf. Mr. M. Waqas Mohsin.

Auditors
A. F. Ferguson & Co. chartered accountants.

Special Features
Bank Alfalah Limited is an established bank. !t has some special features with the help of those it is growing rapidly.

Good Work Environment

As the work environment plays a great role in this competition age, so the bank has good work environment. All the people work with cooperation managers are so kind that each problem can discussed with them.

Efficiency
Employees at Bank Alfalah are quite efficient. As Multan branch is new one. Its employees have to bring their bunk among the list of good banks. Therefore, they work more than their working hours and it is all according to their will. It also shows their loyalty to organization.

Customer Service
All the customers are entertained individually. Same kind of behavior and attention is given to all the customers.

Products
Prioritizing its product! portfolio in the line with its cooperate and consumer needs and wants, the bank is committed to develop products that give more value to its customers in both the sectors be It a ample bank account or complex financing of a major project.

Suggestion Asked From The Customers

Getting ideas of improvement from customer side is anew idea and that is working very well in Bank Alfalah Ltd. all the customers are asked to fill a suggestion form and the standards of the bank are improved through them.

Employee Benefits
Employees are given the benefits like bonus, gratuity, funds, loans, increments, house rent, medical and conveyance.

Computerized Working Environment

In bank, all the work is done an computers. All the entries are made in computer. Balances are fed into the computer. this increases efficiency of the bank.

Functioning Of The Bank Alfalah

Functioning of the bank Alfalah is divided into following departments.

Operations Departments 1. Cash 2. Clearing 3. Remittances 4. Account opening Foreign exchange department Credit and advances department Accounts department. Car financing
At this branch is newly started but in a very shorter period of time it has marked its name and extended its services. Inshallah new branch with more staff & departments will open at the end of 2001.

Operations Departments
Operations department of the Bank Alfalah limited is responsible for the overall operations of the bank. Mr. Anwar Yousaf Bukhari is the incharge of this department. He looks after the overall to the higher authority about all its departments. The detail of those departments which are controlled under this department is as under. a) b) c) Account opening Cash department Clearing

d)

Remittances

Account Opening
It is most important department of bank and its major source of income for bank. Mr. Moeen deals in this department. Following procedure is adopted for this purpose.

Procedure of account opening

It is very simple and quick procedure. A person who wants to open an account must has the introduction of banks staff or any already existing account holder of bank. The customer is required to fill an account opening form. Then signatures of the introducee are verified from S.S. card before opening account. AOF is very standard and up to the mark which contains almost whole information about customers. Customer is guide to fill all columns of AOF. All formalities and requirements are completed and verified, and all supportive documents are taken and checked according to the nature of account. If any formality is incomplete, cheque book is not issued until it is fulfilled. If a person can not sign write his / her right hand thumb impression is affixed marked, which is attested by one male or two female witnesses. Account number is allotted to the customer and all particular such as nature of account, opening date, initial deposit, title of accounts are written is register. Account is opened in the system ( Bank Excel) by putting all the particulars of the customers in the system. S.S. cards are handed over to incharge of operations department for record and verification. The letter of thanks is sent to customer for confirmation of address and genuiness of customer and one copy is attached to AOF. After complete procedures finally the manager of bank signs the AOF and these forms are filed in a proper sequence.

The bank does not make payment of a cheque bearing a six-months or older date. If an account is not operated in six months, it is called dormant account.

Types of accounts
In bank different types of accounts are existing.

1) Individual account
Any individual or proprietor of a business can open an individual account at BAF. PLS (profit and loss sharing) saving accounts can be opened with the minimum balance Rs. 1000/- with expected profit rate is 9%. Following requirements has to be fulfilled for this account. Signature of customer on back of AOF. Mention next of kin (nominee) Name and A/C # of introducer. Verified sign of introducer. Customer signature admitted by officer. N.I.C. photocopy attached. Letter of thanks.

2) Joint Account
When more than one person open a single account it is called joint account. The names of persons are written on the title of A/C and on S.S. card. Joint A/C cannot be opened by single person. Both persons have to sign on cheques.

Requirements
Sign of both customers on back of AOF Sign on joint A/C mandate.

 Name and A/C# of introducer NIC copies of both members. Mode of operation.

Sole Proprietor Account

This account is for those person who has his own business and he must be the solely owner of the business.

Requirements.
Sing on AOF. NIC copy. Verified signature of introducer NIC copy. Sole proprietorship declaration.

Partnership Account
Account title will be the name of the partnership firm.

Requirements.
Sign of customers on back of AOF. NIC copies of partners. Partnership deed (certified copy). Partnership mandate (prescribed format)

Limited Company

Requirements:
Sing of all directors on back of AOF. NIC copies of all directors. List of directors. Memorandum & article of association. Copy of board resolution. Latest form 29 (if director is to be changed or in case of his death, this kind of form is filled, it includes information that a new director has how much number of shares with him).

Closing of account.
When a customer wants to close our account he has to given a hand written application to the head of the operations department to close his account plus remaining leaves of cheque book. The manager first verifies the sign of A/C holder, then closing in done from the registers on the computer where the account was opened. In the file of the A/C holder his account opening form is crossed. For this closing a fee of Rs. 150/- is charge in BAF.

Cheque Book Issuance

When the account is opened, then the customer is given a cheque book to sign upon and encash money. It proceeded as under.

Procedure
All the account opening formalities must be completed before issuance of cheque book. Particulars of the cheque book requisition should be completed containing title of account, account number, type of currency, number of leaves and signature to the customer. Signature of the customer are verified on the requisition.!

If customer is unable to collect his cheque hook, thon ho can give: authority to the third person to collect his cheque book on his behalf f by signing on the back of the

requisition, in such case, the particulars of the third person are required like name of the person NSC number and signature of that person on requisition and cheque book issuance register. Cheque book is taken out from the safe/locker. It is assured that
1

series of the cheque

book . Particulars are entered in the cheque book Issuance register. Account number is stamped on overy loaf of the cheque book and those leaves are counted. Name ut it 10 account holder is written on the cover of the cheque book. And requisition on the cheque book for further issuance is properly filled, stamped and signed by officer of the bank. Cheque book is delivered to the customer and his signature on the cheque book issuance register. Cheque book serial number entered In the system (Bank Excel). Stock of cheque book are balanced at the end of each day and kept under safe custody. Earlier the banks were charging a fee for issuance of cheque book but now whenever a new account is opened, the account holder Issued a cheque book free of charge. Bank Alfalah issues the following cheque books. Saving account - 25 (eaves Current account- 50 leaves Current account - 25 leaves Foreign currency $ 10 leaves Foreign currency 10 leaves Loose cheques are also issued in some cases.

CASH department
Cash department of Bank Alfalah works under the operation department. This department is given the complete responsibility of cash, as result of transaction in touch local and foreign currencies. It is also responsible for book keeping of these transactions and the safe custody of cash.

This department perform the main function receipts. a) b) Cash Receipts Cash payments

Cash receipts
Mr. Aqeel deals cash receipts in this department. The depositors uses deposit slip for depositing the amount into their accounts. The officer checks if the deposit slip is properly filledup containing title of account, A/C number date and amount in words and figures. Detail on both counter files and cash receipt voucher should be the same. Cash is received by cash receiving officer, twice counted and matched with the deposit slip. The cash details are written on the back of the deposit slip and are also entered in cash receiving register. Cash received stamp is affixed on the face of the deposit slip along with the signature of the cash receiving officer. Deposit slip and cash receiving register is given to the officer in the cash department. Again proper scrutiny is made by the officer cash department both on cash receipt and cash receiving register. Officer cash department signs both the deposit slip and register. Deposit slip is credited and posted in the concerned accounted in the system. Counter folio is given the deposition as receipt. One consolidated cash debit voucher is posted in the system to balance the cash.

Cash payments
Mr. Jawad deals with cash payments the process for payment of cheques for local and foreign currency is same. First the cheque is presented by the customer or holder to i cash payment officer. He confirms' that it is drawn on the same branch and the particulars of chque are properly filled in. One signature of the holder is taken on the back of the cheque. Cheque is handed over to the officer cash department for scrutiny where officer checks the date, amount in words and amount in figures, payee's name, crossing if any,

account number, cheque serial number, any material alterations/endorsements and signature of the customer. Account is debited and then cheque is cancelled by the officer. It is posted in the system and posting stomp and number is affixed on it. Cheque is handed over to the cash payment officer for payment. One more signature on that back of the cheque is taken from the holder to match with the first one, and then cash is paid to the payee. Cash detail is written on the back of the cheque. Cash paid Stamp is affixed on the face of the cheque. Entry is passed in the cash payment register. |

Clearing Department
Mr. Anees deals this department. Before discussing it is necessary to know what is clearing. the process by which cheques exchanged between the collecting and paying bank and the ensuing financial settlement is called clearing. This facility is provided by the state bank of Pakistan for offsetting of cross obligations between the different banks. Clearing is of two types.

a) inward clearing.
When cheques drafts, etc, of our branch presented to us for clearing by the SBP. Cheques to be honored by bank.

b) outward clearing.
The cheques of other banks which the account holder deposit in their accounts are send for collection.

Clearing process (inward/outward).

Here the local cheques are received that are drawn on BAF. All the cheques are received on one counter along with the paying slips duly filled in properly containing particulars of cheques and account holder. Counter folio of paying slip is handed over to the customer by putting stamp for cheque received for collection for Bank Alfalah on it duly signed by officer. These cheques are scrutinized and cheques for local clearing are separated from OBCs. These are then entered in clearing register and cheques for collecting are entered in OBC register and handed over the Bills Department of

collection. Clearing officer checks and verifies title of all the cheques deposited by the customer to confirm the good title of the cheques. Cheques are scrutinized properly and paying slips are separated from cheques. Special crossing, endorsement and clearing stamps are affixed on the cheques. Cheques of each bank are sorted and arranged branch wise. All the cheques are then entered into the clearing system of bank. Print out of the clearing is taken and details are attached. With the cheques of each bank. Details of these banks are then entered into the clearing schedule containing number of cheques presented and their total amount against the name of each bank. Then total number of cheques presented to ail banks and their total amount is written on the foot of that schedule, which is tallied with the clearing register. Next morning, these cheques are delivered to the respective banks in clearing house of SBP between 9:00 to 9:30 AM. In the same manner, other banks present their clearing drawn oh Bank Alfalah. Total number of cheques and their amount delivered to other banks are received from them are written on the Clearing House schedule and handed over to the Officer Clearing House SBP. Cheques/DD received in clearing are given tothe Officer Cash Department of the branch for their payment. After I proper scrutiny of cheques, verification of signatures and confirmation of balance in the account, Officer Cash Department pays these cheque by canceling and posting them in the system. If any cheque is not passed due to insufficient balance or any other reason, Officer Cash department returns the same cheque by attaching a cheque return memo containing reason for return. This cheque is entered into the cheque returned register and bank charges are deducted according to the schedule of charges.

Second clearing is called at 2:30 PM to check the fate of the cheques presented to other banks in the morning. If any cheque is to return, that is delivered to the same bank in second clearing. In the same manner, if any cheque presented by Bank Alfalah in first clearing is returned, they receive it and once again give schedule of clearing figure to the officer clearing House SBP containing number of cheques and their amount delivered and received unpaid.

Remittance Department
A major function of any bank is to transfer of funds form one place to another. Mr. Hassan is incharge of this department. Bank Alfalah uses the following modes of transfer of funds. a. Demand draft (DD) b. Telegraphic. Transfer c. Pay order d. Call deposit e. Pay slip

Demand Draft
It is an instrument, which is sued to transfer amount from one city to another city. It can be made on cash as well as on cheque. If it is made through cheque that it is necessary that person must be A/c account holder while in case of cash any person can made. It consists of three copies. 1. 2. 3. Original copy which is given to A/C holder. DD advices is sent to the central branch. Third copy is for reconciliation. Its photocopy is kept with us (bank) while original is sent to head office for reconciliation.

Procedure

The client who wants to transfer his funds form one city to another fills a form requesting the bank ot prepare a DD. DD application form contains columns requiring information for the preparations of DD eg. Beneficiary name Applicants name Address Amount to be sent etc. Bank deduct some charges against DD. These charges include commission, tax, provincial tax etc. Tax is deducted 0.3% while PT charges are 0.50 paisas. If customer is tax payer than advance tax is exempt provided that he submit the tax exemption certificate.

Telegraphic Transfer (TT)

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

Procedure For Telegraphic Transfer Issuance

Application form is given to the customer to fill. Two signatures are taken on the form one for request and other for receiving the instrument. All the particulars of application form are checked and bank commission charges and with holding tax is written on the top of the applicant form. If the customer is maintaining his account with the branch he can give cheque for total amount of instrument plus bank charges. Cheque and application form is then given to the officer cash department for the payment of the cheque. After proper scrutiny, officer cash department posts who cheque and signs the application form to assure that payment is received. If the customer wants to pay cash, it is deposited by the customer on cash counter. Cash receiving officer receives cash on the application form along with the bank charges and withholding tax,

application form is then given to the remittances incharge for issuance of the instrument. He enters all the particulars of the application form in the system (BPG) and computer gives an Auto Control Number to the T.T message of receiving branch. This message is then sent through telex to the receiving branch followed by a T.T. advice. The customer is confirmed that T.T. has been sent.

Procedure for T.T. payable

When TT message is received, tested number on the TT is checked and verified. Tested number is then written in the register and signed by the holder of test keys for office record. All the particulars of the TT payable are entered in the system. Payment instructions on the TT message are followed it if is pay and advice it will be paid through TTR on the cash counter or through clearing and if it is credit and advice, it will be transferred in the account mentioned in the TT message. Printouts of vouchers (TT payable are taken. If TTR is presented for payment, signature of the authorized officers are verified on TTR and after proper scrutiny, it is posted in the BPG and canceled by the remittances incharge.

Procedure For Foreign Demand Draft Issuance

Application form is given to the customer to fill the same. Two signatures are taken on the form, one for request and other for receiving the instrument. All the particulars of application form are checked and bank commission is charged, which is US$ 5/- for each amount of FDD. Cheque is received from the customer for total amount of FDD plus bank commission. Cheque and application form is then given to the officer cash department for the payment cheque.

After proper scrutiny, officer cash department posts the cheuqe and signs the application form, to assure that payment is received. Then chque and application form is given to the incharge. Remittances, who will enter all the particulars of the application in the FOD issuance register. If the customer wants to pay cash, it is deposited by the customer on cash counter. Cash receiving officer receives cash on the application form along with the bank charges. Application form is then given to the remittances incharge for the issuance of the instrument. A control number is allotted to the instrument from FDD register. Instrument is complete by putting all the particulars

in it and signed by two attorney holders. Instruments is then handed over to the customers. FDD advice is sent to the responding foreign bank / paying bank where they are maintaining dollar account through registered mail. Exchange transaction credit advice (ETCA) is sent to eh Head office fore the reimbursement. Copies of the FDD and ETCA are kept in the record of the bank.

Procedure For Foreign Telegraphic Transfer Issuance

Application form is given to the customer to fill the same. Two signatures are taken on the form one for request and other for signatures are taken on the form one for request and other for receiving the instrument. All the particulars of application form are checked and bank commission is charged, which is US $ 15/ that rate for each amount of each FTT.

If the cheque is received from the customer, it is taken for total amount of FTP plus bank commission. Cheque and application form is then given to the officer cash department for the payment of cheque. After proper scrutiny, officer cash department posts the cheque and signs the application form to assure that payment is received.

If the customer wants to pay cash, it is deposited by the customer on cash counter; cash receiving officer receives cash on the application form along with the bank charges. Application form is then given to the remittances incharge for the issuance of instrument. He enters all the particulars fo the application form in the FTT register and a control number is allotted to the FTP. TT message is written in the telex containing name of transferring branch, name of receiving branch, date amount , currency, payees name and account number or identification if any, payer name and payment instructions. A test number is given to the FTT message for receiving branch. This message is then sent through telex to the receiving branch. Customer is confirmed that FTT has been made. Exchange transaction credit advice (ETCA) is sent to the Head Office for the reimbursement. Copies of advice (ETCA) and FT are kept in the record for the bank.

Pay Order
Application form is given to the customer to fill. Two signatures are taken on the form one for request and other for receiving the instrument. All the particulars of application form are

checked and bank commission charges and with holding tax is written on the top of the applicant form. If the customer is maintaining his account with the branch he can give cheque for total amount of instrument plus bank charges. Cheque and application form is then given to the officer cash department for the payment post the cheque and signs the application form in token of payment received. If the customer wants to pay cash, cash is deposited by the customer on cash counter cash receiving officer receives cash on the application form along with the bank charges and withholding tax. Application form is given to the remittances incharge for issuance of instrument. He enters all the particulars of the application form in the system (BPG) and computer gives an auto control number to the instrument. Print out a take on the block payment order. It is then signed by two authorized officers of the branch. Instrument is the protectgraphed and given to the customers. When the instrument is presented for payment, it is posted in the BPG and canceled by the remittances incharge after proper scrutiny.

Call Deposit
When the party wants to give payment from itself to another party then it makes call deposit. The bank keep it with itself unless it does not receive instructions from other bank. Normally it is made on cash and goes in party account.

Pay slip
It is used when bank itself pay for any type of transaction e.g. purchased of stationary.

Collection
All the cheques under collection are called cheques under collection in Bank Alfalah limited. There are two types of bills for collection:

Outward Bills for collection Inward Bills for collection

Outwards Bills For collection

All the cheques are received on one counter along with paying slips duly filled in properly containing particulars of cheques and account holder. Counter folio of paying slip is handed over to ht customer by putting stamp for cheque received for collection for Bank Alfalah on it duly signed by officer. These cheques are scrutinized and cheques for local clearing are separated from OBCs. Cheques for local clearing are entered in clearing register, whereas cheques for collection are entered in OBC register and handed over to the bills department for collection. OBC number is

allotted to eh cheque from OBC register. Special crossing and bank endorsement stamps are affixed on the cheque. OBC schedule is attached with the cheque and dispatched to the main branch of that city for collection. If they do not have any branch in that city, then cheque will be sent to the collecting agent of bank Alfalah for then cheque can be sent directly to the drawing branch, instructions are given on the OBC schedule for the payment of that cheque.

Vouchers are also posted in the system. When OBC is realized collection bank pays the amount through IBCA if it is the same bank or through DD if it is another bank. If DD is

received against OBC, it is presented in the clearing for collection. If IBCA is received the branch for the payment of OBC, certain vouchers are posted in the system.

Inward Bills For Collection

If any other bank sends a cheque of bank Alfalah limited, it is inward bill for recollection. Bank Alfalah remits money after checking the balance of the customer account. The process o collection starts when the cheques of bank Alfalah ltd are received from other banks. Then these cheques are sent to the head office Karachi, which sends the cheques to SBP

for clearing and get the confirmation of cheque and credit advice. Main activity of clearing is performed by head office which contacts other banks through SBP.

Foreign Exchange Department

Foreign exchange department deals within exports and imports. It supervised by Mr. Saleem at BAF. The bank acts as exporter as well as importer bank for different parties who are in the business of export and import.

Export Exporter
When the banks become the exporter bank for a party then the market stability, reputation, financial position of the exporter is first of all checked. Export is done on the two basis.

Collection

Purchase
Documents Are To Be Attached For Exports

Invoice

 Bill of lading Packing list o Total quantity o Net weight / cartoon o Gross weight / cartoon o Total gross weight Bill of exchange (original or draft).
E-form; Initial document on which total export proceeding based. In this form, alt the conditions are given, which are necessary for exports. In this form, all the conditions are given, which are necessary for exports.

Letter of credit
It is written agreement between importer and exporter Beneficiary certificate DHL certificate (TCS certificate) Form 'M' Certificate of Origin (Form-A)

Form -E
Government has provided facility to exporter in taking E-Form from any bank and he can present it to any bank for negotiation,

Export Proceed Realization

Certificate SBP gives rebate to exporter against export after realization, It is I .paid according to commodity wise and bill wise. Claim period; 1 year.

Transport Document (Bill Of Loading Air, Way Bill)

When insurance is done by importer, C&F (cost and freight) usually used. FOB cost (free on hand) CIF (cost insurance and freight) when insurance is done by exporter, CIF is used. Tenor (At sight) immediate payment by importer after receiving product.
Partial shipment: product is sent partially. Transshipment Product is sent via any country.

E-Form certification
When export is done on C&F basis, so bank issues E form certification to exporter and he submits it to the custom office along with E-form certification to certify E-form.

Form of authorized dealer's certificate:

State Bank permits exporter to issue Bill of Lading in the favor of 6-forrn bonk. But if requirement of L/C is to issue Bill of Loading in favor of company thon shipping company issues bill of loading in favor of Exporter Company. Authorized Dealer Certificate is filled for this purpose.

Certificate Of Origin
This certificate shows that goods are from Pakistan.

covering schedule
If in covering schedule, it is given that "please remit proceed to our Karachi Office A/C no. 5740734881 with ABN Amro Bank New 14 .York. USA for onward credit to BAF Multan"

Beneficiary Certificate
If L/C requires some information as proof of anything from exporter then exporter has to present beneficiary certificate for that proof.

E- form
E - form has four copies.

Original Which is given to exporter. Duplicate which the exporter banks keeps itself Triplicate for SBP one copy for customer.
Bank reporting or duplicate and triplicate is done by bank. Product should be cleared by custom officer (date is given on the foot of form).

Payment From Importer Bank

It is the choice of importer to open L/C from any bank and the bank from which L/C is opened can also refer to some other bank for payment. So bill of exchange is sent to referred bank and other documents are sent to L/C opening bank.

Swift
It is a network among all banks. No other institute can get involved in it.

Bill Of Loading
Certificate from shipping company for loading documents. If requirement of L/C is to issue bill of loading in favor of L/C opening bank.

Bank Keep In Record

Covering schedule Invoice Packing list AWB Certificate of origin E form
Normally bank keeps photocopy of all documents in record. Negotiable documents (original documents).

Imports
L/C is opened by the importer. There are tow types of L/C.

Revocable Irrevocable
For imports registration is must. Export promotion bureau acts as registration authority in this regard.

Necessary Requirement
If place of issue and port of loading is different on bill of loading, then along with the stamp of shipment on board, vessel name and shipment is written. 1. 2. Issue date of lading shipment on board. There should not be cutting on bill of lading without authentication.

3.

Bill of lading should show capacity of agent. If bill of lading can be taken by the agent of importer company, then his name should be mentioned on bill of lading.

4. 5.

Original GSP should be presented. if TT reimbursement is not acceptable, it means bill of lading is necessary. When documents are received for exporter, do enter into lodgment register.

Documents for import

Performa invoice signed by importer. Category passbook copy attested by any bank. L/C opening application filled in by the customer. Import registration with export promotion bureau. Annexure Verification of signature by SS card. L/C issued on basis of L/C application form. Insurance if covered by buyer. Insurance cover note. Insurance policy.

Documentary Credit
DCD department Alfalah Bank has his full fledged documentary credit department.

As a credit instrument and as a means of making as a se payment the documentary credit is an essential instrument for conducting world trade today. A documentary credit represents a commitment < bank to pay the seller of goods or services a certain amount

provided present stipulated documents evidencing the shipment of the goods w the prescribed period of time. For the cases of imports! or exports first the parties have to dc upon a sale contract regarding the term and ^condition of sale. One o mode of payment is by LC which is secured and now a days mostly use the business. Letter of credit is under taking by opening bank (Importers bani< the Exporters bank ( Negotiating bank) that it will make payment if documents are as per terms of LC.

For Parties Are Involved In Letter Of Credit

Applicant Beneficiary Issuing bank Advising bank Importer Exporter bank of importer bank of importer

According to impact policy, no import is valid with out import licence which is issued by the chief controller of import and export or we can say export promotion bureau ( EPB). If a person desires to take up import trade must get his name, his firm or his limited company, registered with the EPS. On being granted registration certificate, he will be eligible to import goods according to import policy. There is no special condition of eligibility for registration. The only requirement is that he should be a Pakistani and must be registered with income tax department. '

L/C Opening procedure

When the importer obtained import licence, then the bank will open -letter of credit. A letter of credit is undertaking by LC opening bank to put an agreed sum of money to sellers bank on behalf of the buyer of the goods under clearly defined terms and conditions. Pakistani bank, w open only irrevocable LC. An essential feature of the irrevocable LC.

that it can not be modified, altered, amended, or canceled without the prior consent of all the parties. Party comes to the bank and fills the form which is provided on the payment of Rs 100. This form is filled by the party and is return to the bank, It includes details like

Name of company Address Country of origin Branch name Quantity Insurance company Shipment from Shipment to
One thing should also be submit which is INDENT. If the foreign party has any agent they will issue the indent with following details.

To messers Importers, etc

Documentary required for LC opening

When the bank opens LC, it requires following documents.

Valid import licence. Performa invoice. Importer should be Pakistani Letter of under taking form importer Insurance cover.
An important point which the bank will consider before opening of LC is that sufficient funds be available in the LC openers accounts. At the time of establishing the LC the opening bank generally retains a maximum margin to safe guard its own commitment. The margin may vary from nill to 100% according to the nature of commodities and it also depend upon the party. At the item of establishing the LC opening bank charges

bank commission, postage and other charges from the LC opener account. Another main important point is that value of LC should not increase the value of import licence. After all the documents are being checked and signs are verified by the bank. A sengttion slip is attached with eh form so that the approval can be gained from the manager of the bank. After the approval is made four copies are prepared and the entries are made on the computer and the printout is taken the margin amount is checked from the importer account and if the amount is not found then LC is not opened and the party is informed about the situation. On the deposit of the margin then LC is opened. LC limit if set by the bank are also checked. After the LC is opened following entries are made.

LC Opening register Margin / Liability Account Register.

Payment to seller
The negotiating bank upon receiving the documents from the seller checks the documents according to terms and conditions of credit upon Satisfying it self of this the negotiating bank makes payment to the seller if sight credit. It then forwards the documents to the opening bank and reimburses it self through the opening banks account with itself.

Documents Received By The Opening Bank:Importers bank or opening bank receives the following documents from the exporters bank or negotiating bank.

Bill of exchange Invoices Bill of lading Packing list Certificate of origin

 Insurance

Documentary Collection Or Retirement

After lodgment, the opening bank informs the buyer of the receipt of the documents. The buyer or I porter shall then retire ^the document by making payment for the amount of the invoice value plus the interest which has accumulated since the date of negotiation till the date of retirement, less the margin retained by the opening bank at the time of establishing the credit.

Credit & Advances Department

This department of Alfalah, the loans are advanced by the bank to its customers. At bank Alfalah credit is given on the basis of a policy made by Board of directors and is called credit policy. This policy statement sets out eh underlying principles from which the BOD will determine the commercial credit activity of bank Alfalah ltd. The committee to approve direct and review commercial lending of bank and to ensure that credit policies are adhered to and the credit operation is conducted in an efficient and effective manner. Purpose of this policy is to set out the credit policies for the board, which will be implemented by the credit committee. The policies are described under the following headings.

Credit principle Portfolio limits Approvals Administration Monitoring and review

Credit Principles
It includes principles to be adopted authority, approval monitoring and control on a basis consistent with Bank Alfalah limited.

The international objectives strategies regarding an

and business structure, are also

invoices

performances included.

administration

Credit Portfolio
These are the guidelines set down the credit committee regarding

Total facilities Term facilities

Credit Approval
When the terms and conditions are set and both parties are agreed. The credit committee makes approval for the credit.

Credit Administration
The credit application when handed over to credit administration, then they critically examine securities given by client to bank against credit facilities. Credit administration keeps liaison with layers, surveyors. Valuators and other corporate bodies.

Credit Monitoring

The client can present his own account insurance policy as security for credit, when he presents his own account as security, his account his blocked for the same amount which the bank is granting him. When the facility is adjusted at that time the blocking is released from the account. Clients can also use third party account of getting credit shares can also be kept as security in this case these are verified and duly signed. These are kept separate to avoid theft. The company whose shares are used informed that its shares are used informed that its shares are in eth custody of the bank.

Advances
Bank Alfalah limited, Abdali Road multan, provide the following facilities in advances department.

Funded facilities Non funded facilities

Funded Facilities
These are facilities in which funds like cash fund are included

LPO
Goods purchased on behalf of bank and provided to customers.

Pre shipment
It provides to prepare consignment. Maximum tenor is about 150 days. Profit may be 16% per annum. The repayment is generally from sale proceeds. This is for preparation of consignment.

Post Shipment

During export process, funds are required for preparation of next consignment that is provide by post shipment facility. Maximum tenor is 150 days. Profit rate is about 15% per annum.

Non Funded Facilities

These are on

Letter of credit Letter of gurantee

L/c is two types

Sight L/C for 90 days. Issuance L/C for 120 days.

Accounts Department
All the transactions taking place are recorded daily in the books of accounts and also entered in the computer daily working is arrived at the account department of bank Alfalah limited every next day from the computer room in the form of a general ledger. This department is concerned with

Revenue Expenses Assets Liabilities

These are the pillars of any business; in this department the vouchers that are posted during one day are sent to the accounts department next day. These vouchers are already posted to computer by the concerned department. So a report is also sent by computer to the Accounts department. The accounts people have to tell that all the

vouchers are posted under the right head. Amount, date, stamps signatures, all re the requirements for cheques and vouchers are fully checked. If any kind of renovation or construction or rebuilding is done, all is paid from the accounts department. Like petrol for the car of EVP and VP stationary charges, medical allowances, etc are all paid by this department.

Daily Customer Movement List

All the changes that are made in accounts of customers are shown in the daily customer movement list. By using this list, people of accounts department can give the vouchers. Following activities are performed by accounts departments. Voucher preparation Preparation of daily, weekly, monthly, actual statement.

Budgeting and fixed assets Employers benefit Expenditure approval

Strengths & Weaknesses Of Alfalah Bank

I have found bank Alfalah limited as a very good bank. It is because the bank is well established and its financial statements shown a very strong position of the bank.

My eight weeks internship was very informative for me. I have seen a very god working conditions at the BAF. I want to mention some key features of bank.

Bank has a belief in customer service. Customers give suggestions for the improvement of bank and these suggestions are listed carefully.

Manager and EVP Mr. Asif Sheikh have good coordination with staff members. Environment is friendly. Fully computerized, each department has its won PC.

I have also noticed some deficiencies of the bank.

Bank does not provide the ATM card facility because of newly establishment. Proper on line banking is not adopted. For confirmation purposes they are the facility of fax this processes takes at least 2 hours to complete and customers have to wait for 2 hours in order to get the withdrawal.

Branch premises is shorter.

No credit card is available. Tokens are not issued to customer so the chances of doubling are present.

Recommendation
Finally I am going to give some suggestions to Alfalah limited these suggestions are based on my experience with bank during my internship. This is a routine practice that in order to give personalize services to the customer, bank staff tries to fill al the columns of AOF with their own handwriting, which is wrong. AOF must e filled in by the customers. Bankers should avoid to fill in the AOF because it can create problem if the address, tit le of account or any other information provided by the customer is not written

properly, customer may be affected or he may claim that this information was not provide by him, but If AOF is filled by the customer then banker cannot be held responsible for any incorrect information provided by the customer.

Under no circumstances cheque book should be given to the customer if the account formalities are incomplete.

There are two officers involved in cash deposit processes, which is time consuming. Cashier should be given certain powers to receive cash of US$, DM and to provide prompt services.

Similarly, there are two officers involved in chque payment process, which is time consuming .l cashier should be given certain powers to pay cheques up to Rs. 25,0000/to provide prompt services.

Cheques which are drawn bank Alfalah branch and return unpaid in cleaning are not reflected in statement of account on the customers. These cheques must be reflected in the accounts so that credibility of the customers may be assessed.

Token should be issued to avoid doubling. Lockers, ATM, credit card, traveler cheque all these facilities should be provided to attract more customers.

Audit should be held internally. Rather there should be an Audit department in the branch to make audit on daily basis. This can become so helpful as different banks are having this department of their own.

In his computer age, online banking system is necessary for the survival of bank, so bank should have an online banking system.

Marketing Practice Adopted By The Bank

Nowadays marketing of products is of prime importance for any organization. In his dynamic organization has its own marketing department, which is responsible for creating the demand of its goods and services.

Banks have also their marketing departments, which are responsible for creating demand for their products i.e. their deposit schemes and increasing the deposit of the bank.

Bank Alfalah has its own full marketing department at the head office, Karachi. This department prepares different deposit schemes for its customers time to time in order to increase the business of the ban. At branch level, marketing practices are followed by the operations department. At each branch of bank, officers are available to provide marketing activities of their products.

They make customers call and personally visit the potential customers to convince them to invest in AFB. They make phone calls to customers and inform them about their schemes, profit rates, etc.

Observation & Conclusion

I observed the bank Alfalah a financially sound bank. Its profits are increasingly year by year. Its staff is very good and sincere width the bank. But due to the present economic slump, business of the reduced.

Bank Alfalah under the leadership of Sheikh Nahayan Mabarak Al-Nahayan has mad e significant progress in building and strengthening both the corporate and retail banking sectors in

Pakistan. The bank attained number 2 positions in terms of its balance sheet size amongst the private banks in Pakistan in 1999.

Bank Alfalah views specialization and service excellence as the cornerstone of its strategy. The people at bank realize that innovation, creativity, reliability, customized, services and their execution are they key ingredients for their future growth. Based on this approach, their treasury divisions and structured finance unit have been Gerard to provide specialized services to the corporate customers.

Revenues from these activities has started yielding dividends and they expect significant growth. The areas in the coming years. They are aware that they have stepped into the 21st century and they must meet its challenges by acquiring the highest level of the technology. They will thus be accelerating their technological advance to enable them to distribute their products and services through most efficient and high tech means. They say that they will continue to invest in the modern tools and substantial allocation to resources will be made to achieve this objective during the current year. Their program to launch real time. On line tanking services and introduction of ATMs at strategic locations have been firmed up and it will be fully operations during the year 2001.

Credit card should be started and marketing practices should be increased. It should be done in the best possible manner.

I found the rules and regulations of the bank very good and strict e.g. a limited staff is allowed to enter cash department. Security system is very good and modern. There is a great need of WAN (wide area network) system. It should be introduced at the bank at its earliest.

Reactions: Labels: Banks and Financial Institutions, Internship and Apprenticeship 3 comments:

Anonymous said... Thank u for uploading but my suggestion is to add more stuff into internship report August 10, 2010 4:36 PM

Admin said... This website is collaborative effort of several people. If you have any kind of information or report, please share it with us. August 12, 2010 8:04 PM

Anonymous said... goood reprot n having a complete vision of bank alfalah January 19, 2011 10:04 PM Post a Comment Links to this post Create a Link Newer Post Older Post Home Subscribe to: Post Comments (Atom) Note: Hundreds of reports are in this website, yet the front page doesn't show all reports. So please type below to search your desired topic.

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