Introduction To The Report: Chapter - 1

Chapter-1:
Introduction to the Report
CHAPTER - 1
INTRODUCTION TO THE REPORT

1.1 INTRODUCTION
This report is an essential part of the M.B.A degree requirement that is offered by the CECOS Institute of Computer and Management, University Peshawar. It is based on the six/eight weeks internship program that the students had to undergo with the major banks or any other organization in Rawalpindi Peshawar region.
1.2
PURPOSE OF THE STUDY
The purpose of the study is to experience real life banking practices in order to bridge the gap between the theoretical and the actual for better comprehension and knowledge of the different aspects of this vast field of profession. The main purpose of this report is to critically analyze and comprehend banking operations and suggest measures in the form of concrete and weighted recommendations. Besides, the report also aims to inculcate amongst the students the method of collecting relevant material and shaping it in the form of formal report writing.
1.3
SCOPE OF THE STUDY
Banking is a much diversified field and has various dimensions and treatments. However, for a meaningful dialogue resulting in a definitive conclusion the study for this report has been confined to banking operations as the objective is to make an acquaintance with the practical aspect of banking.
1.4
METHODOLOGY OF REPORT
The report was prepared using both primary and secondary data that included the following methodological tools: 1.4.1 Primary data
The data, which is collected for the first time and exist in raw form, is called primary data. 1
Chapter-1: It includes: 1.4.2
Personal observations during the six- weeks internship program. Discussion with the Bank personnel from time to time. Secondary Data
The data gathered from existing sources are called secondary data. They are in processed form. The main sources of secondary data of BAL are: Journals, newspapers and course books. Brochures and manuals from the Bank branch. World Wide Web. And personally existence in Bank Alfalah Limited.
1.5
LIMITATIONS
The banks hesitation to reveal certain facts and figures apart from major managerial and organizational secrets made it slightly difficult to gain all the information that would have resulted in a report applicable to the organization as a whole along with remedial suggestions. The daily busy routine of the employees also allowed for foregoing any queries that cropped up in the mind while undergoing the training within the assigned branches. Although there was enough time yet the space constraint and non availability of resources on the part of the writer to personally visit places of interest and relevance has limited the study to only gather those facts and figures that are significant to the purpose of the study and do not prove the conclusions drawn at the end as incorrect.
Chapter-1:
1.6
SCHEME OF THE REPORT
The report is arranged in the following sequence. SECTION I This section has one chapter. Chapter 1: This is an introductory chapter which describes the introduction to report, purpose of the study, scope of the study, Methodology of report & Limitations of Report. SECTION II This section includes the review of Banking Sector & Bank Alfalah Limited. This section is comprised of three chapters. Chapter 2: This chapter encompasses brief history banking and over all banking sector in Pakistan. Chapter 3: This chapter goes in detail study about the Bank Alfalah Limited in Pakistan, its mission and vision statements, its objective and its different products offered to its customers. Chapter 4: This chapter is the lengthiest chapter of the report. It precisely tells about the several departments working at Bank Alfalah Limited Peshawar Islamia Road Peshawar Cantt.City Branch and their functions. The departments discussed are Deposits Department, Remittance Department, and Auto Loans Department. Cash Department, Home Finance Department & Credit Department.
SECTION III 3
Chapter-1:
This section also has one chapter and it is about the analysis of Bank Alfalah Limited. Chapter 5 & 6: This chapter makes the critical analysis of Bank Alfalah Limited. Financial analysis is made on the National performance of the bank, followed by a SWOT analysis. SECTION IV This section also contains one chapter. Chapter 67: This chapter gives the Ffindings & recommendations based on the financial & critical swot analysis of the organization.
Chapter-2:
History of Banking in Pakistan
CHAPTER - 2
HISTORY OF BANKING IN PAKISTAN

Bank is the essential constituent of the business. It ensures the prompt and smooth running of trade network. The better network of banks dots the landscape of modern economy for the country. Apart from safeguarding peoples money, it gives push to all sectors of economy. Bank can be defined as: Banks are those financial institutions, which are established for the deposits, custody, and repayment on demand of money, and obtain the bulk of their profits from the investment of sums thus derived and not in immediate demand. In other Words, A bank is a financial institution which receives money from people for deposit and it lends money to people at rates of interest, provided that good security can given. A bank thus becomes a middleman between those who have money to lend and those who want to borrow money. According to Mr. Parking A bank is firm that takes deposits from house holds and firms and makes loans to other house holds and firms. A bank either borrows or lends money. But the term borrow is not used in an exact sense. Banks are keepers of money. They have funds available for demand at all time. The deposits of their customers are not actually loans. But the money in the keeping of the banks is invested and made to produce. Thus the banks really borrow money from their depositors money. Every time a person deposits money in a bank, he is actually lending that money in to the bank.
Chapter-2:
2.1
BRIEF HISTORY OF BANKING
The Clay tablets of Banking have been found in Babylonia and Assyria, showing some of the functions of banker, such as money changing, advances. King Hummurabi, the founder of Babylonians Empire, developed rules and regulations for banking operations that payments were made through a banker and by drafts against deposits. Deposits bearing interest, letters of credit and other means of transferring credits from one place to another were also know in anct Greece and Rome. In Italy during the middle Ages, continually from early times, it is now accepted that the first public bank properly so called, was the Banco di Rialto, established, at Venice by acts of senate in 1584 and 1587. In 1587 Banco di rialto was formed at Genoa, the famous Bank of St George; this was a private bank of deposits. In 1619 the Banco del Giro was founded; this become the only public bank in the state, and was long famous as the Bank of Venice. Later in 1609 the Bank of Amsterdam was also formed. This bank rendered valuable services to the Netherlands trader up to the year 1820. In 1619 the Banco del Giro was founded; this become the only public bank in the state, and was long famous as the Bank of Venice. Bank of Hamburg cant into existence in Hamburg with the business of accepting deposits of fine silver or foreign currency. The bank rendered great services to the merchants as well as the countries. It dealt with them until 1873, when it was merged with the Reich bank. Their business lay in the assistance of commerce not by loans but by the local manufacturers.
2.2
BANKING IN PAKISTAN
Before the partition of India and Pakistan in 1947, branches of British banks dominated banking in Pakistan. The first domestic banking institutions emerged in the 1940s, immediately after Pakistan's independence from Britain. These institutions include the Australasia Bank (today, Allied Bank Limited) or Habib Bank Limited, Muslim Commercial Bank, and the National Bank of Pakistan (NBP). The NBP was wholly government owned but prominent merchant families established the other three. In 1948, the State Bank of Pakistan (SBP) was formed. It assumed that the supervisory and monetary policy powers of the State Bank of India. From 1960 to 1970, a number of specialized Development financial institutions (DFIs) such as 6
Chapter-2:
Industrial Development Bank of Pakistan and the Agricultural Bank emerged. These DFIs were either controlled directly by the state or through the SBP, and were intended to concentrate on lending to long-term projects in specific priority sectors. In 1974 Government of Pakistan nationalized all the private sector banks. In addition to managing the monetary policy, SBP also oversees the entire financial system and has institutionalized the procedure for appointment of chief executive officer (CEO) and Board of the Nationalized Commercialized Banks and DFIs. Banking and Financial services sector in Pakistan comprises the commercial banks and the non-banking financial institutions, including the development finance institutions (DFIs), leasing companies, modarabas (Islamic Mutual Funds) and investment banks. These are controlled and regulated by the State Bank of Pakistan (SBP). Pakistan is in the process of adopting an Islamic (Shariah) financial system, under which interest-based banking is not allowed. Since 1990 the Government of Pakistan has introduced various reforms in the financial services sector enhancing the level of autonomy enjoyed by the SBP. Privatization program that began in Pakistan in 1991, two of five NCBs and DFIs were privatized and 11 new private banks were setup. The number of banks operating in Pakistan has increased, which in turn has resulted in increased competition. The banking sector, in general, has shown good progress during the last few years. During previous five years, the combined total assets of domestic banks, showed an average annual increase of 22 percent, while combined deposits have recorded an increase of 27 percent per annum. A total of forty-six commercial banks, including twenty-one foreign banks, are operating in Pakistan. Additionally, sixteen Investment Banks, twenty-nine Leasing Companies and fiftythree Modharabas Companies provide a mix of financial services. The domestic private banks, despite though competition from NCBs, denationalized commercial bank and foreign commercial banks, have show a phenomenal growth over the past five year. Presently there is only one nationalized bank, National Bank of Pakistan (NBP); HBL & UBL was just recently privatized.
Chapter-2:
Opportunities for new foreign banks exist in consumer banking, corporate banks, investment banking, leasing and housing finance sectors. Good reputation enjoyed by the existing foreign banks will be helpful for new entrants. turnaround possibilities in NCBs through privatization. Some challenges, however, do exist in the form of weak economic conditions in Pakistan and the
Chapter-23: Pakistan Bank Alfalah Limited Pakistan
History of Banking in
CHAPTER - 3
BANK ALFALAH LIMITED PAKISTAN

3.1 HISTORY OF BANK OF ALFALAH LIMITED
Bank Alfalah Limited was incorporated on June 21st, 1997 as a public limited company under the Companies Ordinance 1984. Its banking operations commenced from November 1st, 1997. Bank Alfalah Limited started its life as Pakistan Operation of BCCI. A multi-national conglomerate based in Luxembourg and Grand Cayman. BCCI was the 7th largest bank in the world. The estimated assets of BCCI were 20 billion dollars. The operations of the Bank were in 70 different countries of the World. In July 1991, the Bank of England and International Liquidators accused BCCI of being involved in money laundering to the tune of 1.54 billion dollars. Upon closing down of BCCI, in 1992 the operations of BCCI in Pakistan were acquired by Habib Bank Ltd, and were run as a wholly owned subsidiary by the name of Habib Credit & Exchange Bank (HCEB). HCEB was later acquired (through the process of privatization) by the Abu Dhabi Group, in 1997 and its 70% ownership was transferred to Abu Dhabi Group. The agreement was signed on July 7,1997.1 The bank is engaged in commercial banking and related services as defined in the Banking companies ordinance, 1962.
3.2
BANK ALFALAH TODAY:
The strength and stand of Abu Dhabi Group, principal owners of BAL, have helped Bank Alfalah Limited launch high quality consumer and corporate banking operations in Pakistan. Bank Alfalah Limited have embarked upon a rapid expansion program to make sure that the services reach more and more people, BAL is headed towards an optimum sized network reaching major urban centers in Pakistan.
The Bank is well positioned and geographically poised, to cater for increased business demands, from its existing and potential clientele. The bank is not only making its contribution in accelerating Pakistans economy. There are 321 Branches of Bank Alfalah Limited in 118 different cities of Pakistan, with the registered office at B.A.Building, I.I.Chundrigar Karachi. Islamic Banking Division is a recent initiative, which operates as a separate branch. It offers shariah complaint products through a network of 23 branches, operating in different cities of Pakistan. With the implementation of the office automation and communication system BAL will be poised to compete with the best in quality and speed of customer services. Bank Alfalah Limited continually endeavors to develop wider spectrum of innovative financial products based on consumer needs.
3.3
VISION
Vision statement identifies where the organization intends to be in the future or where it should be to best meet the needs of stakeholder. Vision statement incorporates a shared understanding of the nature and purpose of the organization and uses this understanding to move the organization toward a greater purpose.2 The Vision of Bank Alfalah is: To be the premier organizations operating locally & internationally that provides the complete range of financial services to all segments under one roof.
3.4
MISSION STATEMENT
Mission statements are "enduring statements of purpose that distinguish one business from other similar firms. A mission statement identifies the scope of a firm's operations in product and market terms." It addresses the basic question that faces all strategists. A clear mission statement describes the values and priorities of an organization. A mission statement broadly charts the future direction of an organization. Mission statement of Bank Alfalah is:
10
To develop & deliver the most innovative products, manage customer experience, deliver quality service that contributes the brand strength, establishes a competitive advantage and enhances profitability, thus providing value to the stakeholders of the bank.
3.5
CORE OBJECTIVES OF BANK ALFALAH LIMITED
Objectives can be defined as specific results that an organization seeks to achieve in pursuing its basic mission. Objectives are essential for organizational success because they state direction; aid in evaluation; create synergy; reveal priorities; focus coordination; and provide a basis for effective planning, organizing, motivating, and controlling activities. Bank Alfalah Limited objectives are as follows: To create maximum economic value for shareholders through a constant relationship focuses on financial services. Leveraging BAL Investments in the IT field. On going assessment of opportunities for customers, leading to the constant development of new products and services. To promote industrial, agricultural and socio economic processes through the active participation of private and public sector in the country.
3.6
BANK ALFALAH CREDIT RATING:
PACRA, a premier rating agency of the country, has rated the Bank'AA:, Entity Rating for Long Term and Al + for the Short Term. These ratings denote a very low expectation of credit risk, strong capacity for timely payment of financial in commitments in the long term and by highest capacity for timely repayment the short term, respectively. Further, the unsecured subordinated debt (Term Finance Certificates) of the Bank has been awarded a credit rating of AA- (double A minus) .
3.7
Branch Network of BAL

11
Since the privatization in 1997, Bank Alfalah Limited has remained consistent in its mission to excel in providing innovative products and services to its customers. The Bank recorded significant increase in its business volumes coupled with the broadening of network and clientele base. The Bank is fully aware that the branch network has direct implications on the service that it provides to its customers .We continue to strengthen our Presence in the market place and as of June 30, 2009, we are operating Through 321 branches that include 52 Islamic Banking and Afghanistan and one branches and seven foreign branches in Bangladesh during the year 2010 .
offshore banking unit in Bahrain. Our plan is to add more branches to the network
3.8
ORGANIZATIONAL STRUCTURE OF BANK ALFALAH LIMITED
Organizing is a function of management. Organization is end result of organizing. So organizing is a part of management that involves establishing intentional structure of roles for the people to fill an enterprise. It is a process of breaking down the overall tasks of the enterprise into individual assignments/ activities and then getting them put together in units or department or groups along with the delegation of authority to a manager of a unit/ department/ group. Organizational structure implies a formalized intestinal structure of Roles/ position. This is not the end in its self; rather mean which help achieve certain objectives. A well-developed and properly coordinated structure is an extremely important requirement for the successful operation of any organization. It provides the basis framework with in which functions and procedures are performed. The organizational structure of BAL is as follows:
3.9
MANAGEMENT OF BANK ALFALAH LIMITED
A 6-member Board of Directors headed by a Chairman manages BAL. There is an Executive officer, who runs the Central Management Committee. In Central Management Committee there are 11 members. 12
The names of members of the Chairman, Board of Directors and Central Management Committee along with their designations are given in the annexure.
3.10 BAL PRODUCTS

Bank Alfalah has achieved a competitive advantage over other banking institutions by offering a complete range of banking solutions for its valued clients. The concepts entail creation of a financial super Market where a large variety of banking products and services are available to meet diverse needs of the customers. A summary of Bank Alfalahs products and services is as follows: 3.10.1 DEPOSIT PRODUCTS 1. PLS Saving (Rupee) Accounts
Saving accounts are designed to mobilize savings primarily from a large number of individuals and household. Any one or more individuals or partners can open a PLS saving account with the Bank. Salient features of PLS account is as follows: Profit & Loss Sharing Saving Bank Account. Minimum account opening requirement of Rs. 5,000 only. No restriction on number of withdrawals and number of deposits. Profit on saving accounts is credited to the customer account on half-yearly basis. Free debit card can be used to withdraw cash, transfer of funds (interbank & internal transfer) and make purchases at thousands of outlets across Pakistan which provides access to funds 24 hours a day 2. Current Rupee Account
13
Individual, partnerships, companies, associations, clubs, societies and NGOs are eligible to open current accounts. Salient features are as follows: Non-interest bearing checking account. Minimum account opening requirement of Rs. 10,000 only. Debit card can be used to withdraw cash, transfer of funds (interbank & internal transfer) and make purchases at thousands of outlets across Pakistan, which provides access to funds 24 hours a day. 3. No restriction on number of withdrawals and on number of deposits Royal Profit Savings (Rupee) Accounts
Royal profit is a high yield rupee account intended to provide higher rates of profit to high net worth customers and greater flexibility and convenience in terms of transactions. Current rates of profit are as follows: Table 3.2 Amount From 50,000 To 999,999 From 1,000,000 To 9,999,999 From 10,000,000 To 49,999,999 From 50,000,000 To 149,999,999 From 150,000,000 & Above Proposed Rates (P.A) 1.50% 1.75% 2.00% 2.50% To be quoted by treasury
Source: BAL Jinnah Road Branch Rawalpindi
Features: Minimum Deposit requirement of Rs. 50,000 only. Higher returns on higher balances. No restriction on number of withdrawals and on number of deposits.
14
Debit card can be used to withdraw cash, transfer of funds (interbank & internal transfer) and make purchases at thousands of outlets across Pakistan, which provides access to funds 24 hours a day.
Profit is credited to the customer account on monthly basis. Personalized chequebook.
4.
Basic Banking Account: Initial deposit for account opening is Rs. 1,000 with no minimum balance requirement.
Non-interest bearing checking account. Maximum 2 deposits & 2 withdrawals through cheque is allowed. Free 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.
5.
No restriction on ATM withdrawal Alfalah Mahana Amdan
Alfalah Mahana Amdan is a 1 year TDR with expected rate of profit of 10.5% p.a. This term deposit will provide an opportunity to individual/joint customers to enjoy higher returns that will automatically be credited to his/her current/PLS/RP/BBA account on 1st working day of each month. This facility is not available for business and corporate customers. Some salient features Minimum placement limit is Rs. 100,000/- and maximum placement limit is Rs.15, 000,000/ Expected Rate of profit is 10.5% Per annum (as per PLS governing rules) 15
Chapter-23: Pakistan Bank Alfalah Limited Pakistan into customers Current/PLS/RP/BBA account
Profit will be automatically credited on the 1st working day of each month
Free Personal Accident Insurance coverage up to the deposit amount or Rs. 1,500,000/- whichever is lower.
Customer can avail financing facility up to 90% of the deposit(as per banks policy)
Any Pakistani resident over the age of 18 can open this account Alfalah Mahana Amdan term deposit can be maintained only at any one BAL branch with a maximum cap of Rs. 15 Million. An undertaking shall be obtained from the customer certifying that he/she is not availing Alfalah Mahana Amdan Term Deposit Receipt facility from any other BAL branch. (included in AOF)
Alfalah Mahana Amdan TDR will be issued for one year tenure with renewal facility of principal amount i.e. the facility will be renewed automatically on maturity (i.e. 1 year)
5.
Foreign Currency Accounts
This Account is offered to resident and non-resident Pakistanis as well as foreigners can open foreign currency accounts. A foreign currency account is opened either as savings account or current account. 6. Safe Deposit Lockers
Bank Alfalah provides safe deposit lockers facilities to its customers for safe keeping of their valuables like documents, securities and jewellery etc. Important features of lockers facility are as follows: Various sizes to choose from small to extra large: small, medium & large Annul locker rent ranges from Rs.1,000/- to Rs.3,500/-.
16
Chapter-23: Pakistan Bank Alfalah Limited Pakistan million.
Locker rent is waived for customers maintaining a minimum deposit of Rs.2
The key deposit of the Locker is Rs.1,000/- which is refundable.
Locker Rates The annual licensee fees of the following sizes of lockers will be as per Bank's Schedule of Charges, which are:
17
Chapter-23: Pakistan Bank Alfalah Limited Pakistan Table 3.4 Locker Size Small Medium Large Special
Source: BAL Jinnah Road Branch Rawalpindi.
Charges per annum Rs.1000/Rs.1500/Rs.3000/Rs.3500/-
7.
Alfalah Kamyab Karobar
Bank Alfalah Limited recently lodged a new product of current account named Alfalah Kamyab Karobar, which is a unique facility of transactions; it is lodged in February 2010. Salient features are as follows: Non-interest bearing checking account. Minimum account opening requirement of Rs. 5000 only. Maximum up to Rs. 500,000/- limit Debit card can be used to withdraw cash, transfer of funds (interbank & internal transfer) and make purchases at thousands of outlets across Pakistan, which provides access to funds 24 hours a day. Free unlimited balance statements throughout the month Free unlimited online Free Demand Draft and Pay Order Facility Free unlimited cheque books
No restriction on number of withdrawals and on number of deposits
3.10.2 CONSUMER FINANCE PRODUCTS 18
Consumer finance is a fast growing segment of banking business in Pakistan. Credit cards, car finance, personal loans, loans for purchasing household appliances, computers and related accessories and housing financing are the principal consumer finance products. Being a market oriented bank; Bank Alfalah also has a strong focus on consumer banking and consumer finance. A brief description of products is as follows:
1. a.
Auto Leasing & Financing Car Finance
Alfalah car scheme enables customers to own a car at easily affordable and flexible installments with minimum down payment and insurance.9 Benefits and Features Banks Tenor period ranging from 1 to 5 years Financing of all brand new locally assembled vehicles and used cars. Financing limit ranging b/w Rs. 200,000/- to Rs. 2000,000/Hypothecation of vehicle in the name of the Customer. Quickest processing No hidden charges Minimum down payment Complete repayment at any point of time Balance transfer facility {BTF} for existing as well as new clients from other
19
Chapter-23: Pakistan Bank Alfalah Limited Pakistan b. Corporate & Individual Car Leasing
BALs introduced car leasing facility for individuals and corporate sector has set new dimensions for the product. Now customers are provided with the option of either to get the vehicle leased or financed.
Features Renowned and reliable Insurance companies are offering the competitive rates of Insurance. Customer can pay year insurance premium in advance {at the time of down payment} and remaining in the subsequent equal monthly installment. Offering lowest rate of markup of 9.5%, {per annum}. Easily affordable installments on monthly basis. Hypothecation of vehicle in the name of the Bank Alfalah Limited. BAL Acting as a co borrower, will enables customers family members {spouse, children- 18 year and above} to avail the financing facility and can get the car registered in their names as well.
Documents required Two passport size photographs. Copy of National ID card. Bank statement for the last six months. Salary certificate in case of salaried individual}. Business proof for self employed and business people}. National Tax Number (NTN)
20
Co borrowers NIC copy {if it is a co borrower case}.
Eligibility Pakistani National Identity Card holder. Over 20 years of age (Maximum 60 years in case of salaried and 62 in case of a business person at the time of maturity of the loan). Salaried, Businessman or self employed.
2.
Credit Cards
Credit Cards are increasingly becoming way of life in Pakistan. Bank Alfalah (visa) Credit Card product was launched in Dec 2002. In a short period of time, it has achieved an unprecedented success. BAL Credit Card is unique in the sense that there is no card issuance fee as it is free forever.10
Features No Joining Fee No Annual / Renewal Fee Special offer on Warid post paid connections Lowest Markup
21
Chapter-23: Pakistan Bank Alfalah Limited Pakistan up of 2.25% per month.
Only Bank Alfalah gives to customers the unmatched feature of the lowest mark
Balance Transfer Facility Bank Alfalah offers balance transfer facility to all its Card members - the easy and convenient way to settle unsettled credit card payments on all existing credit cards in Pakistan. As an Alfalah VISA Card member you can avail balance transfer facility at a low rate of only 1.50% per month (for initial six months), which happens to be the lowest in Pakistan. The balance transfer facility can only be availed only if the total outstanding balance does not exceed beyond the credit limit assigned by Bank Alflah for Alfalah VISA card.
Global Acceptability Bank Alfalah VISA card is a partner everywhere and is globally accepted and welcomed at locations displaying the VISA logo. It is accepted at nearly 29 million locations in more than 150 countries around the globe and at over 22,000 establishments in Pakistan.
Cash Advance Facility 75% Oof Credit Limit
Now you can avail Cash Advance Facility up to 75% of your available credit limit. Enjoy the benefits of this exclusive offer on your Bank Alfalah Credit Cards. You can get cash from Alfalah ATMs or cash counters of Bank Alfalah branches and other VISA member banks in Pakistan.
22
Revolving Credit With Alfalah VISA you have the option of paying only 5% of your outstanding balance by the payment due date. Service charges will be levied on the balance unpaid spending and carried forward. These charges are calculated on a daily basis from the transaction date for all cash and retail transactions. The following month you have the option of either the full amount payment or if you wish, pay only the minimum amount due and revolve again.
Free Supplementary Cards Gift your family members with exclusive Alfalah VISA supplementary cards and let them also enjoy the privileges of Alfalah VISA. Only Alfalah VISA gives you the unique feature of having up to six free supplementary cards for anyone you care for. All supplementary Card members share your credit limit. All charges incurred on the supplementary cards will be reported on your monthly statement.
Zero Loss Liability Bank Alfalah ensures his customer have complete peace of mind even if customer loose his card. Customers are completely secure against loss or theft.
3.
ALFALAH Hilal Card
Bank Alfalah through its commitment to provide superior and improved services to its valued customers, has unveiled a nationwide network of ATMs. Bank Alfalah introduce Alfalah Hilal Card the revolutionary, new-age form of cash that provides greater freedom, security and convenience combined with the wide reach of Visa 23
Network. This card can be use for all financial needs around the world, round the clock, wherever; Visa electron cards are accepted locally and internationally. It gives an unlimited access to the current/Saving account with a simple swipe, at millions of retail shops or ATMs, worldwide. Bank Alfalah Limited ATM network is geared up to exploit the latest technology, and is equipped to meet the highest standards of security and efficiency.11
24
Chapter-23: Pakistan Bank Alfalah Limited Pakistan Features: No Interest
No minimum Income Requirement- only it needs to do is open an account in any branch of Bank Alfalah Limited.
world. spot.
No PIN required for Retail Transactions-the only one swipe care in Pakistan Photograph and Signatures for added security Accepted at more than 840,000 ATMs and 29 Million retail outlets around the
Customer can get balance inquiry on the ATM card. Customer can get an instant printout o the account Balance. Customer can get a printout of the last transaction (Mini-statement) on the
5.
Home Finance
This product which was launched on September 01, 2003, provides a wider range of Home Finance tailor-made plans, designed specially to meet customers need at a very competitive rate. At present, Bank Alfalah is the only Bank in the market, which offers a house finance scheme for non-resident Pakistani customers based in the UAE besides Pakistani residents. Housing finance is available from Rs.1 million to Rs.50 million to purchase, renovate or construct a house/apartment. Important points are as under: 12 Payment period ranges from 3 to 20 years. Owner only invests 20% of the value of property. 25
Loan can be repaid before maturity without any penalty. Borrowers age must be between 25 to 60 years. Salaried persons, businessmen and self-employed people are eligible. Financing is also available for purchase of residential land. Complete freedom to move between floating and fixed rates. Financing available to resident & non-resident Pakistanis. Mark-up option available for floating & fixed rates.
The Eligibility Criteria Pakistani Nationality. Age should between 25 and 60 years. Continuous employment in a permanent position for 2 years or more. 3 years (or more) of business or professional experience. Gross annual income is Rs.240,000/- or more [spouses income (up to 50%) can also be combined]. Customer has been a Bank Alfalah borrower for past one year with clean payment record.
Documents Required The following documents are required to be submitted by an applicant with the completed application.
26
Chapter-23: Pakistan Bank Alfalah Limited Pakistan For Salaried Person: 2 passport size photographs. Copy of NIC .
Copies of last two salary slips dully attested by the HR Department. Salary Certificate (original) from the employer, showing the gross salary and deductions.
Employment verification form from the employer.
27
For Self-Employed & Business person 2 passport size photographs. Copy of NIC. Certified Copy of last Six Months bank Statement. Copy of current professional association membership / trade body membership certificate (if Applicable). Copy of Latest Form 29 duly attested by the company secretary Letter from company secretary confirming the status and share-holding.
Mark-up rates For SVR (Standard Variable Rate) option:
SBP discount rate + 2%, currently 17% + 1% = 18% Salaried 17.00% per Annum For fixed rate option:
Self-employed Professionals & Businessmen and Overseas Pakistani (both salaried and self-employed) 18.00% Per Annum.
These are indicative rates reviewed monthly
28
Chapter-23: Pakistan Bank Alfalah Limited Pakistan 6. Alfalah Karobar Finance
Alfalah Karobar Finance is an other Product of BAL, which is launched 2007. It is a hassle-free running finance facility for SMEs that meets all the business needs like no other. 13
Features 7. Financing facility up to Rs.10 million Single-digit markup rate Quickest processing time Lowest processing fee Special incentive for BTF Customers Alfalah Zarie Sahulat
Bank Alfalah Ltd. (BAL) agri finance program has been named as "Bank Alfalah Zarie Sahulat. Bank Alfalah is extending this service to the clients on a competitive markup rate. The scheme now covers financing of a multitude of activities related to crop production, harvesting, transportation, marketing, storage, processing, packing, export, agri development, working capital and fixed investment financing of agri non crop activities, storage, silos, etc. making it quite exhaustive and comprehensive. The products have been, therefore, designed keeping in mind objectivity of practical applicability in market scenario and to cater to the most commonly demanded items of agricultural financing by farmers.14
Products:
29
Chapter-23: Pakistan Bank Alfalah Limited Pakistan are quoted below.
Products of Alfalah Zarie Sahulat along with the nature of facility and their purpose
Table 3.5 Product Alfalah Paidawari Zarie Sahulat Alfalah Musalsal Zarie Sahulat Alfalah Tractor and Transport Zarie Sahulat Nature Oof Facility Short Term Purpose Processor, agri producer, exporters and other eligible items. Credit needs under working capital Purchase of tractors, trolleys, pick-up, motor cycle, trucks, milk van or other such items including repair of tractors, as per eligible items. To finance machinery and equipments, such as, combine harvester, thresher, picker, digger, trolley, planter, sowing drill, cultivator, plough, power tiller, harrow, sprinkler, cane crusher, tobacco curing equipment etc. To meet irrigation water needs of the farmers. Land development and improvement, land leveling laser leveling, clearance of jungle, farm field layout, terracing, contouring, soil reclamation, embankment, land formation, bund construction, water management, water course 30
Short Term (Running finance limit for 3 years with annual clean up) Medium Term
Alfalah Machinery & Equipment Zarie Sahulat
Medium/Long Term
Alfalah Aabpaash Zarie Sahulat Alfalah Islah-e-Araazi Zarie Sahulat
Medium Term Medium Term
History of Banking in improvement etc.
Alfalah Poultry Zarie Sahulat
Short/Medium Terms
Working capital and fixed investment needs for broiler and layer production, breeder flock, GP flock, hatchery, product processing, packing, transportation, storage, compound feed making etc. Working capital and fixed investment financing of dairy and milch animals, feed lot and fattening station structure and equipment, livestock farm structure and equipment, fattening of animal, milk chilling plant, construction of sheds for animal, opening of private veterinary clinics (veterinary equipment), opening of veterinary store, milk plant and other eligible items. Inland: Fish seed and feed, manure charges, running charges of tube well pumps, construction excavation, expansion and rehabilitation of pond, installation of tube wells, water channels, fencing, boats, net twine, rope, fish yards etc and other eligible items. Marine: Fuel, ration, and ice for marine fisheries, engine and spare parts, new boat and trawler, boat equipment etc. and other eligible items. Construction of cold storage, godown, bins, silos, structure for storage of wheat, 31
Alfalah Dairy & Livestock
Zarie Sahulat Short/Medium Term
Alfalah Fisheries Zarie Sahulat
Short/Medium Terms
Alfalah Silos/Storage Zarie Short/Long Term Sahulat
History of Banking in steel/metal capsules, hire charges for storage of raw agri product etc. and other eligible items.
Alfalah Marketing Zarie Sahulat
Short Term
To facilitate the marketing of the produce and also for export of cotton, cotton yarn, mutton, beef, fruits, vegetables etc and all other eligible items. For setting up seeds processing units, installation of fruit and vegetables machinery, milk chilling units, polishing , grading, packaging of fruits and vegetables cotton ginning factories under BMR, Bio gas plant etc. Financing against agri produce procurement receipt, purchase of bills, deferred payment leaf vouchers issued by tobacco companies, continuing guarantees etc. For leasing tractors, farm machinery, equipment etc Setting up plants. This shall be an alternate use of entry
Alfalah Agri Industrial Zarie Sahulat
Medium/Long Term
Alfalah Bills / Guarantees Zarie Sahulat (For growers corporate client only)
Short Term
Alfalah Lease Zarie Sahulat Medium/Long Term Alfalah Bio Gas Zarie Sahulat Medium /Long Term
Source: www.BankAalfalah.com
Documents Required BAL requires the following documents for agriculture financing: Copy of CNIC. Pass Book issued by Revenue department. Copy of Khasra Gardawri. 32
Chapter-23: Pakistan Bank Alfalah Limited Pakistan Proof of leased in land if any.
Other documents required according to nature of finance. Eligibility Criteria: Finance can be provided to all categories of farmers (owners, owner-cum-tenant, & tenant). The under mentioned criteria shall be observed while extending agri finance to the farmers under various products of Bank Alfalah Zarie Sahulat:
The applicant is an individual /entity engaged in Agri activities identified in the foregoing paragraph. The applicant (individual / entity) shall be Pakistani / registered in Pakistan. The applicant is not a defaulter of the banking system. The applicant must be able to produce proper securities / sureties / passbook. The minimum and maximum age shall be 18 years and 65 years respectively (upper age limit relaxation considered on case to case basis). 8. Alfalah Malkiyat Finance
Bank Alfalah took another step towards addressing the needs of the industry by introducing Alfalah Milkiat Finance. AMF is aimed at strengthening the Small and Medium Enterprises viz a viz their business premises. Alfalah Milkiat Finance offers comprehensive and flexible financing packages from Rs. 0.5M up to Rs. 20 million for the purchase, renovation and expansion of business premises.
33
Chapter-23: Pakistan Bank Alfalah Limited Pakistan Eligibility Criteria of AMF
The prospective customer should meet the following acceptance criteria: 1. 2. They should be resident Pakistani(s). Their constitution can be individuals, sole proprietorships, partnerships, private limited companies & public limited companies. 3. Age of the prospective customer (individuals/proprietor) should not exceed 65 years at the maturity of loan. 4. years. 5. The security against Alfalah Milkiat Finance should be mortgage of urban commercial/industrial property (ie). 6. 7. Minimum equity participation of the SME shall be 30% under AMF. Customers should be operating the existing business at least for the last 3
9.
Lease Finance
Lease finance provides a significant source of funds for companies to acquire or use assets. Leasing provides additional earning opportunities to acquire assets and to get the inflows simultaneously out of the operations of the same assets. The ownership of the asset is vested with the Bank (lessor) and in return for rental payments, the client (lessee) has full use of the asset. Being a medium to long-term mode of financing, it allows the lessee to use the funds for other profitable purposes which otherwise would have been tied up in case of immediate payment for purchase of the asset. Leasing Mechanism BAL offers the most competitive and flexible terms & conditions for lease concerning choice of assets, repayment, pricing, and tenor, which range between 3 to 5 years.
34
Chapter-23: Pakistan Bank Alfalah Limited Pakistan 10. Structured Finance
Established in 1998 in order to provide innovative investment banking services to Vvalued clients. A team of hand picked professionals, dedicated to syndicated loans and structured products. The teams expertise is well known in the marketplace with its capability to assist public & private sector entities, major financial institutions, multinational corporations, domestic & international institutional investors in innovative financing including underwriting & private placements.
The scope of SFUs activities also encompasses advisory assignments, such as privatization, Mergers & Acquisitions (M&As), domestic listings, IPOs and restructuring.
During the past few years, SFU has been successful in sourcing and participating in a number of prestigious transactions involving large amounts. 15
Some of the value added services offered by SFU include the following: Loan syndication Public floatation of Term Finance Certificates (TFCs) and equity Financial restructuring Private placement of Term Finance Certificates (TFCs) and equity underwriting Guarantee syndications Mergers & Acquisitions (M&As) Fostering joint ventures Privatization Sale side and buyers side advisory 35
Chapter-23: Pakistan Bank Alfalah Limited Pakistan Structuring new financial instruments
In the future, SFU is envisaged to supplement the enhanced profile and profitability of Bank Alfalah Limited through its value added services, through both asset building and income generating aspects. 10. Money Gram
Bank Alfalah limited, in collaboration with Money Gram, offers remittance service to Pakistan. Money Gram is person-to-person money transfer service that allows consumers to receive money in just a few minutes.16
Features
Secure and reliable: An extensive network of quality agents, linked by computer, will transfer your money safely and ensure that it is handled with care and without delay. Thousands of people already use the Money Gram service all over the world. It is trusted for its reliability and security. Convenient and fast: Money Gram is available in over 154 countries and in more than 40,000 locations worldwide. With Money Gram money is transferred immediately and usually arrives at the receiving end within 10 minutes while other services can take days or weeks. There are no complicated procedures and do not need a bank account or a credit card. Free message service (for senders): There is also an added personal touch can receive a 10 word message from the sender with every transaction at no extra cost. 11. Online Banking 36
Bank Alfalah now offers the facility of on-line banking to its customers through its countrywide network of branches. Customers can use the ATMs or the banking counters of any branch for day-to-day banking needs, irrespective of branch where they maintain their accounts. For Corporate customers centralized Cash Management facility is also offered through on-line banking. 17
37
Chapter-24: History of Banking in Pakistan Bank Alfalah Limited Jinnah Islamia Road Branch, Peshawar Cantt. Rawalpindi
CHAPTER - 4
38
BANK ALFALAH LIMITED ISLAMIA ROAD JINNAH ROAD BRANCHPESHAWAR, RAWALPINDICANTT.
4.1
INTRODUCTION
Bank Alfalah Jinnah Road Islamia Road Peshawar Cantt. Branch started its operations in October, 1999. In Nine years the banks performance grows, because of its high valuable clients. BAL Islamia Road Peshawar Cantt. Jinnah Road branch became one of the most progressive and dynamic bank and overtook several other well-established competitor banks. This branch is situated in very busy business placemarkets, i.e. Clothes, Spare parts Markets, Restaurants, Main Offices, Super Stores etc. Wwhich brings a great number of deposits to the branch.. Beside the deposits, the number of the transaction of other products of the branch i.e. Consumer finance products, remittances, Foreign Exchange etc, also increases day by day. The branch performs all the functions of a commercial bank. The BAL Islamia Road Peshawar Cantt. Jinnah Road is headed by the Branch Manager. Several staff officers are delegated different responsibilities.
4.2
OBJECTIVES:
The following are the main objectives of the BAL Islamia Road Peshawar Cantt. Jinnah Road Branch for which it is structured: Active mobilization of saving and deposits of the valued clients of BAL Islamia Road Peshawar Cantt. 39
Chapter-24: History of Banking in Pakistan Bank Alfalah Limited Jinnah Islamia Road Branch, Peshawar Cantt. Rawalpindi Speedy transmission and payment of transfers Fast, competitively priced foreign exchange transaction Efficient and rapid services to clients and to the public Finding the niches in the financial markets for investment. The branch tries to actively promoting their products in different areas. The branch has also to ensure suitable training for improvements in staff skills and those to the commercial/corporate clients, technical and most importantly management skills that are encouraged through the bank association with the clients enterprises. 1
4.3
DEPARTMENTALIZATION
Every organization is divided into definite departments. Each department performs different kind of job and requires staff with specialized skill to handle the particular job. This increases the efficiency of workers and makes the job of the employees easier. There are several aspects on which departmentalization in an organization can be based. The division can be done on the basis of functions or product or customers or geographical location. In Bank Alfalah Islamia Road Peshawar Cantt.Jinnah Road Branch, departments are made on the bases of functions performed by the bank. The following are the major departments at branch level of the BAL Jinnah Road Branch: Deposit Department Cash Department Auto Finance & Leasing Department Credits Department 40
Chapter-24: History of Banking in Pakistan Bank Alfalah Limited Jinnah Islamia Road Branch, Peshawar Cantt. Rawalpindi Trade-Finance Division
4.3.1
Deposit Department
Deposits Department is known as the backbone of any bank, deposits department shows the performance of a bank in a particular area. The first step towards the banker customer relationship is the opening of a customers account. Bank Alfalah Jinnah Road Branch provides different types of deposits for various business segments.
a.
Procedure
The officers of the bank open an account at the request of a customer. When a customer visits the BAL Jinnah Road Branch he is asked for two references, one person who is a relative of him, in case of emergency or in case of any information required by the bank. The bank call that person for getting information about his customer i.e. Next of Kin. Next, he is asked who introduced him to BAL Jinnah Road branch as a customer. The introducer must be an account holder of the bank or an official of the bank. After the initial formalities, he is asked to fill the form in the officers presence. The following are the important information in the account opening form which is filled by the customer while opening an account: 3 Nature of Account i.e. individual, joint, business account etc. The title of the account. The name of the account opener along with his fathers in block letters. His occupational information i.e. whether he is salaried or self employed. In case he is serving somewhere the name of his organization otherwise the name and nature of his business. National Identity Card Number. Complete postal/ mailing addresses are required to be filled in the form. 41
Chapter-24: History of Banking in Pakistan Bank Alfalah Limited Jinnah Islamia Road Branch, Peshawar Cantt. Rawalpindi Currency of Account in which the account will be operated. The customer must fill Next of Kin portion. In case of a current account opened in the name of a business the customer is asked to bring in an application on the letter pad of his business and he is requested affix the business named stamp on the application. That stamp will be further used for deposits and withdrawals from the business account.
b.
Photocopy of National Identity Card
A copy of the customers original identity card must be attached to the account opening form and the original shown to the officer.
c.
Specimen Signature Cards
The signatures of the customer are taken in two places on the Signature Specimen Card in order to tally them later at the time when cheques are presented for payment. After that the SS card is scanned. For convenience the officer match the signatures with the computer fitted software. This prevents fraudulent activity in case of any carelessness on the part of the account holder.
d.
Cheque Book Requisition Slip
In order to operate a current and savings account a chequebook is required that is issued by the concerned officer the requisition slip is filled in and the number of leaves that the customer feels he would need is mentioned. The charges for the chequebook are recovered by debiting his account.
e.
Withdrawals 42
Chapter-24: History of Banking in Pakistan Bank Alfalah Limited Jinnah Islamia Road Branch, Peshawar Cantt. Rawalpindi The account holder makes withdrawals after he presents cheques and other payment instruments signed exactly in the fashion on the specimen card up to the limit of the credit balance in his account. The following are the different types of accounts: 1. PLS Saving (Rupee) Accounts 2. Current Rupee Account 3. Term Deposit 4. Royal Profit Savings (Rupee) Accounts 5. Foreign Currency Accounts. 6. Notice Deposit 7. Call Deposit 8. Minors Accounts. 9. Alfalah Kamyab Karobar
43
Other Facilities a. Statement of Account
BAL issue quarterly or at such other interval as it may deem fit to send to the customer statement of account, from which the customer can check the entries made therein. In case of any discrepancy or error in the statement of account, the customer notifies the bank within the 14 days of receipt of the statement of account.
b.
Hold Mail Facility
Upon written request of the customer, the bank in its sole discretion provide a Hold Mail facility whereby the Bank shall retain for periodic collection by the customer, or his duly authorized agent, all communications or statements of account relating to the customers account.
c.
Stop Payment Instruction
BAL, in its absolute discretion, accept stop payment instruction for the customer if a cheque is reported lost or stolen, provided the necessary detail of the lost/stolen cheque are give by the customer on a prescribed form. The customer is further liable to give charges of the stop payment of a lost/stolen cheque.
d.
Closure of Account
If a customer wants to close his account, so on closure of the account, the customer must return to the bank the unused cheque(s), relationship card, ATM card(s) and Credit Card for cancellation. And the bank has the right to close the account without assigning any reason by giving 14 days notice.
4.3.2
Remittances Department
44
Chapter-24: History of Banking in Pakistan Bank Alfalah Limited Jinnah Islamia Road Branch, Peshawar Cantt. Rawalpindi Remittances department is a very important department in every bank. One of the most frequently used banking services is the transfer of funds through the banking channels. Transfer of funds shows the high efficiency and security of the bank. There are two types of the remittances which are as follows: Local Remittances Foreign Remittances
a.
Local Remittances
The transfer of funds within the Country or within the city is called Local Remittances. The following are the different types of the local remittances in BAL Islamia Road Peshawar Cantt.Jinnah Road branch:
i.
Demand Draft (DD)
Demand Draft is drawn by one branch on another branch or on the Head Office of the same bank or vice versa. Demand Draft is basically a bill of exchange, that is, an order to pay money, drawn by one office of a bank upon another office of the same bank for a cum of money payable o order on demand, purports to be issued by or on behalf of the payee, the bank is discharge by payment in due course.4
Features Drawer and drawee bank is the same but branches are different. The amount payable is specified in the draft. It is payable on demand. It is an unconditional written order. The person to whom amount payable is also specified therein. 45
Chapter-24: History of Banking in Pakistan Bank Alfalah Limited Jinnah Islamia Road Branch, Peshawar Cantt. Rawalpindi It is a very useful instrument for settlement of debts. A debtor by purchasing a draft from a bank and sending it to the creditor-can clear the debt owned by him. It is valid for six (6) months i.e. 180 days of it being drawn.
Procedure for Issuing a Demand draft The application form is filled in the beneficiary name, account number and the senders name. The customer deposits the amount of the DD in the branch and after being made, it is given to the customer.
46
Chapter-24: History of Banking in Pakistan Bank Alfalah Limited Jinnah Islamia Road Branch, Peshawar Cantt. Rawalpindi Treatment of Account before and at the time of Payment The transaction is recorded in the DD Issuance section of the BAL Software system. The Head Office Account is credited and the cash/ customers account debited. The DD Advice (Inward Bill for Collection Advice) is sent to the responding branch where it is recorded in the same way as in the issuing branch but in its own name as it is drawn on it. When the DD comes in for collection the DD Payable account is credited and the Head Office Account of the Originating Branch is debited. On receipt the DD is checked and verified and the payees identity is confirmed through his National ID card before payment is made. The DD Payable is debited and cash party account is credited.
ii.
Telegraphic Transfer (TT)
Telegraphic Transfer is a message transmitted via telegraph; fax or telephone after the customer fills in and signs the application form for transferring funds from one place to another. The bank receives the amount to be transferred, charges commission on the transfer. The schedule of charges of Tele-graphic transfer is given in the appendix. The customer is given the receipt and the TT officer sends coded instructions in the form of test numbers to the drawee branch telegraphically. The code is decoded at the drawee branch and payment made to the beneficiary at the time of presentation. The amount of TTs issued in a day are posted in the Branchs online software system by the related officers and then verified by the supervising officers to balance the accounts in which transactions occurred in the day. After the full verification the payment is made to the customer. The following points are scrutinized: The full name of payee along with his address and /or account number The amount in words and figures should tally Currency in which the payment is to be made
47
Chapter-24: History of Banking in Pakistan Bank Alfalah Limited Jinnah Islamia Road Branch, Peshawar Cantt. Rawalpindi Signatures of the remitter/ purchaser should be present in their respective box on the form. iii. The bank/branch where the payees account is being held. Mail Transfer (MT)
When the money is not required immediately, the remittances can also be made by mail transfer. In this method of transferring funds, the sending bank sends instruction in writing by mail to the paying bank for the payment of certain sum money. When MT received by the paying bank, be make payment.
iv.
Pay Order
A pay order is a bankers cheque favouring a named beneficiary. It is made for local transfer of money within the station and payable on demand. It is a non-transferable instrument valid for three month. The issuing bank is discharged by payment in due course. The customer fills a form and deposit the amount, the remittances officer thereafter deduct the charges of the pay order which is listed in the schedule of charges. It is a negotiable instrument. A pay order leaf is typed and crossed if required. After signing by two authorized signatories, it is delivered to the customer. It can be cancelled at the original purchasers request in writing.5
v.
Travellers Cheques
Traveller Cheques are generally issued for the convenience of persons travelling in the Pakistan or abroad. These are issued to applicants without any excise duty or commission. These are the safest way of carrying cash when travelling anywhere in Pakistan. Before issuing, the officer receives an amount equal to the face value of the cheques, and also chare a small commission. The charges of travellers cheques are mentioned in the appendix. The travellers cheques are for fixed amount and are treated as order cheques payable only to the purchaser whose specimen signature 48
Chapter-24: History of Banking in Pakistan Bank Alfalah Limited Jinnah Islamia Road Branch, Peshawar Cantt. Rawalpindi appears on each travellers cheque itself. Bank Alfalah presents Rs.1,000, 5,000 and 10,000 denominations of travellers cheques.6 Features Maximum security features:
Special embossed intaglio printing in the UK, Alfalah security thread and Alfalah watermark. Just some of the advanced features that make TCs secure. These cheques have added security features, including the fact that they are printed on scan proof paper and carry the banks watermark and security thread with a 24/7 security and Tele-verification line. Fully Refundable
Transferable and endorsable
Unlimited validity
No account needed
b. Network of Branches Foreign Remittance
Foreign Remittances can be either inward or outward. In case of Inward Remittances where the authorized dealers purchase foreign exchange received in the form of MTs, DDs, TTs, Travellers Cheques and Foreign Currency Notes it flows in and in case of Outward Remittances where the authorized dealers sell foreign exchange by issuing the above mentioned instruments, it flows out. 49
c.
Instruments of Inward Remittances
The following are the different Instruments used for inward Remittances.:7 Notes. d. e. Export proceeds whether under Letters of credit or without Letter of credit. Instruments of Outward Remittances Foreign Demand Drafts issued by BAL, Jinnah Road Branch. Foreign Outward Bill for Collection (FOBC) Foreign Telegraphic Transfers/ Money transfers Travellers Cheques . Corresponding Banks for Remittance Foreign Currency Cheques and Foreign Demand Drafts deposited by BALs customers for collection. Foreign Money Transfers or Foreign Telegraphic transfers received from foreign banks to the credit of its customers accounts. Rupees, DDs, MTs, and TTs drawn by one of the banks correspondents/ branches on their Non-Resident Rupee Account maintained with the branch. Encashment of Foreign Currency Travellers cheques and Foreign Currency
Since Bank Alfalah does not have branches in all countries, it has correspondence with the following banks for remittance.8 US dollar ($) Citi Bank, American Express, ABN Amro, Banker trust and Habib Bank New York. 50 Pond Sterling Habib Bank London
Chapter-24: History of Banking in Pakistan Bank Alfalah Limited Jinnah Islamia Road Branch, Peshawar Cantt. Rawalpindi Euro Commerce Bank Frankfurt Deutch Mark (DEM) National Bank of Pakistan Frankfurt
f.
Money Gram
Money gram is a world wide setup. Money gram is a machine setup, through which a customer deposit money. The customer fills a form and deposit the money, the banker gives him a message. The customer give that message to the other party either he is in the country or outside the country. He visits that bank which is listed in the money gram setup. He gives that message and takes his money. It is a type of international online facility. Bank Alfalah limited, in collaboration with Money Gram, offers remittance service to Pakistan. Money Gram is person to person money transfer service that allows consumers to receive money in just a few minutes.10
Features Secure and reliable:
An extensive network of quality agents, linked by computer, will transfer your money safely and ensure that it is handled with care and without delay. Thousands of people already use the Money Gram service all over the world. It is trusted for its reliability and security. Convenient and fast:
Money Gram is available in over 154 countries and in more than 40,000 locations worldwide. With Money Gram money is transferred immediately and usually arrives at the receiving end within 10 minutes while other services can take days or weeks. There are no complicated procedures and do not need a bank account or a credit card. 51
Chapter-24: History of Banking in Pakistan Bank Alfalah Limited Jinnah Islamia Road Branch, Peshawar Cantt. Rawalpindi Free message service (for senders): There is also an added personal touch can receive a 10 word message from the sender with every transaction at no extra cost. 4.3.3 Cash Department
Banks receive cash from their customers in the form of deposits and invest it in other profitable businesses. Therefore, it is considered as inventory and requires efficient management. At Bank Alfalah Limited Islamia Road Peshawar Cantt. Jinnah Road Branch the following activities are noted in the Cash Department
a.
The Cash Counter
The cash counter is occupied by five tellers which is headed by a head cashier they pay and receive cash from the customers after carefully checking the instruments presented for payment and cash presented for depositing or paying. Besides, there is a officer responsible for issuing RTCs, DDs, TTs, MTs, Pay Orders etc. and a senior range I officer who supervises the transactions and gives necessary advice in case of any doubtful activity. After closing of the business hours, the tellers verifies the amount of cash , physically, which is cross verified by the manager operations and tailed with the general ledger account. Tellers take extreme are to detect counter fag notes and if such notes are detected, the matter is referred to the manger operations.
b.
Receipt and Payment of Cash
For cash collection a cash deposit slip is filled by the customers, which include the branch name, branch code, title of account, the date, amount which is deposited in the account and the signatures of the depositor. The senior officer maintains with himself a Cash Received Stamp that is affixed on the paying in slip after the cashier signs it. Cash or any other instrument presented for depositing in the customers or a 52
Chapter-24: History of Banking in Pakistan Bank Alfalah Limited Jinnah Islamia Road Branch, Peshawar Cantt. Rawalpindi beneficiarys account is accepted and the account credited only after the paying in slip has been signed and countersigned by the officer. For payment customer present cheque over the counter, the cheque should not be crossed. Crossed cheque payment is made after the clearing. Before the payment the cheque is verified by the officer. It is verified for staling, post dated, payees name, crossing, signatures, amount both in words and in figures and authentication of alterations. If there is any ambiguity in the cheque so the cheque is than returned. After making the full verification, the cheque is posted, supervised and cancelled by the authorized officers before the cashier pays cash to the presenter of the instrument. c. Counting Cash
The authorized officer checks and counts cash in the afternoon after the transactions by the customers have been closed for the day. The number of stitched bundles and sealed bags containing coins are properly checked and the results tallied with the recorded balance in the cash register.
4.3.4
Clearing Department
Banks collect cheques for their customers that are drawn on other banks. This function of clearing its customers cheques by a bank is performed for settling payments through the clearing houses in the State Bank of Pakistan. In cities with no SBP coverage, the clearing is than supervised by National Bank of Pakistan. Types of Clearing There are two types of clearing
a.
Inward Clearing
The process where instruments drawn payable on Bank Alfalah Islamia Road Peshawar Cantt.Jinnah Road Branch are deposited by the holder with other banks/ branch and presented for payment.
53
b.
Outward Clearing
The process where the instrument drawn payable on some other bank/ branches is deposited for collection with Bank Alfalah Islamia Road Peshawar Cantt.Jinnah Road Branch.
c.
Process of Clearing
A clearing house is a place where clearing officers of all scheduled banks get together to settle payments and receipt of cheques drawn on each other. Cheques received at BAL Islamia Road Peshawar Cantt. Jinnah Road Branch are sorted and entered in the outward registers by the officers. Than a copy of the clearing schedule prepared sent to the clearing house supervised by the State Bank of Pakistan in all the major cities of Pakistan and in the smaller ones by the National Bank of Pakistan as an agent of the central bank. In the Clearing House each bank receives from other banks cheques drawn upon it and delivers to other bank cheques drawn upon them. The net difference is settled by Dr, Cr. To their account with the supervising bank.10
4.3.5
Credit Department
Commercial banks are so named because they specialize in loans to commercial and industrial businesses. Banks make three types of loans: commercial and industrial loans, consumer loans, and mortgage loans. Commercial and industrial loans are loans to businesses or industrial firms. These are primarily short-term working capital loans (loans to finance the purchase of material or labour) or transaction or longer-term loans (loans to purchase machines and equipment).
54
Chapter-24: History of Banking in Pakistan Bank Alfalah Limited Jinnah Islamia Road Branch, Peshawar Cantt. Rawalpindi Whether a bank will make a loan or not depends on the credit and loan history of the borrower, the borrowers ability to make scheduled loan payments, the amount of capital the borrower has invested in the business, the condition of the economy, and the value of the collateral the borrower pledges to give the bank if the loan payments are not made.11 a. Running Finance
This is the most common form of bank advances. When a borrower requires temporary accommodation, the BAL allows withdrawals on his account excess of the balance with the borrowing customer have in credit, and a running finance thus occurs. This accommodation is generally allowed against collateral securities to reduce risk of the bank. The borrowing customer is in an advantageous poison in running finance, because he has to pay service charges only on the balance outstanding against him. In case of default the bank has the right to sell off the collateral and recover the amount outstanding.
b.
Term Finance
This is very common form of borrowing by commercial and industrial concerns, and it is made available either against pledge or hypothecation of goods, produce or merchandise. In term finance, a borrower is allowed to borrow money from the bank up to a certain limit, either at once or as and when required. The mark-up is only given on the amount actually utilized. It is a short term, self-liquidating commercial loan. It is given for one year and renewed after one year.
c.
Loans
When a customer borrows a fixed amount repayable either in periodic instalments or in lump sum at a fixed future time, it is called a loan. BAL Islamia Road Peshawar
55
Chapter-24: History of Banking in Pakistan Bank Alfalah Limited Jinnah Islamia Road Branch, Peshawar Cantt. Rawalpindi Cantt. Jinnah Road Branch allows loans to their customers. The bank first takes collateral securities against the loan. Bank Loans are classified into: Security Maturity Purpose
i.
Loan by Security
This type of loans is secured by security. The main types of securities pledged with the bank are as follows: Equipment Real Estate Ware House Receipt Stock Bonds
ii.
Loan by Maturity
This type of loans is classified according to maturities, which are as follows: Short term Loans (payable within one year or on short notice) Intermediate term Loans (It is paid in instalments, it is for one to five years) Long term Loans ( This type of loans intermediate loans, it can be paid before maturity) iii. Loan by Purpose is for longer period than the
A borrower can get the loan from BAL for various purposes; BAL Jinnah Road Branch advances loans for the following purposes to its customers: 56
Chapter-24: History of Banking in Pakistan Bank Alfalah Limited Jinnah Islamia Road Branch, Peshawar Cantt. Rawalpindi Commercial Loans Industrial Loans Personal Loans
d.
Documents Required for Loan Advancement
The following documents are required for the Loan advancement. It give a full proof both the bank and to the party. The documents are as follows: CIB Report Permanent information memo Balance sheet of the company, if the borrowing is made in the name of the company. All the addresses and information of stockholder is provided to the bank. Proposed latter from the company for the required facility Article of Association Memorandum of Association
i.
CIB Report
Credit information Bureau (CIB) report is a very important document. CIB is a department of SBP. CIB department keep all the information of the account holders of every bank both private and public bank. The application for the loan is sent to the CIB department. In the CIB department they check the account holder all details
57
Chapter-24: History of Banking in Pakistan Bank Alfalah Limited Jinnah Islamia Road Branch, Peshawar Cantt. Rawalpindi about any other loan if any, or defaults. If that information is clear so the Bank advances loan to his customer.
4.3.6 a.
Auto Finance & Leasing Department Car Finance
Alfalah car scheme enables customers to own a car at easily affordable and flexible installments with minimum down payment and insurance.13 Benefits and Features Banks Tenor period ranging from 1 to 5 years Minimum processing charges i.e Rs.3000/- payable once Financing of all brand new locally assembled vehicles. Financing limit ranging b/w Rs.200,000/- to Rs.2000,000/Hypothecation of vehicle in the name of the Customer. Quickest processing No hidden charges Minimum down payment Complete repayment at any point of time Balance transfer facility {BTF} for existing as well as new clients from other
58
Chapter-24: History of Banking in Pakistan Bank Alfalah Limited Jinnah Islamia Road Branch, Peshawar Cantt. Rawalpindi b. Corporate & Individual Car Leasing
BALs introduced car leasing facility for individuals and corporate sector has set new dimensions for the product. Now customers are provided with the option of either to get the vehicle leased or financed.14
Features Renowned and reliable Insurance companies are offering the competitive rates of Insurance. Customer can pay year insurance premium in advance {at the time of down payment} and remaining in the subsequent equal monthly installment. Offering lowest rate of markup of 17%, {per annum}. Easily affordable installments on monthly basis. Hypothecation of vehicle in the name of the Bank Alfalah Limited. BAL Acting as a co borrower, will enables customers family members {spouse, children- 18 year and above} to avail the financing facility and can get the car registered in their names as well.
Documents required Two passport size photographs. Copy of National ID card. Bank statement for the last six months. Salary certificate in case of salaried individual}. 59
Chapter-24: History of Banking in Pakistan Bank Alfalah Limited Jinnah Islamia Road Branch, Peshawar Cantt. Rawalpindi Business proof for self employed and business people}. National Tax Number (NTN) Co borrowers NIC copy {if it is a co borrower case}.
60
Eligibility Pakistani National Identity Card holder. Over 20 years of age (Maximum 60 years in case of salaried and 62 in case of a business person at the time of maturity of the loan). Salaried, Businessman or self employed.
4.3.7
Home Finance Department
This department is established on September 01, 2003, provides a wider range of Home Finance tailor-made plans, designed specially to meet customers need at a very competitive rate. At present, Bank Alfalah is the only Bank in the market, which offers a house finance scheme for non-resident Pakistani customers based in the UAE besides Pakistani residents. Housing finance is available from Rs.1 million to Rs.50 million to purchase, renovate or construct a house/apartment. Important points are as under: 15
Payment period ranges from 3 to 20 years. Owner only invest 30% of the value of property. Loan can be repaid before maturity without any penalty. Borrowers age must be between 25 to 60 years. Salaried persons, businessmen and self-employed people are eligible. Financing is also available for purchase of residential land. Complete freedom to move between floating and fixed rates. Financing available to resident & non-resident Pakistanis. 61
Chapter-24: History of Banking in Pakistan Bank Alfalah Limited Jinnah Islamia Road Branch, Peshawar Cantt. Rawalpindi Minimum amount will be Rs.1 million & maximum of Rs.50 million. Mark-up option available for floating & fixed rates.
62
Chapter-24: History of Banking in Pakistan Bank Alfalah Limited Jinnah Islamia Road Branch, Peshawar Cantt. Rawalpindi The Eligibility Criteria Pakistani Nationality. Age should between 25 and 60 years. Continuous employment in a permanent position for 2 years or more. 3 years (or more) of business or professional experience. Gross annual income is Rs.240, 000/- or more [spouses income (up to 50%) can also be combined]. Customer has been a Bank Alfalah borrower for past one year with clean payment record.
Documents Required The following documents are required to be submitted by an applicant with the completed application.
For Salaried Person: 2 passport size photographs. Copy of NIC. Copies of last Salary / Pay Slip duly attested by the HR department. Salary Certificate (original) from the employer, showing the gross salary and deductions. Employment verification form from the employer. 63
Chapter-24: History of Banking in Pakistan Bank Alfalah Limited Jinnah Islamia Road Branch, Peshawar Cantt. Rawalpindi For Self-Employed & Business person 2 passport size photographs. Copy of NIC. Certified Copy of last Six Months bank Statement. Copy of current professional association membership / trade body membership certificate (if Applicable). Copy of Latest Form 29 duly attested by the company secretary Letter from company secretary confirming the status and share-holding.
Mark-up rates For SVR (Standard Variable Rate) option:
SBP discount rate + 1%, currently 17% + 1% = 18% Salaried For 17.00% fixed per rate option: Annum
Self-employed Professionals & Businessmen and Overseas Pakistani (both salaried and self-employed) 17.00% Per Annum 4.3.8 Foreign Exchange Department
Indo-Pakistan subcontinent has been an important region for world trade since centuries and the people living in this part of the world had long been selling and buying goods and investing money in various currencies in the course of trade with almost all the countries of the world. The expansion of trade in recent decades has been paralleled by the growth of multinational banking. Banks have historically financed international trade, but a notable recent development has been the expansion of branches and subsidiaries that 64
Chapter-24: History of Banking in Pakistan Bank Alfalah Limited Jinnah Islamia Road Branch, Peshawar Cantt. Rawalpindi are physically located abroad, as well as the increased volume of loans to foreign borrowers. Foreign Exchange Policy and its operations in Pakistan are formulated and regulated in accordance with the provisions of the Foreign Exchange Regulation Act, 1947 with the object to regulate, in the economic and financial interest of Pakistan, certain payments, dealings in foreign exchange, securities, import/ export of currency and bullion. The State Bank of Pakistan can authorize any person upon application to deal in foreign exchange openly or with some restrictions.16 BAL Jinnah Road Branch Foreign Exchange Department deals almost in all types of foreign banking transactions such as: Forex Accounts Collection Services Forex Remittances Guarantees and Indemnities Letters of Credit Documentary Bills for Collection
a.
International Trade
Banks play a very important role in settlement of rights and claims that arises as a result in the contest of international trade between sellers and buyers. There are four methods available through which international trade debts are settled Payment Against Documents Documentary Credits (Revocable, Irrevocable and Confirmed L/Cs)
b.
Authorized Rates for Foreign Exchange Transactions
State Bank announces the rate for foreign exchange transactions. The authorized dealers are given general permission to determine their own rates of exchange, both 65
Chapter-24: History of Banking in Pakistan Bank Alfalah Limited Jinnah Islamia Road Branch, Peshawar Cantt. Rawalpindi for spot and forward transactions for the public subject to the condition that the margin between the buying and selling rate should not exceed 50 paisa per US Dollar or its equivalent in other currencies. This condition does not apply to inter bank transactions.
c.
Collection Services
BAL provides collection services on foreign bills for collection to its clients such as Foreign Currency Cheques, Travelers Cheques, and Foreign Demand drafts deposited by its customers for its collection.
d.
Payment against Documents (PAD)
Payment against Documents is created at retirement of L/C or Acceptance. It is a temporary loan to the importer and is adjusted as soon as the payment is received and documents are delivered to importer. At the lodgments are delivered to importer. At the lodgment date the L/C amount is converted at prevailing or booked rate.
e.
Documentary Credits (Letter of Credit)
International trade involves numerous factors such as payment for imports in the exporters country; shipment of goods within the limitation prescribed under Trade Control regulations, and difficulties of enforcing legal rights in a foreign country, etc. therefore, with a view to overcome these impediments a system has been enforced in order to deal with the above and other related factors so as to protect importers and exporters of goods against unwanted risks. The system is represented by Letter of Credit and their operation is controlled under the articles of the Uniform Customs and Practice for Documentary Credits as adopted by the Council of the International Chamber of Commerce and enforce with effect from January, 1994 in the Brochure No 500.17 66
i.
Definition of Letter of Credit:
The Article 2 defines a Letter of Credit in the following terms: Any arrangement, however named or described, whereby a bank (issuing bank), acting at the request and on the instruction of a customer (the applicant for the credit), or on its own behalf.
ii.
Advantages of Documentary Credit
Documentary Credits serve four purposes They are the classic instruments for financing purchases of foreign goods and foreign equipment Any exporter may obtain necessary finance immediately on shipment under a letter of credit. They are an effective way of bringing an element of confidence and security into transactions for the commercial parties They constitute a routine instrument for exporters to secure payment, provided they are not burdened by needlessly complicated clauses and conditions
iii.
Types of Credit
There are various types of documentary credits and its commercial value depends on its type but the two main classifications are: 18
67
Chapter-24: History of Banking in Pakistan Bank Alfalah Limited Jinnah Islamia Road Branch, Peshawar Cantt. Rawalpindi Revocable Credit It can be amended or cancelled at any time without prior warning or notification to the seller. It therefore, involves risk as the credit may be amended or cancelled while the goods are in transit and before the documents are presented or although presented, before payment has been made. The seller would then face the problem of obtaining payment directly from the buyer. On the other hand it gives the buyer maximum flexibility, as it can be amended or cancelled without prior notice to the seller up to the moment of payment by the bank at which the issuing bank has made the credit available.
Irrevocable Credit This type can be amended or cancelled only with the agreement of all parties thereto. It gives the seller greater assurance of payment, but he remains dependent on an undertaking of a foreign bank. It is lesser flexible as the credit can be only amended or cancelled if all parties agree.
Confirmed Irrevocable Credit As there are often two banks involved, the issuing bank and the advising bank, the buyer can ask for an irrevocable credit to be confirmed by the advising bank. If the advising bank agrees, the irrevocable credit becomes a confirmed irrevocable credit. It gives the seller a double assurance of payment, since a bank in the sellers country has added its own undertaking to that of the issuing bank. Since it represents an additional requirement on the part of the seller, it is more costly.
Sight Letter of Credit
68
Chapter-24: History of Banking in Pakistan Bank Alfalah Limited Jinnah Islamia Road Branch, Peshawar Cantt. Rawalpindi In this type of Credit, when the document is received by the importer, after the receiving of document he makes payment to the other party. Sight Letter of Credit is also called PD (Payment against documents).
iv.
Parties to a Letter of Credit
Usually the following five parties are involved in a letter of credit: 19 pay. The reimbursing Bank is the correspondent bank of the issuing bank for reimbursing funds to the negotiating bank. It only provides the services. The seller or exporter who is the beneficiary of the credit. The buyer who is the importer and the account party, this party request the bank for opening of Letter of Credit. The bank issuing the Letter of Credit or the opener bank i.e. BAL The advising bank or the correspondent in the exporters country, which advises the exporter of the opening of a Letter of credit The negotiating bank to which the beneficiary presents his documents for payment. The confirming Bank adds it conformation (for a fee), thereby guaranteeing that it will pay if the terms of L/C met irrespective of the opening banks ability to
v.
Credit Application
The instruction to be given by an applicant (customer) to BAL covers the following The full and correct name and address of the beneficiary (seller) 69
Chapter-24: History of Banking in Pakistan Bank Alfalah Limited Jinnah Islamia Road Branch, Peshawar Cantt. Rawalpindi any Details of the documents required The place of shipment or dispatch or taking in charge and the destination Whether the transfer of the goods from one vessel to the other, or from one mode of transport to another i.e. transshipment is allowed or not Whether partial shipments are prohibited or it is a transshipment The latest date for shipment, dispatch or taking in charge (if applicable) The period of time after the date of issuance, for the bills of lading or other shipping documents within which they must be presented for payment, acceptance or negotiation The date and place of expiry of the credit How the credit is to be advised, i.e., by mail, or by cable, telegram or telex The amount of the credit Whether the credit is to be available by payment, acceptance or negotiation The party on who drafts, if any are to be drawn and the tenor of such drafts A brief description of the goods, including details of quantity and unit price, if
vi.
Chick List for Applicant
Category of import----to understand and describe category example commercial sector, industrial sector and public sector and sub-field of interest to which credit will relate.
The importing item must be a regulated one. National Tax Number of applicant. National identity card of the applicant. 70
Chapter-24: History of Banking in Pakistan Bank Alfalah Limited Jinnah Islamia Road Branch, Peshawar Cantt. Rawalpindi Client of the issuing bank ----must have current account. Client must have sanctioned limit for opening letter of credit. Application form of credit Is the Performa invoice/indent/purchase order which shows * Description of goods * Specification of goods * Unit price of goods * Total price of goods * Terms of sales of goods
Form I in triplicate----is forwarded to SBP for reporting of sale of foreign exchange.
Draft or Bill of Exchange, which include * Amount of draft is checked * Tenure of L/C * Name of the importer and account number * Date of draft not later than validity date of L/C and date of negotiation * The period between date of draft and date of shipment on Bill of Lading should not exceed 21 days. * Draft should be signed by the beneficiary and drawn on opener
Insurance cover note/ Marine insurance policy must be issued in the joint name of the issuing bank and the importer.
Amount in the insurance cover note must be equal to L/C amount. 71
Chapter-24: History of Banking in Pakistan Bank Alfalah Limited Jinnah Islamia Road Branch, Peshawar Cantt. Rawalpindi date. Marks if asked to be put on packages must be clearly defined Transport Documents (Bill of Lading for import of goods on ship, Airway Bill for import Air Cargo, or truck receipt if the import is by road) Packing List The date on the insurance policy must not be later then that of the shipment
vii. i)
Issuing a Credit The buyer and the seller conclude a sales contract providing for payment by Letter of Credit.
ii)
The buyer instructs BAL, the issuing bank, to issue a credit in favour of the seller, the beneficiary.
iii)
BAL asks Bank X, usually in the sellers country to advise or confirm the credit.
iv)
The advising or confirming bank informs the seller that the credit has been issued.
v)
The seller then sends the documents evidencing the shipment to the bank where the credit is available (this may be the issuing or the confirming bank or any other named in the credit as the paying, accepting or negotiating bank). Suppose, the credit is available at BAL.
vi)
As soon as the seller receives the credit and is satisfied that he can meet its terms and conditions, he is in position to load the goods and dispatch them.
vii)
BAL checks the documents against the credit. If they meet the requirements of the credit, it either
72
Chapter-24: History of Banking in Pakistan Bank Alfalah Limited Jinnah Islamia Road Branch, Peshawar Cantt. Rawalpindi eEffects payment in accordance with the terms of the credit, either to the seller if he has sent the documents directly to BAL or to the bank that has made funds available to him in anticipation rReimburses in the pre-agreed manner the confirming bank or any bank that has paid, accepted or negotiated under the credit After checking the documents by BAL, they are released to the buyer upon payment of the amount due, or upon other terms agreed between him and the bank. The applicant sends the transport document to the carrier who will then proceed to deliver the goods.
viii.
Settlement
The following are the methods for settlement of a Letter of Credits transaction:
By Payment/Sight/DP In this method of the settlement the seller sends the documents to BAL evidencing the shipment. After checking that they meet the credit requirements, BAL makes payment.
By Acceptance/Usance The seller sends the documents to BAL evidencing the shipment accompanied by a draft drawn on it at the specified tenor. After checking that they meet the credit requirements, BAL accepts the draft and returns it to the seller. By accepting, the bank signifies its commitment to pay the face value at maturity. In this method bank
73
Chapter-24: History of Banking in Pakistan Bank Alfalah Limited Jinnah Islamia Road Branch, Peshawar Cantt. Rawalpindi take some collateral securities because title document are released just against acceptance.
74
Chapter-25: History of Banking in Pakistan inancial Analysis of BAL
CHAPTER - 5
75
FINANCIAL ANALYSIS OF BAL

Analysis of an organization discovers its potential areas of improvement and evaluates its performance of the past period. It identifies the possible solutions to problems faced inside the bank and gives an insight of the opportunities which can be exploited to reap benefits.
3 YEARS BALANCE SHEET OF BANK ALFALAH LIMITED

20078 Assets Cash Balance with other banks Lending to financial Institutions Short Term Investments Short Term Advances Other Assets Total Current Assets Long Term Advances Long Term Investment Operating Fixed Assets Deferred Tax Assets Total Long Term Assets Total Assets Liabilities + Equity Bills Payable Borrowing from F. Institutions Deposits (Current) Other Liabilities Total Current Liabilities Fixed Deposits 27,859,360 12, 731, 95 12,456,653 26, 328, 71 86,368,895 5,633,051 171,378,626 63,630,430 30,173,495 10,502,990 104,306,915 275,685,541 3,091,135 8,394,130 61,872,255 7,305,496 80,663,016 177,637,136 29,436,378 18,380,738 3,452,059 51,850,352 107,640,063 6,013,097 216,772,687 63,558,929 36,642,781 11,922,324 112,124,034 328,895,121 4,138,243 21,230,697 71,014,379 9,531,860 105,915,179 202,159,462 36,261,367 16,828,191 7,360,701 34,216,550 116,417,736 6,551,186 217,635,731 63,644,861 37,417,427 12,983,081 114,045,369 331,681,099 3,564,872 8,378,888 75,116,253 10,634,357 97,694,370 212,654,756 76 20089 Jun-092010
Chapter-25: History of Banking in Pakistan inancial Analysis of BAL Sub-ordinate Loans Deferred Tax Liabilities Total Long Term Liabilities Total Debts Share Capital Reserves Unappropriated Profit Revaluation Surplus Shareholders Equity Total Liabilities 3,222,106 1,921,338 182,780,580 263,443,596 5,000,000 2,749,53 4,851,84 1,669,340 14,270,713 275685,541 3,220,858 1,379,809 206,760,129 312,675,308 6,500,000 2,414,833 2,823,072 2,453,171 14,191,076 328,895,121 2,896,013 1,268,429 216,819,198 314,513,568 7,995,000 2,950,541 3,849,303 2,372,687 17,167,531 331,681,099
3 YEARS PROFIT & LOSS ACCOUNT OF BANK ALFALAH LIMITED

20078 Mark-up/ return/ interest earned 21,191,470 Mark-up/ Return/ Interest expensed (15,232,886 ) Gross Profit Provision against advances Bad debts written off directly
5,958,584
20089
25,783,871 (16,620,963 ) 9,162,908 (2,370,867) (5,844)
200910
13,761,577 (8,447,955) 5,313,622 (498,464) (10,440) (3,926) (512830) 4,800,792 2,899,299 7,700,091 4,844,922 2,784 64,229 4,911,935 2,788,156 (969,193) 1,818,963
(697,690) (1,537) Provision for diminution in value of investments
Total Bad Debts (Net mark-up, interest income after provision) Non-mark up! Interest income Total Income Administrative expenses
Provision against off-balance sheet obligations
(699,227) 5,259,357 3,224,639 8,483,996 5,874,745 43,387 5,918,051 2,565,945 803,254 1,762,691 1,886,845
(2,376,711) 6,786,197 6,038,466 12,824,663 8,272,587 6,959 9,565 8,289,111 4,535,552 1,405,323 3,130,229 2,823,072
Other Expenses Total non-mark up! interest expenses Profit Before Taxation Taxation Profit After Taxation
Unappropriated profit brought forward
77

Transferred from surplus on revaluation of fixed assets - net of tax Profit available for appropriation
26,074
3,675,610
24,585
5,977,886
5.1
HORIZONTAL ANALYSIS
BAL today represents a bank that has grown with time and experience. At present it is a major financial institution in scope and size. It symbolizes a fully grown tree, ever green, strong and firmly rooted.
5.1.1
TOTAL ASSETS
The Total Assets of BAL are on increase. In 20078, it was Rs. 275,685,541, in 20089 it is increase to Rs. 328,895,121, and in June 200910 it is increase to Rs 331,681,099. This increase is because of the increase in the products of the BAL and increase in the branch network as well.
78
Chapter-25: History of Banking in Pakistan inancial Analysis of BAL Graph 5.1

400,000,000 300,000,000
Rupees
Rupees
200,000,000 100,000,000 0 2008 2009

Year
2010
Years
Source: Bank Alfalah Limited, (200910). Half Year Report, Karachi.
5.1.2
NET PROFIT
The Earning after Taxation (EAT) till June 200910 is Rs. 1,818,963 as compares to Rs. 3,130,229 & 1,762,691 in 20078 & 20089 respectively. Increase in the EAT figures is because of the increase in the deposits & newly introduced products of the bank and ultimately an increase in the Revenue, that effect the Profit after tax of the bank very affectively.
Graph 5.2
79

3500000 3000000 2500000 Rupees 2000000 1500000 1000000 500000 0 2008 2009 Year 2010
Rupees
Years
80
Chapter-25: History of Banking in Pakistan inancial Analysis of BAL 5.1.3 TOTAL INCOME
BALs Total income is increasing but the expenses also increase as the income increases. In 20078 the total income of BAL was Rs. 8,483,996 , in 20089 it increased to Rs. 12,824,663, and in June 200910 it is Rs. 7,700,091.
Graph 5.3
14000000 12000000 10000000 Rupees 8000000 6000000 4000000 2000000 0 2008 2009 Year 2010
Rupees
Years Source: Bank Alfalah Limited, (200910). Half Year Report, Karachi. 5.1.4 OPERATING EXPENSES
The operating expenses of BAL increases day by day with the increase in the Total income of the Bank . In 20078 the operating Exp of BAL was Rs. 5,918,051 , 8,289,111, in 20089 it increased to Rs. 8,289,111, and in June 200910 it is Rs. 4,911,935. Graph 5.4
81

9000000 8000000 7000000 6000000 5000000 4000000 3000000 2000000 1000000 0 2008 2009 Year 2010
Rupees
Rupees
Years Source: Bank Alfalah Limited, (200910). Half Year Report, Karachi.
5.1.5
DEPOSITS
Deposits with the Bank at June 200910 stood at Rs. 287,771,009 as compared to Rs. 273,173,841 & 239,509,391 in 20089 & 20078 respectively. It shows an increase of 105% & 120% as compared to 20089 & 20078 respectively. It is clear that he depositors have complete faith in BAL, which is evident from the fact that BAL launch different deposits accounts for its valued customers.
Graph 5.5
82

300000000 250000000
Rupees 150000000 100000000 50000000 0 2008 2009 Year 2010
5.1.6
ADVANCES
Total advances at June 200910 are Rs. 180,062,597 as compared to Rs. 171,198,992 & Rs. 149,999,325 Mmillions in 20089 & 20078 respectively. Showing a rise of 105% & 120% as compared to 20089 and 20078 respectively. The BAL introduces new products for its customer and to the financial institutions, from which the advances rate of BAL increases every year.
Rupees
200000000
83
Rupees
200000000 180000000 160000000 140000000 120000000 Rupees 100000000 80000000 60000000 40000000 20000000 0
2008
2009 Year
2010
Years Source: Bank Alfalah Limited, (200910). Half Year Report, Karachi. 5.1.7 INVESTMENTS
Investments of BAL have also been slightly increased by 80% & 127% as compared to 20089 & 20078 respectively. Till June 200910 the Investment is Rs. 71,633,976 as compared to Rs. 88,491,564 & Rs. 56,502,210 in 20089 and 20078 annual report. It is because of the management of BAL want to boost up the economy by investing in all segments of the economy. BAL tries to reach every segment of the economy to make more and more investment.
Graph 5.7
84

90000000 80000000 70000000 60000000 50000000 40000000 30000000 20000000 10000000 0
Rupees Rupees
2008
2009 Year
2010
Years
5.1.8
HUMAN RESOURCES
To induct fresh blood in the bank and cater for future needs, a new batch of management trainees has been selected strictly on merit. After through training these officers have been inducted in various divisions and branches. Attention is paid to upgrade operational and managerial skills of staff and a number of professional courses are conducted at BAL staff and Training Institutes during the year 200890910. The management has also continued the program of hiring of some senior level Banking Executives from the market, whenever necessary.
85
Chapter-25: History of Banking in Pakistan inancial Analysis of BAL 5.1.9 AUTOMATION
The all branches of BAL are fully computerized branches. A Bank Smart program was put into place throw which all branches are online covering all the four provinces thereby providing the ATM network true national coverage and maintaining the leadership in this service.
5.1.10 FOREIGN OPERATIONS The banks foreign operations are now started in Bangladesh, Afghanistan and Sari lLanka and in India and will continue to remain profitable. BAL operations will go internationally to many countries and expend to all over the world with the passage of time.
5.1.11 CREDIT RATING PACRA, a premier rating agency of the country, has rated the Bank low expectation of credit risk, strong capacity for the short term, respectively. 'AA, Entity
Rating for Long Term and Al + for the Short Term. These ratings denote a very timely payment of financial in commitments in the long term and by highest capacity for timely repayment
5.1.12 BRANCHES OF THE BAL BAL has increased its branch network to 321 till now during the year including 52 Islamic banking branches. Pursuant to the Islamic banking initiative for the implementation of Islamic banking in Pakistan . BAL has the honor of being one of the first few banks which has started Islamic banking. A separate banking division has been established and internationally as well.2 52 branches of Islamic banking have commenced their operations. The BAL tries to open the branches in every city of Pakistan and
86
5.1.13 EMPLOYMENT POSITION The number of employees by the end of 200810 has also been increased to 9751 in against of 7371 in 20079. This is all of increasing in the branch network of BAL, and BAL tries to give opportunities to fresh blood.3
5.2
FINANCIAL ANALYSIS
Financial analysis of the organization involves the evaluation of the financial performance as depicted in the financial statements of the organization. The BAL provides this information in the shape of its annual report for every financial year containing financial as well as non-financial information. To improve the quality of decision making, proper analysis of these statements helps a lot. Financial statements analysis helps in determining the financial conditions at any particular point in time and effectiveness of operations of a firm during a specific period. The various stakeholders of business are all interested in the analysis of financial statements. But the focus of interest of all is not the same. Financial statements are prepared primarily for decision-making. They play a dominant role in setting the framework of managerial decisions. But the information in the financial statements is not an end in itself as no meaningful conclusions can be drawn from these statements alone. However the information provided in the financial statements is of immense use in making decisions through analysis and interpretation of financial statements. Financial statement analysis is the process of identifying of financial strengths and weaknesses of the firm by properly establishing relationship between the items of the balance sheet and the profit and loss account.4 5.2.1 Financial Ratio Analysis 87
Ratio is defined as the quotient of two mathematical expressions and hence in financial ratio analysis a ratio is used as benchmark for evaluating the financial position and performance of a firm. Financial Ratios are used to weigh and evaluate the operating performance of a firm. They provide a meaningful comparison of a company to its industry. These ratios can be used to measure profitability, asset utilization, liquidity and debt utilization. The major analysis in this regard is Index Analysis & Common Size. In these analyses, the performance of a firm is seen over a number of years, because analysis of only a single years figures as it is done in case of Ratio Analysis may not present an accurate picture of the firm.6 The following are the different Financial Ratios of Bank Alfalah Limited.
Table 5.2.1 Financial ratios Table Years Net Profit Margin Gross Profit Margin Return on Investment Return on Equity Total Asset Turnover Fixed Asset Turnover Current Asset Turnover Current Ratio Cash Ratio Debt to Equity Ratio Debt to Total Assets Interest Coverage Ratio Advances to Deposits Investment to Deposits Op. Expenditure to Tot. Income Interest Earned to Advances 20078 7.2% 70% 1.4% 14.39% 0.42 0.50 0.12 2.12 0.10 18.32 0.9555 12.11 62.63 0.24 1.12 0.14 20089 9.8% 71% 1.3% 19.29% 0.41 0.68 0.11 2.04 0.09 19.27 0.9506 17.59 62.67 0.32 1.22 0.15 9-Jun2010 23% 69% 2.5% 2.5% 0.27 0.36 0.13 1.04 0.11 21.51 1.04 10.19 62.69 0.23 1.02 0.07 88
Chapter-25: History of Banking in Pakistan inancial Analysis of BAL Interest Expense to Deposits Earning Per Share Years Net Profit Margin Gross Profit Margin Return on Investment Return on Equity Total Asset Turnover Fixed Asset Turnover Current Asset Turnover Current Ratio Cash Ratio Debt to Equity Ratio Debt to Total Assets Interest Coverage Ratio Advances to Deposits Investment to Deposits Op. Expenditure to Tot. Income Interest Earned to Advances Interest Expense to Deposits Earning Per Share 0.63 Rs.2.91 2007 7.2% 70% 1.4% 14.39% 0.42 0.50 0.12 2.12 0.10 18.32 0.9555 12.11 62.63 0.24 1.12 0.14 0.63 Rs.2.91 0.60 Rs.4.82 2008 9.8% 71% 1.3% 19.29% 0.41 0.68 0.11 2.04 0.09 19.27 0.9506 17.59 62.67 0.32 1.22 0.15 0.60 Rs.4.82 1.20 Rs.2.28 9-Jun
23% 69% 2.5% 2.5% 0.27 0.36 0.13 1.04 0.11 21.51 1.04 10.19 62.69 0.23 1.02 0.07 1.20 Rs.2.28
89
Chapter-25: History of Banking in Pakistan inancial Analysis of BAL 5.2.2.1 Profitability Ratios
These relate profits to sales and investment. These are a good indicator of a firms overall effectiveness of operation. These include
a.
Net Profit Margin
It is a measure of the firms profitability of sales after taking account of all expenses and income taxes. It shows the net income per Rupee of sales. Net Profit Total Revenue Graph 5.8
25 20 Percentage 15
x 100
Percentage
10 5 0
2008
2009 Year
2010
Years
Source: Bank Alfalah Limited, (200910). Half Year Report, Karachi. The Net Profit Margin of BAL has improved considerably; it was 7.2% in the Financial Year 20079 but has shot up to 23% in the Financial Year 09-Ju2010n. This is because of the fall in the profit rates offered to the depositors due to high levels of liquidity in the market.
90
Chapter-25: History of Banking in Pakistan inancial Analysis of BAL b. Gross Profit Margin
It shows the Gross profit Margin in the total revenue of the Company. Gross profit includes the Revenue minus the expenses. x 100 Gross Profit Total Income
Graph 5.9
71.5 71 Percentage 70.5 70
Percentage
69.5 69 68.5 68 2008 2009 Year 2010
Years
Source: Bank Alfalah Limited, (200910). Half Year Report, Karachi. In the 20078 the gross profit Margin was 70% in the Total Income of the Bank, and in 20089 it is increase and reached to 71%. This is because of the increase in the Gross profit as compared to the 20078. In 201009 this margin goes down to 69%, the cause is a huge increase in the Total income and a less increase in the Gross profit of the company. In 200910 the mark-up revenue of the bank is less.
91
Chapter-25: History of Banking in Pakistan inancial Analysis of BAL c. Return on Investment
It is also called the earning power and measures the overall effectiveness in generating profits with available assets/ invested capital i.e. it measures the profitability per Rupee of investment in the firm. x 100
Net Profit Total Assets Graph 5.10

2.5 2 Percentage 1.5 1
Percentage
0.5 0 2008 2009 Year 2010
Years
Source: Bank Alfalah Limited, (200910). Half Year Report, Karachi. BALs ROI was 1.4% in the FY 20078 and it is declined to 1.3% in 20089. In June 200910 it boost up and reached to 2.05%. This is because of the increase in the Net Profit of the Bank, on the other side the Total assets of the Bank also increase but not with that ratio, at which the Net Profit is increased in 200910. d. Return on Equity
This ratio measures the earning power on shareholders book value investment and is frequently used in comparing two organizations in the industry. Net Profit x 100 Total Equity
92
The ROE of BAL has improved from 14.39% in the FY 20078 to 22.05% in 20089 and in June 092010- Jun it stood at 10.59 that reflect the banks acceptance of strong investment opportunities and effective expense management. That is why although the shareholders equity has increased over the last year, yet the improvement in the net profit margin has shown improvement.
Graph 5.11
25
15 10
5 0
Percentage
2008
20 Percentage
2009 Year
2010
Years
Source: Bank Alfalah Limited, (200910). Half Year Report, Karachi. 5.2.2.2 Asset Utilization Ratios
This ratio measures the relative efficiency with which a firm utilizes its assets to generate revenue. The more productive the assets of an organization the higher would be the ratio. These include
a.
Total Asset Turnover
This shows the revenue generated per Rupee investment in total assets Mark-Up Revenue 93
Chapter-25: History of Banking in Pakistan inancial Analysis of BAL Total Assets
This ratio has slightly increased as compared to the previous year. It stood at 0.07 in 20078 & 20089 and in June 200910 it is 0.41. This was because of an increase in the total assets not matched by proportionate increase in the mark up revenue. This can also be attributed to a selective approach in making advances and an increase in the non-performing assets in the form of bad debts.
Graph 5.12
0.08 0.07 0.06 0.05 0.04 0.03 0.02 0.01 0
Times
Times
2008
2009 Year
2010
Years
Source: Bank Alfalah Limited, (200910). Half Year Report, Karachi. b. Fixed Asset Turnover
This shows the revenue generated per Rupee investment in the operating fixed assets. Mark-up Revenue Operating Fixed Assets Graph 5.13
94

0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 2008 2009 2010
Times Times
Year
Years
Source: Bank Alfalah Limited, (200910). Half Year Report, Karachi. This ratio has shown an increase in the respective year so far. In 20078 this ratio was 0.50 in 20089 it slightly increased and jumped to 0.68, and in 200910 this ratio increased to 0.36.
95
Chapter-25: History of Banking in Pakistan inancial Analysis of BAL c. Current Asset Turnover
This ratio gives the revenue generated per Rupee investment in the total current assets of the bank that includes short-term investments and lending. Mark-Up Revenue Total Current Assets Graph 5.14
0.14 0.12 0.1 Times 0.08 0.06 0.04 0.02 0 2008 2009 Year 2010
Times
Years
Source: Bank Alfalah Limited, (200910). Half Year Report, Karachi. The Current Asset Turnover ratio shows 0.12 times in 20078 and 0.11 times in 20089 and now it is 0.06 times in 200910. This is mainly due to large increases in the shortterm investments and advances.
5.2.2.3
Liquidity Ratios
These are used to measure a firms ability to meet short-term obligations as they become due. From these, an insight into the cash solvency of the firm and its ability to remain solvent in the event of adversity can be judged. They are:
96
a.
Current Ratio
This shows a banks ability to cover its current liabilities with its current assets. It can be calculated by dividing the total current assets with the current liabilities for a particular period. Current Assts Current Liabilities Graph 5.15
2.25 2.2 Times 2.15 2.1 2.05 2 2008 2009 Year 2010 1.95
Times
Years
Source: Bank Alfalah Limited, (200910). Half Year Report, Karachi. BALs Current Ratio is declining with time. It was 2.12 in 20078 and 2.04 in 20089 and now it is 2.22, which explains a increase in the risk of short-term insolvency. This change is due to the fact that the bank has decreased its short-term investments more than proportionately as compared to its short-term liabilities.
b.
Cash Ratio
This is a kind of quick ratio that shows how much time of the most liquid asset i.e. cash is available to cover the current liabilities. 97
Chapter-25: History of Banking in Pakistan inancial Analysis of BAL Cash Current Liabilities
98

0.2 0.15
TimesTimes
0.1 0.05 0 2008 2009 Year 2010
Years
Source: Bank Alfalah Limited, (200910). Half Year Report, Karachi. This ratio has decreased from 0.16 times in 20078 to 0.13 times in 20089 and again slightly increased in 200910 that is 0.16 times. This is due to an increase in BALs current liabilities by accepting current deposits although its cash balances have increased.
5.2.2.4
Financial Leverage Ratios
These ratios show the extent a firm uses debt financing as compared to equity. Two major debt ratios are as follow
a.
Debt to Equity Ratio
This shows the extent to which the firm is financed by borrowings and by the shareholders equity. Total Debt Share holders Equity BALs Debt to Equity ratio shows that for every Rs. 1.00 of equity provided by the shareholders the bank has a debt of Rs. 18.46 in 20068 in the form of borrowings and 99
Chapter-25: History of Banking in Pakistan inancial Analysis of BAL times. This is due to the increase in the Total Debt.
deposits. The debt to equity figure has improved. In 200910 it sustained as 18.32
100

19.4 19.2 19 18.8 18.6 18.4 18.2 18 17.8 2008 2009 Year 2010
Times
Times
Years
Source: Bank Alfalah Limited, (200910). Half Year Report, Karachi. b. Debt to Total Assets Ratio
This ratio highlights the relative importance of debt financing to the firm by showing the percentage of the firms assets that are supported by debt financing. Total Debt Total Assets BALs Debt to Assets ratio in 20078 was 1.04, 20089 it was .9506 and in 200910 it goes to 0.9555 times. It shows that in 200910, Rs. 0.94 of debt was financing every Rs. 1.00. This decrease is attributed to a decrease in the total short-term and long-term liabilities.
Graph 5.18
101

1.06 1.04 1.02 1 0.98 0.96 0.94 0.92 0.9 2008 2009 Year 2010
Times
Times
Years Source: Bank Alfalah Limited, (200910). Half Year Report, Karachi.
5.2.2.5
Other Ratios
Apart from the above there are certain other ratios that can help better analyze the performance of a bank. They are as
a.
Interest Coverage Ratio
This ratio serves as a measure of the firms ability to meet its interest payments and thus avoid bankruptcy. Earnings before Interest and Taxes Interest Expense Graph 5.19
102

20 15
Times Times
10 5 0 2008 2009 Year 2010
Years
Source: Bank Alfalah Limited, (200910). Half Year Report, Karachi. BALs Interest Coverage Ratio has shown considerable improvement over the last years. In 20078 the Interest Coverage Ratio was 12.11. Currently BAL is able to cover its interest payments 10.19 times its total earnings. This is not only because its revenue has increased but also of the fact that there is a large decrease in the banks borrowings.
b.
Investment to Deposits Ratio
This ratio shows the amount of investments employed per Rupee of deposit. It highlights the trust a bank poses in its deposits by employing the deposited funds in various investments to earn profits rather than keep the cash idle. Investments Deposits Graph 5.20
103

0.5 0.4 Times 0.3 0.2 0.1 0 2008 2009 Year 2010
Times
Years
Source: Bank Alfalah Limited, (200910). Half Year Report, Karachi. BALs Investment to Deposits ratio has shown increase this year so far. It was 0.24 in the FY 20078 and rose to .32 in the year later and in 200910 it is 0.39. This is because of huge amount increase in deposits and less increase in the investments.
c.
Advances to Deposits Ratio
This ratio shows the advances made per unit of deposits i.e. what amount of advances are made per Rs. 1.00 of the customers deposits. Advances Deposits Graph 5.21
Times
104

62.7 62.68 Times 62.66 62.64 62.62 62.6 2008 2009 Year 2010
Source: Bank Alfalah Limited, (200810). Half Year Report, Karachi. The ratio has come down from 62.63 in 20078 to 62.67 in 20089. In 200910 it increased to 62.69. This is because the advances extended match the increase in the deposits of the bank.
d.
Operating Expenditure to Total Income Ratio
This ratio shows the relationship between total income generated and Operating expenses incurred in generating that income. The lower the ratio the more efficient the bank is in earning its profit, since, lesser the expenses incurred to earn it. Operating Expenses Total Income
Graph 5.22
Years
105

1.25 1.2 1.15 1.1 1.05 1 0.95 0.9 2008 2009 Year 2010
Times
Times
Years
In order to generate an income of Rs. 1.00 BAL incurred an expenditure of 1.12 in 20078 and 1.22 in 20089. This ratio is 1.02 in the current year. This shows that the bank has successfully managed its operations to earn the total income and at the same time keeping the expenditure low. This has been possible due to a decrease in interest expense and other provisions.
e.
Interest Earned to Advances Ratio
This ratio reflects the revenue generated from making advances. The figure gives the amount of revenue that has come from lending funds. If the ratio is high it means that the cost of lending has risen. Interest Earned Advances
106

0.16 0.14 0.12 0.1 0.08 0.06 0.04 0.02 0 2008 2009
Year
Times Times
2010
Years
Source: Bank Alfalah Limited, (200910). Half Year Report, Karachi. The Interest Earned to Advances ratio has increased from 0.14 in 20078 to 0.15 times in 20089 and in 200910 it is 0.07. The ratio has shown improvement due to higher revenue generated from lending to borrowers. f. Interest Expense to Deposits Ratio
This ratio tells about interest expense incurred in accepting funds for deposits. It is basically the cost of funds. Interest Expense Deposits Graph 5.24
0.1 0.08 Times 0.06 0.04 0.02 0 2008 2009 Year 2010
Times
Years
107
The Interest Expense to Deposits Ratio has decreased. It was 0.63 in 20078 and came down to 0.60 in 20089 and in 200910 it is 0.03. This shows that the interest paid and payable has increased more in comparison to he deposits. Although the Deposit Rate offered to the customers fell, yet the bank incurred interest expense due to borrowed funds.
g.
Earning Per Share Ratio (EPS)
Earning per share Ratio shows that, what the stock holders earn on per share which they have purchased. This can be finding by dividing the Profit after Taxation by Share outstanding. Profit after Tax Shares Outstanding Graph 5.25
6 5 EPS (Rs) 4 3 2 1 0
EPS (Rs)
2008
2009 Year
2010
Years
In 20078 the EPS was Rs. 2.91, in 20089 it goes down as compared to 20018. In 20089 it reach to Rs. 4.82, it is due to the huge increase in the No of shares outstanding as compared to the increase in the Profit after Taxation. In 200910 it is so far Rs.2.28. 108
109
5.3
Trend Analysis
An analysis of the trend of financial ratios over time provides valuable insight into changes that have occurred in a banks financial condition and performance. Hence, it is never enough to just calculate the financial ratios and not see their trend i.e. whether they are increasing or decreasing steadily or not, in order to check the underlying improvement or deterioration. Trend analysis include, Ccommon-size and Iindex analysis.7
5.3.1
COMMON SIZE ANALYSIS OF BAL Balance Sheet
Table 5.2
Assets Cash Balances With Other Banks Lending to Financial Institutions Short Term Investment Short Term Advances Other Assets Total Current Assets Advances Long Term Investment Long Term Operating Fixed Assets Deferred Tax Assets Total Long Term Assets Total Assets Liabilities + Owners Equity Bills Payable Borrowing From financial Institutions Deposits (current) Other Liabilities Total Current Liabilities Fixed Deposits Sub-ordinate Loans Deferred Tax Liabilities
20078 10.10 4.60 4.24 9.55 31.32 2.04 62.16 23.08 10.94 3.62 38.84 100 1.12 3.04 22.44 2.6 29.25 64.43 1.16 0.69
20089 8.94 5.5 7.11 15.76 32.72 1.82 65.90 19.32 11.14 3.84 34.10 100 1.25 6.45 21.59 2.8 32.20 61.46 0.97 0.41
200910 10.93 5.07 7.52 10.31 35.09 1.93 65.61 19.18 11.28 3.90 35.39 100 1.07 2.52 22.64 3.2 29.45 64.11 0.87 0.38 110
Chapter-25: History of Banking in Pakistan inancial Analysis of BAL Total Long Term Liabilities Total Debts Share Capital Reserves Unappropriated Profit Revaluation Surplus Shareholder equity Total Liabilities 66.30 95.55 1.81 0.99 1.75 0.60 4.30 100 62.86 95.06 1.97 0.73 0.85 0.74 4.31 100 65.36 94.82 2.41 0.88 1.16 0.71 5.17 100
Table 5.3
Profit & Loss Account
Common Size Analysis ( %) 200278 Mark-up Revenue Mark-up Expenses Gross Profit Provison for Advances Bad Debts Total Bad Debts Net Mark-up Revenue Non-Mark-up Revenue Total Income Administrative Expenses Other Expenses Total Non-Markup Expenses Profit Before Taxation 100 -71.88 28.11 -3.26 -0.007 -3.267 24.81 15.21 40.03 27.71 0.20 27.92 12.10 200389 100 -64.46 35.53 -9.19 -0.02 -9.21 26.31 23.41 49.73 32.08 0.064 32.14 17.58 June 2004910 100 -61.38 49.69 -3.62 -0.10 -3.72 34.88 21.06 55.95 35.20 0.48 35.68 20.26
111
Chapter-25: History of Banking in Pakistan inancial Analysis of BAL Taxation Profit after Taxation 3.79 8.31 5.44 12.13 7.04 13.21
112
Chapter-25: History of Banking in Pakistan inancial Analysis of BAL 5.3.2 INDEX ANALYSIS OF BAL
Table 5.4
Balance Sheet
Index Analysis (%) Assets Cash Balances With Other Banks Lending to Financial Institutions Shot Term Investment Long Term Investment Other Assets Total Current Assets Advances Long Term Investment Long Term Operating Fixed Assets Deferred Tax Assets Total Long Term Assets Total Assets Liabilities + Owners Equity Bills Payable Borrowing From financial Institutions Deposits (current) Other Liabilities Total Current Liabilities Fixed Deposits Sub-ordinate Loans Deferred Tax Liabilities Total Long Term Liabilities Total Debts 100 100 100 100 100 100 100 100 100 100 133.87 252.92 114.77 130.47 131.30 113.80 99.96 71.81 113.11 118.68 115.32 99.81 121.40 145.56 121.11 119.71 89.87 66.01 118.62 119.38 113 20078 100 100 100 100 100 100 100 100 100 100 100 100 100 20089 105.66 144.36 27.71 196.93 124.62 106.74 126.48 99.88 121.44 131.51 107.49 119.30 109.80 78.43 09-Jun2010 130.15 132.17 59.09 131.81 109.40 116.29 59.34 100.02 125.62 123.61
Chapter-25: History of Banking in Pakistan inancial Analysis of BAL Share Capital Reserves Unappropriated Profit Revaluation Surplus Shareholder equity Total Liabilities Table 5.5 Profit & Loss Account 100 100 100 100 100 100 130.00 87.82 58.18 146.95 99.44 117.69 159.90 107.31 79.33 142.13 120.29 119.43
Index Analysis (%) 20078 Mark-up Revenue Mark-up Expenses Gross Profit Provision for Advances Bad Debts Total Bad Debts Net Mark-up Revenue Non-Mark-up Revenue Total Income Administrative Expenses Other Expenses Total Non-Markup Expenses Profit Before Taxation Taxation 100 100 100 100 100 100 100 100 100 100 100 100 100 100 20089 121.67 109.11 153.77 339.81 380.22 339.90 129.03 187.26 151.16 140.81 22.08 140.06 176.75 174.95 09-June2010 64.93 55.45 89.17 71.44 679.24 73.34 91.28 89.91 90.76 82.47 148.31 82.99 108.66 120.65
114
Chapter-25: History of Banking in Pakistan inancial Analysis of BAL Profit after Taxation 100 177.58 103.19
115
Chapter-26: SWOT Analysis
CHAPTER - 6
116
5.4 SWOT ANALYSIS

SWOT is an acronym for an organizations strengths, weaknesses, opportunities and threats. A SWOT analysis consists of sizing up a firms internal strengths and weaknesses and its external opportunities and threats in order to get an overview of the organizations strategies and its environment. The basic purpose of such an analysis is to develop strategies along with exploiting opportunities and strengths and neutralizing threats and removing weaknesses. The SWOT Analysis of Bank Al-falah Limited is as follows:
5.4.6.1
STRENGTHS
BAL is one of the largest private banks of the country with a deposit base of Rs. 287771 in the 200910.
Parties of financial repute and credit worthiness like the State Bank of Pakistan, and the Abu Dhabi Consortium besides by the Government of Pakistan. The management efficiency and effectiveness of the bank has improved greatly as is evident from the income pattern and provisions for loan/ write off practices.
It has a well-connected and adequately equipped branch network of more than 321 branches nationally.
117
The introduction of Relationship Banking that involves assessing and understanding customer needs, providing advice on the customers business needs and helping them find viable financial solutions to their business problems.
It offers corporate and retail banking services to its clients. It is very active in foreign trade transactions and the volume grew at a rate of 36.07% over the previous year. Based on the Banks operations, it has been able to maintain its credit rating in long term to AA and short term to A1+. BAL has long-term vision, which plays a very important role in organizations success.
Banks emphasis on consumer banking by providing them with innovative saving schemes, products and services suiting best to their life style.
Extension and improvement in services to domestic as well as foreign customer.
Best and optional policies and attractive compensation packages, for employees, which has really improved their commitment, dedication and hard work, towards the accomplishment of banks objectives.
BAL instant financing products for customer wanting instant loan facility at BAL branches.
24 hours cash access through ATM. Pioneer in introduction of BAL Credit Cards and RTC, which minimize the degree of riskiness.
Attention and sensitivity to competition prevailing in the country. Effective marketing campaigns. Advances schemes to agriculture sector and small and medium enterprises.
5.4.2 6.2
WEAKNESSES
118
Increase in the non-performing loans due to political, economic and legal factors has adversely affected the banks image.
Administrative expenses are increasing every year. Promotions are carried out on annual basis ignoring the importance of capabilities and performance outputs. Lengthy Credit processing and documentation procedures are a weakness of the bank. It is only operating nationally. Less branches as compared to other banks. There is no separate prayer room in the bank. The banking hours of the bank are maximum that is from 9 A.M to 6 P.M. Customers having account, with small amounts are not given some services and dealing to those with high accounts.
Political pressure from vested interest group selection. No marketing of advances
5.4.36.3

OPPORTUNITIES
Reconstruction of Afghanistan is a great opportunity for the bank to grow by offering banking operations in the war-affected areas. Financial sector friendly policies of the Government by encouraging developmental activities such as construction of houses and making agricultural and small and medium businesses finances.
Home remittances of Pakistanis working abroad through the banking channels have widely facilitated the banking operations. The current trend of professional degrees offered by reputed institutions can greatly help the bank achieve professionalism in its organizational culture by hiring MBA students who major in Banking and Finance.
119
Expand its product line similar to other competitive banks by introducing various other modes of consumer financing such as car and consumer durables micro finances.
Expansion of IT platform and internet based banking systems. The introduction of ATM facility in the every branch will most certainly result in a positive image and improve the services offered to its customers. Expand the branch network in the different counties of the world. Stronger position to recover bad debts. Benefits from incoming expertise and competition.
5.4.6.4
bank. sector.
THREATS
Increase in competition due to the rapidly growing number of foreign and domestic private banks offering highly specialized and attractive financial services. Reduction in developmental activities and foreign direct investment due to the shaken investors confidence has also lead to a fall in the banks expansion pace. Extensive promotional campaigns run by the other banks are a major threat to BAL in that they are able to attract more customers. The American elections is going on which is big threat to the policies of the Un-consistency in government policies regarding to business and economic
Growing global technological advancement. Strict regulations by the government over credit facilities to the customers as to meet the prudential regulations.
Loss of confidence of the customers due to freezing of accounts Concentration risk is involved with the credit department. Return of deposits is very low.
120
Chapter-27: and Recommendations
Findings History of Banking in Pakistan
CHAPTER - 7
121
FINDINGS AND RECOMMENDATIONS

Advice is seldom welcome; and those who want it the most always like it the least.1 Recommendations suggest improvements in area which have room for polishing and progress.
Recommendations are based on the previous sections of a report and are suggestions that the analyst feels are required to be implemented in order to improve further the standing and position of the firm in the financial world. These are thus based on the findings and shortcomings noted in an organization while working with it and then writing on it. Opinions of various capable individuals are sought who through their real life experiences and deep insight are better able to judge whether the course of action adopted by the organization is going to prove fruitful or does it require further improvement in the form of changes in its strategies.
Following are the findings and recommendations for various Departments that were felt are required while consulting the staff members of Bank Alfalah Limited.
67.1 SIMPLIFICATION OF PROCEDURE

The procedure of opening an account should be simplified. The account opening form should be self-explanatory and include translations in Urdu for those customers who are not well read, since the fact cannot be ignored that many people do not have a good understanding of English.
122
67.2 INCENTIVES FOR DEPOSITORS

Those who deposit large amounts of money or are old customers of the bank should be given free credit lines up to a certain limit. Besides, financial advice should be provided to customers in case there is a change in the market trend before they seek for it.
67.3 INTEGRATED MARKETING APPROACH

All the officers in Deposits Department should be involved in marketing and not just opening accounts and maintaining their records. This can be done through improving their personnel relations skills of visiting the potential customers at their offices and homes.
67.4 EXPANSION OF THE CASH COUNTER

The Cash Department at the Branch needs special attention in the sense that the cash counter is small and becomes crowded when there are more than 10 to 15 customers to attend. Customers make online fund transfer, use the debit card, withdrawals and deposits from the very same counter. Hence, if a new counter cannot be built due to certain limitations, the management should try to make lines of the customers or give tokens to them, to minimize the crowed.
67.5 CASH CLOSING TIME

In this branch the Cash Closing time is very late, often it reach to 8 P.M which is too late. The cash management should try to close the cash on time.
67.7 CAREER DEVELOPMENT OF CLEARING OFFICER
123
It has been noted that the officers taking bills & cheques for clearing do not involve themselves much with the other operations of the bank and thus remain on the very same post and seat throughout their banking career. This is against the modern day policies of organizations giving their employees conducive, rewarding and equal opportunities of prospering and growing with it. Thus, the Human Resource Department at the Head Office should prepare a plan that shows the future growth potential of the employees based on their job performance and evaluation and make it known to all.
67.8 BURDEN OF WORK IN THE CLEARING DEPARTMENT

The load of work on the Clearing officer is high as compared to the other staff members of the branch. The Human Resource Department at Head Office should hire more employees for this department.
67.9
PROPER DOCUMENTATION IN ADVANCES DEPARTMENT
If valid documents are not obtained before sanctioning the loan limit, it becomes irrecoverable in case of default by the borrower. It has been noted that at times the related officers oblige the customer by letting him submit the documents later and approving the limit by getting the Disbursement Authorization Certificate from the Credit Committee. It proves to be very time and resource consuming afterwards tracing the borrower to bring in the documents. Therefore, correct and complete documents should be attained before the amount is sanctioned and no leniency shown in any case.
67.10 VERIFICATION OF SECURITY

124
Physical verification of the security tendered is a must rather than to merely rely on the documents. It had been noted that where the property to be hypothecated/ mortgaged lay in remote areas such as the Gadoon Industrial Estate regular physical visits are avoided by the officers. This factor result in an increase in the nonperforming loans of the bank and as result BAL had more debts turned bad as compared to the other banks. For this purpose, regular physical verification must be conducted of securities pledged and hypothecated.
67.11 ESTABLISHMENT OF MARKETING DEPARTMENT

Nowadays no organization can survive in this tough competitive world without having able to market itself and its products. Keeping this in mind a Marketing Department should be introduced in all branches that would easily implement the marketing policies of the Head Office. This would help in increasing the market share in deposits and advances for BAL.
67.12 DEVELOPMENT OF MANAGERIAL LEADERSHIP

Good managerial skills make positive contribution towards higher effective results. BAL should focus on the effective utilization of its human resource by applying the modern style of management. This can only be possible if political interferences are discouraged especially when hiring and placing personnel and the recruitment policies are changed to give preference to M.B.A. and B.B.A (Hons) students.
67.13 TESTS FOR PROMOTIONS

A sizeable portion of the officers at BAL is promoted without conducting any tests and interviews. This results in undeserving people sitting on the managerial posts and steering the organization away from its goals and objectives in the long run.
125
67.14 DELEGATION OF POWERS

Delegating powers to the Department in-charges up to the greater possible extent will most certainly reduce the workload on the managers and they would be able to perform well by taking quick remedial actions where necessary. Besides, the spare time will be spent dealing with matters of more important nature.
67.15 RESEARCH AND DEVELOPMENT DEPARTMENT

A Research and Development Department in BAL will help it to adopt new procedures and modern techniques that will help the bank to compete with the others. An R&DD should be maintained at all Branches that would define the target market for the bank in that particular area and through its findings suggest measures to improve the performance of branches there.
67.16 CUSTOMER RELATIONSHIP

Knowing the customers and their needs is the key to business success. By attitude the manager can improve the relationship with the customers. By having the understanding, what a customer wants, the manager can improve the relationship with the customers. BAL should understand that the commitment to satisfy customers needs must be fulfilled within a professional and ethical framework. They should observe a culture of high ethical standards, based upon development of right attitude. Although BAL has been improving its corporate behavior, even then they should continue their effort for better corporate behavior. There is a need of improving customer relations in BAL. For attitude improvement special courses should be arranged under specialized teachers, through lectures, seminars and other interactive techniques. It will cost the bank but will be more profitable for the bank in the long run. 126
67.17 TOP-BOTTOM COMMUNICATION

The down ward communication is very important because the information flows down the hierarchy from superiors to subordinates. The downward communications needs to be improved, by making sure that policies made at the higher level properly reach the lower level and those policies and procedures are properly understood. Decisions should reach as quickly as possible without any delays. Delays create hurdles in the functioning of the bank. Flow of information, decisions and other instructions and policies in efficient and effective manner will enhance the over all productivity and image of the organization. To improve the communications in the bank the managers should strive to become better communicator and they must accomplish to separate tasks. They must improve their messages, the information they wish to transmit. Secondly they must improve their own understanding of what customers and subordinates are trying to communicate to them; they must become better encoders and decoders. Proper training from specialized communication teacher should be given to the managers as well as the lower level employees so that they become good listener as well.
67.18 HEALTHY ACTIVITIES

There is lack of healthy and entertainment activities like excursions on weekend, parties and other important days, celebration in their tidy life. Such activities should be encouraged at once in a month.
67.19 PROPER SEATING ARRANGEMENT

Customers, waiting for their turns, should be provided with proper seating arrangements. Often it was visible that during peak banking hours many customers use to stand anywhere they wanted to. This created stress for the employees as well as other customers waiting for their job getting done. A specific place should be reserved for the customers by placing chairs there. The staff should politely tell the customers
127
to be seated till their work is ready. This would ease the job of the employees as well as clients wont bear the pain of being standing still and waiting.
67.20 PERFORMANCE APPRAISAL

The practice of performance appraisal should be made a serious and mature process which can identify an employees potential accurately. Giving unachievable tasks to employees discourages them and they dont strive for the achievements of those tasks. If targets which are practical are given to employees and any bonus or reward is announced on the achievements, this would greatly influence the performance of employees. It can be possible only then that the employees will take their performance appraisal serious and would yearn for betterment.
67.212
FAIR INTERNEE SELECTION PROGRAM
A fair internees selection system should be established for selection of internees. Instead of sending CVs to Karachi Head Office, the applicants should be interviewed locally in the branch on some specific date. Aptitude and competence of the candidates should be considered a merit for selection instead of their references. Bank administration should give proper training to the internees. They should educate them about the purpose of all the functions they perform. BAL also gives internship generally for six weeks and for the maximum of eight weeks. This is a problem for BAL itself. Thus during the six or eights weeks duration when an internee gets some know how about the banks operation, his time completes; and when he can be more useful than ever, he is asked to leave.
67.2232
EDIFICE CONSTRUCTION
Some departments like the Auto Loans department was not given enough space in the banks vicinity. A proper, well decorated office should be provided to the Auto Loans staff. The rest of the officers also spend most of their time at the bank. Those staff
128
members who want to offer their prayers face difficulty in doing so because there is no specific place for the officers to pray. A prayer room should also be constructed.
67.24 NEED FOR MORE PRINTERS

In BAL Jinnah Road Branch there are only two printers, which insufficient for whole bank. The work load is maximum as compared to the other banks. The management should install more printers to make the work process fast in this branch.
129
ReferencesChapter-2: Pakistan
130
CHAPTER 2REFERENCES
1. The Compact Encyclopedia, (1933), Volume 1, Tthe Gresham
Publishing Company Ltd, London. P: 281
2.
Nasir Muhammad Saeed, (2000) Money Banking and Finance, 2nd Edition
Pak Imperial Book Depot, Lahore. P. 12
3. P.641
The World Book Encyclopedia, (1952) Volume 2, Field enterprises Inc, USA.
4. 21-22
Every mans Encyclopedia, (1967) Volume 2, J.M & Sons. London.
P.
CHAPTER 3 1. 2. Internet Site (200410) www.eglin.af.mil/46tw/strategicplan/glossary.htm 3. Bank Alfalah website www.BankAlfalah.Com Bank Alfalah Limited, Employee Hand Book. Karachi, P.5.
131
ReferencesChapter-2: Pakistan 4. Marion University Florence, South Carolina. P.83 8. 9. 10. Bank Alfalah Limited, (2008). Annual Report. Karachi, P.93. Bank Alfalah website www.BankAlfalah.Com Internet Site http://www.Pacra.com
David R. Fred. (1998). Strategic Management, Seventh Edition, Francis
11.
Bateman S. Thomas, Snell A. Scott (1996). Management. Sydney: IRWIN,
Sydney. P. 243.
12.
Bank Alfalah Limited, (2008). Annual Report. Karachi, P.3.
13.
Bank Alfalah Limited, (20089). Employee HandBook. Karachi. P.10-12
14. 15. 16. 17.
Bank Alfalah website www.BankAlfalah.Com Bank Alfalah Limited, (200910). Bank Alfalah Car Financing. Karachi. Bank Alfalah website www.BankAlfalah.Com
Bank Alfalah Limited, (2009). Alfalah Hilal Card. Karachi. 1 8. Bank Alfalah Limited, (2003). Employee HandBook. Karachi. P.11
19.
Bank Alfalah Limited, (2009). Bank Alfalah Home Finance. Karachi. P. 1-5
20.
Bank Alfalah Limited, (2009). Alfalah Karobar Finance. Karachi. 132
21. Bank Alfalah Limited, (2008,9). Alfalah Zarie Sahulat. Karachi.
15. 16. 17.
Bank Alfalah website www.BankAlfalah.Com Bank Alfalah website www.BankAlfalah.Com Bank Alfalah website www.BankAlfalah.Com
CHAPTER 4 Bank Alfalah Jinnah Road Branch. (2009), Half Year Report.
Bateman S. Thomas, Snell A. Scott (1996). Management, IRWIN, Sydney. P.243
Bank Alfalah Jinnah Road Branch (2009), Relationship Contract, Karachi.
M.M Malik (1986), Practice & Law of Banking, Decent Print Enterprises, Karachi. P. 152-153
Siddiqi, Asrar H. (2003). Practice & Law of Banking in Pakistan. Karachi: Decent Print Enterprises. P.226
Ibid. P. 228 Hassan Akbar (2003), Internship Report on Alfalah, The Mall Branch. Bank Alfalah website www.BankAlfalah.Com Ibid 133
Bank Alfalah Limited, (2008). Employee HandBook. Karachi. P.54 Meenai S.A (2000), Money & Banking in Pakistan, Karachi. Allies Book Corporation. P.153.
Bank Alfalah Limited, (2008). Credit Manual, Karachi.
Bank Alfalah Limited, (2008). Bank Alfalah Car Financing. Karachi.
Bank Alfalah website www.BankAlfalah.Com Bank Alfalah Limited, (2008). Bank Alfalah Home Finance. Karachi. P. 1-5 Siddiqi, Asrar H. (2003). Practice & Law of Banking in Pakistan. Karachi: Decent Print Enterprises. P.330-331
Ibid, P. 342-343. Winqwist Carl-Henrik, (1978).Guide to Documentary Credit operations, Sweden: ICC Services S.A.R.L. P. 25 Bank Alfalah Limted, Letter of Credit Material, Karachi.
CHAPTER 5 1. 2. 3. Bank Alfalah Limited, (2008). Half Year Report, Karachi. Internet Site www.Bankalfalah.com/network Bank Alfalah Limited, (2009) Half Year. Karachi, P.21.
134
ReferencesChapter-2: Pakistan 4.
Robert, F.M. Williams, S.F Haka and M.S. Bettner. (1999). Accounting; the basis for business decisions, New York; Irwin McGraw-Hill, P.13
5. 6.
Bank Alfalah Limited, (2009) Half Year. Karachi, P.21, 26. Emery, D.R, J.D Finnerty and J.D. Stowen, (1988). Principles of Financial Management. New Jersey: Prentice Hall.
7.
Horne Van, J.C and J.M. Wachowicz. (1998). Fundamentals of Financial Management 10th Edition, New York: Prentice-Hall International, Inc.
8. 9.
http://www.investopedia.com/terms/e/economicprofit.asp Salvatore Dominick, Managerial Economics, Third Edition, McGraw-Hill,
Inc, USA, 1998. P. 90 10. Breadshaw Jhon, Economics, third edition, Pitman Publishing Company,
USA, 1996. P.141 11. 12. Ibid P. 145 chaudhry sher Muhammad, Introduction to statistical theory, Part 1, Markazi
Kutub Khana, Lahore, 2000, P.421 13. 14. 15. 16. 17. 18. Ibid P.421 Ibid P.421 Ibid P.421 Ibid P.422 Ibid P.423 Salvatore Dominick, Managerial Economics, Third Edition, Mc-Grew Hill,
USA, 1998. P139-141 19. 20. Ibid P.142 Keat Paul G, Young Philip K.Y., Managerial Economics, Fourth Edition,
Pearson education, U.S, 2004 P.399-402 21. Ibid P 400.
135
ReferencesChapter-2: Pakistan 1.
Jain, N.P. (1995). Business Thoughts. , New Delhi. Shri Jainendra Press
136

Introduction To The Report: Chapter - 1

Enviado por

Dados do documento

Descrição original:

Título original

Direitos autorais

Formatos disponíveis

Compartilhar este documento

Compartilhar ou incorporar documento

Opções de compartilhamento

Você considera este documento útil?

Este conteúdo é inapropriado?

Direitos autorais:

Formatos disponíveis

Introduction To The Report: Chapter - 1

Enviado por

Direitos autorais:

Formatos disponíveis

Chapter-1:

Introduction to the Report

INTRODUCTION TO THE REPORT

PURPOSE OF THE STUDY

SCOPE OF THE STUDY

Chapter-1: It includes: 1.4.2

Introduction to the Report

Introduction to the Report

SCHEME OF THE REPORT

Introduction to the Report

History of Banking in Pakistan

HISTORY OF BANKING IN PAKISTAN

History of Banking in Pakistan

BRIEF HISTORY OF BANKING

History of Banking in Pakistan

History of Banking in Pakistan

Chapter-23: Pakistan Bank Alfalah Limited Pakistan

BANK ALFALAH LIMITED PAKISTAN

BANK ALFALAH TODAY:

Chapter-23: Pakistan Bank Alfalah Limited Pakistan

Chapter-23: Pakistan Bank Alfalah Limited Pakistan

CORE OBJECTIVES OF BANK ALFALAH LIMITED

BANK ALFALAH CREDIT RATING:

Branch Network of BAL

Chapter-23: Pakistan Bank Alfalah Limited Pakistan

ORGANIZATIONAL STRUCTURE OF BANK ALFALAH LIMITED

MANAGEMENT OF BANK ALFALAH LIMITED

Chapter-23: Pakistan Bank Alfalah Limited Pakistan

3.10 BAL PRODUCTS

Chapter-23: Pakistan Bank Alfalah Limited Pakistan

Source: BAL Jinnah Road Branch Rawalpindi

Chapter-23: Pakistan Bank Alfalah Limited Pakistan

Profit is credited to the customer account on monthly basis. Personalized chequebook.

No restriction on ATM withdrawal Alfalah Mahana Amdan

Foreign Currency Accounts

Chapter-23: Pakistan Bank Alfalah Limited Pakistan million.

Locker rent is waived for customers maintaining a minimum deposit of Rs.2

The key deposit of the Locker is Rs.1,000/- which is refundable.

Charges per annum Rs.1000/Rs.1500/Rs.3000/Rs.3500/-

Alfalah Kamyab Karobar

No restriction on number of withdrawals and on number of deposits

3.10.2 CONSUMER FINANCE PRODUCTS 18

Chapter-23: Pakistan Bank Alfalah Limited Pakistan

Auto Leasing & Financing Car Finance

Chapter-23: Pakistan Bank Alfalah Limited Pakistan

Co borrowers NIC copy {if it is a co borrower case}.

Chapter-23: Pakistan Bank Alfalah Limited Pakistan up of 2.25% per month.

Cash Advance Facility 75% Oof Credit Limit

Chapter-23: Pakistan Bank Alfalah Limited Pakistan

ALFALAH Hilal Card

Chapter-23: Pakistan Bank Alfalah Limited Pakistan

Chapter-23: Pakistan Bank Alfalah Limited Pakistan Features: No Interest

Chapter-23: Pakistan Bank Alfalah Limited Pakistan

Employment verification form from the employer.

Chapter-23: Pakistan Bank Alfalah Limited Pakistan

Mark-up rates For SVR (Standard Variable Rate) option:

These are indicative rates reviewed monthly

Chapter-23: Pakistan Bank Alfalah Limited Pakistan 6. Alfalah Karobar Finance

Chapter-23: Pakistan Bank Alfalah Limited Pakistan are quoted below.

Alfalah Machinery & Equipment Zarie Sahulat

Alfalah Aabpaash Zarie Sahulat Alfalah Islah-e-Araazi Zarie Sahulat

Medium Term Medium Term