Internship Report Aqeel

8/8/2019 Internship Report Aqeel

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Table Of Contents

TOPICS PAGE #

1-COMPANY PROFILE 3

History 3 Vision 4 Mission Statement 4

2-DEPARTMENT WORKED DURING INTERNSHIP 6

Account Opening Department 6 MYactivitiesand Learningin A O Department 10 Accounts Department 11 My Activitiesand Learningin Accounts Department 12 Operations Department 14 My Activitiesand Learningin Operations Department 21

3-APPLICATION OF CLASSROOM LEARNING 21

4- ANALYSIS OF BANK ALFALAH 22

SWOT Analysis 22 PEST Analysis 24

4-MY FINDINGS & SOLUTIONS 27

5-RECOMMENDATIONS 29

6-CONCLUSION 31

7-IF I WERE MANAGER THERE? 32

8-FINANCIAL ANALYSIS 39


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ACKNOWLEDGMENT

MygratitudeandthankstoalmightyALLAHthegracious,themostmerciful

and beneficent whogaveme couragetoundertakeand completethistask. I am

verymuchobligedtomyevercaringandloving parents whose prayershave

enabledmetoreachthisstage.

I amhighlyindebtedandgratefultomyteachers,my Internship InchargeMadam

Ruhma Khanand Internship CoordinatorMadam Javeria Abbasforprovidingme

guidelineforthe completionofthisreport.

I feelgreat prideand pleasureontheaccomplishmentofthisreportasthishelp me

alottoincreasemylearningand capabilities.


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COMPANY PROFILE

HISTORY

Bank Alfalah Limited is a private bank in Pakistan owned by the Abu Dhabi Group. Bank

Alfalah was incorporatedon June 21, 1997 asa public limited companyunder the Companies

Ordinance 1984. BankAlfalah isregisteredat both Karachiand Lahore StockExchange witha

tickernameof BAFL. Its bankingoperations commencedfrom November1, 1997. The bank

is engaged in commercial banking and related services as defined in the Banking companies

ordinance, 1962, withtheregisteredofficeat B.A.Building, I.I.ChundrigarRoad, Karachi.

Since its inception,as thenew identityofH.C.E.B (Habib Creditand Exchange BankLimited)

afterthe privatization in 1997,themanagementofthe bankstartedimplementingstrategiesand

policies to carve a distinct position for the bank in the market place. This was further

strengthened witha partnership with the Abu Dhabi Group whichowns 70% of Bank Alfalah

shares and remaining 30% were owned by HBL. This allowed the bank to invest more in

revolutionary technology to increase its range of products and services, perceiving the

requirementsoftheircustomersandmatchingthem withquality productsandservicesolutions.

Branches

The bank is currently operating through more than 274 branches domestically and an

international presence in Afghanistan, Bangladesh and Bahrain, with the registered office at

B.A.Building, I.I.Chundrigar, Karachi. Someofthemain branchesarelocatedinallofthemajor

cities including: Lahore, Kasur, Islamabad, Gawadar, Peshawar, Faisalabad, Quetta, D.I.Khan,

Bahawalpur,Rawalpindi, Sargodha, Sukkur, Sialkot, Multan, Murree, Attock District,

Gujranwala, Pirmahal,MirpurKhasetc.

Now12 years after being incorporated, Bank Alfalah has emerged as one of the foremost

financial institution in the region,endeavoring tomeet theneedsof tomorrow today,operating

through 274branches in 74 cities nation wide, with total employees exceeding 6000. Bank


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Alfalah also expanded its network internationally by opening branches in Afghanistan,

Bangladeshand Bahraintofurtherimproveitsimageasa premierbankinginstitution.

Vision Statement

To bethe premierorganizationoperatinglocally & internationalitythat providesthe complete

rangeoffinancialservicestoallsegmentsunderoneroof.

Mission Statement

Todevelop & deliverthemostinnovative products,manage customerexperience,deliverquality

servicesthat contributesto brandstrength,establishesa competitiveadvantageandenhances

profitability,thus providingvaluetothestakeholdersofthe bank

Chairman bank alfalah

H.E. SheikhHamdan BinMubarakAl Nahayan

Products

Loans, Credit Cards, Savings, ConsumerBankingetc.

Company financials

Revenue:PKR 25.783 Billion (2007)

Net income:PKR 3.130 Billion (2007)


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Offer Structure Summary

Company BankAlfalah Limited

LeadManagerand Lead

UnderwriterAqeel Karim Dhedhi Securities (Pvt.) Limited

Shares Offered

40,000,000

FaceValue Rs. 10 pershare

OfferPrice Rs. 30 pershare

Premium Rs. 20 pershare

Offerers Certainmembersofthe Abu Dhabi Group

Purposeofthe OfferToenablelistingofAlfalahonthe Karachi Stock

Exchange


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MY INTERNSHIP

I didmyinternship at BankAlfalah LimitedHussain Agahi Branchandthemaindepartmentsof

this bankin which I workedandtheirfunctionsareasfollows:

Accounts Opening Department Accounts Department Operations Department (Remittance / Clearing)

1-ACCOUNTS OPENING DEPARTMENT

Accountsopeningdepartmentisoneofthedepartmentsthat comeundertheretail/general

bankingfacilities provided by BankAlfalah SRA Branch. Someofthemajordepositaccounts

opened by BankAlfalah SRA Branchareasfollows:

Major Deposit Account Products 1-Current AccountCurrent Accountsarenoninterest bearingaccountsthathaveaminimumaccountopening

requirementofRs 10,000. Nozakatisdeductedontheaccounts balance. Furthermoreall current

accountholdersreceiveaHilaldebit cardandtherearenorestrictiononthenumberof

withdrawsordepositsmadetoandfromtheaccount.

2- Profit& Loss Saving AccountProfit& Losssavingaccounts can beopened withaminimum balancerequirementofRs 5,000

and profitis creditedonahalfyearly basis. Therearenorestrictionsonthenumberofdeposits

and withdrawalmadetoandfromtheaccountandallaccountholdersreceiveaHilaldebit card


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IntroductionThe introduction of a current account holder is accepted for the opening of either a current

accountor a saving account. The introducer should be Account Holder. The signature of the

account-holder introducing the account is obtained at the place provided for in the account

openingform.

Specimen Signature Card, Cheques Book Requisition, Online FormThesignaturesofthe clientareobtainedonaspecimen Signature card Cheque bookrequisition

andonline form. Thesespecimensignature cardsareobtained induplicate with twosignatures

oneach cardfromthe customer. Everytimea Chequeisreceivedfora paymentfromthe client,

thesignatureonthe Chequeareverified by comparingthem withthe Specimen Signature Card.

Signature Difference FormThe signaturesof the clientareobtainedona signaturedifference form ifhis / her signatures

differfromthe computerized National Identity Card.

Vernacular FormThe signature of the customer is also obtained on the vernacular form if he / she signs in a

languageotherthan English.

VerisysThen we do a Verisys, a verification system started by NADRA on the CNIC of the new

accountopener. A Verisys tells, ifmore information pertaining to the customer isneeded to

opentheaccountornot.Itisusedmostlytoverifythe customerCNIC with Nadra.

Account NumberWhenall the formalitiesare completedthen thefinalapprovalofaccounthas to betakenfrom

the BranchManager. After obtaining approval of the branch manager an account number is

allotted to the customer all the information is entered into the computer. Then that account

numberis writtenonthe Cheque Book, Specimen Signature cardsandaccountopeningform.

Sending the form to Head OfficeAfterfulfillalltherequirementandverifytheformfromoperationmanagertheaccountopening

formsendtoHead Office Karachiandmakerequesttoissuethe printed cheque book.

Issuance Of A Cheque Book


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Afteropeningan A/C withthe bank,the A/C holderreceivealetterofthanksfromHead Office

Karachi thenafterreceiving this letter client come to bankandmakesarequest in thenameof

bank for the issuanceofa Cheque book. The A/C holdermentions titleof A/C, A/C number,

signsit properly. Normally BAL issuesa Cheque bookhaving 25 leavesforSaving Accountand

50 leaves Cheque Bookto Current AccountHolder. Every Cheque bookalso containsone leaf

thatisusedforanotherissueofa Cheque book.

Entry Of A Cheque BookBeforeissuanceofa Cheque book,theemployee performs certainfunctions. Theyinclude:

Stampingrequisitionslip thatisin Cheque book.

EntRY in the Cheque Book Issue RegisterCheckwhetherornotaseniorofficerhasverifiedthesignatures,ifnotthenfirstgetsthem

verified.

Afterentryinthemanualregister,theemployeeissuesthe Cheque booktothe A/C holderwith

his/hersignatureontheregister

Stop PaymentIfa customerloosestheircheque bookorATM card,thenthat customerwillhaveto cometothe

bankandfirstlyreportthelossandthenstop payment, bytellingtheseriesofchequehehaslost.

Bystopping payment,the customerisguaranteedthatnoillegal paymentismadefromtheir

account.

The processforstopping payment,afterthe customertellsthathehaslostis cheque bookisthat

hefillsa Form B, whichissameasa cheque bookrequisitionformandanindemnityform,

statingnoresponsibilityon behalfofthe bankifanyillegal paymentismade beforethetimeof

announcinga cheque bookorATM cardlost.

MY ACTIVITIES AND LEARNING IN ACCOUNT OPENING DEPARTMENT

Asa partofmyinternship I hadtofillthedifferentformsandalsodidtheappropriate bank

stampingto completetheformsandalsolearnaboutthe Cheque Bookissuing processafterthe

openingofaccount. Duringthedeal with customers First weaskedfrom customerabouttheir

professioneithera businessman, Job holder,studentorahousewifeinordertomakeestimateof


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theirincome. Different A/c aresuitablefordifferent customerssuchas BBA forstudentetc. Two

typesofA/c are;

1-PERSONAL ACCOUNT

This A/c isopen withthenameofpersonandhe cantdoany businesstransactioninit. A/c

could beaCurrent, Saving or BBA etc.

2-BUSINESS ACCOUNT

Itisopen withthenameofaccountholderbusinessandfordoing businesstransactionsand A/c

type could beCurrent, RP(Saving), AKK, Kifayat , Agri etc. I havelearnedaboutthesethings.

DORMANT ACCOUNT

The A/c in whichthereisnotransactionfrom previoussix monthsisstatedasDorment

Account We prepareda Noticetoinformthe customerthathisaccount becomedormantandhe

canRe Activeit byresponding.I alsolearnaboutthisandhow to prepareandsendnoticetothe

customers.

KYCs (KNOW YOUR CUSTOMER)

Thisisattachedattheendofformandasnamementionedthisincludealltheinformationabout

customersuchasHis Name, Account title, Account #, Nature of business, Estimated income,

their Assets, Liabilities, other Bank account #s if they have etc. WePreviewourCustomer

KYCs periodically (maximum periodofpreview is 12 months) bymonitoringtheirtypesand #

oftransactions.Forpreview wefillthesimpleformmanuallythenenteritinthesystemanda

revised KYC is prepared.Thecomplete set of preview contain Old KYC, Filled Formandnew

KYC.

I filledtheformsforKYC preview andlearnedaboutalloftheseabovementionedactivitiesin

accountopeningdepartment.

2- ACCOUNTS DEPARTMENT


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Accountsdepartmentisa backenddepartmentat BankAlfalah SRA Branchthat performsthe

followingfunctions;

ReportsItgeneratesreportslikeStatement of Account Activity (areportontheactivityofall

accountsat BankAlfalah SRA Branch),Statement of Affairs (areportontheassetsand

liabilitiesofBankAlfalah SRA Branch),Statement of Foreign Exchange (areportonthe

foreignexchange currenciesatthe bank)andIncome ExpenditureStatement (areporton

theincomeandexpendituresofBankAlfalah SRA Branch).

Thesereports can begeneratedatdaily, weekly,monthly,quarterlyoryearly basisas

required bythe bank.

Income and ExpenseThedepartmentalsoneedsto calculatetherevenuesandexpenses, controlexpenditureand

forecast profitseverymonth.

BudgetFormulationofyearly budgets & targetsin consultation withthe branchmanagerisalsodone

bytheaccountsdepartment.

Activity CheckingDailyactivity checkingandmonitoringisdone bytheaccountsdepartmentofthe whole bank

Storage of RecordsAccounts Departmentalsohasthedutytostorevouchersandsystemgeneratedreports.

PaymentsTheaccountsdepartmentisresponsibleto payvendorson behalfofthe bankwith

authorizationfromthe branchmanager. Italsohastoamortizelarge paymentsand calculate

depreciationofbranchassets.

7-Depreciation Record

Accountsdepartmentalsomadearecordofdepreciationoffixedassetssuchas Office

Equipment, Computers,Vehicles, Furnitureandtheirinvoices.

MY ACTIVITIES AND LEARNING IN ACCOUNTS DEPARTMENT


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Activity CheckingIntheaccountsdepartment, I hadtododailyactivity checkingandtherearefourstagesin which

activity checkingtakes place:

Collectingvouchers, chequesetc fromalldepartments SortingVouchers Checking Activity Packing

CollectingVouchers

Thefirststageofactivity checkingis collectingallvouchers, cheques, DDs, payorder, payslips

etc fromalldepartmentsofthe bank.Mainlyvouchers comefromtheoperationsdepartment.

Aftercollectingthesevouchersetc fromthedepartments, weneedto checkifallstampsare

stampedonthesevouchersetc.

SortingVouchers

Afterallvouchersare collected,theyneedto besortedintodifferent categories:

Income: Incomevouchers Expenditure: Expensesvouchersand paymentvouchers Others: Includesvouchersaboutexciseduty, FED,teller, ATM, payablesetc Online: Containonlinevouchersandonline creditslipsetc

Head Office (H.O): IncludesHO vouchersand IBCA, DD advices Bills Payable General (BPG): Includesvouchersand DD, Payorders, Payslipsetc

Checking Activity

Aftersortingtakes place,dailyactivityis checkedusingthestatementofaccountactivity, which

containsalldailyactivityoftheaccountsinthe bank. Activity checkingisdone byseeingifthe

valuesandaccountnumbersinthesortedvouchersmatchthatoftheactivityand whetherornot

thereisanymissingactivitythatisnotinthevouchers.

Packing

Aftertheactivityis checked,allsortedvouchersare counted, bothdebitand creditandthen

packed bytotalingthevouchers.

Attheendofthe completionoftickingaSummaryis prepared whichlistedthedailytotal

amountof# ofcheques,vouchersandreceiptsetc.


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RECORDING OF DEPRECIATION

Andtheotherimportant workthat I havelearnedisthe RecordingofDepreciationofAssets. We

usethestraightlinemethodtorecordthedepreciation byusing Formula;

Dep Amount = Purchase Amount % dep # of days

365

e.g

Dep Amount = 8000 20% 31 = 136 Ans

365

Different % ofdepreciationisgiventodifferentgroupsofAssetssuchas;

ASSETH EAD % OF DEPRECIATION

Office Equipment 20%

Computers 25%

Vehicles 25%

Furniture 10%

Afterrecordingdepreciationmonth wiseto 31 July 2009, I matchthetotal calculateddepreciatedAmount withthe computerized preparedsheeteachforalltheassetsheadsinorderto checkout

thattherecordingofallis correctanddepreciatedamountistellied.

I also checkedouttheINVOICE documentsaboutthe purchaseofeachasset.

3-OPERATIONS DEPARTMENT (REMITTENCE / CLEARING)

Theoperationsdepartmentisresponsibleforthreemajoractivities: Clearing Transfers Remittances

Thesethreeactivitiesaredoneunderonedepartmentinthe BankAlfalah SRA Branch.


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1-ClearingThe clearingdepartmentisresponsibleforthe clearingofall chequesthatareofotherbanksand

branchesthatthe bankreceivesdailyandthedifferenttypesofclearingare:

Inward Clearing Outward Clearing Online Clearing Outward BillsforCollection

Clearing processis Definedas;

A system by which banksexchange chequesandothernegotiableinstrumentsdrawnoneach

otherwithinaspecific areaandtherebysecure paymentfortheirclientsthroughthe Clearing

House called NIFT atspecifiedtimeinanefficient way.

Each bankhas collected chequesas behalfoftheircustomerbutthese chequesarenotdrawnon

theirown banksointhe clearinghouse (NIFT)theyhandoverthese chequestorespective banks

on whichthese chequesaredrawn. Similarlyeach bankreceives chequesfromotherbanksif

any.

Inward ClearingInward clearingtakes place whena BankAlfalah SRA Branchaccountholderdrewsa chequein

favorofa Non- BankAlfalahaccountholder. The processforinward clearingisasfollows:

Chequesarereceived bytheoperationsdepartmentfrom NIFT The bankofficerverifiesall particularsfromtheinstrumentsandthesystemfor

sufficient balanceetc. Ifanyfaultisfound,thentheofficerwillmarkthe chequesasa

return,statingthereasons withthem.

Ifnofaultisfound,thentheofficerwill postthese chequesinthesystem bydebitingthecustomeraccount.

The particularofthereturned chequesareenteredinthe O/W returnofinward clearingregisterandreturnedto NIFT.


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Outward ClearingChequesdrawn by Non-BankAlfalah customersinfavorofBankAlfalah SRA Branch customer

anddepositedat SRA Branchareknownasoutward clearing cheques. The processforoutward

clearingisasfollows:

Chequesarereceived bytheoperationsdepartmentofBankAlfalah SRA Branch The customerinfavorofwhomthe chequeisdrawnis credited Clearingstampsareaffixedonthe chequeandsenttotheotherbankvia NIFT.

Ifany chequereturnsthenextdaysasareturned,the postedentriesarereversedandthe cheque

isreturnedtothe customerwho presenteditandisrecordedinthe chequereturnregister.

Same Day ClearingThisinvolves within cityotherbankslocal cheques process bysameday clearingstamp and

clearwithinsamedayandofabove 2 lac. Basicallythisisthe benefit providedtothe customers.

Regular Clearing

Thisinvolves withinoroutofcityotherbanks cheques process bynextday clearingstamp.

Intercity ClearingThisinvolvesotherbranches cheques whichareofanothercityandreceived byairin whichown

branchisdebitandotheris credit.

Online ClearingOnline clearingtakes place whena chequeisdrawn bya Non-BankAlfalah customerinfavorof

a BankAlfalah customerbutisdepositedat BankAlfalah SRA Branch. The person, whohad

drawnthis cheque,howevershouldhaveanaccountinthe Islamabad/Rawalpindiarea. The

processforonline clearingisasfollows:

The chequeissentasanoutward clearingvia NIFT

Whenthe chequeis cleared,itis creditedtothe BankAlfalahaccountviatheonlinetransfersoftware.

Special crossingand bankendorsementstampsand clearingstamp areaffixedonthe cheque

whichisto be cleared.


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2-Outward Bills for Collection (OBCs)Therearesome chequesthataredrawn bya Non BankAlfalah Accountthatisoutsidethetwin

cityareainfavorofBankAlfalah SRA Branchaccountholdersandthusaretreatedas OBCs.

Orinotherwords;

Whenaninstrumentisdrawnona bank, whichislocatedoutsidethe city,its proceeds can be

collectedthroughamechanism called Outward BillsforCollection (OBC)

Process;

The processforclearingofthe OBCsisasfollows:

Chequesreceived by BankAlfalah SRA Branch Theofficeraffixesthe OBC stamp onthe chequesand writesitsindividualnumberfrom

the OBC register.

Entriesofall OBC chequesare writteninan OBC register. An OBC letteris printed, whichshowsthe chequenumbers,the branchdrawnonand

amount.

Original Chequesareattachedtotheseletterandsenttothemain BankAlfalah branchinthatarea by courier

OBC send and its Realization

OBC scheduleisattached withthe chequeanddispatchedtothemain branchofthat cityfor

collection. Iftheydonothaveany branchinthat city,then cheque will besenttothe Collecting

AgentofBankAlfalahforthat city,andiftheydonothaveany collectingagenteven,then

cheque can besentdirectlytothedrawing branch. Instructionsaregivenonthe OBC schedule

forthe paymentofthat cheque. Contra-liabilityvouchersarealso postedinthesystem. When

OBC isrealized, collection bankpaystheamountthrough IBCA ifitisthesame bankor

through DD ifitisanotherbank. IfDD isreceivedagainst OBC,itis presentedinthe clearing

forcollection. IfIBCA isreceivedfromthe branchforthe paymentofOBC, certainvouchers

are postedinthesystem.

3- TransfersThis processisdoneforthelocaltransferofcheques. Transfersare conducted by BankAlfalah

SRA Branch,usingitssoftware BankSmart. Therearetwotypesoftransfers:

Internal Transfers


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Online Transfers Internal TransfersInternaltransferstake place whena BankAlfalah SRA Branchaccountholderdrawsa chequein

favorofanotherBankAlfalah SRA Branchaccountholder. The processforinternaltransferisas

follows:

Officerofthe bankreceivesthe chequeanddetermineifthe chequeisaninternaltransferbylookingatthe branch code,iftheyaresamethenitisaninternaltransfer

Theofficerwill postentries by credittheaccountinfavorofwhomthe cheque wasdrawnanddebittheaccountthatdrew itinthe bankssoftware.

The cheque will besentforsupervisiontotheoperationsmanagerforauthenticationoftheentries

Whensupervised,the cheque will beaffixed withtheofficialstampsandkept withthebank.

Processing Stamps

Transferchequesare processed byfivetypesofstamps;

1-Transferstamp (sameday)

2-BankAlfalah LTD

3-Banksmart

4-Signatureverified

5-Payees A/c credited (on Back)

Online TransfersAllthosetransfersthattake place whena BankAlfalahaccountholderdrawsa chequeinfavor

ofa BankAlfalah SRA Branchaccountholdersareknownasonlinetransfers. The processfor

onlinetransferisasfollows:

The bankofficercollectsthe chequefromthedepositors. Verifysiftheaccountsareonlineandneedto betransferredonline Postsentries bydebitingtheaccountofthe cheque, while creditingtheaccountonthe

slip attached withthe cheque.


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Sendsthe chequeforsupervisiontotheoperationsmanager Whensupervised,the cheque will beaffixed withtheofficialstampsandkept withthe

bank.

4-RemittancesRemittanceistransferoffundsfromone placetoanotherorfromone persontoanother.

A Remittanceisanimportantservice provided by banksto customersas wellasnon- customers.

Sinceitisnotafreeserviceitisasourceofincomeforthe bank.

Partiesinvolveinremittances

Fourpartiesinvolvedinremittance:-

Remitter Remittee Issuing Bank Paying Bank

Remitter

One whoinitiates,orrequestsforaremittance. Theremittercomestotheissuingororiginating

branch,asksforaremittanceto bemade,anddepositsthemoneyto beremitted. The bank

chargeshima commissionforthisservice.Hemayormaynot bethe branch customer.

Remittee

A Remitteeisalso calledthe beneficiary,orthe payee. The personin whosenametheremittance

ismade. A remitteeisalsotheone whoreceivethe payment.

Issuing Bank

The bankthatsendsoraffectstheremittance,throughdemanddrafts, payorders,orMail

Transfers.

Paying Bank


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Paying Bankalsoknowsasthedrawee branch. The branchon whichtheinstrumentisdrawn. It

hastomakethe payment (usuallylocatedinadifferent city country).

Instrument used

Therearetwomaintypesofinstrumentsthatareusedtotransfermoney, whichareasfollows:

Payorder: Usedtotransfermoney withinthe city Demand Draft: Usedtotransfermoneyoutsidethe city

5-Pay OrdersPayordersaremadetotransfermoney withinthe cityandthisisasafe waytotransfermoneyas

the person whomakesthetransferthrough payorderpaysinadvance. The procedurethatis

carriedoutintransferringmoneythrough payorderisasfollows:

Procedure for Transferring Money through Pay OrderThe customerwill cometothe bankandfillinthe payorderapplication,givinginthedetailsto

whichaccountthemoneyis beingtransferred,theamountetc andattacha chequeto payforthe

payorder. Payorders canalso bemadethrough cash butmainlyitismadethrough cheque.

Theofficerchecksallthedetailsintheapplication,makesoutthe chargesforthetransferthatthe

customerwill payandthenmakethe payorderforthe customerand passthefollowingentry:

CustomerA/c

Payorderpayable

Whenthe customerinfavorofwhomthe payorderwasmadegivesthe payordertohis branch,

theentries passedare:

Payorderpayable

CustomerA/c

Demand DraftDemand Draftisanotherwayin which customers cantransfermoneyoutsidethe city. Thereare

twotypesofsituationsfortransferofmoneythroughdemanddrafts:

Outward DDs


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Whena customercomesto BankAlfalahtomakea DD totransfermoneyoutsidethe cityis

knownasoutward DD. The customerwillfillthedetailsina DD applicationform,and will

attacha chequeorpay cashashe wish.

Thentheofficerwill checkallthedetailsandmakeademanddraftforthe customerand passthe

followingentries:

ForCheque ForCash

CustomerA/C Sundry A/c

Head Office Head Office

Inward DDs

Thisisthe procedureadopted whentheissuing branchsends copyoftheinstrumentasanadvice.

Whenthe bankreceivestheadvice,theofficerwill passthefollowingentries:

Head Office A/c

DD Payable A/c

Whenthe customercomes withthe DD togethis payment,thefollowingentriesare passed:

DD Payable A/c

Cash

Ifthat customerisa BankAlfalahaccountholderthenthefollowingentriesare passed:DD Payable A/c

CustomerAccount

MY ACTIVITIES AND LEARNING IN OPERATIONS DEPARTMENT

Asa partofmyinternship I havelearntallabouttheseclearing and transfer processes bydoing

them practically. I learnedhow tomake chequesandtheirreceipts(slips)andalso cashdeposit

slips by preparingthem.Then I havedonethestampingofalltypesofchequesandslips.I deal

with customers by preparingforthemslipsand cheques.I alsogetknowledgeaboutthe process


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whenthe chequeisreturnedduetoinsufficientfundorotherreasonsthen wereturn backthe

chequetothe party withattachedMEMOandservice chargesaredeductedfromtheiraccount.

I havealsolearntallabouttheseOBCs, DD and pay ordersandhow tomake OBC by

practically preparedit. I alsomadeentryofOBCssequence wiseinthe OBC registerandalso

theentriesofPay Ordersand DDsinregister.

APPLICATION OF CLASSROOM LEARNING

Duringmyinternship I havetoapplyandlearnthesome conceptsthat I havelearnedduringmy

classroomstudiessuchas;

The conceptofdebitand credit How toimproveefficiency by propertimemanagement Customerrelationship managementinordertosatisfythe customer Tolearnandseedifferentmanagement practices How tomanagethe workpressureinthedaysofrelativelyhighactivities The ways by whichorganization provideemployeessatisfactionandmotivation Practically calculatethedepreciationofdifferentfixedassets byusingthestraightline

methodetc

SWOT ANALYSIS


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SWOT standsforStrengths, Weaknesses, Opportunitiesand Threats. SWOT analysisisthe

carefulevaluationoforganizationsinternalstrengthsand weaknessesas wellasits

environmentalopportunitiesandthreats. In SWOT analysisthe beststrategiesaccomplishan

organizationsmission byexploitinganorganizationsopportunitiesandstrengths while

neutralizingitsthreatsandavoidingits weaknesses. Duringmyinternship I alsoobservedthese

and concludeasfollows:

STRENGTHS

Themainstrengthsofthe bankareasfollows;

Beingthe privateorganizationitsmainaimisnottoearn profitonly butalsotosatisfyits customersandthesloganofBAL isalsotherepresentativeofthis purpose BankAlfalah The Caring Bank .

Bankhas AA(Double A)and A1+(A one plus) creditratingforLongtermand Shorttermloansrespectively.

Mainsourceofprofitforanyfinancialinstitutionis public saving whichonly comesfrom public confidenceand BAL isgettingthis confidence whichisoneofthemain

strengthofbank.

BankAlfalahisalsogettingfameinmarketduetoitsname ALFALAH whichisleavingthe Islamic andfavorableimpactonthemindsofpublic.

Consumersurveyhasselected Alfalah credit cardsasthe best productinthemarket withattributesofAffordability.

Withinveryshort periodithasgotasuperb accomplishment whichshowsthecompetencyofitstop management.

BAL is providingthefacilityofMoney Gramtotheallthe people whoareits customersornotandthroughthisserviceithasgottheleadership inMoney Gramasnootherbank

isofferingthisservice.


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WEAKNESSES

Besideallthesestrengths I alsonotedsome weaknesses whicharedescribedas below;

BAL isnotofferingtheloanfacilitytothenewlyestablished businesses becauseitisthebankpolicythatit willgiveloanonlytothose people whoarerunningtheirbusinesses

from 3 years.

BALslending procedureisquite complicatedthatsome peoplearehesitateto comeastheyarerequiringahugefileofdocuments.

BAL isnotofferingany creditfacilitytostudents. BAL isnotofferingtheonlinefacilitytothe customershaving photoaccount. BAL is chargingonline chargesforthetransferofmoney butsomeotherbanksnot

charges.

OPPORTUNITIES

Itismandatorytotrytomake progress with consistencyas wellastoadopt changes withof

time,inorderto copeup with both conditions.BAL hasfollowingopportunities;

BankAlfalahisspreadingitsnetworkoutsidethe boundariesofPakistanandithasnewpoliciesinthe prudential policies.

As BAL is providingthefacilityofIslamic Bankingthroughitsseparate branches,thereisagreat chancetoenhanceitsmarketshareasthe conceptofIslamic Bankingisgain

popularityday byday.

Inadditiontoexcellentroutine banking,ithasearnedagoodname byofferingspecial


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Productlike Car,Homefinance, credit cardfacility. Sothe penetrationofthese productscouldenhancethemarketshare.

Astheincreaseinoverall businessactivityinthe country,theinvestorsarelaunchingvarioustypesofMega Projectsespeciallyinhousingandtextilethe bankhasagreat

opportunitytofinancethese projectsatvery profitableterm.

The SBP hasrevisedtheinterest policyandtheinterestrateshave beenlinked withtheKIBORrates. Dueto whichthe banksinterestratehas beensubstantiallyincreased

which willgreatlyincreasethe banks profitability

THREATS

Threatsarenegativetrendsintheexternalenvironmentalfactors. Asonesideenvironment

provideopportunitiestotheorganization,ontheothersideitalso givessomethreats. Someof

thethreatsassociated with BAL areasfollows;

Oneofthemajorthreattothe bankisthestrong competitionfacing byitsmajorcompetitorslike UBL, Askari Banketc so BAL shouldtrytoupdateits productsand

policiesinorderto beremainsuccessful.

Forlastseventoeightyearsthereis politicalstabilityin Pakistan butnow againanewlayerofpoliticalinstabilityarises whicheffectsalmostallindustriesoperationsincluding

banks.

Duetoeconomic instabilitylike currencydepreciationandinflation,the bankisconstantlyfacingthethreat,e.gin caseofinflationthe peoplehavelow disposalincome

whichmeanslowerdepositsin banks.

Otherinvestmentopportunitieslikeinvestmentin propertyisgiving peoplemorereturnas comparedto banks,it candecreasethedepositsofbanks.

Thereisatrendoflaunchingmega projectsinthe country. Andeveryoneisinvolvedinthistrend withouttakinganymeasureforthesuccessfulnessofthese projects. This can


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resultintothefailureofthis project which canmakeitdifficultforthe bankstorecover

theirfundsfromthesedefaulters.

PEST ANALYSIS

A PEST analysisismerelyaframeworkthat categorizesenvironmentalinfluencesas political,

economic,socialandtechnologicalforces. Theanalysisexaminestheimpactofeachofthese

factors (andtheirinterplay witheachother)onthe business. PEST analysisisausefulstrategic

toolforunderstandingmarketgrowthordecline, business position, potentialanddirectionfor

operations. TheuseofPEST analysis can beseeneffectiveforbusinessandstrategic planning,

marketing planning, businessand productdevelopmentandresearchreports. PEST alsoensures

that companys performanceisaligned positively withthe powerfulforcesofchangethatare

affecting businessenvironment. Theobservationofallthesefactorsisdescribed below;

POLITICAL FACTORS

The politicalenvironmentofany countryisgreatlyaffecttheoperationsofits businessesand

bankingsector.

Politicalfactors performanimportantroleinthe competitionamongthe banksasthebankwhich betteradoptthe changes cansurvivethe best.

Politicalinstabilityasnow adaysaffect badlytheoperationsofbusinessesand banksaswell.

Themoreinfluenceofgovernmentimposethe conditionson banksto workand performaccordingtotheirdemandthis couldaffectthe profitability.

ECONOMIC FACTORS

Economic conditionsofa countryhasstronginfluenceon bankingsectorasthe banksare

mainlydeal withmoney.


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Economic conditionsaffecthow easyorhow difficultitisto besuccessfuland profitableatanytime becausetheyaffect both capitalavailabilityand cost,anddemandforthe

banks.

Ifdemandis buyoutandthe costofcapitalislow,it will beattractiveforfirmstoinvestandgrow withexpectationsofbeing profitable.

Economic situationsdirectlyaffectsthe purchasingandspending powerofpublic sobanksaredirectlysufferfrom changesineconomy.

Duetoeconomic instabilitylike currencydepreciationandinflation,the bankisconstantlyfacingthethreat,e.gin caseofinflationthe peoplehavelow disposalincome

whichmeanslowerdepositsin banks.

SOCIAL FACTOR

Thesocialarid culturalinfluenceson businessvaryfrom countryto country. Thesocial

structureofPakistanis closelytied. Thetrendisnow changingasthegeneral public iseducated

andis pursuing professionalgoals. Customersaremoreawareofmarket conditionsand

availableoptionsand wanttoget bestvaluefortheirmoney.

Thesocioculturalenvironmentencapsulatesdemandandtastes, whichvary withfashionanddisposableincome,andgeneral changes canagain provide bothopportunitiesand

threatsforparticularcompaniesand banks.

Banksshould beawareofdemographics changesasthestructureofthe population byages,affluence,regions,numbers workingandsoon canhaveanimportant bearingon

demandasa wholeandondemandforparticularproductsandservices.

The businessmenandupperclass peoplefocusmoreonthe bankingservicefortheirtransactions,financinganddepositsso bankshavetheirservicesdesignaccordingto

themto besuccessful.

TECHNOLOGICAL FACTORS

Technologyis widelyrecognisedas partoftheorganizationandtheindustry partofthemodelas

itisusedforthe creationofcompetitiveadvantage.However,technologyexternaltotheindustry


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can also be captures and used, and this again can be influenced by government support and

encouragement.

BankAlfalahhasequippedits branches withallmajorIT tools beingusedintheindustrylike ATMs,fax machines, photocopiers, printers,latest computersandagood

connectivityarchitecture. Sothis providesthem competitiveadvantage.

IT informationsystem providesthe banks withthefeasibilityoftheiroperations bankAlfalahhasthis wellorganizedsystem.

Online bankingfacilityisthegreatsuccesstothe bankingsector.whichone providedgoodonlineserviceismoresuccessfullike Alfalah.

MY FINDINGS & SUGGESTIONS

ThemainvisionofBankAlfalahisto becomea premierbankinginstitutioninnotonly Pakistan

butalsoabroad. Inachieving thismission, Bank Alfalahhas been successful by increasing its

revenues,deposit baseand branches in Pakistan. Althoughtherearenomajor problemsat Bank

Alfalah, some of the problems observed are as follows:

1-Technological Advancements

Bank Alfalahhasequipped its branches withallmajor IT tools beingused in the industry like

ATMs, fax machines, photocopiers, printers, latest computers and a good connectivity

architecture,however ithas beenobserved that when its time to work, therearemany failures


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seen in thedifferentdevicesused by Bank Alfalah,especially its connectivityarchitectureand

remainsoffline withthemainserver,that creates problemsforthe customers.

2-Training & DevelopmentThereareeffective training centersof Bank Alfalahat Karachiand Lahore. For Bank Alfalah

SRA Branch, it employees get to train at the Lahore center. The problem with training and

development is that it isonlyavailable for theofficersof the bankandnot for the lowerstaff

members.

3-Job AdvancementsThere isnojob advancements procedureforlowerstaffmembersorjuniorexecutivesthathave

joined recentlyat Bank Alfalah. Themain problem that wasobserved was that the lowerstaff

should betrainedabouttheoperationsofthe bankandalsothejuniorexecutivesshould begiven

promotions bydefiningthe criteriaslike performanceetc.

4-Lack of Employees in some DepartmentsAlthough BankAlfalahisaverygoodemployeroftalented professionalsatdifferent branches,

however,it wasobservedthatthere weresomedepartmentsinthe bankthatlackedthenumber

ofprofessionalsinitthatresultedinefficienciesinthatdepartment.

5-New Products IntroductionBankAlfalahhasa widevarietyoffinancial productsto catertotheneedsofits competitors;

nonethelessthemain problemseenisthatitisnotintroducinginnovative productslikeother

banksin Pakistan,forexample Standard Chartered Bankintroducedaselfdepositingmachine,a

machinethat can beused by consumerstodepositmoneyatanytimeoftheday.


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6-Priority BankingBankAlfalahdoesnothaveany priority bankingdepartmentthat can catertotheneedtohigh

end customer. At BankAlfalah SRA Branch,there werenolarge companysaccountsmainly

becausethere wasnodepartmenttodevelop relationships withlarge customers.

7-Amenities at BranchProvidingamenitieslikeaseparateroomforprayers because currentlytheemployees prayinthe

conferenceroomofthe branch. Alsoseparateroomsshould bemadefortheaccountdepartment

forsortingofvouchersasitisalsodoneinthe conferenceroom.

8-Incentive SchemesTherearenoincentiveschemesforemployeesofBankAlfalahlikescholarship schemesfor

employeesthat wantto pursuehighereducation. BankAlfalahalthoughgivesanumberof

incentivestoitsemployees,like personalloansatnominalmarkup buttheyareonly providedto

employeesthatareinhigherranks. Educationfeesarealsoreturned by BankAlfalahtoits

employees,afterthehavefinishedtheirstudies.

RECOMMENDATIONS

Someoftherecommendationsthat I wouldrecommendtosomeofthe problemsdiscussedinthe

abovesection,thatmightincreasetheefficiencyofboththeoperationsandemployeesofBank

Alfalahareasfollows

1-Technological AdvancementsBankAlfalahshoulddevelop amodern connectivityarchitecturetoeffectivelymaintainan

online connectionofthe branch withotherbranchesandalsothe ATMlink, whichmayinclude

usingmoderntechnologieslikefibercables,routersetc. Also backup linksshouldalso be

developed,


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Alsoa properIT departmentshould beestablishedinall branches, with professionalhavingthe

knowledgetomaintainasecured connection withotherbanks. Alsoscheduled backupsofdata

should bedone withinthe bank.

2-Workshops and CounselingWorkshop programsshould be conductedinevery city,ratherthanjusttwo centers,forall Bank

Alfalahemployees. These workshopsshouldrelatetoallaspectsofbankingandmayalso be

conducted withotherbanksasajoint program.

Alsoas partsofthehumanresourcetraining, counseling programsshould bestartedforjunior

executivesornew entrantsintothe bank,introducingthemtotheirprospectsinthisindustry.

Thelowerstaffemployedat BankAlfalahshouldalso begivena chancetosucceedinlife by

trainingthemindifferentsimplejobsatthe bank, whichmyincludesortingofcheques, phonebankingetc.

3-IncentivesIncentiveschemesshould bedevelopedfortheemployeesthat canhelp motivatethem, which

mightinclude:

Personalloansand carfinancingfacilitiesforallranksofemployees. Scholarship programsforallemployees. Introducingemployeeawardsat branchandregionallevels. Job rotation programstoenhancetheskillsofemployees.

4-Priority Banking and Business Development DepartmentThereisno priority bankingdepartmentat BankAlfalah,likethatofotherbank. A priority

bankingdepartmentshould bedevelopedsoastogiveevenmoreexclusiveand customized

servicestohighend customers withlargedepositaccounts. Also Business Development

Departmentshould bedevelopedinall branches,sothatthey canactivelyfind prospect

customerstotakeup productsfrom BankAlfalah.


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5-Innovative ProductsNew andinnovative productsshould beintroduced by BankAlfalah,likeotherbanksuchas

Citibankand Standard Chartered Bankdevelopsfortheircustomer. Forthis purpose,special

teamsshould bedevelopedthatinclude professionalfromalldepartmentsofthe banksto come

withideas. This process willincreasethenumberofideasgeneratedandeven produce

innovative productsforthe bankthatmightgivethemtheedge.

6-Placements of EmployeesTherearesomedepartmentsinthe bankthatdonothaveenoughemployees, whilesomehave

morethanneeded. Allthis createsinefficienciesandsotheoperationsmanagershouldlookat

thedepartmentofthe branchandsee whereinefficiencieslie,in consultationofwiththeheadsof

thedepartmentsandhireindividuals wheretherearelessemployeesorrotateemployeesfrom

otherdepartments.

7-Amenities in BranchThereshould bea prayerroomdevelopedinall branchesasmanyemployees wantto pray, but

donothavethe properplacetodoit. Also worklikesorting, whichtakesup alotofspaceshould

bedoneinaseparate placeandamenitiesliketelevisionandinternet connectionshould be

placedinthe commonroom,soastogiveemployeesarelaxingenvironment whentheyhavea

break.

CONCLUSION

Ithas beentenyearssincetheestablishmentofBankAlfalah,andsinceitsestablishmentithas

aimedto becometheleading bankofPakistan bythat providesoutstandingservicestoits

customers.The bankhasseen phenomenalgrowthinthe pastfew years byopeningmore

branchesinthe country,increasingthedeposit base, whilealsoincreasingtheassetsand profits

ofthe bank.Theservicesthat BankAlfalah provideshaveagreatmarket penetrationnotonly


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becauseoftheirfeatures butalsothe profitandmarkup ratesthatthey charge. Alsothe products

that BankAlfalah provides catertosectoroftheeconomy.Thetop managementofthe bankis

alwaysdevelopingstrategiesthat cope withunexpected challengestodeliverproductsand

servicesmoreefficiently.Furthermore,asthe bankisgrowing,thenumberofemployeesat Bank

Alfalahareincreasing, whichshowsthat BankAlfalahis being consideredasaanemployer,that

providesitsemployees witha challengingenvironmentto workin, wherethey canharnesstheir

full potentialandshows confidenceasanemployerbytheemployeesofthe bank.Lastlyto

becometheleading bankofPakistan, BankAlfalahhasto benchmarkitsservicestoitsmajor

competitorsintheindustryorthemarketleaderintheindustryand providea continuousmeanof

improvementinitsexisting productsandservices, whileintroducingnew onestotheindustry.

Inthelastsection, I wouldliketogivesomerecommendationsandishopedthatifthey

areimplemented will bring benefitsto BankAlfalah.

IF I WERE MANAGER THERE?

If I weremanager there I would like toapply some changes in the workingofa

bank. As I havenotedthatinsomeofthedepartmentthere wasoverstaffing while

inothersunderstaffingisthere. Duetounderstaffingthereisalotofburdenonone

officer I would like to cover this problem by doing proper hiring in each

department so that employees remain satisfied by thejustificationof their work,


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whichasa result can increase theefficiencyofa bankas it is correctlysaid that

satisfied workerisa productive worker .

I would also try to increase the customer satisfaction by providing them good

serviceas I havenotedduring internship thatsometimes customerbecomeangry

duetorude behaviorof anofficerthis couldaffectthe customerloyalityso I woud

liketo coverit.

I wouldalso like to increase theadvertisementof bank toattractmore customers

andtomakethemawareofourproducts.

FINANCIAL ANALYSIS


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(Ratio analysis)

(On the basis of financial statements @ Dec 31, 2008)\

1-DEBT RATIO DEBT RATIO = Total liability/Total asset

Years2008

(Rs. in 000)2009

(Rs. in 000)

Total liability

Total assets

331946025

348990764

312675308

328895152

Debt ratio

95.1%

95.0%

Thedebtratioshowsthatliabilityhasincreasedinmoreintensityas comparedtotheassetsofthe bank. Thehigherthisratio,thegreaterthegreaterthefirmsdegreeofindebtednessandthe

morefinancialleverageithas. Thereisonlyincreaseof0.1% in 2008 as comparedto 2007.

2-CURRENT RATIO

Current ratio = current assets / current liabilities

Years2008

(Rs.in 000)

2007

(Rs.in 000)

Currentassets 54268378 47817116

Currentliabilities 17142253 25368940


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Currentratio 3.16 1.88

Thisratiomeasuresthefirmsabilityoftomeetitsshorttermobligations. Theabovetableof

currentratioshowsthatthe bankwaslessliquidin 2009 withthe currentratioof1.88 butin2008 currentratioincreasedtothe 3.16 whichisshowingthemoreliquidityofthe bankinthis

year.

3-NET PROFIT MARGIN

Net profit margin= Earnings available for common stock/Interest earned

Years2008

(Rs.in 000)2009

(Rs.in 000)

EA forC-S 1301301 3130229

I-E

31046583

25783871

NPM 4.19% 12.1%

Net profitmarginmeasuresthe percentageofeachsaleafterdeductingallthe costandexpenseincludinginterests,taxesand preferredstockdividend. Theresultshowsthat banksnet profit

marginhasdecreasedfrom 12.1% in2007 to 4.19% in 2008. Thismeasuresthe bankssuccesswithrespecttoearningsonsales.

4-GROSS PROFIT MARGIN

Gross profit margin = (interest earned interest expense)/interest earned

Years2008

(Rs.in 000)

2009

(Rs.in 000)

I-Earned 31046583 25783871

I- Expense 20331194 16620963


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GP(Gross-profit)(I earned-I exp)

10715389 9162908

GPM 34.5% 35.5%

Thisisthe banksratiogross profittoitsearnings. Thisratiomeasuresthe percentageofthe

earningsremainingafterthe bankhas paiditsinterestexpenses. Gross profitratiohasalsodecreasedtothe 1% as comparedtolastyear. Bankhasincreaseditsgross profittolastyearbut

the banksinterestexpenseshavealsoincreased.

5-RETURN ON ASSET

Return on asset = Profit after tax / total assets

Years2008

(Rs.in 000)

2009

(Rs.in 000)

Profitaftertax 1301301 3130229

Total Assets 348990764 328895152

ROA 0.37% 0.95%

ROA has beendecreased by 0.58%,as it was 0.95% in 2007 and 0.37% in 2008. Although thedifference is minor but even it indicates that the asset using efficiencyof the bank isgetting

lower.


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6-RETURN ON EQUITY

ROE= Profit after tax /Common-Stock Equity

Years 2008(Rs.in 000)

2009(Rs.in 000)

PAT 1301301 3130229

C-S Equity 14608523 13766673

ROE 8.90% 22.7%

Theratiothat isrepresentingall thereturnsgenerated byequity isalsoshowing thedecreasing

trend. ROE is the basic indicatorofwhatthe bank isearning compared toequity investment inthe formofhow efficiently the bank is beingmanagedandutilized .There isahugedifference

between the earnings available for the common stockholders in two years as 2008 has muchlesserearning butthe portionoftheequityhasincreasedintheyear2008.

7-PROFIT BEFORE TAX RATIO

PBT Ratio = Profit before tax / Interest earned

Years2008

(Rs.in 000)2009

(Rs.in 000)

Profit beforetax 1794720 4535552

I Earned 31046583 25783871

PBT Ratio 5.78% 17.59%


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Thisisthe bankratioofits profit beforetax toitsearnings. Thisratiomeasuresthe percentageof

earnings beforethe bankhas paiditstaxes.PBT Ratiohasalsodecreasedfrom 17.59% in 2007 to5.78% in 2008.

8-EARNING PER SHARE

EPS = Profit after tax / number of shares

Years2008

(Rs.in 000)

2009

(Rs.in 000)

PAT 1301301 3130229

# ofshares 799500 799500

EPS 1.63 3.92

BAL ishavingdecreasetrendin EPS ratios withthe 3.92 in 2009 and 1.63 in 2008.Itmeansthat

in 2008 Rs. 1.63 wasavailableforthesingle Common stockoutstanding. Thedifferenceshowsthatthemanagementisnot performing well. Thedifferenceisshowingthat bankisearningless

than previousyearon pershare.


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INTERNSHIP REPORT

ON


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Documents

Internship Report Aqeel