Post on 03-Apr-2018
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CHAPTER NO 1
Introduction
Overview of the bank
Banking is one of the most sensitive businesses all over the world. Banks play an
important role in the economy and are considered as the backbone of an economy in every
country and Pakistan is no exemption. Banks are custodian to the assets of the general masses.
The banking sector plays a significant role in a contemporary world of money and economy. It
influences and facilitates many different but integrated economic activities like resources
mobilization, poverty elimination, production and distribution of public finance.
Pakistan has a well-developed banking system, which consists of a wide variety of
institutions ranging from a central bank to commercial banks and to specialized agencies to cater
for special requirements of specific sectors. The country started without any worthwhile banking
network in 1947 but witnessed phenomenal growth in decades to come.
By 1970, it had acquired a flourishing banking sector. Nationalization of banks in the
seventies was a major upset to domestic banking industry of the country, which changed the
whole complexion of the banking industry
The era of nineties was the climax of privatization, deregulation and restructuring in the
domestic banking industry and financial institutions. The Muslim Commercial Bank was the first
bank to privatize. Followed by Allied Bank limited, United Bank Limited and Habib Bank
Limited have all been privatized.
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History of bank Alfalah:
History of Bank Alfalah starts from Bank of Credit and Commercial International
BCCI. BCCI was incorporated in Luxembourg on 21st September 1972 with the paid up
capital of US $ 2.5 million. By early 1973, BCCI has established its first four branches in three
countries Luxembourg, UAE, UK. There were three branches of BCCI in Pakistan. These were
Karachi, Lahore, and Rawalpindi. The Lahore branch was opened on 15th December 1978. This
branch was opened at that time when some other international banks like Citi Bank, Bank of
America and American Express etc. were already working. But within a few years this branch
crossed mostly all other banks in case of deposits, advances, imports and exports dealing,
guarantees, travelers cheques, sales etc. This bank was going successfully but an international
conspiracy compelled its management to stop its operations. BCCI was liquidated on July 5,
1991. At that time bank was operating in almost 69 countries of the world. Branches of BCCI in
Pakistan at that time were taken over by Ministry of Finance and SBP. Banks started its
operations with HBL with the name of Habib Credit and Exchange Bank HCEB after valuation
of its assets for 15 million Dollars. Habib Credit and Exchange Bank Limited were incorporated
on June 21st, 1992 as a public limited company under the Companies Ordinance, 1984 and its
commenced banking operations from November 1, 1992.
Bank Alfalah Limited (BAL) is a private bank in Pakistan owned by the Abu Dhabi
Group. Bank Alfalah was incorporated on June 21, 1997 as a public limited company under the
Companies Ordinance 1984. Bank Alfalah is registered at both Karachi and Lahore Stock
Exchange with a ticker name of BAFL. Its banking operations commenced from November 1,
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1997. The bank is engaged in commercial banking and related services as defined in the Banking
companies ordinance, 1962, with the registered office at B.A.Building, I.I.Chundrigar Road,
Karachi. Since its inception, as the new identity of H.C.E.B (Habib Credit and Exchange Bank
Limited) after the privatization in 1997, the management of the bank started implementing
strategies and policies to carve a distinct position for the bank in the market place. This was
further strengthened with a partnership with the Abu Dhabi Group which owns 70% of Bank
Alfalah shares. This allowed the bank to invest more in revolutionary technology to increase its
range of products and services, perceiving the requirements of their customers and matching
them with quality products and service solutions.
Vision
To be the premier organization operating locally & internationality that provides the
complete range of financial services to all segments under one roof.
Mission
To develop & deliver the most innovative products, manage customer experience, deliver
quality services that contributes to brand strength, establishes a competitive advantage and
enhances profitability, thus providing value to the stakeholders of the bank.
Objectives:
o To create an efficient system of banking in Pakistan.o Maintain high profits.o Expanding Islamic banking.o Delivering every service and product under one roof.
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Departments Worked During Internship
I did my internship at Bank Alfalah Limited main branch Islamabad. During my duration
of 6 weeks, I worked in the following departments.
1. Accounts Opening2. Local Remittances3. Foreign Remittances4. Credits5. Trade Finance6.
Clearing
7. AccountsAccount opening Department:
Account opening is the legal contract between customer and bank. It is the most
important and front line department of bank which comes under the retail/ general banking. This
department also deals with collection of cheques or other negotiable instruments, issuance of
cheque book, issuance of ATM card. Following are the types of the accounts,
1. Current Account2. Saving Account
Current Account. It is a non-interest bearing account. The minimum balance
requirement for opening this account is Rs.10,000. Furthermore there is no restriction of
deposition and withdrawal of money from this account at any point of time. All the current
account holders receive a Hilal Debit Card to get benefit from the ATM service of the bank.
Following are the types of accounts which come under the head of current account. They are
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o Basic Banking Account (BBA account)o Simple Current Accounto Alfalah Kamyab Karobar AccountThe detail on each is as under.
Basic Banking Account (BBA account). This account is introduced for low income
people like persons with 25,000 salary and for students who cannot maintain minimum balance
of Rs.10,000 in their accounts because in this account there is no requirement of minimum
balance maintenance. This account is also called as Student Account.
Simple Current Account: A minimum initial deposit of Rs.10, 000 is required to open
this account. Average balance of Rs.10, 000 should be maintained in this account otherwise
Rs.58 will be charged per month to account holder. Online service is available (on customer
demand). No charges for online service.
Alfalah Kamyab Karobar Account:This account is especially for businessmen. Initial
deposit of Rs.5000 is required. It is online by default. It offers flexibility and multiple benefits
for account holders. Average balance maintenance is according to the type of category in which
the customer lies. The category and average balance maintenance in respective category are
o Silver Category Rs 5,000-50,000o Gold Category Rs.50, 000-100,000o Platinum Category above Rs.100, 000
Saving Account:
Saving account is an interest-bearing account. It has following types of accounts,
1. Simple saving account
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2. Royal Profit Account3. Kifayat Account.4. Alfalah Mahan Amdan Account5. Alfalah Mahan Amdan Plus(Term Deposit)
Simple Saving Account. Initial deposit and average balance maintenance is Rs.5,000.
Profit rate is 5 % which is distributed on half yearly basis.
Royal Profit Account. Initial deposit and average balance maintenance is Rs.50,000 for
this account.Profit is distributed at rate of 5 % per year but its calculations are done on monthly
basis. If there is not maintained a balance of Rs.50,000 then the account holder will not get any
profit. For getting profit there must be above Rs.50,000 balance in account.
Kifayat Account. Any Pakistani resident can open this account. This account is for
individual/joint customers only. Other customers like companies, corporate etc. are not eligible
for opening of this account. It is a type of saving account in which minimum initial deposit and
average balance maintenance of Rs.10,000 is required. Maximum amount of deposit in this
account is of Rs.1 million.Profit is paid at the rate of 7% per annum. If balance falls from 10,000
then no profit willbe given to account holder. Profit is given on Quarterly basis. Only 3 debit
transactions are allowed per month.
Alfalah Mahan Amdan Account. Its a term deposit for three years. Minimum balance
of account is Rs.100,000 with an upper limit of Rs 1.5 million. Profit rate is 10 % per annum and
paid on monthly basis.
Alfalah Mahan Amdan Plus (Term Deposit). In this account the amount is fixed for
one year. Minimum balance of account is of Rs.50,000 with no upper limit. Profit rate is 10.5%
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on monthly basis. Free insurance is also given on such type of account. In case of withdrawl of
your money before maturity date then the profit will be distributed as follows,
o If you withdraw your money within 6 months you will get a profit at 5% .o If you withdraw your money between 6-9 months you will get a profit at 8%.o If you withdraw your money between 9-12 months you will get a profit at 9%.
Remittances :
Remittance means the transfer of funds form one account to another or one city to other
city. There are two types of remittances.
1. Local remittances2. Foreign remittances
Local remittances
Instruments which are used for transfer of money are,
Demand Draft Pay order (payment order)
Demand Draft.Demand draft is also another safest instrument of payment. If person A
has account in Bank Alfalah Blue Area branch and wants to make payment to person B who is in
Lahore then demand draft will be a best option for making payment. For making of demand draft
person has to fill remittance form and submit it to the remittance department. Then this
department will issue demand draft in favor of person B. Demand draft can be payable in any
branch of Bank Alfalah. It is valid for 60 days only. Charges for making DD are Rs.87 including
16 % federal excise duty. When the amount of DD is above Rs. 500,000 then branch need to
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have AML (anti money laundering) approval from the concerned branch. An email is sent and
upon confirmation of A/c number and available funds detail, funds are transferred.
Pay Order.Pay orders are made to transfer money within the city and this is a safe way
to transfer money as the person who makes the transfer through pay order pays in advance. If a
person A has to make payment to person B and having account in Bank Alfalah Blue Area
branch and person B is also in same city then pay order is the best instrument of making
payment. Person A will go in Bank Alfalah, fill the pay order form and submit it into remittance
department. Then remittance department will make pay order in the name of person B. Pay order
can be payable only in branch from it is issued. Pay order is also called bankers instrument. It is
valid for 6 months. Pay order can be payable only in branch from it is issued. Pay order is also
called bankers instrument. It is valid for 6 months. Charges for making Pay Order are Rs.87
including 16 % federal excise duty (FED).
Foreign remittances:
This department deals in inward and outward foreign currency remittances through
SWIFT. SWIFT message is generated through software. Only main branch is authorized to
generate SWIFT message. All other branches have to resort to main branch for foreign currency
transfer. Bank Alfalah for foreign exchange transfers takes the help of Citi Bank for routing. For
that it maintains nostro A/c with foreign banks. It requires involving treasury for the transaction.
Branches are the agents of treasury. Treasury is division of bank which makes decision regarding
investment. Foreign currency accounts are also dealt in these sections. Bank Alfalah Blue Area
Branch can open account in foreign currency in four different currencies which are US dollar,
Pounds, Euro and Japanese Yen. All these accounts can be opened with minimum balance of
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500. There is no Zakat deduction, no wealth tax deduction, and no income tax deduction on such
accounts. Reporting of foreign remittances is done with the help of ITRS software, generating
statement S1.
Credits department:
The credit departments of Bank Alfalah work with both SMEs and corporate clients.
There are two major categories of credit line facilities that Bank Alfalah provide to its customers
1. Funded Credit Line Facility2. Unfunded Credit Line Facility
Funded Credit Line Facility. These are the major products that come under the short
term funded credit line facility:
o Current Financeo Karobar Financeo Quick Financeo Term Financeo Lease Finance
Current Finance. Current Finance is a short term facility mainly provided to companies.
It provides the customers with the funds over a period of time, mainly one year. The main
advantage of the current finance facility is that markup is only charged on the utilized part of the
finance facility and is mainly used by companies for their working capital management. The
bank to provide this facility keeps a security; mainly a mortgaged property and can provide 60%
of its assessed value as funds.
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Karobar F inance. Alfalah Karobar Finance is another short term facility that is only
provided to sole proprietors. This facility also has one year validity with markup charged on the
amount used on monthly basis. This facility again provides individuals to maintain their working
capital management and is again given to for a security which is either commercial or residential
property. The conditions for current finance and karobar finance are same with one big
difference, which is that in karobar finance, the individual has to clear all his balance in his
account, once in a year. Credit administration dept approves the proposal and then disbursement
takes place.
Quick Finance: It is also a short term facility launched in 2008 and is designed to cater
the personal needs of the individual e.g marriage, education and trips. The advantage of quick
financing is that markup is charged on outstanding balance. When A/c is nil no markup is
charged. Whereas on other personal a/c fixed markup is charged. Loan is provided against cash
back securities e.g DSC, NSC, prize bonds etc.
Term Finance: Term finance is a long term credit facility of 2, 3, and 5 years. It is also
known as project financing. The important point in this credit facility is, mark up is charged by
the bank on the whole amount of funds either customer utilized the sanction limit or not.
Repayment is done in installments.
Lease Finance: It is also a long term credit facility provided by Bank Alfalah. It is also
known as equipment financing. In this credit facility, the ownership is on the name of bank first,
after repayment of funds the ownership is transferred to the customer.
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Unfunded Credit Line Facility. There are two types of unfunded credit line facility,
which are as follows:
o Letter of Credit (LC)o Letter of Guarantee (LG)
Letter of Guarantees. Letter of guarantees is a guarantee that the bank gives to an
organization on behalf of the bank. Letter of Guarantees are mainly used when a tender for a
specific job is filled by a customer. For guarantee also the customer worth is checked as in the
case of current financing. There are three main types of LGs:
Bid Bond: Bid Bond are filled at the time of filling out the tender and states that if the
company is given the tender, it will start working on it and will not walk away
Performance Bonds: Performance Bonds are issued to the beneficiary, to guarantee him
that the applicant of the tender will perform the contract under a specific period of time.
Performance bonds are issued after the tender is approved of the applicant.
Advance payment Guarantee: This is a guarantee that the bank gives when the
beneficiary (the firm that issued the tender) that pays an advance of tender to the applicant (the
firm that gets the tender), fails to execute the contract according to the covenants then bank will
return that advance amount.
Trade department:
This department controls the trade which occurs across the borders from Pakistan to other
countries or in short foreign trade which includes imports and exports. For this purpose Letter
of Credit is issued by the issuing bank to facilitate the trade between two traders of the
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different countries. It provides security and safety for the payment of a sum of money involves in
trading to the applicant and beneficiary who are doing imports or exports.
Letter of Credit: As it is stated earlier in non-funded credit facility in Credit
Department that Letter of Credit is actually a written undertaking by the issuing bank for the
payment of a sum of money during a specified duration of time on the request of applicant
(buyer) to the beneficiary (seller). It is issued against some securities like mortgage properties,
pledge of stocks etc.
Clearing department:
Previously in banking sector, customers were allowed to draw cheques only on their own
banks. Later, some relaxation was given to facilitate customers in such a way that now customer
can deposit checks of the other banks as well. This facility was the reason for the emergence of
Clearing Department. The Clearing Department deals with inward checking of cheques and
outwards checking of cheques. Basically clearing department deals with payment made through
cheques without involving cash.
Types of Clearing:
Clearing involves two types one is inward clearing which include cheques of Bank
Alfalah Blue Area branch as well as of other branches of Bank Alfalah. These cheques are
provided to bank through NIFT. The other is outward clearing including cheques of other banks
which are separated according to cities and send to the concern banks through NIFT after
attaching bundle covers.
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Accounts department:
Accounts department is a backend department at Bank Alfalah blue area main branch
Islamabad that performs the following functions:
Reports. It generates reports like Statement of Account Activity (a report on the activity
of all accounts at Bank Alfalah), Statement of Affairs (a report on the assets and liabilities of
Bank Alfalah), Statement of Foreign Exchange (a report on the foreign exchange currencies at
the bank) and Statement of Profit & Loss (a report on the income and expenditures of Bank
Alfalah Markaz). These reports can be generated at daily, weekly, monthly, quarterly or yearly
basis as required by the bank.
Income and Expense. The department also needs to calculate the revenues and expenses,
control expenditure and forecast profits every month.
Budget. Formulation of yearly budgets & targets in consultation with the branch manager
is also done by the accounts department.
Activity Checking. Daily activity checking and monitoring is done by the accounts
department of the whole bank
Storage of Records. Accounts Department also has the duty to store vouchers and
system generated reports.
Payments. The accounts department is responsible to pay vendors on behalf of the bank
with authorization from the branch manager. It also has to amortize large payments and calculate
depreciation of branch assets.
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CHAPTER NO 2
PERSONAL EXPERIENCE
Clearing department:
In clearing I had been doing inward and outward checking under the supervision of
clearing officer (Innayat ullah)
Inward Clearing. Inward checking of cheques or other negotiable instruments are done at the
morning time when amounts of cheques are paid by the bank. In inward checking, there are
cheques which are drawn on Bank Alfalah. For example, if person A wants to make payment to
person B through cheque and person As account is in Bank Alfalah whereas person Bs account
is in HBL. Now person A gives cheque of Alfalah to person B and person B will deposit it in
HBL. As HBL cannot cash it directly, it will only stamp the cheque within its own bank branch
and send it back to Bank Alfalah for clearance. This cheque is checked for clearance and it is
called inward clearing. First step of inwards clearing is the verification of cheques in which I
have undertaken following three steps.
a. Check the signature on the cheque.b. Compare the date on the stamp with the date on which cheque is drawn. The date
on stamp should not be more than six months before mentioned on cheque.
c. Verify that the amount in words and amount in figures should be same.After verification, cheques are checked that whether they are according to specification
or not by entering the account number into the system. If cheques are according to requirements
then they are cleared. For cleared cheques following entries are passed in the system.
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Customer account.Dr.
Suspense clearing account.Cr.
Note: suspense clearing account is closed in main office account.
If cheques are not according to specification then it is returned and Rs.250 is charged for
that. Following procedures are followed for returns.
Preparation of Memorandum. For returning of cheque, a memorandum is prepared on a
memorandum form. I had prepared those forms by mentioning three things that is branch of your
own bank along with account number of the cheque holder as well as amount. Then, from the
certain reasons mentioned on the memorandum form I had selected the one which is the reason
for returning of cheque. There are number of reasons mentioned on memorandum form starting
from serial 1 to 13. It includes reasons like insufficient balance, drawers signature differs,
incomplete signature etc. If the reason for returning of the cheque is other than stated in
memorandum form then it is written at 14 point and 14 point is selected and signature of
incharge of department is also taken.
Entering Information in Inward Register. After filling of memorandum form, I had entered its
information in the inward register. Inward register contains information consisting of Account
number, cheque number, drawn on (name of bank on which cheque is drawn), amount of cheque,
reasons for returning. After entering information I had attached cheques with it and made
photocopies for evidence purposes. Original cheque and memorandum form is sent back to the
bank through NIFT and photocopy is retained as a record.
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Outward Clearing. Outward checking involves deposits of cheques. For example, if person C
wants to make payment to person D through cheque but person Cs account is in Bank HBL
whereas person Ds account is in Bank Alfalah. Now person C gives cheque of HBL to person D
and person D will deposit it in Bank Alfalah. As Alfalah cannot cash it directly, it will only
stamp the cheque within its own bank branch and send it back to HBL for clearance through Nift.
It is called outward clearing. Here, we receive payment of cheques and in case of return, charges
will be Rs.250.It includes cheques of other banks and branches and these cheques have attached
deposit slip along with it. For outward clearing following entries are passed in the system.
Suspense clearing account.Dr.
Customer account...Cr.
As a first step, I had separated cheques from their deposit slips and after attaching bundle
covers, they are sent to concern banks through NIFT.
Outward Bill for Collection. When the customer brings a cheque drawn on outstation branches
of Bank Alfalah and other banks which are not under the list of NIFT and they are presented in
Bank Alfalah Blue Area branch then OBC (Outward bill for collection) is prepared. The clearing
officer receives the cheques. During my one week of working here I was responsible for
examining the particulars on the cheque and compared it with the details on pay- in slips. Then I
entered the particulars in the OBC register and affixed the following stamps:
a. Crossing stamp in favor of Bank Alfalah on the face of the cheque.b. OBC # stamp on the face of the cheque.c. Payess account will be credited on realization stamp on the back of the cheque.
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Then I prepare the OBC forwarding schedule do photo copy of forwarding schedule and
cheque for record. The clearing officer passes entry in sysyem by creating a liability. Cheque
after being stamped, are sent to the Bank Alfalah branch of the city where the cheque was drawn.
In case no Bank Alfalah branch in the area, the cheque is sent to the correspondent bank in the
area. If the cheque is related to Bank Alfalah, IBCA is received from the branch and if it was
drawn on another bank, a Draft is received. Particulars on IBCA / Draft are compared with the
retained copy of the OBC forwarding schedule and the reversal entry of liability is passed. On
realization the OBC register is updated.
Inward Bill for Collection. It is prepared when the cheque is drawn on Bank Alfalah Blue Area
branch or any other local bank but they are presented in outstation branches of Bank Alfalah or
other banks. The Clearing officer receives the cheques. As a internee, I was reposible to enter the
particulars of cheques in the IBC (Inward Bill for Collection) register. If the cheque is drawn on
Bank Alfalah then I prepare IBCA and dispatched it to the respective branch, but if the cheque is
dishonored then it is returned to the respective branch with memo. If the cheque is drawn on any
other bank then a draft is prepared and dispatched to the respective branch. I was also
responsible to keeping the reord of IBCA by doing the photo copy of it.
National Institute Of Facilitation and Technology. NIFT stands for national institute of
facilitation and technology. It is an institution which facilitates all the banks to submit their
inward and outward cheques to it and this institution send them to concerned banks.
Role of NIFT. Previously all banks had to directly deal with the State Bank of Pakistan. All the
banks had their accounts in State Bank. At that time, every bank sent their inward and outward
cheques to central bank and then central bank distributed cheques to concerned banks. After
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some lapse of time, NIFT came into action and then this activity is being performed by NIFT to
facilitate banks. Now rider of NIFT comes twice a day to collect inward cheques and outward
cheques respectively and sends them to the concerned banks. NIFT gives a report of inward and
outward cheques and keeps record and provides that record to the concerned bank branch.
(personal communication, Aftab Alam 10th August)
Accounts opening section:
I had been to account opening section for one week and got following experience under
the supervision of account opening officer. She provided me the following information.
Requirements of Account Opening. Requirements of account opening differ from individual to
individual like for students, following documents like university recommendation letter, guardian
undertaking, and CNIC copy are required. In case of serving persons, letter from organization in
which individual is working with the salary statement is mandatory. For a business man, detail of
business on letter head or on stamped paper is required.
Procedure of Account Opening. In procedure of account opening, a person should be of mature
age, sound mind, and not declared bankrupt.
For opening an account opening form (AOF) is filled. I had helped many customers in
filling their forms. And then checked that whether those were correctly filled or not. Introduction
of accounts is the important column in the form. CNIC number must be correctly entered. I had
taken signature of customer on specimen signature card under the supervision of my in- charge.
Signature differ undertaking is filled by those customers who use different signature for
their account from those on CNIC card and Vernacular form is filled by those customers who
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cannot sign in English and uses thumb impression for their identity. On such undertakings, it is
clearly mentioned that banker is not responsible in case of any fraud.
Then form is stamped and entry is made in the account opening register. After opening
the account, letter of thanks is sent to the customer for creating goodwill of the organization. It is
also a way for the verification of customers postal addresses.
Bank Statement. In account opening many customers comes to get their bank statements which
contain all the details of the transaction made by the customer. In order to get the bank statement
a request form is to be filled. If a person who is not a account holder comes to collect bank
statement on behalf of account holder then he has to show the authority letter given by account
holder on which name of third person and his CNIC number should be mentioned.
Cheque Collection. Account opening is also a cheque collection department. I was also
responsible to collect cheques from the customers and get them stamped. I was also responsible
to fill the cheque/ cash deposit slip on behalf of customer, if they cannot fill it by themselves.
Outward cheques. These cheques include cheques of other banks. If a customer having account
in Bank Alfalah Blue Area branch deposits cheque of other bank then he has to fill deposit slip
and get it attached with cheque. These are sent to clearing department for clearance after entering
information in the register. I personally filled many deposits slips of customers and entered that
in the outward register.
Online cheques. If a person has account in Bank Alfalah Blue Area branch and he wants to
make transaction in any other branch of Bank through cheque then such cheques comes under
the head ofonline. For such cheques, online slip called online inter branch transaction request
is filled. I also filled such slips for customers. It contains two heads. For cash transaction, cash
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deposit/ cheque encashment head is filled and for transfer of funds, fund transfer head is filled.
Signature of customer is also mandatory on this slip. After filling the slip, I sent those cheques to
Online Officer who made the transaction through his system.
Issuance of Cheque Book. For issuance of cheque book, requisition form is to be filled. Bank
alfalah gives free initial cheque book to the current account holders. Charges for issuance of
cheque books are Rs.6 per leaf for current account and Rs. 8 for savings account. Normally, 25
page cheque books are issued. Entry is being made in the cheque book register which tells how
many people have applied for cheque books. Then those requisitions are sent to Karachi through
system. After 2 days, cheque books are delivered to bank along with a report and then further
information is entered in the register like card number, date received from head office. I as an
internee had entered all this information in the register. When a customer came to receive the
cheque book, I was responsible to ask him his account number and give him cheque book after
getting receiving acknowledgement receipt of cheque book from him and mentioning time on it.
Then this is entered in the system and print of cheque book activation report is taken out. I was
responsible for cross checking the acknowledgement receipt with this report and have to mention
the time in one column of this report. Before sending these acknowledgements to the accounts
department for keeping them as a record I file of the reports send by head office is maintained. I
as an internee had to enter date and time in the report which is send by the head office and so that
if any customer claims that he didnt collect the cheque book then acknowledgement receipts of
that date are called from the accounts department to make sure about the issuance of cheque
book.
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Reactivation of Dormant Account. According to the State bank rules the customer should visit
bank at least once in the six months otherwise his/her account will be classified as Dormant.
Funds can be deposited in the account but the person cannot withdraw them unless it is
reactivated. If any customer come whose account is classified as dormant I as an internee was
responsible first of all to see his/her original CNIC and have to make sure that it is not expired
and then I fill the Reactivation of Dormant Account form which contains information like
account number, account title and reason for not doing any transaction during the last six
months. After filling the form I took signature of the account holder on the form and then give it
to the In-charge consumer banking for supervision. Meanwhile the customer is asked to make
any DR or CR transaction of any amount. When the forms get supervised the Account Opening
officer activates the dormant account. On the next day, all those accounts which have been
activated in the previous day I took the print of KYC (know your customer) of all those accounts
and then attached them with their respective reactivation of dormant account form. Then I took
the print of activated dormant account report and I was responsible to cross check that report
with the forms.
Other Forms. As an internee I was responsible to fill a no of other forms on behalf of
customers like cheque block request form, change in address form, mobile banking and e-
statement registration form etc.
Accounts department:
Incharge of the Account department or his sub-ordinate daily generates reports of activity
performed a day before of every person in the bank. First of all sorting of all the cheques and
deposit slips or vouchers of each account type are separated and it is done with the help of their
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codes or authorized signatures. Then they are placed with the system generated reports. As an
internee, I was responsible of Activity checking.
Activity checking. I had to do daily activity checking and there are four stages in which activity
checking takes place:
1. Collecting vouchers, cheques etc from all departments2. Sorting Vouchers3. Checking Activity4. Packing
Collecting Vouchers. The first stage of activity checking is collecting all vouchers,
cheques, DDs, pay order, pay slips etc from all departments of the bank. Mainly vouchers come
from the operations department. After collecting these vouchers etc from the departments, I had
to check if all stamps are stamped on these vouchers etc.
Sorting Vouchers. After all vouchers are collected, they need to be sorted into eight
categories:
1. Customer Debit: Includes debit vouchers and cheques2. Customer Credit: Includes credit vouchers and credit slips3. Income: Income vouchers4. Expenditure: Expenses vouchers and payment vouchers5. Others: Includes vouchers about excise duty, FED, teller, ATM, payables etc6. Online: Contain online vouchers and online credit slips etc7. Head Office (H.O): Includes HO vouchers and IBCA, DD advices8. Bills Payable General (BPG): Includes vouchers and DD, Pay orders, Pay slips etc
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Checking Activity.After sorting takes place, daily activity is checked using the statement
of account activity, which contains all daily activity of the accounts in the bank. Activity
checking is done by seeing if the values and account numbers in the sorted vouchers match that
of the activity and whether or not there is any missing activity that is not in the vouchers. I
verified account number and amount from report for credit voucher also cheque number, account
number, and amount for debit vouchers and then placed a mark on the report with the pen as was
instructed by my supervisor.
Packing. After the activity is checked, all sorted vouchers are counted, both debit and
credit and then packed by totaling the vouchers.
Credits department:
The credit department of the bank is the most important and income generating
department. Without this department bank cant work because lending is the most prominent
feature of a bank. Loans, credit, advances are one and the same thing. Nissar ul Amin who is an
RM credits at main branch Alfalah Islamabad told me that bank is an organization or it can be
called as market which has something to sell to its potential and prospective customers. The
things which are to be sold are known as facilities in banking terminology. Together with my
supervisor at credits I managed to analyze the financials of one of the credit customers, TF pipes
which is a subsidiary of Pakistan telecom foundation. I was also part of the meeting in which
renewal of credit facility to TF pipes was being under question. I realized how hard it is to gauge
the competency of the client and maintain relations for future business. I also managed to fill
credit facility application form under the supervision of my supervisor.
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Lease Financing:In lease financing first a customer makes a request on request form.
Bank then demands all of the entity documents along with financials. Then a credit line proposal
is made and credit internal rating (CIR) is checked to know customers credit and risk position.
After checking the qualitative data all the documents are sent to the area office which after
further evaluation sent this proposal to regional office with recommendations. Then it is sent to
area risk (same for whole North region). If area office finds it feasible then they will give
sanction advice to the bank and the facility is approved. (personal communication, Nissar ul
Amin, 13th August, 2012)
Foreign remittances:
The In-charge of foreign currency M. Hanan Akhtar taught me the concepts related to
foreign currency accounts. Foreign currency is transferred through swift message. Bank Alfalah
main branch Islamabad is authorized to generate swift message. All other branches have to send
swift generation request to main branch and then swift message is generated. In addition to
generating swift, department has to report all the foreign currency transactions to SBP through
ITRS (international transaction reporting system). It has three schedules.
S1.. for remittances received in foreign currency.
S2.. for foreign remittances received in PKR.
S3 .. for cash transactions.
Blotters and Form M. Furthermore each day blotters have been prepared. I was responsible for
not only maintaining blotters in which summary of each day transaction is being reported to head
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office, but also I help several customers in filling FORM M which is used for outward
remittances. It can be found in annexures as well.
Outward and Inward remittance register. I also help my supervisor in maintaining OFTT
(outward foreign telegraphic transfer) and IFTT (inward foreign telegraphic) registers. IFTT
register contained details like voucher number, country of remittance, FCY amount, value date,
cover provided to, A/c credited, remarks and date of realization. Whereas, OFTT register has
details of FTT no, customer, name of payee, Amount of FTT, rate, equivalent rupees, initial and
remarks.
Term deposits:
These deposits are repayable on a term on due date. This due date is called maturity date
of the deposits and it is determined at the time the deposit is made. These deposits have tenors
starting from 1 month to 5 years. But now a day Bank Alfalah is extending term deposits facility
of only upto 1 year. They are sometimes book on roll over basis which means that profit is
booked again on maturity. Some people only book principle on roll over basis. If there is a pre-
mature encashment of term deposit then either a penalty is put on the customer or rack rate
(standard rate) is given for profit. (personal communication, Hafiz Salman 28 th August, 2012)
Trade Department:
The in-charge trade told me the process involved in Letter of Credit (LC) which can be
well explained with the help of an example and a diagram in annexure- A
Suppose Mr. B imports 100 computers from Mr. A. they will do an agreement which is
called Performa Invoice which contains the quantity, description etc. Mr. B will go to his bank
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and will show that agreement and will ask his bank to open a LC in favor of Mr. A and tells them
any condition he wants to mention in the LC, like shipment should not be partial etc. Now Bank
Alfalah will open LC and send it to HSBC. This is called LC Issuance. Mr. A then collect that
LC from HSBC which is called LC Advising and will prepare documents according to the
conditions mentioned and give them to the HSBC. Exporter bank then send backs that LC along
with the documents to Bank Alfalah. If the documents are according to the LC, then Bank
Alfalah after receiving the amount of LC give those documents to Mr. B who will go the airport
or seaport to collect his goods.
Dummy files of LC. All the original LCs are sent to head office so to keep the record of it
dummy files are maintained. As an internee, I was responsible to make dummy files. I took
photo copy of every document in the LC and fill the dummy file cover information.
E-Form. Form E is used for Export. I was responsible to check that whether it is filled properly
or not. Then I affix different stamps on it and mention the date. One of the stamps which I affix
on the back side of last page of E form contains the following information like date, e-form #, e-
form amount, amount utilized, balance and initial. I was responsible to fill this information and
maintaining the same kind of data on the excel sheet. A duplicate copy of this form is send to
head office, a triplicate copy along with the documents necessary is send to SBP and one is
maintained with the bank.
E-Form Certification Register. I was also responsible to maintain the customer wise record in
the E-Form register which contains the following information like, Date form certified, E-form #,
Amount FCY, Tenor, Terms of contract, Description of goods, Name of vessels, Destination,
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Date of shipment, Date of lodgment, Reference #, Date of realization, Date of triplicate copy sent
to SBP, Amount Realized, Initial, Remarks.
Advance Payment Register. During my 1 week working in trade department, I also maintained
the advance payment register which contains the following information like, Date, Adv payment
#, Exporter name, Importer name, Remitter Bank, FCY Amount, Pak equivalent, Commodity, E-
form #, E-form value, Amt Utilized, Balance, Initial and Remarks.
Lockers:
Locker facility is also available to customers. But only those customers are given this
facility whose a/c turnover is high. Three types of lockers are offered.
Rent/annum
Small Rs 2000
Medium Rs 3000
Large.. Rs 4000
Locker is given on security which is 3 times that of the rent. Whenever the locker is
surrender the security will be refunded. If locker rent is due and not paid Rs. 200 per month is
charged as a penalty. And if the rent is overdue for two consecutive months then a reminder
letter is sent to the customer. For the employees of Bank Alfalah the lockers rent is half and key
deposit is waived. I was responsible to enter the following details in the register when a customer
comes to operate a locker.
1. Customer name
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2. Time in and time out3. Locker number4. Signatures
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CHAPTER NO 3
SWOT Analysis
Strengths
Innovative products
Centralized banking system
General acceptability
Credit rating
Member of Abu Dhabi group
Coordination among employees
Weaknesses
Software incapability
Time Mismanagement
Management inefficiency
Awaiting customers
Lack of Required staff
No prayer room facility
Opportunities
Expanding customer network
Investment in industrial sector
Threats
Car financing
Economic condition of the country
Competitors
Strengths:
Innovative products. Bank Alfalah delivering and developing the most innovative
products, manage customer experience, deliver quality service that contribute brand strength, and
enhances profitability. Alfalah quick financing and Kamyab Karobar is a clear cut example.
Centralized banking system. Centralized banking system through which bank is able to
satisfy even those Alfalah customers who have account in some other branch in some other city.
The concept of decentralized banking has given Bank Alfalah an edge over its competitors and
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more and more customers will be attracted to this bank. The increase in number of customer will
definitely help the bank to increase deposits.
General Acceptability: Alfalahs biggest strength is that its credit cards are accepted in
more than 150 countries. Bank Alfalah Credit Card is like a partner everywhere and is globally
accepted and welcomed at locations displaying the VISA logo. It is accepted at nearly 30 million
locations in more than 150 countries around the globe and over 18,000 Bank Alfalahs
establishments in Pakistan
Credit Rating: PACRA, a premier rating agency of the country, has rated the bank AA
(double A), Entity Rating for long term and A1+ (A one plus) for the short term. These ratings
denote a very low expectation of credit risk, strong capacity for timely payment of financial
commitments in the long term and by highest capacity for timely repayment in the short term,
respectively. The ratings of first and second and third unsecured listed and subordinated TFC
issues of PKR 650 million, PKR 1,250 million and Rs.1,325 million have been maintained at
AA- (Double A minus).
Member of Abu Dhabi group: Bank Alfalah is member of very strong group which are
running success businesses like Warid, Wateen, UBL, Alfalah insurance and others in Pakistan.
Co-ordination amongst employees: There was a good coordination among employees.
They help each other in case of difficulty. I can be proved by the fact that when I was in clearing
department, the Incharge of clearing department was not finding the one of important vouchers.
Then the staff of that floor helped her in that problematic situation and left their own work for
the time being.
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Weaknesses:
Software incapatability: Bank Alfalah is now shifted to T24 TEMINOS from BANK
SMART for its daily transactions. Although this system has advantages of centralization but
Bank is still facing compatibility issues with it. Due to that customers have to wait and
sometimes they get irritated.
Time Mismanagement: Miss management of time is a major drawback in Bank Alfalah.
The official closing time of the bank is 6 p.m but due to miss management employees have to sit
late. Sometimes employees often leave their desk at 8 p.m.
Management Inefficiency: I have also observed inefficiency of management. Bank
Alfalah is one of the prestigious bank in Pakistan. It should be well equipped with all the
contingency plans with proper backups. During load shedding hours all the systems of the bank
goes off. Only main floor is properly backed up with UPS. Whereas, accounts, clearing, trade,
and foreign remittances do not enjoy any facility of UPS backup. This has created a feeling of
dissatisfaction amongst employees and they feel that they are not part of the bank.
Awaiting Customers: Today in era of competition when all the organizations are trying
to attract and make more and more customers through different strategies and promotions a
disappointed customer proves very dangerous and harmful to the organization. As disappointed
customer may leave the organization and his bad word of mouth can make the potential
customers not to join the organization. I have observed that customer was kept waiting and the
officer/ manger was not on his seat.
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Lack of required staff: Although Bank Alfalah is a very good employer of talented
professionals, however, it was observed that there were some departments in the bank such as
Foreign remittances and accounts that lacked the number of professionals in it that resulted in
efficiencies in that department.
No prayer room facility: Another drawback is that there is no prayer room or common
room for female employees in the bank.
Opportunities:
Expanding customer network: In the prevailing scenario, Bank Alfalah could penetrate
further and could capture various corporate customers in addition to the retail customers by
expanding their network.
Investment in Industrial Sector: Pakistan is facing shortage in energy, although there
are many natural resources in Pakistans far flung areas which can be explored and can produce
ample amount of energy. Bank Alfalah has a golden opportunity of making investment in that
sector. It will provide bank a monetary return for the unlimited time as it is the basic need of the
country and its value cannot be lessen. Similarly, bank can also be renowned as initiator in
exploring the resources and there is a great need of investment in that sector. On a practical note
yes it is difficult, time consuming and costly project but not an impossible task. And taking the
initiative will definitely provide an edge to Bank Alfalah over its competitors.
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Threats:
Car Financing: In Car Financing MCB & HBL are main threats. Moreover leasing
companies are also growing. Currently, only Habib Bank Ltd is offering car financing service out
of seven larger commercial banks. The branches of UBL, ABL, MCB Bank, Standard Charted
Bank, Bank Alfalah Ltd, Askari Commercial Bank, NIB Bank and JS Bank Ltd have almost
halted auto credit disbursement to consumers due to severe completion and intensive rates.
Economic condition of the country: The economic condition of the country is not very
encouraging which is adding to the fierce competition between different banks for business.
Competitors: Bank Alfalah has formalized a lot of products and services for its
customers, even more than other commercial banks, but any advertisement on electronic media
has not been seen. Since, Bank Alfalahs major competitor, Union Bank Limited has started
large media campaign, so keeping in view these threats; Bank Alfalah is emphasizing more on its
advertisement
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CHAPTER NO 4
Recommendations:
I would recommend following things of the problems discussed in the above section, that
might increase the efficiency of both the operations and employees of Bank Alfalah
Technological Advancements. Bank Alfalah should develop a modern connectivity
architecture to effectively maintain an online connection of the branch with other branches and
also the ATM link, which may include using modern technologies like fiber cables, routers etc.
Also backup links should also be developed. Also a proper IT department should be established
in the branch, with professional having the knowledge to maintain a secured connection with
other banks. Also scheduled backups of data should be done with in the bank.
Incentives: Incentive schemes should be developed for the employees that can help
motivate them, which might include:
o Personal loans and car financing facilities for all ranks of employees.o Scholarship programs for all employees.o Introducing employee awards at branch and regional levels.o Job rotation programs to enhance the skills of employees.
Moreover, incentive rates should be according to the rates prevailing in the market and
should be marginally increased.
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Priority Banking and Business Development Department. There is no priority
banking department at Bank Alfalah, like that of other bank. A priority banking department
should be developed so as to give even more exclusive and customized services to high end
customers with large deposit accounts. Also Business Development Department should be
developed in the branch, so that they can actively find prospect customers to take up products
from Bank Alfalah.
Innovative Products. New and innovative products should be introduced by Bank
Alfalah, like other bank such as Citibank and Standard Chartered Bank develops for their
customer. For this purpose, special teams should be developed that include professional from all
departments of the banks to come with ideas. This process will increase the number of ideas
generated and even produce innovative products for the bank that might give them the edge.
Placements of Employees. There are some departments in the bank that do not have
enough employees, while some have more than needed. All this creates inefficiencies and so the
operations manager should look at the department of the branch and see where inefficiencies lie,
in consultation of with the heads of the departments and hire individuals where there are less
employees or rotate employees from other departments.
Amenities in Branch. There should be a prayer room developed in all branches as many
employees want to pray, but do not have the proper place to do it. Also work like sorting, which
takes up a lot of space should be done in a separate place and amenities like television and
internet connection should be placed in the common room, so as to give employees a relaxing
environment when they have a break.
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Targets. Targets assigned to the employees should be realistic and according to the
economic situation of the country.
Conclusion:
I have done six week internship in Bank Alfalah, main branch, blue Area Islamabad as
per required my university for completion of degree. The report comprises of brief details of the
history, background of the bank the main purpose of report is to have detail understanding of the
functions of bank its departments and overall performance. In short I had the study organization
as a whole.
During my internship I had found things very different from those written in books. I had
tried my best to gain practical exposure and work hard to get more and more skills and
understand the decorum of professional life in short period of six weeks.
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References:
Overview of Bank.(2012) Retrieved on 15 September, 2012,
From:http://prr.hec.gov.pk/chapters/2264-2.pdf
Overview of Bank Alfalah.(2012). Retrieved on 15 September, 2012,
from:http://www.bankalfalah.com/about/historical_overview.asp
Vision statement and mission statement.(2012). Retrieved on 16 September, 2012,
from:http://bankalfalah.com/about/vision_mission.asp
PACRA rating.(2012). Retrieved from 18 September, 2012,
from:http://www.bankalfalah.com/about/credit_rating.asp
Corporate objectives,(2012). Retrieved on 17 September, 2012,
From:http://bizcovering.com/business/strategic-goals-and-objectives-of-alfalah-
bank-limited/
http://prr.hec.gov.pk/chapters/2264-2.pdfhttp://prr.hec.gov.pk/chapters/2264-2.pdfhttp://prr.hec.gov.pk/chapters/2264-2.pdfhttp://www.bankalfalah.com/about/historical_overview.asphttp://www.bankalfalah.com/about/historical_overview.asphttp://www.bankalfalah.com/about/historical_overview.asphttp://bankalfalah.com/about/vision_mission.asphttp://bankalfalah.com/about/vision_mission.asphttp://bankalfalah.com/about/vision_mission.asphttp://www.bankalfalah.com/about/credit_rating.asphttp://www.bankalfalah.com/about/credit_rating.asphttp://www.bankalfalah.com/about/credit_rating.asphttp://bizcovering.com/business/strategic-goals-and-objectives-of-alfalah-bank-limited/http://bizcovering.com/business/strategic-goals-and-objectives-of-alfalah-bank-limited/http://bizcovering.com/business/strategic-goals-and-objectives-of-alfalah-bank-limited/http://bizcovering.com/business/strategic-goals-and-objectives-of-alfalah-bank-limited/http://bizcovering.com/business/strategic-goals-and-objectives-of-alfalah-bank-limited/http://bizcovering.com/business/strategic-goals-and-objectives-of-alfalah-bank-limited/http://www.bankalfalah.com/about/credit_rating.asphttp://bankalfalah.com/about/vision_mission.asphttp://www.bankalfalah.com/about/historical_overview.asphttp://prr.hec.gov.pk/chapters/2264-2.pdf7/28/2019 Nat's Internship Report
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Annexures
Annexure-A (personal communication, Mr Adan, 29th August, 2012)
Figure explaining trade department working Organogram
Swift message
Annexure-B (personal communication, Hafiz Salman, 28th August, 2012)
Letter of credit
Annexure-C (personal communication, Mr Adan, 29th August, 2012)
Pay order
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ANNEXURE-A
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Figure 1 (Figure explaining trade department working)
China
Mr. A (Exporter)
Pakistan
Mr. B (Importer)
Importers Bank
Bank Alfalah
Exporters Bank
HSBC
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ANNEXURE-B
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ANNEXURE-C