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Sumitted To: Chairman Department of Business Administration Subitted By: Name: WAQAR AHMAD
Roll#: AH-525694 Registration#: 09-PJM-02689 Mailing Address: Bank Alfalah Ltd - Islamic Banking Group,310-A Opposite National Hospital, Gulberg Road, Faisalabad- Pakistan Contact#: 0300-9605901, 048-3726807 Date of Submission: 05-04-2013
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ACKNOWLEDGMENT
I owe commencing my empathy and thanks to my Almighty Allah to enabled me to liberation seek out an arduous responsibility with appropriate care and caution in rime interest of myself and to the great credit of my worth teachers , parents and especially elder brother Mr. Ahmad Bilal. Various people being very important for me to widen my report devoid of their support I might never flourish to complete this report. The planning and preparation of this report is not just my efforts owing to the co-operation of my friends Muhammad Javed Iqbal & Abdul Ghafoor who helped me to compile my efforts in the shape of this report.
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The word Bank is derived from Bancus or Banque. History of banking is traced to 2000 B.C in Greece. Priest and Goldsmiths acted as financial agents by keeping money and valuables of people in temples in strong safes. Thus, the first stage in the development of modern banking was accepting of deposits of cash from those who had surplus money with them. The Goldsmiths issued receipts for the money deposited with them, which began to pass from hand to hand in settlement of transaction as people had confidence in the integrity and solvency of Goldsmiths. The receipts were drawn on a way that it entitled the holder to claim that specified amount of money from goldsmiths. These receipts were the earlier bank notes. Thus the second stage in the development of banking was the issues of bank notes. The Goldsmiths discovered all the people who had deposited money did not come to withdraw their finds in cash, only a few people presented the receipts for encashment during a given period of time and they also found that most of the money deposited with them was lying idle. They also found they were being constantly requested for loan on good security. They thus thought it profitable to lend at least some of the money with them to needy persons. This proved profitable for them. Instead of charging interest from deposits, they began to give them interest on money deposited with them. This was the third stage in the development of banking. Through experience, banks came to know that they could keep a small proportion of total deposits for meeting demands of customers for cash and could easily lend the rest. They allowed deposits to draw over and above than the money standing to their credit. They thus allowed the overdraft facility to their deposits and this was the fourth stage in the development of banking. Every bank issued receipts and most allowed 2 overdraft facilities and this caused too much confusion the systems. In order to earn profits,
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banks did not keep adequate reserves to meet demands of customers for cash. This failure on the part of bankers to return money caused widespread distress among people. In order to create confidence among the people, steps were taken to regulate the banking. A conference was held in Nuremberg in 1548 where it was decided that a bank should be set up by the state, which would streamline the banking organization and technique. The first central bank was thus formed in Geneva in 1694. The responsibility of issuing notes is now entrusted to a central bank in each country. With passage of time, activities of commercial bank increased. They dealt with large number of issues such as obtaining funds, advancing loans to business, farmers, households, making investment in stocks, discounting bills of exchange etc. commercial banks are now multiservice organizations and play a very important role in financial markets.
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At the time of partition there were only two banks having the honor to be first commercial bank of Pakistan namely Habib Bank Ltd., which was set up in 1941 with its Head Office in India and the Australasia Bank Ltd., which was established in 1944 with its Head Office in Pakistan. By following the partition, an expert committee was set up and this committee recommended that the Reserve Bank of India being the Central Bank of the undivided India should continue to function as Central Bank of Pakistan and the Indian currency notes would continue to be legal tender in Pakistan till 30th September 1948. Subsequently it was decided to have separate Central Banks and the State Bank of Pakistan was set up and started functioning from 1st July 1948. Thus the history of banking system in Pakistan started with the establishment of the State Bank of Pakistan which was inaugurated by Quaid-e-Azam Mohammad Ali Jinah on 1st July, 1948. Consequently three banks were established which include Muslim Commercial Bank Ltd. formed in September 1948. Bank of Bahawalpur in October 1948 and National Bank of Pakistan in 1949. Habib Bank also transferred its Head Office from Bombay to Karachi due to partition in August 1947 and it was assisted by the State Bank to finance domestic trade of the country.
countries of the World. In July 1991, the Bank of England and International Liquidators accused BCCI of being involved in money laundering to the tune of 1.54 billion dollars. Upon closing down of BCCI, in 1992 the operations of BCCI in Pakistan were acquired by Habib Bank Ltd, and were run as a wholly owned subsidiary by the name of Habib Credit & Exchange Bank (HCEB). HCEB was later acquired (through the process of privatization) by the Abu Dubai Group, in 1997 and its 70% ownership was transferred to Abu Dubai Group. The agreement was signed on July 7, 1997. The bank is engaged in commercial banking and related services as defined in the Banking companies ordinance, 1962.
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Charged with the strength of the Abu Dhabi based consortium, and under the leadership of Highness Sheikh Nahayan Mabarak AlNahayan, Minister of Education, Government of Abu Dhabi, and a prominent member of Royal Family the bank is energized with the vision, envisaging the development of consumer sector in Pakistan. Bank Al-Falah has emerged as one of the leading commercial banks in the financial sector of Pakistan. Bank has made significant contribution in building and strengthening both the corporate and retail banking in Pakistan. Prioritizing its product portfolio in line with consumer needs and wants, the bank is committed to develop products that give more value to its customer be it a simple bank account or complex financing of a major project. Designing product portfolio in response to customers preferences, banks products like Royal Profit, Royal Patriot and Royal Custodial are prime examples of quality and innovation providing timely banking opportunities to its customers. To continuously offer courteous, professional and advanced banking solutions, banks team has recently been rejuvenated by going through training programs with a focus on Information Technology. With a team of talented, service-dedicated professional bankers, Bank Al-Falah commits all its energies, resources and time to cater to all banking and financial needs of customers.
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1.6 MISSION
MISSION
To develop and deliver
the most innovative products, manage customers experience, deliver quality service that contributes to brand strength, establishes a competitive advantage and enhances profitability, thus providing value to the stakeholders of the bank
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1.7.2 MANAGEMENT
Mr. Sirajuddin Aziz Mr. Atif Bajwa Mr. Shakil Sadiq Mr. Arfa Waheed Malik Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr.
Committee
Chief Operating Officer Group Head Corporate & Investment
Banking Ijaz Farooq Group Head Islamic Banking Adil Rashid Group Head Consumer Finance Nadeem Ul Haq Group Head Operations Mohammad Yousuf Group Head Credit & Collections Bakhtiar Khawaja Group HeadTraining & Development A. Wahid Dada Group Head Commercial Banking Hamid Ashraf General Manager Legal Affairs Zahid Ali H. Jamall Chief Financial Officer Mohammad Iqbal Saifee Group Head Audit & Inspection Talib Rizvi Group HeadPriority Banking & Wealth Management Tariq Mir General Manager International Business Ather Shehab Executive InchargeEstablishment & Administration Mahmood Ashraf General ManagerCredit Monitoring Falak Sher Chief Compliance Officer
Imtiaz Ahmad Sheikh Mudassar Aqil
General Manager Information
Mr. M. Mr.
Haroon Khalid
Technology General ManagerHuman Resource & Quality Assurance General Manager Risk Management
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1.7.4 AUDITORS
A.F. Ferguson & Company Chartered Accountants
President (CEO) Senior Executive Vice President Executive Vice President Senior Vice President Vice President Assistant Vice President Officers Grade I, II, III
Clerical Staff Non-Clerical Staff
Cashier
Typist
Clerks &
Guards
Messengers Assistants
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To promote industrial, agricultural and socio economic processes through the active participation of private and public sector in the country.
1.7.9 STRATEGIES
Bank Al-Falah has formulated certain sets of strategies to enable it to achieve its goals and objectives. These strategies are mentioned below: 1. In order to achieve its goals of creating a sound base and presence of efficient modern banking system, Bank Al-Falah has started operation of Automated Teller Machines in all the major areas like Karachi, Lahore, Islamabad and other cities of Pakistan. 2. Bank Al-Falah is committed to building long-lasting relationships through an assertion to service excellence and providing innovative products to meet the changing needs of our valued customers. Although still in its infancy, compared to the exalted banking standards, Bank Al-Falah, backed by a strong Abu Dhabi Group and inspired by the vision of its Board and Management, has built up a strong customer base. The Bank provides a full range of banking services to corporate clients, while applying leading technologies. Today the Bank is well-positioned to provide appropriate banking services to customers. 3. The main focus is building relationships and being known by the way they do business. Management recognizes that a banking relationship requires compatibility, communication, and cooperation and that each customer deserves nothing less than full attention and available resources to meet their financial objectives.
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4. Core value and corporate culture is based on the belief that superior personalized service is the most important product. Bank is in the process of getting to know customers by name and understand their business and personal financial needs. This oneon-one, personalized service quality has served as Bank AlFalah's unique signature since inception and continues to separate it from other financial institutions. 5. The Bank Al-Falah team comprises of some of the most highly skilled and professional financial experts in banking industry. Managers, lenders and trust advisors offer the unique perspective of knowing and understanding in the local economy. The Management focuses its attention on making informed and feasible economic decisions, bringing better returns and more profitability for investors and customers. 6. Keeping in view the unrest among the Islamic Community on the Interest Bearing Banking the Al-Falah is in the process of target marketing and gives its full attention to this segment of a large population over the world. 7. To acquire the reputation and status of bank which operates on international standard, Al-Falah Bank was to get the credit rating of Pakistan Credit Rating Agency, which gave it the AA- and A1+ in the long term and short term respectively.
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Car Financing is one of the major renowned product of Bank AlFalah and can be utilized in terms of Financing of Used Vehicles, Loan against Car, Balance Transfer Facility, Refinancing Facility (only for AlFalah Customers) and it is characterized in terms of: Lowest Mark up Lower Insurance Quick Processing Lower Down Payment
Equity Participation
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pted and
welcomed at locations displaying the VISA logo. It is accepted at nearly 30 million merchants and 870,000 ATMs in more than 150 countries around the globe and over 10,000 establishments in Pakistan. Al-Falah VISA pays for shopping, travel, entertainment, meals and much more.There are 3 major types of Al-Falah credit cards.
of conveniences and benefits combined with the wide reach of Visa Network enabling it to be accepted at more than 840,000 ATMs and 13 million retail outlets around the world, making it the most acceptable Debit Card available in Pakistan.
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Locker Sizes and Fees* Small Rs. 2,000 per year Medium Rs.2,500 per year Large Rs. 3,500 per year
1.10.9
CORPORATE
AND
STRUCTURED
FINANCING
The portfolio concentrates on all aspects of conventional banking as well as the financial needs of corporate sector including dynamic and high value product. Loaning against securities Letter of Credit Letter of Guarantee Demand Finance Cash Finance
DEPARTMENTS WORKED
With an intention of grooming the best executives of the future, the Institute of Business & Information Technology has organized a comprehensive internship-training program. All of us were placed in leading organizations of business arena to gain first hand knowledge and insight into their management and working. So, when I was given the chance of selecting an organization, I opted for Bank Al-Falah. Getting a chance of working in Bank Al-Falah proved to be very beneficial for me. I think that I gained comprehensive insight into the working of a bank. But nothing could have been possible without the co-operation and guidance of the officers of BAL.
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I did my internship at Bank Al-Falah Limited Islamic Banking Sargodha,. It is relatively a small branch with a limited number of departments. Total number of employees in this branch is Nine.The Branch is running smoothly under the leadership of Mr.Nadeem Ejaz Paracha, who is the branch manager of Bank Al-Falah Limited Islamic Banking Sargodha. The departments that I worked during this time are as follows:
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all his subordinates and other department fellows. He deals and resolves conflicts with an effective way of communication and negotiation. There is a great deal of value placed on openness and directness. Mr. Sajjad has a great ability to effectively negotiate and use persuasion when necessary to ensure the smooth working of his department and success of the organization.
2.2
MAJOR
DEPOSIT
ACCOUNT
PRODUCTS
Borrowing funds from different sources has become an essential feature of todays business enterprises. But in the case of bank borrowing funds from outside parties is more vital because the borrowed capital of a bank is much greater than their own capital. Bank borrowing is mostly in form of deposits. These deposits are lent out to different parties such deposit creation is done through open an account in the bank.
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made to and from the account and all account holders receive a Hilal debit card as well. Profit and loss saving account cannot be opened by a business corporation, however can be jointly opened by individuals. Profits are paid at 2% on all account balances.
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Bank Al-Falah presents Al-Falah Kamyab Karobar (KK) - a structured, branded, tier-based current account that caters to your banking needs & aspirations. This product will provide you the opportunity to enjoy free services alongside state of the art banking facilities, linked directly to the deposit balances in your KK account. Al-Falah KK Account can be opened with minimum deposit requirement of Rs 25,000, while the degree of free services will be dependent on the minimum thresholds of respective tier.Its will give you the power to choose from different tiers and avail banking facility from any of the AlFalah branches PAN Pakistan. KK Accounts have strategically been tailored into 3 different tiers, allowing you to choose the allotted free service to your benefit. The three tiers are as following: a. Silver b. Gold c. Platinum The unique tier based structure ensures that you can avail smooth & cost efficient facilities based on your current level of deposits i.e. Higher the deposit, higher the number of free services. Some of the Salient features include (tier-based): Free Online Transactions Free SMS Debit Alert (Subject to availability) Free PO/DD Free Accidental Cover( Valid for up to two People) Free cash deposit across Pakistan
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receives a contradictory statement /order from other signatory, the bank may refuse to act on either of them and insist upon instructions of all the joint account holders.
Locker rent is waived for customers maintaining a deposit of Rs.2 million or above in a current account or US $25,000/- in a current account or US $50,000/-in a saving account or at managers discretion considering the overall relationship of the valued customer.
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2.3
INTERNAL ACCOUNTS
CODES
FOR
BAL
Some of the major account opened at Bank Al-Falah Liberty Market and their internal codes are as follows: Account Type Current Account Profit& Loss Account BBA Account Royal Profits Current Account USD Source: Bank Al-Falah Liberty Market Code 010***** 020***** 0189**** 029***** 018*****
2.4
2.4.1
OR
JOINT)
ACCOUNT
Account opening forms dually signed /completed(by all parties in case of joint accounts) Copy of NADRA issued CNIN or passport. Introduction of BAL account holder. Vernacular form if Signature in URDU. Two photograph with thumb impression in case of illiterate customers.
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Copy of CNIC. Sole proprietors declaration on BAL format required on letter head
Account opening forms dually signed/completed and stamped. Copy of CNIC of all the partners. Partnership deed dully verified by notary public and signed by all the partners.
FormC in case of registered partnership. (Form C contain the all information about the year when the firm is registered)
Introduction.
Account opening forms dually signed /completed and stamp. Copy of CNIC of the entire end. Board Resolution attested by company secretary resolving to open an account in BAL liberty market along with the signing instruction of the
Authorized signatories to operate the account. This resolution must bear Company Seal which must be signed by the two directors (as per the clause in MOA).
Memorandum and Article of Association. (It belongs to the internal & external dealing by firms. In include the information regarding capital, paid in capital, shares of firm, who operate this account etc)
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2.4.5
TRUST/
ASSOCIATION/
CLUB/
NGO
ACCOUNT
Certified of trust deed. Certified Copy of by Laws. List of trustees duly certified. Certificate of registration. NICs of all the trustees. Resolution attested by company secretary resolving to open an account in BAL, liberty market branch along with the signing instructions of Authorized signatories to operate account.
This resolution must bear Trust Rubber Stamp, which must be signed by the trust Secretary. .
This is the first department and is directly interactive with the customers so the main activity in this department is to handle with customers requirements, making their needs fulfilled and make them feel comfortable in the branch and to let then feel that They Really Do Care. The personnel employed in this department really full fills all the required ingredients for the respective designated posts. The bank does not make payment of a cheque bearing a six month or older date if an account is not operated in six months, it is called Dormant Account. Major duties of Account Opening Officer include: Opening new account Maintaining old accounts Issuance of cheque books
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Processing and issuing ATM / Debit / Hilal Cards. Withdrawals Hold mail facility Stop payments Bank statements and bank balance
There are lists of documents which are required for opening a new form that is attached later on with the report. When the report is completed it is then sent to BAL Head Office Karachi, which is confirmed from there and if there is any document missing in the form, it is asked by the concerning branch to provide, but one thing to
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mention clearly here that the account is opened (account number is allotted) instantly to the customer within 4-5 minutes and the customer can use his/her account instantly, which is really a big advantage for the customers.
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any reason the cheque book is destroyed under the supervision of concerning authorities.
2.5.5 WITHDRAWALS
Withdrawals from the account shall be made only by using cheque books supplied by the bank at the request of the customer or by using ATM cards (if allowed)The bank reserves the right to withdraw the cheque book facility without notice if in the opinion of the bank the account is not being maintained or operated in accordance with terms and conditions or for any other reason The customer shall exercise care when drawing cheques and agree that cheque will not be drawn in a manner which may enable a cheque to be altered in a manner which is not readily detectable. The customer shall ensure safekeeping of the
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cheque book and shall not allow access the cheque book to any unauthorized person. In case of loss or theft of the cheque book or any cheque leaf, the customer shall promptly notify the bank in writing, if fails to give such notice to the bank, the customer shall himself be solely responsible for any loss arising out of any fraudulent use of lost or stolen cheque book /cheque leaf.
account irrespective of their actual receipt.The customer accepts all risks and responsibilities in this regard.
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Often customers want to know their accounts balance over the phone and thus I had to tell them their account balances using the banks information system Bank Smart.
2.6 CONCLUSION
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I experienced the environmental and cultural gloom of corporate world of Pakistan. I was quite able to understand the operations. I experienced that the communication is the key weapon of any manager that could lead him to resolve/explore any conflict / situation with great ease. I learned the process of opening and closing of different types of account, dormant accounts, issuance of cheque book, customer dealing, balance statement. In this department, I learned how to operate bank smart. I helped my supervisor in collection of zakat declaration forms from customers which were needed in the process of zakat deduction.
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3.1
Nauman MAnsoor Operations Officer Bank AL-FALAH limited Mr. Nauman Mansoor is one of those managers who are not strictly a follower of the syndrome of high status. He is the incharge of clearing and remittances department of BAL who compliments and connects with others on a human level through inspires great loyalty towards himself by employees. He deals and resolves conflicts with an effective way of communication and negotiation. Intution is his hallmark. He with keen insight is often able to sense what others are thinking and feeling; consequently, they are able to respond perfectly to another through his deeper understanding. He is an excellent manager who lives from a knowledge base, without having a draw attention to it. Flexibility and versatility are valuable qualities of Mr. Nauman Mansoor. Beneath the flexibility and versatility he has ability to be composed and never over-reacted with everyone around.
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In large branches of Bank Al-Falah, all these jobs are done by different departments, but as Bank Al-Falah Liberty Market is a small branch, all these jobs are done by one department, known as operations. Operations department is sometimes also known as the Transact department.
3.2.1 CLEARING
The clearing department is responsible for the clearing of all cheques that the bank receives daily and the different types of clearing cheques that come in the bank are: Inward Clearing Outward Clearing Online Clearing Outward Bills for Collection
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2. The bank officer verifies all particulars from the instruments and the system for sufficient balance etc. If any fault is found, then the officer will mark the cheques as a return, stating the reasons with them. 3. If no fault is found, then the officer will post these cheques in the system by debiting the customer account. 4. The particular of the returned cheques are entered in the O/W return of inward clearing register and returned to NIFT.
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2. When the cheque is cleared, it is credited to the Bank Al-Falah account via the online transfer software.
3.2.2 TRANSFERS
Transfers are conducted by Bank Al-Falah Liberty Market Branch, using its software Bank Smart. There are two types of transfers: 1. Internal Transfers 2. Online Transfers
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Liberty Market account holder. The process for internal transfer is as follows: 1. Officer of the bank receives the cheque and determine if the cheque is an internal transfer by looking at the branch code, if they are same then it is an internal transfer 2. The officer will post entries by credit the account in favor of whom the cheque was drawn and debit the account that drew it in the banks software. 3. The cheque will be sent for supervision to the operations manager for authentication of the entries 4. When supervised, the cheque will be affixed with the official stamps and kept with the bank.
3.2.3 REMITTANCES
There are two main types of instruments that are used to transfer money, which are as follows:
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Pay order: Used to transfer money within the city Demand Draft: Used to transfer money outside the city
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When a customer comes to Bank Al-Falah to make a DD to transfer money outside the city is known as outward DD. The customer will fill the details in a DD application form, and will attach a cheque or pay cash as he wish. Then the officer will check all the details and make a demand draft for the customer and pass the following entries: For Cheque Customer A/C Head Office For Cash Sundry A/c Head Office
3.2.3.2.2 INWARD DDS This is the procedure adopted when the issuing branch sends copy of the instrument as an advice. When the bank receives the advice, the officer will pass the following entries: Head Office A/c DD Payable A/c When the customer comes with the DD to get his payment, the following entries are passed: DD Payable A/c Cash If that customer is a Bank Al-Falah account holder then the following entries are passed: DD Payable A/c Customer Account
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Al-Falah for foreign exchange transfers takes the help of Citi Bank for routing. Procedure for Foreign Transfers The customer will come to Citibank to transfer money to Pakistan. The entries passed will be: Customer A/c Citibank A/c Citibank will then transfer that money to Bank Al-Falah Karachi. The entries are: Citibank A/c Bank Al-Falah Nostro A/c (khi)
Later Bank Al-Falah will transfer the Nostro A/c money into the demand account. Nostro A/c Bank Al-Falah Demand A/c Now when the customer will come to take his money, the following entries will be made: Demand A/c Customer A/c
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3.3
CONCLUSION
My full of learning and understanding of the functions and operations of the clearing department. I got familiar with the process of clearing and its types i.e. inward clearing, outward clearing and intercity, IBC and OBC. I learned about different types of crossing on cheques and about demand drafts, pay orders and telegraphic transfers. As part of my internship, I was responsible to collect cheques from the customers that they deposited, put the official stamps on the different kinds of cheques, register the return cheques in a register and make OBC schedules.
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CHAPTER 4
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versatility he has ability to b composed and never over-reacted with everyone around. Versatility implies an openness, this openness allows him to quickly change on time when necessary. Flexibility and versatility are path ways to speedy responsiveness of Mr. Kashif. He is a kind manager who is full of enthusiasm, with a bounce in their step, with a can-do attitude. He is well committed to his goals and expresses this commitment through optimism. He has a very clear vision about his departments goals and has the ability to articulate it in accordance to the organizations goal and vision.Small actions lead to big picture; he is skillful at doing both: thinking big while also paying attention to details.
Insurance facility from three different insurance companies Tracking devices with all Suzuki Mehran and all Toyota Models Fixed mark up rates Co borrowers facility
The mark up rates for all locally build new cars is a follows: Financing Product Car Loan for Brand New 1Yr 2Yr 3Yr 4Yr 5Yr
Vehicles
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4.2.2
CORPORATE
&
INDIVIDUAL
CAR
LEASING
BALs recently introduced car leasing facility for individuals and corporate sector has set now dimensions for the product. Now you are provide with the option of either to get the vehicle leased or financed.
4.2.3 INSURANCE
Renowned and reliable insurance companies are offering the
competitive rates of insurance. Pay year insurance premium in advance (at the time of down payment) and remaining in the subsequent equal monthly installment. Rates are varied for different insurance companies: Al-Falah refers to various companies; Following are the most commonly used insurance companies which are offered by the BAL. NAME COMPANY Adam Jee Insurance EFU Atlas Insurance
OF
Various car types are insured at a different rate, but for cars above 2,000 cc trackers are used for which extra insurance are provided.
There is a new policy that Suzuki Mehran must are issued only with tracker and the insurance + Tracker rate of 5.5 % P.A.
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4.2.4 MARK UP
Offering lowest rate of markup of 13.5%, (per annum), BAL has captivated a major market share and so is the plan for future. This markup is only for the customers who want to get its car financed or leased for One year only, as the duration of financing increases, the markup increases as well, for the car leased for 7 years (Suzuki Liana) the markup is 16 % P.A. Bank Al-Falah's mark-up rates are as follows:
Pak Suzuki Cars All other local assembled Cars Imported Cars
4.2.5 REPAYMENT
Easily affordable installments on monthly basis in the form of postdated cheques will set you free of depositing your rental cheques every month. BAL is offering a very comfortable and affordable repayment plans that can be customized with the requirement of every customers need. For example is a customer can not pay heavy installments then the there can be a easy installment plan with high down payment, so that the customer doesnt can easily pay back the loan. Another facility BAL is giving is that, you can pay back the entire
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loan (But not before 1 year after disbursement ) at any time with the Plenty of just 5 % of the total amount outstanding.
4.2.6 SECURITY
Hypothecation of vehicle in the name of the Bank Al-Falah Limited. When the car is delivered to the customer, on the registration book, BAL marks a lien and this entitles the bank to use his all rights incase of nonpayment of loans. Customer has already signed in the legal documents regarding hypothecation, so bank can take all the legal actions. Secondly, the duplicate key of the car is in custody of the bank, and if in any case of taking the vehicle back, bank has all the rights to use the duplicate key. When the loan is paid up, its the responsibility of the bank to return back the Original Papers of the car and the duplicate key.
4.2.7 CO-BORROWER
Acting as a co borrower, will enables your family members (spouse, children -18 years and above) to avail the financing facility and can get the car registered in their names as well. This is another a vital facility which is being provided by the bank to entitle is customers a more comfortable business with the bank. CO-borrower is a very important concept and has vital significant like and the most important is that if a person is not eligible to get a car by its own, he/she can contact any person (usually close relative) on his/her documents and statement, and most importantly the name on the Registration book is of that coborrower.
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4.4 ELIGIBILITY
Yes now people get a car loan from Bank Al-Falah to purchase a brand new car if we are: Pakistan National Identity Card holder Over 20 years of age (maximum 60 years in case of salaried and 62 in case of a business person at the time of maturity of the loan)
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manufactured cars(Unregistered) You can get a car loan from Bank Al-Falah to purchase a Brand new car if you are
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o Pakistan National Identity Card Holder o Over 20 years of age (maximum 60 years in case of salaried and 62 in case of a business person at the time of maturity of the loan) o Salaried, Business man of self employed. You can include your spouse, children (18 years and above) or parents as co applicants for the car loan and the car can be registered in their names.
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When this process is complete, a quotation is sent to the car dealer for the specified car, insurance documents are sent to the specified insurer. Later on the car is registered with the Excise and Taxation Officer and is given a number. When all this process is complete, the key to the car is handed over to the customer with all documents relating to the car. When the tenure for the car financing is completed, the bank issues a NOC to the customer. As part of my internship I had to complete the final legal document signed by the customer, by writing in detail about the car, the financing period and witnesses pertaining to the agreement etc.
4.7 CONCLUSION
This department keeps an all in all fascination for me. It is totally a different category from other departments of those I got experience. In this department I got the opportunity to make practice of some most important topics of finance that I have learned in my university and to exercise those concepts in real corporate world like amortization table, determination of interest rate etc.
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CHAPTER 5
Page 64
ACCOUNTS DPARTMENT
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performance oriented and were highly focused towards the end results. He is in a habit of resolving conflicts, if any, with effective communicating skills. He always for the ways to solve clients problems and deals with inter-department with a win approach. His attitude and management style is not of commanding type, but of collaboration and co-operation
5.2 ACCOUNTS
Most important department of the bank is concerned with Revenues Expenses Assets Liabilities These are the pillars of business. The accounts department is supervised by Mr. Hamid Siddique and assisted by Mr. Majid Malik and Mr. Hafiz Naveed. In this department, all the vouchers are posted during one day are sent to Accounts department next day. These vouchers are already posted to computer by the concerned department. The accounts department has to tell that all the vouchers are posted under the right head. Amount, date, stamps, signatures all the requirements for cheques and vouchers are fully checked. If any kind of renovation or construction or rebuilding is done, all is paid from the Accounts department. Like petrol for the car, stationary charges, medical allowances, etc are all paid by this department
Accounts department is totally a backend department and is not linked to customers at all. All the days transactions inside, outside the branch and for other banks are handled with this department. This is one of the most sensitive departments because the customers account are credited and debited solely by this department so there is a very strict check and balance system for this department and each transaction is monitored and rechecked at least twice and supervised even by Manager Operations if amounts are high. Major activities in accounts department are Maintaining accounts of customers Monitoring & posting daily activities and transactions The major activates are to update customers account continuously and on daily basis. Because more of less each and every account is been credited or debited by some amount so the purpose of this department is to make sure that the right persons account is credited and debited.
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5.3.2
MONITORING
&
POSTING
DAILY
5.4 FUNCTIONS
5.4.1 REPORTS
It generates reports like Statement of Account Activity (a report on the activity of all accounts at Bank Al-falah Liberty Market), Statement of Affairs (a report on the assets and liabilities of Bank Al-falah Liberty Market), 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 Al-falah Liberty Market). These reports can be generated at daily, weekly, monthly, quarterly or yearly basis as required by the bank.
5.4.3 BUDGET
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Formulation of yearly budgets & targets in consultation with the branch manager is also done by the accounts department.
5.4.5 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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After all vouchers are collected, they need to be sorted into eight categories: 1. Customer Debit: Includes debit vouchers and cheques 2. Customer Credit: Includes credit vouchers and credit slips 3. Income: Income vouchers 4. Expenditure: Expenses vouchers and payment vouchers 5. Others: Includes vouchers about excise duty, FED, teller, ATM, payables etc 6. Online: Contain online vouchers and online credit slips etc 7. Head Office (H.O): Includes HO vouchers and IBCA, DD advices 8. Bills Payable General (BPG): Includes vouchers and orders, Pay slips etc DD, Pay
5.4.6.4 PACKING
After the activity is checked, all sorted vouchers are counted, both debit and credit and then packed by totaling the vouchers.
5.5
CONCLUSION
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During my I learned the process of checking, maintaining, and record keeping of accounts i.e. all operation of the branch, income from operations and expenses and reporting to the area office about all the operations.
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6.1 STRENGTHS
Bank Al-Falah is considered to be a very sound bank in the financial circles. A bank, where the customers can safely keep their money as long as they want. I am pointing some of the major strengths of the bank
6.1.3 LOCATION
Bank Al-Falah has opened all its branches at commercial areas so that the customers or clients face no problems in reaching to the bank. For example, Circular Road branch for being situated in business and commercial hub of Lahore has second largest volume in trade finance.
relationships with other banks and financial institutions. Towards this pursuit, BAL has developed excellent business relations with foreign banks, whose support in terms of lines of credit extended to the bank, has enabled it to handle the ever-growing trade volumes. During year 2000, the bank handled foreign trade business in excess of PKR 30.6 billion, representing an increase of 92% over the previous year.
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6.2 WEAKNESSES
Perfection is only the claim of Allah Almighty. No other being living or dead can say this for itself. Similarly, Bank Al-Falah also has some shortcomings that need to be mentioned:
6.2.1 ADVERTISEMENT
BAL has formulized 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, BALs major competitor Union Bank Limited has started large media campaign, so keeping in view these threats, Bank Al-Falah should emphasize more on its advertisement.
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6.3 OPPORTUNITIES
Bank Al-Falah has grown up its business with a very high pace and it has got tremendous popularity, even with in a very short span of time. There are many opportunities for the bank and by availing that it can stand amongst the top foreign banks.
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6.4 THREATS
6.4.1 ECONOMIC CONDITIONS
Despite the difficult circumstances that confronted the banking sector in particular and the country in general, Bank Al-Falah has been still highly profitable. But, the facts cant be denied and there might be an adverse impact of such situation.
6.4.2 COMPETITORS
Bank Al-Falah is facing a strong competition by its major competitors; Union Bank and Askari Commercial Bank. Business of these banks is also growing with very high pace. The SWOT analysis of the bank signifies that its strengths overcome its weaknesses and its opportunities are more than its threats. This is a positive sign for any organization.
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CHAPTER 7 SUMMARY
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7.1 SUMMARY
With the development of economies and globalization, exposure to corporate world and its culture is becoming a necessary and valueable experience for college graduates entering the job market. Experience after BBIT brings a significant edge to individuals like me when seeking career employment. Successful completion of internship further develops character; gain an increased awareness of skills, attributes, personel qualities ad values. The banking industry is also reaping the fruits of this economic boom by growing rapidly over the past few years. There are a number of mergers happening in the economy with foreign investments coming into the banking sector. It has been thirteen years since the establishment of Bank Al-Falah, and since its establishment it has aimed to become the leading bank of Pakistan by that provides outstanding services to its customers. The bank has seen phenomenal growth in the past few years by opening more branches in the country, increasing the deposit base, while also increasing the assets and profits of the bank. The services that Bank Al-Falah provides have a great market penetration not only because of their features but also the profit and
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markup rates that they charge. Also the products that Bank Al-Falah provides cater to sector of the economy. The six week experience, as an internee in this organization was very useful. It gave me an opportunity to apply my theoretical knowledge to practical field. It was absolutely an interesting and edifying experience. My foremost objective of this internship project was to apply classroom theory to real work situations, and to gain a richer understanding about them that made me learn more about my chosen field. During my first 2 weeks stay in Bank Al-Falah, I experienced the environmental and cultural gloom of corporate world of Pakistan. I was quite able to understand the operations. I experienced that the communication is the key weapon of any manager that could lead him to resolve/explore any conflict / situation with great ease. After 2 weeks I joined operations department, where I got familiar with the process of clearing and its types i.e. inward clearing, outward clearing and intercity, IBC and OBC. I learned about different types of crossing on cheques and about demand drafts, pay orders and telegraphic transfers. As part of my internship, I was responsible to collect cheques from the customers that they deposited, put the official stamps on the different kinds of cheques, register the return cheques in a register and make OBC schedules. Car finance department keeps an all in all fascination for me. It is totally a different category from other departments of those I got experience. In this department I got the opportunity to make practice of some most important topics of finance that I have learned in my university and to exercise those concepts in real corporate world like amortization table, determination of interest rate etc.
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In my last week of internship I was in accounts department where I learned the process of checking, maintaining, and record keeping of accounts i.e. all operation of the branch, income from operations and expenses and reporting to the area office about all the operations. The working in this department is quite boring like checking accounts on daily basis is a very hectic job. While doing my internship, I realized that this field has more opportunity for career growth. There are loads of advantages connected with this field. One of the foremost advantages is opening up your mind. Starting the day with reading newspaper is like religion for all managers. Every moment, information plays an important role. Indeed, information is a religion for financial organizations. The top management of the bank is always developing strategies that cope with unexpected challenges to deliver products and services more efficiently. An internship is an excellent way to determine if the industry and the profession is the best career option to pursue. I believe an internship program is not only valuable for a fresh graduate, but also for the employers and IBIT itself. For employers, it not only helps to establish a pool of potential employees who have demonstrated their abilities, but also benefits from introduction of fresh and new ideas. On the other side, for IBIT, student feedback can bring a valuable and effective curriculum improvement according to the needs of the ever changing environment. It also reinforces positive relationships with the business community, increases rapport with community interest, and encourages community support for university programs.
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In last I would like to share some of my good experiences and learning that I got familiar with during my stay in Bank Al-Falah. I could say that I found the key to success in corporate world after having my stay in that meadow for six weeks. Firstly, I think, honesty is one of the primary qualities a man should have to be successful. Because in corporate world, if you are honest, people trust you, they trust you with their money. Second would be hard work, there is no substitute for it. You just have to toil in there and the results come. I have always been a firm believer in hard work. If hard work doesnt pay off in six months, it does in nine, if it doesnt pay off in nine, then it pays off in a year, but you just have to keep toiling away. Third is self motivation. I think many other people rely on others to get motivated; you need to just go out there on your own and do your best.
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CHAPTER 8 RECOMMENDATIONS
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with other banks. Also scheduled backups of data should be done with in the bank.
8.1.3 INCENTIVES
Incentive schemes should be developed for the employees that can help motivate them, which might include: Personal loans and car financing facilities for all ranks of employees. Scholarship programs for all employees. Introducing employee awards at branch and regional levels. Job rotation programs to enhance the skills of employees.
8.1.4
PRIORITY
BANKING
AND
BUSINESS
DEVELOPMENT DEPARTMENT
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There is no priority banking department at Bank Al-Falah, 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 all branches, so that they can actively find prospect customers to take up products from Bank AlFalah.
8.1.6 MARKETING
BAL has formulized 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.So, I think that there should be a proper marketing department and advertisement expenditures of the bank should also be increased to improve its visibility and to publicize its financial schemes.
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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.
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Presently, a minimum requirement of 6 week is not sufficient for a promising graduate to really mingle in the shade of corporate world. Graduates can not truly avail the novel benefit of the immense opportunity of internship to learn in such a short span of time i.e. 6 weeks only. So I advocate that internship program must b of a minimum duration of 3 months so that our youth could find a genuine path of its career development.
8.2.2 SEMINARS
There should be proper arrangement through which the students of senior batches who have passed out should come and meet with junior students. In this way the students who are still studying will have the knowledge of jobs. Their exposure to the real business world will be broadened. Their contacts will be increased and when they would need guidance they can get it from their own seniors. Seminars should b held in which the business representatives should visit our institution. In this way, the faculty as well as the students will know that what is required in the business world now-a-days. One need to b equipped with if one wants to get better job. Moreover, the business organizations will also know the caliber of our students. They should know that what subjects are taught to us and what is the value of our degree.
In my view, the courses presently taught are not quite enough to fulfill the continually changing needs of the business world. IBIT must consider other advanced courses for auxiliary improvement of its curriculum, like course Entrepreneurship. In todays world, organizations are now not bound to the borders only. With the increase in the business of organizations and their business approach, it provides with new prospects and unlocks the doors of employments. So there is a need to give exposure of the course International Finance to our BBIT students.
EXECUTIVE SUMMARY
Internship Organization: Bank Alfalah Limited.
In the last few decades banking industry has shown a rapid increase in numbers, which highlights the importance of this industry in all over the world. Banking industry becomes the service industry in its entire mean when the phase of privatization has passed.
As Bank Alfalah thread ropes to be the leader in consumer banking in Pakistan. Their operating strategy has been aligned with key consumer needs highest value and expert service. As custodians of financial services, Bank Alfalah do more than conventional banking. As an extra step towards financial security and freedom for their consumers, they constantly devise safety management regimes to maximize returns on
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hard earned savings and investments. These values form a prime directive that is evident in their responsive teams, present at their nation wide branches, ready to provide all their clients timely assistance.
Cognizant of the continually changing customer needs environment, Bank Alfalah has devised their product portfolio to stay ahead of the emerging consumer patterns.
Branded saving schemes have been set up to address a wide range of customer needs i.e. Royal Profit Account. Alfalah car financing has edged its way to the number one spot in the industry. Giving customers a chance to own the automobiles of their choice at the lowest prevailing markup. Alfalah visa card has been well received in a fiercely competitive market. In the consumer credit arena, the bank offers Home Loans for Pakistanis and NRPs. On-line banking and Money Gram Remittance Services provide to the customers. A countrywide ATM network has been launched. Phone banking will soon be launched in addition to Debit Cards and Micro Financing for consumer durables.
LEARNING
The most difficult thing is the customer dealing because you have to aware from your surroundings. Some times customer may be angry, happy, serious or rude, you have to move according to his mood or will otherwise you will lose your customer. And I have experienced the customer dealing, how to cater a customer, provide customer all kind of information which he/she is needed. I love to work in car finance department it has several reasons, which are as follows.
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Effectively provide customer services. Manage your paper work along with customer dealing. Make your work effective in the limited time. Ways of attracting customers towards your product.
CONTRIBUTION
During my internship program when I was in the car finance department. All the staff of car finance department had gone for conference and I was the only one who managed all the work at that moment as well as I also dealt with problem customers.
MISSION STATEMENT
To maintain a strong grip in the market for professional banking, customer service and profit performance. And for our challenging trek towards realization of our goals. Service, Quality and Innovation will be our preferred tools. Our core objective is to offer both traditional and innovative products, and to deliver unparalleled personalized service to our customers. Our primary focus is on taking service excellence to new heights.
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BIBLOGRAPHY
For this internship report I have conducted personal interviewed the following personals
1. 2. 3.
C.H. James and J.M. Wachowicz.JR, JR. (1998). Foundation of Financial Management (10th Ed}. New Jersey: Prentice-Hall, Inc. Annual report of Bank Alfalah. BAL-WORLD 2005
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4. 5.
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