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Internship Report

Internship Report


Bank Alfalah Limited

Bahawalnagar Campus


Session: 2008- 2010

An attempt by:
Irfan ur Rahman
MBA (Marketing)

Roll No. (15)

Group Morning

Internship Report

Internship Report

Internship Report


There is a pivotal importance of experience between knowledge and work

practically in professional. We seek knowledge from books and want to owe
on it practically but working lifestyle is obviously different from the bookish
knowledge. This is the deep-seated motivator who geared up me to join my
six-week internship program in Banking Sector which provides me an
opportunity to apply my knowledge practically. Mostly student applying
concept differently whom they have learned but they should be faces the new
methodology in the business field. Owing to these new methodologies,
students face various problems in different field of professionalism but with
the laps of time they adopt these squabbles with the office environment and
learn the management behaviors, attitude and premise of work.

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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. Furqan ur Rahman. 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 Mr. Tahir Malik
“Accountant Bank Alfalah Limited” and my friends Muhammad Farhan Hanif
who helped me to compile my efforts in the shape of this report.

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To my parents Bastion

Of patience and grace Owing their

Prayers, the world I could face up to the Tyranny,

Unawareness and coercion those murmur prayers as my best

Possession ‘O’ Lord of Heavens, The Kindness is

The best dwelling, we ever knew the

Spur For all that we do.

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Table of Contents
Table of Contents.................................................................................................. 7
Executive Summary.............................................9
History of Banking............................................................................................... 10
Banking in Pakistan....................................10
Types of Banks...............................................12
CLASSIFICATION OF BANKS.............................................................13
................................................................................................................. 16
INTRODUCTION TO BANK ALFALAH..........................................................16
ORGANIZATION CHART..............................................................17
........................................................................................................................ 17
Board of Directors.......................................18
Bank Alfalah Khanewal Branch.......................................................22
DEPARTMENTS .................................................................................................23
PEST Analysis.......................................................................................................50
Ratio Analysis...................................................................................................... 51
............................................................................................................................ 67
Cash and balances with treasure banks 35,056,012
............................................................................................................................ 67
Balances with other banks 22,722,639...............67
Lending to financial institutions 14,947,435...................67
Investments 99,159,957...............67
Advances 188,042,438..............67
Fixed assets 14,492,194.................67
Other assets 14,649,380.................67
Total 389,070,055.................67
Profit and loss account Dec 31,2009...................................................................67
Interest earned 35,561,312......................................67
Critical Analysis................................................................................................... 68
SWOT ANALYSIS...................................................................................................69

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SUGGESTIONS & RECOMMENDATIONS................................................................71

Conclusion........................................................................................................... 72

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xecutive Summary

Internship experience is very important and helpful before anyone goes

looking for a job. Employers want people who have experience. Internship
gives students the opportunity to grow, academically and personally. When
anyone initially starts out he is going to be doing the basic repetitive task that
every new person had to do. However this is not necessarily negative as it
teaches the person responsibility at the smallest level.

Bank Alfalah Limited (BAL) has 238 branches at different places in Pakistan
and main objective is to provide its customers with safe, secure and reliable
service through wide range of products. The report covers the product
information provided by the bank. Profile of banking industry, profile of
company, company business process, and departmental functions of company,
SWOT analysis of industry and company, Problems and recommendations. I
believe that this report will provide important information regarding my
departments A detailed ratio analysis of Bank Alfalah Limited has been
included as a core part of this report

To analyze the company from various aspects of marketing, SWOT Analysis

has been carried out with devoted efforts. The strengths, weaknesses,
opportunities and threats depict the future of Bank Alfalah Limited.

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History of Banking

Bank is derived from Bancus or Banque it is Italian word. History of Banking is traced to
2000 B.C in Greece. Priests 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 thus was accepting of
deposits of cash from those who had surplus money with them.
BANK can be defined as:

“Institution for receiving, lending, and safeguarding money. It may receive money on deposit,
cash checks or bills of exchange make loans, discount commercial paper, and issue bank
notes (promissory notes payable to bearer).”

Banking in Pakistan

At the time of independence there were practically no industries and resources so it was very
difficult of Pakistan to run its own banking system immediately. There were
487 offices of scheduled banks in the territories now constituting Pakistan.
Therefore in accordance with the provision of India independence Act of
1947, and expert committee was appointed to study the issue. The committee
recommended that the “Reserve bank of India” should continue to function in
Pakistan until 30th September 1948. It was also stipulated that Pakistan would
take over
The management of public debt and exchange control “Reserve bank of India” on 1st
April 1948. Then Indian notes would continue to be legal ender in Pakistan till 30th
September1948. By 30th June 1948, the number of offices of scheduled banks in Pakistan
decline from 487 to 195. In order to establish a full-fledged control bank the Governor

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General of Pakistan Quaid-e-Azam Muhammad Ali Jinnah, inaugurated the state bank of
Pakistan on July1st, 1948.
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
accommodate for special requirements of specific sectors. The country started without any
worthwhile banking network in 1947 but witnessed phenomenal growth in the first two
decades. By 1970, it had acquired a flourishing banking sector. From 1974, which was the
year of privatization, and 1977 the size of the bank deposits were doubled, however this pace
of growth became stagnant during 1977-80. The next five year from 1980 to '85 showed
some improvement but again suffered a slow growth rate from 1985 to 1988.
It was in 1990 when the wheel of banking sector started in reverse direction when
Nawaz Sharif government privatized public sector banks. First of them was Muslim
Commercial Bank (MCB) which was handed over to Mian Mansha.
The other bank privatized by Nawaz Sharif government was the Allied Bank, United Bank
Limited and the Habib Bank Limited has been privatized.

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Types of Banks
Central bank: The bank in a state which is responsible for issuing the state's currency,
regulating the quantity of its money in circulation, maintaining currency reserves, and
acting as a lender of last resort e.g. State Bank Of Pakistan.

Commercial bank: A business firm that maintains custody of money deposited by its
customers and pays on drafts written by its customers. It earns its profits by investing
the money it has on deposit for examples Bank Alfalah, UBL, ABL, HBL, MCB, Prime
Commercial bank etc.

Confirming bank: A bank that makes an independent promise to pay, accept, or

negotiate a letter of credit issued by another bank when the documents named in the
credit are delivered to it.

Development bank: Bank which provides funds for the promotion of the economy of an
area, country, region, or the world for example Asian Development Bank.

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Public Sector Banks

 National Bank of Pakistan NBP

 First Women Bank Limited FWP

 The Bank of Khyber KB

 The Bank of Punjab BOP


 Industrial Development Bank of Pakistan

 SME Bank Limited

 The Punjab Provincial Cooperative Bank Ltd

 Zarai Taraqiati Bank Limited


 Allied Bank Limited

 Arif Habib Bank Limited

 Askari Bank Limited

 Atlas Bank Limited

 Bank Alfalah Limited

 Bank Al Habib Limited

 Faysal Bank Limited

 Habib Bank Limited

 Habib Metropolitan Bank Limited

 JS Bank Limited

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 KASB Bank Limited

 MCB Bank Limited

 Mybank Limited

 NIB Bank Limited

 SAMBA Bank Limited

 Saudi Pak Commercial Bank Limited

 Soneri Bank Limited

 Standard Chartered Bank (Pakistan) Limited

 The Royal Bank of Scotland Limited

 United Bank Limited


 Bank Islami Pakistan Limited

 Dawood Islamic Bank Limited

 Dubai Islamic Bank Pakistan Limited

 Emirates Global Islamic Bank Limited

 Meezan Bank Limited


 Albaraka Islamic Bank B.S.C. (E.C.),

 Barclays Bank PLC

 Citibank N.A. - Pakistan Operations

 Deutsche Bank AG - Pakistan Operations

 HSBC Bank Middle East Limited - Pakistan Operations

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 Oman International Bank S.A.O.G -

Pakistan Operations

 The Bank of Tokyo-Mitsubishi UFJ Limited - Pakistan Operations


 House Building Finance Corporation Limited

 Pak Brunei investment Company Limited

 Pak-China Investment Company Limited

 Pak Iran Joint Investment Company Limited

 Pakistan Kuwait Investment Company Limited

 Pak Libya Holding Company Limited

 Pak Oman Investment Company Limited

 Saudi Pak Industrial & Agricultural Investment Company Limited


 KASHF Microfinance Bank Limited

 Khushhali Bank Limited

 Network Microfinance Bank Limited

 Pak Oman Microfinance Bank Limited

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Bank Alfalah Limited (BAL) is a banking company incorporated in Pakistan on June 21st,
1992 as a public limited company under the Companies Ordinance 1984. Its banking
operations commenced from November 1st 1992. The bank is engaged in commercial
banking and related services as defined in the Banking companies ordinance 1962. The Bank
is currently operating through 238 branches in 75 cities, with the registered office at
B.A.Building, I.I.Chundrigar, Karachi.

Since its inception, the management of the bank has implemented strategies and
policies to shape a distinct position for the bank in the market place.

Strengthened with the banking of the Abu Dhabi Group and driven by the strategic
goals set out by its board of management, the Bank has invested in revolutionary technology
to have an extensive range of products and services.

This facilitates our commitment to a culture of innovation and seeks out synergies with
clients and service providers to ensure uninterrupted services to its customers. We perceive
the requirements of our customers and match them with quality products and service
solutions. During the past seventeen years, we have emerged as one of the foremost financial
institution in the region endeavoring to meet the needs of tomorrow today.

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P r e s i d e n t

C h i e f O p e r a t i n g
o f f i c e r

H e a d C o fo Cu n o t Eu r yn x et R r c y i usE kt x i v e e c u C t hi v a e r a c t e
O p e r a M t i ao n aVs g i c e e r PV r i ce e s i dP A e r c e n c s t o i d u e n n t a

I n f o r m C a o t ri o p n o B r a r a t e n c B h r a n c h
D e p a r Ht m e ea nd M ts a n a M g ea r n s a g e r s

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Board of Directors

H.E. Sheikh Hamden Bin

Mubarak Al Nahayan

Mr. Abdullah Nasser

Mr. Abdull Khalil Al Mutawa
Hawalileel Al-Mansoori

Mr.Khalid Mana Saeed

Al Otaiba
Mr. Ikram Ul-Majeed Sehgal

Mr. Nadeem Iqbal

Mr. Sirajuddin Aziz
Director & CEO

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To be the premier organization operating locally & internationality that provides the complete
range of financial services to all segments under one roof.

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.

 Excellence in service

 Quality performance

 Product innovation

Customer Relationship

“Before we discover we must explore”

Knowing customer and their needs is the key for the success of a bank; Alfalah client
relationship managers are well equipped and well trained to provide most efficient and
personalized service to each and every customer. Alfalah products are as diverse as the
market segment. Alfalah has structured and syndicated financing arrangements, working
capital, replacement facilities, financing of international trade, consumer credit, and small
business loans unparalleled investment products for the individual saver.

Dedicated Professionals

“Unusual efforts on the part of the employees who are apparently ordinary workers is one
of the key indicates of the superior enterprise”

Staff is the most valuable asset of any organization. The human resource philosophy at
Alfalah bank focus on multi-talent hiring, professional grooming, requisite training and
meritocracy based reward system. Staff welfare has been a priority.

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Employee productivity enhancement is organized through in-house and external training

programs. Bank continues to offer opportunity for people to develop their knowledge, skills
and personalities, thus ensuring greater self-fulfillment and progression in the organization.

In short bank Alfalah team comprise of dedicated professionals equipped with a diverse
array of skills and vast experience. The management concentrates its energies on making
informed economic decisions, translating it into greater returns for our investors and
customer. The prudent attitude has created a synergistic organizational structure leading to
improvements in profitability and a sustainable competitive advantage for the bank.

Training & Development

Bank Alfalah is committed to the personal welfare and professional development of all our
team members.

Proper training of human resource is essential, not only for the more productive and satisfied
work force but for also homogenous corporate culture.

The bank continuous to follow its strategy of hiring batches of young and energetic
Management Trainees who are sent to our Training and Development Center for training in
all areas of banking. Our Training and Development Center is a state of the art facility with
an impressive faculty.

Technological innovation

“Modern science is not an option, it is an obligation”

Technology is rapidly changing the way we think, act and do business. It has played pivotal
role in enhancing customer expectation, particularly with respect to speed and quality of

Alfalah bank enjoys a strategic competitive advantage overall domestic players by virtue of
its leadership in technological innovation. Phone banking service and Internet banking
facility allows customer to enjoy routine banking services from anywhere in the world. 365
days a year, 24 hours a day.

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Ethical values

“Professionalism without integrity is like a book without pages”

Because the right may not always be obvious, we must be guided in our every action by set of
well-defined values, governing our decision. Alfalah bank understands that its commitment to
satisfy customer needs must be fulfilled within in a professional and ethical framework. The
following primary core values, providing the guiding principles for the corporate behavior.

 Commitment
 Integrity
 Fairness
 Teamwork

Product portfolio

Not only comprehensive but also customizable to match the needs and preferences of our
customers. These strategic characteristics of our portfolio have helped us to face challenging
economic conditions. Our product lineup continues to fulfill and satisfy the banking
requirements of not just the conventional consumer, but the demanding financial needs of the
corporate sector as well.

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Bank Alfalah Khanewal Branch

Bank Alfalah branch Khanewal was established in September 2006. It is located near to city
police station at Iram hotal.This branch is under the name of Bank Alfalah 89/10-R Khanewal


Operation Manager


Agri Credit Cash Clearing MIS

Security Guards Driver Tea Boy

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During internship-training program of Department of Business Administration I worked in

Bank Alfalah for six weeks. I had the advantage of working in friendly atmosphere at branch
of Bank Alfalah. Here I had the chance to learn a great deal.

During the training I worked in different departments of the bank. I was able to get a good
idea of the working of a bank. It was a knowledgeable experience.

In the following pages I have explained the working of various departments in which I
worked during the period of training. I am very grateful to the officers of Bank Alfalah who
helped me during the training in understanding various aspects of bank as well as after
training in the preparation of Internship Report.

 Accounts opening
 Bills / Remittances
 Accounts Department

 Credits Department

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Business process of this department is as follows:

1. Accounts Opening:

Types of accounts

Foreign currency A/C


JOINT A/C Sole Proprietor A/C Partnership A/C

Individual A/C

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1.) Types of Accounts:

There are three types of accounts and are as follows:

A (Current Account:
Individuals Partners, companies associations, Clubs, Societies, and NGOs are eligible to
open current account. Salient features are as follows:

 Minimum initial deposit Rs.10, 000/-

 Minimum average balance Rs.10, 000/-

 There is no restriction on number of transaction.

 There is no limitation on amount of withdrawal.

 Low balance penalty of Rs.50 per month is charged.

 Business or job must be required for opening all type of Accounts.

 Introduction is necessary.

 Identity card’s copy is required. Original must be seen.

B) Foreign Currency Account:s

Both resident and non-resident Pakistanis as well as foreigners can open foreign
currency accounts.

Foreign currency accounts can be opened either as savings accounts or current accounts.

C) PLS Saving Account:

Saving account are designed to mobilizing savings primarily from a large number of
individuals and household.

Any one or more individuals or partners can open a PLS saving account with the Bank.

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 Minimum initial deposit is Rs.5, 000/-

 A smaller initial deposit can be accepted at the discretion of branch management if

average deposit is expected to remain above RS. 5, 000/-

 Profit on PLS saving account is calculated on minimum monthly balance basis.

 Profit rates are announced and paid biannually in January and July respectively.

 Profit rate for the period ending is 5% per annum. However profit rates are subject to
charge in response to change in the return earned by the Bank on deployment of

There are four sub types of each account which are as follows:

A.)Individual Account:
This type of account is for the customers who are interested in personal/individual
account and such customers can be a salaried person, a sole proprietor who does not want to
open their account on the name of company, a housewife.

B.)Sole Proprietor Account:

This type of account is only for the customers who want to operate an account on
the name of their company.

C.)Joint Account:
This type of account is for the customers who want to operate joint account and this
type of customer can be a house wife, a salaried person, a sole proprietor and a student as

D.)Partnership Account:
This type of account is limited only for the partners of one business and maximum limit
of partners for an account is three.

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Required Documents:

Documents required under opening an account are as follows:

Documents for Individual Accounts:

a. Original CNIC,
b. One copy of any family member CNIC for next of kin,
c. In case of business, business proof (letter head of company or visiting card),
d. In case of job, job certificate,
e. Introduction of any account holder of BAL(account holders who are operating
photo account can not introduce any one),
f. Deposit.

Documents for Sole Proprietor Account:

a. Original CNIC,
b. One copy of any family member CNIC for next of kin,
c. Business proof (letter head of business and visiting card),
d. Stamp,
Name of company


e. Introduction of any account holder of BAL,

f. Deposit,
g. National Tax Number.

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Documents for Joint Account:

a. Original CNIC of all members,

b. One copy of any ones family member CNIC for next of kin,
c. In case of business, business proof (letter head of business and visiting card),
d. In case of job, job certificate,
e. In case of student, student proof,
f. Introduction of any account holder of BAL,
g. Deposit,

Documents for Partnership Account:

a. Original CNIC of all members,

b. Partnership deed,
c. If instructions for operating account are not given on partnership deed then
instructions are required on letter head of company,
d. Stamp,
Name of company


e. Introduction of any account holder of BAL,

f. Deposit,
g. National Tax Number.

Three passport size photo graphs are also required but only in case customer is unable to
signature or as well as due to shaky signatures.

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It is a special product of BAL. It can be treated both as a current account and saving account.
It can be treated as a current account only in case of businessmen as they cannot open saving
account. But by opening royal profit account they can earn profit on the money deposited. In
this account minimum average balance should be Rs.50, 000. Every month profit is
transferred to the account of client. The method of calculation of the profit is the Average
Balance Method- (i.e. average balance of one month) and is paid monthly and calculated
daily basis. High returns on higher balances.


Alfalah Mahana Amdan is a 3 year TDR with expected rate of profit of 10.5% p.a. This term
deposit will provide an opportunity to individual/joint customers to enjoy higher returns that
will automatically be credited to his/her account on 1st working day of each month, but it
depend upon customer when he want to take profit at monthly basis or yearly it is mentioned
at form.

Some salient features

1. Minimum placement limit is Rs. 100,000/- and maximum placement limit is

2. Expected Rate of profit is 10.5% Per annum (as per PLS governing rules)
3. Profit will be automatically credited on the 1st working day of each month into
customers account.
4. Free Personal Accident Insurance coverage up to the deposit amount or Rs.
1,500,000/- whichever is lower.
5. Customer can avail financing facility up to 90% of the deposit(as per banks policy)
6. Any Pakistani resident over the age of 18 can open this account
7. Alfalah Mahana Amdan term deposit can be maintained only at any one BAL branch
with a maximum capacity of Rs 15 Million. An undertaking shall be obtained from
the customer certifying that he/she is not availing Alfalah Mahana Amdan Term
Deposit Receipt facility from any other BAL branch. Alfalah Mahana Amdan TDR

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will be issued for three years tenure with auto renewal facility of principal amount i.e.
the facility will be renewed automatically on maturity.

Alfalah Mahana Amdan TDR will be subject to Zakat, Withholding Tax as well as any other
applicable taxes.

1. Who can avail this facility?

Any Pakistani resident over the age of 18 years can avail this facility. This facility is
offered only to individual/joint customers. Other customers like companies,
corporate etc are not eligible to avail this facility.

2. Is the customer required to have a checking account with BAL?

Yes. The Customer must be maintaining a Pak Rupees checking account with BAL
and TDR facility shall be availed from the same branch.

3. What is the minimum & maximum placement limit for availing this facility?
Minimum placement limit is Rs. 100,000 and maximum placement limit is Rs.
4. What is the tenure of this TDR?
The Alfalah Mahana Amdan Term Deposit Receipt will be issued for three years
tenure with auto renewal facility.
5. When will the profit be credited in the account?
Profit will be credited on 1st working day of each month to the customer’s account
after deducting applicable WHT, etc.
6. Is there any detailed medical examination required before the facility can be
No medical examination/health declaration is required.
7. How insurance benefit will be given in case of joint account?
In case of a joint account the amount of insurance cover will be proportionately
divided (equally) among the joint account holders.
8. Is premature encashment allowed?
Yes, premature encashment is allowed. However, in such cases system will
calculate profit amount at the prevailing rate of normal TDR depending upon the
nearest period bracket completed. For example, if premature encashment is made

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after 1 year & 11 months, the 1 year prevailing profit rate of normal TDR will be
applied on number of days funds remain placed with the bank. Rate differential on
already paid profit will be adjusted from the principal amount.
9. How many Alfalah Mahana Amdan TDR facilities can be availed by one customer?
Customer can maintain Alfalah Mahana Amdan Term Deposit only at any one BAL
branch, with a maximum capacity of Rs. 15 million. An undertaking shall be
obtained from the customer certifying that he/she is not availing Alfalah Mahana
Amdan TDR facility at any other branch.
10. What shall be the procedure if a customer is found maintaining more than one
Alfalah Mahana Amdan TDR facility at any other BAL Branch?
In case a customer is found maintaining placement at more than one branch than all
subsequent Alfalah Mahana Amdan Term Deposit Receipts availed at any other
branch shall be treated as normal TDR and profit shall be paid as per prevailing
normal TDR rates. Rate differential on already paid profit will be adjusted from the
principal amount.


The first step is to fill an “account opening form” by the applicant. Following information is
to be given:

One of the following choices is to be ticked:
1) Rs. 2) US$ 3) Pound 4) J Yen
The account opened can be PLS/saving, current, royal profit account. And BBA
It shows the name of the person in whose name account is to be opened. Once an
account is opened in a specific name, it can never be changed.
The account can be opened as individual or joint account.

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In case of joint account more than one person can operate the account. However
instructions are to be concerning the operation of the account i.e.:
 Jointly:
In this case account cannot be operated if signature of anyone of the account
holder is missing.

 Either or survivor:

In this case if anyone of the account holder of the joint account passes away the
survivor cannot operate the account without getting the succession certificate.
 Anyone of us:
Under this instruction account can be operated with the signatures of any of the
joint account holders.
Following information is also given on the account opening form:
 Name in block letters
In case of joint account the names of both account holders are to be mentioned.
 Father’s/husband’s name
 Occupation:

The applicant must give exact description of occupation e.g. instead of writing

businessman, the nature of business is to be written.

 Name and address of employer

 Nationality

 Country of residence

 Telephone number

 N.I.C Number

 Passport number (if any)

 Date and place of issue

Required in case of N.I.D as well as Passport.

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The name, address and relation are to be specified. This information is required to get
information concerning account holder in case he cannot be contacted. The form is
not accepted if this information is missing.
One of the following choices is to be ticked:
 Limited company
 Public
 Private
 Partnership
 Club/society/association
 Sole proprietorship
 Others
The documents required in each case are different which have been mentioned above. In case
of corporate account it is necessary to give following information:
 Name in block letters
 Brief description of business
 Date of incorporation
 Place of incorporation
 NTN #
 Telephone and Fax number

Instruction of zakat deduction is to be given. However zakat deduction is compulsory in case
of PLS/SAVING ACCOUNTS. But if someone, before the Ramzan submit the Affidavit
form then Zakat could not be deducted in the A/C.
Details involve the account number, Bank, and address. However the form is acceptable
without this information.

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An applicant has to be introduced by someone. The introducer can only be a person who is an
existing account holder of BAL or an Officer of BAL. The applicant has to provider
following information concerning the introducer:
 Name
 Signature: The signatures are to be verified by an officer.
 Account number
 Branch


In case the account holder does not want to receive any correspondence for any reason the
account is marked as “hold mail account”


It is card on which specimen of applicant’s signature are taken for future reference. Every
time a cheque is presented for payment, the signature on the cheque is verified by comparing
it with S.S Card. In case of joint account two applicants can sign on one SS card. In case of
more than two joint account holders more than one SS card are required.


Cheque book is issued to the applicant after filling the cheque book requisition. It contains
the account number issued to the new account holder, serial numbers (range) of cheques in
the book.
 After the applicant fills the application form it is checked for any missing
 After checking the form it is stamped. Round stamp is used in case of any
 Signatures of the applicant are admitted and that of introducer are verified by
using the “admitted stamp” and “verified stamp” respectively.

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The next step is to get the form approved by at least three higher authorities.
After the form is approved the account number is allocated to the applicant and
account is opened in the system. Record is maintained in the register as well. The
allocated account number is written on the application form as well as SSC.

The applicant is asked to deposit initial amount in the account. The amount is deposited
after filling the pay in slip. The initial deposit amount requirement varies with the nature
of account.


After depositing the amount the requisition slip is filled. Against this requisition slip the
cheque book is issued after verifying the signature of the applicant. Every cheque of the
booklet is stamped with the account holder’s name. The cheque book issued contains a
requisition slip for future use. Record of cheque books issued is maintained in “CHEQUE
The SS cards are scanned by the Cash Department and entered into the system for future

After opening the account two letters of thanks are typed on letterhead of BAL. One is
mailed to the account holder and the second one is sent to the introducer. “This is done
to keep a check on fake introduction”
All the application forms are kept in record in numerical order.
In case the signatures of applicant are shaky or in Urdu or he/she uses thumb impression
a “Photo Account” is opened. In this case a passport size photograph is posted on the SS
card as well as form. All the cheques are to be signed in the presence of a BAL official.

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In case of misplacement of cheque book “Form B” is filled. The signatures are verified. A
new cheque book is issued after canceling the old one. A fee of Rs.100 per booklet is
charged. In case of foreign currency account no fee is charged.


If the account holder has to change the address or telephone number he can do so on
giving an application on the printed form. The application is filed after making the


The account holder gives an application. A new SS card is issued and after getting the
new signatures of the account holder it is attached to the old one and kept in record. In
case of partnership or company a request signed by all partners or board resolution is


In case a person wants to authorize another person to operate his account he has to sign a
mandate. By signing this mandate he authorizes that person to sign cheques on his behalf.
The signatures of that person are admitted in the system just like the signatures of any
account holder are admitted i.e. by taking a specimen on “SS CARD”.


For closing an account balance must be nil for foreign currency, saving and Royal Profit
Accounts and current accounts too.
An account is automatically closed by the system if it remains dormant for 6 months.
Before closing an account a liability form is filled and approved by credit department.
Then if the account holder is not liable to pay any sum to BAL, his account is closed in
the system. Record is entered in the register as well.

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After receiving above mentioned documents from customers, steps for opening
accounts are:
a. Account opening form: is filled up (this form contains all the detailed
information about the customer).
b. Specimen signature card: is filled up and required signatures are taken.
c. For issuing cheque book signatures are taken on cheque book requisition slip.
d. In case of change signature from NIC, undertaking perform is assigned by
e. Online transaction Performa: is filled up.
 Maintaining minimum average balance of Rs.100, 000.
 No transaction is to be made for greater than Rs.25, 000.
 For any transaction of greater amount .02% will be charged.
f. If account holder is unable to signature his/her photo account is opened, thumb
impressions are taken instead of signatures in the Performa of picture account
and pasted his/her two passport size photos in specimen signature card and
account opening form.
g. In case of partnership account filled up a Performa of partnership
h. In case of corporate account filled up a Performa of corporate account.
i. All the documents are attached with account opening form.
j. All the details of customer is entered in computer (and as well as a scanned
copy of specimen signature card is also saved.)
k. While opening a new account a KYC (Know Your Customer) form is filled up
for each customer. This is a form which contains all the detail of customer and
is filled up to keep record of customer in one page.
l. Account number is given.

(At the end of the week all account opening forms and documents are arranged and attached
account number wise and are bind in a folder.)

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a. Saving account - 25 leaves
b. Current account - 50 leaves
c. Current account - 25 leaves
d. Foreign currency $ - 10 leaves
e. Foreign currency £ - 10 leaves
f. If account holder does not come to receive his/her cheque book and send any
one else on their own behalf, a photo copy of NIC of that receiver is taken
and issued him/her cheque book and then a letter by TCS is sent to account
holder that this very person have received your cheque book on your behalf.
Customers have to come to receive their first cheque book by their own self,
no one else can receive a first cheque book on the behalf of customer.

In case cheque book has been replaced a Performa is filled up by customer of
indemnity, which is a request for the issuance of new cheque book and as well as
informed bank that “You will be fully indemnified, safe and harmless from any
liability, claim or loss that may arises by the misplacement of my cheque book”.

Procedure is:
a. ATM cards form and Hillal card Performa are filled up and assigned by
customers, (one copy of original CNIC with clear signatures and picture is
required from customers).
b. Then signatures of customers are verified by officers.
c. After signature’s verification submission summary of ATM cards is prepared.
d. ATM forms, Hillal Performa and submission summary are then sent to area
e. ATM cards are prepared and TCS to customers within a month.

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If customer wants to take his/her bank’s statement (record of customer’s
activities in his/her account) he/she is filled up a Performa for the issuance of bank

Remittances Department

Transferring of funds from person to person, and from place to place, constitute
the concept of a remittance. Remittance is very important service provided by
banks to customer as well as non-customer. It is not a free service hence is a
continuous source of income for the bank.



One who make a remittance. He comes to the issuing or originating branch, ask
for a remittance to be made, and deposits the money to be remitted. The bank
charges him for the remittance. He may or not be the bank’s customer.


Also sometimes called the beneficiary, or the payee. The person to whom the remittance
is made. The one who receives the payment.


The bank that effect the remittances, through the Demand Drafts, Telegraphic Transfer, or
Mail Transfer.


Also known as the drawee branch. The branch on which the instrument is drawn. It has to
make the payment. (Usually located in a different city or country)

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1) Demand Draft

2) Telegraphic transfer

3) Mail Transfer

4) Pay Orders

5) Pay Slip

6) Rupee Traveler Cheque


 Demand draft is a written order, drawn by one branch of a bank upon another branch
of the same bank, or upon another bank under special arrangements to pay a certain
sum of money to or to the order of a specified person.
 Demand draft is a negotiable instrument.
 Demand draft is neither issued payable to bearer nor drawn on branches situated
within the same city.
 It is to be insured that the purchaser of Demand Draft is able to at least sign his name.
 Thumb impression is not to be accepted on DD. A person unable to sign and not
having an account may be advised to apply for DD through a literate person to sign on
his behalf. To avoid complications DD are not to be issued to Minors.
 The followings are the parties to a Draft:
 Purchases: Is a person, firm, company or local authority.
 Issuing or Drawing Branch: This issues a draft on another branch.
 Drawee Branch: Is one on which a draft is drawn.
 Payee: Is a person named in the Demand Draft to whom or to whose order the money
is directed to be paid.

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i) An application on printed form is obtain for issue of demand draft. It should

be properly filled in and signed by the purchaser.
Before issuing the demand draft it must be seen that the cheque is in order and
sufficient amount is available in the account of the drawer. If the manager is
satisfied with the creditability of the customer, he may issue a demand draft on
application and subsequently must obtain a cheque. Application form should be
used as a credit voucher, where as the cheque is to be as a debit voucher. The
printed number of the cheque in such cases should be reported on the application
form of the customer.

Precautions for Issuance of Drafts:

i) Scrutiny Of application Form:

ii) Rate of commission / charges:
i) Scrutiny Of application Form:

 There should be our bank’s branch at the place where payment is desired to be
 Full name of the payee should be mentioned.
 Amount in words and figure should not differ.
 Purchaser’s name address and telephone numbers are complete.

ii) Rate of commission / charges

Commission and other charges should be recovered at the rates mentioned in the
bank’s schedule of charges, as advised from time to time; withholding tax will also be
recovered wherever applicable.

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 Transfer of funds from one branch to another branch of the same bank or upon
other bank under special arrangements for the payment to the beneficiary through
Telegram / Telex / Fax is called a Telegraphic Transfer (TT).
 Telegraphic Transfer is not negotiable.
 Telegraphic Transfer of funds to a branch situated with in same city should not be
 Remittance can be made for credit of the account of the payee / beneficiary if
maintaining account with the drawee branch or may be paid in cash. If the
customer wants to send amount through TT then he will provide information of
the beneficiary like id card number, name. Then bank will make a credit advice
and send it to branch on which it should be drawn .Now the beneficiary will go to
that branch and show his ID card number and other information and bank will
make TTR and customer will get that amount from cash department.

The followings are the parties to a TT

i) Applicant: A person, firm, company, or local authority etc who

desire to remit funds from one branch to another branch.
ii) Remitting or drawing branch: Which remits the funds on another branch.

iii) Drawee branch: On which TT is issued.

iv) Beneficiary: The person named in the TT whom the money is payable.

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Precautions for Issuance of TT

 Full name of payee / beneficiary or account number should be mentioned in the

application form along with his address.
 Instruction regarding mode of payment should be obtained i.e. whether the
amount of TT is credited to the payees account or beneficiary should be advised to
receive the amount of the TT from a drawee branch either in cash on proper
Special Request for Enhancement of cheque

Because there is no real time banking so cheque is scanned and fax that the Head


Transfer of funds from one branch to another branch of the same bank within
or outside the city or upon other bank under special arrangement for the payment to
the beneficiary through Mail/ Courier services is called MAIL TRANSFER.

 Mail transfer is not negotiable.

 The funds remitted by Mail transfer are not payable to bearer.

 Like TT , funds can be remitted by MT for the credit of the payee’s Account Or
the payee / beneficiary can be advised to receive the amount from the drawee
branch either on cash on proper identification

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 Payment order is meant for bank’s own payments but in practice these are also
issued to our customer for making payments.
 A pay order is written authorization for payment, made in a receipt form
issued and payable by the bank, to the person named and addressed therein on
his giving a proper discharge thereon.
 It is issued by and drawn upon and payable by the same branch of the bank.
 It is neither transferable nor negotiable and as such it is payable to the payee
named therein.
 Pay order cannot be issued to a minor. Sometime bank don’t want to give its
deposits to customer. So in that case pay order is given to that customer and he
can use it for making payments. When customer wants to cash the pay order
then the amount of the pay order will be debited from the bank. If pay order
submit to other bank like MCB then the process of clearing will be adopt.

Following are the parties to a pay order:

i) Purchaser: Is a person, firm , company or local authority

ii) Issuing / paying branch: which issues / pays on presentation.
iii) Payee: is a person named therein.


Pay slip is for payment of branch expenses.

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BAL always provide to its customer’s different type of services. Which are safe and
quality services. RTC is very popular among the people of the country. The bank provides
RTC in the following categories
 1,000

 5,000

 10,000

Purchases of RTC

The person who wants to purchase RTC is required to fill a form. The form contains
name, address, amount or denomination and other necessary information. The purchaser
deposits the amount in the bank and gets a voucher from the cashier. And then RTC is
providing to the purchaser. Before handing over to the purchaser, signature is taken from
him on the RTC and on the copy of form. BAL rupee traveler’s Cheques are acceptable in
all the branches of BAL in Pakistan.


Following are some features of RTC.

 It is acceptable in all the branches of BAL in Pakistan.

 In case of lost the purchaser inform to BAL in 24 hours. Then there is no way of
loss of purchaser and his amount is safe.
 Available easily in all the branches of BAL Acceptable by major businesses of

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It is the procedure for payment and collection of instruments lodged inward or outward
through “State Bank of Pakistan. It is the transfer of funds from one branch of bank to the
other branch of the same bank or the other bank on which the instrument is drawn, without
involving cash through State banks clearing house. The procedure of clearing is facilitated by
NBP (NATIONAL BANK OF PAKISTAN) on the behalf of State Bank of Pakistan The
clearing procedure requires 2 days for completion if it is outward.

CLEARING can be of two types:


All the instruments (i.e. cheques, pay orders, travelers cheques, demand drafts), which are
originated by some other banks, and are presented to the BAL are included in outward


All the instruments, which are originated by BAL and are presented for payment to the bank
by NBP, are part of inward clearing.



It is used on all types of cheques. It shows the Branch name of the Bank.


It is used on the front side of the cheque and it indicates the presenting date of the
cheques. If the cheques is dishonored and deposited again for clearing, the clearing stamp is
used again with new date of presenting. A cheque cannot be presented without clearing

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It shows that cheque is meant for outward clearing “Payee’s account only” is to be

Credit Department

Advances department plays a vital role in the functions of a bank. In BAL its sharing ration in
profit is high. The main source of Advances department is mark up. Their Advances
department is working under the trustworthy, enthusiastic and committed a staff. The efforts
of the staff are providing good services to their customers and getting a good amount for
contributing the overall profit of BAL. The BAL provides loans to customers. These loans are
sanctioned by the head office. There are different types of loans that are provided to
customers. The types are as under.

Current Finance

The bank provides Current Finance for short period less than one year. The customers Pay

markup in current finance on monthly basis. On the expire date of limit he will just pay

principal amount.

Term Finance

Customer utilized the sanction limit or not the markup will be charged on whole amount.

Customer can withdraw whole amount at once.

Different document required for facilities

1) Current Finance

1. Demand promissory note

2. Letter of arrangement
3. Letter of continuity
4. Markup agreement
5. Latter of authority of debit markup

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2) Term finance

1. Demand promissory note

2. Letter of disbursement
3. Letter of arrangement
4. Markup agreement
5. Letter of authority of debit markup
6. letter of installment
Loans to staff members House loan

The house loan is provided to its staff members up to a certain

limit. And up to this limit there is no interest.

Car loan

This is expensive loan and interest is charged on this type of


Motorcycle loan

Mainly this type of loan is provided to clerical staff. But the

officers can also apply for this loan.

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PEST Analysis
 Political factors

How to government intervene in the economy specifically, political factors include areas such
as tax policy, labor law, environmental law, trade restrictions, tariffs, and political stability.

Overall economy is suffering form political instability banking sector also face some
problems such as government impose tax on deposits as well as on withdrawal of money .

 Economic factors

Include economic growth, interest rates, exchange rates and the inflation rate. These factors
have major impacts on how businesses operate and make decisions. Exchange rates affect the
costs of exporting goods and the supply and price of imported goods in an economy.

The major source of bank’s income is credit and this sector is badly affected due to increasing
mark up on lending due this people hesitate to take loan from banks and this activity become
cause of cut down business which badly affected economy.

 Social factors

Include the cultural aspects and include health consciousness, population growth rate, age
distribution, career attitudes and emphasis on safety. Trends in social factors affect the
demand for a company's products and how that company operates.

Companies may change various management strategies to adapt to these social trends, with
the passage of time and due to social factors banks are more conscious about employees.
They are the assets of a firm they care their heath and provide safety and different assistance

 Technological factors

Factors include technological and environmental aspects, such as R&D activity, automation,
technology incentives and the rate of technological change. Technological shifts can affect
costs, quality, and lead to innovation. Banking sector take fully advantage from technology
such as ATM ,online transferring of money now any one can transfer money any where just
on a click.

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Ratio Analysis


Advances to Deposit Ratio

This ratio is calculated by dividing the amount of advances by deposits. This ratio
shows the relationship of advances to deposits. It means that what is the percentage of
advances to deposit of a bank. Whether the advances are enough to pay its liabilities.


2009 196,802,164


= 60.60%

2008 192,671,169


= 64.07 %

2007 171,198,992


=62.67 %


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This ratio shows the increasing trend in advancing. Advances should be in compliance with
deposits and in case of excess deposits idol cash becomes a non earning asset which is non

Cash to deposit Ratio

The ration is calculating by dividing the cash on hand and cash with other banks by
total deposits of the bank. This ratio shows the percentage of cash available as
compared to deposits. This ratio tells that at any time if cash is needed to meet the
liabilities of deposit liabilities to what percentage it is available.


Cash on hand and cash with other bank

Total Deposit

2009 57,778,651


= 17.79%

2008 54,268,378


= 18%

2007 47,817,116


= 18%

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This ratio is on increasing trend which is unfavorable. This shows that bank is not
proper utilizing its deposits. On the other hand it is safety cushions depositors and


Equity to Assets

This ratio is calculating by dividing shareholder’s equity by total assets.

Formula Shareholder’s equity

Total Assets
2009 19,770,260



2008 14,608,523



2007 13,766,673




This ratio shows continuously increasing trend. Increasing equity to assets ratio means that
company’s debt is decreasing and it is getting self sufficient.

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Equity to Deposits

This ratio shows the percentage of shareholder’s equity to total deposit. This ratio is
calculating by shareholder’s equity by total deposits of the bank.

Formula Total Shareholder’s equity

Total Deposits

2009 19,770,260


= 6.09 %

2008 14,608,523



2007 13,766,673



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This ratio shows increasing trend but decrease in 2008 which decrease from 5.04 to 4.86.
This ratio is getting better and better because of the enhanced repaying ability of the bank but
on the other hand if your deposits are more as compared to your equity it shows your
customers’ trust in your organization.


Deposit to Total Liabilities

The ratio is calculating by dividing total deposits by total liabilities. This ratio shows
the percentage of total deposits to total liabilities which is the major liability of the

Formula Total Deposits

Total Liabilities
2009 324,743,389



2008 300,732,858



2007 273,173,841

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This ratio increases in 2008 than 2007 and than decrease in 2009 that is negative sign
that bank has less funds to invest. Bank is in sound position to pay liabilities.

Investment to Total Assets

This ratio is calculating by dividing investment by total assets. This ratio shows the
percentage of investment to total assets.

Formula Investment

2009 99,159,957



2008 75,973,238


= 21.77%

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2007 88,491,564


= 26.91%


The investment to total asset indicates the portion of investment in bank’s total assets; in
2008 it is decreasing which is not a favorable trend. This shows that management does not
work properly and efficiently and not utilizing the assets fully by investment. In 2009 when
the ratio increase from 21.77 to 25.49 it mean management is utilizing the asset by

Leverage Ratio

Debt Ratio

It shows the percentage of total funds obtained from creditors. The debt ratio
compares total liabilities to total assets.

Formula Total liabilities

Total assets
2009 366,936,635


= 94.31%

2008 331,946,025



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This ratio shows decreasing trend which is favorable for bank. Creditor would rather
see a low debt ratio because there is greater cushion for creditor losses if the firm goes
to bankrupt.

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Debt equity ratio

Debt equity ratio is important to measure of solvency since a high degree of debt
in capital structure to make it difficult for the company to meet interest charges
and principal payments at maturity.

Formula Total liabilities

Share holders equity
2009 366,936,635



2008 331,946,025



2007 312,675,308




This ratio shows decreasing trend which is favorable for bank.

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Time interest earned

The time interest earned ratio reflects the number of times before tax earning cover interest
expense. It shows how much of a decline in earnings a company can absorb.

Formula earning before interest& taxes

Interest expense
2009 24,654,180



2008 1,794,720





27 times


EBIT tells about how many time a company is able to pay its interest .in 2007it was
27times but decrease in 2008 from 27o 09imes but it much poor in 2009that is just

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Net Profit Margin

This ratio is calculating by dividing profit after tax by total income. This ratio shows that
what is the percentage of net profit to the total income.

Formula Profit after Tax

Total Income
2009 897,035



2008 1,301,301



2007 3,130,229




This ratio shows decreasing trend which is not favorable this shows management
work inefficiently. Management should make strategy to increase profit ratio to
operate business with great success.

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Operating Profit Margin

This ratio is calculated by dividing the operating profit by total income. This ratio

shows that what is the percentage of operating profit to the total income.

Formula Operating Profit

Total Income
2009 1,016,316


= 2.49%

2008 1,794,720


= 4.95%

2007 4,535,552


= 14.25%


Operating profit ratio shows the profits of a firm that earn on its income. It is is in
decreasing trend which is alarming situation for management.

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Gross Profit Margin

This ratio is calculated by dividing the gross profit by total income. This ratio shows
that what is the percentage of gross profit to the total income.

Formula Gross Profit

Total Income
2009 10,845,052


= 26.61%

2008 15,960,816


= 43.98%

2007 15,201,374


= 47.77%


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Gross profit ratio shows the profits of a firm that earn on its income. It is is in
decreasing trend as compared to 2008 which is not good for management.

Return on Equity

This ratio is calculating by dividing net profit by total equity. This ratio shows that
how much the company is earning on shareholder’s equity.

Formula Net Profit

Total Equity
2009 897,035


= 4.54%

2008 1,301,301


= 9.17%

2007 3,130,229


= 30.5%


In 2009 the ratio is 4.54% while it was 9.17% in 2008. This shows that management
is not utilizing its equity in good way. So this is not favorable for bank.

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Return on Total Assets

This ratio is obtained by dividing net profit by total assets. This ratio shows that what
percentage of earning the company is attaining on total assets.

Formula Net Profit

Total Assets
2009 897,035


=0.23 %

2008 1,301,301


= 0.37%

2007 3,130,229


=0.95 %


This ratio measure bank ability to utilize its assets to create profit by comparing profit
with assets generates profit. This ratio shows decreasing trend this mean that
management is not properly using its assets

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Price /Earnings Ratio

A measure used in the financial world to illustrate the quantity of something for one share of
a company's stock. Such measures are used in the analysis and valuation of a company.

Formula Market Price per Share

Earnings per share
2009 10



2008 10


= 7.09

2007 10


= 2.55


A valuation ratio of a company's current share price compared to its per-share

earnings.Earnning per share is in increasing trend which shows the company worth.

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Cash and balances with treasure banks 35,056,012

Balances with other banks 22,722,639
Lending to financial institutions 14,947,435
Investments 99,159,957
Advances 188,042,438
Fixed assets 14,492,194
Other assets 14,649,380
Total 389,070,055

Bills payable 3,766,144
Borrowing 20,653,921
Deposits and other accounts 324,759,752
Sub-ordinate loans 7,570,181
Deferred tax liabilities 179,851
Other liabilities 10,006,786
liabilities against assets 22,133,420

Total 389,070,055

Profit and loss account Dec 31,2009

Interest earned 35,561,312
Interest expenses (24,654,180)

Provision and bad debts (4,071,527)

Interest income 6,835,605

Other income 5,182,253

Total interest income 12,017,858

Interest expenses (11,001,542)

Profit before tax 1,016,316

Taxation (119,281)

Profit after tax 897,035

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Critical Analysis

Mark up and money come from other general banking and by giving services to customer is
the source income of bank. We can analyze by the above mentioned analysis that income is
decreasing gradually by each year. On the other hand mark up / interest expenses and other
non mark up expenses increased by each year, the increasing trend in non mark up expenses
is much higher in2009 than the previous year’s .The ratio of the expenses of the organization
is more than income. That is why company is losing its profit. The management is required
serious attention to reduce their expenses. There are number of employees who do not
contribute in the productivity of the organization. So these employees may be fired by
providing golden shake hand or retirement benefits. So by this way the salary expenditures
can be reduced. The firm can reduce expenses of refreshment the electricity expenses can
also be reduce by use of fine instead of air conditions which are blowing all the working
time. So that the organization may go to profit side instead of bearing loss.

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 BAL provides its customers a complete range of banking products and services
including retail banking, corporate and institutional banking, trade finance and
consumer finance.
 BAL has planned to institute major improvements in customer services and internal
systems to improve efficiency. It also intends to launch innovative products. The bank
is increasing resource mobilization through regular deposit campaigns and
accelerating the process of recovery of outstanding advances.
 The Management of ALFALAH Bank Limited (BAL), in order to further improve the
quality of service.
 Bank has very good financial resources.
 Bank has good brand name.
 Banks have competent human resource.
 Automated process and procedure.
 The services rate is competitive in market.
 BAL has attracted most of customers in Pakistan. BAL has attractive and good
 Bank is providing best services according to the requirement of the customers


 Smaller branch network

 Some management positions needed are not professional.
 Customers having accounts with small amounts are not given same services and
dealing given to those with high accounts.
 Swift facility is not available in all the branches.
 Human resource and marketing department is not available in all the branches.

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 Business in market
 Branch network
 Technology
 Better and convenient services to employees and business class.


 Growing global technological advancement.

 Emerging banks
 Innovative services of other banks
 Change in economic trend
 Change in international banking services


 Bank is facing a high tax rate, which affects its profitability and attractiveness for
new entrants.
 Middle class and low income group have limited access to bank credit.
 Weak internal controls, non-merit based recruitments and high administrative
costs affected the performance of bank.
 No proper material of banking was provided during my internship.
 The branch, where I did my internship is providing very few customer services.

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The following are the suggestions that I have recommend for the Alfalah bank limited.

 The behavior with the customers should be improved.

 There is a great need of proper training of employee.

 The branch should improve his position to attract more customers.

 Also do marketing through internet

 Try to establish effective communication between top-level management and


 Effective training and qualified, dutiful and vigilant inspection teams are inducted per

force in the entire bank.

 The bank must have to apply the marketing strategies to attract the customers which

are depositors.

 Management should distribute work equally among different employees. Some of the
employees are overburdened while some sections are overstaffed.

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The overall analysis indicating that the bank progress has mainly attained through
dedication of employees. We have to compare the ratios analysis which shows overall
performance of the Bank Alfalah Limited ,bank earned higher total income in 2009 as
compared to previous 2 years but net income decrease while deposits also increase the
cause of decrease in net income is higher operating expenses.
The overall profitability position of Bank Alfalah Limited in 2009 is not satisfactory.

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