Allied Bank

Department Of Management Sciences, The Islamia University of Bahawalpur Campus Bahawalnagar.
PREFACE
Being aware of the importance of practical training, the Department of Management Sciences, The Islamia University of Bahawalpur, requires every MBA student to go through training for practical purpose as trainee. The internship program is to broaden the vision of practical experiences with theoretical knowledge as it increases ones capabilities to handle problems at various stages and the ability of decision. I tried my best to collect the valuable information and its relevant facts. This report is the result of my internship with Allied Bank Limited (ABL).
Jawwad Rafique MBA (Finance)
First of all, I want to express all my humble thanks to ALLAH who is very sensitive about each and every activity of all his men and without whose help, I am unable to accomplish any objective in my life. All respect to his Holy Prophet HAZART MUHAMMAD (Peace Be Upon Him) who brought the light of knowledge when the humanity was wandering in the desert of ignorance. Secondly, I am grateful to my prestigious institute that made his learning opportunity a part of our education, especially I would like to thank the department of management sciences the islamia university sub campus Bahawalnagar. Internship coordinator MR. Imran who not only guided me well but also helped me in finding such an excellent place for internship. I am also thankful to all other teachers as the knowledge imparted by them enables me to gain knowledge of the organization in best way. I would also thank to all the staff of Allied Bank, particularly Mr. Rana Riaz Ahmad who gives me an opportunity to work in the bank and gave me a chance to explore my knowledge. I submit my earnest thanks to my affectionate parents, who always remains at my back to support me, I can never give the return of their un tired struggle for me, but I can only prove myself as they expect from me. And I am also grateful to all other family members and all my friends for their moral boosting and spiritual support during my study and especially in this internship program. I went to pay gratitude to all persons, who had helped me in completing this support.
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Jaww ad Rafique (Finance) MBA
Dedicated To
My Mother who taught me the first word to speak, the first alphabet
to write and the first step to take and under whose feet my Heaven lies. I am nothing without my Mother, & My Teachers Who made me! What I am.
Table of Contents
.......................................................................................................................................................................................9 PRODUCTS OF ALLIED BANK OF PAKISTAN................................................................................................17
EXECUTIVE SUMMARY
This report is about my internship program with Allied Bank Limited. In this comprehensive report, I have discussed about every major aspect of the bank, which I observed and perceived during my internship program. In this report you will find the detail about the bank right from its incorporation to the current position. Along with it, the processes, policies and procedures of the bank are also discussed in detail. During my internship program, I mainly worked in General Banking. All the departments have been discussed in detail and all the policies and procedures have been described thoroughly. As the main purpose of internship is to learn by working in practical environment and to apply the knowledge acquired during the studies in a real world scenario in order to tackle the problems using the knowledge and skill learned during the academic process, In this report the detailed analysis of the organization has been done and all the financial, technical, managerial and strategic aspects have been evaluated to analyze the current position of the organization. Along with it, the background analysis, the prevailing competition analysis, the business process analysis, and the internal environment and external environment of the organization have been discussed and the recommendations for the improvement have been made wherever required. In the end the learning and experiences section consists of all the policies, processes, practices and procedures which I have undergone through and learned during my internship program. This report also contains my perceptions about the employees satisfaction, motivation level and the working environment of the organization.
HISTORICAL BACKGROUND OF ALLIED BANK

Allied Bank is the first Muslim bank, to have been established on the territory that became Pakistan.established in December 1942 as the Australasia Bank at Lahore with a paid-up share capital of Rs. 0.12 million under the Chairmanship of Khawaja Bashir Bux, the Bank had attracted deposits, equivalent to Rs. 0.431 Million in its first eighteen months of business. Total assets then amounted to Rs. 0.572 million. Today Allied Bank's paid up Capital & Reserves amount to Rs. 10.5 billion, deposit exceeded Rs. 143 billion and total assets equal Rs. 170 billion. The Allied Bank's story is one of dedication, commitment to professionalism, adaptation to changing environmental challenges resulting into all round growth and stability, envied and aspired by many.
The Pre Independence History (1942 to 1947)

In the early 1940s the Muslim community was beginning to realize the need for the active participation in the field of trade and industry. The Hindus had since the late 1880s established a commanding presence in these areas and industry, trade and commerce in the undivided Sub-continent was completely dominated by them. Banking, in particular, was an exclusive enclave of the Hindus and it was widely believed, and wrongly so, that Muslims were temperamentally unsuited for this profession. It was particularly galling for Khawaja Bashir Bux to hear the gibe that Muslims could not be successful bankers. He decided to respond to the challenge and took lead in establishing this first Muslim bank on the soil of Punjab that was to become Pakistan in December 1942; by the name of Australasia Bank Limited.The initial equity of the Bank amounted to Rs 0.12 million, which was raised to Rs 0.5 million by the end of first full year of operation, and by the end of 30th June 1947 capital increased to Rs. 0.673 million and deposits raised to Rs 7.728 million.
Australasia Bank (1947 to 1974)

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Australasia Bank was the only fully functional Muslim Bank on Pakistan territory on August the 14th, 1947. It had been severely hit by the riots in East Punjab. The bank was identified with the Pakistan Movement. At the time of independence all the branches in India, (Amritsar, Batala, Jalandhar, Ludhaina, Delhi and Angra (Agra)) were closed down. New Branches were opened in Karachi, Rawalpindi, Peshawar, Sialkot, Sargodha, Jhang, Gujranwala and Kasur. Later it network spread to Multan & Quetta. The Bank financed trade in cloth and food grains and thus played an important role in maintaining consumer supplies during riot affected early months of 1948. Despite the difficult conditions prevailing and the substantial set back in the Banks business in India, Australasia Bank made a profit of Rs 50,000 during 1947-48. By the end of 1970 it had 101 branches. Unfortunately it lost 51 branches in the separation of East Pakistan. The bank did well in despite losing lot of its assets. By the end of 1973 the bank had 186 branches in West Pakistan.
Allied Bank (1974 to 1991)

In 1974, the Board of Directors of Australasia Bank was dissolved and the bank was renamed as Allied Bank. The first year was highly successful one: profit exceeded the Rs 10 million mark; deposits rose by over 50 percent and approached Rs 1460 million. Investments rose by 72 percent and advances exceeded Rs 1080 million for the first time in bank history. 116 new branches were opened during 1974 and the Bank started participation in the spot procurement agriculture program of the Government. Those seventeen years of the Bank saw a rapid growth. Branches increased from 353 in 1974 to 748 in 1991. Deposits rose from Rs 1.46 billion, and Advances and investments from Rs 1.34 billion to Rs 22 billion during this period. It also opened three branches in UK.
Allied Bank (1991 to 2004)

As a result of privatization in September 1991, Allied Bank entered in a new phase of its history, as the worlds first bank to be owned and managed by its employees. In 1993 the First Allied Bank Modaraba (FABM) was floated.
After privatization, Allied Bank registered an unprecedented growth to become one of the premier financial institutions of Pakistan. Allied Banks capital and reserves were Rs. 1.525 (Billion) and assets amounted to Rs. 87.536 (Billion) and deposits were Rs. 76.038 (Billion). Allied Bank enjoyed an enviable position in the financial sector of Pakistan and was recognized as one of the best amongst the major banks of the country. In August 2004 as a result of capital reconstruction, the Banks ownership was transferred to a consortium comprising Ibrahim Leasing Limited and Ibrahim Group. Today the Bank stands on a solid foundation of over 63 years of its existence having a strong equity, assets and deposits base offering universal banking services with higher focus on retail banking. The bank has the largest network of on-line branches in Pakistan and offers various technology based products and services to its diversified clientele through its network of more than 700 branches.
(2005 to date)
In May 2005 Ibrahim Leasing Limited was amalgamated by transfer to and vested in with and into Allied Bank Limited. ILL shareholders were issued ABL shares in lieu of the ILL shares held by them. Application for the listing of ABL shares in all the Stock Exchange Companies of Pakistan was made. ABL was formally listed and trading of the shares of the Bank commenced w.e.f. the following dates. Islamabad Stock Exchange Lahore Stock Exchange Karachi Stock Exchange 8th 10 17th
th
August 2005 August 2005 August 2005
Now all shareholders of Allied Bank Limited can trade in the shares of the Bank at their free will.
Vision
To become a dynamic and efficient bank providing integrated solutions in order to be the first choice bank for the customers
Mission
To provide value added services to our customers To provide high tech innovative solutions to meet customers requirements To create sustainable value through growth, efficiency and diversity for all stakeholders To provide a challenging work environment and reward dedicated team members according to their abilities and performance To play a proactive role in contributing towards the society
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Board of Directors
Company Information
Board of Directors
Chairman
Mohammad Naeem Mukhtar Non-Executive Director Sheikh Mukhtar Ahmad Non-Executive Director Mohammad Waseem Mukhtar Non-Executive Director Abdul Aziz Khan Non-Executive Director Farrakh Qayyum Non-Executive Director
Government Nominee
Nazrat Bashir Non-Executive Director

Government Nominee
Tasneem M. Noorani Independent Director

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Mubashir A. Akhtar Independent Director Pervaiz Iqbal Butt Independent Director Sheikh Jalees Ahmed Executive Director Mohammad Aftab Manzoor Executive Director
Chief Executive Officer
Company Secretary
Sheikh Mukhtar Ahmad
Auditors
M. Yousuf Adil Saleem & Co. Chartered Accountants Ford Rhodes Sidat Hyder & Co. Chartered Accountants
Legal Adviser
Haider Mota and Company, Advocates and Solicitors
Shares Registrar
Technology Trade (Pvt.) Ltd.
Central Office
Bath Island, Khayaban-e-Iqbal, Main Clifton Road, Karachi - 75600 UAN: (92 21) 111-110-110
Audit Committee
Waheed-Ur-Rehman, FCA Chairman Farrakh Qayyum Member Mubashir A. Akhtar Member Sheikh Jalees Ahmed Member
Head Office/Registered Office

8-Kashmir / Egerton Road, Lahore UAN: (92 42) 111-110-110
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Website & Email

Website www.abl.com.pk E-mail info@abl.com.pk
Management Hierarchy: The management hierarchy represents the different positions and designations in the hierarchy of the ABL. However, this is not the reporting hierarchy but merely represents the positions and grades on the basis of seniority and grades.
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Functional Hierarchy:
The functional hierarchy represents the reporting order in hierarchy of ABL. The hierarchy has president and directors to top management level and officers Grade I, II and Grade III at lower level management of ABL. The middle level management consists of regional manager and regional controller of operations. These positions are not fixed. Any person in the hierarchy above the branch manger can be appointed as RGM and controller operation.
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Office Grade 1, and other lower staff Branch Manager

Regional Manager
Controller of Operations
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Products of Allied Bank of Pakistan

ABL facilitates its customers by providing different types of services of deposits, advances, foreign exchange and other general services. Here is the list of services provided by bank:

Current Account Allied Business Account PLS Saving Deposits Allied Basic Banking Account Foreign Currency Deposits PLS Term Deposit Account Allied Munafa Account Behtar Munafa account (BMA) Behtar Munafa Term Deposit (BMTD) Mahana Aamdani Package Allied Bachat Scheme (ABS) Allied e-Savers Accounts (ESA)
Home remittances Remittance Hajj services Utility bills Lockers Agriculture finance Import Export business/Trade finance Allied bank rupee traveler cheques Seasonal finance Running finance
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Cash finance Demand finance Corporate leasing All time banking On line banking Internet banking Visa credit card ATM Net Work Helpline
Current Account:
Allied Bank offers Current Account facility for individuals as well as for institutions and commercial customers. Free Online Transactions, DD/TT/PO for depositors maintaining average monthly balance of Rs. 2.500(M) & Above during the previous month.
Allied Business Account:

Allied Bank offers a banking experience beyond expectations. Allied Business Account is a non-profit current account with countless benefits and services. If you are a businessman, trader or an individual, Allied Business Account is an ideal proposition for you. Minimum Average Balance: Rs 10,000/ Transaction limit: No limit Eligibility: All Individuals & Institutions Rs. 500,000/- and above: Free Online/Manual Remittances Outward Cheque Return Issuance of DD/TT/PO/OBC/Expression Collection
Additional Benefits:
24 hours helpline service Free Internet Banking facility
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SMS transaction alerts ATM/Debit Card for cash withdrawals through any ATM and debit transactions at various retail outlets
PLS Saving Deposits:

Allied Bank offers PLS Savings Account facility to its customers with the following attractive features. Attractive return of 5.00% per annum Free Online Transaction, DD/TT/PO for depositors maintaining average monthly balance of Rs. 2.500(M) & Above during the previous month.
Allied Basic Banking Account:

In order to provide basic banking facilities to low income people in Pakistan, Allied Bank has introduced Allied Basic Banking Account (ABBA). This account can be opened with an initial deposit of Rs 1,000/=. The account is a non-remunerative account with no minimum balance requirement. The account will be closed automatically if the balance remains zero continuously for one year. The statement of the account will be issued on yearly basis. There are no service charges on the said account for a maximum 2withdrawals and 2-deposits during a calendar month. Additional transactions will be subject to a service charge as per Banks schedule of charges for every withdrawal/deposit. Unlimited free of charge withdrawals from ATM.
Foreign Currency Deposits:

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Allied Bank offers the facility for opening Current, Savings and Term deposit Accounts. These accounts can be opened in US Dollar, Pound Sterling, Euro, and Japanese Yen at designated branches.
PLS Term Deposit Account:

Allied Bank offers the following rates in its normal term deposit account. PLS Term Deposits Up to Rs. 5,000,000 Rs.5,000,001 to Rs.25,000,000 Rs.25,000,001 to Rs50,000,000 Rs50,000,001 to Rs100,000,000 Rs100,000,001 to Rs.500,000,000 Above 500,000,000 1 Month 4.00% 4.50% 5.00% 5.50% 6.00% 3 Months 6.50% 7.00% 7.50% 8.00% 8.50% 2 Years 8.10% 8.60% 9.10% 9.35% 9.60% 9.85% 6 Months 7.00% 7.50% 8.00% 8.50% 9.00% 9.25% 3 Years 8.25% 8.75% 9.25% 9.50% 9.75% 10.00% 1 Year 8.00% 8.50% 9.00% 9.25% 9.50% 9.75% 4 Years 8.30% 8.80% 9.30% 9.55% 9.80% 10.05%
PLS Term Deposits Up to Rs. 5,000,000 Rs.5,000,001 to Rs.25,000,000 Rs.25,000,001 to Rs50,000,000 Rs50,000,001 to Rs100,000,000 Rs100,000,001 to Rs.500,000,000 Above 500,000,000
Allied Munafa Account (AMA):

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Allied Munafa Account is a profit bearing checking account with the payment of profit on a monthly basis. The estimated rate of profit is given below: Slabs Rs 0.5(M) to less than Rs 5 (M) >Rs 5(M) to Rs 25 (M) >Rs 25(M) to Rs. 50 (M) >Rs 50(M) to Rs. 100 (M) >Rs 100(M) to Rs. 250 (M) >Rs 250(M) to Rs. 500 (M) Rs 500(M) and above Rates effective from 01.01.07 5.00% 6.00% 7.00% 7.50% 8.00% 8.50% 9.00%
Salient Features:
The applicable profit rate would be based on slab of amounts maintained on average monthly basis and the profit credited in the account on monthly basis. Individuals, Firms, Companies, Schools, Hospitals, Charitable Organization & Non-Govt. Organizations etc are free to open their account in this scheme.
Behtar Munafa Account (BMA) :

Behtar Munafa Account is a profit bearing checking account with the payment of profit on a monthly basis. The estimated rate of profit is given below: Upto Rs.5,000,000 Rs.5,000,001 to Rs.25,000,000 Rs.25,000,001 to Rs.50,000,000 Rs50,000,001 to Rs.100,000,000 Rs.100,000,001 to Rs.250,000,000 5.00% 6.00% 7.00% 8.50% 9.25%
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Rs.250,000,001 to Rs.500,000,000 Above Rs.500,000,000
10.00% 10.50%
Salient Features:
The applicable profit rate would be based on slab of amounts maintained on average monthly basis and the profit credited in the account on monthly basis. Individuals, Firms, Companies, Schools, Hospitals, Charitable Organizations etc are free to open their account in this scheme.
Behtar Munafa Term Deposit (BMTD):

Allied Bank offers following rates in its Behtar Munafa Term Deposit. Up to Rs.5,000,000 Rs.5,000,001 to Rs.25,000,000 Rs.25,000,001 to Rs.50,000,000 Rs50,000,001 to Rs.100,000,000 Rs.100,000,001 to Rs.500,000,000 Above Rs.500,000,000 6.00% 6.50% 7.00% 7.50% 8.00% 8.50% 8.00% 8.50% 9.00% 9.50% 10.00% 10.75% 8.50% 9.00% 9.50% 10.00% 10.50% 11.00%
Mahana Aamdani Package (MAP):

Mahana Aamdani Package is a unique product with attractive returns. It provides an opportunity for a regular monthly income with a flexibility of placement for 12, 24 & 36 months. Minimum Amount: Rs 100,000/- (with multiples of Rs 10,000/-) Profit: Payable on monthly basis Projected profit rates Up to @ 10.30% per annum Eligibility: All individuals & institutions Period: 1,2 and 3 years
Special Benefits:
Profit to be credited in the depositors PLS saving A/C and can be withdrawn through ATM free of charge.
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Free transfer of monthly profit to any branch of ABL all over the Pakistan.
Pre-Mature Encashment:
S# 1. Deposit paid before Maturity Recovery of profit already paid & Payment Within 6 months of opening of No profit will be paid & profit account already paid will be recovered from principal After 6 months but completion of 12 months before 60% of the profit paid will be recovered/ adjusted from the principal amount
2.
3.
After 12 months but before 40% of the profit paid will be completion of 18 months recovered/ adjusted from the principal amount After 18 months but before 30% of the profit paid will be completion of 24 months recovered/ adjusted from the principal amount After 24 months but before 20% of the profit paid will be completion of 30 months recovered/ adjusted from the principal amount After 30 months but before 10% of the profit paid will be completion of 36 months recovered/ adjusted from the principal amount
4.
5.
6.
Allied Bachat Scheme (ABS):

Allied Bachat Scheme (ABS) is a PLS Term Deposit Scheme based deposit scheme whereby you can double your investment in just 7.5 years. Maturity Period: Minimum Deposit: 7.5 years Rs. 50,000/- with multiples of Rs. 10,000/-
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Expected rate of Profit: Eligibility:
The deposit amount will doubled in 7.5 years All individuals & institutions
be
No. of Years 0 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5 6 6.5 7 7.5
ABL Projected Rates 0 7.00% 7.50% 8.00% 8.75% 10.00% 10.25% 10.50% 10.75% 11.00% 11.25% 11.50% 11.75% 12.00% 13.33%
Repayment amount 50,000.00 53,500.00 55,625.00 58,000.00 60,937.50 65,000.00 67,937.50 71,000.00 74,187.50 77,500.00 80,937.50 84,500.00 88,187.50 92,000.00 100,000.00
Premature Encashment:
No profit shall be paid from the date of issue, if en-cashed before completion of 6 months. In case encashment take place after 6 months, the profit is to be paid for completed half year on the prescribed rates & 6% for the completed months as per the projected rates.
ALLIED e-SAVERS ACCOUNTS (ESA):

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Allied e- Savers Account is a unique savings plan where you can earn returns as high as 7.5% with the flexibility of 4 withdrawals a month! So wake up to the world of modern banking and open an account now. Slabs Rates Rs. 400,001 up to Rs. 500,000 Rs. 300,001 up to Rs. 400,000 Rs. 200,001 up to Rs. 300,000 Upto Rs. 200,000 7.5% p.a. 6.0% p.a. 5.0% p.a. 5.0% p.a.
Additional Benefits:

24 hours phone banking service. Free Internet Banking facility. SMS transaction alerts. ATM/Debit Card for cash withdrawals through any ATM including our largest network of ATMs across Pakistan and for debit transactions at various retail outlets. First free chequebook - A/c Payee only.
Note:
All profits are payable subject to Zakat & Govt. Levis applicable from time to time.
Home remittances:
The Bank having a network of over 750 branches all over Pakistan, undertakes to provide safe and instant payment of remittance from expatriates, routed through designated foreign exchange companies and correspondent banks with whom special arrangements have been made in this regard. Through the Allied Express Service, Allied Bank ensures that beneficiaries' Accounts in Allied bank branches are credited with in 48 hours of receiving home remittance information from overseas.
Remittance:
Allied Bank can transfer funds to the remotest part of the country for payment/credit to the customer himself or a third party, through
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Telegram/Telex/Telefax for payment/credit on the same/next day. Telegraphic transfers can also be made abroad in Foreign Currency.carrying cash to strange alien location can prove to be risky as a single incident can render one without monetary backup of any sort. Hence travelers cheques are introduced by banks in order to protect against any contingency.
Demand Draft
A draft is one of the most popular Banking instrument in the trade circles to settle business deals and transferring funds from one place to another. Allied Bank has taken radical steps for a speedy Issuance/Payment of Drafts through automation and introduction of a more simplified system based procedure. Pay Orders Pay order is a Bank instrument issued by a Bank in Pak Rupees at the request of a customer to transact payment to a named payee through banking channel. Generally payments against such cheques (Pay orders) are restricted to "Payees Account" and as such are required to be enrooted through a Bank Account locally.
HAJJ SERVICES:
The Bank serves the intending pilgrims by helping them in performing this religious obligation. The Hajj forms and other related services are provided by the bank. However, the terms and conditions for accepting the Hajj forms from intending pilgrims are in accordance with the Hajj Policy announced by the government, each year. Hajj applications are available with all branches during Hajj season, immediately after the Hajj policy is announced by the Government of Pakistan.
UTILITY BILLS:
All branches of the Bank collect utility bills of electricity, gas and telephones. For convenience of the customers, Utility Bills are collected by
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the branches during banking hours and also in the evening-banking on all working days. Bills can be paid through Cash or Cheques. Consumers may drop bills with crossed Cheques into a drop box available at the branches under "Cheque Drop-in" system. Utility Bill payment facility - Pay your telephone, electricity, and gas utility bills on any of our ATMs without having to wait in long queues outside your branch.
LOCKERS:
Allied Bank Lockers are available in three different sizes Small, Medium and Large on a yearly fee. Locker holders need not have an account in the Bank. Attention Valued Customers Safe Deposit Lockers' Insurance The Bank has already informed its Safe Deposit Locker Holders through half yearly Statement of Accounts as on 30-06-2007 that the Bank has arranged insurance cover at its own cost subject to the terms and conditions of the insurance policy for the losses sustained and discovered by reasons of damage, destruction or loss by fire, burglary and locker breaking. Maximum insurance ceiling provided for each category of lockers is mentioned hereunder: Annual S. Locker Maximum Loss Locker Rent No. Size Coverage / Limit (Current) 1 Small Rs.1,500/Rs.500,000/2 Medium Rs.2,000/Rs.1,000,000/3 Large Rs.4,000/Rs.1,500,000/Extra Rs.2,000,000/4 Rs.5,000/Large We shall deem this arrangement as consented by the lessee, if no communication is received on the subject within 15 days after publication of this notice.
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AGRICULTURAL FINANCE:
Bank under Agricultural Financing Scheme envisaged by the State Bank Of Pakistan extends short, medium and long term, farm and non-farm credits. The farm credits are extended for production (inputs) and development purposes. Non-farm credits are allowed for livestock (goats, sheep and cattle), poultry, factory including social forestry and fisheries (inland and marine excluding deep sea fishing). Details are as below: Farm Loans Production Loans Inputs like seeds, fertilizers, pesticides, weedicides, herbicides, labor charges, water charges, vegetables, Floriculture etc. Working capital finance to meet expenses of various natures attributable to farming. Development Loans Improvement of agricultural land, orchards, etc. Construction of Godowns Tractors, Machinery & other equipments Tube wells Farm Transportation etc Non-Farm Loans Livestock Poultry Fisheries Forestry Hari Bhari Agriculture Revolving Credit Scheme Loan Tenure 3 Years (Clean up of Principal & Markup each year) One time documentation for 3 years. Rs=20000/= per acre. Development Loans/Finances (Term Loans)
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Loan Tenure Repayment
Up to 5 years Monthly/Quarterly/Bi Annual/
Amount of Finance Value of Agriculture land/Pass Book 80% of PIU or 50% of last 3 years average sale price or Market value 50% of Residential /Commercial property in municipal limit. 90% of DSCs/SSCs/TDR/SNDR Customer Selection Should be a Pakistani & holding CNIC. Preferably an a/c holder of ABL. Permanent resident and self cultivator of the land. Not a defaulter of any other Financial Institution/Clear ECIB. Possesses good social and market reputation Have Repayment Capacity Able to produce proper securities
IMPORT EXPORT BUSINESS/TRADE FINANCE:

Allied Bank provides highly efficient trade finance services for import/export business for our clients/customers through large number of authorized branches where trained and motivated staff is available to handle the business on behalf of customer.
Allied Bank Rupee Traveler Cheques (ABRTC):

"Rupees Traveler Cheques" is one of the most convenient products launched
by Allied Bank, which has an excellent market response. ABRTC is only to be issued by the authorized branches of the ABL. With the application of Government levies, nominal commission is also charged on issuance of "Traveler Cheques". Traveler Cheques shall be valid until encashed unlike a "Negotiable Instrument" which is valid for 6 months.
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SEASONAL FINANCE:
Seasonal Finance facility is allowed against pledge of produce of Cash Crops harvested in that particular crop season. The delivery of pledged stocks/goods is made against appropriate cash payment.
RUNNING FINANCE:
It is a short term loan allowed by the bank for a period of one year. The running finance account can be operated and daily sale proceeds can be deposited into the account. The mark-up is recovered on the products of daily outstanding balance. The running finance is suitable for meeting day to day financial needs of the business.
Cash Finance:
is allowed against pledge of goods. The delivery of goods is made against payment.
DEMAND FINANCE:
It is disbursed in lump-sum or in accordance with the agreed disbursement schedule and it is repayable as per the agreed installments, which could be monthly, quarterly, biannual or annual.
CORPORATE LEASING:
Allied Bank Limited commenced lease operations upon amalgamation with Ibrahim Leasing Limited. Facilities include leasing for machinery, commercial vehicles, vehicles and equipments. The Bank provides lease facilities for balancing, modernization, replacement and expansion schemes to corporate and commercial clients in all industrial enterprises. Leasing is a
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popular mode of financing due to its distinctive features like tax shield, preserve working capital, easy documentation and less processing time. Lease applications are entertained at all Bank branches in Pakistan
All-Time Banking:
Allied Bank is now introducing the AlliedCash+ also referred to as ATM card. You will now have the convenience of withdrawing cash from any of our multiple ATMs ("All-Time Banking" locations) conveniently located in major cities like Karachi and Lahore at any time of the day or night even on closed days/holidays. Other services include customer being able to inquire about the balance of his/her account or printing an abbreviated (mini) statement showing the most recent eight transactions up to the previous working day.
ONLINE BANKING:
Allied Online is a unique service offering from Allied Bank Limited. Through Allied Online, your account in Allied Bank is available to you from any of our branches country-wide. No matter where you are in the country and which branch your account is maintained, you can have your cheque encashed at any of our over 700 branches located in 250 cities. You can also use the service to deposit cash for instant credit into your account or any other account in Allied Bank from any branch. Similarly account-to-account Funds Transfer facility is also available for instant remittance. Your cheque drawn on a remote branch for credit into beneficiarys account or encashment up to a specified amount can also be presented at any branch by a 3rd party. Other services available to accountholders are Balance Enquiry and Account Statement at remote branches. Allied Online provides a secure, efficient and convenient facility for making payments to beneficiary accounts from any of our branches country-wide. It can be used for cash management services by corporate customers requiring funds collection or disbursement facility.
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INTERNET BANKING:
Banking at your fingertips! Allied Direct Internet Banking offers you the convenience to manage and control your banking and finances - when you want, where you want to! It's Simple, Convenient, Secure and Faster. So, just get clicking. Some features of Allied Direct are:
Simple and Convenient Easier navigation and help provided at every step so you can have most out of this service. With Allied Direct convenience is just a click away.
Secure and Faster Secured & encrypted with latest tools and technologies, Allied Direct is the choice for secure and fast Internet Banking.
24x7 Access You now have access to your account 24 hours a day, 7 days a week. You transfer funds or even pay bills even if it's a holiday.
To use Allied Direct Internet Banking, you should be a registered Allied Bank Account holder with a valid ATM Card. If you do not have an account, please visit any of our nearest branches and open your account and obtain an ATM Card. Our friendly branch staff will help you open your account quickly.
VISA CREDIT CARD:

Allied Bank as part of its commitment to improving customer service is in the process of launching its new Allied Visa Credit Card from July 1, 2008. Accordingly, all existing ABL MasterCard credit cards will be blocked/inactivated by June 30, 2008 preventing any future transactions on those cards. To assist customers in this process, Allied Bank will be contacting its customers/cardholders directly and through personal visits from duly authorised representatives for the purposes of obtaining consent and other related documentation including copies of CNICs. Any balances remaining on the ABL Mastercard will after compliance with formalities, be
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transferred to the new Allied Visa Credit Card to avoid any inconvenience to existing customers. Please do not hand over any original documents or any Credit Card to any of our representative. Allied Bank thank its customers for their cooperation and apologises for any inconvenience caused. We welcome our customers to the new world of Allied Visa Credit Cards and related benefits and privileges.
ATM NetWork: ALLIED BANK ATM LOCATOR:

Allied Bank is now introducing the AlliedCash+ Card also referred to as ATM card. You will now have the convenience of withdrawing cash from any of our multiple ATMs ("All-Time Banking" locations) conveniently located in major cities like Karachi and Lahore at any time of the day or night even on closed days/holidays. Other services include customer being able to inquire about the balance of his/her account or printing an abbreviated (mini) statement showing the most recent eight transactions up to the previous working day.
1 LINK NETWORK:
In continuation of ALL TIME BANKING services, with the country wide network of 735 branches, we are pleased to announce that ABL has enhanced ATM services by joining the "1-Link Switch" which has following members Banks: ABN Amro Bank Al Baraka Islamic Bank Allied Bank Limited Askari Commercial Bank Limited Atlas Bank Limited
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Bank AL Habib Limited Bank Alfalah Limited Bankislami Pakistan Limited Crescent Commercial Bank Limited Dubai Islamic Bank Pakistan Limited Emirates Global Islamic Bank Limted Faysal Bank Limited First Dawood Islamic Bank Limited Habib Bank Limited KASB Bank Limited Meezan Bank Limited National Bank of Pakistan NIB Bank Limtied PICIC Commercial Bank Limited Soneri Bank Limited Standard Chartered Bank Pakistan Limited Union Bank Limited United Bank Limited
MyBank Limited Tameer Micro Finance Bank Limited The card holders of our bank will thus be able to access member banks ATMs for balance inquiry and can withdrawal simultaneously vice versa. The card holder's member banks will access our bank ATMs.
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Every ATM which is connected with "1-Link Switch" has a Logo which indicates that "1-Link Switch" member can access the ATM.
1LINK network has grown with a tremendous pace changing the dynamics of electronic payment industry in Pakistan.
The Following are few of the highlighting facts illustrating the performance of 1LINK Switch towards the development of financial market of Pakistan.

Strength of 29 Banks, including all Islamic Banks of the country. Pakistan Largest ATM Switch with 2000+ ATMs in 160+ cities nationwide. Card base of member bank exceeding 4.3 Million. Monthly Rs. 9 Billion (approx.) ATM withdrawal through 1LINK network. Inter Bank Funds Transfer among more than 3,200 branches of participating IBFT banks nationwide. Monthly Rs. 332 Million (approx.) transfer of funds among IBFT banks.
Monthly Rs.70 Million (approx.) volume of VISA Transactions.
Membership Procedure:
1LINK membership is available for all financial institutions operating in Pakistan. The membership procedure includes a Membership agreement which establishes the rights and obligations for participation in the network and binds members on 1LINKs operating rules.
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M-Net Network:
The Allied Bank Allied Cash + card could be used in an M-Net ATM as well. In Pakistan, the M-Net ATM facilities can be availed at any of the following banks and locations.
JS Bank (American Express Bank) Bank of Khyber Bank of Punjab Citibank First Women Bank Limited Habib Metropolitan Bank HSBC Bank Muslim Commercial Bank Saudi Pak Commercial Bank Prime Commercial Bank
Online Branch Network:

Online Banking facilities are available to customers maintaining accounts at all online branches across the country. The following facilities are available: Cash Deposit for immediate credit to remote branch. Remote Cheque Encashment from any online branch. Instant Funds Transfer between any 2 online branches. Remote Balance Enquiry and Statement of Account.
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Helpline:
Since the launching of Allied Cash+ Debit Card on January 27th 2003, Allied Bank embarked on the path of value added consumer products. Customer related services were being provided through our ATM-Wing situated at Central Office Karachi. As the numbers of AlliedCash+ Card increased, so did the services related inquiries, complaints and requests from our customer. Hence, to facilitate and to offer Quality Service to our customer, Allied Bank decided to provide Toll Free Number Customer Services through 080022522.
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General Banking Department

The general banking department performs functions of account opening, deposits of cheque, demand draft, telegraphic transfer, clearing, collection of utility bills etc. it consists of following departments to perform its functions. Cash department Accounts department Remittance department Clearing department
Cash department:
It provides its users with following facilities: 1. Make payments on cheques. Accept deposits. Collect utility bills. Cheque: The cheque is the most important, convenient and well established medium of modern banking used for withdrawal of funds and settlement of debts by an account holder i.e a drawer. Definition: A cheque may be defined as A written order of a depositer upon a bank to pay or to the order of a designated party, a specified sum of money on demand. Parties of cheque: Parties involved in cheque are: 1. Drawer: the person who is ordering for payment. 2. Drawee : that bank who has to pay the amount. 3. Payee: the person who is receiving the payment. The drawer and Payee may be the same person. Payment of cheque: Ways to make payment of cheque: The cheque may be paid in one of the following ways: 1. By cash payment over the counter. 2. By transfer from one account to another.
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3. By collection/clearing. Verification of signatures: The sign of the drawer will be checked. It must match to the sign that put up on the signature card at the account opening time. Posting and supervision: After passing above two steps the cheques are given for posting. The account no written over cheque will be entered in the computer and computer will display the information of respective account. while posting following information is put up: Name of drawer. Cheque no Amount Date of cheque When cheque is posted it is supervised to know the effect of posting and if the cheque is ok it is forwarded to the cashier for paument. Payment by cashier: Cashier makes payment of cheque that is clear . Cashier long book: After making the payment the cashier will enter the amount in cashier long book on the debit side. Dishonour of cheque: While making payment of cheque the officer must check it according to following guidelines. If any of the following case is appeared then payment is not given to the customer. When cheque presented at a branch where customer not held his account. When customers account is closed before presentation of cheque When the cheque is ambiguous or mutilated. When a notice of customers insanity is given to bank. When notice of loss of cheque is given to bank. When signatures of drawer differ. When the cheque is undated or post dated. When balance of customers account is insufficient to meet the demand.
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When order of court prohibits the payment of cheque. Accept deposits: When a customer wants to deposit any amount in its account it goes to the relevant officer who accept deposit and give a receipt to the customer. The cashier in cashier long book enters the amount deposited by the customer on its credit side. Collection of utility bills: The branch also provides the facility of utility bills collection of electricity, gas and telephones. The branches collect utility Bills during banking hours. Bills can be paid through cash or cheques.
Accounts department:
One of the important functions of bank is to accept deposits from general public. Following are the types of accounts provided by the bank: 1. Current accounts. 2. Pls saving accounts. 3. Pls term deposit. 4. Special notice deposit. The classification is based on the duration and purpose for which the deposits are kept at the bank. Following are the features of these accounts.
Current accounts:
Current accounts are such accounts, which may be operated by the customers for any number of times during a day. The depositor can deposit money, cheques and other instruments at any time during business hour and can demand payment of a part or of the entire credit balance at any time during business hours without any restriction as to number of withdrawals. A current account may be opened with minimum cash deposit of Rs. 500. If the average balance falls below this limit service charges are charged by the bank. No return is paid for this account.
PLS saving account:

These accounts are different from current accounts and carry a return. These accounts are opened in banks on profit and loss sharing basis. The
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minimum credit balance for this account is Rs. 100. The bank determines the proportion of the profit and loss. The profit is provided on that amount whish is present in the account at the time of calculation.
Special Notice Deposit: (SNDR):

These are other type of accounts and the depositor gives a notice of minimum 7 days or maximum 30 days before taking payment from bank. Profit is also provided on that account and profit rate for SND are declared by the bank. SNDR register: All the particulars related to SND are recorded in SNDR register e.g. the date of deposit, date of withdrawal, amount, name of depositor etc.
Pls Term Deposit:

These accounts are opened with a minimum initial balance of Rs. 1000. The deposits are accepted for period of minimum 3 months and maximum 5 years. Profit rate is determined by bank. Profit and loss is paid on a condition that deposit will be not withdrawn from the bank within a period of less than 3 months. Pls terms deposit withdrawn after completion of 3 months but before due date will be eligible for sharing of profit. But after the due date profit is not paid even if amount is not withdrawn from account. Pls term deposit register: The particulars related to Pls term deposits are kept in Pls term deposit register. Following are the particulars of it: Branch. Amount of PLSTDR in Rs. Name of depositor. PLSTDR no. Date of issue. Due date. Period. Date of payment of PLSTDR.
Account Opening Process:
Continued addition of new accounts is an important functional activity of a bank because it not only builds up its deposits base, but also increases its
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profitability, it is very necessary for its survival. All deposits are opened with a fixed minimum cash deposit. While opening an account following steps are under taken. Proper introduction: At first proper introduction of account holder is taken from different sources.
Completion of Account Opening Form:

It is checked carefully that account opening form is complete in all respects and signed by the account holder and introducer.
Obtaining Identity Card:

As an additional precaution attested copy of national identity of account holder and introducer will be obtained.
Accounts Opening Registration:

After opening account relevant information is recorded in account opening register. Following are the particulars recorded. Date Name of account holder Account number Joint Accounts: An account open by two or more individuals is a joint account. Special instructions should be taken from the account openers, whether the account is to be operated upon by them jointly or severally in appropriate columns of account opening form. If account is operated jointly than operations are allowed under the sign of all account holders. But if account is operated severally than operation is allowed by anyone of the joint account holders. Minors Accounts: An infant or minor is a person who has not attained the age of eighteen. If this type of account is opened than it is necessary that this account will be opened by the guardian and the account will be operated by the guardian till such time the minor attains majority Accounts For Pardah Observing Ladies: These accounts are not desirable to open because if such a lady is illiterate, it is very difficult due to the problem of verification of her thumb
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impression. However, if it is desirable to open an account of illiterate pardah observing lady, who is reluctant to provide her photograph her account may be open and operated through her dully constituted attorney. All other formalities are same including obtaining of right hand thumb impression of the lady customer while opening the account. Sole Proprietorship Account: Sole proprietorship account is that, which is opened for the individual, trading under the style of the firm on his declaration to the effect that he is the sole proprietor of the firm. After getting proper introduction and establishing identity of the account opener the account is opened and will be operated by the account holder easily. Partnership Firms Accounts: Partnership is the relation between the person who have agreed to share the profit of the business carried on by all or any of them acting for all persons who enter in it are called partners and collectively firm. While opening partnership account the partners have to declare that they entered into partnership. Special and clear instructions are taken that whether account is operated jointly or severally if the partners give authority to a person outside the partnership to operate upon the account, all the partners must sign the letter of authority. It is also clearly mentioned if they authorized operation to anyone or more from them to act on them behalf and they have to notify the bank if any change occur in partnership. Such an account is opened in firms have account opening form is signed by all partners, information regarding all partners address, telephone number, NIC number will be obtained. A copy of NIC will also be obtained for each partner. A copy of partnership deed is also obtained for careful security.
Closure of Accounts:
Following are the reasons for closing an account: Customers Request: Due to personal reasons or inconvenience if the customer request for closing his account than his account will be closed. At Banks Discretion: If the account is not satisfactorily operated by the customer than bank has the discretion to close account after giving notice to the customer. Death Of The customer:
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On death of the customer the bank stops the payment of the cheques. Insolvency Of Customer: If insolvency of any customer comes to the knowledge of the branch than no further withdrawal be allowed and account cannot be operated and the problem will be referred to the higher authorities. Order Of Court: In case of any legal order from the court than payments of cheques also stopped and account cannot be operated.
Cheque Book Issue Register:

For issuance of chequebook customer give an application to the manger and than the chequebook is issued. Following are the particulars of chequebook issue register. Date of issue Distinctive number Form To To whom issued Account number Whether sent by post/ peon Date Ack received
Remittance Department:
One of the major functions of bank is remittance. This department provides this facility through following instruments. 1. Demand draft 2. Telegraphic Transfer 3. Payment order 4. Deposit at call Demand Drafts: Draft is an order cheqeu drawn by the one branch of the same bank to pay sum of money to drawer on demand. It is payable on demand. A bank Demand draft has following particulars: Payees name Date of issue
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Amount in words and figures Drawee Branchs name and code Address Serial number Demand Draft Issue Register: When a Demand draft is filled out and made than an entry is made in Following information is recorded in the register: Date Draft number Name of purchaser Favoring Amount Amount of exchange Demand Draft Issue Payable Register: When a Demand draft is received and paid than an entry is made in Demand draft payable register. The register contains following information: Date on which it is received Draft number and its date Favoring Amount Paid on Deposit at Call: These are made for tender purposes. These are kept as security when a tender is submitted by a person to a company. If the tender is approved than these are payable to that company but if person fails to get approval of tender than these are cancelled and will be refunded by the person. There is no limit of the period of deposit at call. Deposit at Call Register: When a deposit at call voucher is filled out an entry is made in deposit at call register. The register contain following information: Date
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Clearing Department:
When the branch receives cheques of other banks than one process of getting payment against these cheques is that you sent a person who will take money on your behalf but in these cities where State bank exist this function is performed by clearing. In State bank of Pakistan there is a clearinghouse. The representatives of local banks meet there at 9:00oclock and exchange there cheques and other instruments with each other. Than they come to their bank and check these instruments that these are ok or not. The representative again meet at 12:00 oclock in the clearance house and the cheque which are ok get payment against these and the cheque that cannot be cashed these are again exchanged. In State bank every local bank has its account from that account payments for clearing are made.
Receipt number of deposit at call Name and Address Reason of issue Amount Paid on
Outward Clearing Register:

When through clearing payment is given to the other bank than this entry will be recorded in outward clearing register. The register contains the following information: From whom it is received Drawer Drawee Cheque number Account number Amount Inward Clearing Register: When payment is received from the other bank than entry is recorded in inward clearing register. The register contain following information: Serial number Date Amount Remarks
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Transfer Delivery: All cheques and other instruments received for collection, which have been drawn on other local branches of Allied Bank Of Pakistan Limited, their collection system is called transfer delivery. Outward Transfer Delivery: When the branch sends on instruments for collection than it will called outward transfer delivery. All such instruments will be entered in a separate register called outward transfer delivery register. Inward Transfer Delivery: When the branch pays against an instrument it is called inward transfer delivery. All such instruments are recorded in a separate register called inward transfer delivery register.
Advances department
Allied Bank of Pakistan facilitates into customer by providing different type of loans. Following are the types provided by the bank. Running Finance: Running finance is the short term loan usually allowed by the bank for a period of one year. The running finance account can be operated and daily sale proceeds can be deposited into to the account. The mark-up is recovered on the product of daily outstanding balance. The running finance is suitable for meeting day to day financial needs of the business. Cash Finance: Cash finance is allowed against pledge of goods. The delivery of goods is made against payment. Demand Finance: Demand finance is disbursed in lump sum or in accordance with the agreed disbursement schedule and it is repayable as per the agreed installments, which should be monthly, quarterly, biannually or annually. Finance against Imported Merchandize: The Bank also extends facility of clearing the consignment through its approved clearing agents and considers finance against pledge of
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consignment imported through the bank. This is called finance against imported merchandise. Letter of Guarantee: The Bank issue letter of guarantee in local and foreign currency and thereby undertakes the responsibility on behalf of the customer for the debt, default or miscarriage by the customer, whether; such requirement is domestic or overseas. Performance Bond: The Bank issues a performance bond in local and foreign currency on account of the customer engaged in building and construction industry, whether, such requirement is domestic or overseas. Bid Bond: The bank issues a guarantee in local and foreign currency in support of his customer tendering for a public works contract overseas. Fixed Industrial Investment / Term Finance: The fixed industrial investment is extended by the Bank for building and, plant and machinery of the project. The debt / equity ratio could be 60 : 40 or 70 : 30 depending upon the government policy in this regard. Working Capital Finance: The Bank extends working capital finance to the industry / project. The working capital finance may be in the shape of running, cash finance or one / some forms of finance products of imports and exports. Agricultural Financing: Bank under Agricultural Financing Scheme envisaged by the State Bank of Pakistan extends short, medium and long term, farm and non-farm credits. The farm credits are extended for production (inputs) and the development purposes. Non-farm credits are allowed for livestock (goats, sheep and cattle), poultry, factory including social forestry and fisheries.
Procedure for Loan Approval:

Following is the general procedure adopted by bank while approving loan. Proper Introduction to Client: In this process the first and very important step is to take introduction of that person. He may be the existing client or may be a new one.
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In case of existing client it is easy to get introduction because bank already possess his record, past dealing with bank, his background. In case of new client it is difficult to get proper introduction. They will obtain his record of dealing with previous bank, because it may be possible that he is defaulter of any other bank. Application By Client: After introduction of client the client fills an application. All relevant and important information is obtained by this application. Testing and Evaluation: After obtaining information it will attested and after that the application is evaluated by the authority on the basis of collected information and after that decision is made for approval or not approved. After giving loan the dealing of customer is constantly viewed by the banker. It is important for bank.
FOREIGN EXCHANGE
Foreign exchange is defined as the mechanism of exchanging currency of one country with that of another country. Foreign Currency: Foreign currency is defined as the currency other than local currency. Importance of Foreign Exchange: Trade when take place among different countries there is need for settlement of payments mechanism because more than one currencies are involved in it foreign exchange department performs that function and facilitates the international trade. Controlling Authority: In Pakistan authority to regulate in State bank of Pakistan and policies are made by SBP, which are followed by all dealers of foreign exchange, and they have to report to SBP at every months end. International Trade: To organize international trade there is ICC. ICCs publications are available that provide instructions to monitor international trade, both import and export are covered in it. Function of Foreign Exchange Department: The department provides function of import, export letter of credit, export refinancing, negotiation, collection, foreign currency accounts, foreign
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currency drafts, telegraphic transfer, import on consignment basis, advances payments in import. Allied bank Foreign exchange department deals in following currencies. US Dollar Euro GBP (UK) Japanese Yen
Type of Accounts: 1. Frozen Accounts 2. New Accounts Frozen Accounts: These are the accounts that are freezed after the nuclear blast by Pakistan on 28 May 1998. These accounts are further divided into Current Account Saving Account Fixed Deposit New Account: When permission is given to open the foreign currency accounts than accounts open after that are called new accounts. These are the following types. Current Account Saving Account Fixed Deposit Modes of Payments in import export: These are different mode of payment for importer such as advance payment but in that there is high risk for the buyer another way in import on consignment basis and in that commodity is send and than payment is given which involves risk for seller another method in collection is that there is involvement of there party but there is no guarantee of bank. So the sofest way is letter of credit.
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Letter of Credit: Definition: A concept is developed between seller and buyer. Buyer goes to bank and makes his letter of credit. It is just like a guarantee. Guarantee to pay account from bank but if terms and conditions of letter of credit are fulfilled. Parties Involve in L/C: Following parties are involved in it. Importer: The person who want to open a letter of credit in favor of exporter when importing something from abroad.
Exporter: The person who is selling in abroad letter of credit is open for exporter. Issuing Bank: The bank that issue letter of credit. It is the bank of importer. Advising Bank: The bank with which issuing bank negotiates in exports country. Export Company: The bank who work on behalf of exporter. Advising bank and exporter bank may be the same but it is not necessary. Confirming Bank: In case if exporter hesitates for trading due to bad economic conditions of importers country than confirming bank assure the exporter bank that payments are made to exporter. Reimbursement Bank: This bank maintains the account of issuing bank and it is situated in that country whose currency is used for payments. L/C Opening Register: When L/C is opened some information is maintained in that register. Following is the information recorded. Date L/C number
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Name of party Foreign currency account Rupees equivalent Type of goods Country of origin Foreign advising bank Expiry date Margin percentage Amount of margin Commission Postal charges Cable charges Importers name and address Exporters name and address
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Ratio analysis:
The purpose of this analysis is to check the profitability and efficiency of business includes the following ratios. Liquidity Ratios Liquidity ratios measure a firms ability to meet its current obligations. These include Current ratio Acid test ratio Sales to working capital Working capital
1. Current Ratio:
Current ratio calculation: current assets/current liabilities Also called working capital ratio, it measures the extent to which current assets are available to meet current liabilities. The current ratio indicates whether the business has ample working capital i.e. the excess of current liabilities over current assets used to meet short term obligations, quickly take advantage of opportunities, and qualify for favorable items. 2008 3rd Quarter
333,864,463 / 312,543,945
2007
29,857,685,965/ 2,459,695,868
2006
2,659,859,865/ 2,345,685,959
1.07
1.21
1.13
Comments: A current ratio of 1.0 or greater is considered acceptable for most business. Most analysis agree that other factors need to be considered before drawing conclusions from the current ratio such as how quickly current assets can be converted into cash, and the credit terms extended by suppliers and to customers. A high ratio indicates excessive current assets in the form of inventory, and underemployed capital. A low ratio indicates difficulty to
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meet short term financial obligations, and the inability to take the advantage opportunities requiring quick search.
2. Acid Test Ratio:

Calculation: quick assets/current liabilities Also called acid test ratio cash ratio, it indicates the companys ability to payoff the immediate demands of creditors using its most liquid and current assets; these can be converted quickly into cash, temporary investments, and marketable securities. It gives more realistic picture of businesss ability to repay current obligations than the current ratio as it excludes inventories and prepaid items for which cash cannot be obtained immediately. This ratio is usually used as a supplement to the ratio. 2008 3rd Quarter 2007 2006
15766010 + 30455118 / 145869565 +284524521 / 132626565 + 26595984689 / 14188334 + 312543945 121000652 + 291452365 101645644646 + 27646846656
0.19
0.20
0.23
Comments: Indicates the number dollars of quick assets available to pay each dollar of current liabilities. Generally, a Quick Ratio of 1.0 or greater is considered adequate to ensure a companys ability to pay its current obligations. A value of less than 10.0 signals a problem in meeting short term obligations
3. Leverage Ratio:
Earning assets to total assets Return of earning assets Net margin to earning assets Loan loss coverage ratio Deposit time capital
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Loans to deposit
Earning assets to total assets:

Total assets describe the effectiveness of management of banks funds higher the ratio indicates how best bank puts its assets to earn maximum return. SBP fixed a certain limit of reserve which should be considered in evaluating this ratio (open market operation). Calculation: Earning Assets/Total Assets 2008 3rd Quarter
211742559/252026776
2007
275865659/335698574
2006
336595695/395659659
84.01% 82.01% 85.01% Change: Unfavorable Comments: The bank most important assets are earning assets, bank efficiency depends upon the worth and volume of earning I total assets. The Analysis of ABLs earning assets with total shows 1.7% decreases, which is because of change in investment pattern of ABL. Although the earning assets of ABL has increased as compare to base year. The major change in balances with other banks which is decreased by 48% as compare to base year. The bank has invested its more amounts in operating fixed assets which is not included in earning assets.
Return on Earning Assets:

This describes the effectiveness of investment of earning assets higher the ratios better the result. It is also known as profitability ratio of bank Return on earning assets: Calculation: net profit after tax/earning assets 2008 3rd Quarter
4586956 / 241586528
2007
4397250 / 211742559
2006
3090133 / 165202849
1.89%
2.07%
1.87%
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Change: Favorable Comments: The ratio explains the control of management over the spread of interest income to interest expenses. Higher ratio in 2006 indicates the controllability of management over the interest income. The net profit margin of ABL increased by 32% from the base year, which might be due to rise in earning assets. This ratio is calculated to check the profitability of bank. After calculation of concerned ratio it is observed that the results are favorable, because the profitability of bank increased with higher percentage in this year as compare to the base year. And overall expenses decreased from the base year which indicates the control of management over the spread of income to interest expenses is favorable.
Loan loss coverage ratio:

This ratio explain the capacity of bank to cover its loan loss through its yearly income, higher the ratio better the result. This also explains the level of protection of all depositors. It is also based upon (i) Quality of loan (ii) Efficiency of management. Calculation: pre tax income / net charges off 2008 3rd Quarter 7161094/136189 10.06 times 2007 4834095/160059 9.35 times 2006 2060231324/17687753 11.64 times
Change: favorable Comments: This ratio indicates the level of protection available to customer in bank in term of there deposit, the higher the ratio in 2007 means more protection to customer as compare to 2008 the ratio also indicate the efficiency of management to control its bad debts and to protect its depositors from loan losses. Whenever the bank advances the loan to the general public it is always from the depositors amount deposited in the bank. Sometimes the advanced loans become the bad debt and could not be recovered back easily.
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In the base year the bank was not so efficient to recover the bad debts. But in 2006 the bank has become more efficient.
Deposit time capital:

It indicates the portion of debts, with reference to equity. D<E because it provide a caution to bank having more solvency. E<D because high debts generate more interest. Calculation: Deposit/Capital 2008
15256598 / 251525695
2007
10422406 / 211742559
2006
7867392 / 165202849
6.06%
4.9%
4.7%
Change: unfavorable Comments: The ratio is an alternative of debt to equity. And also it is two folded ratio. On the hothead high quality indicate margin of safety available to the investors. The increase in deposits is more than the increase in equity. As I have mentioned that the increase in the deposits is favorable for the bank as well as unfavorable for the bank. Because the deposits are the liability of the bank but on the other side it is the main source of bank to generate the revenues. By the increase in deposits shows that increase in the investments and liabilities of bank but with the increase in equity it implies more safety to the bank because the liability of bank is also increasing and it provides lesser protection the investors.
Net Margin to Earning Assets:

This is the profitability measure of bank it provides the strength of a bank to manage the spread o interest income over interest expenses. Calculation: net margin/earning assets 2008
168595956 / 225465956
2007
144033634 / 206031324
2006
111206774 / 161410268
0.71 times
0.69 times
0.68 times
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Change: favorable Comments: This is another profitability measure of bank. Although the calculations shows a favorable results of bank with respect to base year. Because time to time this ratio is increasing, therefore it is favorable situation of bank.
Loans to Deposits:
This ratio shows the activity of bank to advances its available deposits. Apart from central bank requirement it is the effectiveness of management to utilize its available deposits which ultimately provide high profit to the bank. Calculation: loans/deposits Change: Favorable Comments: This ratio is basically calculated to show the effectiveness of management to convert the deposits into advances. This also implies that the debt coverage of the bank has slightly increased in 2006. The increase in loans shows that the banks deposits are properly utilized. The profitability of bank is directly dependent on loans/advances. In respective of state banks policy 69% indicates that the bank is also using some of its reserves in secured investment. Because while depositing money the bank gives less percentage of interest but in the advances but in the advances the bank receives more percentage of interest. So with the more advancement of cash the bank will ultimately generate more income. So while calculating the concerned ratio, it is observed that the banks management is working and utilizing the available deposits in more efficient and effective ways.
4. Solvency Ratios:
Definition/Introduction: The ability of a business to pay its long term debts is called solvency. There are two kinds of solvency one is periodic payment and second is original principle amount. Periodic payment is the ability of a business to pay its fixed payments through its normal operating income in one year. And original principle amount is the ability of a business to pay its original principle amount from its available resources. Items involved: Earning before taxes and interest
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Interest Lease payment Preferred dividend Total assets Total equity Tangible debts Tangible net worth
Concerned years: Current year 2008 Base year 2007 Ratios 2007 Debt ratio Equity ratio 92% 8%
2008 3rd Quarter 93% 7%
Change Unfavorable Unfavorable
Reason Total Debts 31% Total Equity 22%
Comments: In consideration, the long term debt paying ability of ABL. It is observed that the solvency of the business is unfavorable towards the owner. The percentage contribution of total debts in total assets and in relationship of debts and equity shows that the owner is not in a better position for payment of its long term debts to the outsiders. Although total assets and equity increased from the previous year but due to lack of management of Allied Bank, they could not get maximum from their assets. The bank uses most of its proportion fro the debtors. That is the way debt ratio shows high percentage change in current year 2007-08 which is unfavorable with respect to the owner. In year 2007, as it is observed that the bank has increased its assets and equity both with 30 and 22 percent respectively that is high percentage then the base year. But change in total assets is more than the change in equity that i9s way the equity of the owner decreased from the previous year, which
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makes the results unfavorable with respect to the bank. So if solvency of the bank is unfavorable to the owner it is ultimately unfavorable for the business.
Market Analysis:
This analysis is done for those investors who want to invest in the securities of the bank and wants long term benefits. This analysis provides the facility to the investors to make their investment decisions on the basis of following ratios. Items involved: Earning before interest and taxes Interest Market price per share Earning per share Number of share outstanding Dividend per share Total equity Concerned years: Current year 2008 Base year 2007 Taken from Annual Report calculated earlier Ratios P/E Ratio 13 2007 2008 3rd Quarter 13.36 39.4 2% Change Favorable Favorable Favorable Reason for change Market price 47% Total equity 22% Although dividend was not paid in 2007
Book value 32.4 per share Dividend - yield ratio
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Dividend payout ratio Retention ratio
- -
26%
Favorable
100%
74%
Favorable
reinvested which show trust in bank Same reason dividend wasnt paid in 2007 Payment of dividend in 2008
Comments: In consideration the ability of Allied Bank to satisfy its investors has overall positive impact on the business. Almost all the measures are taken favorable to the bank. These favorable results show about the worth of bank which has increased, this is due to the increase in market price from the previous year. Book value per share also increased which show the strong internal strength of the share of the Bank. There is deep relationship with book value and market value. In 2007, there is huge different between book value and market value which indicate the involvement of the speculation in the share of bank. This thing informed to the investors about heavy capital gain on the shares of Bank. The possibility of return on the investment of customers increased by 2% from last year. Because last year the Bank adopted the strategy of DRIPS (Dividend Reinvestment Plan) this indicates that the Bank has strong worth in the investors mind. Thats why the investors allowed the bank to reinvest their dividend or capital gain and generate more benefits for them. In 2006, the Bank announced and paid dividend of 26% of its profit to its investors, which attracted new customers as well that is the reason the price of the share has increased by 47% from previous year. This overall market analysis shows about the lot opportunities available for investors, all the measure is favorable with respect to their expectations. The shares outstanding remain same for whole year but due to the change in the net earnings of the business the earning per share of the Bank increased. Due to this increase in the net earnings, now the bank is in good position to distribute this earning to its existing share holders.
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Cash Flow Analysis:

Introduction: The statement allows the prepare to use the concept of cash that included not only cash itself but also short term high liquid investments. Statement is prepared on cash basis Title is the statement of cash flow Detailed format is used On the basis of these elements cash flow is made Items involved: Operation cash Number of shares outstanding Total debts Cash dividends Concerned year: Current year 2008 Base year 2007 Ratios 2008 Quarter 1.31% 3rd 2007 2% 4% Change Favorable Favorable Reason of Change Operating cash 58% Change in operating cash is more than total debts Due to payment of the dividend
Operating cash per share Operating 3.3% cash to total debts Operating --cash to dividend Comments:
8.5%
Favorable
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After analyzing the concerned ratios of Allied Bank, it is observed that the cash position of the bank is much better than the base year. All the measures taken are favorable to business. In the year 2008 the figure of operating cash was negative that shows the outflow of the cash, in 2007 it is positive which shows the inflow of cash, so this explains that in year 2008 the bank had to face so much expense than its income, which created a bad impression on the prospective investors because when they will see that the bank has not enough cash to pay its debts they will definitely skip from there. But in the year 2006, it was analyzed that the cash position of the bank is much better than the base year. Now after paying the expenses the bank has enough money to pay its debts as well as distributing in its share holders. This thing would attract the customers. Cash flow statement of business shows that how much inflow and outflow took place in the whole year. Operating cash is basically the figure represents the cash position of the business after pay all its expenses and addition of income generated through the operating assets. It is the figure which shows that the cash position of business to distribute.
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65
Allied Bank Limited Balance sheet as of September 30, 2008 Horizontal Analysis Assets
Cash and balances with treasury Balance with others bank Investments Advances Other assets Operating fixed assets Deferred tax asset net Total assets Bills payable Borrowing from financial institutions Deposits Shareholder equity Share capital Capital reserves Accumulated loss Surplus on revaluation of fixed assets
Increase or Decrease 2006-2007 %age 2007-2008 %age

(0.79) 7.11 147.22 0.178 (14.67) 22.30 (50.55) 20.75 115 2.50 (20.31) (3.80) (29.72) (0.83) 4.00 7.87 (2.0) 6.66 --(84.75) (34.76) (17.38)
Liabilities
7.67 62.29 15.78 --4.20 (23.41) 132
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Allied Bank Limited Profit and Loss Account (Horizontal Analysis) As on September 30, 2008 Items
Mark up\Interest\return earned
Increase or Decrease 2006-2007 %age

(10.40)
2007-2008 %age
10.16
Mar up\ interest\expenses
24.94
(11.22)
Provisions Non mark up\interest income Non mark up\interest expense Profit before taxation Taxation Profit after taxation Earning per Share
(4.72) 12.84 (0.52) 83.79 84.74 82.85 82.61
93.20 (28.77) (2.77) 107 139 82.49 84
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Allied Bank Limited Balance Sheet (Vertical Analysis) As on September 30, 2008 Assets
Cash & balances with treasury bank Balance with other banks Lending to financial institutions Investments Advances Other assets Operating fixed assets Deferred tax asset-net Net investment in finance lease Capital work in progress Total assets
2006 Rs. (000)

27,449,292
%age
6.81
2007 Rs. (000)

27,669,276
%age
8.29
2008 Rs. (000)

12,869,044
%age
4
26,870,767 10,001,123 142,877,930 167,523,299 18,137,931 7,184,623 2,967,570 -403,012,535
6.67 2.48 35.35 41.97 4.50 1.78 0.74 0.00 0.00 100
25,087,525 22,843,841 57,592,325 167,225,401 21,256,518 5,874,422 6,001,297 -333,750,605
7.12 6.84 17.32 50.10 6.37 1.76 1.80 0.00 0.00 100
24,474,658 766,674 72,525,352 173,822,905 30,246,684 5,923,411 267,359 30,246,684 320,926,758
7.63 0.24 22.60 54.16 9.42 1.85 0.00 0.08 9.55 100
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Allied Bank Limited Balance Sheet (Vertical Analysis) As on September 30, 2008 Liabilities
Deposits & other accounts Borrowings from financial institutions Bills payable Other liabilities Deferred tax liabilities Subordinated loans Total liabilities
2006 Rs. (000)

328,182,05 4 38,045,541
%age
85.62
2007 Rs. (000)

283,444,68 0 23,443,322
%age
88.31
2008 Rs. (000)

265,751,32 4 23,923,589
%age
86.17
9.93
7.30
7.76
5,834,673 11,243,342 383,305,61 0
1.52 2.93 0.00 0.00 100
5,419,260 8,629,175 320,936,43 7
1.69 2.69 0.00 0.00 100
5,376,924 13,340,485 308,392,32 2
1.74 4.33 0.00 0.00 100
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Allied Bank Limited Profit and Loss Account (Vertical Analysis) As on September 30, 2008 Income
Markup\Interest \Return earned Fee Commission & Brokerage
2006 Rs. (000)

23,956,114
%age
79.47
2007 Rs. (000)

26,738,446
%age
82.98
2008 Rs. (000)

24,271,792
%age
75.92
2,096,871
6.96
1,827,685
5.17
1,855,324
5.80
Income \ Gain on Investment Other Income Income from Dealing in foreign currencies
1,795,185
5.96
1,099,947
3.41
385,912
1.21
1,144,350 1,151,751
3.80 3.82
1,453,522 1,102,845
4.51 3.42
1,135,343 2,813,892
3.55 8.80
Dividend Income\Joint Venture
0.00
0.00
1,509,213
4.72
Total
30,144,471
100
32,222,445
100
31,971,476
100
70
Expense s
2006 Rs. %age (000)

41.20
2007 Rs. %age (000)

15,434,54 4 49.61
2008 Rs. %age (000)

17,385,76 1 55.44
Mark up\ 11,580,43 interest 1 expense Provisions 2,512,207 Admin expense Other charges Other provisions writes off Staff welfare fund Taxation Total 11,807,12 6 4,061 (62,542)
8.94 42.00
2,636,707 11,724,44 3 12,381 72,896
8.48 37.69
1,364,722 12,071,53 1 68,924 6,013
4.35 38.49
0.01 0.22
0.04 0.23
0.22 0.02
215,159
0.77
117,244
0.358
0.00
2,054,066 28,110,51 1
7.31 100
1,112,342 31,110,55 7
100
465,000 31,361,95 5
1.48 100
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SWOT Analysis
Strengths:
It is the 4th largest Bank in Pakistan, having 787 branches and 24 controlling offices. It is the oldest Bank established in 1942 having years of experience. It is owned and administered by the employees of the Bank. It has well decorated network of branches. It has fastest mode of home remittance of 3 days through Allied express. It has large number of branches for Rupee Travellers Cheques. It has ATM collaboration with Habib Bank and ABN Amro. Allied Bank excels in performance by providing good customer services. It has surpassed the Hajj 2007 target by a record able margin and has secured 22 percent market share of Hajj business. It provides courteous services to its customers. It has arrangements with large number of Correspondent Banks/Exchange Companies. Variety in Products Online Banking facility Locker Facility Customer Care Center Foreign exchange Same account number Facility Easy processes for account opening Supportive environment and faculty It has over 200 branches for Foreign Currency Accounts. It has over 70 branches for trade finance. It has large number of branches for Inland Remittances.
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Weaknesses:
Most of the staff in the Allied Bank is not completely satisfied with inducements. This dissatisfaction sometimes leads to less motivated employees in banking which in turn its business efficiency. Advances rate of Allied Bank is also very low with respect to its competitors. Huge quantum of non-performing loans dispersed under the Prime Minister self employment scheme and computer loans. It has a low ratio of home remittance. Non-popularity of traveler cheques, despite of having a large network of branches. No annual increment in workforces pay & late promotions against the schedules specified by the bank Red tape is a factor in processing of finances due to involvement of multi officers. Employees are unsatisfied due to unfair promotion system. There is not a right criterion for promotion; many of vacancies are filled at approach basis. Employees have Lethargic attitude especially in main branches.
Opportunities:
The Allied Bank is having a great opportunity to emerge as the best bank of the country by giving best possible services to its customers. The banking sector is improving day by day and consumer banking is making great revolutions in the banking sector. Allied Bank is still working in the corporate sector and its missing a big market share of consumer banking. If it enters this market then this bank can become the biggest and the most efficient bank in Pakistan.
Threats:
Due to low entry barriers, there are more competitors; also the global competition has increased. Political Influence
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Continuous Downfall Of Country There is a need of proper marketing because certain schemes face failure due ignoring marketing of the product. Failure of the schemes or products is a threat because it becomes a cause of decrease in profits. Financial environment is changing day by day; new technologies are introduced by foreign banks that provide customers by efficient and quick services. New privates bank coped with emerging new technology of IT.
Suggestions and Recommendations

Allied Bank was first Muslim bank to be established on Pakistan soil in December 1942 and serving towards the financial and economic progress of the country. Allied Bank is the one of the largest and prominent bank of Pakistan. Allied Bank is providing with its customers with value, quality and distinctive level of service and high ethical standards in all dealings with them. But there is always need for improvement and need to identify any lacking if they are present. Here some of these identified by me are stated. As compared to other competitions of Allied Bank its deposits and advances percentage is less so there is a desperate need that to adopt such policies that will help to increase these deposits and advances attract more and more customers by winning their confidence. During some previous year such schemes and policies are launched by Allied Bank which are not needed by customers of perhaps these are not marketed properly and launched without any market research. That is why they got failure. So measures should be taken by top management to organize the marketing department. There should proper research before launching any product and proper marketing should be done for it to get success.
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There is a desperate need for Human Resource Development by hiring professionals and competent persons and training the existing force. It will contribute a lot more in progress of bank.
Bank has not yet consumer project and commercial banking it is advised that bank should established 3 types of banking under specialized heads. These are Project financing Consumer financing Commercial financing All these three segments should be run separately by the competent persons to enhance performance and quality of work.
Although ATM and online banking is started in accordance with banks branch network not even half of its branches are equipped with these facilities so need to modernize whole bank to attract more customers. There is also need to provide facility of car financing. In housing and car finance the bank has edge over the newly established private banks having large network of branches all over the Pakistan and if they enter in to this segment of market they can earn a lot.
CONCLUSION:
After doing this internship I acquired partially the skills of analyzing & observing the system & corporate culture, values, norms. It was really an excellent experience for me as it polishes my analytical skills & enhances my visions. I become more confident, punctual, regular & responsible. I learn how to deal with customers and your behavior must be cooperative towards customer. How to behaves to your peers and help your peers if any one has some difficulty. How to behave to the upper and lower level of hierarchy of management.
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Now I think that I can work more effectively & efficiently in a group/team with the ability to mange all levels. During my internship training at ABL Dubai chowk branch, I have learned a lot. It was a geed experience for me. In Decembe3, 1942, the, ABL became the first Pakistans Muslim bank. After privatization, the profitability and performance of the bank has increased. Today ABL represents a bank that has grown with time.
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Department Of Management Sciences, The Islamia University of Bahawalpur Campus Bahawalnagar.

Jawwad Rafique MBA (Finance)

Department Of Management Sciences, The Islamia University of Bahawalpur Campus Bahawalnagar.

Jaww ad Rafique (Finance) MBA

Department Of Management Sciences, The Islamia University of Bahawalpur Campus Bahawalnagar.

Department Of Management Sciences, The Islamia University of Bahawalpur Campus Bahawalnagar.

Department Of Management Sciences, The Islamia University of Bahawalpur Campus Bahawalnagar.

HISTORICAL BACKGROUND OF ALLIED BANK

The Pre Independence History (1942 to 1947)

Australasia Bank (1947 to 1974)

Allied Bank (1974 to 1991)

Allied Bank (1991 to 2004)

August 2005 August 2005 August 2005

Department Of Management Sciences, The Islamia University of Bahawalpur Campus Bahawalnagar.

Department Of Management Sciences, The Islamia University of Bahawalpur Campus Bahawalnagar.

Nazrat Bashir Non-Executive Director

Tasneem M. Noorani Independent Director

Head Office/Registered Office

Website & Email

Department Of Management Sciences, The Islamia University of Bahawalpur Campus Bahawalnagar.

Department Of Management Sciences, The Islamia University of Bahawalpur Campus Bahawalnagar.

Office Grade 1, and other lower staff Branch Manager

Department Of Management Sciences, The Islamia University of Bahawalpur Campus Bahawalnagar.

Department Of Management Sciences, The Islamia University of Bahawalpur Campus Bahawalnagar.

Products of Allied Bank of Pakistan

Allied Business Account:

PLS Saving Deposits:

Allied Basic Banking Account:

Foreign Currency Deposits:

PLS Term Deposit Account:

Allied Munafa Account (AMA):

Behtar Munafa Account (BMA) :

Department Of Management Sciences, The Islamia University of Bahawalpur Campus Bahawalnagar.

Rs.250,000,001 to Rs.500,000,000 Above Rs.500,000,000

Behtar Munafa Term Deposit (BMTD):

Mahana Aamdani Package (MAP):

Allied Bachat Scheme (ABS):

Department Of Management Sciences, The Islamia University of Bahawalpur Campus Bahawalnagar.

Expected rate of Profit: Eligibility:

No. of Years 0 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5 6 6.5 7 7.5

ALLIED e-SAVERS ACCOUNTS (ESA):

Loan Tenure Repayment

Up to 5 years Monthly/Quarterly/Bi Annual/

IMPORT EXPORT BUSINESS/TRADE FINANCE:

Allied Bank Rupee Traveler Cheques (ABRTC):

VISA CREDIT CARD:

ATM NetWork: ALLIED BANK ATM LOCATOR:

Department Of Management Sciences, The Islamia University of Bahawalpur Campus Bahawalnagar.

Monthly Rs.70 Million (approx.) volume of VISA Transactions.

Department Of Management Sciences, The Islamia University of Bahawalpur Campus Bahawalnagar.

Department Of Management Sciences, The Islamia University of Bahawalpur Campus Bahawalnagar.

Online Branch Network:

Department Of Management Sciences, The Islamia University of Bahawalpur Campus Bahawalnagar.

Department Of Management Sciences, The Islamia University of Bahawalpur Campus Bahawalnagar.

General Banking Department

PLS saving account:

Special Notice Deposit: (SNDR):

Pls Term Deposit:

Account Opening Process:

Completion of Account Opening Form:

Obtaining Identity Card:

Accounts Opening Registration:

Cheque Book Issue Register: