INTERNSHIP REPORT BANK ALFAFALAH LIMITED MAIN BRANCH G.T ROAD GUJRANWALA SUPERVISED BY: DR.

AJMAL WAHEED SUBMITTED BY: MUHAMMAD HAROON 01151111032 MBA IV

QUAID-I-AZAM SCHOOL OF MANAGEMENT SCIENCE QUAID-I-AZAM UNIVERSITY, ISLAMABAD Date: October 01, 2012

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ACKNOWLEDGEMENT

All gratitude and thanks to almighty ALLAH the gracious, the most merciful and beneficent who gave me courage to undertake and complete this task. I am very much obliged to my ever caring and loving parents whose prayers have enabled to reach this stage. I am grateful to almighty ALLAH who made me able to complete the work presented in this report. It is due to HIS unending mercy that this work moved towards success. I am highly indebted to my course instructor Mr. Zeeshan Khalid for providing me an opportunity to learn about the Banking system of Bank Al-Falah" which is vital ingredient of MBA program. I am thank full to Dr. Ajmal Waheed my supervisor at QUAID-I-AZAM SCHOOL OF MANAGEMET SCIENCES, who gave me right directions and motivation for the completion of this report.

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EXECUTIVE SUMMARY The banking structure in Pakistan comprises of the following types, State Bank of Pakistan, Commercial Bank of Pakistan; Exchange Banks, Saving banks, Cooperative banks, specialized credit institutions. The state bank of Pakistan is the Central bank of the country and was established on July 01, 1948. The network of bank branches now covers a very large segment of national economy. The State Bank of Pakistan issues the shares of these periodically. Bank employees and other common peoples can also purchase these shares and earn profit. To open an account the customer has to meet the general banking manager with an introducer. The procedure begins with the punching of account opening form to the customer file i.e. customers master file. Before closing any account, bank send letter to the account hold for informing him that his account is going to be closed. There is need an approval form higher authority to close any account. Current deposits are those which are payable to bank whenever demanded by the customer. Bank does not pay any profit on current deposits. The following are the financial products/services of PLS Account, Saving Account, Term deposit and Foreign currency accounts. In remittance department like any other BANK AL-FALAH also have instruments for transferring of money, Telegraphic Transfer, Mail Transfer. In cash department both deposits and withdrawals go side by side. This department works under the CD In charge and deals with cash deposits and payments. This department maintains the following sheets, books, and ledger of account cash received voucher sheet. Bank provides this facility to the people who need advance money to meet their requirement. Party dealing with other banks financial condition of borrower business and as a first step credit proposal is being made. BANK AL-FALAH provides advances, which are two types. Secured Advances and Unsecured Advances. BANK AL-

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FALAH usually classified advances in to following types Commercial Advances, Corporate/SMEs Advances, Agricultural Advances. Commercial Advances are of following types Demand Finance, Cash Finance, Export Refinance Part I (Pre Shipment) & others. Banks Agriculture division deals with the agriculture advances. Bank provides the Agriculture Advances in order to enhance and support the agriculture sector of the country. Farm Credit & Non-Farm Credit. In foreign exchange, BANK AL-FALAH is dealing Foreign Currency Accounts, Foreign Remittances, and Foreign Bills for Collection, Imports & Exports.

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TABLE OF CONTENTS Acknowledgement Executive Summary Chapter No. 1 Banking Sector, Introduction to BAL History of BAL Vision, Mission, Objectives, Core Values Board of Directors Organizational Chart Operation Departments Deposits Accounts Cash Department Clearing Department Collection Department Remittance Department Accounts Department Credit Department Chapter No.2 Learning Experience Chapter NO.3 SWOT analysis Chapter NO.4 Recommendation Conclusion 4 5 8 8 9 11 12 13 14 15 15 17 21 22 25 27 31 31 35 35 38 38 39

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CHAPTER # 1 BANKING SECTOR: Banking is one of the most sensitive businesses all over the world. Banks play an important role in the economy and are considered as the backbone of an economy in every country and Pakistan is no exemption. Banks are custodian to the assets of the general masses. The banking sector plays a significant role in a contemporary world of money and economy. It influences and facilitates many different but integrated economic activities like resources mobilization, poverty elimination, production and distribution of public finance. Today, the banking sector is providing financial solutions to the masses and is growing and becoming a solid partner in the development of the any economy. INTRODUCTION TO BANK ALFALAH LIMITED: Bank Alfalah Limited is a private bank in Pakistan owned by the Abu Dhabi Group. Bank Alfalah was incorporated on June 21, 1997 as a public limited company under the Companies Ordinance 1984. . Its banking operations commenced from November 1st,

1997The bank is engaged in commercial banking and related services as defined in the Banking companies ordinance, 1962.The management of the bank had implemented strategies and policies so the bank would become a major player in the market. Charged with the strength of Abu Dhabi consortium, and under the leadership of His Highness Sheikh Nahayan Mubarak Al-Nahayan, Minister of Higher Education and Scientific Research, Government of Abu Dhabi, and a prominent member of Royal Family, the bank is energized with the vision, envisaging the development of various sectors in Pakistan and the position of the bank became stronger which allowed the bank to invest more in revolutionary technology to increase its range of products and services. This facilitates banks commitment to a culture of innovation and seeks out synergies with clients and service providers to ensure uninterrupted services to its customers. They

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perceive the requirements of their customers and match them with quality products and service solutions. During the past five years, Bank Alfalah has emerged as one of the foremost financial institution in the region endeavoring to meet the needs of tomorrow today. Regarding the investment and deposits portfolios BAL is playing dynamic strategies to diversity their funds in more productive assets like; investment in T. Bills and export related concerns, which are producing healthy profits. But all this goes to the staff of Bank Al-Falah Ltd bank that is more proficient and good risk managers. BAL has numerous opportunities in future to increase the volume of business because it has options to tap the market of its own peer units (Al-Falah Car Financing, Al-Falah Visa, & also Al-Falah Home Finance etc) beside BAL has strong assets base, it can diversify its funds in more lending & investment opportunities live; Petroleum concerns, financial derivatives business through treasury. In nutshell, BAL has been performing very well since its birth. All financial institutions of Pakistan regarding commercial banking concerns give Bank Al-Falah Ltd as a leading bank in domestic sector title. Through SWOT analysis we have found that BAL has competitive edge over other peer banks and it wants to tap the prospects of foreign banks to achieve long-term objectives of the bank it ought to have astute, well-designed, comprehensive and dynamic frame of undertaking which might be established after diagnosing the conditions of country and drawbacks due to which it lags behind. HISTORY OF BANK ALFALAH: Bank of Credit & Commerce International (BCCI) was a Pakistan based bank, established by Mr. Agha Hassan Abdi from UBL, in association with U.A.E and Europe. BCCI has its branches in 74 different countries of the world. It had its 3 branches in Pakistan. In 1991, the BCCI was banned, when it was accused by European countries that the bank was involved in some illegal operations with Gulf countries. The major reason behind European

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accusation was that BCCI was of Islamic mode. Therefore, the bank was closed due to international pressure. Then, its 3 Pakistani branches were taken over by the Government of Pakistan, which were named as Habib Credit and Exchange Bank (HCEB) and these were working as subsidiary of Habib Bank Limited. Following the privatization in July 1997, Habib credit and Exchange Band assumed the new identity of Bank Alfalah on February 25, 1998. It is now Abu Dhabi based bank as the family of Sheikh Nahayan Mubarak Al-Nahayan purchased 70% of its shares and 30% shares remained with Habib Bank on behalf of Government of Pakistan. VISION: To be the premier organization operating locally & internationality that provides the complete range of financial services to all segments under one roof. MISSION: To develop & deliver the most innovative products, manage customer experience, deliver quality services that contributes to brand strength, establishes a competitive advantage and enhances profitability, thus providing value to the stakeholders of the bank. OBJECTIVES: Edge on competitors. High profits. Expansion of strong structure. Variety of Products. A good banking standard.

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VALUES: Every door leads to our customers. The legacy of leadership stands as our guiding light. The strength of chain relies on the strength of each link. A keen ear is a key to understanding. Achievement is nothing without target. Time is our most valuable asset. Performance is nothing without the ability to measure it. Achievement is nothing without target.

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BOARD OF DIRECTORS:

H.E. Sheikh Hamdan Bin Mubarak Al Nahayan Chairman

Mr. Abdull Khalil Mr. Abdulla Nasser Al Mutawa Hawalileel Al-Mansoori Director Director

Mr.Khalid Mana Saeed Mr. Ikram UlAl Otaiba Majeed Sehgal Director Director

Mr. Nadeem Iqbal Sheikh Director

Mr Atif Bajwa Director & CEO

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ORGANIZATIONAL CHART AT BANK ALFALAH G.T ROAD GUJRANWALA

Branch Manager Mr.Mazhar-ul-haq

Credit Manager Mr.Zeesha n Khalid Consumer Department Foriegn Trade Deparment

Operations Manager Mr. Qaiser Tariq

Credits Deparmen t

Operations depertment Accounts Departme nt

Cash Departmen t

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OPERATIONS DEPARTMENTS:

Operations department of the Bank Alfalah limited is responsible for the overall operations of the bank. Mr. Qaiser Tariq is the in charge of this department. He looks after the overall to the higher authority on all its departments. The detail of those departments which are controlled under this department is as under.

Account opening Cash department Clearing Remittances

Account Opening Department: It is most important department of bank and its major source of income for bank. The opening of an account is a contractual agreement between the bank and customer which both the concerned parties indulge in a mutually beneficial business relationship. The process of account opening is the first contact which the prospective customer establishes with the bank and vice versa. At bank Alfalah Mr. Mohammed Usman deals in this department. This department is responsible for the opening and closing of accounts. In consideration of Bank Al-Falah Limited, opening and/or continuing to maintain any account, the Account Holder/Depositor or Investor would be bound by the terms and conditions written on the account opening form.

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Deposits accounts: These are the accounts which are opened in the Bank alfalah to its customers, Current Account Notice Deposit Saving/ PLS Account Royal Profit Account Term Deposit Account Basic Banking Account

Cash Department Cash department of Bank Alfalah works under the operation department. Mr. Waseem butt is in charge of this department is given the complete responsibility of cash, as result of transaction in touch local and foreign currencies. It is also responsible for book keeping of these transactions and the safe custody of cash. This department performs the main functions, Cash Receipts Cash payments

Cash deposits and Cash payments may be local and online. Local means depositing cash in the account of that particular branch and online means depositing cash in any other branch of the bank Alfalah. Same for the payments.

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Money gram

Bank Alfalah limited, in collaboration with Money Gram, offers remittance service to Pakistan. Money Gram is person to person money transfer service that allows consumers to receive money in just a few minutes. Features: Secure and reliable An extensive network of quality agents, linked by computer, will transfer your money safely and ensure that it is handled with care and without delay. Thousands of people already use the Money Gram service all over the world. It is trusted for its reliability and security. Convenient and fast Money Gram is available in over 180 countries and territories and in more than 190,000 locations worldwide. With Money Gram your money is transferred immediately and usually arrives at the receiving end within 10 minutes while other services can take days or weeks. There are no complicated procedures and you do not need a bank account or a credit card. Whats more, the receiver is handed the cash immediately. Free message service (for senders) There is also an added personal touch-you can receive a 10 word message from the sender with every transaction at no extra cost. Procedure: Ensure that the sender has given you the Money Gram reference number. Go to any Bank Alfalahs authorized branch, taking some form of identification (e.g.NIC/passport) with you. Provide the reference number and complete a simple form. You will be given the money immediately, in your local currency
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Clearing Department By clearing means sometimes the account holder of Bank Al-Falah Limited present cheques, which is not drawn on Bank Al-Falah but the person, has an account in Bank AlFalah Limited. In this case bank accepts these cheques in clearing department and later on collets the amount from bank on which cheques is drawn through clearing house. This function is called clearing. At bank Alfalah G.T road branch, Gujranwala Mr. Rashid Hafeez is the incharge of clearing department and Mr. Waqas is clearing officer who performs outward clearing. Clearing House: It is a place where representatives of all banks sit together and interchange their claims against each other with the help of controlling staff of NIFT. It is one of the services provided by NIFT to other commercial banks. NIFT acts as a clearinghouse. Different banks are the members of the clearinghouse. A representative of each bank represents his bank in the clearinghouse. Each bank has collected cheques as behalf of their customer but these cheques are not drawn on their own bank. NIFT collects cheques from each bank round about 4 pm. And deliver these cheques next day to that particular branch at 9 am. Instrument to be presented Cheques Demand Drafts Pay Orders Rupee traveler cheque Merchants cheque FFC cheques

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Types of Clearing: Inward Clearing: Those Cheques and other negotiable instruments which are drawn on bank Alfalah G.T road branch, Gujranwala sent by other banks, constitutes the inward clearing of Bank Al-Falah Limited. After having all the stamps and dates of cheques confirmed, the concerned drawers accounts are debited in bank Alfalah G.T road branch, Gujranwala. At branch inward clearing is received at 9 to 9:30 am by NIFT. Outward Clearing When cheques and other negotiable instruments drawn upon other banks like City Bank, MCB, ABN-AMRO or Askari Bank with in area as defined by NIFT (is local clearing) are presented in bank Alfalah G.T road branch, Gujranwala to deposit them in the respective payees accounts, these instruments are lodged in outward clearing of bank Alfalah G.T road branch, Gujranwala. At branch outward clearing is delivered at 3:30 pm to NIFT. If the cheques is returned for any other reason then Enter the cheques in cheques return register, mentioning the reason as appearing on the cheques return memo received from the paying bank. Advice customer about fate. Return the cheques to the customer after getting sign on the register. Collect the cheques return charges as per S.O.C (Schedule of charges) bank Alfalah G.T road branch; Gujranwala deducts RS.300 on every return cheque. Inter City Clearing The cheques that are presented in inter city clearing are of another city and received by air. In this type of clearing the bank confirm at that time that the cheques are clear or not and give to the rider. At branch Inter City clearing is delivered at 3:30 pm to NIFT.

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Same Day Clearing The cheques that are presented in same day clearing are the local cheques and these cheques are clear in same day. Cheques of Rs 1, 00,000 or above are sent for same day clearing. Basically it is the benefits that are provided to special customer. Bank Alfalah G.T road branch, Gujranwala charge Rs. 300 for this service. Cheques for same day clearing must be deposited into branch before 10 am. A special stamp of same day clearing is affixed on these cheques. Clearing Process: Stamps Put On the Cheques When the cheques are presented in bank Alfalah G.T road branch, Gujranwala to be deposited in their respective payees accounts, different stamps are put on cheques before their lodgment in outward clearing. Crossing the cheques Crossing means two parallel lines, drawn across the face of the cheques with or without words written in between them. Crossing may be general or special. In clearing, cheques are crossed specially. Cheques are stamped with banks name between two parallel lines to constitute special crossing. After the cheques have been crossed specially, the holder cannot receive payment except through the banker named on the cheques crossing saves the instrument to go it in illegal hands. If, crossed cheques is lost or stolen, there is no risk involved. So it is an effective means of minimizing the risk of loss. Clearing Stamp After the cheques have been crossed specially, clearing stamp is put on the cheques and other instruments, with the next date, so these cheques would have to be presented in their concerned drawee banks on the subsequent day. Endorsement Stamp
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The word endorsement means anything written or printed on the back of an instrument. So endorsement stamp has to put with words Payees account Credited in Bank Al-Falah Limited Gujranwala branch. National Institutional Facilitation Authority After putting these three stamps on cheques & other negotiable instruments, they are sent to NIFT. NIFT after segregating the cheques of different banks delivers them to their concerned banks Send Report To The Bank After delivering the cheques to different banks NIFT send report to bank Alfalah G.T road branch, Gujranwala, and then the banks staff tally the amount of that report for its own record. Delivered Cheques to Respective Banks Next morning, these cheques are delivered to the respective banks between 9:00 to 9:30AM. In the same manner, other banks present their clearing drawn on Bank Al-Falah. Total number of cheques and their amount delivered to other banks and received from them are written on the Clearing House schedule branch for their payment. After proper scrutiny of cheques, verification of signatures and confirmation of balance in the account, the Officer Clearing Department Debit the customer Account. If any cheque is not passed due to insufficient balance or any other reason, Officer Cash Department returns the same cheque by attaching a cheque return memo containing reason for return. Credit the Customer Account If the cheques are clear then the BAL bank Alfalah G.T road branch, Gujranwala credit the customer Account. If the bank receives the outward return due to any reason then this cheque is entered into the cheque returned register and bank charges are deducted according to the schedule of charges.

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Collection Department All the cheques under collection are called cheques under Collection in Bank AlFalah Limited. There are two types of bills for collection: Outward Bills for Collection (OBC) Local Bills for collection (LBC) Out ward bill for collection: When an instrument is drawn on a bank, which is located outside the city and there is no intercity facility of NIFT, its proceeds can be collected through a mechanism called Outward Bills for Collection (OBC). Features: Remunerative Transfer of funds between cities where no intercity facility Collecting Bank work as an agent Collecting Bank is the holder in due course

Local bill for collection: If any other bank sends a cheque of Bank Al-Falah Limited, it is Inward Bill for Collection. Bank Al-Falah remits money after checking the balance of the customer account. The process of collection starts when the cheques of Bank Al-Falah Ltd are received from other branch of bank alfalah. Bank sends these instruments to NIFT for clearing.

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Remittances Department: A Remittance is an important service provided by banks to customers as well as noncustomers. Since it is not a free service it is a source of income for the bank.

Parties involve in remittances Remitter Remittee Issuing Bank Paying Bank Remitter One who initiates, or requests for a remittance. The remitter comes to the issuing or originating branch, asks for a remittance to be made, and deposits the money to be remitted. The bank charges him a commission for this service. He may or may not be the branchs customer. Remittee A Remittee is also called the beneficiary, or the payee. The person in whose name the remittance is made. A remittee is also the one who receive the payment. Issuing Bank Bank Alfalah G.T road branch, Gujranwala that sends and affects the remittance: through demand drafts, telegraphic transfers, or Mail Transfers. Paying Bank Paying Bank also knows as the drawee branch. The branch on which the instrument is drawn It has to make the payment (usually located in a different city country).

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Kind of remittances Transfer within the branch Transfer from one branch to another Transfer from one bank to another bank in the same city Transfers from one bank to another bank in two cities. Instruments used in remittances at bank Alfalah G.T road branch, Gujranwala: Demand Draft (DD) Pay Order (PO) Telegraph Transfer receipts Rupees Traveler Cheque (RTC) IBCA IBDA

Demand draft Demand Draft is a negotiable instrument, which is drawn by one branch to another branch of the same bank. It is also called bankers cheque. In case of agency arrangement Demand Draft can also be issued by one branch of the bank payable to other branch of the other bank e.g. DD issued by the BAL payable by UBL. Explanation If any person wants to make payment from one city to another city then he can make payment through demand draft. DD is used in place of cheques because it is secured as bank debits the amount first from account and then issues DD or PO. So no chances of bounce. Bank charges a commission for performing this kind of service according to bank rate schedule, which is revised after 6 months. Demand draft may be issued or paid. There are two ways to issue Demand Draft Issue of DD against cash payment
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 Pay order

Issue of DD against Debit of the account

Pay order is a negotiable instrument made by the bank, on account of a customer, to pay on order the specified amount to the directed person (payee).

Use of Pay Order Pay orders are used to make payment or to transfer money, with in the same city. Pay order is always drawn on the bank that has issued it. The main advantage of pay order is that it cannot be dishonored by the bank. Pay order can be endorsed if it is not crossed. The payee may present pay Order for payment either over the counter for cash payment or the payee may transfer credit to his account. Telegraph Transfer Use for telegraphic transfers when the beneficiaries account is not being maintained with bank Alfalah G.T road branch, Gujranwala. At branch TT is received from alfalah Exchange Company in UAE. Bank receives details of beneficiary name, CNIC number, cell number, amount, sender name. Bank before making payment verifies the original CNIC, takes signatures of receiver one on face and two on back of TTR; officer verifies signatures and affix stamps and tickets on it. Rupee Traveling Cheque It is just a shape of Demand Draft. The difference is that it is not drawn on the specified branch. It can be drawn on any branch of the same bank. The paying bank has to verify the signatures and after verification payment is made.

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IBCA Inter bank credit advice used for transactions with in the same branch bank but different branches. This instrument is used for the settlement and payment of funds between different branches of bank alfalah. IBDA Same as IBCA but when a bank issues IBDA head office debits the account of branch first before crediting the account of other branch.

Accounts Department All the transactions taking place are recorded daily in the books of accounts and also entered in the computer daily working is arrived at the account department of bank Alfalah limited every next day from the computer room in the form of a general ledger. This department is responsible to keep the record of each and every transaction and prepare reports about the amount of deposits and advances and sent to Head office or State Bank of Pakistan on monthly, quarterly and yearly basis. Activities The accounts department deals with various routine activities for the bank. The main activities performed by it are: a) Budgeting b) Reporting c) Maintenance & depreciation of fixed assets d) Miscellaneous functions

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Budgeting Accounts department of a bank, for a year makes budget of every branch. Fiscal year of bank starts from January 01 and ends on December 31. The accounts department starts preparing budget from October for the next year.

Reporting The accounts department, in the form of reports, clubs the details of various departments together. Each and every minute detail is provided in weekly, monthly and annual reports. The reports are submitted to head office, SBP and to the government. The accounts department prepares many reports, of which the most common are: Statement Of Affairs Income & Expenditure Business Report SBP Report Outstand Receipt Report Currency Wise Deposits Report

Maintaining of Fixed Assets & their Depreciation Accounts department maintains the record of all the assets and charges depreciation on them. The bank normally uses the straight-line method to compute the depreciation. It is calculated on monthly basis and charged yearly. Bank not only depreciates the existing assets but also the assets transferred in and transferred out.

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Miscellaneous Functions The accounts department also performs some other miscellaneous functions like Closing Entries Daily activity checking Minor expense recording

Credit & Advances Department Mr. Zeeshan Khalid is the head of this department. Credit and Advances Department deals with the provision of loans (credit facility) to the customers. At BAF, credit is given on the basis of a policy made by Board of Directors and is called Credit Policy. This policy statement sets out the underlying principles from which the BOD will determine the commercial credit activity of Bank Alfalah Ltd. The committee to approve direct and review commercial lending of Bank and to ensure that credit policies are adhered to and the credit operation is conducted in an efficient and effective manner. Facilities Bank Alfalah limited, G.T road Gujranwala, provide the following facilities in advances department. Funded facilities Non funded facilities

Funded Facilities These are facilities in which funds like cash fund are included LPO Goods purchased on behalf of bank and provided to customers.

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Pre shipment It provides to prepare consignment. Maximum tenor is about 150 days. Profit may be

16% per annum. The repayment is generally from sale proceeds. This is for preparation of consignment. Post Shipment During export process, funds are required for preparation of next consignment that is providing by post shipment facility. Maximum tenor is 150 days. Profit rate is about 15% per annum. Non Funded Facilities These are on Letter of credit Letter of guarantee

L/C is two types Sight L/C for 90 days. Issuance L/C for 120 days.

Every type of credit product has some features regarding interest/marketing rates, maturity period and some other things. In BAL, all such sort of products is offered which are mostly provided by other commercial banks of Pakistan, but as for as BAL's credit policy is concerned it is very conservative. It hardly sanctions loan against mortgage or property but prefer to give cash collateral. So BAL secures its money against getting more than 100% security from clients. BAL usually, gives loans against refinance scheme and letter of credit transactions. There were various cases which were rejected or not sanctioned for loan due to some minor risky things involved. Mostly credit proposal form was rejected by head office.

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Forms of lending In credit department of BAL, various forms of credit are offered to different clients. Following are the main forms of lending: Cash Credit (PLEDGE) In this form of lending, cash is required to keep as a security. This form is less risky than others. Because bank is fully equipped with cash. Mostly this is used for very special purpose like; payment to exporter for the goods delivered. Below are mentioned core features of the cash finance. Most secure type of finance Stocks are in possession of bank. Whatever amount he may want to release stocks then pay equipment amount.

Running Finance Running finance is most popular sort of credit facility given to clients. This is mostly obtained for the purpose of working capital requirements. Client can draw money even daily from the account but not more than the limit (BAL normal limit was up to 1,000,000/- (one million) that can be drawn by him). In running finance, it is not necessary that security would be in the possession of bank, but all important documents of stocks, property etc, are in its possession. However, the case may be, one limit is for one year, not more than this can be sanctioned. But on the other way around, if client doesn't repay amount in one year after making all possible correspondence and personal contacts then Bank will sue him after 210 days in the court. The amount received by him would be with the markup. It should be noted that if limit

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is more than 1 million then proposal would be sanctioned by credit committee of Head Office. Term Finance This credit facility is also required for working capital requirements. This is the same like running finance but difference is that in this term finance, disbursement of amount is in once a time. Beside, time limit for term finance is 1 year to 10 years; payment is made in the form of installment which can be on monthly, quarterly, half yearly, yearly basis. Markup is received on quarterly basis. It is important to note that markup should be received on that specific time, if principal account is not paid by him on that date. Purchase and Discounting of Bills This is also a unique type of financing. Bank purchases the bills from its own client at lower value but when bills are discharged, and then amount received will be more than that purchased value. This is mostly happened in case of export and import transaction. In addition, markup on these bills is received at the time of purchase or negotiation.

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CHAPTER # 2 My LEARNING EXPERIENCE I did my internship in Bank Al-Falah Limited G.T ROAD Gujranwala. This internship started on 26th June and ended on 08th August. First day, I reported to the manager of the branch Mr. Mazhr-ul-haq who gave me brief introduction about the management and working of the branch, he also check my knowledge about banking by taking a little test and interview. Then he introduced me to the other employees.

Learning from A/c Opening Department This Branch is having about 5000 accounts but there was only one officer, Mr. Muhammad Usman to handle this tough work. He has to deal different people. My experience in this department was really very good. I learnt how to handle different customers, how to fill Account Opening Form, what are the required documents that should be with you in order to open an account, what types of account Bank Al-Falah is offering to the customers, what are the facilities that an account Holder can enjoy and what are the profit rates Bank Al-Falah is giving to its customers. I have learnt the procedure that an Account Opening Officer has to follow in order to open and maintain an Account. In account opening department I learnt about: How to handle different customers Account opening procedure What are required documents for account opening Persons who are eligible for account opening What kinds of account BAL is offering to its customers The profit rates BAL is giving to its customers
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Documents required by different types of accounts Different facilities which are given by bank to its customers Issuance of cheque book The procedure of Zakat and its exemption

I also learned about Lockers maintenance in this department. There are three sizes of lockers small, medium and large and also learned about their rates. LEARNING ABOUT MONEY GRAM After working for a week in Account Opening Department I learned about money gram from another employee of the bank. He was a competent person and use to know operations of other departments. Bank Alfalah Limited with Money Gram International offers worldwide remittance services to its clients. The Money Gram services are available in more than 156 countries more than 40,000 locations. Money Gram services are available to everyone whether customer of bank or not. Message service is also available for Money Gram transactions. Learning in Remittance Department In this department Mr. faisal shazad is dealing. At first day in this department he gave me complete introduction of himself and bank. In this department I learned that how the transfer of money from one branch to another branch takes place. In this department it was my responsibility for doing following jobs: Issuance of Demand draft. Responsibility of DD Advice and its Payment. Issuance of Telegraphic Transfers and. Manual recoding of DD,PO and TTR

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Beyond these he told me what types of instrument he is issuing. Brief detail of all departments of bank, stamps on instruments. Learning in Clearing Department There were two officers in this department .one was Mr. Rashid Hafeez who is in charge and the other was Mr. Waqas who was handling Outward Clearing. At first day in this department MR. Rashid Hafeez gave me complete introduction of clearing. He gave me knowledge regarding

Position of clearing Types Return manual memos OBC and IBC Intercity clearing Special clearing Balancing

Learning from Accounts Department There were three officers in this department; Mr Asim Raza, Ms. Nabeeha. They have divided their work among them. I used to help Ms. Nabeeha in Daily Activity checking, sorting and counting of vouchers and how to calculate the deprecations of all fixed assets. I learnt from Mr. Asim Raza the items of the Balance Sheet of Bank and saw the format of different reports. He helped me to understand his work. He told me about the reports that he has to prepare & the purpose of those reports.

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It was one of those Departments in which Customer interaction is not involve rather paper interaction is important. Learning in credit, Agri, and SME This department was at second floor of the branch. This department is giving a huge amount of return to the branch. Mr. Zeeshan Khalid in charge of this department. I learnt that what facilities bank is providing. Which assets could be leased through this department? What are the documents that are required from different type of client like sole proprietorship, Partnership, company and trust? How the risk can be evaluated. Preparations of offer latter, Credit line proposal, approval process, Borrowers Basic Fact Sheet, Financial Statement of applicant etc. In this department Mr. Khurram Shahzad brief me the details of credits, home finance, staff loans and running finance. LEARNING IN CLEARING DEPARTMENT: After working for a week about money gram I learned about Clearing in Clearing Department under the supervision of two officers. Mr. Rashid Hafeez gave me the full information about clearing, he told me about different types of clearing, return manual memos, Outward Bill of Clearing and Inward Bill of Clearing, intercity clearing, special clearing and balancing. Then me myself learned about: Procedure of clearing a cheque Checking of cheques Different reasons of returning a cheques

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CHAPTER # 3 SWOT ANALYSIS: Strengths The location along with its building/ structure is very much attractive for customers to visit it and do business with it. The bank has highly qualified and skilled workforce and it has succeeded to attract the best banking professionals from across the country due to its growing pace and sound reputation. Bank alfalah has achieved the reputation of fastest growing financial institution in the country. It has greatly increased the customers confidence in the bank The bank alfalah has an advantage over its competitors because the majority of its workforce is young and getting maximum output from its young and energetic workforce. The bank alfalah is one of the pioneers of the commercial banks who have started the Islamic Banking along with their conventional banking. The bank alfalah has a separate network of its Islamic Banking. Weaknesses: Services are expensive as compared to other commercial bank During my stay at BAL I realized that online banking is not working properly & online charges are high as compared to other commercial banks due to which they are losing customers. Negative influence of the management regarding favoritism. During my stay at BAL I observed employees dont work for organization goal. They do work for manager happiness.

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Majority of the workforce consists of young professional, they lack in their experience. And sometimes lack of experience becomes a hurdle while serving to the customers.

The no. of employees is lesser and thus there is an increased workload on the employees.

Opportunities: The big opportunity is to use efficient and effective marketing campaigns in order to get popularity and growth in highly competitive market. The major opportunity, which I realized is that it, should consider more on its promotional activities to target profitable customer No doubt its network has expanded all over the country but opportunities always exist so it should expand its network in those areas where it is lacking due to increase in competition all over the country. BAL should introduce new innovative products to sustain its position in market.

Threats: Although the economy is growing at a good pace, but there are many factors which results in the uncertain position of the economy. Such as political uncertainty, WTO, increase in poverty etc. etc. As a result there are permanent threats of future risks and losses for the bank. New banks are also big threat in the sense of employee turnover and advance Technology to put serious threat to existing banks. Better marketing campaigns by other banks can reduce image of bank.
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As discussed earlier that there is a trend of launching mega projects in the country. And every one is involved in this trend without taking any measure for the successfulness of these projects. This can result into the failure of this project which can make it difficult for the banks to recover their funds from these defaulters

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CHAPTER # 4 RECOMMENDATIONS: It was an interested experience to do internship in Bank Alfalah Limited. The staff was highly cooperated and due to their help I learned big deal about modern banking. Here I am putting some suggestions, which will enable the bank to compete with other banks more effectively & efficiently. Although at bank has a vast network of nationwide branches but it should spread its branch network throughout the world especially in the countries involved in international trade with Pakistan. It is observed that the employees were overburdened so they have to stay at branch till late at night. In this way their efficiency is affected and hiring more employees can reduce their work. Bank Alfalah Limited should properly advertise and Communicate to public about the services provided by it, so that more customers will be attracted. Audit should be held internally. Rather there should be an Audit Department in the branch to make audit on daily basis. This can become so helpful as different banks are having this department of their own. Under no circumstances cheque book should be given to the customer if the account formalities are incomplete. Cheques, which are drawn on Bank Alfalah Branch and returned unpaid in clearing, are not reflected in the Statement of Account of the customers. These cheques must be reflected in the accounts so that credibility of the customers may be assessed. Administration drawbacks should be improved by the strict control of general issues. Mismanagement of resources must be avoided as much as possible as it decreases profit but also discourage hard worker and honest employees.
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Incentive schemes should be developed for the employees that can help motivate them, This might include: o Personal loans and car financing facilities for all ranks of employees. o Scholarship programs for all employees. o Introducing employee awards at branch and regional levels. o Job rotation programs to enhance the skills of employees.

A good communication link between top management and the employees should be developed.

There are some departments in the bank that do not have enough employees, while some have more than needed. All this creates inefficiencies and so the operations manager should look at the department of the branch and see where inefficiencies lie, in consultation of with the heads of the departments and hire individuals where there are less employees or rotate employees from other departments.

Bank Alfalah Limited is a growth-oriented organization, which should perpetually review its strategies of expansion.

The quality of human resource lies at the center of every organizations success and Bank Alfalah Limited is fully aware of the importance of a satisfied and well trained work force that gives us the completive advantage. It should focus on policy of the bank to continually encourage its employees for their skill enhancement in particular areas of banking operation.

CONCLUSION: It was pleasure for me to work with the higher level of executives in Bank Alfalah Limited Main Branch GT road Gujranwala at this level of studies and age and got practical experience. BANK ALFALAH (BAF) under the leadership of Sheikh Nahayan Mubarak Al-

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Nahayan has made significant in building of strengthening both the corporate and retail banking sectors in Pakistan. BANK ALFALAH views specialization and service excellence as the cornerstone of its strategy. The people of bank innovation, creativity, reliability, customized services and their execution are the key ingredients for their future growth. Based on this approach, their Treasury Division and the Structured Finance Unit have been geared to provide specialized services to the corporate customers. Revenues from these activities have started yielding dividends and they expect significant growth in these areas in the coming years. While building on their in-depth familiarity with their customers needs and anticipated developments in the banking industry, the Retail and Corporate areas of their operations will continue to provide a strong and stable base to the business of the Bank. Due to highly trained professionals it is used to make progress leaps and bound. The main objective of bank is to build strong relationship with the customers and make them believe that bank Alfalah is right for them by providing effective and efficient services. It has also created a strong goodwill and trust in the market. Bank Alfalah is providing their customer with wide range of services including online banking, phone banking and some of their new products on the pipeline, include ATM network royal.etc. Alfalah made heavy investments towards enhancing its capabilities in the area of automation and technology. Bank Alfalah is well positioned to meet client needs, with improved competitive advantage. Their focus would be to constantly seek out growth opportunities through increased quality assets and by offering a wider range of products and services to their esteemed customers. There are significant growth opportunities for BANK ALFALAH and they are confident in their ability to grasp them. They are committed to enhancing the shareholders value and look forward with greater optimism to a prosperous future for BANK ALFALAH

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