AN INTERNSHIP REPORT ON BANK ALFLAH

CHAPTER NO 1 Introduction
Overview of the bank Banking is one of the most sensitive businesses all over the world. Banks play an important role in the economy and are considered as the backbone of an economy in every country and Pakistan is no exemption. Banks are custodian to the assets of the general masses. The banking sector plays a significant role in a contemporary world of money and economy. It influences and facilitates many different but integrated economic activities like resources mobilization, poverty elimination, production and distribution of public finance. Pakistan has a well-developed banking system, which consists of a wide variety of institutions ranging from a central bank to commercial banks and to specialized agencies to cater for special requirements of specific sectors. The country started without any worthwhile banking network in 1947 but witnessed phenomenal growth in decades to come. By 1970, it had acquired a flourishing banking sector. Nationalization of banks in the seventies was a major upset to domestic banking industry of the country, which changed the whole complexion of the banking industry The era of nineties was the climax of privatization, deregulation and restructuring in the domestic banking industry and financial institutions. The Muslim Commercial Bank was the first bank to privatize. Followed by Allied Bank limited, United Bank Limited and Habib Bank Limited have all been privatized.

AN INTERNSHIP REPORT ON BANK ALFLAH

History of bank Alfalah: History of Bank Alfalah starts from Bank of Credit and Commercial International BCCI. BCCI was incorporated in Luxembourg on 21st September 1972 with the paid up capital of US $ 2.5 million. By early 1973, BCCI has established its first four branches in three countries Luxembourg, UAE, UK. There were three branches of BCCI in Pakistan. These were Karachi, Lahore, and Rawalpindi. The Lahore branch was opened on 15th December 1978. This branch was opened at that time when some other international banks like Citi Bank, Bank of America and American Express etc. were already working. But within a few years this branch crossed mostly all other banks in case of deposits, advances, imports and exports dealing, guarantees, travelers cheques, sales etc. This bank was going successfully but an international conspiracy compelled its management to stop its operations. BCCI was liquidated on July 5, 1991. At that time bank was operating in almost 69 countries of the world. Branches of BCCI in Pakistan at that time were taken over by Ministry of Finance and SBP. Banks started its operations with HBL with the name of Habib Credit and Exchange Bank HCEB after valuation of its assets for 15 million Dollars. Habib Credit and Exchange Bank Limited were incorporated on June 21st, 1992 as a public limited company under the Companies Ordinance, 1984 and its commenced banking operations from November 1, 1992. Bank Alfalah Limited (BAL) is a private bank in Pakistan owned by the Abu Dhabi Group. Bank Alfalah was incorporated on June 21, 1997 as a public limited company under the Companies Ordinance 1984. Bank Alfalah is registered at both Karachi and Lahore Stock Exchange with a ticker name of BAFL. Its banking operations commenced from November 1,

AN INTERNSHIP REPORT ON BANK ALFLAH

1997. The bank is engaged in commercial banking and related services as defined in the Banking companies ordinance, 1962, with the registered office at B.A.Building, I.I.Chundrigar Road, Karachi. Since its inception, as the new identity of H.C.E.B (Habib Credit and Exchange Bank Limited) after the privatization in 1997, the management of the bank started implementing strategies and policies to carve a distinct position for the bank in the market place. This was further strengthened with a partnership with the Abu Dhabi Group which owns 70% of Bank Alfalah shares. This allowed the bank to invest more in revolutionary technology to increase its range of products and services, perceiving the requirements of their customers and matching them with quality products and service solutions. Vision To be the premier organization operating locally & internationality that provides the complete range of financial services to all segments under one roof. Mission To develop & deliver the most innovative products, manage customer experience, deliver quality services that contributes to brand strength, establishes a competitive advantage and enhances profitability, thus providing value to the stakeholders of the bank. Objectives: o To create an efficient system of banking in Pakistan. o Maintain high profits. o Expanding Islamic banking. o Delivering every service and product under one roof.

AN INTERNSHIP REPORT ON BANK ALFLAH

Departments Worked During Internship I did my internship at Bank Alfalah Limited main branch Islamabad. During my duration of 6 weeks, I worked in the following departments. 1. Accounts Opening 2. Local Remittances 3. Foreign Remittances 4. Credits 5. Trade Finance 6. Clearing 7. Accounts Account opening Department: Account opening is the legal contract between customer and bank. It is the most important and front line department of bank which comes under the retail/ general banking. This department also deals with collection of cheques or other negotiable instruments, issuance of cheque book, issuance of ATM card. Following are the types of the accounts, 1. Current Account 2. Saving Account Current Account. It is a non-interest bearing account. The minimum balance requirement for opening this account is Rs.10,000. Furthermore there is no restriction of deposition and withdrawal of money from this account at any point of time. All the current account holders receive a Hilal Debit Card to get benefit from the ATM service of the bank. Following are the types of accounts which come under the head of current account. They are

AN INTERNSHIP REPORT ON BANK ALFLAH

o Basic Banking Account (BBA account) o Simple Current Account o Alfalah Kamyab Karobar Account The detail on each is as under. Basic Banking Account (BBA account). This account is introduced for low income people like persons with 25,000 salary and for students who cannot maintain minimum balance of Rs.10,000 in their accounts because in this account there is no requirement of minimum balance maintenance. This account is also called as Student Account. Simple Current Account: A minimum initial deposit of Rs.10, 000 is required to open this account. Average balance of Rs.10, 000 should be maintained in this account otherwise Rs.58 will be charged per month to account holder. Online service is available (on customer demand). No charges for online service. Alfalah Kamyab Karobar Account: This account is especially for businessmen. Initial deposit of Rs.5000 is required. It is online by default. It offers flexibility and multiple benefits for account holders. Average balance maintenance is according to the type of category in which the customer lies. The category and average balance maintenance in respective category are o Silver Category Rs 5,000-50,000 o Gold Category Rs.50, 000-100,000 o Platinum Category above Rs.100, 000

Saving Account: Saving account is an interest-bearing account. It has following types of accounts, 1. Simple saving account

AN INTERNSHIP REPORT ON BANK ALFLAH

2. Royal Profit Account 3. Kifayat Account. 4. Alfalah Mahan Amdan Account 5. Alfalah Mahan Amdan Plus(Term Deposit)

Simple Saving Account. Initial deposit and average balance maintenance is Rs.5,000. Profit rate is 5 % which is distributed on half yearly basis. Royal Profit Account. Initial deposit and average balance maintenance is Rs.50,000 for this account. Profit is distributed at rate of 5 % per year but its calculations are done on monthly basis. If there is not maintained a balance of Rs.50,000 then the account holder will not get any profit. For getting profit there must be above Rs.50,000 balance in account. Kifayat Account. Any Pakistani resident can open this account. This account is for individual/joint customers only. Other customers like companies, corporate etc. are not eligible for opening of this account. It is a type of saving account in which minimum initial deposit and average balance maintenance of Rs.10,000 is required. Maximum amount of deposit in this account is of Rs.1 million. Profit is paid at the rate of 7% per annum. If balance falls from 10,000 then no profit will be given to account holder. Profit is given on Quarterly basis. Only 3 debit transactions are allowed per month. Alfalah Mahan Amdan Account. Its a term deposit for three years. Minimum balance of account is Rs.100,000 with an upper limit of Rs 1.5 million. Profit rate is 10 % per annum and paid on monthly basis. Alfalah Mahan Amdan Plus (Term Deposit). In this account the amount is fixed for one year. Minimum balance of account is of Rs.50,000 with no upper limit. Profit rate is 10.5%

AN INTERNSHIP REPORT ON BANK ALFLAH

on monthly basis. Free insurance is also given on such type of account. In case of withdrawl of your money before maturity date then the profit will be distributed as follows, o If you withdraw your money within 6 months you will get a profit at 5% . o If you withdraw your money between 6-9 months you will get a profit at 8%. o If you withdraw your money between 9-12 months you will get a profit at 9%. Remittances : Remittance means the transfer of funds form one account to another or one city to other city. There are two types of remittances. 1. Local remittances 2. Foreign remittances Local remittances Instruments which are used for transfer of money are, Demand Draft Pay order (payment order) Demand Draft. Demand draft is also another safest instrument of payment. If person A has account in Bank Alfalah Blue Area branch and wants to make payment to person B who is in Lahore then demand draft will be a best option for making payment. For making of demand draft person has to fill remittance form and submit it to the remittance department. Then this department will issue demand draft in favor of person B. Demand draft can be payable in any branch of Bank Alfalah. It is valid for 60 days only. Charges for making DD are Rs.87 including 16 % federal excise duty. When the amount of DD is above Rs. 500,000 then branch need to

AN INTERNSHIP REPORT ON BANK ALFLAH

have AML (anti money laundering) approval from the concerned branch. An email is sent and upon confirmation of A/c number and available funds detail, funds are transferred. Pay Order. Pay orders are made to transfer money within the city and this is a safe way to transfer money as the person who makes the transfer through pay order pays in advance. If a person A has to make payment to person B and having account in Bank Alfalah Blue Area branch and person B is also in same city then pay order is the best instrument of making payment. Person A will go in Bank Alfalah, fill the pay order form and submit it into remittance department. Then remittance department will make pay order in the name of person B. Pay order can be payable only in branch from it is issued. Pay order is also called bankers instrument. It is valid for 6 months. Pay order can be payable only in branch from it is issued. Pay order is also called bankers instrument. It is valid for 6 months. Charges for making Pay Order are Rs .87 including 16 % federal excise duty (FED). Foreign remittances: This department deals in inward and outward foreign currency remittances through SWIFT. SWIFT message is generated through software. Only main branch is authorized to generate SWIFT message. All other branches have to resort to main branch for foreign currency transfer. Bank Alfalah for foreign exchange transfers takes the help of Citi Bank for routing. For that it maintains nostro A/c with foreign banks. It requires involving treasury for the transaction. Branches are the agents of treasury. Treasury is division of bank which makes decision regarding investment. Foreign currency accounts are also dealt in these sections. Bank Alfalah Blue Area Branch can open account in foreign currency in four different currencies which are US dollar, Pounds, Euro and Japanese Yen. All these accounts can be opened with minimum balance of

AN INTERNSHIP REPORT ON BANK ALFLAH

500. There is no Zakat deduction, no wealth tax deduction, and no income tax deduction on such accounts. Reporting of foreign remittances is done with the help of ITRS software, generating statement S1. Credits department: The credit departments of Bank Alfalah work with both SMEs and corporate clients. There are two major categories of credit line facilities that Bank Alfalah provide to its customers 1. Funded Credit Line Facility 2. Unfunded Credit Line Facility

Funded Credit Line Facility. These are the major products that come under the short term funded credit line facility: o Current Finance o Karobar Finance o Quick Finance o Term Finance o Lease Finance Current Finance. Current Finance is a short term facility mainly provided to companies. It provides the customers with the funds over a period of time, mainly one year. The main advantage of the current finance facility is that markup is only charged on the utilized part of the finance facility and is mainly used by companies for their working capital management. The bank to provide this facility keeps a security; mainly a mortgaged property and can provide 60% of its assessed value as funds.

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Karobar Finance. Alfalah Karobar Finance is another short term facility that is only provided to sole proprietors. This facility also has one year validity with markup charged on the amount used on monthly basis. This facility again provides individuals to maintain their working capital management and is again given to for a security which is either commercial or residential property. The conditions for current finance and karobar finance are same with one big difference, which is that in karobar finance, the individual has to clear all his balance in his account, once in a year. Credit administration dept approves the proposal and then disbursement takes place. Quick Finance: It is also a short term facility launched in 2008 and is designed to cater the personal needs of the individual e.g marriage, education and trips. The advantage of quick financing is that markup is charged on outstanding balance. When A/c is nil no markup is charged. Whereas on other personal a/c fixed markup is charged. Loan is provided against cash back securities e.g DSC, NSC, prize bonds etc. Term Finance: Term finance is a long term credit facility of 2, 3, and 5 years. It is also known as project financing. The important point in this credit facility is, mark up is charged by the bank on the whole amount of funds either customer utilized the sanction limit or not. Repayment is done in installments. Lease Finance: It is also a long term credit facility provided by Bank Alfalah. It is also known as equipment financing. In this credit facility, the ownership is on the name of bank first, after repayment of funds the ownership is transferred to the customer.

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Unfunded Credit Line Facility. There are two types of unfunded credit line facility, which are as follows: o Letter of Credit (LC) o Letter of Guarantee (LG) Letter of Guarantees. Letter of guarantees is a guarantee that the bank gives to an organization on behalf of the bank. Letter of Guarantees are mainly used when a tender for a specific job is filled by a customer. For guarantee also the customer worth is checked as in the case of current financing. There are three main types of LGs: Bid Bond: Bid Bond are filled at the time of filling out the tender and states that if the company is given the tender, it will start working on it and will not walk away Performance Bonds: Performance Bonds are issued to the beneficiary, to guarantee him that the applicant of the tender will perform the contract under a specific period of time. Performance bonds are issued after the tender is approved of the applicant. Advance payment Guarantee: This is a guarantee that the bank gives when the beneficiary (the firm that issued the tender) that pays an advance of tender to the applicant (the firm that gets the tender), fails to execute the contract according to the covenants then bank will return that advance amount. Trade department: This department controls the trade which occurs across the borders from Pakistan to other countries or in short foreign trade which includes imports and exports. For this purpose Letter of Credit is issued by the issuing bank to facilitate the trade between two traders of the

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different countries. It provides security and safety for the payment of a sum of money involves in trading to the applicant and beneficiary who are doing imports or exports. Letter of Credit: As it is stated earlier in non-funded credit facility in Credit Department that Letter of Credit is actually a written undertaking by the issuing bank for the payment of a sum of money during a specified duration of time on the request of applicant (buyer) to the beneficiary (seller). It is issued against some securities like mortgage properties, pledge of stocks etc. Clearing department: Previously in banking sector, customers were allowed to draw cheques only on their own banks. Later, some relaxation was given to facilitate customers in such a way that now customer can deposit checks of the other banks as well. This facility was the reason for the emergence of Clearing Department. The Clearing Department deals with inward checking of cheques and outwards checking of cheques. Basically clearing department deals with payment made through cheques without involving cash. Types of Clearing: Clearing involves two types one is inward clearing which include cheques of Bank Alfalah Blue Area branch as well as of other branches of Bank Alfalah. These cheques are provided to bank through NIFT. The other is outward clearing including cheques of other banks which are separated according to cities and send to the concern banks through NIFT after attaching bundle covers.

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Accounts department: Accounts department is a backend department at Bank Alfalah blue area main branch Islamabad that performs the following functions: Reports. It generates reports like Statement of Account Activity (a report on the activity of all accounts at Bank Alfalah), Statement of Affairs (a report on the assets and liabilities of Bank Alfalah), Statement of Foreign Exchange (a report on the foreign exchange currencies at the bank) and Statement of Profit & Loss (a report on the income and expenditures of Bank Alfalah Markaz). These reports can be generated at daily, weekly, monthly, quarterly or yearly basis as required by the bank. Income and Expense. The department also needs to calculate the revenues and expenses, control expenditure and forecast profits every month. Budget. Formulation of yearly budgets & targets in consultation with the branch manager is also done by the accounts department. Activity Checking. Daily activity checking and monitoring is done by the accounts department of the whole bank Storage of Records. Accounts Department also has the duty to store vouchers and system generated reports. Payments. The accounts department is responsible to pay vendors on behalf of the bank with authorization from the branch manager. It also has to amortize large payments and calculate depreciation of branch assets.

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CHAPTER NO 2
PERSONAL EXPERIENCE Clearing department: In clearing I had been doing inward and outward checking under the supervision of clearing officer (Innayat ullah) Inward Clearing. Inward checking of cheques or other negotiable instruments are done at the morning time when amounts of cheques are paid by the bank. In inward checking, there are cheques which are drawn on Bank Alfalah. For example, if person A wants to make payment to person B through cheque and person As account is in Bank Alfalah whereas person Bs account is in HBL. Now person A gives cheque of Alfalah to person B and person B will deposit it in HBL. As HBL cannot cash it directly, it will only stamp the cheque within its own bank branch and send it back to Bank Alfalah for clearance. This cheque is checked for clearance and it is called inward clearing. First step of inwards clearing is the verification of cheques in which I have undertaken following three steps. a. b. Check the signature on the cheque. Compare the date on the stamp with the date on which cheque is drawn. The date on stamp should not be more than six months before mentioned on cheque. c. Verify that the amount in words and amount in figures should be same.

After verification, cheques are checked that whether they are according to specification or not by entering the account number into the system. If cheques are according to requirements then they are cleared. For cleared cheques following entries are passed in the system.

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Customer account.Dr. Suspense clearing account.Cr. Note: suspense clearing account is closed in main office account. If cheques are not according to specification then it is returned and Rs.250 is charged for that. Following procedures are followed for returns. Preparation of Memorandum. For returning of cheque, a memorandum is prepared on a memorandum form. I had prepared those forms by mentioning three things that is branch of your own bank along with account number of the cheque holder as well as amount. Then, from the certain reasons mentioned on the memorandum form I had selected the one which is the reason for returning of cheque. There are number of reasons mentioned on memorandum form starting from serial 1 to 13. It includes reasons like insufficient balance, drawers signature differs, incomplete signature etc. If the reason for returning of the cheque is other than stated in memorandum form then it is written at 14 point and 14 point is selected and signature of incharge of department is also taken. Entering Information in Inward Register. After filling of memorandum form, I had entered its information in the inward register. Inward register contains information consisting of Account number, cheque number, drawn on (name of bank on which cheque is drawn), amount of cheque, reasons for returning. After entering information I had attached cheques with it and made photocopies for evidence purposes. Original cheque and memorandum form is sent back to the bank through NIFT and photocopy is retained as a record.

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Outward Clearing. Outward checking involves deposits of cheques. For example, if person C wants to make payment to person D through cheque but person Cs account is in Bank HBL whereas person Ds account is in Bank Alfalah. Now person C gives cheque of HBL to person D and person D will deposit it in Bank Alfalah. As Alfalah cannot cash it directly, it will only stamp the cheque within its own bank branch and send it back to HBL for clearance through Nift. It is called outward clearing. Here, we receive payment of cheques and in case of return, charges will be Rs.250.It includes cheques of other banks and branches and these cheques have attached deposit slip along with it. For outward clearing following entries are passed in the system. Suspense clearing account.Dr. Customer account...Cr. As a first step, I had separated cheques from their deposit slips and after attaching bundle covers, they are sent to concern banks through NIFT. Outward Bill for Collection. When the customer brings a cheque drawn on outstation branches of Bank Alfalah and other banks which are not under the list of NIFT and they are presented in Bank Alfalah Blue Area branch then OBC (Outward bill for collection) is prepared. The clearing officer receives the cheques. During my one week of working here I was responsible for examining the particulars on the cheque and compared it with the details on pay- in slips. Then I entered the particulars in the OBC register and affixed the following stamps: a. Crossing stamp in favor of Bank Alfalah on the face of the cheque. b. OBC # stamp on the face of the cheque. c. Payess account will be credited on realization stamp on the back of the cheque.

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Then I prepare the OBC forwarding schedule do photo copy of forwarding schedule and cheque for record. The clearing officer passes entry in sysyem by creating a liability. Cheque after being stamped, are sent to the Bank Alfalah branch of the city where the cheque was drawn. In case no Bank Alfalah branch in the area, the cheque is sent to the correspondent bank in the area. If the cheque is related to Bank Alfalah, IBCA is received from the branch and if it was drawn on another bank, a Draft is received. Particulars on IBCA / Draft are compared with the retained copy of the OBC forwarding schedule and the reversal entry of liability is passed. On realization the OBC register is updated. Inward Bill for Collection. It is prepared when the cheque is drawn on Bank Alfalah Blue Area branch or any other local bank but they are presented in outstation branches of Bank Alfalah or other banks. The Clearing officer receives the cheques. As a internee, I was reposible to enter the particulars of cheques in the IBC (Inward Bill for Collection) register. If the cheque is drawn on Bank Alfalah then I prepare IBCA and dispatched it to the respective branch, but if the cheque is dishonored then it is returned to the respective branch with memo. If the cheque is drawn on any other bank then a draft is prepared and dispatched to the respective branch. I was also responsible to keeping the reord of IBCA by doing the photo copy of it. National Institute Of Facilitation and Technology. NIFT stands for national institute of facilitation and technology. It is an institution which facilitates all the banks to submit their inward and outward cheques to it and this institution send them to concerned banks. Role of NIFT. Previously all banks had to directly deal with the State Bank of Pakistan. All the banks had their accounts in State Bank. At that time, every bank sent their inward and outward cheques to central bank and then central bank distributed cheques to concerned banks. After

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some lapse of time, NIFT came into action and then this activity is being performed by NIFT to facilitate banks. Now rider of NIFT comes twice a day to collect inward cheques and outward cheques respectively and sends them to the concerned banks. NIFT gives a report of inward and outward cheques and keeps record and provides that record to the concerned bank branch. (personal communication, Aftab Alam 10th August) Accounts opening section: I had been to account opening section for one week and got following experience under the supervision of account opening officer. She provided me the following information. Requirements of Account Opening. Requirements of account opening differ from individual to individual like for students, following documents like university recommendation letter, guardian undertaking, and CNIC copy are required. In case of serving persons, letter from organization in which individual is working with the salary statement is mandatory. For a business man, detail of business on letter head or on stamped paper is required. Procedure of Account Opening. In procedure of account opening, a person should be of mature age, sound mind, and not declared bankrupt. For opening an account opening form (AOF) is filled. I had helped many customers in filling their forms. And then checked that whether those were correctly filled or not. Introduction of accounts is the important column in the form. CNIC number must be correctly entered. I had taken signature of customer on specimen signature card under the supervision of my in- charge. Signature differ undertaking is filled by those customers who use different signature for their account from those on CNIC card and Vernacular form is filled by those customers who

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cannot sign in English and uses thumb impression for their identity. On such undertakings, it is clearly mentioned that banker is not responsible in case of any fraud. Then form is stamped and entry is made in the account opening register. After opening the account, letter of thanks is sent to the customer for creating goodwill of the organization. It is also a way for the verification of customers postal addresses. Bank Statement. In account opening many customers comes to get their bank statements which contain all the details of the transaction made by the customer. In order to get the bank statement a request form is to be filled. If a person who is not a account holder comes to collect bank statement on behalf of account holder then he has to show the authority letter given by account holder on which name of third person and his CNIC number should be mentioned. Cheque Collection. Account opening is also a cheque collection department. I was also responsible to collect cheques from the customers and get them stamped. I was also responsible to fill the cheque/ cash deposit slip on behalf of customer, if they cannot fill it by themselves. Outward cheques. These cheques include cheques of other banks. If a customer having account in Bank Alfalah Blue Area branch deposits cheque of other bank then he has to fill deposit slip and get it attached with cheque. These are sent to clearing department for clearance after entering information in the register. I personally filled many deposits slips of customers and entered that in the outward register. Online cheques. If a person has account in Bank Alfalah Blue Area branch and he wants to make transaction in any other branch of Bank through cheque then such cheques comes under the head of online. For such cheques, online slip called online inter branch transaction request is filled. I also filled such slips for customers. It contains two heads. For cash transaction, cash

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deposit/ cheque encashment head is filled and for transfer of funds, fund transfer head is filled. Signature of customer is also mandatory on this slip. After filling the slip, I sent those cheques to Online Officer who made the transaction through his system. Issuance of Cheque Book. For issuance of cheque book, requisition form is to be filled. Bank alfalah gives free initial cheque book to the current account holders. Charges for issuance of cheque books are Rs.6 per leaf for current account and Rs. 8 for savings account. Normally, 25 page cheque books are issued. Entry is being made in the cheque book register which tells how many people have applied for cheque books. Then those requisitions are sent to Karachi through system. After 2 days, cheque books are delivered to bank along with a report and then further information is entered in the register like card number, date received from head office. I as an internee had entered all this information in the register. When a customer came to receive the cheque book, I was responsible to ask him his account number and give him cheque book after getting receiving acknowledgement receipt of cheque book from him and mentioning time on it. Then this is entered in the system and print of cheque book activation report is taken out. I was responsible for cross checking the acknowledgement receipt with this report and have to mention the time in one column of this report. Before sending these acknowledgements to the accounts department for keeping them as a record I file of the reports send by head office is maintained. I as an internee had to enter date and time in the report which is send by the head office and so that if any customer claims that he didnt collect the cheque book then acknowledgement receipts of that date are called from the accounts department to make sure about the issuance of cheque book.

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Reactivation of Dormant Account. According to the State bank rules the customer should visit bank at least once in the six months otherwise his/her account will be classified as Dormant. Funds can be deposited in the account but the person cannot withdraw them unless it is reactivated. If any customer come whose account is classified as dormant I as an internee was responsible first of all to see his/her original CNIC and have to make sure that it is not expired and then I fill the Reactivation of Dormant Account form which contains information like account number, account title and reason for not doing any transaction during the last six months. After filling the form I took signature of the account holder on the form and then give it to the In-charge consumer banking for supervision. Meanwhile the customer is asked to make any DR or CR transaction of any amount. When the forms get supervised the Account Opening officer activates the dormant account. On the next day, all those accounts which have been activated in the previous day I took the print of KYC (know your customer) of all those accounts and then attached them with their respective reactivation of dormant account form. Then I took the print of activated dormant account report and I was responsible to cross check that report with the forms. Other Forms. As an internee I was responsible to fill a no of other forms on behalf of customers like cheque block request form, change in address form, mobile banking and estatement registration form etc. Accounts department: Incharge of the Account department or his sub-ordinate daily generates reports of activity performed a day before of every person in the bank. First of all sorting of all the cheques and deposit slips or vouchers of each account type are separated and it is done with the help of their

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codes or authorized signatures. Then they are placed with the system generated reports. As an internee, I was responsible of Activity checking. Activity checking. I had to do daily activity checking and there are four stages in which activity checking takes place: 1. Collecting vouchers, cheques etc from all departments 2. Sorting Vouchers 3. Checking Activity 4. Packing Collecting Vouchers. The first stage of activity checking is collecting all vouchers, cheques, DDs, pay order, pay slips etc from all departments of the bank. Mainly vouchers come from the operations department. After collecting these vouchers etc from the departments, I had to check if all stamps are stamped on these vouchers etc. Sorting Vouchers. After all vouchers are collected, they need to be sorted into eight categories: 1. Customer Debit: Includes debit vouchers and cheques 2. Customer Credit: Includes credit vouchers and credit slips 3. Income: Income vouchers 4. Expenditure: Expenses vouchers and payment vouchers 5. Others: Includes vouchers about excise duty, FED, teller, ATM, payables etc 6. Online: Contain online vouchers and online credit slips etc 7. Head Office (H.O): Includes HO vouchers and IBCA, DD advices 8. Bills Payable General (BPG): Includes vouchers and DD, Pay orders, Pay slips etc

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Checking Activity. After sorting takes place, daily activity is checked using the statement of account activity, which contains all daily activity of the accounts in the bank. Activity checking is done by seeing if the values and account numbers in the sorted vouchers match that of the activity and whether or not there is any missing activity that is not in the vouchers. I verified account number and amount from report for credit voucher also cheque number, account number, and amount for debit vouchers and then placed a mark on the report with the pen as was instructed by my supervisor. Packing. After the activity is checked, all sorted vouchers are counted, both debit and credit and then packed by totaling the vouchers. Credits department: The credit department of the bank is the most important and income generating department. Without this department bank cant work because lending is the most prominent feature of a bank. Loans, credit, advances are one and the same thing. Nissar ul Amin who is an RM credits at main branch Alfalah Islamabad told me that bank is an organization or it can be called as market which has something to sell to its potential and prospective customers. The things which are to be sold are known as facilities in banking terminology. Together with my supervisor at credits I managed to analyze the financials of one of the credit customers, TF pipes which is a subsidiary of Pakistan telecom foundation. I was also part of the meeting in which renewal of credit facility to TF pipes was being under question. I realized how hard it is to gauge the competency of the client and maintain relations for future business. I also managed to fill credit facility application form under the supervision of my supervisor.

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Lease Financing: In lease financing first a customer makes a request on request form. Bank then demands all of the entity documents along with financials. Then a credit line proposal is made and credit internal rating (CIR) is checked to know customers credit and risk position. After checking the qualitative data all the documents are sent to the area office which after further evaluation sent this proposal to regional office with recommendations. Then it is sent to area risk (same for whole North region). If area office finds it feasible then they will give sanction advice to the bank and the facility is approved. (personal communication, Nissar ul Amin, 13th August, 2012) Foreign remittances: The In-charge of foreign currency M. Hanan Akhtar taught me the concepts related to foreign currency accounts. Foreign currency is transferred through swift message. Bank Alfalah main branch Islamabad is authorized to generate swift message. All other branches have to send swift generation request to main branch and then swift message is generated. In addition to generating swift, department has to report all the foreign currency transactions to SBP through ITRS (international transaction reporting system). It has three schedules. S1 .. for remittances received in foreign currency. S2 .. for foreign remittances received in PKR. S3 .. for cash transactions. Blotters and Form M. Furthermore each day blotters have been prepared. I was responsible for not only maintaining blotters in which summary of each day transaction is being reported to head

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office, but also I help several customers in filling FORM M which is used for outward remittances. It can be found in annexures as well. Outward and Inward remittance register. I also help my supervisor in maintaining OFTT (outward foreign telegraphic transfer) and IFTT (inward foreign telegraphic) registers. IFTT register contained details like voucher number, country of remittance, FCY amount, value date, cover provided to, A/c credited, remarks and date of realization. Whereas, OFTT register has details of FTT no, customer, name of payee, Amount of FTT, rate, equivalent rupees, initial and remarks. Term deposits: These deposits are repayable on a term on due date. This due date is called maturity date of the deposits and it is determined at the time the deposit is made. These deposits have tenors starting from 1 month to 5 years. But now a day Bank Alfalah is extending term deposits facility of only upto 1 year. They are sometimes book on roll over basis which means that profit is booked again on maturity. Some people only book principle on roll over basis. If there is a premature encashment of term deposit then either a penalty is put on the customer or rack rate (standard rate) is given for profit. (personal communication, Hafiz Salman 28th August, 2012) Trade Department: The in-charge trade told me the process involved in Letter of Credit (LC) which can be well explained with the help of an example and a diagram in annexure- A Suppose Mr. B imports 100 computers from Mr. A. they will do an agreement which is called Performa Invoice which contains the quantity, description etc. Mr. B will go to his bank

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and will show that agreement and will ask his bank to open a LC in favor of Mr. A and tells them any condition he wants to mention in the LC, like shipment should not be partial etc. Now Bank Alfalah will open LC and send it to HSBC. This is called LC Issuance. Mr. A then collect that LC from HSBC which is called LC Advising and will prepare documents according to the conditions mentioned and give them to the HSBC. Exporter bank then send backs that LC along with the documents to Bank Alfalah. If the documents are according to the LC, then Bank Alfalah after receiving the amount of LC give those documents to Mr. B who will go the airport or seaport to collect his goods. Dummy files of LC. All the original LCs are sent to head office so to keep the record of it dummy files are maintained. As an internee, I was responsible to make dummy files. I took photo copy of every document in the LC and fill the dummy file cover information. E-Form. Form E is used for Export. I was responsible to check that whether it is filled properly or not. Then I affix different stamps on it and mention the date. One of the stamps which I affix on the back side of last page of E form contains the following information like date, e-form #, eform amount, amount utilized, balance and initial. I was responsible to fill this information and maintaining the same kind of data on the excel sheet. A duplicate copy of this form is send to head office, a triplicate copy along with the documents necessary is send to SBP and one is maintained with the bank. E-Form Certification Register. I was also responsible to maintain the customer wise record in the E-Form register which contains the following information like, Date form certified, E-form #, Amount FCY, Tenor, Terms of contract, Description of goods, Name of vessels, Destination,

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Date of shipment, Date of lodgment, Reference #, Date of realization, Date of triplicate copy sent to SBP, Amount Realized, Initial, Remarks. Advance Payment Register. During my 1 week working in trade department, I also maintained the advance payment register which contains the following information like, Date, Adv payment #, Exporter name, Importer name, Remitter Bank, FCY Amount, Pak equivalent, Commodity, Eform #, E-form value, Amt Utilized, Balance, Initial and Remarks. Lockers: Locker facility is also available to customers. But only those customers are given this facility whose a/c turnover is high. Three types of lockers are offered. Rent/annum Small Rs 2000 Medium Rs 3000 Large.. Rs 4000

Locker is given on security which is 3 times that of the rent. Whenever the locker is surrender the security will be refunded. If locker rent is due and not paid Rs. 200 per month is charged as a penalty. And if the rent is overdue for two consecutive months then a reminder letter is sent to the customer. For the employees of Bank Alfalah the lockers rent is half and key deposit is waived. I was responsible to enter the following details in the register when a customer comes to operate a locker. 1. Customer name

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2. Time in and time out 3. Locker number 4. Signatures

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CHAPTER NO 3
SWOT Analysis Strengths Innovative products Centralized banking system General acceptability Credit rating Member of Abu Dhabi group Coordination among employees Opportunities Expanding customer network Investment in industrial sector Weaknesses Software incapability Time Mismanagement Management inefficiency Awaiting customers Lack of Required staff No prayer room facility Threats Car financing Economic condition of the country Competitors

Strengths: Innovative products. Bank Alfalah delivering and developing the most innovative products, manage customer experience, deliver quality service that contribute brand strength, and enhances profitability. Alfalah quick financing and Kamyab Karobar is a clear cut example. Centralized banking system. Centralized banking system through which bank is able to satisfy even those Alfalah customers who have account in some other branch in some other city. The concept of decentralized banking has given Bank Alfalah an edge over its competitors and

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more and more customers will be attracted to this bank. The increase in number of customer will definitely help the bank to increase deposits. General Acceptability: Alfalahs biggest strength is that its credit cards are accepted in more than 150 countries. Bank Alfalah Credit Card is like a partner everywhere and is globally accepted and welcomed at locations displaying the VISA logo. It is accepted at nearly 30 million locations in more than 150 countries around the globe and over 18,000 Bank Alfalahs establishments in Pakistan Credit Rating: PACRA, a premier rating agency of the country, has rated the bank AA (double A), Entity Rating for long term and A1+ (A one plus) for the short term. These ratings denote a very low expectation of credit risk, strong capacity for timely payment of financial commitments in the long term and by highest capacity for timely repayment in the short term, respectively. The ratings of first and second and third unsecured listed and subordinated TFC issues of PKR 650 million, PKR 1,250 million and Rs.1,325 million have been maintained at AA- (Double A minus). Member of Abu Dhabi group: Bank Alfalah is member of very strong group which are running success businesses like Warid, Wateen, UBL, Alfalah insurance and others in Pakistan. Co-ordination amongst employees: There was a good coordination among employees. They help each other in case of difficulty. I can be proved by the fact that when I was in clearing department, the Incharge of clearing department was not finding the one of important vouchers. Then the staff of that floor helped her in that problematic situation and left their own work for the time being.

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Weaknesses: Software incapatability: Bank Alfalah is now shifted to T24 TEMINOS from BANK SMART for its daily transactions. Although this system has advantages of centralization but Bank is still facing compatibility issues with it. Due to that customers have to wait and sometimes they get irritated. Time Mismanagement: Miss management of time is a major drawback in Bank Alfalah. The official closing time of the bank is 6 p.m but due to miss management employees have to sit late. Sometimes employees often leave their desk at 8 p.m. Management Inefficiency: I have also observed inefficiency of management. Bank Alfalah is one of the prestigious bank in Pakistan. It should be well equipped with all the contingency plans with proper backups. During load shedding hours all the systems of the bank goes off. Only main floor is properly backed up with UPS. Whereas, accounts, clearing, trade, and foreign remittances do not enjoy any facility of UPS backup. This has created a feeling of dissatisfaction amongst employees and they feel that they are not part of the bank. Awaiting Customers: Today in era of competition when all the organizations are trying to attract and make more and more customers through different strategies and promotions a disappointed customer proves very dangerous and harmful to the organization. As disappointed customer may leave the organization and his bad word of mouth can make the potential customers not to join the organization. I have observed that customer was kept waiting and the officer/ manger was not on his seat.

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Lack of required staff: Although Bank Alfalah is a very good employer of talented professionals, however, it was observed that there were some departments in the bank such as Foreign remittances and accounts that lacked the number of professionals in it that resulted in efficiencies in that department. No prayer room facility: Another drawback is that there is no prayer room or common room for female employees in the bank. Opportunities: Expanding customer network: In the prevailing scenario, Bank Alfalah could penetrate further and could capture various corporate customers in addition to the retail customers by expanding their network. Investment in Industrial Sector: Pakistan is facing shortage in energy, although there are many natural resources in Pakistans far flung areas which can be explored and can produce ample amount of energy. Bank Alfalah has a golden opportunity of making investment in that sector. It will provide bank a monetary return for the unlimited time as it is the basic need of the country and its value cannot be lessen. Similarly, bank can also be renowned as initiator in exploring the resources and there is a great need of investment in that sector. On a practical note yes it is difficult, time consuming and costly project but not an impossible task. And taking the initiative will definitely provide an edge to Bank Alfalah over its competitors.

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Threats: Car Financing: In Car Financing MCB & HBL are main threats. Moreover leasing companies are also growing. Currently, only Habib Bank Ltd is offering car financing service out of seven larger commercial banks. The branches of UBL, ABL, MCB Bank, Standard Charted Bank, Bank Alfalah Ltd, Askari Commercial Bank, NIB Bank and JS Bank Ltd have almost halted auto credit disbursement to consumers due to severe completion and intensive rates. Economic condition of the country: The economic condition of the country is not very encouraging which is adding to the fierce competition between different banks for business. Competitors: Bank Alfalah has formalized a lot of products and services for its customers, even more than other commercial banks, but any advertisement on electronic media has not been seen. Since, Bank Alfalahs major competitor, Union Bank Limited has started large media campaign, so keeping in view these threats; Bank Alfalah is emphasizing more on its advertisement

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CHAPTER NO 4
Recommendations: I would recommend following things of the problems discussed in the above section, that might increase the efficiency of both the operations and employees of Bank Alfalah Technological Advancements. Bank Alfalah should develop a modern connectivity architecture to effectively maintain an online connection of the branch with other branches and also the ATM link, which may include using modern technologies like fiber cables, routers etc. Also backup links should also be developed. Also a proper IT department should be established in the branch, with professional having the knowledge to maintain a secured connection with other banks. Also scheduled backups of data should be done with in the bank. Incentives: Incentive schemes should be developed for the employees that can help motivate them, which might include: o Personal loans and car financing facilities for all ranks of employees. o Scholarship programs for all employees. o Introducing employee awards at branch and regional levels. o Job rotation programs to enhance the skills of employees. Moreover, incentive rates should be according to the rates prevailing in the market and should be marginally increased.

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Priority Banking and Business Development Department. There is no priority banking department at Bank Alfalah, like that of other bank. A priority banking department should be developed so as to give even more exclusive and customized services to high end customers with large deposit accounts. Also Business Development Department should be developed in the branch, so that they can actively find prospect customers to take up products from Bank Alfalah. Innovative Products. New and innovative products should be introduced by Bank Alfalah, like other bank such as Citibank and Standard Chartered Bank develops for their customer. For this purpose, special teams should be developed that include professional from all departments of the banks to come with ideas. This process will increase the number of ideas generated and even produce innovative products for the bank that might give them the edge. Placements of Employees. There are some departments in the bank that do not have enough employees, while some have more than needed. All this creates inefficiencies and so the operations manager should look at the department of the branch and see where inefficiencies lie, in consultation of with the heads of the departments and hire individuals where there are less employees or rotate employees from other departments. Amenities in Branch. There should be a prayer room developed in all branches as many employees want to pray, but do not have the proper place to do it. Also work like sorting, which takes up a lot of space should be done in a separate place and amenities like television and internet connection should be placed in the common room, so as to give employees a relaxing environment when they have a break.

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Targets. Targets assigned to the employees should be realistic and according to the economic situation of the country. Conclusion: I have done six week internship in Bank Alfalah, main branch, blue Area Islamabad as per required my university for completion of degree. The report comprises of brief details of the history, background of the bank the main purpose of report is to have detail understanding of the functions of bank its departments and overall performance. In short I had the study organization as a whole. During my internship I had found things very different from those written in books. I had tried my best to gain practical exposure and work hard to get more and more skills and understand the decorum of professional life in short period of six weeks.

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References: Overview of Bank.(2012) Retrieved on 15 September, 2012, From: http://prr.hec.gov.pk/chapters/2264-2.pdf Overview of Bank Alfalah.(2012). Retrieved on 15 September, 2012, from: http://www.bankalfalah.com/about/historical_overview.asp Vision statement and mission statement.(2012). Retrieved on 16 September, 2012, from: http://bankalfalah.com/about/vision_mission.asp PACRA rating.(2012). Retrieved from 18 September, 2012, from: http://www.bankalfalah.com/about/credit_rating.asp Corporate objectives,(2012). Retrieved on 17 September, 2012, From:http://bizcovering.com/business/strategic-goals-and-objectives-of-alfalahbank-limited/

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Annexures
Annexure-A (personal communication, Mr Adan, 29th August, 2012)

Figure explaining trade department working Organogram Swift message Annexure-B (personal communication, Hafiz Salman, 28th August, 2012) Letter of credit Annexure-C (personal communication, Mr Adan, 29th August, 2012) Pay order

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ANNEXURE-A

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China Mr. A (Exporter)

Pakistan Mr. B (Importer)

Exporters Bank HSBC

Importers Bank Bank Alfalah

Figure 1 (Figure explaining trade department working)

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ANNEXURE-B

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ANNEXURE-C