CHAPTER No.

1
INTRODUCTION

1.1 ORGANIZATION INTRODUCTION

Organization Name

Bank Alfalah Islamic Limited.

Year of Foundation

21st june 1997

Authorized Capital

Rs. 1000 Million. (100,000,000 shares @ 10 each)

National Tax Number

0698202-6

General Sales Tax Number

1700981301164

Business Nature
Organization/Company Type
Principal Activity

Public limited and registered

Company Limited by shares
Products & Services
Car Financing, Rupee Travellers Cheques,

Major Product(s)/Service(s)

Mailing Address

Online Banking, Credit Cards,

ATMs, Home Financing, Takaful,
Islamic Banking, Corporate and Structured Financing.
Property No. 636 Main Jaranwala Road, Adjacent to

Phone No.

National Silk Mills Faisalabad.

0418-559710 -14

Fax

+92(42) 3628 5462

Website

www.bankalfalah.com

E-Mail

Sohailakbar@bankalfalah.com

Facebook

www.facebook.com/bankalfalahislamic

1.2 BRIEF HISTORY OF BANKING IN PAKISTAN

Before the partition of India and Pakistan in 1947, branches of British banks dominated
banking in Pakistan. The first domestic banking institutions emerged in the 1940s,
immediately after Pakistans independence. These institutions include the Australasia Bank
(today, Allied Bank Limited) or Habib Bank Limited, Muslim Commercial Bank, and the
National Bank of Pakistan. The NBP was wholly government owned but prominent merchant
families established the other three. In 1948, the State Bank of Pakistan (SBP) was formed. It
assumed that the supervisory and monetary policy powers of the State Bank of India. From
1960 to 1970, a number of specialized Development financial institutions (DFIs) such as
Industrial Development Bank of Pakistan and the Agricultural Bank emerged. These DFIs
were either controlled directly by the state or through the SBP, and were intended to
concentrate on lending to long-term projects in specific priority sectors.
In 1974 Government of Pakistan nationalized all the private sector banks. In addition to
managing the monetary policy, SBP also oversees the entire financial system and has
institutionalized the procedure for appointment of chief executive officer (CEO) and Board
of the Nationalized Commercialized Banks and DFIs.
Banking and Financial services sector in Pakistan comprises the commercial banks and the
non-banking financial institutions, including the development finance institutions (DFIs),
leasing companies, modarabas (Islamic Mutual Funds) and investment banks. These are
controlled and regulated by the SBP. Pakistan is in the process of adopting an Islamic
(Shariah) financial system, under which interest-based banking is not allowed. Since 1990
the Government of Pakistan has introduced various reforms in the financial services sector
enhancing the level of autonomy enjoyed by the SBP.
Privatization program that began in Pakistan in 1991, two of five NCBs and DFIs were
privatized and 11 new private banks were setup. The number of banks operating in Pakistan
has increased, which in turn has resulted in increased competition. During previous five
years, the combined total assets of domestic banks, showed an average annual increase of 22
percent, while combined deposits have recorded an increase of 27 percent per annum. A total
of forty-six commercial banks, including twenty-one foreign banks, are operating in Pakistan.
Additionally, sixteen Investment Banks, twenty-nine Leasing Companies and fifty-three
Modaraba Companies provide a mix of financial services.

Opportunities for new foreign banks exist in consumer banking, corporate bonds, investment
banking, leasing and housing finance sectors. Good reputation enjoyed by the existing
foreign banks will be helpful for new entrants. Some challenges, however, do exist in the
form of weak economic conditions in Pakistan and the turnaround possibilities in NCBs
through privatization.
1.2.1 HISTORY OF BANK ALFALAH LIMITED
Bank Alfalah Limited was incorporated on June 21, 1997 as a public limited company under
the Companies Ordinance 1984. Its banking operations commenced from November 1st,
1997. Bank Alfalah Limited started its life as Pakistan Operation of BCCI. A multi-national
conglomerate based in Luxembourg and Grand Cayman. BCCI was the 7th largest bank in
the world. The estimated assets of BCCI were 20 billion dollars. The operations of the Bank
were in 70 different countries. In July 1991, the Bank of England and International
Liquidators accused BCCI of being involved in money laundering to the tune of 1.54 billion
dollars.
Upon closing down of BCCI in 1992 the operations of BCCI in Pakistan were acquired by
HBL, and were run as a wholly owned subsidiary by the name of Habib Credit & Exchange
Bank (HCEB). HCEB was later acquired by the Abu Dhabi Group through privatization
under the leadership of Sheikh Nahayan Mubarak Al-Nahayan, in 1997 and its 70%
ownership was transferred to Abu Dhabi Group. The agreement was signed on July 7, 1997.
1.2.2 BANK ALFALAH TODAY
The strength and stand of Abu Dhabi Group, principal owners of BAL, have helped Bank
Alfalah Limited launch high quality consumer and corporate banking operations in Pakistan.
BAL have embarked upon a rapid expansion program to make sure that the services reach
more and more people, BAL is headed towards an optimum sized network reaching major
urban centers in Pakistan. The Bank is well positioned and geographically poised, to cater for
increased business demands, from its existing and potential clients.
There are 189 Branches of Bank Alfalah Limited in 74 different cities of Pakistan, with the
registered office at B.A.Building, I.I.Chundrigar, Karachi. Islamic Banking Division is a

recent initiative which operates as a separate branch. It offers shariah complaint products
through a network of 50 branches.
With the implementation of the office automation and communication system BAL will be
poised to compete with the best in quality and speed of customer services. Recently WARID
telecom private limited signed strategic alliance agreement with Ericsson. Earlier, a latter of
intent was signed in this regard on 5th September, 2004. The chairman of Abu Dhabi
consortium, and of Warid telecom, his Highness Sheikh Nahayan Mubarak Al-Nahayan was
the chief guest of the ceremony. Under this Strategic alliance agreement, Ericsson will
provide Warid telecom a complete turnkey state of the art network GSM online.

1.3 VISION STATEMENT

To be the premier organizations operating locally & internationally that provides the
complete range of financial services to all segments under one roof.
Bank Alfalah is one of the leading financial institutes and Bank alfalah day by day increasing
its products for all the segments in Pakistan i.e for Businessmen, Industrialists, and
Agriculturists and for the Government bodies in the country. Bank Afalah is trying to reach
each segment in Pakistan, and trying to provide its products at lowest charges and with
easiest way, under one roof.

1.4 MISSION STATEMENT

To develop & deliver the most innovative products, manage customer experience, deliver
quality service that contributes the brand strength, establishes a competitive advantage and
enhances profitability, thus providing value to the stakeholders of the bank.
In the above Mission the Management of Bank Alfalah emphasis on the following areas:

To provide the new and more innovative products than the other banks.

To take and manage the ideas of the valuable customer for the Bank

To deliver high quality and quick services to the customers, who are keep great value

for Bank Alfalah.

Bank Alfalah tries to promote those activities which give the fruitful result to the

customers and the stakeholder of the bank.

1.5 CORPORATE VALUES OF BANK ALFALAH LIMITED
The corporate values of the bank are excellent customer service, creativity, integrity, respect,
teamwork and professionalism, which play an integral role in the fulfillment of the banks
mission. Clearly these values are not new to the bank and have been high priorities since the
bank was established. B continuously recognizing the importance of corporate values, the
individual contributions from all employees has made the bank what it is today. In addition to
the corporate values, bank urges to provide all those having interest in the bank with a
number of criteria by which they can access the bank.
1.5.1 OBJECTIVES OF BANK ALFALAH LIMITED

To create maximum economic value for shareholders through constant relationships

focus on financial services.

To promote industrial agricultural and socio-economic processes through active

participation of private and public sector in the country,

Create diversified and sound portfolio for utilization of idle funds and their investing

in the existing and new venture especially in the pioneering of high tech agro based, export
oriented and engineering projects to ensure maximum return
1.5.2 BANK ALFALAH CREDIT RATING
Pakistan Credit Rating Agency the leading credit agency in the country has rated
Bank Alfalah very favorably. The Bank has been awarded an AA- (double A minus) and an
A1+ (A one plus) in the long and short term respectively. These ratings denote very high
credit quality and very low expectation of credit risk.
1.6 BRANCH NETWORK OF BAL
Since the privatization in 1997, Bank Alfalah Limited has remained consistent in its mission
to excel in providing innovative products and services to its customers. As a result of that, the
yare 2007 has been most favorable for bank inspite of varying market conditions. The Bank

recorded significant increase in its business volumes coupled with the broadening of network
and clientele base.
The Bank is fully aware that the branch network has direct implications on the service that it
provides to its customers. In the year 2007, commercial banking branches have reached to
166 and Islamic branches to 23. So in 2007, Alfalah network extend the coverage to 189
branches covering 74 cities nationwide and bank has also six international branches in four
countries. Bank Alfalah is confident that a well-integrated branch network offers greater
potential for serving a larger client base through high value products.

CHAPTER No. 2
ORGANIZATIONAL STRUCTURE & HIERARCHY
2.1 ORGANIZATIONAL STRUCTURE
Organizing is a function of management. It is a process of breaking down the overall tasks of
an enterprise into individual assignments and then getting them put together in units along
with delegation of authority to a manager of a department.
Bank Alfalah is a highly developed organization, disciplined along clear lines. This principle
of clarity of authority, responsibility, and job description is evident from their organizational
hierarchy. At the top of the structure is the Board of Directors, which is in Abu Dhabi. The
Chairman of the Board of Director is His Highness Sheikh Nahayan Mubarak AI-Nahayan.
Then there are six directors. The CEO is Pakistani and holds his office at Head Office
Karachi. The CEO is reported by five executive in charges looking after personnel training,
credits, IT, operations, strategic planning and finance.
The whole country is divided into two zones (areas) Northern and Southern, headed by two
Area Managers. All Branch Managers report to Area Managers. The organizational structure
of Bank Alfalah is pyramid like, though culturally the pyramid works upside down. The
different zones are encouraged to setup their own targets, subject to approval from top
authority. In the same way, the different departments after choosing their realistic targets
allow these goals to cascade down to employee level.
A general view of the structure of BAL is shown in the following organizational chart.

Board of Directors
Chairman
CEO

Executive
incharge IT

Executive
Incharge Credit

Executive
Incharge
Operations

E.I strategic
planning

E.I Personal
Training

Area Manager North

Branch Manager

Area Manager South

Branch Manager

Figure: Organization Structure of Bank Alfalah Islamic

2.1.2 MANAGEMENT OF BAL
BAL is managed by a 6-member Board of Directors headed by a Chairman. There is an
Executive officer, who runs the Executive Committee. In Executive Committee there are 12
members.
The names of members of the Chairman, Board of Directors and Executive Committee along
with their designations are given below:
2.1.3 BOARD OF DIRECTORS & MANAGEMENT
i. CHAIRMAN
H.E. Sheikh Hamdan Bin Mubarak Al Nahayan
ii. BOARD OF DIRECTORS
H.E. Sheikh Hamdan Bin Mubarak Al Nahayan
Mr. Abdulla Khalil Al-Mutawa
Mr. Abdulla Nasser Hawaileel Al-Mansoori
Mr. Khalid Mana Saeed Al Otaiba
Mr. Ikram Ul-Majeed Sehgal
Mr. Nadeem Iqbal Sheikh
iii. CHIEF EXECUTIVE OFFICER
Mr. Mohammad Saleem Akhtar
iv. EXECUTIVE COMMITTEE
Mr. Mohammad Saleem Akhtar
Mr. Parvez A. Shahid
Mr. Mohammad Yousuf

Mr. Sirajuddin Aziz

Mr. Shakil Sadiq
Mr. Shahid M Murtaza
Mr. Nadeemul Haq
Mr. Bakhtiar Khawaja
Mr. Adil Rashid
Mr. Ijaz Farooq
Mr. Arfa Waheed Malik
Mr. Adnan Anwar Khan

2.2 Organizational Hierarchy of BAL

President (CEO)
Senior Executive Vice President
Executive Vice President
Senior Vice President
Vice President
Assistant Vice President
Officers Grade I,II,III
Clerical Staff

Non Clerical Staff

Staff

Cashier Typist Clerks &

Messengers

Guards
Assistants

Figure: Organization Hierarchy of Bank Alfalah

CHAPTER No. 3
PRODUCTS INTRODUCTION
3.1 PRODUCT & SERVICES
With the mission to provide all-encompassing banking services to the customers, Bank AlFalah has a uniquely defined menu of financial products. Currently it is one of the most
comprehensive portfolios of personalized financial solutions that are custom-tailored to serve
the requirements not only of conventional customers but also fulfill the needs of the
corporate sector:

Car Financing

Rupee Travellers Cheques

Online Banking

Credit Cards

ATMs

Home Financing

Islamic Banking

Corporate and Structured Financing

3.1.1 CAR FINANCING

Car Financing is one of the major renowned product of Bank Al-Falah and can be utilized in
terms of Financing of Used Vehicles, Loan against Car, Balance Transfer Facility,
Referencing Facility (only for Al-Falah Customers) and it is characterized in terms of:

Lowest Mark up
Lower Insurance
Quick Processing
Lower Down Payment

3.1.2 HOME FINANCING

Major features of Bank Alfalah Home Financing are Lowest Mark-up, Quick Processing,
Multiple Repayment Options and Free Valuation. It has been bifurcated in terms of Home
Buyer, Home Construct, Home Improver, Home Balance Transfer Facility.
Financing Limit:

uptoRs.10,000,000/-

Tenure:
Equity Participation:

Upto 20Years
30% Borrower / 70% Bank

3.1.3 RUPEE TRAVELERS CHEQUES

Rupee Travelers Cheques are as good as cash and are accepted at the major shops, travel
agents, hotels business establishments and all over the country and abroad. This service is
being offered to facilitate instant fund availability to travelers and business people who used
to carry a large sum of money with them.
3.1.4 CREDIT CARDS
Bank Al-Falah Visa Card is everywhere and globally accepted and welcomed at locations
displaying the VISA logo. It is accepted at nearly 30 million merchant sand 870,000 ATMs in
more than 150countries around the globe and over10,000 establishments in Pakistan. AlFalah VISA pays for shopping, travel, entertainment, meals and much more. There are 3
major types of Al-Falah credit cards.
3.1.4.1 AL-FALAH PLATINUM
It is accepted at nearly 29 million locations in more than 150 countries around the globe and
at over 27,000 establishments in Pakistan.
3.1.4.2 TITANIUM CARD
Titanium MasterCard is your partner everywhere and is globally accepted and welcomed at
locations displaying the MasterCard logo.
3.1.4.3 GOLD & SILVER CARD

A perfect card combination for all segments of salaried & professional individuals
3.1.4.4 DEBIT CARDS
Bank Al-Falah Limited presents Al-Falah Hilal Card, the first Visa Electron International
Debit Card which gives an unlimited access to current / savings account with a simple swipe,
at millions of retail shops and ATMs, worldwide. The Al-Falah Hilal Card comes with a host
of conveniences and benefits combined with the wide reach of Visa Network enabling it to be
accepted at more than 840,000 ATMs and 13million retail outlets around the world, making it
the most acceptable Debit Card available in Pakistan.
3.1.4.5 ONLINE BANKING
To provide enhanced and value added products to customer bank is constantly striving for
additional facilities. Bank provide fully automated on-line telephone banking facilities to its
customers enabling them to carry out banking transactions like balance inquiries, statement
requests, product information and exchange rate.
3.1.4.6 AUTOMATIC TELLER MACHINE
The bank offers 24 hours self service banking facilities to its customers on country wide basis
through deployment of Automated Teller Machine. This system allows the banking facilities
such as cash withdrawals, cash deposits, funds transfer, balance inquiries, account
statements. All ATMs are linked through a state-of-the-art Satellite Based Communication
System which offers 24 hours real time service.
3.1.4.6 ISLAMIC BANKING
A separate division is a recently initiated, which operates as separate branch. It offers Shariah
Compliant products through a network of five branches, which will increase to 50 by the year
2007. Islamic Banking has launched following products.
Al-Falah Masharaka Homes
Murabaha Finance
Aflalah Car Ijarah
3.1.4.7 CORPORATE AND STRUCTURED BANKING
The portfolio concentrates on all aspects of conventional banking as well as the financial
needs of corporate sector including dynamic and high value product.
Loaning against securities
Letter of Credit
Letter of Guarantee

 Demand Finance
Cash Finance

CHAPTER No. 4
OWN WORK DONE DURING INTERNSHIP
4.1 DEPARTMENTS WORKED DURING INTERNSHIP
With an intention of grooming the best executives of the future, Our institute Government
College University Faisalabad has organized a comprehensive internship-training program.
All of us were placed in leading organizations of business arena to gain firsthand knowledge
and insight into their management and working. So, when I was given the chance of selecting
an organization, I opted for Bank Al-Falah .Getting a chance of working in Bank Al-Falah
proved to be very beneficial for me. I think that I gained comprehensive insight into the
working of a bank. But nothing could have been possible without the co-operation and
guidance of the officers of BAL.
I did my internship at Bank Al-Falah Limited National Silk Mills Branch,, for a total duration
of Eight weeks. It is relatively a small branch with a limited number of departments. Total
number of employees in this branch is eleven.
The Branch is running smoothly under the leadership of Mr. Rizwan Akhtar Awan, who is the
branch manager of Bank Al-Falah National Silk Mills Branch,. The departments that I
worked during this time are as follows:
Departments

Duration

Accounts Opening

2 Weeks

Operations

2 Weeks

Car Financing

2 Week

Accounts

2 Week

4.1.1 ACCOUNTS OPENING DEPARTMENT (Week 1&2)

About the Managers
Account opening department incharge, Bank Alfalah Islamic Limited.
i.
Mr. Yasir Arafat Zahoor
ii.
Mrs. Numaira Akhtar Awan
In account opening department I was under supervision of Mr. Yasir Arafat Zahoor & Mrs.
Numaira Akhtar Awan, incharge of this department. They were very co-operative persons.
Their management style is of collaborative type. They offers a helping hand to all his
subordinates and other department fellows. They deals and resolves conflicts with an
effective way of communication and negotiation. There is a great deal of value placed on
openness and directness. Both have a great ability to effectively negotiate and use persuasion
when necessary to ensure the smooth working of his department and success of the
organization.
4.2 MAJOR DEPOSIT ACCOUNT PRODUCTS
Borrowing funds from different sources has become an essential feature of todays business
enterprises. But in the case of bank borrowing funds from outside parties is more vital
because the borrowed capital of a bank is much greater than their own capital. Bank
borrowing is mostly in form of deposits. These deposits are lent out to different parties such
deposit creation is done through open an account in the bank.
4.2.1 CURRENT ACCOUNT
Current Accounts are non interest bearing accounts that have a minimum account opening
requirement of Rs 1000. No zakat is deducted on the accounts balance. Furthermore all
current account holders receive a Hilal debit card and there are no restriction on the number
of withdraws or deposits made to and from the account.
4.2.2 PROFIT& LOSS SAVING ACCOUNT
Profit& Loss saving accounts can be opened with a minimum balance requirement of Rs
5,000 and profit is credited on a half yearly basis. There are no restrictions on the number of

deposits and withdrawal made to and from the account and all account holders receive a Hilal
debit card as well. Profit and loss saving account cannot be opened by a business corporation,
however can be jointly opened by individuals. Profits are paid at 2% on all account balances.
4.2.3 BASIC BANKING ACCOUNT (BBA)
Basic Banking Account was introduced by banks on an order by the State Bank of Pakistan
and is current in nature. There is no minimum balance requirement for BBA, however initial
deposit must be Rs 1000.Maximum two withdrawals and deposits are allowed by cheque,
while there is no restriction on ATM withdrawals.
4.2.4 ROYAL PROFIT ACCOUNTS
Royal profit accounts are opened with a minimum balance requirement of Rs 50,000. The
basic aim of this account is that the higher the balance the higher the return, as profit is
credited on a monthly basis. The profit paid to account holders is as follows:
Amount

Profit Per Annum

From Rs. 50,000 to 999,999

2.50%

From 100,000 to 4,999,999

3.50%

From 50,000,000 to Above

Negotiable

4.2.5 KIFAYAT ACCOUNT

Kifayat account is another saving account product that can be opened with a minimum
balance requirement of Rs 10,000, with a maximum limit of Rs 1 million. Profit is calculated
on a monthly basis, while it iscredited on quarterly basis. Bank Al-Falah pays 7% pa. interest
on Kifayat Account.
4.2.6 MAHANA AMDAN ACCOUNT
Mahana Amdan account is Term Deposit Receipt (TDR) for three yearsthat can be opened
with a minimum balance requirement of Rs100,000, with a maximum limit of Rs 15 million.
Profits are paid at 10%pa, credited on a monthly basis. Other features of this account include
free personal accident insurance and automatic renewal for another 3years, after the expiry of
original period.

4.2.7 AL-FALAH EDUCATION

Al-Falah education is a one year TDR that can be purchased by people having school going
childrens. A person can purchase a unit for Rs100.000, with a maximum of 3 years. This
TDR pays 7%, paid at maturity and gives an additional advantage of giving monthly school
fee of the childrens if the breadwinner of the family dies.
4.2.8 AL-FALAH KAMYAB KAROBAR
Bank Al-Falah presents Al-Falah Kamyab Karobar (KK) - a structured, branded, tier-based
current account that caters to your banking needs& aspirations. This product will provide you
the opportunity to enjoy free services alongside state of the art banking facilities, linked
directly to the deposit balances in your KK account. Al-Falah KK Account can be opened
with minimum deposit requirement of Rs 25,000, while the degree of free services will be
dependent onthe minimum thresholds of respective tier. Its will give you the power to choose
from different tiers and avail banking facility from any of the Al-Falah branches PAN
Pakistan. KK Accounts have strategically been tailored into 3 different tiers, allowing you to
choose the allotted free service to your benefit. The three tiers are as following:
Silver
Gold
Platinum
The unique tier based structure ensures that you can avail smooth &cost efficient facilities
based on your current level of deposits i.e. Higher the deposit, higher the number of free
services. Some of the Salient features include (tier-based):

Free Online Transactions

Free SMS Debit Alert (Subject to availability)
Free PO/DD
Free Accidental Cover( Valid for up to two People)
Free cash deposit across Pakistan
Gold VISA debit/ATM Card with every account

4.2.9 FOREIGN CURRENCY ACCOUNTS/ DEPOSITS

Residents and non-residents Pakistanis as well as foreigners can open foreign currency
accounts. Foreign currency accounts can be opened as saving as well as current accounts.
This account is maintained and opened subjected to local laws and regulations in force from

time to time, including Foreign Exchange control Regulations and directives of state bank of
Pakistan. Profit or loss on foreign currency accounts will be paid on half yearly basis and on
the term deposit it will be paid on maturity, as prescribed by the State Bank of Pakistan from
time to time. No interest will be paid on FC accounts. Withdrawals shall be subjected to the
availability of particular foreign currency with the bank and the prevailing directives of the
state bank of Pakistan. The bank may decline to accept the foreign currency notes for deposit
in foreign currency account. The foreign currency deposit will be automatically renewed
upon the expiry of maturity date at the prevailing rates as prescribed by the bank for that
period, unless the bank receives a written request from the customer three days before expiry
date that he does not wish to renew the account.
4.2.10 JOINT ACCOUNTS
If the account is opened by two or more people, the balance to the credit shall belong to both
of them jointly, or to the survivor (surviving depositor), only when it is clearly written in the
instructions EITHEROR SURVIVOR. When the account is operated by a single operator,
the bank shall honor and pay to the debit of joint account all cheques, drafts and orders
signed by the single authorized signatory. If the bank prior to acting the instructions received
from authorized signatory receives a contradictory statement /order from other signatory, the
bank may refuse to act on either of them and insist upon instructions of all the joint account
holders.
4.2.11 MINORS ACCOUNT
In case of an account opened by a minor, bank is entitled to act upon the instructions received
by the guardians. Bank will continue to follow the instructions irrespective of the instructions
provided by the guardian unless or until the guardians or appropriate authority gives written
instructions.
4.2.12 SAFE DEPOSIT LOCKERS
Bank Al-Falah also provides safe deposit locker facilities to its customers for safe keeping of
their valuables like documents, securities and jewelry etc. Important features of locker
facility are as follows:

Various sizes to choose from small, medium, large and extra large.
Annual locker rent ranges from Rs.1, 000/- to Rs.4, 000/-

Locker rent is waived for customers maintaining a deposit of Rs.2million or above in a

current account or US $25,000/- in a current account or US $50,000/-in a saving account or
at managers discretion considering the overall relationship of the valued customer.
4.3 INTERNAL CODES FOR BAL ACCOUNTS
Some of the major account opened at Bank Al-Falah Jaranwala road and their internal codes
are as follows:
Account type

Code

Current Account (Islamic banking)

5000

Current account (Conventional)

0100

Profit and loss account

020

Basic banking accounts

0189

Royal profit accounts

029

Current account USD

018

4.4 ACCOUNTS OPENING REQUIREMENTS

Following are some requirements for opening up new account;
4.4.1 PERSONAL INDIVIDUAL OR JOINT ACCOUNT
Account opening forms dually signed /completed(by all parties incase of joint accounts)

Copy of NADRA issued CNIN or passport.

Introduction of BAL account holder.
Vernacular form if Signature in URDU.
Two photograph with thumb impression in case of illiterate customers.

4.4.2 SOLE PROPRIETOR ACCOUNT

Account opening forms dually signed /completed and stamped.

Copy of CNIC.
Sole proprietors declaration on BAL format required on letterhead

4.4.3 PARTNERSHIP ACCOUNT

Account opening forms dually signed/completed and stamped.

Copy of CNIC of all the partners
Partnership deed dully verified by notary public and signed by all the partners.
FormC in case of registered partnership. (Form C contain the all information about

the year when the firm is registered)

Introduction.

4.4.4 LIMITED COMPANY ACCOUNT

Account opening forms dually signed /completed and stamp.

Copy of CNIC of the entire end.
Board Resolution attested by company secretary resolving to open an account in BAL

liberty market along with the signing instruction of the

Authorized signatories to operate the account. This resolution must bear Company

Seal which must be signed by the two directors (as per the clause in MOA).
Memorandum and Article of Association. (It belongs to the internal & external
dealing by firms. In include the information regarding capital, paid in capital, shares
of firm, who operate this account etc).

4.4.5 TRUST, CLUB, NGO/ ASSOCIATION ACCOUNT

Certified of trust deed.

Certified Copy of by Laws.
List of trustees duly certified.
Certificate of registration.
NICs of all the trustees.
Resolution attested by company secretary resolving to open an account in BAL,
liberty market branch along with the signing instructions of Authorized signatories to

operate account.
This resolution must bear Trust Rubber Stamp, which must be signed by the trust
Secretary.

4.5 MAJOR WORK DONE BY ACCOUNT OPENING DEPARTMENT

This is the first department and is directly interactive with the customers so the main activity
in this department is to handle with customers requirements, making their needs fulfilled and
make them feel comfortable in the branch and to let them feel that They Really Do Care.
The personnel employed in this department really full fills all the required ingredients for the
respective designated posts.
The bank does not make payment of a cheque bearing a six month or older date if an account
is not operated in six months, it is called Dormant Account. Major duties of Account Opening
Officer include:

Opening new account

Maintaining old accounts
Issuance of cheque books
Processing and issuing ATM / Debit / Hilal Cards.
Withdrawals

 Hold mail facility

Stop payments
Bank statements and bank balance
4.5.1 OPENING NEW ACCOUNT
First of all when a new customer walks into the bank and wants toopen an account, he/she is
asked to fill a Bank Al-Falah account opening form, which contains all the required
information that must be taken by the customer for his/her respective details and later on to
provide the security of their accounts. There are few essential documents like
SSC (Specimen signatures cards)
Sign verification
New sign (if accounts sign differs from CNIC account)
There are lists of documents which are required for opening a new form that is attached later
on with the report. When the report is completed it is then sent to BAL Head Office Karachi,
which is confirmed from there and if there is any document missing in the form, it is asked
by the concerning branch to provide, but one thing to mention clearly here that the account is
opened (account number is allotted) instantly to the customer within 4-5 minutes and the
customer can use his/her account instantly, which is really a big advantage for the customers.
4.5.2 MAINTAINING OLD ACCOUNTS
This includes continuous updating of the previous customers accounts including change in
any of their personal/business/employment/studies/signature details they are continuously
monitored and updated by the department heads and assisting personnel. If there is any
request is received from the customer to update his/her account then it is carried out instantly
without any wastage of time which is again a big plus point and a solid proof for the
dynamism of the bank.
4.5.3 ISSUANCE OF THE CHEQUE BOOK
When a new account is opened, the customer receives a Letter of Thanks from the Head
Office Karachi. This is the confirmation and proof that the customer is holding an account in
the BAL. When this letter is showed in the account opening department they confirm the
letter and then sends request for the cheque to Head Office Karachi. The cheque book is
received by the respective branch within 1-2 days outmost. When the customer comes in to
collect the cheque book he signs a letter that he/she has received the cheque book at the
Mentioned date. If the customer is old and needs a new cheque book the process is almost the

same. One thing is important to mention here is that when the cheque book is received by the
bank and the customer doesnt comes to receive the book within 90 DAYS or the account of
the customer is closed due to any reason the cheque book is destroyed under the supervision
of concerning authorities.
4.5.4 ATM / DEBIT CARDS
In the terminology of the BAL debit or ATM cards are known as Hillal-Cards. The process
for the Hillal cards is very simple. When you are filling the form for opening an account then
there is a leaflet which is actually the application for the Hillal card. You just have to enter
your CNIC, name, Address and initialize it and you receive the card at your door step.
4.5.5 WITHDRAWALS
Withdrawals from the account shall be made only by using cheque books supplied by the
bank at the request of the customer or by using ATM cards (if allowed)The bank reserves the
right to withdraw the cheque book facility without notice if in the opinion of the bank the
account is not being maintained or operated in accordance with terms and conditions or for
any other reason The customer shall exercise care when drawing cheques and agree that
cheque will not be drawn ina manner which may enable a cheque to be altered in a manner
which is not readily detectable. The customer shall ensure safekeeping of the cheque book
and shall not allow access the cheque book to any unauthorized person. In case of loss or
theft of the cheque book or any cheque leaf, the customer shall promptly notify the bank in
writing, if fails to give such notice to the bank, the customer shall himself be solely
responsible for any loss arising out of any fraudulent use of lost or stolen cheque book
/cheque leaf.
4.5.6 STATEMENT OF ACCOUNTS
The bank shall quarterly or at such other interval as it may deem fit sent to the customer
statement of account and the customer shall check the entries made there in. In case of any
discrepancy or error in the statement of account the customer shall notify the bank with in
14days of receipt of statement of account, failing which the customer shall have no right to
contest the correctness of any entries made there in. The bank shall ensure that debit and
credit entries are correctly recorded in the account, but in case of any mistake or error, the
bank shall have the right to rectify the mistake or error by making the correct adjusting

entries without notice and recover any amount wrongly paid or credited. The bank shall not
be liable for any loss or damage due to such errors/mistake.
4.5.7 HOLD MAIL FACILITY
Upon written request of the customer, the bank may in its sole discretion provides a (hold
mail facility) whereby the bank shall retain for periodic collection by the customer, or his
duly authorized agent, all communications and statements of the account relating to the
customers account. The customer hereby waives his rights to question any detail appearing
in the hold mail communication or statement of account irrespective of their actual receipt.
The customer accepts all risks and responsibilities in this regard.
4.5.8 STOP PAYMENT
If a customer looses their cheque book, then that customer will have to come to the bank and
firstly report the loss and then stop payment, by telling the series of cheque he has lost. By
stopping payment, the customer is guaranteed that no illegal payment is made from their
account. The process for stopping payment, after the customer tells that he has lost is cheque
book is that he fills a Form B, which is same as a cheque book requisition form and an
indemnity form, stating no responsibility on behalf of the bank if any illegal payment is made
before the time of announcing a cheque book lost. As part of my internship, I was to assist a
customer towards the whole process of stopping payment.
4.5.9 BANK STATEMENTS AND BANK BALANCE
A bank statement tells the whole activity of a bank account over a period of time. Customers
often come and want their bank statements and have to fill a form, relating to the time period
for which the bank statement is needed. As part of my internship, I was to assist the customer
to fill the Bank Statement Form and produce the statement through the banks software and
print it as well. Often customers want to know their accounts balance over the phone and thus
I had to tell them their account balances using the banks information system Bank Smart.

4.6 CONCLUSION
During my 2 week work in Account opening department of Bank Al-Falah, I experienced the
environmental and cultural gloom of corporate world of Pakistan. I was quite able to
understand the operations. I experienced that the communication is the key weapon of any
manager that could lead him to resolve/explore any conflict / situation with great ease.

I learned the process of opening and closing of different types of account, dormant accounts,
issuance of cheque book, customer dealing, balance statement. In this department, I learned
how to operate bank smart. I helped my supervisor in collection of zakat declaration forms
from customers which were needed in the process of zakat deduction.

4.7 OPERATIONS DEPARTMENT (week 3 & 4)

About the Manager
Mr. Sohail Akbar (Manager Operations)
Bank Alfalah Islamic Limited
Mr. Sohail Akbar is one of those managers who are not strictly a follower of the syndrome of
high status. He is the incharge of Operations department of BAL who compliments and
connects with others on a human level through inspires great loyalty towards himself by
employees. He deals and resolves conflicts with an effective way of communication and
negotiation. Intuition is his hallmark. He with keen insight is often able to sense what others
are thinking and feeling; consequently, they are able to respond perfectly to another through
his deeper understanding. He is an excellent manager who lives from a knowledgebase,
without having a draw attention to it.
Flexibility and versatility are valuable qualities of Mr. Sohail Akbar. Beneath the flexibility
and versatility he has ability to be composed and never over-reacted with everyone around.
4.8 MAJOR WORK DONE BY OPERATIONS DEPARTMENT
The operations department is responsible for three major activities:

Clearing
Transfers
Remittances
Cash Transfer

In large branches of Bank Al-Falah, all these jobs are done by different departments, but as
Bank Al-Falah Jaranwala Road is a small branch, all these jobs are done by one department,
known as operations. Operations department is sometimes also known as the Transact
department.

4.8.1 Clearing

The clearing department is responsible for the clearing of all cheques that the bank receives
daily and the different types of clearing cheques that come in the bank are:

Inward Clearing
Outward Clearing
Online Clearing
Outward Bills for Collection

4.8.1.1 INWARD CLEARING

Inward clearing takes place when a Bank Al-Falah Jaranwala Road account holder drews a
cheque in favor of a Non- Bank Al-Falah account holder. The process for inward clearing is
as follows:
1. Cheques are received by the operations department from NIFT
2. The bank officer verifies all particulars from the instruments and the system for
sufficient balance etc. If any fault is found, then the officer will mark the cheques as a
return, stating the reasons with them.
3. If no fault is found, then the officer will post these cheques in the system by debiting
the customer account.
4. The particular of the returned cheques are entered in the O/W return of inward
clearing register and returned to NIFT.
4.8.1.2 OUTWARD CLEARING
Cheques drawn by Non-Bank Al-Falah customers in favor of Bank Al-Falah Jaranwala Road
customer and deposited at Liberty Market Branch are known as outward clearing cheques.
The process for outward clearing is as follows:
1. Cheques are received by the operations department of Bank Al-Falah Jaranwala Road
2. The customer in favor of whom the cheque is drawn is credited
3. Clearing stamps are affixed on the cFheque and sent to theother bank via NIFT.
If any cheque returns the next days as a returned, the posted entriesare reversed and the
cheque is returned to the customer whopresented it and is recorded in the cheque return
register.
4.8.1.3 ONLINE CLEARING
Online clearing takes place when a cheque is drawn by a Non-Bank Al-Falah customer in
favor of a Bank Al-Falah customer but is deposited at Bank Al-Falah Jaranwala Road. The
person, who had drawn this cheque, however should have an account in the
Islamabad/Rawalpindi area. The process for online clearing is as follows:
1. The cheque is sent as an outward clearing via NIFT

2. When the cheque is cleared, it is credited to the Bank Al-Falah account via the online
transfer software.
4.8.1.4 OUTWARD BILLS FOR CLEARING (OBC)
There are some cheques that are drawn by a Non Bank Al-Falah Account that is outside the
twin city area in favor of Bank Al-Falah Jaranwala Road account holders and thus are treated
as OBCs. The process for clearing of the OBCs is as follows:

Cheques received by Bank Al-Falah Jaranwala Road

The officer affixes the OBC stamp on the cheques and writes its individual number

from the OBC register.

Entries of all OBC cheques are written in an OBC register.
An OBC letter is printed, which shows the cheque numbers, the branch drawn on and

amount.
Original Cheques are attached to these letter and sent to the main Bank Al-Falah

branch in that area by courier

When that area branch clears the amount from the Non-Bank Al-Falah branch, it
sends an Inter Branch Credit Advice (IBCA) to Bank Al-Falah Jaranwala Road and
the officer at the branch credits the customer account with that amount

4.8.2 TRANSFERS
Transfers are conducted by Bank Al-Falah National Silk Mills Branch,, using its software
Bank Smart. There are two types of transfers:
1. Internal Transfers
2. Online Transfers
4.8.2.1 INTERNAL TRANSFER
Internal transfers take place when a Bank Al-Falah National Silk Mills Branch, account
holder draws a cheque in favor of another Bank Al-Falah National Silk Mills Branch, account
holder. The process for internal transfer is as follows:
1. Officer of the bank receives the cheque and determine if the cheque is an internal
transfer by looking at the branch code, if they are same then it is an internal transfer
2. The officer will post entries by credit the account in favor of whom the cheque was
drawn and debit the account that drew it in the banks software.
3. The cheque will be sent for supervision to the operations manager for authentication
of the entries

4. When supervised, the cheque will be affixed with the official stamps and kept with
the bank.
4.8.2.2 ONLINE TRANSFER
All those transfers that take place when a Bank Al-Falah account holder draws a cheque in
favor of a Bank Al-Falah Jaranawala Road Branch account holders are known as online
transfers. The process for online transfer is as follows:
1. The bank officer collects the cheque from the depositors.
2. Verifys if the accounts are online and need to be transferred online
3. Posts entries by debiting the account of the cheque, while crediting the account on the slip
attached with the cheque.
4. Sends the cheque for supervision to the operations manager
5. When supervised, the cheque will be affixed with the official stamps and kept with the
bank.

4.8.3 REMITTANCES
There are two main types of instruments that are used to transfer money, which are as
follows:
Pay order: Used to transfer money within the city
Demand Draft: Used to transfer money outside the city
4.8.3.1 PAY ORDERS
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. The
procedure that is carried out in transferring money through pay order is as follows:
PROCEDURE FOR TRANSFERRING MONEY THROUGH PAY ORDER
The customer will come to the bank and fill in the pay order application, giving in the details
to which account the money is being transferred, the amount etc and attach a cheque to pay
for the pay order. Pay orders can also be made through cash but mainly it is made through
cheque. The officer checks all the details in the application, makes out the charges for the
transfer that the customer will pay and then make the pay order for the customer and pass the
following entry:
Customer A/c

Pay order payable

When the customer in favor of whom the pay order was made gives the pay order to his
branch, the entries passed are:
Pay order payable
Customer A/c
4.8.3.2 DEMAND DRAFTS
Demand Draft is another way in which customers can transfer money outside the city. There
are two types of situations for transfer of money through demand drafts:
4.8.3.2.1

OUTWARD DDS

When a customer comes to Bank Al-Falah to make a DD to transfer money outside the city is
known as outward DD. The customer will fill the details in a DD application form, and will
attach a cheque or pay cash as he wish. Then the officer will check all the details and make a
demand draft for the customer and pass the following entries:
For Cheque
Customer A/C
Head Office A/C

For Cash
Sundry A/c
Head Office A/C

4.8.3.2.2 INWARD DDS

This is the procedure adopted when the issuing branch sends copy of the instrument as an
advice. When the bank receives the advice, the officer will pass the following entries:
Head Office A/c
DD Payable A/c
When the customer comes with the DD to get his payment, the following entries are passed:
DD Payable A/c
Cash A/C
If that customer is a Bank Al-Falah account holder then the following entries are passed:
DD Payable A/c
Customer Account

4.8.3.2.3 FOREIGN REMITTANCES

Another type of remittances is foreign exchange transfer from another country to a Bank AlFalah account in Pakistan, through SWIFT. Bank Al-Falah for foreign exchange transfers
takes the help of Citi Bank for routing.
PROCEDURE FOR FOREIGN TRANSFERS
The customer will come to Citibank to transfer money to Pakistan. The entries passed will
be:
Customer A/c
Citibank A/c
Citibank will then transfer that money to Bank Al-Falah Karachi. The entries are:
Citibank A/c
Bank Al-Falah Nostro A/c (khi)
Later Bank Al-Falah will transfer the Nostro A/c money into the demand account.
Nostro A/c Bank Al-Falah
Demand A/c
Now when the customer will come to take his money, the following entries will be made:
Demand A/c
Customer A/c

4.8.4

CASH TRANSFERS

The cash transfers in the transact department are responsible with the cash deposits and
withdraws made by Bank Al-Falah National Silk Mills Branch, account holders. There are
two types of cash withdraws and deposits. The first is when a Bank Al-Falah National Silk
Mills Branch, account holder either deposits or withdraws cash, while the second one is when
a Bank Al- Falah account holder, with an online account can withdraw or deposit money to
his account from the National Silk Mills Branch.

CONCLUSION
My third and fourth week was full of learning and understanding of the functions and
operations of the clearing department. I got familiar with the process of clearing and its types
i.e. inward clearing, outward clearing and intercity, IBC and OBC. I learned about different

types of crossing on cheques and about demand drafts, pay orders and telegraphic transfers.
As part of my internship, I was responsible to collect cheques from the customers that they
deposited, put the official stamps on the different kinds of cheques, register the return
cheques in a register and make OBC schedules.

4.9

CAR FINANCE DEPARTMENT ( Week 5 & 6)

About the Manager

Mr. Yasir Arafat Zahoor ( Manager Car Finance)
Bank Alfalah Islamic Limited.
In car finance department I was under supervision of Mr. Yasir Arafat Zahoor, manager of
this department. Flexibility and versatility are valuable qualities of Mr. Yasir Arafat Zahoor.
Beneath the flexibility and versatility he has ability to b composed and never over-reacted
with everyone around. Versatility implies an openness, this openness allows him to quickly
change on time when necessary. Flexibility and versatility are path ways to speedy
responsiveness

of

Mr.

Yasir

Arafat

Zahoor.

He is a kind manager who is full of enthusiasm, with a bounce in their step, with a can-do
attitude. He is well committed to his goals and expresses this commitment through optimism.
He has a very clear vision about his departments goals and has the ability to articulate it in
accordance to the organizations goal and vision. Small actions lead to big picture; he is
skillful at doing both: thinking big while also paying attention to details.
4.9.1 AL-FALAH CAR FINANCE
Car financing has become one of the most selling financial products of almost all banks.
People prefer getting their cars financed rather than paying upfront because it is convenient
and lessens the burden of paying a huge sum of money upfront. Bank Al-Falah offers you the
most convenient and affordable loans in Pakistan. Whether its funds for a home renovation or
purchase of your first car. Al-Falah car financing is specially designed for you with easy,
affordable and flexible installments. There is a special software for leasing or financing your
car, that gets all your information required and makes a computer generated plan for our your

car that suits your choice and your best fits your financial position. Some of the features of
Bank Al-Falah Car Financing are:

Tenure of 1-5 years

Minimum down payment- starting from 10% of car value
5 % extra at time of pre-mature payment.
Insurance facility from three different insurance companies
Tracking devices with all Suzuki Mehran and all Toyota Models
Fixed mark up rates
Co borrowers facility

The mark up rates for all locally build new cars is a follows:
Financing Product

1Yr

2Yr

3Yr

4Yr

5Yr

Car Loan for Brand New Vehicles 14.00%14.50%15.00%15.50%15.50%

4.9.1.2 BENEFITS AND FEATURES

No hidden charges
Minimum down payment
Complete repayment at any point of time
Balance transfer facility [BTF] for existing as well as new clients from other banks.
Tenor period ranging from 1 to 7 years.
Financing of all brand new locally assembled vehicles.
Financing limit ranging between Rs.200, 000/- to Rs. 4,000,000.

4.9.1.3 CORPORATE & INDIVIDUAL CAR LEASING

BALs recently introduced car leasing facility for individuals and corporate sector has set
now dimensions for the product. Now you are provide with the option of either to get the
vehicle leased or financed.
4.9.1.4 INSURANCE
Renowned and reliable insurance companies are offering the competitive rates of insurance.
Pay year insurance premium in advance (at the time of down payment) and remaining in the
subsequent equal monthly installment. Rates are varied for different insurance companies:

Al-Falah refers to various companies; Following are the most commonly used insurance
companies which are offered by the BAL.
Company Name

Rate of Insurance

Adam Jee Insurance

4.5%

EFU Insurance

5.5%

Atlas Insurance

3.9%

Various car types are insured at a different rate, but for cars above 2,000 cc trackers

are used for which extra insurance are provided.

There is a new policy that Suzuki Mehran must are issued only with tracker and the

insurance + Tracker rate of 5.5 % P.A.

It is meant for increased safety.

4.9.1.5 MARKUP
Offering lowest rate of markup of 13.5%, (per annum), BAL has captivated a major market
share and so is the plan for future. This markup is only for the customers who want to get its
car financed or leased for One year only, as the duration of financing increases, the markup
increases as well, for the car leased for 7 years (Suzuki Liana) the markup is 16 % P.A. Bank
AL-Falahs Markup rates are as follows;
Pak Suzuki Cars

11.9%

All other Local Assembler cars

12.9%

Import Cars

12.9%

4.9.1.6 REPAYMENTS
Easily affordable installments on monthly basis in the form of postdated cheques will set you
free of depositing your rental cheques every month. BAL is offering a very comfortable and
affordable repayment plans that can be customized with the requirement of every customers
need. For example is a customer cannot pay heavy installments then the there can be a easy
installment plan with high down payment, so that the customer doesnt can easily pay back
the loan. Another facility BAL is giving is that, you can pay back the entire loan (But not
before 1 year after disbursement) at any time with the Plenty of just 5 % of the total amount
outstanding.

4.9.1.7 SECURITY
Hypothecation of vehicle in the name of the Bank Al-Falah Limited, when the car is
delivered to the customer, on the registration book, BAL marks a lien and this entitles the
bank to use his all rights in case of nonpayment of loans. Customer has already signed in the
legal documents regarding hypothecation, so bank can take all the legal actions. Secondly,
the duplicate key of the car is in custody of the bank, and if in any case of taking the vehicle
back, bank has all the rights to use the duplicate key. When the loan is paid up, its the
responsibility of the bank to return back the Original Papers of the car and the duplicate key.
4.9.1.8 CO-BORROWER
Acting as a co borrower, will enables your family members (spouse, children -18 years and
above) to avail the financing facility and can get the car registered in their names as well.
This is another a vital facility which is being provided by the bank to entitle is customers a
more comfortable business with the bank. CO-borrower is a very important concept and has
vital significant like and the most important is that if a person is not eligible to get a car by its
own, he/she can contact any person (usually close relative) on his/her documents and
statement, and most importantly the name on the Registration book is of that co-borrower.

4.9.2 REQUIRED DOCUMENTS FOR CAR LOAN

There are some essential documents required by the BAL according to the policies of the
State Bank of Pakistan. The file of the customer contains all the following documents, and if
all the documents are enough in convincing the authorities that the customer is not going to
default and will repay the loan without delay then the case is approved and loan is disbursed.
4.9.2.1 FOR BUSINESSMEN
Copy of NIC
NTN
Bank statement last 6 months
photograph (Supplementary)
Proprietorship certificate (Supplementary)
4.9.2.2FOR SALARIED PERSONS
Copy of NIC
photographs bank statement last 6 months

 Salary certificate (3-months)

NTN
Utility Bills (PTCL)
4.9.2.3FOR PARTNERSHIP FIRMS

Partnership Deeds
Copy of NTN
Form C or firm Regulations certificate
Balance sheet
Copy of NICs of all partners
Copy of Utility bills (PTCL)
Partnership declaration form
Income Statement

4.9.2.4 FOR SOLE PROPRITOR

Copy of NTN
Balance sheet
Copy of NIC
Copy of Utility bill
Bank Declaration form

4.10 ELIGIBILITY
Yes now people get a car loan from Bank Al-Falah to purchase a brand new car if we are:
Pakistan National Identity Card holder
Over 20 years of age (maximum 60 years in case of salaried and62 in case of a
business person at the time of maturity of the loan)
Salaried , Business man of self employed

4.11 SPECIAL FEATURES

The car is the security, which will be hypothecated in favor of the Bank and the lien

will be marked with register.

You have the option to repay the loan at any time during the tenure of the loan.
You will repay the loan by making easy monthly installments to Bank Al-Falah in the

form of post dated cheque.

Bank Al-Falah has made arrangements with the top insurance companies who are
offerings special lowest rates for Bank Al-Falah clients. (First years insurance has to

be made in advance and the remaining years in equal monthly installments)

You have to pay a one-time fee of Rs. 3000/- being amount of processing and
documentation charges and the first years insurance premium.

Initial down payment that the client has to make is 20% of the value of the car.
The loan can be availed from 1 year to 5 years with early adjustments facility at any

time before the maturity.

The minimum amount of loan facility that the client can have isRs.200, 000/- and

maximum amount is Rs. 4,000,000/-.

Client can apply for all brand new

cars(Unregistered)
You can get a car loan from Bank Al-Falah to purchase a Brand new car if you are
Pakistan National Identity Card Holder
Over 20 years of age (maximum 60 years in case of salaried and 62 in case of a

Pakistani

assembled manufactured

business person at the time of maturity of the loan)

Salaried, Business man of self employed.
You can include your spouse, children (18 years and above) or parents as co
applicants for the car loan and the car can be registered in their names.

4.12 PROCEEDURE OF CAR FINANCING

The procedure for car financing starts when a customer comes and asks for a plan for a
specified car. When he receives this plan, he will fill an application form for a car financing,
stating the car he wants to finance, its color, personal details and two references. They also
pay a processing fee which is non refundable. The bank then conducts a verification of the
two references, which for Bank Al-Falah National Silk Mills Branch, is conducted in
Faisalabad. A Verisys is also conducted on the applicants CNIC and a Customer Credit
Information Report is taken from the CIB. After the verification process is completed, a
Credit Line Proposal (CLP) is generated by Bank Al-Falah National Silk Mills Branch, to be
sent to the Area Office for a final approval with all other documents as well. The final
authority of passing the application remains with the Area Office. After the Area Office
approves the application, the customer will make the down payment, give the bank post dated
cheques and sign a legal document with the bank. When this process is complete, a quotation
is sent to the car dealer for the specified car, insurance documents are sent to the specified
insurer. Later on the car is registered with the Excise and Taxation Officer and is given a
number. When all this process is complete, the key to the car is handed over to the customer
with all documents relating to the car. When the tenure for the car financing is completed, the
bank issues a NOC to the customer. As part of my internship I had to complete the final legal

document signed by the customer, by writing in detail about the car, the financing period and
witnesses pertaining to the agreement etc.

4.13 Conclusion
This department keeps an all in all fascination for me. It is totally a different category from
other departments of those I got experience. In this department I got the opportunity to make
practice of some most important topics of finance that I have learned in my university and to
exercise those concepts in real corporate world like amortization table, determination of
interest rate etc.

4.14 Accounts Department (WEEK 7 & 8)

About the Manager
Miss. Roma Kanwal (Manager Accounts Department)
Bank Alfalah Islamic Limited
Roma Kanwal, the manager of accounts department is a nice personality. She is very much
supportive and obliging to his subordinates. During my entire stay I observed that she is a
kind manager who believes in self empowerment of the employees. The culture I observed in
this department was very friendly; where all the employees were performance oriented and
were highly focused towards the end results. She is in a habit of resolving conflicts, if any,
with effective communicating skills. She always looks for the ways to solve clients problems
and deals with inter-department with a win approach. Her attitude and management style is
not of commanding type, but of collaboration and co-operation.

4.14.1 Accounts
Most important department of the bank is concerned with
1)
2)
3)
4)

Revenues
Expenses
Assets
Liabilities

These are the pillars of business.

The accounts department is supervised by Mr. Sohail Akbar and assisted by Miss Roma
Kanwal and Miss Numaira Akhtar Awan. In this department, all the vouchers are posted
during one day are sent to Accounts department next day. These vouchers are already posted
to computer by the concerned department. The accounts department has to tell that all the
vouchers are posted under the right head. Amount, date, stamps, signatures all the
requirements for cheques and vouchers are fully checked. If any kind of renovation or
construction or rebuilding is done, all is paid from the Accounts department. Like petrol for
the car, stationary charges, medical allowances, etc are all paid by this department.
4.14.2 Major Activities
Accounts department is totally a backend department and is not linked to customers at all. All
the days transactions inside, outside the branch and for other banks are handled with this
department. This is one of the most sensitive departments because the customers account are
credited and debited solely by this department so there is a very strict check and balance
system for this department and each transaction is monitored and rechecked at least twice and
supervised even by Manager Operations if amounts are high. Major activities in accounts
department are;

Maintaining accounts of customers

Monitoring & posting daily activities and transactions. The major activates are to
update customers account continuously and on daily basis. Because more of less
each and every account is been credited or debited by some amount so the purpose of
this department is to make sure that the right persons account is credited and debited.
4.14.3 MAINTAINING ACCOUNTS OF CUSTOMERS
Once the account is created by the Account Opening Department it is not duty of accounts
department to continuously monitor each and every account on daily basis. They monitor
which account is performing well and which is not? Which account and which customer
needs special care and special services? There are special accounts associated with credits
and loans they are monitored specially.
4.14.4 MONITORING AND POSTING DAILY ACTIVITIES & TRANSACTIONS

Monitoring daily activities include each and every transaction from all customers accounts
including, ATM transaction, International remittance, local remittance, inward and outward
transactions etc. The responsibilities in the accounts department are to debit and credit each
and every transaction, monitor it, supervise it and special transactions which require
supervision by higher authorities should be supervised.

4.15 FUNCTIONS
Following are some functions of Accounts department;
4.15.1 Reports
It generates reports like Statement of Account Activity (a report on the activity of all
accounts at Bank Al-Falah National Silk Mills Branch) Statement of Affairs (a report on the
assets and liabilities of Bank Al-Falah National Silk Mills Branch) Statement of Foreign
Exchange (a report on the foreign exchange currencies at the bank) and Statement of Profit &
Loss (are port on the income and expenditures of Bank Al-Falah National Silk Mills Branch).
These reports can be generated at daily, weekly, monthly, quarterly or yearly basis as required
by the bank.
4.15.2 Income and Expenses
The department also needs to calculate the revenues and expenses, control expenditure and
forecast profits every month.
4.15.3 Budget
Formulation of yearly budgets & targets in consultation with the branch manager is also done
by the accounts department.
4.15.4 Storage of Records
Accounts Department also has the duty to store vouchers and system generated reports.
4.15.5 Payments
The accounts department is responsible to pay vendors on behalf of the bank with
authorization from the branch manager. It also has to amortize large payments and calculate
depreciation of branch assets.
4.15.6 ACTIVITY CHECKING
In the accounts department, I had to do daily activity checking and there are four stages in
which activity checking takes place:

1.
2.
3.
4.

Collecting vouchers, cheques etc from all departments

2.Sorting Vouchers
Checking Activity
Packing

4.15.7 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, we need to check if all
stamps are stamped on these vouchers etc.
4.15.8 Storing Vouchers
After all vouchers are collected, they need to be sorted into eight categories:
1.
2.
3.
4.
5.
6.
7.
8.

Customer Debit: Includes debit vouchers and cheques

Customer Credit: Includes credit vouchers and credit slips
Income: Income vouchers
Expenditure: Expenses vouchers and payment vouchers
Others: Includes vouchers about excise duty, FED, teller, ATM, payables etc
Online: Contain online vouchers and online credit slips etc
Head Office (H.O): Includes HO vouchers and IBCA, DD advices
Bills Payable General (BPG): Includes vouchers and DD, Pay-orders, Pay slips etc

4.15.9 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.
4.15.10 Packing
After the activity is checked, all sorted vouchers are counted, both debit and credit and then
packed by totaling the vouchers.

4.16 Conclusion
During my sixth week of internship I learned the process of checking, maintaining, and
record keeping of accounts i.e. all operation of the branch, income from operations and
expenses and reporting to the area office about all the operations.

CHAPTER No. 5
SWOT ANALYSIS
5.1 INTRODUCTION
A scan of the internal and external environment is an important part of the strategic planning
process. Environmental factors internal to the firm usually can be classified as strengths (S)
or weaknesses (W), and those external to the firm can be classified as opportunities (0) or
threats (T). Such an analysis of the strategic environment is referred to as a SWOT analysis.
The SWOT analysis provides information that is helpful in matching the firms resources and
capabilities to the competitive environment in which it operates.

5.2 STRENGTHS
Bank Al-Falah is considered to be a very sound bank in the financial circles. The bank,
Where the customers can safely keep their money as long as they want. I am pointing some
of the major strengths of the bank.
5.2.1 Compassionate customer services
The officers of BAL are considered as one of the most able professionals in the banking
world (some belong to BCCI). However, they have added some local flavor in accordance
with their targeted segmented. Especially, in Circular Road Branch, I observed that they
interact with their clients as if they are their personal friends and discuss about their problems
as their own.
5.2.2 Goodwill and Trust
As a result of the compassionate and personalized services of the officers, the clients
perception for BAL is very high. They have trust and feel themselves to be secure while
banking with BAL.
5.2.3 Location

Bank Al-Falah has opened all its branches at commercial areas so that the customers or
clients face no problems in reaching to the bank. For example, Circular Road branch for
being situated in business and commercial hub of Lahore has second largest volume in trade
finance.
5.2.4 Foreign Trade Business
The bank is focusing on Trade Financing; it attaches great significance to the development
and maintenance of healthy correspondent relationships with other banks and financial
institutions. Towards this pursuit, BAL has developed excellent business relations with
foreign banks, whose support in terms of lines of credit extended to the bank, has enabled it
to handle the ever-growing trade volumes. During year2000, the bank handled foreign trade
business in excess of PKR 30.6billion, representing an increase of 92% over the previous
year.
5.2.5 Wide Branch Network
Bank Al-Falahs objective has been to expand its branch network to meet clients needs. It is
heartening to note that in just three years, which is considered the infancy stage in the
industry, the bank has increased the branch network from 3 to 23. And, due to the growing
business requirements, there are 10 proposed branches in different cities. The expansion
program is strategically important to increase customer base and to approach different
customer segments.
5.2.6 Computerized System
BAL has got a reliable and easy to use internal computer system. Every information
regarding the transactions in customers deposits has been computerized. Currently,
bankexel is being practiced for this purpose but very soon; a new program named
banksmart will start functioning (it has started functioning in Clifton branch).
5.2.7 Reputation
BAL has a very good reputation for its auto finance, home finance and agriculture finance.
They have been the pioneers of auto finance and have carved a name for them selves in this
field.
5.2.8 Credit Rating

BAL has been rated as AA- (double A minus) and Al + (A one plus) in the long run and short
run respectively. These rating donate high credit quality and very low expectations of credit
risk.
5.2.9 Better Environment
BAL has got a very friendly environment and the surroundings are also very pleasant. The
clients are treated as guests and are given proper place to sit and discuss different issues.
5.2.10 Better service
BALs management pays a lot of attention to customer service. They make sure that the
customers are treated in a nice way and their complaints and suggestions are always
welcomed.

5.3 WEAKNESSES
Perfection is only the claim of Allah Almighty. No other being living or dead can say this for
itself. Similarly, Bank Al-Falah also has some shortcomings that need to be mentioned:
5.3.1 Advertisement
BAL has formulized a lot of products and services for its customers, even more than other
commercial banks, but any advertisement on electronic media has not been seen. Since,
BALs major competitor Union Bank Limited has started large media campaign, so keeping
in view these threats; Bank Al-Falah should emphasize more on its advertisement.
5.3.2 Problems of Employees
I observed during my internship that some of the employees were burdened with over work.
So I think that the work should be distributed according to their post and capabilities.
5.3.3 Lack of Commitment
The staff members are not very committed to their position in auto finance department. Most
of the officers show negligence to customers complaints and often delay the delivery of the
vehicle due to inefficient working.
5.3.4 Insurance Company
The bank makes the deal with insurance company on behalf of the customer but once the car
is financed the customer comes in contact with insurance company which makes the
customer go through a lot of problems faced by the virtue of the insurance company thus
damaging the image of the bank.

5.3.5 Risk Management

The risk management department is not very developed and faces shortage of employees and
resources. Most of the work that belongs to the risk management department is don e by the
auto finance agents thus bridging the information regarding the client.

5.4 OPPORTUNITIES
Bank Al-Falah has grown up its business with a very high pace and it has got tremendous
popularity, even with in a very short span of time. There are many opportunities for the bank
and by availing that it can stand amongst the top foreign banks.
5.4.1 Information Technology
All the opportunities of the 21st century are to be availed in the information technology.
Information technology is the future. Therefore BAL should emphasize much on IT,
especially the E Banking. Bank can design a universal account like other foreign banks, to
enhance online facilities.
5.4.2 Extension of Branch Network
Bank Al-Falahs growing business requires an extensive branch network. There are great
opportunities for BAL for the expansion of its business.
5.4.3 Growth in Deposits
BAL has introduced a number of financial schemes including special royal accounts. These
accounts have their unique features (discussed earlier). During the last three years, BALs
deposits have been increasing @ 30%, which is a very healthy sign. Therefore, with the
commencement of new schemes there can even be a greater increase in its deposits.
5.4.4 Strong Promotional Campaign
BAL is already the market leader and has brought its rate down to 8.5%. So the market
department should increase its potential and get as much customers as possible through
corporate deals, discounts for organizations and promotional campaign. They can utilize their
image to maintain their image.
5.4.5 Insurance Agent
The bank should have an involving agent who should deal with the complaints of the
customer from the insurance company and should help the customer in solving their problem.

5.5 THREATS
5.5.1 Economic Conditions
Despite the difficult circumstances that confronted the banking sector in particular and the
country in general, Bank Al-Falah has been still highly profitable.
But, the facts cant be denied and there might been adverse impact of such situation.
5.5.2 Competitors
Bank Al-Falah is facing a strong competition by its major competitors; Union Bank and
Askari Commercial Bank. Business of these banks is also growing with very high pace.
The SWOT analysis of the bank signifies that its strengths overcome its weaknesses and its
opportunities are more than its threats. This is a positive sign for any organization.
5.5.3 Insurance Problems
The attitude and performance of insurance companies are bothering the customers a lot and
people are regretting to have financed their car from BAL. because they come in contract
with insurance company through BAL so they consider BAL for all the mishaps.

CHAPTER No. 6
FINANCIAL STATEMENT ANALYSIS
6.1 Financial Analysis
Financial analysis involves the use of various financial statements. These statements do
several things. First, the income statement summarizes the revenues and expenses of the
company over a particular period of time, again usually a year or a quarter. Next the balance
sheet summarizes the assets, liabilities and owners equity of a business at a moment in time,
usually the end of a year or a quarter.

Profit and Loss Account

For the year ended 31st December 2015
Rs. In Million
Particulars

2015

2014

2013

Mark-up / return / interest earned

61,458

55,378

43,961

Mark-up / return / interest expensed

(32,811) (33,505) (27,066)

Net Markup/ Interest Income

28,648

21,873

Provisions And write-offs

(2,287)

(1,534)

16,895

Net Markup/ Interest income after 26,361

20,340

(1,054)
15,841

provision
Non Markup/ Interest income

8,876

8,279

8,841

Non Markup/ Interest expenses

(22,598) (20,702) (17,313)

Profit before taxation

12,604

8,514

6,807

Taxation

(5,081)

(2,873)

(2,131)

7,523

5,641

4,676

Profit After Taxation

Balance sheet Statement

As on 31st December 2015
ASSETS

Rs. In Million

Description

2015

2014

2013

Cash and Balances With Treasury banks

62,369

50,516

61,205

Balances With Other Banks

16,552

12,332

34,764

Lendings to Financial Institutions

53,629

18,313

2,522

Investments Net

397,097

324,319

219,690

Advances Net

327,298

290,597

260,780

Fixed Assets

17,242

15,740

14,835

Deferred Tax Assets

1,204

Other Assets

28,421

31,311

16,427

Total Assets

902,607

743,128

611,428

Bills Payable

9,734

11,758

9,543

Borrowings From Financial Institutions

172,393

55,233

23,115

Deposits & Other Accounts

640,189

605,963

525,526

Subordinated loans

9,983

9,987

9,991

Deferred Tax Liabilities Net

1,824

853

LIABILITIES

Other Liabilities

15,131

14,515

11,351

Total Liabilities

849,254

698,309

579,526

NET ASSETS

53,353

44,819

31,902

Represented by
Share Capital

2015
15,898

2014
15,872

2013
13,492

Reserves

14,164

12,338

7,274

Unappropriated profit

12,363

9,613

7,500

Shareholder's Equity

42,425

37,824

28,266

6,995

3,636

44,819

31,902

Surplus on revaluation 10,928

of fixed assets - net of
tax
Net Assets

6.1.

53,353

Ratio Analysis

To evaluate a firms financial condition and performance, the financial analyst needs to
perform checkups on various aspects of a firms financial health. A tool frequently used
during these checkups is financial ratio or index.
1.1 LIQUIDITY RATIOS
Liquidity Ratios help us understand if we can meet our obligations over the short-run. Higher
liquidity levels indicate that we can easily meet our current obligations.
We can use several types of ratios to monitor liquidity.
1.1.1 Current Ratio
It measures the ability of the firm to meet the current debts with currents Assets. OR It shows
the short-term debt-paying ability of an organization.
Current Ratio = Current Assets / Current Liabilities
2015:

856,944 / 822,316

= 1.042: 1

2014:

696,077 / 672,954

= 1.034: 1

2013:

578,962 / 558,184

= 1.037: 1

 Interpretation
This means that bank Alfalah has Rs.1.042, 1.034 and Rs.1.037 Respectively in its Current
Assets to meet its every Rs.1 Current Liabilities in the years 2015, 2014 and 2013
respectively.
ANALYSIS
The ratio has increased in 2015 by Rs.0.008 due to increase in Current Assets and less
increase in Current Liabilities, While situation in 2014 is vice versa. It has resulted due to the
following reasons.
i.
ii.
iii.
iv.

High level of Cash

Increase in Account Receivable
Decrease in bills payable
Decrease in Short Term Finances

Any how the bank Alfalah is in a good position to pay its short term liabilities.
1.1.2 Absolute Liquidity Or Super Quick Ratio
It shows the the comparison of the absolute liquid assets of a firm to current debts. Absolute
liquidity is represented by cash and near cash items.
Absolute Liquidity Ratio = Absolute Liquid Assets / Current Liabilities
2015

= 78,921/ 822,316

= 0.096: 1

2014

= 63,848 / 672,954

= 0.095: 1

2013

= 95,969/ 558,184

= 0.171: 1

INTERPRETATION
This means that bank Alfalah has Rs. 0.096, 0.095 and Rs. 0.171 as absolute liquid Assets to
meet its every Rs.1 current debts in the years 2015, 2014 and 2013 respectively.
ANALYSIS
The ratio has increased in 2015 by Rs.0.001 because increase in cash and near cash items is
more as compared to increase in Current Liabilities. This shows an increased liquidity of
bank Alfalah limited. It has resulted due to the maintenance of high level of cash at BAL.
But when we compare liquidity in 2014 with 2013, we found situation is vice versa BAL has
much decreased level of liquidity in 2014 as compared to 2013.

2. LEVERAGE RATIOS

Another important group of detail ratios are Leverage Ratios. Leverage Ratios measure the
use of debt and equity for financing of assets
2.1. Debt-to-Equity
It indicates the extent to which the debt financing is used relative to Equity financing. This
ratio is used to determine an entitys long-term debt-paying ability. It helps to determine how
well the creditors are protected in case of insolvency of a company. It compares the funds
provided by creditors to the funds provided by shareholders.
Debt to Equity Ratio = Total Debt / Share holders Equity
2015

= 849,254 / 42,425

= 20.01: 1

2014

= 698,309 / 37,823

= 18.46: 1

2013

= 579,526/ 28,266

= 20.50: 1

INTERPRETATION
This means that for each Rs.1 brought by shareholders, the Creditors brought Rs.20.01, 18.46
and Rs.20.50 during the years 2015 and 2014 and 2013 respectively to finance the BAL.
ANALYSIS
The debt to equity ratio of BAL is high which shows a great risk for creditors in case of
insolvency and also not a good sign for BAL in case of attracting and satisfying the creditors.
The ratio has decreased in 2015 by Rs.1.55 due to the fact that the increase in the debts is less
as compared to increase in Share Holders Equity due to decrease in bills payable and tax
liabilities. While looking at 2014, this ratio has been increased as compared to 2015 and
2013.
2.3 Debt-To-Total-Assets
The Debt to total assets Ratio measures the level of debt in relation to our investment in
assets. The Debt Ratio tells us the percent of funds provided by creditors and to what extent
our assets protect us from creditors. A low Debt Ratio would indicate that we have sufficient
assets to cover our debt load. Creditors and management favor a low Debt Ratio
Debt to Total Assets = Total Debt / Total Assets
2015

= 849,254 / 902,607

= .9401: 1

2014

= 698,309 / 743,128

= 0.9396: 1

= 579,526 / 611,428

= 0.9478

2013

 INTERPRETATION
This means that for each Rs 1 invested in the Total Assets of the BAL,
Rs 0.9401, 0.9396 and Rs 0.9478 have been brought by the creditors during the years 2015,
2014 and 2013 respectively.
ANALYSIS
A low Debt Ratio would indicate that we have sufficient assets to cover our debt load.
Creditors and management favor a low Debt Ratio, whereas here we see that the BAL debt
ratio is high somehow.
The Increase of 0.0005 in 2015 has occurred due to the fact that out of the total assets has
been provided by the creditor while low investment by the share holders, so the ratio is high
in 2015 because of low investment by shareholders and ratio is decreased in 2014 because of
high investment by shareholders as compared to 2015, and in 2013 it was increased as
compared to 2014.

3. PROFITABILITY RATIOS
Profitability Ratios measure the level of earnings in comparison to a base, such as assets,
sales, or capital. Analysis of profit is of vital concern to stockholders as they derive revenue,
in the form of dividends, when paid from profit. Profits are also important to creditors as they
are source of funds for debt coverage.
3.1 Net Profit Margin
Profit Margin measures the percent of profits you generate for each dollar of sales. Profit
Margin reflects your ability to control costs and make a return on your sales.
Management is interested in having high profit margins.
Net Profit Margin = (Net Profit / Net Sales or total income) * 100

2015

= (7,523 / 65,449) *100

= 11.80%

2014

= (5,641 / 58,931) * 100

= 9.57%

2013

= (4,676/ 51,819) * 100

= 9.023%

INTERPRETATION

This means that the BAL earned Rs.11.80, 9.57 and Rs. 9.023 as net profit for each Rs 100
for 2015, 2014 and 2013 respectively.
ANALYSIS
The ratio has got down tremendously by 2.23 % in 2015; it may be due to the following
reasons;
i.
ii.

The management has been unable to control costs.

The Administrative and selling expenses have not been controlled by the
management.

3.2 Return on Assets

It measures the overall effectiveness in generating profit with available assets i.e. the earning
power of invested capital. It is used to evaluate enterprise performance.
Return on Assets = Net Profit / Total Assets
2015

= 7,523 / 902,607

= 0.00833: 1

2014

= 5,641 / 743,128

= 0.00759: 1

2013

= 4,676 / 611,428

= 0.00764: 1

INTERPRETATION
This means that BAL is able to earn Rs. 0.00833, 0.00759 and Rs.0.00764return on its each
Rs.1 invested capital in 2005 and 2006 respectively.
ANALYSIS
In 2015 the ratio has increased by 0.00074 but, in 2014 the ratio has decreased by 0.00005,
while in 2013 this ratio is better than 2014.
It is due to the following reasons;
i.
ii.

The management has not been able to control costs

The Administrative and selling expenses have not been controlled by the
management.

iii. While net profits have not been increased as much as assets increased, so assets have not
been efficiently utilized.
3.3. Return on Equity
It measures the earning power on shareholders book value investment. A high return on
equity often reflects the firms acceptance of strong investment opportunities and effective
expense management.
Higher the ratio more the risk for entity, and more returns for shareholders.

Return on Equity = Net Profit / Shareholders Equity

2015

= (7,523/ 42,425) * 100

= 17.73 %

2014

= ( 5,641/ 37,824) * 100

= 14.91 %

2013

= ( 4,676/ 28,266) * 100

= 16.54 %

INTERPRETATION
This means that BAL has been able to grant a return of 17.73%, 14.91% & 16.54% to all
shareholders on their equity during, 2015, 2014 & 2013 respectively.
It is a high return for shareholders & thus too much attractive for investors.
ANALYSES
In 2015 the return for share holders is highest as compared to past 2 years, so it will be quite
attracting for investors.
In 2014 the ratio has got down by 2.82% as compared to 2015 and 2013, it is due to the
following reasons;
i.
ii.

The management has simply assumed higher risks thus resulting in higher returns.
There is too much less increase in net profits as compared to owners equity in
2015 due to inefficient control on costs, higher administrative and selling

iii.

expenses, higher taxes.

A lower receivable turn over and lowerer inventory turnover.

4. OTHER RATIOS
4.1 Cash to Deposits Ratio = (Cash / Deposits) *100
2015

= (62,369 / 640,189) *100

2014

2013

= 9.74 %

= (50,516 / 605,963) *100

= (61,205 / 525,526) *100

= 11.65 %

4.2 Advances to Deposits Ratio = (Advances / Deposits) *100

2015

= (327,298 / 640,189)*100

= 51.12 %

2014

= (290,597 / 605,963)*100

= 47.95 %

2013

= (260,780 / 525,526)*100

= 49.62 %

4.3 Investment to Deposit Ratio = (Investment / Deposits) *100

= 8.33 %

2015

= (397,097 / 640,189) *100

= 62.02 %

2014

= (324,319 / 605,963) *100

= 53.52 %

2013

= (219,690 / 525,526) *100

= 41.80 %

INTERPRETATION AND ANALYSIS

The BAL cash to deposits ratio has increased by 1.41% in the financial year 2015.
This shows an increased liquidity of bank Alfalah limited. This ratio is low in 2014
which show less liquidity of BAL, but in 2013 it was the highest in three consecutive

years.
BAL advances Rs 0.5112, 0.4795 and 0.4962 for its each Rs. 1 deposit in 2015, 2014
and 2013 respectively. The advances to deposits ratio has increased by 3.17% in the
year 2006. It means that BAL focus is more on advancing loans than opening

accounts in the year 2015.

The investment to deposits ratio has increased by 8.5 % in the financial year 2015. It
shows that bank is concentrating less on advances than investment.
It means that the bank has found more proper areas for advances of loans, which in
other words shows the increased reputation of bank Alfalah.

5. GROWTH RATIOS
5.1 Assets Growth Ratio = (Current year assets previous year assets / previous year
assets) * 100
2015 = (902,607 - 743,128 / 743,128) * 100 = 21.46 %
2014 = (743,128 - 611,428 / 611,428) * 100 = 21.53 %
2013 = (611,428 536,568 / 536,568) * 100 = 13.95 %
5.2 Investment Growth Ratio = (Current year investment previous year invest /
previous year invest) * 100
2015 = (397,097 - 324,319 /324,319) * 100 = 22.44 %
2014 = (324,319- 219,690 / 219,690) * 100 = 47.62 %
2013 = (219,690 189,487 / 189,487) * 100 = 15.93 %
5.3 Advances Growth Ratio = (Current year advances previous year advances /
previous year advance) * 100
2015 = (327,298 - 290,597 /290,597) * 100 = 12.63 %
2014 = (290,597- 260,780 /260,780) * 100 = 11.43 %

2013 = (260,780 233,933 / 233,933) * 100 = 11.47 %

5.4 Deposits Growth Ratio = (Current year deposits previous year deposits / previous
year deposits) * 100
2015 = (640,189 - 605,963 /605,963) * 100 = 5.64 %
2014 = (605,963- 525,526 / 525,526) * 100 = 15.30 %
2013

525,526 457,044 / 457,044) * 100 = 14.98 %

6.2 (A) Horizontal Analysis (3 consecutive years)

Profit and Loss account
For the year ended 31st December 2015
Rupees in Million
Particulars

2015

2015
Vs 14

2014

2014 2013
Vs13

2013 2012
Vs12

Mark-up / return / 61,458

11%

55,378

26%

43,961

-5%

46,080

interest earned
Mark-up / return / (32,811)

-2%

(33,505

24%

(27,066

-2%

interest expensed
Net Markup/ Interest 28,648

31%

)
21,873

29%

)
16,895

(27,500
)

-9%

18,580

49%

(1,534)

46%

Income
Provisions And write- (2,287)
offs
Net Markup/ Interest 26,361

-70% (3,559)

30%

20,340

28%

(1,054)
15,841

provision
Non Markup/ Interest 8,841

0%

8,876

7%

8,279

14%

7,281

income
Non Markup/ Interest (22,598)

9%

(20,702

20%

(17,313

12%

(15,519
)

income

expenses

5%

15,021

after

Profit before taxation

12,604

48%

8,514

25%

6,807

0%

6,783

Taxation

(5,081)

77%

(2,873)

35%

(2,131)

-4%

(2,227)

7,523

33%

5,641

21%

4,676

3%

4,556

Profit After Taxation

INTERPRETATION
From the above statement, it is observed that BAL has controlled its expenses as compared to
previous years and has good grip on its revenues. The rate of profit before taxation is also
increased to the extent of almost 23%. BAL is getting better in profit earnings as compared to
previous years, net profits have been increased 18% & 12% in 2014 and 2015 respectively.
This indicates that the overall profitability of the organization is good.

B) Horizontal Analysis
Balance Sheet Statement
As on 31st December 2015
Rupees in Million
Description

2015

2015

2014

2014
Vs 13

2013

2013
Vs 12

2012

-17%

61,205

5%

58,044

12,332

-65%

34,764

30%

26,721

193% 18,313

626%

2,522

188%

877

22%

324,31

48%

219,69

16%

11%

0
260,78

189,48
7

11%

6%

0
14,835

233,93
3

8%

13,748

Cash and Balances With 62,369

Vs 14
23% 50,516

Treasury banks
Balances With

34%

Banks
Lendings

to

Other 16,552

Financial 53,629

Institutions
Investments Net

397,09

Advances Net

7
327,29

13%

9
290,59

Fixed Assets

8
17,242

10%

7
15,740

Deferred Tax Assets

Other Assets
Total Assets

28,421
902,60

-9%
21%

-100%
91%
22%

1,204
148%
16,427 24%
611,428 14%

486
13,273
536,56
8

-17% 11,758
212% 55,233

23%
139%

9,543
23,115

13%
9%

8,431
21,228

Financial Institutions
3
Deposits
&
Other 640,18

6%

605,96

15%

525,52

15%

Accounts
9
Subordinated loans
9,983
Deferred Tax Liabilities 1,824

0%
114%

3
9,987
853

0%
-

6
9,991
-

457,04
4

70%
-

5,875
-

Net
Other Liabilities

15,131

4%

14,515

28%

11,351

-19%

13,931

Total Liabilities

849,25

22%

698,30

20%

579,52

14%

NET ASSETS

4
53,353

19%

9
44,819

40%

6
31,902

506,50
9

6%

30,059

7
LIABILITIES
Bills Payable
Borrowings

31,311
743,12
8

9,734
From 172,39

INTERPRETATION
From the above Balance sheet statement it has been observed that assets has been increased
by 8% in 2014, but in 2015 Assets decreased by 1% because of low investment and more
lendings to other financial institutions. While coming to Liability side we have observed that
in 2015 deferred tax liability of BAL has been highly increased as it was 0% in last two
years, moreover BAL has borrowing more from other financial institutions which increased
BAL liability in 2015. BAL is maintaining its assets as 6%, 40% and 19% in 2013, 2014 and
2015 respectively. This indicates that BAL should need to focus on controlling its liabilities
by reducing its deferred tax liabilities and also borrowings from other financial institutions to
increase its Assets.

6.3(A) Vertical Analysis (3 consecutive years)

Profit and Loss Account

For the year ended 31st December 2015

Rupees in Million
%
2014
%

2013

2012

87%

55,378

86%

43,961

84%

46,080

-47%

(33,505

-52% (27,066

interest expensed
Net Markup/ Interest 28,648

41%

)
21,873

34%

Income
Provisions And write- (2,287)

-3%

(1,534)

-2%

Particulars

2015

Mark-up / return / 61,458

interest earned
Mark-up / return / (32,811)

)
16,895

offs
Net Markup/ Interest 26,361

37%

20,340

32%

(1,054)
15,841

income after provision

Non Markup/ Interest 8,841

13%

8,876

14%

8,279

income
Non Markup/ Interest (22,598)

-32%

(20,702

-32% (17,313
13%

)
6,807

expenses
Profit before taxation

12,604

18%

)
8,514

Taxation

(5,081)

-7%

(2,873)

-4%

7,523

11%

5,641

9%

Profit After Taxation

-52% (27,500
)
32%

18,580

-2%

(3,559)

30%

15,021

16%

7,281

-33% (15,519
)
13%

6,783

(2,131)

-4%

(2,227)

4,676

9%

4,556

INTERPRETATION
In the above statement, it is observed that BAL as compared to previous years has good grip
on its revenues. The rate of profit before taxation is also increased to the extent of almost 5%
as compared to 2013 & 2014 respectively. BAL is getting better in profit earnings as
compared to previous years, net profits have been increased 2 in 2015 as compared to 2014
& 2013 while net profit in previous years was just 9%. This indicates that the overall
profitability of the organization is good.

B) Vertical Analysis
Balance Sheet Statement
As on 31st December 2015
Rupees in Million
Description
2015
Cash and Balances With 62,369

%
7%

2014
50,516

%
7%

2013
61,205

%
10%

2012
58,044

Treasury banks
Balances With

Other 16,552

2%

12,332

2%

34,764

6%

26,721

Financial 53,629

6%

18,313

2%

2,522

0%

877

44%

324,31

44%

219,69

36%

36%

9
290,59

39%

0
260,78

189,48
7

43%

2%
3%
100%

7
15,740
31,311
743,12

2%
4%
100%

0
14,835
1,204
16,427
611,428

233,93
3

2%
3%
100%

13,748
486
13,273
536,56
8

Banks
Lendings

to

Institutions
Investments Net

397,09

Advances Net

7
327,29

Fixed Assets
Deferred Tax Assets
Other Assets
Total Assets

8
17,242
28,421
902,60
7

LIABILITIES
Bills Payable
Borrowings

9,734
From 172,39

1%
19%

11,758
55,233

2%
7%

9,543
23,115

2%
4%

8,431
21,228

Financial Institutions
3
Deposits
&
Other 640,18

71%

605,96

82%

525,52

86%

Accounts
9
Subordinated loans
9,983
Deferred Tax Liabilities 1,824

1%
-

3
9,987
853

1%
-

6
9,991
-

457,04
4

2%
-

5,875
-

Net
Other Liabilities

15,131

2%

14,515

2%

11,351

2%

13,931

Total Liabilities

849,25

94%

698,30

94%

579,52

95%

NET ASSETS

4
53,353

6%

9
44,819

6%

6
31,902

506,50
9

5%

30,059

 INTERPRETATION
From the above Balance sheet statement it has been observed that assets has been increased
by 1% in 2015 and net assets are 6% in 2014 & 2015, While it was 5% in 2013. BAL
increased its investment over last 2 years 2013 & 14 respectively. While coming to Liability
side we have observed that in 2015 deferred tax liability of BAL has been highly increased as
it was 0% in last two years, moreover BAL is borrowing more from other financial
institutions which increased BAL liability in 2015. BAL is maintaining its net assets at 6%,
since last 2 years.
This indicates that BAL should need to focus on controlling its liabilities by reducing its
deferred tax liabilities and also borrowings from other financial institutions to increase its
Assets. Overall organization is in a good condition to meet the current challenges of business.

CHAPTER No. 7
CONCLUSION
BANK ALFALAH (BAL) under the leadership of Sheikh Nahayan Mabarak Al-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.

They are aware that they have stepped into the 21st century and they must meet its challenges
by acquiring the highest levels of Technology. They will thus be accelerating their enable
them distribute their products and services through most efficient and high-tech means. Their
programme to launch real time on line Banking Services and introduction of ATMs at
strategic locations have been firmed up and it will be fully operational during the year 2001.
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.
Based on the profit of Rs.354 million, the Board has proposed that a cash dividend at a rate
of Rs. 2.00 per share i.e. 20% of share capital be distributed among the shareholders.

CHAPTER No. 8
SUGGESTIONS AND RECOMMENDATIONS
8.1 Suggestions
The Human Resource Management given are primarily based on the analysis for the
improvement of banks efficiency, if these were followed it will give positive effects on the
profitability, and the role it plays in the development of the province of the bank.
8.1.1BETTER TRAINING PROGRAM
It has been notified that the training programs of BAL is not adequate. Special marketing
training should be given to employees for motivating customers. The training programs of
bank should include modern techniques to improve decision-making and inter-personal as
well as individual needs of an employee.
8.1.2 ENHANCED CUSTOMER SERVICES
Constant improvement in customers services is needed in todays competitive environment.
Personalized banking should be introduced to attract more customers. Equal respect should
be given to all customers.
Computerized Telephone Banking System

The satisfaction with convenient, secure and time saving way of banking. Just on phone call
the customers can always remain in touch. This latest computer service, which truly brings
banking to home, offices and can ensure the security of account by providing with a user ID.
With the help of this facility one can get the facilities of account balance, transaction history
and foreign currency exchange rates etc by just one phone call.
8.1.3 BETTER COMMUNICATION
The management of BAL should concentrate on improving upward communication to have
better feedback system involvement in bank operations.
Introduction of Management by Objectives (MBO)
The concept of MBO should be introduced in the bank where the subordinates should be
expected to formulate objectives for themselves.
This will ensure the setting up of objectives according to the capabilities of individuals. In
addition to this, it will also help in achieving the goals because they are involved in the
process of goal setting.
8.1.4 PROPER JOB ANALYSIS
A detailed and systematic study of the job should be done to know the nature and the
characteristics of the people to be employed. This will help in identifying the training needs,
evaluating the job and in appraising the performance of the employees.
8.1.5 ELECTRONIC DATA PROCESSING AUDIT
In BAL no audit is carried out on the bank computer system. There should be Electronic Data
Processing (EDP) audit so that any material discrepancies resulting from fraud or error can
be deducted.

Introducing Career Planning

As a matter of personal policy, personnel department should prepare a career plan showing
their future growth potential, depending on the job performance and evaluation which should
be made known to the employees. In this regard, the employee should be given opportunities
to show their performance.

Better Working Conditions

The working area is comparatively smaller as compared to the needs of the branch. As a
result there is a lesser working space provided to employees. They have to work about eight
hours and sometime even longer. The congested place effects their efficiency at work. It is

suggested that better working conditions should be provided for effective and efficient
output.
8.1.6 PROMOTION AND PUBLICITY
BAL relies heavily on personal banking, thus it does not give proper attention to the more
sophisticated methods of promotion. Although billboards are displayed in different parts of
the city, yet no proper advertisements have ever appeared in the dailies. The web site too
does not give complete information and unique features, which give its edge over the market.
So they should adopt strong strategies for promotion and publicity of their services they
offer.

International Banking

BAL should expend its branches not only in Pakistan but also outside the country to fulfill
their mission statement.
8.1.7 MARKET VISITS
A very useful mode of contact is through personal market visits. Such visits have other
important by products such as information about the customer financial and business
position, about his market reputation and creating a feeling of importance in the mind of
client. Such visits should be properly planned and documented with regularity and
consistency. The BAL assigns this task to its new recruited employees and rely on their
reports. But market specialists should also be send to market for analysis.
8.1.8 SEPARATION OF ACTIVITIES
There is no separation of activities as such. A function of clearing is partially done in deposit
department and partly in account department. This creates confusion and conflict in decisionmaking. To avoid such confusions, the functions of clearing be done in one department. This
separation of activity will help greatly in reducing confusion also added in efficiency and
effectiveness.
8.1.9 USE OF MOTIVATORS
To motivate employees, individuals must have a job with a challenging content that is a job
with responsibilities for achievement, recognition, advancement and growth. Such motivators
should be used for efficient working.

Latest Computer Equipment

Latest software and hardware should be introduced in the bank so that the data processing
speed of the computers can be enhanced.

Introduction of Forecasting Techniques

Advanced qualitative techniques of forecasting and inventory maintenance should be

introduced so that the management should be aware of its future needs and can make better
arrangements to meet these needs.

Encourage Small Depositors

Along with big depositors, small depositors should be given proper attention and care to
encourage saving in the country.

Awareness to Employees

All employees of BAL at every level must be aware of basic mission, values & objectives of
the organization, so that they can perform best to their abilities and ensure that BAL continue
to be recognized favorably at home & abroad.

Motivate Saving Habits

A big portion of the home remittance is send by Pakistan working capital through BAL. A big
portion of that amount is wasted by purchasing luxury items. BAL should motivate the
people towards savings by offering the deposits through various investment schemes & the
rate of profit should be increased by 1% to 2% then other banks. This will be a profitable step
for the bank.
8.1.10 EMPLOYEES TRAINING AND DEVELOPMENT
Refresher courses for the staff are most important in any international organization. Every
employee should have these courses according to their requirement. Foreign experts can also
be called for this purpose.