INTRODUCTION OF BANK ALFALAH

LIMITED
Bank of credit and commerce international (BCCI) was a Pakistan
based bank established by Mr. Agha Hassan Abdi from UBL in
association with U.A.E and Europe. BCCI has its branches in 74
different countries of the world. It had its three branches in Pakistan.
1991, The BCCI was banned, when it was accused by the European
countries that the bank was involved in some illegal operations with
gulf countries. The major reason behind European accusation was that
BCCI was of Islamic mode. Therefore the bank was closed due to
international pressure. Then, its 3 Pakistani branches were taken over
by Government of Pakistan which were named as Habib credit and
exchange bank and these were working as subsidiary of Habib Bank
Limited.
Following the privatization in July 1997, Habib credit and exchange
bank assumed the new identity of Bank Alfalah on February 25, 1998.
It is now Abu Dhabi based bank as the family of Sheikh Nahayan
Mubarak Al-Nahayan purchased 70% of its shares and 30% shares
remained with Habib Bank on the behalf of government.
It has it 45 branches in 21 cities in Pakistan. The Multan branch has
been opened in May 1999. It is not listed in any stock exchange of
Pakistan. Alfalah has emerged as one of the leading commercial banks
in the financial sector of Pakistan. Charged with strength of Abu Dhabi
consortium and under the leadership of his highness Sheikh Nahayan
Mubarak, minister of higher education and scientific research and
prominent member of Royal family. The bank is energized with vision,
envisaging.
The development of various sectors in Pakistan. The bank has already
made significant contribution in building and strengthens both
corporate and retail banks sector in Pakistan. Assessment of the needs
and wants of customer is an on going process at BAL, which help to
centennially develop new products of services. Designing the product
portfolio in response to royal patriot, royal custodial, Alfalah can
financing, Alfalah rupee traveler cheques home loans are prime
example of quality innovation providing timely banking opportunities
to customer. To continuously offer courteous, professional and
advanced banking going through training programs with focus to
information technology has recently rejuvenated solution the team of
bank.
With their key indicators of progress a steady soaring to new heights,
the bank is committed to dedicate all its energies, resources and time to
bring higher value and satisfaction to their customers and employers.
The graph of the bank is going up and up every year. The ratio of profit
is increasing at a good percentage. The bank is serving the people at
high level of standard by according to expectation of customers.
 THE VISION
Our vision is to be a leading financial institution, with a niche in areas
where we have a competitive advantage with complete banking
solutions. Our focus is on improving performance in each of our
businesses to achieve consistent and superior returns for our highly
valued clients and stakeholders.
 THE MISSION
Our mission is to maintain a competitive edge in quality banking,
customer service and profit performance. Our activities are geared
towards making Bank Alfalah a responsible corporate citizen. The
emphasis on “Quality & Innovation” will remain our key mission
statement. We will continue to strengthen our position as the leading
provider of quality financial services in Pakistan.

THE PHILOSOPHY
 Excellence in service
 Quality performance
 Product innovations
 THE BOARD
H. H. Sheikh Nahayan Mubarak Al-Nahayan
Chairman

Mr. Abdulla Khalil Al-Mutawa

Mr. Omar Z. Al-Askari
Mr. Abdullah Nasser Hawaileel Al-Mansoori
Mr. Nadeem Iqbal Sheikh
Mr. Ikram Ul-Majeed Sehgal
Mr. Mohammad Saleem Akhtar
Chief Executive Officer

CORPORATE INFORMATION
Company Secretary
Mr. Hamid Ashraf

Auditors
A. F. Ferguson & Co.
Chartered Accountants

Head Office
B. A Building
I. I. Chundrigarh Road
P.O. Box 6773
Karachi
 EXECUTIVE COMMITTEE
Mr. Mohammad Saleem Akthar
Chairman

Mr. Parvez A. Shahid

Mr. Ikram Ul-Majeed Sehgal
Mr. Mohammad Yousuf
Mr. Tanweer A. Khan
Mr. Sirajuddin Aziz
Mr. Mahmood Ashraf
BANK ALFALAH’S SLOGAN
Let’s Look Ahead Towards a Brighter Future Together.

BRANCHES NETWORK
Bank Alfalah has 45 branches in 21 cities of Pakistan. Detail as under:-

Karachi
 Main branch, B.A. Building, I.I. Chundrigar Road
 Cloth market branch
 Karachi Stock Exchange Branch
 Clifton branch
 Shahrah-e-Faisal Branch
 P.E.C.H.S Branch
 Timber Market Branch
 Defence Housing Authority Branch
 Gulshan-e-Iqbal Branch
 Jodia Bazar branch
 Korangi industrial area branch
 M.A. Jinah Road Branch
 North Napier Road Branch
 S.I.T.E Branch
 Paper market branch
 North Karachi branch
Lahore
 Gulberg branch
 Defense branch
 Circular road branch
 Township branch
 LDA Plaza branch
 Badami bagh branch
 Allama Iqbal Town Branch
 Shah Alam Market Branch

Rawalpindi
 Mall road branch
 Satellite town branch
Peshawar
Peshawar Branch
 Peshawar City Branch
OTHER BRANCHES
Other branches are in:
 Hyderabad
 Sukhar
 Rahim Yar Khan
 Multan
 Sialkot
 Islamabad
  Jehlum
 Quetta
 Mingora, Swat
 Faisalabad
 Gujranwala
 Sargodha
 Bahawalpur
 Dera Ghazi Khan
 Gujrat
 Sahiwal
 Mardan

Now, Bank Alfalah is going to establish its branches in some foreign

countries. Hopefully, in Dhaka (Bangladesh) and Bahrain, its branches
will be opened soon. Some branches will also be opened in European
countries. Bank is going to establish its branches in Mian Channu and
another branch in Multan.

FEATURES
Bank Alfalah Limited is an established bank. It has some special
features with the help of those it is growing rapidly.

GOOD WORK ENVIRONMENT

As the work environment plays a great role in this competition age, so
the bank has good work environment. All the people work with
cooperation; managers are so kind that each problem can be discussed
with them.

EFFICIENCY
Employees at Bank Alfalah are quite efficient. As Multan branch is a
new one, its employees have to bring their bank among the list
of good banks. Therefore, they work more than their working
hours and it is all according to their will. It also shows their
loyalty, commitment to organization.

CUSTOMER SERVICES
All the customers are entertained individually. Same kind of behavior
and attention is given to all the customers.

SUGGESTIONS ASKED FROM CUSTOMERS

Getting ideas for improvement from customer side is a new idea and
that is working very well in Bank Alfalah Ltd. All the customers are
asked to fill a suggestion form and the standards of the bank are
improved through them.
EMPLOYEE BENEFITS
Employees are given the benefits like bonus, gratuity funds, loans,
increments, house rent, medical and conveyance.

COMPUTERIZED WORKING ENVIRONMENT

In bank, all the work is done on computers. All the entries are made in
computer. Balance are fed into the computer. This increases efficiency
of the bank.
 PRODUCTS
 ANMOL deposit certificate
 Royal profit
 Royal patriot
 Royal group
 Financing scheme
 Alfalah car financing
 Bank Alfalah home loan
 Rupee traveler cheque

Designing its portfolio bank is committed to develop products that give

more value to its customers in both the sectors in corporate and
consumer need.
Following their trend of bringing value added products and services to
their customers the bank has present Royal Group, Royal Profit and
Royal Patriot.

ROYAL GROUP
Royal Group is a joint investment plan that allows individuals to invest
money collectively and earn higher rate of profit.
Amount Profit %age
From Rs. 100000/- to 999999/- 8.00%
From Rs. 1000000/- to 9999999/- 8.25%
From Rs. 10000000/- and above 9.00%
ROYAL PROFIT
It is profit obtained by individuals on their deposited amount.
50,000,000 & Alone profit is given on daily basis. It is just to attract
customer.
Amount Profit %age
From Rs. 50000/- to 999999/- 7.50%
From Rs. 1000000/- to 9999999/- 8.%
From Rs. 10000000/- to 49999999/- 8.25%
From Rs. 50000000/- to 149999999/- 9.00%
From Rs. 150000000/- to and above 9.25%

ROYAL PATRIOT
It is fix for specified time period. It is similar to term deposit. In term
deposit one get no benefit of profit when he withdraws his money
before maturity date. But in case of Royal Patriot of one withdraw his
money before the maturity date, he can get the benefit of profit. The
profit rates for different periods are following:
Tenure 1 3 6 12 24
month months months months months
25000-999999 7.50% 8.50% 9.00% 9.50% 9.50%
1000000-49999999 7.60% 8.60% 9.10% 9.60% 9.75%
5000000 & above 7.70% 8.70% 9.20% 9.70% 10.00%
 CONSUMER FINANCE BANKING

FINANCING SCHEMES
The bank has introduced many financing schemes such as Term
Finance and CF, FAFB, FAPC. The bank has recently introduced a Car
Finance Scheme.
ANMOL DEPOSIT CERTIFICATE
In Anmol deposit, profit is given on daily basis. Profit is calculated
from date of purchase (Subject to minimum holding period of 30 days).
Certificate can be encashed from the issuing branch.

ALFALAH CAR
It’s a scheme that enables one to own his desired car at easily
affordable and flexible installments with a minimum down payment
and insurance.

SALIENT FEATURES
 Lowest financing cost available in the market.
 Tenure of 1 to 5 years as per individual requirement
 Quickest processing
 Minimum processing charges: Rs. 3000 payable once
 Down payment requirement of 20%
 Repayment through monthly installments
 Insurance rates available from bank’s approved insurance
companies
 Flexibility of adjustment at anytime during tenure.
 Easily affordable flexible installment
 Lowest markup
 Pre-mature Termination 5% Of Principal Outstanding
MINIMUM INSTALLMENTS
Monthly Installments for Alfalah Car can be calculated by
multiplying Bank’s financing amount with the following factors:
Periods Advance Deferred
installment installment
For 12 months 0.09072 0.09216
For 24 months 0.04962 0.05041
For 36 months 0.03609 0.30666
For 48 months 0.02944 0.02996
For 60 months 0.02553 0.2594

Eligibility Criteria

All Businessmen, Corporate Employees, and other salaried or self-

employed professionals having net take home income in excess of three
times the monthly installment.

Required Documents For Car Finance Facility

{ AGE LIMIT BETWEEN 21 – 55 YEARS}

1. Application Form
2. Copy of National Identity Card.
3. Copy Of Driving License
4. N.T.N Certificate.
5. Copy Of current utility bill of residence.
6. Bank account statement for last six months from the date of
application.
7. Signature verification from duly verified by the Banker.
8. Assets and Liabilities Statement ( Where Bank’s Financing
Exceeds Rs. 5 Lac)
9. CIB Report Required ( Where Bank’s Financing Exceeds Rs. 5
Lac)
10.Basic Borrower fact Sheet
ADDITIONAL REQUIREMENTS FOR BUSINESS
CLASS INDIVIDUALS.
A) COPY OF RENTAL/ PURCHASE AGREEMENT OF
BUSINESS PREMISES.
B) SOLE PROPRIETORSHIP LETTER ON RELEVANT
BUSINESS LETTER HEAD.
C) PARTNERSHIP DEED (IF APPLICABLE).
D) NOC FROM OTHER PARTNERS (IF APPLICABLE).

ADDITIONAL REQUIRMENT FOR SELF EMPLOYED

PROFESSIONALS.
A) COPY OF RENTAL/ PURCHASE AGREEMENT OF
BUSINESS PREMISES.
B) COPY OF MEMBERSHIP OF RESPECTIVE INSTITUTE.
C) MUST BE PRACTICING/ CONDUCTING FOR LAST 3
YEARS.
ADDITIONAL REQUIREMENT FOR LAND LORDS.
A) FARD MALKIAT/ TILTLE DEED OF LAND
B) UNDERTAKING FROM A COMPETENT LANDLORD
ADDITIONAL REQUIREMENT FOR SALARIED
INDIVIDUALS
A) CERTIFICATE FROM EMPLOYER SHOWING
PERMANENT EMPLOYMENT FOR THE LAST 2
YEARS.
B) ORIGINAL SALARY CERTIFICATE.
 C) TAKE HOME SALARY SHOULD BE THREE TIMES OF
THE PROPOSED INSTALMENT.
D) INCOME OF SPOUSE CAN ALSO BE CLUBBED.

CREDIT CARD DEPARTMENT

BANK ALFALAH HOME LOAN
Alfalah home loan is especially designed for those non resident
Pakistanis in UAE whose families live in Pakistan. This product is for
NRD’s to buy build or renovate arouse in Pakistan.

Documents
1) Non-resident Pakistani of UAE, holding valid Pakistani
passport.
2) Valid UAE visa
3) Pakistani ID Card
Must be 21 year of age or over salaried and 62 in case of
businessmen

Functioning of BAL is dived into following departments.

1) Operation Department
2) Foreign Exchange Department
3) Credit Department
4) Accounts Department
 OPERATIONS DEPARTMENTS
Operation Department has following segments.
a) Cash
b) Clearing
c) Remittance
d) Account opening
e) Accounts department

OPERATION DEPARTMENTS
Operations department of the Bank Alfalah Limited is responsible for
the overall operations of the bank.
Mr. Hassan Zaidi is operation Manger. He looks after the overall to the
higher authority about all its departments. The detail of those
departments which are controlled under this department is as under.
a) Account opening
b) Cash department
c) Clearing
d) Remittances
e) Online Transactions
 ACCOUNT OPENING DEPARTMENT
It is most important department of bank and its major source of income
for bank. Miss Shazia Bashir deals in this department.
Following procedure is adopted for this purpose.

Procedure Of Account Opening

It is very simple and quick procedure. A person who wants to open an
account must has the introduction of bank’s staff or any already
existing account holder of bank. The customer is required to fill an
account opening form. Then signatures of the introduce are verified
from S.S. Card before opening account. AOF (Account Opening Form)
is very standard and up to the mark which contains almost whole
information about customers. Customer is guide to fill all columns of
AOF. All formalities and requirements are completed and verified, and
all supportive documents are taken and checked according to the nature
of account. If any formality is incomplete, cheque book is not issued
until it is fulfilled.
If a person cannot sign his / her hand thumb impression is affixed
marked, which is attested by one male or two female witnesses. Thumb
impression for female right hand and for male left hand.
They also have to give identity letter
1) NIC copies
2) Passport size photograph
One place on the form other is on SS Card they have non-bearer
cheques. On their cheque book a stamp is affixed on it there is written.
Thumb impression should be fixed in front of an officer of the bank.
The bank does not make payment of a cheque bearing a six months or
older date. If an account is not operated in six months. It is called
dormant account.

TYPES OF ACCOUNTS
The bank different types of accounts exist.

1) INDIVIDUAL ACCOUNT
Any individual or proprietor of business can open an individual account
at BAF.
PLS (profit and loss sharing) saving accounts can be opened with the
minimum balance Rs. 1000/- with expected profit rate is 9%. Following
requirements has to be fulfilled for this account.
 Signature of customer on back of AOF.
 Mention next of kin (nominee)
 Name and A/C # of introducer.
 Verified sign of introducer.
 Customer signature admitted by officer.
 N.I.C photocopy attached.
 Letter of thanks.
2) JOINT ACCOUNT
When more than one person open a single account it is called joint
account. The names of persons are written on the title of A/C and on
S.S. card.
Joint A/C cannot be opened by single person. Both persons have to sign
on cheques. When two or more person neither partner nor trustee open
account in their name is joint account.

Requirements
 Sign of both customers on back of AOF
 Sign on joint A/C # mandate
 Name and A/C # of catrodiecer
 NIC copies of both members.
 Mode of operation.

3) BUSINESS ACCOUNTS
When the owner of the firm operating singly, open an in his term name.
Three types of Accounts are Here For Business Accounts:
a) Sole Proprietor Account
b) Partnership Account
c) Limited Company

I) SOLE OF PROPRIETOR ACCOUNT

This account is for those person who has his own business of the
business he is one owner of the firm.
Requirements
 Companies stamp
 Declaration of proportion companies’ letter head.
 Sign on AOF (Account Opening Form)
 NIC copy
 Verified signature of introducer.
 Sole proprietorship declaration

II) PARTNERSHIP ACCOUNT

Account title will be the name of the partnership firm.

Requirements
 Sign of customers on back of AOF.
 NIC copies of partners
 Partnership deed (certified copy) duly attested by notary
republic.
 Partnership mandate (prescribed format)
 Companies rubber stamp
The A/C is opened in the firm name and all partners designate one or
two persons to act behalf of the partnership firm all acts of the firm
jointly and severely.

III) LIMITED COMPANY

Limited co:
1) Private Limited
 2) Public Limited

PRIVATE LIMITED
Requirements
 Restrain on companies letterhead dully attested by chairman.
 Sing of all directors on back of AOF.
 NIC copies of all directors.
 List of directors on company’s letterhead.
 List of memorandum and article of association.
 Copy of board resolution.
 Latest form 29 (if director is to be changed or in case of his
death, this kind of form is filled, it includes information that a
new director has how much number of shares with him.
 Companies rubber stamp.
 Copy of certificate of incorporation should be attested by
Director, co register an office stamp should be affix.

Code Of Accounts
Saving account 02
Current account 01
Royal profit 029
Royal group 05
FSB 028
FCP 018
EURO 0287
PUBLIC LIMITED
1) Certificate of commencement of business
2) Same as a home documents.

Club / Society / Association

These concerns are non-trading in nature. They have their own rules
and regulation and their affairs are mentioned by the committee called
as a governing body or managing committee.
1) Stamp of directors
2) NIC copies
3) Certified copy of resolution
4) Memorandum and article of association
5) List of heads on companies’ letter head.
6) Bank account opened in their name with BAL.
7) Name of person to be specified for the operation in account.
8) The manner in which the account shall be operated.
9) Letter of registration.
Trust
Certified Copy of Trust Deed
1) Certified copy Of Buy Laws
2) List Of Trustees
3) Board of resolution resolving to open an account with BAL
along with the signing instructions of the authorized
signatures to operate the account. This resolution must bear
the trust stamp and at the same time must be attested by the
company secretary.
4) NICs of all the trustees
CHEQUE BOOK ISSUANCE
When the account is opened, then the customer is given a chequebook
to sign upon and encash money. It proceeded as under.

PROCEDURE
All the account opening formalities must be completed before issuance
of chequebook. Particulars of the chequebook requisition should be
completed containing title of account, account number, type of
currency, number of leaves and signature to the customer. Signature of
the customer is verified on the requisition.
If customer is unable to collect his cheque book, then he can give
authority to the third person to collect his cheque book on his behalf by
signing on the back of the requisition, in such case, the particulars of
the third person are required like name of the person NIC number and
signature of that person on requisition and cheque book issuance
register.
Chequebook is taken out from the safe / locker. It is assured that series
of the chequebook. Particulars are entered in the chequebook issuance
register. Account number is stamped on very leave of the chequebook
and those leaves are counted. Name of account holder is written on the
cover of the chequebook. And requisition on the chequebook for further
issuance is properly filled, stamped and signed by officer of the bank.
Chequebook is delivered to the customer and his signature on the
chequebook issuance register. Chequebook serial number entered. In
the system (Bank Smart)
 Stock of chequebook are balanced at the end of each day and kept
under safe custody.
Earlier the banks were charging a fee for issuance of cheque book but
now whenever a new account is opened, the account holder issued a
cheque book free of charge.
Bank Alfalah issues the following chequebooks.
 Saving account-25 leaves
 Current account 50 leaves.
 Current account – 25 leaves
 Foreign currency $ 10 leaves
 Foreign currency 10 leaves
Loose cheques are also issued in some cases.

Closing Of Account
When a customer wants to close an account he has to given a hand
written application to the head of the operations department to close his
account plus remaining leaves of cheque book.
The manager first verifies the sign of account holder, then closing is
done from the registers on the computer where the account was opened.
In the file of the account holder his account opening form is crossed.
For this closing a fee of Rs. 150/- is charge in BAF.
 CASH DEPARTMENT
Cash department of Bank Alfalah works under the operation
department. this department is given the complete responsibility of
cash, as result of transaction in touch local and foreign currencies. It is
also responsible for the book keeping of these transactions and the safe
custody of cash.
This department performs the main function.
a) Cash receipts
b) Cash payments

CASH RECEIPTS
In cash department depositors use deposit slip for depositing the
amount into their accounts. The officer checks if the deposit slip is
properly filled up containing title of account. A/C number date and
amount in words and figures. Detail on both counter file and cash
receipt voucher should be the same. Cash is received by cash receiving
officer, twice counted and matched with the deposit slip. The cash
details are written on the back of the deposit slip and are also entered in
cash receiving register. Cash received stamp is affixed on the face of
the deposit slip along with the signature of the cash receiving officer.
Deposit slip and cash receiving register is given to the officer in the
cash department. The officer cash department both on cash receipt and
cash receiving register makes again proper scrutiny. Officer cash
department signs both the deposit slip and register. Deposit slip is
credited and posted in the concerned accounted in the system. Counter
folio is given the deposition as receipt. One consolidated cash debit
voucher is posted in the system to balance the cash.

CASH PAYMENTS OF CHEQUE

Mr. Jawad deals with cash payments the process for payment of
cheques local and foreign currency is same. First the cheque is
presented by the customer or holder to cash payment officer. He
confirms’ that it is drawn on the same branch and the particulars of
cheque are properly filled in. one signature of the holder is taken on the
back of the cheque. Cheque is handed over to the officer cash
department for scrutiny where officer checks the date, amount in words
and amount in figures, payee’s name, crossing if any, account number,
cheque serial number, any material alterations / endorsements and
signature of the customer. Account is debited and then cheque is
cancelled by the officer. It is posted in the system and posting stamp
and number is affixed on it. Cheque is handed over to the cash payment
officer for payment. One more signature on that back of the cheque is
taken from the holder to match with the first one, and then cash is paid
to the cash detail is written on the back of the cheque. Cash paid stamp
is affixed on the face of the cheque. Entry is passed in the cash payment
register.
 CLEARING DEPARTMENT
Mr. Anees deals this department. Before discussing it is necessary to
know what is “clearing”.
“Exchange of Cheques and balance of accounts”
“The process by which cheques exchanged between the collecting and
paying bank and the ensuing financial settlement is called “clearing”.
This facility is provided by the state bank of Pakistan for offsetting of
cross obligations between the different banks. Clearing is of two types.
1) Inward clearing
2) Outward clearing

Inward Clearing
When cheques drafts, etc, of our branch presented to us for clearing by
the SBP. Cheques to be honored by bank.

Outward Clearing
The cheques of other banks that the account holder deposits in their
accounts are send for collection.

Clearing process (Inward/Outward)

Here the local cheques are received that are drawn on BAF. All the
cheques are received on one counter along with the paying slips duly
filled in properly containing particulars of cheques and account holder.
Counter folio of paying slip is handed over to the customer by putting
stamp for cheque received for collection for Bank Alfalah on it duly
signed by officer. These cheques are scrutinized and cheques for local
clearing are separated from OBCs. These are then entered in clearing
register and cheques for collecting are entered in OBC register and
handed over the bills department of collection. Clearing officer checks
and verifies title of all the cheques deposited by the customer to
confirm the good title of the cheques. Cheques are scrutinized properly
and paying slips are separated from cheques. Special crossing,
endorsement and clearing stamps are affixed on the cheques. Cheques
of each bank are sorted and arranged branch wise. All the cheques are
then entered into the clearing system of bank. Print out of the clearing
is taken and details are attached.
With the cheques of each bank. Details of these banks are then entered
into the clearing schedule containing number of cheques presented and
their total amount against the name of each bank. Then total number of
cheques presented to all banks and their total amount is written on the
foot of that schedule, which is tallied with the clearing register.
Next morning, these cheques are delivered to the respective banks in
clearinghouse of SBP between 9:00 to 9:30 AM. In the same manner,
other banks present their clearing drawn on Bank Alfalah. Total
number of cheques and their amount delivered to other banks are
received from them are written on the clearinghouse schedule and
handed over to the officer clearing house SBP. Cheques / DD received
in clearing are given to the officer cash department of the branch for
their repayment. After I proper scrutiny of cheques, verification of
signatures and confirmation of balance in the account, officer cash
department pays these cheque by canceling and posting them in the
system.
If any cheque is not passed due to insufficient balance or any other
reason, officer cash department returns the same cheque by attaching a
cheque return memo containing reason for return. This cheque is
entered into the cheque returned register and bank charges are deducted
according to the schedule of charges.
Second clearing is called at 2:30 PM to check the fate of the cheques
presented to other banks in the morning. If any cheque is to return, that
is delivered to the same bank in second clearing. In the same manner, if
any cheque presented by Bank Alfalah in first clearing is returned, they
receive it and once again give schedule of clearing figure to the officer-
clearing house SBP containing number of cheques and their amount
delivered and received unpaid.
 REMITTANCE DEPARTMENT
The need of remittance is commonly felt in today’s business. A major
function of any bank is to “transfer of funds form one place to another”.
Bank Alfalah uses the following modes of transfer of funds.
a) Demand draft (DD)
b) Telegraphic transfer (TT)
c) Pay order (PO)
d) Call deposit
e) Pay slip
f) Money gram

DEMAND DRAFT
It is instrument, which is used to transfer amount from one city to
another city it can be made on cash as well as on cheque. If it is made
through cheque that it is necessary that person must be A/c account
holder while in case of cash any person can made. It consists of three
copies.
1) Original copy which is given to account holder.
2) DD advice is sent to the central branch.
3) Third copy is for reconciliation. Its photocopy is kept with us
(bank) while original is sent to head office for reconciliation.

Procedure
The client who wants to transfer his funds form one city to another fills
a form requesting the bank to prepare a DD. DD application form
contains columns requiring information for the preparations of DD eg.
  Beneficiary name
 Applicant’s name
 Address
 Amount to be sent etc.
Bank deducts some charges against DD. These charges include
commission tax provincial tax etc. Tax is deducted 0.3% while PT
charges are 0.50 paisas. If customer is taxpayer than advance tax is
exempt provided that he submit the tax exemption certificate.

TELEGRAPHIC TRANSFER
It is another mode of transfer of funds. It is quickest mode of transfer of
funds from one city to another. For TT, client has to submit the
application on a prescribed form of the bank. Client can deposit money
in to the bank or can request the bank to deduct the amount against the
TT along with the charges against the issuance of TT from his account.
The charges against the issuance of TT charged by Bank Alfalah.

Procedure For Telegraphic Transfer Issuance

Application form is given to the customer to fill. Two signatures are
taken on the form one for request and other for receiving the
instrument. All the particulars of application form are checked and
bank commission charges and with holding tax are written on the top of
the applicant form. If the customer is maintaining his account with the
branch he can give cheque for total amount of instrument plus bank
charges. Cheque and application form is then given to the officer cash
department for the payment of the cheque. After proper scrutiny,
officer cash department posts whom cheque and signs the application
form to assure that payment is received. If the customer wants to pay
cash, it is deposited by the customer on cash counter. Cash receiving
officer receives cash on the application form along with the bank
charges and withholding tax; application form is then given to the
remittances incharge for issuance of the instrument. He enters all the
particulars of the application form in the system (BPG) and computer
gives an Auto Control Number to the T.T message of receiving branch.
This message is then sent through telex to the receiving branch
followed by a T.T. advice. The customer is confirmed that T.T. has
been sent.

Procedure for T.T. Payable

When TT message is received, tested number on the TT is checked and
verified. Tested number is then written in the register and signed by the
holder of test keys for office record. All the particulars of the TT
payable are entered in the system. Payment instructions on the TT
message are followed it if is pay and advice it will be paid through TTR
on the cash counter or through clearing and if it is credit and advice, it
will be transferred in the account mentioned in the TT message.
Printouts of vouchers (TT payable are taken. If TTR is presented for
payment, signature of the authorized officers are verified on TTR is
presented for payment, signature of the authorized officers are verified
on TTR and after proper scrutiny, it is posted in the BPG and canceled
by the remittances incharge.
Procedure For Foreign Demand Draft Issuance
Application form is given to the customer to fill the same. Two
signatures are taken on the form, one for request and other for receiving
the instrument. All the particulars of application form are checked and
bank commission is charged, which is US$ 5/- for each amount of
FDD. Cheque is received from the customer for total amount of FDD
plus bank commission. Cheque and application form is then given to
the officer cash department for the payment cheque.

After proper scrutiny, officer cash department posts the cheque and
signs the application form, to assure that payment is received. Then
cheque and application form is given to the incharge. Remittances, who
will enter all the particulars of the application in the FDD issuance
register. If the customer wants to pay cash, it is deposited by the
customer on cash counter. Cash receiving officer receives cash on the
application form along with the bank charges. Application form is then
given to the remittances incharge for the issuance of the instrument. A
control number is allotted to the instrument form FD registers.
Instrument is complete by putting all the particulars in it and signed by
two attorney holders. Instruments are then handed over to the
customers. FDD advice is sent to the responding foreign bank / paying
bank where they are maintaining dollar account through registered
mail. Exchange transaction credit advice (ETCA) is sent to eh Head
office fore the reimbursement. Copies of the FDD and ETCA are kept
in the record of the bank.
Procedure For Foreign Telegraphic Transfer Issuance
Application form is given to the customer to fill the same. Two
signatures are taken on the form one for request and other for
signatures are taken on the form one for request and other for receiving
the instrument. All the particulars of application form are checked and
bank commission is charged, which is US$ 15/- that rate for each
amount of each FTT.
If the cheque is received from the customer, it is taken for total amount
of FTP plus bank commission. Cheque and application form is then
given to the officer cash department for the payment of cheque. After
proper scrutiny, officer cash department posts the cheque and signs the
application form to assure that payment is received.
If the customer wants to pay cash, it is deposited by the customer on
cash counter; cash-receiving officer receives cash on the application
form along with the bank charges. Application form is then given to the
remittances incharge for the issuance of instrument. He enters all the
particulars of the application form in the FTT register and a control
number is allotted to the FTP. TT message is written in the telex
containing name of transferring branch, name of receiving branch, date
amount, currency, payee’s name and account number or identification
if any, payer name and payment instructions. A test number is given to
the FTT message for receiving branch. This message is then sent
through telex to the receiving branch. Customer is confirmed that FTT
has been made. Exchange transaction credit advice (ETCA) is sent to
the Head Office for the reimbursement. Copies of advice (ETCA) and
FT are kept in the record for the bank.
COLLECTION
All the cheques under collection are called cheques under collection in
Bank Alfalah Limited. There are two types of bills for collection:
 Outward Bills for Collection
 Inward Bills for Collection

Outwards Bills For Collection

All the cheques are received on one counter along with paying slips
duly filled in properly containing particulars of cheques and account
holder. Counter folio of paying slip is handed over to ht customer by
putting stamp for “cheque received for collection for Bank Alfalah” on
it duly signed by officer. These cheques are scrutinized and cheques for
local clearing are separated from OBCs. Cheques for local clearing are
entered in clearing register, whereas cheques for collection are entered
in OBC register and handed over to the bills department for collection.
OBC number is allotted to eh cheque from OBC register. Special
crossing and bank endorsement stamps are affixed on the cheque. OBC
schedule is attached with the cheque and dispatched to the main branch
of that city for collection. If they do not have any branch in that city,
then cheque will be sent to the collecting agent of Bank Alfalah for
then cheque can be sent directly to the drawing branch, instructions are
given on the OBC schedule for the payment of that cheque.

PAY ORDER
Is written order issued by a bank, drawn upon and payable by itself, to
pay specified sum of money to the order of a specified person.
Application form is given to the customer to fill. Two signatures are
taken on the form one for request and other for receiving the
instrument. All the particulars of application form are checked and
bank commission charges and with holding tax are written on the top of
the applicant form. If the customer is maintaining his account with the
branch he can give cheque for total amount of instrument plus bank
charges. Cheque and application form is then given to the officer cash
department for the payment post the cheque and signs the application
form in token of payment received. If the customer wants to pay cash,
cash is deposited by the customer on cash counter cash receiving
officer receives, cash on the application form along with the bank
charges and withholding tax.
Application form is given to the remittances in charge for issuance of
instrument. He enters all the particulars of the application form in the
system (BPG) and computer gives an auto control number to the
instrument. Print out a take on the block payment order. Two
authorized officers of the branch then sign it. Instrument is the protect
graphed and given to the customers.
When the instrument is presented for payment, it is posted in the BPG
and canceled by the remittances in charge after proper scrutiny.

CALL DEPOSIT
When the party wants to give payment from itself to another party then
it makes call deposit. The bank keeps it with itself unless it does not
receive instructions from other bank. Normally it is made on cash and
goes in party account.
PAY SLIP
It is used when bank itself pay for any type of transaction e.g.
purchased of stationary.

MONEY GRAM
Bank Alfalah Limited, in collaboration with money gram offer
remittance services to Pakistan.
“It’s basically a person to person money transfer service that allows
consumer to receive money in just a few minutes.”

Procedure
 Person must have reference no.
 Person must tell reference no. and compute the simple form.
 Person has to show NIC and tell compute introduction after that
he can obtain money.

Vouchers are also posted in the system. When OBC is realized

collection bank pays the amount through IBCA if it is the same bank or
through DD if it is another bank. If DD is received against OBC, it is
presented in the clearing for collection. If IBCA is received the branch
for the payment of OBC, certain vouchers are posted in the system.
 ACCOUNT DEPARTMENT
Account department is the most important department of the bank.
Because it is concerned with:
 Revenue
 Expenses
 Assets
 Liabilities

These are the pillars of any business. This department is supervised by

Mr. M. Zubair. In this department, all the vouchers that are posted
during one day are sent to the account department next day. These
vouchers are already posted to computer by the concerned department.
So computer also sends a report to the accounts department. The
accounts department has to tell that 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 of EVP or
VP, this department pays all stationery charges, medical allowance,
etc..

Daily Customer Movements List

All the changes that are made in accounts of customer are shown in the
daily customer movement list. By using this list, people of accounts
department can prepare the vouchers.
Account department performs following activities.
1. Data Controlling
a) Sorting and arrangements of vouchers
b) Checking of the posted vouchers into daily activity report.
c) Custody of all vouchers
2. Reporting
a) Preparation of daily reporting
b) Preparation of weekly reporting
c) Preparation of monthly reporting
d) Preparation of quarterly reporting
e) Preparation of semi annually reporting
3. Expense Management
Payment of all petty cash
a) Payment of all capital expenditures
b) Payment of inter branch expense
4. Taxation
Deduction of withholding tax and deposit into SBP
a) Filing of tax returns
5. Pay Role
6. Budget Preparation
Preparation of monthly budget review
a) Preparation of monthly performance review
7. Monthly closing Monitory & Monthly Closing Statement
Preparation
8. Leave Record & General Administration
9. Fixed Assets, Record, Depreciation, Maintenance, Insurance &
Approvals
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.

For any financial institution it is of utmost importance to maintain a

healthy and a strong deposit base. Deposits enable a bank to extend
credit facilities thereby generating income.
Deposits are held on behalf of the customer in either local currency or
foreign currency. The differences between profit/interest paid and mark
up recovered contributes to the profit portfolio of the Bank.
Deposits can be categorized as follows:

1. Call Deposits
Depending on local practice Call Deposits are to be repaid immediately
upon demand and during counter hours.

2. Notice Deposits
Notice deposits are kind of fixed deposits. The minimum balance
requirement for opening the account is Rs. 500/- and payment is drawn
on maturity of the specific period.
Deposits repayable on receipt of notice from a customer after a pre-
specified period are termed as notice deposits. The depositor indicating
his intention to withdraw the funds selects the notice period. Notice
Deposits are usually held for pre-specified tenors of seven days and
thirty days. A deposit should be placed for a minimum of 7 days in
order to qualify for accruing of profit. If the deposit runs for a period in
excess of the notice period, then the profit shall be payable up to the
encashment date.
Notice Deposit Is Of Two Types
 One for which a prior notice of 30 days and is required from the
customer before withdrawing deposited amount and for which
rate return is 6.10%.
 second for which a prior notice of 30 days and above is required
from the customer before withdrawing deposited amount and for
which the rate of return is 7.50%.

3. Term / Time Deposits

A term deposit is a deposit that is made of a certain period of time. At
the end of specific period the customer is allowed to with draw the
principal amount. The rate of return of this account varies from 7.5% to
12.5%. The term deposit account varies from one month to 5 years and
the minimum balance requirement is Rs. 500/-.
These deposits are repayable on a term due date. This due date is
called the maturity date of the deposit and is determined at the time
the deposit is made. These deposits have tenors starting from one
month, and can extend up to a period of five years.

PAK. RUPEE DEPOSITS

All deposits placed by the Bank on behalf of the depositor are non-
cumulative, non-transferable and non-negotiable.

Application Form:
Every deposit taken must be supported by either a written request along
with a confirmatory cheque/cash and a Term Deposit Application
(BAF-TD-001) duly signed by the depositor. The application should
contain all required instructions in connection with the nature of
deposit, principal amount, and a particular period. The branches are
advised to cite the account number on the application, if the depositor
is already a customer. Also a copy of valid identification document
should be obtained from all depositors.

Deposit Receipts:
The deposit receipt (BAF-TD-002) should be issued in duplicate. The
original will be issued to the depositor, the copy be attached to the
Term Deposit Application Form (BAF-TD-001), filed as per 2.2 above
and which should be retained at the issuing branch.

The deposit receipt (BAF-TD-002) should necessarily indicate the

following:

• The name of the depositor

• The currency of deposit
• Tenor of the deposit
• The value date
• The principal amount of deposit in words and figures
• The deposit reference number in the form

XXX-YYYY-ZZZZ where:

XXX — denotes abbreviation of the accepting branch

name

YYYY — denotes the year of issue i.e. 1999 etc.

denotes the number allotted from a manually maintained sequential
 ZZZZ — checklist, which starts with 0001 each year (separate
check- list will be maintained for each type of deposit).

No alteration of any kind should be made on a Deposit Receipt (BAF-

TD-003). Any receipt requiring alteration should be cancelled by
reversing the transaction (if not on the same day) and in lieu of the
previous one; a fresh receipt should be issued.

Accounting Concepts for Accrual:

The accounting of profit accrued, payable & paid is explained by the

following entries:

Profit Accrual:

DR: Expenditure A/C Profit Payable

CR: Sundry Creditors Expenditure Account Profit

Payable.

Profit Paid to Customers:

DR: Expenditure A/C

Profit Paid

CR: Customer Account /

Cash.
Pre-Mature/Partial withdrawal of Term Deposits:
All requests for pre-mature / partial withdrawals of term deposits must
be supported by an application duly signed by the depositors. In case of
partial withdrawal the application should contain instructions for
encashment of the deposit, placement in a different /or same tenor of
the balance amount as a fresh deposit, and/or treatment of the profit
(e.g. a pay order for the profit amount may be requested favoring the
depositor only).
If the deposit does not complete the tenor of placement then the branch
manager has the discretion to pay or forfeit the Profit. Furthermore, if
the decision is made to pay the profit then profit payable on time
deposits withdrawn prematurely will be calculated on the
Deposit amount for the "period run" at the prevalent rate. "Penal rate"
will be applied to the uncovered period and will be deducted from the
profit amount payable for the period run". The terms "period run",
"prevalent rate" and "penal rate" have the following meaning:

Period Run: The period for which the time deposit has run from the
date it was established.
Prevalent Rate: The rate of profit, which is declared by the Bank twice
a year i.e. from Jan. to Jun. and July to Dec.
Penal Rate: The rate, which is currently valued at 2% by the
Management, is to be applied for the uncovered period of the maturity
and is deductible from the profit to be paid. Penal Rate as authorized by
the SBP and the Bank policy is intended to discourage premature
encasements.
Whenever a request for partial withdrawal of deposit is allowed, the
entire amount of the deposit will be treated as prematurely paid-up. The
amount being withdrawn will be repaid to the customer and the balance
placed as a fresh deposit from the date of partial withdrawal to the new
maturity date as requested by the customer, at the appropriate rate
prevalent on that date for that period.
Royal Patriot has a different mechanism for premature encashment
details of which are already provided to the branches. Also this product
is exempted from the levy of penal rate.

Matured Deposits:
All Rupee deposits are non-cumulative i.e. they are not automatically
renewable/rolled over. However, if the Customer desires to withdraw
the profit only and continue the placement of principal for a same tenor
then the Bank will properly endorse the details of profit paid at the
reverse of the receipt (BAF-TD-002), which will be returned to the
Customer, and the system shall be updated.
Profit on time deposit exceeding the maturity date shall be payable only
if the deposit runs for an " equivalent tenor" of the deposit's original
period of placement.
However, the Branch Manager using his discretionary powers can
authorize payment of profit on a period shorter then the original tenor
after the maturity of the deposit.

Loss of Deposits Receipt:

a) When a depositor reports loss of the deposit receipt in writing, a
notation to that effect is to be made on the application as well as
on the file copy of the receipt and simultaneously the system file
should be updated. The following precautions should be adopted
to minimize risk:

i) All the branches should be immediately informed to "mark caution"

in their records.
ii) Prior to the issuance of a duplicate receipt confirmation from all the
branches should be obtained to ensure that the receipt has not
already been encashed and that no borrowing has been allowed
against the same.
iii) An "indemnity letter" having a current stamp value (Presently
Rs.60/), available with the Cash Department should be signed by
the customer in the presence of the concerned officer, thereby
absolving the Bank from all claims arising from possible
malicious intents.
iv) A remark to the effect, "duplicate issued in lieu of old receipt
number" should be written visibly on the face of the new receipt.

Deposits "UNDER LIEN":

a) The Credit Department, after duly completing the required
documentation from the depositor, should request the Manger
Operations in writing to mark Bank's lien on the deposit.
When so advised by the Credit Department, the Deposit Section
will mark a lien in the following manner:
i) A notation, "under Bank's lien", should be visibly written on the face
of the deposit receipt (BAF-TD-003).
ii) The entry in the register, system and the application should
carry the notation of lien and the date of creating the lien.
iii) The receipt to be kept in Bank's custody, it is mandatory to
obtain two signatures of the depositor at the reverse of the receipt
duly verified ensuring a proper discharge in Bank's favor.
b) The Credit Department should ensure that obtaining written
confirmation from the Deposit Section has marked lien on the deposit
and the original receipts, which, should be "saved-in".
c) The amount of deposit placed under lien shall not be released to the
depositor without prior approval of the Credit Department. The Deposit
Section will maintain documentation duly authorized by the concerned
credit authority for placing
Deceased Accounts:
a) On receipt of intimation of death of the depositor, a notation
'Account Holder Deceased' should be marked in the register, system
and the application.
b) Due care and precaution should be exercised to ensure that person(s)
claiming the deposit amount(s) is/are the legal heir(s) of the deceased,
all formalities have been complied with, and prior approval of the
branch manager obtained before the amount(s) is/are paid. If necessary,
the documentation may be sent to the local legal counsel for approval
before payment is effected.

Loss of Customer Contact / Inactive Accounts:

a) All repayments of dormant deposits within the span of ten
years shall be authorized by the Branch Manager.
b) If any deposit has remained dormant for ten years or more,
the Head Office should be notified and requested for providing
guidance for the treatment of the deposit.
 FOREIGN CURRENCY TERM DEPOSITS

Term Deposits should be accepted on behalf of customers only.

Reporting:

a) TREASURY
All new (after Jul. 01, 1998) foreign currency deposits, when
created/withdrawn should be reported to the treasury, same day, with
respect to their amounts and tenors.

b) STATE BANK OF PAKISTAN

A schedule 'D' format is used to book contracts for old deposits with
the SBP.
The sale/purchase (dealing activity) is communicated to the SBP on
daily basis. Moreover, at month end a consolidated statement of all
outstanding contracts booked with the SBP are reported in respect to
contract number, amount and expiry/maturity of the contract.
However, the reporting requirements are subject to change as per the
instructions of SBP and internal policies.

Account Documentation
a) Placements should then be linked with the term deposit account.
The receipt (BAF-TD-003) should contain a clause that provides
for automatic renewal of the deposit amount together with interest
accrued at maturity in the absence of instructions to the contrary,
from the depositor.
The control over documentation outlined in Account Opening Manual
(BAF-OM-CB-003) will apply to term deposits as well. All necessary
account opening documentation where required must be obtained at the
time of opening the respective Term Deposit Account for the customer
or at the time of accepting the first term deposit.
In certain instances, it may not be possible to obtain the original written
request from the customer and instead a facsimile, mentioning that the
original debit authority will shortly follow, may be accepted. It should
be ensured that the term deposit is being created in the favor of the
account holder and not a third party and that prior approval of the
branch manger is also obtained in writing. Follow up, should be
adopted for obtaining of the original debit authority.

Term Deposit Advice

The system will generate term deposit advice in duplicate. The original
will be issued to the depositor and the copy retained at the branch as a
file copy. The advice should, inter alia, indicate the following'
• The account number

• The name and address of the depositors

• The currency of deposit
• Tenor of the deposit
• The value date
• The principal amount of deposit in words and figures
• The rate of interest at which it has been placed
• The interest amount at maturity
• The deposit reference number in the form
XXX-YY-ZZZZ where:

XXX — denotes abbreviation of the accepting branch name

YY — Denotes the year of issue i.e. 99 for 1999 etc.
ZZZZ — Denotes the number allotted from a manually maintained
sequential checklist which starts with 0001 each year
(separate check- list will be maintained for each type of
deposit). Type of the deposit and the maturity date in case
of term deposits
If the system generated advice contains a discrepancy due to input
error, then the concerned officer should first rectify/amend data in the
system, cancel and file the erroneous advice in the respective customer
file and issue the system generated corrected / new receipt to the
customer.

Pre-Mature/Partial Withdrawal of Term Deposits

All requests for pre-mature/partial withdrawals of term deposits must
be supported by an application (BAF-TD-001) duly signed by the
depositors. In case of partial withdrawal the application should contain
instructions for enchantment of the deposit partially, and/or placement
in a different tenor of the balance amount as a fresh deposit. The
customer request should also clearly specify the treatment of the
interest if due.
Interest payable on time deposits withdrawn prematurely will be
calculated on the deposit amount for the "period run" at the "applicable
rate". "Penal rate" will be applied to the uncovered period and the
product will be deducted from the profit amount payable for the period
run". The terms "period run", "applicable rate" and "penal rate" have
the following meaning:
Period Run'. The period for which the time deposit has run from the
date it was established.
Applicable Rate: The rate of interest fixed at the time of placement of
the term deposit, which would have been applied on the original
maturity date, if the deposit had remained with the Bank for the full
period intended.
Penal Rate: The rate, which is to be applied for the uncovered period of
the maturity and deductible from the interest paid. Penal Rate as
authorized by the SBP and the Bank policy is intended to discourage
premature encashment.
Whenever a request for partial withdrawal of deposit is allowed, the
entire amount of the deposit will be treated as prematurely paid-up. The
amount being withdrawn will be repaid to the customer and the balance
placed as a fresh deposit from the date of partial withdrawal to the
maturity date of the original deposit or such fresh maturity date as
requested by the customer at the appropriate rate prevalent on that date
for the period.

Matured Deposits /Automatic Roll Over

a) In the case of prevalently practiced automatic renewal of term
deposits at maturity, until otherwise advised by the customer, the
original customer request will suffice and no fresh application need be
held in support of the renewed deposit. The system /customer file
should be updated each time to reflect the new deposit number and date
of issue.
b) Applicable to FCY deposits only and in, the absence of disposal
instructions at maturity, the deposit amount together with interest
accrued will be automatically ' rolled over' for an identical period at the
rate prevalent on that date.
c) A due date diary should be maintained through consultation of
TDR Maturity Report (ARM A-16) and deposit accounts marked for
disbursement of profit upon the maturity as per customer's standing
instructions.

Withdrawal
The customer has to instruct the Bank in writing for either
withdrawal of the term deposit before or at maturity and / or for
principal amount including interest or otherwise
A facsimile message can be accepted for encashment of the deposit,
if it contains confirmation of the original request being mailed shortly;
and only if the proceeds credited to the deposit holder's account (SB or
CD).

However, prior written approval of the branch manager remains mandatory.

Deposits "UNDER LIEN"

a) The credit department after duly completing the required
security documentation from the depositor should request the
Manger Operations in writing to mark lien.
When so advised by the Credit department, a lien will be marked by the
deposit section by carrying out maintenance in the system and the
deposit account shall be blocked. The credit department should ensure
that lien/block on the deposit has been marked in the system and obtain
fresh confirmation with lien/block marked on it from the system, by the
Term Deposit Section.
b) The amount of deposit placed under lien shall not be
released to the depositor without the prior authorization from the
Credit Department or appreciate authority. The term deposit
advice should carry a notation, "under bank's lien". The Term
Deposit Section will maintain documentation in respective
customer file duly authorized by the concerned credit authority
for placing and lifting of the lien on the term deposit.
FOREIGN EXCHANGE DEPARTMENT
“The transfer of credits to a foreign country to settle debts or accounts
between resident of home country and those of the foreign country” or
“the foreign bills currencies etc used to settle such accounts”.
Foreign exchanged department deals within exports and imports. Mr.
M. Yaseen at BAF supervises it. The bank acts as exporter as well as
importer bank for different parties who are in the business of export
and import.

Import
All goods and services brought into a country that were purchased from
organization located in other countries.

Export
All goods and services sent from one country to another country.

DOCUMENT REQUIRED FOR EXPORTER

1) National tax number
2) Registration with EPB
3) Sales tax registration

DOCUMENTS TO BE ATTACHED FOR EXPORTERS

 Invoice
 Bill of lading
  Packing list
 Total quantity
 Net weight / carton
 Gross weight / carton
 Total net weight / carton
 Total gross weight
 Bill of exchange (original or draft)
 E-form: Initial document on which total export proceeding is
based. In this form, all the conditions are given, which are
necessary for exports.
 Letter of credit: It is written agreement between importer and
exporter.
 Beneficiary certificate.
 DHL certificate (TCS certificate)
 Form ‘M’
 Certificate of Origin (Form – A)

FORM-E
Government has provided facility to exporter in taking E-Form from
any bank and he can present it to any bank for negotiation. Export
precede realization certificate.
SBP gives rebate to exporter against export after realization. It is paid
according to commodity wise and bill wise. Claim period: 1 year.
TRANSPORT DOCUMENT (BILL OF LADING, AIRWAY
BILL)
 When insurance is done by importer, C&F (cost and freight)
usually used.
 FOB cost (free on board)
 CIF (cost insurance and freight) when insurance is done by
exporter, CIF is used.
 Tenor (At sight) immediate payment by importer after receiving
product.
 Partial shipment: Product is sent partially.
 Transshipment: Product is sent via any country.

E-FORM CERTIFICATION
When export is done on C&F basis, so bank issues E-form certification
to exporter and he submits it to the custom officer along with e-form
certification to certify e-form.

FORM OF AUTHORIZED DEALER’S CERTIFICATE

State bank permits exporter to issue bill of lading in the favor of e-form
bank. But if requirement of L/C is to issue bill of lading in favor of
company then shipping company issues bill of lading in favor of
Exporter Company. Authorized dealer certificate is filled for this
purpose.
CERTIFICATE OF ORIGIN
This certificate shows that goods are from Pakistan.

COVERING SCHEDULE
If in covering schedule, it is given that “please remit proceed to our
Karachi office a/c no. 5740734881 with ABN (Amro Bank New York),
USA for onward credit to BAF Multan.

BENEFICIARY CERTIFICATE
If L/C requires some information as proof of anything from exporter
then exporter has to present beneficiary certificate for that proof.

E-FORM
E-form has four copies:
 One for custom officer
 One for exporter
 Triplicate copy for SBP
 Duplicate copy for bank
Bank reporting or duplicate and triplicate is done by bank. Custom
officer (date is given on the foot form) should clear product.

PAYMENT FROM IMPORTER BANK

It is the choice of importer to open L/C from any bank and the bank
from which L/C is opened can also refer to some other bank for
payment. So bill of exchange is sent to refer bank and other documents
are sent to L/C opening bank.

SWIFT (Standard World Wide Inter Bank Financial Transaction)

It is network among all banks. No other institute can get involved in it.

BILL OF LADING
Certificate from shipping company for loading commodities. If
requirement of L/C is to issue bill of lading in favor of L/C opening
bank, then authorized dealer certificate will be provided by bank in
favor of L/C opening bank.

BANK KEEP IN RECORD

 Covering schedule
 Invoice
 Packing list
 AWB
 Certificate of origin
 E-form

Normally bank keeps photocopy of all documents in record. Negotiable

documents (original documents).
 IMPORTS
L/C is opened by the importer. There are two types of L/C
 Revocable L/C
 Irrevocable L/C

NECESSARY REQUIREMENT
If place of issue and port of loading is different on bill of lading, then
along with the stamp of shipment on board, vessel name and port of
shipment is written.
1) Issue date of bill of lading – shipment on board.
2) There should not be cutting on bill of lading without
authentication.
3) Bill of lading should show capacity of agent. If the agent of
Importer Company can take bill of lading, then his name
should be mentioned on bill of lading.
4) Original GSP should be presented.
5) If TT reimbursement is not acceptable, it means bill of lading
is necessary.
When documents are received fro export, do enter into
lodgment register.

DOCUMENTS FOR IMPORT

 Performa invoice signed by importer
 Category passbook copy attested by any bank
 L/C opening application filled in by the customer
 Import registration with export promotion bureau
 Annexure
 Verification of signature by S.S. Card
 L/C issued on basis of L/C application form.
 Insurance if covered by buyer.
 Insurance cover note.
 Insurance policy.
 DOCUMENTARY CREDIT
DC Department
Alfalah Bank has his full-fledged documentary credit department.
As a credit instrument and as a means of making as a payment the
documentary credit is an essential instrument for conducting word trade
today. A documentary credit represents a commitment bank to pay the
seller of goods or services a certain amount provided present stipulated
documents evidencing the shipment of the goods with prescribed
period of time.
For the cases of imports or exports first the parties have to do upon a
sale contract regarding the term and condition of sale. One mode of
payment is by L/C, which is secured, and now a day mostly uses the
business.
Letter of credit is under taking by opening bank (Importers bank the
Exporters bank (Negotiating bank) that it will make payment if
documents are as per terms of LC.

Four Parties Are Involved In Letter Of Credit

 Applicant Importer
 Beneficiary Exporter
 Issuing bank bank of importer
 Advising bank bank of importer

According to import policy, no import is valid with out import license,

which is issued by the chief controller of import, and export or we can
say export promotion bureau (EPB). If a person desires to take up
import trade must get his name, his firm or his limited company,
registered with the EPB. On being granted registration certificate, he
will be eligible to import goods according to import policy. There is no
special condition of eligibility for registration. The only requirement is
that he should be a Pakistani and must be registered with income tax
department.

L/C OPENING PROCEDURE

When the importer obtained import license, then the bank will open
letter of credit. “A letter of credit is undertaking by LC opening bank to
put an agreed sum of money to sellers bank on behalf of the buyer of
the goods under clearly defined terms and conditions”. Pakistani banks
open only irrevocable LC. An essential feature of the irrevocable LC is
that it cannot be modified, altered, amended, or canceled without the
prior consent of all the parties. Party comes to the bank and fills the
form, which is provided on the payment of Rs. 100. This form is filled
by the party and is return to the bank, it includes details like.
 Name of company
 Address
 Country of origin
 Branch name
 Quantity
 Insurance company
 Shipment from
 Shipment to
One thing should also be submitted which is INDENT. If the foreign
party has any agent they will issue the indent with following details.
 To masers
 Importers, etc

Document Required for “LC” Opening

When the bank opens LC, it requires following documents.
 Valid import license
 Performa invoice
 Importer should be Pakistani
 Letter of under taking form importer
 Insurance cover.
An important point, which the bank will consider before opening of
LC, is that sufficient funds be available in the LC openers accounts. At
the time of establishing the LC the opening bank generally retains a
maximum margin to safe guard its own commitment. The margin may
vary from nil to 100% according to the nature of commodities and it
also depends upon the party. At the item of establishing the LC opening
bank charges bank commission, postage and other charges from the LC
opener account. Another main important point is that value of LC
should not increase the value of import license. After all the documents
are the bank verifies being checked and signs. A sanction slip is
attached with each form so that the approval can be gained from the
manager of the bank.
After the approval is made four copies are prepared and the entries are
made on the computer and the printout is taken the margin amount is
checked from the importer account and if the amount is not found then
LC is not opened and the party is informed about the situation. On the
deposit of the margin then LC is opened LC limit if set by the bank is
also checked.
After the LC is opened following entries are made.
 LC opening register
 Margin / Liability Account Register.

Payment To Seller
The negotiating bank upon receiving the documents from the seller
checks the documents according to terms and conditions of credit upon
satisfying it self of this the negotiating bank makes payment to the
seller if sight credit. It then forwards the documents to the opening
bank and reimburses it self through the opening banks account with
itself.

Documents Received By The Opening Bank

Importers bank or opening bank receives the following documents form
the exporters bank or negotiating bank.
 Bill of exchange
 Invoices
 Bill of lading
 Packing list
 Certificate of origin
 Insurance
 CREDIT DEPARTMENT
Credit means belief or trust. “The quality of being credible or
trustworthy”. Another words we can define credit as “trust in one’s
integrity in money matters and ones ability to meet payment when
due”.
At bank Alfalah Ltd (BAL) Mr. Omer Nadeem is manager corporate
banking of the credit department. The earnings of BAL are chiefly
derived from interest charge and discounts. This department is the
revenue-generating department. Credit department basically has three
segments.
1) Credit marketing department
2) Credit administration department
3) Trade finance services department

Credit and advance department deals with extending loans (credit

facility) to customers. State Bank of Pakistan (SBP) has prescribed
regulations which are called “PRUDENTIAL REGULATIONS”. Every
bank has to follow these regulations. If any bank violates the
regulations it should be liable for penalties under the core spirit of SBP
PR (S).
The Bank Alfalah limited credit is extended on the basis of these rules
and regulations. These regulations tells the term and conditions under
which you can extend loans to the borrower and to what extent.

CREDIT FACILITIES
At BAL there are two types of credit facilities
 1) Funded facilities
2) Non funded facilities

FUNDED FACILITIES
These are the facilities in which there is direct involvement of cash
fund. Following are the funded facilities.
1) Current finance CF
2) Term finance TF
3) Finance against foreign bills “FAFB”
4) Finance against packing and credit “FAPC”
5) Finance against imported merchandise “FIM”
6) Finance against trust receipt “FATR”
7) Payment against document “PAD”

Current Finance CF
The extensively used financing mode at BAL is current finance (CF)
current finance is used to finance both individuals and industries.
Individual take current finance for their personal use while in
industries. It is taken for fulfilling the requirement of working capital.

Term Finance TF
Term finance is for specified time period. Term finance is given for
fixed asset financing.

Finance Against Foreign Bills FAFB

In FAFB facility exporter take loan from bank on the behalf of their
foreign export bills. Like exporter sends shipment but at that time he
needs fund for the operation of the business. He may go to the bank and
surrenders all the documents including L/C, Bill of lading etc. bank
checks all the documents to be in accordance with terms and
conditions. If they find no discrepancy, they give money to exporter but
take some margin on it.

Finance Against Packing And Credit “FAPC”

FAPC is taken for the preparation of consignment. It has two forms.
1) Pre shipment
2) Post shipment

1) Pre Shipment
Preshipment loans are export related working capital financing.

2) Post Shipment
Post shipment financing is essentially the receivable financing to the
exporters till the period he is out of cash after the shipment.

Finance Against Imported Merchandise FIM

This facility is allowed against the commodities imported from other
countries usually through letter of credit. Some time importer does not
have enough amounts for paying the imported merchandise therefore.
He request to the bank to pay all dues to the exporter against the
security of imported merchandise. Bank pays the amount and releases
the goods, when the importer pays off its liability partially / fully.
Finance Against Trust Receipt FATR
Finance is extended upon the trust receipt signed by borrower.
Importers have to import the product. There are three conditions.
1. Pay money and get thing
2. Get FIM facility

3. And third is that if that client is trust worthy for bank believing
on him based upon his past record. He releases the goods against
the trust receipt. Trust the customer gives receipt to the bank.
The customer in turn commits that I will pay on such and such
date. Bank pays all taxes and gets merchandise and then gives it
to client. Bank do charges markup against such financing. FATR
is for specific period of time. If client do not pay with in
specified time then bank charges higher per day markup.

Payment Against Document PAD

Payment against document is made by the banks as payment against
L/C comes due payment is made for imported documents. For example
when exporter sends all the document to importing bank as document
reached, importing bank has to make payment within 24 hrs if the
importer does not pays then bank charges markup per day.

NON FUNDED FACILITIES

The facilities where there is no direct involvement of banks fund.
Following are the non-funded facilities.
1) Letter of credit L/C
2) Letter of Guarantee L/G
Letter Of Credit
Importer bank issues a document on request stating that it will pay the
exporter when exporter fulfill the terms of letter of credit L/C is off two
types.
1) Sight L/C
2) Usance L/C

Sight L/C
Requires the importer / importing bank to pay as soon as it receives the
clean documents from exporter.

Usance L/C
It extends time period (typically 60, 90, 120 days) to importing bank
for payment. After specified time period importer have to pay.
Letter of guarantee “L/G”. Bank gives guarantee in the behalf of person
that I will pay in case of default.

GUIDE LINE OF CREDIT POLICY

 Total outstanding financing facilities by banking company to
single person shall not at any point of time exceed 30% of bank’s
unimpaired capital.
 No banking company shall make loans or advances against the
security of its own shares.
 No banking company shall grant unsecured loans / advances on
the guarantee of,
 o Any of its directors.
o Family member of director
o Any private company in which banking company is
interested.
 In arriving at exposure per person weight age of 50% shall be
given to
o Documentary credit opened by bank.
o Guarantees/bonds other than repayment guarantees.
 In arriving at per party exposure 90% of
o Deposit of party with bank under lien.
o Face value of FIBs lodged by the party as collateral.
o Pak rupee equivalent of face value of special US Dollar
bonds converted at official rate, lodged by the party as
collateral shall be deducted.
 Aggregate exposure of bank against all its clean facility shall not
at any point exceed the amount of bank’s capital and general
reserve.
 Advances given to the employees of bank in accordance with
their entitlement.
 While granting any accommodation, bank shall ensure the total
accommodation availed by any borrower from banks / financial
institution does not exceed 10 tines of the capital and reserve of
the borrower.
 A borrower who is prepared to inject fresh equity irrespective of
the fact that its equity is negative is eligible to obtain finance
from bank to the extent of 10 times fresh injected equity.
 No banking company allow financing facilities whether fund
based / non-funded against the shares of companies which are
not in central depository system.

CREDIT CYCLE

Request
Renewal / Revise /
Write-off
Processing
Informatio
n & CLP
Monitoring

Decision

Disbursement of
Loan
Offer
Purification of
the
Docum
ents &
STEP I
Credit cycle start with request letter. When customer give a request
letter to bank that he want that much amount of credit from bank.

STEP II
When bank receive the request letter from customer. The officer of
credit marketing department make credit line proposal (CLP) of client.
It is essential that the proposal define clearly the purpose of facility, the
source of repayment, the agreed repayment. Schedule, the value of
security and customer relationship consideration implicit in credit
division.
The security to be accepted as collateral for the facility and all the
documentation relating to the security of facilities must be in the
approved form all approval procedures and required documentation
must be completed all these things all feed in CLP.
CLP is basically a medium to present proposal for seeking approval of
credit line in client. In CLP they feed complete data of the client their.
 Credit limit
 Legal status of company.
 History of relationship / introduction with bank.
 Line of business
 Background of proprietor / partner / owner.
 Purpose of facility
 Security
Along with it they attach borrower basic fact sheet.
 CCA
  Prudential checklist.

STEP III
After the processing of information. Credit officer decides whether to
give credit to that person or not. They also check whether its security
has any market value or not. Decision is taken by the branch credit
committee (BCC). If the proposal is within the discretionary powers of
committee the proposal may approve after evaluation of credit risk.
It CLP is beyond discretionary power of branch credit committee the
CLP is sent to credit division at head office along with supporting
documents and recommendation of branch credit committee.

STEP IV
When decision is made now credit officer offer that we will give you
loan up till that limit not more than that.
Up till now credit marketing officer does all the process. After that
credit administration officer’s work start.

STEP V
Here documents are checked security is properly checked which is
checked by the valuer. Valuer tells the value of security. Here
following characteristic of security are checked.
 Market value
 Consistency
 Sellable
 Storable
  Transferable
 Transportation

STEP VI
On completion of legal documents and security arrangement and
receipt of completion certificate from recognized legal counsel, the
bank according to the approved schedule prepared by bank after
obtaining confirmation of other payments have been funds from
sponsors other source via, equity fund from sponsors release of fund by
other co-financiers etc. After the valuation of security the loan is
disbursed to customer.

STEP VII
Responsibility lies to branch manager to monitor the overall profit and
risk aspect of credit portfolio in accordance with criteria setout in
bank’s credit policy. After the disbursement credit administration
officer monitor the performance of customer whether he is fulfilling the
requirement or not. He is paying markup or not for which purpose he
has taken the loan whether he is utilizing loan for that purpose or not.

STEP VIII
After specific time period credit officer see what customer want
whether he want to renew / revise or write off it. If he want to renew it
he said to officer to renew it with same limit.
 SWOT ANALYSIS
STRENGTHS
 Bank has a belief in customer service
 Backed by strong Abu Dhabi Consortium
 Customers give suggestion for the improvement of bank and
these suggestions are listened carefully.
 Manager and EVP Mr. Asif Ali Sheikh have good coordination
with staff members.
 Environment is friendly.
 Products are excellent
 Modernized banks (online banking)
 Fully computerized, each department has to own PC.
 Quematic machine

WEAKNESSES
 Mixed culture
 No ATM facility is provided in Multan

OPPORTUNITIES
 Information technology
 ATM real time one line
 Master card facility
 Establishing foreign branches
THREATS
 Competition
  Legal reputation

RECOMMENDATIONS
Finally, we are giving some suggestions for Bank Alfalah Limited.
These suggestions are based on our experience with bank.
 This is a routine practice that in order to give personalized
services to the customer, bank staff tries to fill all the columns of
AOF with their own handwriting, which is wrong. AOF must be
filled by the customers.
 Under no circumstances chequebook should be given to the
customer if the account formalities are incomplete.
 There are two officers involved in cash deposit process, which is
time consuming. Cashier should be given certain powers to
receive cash of US$ & DM to provide prompt services.
 Similarly, there are two officers involved in cheque payment
process, which is time consuming. Cashier should be given
certain powers to pay cheques up to Rs. 25000/- to provide
prompt services.
 Cheques, which are drawn on Bank Alfalah Branch and returned
unpaid in clearing, are not reflected in the statement of account
of the customers. These cheques must be reflected in the
accounts so that credibility of the customers may be assessed.
 ATM, credit card, all these facilities should be provided to attract
more customers.
 Audit should be held internally, rather there should be an audit
department in the branch to make audit on daily basis. This can
 become so, helpful as a different banks are having this
department of their own.

Observation & Conclusion

I observed the bank Alfalah a financially sound bank. Its profits are
increasingly year-by-year. Its staff is very good and sincere with the
bank. Bank Alfalah under the leadership of Sheik Nahayan Mabarak
Al-Nahayan has made significant progress in building and
strengthening both the corporate and retail banking sectors in Pakistan.
The bank attained number 2 positions in terms of its balance sheet size
amongst the private banks in Pakistan in 2000.
Bank Alfalah views specialization and service excellence as the
cornerstone of its strategy. The people at bank realize that innovation;
creativity, reliability, customized, services and their execution are they
key ingredients for their future growth.
Revenues from these activities have started yielding dividends and they
expect significant growth. The areas in the coming years.
They are aware that they have stepped into the 21st century and they
must meet its challenges by acquiring the highest level of the
technology. They will thus be accelerating their technological advance
to enable them to distribute their products and services through most
efficient and high tech means. They say that they will continue to
invest in the modern tools and substantial allocation to resources will
be made to achieve this objective during the current year. Online
banking have been started and the introduction of ATM at strategic
locations have been firmed up and it will be fully operations during the
June 2001.
Acknowledgement
First and foremost all praise be to almighty Allah who gave me courage
and patience to carry out this work successfully.
I also wish to tender grateful acknowledgements with profound respect
and gratitude to respected Mr. Javed Iqbal Coordinator of
internship program And Mr. Hassan Zaidi Operational Manager of
BAL under whose practical and generous guidance this work has
been accomplished.
I also feel indebted to the staff of the concerned bank specially Sir
Khurram Raza and Sir Zubair for their find and sincere assistance
during my internship.

Saba Saghir