ACKNOWLEDGMENT

I have completed a report based on my familiarity with my past

studies in order to get a bit familiar with the practical experiences in
organizations. By the grace of Allah Almighty I have accomplished this
report.

Sincerely, to my knowledge and exposure to this subject, I dedicated

my little effort to every one who works for the cause of Pakistan. I
express my appreciation to Bahria University that scheduled and
assigned me this report and I hope my efforts will be duly regarded.

PREFACE
Theory and practice completes the cycle of human instinct quest for
knowledge and his need to solve day-to-day problems systematically.

The purpose of this program is to give practical knowledge about the

functions of the organization.

The Internship Program also gives better comprehensive and exposure

of theoretical concepts, which are studied during BBA as well as helps
the students to get acquainted with actual working atmosphere and
requirements in organizations.

For the purpose of Internship I joined Bank Alfalah. During my period

of Internship I got a chance to work in different departments and I
have tried my best to compile the same in my report.

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 and 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

INTRODUCTION
Banking background in Pakistan
At the time of independence there were 487 offices of scheduled
banks in the territories of Pakistan. The Reserve Bank of India was
the only bank to settle the problem of coinage, currencies and
exchange etc. There were 19 non- Indian foreign banks with the status
of small branch offices, which were engaged solely in export of corps
from Pakistan, while there were only 3 Pakistan institution i.e. Muslim
commercial bank, Habib bank LTD, and the Australasia bank.

State bank of Pakistan was established on July 1, 1948 and assumed

full control of banking and currency in Pakistan. In order to develop
sound banking & weeding out weak institutions, the Banking Companies
Central Act was promulgated in 1949, empowering the State Bank to
control the operations of banking in Pakistan.

Another very significant event in the development of banking in

Pakistan was the appointment of the Credit Inquiry Commission in 1959
to examine the scope and working of the institution providing credit
facilities

to

agriculture,

trade,

commerce

recommended measures for further improvements

and

industry

and

 Bank Alfalah
Bank Alfalah during the past five years, has assumed a brand new
identity plied with a spurred vision and revived commitment, following
the privatization of H.E.C.B in 1997. Since then the Board and the
Management of the bank have implemented strategies and policies to
carve a distinct position to carve an instinct position for the bank in
the market.

The strengths of Abu Dhabi Group have helped Bank Alfalah

contribute towards the development of quality retail and Corporate
banking in Pakistan.

The bank was acquired by the Abu Dhabi Consortium, which is headed
by Shaikh Nahyan Bin Mabarak Al-Nahyan, a prominent business
professional of the ruling family of Abu Dhabi and the Minister of
Higher Education and Scientific Research, (Govt. of UAE). Other
members of the Consortium include Royal Family members and leading
businessmen of UAE. The consortium owns 70% of the shares while
the Govt. of Pakistan has retained the remaining 30% of the banks
shares. The financial and managerial strength of Abu Dhabi Consortium
has greatly enhanced the credibility of the bank in Pakistan and is
reflected in the banks improved performance in all the spheres of
banking.
7

In pursuance of State Bank of Pakistan, directives to all commercial

banks to get themselves rated. Bank Alfalah also undertook the
exercise with PACRA (Pakistan Credit Rating Agency). The premier
rating agency, which is an affiliate of IBCA, rated the bank as AA- for
long term and A1+ for short term. Both ratings are investment grade
and denote very high credit quality and very low expectation of credit
risk. The ratings are applicable to senior unsecured creditors of the
bank.

In the efforts to branch out overseas, the bank is in the process of

acquiring a 25% stake in a banking company in Bangladesh. This
acquisition will not only help the bank promote bilateral trade with
Bangladesh, but also help in the initiation of business with other
countries of SAARC and Far-East region.

The Management

Alfalahs manegement is known for their hard work, product innovation

and dedication to make sure that the development and modernization
process keeps the bank ahead of competition.

With a team of talented, service dedicated professional bankers, Bank

Alfalah commits all of its energies, resources and time to cater to
banking and financial needs of its valued clients.

Following members form the board of directors of Bank Alfalah.

1. Shaikh Nahyan Bin Mabarak Al-Nahyan

(Chairman)

2. Mr. Abdullah Khalil al-Mutawa

3. Mr. Omar Z. Al-Askari

4. Mr. Abdulla Nasser Hawaileel Al-Mansoori

5. Mr. Nadeem Iqbal Sheikh

6. Mr. Ikram Ul-Majeed Sehgal

7. Mr. Mohammad Saleem Akhtar

(Chief Executive)

 Organizational Structure

All the affairs of Bank Alfalah are run by the Board of Directors,
headed by the Chairman and Chief Executive, who are responsible for
all matters happened in the company i.e. profits, plans strategies,
losses and employee satisfaction etc.

The management network can easily be visualized in the organization

chart.

Management Structure

Chairman

Chief Executive Officer

Manager

Senior Authorized Officer

10

Senior Clerk

Junior Clerk

COMPANY ANALYSIS

Operating and Financial Analysis

The bank is currently operating in 38 branches within the country and

has been successful during the year on the further mobilization of
resources by attracting low cost and stable deposits. Bank Alfalah has
shown remarkable progress in their operations within these few years.

Despite notable economic uncertainties, the banks financial strength

has greatly enhanced during the recent years. The successful
expansion program has proved the banks capability and commitment in
comparison with the competition in the industry. It is heartening to
note that in just a few years, which are considered as the infancy
stage in industry, the bank has increased its branch network a lot. The

11

expansion program is strategically important to increase customer

base and help the bank to approach different customer segments

The banks treasury activities comprise of almost client-backed

transactions, emanating largely from foreign trade business. The
Treasury is quite active in both sections of the inter-bank market i.e.
foreign exchange and money market.

The bank continues to maintain positive and healthy liquidity. Their

surplus liquidity is mainly kept in fixed income securities, issued by the
Federal Government of Pakistan that can be easily be converted into
cash, if necessary.

Within the first year (1998) their Deposits grew up by 31%, Advances
by 44%, Trade Finance by almost 100% and the total assets by 35%.
The banks position has still improved in the year 2002.

This situation can be observed in the table on the other page:

12

2001

2000

Growth

(Billions)

(Billions)

Equity

1.631

0.901

51

Deposits

30.207

20.482

47

Imports

26.658

13.228

102

Exports

25.261

16.757

51

Profit before

524.164

400.350

31

310.612

215.350

44

Total Assets

40.098

28.855

39

Advances

20.220

16.357

24

Tax
Profit after
Tax

1. Current Ratio

Current Ratio =

Current Assets

13

Current Liabilities

Year 2000

Year 2001
Rupees in 000

7,390,481

8,090,672

6,654,962

7,731,087

1.11

1.05

2. Debt to Equity Ratio

Debt to Equity Ratio

Total Debt
Share Equity

Year 2000

Year 2001
Rupees in 000

27,136,530

37,938,411

900,680

1,361,292

30.128

27.869

14

3. Debt to Total Assets Ratio

Debt to Total Assets

Total Debt
Total Assets

Year 2000

Year 2001
Rupees in 000

28,854,632

40,098,095

27,136,530
37,938,411

1.06

1.56

Human Resource Analysis

Bank Alfalah believes that humans are their most valuable assets. In
the pursuit to impart sound technical skills to their staff, the Training
and Development Center continues to offer programs in several skill
areas. The banks training and business philosophy is geared to provide
professional, personalized and efficient services to the clients at all
times. The bank is making its own positive contribution to the services
15

culture of the banking system as a whole, providing at the same time a

breakthrough to the customers in terms of choice based on quality.

The bank continues to hire fresh MBAs from prestigious universities in

batches of 20 25 officers, who then undergo rigorous and intensive
training, first at the hands on experience. The Board places utmost
importance to its human asset base.

Technology Analysis

Technology and automation play a pivotal role in the progressive

development of an organization. It has become impossible to control
the operations of a bank effectively in real time situation without the
latest technology.

Technological developments are opening up new vistas of solutions for

distributing traditional financial products. Concurrently, rapid change
in customer preferences has resulted in major shift from manual to
automated services.

Information technology today, is all pervading in the corporate world.

During the past years Bank Alafalah made heavy investments towards
enhancing its capabilities in the area of automation and information
16

technology. The bank plans to achieve total connectivity between

branches by the end of last quarter, 2002. the objectives are to
achieve efficiency in services and to control costs. The bank is working
on a plan to increase their ATM installations and also join a Switch
Group of other prominent banks. In the first phase of this program,
the installation of 27 ATMs is already underway.

ENVIRONMENTAL ANALYSIS

Branch Network

Bank Alfalahs objective has been to expand its branch network to

meet its clients needs. The banks strategy is to maximize the
synergies of branch network through an optimal allocation of financial,
human and other resources in order to meet the dynamic challenges of
present financial environment.

Inherited with a network of 3 branches, Bank Alfalah has escalated it

to 38 branches all over Pakistan. The bank is well positioned and
geographically poised to cater for increased business demands from
its existing and potential clientele. Now there are branches in almost
every major city.

17

The bank, at the end of 2002 plans it, that this figure of 38 branches
would reach to 45.

Following are the cities in which branches of Bank Alfalah are present.

1.

Bahawalpur

2.

Faisalabad

3.

Gujranwala

4.

Gujrat

5.

Hyderabad

6.

Islamabad

7.

Karachi

8.

Lahore

9.

Multan

10.

Mardan

11.

Mingora

12.

Peshawar

13.

Quetta

14.

Rawalpindi

15.

Rahim Yar Khan

16.

Sahiwal

17.

Sukkur

18.

Sargodha
18

19.

Sialkot

Services

The Banks performance over the passing years seems to improve even
when faced by challenging economic conditions. This has been the
result of the banks highly prioritized product portfolio, specifically
tailored to suit the discerning needs and preferences of customers.

Besides being focused on Corporate and Investment Banking business,

Bank Alfalah is now entering into Consumer Banking area. In addition to
tailor made products to meet customers requirements, Bank Alfalah
offers the following services to its clients:

Cash Finance Facility

To meet short-term liquidity requirements, the bank offers Current
Finance Facility to meet working capital requirements. A special
relationship officer is assigned to look after corporate accounts to
ensure smooth and efficient functioning.
Structured Financing
The bank has a dedicated team of thorough professionals providing
tailor made financing solutions. In adherence to requested

19

requirements the team provides cost and time effective solutions

ranging from Equity Consultation, Finance through Capital Markets
in the form of TFCs and Debentures, Underwriting and Warehouse
Indirect Financing through Project Financing and Syndication.

Collection Facility
The bank provides collection facility from any of the 35 branches.
One can transfer funds from collection accounts from any of the
branches to his / her main account on daily basis without any time
delays and at very nominal rates. In places where Bank Alfalahs
branches are not available, the bank facilitates funds transfer
through strategic alliance with their correspondent banks.

Sort Term / Medium Term Fund Placement

To optimize returns on ones surplus funds, the bank offers
competitive rates for which they have products that provide
returns on daily product basis. In addition, profit is paid on a
monthly basis that can boost ones annualized rate of return.

Other facilities are as follows:

20

 Royal Profit (Daily / Monthly Interest earning accounts in

currency)
One of the fastest and most lucrative FCY accounts mechanism
On line banking
ATM
Personal loans
Lockers
Internet banking
Car Financing
Staff Salary Accounts
Personal Relationship Banking

Competitors

Like all others, Bank Alfalah also has a number of competitors

1.

Muslim Commercial Bank

2.

National Bank of Pakistan

3.

Union Bank

4.

United Bank

5.

Allied Bank of Pakistan

6.

Citibank

7.

Habib Bank Ltd.

21

8.

Faysal Bank

9.

Prime Commercial Bank

10.

Platinium Commercial Bank

11.

Saudi Pak Commercial Bank

12.

Indus Bank

13.

Soneri Bank

14.

The Bank of Khyber

15.

Bank of Punjab

16.

Gulf Commercial Bank

17.

Metropolitan Bank

22

MY WORKING IN BANK ALFALAH

As stated earlier, I joined Bank Alfalah for the purpose of internship.
I have worked here as an internee for two months. During my
stay of two months I have worked in different departments. In
these departments, I was assigned different jobs, which helped
me gain some practical experience.

I had to report at 9.00 am sharp and was given a warning that, if I was
late for 3 days, I would be fired. It was applicable for all other
employees. The bank timings were 9.00 am to 5.00 pm for all other
employees, but I am thankful to the manager, who relaxed me and I
was allowed to leave at 1.30 pm due to my classes of the summer
semester.

The overall staff was quite cooperative and friendly, and everyone
treated me very well. But at the same time, there was a very strict
policy about punctuality as well as discipline.

Following are the departments in which I have worked.

23

1. Car Leasing Department

I have worked in this department for almost 25 days. My
supervisors name was Mr. Imran Shami. Here I learned the whole
procedure of getting a car leased.

My duty was to contact clients at the time when their monthly

installment was due. Moreover, Mr. Imran Shami made me deal with
customers who came for the purpose of car financing. I used to give
out a presentation about all this procedure.

In addition to this, I brought 4 interested customers for Bank

Alfalah. All the 4 were friends of mine, who got their desired cars
leased through me.

2. Remittance Department
The next 10 days of my internship were in the remittance
department. Here, my duty was to remit amounts. I was responsible
for remitting amounts to different accounts, which were received
from foreign countries.

24

3. Customer Services Department

I passed my last 15 days in the Customer Services Department.
Here I was given a telephone line and I had to attend phones and
guide people as well as transfer calls to different departments.

Secondly I was assigned the duty of opening new public accounts. I

opened a number of new accounts during my internship program.

25

IDENTIFICATION OF A MAIN PROBLEM

Problem

It is a universal truth that every thing in this world has its own bright
and dark sides. It is the case with Bank Alfalah. During my Internship,
I found a number of good things in addition to a few problems.

The first day I entered the bank I was informed that on being late for
three days in a month, an employee is fired. Every one has to report at
9.00 am sharp. Any one coming late is warned and is fired after three
days.

As mentioned before, I have also worked in the car-financing

department. The second problem was observed there. I noted that
there was no separate phone line for that department. Due to this,
the personnels over there have to wait quite long for the phone line to
be free.

Solution

The problem is quite serious, i.e. the rule is quite rigid and there is no
leniency anywhere. A person can have any problem, and at anytime. No

26

one is informed prior to getting in trouble. If a person gets late, he

should be allowed to explain the reason. If the reasoning is justified,
then he / she should be excused.

The second problem is not quite serious. It can easily be resolved by

adding one more phone line in the department.

27

FINDINGS
Following are the findings that I obtained during my internship.

1. The bank maintains a very strict policy about punctuality.

2. Internees are treated well.

3. The management continuously strives to minimize absenteeism in

employees.

4. Up till now, Bank Alfalah is offering the lowest mark up rates in

car financing.

5. The bank has remarkably escalated from 3 to 38 branches within

Pakistan.

6. The bank has heavily invested in order to enhance its capabilities

in the field of automation and technology.

7. Despite the uncertain economic conditions, the banks financial

position has improved quite a lot.

28

8. The internal computer system is quite slow and often gets

hanged up.

Findings
Following are the findings that I obtained during my internship.
9. The bank maintains a very strict policy about punctuality.
10. Internees are treated very well.
11. Up till now Bank Alfalah is offering the lowest mark up rates in car financing.
12. The bank has remarkably escalated from 3 to 35 branches within Pakistan.
13. The management continuously strives to minimize absenteeism in employees.

Operating and Financial Analysis

The bank is currently operating in 35 branches within the country. Bank Alfalah has
shown remarkable progress in their operations within these few years.
Within the first year (1998) their Deposits grew up by 31%, Advances by 44%, Trade
Finance by almost 100% and the total assets by 35%. The banks position has still
improved in the year 2002.
This situation can be observed in the table below:

2001

2000

Growth

(Billions)

(Billions)

29

Equity

1.631

0.901

51

Deposits

30.207

20.482

47

Imports

26.658

13.228

102

Exports

25.261

16.757

51

Profit before Tax

524.164

400.350

31

Profit after Tax

310.612

215.350

44

Total Assets

40.098

28.855

39

Advances

20.220

16.357

24

Human Resource Analysis

Bank Alfalah believes that humans are their most valuable assets. In order to improve
staffs professional quality and proficiency, the bank conducted on-job training programs
and in house seminars / courses, at one training center. Bank Alfalahs training academy
is equipped with the latest audio-visual training aids, which facilitate in the
discrimination of knowledge and skills.
The bank inducted thirty management trainees, who are being taken through a six-month
comprehensive banking training program. The bank intends to continue, on a need basis,
such programs each year.

Technological Analysis

30

Technological developments are opening up new vistas of solutions for distributing

traditional financial products. Concurrently, rapid change in customer preferences has
resulted in major shift from manual to automated services.
Information technology today, is all pervading in the corporate world. During the year
2000, Bank Alafalah made heavy investments towards enhancing its capabilities in the
area of automation and information technology. The bank is well positioned to meet
client needs, with improved competitive advantage.

Human Resource Analysis

Bank Alfalah believes that humans are their most valuable assets. In order to improve
staffs professional quality and proficiency, the bank conducted on-job training programs
and in house seminars / courses, at one training center. Bank Alfalahs training academy
is equipped with the latest audio-visual training aids, which facilitate in the
discrimination of knowledge and skills.
The bank inducted thirty management trainees, who are being taken through a six-month
comprehensive banking training program. The bank intends to continue, on a need basis,
such programs each year.

Services
Besides being focused on Corporate and Investment Banking business, Bank Alfalah is
now entering into Consumer Banking area. In addition to tailor made products to meet
customers requirements, Bank Alfalah offers the following services to its clients:

Cash Finance Facility

31

To meet short-term liquidity requirements, the bank offers Current Finance Facility to
meet working capital requirements. A special relationship officer is assigned to look after
corporate accounts to ensure smooth and efficient functioning.

Structured Financing
The bank has a dedicated team of thorough professionals providing tailor made financing
solutions. In adherence to requested requirements the team provides cost and time
effective solutions ranging from Equity Consultation, Finance through Capital Markets in
the form of TFCs and Debentures, Underwriting and Warehouse Indirect Financing
through Project Financing and Syndication.

Collection Facility
The bank provides collection facility from any of the 35 branches. One can transfer funds
from collection accounts from any of the branches to his / her main account on daily basis
without any time delays and at very nominal rates. In places where Bank Alfalahs
branches are not available, the bank facilitates funds transfer through strategic alliance
with their correspondent banks.
Sort Term / Medium Term Fund Placement
To optimize returns on ones surplus funds, the bank offers competitive rates for which
they have products that provide returns on daily product basis. In addition, profit is paid
on a monthly basis that can boost ones annualized rate of return.

Other facilities are as follows:

32

On line banking

ATM

Personal loans

Lockers

Internet banking

Car Financing

Staff Salary Accounts

Personal Relationship Banking

Technological Analysis
Technological developments are opening up new vistas of solutions for distributing
traditional financial products. Concurrently, rapid change in customer preferences has
resulted in major shift from manual to automated services.
Information technology today, is all pervading in the corporate world. During the year
2000, Bank Alafalah made heavy investments towards enhancing its capabilities in the
area of automation and information technology. The bank is well positioned to meet
client needs, with improved competitive advantage.

33