Al-Baraka Bank Pakistan Ltd.

Principles of Islamic Business and Finance PUGC Sadaf Bilal
Principles of Islamic Business

and Finance
Assignment: 1
Al- Baraka Bank Pakistan Ltd.
Submission Detail
Date 27 /08/2018
Day Monday
Submitted to: Ms. Sadaf Bilal
Submitted from: Fatima Rasheed
<Semester 6>
Q1.It is sometimes argued the Islamic financial system that the Islamic banks and
financial institutions, working since last three decades, did it bring any change in
the economic system. Why?
Overview to Al Baraka Bank:
With a vision for unrivalled services, dedication to Islamic principles of banking, increasing network
points, and innovative product line, Al Baraka Bank (Pakistan) Limited is committed to the Banking
Industry in Pakistan.
Al Baraka Bank (Pakistan) Limited (ABPL) is the result of a merger between Al Baraka Islamic Bank
Pakistan (AIBP), the branch operations of Al Baraka Islamic Bank (AIB) Bahrain and Emirates Global
Islamic Bank (Pakistan). The merged entity commenced operations on November 1st 2010.
The merger, a first in the Islamic Banking sector in Pakistan, positions Al Baraka Bank (Pakistan)
Limited ABPL to play an important role in further growing an industry, which has witnessed
tremendous growth over the last 5 years.
<Semester 6>
With assets in excess of Rs. 50 billion; a workforce of 1400 professionals and a network of 89 branches
in 36 cities and towns across Pakistan, Al Baraka Bank (Pakistan) Limited is devoted in providing
customers with a range of Shariah compliant products to suit their banking needs.
Faced with growing challenges in this rapidly developing market, Al Baraka Bank (Pakistan) Limited
ABPL strongly relies on its ability to be an effective and efficient market player through renewed focus
on superior customer service, development of Islamic alternatives to conventional financing facilities,
and strict adherence to Shariah rulings and principles.
Al Baraka Bank (Pakistan) Limited, offers a wide array of Islamic financing products such as Murabaha,
Ijarah and Musharakah etc., catering to a diverse cross-section of the economy including the Corporate,
SME and Consumer sectors.
Moreover, various Shariah compliant deposit schemes are also available for customers to invest their
funds in, along with a variety of other ancillary services such as online branch banking, ATM/debit card,
SMS banking, and electronic statement of accounts, safe deposit lockers and utility bill payments.
The Pakistan Credit Rating Agency (PACRA) has assigned long-term and short-term rating entity A,
and A2 respectively. These ratings denote a lower expectation of credit risk emanating from a strong
capacity for timely payments of financial commitments.
<Semester 6>
It is part of Al Baraka Bank (Pakistan) Limited commitment, to put the customer’s values foremost,
hence providing them with a banking solution that is in line with their beliefs. Al Baraka Islamic Bank
is attributed to be the pioneer of Islamic Banking in Pakistan. It has been operating in the country since
1991. During this period of over two decades in the country, the bank effectively developed and
sustained its identity as one of the pioneers in providing Shariah compliant banking products and
services.
Al Baraka (Pakistan) Limited (ABPL) came into being as a result of the first merger in the Islamic
Banking sector of Pakistan. The merger took place in 2010 between the branch operations of Al Baraka
Islamic Bank (AIB) Bahrain, Al Baraka Islamic Bank Pakistan (AIBP) and Emirates Global Islamic
Bank (Pakistan), the operations of the merged entity began. The second merger took place in 2016
with Burj Bank Ltd. By Sept 2016, the Bank has a national presence in Pakistan with a network of 224
branches in more than 100 cities across the country.
ABPL is a subsidiary of the Al Baraka Banking Group (ABG) which is a renowned Islamic
Banking group in the Persian Gulf region. ABG is a Bahrain Join Stock company listed on Bahrain and
NASDAQ Dubai stock exchanges. ABG’s authorized capital amounts to US$1.5 billion, has an asset
base over US$22 billion and total equity amounting to US$2 billion. ABG has a wide global presence.
The banking units and representative offices of the group are present in 15 countries covering 3
continents: Asia, MENA and Europe. As of 2013, Al Baraka has a significant presence in Bahrain,
Algeria, Jordan, Lebanon, Indonesia, Tunisia, Sudan, Turkey, South Africa, Libya, Iraq, Saudi Arabia
and Pakistan. Today the ABG network consists of more than 560 branches worldwide.
<Semester 6>
GROUP HISTORY:
Al Baraka Banking Group (ABG) is not a new Corporation or a company without history, background,
or expertise in the field of Islamic Finance. Al Baraka Banking Group (ABG) represents one of the
oldest, most respected, and highly experienced Islamic Financial Institution in the world today.
Al Baraka Banking Group ABG is one of the largest Islamic banking and financial services
organizations in the world. The international network of Al Baraka Banking Group comprises of 10
Subsidiaries with almost two hundred branches in 10 countries in Asia, the GCC region, the Middle East
and Africa. Al Baraka Banking Group (ABG) was incorporated in the Kingdom of Bahrain on 27 June
2002, and it operates under a wholesale Islamic Investment Banking license with an authorized capital
of US$ 1.5 billion.
The Group has become a reality, and an established entity that has developed its own philosophy,
systems, procedures and organizational structures, and succeeded in presenting a viable Islamic banking
alternative to conventional banking.
The joining of several

constituent banks under a
single holding company,
Al Baraka Banking
Group, has created a
Group whose financial
strength is greater than
the sum of its parts. Al-
Baraka Banking Group is
now the proud holder of
its shareholders’ interests
in 10 geographically
diverse subsidiaries incorporated in Algeria, Bahrain, Egypt, Jordan, Lebanon, Sudan, South Africa,
Tunisia Turkey, and Pakistan.
Al Baraka Banking Group (ABG) is a Bahrain Joint Stock Company, listed on Bahrain and NASDAQ
Dubai stock exchanges. It is a leading International Islamic bank with Standard & Poor’s long and short-
term credit ratings of BBB- and A-3 respectively and offers retail, corporate and investment banking,
and treasury services strictly in accordance with the principles of Islamic Shariah. The authorized capital
of Al Baraka Banking Group is US$ 1.5 billion; asset base of US$ 16 billion and total equity of US$ 1.8
billion. The group has Banking units and representative offices in 13 countries spanning from Europe to
MENA and Asia, with a network exceeding 400 Branches.
<Semester 6>
The Group has a wide geographical presence in the form of subsidiary banking Units and representative
offices in twelve countries, which in turn provide their services through more than 400 branches. These
banking Units are Jordan Islamic Bank, Al Baraka Islamic Bank, Al Baraka Bank Pakistan Limited;
Banque Al Baraka D'Algerie, Al Baraka Bank Sudan; Al Baraka Bank Limited, South Africa; Al Baraka
Bank Lebanon; Al Baraka Bank Tunisia; Al Baraka Bank Egypt; Al Baraka Turk Participation Bank, Al
Baraka Bank Syria and representative offices in Indonesia and Libya (under formation).
Al Baraka was named the 'Best regional Bank' at the Annual Islamic Business and Finance
Awards Ceremony, Dubai (26 December 2010)
ABG won the Compliance and Corporate Governance Award at the Hawkamah Union of
Arab Banks 2010 (1 November 2010)
Subsidiary Banking units of ABG:
ABG Representative
Office: Indonesia
Jordan Islamic Al-Baraka Egyptian Saudi Banque Al Al Baraka Bank

Bank: Jordan Islamic Bank: Finance bank: Baraka D’ Sudan: Sudan
Bahrain Egypt Algeria: Algeria
Bank Et- Al Baraka Al Baraka Al Baraka

Tamweel Al Bank limited: Bank Bank Turk
Saudi al South Africa Lebanon: Participation
tunisi: Tunisia Lebanon Bank: Turkey
Al Baraka Al Baraka Bank

Bank Pakistan Syria (under
Limited establishment)
<Semester 6>
History Created By Bank:

Al Baraka Bank (Pakistan) Limited (ABPL) have assets in excess of Re. 50 billion, a workforce of 1400
professionals and a network of 89 branches in 36 cities and towns across the country. Al Baraka Bank
(Pakistan) Limited (ABPL) commenced operations from October 29, 2010 and consequently, all
branches of Al Baraka Islamic Bank Pakistan (AIBP) and Emirates Global Islamic Bank and re-branded
as Al Baraka Bank (Pakistan) Limited (ABPL). The merger, a first in the Islamic Banking sector in
Pakistan, positions Al Baraka Bank (Pakistan) Limited to play an important role in further growing an
industry which has witnessed tremendous growth over the last 5 years. Substantial capital resources,
combined with a nationwide branch network enabled Al Baraka Bank (Pakistan) Limited to provide a
full range of Islamic banking services, supported by the experience and expertise of the parent company,
Al Baraka Banking Group.
The operations of Al Baraka Islamic Bank Pakistan dates back to 1991, and at the time of merging its
operations it had 29 branches across Pakistan, an asset base of Re. 31 billion and profit before tax of Re.
168 million.
Emirates Global Islamic Bank began its operations in Pakistan in 2007 with principal shareholders being
Emirates Investment Group (through Emirates Financial Holding Company) and Al Rajhi Investment
Group (through Mal Al Khaleej Investment Company). At the time of merger, Emirates Global Islamic
Bank had a 60-branch network located in 31 cities and towns throughout the country.
BUSINESS PHILOSOPHY
It means that in prioritizing values and raising them above the mere attainment of corporate size and
product range and delivery, Al Baraka Bank (Pakistan) Limited believes that we will expand naturally
and as a matter of course, as it build the kind of relationships with its customers which are based on true
partnership with them.
Al Baraka Bank (Pakistan) Limited believes that banking has, or ought to have, an essential role to play
in society, that place an incredible responsibility of stewardship for the resources as bankers. To meet
this responsibility and use the resources wisely, Al Baraka Bank (Pakistan) Limited relies on Shariah
principles to get guidance as it participate in its customers' successes, sharing in the social development
of families, businesses and society at large.
By 'partnership', therefore, be meaning that our success and that of each of our customers are as tangled
as our jointly held beliefs. Taking part in the joint effort is therefore our reward. We see money as a
means to Capitalize on opportunities and create a better society for all of us. Money becomes the
medium by which we enter into new opportunities together and take part in common effort for mutual
reward. Al Baraka Bank (Pakistan) Limited calls this concept: 'Beyond Banking'
<Semester 6>
CORE VALUES
PARTNERSHIP:
Our shared beliefs create strong bonds that form the basis of long-term relationships with
customers and staff
DRIVEN:
We have the energy and perseverance necessary to make an impact on our customers' lives
for the greater good of society
NEIGHBORLY:
We value and respect the communities we serve, our doors are always open, and our
customers always experience a warm-hearted, hospitable welcome and accommodating
service.
PEACE OF MIND:
Our customers can rest assured that their financial interests are being managed by us to the
highest ethical standards.
SOCIAL CONTRIBUTION:
By banking with us, our customers make a positive contribution to a better society - their
growth and our growth will benefit the world around us.
<Semester 6>
Islamic Finance, after a steady growth initially, is now experiencing a progressive upward trend in the
Pakistani banking sector
From a meager 0.3% share in 2003, Islamic banking institutions (IBIs) have now captured around
10.4% of the total asset pie in the banking industry as of March 2015.
The core philosophy of ABPL is compliance with the fundamental principles of Shariah. The entire
banking activities are closely monitored and regulated by a Board of Shariah Advisors at the
headquarters in Bahrain as well as a Shariah Advisory Committee in Pakistan.
All policies, procedures, products and services of ABPL are approved by the bank's Shariah Board
headed by Justice (R) Khalil-ur-Rehman. Mr. Rehman has served as Chairman of the Shariat Appellate
Bench of the Supreme Court of Pakistan and has been the Rector of the International Islamic University,
Islamabad. Justice Khalil is also assisted by Mufti Abdullah Najeeb.
Al Baraka’s customers range from individuals and retails to corporate, SME and consumer categories
various financing products are available for investments such as Murabaha, Ijarah, Musharakah and
Islamic Export Refinance etc. Furthermore, a range of Shariah compliant deposit schemes are offered.
Vision and Mission of ABPL

Vision Mission
To be a leading and a diversified international We strive to be a premier Regional Islamic bank,

Islamic bank, offering a wide range of quality dedicated to the Economic and social Development
products and services and forming strategic of our target market, maximizing our clients and
alliances for a competitive edge shareholders’ value and focusing on the human
resource development in an environment of
creativity and innovation
<Semester 6>
MARKET STANDING
With a vision for unrivalled services, dedication to Islamic principles of banking, increasing network
points, and innovative product line, Al Baraka Bank (Pakistan) Limited is committed to the Banking
Industry in Pakistan.
Faced with growing challenges in this rapidly developing market, ABPL strongly relies on its ability to
be an effective and efficient market player through renewed focus on superior customer service,
development of Islamic alternatives to conventional financing facilities, and strict adherence to Shariah
rulings and principles.
The Pakistan Credit Rating Agency (PACRA) has assigned long-term and short-term rating entity A,
and A1 respectively. These ratings denote a lower expectation of credit risk emanating from a strong
capacity for timely payments of financial commitments. Moreover, a "Positive" outlook is assigned to
the ratings. These ratings denote a low expectation of credit risk emanating from a strong capacity for
timely payment of financial commitments. The ratings reflect Al-Baraka Bank's association with a
strong Middle Eastern banking group – Al-Baraka Banking Group. The ratings incorporate the impact of
positive synergies emanating from the recent merger (between Emirates Global Islamic Bank and
Pakistan branches of Al-Baraka Bank) in terms of common operating platform, improved profile, and
extended market outreach. While making swift progress in the integration process, the management is
well geared to benefit from the expanded franchise by implementing a sound business plan.
<Semester 6>
CORPORATE PROFILE
BOARD OF DIRECTORS:
Mr. Adnan Ahmed Yousif Chairman

Mr. Tariq Mahmood Kazim Deputy Chairman
Mr. Shafqaat Ahmed Chief Executive Officer
Mr. Abdulrahman Shehab Director
Mr. Nadeem Amjad Khan Director
Mr. Syed Tariq Hussain Director
Mr. Abdul Ghaffar Fancy Director
Mr. Federico Tauber Director
Mr. Tariq Hamid Independent Directror
Mr. Salman Ahmed Independent Directror

Mr. Imtiaz Ahmad Pervez Independent Directror
Board Executive Committee (BEC):
Mr. Tariq Mahmood Kazim Chairman

Mr. Tariq Hamid Member
Mr. Salman Ahmed Member
Mr. Abdul Ghaffar Fancy Member
Mr. Nadeem Amjad Khan Member
Mr. Shafqaat Ahmed Member
Mr. Muhammad Siddique Secretary of BEC
HR Board Remuneration Committee (HRRC):
Mr. Adnan Ahmed Yousuf Chairman
Mr. Tariq Mehmood Kazim Member
Mr. Abdul Ghaffar Fancy Member
<Semester 6>
Mr. Federico Tauber Member
Mr. Mukkarram Jafri Secretary of HRRC
Board Audit Committee (BAC):
Mr. Imtiaz Ahmad Pervez Chairman

Mr. Abdulrahman Shehab Member
Mr. Salman Ahmed Member
Mr. Hanif Asharf Secretary to BAC
Board Risk Committee (BRC):

Mr. Tariq Hamid Chairman
Mr. Imtiaz Ahmad Pervez Member
Mr. Nadeem Amjad Khan Member
Mr. Syed Tariq Husain Member
Mr. Federico Tuaber Member
Branch Manager: Mr. Muhammad Arshad

Ijarah Financing Consultant: Mr. Hafiz Ullah Khan
<Semester 6>
Objectives of ABPL
To maintain the highest international standards of corporate governance and regulatory

compliance
To utilize the group’s geographical presence to distribute its products and services and promote
cross border services
To provide innovative and high quality research and development into Islamic financial products
which comply fully with the principles of Shariah Law and Islamic values, for the benefit of our
customers
To enhance shareholder value whilst pursuing a strategy of business growth and geographical
expansion
<Semester 6>
Products of ABPL
Al Baraka Bank (Pakistan) Limited in Pakistan, offers a comprehensive range of banking products and
services, to suit and serve customers in individual, retail, corporate, SME and consumer categories;
Al Baraka basic banking (Current account)

Khazana Account (Saving account)
Sarpast Family Takaful
ABPL auto Ijarah
Al Baraka Mahana Baraka
Al Baraka Mahana Amdani
Tifl- Young Savers Account
Housing Musharakah
Car Ijarah
<Semester 6>
1- Al Baraka Basic Banking (Current Account):

Salient features Islamic Concept
A Pak rupee current account with n The ABPL Basic Banking Account is based on the
minimum balance requirements Islamic principle of Qarz, whereby the customer is
No profit will be paid to the depositor on the lender and the bank is the borrower. Customer
the balance maintained in the account funds are invested with utmost care in the Halal
Can be opened with as low as Rs. 100/- business ventures only, and are payable, on
No minimum balance requirement and no demand, with neither any addition or penalty
penalty for low balances
Unlimited and free access to cash
withdrawals through ABPL’s ATM
network
Transactions on non-ABPL ATMs will be
charged as per the schedule of charges
Statement of account will be issued once a
year
Other services will be provided as per
prevailing schedule of charges
Additional benefits such as e-statement,
24/7 phone banking, SMS banking
2- Khazana Account (Saving Account):

Minimum initial investment of Rs. Al Baraka Khazana account is based on the Islamic
100,000/- concept of Mudarabah. Under this arrangement the
Available only in Pak Rupees customer is Rab-ul-Maal (Investor) and the bank is
Tiered profit structured Mudarib (Fund Manager). Customer deposit is
Unlimited deposits and withdrawals invested in profitable business venture which are
Profit is paid on monthly basis and legal and Shariah compliant. The profit/loss is
calculated on the daily product basis shared on the predetermined rations. As fund
Enjoy higher profits on higher balances manager, the bank is entitled to a part of the profit,
Additional benefits such as e-statement, whereas profit distribution amongst the depositors
24/7 phone banking, SMS banking, and shareholders is made according to the
ATM/Debit card weightage assigned to their investment at the
beginning of each month
<Semester 6>
3- Sarpast Family Takaful:

Regular contributions invested in a Al Baraka in association with Pak-Qatar Family
diversified portfolio of Islamic funds Takaful limited is offering an exclusive product
ranging from Sukuk to Mutual Funds, “Sarpast-Family Takaful Plan”. Sarpast is a
based on the customer’s risk appetite Shariah compliant savings and investment plan
Flexible plans in terms of frequency of exclusively designed to cater to your Takaful
payment needs.
Takaful cover allows family to receive
funds, in case of death of the participant.
Al Baraka’s Sarpast, safeguards your
future, while giving you the financial
freedom you deserve. It helps you plan
necessary events of your life from marriage
to education, retirement to vacations or
pure savings in accordance with the Islamic
principles
4- ABPL Auto Ijarah:
Salient feature Islamic Concept

Shariah Compliant Al Baraka products and services are approved by
Quick processing the bank’s Shariah advisor Justice® Khalil-ur-
Most affordable rentals Rahman Khan, who has served as chairman on the
No upfront Takaful(Islamic insurance) Shariat Appellate Bench of the Supreme Court of
charges Pakistan and has been the Rector of the
No upfront registration charges International Islamic University, Islamabad. He is
No upfront charges before delivery of also currently serving as a member of the Shariah
vehicle Board of the State Bank of Pakistan
Payable in tenure of 24 to 60 months
Minimum processing charges
It is our commitment to put our customer’s
value foremost and providing them with
the banking solutions that are in line with
Shariah
<Semester 6>
5- Al Baraka Mahana Baraka:
Salient features Islamic concept

To qualify for Al Baraka Mahana Baraka Al Baraka Mahana Baraka Account is offered on
Account profit rate minimum balance of the basis of Mudarabah principles of Islamic
PKR 10,000 and maximum of PKR 5.0 Banking. Mudarabah is a special kind of
Million is required to be maintained during partnership where one partner gives money to
the month otherwise normal savings another for investing in Shariah compliant
account rate will be applicable avenues. The investment comes from the first
Profit calculation on daily balance and partner who is called Rab-ul-Maal, while the
credited in the account on monthly basis management and work is an exclusive
Free first al Baraka Union Pay Debit card responsibility of the other, who is called Mudarib
Free e-statement The bank will announce weightage and profits
Free phone banking services through which sharing ratios 3 days before the beginning of the
you can get pay orders, cheque books, stop month. The bank will share the profit at the gross
payments, ATM card replacement, income level and will subsequently credit the
duplicate bank statements at an excellent proportionate profit in the customer’s account at
discount the end of the month. In case of loss, the customers
All other charges as per bank’s schedule of will bear the loss as per ratio of his investment
charges Latest profit sharing ratios and weightage are
available on our website or can be obtained from
any branch of Al Baraka bank
6- Al Baraka Mahana Amdani:

Minimum investment/ saving Rs. 50,000/- Al Baraka Mahana Amdani is based on the Islamic
Profit calculation: monthly concept of Mudarabah. Under this agreement the
Profit payment options: monthly customer is Rab-ul-Maal. Customer deposit is
Available in Pak rupees invested in profitable business ventures which are
Tenure: 1 year to 5 years legal and Shariah compliant. The profit/loss is
Free ATM/Debit card with unlimited shared on the predetermined ratios. As a fund
access through ATMs nationwide manager, the bank is entitled to a par of profit,
Additional benefits such as e-statement, whereas profit distribution amongst the depositors
24/7 phone banking, SMS banking and shareholders is made according to the
weightage assigned to their investment at the
beginning of each month
<Semester 6>
7- Tifl- Young Savers Account:
Specially designed for children and Al Baraka Tifl-Young Savers Account is offered
youngsters to enjoy the benefits of Islamic on the basis od Mudarabah principles of Islamic
banking Banking. Mudarabah is a special kind of
Tifl- Young Savers Account can be opened partnership where one partner gives money to
for any child and teenager aged between another for investing in Shariah compliant
one day and 18 years avenues. The investment comes from the first
Based on Islamic principles of Mudarabah partner who is called Rab-ul-Maal, while the
and under the supervision of proficient management and work is an exclusive
Shariah Committee responsibility of the other, who is called Mudarib
Available in local currency The bank will announce weightage and profits
Profit calculation on daily balance basis in sharing ratios 3 days before the beginning of the
your account month. The bank will share the profit at the gross
Profit accredited to your account on income level and will subsequently credit the
quarterly basis proportionate profit in the customer’s account at
No limit for minimum or maximum the end of the month. In case of loss, the customers
balances will bear the loss as per ratio of his investment
Unlimited deposits and maximum of 2 Latest profit sharing ratios and weightage are
withdrawals (over the counter) are allowed available on our website or can be obtained from
with in a calendar month any branch of Al Baraka bank
Free Al Baraka Union pay Debit card
8- Housing Musharakah:
ABPL also provides the facilities of Housing Musharakah to his customers. ABPL contribution is 80%
of total investment and client can contribute 20% of the investment. The employee can pay rental and
installments to bank in order to get total share of the property or land which they jointly buy. The period
is from 1 to 15 years.
9- Car Ijarah:
ABPL provides the facility of car Ijarah/ leasing to his customer. ABPL provided fund up to 4 million to
his customer for the period of 2 to 5 years. No interest concept is involved; therefore profit margin is not
announced before transaction finance on the concept of asset based financing. Therefore, there is no
chance of default for bank.
<Semester 6>
Al Baraka Bank Management Hierarchy
Country Head
North Region Center Region South Region
Regional Manager Branch Manager
Operational Foreign Trade Credit &Marketing

Manager Manager Manager
Assistant Assistant Officer

Manager Manager
A/C
Opening
Officer
Cash
Officer
Clearing
Officer
<Semester 6>
SWOT ANALYSIS OF AL BARAKA BANK (PAKISTAN) LIMITED
SWOT stands for Strength, Weaknesses, Opportunities and Threats. SWOT is useful tool for providing a
framework for analysis of an organization. It is widespread approach to make assessments in terms of
internal and external environment of the organization and to formulate strategies by analyzing its
internal strengths and weaknesses, external opportunities and threats.
SWOT analysis for Al Baraka Bank (Pakistan) Limited is as follow:
STRENGTHS
Commitment To Islamic Shariah
Al Baraka Bank (Pakistan) Limited is continuously striving to develop and an integrated Islamic
Financial System. Compliance with the rules and principles of Islamic Shariah is the core of the banking
and financial activities of the Bank. To this end, Al Baraka has successfully sought the advice and
expertise of Shariah advisors acclaimed for their knowledge from all over the Islamic world to monitor
its performance. Its Shariah Advisory Board regularly scrutinizes the Banks’ activities and operations.
People are
Concept Of Islamic Banking

The concept of Islamic banking is in these days vastly promoting and being a Muslim, transferring their
accounts from conventional banks to Islamic banks.
Experienced And Qualified Staff

The staff/personnel of the bank are qualified and experienced. Many of the bank officials have up to date
knowledge and experience in the fields of management, banking law and practice. The senior
management in the organization is very much competent and experienced; they successfully handle
different internal and external affairs.
Good PR With Customers
The relationship of the manager and the other staff of the organization are good with the customers,
which results in good will and loyalty of the customers towards the organization.
<Semester 6>
Job Satisfaction At All Levels
Job satisfaction is one of the important factors for the employees to be motivated. The people in the
bank under consideration were found highly satisfied with their jobs.
Quarterly Performance Appraisal
Performance appraisal is the way by which one can evaluate the employee’s performance; it results in
the enhancement of the organization’s overall performance. The performance appraisal is done fairly on
quarterly basis in this organization, which results in better performance.
Frequent Training
Al Baraka Bank (Pakistan) Limited frequently arranges training programs not only for senior
management but also for staff of all levels of bank
Friendly Environment
The environment of the organization is very friendly. People over here are very cooperative, not only
with the customers but among themselves as well.
Hiba
Al Baraka Bank (Pakistan) Limited offers 2% to 3% extra profit as Hiba (gift) on deposit of amount
more than three million to the holder of PLS Saving account.
Phone Banking
Al Baraka Bank (Pakistan) Limited is one of the few banks that are offering facility of phone banking.
Customers can get information about last five transactions and current account balance. Besides phone
banking Al Baraka Bank (Pakistan) Limited is also offering SMS service to its customers. Through this
service bank sends SMS to customer if any transaction (of the amount limit mentions in SMS banking
form by customer) takes place in his account.
Online Banking
The bank is giving facility of online banking to its valuable customers. One can access to his account 24
hours a day, 7 days a week from any of ABPL branches countrywide. Customers can transfer funds or
even pay bills even if it is a holiday. No matter where account holder is in the country and in which
<Semester 6>
branch he is maintaining his account, he can encash cheque or deposit cash into his account or any other
account in Al Baraka Bank (Pakistan) Limited branches located in any cities. Similarly, account-to-
account Funds Transfer facility is also available for instant remittance. They can also open account
through website of Al Baraka Bank (Pakistan) Limited.
WEAKNESSES
No HR Department Level At Zone And Branch Level
Human resource department is one of the foremost requirements of any organization of this age. Al
Baraka Bank (Pakistan) Limited, though contain a HR division at headquarter but there are no sub
divisions at the provincial or branch level. Therefore, when different problems related to Human
Resource are raised, they are left unaddressed.
Centralized Decision-Making
Al Baraka Bank (Pakistan) Limited is centralized bank which results in the loss of confidence of
the employees over the management, employees may not want to follow the dictates, rules and
regulations.
Less Number Of Branches
Al Baraka Bank (Pakistan) Limited has less number of branches in Pakistan as compared to many other
foreign banks. The bank has network of only 89 branches in 36 cities and towns across Pakistan.
Lengthy Recruitment Process

The recruitment process is quite lengthy which can discourage the new comers. Therefore, there is a
need to shorten the whole process.
No Job Rotation
There is no job rotation in the bank and one employee is specialized only in specific field. In the absence
of one employee, the other cannot properly deal with his customers. The employees of operation
department do not know about working of credit department and vice versa. There are less number of
employees in any department so this may disturb the operations of that department.
<Semester 6>
Lack Of Marketing Effort

The bank does not promote its corporate image, services, etc on a competitive way. Hence lacks far
behind in marketing effort. A need for aggressive marketing is there in the era marketing in now
becoming a part of every organization.
Debt Burden
Al Baraka Bank (Pakistan) Limited is highly leveraged bank. It is obvious from its debt ratio that is
continuously increasing. Debt ratio of 2008 shows to pay total liability of Rs. 0.754 bank has Rs.1 in
total assets. Debt ratio of 2009 shows to pay total liability of Rs.0.823 bank has Rs.1 in total assets. Debt
ratio of 2010 shows to pay total liability of Rs. 0.899 bank has Rs.1 in total assets. It means that bank
must take steps to improve its solvency as to avoid inability to pay debts.
Unfavourable Short Term Liquidity
Short-term liquidity of Al Baraka Bank (Pakistan) Limited in current year is not favorable. As in 2010
working capital is -5,975,972. Bank should try to improve its liquidity so that it may become able to pay
short-term obligations as they come due.
Loss
Al Baraka Bank (Pakistan) Limited is currently bearing loss, as Emirates Global Islamic Bank was
merged in Al Baraka Islamic Bank. This loss is due to Emirates Global Islamic Bank’s net loss that is
carry forward. However Al Baraka Bank (Pakistan) Limited will overcome this weakness when all loss
will be covered by next few years from the income of bank.
OPPORTUNITIES
More Qualified People In The Market

Due to the increase of interest of people in banking and business field, many business institutions have
been established, which produces a good lot of qualified and competent professionals. Therefore, the
bank can hire more people that are qualified.
Effective Utilization Of Internal Human Resources
People working in the bank get use to the norms and values of the organization, so their experience can
be utilized within the organization whenever required.
<Semester 6>
Training Can Enhance The Employee’s Skills

Training and development are the most important functions of human resource management. Properly
trained staff can add to the value of the organization.
Aggressive Marketing
Al Baraka Bank (Pakistan) Limited is surrounded by many competitors; it has an opportunity to do

aggressive marketing to promote its business and attract large number of potential customers.
THREATS
Increase In Competition
The increasing competition in local as well as national and multinational level also lower down the
profitability of the bank and compelling the bank to use a large amount of funds to meet out
competition.
Uncertainty About Future Change

An uncertainty about the future results in dissatisfaction and de-motivation of the employees, which is a
serious threat to the bank.
Economic Conditions
World economic recession results in permanent threat of future risk and loss for the bank. Pakistan is
already facing economic issues like inflation, poverty and trade deficit. Current financial crisis put
negative impact on bank’s profit.
Political Instability
Political instability of Pakistan badly influences the economy of country. It effects investment in
businesses and hence proof as a risk for the bank. Domestic and foreign investment is very low because
of law and order situation.
<Semester 6>
DEPARTMENTS
Al Baraka Bank (Pakistan) Limited has the following departments:
Account opening department

Credit department
Clearing department
Remittance department
Cash department
ACCOUNT OPENING DEPARTMENT
1) RELATIONSHIP BETWEEN CUSTOMERS AND BANK:
To establish relationship between customer and bank, due consideration should be given to following
factors:
1. Prospective customer is suitable to maintain and conduct a banking relationship.

2. Customer is the person or entity that he/ she claim to be establishing his/ her identity.
3. Proposed relationship does not violate bank’s own policy, any local laws and State Bank of
Pakistan‘s laws and regulations as laid down in Prudential regulations.
Al Baraka bank makes every effort to determine identity of every prospective account holder. Proper
identification from the new account holder will be obtained. Account can only be opened if signature of
introducer on the account opening form has been verified and found correct.
If Manager Operation (MO) is fully satisfied with the background of customer, he may authorize the
opening of account before the verification process is completed at his judgment. Account status should
be marked “Debit Block” in Auto I Banker until the verification process is completed to the satisfaction
of Branch Manager (BM). In order to prevent fraudulent reference, bank obtains independent
confirmation regarding the genuineness of introducer or customer by sending a special letter of thanks to
confirm address provided to branch.
BASIC ACCOUNT DOCUMENTATION:
Basic account documentations to open and operate any account are following:
Account opening form

Specimen signature card (S S Card)
Copy of terms and condition
<Semester 6>
2) ZAKAT DECLARATION:
If customer does not want that Al Baraka bank deduct Zakat from his / her account, (being a non-
Muslim or pertaining to any sector of Islam for which Zakat is exempted.) is required to submit “Zakat
declaration certificate” duly attested on stamp paper in original or in form of attested photocopy.
3) INTRODUCTION OF ACCOUNT:
Introducer should be satisfactory customer. It is essential to make inquiries about credibility of
prospective customer and to check the genuineness of introducer. Any carelessness in obtaining a proper
introduction constitutes “negligence” and may lead to serious complication and risks for the branch and
bank in future.
Another purpose of introduction is to ensure that the new customer is a suitable person to be entrusted
with a cheque book, which should not be issued before all account-opening formalities, has been
completed.
Staff member should be made fully aware of their responsibility in acting any introducer of new
accounts and thus should not introduce a person to bank who is/are not known well to them. Irrespective
of introducer, being present at the time of account opening customer should be properly interviewed and
identified.
In normal course and practice, suitable introduction can be obtained from:
1) Another account holder of bank who is of good standing

2) Another branch where prospective customer already maintains an account
3) Staff members of Al Baraka Bank (Pakistan) Limited
Under special circumstances, introduction can also be obtained from the following, although they may
have not an account with bank.
4) Customer employer if he is of good standing

5) Another bank of repute
In order to prevent fraudulent introduction bank sends letter of thanks introducer and customer and
address verification can be performed through other sources such as utility bills and credit card bills etc.
4) KNOW YOUR CUSTOMER (KYC) AND ANTI-MONEY LAUNDERING:
When account opening utmost care is taken to ensure that know your customer (KYC) rules and
requirements are strictly adhered to.
4.1) In view of increased awareness about use of banking sector for illegal and unlawful money
laundering activities, anti-money laundering measures have gained tremendous importance.
4.2) Money laundering activities includes terrorist financing, transfer of illegal or ill-gotten money and
similar white-collar crimes.
<Semester 6>
4.3) Keeping in the view the importance of KYC or customer due diligence policies and to ensure
transparency in banking transactions while establishing new relationships with customers, and for
maintaining relationships with existing customers following guidelines regarding KYC are followed by
Al-Baraka Bank (Pakistan) Limited :
a) Bank obtains introduction for new account to assess the prospective customer’s integrity,
respectability and nature of business.
b) Branch obtains evidence of identity of all account holder and identity of controlling person
relating to account in case of minor account. At the time of account opening branch considers
factors such as customer’s background, country of origin and nature of business etc.
c) Branch takes KYC or customer due diligence as an on-going process and not a onetime exercise
at the time of entering into a formal relationship with customer by:
Monitor account and transaction on an on-going basis.
Update customer information and maintain proper record of customer identification.
Ascertains staff training and development requirements.
d) Due diligence measures are applied in following cases:
In case of high risk customers, such as those belonging to countries where KYC and
money laundering regulations are lenient ( e.g. Myanmar, Nauru, Cook Island etc)
Customer with high value items and high net worth customers with unclear identifiable
source of income.
5) REGULATIONS BY STATE BANK OF PAKISTAN:
State Bank of Pakistan (SBP) regulates opening of account. While opening account of customers, staff is
advised to strictly adhere to prudential regulations (M-1 to M-5) of State Bank of Pakistan as amended
from time to time. Staff is advised to follow the documentation required for the opening and
maintenance of various types of accounts, which are well established in Prudential Regulation M-1.
6) SPECIAL TYPES OF ACCOUNTS AND THEIR OPERATIONS:
Al-Baraka Bank’s (Pakistan) Limited policies regarding the types of accounts that may be opened are
established by the Country Operations Department. Certain types of accounts such as trust account,
account of executor or administrator, account of liquidators and account of local authorities or
municipal corporations, partnerships, clubs and society’s accounts are opened only with the specific
approval of Country Operations Office at head office.
To protect and prevent Al-Baraka Bank (Pakistan) limited from becoming involuntarily involved in
money laundering and also due to stress upon by State Bank of Pakistan as per prudential regulations,
the following guidelines are followed:
a) Establish the identity or background of new customer and the nature of business.
b) Monitor and take appropriate action in case of unusual transaction.
<Semester 6>
c) In case of unusually large initial deposit, seek explanation from customer about source of
funds.
d) Customer’s previous history with other banks is sought by branch.
7) TYPES OF ACCOUNTS AND THEIR OPERATIONS:
Individual Account
Joint Account
Sole Proprietor
Account of Minor
Illiterate or Blind person
Parda Nasheen ladies
Partnership
INDIVIDUAL ACCOUNT:
Individual account holder has choice of either opening either a Profit and Loss Saving Account or a
Current Account.
DOCUMENTS REQUIRED:
a) Computerized National Identity Card (CNIC) or valid passport of individual duly attested by a
gazetted officer or an officer of bank.
b) In case of salaried person an attested copy of his service card, latest salary slip or certificate from
employer.
c) In case of business man National Tax Number (NTN) Certificate or request to open account on
letter head of business.
d) In case of illiterate person, two passport size photographs of new account holders besides taking
his right and left thumb impression on signature specimen card. One photograph is pasted on
signature specimen card and second on account opening form.
e) Know Your Customer (KYC) of customer.
It is ensured that signature or thumb impressions of individual account holder are obtained on all
required places at account opening form and signature specimen card. Moreover, all necessary copies of
documents are obtained from account holder only after examining the originals and they are stamped as
“Original Seen”.
<Semester 6>
JOINT ACCOUNT:
An account in name of one or more persons (with the maximum of four joint account holder) other than
partners is called joined account.
a) Account opening form contains provision for customer to indicate the authority of each party to
the account and the effect in case of death of any of account holders will have upon the account.
b) Specific instructions with regard to operations of account are mentioned on signature specimen
card. For repayment of balance of joint account holder to either party or survivor, signature
specimen card is marked to reflect the arrangement of such an operation on the account.
c) For marking of stop payment, any one of joint account holder can instruct the bank. However,
for revocation of stop payment instruction, all authorized signatories will have to sign the request
letter to release the stop payment.
DOCUMENTS REQUIRED:
The documentation required for joint account is the same as required for individual account holder
except for the fact that details pertaining to all account holders are obtained.
a) Computerized National Identity Card (CNIC) or valid passport of each individual duly attested
by a gazetted officer or an officer of bank.
b) In case of salaried persons an attested copy of their service card, latest salary slip or certificate
from employer.
c) In case of businessmen National Tax Number (NTN) Certificate or request to open account on
letterhead of business.
d) In case of illiterate persons, two passport size photographs of each joint account holders besides
taking their right and left thumb impression on signature specimen card. One photograph is
pasted on signature specimen card and second on account opening form.
e) Know Your Customer (KYC) of all joint account holders.
<Semester 6>
SOLE PROPRIETOR:
a) Account opening form has provision for declaration by the customer to the effect that he or she is
sole proprietor of business and accepts all liabilities in respect of firm.
b) Where it is legal requirement for sole proprietorship to be registered with Chamber of Commerce
a certified true copy of registration certificate may be obtained compared with the original and
retained on record. Manager Operation authenticates the verification of the document.
c) In the event of death of sole proprietor all operations on the account are stopped.
DOCUMENTS REQUIRED:
a) Computerized National Identity Card (CNIC) or valid passport of sole proprietor

b) Declaration on stamp paper (of Re. 100) or National Tax Number (NTN) Certificate
c) Request to open account on letterhead of business.
ACCOUNT OF MINOR:
a) Branch of Al-Baraka Bank (Pakistan) Limited may opens an account in the name of a minor. The
minor’s natural parent or guardian can operate the account. The account is titled as “minor
account”.
b) Due care is exercised in the operation of minor account to ensure that it always contains credit
balance.
c) No credit is extended to a minor account.
d) Date of birth of minor and date when he/ she attain maturity will be recorded on the account
opening form and signature specimen card. In the event of a minor attaining age of maturity,
existing account will cease to function and entire credit balance will be transferred to new
account.
DOCUMENTS REQUIRED:
a) Form-B
b) Birth certificate
c) Two valid passport size photographs of minor
Following documents are required for guardian:
<Semester 6>
a) Computerized National Identity Card (CNIC) or valid passport of parents or guardian.

b) In case of salaried person an attested copy of guardian’s service card, latest salary slip or
certificate from employer.
c) In case of business man National Tax Number (NTN) Certificate or request to open account on
d) A guardianship letter is also required when guardian has been appointed by the court, which
should be examined by the legal counsel and its copy is retained with account opening form as
permanent record.
ILLITERATE OR BLIND PERSON:
An illiterate person is a one who is unable to sign document. Hence his/ her left and right thumb
impressions along with two attested photo graphs to assess the geniuses of customer, one photograph for
signature specimen card and second for account opening form. In case of illiterate person customers,
both right hand thumb and left hand thumb impressions are recorded on signature specimen card (S. S.
Card) and account opening form. Account of illiterate person will be opened when they personally visits
the branch and affix his thumb impressions on the cheques or documents in the presence of designated
officer i.e. Business Development Manager (BDM) who will authorize transactions by establishing the
identity of customer with photograph. Furthermore, cheques of illiterate person received in clearing are
unacceptable.
When account of blind person is being opened, branches of Al-Baraka Bank (Pakistan) Limited are
advised to extend full cooperation to such people in order to facilitate them in opening and operating of
account. Such persons must have a literate person with them who can fill the account opening form and
fulfill the all others account opening requirements. However, terms and conditions are read aloud to
customer.
DOCUMENTS REQUIRED:
a) Computerized National Identity Card (CNIC) or valid passport of individual duly attested by a
gazetted officer or an officer of bank.
<Semester 6>
b) In case of salaried person an attested copy of his service card, latest salary slip or certificate from
employer.
c) In case of businessman National Tax Number (NTN) Certificate or request to open account on
d) In case of illiterate person, two passport size photographs of new account holders besides taking
e) Know Your Customer (KYC) of customer.
f) Indemnity letter
PARDA NASHEEN LADIES:

Parda nasheen ladies are those ladies who cover themselves with Islamic veil in such a way that their
identity cannot be easily ascertained.
DOCUMENTS REQUIRED:
a) Computerized National Identity Card (CNIC) or valid passport of Parda nasheen lady duly
attested by a gazetted officer or nazim.
b) Copy of photograph duly attested by same person who attested CNIC.
c) In case of salaried person an attested copy of his service card, latest salary slip or certificate from
employer.
d) In case of business woman National Tax Number (NTN) Certificate or request to open account
on letterhead of business.
e) A confirmation in writing by Parda nasheen woman that express that she have no other document
bearing her photograph.
f) In case of illiterate person, two passport size photographs of new account holders besides taking
g) Know Your Customer (KYC) of customer.
<Semester 6>
PARTNERSHIP:
Following factors are consider by Al-Baraka Bank (Pakistan) Limited for opening of account of partnership
account.
A certified true copy of partnership deed should be obtained and compare with original one to establish
its correctness. Deed must clearly set out following important points:
The extent and authority of each partner to represent the partnership
Events that result in dissolution of partnership (retirement, death and bankruptcy of any partner)
The registration certificate should be seen and a certified true copy retained for record if firm is
registered. If firm is not registered then this fact is clearly written in account opening form and signature
specimen card (S. S. Card).
All partners must sign account-opening form. Signing and delegated powers of authorized partner to
operate the account should be clearly stated in account opening form.
If a partner of firm is minor, care should be taken by all branches to record the date of maturity while the
presence of a minor in account must be allowed and approved by Branch Manager (BM).
Designated officer i.e. Business Development Manager (BDM) must ensure that signature of newly
turned major partner is immediately updated and that partner must confirm his/her personal share
percentage in partnership and understanding of liability, risks and responsibilities as partner in writing to
bank.
DOCUMENTS REQUIRED:
a) Attested photocopies of Computerized National Identity Card (CNIC)

b) Two photocopies of partnership deed signed by all partners.
c) Registration certificate
d) Request letter to open account signed by all partners on letter head of the firm
e) Authority letter in favour of the person authorized to operate account
f) National Tax Number (NTN) Certificate
g) Know Your Customer (KYC) of each partner
h) An agreement that bank will be notified in writing by partners of any change in partnership
i) An agreement stating that each partner is personally liable, in addition to being jointly liable on
the account and for the payment of debts of partnership.
<Semester 6>
CHANGE IN THE STATUS OF PARTNERSHIP CONCERN:
A change in status of partnership concern may be brought in a number of ways. Common instances
resulting in such change are following with the procedure to be adopted in each case by Al-Baraka Bank
(Pakistan) Limited.
a) DEATH OF PARTNER:
If there is provision in partnership deed that partnership should not be dissolved on death of
partner, the remaining partners may continue the business and operate the account uninterrupted.
If partnership deed provides that the partnership shall be dissolved on the death of a partner,
surviving partners may continue operations of firm’s account only for winding up of business. In
this case bank pay balance in account to surviving partners who will then pay to heirs of
deceased partner equal to his/her share in assets of firm.
If account of partnership, where a partner has deceased is overdrawn, following action is taken
by branches of Al-Baraka Bank (Pakistan) Limited.
The operations of account are stopped whether firm stand dissolved or not while the liability of
deceased partner’s estate and continuing partners are established towards the bank in respect of
firm’s debt.
The matter is referred to Country Operations Department for guidance, giving full details of the
account and the securities held against financing if any.
Cheque signed by deceased partner alone before his/her death may be paid by bank with the
consent of surviving partners.
b) RETIREMENT OF PARTNER:
Until notice of retirement is received by the bank from the partner, he/she is liable for the firm’s debt
incurred after the date of his/her retirement. In case of bank finance has been availed against the
securities relating to retiring person, fresh securities are obtained.
<Semester 6>
c) ADMISSION OF NEW PARTNER:
Bank ensures that if a new partner is admitted, the admittance is with the consent of all partners. Further
new partners should accept his/her liability for the firm’s debt incurred after the date of his/her
admission along with debts incurred prior to his /her admission to partnership.
In such cases, although there is no need to stop operations of account the bank obtains fresh partnership
deed signed by new and existing partners to cover the future operations.
d) INSOLVENCY OF PARTNERSHIP FIRM:
The operations of account are stopped whether the same is in credit or debit. This case is referred to
Country Operations Department for further guidance giving the full details of account ant the securities
held against financing if any.
LIMITED COMPANY:
A public or private limited company can open account with Al Baraka Bank (Pakistan) Limited only if it
is authorized to do so by resolution of Board of Director. Further, the resolution must specify the titles or
designations of officials authorize to operate the account and extent of their authority.
Documents required
A certified copy of each of the following documents must be obtained from the company:
Board resolution and Certificate of Incorporation is required in case of private limited company.
Further, in case of public limited company Certificate of Commencement of business is also
required.
Memorandum of Association and Articles of Association should be carefully read to establish
whether the company is authorized to engage in business being undertaken.
Attested copies of CNIC of all directors of company must be obtained.
List of all directors on letterhead is necessary. However, it is not required in case an updated
“Form 29” is provided.
Request to open an account on letterhead is required.
<Semester 6>
CLUBS AND SOCIETIES:

A club or society can open account with Al Baraka Bank (Pakistan) Limited if it is authorize to do so by
governing body of said society or club. However, no credit facilities are allowed in such account without
the prior approval of head office. In the event of retirement or death of authorized person to operate this
account, operations of account is suspended by bank until a fresh resolution is received from
management committee.
Documents required
Account opening form signed by authorized person, who would operate the account
Copies of computerized national identity card of authorized signatories
Certified copy of certificate of registration
Certified copy of rules and regulation governing the institution
In case of any change in authorized signatories, a revised list should be maintained
NON-GOVERNMENTAL ORGANIZATION (NGO):

Non-governmental organization (NGO) is any non-profit, voluntary citizens' group which is organized
on a local, national or international level. It is driven by people with a common interest, NGOs perform
a variety of service and humanitarian functions, bring citizen concerns to Governments, advocate and
monitor policies and encourage political participation through provision of information. Some are
organized around specific issues, such as human rights, environment or health.
Documents required:
Attested copies of computerized national identity card or passport of account operator

Attested copies of rules and regulation
Copy of registration issued by government of Pakistan
<Semester 6>
8) CHEQUE BOOKS:
At the time of account opening customers are asked to complete cheque book requisition slip, as cheque
book is issued to customer only against duly signed requisition slip. On delivery of cheque book, an
acknowledgement is obtained on register.
In case of cheque book subsequent to the first issuance, following procedure is followed:
Prior to the issuance of cheque book, customer account is reviewed to check that an excessive number of
cheque leaves do not remain outstanding from previously issued cheque book. If an excessive number of
cheque leaves remain outstanding then customer is politely requested to explain reason for taking new
cheque book. “
Details of every cheque book are recorded in system of branch and cheque book issuance register must
be updated. In case of issuance of cheque book to illiterate person, designated official witnesses
placement of left hand thumb and right hand thumb impression for both males and females customers
are taken while cheque book issued to them. Designated official affixes following notation below thumb
impression:
Left hand thumb and right hand thumb impression are mark and witnessed
In event of cheque book reported lost or mutilated, customer is politely asked to visit branch for signing
requisition slip for new cheque book. Under such circumstances, Branch Manager or Operation Manager
will decide whether duplicate cheque book should be issued or account to be closed by transferring
balances to new account and issue new cheque book to customer. It is preferred that if customer is
businessperson than he should be asked to close account and transfer balance to new account to
safeguard him and bank from any illegal usage as undated cheques are valid for life.
<Semester 6>
9) STATEMENT OF ACCOUNT:
System generated statement of account is dispatched to all account holders at frequency requested by
them on account opening form. In absence of instruction by customer, statements are sent at least once a
month in case of current account and at quarterly interval in case of saving account.
When customer requests bank in writing, to hold statement then all such statements are consider as hold
mail.
All statements are printed on letterhead of Al Baraka Bank (Pakistan) Limited and bear following
notation:
This is a system-generated document and does not require any signature.
10) DORMANT ACCOUNT:
In case of loss of customer contact with bank, account is termed as dormant account. Loss of customer
contact is usually indicated by following events:
i. Bank statement return undelivered

ii. No activity or operation in account for four to six months or more than six months
When account statements are return undelivered, record of this event is maintained in system. Returned
items of mail are filed separately in order of date. Customer Relation Manager keeps this file until
customer contact is re-established. Upon establishment of customer contact these items are handed over
to customers.
“When there is no operation in account for six months or more
Than six months, the account will be tagged as dormant account.”
Only internally generated transaction for example interest charge and profit etc may be debited and
credited to dormant account. These transactions are not considered as start of an activity in account.
To activate dormant account customer is requested to fill form of activation of dormant account and
submit it with copy of computerized national identity card. This application form is free of cost.
<Semester 6>
13) INACTIVE ACCOUNT:
.
“If a dormant account is remains inactive for a period
Of two years, account is term as inactive count.”
This account may be reactivated only at request of customer and after approval of Branch Manager.
14) BLOCKED ACCOUNT:
Accounts on which operations have been stopped or accounts that have been inactive by any instruction
of legal authority or bank are known as blocked account.
When legal notice for blocking account is received bank takes following actions:
In system, account is tagged as blocked account.

Legal notice is filled and Branch Manager or Operation Manager retains its record.
Customer is informed about blocking of his account and its reason.
Blocking may be removed only after permission in this regard by Head Office. Notice to block account
along with removal of block must be filled with account opening form. Customer is also informed that
he can now operate account after removal of block.
15) - DECEASED ACCOUNT:
Branch of Al Baraka Bank (Pakistan) Limited takes following actions on the receipt of reliable
information about death of customer:
Carefully makes payment of cheque signed by deceased customer.

Apart from transactions that cease on death of customer such as amount of pension credited in
account, all other payments to accounts may be credited to it according to local laws.
Branch of Al Baraka Bank (Pakistan) Limited obtains death certificate of death.
Funds in account, securities held for safe custody and contents of lockers are hand over to legal
heirs.
<Semester 6>
CREDIT OPERATIONS DEPARTMENT (CREDIT OPS)
Credit Operations Department of all three zones i.e. South, Central and North report to Head Credit
Operation at Head Office for effective control and monitoring. Head Office approves all transactions
above Re. 5,000,000. While disbursing approved credit facilities Credit Operations Department (Credit
OPS) ensures that Shariah and rules and regulations of State Bank of Pakistan confirm all transactions.
FUNCTIONS OF CREDIT OPERATIONS DEPARTMENT (CREDIT OPS):
Basic functions of Credit Operations Department (Credit Ops) are revolved around disbursements,
recovery and reporting of financing provided to customers. Credit Operations Department (Credit Ops)
is not allowed to fiancé prior to receipt of Disbursement Approval Certificate (DAC) approved by head
or manager of Credit Administration Department (CAD). Credit Operations Department (Credit Ops)
also prepares weekly, monthly and quarterly credit portfolio that also indicates monthly reporting or
summary of classifieds accounts with principal outstanding balance of customers, forced sale values of
securities provided by Credit Administration Department (CAD).
PRODUCTS OFFERED BY ABPL:
1) MURABAHA
a) Local Murabaha
b) Foreign Murabaha
i) Import Murabaha
ii) Export Murabaha
2) ABPL AUTO IJARAH
3) DIMINISHING MUSHARIKAH FACILITIES
a) Corporate Al-Bait financing
b) Consumer Al-Bait financing
4) RAHNUMA TRAVEL SERVICES
a) Rahnuma Umrah
b) Rahnuma dream cities ( Dubai, Malaysia, Egypt and turkey)
<Semester 6>
MURABAHA FINANCING
DEFINITION:
“A kind of sale where seller (bank) cost and profit
of selling commodity and purchaser (customer)
has to bank on spot or on deferred basis.”
EXPLANATION:
Under Murabaha financing bank enters into agency agreement with customer authorizing him to
purchase goods on bank’s behalf. Customer submits local purchase order to bank requesting to provide
funds for purchasing goods as per agency agreement through advance against Murabaha. Thereafter
customer submits declaration that goods as mentioned in local purchase order has been received by him
as agent. Bank than offers customer to sell goods on his behalf and on customer acceptance Murabaha is
executed.
<Semester 6>
ABPL AUTO IJARAH
INTRODUCTION:
It is a scheme under which Al-Baraka Bank (Pakistan) Limited provides car financing to both consumer
and corporate sector.
CRITERIA FOR AUTO IJARAH:
A customer is eligible for availing financing in form of Auto Ijarah if his monthly minimum take home
income is Re. 35,000. For this purpose debt burden is calculated in following way:
DEBT BURDEN:
Debt burden is calculated by deducting amount that customer is already paying in form of installments
of other loans or bills of credit card. Then 50% of his remaining salary is calculated. This 50% part of
salary is considered as cash for his personal expenditures and it must not be less than Re. 35,000.
CUSTOMERS ARE NOT ELIGIBLE:
In Pakistan age of retirement is usually sixty (60) years. So customers who have attain age of 60 years in
case of salaried person or who have attain age of sixty five(65) years in case of business man, are not
eligible to avail AUTO IJARAH. If remaining job length of customer is 10 or 15 years then bank
provides car financing.
<Semester 6>
DOCUMENTS REQUIRED:
Following documents are required by applicant of auto ijarah if he is salaried person:
Two year work experience and last 12 salary slips

Copy of CNIC
Latest utility bills
Two photographs
Following documents are required by applicant of auto ijarah if he is business man:
Business proof in form of Income Tax Return of 3 years

Bank statements of company account in any bank for 1 year
Income statement of company for 1 year
Copy of CNIC
Two photographs
PROCESS OF APPROVING AUTO IJARAH:
After viewing Electronic Credit Information Bureau (ECIB) to check credit history and to verify income
of applicant, and verifying all documents bank draws pay order in the name of car dealer on the behalf
of applicant and hand over to dealer. Within 15 days applicant gets desired car.
FEATURES:
Features of scheme of Auto Ijarah are as under:
1) Bank provides financing of only 70% of actual price of old or new car.
2) Rental is so fixed that actual price paid by bank along with some rental income is fully amortized
within 3 to 7 years.
3) Property in car financed continues to vest in bank till ownership is transferred in favor of hirer on
payment of all instalments.
4) Bank does not charge any upfront takaful and registration charges.
5) Scheme of Auto Ijarah also includes vehicle tracking device arrangement.
6) Insurance premium for the first year is paid by bank however hirer has to pay insurance expense
for the remaining years.
7) In the event of default bank terminates agreement, retake possession of car and recover defaulted
rental from hirer or by selling car at auction.
<Semester 6>
DIMINISHING MUSHARIKAH
INTRODUCTION:
Al-Baraka Bank (Pakistan) Limited provides diminishing Musharakah facility to both consumer and
corporate sector. This scheme is related with construction of house and buildings.
CATEGORIES:
Presently Al-Baraka Bank (Pakistan) Limited is providing diminishing Musharakah facilities in form of
following categories:
a) Purchase of built house

b) Construction of house that was purchased by applicant himself
c) Purchase of land plus construction of house
d) Renovation of home owned and constructed by applicant
e) Balance Transfer Facility (BTF)
CRITERIA FOR AL BAIT HOUSING FINANCE:
A customer is eligible for availing ABPL- Al Bait Housing Finance if his monthly minimum take home
income is Re. 40,000 if he is salaried person or Re. 70,000 if he is businessperson. For this purpose, debt
burden is calculated in following way:
<Semester 6>
DEBT BURDEN:
Debt burden is calculated by deducting amount that customer is already paying in form of installments
of other loans or bills of credit card. Then 50% of his remaining salary is calculated. This 50% part of
salary is considered as cash for his personal expenditures and it must not be less than Re. 35,000.
CUSTOMERS ARE NOT ELIGIBLE:
In Pakistan age of retirement is usually sixty (60) years. So customers who have attain age of 60 years in
case of salaried person or who have attain sixty five(65) years in case of business man, are not eligible to
avail Al Bait Housing Finance. If remaining job length of customer is 10 or 15 years then bank provides
house financing.
DOCUMENTS REQUIRED:
Applicant of Al Bait Housing Finance requires following documents if he is salaried person:
Two year work experience and last 12 salary slips

Copy of CNIC
Two photographs
Applicant of Al Bait Housing Finance requires following documents if he is businessperson:
Business proof in form of Income Tax Return of 3 years

Bank statements of company account in any bank for 1 year
Income statement of company for 1 year
Copy of CNIC
Two photographs
<Semester 6>
a) APPROVAL PROCESS FOR THE PURCHASE OF BUILT HOUSE:

After viewing Electronic Credit Information Bureau (ECIB) to check credit history of applicant
and to verify his income bank issues offer letter. Offer letter shows 70% of total value of house
that bank can finance.
Bank gets copy of property documents from applicant and sends these documents to company
hire on the penal of bank. Company verifies documents and generates Property Valuation
Report.
Bank’s lawyer inspects documents, ownership of property and chain documents of property.
After it lawyer generate Legal Opinion Report.
Based on Legal Opinion Report, Head Office issues sanction letter.
On the receipt of sanction letter branch invites buyer and seller with complete file of original
property documents. Agreement to sell is signed by bank and seller.
Bank draws pay order in the name of seller and hand over to him.
Bank retains property documents and agreement to sale. Bank marks lien on property documents
until claim on property is paid by buyer.
After the agreement to sale, buyer gets the possession of house and after making all rental
payments, he gets ownership too.
<Semester 6>
b) APPROVAL PROCESS FOR THE CONSTRUCTION OF HOUSE:
If applicant already owned a house then ABPL can provides him financing for the construction of
house. For the construction of house Al-Baraka Bank (Pakistan) Limited provides finance in four
trenches one by one to construct house in different phases.
Bank views Electronic Credit Information Bureau (ECIB) to check credit history of applicant
and verify his income.
Applicant provides Bill of Quantity (BOQ) prepared by his architecture.
Bill of Quantity (BOQ) states the estimated cost of constructing house for each phase.
Bank issues offer letter. Offer letter shows 70% of total cost for constructing house that bank can
finance.
Bank gets property documents from applicant and sends these documents to company hire on the
penal of bank. Company verifies documents of house and generates Property Valuation Report.
Bank’s lawyer inspects documents of land, ownership of property and chain documents of
property. After it lawyer generate Legal Opinion Report.
On the receipt of sanction letter branch releases first trench of amount approved for financing.
Bank provides finance directly to applicant, which he can use to complete first phase.
Bank retains property documents and marks lien on property documents until claim on property
is paid by buyer.
Similarly, bank provides whole amount of finance as per sanction letter in other three trenches.
After paying all instalments customer again gets property documents.
<Semester 6>
c) APPROVAL PROCESS FOR PURCHASE OF LAND PLUS CONSTRUCTION OF HOUSE:
If applicant requires finance for the purchase of land as well as for the construction of house then Al-
Baraka Bank (Pakistan) Limited also provides finance for both purposes.
Bank views Electronic Credit Information Bureau (ECIB) to check credit history of
applicant and verify his income.
Bill of Quantity (BOQ) states the estimated cost of constructing house for each phase at
the land for which applicant has desire to buy and build house on it.
Bank issues offer letter. Offer letter shows 50% of total cost for constructing house that
bank can finance.
Bank gets copy of property documents from applicant and sends these documents to
company hire on the penal of bank. Company verifies documents of house and generates
Property Valuation Report.
Bank’s lawyer inspects documents of land, ownership of property and chain documents
of property. After it lawyer generate Legal Opinion Report.
Based on Legal Opinion Report, Head Office issues sanction letter. Sanction letter shows
50% of total value of house that bank can finance.
On the receipt of sanction letter branch invites buyer and seller with complete file of
original property documents. Agreement to sell is signed by bank and seller.
Bank draws pay order in the name of seller and hand over to him.
On the receipt of sanction letter branch also release first trench of finance for construction
purpose.
Bank provides finance directly to applicant, which he can use to complete first phase of
construction.
Similarly, bank provides whole amount of finance as per sanction letter in other three
trenches.
Bank retains property documents and agreement to sale. Bank marks lien on property
documents until claim on property is paid by buyer.
After the agreement to sale, buyer gets the possession of land and after making all rental
payments he gets ownership of land and home too.
<Semester 6>
d) APPROVAL PROCESS FOR RENOVATION OF HOME:
Al-Baraka Bank (Pakistan) Limited also provides finance for renovation of home already constructed
and owned by applicant.
Bank views Electronic Credit Information Bureau (ECIB) to check credit history of applicant
and verify his income.
Bill of Quantity (BOQ) states the estimated cost of renovation of house.
Bank issues offer letter. Offer letter shows 70% of total cost for renovation of house that bank
can finance.
Bank gets property documents from applicant and sends these documents to company hire on the
penal of bank. Company verifies documents of house and generates Property Valuation Report.
Bank’s lawyer inspects documents of land, ownership of property and chain documents of
property. After it lawyer generate Legal Opinion Report.
On the receipt of sanction letter branch releases amount approved for finance in lump sum.
Bank retains property documents and marks lien on property documents until claim on property
is paid by buyer.
Similarly, bank provides whole amount of finance as per sanction letter in other three trenches.
After paying all instalments customer again gets property documents.
e) BALANCE TRANSFER FACILITY(BTF):
The Balance Transfer Facility is the most convenient, flexible, economical and easy-to-use loan facility
designed to suit customers needs and gives them the power to control their finances. It brings a variety
of features that provide the spending convenience. This facility is provided to customers who had taken
loan from any other bank against security of any property. If bank feels that value of property against
which loan has been advanced is actually greater than estimation of previous bank then Al Baraka Bank
(Pakistan) Limited offers that customer to transfer his loan from that bank to Al Baraka Bank (Pakistan)
Limited. Al Baraka Bank (Pakistan) Limited gives up to 30% enhancement over loan amount depending
on the worth of property.
<Semester 6>
RAHNUMA TRAVEL SERVICES
Rahnuma Travel Services is a co-branded & value-added product which provides an opportunity to
deepen relationships with customers by providing customized services to them. The product targets all
social segments of society and has the most flexible payment options available. It caters to existing as
well as new customers of the Bank by following underlying Islamic Mode.
The bank provides travel services to the customers through a designated travel agent(s) such as:
OASIS
Darul Aman
Universal Brothers
<Semester 6>
Rahnuma Product Line:
a) Rahnuma Umrah
b) Rahnuma dream cities ( Dubai, Malaysia, Egypt and turkey)
Payment Options:
Pay Now Travel Now (PNTN): Travel instantly after depositing the required amount in his/her account
at Al Baraka Bank (Pakistan) Limited.
Save Now Travel Later (SNTL): Client can save upto their target amount in normal saving/current
account for avail Umrah/Hajj/ dream destination package.
Benefits of Rahnuma under Group Selling:
Umrah Package
Rahnuma offers attractive and customized packages for groups

Processing fee of Rs. 3,000/- collective for a group of 10 &above
Dream Destination
Rahnuma offers attractive and customized packages for groups

Discounts of 2% - 8% on a group size of 10 and above
One Free of Cost package per group size of 30 & above
Documents Required for VISA Processing:
Umrah
Filled and signed Application form

The application form has to be signed and verified by the BM
Original Machine readable passport valid for a minimum of 8 months having at least 2 blank
pages
Original CNIC
4 Passport size photographs (4 cm x 6 com) on light blue background without borders. Female
must be wearing a hijab or scarf
Dream Destination
Filled and signed Application form

The application form has to be signed and verified by the BM
Original Machine readable passport valid for a minimum of 8 months having atleast 2 blank
pages
Original CNIC
4 Passport size photographs(4 cm x 6 com) on light blue background without borders
<Semester 6>
Last 6 months bank statement and Account maintaining certificate

Employer letter
CLEARING DEPARTMENT
MEANING OF CLEARING:
The word clearing has been derived from the word “clear” and is defined as:
“A system by which banks exchange cheques and
other negotiable instruments drawn on each other
within a specific area and thereby secure payment for
their clients through the Clearing House at specified
time in an efficient way.”
EXPLANATION:
This department deals in those cheque and drafts which are drawn upon the Al Baraka Bank (Pakistan)
Limited. In the clearing department, relationship of Al Baraka Bank (Pakistan) Limited and State Bank
of Pakistan is of customer and collector. Function of clearing department is to send cheques by using
outsource servicing to National Institute of Facilitation Technologies (NIFT) on daily basis at a fixed
time. There through computerized system cheques are sorted and then send to relevant banks. Some
cheques are for payments while some are bogus cheques. Clearing department then take necessary
actions to settle the claims
NATIONAL INSTITUTIONAL FACILITATION AUTHORITY
Initially State Bank of Pakistan provides the facility of clearing in its Clearing House. Now State Bank
of Pakistan has assigned this responsibility to National Institute of Facilitation Technologies (NIFT).
NIFT acts as a Clearing House. Different banks are the members of the clearinghouse. A representative
of each bank represents his bank in the Clearing House.
NIFT has elaborate data centers to provide automated services for document processing particularly in
the payment field. Modern image based facilities have been established at Karachi, Lahore,
Islamabad, Peshawar, Rawalpindi, Hyderabad, Multan, Faisalabad, Quetta, D.I.Khan, Sialkot,
Gujranwala, Sukkur, Bahawalpur, Muzaffarabad, Jhelum, Abottabad, Mirpur, Sahiwal and
Sargodha. The services include cheques clearing, reconciliation, ‘return’ (unpaid) cheques processing,
<Semester 6>
same day clearing (express – 2 hrs. clearing service), intercity clearing and inter branch & interbank
settlement.
Each bank has collected cheques on behalf of their customer but these cheques are not drawn on their
own bank so in the clearinghouse, they hand over these cheques to respective banks on which these
cheques are drawn. Similarly, each bank receives cheques from other banks if any.
INSTRUMENT TO BE PRESENTED:
1. Cheques
2. Demand Drafts
3. Pay Orders
TYPES OF CLEARING:
There are four types of clearing:-
1. Inward Clearing
2. Outward Clearing
3. Intercity Clearing
4. Same Day Clearing
<Semester 6>
Inward Clearing:
Other bank’s cheques
are presented in ABPL
Cheques are sent to ABPL

through NFIT
No Cheque along
Cheque is
with return
cleared
memo
Yes
Customer Account
is debited
Those Cheques and other negotiable instruments, which are drawn by ABPL customers in the
favour of non ABPL customers, constitutes the inward clearing of Al Baraka Bank (Pakistan)
Limited.
In the morning, bank receives its own cheques from NIFT, which has been presented by non-
ABPL customers in their banks to be deposited in their accounts.
After checking the account balances of respective customers bank clears the cheque and pass
following entry in the system:
 Customer account Dr
 State Bank of Pakistan/ NIFT Cr
If the balances are short then that cheque is bounced back to related bank with memo and cheque
return charges are deducted from customer account.
<Semester 6>
Outward Clearing:
Other bank’s cheques

are presented in ABPL
Cheques are sent to concerned

banks through NIFT
Cheque is No Cheque along with

cleared return memo
Yes
Amount is credited to
Customer
a. Cheques and other negotiable instruments drawn by non-ABPL customers in the favor of ABPL
customers, constitutes outward clearing of Al Baraka Bank (Pakistan) Limited.
b. Customer presents cheque on the counter with pay-in-slip.
c. Bank officer affix the following stamps
Clearing stamp (clearly specify date and branch name)
Crossing stamp
Payee account is credited
d. Details of cheque i.e. the amount, cheque number, account number and the name of drawee bank
are entered into the system.
e. Bank lodge the cheques through NIFT.
f. On the clearing of cheques bank passes following entry in the system:
State bank of Pakistan/ NIFT Dr
Customer account Cr
<Semester 6>
Inter City Clearing:

The cheques that are presented in intercity clearing are of another city and received by air. In this type of
clearing the bank confirm at that time that the cheques are clear or not and give to the rider. Inter city
clearing takes approximately 5 days.
Same Day Clearing:

The cheques that are presented in same day clearing are the local cheques and these cheques are clear in
same day. Basically, it is the benefit that is provided to customers if the cheque amounted equal or more
than five hundred thousand (Re. 500,000) is presented by client to creditin his/her account, the cheque is
cleared in the same day and customer can use the balance after banking hours through ATM or next day
by cheque.
CLEARING PROCESS:
I. STAMPS PUT ON THE CHEQUES:-
When the cheques are presented in Habib Bank Limited to be deposited in their respective payee’s
accounts, different stamps are put on cheques before their lodgment in outward clearing.
II. CROSSING THE CHEQUES:-
Crossing means two parallel lines, drawn across the face of the cheques with or without words written in
between them. Crossing may be general or special. In clearing, cheques are crossed specially. Cheques
are stamped with bank’s name between two parallel lines to constitute special crossing. After the
cheques have been crossed specially, the holder cannot receive payment except through the banker
named on the cheques crossing saves the instrument to go it in illegal hands. If, crossed cheques is lost
or stolen, there is no risk involved. So it is an effective means of minimizing the risk of loss.
III. CLEARING STAMP:-
After the cheques have been crossed specially, clearing stamp is put on the cheques and other
instruments with the next date, so these cheques would have to be presented in their concerned drawee
banks on the subsequent day.
IV. ENDORSEMENT STAMP:-
The word endorsement means anything written or printed on the back of an instrument. So endorsement
stamp has to put with words “Payee’s account Credited in Habib Bank Limited, Lahore.”
V. NATIONAL INSTITUTIONAL FACILITATION AUTHORITY:-
After putting these three stamps on cheques& other negotiable instruments, they are sent to NIFT. NIFT
after segregating the cheques of different banks delivers them to their concerned banks.
<Semester 6>
VI. SEND REPORT TO THE BANK:-
After delivering the cheques to different banks NIFT send report to Habib Bank Limited Mall branch
Lahore, then the bank’s staff tally the amount of that report for its own record.
VII. DELIVERED CHEQUES TO RESPECTIVE BANKS:-
Next morning, these cheques are delivered to the respective banks between 9:00 to 9:30AM. In the same
manner, other banks present their clearing drawn on Habib Bank. Total number of cheques and their
amount delivered to other banks and received from them are written on the Clearing House schedule
branch for their payment. After proper scrutiny of cheques, verification of signatures and confirmation
of Habib Bank in the account, the Officer Clearing Department Debit the customer Account. If any
cheque is not passed due to insufficient balance or any other reason, Officer Cash Department returns
the same cheque by attaching a cheque return memo containing reason for return.
VIII. CREDIT THE CUSTOMER ACCOUNT:-
If the cheques are clear then the Habib Bank Limited Mall branch Lahore credit the customer Account.
If the bank receives the outward return due to any reason then this cheque is entered into the cheque
returned register and bank charges are deducted according to the schedule of charges.
Then send the outward and return inward as IBDA (Inter Branch Debit Advise) to Main Branch LDA
Plaza. And LDA Plaza sends outward return and inward to Habib Bank Limited Mall Branch, Lahore.
PROCEDURE OF SETTLEMENT:
Assume that Habib Bank Limited got the cheques which are drawn on NBP, and MCB for amount
Rs.50,000/-, Rs.30,000/-, Rs.15,000/- respectively, its total being Rs.95,000/-. It means that this amount
is to be credited to Habib Bank Limited account with NIFT. On the other hand the cheques drawn on
Habib Bank Limited are from NBP and MCB of Rs.15,000/- Rs.75,000/-, and Rs.30,000/- respectively,
its total being Rs.120,000/-. It means that this amount is to be debited from HABIB BANK account. The
difference between Rs.95,000/- credit and Rs.120,000/- debit is Rs.25,000/- debit, which means the
house is against Habib Bank Limited for Rs.25,000/-.
SETTLEMENT SHEET:-
In clearing department this sheet is prepared and contain detail amount of cheques received, amount of
cheques will be paid.
<Semester 6>
REMITTANCE DEPARTMENT
Remittance is fund transfer either in local currency or in foreign currency, which can be effected by the
way of pay order, telegraphic transfer and demand draft. By providing this service Al Baraka Bank
(Pakistan) Limited earns a lot of income through remittance department
1) Demand Draft
DD is a written order given by the branch of the bank on behalf of the customer to other branch of the
same bank to pay the certain amount to the customer. A method used by individuals to make transfer
payments from one bank account to another. The major difference between demand drafts and normal
checks is that demand drafts do not require a signature in order to be cashed.
Issuance of Demand Draft
1. Applicant fills fund transfer application form. He provides the following information:
a. Name of city where payment of demand draft is desired
b. Amount in words and figures
c. Name of payee
d. Account number of applicant
e. Signatures of applicant
2. Customer maintaining account with the bank may submit application on demand draft
application form along with cash, cheque or debit authority.
3. Remittance Officer reviews application to check its particulars and recover charges from
customer.
4. In case of cash, Remittance Officer requests customer to deposit cash at teller’s counter. Teller
affixes.
5. In case of cheque, it must be for total amount of demand draft including charges.
6. Remittance Officer signs application form and then Operation Manager counter signs it.
7. Entry is made in demand draft register, and demand draft is provided to applicant.
8. Advice is generated with all particulars of demand draft, one copy is sent to responding branch
and one copy is retained with issuing branch as record.
9. Demand draft remains outstanding in books unless payee/ beneficiary present it for payment.
Payment of Demand Draft
1. When demand draft is presented to collecting banker, it is to be scrutinized on the following

points:
a. All the particulars on demand draft should match with advice received from issuing
branch.
b. Demand draft is not more than six months older.
c. Presented instrument is original.
2. Sign of issuing officer is verify from booklet of authorized signatories.
<Semester 6>
3. In case of uncrossed demand draft, if payee is an account holder of branch then after verification
of sign from Signature Specimen Card (S. S. Card) cash is paid to him.
4. In case of uncrossed demand draft, if payee is not an account holder then bank pays cash after
checking his CNIC.
5. If demand draft is crossed, then amount is transfer into payee account.
2) Pay Order
Pay order is an instrument in writing issued by bank for a certain amount of money payable on demand
to the payee. Pay order issued from a branch can only be payable from the same branch. For this kind of
remittance, the payer must have the account in the issuing bank. Pay order are liquid as compared to
cheques because cheques may be dishonored while PO cannot be. It is written order issued by the bank
drawn and payable on itself. It is used for local transfer of money from one person to another person.
The public also uses it for depositing money with Government or Semi Government department.
Issuance of Pay Order
1. Customer submits fund transfer application form for issuance of Pay Order advising the
branch to debit his account.
2. Customer submits cheque along with application or he may submit application form without
cheque if he wants to debit his account.
3. Remittance Officer and Operation Manager affix their signatures pay order receipt and pay
order is hand over to customer.
Payment of Pay Order
1. Pay order may be presented for payment in clearing or as internal transfer.

2. When pay order is presented at cash counter bank makes payment against it after checking
CNIC of payee.
3. If pay order is crossed then amount is transfer to payee account.
3) Telegraphic Transfer (TT)
In this case the authority is given from one bank to other on the behalf of the customer through
telecommunication to debit their inter office account through them and credit their parties account
mentioned in TT. It is an inter bank transaction. Telegraphic transfer is an instant transfer of funds from
one city to other city. Through this method applicant can transfer money from one place to another
place.
Issuance of Telegraphic Transfer
1. Customer submits fund transfer application form for issuance of telegraphic transfer.
<Semester 6>
2. After proper scrutinizing it Remittance Officer makes the applicant account debit with the
amount mention on application form and bank charges.
3. Message for transfer of funds is sent to required bank through TELEX. This message
contains applicant bank, address and name of applicant, address and name of beneficiary
and payee bank.
Payment of Telegraphic Transfer
1. On the receipt of message, banks immediately credited account of payee.
4) On Line Transaction
Al Baraka Bank (Pakistan) Limited provides the facility of on line transaction that takes very little time
in transfer of funds. In this case, all accounts of bank and their details can be monitored from any branch
of Al Baraka Bank (Pakistan) Limited on computer connected though server to the computer at the other
end. No commission or fee is charged on providing this service. This facility is available at all branches
of Al Baraka Bank (Pakistan) Limited.
ACTIVITIES OF INTERN
During internship in Al Baraka Bank (Pakistan) Limited I worked in different department.
FIRST TWO WEEKS:
I start my internship by working in account opening department. Here I spent two weeks. In this
department under the supervision of Mr. Subtain Rasheed I learned about different types of account,
how to open account and documents require to open a specific account etc.
ACCOUNT OPENING
To open an account is one of the primary functions of the banks because when a customer opens an
account in the bank then the deposits belongs to that branch and the business is carried out from these
deposits. To open an account an account opening form has been specifically designed for everyone who
wishes to open an account in that bank.
ACCOUNT OPENING FORM
One of the major requirements of account opening department is to fill the form for opening a new
account. This Account Opening Form (AOF) contains the required information necessary for opening a
new account.
The account opening form contains:
Basic information form
<Semester 6>
Specimen signature card

Cheque book requisition form
ATM card form
BRANCH NAME AND CODE
The branch name and the branch code is to be mentioned very clearly.
TYPES OF ACCOUNTS
Here the type of account the customer chooses to open has to be selected by the client as the bank offers
many types of accounts. Some of the available accounts are
(i) Current account

(ii) Profit & loss sharing saving account
(iii) Basic Banking Account
(iv) Business plus Account
CURRENCY OF ACCOUNT
Here the client mentions in which currency he or she wants to operate his or her account in as the rules
are very different for an account in local currency as compared to the account in foreign currency. In Al
Baraka Bank (Pakistan) Limited customers can open account in Pakistani Rupees, US Dollars, Euro,
GBP and Japanese Yen.
TITLE OF ACCOUNT
Here the name, which the client wishes to give to the account, shall be written and the account will be
operated under that name.
CORRESPONDENCE/ MAILING ADDRESS
In this category, the information of the customer is mentioned by which he or she can be contacted with.
This includes, address, alternate address, phone number, cell phone number, fax number and email
address. This is very important because in specific circumstances the bank may have the need to contact
the account holder.
TYPE OF ENTITY
In this category client selects whether he wishes the account to be individual, joint, sole proprietorship,
public limited or private limited company account and trust or society. All these accounts have different
requirements for opening.
OPERATIONAL INSTRUCTIONS
In this category, the account holder nominates anyone other than himself who may also operate the
account.
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INTRODUCER / REFERENCE
This is one of the requirements to open an account. Reference of any other account holder is needed to
open an account because in case a person commits fraud then the bank must have someone to question.
However, this information is optional.
NEXT OF KIN
This is very important information to write the name of a close relative. This is taken so that in case the
account holder does not contact the bank for three years then the bank would get in contact with the
name mentioned as in the next to kin.
SPECIMEN SIGNATURE CARD
Along with the Account Opening Form, we also get the client to fill in and sign four times on a
purposely-designed two specimen signature cards. One S. S. Card is send to Karachi and other is kept
for the branch’s record. Specimen Signature card is used to confirm the signatures on instruments issued
by the client. This is very important to prevent fraudulent cases. It is vital that we have this card filled
because from this we verify the signatures on the cheques before any value of money can be transferred
or paid in cash.
When the account opening form is completed, the Business Development Manager views the original
CNIC and attaches a photocopy of customer. Moreover, it is vital to obtain the Computerize National
Identity Card of the next to kin.
The complete Account Opening Form along with document of Know Your Customer is scanned and
send to Branch Manager and Operation Manager. BR number is generated in Auto-I Banker. While
these original documents are, send to Head Office Karachi. Head Office assigns account number. After
this, opening of new account is informed by updating record in system.
THIRD WEEK:
In third week I worked under the supervision of Customer Relationship Officer. Here I learnt I learnt
how to fill Pay-in-Slip. Pay-in-Slip is used to deposit cash and cheques in account.
Date and Branch name must be clearly written on the top.

Then account type and currency are to be check marked.
Account title and account number should be written carefully.
Customer can use one Pay-in-Slip to deposit four cheques. Total amount in words and figures is
to be write-down clearly.
In the last Pay-in-Slip must be signed by account holder.
I learnt how to fill phone banking form and SMS banking form. Through Phone Banking Customers can
get information about last five transactions and current account balance. Besides phone banking Al
Baraka Bank (Pakistan) Limited is also offering SMS service to its customers. Through this service bank
<Semester 6>
sends SMS to customer if any transaction (of the amount limit mentions in SMS banking form by
customer) takes place in his account.
Form contains title of account, type of account and account number. An applicant can use Phone
Banking Subscription Form to avail the facility of phone banking for maximum six, link account.
SMS Banking subscription form requires the applicant to provide following information:
a. Title of account
b. Account number
c. Type of account
d. Mobile number
e. Amount of transaction for which customer wants to get informed
Maximum of six, linked account can be tagged to a mobile number. While a separate form is used for
each BRN.
In third week, filing was also included in my responsibilities.
Account maintenance certificate file:
In this file copy of account maintenance certificate along with original service request form are kept.
Dormancy removal file:
In this, file I had to keep copy of activation of dormant account form along with copy of attested
Computerized National Identity Card.
ATM files:
In the, file I had to keep record of original ATM card application form along with print out of delivery
channel request and original card generation report.
File for Notice of closing of account:
In the, file I had to keep record of original TCS slip along with copy of notice and original seales
envelope containing notice for closing of account. Three notices for closing of account have to be sent
with the gap of three days and after fourteen days of last notice branch close account.
File of link account:
In the, file I had to keep record of two carbon copy link account application form as original form is sent
to Head Office, Karachi.
<Semester 6>
Phone banking file:
In the, file I had to keep record of original form plus print out of delivery channel request.
File of on demand bank statement:
In the, file I had to keep record of original application form.
Change of address:
In the, file I had to keep record of copy of application form for changing corresponding address in
bank’s record along with copy of physical address verification memo or copy of utility bills indicating
the address of new residence.
Leave record:
This file is used to keep record of leaves and absence of employees. In the, file I had to keep record of
copy of application form plus report of leave record of each employee that is generated on monthly
basis. While original application form is sent to Head Office, Karachi.
Mr. Subtain Rasheed was also managing credit department. Here I knew about different types of
financing that Al Baraka Bank (Pakistan) Limited is offering to its customers and procedure of granting
these loans. As par sensitivity of the credit department, I was not given any special task to do.
FOURTH WEEK
In fourth week, my mentor was Mr. Subtain Rasheed who was also managing credit department. Here I
knew about different types of financing that Al Baraka Bank (Pakistan) Limited is offering to its
customers and procedure of granting these loans. As par sensitivity of the credit department, I was not
given any special task to do.
FIFTH WEEK:
In fifth week, I worked under the supervision of Ms. Faiza Akhtar. She was Remittance Officer Here I
learnt about issuance of demand draft and pay order. In this department, my duty was to deals with
customers who want to transfer funds and filled funds transfer application form. In application form I
entered all necessary details of beneficiary and remitter such as full name of beneficiary and remitter,
their full address and phone number, account number of both parties, bank of beneficiary and CNIC or
passport number of remitter.
In Funds Transfer Application form, following information must be provided:
a. Mode of transfer
<Semester 6>
b. Currency
c. Amount in words and figures
d. Reason of remittance
e. Date
f. Signature of customer or remitter
Besides these, one of the following options to cover amount of remittance and bank charges must be
check marked as per will of applicant.
a. Debit account number

b. Payment of cash on bank counter
c. Payment through cheque
SIXTH WEEK: In last week, I worked under the supervision of Ms. Faiza Akhtar. She also taught me
about procedure of inward, outward clearing, same day clearing and intercity clearing.
FINDINGS
The findings of Al Baraka Bank (Pakistan) Limited are as follow:
Experienced And Qualified Staff

The staff/personnel of the bank are qualified and experienced. Many of the bank officials have up to date
knowledge and experience in the fields of management, banking law and practice. The senior
management in the organization is very much competent and experienced; they successfully handle
different internal and external affairs.
Recruitment
Besides using external resources for recruitment bank also considers internal recruitment. Bank utilizes
experience and abilities of its employees and considers them for new posts.
Centralized Decision-Making
Al Baraka Bank (Pakistan) Limited is centralized bank which results in the loss of confidence of the
employees over the management as the middle and low level management is not taken into confidence.
Employees may not want to follow the dictates, rules and regulations.
Lengthy Recruitment Process
The recruitment process is quite lengthy which can discourage the new comers. Therefore, there is a
need to shorten the whole process. It should be trimmed.
No HR Department Level At Zone And Branch Level
Human resource department is one of the foremost requirements of any organization of this age. Al
Baraka Bank (Pakistan) Limited, though contain a HR division at headquarter but there are no sub
divisions at the provincial or branch level.
<Semester 6>
Exterior Improvement
Although the interior of Al Baraka Bank (Pakistan) Limited is very impressive but there is need to
change the exteriors of the branches. Mostly branches of Al Baraka Bank (Pakistan) Limited do not have
good outlook and they need renovation.
Less Number Of Branches

Al Baraka Bank (Pakistan) Limited has less number of branches in Pakistan as compared to many other
foreign banks. The bank has network of only 89 branches in 36 cities and towns across Pakistan.
However 25 more branches of Al Baraka Bank (Pakistan) Limited are under construction.
Lack Of Marketing Effort

The bank does not promote its corporate image, services, etc on a competitive way. Hence lacks far
behind in marketing effort. A need for aggressive marketing is there in the era marketing in now
becoming a part of every organization.
Reason for Loss
No doubt, Al Baraka Islamic Bank was generating profit before merger. However after acquiring
Emirates Global Islamic Bank financial statements of Al Baraka Bank (Pakistan) Limited indicate that
bank is bearing loss for consistently three years. As loss of acquired bank, carry forwards to next year
financial statements of resulting bank. However, after few years, financial position of resulting bank will
again become strong and it will start to earn profit.
Less Foreign Exchange Activities
Business operations have suffered greatly due to economic recession in whole world, which has reduced
import export dealings. That is why, Al Baraka Bank (Pakistan) Limited involves in foreign exchange
transactions at a very small scale. Hence, its earnings from foreign exchange department are low.
<Semester 6>
Pros and Cons:
1- Musharakah Financing:
Pros Cons
 Easy to establish  Joint and several liabilities of partners
 Best use of resources  Conflicts of profit
 Flexibility  Conflict in decision making
 Cost effective  Death partner
 Combinations of skills  Limit the extent of company
 Ability to raise funds  Dependence of decision
 Effective decision making  Unlimited liability
 Risk transfer  Handling
 Mutual decision  Inexperienced management
2- Mudarabah Financing:
Pros Cons
 Limited liability  Liberty to terminate the contract
 No risk of loss to Mudarib  Risk of loss to only Rab-ul-Maal
 Easy decision making  Only one investor
 Allowance for Mudarib during Business  No right to claim commission for Mudarib
trip  Risk of fraud or misrepresentation by
 Easy to establish Mudarib
3- Murabaha Financing:
Pros Cons
 Cost and profit disclosed  Only used for fresh assets
 Payment can be at the spot or at any future  No rebate on earlier payment
date  Only effected when cost is known
 No interest charged  Not possible in all transactions
 Price is fixed  Price remains fixed even if value of asset
 No penalty on late payment increases
4- Ijarah Financing:
Pros Cons
 Buys assets for customer  All expenses are borne by the lessor
 Rentals starts when asset is delivered  Not possible until asset is owned by seller
 Rent cannot be changed unilaterally  Lessor can terminate the contract
 No penalty in case of late payment unilaterally
 No transfer option is provided
<Semester 6>
Recommendations for the Bank to bring any visible change in the economic set-up,
not even in the field of Financing:
Problem:
 Firstly, In proportion to the conventional banking, the Islamic banks and financial institutions are
no more than a small drop in an ocean, and therefore, they cannot be supposed to revolutionize
the economy in a short period.
 Secondly, these institutions are passing through their age of infancy. Some of them have not
been able to comply with all the requirements of Shariah in all their transactions
 Thirdly, the Islamic banks and financial institutions are not normally supported by the
governments, legal and taxation system and the central banks of their respective countries.
RECOMMENDATIONS
As I have spent almost six weeks in Al Baraka Bank (Pakistan) Limited, for the Internship purpose.
During this period, I have tried my best to observe the banking environment in the ABPL. I have
observed a lot of strengths and weaknesses in the branch. Based on the observation I have come up with
certain recommendations particularly related to the Al Baraka Bank (Pakistan) Limited, but generally
can be applicable to all other branches of Al Baraka Bank (Pakistan) Limited for improvement. These
recommendations will help to cope with the problems being faced by the Bank and will enhance the
efficiency and performance of the ABPL in particular and all the banking sector of the country in
general.
Bank should introduced incentive plans for employees on regular basis so that if employees may
work whole-heartedly for the welfare of their organization. While giving incentives qualification,
work, experience, hard work and performance must be considered.
Mismanagement of resources must be avoided as much as possible as it decreases profit but also
discourage hard worker and honest employees.
Fresh graduates must be recruited. As the combination of Experienced and fresh can produce,
better results and it will improve the efficiency of management.
SMS banking and e- banking are consider as very important products of Al Baraka Bank
(Pakistan) Limited but the problem is that a common client has no idea of its usage due to lack of
marketing. I think that a proper marketing programme must be launched for client’s awareness.
Aggressive publicity campaign must be introduced through press and Electronic media for new
products and scheme by initiating vigorous marketing policy.
Bank should adopt such an induction plan that when a customer opens his account with the bank
he should be supplied with a booklet, which enables him to know the procedure of filing the
cheques, pay-in-slip etc. It will save a lot of time of the bank staff afterward during the conduct
of the account of that customer
<Semester 6>
Although, ABPL conducts refresher courses, seminars and workshop with a view to improve the
knowledge of the staff. Scholarship programs should be designed for senior employees and
branch managers. The AIB should get into contract with top foreign universities. Every year the
bank should finance and send their senior managers for further education abroad. After
completion of higher education, employees will be in a better position to attain the strategic
objectives of the bank and increase the overall business and profitability portfolio of the bank.
The coordination among employees of different departments needs to be improved. Higher
Management should set an example by implementing all those communication ethical codes on
themselves first.
There should be equal distribution of work and job responsibilities among all employees. This
will end the discomfort among employees.
All placements should be on merit, i.e. Competence and performance, without personal bias and
external influences and everyone should be promoted based on required qualification and
experience.
There is lack of healthy and entertainment activities like excursion on weekend, dinners and
other important days, celebration in their tidy life in town branches of Al Baraka Bank (Pakistan)
Limited. Such activities should be encouraged.
In my Opinion for the Islamic banks to bring any visible change in the economic set-up or in the field of
finance, it is necessary for them to implement the Islamic Shariah principles in their activities fully, So
that they may not be considered to be partially Islamic banking system. Also the Government should
provoke the public to use Islamic banking rather than conventional banking in order to flourish the
Islamic banking system in the Islamic states. Subsequently, the Islamic government should prohibit the
usage of Conventional banking system by the public so there may be no option left for them to save their
valuables and money and switch to Islamic banking system. This is only possible if the Government
pays keen attention to the Development of Islamic banking and enforces the public to ensure their
prosperity. The Islamic banking is more impactful to the economy. As a corollary to this, the
government first needs to encourage and promote establishment of more Islamic commercial banks,
Islamic windows, and Islamic rural banks whilst at the same time encourage existing Islamic banks to
establish more branches. Second as the number of Islamic banks and Islamic financial institutions
increases, there is also a need to have sufficient skilled manpower to manage these institutions. In order
to implement the Islamic rules and regulations to all the transactions related to the Islamic banking
institutes, there is a need of specialized personnel who could check the observance of fundamental
principles of Shariah. There is a need to relook at the current regulations and guidelines in order to bring
it at par with the development of Islamic banking worldwide. For example, the judiciary must have a
dedicated unit to handle Islamic banking legal cases should it go the court for adjudication. Finally as
the relationship is found to be supply side, Islamic banking may not be able to contribute fully towards
economic growth if there is low expansion in Islamic banking sector. Along with this the Islamic
banking system should be well supported by the government, legal and taxation system and the central
banks of their respective countries, so that these banks work in full power with the conformity to the
principles of Shariah being followed accordingly.
<Semester 6>
If the banks implement the above stated recommendations there might be a good chance that the Islamic
banking system to bring a visible change n the economic set-up and also in the field of financing.
Q2.Select any Islamic and commercial banks and differentiates between

conventional lease &Ijarah
Ijarah Conventional Lease

Ownership:
Muajjir(lessor) is the owner of the leased property The creditor institution retains the property
throughout the contract
Starting time for rental:
From the day of delivery of asset to Mustajir From the day the lessee makes payment for asset
Profit:
The profit is the rent for use of property The profit is for money invested in the property
Penalty for late payment of rent:
No penalty but the customer is asked to pay a The bank charges a certain amount as penalty for
certain amount to charity late payment
Lessees commitment:
The leased asset should be used in a productively It does not require any such commitment
and in ways permitted by Islam
Change in rental:
The lessor cannot increase the rent unilaterally The market interest rates are passed on to lessee
Transfer of asset:
Transfer of asset at the end of the lease period to Transfer of asset at the end of the lease period to
the lessee is not included in the lease agreement the lessee is a part of the lease agreement
Risk and rewards:
All risk and rewards of the asset will be held by All risks and rewards of the asset are transferred to
the bank the lessee
Pre-Rentals:
Prohibited in Ijarah before the delivery of asset Can be possible before the delivery of asset
Termination of contract:
Lessor can terminate the contract unilaterally if Lessor can terminate the lease contract even if the
lessee contravenes the agreement lessee did not contravene the agreement
Registration Charges:
Paid by the lessor for the leased asset Lessee is responsible for the registration of asset
Termination before delivery:
There will be no loss to any party if termination The lessor will suffer the loss of the interest paid
occurs before the delivery during first payment before delivery
Signing of lease contract:
Contract cannot be signed until the asset is in Contract can be signed any time even if the leased
existence, owned and possessed by the lessor asset is not owned by the lessor
Rentals recovery in case of loss:
Rentals will not be charged by the lessee if the Rentals will be charged by the lessee if the leased
leased asset has been stolen or destroyed asset has been stolen or destroyed to compensate
the insurance claim
<Semester 6>
The End
<Semester 6>

Al-Baraka Bank Pakistan Ltd.

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Al-Baraka Bank Pakistan Ltd.

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Principles of Islamic Business and Finance PUGC Sadaf Bilal

Principles of Islamic Business

Al- Baraka Bank Pakistan Ltd.

Overview to Al Baraka Bank:

The joining of several

Subsidiary Banking units of ABG:

Jordan Islamic Al-Baraka Egyptian Saudi Banque Al Al Baraka Bank

Bank Et- Al Baraka Al Baraka Al Baraka

Al Baraka Al Baraka Bank

History Created By Bank:

Vision and Mission of ABPL

To be a leading and a diversified international We strive to be a premier Regional Islamic bank,

Mr. Adnan Ahmed Yousif Chairman

Mr. Tariq Hamid Independent Directror

Mr. Salman Ahmed Independent Directror

Board Executive Committee (BEC):

Mr. Tariq Mahmood Kazim Chairman

Mr. Adnan Ahmed Yousuf Chairman

Mr. Tariq Mehmood Kazim Member

Mr. Abdul Ghaffar Fancy Member

Mr. Federico Tauber Member

Mr. Mukkarram Jafri Secretary of HRRC

Board Audit Committee (BAC):

Mr. Imtiaz Ahmad Pervez Chairman

Board Risk Committee (BRC):

Branch Manager: Mr. Muhammad Arshad

To maintain the highest international standards of corporate governance and regulatory

Al Baraka basic banking (Current account)

1- Al Baraka Basic Banking (Current Account):

2- Khazana Account (Saving Account):

Salient features Islamic Concept

3- Sarpast Family Takaful:

Salient features Islamic Concept

4- ABPL Auto Ijarah:

Salient feature Islamic Concept

5- Al Baraka Mahana Baraka:

Salient features Islamic concept

6- Al Baraka Mahana Amdani:

Salient features Islamic concept

7- Tifl- Young Savers Account:

Salient features Islamic concept

Al Baraka Bank Management Hierarchy

North Region Center Region South Region

Regional Manager Branch Manager

Operational Foreign Trade Credit &Marketing

Assistant Assistant Officer

SWOT ANALYSIS OF AL BARAKA BANK (PAKISTAN) LIMITED

SWOT analysis for Al Baraka Bank (Pakistan) Limited is as follow:

Commitment To Islamic Shariah

Concept Of Islamic Banking

Experienced And Qualified Staff

Good PR With Customers

Job Satisfaction At All Levels

Quarterly Performance Appraisal

No HR Department Level At Zone And Branch Level

Less Number Of Branches

Lengthy Recruitment Process

Lack Of Marketing Effort

Unfavourable Short Term Liquidity

More Qualified People In The Market

Effective Utilization Of Internal Human Resources

Training Can Enhance The Employee’s Skills

Al Baraka Bank (Pakistan) Limited is surrounded by many competitors; it has an opportunity to do

Uncertainty About Future Change